NEW YORK STATE BAR ASSOCIATION JournalJournalSEPTEMBER 2003 | VOL. 75 | NO. 7

Inside Pretrial Expert Disclosure Unconscionability Verifying Citations Trial Court Opinions Foreclosure Sales BOARD OF EDITORS ONTENTS Howard F. Angione C Editor-in-Chief Queens e-mail: [email protected] CLE Insights – Pretrial Expert Disclosure in Rose Mary Bailly State Court Cases Albany David Paul Horowitz 10 Willard H. DaSilva Garden City Does the Doctrine of Contractual Unconscionability Louis P. DiLorenzo Have a Role in Executive Compensation Cases? Syracuse Paul Bennett Marrow Philip H. Dixon 16 Albany ® ® Lesley Friedman Rosenthal A Tale of Legal Research – Shepard’s and KeyCite New York City Are Flawed (or Maybe It’s You) Judith S. Kaye Alan Wolf and Lynn Wishart 24 New York City John B. Nesbitt Electronic Discovery Can Unearth Treasure Trove of Lyons Eugene E. Peckham Information or Potential Land Mines Binghamton Lesley Friedman Rosenthal 32 Sanford J. Schlesinger New York City View From the Bench – The Role of Trial Court Richard N. Winfield Opinions in the Judicial Process New York City John B. Nesbitt Eugene C. Gerhart 39 Editor Emeritus Binghamton So Your Client Wants to Buy at a Foreclosure Sale: Daniel J. McMahon Pitfalls and Possibilities Managing Editor Bruce J. Bergman 43 Albany e-mail: [email protected] Philip C. Weis D EPARTMENTS Associate Editor Oceanside President’s Message ______5 Index to Advertisers ______55

EDITORIAL OFFICES Crossword Puzzle ______8 Classified Notices ______55 One Elk Street by J. David Eldridge New Members Welcomed ______57 Albany, NY 12207 Attorney Professionalism Forum ____ 50 2003-2004 Officers ______63 (518) 463-3200 Point of View ______52 The Legal Writer ______64 FAX (518) 463-8844 by Marvin Rachlin by Gerald Lebovits ADVERTISING REPRESENTATIVE Language Tips ______54 Network Publications by Gertrude Block Sheri Fuller Executive Plaza 1, Suite 900 11350 McCormick Rd. Hunt Valley, MD 21031 O N T HE C OVER (410) 584-1960 e-mail: [email protected] This month’s cover illustration recalls three prominent individuals and a corporation whose headline-making court experiences have been affected by the types of issues ON THE WORLD WIDE WEB: explored in the article on electronic discovery. http://www.nysba.org Cover Design by Lori Herzing.

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 cita- tions 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 © 2003 by the New York State Bar Association. The Journal (ISSN 1529-3769), 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, Sep- tember, October, November/December. Single copies $18. Periodical postage paid at Albany, NY and additional mailing offices. POSTMASTER: Send address changes per USPS edict to: One Elk Street, Albany, NY 12207. Journal | September 2003 3 We are reformers in spring and summer; the Rockland County Bar Dinner, in autumn and winter, we stand by the old; and a Cyberspace Law Committee reformers in the morning, conservers at PRESIDENT’S meeting in NYC. I met with the Lord night. Ralph Waldo Emerson. Chief Justice of Ireland at the Irish- Summer is the time when one sheds one’s MESSAGE American Bar, attended the Erie tensions with one’s clothes, and the right County Bar Dinner, met with our in- kind of day is jeweled balm for the battered surance administrators Bertholon- spirit. A few of those days and you can be- Rowland Corp., attended a sympo- come drunk with the belief that all’s right with the world. Ada Louise Huxtable sium for the Lawyer Assistance Trust, met with a representative of I am a part of all that I have met. Trial Lawyers Care to better publicize Alfred, Lord Tennyson. their need for lawyers to help people A committee is a group that keeps minutes file claims for the federal 9/11 fund, and loses hours. Milton Berle. participated in IOLA’s 25th birthday ith the coming of Labor celebration, and attended the New York Press Club installation event. Day, everyone tells me, the Wsummer has come to an The end of June brought the quar- end. (Officially, we need to wait for terly Executive Committee and the autumnal equinox, which is Sep- House of Delegates meetings, at tember 22.) It is common Bar lore which we approved new policies to assure expanded diversity in our that nothing much happens in the membership and leadership, and summer. Having now experienced continued our discussion of pro- my only summer as your president, I posed changes in our governance. am going to take this opportunity to Action on these proposals should put that canard to rest. A. THOMAS LEVIN come to closure at the November As our readers are certainly House meeting. aware, my term started on June 1, Now You Know What At the end of the legislative ses- even though the installation cere- sion, the focus was on reform of the mony occurred later in the month in I Did Last Summer “Rockefeller Drug Laws,” a subject Cooperstown. However, the action on which we have been outspoken in urging the gover- started right away, and on June 2 there I was in Albany, nor and legislative leaders to come to agreement. Our on the street in front of the (under renovation) Court of five-point proposal for breaking this logjam received a Appeals as we celebrated the passage of the long- great deal of favorable attention across the state, leading awaited (and still not adequate) increase in 18-b as- to innumerable media interviews and editorial com- signed counsel fees. (Lorraine Power Tharp could not ments. Unfortunately, the issue remains unresolved. have found a better way to end her tenure.) Our legislative activity continued, with our involve- Ever since then, it has been a whirlwind of thor- ment in revision of the laws that led to the Desiderio de- oughly enjoyable organized commotion. Getting the cision. Our litigation against the FCC to remove lawyers year’s programs off to a flying start, I appointed new from the effects of the Gramm-Leach-Bliley law committees that are going to bring some challenging achieved success, as the FCC agreed not to enforce the concepts to us in the months ahead. Among our newest law against lawyers while the litigation was pending, committees are the Committee on Diversity and Leader- and the court denied the FCC’s motion to dismiss the ship Development, the Special Committee to Review the case, holding that there was no indication that Congress Code of Judicial Conduct, Special Committee on the intended that lawyers be included in these regulations. Jury System, and the Special Committee to Review the We publicized our proposals for revision of the rules Annual Meeting. We also have existing Sections and governing multi-jurisdictional practice, and published a Committees working on some new studies of both old Spanish version of our consumer information pam- issues and new ones. phlets. Our Family Law Section initiated a program to June gave me some idea of the extent to which my assist litigants who felt that they had been treated un- credit card and my frequent flyer accounts would be in- fairly in cases before a judge who is under investigation timately involved with my term of office. Without list- for wrongful conduct. ing some of the gory details and the innumerable media A. THOMAS LEVIN can be reached at Meyer Suozzi English interviews and conference calls, I attended a focus & Klein, PC, 1505 Kellum Place, Mineola, N.Y. 11501, or group in Clifton Park helping us study our publications, by e-mail at [email protected].

Journal | September 2003 5 PRESIDENT’S MESSAGE Circuit. I am also arranging meetings with local bar leaders in various regions of the state, to discuss issues July continued apace. I made a presentation before of mutual concern, so keep an eye out for me. the Chief Judge’s Commission on the Jury, attended the Family Law Section summer meeting in Vermont, the We are a busy organization, indeed. My peripatetic Committee on Attorneys in Public Service meeting in summer has reinforced my great admiration for our Latham, the Public Utility Committee summer meeting many volunteers, and especially so for our outstanding in Cooperstown, the Finance Committee meeting in staff. We recently were described in London’s Legal Week NYC. I attended the celebration of the publication of the as the most influential bar association in the United Legal Manual for New York Physicians, a joint effort of the States. We owe all credit for that to our Committee and State Bar (Health Law Section and CLE Committee, Section members, our hard-working officers and Execu- sponsors) and the State Medical Society. Then there was tive Committee members, and most of all to the staff at an enjoyable lunch with some of the Fourth District bar the Bar Center. leaders, and the Tax Section summer meeting, at the Lastly, as I try to remind our members all the time, Sagamore. this is your State Bar. We are here to serve the interests Then the dog days of August included attending a of our members, and the public interest. We look for- breakfast for Attorney General Spitzer, meeting with ward to receiving your comments, favorable or not, and Senator Schumer to discuss our federal legislative inter- your ideas or suggestions. You can reach me at presi- ests, and then off to San Francisco for the National Con- [email protected] or [email protected] or through the ference of Bar Presidents, the Mid-Atlantic Bar meeting, State Bar Center. and the ABA Annual Meeting. (More about this in a mo- P.S. It’s nice to know that someone is actually reading ment.) Then, off to Newport for the Elder Law and Gen- this page each month. In response to my Laurel and eral Practice Section summer meetings (which at least Hardy reference in last month’s issue, two sharp-eyed enabled me to miss the blackout). The month closed out readers brought to my attention that the “fine mess” with the Lawyer Referral Service Committee meeting in quote was incorrectly attributed to Stan Laurel, when Albany and Saratoga. the phrase actually was uttered by Oliver Hardy. Con- At the ABA meeting, we became involved in the con- gratulations and thanks to Edward L. Birnbaum and troversial proposals to amend the ABA Model Rules to Richard G. Kass for bringing the error to my attention. permit lawyers to breach client confidentiality under But, nobody picked up that while the two comedians some circumstances. Our Executive Committee op- made a movie entitled A Fine Mess, the actual phrase posed these proposals without dissent. President-Elect which Oliver used in at least 14 films and many skits Ken Standard was most eloquent on this subject, and he was “here’s another nice mess you’ve gotten me into.” and I joined the leaders of the Florida Bar and California Bar, and various prominent ABA officials, including the new President-Elect Robert Grey, in opposing the pro- moving? posed amendments. The proponents included 10 past let us know. presidents, the then current president and the incoming president of the ABA, and the ABA leadership put on a Notify OCA and NYSBA of any changes to your full court press all week in support of the proposals. I’m address or other record information as soon as sorry to report that our opposition was unsuccessful, as possible! we lost on the key vote by 218-201, but this was hardly NYS Office of Court Administration a ringing endorsement of the amendments. Time will Attorney Registration Unit tell whether there is going to be a proposal to amend our PO BOX 2806 Code of Professional Responsibility in a similar manner. Church Street Station Our work and our activity continue. I hope to be able New York, New York 10008 212.428.2800 - tel to keep you informed of my future travels and adven- 212.428.2804 - fax tures, as the calendar gets fuller each passing day. With [email protected] - email the coming of the election season, our Committee on Ju- dicial Campaign Conduct has its program in place, New York State Bar Association ready to monitor judicial elections, in coordination with MIS Department One Elk Street local bars, so that the candidates adhere to the Code of Albany, NY 12207 Judicial Conduct. Our Committee on Judicial Selection 518.463.3200 - tel is also gearing up to participate in the process of select- 518.487.5579 - fax ing a new Court of Appeals judge, to fill the vacancy re- [email protected] - email sulting from the elevation of Judge Wesley to the Second

6 Journal | September 2003 CROSSWORD PUZZLE

The puzzles are prepared by J. David Eldridge, a partner at Pachman, Pachman & Eldridge, P.C., in Commack, NY. A graduate of Hofstra University, he received his J.D. from Touro Law School. (The answers to the puzzle are on page 56.)

Across 1 2 3 A recognized defense to a crime 3

committed to avoid a more serious 4 and imminent public or private in- 5 6 7 8 jury (PL § 35.05) 5 The defense showing that the de- 9 10 11 fendant was somewhere else when 12 13 the crime was committed 14 15 11 A defendant’s admission of a crime in exchange for conviction 16 of a lesser offense 14 Criminal liability for assisting an- 17 other in the commission of a crime 18

(PL § 20.00) 19

16 Establishes the constitutional right 20 21 22 to an attorney 17 Security posted with the court to insure defendant’s return in future 23 24 proceedings 25

18 You have the right to remain 26 27 silent . . . 20 The only one allowed to enter a plea to an indictment against a 28 29 corporation (CPL § 220.50) 30 31 21 Doctrine allowing warrantless

search and seizure of fleeing felon 32 33 34 23 Conferring a benefit upon a public 35 servant 26 Why an appellate court will not 36 37 overturn a conviction based upon 38 an involuntary admission wrong- 39 fully admitted into evidence 27 A court’s formal questioning of a 40 41 defendant as to the sentencing about to be imposed 29 Accusatory instrument filed by a 42 grand jury charging one or more individuals with the commission Criminal Minds, by J. David Eldridge of a crime (PL § 200.10) 31 An adjournment of a criminal action with a 2 Misdemeanor of initiating an individual into 19 Guards against unreasonable search and view to ultimate dismissal pursuant to PL an organization through conduct creating sub- seizure § 170.55 stantial risk of physical injury (PL § 120.16) 22 Where the defendant is released on his own 32 What a person tenders when he knows there 4 Law providing for dogcatchers without the need to post bail are insufficient funds to cover his instrument 6 Statutory defense relieving a minor defendant 24 Charging interest over 25% 34 What follows the filing of a simplified or crimi- of certain criminal liability (PL § 30.00) 25 An offense, other than a “traffic infraction,” nal information charging a person with a mis- 7 Innkeeper’s statutory liability for selling alco- punishable by no more than 15 days of impris- demeanor (PL § 170.10) hol to an intoxicated patron (General Obliga- onment 36 Affirmative defense showing that defendant tions Law § 11-101) 28 A sentence for a crime providing for the defen- withdrew from and made substantial efforts to 8 An offense punishable by imprisonment of dant’s release into the community (PL § 65.00) prevent commission of conspiratorial plan (PL more than 15 days and less than one year (PL § 30 Doctrine allowing warrantless search and § 40.10) 10.00) seizure where evidence or fruit of a crime is 39 Term designating illegally obtained evidence 9 What is required before a defendant can be openly visible 40 The providing of false testimony material to a convicted of a crime based upon the testimony 33 Prohibited sexual intercourse with a married criminal action (PL § 210.15) of an accomplice (PL § 60.22) person (PL § 225.17) 41 What a person is charged with under VTL 10 New York’s rule providing for mandatory dis- 35 A person who sustained physical or financial § 1192 closure to defendant injury as the result of a crime (PL § 215.20) 42 Affirmative defense where defendant was in- 12 Group of citizens empanelled to view evidence 37 What the jury foreperson must announce pur- duced to commit a crime he would not other- and determine whether a bill of indictment suant to PL § 310.40 wise have committed (PL § 40.05) should be had 38 A crime punishable by imprisonment in excess Down 13 Sexual conduct with another in return for a fee of one year 1 Any item readily capable of causing death or (PL § 230) serious physical injury 15 What the prosecution must provide a defen- dant pursuant to CPL § 30.30

8 Journal | September 2003 CLE Insights Pretrial Expert Disclosure In State Court Cases

EDITOR’S NOTE: The following is another in a series of articles reflecting insights and information pre- sented at a NYSBA Continuing Legal Education program. This digest of the speaker’s presentation provides a general overview of pretrial expert disclosure. BY DAVID PAUL HOROWITZ

retrial disclosure of expert witness information1 Content of the Demand and was enacted to eliminate “trial by ambush” by re- Exchange, Generally Pquiring parties, upon demand, to furnish specified An expert demand should be served by all parties at expert information prior to trial, for experts the parties the outset of disclosure. There is no requirement that the expect to call at trial. While far more restrictive than ex- demand use any particular language, and even one that pert disclosure in federal practice, the provisions of the simply requests information pursuant to CPLR statute, CPLR 3101(d), can be critically important, and 3101(d)(1)(i) should be sufficient to trigger a complete often are a source of contention. response. It would be wise, however, to serve a demand The statute specifies the categories of expert informa- tracking the specific categories of information enumer- tion to be exchanged: the witness’s identity;2 the antici- ated in the statute and, where appropriate, to incorpo- pated subject area of the testimony; the substance of the rate a demand for specific information subject to ex- facts and opinions on which the expert is expected to change under existing case law. Some practitioners testify; the qualifications of the expert; and a summary serve lengthy and detailed demands for expert informa- of the grounds for the expert’s opinions. While there are tion that go well beyond what 3101(d)(1)(i) contem- three subparts to 3101(d)(1), subpart (i) sets forth the plates, and counsel should object to demands that go be- general exchange requirements noted here and the tim- yond what is required by the statute. ing requirements, two areas that underlie most of the Good practice would suggest interposing a specific disputes that arise in expert disclosure. objection to each of them, along the lines of the method for interposing objections to disclosure set forth in Uses of the Response CPLR 3122. This may lead the party seeking the infor- CPLR 3101(d) enables a party to learn, in advance of mation to move, early in the case, to compel a response, trial, certain information about experts an opponent with the result being that the parties would obtain an plans to call at trial. This information is only available early judicial determination of the adequacy of the ex- upon demand, and shall furnish the qualifications of the expert, the areas of his or her testimony and the antici- DAVID PAUL HOROWITZ is the principal pated scope of the testimony. A “responsive” response in the Law Office of David Paul to a CPLR 3101(d) demand should provide sufficient in- Horowitz and a member of Ressler & formation to prepare topics and questions for cross-ex- Ressler, both in New York City, where amination of the expert, and to ascertain the need for he focuses his practice in plaintiffs’ any rebuttal experts. personal injury actions. Mr. Horowitz It is even possible that the response may lead to sum- is an adjunct professor of law at New mary disposition of the case. Failure to adequately set York Law School where he teaches New York practice. Currently, he is forth the scope or foundation of the expert’s anticipated writing a book entitled New York Civil Disclosure Practice, testimony, or the failure to indicate an area to be covered to be published this winter by Lexis/Nexis. Mr. by the expert where expert testimony is required in Horowitz is a graduate of the College of the City Univer- order to make out a prima facie case (e.g., a design defect sity of New York and received his J.D. from Fordham in a product liability case), can be the basis for a suc- University School of Law. This article is excerpted from cessful summary judgment motion prior to trial or a his CLE lectures on expert disclosure. preclusion motion during trial.

10 Journal | September 2003 change. If the court found the response to be inade- of the expert’s testimony solely because of noncompli- quate, the ruling would occur with time to supplement ance with 3101(d)(1). This does not, of course, mean that the response. an expert cannot be precluded due to a late expert ex- Just as it is good practice to track the language of the change. In such cases, the court may, upon motion of statute in the demand, it is likewise sound to do so in any party, before or at the time of trial, make “whatever the response. Very often a response cannot be made to a order may be just.” It is important to note that there is a demand made at the very beginning of a case, because it commonly held belief/perception that expert informa- is often the situation that a party receiving a demand tion must be exchanged at least 30 days prior to trial. will not have identified conclusively the expert who will There is no such rule.4 be called to testify at trial. This is generally not a prob- It has become more commonplace for courts to estab- lem because the statute does not specify a particular lish specific deadlines in Preliminary Conference Orders time for the expert disclosure. (More on the timing of a and Compliance Conference Orders for expert ex- response appears below.) As change. Courts in certain judi- a result, it is both permissible cial districts have enacted and common for an initial ex- The key to almost all court specific timetables for fur- pert response to be no more nishing responses. For exam- than “plaintiff/defendant has decisions made on the ple, the Third Judicial District, not yet retained an expert to timeliness of an expert the first to do so, promulgated testify at the time of trial.” a rule under which the party What about changes to exchange is prejudice to the who has the burden of proof the initial response, particu- demanding party who did on a claim or defense must larly in the case where a re- serve its response to a 3101(d) sponse has been served early not receive a timely response. demand before the filing of a in the case? CPLR 3101(h), note of issue, and the adverse “Amendment or supplemen- party has 60 days after receiv- tation of responses,” applies to expert exchanges under ing this response to serve any answer. Unless the court 3101(d) even though there is nothing in the CPLR called directs otherwise, failure to comply leads to preclusion an “amended” or “supplemental” expert exchange. of the testimony of the expert who is the subject of the Technically speaking, if expert information has been demand and response. This can be a devastating blow, previously exchanged and a party determines that addi- especially in cases where expert testimony is required to tional information is needed, the additional information make out a claim. to be provided concerning a previously exchanged area In view of the increasing use of individual court rules of testimony should be styled a supplemental expert ex- to establish exchange periods, it is crucial to find out change, while additional information concerning a new whether a particular court employs them and, if it does, area of testimony should be styled an amended expert to comply with the requirement. It is good practice to exchange. Most practitioners tend to identify all re- create an internal diary deadline for an overall file re- sponses following the initial one as a supplemental ex- view 30 or even 60 days in advance of the deadline for change rather than an amended exchange; the use of filing a note of issue in the case, which should include a one or the other should not ever cause a problem. review of the status of expert exchanges and a check of Disclosure concerning the expected testimony of any any applicable rules. expert that goes beyond the scope of 3101(d) may be ob- Even without a specific court rule, the amount of tained only by court order “upon a showing of special time that has passed between the date when the expert circumstances and subject to restrictions as to scope and was first retained and the exchange of information is a provisions concerning fees and expenses as the court 3 factor to be considered by a reviewing court called to may deem appropriate.” Accordingly, if adversary rule on timeliness. While many practitioners are loath to counsel will not agree to provide the additional infor- exchange expert information any earlier than is ab- mation requested, a motion will be needed. solutely necessary, early exchanges serve to limit dis- Timing of the Expert Exchange putes to the adequacy of the information provided, and CPLR 3101(d)(1)(i) does not set a rigid timetable for may be an aid to settlement. The benefit of a timely re- disclosure. It simply provides that where a party “for sponse is that a claim of laches may be made in response good cause shown” retains an expert an insufficient pe- to a late challenge of the adequacy of the response, and riod of time before the commencement of trial to give many attorneys wait to challenge the substance of the “appropriate” notice, there is no mandatory preclusion response until the time of trial.

Journal | September 2003 11 As a final note in this section, the key to almost all perts not prepare a report. This is to avoid disclosure, in court decisions made on the timeliness of an expert ex- whole or in part, if the adverse party subpoenas the ex- change is prejudice to the demanding party who did not pert’s file into court at time of trial, providing fertile receive a timely response. Consequently, when oppos- ground for cross-examination. ing a motion to preclude on the ground of untimeliness, In general, there also is no right to an examination be- it is essential to argue and demonstrate that the oppos- fore trial of an expert, excepting a party’s treating doc- ing party has not suffered any prejudice. A careful tor, dentist or podiatrist.7 If, however, there has been search of prior discovery may provide a sufficient basis spoliation of evidence, the expert who reviewed that ev- for demonstrating to the court that the demanding party idence might be ordered to be deposed on that basis. If had adequate notice of the claims being advanced by the this occurs, counsel should limit the questioning to the expert. If, however, a preclusion order seems likely, of- expert’s factual observations, not the opinions formu- fering a written report (if one exists), or even a deposi- lated as a result of those observations, consistent with tion of the expert, may very well undermine, or serve to the limitations courts may place on such disclosure cure, the asserted prejudice. under CPLR 3101(d)(2). This subsection provides that in the event of expert disclosure “the court shall protect Inadequate Responses against disclosure of the mental impressions, conclu- Very often an expert response is served that does not sions, opinions” of the expert. provide the information called for in the statute. Entire topic areas may be omitted, or the response may be so Admissibility of Expert Testimony vague or jammed with boiler-plate language that no Although this discussion has focused on pretrial ex- meaningful information is provided. When this hap- pert information exchange, a practitioner must always pens, the demanding party must make a tactical deci- do so with one eye to the trial. It is crucial to consider sion whether to demand additional information – admissibility in selecting and noticing an expert. While thereby allowing the responding party to cure any de- the issue may seem a long way off when a CPLR fects in the response – or to wait, hoping to gain preclu- 3101(d)(1)(i) response is first served, it cannot be ig- sion or limitation of the expert’s testimony by attacking nored because a response that suggests a lack of foun- the adequacy of the response at the time of trial. dation for admissibility may trigger a motion to dismiss The practice of many attorneys is to do the latter, and or to preclude. seek relief by way of a summary judgment motion or The standards are often easier to state than to apply trial preclusion based on the inadequate response. How- in a given case, but they must be understood. New York ever, a summary judgment motion on this ground gen- State courts traditionally have followed and applied the erally must be made prior to the outside time for ex- Frye8 test in determining whether an expert’s testimony changing expert information,5 so it will often prompt a should be admitted, but more recently courts have supplemental expert exchange, which serves to correct begun to look to Daubert.9 the defects in the original response and denial of the In very basic terms, the role of a court under Frye is motion. It would appear that upon receiving an inade- to decide if the scientific basis for the proposed testi- quate response, the better practice is generally to write mony is generally accepted in the scientific community. immediately to opposing counsel, specifying the omit- Under Daubert, however, the general acceptance of the ted or inadequate information. If this does not yield an scientific community is not the key. Rather, in perform- adequate supplemental response, a motion should be ing what the Supreme Court referred to as a “gate-keep- made to compel the exchange or, in the alternative, to ing” function, the trial court makes an initial determina- preclude use of the expert. If time does not permit this tion, after a hearing, as to whether the expert is qualified approach, a motion in limine to preclude all or part of the to testify. The tests to be applied are (1) whether the ex- expert’s testimony should be made to the trial judge. pert’s concept has been tested, (2) whether it has been Limits on Expert Disclosure subjected to peer review, (3) what the known rate of error is and (4) whether the concept is generally ac- Despite the purpose of the statute – to prevent an am- cepted by the scientific community to which it belongs. bush at trial – CPLR 3101(d) does not require full dis- In the later case of Kumho Tire,10 the Supreme Court held closure of an expert. An expert’s written report, if one these factors to be applicable not only to scientific testi- has been prepared, generally is not available to the ad- mony, but to all expert testimony. verse party; it would be considered materials “prepared in anticipation of litigation” and would be provided As matters stand now, it appears that the “general ac- only if a court orders its production.6 Many experienced ceptance” test of Frye will still be applied by New York practitioners, however, specifically request that their ex- CONTINUED ON PAGE 14

12 Journal | September 2003 CONTINUED FROM PAGE 12 2. The scope of this discussion does not include the special rules applicable to medical malpractice cases, State courts where the issue is the reliability and admis- which have additional and often controversial require- ments, especially with regard to disclosure of the sibility of novel scientific evidence. However, experts medical expert’s identity. See Thomas v. Alleyne, 302 may increasingly be held to the reliability standards of A.D.2d 36, 752 N.Y.S.2d 362 (2d Dep’t 2002). Of course, Daubert and Kumho Tire. The case of Wahl v. American medical experts are used in personal injury actions, and Honda Motor Co.11 provides a nice analysis of these is- the more general provisions of CPLR 3101(d) still apply to them. sues. As a caveat, this is an evolving area, and practitio- 3. CPLR 3101(d)(1)(iii). ners must pay close attention to new appellate cases on 4. For a useful review of the apparently conflicting require- the subject. In the interim, it would be wise to consider ments regarding the timing of expert responses, see Marks v. Solomon, 174 Misc. 2d 752, 667 N.Y.S.2d 194 (Sup. the admissibility of a prospective expert under both Frye Ct., Westchester Co. 1997). and Daubert. 5. See CPLR 3212. Conclusion 6. CPLR 3101(d)(2). While each case will present a unique factual context 7. See CPLR 3101(a)(3). for the selection of an expert, it is difficult to overstate 8. Frye v. United States, 293 F. 1013 (D.C. Cir. 1923). the importance of thinking through an “expert issue” early in the litigation, and then carefully monitoring 9. Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993). pretrial compliance with CPLR 3101(d). 10. Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999). 11. 181 Misc. 2d 396, 693 N.Y.S.2d 875 (Sup. Ct., Suffolk Co. 1. CPLR 3101(d)(1) (“Trial preparation” – “Experts”). 1999).

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14 Journal | September 2003 Does the Doctrine of Contractual Unconscionability Have a Role In Executive Compensation Cases?

BY PAUL BENNETT MARROW

n In re Walt Disney Company Derivative Litigation,1 the mores and business practices of the time and place as to 4 shareholders of Disney challenged the propriety of a be unenforceable according to its literal terms.” Icontract entitling Michael Ovitz to receive approxi- Over time the concept has been codified. Today ex- mately $140,000,000 in exchange for services as presi- amples of such authority are found in the Uniform dent of Disney for about one year. The parties were at Commercial Code5 (UCC) and the Real Property Law loggerheads over the application of the business judg- (RPL).6 These statutes charge courts with the power as a ment rule in a claim of corporate waste. The defendants matter of law to identify unconscionable terms and fash- argued that the decision to extend the contract to Ovitz ion an appropriate remedy – usually the refusal to en- was not unconscionable and therefore the decision was force an offending term. These provisions operate inde- protected by the business judgment rule. pendently of other efforts to regulate commercial But wait! Why all the fuss over the business judg- activity and the contracting process. ment rule? Isn’t this really a dispute about the uncon- There is no shortage of reported cases discussing scionability of the contract itself and not the decision to what is and what is not an unconscionable term or con- enter into it? And isn’t this really a case about the doc- dition. That said, slogging through it all leads to the in- trine of contractual unconscionability? escapable conclusion that the waters are murky at best. Contractual unconscionability is something studied In 1967, Professor Arthur Leff suggested that contrac- in law school and rarely considered afterwards. Why do tual unconscionability has two component parts: one 7 practitioners often overlook advancing it as a viable and procedural, and one substantive. powerful argument? Probably because the doctrine: Procedural contract unconscionability speaks to the • Is perceived as being somewhat irrelevant, given negotiation or pre-contract stage of contract formation. today’s array of statutory schemes attempting to regu- Substantive contract unconscionability speaks to the ac- late all facets of commercial activity and contractual be- tual operation of the contract. Courts throughout the havior; and United States have widely accepted this approach, al- • The doctrine seems to mimic and duplicate other though many have expressed concern about the wis- common law theories such as fraud and perhaps even dom of always requiring a showing of both compo- the business judgment rule. nents. What many miss is that the doctrine is flexible2 and Procedural contract unconscionability is about over- that, within the context of the common law, it is unique reaching that results in surprise. It is important to rec- and distinct from other theories, especially the business ognize that overreaching never comes about by acci- Disney judgment rule. The litigation is illustrative of the CONTINUED ON PAGE 18 doctrine’s exceptional flexibility.

A Brief Refresher PAUL BENNETT MARROW serves of Contractual unconscionability is about the operation counsel to Banks Shapiro Gettinger of terms in a contract. The theory was originally de- Waldinger & Brennan, in Mt. Kisco. signed to defeat through equity contract terms that “no He is a graduate of Case Western Re- serve University and received his J.D. man in his senses and not under delusion would make from New York Law School. on the one hand and as no honest and fair man would 3 He wishes to thank the Hon. accept on the other.” Charles G. Banks and Robert N. Matt- In New York, the Court of Appeals defines contrac- son, Esq. for their comments and in- tual unconscionability as a contract that is “so grossly sights in the preparation of the article. unreasonable or unconscionable in the light of the

16 Journal | September 2003 CONTINUED FROM PAGE 16 This brings us to the complaint in the Disney litiga- tion.10 In 1995, the Walt Disney Company entered into dent. The procedural component therefore almost al- an employment agreement with Michael S. Ovitz pur- ways involves some degree of intentionality. For this suant to which Ovitz agreed to serve as president of the reason, the doctrine is said to sometimes resemble other company for five years. The plaintiffs alleged that in theories involving intentional torts such as fraud and doing so the defendants breached their fiduciary duties duress.8 Procedural contract because they “blindly ap- unconscionability can have proved an employment an impact on both parties to agreement with the defen- the agreement and others, Is it per se unconscionable dant Michael Ovitz and while substantive contract to pay someone an exorbitant then, again without any re- unconscionability has an im- view or deliberation, ig- pact only on the parties to amount of compensation? At first nored [another defendant’s] an agreement. The defini- glance, the business judgment rule dealing with Ovitz regard- tion of substantive contract ing his non-fault termina- unconscionability is left to would seem to answer the question tion.”11 the case-by-case discretion of the court. in the negative. The agreement provided that compensation would be The court has the equi- limited if Ovitz was termi- table power to refuse to en- nated for cause, defined in the agreement as gross neg- force an unconscionable contract provision: it can “blue ligence or malfeasance in the performance of duties. But pencil” the provision and even rewrite the contract to if termination were “Non-Fault” he would receive lav- achieve an equitable result. For instance, assume a con- ish compensation. Ovitz clearly had good reason to tract with a liquidated damage clause that is insufficient want to be terminated on a “Non-Fault” basis. At least to cover actual damages: The court can open the way for one member of the Disney Compensation Committee the plaintiff to recover a full measure of economic dam- was assisted by an outside consultant.12 Plaintiffs ages by refusing to uphold the liquidated damage claimed that Ovitz failed to perform any of his duties as clause. In this scenario, and all scenarios where the court president of the company and that he was terminated resolves the issue through equity, there is an implicit (“Non-Fault”) approximately a year into the term of the recognition that the effect of the tainted clause is limited agreement under circumstances that wrongfully enti- to the parties to the contract.9 tled him to compensation that plaintiffs allege amounted to over $140,000,000. The Link to the Disney Contract The plaintiffs claimed that (1) the circumstances sur- As noted earlier, it is easy to overlook the doctrine of rounding the termination underscored Ovitz’s total fail- contract unconscionability because it seems to mimic ure to perform; (2) this resulted in two letter agreements other legal and equitable theories. Compare a claim in confirming the willingness of the Company and Ovitz equity for the waste of corporate assets seeking restitu- to treat the termination as “Non-Fault”; and (3) this per- tion under a contract to avoid unjust enrichment with a mitted Ovitz to collect compensation under favorable case anchored to the theory of contractual uncon- terms. scionability. While the underlying theories may appear at Based on this, the plaintiffs claimed that the defen- first to be identical because they are both rooted in un- dants did not proceed in good faith, that the contract just enrichment, they are not. was a waste of Disney’s assets and that the transaction Corporate waste involves the application of the busi- fell outside the protection afforded by the business judg- ness judgment rule and (1) whether the business decision ment rule.13 Plaintiffs sought rescission and/or money was unconscionable and (2) thus whether entering into damages from the defendants and Ovitz for damages the contract in the first place was appropriate. To the ex- sustained by Disney and the disgorgement of Ovitz’s tent that unconscionability is a factor, judicial review is unjust enrichment. The plaintiffs, however, did not chal- deflected from the unconscionability of the contract it- lenge either the original agreement or the subsequent self and instead focuses on the decision-making process. letter agreements on the grounds that they were tainted The operation of the agreement is secondary. On the with unconscionability. other hand, an unconscionable contract case focuses on Is it per se unconscionable to pay someone an exorbi- the substantive operation of the contract. The decision- tant amount of compensation? At first glance, the busi- making process is secondary. Each theory can produce a ness judgment rule would seem to answer the question totally different result, despite an identical fact pattern. CONTINUED ON PAGE 20

18 Journal | September 2003 CONTINUED FROM PAGE 18 Overcoming the presumption by showing that a in the negative.14 The inquiry about unconscionability given decision was unconscionable is virtually impossi- should not end there, however. ble. This is because when deciding whether sound busi- ness judgment has been exercised, a court is required to Many states, New York included, hold that when validate a transaction “if it can be said that ordinary contractual unconscionability is involved, a contract businessmen might differ on the sufficiency”19of con- framed as a mutual exchange is substantively uncon- tract terms. From this one can reasonably conclude that scionable as a matter of law if it is actually a clear give- unconscionable contract terms can be allowed to oper- away for nothing of value in return.15 Most importantly ate if a board can establish that reasonable people can under such circumstances, New York courts appear pre- differ about the propriety of entering into a given con- pared to dispense with the requirement that procedural tract. In other words, application of the business judg- unconscionability must be shown to gain relief.16 Within ment rule permits a board to substitute its judgment the context of the Disney case, this would mean that a about the unconscionability of a contract term for the contract to pay an exorbitant amount of compensation judgment of a court. This reality prompted one observer in exchange for an acknowledged failure to perform is to note recently: contractually unconscionable. Because the rule protects business decisions to such a degree as to render meaningless any scrutiny given to a The business judgment rule decision, the rule recently has been used to effectively insulate business decisions from judicial review.20 should not be applied in a manner The possibility of insulation from judicial review is that precludes review by courts avoided when the claim is about contractual uncon- of issues involving contract scionability. The validity of a board decision notwith- standing, the claim directs the attention of the court to unconscionability. the validity of the suspect term or condition. Some may argue that this approach is unnecessary and makes a mockery of the business judgment rule. It should be noted that the original contract did not This argument assumes that the business judgment rule automatically guarantee that Ovitz would collect was designed to address contract unconscionability, $140,000,000 for about one year’s effort. The termination which it was not, and leads to the conclusion that a provisions need not have come into play if Ovitz had board of directors should be allowed to accept an other- performed as promised. The subsequent letter agree- wise unconscionable term if it can show that some other ments and the circumstances surrounding them, how- board, someplace, would be willing to debate the wis- ever, created conditions allowing payment. This sug- dom of such a decision. This would entitle a board of di- gests contract unconscionability because of the alleged rectors to substitute its judgment about unconscionabil- confirmation by the company that, in fact, Ovitz had not ity for the judgment of a court, a position that is not performed at all as required under the original agree- sanctioned by our system of jurisprudence. It would be ment. Seen in this light, the letter agreements became tantamount to giving the fox complete reign over the the instrument entitling Ovitz to the windfall and thus chicken coop. would seem to support the claim of contractual uncon- scionability. Conclusion Why is this important? The business judgment rule The business judgment rule is designed to relieve supports a presumption in favor of a board of directors courts from having to second-guess corporate directors that a given decision reflects sound business judg- who exercise sound business judgment. By the same ment.17 The plaintiff has the burden to rebut the pre- token, just because acceptance of a contract may be a sumption by showing, among other things, that the de- sound business judgment, this does not change the real- cision was unconscionable. If the plaintiff fails, the ity that a contract can still be tainted by substantive un- contract stands without concern for its operation. The conscionability. Only a court can make that determina- Delaware Supreme Court recently explained that: tion. In short, the business judgment rule should not be To survive a Rule 23.1 motion to dismiss in a due care applied in a manner that precludes review by courts of case where an expert has advised the board in its deci- issues involving contract unconscionability. From this it sionmaking process, the complaint must allege particu- larized facts (not conclusions) that, if proved, would reasonable to conclude that the doctrine of contract un- show, for example that: . . . (f) the decision of the Board was 18 so unconscionable as to constitute waste or fraud. . . . CONTINUED ON PAGE 22

20 Journal | September 2003 CONTINUED FROM PAGE 20 mined that a given fact pattern doesn’t fall within the four corners of a given statutory scheme. conscionability has application to some issues involving 10. All references are to the Second Amended Consolidated executive compensation. Derivative Complaint, C.A. 15452. 11. In re Walt Disney Co. Derivative Litig., 825 A.2d 275 (Del. Ch. 2003), prior motion to dismiss in same case reported at 1. 825 A.2d 275 (Del. Ch. 2003), prior motion to dismiss in 731 A.2d 342 (Del. Ch. 1998), aff’d in part, rev’d in part sub same case reported at 731 A.2d 342 (Del. Ch. 1998), aff’d in nom. Brehm v. Eisner, 746 A.2d 244 (Del. Sup. Ct. 2000). part, rev’d in part sub nom. Brehm v. Eisner, 746 A.2d 244 (Del. Sup. Ct. 2000). 12. Plaintiffs claimed, however, that the consultant’s services were ancillary to other advisory work being performed 2. See Gillman v. Chase Manhattan Bank, N.A., 73 N.Y.2d 1, 10, and in any case, did not include rendering any formal 537 N.Y.S.2d 787 (1988). “The doctrine, which is rooted in opinion or recommendation concerning the terms of the equitable principles, is a flexible one. . . .” See also State of contract. See Second Amended Consolidated Derivative New York v. Avco Fin. Serv., 50 N.Y.2d 383, 389–90, 429 Complaint, C.A. 15452, paras. 7, 35, 43–45, 47; see also N.Y.S.2d 181 (1980). para. 68. 3. Earl of Chesterfield v. Jannsen, 28 Eng. Rep. 82, 100 (Ch. 13. Walt Disney Co. Derivative Litig., 825 A.2d 275. See 1750); see Avildsen v. Prystay, 171 A.D.2d 13, 574 N.Y.S.2d Gagliardi v. TriFoods Int’l, Inc., 683 A.2d 1049, 1052 (Del. 535 (1st Dep’t 1991). Ch. 1996); Aronson v. Lewis, 473 A.2d 805 (Del. 1984). The 4. Gillman, 73 N.Y.2d at 10. business judgment rule provides that directors of corpo- rations are shielded from liability for their good faith ex- 5. See UCC §§ 2-302, 2-719. ercise of business judgment. “Technically, the [Business 6. See RPL § 235-c. Judgment Rule] has four essential elements: (1) good 7. Arthur A. Leff, Unconscionability and the Code: the Em- faith, (2) no self-dealing or self-interest, (3) an informed peror’s New Clause, 115 U. Pa. L. Rev. 485, 487 (1967). decision, and (4) a reasonable belief that the decision is in the best interest of the corporation.” Kenneth B. Davis, Jr., 8. Maxwell v. Fidelity Fin. Servs., Inc., 184 Ariz. 82, 89 (1995). Once More: The Business Judgment Rule, 2000 Wis. L. Rev. 9. There may be circumstances in which an unconscionable 573, n.1 (2000). term can have an impact extending beyond the parties to 14. But cf. Saxe v. Brady, 184 A.2d 602 (New Castle 1962); a given contract. This would be the case where the proce- Grimes v. Donald, 673 A.2d 1207 (1996). dural unconscionability, i.e., overreaching, undermines 15. In re Friedman, 64 A.D.2d 70, 84–85, 407 N.Y.S.2d 561 (2d the sanctity of the contracting process. Arguments are Dep’t 1978); Maxwell v. Fidelity Fin. Servs., Inc., 184 Ariz. being worked out to address the question of whether or 82, 89–90, 907 P.2d 51 (1995), and cases cited therein at not embedded in the doctrine is a tort component giving n.3; Resource Mgmt. Co. v. Weston Ranch & Livestock Co., rise to claims for consequential and punitive damages in 706 P.2d 1028 (Utah 1985). such circumstances. Paul Bennett Marrow, Crafting a Rem- edy for the Naughtiness of Procedural Unconscionability, 16. Gillman v. Chase Manhattan Bank, N.A. 73 N.Y.2d 1, 12, 537 available in the Spring of 2004. A copy will be made N.Y.S.2d 787 (1988); State v. Avco Fin. Serv., 50 N.Y.2d 383, available on request directed to pbmarrow@optonline 429 N.Y.S.2d 181 (1980); Brower v. Gateway 2000, 246 .net. Many statutory schemes have been designed to at- A.D.2d 246, 676 N.Y.S.2d 569 (1st Dep’t 1998); Master tempt to regulate improper conduct in the commercial Lease Corp. v. Manhattan Limousine, Ltd., 177 A.D.2d 85, arena and many assume that they are all inclusive. But 580 N.Y.S.2d 952 (2d Dep’t 1992); Friedman, 64 A.D.2d at they are not. Most prominent are schemes designed to 84–86; Hanover Ins. Co. v. Losquadro, 157 Misc. 2d 1014, 600 address consumer fraud, consumer rights, and insurance N.Y.S.2d 419 (Sup. Ct., N.Y. Co. 1993); Jones v. Star Credit and securities sales practices. In addition, many states Corp., 59 Misc. 2d 189, 298 N.Y.S.2d 264 (Sup. Ct., Nassau have adopted unfair trade practices legislation. See, e.g., Co. 1969) (Wachtler, J.). Cal. Bus. & Prof. Code § 17200; Conn. Gen. Stat. § 42- 17. Aronson v. Lewis, 473 A.2d 805, 812 (Del. Sup. Ct. 1984); 110(b); F.S. § 501.201 et seq.; Me. Rev. Stat. Ann. title 10, see Brehm v. Eisner, 746 A.2d 244, 264 n.66 (Del. Sup. Ct. § 1212(1). But because these statutes are situation specific, 2000). it is not uncommon to discover judicial interpretations 18. Brehm, 746 A.2d at 262 (emphasis added). that exclude from their scope factual scenarios that 19. Saxe v. Brady, 40 Del. Ch. 474, at 22–23 (New Castle 1962). would appear to involve contractual unconscionability. Judicial interpretations have even determined that the Where waste of corporate assets is alleged, the meaning of “unfair” within the context of some unfair court, notwithstanding independent stockholder trade practices legislation excludes unconscionable con- ratification, must examine the facts of the situation. tracts on the grounds that the proper remedy is in equity, Its examination, however, is limited solely to dis- not law. See Dep’t of Business Regulation v. Nat’l Manufac- covering whether what the corporation has re- tured Hous. Fed’n, Inc., 370 So. 2d 1132, 1136 (Fla. 1979); ceived is so inadequate in value that no person of Point East One Condominium, Inc. v. Point East Developers, ordinary, sound business judgment would deem it Inc., 348 So. 2d 32, 36 (Fla. 3d D.C.A. 1977). For a discus- worth what the corporation has paid. If it can be said sion of the Florida rules, see Federbush, The Unclear Scope that ordinary businessmen might differ on the sufficiency of Unconscionability in FDUTPA, 74 Fla. B.J. 49 (July/Aug. of the terms, then the court must validate the transaction 2000). But compare Cheshire Mortgage Servs., Inc. v. Montes, (emphasis added). 223 Conn. 80, 105–106, 612 A.2d 1130 (1992); People v. 20. Lori B. Marino, Comment: Executive Compensation and the McKale, 25 Cal. 3d 626, 159 Cal. Rptr. 811 (1979); People ex Misplaced Emphasis on Increasing Shareholder Access to the rel. Lockyer v. Freement Life Ins. Co., 104 Cal. App. 4th 508, Proxy, 147 U. Pa. L. Rev. 1205, 1238 (1999). See Carl T. 128 Cal. Rptr. 2d 463 (2d Dist. 2 2002). This suggests that Bogus, Excessive Executive Compensation and the Failure of it may be a mistake to stop the analysis when it is deter- Corporate Democracy, 41 Buff. L. Rev. 1 (1993).

22 Journal | September 2003 A Tale of Legal Research Shepard’s® and KeyCite® Are Flawed (or Maybe It’s You)

BY ALAN WOLF AND LYNN WISHART

ally Smith, a first-year associate at an Iowa law Failing to Look Forward in Time firm, is handed her first assignment. The client, a To understand why Mincey appears to be good law, Sfarm worker, was struck by lightning while pick- look at the timeline of Figure 1. ing corn. His worker’s compensation claim was denied Hanson cited to Wax and explicitly overruled it, but on the ground that lightning is a hazard unrelated to his Hanson did not cite to Mincey. When Shepard’s and employment. Sally’s supervising partner advises her KeyCite processed Hanson, they added negative treat- not to devote an inordinate amount of time to research, ment codes to Wax, but they failed to look forward in given the high cost of the firm’s LexisNexisTM service time from Wax to find cases like Mincey that explicitly and the relatively small size of the case. rely on Wax. Sally, who considers herself a good online researcher, In short, while the citation services send negative treat- goes to the Iowa state case law database and performs ment backwards in time, they fail to finish the job by moving the “terms and connectors” search: (str! /3 lightning) it forward in time. and (work! /3 compensation). In correspondence with the authors, representatives The search brings up four cases, the most recent of LexisNexis1 and Westlaw2 concede that their citators being Mincey v. Dultmeier Manufacturing Co., 223 Iowa do not handle what Westlaw refers to as “implicit” cita- 252, 272 N.W. 430 (1937). Mincey is directly on point, but tion.3 it applies the “increased risk” rule of Wax v. Des Moines This omission might be understandable if Mincey had Asphalt Paving Corp., 220 Iowa 864, 263 N.W. 333 (1935), relied on the rule of law established in Wax without ac- to deny this “act of God” claim. Wax reasoned that in- tually citing to the case; looking forward in time might juries produced by lightning or severe heat or cold were require re-reading every worker’s compensation case in unrelated to employment because the general public Iowa. Where, as here, the reliance on a newly discred- was also subject to these forces. ited prior case is explicit, the task of finding each and Sally is careful to Shepardize Mincey, and the case ap- every subsequent Mincey-like case is a trivial4 matter of pears to be good law. Her supervising partner, whose crunching through an existing database. practice rarely involves worker’s compensation claims, asks Sally a single question: “Did you Shepardize it?” ALAN WOLF is a visiting associate pro- Later that day, the client is told that he has no case. fessor of law at Benjamin N. Cardozo In fact, Mincey is not good law. More than a dozen School of Law of Yeshiva University, years before Sally found and Shepardized the case, the and a professor of physics at The Supreme Court of Iowa unequivocally rejected the “in- Cooper Union. creased risk” rule for an “actual risk” rule more generous to employees in Hanson v. Reichelt, 452 N.W.2d 164 (Iowa 1990). In Hanson, the court noted that employees re- quired to work outdoors did not feel free to come out of the rain, a freedom enjoyed by members of the general LYNN WISHART is director of the law li- public. Therefore, injury from exposure to the elements brary and professor of legal research was, as the worker’s compensation statute demanded, at Benjamin N. Cardozo School of Law causally related to employment. Under Hanson, the farm of Yeshiva University. worker’s claim would have been allowed. The authors wish to thank Tracy Sally would have fared no better if she had relied on Bloch, now a second-year student at Benjamin N. Cardozo School of Law, Westlaw’s KeyCite service. Should we blame Sally or for her assistance with research done the online citators for failing to determine whether her for this article. case was good law?

24 Journal | September 2003 the realization that in a case sequence such as Negative Treatment Wax–Mincey–Hanson, online citators will declare Mincey Wax Mincey Hanson to be good law. A small, and decidedly informal survey

of law students, law professors and practitioners re- vealed that the situation rarely seems to have been con- Negative Treatment sidered at any stage of their legal education or practice. Asked the question, “Does Shepardizing or KeyCit- ing a case correctly determine its status as good law?” Figure 1 most individuals answered in the affirmative. Some As a practical matter, in relying on Shepard’s or added caveats of the sort “but for the occasional human KeyCite as Sally did, a lawyer adopts a non-standard or computer error” and a few stated that, given their ig- meaning for the term “good law.” For the citators, a case norance of the innermost workings of the citators, they is bad law only if it is reversed or named in an overrul- would never rely on them to validate case law. ing opinion. For the rest of us, a case also fails to be good One practitioner did outline the forward propagation law where a clearly overruling case fails to name our problem, but credited her awareness to an experience in case. which she relied upon a Mincey-like case that had Shep- To our great surprise, although others5 have ques- ardized as good law. To her horror, opposing counsel tioned the reliability of online citators (looking, for ex- brought a Hanson-like overruling case to the court’s at- ample, to the assignment of correct treatment codes), the tention. failure to “propagate” negative treatment forward in For the most part, questions about the reliability of time is virtually unknown, or at least undiscussed. the citators were met with a blank stare, suggesting an unshakable confidence in the “mojo” of clicking on the Reliance on Shepard’s and KeyCite “Shepardize” or “KeyCite” button. When we outlined Citation services perform a number of important the Wax–Mincey–Hanson scenario, practitioners often re- tasks for a specified case, such as checking its subse- acted with a mild case of shell shock. quent history and finding later citing cases and sec- Promotional materials for Shepard’s and KeyCite ondary sources. Unfortunately, it appears to be a wide- suggest that their citators provide comprehensive, one- spread belief among lawyers that citation services click validation of case law. For the most part, their automatically find unrelated subsequent cases that training materials are no more accurate. clearly renounce a rule of law relied upon by our case. A Shepard’s Citations report on lexis.com offers full treat- From the handful of opinions discussing citators, it ment and history analysis needed to verify the status of a appears that judges are not immune from the belief that case. You get a complete and timely listing of authorities Shepard’s and KeyCite are “one-click shopping” for the that have cited your case, with citing references orga- verification of case law. nized by jurisdiction and court, followed by secondary sources.6 The process of “Shepardizing” a case is fundamental to legal research and can be completed in a manner [sic] of With KeyCite, you can verify instantly whether your minutes, especially when done with the aid of a com- case, statute, administrative decision, or regulation is puter. Though we do not consider counsel’s actions to good law and find citing references to support and be egregious in this case, we admonish all attorneys to strengthen your legal argument. . . . ensure the validity of all cases presented before this It’s easy to use. KeyCite takes minutes to learn, because court. it’s based on symbols that appear in your Westlaw re- Meadowbrook, LLC v. Flower, 959 P.2d 115 (Utah, 1998) search results. These easy-to-recognize icons make it nearly impossible to overlook history that could undermine [T]he Corporation Counsel is admonished that diligent your argument.7 research, which includes Shepardizing cases, is a pro- fessional responsibility, see Taylor v. Belger Cartage Ser- While Westlaw claims, but does not deliver, “instant” vice, Inc., 102 F.R.D. 172 (W.D. Mo. 1984), and that offi- verification of case law, LexisNexis warns us that failing cers of the court are obliged to bring to its attention all to use a citator may be a violation of a professional re- important cases bearing on the matter at hand, includ- sponsibility. ing those which cut against their position. See Model Rules of Professional Conduct, Rule 3.3(a)(3). Failure to update your authority may cause you to base Cimino v. Yale University, 638 F. Supp. 952 (D. Conn. arguments and findings on outdated law, which is 1986) worse than basing them on no law at all. Several courts have discussed the importance of proper We are not certain where the gap between what the updating and lawyers’ professional responsibility to citators do, and what most lawyers understand them to ensure the reliability of the authority they cite.8 do, arises. Somehow, most lawyers have never come to CONTINUED ON PAGE 27

Journal | September 2003 25 Comment by Westlaw

Thank you for sending us the draft of your arti- cases is unclear, and may remain unclear until still cle on the use of citators. I think you have a good later cases explore the issues. point to make, and that many practitioners will Adding history tags to a citation index calls for profit from your analysis. judgment and legal analysis, which is one of the We have long been aware of the “A-B-C” prob- reasons that all of the history in both KeyCite and lem (and the related A-B1-B2-C problem) you iden- Shepard’s is supplied by legal editors rather than by tify. The creation of KeyCite’s Table of Authorities fea- automated systems. But the analysis of these im- ture was principally motivated by the desire to plied citations is a much more difficult and uncer- contribute to the solution of the problem, used in tain matter. We feel that this kind of analysis is the just the way you describe. proper province of judicial or scholarly analysis, Your A-B-C example is one of several issues that and beyond the scope of the KeyCite editorial ser- we discuss as problems of implicit citation. As we vice. use the term, implicit citations are references that KeyCite editors do systematically search for im- will be understood by the knowledgeable reader plicit citations when they are doing the direct his- despite the absence of an explicit reference. In some tory of a case. For example, for each federal appel- kinds of literature, most citations are implicit. For late case we search for district court opinions in the example, film scholars would immediately recog- same line of litigation, and will post a case as af- nize nearly any scene showing a baby carriage firmed or reversed even if (as happens surprisingly rolling down steps as a kind of a citation to Battle- often) the appellate court does not cite the opinion ship Potemkin, though the connection is rarely made below. Apart from direct history (and with one explicit, and many viewers will not know the refer- other exception mentioned below), however, ence. KeyCite is strictly limited to recording explicit cita- In the Hanson1 case, the operative language is tions. “[w]e adopt the actual risk rule in cases involving There is, indeed, a very strong tendency for West injuries from exposure to the elements” and, a few to oversimplify matters in our promotional litera- lines later, “[b]ecause the district court’s judgment ture and, to a lesser extent, in our teaching materi- is based on a rule of law we now renounce, we must als. You are right that it is not strictly true that reverse.” Such language warns our editors to search KeyCite (or any other service) provides really com- the opinion for citations to cases that embody the plete “one-click validation of case law.” old rule, and our editors properly tagged Wax2 as Marketing and documentation are well outside being abrogated by Hanson.3 my area of responsibility at West, but I am sympa- Now the experienced lawyer, reading the Hanson thetic to the dilemma faced by those who try to de- opinion, infers that, though not expressly stated, the scribe our products. It is simply the case that legal opinion is rejecting all earlier cases that embrace the research is often an exceedingly complex process, increased risk rule. One can imagine a citation sys- and I think it justifiable, at least much of the time, to tem in which the editor undertakes to identify and make generalizations that are not entirely accurate, tag all of the cases subject to this implied rejection. for either marketing or pedagogical reasons. This would add a very different kind of step to the Dan Dabney editorial process. In many instances determining Senior Director for Research and Development the scope of such implied citations would be a rela- Westlaw tively straightforward matter. But in many others the effect of a decision on the authority of uncited

1. Hanson v. Reichelt, 452 N.W.2d 164 (Iowa 1990). 2. Wax v. Des Moines Asphalt Paving Corp., 220 Iowa 864, 263 N.W. 333 (1935). 3. West avoids using the tag overruled unless the court specifically uses some form of the word “overrule.” Shepard’s also seems to have this policy, but with fewer tags to choose from in the Shepard’s system, Wax gets a less descrip- tive criticized tag in Shepard’s.

26 Journal | September 2003 CONTINUED FROM PAGE 25 Shepardize, correctly, as “bad law.” But none of the B cases will receive any negative treatment, unless specif- We believe that several of these statements encourage ically named in C. If a lawyer finds a B case, or worse, a an unjustified and unquestioning reliance on the cita- number of consistent B cases, they may incorrectly be- tors. lieve that a substantial body of law supports (or op- The problem has become worse in recent years. The poses) their position. 1997 edition of How to Shepardize included the language: Not everyone who performs legal research is likely to Usually a case you want to rely on cites other cases or fall victim to the ABC problem. For example, attorneys sources of legal authority to establish its position. These who limit their practice to one or a few narrow areas of sources are called the “underpinnings” of your case. In the law will generally be aware of appellate decisions of addition to Shepardizing your case, you need to Shep- ardize your case’s underpinnings to make sure they are the C type. So will legal scholars, who typically read still good law, as well. If they are not, and your case has every appellate decision in the area of their research. relied on them, then the precedential value of your case Many practitioners, however, are likely to do less thor- could be compromised. ough research, and may miss a C case. This category in- This language was eliminated in more recent editions in cludes attorneys with diverse practices (such as Sally’s response to marketplace pressures.9 Westlaw’s Dan supervising partner), new attorneys or attorneys new to Dabney similarly notes: “There is, indeed, a very strong a practice area. The largest group of potential victims tendency for West to oversimplify matters in our pro- are those who might otherwise do a thorough research motional literature, and, to a lesser extent, in our teach- job, but lack the time, staff or money for their best effort. ing materials. . . . I am sympathetic to the dilemma faced Whether an ABC problem is discovered may depend by those who try to describe our products. It is simply on which attorney finds and relies upon a B case, and the case that legal research is often an exceedingly com- the procedural posture of the new dispute. For example, plex process, and I think it justifiable, at least much of if defense counsel relies heavily on a B case in a dispos- the time, to make generalizations that are not entirely itive motion, opposing counsel is motivated to perform accurate, for either marketing or pedagogical rea- particularly thorough research to trump that case, and sons.”10 We invite Shepard’s and KeyCite to add explicit language to their instruc- tional and promotional materials de- scribing their failure to forward propa- gate negative treatment and to outline more effective approaches to validat- ing case law. Who Will Fall Victim To the Citator Gap? We refer to case sequences like Wax–Mincey–Hanson as “ABC se- quences.” Case “A” announces a rule of law. Case “C” subsequently re- nounces the rule. Assume for the mo- ment that the language of renunciation is unequivocal – “we reject the rule of case X” or “we overrule X.” The “B” case(s) are similar cases, both factually and legally, that fall chronologically between A and C. B cases rely on the rule of case A, and may or may not ex- plicitly cite to A. When the C decision is handed down, the citators go back to each case named in C, which will usually include case A, and add the appropriate nega- tive treatment codes. Case A will then

Journal | September 2003 27 may well find C. Or the court, through its own efforts, 6. INJURIES BY ELEMENTS OR ACT OF GOD, may become aware of the controlling case law. There are k637-k642 fewer bites at the research apple in the Sally Smith sce- nario. Finding only a B case that undercut her client’s k637 In general position, early in the representation, she simply sent the k638 Storms and floods client home. The likelihood of missing a C case is in part a func- k639 Lightning tion of one’s approach to online research. The problem will most often arise with a full-text search such as the k640 Earthquakes one done by Sally Smith: (str! /3 lightning) and (work! /3 compensation) didn’t locate Hanson. However this k641 Frostbite or freezing combination would have caught it: lightning and (work! /3 compensation). k642 Sunstroke or heat prostration Hanson is a sunstroke case, not a lightning case, but Looking at the individual key numbers in this list, we the opinion does contain the phrase “as from lightning, find Wax by selecting 413k642, “Sunstroke or heat pros- severe heat or cold,” 452 N.W.2d at 167. Hanson does not tration” cite to lightning cases and the word might not have ap- Key numbers didn’t make it easier to validate Mincey peared in the opinion at all. Sally’s search strategy is – to determine that a lightning case was bad law we had dangerously dependent on such fortuitous use of lan- to move to the sunstroke cases!11 While lawyers appre- guage. Our observations of online searching show that ciate the need to broaden a search beyond a very specific law students have a tendency to employ far more search fact pattern, their motivation is generally to find addi- terms and phrases in an initial search query than expe- tional authority for their position in factually analogous rienced searchers. Had they performed the search for situations, not to validate the cases that fell into their ini- Sally, they might have used: “struck by lightning” and tial narrow fact pattern. “workers compensation” and risk and farm. Another tool in the online research arsenal is topical As previously noted, the B case may actually be a searching through Lexis’s Search Advisor® or Westlaw’s group of cases lying between A and C. The larger this KeySearch.® In Search Advisor, if we start with the top group, the more likely a full text search will find a prob- level category of “Worker’s Compensation” and follow lematic B case, rather than the A or C cases which would a path through “Compensability,” “Injuries” and “Nor- be properly handled by a citator. mal Exertion,” we find Hanson, Mincey and Wax. If we As an alternative to full-text searching, some lawyers had taken the equally plausible path “Worker’s Com- will use Westlaw’s Key Number Digest. The ABC prob- pensation,” “Compensability,” “Course of Employ- lem might be mitigated with this approach, but for these ment,” “Risks,” then only Hanson would have been particular cases it was not. While reviewing a case, found. Although our results are no longer dependent on the precise words chosen for a full text search, they have Westlaw offers several headnote hierarchies as a means become dependent on the particular path we take of finding additional cases. In Mincey, the most promis- through several layers of categories. A bit of positive ing of these seems to be: news – for both Search Advisor and KeySearch – for 413 Workers’ Compensation each of the paths that we tested (we don’t claim to have tried all plausible paths) we were brought to the rule- 413VIII Injuries for Which Compensation May Be Had killing case, Hanson. 413VIII(D) Particular Causes, Circumstances, and Can Citators Fix the Gap? Conditions of Injury For Wax–Mincey–Hanson, Sally Smith had a solution at hand, albeit a time-consuming one. Had she clicked 413VIII(D)6 Injuries by Elements or Act of God on Table of Authorities (TOA) in KeyCite or Shepard’s 413k639 k. Lightning. Most Cited Cases for Mincey, she would have seen citation information for each case cited in Mincey. Because Mincey cited to Wax, Neither Wax nor Hanson appears in the last, most spe- and Wax is now flagged as bad law, the TOA would cific key number category, 413k639. If we search the top- have indicated a potential problem. ical sub-category (413VIII(D)6) “Injuries by Elements or Of course finding a negative treatment symbol in a Act of God” directly above the key number, we find TOA is not the end of the story. It is then necessary to both Mincey and Wax, but not Hanson. The sub-category may be expanded to produce a list of natural hazards: CONTINUED ON PAGE 30

28 Journal | September 2003 Comment by LexisNexis

Thanks for giving us an opportunity to review So you will instantly see the cases that your case re- the article you and Lynn Wishart have prepared. lied upon, because they are identified as having Here are a few comments that I hope will be useful been followed, and if one (or more) of those cases to you. has a red Signal, TOA will quickly take you to what Shepard’s Citations is enormously helpful in may well be the hidden weaknesses in the founda- providing the citation information that permits at- tion of your case. torneys to decide whether or not their cases are A good example of TOA in action is Juncker v. “good law,” but you are quite correct that citation Tinney, 549 F. Supp. 574 (D.C. Md. 1982). Juncker fol- services have gaps in the ABC-type scenarios you lowed Parratt v. Taylor, 451 U.S. 527 (1981), which outline. was subsequently overruled by the Supreme Court. Shepard’s uses “questioned by” to help provide The Shepard’s TOA for Juncker plainly shows the “bad law” information under certain circumstances red Signal on the Parratt decision as well as an indi- that seem relevant to your discussion. For example, cation that Juncker followed Parratt. let’s say case A is the foundation case that case B re- Historically, our “How to Shepardize” materials lies upon. Later, case A is overruled by case C for emphasized the importance of Shepardizing “gen- the foundation proposition, but case C does not cite erations” and “underpinnings” to expand your re- case B. However, case D subsequently states that search and be sure the precedential value of your case C has overruled case B “sub silentio.” Shep- starting case had not been compromised. Here, for ard’s will show that case B was “questioned by” example, is some language from the 1997 edition of case D, which allows a researcher Shepardizing case “How to Shepardize”: B to find case C without resort to TOA. Usually a case you want to rely on cites other cases Instances of legislative “overruling” are handled or other sources of legal authority to establish its similarly using “superseded by statute as stated in.” position. These sources are called the “underpin- In this scenario, case A is the foundation case that nings” of your case. case B relies upon. The legislature subsequently en- acts a statute designed to undo the court’s holding In addition to Shepardizing your case, you need to in case A. (The legislature’s intention may or may Shepardize your case’s underpinnings to make sure they are still good law, as well. If they are not, not be disclosed in the legislative history.) Down the and your case has relied on them, then the prece- road, case C indicates that case A is no longer good dential value of your case could be compromised. law because of the legislature’s action. Shepard’s will then show that case A has been “superseded by More recently, we have responded to market- statute as stated in [case C].” If case C mentions that place pressures to shorten our “how to” materials, case B is no longer good law, Shepard’s will like- and this language was one casualty of our conden- wise indicate that case B has been “superseded by sation efforts. statute as stated in [case C].” Or if it takes an even In today’s fast-paced world, we continue to get later case, case D, to point out that case B has also feedback from law students, faculty who teach legal been damaged by the legislative action, Shepard’s research and also from practicing attorneys, most of will show that case B has been “superseded by whom recommend that our “how to” materials statute as stated in [case D].” need to be even shorter – but when your article is Regarding your discussion of Table of Authori- completed, I’d like to pass it along to the people ties, the context seems to suggest it is a KeyCite- who write these materials so they can consider your only feature. Shepard’s on LexisNexis also has suggestions for improvement. Table of Authorities, and I believe our TOA feature Jane W. Morris, J.D. can be more helpful than KeyCite’s under the cir- Director, Customer Programs, Citations and cumstances you discuss. Because Shepard’s indi- Caselaw cates when your decision “follows” another case, Editorial LexisNexis this information is also pulled into the TOA report.

Journal | September 2003 29 CONTINUED FROM PAGE 28 judge writing a B2 opinion in 2003 may cite to a B1 opin- ion in 2000, but may not feel that it is necessary to cite to study the problem with the underlying authority, to see an A case that dates to 1920. if it has an impact on one’s case. If one’s research leads initially to B , the only way to In Figure 2 we modify Figure 1 to show the value of 2 be certain that it is good law is to review each case in its the TOA. TOA, then the TOA for each of those cases, and so on, back to the origin of the rule of law. The number of cases

Negative treatment to be checked quickly becomes prohibitively long. This (through TOA)

Wax Mincey Hanson is the task that Shepard’s and KeyCite, with their vast resources, cannot perform across their entire case law database, and it is a task that lawyers cannot generally afford to perform in every research assignment. Negative Treatment One example of an AB1B2C case sequence occurs in Figure 2 the context of “exhaustion of remedies” in California. The rule-making “A” case is Alexander v. State Personnel Board, 22 Cal. 2d 198, 199, 137 P.2d 433, 434 (1943) (“The On page 2 of the Westlaw online training materials for KeyCite we find the statement (emphasis supplied): rule that administrative remedies must be exhausted be- fore redress may be had in the courts is established in You will know immediately when looking at a case or this state.”). A “B ” case that relies on Alexander is Alta statute if there is reason to question whether you 1 should cite it. Loma School District v. San Bernardino County Committee, 124 Cal. App. 3d 542, 554, 177 Cal. Rptr. 506, 513 (4th Buried on page 12 there is an acknowledgment that case Dist. 1981). A “B ” case that cites to Alta Loma but not to validation is not always a trivial matter, and the TOA 2 Alexander for the mandatory character of the exhaustion may be required. rule is Cal-Air Conditioning, Inc. v. Auburn Union School The Table of Authorities is a useful tool to find a hidden District, 21 Cal. App. 4th 655, 672, 26 Cal. Rptr. 2d 703, weakness in a case that appears to be good law. It 712 (3d Dist. 1993). Finally, Alexander is explicitly over- shows whether the cases cited in a case have negative history. This helps you avoid getting “blind-sided” by ruled in the “C” case, Sierra Club v. San Joaquin Local using a case that has no negative history, itself, but re- Agency Formation Committee, 21 Cal. 4th 489, 510, 87 Cal. lies on one that does.12 Rptr. 2d 702, 717 (1999) (“We hereby overrule Alexander, Unfortunately, clicking on “TOA” invokes no greater supra, 22 Cal. 2d 198, 137 P.2d 433, and hold that, subject level of magic than clicking on “Shepardize.” Consider to limitations imposed by statute, the right to petition for judicial review of a final decision of an administra- the chain of four cases, AB1B2C, in Figure 3. A is the rule- tive agency is not necessarily affected by the party’s fail- making case. B1 follows A, and cites to it. B2 follows A ure to file a request for reconsideration or rehearing be- and B1, but only cites to the more recent case, B1. Finally, fore that agency.”). C is the rule-breaking case that makes A, B1, and B2 bad law. C, it so happens, cites only to A. The sequence is summarized in the table below. Only the relevant entries have been filled in. If a researcher Negative Treatment finds Alexander, its Shepard’s flag indicates that it is bad (through TOA) Negative Treatment A B1 B C law. The status of Alta Loma can be determined by scru- 2 tinizing its TOA. If, however, Cal-Air is located, neither the Shepard’s flag nor the TOA indicates a problem with the case. Negative Treatment Role Case Shepard’s [KeyCite] TOA A Alexander Red [Red] Figure 3 Overruled by Sierra Club Shepard’s and KeyCite will properly add negative B1 Alta Loma Yellow [Yellow] Red symbol for Alexander treatment codes to A when they process C, because A Distinguished by (one of 34 entries in the TOA) was cited in C. Is this information propagated back up a case outside the sequence the chain of cases from A to B1 to B2? Not directly, and in any event, not very far. The problem with A reaches as B2 Cal-Air Blue [Green] – no Yellow symbol next to Alta Loma negative treatment (not suggesting invalidity) far as B1, but only, as discussed above, through the TOA. C Sierra Club The problem with A and B1 does not reach B2 at all. Since B2 does not cite to A, its TOA is “clean.” A four-case We leave it to others to determine how often scenar- chain of this sort may be a relatively common event. A ios of the ABC or AB1B2C type occur. For our purposes

30 Journal | September 2003 it was sufficient to find a few examples that established choose whether or not the (brown?) symbol merits fur- that Shepard’s and KeyCite did not attempt “forward ther attention. propagation” of negative treatment. 5. See, e.g., William L. Taylor, Comparing KeyCite and Shep- ard’s for Completeness, Currency, and Accuracy, 92 Law Libr. Conclusion J. 127 (2000); Jane W. Morris, A Response to Taylor’s Com- The few hours of legal research training received by parison of Shepard’s and KeyCite, 92 Law Libr. J. 143 (2000) most law students and practitioners creates a sense that (looking at, e.g., multi-day backlogs in data entry, and the case validation is a simple matter. It is not. As Dan Dab- vagaries of assigning treatment codes); James F. Spriggs II & Thomas G. Hansford, Measuring Legal Change: The Reli- ney observes: “As a practical matter, most of the legal ability and Validity of Shepard’s Citations, 53 Pol. Res. Q. 327 research world has to go about its business without (2000) (looking at the validity of treatment codes); Don- grappling with the issues of implicit citation or Cutter’s ald R. Songer, Case Selection in Judicial Impact Research, 41 rule. As a result, a lot of lawyers are relying on tech- W. Pol. Q. 569 (1988) (looking at, e.g., whether a case’s reference to “Miranda warnings” will trigger a Shepard’s niques that might not work, and they’re taking chances entry to the Miranda opinion). that they’re not even aware of.” 6. (emphasis supplied) (last visited July 27, click” validation of case law. Both companies can solve 2003). the ABC problem, and we encourage them to do so, but 7. (empha- they cannot solve the AB1B2C problem (or the ABC problem where B fails to explicitly cite A). sis supplied) (last visited July 27, 2003). 8. (last visited July 27, 2003). proach to case validation, but the nature of language and 9. Morris, supra note 1. our legal system precludes any simple solution to this problem. To insure reliance on good law requires addi- 10. Dabney, supra note 2. tional time devoted to legal research. Ideally one takes the 11. Id. Dan Dabney explains the rationale for this indexing as an application of “Cutter’s rule,” “whereby items are time to find the foundational “A” cases as well as rule- posted only to classifications that are at the finest level of changing “C” cases, rather than relying on full text search- articulation the item calls for.” In effect, Cutter’s rule, ing of narrow fact patterns which is more likely to find po- which “has often been criticized, and not without rea- tentially problematic “B” cases. Good research habits, such son,” prevents double-posting cases like Wax, Mincey and as exploring secondary sources (particularly when work- Hanson to other key number categories. ing in an unfamiliar area of law), the use of TOAs, topical 12. (click on “Using KeyCite to verify good law” to launch the tutorial in a duced dependence on complex full text searches, may separate window) (last visited July 27, 2003). keep this added burden to manageable levels.

1. “[Y]ou are quite correct that citation services have gaps in the ABC-type scenarios you outline.” E-mail from Jane W. Morris, Director, Customer Programs, Citations and Case law, Editorial LexisNexis (July 18, 2003) (on file with authors). 2. “Apart from direct history (and with one other exception mentioned below), however, KeyCite is strictly limited to recording explicit citations.” E-mail from Dan Dabney, Senior Director for Research and Development, Westlaw (July 10, 2003) (on file with authors). 3. Id. 4. Dan Dabney of Westlaw disagrees that the solution is trivial, arguing that adding a red flag to these cases “would cause a great proliferation of meaningless red flags.” Id. The authors agree that red flags are inadvisable and suggest instead the addition of a new color or icon for potentially prob- lematic implicit citations. As with the yellow icon, legal researchers can

Journal | September 2003 31 Electronic Discovery Can Unearth Treasure Trove of Information Or Potential Land Mines

BY LESLEY FRIEDMAN ROSENTHAL

ttorneys confronting electronic discovery for the Merrill Lynch client – the firm’s highest stock rating. first time may feel like the protagonist Berenger That e-mail, and others like it, led Merrill Lynch to an- Ain Ionesco’s absurdist play Rhinoceros. All nounce the $100 million settlement of civil enforcement around him, Berenger’s friends and loved ones develop proceedings last year. The trail of e-mails uncovered by “rhinoceritis,” a not-fatal disease in which people turn the Office of the New York State Attorney General has into rhinoceroses. Electronic discovery can be that way: formed the basis for dozens of class action lawsuits, bor- it is in some ways an absurd world, but everybody rowing generously from the AG’s court filings and the seems to be in it these days. e-mails they quote. Many lawyers and litigants perceive a treasure trove What sets electronic data apart from other kinds of – or potential land mines – hidden among back-up, information is that it can be generated quickly and 3 residual and replicate data. They may be right. Just ask stored cheaply. On servers, hard drives and other elec- Monica Lewinsky, Jack Grubman and Bill Gates. But one tronic media worldwide, data mounts up by the need not be handling headline matters to notice the nanosecond. By one measure, 99.997% of all information broad impact of “e-discovery.” Many cases may now re- storage is now in electronic form; printed material of all quire attorneys to search, analyze, produce, and manage kinds makes up less than .003 percent of all stored in- 4 electronic data, including deleted or archived files. formation. What is so unusual about electronic discovery? Nearly all critical business records, and much per- • Clients – and adversaries – can be sanctioned for sonal correspondence, are now generated and stored 5 improper document retention practices under criteria electronically. E-mails, word-processed documents, that are rapidly evolving; Excel spreadsheets, and PowerPoint presentations • For businesses involved in litigation, electronic dis- linger on servers worldwide. Many companies are find- covery can increase discovery costs many times over – ing out the hard way that they don’t know what docu- or help realize significant litigation efficiencies – or both; ments they hold in inventory, let alone which ones they • Courts have begun shifting the cost of producing have destroyed. electronic documents in accordance with new rules. Most of the documents are probably innocuous, but it It is worth knowing what kinds of electronic data takes just one provocative e-mail to create a public rela- there are; how data is backed up, discarded and re- tions disaster or a litigation liability – or a bonanza. tained; and what happens if the client gets it wrong. It is also worth learning how enterprising lawyers in nearly every area of practice may do digital detective work; LESLEY FRIEDMAN ROSENTHAL is a liti- how much electronic discovery really costs; and who is gator and a member of the communi- likely to pay those costs. cations and technology practice group at Paul, Weiss, Rifkind, Wharton & E-mail and Other Electronic Files Garrison LLP. She graduated from Are Ubiquitous Harvard College, studied at Oxford Employees exchanged about 2.8 billion e-mails every University, and received her law de- gree from Harvard Law School. day in 2000.1 Ms. Rosenthal presented a version of As was widely reported in the National Law Journal this article to the Justices of the New York Supreme and elsewhere, one of those e-mails, from a Merrill Court, Commercial Division, at the New York State Judi- Lynch analyst, called the stock of a certain Internet com- cial Institute in May 2003. 2 pany “a piece of junk” and “a powder keg.” At the Karen Ziman assisted in the preparation of this article. same time, Merrill Lynch was giving the company – a

32 Journal | September 2003 Electronic data has a bad habit of hanging around, • Full backup – a complete backup of all information even after one thinks one has discarded it. There is a real contained on the system. disconnect between what electronic information people • Selective backup – specific files and directories are retain and what they want to retain. One reason elec- selected, for example to avoid backing up unnecessary tronic files are so permanent has to do with the way they program or system files or to focus on data files in are stored on the computer. Deleting a file does not ac- known user directories. tually erase the file itself. Deleting only removes the • Incremental backup – only those files that have “pointer” that the computer uses to find the file’s data changed since the last backup are copied. on the hard drive. The data itself still exists – at least Most companies with a comprehensive policy use a until it gets overwritten by another file: mix of full and incremental backup. “Deleting” a file . . . simply finds the data’s entry in the A lawyer embarking on electronic discovery should disk directory and changes it to a “not used” status – understand a company’s backup protocol and backup thus permitting the computer to write over the schedule before determining a document production “deleted” data. Until the computer writes over the “deleted” data, however, it may be recovered by search- plan. ing the disk itself rather than the disk’s directory. Ac- Object Lessons in Document Retention cordingly, many files are recoverable long after they have been deleted – even if neither the computer user Linnen v. A.H. Robins Co. One of the most fre- nor the computer itself is aware of their existence. Such quently discussed cases in connection with spoliation of data is referred to as “residual data.”6 electronic evidence is Linnen v. A.H. Robins Co.8 This Fen-Phen case demonstrates the pitfalls of not knowing Deleting a file has been likened to scratching out part of what backup the client has, and not automatically sus- a book’s table of contents in an attempt to erase a chap- pending a document management protocol upon notifi- ter – that may make it harder for the casual reader to cation of a claim. find what he or she is looking for, but for the deter- mined reader, the pages are still bound into the book. Plaintiffs in this litigation requested e-mails sent or received by 15 named individuals that referenced spe- E-mail messages are even harder to delete, because cific topics relating to the drug and its associated risks. multiple copies of them often exist, not just on the Wyeth produced only a small number of e-mails in hard sender’s computer but also on servers and the comput- copy form, claiming that it did not have a “mass stor- ers of the addressees, the cc’s and the bcc’s. Deleted e- age” device or other backup tapes. However, Wyeth ul- mails may also exist because they were backed up – on timately admitted to the existence of more than 1,000 any one or more of the above users’ systems – before backup tapes that had been held for a previous litiga- they were deleted. Deleted computer files are discover- tion. It then maintained that a search of the backup able.7 tapes was unnecessary because the company had in- Understanding Backup structed its employees to save relevant documents and Is Critical to Managing E-Discovery had already produced them. A backup tape is a copy of information, generally Plaintiffs moved to compel production of the backup made for the purpose of disaster recovery in the event of tapes, claiming that the tapes might contain communi- a system failure or natural disaster. Backup programs cations and documents that had been deleted from the often compress data, to reduce the amount of physical computer system at some point in time and thus were space required on the backup media. only available on backup tapes. Wyeth characterized the Backup tapes typically contain documents created by motion as a “multimillion dollar fishing expedition.” system users, such as e-mail messages, word-processing The court rejected Wyeth’s characterization, declar- documents, spreadsheets, database entries and the like – ing that the cost involved was one of the risks taken on but also often include copies of the system files required by companies that have made the decision to avail to make the computer’s operating systems function themselves of the computer technology now available to properly. Thus, a volume of information that may seem the business world.9 The court ordered the defendant to enormous at first glance may contain a manageable begin compliance by restoring a specified sample of amount of usable information for purposes of discovery. backup tapes and producing responsive documents or Sometimes, a large volume of information on backup communications, and reserved any decision to require tapes is a “red herring,” fooling judges (or even an un- additional tapes to be restored until the potential for rel- informed adversary) into thinking that the amount of evant and responsive documents was more fully ex- data to sift through is unmanageable. It is important to plored through review of the restored sample tapes. understand the differences between three kinds of Wyeth was sanctioned by being required to bear all backup: costs and fees associated with the e-mail discovery

Journal | September 2003 33 judge ordered it to restore all 14,000 tapes. Not surpris- What Is a Sensible ingly, it chose to do so internally, at its own expense, rather than to avail itself of the “assistance” of plaintiff’s Document Retention Policy? counsel or a court-appointed special master. Once it did, several of the e-mails were suggestive enough to per- There’s nothing new about document retention suade the company to settle for $92 million. policies – or spoliation of evidence, for that matter – Arthur Andersen The Andersen story is, among but electronic discovery brings complexities all its other things, a lesson about consistent application of a own, and the stakes can be high. document retention policy. It is also a prominent exam- Businesses and individuals are well within their ple of the need to suspend a document retention policy rights to destroy old documents – electronic or oth- once the duty to preserve is triggered. erwise – so long as they have well-thought-out poli- Andersen employees destroyed thousands of Enron- cies that square with the laws and are consistently related documents, even though it knew of an informal applied. inquiry into Enron by the SEC. Andersen maintained Courts tend to look with approval on document that the shredding was routine compliance with a policy retention policies that: designed to protect client confidentiality. In reality, the ✓ comply with applicable regulations – which destruction was initiated by Andersen lawyers and may vary from industry to industry, managers with a newfound interest in the firm’s ✓ comport with developing case law, theretofore-ignored document retention policy, only ✓ are instituted in good faith, i.e.: after the SEC inquiry had commenced. Andersen’s in- consistently applied policy, and its failure to suspend it • provide reasonably ready access to needed when required, was a major factor in the firm’s obstruc- information tion of justice conviction and ultimate demise. • take account of the frequency and magnitude of complaints that might render destroyed docu- Doing Digital Detective Work ments relevant The 2.8 billion daily e-mails are only the tip of the • make a reasonable space/cost calculus electronic evidence iceberg. Electronic evidence may ✓ are consistently applied, and also reside in records of instant-message sessions, chat ✓ provide for suspension and preservation of evi- rooms, unified message systems that combine e-mail dence if a claim is anticipated or brought. records with voice mail tapes, digital TV recorders, MP3 players and global positioning system satellite records that track vehicle locations. issue. The anticipated cost of restoring data from 17 Electronic evidence might be found – and will be months of e-mail backup tapes approached $1.75 mil- sought, and must be searched for – at the office, on lion. servers, mainframe computers, and desktop computers; To make matters worse, Wyeth did not suspend its in employees’ homes, on PCs or laptops, or on Palm Pi- document retention policy or begin saving new backup lots, BlackBerrys, or cell phones; and in a company’s re- tapes until four months after the action was initiated, mote locations worldwide. Each of these sources and lo- and three months after plaintiffs’ first document pro- cations should be considered when framing or duction request. Accordingly, the court issued a jury in- responding to document requests. struction that an adverse inference may be drawn from Moreover, electronic files contain more information the fact that documents were destroyed by Wyeth. than just the “content.” Electronic files contain “meta- Boeing The Boeing case10 is an object lesson about data,” which reveals when documents were created and how expensive litigation can be when a company does- by whom; whether, when, how, and by whom it was n’t keep track of what backups it has, and what infor- modified; and who received a blind copy. This can be mation resides on what tapes. valuable information for a party seeking to prove that a In the fall of 1998, a Seattle plaintiff’s attorney was document was backdated, tampered with, or forged. It preparing discovery requests to be sent to Boeing in a can also provide valuable information in a contract dis- shareholder stock fraud suit. During a prediscovery de- pute about the origin of certain clauses or what was ne- position, he learned that the company had 14,000 gotiated out of the document from a prior draft. backup tapes of company e-mail stored in a warehouse. How is this mine of electronic data – and metadata – Boeing sought to narrow the scope of production, but recovered, reviewed, and if appropriate, readied for the company could not determine whose e-mails were production in litigation? Electronic data discovery on which tapes without first resurrecting the tapes. The (EDD) is now a $1 billion a year industry and growing

34 Journal | September 2003 exponentially. Several firms, including the Big Four ac- tion, with redactions intact. E-discovery also allows at- counting firms, as well as Applied Discovery Inc., Com- torneys to produce a responsive collection of documents puter Forensics, Daticon, Kroll Ontrack, and others, in either paper or electronic format. have made a business out of “computer forensics”: re- Once the documents have been mounted on an elec- covering deleted files for companies that are embroiled tronic system, both full text and metadata can be in litigation, undergoing regulatory review, or attempt- searched with e-discovery technology, accessing docu- ing to document workplace misconduct. ments with new search terms at various points in the Differences in Cost Structure case. Between Paper and Electronic Discovery Legacy Applications In general, the costs of electronic discovery are higher May Impose Hidden Costs up front than paper discovery, but may present signifi- Many companies use a jumble of technology plat- cant efficiency gains in the long term. In paper discov- forms, incompatible, outdated or unlinked systems, ap- ery, documents must be processed by making working plications and servers that – individually or collectively copies, stamping Bates numbers, storing boxes in a cen- – do not lend themselves to easy access. Tapes, the most tral repository, and scanning and coding documents so common backup, are designed more for disaster recov- images can be stored in a database. Paper discovery typ- ery than archival purposes and are therefore difficult to ically flows for many months, with perhaps $10,000 or index and search. more for copying charges in one month and $30,000 for The data in legacy applications, such as old e-mail scanning and coding charges in another month. programs, may be difficult to restore and search. And By contrast, an e-discovery bid typically includes all the farther back a company has to go to retrieve records, the anticipated costs up front. Those bids can run into the worse the legacy prob- the seven figures. Electronic lem gets – partly because discovery enables docu- savvy lawyers may insist ments to be quickly Electronic evidence might be found that corporations produce processed with automated – and will be sought, and must be records in their native for- technology that displays all mats. documents in a common file searched for – at the office, on The requesting party format, assigning unique ID servers, mainframe computers, and should be aware, however, numbers and storing the full that the cost of restoring text in a convenient reposi- desktop computers; in employees’ such “legacy systems” may tory. These costs are often- homes, on PCs or laptops, or on fall to it, if it fails to persuade times added to the costs of the court of the likelihood of traditional paper discovery. Palm Pilots, BlackBerrys, or cell unearthing relevant infor- Manual discovery pro- mation compared with the cesses are time consuming, phones; and in a company’s expense of doing so. In one labor intensive and error remote locations worldwide. recent employment discrimi- prone in the review stage. nation case from the North- After an initial investment ern District of Illinois,11 the in electronic discovery tools, full-text searching may court held that plaintiff employees were entitled to de- allow the review team to find key documents more reli- fendant’s e-mails that referenced the employees, but ably, in a shorter period of time. A joint prosecution or plaintiffs had to pay the $8,000/month to license the e- defense group may access the entire document collec- mail program (no longer in use by defendants) that was tion, even at disparate locations worldwide, through se- necessary to view the e-mails on the backup tapes. cure sites on the Internet. The ability to redact privileged information once and for all, or apply annotations on- Cost Shifting line, all from one shared repository, may further in- Ordinarily, the American Rule gives us the presump- crease efficiencies and avoid waiver problems. tion that each party will bear its own costs of produc- As with paper discovery, the ultimate goal of any dis- tion. However, courts are increasingly likely to shift covery project is to identify and produce only those doc- some of the costs to the requesting party under certain uments that are responsive and not privileged or other- circumstances. wise objectionable. E-discovery may streamline this In considering the issue of cost-shifting, a leading de- process by ensuring that only those documents desig- cision is Rowe Entertainment, Inc. v. William Morris 12 nated as responsive are produced from the total collec- Agency, Inc. Rowe raised the question of whether and to

Journal | September 2003 35 what extent to shift the costs of electronic discovery of backup process, and also saved e-mails from traders’ information that was stored on archival tapes originally desks in searchable format. UBS initially produced only created only for disaster recovery. Rowe’s eight-part bal- 350 pages. It did not review any of the backup tapes or ancing test considered the following: the e-mails, estimating that to do so would cost $300,000 1. Is the discovery request an e-mail fishing expedi- and $175,000 respectively, exclusive of attorney time. tion? Overly broad requests can lead to cost-shifting if Plaintiff moved to compel. not outright denial. Requests seeking “any and all” e- In a May 2003 ruling, the court performed a three- mail communications in a step analysis to ascertain the broad time span or among a appropriate scope and bur- large group of people are The Zubulake court would only den of discovering electronic particularly vulnerable. entertain the possibility of data.16 2. How likely is it that the First, it examined the re- search will be successful? shifting the cost of production sponding party’s computer Early depositions getting at where the data was relatively systems and the accessibility the heart of who communi- of the data. The court found cated on what subjects with inaccessible. three types of accessible data: whom via e-mail can be in- active, online data; near-line valuable in this regard. data; and offline storage/ 3. Will the e-mail provide any critical new informa- archives. Backup tapes or erased, fragmented or dam- tion? Or can other avenues (correspondence files that in- aged data were considered inaccessible.17 The court clude printouts of relevant e-mails, for example) fill the would only entertain the possibility of shifting the cost bill? of production where the data was relatively inaccessi- 4. Is there a business purpose for retaining e-mail? If ble. The court found that UBS’s optical disks were easily there is an ongoing business purpose, then the cost and accessible, and therefore that UBS should bear the ex- burden will likely remain with the producing party. If pense of producing the requested information. How- the purpose of retaining is to protect against electronic ever, the court decided that backup data on tapes was disaster, then shifting costs to the requesting party may relatively inaccessible, and accordingly proceeded to the be more appropriate. next step in the analysis. 5. Who will benefit from the e-mail restoration? The Next, having determined that the backup data was party seeking electronic discovery is more likely to relatively inaccessible, the court sought to ascertain avoid cost-shifting if it can show some business or evi- what kind of data might be found on the inaccessible dentiary value to the producing party as well. media. Because this was a fact-sensitive inquiry, the 6. Is the total cost of the proposed production sub- court ordered the responding party to restore and pro- stantial? This requires expert testimony and a sound un- duce a small sample of the backup tapes, both to deter- derstanding of the adversary’s data systems, again mine what kind of information the documents con- 18 gleaned through pre-discovery depositions or interroga- tained and to determine the actual cost involved. tories if possible. Step three determined whether the production costs 7. Which side is most able to control the costs of pro- should be shifted. The Zubulake I court announced a duction? new seven-part test: 8. Are both sides equally able to pay the costs of pro- 1. The extent to which the request is specially tailored duction?13 to discover relevant information; Some commentators have noted with concern, how- 2. The availability of such information from other ever, that the eight Rowe factors may tend to favor the sources; responding party, shifting the costs of electronic discov- 3. The total cost of the production, compared to the 14 ery too readily. amount in controversy; New Developments – Zubulake I & II 4. The total cost of the production, compared to the Responding to such concerns, U.S. District Judge resources available to each party; Shira Scheindlin has recently issued a pair of decisions 5. The relative ability of each party to control costs that somewhat modify the Rowe analysis. In Zubulake v. and its incentive to do so; UBS Warburg LLC,15 an employment discrimination 6. The importance of the issues at stake in the litiga- case, the plaintiff equities trader sought e-mails avail- tion; and able from the backup tapes and archived media of her 7. The relative benefits to the parties of obtaining the former employer. The company used an automated information.19

36 Journal | September 2003 Not all factors are weighted equally. The first two fac- Such considerations featured prominently in the de- tors, which according to the court comprise a “marginal cision of the U.S. District Court for the Southern District utility test,” weigh the most heavily. While certain fac- of California in Playboy Enterprises v. Welles.21 There, the tors pertain to the relative cost of a production, the ab- plaintiff moved to compel access to the defendant’s hard solute wealth of the parties is not a relevant factor. The drive to uncover deleted e-mails. There was some sug- cost of responding may not be unduly burdensome gestion that the defendant had intentionally deleted all when considering the cost of the production compared her incoming and outgoing e-mails, without regard to to the amount in controversy, i.e., a $100,000 expense the litigation, and there was a dispute about whether the may be reasonable in a multi-million dollar case.20 deleted e-mails were even recoverable. Accordingly, the After UBS concluded the required sample restora- court appointed a computer expert to create a “mirror tion, Zubulake moved to compel production of all re- image” of the defendant’s hard drive in an effort to re- maining backup e-mails at UBS’s expense. In July 2003, trieve the deleted data, and directed the parties to meet the court ruled in Zubulake II that UBS must perform the and confer to designate such expert. The expert would restoration and pay for 75% of the costs, but that Zubu- serve as an officer of the court and be required to sign lake must shoulder the remaining 25%. UBS was also or- the protective order in the case. To the extent the com- dered to pay for any costs incurred in reviewing the re- puter specialist would have direct or indirect access to stored documents for privilege. information protected by the attorney-client privilege, Zubulake I and Zubulake II are noteworthy, for litiga- the court ordered that such “disclosure” would not re- tors, trade regulatory lawyers and anyone else responsi- sult in a waiver of the attorney-client privilege. The mir- ble for counseling clients about document retention ror image was to be given to defendant’s counsel, who policies. Firms that routinely record and store e-mails would print and review any recovered documents, pro- and other electronic documents would be well advised duce to plaintiff any responsive communications, and to consider whether their existing policies meet all cor- record any documents withheld on the basis of privi- porate interests in light of these new developments. In- lege. Finally, although plaintiff’s counsel was paying for terestingly, because the Zubulake court would only en- the expert, defendant’s counsel was entrusted with tertain the possibility of shifting the cost of production maintaining the mirror image for the duration of the lit- where the data was relatively inaccessible, these deci- igation. Counsel and the expert also would be required sions may incentivize corporations to limit or even elim- to submit to the court a report on the success of retriev- inate search capabilities on data residing in legacy sys- ing all or part of the total data on the hard drive. tems and on backup tapes. Such strategic restricting of What’s Next “accessibility” could set the stage for a shifting of costs Some commentators have recommended amend- to prospective plaintiffs. At the same time, plaintiffs’ at- ments to federal22 and state23 discovery rules to address torneys should study these decisions in order to apprise electronic discovery issues. The Texas Rules of Civil Pro- clients of the risk of having significant electronic dis- cedure have already been amended to address the covery costs shifted to them. unique nature of electronic discovery.24 The Sedona Privilege Considerations Conference, a think tank dedicated to the advanced study of law and policy, recently issued a set of “Best As with traditional discovery, courts have ways of Practices” for electronic discovery.25 making recalcitrant litigants cooperate with e-discovery. There are numerous ways for practitioners to keep Attorneys facing such an adversary may consider up with fast-breaking developments in the sometimes moving for these new types of relief: an order com- bizarre, “rhinoceros” world of electronic discovery. The pelling a party to search its own servers and backup Bureau of National Affairs (BNA) publishes a monthly tapes at its own expense; appointment of a special mas- newsletter, Digital Discovery and E-Evidence. E-mail case ter or referee to review information retrieved from the summary alerts and a bimonthly publication on elec- computer system by a court-appointed computer foren- tronic discovery are available through Applied Discov- sics specialist; an order permitting a movant access to its ery, a member of the LexisNexis Group. Lawyer adversary’s computer system; and/or motions for sanc- Lounge, an Internet resource center focusing on law tions for failing to preserve and produce data from office technology, publishes an interactive page on backup tapes, possibly resulting in monetary penalties, electronic discovery at http://lawyerlounge.com/ adverse jury instructions, and even a judgment on the ediscovery. merits. Attorneys and judges are being called upon with in- However, attorneys and judges should be sensitive to creasing frequency to manage electronic discovery is- issues of privilege and confidentiality in considering sues. Some of the areas with the most at stake for liti- motions to compel. gants – the viability of their document retention policies

Journal | September 2003 37 7. See, e.g., Antioch Co. v. Scrapbook Borders, Inc., 210 F.R.D. 645, 652 (D. Minn. 2002) (“[I]t is a well accepted proposi- Checklist for Electronic tion that deleted computer files, whether they be e-mails or otherwise, are discoverable.”); Simon Prop. Group L.P. v. Discovery Planning and MySimon, Inc., 194 F.R.D. 639, 640 (S.D. Ind. 2000) (“First, computer records, including records that have been ‘deleted,’ are documents discoverable under Fed. R. Civ. Management P. 34.”). The key to effective handling of electronic discov- 8. 1999 Mass. Super. LEXIS 240 (Mass. Super. June 16, 1999). ery issues is early planning and management: 9. But see McPeek v. Ashcroft, 202 F..R.D. 31 (D.D.C. 2001) (“What alternative is there? Quill pens?”). ❐ Understand the nature of the evidence likely to be sought and its relevance to the claim or potential 10. See Julius Melnitzer, Keeping Track of the Invisible Paper Trail: What Legal Departments Can Learn from Boeing’s claim; Experience, Corporate Legal Times, Feb. 2003, available ❐ Agree – or obtain a ruling, if need be – on the at . ment on relevant search terms if appropriate; 11. Byers v. Illinois State Police, 2002 U.S. Dist. LEXIS 9861 ❐ Identify the point persons – including an IT (N.D. Ill. 2002). manager, or even an outside computer expert, if nec- 12. 205 F.R.D. 421 (S.D.N.Y. 2002). essary – responsible for overseeing the search, the 13. Id. at 429. identification, and review of information for pro- 14. See, e.g., Adam I. Cohen & David J. Lender, Electronic ducible material; Discovery: Law and Practice § 5.04(c) (Aspen Law & ❐ Allocate costs, giving due consideration to fac- Business, publication forthcoming 2003) (“If courts sim- ply conduct an absolute comparison of the eight Rowe tors found controlling by the courts; factors, the responding party will need to attain just one ❐ Perform a pre-production review of the elec- more factor to shift the costs to the requesting party. This tronic documents for privileged or confidential ma- is a dramatic shift from earlier cases, which were more terials; and inclined to follow the presumption in traditional docu- ❐ ment production, requiring the responding party to Determine when, whether and to what extent pay.”). the client should suspend recycling of backup tapes 15. 02 Civ. 1243, 2003 U.S. Dist. LEXIS 7939 (S.D.N.Y. May 13, and other routine document destruction policies. 2003) (“Zubulake I”); Zubulake v. UBS Warburg LLC, 216 F.R.D. 280 (S.D.N.Y. 2003) (“Zubulake II”). 16. Zubulake I, 2003 U.S. Dist. LEXIS 7939, at *36. and cost shifting in discovery, for example – seem to be 17. Id. at *24. the ones most in flux. Attorneys counseling clients on 18. Id. at *37. such issues might be well advised to join the rampaging 19. Id. rhinos. 20. Id. at *28. 21. 60 F. Supp. 2d 1050 (S.D. Cal. 1999). 1. Dana Hawkins, Office Politics in the Electronic Age, US 22. E.g., Scheindlin & Rabkin, supra note 6 (advocating News & World Report Online (Feb. 2000). amendments to Rule 34 to rectify issues identified). 2. See, e.g., David Hechler, New York’s AG Takes on the Street, 23. Proposed Model Rule Regarding Production of Data or Nat’l L.J., Dec. 23, 2002. Information in Electronic Form; Cost-Shifting and Safe 3. Rowe Entm’t, Inc. v. William Morris Agency, Inc., 205 F.R.D. Harbor [Electronic Discovery; Provisions for], available at 421, 429 (S.D.N.Y. 2002) (explaining that electronic data is . so voluminous because, unlike paper documents, “the 24. Tex. R. Civ. P. 196.4 (Electronic or Magnetic Data). costs of storage are virtually nil. Information is retained not because it is expected to be used, but because there is 25. The Sedona Conference, The Sedona Principles: Best Prac- no compelling reason to discard it”), aff’d, 2002 WL tices Recommendations & Principles for Addressing Electronic 975713 (S.D.N.Y. May 9, 2002). Document Production (Mar. 2003), available at . 4. Peter Lyman & Hal R. Varian, How Much Information? (2000), available at . 5. See Wendy R. Liebowitz, Digital Discovery Starts to Work, Nat’l L.J., Nov. 4, 2002, at 4 (reporting that in 1999, 93% of all information generated was in digital form). 6. Shira A. Scheindlin & Jeffrey Rabkin, Electronic Discovery in Federal Civil Litigation: Is Rule 34 Up to the Task?, 41 B.C. L. Rev. 327, 337 (2000) (footnotes omitted).

38 Journal | September 2003 View From the Bench The Role of Trial Court Opinions In the Judicial Process

BY JOHN B. NESBITT

hy should trial court judges write opinions? Institutional Obligations The question arose at the National Judicial Nevertheless, there are some very good reasons for WCollege last summer. As the instructor in a doing a written opinion notwithstanding the time taken seminar on logic and legal reasoning explained the rules away from other cases and the lack of interested audi- and fallacies associated with categorical, hypothetical ence.1 Two involve the judicial bottom line. and disjunctive syllogisms, I took notes for later study. First and certainly foremost, some form of explana- A Minnesota trial judge of obvious experience and con- tion is often obligatory – it’s part of the judge’s job de- fidence sat nonplussed with his arms folded across his scription. Statutes in many cases dictate at least a state- chest. When we spoke at a break, he smiled and said, ment of the essential facts found, given the unique “You know, John, we were elected to make decisions, function of trial judges as fact finders in non-jury cases.2 not explain them. Don’t over-think this stuff.” Any litigator or trial judge knows that credibility as- This recalled remarks a New York State Supreme sessments depend as much on how the testimony or ev- Court justice made at “judge school” held shortly after I idence is presented as well as what is presented. A cold was elected. Extolling the virtues of short bench rulings, record on appeal cannot preserve the dynamics of the the justice drove home his point with the aphorism that trial or proceeding that reflect upon the veracity of wit- one should not write when one can talk, and not talk nesses or probative value of exhibits and other evi- when one doesn’t have to. All this I had already heard dence.3 A trial judge’s decision can and should do so in at the feet of retired Court of Claims Judge Robert M. making the findings on contested issues of fact.4 Quigley, who embraced (with tongue in cheek) the Second, much of a trial judge’s job involves discre- maxim – scriptum manet – that which is written remains. tionary decisions. By this I do not mean to join the de- For, as Lincoln taught us, it is better to be thought a fool bates of the meta-thinkers of jurisprudence, Hart, than to open one’s mouth and remove all doubts. Dworkin, Posner, etc., regarding whether law qua law is Levity aside, serious practical considerations dis- inherently a discretionary discipline; I have something courage opinion writing on the trial level. Perhaps fore- much more pedestrian in mind. In many areas of law, most is the time and effort needed to do an adequate job. such as child custody determinations, no system of de- In private practice, lawyers spend much of their time ductive logic will take you very far in reaching a result. preparing, assembling and composing writings to per- These are basically on-balance, “totality-of-circum- suade others. Trial judges have their hands full just di- stances” judgments, with some guidance from the pre- gesting this material, much less explaining it. Some of it, sumptive, defeasible type of general propositions that such as unfiltered transcripts, other written evidentiary provide a conceptual framework or angle of vision for a materials and even the judge’s own notes, often does judge to use in thinking about the problems presented. not easily yield the relevant information without culling the extraneous and making some interpretive effort on what remains. The pace of the proceedings may be such that the trial judge cannot expect the lawyers to produce JOHN B. NESBITT is a County Court the type of memorandum of law or brief one could ex- judge in Wayne County and a member pect at the appellate level, drafted after sitting down of the Journal’s Board of Editors. While with a settled record, greater opportunity to fully re- in private practice, he served as presi- spond to opponent’s arguments, and the benefit of ade- dent of the Wayne County Bar Associ- ation. He is also a former assistant dis- quate time to draft and polish the perfect brief. trict attorney in Wayne County. A Finally, these hurdles aside, when the trial judge does graduate of St. Lawrence University, write an opinion, do the lawyers and litigants really care he earned his J.D. from Syracuse Uni- about anything except the result? In most cases, proba- versity College of Law. bly not.

Journal | September 2003 39 There is a danger that a judge may “wander off the premises, and dispositive rationale, the losing litigant is reservation,” perhaps very innocently, and with best in- left to indulge in self-satisfying speculation that the tentions. One tool the appellate courts use to monitor judge “cooked the books.” Although a written decision the trial bench is to look for evidence that the judge un- may not dissuade the litigant and the public from be- dertook an analysis consistent with the particular facts lieving that the judge was wrong in a particular case, it as well as general principles laid down.5 They do this by nevertheless reinforces, as Holmes would say, that the requiring an explanation of decision, to which they will game was played by the rules.7 give deference, but the absence of an explanation may The third institutionally based reason for trial court encourage reversal on grounds of an “improvident” ex- opinions involves cases where the judge has the oppor- ercise of discretion, or more pointedly, an “abuse” of tunity to advance the development of law through the discretion.6 Even more embarrassing in such situations, medium of the case before the court. Trial judges have a the appellate court may re- unique vantage point in the verse, remand and direct as- judicial hierarchy. While the signment to a different judge, With experience, study and appellate courts properly which I take to mean that the reflection, many judges develop lead the way, trial courts play judge reversed was so a role by drawing attention derelict that he or she cannot faculties of intuitive insight and to and deciding in the first be trusted to do it right a sec- instance solutions to new or ond time. practical reasoning that allow unsettled issues. Appellate These two “woodshed them to reach decisions very judges value that role be- avoidance” reasons for trial cause of the particular expe- court opinions are certainly quickly and very well. riences and perspectives that motivating. But other institu- trial judges bring to the table. tionally based reasons are A metaphor often used is equally or more reflective of why trial judges write, that of the law as a multi-authored chain novel.8 One three of which I would mention. more closely tied to my experience of snowshoeing up The first comes from what it means to be a lawyer the Adirondack high peaks is the obligation to break and part of a noble profession. Much of legal practice in trail when it’s your turn. No matter how tired you are or general, and the litigation part of it in particular, in- how insignificant your efforts compared to those of volves a dialogue with one’s peers, albeit in a very struc- your companions, being part of the enterprise means tured, disciplined format. We want our work to be the taking your turn when it is time. I believe this same idea best it can be, and we judge ourselves, and are judged applies to trial judges writing and publishing decisions by our colleagues, on that basis. One important way that that address issues affecting others beyond the immedi- a judge participates in this dialogue, respecting and en- ate parties. couraging the good work of fellow attorneys before the Instrumental Values bench, is to respond in kind – with a competent piece of Apart from the reasons for trial court opinions that legal analysis that reciprocates the professionalism of address the needs or expectations of an external audi- the bar. ence, there may be intrinsic benefits to be served by The second reason in this vein for writing trial court writing. This may be called the “getting it right” or in- opinions relates to the particular parties affected by the strumental value. ultimate dictate of the court and the public perceptions Judicial decisions at their best result from a dynamic of the judicial system. I am continually surprised at how yet disciplined interplay of conceptual (law) and empir- people will submit willingly, albeit begrudgingly, even ical (fact) analysis. With experience, stud, and reflection, bitterly, to an unfavorable result with devastating per- many judges develop faculties of intuitive insight and sonal consequences. They do so, I believe, because they practical reasoning that allow them to reach decisions accept the ideal of the rule of law, the notion of justice very quickly and very well.9 For these judges, the disci- made sure through law. This ideal presumes a judicial pline of opinion writing provides a medium to recover, system premised upon an extant body of law and a ju- confirm or retool the premises and structure of their rea- diciary willing to apply that law even-handedly and soning process.10 This two-step process – discovery and fairly. justification – is one that masters of the art have long Nothing breeds more disrespect and contempt than recognized.11 Judge Henry J. Friendly wrote that a judge the perception that the system treated a party differently should “have trained himself to test his conclusions by than it would another, for an improper or no reason. assaying to put them in writing, and to express them Without an explanation of the judge’s legal and factual fairly, clearly, and cogently.”12 Judge Frank Coffin ob-

40 Journal | September 2003 serves, “A remarkably effective device for detecting fis- advocates cannot assume facts convenient for their pur- sures in accuracy and logic is the reduction of the results poses. Notwithstanding otherwise brilliant analysis, of one’s thought processes.”13 there is no more sure prescription for decisional error Judge Posner takes the matter a step further by sug- than to misstate or omit pertinent facts. Indeed, it was gesting that the act of opinion writing can be constitu- E.B. White who wrote of the “eloquence of facts” and tive rather than simply reflective of one’s thinking.14 I the power they bring to a piece of writing. If so, then the would agree and add that it can be enabling as well. A advocate and judge better get them right. new judge without a font of experience, knowledge or Last, bad writing is not always better than no writ- confidence can quickly become intimidated by the com- ing. As lawyers, we tend to over-write. This usually sig- plexity of the issues that arise, and often the judge has nals either a lack of understanding of what you want to no built-in framework or orientation to even begin convey or a lack of confidence in your ability to convey working through those issues. In these situations, by it. I think the answer is to remember the words of the breaking down a case and tackling it in manageable French aviator and poet Antoine Saint-Exupery that bites, you get your arms around it and glean (with hope) perfection is achieved “not when you have nothing left a path to resolution. The process of decision drafting – to add, but when you have nothing more to take away.” “thinking through your fingers” – facilitates this. What Judges can afford to be self-indulgent in their writ- is an exercise of confirmation and justification for the ex- ing; advocates cannot. State the argument with preci- perienced judge can be a journey of discovery for the sion, clarity and perspicacity. Don’t bury or scatter it novitiate. among the cases and authorities discussed to support In either case, the challenge of writing an analytically the argument. There is no guarantee that the judge will crisp decision forces a judge to think about his or her recover it accurately. Be parsimonious in what you thinking. It requires the judge to be clear about which write. No judge wants to feel like a mouse in a maze, propositions are being offered to support which others, taking the long route when a more direct one is avail- which propositions are being inferred from which oth- able. If care is taken in these areas, the more likely the ers, and what is the mode of inference between proposi- lawyer’s work will be found at the judge’s elbow when tions serving as premises and the conclusions drawn. At writing a decision, and there is no higher compliment the end of the day, the culmination of this process is tra- than that. ditionally formalized by the judge syllogistically, a con- clusion deduced from major and minor premises, the 1. There are a few books and many articles on the subject of paradigm of categorical reasoning. Of course, getting to judicial opinion writing. The most readable and useful those premises, the ultimate predicates of decision, may work I have found is by Judge Gerald Lebovits, Advanced be the real work of the judge. The process involves cu- Judicial Opinion Writing: A Handbook For New York State Trial and Appellate Courts (7th ed. 2001); it is recom- mulative chains of argument employing a range of rea- mended by the 2002 Official Style Manual for the New York soning methods – deductive, inductive, analogical – and State Reports published by the State Reporter. selection of the legal and evidentiary artifacts to which 2. See, e.g., CPLR 4213(b) (“The decision of the court may be those methods will be applied.15 oral or in writing and shall state the facts it deems essen- tial.”). The Advocates 3. Judge Learned Hand, reflecting on the appellate court Advocates who understand the process of trial court function, once observed: “[Where] you get a cold record writing are in a better position to present their cases in a of witnesses in absolute conflict, [i]f you do not start with form of maximum utility to a judge. To the extent a some bias, it is almost impossible, at least for me, to tell memorandum of law is user-friendly, the more the which is lying and which is not. I used to try cases; and God knows, I was unsure about it even then.” Learned judge will refer to it. And to that extent, there may even Hand, The Spirit of Liberty 244 (3d ed. 1960). be a “halo” effect when it comes to the decisional path 4. See Joyce J. George, Judicial Opinion Writing Handbook the judge follows. 185–88 (4th ed. 2000). Advocates sometimes fail to appreciate the time con- 5. See, e.g., Graci v. Graci, 187 A.D.2d 970, 590 N.Y.S.2d 377 straints a trial judge faces. Most judges have or can read- (4th Dep’t 1992). ily gain an understanding of the legal concepts applica- 6. See, e.g., American Sec. Ins. Co. v. Williams, 176 A.D.2d ble to a case from a variety of sources, but they are 1094, 575 N.Y.S.2d 397 (3d Dep’t 1991). entirely dependent on the parties for bringing forward 7. See Michael Hertz, “Do Justice!”: Variations of a Thrice-Told the facts of legal consequence to their case. Accordingly, Tale, 82 Va. L. Rev. 111 (1996) (discussing the variations of the famous story of Justice Holmes’ rejoinder to Judge there are few better places for advocates to spend their Hand’s goodbye salutation to Holmes to “do justice,” to time than in presenting clear, concise, complete and cor- which Holmes replied, “That is not my job. My job is to rect exposition of the facts upon which a decision will play the game according to the rules.”). ultimately depend. Unlike law professors, judges and 8. Ronald Dworkin, Law’s Empire 228–38 (1986).

Journal | September 2003 41 9. Cass R. Sunstein, Incompletely Theorized Agreements, 108 15. See the much more graceful, insightful and articulate de- Harv. L. Rev. 1733, 1756 (1995). scription of this phenomena in Benjamin N. Cardozo, The 10. Kevin W. Saunders, Realism, Ratiocination, and Rules, 46 Nature of the Judicial Process 47–50 (1921). I also esteem Okla. L. Rev. 219, 233 (1993). and recommend the work of Professor Scott Brewer in this area. See Brewer, On the Possibility of Necessity in Legal 11. Richard A. Posner, The Problems of Jurisprudence 73, 91 Argument: A Dilemma for Dewey, 34 J. Marshall L. Rev. 9 (1990). (2000); Traversing Holmes’s Path Toward a Jurisprudence of 12. Henry J. Friendly, Reactions of a Lawyer – Newly Become Logical Form, in The Path of the Law and its Influence: Judge, 71 Yale L.J. 218, 222 (1961). The Legacy of Oliver Wendell Homes, Jr., (Burton ed. 13. Frank M. Coffin, The Ways of a Judge: Reflections from 2000); Exemplary Reasoning: Semantics, Pragmatics, and the the Federal Appellate Bench 57 (1980) (“The act of writ- Rational Force of Legal Argument By Analogy, 109 Harv. L. ing tells us what was wrong with the act of thinking.”). Rev. 923 (1996). 14. Richard A. Posner, Judges’ Writing Styles (And Do They Matter), 62 U. Chi. L. Rev. 1421, 1448 (1995).

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42 Journal | September 2003 So Your Client Wants to Buy At a Foreclosure Sale: Pitfalls and Possibilities

BY BRUCE J. BERGMAN

ate night television infomercials have for years to buy a house worth $500,000?” The reasonable answer touted the purchase of foreclosed properties as a is “yes.” Lpath to riches available even to the uninitiated. Then the lender proceeds to the legal decision. Based Propelled by unalloyed enthusiasm, the voluble pitch- upon a title search, and assuming that the contemplated men and sundry financial mahatmas are persuasive, loan is to be a first mortgage, will the mortgage be in a supported by testimonials from ordinary folks who en- first lien position so that the mortgage will be superior thusiastically boast of much success following the meth- to all other interests that might later attach?2 If the an- ods promulgated by the cheerleaders. For those without swer to that inquiry is also in the affirmative, the lender cable access and so denied the chance to fall under the knows that in the unwelcome event of default necessi- spell of real estate impresarios, there always seems to be tating a foreclosure, any later mortgages, judgments or an enticing story heard about a friend who bought a liens will be extinguished by the foreclosure proceeding foreclosure, turned it over quickly and garnered the so that the original scenario is forever frozen in time – a proverbial handsome profit – with ease. foreclosure sale purchaser paying $400,000 to buy a Can it all be so? It can, sometimes, but it is not neces- $500,000 property. sarily as easy or risk-free as the program purveyors sug- Foreclosures in the Real World gest. And for the uninformed, it can be conspicuously That’s the theory, but it doesn’t always work that Barmecidal. Although the underlying framework of way in practice. Although speedy non-judicial foreclo- lending and foreclosure is inherently designed to render sure pursuant to Real Property Actions & Proceedings a foreclosure sale purchase a bargain, unmentioned in Law Article 14 (RPAPL) exists in New York, it is un- the rosy prognoses are the shrouded perils, including: available for residences, and it has limitations even for the question of value, the erosion of the equity, holdover commercial properties.3 That leaves only judicial fore- tenants, title problems, real estate tax issues, the tenuous closure, which is prone to considerable delay. Graphi- physical condition of the property and some of the ob- cally expressed, here is what can happen: scure nuances attendant to judicial foreclosure sales. Understanding the Foreclosure A better appreciation of some possible dangers in BRUCE J. BERGMAN is a partner at Cer- purchasing at a foreclosure sale emerges when the fore- tilman Balin in East Meadow, where closure process is understood. Presenting this in ele- he heads the mortgage foreclosure de- mental fashion to a prospective sale bidder can prove in- partment. He is the author of the structive.1 three-volume treatise Bergman on New If a lender contemplates taking a mortgage (which is York Mortgage Foreclosures, Matthew the pledge of real estate as security for debt), the pre- Bender & Co., Inc. (rev. 2003), a mem- sentation needs to address two evaluations – a business ber of the USFN, the American Col- decision and a legal decision. If, for example, someone lege of Real Estate Lawyers, an ad- junct associate professor of real estate at New York wishes to borrow $400,000 to buy a house worth University’s Real Estate Institute and a special lecturer in $500,000, the loan to value ratio is 80%, perhaps a typi- law at Hofstra Law School. A graduate of Cornell Uni- cal limit many lenders would consider prudent. The ul- versity, he received his J.D. from Fordham University timate question they ask themselves is, “In the event of School of Law. a default and a foreclosure, will someone pay $400,000

Journal | September 2003 43 MORTGAGE PROCEEDS $400,000 cause it is the relationship of that value to all the poten- (LOAN AT 15% DEFAULT INTEREST) tial expenses to be incurred that either generates a profit EQUITY CUSHION $100,000 or causes a loss. * The prospective foreclosure sale buyer must decide PERCEIVED VALUE OF PROPERTY in advance of bidding how much to pay for the prop- AT INCEPTION OF MORTGAGE LOAN $500,000 erty. Obviously, the bidder must plan its own equity * cushion between what is bid and the expected resale price, with a sufficient margin for a profit after allowing * 2 Yrs. Interest at 15% Adds for the unexpected problems. * $120,000 to Debt and Erases Equity * What Will the Price Be? DEBT AT END OF TWO YEARS IF While knowing what the property is worth is much NO PAYMENTS MADE ON MORTGAGE $520,000 of the battle, being aware of the bid price range is criti- * cal too. Because counsel for the foreclosing plaintiff may DEBT AT CONCLUSION OF FORECLOSURE not know what the plaintiff’s bid (or upset price) will be WITH ADDITION OF LEGAL FEES, COSTS, until a very short time before the sale – or may be un- willing to reveal that information – the bidder should be DISBURSEMENTS AND ALLOWANCES independently well-armed with knowledge. IN FORECLOSURE ACTION $530,000 A typical notice of sale published in a newspaper re- cites an approximate sum due, and that, in turn, is based LOSS AT FORECLOSURE SALE TO LENDER: upon the filed judgment of foreclosure and sale. Al- DIFFERENCE BETWEEN VALUE AND though that sum will consist of all principal and interest DEBT OWNED $ 30,000 as computed by the referee, the actual computation re- Even if the interest on the mortgage was 8%, most lates back to some date around the time the referee pre- mortgages contain a provision for a rate upon default pared his calculations. That will likely be months (or that is higher than the note rate and could easily be con- sometimes years) prior to the date of the judgment. This siderably higher than the 15% default rate in the exam- requires adding interest (at the default rate if applicable) ple. In the New York City metropolitan area, for exam- from the “as of” date in the referee’s report of amount ple, a combination of court delays and a borrower due until the date of the judgment.4 dedicated to contesting the case could readily stretch In addition to the aggregate of principal and interest duration of the action to two years or more. Although a – which itself bears interest – the judgment will also re- foreclosure sale purchaser may have no concern about cite and assess costs, disbursements, (most often) al- the trauma and angst generated by the earlier combat in lowances and legal fees, all of which items may also ac- the case, the time factor translated into interest accrual. crue interest. What that rate of interest will be can be In turn, that increased the mortgage debt and thereby critical in determining the ultimate sum due, especially eroded – and in this example, eliminated – the equity if there is a long hiatus between entry of judgment and cushion. conduct of sale. (This can occur when there are bank- Is It a Bargain? ruptcy filings, lengthy settlement efforts or protracted It doesn’t take much for litigation and the time it de- post-judgment litigation, none of which are uncom- vours to upset the lender’s initial formulation. While mon.) foreclosure sale purchasers would typically pay $400,000 Once the judgment is entered, interest accrues at the for a $500,000 house, when the debt that the lender must prevailing legal rate,5 currently 9%. But there is an ex- be paid out of foreclosure sale proceeds becomes ception to that rule. If the mortgage explicitly provides $480,000 or $495,000, or actually exceeds the property’s that some particular interest rate shall apply and not value, then there may be no bargain to be had. (The merge into the judgment, then the intention of the par- lender could choose to accept less money than is due ties will control.6 Thus, a high default rate of interest rather than take the property back to resell, but that is a that survives the judgment could precipitously boost less likely result.) the sum due. Even in a garden variety foreclosure that suffers no There is then the subject of hidden advances. Of detainment and only minor legal expense, some interest course, the judgment quantifies, in numerals, the and expenses accumulate, consequently reducing the amount due. But it also authorizes additions to the sum equity. At this point, a key commandment for any fore- due, not in numbers, but in categories expressed in closure sale purchaser is know the value of the property. prose, such as entitling the plaintiff to add on or collect Quite simply, this is the paramount consideration, be- advances made to protect the lien of the mortgage. For

44 Journal | September 2003 example, if real estate taxes were in arrears and loss of The cost of money then becomes an important part of title to the taxing authority (and concomitant extin- the profit equation. Factoring in the length of time nec- guishment of the mortgage) was to occur subsequent to essary to put the property in salable condition, advertise judgment but before the foreclosure sale, the plaintiff it and close on a resale means that the purchase price ad- might elect to pay those taxes, thereby increasing the vanced for each parcel is unavailable to earn interest or debt due. Depending upon the type and location of otherwise be invested. The successful foreclosure sale property, as well as the duration of the tax default, this bidder is not playing with someone else’s money. sum could be thousands, tens of thousands, or hun- Title issues are another immediate concern. In New dreds of thousands of dollars. York, the goal of the foreclosing party is to extinguish all Categories of authorized advances that can increase subsequent interests, accomplished by naming and the upset price also include sums paid to prior mort- serving all persons with positions subordinate to the gagees or for hazard insurance premiums, among oth- mortgage being foreclosed. Did the attorney for the ers. Hence, some measure of uncertainty lurks here too. foreclosing plaintiff do that? The bidder will need a title Even when the full sum search to know, although due the foreclosing plaintiff is even if diligence confirms finally unearthed, the terms Even in a garden variety the efficacy of what the of sale can create the further foreclosure that suffers no lender did, it is hardly un- addition of interest upon the usual for defendants to come ultimate bid price. Because detainment and only minor to court after the sale swear- the closing is almost invari- ing that they were never ably declared to be 30 days legal expense, some interest served. That is a potential after the sale, the terms of sale and expenses accumulate, time-killer. will often impose interest on Observe too that the prop- the bid beginning with the consequently reducing the equity. erty will be sold subject to 31st day. Contemplating that any number of possible in- interest is lost to the plaintiff terests, for example, prior as of the very first day after the auction, some terms of mortgages (this could have been a second mortgage in sale will decree interest due on the bid beginning im- foreclosure), prior judgments, zoning ordinances and mediately. Obviously, the larger the bid and the more tenancies, if any, among other things. Despite the gen- the delay until closing, the greater becomes this further eral proposition that the mortgage would not have been expense to the bidder.7 consummated in the first place if there were liens senior to the mortgage to be delivered, there are exceptions. The Pitfalls That is to say, there could be various encumbrances not Being familiar with the particular methodology of subject to extinguishment by the foreclosure which the foreclosure sale is important too. This is decidedly therefore continue to burden the property. This is some- not the no-money-down realm of other real estate thing the purchaser must examine in advance, because schemes. Instead, 10% of the amount bid is a normal re- it is an integral part of what is being bought. Title insur- quirement, usually in the form of cash, certified check or ance doesn’t cover such interests. bank check payable at the auction to the referee. (Third- As to tenancies, in a perfect world, the defaulting party checks may not be accepted.) borrower, or his tenants, would quietly depart the fore- Critically, the purchase is almost invariably not sub- closed premises after the foreclosure sale and before the ject to obtaining a mortgage. That means that at the fore- closing. In this conspicuously imperfect world, how- closure sale closing (usually, as noted, about 30 days ever, many such people recognize that they can continue after the auction sale) the bidder needs the balance of to live rent free until the legal system ousts them. How the purchase price in cash. long after the foreclosure such holdovers will finally be A bidder who erroneously assumed that a mortgage constrained to depart is problematical. It might con- would be forthcoming to finance the purchase might sume but a few weeks in some upstate areas of New then default for want of funds to close title. And there York, but it easily takes many months in New York City could be any number of other reasons why a bidder and a few months even in Nassau and Suffolk Counties. might be unable to close or experience a change of heart. Such a morass both incurs legal fees and denies physical The bid deposit is then at risk, but only to the extent of possession of the property for whatever period until that deposit.8 (Should a subsequent foreclosure sale entry is finally available. This is yet another infirmity yield the same or a greater sum, the bid deposit would that must be quantified when addressing the foreclo- be refunded.) sure purchase.

Journal | September 2003 45 Real estate taxes are still another consideration. There any imaginable ill that could afflict a neglected or aban- are four issues here: doned property. Sometimes disgruntled borrowers – or • The amount of real estate taxes affects the value of others – willfully destroy the premises. The would-be the property so those taxes need to be determined in ad- bidder must leave room in the valuation for a worst- vance. case situation. • Any exemptions that benefited the property, such Ultimately, time becomes an inescapable element in as for veterans or seniors, will be lost upon a resale, un- planning for a profit. The most accurate calculation of less the new purchasers so qualify. market value combined with a sage purchase price • In New York, real estate taxes that are a lien on the eventually will be banished to irrelevance if all the pos- property must be paid out of sale proceeds, but those sible problems consume too much time. So it is exigent taxes will, of course, accrue until the property is sold, to estimate the duration from foreclosure sale purchase and therefore are another carrying charge that must be until resale. During that time, money has a cost, taxes accounted for. and utilities must be paid, tenants must be evicted, re- • In the unusual circumstance of such a directive in pairs must be made. In the end, there will be closing the judgment, the terms of sale will shift the obligation costs, legal fees and, if the foreclosure sale purchaser to pay outstanding real estate taxes to the foreclosure doesn’t assume the task, brokerage fees. It all might not sale purchaser. be so alluring in the end. Thus, a $400,000 bid price could suddenly become The Best Case $410,000 – or much more. Having endeavored to flush out the landmines, we Nor can transfer taxes be dismissed as irrelevant. Al- should not deter the ardent. If there really is value in the though, as a matter of statute, transfer taxes are the property under foreclosure, it is reasonable to assume obligation of the seller, the better rule is that this re- that besieged borrowers would rescue that equity by 9 sponsibility can be altered by contractual agreement. selling the property themselves and satisfying the mort- Counsel to foreclosing plaintiffs will frequently shift the gage. They have an absolute right to do so, which is pre- burden of paying transfer taxes to the bidder in the cisely why in times of prosperity or increasing real es- terms of sale. Because in many instances this sum can be tate values most foreclosure cases never arrive at the thousands of dollars, bidders must listen carefully to auction sale stage. terms of sale read by referees and be aware of this pos- Sometimes, though, the borrower-owners are hus- sible – indeed likely – responsibility. band and wife involved in an acrimonious divorce. The Any hope that rent arrears that may have accrued at bitterness is such that they cannot agree upon a sale and the foreclosed premises can be collected by the bidder is so they suffer a foreclosure. That one could be a bargain. dashed as a matter of law. A claim for pre-foreclosure Then there is the owner who, for whatever reason 10 sale rent has no legal basis, and New York law is clear suffers a surfeit of judgments and liens on the property. 11 that such arrears are unrecoverable. Because together with the mortgage those other liens Perhaps the most discomforting hidden surprise is aggregate more than the value of the property, it cannot the condition of the foreclosed premises. Before the fore- be sold. But in a foreclosure, all those liens are extin- closure auction, a prospective bidder can (and certainly guished and a wise bidder can buy a $500,000 house for should) view the outside of the property to assess the $400,000, or a $300,000 house for $125,000 – or however value of that parcel in that neighborhood. Until the the numbers develop. hammer falls at the auction sale, however, the borrower There remains some further comfort for bidders. One continues to own the property and need not – and typi- source of such comfort is the maxim that a good faith cally will not – afford entry to strangers. Although a foreclosure sale purchaser is insulated from liability for lender has certain rights in this regard and could be- prior rent overcharges where the purchaser had no no- come a mortgagee in possession, or have a receiver of tice of this existence of rent overcharge claims.12 (But the premises appointed to assume physical control or that protection does not extend to a subsequent pur- secure the premises against vandalism should it become chaser.13) vacant, those situations are the exception. Usually, the To be sure, yet other issues have an impact upon the interior of the property is unavailable to be seen, either process: risk of loss after the foreclosure sale and before because the occupants deny entry or because the prop- delivery of the deed;14 the bidder’s possible liability for erty is sealed. prior rent overcharges;15 reversal of the foreclosure on The inside condition is thus a critical imponderable. appeal.16 Paint could be chipped or be lead-based, appliances The problems don’t evaporate, but an astute aware- non-functional or removed, piping pulled out or burst – ness of them might level the playing field or present a

46 Journal | September 2003 chance to earn a profit. Care and practical wisdom can legitimize the theories of those late-night acolytes. Informed 1. For a far more detailed review of foreclosure basics, see 1 Bergman on New York Mortgage Foreclosures, Chapter 2, “Overview and Guide to the Basics of Mortgage Foreclo- Consumers Make sure Concepts and Strategies,” Matthew Bender & Co., Inc. (rev. 2003). Better Clients 2. Real estate taxes and certain statutory “super liens” will be superior even to an earlier recorded mortgage, but these concepts are understood by mortgage lenders and Legal Ease Brochure Series From represent a risk factor for which they presumably plan in The New York State Bar Association advance. Make your consultations more efficient and put your firm’s services 3. For an explanation of the availability and infirmities of on display: non-judicial foreclosure (more accurately foreclosure of • the legal issues your clients are most interested in mortgage by power of sale) see 1 Bergman on New York • reviewed and updated annually by NYSBA Section and commit- tee leaders Mortgage Foreclosures, Chapter 8, Matthew Bender & Co., Choose from a wide range of titles below. Inc. (rev. 2003). A. Adoption in New York I. Your Rights to an Appeal in 4. For a more complete review of the interest principles see a Civil Case B. Buying and Selling Real Estate 2 Bergman on New York Mortgage Foreclosures § 27.04, J. Your Rights if Arrested C. Divorce and Separation Matthew Bender & Co., Inc. (rev. 2003). in New York State K. You and Your Lawyer 5. CPLR 5004; Taylor v. Wing, 84 N.Y. 471 (1881); European D. HIV/AIDS and the Law L. Your Rights as a Crime Victim Am. Bank v. Peddlers Pond Holding Corp., 185 A.D.2d 805, E. If You Have an Auto Accident M. Why You Need a Will

NEW Y 586 N.Y.S.2d 637 (2d Dep’t 1992). ORK S TATE B AR AS F. Living Wills and Health SOCIA TION Banque Nationale De Paris v. 1567 Broadway Ownership As- Care Proxies 6. N O CIATI ASSO E BAR Rights of TAT ORK S socs., 248 A.D.2d 154, 669 N.Y.S.2d 568 (1st Dep’t 1998); G. Rights of Residential Owners NEW Y Residential and Tenants Marine Mgmt. v. Seco Mgmt., 176 A.D.2d 252, 574 N.Y.S.2d Adoption Owners and 207 (2d Dep’t 1991). H. The Role of a Lawyer in Tenants Home Purchase Transactions in New York 7. Perhaps in part because issues such as this necessitate disposition at the closing, the question of whether this in- terest mandate is enforceable has not been the subject of Three easy ways to order! reported litigation. Unofficially, however, there is an un- reported case ruling that the interest must be paid: • Tele-charge your order, call All brochures are (800) 582-2452 or (518) 463-3724 shipped in packs of 50. Bankers Trust Co. of California, etc. v. Roberta Hall as Mention Code MK068 All titles $10 per pack Guardian of the Person and Property of Jean L. Bogan, et al., • Fax this completed form of 50. short form order, Oct. 1, 2002, Sup. Ct., Queens Co., Mar- to (518) 463-4276 tin J. Schulman, J., Index No. 6532/98. • Mail this form with a check made Please indicate which payable to NYSBA to: titles you are ordering 8. See 3 Bergman on New York Mortgage Foreclosures and the number of New York State Bar Association packs desired. § 30.07[3], Matthew Bender & Co., Inc. (rev. 2003). Order Fulfillment 9. Regency Sav. Bank v. Terry Ross Assocs., N.Y.L.J., Nov. 27, One Elk Street Albany, NY 12207 2002, p. 21, col. 4 (Sup. Ct., Queens Co., Price, J.); LaSalle Qty. Total Nat’l Bank v. Taylor, Index No. 4604/96. See Trefoil Capital ______$ Corp. v. Creed Taylor, Inc., 125 Misc. 2d 152, 479 N.Y.S.2d Name______A. 308 (1984), rev’d other grounds, 121 A.D.2d 874, 504 Address (No P.O. Boxes Please) ______B. ______$ N.Y.S.2d 112 (1st Dep’t 1986). For a more thorough re- ______C. ______$ view of this subject, see 3 Bergman on New York Mortgage City______D. ______$ Foreclosures, § 30.05[1][f], Matthew Bender & Co., Inc. State______Zip ______(rev. 2003). E. ______$ Phone ( ) ______10. Bankers Trust Co. v. Glasser, N.Y.L.J., Nov. 18, 1998, p. 25 F. ______$ E-mail ______(Dist. Ct., Suffolk Co., Spinner, J.) See 3 Bergman on New G. ______$ Check or money order enclosed in the York Mortgage Foreclosures § 31.10, Matthew Bender & ______$ ______H. Co., Inc. (rev. 2003). amount of $ . ______$ Charge $______to my I. 11. Bankers Trust Co., N.Y.L.J., Nov. 18, 1998, p. 25 (citing Met- American Express Discover J. ______$ ropolitan Life Ins. Co. v. Childs Co., 230 N.Y. 285 (1920)). MC/Visa K. ______$ 12. See 3 Bergman on New York Mortgage Foreclosures Exp. Date______L. ______$ § 31.01[6], Matthew Bender & Co., Inc. (rev. 2003). Card Number______M. ______$ 13. Gaines v. New York State Div. of Hous. & Community Re- Signature______newal, 230 A.D.2d 631, 646 N.Y.S.2d 106 (1st Dep’t 1996). Display Racks: _____ 9 pamphlet rack $30/ea $ ______14. N.Y. General Obligations Law § 7-105; Tischler v. Key One _____ 12 pamphlet rack $34/ea $ ______Corp., 67 A.D.2d 886, 413 N.Y.S.2d 710 (1st Dep’t 1979). Subtotal $ ______15. See 3 Bergman on New York Mortgage Foreclosures Sales Tax $ ______§ 31.02[4], Matthew Bender & Co., Inc. (rev. 2003). Total $ ______16. See 3 Bergman on New York Mortgage Foreclosures MK068 § 31.03[5], Matthew Bender & Co., Inc. (rev. 2003).

Journal | September 2003 47 The 2002 General Practice Monograph Series from NYSBA

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To the Forum: ternative counsel, and returning the I am a sole practitioner with a busy, client’s property, including unearned This column is made possible suburban law practice devoted largely compensation. Of course, a problem through the efforts of the NYSBA’s to real estate, trusts and estates, and can arise where your inability to con- Committee on Attorney Professional- civil litigation. Two months ago, I suf- duct your practice is unexpected – e.g., ism, and is intended to stimulate fered a heart attack, had bypass a heart attack – which renders you un- thought and discussion on the subject surgery and was unable to work full able to take the steps suggested by EC of attorney professionalism. The time for about six weeks. Fortunately, 2-32. The practical solution is to plan in views expressed are those of the au- my two paralegals and secretary car- advance and appoint another attorney thors, and not those of the Attorney ried the ball and averted any crisis to take such steps for you. Professionalism Committee or the NYSBA. They are not official opinions with my ongoing matters. I am 61 Canon 6 advises a lawyer to repre- on ethical or professional matters, nor years old and although I planned to re- sent a client competently (EC 6-1), and should they be cited as such. tire at age 65, my recent bout of ill to use proper care to safeguard the in- health and developing addiction to the The Attorney Professionalism terests of the client (EC 6-4). Under DR Committee welcomes these articles golf channel have me thinking other- 6-101, the lawyer who “neglects a legal and invites the membership to send in wise. However, I am concerned that if matter” fails to act competently. comments or alternate views to the re- prior to my planned retirement I be- Should you suddenly be unable to con- sponses printed below, as well as ad- come ill again and am unable to ser- duct your practice because of illness or ditional questions and answers to be vice my clients, I will be in violation of death, your clients’ matters could be considered for future columns. Send an ethical rule or regulation. Does the neglected, and their interests seriously your comments or your own ques- Code of Professional Responsibility prejudiced as a result. A court date tions to: NYSBA, One Elk Street, Al- impose specific requirements upon could be missed; a statute of limita- bany, NY 12207, Attn: Attorney Pro- sole practitioners to plan in advance tions could expire; a closing could be fessionalism Forum, or by e-mail to for a sudden inability to work? What delayed because funds in your escrow [email protected]. are my professional responsibilities, if account could not be withdrawn. Ar- any, to my clients? Although I have ranging for coverage in the event of an may even want to authorize that attor- taken the required CLE credits in unforeseen inability to work therefore ney to represent your clients. This ethics, none of the courses that I’ve at- appears necessary under the Code. By could be accomplished by obtaining tended have covered this topic. failing to make such arrangements in your clients’ consent to such an Sincerely, advance, the inference could be drawn arrangement in advance, either in a re- Anxious in Amityville that you are not fulfilling your obliga- tainer agreement or letter of engage- tions to represent competently, and to ment. Taking these steps could avoid a Dear Anxious: protect, your clients and their interests. claim that you had failed to protect The Code of Professional Responsi- Further, a lawyer has the obligation client confidences. bility does not impose a specific re- to protect the confidences and secrets You also have responsibilities with quirement on a sole (or any) practi- of his or her clients (DR 4-101(B)). If respect to clients’ funds and other tioner to protect clients in the event of you were to appoint another attorney property that may have come into a sudden inability to continue in prac- as your agent to inventory your files your hands. Failure to attend to such tice. However, several rules and ethical and to notify your clients in the event property during your disability could considerations, along with general of your unavailability, you would be be deemed a violation of your fidu- principles of attorney professionalism, helping to minimize disclosure of priv- ciary responsibilities under DR 9-102. are relevant to your concerns. ileged information. An attorney who Not opening mail containing estate Under DR 2-110(B)(3), a lawyer reviews your files will be aware of the checks or checks in settlement of litiga- must withdraw from representing a requirement to maintain the clients’ tion delays the payment of those funds client where his “mental or physical confidences that appear in the files. A to your clients, and therefore may vio- condition renders it unreasonably dif- family member or other non-attorney late DR 9-102(C)(4). That section re- ficult to carry out the employment ef- reviewing your clients’ files may, on quires the attorney to “promptly pay fectively.” The withdrawing lawyer is the other hand, inadvertently reveal or deliver to the client . . . funds . . . in advised by EC 2-32 to minimize harm privileged information since he or she the possession of the lawyer which the to a client by giving him or her due no- will be unaware of a lawyer’s obliga- client . . . is entitled to receive.” Sub- tice of the withdrawal, suggesting al- tion to protect such information. You section (D) of DR 9-102, which imposes

50 Journal | September 2003 requirements regarding bookkeeping ance with the Code – you will also be getting her volatile ex-husband to records, is also implicated if you sud- exhibiting attorney professionalism. come to an agreement and thus spared denly are unable to practice. There is The Forum, by her the trauma of a trial. no provision in the Code relieving a Susan F. Gibralter As part of Mary’s property settle- lawyer of the duty imposed by DR 9- Bertine, Hufnagel, Headley, Zeltner, ment she received their summer home 102(D) to keep certain bookkeeping Drummond & Dohn, LLP in Lake Chautauqua in upstate New records for seven years based on an Scarsdale, New York York. Mary has now decided to sell the unexpected cessation of practice. QUESTION FOR THE NEXT summer home and she called Mr. Given that fact, and in view of DR 9- ATTORNEY PROFESSIONALISM Summ to represent her in the sale. Mr. 102(H), which requires a law firm FORUM: Summ not only agreed to do so but upon dissolution to make arrange- also asked Mary to go to dinner with To the Forum: ments for maintaining the records re- him. I know my sister has been very quired to be kept under DR 9-102(D), it I am a second-year law student and lonely and depressed as a result of her may be inferred that you have an hope to concentrate my practice in divorce and she was both surprised obligation to designate another attor- family law. and delighted at Mr. Summ’s invita- ney to review your files so that the My sister, Mary, had her divorce fi- tion. bookkeeping and storage require- nalized about a year ago. She tells me Somehow, although I am not sure ments of 9-102(D) are complied with if that throughout the legal process of why, Mr. Summ’s agreeing to represent you are unable to continue practicing her divorce she was very impressed by her on the sale of the property and law. her husband’s attorney, Mr. Hans inviting her to dinner don’t seem right Attorney professionalism is often Summ. She says that he was very po- to me. lite, organized and efficient at all the equated with dedication of service to Is it proper for Mr. Summ to repre- depositions and conferences that she clients, competence and the display of sent my sister? Is there anything attended and seemed incredibly good judgment. By formulating a plan wrong with his asking my sister out to knowledgeable and sophisticated today to insure that your clients will dinner? throughout the proceedings. not be harmed by an unexpected in- Sincerely, ability to practice law in the future, Mary believes that Mr. Summ’s ex- Worried in Williamsville you will not only be insuring compli- pertise and professionalism resulted in

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Journal | September 2003 51 Representing an Incapacitated POINT OF Person at a Fair Hearing VIEW BY MARVIN RACHLIN

Medicaid applicant’s or recipi- have a guardian appointed who can nature of the service, program, or ac- ent’s right to a Fair Hearing then authorize you to proceed. tivity.”11 The Supreme Court defined a Ahas been mandated and statu- This policy continues in spite of a fundamental alteration by requiring torily guaranteed since the enactment regulation that requires a written au- the state to compare the resources of the Medicaid program.1 The right to thorization to represent – “[e]xcept available to the state with the cost of a Fair Hearing cannot be limited or in- where impracticable.” The regulation providing the services requested by terfered with in any way.2 goes on to require such authorization the disabled individuals and then de- The denial, discontinuance, suspen- by anyone “other than an attorney.”5 termine whether the state metes out 12 sion or reduction of previously autho- Why Medicaid insists on the ap- these services equitably. rized benefits are basic Medicaid ac- pointment of a guardian before an at- A disabled individual with capacity tions that assure an individual’s right torney can represent an incapacitated can authorize an attorney to represent to a Fair Hearing.3 The right to be rep- individual is without explanation. such individual at a Fair Hearing. resented by counsel is assured, and Refusing to permit an attorney to Does the sole difference of lacking the any notice issued by Medicaid must in- represent the individual under such capacity to authorize such representa- clude a statement of the right to be rep- circumstances violates the rights of tion permit the state of New York to resented by counsel.4 such individual by effectively delaying erect an impediment to proceeding Being authorized to represent a or denying the right to a Fair Hearing with the Fair Hearing by requiring the client at a Fair Hearing is usually as that is statutorily guaranteed for all appointment of a guardian, and does simple as being retained by the indi- Medicaid applicants and recipients. such impediment violate the incapaci- vidual or a family member of the indi- Incapacitated individuals requiring tated individual’s rights pursuant to vidual. various levels of Medicaid care have the ADA? Pursuing a Fair Hearing on behalf been deemed to be disabled within the A Fair Hearing is a time-sensitive of a deceased individual is less simple. purview of the Americans with Dis- administrative proceeding. It must be Letters Testamentary or Letters of Ad- abilities Act (ADA)6 by every level of requested within 60 days of the Medic- ministration are necessary for anyone the federal judiciary.7 aid determination that is the subject of to transact any of the affairs of the es- The issue is whether New York the appeal.13 If the issue is a reduction tate, which includes the request and State can refuse to permit the represen- or discontinuance of a service, then a prosecution of a Fair Hearing. For this tation of a disabled person until a request for a hearing must be made be- reason New York State requires proof court-authorized guardian is in place. fore the effective date of the proposed 14 of the issuance of such letters before al- The ADA defines a public entity as action, which is usually 10 days. lowing an attorney to proceed on be- “any State or local government.”8 The By establishing a requirement that half of a decedent. statute then goes on to provide that an incapacitated individual must have Consider the position of New York any qualified individual with a disabil- a court-appointed guardian, prior to State when a Fair Hearing is requested ity, by reason of such disability, may representation, the state is effectively on behalf of an individual who lacks not be “excluded from participation in denying such individuals the basic capacity, who had not previously exe- or be denied the benefits of the ser- right to a Fair Hearing and the right to cuted a Durable Power of Attorney, vices, programs, or activities of a pub- continuing aid for a service already in and who does not have an appointed lic entity, or be subjected to discrimina- place. For those individuals who are guardian or any family. tion by any such entity.”9 denied a service, their right to appeal Any attempt to represent such an The U.S. Supreme Court, in the such denial also faces the impediment individual at a Fair Hearing will result Olmstead case,10 established a standard that a guardian must first be ap- in the New York State administrative for the statutory affirmative defense to pointed. law judge refusing to permit you to a claim of violation of an individual’s If the policy of New York State is proceed because you have not been rights pursuant to the ADA. The statu- that an attorney is not authorized to “authorized” to represent the individ- tory defense is that the requested ser- represent an incapacitated individual, ual. Typically, you will be advised to vice would “fundamentally alter the then it follows that such attorney is not

52 Journal | September 2003 authorized to request the Fair Hearing, tally alter the program because it bury, Islandia and Lido Beach. He is a thereby effectively denying the right to would not alter the program at all. It former chief counsel to the Nassau a Fair Hearing to every incapacitated would simply assure that a right al- County Department of Social Ser- person who has no representative ready guaranteed by the program not vices. available in the form of someone who be denied to certain individuals who has received a Durable Power of Attor- happen to lack the capacity to autho- 1. 42 U.S.C.A. §§ 1396–1396v, N.Y. So- cial Services Law §§ 20, 22, 34; N.Y. ney, no family member who can be a rize a representative to act on their be- Comp. Codes R. & Regs. tit. 18, pt. spokesperson and no court-appointed half. 358 (N.Y.C.R.R.) guardian. Even the case of Rodriguez by Ro- 2. Vincent J. Russo & Marvin Rachlin, It is unusual that New York State driguez v. City of New York,15 which is New York Elder Law Practice – does not question the right of a family 2003, §§ 9:1, 9:2 (West Group 2003); generally seen as the case that nar- 18 N.Y.C.R.R. § 358-3.1(a). member to authorize an attorney to rowed the Medicaid home care pro- 3. 18 N.Y.C.R.R. § 358-3.1(b)(3). represent an incapacitated individual gram, relied in its decision on the 4. 18 N.Y.C.R.R. § 358-2.2. at a Fair Hearing because there is no premise that the ADA applies only to 5. 18 N.Y.C.R.R. § 358-3.9 statutory authority for such authoriza- “services they in fact provide.” As dis- 6. 42 U.S.C. §§ 12101–12213. tion. astrous as this was for home care, it 7. Olmstead v. L.C. by Zimring, 527 U.S. The demand to permit the legal rep- protects the incapacitated individual 581 (1999); Rodriguez by Rodriguez v. resentation of an incapacitated indi- seeking representation at a Fair Hear- City of New York, 197 F.3d 611 (2d vidual without authorization should ing. Cir. 1999); Fisher v. Oklahoma Health be judged by the standards of the ADA Care Auth., No. 02-5192, 2003 U.S. Fair Hearings are definitely a ser- App. LEXIS 14191 (10th Cir. July 15, as defined by the Olmstead case. vice that New York State in fact does, 2003). The state can justify its position by and legally must, provide. 8. 42 U.S.C. § 12131(1)(A). claiming that the relief demanded No attorney should be prevented 9. 42 U.S.C. § 12132. would fundamentally alter the Medic- from representing an incapacitated in- 10. Olmstead v. L.C. by Zimring, 527 U.S. aid or Fair Hearing program. dividual at a Fair Hearing, nor can 581. It is undisputed that every individ- there be a prerequisite that a guardian 11. 28 C.F.R. § 35.130(b)(7). ual applicant or recipient of Medicaid first be appointed to authorize such 12. Olmstead, 527 U.S. at 607; see Russo has the right to a Fair Hearing. To ex- representation. & Rachlin, supra note 2 § 7:37 at 488. tend this right to incapacitated indi- 13. 18 N.Y.C.R.R. § 358-3.5(b)(1). viduals incapable of authorizing legal MARVIN RACHLIN is of counsel to Vin- 14. 18 N.Y.C.R.R. §§ 358-2.5, 358-3.6. representation, would not fundamen- cent J. Russo & Associates of West- 15. 197 F.3d 611 (2d Cir. 1999).

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Journal | September 2003 53 ial is poetry, the University of Chicago sum of $1,000.00.” He asked, “When a Press indicates the omission as follows: previous paragraph states that you LANGUAGE Of thee I sing, baby, shall not pay $1,000.00, I believe that You have got that certain thing, this statement relieves the necessity of TIPS baby, paying that amount, but fellow Shining star and inspiration lawyers have said that I’m wrong. Worthy of a mighty nation, Who is correct?” B Y G ERTRUDE B LOCK ...... (Ira Gershwin) I answered correctly that because However, in a prose quotation, the notwithstanding means “in spite of” or uestion: How does one indicate Chicago Press requires four dots, fol- “not prevented by,” the statement ellipses – words omitted when lowing quoted material, to indicate one quoted means that you must pay the Qquoting someone’s writing? or more paragraphs omitted. The first $1,000.00. So far, no problem. But there Answer: Authorities are not unani- dot immediately follows the last was a problem, because in answer to mous, but their advice does not differ quoted word, to indicate a period; the the question “Who is correct?” I wrote, significantly. The University of Chicago other three dots are spaced. And if the “You are.” WRONG. Those two words Press, in The Chicago Manual of Style material in the next quotation is not the made the response self-contradictory. I (1982), prefers the following: From first sentence of that paragraph, three hasten to change the words, “You are” within a quoted passage, indicate an el- spaces precede it to indicate ellipsis. to “They are.” And I thank David Cartenuto, of Sleepy Hollow, who lipsis by ellipsis points (dots), never by The Associated Press Stylebook treats caught the error. asterisks. The points are printed on the ellipsis in general like the University of line and separated by one typewriter Chicago Manual, but uses space more From the Mailbag II space from the quoted material and economically, in accordance with mod- A regular correspondent wrote, from each other and the following ern trends. An ellipsis is treated as a “What is tatparasha? It sounds like a material. (For example, the sentence three-letter word, with a space before disease.” above, if language were omitted, and a space after the ellipsis, but none would read: “The points are printed on between the points ( ... ). To indicate It’s a grammatical term for a com- the line and separated . . . from each language deleted at the end of one pound word whose first part limits its other and the following material.”) paragraph and at the beginning of the second part. One example is shoebox. The Chicago Manual of Style indi- following paragraph, ellipsis dots are The first syllable of shoebox (shoe) limits cates material omitted between sen- placed in both locations. the meaning of the second syllable (box). tences by four dots: a period and three In a story, the AP omits ellipses at the ellipsis dots. When the omission is at beginning or end of direct quotations. Once you begin thinking about the the beginning of the sentence, the first subject, examples come easily. A few • Original quotation: “However, it dot (the period at the end of the full are landlocked, roadway, eardrop, and has become evident to me that I no sentence quoted) comes directly after longer have a strong enough politi- hairbrush. But there’s little besides self- the final word of the quoted sentence. cal base in Congress.” satisfaction in knowing the meaning of Thus, the material above, quoted with • Shortened quotation: “It has become tatparasha. It’s difficult to drag it into a ellipses, would read, “Between sen- evident to me that I no longer have a conversation. (I know, I’ve tried.) tences, omitted material is indicated by strong enough political base.” . . . a period and three ellipsis dots. . . . In short, there is little agreement GERTRUDE BLOCK is lecturer emerita at the University of Florida College of directly after the final word quoted.” among authorities, giving you leeway Law. She is the author of Effective When the omitted material comes at to choose the method you prefer. Legal Writing (Foundation Press) and the end of the sentence, the first three co-author of Judicial Opinion Writing ellipsis dots are separated by spaces, From the Mailbag I (American Bar Association). the fourth following without a space, In the May Language Tips, an attor- indicating the period at the end of the ney asked me to settle an argument be- sentence. The passage above would tween himself and his colleagues then read, “Between sentences, omit- about the word notwithstanding. The ted material is indicated by . . . a period questioner quoted the following state- and three dots . . ..” ment as the subject of the argument: With regard to omission of one or “Notwithstanding the preceding para- more paragraphs, if the quoted mater- graphs, you shall pay into the fund the

54 Journal | September 2003 Crossword Puzzle answers from September 2003 issue:

1D 2H 3J U S T I F I C A T I O N A N Z 4A 5A L 6 I B I G 7D I 8M G 9C 10R N 11P L E A B A R G A I N I R O O F R A G S 12G 13P I R S 14A C C E S S O R Y M 15S D R R C R A N U S P E A O U O R C 16S I X T H A M E N D M E N T S L 17B A I L Y I O E E D T T O O 18M I R A N D A P D A J I U R 19F S Y N U T R 20A T T O R N E Y 21H O T P U 22R S U I T O R U E T U R O R R Y T A I R 23U N L A W F U L G R A T U I T Y 24U I N O T M A S 25V O D N 26H A R M L E S S E R R O R 27A L L O C U T I O N M A N R O A 28P M 29I N D I C T M E N T Y L R R E 30P 31A C O D K O N L T E 32B A D C H E C K 33A 34A R R A I G N M E N T A M D 35V I O S T E 36R E N U N C I A T I O N N 37V I N L C V E 38F O T 39F R U I T O F T H E P O I S O N O U S T R E E N E I E D L 40P E R J U R Y M 41D W I I O Y C N 42E N T R A P M E N T Y

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56 Journal | September 2003 Eyal Doron Bruce G. Habian Stuart Speight Koonce Jeanne Drewsen Cameron Edward Half Geri Sprung Krauss NEW Jennifer Darie Amy Elizabeth Halpert Peter A. Kreiner Duberstein Jae-min Han Sarah Rebecca Krissoff EMBERS David M. Dugan Kim Han Krzysztof Kuik M Franklyn Duporte Morgan Emmanuel Marjorie Beth Kulak Tamar Y. Duvdevani Hankin Jason Michael Kurtz WELCOMED Julie Diane Dyas Justine Hansen Carrie Robin Kurzon Bradley Peter Dyer Pamela Sue Hanson Joanne Ng Kwong Patrick J. Egan Shawn Alan Harden Anthony George Ikenna Paul N. Emehelu David W. Heleniak Kyriakakis FIRST DISTRICT Katherine Starr Karen Endres Kristin Nicole Alan Jeffrey Landau Anna Abrigo Bromberg Amy B. Erenrich Henderson Denise Michele Lang Benjamin Maxwell Trevor Thomas Bruno Christopher M. Evans Scott Michael Hendler Doralba Lassalle Adams Jonathan Miles Bryant Daniel Jason Evans Elizabeth A. Hickey Joseph C. Lavalley Karri June Adams Toby K. Buchanan Cameron Samuel Fairall Isabel Maria Hidrobo Brian Christian Lavin Olga Akselrod Theresa A. Buckley Leeor Farshad Farhadian Akiko Hishikawa Mark Jason Lazar Lawrence Aaron Katherine Bushueff Valerie Feigen Ian Howard Hlawati Gary Scott Lazarus Altholtz Bridget Cara Byrnes Andra Feiner Claudia M. Hoefs Tanya Lynne Leach Michael Lee Altschuler Darrell Scott Cafasso Michael Jon Fellerman Nadim R. Homsany Phineas E. Leahey Jason Edward Ambers Michelle Marie Margo Genevieve Tomonori Honda Christina Y. Lee Vicki Fotiny Andreadis Campana Ferrandino John Joseph Hopwood James Geechul Lee Daniel Simon Anisfeld Donna A. Canfield Thomas Andrew Ferree Edward Seth Hornstein James Insun Lee Elisheva Apfeldorf Karen Ann Canisius Daniel Fertig Valerie Sue Hsieh Lauren Un Yung Lee Dawn Renee Applegate Shana Ruth Cappell Taryn D. Fielder Karen Hsu Ephraim David Douglas Raymond Kathlyn Marie Card David Lloyd Filer Rosalynn W. Hsu Lemberger Arntsen Amy B. Carper Jennifer Kline Fisher Lun Hua Ian James Lennard Michelle M. Aronowitz Amy J. Carter Wendy Risa Fleischer Dennis An-chih Huang Shara A. Lerman Puneet Singh Arora Alvise Maria Casellati Vanessa Maria Flores Brian James Hufnagel Bernard Moise Levy Anna Elizabeth Arreola Janine Marie Cerbone Marc Jean-pierre Fredj Raymond T. Hum Mara Rebecca Levy Javier Asensio Keri Beth Chaimowitz Donald Greenwood Frey Starr Stellamaris Robert Jordan Lewis Sara Beth Attas Florence Rose Chapin Susan Deegan Friedfel Ilzhoefer Bernice Leyva Jennifer Aurora Lori Ellyn Chasen Matthew Gerson Gabin Shonda Latosha Irby Ling Li Tiffany Danielle Austin Christine Yong-hwa Chi Matthew T. Gammons Carrie Lauren Jabinsky Clara Liang Misty A.M. Bailey Daniele Lee Chinea Lisa H. Gan Loren Jacobson Mitzi Sharon Lieberman Irene Mary Baker Jongik Chon Danielle Jean Garber Vijeta Jasuja Joanna S. Liebman David Peterson Bardeen Julia Chung Glenn Gurshaan Pristine Sai Si Sylvia Hsiao-fen Lin Alexander Corbin Burr Henry Joseph Cittone Gardner Johannessen Alexander T. Linzer Barnard Sylvia Jeanine Conley Molly Elizabeth Gardner Melissa Dawn Johnson Andrew Howard Lipton Luis F. Barragan Robert Edward Conrad Sonia L.R. Garner Tara L. Jones Joshua Adam Lipton Jennifer Ann Battaglino Karen K. Contoudis Charles Gavoty Gina J. Jung Susan Liu Hal Nathanial Beerman Timothy Carl Cooley Corey Keith Gay Deena B. Kalai Brett Matthew Logan Thomas Behrmann Avidan Yehuda Cover Jeffrey S. Geier Craig Andrew Kalkut Nancy K. Lucas Bryan Noel Bellack Michelle Marie Craven Amanda E. Gerhardt Allison Jill Kamensky Sara Arlene Lulo Evan Andrew Belosa Michele Leigh Creech Galina German Todd Leslie Emily Rebecca Luskin Sally S. Benvie Sonya Lee-anne Tara Lin Getschman Kammerman David Hamilton Mackey Marina Camila Crosswell Willa Rose Ghitelman Ana Paula Kang Josiah Russell Madar Benzaquen Ana Elizabeth Cruz Allen Gregory Gibbs Joshua David Kaplan Bryan F. Madden Joshua Berengarten Christina Elizabeth Talia Gil Larrisa Michelle Katz Amir Malik Beth Heather Berger Daigneault Sahil Tejas Godiwala Tracy Somber Katz Danielle Marisa Malito Janeen Franki Berkowitz Thomas Royal Davis Jordan A. Goldstein Deborah Jean Kay M. Michael Maoz Peretz B. Berkowitz Kristopher Michael Irina Gomelskay Brian Sean Kelleher Christian Willard Sandra Elizabeth Dawes Angelo Michael Grasso Christopher S. Kennedy Marcelli Bertrand Julie J.M. De Bruijn Jason Grauch Leeora Kidron Leyla Marrouk Hanna Bilavsky Bension Daniel De Funis Anne Roderick Grayson Dillon Kim James Paxton Marshall Ashley Lynn Blick Ashton Joseph Delauney Siobhan McGlynn Green Jeeheon Kim Deborah Martinez Jessica Robyn Daniel Richard Demarco Heath C. Greenlee Julia Young Kim Juan De Jesus Martinez Blumenfeld Raffaele A. Demarco Sarah Elizabeth Mina Kim Jason Andrew Masimore Corina G. Boelsterli Askan Denstaedt Greenless Paul Kangyoo Kim Laura Jennifer Massaro Darren Thomas Boswell Rebecca Gabrielle Elena Maria Grimme James Edward Kimmel Alison Leigh Mathis Elizabeth Caldwell Deutsch Sean Patrick Gruver Jennifer Karen King David James McClure Bowyer Derrick Clay Diggs Ping Gu Lauren Blythe Kleinberg Shannon Elise McClure Amy Lauren Bressler Shani Candace Dilloff Tanya A. Guazzo Jeffrey Wayne Kleiner Kerry Denise McIlroy Vanessa Bressler Kyrsten De Anne Dixson Nicholas Rosario Jaime Beth Koniak Lawrence Matthew Brin David Jonathan Dixter Gugliuzza

Journal | September 2003 57 Patricia Leigh McMillan Aaron Pomeroy Joshua Michael Sivin Manuel Werder THIRD DISTRICT Minoux Ann Marie Preissler Justin M. Smith Brian James Westfield Robert C. Benedict Sujeet Dinesh Mehta Jessica M. Prunell Nicholas Anthony Smith Kelvin Anthony Wheeler Tara M. Bernstein Jason Paul Ment Neil A. Quartaro Karen Jane Sneddon Anne-Marieke Widmann Christone Elizabeth Elmer Vincent Merry Prabhu Raman Brad Michael Snyder Richard John Windram Smith Alan R. Merson Tawfiq Saifee Rangwala Kristine A. Sova Jill Marie Witkowski Stacey-Anne Mesler Maria A. Raptis Dimitrios Spanos Howard Wizenfeld FOURTH DISTRICT Alison Maie Mikkor Aron F. Rattner Elizabeth Speidel David Benjamin Wolfe Khai Hoang Gibbs Robbi Louise Miller Abhilash M. Raval Emily Kathleen Spitser Christine Wing-sei Wong Joy Marie Smith Marc Leon Mitchell Joshua H. Raymond Naresh Sritharan Wendy T. Wylegala Neely Moked Juan Carlos Real Michael Lewis St. Peter Victor Xercavins FIFTH DISTRICT Melissa B. Monti Spencer L. Reames Alexandra Stanton Karen Li-jia Yen Peter J. Addonizio Katherine Mooney William O. Reckler Gregory Michael Starner Fumiko Yokoo Sandra A. Allen Mary Frances Mooney Mason Aaron Reeves Michael John Steinberg Sara Barron Zablotney Jason Neil Burns Amanda Kate Moore Caroline Elizabeth Reid Lauren Michelle Johanna Sanger Zapp Christa L. Carrington Christian Moretti Kimberly Diane Reilly Steinman Kristina Marie Zarlengo John Coughlin Kiisha Jamila-Beverly Malcolm J. Reilly Todd B. Stern Scott Alan Ziegler Todd Wesley Gleason Morrow Abraham Aba Reshtick Scott Richard Strobridge Kim Lane Zinke Melissa Ann Latino Richard Patrick Mulcahy Matthew Mcpherson Justin Scott Strochlic Yana M. Zukher Aaron Lindsey Amie Sosko Murphy Balfour Riccardi Christopher W. Stuart Andrea Dawn Marotta Maura Louise Murphy Gregg Steven Rivkind Zachary Braddock SECOND DISTRICT Frank Benny Pelosi Laura B. Mutterperl Elizabeth Rachel Robins Sturges Gudrun H. Antonsson Shawn M. Sauro Richard John Naddeo Assaf Avihu Ronen Patricio A. Suarez Erin M. Bannister Lawrence R. Sheets Brigitte Marie Nahas Aaron D. Rosenberg Johanne L. Sullivan Avi Bobker Daniel S. Silber Jennifer Rebecca Nathan Mark Jason Rosenwasser William Michael Swift Claudine Reeshemah Beatrice M. Sitgreaves Jonathan Mathias Melissa Ann Rubin Mariya Aziz Talib Brown Robert Alan Smith Nathan Eva Shoshana Rubinson Paul David Tanaka Pamela Brown Heather M. Tank Nyieri Nazarian Jonathan Mark Ruby Jeffrey M. Tapick John Ray Cardona Lee Terry Alon Neches Patricia Kay Patrick Fiore Tedesco Vincent M. Cella Maria Pape Vitullo David Neiman Runkles-Pearson Margaret A. Teresi Andrea F. Composto Timothys Scott Nelson Melanie Vogel Sadok Timothy J. Theroux Margaret Crespo SIXTH DISTRICT David Michael Nemecek Stephanie H. Sandler Gerd Damsgaard Michael Patrick Daly Maura Ann Jean-Michel Ngalikpima Richard Alan Sandman Thomsen Chidi Anthony Eze Kennedy-Smith Adam V. Nguyen Samira Sarbakhsh Erika Lyn Tobias Adam Caleb Ford Xi Lian Keith James Norton Matthew Evan Schaefer Amelia E. Toledo Raquel Gordon Sarah K. Matthews Nicholas John Nowak James A. Schiff Steven L. Topal Latania Graham-Parham Darren Kenneth Gorgon Yosef Michael Jason Scott Schlessel Anne M. Torrey Hongling Han Shaw Nussbaum Ross H. Schmierer Melissa Amelia Ann Marie Henderson Alexandre Omaggio Lisa Mandell Schneider Trepiccione Terry Stephen Hinds SEVENTH DISTRICT Saule T. Omarova Kyle Hilton Schurle Maria Isabella Tripodes Sauda Siwatu Johnson Lisa Christine Arrington Claudia L. Onate Ian Michael Schwartz Edmund Bernard Troya Narissa Adrienne Joseph Sarah M. Bierley Tomoko Onozawa Jaime Marie Schwartz Jake S. Tyshow Hillel Kanner Robin Paige Day Meghan O’Reilly Shane Dwight Scott Michael Vaccaro Pavita Krishnaswamy David A. Gomes Llen T. Oxman Rebecca Farand Seaman Mirande Valbrune William Robert Larkin Tara R. Johnson Monica Pa Kim Thuy Seelinger Matthew John Van Janet Christine Mace Corinne Lundstrum David A. Palame Amelia Katherine Wormer Gina M. Mavica Kristen J. Thorsness Vasilis F.L. Pappas Seewann Priscilla Vargas Alexander Meladze Shea Philip Unwin Anthony Sang-kyom Daniel M. Segal Valerie Vena Brent N. Meltzer Park Peter D. Serating John Francis Viggiano Kyette Mia Nguyen EIGHTH DISTRICT Catherine Park Danielle Bockman Carol Cecilia Villegas Sara Pankowski Neysa I. Alsina Sunmin Park Shalov George Jeffrey Visomi Justin Solomon John William Andrews Gabrielle Anne Paupeck Devi Shanmugham Parag Mahesh Vora Pozmanter Matthew Mark Becker Justin Joel Peacock Monica Fritzell Shaw Anandita Vyakarnam Gail Rappaport Pamela J. Fielding Rebecca Leigh Perlis Yi Sheng Nathan James Wagner Apoorva V. Reddy Timothy Donovan Lucy Claire Pert Thomas Hughlin Scott N. Wagner Daniel Samuel Reich Gallagher Marc A. Pifko Shepherd Ann Walker McDowell Suzanne Lynn Renaud Kevin J. Kruppa Christopher A. Pih James A. Sherer Jimmy Akashi Wang Caryn Anne Rosencrantz Steven J. Lord James Thomas Pisciotta Eric Joseph Shimanoff Wei Wang Joseph Septimus Jitesh Malik Michael James Pitch Stephen Paul Sigurdson Erica Felice Wass Dana Meredith Seshens Christopher Matthew Maria Elizabeth Platsis Alan Myles Silver Carla D. Watson Wendy Zoe Singer McCarthy Mehmet Firat Polat Mandee Rebecca Bradley Charles Weber Jeremy Scott Tishler Barclay Lipsey Betsy M. Polatsch Silverman Jennifer Weitz Offer Waide McCauley Afton Nicole Polier Yelena Simonyuk Matthew Charles Welsh Amy Beth Widman Paul Martin Michalek Dylan Scott Pollack Aaron P. Simpson Jinho Jean Weng Cheryl Nichols

58 Journal | September 2003 Anastasia Pryanikova James E. Tierney William Whitney Gitanjali Lakhotia Pierre-Emmanuel Seytre Michael J. Roemer Elizabeth Vail Burke-White Haena Lee Daniel R. Sheridan Linda Schnell Kelly A. Yankowski Curt Eugene Burwell Jai Hyung Lee Kuniharu Shiihara Brendan M. Scott Michael Joseph Callanan Laura Jisun Lee Hee-gang Shin Christine Marie Zells ELEVENTH DISTRICT Patricia Ann Caponigro Robert C. LePome Stephen Jay Shin Shaya M. Berger Paul Chameli Robin Kolodny Leshem David Thomas Shivas NINTH DISTRICT Jeremy J. Bethel Angela Mui Chin Chan Daniel Joseph Macaluso Eric Shuffler Michael Abayomi Aluko Azaleea Silvana Carlea Shawn D. Chand Tina Maisonneuve Ailie L. Silbert Kristine Ciganek Steven Mark Coffey Aimee M. Cooper Alexey Victorovitch Kevin Andrew Sills Michele M. Dickinson Michelle Davila Elizabeth Corwin Manasuev Ross O. Silverman Aliciamarie E. Falcetta Brian M. Dunphy Patrick Coughlin Burt Jin Markham Susan Monique Small Margaret T. Gallagher Margaret Hunt Daniel Kadane James Anthony Marx Jeremy Michael Sokop Ronald L. Konove Jason Louis Karavias Crane-Hirsch Jeremy R. McClane Chang-hyun Song Linda May Lin Chen Li Thomas A. Crowell Suzanne E. Miles Jonathan David Philip Michael J. Norton William E. Lynch Mark Craig Curley Shadi Mokhtari Stevens Steven M. Reback Christelle Gisele Matou Michael Edward Michael Gavan Andrew Rice Strauss Wanda Rivera Eva Maria Pena Davidian Montague Daniel Louis Symons Frederick J. Salek Brenda Reilly Jeanne Elizabeth Demers Robert Bernard Mullen Nobuko Takaishi Sheila Yvonne Samuels Yokasta Reinoso John Roland Dempsey Alison Julie Nathan Heath Price Tarbert Michelle Lee Santoro Nyreedawn Natashi Ron Gabriel Dor Mei Chai Michelle Ng Marianne Tawa Jeffrey James Schietzelt Simpson Bruce Dave Dudley Gretchen M. Nichols Jeanette Tejada Thomas J. Sullivan Aaron Y. Strauss Jessica Bridgit Duff Massimiliano Nitti Jing Tian Paolo Torzilli Danny Chan Uk Ha Elizabeth Anne Duwe Thomas D. O’Brien Jorge Michael Torres Kafu Yu Paul Leon Edenfield Konstantin V. Olefir Brian S. Tretter TENTH DISTRICT Demetrios A. Eleftheriou Quentin A. Palfrey Thomas Arthur Utzinger Michael Altmann TWELFTH DISTRICT Richard David Elliott Jasmine Chandulal Patel Michael Constantine Carolyn Angrisani Jennifer Rebecca Gillian Emily Ennis Andrew S. Paul Vasiliadis Randee H. Arem Connolly Miguel Enriquez Constantine Pavlos Richard Villar Maureen Artman Latoya Cammile Joanne Feil Gera Ruben Peoples Ryugen Watanabe Heidi J. Brownyard Edwards Allyson Filipps Maria Barbara Pilson Andrew Lee Watson Matthew Bryant Cory Michael Garcia Brendon Pierce Fowler Bernadino Joseph Pistillo Peter Der-pey Wei Jose A. Butler Katherine Anna Hort David Benjamin Kristin Loiuse Quirk Sheila Marie Weigert Michael Richard Byrne Izumi Miyake Friedrich Robert Rabas Brad Curtis Westlye Jennifer Rose Chan Julian Bond O’Connor Amanda Lauren Fuchs Mark Christopher Elliot Cady Fonseca Evan J. Costaldo Jason Peter Petri Cecilia Ann Gassner Reichel Williams Emily R. Davidson Glenn Matthew Race Axel Erwin Gehringer Thomas E. Roberts Rhodri C. Williams Jason A. Dunkel Ruben M. Scolavino Christoph J. Geiger Adrian F. Rodriguez Tina Maria Williams Melissa Lynn Eggers Patricia A. M. Serafinn Wayne Edward George Rafael Gerald Rodriguez Connie Kong-nee Yang Joshua G. Eichner Adam David Shlahet John Thomas Goldman Robert Ian Rubenstein Yoon Soo Yoon Kathleen C. Feehan Lauren E. Wenegrat Michael Aaron Granne Petra Ingrid Sansom Stuart Jay Young Michael Carey Hayes Edward Matthew Gray Elena V. Savrassova Jeongsik Yu Shorab Ibrahim OUT OF STATE Alisia Dale Grenville Alexandra Scherenberg Luz Maria Zea Cabrera Adrienne D. Jappe Alice S. Abatzis Emmy Bodrogi Hackett Elana Kathleen Seifert Janet R. Zimmer Dwight Andrew Reuven Abeshouse Benjamin Adams Hance Kennedy Samantha K. Abeysekera Joelle Beth Hazelwood Douglas Shaun Kepanis Damian L. Albergo Johann Wessel Heukamp Christopher Kula Fabiola Altimari Rebecca Lynn Hobbs In Memoriam Jerome Irving Lutnick Adam Christian David Ronald Hock Harmon Samuel Lutzer Anderson Katherine J. Hooper Samuel W. Eager Brian Joseph Mcgrath Damir Arnaut Suzana Hot Middletown, NY John T. McLaughlin Luisa Erminia Arosio Pauline Candice Huet James L. Goldwater Thomas Eugene David Randall Azbill Junko Iwama Briarcliff Manor, NY McManus Katherine A. Baron Britta Wilson Jacobson Constantine P. Lambos William John Muller Thomas Joseph Robert Sharan Haresh Jagtiani New York, NY Christopher J. Ostuni Basile Jacobus P. Joubert Gerald Meschkow Elizabeth A. Pfister Keith Richard Betensky Bruno Andre Julien Hollywood, FL Albert Theodore Powers Bradley Rodriguez Yuji Kakiguchi Charles Stewart Raifman Bohrer Sergio Ruben Karas John Stuart Smith Rochester, NY Martin E. Restituyo Yves Claude Botteman Sheba Karim Christie Del Rey-cone Brandon E. Boutelle Yoshiyuki Kawakami Myron E. Tillman Clara Luz Rivera Kelli Davidson Brown Donghyun Kim Hampton, NH Marvin N. Romero Michael Jakob Josef Seung-hyeon Kim Lawrence Waldman Rachel Alyson Siskind Brueck Ginger Brandy Atlantic Beach, NY Lauren Renee Soroka Ari G. Burd Lachapelle

Journal | September 2003 59 THE LEGAL WRITER Companies, Inc.17 The defendant moved trial and appellate courts, from which CONTINUED FROM PAGE 64 to transfer a tobacco case from Brazo- this column is adapted. His e-mail like of his lawyer. Likewise, the ria County, Texas, to the District of Co- address is [email protected]. would-be lawyer raised on the hit lumbia. Over Bolivia’s opposition, the 1. See, e.g., Thomas E. Baker, A Review television series, L.A. Law, to believe court granted the motion: of Corpus Juris Humorous, 24 Tex. a law degree is that golden ticket to Tech. L. Rev. 869 (1993) (book re- a glamorous career of big money, The Court seriously doubts whether view); Richard Delgado & Jean Ste- fast cars and intimate relationships Brazoria County has ever seen a live fancic, Scorn, 35 Wm. & Mary L. among the beautiful people may Bolivian . . . even on the Discovery Rev. 1061 (1994) (arguing that judges think twice before sending in his or Channel. often heap scornful humor on de- fenseless litigants); Adelberto Jor- her law school application when . . . 12 dan, Imagery, Humor, and the Judicial word of this case gets out. [T]here isn’t even a Bolivian restau- Opinion, 41 U. Miami L. Rev. 693 Some opinions are famous for their rant anywhere near here! Although (1987); Susan K. Rushing, Is Judicial the jurisdiction of this Court boasts Humor Judicious?, 1 Scribes J. Legal humor. Miles v. City Council of Au- Writing 125 (1990). 13 no similar foreign offices, a some- gusta concerns whether Blackie the 2. George Rose Smith, A Primer of Talking Cat was exempt from paying what dated globe is within its pos- Opinion Writing, For Four New taxes. While discussing Blackie’s free- session . . . . [T]he Court is virtually Judges, 21 Ark. L. Rev. 197, 210 certain that Bolivia is not within the speech rights, the judge pretended that (1967). Justice Smith eventually four counties over which this Court changed his mind, though. See he actually spoke to Blackie. To the presides, even though the words Bo- George Rose Smith, A Critique of Ju- Fifth Circuit that opinion was the cat’s livia and Brazoria are a lot alike and dicial Humor, 43 Ark. L. Rev. 1, 25 meow, not a cat-o’-nine-tails. The dis- n.60 (1990) (declaring that “that part caused some real, initial confusion of the Primer disapproving judicial trict court’s cataclysmic opinion was until the Court conferred with its humor is hereby overruled, set the catastrophic catalyst that cata- law clerks . . . . Bolivia, a hemisphere aside, held for naught, and stomped pulted the catatonic reviewing court to away, ain’t in south-central Texas, on!”). use every categorical “cat” catechism and . . . . the District of Columbia is 3. In re Rome, 218 Kan. 198, 207, 542 known to felinekind. No one can tell a more appropriate venue (though P.2d 676, 685 (1975) (per curiam) Bolivia isn’t located there either). (quoting 1924 Canons of Judicial whether you will purr or hiss if you Ethics). 14 Furthermore, as . . . the judge of this read the Fifth Circuit’s opinion. Read 4. William L. Prosser, The Judicial Hu- Court simply loves cigars, the Plain- it anyway. It has nine lives. And you morist: A Collection of Judicial tiff can be expected to suffer neither should have Miles to go before you Opinions and Other Frivolities vii harm nor prejudice by a transfer to (1952). sleep. Washington, D.C., a Bench better 5. Benjamin N. Cardozo, Law and Liter- For erudite humor in opinion writ- able to rise to the smoky challenges ature, 39 Colum. L. Rev. 119, 122, 52 ing, study anything by Judge Alex presented by this case, despite the Harv. L. Rev. 471, 483, 48 Yale L.J. Kozinski of the Ninth Circuit.15 Few of alleged and historic presence there 489, 501 (1939) (simultaneously pub- us can write like Judge Kozinski does. of countless “smoke-filled” rooms.18 lished), reprinted from 14 Yale Rev. [N.S.] 699 (July 1925). Even fewer should try. It takes a life- I close by hanging my hat on this 6. Compare David B. Saxe, Not a Time time of study to succeed. It takes a life- amusing thought: for Humor, Nat’l L.J., Aug. 14, 1989, time appointment to dare. Judge p. 13 (con), with Richard W. Wallach, Kozinski, rated among the greatest It is an unfortunate truism that not Let’s Have a Little Humor, N.Y.L.J., Mar. 30, 1984, p. 2, col. 3 (pro) (ex- American opinion writers, believes all of life’s moments are happy occa- sions; nor can one artificially impose plaining in margin that Justice “Wal- that it is not enough to be right. To humor where it naturally does not lach . . . has practiced what he Judge Kozinski, a judge must also be preaches about humor in judicial belong. To pretend otherwise would opinions”). remembered. be akin to living in Monty Python’s 7. 1 U.S. [Cranch] 137 (1803). Perhaps Judge Kozinski’s greatest “Happy Valley,” where anyone 16 8. 347 U.S. 483 (1954). hit is United States v. Syufy Enterprises, found breaking the law by not being 9. Lord MacMillan, The Writing of an antitrust action against movie the- happy at all times is brought before Judgements, 26 Canadian Bar Rev. aters. The court’s opinion obliquely the merriest of judges and sentenced 491, 493 (1948) (“[I]n all the best ex- contains 207 movie titles. A few might to “hang by the neck until you cheer amples of judicial levity the lighter 19 give this star-chambered opinion das up.” passages are not dragged in by the ears for the mere purpose of display boot, but you should read it before it’s GERALD LEBOVITS is a judge of the but are strictly relevant to the issue gone with the wind. See how many New York City Civil Court, Housing and really advance the argument.”). movie titles you can spot. Part, in Manhattan. An adjunct pro- Our Canadian colleagues, by the To see how humor can fail, compare way, are kidding cousins. Recog- fessor at New York Law School, he nized as the best judicial parody is Judge Kozinski’s work to the opinion has written Advanced Judicial Opinion Canada’s Regina v. Ojibway, 8 Crim. in Republic of Bolivia v. Philip Morris Writing, a handbook for New York’s L.Q. (Can.) 137 (Sup. Ct. 1965) (Blue,

60 Journal | September 2003 J.) (finding that a pony is a bird); see Jerry Buchmeyer, Judicial Logic: Birds From the NYSBA Bookstore and Ponies, 45 Tex. B.J. 1345 (1982). 10. 192 A.D.2d 1115, 1116, 596 N.Y.S.2d 250 (4th Dep’t 1993) (mem.). 11. 938 F.2d 1092 (10th Cir.) (Brorby, J.), cert. denied, 502 U.S. 961 (1991). Contempt and the 12. Id. at 1093 (citations omitted). 13. 551 F. Supp. 349 (S.D. Ga. 1982) Courtroom On (Bowen, J.). Sale 14. See 710 F.2d 1542 (11th Cir. 1983). The Miles opinions are so notable “The bench and bar and the public the West Group published a book in will be well served by a thorough their honor. See Blackie the Talking knowledge and understanding of Cat and Other Favorite Judicial the nature and scope of this extraor- Opinions (1996). 15. See, e.g., White v. Samsung Elec. Am., dinary power. I believe Contempt Inc., 989 F.2d 1512, 1521 (9th Cir.) and the Courtroom to be a worthy (Kozinski, J., dissenting from denial effort in this direction.” of rehearing en banc) (“For better or worse, we are the Court of Appeals From the Introduction to Con- for the Hollywood Circuit.”) (em- tempt and the Courtroom by phasis in original), cert. denied, 508 U.S. 951 (1993). Then read David A. Dennis C. Vacco, Former Golden, Humor, the Law, and Judge Attorney General of the Kozinski’s Greatest Hits, B.Y.U. L. Rev. State of New York 507 (1992). 16. 903 F.2d 659 (9th Cir. 1990). 17. 39 F. Supp. 2d 1008 (S.D. Tex. 1999) (Kent, J.). A trial court must be capable not only of controlling 18. Id. at 1009–10. For a discussion of its courtroom, but also of controlling itself. The pur- the judge’s opinion-writing style in pose of Contempt and the Courtroom is to educate this and other cases, see Steven Lubet, Bullying from the Bench, 5 the bench, bar and public regarding the judiciary’s Green Bag 11 (2001). contempt power. 19. Marshall Rudolf, Note, Judicial Humor: A Laughing Matter?, 41 Hast- ings L.J. 175, 200 (1989) (citations Originally written for the 1995 New York State Judi- omitted). cial Seminars, this revised version provides a thorough overview of the federal and New York State laws of contempt. MEMBERSHIP TOTALS Author Product Info and Prices Lawrence N. Gray, Esq. Book Prices* Former Special Assistant 1996 • 148 pp., softbound Attorney General • PN: 4068 NEW REGULAR MEMBERS NYS Office of the Attorney List Price $40 1/1/03 - 8/15/03 ______6,011 General Sale Price $20 NEW LAW STUDENT MEMBERS 1/1/03 - 8/15/03 ______551 * Prices include sales tax

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Gutekunst Tyo, John E. Bailey, Lawrence R., Jr. Gunther H. Kilsch Second District * Van Graafeiland, Hon. Ellsworth Friedberg, Alan B. Cerchione, Gregory T. * Vigdor, Justin L. Kessler, Muriel S. David R. Pfalzgraf Cyrulnik, Hon. Miriam * Witmer, G. Robert, Jr. Millon, Steven E. Jay G. Safer Digiovanna, Lawrence F. Wolford, Michael R. †* Pfeifer, Maxwell S. Dollard, James A. Summer, Robert S. Fisher, Andrew S. Eighth District Weinberger, Richard Kamins, Barry Aversa, John M. Reich, Edward S. Brady, Thomas C. Out-of-State Romero, Manuel A. Doyle, Vincent E., III * Fales, Haliburton, 2d Sunshine, Hon. Jeffrey S. Edmunds, David L., Jr. Peskoe, Michael P. † Delegate to American Bar Association House of Delegates Sunshine, Nancy T. Evans, Sue M. Smith, Beverly McQueary * Past President Flaherty, Michael J. * Walsh, Lawrence E.

Journal | September 2003 63 Judicial Jesting: Judicious? THE LEGAL WRITER BY GERALD LEBOVITS

any warn against using Dean Prosser agreed. He wrote that if in Brown v. Board of Education8 Chief humor of any kind in a judi- “the bench is not an appropriate place Justice Earl Warren had been a pun- Mcial opinion. Nearly all warn for unseemly levity. The litigant has ning prankster? against using humor that does not as- vital interests at stake. His entire fu- But humor is acceptable when it’s sist the opinion’s utility, goes outside ture, or even his life, may be trembling inherent in, relevant to, or comple- the record, or ridicules or offends a lit- in the balance, and the robed buffoon ments the subject.9 Two examples. In igant, the disinterested reader, or a who makes merry at his expense Peevey v. Burgess,10 the Appellate Divi- 4 cause of action.1 Questionable humor should be choked with his own wig.” sion, Fourth Department described has no place in writing meant to create That, however, did not stop him from how the defendant, a tobacco chewer, precedent and reflect reasoned judg- compiling opinions for his book on the had attached a homemade spittoon to ment. And this assumes that the opin- subject, The Judicial Humorist. Dean his pickup truck’s emergency brake re- ion’s author is funny. In the case of Prosser doubtless took his title from lease. The truck needed repair. When judges, that’s rarely true. There are few Gilbert and Sullivan’s The Mikado. Sir the defendant’s mechanic released the funny judges, after all – only funny William Gilbert, a lawyer, had the Lord brake to go down a ramp, “six ounces people who’ve made career mistakes. High Executioner sing about persons of spit” sprayed into the mechanic’s The master, Justice George Rose who could be executed and not be face. The mechanic, “disoriented,” fell Smith, once wrote, “Judicial humor is missed, including “that Nisi Prius nui- out of the pickup truck, which rolled neither judicial nor humorous. A law- sance, . . . The Judicial humorist – I’ve down the ramp and struck another suit is a serious matter to those got him on the list!” mechanic. With deadpan humor, the concerned in it. For a judge to take Justice Cardozo’s approach to Fourth Department concluded “that it advantage of his criticism-insulated, humor was more tolerant than Dean was . . . reasonably foreseeable that de- retaliation-proof position to display Prosser’s, but Cardozo did not recom- fendant’s conduct . . . could . . . be a his wit is contemptible, like hitting a mend it. He explained that “the form proximate cause of injury to a third man when he’s down.”2 of opinion which aims at humor . . . is party.” Lightening wit is typically unen- a perilous adventure, which can be jus- tified only by success, and even then is lightening. A judicial opinion demands Lightening wit is propriety and professionalism. Hu- likely to find its critics almost as many 5 typically unenlightening. morous opinions, written to satisfy as its eulogists.” New York State some need to be humorous, can cross judges have been on opposite sides of the line. Some humor offends by exclu- this question. In the Appellate Divi- In the second case, United States v. sion and false notions of superiority. sion, First Department, for example, Prince,11 the defendant so desperately Humor also deflects from accountable Justice David Saxe rejects humor, wanted the court to relieve his public decision making and judicial responsi- while the late Justice Richard Wallach defender that he relieved himself on 6 bility. It’s one thing to have a sense of favored it as effective and memorable. his defender’s table in front of the jury. humor and grace on the bench, or to be Effective and memorable is truly From the Tenth Circuit’s opening para- clever during an after-dinner speech. funny humor that pokes fun at law or graph: It’s another to express humor in writ- society, is in good taste, and does not While the public’s perception of ing. As recited in a judicial disciplinary belittle the litigants, demean the judi- lawyers seems to reach new lows opinion, “Under the heading of ‘An- ciary, or make future litigants appre- every day, parents – we are told – cient Precedents’ in the canons of judi- hensive. And the humor must not still encourage their children to cial ethics adopted in 1924 by the dominate the opinion. The humor enter this profession. But the parent American Bar Association this ap- must be brief. who happens to read this opinion pears: ‘Judges ought to be more Judicial humor also has no place in may not be so quick to urge a loved learned than witty; more reverend important opinions. Would our per- child to become a lawyer after learn- than plausible; and more advised than ception of Marbury v. Madison7 be dif- ing how the defendant in this case confident. Above all things, integrity is ferent if Chief Justice John Marshall expressed his extreme personal dis- 3 their portion and proper virtue.’” had used a few off-color asides? What CONTINUED ON PAGE 60

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