ASSOCIATION OF BUSINESS TRIAL LAWYERS a t b l ORANGE COUNTY Volume VII No. 3 REPORT Fall 2005 Q&A with the Hon. Peter J. Polos A Lawyer’s Ethical Obligation Upon by Linda A. Sampson Receiving Inadvertently Disclosed [Editors’ Note: Linda Sampson met Privileged Documents: Avoiding with Judge Peter J. Polos for this Malpractice, Sanctions, and judicial interview. Judge Polos was appointed to the Orange County Disqualification in the Face of Uncertain Superior Court by Governor Gray Rules Davis in 2001 and, was, and is, the by Scott B. Garner and Isabelle M. Carrillo county’s youngest sitting jurist. Judge Polos is a member of the Litigators preparing for trial often look for that ABTL Judicial Advisory Board -- smoking gun document that can turn the odds dramati- one of many organizations to which he meaningfully contributes.] cally in their client’s favor. But what if that smoking gun document arrives inadvertently from the other side’s lawyer, and is patently or even arguably privi- leged and confidential? Existing case law does not pro- Q: Why did you decide to become a Judge? vide clear guidelines on what a lawyer should do when he comes into possession of such a document. The A: From the very beginning of my career, I knew I California Supreme Court has wanted to be a judge. I have always been able to see taken up the issue in Rico v. Mit- “both sides of the story,” so it was more natural for me to subishi (4th App. Dist. 2004) 116 be able to hear and consider both sides, rather than be a Cal. App. 4th 51 (review granted, tough advocate for one side or the other. June 9, 2004), a Fourth Appellate District case that discusses two -Continued on page 10- seemingly divergent decisions of other districts. Until the Court renders a decision, however, and -IN THIS ISSUE- to the extent the Court does not resolve all of the troubling and ♦ Q&A with the Hon. Peter J. Polos .................Pg. 1 inconsistent issues, litigators must ♦ A Lawyer’s Ethical Obligation Upon Receiving rely on these two divergent cases Scott Garner Inadvertently Disclosed Privileged Documents: and try to exercise sound moral Avoiding Malpractice, Sanctions, and judgment to avoid court ordered Disqualification in the Face of Uncertain sanctions and/or disqualification, Rules .................................................................Pg. 1 running into trouble with the State Bar, and subjecting themselves to ♦ President’s Message ........................................Pg. 2 potential malpractice liability to ♦ Federal Multidistrict Litigation: Pending their clients. Legislation and Some Thoughts on the Problem of Parallel MDL and State Court • Aerojet and the Risk of Not Proceedings ......................................................Pg. 3 Using the Privileged Document ♦ When Does a Lis Pendens Provide Constructive The first case Rico addresses is Notice? An Unresolved Issue ..........................Pg. 4 Aerojet-General Corp. v. Trans- Isabelle Carrillo ♦ Understanding CPA Reports on Financial port Indem. Ins. (1st App. Dist. Statements .......................................................Pg. 7 -Continued on page 12- ♦ Electronic Media in the Modern Trial ..........Pg. 9 President’s Message by Hon. Sheila B. Fell Critical to your practice of law is the integrity of your word as an attorney. It is 1800 S. Fairfax ave. equally as important as the case Los Angeles, CA 90019 studies in law school and your Phone: 323.939.1999; Fax: 323.935.6622 knowledge of the statutes. E-mail: [email protected] Some years ago, most of the www.abtl.org bars in the United States added the separate Legal Ethics ex- OFFICERS amination to the requirements Hon. Sheila B. Fell, President for becoming licensed to prac- Gary A. Waldron, Vice President tice law. There are few attor- James G. Bohm, Treasurer neys today who did not take the Professional Responsi- Martha Gooding, Secretary bilities Exam. Further, the continuing education re- quirements for re-licensing in the bar include certifica- BOARD OF GOVERNORS tion of ethics hours. Darren Aitken ▪ Hon. Gail A. Andler Hon. David O. Carter ▪ Hon. Richard D. Fybel Paul L. Gale ▪ Richard J. Grabowski An attorney’s reputation is what allows the attor- Hon. Frederick P. Horn ▪ John C. Hueston ney’s colleagues, and the judges (and juries) trying the Gerald A. Klein ▪ Melissa R. McCormick cases, to rely (or not) on the word of that attorney. The Sean P. O’Connor ▪ Hon. Kathleen E. O’Leary professional courtesy is afforded initially because of the Michelle A. Reinglass ▪ Ira G. Rivin attorney’s membership in the California State Bar, but Nanette D. Sanders ▪ Hon. James V. Selna that solid gold reputation can be lost through a number John B. Sganga Jr. ▪ Peter M. Stone of bad choices, and once lost, indelibly marks the tar- Hon. David C. Velasquez ▪ Peter J. Wilson nished attorney and that attorney’s firm. Meryl L. Young The profession of law is governed by many rules, JUDICIAL ADVISORY COUNCIL those inscribed and those that pass by word of mouth. Hon. Andrew P. Banks ▪ Hon. Cormac Carney They are equally the hallmarks of the legal profession. Hon. Thierry P. Colaw ▪ Hon. Kim G. Dunning Within the strictures of affording full representation to a Hon. David T. McEachen ▪ Hon. Peter J. Polos client is the binding obligation to proffer no evidence or Hon. William F. Rylaarsdam ▪ Hon. Nancy W. Stock theory that violates an attorney’s ethical code. An attor- ney cannot take a shortcut or enter into an unauthorized PAST PRESIDENTS (or illegal) activity in support of a client’s case under Donald L. Morrow ▪ Thomas R. Malcolm the guise of vigorously supporting the client’s legal Robert E. Palmer ▪ Andrew J. Guilford rights. The temptation to “push” this rule foreshadows Jeffrey W. Shields ▪ Michael G. Yoder Dean J. Zipser a lost reputation. EXECUTIVE DIRECTOR The standard for completing law school and then Rebecca L. Cien passing the bar is very high. So, too, should the stan- dard be equally high for the daily practice of law. The EDITOR information in a declaration, whether substantive facts Richard J. Grabowski or a proof of service, is representative of the law firm. If the declaration is impeached, both the integrity of the ASSISTANT EDITOR declarant and the law firm are demeaned. The proof of Linda A. Sampson service illustration is merely an example of the fragility of one’s reputation and integrity, and it is meant to The statements and opinions in the abtl-Orange County Re- show that each act performed in the practice of law has port are those of the contributors and not necessarily those of far reaching consequences. the editors or the Association of Business Trial Lawyers - -Continued on page 12- Orange County. All rights reserved. 2 Federal Multidistrict Litigation: Pending familiar with the case, the parties, and the issues, and it arguably was in a better position than the originally- Legislation and Some Thoughts on the assigned judge to efficiently try the case. But in 1998, Problem of Parallel MDL and State the Supreme Court found the practice of “self-transfer” Court Proceedings was inconsistent with the plain, unconditional command by Martha K. Gooding and Ryan E. Lindsey of Section 1407 that the transferred case “shall” be re- turned to the originating court. (Lexecon Inc. v. Milberg The multidistrict litigation Weiss Bershad Hynes & Lerach (1998) 523 U.S. 26.) (“MDL”) mechanism was added to the federal procedural reper- The issue of self-transfer has caught the attention of toire in 1968 with the enactment Congress. Representative James Sensenbrenner of Wis- of 28 U.S.C. § 1407, which pro- consin, Chair of the House Judiciary Committee, has vides that “[w]hen civil actions sponsored the Multidistrict Litigation Restoration Act of involving one or more common 2005, House Bill No. 1038 (2005) (“H.B. 1038”). As questions of fact are pending in drafted, the bill would amend Section 1407 to effec- different districts, such actions tively reverse the Supreme Court’s ruling in Lexecon. It may be transferred to any district would allow the transferee court to retain jurisdiction Martha Gooding for coordinated or consolidated over a case for trial or to transfer the action to another pretrial proceedings.” The stat- district court “in the interest of justice and for the con- ute created the Judicial Panel on venience of the parties and witnesses.” (H.B. 1038.) Multidistrict Litigation and em- The bill passed the House of Representatives on April powered it to order the temporary 19, 2005 on a voice vote and moved on to the Senate, transfer of cases to a single dis- where it currently awaits action by the Senate Judiciary trict court -- either on its own ini- Committee. Keep an eye out for future developments at tiative or on the motion of a www.senate.gov. party -- when such a transfer “will be for the convenience of Another interesting issue posed by the MDL proce- the parties and will promote the dure comes in the form of parallel state court actions. just and efficient conduct” of the By definition, federal MDL procedure applies only to Ryan Lindsey action. The Panel, consisting of federal actions. Yet, if an issue or claim is pervasive seven appellate and district enough to generate multiple federal cases, it is likely to judges appointed by the Chief Justice of the United spawn a slew of state court actions, too. It is easy to see States, both determines whether a transfer is appropriate how a multitude of state cases pending in a variety of and selects the transferee district. states, each with their peculiar procedural and substan- tive rules, could eliminate -- or at least seriously under- On its face, the statute limits the purpose of the mine -- the advantages gained by coordinating the fed- transfer to “pretrial proceedings.” (28 U.S.C.