Barnett's Notes on Commercial Litigation

Barnett's Notes on Commercial Litigation

January 2008

Volume IV, Issue 1

In This Issue

1. Top 10 Things to Know About Recognizing and Referring the Big Case. Learn to spot diamonds in the rough. Also which gemologists to consult.

2. Did You Know? Do contingent fee lawyers suffer from "a gross conflict of interests" when they represent governmental entities? The Wall Street Journal says yes. They wish.

3. This Price-Fixing Case Looks Pretty Sweet. Canada probes chocolate bar makers.

4. Witness, Prepare Thyself -- to Get to Know Me! Bond. Witness bond.

5. Hot Lunch. Right-sizing civil litigation -- by letting juries decide.

6. Objecting Only When Necessary. Cartoon.

7. Blawgletter® Roundup. Links to favorite recent posts.

8. Links & Info. Er, links and info -- what else?

Eliot Spitzer served as New York Attorney General from 1998 to 2006.

Did You Know?

State attorneys general should shut up. At least they ought to quit filing lawsuits -- according to The Wall Street Journal. The AGs' sin? They've "Gone Wild".

The Journal's editorial page wants some national authority to rein in the 50 AGs -- despite the fact that 43 of the 50 hold their office by virtue of popular election. The editors desire imposing "uniform rules governing [the AGs'] conduct" on these tribunes of the people whether the people want them or not.

The source of the rules and thus the guarantor of their wisdom? Why, "an affiliate of the U.S. Chamber of Commerce" -- that guardian of corporate accountability, that defender of consumer and worker rights, that champion of ordinary citizens. Count Your Editor skeptical.

Par for the course, you say? Alright. But in the next to last paragraph of their editorial the scribes state that paying lawyers on an hourly basis instead of on a contingency "would eliminate a gross conflict of interests." That goes too far.

Since when does having a stake in the best result for a client create a conflict of interest, much less a gross one? And in what, pray, might the conflict consist? The client can always veto strategic decisions, specifically regarding settlement. And the client can write the fee agreement however it wants.

I get the feeling that the Journal can't bear the thought that the option of hiring private lawyers on a non-hourly basis enhances the accountability of private interests to the public. Whodathunkit?

Hershey, Nestle, Mars, and Cadbury face an antitrust investigation in our northern neighbor.

This Price-Fixing Case Looks Pretty Sweet.

There. I said it. The it meaning the title of this item.

You'd have done the same thing in my place.

My provocation? Your Editor learned recently that Canadian antitrust authorities have started an investigation into whether multinational chocolatiers fixed prices on the food of the gods -- specifically flat rectangular hunks of same. People in the Great White North buy $2.3 billion a year in chocolate and candy.

Who does the price-fixing hurt? Dentists dislike it because higher prices lower demand for the sweet, cavity-producing substance and, hence, drill-and-fill work. But most obviously it injures the men, women, and children who pay an artificially high price for cocoa confections.

Hot Lunch.

How will we know when we get exactly the right amount of civil litigation?

Several groups publish numbers on how much lawsuits cost Americans each year. They also emphasize the millions that lawyers earn. These yardsticks imply that we have too many legal actions.

Lawyer associations and consumer groups on the other hand tend to emphasize the unquantifiable value of justice and its essential role in American democracy and self-governance.

Who has it right? I say neither. Let the jury decide.

Cases go to verdict so seldom any more that juries play just a tiny role in separating wheat from chaff, lawsuit-wise, and in establishing the line between arguable and frivolous.

The Vioxx cases illustrate the utility of trial by jury. Drug maker Merck decided to try, rather than quickly settle, claims of heart damage and other injuries from taking the pain killer. Merck won more verdicts than it lost, driving the potential cost of litigation way down and saving it many billions of dollars.

Those who doubt the effectiveness of the civil justice system do much worse than castigating rich contingent fee lawyers when they cast doubt on the intelligence, the fairness, the reliability of juries. I think that, as in the Vioxx cases, more juror input makes sensible outcomes more likely rather than less.

Civil litigation has become nasty, brutish, and long. Having trials will do much to reverse the trend -- and maybe to reopen the court house doors to the natural supporters of civil justice, small businesses and the middle class.

Blawgletter® Roundup .

Links to favorite recent posts from Blawgletter®:

Do You Dare to Judgment Share?

When Monopolies Collide: Should NFL Bow to Big Cable?

In re Zipper Price-Fixing

Reviving ERISA: Justices Hear Argument in Key Pension Rights Case

NYT Defends Cable Monopoly

Subpriming the Common Good

The Starbucks Diet

Haute Diggity Dog Muzzles Louis Vuitton

The Blawgletter® feed welcomes new subscribers.

Top 10 Things to Know About Recognizing and Referring the Big Case.

What do you see: A kind of ugly rock -- or a 9.72 carat diamond?

Your Editor had the pleasure recently of giving a talk to the Grayson Bar Association in Sherman, Texas, about how to recognize and refer the big case. The topic held interest because lots of lawyers worry that they don't have enough knowledge, expertise, or experience to identify a diamond in the rough or, having identified it, to know what to do with it. So, after a nice lunch, I offered a top 10 countdown -- and, in keeping with the David Letterman methodology for such lists, the tips proceeded from 10 to 1.

And now I will share them with you:

10. A big solo case looks big.

You knew that. But what does "big" mean? Rule of thumb: At least $10 million in hard damages.

9. But a little case becomes big if it involves conduct that affected a lot of people.

A few examples: Antitrust violations (price-fixing or monopolization) hurt competitors and customers. Securities fraud injures buyers of stocks and bonds. Employees lose pension benefits or miss overtime pay. Deceptive trade practices harm consumers.

8. Any client may bring you the big case.

Businesses large and small, local governments, workers at companies gargantuan and tiny, trade groups, and business or employee organizations.

7. You can improve your chances of finding the big case by watching legal developments.

Wire services (Reuters and Bloomberg), Google alerts (I get them on "price-fixing") and Yahoo! alerts, legal publications, traditional press.

6. Act promptly

Limitations are running! And class action cases organize -- i.e., choose lead counsel -- fast, often within weeks. Above all, avoid overanalyzing. If you could do this by yourself, you wouldn't have read this far -- and neither would you need the next five tips!

5. Identify a handful of referral lawyers. Not law firms.

Law firms don't try cases. Lawyers do.

4. Consider each lawyer's resources and track record.

Expertise, ability to afford expenses (potentially millions), capacity to project staff where necessary (possibly anywhere in the U.S. and overseas), and reputation.

3. Contact at least two -- and get confidentiality

Competition works to your client's advantage and to yours. Existing relationships matter, so work on them before you get the big case, and make the contacts personally. A confidentiality agreement protects the client and you.

2. Negotiate and sign a fee agreement.

For fee-sharing, the relevant ABA rule requires (a) proportionate division or joint responsibility for representation, (b) client approval in writing, and (c) reasonableness. Mod. R. Prof. Cond. 1.5(e). Your jurisdiction may have different requirements of course.

The agreement should define counsel's roles (lead v. assisting), responsibilities (including for costs), and the process for making decisions (including venue choice, strategy, and settlement).

1. Don't be shy!

Nobody resents your first call. And, if you don't ask, you won't get.

Barry Barnett
Dallas, Texas

I like emails. Click here to send me one.

Witness, Prepare Thyself -- to Get to Know Me!

Bill Gates made a bad video deponent. Could his lawyers have helped him more -- by bonding with him?

Your Editor has concluded after 22 years of preparing witnesses to give depositions and testify at trial that even the finest testifying techniques can do only so much if you -- yes, you, the lawyer -- don't establish a good personal connection with the testifier.

The conclusion came back to me the other evening as I visited with a famous trial consultant. A smart and insightful man, the consultant reminded us of the "witness school" -- available for a fee -- to us and our clients.

I don't recall that witness schooling services existed when I started practicing in 1985. They didn't come into vogue until the video deposition era, before which perfection in witness preparation still seemed possible.

Back in the pre-video days, the sole record of the deposition -- the transcript -- didn't show a deponent's hesitation, his glancing at his lawyer for how to answer, the whisper-whisper conferences between witness and lawyer, or even the deponent's shifty eyes and nose-picking and nervous rocking back and forth. It reflected only the perfect responses to each question. Now of course the video shows all.

Which means that a witness needs to do as well in deposition as she ought to do at trial.

The normal preparation work remains essential of course: review of the key documents, discussion of the legal and factual issues in the case, anticipation of the toughest questions, testifying technique.

But you also have to help the witness protect her credibility on camera. How? Simple. By convincing her that you believe her. That you will work hard to help her avoid preventable mistakes. And -- touchy-feely warning -- that you care about her.

You must promise the witness that you will concentrate as much as he does during the deposition. Tell him that, because he has to wear his coat while testifying at deposition, you will keep yours on, too. (Many lawyers shed their jackets, lean back in their chairs, and check their emails or buy stuff on amazon.com during their "defense" of a deposition.)

Assure him that, the few times you do make an objection, you will do it only to prevent him from saying something inaccurate and not to engage in lawyers' nit-picking. (Lots of lawyers jabber objections in hopes of throwing off the questioner or impressing the client, but usually with the main effect of causing the witness to peg the lawyers as jerks.)

And make him understand that your objections will come if, but only if, he has started rambling, volunteering, tiring, or otherwise behaving in ways that could lead to incorrect testimony. (A great many lawyer comments during deposition distract and confuse witnesses. They also often show just how little the lawyer has paid attention.)

The time when you could prepare a witness to give perfect testimony and then sit back and watch him give it has gone. For at least the last decade or so, the unwinking eye of the camera has demanded prompt, firm, and confident answers. We've adapted slowly to the new reality. And we send witnesses to somebody else's "school" to compensate.

Don't do it! Your witness can better meet the demand for trial-quality testimony if she knows you will share her pain, that you will protect her from error, and that you will not confuse her with unnecessary comments.

Bond with your witness. You'll like the results.

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