ABA v. NSA: An Unhelpful Exchange

Posted on March 26, 2014 03:31 by Brandi Blair


The Edward Snowden scandal brought to light evidence that the National Security Agency obtained information from foreign intelligence services, which included privileged attorney-client communications between U.S. law firms and their foreign clients.  

Concerned about this discovery, the American Bar Association (ABA) sought clarification from the NSA. In correspondence to the NSA, ABA president James Silkenat underscored the importance of the attorney-client privilege as the “bedrock legal principle of our free society.” In essence, privileged attorney-client communications facilitate the “full and frank discussion between lawyer and client that is essential for effective legal representation.”  As our interests continue to globalize, this full and frank discussion increasingly involves electronic and voice communication with foreign clients. Although many of us would welcome an excuse to increase our global travel, it is simply not feasible for US law firms to limit their communications with foreign clients to in-person interviews. 

Given the disturbing evidence that the NSA retained information obtained from privileged communications, Mr. Silkenat requested that the NSA fully explain its policies pertaining to the collection and use of such information. A full understanding of the NSA’s policies and procedures, regarding the collection, retention, and use of privileged communications, is necessary for law firms to meet their ethical obligations to safe guard the confidentiality of client communications.     

NSA Director, General Keith Alexander, responded that he appreciated “the opportunity to clarify [the NSA’s] current policies and practices.” Unfortunately, in the response that followed, the NSA fell short of the open dialogue contemplated by the ABA’s request. Instead, General Alexander’s response attempts to reassure the bar that the agency is “firmly committed to the bedrock legal principle of attorney-client privilege.” According to General Alexander, potentially privileged communications are examined on a “case-by-case basis to determine whether the information is in fact privileged and, if so, the appropriate steps to be taken.” This response does not offer guidance, or the specificity necessary for attorneys to take adequate precautions to safeguard their client confidences, or to rest assured that the information is being appropriately safeguarded by the intelligence agencies.

Until the time that the NSA provides a more substantive response, and in the wake of this exchange of correspondence, it remains unclear what reasonable steps attorneys can take to adequately safeguard their foreign client communications. It appears the options are to trust foreign and domestic intelligence agencies, or start banking more flight miles abroad.  Either option is potentially costly to law firms, and their foreign clients. 

Brandi Blair is an attorney at Jones, Skelton & Hochuli in Phoenix, Arizona. She concentrates her practice on § 1983 defense, professional liability, and wrongful death and personal injury defense. She is currently the Publications Chair for DRI's Lawyers' Professionalism and Ethics Committee.  The views expressed herein are her own.

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I do not follow celebrity news gossip, but even I heard that Paula Deen was recently deposed and some are not happy about her testimony.  CNN put the transcript on its website.  The CNN link may not last, but federal court filings do.  If someday the CNN link fails, the deposition was publicly filed as document 197-1 in case 12-cv-00139.  The case may be accessed via PACER for the Southern District of Georgia.  To be absolutely clear, I have not read the 149 page transcript or any of the filings in this case.

If I have not read the deposition, why am I posting about it?  It is certainly not to add my voice to the celebrity gossip firestorm.  Instead, the point of this post is to discuss a few issues that can arise when representing public figure clients.  Paula Deen’s current case prominently highlights a few them.  When a request to depose your public figure client arrives, what are some of your options to help avoid the firestorm currently surrounding Paula Deen?

Seek a Protective Order

NRCP 26(c) authorizes a court to issue a protective order, in certain circumstances, to govern discovery.  If a litigant is a well-known public figure, one litigation strategy may be to leverage that profile against her to force a favorable resolution.  I am not saying this occurred to Paula Deen.  If you are defending the public figure, it may be prudent to seek a protective order before discovery begins.  NRCP 26(c) permits “for good cause shown, the court in which the action is pending may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.”

But wait, court documents are public records so discovery materials are presumptively public!  Probably not.  In Seattle Times Co. v. Rhinehart, 467 U.S. 20 (1984) a religious organization sued a newspaper.  The organization was concerned the paper would publish information it learned in discovery and sought a protective order.  The newspaper appealed and argued the order violated its First Amendment rights.  The Supreme Court of the United States disagreed and, in short, stated there may be constitutionally permissible reasons for a court to restrain the use of information gathered via the discovery process.  The debate about this topic did not end in 1984.  The legal community continues debating the extent to which information gathered via court-permitted discovery is or is not public.   See Richard L. Marcus, A Modest Proposal: Recognizing (At Last) that the Federal Rules No Not Declare That Discovery is Presumptively Public, 81 Chi.-Kent L. Rev. 33 (2006).

Where representing a public figure, a protective order is one way to seek to focus the case and avoid a situation like Paula Deen is enduring.

Object to Apex Depositions

The Paula Deen lawsuit reportedly involved a restaurant in which she had some involvement.  I do not know what level of involvement Paula Deen had in the daily operations of the restaurant in her lawsuit, but, for an example, consider Wolfgang Puck.  Here in Las Vegas, it sometimes feels like Wolfgang Puck affiliated restaurants are nearly as ubiquitous as Starbucks, but typically with far better food.  Obviously he cannot be involved in the daily operations of each of these restaurants and his other businesses.  But if a customer files a run of the mill personal injury lawsuit against the restaurant, what is to stop the customer from then deposing Wolfgang Puck himself?

The response is to move for a protective order and rely upon the apex doctrine.  Why?

Under the “apex doctrine,” courts sometimes grant protective orders barring the depositions of high-level corporate officers or managers who are unlikely to have personal knowledge of the facts sought by the deposing party. If a deponent is a high-level corporate officer who certifies that he or she has no personal knowledge of the facts, the court may grant a protective order requiring the deposing party to first seek discovery through less intrusive methods, e.g., from lower level employees who are more likely to have direct knowledge.

6-26 Moore’s Federal Practice – Civil § 26.105.  The concept has been discussed locally in a case that resulted in a blog post.  Luangisa v. Interface Operations, 2011 U.S. Dist. LEXIS 139700, 2011 WL 6029880 (D. Nev. 2011).  Remember, it is difficult to qualify for an apex exception to deposition.

I do not know if Paula Deen would have qualified for the apex exception, but it is another tool to help control discovery for cases involving public figures.

At the Deposition: Do What You Can Within the Rules to Defend Your Client
 
What can you do to defend your public figure client if she is deposed?  First, keep your head.  I can appreciate how representing a public figure might create certain expectations and pressure. I can only urge you not to jettison everything you learned and practiced leading up to this moment, walk into a deposition and be a baddie.  This blog has already discussed what happens when good lawyers act out of character and the ramifications of those actions.  Public figure client or not, the rules still apply.

Second, prepare your client.  If the client is a public figure that is probably easier said than done.  I can only speculate that the lawyers for Lil Wayne and Lady Gaga did not prep them to act as they once did.  The public figure deponent must be ready, like any other client, to present their testimony in the best manner possible.

Third, although you as the defending attorney are a potted plant and there is little you can do, control what you can.  Assert appropriate objections because, if your client is well prepared, she will remember an objection means there may be something wrong about the question which must be addressed.  Take breaks when needed.  It does not look good, especially in a video recorded deposition, to take a break in the middle of key testimony, or multiple breaks in the space of a few questions, but if your client is melting down its all you can do.  Get the client outside the room, calm her down and try to restore sanity to the situation. Be wary however, as in some jurisdictions there is no attorney-client privilege during deposition breaks.

At the Deposition: Terminate and Move for a Protective Order, if Necessary

If everything else fails and the deposition questioning is simply out of line and control, consider terminating and moving for a protective order. I generally consider this the nuclear option but, as sadly documented by various posts on this blog, sometimes it cannot be avoided.

At any time during the taking of the deposition, on motion of a party or of the deponent and upon a showing that the examination is being conducted in bad faith or in such manner as unreasonably to annoy, embarrass, or oppress the deponent or party, the court in which the action is pending or the court in the district where the deposition is being taken may order the officer conducting the examination to cease forthwith from taking the deposition, or may limit the scope and manner of the taking of the deposition as provided in Rule 26(c). If the order made terminates the examination, it shall be resumed thereafter only upon the order of the court in which the action is pending. Upon demand of the objecting party or deponent, the taking of the deposition shall be suspended for the time necessary to make a motion for an order.

NRCP 37(d)(3).  The converse is also true for the defending attorney.  “If the court or discovery commissioner finds that any impediment, delay, or other conduct has frustrated the fair examination of the deponent, it may impose upon the persons responsible an appropriate sanction, including the reasonable costs and attorney’s fees incurred by any parties as a result thereof.”  NRCP 37(d)(2).

As you contemplate whether to terminate your public figure client’s deposition, consider a few factors.  The courts really do seem to consider termination the nuclear option.  If you terminate a deposition, you had better have a rock solid reason for it or you will probably be paying for the continued deposition.  Also, if you terminate your public figure client’s deposition, it is your duty to act as quickly as possible to file the motion for protective order.  The courts likely understand there is a slight delay as you gather a transcript, but order a rush copy.  If you do not act promptly, the courts may consider this a sign of bad faith.  Finally, do you need to conduct a separate “meet and confer” conference before filing a discovery motion?  There is no bright-line rule, but use common sense, assuming any remains if the deposition is so bad that you are terminating it.  In such a situation, I typically find the reason counsel cannot agree is already in the transcript.  A separate “meet and confer” would serve no purpose.  Having said that, it may be beneficial to go the extra mile and initiate a separate “meet and confer” in the days after the deposition as you prepare the motion for protective order.  It might be difficult to conduct but a day or two cooling period could facilitate at least a rational discussion of the situation and how best to proceed.  I would not hold my breath, but it is possible.

The Deposing Attorney: Don’t Go Crazy

If you are deposing a public figure, the same “don’t go crazy” rule applies to you too.  Also remember there are limitations about what an attorney can and cannot say publicly about his client’s case.  There was once a local kerfuffle about those limitations.  Gentile v. State Bar of Nevada, 501 U.S. 1030 (1991).

At the end of the day, public figure depositions can raise complications.  I can only encourage the lawyers involved to recognize these potential complications early and try to stay ahead of them.

This article was originally posted on June 28 on Michael P. Lowry’s “Compelling Discovery” blog. Click here to read the original post. 

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Categories: Discrimination | Law Suit | Media

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Lance Armstrong is riding a new tour these days, but instead of fresh air and the beautiful landscapes of France, this tour will be inside offices (lawyers’ offices) and courtrooms. Yes, it is the Tour de Courts.  Since his confession to doping in an interview with Oprah Winfrey, his legal problems have compiled dramatically. 

One of the more public legal disputes is with SCA Promotions (SCA). SCA helps companies run promotions that involve large payouts – payouts that these companies would otherwise not be able to offer. For example, suppose a company sponsors a “half-court shot” during a local college game. A contestant is selected to make the shot. If that contestant makes the basket, he or she wins $250,000. The sponsoring company will pay a percentage of the total prize offering to SCA. If the basket is made, SCA pays the $250,000.  It’s an insurance of sorts with the fees acting as a kind of premium.

SCA entered into one of these contracts Lance Armstrong.  SCA would pay millions including bonuses if Armstrong won multiple Tours de France. SCA is no stranger to the issue of doping and Lance Armstrong – which is what this current litigation is all about. SCA paid the winnings but withheld his bonuses originally amidst early allegations of doping. However, in the end, a $7.5 million settlement ultimately resolved that dispute.  Now that Armstrong has confessed to doping, SCA wants their money back and took Armstrong to court to get it.

Armstrong counters that the original settlement agreement contained a “Will Not Challenge Under Any Circumstances” clause and has filed papers with the court seeking dismissal of SCA’s lawsuit.  SCA counters that Armstrong lied during the original dispute and that Armstrong perpetuated fraud in negotiating the original settlement.

This is but one stop on the Tour de Courts for Armstrong and, though one of the most public, not the most serious. Amongst the agencies suing Armstrong is the Department of Justice who accuses him of defrauding the U.S. government (the U.S. Postal Service was a big sponsor).

This upcoming tour will make the mountains classification of the Tour de France seem easy. However, in this tour, there are no additional points for getting to the top first.

*This blog was originally published on April 11 on the Sports and Entertainment Law Insider. Read the original post here. 

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Categories: Drug and Device Law | Marketing | Media

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Authority without accountability is dangerous. Accountability without authority is agonizing. Such agony is manifest in two ediscovery sanction awards making the rounds recently. Peerless has commentators warning us not to pass to the buck to our ediscovery vendor. While Branhaven has raised questions of how much outside counsel can rely on their client when certifying discovery responses (in addition to reaching questionable conclusions re PDF vs. TIFF productions).

The commentary on both cases has been excellent. Much it has focused, understandably, on the division of responsibility – who is accountable for what. Outside counsel, it seems, can trust only themselves – not the vendor (Peerless); not their own client (Branhaven). Nor, of course, can anyone rely on custodians to comply with hold instructions (as we learned in Samsung), let alone self-collect

In holding the parties accountable both rulings suggest some implicit assumptions about authority that are worth exploring. Specifically, Branhaven assumes that outside counsel will, if she chooses, have visibility into a client’s efforts to assemble documents; while Peerless assumes that a domestic party can supervise document collection efforts at a foreign affiliate. 

In Branhaven, outside counsel appears to have little idea as to what his client, Branhaven, was actually doing. Counsel forwarded requests for production to Branhaven. Counsel then certified written responses to requests representing that responsive documents would be produced. Counsel based his certification on his “understanding” that Branhaven was assembling the responsive documents. But, as the District Court in Maryland found and sanctioned, Branhaven’s effort in identifying and assembling responsive documents was lacking. In what appears to be a first, the court also sanctioned outside counsel for failure to make a “reasonable inquiry” into his client’s process and progress—or lack thereof, as it turned out.

I don’t know enough about the specific facts underlying Branhaven to pass judgment on counsel’s behavior. But I do feel a general sympathy for outside counsel whose queries are met with “we’re handling it”—whatever “it” happens to be. Further inquiry may be required as a matter of professional necessity. But pressing in-house counsel for additional information is risky from the perspective of positional power and relationship maintenance. 

Many in-house counsel are under enormous pressure to keep costs down and are therefore inclined to do as much work themselves as they can manage. Discussions with outside counsel about that work are just another cost to be avoided. Further, many in-house counsel are offended at the thought of outside counsel questioning their work, judgment, process, etc. because….well, because being the boss can go to one’s head (sorry if I am shocking anyone’s delicate sensibilities here). Finally, regardless of the motivation, what can outside counsel really do if in-house counsel is not inclined to share? There are options, few of them good – e.g., quit, send CYA memos.

A similar dynamic exists between affiliated entities. In Peerless, the vendor on whom too much reliance was placed was responsible for collecting documents from defendant’s non-party, Chinese affiliate. The Northern District of Illinois sanctioned the defendant, Crimson for having an insufficient basis to support its assertion that all responsive documents in the possession of its non-party, Chinese affiliate, Sycamore, had been produced.

The Peerless court had previously ruled that defendant Crimson was able to obtain documents from Sycamore and must therefore do so. Crimson subsequently produced documents provided by Sycamore via a vendor. In conjunction with the production, Crimson represented that all responsive documents had been turned over. The court, however, was unimpressed with Crimson’s “hands-off approach” to managing discovery at Sycamore. Rather than passive recipients of their foreign affiliate’s documents, the court found that Sycamore had a duty to directly “contact individuals at Sycamore and play a role in obtaining discovery.”

Again, I don’t pretend to know the particulars of Peerless. But I possess considerable sympathy for a domestic entity that is responsible for collecting documents from a foreign affiliate. Affiliates do not always play nice with each other. A request for assistance can run into (a) company politics, sibling rivalries, internecine conflicts, etc., (b) a genuine sense of we work at different companies, don’t tell me what to do, (c) busy people who have no time or incentive to worry about your problem, (d) a colorable conclusion that this ediscovery stuff is a bit daft; or (e) all of the above. 

The challenges are only more daunting when the affiliate is in a different country where geographic distance, language barriers, cultural differences, and variations in IT infrastructure are only the most obvious obstacles. These dynamics can become particularly untenable when the requesting entity is a small subsidiary of a large, foreign parent from whom the documents are needed. What is a domestic, in-house attorney supposed to do when a VIP at the mothership proves unresponsive to pleas for assistance? There are options; few of them good – e.g., CYA memos; try to go above the VIP.

I am not suggesting that either case was wrongly decided. Courts also face authority constraints. Their power is often limited to those who appear before them – i.e., lawyers and the parties they represent. It is unsurprising who was held accountable in Branhaven and Peerless. But it is still unsettling. Those of us who remain unconvinced of our own omnipotence can easily imagine ourselves in either position regardless of our experience, effort, acuity, etc. 

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Categories: Media | Social Media

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Law.com’s Legal Blog Watch recently noted a viral Facebook photo involving a “footlong” sandwich that appeared to be less than 12 inches long:  http://legalblogwatch.typepad.com/legal_blog_watch/2013/01/how-many-inches-is-your-subway-footlong-sub.html.  Citing a post from Today where restaurant customers were posting pictures of footlong sandwiches, http://lifeinc.today.com/_news/2013/01/17/16565128-wheres-the-inch-subways-footlong-falls-short?lite, Legal Blog Watch asked whether a class action or two or three would soon follow.  One might reasonably question whether customers suffered any damages by the claimed shortfall.  One might further question how plaintiffs’ counsel could possibly prove any sort of claim on a class-wide basis.  Nonetheless, the fact that such questions come to mind shows the pervasiveness of class action litigation in today’s society.  The issues inherent in the current use of the class action device are of such importance that the U.S. Supreme Court’s current docket features five merits cases involving class action claims.  Those Supreme Court cases, along with a number of other cutting-edge class action topics, will be the subject of DRI’s 2013 Class Action Seminar, which will take place at the Washington Court Hotel in Washington, DC on July 25 and 26.  DRI members interested in this area of law will want to attend this Program.

 

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Wisconsin Act 10

Posted on September 18, 2012 10:12 by Laurie E. Meyer

2011 Wisconsin Act 10 (“Act 10”), which was signed into law by Governor Walker in March 2011, dramatically restricted the collective bargaining rights of municipal bargaining unit employees, except police and fire employees, and required those employees to pay portions of their retirement and health insurance benefits.  

On Friday, September 14, 2012, in a suit brought by Madison teachers and a union representing Milwaukee workers, Dane County Circuit Court Judge Juan Colas held major portions of the law unconstitutional.  Judge Colas found that Act 10 violates the school and local employees’ rights to free speech, free association, and equal representation because it, among other things, caps union workers' raises but not those of nonunion employees and because it treats police and fire employees differently than other public workers.

The situation in Wisconsin is still quite fluid.  While local public sector union leaders have pledged that they will immediately seek to bargain on a host of issues made off-limits to collective bargaining by Act 10, Wisconsin Attorney General J.B. Van Hollen has sought a stay of the ruling pending his appeal.  To further complicate matters, two challenges to the law are still pending in federal court.  The Seventh Circuit Court of Appeals will hear oral arguments on September 24th in connection with appeal of a federal judge’s March ruling which struck down portions of the law.  Another federal case brought on very similar grounds to the case heard by Judge Colas, has not yet been decided.  

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Affordable Care Act Upheld

Posted on June 28, 2012 06:14 by Marc E. Williams

This morning the Supreme Court issued its long–awaited decision on the constitutionality of the Patient Protection and Affordable Care Act. The Court upheld the most important feature of the act, the individual mandate, which requires that individuals not covered by health insurance buy coverage or face a “shared responsibility payment.” This mandate was critical to the success of the Act, since the availability of affordable coverage for the millions of uninsured Americans required a large pool of customers. In reviewing the authority of Congress to require this mandate, the Court found that it falls within the taxing power of Article I, Section 8 of the Constitution. The Court also noted that the individual mandate was not an appropriate exercise of Congressional power under the Commerce Clause or the Necessary and Proper Clause. Writing for a plurality of justices, Chief Justice Roberts noted that the questions of the soundness of the policy is not an issue for the court to consider, but only to decide whether it is an appropriate exercise of Congressional authority. Ultimately the Court found that the mandate’s imposition of a penalty for failing to purchase insurance was not commerce that could be regulated by Congress, but would fall within its taxing power. In finding that the mandate was a tax, the Court adopted the position of the Solicitor General, and guaranteed that the issue will continue to resonate in political debates through the November election.


A separate part of the decision considered the constitutionality of a provision of the Act that expanded Medicaid coverage to millions of new individuals. As a result, states were required to adopt new eligibility requirements or risk losing all of its Medicaid funding. The coercive nature of this requirement was the critical feature of the review of this portion of the Act. A complicated plurality of justices held that the expansion was unconstitutionally coercive, but that the remedy for this violation is to strike down the provision allowing the federal government to withhold all Medicaid funds unless a state agrees to the expansion. Accordingly, states that do not agree to the expansion will only lose new Medicaid funding.

For a complete copy of the opinions, see this link: http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf

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Trademark owners agonizing over internet search engine technology and their ability to protect their brand scan step back from the ledge, at least for the moment. The fact that their trademarks may serve important indexing or advertising functions for internet search engine companies, like Google or Bing, does not serve to immunize search engine providers from liability for trademark infringement. On Monday, April 9th, the Fourth Circuit breathed new life into Rosetta Stone’s trademark suit against Google, vacating in large part the Eastern District of Virginia’s 2010decision dismissing Rosetta Stone’s claims against Google on summary judgment. The Fourth Circuit remanded Rosetta Stone’s claims for direct trademark infringement, contributory infringement, and trademark dilution for further proceedings.


Rosetta Stone’s appeal to the Fourth Circuit was widely-followed, in part because of the district court’s novel application of the functionality doctrine to the search engine context. The district court concluded that the functionality doctrine protected Google’s use of Rosetta Stone’s marks as keyword triggers as a matter of law. According to the district court, keywords, including trademarks such as “Rosetta Stone,” serve an “essential indexing function” for Google, allowing it to readily identify websites or information relevant to an online user’s search query. The district court found that the use of such keywords also served an “advertising function” that provides consumers with “a highly useful means of searching the internet for products at competitive prices.” The online functions articulated by the district court would apply to virtually any (if not every) trademark imaginable, as trademarks are meant to identify products, brands, and suppliers. An order approving the district court’s functionality analysis would have had far-reaching implications. Where adopted, it would have effectively immunized internet search engine providers selling trademarks as keywords from trademark infringement liability.

The Fourth Circuit unequivocally rejected the district court’s reliance on the functionality doctrine.  It found it irrelevant whether Google’s search engine may function better through the use of trademarked keywords, such as Rosetta Stone’s marks. The relevant inquiry is not whether use of the mark makes Google’s product more useful or functional, but whether the mark itself or the trademark holder’s use of the mark is functional. According to the Fourth Circuit, there was clearly nothing functional about Rosetta Stone’s use of its mark. Rosetta Stone uses its mark as a classic source identifier for its products. Accordingly, the Fourth Circuit explicitly rejected the functionality doctrine as a possible affirmative defense.

It remains to be seen whether Rosetta Stone will ultimately prevail in its claims against Google. Numerous key issues remain for trial, including Google’s intent, the extent of actual customer confusion, the sophistication of consumers of Rosetta Stone’s products, as well as the potential application of the nominative fair use defense. What is clear is that trademark owners are not yet relegated to actions solely against the infringing advertisers using internet search engines. Companies, such as Google, that provide the search engine services will remain key targets and their ability to rely upon functionality as a defense has taken a significant blow.

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As reported by Forbes, a U.S. District Court sanctioned a prominent U.S. law firmfor manufacturing a frivolous lawsuit.  The case is Lavesky et al. v. ITT Educational Services, Inc., filed under the False Claims Act (“FCA”).  The Lavesky court did not mince words in sanctioning plaintiff’s counsel: “From what the Court can gather, [plaintiff’s attorneys’] view is that virtually any ex-employee will do for purposes of manufacturing an FCA lawsuit.”  


Lavesky carries implications for all cases, not just those filed under the FCA--it provides a blueprint for the defendant victim of a manufactured lawsuit.  If discovery shows that the plaintiff was unaware of the facts upon which she based her lawsuit before an “enlightening conversation” with her attorney, the defendant should consider moving for sanctions pursuant to:(i) Federal Rule of Civil Procedure 11, and (ii) Model Rule of Professional Conduct 7.3, which prohibits lawyers from soliciting “professional employment from a prospective client when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain.”  This recipe ended up costing the Lavesky’s counsel almost $400,000 in fees.

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The smooth transition of NFL jersey production responsibilities from Reebok to Nike hit a snag this week with the filing of a lawsuit by Nike against its rival. Nike filed suit in federal court against Reebok over Reebok’s swift production of Tim Tebow-New York Jets jerseys after Tebow’s trade to the Jets. The trade announcement on March 21st left an extremely tight window of time for Reebok to capitalize on the deal before its contract with the NFL expires on April 1, 2012.  


While Reebok’s deal with the NFL is technically still in place until April 1, Nike alleges that the jerseys are not valid licensed merchandise as authentic jerseys require two license agreements – one with the NFL to use its marks and one with the NFLPA (National Football League Players Association) or the individual player to use a specific players name.  Nike has had an endorsement deal with Tebow in place since his graduation from the University of Florida in 2010.  In appears that in this case, Reebok does not have a deal with either the NFLPA or Tebow that would allow it to use his name on its jerseys.

With the April 3rd premier of Nike’s NFL jersey collection quickly approaching, Nike asserts that Reebok’s hastily produced Tebow-Jets jerseys will negatively impact the demand for new Tebow-Jets apparel that has been steadily growing since the trade was announced. Nike is seeking injunctive relief to stop the sales of the jerseys along with the compensatory and punitive damages.  While being first to market may earn Reebok a quick profit in this situation, if the Court decides in Nike’s favor, the quick move could end up being a costly one. 

On Friday, March 30, Reebok was ordered to stop producing the jerseys.

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