In the pilot episode of Fox’s smash-hit series Empire, Cookie Lyon, explaining why, after her release from jail, she’s returning to her husband Lucious Lyon’s fictional record label, Empire Entertainment, says simply: “I’m here to get what’s mine.”  This is, of course, in reference to the formerly-jailed matriarch having taken the rap for Lucious to the tune of 17 years behind bars for drug-running while he built his music “empire.” Coincidentally, it also may sum up the thinking over the last couple of months by real-life label, Empire Distribution, Inc. (“Empire Distribution”) which, in asserting that its alleged intellectual property rights have been improperly appropriated by the record-breaking show, appears to also be similarly attempting to “get what’s mine.”  But in doing so, it appears to have awoken another sleeping empire, Fox, and now faces an uncertain fate of its own.

According to the declaratory judgment complaint (the “Complaint”) filed by Twentieth Century Fox and its television subsidiaries (collectively, “Fox”) in the Central District of California last week (No. 15-cv-02158), on February 16th  of this year, three days after Empire broke viewership ratings records for its fifth consecutive week, Fox received a cease and desist letter from Empire Distribution alleging that Fox, by using the word “Empire” in conjunction with the title of the show and its fictional record label, coupled with the fact that the show’s fictional label was run by Lucious Lyon, a “homophobic drug dealer prone to murdering his friends,” was committing trademark infringement and diluting Empire Distribution’s brand through tarnishment.  In a follow-up telephone call with Fox, Empire Distribution demanded $8 million dollars to resolve its potential claims.  Fox executives must have rejected this initial settlement pitch out-of-hand, because on March 6th, Empire Distribution sent a second letter, not only reiterating its claims, but adding a claim for unfair competition as against Fox.  This time, according to the Complaint, Empire Distribution gave Fox three possible options — (a) pay $5 million dollars to the label and include the artists it represents as guest stars on Empire; (b) pay the full $8 million dollars previously demanded; or (c) stop using the word “Empire.”

Perhaps Empire Distribution should have paid heed to what Jamal Lyon once told his brother Hakeem, “You always coming to me for advice. I’m going to give you some. Don’t ever underestimate me, little brother.”  Empire Distribution clearly underestimated Fox here, sensing Fox may just pay the label off rather than duke it out in the legal system.  But rather than being bullied into paying the ransom, Fox chose option (d): “Ignore the patently-ridiculous claims in the attempt at a shakedown, and file a declaratory judgment action in federal court seeking the vindication of rights to continue use the word “Empire” in conjunction with the show.”  Besides seeking the Court’s agreement with its contention that it has not committed the claims it was accused of in the cease and desist letters, Fox also seeks a permanent injunction against Empire Distribution and its employees from “making false statements and representations to third parties asserting that Fox has violated its trademark rights, if any,” as well as attorney’s fees for having to file the action at all.

Well, does Empire Distribution have a case here?  Fox alleges that despite claiming rights to three separate marks, “Empire Distribution,” “Empire Recordings” and “Empire,” and even though Empire Distribution may have been using its name in commerce prior to the show’s conceptualization and premiere (they claim they started using “Empire” in conjunction with the record company back in 2010), that it’s not clear Empire Distribution will be able to prove any of its claims here.  To boot: (1) Empire Distribution has never applied for a federal trademark for “Empire”; and, more importantly, (2) the still-pending, renewed application for registration of the marks “Empire Distribution” and “Empire Recordings” was originally denied due to likelihood of confusion with other existing “Empire” marks.  Indeed, the Empire Distribution logo apparently does not even appear on the company’s album covers and Google searches performed on the filing date of the Complaint show that Empire Distribution’s webpage fails to provide a “hit” until the sixth page of a search for “empire record label.”  Adding insult to injury for Empire Distribution, the “hit” also turned up after “hits” for several other record labels containing “Empire” in their names, as well as pages related to, you guessed it, the 1995 movie Empire Records, as well.  Ouch.

So, Empire Distribution has no registrations for its word marks, none of its alleged marks are particularly distinctive, nor have they acquired any secondary meaning for Empire Distribution (see, e.g. the other record companies that use “Empire” in their name).  As such, there really is no argument that a likelihood of confusion could exist here either. What does the Insider expect to happen in this one?  Well, perhaps we should break it down like this — while the power struggle for Lucious Lyon’s fictional “empire” will continue for a record-breaking Season Two, it appears that Empire Distribution’s claims will not even last until the new season’s premiere.  Indeed, as Cookie Lyon also once said, “The streets ain’t made for everybody.  That’s why they made sidewalks.”  Empire Distribution tried to hit the streets and make the big time here.  In the end, unfortunately, it appears it won’t be long until its right back on the sidewalks where it came from.

This blog was originally published on March 31. Click here to read the original entry. 


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A recently-filed case in a California federal court has Jay-Z and his promoters at Live Nation wondering whether they’ll continue to reap the benefits of the 1999 hit single Big Pimpin’ or whether they’ll be “spending G’s” to clean up a potential infringement posed by a sample looped throughout one of S. Carter’s most famous tracks. Last week, an Egyptian plaintiff named Osama Ahmed Fahmy sued Live Nation Entertainment, Inc., seeking unspecified actual damages and costs, alleging Live Nation’s continued “use” of Big Pimpin’ in the promotion of Jay-Z concerts all over the world constitutes infringement (direct, contributory and vicarious) of plaintiff’s copyright in the original musical composition of the Egyptian song Khosara Khosara.  We’ll get to more about the case in a moment.  First, though, a “life and times” of the allegedly-infringed work is in order.

According to the complaint, Khosara Khosara, a recognizable piece to even the most untrained ear, was composed in 1957 by an influential Egyptian composer, Baligh Hamdy, for use in the Egyptian film Fatha Ahlami.  It was legally and properly registered under Egyptian copyright law in 1960.  The composition was apparently recorded by the vocalist Abdel Halim Hafez for the movie (with conducting and arrangement by Hamdy), and Hamdy apparently retained full copyright ownership over the musical composition (and the Hafez sound recording, as well) until his death in 1993.  At that point, under Egyptian copyright law, the legal rights in the copyrights then passed to his children.  According to Fahmy (who, while not one of Hamdy’s children, has owned the copyright jointly with Hamdy’s surviving children since 2002), in or about 1995, the owners of the copyrights licensed the right to “mechanically reproduce” the Hamdy version of Khosara Khosara (via the Hafez sound recording), without changes or alterations, on to records and cassettes.  Shortly thereafter, in 1997, the Hafez sound recording of Hamdy’s Khosara Khosara appeared in the United States on an album titled “The Movie Collection,” which contained original movie soundtracks sung by Hafez.  Still with me?

Then, sometime in 1999, a producer by the name of Timothy Mosely, who Insider readers may also know as Timbaland, allegedly “came into possession of a recording of Khosara Khosara” (presumably the Hafez sound recording), which he allegedly played for Sean Carter.  Insider readers will note that Mr. Carter is better known to the world as the great Jay-Z.  The rest, as they say, is history.  Jay-Z recorded and released Big Pimpin’, which Fahmy alleges “consists of (a) a significant portion of the Khosara Khosara composition, (b) electronic beats, and (c) Mr. Carter’s rap”, on his album Volume III: Life and Times of S. Carter, and it became one of Jay’s biggest and most recognizable hits.  Fahmy alleges this is due, in no small part, to the fact that Khosara Khosara “is looped throughout…[and] gives Big Pimpin’ its unique identity.”

So, it’s no wonder that Fahmy is suing Jay-Z for infringement here.  Wait, what’s that?  Oh.  Fahmy is NOT suing Jay-Z for infringement here — not this time, at least.  Indeed, Fahmy appears to be taking a novel approach in attempting to vindicate his IP rights by suing Live Nation which is, of course, perhaps the single largest promoter and organizer of concerts and tours for recording artists in the world.  At first glance, it doesn’t necessarily make sense how Live Nation would have any sort of liability for the infringement of the Khosara Khosara composition (or recording) in question.  However, Fahmy alleges that, since 2008, when Live Nation allegedly entered into an agreement with Jay-Z to “sponsor, promote, and/or facilitate” his concerts and tours, Jay-Z has performed Big Pimpin’ at every single one of his concerts, in one form or another.  He alleges that Live Nation owned or had exclusive booking rights to the venues where Jay publicly performed Big Pimpin’ and that the track has been used in concert reviews and previews as one of the songs Jay would be performing or had performed.  As a result of the “infringement” in Jay Z’s public performances of Fahmy’s copyrighted work, he says that Live Nation has infringed the work and “profited substantially” therefrom, in both ticket sales and merchandising at the events, and among many “other revenue streams,” as well.  As a result, Fahmy is seeking unspecified damages for copyright infringement, both direct and indirect, from Live Nation.

The Insider should note that it certainly seems like plaintiff may have 99 Problems proving his case against Live Nation.  Putting aside the fact that it appears from the complaint that he may not necessarily be the rightful owner of the Hafez sound recording that was sampled (and his vague pleading on the subject is evidence of same), Fahmy has sat on this particular alleged litigation with Live Nation, knowing Jay-Z was performing his song night after night, for at least seven years without filing suit.  This, alone, may constitute a waiver or constructive waiver of his rights with respect to the alleged “infringement.” Further, it’s also pretty clear that Live Nation wasn’t the direct infringer here.  While Live Nation put on the concerts, it was Jay-Z, likely an independent contractor, who publicly performed the infringing work time and again, and so it was he, and not Live Nation, who would have violated the exclusive public performance right in the work (which, while not registered in the United States, allegedly is entitled to protection under our Copyright Act via the Berne Convention and other treaties).  And, because Jay-Z is almost certainly an independent contractor, and not a Live Nation employee, there could be no respondeat superior argument for direct infringement here, either.  Lastly, while it’s entirely possible that Live Nation could be an indirect infringer, a defendant infringes contributorily by intentionally inducing or encouraging direct infringement, and infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it.  There’s no allegation and/or evidence of Live Nation’s “intent” to induce the infringement of Khosara Khosara, nor is there an allegation of how they “declined” to stop the alleged infringement during Jay-Z concerts after being alerted of same — this of course assumes, arguendo, that Live Nation had ever been alerted of the alleged infringement in the first place, an allegation that exists nowhere in the Complaint.  Fahmy has his work cut out for himself.

Yet, the question remains: why wouldn’t he simply sue the actual performer, Jay-Z, for infringement?  Well, as the Hollywood Reporter notes, this isn’t Fahmy’s first foray into claiming infringement of “his” work: “Few legal disputes in the entertainment industry are older than Osama Ahmed Fahmy’s war over ‘Big Pimpin’.'  Jay-Z himself as well as MTV, Paramount Pictures, Warner Music and others are still involved in an 8-year-old case examining allegations that the song’s unmistakably catchy hook illicitly derives from Khosara, Khosara…”  So, while still embroiled in that litigation which has, to date, proven to be unsuccessful, it appears that he’s attempting to fight the same suit on yet another front.  Or, as Jay-Z might say, Fahmy is On to the Next One.  And while you certainly Can’t Knock the Hustle of Fahmy continuing to litigate cases based on Khosara Khosara’s copyright, in the end, the Insider believes that this will likely just result in a dismissal and end up making Fahmy, the purported owner of the Song[,] Cry.

This blog was originally published on 2/27 at

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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

Actions: E-mail | Comments’s Legal Blog Watch recently noted a viral Facebook photo involving a “footlong” sandwich that appeared to be less than 12 inches long:  Citing a post from Today where restaurant customers were posting pictures of footlong sandwiches,, 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:

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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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