Author: Seldeen Law Group

When an Attorney Signs a Settlement Agreement “Approved as to Form and Content”

July 13, 2019

The California Supreme Court ruled yesterday that an attorney may be personally liable for breaching a settlement agreement that he has signed under the designation “Approved as to form and content.”

Normally, this designation is a term of legal art, meaning only that the attorney has read the agreement, that it embodies the parties’ understanding, and that he sees no impediment to signing the agreement. However, if the settlement agreement imposes obligations on the attorney expressly, the signature might also mean that the attorney has agreed to be personally bound by those terms.

In Monster Energy Co. v. Schechter, a settlement agreement expressly obligated the parties and their attorneys to keep the terms of the settlement confidential.  Sometime after settlement, plaintiff’s counsel reported the settlement to a trade publication, stating that he had reached a “substantial” settlement with Monster Energy, but that Monster Energy would not permit the disclosure of the specific amount.

Monster Energy sued the attorney, and the attorney moved to strike under the Anti-SLAPP law on the ground that he was not personally bound by the settlement agreement.  The California Supreme Court denied the motion.  It held that in light of (1) the express obligations imposed on the attorney and (2) the attorney’s acknowledgment that he had read and approved the agreement, a factfinder could reach the conclusion that the attorney intended to be bound by the agreement.

One factor that may have influenced the Court’s decision was the strong public policy in favor of settlements and the role that strict confidentiality has in promoting settlement.

It should also be noted that the Court’s ruling held only that “Approved as to form and content” does not, as a matter of law, mean that the attorney is NOT a party to the agreement in the procedural posture of an anti-SLAPP motion.  At least one case, cite by the Court, has previously held that the same language does not, as a matter of law, mean that the attorney IS a party to the agreement in the context of a motion for summary judgment.  In both cases, the Court held that the factfinder must decide the attorneys intent based on the totality of the circumstances.

https://www.courts.ca.gov/opinions/documents/S251392.PDF

Cross Subpoenas in Federal Court

Opposing counsel has just served a Rule 45 deposition subpoena on a third party witness.  Should you also serve a subpoena?  What if you want to depose her for several hours, but you are not sure if opposing counsel will finish with enough time for your examination under the seven hour limit?  What if you want to ask the witness about matters that have nothing to do with noticing counsel’s examination?

Luckily there is no need to serve a cross-subpoena. Rule 30 governs depositions for parties and non-parties.  Rule 30 allows cross examination at depositions as if it were at trial; and courts interpreting this provision (in light of the broad scope of discovery) hold that a party may ask questions outside the scope of direct examination even if they did not notice the deposition.

However, the 1 deposition/7-hour time limit is fixed, unless there is a party stipulation or court order.  If opposing counsel will not stipulate, you will have to move the Court for leave.

While not required, you may want to serve subpoenas (and pay witness fees) to (i) have control in case defendants withdraw their subpoena; (ii) to specify additional documents for production; and (iii) to avoid disputes.

There Is No Requirement to “Cross-Subpoena” a Non-Party Witness.

Rule 30 provides that “the examination and cross-examination of a deponent proceed as they would at trial under the Federal Rules of Evidence . . . .” Fed. R. Civ. P. 30(c)(1). “This means that counsel for both parties of a civil action are permitted to question witnesses during depositions, regardless of which party noticed the deposition.” Longino v. City of Cincinna, 2013 WL 831738, at *5 (S.D. Ohio Mar. 6, 2013). This interpretation has been adopted by a number of district courts in and outside of California and I have not found any contrary authority. As one district court recently held:

Moreover, “[t]here is no formal requirement for a party seeking to cross-examine a deponent to serve a notice.” F.C.C. v. Mizuho Medy Co. Ltd., 257 F.R.D. 679, 682 (S.D. Cal.2009). Therefore, “[i]n a multi-party lawsuit, one party may notice the deposition and other parties may attend and cross-examine the deponent without also having to notice the deposition.” Id.; accord Longino v. City of Cincinnati, 2013 WL 831738, at *5 (S.D. Ohio Mar. 6, 2013).

Loop AI Labs Inc. v. Gatti, 2015 WL 5522166, at *4 (N.D. Cal. Sept. 18, 2015) (P served subpoena on W; court ordered that D is entitled to 2 hours, even though it did not serve a subpoena).

Take a look at these cases as well:

  • F.C.C. v. Mizuho Medy Co. Ltd., 257 F.R.D. 679, 682 (S.D. Cal. 2009);
  • Spray Products, Inc. v. Strouse, Inc., 31 F.R.D. 211, 212 (E.D. Penn. 1962) (stating that another party may examine a deponent on issues not addressed in the direct examination without serving a prior notice of deposition);
  • Smith v. Logansport Comm. School Corp., 139 F.R.D. 637, 642 (N. D. Ind.1991) (plaintiff’s counsel and co-defendant’s counsel could cross-examine the witness deposed by defendant; stating it would make “no sense” to require a cross-examining party to notice a deposition for matters outside the scope of the direct examination “in light of the liberal objectives of discovery”).

The Court Has Authority to Extend Deposition Beyond Seven Hours.

Rule 30 governs the procedures for taking depositions by oral examination even when compelled by a subpoena. Loop AI Labs Inc v. Gatti, , 2015 WL 5522166, at *4 “Unless otherwise stipulated or ordered by the court, a deposition is limited to 1 day of 7 hours.” Fed. R.Civ.P. 30(d)(1). Rule 30 also provides that when requested to extend these limitations, “the court must grant leave to the extent consistent with Rule 26(b)(1) and (2).” Id., Rule 30(a)(2) (emphasis). In a recent case similar to ours in that both parties wanted to depose a non-party witness for one day each, the court determined that it had authority to extend the deposition:

While neither party to the litigation moved for an extension of the deposition, the Court finds that granting an extension falls within its broad discretion to manage discovery. See Herbert v. Lando, 441 U.S. 153, 177 (1979) (“The [Supreme] Court has more than once declared that the deposition-discovery rules are to be accorded a broad and liberal treatment to effect their purpose of adequately informing the litigants in civil trials.”); Goehring v. Brophy, 94 F.3d 1294, 1305 (9th Cir.1996) ( “Broad discretion is vested in the trial court to permit or deny discovery.”).

Syncora Guarantee Inc. v. EMC Mortg. Corp., 2012 WL 12505608, at *2 (N.D. Cal. Mar. 8, 2012) (P and D served subpoenas and refused to agree to limit total deposition to seven hours; W moved to modify subpoena; court found W’s testimony was important and ordered her to appear for two days).

Tender Witness Fees at the Time of Service.

It is helpful to keep in mind that Rule 45 requires payment of fees at the time of service. In the case below, court issued sanctions against an attorney who moved to compel an invalid deposition subpoena because fees were tendered when he noticed the deposition, not at the time of service. This case is good to keep in mind when serving or responding to Rule 45 subpoenas.

A subpoena is invalid when witness fees or mileage allowances are not tendered at the time the subpoenas are served. Federal Rule of Civil Procedure 45(b)(1) states: “Serving a subpoena requires delivering a copy to the named person and, if the subpoena requires that person’s attendance, tendering the fees for 1 day’s attendance and the mileage allowed by law.” Fed.R.Civ.P. 45(b)(1). A failure to tender fees at the time of service invalidates the subpoena and the deposition testimony will not be compelled. CF & I Steel Corp. v. Mitsui & Co., 713 F.2d 494, 495 (9th Cir.1983) (finding tender 34 days after service and one week after notice of deficiency did not cure defect); Mirana v. Battery TaiShing Corp., 2009 WL 290459, *1 (N.D.Cal. Feb.5, 2009.) In this case, Defendants did not tender the Tourgemans’ witness fees at the time the deposition subpoenas were served. Accordingly, the Court will not compel the deposition testimony of Cesar and Rebecca Tourgeman.

Tourgeman v. Collins Fin. Servs., Inc., 2009 WL 3073714, at *1 (S.D. Cal. May 4, 2009).

Review of E-Service Calendaring & 2017 Rule Changes for E-Filing

Unless a party is personally served, the deadline to respond will be extended for email service.  It’s important to know when additional time is added, and how much.  For a two-minute review of the key rules, see the summary below.  You will also find some 2017 changes to California Rules of Court that will affect (complicate) some filings if you are e-filing in state court.

California Code of Civil Procedure/California Rules of Court (CCP 1010.6; CRC 2.251).

  • Added Time:  Unless a statute or court rule applies otherwise (e.g., new trial, vacate judgment, notice of appeal), the time of notice or to take any act or response is extended by 2 court days.  (This also gives the party serving the document extra time.  See Kahn v. The Dewey Group, 240 Cal. App. 4th 227 (2015) (defendant filing a cost memorandum entitled to two extra days for notice of entry of judgment served on plaintiff by email).)
  • When Service is Complete:  Upon transmission or notification.
  • Proof of Service:  Must include the electronic service address of the person making the service (in addition to the business address); the date and time [see note] the email was sent; the name and electronic service address of the person served; and that the document was e-served.  CRC 2.251(i)(1).  The original POS is kept by the party making the service.  [Note, starting 2017, you won’t need to include the time on your proof of service.]
  • When permitted: E-service is permitted (i) for any document that can be served by mail, fax, overnight delivery if the party consents to e-service or (ii) required by local rule or court order.  Consent to e-service means filing/serving notice of consent to e-service or filing any document electronically.  A non-party may not be e-served unless it consents or service is provided by law.
  • Service by Notification:  Additional rules apply if service is made by notification (i.e., you email a party a link to download a large file).

Federal Rules of Civil Procedure/Central District Local Rules (FRCP 6(d); L.R. 5-3.1.2)

  • Added Time:  When a party may or must act within a specified time after service and service is made under Rule 5(b)(2)(C), (D), (E), or (F), 3 days are added after the period would otherwise expire under Rule 6(a).  FRCP 6(d).  (But note for motions:  If served personally, or electronically, the notice of motion shall be served not later than twenty-eight (28) days before the Motion Day designated in the notice. CDLR 6-1.)
  • When Service Is Complete:  Upon transmission.  (Compare, service by other means is complete when the copy is delivered to the agency designated to make delivery.)  However, e-service is not effective if the serving party learns that the service did not reach the person served.
  • Proof of Service:  The Notification of Electronic Filing generally constitutes proof of service.  For documents not filed, the POS must include document served, the date and manner of service, and the name and address (or email address) of person served.
  • When permitted:  If a person consents in writing, service may be made by electronic means.  In Central District, all attorneys must register with ECF.  Those not registered with the court’s CM/ECF system (or have not consented to electronic service) (e.g., third-parties, pro se parties) must be served traditionally.

Rule Changes.

Starting 2017, the following California Rules of Court change re electronic documents:

  •  CRC 3.1110(f)(4):  Electronic exhibits must meet the requirements in rule 2.256(b). Unless they are submitted by a self-represented party, electronic exhibits must include electronic bookmarks with links to the first page of each exhibit and with bookmark titles that identify the exhibit number or letter and briefly describe the exhibit.
  •  CRC 3.1113(i)(1): Authorities.  A judge may require that if any authority other than California cases, statutes, constitutional provisions, or state or local rules is cited, a copy of the authority must be lodged with the papers that cite the authority.  If in paper form, the authority must be tabbed or separated as required by rule 3.1110(f)(3). If in electronic form, the authority must be electronically bookmarked as required by rule 3.1110(f)(4).
  • CRC 3.1306(c)(2):  Judicial notice. A party requesting judicial notice of material under Evidence Code sections 452 or 453 must provide the court and each party with a copy of the material. If the material is part of a file in the court in which the matter is being heard, the party must: (2) Either make arrangements with the clerk to have the file in the courtroom at the time of the hearing or confirm with the clerk that the file is electronically accessible to the court.
  •  CRC 3.1362(d)(2).  Motion to be relieved as counsel:   If the notice is served on the client by electronic service under Code of Civil Procedure section 1010.6 and rule 2.251, it must be accompanied by a declaration stating that the electronic service address is the client’s current electronic service address.

Citing to Unpublished Opinions

Thanks to Westlaw and Lexis, attorneys practicing in federal courts have access unpublished district court opinions.  Because they are so numerous, you will often find that an unpublished case addresses a relevant factual or legal issue, but not a published decision.  Sometimes, it seems, you can find an unpublished district court opinion that says just about anything.  This entry discusses how the opinions should be cited; and because the official citation format has some drawback, I offer some common sense observations about when you may want to use use a shortened form.

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The Official Citation.

Generally, the legal citation authorities recommend that citations to unpublished legal opinions include case name, case number(a.k.a. docket number), online citation (i.e., the database ID), pin cite, court and full date.  (Link, Link.)

For example:

Long v. DHS, No. 14-807, 2015 WL 3961312, *3 (D.D.C. June 29, 2015)

A few points:

  • Case name is underlined or italicized.
  • Use a * (star) before the page number because the reference is not to a consecutively bound book, but to a document that begins on page *1.  The star tells us that the cited information is on *x of the original slip opinion, not the page of the onscreen or printed database entry.
  • The case number is often called the docket number, meaning the unique identifying number assigned to the proceeding in the particular court, usually a combination of year the action was filed, judges initials, type of matter and how many cases were filed before it that year.  (I dislike the term “docket number” confusing, because I use “docket number” to refer to a number assigned to a specific document filed with the court appearing on the “register of action”.  (Link.))
  • The use of the case number and full date would help someone find the slip opinion if they did not have online access, and instead wanted to head to the court and look up the document manually or go to the Court’s website to find the opinion, if it is available there.

Using Full Citations to Unpublished Opinions on Westlaw and Lexis US District Court Decisions in Federal Court Papers Is a Waste of Time.

Often, the full citation is not helpful, has drawbacks and may undermine the credibility of your authority.  Instead, I suggest that attorneys omit the case number entirely and use only the year.  Don’t follow my advice, however, if your audience (i.e. the Judge) insists on strict blue book citations or doesn’t have access to the databases.

Generally, and especially in USDCs, judges and their clerks pull the decision from Westlaw or Lexis by typing the ID number.  The case number and the full date are not going to help and only get in the way.  The problems are many:  the extra information adds length to the citation, taking up more room in your brief and breaking the train of thought of the reader; draws attention to minutia, which is mentally wearing on your audience; cite checking takes longer; using them will cost your client money and slow down the drafting process; and there’s more opportunity for errors.  The full citation draws additional attention to the fact that you are relying on an unpublished opinion:  the court will think obscure, foreign and different, weak authority – compared to safe and authoritative opinions the court is comfortable to rely on.  The judge is probably going to think this anyway, but why highlight the fact?

You need the year, so that the court can quickly determine if the case is recent.  The Westlaw/Lexis citation is enough to let the judge know that the case is not in an official reporter.  If the case was decided last month, you might want to give the full date, just to let the judge know this is really the latest in jurisprudence (although I doubt it is going to make a difference and if it did, you’d be better off discussing the fact in text).

Unless you are still writing for your 1L legal writing instructor, save your time, reduce errors, shorten your brief, and avoid undermining your persuasiveness by providing citations with the relevant information.

Notice of Joinder and Joinder: Cost Effective for the Client, But Do It Right

A joinder is an alternative to filing a motion seeking relief on the same grounds as a motion filed by another party.  It is efficient for the client and less work for the Court.  The joinder asks the Court for the same relief already requested in another motion, but in the name of the joining party. A party can join the entirety of another party’s motion, join in certain arguments, or move on new relief while joining in part of another motion.

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Joinders are usually short and simple.  The point is to save everyone work when the arguments are already made and need no further argument.   It is usually enough to state how the grounds for relief apply to the joining party.

Your papers.  You will want to give notice of your joinder as you would for a motion, indicating that your client will seek the same relief based on the same grounds in the pending motion.  Include a memorandum of points and authorities that explains why the Court knows the issues are the same.

Timing.  Joinders have to be filed with the same notice as regular motions.  See Barak v. Quisenberry Law Firm, 135 Cal. App. 4th 654, 660-662 (2006) (joinder allowed when timely filed).

Basis for Relief.  Unless it is plainly obvious, the papers should include an explanation and/or evidence establishing that the joining party is entitled to relief.  In particular, motions for summary judgement are typically not suitable for joinder, as the moving party bears the burden of showing that there are no disputed issues.  However, even if the issues are identical, the party must file its own separate statement.  See Village Nurseries, L.P. v. Greenbaum, 101 Cal. App. 4th 26, 46-47 (2002); Frazee v. Seely, 95 Cal. App. 4th 627, 636-37 (2002).

The amount of detail will vary with the circumstances.  In a recent First Circuit case, the Court explained this:

While Federal Rule of Appellate Procedure 28(i) permits co-appellants to “adopt by reference a part of another’s brief,” as we have reminded litigants in the past, “[a]doption by reference cannot occur in a vacuum and the arguments must actually be transferable from the proponent’s to the adopter’s case.” United States v. Brown, 669 F.3d 10, 16 n. 5 (1st Cir. 2012). Therefore, where, as here, an appellant “offer[s] no explanation as to why [his co-appellant’s] arguments pertained to him,” such “textbook perfunctory” treatment waives the appellant’s attempts to adopt-by-reference his co-appellant’s arguments. Id. (emphasis omitted); see also United States v. Espinal–Almeida, 699 F.3d 588, 599 n. 9 (1st Cir. 2012) (a criminal defendant’s mere statement that he “joins in any and all other arguments raised by the other criminal co-defendants that are applicable to his case” is not sufficient (alterations omitted)).

U.S. v. Ramirez-Rivera, 800 F.2d 1, 12 n.1 (1st Cir. 2015).

 

What Clients Should Look for in Their Retainer Agreements

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Summary: The attorney is free to negotiate terms in the retainer agreement that are most beneficial to the attorney, subject to the California Rules of Responsibility and the laws applicable to retainer agreements.  These rules and laws recognize that it is the public policy of California to protect clients as consumers of legal services and to promote integrity in the legal profession.  Clients and potential clients should know about them, even if the agreement has already been signed.

One of the benefits of retaining an attorney is the fiduciary duties that attorneys generally owe the client.  These duties require the attorney to look out for the best interests of the client and to even put the client’s interests ahead of his own.  However, many people do not consider that  before the attorney is hired, the attorney  can act in his own self-interest.

Before hiring an attorney, every client should know what to expect from the attorney-client relationship, and one area that is especially important is the retainer agreement.  This is the document that defines the duties and obligations between the client and the attorney, and when fairly drafted, can be the client’s most important evidence if the relationship for some reason breaks down.

The retainer agreement must be in writing to be enforceable.  There are a few exceptions, such as (i) when the reasonably foreseeable total expense is less than $1000; (ii) the services are rendered during an emergency when it is impractical to enter into a written agreement; (iii) if the services are generally the same as those previously rendered to the client; (iv) the client waives his or her right to a written agreement;  or (v) the client is a corporation.  Cal. Bus. & Prof. C. § 6148(d).

At minimum, the written contract must contain the basis of compensation (usually the hourly rate or flat fee), the general nature of the legal services to be rendered, and the respective responsibilities of the attorney and the client.  Cal. Bus. & Prof. C. § 6148(a).

There are additional requirements in contingency cases.  When an attorney agrees to represent a client on a contingency basis, it means that some portion of the attorney’s compensation depends on the outcome of the case.  A typical example is an attorney who agrees to sue a negligent driver on behalf of an accident victim for 30% of any money recovered, but agrees that if the attorney is not successful, the client does not have to pay for the services.  A contingency representation also occurs if only a portion of the compensation is contingent on the outcome.

The contingency fee agreement must state what the contingency fee is (usually the attorney’s percentage of the recovery); how costs will affect the contingency fee and the client’s recovery (in other words, whether the costs will be deducted before or after the attorney takes his or her fee); and whether the client could be required to pay the attorney for related matters not covered by the contingency fee contract.  The contract must also state that the fee is not set by law but is negotiable.  Cal. Bus. & Prof. C. § 6147(a).

Contingency fee rates in medical malpractice cases are further subject to the limits specified by law, which currently are 40% of the first $50,000; 33.3% of the next $50,000; 25% of the next $500,000; and 15% of the amount over $600,000.  Cal. Bus. & Prof. C. § 6146.

The attorney is obligated to know these rules, and to apply them, even if the client is unaware.  However, often the attorneys do not comply with these statutes.  If the attorney does not provide a written retainer agreement, or omits any of the required terms, then the agreement is voidable by the client.  This means that the attorney is not entitled to the fee as stated in the contract, but instead is entitled only to a “reasonable fee” based on the work performed.  The contract is voidable at any time the services are performed, or in some cases, even after the legal services are performed.  However, the statute of limitations may limit the ability of the client to recover any fees paid in violation of these consumer protection statutes.  Cal. Bus. & Prof. C. § 6148(b).

Retainer agreements are written by attorneys and are difficult for the layperson to understand.  Sometimes, it is a good idea just to have a second set of eyes take a look.  If you think that your retainer agreement does not comply with the law, or you have concerns about how your attorney has been responding to your queries, managing your case, or paying out your settlement, do not wait.  Contact us for a free consultation.