Letter: Why Judicial Elections Matter

By Town-Crier Letters Editor

Living in a 24-hour news cycle can be exhausting. Especially so in an election year when we are inundated with ads for people who want to be our next senator, representative or governor. What often gets lost among the “noise” of those high-profile, partisan elections are the election of judges. Why should you be concerned with judicial elections? For a very simple reason: a judge may be the most important person you meet on one of the worst days of your life.

Your congressman can’t put you in jail, take away your children or order you to pay alimony. Neither can the governor. But think about the direct impact a judge can have on your life, or that of a friend or family member. A judge can decide during divorce how much you have to pay your former spouse and how often you get to see your children. During a criminal case, the judge makes sure your rights are protected, and if you are guilty, decides your sentence. In civil cases, the judge decides many of the merits of your case and instructs the jury on the law. In probate cases, a judge may decide how much you inherit or who gets your stuff when you die.

You owe it to yourself and your community to walk into the voting booth as an informed voter and cast an educated vote in the judicial races.

Because of limitations on judicial campaign communications, people know very little about the judges they elect. Judicial candidates cannot tell you what they think. They can’t tell you how they will rule on particular issues. They can’t say things like they are “tough on crime” or they “support law enforcement.” This is the likely reason that nearly 30 percent of those who cast ballots in the high-profile elections that appear at the top of the ballot fail to vote in the judicial contests, which usually appear at the bottom of the ballot. Judicial elections also take place during the August primaries, when there is historically lower turnout, so fewer people are voting when it comes to electing judges. This lower turnout magnifies the importance of each vote and demonstrates why it is critically important that you vote in the judicial races.

One good source of information is the Judicial Candidates’ Voluntary Self-Disclosure Statement located on the Florida Bar’s web site. You should review the candidates’ history of community service, disciplinary records and see where they rank in the judicial polls. Perhaps the best source of information about judicial candidates comes from the lawyers who appear before the incumbent judges or who practice with the lawyers seeking election. Reach out to your attorney friends and get their informed opinions on the candidates’ relevant experience and knowledge of the law, their temperament, and their ability to rule in a fair and impartial manner. These are the qualities that make a good judge.

It has been said that we get the government and the leaders that we deserve, not necessarily the best ones. This applies equally to our judges. Educate yourself before you enter the voting booth and make sure to cast a ballot that ensures we elect the people most qualified to serve as judges.

Michael J. Napoleone, Wellington

Contributing Attorneys

Napoleone, Michael J. – Shareholder

Privacy in the Golden Age of Social Media

By Michael J. Napoleone

Think way back to your life before Facebook (or LinkedIn, Instagram, or Twitter, or whatever is your social media platform of choice). When you would occasionally – or never – have contact with people you knew from high school or college, or even people who live in your community, but with whom you don’t come into contact often. Think about all your family and friends who live far away, and who you might hear from at birthdays and holidays (if you were lucky, you’d get a picture of their kids or – the Holy Grail – a thoughtfully composed letter filling you in on the details of the life they have been living over the past year).

Fast forward to today. On a daily or hourly basis, you have shared conversations, photos, thoughts, prayers, memes (my God, the memes), videos and even live streamed moments with “friends” all over the world. And it cost you NOTHING (except the hours of your life that is now consumed by Facebook and other social media outlets) – it was all FREE.

What did you agree to in exchange for access to this transformational communication platform? Some of your privacy – but not all. Only that which you were willing to share and post on each platform. Admit it, you had a vague idea that there were some “terms of service” that you ignored and rapidly agreed to on your way to setting up your account.

Odds are great that you are out zero dollars because the information you voluntarily shared was either hacked or shared with others (including shadowy countries or corporations with ill motives). Someone may have made up a fake account and tricked your friends into communicating with “you” – but no real damage was done. Maybe you were surprised at some pop-up advertisements that knew what you might be interested in based upon your own shared likes and browsing history. Maybe you were exposed to fake news or an ad or fake account created by a Russian agent who wanted to influence your vote in the last election.

Is it Facebook’s fault that you read a story or viewed a meme or engaged with someone you don’t really know and were misled? Did you just take what you read at face value? Did you fact check? Did you have a discussion with a real person that you know (either online or in person) to discuss it? Did you have any level of intellectual curiosity that inspired you to dig deeper? Probably not.

Before we plunge headlong into regulation (or over regulation) of social media sites, or making them pay-to-play sites, consider that your participation in them is and remains voluntary. The only information at risk is that which you put at risk.

Rule to Enable Consumers to File Class-Action Lawsuits Against Banks Rejected by the Senate

By Michael J. Napoleone

On Tuesday, the Senate voted to kill a rule that would have enabled consumers to join together and file class action lawsuits against banks instead of being forced into individual private arbitration claims. The proposed rule was set to take effect in March 2018, and rather than banning the use of the arbitration provisions outright, it sought to ban those provisions that prevented consumers from joining together to bring class action cases. The position of the Consumer Financial Protection Bureau (take note of the name of the organization), was that the class action lawsuit is an important vehicle through which consumers can band together to hold banks accountable for wrongdoing. While yesterday’s vote was arguably a victory for financial institutions, the result is potentially devastating for consumers.

The main purpose of class action lawsuits is to enable a class of similarly situated plaintiffs to join together to sue a defendant for injuries caused as a result of common actions or inactions. Some of the primary benefits to potential plaintiffs in class action lawsuits include:

  • The ability to seek redress for relatively minor amounts of money.
  • Lower the cost of litigation by enabling costs to be shared among the members of the class.
  • One lawsuit on behalf of hundreds or thousands of plaintiffs puts less strain on the judicial system as compared to hundreds or thousands of separate lawsuits against the same defendant for the same harm.
  • Promotes uniformity for plaintiffs and defendants and reduces the potential for inconsistent results.

The rule proposed by the CFPB was intended to ensure that consumers had the ability to file class action lawsuits against banks. Many agreements that consumers enter into with their financial institutions contain pages of “fine print” that, frankly, no one reads and few laypeople would understand. Contained in these agreements are arbitration clauses which require consumers to waive their constitutional right to a civil jury trial, access to the court system, and more and more often, require that all disputes be submitted to a private arbitration panel for resolution. The choice for consumers who do not want to be forced into arbitration of disputes is to simply not enter into the agreement. This “choice” is generally not a choice at all, as more and more core services are including mandatory arbitration clauses in their agreements, including banks, credit card companies, and your cell phone and internet providers. More telling: most consumers don’t even realize that their agreements contain these waivers.

As an example of the consumer benefit of the class action lawsuit, look to Wells Fargo’s recent  settlement of a class action filed on behalf of consumers for whom the bank opened accounts without authorization. Most individual consumers suffered what would be considered minimal damages; for example, some were charged about $25 in bank fees for accounts they didn’t open. Few if any consumers would go through the expense of retaining an attorney to file a lawsuit over $25; even fewer attorneys would take on such a case. But when you aggregate those damages over thousands of consumers into a single lawsuit, the benefit of a class action become clear. Think $25 isn’t a lot of money? Multiply it out over the thousands of customers that were wrongfully charged a fee and you will understand why the bank settled the claims for $142 million. Without the ability to aggregate those claims into a single lawsuit, Wells Fargo may have been able to retain much of those improperly collected fees.

No Disqualification of Judge for being Facebook “friend” with Attorney

By Michael J. Napoleone

Is it a good idea to be a Facebook “friend” with a judge before whom you may reasonably expect to appear? Probably not. But that friendship, without more, is unlikely to serve as the basis for a successful motion to disqualify a judge according to a recent opinion from the Third District Court of Appeal.

The appellate court held that being a Facebook “friend” with a judge – standing alone – does not provide a basis for disqualification. In Law Offices of Herssein and Herssein, P.A., v United Services Automobile Association, ___ So. 3d __ (Fla. 3d DCA August 23, 2017) the Third District denied a writ of prohibition seeking to disqualify a trial judge because the judge was a Facebook “friend” with a lawyer representing a potential witness and potential party in the pending litigation. In denying disqualification, the court noted that “[b]ecause a ‘friend’ on a social networking website is not necessarily a friend in the traditional sense of the word, we hold that the mere fact that a judge is a Facebook ‘friend’ with a lawyer for a potential party or witness, without more, does not provide a basis for a well-grounded fear that the judge cannot be impartial or that the judge is under the influence of the Facebook ‘friend.’”

In reaching this conclusion, the court acknowledged it was in conflict with a decision out of the Fourth District Court of Appeal, Domville v. State, 103 So. 3d 184 (Fla. 4th DCA 2012), which held that recusal was required where a judge was a Facebook “friend” with the prosecutor. The Third District recognized that “electronic social media is evolving at an exponential rate” and that while at one time, being a “friend” on social media may have “given the impression of close friendship and affiliation,” not all Facebook “friends” rise to the level or a close relationship that warrants disqualification.

The court noted that a mere personal friendship with a judge is an insufficient basis to disqualify a judge, and that this standard should apply equally to attorneys or interested parties who are “friends” with a judge on social media. Something more than mere “friendship” with a judge – whether in person or on social media – is required before that friendship can be grounds for disqualification. The Third District recognized that while some Facebook “friends” are undoubtedly friends in the classic sense of person for whom the member feels particular affection and loyalty, many are not. “A random name drawn from a list of Facebook ‘friends’ probably belongs to casual friend; an acquaintance; an old classmate; a person with whom the member shares a common hobby; a ‘friend of a friend;’ or even a local celebrity like a coach.” A reasonably prudent person should not fear that he or she could not get a fair trial in front of a judge who is a Facebook friend with a lawyer involved in the case.

Critical Contract Mistakes – and How to Avoid Them

By Michael J. Napoleone

Critical Contract Mistakes

When it is time to put your agreement in writing, don’t take shortcuts. The best intended plans can fail if you don’t make sure that the written document reflects what you have negotiated. Here are some frequent traps to avoid when preparing your next contract.

1. Failing to have a fully executed contract.  Sending the contract to the customer is not enough. Do not begin work, order product, or undertake any other actions set forth in the proposal until you are in possession of a signed contract. You would be surprised at how many people will start work on the assurance that the executed contract will be provided, only to discover (once a problem develops) that there is no signed agreement.

2. Failing to include all material termsA contract should be “all inclusive.” Include the exact scope of the work to be performed or the materials to be provided. Simply stated, set out what each person has agreed to do. If work is to be performed or materials provided according to a set schedule, set forth the specific schedule in the contract. Is there a key deadline that must be met? If so, make sure the contract specifies that “time is of the essence” as to that event (and not to any other deadline). Are permits required? Who is to pull them and when must they be obtained? As to materials: which are included as part of the base price and which are options added at extra cost? Is labor included? How many hours? What is the price per hour? Spell out each term of the contract clearly and precisely.

3. Be clear on payment terms When is payment due? Is a deposit required? How much and when is it due? Do not leave room for ambiguity or interpretation. Discuss the payment terms up front and make sure they are specifically written into the contract. Be clear if payment is conditioned upon a percentage of completion or a specified time schedule. Also be clear as to what actions may be taken if payment is not timely received and the remedies of each party in such an event. Consider an escrow account where the total contract price is deposited up front with a provision that allows funds to be withdrawn upon the occurrence of certain conditions or events (such as delivery of product, percentage of completion, etc.). Even if you get into a dispute later, at least you will know that the full purchase price is being safely held in the event that you need to compel payment.

4. Making assumptionsIf there is a term or provision that is important to you, make sure it is in the contract. Are there unique or specialized terms in the contact? If so, make sure they are clearly defined so that all parties know exactly what is meant by each term. Don’t assume that both parties understand what is required under the contract; spell it out. Ask questions. Before signing the contract, discuss the final written terms with the other party. Make sure you have included all key items (many of which are described above).

5. Promising what you can’t deliver It sounds simple, but don’t bind yourself to a contract that obligates you to perform on a certain time table unless you know you will be able to meet that timetable. If your performance depends upon your receipt of merchandise that is not already in your possession, try to tie your performance benchmarks to run from the date the merchandise is delivered to you.

6. Ignoring the “fine print”. Include a venue and jurisdiction provision which states where a lawsuit may be filed in the event of a breach. A jurisdiction provision is especially important with non-local parties, as you don’t want to find yourself unable to sue in your venue of choice.

In Florida, prevailing party attorney’s fees are generally only available by statute (for a limited set of claims) or by contract. Consider including a prevailing party attorney’s fees provision, but remember that it cuts both ways.

Include a merger clause that states that the written agreement reflects the entire agreement and understanding of the parties. The purpose of a merger clause is to prevent one party from later claiming that there were oral agreements that provided for additional terms or conditions not covered in the written agreement.

Include a provision that prevents and voids any oral modifications of the agreement.

7. Using a form If you have an old form contract that you have used for years, take the time and expense to have it reviewed to make sure that it is a good starting point and that it contains all the necessary provisions for the current need. If it was prepared many years ago, it is a good idea to make sure that it is still a legally enforceable document. Don’t rely on a form that someone gives you without first having it reviewed. Which takes us to ….

8. Failing to hire an attorney to review your contractHiring an attorney to assess and prepare your contract before you have a problem is more cost effective than trying to later enforce a poorly drafted contract. While few agreements are truly “air tight,” you want to know that you have done everything you can to make sure the contract terms are all spelled out and you have covered all of the important points in the event of a breach. A lawyer can help you accomplish this goal.

After 20 Years, Constitution Revision Group Faces New Hurdles, Politics

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By Celia Ampel

When 37 Floridians gather next year to develop proposed amendments to the state’s constitution, they will face obstacles their predecessors didn’t.

The Constitution Revision Commission, a body that comes together every 20 years to draft amendments that go straight to the ballot, will see its third iteration in 2017-18. For the first time, the commission’s proposed amendments will require 60 percent of the statewide vote to pass, rather than 50 percent.

And unlike the commission that met in 1997, this group will be nearly entirely made up of appointees chosen by Republican politicians.

The governor picks 15 members, the leaders of the state House and Senate each choose nine, and the chief justice of the Florida Supreme Court names three. The last seat is always taken by the state attorney general.

Because Gov. Rick Scott, Senate President Joe Negron, Speaker of the House Richard Corcoran and Attorney General Pam Bondi are all Republicans, the commission might have a more difficult time than the 1997 group reaching compromises that appeal to the whole state’s population.

The 1997 commission, made up of bipartisan appointees, sent nine proposed amendments to the ballot, and voters approved eight of them. But the commission that met in 1977, which was dominated by Democrat-appointed members, saw zero of its eight proposals pass.

“I believe that we had a very thoughtful commission and a commission that tried to be as nonpolitical as possible,” said Stephen Zack, a Miami partner at Boies Schiller & Flexner who served on the 1997-98 commission. “Now, I don’t believe that was always achieved … but when you have both chambers and the governor the same party, of course you’re going to have some issues there that we didn’t have to face.”

Zack said the 1997 commission also bolstered its ballot success by requiring that 60 percent of the commission vote to approve each recommendation before sending it to Floridians, who at that time only needed to pass amendments with a 50 percent vote.

Applicants to this year’s commission said they hope to draw lessons from the two previous groups so they can be as effective as possible in creating lasting, meaningful change for the 20 million residents of the state.
“If you go for changes that are too controversial, the likelihood of getting passage diminishes,” said Fort Lauderdale attorney Alan Becker, a founding shareholder of Becker & Poliakoff and an applicant for the 2017-18 commission. “Getting a change to the constitution is difficult, and it should be. Constitutions need to have a degree of flexibility, but they’re supposed to endure. So one of the big lessons is that you have to approach it with humility.”

Becker said one goal of the commission members, who will be chosen early next year from more than 100 applicants, should be to draw as many people as possible to the public hearings the group will hold across the state before its May 2018 deadline for proposed amendments.

Florida Bar President Bill Schifino, who also applied for one of the 37 seats, has led an effort to educate citizens about the Constitution Revision Commission process. He agreed with Becker that listening and dialogue will be the keys to coming up with compromises that stand a chance of earning 60 percent of the statewide vote.

“I think our leaders are good thought leaders and I’m hoping whatever political persuasion their appointees are, my hope is that they will all be thoughtful, even-handed, and that they will take their time listening to all sides of every issue,” said Schifino, a managing partner at Burr & Forman in Tampa.

Schifino said the commission is likely to discuss education, gun control and an ever-popular topic among bar members: the independence of the judiciary.
“I would love to find a way where we were self-funded and where we didn’t have to go through the process year in and year out,” he said. “It’s very challenging. Our judges haven’t had raises in 11 years. Our state attorneys and our public defenders, are, in my opinion, significantly underpaid.”

West Palm Beach attorney Michael Napoleone, who helped educate citizens about the commission as a past chairman of the Florida Bar’s Constitutional Judiciary Committee, agrees some commission members will likely come in with ideas to “shake up the judicial branch.” Term limits for judges is one controversial issue.

But Napoleone, a shareholder at Richman Greer, worries about the chances of the commission working to protect the judicial branch when Florida Supreme Court Chief Justice Jorge Labarga is only allotted three appointees. (That doesn’t mean lawyers don’t have other paths in—Becker and Schifino both applied to the governor.)

“I believe all three branches should have an equal number of appointments to the commission,” Napoleone said. “I haven’t heard a good argument as to why the chief justice gets three and there’s nine, nine and 15 for the others.”

If anyone wants to change that system, they’ll have to propose an amendment to the constitution. But with a Constitution Revision Commission mostly appointed by the executive and legislative branches, Napoleone said it doesn’t seem likely the group would take it up.

To view original article, click here.

 

Contributing Attorneys

Napoleone, Michael J. – Shareholder

Here’s How Local Governments Can Get Up To Speed On The New Overtime Regulations

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By Michael Keating

Revisions to the federal Fair Labor Standards Act (FLSA), announced in mid-May, will expand the pool of workers eligible for overtime pay—and that pool includes both public- and private-sector workers. The final rule from the Department of Labor (DOL) that updates the overtime regulations will automatically extend overtime pay protections to over 4 million workers during the first year of implementation.

The DOL final rule grows the pool of eligible workers by more than doubling the salary threshold that determines coverage. Under the new regs, any salaried employee earning less than $47,476 annually would be entitled to time-and-a-half for work that exceeds 40 hours per week. Currently, the salary cutoff for overtime pay is $23,660. The final rule will take effect Dec. 1.

GPN reached out to attorney Michael J. Napoleone to find out how cities and counties can prepare for the recently revised overtime regulations. Napoleone, who is based in West Palm Beach, Fla., is with the firm of Richman Greer. He offers his views below.

GPN: What steps can local governments take to comply with the new U.S. Dept. of Labor overtime rules?

Michael J. Napoleone: The federal government has been telegraphing this move for several years, so most local governments have likely already taken action in anticipation of the new thresholds. As a practical matter, the existing distinctions between hourly and salaried employees have pushed the pay scale of exempt employees to very nearly the level of the newly imposed minimums. For those that still need to take action, there are several options available: (1) reclassify current exempt level employees to non-exempt if they do not meet the new standard; (2) raise the pay of current exempt level employees to meet the new standard; (3) reduce workloads for non-exempt employees who regularly work more than 40 hours per week; or (4) adjust salary budgets to allow for increases in salaries and additional overtime pay.

GPN: Should governments consider offering comp time to employees? One DOL resource outlines the permitted use of compensatory time off in state and local governments.

MN: For some local governments, comp time is hard to track and enforce, so many do not offer it. For those where comp time is an option, pursuant to an agreement with their employees (or their representatives in a union environment) state or local governments may provide comp time instead of a cash payment for overtime hours.

GPN: Should government raise eligible workers’ pay so those workers stay exempt?

MN: This is generally an option that needs to be addressed on an individual employee-by-employee basis. In many cases, it will be cheaper to pay overtime than to make significant salary adjustments. Paying overtime eliminates “wage creep,” forces supervisors to better evaluate additional work hours, and limits non-salary payroll expenses.

GPN: Will cities/counties need to track employees’ hours more closely and rely on worker time tracking systems?

MN: Absolutely. Increased accuracy, monitoring and evaluation of employees’ hours increased with the implementation of the Affordable Care Act, whereby the average hours worked may have triggered the need to provide health insurance.

GPN: Do you have any advice for governments on how they need to respond?

MN: Start planning for implementation now by:
a. Determine exempt positions where employees currently earn less than $47,476
b. Identify pay strategies and modeling scenarios for increasing the salary of exempt-level employees to the new salary to maintain their positions as exempt; reclassify certain exempt-level positions to non-exempt; calculate additional overtime generated by newly reclassified non-exempt employees; and review staffing budgets to accommodate changes.
c. Analyze work requirement and duties for employees who are reclassified as non-exempt, establish overtime restrictions and hourly reporting requirements.
d. Analyze your benefits and paid-time-off structures to determine whether changes need to be made as the employee transitions from exempt to non- exempt status.
e. Plan your communications strategy so that impacted employees will understand the changed and expectations going forward.

In the video, the U.S. Department of Labor explains why it changed the rules governing when employees can be exempt from overtime pay. The new rules take effect December 1, 2016.

To view original article, click here.

Contributing Attorneys

Napoleone, Michael J. – Shareholder

Focus On The Local Judicial Races, Too

By Michael J. Napoleone

With the presidential campaign in full swing, most Americans are focused on who will be the next president of the United States.

Before the November election, the August primaries present Florida voters with a decision that might be even more important than the election of the president: the election of local judges.

Why should one be concerned with judicial elections? Because a judge is the most important person you are going to need on one of the worst days of your life.

Neither your member of Congress nor the president can put you in jail, take away your children or order you to pay alimony. But a judge can directly impact your life or that of a family member.

During divorce, a judge decides how much you have to pay your spouse and how often you get to see your children. In a criminal case, the judge makes sure your rights are protected and, if you are guilty, decides your sentence. In probate cases, a judge decides how much you inherit or who gets your stuff when you die.

You owe it to yourself and your community to be an informed voter and cast an educated vote in the judicial races.

Nearly 30 percent of voters in high-profile elections don’t vote in the judicial contests. The lower turnout magnifies the importance of each vote and makes it critically important that you vote in the judicial races.

One good source of information is the Judicial Candidates’ Voluntary Self- Disclosure Statementon The Florida Bar’s website. You can review the candidates’ history of community service disciplinary records, and where they rank in the judicial polls.

It has been said that we get the government and the leaders that we deserve, not necessarily the best ones. This applies equally to our judges.

Educate yourself and cast a ballot that ensures we elect the people most qualified to serve as judges.

To view original article, click here.


Contributing Attorneys

Napoleone, Michael J. – Shareholder

How to Avoid 5 Common E-Discovery Mistakes

Reporter: Joe Van Acker 

New e-discovery rules approved by the U.S. Supreme Court in April will go into effect in less than six months, with changes designed to spur attorneys to narrow evidentiary requests to be “proportional to the needs of the case.” With the new rules in mind, here are five blunders you should avoid when tracking down computerized data, documents and dialogue.

Failing to Communicate

Paul Newman’s character in “Cool Hand Luke” learned about the importance of communication the hard way, but clients don’t have to. Open discourse is crucial when representing Fortune 500 companies and other large clients with email trails a mile long, but it’s mutually beneficial in every case, according to Michael Napoleone, a shareholder at Richman Greer PA.

“Even in smaller cases, you’re going to find that you have a lot more electronically stored information when you think about the number of potential places that documents can be,” Napoleone says. “Emails tend to multiply and multiply and multiply.”

That means lawyers have to be upfront with their clients about what needs to be done in order to comply with discovery requests and avoid spoliation sanctions, namely identifying what information is needed and who has it.

“Clients and lawyers need to be speaking the same language when they’re talking about the

scope of discovery,” Kirkland & Ellis LLP partner Michael Williams says. “Outside counsel should be able to rely on inside counsel, and inside counsel should be able to rely on business people. “But the perspective should always be trust, but verify,” he adds.

 

Penny-Pinching

Few realities are as frustrating as the fact that you pretty much always get what you pay for. While it’s important to trust clients’ dedicated information technology professionals to help track down data, the stakes are too high to forego third-party vendors who specialize in that kind of work if the coffers are full.

Zachary James, of counsel at Meland Russin & Budwick PA, says that calling in the pros is a great idea if the budget allows.

“It helps the requesting party by creating a protocol for collecting and producing documents,” James says. “And on the receiving end, vendors work with the client and IT personnel, making sure the process is done properly.”

Bringing on vendors may seem like an unnecessary upfront expense, but their ability to organize and document the data collection process can save cash, claims and even an entire case in the long run, providing proof that attorneys and clients acted in good faith when searching for responsive documents.

And experts say vendors are actually a bargain compared to attorneys who
have to pore over troves of information, and are able to streamline the process. Napoleone says a vendor assisting in a recent case was able to trim a batch of 3 million documents down to 400,000.

That’s mostly due to proprietary software that searches for keyword combinations to efficiently identify relevant documents. Without good keywords, important files may slip through the cracks. Or, as Napoleone says, “Garbage in, garbage out.”

Poor Planning

E-discovery has become the costliest, most time-consuming part of trying a case, and the new rules approved in April are a reflection of that, according to Williams. Much of the burden stems from the fact that a lot of documents produced at trial wind up being irrelevant, but James says preemptively hammering out solid document retention and destruction procedures can help current clients avoid future headaches.”Some companies spend huge amounts of money trying to preserve everything, but that’s not really legally required and really not the best practice,” James says.

 

He also stresses that it’s important to get a handle on clients’ current procedures before making any agreements with the opposition when a lawsuit crops up, noting that it’s hard to provide documents if clients have already deleted them.

Napoleone advises attorneys to not only put a litigation hold in place to avoid spoliation but also to figure out any potential issues with what he refers to as the “electronic environment,” and James says that’s an ongoing duty.

“It’s good to audit clients quarterly to make sure instructions have been disseminated, that everything is running smoothly and that they have a resource to go through in your office,” James says.

Negociating with a Chip on Your Shoulder

Harboring the desire to win doesn’t mean attorneys should go into a case treating opposing counsel like the enemy.

“The biggest mistake that attorneys make is not taking a cooperative approach with opposing counsel,” James says.”Rather than viewing discovery as an opportunity to go after your opponent, you can manage e-discovery more effectively and spend more time litigating claims.”

Reaching out to the other side adds integrity to the process, according to Napoleone, and also presents an opportunity to come to terms on clawing back any inadvertently produced privileged documents, a pitfall that’s nearly unavoidable in light of the broad requests associated with e-discovery.

Williams says that once litigation has kicked off, lawyers on both sides will “reflexively” challenge e-discovery and document preservation — but cooperating in the early stages allows everyone to avoid unpleasant surprises if things get testy later on, according to Napoleone.

“If you don’t cooperate because you reject that out of hand, you find out that you should have in order to develop an adequate list of keywords,” Napoleone says. “The quantity of electronic communication is growing much bigger, the types of communications are more diverse and the stakes are much higher for e-discovery mistakes.”

Comitting the Cardinal Sin

E-discovery may have ushered in some new headaches, but the cardinal sin —
destroying or hiding documents — remains the same, and now it’s almost guaranteed to leave a trail.

That trail, composed of digital breadcrumbs of metadata, can be as valuable as
the documents they accompany, detailing who knew what and when.

Williams recalls artist Shepard Fairey’s case against The Associated Press, in which Fairey was found to have repurposed an AP image to create the iconic “Hope” portrait of President Barack Obama popularized during the 2008 presidential campaign. Kirkland & Ellis associates discovered through metadata that Fairey had both deleted and created documents to support his case, later resulting in criminal charges and probation for the artist.

“With metadata being what it is today and with the sophistication of lawyers being what it is today, when a party withholds documents that they should produce, they will almost certainly be caught,” Williams says.

 

To view full article click on the link below or download the article below:

https://www.law360.com/articles/676298/how-to-avoid-5-common-e-discovery-mistakes

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Contributing Attorneys

Napoleone, Michael J. – Shareholder

Business Strategy: Plan for the End at the Beginning

By: Michael J. Napoleone 

At the outset of a new venture, no one wants to think about failure. However, the oft-cited axiom holds true: if you fail to plan, you plan to fail. One of the most common mistakes people make when starting a new business is thinking that all they need to do are prepare the proper articles for filing with their state’s department of corporations, open a bank account, and they are off and running.

While many follow this bare bones approach, you will encounter a problem when you have a dispute or change in circumstance that was not contemplated at the outset, and each owner may have a different opinion on the correct course of action. Situations that can create discord if not properly documented include: capital call requirements, the addition or withdrawal of owners, the compensation structure for ownership, the plan for management, and which day to day decisions can be made by one owner and those that require a majority or super- majority approval. Starting a business is stressful enough, but by not identifying at the outset the roles each owner will play and the respective duties and obligations of each, you have assured yourself of future problems. The time to plan for the end is at the beginning, when all parties are getting along.

This article focuses on the most common form of business structures, the limited liability company (“LLC”), but most principles apply equally to corporations or partnerships. The first decision to be made is the equity structure – how much of the business each member of the company will own. In most LLCs a member receives an economic interest (reflected as percentage of ownership) and a management interest. Often, this interest will correspond with a member’s capital contribution to the company, but need not; sometimes one member brings capital while another brings the concept or experience. Either way, it is critical that the equity and management structure be defined at the start.

The desire of a member to leave the company is circumstance ripe for controversy. As a closely held company, there is generally no open market to sell off the interest of a member. More importantly, the remaining members likely do not want to allow the departing member the right to sell her interest to just anyone, as the purchaser will become part of the business. For these and other reasons, it is important not only to include restrictions on the ability to transfer a membership interest, but a mechanism by which the value of that departing member’s interest can be determined.

Restrictions on transfer can include the right to assign the equity interest, but not management rights. In many instances, this may be the appropriate method to provide for the reassignment of an ownership interest upon the death of the member. The agreement can provide a right of first refusal where the remaining members must be given the right to acquire the interest of the departing member at the same price agreed to be paid by a third party. Certain future transfers can be agreed upon at the outset, such as transfers to an entity affiliated with one of the existing members. This can be important for estate tax planning purposes.

The method by which to value the interest of a departing member should be determined in advance. Do you want to value the interest as a going concern? As the value of its assets or book value? Or based on an orderly disposition (where the company is sold piecemeal)? Considerations include the lack of an open market for the membership interest, as well as premiums or discounts that should be considered if the interest to be sold reflects a majority or minority of the voting interests. The best time to determine the method to be used for valuing a departing member’s interest is at inception, when all parties are presumably more likely to reach an agreement. Whatever valuation method you chose, ensure that your agreement mandates that the determination is final and binding, to help avoid “sour grapes” when the provision is invoked.

Because disputes will inevitably arise, you should provide for the method of resolution in the agreement. Absent an agreement, the default method would be to file a lawsuit in court, but a well- drafted operating agreement will provide methods that could significantly reduce the cost of resolving disputes. A preferred method is to require members to submit their disputes to non-binding mediation, followed by binding arbitration if a resolution is not achieved. Though mediation is not binding, it generally offers the best opportunity to promptly bring the dispute to a neutral who can help the parties work toward an amicable resolution before each side has spent too much time and money fighting over the issue where each now believes that only complete victory is acceptable. If mediation does not succeed, arbitration before a single or panel of arbitrators can provide for a quicker and more cost-effective decision than the court system. Prompt resolution is important to allow the business to return its focus and the energy of its owners to the running of the business.

There are dozens of additional issues you should consider when organizing your new business depending on the nature of the business you are creating and your desired ownership and management structure. Always remember that an operating agreement is a complex document that should be custom-tailored for your unique business arrangement and the needs of its owners. You should have the agreement reviewed periodically to make sure that the provisions are still appropriate for the current business plan and to address any changes that ownership might desire based upon practical experience in the operation of the business.

(As published in The Business Know-How)

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Contributing Attorneys

Napoleone, Michael J. – Shareholder