Don’t Forget the Exhibits: Get to Know New Rule 5.3

Should you try a case in the Southern District of Florida anytime soon, you will undoubtedly focus on your opening statement, direct and cross examinations, and closing argument.

By Nathaniel Edenfield

Nathaniel Edenfield

Should you try a case in the Southern District of Florida anytime soon, you will undoubtedly focus on your opening statement, direct and cross examinations, and closing argument. These things will help you win your case, but you’ll also want to keep your judge and law clerks happy by being familiar with the amendments to the local rules addressing handling of exhibits.

You’ll find your roadmap to handling exhibits in recently amended local Rule 5.3. For starters, the rule provides that a copy of all exhibits should be provided to the clerk of court, so be sure to have an extra copy of your exhibits at trial. One of the judicial staff members, such as a law clerk, will likely be in charge of collecting copies of exhibits as they are introduced and providing them to the clerk of court.

As to certain physical exhibits, the rule says “narcotics, cash, counterfeit notes, weapons, precious stones, or other [physical] items, which, … require special handling” are to be introduced with a photograph of the item and directs the lawyer to keep the original. Be mindful of the length of time that the original exhibits should be retained as indicated in the rule.

The rule leaves discretion for the court on the handling of physical exhibits that do notrequire special handling. Many judges will allow you to introduce the physical item but direct you take the item with you at the conclusion of trial. In that case, you’ll want to have a photograph of the item, which you can leave with the law clerk or judicial staff member if requested. You may also be directed to sign a form stating that you took the original with you.

Be aware of how the court expects you to handle the timing of providing exhibits to the law clerk or other judicial staff member. If you know the exhibits are limited in number, the court may expect you to provide each exhibit to the law clerk or judicial staff member at the time it is introduced. But if you are introducing copious numbers of exhibits, the court may direct you to provide copies of all your exhibits after your case is presented.  Be flexible and feel free to ask the court for guidance.

During trial, you, or someone else on your staff should keep a running list of all exhibits that are introduced by both you and your opponent. If an exhibit was offered but not admitted, note the reason it was not admitted. After the trial is concluded, it is a good idea to reconcile your list of admitted exhibits with the list kept by your opponent and the court. This will shortcut any disputes over what was admitted and what wasn’t.

Once you’re back at your office after trial, you’ll need to comply with local Rule 5.3(b)(2). This rule directs parties to file an electronic version of each documentary exhibit that was introduced at trial and a photograph of each physical exhibit. Be sure you’ve made appropriate redactions of all confidential information before filing these documents in accordance with the rule.

Local Rule 5.3(b)(3) also provides exemptions to the electronic filing requirement for certain types of exhibits, including sealed and ex parte exhibits in criminal cases, contraband images, audio recordings, and video recordings, and exhibits containing voluminous amounts of confidential information that is subject to privacy protection. These items should be delivered directly to the clerk of court or conventionally filed in the case of sealed and ex parte exhibits in criminal cases. Once the exhibits are electronically filed, or delivered to the clerk of court in the case of exempted exhibits, you’ll need to electronically file a certificate of compliance with the rule pursuant to local Rule 5.3(4).

Finally, if there are original exhibits that were left with the court or delivered to the clerk of court, local Rule 5.3(c) directs the parties to retrieve those exhibits. The rule further provides time periods for how long these original exhibits must be retained once retrieved, which varies depending on the type of case.

Here’s a summary of helpful tips:

  • At trial, have an extra set of paper copies of all exhibits to be provided to the court, which should include a set of photographs of all physical exhibits.
  • Feel free to ask your judge whether he prefers all exhibits to be provided to the clerk as they are admitted or at the conclusion of your case or trial.
  • Keep a running list of all exhibits offered at trial and note the reason any exhibits were not admitted. Attempt to reconcile your list of admitted exhibits with the opposing party and the court at the conclusion of trial.
  • After trial, file an electronic copy of all exhibits that were introduced and include pictures of physical exhibits.
  • When electronically filing your exhibits after trial, be sure to comply with the rules pertaining to confidentiality and the exemptions for electronic filing certain types of exhibits.
  • Once your exhibits are filed, file a certificate of compliance stating that you filed all exhibits as required.
  • Make arrangements to retrieve original exhibits being held by the clerk of court and be sure to retain them for the period of time required by local Rule 5.3(c).

By following these tips and spending a few minutes becoming familiar with local Rule 5.3 before trial or an evidentiary hearing, you’ll be in a good position to keep things running smoothly with your exhibits during and after trial.

Contributing Attorneys

Edenfield, Nathaniel M. – Associate

Miami Lawyers Crunch Hard Candy Cosmetics Infringement Claims

The cosmetics maker asked the court to award treble damages in a lawsuit with a potential price tag of $11.4 million for Anastasia Beverly Hills.

By Samantha Joseph


Mark A. Romance and Nate Edenfield, with Richman Greer. Photo: J. Albert Diaz


Mark A. Romance jokes he had a secret weapon — his teenage daughter — who helped him understand fierce consumer loyalty to a California makeup brand and win a defense verdict in an eight-figure trademark infringement and unfair competition case.

Romance was part of a defense team of two Miami attorneys and a Texas lawyer, who beat back a lawsuit seeking to disgorge $3.8 million in profits from California-based cosmetics boutique Anastasia Beverly Hills.

Newport Beach, California-based Hard Candy LLC asked the court to award treble damages in a suit that potentially might have cost Anastasia $11.4 million in Miami federal court.

Romance, a Richman Greer Miami shareholder, worked with colleague Nate Edenfield and Austin, Texas, lawyer Travis Wimberly of Pirkey Barber for the defense.

Their client, Anastasia Beverly Hills, is a prestige cosmetics brand marketed with help from Kim Kardashian and other celebrities. It sells in high-end stores, including Sephora and Nordstrom, and has a social media following of 16.1 million on Instagram.

One of its customers is a high school senior, who on drives to school helped her lawyer-father understand how highlighter could multitask as blush and that Anastasia Beverly Hills cosmetics were unlike all others when it came to style and quality.

“She was my secret-weapon research assistant,” Romance quipped. “We felt confident in our position because the whole issue was whether there was likely to be confusion.”

The case turned on the name of a makeup shade in a 2015 Anastasia product, the Gleam Glow Kit. The kit is a $40 compact with four highlighter shades called Mimosa, Crushed Pearl, Starburst and — the color at the center of the dispute — Hard Candy.

Hard Candy LLC, which holds the rights to 14 federally registered marks, sued Anastasia, alleging the rival makeup company infringed on its trademark by using the Hard Candy name and engaged in unfair competition under the Lanham Act and common law.

To prevail in court, Hard Candy had to prove Anastasia’s product name would cause confusion among consumers.

For the defense team, victory hinged on showing otherwise.

Hard Candy and its predecessors have used the name since 1995 and licenses the mark to a third-party for lipstick, nail polish, eye shadow, bronzer, other cosmetics and eyewear sold exclusively through Walmart retail stores and website. The company had retail sales of $59.9 million in 2015, according to court documents.

“It seems so simple, like a simple makeup case, but the legal issues are not so simple,” said Romance, whose team succeeded on a motion to strike Anastasia’s demand for a jury trial, then shifted attention to a more nuanced discussion. “The real issue is not whether or not you own the trademark rights. That’s important, but the real issue is whether the use of the trademark creates confusion.”

Anastasia Beverly Hills sold about 250,000 Gleam makeup kits in nine months beginning in September 2016 for a profit of about $3.8 million.

Plaintiffs in trademark infringement suits often seek two remedies: damages for lost revenue and an injunction against the party misusing their property. Hard Candy sought neither but argued it should be the one to reap the Gleam kit profits and sought to triple that amount under the Lanham Act.

Its strategy proved to be a misstep. By not seeking damages, the defense argued the company presented a case in equity as opposed to a case at law and was therefore no longer legally entitled to a jury trial.

U.S. District Judge Kathleen M. Williams agreed and presided over a three-day bench trial before ruling for the defense.

“Our theory was that they really weren’t harmed, and that the sale of this kit didn’t cause them any harm,” Romance said. “If it was causing harm, they would have tried to stop the sale through an injunction or sought damages. Neither one of those two things occurred.”

Coffey Burlington president Kevin Kaplan, partner Gabriel Groisman and associate Frances Blake represented Hard Candy.

The judge praised the work of both legal teams before finding no likelihood of confusion and no intention by Anastasia Beverly Hills to confuse consumers.

“I appreciated the professionalism and the caliber of the advocacy that was engaged in by both parties,” Williams said at a Feb. 2 hearing. “I have to say throughout the case, the record, and when I had you before me, the presentations by the lawyers, written and oral, were excellent. And I commend both sides and thank you for engaging in the quality of lawyering that makes my job not always easier, but more of a pleasure.”


Case: Hard Candy v. Anastasia Beverly Hills

Case No.: 16-CV-21203

Description: Trademark infringement

Filing date: April 5, 2016

Verdict date: Feb. 6, 2018

Judge: U.S. District Judge Kathleen Williams

Plaintiffs attorneys: Kevin Kaplan, Gabriel Groisman and Frances Blake, Coffey Burlington, Miami

Defense attorneys: Mark A. Romance and Nathaniel M. Edenfield, Richman Greer, Miami, and Travis Wimberly, Pirkey Barber, Austin,Texas

Verdict: For the defense

Contributing Attorneys

Romance, Mark A. – Shareholder
Edenfield, Nathaniel M. – Associate

Regional Banks May Face Mortgage Fraud Scrutiny

By: Mark A. Romance & Nathaniel Edenfield 

Now that most of the largest U.S. banks have settled claims arising out of their roles in the financial crisis, what are regulators and prosecutors likely to do next?

Given the public’s increased distrust of financial institutions, the various federal and state government agencies and regulators are not likely to take a break now. Expect, rather, that significant resources will be redirected to investigating the country’s smaller regional banks. Unlike the large banks, regional banks are not in a position to pay settlements in the billions of dollars and still survive, but they may be forced to pay smaller settlements commensurate with their roles in mortgage and securities fraud and their ability to pay.

As the focus of investigations shifts, smaller institutions should take steps now to ensure that their current practices are compliant with all applicable rules and regulations, implement programs to ensure continuing compliance and make these measures a part of the company culture.

FIRREA Strikes Back

The major tool that has been used by the government against the large banks is the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), a statute enacted after the savings and loan crisis in the late 1980s. Although the statute was initially intended to protect financial institutions from fraud by third parties, it has recently been interpreted to apply more broadly, clearing the way for its use against banks for their own misrepresentations when selling mortgages and mortgage-backed securities to investors. FIRREA enables prosecutors to seek civil penalties for violation of certain criminal predicate offenses as long as the conduct “affects” a federally insured financial institution. By using FIRREA, prosecutors may take advantage of the civil burden of proof of “preponderance of the evidence” and are also afforded administrative subpoena power to seek broad pre-suit discovery. When liability is found under FIRREA, the civil penalties imposed are subject to wide discretion by the courts. FIRREA’s maximum penalties can be staggering – up to the amount of the pecuniary gain or loss that is derived or suffered from a violation – but courts are afforded wide discretion to impose lesser penalties. FIRREA does not set forth any factors for courts to consider when imposing a penalty, but the issue was addressed by the United States District Court for the Central District of California in United States v. Mendez, where the court set out eight pertinent considerations, including, among others, the defendant’s bad faith, the egregiousness of the violation, the isolated or repeated nature of the violation and the defendant’s financial ability to pay.

The Department of Justice (DOJ) and federal prosecutors have used FIRREA to pursue banks for misrepresentations when selling their interest in mortgages and mortgage-backed securities to investors and the government-sponsored enterprises, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. Bank of America Corp.’s recent $16.65 billion settlement with DOJ includes a $5 billion dollar penalty to settle FIRREA claims related to misrepresentations as to the quality of loans that were securitized and sold to investors. Settlements by JPMorgan Chase & Co. and Citicorp also included substantial FIRREA penalties of $2 billion and $4 billion, respectively.

Yet another legal threat to banks has been lawsuits brought under the False Claims Act (FCA), which allows private citizens, as well as the government, to bring claims for fraud perpetuated against the United States. These lawsuits have alleged failures to follow FHA underwriting standards when banks originated FHA and Veterans Administration insured loans, violations of loan modification guidelines, and robosigning. In 2012, DOJ, 49 state attorneys general, and federal and state agencies reached a $25 billion settlement with BofA, Chase, Wells Fargo Bank, Citibank and Ally Financial, Inc., to settle FCA and other claims.

Regional Banks Next?

As these global settlement agreements are finalized, the large banks’ troubles are beginning to fade in the rear view mirror, and government resources have begun to be refocused on scrutiny of regional banks. Public Securities and Exchange Commission disclosures made by several smaller and regional banks in recent months indicate federal probes into their home loan origination and servicing practices. Specifically, HUD and the DOJ have sought information from these smaller banks related to whether they met underwriting standards for loans insured by FHA.

Atlanta-based SunTrust Banks, Inc., for example, has already entered two settlements with the federal government and state attorneys general – an almost $1 billion settlement for loan-servicing violations and a separate $320 million settlement for failing to properly consider homeowners who applied for loan modifications. U.S. Bancorp, Minneapolis, reached a $200 million settlement with DOJ for failing to meet underwriting standards for loans insured by the FHA. In this environment, regional banks would be well advised to consider the following steps to reduce the risk of non-compliance should an investigation be launched:

Review current compliance practices. Financial institutions should particularly review their practices in the government’s primary target areas: residential home loan underwriting, servicing and modification. To the extent that any areas of non-compliance are identified, immediate steps should be taken to correct the deficiencies. These reviews should take place routinely and become part of the corporate culture. By proactively anticipating and addressing any issues, financial institutions can put themselves in a better position to avoid scrutiny from regulators.

Implement ongoing compliance initiatives. Retain experienced in-house counsel to assess regulatory compliance issues and outside counsel to review compliance initiatives. The idea here is to periodically monitor enforcement of compliance activities, and to ensure that initiatives keep up with the everchanging regulatory landscape. These steps will be helpful in reducing the risk of an investigation being launched in the first place, but may also help reduce the fines available under the Mendez precedent if a financial institution becomes a target.

Make compliance part of the culture. Compliance initiatives should be institution-wide and should engage all employees. Ethics and compliance training should be provided routinely for all employees, including new hires. In particular, all employees making decisions and implementing procedures that could potentially run afoul of federal and state regulations should understand what the rules are and the importance of adhering to them.

Another good idea is to initiate an institution-wide awareness and branding campaign that includes an informational web portal about the institution’s commitment to compliance as well as a series of events, including a kick-off event and series of workshops. Key employees should be required to attend mandatory informational meetings held by in-house and/or outside counsel. Institutions may also wish to consider making compliance a part of employees’ evaluation criteria. Anonymous employee hotlines should also be established to help make it easier for employees to internally and confidentially report any issues and concerns.

Respond quickly and effectively to investigations. If a government investigation is launched, outside counsel should immediately be hired to serve as the liaison between the bank and the investigators, to conduct an internal investigation into the activities being scrutinized and to formulate a strategy for handling the investigation and potential litigation. In an era where competition is already at historically high levels, the cost of retaining in-house and outside experts on compliance issues will absolutely hurt the bottom line in the short run. But the risk of exposure to lawsuits, regulatory investigations, settlements, and fines constitutes a far more serious threat to regional financial institutions that could jeopardize these institutions’ reputation, profitability and very existence.

(As published in BAI – Banking Strategies) 

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Contributing Attorneys

Edenfield, Nathaniel M. – Associate
Romance, Mark A. – Shareholder