Nathan D. Wirtschafter
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The Wirtschafter Law Reporter

Vol. II, Q1

The Wirtschafter Law Reporter (“WLR”) is a quarterly publication of Nathan D. Wirtschafter Corp.

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Nathan Wirtschafter


Litigator’s Corner:
New Rules on E-Discovery.

Emails have become almost as important as witness testimony in trials and hearings. In a time when few write letters, the record is often a quickly-prepared electronic note.

In a recent case, Mr. Wirtschafter asked a corporate officer if there had been any attempt to tamper with a key witness. When the corporate officer answered “No,” Mr. Wirtschafter presented an email from the corporate officer to the company president recommending a raise to persuade the key witness to testify favorably. The judge summarily over-ruled the opponent’s objection and the now-discredited corporate officer was left hanging in the wind.

The California Judicial Council has proposed new laws governing the disclosure of electronically-stored information during litigation.

One proposed new law mandates that counsel discuss electronic discovery before the case management conference (which in California usually functions as a trial-setting conference). Another proposed law requires that a party seeking to prevent the disclosure of electronic information must ask the court for a protective order, but the costs could shift if the court orders production of electronic documents.

In a recent case handled by Mr. Wirtschafter, a judge granted a motion to compel further production of documents when the opposing corporate defendants refused to provide access to electronic accounting data. The judge ordered the corporate defendants to provide on-line access to historical accounting data because exporting the data would remove “metadata,” which shows when accounting entries are made.

Litigator’s Corner: Crackdown on Concealment of E-Mails.

In a recent case, a federal magistrate judge assessed massive sanctions against six attorneys for corporate giant Qualcomm, Inc. (QCOM).

Qualcom apparently failed to turn over 46,000 “incriminating emails” in a patent dispute against Broadcom Corp. (BRCM). As trial was winding down, a crucial Qualcom witness revealed that she had emails which were not disclosed. After the trial, Qualcom identified thousands of additional undisclosed documents.

Despite the suppressed evidence, Broadcom won the case. As a sanction for Qualcomm’s “monumental and intentional discovery violation,” the court awarded Broadcom all attorneys fees and costs incurred in the litigation. The bill: $8.5 million.

Recent Cases: Israeli Doctor Qualified to Provide U.S. Standard of Care Testimony.

In Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal. App.4th 463, the trial court excluded a declaration from Israeli orthopedist Dr. Arieh Arielli, who examined a patient upon her return to Israel. Dr. Arielli found injuries caused by medical defendants’ improper splinting of patient’s arm.

The appellate court reversed. It found that Dr. Arielli, who had 27 years of experience, was sufficiently qualified to provide an opinion about the standard of care for treating fractures in the United States and fractures similar to patient’s injury.

Citing Hippocrates’ fourth century B.C. treatise on broken bones, the Court noted that broken bones had been properly (and improperly) treated since the dawn of humanity. Furthermore, no evidence had been presented showing any difference in the standard of care for treating broken bones in the United States, Southern California or Israel.

Drafting Tip: Confidentiality Agreement Used to Support Letter Thwarting Former Employee’s Competition.

In Neville v. Chudacoff (March 12, 2008) 2008 WL 650658, employee Neville was terminated after he misappropriated customer lists and solicited numerous customers in violation of a written employment and confidentiality agreement.

The employer [Maxsecurity] had its attorney [Chudacoff] send a letter to employer’s customers on law firm letterhead, notifying its customers that a former employee might contact them in violation of a written employment and confidentiality agreement. The letter states, in part, as follows:

“Please be advised that this office represents Maxsecurity . . . . It has recently come to our attention that a former employee of Maxsecurity may have been in contact with you, or may attempt to contact you. The name of the former employee is Mark Neville, and he may be representing himself as ABD Audio and Video.

“Mr. Neville is in direct violation of an employment and confidentiality agreement he had with Maxsecurity. Mr. Neville's relationship with Maxsecurity ended at the end of last year. Contact and/or communication with Maxsecurity customers was, and is, specifically prohibited under his employment contract. We have notified Mr. Neville of his breach and shall be aggressively pursue [ sic ] all available remedies.

“Any work contracted with Mr. Neville or his company would be in violation of our agreement with him. In order to avoid any involvement in litigation that my [ sic ] arise between us and Mr. Neville (as a material witness, or otherwise), we suggest that you have no further dealings with Mr. Neville or his company. You should know that any monies paid to him or his company properly belong to Maxsecurity, and we shall, if necessary, seek an accounting of all monies paid out.”

Employer later sued Neville and Neville counter-claimed, arguing that the letter sent by employer’s attorney to employer’s customer list was false and defamatory. The employer argued that under the so-called “litigation privilege,” which protects any communication made in connection with an issue under consideration by a court, the employer had a constitutional right to send the letter. The employer claimed that while the letter was sent before litigation, the employer had a good faith intent to file a case against Neville.

Neville countered that there could be no good-faith intent to file a lawsuit, because under the Business and Professions Code, an employer/employee covenant not to compete may not be enforced.

The Court disagreed. It found that employer’s letter did not reference a covenant not to compete. Instead, the employer’s letter accused Neville of theft of confidential information, which is forbidden under numerous cases. Under the Neville decision, the employer was able to use its confidentiality agreement to protect its customer base.

This firm has handled several situations on behalf of employers after confidentiality agreements have been violated by former employees. Often, a carefully-drafted cease and desist letter, coupled with the threat of litigation, can resolve the situation. In other cases, it’s best to have the employer contact the former employee directly. Please contact us if you have questions or wish to have your employment agreement or employee manual reviewed.