New Summary Judgement Standard in Florida – Part 2 commercial law

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May 27, 2019  

Daubert once again sets the legal standard for the admissibility of most expert testimony in Florida.

So says the Florida Supreme Court. 

Last Thursday, the Florida Supreme Court reversed course and announced that the Daubert standard controls the admissibility of expert testimony.  This issue has been ping-ponging around in Florida for quite some time, and even then the standard has remained to many both obscure and indeterminate. Some are reluctant to concede that the effective distinction in practice between the Daubert and Frye standards has been very hard to articulate.  Many Plaintiff practitioners contend that Daubert stands far more significantly as a roadblock to admissibility  of expert testimony in Florida’s state courts. This will remain to be seen, in practice. Previously, and relatively recently, the Court adopted a decision to stay with Frye, although that case was quite cryptic in its conclusions. Nevertheless, this decision is surprising based on the prior ruling.

This ruling adopts what is considered the more stringent Daubert standard used in federal courts, and the majority of state courts.  Daubert is seen to create a higher bar for experts, whose testimony must be significantly evaluated by the court as a gatekeeper.  Under Daubert, the gatekeeping function is seen as enhanced because the Court must determine if the testimony (both scientific and other specialized expert testimony) is based upon a “reliable foundation.” The Frye standard requires that scientific evidence is admissible only if it has gained “general acceptance” in the particular field in which it belongs. Under  Frye experts generally can testify based on their opinions related to generally accepted scientific evidence but the court may also perform a gatekeeping function under this standard. Under Frye, the court may, for instance, also determine whether the testimony is unreliable, violates the general acceptance standard,  or there is no basis for causation that can be shown.

The differences between these standards are often hard to determine depending on the position taken by the court in evaluating expert testimony. Motions directed to expert testimony can be effective under either standard, and in this practitioner’s experience a well-handled motion under either standard can be effective in blocking or limiting unsupported, vague or other “junk science” testimony where the basis for the testimony cannot be shown and causation is lacking. That is even under Frye, an expert can be blocked from testifying as to an opinion where the opinion is not well-founded on scientific or other principals.

Some believe that the adoption of Daubert will increase the motion practice devoted to expert opinions, and further limit “junk science,” alleged to permeate our courtrooms.  While this may be worth considering, the gatekeeping function of the court indeed preceded the adoption of Daubert in Florida, perhaps causing the uncertainty that predated the Court’s new pronouncement on this issue. Either way, we now have a determination of the applicable standard to be applied in Florida’s state courts. How our courts apply that standard going forward will determine whether future modifications either, substantive or procedural, will enhance the presentation of evidence at trial.

OSHEROW, PLLC   info@osherowpllc.com   561-257-0880

“Together we can meet the challenge.”

What relief for commissions is available in Florida to a real estate agent or broker having procured a ready, willing and able buyer (or lessee) by introducing the parties and beginning negotiations, only to later find out that the buyer and seller secretly consummated a deal without including the broker or agent in the final negotiated transaction? Of course, efforts should be made to resolve the dispute without litigation. But if those efforts fail, and the facts closely support the claim, relief is often available. Issues concerning procuring cause can be brought under various claims in a lawsuit including for unjust enrichment and breach of a listing agreement, among others. Procuring cause is considered an equitable doctrine that is generally considered to be incorporated into a written listing agreement, and the terms of the sale or lease agreement. See Sanson v. Dutcher, Higginbothan and Bass, Inc., 401 So. 2d 913, 915 (Fla. 4th DCA 1981) (the procuring cause doctrine is deemed incorporated into the listing agreement terms).

The broker’s burden of proof is not a high one. Where a written contract triggers a commission based on the finding of a “ready, willing and able” buyer or tenant (as opposed to closing on a contract), the proof necessary for the real estate agent to prevail is twofold: (1) the agent must take some affirmative step to bring the buyer and seller (or landlord and tenant) together; and (2) remains involved in the negotiations, unless otherwise excluded. Rotemi Realty, Inc. v. Act Realty, Inc. v. Act Realty Co., Inc., 911 So. 2d 1181, 1189 (Fla. 2005). A finding of intentional exclusion does not require bad faith, but only that the seller or landlord negotiated without the participation of the agent who brought the parties together. See Sheldon Greene & Associates, Inc. v. Rosinda Investments, N.V., 475 So. 2d 925 (Fla. 3d DCA 1985). 

Brokers and agents are often concerned that an exclusive listing agreement may have expired, and with it the claim for the commission. Florida law is clear that it is without consequence that a closing occurs after the expiration of an exclusive listing agreement so long as the agent brought the ready, willing, and able parties together during the time of the agreement. See Monrose, Inc. v. Baldridge, 423 So. 2d 467, 468 (Fla. 2d DCA 1982); Venturvest Realty Corp. v. A.K.S.I.P. Corp., 793 So. 2d 1054, 1056 (Fla. 3d DCA 2001). In determining whether a buyer or lessee is ready, willing, and able to consummate the transaction, the parties’ continuous negotiations extending beyond the expiration of a listing agreement (or simply ongoing negotiations) can be considered. See East Kendall Investments, Inc. v. Bankers Real Estate Partners, 742 So. 2d 302, 304 (Fla. 3d DCA 1999). The terms of a deal may well evolve during the negotiations, so the change to the terms from those originally presented is of little consequence to the ultimate determination of procuring cause.

Where the agent or broker took affirmative steps to bring the parties together and was then excluded from the negotiation, which then culminated in a closing of the transaction, the procuring cause will strongly support the claim. Of course, the facts may show otherwise. For instance, if the parties were already in negotiations, or were introduced independently from the agent’s efforts, the procuring cause may not strongly support the claim. Also of some import is demonstrating that there are few, if any, material facts explaining why the broker or agent was not included in the transaction. Of course, if the agent or broker simply did not do his or her job, or abandoned efforts to assist the parties, the claim will likely fail. But the inferences stemming from the lack of evidence on the defense to support the exclusion of the broker may strongly support the claim. Indeed, inferences stemming from lack of a credible explanation for the exclusion of the broker or agent may support the clandestine or secret efforts behind the scenes to do so. These efforts are by no means necessarily a rare occurrence.

Listing agreements can provide specific rights but cannot intentionally exclude a broker or agent as the procuring cause as a matter of equity. Thus, a listing agreement cannot be used to exclude a procuring cause agent or broker upon the termination of the listing agreement or any express protection period in the agreement. The law is simply that where the broker or agent procured the buyer and negotiations ensued, the broker or agent cannot be intentionally excluded from the transaction. Indeed, the hiring of another exclusive listing agent by the seller or lessor does not change the analysis. The procuring agent remains entitled to compensation. Working with another agent does not void the common law procuring cause doctrine which is deemed incorporated into the listing agreement. (See cases cited above). Indeed, this common law doctrine is intended to protect the agent or broker where the buyer and seller secretly and intentionally act in a manner that results in the exclusion of the procuring cause broker, notwithstanding efforts to justify the conduct.

If you or someone you know was improperly excluded from a deal, there may be relief available. Consider the options and speak with competent counsel.

Thank you to Judge Paul Huey of the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, who shared a recent decision of his authorship, which was affirmed by the Second District Court of Appeal, from which much of this article is derived.

Below is an excellent article by my good friend Ellen Leibovitch, Esq. of Assouline & Berlowe  that is particularly worth reading in today’s environment. Published with the author’s permission.

As all of you know, today’s headlines have been dominated by stories of sexual harassment.  Last year, Bill Cosby and Donald Trump got most of the press, as did the decades-old charges against Bill Clinton.  This year, we have heard about complaints made against Harvey Weinstein, Bill O’Reilly, Roger Ailes, Kevin Spacey, Louis C.K., Roy Moore and others.  The list grows day by day.

Not all of these claims took place in a workplace setting, but many of them did.  Some of you may remember back in 1991 when sexual harassment in the workplace first became mainstream news.  I can still recall when Anita Hill accused Clarence Thomas, her former boss (and nominee to the United States Supreme Court), of sexually harassing her while the two worked together:  asking her out on dates even after she repeatedly refused, discussing sex in the work place, commenting on his own sexual prowess, etc.  After the hearings on Justice Thomas’ confirmation, lawyers like me first began seeing a slew of sexual harassment lawsuits brought against our employer clients.  In fact, I eventually became an employment lawyer exclusively because I had to learn how to defend these lawsuits, which had never before been handled by any of the lawyers in the large, litigation-driven firm where I was then working.

Over the years, employers – especially those who were sued and paid big-time attorneys’ fees and settlements – got smarter.  They developed anti-harassment policies, they trained their managers and employees, they hired sophisticated human resources managers to nip these claims in the bud and some even procured employer practices liability insurance (EPLI) coverage.  These actions, as well as the Supreme Court’s holding in Faragher v. City of Boca Raton case (which limited an employer’s liability for a supervisor who engages in sexual harassment at work), have made lawsuits for sexual harassment a rarity these days.

Although these lawsuits no longer dominate my case load, the tide could easily change with the new wave of sexual harassment claims in today’s headlines.  It will not be long before the person behind the “Me Too” post on Facebook brings a sexual harassment claim against her employer (note that individual harassers are not personally liable under applicable employment laws such as the Florida and federal civil rights acts; the employer bears sole responsibility).  Accordingly, my advice to smart employers is to be proactive today, and I have two key recommendations for how to do so:

First, all employers need to review their existing sexual harassment policies (or, heaven forbid, hire an employment attorney to draft one if you do not have a policy).  Make sure the policy clearly defines and prohibits any form of sexual harassment in the work place and describes a procedure for making complaints of harassment, including designating alternate persons to whom such complaints can be reported.  Although it should go without saying, the policy must be followed by the employer and must not be pure window dressing: complaints should be taken seriously, investigated and resolved and, if the complaint has merit, the offending employee should be disciplined.

Second, all employers should train managers AND employees on the policy.  Many employers have new hires simultaneously sign off on receipt of their handbook and sexual harassment policy without specifically training employees about recognizing, addressing and reporting sexual harassment in the work place.  And other employers wrongly assume that managers should know what to do if they see or are presented with a harassment complaint.  Employment attorneys and human resources consultants offer such training services, as do employee leasing companies; some EPLI providers may offer these services as well.  An investment in training goes a long way in establishing an harassment-free work place, and the costs of training are far less than those that may be incurred defending a lawsuit.

The old saying goes, “An ounce of prevention is worth a pound of cure.” If your business is ever forced to defend a sexual harassment claim, you will be in a better position to defend such claim by following the guidance above.  If I can assist you in any way, please call or email.

Ellen M. Leibovitch

Board Certified Labor & Employment Lawyer

ASSOULINE & BERLOWE, P.A.

What is sometimes generally referred to as “CADRA,” is Florida’s Computer Abuse and Data Recovery Act, which went into effect over two years ago on October 1, 2015. Like its federal counterpart, the Computer Fraud and Abuse Act (“CFAA,”18 U.S.C. §1030, et. seq.), CADRA provides a Florida cause of action for the improper access to protected computers. Fla. Stat. § 668.801.

CADRA provides a new civil remedy to businesses subject to harm or loss resulting from unauthorized access to business data or computer systems. To take advantage of CADRA’s protections, businesses must protect their computers by installing certain “technological access barriers” (TABS), as defined by CADRA.

it is a violation of CADRA for a person to “knowingly and with intent to cause harm or loss” “[o]btain[] information from a protected computer without authorization.” “Without authorization” is defined as “access to a protected computer by a person who: (a) is not an authorized user; (b) has stolen a technological access barrier (TAB) of an authorized user; or (c) circumvents a technological access barrier on a protected computer without the express or implied permission of the owner, operator, or lessee of the computer or the express or implied permission of the owner of information stored in the protected computer.” The statute also defines the term “authorized user” as including an “employee . . . of the owner, operator, or lessee of the protected computer . . . if the . . . employee . . . is given express permission by the owner, operator, or lessee of the protected computer . . . to access the protected computer through a technological access barrier.” Fla. Stat. § 668.802(1).

An individual violates CADRA when he or she “knowingly and with intent to cause harm or loss”: (1) obtains information from a TAB-protected computer without authorization and as a result causes harm or loss; (2) causes the transmission of a program, code, or command to a TAB-protected computer and as a result causes harm or loss; or (3) traffics in any TAB through which access to a protected computer might be gained without authorization.

Directors, officers, employees, and others are considered “authorized users” only when they have express permission of the business owner to access TAB-protected computers. This authorization ends when the relationship between the business and the individual ends.

Businesses bringing suit under CADRA may recover lost profits, economic damages, and the profits gained by the violator. Additionally, the business may obtain an injunction to prevent further violations and to recover the information wrongfully taken by the violator. The prevailing party is entitled to recover reasonable attorney fees.

If your business has been subject to the a loss of its confidential business information or trade secrets through computer access that violates CADRA (or the CFAA), you may have a basis for relief in state or federal court. Seek the opinions of competent legal counsel as soon as you have begun to document and investigate your potential loss.

Osherow, PLLC   *  561.257-0880   *   info@osherowpllc.com   *  http://www.osherowpllc.com

The Computer Fraud and Abuse Act, 18 U.S.C. §1030, et seq., is “primarily a criminal statute designed to combat hacking.” WEC Carolina Energy Solutions, LLC v. Miller, 687 F.3d 199 (4th Cir. 2012); United States v. Nosal, 676 F.3d 854, 857 (9th Cir. 2012). Nevertheless, the CFAA, provides for civil remedies. Therefore, the CFAA needs to be carefully considered by both employers and employees. Because of the CFAA’s application in the employment law context, best practices should include giving corporate IT Departments the necessary tools to identify specific threats or theft, monitoring employee conduct, advising employees on their obligations, and avoiding violations and potential liability principally by employees. In doing so, a significant emphasis should be placed on accessing risks, advising employees appropriately, and ensuring awareness of the risks and potential significant ramifications of violating the CFAA.

The CFAA provides that “[a]ny person who suffers damage or loss…may maintain a civil action against the violator to obtain compensatory damages and injunctive relief or other equitable relief.” 18 U.S.C. § 1030(g) The CFAA holds civilly liable an individual who “intentionally accesses a protected computer without authorization, and as a result of such conduct, causes damage and loss.” 18 U.S.C. § 1030(a)(5) (C). Employers should consider defining the permitted scope of access to corporate information so that clear boundaries of appropriate access can be set in advance.

While most employers immediately block network access once an employee separates from the company, special attention must be paid to any information accessed, copied or deleted from the company’s server or other computer files and, under certain circumstances, a detailed forensic analysis may be appropriate. Employers may be well-served to include in their handbooks, policies and procedures specific and restrictive definitions of what “without authorization” or “exceeding authorization” actually means.

In a number of recent cases, former corporate employees have been accused of violating the CFAA. To successfully bring an action under the CFAA, a plaintiff must show that the defendant: “(1) intentionally accessed a computer, (2) without authorization or exceeding authorized access, and that he or she (3) thereby obtained information (4) from any protected computer (if the conduct involved an interstate or foreign  communication), and that (5) there was a loss to one or more persons during any one-year period aggregating at least $5,000 in value.” LVRC Holdings, LLC v. Brekka, 581 F.3d 1127, 1132 (9th Cir. 2009).

To “exceed authorized access” under the CFAA means “to access a computer with authorization and to use such access to obtain or alter information in the computer that the accessor is not entitled to obtain or alter.” 18 U.S.C. §1030(e)(6). This critical provision has been subject to different interpretations by the federal courts. Federal courts in Florida are, depending upon the facts in issue, bound by the Eleventh Circuit opinion in United States v. Rodriguez, 628 F.3d 1258 (11th Cir. 2010), which has exposed more treacherous terrain for employees, in handling the employer’s electronic  information, particularly in the form of email. Although Rodriquez is the Eleventh Circuit’s pronouncement on the issue adopting a broad view of the abuse provision of the CFAA, a number of circuits and district courts, in the Eleventh Circuit and elsewhere, have adopted the narrow view, or sought to adequately distinguish Rodriguez. Yet the potential for both civil and criminal liability under the CFAA can be staggering, particularly in Florida, and in other circuits that have adopted the broad view.

In Rodriguez, the court subjected the defendant to criminal liability for activities not intended to harm the governmental employer. The court found an employee acts “without authorization” under the CFAA when he or she accesses a computer for any purpose contrary to the government objective (i.e., a non-business reason). The defendant in Rodriguez was convicted of violating the CFAA, based upon exceeded authorized access in violation of government policy, as a Social Security Administration employee. The employee accessed personal information of 17 persons in the SSA’s databases for non-business reasons.

The Eleventh Circuit affirmed the defendant’s conviction holding that “Rodriguez exceeded his authorized access and violated the Act when he obtained personal information for a nonbusiness reason.” Id. at 1263. The Court created a harsh yet bright line analysis for the application of the CFAA, without any finding of animus toward the employer or intention to impact the employer’s business in any way.

Thus, employers and employees in Florida (and throughout the Eleventh Circuit) should take note of the potential ramifications of possible CFAA violations. However, there seems to be resistance to the holding in Rodriquez, and courts in the Eleventh Circuit have distinguished its holding. One such case is discussed below.

In Power Equipment Maintenance, Inc. v. Airco Power Services, Inc., 953 F.Supp.2d 1290 (S.D. Ga. 2013), the plaintiff contended that defendants accessed sensitive information prior to announcing their intention to leave for a competitor. The plaintiff alleged the defendant used his credentials to access an industry database of upcoming business opportunities. The plaintiff admitted that defendants were key members of the company’s management team, and had knowledge of and access to the company’s confidential information. To support their claims, the plaintiff’s sought to establish CFAA violations based upon the agency theory of authorized access (i.e., the broad view), arguing that defendants were unauthorized because it was “in violation of the fiduciary duties [] owed to the Company.” The court rejected that theory of CFAA liability.

The Power Equipment court noted that a major impetus behind the CFAA was to “impose criminal sanctions upon ‘hackers’ and other criminals who access computers without authorization.” H.R. Rep. 98-894, at 21 (1984), reprinted in 1984 U.S.C.C.A.N. 3689, 3707. While there has been some disagreement, the court noted that a narrow definition of unauthorized access or access exceeding authorization has been adopted by many courts. See, e.g., Nosal, 676 F.3d at 859-863; Trademotion, LLC v. Marketcliq, Inc., 857 F.Supp.2d 1285, 1291 (M.D.Fla. 2012); Clarity Servs., Inc. v. Barney, 698 F.Supp.2d 1309, 1315 (M.D.Fla. 2010); Shamrock Foods Co. v. Gast, 535 F.Supp.2d 962, 968 (D.Ariz. 2008); Lockheed Martin Corp. v. Speed, 2006 WL 2683058, at *4-5 (M.D.Fla. Aug. 1, 2006).

These courts work focused on an individual’s unauthorized access of information rather than how a defendant used the accessed data. More specifically, the Power Equipment court recognized that, in its view, the proper inquiry is whether an employer had, at the time, both authorized the employee to access a computer and authorized that employee to access specific information on that computer. In this respect, the actions of the employer are more dispositive that those of the employee. That is, “[i]t is the employer’s decision to allow or to terminate an employee’s authorization to access a computer that determines whether the employee is with or ‘without authorization.’” Power Equipment, 953 F.Supp.2d at 1296-97.

The focus on the employer creates something more akin to a bright line rule that is easy to apply in the numerous and complex factual scenarios likely to arise when assessing whether an employee’s actions violated the CFAA. Id. As highlighted in Power Equipment, courts that disagree with this interpretation often use an agency theory to conclude that an employee’s access automatically terminates or is exceeded when the employee’s actions are no longer taken in the interest of the employer. See, e.g., Lockheed Martin, 2006 WL 2683058, at *5-*7 (M.D.Fla. 2006). In Power Equipment the court found this broad view of the CFAA, notwithstanding Rodriguez, to be “severely flawed” in that it “creates a nebulous area where the same action can fall on either side of the CFAA based on the highly subjective intentions of the employee.” Power Equipment, 953 F.Supp.2d at 1296-97. The court also noted that such things as accessing files prior to deciding to depart for a competitor may retroactively be deemed to exceed authorized access should the employee make use of that information to the benefit of his new employer. Id. [S]uch outcomes place employees in the precarious position of almost any access possibly being construed as exceeding authorized access, potentially resulting in civil liability under the CFAA.” Id.

Furthermore, according to the Power Equipment court, the language of the CFAA simply prohibits accessing information either without authorization or in excess of authorized access. 18 U.S.C. § 1030. Employers are not conferred the ability to sue their employees for violations of company policy regarding computer usage. Quite simply, “without authorization” means exactly that: the employee was not granted access by his employer. Similarly, “exceeds authorized access” simply means that while an employee’s initial access was permitted, the employee accessed information for which the employer had not provided permission. “Resort to linguistic gymnastics and theories of agency are completely unnecessary to interpret these axioms provided by the plain language of the CFAA.” Id.

The plaintiff in Power Equipment, relied heavily on Rodriguez, to argue that liability attaches under the CFAA when an employee “abuses his access … for illegal or nonbusiness reasons.” Power Equipment, 953 F.Supp.2d at 1297. However, the court distinguished Rodriguez finding that, the defendant in Rodriguez was criminally charged with accessing sensitive personal information of individuals he was not assisting as part of his employment. 628 F.3d at 1260-61. The SSA had a well advertised policy that employees were only permitted to access personal information when assisting individuals with their social security inquiries. Id. at 1260. The Eleventh Circuit concluded that the defendant violated § 1030(a)(2)(B) of the CFAA because he was only permitted to access the information of specific individuals for business reasons. Rodriguez, 628 F.3d at 1263.

The factual scenario in Rodriguez presented “an entirely different set of facts than those present” in Power Equipment. In Rodriguez, the defendant was prosecuted criminally for exceeding authorized access to a government computer. SSA policy allowed access to personal information only in the course of assisting individuals with questions concerning their social security. The plaintiffs attempted to leverage alleged violations of nondisclosure agreements, and possibly company policy, into civil liability under the CFAA. But the defendant’s access was not restricted in any meaningful way; they were granted full access to the materials on which the CFAA violations were based. In Rodriguez, the defendant was authorized to access personal information only under specific and narrow circumstances, and only to perform particular tasks.

For these reasons, the court in Power Equipment concluded that Rodriguez was substantially distinguishable and not dispositive of the CFAA issues before the court. To this writer’s knowledge, however, other courts in the Eleventh Circuit are not so willing to distinguish Rodriguez on the basis attributed in Power Equipment, until the Eleventh Circuit or the Supreme Court rules to the contrary.

Based upon Rodriguez, the Plaintiff in Power Equipment argued that “[s]ince Rodriguez, district courts in the Eleventh Circuit have rejected the [Defendants] access/use distinction…, and have instead held that current employees can exceed their authorized access under the CFAA when they access their employers’ computers for the purpose of stealing information.” Id. at 1298-99. The court found, however, that plaintiff’s position, was unsupported in the post-Rodriguez case law. While the court noted, that at least two district courts found that acting contrary to a current employer’s business interests can lead to violations of the CFAA, see, e.g., Ryan, LLC v. Evans, 2012 WL 1551285 (M.D.Fla. Apr. 30, 2012); Amedisys Holding, LLC v. Interim Healthcare of Atlanta, Inc., 793 F.Supp.2d 1302 (N.D.Ga.2011), district courts have also continued to find that simply accessing an employer’s computer for nonbusiness reasons is insufficient to support a claim under the CFAA. See, e.g., Trademotion, 857 F.Supp.2d at 1291 (citing LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1133 (9th Cir.2009)); Lee v. PMSI, Inc., 2011 WL 1742028, at *2 (M.D.Fla. May 6, 2011); Nosal, 676 F.3d at 856, 859; but see Associated Pump & Supply 6, LLC v. Kevin P. Dupree, civ 14-9 (D.La. 2014) (recognizing that the Fifth Circuit, based upon U.S. v. John, 597 F.3d 263, 273 (5th Cir. 2010), may recognize a cause of action under the CFAA for exceeding authorized access where there is a broad confidentiality agreement to delineate the parameters of authorized access).

The disagreement among district courts in this circuit and elsewhere concerning the proper scope of the CFAA continues post-Rodriguez, and may be quite concerning to some faced with potential violation claims. Until further rulings by the Eleventh Circuit or the Supreme Court, employees in the Eleventh Circuit, need to be quite vigilant about defining and policing the authorized scope of access and use of an employer’s computers and computer data. In the interim, such claims will remain a sword utilized by employers, and an area where employees may be subject to de-fending claims that are quite costly, and could be the source of financial devastation. Employers should consider being cautious in counseling employees on their potential liability and making sure employees are aware to the exposure to which they may be subjecting themselves.

THE ADVOCATE 

WINTER 2013/2014 SPBCBA 

p. 15

In days past, counsel would call a client and ask for the documents relevant to a particular dispute, in essence generally asking for the paper file. The attorney, if concerned, would tell the client not to destroy any documents relevant to the dispute. Discussions about electronically stored information were rare. Those days are long gone.

Now the reverse is true. While paper documents are not yet an anachronism, things are certainly heading very quickly in that direction. One indication is that the fax machine has become largely irrelevant and most offices that have not already eliminated the facsimile, will not utilize this outdated technology in the next few years.

When we as attorneys ask our clients for the "file" related to a dispute, while there may be some paper records, and some may have been printed from a computer system, most of the relevant file materials are located on a computer, in a server, or more recently in the "cloud," or other off-site location. Even more frequently the electronic records are located in multiple electronic formats some of which have an actual known "physical" location and others not. Thus, the first step in obtaining documents for litigation or in anticipation of litigation is often the identification of their location. This is particularly critical because of the duty to preserve records under many circumstances.

At a very early phase, the client should be made aware of its document preservation obligations. A document preservation letter should be sent to the client in many situations as soon as the lawyer is retained on a litigation matter. In addition ESI – the acronym for electronically stored information – may be located on a mobile phone, tablet, notebook computer, external storage device, flash drive, or in such locations as computer systems that are contained within machinery including those found in automobiles and trucks. While all potential sources of ESI should be considered, email and attachments to email are clearly the principal and most highly utilized and sought after areas for discovery. The client must understand its obligation to preserve ESI that may be located within all of the source modalities, and others particular to its business or industry.

Many clients are not fully aware that ESI is very hard to destroy or conceal and any efforts to conceal documents or intentionally or inadvertently fail to produce ESI which is relevant or which may lead to the discovery of admissible evidence, will likely be uncovered through electronic discovery. Where the amount in dispute justifies the expenditures to uncover additional material ESI, these considerations are often paramount.

Once the identification of the potential location of relevant ESI has been determined, the documents must be retrieved and reviewed before the ESI is analyzed and made ready to be produced at a later date or produced as part of the litigation discovery process. A determination will need to be made whether retrieval will be accomplished in-house or by an outside vendor. These are considerations that will be addressed at a later time.

Courts are beginning to come down hard on counsel and awarding significant sanctions for either indirectly aiding the client in the failure to preserve ESI and even for failure to adequately advise clients of their obligations to preserve ESI in anticipation of litigation. These considerations, amongst others which will be discussed in future editions of the Advocate, should be considered at the inception of any engagement where ESI will be relevant to the pertinent factual and legal issues in dispute. 

THE ADVOCATE 

AN ONLINE NEWSLETTER OF THE SOUTH PALM BEACH COUNTY BAR ASSOCIATION

SPRING 2015 

p. 35-36

 Technology is critical to obtaining, collecting, analyzing, sorting, searching and delivering ESI. This in- cludes methods for analyzing metadata, and “tagging” data for categorized review. Understanding both data review and production concepts is critical.

Consideration must be given to whether ESI should be produced in native format or in some other format that also provides associated metadata. Metadata can be added to populate specified fields to aid in sorting and review.

After ESI has been obtained, it may be uploaded to a review platform. The ESI is subjected to optical character recognition (OCR), sorted, and made available for review. The data can then be searched, culled, tagged, and reviewed. A review of associated metadata may also be involved, given the parameters and liti- gation issues.

With some review platforms, key phrases, contextual groups, directory information and categories, and clusters can be specified and used to filter data. Issue coding or key phrase coding can also be performed. Specific categories of documents can therefore be identified.

A protocol should be implemented to ensure that reviewers categorize ESI pursuant to the same tagging procedures. A specific protocol and supervision ensures consistency.

SEARCHING, CATEGORIZATION AND PRODUCTION OF ESI

Searching by contextual groups can be a useful analytical tool. Email threads, including attachments to emails, are an example of a contextual group. Searching by directory information such as dates, names, email addresses, and other parameters can result in the production of a dataset that reflects interrelationships in a particular document group.

Category and cluster searching can also assist in the identification of material ESI. Category searches include searches by author, date created or modified, or other criteria. Clustering includes email and attachments, or groups of document types that are related.

Visualization tools also assist with understanding categorized ESI. Visualizations use a social network analysis, a context group structure analysis, or a topical cluster analysis. Social networking analysis maps the relationships between people, groups, and organizations and visually demonstrates the flow of information between these groups. Context group analysis looks at a context group such as an email thread, and maps the flow of information between the senders and recipients in a visual fashion. 

Cluster analysis visually identifies relationships typically based on keywords or phrases. Based on the volume of materials identified, the re- searcher may decide the analysis should proceed further to investigate a particular group of documents. Bar graphs may identify a word, a date, or other cate- gory across a document group which focuses the initial inquiry on the area that seem to have the greatest potential for productive discovery.

An analysis strategy using available tools can enhance understanding of a particular case. Under the current landscape, attorneys need to know about ESI platform review tools in most circumstances to enhance the ability to rapidly address what is or is not relevant to a particular case. Failure to use available techniques can result in the inadvertent production of too much, irrelevant or privileged or confidential information. In some circumstances, the lack of understanding of the tools will comprise the ability to understand and review critical data. Knowledge of ESI techniques is becoming mandatory for attorneys in many states, and could well be required in Florida in the near future. Competency in some areas of practice may already require such fluency.

Having completed the analysis and culling of documents, ESI will be ready for production. In advance of production, certain redactions may be appropriate or required. The documents will general also be electron- ically numerically tagged for identification. In the old days, this was done by "bates stamping".

Now this task is handled electronically. The above techniques can also be utilized to further analyze and segment documents produced by an opponent.

CLAWBACK AGREEMENTS

Even with sophisticated tools, and methods, the volume of ESI typically reviewed heightens the risk of inadvertent disclosure of privileged documents. There- fore, at the outset a written clawback agreement should be utilized to protect all parties. Ideally this issue will be addressed at an initial meet and confer conference and an appropriate clawback agreement executed, and ordered by the court, where necessary or required.

FORMAT

In addition, the methods and forms of production must be addressed. Under Florida Rules of Civil Procedure 1.350 and Rule 34 of the Federal Rules of Civil Proce- dure, the requesting party may specify the desired form or forms of production for identified categories of in- formation. Generally, if the party fails to make such a request, the information must still be produced in a form or forms in which it is ordinarily maintained or is reasonably usable.

Most documents are either provided in native format, TIFF or PDF, or a combination of formats. PST (Outlook) files and text messages are now also becoming common. The process of producing electronically stored information is time consuming and the parties should attempt to negotiate reasonable production schedules often with rolling production where appropriate.

Use of a third-party vendor to host data, provide a re- view platform, and to make the ESI available, either by export or at a "cloud" based location, should be considered. While there are significant charges involved (and these should be considered carefully), use of a third party to handle ESI, can reduce costs, relieve use of personnel, and provide for a clear chain of custody, and other considerations. Also, the cost can be apportioned among several parties. Use of search tools may also provide a level of consistency in working with the ESI, which may facilitate collaboration. There are also tools now available that can be used in smaller matters. 

EDiscovery technology is no longer solely the prov- ince of large firms or Fortune 500 companies, and their counsel. Parties should monitor costs carefully, and not necessarily accept a particular vendor's cost struc- ture where the costs appear excessive relative to the actual value of the storage and platform services pro- vided. Fortunately, as the legal profession has adapted to the reality of the electronic workplace, costs have come down both because of the business economics, and the demands and increasing sophistication of the marketplace.

Available technologies should be considered to analyze ESI, and to identify discoverable and producible information. Through the use of available technology, litigants and their counsel can successfully and cost- effectively manage the large volume of data that today exists only in electronic format.

THE ADVOCATE 

AN ONLINE NEWSLETTER OF THE SOUTH PALM BEACH COUNTY BAR ASSOCIATION

JANUARY 2015

Generally, information about the opinions of a consulting-only expert is not discoverable. Thus, there are no discovery tools that can be used to secure information about them. See Fla. R. Civ. P. 1.280(b)(4); Fed. Civ. P. 26(b)(4)(D); Edwards v. Humana of Florida, Inc., 569 So.2d 1315 (Fla. 5th DCA 1990); USM Corp. v. American Aerosols, Inc., 631 F.2d 420, 424 (6th Cir. 1980); Ager v. Jane C. Stormont Hosp. & Training Sch. for Nurses, 622 F.2d 496, 503 (10th Cir. 1980); Cooper v. Meridian Yachts, Ltd., 06-61630-CIV (S.D. Fla. 2006). Florida case law and rules on these issues are very similar to their Federal counterparts. 

A consulting expert is an expert who has been consulted, retained or specially employed by a party in anticipation of litigation or to prepare for trial, but who will not testify at trial. See Fed. R. Civ. P. 26 (b)(4)(D); Ager v. Jane C. Stormont Hosp. & Training Sch. for Nurses, 622 F.2d 496, 500 (10th Cir. 1980); see also Hermsdorfer v. American Motors Corp, 96 F.R.D. 13, 15 (W.D.N.Y. 1982). Both Fla. R. Civ. P. 1.280(b)(4) and Fed. R. Civ. P. 26 (b)(4)(D) protect experts hired for the dual purpose of preparing for pending litigation and for litigation expected on the basis of logical probability. Consulting experts are usually consulted to educate the attorney about the whole case or some facet of it, who and what kind of trial experts should be consulted and retained, how best to present evidence to the court or jury or to discover, compile and assimilate data for a testifying expert. Bergeson v. Dilworth, 132 F.R.D. 277, 284 (D. Kan. 1990), vacated on other grounds, 749 F.Supp. 1555 (D. Kan. 1990). 

Parties often hire consulting experts to assist them in preparing their testifying experts for trial. Under Rule 1.280(b)(4) and (5)(B) of the Florida Rules and Rule 26(b)(4)(B) of the Federal Rules, it is difficult, but not impossible, to gain access to the work of a consulting expert. Although very limited, it is possible in certain circumstances to discover the opinion of a consulting expert. 

Both the Federal and Florida rules are designed to prevent one party from taking ad-vantage of the other party’s investigative work. But the Federal Rules Advisory Committee made clear that the protections provided by the Fed. R. Civ. P. 26(b)(4) are not based upon the attorney work product privilege. See Notes of the Advisory Committee (1970).

When is an expert a consulting expert? 

A consulting-only expert is generally an expert (1) who has no firsthand factual knowledge about the case and no secondhand knowledge except for knowledge acquired through the consultation, and (2) whose work product, opinions or mental impressions have not been reviewed by a testifying expert. See Fla. R. Civ. P. 1.280(b)(4); Fla. R. Civ. P. 26(b)(4)(D); Delcastor, Inc. v. Vail Assocs., 108 F.R.D. 405, 408 (D.Colo.1985); Heitmann v. Concrete Pipe Mach., 978 F.R.D. 740, 742-43 (E.D.Mo. 1983); House v. Combined, Inc., 168 F.R.D. 236, 245 (N.D. Iowa 1996). Under Fla. R. Civ. P. 1.280(b)(4) and (5)(B) and Fed. R. Civ. P. 26(b)(4), a party generally has a “free consultation privilege” for experts who were consulted but never designated. A con-cern may be that examination of “physical evidence,” i.e., medical charts, and notes, may subject this non-testifying expert to examina-tion. However, most courts discuss the lack of communication with the testifying expert as the key feature in determining whether non-testifying consultants are subject to discovery. 

A consulting expert is “retained or specifically employed...in anticipation of litigation or prep-aration for trial and who is not expected to be called as a witness at trial.” See Fla. R. Civ. P. 1.280(5)(B) and Fed. R. Civ. P. 26(b)(4)(B)(ii). Fed. R. Civ. P. 26(b)(4)(B) “precludes discovery against experts who were informally consulted in preparation for trial, but not re-tained or specifically employed.” See Federal Rules Advisory Committee Notes; see also USM v. American, 631 F.2d 420 (6th Cir. 1980) (defendant could not discover letter written by expert informally consulted but not retained by plaintiff); Ager v. Jane C. Stor-mont Hosp. & Training Sch. for Nurses, 622 F.2d 496, 500 (10th Cir. 1980). The rule may not apply to witnesses consulted by non-parties. Awkwright v. National, 148 F.R.D. 552 (S.D.W.Va. 1993) (rule does not protect work done by expert witnesses who consulted with a third party). 

Medical examiners and treating physicians may not be considered consulting experts.

 In Harasimowicz v. McAllister, 78 F.R.D. 319 (E.D. Pa. 1978), a civil rights action, plaintiff sought to take the deposition of the medical examiner for Philadelphia who had done an autopsy on the decedent. The medical examiner’s work was not protected by the Rule be-cause he was not an expert under this analysis. The autopsy was a routine job duty of the medical examiner. Thus, he did “not obtain or develop the information in anticipation of liti-gation or trial.” Id. at 320. See also Jones v. Celebration Cruise Operator, Inc., No. 11-61308 (S.D. Fla. 2012 (consulting expert be-came treating physician subject to discovery and sole opinion on need for surgery under exceptional circumstances warranted discov-ery)); Congrove v. St. Louis-San, 77 F.R.D.503 (W.D.Mo. 1978) (treating physi-cian subject to ordinary discovery). See also Fla. R. Civ. P. 1.360 concerning examining experts. 

Where a party claims that its employee is a consulting expert, courts have required the party to show that at the time the materials were prepared there was “more than a remote possibility of litigation.” Fox v. Cal. Sierra, 120 F.R.D. 520 (N.D.Cal. 1988). The rule does not apply to ordinary employees. In re Sinking of Barge, 92 F.R.D. 486 (S.D. Tex. 1981). Where work was done to assist litigation and for ordinary business purposes, “the privilege is available only if the primary motivating purpose behind the creation of [the materials] was to assist in pending or impending litigation.” U.S. v. Gulf Oil, 760 F.2d 292 (Temp.emer.ct.app. 1985); McEwen v. Digitran, 155 F.R.D.678 (D.Ut. 1994) (no protec-tion where accountant’s reports were prepared primarily for the preparation of the company’s financial statements). 

A fact witness who is later retained as an ex-pert or who is later asked to give opinion testimony is not immune from discovery. The Notes caution:

the [Rule] does not address itself to the expert whose information was not acquired in preparation for trial but rather because he was an actor or viewer with respect to transac-tions or occurrences that are part of the subject matter of the lawsuit. Such an expert should be treated as an ordinary witness. 

A person who witnesses an event and is later retained as an expert, will be considered a fact witness. Because the person is a fact witness, personal knowledge is subject to discovery. As one court explained, “the relevant distinc-tion is not between fact and opinion testimony but between those witnesses whose infor-mation was obtained in the normal course of business and those who were hired to make an evaluation in connection with expected litiga-tion.” Chiquita Int’l Ltd. v. M/V Bolero Reef-er, 1994 WL 177785, *1 (S.D.N.Y. 1994). 

An example of a fact witness turned expert occurred in Silman v. Aetna, 990 F.2d 1063 (8th Cir. 1993). In Silman, a fire destroyed plaintiffs’ painting business but the defendant insurer denied coverage and asserted that the plaintiffs set the fire. Plaintiff prevailed at trial. On appeal, the insurer argued error in allowing plaintiff to offer testimony concerning the cause of the fire from the local fire chief. The fire chief had arrived on the scene twenty minutes after the fire started. Id. at 1068. At trial, defendant objected to the testimony on the ground that plaintiffs had not disclosed the fire chief as an expert witness in their discovery responses and that Fed. R. Civ. 35 should bar his testimony. Although the court agreed that the fire chief had given ex-pert testimony at trial, the court held that his testimony was properly admitted because he observed the fire. Moreover, the fire chief was not a consulting expert because both parties had copies of his statements and had equal access to him before trial. Id. Further, either party could have taken the deposition of the fire chief and asked what he believed caused the fire. See also United States v. The Hano-ver Insurance Company, No. 6:13-MC-42 (M.D. Fla. 2013) (expert’s role as testifying expert did not shield discovery information in role as consultant). 

Where a potential witness has first-hand factual information and also acted as a consulting expert, discovery has been restricted to factual knowledge, barring inquiry into consulting work. In Adams v. Shell, 134 F.R.D. 148 (E.D. La. 1990), defendant retained several employees to work with its attorneys in de-fending litigation arising from an oil refinery explosion. Because of the employees factual knowledge concerning the refinery’s activities, they could be deposed about facts known and opinions held prior to their retention as consulting expert. The rule, however, shields both facts and opinions known by a consulting ex-pert. See Grindell v. American, 108 F.R.D. 94 (W.D.N.Y. 1985) (work done by consulting expert retained to assist with litigation and to evaluate automobile for possible improvement was protected; court refused to allow a limited deposition into actual knowledge of the witness). 

EXCEPTIONS TO PRIVILEGE OF CONSULTING EXPERT 

Identifying relationship. 

A party may need to reveal its relationship with any consulting-only expert and provide a privilege log for any documents withheld that were generated as a result of the consultation. See Fed. R. Civ. P. 26(b)(5)(A); Eisai Co. v. Teva Pharms. USA, Inc, 247 F.R.D. 440, 442 (D.N.J. 2007); Queen’s Univ. v. Kinedyne Corp., 161 F.R.D. 443, 446-47 (D. Kan. 1995). The courts disagree over the requisite showing for the requesting party to obtain access to the consulting-only expert’s identity. See In re Welding Fume Prods. Liab. Litig., 534 F.Supp.2d 761, 767 (N.D. Ohio 2008). Com-pare Eisai Co., 247 F.R.D. at 442 (consulting only expert’s identity can be obtained on simple showing of relevance) and Baki v. B.F. Diamond Constr. Co., 71 F.R.D. 179, 182 (D.Md. 1976) (consulting–only expert’s iden-tity can be obtained without showing of excep-tional circumstances), with Ager, 622 F.2d at 503 (consulting-only expert’s identity can be obtained on showing of exceptional circum-stances, and In re Sinking of Barge “Ranger 1,” 92 F.R.D. 486, 488 (S.D. Tex. 1981)(same). 

Discovery for Consulting Expert based upon “Exceptional Circumstances.” 

Even if the protective rule applies, it is possi-ble to discover the work product and opinions of a consulting expert upon a showing of “exceptional circumstances.” Fla. R. Civ. P. 1.280(b)(4)(B); Fed. R. Civ. P. 26(b)(4)(D). A party attempting to make such a showing bears a “heavy” burden. See Hartford Fire v. Pure Air, 154 F.R.D. 202 (N.D.Ind. 1993). Excep-tional circumstances are present where the other party lacks the ability to discover equiva-lent information by other means. Id. at 208. The mere fact that information known by a consulting expert would be helpful to the mov-ing party’s expert is, of course, insufficient to show exceptional circumstances. Santos v. Rando, 171 F.R.D. 19 (D.R.I. 1993); see also KMart Corp. v. Sundmacher, 997 So.2d 1158 (Fla. 3d DCA 2008); Cooper v. Meridian Yachts, Ltd., 2008 WL 2229553 (S.D. Fla. 2008). 

Exceptional circumstances are present where one party’s experts cannot duplicate a test or an observation by a consulting expert. For example, in Sanborn v. Kaiser, 45 F.R.D. 465 (E.D. Ky. 1968), plaintiff claimed that defendant’s aluminum sewer pipe was defective. Plaintiff’s experts were present and took photographs when the pipe was removed and replaced. Plaintiff, however, denied access to defendant’s experts. Defendant was entitled to plaintiff’s consulting experts’ reports and photographs because the information could not be obtained by defendant’s experts. See Delcas-tor v. Vail, 108 F.R.D. 405 (D.Colo. 1985) (compelling deposition of consulting expert who investigated a mud slide in part because conditions at the site had changed); Cooper v. Meridian Yachts, Ltd. (S.D. Fla. 2008) (changed product condition constituted excep-tional circumstances). 

Florida courts have even held that the identi-ties of non-testifying experts are not subject to discovery without a showing of exceptional circumstances. Muldrow v. Slate, 787 So.2d 159, 160 (Fla. 2d DCA 2001); Lift Systems, Inc. v. Costco Wholesale Corp., 636 So. 2d 569 (Fla. 3d DCA 1994); see also In re: Weld-ing Time Products Liability Litigation, 534 F. Supp. 2d 761, 767 (N.D. Ohio 2008) (discussing conflicting view on this issue in federal courts). 

A party may also obtain access to a consult-ant’s work where a testifying expert relies on it in forming his opinions. Heitmann v. Concrete Pipe, 98 F.R.D. 740 (E.D.Mo. 1983) (testifying expert relied on consulting expert’s report); Delcastor, 108 F.R.D. at 408 (testifying expert relied on the report of the consulting expert who had the first opportunity to observe conditions after a mudslide). However, if the testifying expert does not consider the work of the consulting expert it is protect-ed. In Dominguez v. Syntex, 149 F.R.D. 158, 161 (S.D. Ind. 1993), consulting experts examined plaintiff and prepared records. Where plaintiff’s testifying expert stated that he read the records but did not consider them in form-ing his opinion, the court denied defendant’s motion to compel production of the records. The court also noted that defendant could ob-tain the substantial equivalent by doing its own examination. 

In Spearman Industries, Inc. v. St. Paul Fire and Marine Insurance Company, 128 F. Supp. 2d 1148 (N.D. Ill. 2001) the court considered whether certain testimony by an appraiser was covered by the protective rule, and therefore inadmissible. In this instance, the coverage case, the plaintiff insured claimed that its roof was damaged by a winter storm. The defendant contended that the roof was damaged by ordinary wear and tear and thus not covered. The appraiser appraised the damage to the roof. The court found that the appraiser was a non-testifying expert “consulted in anticipation of litigation or preparation for trial.” The defendant was unable to show “exceptional circumstances.” The court stated: “Defendant had ample opportunity to conduct whatever investigation it desired, and the site was inspected by [two consultants hired by defendant].” Thus, the court granted the Plaintiff’s motion in limine to exclude the work and opinions of its consulting expert. The court did note, however, that “any opinions or records developed or acquired by [the appraiser] prior to consultation by plaintiff fall outside the protection of Rule 26(b)(4)(B).

But courts are reluctant to deny discovery of fact witnesses disguised as experts. In Portis v. City of Chicago, 02 C 3139 (N.D. Ill. 2005) the plaintiffs hired a computer consultant to develop a database supporting the denial of due process claims. The court found that be-cause the computer database was an important piece of evidence in the case and because the consultant was “undispably the person most knowledgeable about the database and its crea-tion, what information went into the database, how the data was input, what procedures were followed to ensure accuracy,” the City could take his deposition. However, the Court lim-ited the deposition to the creation of the database and the accuracy of the methodology. 

Redesignation of testifying expert as consultng expert. 

In Netjumper Software, LLC v. Google, Inc., M19-138, (S.D.N.Y. 2005), the District Court permitted the plaintiff to redesignate a testifying expert as a consulting expert because the expert had not yet been deposed. See also Ross v. Burlington Northern Railroad Co., 136 F.R.D. 638 (N.D. Ill. 1991) (reclassification of expert as non-testifying where the expert was not deposed). These cases show that it may be possible to avoid disaster where a testifying expert develops an opinion that is inconsistent with the theory of the case of the party that disclosed him. But see Bradley v. Cooper Tire, (D.N.H. 2007) (motion to quash denied where the expert produced a report); see also Plymouth Corp. v. Air Technology Solutions, Inc., 243 F.R.D. 139 (D. N.J. 2007) (conversion of testifying expert to consulting expert insulates that expert from discovery absent exceptional circumstances); Florida Courts generally follow the rule that withdrawn testifying experts are shielded from discovery. See, e.g., Forman v. Fink, 646 So.2d 236 (Fla. 3d DCA 1994) approved 672 So.2d 34 (Fla. 1996); Morang v. Tracy, 604 So.2d 15 (Fla. 4th DCA 1992); Wackenhut Corp. v. Crant-Heisz Enterprises, Inc., 451 So.2d 900 (Fla. 2d DCA 1984).

Discovery tools.

Because no information about a consulting–only expert is generally discoverable, formal or informal discovery tools are generally unavailable. See Durflinger v. Artiles, 727 F.2d 888, 891 (10th Cir. 1984) (party cannot circumvent discovery rules by contacting consulting expert directly and requesting report). However, if a party establishes exceptional circumstances under Fla. R. Civ. P. 1.280(b)(4) or Fed. R. Civ. P. 26(b)(4)(D)(ii), limited discovery of the expert using interrogatories, and depositions may be conducted. Fla. R. Civ. P. 1.280(h)(4); Fed. R. Civ. P. 26(b)(4)(D). The discovery will probably be limited to facts known and opinions held by the expert and any reports or notes generated by the expert. See Disidore, 196 F.R.D. at 418; see, e.g., Braun v. Lorillard Inc., 84 F.3d 230, 235-36 (7th Cir. 1996) (finding exceptional circumstances, court granted the defendant’s request to produce the plaintiff’s expert’s test results).

Conclusion

Fla. R. Civ. P. 1.280(b)(4) and Fed. R. Civ. P. 26 shield consulting experts from discovery. To obtain the protection of the Florida and Federal Rules a litigant must show that the potential witness was, in fact, a consulting expert. If that showing is made, it is only possible to discover the consultant’s opinions upon a showing of “exceptional circumstances.” Exceptional circumstances can generally only be shown where the work or analysis of the consulting expert cannot be repeated by another expert because conditions have changed or where there are no other experts in the field. This is a very heavy burden and those attempting to do so will not often succeed. The discovery of consulting experts and their role is often an important consideration where litigation is anticipated and experts become critical to analysis of the Client’s risk and exposure. At this stage it may be important for counsel to closely consider and monitor the information provided to consulting experts and potentially avoiding communications with those who may testify if disclosures may prove problematic. This can be difficult to determine early on so prudence should prevail in the communication process.

THE ADVOCATE

Summer 2014

p.11

 By: Mark R. Osherow, Esq. 

LinkedIn is a social networking site principally used by business professionals. Users "connect" with other professionals and become part of their public or private database of contacts within the site. These contacts can be useful for various business purposes, including referrals and introductions to others within the contact network. But who owns these contacts? This can certainly be the subject of debate and may well be a consideration that employers and employees may want to address. 

Currently, there are limited definitive answers, but it can be important to be aware of the issues and to address them either in an employee manual, company policy, or through a specific written agreement with certain employees. Of course, doing so is not a fail-safe avenue to avoid disputes, but addressing these issues succinctly and specifically may well help avoid disputes later or at least provide a framework for addressing these inevitable issues when they arise. 

The LinkedIn user agreement clearly states that contacts are the property of the registered site user. This would suggest that the contacts are the property of the employee. But what if the contacts are acquired as a result of the employee's specific business relationships with the employer's business partners, clients and contacts? This can become a murky area, particularly where the employee and employer have entered into a non-competition and nonsolicitation agreement in connection with the employment. The analysis can become more complex when the employee brings a contact database into the relationship, particularly where those contacts overlap with the employer's business contacts, vendors, customers, clients, and referral sources. 

Further adding to the analysis, are those situations where the employer specifically requires the employee to set up a LinkedIn or other online social networking account, for the benefit of the employer's business. The employer may also require control of the employee's password and other site access information (which may or may not violate the site user agreement). The employee may also maintain a "personal" account which is likely to overlap with the employer-mandated account. These accounts may be merged as well, further intertwining the issue of the employee's personal contacts and those acquired during and as a result of the employment relationship. 

Most employment agreements, personnel manuals and employer policies inadequately handle these types of issues, and are mostly silent on how these contact databases are to be handled both during and at the conclusion of the employment relationship. While noncompetition and non-solicitation agreements are common, they overwhelmingly do not specifically address social networking contacts, their use, deletion, and most important their ownership at the conclusion of the employment relationship. Existing typical nonsolicitation and non-competition agreements do not adequately address these issues. 

The issues are even more unsettled where there is no agreement at all. In these situations, the employer can claim ownership of some or all of the contact database, while the employee claims ownership of some or all of the contacts as pre-existing the employment relationship or acquired outside of that relationship altogether. These are the types of issues that are at the forefront now that social networking has expanded and entered the workplace to such a significant degree. 

While social networking can enhance the development of business relationships and should be encouraged in many settings, both employers and employees need to address the implications of utilizing business social networking sites such as LinkedIn so that the parameters are defined and to avoid costly conflicts that can arise from later disputes about ownership of the contact lists maintained in these sites. 

Advocate

Fall 2013 p14
by Mark R. Osherow, Esq

With the ongoing proliferation of the use of metatags and keyword tags to market various business interests through the Internet, risks of trademark infringement and interference with competitive advantages have also increased. The use of metatags and keyword tags must therefore be undertaken carefully so as not to potentially infringe another business's ownership over its trade names and trademarks, based upon registration or prior use. Indeed, businesses must be ever vigilant to protect

themselves from the unauthorized use of their names and marks by unscrupulous competitors seeking to obtain a business advantage, to which they may otherwise not be entitled.

The issues often involve a court's consideration of computer code (usually in the form of metatags, keywords, or keyword tags) that the Internet user does not see on-screen, but that provides more favorable placement on a search result list for a plaintiff’s product or service, or that activates a pop-up advertisement for the competitor’s product or service. Metatags are hidden words that are used within the hypertext mark-up language (HTML computer code) that is used to program and compose a webpage.

But does the use of  another's trademarks and trade names in metatags and keyword tags such as those used through Google’s AdWords program1 and through similar Internet advertising and

search engine vehicles, involve actionable activity for which both the potential violator and the owner must be vigilant or face potential litigation on the one hand or loss of business on the other? Although there is authority on both sides, the courts have begun to shape the law in this area overwhelmingly

coming down in favor of enforcement under the Lanham Act, the federal enforcement mechanism for trademarks, although a case by case assessment is required, focusing principally upon the “initial interest confusion doctrine,” to find that there is a violation of the Act through “use” in the stream of commerce. 

In the often cited Brookfield Communications case2 the court upheld initial interest confusion based upon the use of another’s trademarks in metatags. In rendering this finding, the court looked not at the actual direct visible use or publication of the trademark by a competitor to the public but at the increased likelihood that the web user would be directed to the competitor’s web site (due to unauthorized use of hidden metatags or keywords) and might actually choose to do business with the competitor based upon convenience, rather than the goodwill created by the plaintiff’s mark.

In construing these issues, the courts have considered whether these modalities constitute “use in commerce” under the Lanham Act which provides federal trademark protection. The prevailing

view outside of the Second Circuit is based upon the conclusion that sponsored linking (which did not exist when the Lanham Act was created) entails the type of “use” of the plaintiff’s mark contemplated by the Act as part of an advertising mechanism, and therefore is precluded.3 The concern in the cyberspace context is that potential customers of one website are intentionally diverted through

the use of metatags utilizing the protected trademarks of a competitor, resulting in the potential customer believing that the website to which the potential customer is diverted is associated with the business for which the consumer was in fact searching.4

The relevant portion of the Lanham Act

provides that

(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, symbol, or device, or any combination thereof, or any false designation of origin, of false or misleading description of fact, or false or misleading representation of fact which (A)

is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association of such person with another person, or as to the origin, sponsorship, or approval of his goods, services or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person

who believes that he or she is likely to be damaged by such act.

The affirmative use of another’s mark as a metatag or keyword tag causes the potential for bringing customers to the infringer’s web site, but for the use of another’s mark, and even if the customers

later realize the confusion. Nevertheless, in finding that the use of another’s trademarks in metatags under the initial confusion doctrine, courts often apply an eight factor inquiry, including (1) the strength of the plaintiff’s mark; (2) the interrelatedness of the goods or services; (3) the similarity

of the marks; (4) evidence of actual confusion (or initial-interest confusion in this context); (5) marketing channels utilized; (6) likely degree of purchaser care;  (7) the defendant’s intent in selecting the mark; and (8) likelihood of expansion of product lines.5 

These factors are significant in the court’s evaluation of whether the mark is valid, incontestable and at least somewhat distinctive, resulting in likely confusion; whether the products of the parties are direct competitors; whether initial interest confusion is likely; whether the parties both use the Internet to market their products or services; whether purchaser care is minimally significant; whether there is at least circumstantial evidence that the infringer knew of the infringed-upon mark when it was utilized by the defendant; and whether there is little significance to product line expansion. Indeed, additional defensive arguments of “fair use” may be refuted where the use of another’s metatags (or keywords) is not in good faith but was utilized in a “bait-and switch sense” and to create what has become

known as “initial interest confusion,” and sometimes “initial source confusion.”

While the vast majority of the federal circuits that have addressed these types of issues have found violations of the Lanham Act based upon the initial interest confusion doctrine, the courts in the Second Circuit have held fast to a strikingly adverse approach finding no basis for a Lanham Act violation. In the 1-800 Contacts case6, which has been followed closely in the Second Circuit, the court

unequivocally ruled that since “use” within the meaning of the Lanham Act must be determined as a threshold matter, the plaintiff’s trademark violation claim failed. Thus, the court in 1-800 Contacts

determined, contrary to the other circuits addressing the issue, that without actual display or actual publication of the allegedly volatile trademark to the consumer there could be no violation of the Lanham Act, resulting in a finding that even where there is initial source or interest confusion,

there can be no trademark infringement under the Lanham Act.

In Site Pro-17, following 1-800 Contacts, while acknowledging that many of the circuits had sustained such claims, the court ruled that placing a competitor’s trademark in the metadata or keyword tags

of its website or improperly including the plaintiff’s trademark in a search engine algorithm was not trademark infringement under the Lanham Act. The court ruled that the use of the trademark in this way was not utilizing another’s trademark in a way that indicates source or origin, for Lanham Act purposes. Accordingly, the Site Pro-1 court held that the allegedly violative uses of another’s marks in these manners was not “use” within the meaning of the Lanham Act, because of lack of actual publication of the infringed trademark to the consumer.

Thus the Site Pro-1 court essentially concluded that there could be no such "use" for Lanham Act purposes without actual display of the trademark to the consumer. Indeed, the court rejected the

“initial source confusion” doctrine, back to Brookfield Communications and all subsequent

cases following Brookfield Communications, based upon 1-800 Contacts. While this author believes this narrow construction fails to account for the actual conduct of the violators in the modern

Internet age, the position advanced by the Second Circuit is still of concern in its application since the Supreme Court has yet to rule on the issue. Indeed, should the Supreme Court decide not to hear the issue should it be presented in the future, that would seem to be a strong endorsement for

the view repeatedly asserted outside of the Second Circuit, including by Florida’s

federal courts8.

____________________

1. See, e.g., J.G. Wentworth, S.S.C. Limited Partnership v. Settlement Funding LLC, 2007 WL 30115, *2 ( E.D. Pa. 2007 (“ Google’s AdWords Program is a keyword-triggered advertising program that generates the Sponsored Links section of the Search-results screen. Advertisers participating in the AdWord Program purchase or bid on certain keywords paying Google for the right to have links to their websites displayed in the Sponsored Links section whenever an internet user clicks on a particular

Sponsored Link. Google charges a fee to the AdWords participant associated with that linked website. Businesses often participate in the AdWords program to generate more visits to their websites.”)

2. Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999). However, the decision in Playboy Enterprises, Inc. v. Calvin Designer Label, 985 F. Supp. 1220 (N.D. Cal. 1997) represents the first court decision to generally address the issue and grant injunctive relief for the violations.

3. Boston Duck Tours, LP v. Super Duck Tours, 527 F.Supp.2d 205, 207 (D. Mass. 2007); North Am. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211, 1216 n.2 (11th Cir. 2008) (metatags are “use in commerce” under plain meaning of Lanham Act, where they were used for purpose of effort to promote and advertise the defendant’s products on the Internet).

4. Bihari v. Gross, 119 F. Supp.2d 309 (S.D.N.Y. 2000).

5. Tdata Inc. v. Aircraft Technical Publishers, 411 F. Supp.2d 901 (S.D. Ohio 2006).

6. 1-800 Contacts, Inc. v. WhenU.com. Inc., 414 F.3d 400 (2d Cir. 2005).

7. Site Pro-1 v. Better Metal, LLC, 506 F. Supp.

2d 123 (E.D.N.Y. 2007).

8. See, e.g., North Am. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211 (11th Cir. 2008); Sound Surgical Technologies, LLC v. Rubenstein, 734 F.Supp.2d 1262 (M.D. Fla.  2010).

Advocate

OCTOBER 2015

p. 25-26

Clear and Unambiguous Exculpatory Clauses for Recreational Activities 

May Bar Negligence Claims, Despite No Express Reference to Negligence 

By Mark Osherow 

Forget what you thought you knew about the enforceability of an exculpatory clause. Many who practice in the general and business tort arena have understood that precedent and public policy pre-clude a party from obtaining a release for its own negligence, unless the release specifically, expressly, and unambiguously provides that negligence claims are barred by the release. But in Florida, that familiar view is no longer the law. A countervailing principle—that contracts expressing the parties’ intent should be enforced—has carried the day. 

In Sanislo v. Give Kids the World, Inc., 157 So. 3d 256 (Fla. 2015), the Florida Supreme Court ana-lyzed the various and differing approaches to the issue by courts across the country, and in a divided (4-3) decision, held that “the absence of the terms ‘negligence’ or ‘negligent acts’ in an exculpatory clause does not render the agreement per se ineffective to bar a negligence action.” That ruling thus disapproved decisions in the First, Second, Third and Fourth District Courts of Appeal. 

The facts of Sanislo are familiar, with parents willingly signing a release in order for their child to take part in an activity. In particular, the parents of a seriously ill child executed a form general re-lease in order to participate without charge in a “storybook” vacation at the defendant’s resort village, a facility designed for sick children and their families, operating in conjunction with the Make-a-Wish Foundation. The form released the sponsor Give Kids the World and its agents, etc., from “any liability whatsoever” for claims brought by the parents or their child, holding harmless and releasing the sponsor “from any and all physical or emotional injuries and/or damages which may happen to me/us. . . .” 

At the village, the Sanislos stepped on a pneumatic wheelchair lift on the back of a horse-drawn wag-on, to pose for a picture with the children, who were in the wagon. The lift collapsed due to weight overload, injuring Ms. Sanislo. The Sanislos sued, claiming her injuries were caused by Give Kids the World’s negligence. The parties filed cross motions for summary judgment on the enforceability of the release, and the Osceola County trial court granted the Sanislos’ motion, finding the release unenforceable against a claim for negligence. At trial, the jury ruled in the plaintiffs’ favor, awarding damages and costs. 

On appeal, the Fifth District reversed, reasoning that exculpatory clauses are effective if the wording is clear and understandable so that an ordinary and knowledgeable person would know what he or she is contracting away. That view conflicted with all of the other four district courts of appeal, cre-ating inter-district conflict that conferred jurisdiction in the Supreme Court. Resolving the conflict, the Supreme Court approved the Fifth District’s minority position, thus altering the law in most of the state, and prompting a strongly worded dissent by three justices. 

The majority held that the indemnity contract principles relied upon by four district courts of appeal, arising from University Plaza Shopping Ctr., Inc. v. Stewart, 272 So. 2d 507, 509 (Fla. 1973), are not applicable to exculpatory clauses. The Court described the distinction on the basis that indemnity contracts are generally designed to reduce the risk of vicarious liability in arms-length transactions to a third-party rather than to shift the risk of injury depriving one of the parties of the right to recover damages suffered due to the negligent act of the other contracting party in an exculpatory agreement. 

The Court concluded, contrary to the four district courts of appeal that had previously held to the contrary, that University Plaza did not control because releasing a party from liability through an ex-culpatory clause does not result in the “underwriting of wrongful conduct or shift liability to an inno-cent party,” and therefore involves “less uncertainty than in an indemnification context.” The Court indicated its holding was justified on the basis of reluctance “to hold that all exculpatory clauses that are devoid of the terms ‘negligence’ or ‘negligent acts’ are ineffective to bar a negligence action despite otherwise clear and unambiguous language indicating an intent to be released of liability in such circumstances.” 

In dissent, Justice Lewis (joined by Justices Pariente and Quince) stressed that the majority’s decision “leaves our most vulnerable citizens open to catastrophe from those who seek to shield themselves from their own fault.” The dissenters would have preferred a requirement for an explicit provision stating that a party would be released and held harmless for liability for its own negligence, to ensure that those signing the agreement would be fully informed. 

The majority tempered its decision by stressing that its holding “is not intended to render general lan-guage of a release of liability per se effective to bar negligence actions.” And, the Court acknowl-edged that exculpatory contracts are “disfavored in the law because they relieve one party of the obli-gation to use due care,” leaving open the door to challenging language in exculpatory clauses that is not as all-encompassing as that in Sanislo. Nevertheless, Sanislo is a substantial departure from pre-vailing Florida law, before this decision. 

Sanislo stands as an important victory for businesses that require releases before allowing parties to engage in sporting and recreational activities. Yet, the decision suggests that exculpatory agreements will continue to be closely scrutinized by Florida’s courts.