Do you Have an Antitrust Claim?

By Craig LaChance

Monopoly man and Mr. BurnsMost people have, at best, only a vague understanding of antitrust law. They know it has something to do with monopolies and competition.[1] Perhaps they recall something about antitrust from an American history course—e.g., Standard Oil, 19th century railroad conglomerations, trust-busting politicians. Occasionally, one hears of antitrust in the news when the Justice Department nixes a merger of say, airlines or cable companies. The general perception is that antitrust seeks to keep companies from getting too big and driving smaller firms out of business. This was, in fact, the intent when Congress enacted the first antitrust laws in 1890. But things have changed in the intervening century. Size, market share — indeed, even predatory business practices — are no longer determinative in an antitrust case. Just because a large company has tried to drive a smaller competitor out of business — i.e., to exclude the competitor from the market — may not mean the company has violated the antitrust laws. Exclusionary conduct is a necessary but not a sufficient condition of an antitrust claim. In addition to exclusionary behavior, an antitrust claimant must prove, above all else, that the behavior harmed consumers.

Consumer welfare has always had some role in antitrust policy. Initially, however, it was a bit player. As historian Richard Hofstadter has noted, when Congress first enacted antitrust legislation it had three goals in mind.[2] The first was economic. Classical economic theory held that competition produces the maximum amount of economic efficiency, so antitrust policy sought to ensure a competitive — that is, lots of players — market. The second goal was political. Huge concentrations of wealth and power were viewed as a threat to democratic government.[3] Corporations had grown so big so fast many feared business could become more powerful than civil government. Antitrust’s third goal was social and moral. Competition was believed to engender discipline. The American character had been “forged by competitive individualism.”[4] To foster this discipline, Congress needed to ensure the game was not rigged.
220px-I_Like_a_Little_Competition
But as time went on, two of those goals — political and moral — fell by the wayside. Corporations, of course, continued to grow and continued to exert political influence. Yet by the middle of the 20 Century, the public was less concerned about size. The initial shock over the power and size of big business wore off. What’s more, what “really made bigness palatable more than anything else is the remarkable performance of the economy since the beginning of the Second World War.”[5] Likewise, the notion that American character required the discipline of entrepreneurial individualism lost salience. Acquiring specialized skills and advancement through a bureaucratic career, often in a big corporation, became the ideal.[6]

This left only antitrust’s economic goal, but even the nature of that goal changed. The initial meaning of this economic goal was confused, but the general notion was that competition meant a market with a lot of players. The more rivals, the more competitive the market. Thus, in a sense, antitrust policy sought to ensure that the market had a certain number of competitors. But as economists studied antitrust policy, they came to believe that the number of competitors did not necessarily mean more efficiency. As two preeminent antitrust scholars put it: “A market with three sellers but an output of 100 units per day is more competitive than one with ten sellers but an output of 80 units per day.”[7] Thus, economists and judges reconceptualized competition in terms of consumer welfare. A market is competitive when it maximizes consumer welfare, that is, the market is characterized by low prices and high quality. Accordingly, the real goal of antitrust policy is to maximize consumer welfare.[8]

So what does this mean for the antitrust claimant? How does one bring an effective antitrust suit? A competitor’s size or market share alone will not cut it. Additionally, improper, even predatory, actions by themselves may not be enough. Just because you have been harmed by the acts of a competitor — i.e., lost market share — does not necessarily mean you have an antitrust claim (although you may have common law claims for unfair competition). The market is rough; firms lose business to more successful firms all the time. To assert an antitrust claim, a company must prove that a large competitor’s acts have actually harmed consumers. This means there must be proof that prices for a product have gone up, that quality has declined, that consumer preference has been thwarted. Absent this kind of evidence, an antitrust claim will likely falter.


Footnotes

[1] That the U.S. refers to this area of law as antitrust and not—like the rest of the world—as monopoly or competition law is an accident of history. Monopolies were particularly flagrant in late 19th century America. Richard Hofstadter, “What Happened to the Antitrust Movement,” in The Paranoid Style in American Politics and Other Essays, 195 (Harvard 1964). American business first colluded and combined by means of a simple common law trust. Instead of mergers, corporations in a particular industry would place shares of their businesses in a trust with a trustee managing the conglomeration. See Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles and Their Application, vol. I,  (Aspen 3d ed. 2006). Thus, to oppose this type of collusion was to be “anti-trust.”

[2]  Hofstadter, supra n.1 at 199.

[3]  See Louis D. Brandeis, Other People’s Money: and How the Bankers Use It (Martino 2009), which has a chapter entitled “The Curse of Bigness.” Brandeis’s views were common at the time. As his biographer writes, “ Brandeis opposed large businesses because he believe that great size, either in government or the private sector, posed dangers to democratic society and to individual opportunity.” Melvin I. Urofsky, Louis D. Brandeis A Life, 300 (Pantheon 2009).

[4]  Hofstadter, supra n.1 at 209.

[5] Id. at 215. Also, any worries about big business threatening government were likely offset by the simultaneous growth of government.

[6] Id. at 219.

[7] Areeda & Hovenkamp, supra n. 1, vol. I, ¶ 100, 3.

[8] Robert H. Bork, The Antitrust Paradox: A Policy at War With Itself, 427 (Free Press 1993).

Time Limitations in Restrictive Covenants for an Arizona Employment Contract

Employers often want to preclude former employees from going to work for competitors for a period of time after they part ways. They do so by including restrictions in an employment contract that the employee must sign as a condition of employment. While time restrictions are allowed, they must be carefully drafted.

“A restriction [in an employment contract] is unreasonable and thus will not be enforced: (1) if the restraint is greater than necessary to protect the employer’s legitimate interest; or (2) if that interest is outweighed by the hardship to the employee and the likely injury to the public.”1 “A restraint’s scope is defined by its duration and geographic area.”2 “The burden is on the employer to prove the extent of its protectable interests, and if it cannot, the entire covenant will be deemed unenforceable.”3

An employment contract will often contain a “step-down” provision in the time limitation. For example, “employee shall not engage in similar work for a period of 18 months after termination or, alternatively, if a court finds 18 months to be unreasonable, then for a period of 12 months after termination or, alternatively, if a court finds 12 months to be unreasonable, then for a period of 9 months after termination or, alternatively, if a court finds 9 months to be unreasonable, then for a period of 6 months after termination.”

A step-down provision like the one above is an acceptable way to limit time restrictions to a reasonable term because Arizona courts can use the “blue pencil rule” to eliminate unreasonable provisions from an otherwise enforceable employment contract. However, courts are specifically prohibited from adding terms or rewriting provisions.4 If a step-down provision exists in an employment contract, an Arizona court can strike out the unreasonable portions and leave in what it deems to be reasonable because the parties already agreed to such a time restriction.5

However, employers cannot get cute in the agreement and just say, “whatever a court deems reasonable is what we agree to.” That is an unenforceable time limitation because there is no agreement. In Varsity Gold, Inc. v. Porzio,6 the parties had a such a clause in their employment contract so the court tried to write-in what it thought were reasonable restrictions.7 The court of appeals reversed citing to Farber’s prohibition against a trial court adding to or modifying the parties’ employment contract.8 The blue-pencil rule only allows the court to eliminate unreasonable provisions; it does not allow a court to write-in provisions it believes are reasonable.

If you have questions about whether your employment contract is enforceable, contact one of the attorneys at BWG.


1 Valley Med. Specialists v. Farber, 194 Ariz. 363, 369, ¶ 20, 982 P.2d 1277, 1283 (1999).

2 Id. at 370, ¶ 25, 982 P.2d at 1284.

3 Compass Bank v. Hartley, 430 F.Supp. 2d 973, 979 (D. Ariz. 2006).

4 Farber, 194 Ariz. at 372, ¶ 31, 982 P.2d at 1286.

5 Compass Bank, 430 F.Supp. 2d at at 980–81.

6 202 Ariz. 355, 45 P.3d 352 (App. 2002).

7 Id. at 356–57, ¶¶ 4 and 7, 45 P.3d at 353–54.

8 Id. at 358–59, ¶¶ 16–17, 45 P.2d 355–56.

Should You Worry About the Rule Against Perpetuities?

Body Heat Movie PosterBy Craig LaChance

The 1981 film Body Heat is great for many reasons. It stars William Hurt, right at the beginning of his 80’s peak. The film also features Kathleen Turner in a smoldering debut. Body Heat was the directorial debut of Lawrence Kasdan fresh from serving as screenwriter for two iconic movies: The Empire Strikes Back and Raiders of the Lost Ark. The always awesome Mickey Rourke even makes an appearance as a jaded explosives expert! Watching the film is the cultural equivalent of eating an expensive designer cupcake; it has no nutritional value but is so well done you just don’t care. The plot is a slab of sleazy Florida noir, involving adultery, murder and a lot of sweating nubile bodies. What truly makes Body Heat unique, however, is that it is one of the only films—indeed, one of the few narrative fictions in any medium—in which the plot turns on the Rule Against Perpetuities.1

In the film, Turner plays conniving femme fatale Matty Walker. She seduces Hurt’s character, Ned Racine, a dim-witted sleazeball lawyer, and conspires with him to kill her rich, older husband played by Richard Crenna.2 Here is how one commentator describes Matty and Ned’s relationship:

Ned Racine was just the sort of two-bit, no-account (but aesthetically pleasing) lawyer that Matty Walker (Kathleen Turner in her steamy, lawyer-melting cinematic debut), the female lead in Body Heat, was looking for. Matty did not feel the need to go paging through the Martindale-Hubbell legal directory to look for a lawyer referral. Poised to commit the “perfect crime,” she clearly had criteria other than degrees, experience, and legal ability in mind when looking for appropriate legal representation. Nor did Matty keep these criteria all that well-hidden. “You’re not too smart, are you?” she asks Ned at one point in the film, “I like that in a man.”3

Before Matty can kill her husband, however, she needs to be sure she can get all his money. His will splits his estate between Matty and his niece. Undeterred, Matty steals stationary from Ned’s office and forges a second will that is almost identical to the first. The only difference is that the bequest to the niece is altered so that it violates the Rule Against Perpetuities. This is all revealed in amazing scene after the husband’s death, when lawyers explain the Rule Against Perpetuities and how the bequest to the niece fails and Matty ends up with all the money.

The Rule Against Perpetuities is perhaps the most notorious, misunderstood doctrine in American law. After learning the Rule once in their first year property class and then again when they study for the bar exam, most lawyers never devote another iota of intellectual energy to thinking about it. The Rule is confusing mess that invokes vestiges of English feudal law that seem to have little relevance in the modern world. The problem begins with the abstruse language of the rule: “No interest in property is valid unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.” Certainly not a model of clarity. The rule is further compounded by the interests involved. It is not concerned with the present interests in property but rather with interests that could arise in the future. Suppose A deeds property to B for life and then to C. B has a life estate in the property. C has a “remainder interest” in the property, which can only arise in the future, after B’s death. The Rule Against Perpetuities is concerned with this type of future interest. The Rule dictates that a future interest must vest—that is, it must belong to someone—within a certain period time, namely, 21 years after someone alive at the time the interest is created dies.4 If the interest does not vest, the transfer fails. This is enormously difficult to apply. In fact, it is so difficult the California Supreme Court once held it is not legal malpractice to draft a document that violates the Rule Against Perpetuities.5

While misunderstood and seemingly harsh, the Rule Against Perpetuities is actually well-intentioned. Its purpose is straightforward: to ensure that at some point, someone actually owns transferred property. In 17th Century England, the government imposed taxes on the transfer of land after the death of the owner. To avoid those taxes, owners would place their property in trust so their successors could live on the land for generations without actually owning it.6 (I suspect something like this is going on at Downton Abbey.) The property would be held in trust in perpetuity. The Rule was designed to end this practice, free up large concentrations of property and wealth, and make sure the deceased could not keep controlling property from the grave.

Knowing all this, is the Rule something that you need to worry about? Probably not. Most states have made some kind of effort to mitigate it effects. Some states have abolished the rule outright. Twenty Nine states, including all the ones in which I practice (Virginia, District of Columbia, Arizona) have all adopted the Uniform Statutory Rule Against Perpetuities.7 The Uniform Rule takes what is called a “wait-and-see” approach. Under this approach, a transfer is not invalidated if it does not vest with 21 year of a life in being. Instead, the Uniform Rule provides additional time—specifically, 90 years after creation of the interest—so that everyone can wait and see if the interest will actually vest. This effectively makes the Rule a chimera; a bizarre hypothetical for law students to worry about, but not something that is likely to affect you.


1 The 2011 film The Descendants, starring George Clooney, also implicates the Rule Against Perpetuities, but it is not as central to the plot.

2 Hell yeah! Colonel Trautman from the Rambo films!

3 John M. Burkoff, If God Wanted Lawyers to Fly, She Would Have Given Them Wings: Life, Lust & Legal Ethics in Body Heat, 22 Okla. City U. L. Rev. 187, 188 (1997).

4 Body Heat never reveals how the fake second will violates the Rule Against Perpetuities. UCLA professor Michael Asimov suspects the bequest to the niece “included a contingent remainder, where the contingency could not vest during the period of lives-in-being-plus-21-years.” Michael Asimov, Estate Planning and Body Heathttp://usf.usfca.edu/pj//articles/BogyHeat.htm (Jan. 1998).

5 Lucas v. Hamm, 364 P.2d 685 (Cal. 1961).

6 For a very good, brief description of the history of the Rule Against Perpetui
ties see Michael Pancheri, Rule Against Perpetuities, http://ezinearticles.com/?Rule-Against-Perpetuities&id=83339 (2005).

7 A summary of the Uniform Rule can be found at http://uniformlaws.org/ActSummary.aspx?title=Statutory+Rule+Against+Perpetuities. Interestingly, Florida has also adopted the Uniform Rule, so it is unlikely that the Body Heat ploy would work.

Theory and Practice in the Courtroom: Hearsay in Business Litigation

By Daryl Williams

Exclusion of hearsay in the courtroom is like a knee-jerk reaction by opposing counsel and a similarly quick response by the judge. “What did he say?” is a question opposing counsel and the judge will think calls for hearsay if the guy talking is not a party to the lawsuit. So, the trial lawyer thinks, he will recast the question to “What did you understand?” Is that not hearsay if the only way the understanding came was by listening to what that non-party individual said?

How about this: the president of a company fires a superintendent after he hears from various employees that this superintendent was speaking to others in a derogatory manner about customer employees and behaving in a manner that did not meet the standards of the company. The superintendent sues for wrongful termination so the company’s lawyer asks the president on the stand why he fired the superintendent. The reason the superintendent was fired, of course, is because the president believed what he heard about the superintendent.

Q. Why did you fire him?
A. Because I was not happy when I heard bad reports from a customer.
Q. Who?
A. Joe Schmow.
Q. What did Mr. Schmow tell you?
OBJECTION: Hearsay.

Is it hearsay? Can the president relate what he was told that formed the basis of his decision? After all, that is why he fired the superintendent.

Some judges are going to rule that this is blatant hearsay and inadmissible, but others are going to let it in. Moreover, the courts ruling will be affected by—this is human nature—the court’s view of the case. The judge, even one on the bench for fifteen years, may disregard the technicalities of the hearsay rule if it suits him, the following is an actual transcript:

BY COUNSEL: Well, your Honor, again, we’re not using any of this evidence for the truth of the matter, other than this is the truth of the basis upon which we made a decision, which is not a hearsay problem.
THE COURT: All right. You can try to say that out loud to the jury if you want, but I’m going to laugh when you say that to me. You can split that hair and have somebody actually make that mental gymnastic leap. Good luck. I understand the damage that it does . . . .

The question, then, becomes how the lawyer educates or confuses the judge as to the nature of hearsay. Not being prepared for this type of nuance can be the difference between winning and losing. The trial lawyer has to remember that the trial judge does not try very many commercial cases, and those that he does try usually do not involve this sort of nuanced issue.

Lost and Abandoned Personal Property Overview

By Craig LaChance

I’ll admit it: I’m a fan of A&E’s preposterous reality show Storage Wars. The show’s own description revels in its absurdity: “‘Storage Wars’. . . follows teams of bidders looking to score it big in the high stakes world of storage auctions.” Basically, the show chronicles the adventures of people—or in A&E’s parlance, “modern day treasure hunters”—who buy the detritus of abandoned Southern California storage units. The show exists somewhere on the cultural continuum between guilty pleasure and irredeemable trash. Nevertheless, it works for me on several levels.

As an initial matter, the show is voyeuristic. Each storage unit is a small window into the life of the person who rented it. Who is the type of person that collects street signs from the 1920s? Or Soviet cosmonaut suits? Why would someone store a ratty old mattress that is worth less than the unit’s monthly rental fee? What is more, each unit represents an enigma. What happened to the owners of the personal property? Why did they abandon their personal property? There is an untold narrative for each of these abandoned units that connotes loss, mishap and human wreckage. Storage Wars is unintentionally documenting the Great Recession.

Storage Wars is also interesting as a meditation on 21st century American masculinity. The treasure hunters are almost exclusively male. Tension on the show is generated by the cast’s macho braggadocio. These are not mere storage auctions; they are showdowns, battles. The cast often describes their elaborate bidding strategies to the camera with blustering swagger. The goal is not simply to make the winning bid, but also to taunt, intimidate, belittle and teach a lesson to the competition. The whole thing plays out like a burlesque of manhood. If bidding on junk at a storage auction is a testosterone-drenched manly endeavor, then manliness means nothing.

But, the most compelling thing about Storage Wars are the moments when the guys actually find something of value in a unit, or as A&E’s website puts it, succeed in “their quest for the extraordinary.” For whatever reason, we get a thrill seeing people luck into something. This is why we watch the Antiques Roadshow. The tweedy antiquarians opining about people’s personal property has its own special appeal, but the real payoff is when someone learns the painting that’s been sitting in their attic for 20 years is a Mark Rothko. My property professor in law school said that every year the most popular sections in his class was adverse possession, the legal doctrine that allows someone to essentially acquire someone else’s land just by sitting on it. As my professor phrased it, “People love the idea of getting something for nothing.”

personal-property-lawsWhile everyone loves the idea of getting someone else’s stuff, the law governing lost and abandoned personal property is opaque. Granted, most lawyers are familiar with acquiring land by adverse possession. But the rights of lost and abandoned personal property—i.e., movable things, like cars, jewelry, furniture etc.—is neglected. I am going to remedy that. Here is what you need to know about how to acquire rights in found personal property.

A finder’s rights in personal property depends on the circumstances in which it was left behind. There are four categories of found personal property:

  1. The first is abandoned property. Someone abandons property when they voluntarily relinquish ownership with the intent to give up both title and possession. For example, putting your collection of New Kids on the Block cd’s on the curb for the garbage truck amounts to an abandonment. A finder of abandoned personal property acquires title to it by actual or constructive dominion and control over the property with intent to assert ownership of it. Thus, if the garbage truck driver takes your NKTOB cd’s up to the front of the truck, intending to keep them, he has acquired title. Incidentally, the personal property sold at auction in Storage Wars, while de facto abandoned, is not technically abandoned. Rather, they are sold under statutes that give storage unit owners a lien on personal property in an unpaid storage unit. See e.g. Va. Code Ann. § 55-416 et seq. (Virginia Self-Service Storage Act); Ariz. Rev. Stat. § 33-1701 et seq. (codifying Arizona’s storage laws).
  2. The second category is lost property. The test for lost property is whether a reasonable person would judge that the owner had parted with it unintentionally through carelessness or neglect. Think of a purse accidentally left at a checkout stand. The finder of lost property is entitled to possession against all the world. But unlike abandoned property, finding lost property does not confer title. Instead, the owner of lost property still retains title. Therefore, a finder who sells or damages lost property would still be liable to original owner.
  3. The third category of found property is mislaid property. Property is mislaid when, judging from the place it is found, it appears the owner intentionally placed it there and later forgot about it. The finder of mislaid property, however, has few rights to it. Rather, the owner of the premises on which the property is found is entitled to possession, not title, against all the world except the original owner.
  4. The fourth and final category of found property is treasure trove, which is verifiably antiquated gold, silver or money that has been concealed for so long that the original owner is either dead or unknown. For example, gold doubloons stashed in the wall of an old house would be a treasure trove. Traditionally, the finder of treasure trove took possession and title to the property. The modern trend, however, is to treat a treasure trove like lost property, i.e. the finder only gets possession.

So one can only acquire title to abandoned property or (perhaps) to a treasure trove. Lost or mislaid property entitles one to, at best, the mere right to hold the property. Now you know how the law treats someone else’s stuff. Of course, if you ever have a dispute over personal property (or real property), you should contact the excellent, seasoned attorneys at Baird Williams and Greer.

personal injury case value

Evaluating Your Personal Injury Case Value

personal injuryIt’s not surprising that one of the questions asked most often by plaintiffs in personal injury cases is the most obvious one: “What is the value of my personal injury case?”

The honest answer is also an obvious one: “It depends.” While many things can factor in to determining the value of a personal injury case, there are a few things to consider when trying to assess how much your claim may be worth.

For example, no matter how serious your injuries are or how large your medical bills have become, the amount you can recoup in a personal injury case is limited to the amount of available insurance and the defendant’s assets. While laws can vary from state-to-state, a personal injury case is most likely limited to the amount of available insurance. If your car is hit by a driver who carries only the minimum amount of insurance – let’s say it’s $25,000 – and no other insurance policy is available, the most you can realistically recover may be that amount, $25,000.

If the driver who hit you carries only the minimum amount of insurance mandated by your specific state, and your policy includes underinsured motorist coverage, you might be able to pursue an uninsured motorist claim for additional money. Check with your attorney to see how much you can recover, based on your policy.

This is just one of many reasons which underscores the importance of retaining the services of a knowledgeable and experienced personal injury attorney. He or she will look at all applicable insurance policies to make sure you recover the largest amount possible for your personal injury case.

When it comes to being compensated for any harms and losses you’ve experienced as a result of your injuries, you can get a ballpark idea of what you might recover by looking at the total damages of your claim. When your insurance company makes an offer to settle your claim, they will take into account several things: lost wages, your total medical bills, any out-of-pocket expenses incurred – as a result of your accident, along with any pain and suffering you experienced from your injuries.

The total amount of your settlement offer for pain and suffering will be calculated by the extent of your injuries, along with the type of medical treatment you went through. Some injuries are so severe they need surgery and many months of physical rehabilitation. Other injuries are less serious, requiring a lower threshold of medical care. It all comes down to one thing: the more involved your injuries were, and the more elaborate the medical care you required, the more money you should be offered to compensate for your pain and suffering.

As you’ve no doubt figured out, there are many factors in play when trying to determine the value of your personal injury case and what your settlement offer may be. Although it would be impossible and improper for a lawyer to promise a specific settlement amount at the beginning of your claim, a good attorney will be able to consider the various components of your case, and make an educated guess as to the value of your claim. He or she will come up with a plan for the best way to maximize your specific case to obtain the best possible settlement.

Use of Social Media in the Courtroom

social-media-in-courtA couple of weeks ago, we posted a blog entitled “Courts Adjust to Social Media,” which dealt with the admissibility of social media evidence in the courtroom. In that post, we told you about a Connecticut Appellate Court ruling which upheld a trial judge’s decision that some Facebook postings were inadmissible as evidence in a case in which a witness was able to plant seeds of doubt as to whether those postings had really come from her. She didn’t deny the postings were from her account, but insisted someone had hacked into that account. This was just one of a series of similar decisions made in jurisdictions across the country, regarding social media postings as evidence in the courtroom.

In this blog, we would like to continue reviewing the use of social media in the courtroom. We will focus on the increasingly problematic use of social media by jurors, defendants and victims.

The families of both defendants and victims are now creating Facebook pages about cases; gang members have taken to social media in an attempt to menace witnesses; and journalists are tweeting and texting from courtrooms during trials. The use of social media in court is becoming increasingly prevalent.

Courts around the country are working hard to update their policies on using social media in the courtroom. A Tucson attorney and jury consultant, Rosalind Greene, writes about the usage of social media in the courtroom. She recently discussed a study which found that, between 1999 and 2010, at least 90 verdicts were appealed across the country because of Internet or social-media gaffes; 28 of those were overturned, and half of those appeals happened in 2009 and 2010.

Courts around the country are updating their policies on social media usage in court. Here in Arizona, the State Supreme Court formed a committee, The Arizona Supreme Court Committee on the Impact of Wireless Mobile Technologies and Social Media. This committee is made up of judges, lawyers, academics, and press officers who develop rules for the use of laptops, smartphones, and social media in the courtroom.

Like it or not, the Internet and social media are now a part of our criminal justice system and they’re not going anywhere. This sets up a conflict between the First Amendment rights of the news media and the fair-trial rights of defendants. Social media, like Twitter and Facebook, allow anyone with an account to distribute their thoughts and opinions to the entire world, which increases the risk of witness tampering, jury tainting, and unethical behavior by attorneys and judges.

Some of the biggest concerns with using social media in the courtroom relate to juries. As a rule, court trials are self-contained and juries are expected to make decisions based only upon information a judge has allowed attorneys to present. Social media can expose juries to the possibility of information leaks. To address that issue, Arizona state courts looked at rewording jury admonitions.

For years, jurors were told not to watch television news or read newspaper articles which talk about the trial they are sitting on. Today, the digital equivalent of that is telling jurors that they can’t make posts to social media which might give an indication of which way they’re leaning on a case, or go online to do research on that case. Recently, researchers monitoring Twitter found that people who identified themselves as prospective or sitting jurors tweeted every three minutes.

The Arizona Supreme Court’s committee is looking into giving cards to jurors advising them what they are and aren’t allowed to do. They are also considering producing posters for jury rooms which have the Facebook “F” and Internet Explorer “E” in red circles with bars going across them. They’ve also suggested wording which would read: “Do not send or read messages about this case because your verdict must be based on evidence presented in court.”

While there haven’t been reported instances in Arizona of a jury case that was compromised by the use of social media in the courtroom, or of a lawyer being disciplined because of social media usage, there are several cases from other places. Here are just a few examples:

  • In Britain, a  juror took to social media to ask if she should find a defendant guilty or not guilty.
  • A mistrial was declared after five members of a Baltimore jury “friended” each other on Facebook during a political corruption trial and discussed the case online.
  • A judge in New York state was disciplined for becoming “friends” with lawyers on social media.
  • Last year, a federal judge in New Jersey had doubts about the testimony of a witness, so she went on Facebook to check out that witness.
  • A Michigan juror posted an inappropriate post to her Facebook page, which read: “Gonna be fun to tell the defendant they’re GUILTY.”

The Chairman of the Arizona Supreme Court Committee on the Impact of Wireless Mobile Technologies and Social Media, Justice Robert Brutinel, says that as social media technology continues to evolve, courts will be forced to adapt. When people ask him whether social media belong in the courtroom, he says, “I keep asking, ‘Why not?’… We asked, ‘Could we forbid this?’ And the answer was, ‘We couldn’t.’”

How to Use Lien Claims and Stop Notices as Payment Leverage in Arizona

By James Reed

Lien Claims and Stop Notices are at their most effective when they are both used on the same project. Here’s why you should use both, if you want to maximize your chances of recovery.   

When must you file suit on Lien Claims and Stop Notices?  In Arizona, lien claimants have 120 days from project completion to record a lien claim if no Notice of Completion is recorded, and 60 days if an NOC was recorded. If you still aren’t paid after recording your lien claim, you have six months from the date of recording the lien claim to file a lien foreclosure lawsuit in Superior Court, at which time you must also record a Notice of Lis Pendens.        

The time to serve a stop notice (a device to freeze the flow of money – from an owner to the contractor or from a construction lender to an owner – until the stop notice claimant has been paid) is the same as the deadlines to record a lien claim: 60 days after project with an NOC and 120 days without one. You have three months after the last day to record a lien claim in which to file suit (there is a 10 day waiting period after stop notice service, during which a stop notice lawsuit is not allowed).

A comparison between Lien Claims and Stop Notices – Lien claims are recorded and stop notices are not.Stop notice claimants must file suit in court on stop notice rights or else lose them in half the time available for lien claimants to do so.The first point favors the use of stop notices, since they do not impair the transfer of real property and are less likely to damage customer relationships.However, the shorter time involved for filing suit means that a stop notice claimant may be more frequently in a position than is a lien claimant of having to sue on stop notice rights or otherwise lose them. Because lien claimants have six months from recording the lien to file suit on their rights, the claimant is much more likely to know the intentions of the general contractor with respect to final payment of subcontractors and suppliers before the time to sue has expired. Thus, the second point favors the use of lien claims.

So what is the best strategy?  Use both.First, unless you know that you are going to lose a very valued and dependably-paying customer, always use a preliminary notice when providing materials or labor to a construction site.Secondly, anytime you would consider recording a lien claim, serve a stop notice also. The stop notice gives you extra pressure to apply without having to cloud title and potentially be liable if you do so improperly. If you haven’t been paid within three months of the last day to record a lien claim – and IF you timely and properly recorded your lien claim – then you can simply let your stop notice rights expire instead of a stop notice lawsuit, and then fall back on your lien claim rights. You then have about three more months of negotiating time with the owner or general contractor to get paid before you have to file suit to foreclose on the lien claim.

In sum, in most situations when you would consider recording a lien claim, you should also serve a stop notice. And anytime you fear that a lien claim will injure a business relationship, remember that a stop notice is an easy alternative device to spur collection of your receivable without clouding the title of property being improved.Good luck with both.

James B. Reed is a partner at Baird Williams & Greer and heads the firm’s construction lien and bond section.He is renowned for his expertise in lien and bond law, and was a presenter at the 2004 NACM National Congress. Click here to schedule a consultation with Attorney James Reed.

The Admissibility of Social Media Evidence in Court Cases

social-media-evidenceHow much credence should courts place in the use of social media as evidence?

As more of us become frequent users of social media like Facebook and Twitter, that question on the admissibility of social media evidence in court cases is becoming increasingly prevalent. In a recent case out of Connecticut, a defendant named Robert ELeck wanted to impeach the credibility of a key prosecution witness using social media evidence. A message on the Facebook page of that witness appeared to contradict her testimony that she had had no contact with Eleck, after he was accused of stabbing another teenager at a party.

Though the woman did not deny the postings came from her Facebook account, she testified that she had not written them, instead claiming someone had hacked into her account. She planted enough seeds of doubt that the trial judge in the case ruled the messages inadmissible as evidence, and the Connecticut Appellate Court recently upheld that ruling. This was one of a number of similar decisions made in jurisdictions across the country.

At least one legal scholar thinks this Connecticut ruling places a stricter standard of admissibility on social media evidence than what is required. “You really have to accept the fact that the standard is sufficiency and the standard is a low standard for a purpose,” said Sam Stonefield, a professor at Western New England University School of Law who has written on evidence issues. “If there are problems with the evidence, let the other side bring those to the attention of the jury and let the jury decide. Historically, whenever there’s been a new technology, courts have been wary of embracing that new technology.”

Under the sufficiency standard, evidence is admissible if it is sufficient for a reasonable jury to decide it is what it is claimed to be. While the appellate court did not spell out what steps must be taken to authenticate such evidence, Stonefield says the decision, and others like it, may force lawyers to call in social media providers, sometimes at the state’s expense to debate the admissibility of social media evidence.

While Stonefield says he believes the court made a mistake in its ruling, he added it’s unlikely the content of the messages would have affected the outcome of the trial, which was a verdict of guilty on assault charges.

The appellate court ruled that social media messages are comparable to hand-written statements, which can be forged. When the person said to be the writer denies making the statement, it’s up to the person proposing admission of social media evidence to prove its authenticity.

Attorney William B. Wescott, a partner at the Connecticut firm of Maya Murphy, argued the appeal for the defendant in the assault case. He says the appellate court ruling forces parties to prove a negative. “There’s a general presumption in all of evidentiary law that evidence is admissible, unless there’s a reason to keep it out,” Wescott says, adding, “What’s really implicit in this decision, although not outright stated, is they’re really leaning toward a presumption of suspicion.”

baird-williams-greer-faq

Personal Injury | Frequently Asked Questions

personal-injury-claim

  1. I have just been in an accident and have been injured. What should I do?

First, seek medical attention if you are suffering from a personal injury to ensure you are treated promptly and competently. This should be your first priority, because everything you tell a healthcare provider will be written down and will later be read by everyone involved in any future personal injury claims arising from the accident. Therefore, remember these rules:

  • Be accurate.
  • Do not exaggerate.
  • Be thorough. That is, do not skip over symptoms and do not ignore pains. (Insurance companies looking at medical records often conclude that if it’s not written down, it does not exist.)
  • Follow-up with appointments. Appointments or missed appointments are often interpreted by an insurer as the patient being symptom-free.
  • Do not over-treat. Make sure you are progressing and feeling better, and double check with your family doctor about the need for treatment if you find that you are not getting better.

Second, make notes to yourself as to what happened with as much detail as you can recall. It is important to be very accurate, since it may be days or weeks before you are interviewed about the events, either by an insurer or an attorney.

Third, make contact with the party who you believe is at fault for the accident. Usually you will be referred to an insurance company. They will want details of the accident and all medical and lost income information in order to evaluate whether you have a personal injury claim, and, if so, what to offer in settlement. If you are uncomfortable doing this, it may be a good time to contact an attorney experienced in personal injury claims.

Fourth, wait until your doctor has accurately diagnosed your medical condition, provided his or her views about your condition, and prescribed a recommended treatment before you seriously discuss settling a claim. Baird Williams & Greer highly recommends talking to a specialized personal injury attorney if you have any concerns about the reasonableness of a settlement offer.

personal-injury-faqs

  1. The insurance company wants to take my statement. What should I do?

When you are injured and the person who may be at fault has insurance, it is common practice for the insurance company to do an investigation and to gather information with which to evaluate a personal injury claim. Taking statements is a routine part of that. Usually, these statements are recorded. You have nothing to be concerned about giving such a statement so long as you follow these rules:

First, before giving any statement, take time to think about what happened and recall the events in order. It is best to write down exactly what happened with as much detail as you can remember. Because you will be asked many months even years later exactly what happened, it is important that you prepare a record that will jog your memory.

Second, when you give your statement, answer only the questions that are asked. Answer truthfully, avoid guessing at things that you do not know, and do not guess at things. If you do not know or do not remember, say so. If you are taking medication that affects your ability to remember, say so.

Third, while you are being interviewed ask for a copy of the transcript of the interview, so that you can look at it again and make any changes. Sometimes questions will be asked that you have not thought of before and it takes a little reflection before you answer. If you can review your statement and make notes on it for clarification, you get the benefit of that reflection.

  1. What if I am hurt if a product fails or does not do what it is supposed to do?

Do not use the product again. Keep others from using it and preserve it as best as you can.

Product failures present complex questions that usually require an inspection, and an evaluation by engineers and other experts in the field. It is critical that they are able to examine the product in the condition that it was at the time of the failure and/or injury occurred. On this type of claim, you will definitely need professional help from an attorney with products liability experience.

  1. Do I need a lawyer?

Maybe. For minor injuries that heal without any permanent or long-term effects, you may be able to reach a settlement that you believe is fair without hiring a personal injury lawyer. If an insurer admits that the other party is at fault, you can usually negotiate a fair settlement by yourself. However, it may be worthwhile for you to pay for an hour of an attorney’s time to get advice as to the reasonableness of a settlement offer.

If the insurer questions whether the other party is at fault or believes your injuries were either not caused by the event or are not as serious as you believe them to be, you will probably need a personal injury attorney.

For serious injuries or death, it is a good idea to hire a personal injury attorney soon after the event. Evidence will need to be preserved and an investigation conducted when the facts are fresh. This is particularly true if a truck was involved, there was an aviation accident or a product failure.

Most lawyers working for folks who are hurt do so on a contingency fee basis; that is, they will not be paid unless they can reach a settlement and then they will take a percentage of what is collected as fees. The percentage is something you can negotiate; it’s usually between 25-40 percent, depending on how complex the case is and what is at stake. In some matters, you may decide to negotiate for a fee based upon time worked at an hourly rate. However, you will have to pay that amount win or lose and probably on a monthly basis. In addition to fees, you will have to reimburse the attorney for out-of-pocket expenses, regardless of the outcome.

  1. Will I have to go to trial?

95 percent of all personal injury claims are settled without actually going into a courtroom and presenting evidence. Nevertheless, you will probably have to give testimony under oath before trial in order for the parties involved to understand the nature of the claim, as well as evaluate injuries and losses which happen because of the injury. Sometimes personal injury claims settle without ever even having to file suit, but even that requires giving a great deal of information to an insurance company, so that it can evaluate its risks and potential losses should the matter go to trial.

  1. How do I find a good lawyer?

Advertising and the internet have changed the way in which we find professional services. A generation ago, word of mouth was the best way to find a skilled professional. A professional in one specialty will refer patients or clients to another who has the respect of his peers. That is still a good way to go. Ask an attorney you know about the reputation of another.

Ask about experience in personal injury, whether they’ve done work for both injured people and insurance companies, how many trials they have had, what fees they charge, what’s the most recent success they’ve had, what’s the most recent loss they’ve suffered, how available are they to answer questions and how long will it take. Any other question that makes you feel comfortable with the lawyer should be asked. It is important to ask questions, because the fact is once an attorney gets a license, he or she can practice in any area without any experience. Many learn on the job, some with more experienced mentors than others.

Anyone with an advertising budget and marketing skills can put themselves out to the public as one who is accepting clients in different areas of law – from divorce to criminal defense, workers compensation, employment issues, traffic offenses, business formation or tax advice. A slick ad doesn’t qualify an attorney in the field in which he or she advertises.

The State Bar of Arizona certifies specialists in personal injury litigation. The certification means they have the respect of the judges before whom they appear, they are vetted by other qualified attorneys, including their opponents in court, and have several trials under their belt. There are more than 22,000 licensed attorneys, however fewer than 200 lawyers are certified in personal injury litigation. To see a list of specialists, go to www.azbar.org.

Baird Williams & Greer Partner Robert Greer is a licensed personal injury attorney with decades of experience in the courtroom.

If you’ve been injured, contact Baird Williams & Greer today for a free, no obligation case review.