For The Defense, February 2012 - DRI Today

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On The Record 

A Teachable Moment Rings True 

In Search of Our Voice 

By J. Michael Weston, DRI First Vice President 

According to Wikipedia, the alpha and omega of knowledge 

in the twenty- first century, a teachable moment is 

“the time at which learning a particular topic or idea become 

possible or easiest.” One never knows how and when 

teachable moments occur, but when they do they are certainly 

worth noting and acting upon. I had a teachable 

moment when I attended the Southwest Regional Meeting 

in Santa Fe, New Mexico, last August. I sat in a gathering 

of 15–20 great bar leaders from the states in the 

Southwest Region, along with DRI Past Presidents Burt 

Johnson, John Martin and Cary Hiltgen, and Southwest 

Regional Director Kevin Driskill. I listened to the accomplishments 

of the various state and local defense organizations 

and heard their plans for the upcoming year. 

Texas Association of Defense Counsel (TADC) President 

Keith O’Donnell chronicled the past year in Texas. 

He reported on the very difficult year that Texas defense 

counsel had experienced in dealing with draconian tort 

reform that was being pushed through the Texas legislature. 

(Included among the provisions was “loser pays.”) 

Thanks to the good work of the TADC, in cooperation 

with the Texas chapter of ABOTA (led by DRI National 

Director David Chamberlain), many of the provisions 

were softened and the rights of its citizens to utilize the 

courts for civil disputes protected. However as he discussed 

the work of the TADC, Keith looked at me and 

firmly said, “DRI ain’t the voice of the defense bar.” (He 

may not have said “ain’t” but it felt like he did.) 

Keith went on to talk about what is important to defense 

lawyers as they represent their clients and as they 

build and maintain their careers. He talked about access 

to the courts and ensuring that the playing field remains 

fair. He rightly questioned whether DRI spoke in that 

voice when it touted itself as the “voice of the defense bar.” 

For me it was a teachable moment. As I flew back to 

Iowa after the conference, I reflected on the many positions 

that DRI takes on your behalf as members of the 

civil defense bar. I thought about instances where the 

positions we have taken were what members like Keith 

rightly expect, and others that may not have been. 

In the months that followed, DRI Executive Director 

John Kouris traveled the country and visited with SLDO 

leaders to discuss how we can best serve one another 

and our respective members. A common theme was that 

the states want DRI to speak effectively on behalf of its 

members—defense lawyers. Some questioned whether 

we were. 

In response the Executive Committee of DRI 

announced the DRI Center for Law and Public Policy. 

Developed and championed by President Henry Sneath, 

the Center will strive to make DRI more consistent, 

responsive advocates of the interests of our members. 

It will help DRI establish a consistent voice that is recognized 

in the legal and general community. Past President 

Marc Williams will serve as the inaugural chair 

of the Center. Look for developments in the weeks and 

months ahead. 

Along with the Center, we will continue to address 

important issues to the defense bar. Recall that our efforts 

include among others the following programming. 

The National Foundation for Judicial Excellence 

Founded in 2005, the National Foundation for Judicial 

Excellence (NFJE) provides free judicial education to 

state court appellate judges around the country. The goal 

of the NFJE is to present different aspects of legal issues 

that judges confront in their states fairly, clearly defining 

the defense perspective on each topic. Judges and justices 

from 46 states have attended in the past. (Please consider 

contributing to this worthy effort.) 

Lawyers for Civil Justice 

In cooperation with the leadership of our sister organizations, 

the IADC and FDCC, DRI has created and fostered 

Lawyers for Civil Justice (LCJ), a national think 

tank dedicated to protecting the rights of defendants in 

civil litigation. LCJ has taken on such topics as the criminalization 

of corporate counsel activity, and streamlining 

the rules of discovery such that our courts can be 

used to resolve civil disputes efficiently. It is our belief 

that litigants should use the court system because it is 

fair and efficient. If the rules of discovery exact such a 

financial burden on our clients that they are unwilling 

to utilize the court system, they will not utilize the services 

of our members. 

Amicus Committee 

In 2011 DRI was as active as any other organization or 

trade association in terms of the filing of amicus curiae 

briefs. We supported the defendant in Dukes v. Wal- 

Mart, a U.S. Supreme Court decision that protected the 

rights of our clients to defend themselves in individual 

litigation rather than be swept up in aggregate litigation 

On The Record, continued on page 7 

For The Defense ■ February 2012 ■ 1

DRI—The Voice 

of the Defense Bar 

Vol. 54, No. 2 February 2012 

President 

Henry M. Sneath 

Pittsburgh, Pennsylvania 

Immediate Past President R. Matthew Cairns 

Concord, New Hampshire 

President-Elect 

1st Vice President 

2nd Vice President 

Secretary-Treasurer 

Executive Director 

Mary Massaron Ross 

Detroit, Michigan 

J. Michael Weston 

Cedar Rapids, Iowa 

John Parker Sweeney 

Baltimore, Maryland 

Laura E. Proctor 

Nashville, Tennessee 

John R. Kouris 

Deputy Executive Director Tyler Howes 

Director of Publications 

Editor 

Production Manager 

Contributing Editor 

Advertising 

Representative 

Jay Ludlam 

Michelle Parrini 

Julia Bergerud 

Marge Motluck 

Laurie P. Mokry 

For The Defense, February 2012, Vol. 54, No. 2 (ISSN 

0015-6884). Copyright ©2012, DRI. All rights reserved. 

Published monthly by DRI, 55 West Monroe Street ~ 

Suite 2000, Chicago, Illinois 60603. Telephone: (312) 

795-1101. Fax: (312) 795-0747. 

Periodicals postage paid at Chicago, Illinois, and at 

additional mailing offices. Subscription price is $65.00 

per year, and, for DRI members, is included in the membership 

dues. Individual copies are $7.00 for DRI members 

and $12.00 for non-members, plus postage and 

handling. 

POSTMASTER: Send address changes to For The 

Defense, DRI, 55 West Monroe Street ~ Suite 2000, Chicago, 

Illinois 60603. 

Correspondence and manuscripts should be sent to 

the Editor. 

All views, opinions and conclusions expressed in this 

magazine are those of the authors, and do not necessarily 

reflect the opinion and/or policy of DRI and its 

leadership. 

In This Issue 

1 On The Record 

A Teachable Moment Rings True: In Search of Our Voice 

By J. Michael Weston, DRI First Vice President 

4 DRI News 

Members on the Move • DRI Calendar • DRI Committee Leadership Gathers 

in Chicago • DRI Webcasts: Young Lawyers Survival Series Continues 

Pretrial Litigation 

8 Protect High-Level Corporate Officials from Unnecessary Depositions 

Use of the Apex Doctrine 

By Christopher M. Tauro and Kip J. Adams 

Women in the Law 

12 Shattering the Glass Ceiling 

A Survival Strategy for Women 

By Pamela W. Carter 

Electronic Discovery 

16 From the Chair 

A Port in the Storm 

of Change 

By Mark S. Sidoti 

18 Controlling E-Discovery 

Drafting an Effective Records- 

Management Policy 

By John J. Jablonski and Phillip J. Duffy 

Retail and Hospitality 


Creating a Preeminent 

Forum 

By Paul Caleo 

38 In the Real World 

Reducing Liability from 

Dram Shop Laws 

By Stephen K. Talpins and H. Jacey Kaps 

24 Company-Enabled Technologies, 

Social Networking Platforms, 

and Mobile Devices 

Managing Electronic Discovery 

and Compliance Risks 

By John D. Martin and Heyward D. Bonyata 

30 Local Rules, Procedures, 

and Model Orders 

The Progress of E-Discovery 

By G. Franklin McKnight and Kymberly Kochis 

44 Shop, Stop and Roll 

Detaining Shoplifters Without 

Incurring Civil Liability 

By Jennifer M. Herrmann 

and Marci D. Guevara 

46 Slip and Fall in Aisle Four 

Modern Premises Liability 

Challenges to Retail Operations 

By Renee W. Dwyer and Russell N. Jarem 

Government Enforcement and C o r p o r at e C o m p l i a n c e 


Monitoring Government’s 

Changing Attitudes 

By Jonathan N. Rosen 

54 In Search of a More Flexible Approach 

Uneven Practices in False 

Claims Act Settlements 

By Aaron M. Danzig 

58 The Detention Provisions of the 

NDAA for Fiscal Year 2012 

Is It Worth the Cost of Liberty 

By Juliane Balliro 

61 Think Globally 

Developments in the Class Action Landscape: Forum Shopping North of the Border 

By Lisa D. Parliament and Myriam Seers 

62 Defense Ethics and Professionalism 

Seven Legal Sins: Lessons from Mohandas Gandhi, Esq. 

By Winston N. Harless 

72 Advocates and New Members 

2 ■ For The Defense ■ February 2012

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DRI News 

4 ■ For The Defense ■ February 2012 

Members on the Move 

Bush Seyferth & Paige PLLC, a leading boutique litigation 

firm in Troy, Michigan, is pleased to announce 

that it has made Moheeb H. Murray a partner. 

Focusing his practice on commercial and insurance 

litigation, Mr. Murray has significant experience in 

matters involving general commercial contract disputes, 

UCC sales cases, and first-party insurance 

coverage issues. He advises and represents clients 

ranging from Fortune 500 companies to individual 

business owners in all stages of litigation, from case 

inception through final verdict and on appeal. 

Mason W. Wilson of Baker, Donelson, Bearman, 

Caldwell & Berkowitz PC, has been elected president 

of The Traffic Club of Memphis. Mr. Wilson, an 

attorney in the firm’s Memphis, Tennessee, office, is 

a member of Baker Donelson’s Transportation Practice 

Group and its 24 Hour Motor Carrier Emergency 

Response Team—a group of attorneys dedicated to 

providing rapid postaccident intervention and investigation. 

Recognized by Mid-South Super Lawyers as 

a “Rising Star” in transportation law, Mr. Wilson is a 

member of the Transportation Lawyers Association 

and the Association of Transportation Law Professionals. 

He has served on the board of directors of 

the Memphis Bar Association Young Lawyers Division 

and as the president of the Tennessee Bar Association 

Young Lawyers Division. 

Douglas M. DeGrave, a founding partner of 

Poliquin & DeGrave LLP in Laguna Hill, CA, was 

named Orange County Trial Lawyer of the Year by 

the American Board of Trial Advocates (ABOTA) on 

Tuesday, December 6, 2011, during ABOTA’s Annual 

Holiday Dinner in Newport Beach. Mr. DeGrave is 

a past president of the Orange County Chapter of 

ABOTA and currently serves as the president- elect of 

Cal-ABOTA and as a member of the ABOTA national 

board of directors. 

The partnership of Davis & Young is pleased to announce 

Thomas W. Wright has been elected managing 

partner/president of the firm as of January 1, 

2012. Mr. Wright has been a member of the firm since 

1984. He has a wide range of experience in litigating 

wrongful death, product liability, intentional tort, 

and UM/UIM cases, as well as many other types of 

serious injury cases. In addition, Mr. Wright offers 

specialized expertise on a variety of insurance coverage 

issues, including copyright and advertising injury. 

Davis & Young is also pleased to announce that 

David J. Fagnilli has been promoted to chief financial 

officer. Mr. Fagnilli joined the firm in 1986. His 

area of practice includes insurance coverage litigation, 

product liability, business disputes, construction 

claims, complex litigation, and business arbitrations. 

Sandberg Phoenix & von Gontard P.C., a full 

service law firm headquartered in St. Louis, Missouri, 

is proud to announce the opening of its new 

office in Alton, Illinois. The Alton office marks the 

fifth location for the firm. With three fully staffed 

offices already located in Carbondale, Edwardsville, 

and O’Fallon, the addition of the Alton office reaffirms 

the firm’s commitment to serving clients in 

Southern Illinois. 

Armstrong Teasdale LLP announced two DRI 

members have been named to the partnership, effective 

January 1, 2012. Todd R. Nissenholtz is a member 

of the Litigation Practice Group and concentrates 

in the areas of commercial law, intellectual property, 

construction, telecommunications, and ERISA. He 

has successfully tried matters in Missouri and Illinois 

district courts and the U.S. district courts in the 

Eastern District of Missouri and Southern District of 

Illinois. Daniel Sakaguchi is also a member of the 

Litigation Practice Group, concentrating in the areas 

of commercial law, intellectual property, construction, 

telecommunications and ERISA. He has tried 

jury cases to verdict in state and federal courts and 

has significant bench trial and arbitration experience. 

He is admitted to practice in Missouri, Illinois, 

and California. 

Thompson & Knight LLP partner Bryan P. Neal 

recently published an article entitled “ADAAA Reg- 

Members on the Move, continued on page 68 

Diversity and Inclusion in DRI: A Statement of Principle 

DRI is the largest international membership organization of attorneys defending the interests 

of business and individuals in civil litigation. 

Diversity is a core value at DRI. Indeed, diversity is fundamental to the success of the 

organization, and we seek out and embrace the innumerable benefits and contributions that the perspectives, 

backgrounds, cultures, and life experiences a diverse membership provides. 

Inclusiveness is the chief means to increase the diversity of DRI’s membership and leadership positions. DRI’s 

members and potential leaders are often also members and leaders of other defense organizations. Accordingly, 

DRI encourages all national, state, and local defense organizations to promote diversity and inclusion in their 

membership and leadership.

Calendar 

Upcoming events 

of interest to 

DRI members and 

other defense lawyers 

For more information 

about any of these 

events, call DRI 

Customer Service at 

(312) 795-1101, 

or visit our website at 

www.dri.org. 

February 9–10 Toxic Torts and Environmental Law Miami Beach 

February 14 Framing the Story: Plaintiff and Fact Witness Depositions Webcast 

February 16–17 Trucking Law Scottsdale 

DRI February Calendar 

23–24 Sharing Success—A Seminar for Women Lawyers Scottsdale 

March 8–9 Medical Liability and Health Care Law New Orleans 

March 14–16 Trial Tactics Las Vegas 

March 14–16 Rainmaking Las Vegas 

March 28–30 Insurance Coverage and Claims Institute Chicago 

April 11 

Making Your Case: Defending a Corporate 

Webcast 

Representative or Client Deposition 

April 11–13 Product Liability Conference Las Vegas 

April 20 

When Outsiders Invest in Lawsuits—An Ethical 

Webcast 

Debate on This Growing Trend in Litigation 

April 25–27 Life, Health, Disability and ERISA Claims Chicago 

May 2–4 Employment Law Chicago 

May 9 Clearing the Weeds: Artful Expert Witness Depositions Webcast 

May 10–11 Drug and Medical Device New Orleans 

May 10–11 Retail and Hospitality Litigation and Claims Management Chicago 

May 17–18 Business Litigation and Intellectual Property New York City 

June 7–8 Diversity for Success Chicago 

June 14–15 Young Lawyers Miami Beach 

June 21–22 Appellate Advocacy Cambridge 

September 20–21 Construction Law Phoenix 

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• slip & fall 

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Visit us online: 

• search periodicals 

• immediate online help 

• View expert profiles 

• press room of events 

www.cedtechnologies.com 1-800-780-4221 

Washington • Cleveland • Jacksonville • New York • Ft. Lauderdale • Chicago 



DRI Committee Leadership Gathers in Chicago 

DRI’s Committee Leadership Conference once again brought together 

the chairs and vice chairs of the organization’s 29 substantive law 

committees, along with representatives from the Board of Directors, 

Law Institute and standing committees, for a two-day meeting, January 

5–6, 2012, in Chicago. At the beginning of each year, DRI takes 

this opportunity to gather and reflect on the roles and goals of its committees 

and to recharge and plan for the year ahead. This conference 

is intended to give the committee chairs and vice chairs an opportunity 

to meet with the leadership and staff of DRI, be recognized for 

their excellent work, and share information that will help improve the 

value that the committee structure adds to both DRI membership and 

the defense bar in general. This year’s program included substantive 

sessions on planning educational programming, motivating committee 

leaders, diversifying membership, recruiting new members and leaders, 

and partnering with industry groups and state and local defense 

organizations. 

2011–12 Chairs 

and Vice Chairs 

Aerospace Law 

Jennifer P. Henry, Chair 

Thompson & Knight 

Robert J. Williams, Vice Chair 

Schnader Harrison Segal 

Alternative Dispute 

Resolution 

Thomas D. Jensen, Chair 

Lind Jensen Sullivan 

Sandra Tvarian Stevens, 

Vice Chair 

Wiley Rein 

Appellate Advocacy 

Diane B. Bratvold, Chair 

Briggs & Morgan 

C. Mitchell Brown, Vice Chair 

Nelson Mullins 

Commercial Litigation 

Peter E. Strand, Chair 

Shook Hardy & Bacon 

Kathleen A. Lang, Vice Chair 

Dickinson Wright 

Construction Law 

David V. Wilson II, Chair 

Hays McConn 

Kathy R. Davis, Vice Chair 

Carr Allison 

Corporate Counsel 

Amy Mass, Chair 

Hanover Insurance Companies 

K. Kristann Carey, Vice Chair 

McDonald’s Corporation 

Diversity 

Douglas K. Burrell, Chair 

Drew Eckl & Farnham 

Pamela W. Carter, Vice Chair 

Carter Law Group LLC 

DRI International 

Glenn M. Zakaib, Chair 

Cassels Brock 

Dieter Hofmann, Vice Chair 

Walder Wyss & Partners 

Drug and Medical Device 

Scott W. Sayler, Chair 


James F. Rogers, Vice Chair 

Nelson Mullins 


Mark S. Sidoti, Chair 

Gibbons 

John J. Jablonski, Vice Chair 

Goldberg Segalla 

Employment and 

Labor Law 

Mark A. Fahleson, Chair 

Rembolt Ludtke 

Amy L. Miletich, Vice Chair 

Miletich Pearl 

Fidelity and Surety 

Denise C. Puente, Chair 

Simon Peragine Smith 

Jerome M. Joseph, Vice Chair 

Godin & Baity 

Government Enforcement 

and Corporate Compliance 

Jonathan N. Rosen, Chair 


Winifred Marie Weitsen, 

Vice Chair 

Venable 

Governmental Liability 

Dana K. Maine, Chair 

Freeman Mathis & Gary 

Phillip E. Friduss, Vice Chair 

Landrum & Friduss 

Insurance Law 

Anthony R. Zelle, Chair 

Zelle McDonough 

Michael M. Marick, 

Vice Chair 

Meckler Bulger Tilson 

Lawyers’ Professionalism 

and Ethics 

Brett A. Ross, Chair 

Carr Allison 

Winston N. Harless, 

Vice Chair 

Lewis King Krieg 

Life, Health and Disability 

Gary Schuman, Chair 

Combined Insurance Company 

Daniel W. Gerber, 

Vice Chair 

Goldberg Segalla 

Jeffery A. Styres, Corporate 

Vice Chair 

Southern Farm Bureau Life 

Insurance 

Medical Liability and 

Health Care Law 

Ted J. McDonald III, Chair 

McCormick Adam & McDonald 

Todd W. Smyth, Vice Chair 

Smyth Whitley 

Product Liability 

Charles A. Stewart III, 

Chair 

Bradley Arant Boult Cummings 

Patrick J. Sweeney, 

Vice Chair 

Sweeney & Sheehan 

Professional Liability 

Daniel B. Meyer, Chair 

O’Hagan Spencer 

Frances M. O’Meara, 

Vice Chair 

Kaufman Dolowich Voluck 


Paul Caleo, Chair 

Burnham Brown 

H. Jacey Kaps, Vice Chair 

Rumberger Kirk & Caldwell 

Technology 

Sara M. Turner, Chair 

Baker Donelson Bearman 

Chad S. Godwin, Vice Chair 

Carr Allison 

Toxic Torts and 

Environmental Law 

Kevin E. Clark, Chair 

Lightfoot Franklin & White 

Douglas M. Poland, 

Vice Chair 

Godfrey & Kahn 

Peter A. Drucker, Corporate 

Vice Chair 

Akzo Nobel Coatings 

Trial Tactics 

Tammy J. Meyer, Chair 

MillerMeyer LLP 

John C.S. Pierce, 

Vice Chair 

Butler Pappas 

Trucking Law 

Kurt M. Rozelsky, Chair 

Smith Moore Leatherwood 

Tamara B. Goorevitz, 

Vice Chair 

Franklin & Prokopik 


Cheryl E. Diaz, Chair 

Fishman Jackson Luebker 

Lana Alcorn Olson, 

Vice Chair 

Lightfoot Franklin & White 

Workers’ Compensation 

Craig Stuart Young, Chair 

Heyl Royster Voelker 

Jonathan L. Berryhill, 

Vice Chair 

Wilson & Berryhill 

Young Lawyers 

R. Craig Mayfield, Chair 

Hill Ward Henderson 

James L. Pattillo, First 

Vice Chair 

Norman Wood Kendrick 

Jennifer Snyder Heis, Second 

Vice Chair 

Ulmer & Berne 


By Jonathan S. Hickey 


DRI Webcasts 

Young Lawyers Survival Series Continues 

With the first three webcasts in DRI’s 

“Young Lawyers Survival Series” behind us, 

and 2012 in front of us, we are primed and 

ready to present our next three interactive 

webcasts! In the fall of 2011, we addressed 

introductory topics, including responding 

to the complaint, implementing organization 

and file management, and utilizing all 

discovery tools to defend a case properly. 

Those first three webcasts are still available 

on DRI’s website for individual purchase. 

Now, we narrow the focus and will 

present deposition “survival” tactics and 

techniques to assist in the ongoing education 

and training process of new attorneys. 

The next installment of our series— 

co- presented by DRI’s Trial Tactics and 

Young Lawyers Committees—will be our 

fourth overall and take place on February 

14, 2012. Attorneys Lynn Roberson and C. 

Meade Hartfield will discuss depositions, 

focusing on deposing the plaintiff and fact 

witnesses. This discussion of depositions 

and how to use the fruits of the discovery 

process will be a practical primer and reference 

tool for new attorneys moving forward 

in the life cycle of case. Specifically, 

you will hear how to best prepare for the 

deposition, ways to listen 

to and question the 

deponent effectively, how and when to use 

an outline and exhibits, and how to ensure 

the transcript is clear and useful. 

April 11, 2012, brings our fifth webcast 

installment. While still focusing on 

depositions, we shift gears to the topic of 

defending your corporate representative’s 

deposition. This discrete skill gets the full 

treatment from veteran litigators Sidney 

Kanazawa and Gail Rodgers. This presentation 

will discuss how to determine whom 

you should produce for the corporate deposition, 

how and when to approach your client 

about the deposition, strategy to assist 

in best preparing your client for the deposition 

(and making him or her like it!), and 

when and how to assist the corporate representative 

when the “red light is on” and 

the deposition is underway. 

We will close out this portion of our series 

with our sixth installment on May 9, 

2012, when John C.S. Pierce and Anthony 

Novak tackle the art of conducting expert 

depositions. This is an interactive webcast 

that every new attorney should make a priority. 

This discussion will focus on the goals 

of an expert deposition, how to defuse a difficult 

expert witness, when and how to use 

your own expert while preparing for the deposition, 

and suggestions on how to most effectively 

gather testimony and information 

necessary to challenge the expert. 

■■ 

Jonathan S. Hickey is a founding member of Burden, Gulisano & Hickey 

in Buffalo, New York. He serves as program co-chair of the DRI Young Lawyers 

Survival Series, along with C. Meade Hartfield of Baker Donelson Bearman 

Caldwell & Berkowitz PC in Birmingham, Alabama and Guy E. Hughes 

of Casey Bailey & Maines PLLC in Lexington, Kentucky 

 

YOUNG LAWYERS SURVIVAL SKILLS SERIES 

PRESENTED BY THE DRI TRIAL TACTICS 

AND YOUNG LAWYERS COMMITTEES 

Part 4: Framing the Story: 

Plaintiff and Fact Witness Depositions 

TUESDAY, FEBRUARY 14, 2012 1:00 p.m. CST 

Part 5: Making Your Case: Defending a 

Corporate Representative or Client Deposition 

WEDNESDAY, APRIL 11, 2012 1:00 p.m. CST 

Part 6: Clearing the Weeds: 

Artful Expert Witness Depositions 

WEDNESDAY, MAY 9, 2012 1:00 p.m. CST 

Sign up for all three webcasts and pay only 

$300 for members ($390 for non-members). 

REGISTER ONLINE: http://dri.org/Events/Webcasts 

As we begin the next part of our series 

with three new installments, the goal of this 

extended webcast series remains the same: 

to help young lawyers understand the fundamentals 

of litigation, and to help them 

thrive and succeed with their new skill set. 

Join us in our mission to educate and train 

young lawyers in a cost- effective manner 

by signing up for the next three webcasts. 

Effective deposition techniques are essential 

for any new litigator, and young lawyers 

can only benefit from exposure to these substantive 

areas as presented by skilled and 

experienced litigators. Please don’t wait; 

visit www.dri.org and sign up right now! 

On The Record, from page 1 

of cases that are not necessarily similar. 

We felt it unfair that conduct in one state 

be measured in a class action by a court 

sitting in another state. Each defendant 

should be represented by a lawyer of their 

choosing and defended in their forum, 

accounting for their conduct. Going forward 

the Executive Committee of DRI will 

assist the Amicus Committee in screening 

requests for Friend of the Court briefing to 

make certain that the position we are being 

asked to take will be one that would be supported 

by our members. 

In addition to our formal efforts, DRI 

substantive law committees comment on 

developments in their substantive areas in 

newsletters, blogs, scholarly articles, and 

as advocates in our courtrooms. In each 

instance they try to demonstrate the very 

best of the defense bar in service to our clients 

in our system of justice. 

DRI works tirelessly to be the voice of the 

defense bar. But the teachable moment provided 

by TADC’s President Keith O’Donnell 

still rings true. At each instance, we must 

speak for the defense bar and not for any 

discrete interest. We need to continue to 

focus on the fairness of the process, fair 

access to the courts and fair judging, making 

certain that as an organization we do 

not become partisans of a particular position 

of substantive law at the behest of 

others. In doing so we will best serve the 

interests of our members with the right 

tenor and tone expected of The Voice. 



Protect High-Level 

Corporate Officials 

from Unnecessary 

Depositions 

By Christopher M. Tauro 

and Kip J. Adams 

Use of 

the Apex 

Doctrine 

While courts have not 

widely accepted the 

doctrine, defense counsel 

have used it effectively in 

certain jurisdictions. 

Under most rules of civil procedure the permissible scope 

of discovery is very broad. The federal rules, as well as the 

corresponding civil rules in many states, permit a party to 

discover information regarding any matter that is relevant 

to any party’s claim or defense. See Fed. R. 

Civ. P. 26. While this virtually limitless discovery 

is important to attorneys as it provides 

exploratory space to find information 

that will become the foundation of their clients’ 

cases, the same freedoms allow attorneys 

to use discovery for purposes other 

than locating relevant information. For 

instance, attorneys often attempt to use 

the discovery process to gain leverage over 

adversaries. One aggressive discovery tactic 

is to seek to depose high-level corporate 

officials of a party opponent. While in some 

cases the facts and circumstances warrant 

these depositions, in other cases, high-level 

corporate officials’ knowledge is clearly 


■ Christopher M. Tauro is a partner and Kip J. Adams is an associate in the Boston office of Edwards Wildman 

Palmer LLP. Mr. Tauro’s practice focuses on resolving his clients’ complex civil litigation matters 

quickly, efficiently, and in line with their legal and business objectives. He has extensive federal and state litigation 

experience in addition to advising clients on a range of legal issues. Mr. Adams practices in the firm’s 

Insurance and Reinsurance Department, where he represents insurance companies and their insured in 

complex product liability, toxic tort and business litigation. He is a member of DRI.

lacking as to the pertinent facts and issues. 

Yet, attorneys on occasion will make pursuing 

these depositions primary components 

of offensive strategies, even after the 

information that they obtained from previous 

discovery responses has made them 

aware of the disconnection. 

This strategy capitalizes on three realities 

of present- day litigation. First, the time, 

effort, and resources that go into appearing 

for a deposition, not to mention preparing 

for it, are often arduous. Few people have the 

flexibility to spend a day, or even just a few 

hours, away from their workplaces or their 

homes answering a seemingly never- ending 

series of questions on multiple topics. This 

is especially true of high-level corporate officials 

with vast responsibilities, oppressive 

work schedules, and extensive travel schedules. 

Second, the broad scope of discovery 

under the rules of civil procedure makes 

it extremely difficult to obtain protection 

from a court. As long as it seems likely that 

a deponent will have at least some information 

relevant to a party’s claims or defenses, 

the rules permit a party to depose the deponent. 

See Fed. R. Civ. P. 26, 30(a)(1). Third, 

an individual called to offer a deposition 

cannot lean as heavily on counsel to do the 

hefty lifting on his or her behalf as he or she 

can with a written discovery request. With 

a written discovery request, a client relies, 

if not expects, that counsel will review a request 

in detail, prepare proposed responses, 

and coordinate the review and execution 

of those responses in final form at a time 

and in a manner of the client’s choosing. 

Although an attorney can prepare an individual 

called to provide a deposition extensively 

beforehand, ultimately the individual 

frequently needs to travel to the deposition, 

sit before the examiner, and answer question 

after question without any assistance 

from counsel. And when the examination 

subjects are not those that the high- ranking 

corporate official has any detailed knowledge 

of, or if another employee could answer 

the questions as well, if not better, the 

exercise is simply frustrating. 

Considering the scope of discovery and 

these modern realities of litigation, how 

does an attorney representing a large company 

or institution protect executives from 

harassing and unnecessary depositions 

As detailed below, one option may be to 

appeal to the court for relief under the apex 

doctrine. 

The Evolution of the Apex Doctrine 

While not widely recognized, some jurisdictions 

have applied the apex doctrine to limit 

or even prevent certain depositions from 

occurring. As you would expect, the term 

“apex” refers to those individuals, particularly 

executives, at the “apex” or the top of a 

company or an organization. While courts 

have referred to and described the apex doctrine 

in several decisions, arguably the most 

widely recognized description comes from 

the Texas Supreme Court from Crown Cent. 

Petroleum Corp. v. Garcia, 904 S.W.2d 125 

(Tex. 1995), and In re Alcatel USA, Inc., 11 

S.W.3d 173 (Tex. 2000): 

When a party seeks to depose a corporate 

president or other high level corporate 

official and that official (or the 

corporation) files a motion for protective 

order to prohibit the deposition accompanied 

by the official’s affidavit denying 

any knowledge of relevant facts, 

the trial court should first determine 

whether the party seeking the deposition 

has arguably shown that the official 

has any unique or superior personal 

knowledge of discoverable information. 

If the party seeking the deposition cannot 

show that the official has any unique 

or superior personal knowledge of discoverable 

information, the trial court 

should grant the motion for protective 

order and first require the party seeking 

the deposition to attempt to obtain the 

discovery through less intrusive methods…. 

After making a good faith effort 

to obtain the discovery through less 

intrusive methods, the party seeking the 

deposition may attempt to show (1) that 

there is a reasonable indication that the 

official’s deposition is calculated to lead 

to the discovery of admissible evidence, 

and (2) that the less intrusive methods 

of discovery are unsatisfactory, insufficient 

or inadequate. 

Crown Cent. Petroleum Corp. v. Garcia, 904 

S.W.2d 125, 128 (Tex. 1995); see also Liberty 

Mut. Ins. Co. v. Superior Court, 10 Cal. App. 

4th 1282, 13 Cal. Rptr. 2d 363 (1992) (“particularly 

instructive” to the Crown Central 

court on apex doctrine guidelines). 

In Alcatel, the court contemplated that 

under the Crown Central guidelines for the 

apex doctrine, trial courts may in fact undertake 

two hearings and issue two orders. 

The first hearing considers whether to grant 

a protective order based on the guidelines 

set forth in Crown Central. Then, should a 

protective order be granted, and other specific 

methods of discovery engaged in, the 

court will undertake a second hearing to 

determine whether it should dissolve the 

protective order. In re Alcatel USA, Inc., 

11 S.W.3d at 176. Thus the apex doctrine 

may in fact involve two separate determinations 

at two points in time by a court on 

the fruitfulness of a deposition. Additionally, 

since the Crown Central and Alcatel decisions, 

in cases invoking the apex doctrine, 

courts have inconsistently applied Federal 

Rule of Civil Procedure 26, which requires 

a party or an individual resisting discovery 

to demonstrate the need for a protective order. 

The apex doctrine as set forth in Crown 

Central and Alcatel requires the party seeking 

discovery to make a good-faith effort to 

obtain the information through less intrusive 

methods than an “apex deposition,” 



and then to demonstrate that (1) it has a 

reasonable indication that the deposition 

would “lead to the discovery of admissible 

evidence,” and (2) those “less intrusive 

methods” have been “unsatisfactory, insufficient 

or inadequate.” See Crown Cent. Petroleum 

Corp., 904 S.W.2d at 128; Liberty 

Mut. Ins. Co., 13 Cal. Rptr. 2d at 363; In re 

Alcatel USA, Inc., 11 S.W.3d at 173. Other 

While not widely 

recognized, some 

jurisdictions have applied 

the apex doctrine to limit 

or even prevent certain 

depositions from occurring. 

courts have followed Federal Rule of Civil 

Procedure 26 closely, refusing to shift the 

burden to the party seeking discovery and 

instead requiring the party resisting discovery 

to demonstrate the need for protection 

from harassing and burdensome discovery. 

See Crest Infiniti, II, LP v. Swinton, 2007 

OK 77, 174 P.3d 996 (“We decline to adopt a 

form of the apex doctrine that shifts a burden 

to the party seeking discovery. In Oklahoma 

the burden of showing “good cause” 

is statutorily placed on the party objecting 

to discovery and is part of that party’s motion 

for a protective order.”). 

Crown Central and Alcatel were not the 

first decisions through which courts granted 

relief to potential deponents under similar 

circumstances. See M.A. Porazzi Co. v. The 

Mormaclark, 16 F.R.D. 383 (S.D.N.Y. 1951) 

(precluding the deposition of a vice president 

because the court found that he could 

add no additional information beyond that 

of a lower level employee). But commentators 

seem to agree that they articulated the 

doctrine most effectively, and courts have 

cited them frequently in subsequent decisions 

concerning the apex doctrine. 

Crown Central 

The Crown Central facts illustrate the realities 

of modern litigation that make the apex 


doctrine necessary. The plaintiffs, relatives 

of a former Crown Central Petroleum Corporation 

refinery worker who had died of 

lung cancer that he allegedly developed 

due to workplace asbestos exposure, sought 

to depose the chair of the board and chief 

executive officer of the corporation. Crown 

Cent. Petroleum Corp., 904 S.W.2d at 126. 

They filed a motion to require Crown Central 

to produce him for a video deposition 

and to produce 32 categories of documents. 

Crown Central responded with a motion 

to quash the deposition arguing that the 

plaintiffs sought the deposition solely for 

harassment purposes, and it attached an 

affidavit from the chair. Among other 

things, the affidavit stated, 

I have no personal knowledge of [the 

decedent] or his job duties, job performance, 

or any facts concerning alleged 

exposure to asbestos by [the decedent]. 

I was not involved in the day-to-day 

maintenance decisions made at the 

Refinery. I have no expertise in industrial 

hygiene, toxicology, or the health 

effects of asbestos exposure. 

The trial court denied the Crown Central 

motion to quash the deposition and Crown 

Central’s subsequent motion requesting 

the court to reconsider the initial motion 

to quash. 

Citing several previous court decisions 

applying the apex doctrine reaching back 

more than 50 years, the Crown Central 

court found that in applying the doctrine 

a court should reasonably accommodate 

the party seeking discovery so that it could 

obtain the requested information but without 

causing the “problems” associated with 

deposing upper level corporate managers. 

The Crown Central court articulated the 

most helpful guidelines for the apex doctrine 

to that date, which other courts facing 

similar circumstances have referred to. 

Recent decisions have clarified what the 

apex doctrine is and what it isn’t. The doctrine, 

one court said, is not meant to shield 

high- ranking officers from discovery but 

to sequence discovery to prevent litigants 

from deposing high- ranking officials routinely 

before engaging in less burdensome 

discovery methods. Alberto v. Toyota Motor 

Corp., 289 Mich. App. 328, 796 N.W.2d 490, 

492 (2010). No court has held that the apex 

doctrine prevents a party from deposing a 

high- ranking corporate officer under all circumstances. 

Certainly, when a party seeks 

to depose an individual who has personal 

knowledge of facts relevant to a lawsuit, a 

court would expect that individual, even a 

corporate president or CEO, to appear for 

deposition. See In re AIR CRASH AT TAIPEI, 

TAIWAN on October 31, 2000, MDL1394- 

GAF (RCX), 2002 WL 32155478 (C.D. Cal. 

Nov. 6, 2002); Six W. Retail Acquisition v. 

Sony Theatre Mgmt. Corp., 203 F.R.D. 98, 

102–06 (S.D.N.Y. 2001) (compelling the deposition 

of the CEO of Sony because the party 

seeking it presented sufficient evidence that 

he possessed some unique knowledge on 

several issues.); Citigroup Inc. v. Holtsberg, 

915 So. 2d 1265 (Fla. Dist. Ct. App. 2005) 

(holding a court should deny a protective 

order covering high- ranking officials when 

it appears personal knowledge exists of key 

issues or the motivations of the company are 

relevant to a case). 

The Authority for the Doctrine 

Federal Rules of Civil Procedure 26(c) or 

corresponding local rules provide the general 

basis under which a party may petition 

a court to prevent a deposition of a highlevel 

corporate official from occurring by 

invoking the apex doctrine. Federal Rule of 

Civil Procedure 26(c) specifies that a court 

may “for good cause… issue an order… to 

protect a… person from annoyance, embarrassment, 

oppression, or undue burden 

or expense.” This rule specifically allows a 

court to “forbid” the discovery as well as to 

“prescribe a discovery method other than 

the one selected by the party seeking discovery.” 

Thus, a court may quash a deposition 

outright, or it may require parties to 

find less burdensome means for obtaining 

the desired discovery. See Patterson v. 

Avery Dennison Corp., 281 F.3d 676, 681– 

82 (7th Cir. 2002) (affirming a refusal of a 

district court to compel a deposition of a 

high- ranking executive in a multinational 

corporation because the requested deposition 

would have been a costly and burdensome 

means of discovery); Evans v. Allstate 

Ins. Co., 216 F.R.D. 515, 518–19 (N.D. Okla. 

2003) (granting a protective order regarding 

depositions of corporate executives under 

the apex doctrine). 

“High-Level Corporate Official” 

A threshold question for counsel considering 

the apex doctrine is, of course, whether

the person sought for deposition is in fact 

a “high-level corporate official.” In some 

cases, the answer is obvious. For instance, 

former Chrysler Corporation Chair Lee 

Iacocca was determined to be a high-level 

corporate official by the court following 

arguments on his behalf that under the 

apex doctrine, his deposition should not 

occur. Mulvey v. Chrylser Corp., 106 F.R.D. 

364 (D.R.I. 1985) (noting about Iacocca 

that “he is a singularly unique and important 

individual who can be easily subjected 

to unwarranted harassment and abuse. He 

has a right to be protected, and the courts 

have a duty to recognize his vulnerability.”) 

More recently, a court automatically 

afforded Larry Kellner, the former Continental 

Airlines chief executive officer and 

chair, the status without discussion when 

it applied the apex doctrine to prevent 

his deposition from occurring. See In re 

Cont’l Airlines, Inc., 305 S.W.3d 849 (Tex. 

App. 2010). As such, an attorney can usually 

safely assume that a court will deem a 

chair, a president, or a chief executive of a 

company or an organization of any size a 

high-level corporate official for apex doctrine 

purposes. 

In other cases, it is less clear whether 

an individual receiving a deposition notice 

is in fact a high-level corporate officer for 

the purposes of the apex doctrine. After 

the chair, president, or chief executive of a 

company or an organization, the other corporate 

officers entitled to protection have 

been vaguely described as those “at the 

apex of the corporate hierarchy.” Liberty 

Mut. Ins. Co., 13 Cal. Rptr. 2d at 363. Courts 

have also suggested that the apex doctrine 

extends not only to high-level corporate 

officers but also to high-level government 

officials under the same principle and for 

similar reasons. Alberto, 796 N.W.2d at 

493–94 (establishing that under Michigan 

law the apex- deposition rule applies 

to high- ranking officials in the public sector 

and to high- ranking corporate officers 

in the private sector). However, one court 

decided that the apex doctrine did not 

apply to former President George W. Bush 

in a case seeking to compel him to appear 

for a deposition related to a dispute over 

the proposed site of the George W. Bush 

Presidential Center at Southern Methodist 

University. In re Bush, 287 S.W.3d 899 

(Tex. App. Jun 12, 2009) (electing instead 

to invoke the even higher “meticulous” 

standard for determining the need to compel 

a sitting or former President for deposition 

as established in United States v. 

Poindexter, 732 F. Supp. 142 (D. D.C. 1990)). 

What Is “Unique” or 

“Superior” Knowledge 

Under the apex doctrine, to compel a 

high-level corporate officer to appear for 

Apex Doctrine, continued on page 64 

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Shattering the 

Glass Ceiling 

By Pamela W. Carter 

A Survival 

Strategy 

for Women 

Viewing the retention 

and advancement of 

women as imperative 

will help organizations 

to achieve goals and 

overall business success. 

In recent decades women have moved forward in the workplace 

in leaps and bounds. However, we still have difficulty 

passing through the “glass ceiling.” What is the glass ceiling 

The glass ceiling is a way of describing obstacles that 

keep women from achieving power and 

success equal to that of men. A ceiling made 

of glass is one that we can see through. A 

woman can see clearly those above her as 

they advance and come to hold more powerful 

positions. Instead of achieving the 

same success, invisible forces stop her from 

succeeding and rising further. 

There are nearly 60 million women in 

America, more than 45 percent of the U.S. 

workforce. Women and minorities make 

up two-thirds of the population, two-thirds 

of consumers, and 57 percent of the work 

force. Among Fortune 500 companies, 

women occupy 15 percent of board seats 

and three percent of CEO positions. Despite 

making up nearly 50 percent of law school 

graduates, women make up only 18 percent 

of law partners and only 25 percent 

of judges. These statistics illustrate that 

■ Pamela W. Carter is the founder of Carter Law Group LLC in New Orleans, where she concentrates her practice on a wide 

variety of civil litigation ranging from insurance coverage, personal injury, transportation law, toxic tort, defective product and 

general litigation matters. She is nationally recognized for her publications and presentations on issues of diversity in the legal 

profession. She is an active member of DRI, currently serving as vice chair for its Diversity Committee. 


although today many more women hold 

powerful positions than in the past, the 

glass ceiling is still very real. 

The phrase “glass ceiling” first came into 

use in 1986 when two Wall Street reporters 

coined the phrase. How culture portrays 

women accounts for part of the glass ceiling 

problem. On the one hand we want and 

expect women to take equal leadership roles 

to men, yet the media still portrays women 

as subservient and objectifies them, which 

significantly impacts young people. The recent 

image of Republican presidential candidate 

Michele Bachmann pouring water 

for the men on stage, her rival GOP presidential 

candidates, during a recent debate 

brings to mind the conflicting images and 

roles of women in society: professionals, 

servants, and caregivers. Society expects 

that women will take care of their families 

at home while simultaneously pursuing 

their careers, an expectation that does 

not extend to men. And leadership stereotypes 

and gender politics significantly contribute 

to the glass ceiling problem. Many 

people still predominantly view good leaders 

as “tough and shrewd,” desirable traits 

to many, while they view women as nurturing 

and caring and as having corresponding 

leadership traits, which they also view 

as “weak and soft.” The solution is to adopt 

gender equity as a necessity. Businesses 

must adopt diversity as a business imperative, 

not just to comply with strictures imposed 

by outside entities, or as an add-on 

program. Businesses must willingly take 

bold approaches. And women wanting to 

build their careers need to understand and 

know how to integrate into leadership. 

Why Does the Glass Ceiling Still Exist 

The theories explaining why the glass ceiling 

continues to exist in corporate America 

vary. Most research identifies stereotyping, 

deficient recruiting, and the absence 

of women in important pipeline positions 

as among the causes. Richard Martell and 

Christopher Parker, for instance, identify 

stereotypes as a major barrier impeding 

women. They noted in the Journal of Social 

Behavior and Personality that women are 

perceived as “lacking the characteristics 

most needed to succeed and, consequently, 

were often judged to be less qualified than 

men,” and they identified at least one study 

from the 1980s that showed that “characteristics 

of successful middle managers 

were more similar to descriptions of men 

than women.” On the other hand, research 

by the Catalyst Corporation shows that Fortune 

500 companies with the highest proportion 

of women in senior management 

significantly outperformed others with 

the lowest proportion in both return on 

equity and total shareholder return. Richard 

F. Martell and Christopher Parker, Sex 

Stereotyping in the Executive Suite: ‘Much 

Ado About Something, J. of Social Behavior 

& Personality 13 (1998); 2000 Catalyst Census 

of Women Corporate Officers and Top 

Earners, (New York: Catalyst, 2000). 

The irony of the glass ceiling is that we 

have some evidence that women actually 

make better leaders than men. A study of 

more than 900 managers at top U.S. corporations 

found that “women’s effectiveness as 

managers, leaders, and teammates outstrips 

the abilities of their male counterparts in 

28 of 31 managerial skill areas—including 

the challenging areas of meeting deadlines, 

keeping productivity high, and generating 

new ideas.” Brian S. Moskal, Women Make 

Better Managers, Industry Week, February 

3, 1997, at 17; Rene Redwood, The Glass Ceiling, 

Working Woman’s Summit (cited July 

21, 20030), available at http://www.inmotionmagazine.com/glass.html; 

Michelle Martinez, 

Work Life Programs Reap Business Benefits 

HR Outlet, (October 8, 2003). So we can argue 

that misinformation about what truly 

makes good leaders also explains why we 

still have the glass ceiling. 

What Can a Woman Do to 

Shatter the Glass Ceiling 

So, as a woman, what can you do about this 

First, you need to know what you want 

and you must define your goals and priorities 

clearly. Second, develop strong 

relationships with others in your firm or 

company, focusing on those individuals 

in high authority positions. Third, build a 

support network of advocates. Ask these 

individuals for feedback and recommendations 

to help you create a plan of action 

for advancement. Fourth, document and 

publicize every successful assignment that 

you have completed and the positive impact 

that your efforts have had on your organization. 

Present these in your organization’s 

publications and during your review. Fifth, 

become knowledgeable about your organization. 

Find out the common skills and 

attributes of the people holding positions 

in your employer’s upper levels. These skills 

are often tied closely to an organization’s 

culture, vision, and advancement practices. 

It is very important that you understand 

what sets your employer and its leaders 

apart. This is the first step toward discovering 

how you can position yourself for a 

Despite making up 

nearly 50 percent of law 

school graduates, women 

make up only 18 percent 

of law partners and only 

25 percent of judges. 

top leadership role. To that end, ask yourself 

these questions: 

• What are the values of your organization 

• What behaviors does your company 

value and reward 

• What type of person is promoted within 

the organization 

• What skills must you improve 

Businesses that value innovation and 

strive to become leaders will probably promote 

individuals who are outgoing, risk 

takers and who are not afraid to “tell it like 

it is.” However, if you work for a conservative 

business, chances are that individuals 

in top management are analytical thinkers 

with reputations for avoiding risk and 

making careful decisions. 

Sixth, read everything that you can 

about the leadership styles, skills, and attributes 

of those in your firm or company 

who excel to ensure that you have the tools 

needed to advance in your career. Excellent 

leadership and communication skills 

will help you, regardless of the level that 

you want to reach in your career. 

Seventh, let company leadership know 

that you want to work toward a higher level 

position than the one that you currently 

hold. Unless people know what you want, 

they may keep you in the same position and 

assume that you’re happy there. 



Two of these suggestions bear discussing 

in greater detail: creating a plan with 

objectives to align your career and building 

your network. 

Create a Plan and Set Objectives 

to Align Your Career 

Write a plan that targets set goals and plans 

how to get there. You’re responsible for 

The irony of the glass ceiling 

is that we have some evidence 

that women actually make 

better leaders than men. 

determining your own career direction. 

Proactively go after what you want because 

probably no one will hand it to you. 

Do the following: 

• Determine what skills you need to develop 

to achieve it, discussed a bit above. 

• Have welldefined goals for both your 

personal and business life to keep your 

career on course. This allows constant 

growth and improvement throughout 

your career. 

• Work with your advocate and mentor to 

set these goals and objectives. Mentors 

play a crucial role in leadership development 

by providing advice and access 

to opportunities. Monitor and measure 

your performance toward your plan’s 

goals and objectives. 

Build Your Network 

As mentioned, you should also build relationships 

with other people in your organization 

to establish advocates and mentors. 

You never know who can help you, advance 

your career, or provide you with valuable 

information. 

It’s important to network in all areas and 

on all levels of your organization. You need 

the support of colleagues at every level. Try 

these tips: 

• Reach out to new people on a regular 

basis and communicate your value. 

• Expand your professional network outside 

of your organization and market 

yourself. Look for opportunities to grow 


both inside and outside of your organization. 

Seek high profile projects. 

What Can a Business Do 

A business can do a lot to break the class 

ceiling. 

Start by visibly and continually communicating 

commitment to workplace diversity. 

Create a workplace that is welcoming 

and open to all. Doing both will influence 

the culture of an organization by creating 

an atmosphere that fully supports and 

uses a talented workforce. Include diversity 

efforts as an integral part of corporate strategic 

business plans. Creating systems that 

monitor and include rewards for diversity, 

mentoring, and advancement of women 

is very valuable. Consider implementing 

systems that link pay, bonuses, and promotions 

to accomplishing diversity and 

advancing women within your company. 

Demonstrate commitment with the significant 

presence of women in visible leadership 

positions within the organization. 

Encourage and promote mentoring 

opportunities. Organizations can change 

norms by requiring leaders to mentor 

women with high potential and junior 

leaders by assessing this mentoring in formal 

leader performance reviews and by 

publically rewarding such efforts. Mentors 

and advocates can increase the visibility of 

women and the value of relational skills. 

Transparency is a must regarding the criteria 

required for and timing of promotion. 

Create a formal process for the distribution 

of assignments, and offer accurate and effective 

feedback on career development, 

leadership training, and advancement. 

Expand recruitment networks by seeking 

candidates outside of customary backgrounds 

and experiences. Go beyond the 

old-school networks and talent pools. 

Adopt work-life and family friendly policies, 

including flexible hours, daycare, 

and elder care programs. These policies 

improve productivity and reduce costs 

by relieving workers of worries that can 

impede performance, which allows them 

to focus on business objectives. 

To enact appropriate changes that lessen 

inequitable barriers to women leadership 

positions, it is essential to address fundamental 

questions about the norms and 

values that are still commonly found in organizations. 

These include policies and practices 

that favor behaviors and attitudes that 

were created under different societal norms, 

when men were expected to dedicate themselves 

solely to careers and women were 

expected to be homemakers. It behooves 

businesses to dig beneath the surface and 

consider unintended consequences of supposedly 

gender- neutral policies. What is 

clear is that unless specific interventions are 

undertaken, the glass ceiling will remain. 

Conclusion 

It’s apparent that glass barriers still exist. 

Businesses must take care to level the playing 

field for women. At a minimum, organizations 

should develop checks and balances 

that root out unconscious biases. Conduct 

a self assessment to collect and review the 

advancement and growth of women within 

your organization to ensure that you walk 

the talk and provide advancement opportunities, 

access to leadership, and development 

prospects to women across all levels. 

We all understand the many challenges 

that are inherent in organizations due to 

the structures that can make retaining 

and advancing women difficult generally. 

Law firms have a revenue system based on 

billable hours, and the difficulty of maintaining 

a work-life balance in the face of 

pressures to meet official or unofficial billable 

hour commitments makes promoting 

valued women challenging. In corporations, 

a relatively flat structure with little 

attrition limits opportunities to advance 

women. These structural challenges make 

it essential that employers recruit, retain, 

and promote the best employees, regardless 

of race, ethnicity, or gender. Viewing this 

as imperative will help organizations to 

achieve goals and overall business success. 

Women have achieved substantial gains 

in the workplace in the last decade. However, 

we still have immense challenges to 

overcome such as rationalizing poor leadership 

rates as innate to human relationships 

or due to external circumstances. As 

apparent from the discrepancy between the 

percentage of women holding business leadership 

positions and on corporate boards, 

the glass ceiling remains firmly in place as 

an obstacle to advancement for women, and 

we still have work to do. We hope that employers 

will double their efforts and continue 

to break the barriers that block upward mobility 

for women in the workplace.

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© 2011 FTI Consulting, Inc. FTI Technology LLC is a business of FTI Consulting, Inc.


From the Chair 

By Mark S. Sidoti 

A Port in 

the Storm 

of Change 

Providing guidance when 

facing the three “c”s of 

e-discovery evolution— 

complex, controversial, 

and constant. 

■ Mark S. Sidoti, Chair of DRI’s Electronic Discovery Committee, is a director at Gibbons P.C. in the firm’s New York City office. 

He heads the firm’s E-Discovery Task Force and frequently publishes and lectures on e- discovery and information management 

best practices. He is a member of the Sedona Conference Working Group on Electronic Document Retention and Production and 

numerous other e- discovery organizations. 


In the event that anyone has not noticed, the challenges of 

e discovery are not going away any time soon—they are 

just evolving. Legal educators, law firms and the judiciary 

are scrambling to develop programs to keep pace with 

this rapidly evolving area of the law. Certification 

courses, multi- day CLE programs, there be any new federal rulemaking in 

growing for changes to the FRCP. Should 

bench and bar mini- conferences, think this area If so, should the rules expressly 

tanks and webinars seem to be springing state that litigation hold be triggered only 

up everywhere to address the latest legal when there is a reasonable expectation of 

issues, rulemaking debates, and technologies 

of e- discovery and information man- 

mandate that sanctions be imposed only 

the certainty of litigation Should the rules 

agement in an increasingly digital age. in the event of willful destruction intended 

Often it feels—at least to me—that lawyers 

are “chasing their tails” when it comes tion Should the rules contain express lim- 

to prevent the use of information in litiga- 

to electronic discovery—trying to settle its regarding the types of information to be 

on the most effective, efficient, and reliable 

methods of managing the unman- 

custodians each side can request These 

preserved, and number of search terms and 

ageable. We are searching for solutions to and many other questions are being discussed 

by the preeminent thought leaders 

problems that often take on new and more 

challenging dimensions, long before even in e- discovery. 

the most committed of us can reach a consensus. 

Indeed, early predictions were that Rader of the Federal Circuit announced 

Also in September, Chief Judge Randall 

the challenges of preserving, collecting, that the Advisory Council of the Federal 

and evaluating huge volumes of electronic Circuit unanimously adopted a Model 

data for litigation, investigation, and audit Order regarding e- discovery in patent 

should have become more manageable with cases. Its purpose is to serve as a “starting 

point” for district courts to streamline 

advances in technology and attorney education. 

In light of the ever expanding role and reduce e- discovery costs, emphasizing 

email production limits. Under the 

of e- discovery in every facet of litigation, 

these predictions seem almost naïve in Model Order, e-mail discovery must be 

retrospect. The challenges are greater than phased in after initial disclosures and production 

of basic documentation about 

ever. Three recent developments are indicative 

of the current intense level of debate patents, prior art, accused devices and 

and scrutiny. 

financials have progressed. E-mail document 

requests must be propounded on 

In September of 2011, a specially formed 

subcommittee of the federal Civil Rules specific issues; global requests will not cut 

Committee met at a “mini- conference” in it. Among other novel—and some would 

Dallas to discuss approaches to rulemaking 

in e- discovery, including possible addi- 

mandates that e-mail discovery requests 

say, radical—approaches, the Model Order 

tional amendments to the Federal Rules are required to be specifically limited as to 

of Civil Procedure regarding preservation custodians, search terms, and timeframes, 

and spoliation. Numerous individuals and with only five custodians and five search 

organizations submitted detailed proposals terms per custodian per party permitted, 

on these topics for consideration, addressing 

the key concerns of over- preservation, Finally, just this past October, the Judi- 

absent a showing of distinct need. 

litigation hold triggers, regulation of presuit 

conduct, sanctions standards, and ern District of New York issued a report on 

cial Improvements Committee of the South- 

cooperation among litigants. A clear picture 

emerged that U.S. corporations are Case Management Techniques for Com- 

the initiation of a Pilot Project Regarding 

needlessly spending millions of dollars plex Civil Cases in that district. The pilot 

on preservation and e- discovery in a wide project is designed to run for 18 months 

variety of cases. It appears a consensus is Port in the Storm, continued on page 66 



Controlling E-Discovery 

By John J. Jablonski 

and Phillip J. Duffy 

Drafting an 

Effective Records- 


Even small steps to ensure 

compliance can go a long 

way toward protecting a 

company in the long run. 

Having a solid records management policy and recordsmanagement 

program is critically important for companies 

of all shapes and sizes. As courts continue to issue 

lengthy judicial opinions sanctioning litigants for failing 

to preserve potentially relevant documents 

and data, companies have become cognizant 

of the importance of issuing and 

complying with carefully tailored records 

management policies. Having a systematic, 

well documented, and thoughtful business 

approach to retaining, managing, 

and ultimately destroying expired, obsolete, 

or temporary records is often the best 

defense to allegations of spoliation when 

an opponent seeks sanctions for missing 

documents or electronically stored information 

(ESI). 

Records-Management 

Policies Are Important 

A recordsmanagement policy supports the 

good-faith efforts of a company to retain 

and dispose of records in a documented, 

systematic manner. A recordsmanagement 

policy guides a company by identifying the 

“official” records of the company, who custodians 

of official records are, and the company’s 

policy toward all other records, often 

called “unofficial” records or “non- records.” 

A recordsmanagement policy defines retention 

periods for records needed for various 

legitimate business purposes such as 

(1) keeping records as long as necessary to 

comply with legal and regulatory requirements, 

(2) keeping records used by a company 

to conduct business, (3) minimizing 

the volume of duplicate copies of records, 

(4) reducing storage and maintenance costs, 

(5) ensuring the timely disposal of information 

copies and other nonessential records, 

(6) creating procedures to dispose of 

expired or obsolete records systematically 

that no longer reflect a company’s current 

business practices, (7) helping employees 

comply with the policy, and (8) implementing 

effective legal holds and preserving records 

when required because of a lawsuit 

or investigation. 

With increasing frequency, clients ask 

attorneys to assist them to develop and 


■ John J. Jablonski is the chair of Goldberg Segalla’s E- Discovery Practice Group and concentrates his practice 

on commercial and business litigation, developing records management and legal hold policies and 

procedures, counseling companies on defensible preservation practices, and supporting trial teams on e- 

discovery issues. He is currently the vice chair of DRI’s Electronic Discovery Committee. Phillip J. Duffy is a director 

in the Products Liability Department at Gibbons P.C. in Newark, New Jersey. He is a founding member 

of the firm’s Electronic Discovery Task Force and an active member of DRI’s Electronic Discovery Committee.

implement these policies. So it is particularly 

important for attorneys to understand 

the importance of good records management, 

the benefits of having a defensible 

policy, and to learn some of the key provisions 

that go into a well-crafted recordsmanagement 

policy. 

For one thing, a recordsmanagement 

policy can control e- discovery. Gaining 

control of company data is critical, and 

this is best accomplished by developing 

and implementing a written recordsmanagement 

policy. A comprehensive 

recordsmanagement policy is an effective 

step toward ensuring compliance with 

future e- discovery obligations. In fact, 

a well-crafted policy not only will help 

ensure that a company meets its preservation 

obligations, but it may insulate a 

company from sanctions. Federal Rule of 

Civil Procedure 37(f) provides a limited 

“safe harbor” prohibiting the imposition 

of sanctions under the rules absent exceptional 

circumstances if a party loses ESI as 

a result of the “routine, good faith operation” 

of an electronic information system. 

Courts will more likely than not deem an 

electronic system as operating in good 

faith when a well- constructed recordsmanagement 

policy undergirds the system’s 

operation. Moreover, in addition to 

thwarting spoliation sanctions, having an 

effective recordsmanagement policy is 

rapidly transforming from a best practice 

to a required one. Indeed, the Internal Revenue 

Service (IRS) recently revised Form 

990, the annual information return filed by 

most publicly supported exempt organizations, 

to include several questions regarding 

corporate governance, board structure, 

and organizational policies, one of which 

specifically asks an exempt organization 

whether it has a written document retention 

policy in place. For all of these reasons, 

it is important for companies to develop 

written recordsmanagement policies. 

Creating an Effective Records- 


To create an effective recordsmanagement 

policy the creators need to understand 

the principles of records management and 

generally accepted recordkeeping principles. 

Luckily professional organizations 

offer reputable resources that an attorney 

or a company can refer to begin to develop 

this essential knowledge. First, however, 

we need to define “records” preliminarily. 

Defining “Records” 

The Federal Records Act, 44 U.S. Code 3301, 

although not strictly speaking applicable, 

provides a useful definition of records. It 

defines U.S. government records as 

all books, papers, maps, photographs, 

machine- readable materials, or other 

documentary materials, regardless of 

physical form or characteristics, made 

or received by [an agency] in connection 

with the transaction of public business 

and preserved or appropriate for preservation 

by [the agency] as evidence of the 

organization, functions, policies, decisions, 

procedures, operations, or other 

activities of the Government or because 

of the informational value of the data 

in them. 

Principles of Records Management 

While many recent spoliation cases provide 

detailed guidance on legally defensible 

document preservation methods, little case 

law exists that defines acceptable recordkeeping 

practices. Lawyers are nevertheless 

called upon more and more to offer legal 

opinions related to recordsmanagement 

policies and records- retention schedules. 

The principles associated with good recordkeeping 

practices are derived from a number 

of sources. 

The goals of a properly constructed 

recordsmanagement policy are multifaceted. 

First, the policy should address 

all five stages of the information life 

cycle—creation, identification, retention, 

retrieval, and ultimate disposition—for 

both electronic and hard copy records. Second, 

a policy should account for existing 

regulatory- based preservation obligations, 

as well as those dictated by a company’s 

business needs and potential litigation 

risks. Third, a policy should contain welldefined 

procedures for suspending routine 

computer operations that might overwrite 

or destroy data when complying with preservation 

obligations related to a legal hold, 

such as those imposed by actual or reasonably 

anticipated litigation, governmental 

investigations or audits. 

Creating a comprehensive recordsmanagement 

policy involves carefully 

assessing corporate electronic data and 

storage practices. An ideal policy should 

retain the records necessary for business 

purposes and to satisfy legal and regulatory 

obligations and discard the remainder. 

Accomplishing this is easier said than 

done and requires a company to reconcile 

the competing interests and the inevitable 

clash of mindsets. For example, it 

is certainly not uncommon for information 

technology professionals to want to 

keep multiple backup copies of data in 

case of a disaster and for other reasons, 

while legal counsel usually focus on retaining 

only those documents necessary to 

meet legal requirements. So the best document 

retention policies usually result from 

extensive collaboration among in-house 

counsel, business personnel, IT specialists, 

and outside counsel. It is also important 

that employees understand up front that a 

company’s recordsmanagement policy has 

the support of the company board, C-level 

executives, or both. 

The components of a successful program 

are the following. The policy should be 

clearly written and easily understandable 

by all employees. The policy should identify 

specific categories of documents and 

assign appropriate retention and destruction 

schedules. It should, to the extent possible, 

identify the personnel responsible for 

performing key retention and destructionrelated 

tasks. Moreover, the policy should 

prescribe and define chains of reporting, 

documentation, and accountability. 

Before finalizing a policy, it is important 

to circulate the policy among key players 

to obtain the kind of useful comments 

and suggestions that will allow a company 

to implement the policy successfully. Document 

retention policies are not one-sizefits-all 

exercises. Understanding corporate 

culture is paramount to drafting an appropriate 

and successful policy “individualized” 

to a company so that it will use terms 

that all employees understand. Feedback 

allows a drafter to make a policy more specific 

and tailor it to the needs of a company 

and generally contributes to the kind 

of overall “buy in” at all levels necessary to 

ensure successful implementation. 

“Generally Accepted 

Recordkeeping Principles” 

ARMA International released “Generally 

Accepted Recordkeeping Principles,” 



(GARP), in 2009. See The Generally Accepted 

Recordkeeping Principles, http:// 

www.arma.org/garp/. ARMA International is 

a nonprofit professional association and a 

recognized authority on managing records 

and information. GARP provides a useful 

framework for attorneys asked to assist 

clients with revising or preparing recordsmanagement 

policies. These principles were 

Courts will more 

likely than not deem an 

electronic system as 

operating in good faith 

when a well- constructed 

records-management 

policy undergirds the 

system’s operation. 

developed by leading industry experts and 

are similar but not as detailed as the “Generally 

Accepted Accounting Principles.” 

The GARP principles are designed to provide 

a theoretical framework for the development, 

implementation, and audit of 

recordkeeping programs around the world. 

The eight principles are comprehensive in 

scope but general in nature. They are not intended 

to serve as a legal rule. They outline 

the characteristics of an effective recordkeeping 

program but they do it flexibly, 

recognizing an organization’s unique circumstances 

due to size, sophistication, legal 

environment, or resources. 

The GARP principles follow. 

• Preamble 

Records and recordkeeping are inextricably 

linked with any organized 

activity. It is only through the information 

an organization records in the 

normal course of business that it can 

know what it has done and effectively 

plan what it will do in the future. As 

a key resource in the operation of any 

organization, records must be created, 

organized, secured, maintained, 


and used in a way that effectively supports 

the activity of that organization, 

including: 

• Facilitating and sustaining day-today 

operations 

• Supporting predictive activities such 

as budgeting and planning 

• Assisting in answering questions 

about past decisions and activities 

• Demonstrating and documenting 

compliance with applicable laws, 

regulations, and standards 

• Principle of Accountability 

An organization shall assign a senior 

executive who will oversee a recordkeeping 

program and delegate program 

responsibility to appropriate 

individuals, adopt policies and procedures 

to guide personnel, and ensure 

program auditability. 

• Principle of Integrity 

A recordkeeping program shall be 

constructed so the records and information 

generated or managed by or 

for the organization have a reasonable 

and suitable guarantee of authenticity 

and reliability. 

• Principle of Protection 

A recordkeeping program shall be 

constructed to ensure a reasonable 

level of protection to records and 

information that are private, confidential, 

privileged, secret, or essential 

to business continuity. 

• Principle of Compliance 

The recordkeeping program shall be 

constructed to comply with applicable 

laws and other binding authorities, 

as well as the organization’s policies. 

• Principle of Availability 

An organization shall maintain 

records in a manner that ensures 

timely, efficient, and accurate retrieval 

of needed information. 

• Principle of Retention 

An organization shall maintain its 

records and information for an appropriate 

time, taking into account legal, 

regulatory, fiscal, operational, and historical 

requirements. 

• Principle of Disposition 

An organization shall provide secure 

and appropriate disposition for 

records that are no longer required to 

be maintained by applicable laws and 

the organization’s policies. 

• Principle of Transparency 

The processes and activities of an 

organization’s recordkeeping program 

shall be documented in an understandable 

manner and be available to 

all personnel and appropriate interested 

parties. 

ARMA International, Generally Accepted 

Recordkeeping Principles®, available at 

http://www.arma.org/garp/ (last visited Jan. 

19, 2011). 

ISO 15489-1 Information and 

Documentation—Records 

Management—General 

Additional reputable guidance is available 

through the International Organization for 

Standardization (ISO), which provides guidance 

on various industry specific topics. 

With the help of ARMA International, ISO 

15489-1 was published in 2001. International 

Standard ISO 15489-1, Information and documentation—Records 

management—General 

(2001) provides worldwide best practices 

guidance on recordsmanagement principles. 

Its implementing companion standard, 

ISO 15489-2, Information and documentation—Records 

management—Guidelines 

(2001), provides guidance on creating and 

implementing recordsmanagement programs. 

These standards and guidelines are 

internationally recognized as providing a 

responsible framework in which to manage 

an organization’s records. 

ISO 15489-1 defines “records” as “information 

created, received, and maintained 

as evidence and information by an organization 

or person, in pursuance of legal obligations 

or in the transaction of business.” 

Specifically, the standard states that 

[r]ecords contain information that is 

a valuable resource and an important 

business asset. A systematic approach 

to the management of records is essential 

for organizations and society to protect 

and preserve records as evidence of 

actions. A records management system 

results in a source of information about 

business activities that can support subsequent 

activities and business decisions, 

as well as ensuring accountability 

to present and future stakeholders. 

Legitimate Systematic Destruction 

of Records Is Legal 

As the Supreme Court has noted, “[d]ocu-

ment retention policies, which are created 

in part to keep certain information 

from getting into the hands of others, including 

the Government, are common in 

business. It is, of course, not wrongful 

for a manager to instruct his employees 

to comply with a valid document retention 

policy under ordinary circumstances.” 

Arthur Andersen LLP v. United States, 544 

U.S. 696, 704 (2005) (internal citation and 

quotation marks omitted). As a result “a 

party can only be sanctioned for destroying 

evidence if it had a duty to preserve 

it.” Zubulake v. UBS Warburg LLC, 220 

F.R.D. 212, 216 (S.D.N.Y. 2003). The tricks 

are to know when a company can legally 

destroy records and when it cannot and to 

craft a recordsmanagement policy and a 

documentretention policy that appropriately 

makes the distinction. 

advance for the eventuality of litigation. 

Under the e- discovery amendments to the 

Federal Rules of Civil Procedure once a 

party files a lawsuit in a federal court the 

litigating parties must analyze the existence 

and relevance of ESI within 90 days. 

This offers litigants very little time to prepare 

for the mandatory meet and confer 

unless they have already considered that 

they might face litigation at some point. 

A Company Should Train Employees 

on and Ensure That They Comply 

with a Document-Retention Policy 

Once a company has prepared, circulated, 

vetted, and implemented a documentretention 

policy, the company should 

republish it at regular intervals. A company 

should offer training to employees on how 

to implement the policy so that they clearly 

understand their document- management 

duties and responsibilities. A company 

should document that this training took 

place. Moreover, a company should periodically 

monitor employee compliance 

and document that monitoring took place. 

Every so often a company should revise and 

modify the policy as the company’s needs 

or experiences dictate. 

A company also should provide copies 

of the company’s documentretention policy 

during training sessions for new hires 

and reissue it during refresher courses 

as necessary. A well-drafted policy complemented 

by consistent monitoring and 

enforcement, builds a culture of compliance 

that will serve a company well in the 

event of litigation. 

Organizations Must Plan in Advance 

for Litigation Eventualities 

E-discovery is here to stay. The sheer volume 

of ESI is staggering. A company must 

have “at the ready” an in-house or hired 

technology expert to help preserve, collect, 

and produce ESI. A company must plan in 

When sophisticated networks, custom data sets, or antiquated 

technologies stand between you and critical information, call Semke 

Forensic for solutions. Our experts advise Litigation, Insurance and 

Corporate clients on matters of electronic discovery and the technical 

complexities that accompany them. Semke Forensic possesses the tools 

and skills necessary to identify and obtain key electronic evidence. 

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Having an effective 

records-management policy 

is rapidly transforming 

from a best practice 

to a required one. 


An organization ideally should have an 

adequate e- discovery plan in place before 

someone sues the organization. We recommend 

making this a number one priority. 

Without a prelitigation e- discovery plan 

in place, an organization risks sanctions 

and other intangible losses when sued. 

For example, in one discovery dispute the 

court ordered the defendant to participate 

in depositions relating to the defendant’s 

entire data storage system to help 

the plaintiff develop a search protocol for 

searching the defendant’s electronic claim 

files. In Zurich Am. Ins. Co. v. Ace Am. 

Reins. Co., No. 05 CIV 9170 RMB JCF, 2006 

WL 3771090 (S.D.N.Y. Dec. 22, 2006), the 

defendant submitted an affidavit of the 

individual responsible for handling the 

defendant’s claims, which included the 

claim involving the plaintiff. The affidavit 

stated that the defendant’s computer 

system could not segregate claims by the 

amount of the claim, the type of claim, or 

the reason that the defendant may have 

denied the claim, although the defendant 

processed thousands of claims. 

The court held that a “sophisticated [entity] 

that operates a multimillion dollar 

business is entitled to little sympathy for 

utilizing an opaque data storage system, 

particularly when, by the nature of its business, 

it can reasonably anticipate frequent 

litigation.” The court recognized, however, 

that the volume of data rendered searching 

the entire database infeasible. The court ordered 

the parties to propose a protocol for 

sampling the relevant claim files. To facilitate 

the process, the plaintiff was permitted 

to depose the affiant mentioned above and 

other persons familiar with the defendant’s 

data- storage system. The court ordered the 

defendant to support objections to the sampling 

proposal with “specific evidence of the 

cost and burden involved.” If the defendant 

had considered litigation needs before litigation 

actually happened, the court may 

not have ordered depositions about the defendant’s 

entire data- storage system and 

saved the defendant the costly e- discovery 

that certainly followed. 

A Good Litigation Hold Policy Is 

Critical to Preservation Success 

By now the courts have made it generally 

understood that parties must take 

reasonable and good-faith efforts to preserve 

electronic evidence and documents 

that may be relevant to pending or threatened 

litigation and that issuing a written 

legal hold directive is a critical first step in 

attempting to meet this obligation. Therefore, 

a good records- retention policy must 

clearly include and ensure that a company 

issues timely legal holds and educates 

employees about the importance and general 

mechanics of legal holds. Although a 

legal hold directive will vary with the circumstances, 

a successful legal hold policy 

has several standard components that 

a company should incorporate into or at 

least reference in the company documentretention 

policy to the extent possible. 

A legal hold policy, also called a litigation 

hold, a records hold, or a hold order, 

is a necessary component of a recordsmanagement 

policy. A legal hold policy 

should include language that protects a 

company and limits the legal hold obligation 

to its appropriate circumstances. The 

policy should specify that the scope of a 

legal hold shall be reasonable considering 

the issues, actual or anticipated claims, 

defenses, and pertinent time periods. It 

should further specify that a company 

shall only distribute a legal hold notice to 

key custodians, meaning those employees, 

departments, other individuals, or entities 

which the company has identified as potentially 

having possession, custody, or control 

of documents or data that may fall within 

the scope of the hold as the company deems 

necessary. 

All Employees Must Work from 

the Same Legal Hold Map 

A company should advise the company 

employees through appropriate policy provisions 

that, at the company’s discretion, 

the company may apply company policies 

and procedures to preserve documents and 

data for legal purposes when warranted. 

Employees should understand that a legal 

hold simply means that they must preserve 

and must not destroy certain information. 

A company should direct company employees 

that the legal hold policy (1) shall apply 

to documents regardless of form or storage 

medium, and specifically includes electronically 

stored information as well as 

paper documents; (2) shall take priority 

over the company’s documentretention 

policy any time the company issues a legal 

hold notice; (3) shall not impose any duty 

or obligations beyond those imposed by 

applicable law or regulations; and (4) may 

be reviewed or revised at any time by the 

company. A legal hold policy should also 

explain to employees the circumstances 

under which a company may issue a legal 

hold. To this end, a company should advise 

employees that the company shall suspend 

its documentretention policy and 

issue a legal hold notice when the company 

(1) learns of pending litigation, (2) is 

notified of a credible threat of litigation, or 

(3) learns of another legal duty to preserve 

documents or data. 

Recent Legal Hold Case Law 

Recently, a number of courts have issued 

significant judicial opinions directly 

addressing legal holds. These cases detail 

steps that various courts around the country 

deem necessary to evidence preservation. 

A court may sanction a company if it 

does not take some basic steps to support 

issuing a legal hold when a company reasonably 

anticipates litigation. 

Judge Shira Scheindlin, well known to litigation 

attorneys preserving evidence, issued 

a series of seminal opinions that defined a 

legal hold in the Zubulake v. UBS Warburg 

case in 2004 and 2005. Courts throughout 

the United States have widely cited the Zubulake 

opinions in other opinions. Scheindlin 

“revisited” the preservation standards articulated 

in the Zubulake cases in an 89-page 

comprehensive legal hold opinion in The Pension 

Comm. v. Banc of America Sec., No. 05 

Civ. 9016 (SAS), 2010 WL 184312 (S.D.N.Y. 

Jan. 15, 2010), even subtitling the opinion 

“Zubulake: Six Years Later.” 

In the Pension Committee opinion, 

Scheindlin reiterated many of the concerns

aised by the Zubulake case six years earlier. 

In the Pension Committee case tremendous 

legal resources were devoted to arguments 

over the shoddy legal hold efforts of a group 

of plaintiffs. The plaintiffs’ failure to issue 

timely legal hold notices and to enforce the 

legal holds properly now seriously jeopardize 

their case. Scheindlin concluded 

that an organization’s failure to issue written 

legal holds will inevitably result in the 

destruction of relevant evidence. 

Shortly thereafter, Judge Lee Rosenthal 

also called into question legal hold practices 

in Rimkus v. Cammarata, No. 07-cv- 

00405 (S.D. Tex. Feb. 19, 2010). The opinion 

singled out the need for better preservation 

practices to maintain the integrity 

of the judicial process. “Spoliation allegations 

and sanctions motions distract from 

the merits of a case, add costs to discovery, 

and delay resolution,” wrote Rosenthal, 

who chose not to impose monetary sanctions 

based on the facts of the case, instead 

opting to instruct the jury about the defendants’ 

willful destruction of evidence. 

Two more recent cases reaffirm Scheindlin’s 

position that the lack of written legal 

holds will inevitably lead to the wrongful 

destruction of relevant evidence. In Crown 

Castle USA, Inc. v. Nudd Corp., No. 05-CV- 

6163T, 2010 WL 1286366 (W.D.N.Y. Mar. 

31, 2010), the plaintiff failed to issue a legal 

hold resulting in the “wholesale destruction” 

of responsive ESI. The court deemed 

the behavior grossly negligent and compelled 

the plaintiff to undertake extensive 

effort to recover the lost data to avoid even 

harsher monetary sanctions. 

In late April 2010, U.S. District Judge 

Richard Sullivan issued severe sanctions 

for a party’s failure to issue a written legal 

hold in Merck Eprova v. Gnosis, No. 07-CV- 

5898 (RJS) 2010 WL 1631519 (S.D.N.Y. Apr. 

20, 2010). Making frequent references to 

Scheindlin’s Pension Committee opinion, 

the court declared, “[t]here is no doubt 

that Defendants failed to issue a legal hold” 

and deemed “this failure… a clear case of 

gross negligence.” In addition to requiring 

the defendants to pay the plaintiff’s legal 

fees and costs, Sullivan fined the defendants 

$25,000 “both to deter future misconduct… 

and to instill… some modicum of 

respect for the judicial process.” 

The need to issue a legal hold policy in 

conjunction with a recordsmanagement 

policy was made clear in Jones v. Bremen 

High School, No. 08 C 3548 (N.D. Ill. May 25, 

2010). In Jones an Illinois court expressed 

complete dismay with the defendant’s lackadaisical 

approach to records management. 

In this discrimination case, the defendant’s 

actions included failing to issue a legal hold, 

adhere to a published documentretention 

program, and suspend automatic deletion 

of relevant electronic files. During discovery, 

the IT manager at the suburban Chicago 

school district testified about certain 

recordkeeping practices that were at odds 

with the organization’s publicly available 

recordsmanagement policy. This dichotomy 

did not sit well with the judge. Sanctions 

included special jury instructions and 

additional discovery costs. 

Implementing a Good Legal Hold 

Involves Taking Seven Steps 

Although courts often declare that preservation 

perfection is not the goal, spoliation 

cases do require companies to take 

reasonable and good-faith steps to prevent 

spoliation. The necessary steps are best 

understood as a seven-step business process. 

See John J. Isaza and John J. Jablonski, 

Seven Steps for Legal Holds of ESI and 

Other Documents (ARMA International 

2009) (discussing legal holds in detail). The 

seven steps are as follows. 

First, identify the trigger event. Issuing 

a legal hold becomes necessary when an 

organization “reasonably anticipates” litigation 

or regulatory action. Once the duty 

to preserve is triggered, an organization 

must take steps to ensure that it preserves 

potentially relevant data. Examples of typical 

trigger events include the filing of a lawsuit, 

a notice or threat of an intent to file a 

lawsuit, the occurrence of an events that 

typically will result in legal action such as a 

significant monetary loss, a severe injury or 

death, a breach of a contract, or a product 

defect, or the filing of an employment claim 

an agency such as the U.S. Equal Employment 

Opportunity Commission. An often 

overlooked “trigger event” occurs when an 

organization first contemplates taking a 

legal action as a plaintiff. 

Second, analyze the duty to preserve. 

Once an organization has identified the 

duty to preserve, the organization must 

determine if it needs to implement a legal 

hold. An organization’s general counsel, 

chief compliance executive, or an outside 

counsel typically does the analysis leading 

to the decision to implement a legal hold. It 

is important to keep in mind that a court 

judges an organization’s knowledge on a 

“knew or should have known” standard 

if spoliation occurs. If people exchange 

e-mails that say, “We are going to be sued 

over this,” it is reasonable to assume that 

Without a prelitigation 

e- discovery plan in place, an 

organization risks sanctions 

and other intangible 

losses when sued. 

a court will view the exchange as a trigger 

event. Lawyers can crucially resolve ambiguities 

or close calls. 

Third, define the scope of the legal hold. 

If an organization decides that it must preserve 

ESI and physical documents, the 

organization must define the scope of 

information that it will preserve. Custodians, 

meaning those individuals who have 

custody, ownership, or control over the 

information, must receive guidance about 

what information they need to preserve. 

Merely asking someone to “look for things 

to keep” or to “preserve relevant information” 

is insufficient to meet preservation 

obligations. Often defining the scope 

starts by identifying key players with direct 

knowledge of the specific legal matter. This 

will be a small group, but the number of 

individuals receiving hold instructions can 

be very large. For example, in an antitrust 

case a large multinational company could 

compel thousands of employees to preserve 

relevant e-mails and business records. 

Fourth, implement the legal hold. The implementation 

phase has been garnering the 

most scrutiny by the courts in recent court 

opinions. For this reason, the standards 

have become much more stringent, stemming 

directly from Scheindlin’s landmark 

Pension Committee opinion. It is becoming 

clear that issuing a timely written legal hold 

Records Mgmt., continued on page 69 



Company-Enabled 

Technologies, Social 

Networking Platforms, 

and Mobile Devices 

By John D. Martin 

and Heyward D. Bonyata 

Managing Electronic 

Discovery and 

Compliance Risks 

Increased efficiency, 

greater revenue, 

enhanced security, 

and legal defensibility 

are the rewards of 

a proactive data 

management strategy. 

Cloud computing, SharePoint, social networking websites, 

e-mail, text messages, and Twitter are just a few of 

the ways that employees collaborate, create, store, and 

instantly transmit ideas, images, and information. In 

today’s economic climate where market 

conditions and stiff competition demand 

quick responses, high productivity, and 

internal efficiencies, technology offers 

enormous value; however, it also carries 

with it significant business and legal 

risks. To implement and respond to rapidly 

evolving business technologies effectively, 

it is critical for counsel to have a good 

grasp of the methods and means by which 

employees are communicating, as well as 

to understand the legal risk factors and 

mitigation strategies associated with those 

methods and means. 

Communication Technology 

To mitigate the legal risks associated with 

collaborative technologies counsel need to 

understand cloud computing, Enterprise 

2.0, and basic social networking platforms. 

Cloud Computing 

Some define cloud computing narrowly 

as an updated version of utility computing—or 

virtual servers available over the 

Internet—while others argue that anything 

hosted outside a firewall is “in the 

cloud,” including conventional outsourcing. 

The National Institute of Standards 

and Technology (NIST) defines cloud computing 

as “a model for enabling convenient, 

on- demand network access to a shared 

pool of configurable computing resources 

(e.g., networks, servers, storage, applications, 

and services) that can be rapidly 

provisioned and released with minimal 

management effort or service provider 

interaction.” Peter Mell & Tim Grance, The 

NIST Definition of Cloud Computing: Recommendations 

of the National Institute of 

Standards and Technology 3, NIST Special 

Publication 800-145, (Nat’l Inst. of Standards 

& Technology Sept. 2011), http://csrc. 

nist.gov/ publications/nistpubs/800-145/SP800- 

145.pdf. Cloud computing makes it easier to 

communicate and work together on documents, 

calendars, and other collaborative 

projects. Employees of companies who 

use cloud computing can access information 

and run software applications wher- 


■ John D. Martin and Heyward D. Bonyata are attorneys at Nelson Mullins Riley & Scarborough, LLP based 

in Columbia, South Carolina. Mr. Martin is the leader of the firm’s Encompass E-Discovery and Document 

Review Solutions division, and Ms. Bonyata serves as the Encompass Operations Manager. Both authors are 

members of DRI’s Electronic Discovery Committee, for which Mr. Martin also serves as publications chair.

ever they may be, whenever they need it, 

and from virtually any device connected 

to the Internet. 

According to a January 2011 report by 

Cisco, 88 percent of IT respondents predicted 

that they would store some percentage 

of their companies’ data and 

applications in private or public clouds 

within the next three years. Cisco Connected 

World Report, Software World, Jan. 

2011, available at Westlaw 1/1/11 SOFT- 

WORLD 5. For companies that need to 

strictly control their IT infrastructure 

costs, cloud computing can be a tremendous 

asset, allowing businesses to pay only 

for the computing services that they need. 

Enterprise 2.0 

One of the most dynamic concepts impacting 

large businesses is Enterprise 2.0, 

which is the use of technologies to enable 

or streamline business processes while 

enhancing collaboration—connecting people 

through the use of social- networking 

tools. Enterprise 2.0 helps employees, customers, 

and suppliers collaborate, share, 

and organize information. In a study by 

AIIM Industry Watch Collaboration and 

Enterprise 2.0, 71 percent of people agreed 

that it was easier to locate “knowledge” on 

the web than on their own company’s internal 

systems. Doug Miles, Enterprise 2.0: 

Work-Meets-Play or the Future of Business, 

AIIM (Sept./Oct. 2009). Companies 

operating within an Enterprise 2.0 framework 

are seeking to reverse this trend with 

integrated internal networks. 

Integrated internal social networks typically 

offer a number of features: 

• Users have a rich social profile revealing 

their expertise, experience, knowledge, 

and results. 

• Employees have the ability to send and 

receive messages using microblogging, 

e-mails, and text messages. 

• The software may be integrated with 

SharePoint or devices such as smart 

phones and iPads. 

• Employees from many levels of an organization 

can submit ideas, vet them, 

refine them, and vote on them. 

• Internal communication improves, an 

organization can dissipate rumors, and 

it can address concerns directly where 

they’re posted. 

• The most popular content rises to the 

top, instantly plugging management 

into the virtual water cooler. 

• Productivity increases and turnover 

decreases creating a highly attractive 

environment for new talent. 

• New employees access institutional 

knowledge instantly driving learning 

curves down and results up. 

SharePoint, which is now prevalent in 

the business community, is a family of 

Microsoft document management products 

that facilitates collaboration, file sharing, 

and web publishing. Social networking 

platforms enable employees to engage in 

collaborative communication through 

online communities, discussions, wikis, 

and blogs, among other methods. Jive Software, 

for example, is a company that has 

developed a suite of corporate social networking 

tools tailored for various activities 

such as employee collaboration or brainstorming. 

Another popular provider of 

internal social networks is Yammer, which 

originally began as an internal version of 

Twitter, allowing employees to broadcast 

messages within a company or within certain 

company groups. Although Yammer 

offers an internal microblogging service, 

it is quickly becoming a comprehensive 

enterprise social network. 

Social Networking Platforms 

In addition to collaboration technologies 

used within companies, employees regularly 

use a number of popular public social 

networking platforms including, among 

others, Facebook, Twitter, LinkedIn, and 

MySpace. According to a July 2009 Morgan 

Stanley report, social networking 

users surpassed e-mail users worldwide. 

Morgan Stanley & Co. Inc., The Mobile 

Internet Report (Dec. 15, 2009), available 

at http://www.morganstanley.com/institutional/ 

techresearch/mobile_internet_report122009.html 

(last visited Dec. 29, 2011). Given the popularity 

of modern social networking platforms, 

many company employees will use 

one or more of these platforms on a regular 

or even daily basis. As of January 2011, 

Facebook had 600 million active monthly 

users, all of whom can create profiles with 

photos, lists of personal interests, contact 

information, and other personal information. 

Users communicate with friends and 

other users through private or public messages 

and a chat feature. They can also create 

and join special interest groups. Users 

often identify themselves as employees of 

a particular company on Facebook, and 

while an individual can set his or her Facebook 

page settings so that the page remains 

private, in practice anyone who is listed as a 

“friend” of that person can access it. 

Twitter is a microblogging service that allows 

users to send and read messages called 

tweets. It is estimated that Twitter has 190 

million users generating 65 million tweets 

per day. Tweets are publicly visible by default, 

although if a person writing a tweet 

takes a specific action, only that person’s followers 

can view his or her tweets. As with 

Facebook, Twitter users often identify themselves 

as employees of particular companies. 

Blogs are among the most public of 

all Web 2.0 communications. Outside of 

blogs that exist on internal company networks, 

most blogs are open to anyone with 

an Internet connection. It is common for 

employees to blog about their work and 

the companies that they work for, and a 

number of studies have indicated that this 

phenomenon can significantly impact company 

brand recognition. 

Instant messaging and text messages 

increasingly are also becoming routine. 

In 2008, for example, the total global user 

base for text messaging passed the three 

billion mark. Today 76 percent of all mobile 

phone subscribers worldwide use text messaging, 

also known as “SMS,” or “BBM” 

for instant communications sent by Blackberry’s 

service. Tomi T. Ahonen & Alan 

Moore, 3 Billion Use SMS, What Does That 

Mean, Communities Dominate Brands 

weblog (Mar. 6, 2009), http://communitiesdominate.blogs.com/brands/2009/03/3- 

billionuse- 

sms- what- does- that- mean.html. 

Devices Used by Employees to 

Communicate Information 

There are compelling business reasons 

for companies to encourage employees to 

use company- issued mobile- devices and, 

for decades, those resources have played 

important roles in workplaces. In recent 

years, there has been a considerable proliferation 

of the various types of devices 

available for use, allowing companies to 

enjoy even greater connectivity and business 

productivity than ever before. 

The business community widely uses 

smart phones such as iPhone, Droid, or 



Blackberry. They run complete operating 

system software, and most of them have 

the ability to capture images and video. 

According to a 2010 study by ComScore, 

out of 234 million total subscribers, over 

45.5 million people in the United States 

owned smart phones. Press Release, Michigan 

Educations Savings Program Launches 

New Mobile Phone Application, Pace & 

The most popular 

content rises to the 

top, instantly plugging 

management into the 

virtual water cooler. 

Partners (Jan. 6, 2011), http://www.misaves. 

com/documents/pr_011111.pdf. 

Tablet computers are also becoming 

increasingly popular tools in workplaces, 

the most popular of which is the iPad, 

which is light and portable with an attractive 

interface. iPads, which employees often 

use for a wide variety of business and personal 

uses, are able to wirelessly connect to 

networks, and many will run on networks 

provided and maintained by an employee’s 

company. 

Benefiting from New Technology 

in the Workplace 

Technologies benefit companies in many 

ways: they increase collaboration, efficiency 

and productivity; they play to the 

strengths that first-time entrants bring to 

the workplace; and they expand business 

promotion. 


Collaboration, Efficiency, and Productivity 

The corporate environment of the twentieth 

century was characterized by a vertical, 

top-down approach to communication and 

interaction. The twenty-first century corporate 

environment flattens this structure and 

has allowed coordination across geographically 

dispersed entities connected through 

electronic networks: “Work product, data, 

and information can now be transmitted 

rapidly and inexpensively, eliminating 

the need for hierarchical coordination 

structures. Individuals who work for interconnected 

and technologically advanced 

organizations are adapting and constantly 

learning.” Paul Asunda, Productivity, Social 

Networks and Net Communities in the 

Workplace, Techniques, May 1, 2010. Allowing 

and even training employees to interact 

in this relatively new world, microblogging, 

social networking, and cloud computing 

offer a number of advantages such as improved 

efficiency. Jive Software recently 

conducted a survey of 500 people in more 

than 300 of its customers that use internal 

social networks. Those businesses spanned 

high-tech, financial services, communications, 

health care, and other industries. According 

to the study, social networking tools 

increased the number of ideas generated 

and captured, raised employee satisfaction 

levels, and maximized project collaboration 

and productivity. Correspondingly, 

the amount of e-mail and time that employees 

expended finding answers significantly 

diminished. Clint Boulton, Social 

Software Boosts Employee, Customer Engagement: 

Jive, eWeek.com (Feb. 3, 2011), 

http://www.eweek.com/c/a/Messaging- and- 

Collaboration/Social- Software- Boosts- Employee- 

Customer- Enagement- Jive- 178705/. 

Skill Enhancement 

With Web 2.0 technologies present in 

virtually every industry and the digital 

age in full swing, the disparities between 

employees who are digital immigrants and 

those who are digital natives have become 

apparent. Digital immigrants learned their 

trades before computers took hold in the 

modern workplace, and they have had to 

adapt to remain current and effective on 

the job. Generally these employees typically 

are less inclined to embrace the latest 

technology fad until it had become a 

well- established tool. Digital natives, on the 

other hand, have made technology a way 

of life, and they are far more likely to stay 

abreast of emerging technological trends 

geared toward speed and efficiency than 

digital immigrants. 

Virtually anyone entering the workforce 

today for the first time is a digital 

native, and digital natives will soon outnumber 

the rest. In many industries, they 

already do. If companies hope to maximize 

employee satisfaction and harness productivity 

and efficiencies, it makes sense to 

incorporate the tools with which the majority 

of their employees are most comfortable 

into their business practices. 

Business Promotion 

New and emerging technologies can boost 

marketing efforts, increasing customer 

retention, brand awareness, customer feedback, 

and new customer sales, and they can 

decrease support call volume. Allowing 

employees to use public social networking 

tools, web-based technologies, and microblogging 

in the normal course of business 

offers tremendous marketing opportunities. 

Blogs, for example, can increase online 

visibility, enhance professional credibility, 

provide useful information to potential clients 

and attract new visitors to a company’s 

website; Twitter provides a personal, 

one-to-one connection through tweets 

from a “live” person; Facebook promotes a 

casual forum for interaction; and LinkedIn 

encourages exchanging credentials and 

nurturing professional relationships in a 

formal setting. 

Risks of Emerging Technology 

in the Workplace 

Although incorporating emerging technologies 

into a company’s business model 

arguably has enormous benefits, doing so 

also poses significant risks. 

Impact on and Security of 

Company Resources 

On the management front, emerging technology 

can affect resources, and ultimately 

revenue. While the number of applications 

found on corporate networks has remained 

relatively stable over the past year, the 

bandwidth that new applications consume 

has more than doubled and is expected to 

grow even more in the very near future. 

Additionally, because of the trust-based 

nature of public social networks, employees 

can unintentionally and unknowingly 

introduce malware and viruses into computer 

systems. 

As Enterprise 2.0 information sources 

proliferate, the need for a single search interface 

will become increasingly more important. 

As Martin Butler pointed out in 

The Business Value of Enterprise Search: 

A Review of Cost Effective Solutions for 

Managers, while search functions have

often been treated as afterthoughts, they 

deserve at least as much attention as information 

creation processes such as data entry 

and document creation and can create 

value from an organization’s information 

resources. In expanding the ability of employees 

to cull through a company’s data, 

awareness of the risks presented with enterprise 

search is critical, and an employee’s 

ability to search should ideally be managed 

in a way that prevents him or her from accessing 

sensitive information. Before introducing 

Enterprise 2.0, certain data may 

have existed on a company’s network, and 

while it may have been technically accessible 

by anyone on the network, the inability 

to search and cull that data meant that the 

information was effectively protected. As 

Enterprise 2.0 makes network data easy to 

locate and access, companies should consider 

enhancing security on individual sites 

and even on individual documents. 

Regarding mobile devices, employers 

should consider the risks that they involve 

before deploying the newest devices among 

their workforces or sanctioning their use. 

iPads, for example, lack many of the features 

that make devices such as BlackBerries 

easier to secure and control, and it is 

currently more difficult to limit the installation 

of applications or wireless connectivity 

of iPads than with other devices. The 

appeal and functionality of the iPad interface, 

coupled with the lack of corporate 

enterprise control over company- issued or 

personally acquired iPads, perfectly exemplifies 

the risks and benefits that companies 

will have to consider when implementing 

new technologies. 

On the personnel front, the amount of 

time that employees waste on social networking 

sites can also have a significant 

financial impact on a business’ bottom line. 

One study published last year by Morse, an 

IT company, estimated that personal use 

of social networks during the working day 

cost the British economy almost £1.4 billion, 

$2.3 billion, a year in lost productivity. 

Another study by Nucleus Research, an 

American firm, concluded that if companies 

banned employees from using Facebook 

while at work, their productivity 

would improve by 1.5 percent. Executive 

Briefing, The Economist, Feb. 2, 2010, available 

at Westlaw 2/2/10 EXECUTIVBRFG 6. 

The Economist, however, has argued that 

these studies may overstate potential productivity 

loss as the studies assume that 

employees would actually work rather than 

find some other way to pass the time that 

they have to spare. Id. 

Harmful Use of Emerging Technologies 

When an employee has identified himself 

or herself through social networking as an 

employee of a company, in a sense he or she 

speaks on behalf of the company, which 

can potentially have harmful consequences 

for the company. For example, an employee 

can commit copyright infringement if he or 

she posts content without the content owner’s 

permission. An employee can defame, 

libel or slander if the employee makes a 

false claim about a person or competitor’s 

product. An employee can disclose propriety 

or confidential information by divulging 

highly sensitive information. When an 

employee speaks on company issues without 

authority, he or she could harm the 

company. Or an employee could create an 

employment issue by posting something to 

Facebook, Twitter or Yammer that he or she 

would never normally put formally in writing 

in either an e-mail or a letter. 

Relevance and Discoverability 

Due to the increasing use of electronic 

media, “the universe of discoverable material 

has expanded exponentially,” and 

discovery costs have skyrocketed. See 

Zubulake v. U.B.S. Warburg, L.L.C. (Zubulake 

I), 217 F.R.D. 309, 311 (S.D.N.Y. 2003). 

Discovery is no longer “just about uncovering 

the truth, but also about how much 

of the truth the parties can afford to disinter.” 

Id. 

The duties to preserve and produce documents 

relevant to litigation are not new. 

However, electronic media use has broadened 

the scope of that duty greatly. Because 

the amount of information has increased 

exponentially, the difficulty in identifying, 

preserving, and producing information 

that is relevant to a lawsuit is greater than 

it has ever been. 

Courts have consistently held that information 

stored in electronic format is discoverable 

under the Federal Rules of Civil 

Procedure as long as it is within the scope 

defined by the rules. Federal Rule of Civil 

Procedure 26 permits parties to “obtain discovery 

regarding any matter, not privileged, 

that is relevant to the claim or defense of 

any party.” Fed. R. Civ. P. 26(b)(1). The 1970 

Advisory Committee Notes regarding Federal 

Rule of Civil Procedure 34(a) specifically 

recognizes that discovery procedures 

under the federal rules apply to electronic 

data and information. Fed. R. Civ. P. 34(a) 

advisory committee’s notes, (1970). Similarly, 

the 1993 Advisory Committee Notes 

to Federal Rule of Civil Procedure 26(a)(1) 

(B) indicate that parties should disclose the 

“nature and location” of “computerized data 

and other electronically recorded information.” 

Fed. R. Civ. P. 26(a)(1)(B) advisory 

committee’s notes (1993). 

Discovery requests targeting relevant 

electronic information the privileges do not 

protect and that do not run afoul of Federal 

Rule of Civil Procedure 26 are appropriate 

under the federal rules. For example, courts 

have routinely held that electronic information 

is discoverable in forms such as 

computer magnetic tapes, disks, computer 

files, e-mails, backup systems, and hard 



drives among other forms. See, e.g., Zubulake 

I, 217 F.R.D. at 317 (“[plain tiff] is entitled 

to discovery of the requested e-mails 

so long as they are relevant to her claims”); 

Antioch Co. v. Scrapbook Borders, Inc., 210 

F.R.D. 645, 652 (D. Minn. 2002) (“[I]t is a 

well accepted proposition that deleted computer 

files, whether they be e-mails or otherwise, 

are discoverable.”) Moreover, due to 

Virtually anyone entering 

the workforce today for the 

first time is a digital native, 

and digital natives will 

soon outnumber the rest. 

the unique nature of computerized data litigants 

can discover even “deleted” electronic 

information because a backup or emergency 

system will often save it. See Simon Property 

Group, L.P. v. MySimon, Inc., 194 F.R.D. 639, 

640 (S.D. Ind. 2000) (“[C]om puter records, 

including records that have been deleted, 

are documents discoverable under Fed. R. 

Civ. P. 34.”). 

The discoverability of emerging social 

media presents some unique challenges. 

Information from internal instantmessaging 

chats, virtual desktops, Yammer, 

Facebook, or Twitter posts can provide 

evidence vital to disputes and regulatory 

proceedings: “Indeed, such evidence may 

be the new ‘smoking gun’ in many cases.” 

Steven C. Bennett, Civil Discovery of Social 

Networking Information, 29 S.W. Law Rev. 

413, 413–14 (2010). 

In 2006, the U.S. Supreme Court 

amended the Federal Rules of Civil Procedure 

to create a category for electronic 

records that for the first time explicitly 

named e-mails and instant- message chats 

as records that businesses should probably 

archive and produce when relevant. 

Although the case law discussing the discoverability 

of information on the newly 

emerging external and internal social 

networks is less than robust, the limited 

authority on point indicates that litigants 

may potentially discover that information. 


Flagg v. The City of Detroit was a key case 

that addressed discovering instant messaging 

and other social online tools. No. 05- 

74253, 2008 WL 787039, at 3–7 (E.D. Mich. 

Mar. 20, 2008). In Flagg, the court stated 

that the plaintiff could pursue some but 

not all text messages exchanged between 

officials or employees during specific time 

frames. The court also stated that it would 

put into place a mechanism to review the 

text messages. The courts have made it clear 

that litigants can discover those things individuals 

or organizations post publicly. 

See Katiroll Co., Inc. v. Kati Roll & Platters, 

Inc., No. 10-3620 (GEB), 2011 WL 3583408 

(D.N.J. Aug. 3, 2011) (ordering the defendant 

to re-post a Facebook profile picture showing 

an allegedly infringing trade dress to 

allow the plaintiffs to copy it); Offenback v. 

L.M. Bowman, Inc., No. 1:10-CV-1789, 2011 

WL 2491371 (M.D. Pa. June 22, 2011) (acknowledging 

that the “scope of discovery 

into social media sites ‘requires the application 

of basic discovery principles in a novel 

context’” and that “the challenge is to ‘define 

appropriately broad limits… on the discovery 

ability of social communications’”); 

McMillen v. Hummingbird Speedway, Inc., 

No. 113-2010 CD, 2010 Pa. Dist. & Cnty. Dec. 

LEXIS 270, at *4 (Pa. Ct. Common Pleas 

Sept. 9, 2010) (holding that it would be unrealistic 

for a Facebook user to expect that 

his disclosures would be confidential); see 

also Bennett, supra, at 450 (explaining that 

most sites, such as Twitter, have subpoena 

processes, which requires subpoena by e- 

mail, and Facebook, which requires issuing 

subpoenas through the California courts). 

Mitigating Risks 

Companies must carefully weigh the pros 

and cons when making decisions about 

using social media in the workplace. 

Whether to host an internal social network 

or allowing employee access to public 

social networking tools can significantly 

impact a business’ bottom line. Many companies 

have banned the use of Facebook 

and Twitter in the workplace while others 

have taken a more moderate stance on 

the posting of information. Choosing an 

approach requires examining the utility of 

the program at issue, and then balancing 

the risks and the benefits. 

Companies should be aware that simply 

“blocking access” may not remedy perceived 

problems. Although 30–40 percent 

of companies say that they ban sites such 

as LinkedIn, Twitter, and Facebook, in a 

survey last spring a company called Palo 

Alto Networks detected Facebook use on 

92 percent of the 347 enterprise networks 

that claimed to block it. Additionally, Twitter 

was detected on 87 percent of corporate 

nets, while LinkedIn and MySpace 

were detected at 83 percent and 82 percent 

respectively. Dan Tynan, How to Tame the 

Social Network at Work, InfoWorld Daily, 

Oct. 18, 2010. In short, “employees are 

very motivated when it comes to getting on 

Facebook.” Id. 

With mobile devices, businesses can 

lessen security risks and ease discoverability 

headaches by issuing company- owned 

devices rather than allowing employees 

to use their own for business purposes. 

A business should install remote 

wipe capability and password protection as 

standard protocols. Implementing restrictive 

policies, setting parameters for use, 

and monitoring usage are additional helpful 

measures that a company can take to 

ensure employee compliance and defensible 

business practices. 

Acceptable Use Policies 

Companies allowing access to outside networking 

tools or implementing internal 

systems should prioritize developing comprehensive 

acceptable use policies with 

input and compliance oversight by members 

of their legal, human resources, and 

IT departments. Because an acceptable 

use policy is only valuable if employees 

know about and adhere to its provisions, a 

robust and well- publicized internal rollout 

and ongoing employee education are critical 

for success. 

Incorporating a company’s acceptable 

use policy into a corporate audit program is 

something else to consider. Auditing social 

networking policy compliance can become 

a catalyst for improving effectiveness and 

efficiency by providing insight into business 

processes; however, audit reports can 

also become discovery targets in litigation. 

In implementing an acceptable use 

policy consider specificity, education, 

enforceability, separation, discoverability, 

visibility, formality, and accessibility 

limits. First, by “specificity,” we mean that 

an umbrella computer usage policy may

not be sufficient to encompass the specific 

concerns related to social networking, for 

example, especially if social networking is 

not mentioned. Second, in terms of “education,” 

employees must receive education 

about an acceptable use policy and understand 

the repercussions of violating the 

policy. Third, company must enforce an 

acceptable use policy. Fourth, an employer 

can require employees who use social networking 

for business purposes to create 

separate business accounts based on business 

e-mail addresses as a condition to 

using certain sites in the workplace and 

on the employer’s equipment, including 

mobile phones, desktops, and laptops, 

establishing “separation” between acceptable 

business use and personal use. Fifth, 

an employer should ensure “discoverability” 

by making employees aware that the 

information that they post on social networking 

sites, their e-mails, and conversations 

may be subject to legal holds and legal 

collection obligations. An employer should 

formulate a written agreement stating that 

in exchange for an employee’s access and 

use of social networking in the workplace, 

the employee will grant consent for the disclosure 

of the information from his or her 

business profile page, including e-mail, 

posts, notes, and all features of Facebook 

or Twitter used for communication purposes 

in the event that the employer needs 

the information for litigation or general 

auditing purposes. Sixth, by “visibility” 

we mean that an employee should have no 

expectation of privacy in communications 

on social networking sites made through 

the employee’s business account, on an 

employer’s computer network, or on the 

employer’s hardware, including desktop 

computers, laptop computers, and mobile 

phones. Seventh, “formality” means that 

an employer should remind employees 

that the rules that apply to their normal 

business conversations and communications 

also apply with respect to social 

networking in the workplace. Eighth and 

finally, an employer should define the privacy 

settings “accessibility limits” that an 

employee account should maintain in his 

or her business accounts. For example, an 

employee profile should be set so that an 

Internet search would not reveal information 

about the employer’s business contacts 

or clients. 

Records Retention, Preservation, 

and Collection 

As mentioned previously, employees’ use 

of social networking and mobile devices 

for business purposes increases the scope 

of discoverable information that a company 

has to manage, and so a company 

may need to modify data retention procedures 

to accommodate discovery- related 

legal duties. If a company anticipates litigation, 

after consulting with counsel a company 

should consider issuing a litigation 

hold that encompasses information posted 

on social networking sites. 

A company should also work with the 

company IT departments to explore the 

application of tools that automatically 

retain and preserve electronic records 

aligned with the company’s legal hold 

instructions. Given the rapid pace of technological 

innovation, however, it is likely 

that automatic preservation technologies 

will continue to trail the evolution of communication 

platforms, creating burdensome 

discovery efforts, which will include 

retaining and preserving certain electronic 

records manually. This can be especially 

complicated for data such as instant 

messages or information created in an 

Enterprise 2.0 environment because the 

technology available to export data may be 

less sophisticated. A company should first 

determine whether it needs to retain and 

preserve information under the Federal 

Rules of Civil Procedure. Courts appear 

to be moving toward requiring companies 

to retain more and more types of information, 

even transitory information such 

as instant messages. See Alexi Oreskovic, 

Instant Headache, Law.com (May 20, 2005), 

http://www.law.com/jsp/cc/ PubArticleFriendlyCC. 

jspid=900005429200 (last visited Jan. 3, 

2011). 

If subject to preservation, a company 

may need to take special steps to preserve 

continuously replicated or overwritten data 

appropriately. 

An organization should also consider 

instituting a plan guiding how it will collect 

data that it does not control, such as text 

messages stored on the servers of a wireless 

provider or data in hosted applications 

from a software- as- a- service vendor. Even 

controlled systems contain unmanageable 

information: a company should bring unified 

communications systems that combine 

messaging, voice, and video into the company 

recordkeeping process. 

In considering cloud options, when a 

vendor or another third party will possess a 

company’s data, the company should make 

sure to incorporate provisions in the contract 

with the vendor requiring the vendor 

to cooperate with subpoenas for company 

information. 

Allowing employees 

to use public social 

networking tools, webbased 

technologies, 

and microblogging in 

the normal course of 

business offers tremendous 

marketing opportunities. 

Conclusion 

Despite the pervasiveness of Web 2.0 technologies 

and mobile devices in today’s 

workplace, a recent survey of management 

and human resource executives indicated 

that a majority of companies do not 

have written social media or acceptable 

use policies. Companies with employees 

and offices spread throughout the world 

especially rely on collaborative platforms 

and technologies such as internal social 

networks, instant messaging, and cloud 

computing—and it is nearly certain that 

employees in companies of all sizes and 

in every industry use applications outside 

of the companies’ internal networks. Failing 

to pay attention to or manage the exponentially 

burgeoning data resulting from 

today’s technologies can create serious 

legal risk and expense for all organizations. 

Those entities which attorneys counsel to 

manage their data strategically and proactively, 

however, will undoubtedly reap 

the rewards of increased efficiency, greater 

potential revenue, enhanced security, and 

legal defensibility. 



Local Rules, 

Procedures, and 

Model Orders 

By G. Franklin McKnight 

and Kymberly Kochis 

The Progress 

of 

E-Discovery 

Courts have the authority 

to manage dockets 

and limit e-discovery 

in creative ways. Local 

rules provide a means to 

exercise this authority. 

Considering the vast information generated and stored by 

business entities today and the broad rules governing the 

preservation and production of electronic records, contending 

with electronic discovery in class action and com- 

plex litigation has become a burdensome 

and nebulous endeavor. When coupled 

with the threat of serious adverse consequences 

for failing to comply with discovery 

requests, aspects of e- discovery 

have driven potential litigants to implement 

“scorched earth” preservation tactics, 

engage in imprecise and extensive collection 

efforts, expansively review saved material, 

and produce voluminous electronic 

records to avoid arguments that the litigants’ 

preservation and production efforts 

were anything less than satisfactory. 

Recognizing that litigants need guidance 

in this area of the law, state and federal 

courts have implemented rules and issued 

opinions to assist litigants to measure their 

conduct against the preservation and the 

discovery standards. This guidance, however, 

has rarely drawn reasonable outer limits 

on e- discovery in class action and other 

complex litigation. The amount and diversity 

of potentially discoverable information 

in those cases is often substantial and 

the overall discovery standard—potentially 

relevant evidence—is exceedingly broad. 

Aware of the problems e- discovery presents 

and often having addressed e- discovery 

disputes firsthand, some jurisdictions and 

judges take additional measures to attempt 

to control discovery. 

This article looks at the requirements, 

restrictions, pronouncements, and penalties 

that courts and judges have imposed 

or recommended regarding e- discovery 

practice at the local level through local 

rules, recommended or required procedures, 

and model orders. It explores the 

different approaches that courts have taken 

to guiding e- discovery such as mandating 

early discussion and negotiation, restricting 

the scope of e- discovery, and enunciating 

cost- shifting principles. 

State and Federal Rules 

State and federal rules of civil procedure 

and developing case law provide general 

guidance on the discovery of electronically 


■ G. Franklin McKnight IV, an associate at Nelson Levine de Luca & Horst in Blue Bell, Pennsylvania, represents 

insurance company clients in institutional matters and applies his understanding of technology and 

knowledge management to develop strategic solutions to legal concerns. He is a member of DRI and its Electronic 

Discovery Committee. Kymberly Kochis is a partner at Nelson Levine de Luca & Horst where she represents 

clients in insurance and reinsurance litigation and regulatory matters as well as corporate governance.

stored information (ESI). These rules provide 

a framework to litigants and judges 

regarding the more or less reasonable 

e- discovery strategies litigants have sought 

to employ. However, the failure of these 

rules and opinions to establish meaningful 

upper limits on the amount of ESI that 

parties may potentially discover represents 

a major shortcoming for corporate defendants 

in complex litigation and class actions 

because broad discovery impacts numerous 

business units, departments, records 

storage locations, and personnel. 

While state and federal rules and case 

law provide guidance on how to evaluate 

e- discovery disputes, the standard governing 

discovery—potentially relevant evidence—remains 

broad and subject only to 

an individual court’s decision to restrict it 

in a particular case. Courts often hesitate 

to limit discovery without definitive guidelines 

on when they should curtail it. They 

hesitate to limit e- discovery unless one of 

the parties shows that the burden of compliance 

will have an immediate, concrete, 

and disabling impact. However, the impact 

of voluminous e- discovery presents greater 

challenges over time given the exponential 

growth of available information and the 

need to preserve, collect, review, produce, 

and store it. When courts do not closely 

scrutinize discovery requests, costs perpetually 

mount, which unfairly impacts companies 

in the long run. 

Local Rules, Guidelines, 

and Model Orders 

Bearing witness to the plight of litigants 

appearing before courts with some trepidation 

whether the courts will deem the 

litigants’ extensive preservation efforts 

adequate to address the nature and volume 

of discovery sought, courts and judges have 

proposed and adopted rules, model orders, 

and procedures to help define discovery 

obligations. As a first step, a number of 

courts have imposed local rules or adopted 

practices reinforcing requirements that the 

parties exchange information about electronic 

evidence and meet to confer early 

to hash out the parameters of e- discovery. 

For example, local rules may mandate that 

litigating parties affirmatively request and 

provide categories of the e- discovery that 

they will seek before having their initial 

conference with a court. In some forums, 

parties that do not reach an agreement 

on e- discovery may find themselves subject 

to a default order instead. These steps 

force parties to confront their e- discovery 

responsibilities as early as possible and, 

under the best circumstances, result in 

acceptable e- discovery agreements that 

survive as long as a dispute endures. However, 

under less desirable circumstances, 

parties will not come to an agreement, perhaps 

because one side feels that a discovery 

request is too broad and another side feels 

that the stakes could become too high to 

nail down e- discovery limitations. 

To handle these circumstances, courts 

and judges have acted under their local 

authorities modeled on Federal Rules of 

Civil Procedure 26(b)(2) and 83 to place 

meaningful requirements and restrictions 

on e- discovery practice and clarify 

e- discovery rules. These requirements 

and restrictions tackle e- discovery in different 

ways, ranging from adopting general 

guidelines often used by others or 

grounded in common sense practices to 

employing less objective standards. The 

default e- discovery standard prepared by 

the Ad Hoc Committee for Electronic Discovery 

of the U.S. District Court for the 

District of Delaware and similar rules used 

by Judge Savage of the U.S. District Court 

for the Eastern District of Pennsylvania, 

Judge McMahon of the U.S. District Court 

for the Southern District of New York, as 

well as the U.S. District Courts for the Middle 

District of Tennessee and the Northern 

District of Ohio instructively address 

a variety of topics including agreements 

between parties, discovery limits, inadvertent 

production, and cost shifting. For 

example, some orders based on this District 

of Delaware- originating standard have 

included the following: 

• Discovery into inaccessible systems is 

prohibited until discovery of accessible 

systems has been completed. 

• If sought, requests for records from 

inaccessible systems must be narrowly 

focused and include a factual basis supporting 

the request. 

• On-site inspections of electronic media 

are not permitted, absent exceptional 

circumstances. 

• For productions, image format is the 

default unless the parties agree on 

another. 

• A party must demonstrate particularized 

need for production of electronic 

documents in native format. 

• Electronic documents that contain privileged 

information must be immediately 

returned if the documents appear 

on their face to have been inadvertently 

produced or if there is notice of the inadvertent 

production. 

State and federal courts 

have implemented rules 

and issued opinions to 

assist litigants to measure 

their conduct against 

the preservation and the 

discovery standards. 

• While the costs of discovery shall ordinarily 

be borne by each party, costs may 

be apportioned upon a showing of good 

cause. 

The standard contains other provisions 

as well, governing the use of e- discovery 

liaisons and the activities of retention coordinators. 

The standard does not put specific 

limits on the volume of discovery that 

a party can seek, leaving this open. See D. 

Del., Default Standard for Discovery of Electronic 

Documents, http://www.ded.uscourts. 

gov/Announce/Policies/Policy01.htm (last visited 

Dec. 21, 2011). 

Other courts have adopted a wide variety 

of procedures governing e- discovery. For 

instance, the U.S. District Court for the Middle 

District of Florida has well- established 

standards addressing e- discovery that took 

effect in 2001. The standards offer parties 

broad discretion on what they can request 

on both material type and scope. Parties 

may request that electronic information 

be produced in hard copy, electronic form, 

or both forms. And “[a] party may also 

ask for the production of ancillary electronic 

information that relates to relevant 

electronic documents, such as information 

that would indicate (i) whether and 



when electronic mail was sent or opened 

by its recipient(s) or (ii) whether and when 

information was created or edited,” and 

“may request the software necessary to 

retrieve, read, or interpret electronic information.” 

M.D. Fla., Middle District Discovery 

at 21 (2001). http://www.flmd.uscourts. 

gov/Forms/Civil/Discovery_Practice_Manual.pdf. 

Helpfully, the rules also address the need 

The standard governing 

discovery… remains 

broad and subject only 

to an individual court’s 

decision to restrict it 

in a particular case. 

for cost shifting based on a proportionality 

test, as well as specifically stating that 

“[t]he discovering party generally should 

bear any special expenses incurred by the 

responding party in producing requested 

electronic information” and “the responding 

party generally need not incur undue 

burden or expense in producing electronic 

information, including the cost of acquiring 

or creating software needed to retrieve 

responsive electronic information for production 

to the other side.” Id. at 21–22. 

To efficiently address e- discovery disputes, 

Judge Virginia Kendell of the U.S. 

District Court for the Northern District 

of Illinois has implemented a case management 

procedure for addressing disputes 

involving voluminous records. Under 

the rule, before filing a motion to compel, 

the parties must meet and confer 

with an IT representative of the electronic 

storage facility to be searched to determine 

the most effective way to retrieve 

the requested material. See N.D. Ill., Case 

Management Practices and Procedures, 

http://www.ilnd.uscourts.gov/home/Judges.aspx 

(follow “Judge Virginia M. Kendall” link; 

then follow “Discovery” link) (last visited 

Dec.22, 2011).The party seeking the discovery 

must also bring its IT specialist to this 

meeting to discuss the proper format for 


the retrieved records. Id. The meeting must 

take place in person, with both sides prepared 

to discuss specifically the parameters 

of both the search and the electronic storage 

facility. Id. In complex and class action 

litigation, although preparing for such a 

meeting does have costs given the myriad 

of storage locations, formats, the substance 

of the information stored, and the different 

means by which the information might be 

reasonably extracted, the preparation can 

benefit a company taking a position on limits 

to e- discovery by creating an intelligent 

platform for conferring on positions. 

Addressing the scope and accessibility 

of e- discovery, Magistrate Judge Michael 

Mahoney of the U.S. District Court for the 

Northern District of Illinois in a standard 

order of his creation, “Parties Proposed 

Case Management Order,” declares that the 

discovery of inaccessible information is per 

se burdensome: 

All formats primarily used for backup or 

disaster recovery purposes and any computer 

servers, external hard drives, notebooks, 

or personal computer hard drives 

created for disaster recovery purposes 

and not used in the ordinary course of 

business operations are presumed to 

present a burden which outweighs the 

relevancy of data preserved in such formats 

and need not be searched absent 

relevance and special need. 

P. Michael Mahoney, Parties Proposed Case 

Management Order at 3 (N.D. Ill. July 2008) 

(standard order), http://www.ilnd.uscourts.gov/ 

LEGAL/WDADR/pdf/newcmo.pdf. 

Similarly, without demonstrating “relevance 

and special need, a responding party 

will not be required to preserve, review or 

produce deleted, shadowed, fragmented or 

residual electronically stored information.” 

Id. This order places specific limitations on 

the discovery of backup systems and residual 

information using common sense while 

upholding the principles governing the 

purpose behind discovery. 

In discussing inaccessible electronically 

stored information, ESI discoverability, 

and which party should bear the costs of 

ESI discovery, the Local Uniform Civil 

Rules of the U.S. District Courts for the 

Northern and Southern District of Mississippi 

and the Local Rules of Court for 

the U.S. District Court for the Middle District 

of Pennsylvania position cost shifting 

directly at the forefront of these discussions 

rather than as a secondary matter 

that a court would consider if data accessibility 

is limited or if other factors, such 

as proportionality, favor cost shifting. See 

N.D. Miss. & S.D. Miss. L. Unif. Civ. R. 26(e) 

(Dec. 1, 2011), available at http://www.msnd. 

uscourts.gov/2010%20MASTER%20LOCAL%20 

UNIFORM%20CIVIL%20RULES.pdf; M.D. Pa. 

Rules of Court R. 26.1 (Dec. 2010), available 

at http://www.pamd.uscourts.gov/docs/LR120110. 

pdf. The Mississippi federal court rules also 

require litigating parties seeking ESI from 

nonparties to “attempt to meet and confer” 

with those nonparties from which the litigants 

seek ESI. See N.D. Miss. & S.D. Miss. 

L. Unif. Civ. R. 45(d). 

Magistrate Judge Andrew J. Peck takes 

another approach specifically endorsing the 

Sedona Conference Cooperation Proclamation 

and requesting that counsel be familiar 

with the decisions in William A. Gross Constr. 

Assocs., Inc. v. Am. Mfrs. Mutual Ins. Co., 

256 F.R.D. 134 (S.D.N.Y. 2009), and Mancia 

v. Mayflower Textiles Servs. Co., 253 F.R.D. 

354 (D. Md. 2008). See also Sedona Conference 

Cooperation Proclamation (2008), 

available at http://www.thesedonaconference. 

org/.Those two decisions addressed various 

aspects of e- discovery. The first decision 

addressed cooperation among counsel, designing 

appropriate key word searches with 

the assistance of the appropriate personnel, 

and testing a search methodology before executing 

it. The second decision addressed 

various discovery violations including the 

failure to object to a discovery request with 

specificity and seeking overbroad discovery. 

In Mancia, the court issued an order 

requiring that the parties cooperate to determine 

the damages at issue in the case so 

that the court would have sufficient information 

to perform a proportionality analysis 

to quantify a workable discovery budget, 

a helpful concept. 

Similarly, the proposed Standing Order 

Relating to the Discovery of Electronically 

Stored Information developed by the Seventh 

Circuit Electronic Discovery Committee 

strongly emphasizes cooperation 

among parties and remaining knowledgeable 

about e- discovery obligations and client 

data. See [Proposed] Model Standing 

Order Relating to the Discovery of Electronically 

Stored Information, Seventh 

Circuit Electronic Discovery Pilot Pro-

gram (2011), http://www.discoverypilot.com/. 

The order, through defined principles, lists 

the e- discovery topics that parties should 

discuss, including the scope of preservation, 

how parties should identify ESI, and 

production format. The order also provides 

proportionality guidance, stating that proportionality 

“should be applied in each case 

when formulating a discovery plan” and 

“[t]o further the application of the proportionality 

standard in discovery, requests 

for production of ESI and related responses 

should be reasonably targeted, clear, and 

as specific as practicable.” Id. at 2. Additionally 

the order describes how parties 

should use knowledgeable e- discovery liaisons 

to resolve e- discovery disputes and 

provides a list of examples of ESI that parties 

cannot discover in most cases, such as 

deleted, ephemeral, and temporary data, 

and it strongly suggests that litigating parties 

should tailor e- discovery to the issues 

at stake pinning down the parameters during 

discussions among knowledgeable persons, 

crafting welldefined preservation 

and production requests, and using technology 

intelligently to identify potentially 

relevant information. 

Approaching the issue from a disclosure 

angle, the U.S. District Court for the 

Southern District of Florida has adopted 

procedures mandating the disclosure of 

recordkeeping information relevant to 

e- discovery. A Discovery Practices Handbook 

developed by that court appended 

to the local rules states that a “producing 

party has an obligation to explain the 

general scheme of recordkeeping to the 

inspecting party” to acquaint the inspecting 

party with how and where documents 

and electronically stored information is 

maintained. S.D. Fla. L. Rules, Appx. A, 

Discovery Practice Handbook at 103. Under 

this court’s procedures litigating parties 

identify these items in specific paragraphs 

of production requests when practicable, 

unless a producing party “exercises its 

option under Federal Rule of Civil Procedure 

34(b) to produce documents as they 

are kept in the usual course of business.” 

Id. When a party produces documents in 

bulk, the party should identify categories, 

although the producing party does not 

have an obligation to reorganize the materials. 

See S.D. Fla. L. Rules, Appx. A at 104 

(Dec. 1, 2011). 

The U.S. District Court for the District of 

Maryland has detailed guidelines on managing 

e- discovery titled Protocol for Discovery 

of Electronically Stored Information. At 

29 pages long, the protocol describes in 

detail actions that parties should take to 

comply with their e- discovery obligations. 

See D. Md., Suggested Protocol for Discovery 

of Electronically Stored Information, 

available at http://www.mdd.uscourts.gov/ 

news/news/ESIProtocol.pdf (last visited Dec. 

22, 2011). However, while the protocol provides 

a comprehensive overview of the 

complexities of e- discovery and alerts the 

e- discovery practitioner of the high costs 

of such discovery when litigation might 

involve extraordinary information collections, 

it does not suggest reasonable 

e- discovery restrictions and instead only 

suggests shifting costs. 

Due to the range among court 

e- discovery procedures, litigating parties 

need familiarity with more than state rules, 

federal rules, and case law on e- discovery: 

they need to know local rules, procedures, 

and orders as well. Local practice requirements 

can be relatively straightforward. 

For instance, a court may require early 

e- discovery conferring. But local requirements 

can also be quite complex, more akin 

to the U.S. District Court for the District of 

Maryland protocol discussed above. Practitioners 

should also understand that courts 

will move to enforce local practice when 

parties do not follow local practice rules. 

See DCG Sys., Inc. v. Checkpoint Tech., LLC, 

No. C-11-03792 PSG, 2011 WL 5244356 

(N.D. Cal. Nov. 2, 2011) ([Model] Order 

Regarding E- Discovery in Patent Cases 

implemented, subject to further requests 

to modify it); Osborne v. C.H. Robinson 

Co., No. 08-C-50165, 2011 WL 5076267, at 

*8 (N.D. Ill. Oct. 25, 2011) (discovery violations 

found where the defendant’s “actions 

were not in line with the letter or spirit of 

the Federal Rules of Civil Procedure, the 

Proposed Standing Order from the Seventh 

Circuit, or the Sedona Principles describing 

best practices for electronic discovery”); 

Anderson v. Reliance Standard Life Ins. 

Co., No. WDQ-11-1188, 2011 WL 4828891, 

at *3 (D. Md. Oct. 11, 2011) (“Counsel are 

required to have read the Federal Rules of 

Civil Procedure, Local Rules of this Court, 

Discovery Guidelines of this Court (Appendix 

A to the Local Rules), and, with respect 

to discovery of Electronically Stored Information 

(ESI), the Suggested Protocol for 

Discovery of ESI”); AF Tech, Inc. v. Trumpf, 

Inc., No. 11-C-367, 2011 WL 4824449 (E.D. 

Wis. Oct. 6, 2011) (requiring the parties to 

comply with the Principles Relating to the 

Discovery of Electronically Stored Information.); 

Seven Seas Cruises S. De R.L. v. V. 

Ships Leisure SAM, No. 09-23411-CIV, 2011 

WL 772855 (S.D. Fla. Feb. 19, 2011) (granting 

a motion to compel ESI and admonishing 

that the parties should have consulted 

section III of the Discovery Practice Handbook 

attached to the S.D. Fla. L. Rules). 

Meaningful Limitations 

on E-Discovery 

While many courts require litigating parties 

to address e- discovery as early as practicable 

in a case and to compile a laundry 

list of things that they will discuss, other 

courts have gone further. For instance, 

Judge Nancy F. Atlas of the U.S. District 

Court for the Northern District of Texas 

requires that the parties have a person with 

detailed knowledge of the particular computers 

and electronic databases available at 

all conferences addressing e- discovery disputes. 

As discussed above, Judge Virginia 

Kendell of the U.S. District Court for the 

Northern District of Illinois has a similar 

procedure. Likewise, as mentioned above, 

Magistrate Judge Michael Mahoney of the 

U.S. District Court for the Northern District 

of Illinois has pronounced firmly that 

certain inaccessible information is per se 

burdensome. Mahoney, Parties Proposed 

Case Management Order, supra. And many 

of the practices discussed above at least 

attempt to lend credence to the notion of 

cost shifting or dispel the taboo that using 

proportionality to limit discovery is unfair. 

A singular and extensive model order 

governing e- discovery in patent cases was 

recently proposed by Chief Judge Randall 

Rader of the U.S. Court of Appeals for the 

Federal Circuit. Drafted by a subcommittee 

of the Advisory Counsel for that circuit 

court and designed specifically to curb 

the high costs associated with e- discovery 

in patent litigation, the model order provides 

concrete and objective guidance on 

numerous aspects of e- discovery. See Fed. 

Cir., An E- Discovery Model Order, available 

at http://www.cafc.uscourts.gov/images/ 

stories/announcements/Ediscovery_Model_Order. 



pdf (last visited Dec. 28, 2011).For instance, 

the model order is strict on e-mail: general 

ESI production requests do not include 

e-mail. Id. at 2.To obtain e-mail, the party 

that wants it must make specific e-mail 

production requests on specific issues. Id. 

Requesting parties must provide custodian 

names, search terms, and time frames 

in these requests. Id. at 3. A requesting 

Litigating parties 

need familiarity with 

more than state rules, 

federal rules, and case 

law on e- discovery: 

they need to know 

local rules, procedures, 

and orders as well. 


party has to wait until after litigating parties 

exchange initial disclosures and basic 

documentation before making e-mail discovery 

requests. Id. at 2–3. Also, beyond 

identifying sent and receive dates and 

times and distribution information, general 

production requests would not include 

metadata unless the party that wants it 

demonstrates good cause. Id. at 2. 

The model order specifically limits the 

number of custodians or search terms 

that a party can seek, an approach that 

commentators frequently characterize as 

inappropriate because it reflects a one-sizefits-all 

approach to cases. This model order 

restricts the number of custodians to five 

per producing party and the search terms 

to five per custodian. Id. at 3.Under this 

order a court will consider requests for discovery 

of more custodians or search terms, 

but failing to seek the court’s blessing will 

result in the requesting party bearing all 

reasonable costs caused by the additional 

discovery. Id. at 3–4. This last provision is 

worth noting because it does not prohibit 

requests for information outside of the confines 

of the order outright, but it does specifically 

require that the requesting party 

pay for the information. 

In addition to limiting the number of 

search terms, the model order specifies 

that parties must use search terms narrowly 

to specific issues. Id. Parties must 

combine terms that could produce overly 

broad search results with narrowing search 

criteria. Id. 

The model order goes even further: the 

mass production of ESI will not constitute 

a waiver for any purpose. The order reiterates 

Federal Rule of Evidence 502(d) that 

inadvertent production of privileged ESI 

is not a waiver in any other federal or state 

proceeding, and a party receiving inadvertently 

produced and privileged ESI may not 

use it to challenge the privilege or protection. 

Id. at 4. And this model rule boldly 

states that costs will be shifted for disproportionate 

ESI production requests, and 

the court will take nonresponsive or dilatory 

discovery tactics into consideration 

when evaluating cost shifting. Id. at 2. 

Clearly, in patent lawsuits, the U.S. 

Court of Appeals for the Federal Circuit 

recognizes that “disproportionate expense 

should not be permitted to force those 

accused of infringement to acquiesce to 

nonmeritorious claims” and has taken considerable 

steps to protect parties against 

such claims. Id. at 2.The same circumstances 

arise in other litigation arenas, 

particularly in complex and class action litigation. 

Although the model order speaks 

in terms of patent litigation, it does transfer 

well to other litigation where “routine 

requests seeking all categories of ESI often 

result in mass productions of marginally 

relevant and cumulative documents” and 

“the production burden of these expansive 

requests outweighs the minimal benefits of 

such broad disclosure.” Id. 

The introduction to the model order 

notes that “district courts have inherent 

power to control their dockets to further 

‘economy of time and effort for itself, for 

counsel and for litigants.’” Id. (citing Landis 

v. North Am. Co., 299 U.S. 248, 254 

(1936)).By demonstrating and applying this 

inherent power to manage the inequities of 

e- discovery at the outset of a matter and in 

an objective manner, the model order provides 

a clear roadmap to litigants in terms 

of what they can and needs to accomplish 

in an action involving significant 

e- discovery. The order addresses the laudable 

goal of “requiring litigants to focus on 

the proper purpose of discovery—the gathering 

of material information—rather than 

permitting unlimited fishing expeditions.” 

Id. As others have stated, the federal rules 

have limited the number of and time permitted 

for depositions, and few challenge 

the wisdom of those decisions. Perhaps it is 

now worthwhile to discuss adopting similar 

limitations for ESI discovery because 

the volume of material subject to preservation 

and disclosure will continue to grow at 

a significant rate. 

Prelitigation Preservation Guidance 

Unfortunately, because local e- discovery 

rules and orders vary among jurisdictions, 

these rules do not offer meaningful boundaries 

to parties on their prelitigation preservation 

obligations. Parties will benefit from 

these rules only after they appear before a 

particular judge or court that will apply 

them. Because we cannot generally predict 

where a litigant will file a lawsuit, clients 

must align their preservation responsibilities 

with those applicable jurisdictions permitting 

broad e- discovery. Rules enacted 

at the state and federal level reasonably 

quantifying the scope of e- discovery could 

provide significant assistance in fulfilling 

preservation obligations in a cost- effective 

manner. 

Conclusion 

Parties involved in complex and class 

action litigation need greater transparency 

on their e- discovery obligations 

beyond the guidance that state and federal 

rules currently provide. Courts have 

the authority, through federal and state 

rules and their inherent power, to manage 

their dockets and limit e- discovery in 

creative ways. Local rules provide a means 

to exercise this authority to clarify the 

scope of e- discovery so that litigating parties 

have a good foundation for cooperating. 

Courts adopting local rules clarifying 

e- discovery obligations are pioneers in an 

arena where litigation costs in complex 

and class action litigation can end up out 

of control and out of line with the issues at 

stake. Widely accepted testing of local rules 

set the groundwork for considering similar 

amendments to state and federal rules of 

civil procedure.

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By Paul Caleo 

Creating a 

Preeminent 

Forum 

Enhance your 

skills, network with 

colleagues and industry 

peers and grow your 

practice with us! 

We welcome in the second year of our committee happy 

to report that our membership has increased, but more 

importantly, that more people are participating in our 

committee’s activities. More than ever, the Retail and 

Hospitality Committee provides the place 

and opportunity to collaborate with your 

colleagues, clients and industry peers to 

broaden your education and understanding 

of representing clients in the retail and 

hospitality industries. DRI’s leadership has 

■ Paul Caleo, a Burnham Brown PLC shareholder in Oakland, California, is one of the firm’s premier trial lawyers. He has extensive 

experience in complex tort, personal injury and large loss cases involving claims of product liability, premises liability, construction 

site accidents and trucking/motor carrier accidents. Mr. Caleo is the chair of DRI’s Retail and Hospitality Committee. 


implemented specific policies to increase 

the participation of in-house counsel and 

industry representatives at our seminars, 

so there has never been a better opportunity 

to network and develop your practice 

while enhancing your skills as a defense 

lawyer. We welcome new DRI members 

to our committee with open arms and 

look forward to you getting involved in 

our work. We look forward to helping you 

develop your practice and deepen your 

relationships with your clients, and make 

additional contacts within the retail and 

hospitality industries. For anyone unfamiliar 

with the work of our committee, both I 

and our committee vice chair, Jacey Kaps, 

urge you to attend DRI’s Retail and Hospitality 

Seminar this May in Chicago. 

This year we will be combining our retail 

and hospitality programs into a single seminar 

scheduled for May 10–11, 2012, at the 

Swissôtel in Chicago. The steering committee 

has put together an absolutely outstanding 

program and the brochures should be 

landing on your desks soon. Don’t wait to 

sign up and attend the seminar. But more 

importantly, reach out to your colleagues 

and your industry contacts and urge them 

to meet you in Chicago. The presentations 

at the seminar will focus on the cutting 

edge concerns in claims and litigation for 

the retail and hospitality industries. We are 

extremely fortunate that our outstanding 

faculty includes representatives from the 

following industry leaders: Sedgwick CMS, 

Inc.; Accor North America; Home Depot 

U.S.A., Inc.; Office Depot, Inc.; Supervalu, 

Inc.; Texas Roadhouse; Wild Wings, Inc.; 

Developers Diversified Realty Corporation; 

Walgreens; Sears; and The Pantry, Inc. 

We have not only ensured that the topics 

of discussion include issues and concerns 

for both industries, but also have planned 

breakout presentations that will focus on 

issues specific to the retail and hospitality 

industries. 

We are indebted to the steering committee 

for their hard work in putting together 

and finalizing the outstanding program 

for the seminar in May. In particular, we 

would like to commend the extraordinary 

work and efforts of Program Chair Tom 

Thornton of Carr Allison and Program Vice 

Chair Jennifer Hoffman of Marlowe Connell 

Abrams. In addition, we would like to 

thank the continuing efforts of Mark Parsky 

of McVey & Parsky, as well as Richard 

Keeting of Swanson Martin & Bell and 

Renee Mortimer of Hinshaw & Culbertson. 

A continuing goal of the Retail and Hospitality 

Committee is to ensure that the 

content we provide in the seminars, as well 

as other formats, is accessible and usable by 

all our members and will help them in solving 

the problems they have on their desks 

on a day-to-day basis. We continue to look 

for contributions in the many and different 

formats DRI makes available to us, such as 

webcasts, articles on the committee’s webpage, 

and timely blog postings on industry 

issues and court decisions, as well as 

creating a committee newsletter and high 

quality articles to be published in For The 

Defense and other DRI publications. 

Opportunities abound for anyone who 

wants to get involved, and we will help 

you in any way we can to make a valuable 

contribution. The scope of our committee 

ensures that you can contribute in a meaningful 

way, whether you are an experienced 

lawyer or someone new to the practice. We 

welcome you with open arms and look forward 

to you joining our committee and 

participating in creating the preeminent 

forum for retail and hospitality law issues 

for defense lawyers. 



In the Real World 

By Stephen K. Talpins 

and H. Jacey Kaps 

Reducing Liability 

from Dram 

Shop Laws 

Familiarizing yourself 

with applicable laws 

will help you serve 

your clients best. 

Under common law, commercial establishments historically 

were not liable for selling or providing alcoholic beverages 

to individuals who became intoxicated and injured 

themselves or others. In the mid-1800s legislatures and 

courts began imposing liability in limited 

situations. Today, the legislatures and 

courts in the majority of states have abrogated 

the common law in an effort to “balance” 

the need to hold tortfeasors, including 

drunkards, accountable for the repercussions 

of their own voluntary intoxication 

with the desire to provide compensation to 

those they injure. This article provides an 

overview of dram shop laws and offers strategies 

for reducing the risk of civil liability 

to establishments imposed by the laws as 

well as strategies for defending these cases. 

Dram Shop and Related Liability 

Dram shop laws impose liability on commercial 

establishments that provide 

alcoholic beverages to certain adults or 

underage customers. Most dram shop 

defendants are bars, restaurants, or taverns 

that serve alcoholic beverages for onpremises 

consumption. However, at least 

some states impose liability on other proprietors, 

including convenience store owners, 

for serving minors or visibly impaired 

people under certain circumstances. See, 

e.g., Flores v. Exprezit! Stores 98-Georgia, 

LLC (Ga. July 5, 2011) (slip opinion). 

Service to Adults 

Thirty-five states and the District of Columbia 

impose liability on alcohol beverage 

licensees that improperly serve adults; 32 

states by statute, three states and the District 

of Columbia through judicial fiat. 

In an era of increasing judicial activism, 

we expect other states to join the chorus, 

whether appropriate or not. In Maryland, 

for example, the legislature recently considered 

dram shop legislation for the first 

time in 20 years. The bill died in committee. 

Neither this nor case precedent stopped 

a circuit court judge from trying to change 

the law on his own. In refusing to dismiss 

a case involving a 10-year-old girl killed by 

a drunk driver, the judge argued, 

[t]he facts of this case undoubtedly 

should serve as the impetus to adjust- 


■ Stephen K. Talpins is of counsel and Jacey Kaps is a partner with Rumberger, Kirk & Caldwell in the firm’s 

Miami, Florida, office. Mr. Talpins is an advocate, consultant and trial attorney who represents clients and 

works with stakeholders in the commercial, substance abuse, correctional, and public sectors. Mr. Kaps 

focuses on the representation of the domestic retail, restaurant, and lodging sectors. He is the vice chair of 

DRI’s Retail and Hospitality Committee.

ing Maryland jurisprudence on the topic 

of dram shop liability…. This court is 

of the opinion that while the Maryland 

legislature has not enacted dram shop 

legislation, it has not expressly prohibited 

it…. A bar owner who continuously 

serves drinks to intoxicated individuals 

and makes no attempt to ensure that 

the individual has alternative means 

home should expect that the intoxicated 

patron can get into an accident. 

See Debating Dram Shop Laws: Judge 

Draws Line in the Sand on Alcohol Liability, 

Gazette.net (June 1, 2011). This case provides 

a cautionary tale to establishments 

in jurisdictions without dram shop laws. 

Although the judge will probably have his 

ruling reversed on an appeal, the establishment 

surely is paying significant legal fees 

and facing ongoing bad publicity. The message 

is simple: every establishment should 

serve responsibly, regardless of the law. 

Dram shops laws across the country 

vary significantly in their scope and application. 

In the vast majority of states, laws 

hold a licensee liable for serving a “visibly 

intoxicated” person. Thus, liability 

revolves around a tortfeasor’s state at 

the time of service, not at the time of an 

incident. See, e.g., Faust v. Albertson, 222 

P.3d 1208 (Wash. 2009). Some states only 

hold an establishment liable for serving a 

“known habitual drunkard.” In some of 

these states, it remains unresolved whether 

plaintiffs need to prove that improper, irresponsible 

service proximately caused injuries, 

or whether establishments are strictly 

liable for serving those they should not. 

The majority of jurisdictions do not hold 

a licensee accountable for injuries that an 

intoxicated patron causes to himself or herself 

or to third parties that participated in, 

condoned, or facilitated the patron’s drinking 

unless the service is reckless. Further, 

many jurisdictions recognize special 

defenses such as engaging in “responsible 

business practices.” Some jurisdictions 

cap damages, while in others the jurisdictions 

expose establishments to exemplary 

or punitive damages. 

Service to Underage Patrons or Minors 

Forty-two states, including the 35 that 

impose dram shop liability for improperly 

serving adults, and the District of Columbia 

impose liability on licensees that serve 

underage customers or “minors.” Many of 

these state laws have short statutes of limitations. 

In most jurisdictions, a licensee is 

not held liable if it is shown an apparently 

genuine license indicating that the patron 

is of minimum drinking age. Additionally, 

some jurisdictions recognize a defense if an 

establishment engaged in responsible business 

practices or if a patron misrepresented 

his or her age. 

Additional Related Liability 

Although dram shop laws are designed to 

establish “exclusive” remedies for negligent 

service, they do not, as commonly believed, 

bar other causes of action or provide an 

absolute defense. For example, a proprietor 

may be held liable for violating a duty to 

safeguard customers from “extreme danger” 

while on a premises. See, e.g., Starling 

v. Fisherman’s Pier, Inc., 401 So. 2d 1136 

(Fla. Dist. Ct. App. 1981) (holding that a 

business had an affirmative duty to protect 

a drunk man who passed out on the business’s 

pier so that he would not fall into the 

ocean and drown), review denied, 411 So. 

2d 381 (Fla. 1981). Additionally, some states 

recognize a civil cause of action for negligence 

per se when a host violates criminal 

statutes, including service of alcohol to a 

minor or permitting an “open house party.” 

See, e.g., Newsome v. Haffner, 710 So. 2d 184 

(Fla. Dist. Ct. App. 1998). 

Dram Shop Liability in the Real World 

Most cases arising under dram shop and 

social host laws are fairly straightforward. 

However, sometimes wellintentioned 

establishments and hosts create additional 

unexpected liabilities through the actions 

that they take to address problem drinkers. 

Improper Refusal of Service 

Some commentators suggest that servers 

exercise “extreme caution” when refusing 

service since refusal “may present its 

own challenges,” including antidiscrimination 

and Americans with Disabilities 

Act (ADA) lawsuits. See, e.g., D. Gursoy, C. 

Chi, & D. D. Rutherford, Alcohol- Service 

Liability: Consequences of Guest Intoxication, 

30 Int’l J. Hosp. Mgmt. 714, 716 (2011). 

While that may be true, a licensee still must 

refrain from providing alcohol as required 

by law and should refrain from serving 

visibly intoxicated customers and habitual 

addicts. Accordingly, we recommend that 

licensees train staff to watch for changes 

in customer behavior, not just traditional 

signs of intoxication, and to how to refuse 

service courteously. 

Some jurisdictions 

recognize a defense 

if an establishment 

engaged in responsible 

business practices or if 

a patron misrepresented 

his or her age. 

Improper Eviction 

Licensees typically evict or remove underage 

patrons, patrons who become belligerent, 

or patrons who endanger themselves 

or others. Unfortunately, this may carry 

some risk, even when required by law. In 

several jurisdictions people have attempted 

to hold licensees liable for evicting intoxicated 

patrons. 

In states without dram shop laws, the 

risk associated with eviction is minimal. 

See, e.g., Rodriguez v. Primadonna Co., 216 

P.3d 793 (Nev. 2009). In Rodriguez, the 

court held that a proprietor who evicts a 

patron “is not required to consider [the] 

patron’s level of intoxication in order to 

prevent speculative injuries that could 

occur off the proprietor’s premises.” As 

the court explained, “individuals, drunk 

or sober, are responsible for their torts.” 

Accord McCall v. Villa Pizza, Inc., 636 A.2d 

912 (Del. 1994). However, even in these 

states, or in analogous situations in which 

the dram shop laws may not apply, hosts 

may be held accountable if they facilitate 

tortious conduct. See, e.g., Simmons 

v. Homatas, 925 N.E.2d 1089 (Ill. 2010) 

(holding a strip club liable under common 

law negligence principles after employees 

evicted a customer, requested that the valet 

bring his car around, opened the car door, 

and ordered the patron to leave). 



In states with dram shop laws, the risk 

associated with eviction can be substantial. 

See, e.g., Kramer v. Continental Cas. 

Co., 641 So. 2d 557 (La. Ct. App. 1994). In 

Kramer, a motel allowed a group of high 

school students have a party during which 

underage attendees drank alcoholic beverages. 

After receiving numerous complaints, 

the employees ordered all non- registered 

Sometimes wellintentioned 

establishments 

and hosts create additional 

unexpected liabilities 

through the actions that 

they take to address 

problem drinkers. 

guests to leave. The plaintiff complied, leaving 

in car driven by a student who drank 

alcohol at the party. The student, who had 

a bloodalcohol concentration (BAC) of 

0.15, lost control of the vehicle and crashed. 

The plaintiff was seriously injured and 

sued the motel, among others. An appellate 

court found that the motel’s history of 

providing a venue for underage drinking 

facilitated the dangerous conduct and giving 

rise to a duty of care that was violated 

when the hotel evicted the partygoers. The 

court explained that the motel’s “actions of 

throwing out intoxicated under age teenagers 

onto the motoring public was the 

worse [sic] possible option the [motel] did 

exercise, after allowing them to get intoxicated 

there. We find this conduct unreasonable.” 

Although the court seemingly 

limited the case to situations in which an 

innkeeper engages in outrageous conduct, 

a licensee should take care to discourage 

intoxicated persons evicted from their 

establishments or homes from driving and 

strongly consider requesting assistance 

from law enforcement when appropriate. 

Negligent Supervision 

Responsible licensees routinely monitor 


their customers’ drinking. Can they be held 

accountable if they do so negligently The 

answer is less than clear. See, e.g., Bauer v. 

Nesbitt, 969 A.2d 1122 (N.J. 2009), reversing 

Bauer v. Nesbitt, 942 A.2d 882 (N.J. Ct. 

App. 2008). In Bauer, the decedent and an 

underage friend had some drinks together 

before going to the subject establishment. 

Once there, they ordered food and drinks. 

The friend ordered soda, but the decedent 

ordered beer and spiked his friend’s drinks. 

By the time they left, both of them were 

extremely intoxicated. The decedent was 

killed when his friend lost control of the 

vehicle that they were riding in. The decedent’s 

estate sued the establishment. A trial 

court dismissed the action on the basis that 

the establishment did not serve the friend 

alcohol, and the decedent’s estate appealed. 

An appellate court reversed, holding that 

the establishment was liable because it 

(1) had a duty to ensure that the decedent 

“was driven home by a sober companion,” 

and (2) had a duty to protect the visibly 

intoxicated friend from injuring himself 

or others. The court suggested that the 

establishment’s breach of the latter duty 

constituted negligent supervision. Not surprisingly, 

this case caused significant consternation 

in the hospitality industry since 

it imposed a seemingly impossible burden 

and exposed licensees to limitless liability. 

However, the New Jersey Supreme Court 

reversed. The New Jersey Supreme Court 

noted that the purpose of the dram shop 

law was to balance the needs of licensees 

to obtain affordable insurance and the victims’ 

right to recover by limiting causes of 

action to negligent or illegal service. The 

court held that the dram shop law held 

establishments responsible for their own 

actions and did not impose a duty upon 

them to monitor each and every guest, let 

alone those who were not served alcohol. 

While the New Jersey Supreme Court ultimately 

resolved the issue in the establishment’s 

favor, the case trajectory reflects real 

risk. With a different set of judges the result 

obviously could have been quite different. 

Insurance and Indemnification 

Every licensee that serves alcohol should 

obtain appropriate insurance. General liability 

policies generally exclude coverage 

for negligent service and, in any event, 

only provide coverage for harms occurring 

on an establishment’s premises. A 

licensee should obtain liquor liability policies 

that cover the licensee and the licensee’s 

employees for 

• Assaults and batteries occurring on 

premises; 

• Lawsuits brought by third parties who 

are injured off premises by a patron 

served at the establishment; 

• All available types of damages ranging 

the gamut from bodily injury to mental 

anguish; 

• Employee drinking, although some 

insurance companies will exclude coverage 

for this; and 

• Defense costs. 

Whether or not a licensee can find such 

expansive coverage may depend on the 

jurisdiction. 

In addition, a licensee should consider 

purchasing insurance that provides discounts 

for having a positive track record 

and participating in safety training. Establishments 

that permit others to host events 

on their premises, such as hotels or motels, 

should strongly consider requiring the 

hosts to indemnify them if the hosts intend 

to serve alcohol. In such cases, they should 

also consider requiring the hosts to provide 

proof of insurance. 

Reducing the Risk of Liability 

Establishments can protect themselves in a 

variety of ways. A licensee should in particular 

do the following. 

• Become familiar with the laws, regulations, 

and standards of care for in the respective 

state or states and follow them. 

• Obtain state certification as a responsible 

vendor when available. 

• Draft written policies and follow them. 

A good policy should highlight an establishment’s 

commitment to safe and 

responsible service, establish responsible 

business practices, describe service 

policies and procedures, identify the 

people responsible for implementing 

them, establish a “chain of command,” 

and specify penalties for violations. 

• Provide training to staff by certified 

trainers. Staff should attend training 

regularly to ensure that they know how 

to identify intoxicated customers, avoid 

over- serving, understand the importance 

of responsible service, and remain 

current with the law. Staff should learn

how to detect false or altered identification 

and to refrain from over pouring. To 

achieve the best results, an establishment 

should partner with independent outside 

providers to provide training, including 

private companies, nonprofit organizations, 

or both types that can ensure that 

licensees meet industry standards. 

• Supervise and monitor employee compliance 

with policies and procedures. A 

licensee should hire outside monitors to 

pose as customers, also known as “mystery 

shoppers” or “spotters,” to audit 

employee compliance. 

• Include compliance with responsible 

service policies in employee evaluations 

and otherwise hold employees 

accountable. 

• Prohibit employees from drinking alcoholic 

beverages while working and from 

arriving for work under the influence of 

alcohol. 

• Ask employees to avoid engaging in behaviors 

that encourage customers to 

overindulge and to adopt behaviors intended 

to counteract overindulgence. 

For example, encourage eating and the 

consumption of nonalcoholic beverages, 

limit happy hours, provide slower service 

for those who appear to becoming intoxicated, 

and prohibit contests that aware 

prizes to staff who serve the most alcohol. 

• Require that anyone who appears to be 

under the age of 30 produce proper proof 

of age. 

• Refuse service to known habitual drunkards 

and visibly intoxicated patrons. 

• Remove customers who become belligerent 

or drunk, but do not facilitate 

or encourage them to drive away. A 

licensee and the licensee’s employees 

should offer to call belligerent or drunk 

customers a cab. 

• Encourage designated drivers, post signs 

advertising a licensee’s willingness to 

call taxis, and otherwise promote safe 

transportation alternatives for customers 

who should not drive. 

• Document and track all incidents. This 

is important primarily for two reasons. 

First, many people learn more from failures 

than successes. By analyzing incidents, 

an establishment can appreciate 

the dangers of improper service better 

and reduce the likelihood of repeating 

mistakes. Second, contrary to what 

some would have the public believe, the 

vast majority of establishments have few 

incidents. Documentation showing that 

an establishment has few, if any, problems 

due to inappropriately serving customers 

who the establishment should 

cut off can become invaluable to successful 

defense during a trial. 

• Publicize responsible business practices 

to customers and members of the community. 

Obtain and maintain proper 

insurance. 

Practitioners also should take advantage 

of the numerous national organizations 

that provide excellent resources on licensee 

liability, including the American Beverage 

Licensees, http://ablusa.org/, the Responsible 

Hospitality Institute, http://www.rhiweb. 

org/, and the Responsible Retailing Forum, 

http://www.rrforum.org/. Following these suggestions 

reduces risk, promotes customer 

and public safety, and facilitates mounting 

a good defense if someone is harmed. 

Defending a Dram Shop Case 

To craft the best possible defense when 

defending an establishment in a dram shop 

case a defense attorney will want to understand 

the applicable statute of limitations, 

investigate a case carefully, use motions 

in limine to exclude evidence strategically, 

and draw from some other specific 

trial tactics such as ferreting out potential 

jurors’ positions on individual personal 

responsibility. 

Statutes of Limitations 

The statutes of limitations of dram shop 

laws obviously vary dramatically from 

state to state. These laws often contain limitations 

of actions significantly shorter 

than those in general negligence statutes. 

Review the relevant statutes and ensure 

that the plaintiff filed his or her lawsuit 

timely since some states’ laws require that 

plaintiffs formally initiate actions in a matter 

of months. 

Case Investigation 

The investigation phases of cases often 

determine whether or not defense attorneys 

will win or lose. Defense attorneys 

must initiate their investigations as quickly 

as possible because memories fade, evidence 

disappears, and witnesses, including 

hospitality staff, tend to be transient. A 

defense attorney should inspect an establishment. 

Many establishments have cameras 

that may provide invaluable evidence. 

Unfortunately, an establishment generally 

maintain videos only for a short period 

of time, typically 30 to 90 days. Defense 

counsel should obtain copies of videos if 

available and a client’s policies concerning 

preservation of video evidence. 

Establishments that 

permit others to host 

events on their premises… 

should strongly consider 

requiring the hosts to 

indemnify them if the hosts 

intend to serve alcohol. 

Defense counsel also should obtain 

and review all policies and procedures 

related to the service of alcoholic beverages, 

retrieve all paperwork related to all 

transactions involving a tortfeasor, not just 

those from the day or night in question, 

and interview management and staff. It is 

essential to understand the service policies 

and to determine whether staff 

• Knew the law and their responsibilities 

under it; 

• Received training in responsible service, 

and if so, how and from whom; 

• Freely poured or measured alcohol when 

making drinks or used a machine to 

automatically pour drinks; 

• Offered customers food and nonalcoholic 

beverages; 

• Monitored customers’ drinking; 

• Knew how to identify an intoxicated 

person; 

• Ever refused service to anyone or evicted 

anyone because he or she was impaired; 

• Knew a tortfeasor before an incident and 

how well, meaning was he or she a “regular” 

If so, what types of drinks did the 

tortfeasor prefer Did the staff ever see 

the tortfeasor intoxicated How did the 

tortfeasor appear when intoxicated 



Defense counsel also should ask detailed 

questions about the day or night of the incident, 

including 

• How many customers were present the 

day or night of an incident 

• What was the occupancy limit 

• How many staff members were present 

• When did the tortfeasor arrive 

• Did you know him or her 

Defense attorneys must 

initiate their investigations as 

quickly as possible because 

memories fade, evidence 

disappears, and witnesses, 

including hospitality staff, 

tend to be transient. 

• Was anyone with him or her And if so, 

who Did you know them 

• Who served him or her And what training 

and experience did that person have 

• What did the tortfeasor eat and drink 

and over how long 

• Did you monitor the tortfeasor’s drinking 

and condition How carefully Did 

you see anything that concerned you 

Did he or she appear intoxicated Did 

the tortfeasor have a flushed face, bloodshot 

eyes, or slurred speech 

• Who paid for the items and how Counsel 

should obtain all receipts. 

• Did the tortfeasor pay the bill Did he 

or she have any problem producing the 

right amount of cash or a credit card 

• Was the tortfeasor able to get up and 

walk out without help 

• How did the tortfeasor appear before, 

during, and after receiving the service 

• Did anyone offer to call a cab for the 

tortfeasor 

• When did the tortfeasor leave 

Defense counsel also should determine 

if a tortfeasor visited multiple establishments. 

Some establishments hold contests 

for staff or otherwise reward them for selling 

alcoholic beverages, a risky practice 


from a liability standpoint, to say the least. 

Counsel should determine whether that 

took place on the day or night of a tortfeasor’s 

visit. 

The police typically investigate crashes, 

and, when appropriate, a prosecutor will 

prosecute particular parties. A defense 

attorney should obtain all public records 

from a police investigation and a criminal 

case, including the police reports, the 

court file, and the prosecutor’s file, preferably 

before deposing a tortfeasor. Officers 

often investigate a driver in detail. Their 

reports may provide valuable information 

critical to a case. 

A defense attorney should hire an accident 

reconstructionist and a forensic 

toxicologist to analyze the police report 

information. These experts may be able to 

use the information to identify alternative 

or confounding causes, such as medication 

or drugs, equipment failure, or failing 

to use seatbelts, verify fault, including 

all of the parties’ comparative negligence, 

and estimate the tortfeasor’s bloodalcohol 

content at different points in time. 

And, as in any other type of case, defense 

counsel should engage in discovery. If a 

tortfeasor or a third party was treated by 

a fire- rescue team or hospitalized, counsel 

should obtain the treatment records. 

Hospitals often test patients for alcohol or 

drug use. 

Further, counsel should depose a 

tortfeasor and a third party as quickly as 

possible before their memories fade. When 

deposing tortfeasor, counsel should vigorously 

question him or her on the same 

issues discussed above. Counsel also should 

thoroughly explore a tortfeasor’s drinking 

habits. For example, counsel should ask a 

tortfeasor the following questions: 

• How often do you drink 

• Do you ever drink alone 

• How many drinks do you have a week 

• How many times a week do you have 

more than two drinks Then repeat 

the question increasing the number of 

drinks. 

• Have you ever consumed alcohol while 

working 

• What is your favorite drink 

• Do you believe that you have a drinking 

or drug problem 

• Has anyone ever suggested that you 

reduce your drinking 

• Has anyone ever told you that you have 

a drinking a problem 

• Has anyone ever recommended that 

you obtain treatment for a drinking 

problem 

• Have you ever considered going to Alcoholics 

Anonymous (AA) or any type of 

treatment 

• Have you ever gone to an AA meeting or 

obtained any kind of treatment 

Finally, counsel should thoroughly 

explore the context and events leading to 

an incident, and the incident itself. For 

example, counsel should ask, 

• How tall are you 

• How much did you weigh on the day or 

night of the incident 

• When was the last time that you slept 

before the incident Where How long 

Did you feel rested 

• Did you eat before or while drinking If 

not, when was your last meal What did 

you eat How much did you eat Were 

you full 

• What time did you start drinking 

• What did you drink Then ask when 

each drink was consumed and how 

quickly. 

• How much did you have to drink As 

this question for each type of drink. 

• Where did you drink Counsel must 

determine if a tortfeasor consumed alcohol 

at any location other than the client’s 

or host’s establishment. 

• When did you stop 

• If someone poured or made a drink 

for the tortfeasor, ask, do you know 

what types of alcohol are in that drink 

Did you see the person pour it Did 

he or she measure the pour or use a 

machine to assist him or her Did he or 

she pour more than a shot glass’s worth 

of alcohol 

• Was anyone with you Explore this for 

each issue. 

• Did anyone tell you that you shouldn’t 

have more to drink 

• Did anyone refuse to serve you 

• Did you feel the effects of alcohol 

• Did you think that you were drunk 

• Did anyone else tell you that they 

thought you were drunk 

• Did anyone tell you that you shouldn’t 

drive 

• Did anyone offer to call you a cab or to 

give you a ride

Motions in Limine 

Using motions in limine strategically to 

exclude certain evidence can shore up a 

defense, specifically prior bad act evidence, 

character evidence, blood alcohol content 

evidence, and subsequent remedial measure 

evidence. 

Evidence Concerning an Establishment’s 

or Host’s Prior Bad Acts 

A plaintiff’s attorney will often attempt to introduce 

prior bad acts and other types of evidence 

attacking an establishment or a host’s 

character or reputation. Examples include 

• Evidence regarding past parties or other 

raucous events; 

• Specials on alcoholic beverages on any 

occasion other than the incident date; 

• Contests that the establishment or host 

held for servers, customers, or guests 

on any occasion other than the incident 

date; 

• Prior incidents or lawsuits; if they exists, 

council should be careful about “opening 

the door” by arguing that the establishment 

or host has good character. 

Courts generally will not admit these 

types of evidence unless the offering party 

can prove “habit.” Proving habit is extremely 

difficult. See, e.g., Verni v. Harry 

M. Stevens, Inc., 903 A.2d 475 (N.J. Ct. App. 

2006). In Verni, the tortfeasor attended a 

football game at Giants Stadium. He tailgated 

before entering the stadium. During 

the first half of the game he purchased 

two beers and became “shit-faced.” He 

bought several more 16-ounce beers, tipping 

the server an extra $10 “to bypass the 

stadium’s two-beer limit.” He bought and 

smoked some marijuana in the spirals before 

leaving the game. Later that evening, 

he seriously injured a mother and her twoyear-old 

daughter when he swerved across 

a lane of traffic and struck their car. Blood 

tests revealed that the tortfeasor’s bloodalcohol 

content was .266 half an hour after 

the crash. During the trial, the plaintiff’s attorney 

introduced a great deal of evidence 

about the game’s “culture of drinking,” including 

testimony that many fans attended 

games while extremely intoxicated, stadium 

employees “violated the applicable industry 

standard of care in failing to properly 

train their employees by requiring them 

to be TIPS certified,” and employees regularly 

served beer to visibly intoxicated people. 

The jury awarded compensatory and 

punitive damages exceeding $109,000,000. 

On appeal, the court reversed, finding that 

much of the evidence was inadmissible. 

The Verni court recognized that “‘before 

a court may admit evidence of habit, the 

offering party must establish the degree 

of specificity and frequency of uniform 

response that ensures more than a mere 

‘tendency’ to act in a given manner, but 

rather, conduct that is semi- automatic’ in 

response.’” (quoting Thompson v. Boggs, 

33 F.3d 847 (7th Cir. 1994). The court ruled 

that the trial court erred when it admitted 

character evidence and evidence 

• Of wrongful hiring, training or 

supervision; 

• That fans engaged in rowdy behavior 

while attending the games; 

• That fans often became drunk because 

the plaintiffs could not show that they 

became intoxicated because they were 

served alcohol at the stadium; and 

• Of specific service violations. 

Engineers, Architects, Scientists & Fire Investigators 

The court also excluded evidence that the 

concessions contractor violated alcohol 

service policies over the course of years 

because, while marginally relevant, the 

probative value was substantially outweighed 

by the unfair prejudicial value. 

Evidence of a Tortfeasor’s 

Character and Habits 

In states where establishments are only 

responsible for serving visibly intoxicated 

patrons, an attorney should move to 

exclude evidence of a tortfeasor’s drinking 

habits and history because they are irrelevant. 

In jurisdictions where establishments 

are liable for serving habitual addicts, this 

evidence is admissible because it establishes 

an element of the claim. In these 

jurisdictions, counsel should consider stipulating 

that the tortfeasor was a habitual 

addict and move to exclude this highly prejudicial 

evidence. In such a case, counsel 

could simply argue that the establishment 

Dram Shop Laws, continued on page 65 

Bar Operations & Liquor Liability 

Elizabeth A. Trendowski 

etrendowski@robsonforensic.com 

800.813.6736 

Facilities / Grounds Maintenance 

Brian O’Donel 

bodonel@robsonforensic.com 

800.813.6736 

Supervised Care / Day Care Centers 

Lisa A. Thorsen, Ed.D., C.R.C. 

lthorsen@robsonforensic.com 

800.813.6736 

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Shop, Stop and Roll 

By Jennifer M. Herrmann 

and Marci D. Guevara 

Detaining Shoplifters 

Without Incurring 

Civil Liability 

Guidelines for detaining 

suspects and recovering 

stolen merchandise 

while avoiding claims 

for false imprisonment. 

Shoplifting. Every retailer has to deal with it. Indeed, people 

shoplift $35 million worth of merchandise every single 

day. National Association of Shoplifting Prevention, Shoplifting 

Statistics, http://www.shopliftingprevention.org/whatnasp 

offers/nrc/publiceducstats.htm (last visited 

December 15, 2011). Unfortunately, though, 

shoplifters report that they only get caught 

one out of every 48 times that they steal. 

Id. If accurate, this is a daunting reality for 

retailers. How should a retailer respond 

when he or she believes that he or she 

has detected a shoplifter Confront the 

shoplifter Call the police Do nothing 

This article explains the statutory rights of 

retailers encountering suspected shoplifters. 

Importantly, this article explains how 

retailers can exercise their rights without 

improperly detaining suspected shoplifters 

and thereby opening themselves up to 

false imprisonment lawsuits. 

Most states have enacted statutes that 

permit retailers to detain shoppers reasonably 

suspected of shoplifting. Robert A. Brazener, 

Annotation, Construction and Effect, 

in False Imprisonment Action, of Statute 

Providing for Detention of Suspected Shoplifters, 

47 A.L.R.3d 998 (1973). In general, 

under the statutes and the corresponding 

case law, for a retailer to avoid civil liability 

for false imprisonment of a suspected 

shoplifter the retailer must carry out a detention 

in a reasonable manner and for a 

reasonable time. Id. at §2[a]. The goal for a 

retailer, then, is to strike that balance between 

detaining a shoplifter and recovering 

merchandise with avoiding improperly detaining 

a shopper. To strike that balance, a 

retailer and the retailer’s employees should 

adhere to the following six guidelines. 

Conduct a Reasonable Investigation 

In many cases courts have considered a 

retailer’s failure to conduct a reasonable 

investigation an important factor in determining 

the reasonableness of a detention. 

Brazener, supra, at §6. When possible, a 

retailer should observe the behavior of the 

suspected shoplifter, question him or her, 

explain to the shoplifter what is happening 

and why, look at his or her sales receipt, and 

question store employees. Take the following 

cases on point: 

• A Louisiana court held a retailer liable 

for false imprisonment when a retailer 


■ Jennifer M. Herrmann is a partner in the Indianapolis office of Kightlinger & Gray, LLP. She focuses her 

practice in the areas of premises liability, product liability, contract law, and insurance defense litigation. 

Marci D. Guevara is an associate in the Indianapolis office of Kightlinger & Gray, LLP. She practices in the 

areas of business and corporate law as well as trucking law.

detained a shopper without questioning 

her or investigating the incident. Derouen 

v. Miller, 614 So. 2d 1304 (La. Ct. 

App. 1993). 

• An Iowa court held that detentions 

of customers selected at random for 

searches were not protected by the shoplifting 

statute. Zohn v. Menard, Inc., 598 

N.W.2d 323 (Iowa Ct. App. 1999). 

• An Oregon court held that store employees 

were not justified in detaining 

a 13-year-old plaintiff based on a security 

guard’s description of the shoplifter 

as being a young, white male, around 

five foot three inches tall, weighing 120 

pounds, with brown hair, blue eyes, and 

wearing blue jeans, a green jacket, a baseball 

cap, and the stolen new white tennis 

shoes, when the plaintiff was not wearing 

the baseball cap, he was not wearing or 

carrying a pair of new white shoes, and 

he was two blocks from the store in the 

opposite direction from where the shoplifters 

had run. Wolf v. Nordstrom, 626 

P.2d 953 (Or. Ct. App. 1981). 

End the Detention as Soon as Possible 

Often a retailer will detain a suspected 

shoplifter, but after a quick investigation, 

the merchant determines that a theft has 

not occurred. Brazener, supra, at §7[a]. In 

such cases, a retailer no longer has justification 

for detaining a shopper and should 

release the shopper immediately. Id. The 

following cases illustrate this principle: 

• A Florida court held that detaining two 

girls momentarily and searching their 

pocketbooks were reasonable. Meadows 

v. F. W. Woolworth Co., 254 F. Supp. 907 

(D. Fla. 1966). 

• The Eighth Circuit, applying Arkansas 

law, held that detaining a customer who 

was suspected of hiding cologne in her 

halter top was unreasonable after the 

customer proved that she had not hidden 

cologne in her halter top. Murray v. Wal- 

Mart, Inc., 874 F.2d 555 (8th Cir. 1989). 

• A Montana court held that once a security 

guard questioned a suspected shoplifter 

and was satisfied that she had not 

shoplifted, a second store employee no 

longer could legitimately further detain 

and question the shopper. Turner v. 

Hudson Salvage, Inc., 709 So. 2d 425 

(Miss. 1998). 

• An Illinois court held that a retailer’s 

detention of a suspected shoplifter 

was not reasonable when the retailer 

detained the shopper for 15 minutes 

after the search was concluded when the 

search determined that the retailer did 

not have grounds to continue holding 

the shopper. Adams v. Zayre Corp., 499 

N.E.2d 678 (Ill. App. Ct. 1986). 

Do Not Detain Solely for a Confession 

or Release from Liability 

The shoplifting statutes that protect a 

retailer from liability for false imprisonment 

will not protect a retailer if the 

retailer prolongs a detention solely either to 

obtain a confession or to execute a release 

of the store from liability relating to the 

detention. Brazener, supra, at §10[a]. The 

following case illustrates this point: 

• A Minnesota court held that when a 

retailer’s purpose in detaining a customer 

was not to deliver him to police 

but rather to have him sign a confession, 

the retailer was not protected from liability 

for false imprisonment. Altman 

v. Knox Lumber Co., 381 N.W.2d 858 

(Minn. Ct. App. 1986). 

Stay Professional 

It is easy to imagine how a frustrated 

retailer may act unprofessionally when 

dealing with a suspected thief. However, 

if a retailer fails to keep his or her cool, 

behaves rudely, harasses a suspected shoplifter, 

unnecessarily embarrasses someone, 

or uses excessive force, the merchant may 

have to assume liability for an unreasonable 

detention. Brazener, supra, at §10[b]. 

Note the following cases on this point: 

• A Minnesota court held that excessive 

force was used when a 28-year-old bodybuilder 

security guard pinned a 73-yearold 

man’s arms behind him while the 

shopper was seated in a chair. Altman 

v. Knox Lumber Co., 381 N.W.2d 858 

(Minn. Ct. App. 1986). 

• A North Carolina court held that a 

retailer unreasonably detained suspected 

shoplifters when the retailer 

refused to search the shoppers’ pocket 

books, call police, or to explain why 

the shoppers could not leave the store. 

Ayscue v. Mullen, 336 S.E.2d 863 (N.C. 

Ct. App. 1985). 

• A Texas court held that a retailer’s detention 

of a shopper was unreasonable 

when a guard refused to retrieve a shopper’s 

receipt from the shopper’s car, verbally 

taunted the shopper, refused him 

a cup of water, and, after police arrived, 

placed the shopper on the floor with the 

guard’s knee in the shopper’s back to 

exchange handcuffs with the police. Dillard 

Department Stores, Inc. v. Silva, 148 

S.W.3d 370 (Tex. 2004). 

Shoplifting statutes… 

will not protect a retailer 

if the retailer prolongs a 

detention solely either to 

obtain a confession or 

to execute a release of 

the store from liability. 

Be Careful When Relying on 

Third-Party Information 

Retailers often detain suspected shoplifters 

after receiving tips from employees or other 

shoppers. Information from a third party 

alone, however, will not protect a retailer 

from civil liability. Brazener, supra, at §5. If 

a third party was unreasonable in believing 

that shoplifting had occurred, a court can 

hold a retailer liable for false imprisonment 

of the suspected shoplifter. Id. A retailer, 

then, should not detain a suspected shoplifter 

unless the retailer has verified the 

information provided by the third party, as 

exemplified by the following cases: 

• A Mississippi court held that a retailer unjustifiably 

detained a suspected shoplifter 

when the retailer detained the shopper after 

someone in the store told one of the 

clerks that he suspected the shopper of 

shoplifting, and then that clerk reported 

the information to the assistant manager 

of the store, who then detained the suspected 

shoplifter. J.C. Penney Co. v. Cox, 

148 So. 2d 679 (Miss. 1963). 

Play It Safe 

Retailers wanting to do everything in their 

Shoplifters, continued on page 68 



Slip and Fall in 

Aisle Four 

By Renee W. Dwyer 

and Russell N. Jarem 

Modern Premises 

Liability Challenges 

to Retail Operations 

“Self-service” operations 

in particular should 

note the growing 

number of states that are 

adopting the heightened 

“mode of operation” 

standard of care. 

In 2007, in Kelly v. Stop & Shop, 281 Conn. 768 (Conn. 

2007), the Connecticut Supreme Court determined that 

certain retail enterprises should bear the burden of rebutting 

a plaintiff’s claim that the defendant was negligent, 

and a plaintiff can satisfy a prima facie negligence 

standard by presenting evidence 

that the defendant’s mode of business operation 

leads “to a foreseeable risk of injury” 

and “the plaintiff’s injury was proximately 

caused by an accident within the zone of 

risk.” Id. at 791. 

The court’s decision abrogated the traditional 

premises liability standard under 

which a plaintiff was required to establish 

that a defendant had actual or constructive 

notice of a specific hazard. In adopting the 

mode of operation standard, Connecticut 

joined a growing number of states that 

have held certain retail establishments to 

a greater standard of care than in the past 

under traditional premises liability law. 

The Approaches 

Retailers face liability everyday from slips 

and falls that people experience in their establishments. 

“Self- service” operations need 

to insulate themselves more vigilantly from 

liability exposure than other retail establishments 

due to the “mode of operation” rule 

adopted by many states across the country. 

As the Connecticut Supreme Court noted in 

Kelley, “[t]here is… a distinct modern trend 

favoring the rule, and it appears that most 

courts that have considered the rule have adopted 

it.” Kelly, 281 Conn. at 783. 

Under traditional premises liability law, 

a retail store owner has a duty to keep a 

premises in a reasonably safe condition 

for the benefit of store customers. In situations 

involving falls, most courts require 

a plaintiff to show that the condition causing 

him or her to slip and fall existed long 

enough so that the defendant should have 

discovered it and should have remedied it. 

In other words, the plaintiff is generally 

required to plead and prove that the retailer 

had actual or constructive knowledge of a 

hazard. In these cases, a third party such 

as a customer usually creates the hazard 

that a plaintiff blames for his or her injury. 


■ Renee W. Dwyer and Russell N. Jarem are partners of Gordon Muir & Foley in Hartford, Connecticut. 

Ms. Dwyer, a member of DRI’s Retail and Hospitality Committee, routinely represents major retailers in the 

defense of serious premises liability actions, as well as retail store false arrest claims, malicious prosecution 

claims, and pharmacy liability claims. Mr. Jarem’s practice includes premises liability defense of landowners 

and leaseholders for premises defects and retail operations. He is a member of the DRI Employment and 

Labor Law Committee.

The growing trend in most jurisdictions 

relieves a plaintiff of this burden, particularly 

in selfservice situations. Courts that 

dispense with the traditional requirements 

of notice recognize either a “mode of operation” 

or a “recurring condition” basis for 

liability under which a plaintiff bases the 

defendant’s liability on the methods used 

by the defendant to run the defendant’s 

business. The “mode of operation” rule differs 

from the standard premises liability 

rule in that with the “mode of operation 

rule” courts “allow a customer injured due 

to a condition inherent in the way [a] store 

is operated to recover without establishing 

that the proprietor had actual or constructive 

knowledge of the dangerous condition.” 

Jackson v. K-Mart Corp., 251 Kan. 

700, 702, 840 P.2d 463 (Kan. 1992). 

Some states, namely Arkansas, New 

York, and Maine, apply the “recurring condition” 

rule, which may result in greater potential 

liability than a “mode of operation” 

rule. While a retail establishment may avoid 

liability by showing that it took “precautions 

reasonably necessary to protect its customers,” 

an owner that knows of recurring conditions 

“that pose[ ] a potential danger to 

invitees may not ignore that knowledge and 

fail reasonably to respond to the foreseeable 

danger of the likelihood of a recurrence of 

the condition.” Dumont v. Shaw’s Supermarkets, 

664 A.2d 846, 849 (Me. 1995). See 

also Brookshires Grocery Co. v. Pierce, 71 

Ark. App. 203, 205 (Ark. Ct. App. 2000); Simoni 

v. 2095 Cruger Associates, 285 A.D. 2d 

431, 729 N.Y.S.2d 10 (N.Y. App. Div. 2001). 

In these cases, any potential recurring hazard, 

as opposed to one arising from a selfservice 

mode of operation, may expose a 

retail establishment to liability. 

The following jurisdictions have adopted 

the mode of operation approach: Arizona, 

Connecticut, Hawaii, Idaho, Illinois, Indiana, 

Kansas, Massachusetts, Mississippi, 

Missouri, Montana, New Jersey, New Mexico, 

Oklahoma, Tennessee, Texas, Utah, 

Vermont, Washington, Wisconsin, and Wyoming. 

See Chiara v. Fry’s Food Stores of 

Ariz., Inc., 152 Ariz. 398, 401, 733 P.2d 283 

(Ariz. 1987); Kelly, 281 Conn. 768 (Conn. 

2007); Gump v. Wal-mart Stores, Inc., 93 

Hawai’i 428, 441–444, 5 P.3d 418 (Haw. Ct. 

App.1999), aff’d in part and rev’d in part on 

other grounds, 93 Hawai’i 417, 5 P.3d 407 

(Haw. 2000); McDonald v. Safeway Stores, 

Inc., 109 Idaho 305, 308, 707 P.2d 416 (Idaho 

1985); Donoho v. O’Connell’s, Inc., 13 Ill. 2d 

113, 118, 124–125, 148 N.E.2d 434 (Ill. 1958); 

Golba v. Kohl’s Dep’t Store, Inc., 585 N.E.2d 

14, 17 (Ind. Ct. App. 1992); Jackson v. K- 

Mart Corp., 251 Kan. 700, 710, 840 P.2d 463 

(Kan. 1992); Sheehan v. Roche Brothers Supermarket, 

Inc., 440 Mass. 780, 863 N.E.2d 

1276 (Mass. 2007); Waller v. Dixieland Food 

Stores, Inc., 492 So. 2d 283 (Miss. 1986); 

Sheil v. T.G. & Y. Stores Co., 781 S.W.2d 

778, 782 (Mo. 1989); Richardson v. Corvallis 

Public School District, 286 Mont. 309, 950 

P.2d 748 (Mont. 1997); Wollerman v. Grand 

Union Stores, Inc., 47 N.J. 426, 429, 221 A.2d 

513 (N.J. 1966); Mahoney v. J.C. Penney Co., 

71 N.M. 244, 259–260, 377 P.2d 663 (N.M. 

1962); Lingerfelt v. Winn- Dixie Tex., Inc., 

645 P.2d 485, 489 (Okla. 1982); Worsham 

v. Pilot Oil Corp., 728 S.W.2d 19 (Tenn. Ct. 

App. 1987); Corbin v. Safeway Stores, Inc., 

648 S.W.2d 292, 298 (Tex. 1983); Canfield v. 

Albertsons, Inc., 841 P.2d 1224, 1226 (Utah 

Ct. App. 1992); Debus v. Grand Union Stores 

of Vt., 159 Vt. 537, 545–546, 621 A.2d 1288 

(Vt. 1993); Pimentel v. Roundup Co., 100 

Wash. 2d 39, 47, 49, 666 P.2d 888 (Wash. 

1983); Steinhorst v. H.C. Prange Co., 48 Wis. 

2d 679, 683–684, 180 N.W.2d 525 (Wis. 

1970); Buttrey Food Stores Div. v. Coulson, 

620 P.2d 549, 553 (Wyo. 1980). 

The following jurisdictions follow a 

burdenshifting approach, in which the 

defendant must establish that it exercised 

reasonable care under the circumstances of 

the selfservice operation: Colorado, Georgia, 

and Kentucky. See Safeway Stores, Inc. 

v. Smith, 658 P.2d 255, 258 (Colo. 1983); 

Davis v. Bruno’s Supermarkets, Inc., 263 Ga. 

App. 147, 148–149, 587 S.E.2d 279 (Ga. Ct. 

App. 2003); Lanier v. Wal-Mart Stores, Inc., 

99 S.W.3d 431, 436 (Ky. 2003). 

Although New Jersey and Oklahoma 

follow the “mode of operation” approach, 

both jurisdictions also incorporate burdenshifting 

principles. See Wollerman v. Grand 

Union Stores, Inc., 47 N.J. at 429–30, 221 

A.2d at 513; Lingerfelt v. Winn-Dixie Tex., 

Inc., 645 P.2d at 485, 489. 

Other states that follow a hybrid 

approach are Illinois, combining the traditional 

and the “mode of operation” 

approaches, and New Mexico, combining 

the “mode of operation” and the “recurring 

condition” approaches. See Donoho v. 

O’Connell’s, Inc., 13 Ill. 2d 113, 118, 124– 

Courts that dispense with 

the traditional requirements 

of notice recognize either 

a “mode of operation” or 

a “recurring condition” 

basis for liability. 

125, 148 N.E.2d 434 (Ill. 1958); Mahoney v. 

J.C. Penney Co., 71 N.M. 244, 259–260, 377 

P.2d 663 (N.M. 1962). 

The following jurisdictions currently follow 

the traditional premises liability approach, 

in some cases rejecting the “mode 

of operation” standard outright: Alabama, 

Alaska, California, Delaware, Florida, Iowa, 

Louisiana, Maryland, Michigan, Minnesota, 

Nebraska, Nevada, New Hampshire, 

New York, North Carolina, North Dakota, 

Ohio, Oregon, Pennsylvania, Rhode Island, 

South Carolina, South Dakota, Virginia, 

and West Virginia. See S.H. Kress & Co. v. 

Thompson, 267 Ala. 566, 569, 103 So. 2d 

171 (Ala. 1957); Kremer v. Carr’s Food Ctr., 

Inc., 462 P.2d 747, 749 (Alaska 1969); Ortega 

v. Kmart Corp., 26 Cal. 4th 1200, 114 Cal. 

Rptr. 2d 470, 36 P.3d 11 (Cal. 2001); Howard 

v. Food Fair Stores, New Castle, 57 Del. 471, 

480, 201 A.2d 638 (Del. 1964); Richardson v. 

Commodore, Inc., 599 N.W.2d 693, 696 (Iowa 

1999), abrogated on other grounds, Koenig v. 

Koenig, 766 N.W.2d 635 (Iowa 2009); Kavlich 

v. Kramer, 315 So. 2d 282 (La. 1975), superseded 

by statute, La. Rev. Stat. §9:2800.6 

(1997); Maans v. Giant of Md., LLC, 161 

Md. App. 620, 639, 871 A.2d 627 (Md. Ct. 

Spec. App. 2005); Whitmore v. Sears, Roebuck 

& Co., 89 Mich. App. 3, 8, 279 N.W.2d 

318 (Mich. Ct. App. 1979); Norman v. Tradehome 

Shoe Stores, Inc., 270 Minn. 101, 106, 

132 N.W.2d 745 (Minn. 1965); Herrera v. 

Fleming Cos., 265 Neb. 118, 122, 655 N.W.2d 

378 (Neb. 2003); Sprague v. Lucky Stores, 

Inc., 109 Nev. 247, 849 P.2d 320 (Nev. 1993); 

Simpson v. Wal-Mart Stores, Inc., 144 N.H. 

571, 574, 744 A.2d 625 (N.H. 1999); Gordon 

v. American Museum of Natural History, 

67 N.Y.2d 836, 837, 501 N.Y.S.2d 646, 492 



N.E.2d 774 (N.Y. 1986); Nourse v. Food Lion, 

Inc., 127 N.C. App. 235, 238, 488 S.E.2d 608 

(N.C. Ct. App. 1997); Johanson v. Nash Finch 

Co., 216 N.W.2d 271, 275 (N.D. 1974); Anaple 

v. Standard Oil Co., 162 Ohio St. 537, 541, 55 

O.O. 424, 124 N.E.2d 128 (Ohio 1955); Lee 

v. Meier & Frank Co., 166 Or. 600, 605, 114 

P.2d 136 (Or. 1941); Martino v. Great Atl. & 

Pac. Tea Co., 419 Pa. 229, 233, 213 A.2d 608 

The “mode of operation” 

rule does not impose 

strict liability on retailers as 

defendants, although it has 

been criticized as doing so. 

(Pa. 1965); Barone v. Christmas Tree Shop, 

767 A.2d 66, 68 (R.I. 2001); Wintersteen v. 

Food Lion, Inc., 344 S.C. 32, 35, 542 S.E.2d 

728 (S.C. 2001); Ballard v. Happy Jack’s Supper 

Club, 425 N.W.2d 385, 388 (S.D. 1988); 

Winn-Dixie Stores, Inc. v. Parker, 240 Va. 

180, 183 n.3, 396 S.E.2d 649 (Va. 1990); Mc- 

Donald v. University of W. Va. Bd. of Trustees, 

191 W. Va. 179, 182, 444 S.E.2d 57 (W. 

Va. 1994). 

Florida had previously followed the 

burdenshifting approach, but the legislature 

recently ensured that the burden of 

proof should remain with the plaintiff. See 

Fl. St. §768.0755. 

How the “Mode of Operation” 

Rule Evolved 

The Connecticut Supreme Court in Kelly 

v. Stop & Shop, Inc., 281 Conn. 768, 778, 

18 A.2d 249, 256 (Conn. 2007), noted that 

the “mode of operation” rule “evolved in 

response to the proliferation of selfservice 

retail establishments” and “is rooted in 

the theory that traditional notice requirements 

are unfair and unnecessary in the 

selfservice context.” In citing two earlier 

decisions that adopted the “mode of operation” 

rule, the Supreme Court of Connecticut 

noted that “[t]he modern selfservice 

form of retail sales encourages… patrons 

to obtain for themselves from shelves and 

containers the items they wish to purchase, 


and to move them from one part of the 

store to another in baskets and shopping 

carts as they continue to shop for other 

items, thus increasing the risk of droppage 

and spillage.” Id. (citing Lanier v. Wal-Mart 

Stores, Inc., 99 S.W.3d 431, 435 (Ky. 2003) 

and Ciminski v. Finn Corp., 13 Wash. App. 

815, 818, 537 P.2d 850, review denied, 86 

Wash. 2d 102 (Wash. Ct. App. 1975)). 

In Malaney v. Hannaford Bros. Co., 177 

Vt. 123, 127–128, 861 A.2d 1069 (Vt. 2004), 

the Vermont Supreme Court discussed the 

rationale for modifying the traditional 

premises liability rule that had historically 

required a plaintiff to prove that a store had 

actual or constructive notice of a hazardous 

condition. The court noted that 

[i]n modifying the traditional rule, these 

courts reasoned that while selfservice 

operations give store customers additional 

freedom to browse and select 

the merchandise they desire, they also 

pose foreseeable hazards to those customers, 

who are generally less careful 

than store employees in handling the 

merchandise…. Essentially, the courts 

have recognized that stores engaging in 

foreseeably hazardous selfservice operations 

may be deemed to have constructive 

notice of those conditions when they 

result in injury.’ 

Id. (citations and internal quotation marks 

omitted). 

Impact of the “Mode of 

Operation” Rule 

The “mode of operation” rule does not 

impose strict liability on retailers as defendants, 

although it has been criticized as 

doing so. See Kelly, 281 Conn. at 768, 790, 

18 A.2d at 263 n.8; Maans v. Giant of Maryland 

LLC, 161 Md. App 620, 638–639, 871 

A.2d 627, cert. denied, 388 Md. App. 98, 879 

A.2d 43 (Md. Ct. Spec. App. 2005), Some 

jurisdictions, such as Maine, in criticizing 

the rule, have suggested that it imposes 

strict liability on a defendant for a plaintiff’s 

injuries on the defendant’s premises 

and suggested that it makes a defendant 

the “absolute insurer” of its customers. See 

Dumont v. Shaw’s Supermarkets, Inc., 664 

A.2d 846, 849 n.1 (Me. 1995). 

In holding that the plaintiff was not 

entitled to the “mode of operation” jury 

instruction under the particular facts at 

hand, a Kansas court wrote that 

[t]he evidence in the present case was 

that on the date of the fall, Wal-Mart was 

the type of store where shoppers were 

invited to come in and pick up, carry, 

examine, and purchase merchandise for 

themselves. There was no evidence presented 

that Wal-Mart’s mode of operation 

was unique or created a situation in 

which dangerous conditions could regularly 

occur. The evidence also established 

that Wal-Mart had a system for 

checking for dangerous conditions and 

had implemented the system. It appears 

the store was making reasonable safety 

efforts commensurate with any risks 

involved in the operation of the store. 

Instructing on the modeof- operation 

rule in cases such as this would result in 

most establishments being held to a near 

strict liability standard. Most businesses 

today operate in a manner that allows 

customers to serve themselves to some 

degree. The rule is not intended to uniformly 

cover all selfservice situations. 

Hembree v. Wal-Mart of Kansas, d/b/a Wal- 

Mart Stores, Inc., 29 Kan. App. 2d 900, 904, 

35 P.3d 925, 928 (Kan. Ct. App. 2001). 

The Rule Does Not Entirely Eliminate 

the Notice Proof Requirement 

Although diminishing a plaintiff’s proof 

burden, the “mode of operation” approach 

does not eliminate a plaintiff’s burden to 

prove notice entirely. Instead, a plaintiff 

satisfies the notice proof requirement if he 

or she establishes that an injury was attributable 

to a “reasonably foreseeable dangerous 

condition on the owner’s premises 

that [was] related to the owner’s selfservice 

mode of operation.” Sheehan v. Roche Bros. 

Supermarkets, Inc., 448 Mass. 780, 786, 863 

N.E.2d 1276, 1283 (Mass. 2007). The court 

in Sheehan noted, however, that “the plaintiff, 

under this approach, is still required 

to prove that the defendant failed to take 

reasonable measures commensurate with 

the risks involved with selfservice mode 

of operation to prevent injury to invitees 

and ‘bears the burden of persuading the 

jury that the defendant acted unreasonably.’” 

Id. (citing Chiara v. Fry’s Food Stores 

of Ariz., Inc., 152 Ariz. 398, 401, 733 P.2d 

283 (Ariz. 1987)). 

Additionally, “a store owner will be liable 

to a plaintiff injured as a result of a dangerous 

condition caused by a third party

only if the owner could reasonably foresee 

that the dangerous condition could occur, 

resulting from the owner’s chosen mode 

of operation, and the owner took inadequate 

steps to forestall resulting injuries.” 

Sheehan, 448 Mass. at 791–792. And “[a] 

plaintiff would still be required to present 

evidence to supporting his or her case and 

to bear the burden of persuading the trier 

of fact that the defendant acted unreasonably 

in the circumstances.” Id. at 786–787. 

So whether an owner exercised reasonable 

care in making an establishment safe 

for invitees is a question of fact. A jury in 

such a case will need to decide whether 

the retailer took all necessary reasonable 

precautions commensurate with the risks 

inherent in a selfservice method of operation 

to protect individuals from such foreseeable 

risks, and counsel for a retailer 

needs to present evidence to support the 

position that the retailer did, in fact, take 

necessary precautions. 

How and When Courts 

Generally Apply the Rule 

A court generally will take a “mode of operation” 

approach in a situation in which 

a retailer could reasonably anticipate that 

hazardous conditions would arise regularly. 

As the Arizona Supreme Court explained, 

[t]he modeof- operation rule is of limited 

application because nearly every 

business enterprise produces some risk 

of customer interference. If the modeof- 

operation rule applied whenever customer 

interference was conceivable, the 

rule would engulf the remainder of negligence 

law. A plaintiff could get to the 

jury in most cases simply by presenting 

proof that a store’s customer could 

have conceivably produced the hazardous 

condition. 

Chiara v. Fry’s Food Stores of Ariz., Inc., 

152 Ariz. 398, 400–401, 733 P.2d 283 (Ariz. 

1987). 

The Arizona Supreme Court further 

explained that a particular mode of 

operation only falls within the “modeof- 

operation” rule when a business can 

reasonably anticipate that hazardous conditions 

will regularly arise. Id. A plaintiff 

must generally demonstrate the foreseeability 

of third-party interference before a 

court will dispense with traditional premises 

liability notice requirements. 

As discussed by the Supreme Court of 

Arizona, many cases applying “mode- ofoperation” 

rule have involved open food displays. 

Id. (citing Bloom v. Fry’s Food Stores, 

Inc., 636 P.2d 1229 (Ariz. Ct. App. 1981) 

(grapes); Tom v. S.S. Kresge Co., 633 P.2d 439 

(Ariz. Ct. App. 1981) (soft drinks)); Rhodes 

v. El Rancho Markets, 9 Ariz. App. 576, 454 

P.2d 1016 (Ariz. Ct. App. 1969) (lettuce); 

Jasko v. F.W. Woolworth Co., 177 Colo. 418, 

494 P.2d 839 (Colo. 1972) (pizza sold by the 

slice); Gonzales v. Winn-Dixie Louisiana, 

Inc., 326 So. 2d 486 (La. 1976) (glass bottle 

of olive oil); Bozza v. Vornado, Inc., 42 N.J. 

355, 200 A.2d 777 (N.J. 1964) (selfservice 

cafeteria); Ciminski v. Finn Corp., 13 Wash. 

App. 815, 537 P.2d 850 (Wash. Ct. App. 1975) 

(self-service cafeteria). 

In Connecticut, when a court first recognized 

the rule in Kelly v. Stop & Shop, Inc., 

281 Conn. 768, 791–92 (Conn. 2007), the 

court limited the rule by using the phrase 

“zone of risk.” Specifically, the court held 

that a plaintiff can establishes a prima 

facie case of negligence by presenting evidence 

that the “mode of operation” of the 

defendant’s business gives rise to a foreseeable 

risk of injury to customers and that the 

plaintiff’s injury was proximately caused by 

an accident within the “zone of risk.” Id. 

at 791. The court went on to state that “the 

prima facie case may be defeated if the defendant 

produces evidence that it took reasonable 

measures to prevent accidents such 

as the one that caused the plaintiff’s injury, 

and the plaintiff fails to establish that those 

measures did not constitute reasonable 

care under the circumstances.” Id. at 791– 

92. As such, under the “mode of operation” 

analysis, retailers do have defenses. 

Defense counsel, must, however, present 

evidence to show that the retailer (1) had 

adequate policies and procedures in place, 

and (2) the retailer’s employees followed 

those policies and procedures. 

Three years after Kelly, however, the 

Connecticut Supreme Court in Fisher v. Big 

Y Foods, 298 Conn. 414, 3 A. 3d 919 (Conn. 

2010), further explained the limitations of 

the rule when it stated that 

[t]he mode of operation rule, as adopted 

in Connecticut, does not apply generally 

to all accidents caused by transitory 

hazards in selfservice retail establishments, 

but rather, only to those accidents 

that result from particular hazards that 

occur regularly, or are inherently foreseeable, 

due to some specific method of 

operation employed on the premises. 

Id. at 423. (emphasis added). 

The court observed that if selfservice 

merchandising constituted the problematic 

“mode of operation,” then Kelly would render 

an entire store a “zone of risk” because 

merchandise can fall and break anywhere 

Counsel for a retailer 

needs to present evidence 

to support the position that 

the retailer did, in fact, take 

necessary precautions. 

in a store. Id. at 424. Such a construction 

would render the “zone of risk” analysis 

superfluous. 

Courts Do Apply the Rule to Retailing 

Other than Self-Service Retailing 

Attorneys for retailers as defendants 

defending claims brought under the broad 

premise liability theories described above 

have tried to argue that the “mode of operation” 

rule applies solely to selfservice grocery 

stores and not to fast-food restaurants, 

nightclubs, or other businesses such as 

banks. Attorneys for injured plaintiffs will 

certainly attempt to argue that the “mode 

of operation rule” has applicability to falls 

that occur in all types of retail, service, and 

recreational establishments such as doctor’s 

offices, theaters, bowling alleys, clothing 

stores, and coffee shops. 

While the courts have acknowledged that 

the “mode of operation” rule does not apply 

to all negligence cases or all premises liability 

cases, these same courts, under the 

right factual scenario, have extended the 

application of this rule to retail locations 

other than selfservice grocery stores. For 

example, the United States District Court of 

Rhode Island, interpreting the law of Massachusetts, 

found that nothing in Massachusetts’ 

seminal case, Sheehan v. Roche Bros. 

Supermarkets, Inc., 863 N.E.2d 1276 (Mass. 

2007), limited the application of the rule to 



selfservice grocery stores and found that the 

rationale of Sheehan “logically extends to a 

selfservice, fast food restaurant.” Marcione 

v. Jan Co., Inc d/b/a Burger King, C.A., 2010 

WL 2697595 (D. R.I. 2010). So all modernday 

outlets that invite customers into their 

premises need to look out for potentially 

hazardous conditions that arise from the 

way in which they conduct their business. 

Focus a summary 

judgment argument on 

the plaintiff’s failure to 

establish that a specific 

method of operation gave 

rise to a foreseeable risk. 

Practical Considerations 

Given the court trend adopting mode of 

operation approaches, retailers and the 

attorneys who represent them will want to 

adopt particular operational procedures. 

These procedures will help a defense attorney 

maintain a strong defense if a plaintiff 

sues a retailer under a mode of operation 

theory. A defense attorney can also buttress 

a defense by adopting specific litigation 

strategies. 


Retail Operation Procedures 

In contrast to defending a standard premises 

liability action, defending a case 

against a retail establishment sued under 

a “mode of operation” theory, regardless of 

its incarnation, will likely fail if the defense 

attorney cannot produce evidence to rebut 

the plaintiff’s inference of negligence. A 

retail establishment cannot completely prevent 

customers from slipping and falling. 

However, if a retailer has proper procedures 

in place, an attorney may maintain a strong 

defense for that retailer. 

We recommend that retail establishments 

create and maintain thorough operations 

procedures, including maintenance 

logs and reporting requirements. Ensuring 

compliance with these procedures is 

paramount as failing to follow the procedures 

will further the theory that the 

mode of operation required constant oversight 

to prevent hazardous conditions from 

arising. Despite the double- edged sword 

that increased procedural documentation 

creates, the modified premises liability 

approach for selfservice retailers should 

alert attentive counsel to its necessity. 

These procedures and documentation 

standards should particularly identify 

areas that courts would characterize 

as falling within a “zone of risk,” such as 

salad bars, condiment areas, soda fountains, 

or any other area where a consumer 

has “hands-on” access to a product. Thoroughly 

documenting procedures and making 

sure that employees maintain them will 

go far to rebut a “mode of operation” claim 

and force a plaintiff’s attorney to establish 

liability through more traditional means. 

Litigation 

After conducting depositions, defense 

counsel for retailers often file motions for 

summary judgments in situations involving 

falls, arguing that the plaintiffs didn’t 

present evidence of actual or constructive 

notice. If a jurisdiction might apply the 

“mode of operation” rule or another similar 

standard, counsel also need to argue in 

a motion requesting a summary judgment 

that the rule doesn’t apply to the facts at 

hand. In some situations, a defense attorney 

can argue that the hazardous condition 

and the selfservice mode of operation 

aren’t related. See Carlyle v. Safeway Stores, 

Inc., 78 Wash. App. 272, 276–277, 896 P.2d 

750 (Wash. Ct. App. 1995). In Carlyle, the 

plaintiff slipped on a spot of shampoo while 

in the coffee section of the store. The shampoo 

was stocked several aisles away from 

where the plaintiff fell. The court held that 

since customers do not regularly handle 

shampoo in the area where the plaintiff fell, 

it was not reasonably foreseeable that a customer 

would slip on shampoo. Id. at 277. 

In other cases, a defense attorney may 

more appropriately focus a summary judgment 

argument on the plaintiff’s failure to 

establish that a specific method of operation 

gave rise to a foreseeable risk. In 

Fisher, the court noted that several court 

decisions “related the hazardous condition 

to the particular method of operation 

at issue, rather than attributing it solely to 

the general selfservice nature of the business 

establishment.” Fisher, 298 Conn. at 

431 (citing Jasko v. F.W. Woolworth Co., 177 

Colo. at 420, 494 P.2d at 839 (“defendant’s 

method of selling pizza” created dangerous 

condition)); Gump v. Wal-Mart Stores, 

Inc., 93 Hawai’i at 418, 5 P.3d at 407 (specifically 

limiting application of the rule to 

circumstances of the case, when “a commercial 

establishment, because of its mode 

of operation, has knowingly allowed the 

consumption of ready- to- eat food within 

its general shopping area”); McDonald v. 

Safeway Stores, Inc., 109 Idaho at 307, 707 

P.2d 416 (upholding the trial court’s denial 

of a summary judgment to the defendant 

on reasoning that “[t]he mode of operation 

of the ice cream demo on a very busy 

Good Friday, combined with the abnormally 

large crowds and other demos, in 

and of itself could constitute an act of 

negligence”); Jackson v. K-Mart Corp., 251 

Kan. at 702, 710–11, 840 P.2d 463 (involving 

these questions for the jury on remand: 

whether dangerous condition due to the 

defendant’s allowing customers to carry 

food and drink onto the shopping floor was 

reasonably foreseeable and, if so, whether 

the defendant had failed to exercise reasonable 

care); Dumont v. Shaw’s Supermarkets, 

Inc., 664 A.2d at 848 **931 (holding 

the “mode of operation” rule potentially 

applicable because the defendant knew 

“that items with similar characteristics to 

the chocolate- covered peanuts created an 

increased hazard to customers”); Sprague 

v. Lucky Stores, Inc., 109 Nev. 247, 251, 849 

P.2d 320 (Nev. 1983) (noting evidence of 

“virtually continual debris on the produce 

department floor”); Nisivoccia v. Glass 

Gardens, Inc., 175 N.J. at 565, 818 A.2d 314 

(finding the method of packaging grapes 

made it “foreseeable… that loose grapes 

would fall to the ground… creating a dangerous 

condition”); Wollerman v. Grand 

Union Stores, Inc., 47 N.J. at 429, 221 A.2d 

513 (“When greens are sold from open bins 

on a selfservice basis, there is the likelihood 

that some will fall or be dropped to 

the floor. If the operator chooses to sell in 

this way, he must do what is reasonably 

necessary to protect the customer from 

the risk of injury that mode of operation is 

likely to generate”); Mahoney v. J.C. Penney 

Co., 71 N.M. at 260, 377 P.2d 663 (observing 

that the defendant “knew the propen- 

Premises, continued on page 66

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© 2012 

 

 

www.SEAlimited.com

Government Enforcement and Corporate Compliance 


By Jonathan N. Rosen 

Recent actions by the 

government appear 

to undermine the 

efficacy of corporate 

compliance efforts. 

Monitoring 

Government’s 

Changing 

Attitudes 

■ Jonathan N. Rosen is a partner in the Washington, D.C., office of Shook, Hardy & Bacon, L.L.P., and a member of the Government 

Enforcement and Compliance Group. His practice focuses on representing corporate and individual clients in complex white 

collar matters. 


Today’s enforcement climate clearly underscores the need 

for an effective compliance program. The lack of an effective 

compliance program, which could have averted the 

wrongdoing, may be used by government regulators to

suggest a corporate intent to both enable 

and benefit from an employee’s or agent’s 

errant conduct. 

In addition, compliance has now become 

a part of the statutory and regulatory landscape. 

Section 404 of Sarbanes- Oxley Act 

(SOX) requires that certain management 

of issuers file an internal control report 

regarding the effectiveness of the company’s 

internal controls structure with the 

SEC. Section 404 also requires the company’s 

auditor to attest to and report on the 

company’s assessment of its internal controls 

over financial reporting. 

An “effective” compliance program is 

also necessary to mitigate the sentence 

arising from some errant corporate misconduct. 

The United States Sentencing 

Guidelines identify several factors that 

constitute an “effective” compliance program. 

See U.S.S.G. §8B2.1(b). In addition, 

amendments to the guidelines allow a company 

to obtain credit for an effective compliance 

program, even where a high-level 

executive was involved in the misconduct, 

so long as the head of compliance reports 

directly to the board, among other factors. 

Notwithstanding this emphasis on compliance 

programs, more recent actions by 

the government appear to undermine the 

efficacy of corporate compliance efforts. 

For example, the SEC implemented rules 

designed to incentivize employees to take 

advantage of the Dodd-Frank Act’s whistleblowing 

protections and benefits. These 

rules now offer huge awards for reporting alleged 

violations of the securities laws to the 

SEC, without a requirement of first resorting 

to existing corporate compliance programs. 

See Rule 21F-6 (17 C.F.R. §240.21F-6). Some 

have argued that this regime may turn 

company employees into bounty hunters, 

thereby undermining the role and effectiveness 

of corporate compliance procedures 

that companies put in place after SOX. 

Similarly, the SEC requires that any 

qualifying disclosure be “voluntary,” which 

excludes information provided to the SEC 

pursuant to a contractual duty to the SEC. 

See Rule 21F-4 (17 C.F.R. §240.21F-4). The 

SEC’s commentary underscores that the 

definition of “voluntary” excludes a statement 

made to the SEC pursuant to a cooperation 

or similar agreement with the 

Department of Justice obligating the individual 

to provide information to government 

agencies in general. Although the SEC 

identifies participation in internal compliance 

systems as a factor that can increase 

the bounty (Rule 21F-6 (17 C.F.R. §240.21F- 

6), a whistleblower may rationally elect not 

to risk such preemption by disclosing the 

alleged violation to the company. 

One way to vindicate, and not undermine, 

compliance programs is to make 

effective compliance programs an affirmative 

defense to criminal wrongdoing. This 

is exactly what occurs under the UK bribery 

bill, which creates an affirmative defense 

for “adequate procedures” to prevent 

bribes. As a result, a corporation can escape 

criminal liability if it can demonstrate that 

any failings were not systematic. In the past, 

however, the United States Department of 

Justice has specifically objected to an analogous 

procedure. The government’s opposition 

is entirely consistent with its good faith 

interest in achieving greater and greater leverage 

over corporations and their individual 

officers and directors. 

The heart of the matter is this: the 

government’s attitude about how best to 

achieve corporate compliance has changed. 

Today, there is a real suspicion on the part 

of federal regulators that entity- driven penalties 

and agreements are insufficient to 

deter corporate wrongdoing. Regulators 

now feel compelled to go after individuals 

to effect greater corporate compliance. As 

a result, the government will continue to 

use various tools at its disposal, including 

not only bounty programs but also corporate 

monitors and elastic statutes to obtain 

maximum leverage over those individuals 

whom the government targets in its 

investigations. 

The following articles submitted by the 

Government Enforcement and Corporate 

Compliance Committee (GECCC) underscore 

this theme. Aaron Danzig’s article, 

“In Search of a More Flexible Approach: 

Uneven Practices in False Claims Act Settlements,” 

analyzes how the Department 

of Health and Human Services Office of 

Inspector General uses corporate integrity 

agreements to monitor corporate conduct, 

even where less draconian remedies would 

be equally consistent with OIG guidance. In 

addition, GECC Steering Committee Member 

Julianne Balliro’s article, “The Detention 

Provision of the National Defense 

Authorization Act for Fiscal year 2012: Is It 

Worth the Cost to Liberty,” examines the 

Act’s elasticity to demonstrate how American 

citizens may become subject to indefinite 

detention based on little more than 

suspicion of terrorism or suspicion of failing 

to report another person suspected of 

terrorism. 

Thank you to our authors and to GECCC 

Publications Chair Patrick Sullivan for 

their efforts in helping our committee 

sponsor this month’s For The Defense. 



In Search of a More 

Flexible Approach 

Uneven Practices 

in False Claims 

Act Settlements 

By Aaron M. Danzig 

How the OIG insists on 

onerous settlement terms 

and fails to consider 

its own guidance. 

In many cases, an accusation of misconduct under the 

False Claims Act (FCA) is a debilitating blow to a health 

care provider whether or not the provider actually violated 

the law. At best, an accusation will harm a provider’s rep- 

utation and generate significant legal fees. 

At worst, the government will exclude a 

provider from participating in federally 

funded health care programs, and depending 

on how much the provider relies on 

those programs, the provider potentially 

can lose its entire livelihood. For these reasons, 

many companies targeted by the U.S. 

Department of Justice (DOJ) and the U.S. 

Department of Health and Human Services 

Office of Inspector General (OIG) feel pressured 

to consent to settlement agreements 

rather than risk trials. 

Such settlement almost always includes 

a corporate integrity agreement (CIA) 

requiring a company to undertake onerous, 

expensive monitoring. A CIA generally 

requires a company to hire an independent 

monitor to ensure compliance over a 

period of time and to foot the bill. In rare 

instances, the OIG will agree to a certification 

of compliance agreement (CCA) in lieu 

of a CIA, which is generally less comprehensive, 

intrusive, and expensive. This article 

explores the OIG’s tendency to impose 

CIAs routinely on companies in FCA settlements 

and argues that the OIG should more 

flexibly consider other options including 

CCAs and settlements that don’t include 

specific compliance agreements at all. 

Most False Claims 

Act Cases Settle 

The FCA prohibits corporations from submitting 

false claims for reimbursement of 

services to the Medicare or the Medicaid 

programs. 31 U.S.C. §3729 (2010). The FCA 

includes a citizen lawsuit provision that 

allows whistleblowers to bring false claims 

allegations to the government’s attention; 

the government may choose to intervene 

or let the whistleblower continue with his 

or her lawsuit individually. 31 U.S.C. §3730 

(2010). The government also may choose 

to dismiss a lawsuit altogether. 31 U.S.C. 

§3730(c)(2)(A). However, the government 

has little incentive to do that, so it rarely 

happens. Sharon Finegan, The False Claims 

Act and Corporate Criminal Liability: Qui 

Tam Actions, Corporate Integrity Agree- 

■ Aaron M. Danzig is a partner in Arnall Golden Gregory LLP’s Litigation Group. From the firm’s Atlanta office, he chairs the 

Government Investigations and Special Matters Practice Team. His practice focuses on white collar criminal defense, internal 

corporate investigations, corporate compliance and governance matters, and business and intellectual property litigation. He is a 

member of DRI and its Government Enforcement and Corporate Compliance Committee. 


ments and the Overlap of Criminal and Civil 

Law, 111 Penn. St. L. Rev. 625, 645 (2007). 

The OIG will often work with the civil 

division of a U.S. attorney’s office in 

response to a whistleblower lawsuit alleging 

Medicare or Medicaid fraud, launching 

an investigation and initiating civil 

settlement negotiations without referring 

the case to the DOJ for criminal prosecution. 

See Finegan, supra, at 646, 656–57; 

A Perspective on Fraud, Waste, and Abuse 

Within the Medicare and Medicaid Programs: 

Hearing Before the Subcomm. on 

Health Care, District of Columbia, Census 

and the National Archives, H. Comm. 

on Oversight and Government Reform, 

112th Cong. 6 (2011) (testimony of Gerald 

T. Roy, Deputy Inspector General for Investigations, 

Office of Inspector General, U.S. 

Dep’t of Health and Human Serv.). The OIG 

and the U.S. attorney’s office can then negotiate 

settlement terms, including payment 

of often significant amounts of money and 

a CIA that requires a company to have an 

independent monitor for long-term followup, 

freeing up court and agency dockets 

while sending a message to both the public 

and the corporation under scrutiny that the 

government will not tolerate further noncompliance. 

See Vincent L. DiCianni, New 

Principles Can Help Advance Independent 

Corporate Monitoring 3, Am. Health Lawyers 

Ass’n Health Lawyers Weekly, July 18, 

2008. From the OIG’s point of view, these 

settlements are economic and efficient 

vehicles for generating goodwill among 

the public, which has become rather disenchanted 

with corporate behavior in recent 

years. Some commentators believe that the 

government’s increased use of independent 

monitors in recent years is directly correlated 

to the desire to alleviate public concerns 

about corporate behavior. See, e.g., 

DiCianni, supra, at 3. 

Meanwhile, a company may acquiesce 

to the government’s settlement demand— 

with limited pushback—because it has little 

bargaining power once accused of an 

FCA violation. Amendments to the FCA 

over the years have made it much easier for 

claimants to prevail and thus much riskier 

from a provider’s standpoint. In 1986, when 

Congress added the whistleblower provision 

to the FCA, it lowered the FCA’s intent 

requirement so that the government or a 

whistleblower no longer needs to prove that 

a corporation had specific intent to falsify 

claims; liability exists if the corporation 

had “reckless or deliberate ignorance of 

the truth or falsity” of the claim or claims 

at issue. 31 U.S.C. §3729 (b)(1); Finegan, 

supra, at 644.Further, Congress lowered the 

evidentiary burden for proving a violation 

from a “clear and convincing” standard to 

the less stringent “preponderance of the 

evidence” standard. Finegan, supra, at 644. 

Additional amendments in 2009 expanded 

potential liability even further by eliminating 

language suggesting that a false claim 

must be submitted directly to a federal 

employee and by expanding the offense 

of “reverse” false claims to cover not only 

submitting false claims but also knowingly 

retaining overpayments. Cong. Research 

Serv., Qui Tam: The False Claims Act and 

Related Federal Statutes 9 (2009). 

A provider faced with allegations that it 

violated the FCA often will choose to settle 

as a form of damage control. Even if a 

provider believes that the case against it is 

weak, the risks associated with a trial are 

so great that it may feel coerced into settling. 

A trial loss can yield severe sanctions, 

including a civil penalty of up to 

$11,500 per claim plus treble damages.31 

U.S.C. §3729(a)(1).In addition, the OIG has 

authority to exclude providers found liable 

under the FCA from participating in 

federal healthcare programs. 42 U.S.C. 

§1320a-7. Losing reimbursements from 

those programs may jeopardize a provider’s 

very existence. Finegan, supra, at 651. 

Furthermore, a trial win may not truly 

be a win. Though that scenario doesn’t 

involve exclusion from Medicare and Medicaid, 

the provider will have had to pay 

for its defense and also may have suffered 

enough reputational harm to outweigh the 

settlement cost. Finegan, supra, at 646.In 

the end, a company’s reputation could suffer 

so much that the harmful consequences 

could threaten the company’s livelihood 

as much as exclusion would have. So ultimately, 

this skewed balance of power and 

the high risk for a health care provider 

means that more cases settle, relieving the 

government of its obligation to meet its 

burden of proof. 

Specific Settlement Terms— 

Choosing a CIA Over a CCA 

CIAs are practically automatic in the FCA 

A company may acquiesce 

to the government’s 

settlement demand— 

with limited pushback— 

because it has little 

bargaining power once 

accused of an FCA violation. 

settlements that the OIG orchestrates. 

Open Letter to Health Care Providers from 

Janet Rehnquist, Inspector General, Office 

of Inspector General, U.S. Dep’t of Health 

and Human Serv. (Nov. 20, 2001); see also 

Finegan, supra, at 658 (“CIAs are the rule, 

rather than the exception, in health care 

settlement agreements.”).In each CIA the 

OIG will stipulate certain compliance measures 

that it wants a provider to take and 

promises that if a provider meets those 

terms it will not seek to exclude the provider 

from participating in Medicare or 

Medicaid. Corporate Integrity Agreement 

FAQ, Office of the Inspector General, U.S. 

Dep’t of Health and Human Serv. website. 

These agreements typically last five years 

and tend to incorporate more stringent 

standards than the law requires. Roy, supra, 

at 6; Finegan, supra, at 655.Each agreement 

is tailored “to address the deficiencies of 

the particular organization.” Roy, supra, 

at 6. However, certain core directives generally 

show up in most, if not all, CIAs: 

(1) hire a compliance officer, appoint a compliance 

committee, or both; (2) develop 

written standards and policies; (3) implement 

a comprehensive employee training 

program; (4) retain an independent review 

organization to conduct periodic reviews; 

(5) establish a confidential disclosure program; 

(6) restrict employment of ineligible 

persons; (7) report overpayments, 

reportable events ongoing investigations, 

and legal proceedings; and (8) provide an 

implementation report and annual reports 

to the OIG on the status of all compliance 

activities. Corporate Integrity Agreement 



This skewed balance 

of power and the high 

risk for a health care 

provider means that more 

cases settle, relieving the 

government of its obligation 

to meet its burden of proof. 

FAQ, Office of the Inspector General, U.S. 

Dep’t of Health and Human Serv. website. 

On rare occasions, the OIG will settle 

using a CCA rather than a CIA. The OIG 

considers a CCA appropriate when a company 

already has a comprehensive compliance 

program in place, and the OIG 

simply wants to require the company to 

maintain it. Id. Certain compliance obligations 

in a CCA mirror those found in a 

CIA, including (1) reporting overpayments, 

reportable events, and ongoing investigation 

and legal proceedings to the OIG; and 

(2) providing annual reports to the OIG 

regarding the entity’s compliance activities 

during the term of the CCA. Id. However, 

CCAs generally last for only three 

years and do not require audits from independent 

review organizations. Open Letter 

to Health Care Providers from Daniel 

R. Levinson, Inspector General, Office of 

Inspector General, U.S. Dep’t of Health and 

Human Serv. (Apr. 24, 2006). 

In an Open Letter to Health Care Providers 

dated April 24, 2006, Inspector General 

Daniel R. Levinson acknowledged that 

many providers had “independently developed 

robust and effective compliance programs, 

which include internal auditing 

mechanisms.” Id. at 2. As a result, he wrote, 

“In appropriate cases, we have agreed to 

reduce the obligation on providers settling 

health care fraud matters by entering into 

Certification of Compliance Agreements 

(CCAs), rather than more extensive CIAs.” 

Id. The new approach recognized concerns 

about the financial impact of CIAs 

on providers that had initially been raised 


in a 2001 Open Letter from previous OIG 

Inspector General Janet Rehnquist that 

did not mention CCAs explicitly but promised 

that the OIG “would be exploring ways 

to increase reliance on providers’ internal 

audit capabilities.” Rehnquist, supra. 

Levinson pledged to consider applying 

a CCA over a CIA based on several 

factors listed in the 2001 letter, including 

(1) whether a provider self- disclosed the alleged 

misconduct; (2) the monetary damage 

suffered by the federal healthcare programs; 

(3) whether the case involved successor liability; 

(4) whether the provider still participated 

in the federal health care programs 

or still conducted business that gave rise 

to the fraudulent conduct; (5) whether the 

provider could repeat the alleged conduct; 

(6) the age of the conduct; (7) whether the 

provider had an effective compliance program 

and would agree to limited compliance 

or integrity measures and would 

annually certify such compliance to the 

OIG; and (8) other circumstances, as appropriate. 

The OIG has deemed self- disclosure 

of violating conduct an “important factor” 

in the analysis “because detection and 

prompt disclosure of potential fraud are evidence 

of an effective compliance program.” 

Levinson, supra. 

The OIG cited self- auditing and open 

disclosure as the primary reason that it 

allowed a Philadelphia hospital system to 

operate under a CCA rather than a CIA 

in a 2008 settlement agreement. The U.S. 

attorney handling the case “complimented 

the hospital for disclosing the billing discrepancy 

found during its own audit” and 

confirmed that the OIG could evaluate continuing 

compliance “without the need for 

a Corporate Integrity Agreement overseen 

by the Inspector General.” Keith Phucas, 

Mercy Health System Owes Medicare $7.9M, 

The Times Herald, Aug. 9, 2010. 

However, this case appears to be an aberration, 

or at least an example of the OIG’s 

insistence on inflating the importance of 

self- reporting at the expense of the other 

factors that Levinson had outlined in 2001. 

An analysis of the settlement agreements 

posted on the OIG website indicates that 

the agency may not be making a concerted 

effort to craft settlement agreements on 

case-by-case bases: only about 10 percent 

of the settlements in recent years involved 

CCAs. The majority involved standard 

CIAs that generally involved some sort of 

monitoring requirement. See Corporate 

Integrity Agreement Documents, Office of 

Inspector General, U.S. Dep’t of Health and 

Human Serv. 

Impact on Providers 

The CIA requirements are burdensome to 

the average health care provider in ways 

that CCA requirements are not, so the OIG’s 

reflexive tendency to implement CIAs has 

serious ramifications for the industry. CIAs 

typically involve an outsider coming in to 

monitor day-to-day operations within a 

company. The decisions that this independent 

monitor makes may not be in the best 

interest of the corporation and may not 

align with the interests of management, employees, 

or shareholders. Finegan, supra, at 

662.Yet the company might feel that its position 

doesn’t allow it to negotiate the scope 

of the monitor’s decision- making authority 

or responsibilities within the company 

because the monitor can report it as noncompliant. 

Corporations surveyed by the 

Government Accountability Office (GAO) 

for a 2009 report raised this concern. The 

survey focused on FCA prosecution in the 

criminal context but discussed some of the 

general characteristics of CIAs in general. 

See U.S. Gov’t Accountability Office, Corporate 

Crime: Preliminary Observations on 

DOJ’s Use and Oversight of Deferred Prosecution 

and Non- Prosecution Agreements 

29 (June 25, 2009). 

A CIA also affects a company’s costcontrol 

capabilities. Under a CIA a corporation 

must pay for however much 

monitoring the OIG will require. The OIG 

can dictate the breadth, scope, and frequency 

of audits, as well the monitoring 

period duration. Moreover, since a monitor 

generally has the leeway to prescribe 

its individual role as it designs and implements 

a compliance program within a 

company, a program can become exceptionally 

involved. A monitor may deem it 

necessary to attend extra meetings or bring 

more monitoring staff on board, for example, 

which means extra hours of work and, 

therefore, a larger paycheck for the monitor. 

One company that the GAO surveyed 

said that its monitor “had a large number 

of staff assisting him on the engagement, 

and he and his staff attended more 

meetings than the company felt was nec-

essary, some of which were unrelated to 

the monitor responsibilities delineated in 

the agreement.” As a result, the costs of the 

monitorship were higher than the company 

believed that they should have been; but 

when the company tried to negotiate the 

number of staff and the amount of work at 

issue, “the monitor was generally unwilling 

to make changes.” U.S. Gov’t Accountability 

Office, Corporate Crime, supra, at 

28 (June 2009). 

Monitors are paid hourly fees, which 

can range anywhere from $125 to $895. See 

U.S. Gov’t Accountability Office, Corporate 

Crime: Prosecutors Adhered to Guidance in 

Selecting Monitors for Deferred Prosecution 

Agreements, but DOJ Could Better Communicate 

its Role in Resolving Conflicts (Nov. 

19, 2009). Health care consultants say that it 

is difficult to estimate how much a monitorship 

would cost because some CIAs require 

more extensive reviews or more frequent 

reports than others, which, in turn, affects 

the number of hours required to complete 

them. The GAO surveyed a number of companies 

involved in CIA settlements in the 

criminal context and found that the costs 

for those tended to range from $8,000 to 

$2.1 million per month. Id. at 15. Total reported 

costs for monitorships ranged from 

$200,000 to $38.7 million. Id. at 15, n.25. 

Onewell- publicized 18-month monitoring 

contract between Indiana- based medical 

supply company Zimmer Holdings and 

former U.S. Attorney General John Ashcroft 

in 2008 was reportedly valued at between 

$28 and $52 million. Philip Shenon, 

Ashcroft Deal Brings Scrutiny in Justice Department, 

N.Y. Times, Jan. 10, 2008, at A1. 

CIAs in civil settlements probably involve 

a similar cost structure. 

Conclusion 

The OIG has promised publicly to consider 

a number of criteria when negotiating settlement 

agreements in FCA cases. However, 

it seems to overemphasize self- reporting 

and ignore other factors such as whether 

a scrutinized company has already developed 

a compliance program and implemented 

it. Especially in the wake of the 

Patient Protection and Affordable Care 

Act, which requires Medicare and Medicaid 

providers to develop internal compliance 

plans, the OIG should become more 

amenable to working with existing compliance 

frameworks under CCAs as opposed 

to requiring a bottom- up approach that 

automatically resorts to CIAs and independent 

monitors, or perhaps to settling without 

requiring compliance agreements at all. 

A more flexible approach by the OIG would 

prove more faithful to the criteria that it 

has announced and would ultimately be 

more appropriate, just, and effective in the 

health care marketplace. 

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The Detention 

Provisions of the NDAA 

for Fiscal Year 2012 

By Juliane Balliro 

Is It Worth 

the Cost 

of Liberty 

Sections 1031, 1032, and 

1033 reflect an ongoing 

struggle to balance 

protecting our country 

from terrorists with 

preserving the rights it 

has always stood for. 

Following the bombing of Pearl Harbor, President Roosevelt 

signed an executive order directing that all Americans 

of Japanese Ancestry be relocated to camps in the 

United States. Pursuant to that order, the newly formed 

War Relocation Administration forcibly 

relocated and indefinitely detained over 

120,000 persons of Japanese descent, including 

United States citizens, without 

due process. To many American citizens, 

it remains an indelible scar on our otherwise 

inviolate principles of American liberty 

and justice. 

In 1950, overriding President Harry Truman’s 

veto, Congress enacted the Internal 

Security Act (ISA) Title II of the ISA entitled, 

the Emergency Detention Act (EDA), 

authorized the imprisonment without 

charge or trial of American citizens and 

non- citizens considered likely to commit espionage 

or sabotage. The EDA was never apparently 

used, but amid fears that surfaced 

during the 1960s that it could be used to detain 

civil rights activists, President Richard 

Nixon repealed the EDA by signing the 

Non- Detention Act of 1971 (Act). The Act 

provides that, “No citizen shall be imprisoned 

or otherwise detained by the United 

States except pursuant to an Act of Congress.” 

The Act reflected a desire on the part 

of Congress and the administration to ensure 

that the denial of liberty experienced 

by Japanese Americans during World War II 

could not be repeated. The provisions of the 

Non- Detention Act of 1971 have remained 

undisturbed for 40 years. 

In the context of litigation that followed 

in the aftermath of the 911 attacks, the 

Bush Administration took the position that 

the Act did not apply to military detention 

of enemy combatants during a time 

of war. However, that view of the Act was 

dismissed in a paper written by the Congressional 

Research Service addressed to 

the U.S. Senate in April of 2005. After conducting 

an exhaustive analysis of the legislative 

history and debates surrounding the 

Non- Detention Act of 1971, the authors of 

the report concluded as follows: 

Legislative debate, committee reports, 

and the political context of 1971 indicate 

that when Congress enacted [the 

Act] it intended the statutory language 

■ Juliane Balliro is a partner in Nelson Mullins Riley & Scarborough’s Boston office who has been trying cases in the areas of 

white collar criminal defense and employment law for nearly 30 years. Ms. Balliro represents companies, executives, and individuals 

in complex business, employment, and criminal cases. Ms. Balliro has tried in excess of 100 cases in various state and federal 

courts and has authored and argued dozens of appeals. She is a member of the steering committee of DRI’s Government 

Enforcement and Corporate Compliance Committee. 


to restrict all detentions by the executive 

branch, nor merely those by the 

Attorney General. Lawmakers, both 

supporters and opponents of [the Act], 

recognized that it would restrict the 

President and military authorities. 

See Detention of U.S. Citizens, Louis Fisher, 

CRS Report For Congress, April 28, 2005. 

Now, 40 years after the passage of the 

Act, citizens and non- citizens alike face, 

once again, the prospect of imprisonment 

without due process or trial. The 112th 

Congress has passed, and President Obama 

has signed, the National Defense Authorization 

Act for Fiscal Year 2012 (NDAA). 

The detention provisions of three sections 

of the NDAA, Sections 1031, 1032 and 1033, 

have ignited a firestorm of criticism from 

the left, the right, and the military. 

Section 1031 

Section 1031, entitled “Authority to Detain 

Unprivileged Enemy Belligerents Captured 

Pursuant to the Authorization for 

Use of Military Force,” provides in general 

that the “Armed Forces” are “authorized” 

to “detain covered persons captured in 

the course of hostilities authorized by the 

Authorization for Use of Military Force” 

as “unprivileged belligerents pending disposition 

under the law of war.” Although 

Section 1031 purports to address the detention 

of so-called unprivileged enemy belligerents, 

the NDAA does not define the 

term. For that definition one must look to 

in the Military Commission Act of 2009 

(2009 MCA). There the term is defined as 

an individual who (1) has engaged in hostilities 

against the United States or its coalition 

partners; or, (2) has purposefully and 

materially supported hostilities against the 

United States or its coalition partners. 

”Covered Person” 

A “covered person” under Section 1031 includes, 

(1) persons who planned, authorized, 

committed, or aided the terrorist 

attacks that occurred on September 11, 

2001, or harbored those responsible for 

those attacks, or (2) a person who was a 

part of or substantially supported Al-Qaeda, 

the Taliban, or associated forces that 

are engaged in hostilities against the United 

States or its coalition partners, including 

any person who has committed a belligerent 

act or has directly supported such hostilities 

in aid of such enemy forces. Subsection 

1 is reminiscent of the authority Congress 

extended to the President under the Authorization 

for Use of Military Force Against 

Terrorists Act (AUMFA) passed shortly after 

the September 11 attacks. The AUMFA 

authorized the President to use all necessary 

and appropriate force against those 

nations, organizations, or persons he determined 

planned, authorized, committed, 

or aided the terrorist attacks that occurred 

on September 11, 2001, or harbored such 

organizations or persons. However, by including 

in the definition of a “covered person” 

under the NDAA those responsible for 

the 911 attacks, persons who may have “harbored” 

those responsible for the 911 attacks 

and persons who were a part of Al-Qaeda, 

without regard to time or scope, Congress 

intends to extend unprecedented authority 

to detain indefinitely to the U.S. Military. 

Unlike under the 2009 MCA or the AUMFA, 

under Section 1031 one could fall under suspicion 

of harboring a person responsible for 

the September 11 attacks without proof that 

he or she was even aware of that person’s 

connection to the event. A parent, sibling, 

grandparent, or spouse could all be subject 

to indefinite detention if, for example, they 

allowed a relative suspected of having been 

part of Al-Qaeda to reside in their home after 

911, even if the other family members 

were completely unaware of the suspect’s 

activities and the suspect had abandoned 

his affiliation with Al-Qaeda years before 

the 911 attacks. Similarly, a person could 

be detained indefinitely under Section 1031 

based upon a fleeting affiliation with Al- 

Qaeda that was terminated years, even decades, 

before any attack against the United 

States or its coalition partners. 

Disposition Under Law of War 

Disposition under law of war may include, 

(1) long term detention under the law of 

war without trial until the end of hostilities 

against the nations, organizations, and persons 

subject to the Authorization for Use of 

Military Force, (2) military trial, (3) transfer 

for trial to an alternative court or competent 

tribunal having lawful jurisdiction 

or (4) transfer to the custody or control of a 

foreign country or foreign entity. 

One obvious difficulty with this section 

of the Act is that the only trigger for the 

release of detainees is the “end of hostilities…” 

against the United States and any 

of its coalition partners. Since it is unlikely 

that “hostilities” in the war on terror will 

ever come to an end, detainees could face 

the prospect of life in prison, perhaps in a 

foreign land, never having been afforded 

anything other than administrative review 

(where habeas corpus does not apply) of 

their classification as an unprivileged 

Even an American 

citizen may be subject 

to the nefarious practice 

of “extraordinary 

rendition,” detention, and 

military commissions. 

enemy belligerent. Even where habeas corpus 

proceedings are available to detainees, 

the right to an adversarial proceeding can 

be substantially delayed, the rules favor 

admission of evidence to support detention 

and the detainee has limited access to 

evidence upon which detention is based. 

Although few would quarrel with the 

use of legislative tools designed to bring 

the perpetrators of the 911 attack to justice, 

Section 1031 extends well beyond that 

noble purpose. It is clear from a reading of 

Section 1031 that, if passed in its current 

form, it would provide legislative authority 

for the indefinite detention of any person 

upon minimal proof of involvement 

in terrorism, without charge or trial, until 

the end of the war on terror. There are 

no geographical limits as to the place of 

detention and no express limitation on the 

use of coercive methods to extract confessions. 

United States citizens are protected 

against such extreme measures as “extraordinary 

rendition” only if the conduct took 

place within the United States” except to 

the extent permitted by the Constitution 

of the United States.” Thus, even an American 

citizen may be subject to the nefarious 

practice of “extraordinary rendition,” 

detention, and military commissions. The 

result—little more than suspicion of terror- 



ism or suspicion of failing to report another 

person suspected of terrorism—could subject 

American citizens to extraordinary 

rendition, extreme isolation, and virtually 

unlimited detention without anything 

more than a hearing at which the Government 

may be required to show only by a 

mere preponderance of the evidence based 

on hearsay evidence to which the suspect 

There is no correlation 

between lighter sentences 

or failed prosecutions 

and the preservation 

of civil rights for those 

charged with terrorism by 

trial in a civilian court. 

has limited access that the detention is 

lawful. 

Section 1032 

Section 1032 entitled, “Required Military 

Custody For members of Al-Qaeda and 

Affiliated Entities,” confronts the highly 

charged and now politicized issue whether 

suspected terrorists should be detained 

and/or tried in a military or civilian court. 

Absent a “Waiver for National Security,” 

Section 1032 requires that the Armed 

Forces hold, “in military custody as an 

unprivileged enemy belligerent pending 

disposition under the law of war,” any person 

“who is determined to be “a member or 

part of al-Qaeda” or an affiliate entity” and 

who is “a participant in the course of planning 

or carrying out an attack or attempted 

attack against the United States or its coalition 

partners” or who falls within the definition 

of a “covered person” under Section 

1031 (b). See, Section 1032(a)(2). Disposition 

under the law of war under Section 

1032 has the meaning given in Section 

1031 (c), except that no transfer to a foreign 

entity shall take place under Section 

1032 unless such transfer is consistent 

with Section 1033. See, Section 1032 (a)(3). 


The waiver provisions of Section 1032 are 

onerous and require that the Secretary of 

Defense, in consultation with the Secretary 

of State and the Director of National Intelligence, 

submit to Congress a certification 

in writing that the waiver is in the national 

security interests of the United States. See, 

Section 1032 (a)(4). Under this section, the 

requirement to detain a person in military 

custody does not extend to US citizens. See, 

1032(b). 

Opponents of Section 1032 argue that 

the mandatory military detention of suspected 

terrorists deprives the U.S. government 

of valuable and proven law 

enforcement tools to combat terrorism. 

FBI and the CIA investigations and interrogations 

have produced a treasure trove of 

detailed information about terrorist activities, 

including planned attacks on U.S. 

soil. Prosecutions under the civilian criminal 

justice system boast a 90 percent conviction 

rate and have yielded hundreds 

of convictions and lengthy prison sentences, 

while military commissions have 

only yielded a total of three convictions, including 

one guilty plea. Opponents of the 

law argue that the criminal justice system 

offers a wide variety of federal laws that 

criminalize terrorist behavior and provide 

serious penalties, including the death penalty, 

for most forms of terrorism. Retaining 

the option to use those tools and to treating 

terrorism suspects as “common criminals” 

allows both the civilian and military 

authorities to deprive them of the elevated 

status often associated with the terrorist 

moniker. Federal courthouses are well 

equipped to handle high profile and high 

security defendants. Indeed, there has not 

been a single instance in which a criminal 

prosecution of a terrorist suspect in a federal 

court has resulted in injury, escape, or 

other security breach. Incarceration of convicted 

terrorists has also occurred without 

incident and pre-trial detention has been 

unaffected by the controversy surrounding 

detention at Guantanamo Bay. 

Supporters of Section 1032 seek to 

deprive accused terrorists of certain constitutional 

rights, such as Miranda rights, 

the right to an attorney and the right to a 

speedy trial, that are available to terrorism 

suspects who are prosecuted through 

our civilian courts. Miranda warnings 

often become the focal point of the debate 

on this issue with opponents arguing that 

confessions obtained through the use of 

techniques such as waterboarding are fast 

and reliable and thus should be admissible 

against terrorism suspects—a prospect 

that would be impossible within the confines 

of the criminal justice system, even 

at a preliminary proceeding, to determine 

whether continued detention is appropriate. 

Supporters take the position that 

treating terrorists as common criminals 

elevates their status because it affords them 

access to constitutional protections that 

they do not deserve. Our criminal justice 

system, supporters argue, is not set up to 

deal with the sensitive intelligence issues 

that frequently occur in connection with 

terrorism prosecutions and the trials that 

result subject our communities to the risk 

and expense associated with the need for 

heightened security measures. Incarcerating 

terrorists in our federal prison system 

can also create a breeding ground for 

domestic terrorists. 

Fortunately, both the passage of time 

and the number of successful civilian prosecutions 

to date reveal that Miranda warnings 

have apparently not been the barrier 

to the extraction of information that proponents 

of Section 1032 have suggested. 

FBI investigators have proven to be effective 

in investigating, capturing, interrogating, 

and convicting accused terrorists 

while preserving the basic rights attendant 

to civilian proceedings. In addition, there 

is no correlation between lighter sentences 

or failed prosecutions and the preservation 

of civil rights for those charged with 

terrorism by trial in a civilian court. To 

the contrary, the high prosecution success 

rate and the long sentences that have been 

imposed support the contention that civilian 

prosecutions further the goal of severe 

punishment. 

Section 1033 

Section 1033 is designed to prevent the 

repatriation of Guantanamo detainees by 

depriving the defense department of the 

financial resources needed to do so. Under 

this section, no detainee shall be transferred 

to a foreign entity unless a written 

certification made by the Secretary of 

Defense, with the concurrence of the Secretary 

of State and in consultation with 

Detention, continued on page 70

Think Globally 

Developments in the Class Action Landscape 

Forum Shopping North of the Border 

By Lisa D. Parliament and Myriam Seers 

Until relatively recently, Canada may have been considered 

an “afterthought” jurisdiction for the class actions 

bar—a jurisdiction where plaintiffs filed class actions 

only as a “follow- on” to or “copycat” of related U.S. proceedings. 

Recently, however, the landscape has changed. 

The plaintiffs’ class action bar is aggressive, experienced 

and entrepreneurial. Canadian class action lawsuits 

have dramatically expanded in number and scope. Perhaps 

more significantly, plaintiffs’ attorneys increasingly 

file proposed class and proceed to certification in Canada 

ahead of parallel proceedings in other jurisdictions. 

Canada’s attractiveness as a class action destination 

appears to be growing. It is easy to identify possible reasons 

for the change. These include the broad availability 

of class proceedings, the relative ease of achieving certification, 

the courts’ receptiveness to novel or untested 

causes of action, the possibility of broad national and 

even international classes, potential third-party funding 

to counteract adverse costs awards suffered by plaintiffs, 

and legislatively expanded rights of civil action, all 

discussed below. 

Class proceedings are available in each Canadian 

jurisdiction with leave of the court. Any legal person 

can commence a proposed class proceeding as long as 

the person can satisfy the criteria for certification. The 

threshold for certification is relatively low, and the criteria 

for certification are largely the same in all Canadian 

jurisdictions except Quebec: (1) the claim must disclose 

a cause of action, (2) there must be an identifiable class 

of two or more persons, (3) the claims of class members 

must raise common issues, (4) a class action must be the 

preferable procedure for resolution of those common 

issues, and (5) the proposed representative plaintiff must 

be capable of adequately representing the class. Quebec 

does not have a formal “preferability” requirement. 

In key jurisdictions such as Ontario, a plaintiff does 

not have to show that common issues predominate. 

Instead, the test for certification requires the plaintiff to 

show that a case has common issues that would advance 

the litigation in a meaningful way. 

Canadian courts typically hesitate to strike novel 

causes of action before trials. As a result, several Canadian 

courts have certified class actions raising novel 

or “emerging” causes of action or claims even though 

whether such claims even exist under Canadian law remains 

debatable. For example, Canadian courts now almost 

routinely certify “waiver of tort” claims in product 

liability cases even though Canadian law has never recognized 

waiver of tort in this context. Serhan Estate v. Johnson 

& Johnson (2006), 85 OR (3d) 665 (Div Ct), Pollack v. 

Advanced Medical Optics, 2011 ONSC 1966. Claims based 

on waiver of tort pursue “restitution” of benefits allegedly 

received by a defendant as a result of a defendant’s 

impugned conduct rather than compensatory damages 

calculated based on the plaintiffs’ alleged losses. The 

quantified profit enjoyed by a defendant arising from an 

alleged wrong, the plaintiffs’ bar has argued, constitutes 

a common issue. In many cases, it appears obvious that a 

plaintiffs’ attorney simply invokes “waiver of tort” to attempt 

to minimize the significance of individual issues to 

increase the likelihood that a court will certify the class. 

Attorneys now frequently commence Canadian class 

actions on behalf of national and even international proposed 

classes. Several Canadian jurisdictions will even 

permit classes to include “foreign” class members on 

“opt-out” bases. 

Recently, for instance, Ontario courts certified securities 

class actions involving global classes of investors. 

In deciding that they had jurisdiction over the 

claims of non- Canadian investors as part of proposed 

“global” classes, the courts found “real and substantial 

connection[s]” existed between those claims and 

Ontario, largely because the issuers’ offices were in 

Ontario, the documents allegedly containing misrepresentations 

were prepared in Ontario and the securities 

were listed in Ontario. Silver v. Imax Corp., 2009 CarswellOnt 

7873 (SCJ); Ainslie v. Afexa Life Sciences, 2010 

ONSC 4294. 

Canada does not have a formal multidistrict litigation 

structure similar to the multidistrict litigation structure 

available in the United States. As a result, the introduction 

of national and global class actions has resulted in 

■■ 

Lisa D. Parliament is a partner, and Myriam Seers is an associate, in McMillan 

LLP’s Litigation and Dispute Resolution Group practicing from the firm’s Toronto, 

Canada office. With expertise in product liability and class action defense, Ms. 

Parliament regularly advises leading companies on multi- jurisdictional coordination 

and cross-border issues, risk assessment and management, and litigation 

management. She is a member of DRI. Ms. Seers has experience acting for clients 

in a wide range of commercial litigation and arbitration matters with particular 

experience assisting clients in the natural resources, automotive, aviation, overlapping class actions in several provinces purportmanufacturing, 

and financial services industries. Think Globally, continued on page 69 


Defense Ethics and Professionalism 

Seven Legal Sins 

Lessons from Mohandas Gandhi, Esq. 

By Winston N. Harless 

Mohandas Gandhi was a masterful wordsmith. He 

crafted succinct and powerfully instructive statements 

for those willing to listen and learn such as, “Live simply 

so others may simply live,” and “An eye for an eye 

makes the whole world go blind.” Given that Gandhi 

first attempted to champion civil rights while he was an 

expatriate lawyer in South Africa, lawyers might well 

consider the lessons that we may glean from his words. 

In one of his more expansive statements, Gandhi identified 

with distinct and efficient clarity the seven sins 

found in the world. Gandhi observed, “There are seven 

sins in the world: Wealth without work, pleasure without 

conscience, knowledge without character, commerce 

without morality, science without humanity, worship 

without sacrifice, and politics without principle.” Similar 

to the dramatic style of that legendary filmmaker, 

Alfred Hitchcock—exposing danger in the most unlikely 

of places or situations—Gandhi exposes the dangers 

that lurk in otherwise commendable attributes or pursuits. 

With apologies to Gandhi, a practical translation 

or paraphrasing of these observations may disclose to 

lawyers at least seven legal sins that lurk in our world. 

In the legal arena, we might paraphrase Gandhi’s 

“wealth without work” best as “billing without work.” 

Billing time that does not accurately reflect actual work 

performed is unethical whether it takes form as inflating 

an estimate of time spent on a task, taking credit 

for work actually performed by a subordinate, or billing 

a client for tasks that the client might expect a lawyer 

to perform but which a lawyer never performed. In 

so doing, a lawyer not only cheats a client, but he or she 

also cheats that lawyer’s partners and co- workers, particularly 

if the lawyer’s firm bases compensation on 

performance related to originations and collections. 

Unfortunately, this problem has long existed and likely 

will persist, but ethical lawyers resist the temptation of 

this legal sin. 

We might paraphrase Gandhi’s “pleasure without 

conscience” best as “winning without conscience.” 

■■ 

Winston N. Harless is a shareholder in Lewis, King, Krieg & Waldrop, P.C., who 

practices primarily from the firm’s Nashville, Tennessee, office. He has practiced 

mainly in the areas of commercial litigation, insurance coverage and defense, professional 

liability, and education law. He has served on the DRI Lawyers’ Professionalism 

and Ethics Committee Steering Committee for six years, including as its 

publications chair for the last three years, and he currently serves as the committee 

vice chair. Ethics, continued on page 

pro bono, become active in nonprofit organizations, vol- 

68 


Whether improperly withholding damaging information 

from an opponent, purposely failing to disclose the 

holding of an obscure but clearly dispositive case to a 

court, improperly coaching a client during a break during 

a deposition or a trial, or purposely presenting facts 

not admitted as evidence during a final argument, the 

win-at-all-costs mentality has certainly tainted the noble 

profession of law. 

Similar to the twist of Gandhi’s second “sin,” we 

might paraphrase his “knowledge without character” 

best as “advocacy without character.” In this age when 

so many take the position that your character doesn’t 

matter as long as you perform, we lawyers would serve 

ourselves well to remember one of the dreams of Gandhi 

acolyte Martin Luther King Jr. He expressed the hope 

that we would one day “live in a nation where” we would 

properly judge people by “the content of their character.” 

Although King exhorted us to judge based on character 

rather than the color of someone’s skin, exemplifying 

good character is a national ideal. In many ways, a 

lawyer is a public figure and emissary of the profession 

and, as such, should act accordingly to exemplify good 

character. 

Gandhi’s fourth sin—“commerce without morality”—doesn’t 

need paraphrasing to hold true in the 

legal world. When a lawyer’s primary question or concern 

about a case is, “How can I work this file to create 

more fees,” rather than, “What can I do to resolve this 

case most efficiently and effectively for the benefit of my 

client,” then Gandhi’s observation rings true. 

Although a bit of a stretch, we might liken Gandhi’s 

fifth sin of “science without humanity” to “technical 

expertise without humanity.” Lawyers pride themselves 

on their practiced skills, whether writing expertise, witness 

interrogation, or oral presentation in court. These 

skills are appropriate to desire and to achieve. Nonetheless, 

who among us has not witnessed these same “skills” 

used to vent personal attacks, convey professional disrespect, 

or demonstrate unprofessional conduct toward 

a witness, an opposing party, or an opposing attorney 

Gandhi clearly exposes hypocrisy through his sin of 

“worship without sacrifice.” In the legal realm, lawyers 

must not accept the personal benefits and rewards of 

their profession without giving service to others—the 

legal sin of “prestige without service.” Whether we work

I attend educational seminars, but I need more. I need 

a network of like-minded defense practitioners who 

can help me grow my practice. I value timely 

resources and quality publications. I want an advocate 

to serve my interests exclusively. 

Get involved. 

www.dri.org

Apex Doctrine, from page 11 

a deposition, the party seeking the deposition 

must show that the officer possesses 

“unique” or “superior” knowledge of the 

information sought. 

The Alcatel court did attempt to define 

what “unique” or “superior” knowledge 

means. In Alcatel, the party seeking to 

depose the high- ranking corporate official 

presented fact evidence to the court to demonstrate 

that the official could have had discoverable 

information. In re Alcatel USA, 

Inc., 11 S.W.3d at 179. But the court found 

that the Crown Central guidelines required 

more than merely discoverable information. 

“It requires,” the court stated, “that 

the person to be deposed arguably have 

unique or superior personal knowledge of 

discoverable information.” Merely showing 

that a high-level executive has some knowledge 

of discoverable information will not 

satisfy this requirement. Operating under 

a “some knowledge” standard would make 

the apex deposition meaningless. 

The Alcatel court concluded by noting 

that although Crown Central did not elaborate 

on what makes knowledge unique or 

superior, “there must be some showing beyond 

mere relevance, such as evidence that 

a high-level executive is the only person 

with personal knowledge of the information 

sought or that the executive arguably possesses 

relevant knowledge greater in quality 

or quantity than other available sources.” 

“Less Intrusive” Methods 

A fundamental premise of the apex doctrine 

is that deposing a high- ranking corporate 

official is unnecessary because the 

same or similar information is available 

through “less intrusive” means such as 

written interrogatories directed to the 

specific information, or deposing other 

employees who may have similar information. 

For example, before compelling Lee 

Iacocca to submit to a deposition the plaintiffs 

had to propound written interrogatories 

to him on the specific issues that they 

would cover if they deposed him. Mulvey, 

106 F.R.D. at 366. The plaintiffs could only 

apply to take an oral deposition after submitting 

these interrogatories and demonstrating 

that the answers were insufficient. 

While conducting discovery through 

less intrusive means than a deposition 

increases the likelihood that a party can 


make a high- ranking corporate officer 

appear for deposition, it doesn’t mean that 

a court will compel it. Some courts have 

held that merely completing some less 

intrusive discovery does not automatically 

confer a right to depose a high- ranking 

corporate official. In re Daisy, No 99-0500, 

2000 Tex. Lexis 37, at *8 (Tex. April 13, 

2000). What a court decides will depend on 

the discovery results and whether the court 

believes that relevant information remains 

undiscovered that only the high-level corporate 

officer has, or if he or she should provide 

a deposition for other reasons. 

Not Widely Adopted 

Despite numerous court decisions supportively 

applying the apex doctrine, courts 

have not widely adopted it at this point in 

time. Reviewing the available case law indicates 

that only a few select jurisdictions 

have adopted it, in particular, the state 

courts of California and Texas. In other 

jurisdictions, the doctrine has been treated 

less favorably. 

In State ex rel. Ford Motor Company v. 

Messina, the Supreme Court of Missouri 

unequivocally would not apply the apex 

doctrine to block an effort to depose several 

top Ford Motor Company executives. 71 

S.W.3d 602, 607 (Mo. 2002). The court held 

that while opposing litigants may not use 

a burdensome deposition as a bargaining 

chip, under Missouri law, parties may depose 

top-level executives who have discoverable 

information. However, a court should 

consider whether a deposition proponent 

has pursued other methods of discovery, the 

proponent’s need for the deposition, and the 

burden, expense, annoyance, and oppression 

to the organization and the proposed 

deponent that the deposition would cause. 

In Thomas v. International Business 

Machines, the court declined to apply 

the apex doctrine when a party sought to 

depose the chair of the board of directors 

of IBM. 48 F.3d 478 (10th Cir. 1995). The 

chair’s opposing affidavit argued several 

grounds, among them that (1) the deposition 

would take place in Oklahoma City 

instead of the principal place of business, 

White Plains, New York; (2) the plaintiff 

had not deposed any other IBM personnel; 

(3) the chair had submitted an affidavit 

stating that he lacked personal knowledge 

of the pertinent facts material to the plain- 

tiff’s claim; (4) nothing in the appellate 

record showed that the corporate defendant 

had failed to make available for deposition 

those corporate employees with knowledge 

of the pertinent facts material to the plaintiff’s 

claim; and (5) the deposition would 

cause “severe hardship” because the scheduled 

deposition conflicted with the chair’s 

specific duties. Thomas, 48 F.3d at 483. 

However, while neither Ford Motor Company 

nor Thomas applied the apex doctrine, 

they did recognize that deposing a 

corporate official could be unduly burdensome 

and oppressive under certain circumstances. 

See Crest Infiniti, II, LP, 174 P.3d at 

996. Similarly, while the Supreme Court of 

Oklahoma recently declined to apply the 

apex doctrine when two company executives 

sought protection by invoking it, 

the court did acknowledge that protective 

orders in such circumstances could be 

appropriate while also refusing to shift the 

burden to the party seeking the discovery 

to demonstrate a deposition’s necessity. 

And recently, a decision from the Michigan 

Court of Appeals applied the apex doctrine, 

albeit in an opinion with a strongly 

worded dissent sharply criticizing the doctrine 

in several ways, including that it violated 

the principle of equality under the 

law: “I wish to make clear my belief that 

high- ranking corporate officers should be 

held to the same civil discovery standards 

as any other deponent, witness, or party. 

Indeed, I believe that our law demands 

this.” Alberto, 796 N.W.2d at 502. 

Conclusion 

Counsel representing large companies 

and institutions face pressures from many 

fronts, including the threat that an aggressive 

opposing counsel will attempt to gain 

leverage in a lawsuit to achieve a settlement 

by threatening to depose one or more 

high-level corporate officers. While courts 

have not widely accepted the apex doctrine, 

defense counsel have used it effectively in 

certain jurisdictions to thwart unnecessary 

depositions. When raised under the appropriate 

circumstances, the apex doctrine 

forces all sides to examine the actual necessity 

of the deposition, challenges the party 

seeking the deposition to present goodfaith 

arguments to a court that it needs the 

deposition, and prevents a litigant from 

using it to gain leverage in the litigation

or to harass the top brass of an opponent. 

Raising apex doctrine arguments in 

a motion for a protective order at a minimum 

alerts a court to the circumstances 

and increases the chances that under Federal 

Rule of Civil Procedure 26 or a corresponding 

state rule a court will limit the 

time, scope, or duration of the deposition, 

or order that it not occur at all. 

Dram Shop Laws, from page 43 

did not know the person was a habitual 

addict and/or that the service was not a 

proximate cause of the injuries. 

Blood Alcohol Content Evidence 

In cases involving motor vehicle accidents, 

police often will conduct tests to determine 

the bloodalcohol content of anyone 

whom they suspect drove under the 

influence of alcohol (DUI). Accordingly, a 

tortfeasor’s bloodalcohol content at a particular 

point in time often is known. Courtesy 

of CSI and similar television shows, 

the public has been misled to believe that 

forensic testing is infallible and conclusive. 

This misunderstanding can make a tortfeasor’s 

bloodalcohol content devastating to 

a defense. Blood- alcohol content changes 

significantly over time. It takes 30 to 180 

minutes for a person to “fully absorb” the 

alcohol that he or she consumes, depending 

largely on how much food he or she 

had in his or her stomach. Thus, a person 

may become impaired after leaving an 

establishment or a house. This is problematic 

because the issue in dram shop cases 

revolves around a tortfeasor’s condition at 

the time of service or drinking. 

Plaintiffs’ attorneys often hire experts 

to estimate “bloodalcohol content at the 

time of service, sometimes describing this 

as “relating bloodalcohol content back 

to the time of service,” through a process 

called “retrograde extrapolation” to establish 

relevance. This process, however, is far 

from perfect. To reach a reasonable opinion, 

experts need information about 

• A drinker’s sex, age, height, and weight; 

• The time that he or she started and 

stopped drinking; 

• The drinking pattern; 

• The type of alcohol that the drinker consumed 

and the amounts that he or she 

consumed of each type; and 

• The time and the amount of food that 

the drinker consumed. 

Even with this information, enough uncertainty 

remains that honest experts typically 

express their opinions using broad ranges. 

Regardless of whether an expert testifies 

on and estimates bloodalcohol content 

at the time of service, defense counsel 

should move to exclude bloodalcohol content 

results. In cases in which someone 

drank quickly, drank right before leaving, 

when a significant amount of time 

elapsed between the time of drinking and 

the time of the test, or any combinations of 

the three, counsel has a reasonable chance 

of prevailing. Additionally, defense counsel 

should move to exclude mentioning the 

.08 legal limit for criminal liability. The 

legal limit has no probative value and, after 

years of public service advertisements, 

most jurors probably believe that everyone 

over the legal limit was substantially 

and visibly intoxicated or inappropriately 

served by an establishment per se. 

In cases in which a tortfeasor’s bloodalcohol 

content was never measured scientifically, 

a plaintiff’s attorney may 

hire experts to estimate the tortfeasor’s 

bloodalcohol content based on the factors 

described above. In most cases, such estimates 

are extremely speculative; in virtually 

all cases, defense counsel should move 

to exclude them. 

Subsequent Remedial Measure Evidence 

Many establishments respond to dram 

shop suits by changing their procedures or 

otherwise imposing subsequent remedial 

measures. Defense counsel should move to 

exclude this evidence. 

Other Trial Tactics 

In jurisdictions where counsel can question 

potential jurors, an attorney must 

question prospective jurors about their 

attitudes concerning alcohol, alcoholism, 

drinkers, bars, and the like. At the very 

least, counsel should strongly consider 

striking venire persons who do not drink, 

think little of those who do, don’t like bars, 

and have been involved in incidents with 

impaired people, among other things. Ideally, 

defense counsel will want least some 

jurors who strongly believe in taking personal 

responsibility while exercising caution 

to avoid exposing such people since 

a plaintiff’s counsel surely will attempt to 

strike them. 

In most cases, defense counsel should 

develop a theme centered on personal 

responsibility and place blame on a tortfeasor. 

The argument becomes even stronger 

if a plaintiff also was drinking even if the 

plaintiff did not cause the accident. 

Defense counsel also must humanize 

an establishment. Jurors need to understand 

that businesses and parties are run 

or held by people exactly the same as them. 

In jurisdictions where engaging in responsible 

business practices is a defense, counsel 

should emphasize all of the steps that an 

establishment took to avoid serving someone 

irresponsibly and linking the steps to 

the establishment’s commitment to social 

responsibility. 

As previously noted, an establishment’s 

character is irrelevant and inadmissible. 

Still, a plaintiff’s counsel will almost assuredly 

attempt to paint an establishment as 

the Mecca of hedonism. Defense counsel 

should counter that image by presenting 

management and staff or hosts in the most 

professional and responsible manner possible 

and by introducing photographs of the 

establishment showing that it is clean, well 

lit, and organized. 

Counsel should present as much evidence 

as possible showing that the tortfeasor 

was not visibly impaired even in 

states that prohibit serving habitual addicts 

regardless of intoxication level. Even in 

these states, jurors are less likely to hold 

an establishment responsible if they do not 

believe that the establishment knowingly 

contributed to the harm. 

Conclusion 

Laws subject licensees to significant and 

varied forms of liability in particular circumstance. 

Defense counsel can serve their 

clients best by familiarizing themselves 

with the applicable laws and advising their 

clients how they can reduce their risks and 

avoid liability, rather than simply handling 

claims. 


Port in the Storm, from page 17 

and apply to certain matters designated as 

complex cases. In designated cases, parties 

are required to submit, early in the matter, 

a “protocol and schedule for electronic discovery, 

including a brief description of any 

disputes regarding the scope of electronic 

discovery.” This Joint E- Discovery Submission 

requires counsel to identify specifically 

any “unresolved issues,” including 

those relating to preservation; search and 

review; source(s) of production; form of 

production; identification and inadvertent 

production of privileged material; and cost 

allocation. Interestingly, it presumes that 

the parties “have discussed the obligation 

to preserve potentially relevant electronically 

stored information and agree to the 

following scope and methods for preservation, 

including retention of electronic data 

and implementation of a data preservation 

plan; identification of potentially relevant 

data; disclosure of the programs and manner 

in which the data is maintained; identification 

of computer system utilized; and 

identification of the individuals responsible 

for data preservation.” The order calls 

for information on the value of the case and 

the specific anticipated costs of e- discovery, 

and even inquires as to “the extent to which 

the parties have disclosed or have agreed to 

disclose the dates, contents, and/or recipients 

of ‘litigation hold’ communications.” 

These developments highlight the three 

“c”s of e- discovery law evolution—complex, 

controversial, and constant. The 

mandate of DRI’s Electronic Discovery 

Committee is to be a port in this storm of 

change for all litigants and defense practitioners 

seeking guidance in these difficult 

areas. 

To that end, in this edition of For The 

Defense, the committee is pleased to present 

series of articles that look critically at 

several of these issues and provide helpful 

guidance. In “Controlling E- Discovery: 

Drafting Effective Records Management 

Policies,” DRI Electronic Discovery Committee 

Vice Chair John J. Jablonski and 

Phillip J. Duffy address the elements of an 

effective and defensible corporate records 

management program, a theme they lectured 

on at DRI’s 2011 Annual Meeting. The 

article discusses how a well documented 

and thoughtful business approach to the 

retention, management, and destruction 

of business records is often the best defense 

to allegations of spoliation when opponents 

seek sanctions for missing documents or 

electronically stored information. 

In “Company- Enabled Technologies, 

Social Networking Platforms, and Mobile 

Devices: Managing Electronic Discovery 

and Compliance Risks,” our committee’s 

publications chair, John Martin, and publications 

vice chair, Heyward Bonyata, focus 

on how new media and media sources 

like SharePoint, social networking websites, 

e-mail, text messages, Twitter and 

the “cloud” have permanently changed the 

way today’s employees collaborate, create, 

store, and instantly transmit ideas, images, 

and information. The article discusses how 

it is essential to understand both the tremendous 

value and significant legal risk 

embodied in the new technologies, and 

ways to mitigate those risks. 

Finally, in their piece entitled “Local 

Rules, Procedures and Model Orders: The 

Progress of E- Discovery,” Kym Kochis and 

Frank McKnight look at the requirements 

and restrictions, pronouncements, and penalties 

that courts and judges have enacted 

or recommended regarding e- discovery 

practice at the local level, in the form of 

local rules, recommended or required procedures, 

and model orders. The article 

explores the different approaches taken to 

provide guidance on this subject, including 

requirements mandating early discussion 

and negotiation, restrictions on 

the scope of e- discovery and guidance on 

cost-shifting 

As always, you can find additional guidance 

in articles published by committee 

members and guest experts in future editions 

of DRI’s In-House Defense Quarterly, 

as well as the Electronic Discovery 

Committee’s own newsletter, E-Discovery 

Connection. 

From our numerous informative publications, 

to our series of topical webinars 

given throughout the year, to our advocacy 

among the leading e- discovery organizations 

and rule making bodies, DRI’s 

E- Discovery Committee is a dynamic, relevant, 

and respected group of professionals 

dedicated to providing a venue for DRI 

members and their clients to collaborate 

with and support each other in e- discovery 

matters. If you are not already a member of 

the committee, I invite you to join and take 

advantage of the tremendous opportunities 

and resources that membership provides. 

Please contact me, John Jablonski, or our 

membership chair or vice chair, Tom Jones 

and Dave Walton, if you are interested in 

membership or in becoming a more active 

member. And please help us spread the 

word throughout the DRI community and 

especially to your colleagues who are not 

yet DRI members. Enjoy the articles that 

follow. —MSS 

Premises, from page 50 

sities of its customers to litter the floors 

and stairway with dangerous substances 

such as chewing gum”); Lingerfelt v. Winn- 

Dixie Texas, Inc., 645 P.2d at 489 (finding 

the key element of evidence was the testimony 

of three employees that strawberries 

normally were covered with cellophane 

for safety reasons); Cobb v. Skaggs Cos., 

661 P.2d 73, 76–77 (Okla. Civ. App. 1982) 

(finding that jury could “find that [the defendant] 

created and maintained a fore- 


seeable, unreasonable risk by displaying 

the grapes in such a manner without the 

protection of a table guard or other protective 

scheme”); Corbin v. Safeway Stores, 

Inc., 648 S.W.2d at 294 (noting the defendant’s 

awareness “that the grape bin was 

an unusually hazardous and continual 

source of slippery material on which customers 

may fall”); Canfield v. Albertsons, 

Inc., 841 P.2d at 1227 (finding that when the 

defendant “chose a method of displaying 

and offering lettuce for sale where it was 

expected that third parties would remove 

and discard the outer leaves from heads of 

lettuce they intended to purchase… [i]t was 

reasonably foreseeable that… some leaves 

would fall or be dropped on the floor by 

customers thereby creating a dangerous 

condition”); Malaney v. Hannaford Bros. 

Co., 177 Vt. at 135, 861 A.2d 1069 (finding 

that the plaintiff had submitted sufficient 

evidence to avoid a directed verdict 

on the issue of “the reasonableness of the 

steps taken by [the] defendant to address

the known hazard posed by the grape display”); 

Ciminski v. Finn Corp., 13 Wash. 

App. at 823, 537 P.2d 850 (allowing the 

plaintiff to survive the defendant’s summary 

judgment motion by submitting “evidence 

that there tended to be spills in the 

area where she fell, and that the floor in 

this area was sometimes greasy”); Steinhorst 

v. H.C. Prange Co., supra, 48 Wis. 

2d at 684, 180 N.W.2d 525 (“unsafe condition 

here was substantially caused by the 

method used to display merchandise for 

sale,” namely, the self-serve shaving soap 

counter); Strack v. Great Atlantic & Pacific 

Tea Co., 35 Wis. 2d 51, 56, 150 N.W.2d 361 

(Wis. 1967) (finding that defendant’s liability 

rested on, among other things, “the 

manner in which the Italian prunes were 

displayed”); Buttrey Food Stores Division 

v. Coulson, 620 P.2d at 553 (“existence of 

water on the floor of the store premises 

was a reasonable probability because of 

the weather conditions”). So the rule will 

not apply in some situations because the 

hazardous condition was not related to any 

particular method of operation. 

In presenting a motion for a summary 

judgment on the grounds that a court 

should not apply the “mode of operation” 

rule, counsel for a retailer should attempt 

to distinguish the facts in the retailer’s 

particular case from cases in which courts 

have applied the “mode of operation” rule. 

As courts have for the most part limited 

the rule to situations involving “produce 

displays or other instances of unwrapped 

and/or ready to eat food that customers 

were encouraged to handle,” counsel needs 

to argue that the situation at hand does not 

involve a product that the customer was 

“encouraged to handle.” Fisher, 298 Conn. 

at 429. Overall, defense counsels for retailers 

should not feel that they cannot file 

summary judgment motions when plaintiffs’ 

attorneys have based premises liability 

on “mode of operation” theories, although 

the rule clearly presents an additional hurdle 

and may make winning a summary 

judgment for defendants in cases involving 

falls more difficult to win. 

KEEP TRACK OF THIS 

AND ALL OF DRI’S 

CUTTING-EDGE CLE— 

Visit www.dri.org or 

call 312.795.1101 to 

register or for 

more information. 

RETAIL AND HOSPITALITY 

LITIGATION AND CLAIMS 

MANAGEMENT SEMINAR 

MAY 10–11, 2012 

SWISSÔTEL CHICAGO 

CHICAGO, ILLINOIS 

REASONS TO ATTEND 

Network with leaders from both the retail and hospitality industries 

Receive practical, innovative advice from both outside and in-house counsel that 

will impact your approach to the practice of law when representing the retail, 

hospitality and restaurant industries 

Hear from featured speakers, including the CEO of a major international claims 

manager, Sedgwick Inc.; in-house counsel with major retail companies; and a 

trial attorney who serves as an NFL referee—he will share his secrets of 

negotiating in the big leagues 

Obtain updates and best practices recommendations on the ever-changing 

Medicare requirements impacting workers’ compensation and liability litigation 


Ethics, from page 62 

unteer as workers in community- based 

projects, or make significant financial contributions 

to deserving causes, our profession 

has much that it can and must give to 

make our respective communities and the 

world a better place for all. 

Finally, we might paraphrase and view 

Gandhi’s “politics without principle” as 

an all- encompassing legal sin summarizing 

the first six sins: “practice without 

principle.” Politicians seek ends, but 

how often have we witnessed the unfortunate 

results of the means by which they 

achieved those ends Likewise, the practice 

of law generally involves seeking a desired 

end, but lawyers must always ask by what 

means. The practice of law without principle 

may achieve the desired ends for a 

limited time. In the long run, however, lawyers 

would benefit from remembering the 

words attributed to Abraham Lincoln— 

himself a lawyer: “You can fool some of the 

people all of the time, and all of the people 

some of the time, but you cannot fool all of 

the people all of the time.” 

Shoplifters, from page 45 

power to avoid false imprisonment actions 

while still actively pursuing shoplifters 

should follow the steps listed below. 

1. Watch the shoplifter approach your 

merchandise; 

2. Watch the shoplifter select your 

merchandise; 

3. Watch the shoplifter conceal, carry away, 

or convert your merchandise; 

4. Maintain continuous observation of the 

shoplifter; 

5. Watch the shoplifter fail to pay for the 

merchandise; and 

6. Approach the shoplifter outside of the 

store. 

Chris E. McGoey, Shoplifting: Detention & 

Arrest, http://www.crimedoctor.com/shoplifting2. 

htm (last visited December 19, 2011). 

Conclusion 

Dealing with shoplifters can be tricky. 

Shoplifters steal from every kind of store, 

they steal items worth less than a dollar as 

well as very expensive items, and they often 

buy and steal more than one item. National 

Association of Shoplifting Prevention, supra. 

It’s certainly enough to keep retailers 

on their toes. However, by adhering to the 

above guidelines and by carefully training 

employees on these guidelines, retailers 

can detain suspected shoplifters and recover 

stolen merchandise without becoming 

civilly liable for false imprisonment. It’s 

not enough to eliminate shoplifting, but it’s 

certainly a step in the right direction. 

Members on the Move, from page 4 

ulations” in Texas Lawyer magazine in 

which discusses the Equal Employment Opportunity 

Commission’s issuance of regulations 

under the Americans with Disabilities 

Act Amendments Act (ADAAA). According 

to Mr. Neal, “The new regulations put teeth 

into the ADAAA’s goal of making it easier 

to meet one of the three tests for ‘disability’ 

needed for coverage under the Americans 

With Disabilities Act (ADA).” Mr. Neal is a 

partner in Thompson & Knight’s Labor and 

Employment Practice Group and focuses on 

labor and employment law, civil appellate 

law, school law, and civil rights matters. He 

represents management in all aspects of administrative, 

trial, and appellate labor and 

employment work and counseling. He is involved 

in numerous professional and civic 

organizations and has been recognized in 

the 2012 Best Lawyers in America, as well 

as named to Texas Super Lawyers for multiple 

years. Mr. Neal is board certified in 

both labor and employment law and civil 

appellate law by the Texas Board of Legal 

Specialization. 

Sammi L. Renken has been elected as 

an equity shareholder at the law firm of 

Johnson & Bell, Ltd., in Chicago. Ms. Renken 

concentrates her practice in health 

care professional liability, including medical 

malpractice, legal malpractice involving 

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for removal, removal procedure, waiver of the right to remove, 

post-removal procedures and appellate review of remand orders. 

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underlying health care litigation, medical 

product liability, and nursing home 

litigation. Ms. Renken has successfully 

defended a variety of practitioners on licensure 

issues before the Illinois Department 

of Financial and Professional Regulation, 

and has defended multiple area hospitals, 

clinics, long term care facilities, urgent 

care centers, group homes for minors with 

developmental disability, same day surgery 

centers, and individual physicians 

and nurses. She has also defended claims 

across the spectrum of health care litigation 

including birth injury, pharmaceutical 

and medical device product liability 

claims, cardiac care, emergency medicine, 

EMTALA claims, anesthesia related 

complications, surgical perforation and 

retained sponge claims, delay in cancer 

diagnosis, decubitus ulcer/wound care, 

plastic surgery claims, spinal cord injury, 

psychiatric care, restraints, organ transplantation, 

and medication error claims. 

Ms. Renken has participated in all aspects 

of cases that have gone to verdict in the Circuit 

Court of Cook County and the United 

States District Court for the Northern District 

of Illinois. 

Marge Motluck 


Think Globally, from page 61 

ing to encompass the same classes or class 

members. In August 2011, a national class 

actions task force, in consultation with the 

judiciary, passed a protocol for coordinating 

class actions. Among other things, the 

protocol sets out a mechanism to coordinate 

settlement approvals in related class 

actions brought in different provinces. The 

Canadian courts have not formally adopted 

the protocol and even if adopted it will not 

have the force of law. 

Class actions can be expensive for all 

parties. Further, under the “loser-pays” 

costs system available to varying degrees 

in Canadian jurisdictions, unsuccessful 

representative plaintiffs may have to pay 

significant portions of defendants’ costs. 

Previously, representative plaintiffs would 

rely on class counsel or a governmentsponsored 

fund for financial support and 

indemnification. And one Ontario court 

recently approved a third-party indemnification 

agreement whereby the third 

party agreed to indemnify the representative 

plaintiff in the event of an adverse 

costs award in exchange for a percentage 

of the recovery if the plaintiff received one. 

Dugal v. Manulife Financial Corp., 2011 

ONSC 1785. The additional resources available 

from third-party funders probably will 

further encourage plaintiffs to commence 

class actions in Canada by removing the 

risk to representative plaintiffs associated 

with adverse costs awards. 

Legislative changes over the last decade 

have introduced new or expanded bases 

of civil liability. For example securitiesrelated 

class actions have seen significant 

change. The availability of certain previously 

unavailable causes of action has 

encouraged the increase in class actions 

in Canada by expanding the range of 

claims that plaintiffs may assert against 

defendants. For example, amendments to 

Ontario securities legislation now permit 

secondary market purchasers of securities 

to sue issuers and other market participants 

for misrepresentations in disclosure 

documents. Since the introduction of these 

amendments, courts have certified a number 

of class actions asserting causes of 

action on behalf of secondary market purchasers. 

Silver v. Imax, 2009 CarswellOnt 

7873 (SCJ); Dobbie v. Arctic Glacier Income 

Fund, 2011 ONSC 25 (SCJ). 

U.S. companies and the class actions 

bar should be aware of these developments 

in the Canadian class actions landscape, 

which have led both to an increase in the 

number of class actions commenced in 

Canada and in the scope of classes that 

Canadian courts certify. 

Records Mgmt., from page 23 

whenever litigation is anticipated probably 

is the only way for litigants to demonstrate 

that they have discharged their preservation 

obligations properly in federal courts. 

In the words of the Pension Committee 

opinion, “The failure to issue a written legal 

hold constitutes gross negligence.” 

Fifth, enforce and examine the effectiveness 

of the legal hold. Ensuring the legal 

hold process is effective once it is under 

way requires diligence and follow up. As 

with any form of effective communication, 

an organization must take steps to ensure 

and track the receipt, understanding, and 

acceptance of the custodians of their duty 

to preserve. 

Sixth, modify the legal hold. Issuing a 

legal hold is rarely a “one and done” deal. 

A duty to preserve evidence evolves as new 

facts come to light. At this stage, attorneys 

familiar with a case leading to a legal hold 

should interview the key players to ascertain 

their involvement. Reviewing initial 

evidence, often referred to as “early evidence 

assessment,” can help an organization 

understand the types and quantity of 

data that it may need to collect. The scope 

of a legal hold or the instructions for preserving 

data often changes as an organization 

gathers more information. New 

custodians may be identified, while others 

can be released from the duty to preserve 

if the situation warrants it. 

Seventh, monitor and remove the legal 

hold. It is also important to continue to 

monitor a legal hold over time. At a minimum, 

a court will expect an organization 

to send periodic and routine reminders to 

custodians to ensure their ongoing awareness 

of the need to preserve data. When an 

organization expects custodians to continue 

to preserve data diligently, sending 

occasional reminders is certainly warranted. 

Once the duty to preserve no longer 

exists—a case settles, regulators conclude 

an investigation, or a trial resolves a case— 

the obligation to preserve relevant documents 

and data also goes away. At this 

point, it is important to remove the legal 

hold. An organization should send a notice 

to custodians releasing them from the 

obligation to preserve information and 

stating that the routine retention policies 

of the organization can be resumed. 

Further, an organization at that point can 

destroy expired documents and records 

as long as they do not fall within the scope 

of a concurrently pending but separate 

legal hold. 

Creating an Effective Legal Hold 

Policy Involves Four Steps 

A comprehensive recordsmanagement 

policy requires creating, implementing, 

and adhering to a legal hold policy. Here 

are steps that companies can take to protect 

themselves in light of recent case law. 

First, deploy a legal hold management 

process. Ensure a consistent and defensible 

process is in place to reliably issue 

legal hold notifications and track custodial 

compliance with the hold instructions— 

and apply those processes consistently. As 

with information governance, reinforce 

that a transparent and repeatable process, 

consistently applied regardless of venue 

or type of legal matter, becomes far easier 

to defend than the actions of individuals. 

Having a reliable and consistent audit trail 

can also help. 

Second, establish a legal hold oversight 

committee if an organization hasn’t already 

done so. Responding to a preservation obligation 

is an interdisciplinary exercise that 

should involve representatives from the 

records management, legal, information 

technology, and human resources departments 

as well as compliance administrators. 

Needless to say, having these groups 

learn to collaborate in the midst of a highstakes 

legal or regulatory response is not 

an optimal strategy for success. Rather, put 

these teams in place today and establish a 

repeatable, documented process for invoking 

the team as needed. 


Third, reassess and update information 

governance and a records- retention plan. 

Knowing where data resides that may become 

relevant to litigation or a government 

investigation in the future is critical to data 

preservation efforts. Responding in a timely 

manner requires proactively establishing a 

process for identifying the data that an organization 

needs to preserve, where it resides, 

and who has responsibility for the 

data. Furthermore, a data- mapping process 

can help focus and prioritize information 

governance initiatives to reduce and 

eliminate obsolete or redundant data before 

a duty to preserve it arises. An effective 

legal hold management process also allows 

an organization to identify data repositories 

and areas of the organization quickly that 

others will want from an organization most 

frequently during litigation discovery and 

that an organization has a duty to preserve. 

Fourth, educate employees about and 

train them on legal holds. An effective legal 

hold process depends on the actions of custodians 

and data stewards to suspend routine 

destruction or alteration of relevant 

data. A well-crafted legal hold notice that 

clearly and concisely instructs employees 

how to act and a process to ensure that 

they receive and understand a legal hold 

notice are critical elements of reasonable 

and good faith preservation. Organizations 

that educate and train employees will 

reap the investment benefits by improving 

the efficiency and effectiveness of their 

efforts. Look for opportunities to incorporate 

such training into new employee orientations 

or annual ethics and compliance 

training sessions. Introduce employees to 

sample legal holds and walk them through 

what an organization expects from them in 

response. Consider including a reference to 

legal holds in the employee policy and procedures 

handbook. 

Conclusion 

The old adage “an ounce of prevention is 

worth a pound of cure” is the best way 

to understand the role that a recordsmanagement 

policy plays in evidence preservation 

and ultimately the e- discovery 

process. In managing where an organization 

stores records, how long the organization 

keeps them, and when the company 

will destroy them, a company can effectively 

minimize its exposure to spoliation 

risks as well as minimize the costs of 

e- discovery. As shown, taking small steps 

to make sure a company complies with an 

existing recordsmanagement policy or 

creating a new more effective policy will go 

a long way toward protecting a company in 

the long run. 

Detention, from page 60 

the Director of National Intelligence, that 

the government to which the individual is 

to be transferred is not a state sponsor of 

terrorism, is capable of exercising control 

over the detainee and preventing him or 

her from engaging in terrorist activity, and 

agrees to share with the United States any 

information that is related to the detainee 

or his or her associates or that “could affect 

the security of the United States, its citizens, 

or its allies.” Pursuant to Section 

1033 an innocent detainee who is not facing 

prosecution under either military or civilian 

law, and who is not considered by the 

military to be subject to ongoing detention 

under the AUMF, could languish at Guantanamo 

Bay simply because the Secretary 

of Defense is unable to certify that his or 

her home country will share its intelligence 

information with the United States. Not 

only does Section 1033 represent an intrusion 

into the sovereignty of other nations, 

it represents an unwarranted interference 

with the executive branch’s need to have 

discretion in deciding the circumstances 

under which detainees should be released 

from Guantanamo Bay. 

Section 1033 also creates a disconnect 

between the powers granted by the AUMF, 

which authorizes the President to use all 

appropriate force, and the provisions of 

Section 1033, which strip the President 

of any power to determine what happens 

to terrorism suspects once the force is 

applied. In Hamdi v. Rumsfeld, 542 U.S. 

507, 518 (2004), the Supreme Court held 

that the detention of enemy combatants 

for the duration of the conflict is a lawful 

exercise of the necessary and appropriate 

force provisions of the AUMF. Thus, 

those who oppose the measure contend 

that Section 1033 is an end run around a 

lawful system of detention and release and 

interferes with the President’s need to balance 

important foreign policy and national 

security concerns. It conflicts with and is 

apparently intended to supersede Executive 

Order 13492, dated January 22, 2009, 

which vested the Secretary of Defense in 

consultation with others the determination 

of “whether it is possible to transfer or 

release the individuals consistent with the 

national security and foreign policy interests 

of the United States, and, if so, whether 

and how the Secretary of Defense may 

effect their transfer or release.” See Executive 

Order No. 13492, 74 Fed. Reg. 4898 

at §4 (Jan. 22, 2009). Finally, countries 

that may have otherwise been willing to 

accept Guantanamo detainees may refuse 

to do so simply as a result of the condi- 

tions attached to the release. Thus, Section 

1033 creates a very real risk that innocent 

persons who have not been tried and who 

are not deemed to be subject to continued 

detention under the AUMF could languish 

at Guantanamo indefinitely. 

Those who support the measure argue 

that terrorists have been released from 

Guantanamo Bay only to re-emerge as 

enemy combatants against the United 

States in subsequent terrorist attacks. Thus, 

creating barriers to decisions that may 

be motivated by a political desire to close 

Guantanamo Bay is necessary to preserve 

our national security. 

Conclusion 

Sections 1031, 1032 and 1033 of the NDAA 

reflect an ongoing struggle to find the 

appropriate balance between protecting 

our country from terrorist attacks and preserving 

the constitutional rights that our 

country has always stood for. Opponents 

contend that we can accomplish both our 

national security concerns and our commitment 

to justice by utilizing the variety 

of law enforcement tools already available 

to us. Supporters of the disputed sections 

claim that national security must come 

first and that the military is best suited to 

deal with issues of national security. 


■ ENGAGE ■ CONNECT ■ GROW ■ LEARN ■ 

The DRI Community 

UPCOMING CLE 

March 8–9 

MEDICAL LIABILITY 

AND HEALTH 

CARE LAW 

Presented by DRI’s Medical 

Liability and Health 

Care Law Committee 

Hilton New Orleans Riverside 

New Orleans, LA 

March 28–30 

INSURANCE COVERAGE 

AND CLAIMS INSTITUTE 

Presented by DRI’s 

Insurance Law Committee 

The Westin Michigan Avenue 

Chicago, IL 

March 14–16 

TRIAL TACTICS 

Presented by DRI’s Trial 

Tactics Committee 

Bally’s Las Vegas 

Las Vegas, NV 

April 11–13 

PRODUCT LIABILITY 

CONFERENCE 

Presented by DRI’s Product 

Liability Committee 

The Venetian Palazzo Hotel 

Las Vegas, NV 

March 14–16 

RAINMAKING 

Presented by DRI’s Law 

Practice Management 

Committee 

Bally’s Las Vegas 

Las Vegas, NV 

April 25–27 

LIFE, HEALTH, 

DISABILITY AND 

ERISA CLAIMS 

Presented by DRI’s Life, Health 

and Disability Committee 

Swissôtel Chicago 

Chicago, IL 

Visit http://dri.org/Events/Seminars 

or call 312.795.1101 to register for more information.

advocates 

John A. Aberasturi, 

Reno, NV 

Patricia O’Connell Alvarez, 

Laredo, TX 

Edmund J. Benson, 

Lexington, KY 

Kevin M. Brown, 

Albuquerque, NM 

Jessica J. Burgasser, 

Buffalo, NY 

Dale Conder, Jr., 

Jackson, TN 

Tracy Jonathan Cowan, 

Saint Louis, MO 

Thomas Joseph D’Amato, 

San Francisco, CA 

Stephen H. DiNolfo, 

Naperville, IL 

Mary Jane Dobbs, 

Roseland, NJ 

George D. Fagan, 

New Orleans, LA 

Calvin R. Fulkerson, 

Lexington, KY 

Jennine Gerrard, 

New York, NY 

Linda Wendell Hsu, 

San Francisco, CA 

Brian J. Huelsmann, 

Edwardsville, IL 

Julye Johns, Atlanta, GA 

Thomas M. Jones, 

Seattle, WA 

Michael B. Kass, 

Saint Louis, MO 

Nandor B. Krause, 

Walnut Creek, CA 

Michael M. Marick, 

Chicago, IL 

Dianna McCarthy, 

New York, NY 

Advocates and New Members 

Each month, DRI welcomes new members from the United States and Canada and abroad. Some of these new 

members have been recommended by current members actively involved in advancing goals shared by DRI. Any 

individual who recommends a new member is recognized as an “Advocate” for DRI. 

John W. McConnell III, 

Los Angeles, CA 

Laurie J. McLeRoy, 

Milwaukee, WI 

Peter C. Munger, 

Toledo, OH 

Robert B. Nussbaum, 

Florham Park, NJ 

Mark A. Perkins, 

Shreveport, LA 

Karen Painter Randall, 

Roseland, NJ 

Seth A. Rider, Denver, CO 

Neil H. Selman, 

Los Angeles, CA 

Paul R. Smith, 

Minneapolis, MN 

Anne M. Talcott, 

Portland, OR 

Melissa Roberts Tannery, 

Richmond, VA 

John R. Trigg, Denver, CO 

Rebecca Christina Wall, 

Atlanta, GA 

Jere Bennett White, 

Birmingham, AL 

New Members 

Alabama 

William S. Starnes, Jr., 

Birmingham 


California 

Theda C. Snyder, 

Beverly Hills 

Jason N. Cirlin, Los Angeles 

Mark Eric Inbody, 

San Francisco 

Steven A. Kronenberg, 

San Francisco 

Ryan Opgenorth, 

San Francisco 

Jeffrey Barton Soderborg, 

San Francisco 

Chad D. Greeson, 

Walnut Creek 

Colorado 

Patricia C. Campbell, 

Denver 

Tory D. Riter, Denver 

John Mark Vaught, Denver 

Connecticut 

Peter E. Strniste, Jr., 

Hartford 

Dove A.E. Burns, Stamford 

District of Columbia 

Jonathan F. Cohn, 

Washington 

Joshua Daniel Greenberg, 

Washington 

Florida 

Patrick M. Causey, Tampa 

Richard Mangan, Tampa 

Georgia 

Kim Ruder, Atlanta 

Taylor Chamberlin Tribble, 

Atlanta 

Idaho 

Bently G. Stromberg, 

Lewiston 

Illinois 

Michael J. Conte, Chicago 

Mary E. Fechtig, Chicago 

Antonio Joseph Fricano, 

Chicago 

Patrick J. Giese, Chicago 

Angie Marie Grove, 

Chicago 

James H. Kallianis, Jr., 

Chicago 

Susan V. King, Chicago 

Ben M. Llaneta, Jr., Chicago 

Steven M. Sandler, Chicago 

John Zulkey, Chicago 

Eric P. Hall, Edwardsville 

Sherin Joharifard, 

Edwardsville 

Derek William McCullough, 

Lawrenceville 

W. Anthony Andrews, 

Naperville 

Kentucky 

William J. George, Lexington 

David A. Trevey, Lexington 

Jamie L. Wilhite, Lexington 

Louisiana 

Jessica S. Allain, 

Baton Rouge 

Margaret F. Swetman, 

New Orleans 

Christopher T. Baker, 

Shreveport 

Maryland 

Rebecca A. Romig, Baltimore 

James O. Spiker IV, 

Baltimore 

Michael Bergamini, Towson 

Massachusetts 

Ben N. Dunlap, Boston 

David Fialkow, Boston 

Stephen G. Troiano, Boston 

Michigan 

Laura C. Baucus, 

Bloomfield Hills 

John C. Boufford, Detroit 

Natalie L. Yaw, Detroit 

Johanna Novak, Marquette 

Minnesota 

Melissa L. Hagstrum, 

Minneapolis 

Laura Tushaus, Minneapolis 

Missouri 

John A. Vering III, 

Kansas City 

John Bruegger, Saint Louis 

Nevada 

Eric D. Hone, Las Vegas 

Brett Allen Dieffenbach, 

Reno 

New Jersey 

Michael H. Cohen, 

Florham Park 

Lisa C. Wood, Florham Park 

Margriet Schaberg, 

Morristown 

Thomas W. Randall, 

Westwood 

New Mexico 

Desiree D. Gurule, 

Albuquerque 

New York 

Carrie R. McElroy, Buffalo 

Donald J. Cayea, New York 

Mitchell A. Greene, New York 

Andrew R. Jones, New York 

Dianna McCarthy, New York 

Brian S. Wolosky, Tarrytown 

North Carolina 

Joseph Andrew Vossen, 

Wilkesboro 

Ohio 

George S. Coakley, 

Cleveland 

Patricia F. Krewson, 

Cleveland 

Lisa A. Bucher, Toledo 

Pennsylvania 

Randy J. Maniloff, 

Philadelphia 

Bryan Petrilla, 

West Conshohocken 

South Dakota 

Alex M. Hagen, Sioux Falls 

Melissa Jelen, Sioux Falls 

Tennessee 

Boyd Patterson, Hixson 

Matthew R. Courtner, 

Jackson 

Taylor A. Williams, Knoxville 

Texas 

Michael Alan Choyke, 

Houston 

Mary Alice Parsons, Houston 

Keith A. Kendall, 

San Antonio 

Utah 

Bryan J. Pattison, 

Saint George 

Vermont 

Thomas Silvio Valente, 

Rutland 

Virginia 

John B. Mumford, Glen Allen 

Jennifer L. Stevens, 

Virginia Beach 

Washington 

Joseph Derrig, Seattle 

Jennifer R. Porto, Seattle 

Sean V. Walton, Seattle 

West Virginia 

Anna Maria Strange, 

Morgantown 

Wisconsin 

Michael L. Johnson, 

Milwaukee 

Neal Schall Krokosky, 

Milwaukee

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For The Defense, February 2012 - DRI Today

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