Articles Posted in Pretrial Practice and Civil Procedure

If you look up “deposition” on YouTube, you’ll likely find over 200,000 videos to choose from. Many include graphics and commentary that the uploader added after the deposition was taken, usually with the aim of mocking the witness being deposed. The purpose of the discovery process is to require witnesses and corporations in possession of information potentially relevant to a case to divulge information to the requesting party for the purpose of assisting in the preparation of a litigated dispute for trial. Depositions are a specific form of discovery designed to allow litigants to obtain sworn testimony from witnesses in advance of the trial date and to get that testimony in a video format suitable for presenting to a jury. With the soaring popularity of video-sharing social-media sites, the temptation can be great to humiliate your opponent in litigation by posting embarrassing video depositions (or other discovery responses) on Facebook or YouTube, either during the pendency of the litigation or after it has ended. Is this permissible in Virginia?

There are authorities coming out on both sides of this question. On the one hand, “pretrial depositions and interrogatories are not public components of a civil trial.” (See Seattle Times Co. v. Rhinehart, 467 U.S. 20, 33 (1984)). Thus, while the public generally has a common law right of access to court orders and legal proceedings, information collected through discovery is not a matter of public record to which that right extends. In other words, regardless how entertaining it might be to watch a celebrity make a fool of himself at a deposition, it’s really nobody’s business outside of the confines of the court proceeding. On the other hand, dissemination of pretrial discovery materials by the receiving party is not automatically prohibited absent a protective order.

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Suppose you find yourself involved in litigation in Fairfax County, Virginia, and you want the court to take some kind of action. Perhaps you want the judge to order the plaintiff to attach a copy of the contract to the complaint. Maybe it’s a libel case and you want to ask to court to dismiss the case for failing to plead the requisite elements of defamation. Or maybe the statute of limitations has passed and you want the court to dismiss the case for that reason. If you want the court to do something, you need to file a motion. And the procedures for bringing that motion to the attention of the court differ from county to county.

This article deals with the local rules in Fairfax County only. (Technically, they’re not “rules,” but “guidelines.”) Procedures in neighboring jurisdictions like Loudoun County, Prince William County, and Alexandria differ slightly but share most of the basic framework. If there is sufficient interest among the subscribers to this blog, I may cover those jurisdictions in future posts. This is also not a tutorial about how to draft persuasive motions. Rather, it is intended as a guide to the procedural considerations in bringing your motion before the court. Of course, if you are an out-of-state attorney representing a client with a pending case in Fairfax County, your best best is to retain and work with local counsel.

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Legal claims are made up of elements. To sue somebody and win, you need to allege and eventually prove each element that makes up the legal theory on which you’re suing. And oftentimes, those elements have distinct legal meanings that differ from their dictionary definitions. Failure to pay close attention to the requirements of each separate element can result in dismissal of the case before it even gets started. Last month, a Virginia court summarily dismissed an IT consulting company’s claims for tortious interference for failing to allege the facts necessary to support such claims.

The case–Forsythe Global, LLC v. QStride, Inc.–was decided under Michigan law. Michigan, like Virginia, recognizes separate torts for tortious interference with contract, and tortious interference with prospective business relationships or expectancies. Under both the law of Michigan and the law of Virginia, tortious interference requires more than mere “involvement in the activities and concerns of other people when your involvement is not wanted.” (See Merriam-Webster’s definition of interference). There’s no law that requires people to mind their own business. To prevail in court, the interference must approach a specific threshold–meddling in other people’s affairs won’t satisfy the claim if the interference does not reach this level.

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Much has been made of the latest amendments to the Federal Rules of Civil Procedure, effective December 1, 2015, some going so far as to call them “the most significant change to federal civil practice in the last decade.” In particular, Rule 26 has been amended to include a new “proportionality” provision. Rule 26(b)(1) now limits discovery to “any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case,” apparently imposing an enormous limitation on the scope of permissible discovery.

The concept of proportionality, however, is nothing new. Even before the 2015 Amendments, Rule 26 provided that discovery should be limited if it “is unduly burdensome or expensive, taking into account the needs of the case, the amount in controversy, limitations on the parties’ resources, and the importance of the issues at stake in the litigation.” The Eastern District of Virginia recently had a chance to grapple with the new rule in a defamation case, and the implication of the court’s holding is essentially that not much has changed, but that litigants and the court should pay a little extra attention to proportionality as they deal with discovery issues.

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This isn’t what I was taught in law school 20 years ago, but res judicata comes in many flavors. I was taught that there were only two doctrines relating to re-litigating civil claims: claim preclusion, known as res judicata, and issue preclusion, known as collateral estoppel. That’s wrong, at least here in Virginia. In an opinion published earlier today by the Virginia Supreme Court, the court describes in detail how there are actually four different types of res judicata: two types of claim preclusion (“bar” and “merger”) and two types of issue preclusion (“direct estoppel” and “collateral estoppel”). All four of these concepts fall under the res judicata umbrella.

The case is Paul Lee v. Lisa Spoden, originally filed in Fairfax County Circuit Court. Lee formed Strategic Health Care Company, Inc. (“SHC”), a consulting company providing services to healthcare organizations and professionals, in 1994, and gave Spoden (his wife–or maybe fiancee–at the time) a 50% ownership interest the following year. When they divorced in 2009, the parties entered into an agreement in which Spoden agreed to give up her 50% interest in exchange for a number of things, including the right to “direct use” of certain real estate owned by the company, and to receive all proceeds when the property was sold. In 2013, Spoden filed an action against Lee for breach of contract and breach of fiduciary duty, claiming that he had listed the property for sale without her knowledge or permission and that he had violated various other provisions of the property settlement agreement, which was incorporated (but not merged) into the final divorce decree.
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Derivative actions are a mainstay of modern business litigation. They allow a shareholder of a corporation to enforce a right the corporation has but is wrongfully refusing to enforce. Normally, corporate management would be responsible for deciding whether to pursue litigation against someone, but sometimes it’s the management itself–such as an officer or director–that is causing the problem. In such situations, the board of directors may be reluctant to initiate a lawsuit against one of their own, so allowing a shareholder to bring the suit in the name of the corporation can be the only practical way to protect the interests of the corporation. Still, derivative suits are considered an extraordinary procedural device, permitted only when it is clear that the corporation will not act to enforce its rights. The pleading requirements are laid out in Federal Rule of Civil Procedure 23.1.

Because it’s normally up to the board of directors to decide whether to pursue litigation in the interest of the corporation or shareholders, it’s necessary to plead both the plaintiff’s demand on the corporation and the corporation’s refusal to comply. Under Rule 23.1, any complaint purporting to be a derivative action must state with particularity (a) any effort by the plaintiff to obtain the desired action from the directors or comparable authority and, if necessary, from the shareholders or members; and (b) the reasons for not obtaining the action or not making the effort. The reason for this requirement is that derivative suits may proceed only if the shareholder shows that the board’s refusal was wrongful. If the board’s refusal to pursue litigation is justified, there will not be grounds for a derivative action.
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Back in 2012, the Alexandria Circuit Court ruled in an Internet defamation case that discovery could be obtained from a nonresident third party by serving a subpoena on the company’s registered agent in Virginia. That decision was reversed last week by the Virginia Supreme Court in an unambiguous ruling that is going to force a lot of Virginia attorneys to make greater use of the Uniform Interstate Depositions and Discovery Act.

I had been following this case–Yelp, Inc. v. Hadeed Carpet Cleaning, Inc.–over the past few years with great interest, not because of the subpoena-power issue, but because the case involved some fascinating First Amendment issues and promised to offer some guidance on the correct application of Virginia’s “unmasking” statute, Section 8.01-407.1. For example, would an interactive computer service like Yelp have standing to object to complying with an enforceable subpoena by invoking the First Amendment rights of its users? Does a plaintiff need to produce evidence to meet 8.01-407.1’s “showing” requirement or can it make the required showing merely by by alleging a prima facie cause of action for defamation? In a case involving online negative reviews phrased as non-actionable statements of opinion but written anonymously by competitors hiding behind a pseudonym, how can a plaintiff demonstrate falsity (i.e., that the reviewer was not an actual customer) without an opportunity to use discovery to ascertain the poster’s true identity? The justices showed keen interest in questions like these at oral argument, but ultimately decided to save addressing them for another day.
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What is a nonsuit? Simply stated, a nonsuit is a voluntary withdrawal or dismissal of a lawsuit by the party that filed it that allows the party to bring a second suit on the same cause of action. (See Va. Code § 8.01-380). It results in a termination of the case “without prejudice,” leaving open the possibility that the plaintiff will bring the same claims a second time. Litigators from other states are often surprised to hear about this Virginia procedural device, as it arguably gives plaintiffs an enormous tactical advantage. If you’re a lawyer admitted pro hac vice to a Virginia state court, this blog post is for you.

Plaintiffs in civil litigation get one “free” nonsuit. This means that, subject to the exceptions described below, the first time a plaintiff moves for a nonsuit with respect to a defendant or cause of action, the court must grant it, no questions asked. Plaintiffs do not need to explain their reasons for wanting to nonsuit. Don’t like the way a juror looked at you? Go ahead and nonsuit if you feel strongly enough about it. It doesn’t even matter if the case was previously in federal court and voluntarily dismissed; you’re entitled to one nonsuit in Virginia state court. The second time the case is brought, it may still be possible to nonsuit, but this time the judge will have discretion to grant or deny your motion. You can also nonsuit a second time if the defendant has no objection (which is often the case as defendants tend to be eager for litigation to end).
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Suppose you’re a senior executive at a company that regularly transacts large volumes of business with another company, when the wife of the other company’s CEO files what you believe to be an unwarranted sexual harassment lawsuit against your company, presumably with the consent or approval of her husband. I suspect many would assume that you would have the right to cease doing business with that company due to the strain on the relationship caused by the wife’s lawsuit. Shouldn’t you have the right to decide for yourself which companies deserve your business? Well, be careful. In an opinion written by Eastern District of Virginia Judge James C. Cacheris last month, the court found that allegations like these were sufficient to state a claim for tortious interference with contract under Virginia law.

Tortious interference is a legal theory that requires a plaintiff to allege (and eventually prove) the following elements: (1) the existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of the interferor; (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (4) resultant damage to the party whose relationship or expectancy has been disrupted. If the contract is “at will,” such as the typical employment contract that either party is free to terminate at any time, it must also be proven that the defendant employed “improper methods.” After the case of Stephen M. Stradtman v. Republic Services, Inc., it would appear that “business retaliation” can qualify as the required “improper method” to support a tortious interference claim.
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A common strategy for plaintiffs wishing to avoid federal court is to ensure at least one of the defendants is non-diverse. In theory at least, this would preclude the defendants from removing a case based on state-law claims from Virginia circuit court to federal court. In a ruling issued earlier this month, Judge Kiser of the Western District of Virginia clarified that this strategy will not always be effective: if the joinder of the non-diverse defendant is found to be fraudulent, the citizenship of that party will be disregarded for the purpose of analyzing whether subject-matter jurisdiction exists.

Federal courts have subject-matter jurisdiction primarily in two situations: where a federal question is raised, and where “complete diversity” exists. Complete diversity refers to a situation where no plaintiff resides in the same state as any defendant, and the amount in controversy exceeds $75,000. (See 28 U.S.C. § 1332(a)). If any defendant resides in the same state as any plaintiff, complete diversity is lacking and the court would lack jurisdiction to decide the case. So if Company A wants to sue Company B for breach of contract (a claim that does not involve a federal question) in state court, but the two companies are citizens of different states and the amount in dispute exceeds $75,000, Company A might be tempted to add a second defendant (such as an employee of Company B) who resides in the same state as Company A, simply for the purpose of destroying any basis for federal-court jurisdiction.
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