This post is authored by Stacy Morris, a partner in LDM’s litigation department.
By Stacy Morris
Recently, we had written several blog posts about the expanding reach of the False Claims Act, and, in particular, of the whistleblower provisions which allow citizens to bring private actions against those suspected of making false or fraudulent claims to the government. The False Claims Act has become an increasingly hot topic over the past week following Oprah Winfrey’s widely anticipated interview of Lance Armstrong, in which he admitted to doping. Oprah’s interview happened to coincide with the government’s deadline to decide whether it wished to intervene in a False Claims Act lawsuit that had reportedly been filed in 2010 by Armstrong’s former teammate, Floyd Landis.
In his suit—which was required to be filed under seal—Landis reportedly alleges that Armstrong defrauded the government by accepting approximately $30 million in funds from his sponsor, the U.S. Postal Service, while violating the contractual prohibition against doping. The government was supposed to have through the end of last week to make its decision, but is believed to have requested an extension of time so that it can consider whether intervening would be in the best interests of the United States. Because of the mandatory treble damages provision in the False Claims Act, Armstrong face more than $90 million in damages, along with penalties for each false claim. Armstrong could try to mitigate damages by, for example, arguing that the Postal Service financially benefited from the arrangement, but any credit for such amounts would likely be applied only after the damages are tripled. Meanwhile, if the government intervenes in the case, Landis’ stands to receive between 15% and 25% of any recovery as a reward for bringing the fraud to the government’s attention. His potential recovery would increase to up to 30%, however, if the government decides not to join the case.
Forbes contributor, Erika Kelton, explains what is at stake for Armstrong—and Landis—in her article entitled: “The Whistleblower Lawsuit Against Lance Armstrong: What to Expect Next.”
This post is authored by Stacy Morris, a partner in LDM’s litigation department.
By Stacy Morris
In earlier posts, we had submitted a four-part series about the False Claim Act (“FCA”), and its ever-expanding reach in light of amendments that were passed as part of the Fraud Enforcement and Recovery Act (“FERA”) of 2009. The FCA generally prohibits making false or fraudulent statements to the government to get government funds. Since FERA, it has become less burdensome, in many respects, for the government to establish violations of the FCA. In False Claims Act Fraud Liability (Without the Fraud), a recent article by Joshua Buchman and Peter Schutzel, the authors focus on the “reverse false claim” provision of the FCA.
While the FCA is typically viewed as imposing potential liability against those who submit a false statement or record in an effort to obtain government funds, the “reverse false claim” provision is triggered when a recipient of government funds avoids an obligation to pay the government. This situation typically arises when a defendant receives an overpayment from a government program. Significantly, liability may attach regardless of why the overpayment was made. For instance, an overpayment resulting from a subtle change to the program rules could form the basis for a FCA lawsuit, as could an overpayment caused by a government clerk’s simple mathematical error.
FERA makes it less difficult to prove not just standard false claims cases, but reverse claims as well. Now, instead of having to prove a reverse claim by establishing that a false record or statement was provided to the government, as was required under the old provisions, it is enough for the plaintiff to show that a defendant’s decision to keep an overpayment was “knowing and improper.” What this term means is anyone’s guess since “improper” is not defined, but commentators have suggested that the term is likely be interpreted in a manner consistent with the FCA’s purpose of serving as a broad tool aimed at combating alleged fraud. We’ve all heard the story of the customer who goes to withdraw cash from the ATM, only to discover that the bank mistakenly deposited $100,000.00 into his account instead of $1,000.00. Under FERA, it is doubtful that the customer who then proceeds to withdraw the full $100,000.00 (justified, for example, by a claim that he assumed it was an inheritance from a long-lost, recently-passed uncle) will avoid liability since the customer likely knew of the overpayment and failed to return it.
The Creighton students presented well in three very close preliminary rounds. One of our students, Alyssa Jelinske, was presented the award for Best Direct Examination of her witness; portrayed by team member Adam Kuenning. She was selected for this award following the three preliminary rounds in which each of the 26 teams at the competition delivered at least two direct examinations in each of the three rounds.
All of the team members, Alyssa, Adam, Kara Stockdale and Scott Boyce, deserve to be congratulated for their dedication and hard work throughout the process. They devoted nearly every day for two months to developing their trial skills and substantive understanding of the law. As trial lawyers know, being in trial is a trying process (yes, the pun is intended). But the preparation for this competition has prepared these four, and others like them, for the “real life” rigors of trial work.
I am about a month into year seven (I think) of teaching a trial class for Creighton University School of Law. I enjoy the process but every year one of the most frustrating things for students is how long it takes to develop their case. As with many things, there is simply no substitute for experience. But last week I was reminded of one of my favorite quotes and shared it with the team.
“If you want me to give you two-hour presentation, I am ready today. If you want only a five-minute speech, it will take me two weeks to prepare.”
I used to use this quote when teaching Legal Writing. Along with its first cousin:
“I didn’t have time to write a short letter, so I wrote a long one instead.”
These can be used in many legal settings. Good product delivered by any medium takes time. In the legal setting most audiences (Judges, clients, jurors, colleagues, just about any audience you can conceive) want brevity. We are taught in legal writing to use the active voice and short sentences. The same holds true for trial work. Get to the point. Use words that matter. Say what you mean. Doing these things takes time. While the law of diminishing returns will set in eventually, that point is often farther away than most people think.
This post is authored by Cathy Trent-Vilim, a partner in LDM’s litigation department.
By Cathy Trent-Vilim:
The use of social media has become so prevalent that oftentimes users do not think through the consequences of their posts. In some instances, a social media misstep can be the beginning of the end of a promising career.
Take for instance Anya Cintron Stern, 31, a Miami-Dade public defender. She was defending her client, Fermin Recalde, who had been charged with murder in connection with the stabbing death of his girlfriend. During his trial, Recalde’s family brought him some clothes to wear during trial, including a pair of leopard-print underwear. Apparently amused by the family’s selection, Cintron Stern took a photo of the underwear while they were being quickly held up and inspected by a corrections officer. She then posted the photo on her personal Facebook page, along with a caption about “proper attire for trial.” Someone saw the post and notified the trial judge, who declared a mistrial. Cintron Stern was immediately fired.
Even more problematic than the underwear photo was Cintron Stern’s prior, albeit less publicized, Facebook posting that seemingly called her client’s innocence into question. So much for zealous advocacy.
Those of you reading this post are likely saying to yourself, “Duh. I would never do something like that.” Yet, in the day and age of Twitter, Facebook, YouTube, Pinterest, and any number of other social media outlets, it is sometimes difficult to keep the lines between our personal and professional lives from becoming blurred. In those instances, a post that was intended to be “personal” and “amongst friends” can detrimentally impact our work lives.
Of course, this does not mean that you are prohibited from using social media in a professional capacity. To the contrary, many firms have created their own Facebook pages for marketing purposes. However, if you are going to use social media, use it properly. Keep your personal Facebook posts about your personal life and make sure your work-related posts are professional.
Above all else, remember that whatever you post will be preserved for posterity and will follow you wherever you go.
Everyone, it seems, has heard of the word “hearsay.” Those of you lucky enough to be non-lawyers probably associate the word as meaning “something someone else said” or maybe even “gossip.” In fact, one on-line dictionary simply defines it as “information that you have heard without having any proof that it is true.” Well, in the law, the definition of hearsay is provided by the rules of evidence.
From that standpoint, hearsay is defined, under the federal rules and every jurisdiction in which I have practiced, as “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” Put a different way, hearsay is an out of court statement offered for the truth of the matter asserted. There are numerous exceptions to the rule prohibiting the admission of hearsay evidence (though exceptions and exclusions are different concepts. The law makes some things simply “not hearsay” rather than excepting something that is hearsay from the rule prohibiting it).
Lawyers (and yes, even Judges) often struggle with the rule and how to apply those numerous “exceptions.” But there is often an easy around the struggle. The first question you need to ask when eliciting an out of court statement is why you are offering the statement. If you are not offering the statement as proof that what was said is true then you do not have hearsay and the statement may be admitted. Start with that and you could save yourself a lot of headaches and time deciphering one of those 38 exceptions.
Mike said he was only gone for a minute.
If you are offering this statement to show that Mike really was only away for a minute then you are offering it for its truth and you may have hearsay problems. If you are offering the statement simply to show that Mike was able to speak then it does not matter what he said or whether it is true. This is not hearsay. But remember; if you say you are not offering the statement for its truth, you cannot then argue that the statement was true in your closing argument.
We know attorneys have an ethical obligation to their own clients for the safekeeping of property under Nebraska’s Rules of Profession Conduct. Neb.Rev.Stat. § 3-501.15. This often arises in the area of personal injury litigation. In fact, improper handling or usage of client monies often results in disbarment in the state of Nebraska.
It also appears Nebraska attorneys have an ethical obligation to protect the property of third parties whose interest may be contradictory to that of their client. Neb.Rev.Stat. § 3-501.15(d) and (e) provides some interesting language about an ethical duty owed by counsel to a party they do not represent. The language is as follows:
(d) Upon receiving funds or other property in which a client or a third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted by law or agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.
(e) When in the course of representation a lawyer is in possession of property in which two or more persons (one of who may be the lawyer) claim interests, the property shall be kept separate by the lawyer until the dispute is resolved. The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute.
The comments to § 3-501.15 go on to provide:
 Paragraph (e) also recognizes that third parties may have lawful claims against specific funds or other property in a lawyer’s custody, such as client ‘s creditor who has a lien on funds recovered in a personal injury action. A lawyer may have a duty under applicable law to protect such third-party claims against wrongful interference by the client. In such cases, when the third-party claim is not frivolous under applicable law, the lawyer must refuse to surrender the property to the client until the claims are resolved. A lawyer should not unilaterally assume to arbitrate a dispute between the client and the third party, but, when there are substantial grounds for dispute as to the person entitled to the funds, the lawyer may file an action to have a court resolve the dispute.
As noted above, Nebraska attorneys have an ethical obligation to protect the property of their clients. In my mind, the language of § 3-501.15 and the comment clearly establishes an ethical duty on the part of an attorney to determine the lawfulness of claims of third parties and then protects those interests. As an attorney who handles a fair amount of personal injury litigation from a defense perspective, I find this obligation comforting when it comes to issue of lien and subrogation interest resolution. As an attorney, I find obligation perplexing and confounding. Depending on how a contingent fee agreement is worded, personal injury attorneys are often compensated by how much money they secure for the client. This can be effected by the resolution of interests of third parties. As such, Nebraska personal injury attorneys just may have conflicting ethical obligations when it comes to client and third party funds. An ethical “Catch 22” to say the least.
In February, one of our blogs noted lawsuits being filed by laws students seeking damages due to law schools misrepresenting employment and salary data. This included suits against New York Law School and Thomas M. Cooley Law School . The claims raised by the suits appeared to be an uphill climb due to a few factors. First, the critical thinking and analysis required of a potential attorney. Second, the unforeseen effects of the economic decline in 2008. At least two courts have expressed some agreement with those conclusions.
In the action against New York Law School, Judge Melvin L. Schweitzer of the Supreme Court of the State of New York – New York County dismissed the students’ case. In doing so, the court wrote, in part, as follows:
Plaintiffs could not have reasonably relied on NYLS’s alleged misrepresentations, as alleged in their fraud and negligent misrepresentation claims, because they had ample information from additional sources and thus the opportunity to discover the then-existing employment prospects at each stage of their legal education through the exercise of reasonable due diligence.
Plaintiffs’ theory of damages, that is, an award of the difference between what they paid for their law degree and an amount representing its ostensibly lesser intrinsic worth because the degree has not suffered as an entrance ticket for the type of jobs plaintiffs hoped to obtain, is entirely too speculative and remote to be quantified as a remedy under the law. This is especially true here since there has been a supervening event, the 2008 Great Recession and its aftermath, which has reached havoc throughout the legal job market and upset the plans of most recent law graduates wherever they attended law school.
In the Thomas M. Cooley Law School action, Judge Gordon J. Quist of the United States District Court for the Western District of Michigan dismissed the students’ case. In doing so, the court concluded as follows:
The bottom line is that the statistics provided by Cooley and other law schools in a format required by the ABA were so vague and incomplete as to be meaningless and could not reasonably be relied upon. But, as put in the phrase we lawyers learn early in law school–caveat emptor.
There does not appear to have been an appeal of either ruling. Apparently, the concept of personal responsibility is still alive and well. Well, for lawyers and law students at the least.
As you may have heard, Apple is suing Samsung. There is no shortage of coverage of the daily happenings of trial including some very good technical analysis of the issues. Apple is alleging that Samsung stole its intellectual property. But one thing no one can steal is Conan O’Brien’s intellectual quirkiness. His spoof of the dispute is very funny:
This week, one development that was reported is the histrionics of a lawyer “begging” the judge to admit an item of evidence. One commentator on this issue (and others) analogizes it to “working the refs.” That age old tradition seems to be an accepted part of sports. In fact, some argue that it works wonders. How about in the legal world? Can lawyers (coaches) advocating for clients (players) “work” the Judges (refs) before whom they appear? One commentary suggests that while it may not garner any favorable results from the trial judge it could pay off in the event of appellate review. I’m not sure I agree with the view that such actions will carry much weight on appeal (or with the trial judge for that matter). It seems a bit to me like “strenuously objecting” with the exception that the Samsung event apparently was not in front of a jury:
Nonetheless, in the court of public opinion, displaying such a strong belief in the crucial nature of certain evidence could win over consumers which really may be the point.
This post is authored by Cathy Trent-Vilim, a partner in LDM’s litigation department.
By Cathy Trent-Vilim:
As a practicing litigation attorney, you have probably noticed the courts’ growing reliance on technology to manage litigation files, including the filing of court documents. Are you familiar with Nebraska’s rules for electronic court filing, Neb. Ct. R. §§ 6-401-419? If not, you might unwittingly be committing malpractice.
The potential downside of court-utilized technology recently came up in the “Smith” case. In Smith, the plaintiff had two years from the date of her alleged botched medical procedure to file suit. Exactly two years after the procedure, the plaintiff’s attorney attempted to electronically file (“e-file”) a complaint with the state district court. Unbeknownst to the attorney for several days, the filing was rejected. The defendant doctors moved for summary judgment on their statute of limitations defense.
In opposing the motion, the plaintiff produced a Filing Submission Receipt showing that her attorney had in fact attempted to file the initial complaint at 4:49 P.M. on the two year anniversary (a Friday). The following Monday, however, the plaintiff’s attorney received the rejection notice. The original submission had not been accepted because it was filed in Word format instead of as a .pdf document. According to the plaintiff’s attorney, the firm set up its e-filing account on the very day it attempted the original submission and was unaware of the e-filing formatting requirements.
Nebraska’s e-filing rules do permit courts to give attorneys a reprieve in certain technology-related circumstances. However, they also expressly provide that
. . . no order may be entered under this rule which expands the statutory time period for commencing an action or perfecting an appeal unless there is an affirmative showing that the failure to make a timely filing was due solely to an E-Filing System internal transmission error or a processing error by the court clerk.
Neb. Ct. R. § 6-414 (2008). Since the e-filing failure stemmed from user error, and not a problem with the e-filing system or a failure by the court clerk, the rules prohibited the court from expanding the limitations period by back-dating the correctly-filed complaint. As a result, the plaintiff’s claim was time-barred; and her attorney may be finding himself on the receiving end of a malpractice claim.
Smith serves as a useful reminder on several fronts:
NEVER – and I mean never – wait until the last minute to initiate a new lawsuit;
If you are in a time-crunch, be careful about using a new technology for the first time;
When using new technology, check for online resources to help you use it; and
Take time periodically to review the procedural rules and local court rules for new rules or changes to existing rules.
Whether we like it or not, courts’ use of technology is here to stay. As a result, attorneys need to be as vigilant in staying abreast of changes in technology as we are in staying updated on substantive changes in the law. If not, we do so at our own peril.
The Nebraska Litigation & Trial Advisor provides commentary on legal issues important to Midwest businesses and their owners. .