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e-Discovery Costs and General Liability Coverage: Who Pays When the Rules Are Violated?
In today's litigation environment, particularly where lots of money is at stake, it seems that insurance coverage issues are always lurking in the background. These issues typically emerge where they are not expected and when there is no coverage in place to respond to the purported claim. See e.g., Port of Seattle v. Lexington Ins. Co., 48 P.3d 334 (Wash. Ct. App. 2002) (addressing and rejecting application of the 'sue and labor' clause in property policies to the recovery of expenses related to reprogramming computers in order to deal with the change to the Year 2000); GTE Corp. v. Allendale Mut. Ins. Co., 258 F.Supp.2d 364 (D.N.J. 2003) (same). See also Barry R. Ostrager & Thomas R. Newman, Handbook on Insurance Coverage Disputes '5.06[b] (12th ed. 2004).
Now come the new e-discovery amendments to the Federal Rules of Civil Procedure. See e.g., Fed. R. Civ. P. 16(b)(5) and (b)(6); 26(a)(1)(B), (b)(2)(B), (b)(5)(B), (f)(3), and (f)(4); 33(d); 34(a) and (b); 35; 37(f); and 45. What do these amendments have to do with general liability insurance coverage? After all, these amendments address the disclosure, preservation, and production of 'electronically stored information' in civil cases ' not substantive coverage law. But, it is not what the amendments procedurally mandate that implicates liability coverage. Instead, it's what happens when those procedures are violated.
Federal Rule of Civil Procedure 37 contains the mechanisms for enforcing the provisions of the discovery rules codified in the Federal Rules of Civil Procedure by imposing sanctions on violating parties. This includes enforcement of the new e-discovery amendments. Pursuant to Rule 37, the trial court is vested with the power to impose any sanction, or a combination of sanctions, on a party who: 1) fails to obey an order to permit or provide discovery; 2) fails to make the automatic disclosures under Rule 26(a); or 3) makes false or misleading disclosures, including spoliation of evidence. The specific categories of sanctions that may be imposed by a trial court include:
- Precluding the non-disclosing party from presenting at trial evidence not properly disclosed;
- Payment of reasonable expenses, including attorney and/or expert fees, caused by the failure;
- Informing the jury of the failure to make the disclosure, i.e., an adverse inference jury charge;
- Deeming certain matters established;
- Precluding the non-disclosing party from supporting or opposing designated claims or defenses;
- Striking pleadings or portions thereof;
- Staying the action pending proper disclosure;
- Dismissing or entering judgment as to part or all of the action; or
- Contempt of court.
See Steven Baicker-McKee, William M. Janssen, & John B. Corr, Federal Civil Rules Handbook 769-90 (WEST 2007), and cases cited therein.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?