The Art of Advocacy

Reuben Guttman Articles, Whistleblower Articles, Whistleblower News, Whistleblowers Blog

Judges are now insisting that plaintiffs make their case with facts instead of merely putting their clients on notice of a claim.

When the United States Supreme Court issued its decisions in Bell Atlantic Corp v Twombly, 550 U.S. 544 (2007) and Aschroft v Iqbal , 556 U.S. 662 (2009), there was sea change in the standard by which judges evaluated lawsuits to determine their sufficiency to withstand a motion to dismiss.  Rather than merely placing a defendant on notice of a claim, the Court established a new standard.  Plaintiffs must allege facts allowing a court to find that a claim is plausible.  In reviewing the allegations of the complaint, courts are challenged to weed out conclusory statements and base their analysis on only the factual pleadings of the Complaint.

Naturally, Iqbal and Twombly have raised serious access to justice issues for plaintiffs who must muster the facts without an opportunity to gather evidence through discovery.  The “plausibility” standard is of course entirely subjective; what is plausible to one judge based on his or her life’s journeys may not be plausible to another.  And with the challenge to plead facts, plaintiffs are undoubtedly encouraged to put the “kitchen sink” into their complaints and plead complaints that are exponentially larger than those of yesteryear.

With all of the problems caused by Iqbal and Twombly, there is a nugget of gold that can be snatched as a teaching lesson.  The notion that litigants are instructed to make their cases based on facts and not conclusions or hyperbole, is a solid concept.

The question of what is a fact and what is a conclusion is of course a lesson that lawyers must understand.  In one of my classes at Emory Law School, I asked the students to outline the good facts and bad facts for a case involving assault and robbery. A student raised his hand noting that a good fact for the Defendant is “he has an alibi.”  I turned to the student and said, “Are you telling me a fact or are you giving me a conclusion?”  The student looked at me.  I said, “unpack what you just told me in terms of the evidence, or facts, that support the alibi.” The student then began to tell me about a witness who saw the defendant at a theater performance at the time of the alleged incident; theater tickets found in the defendant’s wallet; and a receipt from a theater vendor which had the time and date stamp on it.  Of course these are three very powerful facts – often hard to dispute – which are more compelling than merely stating the conclusion that an alibi exists.

In two weeks, I will again be teaching second year students trial advocacy at Emory Law School.  It is hard to explain the difference between facts and conclusions but I give them this example which, in past years, they seem to remember.

Several years ago, a seven year old girl who is the daughter of a trial lawyer, said to her father: “I hate my little brother, no one likes him, he is extremely difficult and we need to trade him in for a new brother.”  The father said, “Sweetie, haven’t I told you to make your arguments with facts and not conclusions or hyperbole?”  The daughter said, “Yes, I remember Daddy; I will start over. Here is a photo of your BMW and the can of spray paint used to redecorate it.  Here is a photo of our dog Spot tied up in your Versace Neck Ties and I have here a photo of your 80 inch Samsung TV set and the baseball that went through the screen; I also have here an essay the little fellow wrote for school which discusses his contemporary art projects. Finally, Daddy, here is a study by a prominent Harvard Psychologist who says that parents do well to act early and trade in ill-behaved children.” The father responded: “I understand.  Say no more.  The little fellow is history.”

Advocacy is a two way street

Reuben Guttman Articles, Whistleblower News, Whistleblowers Blog

Young lawyers learning about advocacy need to understand how judges think if they are to master the skill, says Reuben Guttman.

Young advocates or trial lawyers often labour under the conception that communication is a one size fits all effort.  Be smooth, don’t be nervous, be flamboyant, and engage in fanfare.  Really?  For my trial advocacy students at Emory Law School, this is sometimes their vision of a trial lawyer.  Yet advocacy is a two way street.  Before an advocate formulates the content and form of his or her message, the most important question to ask is “Who is receiving the message?” Advocates, or trial lawyers, are teachers.  Judges and juries are their students.  How does the trial lawyer, as a teacher, deliver a message that resonates with each particular student?

Insight

Last year at Emory Law School,  I convened a panel of four judges with the hope of giving students an insight into their lives.  It was enlightening for the students to learn that these judges had dockets ranging from a couple hundred to several thousand cases.  The students learned that these judges were tasked with deciding matters that they had never studied in law school.  Their support ranged from one to several law clerks and the law clerks themselves were all recent law school graduates.  This group of judges ranged from civil cases to criminal matters with divorces, large scale securities class actions, business disputes, discrimination cases, and maritime matters in the mix.

Breaking the monotony

There is a saying that justice is blind.  And of course there is a perception that judges are powerful – which they of course are – and that they know everything.  While sitting in federal court a couple of weeks ago, I was watching a judge hear a dozen motions before it was my turn to argue. He was jovial.  He was witty. He engaged the litigants with humour.  I liked him. I had seen this behavior before with jurists.  I realised of course that some judges usually do this to break the monotony of the job.  They are human beings.  As I sat and watched this particular judge, I thought about him sitting high on his bench in a courtroom with 35 foot ceilings and the walls adorned with paintings of judges who had preceded him. I thought about why the US government spends so much on these ornate courtrooms.  I realised that without these accoutrements, judges would seem like mere mortals.  And of course, the proceeding itself would not be cloaked in the same solemnity.

Lifetime experiences

For the advocate, it is important to understand that at the end of the day, their messages will be evaluated by humans; whether they are judges or jurists.  They will have lifetime experiences, families that they go home to, perhaps pets that they feed, and like other humans, they will have had their successes and failures.  They will have fears and concerns.

If there is a takeaway from all of this, it is that advocacy is a two way street.  What you may think is the right message, or form of message to deliver to the decision maker, may not necessarily be the one that resonates.  What you may think is the right style may not be appropriate for a particular audience.  This is just something to think about; communication is a two way street.

Tort Reform: A Lion in Sheep’s Clothing

Reuben Guttman Articles, Whistleblower News, Whistleblowers Blog

Tort reformers cite a range of cases as frivolous litigation. But, says Reuben Guttman, many of these lawsuits raise fundamental issues.

The United States Chamber of Commerce, a few academics and some media pundits have their lists of cases arguably supporting the proposition that people will sue over anything and hence the need for tort reform to prevent so called ‘frivolous litigation.’  Out of the countless number of cases filed each year in United States federal and state courts, the tort reformers love to harp on the suit brought by the woman against McDonalds for serving hot coffee and the class action now pending against Subway for allegedly misrepresenting the size of its advertised foot-long sandwiches.

Golden oldies

Since the tort reformers seem to keep dwelling on the same few cases, it might be worth mentioning a few oldies but goodies which have eluded their attention. First, there is the “classroom kick case” where an elementary school child was sued for kicking another student on the knee.  This heinous event occurred in a classroom. The court allowed the case to go forward, holding that if the offending kicker had made his offensive contact on the playground, the kick might have been permissible.

Then there is the “falling scale case” involving a man on a railroad platform; running to jump on a train, he was pulled on board by a conductor.  Struggling to board the moving rail car, the man dropped a package containing fireworks; the fireworks exploded, knocking a scale down at the end of the platform.  The scale fell on another man who sued the railroad!

Finally, there is the case brought by parents who allowed their child to play on railroad tracks.  The child wandered onto a railyard and was injured by a turntable used to reposition rail cars.  The parents sued the railroad!

These are real cases; Vosberg v. Putney, 80 Wis. 523 (Wisc. 1891), Palsgraf v. Long Island Railroad, 248 N.Y. 339 (N.Y. 1928) and Sioux City & Pacific Railroad Co. v. Stout, 84 U.S. 657 (1873).  The thing is that they are not new.  I found them in a casebook on torts belonging to my dad.  While the casebook was published in 1934, I too had studied them in law school.  Back in law school, I actually read a lot of cases that made me wonder why courts spend so much time on matters that are small or that by some lights should not exist at all. Yet from seemingly small cases, judges have for years extrapolated important legal doctrine. The holding and dissent in Palsgraf, written by Justices Cardozo and Andrews respectively, are well studied and cited works. These writings are at the heart of the common law of negligence.  The doctrine of “attractive nuisance,” or at least variations of it, flow from Stout and similar cases.

It is cases like Vosberg, Palsgraf and Stout —  actually landmark decisions studied for decades by laws students —  that today’s tort reformers might cite in support of their claim that frivolous litigation clogs the courts and burdens business. Yet it is these matters – cases with simple sets of facts – that allow judges to articulate important rules that can be applied to weightier cases.

The lion and the zoo

In his closing argument to the jury in Silkwood v. Kerr McGee, 464 U.S. 238 (1984), lawyer Gerry Spence talks about the case in “Old England” where the lion escaped from the zoo and the zoo was responsible for the damage caused by the lion even if it exercised due care in caging the animal.  Of course the Silkwoodcase involved the escape of plutonium from a Kerr McGee plant.  From the simple case of the lion, Spence explains the law of strict liability, telling the jury “if the lion got away, Kerr McGee must pay.”

The truth is that the common law is replete with small cases; some that others would never bring; some that tort reformers might argue are completely frivolous and some that appear at the time to be small yet provide critical insight into the application of the rule of law and the expectation for compliance.  And so do we really want to be in the business of telling that family whose kid was kicked in the knee that there is no place for that suit in a court of law?

Now, about the cases involving coffee and that other one about the foot-long Subway sandwich?  Well, it turns out that the woman who brought suit against McDonald’s sustained serious burns when a scalding cup of coffee, purchased at a drive-in, spilled on her lap.  And, while the tort reformers may consider her case frivolous, have you ever noticed that most coffee shops now check the temperature of their coffee before serving it?

Fundamental issues

I reached out to the lawyer who is bringing that foot-long Subway sandwich case.  He asked me what the difference was between a fast food enterprise serving a smaller quantity than advertised and a bank charging each depositor a few extra cents in interest each month?   Small damages for each consumer?  Perhaps.  Large damages across the board for a class?  Undoubtedly.  But does the case raise fundamental and perhaps important issues about truth in advertising which may create precedent for more weighty matters?  Absolutely.  And this is what our common law tradition is all about.

For more insight into the Tort Reform movement, I recommend this video, Debate on Tort Reform After Viewing of Documentary ‘Hot Coffee’

“Hot Coffee” is an HBO documentary about the Tort Reform Movement and who is really behind it.  More information and the trailer is available here.

Arbitrary application of law in a global economy

Reuben Guttman Articles, Whistleblower News

by Reuben A. Guttman. Guttman practices law with Guttman, Buschner & Brooks PLLC 

There are more than 3,000 drug trials being conducted in China. Indeed, data from these trials is almost certain to find its way into applications filed back in the United States with the Food and Drug Administration.

Do large drug companies – which trade on U.S. domestic securities exchanges – accurately report complete information about drug trials conducted in China? Or do language barriers and cultural differences make it difficult – if not impossible – to secure unbiased results from these trials? Understanding that concepts imbedded in the western rule of law, including “conflict of interest,” “kick back,” and “independence,” may have different meanings elsewhere is crucial to understanding the magnitude of the problem, and we have no way of answering these questions with complete certainty.

The scary part is that our regulators – including the SEC, the FDA and the EPA – are so woefully understaffed that they lack the resources to fully enforce compliance in the United States, let alone on a global scale.

In a global economy, understanding and investigating conduct abroad is essential to domestic compliance enforcement. But triple the staff of domestic compliance enforcement agencies, and there still would not be enough government officials to enforce compliance in a global economy.

The truth is that since the founding of our republic, we have recognized that compliance enforcement cannot be left solely in the hands of government regulators. Compliance with our most fundamental constitutional protections, including the landmark decisions in Brown v Board of Education and New York Times v. Sullivan, have been accomplished through private party litigation — not government enforcement actions.
Our environmental, antitrust, and civil rights laws have specific provisions allowing private citizens to bring enforcement actions. Our laws are constructed this way because we as a nation understand that substantive law absent an ability to enforce compliance is meaningless. To have an enumerated right or privilege that cannot be protected or secured is the same as having no right or privilege at all. To ensure compliance enforcement, we have created mechanisms that leverage our abilities so that culprits understand that being caught and sanctioned is more than a mere theoretical possibility.  Indeed, Congress has passed laws, including the False Claims Act and the Dodd-Frank Act, that reward whistleblowers who bring to the government information about conduct that causes the wrongful payment of government monies and that lead to a recovery.
These laws tap the technical, cultural, and even language expertise of whistleblowers on both a domestic and global scale. In 2001, a German citizen named Kurt Bunk brought suit under the False Claims Act in a federal court in Virginia against freight companies engaging in a conspiracy – conceived in Europe – to elevate the cost of shipping services sold to the U.S. military.  The case resulted in the recovery of millions of dollars to the U.S. Treasury.  While not a U.S. citizen, Bunk’s expertise in the shipping industry, his knowledge of the German language, his ability to review thousands of documents written in German, and his account of facts necessary to prove the wrongful conduct were essential to a domestic compliance effort.

It would seem obvious that individuals who participate in compliance enforcement that benefits U.S. citizens or U.S. regulatory agencies should minimally receive protection in our courts. At a time when our State Department spends millions of dollars abroad extolling the virtues of U.S. “rule of law,” it would be ironic that a foreign citizen who aids in the enforcement of our laws would not be extended protection by our courts against retaliation. Yet, that is exactly what happened recently to Liu Meng-Lin, a citizen of Taiwan and a compliance officer for the healthcare division of Siemens China, Ltd.
According to a lawsuit Liu filed in a New York federal court, he discovered that Siemens employees were indirectly making improper payments to officials in North Korea and China in connection with the sale of medical equipment to those countries. Liu complained internally, and was terminated, whereupon he reported to the SEC that Siemens had violated the Foreign Corrupt Practices Act – an Act that prohibits companies that trade stock on U.S. exchanges from making payments to foreign officials to secure business. Liu also alleged that Siemens had violated Dodd Frank’s anti-retaliation provisions.
The federal court dismissed Liu’s case, and the U.S. Court of Appeals for the Second Circuit recently sustained that decision, refusing “extraterritorial” enforcement of the Dodd Frank anti-retaliation proscriptions. The Second Circuit found it of no consequence that Siemens trades its stock on U.S. exchanges – and presumably to U.S. purchasers – or that Liu may be entitled to a bounty from the SEC if the agency successfully pursues Siemens for FCPA violations.  The Court justified its holding by maintaining that there is a presumption against extraterritorial application of a law where there is no clear congressional intent to do so.
Really? In a global economy where the court conceded that Liu might actually be entitled to a monetary award from the SEC?
There’s another irony: At a time when large corporations through the U.S. Chamber of Commerce are maintaining that whistleblowers should report their grievances to internal compliance personnel before going to regulatory bodies, a big publicly traded company has established – at least in one court – that foreigners have no rights of redress in U.S. courts if their internal disclosure results in retaliation.

Regardless of whether the Second Circuit is correct in its analysis, its decision is a blow to whistleblower programs essential to enforcement of laws that, at the very least, protect those who reside within our domestic boundaries.  If the Second Circuit is correct that Congress was not clear in its intent to protect foreigners who help in the enforcement of domestic laws, it is time for Congress to speak up.

Do We Really Trust Corporations To Investigate Their Own Profitable Impropriety?

Reuben Guttman Articles, Whistleblower News

by Reuben A. Guttman. Guttman practices law with Guttman, Buschner & Brooks PLLC.

Can a corporation really investigate its own behavior? Do internal compliance programs really work, or does their mere existence give well-compensated employees plausible rationale not to question conduct that would otherwise be questionable?

Answering these questions must begin with the age-old concern about conflicts of interest. The Book of Matthew counsels that “no man can serve two masters.” Our democracy itself is founded out of concern for the evils of self-interest, a form of conflict of interest. We abandoned a monarchy in favor of elected officials and then, fearing their self-interest, we created a system of checks and balances.

As our democracy emerged, scrutiny of conflicts of interest that might taint decision making – or at least the decision itself – has become ingrained in our processes. Corporations that are engaged in litigation must file disclosure statements identifying their affiliated entities so that judges can disqualify themselves – or be subject to disqualification – where they perhaps maintain a stock ownership interest associated with a litigant. Attorneys are schooled early on about the pitfalls of bringing a client into a business deal where the attorney has an interest. When our labor laws were promulgated in 1935, there were proscriptions against company dominated unions. Why? Because an employer has an inherent conflict of interest between steering a course toward maximizing shareholder returns and maximizing employee pay and benefits.

Given that the concern about conflicts of interest is so ingrained in our way of thinking, rejection of proposals to allow corporations to investigate themselves as a predicate to government regulatory agency involvement should be logical. Can we count on a corporation to investigate itself, to fully and accurately disclose its conduct so that victims may take recourse, and at the same time take action to prevent recurring wrongdoing – all of which may cause the business to lose money? And if a corporation were able to fulfill these tasks, would the reported result have sufficient integrity to withstand public scrutiny? Do we really trust the reports of corporations that investigate their own improprieties?

Representatives of the U.S. Chamber of Commerce – actually not just mere representatives, but lawyers supposedly versed in the doctrine of conflicts of interest – recently testified before a U.S. House of Representatives Oversight Committee that whistleblowers ready to pursue relief under the False Claims Act should be incentivized or required to allow a corporation to investigate its own alleged wrongful conduct before any concern is raised to an independent government authority.

The False Claims Act – dating back to 1864 – allows private citizens to bring suit on behalf of the United States Government where they have knowledge that wrongful or fraudulent conduct has caused the expenditure of government monies. Civil penalties under the statute may also be assessed when a “false claim” for payment “is submitted or caused to be submitted.” All cases filed under the False Claims Act are filed under seal allowing the government to investigate the case before public litigation actually proceeds. Sometimes civil litigation initiated by whistleblowers under the False Claims Act has resulted in parallel criminal proceedings. Examples include cases against Pfizer, GlaxoSmithKline, and Abbott Laboratories. Civil and criminal sanctions exceeding $6 billion in total were imposed against these companies for unlawfully marketing drugs that caused the expenditure of Medicare/Medicaid dollars. And in each of these cases the defendants or their subsidiaries pleaded guilty to a criminal infraction because – as the plea agreements made clear – they were guilty.

Each of these companies had internal compliance programs, and yet in each case the wrongful conduct was pervasive, brought billions of dollars of revenue to the Defendant, and persisted for years. These are not isolated examples. Enron, Tyco, and WorldCom all had internal compliance programs that proved incapable of addressing pervasive and, at least initially, profitable wrongdoing.

Where wrongful conduct actually results in increased revenue that rewards corporate officers and employees, is it plausible that a corporation’s internal compliance mechanism can freely and fully investigate and right wrongful behavior? Do corporations, and those individuals that guide them, really have an incentive to fully address wrongful conduct that generates significant revenue? These are important questions particularly at a time when civil and criminal penalties are merely part of the cost of doing business; they are as much “a part of the game” as is a calculated tripping penalty in an ice hockey contest where a goal is imminent. The truth is that even after Pfizer, GSK, and Abbott collectively paid billions of dollars to settle charges of unlawful marketing, these pharmaceutical giants still walked away with billions of dollars in profits from their unlawful conduct. Even the public announcement of settlements and guilty pleas had little or no impact on their market capitalization!

The point is that companies and corporate officials that make money off of wrongful conduct have a conflict of interest when it comes to self-investigation of profitable impropriety. There is a real danger – and not just an economic one – in requiring whistleblowers to utilize internal compliance reporting mechanisms before voicing concerns to independent government regulators. In the False Claims cases against Pfizer, GSK and Abbott, the underlying allegations involved marketing derelictions that potentially placed patients in harm’s way or perhaps even caused personal injury or death. Do we really want to encourage matters of health and safety to be kept from independent government regulators and perhaps injured victims? Do we really a trust a company that placed revenue over patient safety to investigate its own impropriety and come clean?

If internal compliance programs are not effective in addressing pervasive wrong doing, the question remains as to whether they are – at worst – merely benign. Should we be legitimately concerned that the existence of these programs may cause employees not to question corporate behavior? In the cases involving Pfizer, GSK, and Abbott, the alleged wrongful conduct was not any secret to the hundreds of sales representatives who dallied from doctor to doctor hawking drugs. Yet only a few insiders stepped forward to blow the whistle. Did there exist corporate cultures leading employees to believe that giant corporations with internal rules and compliance programs could do no wrong? Why, for example, in the case General Motors’ faulty ignition switches, did the revelation of the wrongdoing not come from a GM employee but from an outside expert working for a plaintiff’s lawyer?

While these are all important questions, their answer is perhaps age-old and embedded in biblical wisdom. Unfortunately creating the illusion that a corporation can investigate its own alleged impropriety may very well lull the diligence of those who would otherwise raise concern.

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