You can find plenty of commentary on whether the Ninth Circuit Court of Appeals ruled correctly when it upheld a jury verdict that “Blurred Lines” infringed the copyright in “Got To Give It Up.” But another aspect of this decision has received little attention, and that is a mistake made by trial counsel for the Williams/Thicke defendants in this case.
One of the things that keeps lawyers awake at night (or should) is the risk that they will unknowingly waive a client’s legal rights. I wrote about this in 2008 (Traps for the Unwary – Waiver), and again in 2010 (Mister Softee Bitten By Waiver Under FRCP 50 ). In the 2010 post I observed that Microsoft’s failure to move for judgment as a matter of law (“JMOL” in legal jargon) under Rule 50 may have cost it several hundred million dollars.
The bottom line is that lawyers always need to be alert to the risk of a waiver.
When it comes to waivers during trial, one of the biggest mistakes a lawyer can make is to fail to move for JMOL before jury deliberations, and to then timely renew that motion after trial if the jury verdict makes it necessary. Failure to make these motions puts a losing party at a significant disadvantage on appeal: the party will be precluded from challenging the sufficiency of the evidence supporting the verdict.
This was the error in the Microsoft case, and it occurred once again in Gaye v. Williams. This was a high profile case, and it would be reasonable to expect the lawyers for Williams and Gaye (and their publisher) to avoid this mistake. The Ninth Circuit addressed their failure to file Rule 50 motions as follows:
The Thicke Parties . . . failed to make a Rule 50(a) motion for judgment as a matter of law at trial. Their failure to do so “precludes consideration of a Rule 50(b) motion for judgment as a matter of law.”
This procedural limitation is well worth underscoring. We held, in a case in which a party made an oral Rule 50(a) motion, but failed to renew its motion, that the party “waived its challenge to the sufficiency of the evidence because it did not renew its pre-verdict Rule 50(a) motion by filing a post-verdict Rule 50(b) motion.” . . . We further held that. . . a party’s failure to renew a Rule 50(a) motion “precluded [us] from exercising our discretion to engage in plain error review.” . . . Thus, when we stitch together Rule 50’s requirements with our case law, we are left with this result: Because “a post-verdict motion under Rule 50(b) is an absolute prerequisite to any appeal based on insufficiency of the evidence,” . . . and because a Rule 50(a) motion is, in turn, a prerequisite for a Rule 50(b) motion, . . . an advocate’s failure to comply with Rule 50’s requirements gives us serious pause, and compels us to heighten the level of deference we apply on appeal.
This was an important case, with a lot at stake. After their unsuccessful appeal Thicke and Williams are faced with a $5 million-plus judgment, an ongoing royalty obligation of 50%, and very little chance that they can persuade the Supreme Court to take this case and change the result. Whether the outcome would have been different had their lawyers filed Rule 50 motions is impossible to say. However, in litigation you need every advantage you can get, and waiving your ability to challenge the sufficiency of the evidence on appeal is not a trivial mistake.
To be clear, Federal Rule of Civil Procedure 50 requires that a party move for judgment, with specificity, on every issue before the case goes to the jury (Rule 50(a)), and then again following the verdict if the jury finds against the party (Rule 50(b)). Failing to file either motion will compromise the party’s ability to raise the issue on appeal – in other words, it will result in a waiver.
Why Pharrell Williams and Robin Thicke’s lawyers failed to make these motions will likely never be known. Nor can we know whether, had they done so, the outcome on appeal would have been different. But we, and their clients, can be left to wonder.
A motion for judgment as a matter of law may be made at any time before the case is submitted to the jury. The motion must specify the judgment sought and the law and facts that entitle the movant to the judgment
If the court does not grant a motion for judgment as a matter of law made under Rule 50(a), the court is considered to have submitted the action to the jury subject to the court’s later deciding the legal questions raised by the motion. No later than 28 days after the entry of judgment . . . the movant may file a renewed motion for judgment as a matter of law.
For a more detailed discussion of this issue see Preserving Sufficiency, Tips for Avoiding Forfeiture of Sufficiency of the Evidence Arguments Under Rule 50.
Uber is in trouble.
The trial between Alphabet’s Waymo and Uber over Waymo’s self-driving car trade secrets was scheduled to begin on December 4th before Judge William Alsup, of Oracle v. Google fame. (Readers familiar with coverage of that case know how smart and tough he is).
According to published reports, at the last minute evidence (a letter) was discovered suggesting that Uber has a team dedicated to collecting trade secrets from competing companies. Allegedly, the people involved use disappearing-message apps, anonymous servers, and secret computers and phones to communicate without leaving a trail. The purpose was to ensure there was no paper trail that would come back to haunt the company in any criminal or civil litigation.
However, now that this has been disclosed, that strategy has backfired.
Whether this Uber team targeted Waymo is not entirely clear, but there is enough suspicion that it did for Judge Alsup to have postponed the trial so Waymo can conduct additional discovery – discovery that would have already have taken place had Uber disclosed this earlier.
All of this has Judge Alsup royally peeved. According to press reports (links below) his comments at the hearing postponing trial included the following:
- “I can no longer trust the words of the lawyers for Uber in this case. … If even half of what is in that letter is true, it would be an injustice for Waymo to go to trial”
- “You [Uber’s lawyers] should have come clean with this long ago”
- “You’re just making the impression that this is a total cover up”
- “Any company that would set up such a surreptitious system is just as suspicious as can be”
- “I have never seen a case where there were so many bad things done like Uber has done in this case”
So, Uber has a federal judge who is about to start a trial (not next week, but probably very soon), who distrusts Uber and, perhaps more importantly, its lawyers.*
*This is not the first time Judge Alsup has had problems with Uber’s lawyers. See Judge blasts Waymo v. Uber lawyers, delays trial until December (Ars Technica, Oct. 3, 2017).
This is bad news for Uber. It’s important that a trial judge trust the lawyers trying a case to tell him the truth. Trial lawyers are constantly making representations to the judge about the law and evidence, and if the lawyers representing one side of the case lose the judge’s trust, they are at a huge disadvantage. Once a judge catches a lawyer in a lie the judge will question everything the lawyer says.
While Judge Alsup must follow the rules of evidence and civil procedure in his courtroom, there are countless ways he can tilt the scales against Uber. Studies have shows that jurors believe that the judge knows what’s “really going on” in a trial, and they watch the judge closely to try to pick up on how he views the case. The judge can communicate how he feels about the case through body language, tone of voice and a thousand other subtle clues that can’t be reviewed on appeal. He can also rule against Uber on motions and procedural issues on which he has discretion, without fear of being reversed.
All of this leaves Uber at a disadvantage before the trial even begins.
Presumably, Uber’s executives and in-house counsel (and perhaps the Board of Directors) are on top of this situation and trying to figure out how to proceed. What are their choices?
- Do nothing. Uber can decide to ignore its problems with the judge and proceed to trial. If the evidence supports Uber’s position that it has not actually used any of Waymo’s trade secrets (as Uber has repeatedly stated in its public announcements on this case), perhaps it can muscle its way through the case. It will have one strike against it, but that’s not an out.
- Retain new counsel. The judge may no longer trust Uber’s lawyers, but it’s probably too late to change law firms. However, it may not be too late to bring in a new lawyer (one that Judge Alsup is known to “trust”) to help try the case. Judge Alsup has not set a new trial date, and depending on when he does, this is not out of the question. If the new trial date is far enough in the future, it may be possible to bring in a new firm to take over as lead counsel. By doing that Uber would be signaling to the judge that it recognized his problem with current counsel, and took steps to replace them. Of course, this ignores the possibility that Uber hid information from its lawyers, and that all of the fault with the newly discovered evidence lies with Uber, something Judge Alsup may already suspect.
- File a motion asking Judge Alsup to recuse himself (withdraw from the case). A recusal motion may be based on evidence that a judge is biased or lacks impartiality. That said, recusal motions are always a long shot, and I don’t think Judge Alsup’s comments have crossed the line. And, an unsuccessful motion for recusal might only backfire and make things worse for Uber. Before filing a motion to recuse Judge Alsup, Uber would do well to keep in mind Emerson’s quote that “when you strike at a king, you must kill him.”
That said, I’m pretty sure some associate at Uber’s law firm is feverishly researching Ninth Circuit recusal law today.
- Settle the case. It’s almost certain that there have been settlement discussions in this case. Given its current problems, Uber’s cost/benefit analysis of settle/litigate has changed, and Uber should consider putting more on the table. This may include more money and some form of independent monitoring process that would give Waymo assurances that Uber is not using its trade secrets. It may even go so far as to put Uber’s self-driving car project on hold for some period of time.
None of these options is likely to be appealing to Uber, but these are the choices that face a party who has (and whose attorneys have) angered or alienated a judge. Uber is in a tough spot. How it will extricate itself – or whether it even can – remains to be seen.
See: Rebuking Uber Lawyers, Judge Delays Trade Secrets Trial (NYT, Nov. 28, 2017); Uber trial delayed after new evidence emerges (CNN, Nov. 28, 2017); Judge Tells Uber Lawyer: ‘It Looks Like You Covered This Up’ (NYT, Nov. 29, 2017).
Update: The case settled.
Juror #8: It’s always difficult to keep personal prejudice out of a thing like this. And wherever you run into it, prejudice always obscures the truth. 12 Angry Men
In this business you got fifty ways you’re gonna screw up. If you think of twenty-five of them, then you’re a genius… and you ain’t no genius. Body Heat (“G”-rated version of quote from the movie)
If you’ve noticed a lawyer with a paranoid, haunted look, and you’re wondering why, the answer may be that the lawyer is thinking, “what I have forgotten? Having a waived something I shouldn’t have?” The last time I wrote about the lawyer’s nightmare of waiver the waiver may have ended up costing Microsoft $300 million. In that case, i4i’s patent suit against Microsoft, Microsoft’s appeal of damages was made more difficult by its failure to move for judgment as a matter of law on the issue. As I said in my post on that case, “trials are a virtual waiver landmine.”
Now, a waiver in Apple v. Samsung may outdo the cost of the waiver in the Microsoft case by $700 million.
In Apple v. Samsung a California federal jury awarded Apple over $1 billion for infringing patent and trade dress rights associated with the Apple iPhone.
Following trial the jury foreperson, Velvin Hogan (pictured above), became a media star, granting generous interviews to the press. Some of what he had to say motivated Samsung to investigate his background, and it didn’t like what it learned. During jury selection the judge asked the prospective jurors “have you or a family member or someone very close to you ever been involved in a lawsuit, either as a plaintiff, a defendant, or as a witness?” Hogan described a 2008 lawsuit in which he had been a defendant, but failed to disclose the fact that he had been sued by Seagate in 1993, and had filed for bankruptcy at least in part as a consequence of that lawsuit.
Since 2011 Samsung has been Seagate’s largest shareholder, owning almost 10% of Seagate’s stock. It follows, Samsung has argued, that Hogan may have been biased against Samsung based on this financial relationship. At the very least, he should have disclosed this lawsuit in response to the judge’s question. Samsung filed a motion for a new trial or an evidentiary hearing to examine Hogan’s conduct during jury deliberations.
No way, the judge ruled this week. Hogan disclosed the fact of his bankruptcy during voir dire (questioning during jury selection). Samsung was able to dig up his bankruptcy case file after trial, and they could have done it during trial. If they had, the bankruptcy filing would have led them to the Seagate case and they could then have moved to disqualify Hogan during trial. Samsung was obligated to act with “reasonable diligence based on information about juror misconduct” in its possession, and it failed to do so. Consequently, Samsung waived its right to seek a new trial, or even an evidentiary hearing into juror misconduct.
What is one to make of all of this?
If given a choice between retrying this case and torture with a medieval thumbscrew Judge Koh might be hard-pressed to chose. This trial consumed enormous resources—of the parties and the court system—and the idea of being forced to retry it based on one errant juror’s failure to disclose a fact that could have been totally irrelevant to the jury’s decision would be anathema to her.
As a legal matter, whether to grant a new trial or an evidentiary hearing is at the discretion of the court, and Judge Koh is unlikely to be reversed on appeal. Not every judge would necessarily rule as she did, but Samsung is almost certainly stuck with her ruling. The fact that the Seagate case against Hogan is almost 20 years old, and that Samsung’s financial relationship with Seagate is so tenuous, makes it extremely unlikely that the Federal Circuit will reverse Judge Koh on this issue.
If Hogan had brought evidence into the juryroom—or if there was reason to believe he was doing independent research into the patents at issue and sharing that with the jury—it might be a whole other story. For example, the Federal Circuit reversed a federal judge in the district where I practice (Massachusetts) for failing to question the jury after learning that a juror had brought a physical object into the jury room during in order to help clarify the evidence. (Atlantic Research Marketing Systems, Inc. v. Troy). However, that case involved conduct brought to the attention of the court during deliberations, not afterwards, as was the case here. And, Hogan didn’t bring any objects (other smart phones?) or information to the deliberations, so this case doesn’t go as far as the Federal Circuit’s ruling in Atlantic Research.
Samsung does seem to have dropped the ball by not investigating Hogan’s bankruptcy filing during trial. Each side of this case was almost certainly heavily staffed, and one attorney or paralegal should have been assigned to investigate each juror. To the extent this wasn’t standard procedure before this case, it is a lesson to trial lawyers that an in-depth background check on each juror is mandatory. Failing to do so is arguably malpractice, unless the case is too small (or client funds too constrained) for a check to be affordable.
In 12 Angry Men one juror, played by Henry Fonda, persuaded 11 jurors to change their view of the evidence. Did Velvin Hogan connect the relationship between Samsung and Seagate and decide to use his place on this jury to retaliate against Seagate for the suit it brought against him 19 years ago? Likely, we will never know. Big money cases and s0-called “trials of the century” like Apple v. Samsung are common, and are quickly forgotten. The lesson this case is most likely to be remembered for years from now is this: research your jurors at the outset of trial as soon as possible. If a juror has a hidden bias or there is some other basis for disqualification and you could have learned it during trial, you risk a post-trial challenge to the verdict based on waiver.
Apple v. Samsung Order re Juror Misconduct (courtesy Groklaw.com)
Despite what lawyers may promise their clients, lawyers cannot guarantee confidentiality in litigation.
Much time and effort is spent negotiating “protective orders” (a stipulation filed by the parties and “entered” as an order by the court). Usually the “PO,” as its called, provides for three designations: “attorney’s eyes only,” “confidential” and non-confidential. “Attorney’s eyes only” usually covers attorneys and experts retained by a party, but not the executives or employees of the party itself.
Lawyers work hard to make sure they follow the dictates of a PO. Most embarrassing for lawyers is when they mistakenly “under-designate” a group of documents (“oops, those documents should have been attorney’s eyes only, not simply confidential. Can we agree to redesignate them? You haven’t shown them to your client yet, have you?”). Usually this isn’t a problem (after all, there but for the grace of God …), but sometimes it is, requiring a motion and decision by the judge on how to treat the “mistake.”
Not infrequently, one side will claim the other side has “over-designated” documents: “that shouldn’t be attorney’s eyes only, will you agree to redesignate it a confidential? If you won’t, I’ll file a motion . . ..”). And so on.
However, when the case gets to trial all bets are off. Judges are loath to clear the courtroom every time confidential documents or topics are discussed. They don’t want to give their clerks and the clerks office the responsibility of maintaining documents in secret, especially when the presumption is that courthouse filings are public. And, in the eyes of many judges claims of confidentiality are often greatly overblown. So, depending on the judge, the documents the parties try to keep from each other leading up to trial become exhibits at trial, where anyone can look at them.
Usually, no one is interested, but in Apple v. Samsung, in trial in federal court in California, many people are interested. A telling example of how this can play out is Apple Exhibit 44, a 2010, 131 page translation of a Samsung document titled, “Relative Evaluation Report on S1, iPhone.” Although Samsung followed protocol and stamped each page of this document “Highly Confidential – Attorneys’ Eyes Only” during pretrial discovery, that protection proved good only until trial, at which point the judge refused to keep the document a secret, and it was made available to the world without restriction. It was promptly picked up by the press, and from there replicated all over the internet. A copy is embedded below.
The Report consists of dozens of side-by-side comparisons of the interface of the Samsung Galaxy S and the iPhone, and the Samsung phone rarely comes out on top. The judge’s decision to make this a public document seems right-on. The document may be embarrassing to Samsung, but it’s not clear why it qualifies as “attorney’s eyes only,” or even “confidential.” However, it shows just how closely Samsung examined the iPhone and sought to imitate its superior interface, which plays poorly for Samsung in the eyes of the press (i.e, the jury of the fourth estate). Of course, whether the courtroom jury will see it that way remains to be seen.
44 iPhone GalaxyS1 Review
I’ve written before about waiver. As I said back in July 2008, the “one thing that scares the bejesus out of trial lawyers is waiver.” Waiver is a constant risk in litigation, but nowhere is it more of a risk than during trial. Failure to object to improper jury instructions, or failure to follow the proper procedure required for judgment as a matter of law (“JMOL” in lawyer parlance) can constitute a forfeiture, and preclude the right to raise the omitted issue on appeal.
To make matters worse, these potential waivers come when the fog of war is at its worst: after days or weeks of sleep-deprived trial stress the lawyers have to file a written motion for JMOL just before the jury is handed the case. A lawyer may know that the failure to do this will forfeit the right to raise the missed issue on appeal, but at that point the lawyer is frantically preparing for closing argument and dealing with the countless issues that come up at the end of trial, and the motion may be forgotten or not thoroughly prepared. However, filing the correct pre-verdict motion is not the end of the matter. FRCP 50 requires that the motion be renewed within 28 days after the court enters judgment. However, a post-judgment JMOL motion cannot raise an issue that was not presented in the prejudgment motion.
Belk v. Meyer Corp., decided by the 4th Circuit in May, is a classic example of JMOL forfeiture. The case involved a claim of trade dress infringement of high end cookware. Following a jury trial the plaintiff obtained a judgment for over $1.2 million. On appeal to the 4th Circuit the defendant attempted to raise a potpourri of errors committed by the trial judge, but the 4th Circuit held that most of them had been forfeited based on the defendant’s failure to file a timely post-judgment JMOL motion. In its lengthy opinion the 4th Circuit provides a detailed tutorial on what lawyers must do under FRCP 50 to avoid forfeiting rights on appeal. However, it’s too late for the losing party in this case.
Belk v. Meyer Corp
I was interested to read the The Wall Street Journal’s report that Raj Rajaratnam spent $300,000 on jury consultants before the trial in which he was convicted on all 14 counts of securities law violations. As my teenage daughter might say, “fail”!
OK, I admit that I’m being a bit unfair. From everything I read in the press regarding this trial it would have been astounding if Mr. Rajaratnam had been acquitted. After all, the government had something quite rare in insider trading cases: audiotapes of the defendant, convicting him with his own words. A jury consultant “fantasy team” comprised of Sigmund Freud and a certified psychic probably wouldn’t have been able to help in this case.
Nevertheless, it’s no great surprise that Raj’s attorneys chose to use jury consultants in this case. $300,000 was a drop in the bucket given the “spare no expense” approach taken by defense counsel in this case. Mr. Rajaratnam”s lawyers undoubtedly concluded that jury consultants might help, and couldn’t hurt. The decision to utilize jury consultants probably was a prudent step in minimizing future regret. (“If only we had used a jury consultant our client might not have been convicted! Darn.”).
Trial lawyers have long been deeply divided on the question of whether jury consultants are “worth it.” Some of the consultants’ recommendations in this case (as reported in the WSJ), are so obvious that it your lawyer doesn’t know them without a jury consultant’s advice, get a new lawyer. For example, the Journal reports that the consultantants concluded that jurors who were members of ethnic minority groups were more sympathetic to Mr. Rajaratnam, who was born in Sri Lanka. Hmm . . . . did OJ’s lawyers need jury consultants to tell them that people of color might be more favorably disposed to OJ than whites? I hope not. Lawyers shouldn’t need jury consultants to tell them that people are predisposed to like people like themselves. If my client is an ultra orthodox Jew, I want a jury of the same. If my client is a native American . . . . well, you get it. (more…)
One of the oldest, most hoary rules of the trial practice is this: if you have a bad fact, reveal it to the jury before your opponent does. Otherwise, the theory goes, the jury (or judge) will think you are trying to hide it from them, and will count it against you. Worst case, you will lose credibility as an advocate – if this lawyer will try to hide a significant fact from me this time, what else is he or she hiding? Why should I trust this attorney?
Disclosing the bad fact is OK, but even better, figure out some way to turn the “bad” fact to your advantage – “if you can’t fix it, feature it.” For example, “my client was convicted of criminal fraud ten years ago. We want you to know about this, jurors, and to know that he has paid his price to society, and been free of any allegations of wrong doing since. Since then he has married, he is the father of triplets, and he hasn’t gotten into trouble since. We all make mistakes – don’t hold this one against him.”