“Once Upon a Time . . . in Legal Ethics and Social Media.”

By: Peter J. Gallagher (LinkedIn)

In a recent decision, the New Jersey Supreme Court looked back to a time before social media was ubiquitous, a time when Facebook was cutting edge and perhaps even – pause for collective gasp from anyone under 40 – cool.

The case – In the Matter of John Robertelli – involved an attorney who represented defendants in a personal injury case. He asked his paralegal to search the Internet for information about plaintiff. The paralegal did, first by searching plaintiff’s Facebook page — which was allegedly public for a time but later made private — and then by “friending” plaintiff. The paralegal obtained information from plaintiff’s Facebook page that could have been used to impeach plaintiff. In 2021, the question of whether this conduct violates RPC 4.2 – which prohibits attorneys from communicating with individuals represented by counsel – seems pretty straightforward. But the conduct in Robertelli took place in 2008, which made all the difference to the Supreme Court:

Our Rules of Professional Conduct (RPCs) generally prohibit a lawyer from communicating with another lawyer’s client about the subject of the representation without the other lawyer’s consent. RPC 4.2. That ethical prohibition applies to any form of communication with a represented party by the adversary lawyer or that lawyer’s surrogate, whether in person, by telephone or email, or through social media. Although it is fair game for the adversary lawyer to gather information from the public realm, such as information that a party exposes to the public online, it is not ethical for the lawyer — through a communication — to coax, cajole, or charm an adverse represented party into revealing what that person has chosen to keep private.

The issue in this attorney disciplinary case is the application of that seemingly clear ethical rule to a time, more than a decade ago, when the workings of a newly established social media platform — Facebook.com — were not widely known. In 2008, Facebook — then in its infancy — had recently expanded its online constituency from university and high school students to the general public. A Facebook user could post information on a profile page open to the general public or, by adjusting the privacy settings, post information in a private domain accessible only to the universe of the user’s “friends.”

The novelty of Facebook in 2008 – to both the bar at large and Robertelli – saved the attorney from potential ethical consequences. But the Supreme Court cautioned, attorneys can no longer “take refuge in the defense of ignorance” when it comes to social media.

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Zoom! Zoom! Zoom! Only One Witness In The Room (For Remote Trial Testimony)

By: Peter J. Gallagher (LinkedIn)

Just before the pandemic turned nearly all New Jersey courtrooms virtual, the Appellate Division issued its decision in Pathri v. Kakarlamath, which dealt with the standards trial courts should use to assess a party’s request to appear remotely for trial. I wrote about it here “Before Applying a 30-Year Old Decision to Modern Technology, A New Jersey Court References A Musical From the 1890’s.” Who knew at the time how timely that decision would become?

Now the Appellate Division has revisited the issue (minus theatrical references). In D.M.R. v. M.K.G., the Appellate Division acknowledged the issues courts have faced since Pathri , and addressed the challenge of ensuring that remote hearings are as fair as possible:

Little did we know that within two months our entire court system would begin to rapidly transform from in-person to virtual court proceedings, utilizing various remote video and telephonic platforms, in an effort to continue operations amid the social distancing measures necessitated by the COVID-19 pandemic. Since that time, New Jersey Courts have operated primarily remotely via platforms like Zoom, Microsoft Teams, and telephone conferences, with the goal of preserving the quality of justice our courts have traditionally striven to provide when court was conducted in-person. Trial courts and staff have undertaken a herculean effort in rising to this unprecedented challenge. However, despite their efforts, the formality of the courtroom can fall away. Everyone may not have the same access to technology. These proceedings often involve unrepresented litigants unfamiliar with court proceedings, which presents its own challenges now amplified by the virtual proceeding. Moreover, judges do not have the same mechanisms to control the proceeding that they would have in a live courtroom

It was “through this lens” that the Appellate Division addressed the issues in D.M.R.

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Arbitration Award Vacated Because Arbitrator Hid Ownership Interest In Arbitration Service

by: Peter J. Gallagher (LinkedIn)

Arbitration awards are rarely overturned. The standard to vacate an award is high, and judicial review of awards is often unexacting. So when a court overturns an award, it is usually worth a closer look. And one recent decision from the U.S. Court of Appeals for the Ninth Circuit, Monster Energy Company v. City Beverages , LLC, is definitely worth a closer look. In Monster, the court vacated an arbitration award based on the “evident partiality” of the arbitrator. The main evidence of the arbitrator’s “evident partiality” was his ownership interest in JAMS, a fact he did not disclose before the arbitration. At the risk of revealing my own ignorance, I did not know that JAMS is owned, at least in part, by some of the neutrals who mediate/arbitrate cases through JAMS. But it is, and after Monster, those owners should disclose that relationship to the parties before beginning an arbitration.

The defendant in Monster was a beer distributor. In 2006, it signed an agreement with plaintiff to be the exclusive distributor of plaintiff’s energy drinks for 20 years in a specific geographical territory. But the agreement contained an out for plaintiff – it could terminate the agreement without cause if it paid a severance fee to defendant in an amount agreed upon by the parties in the agreement. Eight years after signing the agreement, plaintiff exercised this clause, paid the severance fee, and terminated the agreement. Defendant objected, arguing that the termination violated Washington’s Franchise Investment Protection Act.

The agreement between the parties contained an arbitration provision, requiring that any dispute be resolved by JAMS Orange County. After plaintiff served its arbitration demand, JAMS provided the parties with a list of seven neutrals. The parties chose their arbitrator from this list. The chosen arbitrator then provided a disclosure statement, which included the following: “I practice with JAMS. Each JAMS neutral, including me, has an economic interest in the overall financial success of JAMS.” The arbitrator also disclosed that he had arbitrated one matter for plaintiff in the past five years, and that he had ruled against plaintiff in that case, which involved a dispute between plaintiff and another distributor.

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Fee Dispute Between Counsel Inspires Court To Bemoan The Death Of The Practice Of Law As A Profession

by: Peter J. Gallagher (LinkedIn)

In the final scene of the movie Scent of a Woman, Al Pacino’s character defends Chris O’Donnell’s character, who is about to be expelled from the (fictional) prestigious Baird School. Among many other things, Pacino’s character exclaims: “I don’t know who went to this place. William Howard Taft. William Jennings Bryant. William Tell, whoever. Their spirit is dead, if they ever had one.” Similarly, although slightly less dramatically, a fee dispute between counsel in Meister v. Verizon New Jersey Inc. led the trial court to eulogize the law as a profession:

This unfortunate fee dispute, coming as it does in the midst of seemingly final negotiations of a settlement, should resolve, with certainty, any lingering doubt that the practice of law, that storied profession of Marshall and Jefferson and Lincoln, is really now just another capitalist enterprise.

The court walked these comments back, slightly, by acknowledging that “[t]he practice of law is not a hobby” and “[h]ard working and industrious counsel who take risks to advance a client’s case and to maximize a client’s recovery should be rewarded.” But it then immediately returned to its original thesis:

However, while lawyers may indeed make a client’s life better through their advocacy and vigilant protection of that client’s interests, they are uniquely able to make it seem as though they are not doing so when quarreling, as they are here, over who gets to spell out how much they should be paid from their paralyzed client’s recovery and why one is more entitled to do so than another.

This is probably not how the lawyers in the case hoped the court would start its opinion.

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Judge Shopping Is Bad

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

That is the take home message from the Appellate Division’s recent decision in Goldfarb v. Solimine.

In Goldfarb, defendant promised to hire plaintiff to manage defendant’s family’s assets. Before getting written confirmation of defendant’s offer, plaintiff quit his job with an investment firm. Defendant then reneged on the promise, and plaintiff sued. At trial, the jury sided with plaintiff and awarded him damages based on the difference between the base salary defendant promised and what plaintiff actually earned at a new job he found after defendant reneged on that promise.

Both sides appealed on a number of issues, the most interesting of which had nothing to do with the underlying facts of the case. Plaintiff appealed the denial of his motion to recuse the trial judge, which plaintiff filed “after learning that a defense attorney, in an ex parte communication, sought the judge’s assignment to the case, and the judge responded by specifically requesting the assignment from the presiding judge.” The Appellate Division agreed with plaintiff and reversed the trial court’s decision on the motion to recuse.

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