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CIVIL PRACTICE Discovery rule requires possession of documents An employee’s mere access to records sought through discovery does not constitute “physical possession” of the documents under the definition of “possession, custody, or control” set forth in Tex. R. Civ. P. 192.7(b), the Texas Supreme Court held in a case of first impression on Dec. 19. In re Hal G. Kuntz, No. 02-0375. Hal Kuntz was a minority owner in and general manager of CLK, an oil and gas geological and geophysical consultant. CLK had one client, McMoRan Oil & Gas (MOXY), and CLK regularly prepared letters of recommendation for MOXY on potential oil and gas prospects. During divorce proceedings, Kuntz’s wife, Vesta, filed a motion to discover all “positive” letters of recommendation for MOXY prepared during the course of his marriage. Hal Kuntz refused, saying that while he and the other members of CLK had access to the records, he was not in “physical possession” of them, as is required by Rule 192.7. MOXY, too, argued that the documents contained trade secrets and that Hal was contractually prohibited from divulging their contents. When the trial court sided with Vesta, Hal petitioned the state Supreme Court, for a writ of mandamus. Granting the writ, the high court ruled that if Hal was required to produce the relevant documents, he would be forced to violate the confidentiality provisions of his personal agreement with CLK as well as CLK’s agreement with MOXY, which would subject him to a lawsuit for significant damages. Full text of the decision CONSTITUTIONAL LAW California can regulate phrase ‘board certified’ Upholding a California Medical Board restriction on certain doctors’ use of the phrase “board certified” in their advertisements, the 9th U.S. Circuit Court of Appeals on Jan. 2 ruled that the restriction did not violate the doctors’ rights of free speech. American Academy of Pain Mgmt. v. Joseph, No. 01-15764. The American Academy of Pain Management is an organization for multidisciplinary pain practitioners that is not part of the American Board of Medical Specialties (ABMS). Two academy members advertised on their letterhead that they are “board certified” by the academy. But the California Legislature enacted California Bus. & Prof. Code � 651, which prohibits use of the “board certified” phrase unless the certifying organization is a member of the ABMS and has requirements equivalent to those of the ABMS. The academy applied to the Medical Board of California for approval of use of the phrase in advertising, but was rejected. The academy and two doctors sued the medical board’s executive director, alleging that the statute violated their First Amendment rights. A California federal court granted the defendant’s motion for summary judgment. The 9th Circuit affirmed, holding that the academy’s use of the phrase constituted “commercial speech,” and was thus subject to intermediate scrutiny. The 9th Circuit cited U.S. Supreme Court findings that the phrase “board certification” is a term of art with an established meaning connoting a high level of specialized skill and proficiency. The court held that the academy members’ use of the phrase is “inherently misleading,” and didn’t enjoy First Amendment protection. Full text of the decision LABOR LAW 1st Cir. defines �willful’ medical leave act breach In a first impression case, the 1st U.S. Circuit Court of Appeals on Dec. 31 defined what constitutes a “willful” violation of the Family and Medical Leave Act (FMLA). Hillstrom v. Best Western TLC Hotel, No. 03-1972.The case arose after Roy Hillstrom, a Waltham, Mass., hotel general manager, returned from leave taken under the act, and learned that he had been demoted. While his responsibilities remained the same and he retained the same salary, he was told that he would no longer report to the hotel’s owner but to an intermediary. About one year later, he was fired.One year after that, he filed suit under the act, alleging that the demotion upon his return from FMLA leave violated his rights. But, citing the two-year statute of limitations for standard FMLA violations, a Massachusetts federal court dismissed his claim.On appeal, Hillstrom argued that the violation was willful and, consequently, was governed by the act’s three-year statute for such breaches. Rejecting that argument, the 1st Circuit upheld the lower court’s dismissal. Borrowing from the Fair Labor Standards Act, the court defined a “willful” act as an act committed by an “employer who either knew or showed reckless disregard for the matter of whether its conduct was prohibited by statute.” It concluded that Hillstrom had insufficient evidence to show that his demotion was a willful violation of the act or that it was tied to his taking of leave. Full text of the decision INTELLECTUAL PROPERTY Piecemeal copying is OK, wholesale copying is not An injunction enjoining a teacher from ever copying any part of a test created and copyrighted by the Chicago Board of Education must be modified, the 7th U.S. Circuit Court of Appeals ruled on Dec. 31. Chicago Bd. of Educ. v. Substance Inc., No. 03-1479. To illustrate why he thought the standardized tests created by the Chicago board were bad tests, a Chicago teacher, George N. Schmidt, republished six of the tests in a trade paper he edited. In response to the board’s complaint that he was violating the board’s copyright in the secured tests (the tests were not made available to the public), Schmidt claimed that his was fair use. Magistrate Judge Edward Bobrick dismissed the fair-use defense for lack of evidence and issued a permanent restraining order prohibiting Schmidt from publishing any part of any copyrighted test created now or in the future by the board. Schmidt appealed, arguing that he needed to copy the tests in order to demonstrate his critique. The 7th Circuit affirmed in part, and vacated and remanded in part, faulting both parties for their one-sided view of the law of fair use. Schmidt published the tests to criticize them, not to steal the school board’s market in the tests, the court said. It added, however, that Schmidt’s right to criticize the tests does not give him an unfettered right to copy them. The same criteria used for other fair-use cases still apply, including whether the copier used more of the copyrighted work than was reasonably necessary for his criticism. The injunction was appropriate as Schmidt had presented no credible evidence supporting fair use, but its overly broad terms had to be modified, the court said. Full text of the decision LEGAL PROFESSION Wildlife attorney’s use of EPA material appropriate An attorney for the National Wildlife Federation (NWF) acted in a manner that was “reasonable, responsible, and defensible” in his handling of information produced inadvertently by the federal Environmental Protection Agency (EPA), the U.S. Circuit Court for the District of Columbia held on Dec. 30. In re Kagan, No. 02-0508. In a challenge to EPA rule-making pertaining to the pulp and paper industry under the Clean Water Act and the Clean Air Act, the federation moved for production of confidential materials from industry members. The D.C. Circuit denied the motion, holding that EPA could properly withhold the confidential material, and that NWF could obtain the material from public sources. After the court issued its order, the EPA inadvertently produced confidential information to NWF attorney Neil Kagan. After consulting with outside counsel, Kagan retained the documents temporarily, but told EPA of the disclosure. The documents later were returned to EPA after EPA stipulated to the crucial information contained in them. The industry parties filed a motion for sanctions against NWF. Rather than ruling on their motion, the court referred Kagan to the court’s committee on admissions and grievances. The D.C. Circuit adopted the committee’s recommendation that no disciplinary action be taken against Kagan. Although it distinguished the instant case where a third party, the EPA, disclosed the information from cases where an adverse party discloses the information, the committee noted that Kagan consulted outside counsel, and “handled the dilemma in a manner that was reasonable, responsible, and defensible.” Full text of the decision Malpractice suit accrues when client learns facts In a legal malpractice case, the cause of action accrues when the client suffers actual damage and discovers those facts through reasonable diligence; it does not accrue at the conclusion of the appellate process, the New Jersey Supreme Court ruled on Dec. 18. Vastano v. Algeier, No. A-53-02. Anthony and Geraldine Vastano hired attorney Gary Algeier to sue the owners of a commercial truck that struck and injured Anthony. A jury returned a verdict for the Vastanos in 1989 for $41,400, though the trial court granted a new trial based on Algeier’s improper use of medical records. An appeals court reversed. In 1996, the Vastanos filed a legal malpractice action against Algeier. The Vastanos claimed Algeier’s error during discovery led to a lower damages award; they also claimed that Algeier did not tell the Vastanos about the renewed settlement offer the truck owners made during jury deliberations, an offer that was higher than what the Vastanos received. This fact was revealed in a brief filed by the truck owners in the appeal on the motion for new trial. The trial court dismissed the case as barred by the state’s six-year statute of limitations. An intermediate appellate court affirmed. Upholding that decision, the state’s high court ruled that the limitations period began to run on the day the Vastanos took possession of the file that contained the brief with the information about the settlement offer. “There may be cases in which it would be unfair to conclude that the contents of an extraordinarily large file were reasonably discoverable on the day the client took possession of the file,” the court said. “This is not such a case.” Full text of the decision TORTS Facts still at issue in case of endless penile erection In a case filed by a man claiming that a prescription anti-depressant left him with priapism-a persistent and painful state of constant penile erection-the 10th U.S. Circuit Court of Appeals on Dec. 22 ruled that a grant of summary judgment in favor of the drug maker was inappropriate because there remained outstanding issues of fact. Thom v. Bristol-Myers Squibb Co., No. 00-8099. Steven Thom’s physician, Mark Schueler, prescribed the anti-depressant Serzone to Thom to treat his sleep problems and depression. After Thom developed priapism, Thom and his wife sued Bristol-Myers Squibb, alleging Serzone (known chemically as nefazodone) was the cause. Noting that Serzone’s FDA-approved package insert warned of the possible side-effect of priapism, Bristol-Myers Squibb moved for summary judgment, arguing that, under the learned intermediary doctrine, its only obligation was to warn the physician. A federal court in Wyoming granted the motion, and the Thoms appealed. In reversing, the 10th Circuit rejected the Thoms’ argument that, by not specifically adopting the learned intermediary doctrine, the Wyoming Supreme Court had rejected it. The court said, however, that factual issues remained as to the sufficiency of Bristol-Myers Squibb’s warnings. Noting the relationship between Serzone and another Bristol-Myers Squibb drug, Trazodone, the court said, “Against this backdrop of knowledge possessed by BMS regarding the relation between nefazodone and trazodone, coupled with trazodone’s clear association with priapism, the Thoms have presented a genuine issue as to the adequacy of the Serzone package insert warning.” Full text of the decision WORKERS’ COMPENSATION No award if man earned nil in year before death The widow of a man who contracted asbestos-related diseases from exposure to asbestos fibers during his 30-year career is not entitled to workers’ compensation death benefits because the man had voluntarily retired and had no earnings in the year preceding his death, the Massachusetts Supreme Judicial Court ruled on Dec. 22. In re McDonough’s Case, No. SJC-09009. Joseph V. McDonough voluntarily retired from Boston Edison Co. in 1991 and was diagnosed with asbestosis nearly five years later; he died soon after. His widow filed for benefits under � 31 of the workers’ compensation law, which provides for payment to the dependents of an employee who dies as the result of an injury. Although an administrative law judge determined that McDonough was exposed to asbestos at his job before December 1978, the judge denied the benefits because McDonough had voluntarily retired and received no benefits in the year preceding his death. The review board reversed, and the case was transferred to the states’ Supreme Judicial Court. The high court vacated the board’s decision. Noting that � 35C is the provision used to calculate benefits under � 31 for cases at least five years old, the court confirmed that McDonough did not re-enter the work force at all after his 1991 retirement; that he took his pension as a lump-sum benefit and that he had no stream of earnings-related income when he died more than five years later. Explaining that the purpose of the workers’ compensation law is to offer earnings-replacement or wage-loss protection, the court concluded that there were no earnings from which to calculate an award. Full text of the decision

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