Two weeks ago, I participated on a panel for a webinar on liquidated damages with three other panelists from New Jersey, Florida and Texas. In preparing with the other panelists, I was surprised to learn that while there are many common threads running through the law of liquidated damages across the country, there also are some startling differences depending upon which jurisdiction’s law controls.… Keep reading
It is not unusual for a plaintiff to have the ability to choose from at least two states when deciding the venue of a litigation. In such situations, many automatically choose to file suit in their home state, without giving much thought to potential advantages or disadvantages beyond having a home field advantage and/or forcing their adversary to travel long-distance. While the substantive law applicable to an underlying dispute often is the same no matter where suit is brought (although even this is far from a hard and fast rule), below are three reasons why Massachusetts might be an attractive choice for your next lawsuit.… Keep reading
In Commodity Futures Trading Comm’n v. Weintraub, the United States Supreme Court noted that:
[W]hen control of a corporation passes to new management, the authority to assert and waive the corporation’s attorney-client privilege passes as well. New managers installed as a result of a takeover, merger, loss of confidence by shareholders, or simply normal succession, may waive the attorney-client privilege with respect to communications made by former officers and directors. Displaced managers may not assert the privilege over the wishes of current managers, even as to statements that the former might have made to counsel concerning matters within the scope of their corporate duties. [Emphasis added.]
While the foregoing may not seem too surprising to some, what if I told you that the new owners of a business can waive the privilege with respect to communications that the former owners had with company counsel solely to use those communications as evidence against the former owners in litigation? Well, that is exactly what the Delaware Court of Chancery recently allowed to happen in Great Hill Equity Partners v. Sig Growth Equity Fund, LLP.… Keep reading
Porreca v. The Rose Group was a class action lawsuit brought by Carly Porreca and Charles Walton, alleging that their employer, Applebee’s Neighborhood Grill and Bar, had violated the Fair Labor Standards Act. After Porreca was dismissed from the lawsuit, the restaurant management company that owned and operated the Applebee’s at which Porreca and Walton worked, the Rose Group, sought a stay of the litigation as well as an order (i) compelling Walton to arbitrate his claim individually, and (ii) barring him from pursuing a class action in that arbitration. In support of this request, the Rose Group relied on the fact that Walton had signed an agreement binding him to the company’s Dispute Resolution Program, which specifically stated the following:
… Keep readingThe Company and I agree that all legal claims or disputes covered by the Agreement must be submitted to binding arbitration …. We also agree that any arbitration between the Company and me is of an individual claim and that any claim subject to arbitration will not be arbitrated on a collective or a classwide basis ….
As I discussed in a prior post, the substantive law applicable to a dispute can have a tremendous impact on its outcome. But what about the procedural law of the jurisdiction where a suit is being litigated? If that jurisdiction is Massachusetts, the procedural law can have a potentially game-changing impact – even if the substantive law of another jurisdiction will be applied to the underlying claims. Further, hauling an out-of-state person or entity into Massachusetts to defend a suit may be easier than you think.… Keep reading
In a prior post, I noted that if you want all disputes between contracting parties to be resolved in one and only one specific forum, it is imperative to expressly state this with great clarity in your agreement. In light of the Massachusetts Appeals Court’s recent decision in Try Switch, Ltd. v. Endurance International Group, a similar approach should be taken if a contracting party wants a non-party to be a bona fide “third-party beneficiary” who is legally permitted to enforce some right or obligation under that contract.
In Try Switch, the plaintiff sued Endurance International Group in the Massachusetts Superior Court for breach of contract, and Endurance moved to dismiss for improper venue. More specifically, Endurance argued that it was the third-party beneficiary of a contract between Try Switch and ValueClick International, and that contract included the following provision:
The exclusive forum for any actions related to this [a]greement shall be in the [c]ourts in Dublin, Ireland.
While the Superior Court agreed with Endurance and dismissed the case, the Appeals Court reversed. In doing so, the Appeals Court first acknowledged that even though no Massachusetts case addresses the issue as to whether a non-party to … Keep reading
As we have previously posted in Choice of Law in a Contract Can Be Critical, Ensuring Your Dispute Is Resolved in the Forum You Want Is Not Always Easy, and Selection of Forum Other Than Massachusetts May Not Avoid Wage Act Enforcement, choice of law and forum selection provisions should be conscious decisions made in the context of each specific contract. If in-house counsel do not carefully draft these provisions in their independent contractor or consulting agreements, they may be overlooking a possible means of avoiding or minimizing liability in Massachusetts under the so-called Massachusetts Independent Contractor Law (M.G.L. c. 149, §148B), the Massachusetts Weekly Payment of Wages Act (M.G.L. c. 149, §148) and/or the Massachusetts minimum wage and overtime laws. Because these statutes do not contain any explicit geographic restriction on their application, their applicability to non-Massachusetts residents performing work outside of Massachusetts for Massachusetts companies has been unsettled. (I have previously posted here and here on the staggering ramifications of misclassifying a worker as an independent contractor in Massachusetts.)
In Taylor v. Eastern Connection Operating, Inc., the Massachusetts Supreme Judicial Court took up the issue of whether New York residents who perform … Keep reading
In a post this summer, I raised three issues employers may want to consider before even requesting that an employee execute a covenant not to compete. One issue that I did not mention is whether the company’s employee lives and works in California. Although where an employee lives may be relevant, contrary to what many attorneys think, it may be possible for a Massachusetts company to enforce a non-compete against a California resident.… Keep reading
In my recent post, Ensuring Your Dispute is Resolved in the Forum You Want is Not Always Easy, I discussed various issues related to contractual forum selection clauses, i.e., clauses which dictate where parties can or must sue. If a contract does not have a forum selection clause, courts in each of the contracting parties’ home states might be able to exercise jurisdiction over a dispute. Further, and as many in-house counsel have experienced, the ultimate venue for litigation can create a substantial amount of leverage in favor of the home team and work to the detriment of the out-of-state party.
If you believe that your company is likely to be sued by another in some far off jurisdiction, consider the following advice:
If you know you are going to be in a fight, make sure to get in the first punch."
I can’t emphasize enough the importance in evaluating whether you are going to be sued – as opposed to whether you might be sued. If you do not see any way to avoid litigation, following the above rule can pay real dividends, as it did for one of my clients several years ago. In … Keep reading
In addition to having a choice of law provision in a contract (a topic on which I posted last week), many contracts also include what is commonly known as a forum selection clause. Such clauses can be extremely important and can have an impact that goes well beyond simply setting up one party as the “home team” and the other an outsider.
For instance, even if a contract has a choice of law provision calling for the law of New York to apply to all contract disputes, if a forum selection clause requires suit to be brought in Massachusetts, the procedural law of Massachusetts applies. Consequently, while New York law does not have a trustee process attachment rule like we have in Massachusetts, a plaintiff should be able to obtain a freeze on the defendant’s bank account as long as a showing is made that the plaintiff is likely to succeed on the merits of its claim. The logic behind this is that, freezing a bank account (known as a “trustee process attachment”) is governed by procedural law (Rule 4.2 of the Massachusetts Rules of Civil Procedure), not by substantive law. Alternatively, if a suit was … Keep reading
