Judicial Update – COVID-19

By Martha J. Efird

Litigation Section members should pay particular attention to today’s announcement by Chief Justice Beasley regarding the operation of the North Carolina court system during the outbreak of COVID-19 (coronavirus). For your convenience, a link to the announcement is here.

In summary, the Chief Justice’s Order states the following:

EFFECTIVE MONDAY, MARCH 16, 2020, for 30 days, Chief Justice Beasley ordered the rescheduling of District and Superior Court proceedings calendared between March 16 and April 16. No District or Superior Court matters can be added to the calendar during the 30-day period either.

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E-Discovery Pitfalls: Cell Phone Retention Settings Can Lead to Sanctions for Spoliation of Evidence

By J. Blakely Kiefer

Imagine this scenario: You are an employee who uses your personal cell phone for company purposes to send and receive business-related text messages. Litigation ensues and you, as part of your employment, receive from the company a preservation notice or litigation hold notifying you to preserve and not delete communications relevant to the issues raised by the litigation. Text messages are included within the definition of communications for discovery purposes. A discovery request is served on the company seeking all communications relevant to the litigation, which requires the company and you, as someone with responsive information, to produce your text messages. Only then do you discover that your cell phone has certain retention settings, and is set to automatically delete text messages after thirty (30) days. While you had responsive text messages that should have been produced in litigation, you no longer have those messages because your phone automatically deleted them. Your deleted text messages not only place you in violation of your company’s preservation notice and/or litigation hold, but could potentially result in the company being sanctioned in the litigation for destroying or failing to preserve relevant evidence. Sound farfetched? It’s not.

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Being “Uber” Careful with Client Confidential Information

By Marilyn Forbes 

While the ubiquitous use of our cellphones allows us to make efficient use of travel time to talk with clients or about client matters, there is a new reason to be “uber” careful when conducting business while using ride services.

A fundamental rule of client representation is that we must keep our clients’ secrets. NCRPC Rule 1.6 (a) provides that a lawyer “shall not reveal information acquired during the professional relationship with a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b) [which provides specific exceptions such as preventing the commission of a crime.]”  Additionally, and just as important, “a lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.” Rule 1.6 (c). This includes, among other things, being mindful of when and where you to talk to or about clients.

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When Tiptoeing Around the Securities Exemption to North Carolina’s Unfair and Deceptive Trade Practices Act, Take Each Step Carefully

By Stephen Feldman

North Carolina law prohibits unfair and deceptive trade practices, but not if those practices concern securities transactions.

The state supreme court announced this exemption in 1985 in Skinner v. E.F. Hutton & Co. The court expanded on the exemption’s reach in a 1991 decision called HAJMM Co. v. House of Raeford Farms, Inc. Thanks to these decisions, a plaintiff who alleges a violation of N.C.G.S. Section 75-1.1 about a securities transaction better have a sound argument on why Skinner, HAJMM, and their progeny don’t bar the claim.

This post concerns a recent North Carolina Business Court case called Beam v. Sunset Financial Services, Inc., in which the plaintiffs faced this situation and thought they had a winning game plan to sidestep these decisions.

Spoiler alert: it wasn’t a winning game plan.

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North Carolina Expands Civil Protections for Military Servicemembers

By Rick Conner

The North Carolina Servicemembers Civil Relief Act (“NCSCRA”), which took effect on October 1, 2019, expanded the rights of servicemembers and their dependents living in North Carolina.  The new law is codified in Article 4 of Chapter 127B, and can be found here.

The NCSCRA incorporates the federal SCRA (codified in Chapter 50 of Title 50 of the United States Code) into North Carolina law.  The federal SCRA, originally enacted in 2003 and amended several times since then, provides protections for members of the military who enter active duty, and covers issues such as rental agreements, security deposits, evictions, credit card interest rates, mortgage interest rates and foreclosures, civil judgments and proceedings, automobile leases, life insurance, health insurance, and income tax payments.

The NCSCRA expands beyond the scope of the federal SCRA by extending its protections to   include members of the North Carolina National Guard serving on active duty, and members of other states’ National Guard serving on active duty who live in North Carolina.

The NCSCRA also provides dependents (as defined in 50 U.S.C. § 3911(4)) of servicemembers some of the same rights and protections as servicemembers, including protections against default judgments, stays of certain proceedings including child custody, stays of certain fines or penalties under contracts, interest rate limitations, and tolling of statutes of limitations.

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Upcoming Events

By Alan Parry

Dear Members of the Litigation Section:
Our year is off to a great start, with enjoyable networking events in August (Chapel Hill) and September (Raleigh) that gave Section members an opportunity to catch up and socialize with other litigators, judges, and court staff. We plan to sponsor similar events in communities around the state and will keep you posted on upcoming opportunities for fun, fellowship, and CLE from the Litigation Section.

Next up, we will be back in the Chapel Hill-Carrboro area on Tuesday, Oct. 15, 2019, to host a casual evening social for our Superior Court Judges, who will be in town for the 2019 North Carolina Superior Court Judges’ Conference. Our social event will be at Vecino Brewing, located at 300 E. Main St. in Carrboro, and all Section members, judges, and significant others are invited. Please RSVP here to let us know you’re coming, and we look forward to seeing you there!

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Welcome To a New Bar Year: Come See Us in Chapel Hill on Wednesday

By Alan Parry

Welcome to a new year for the North Carolina Bar Association’s Litigation Section!  We have a lot in store for Section members this year, with a focus on social events around the state to give members an opportunity to network with other litigators, judges, and court staff.  We will, of course, continue to offer CLE on topics of interest to litigators, and we also hope that Section members will use this Litigation Section blog, both to stay abreast of events and developments and to publish their own articles and posts of interest.

 

NCBA Litigation Section Social
Top of the Hill Restaurant and Brewery
100 E Franklin St #300, Chapel Hill, NC 27514
Wednesday, Aug. 21,  5-6:30 p.m.
RSVP here.

There will be much more to come about the events and activities we have planned for Section members this bar year, but I wanted to drop a short note to introduce myself as the new Section chair and mainly to remind you about the first of our Section social events, which is coming up this week in Chapel Hill.  There is no formal program – just a great opportunity to meet and catch up with other Section members.  Drinks and appetizers are on us, and we hope to see you there!

 

How Corporate Counsel Can Push Back on Outside Counsel Guidelines by Citing the Ethics Rules

 

 

 

 

 

 

By Amy Richardson, Hilary Gerzhoy, and Lauren Snyder

In recent years, clients have begun to insist that their corporate counsel sign Outside Counsel Guidelines (“OCGs”) that restrict a lawyer from providing services to competitors of the client, even if the work is unrelated to the work being performed for the client and the lawyer has no confidential client information relevant to the work. Those OCGs have also begun to define the “client” as all subsidiaries, affiliates, or parent companies of the entity to which the lawyer’s services pertain. Both trends restrict a lawyer from representing a host of potential clients in the future. How can outside corporate counsel push back?
The two trends cited above directly implicate ABA Model Rules of Professional Conduct 5.6, 1.7 and 1.9.[1] By citing these Rules, and the restrictions they impose, corporate counsel may gain headway in negotiating more permissive OCGs.

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Supreme Court to Decide Whether Title VII Prohibits Discrimination Against LGBT Employees

By T. Cullen Stafford

On April 22, 2019, the Supreme Court of the United States granted certiorari in three cases involving the issue of whether Title VII of the Civil Rights Act of 1964 (“Title VII”) prohibits discrimination on the basis of an individual’s sexual orientation or gender identity. The Supreme Court’s decisions in these cases will resolve a long-standing split among U.S. appellate courts regarding whether federal law prohibits discrimination against gay, lesbian and bi-sexual employees.

Background

There is currently no federal statute that expressly prohibits discrimination on the basis of sexual orientation or gender identity. Nearly every Congress since 1994 has introduced the Employment Non-Discrimination Act (“ENDA”), which would amend Title VII to prohibit such discrimination, but the statute has never been passed.

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The Advocate’s Award Goes To Legal Aid Icon Ted Fillette

The Litigation Section has honored Ted Fillette as the 11th recipient of The Advocate’s Award. Presented as merited, the award recognizes “superstars” of the section and the legal profession.

Ted Fillette, right, accepts The Advocate’s Award from Rick Conner.

Rick Conner, section secretary, presented the award during a Litigation Section networking event in Charlotte on Wednesday, Feb. 13.

Fillette retired last year following 45 years of service to the legal aid community in Mecklenburg County and the surrounding region.

Following graduation from Duke University in 1968, he spent two years working for VISTA. He then entered Boston University Law School and undertook an internship in the summer of 1971 in the Charlotte office of attorney George Daly.

Fillette returned to Charlotte in 1973 after graduating from law school. He joined Legal Aid Society of Mecklenburg County, which later expanded into a five-county program known as Legal Services of Southern Piedmont. Twenty-nine years later the organization split and Fillette joined the newly incorporated Legal Aid of North Carolina, where he served as assistant director of the statewide office and senior managing attorney of the Charlotte office.

Previous recipients of The Advocate’s Award are (2006) Charles L. Becton, (2007) J. Donald Cowan Jr., (2009) H. Grady Barnhill Jr., (2010) James T. Williams Jr., (2011) Alan W. Duncan, (2012) Charlie Blanchard, (2013) A. Ward McKeithen, (2015) James E. Ferguson II, (2016) Bill Womble Jr. and (2017) Janet Ward Black.

A longtime member of the North Carolina Bar Association, Fillette was featured in North Carolina Lawyer last year in conjunction with his retirement. The article follows here in its entirety:

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