ASSOCIATION OF BUSINESS
Volume XIX NO.3
Electronics in the Courtroom - You're
Already Too Late!
here is a rumor circulating through
the finer law fIllTIS and cocktail lounges that I am in jail. I know this
is true because I started the rumor myself. Whispering to a few
trusted cronies to "pass it on: within days I was rewarded to hear
that most of the local bar assumes I am a "goner;" even a federal
judge believed he had caught a glimpse of me being shuffled into
the new Twin Towers.
This desire to convince the world
that I am "on ice: so to speak, comes
from no desire to avoid my familial,
legal, partnership or social responsibil-
ities. I'm hiding from editors.
Legal publications and their editors
proliferate and each Insists upon a
special person to write for them. In
the profession that person is known as
a "sucker: a word of ichthyic origin
connoting "one who will work for
Thomas J. McDermott
nothing while believing it to be an
honor." To set the hook for the suck-
er, the editor has a shopworn but
trusty tactic: The article will not be
due for six months.
Six months! That is a long time. Or so it seems when the
"honor" is bestowed. "Six months, six months. tell me, secretary,
when is my six months up?"
"Tomorrow, sucker." (My secretary is overly familiar.)
Tomorrow! So, into hiding, into rumors, even into sucking the
lifeblood out of my betters, since the idea for that introduction
came from Benchley.
What does this have to do with our lesson for the day? First, it
(Continued on page 2)
INSIDE
The Extraterritorial Reach
of U.S. Antitrust Law by Peter S. Selvin . ..p. 3 to encourage open channels of communication and the presenta-
Section 998 Offers to
Compromise: The
Procedural Minefield by Geoffrey L. Bryan .p. 5
Cases of Note by Denise M. Parga p. 7 50 CaI.3d at 213-214. In this way. the Supreme Court noted, the
Slgnficant Decisions from
the Federal Courts
Committee by Michael K Grace
Jeffrey W Kramer .. .. .....p. 10
Highlights of Recent Changes
to the Local Rules by Michael K Grace .....p. I I
Letter from the President by Karen Kaplowitz ....p. 12
TRIAL LAWYERS
REPORT May 1997
The Litigation Privilege: Protection
for the Business Litigator
L earned Hand wrote: "As a litigant
I should dread a law suit beyond almost anything else short of
sickness and death.' Lawyers are often accused of making life
miserable for the rest of society (though not usually by a leg-
endary judge), but what if a lawyer is the victim? In an increas-
ingly popular retaliatory tactic, what if a litigator gets sued for just
doing hisjob? .
Fortunately, there are a number of
statutes in California that provide
effective defenses to claims common-
ly alleged against lawyers, including
defamation, tortious Interference
with business relationships, and
infliction of emotional distress.
Venerated-at common law, and codl-
fled in California for 125 years, the
litigation privilege found in Section f
47 of the Civil Code is one of the liti-
gator's strongest defenses.
Section 47 of the Civil Code pro-
vides: "A privileged communication John W, Amberg
J
I
or broadcast Is one made: (b) In
any ... (2) judicial proceeding ." The usual formulation is that
the privilege applies to any communications (1) made In judicial
or quasi-judicial proceedings; (2) by litigants or other participants
authorized by law; (3) to achieve the objects of the litigation; and
(4) that have some connection or logical relation to the action.
Silberg v. Anderson (1990) 50 Cal.3d 205, 212,
The litigation privilege In Section 47 (b) reflects the public poll-
r:::; of protecting the attorney's exercise of Independent judgment
on behalf of his or her client, without fear of retaliation. As the
California Supreme Court explained In the leading modem case,
Silberg v; Anderson. supra, the litigation privilege Is Intended to
encourage parties to feel free to exercise their fundamental right
of resort to the courts for assistance In the resolution of disputes,
tion of evidence, to encourage attorneys to zealously protect their
clients' Interests, and to require litigants to expose the bias of wit-
nesses or false evidence during trial, not In a subsidiary lawsuit.
privilege enhances the finality of judgments and avoids "an
unending roundelay of litigation, an evil far worse than an occa-
sional unfair result: Id. at 214. .
Traditionally, the litigation privilege existed to protect pub- I
lished communications in a pleading or during a trial from
(Continued on page 5) /'
II
II
 cutoff, which may be as much as six months before trial.
Electron.
Electronics in the Courtroom _ Continuer.
Continued from page 1 Do these reports require some reference, if contemplated, to
the use of moving or static graphics to illustrate the proposed testi- line bv US<
explains why you have not heard from me in this publication for mony? When do the actual graphics have to be exchanged and You plug i1:
some time on my favorite topic of electronics in the courtroom. My viewed by the court? Although there appears to be no specific laptop scn
other commitments. also regularly missed, were simply too great. timeframe, "early" is the most likely operative word. capabilities
"Scribble, scribble, scribble," as they said of Gibbon; "too many Graphics to aid in expert testimony are usually among the last This is 00
notes," as they said of Mozart (although I do not altogether consid- things done because issues need to be fine-tuned. Development of 'power" us
er myself in a class with Gibbon and Mozart). moving graphics (animations, motion pictures) can take a great tend to hrn;
Second, it allows me to assure those writers of the thousands of deal of time, so very early attention to these matters IS required But\\nh
cards and letters demanding: "What's new?" that there is nothing and often overlooked. in the cocn
new. You will still want video depositions transferred in part to I stretched it a bit when I said there was nothing new. There are power. Eve
laser disk for impeachment, video and static graphics to illustrate new developments, but they may be premature for the lawyer. vast amour
testimony, particularly with experts, and electronic overhead pro- instantivw
jectors. DVD is not here yet. (See infra) DVD
Internet be
Third and most important, my introduction hopes to highlight, The Digital Versatile Disk (nee the Digital Video Disc) is, in its levels. this c
in a light-hearted way, I believe, the point that it is never too early present commercial embodiment, a sort of souped-up laser disc. It etc. reside i
to begin preparation for your electronic presentation at trial. does the same thing as a laser disc with a few additional bells and Internet and
It's also never too early to start saving your money for your elec- whistles. It's smaller than a laser disc, the size of a CD-ROM. DVD It's reaily
tronic presentation at trial. holds more information so movies can be subtitled in several lan- connection f
A friend of mine just completed a case in a state court in guages and various high-end audio tracks can be more easily
Oklahoma. The parties went the whole nine yards in equipment - accommodated. It also gives a clearer picture than a laser disc,
a 90" screen for the jury, video/computer projection equipment, with no color bleeding. Even red is rock solid within the lines. It Recentiv,
smaller monitors for the court, the witness stand and counsel table, can accomplish these small miracles because it's a somewhat differ- panel on 8e
.audio equipment, laser disks, electronic overhead projector. The ent technology than a laser disc. This difference probably makes It Myjob was L
equipment was so extensive it required rewiring the courtroom unusable by a lawyer today but opens up vast possibilities for the video acruai;
with a stepped-up power source. The cost? A mere $500.000 with future. issues. and u
the plaintiff and defendant each contributing one-half. How did All of the digital entertainment technologies, laser disc, CO- an airline cat,
they split up the equipment after the trial? They didn't. They left RaM (the music kind) and DVD use a laser beam to optically read At the cor
it in the courtroom for future lucky plaintiffs and defendants who small pits on the surface of the disc. These pits contain ones and sinking and 2
will reap the benefits without the cost. zeros. which are scanned, decoded and eventually re-rendered (Even this I
back in their analog form. The pits on a DVD are smaller and clos- Swain & Moor
The Basics Require Early Decisions
er together than on a laser disc. That's one reason for its extraordi- I set the s(
I still feel the most effective use of electronics in the courtroom nary storage capacity. However, the second reason is more impor- plaintiff in a s
is the laser disk for impeachment and the laser disk to illustrate tant to lawyers. mentwas: -T
expert testimony. (The electronic overhead projector is wonderful On a laser disc, every single frame of whatever you install down with the
and you will use it often and effectively if the courtroom is already resides as a complete image. whether picture or document. This a roar while \\
wired; you'll hardiy go to this expense just for the electronic over- allows you to show video and freeze on any frame, or display docu- the final 30 se
head.) ments which are stored one frame at a time. DVD does not mcor- BarbaraStany;
To impeach, you require the video depositions of your adver- porate every part of every frame onto the disc. Rather, complex Believe me.
saries. These are then edited to preserve just the areas where you algorithms are applied which "interpret" each scene and eliminate surprise view;
suspect you may not get the same good.answer in the courtroom "unnecessary" information. Thus, if in a movie scene, two charac- motion picture
when you ask the same question. If you don't get that answer, ters are talking before a blue sky background, the coding will note Two issues:
you'll immediately play back the deposition testimony. the first frame in which the blue sky appears. and then instruct the persuade? Th
This requires an early decision. You must start Videotaping rest of the sequence to incorporate a blue sky background through flrst, Of the so;
depositions from the beginning. Your deposition notice must state its conclusion. It's there in the algorithm but it's not there on every me and said, -:
you are going to videotape it. Pressures at the beginning of a case frame of the disc. Your freeze capabilities are limited. courtroom.
to keep costs down (client: "Don't worry, they'll settle the minute These algorithms are quite complex and are custom to each The answer
you ... ") may militate against Videotaping those initial depositions. motion picture DVD now being delivered. Thus, the algorithms will be rememb
If the case is important, give much thought to this decision. Miss controlling The Wizard of Oz do not control Blade Runner. the wrong impr
the opportunity, and it's gone forever. Preparing a DVD moVie is said to be a time-consuming. expensive, just precisely m
Editing these tapes is a major chore and requires an early begin- delicate process, and if the algorithms are not done with great care, giving you some
ning. Some form of selection should start right after the deposition the final result is disappointing. I don't see hi:
is taken. At least, mark up the good parts in the typed transcript. This is not for lawyers yet. further than the
Try to get the best transcript-video synchronization you can. Soon one will be able to write to a DVD (all current releases are benefit of the gr
This is a function between the court reporter and the videographer "read-only"). A DVD can store information on both sides of a disc gets of any grapl
and is seldom coordinated effectively. I have been told that there and in double layers. Initial capacity estimates are 17 gigabytes. Unless ... at S(
are electronic connects which allow the transcript to be precisely Even without the algorithms. this is immense capacity and should procedures but i
coordinated with the tape in real time - that is, while the deposi- accommodate all the visual information any lawyer might need in empanel your jt
tion is being taken. I have never been able to hire a team with such the largest trial. If you can write to it from your own computer, the them home to w
a deVice. Some court reporting organizations will go back and sync ability to create valuable visuals at a reasonable cost on your own disc. Every lawy
the tape to the transcript by hand, but this is expensive. The best appears to be right around the comer. (However. for companson, Now that I tl
I've been able to do is to get a transcript with time codes that the Internet started in 1969. Feel slightly late?) rithms could be ,
roughly match the time codes on the tape. Insist, at least, on this;
The Internet winner, compute
it's a great help.
Several law firms with more advanced technology units are Tune no longe
As the Federal Rules of CiVilProcedure progress toward perfec-
developing the "virtual desktop." This allows a user to access with your electro.
tion (another ribaldry, of course) it seems expert reports may
become due before the complaint is flied. In the Central District, hislher office computer desktop from anyplace that has a phone
they are now due by local rule eight weeks before the discovery (Continued next page)
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Electronics in the Courtroom _
Continued from page 2
line by use of a laptop and a modem. It's done on the Internet.
You plug in your modem, access~ specific Internet site, and your
laptop screen shows your office desktop screen with the exact
capabilities, access to servers, etc., as if you were in your' office.
This is no small technological feat and may be available only to
"power" users for a while. Slow transmission lines also currently
tend to limit the usefuiness.
But within three to four years it's possible to visualize a laptop
in the courtroom that has access to a law firms entire computer
power. Everything in the office system is available in the court, so
vast amounts of information can be accessed and displayed
instantly to the trier of fact. When satellite connectivity to the
Internet becomes commonplace and speed reaches satisfactory
levels, this could be a courtroom tool. All your video, documents,
etc. reside in youroffices MIS Department. You sign on to the
Internet and bring them into the courtroom.
It's really a race between the DVD and the Internet satellite
connection for the next great courtroom application.
Theatrical Motion Pictures
Recently, at a Ninth Circuit judicial conference, I chaired a
panel on Electronic Presentations of Evidence in the Courtroom.
My job was to round up and show some excellent and provocative
video actually admitted at trial to develop and explain certain
issues, and then to shut up while the federal judges opined. I had
an airline catastrophe, a murder and a Fifth Amendment issue.
At the conclusion, I slipped in a 3D-second shot of the Titanic
sinking and asked how that would go over in closing argument.
(Even this I stole, since I had heard that Tom Barr of Cravath,
Swain & Moore had done something similar.)
I set the scene by stating that it was closing argument for the
plaintiff in a securities fraud case against accountants. The argu-
ment was: "The accountants slink away while the shareholders go
down with the ship." Flash to the Titanic going straight down with
a roar while woebegone people paddle away in lifeboats. (This is
the final 30 seconds of Titanic, a 20th Century-Fox picture starring
Barbara Stanwyck and Clifton Webb, available on videotape.)
Believe me, it shows better than it reads.' On a large screen, a
surprise viewing of a spectacular 30 seconds from a theatrical
motion picture explodes.
Two issues: (a) will it be allowed? and (b) does it work, I.e.,
persuade? The answer to (a) is "perhaps." Show it to the judge
first. Of the some 300 judges at the presentation, none came up to
me and said. "Not in my courtroom." Of course, I wasn't in their
courtroom.
The answer to (b) is "perhaps." It certainly packs a wallop and
will be remembered. But it may be remembered as just a "stunt,"
the wrong impression. The key is to pick the right 30 seconds that
just precisely make the point. I am not recommending this - only
giving you some ideas.
I don't see how we can push electronics in the courtroom much
further than the use of theatrical motion pictures, which have the
benefit of the greatest technlcal competence and the highest bud-
gets of any graphic presentation anywhere.
Unless ... at some future date, the trial generally follows current
procedures but it's all on DVD. Just bring your 5 112"disc to court,
empanel your jury, give each juror a copy of the disc and send
them home to watch. Or for a bench trial, just mail the judge your
disc. Every lawyer his own auteur.
Now that I think of that, perhaps artificial Intelligence algo-
rithms could be developed that would scan your disc, declare the
winner, compute the damages, print the decision and mail it out.
Tune no longer flies; it goes by at the speed of light. Start early
with your electronics.
-Thomas J. 'McDennott
The Extraterritorial Reach
of U.S. Antitrust Law
I n a decision with profound implica-
tions for companies either with a direct business presence in the
U.S. or conducting conunerce through U.S. subsidiaries or partners,
the U.S. Court of Appeals for the First Circult recently held that a
Japanese corporation could be prosecuted for criminal antitrust
violations even though the underlying acts had occurred
entirely outside the U.S. United States vs. Nippon Paper
Industries Co.. Ltd 1'997WL 109199 (Ist Clr, March 17.1997).
This case represents an important extension of the principle
that overseas business activities which
were meant to produce, and did in
fact produce, a "substantial effect" on
U.S. conunerce will be subject to the
.
U.S. antitrust laws, even if the offend-
ing conduct took place entirely out-
side the US. Although this principle
was recently applied by the U.S.
Supreme Court In 1993 with respect
to civil antitrust actions in Hartford
Fire Ins. Co. v California, 509 U.S.
764, 125 L.Ed.2d 612 (1993). the
Nippon. Paper decision is the first
decision applying this principle to
criminal prosecutions initiated by the
U.S. government. Peter S, Selvin
The Facts
According to an indictment issued by a federal grand jury, repre-
sentatives of Nippon Paper Industries Co., Ltd. ("Nippon") held a
series of meetings in 1990 in Japan with other manufacturers of
thermal fax paper. Those meetings allegedly led to an agreement
to fix prices of thermal fax paper throughout North America.
Further according to the indictment, Nippon and its co-conspir-
ators implemented this plan by selling the paper to unaffiliated
trading houses on the condition that those trading houses would
charge inflated prices for the paper to buyers in North America. In
fact, the trading houses, through their respective U.S. subsidiaries,
resold the paper in the U.S. market at the artificially high prices -
all allegedly pursuant to the agreement involving Nippon and the
other manufacturers.
The indictment alleged that Nippon had sold approximately $ 6
rnillion for import into the U.S. market and that by reason of the
foregoing scheme Nippon's activities had a substantial adverse
effect on commerce in the U.S. and unreasonably restrained trade
in violation of Section One of the Sherman Act (15 U.S.C. § I).
Nippon moved to dismiss the indictment on the ground that the
conduct attributed to It had all allegediy occurred outside the U.S.
and hence could not constitute an offense under Section One of the
Sherman Act. The U.S. District Court agreed with Nippon and dis-
missed the indictment, but the First Circuit reversed, holding that
Nippon could be prosecuted under Section One if Its activities were
intended to, and in fact did have, a "substantial effect" on U.S.
conunerce.
The Holding of the Court
The Court's conclusion was fundamentally based on its con-
struction of Section One itself. In this regard, the Court drew sub-
stantially on the U.S. Supreme Court's decision in the Hartford
Fire Ins. case, which had determined that a civil action for dam-
ages by private parties under Section One could be maintained in
(Continued on page 4)
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