Ad Astra Law Group, LLP

Not Exactly A Midsummer Night’s Dream for Some

The Ninth Circuit has handed down two significant decisions under the Computer Fraud and Abuse Act in the past week. In the first decision, United States v. Nosal, the court affirmed the CFAA conviction of David Nosal, a former Korn/Ferry employee who left to start his own competing business with several co-workers. After Nosal and his co-workers left, Korn/Ferry revoked their computer access credentials. Nevertheless, the departed employees used the computer access credentials of Mr. Nosal’s executive assistant—who remained at Korn/Ferry—to obtain access to the company’s proprietary database. The court held that “without authorization” under the CFAA was unambiguous and means “accessing a protected computer without permission.” Nosal argued that since his former executive assistant was authorized to access the company’s computers, he had not violated the statute. Not so, said the court: “once authorization to access a computer has been affirmatively revoked, the user cannot sidestep the statute by going through the back door and accessing the computer through a third party. Unequivocal revocation of computer access closes both the front door and the back door.” Ad Astra’s David Nied and Michael Dorsi, and former associate, Keenan Ng, submitted an amicus brief on behalf of a former client and in support of the United States in which they discussed the importance of the remedies under the CFAA to small, entrepreneurial businesses in the Bay Area. You can read The Recorder’s summary of the decision here. The Recorder quoted Mr. Nied’s observation that the decision “confirms that [small businesses] have a tool available to them under the CFAA to protect their business, their intellectual property, and their trade secrets from former employees.”

In the second decision, Facebook v. Vachani, the court concluded that a social-media aggregator, Power.com, and its principal, Steven Vachani, had violated the CFAA by continuing to use Facebook users’ accounts to send spam email and messages to other Facebook users to promote Power.com after Facebook had sent them a cease and desist notice. Like Mr. Nosal, the defendants argued that they had not violated the CFAA because they had the consent of the Facebook users to send out the emails and messages. The Ninth Circuit, however, concluded that the cease and desist notice revoked any permission the defendants had to use Facebook’s computers and that the defendants used Facebook’s computers “without authorization” after that point in time. The court returned the case to the trial court to re-calculate Facebook’s damages from the date of the cease and desist notice. The takeaway for small business owners is to send out a cease and desist notice the moment you become aware that a third party may be accessing your computers or cloud-based accounts without permission. You can read more about the decision in The Recorder.

Controlling Your Client’s Web Presence is Key for Plaintiffs

Author: Katy M. Young

I had previously blogged about the dangers of blowing your defense (or even inviting a lawsuit) based on social media activities. This post will examine the importance of controlling your client’s web presence when your client is the Plaintiff. In a lawsuit, the Plaintiff usually has the harder job because it is Plaintiff’s burden to prove each element of her cause of action and her damages by a preponderance of the evidence. Defendants sometimes have an easier time since a verdict in Defendant’s favor can be achieved by knocking out elements of a Plaintiff’s claim. Evidence comes in many forms, and these days, the internet is fertile ground for evidence gathering.

Recently, I represented a Defendant in a lawsuit filed by someone he used to be very close to. The Plaintiff claimed millions of dollars in damages and even put on expert witness testimony to justify the multi-million dollar demand. Both parties had previously been very active internet users, but once he was named in the lawsuit, my client heeded my advice to shy away from social media lest he make matters worse for himself. Plaintiff’s lawyers were able litigators and I am certain that they gave their client the same warning, but their client did not listen. Perhaps she didn’t understand that information found online is akin to shouting the same message in ye olde public square. Perhaps she was lulled into believing her activities would go undiscovered because she didn’t use her real name as her username and the damning information was located on a dating website. Perhaps she underestimated Ad Astra Law Group’s abilities to track her online. What is certain is that Plaintiff posted information on her online dating profile which directly undercut her expert witness’ testimony about the extent of her damages. Perhaps she was lying to her potential dates about the true state of things. Perhaps she lied to the expert witness who rendered the opinion on her damages. What is certain is that she lied to someone, and all that mattered was that she lied. It didn’t so much matter whether what she posted was true, it was simply that what she posted contradicted her expert’s testimony on damages. Even if she could have proven that the Defendant was liable for her harm, the jury wouldn’t have known what to believe about the extent of her damages. The Plaintiff had badly damaged her own credibility. The case settled quickly after our online discovery.

A word to the wise: the web is the modern town square and anything you say there can come back to haunt you. Whether Plaintiff or Defendant, the best practice is to cease your online activity entirely- but don’t delete what you previously posted, for you may end up spoliating evidence…but that is a blog post for another time!

Four Key Ways Attorneys Can Help an Expert Witness Perform their Best

Scripta Ad Astra is extremely pleased to present a guest post by Michal Longfelder, Esq. Ms. Longfelder is an expert witness in the field of HR law and workplace investigations.

Author: Michal Longfelder, Esq.

We, as expert witnesses, often provide a necessary and critical part of your litigation strategy. By speaking to unique questions or facts, we can be a significant element of a successful outcome.

1. Know why you want me as your expert witness and for what purpose

Like most expert witnesses, while I can opine on a range of subject matters; I need to know exactly how I can be most helpful. Take the time to learn about and understand my background so you are sure that I am best suited for this case. For example, many attorneys do not realize that the HR function has evolved into specific areas of specialization and, as a result, many HR professionals no longer have a broad generalist background but rather, a narrow, expertise in a particular HR function such as organizational development. If your case requires expertise in disability accommodations, make sure that the expert has substantial experience in that particular sphere of the HR function.

2. Retain me as a consultant in advance of retaining me as an expert

Many attorneys, in an earnest effort to keep litigation costs down, do not retain an expert until shortly before depositions begin. By retaining me as a consultant early on and under your direction, earlier, we will both know how I view your case’s relative strengths and weaknesses without being subject to discovery. Questions such as whether there are enough “good facts” to make it worth litigating are better answered sooner than later. Retaining me early as a consultant also affords you the opportunity to consider the settlement value of your case or whether my opinions have implications for other aspects of your litigation strategy.

When carefully selected and utilized, expert witnesses can strengthen your case to opposing counsel and a jury. By planning in advance why, when and how to make the best use of my expertise and experience, you and your client will have confidence in the expert witness you have selected.

3. Take the time to prepare me for deposition

I am also an attorney, so counsel often assumes I do not require much, if any, prepping for deposition. Here, you are the expert on the case and I need to learn from you. Tell me about the weaknesses you perceive will be a challenge. Most importantly, tell me what questions I should expect from opposing counsel so I can think about how I will respond.

4. Think about my role at trial

Will you want me in the role of “storyteller” who summarizes the relevant information and provides guidance as to how the jury should assess and interpret the information presented by others? Or would I be more useful testifying on a discrete but critical issue in the case? Perhaps I will be part of building the facts necessary to effectively try or defend the case? Finally, consider whether I will be more effective testifying for a shorter or extended period of time.

Summary:

Michal Longfelder, founder and principal of Employment Matters, is an employment attorney with an exclusive focus on workplace investigations, internal mediations and executive coaching. She may be reached at WWW.EMPLOYMENTMATTERS-ML.COM michal@employmentmatters-ml.com

Tel: 415-297-3285

The Legislature’s (Temporary) Overhaul of the Demurrer Procedure

Author: Scripta Ad Astra Staff

A party in a civil action may object to a complaint, cross-complaint, or answer by demurrer. (See Cal. Code Civ. Proc. § 430.10.) Demurrers are typically filed when the responding party alleges the pleading fails to state a cause of action. Unless the complaint fails to state a claim based on any legal theory, and the defect cannot reasonably be cured by amendment, the court will give the responding party leave to amend. Subsequent amended pleadings are vulnerable to subsequent demurrers, and extend the time the case is pending. This motion work is expensive to litigants, and clogs the already over-burdened court system.
The Legislature passed amendments to the demurrer procedure effective January 1, 2016 through January 1, 2021, at which point the statute will self-repeal its provisions. (See Cal. Code Civ. Proc. §§ 430.41, 472, and 472a.) In most civil actions,[1][1] the parties are now required to engage in a specific meet and confer process before filing a demurrer. The court has the authority to order the parties to a conference to continue the meet and confer process. The amendments also create a “three-strikes-and-you’re-out” limit to the number of times a party can amend its complaint in response to a demurrer filed before the case is at issue, and place a new time limit on the responding party’s ability to file an amended pleading prior to the hearing on demurrer. Now, the amended pleading must be filed and served before the date for filing an opposition to the demurrer. The amendments also limit the grounds upon which a party demurrers to an amended pleading following a sustained demurrer to issues that could not have been raised by the prior demurrer.

Time will tell whether these amendments will provide a substantive filter to the demurrer process, and help decrease the court backlog in Law and Motion Departments.

[1][1] This section does not apply to the following civil actions: (1) An action in which a party not represented by counsel is incarcerated in a local, state, or federal correctional institution; and (2) A proceeding in forcible entry, forcible detainer, or unlawful detainer

Tips to Help Your Organization Become Data Breach Ready in 2016

Author: Meaghan Zore

Are you ready for a data breach? At least 222 data breaches occurred in 2015 affecting at least 159,436,735 records, according to the Privacy Rights Clearinghouse, a California nonprofit corporation that tracks trends in data privacy. There’s little reason to believe that 2016 is going to see a downtrend in these numbers. Already this year, Time Warner Cable reported a data breach that affected 320,000 of its customers’ records.^{^[1]} Given these numbers, it’s no longer a question of “if” a system will be breached, but “when.”

January 28th is Data Privacy Day. Here are 3 steps to becoming data breach ready in 2016:

Establish a Privacy Training and Awareness Program

When we hear of data breaches, often, the image of a nefarious hacker comes to mind. However, 91 of the 222 data breaches in 2015 were caused by unintentional actions, such as misdirecting emails containing sensitive information, lost laptops or smartphones, and improper disposal of non-electronic data. These poor data handling practices resulted in a minimum of 6,090,152 breached records. Having a world-class privacy policy is useless if your organization’s employees are unable to put the policy into practice. When employees understand your organization’s data handling expectations, including how to effectively implement your company’s privacy policy into their day-to-day work practices, data breach incidents decrease.

Conduct a Privacy Impact Assessment

A Privacy Impact Assessment (PIA) is an analysis of how personally identifiable information is collected, used, shared, and maintained within an organization. Examples of various PIAs can be found on the Federal Trade Commission’s website. You can use a PIA to manage data risks and assess the benefit of engaging in certain data handling practices. Conducting a PIA will help you to better understand and address your company’s vulnerabilities.

Develop a Data Breach Response Plan

A data breach response plan is a course of action intended to reduce the risk of unauthorized data access and to mitigate the damage caused if a breach does occur. At a minimum your data breach response plan should consist of the following: (1) a point person to take charge in the event of a data breach and act as a liaison between various stakeholders and partners; (2) contact information for relevant stakeholders and third-party service providers; (3) procedures for analyzing and containing the damage caused by a suspected data breach; (4) measures to mitigate the damage done and prevent future breaches; and (5) relevant insurance and credit bureau information.

In 2015, companies incurred an average cost of $154 per breached record and were exposed to a consolidated total cost of $3.8 million per data breach.^{^[2]} Breaches are going to happen, but preparation will be key to minimizing the damage done to your organization and your clients in 2016 and beyond.

About the author: Meaghan Zore, founder and principal of Zore Law, advises entrepreneurs and emerging companies on a wide range of legal matters such as business formations, intellectual property issues, commercial agreements and data and privacy considerations. In addition to her practice, she teaches Advanced Civil Procedure: Electronic Discovery and Information Privacy law at Indiana University Robert H. McKinney School of Law. She may be reached at www.zorelaw.com meaghan@zorelaw.com. Tel: 415-347-0004

^{^[1]} http://www.privacyrights.org/data-breach

^{^[2]} http://www-03.ibm.com/security/data-breach/

Fee Arbitration: What is a “True Retainer”?

Author: Katy M. Young

Ad Astra Partner Katy Young represented pro bono client R. Martinez in a fee arbitration against her daughter’s former criminal defense attorney and reached a settlement whereby the attorney agreed to pay back every dime that Mrs. Martinez disputed at arbitration- and then some!

Mrs. Martinez’ daughter had been charged with murder in Alameda County. The Martinez family cobbled together nearly everything they had to write a check for the attorney’s $25,000 retainer. Mrs. Martinez alleged that she never signed any written agreement with the attorney, but that the attorney had said he would represent Mrs. Martinez’ daughter up to, but not including, trial. Over the course of the next year, Mrs. Martinez felt that this attorney was not an effective advocate for her daughter and made some crucial substantive and procedural errors.

Eventually, Mrs. Martinez retained The Worthington Law Centre, friends of Ad Astra and stellar criminal defense attorneys with offices in Salinas and San Francisco. When Tom Worthington took over Mrs. Martinez’s daughter’s defense, The Worthington Law Centre contacted Ad Astra for assistance in recovering the unused portion of Mrs. Martinez’ $25,000 retainer which was being held by the previous attorney who maintained that the $25,000 was non-refundable, which in ethics parlance means that he asserted that the $25,000 was a “true retainer.”

In response to Ad Astra’s inquiries, the attorney produced to us a document that he claimed was the written fee agreement between he and Mrs. Martinez, but which listed the $25,000 retainer as having been paid by credit card and non-refundable, but that he would represent the client up until the trial at which point a further retainer would be required. Upon questioning, the attorney eventually admitted that this purported fee agreement had not been signed by his actual client- Mrs. Martinez’ daughter- but nevertheless maintained his position that the agreement was valid and entitled him to keep all $25,000 in the face of Mrs. Martinez’ allegation that he owed her a $19,000+ refund. In the fee arbitration papers, Ad Astra’s Katy Young had argued that the attorney owed Mrs. Martinez over $19,000 for failure to have a signed fee agreement with his actual client (and not just the payor), producing a fraudulent document purporting to be a fee agreement between he and Mrs. Martinez, failing to keep contemporaneous time records, and for improperly characterizing the $25,000 as a true retainer when it did not meet the one criterion for true retainers: the retainer was for his time on the matter up to trial and not for his continued availability regardless of time billed. True retainers are actually quite rare since they simply ensure the attorney’s availability to work for the client and have no bearing on any actual work performed. In other words, if the retainer is payment for work then it is not a true retainer and must be refunded to the extent that the attorney’s work was worth less than the retained amount.

Finally, the parties went to fee arbitration through the State Bar of California. On the day of the arbitration, the appointed arbitrator encouraged the parties to try to settle before commencing the proceeding after expressing doubts about the attorney’s defenses. After 15 minutes of discussions with Katy Young, the attorney agreed to pay back all $19,000 that Mrs. Martinez had requested, plus the filing fee for the arbitration!

Attorneys: beware the “true retainer” and always keep contemporaneous time records, even if your case is flat-fee or contingency.

Clients: always get a written agreement with your attorney, be sure to read it and question it where you feel you need more information, and negotiate the terms if anything is unacceptable to you. Make sure you know what you are getting into!

Silicon Valley: “Two in the Box” References Two of Ad Astra’s Cases

Author: Katy M. Young

In HBO’s show Silicon Valley, the story takes place in one character’s home which he opens up to tech entrepreneurs who need a place to live and work in exchange for equity in their companies, called Hacker Hostel. In the episode titled “Two in a Box,” the characters struggle with landlord/tenant issues that are novel in the age of Airbnb. You can read a synopsis of the plot of the episode here.

Ad Astra had a hand in both of the landlord/tenant issues featured in this episode.

First:

“With Pied Piper on its feet, Jared announces he’s moving out of Noah’s guest house and back into his condo, which he’s been renting out on Airbnb. When Jared arrives at his condo he finds his tenant, Ludwig, is still there, claiming he can’t afford to live in the area because people like Jared have raised the cost of living. Ludwig refuses to leave, so Jared begins the long, expensive process of eviction.”

This part of the episode has many similarities to Huang v. Hingorani, Ad Astra Partner Wendy Hillger’s AirBnB-neighbors dispute case which was written up in the San Francisco Chronicle here.

Essentially, the Jared character on Silicon Valley learns the tough truth as the landlord in our case: You get a long, expensive eviction fight. If you rent your property to one who pays to be there for more than 32 days, even if the rental agreement came through AirBnB, the SF Rent Board has held that the renter acquires traditional tenancy rights. Therefore, to remove a short-term vacation renter who pays to stay more than 32 days yet refuses to leave and keeps paying rent, the landlord’s only course of action is an eviction.

Here is the second issue in the episode:

“Erlich shows the Hacker Hostel to a new tenant, and later tries to kick out Jian-Yang so that a new incubee can move into his old room. Jian-Yang doesn’t take the news well and starts freaking out. Later, after Erlich unwittingly reveals why Jared is moving back into the garage, Jian-Yang decides to use California’s tenant laws to his own advantage and also refuses to move out.”

In 2015, Ad Astra represented one of the defendants in the lawsuit Housing Rights Committee of San Francisco v. HackerHome. HackerHome is allegedly a company that rents living space to tech entrepreneurs via the AirBnB platform in violation of San Francisco’s short-term rental law. In Silicon Valley, the storyline begins in Erlich Bachman’s “Hacker Hostel,” which mirrors the alleged HackerHome activities in both name and function. While living and working in the Hacker Hostel, the main character Richard develops an algorithm meant to help musicians avoid copyright troubles but ends up creating the world’s most powerful file compression technology and becomes the darling of Silicon Valley investors after winning the Tech Crunch competition. The character who owns the Hacker Hostel wants to remove one of the tenants, Jian-Yang, whose company is underperforming so that he can make room for more people involved with Richard’s more successful business, but upon listening to Jared’s problem with his Airbnb renter, Jian-Yang realizes that he’s lived in the Hacker Hostel long enough to acquire tenant’s rights like Jared’s tenant and announces that Hacker Hostel will have to evict him because he’s not leaving.

Now Erlich Bachman and Jared each experience the same landlord/tenant problems that Ad Astra’s clients have had to tackle, although thus far, no one has sued Erlich Bachman for his Hacker Hostel activities.

I was particularly thrilled by this episode of Silicon Valley because usually it relates to my husband’s work in big data cloud computing and the show’s creator goes out of his way to make the show full of inside jokes relevant to tech workers in the real Silicon Valley. This time, our cases featured prominently in the story line and I got to be on the inside of the inside jokes!

What to Expect When You are Going Through a Divorce

Author: Regina Franco

Divorce takes time.

Once you decide to file for divorce, the next thing you want to do is quickly move on to the next chapter of your life, but divorce doesn’t happen that quickly. There is a mandatory waiting period required by California law and no judgment of divorce can be entered sooner than 6 months from the date the Petition for Dissolution was served onto the Respondent.

While 6 months may feel like a long time, there is a lot of paperwork that needs to be done and taking the proper time to work through your case will oftentimes prove to be time well spent. Divorce can be complicated. A divorce is essentially creating two new families out of one. This requires careful thought in order to make sound decisions about support, property division, and custody.

Divorce is not easy and over the course of at least 6 months, divorce will consume you. It is important that you choose your attorney wisely as the right relationship will make a positive impact on you as you transition into your new life.

What is CCP 170.6, and How do Attorneys Use It?

Author: Brian M. Worthington
The situation involving embattled Santa Clara County Court Judge Aaron Persky took a new turn this week when the Santa Clara District Attorney’s Office used California Code of Civil Procedure Section 170.6 to disqualify Judge Persky from an upcoming case. Some of our readers may be wondering, What is CCP 170.6?; When is it used?; and How do attorneys use it? We are here to answer those questions.

CCP 170.6 allows a party to a case (or the attorney representing that party) a one-time opportunity to disqualify a judge who is prejudiced against a party or the party’s cause. It applies equally to criminal and civil cases and has varying time restrictions depending on the type of calendaring system used in the County in which the case is being heard. A party can use CCP 170.6 to disqualify a judge assigned for all purposes, a judge assigned for a trial, or even a judge assigned for a specific motion.

The disqualification must be done in writing or orally under oath. The legal basis for a 170.6 disqualification (sometimes called “papering” a judge) is the bias against a party or cause. But in practice CCP 170.6 has almost unlimited applications—we have seen situations where a judge is disqualified due to personal conflicts with a particular attorney; where a judge has a blind spot toward a particular legal issue; or where a judge is perceived to have a habit of punishing too harshly or too leniently in particular criminal matters.

The ability to exercise a CCP 170.6 disqualification is a major tactical weapon for an attorney. For instance, if an attorney is handling a case where police misconduct is a major element of the defense, the attorney will want to avoid judges with strong law-enforcement ties or history of disregarding police misconduct. CCP 170.6 allows the attorney to do that. But an attorney must exercise great care in making the decision because the attorney can only choose which judge to disqualify, not the new judge assigned. On some occasions, the newly assigned judge may be just as bad on the particular issue as the original judge, or may even be worse on other issues that can come into play. Even using a disqualification and getting a great new judge is not always a cure-all for the client because if the new assigned judge is too favorable, the opposing party can turn around and disqualify the new judge. This leads to an interesting tête-à-tête between the opposing attorneys.

We hope this brief entry helps explain what CCP 170.6 is and how attorneys use to try help their clients. Thank you for reading.

Attorney Communication – Sharing Your “Likes and Dislikes” to Improve Our Services

Author: Scripta Ad Astra Staff

At Ad Astra, we believe attorneys are not only professionals with extensive knowledge of the law, but also counselors and advisors to their clients. We hope to constantly better our services by improving our communication skills, and by tailoring our services to our clients’ specific needs. I recently attended a Continuing Legal Education course in which in-house counsel from various prominent businesses in the Bay Area explained their “likes and dislikes” regarding attorney-client communications. The following is a list of some of the communication skills that all the speakers agreed on:

write brief, concise, and well-written analyses of issues;
respond to questions quickly;
provide regular updates on outstanding issues;
allow time to review documents by making internal deadlines, so they client can manage his or her schedule accordingly;
make the client’s life easier by preparing correspondence that can be forwarded to high-level executives; and
provide recommendations while also explaining risks, using the lens of the client’s mission.

We recognize that not all clients have the same communication preferences, and encourage all of our existing and prospective clients to share their own “likes and dislikes” with us because we believe that better communication always translates to better representation.