February 24th, 2017

Melania Trump’s Lawsuit and Tax Returns

The other day I ripped Melania Trump‘s lawyers for stupidly claiming — in a defamation lawsuit against those that called her an escort while she was a model — that she had lost her once-in-a-liftime opportunity to capitalize on being the most famous women in the world for the next few years.

Personally, I thought the lawyers had committed legal malpractice in having done so, as it exposed her to a (well-deserved) torrent of scorn and derision.

She has now amended the lawsuit to take out the offending material.

But you know what is left? She still claims economic loss, and that is the subject of today’s post. Because if you claim economic loss, then one thing you can bet your last dollar on is that the defendants will say, “prove it!”

And part of that proof will be her tax returns, so that competing expert economists can do an evaluation of what she was making before (and how she was doing it), and how (if at all) it was affected.

First, the nuts and bolts of the claim from the Amended Complaint:

33.  The defamatory statements in the Article have caused Plaintiff damages, including to her reputation and to her business interests and prospective economic opportunities, as well as causing significant humiliation in the community and emotional distress.

So she has not only claimed a per se injury for being called a prostitute, she alleges damage to her business interests and prospective economic opportunities.

Now tax returns, in New York, are jealously guarded by the courts.  A party seeking to compel their production must make a strong showing of overriding necessity.

Melania Trump’s case is in New York County, the First Department, but all four of New York’s appellate departments have a high bar to hurdle.

But at least some of her returns, it seems, will meet that burden. And how much of her interests are intermingled with her husband’s? Nobody knows, but any intermingling at all could subject his returns (or parts of them) to discovery.

In one of the most oft-cited cases on the subject in the First Department, the court reversed a trial court justice that had granted the disclosure of tax returns in a partnership dispute. In Gordon v. Grossman the court held that “It was an improvident exercise of discretion to compel disclosure of the defendant’s tax returns. Because of their confidential and private nature, disclosure of tax returns is disfavored.”

And in Matthews Indus. Piping Co., Inc. v. Mobil Oil Corp., the lower court denied the defendants request to peak into the plaintiff’s returns and the First Department affirmed that decision. The court wrote that “The disclosure of tax returns is disfavored due to their confidential and private nature. Consequently, a party seeking to compel their production must make a strong showing of overriding necessity.”

Similar language comes from the Second Department, where the rule is that “A party will not be required to produce income tax returns in a particular action unless the record presents a strong necessity for such disclosure in order for the party to prove its cause of action or defense.” In Active Fire Sprinkler v. American Home, that court held that there must be “some showing that the particular information in tax returns has some specific application to the case.

Now here’s the kicker: Few people will want to donate money for any kind of legal defense fund, if one is needed. Because who wants to get in bed with the kind of d-bag that would write crap like that without evidence? (I have no idea if there is insurance coverage for this.)

But remember Peter Thiel funding the Terry Bollea (Hulk Hogan) sex tape lawsuit against Gawker?

Might there be some people willing to pony up money to see this matter go through discovery just to get to those tax returns?

Even if the returns are subject to a confidentiality agreement, all bets are off in a trial that takes place in open court.

Conclusion: Melania Trump has exposed herself, and potentially her husband, to having her tax returns revealed in discovery.

The only way out of this for her to drop her claim of economic loss entirely.

 

 

 

August 7th, 2013

Can New Protective Order Law Be Used for Facebook Demands?

Facebook-logoThe New York Law Journal has a short article today on an expansion of New York law regarding protective orders from over-reaching discovery (CPLR 3103(a)). Governor Cuomo signed it yesterday.

While it has long been the law that any person from whom discovery is sought may object to a discovery demand, the new amendment now includes objections regarding others who may merely be mentioned in the discovery being sought.

This can, as I’ll explain in a moment, be used to protect against many aspects of Facebook, social media and email demands.

The rationale for the law, however, didn’t have anything to do with Facebook. This is the simple (and quite logical) reasoning from the memo accompanying the bill:

Not addressed [in the current law] is a person about whom records are being subpoenaed from either a party or another nonparty. By way of example, if an accountant is subpoenaed to produce the records of clients who are not parties to the litigation, it is unclear under the present statute whether the non-party clients would have standing to object to the production of their records.

This is easy to understand if an accountant’s records are sought. Just because there may be a lawsuit regarding one aspect of your accountant’s practice, having nothing to do with you, does that mean that your private records should be disclosable? Shouldn’t you at least have standing to object?

The law was proposed by Chief Administrative Judge A. Gail Prudenti and her Advisory Committee on Civil Practice to fill a procedural gap.

But what if Facebook records are sought? These requests are getting more common as the months go by, and I’ve collected a few New York decisions on the matter.

The scenario in which it would come up is easy to foresee: Joe busts his arm in a car collision (not an accident). He writes about it on Facebook. His friends, who have their privacy settings maxed out, respond. Perhaps one of them jokes in a comment or private message, “You been drinking again?”

Are the comments and messages of the friends discoverable? The law here, of course, is not whether those comments may be admissible at trial, but merely discoverable. Can the defense lawyers go on a fishing expedition through the comments and messages of friends and their lives? These friends clearly have an expectation of privacy, as Facebook has explicitly told them so.

It seems to me that this new law can, will, and should, be used to combat over-reaching Facebook demands. Expect to see decisions on this in a year or two.

 

December 5th, 2012

How Not To Ask A Question

Digging through an old file on a settled case, I came across some notes that I made during a deposition I was defending. It was a simple hit in the rear auto case and I jotted down some of the questions the defense lawyer asked.

Each question, it seemed, was more wretched than the next. None were spoken in plain English:

What were the points of impact between your vehicle and the adverse vehicle?

Were there any traffic control devices?

Did  you notice blood on your person?

Did you get out of the vehicle yourself or did you get out with assistance?

What was the nature of your conversation?

The worst part about these questions, I think, is that the lawyer was working from a script.

I’m fairly confident that any 10-year-old could ask better questions. All you really need, to get this type of basic information, is natural human curiosity to find out what happened. It was the tortured attempt to sound like a lawyer that made me laugh to myself and take notes.

I was reminded of those notes yesterday when I read Bryan Garner’s blog post:  Is there ever a good reason to use “hereby” in your writing?

It isn’t really hard to abuse the English language. All you need to do is go to law school.

Perhaps some young lawyers out there will recognize themselves as they struggle to ask deposition or trial questions.

 

October 5th, 2012

App Court: You Ain’t Gettin’ Those Facebook Files

Another defendant attempts to get access to a personal injury plaintiff’s Facebook and other social media accounts, and another defendant is shot down by an appellate court.

This one comes out of New York’s Appellate Division (4th Department). Kregg v. Maldonado, decided a few days ago,  deals with a motorcycle accident and a suit against Suzuki. As per the court:

The Suzuki defendants moved, inter alia, to compel the disclosure of the “entire contents” of those and any other social media accounts maintained by or on behalf of the injured party. Plaintiff objected to such disclosure on the grounds of relevance and burden, contending that the demand for disclosure was a “fishing expedition.” Supreme Court agreed with the Suzuki defendants that they were entitled to such disclosure. That was error.

The authority the appellate court cited to was McAnn v. Harleysville, also a 4th Department case, which I discussed two years ago. Missing from the defendant’s demand, and the heart of the McAnn ruling, was that there had to be some “factual predicate with respect to the relevancy of the evidence.” But there wasn’t.

The defendants were, in essence, on a simple fishing expedition (or, perhaps, a billing expedition) hoping that something would come up that might contradict the plaintiff’s testimony in some way. But that is not a sufficient reason under the law to demand access to private materials.

The court ruled that:

As in McCann, the proper means by which to obtain disclosure of any relevant information contained in the social media accounts is a narrowly-tailored discovery request seeking only that social-media-based information that relates to the claimed injuries arising from the accident.

Expect to see continued attempts by defendants to pry into social medial accounts marked private, and attempts to create “factual predicates” upon which to make such demands.

 

May 16th, 2012

Protecting the Client’s HIV, Drug and Mental Health Medical Records

There’s a nice decision out of the Appellate Division (First Department) this week that pertains to putting the breaks on litigation disclosure in personal injury cases that is, all too often, out of control in breaching privacy protections. In particular, it deals with HIV records as well as drug/alchohol records and mental health records.

This type of stuff can show up in a medical chart for even a routine car accident as doctors and nurses take histories and social workers plumb the depths of a patient’s worries and concerns. But.  Just because a defendant is entitled to “full disclosure of all matter material and necessary in the prosecution or defense of an action” does that mean they can get these highly privileged (and potentially quite prejudicial) documents?

Enter, stage right, the decision a few days ago in Del Terzo v. Hospital for Special Surgery. The appellate bench explores the conflicting interests of the patient’s desire for privacy and the defendant’s desire to go fishing around the records for anything that might help it.

And the winner here is the patient, thanks to the special protections of New York’s Public Health Law as well as the Mental Hygiene Law. Both have provisions that specifically protect the patients from such nosiness.

With respect to HIV, the defendant must show, according to the Public Health Law,  “a compelling need for disclosure of the information for the adjudication of a criminal or civil proceeding.” While that would seem to come into conflict with the “full disclosure of all matter material and necessary” to defend the action, the PHV has supremacy because of these magic words: “Notwithstanding any other provision of law, no court shall issue an order for the disclosure of confidential HIV related information, except . . . in accordance with the provisions of this section.”  And the court added for good measure, recognizing that these demands had nothing to do with this particular claim:

Nor have defendants even suggested, on the basis of the medical records provided, that there is any history of HIV or AIDS. Indeed, defendants seem to be engaged in a fishing expedition.

Turning to the drug and mental health requests, the court was no less helpful to the defendant, pointing out that mental health information shall not be released except “upon a finding by the court that the interests of justice significantly outweigh the need for confidentiality.” The defendant got hammered again by the court, when it wrote:

The interests of justice standard…has not been met in this case where defendants seek the disclosure of confidential records on the basis of nothing more than a generalized assertion that substance abuse and mental illness can affect a person’s level of stress, ability to work and life expectancy.

This is a good case to keep in the breast pocket when those defense demands come pouring. Or  for those times a hospital demands that people waive all their disclosure rights or it won’t furnish records in response to an authorization requesting records. Those records need to be redacted.

A final note: This is the type of objection that should be raised for all such requests, regardless of whether such records even exist. Because if an objection is made only on a selective basis, it tips the hand as to what the records might hold.