Comments on Recent Cases: December 2020

Part of my work involves reading court decisions to keep abreast of how judges decide the types of cases I handle. Below, I share some thoughts on recent decisions.

Christmas tree in Marunouchi (Image credit)

Federal Courts Grant Deference to American Plaintiffs in Their Choice to Litigate in the United States

Litigation News published my recent article about the forum non conveniens doctrine.

When applying that doctrine, federal courts in the United States follow a technical procedure to determine whether a case really should be litigated in another country. In my article, I wrote about a recent appellate court decision that applied the doctrine. According to the court, American plaintiffs are always entitled to deference in their choice to litigate in the United States, even when they do business abroad.

Defendants Carry a Burden to Convince a New York Court to Change the Venue of a Lawsuit

A defendant who is subject to personal jurisdiction in one court in a state is also subject to personal jurisdiction the state’s other courts. This may make it very inconvenient for a defendant who resides in one part of a state to defend herself in a distant court in the same state.

This rule was illustrated in a recent decision by a New York appellate court. It affirmed a trial court’s decision not to transfer a case from Manhattan to a court in Columbia County, three hours north of the city. In that case, a plaintiff alleged that the defendant killed someone in Columbia County. The defendant wanted the case to be heard where the accident took place and, presumably, where he resides. But the court denied the motion because he did not identify who would testify at the trial, what they would say, and how it would be inconvenient for them to travel to Manhattan.

Cases like these show that defendants may be hauled into court anywhere in a state in which they are subject to jurisdiction. They also show the work a defendant needs to do to convince a court to transfer the case somewhere more convenient.

Courts Often Distinguish Breach of Contract Claims from Fraud Claims

A major issue that I see frequently is the confusion between contract claims and fraud claims. It is normal for a party to a breach of contract action to feel defrauded when another party does not perform. But New York courts generally dismiss fraud claims when they arise out of a broken promise of future conduct instead of a false statement of present fact.

A Manhattan appellate court, however, recently affirmed a trial court’s refusal to dismiss a fraud claim because of an important distinction. In that case, the plaintiff alleged that the defendant lied when it represented that it was able to perform the agreement. Because that was a statement about a fact that was either true or false at the time it was made, it was sufficient to sustain a fraud claim. It expressly said, however, that this is different from a making “a promise while harboring the concealed intent not to perform it,” which is insufficient.

Cases like these help parties understand when exactly a fraud claim may survive, and when breach of contract may be the proper claim.

New York Courts Consider Whether Raising Certain Issues Waive the Attorney-Client Privilege

The attorney-client privilege protects communications between a client and her lawyer. But the privilege is not absolute and a client should be careful not to waive it.

A Manhattan appellate court recently issued a decision about one type of waiver. This waiver is called an “at issue” waiver, that means that a party waives her privilege if she makes the privileged communication necessary to prove her own claim or defense. In this case, the trial court held the privilege was waived since the defendant asserted an affirmative defense that its price increases were not illegally willful. The appeals court reversed because, even though an allegedly privileged report contained relevant information to the defense, the defendant represented that it would not rely on the report to prove its defense.

This decision puts the plaintiff in a difficult position to respond to the affirmative defense, but it will generally help other parties understand when the privilege applies and when it is waived.