Comments on Recent Cases: September 2024
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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.
Court Upholds Law Limiting the Use of Drones Against First Amendment Challenge by Journalists
I wrote a cover story in the most recent issue of Litigation News, a publication of the ABA Section of Litigation. It is about a challenge that journalists made to a Texas law that restricts the use of drones. And while the court ultimately refused to strike down the law, it considered whether the federal government even permits states to regulate the use of airspace and the balance between the right of journalists to take photographs and the ability of the government to restrict certain locations from interference.
Court Considers Competing Interpretations of Unclear Agreement
Courts will enforce an agreement as written without considering external evidence so long as the agreement is clear. But it is very difficult to write an agreement that is so clear that someone cannot reasonably read it to mean something different. And the longer and more complicated an agreement is, the harder it is to avoid competing interpretations. When that happens, a court may require a trial and external evidence to enforce the agreement, which adds cost and uncertainty.
For example, in a recent case before the state appeals court in Manhattan, a financial services firm sued to enforce a non-solicitation agreement against a former employee. The employee countersued, arguing his contract entitled him to deferred compensation. Both sides provided commercially reasonable interpretations of the agreement to support why they should prevail on the claim without a trial. The appeals court held that, since both sides had reasonable interpretations, neither could prevail on their summary judgment motions and a trial was needed to hear outside evidence on why one interpretation was the correct one.
Cases like this illustrate how important it is to draft agreements that lend themselves to only one interpretation.
Court Rejects Use of Outdated Text in Witness Statement
One of the more cumbersome parts of my work used to be getting people to sign documents in front of a notary. It is inconvenient to get people to come visit my office or to have them go to a bank or notary public. But it was often required. Now, however, many courts permit litigants to sign documents without a notary, so long as the document contains special text that communicates to the signatory that it is important that the document be accurate.
Courts take this language seriously. For example, in a recent case before the state trial court in Manhattan, two lawyers submitted signed statements using the pre-2024 text about the importance of telling the truth pursuant to the state law required for courts to accept non-notarized statements. The court refused to accept one of the statements by a lawyer who may have been acting in the capacity as a fact witness instead of a lawyer because she used text that was replaced in a 2024 amendment to the law. The court did, however, permit the lawyer who was clearly acting as a lawyer to use the old text.
Cases like this illustrate the need to use the correct text when submitting a witness statement to court.
Court Dismisses Petition After Attorney Fails to Cure Deficiency in Statement
While some litigation rules can be strict, many allow ways to address deficiencies without depriving litigants their day in court. This is because courts prefer to hear cases on the merits rather than dismiss them on technicalities. But lawyers still need to be vigilant to take advantage of these opportunities.
For example, in a recent case before a trial court in Manhattan that was affirmed by the appeals court, a lawyer filed a petition to challenge the placement of a candidate on an election ballot. The rules for election cases require that the petitions include a sworn statement in support. The lawyer’s statement used the special language the law used to require for sworn, but not notarized, statements before 2024. Since the lawyer failed to use the 2024 language, the statement was technically not sworn and so the petition was missing a requirement. But another rule, CPLR 3022, required the respondent to notify the petitioner of his mistake and give him an opportunity to fix it. The court noted that the respondent notified the petitioner by email right away, but the petitioner refused to fix the mistake. Only then did the court dismiss the case.
Cases like this illustrate the need to notify other litigants of mistakes and to take the opportunity to cure mistakes when they arise.
Court Holds Res Judicata Applies to Parent Companies’ Claim After Subsidiaries’ Lawsuit
One a party loses in litigation, there are rules that are meant to prevent it from just filing another lawsuit to try again. But clever lawyers may try to evade these rules by arguing the second lawsuit is technically different from the first one. One way to do that is to have the plaintiff in the second lawsuit be a parent company or affiliate and then say that that entity never lost the first suit. Courts are not always persuaded.
For example, in a recent case before the state appeals court in Manhattan, an American subsidiary of an Italian energy company lost a dispute against another company. The Italian parent company started a lawsuit against the other company’s parent company and claimed that no lawsuit had ever been decided between those two companies. The court rejected that argument and decided that the doctrine of res judicata barred the new claim. It noted both parent and subsidiary companies had the same interests, same lawyers, and had witnesses that referred to them as unified.
Cases like this illustrate how a litigation involving one party may implicate a related party.