LITIGATION NEWS ~ PUBLISHED BY THE LITIGATION SECTION OF THE VIRGINIA STATE BAR FOR ITS MEMBERS.

VOLUME VIII NUMBER 4 FALL 2001

Sovereign Immunity Update - Factual

Distinctions Make the Difference

by John P. Fishwick, Jr.

Based on the factual distinctions of each, case, the Virginia Supreme Court continues to

.. incrementally expand sovereign immunity protections~ Its struggle t9 differentiate amongst case facts "has occasioned much difficulty" for the last ce~tury, and is unlikely to simplify anytime soon. 1 This article will update the decisions within the past year to help guide practitioners to develop case facts to follow recent precedents on the issue of sovereign immunity.

Unlike the law in other states, the defense of­sovereign immunity in Virginia does not bar suit; rather, it elevates the standard of negligence a plain­tiff must prove from simple to gross.2 Ostensibly, Virginia courts premise immunity on a "rule of social policy; which· protects the state from burden­some· interference with the performance of its gov­~rnrnental- fw1ctions and preserve~ its control over , stat~funds,property,and instrUf11SJltalities."3 Colby

"11. Boyden sets out a four-part test: 1.) the nature of the function the employee perforrris; 2) the extent of the government's interest and involvement in the functi~:m;3) the degree of control and direction exercised over the" employee by the governmerit; and 4) whether the act in question involved the exer-

" cise bf discretion and judgment.4

- Viewing the fourth prong, Virginia courts have traditionally granted a state employee the defense of "

\ John P. Fishwick, Jr. is a partner in Lichtenstein) Fishwick ) & Johnson in Richmond, Virginia and the preSident of

Virginia Online Legal Research Company, a legal research and writing company for lawyers. ""-

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sovereign immunity if he is performing a discre:.. tionaty function, but not a ministerial function. i'

The comparison of Colby v. Boyden (1991) with Heider 11. Clemons (1991) illustrates the Court's tra­ditionaldistinction in the test betWeen discretionary and ministerial" actions. Each case discusses the issue in a suit against a police officer for negligent dri­ving. Heider denied immunity to a deputy sheriff involved in an accident while out serving judicial process, reasoning -that "while everY'person driving a car must make myriad decisions, in ordinary dri­ving situations the duty of due care is a ministerial obligation."5 Colby granted immunity to an officer involved in the pursuit of a suspect, because "[ u ]nlike the" driver in routine traffic, the officer must make difficult judgments about the best means

Sovereign Immunity - cont'd on page 6

Table of Contents ;

Sovereign Immunity Update: Factual Distinctions Make the Difference. . . . . . . . .. 1

by John P. Fishwick, Jr.

Letter from the Chair ................. ~2< "-

When Does a Cause of Action -f6rPersonalInjrny Accrue? .............. 3 ""

by N. Reid-Broughton

Cyber-Jurisdiction. . . . . . . . . . . . . . . . . . . .. -5 by Elkn S. Moore

" Recent Law Review Articles ........... ,. 9 ;

View from the Bench ................•. 12 - by The HunorabkJane Marum Roush

Litigation Section Bo;;u-d of Governors .... 22

Young Lawyers Committee ............. 23

Ethics at a Glance: Ethics in th~ information Age ..... back cover

by Thomas E. Spahn "

LITIGATION NEWS FALL 2001

Letter from the Chair

M. '. , ... ' .. '. any Virginia ~tt?rn~ys. re~ainu~in~orm~~ , be toward the strict ethical du,ties governing lawyer

.. about MultldlsclpitnaryPractlCeorconduct?Finally, 'perhaps from the perspective of . "MOP." Just the same, MDP tends to illicit unvarnished lawyer self-interest, many opponents to a vague, negative response from the practicing bar. MDP point out that' when MDP restrictions were Although the term "MDP" is bandied about broadly, loosened in Europe and Asia, the result was that there are various MDP models, ranging from the many law finns on these continents were inhaled by somewhat extreme scenario of lawyers splitting equi- large accQuntingfirms. ty shares in law firms with non-lawyers, t() the less ·Uritil these concerns are resolved, there willlikely startling concepts of lawyer involvement with nOn- remain stiff oppo~itiol1 to broad changes in the rules lawyers in businesses ancillary to the practice of law that currently limit MDP. However, as more and such as title companies and consulting businesses, or more attorneys practice outside the traditional law hiwyers contracting with other professi()nal entities to firm setting, calls for such change may well increase. provide services. At the heart of the pro-MDP move- Proponents of MDP are quick to point out that bar-ment Is a desire to weaken restrictions on lawyers barians have not gathered at the gates of the court-teaming with, and sharing fees with, non-lawyers. house based upon the proliferation of in-house

The camp· that favors counsel (who answer to corpo-expanding MDP essentially •• • [N]umerous rate hierarchies) or insurance argues that, in reality; the prac- tat' t defense attorneys (who are paid tice is already well-established in com men ors sugges from one source, but represent Virginia. The question is simply that the debate another) --'- situations which where lines should be drawn.. pose moral conflicts similar to Proponents note that MDP regarding MDpwili be those raised by MDP. helps attorneys better meet their While MDP has swept clients'· rieeds. To be sure,' One of the biggest cloud~ throughbthe.rparts of the lawYers work. with accountants, .' . h· 1 1·1 d·' world, resistance has carried the financial planners and title insur- overt e· eg~· anscape day in America. An' ABA

ance companies on a daily basis.· 'in (ciming decades. CoIIlmissionin 1999 recom-There is every reason to believe mended loosening restrictions that a lawyer working in con- '. against MDP;the rec0111menda-junction with a "full-service financial team" will bet- tion was flatly rejected by the ABA. The Commission ter serve his client than a lawyer who lacks finaIl(;ial retrirriedthe'foUowing year '~ith a watered~dowri ~~pertise and is working alone. Undet:this logic, proposaL:t!iatstill woiild :have weakened limitations MDP merely solidifies, andlegi~mizes, ties that ag:ilrisiME>P~:a:gairt,the,ABA'diseliJ.bowele(hhe pro~ aIteady bind. . posal. In Virginia, aJ6int'Com,tnission has be,erttre~

There are, however, some troublesomeaspetts ated tostridythe qtiestibn. Itsrepottisanticipittedto regarding MDP. Notably, opponents point out that it be releCiSedl'citerthis year.' ' is, questionable whether a lawyer cart truly exercise Whilemariy ofushav~ failed to focus on the independence in an environment go"erned by non'- issue,lju¥erous c6~mIll~rifat()r~suggest that the iawyers: for example, if an architecttiralor accounting debate~ reg~rdini MDP ~n be one of the biggest flrmstands to make millions on a deal,how likely is it clouds over 'the legallan~scape in coffiing decades. It tli~t an attorney employed Within their firm woUld be would be wise for all Virginia lawyers to contemplate able.to operate independently to· raise· legal concerns the ,controversy, 'and to make an informed decision that would nix the deal? How difficult\vill it be for oil how MDP might affect their practice and profes-lawyers working together in a firm with non-lawYers sion.Burying our heidsiri the sand will result in to maintain client confidences and to avoid waiving other people making the decision for us. the attorney-client privilege? If a non-lawyer is super- Frank K Friedman vising an attorney, how respectful will the non-lawyer Chair? Litigation Sectiori

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FALL 2001 LITIGATION NEWS

When Does A Cause Of Actioit'For Personal

Injury Accrue? by N. Reid Broughton

T raditionally, 'a cause' of action for personal . injury accrues;and.the statute of limitations begins to run, wl)en the plaintiff suffers an

injury as a result of the defendant's negligence. However, the Virginia Suprefile Court apparently rejected this traditional rule in its most recent deci­sion on accrual, Nunnally v. Artis'! In Nunnally, the court determined that a plaintiff's cause of action did not accrue until she suffered the injury for which she brought s'uit. Though it has gar­neredlittle attention in the intervening years, the Nunnally decision may have profound implications for Virginia litigants.

Virginia Code § 8.01:.243 provides that a per­sonal injury action must be brought within two

\ ) years of the date' the cause ofac.tion accrues.

)

Under Virginia Code§ 8.01- 230, a right of action for per~orialinJury accrues and the period prescribed by the statute of limitations begins to run when the .injury is sustained. The Supreme Court has long construed "injury" td mean "posi­tive, physical or mental hurt to the claimant;"2 The court has further recognized that while a legal wrongandresultantirtjury may occursip'iultane­ously, they heed not, and· that a cause df action' m:iy, therefore, accrue; afterl:h.elegal Wiohg.3

. HoWever;thefocusofacauseof action has always~ been on the Wrong. The· caUse of action for that wrong simply does not accrue until all of its elements -' duty, breach, and resulting injury -are present.4 The:Locke C01irtexp:Iained:

We construe the statutory word 'injury' to mean positive, physical or mental hurt to the claimant, not legal wrong to him in the broad sense that his legally protected inter­ests have been invaded. Thus, therunning'of the time is tied to the fact of harm to the plaintiff, without which .no cause of action would come into existence; it is not keyed to

N. Reid Broughton is an associate with the firm FlipPin, Densmore, Morse & Jessee in Roa,noke, Virginia.

3

the date of the wrongful act, another ingre­dient of a personal injury cause of action. 5

Thus, in Locke, the court held that the statute of limitations began to run when the plaintiff suf­fered some. harm proximately caused by the defen­dant's' breach because at that point the plaintiff had a cause of action for the breach. 6

In its more recent cases,. the Supreme Court continued to follow this traditional view of accrual. In St. George v. Pariser,7 for example, the court held that a cause of action for misdiagnosis of a cancerous mole did not accrue until the cancer changed form. The court stated the traditional rule, "an injury is deemed to occur, and the statute of limitations period begins to run, whenever any injury, however slight, is caused by the negligent act."8 Accordingly, the court dete~mined that the issue was when "the injury St; George suffered as a result of the misdiagnosis occurred."9.· The court

. further explained:· In every misdiagnosis case; the patient has some type of medical problem at the time the physician is consulted. But th.e injury upon which the cause of action is based is not the original detrimental condition; it is the injury that later occurs because of the misdiagnosis and failure to treat .... The 'injury' .. .is the development of the problem into a more serious condition which poses

. greater danger to the patient or which requires more extensive treatment.10

Explaining. that her original cancer could not have ,been caused by the physician's negligence, the court concluded that the plaintiff's cause .of actiol).aq~r:ued when· the cancer altered it status and. enteredthedermis.li , .

The Supreme Court· applied the tradition;tl rule in Scarpa v. Yelzig,u and held that a patient who unde(went an ineffective sterilization procedure had .. no right of action though she did nQt discQverthe surgery had failed until she. became pregnant years after the procedure. The court explained that although the majority of the plaintiff's harm (i.e. the pregnancy) f()llowed long after the procedure, she had endured "trauma, pain andinconve­nienc~ ... when; due to the defendants'· alleged wrongful conduct, she was subjected to a wholly inadequate procedure: arid denied. the. adequate and

Cause of Action- contJd on-page 4

LITIGATION NEWS , FALL 2001

Cause of Action contJd from page 3

.,", complete sterilization which she requested."13 The , ';' court concluded, "Therefore, immediately upon

;"".:""( completion of the negligently performed 1980 surgery, the plaintiff had a cause of action and a

, .::~ right of action to recover for the' trauma, the harm, , and the hurt caused during the failed procedure. "14

As the plaintiff's motion for judgment was filed more than two years after the procedure was per­formed, it was barred by the applicable statute of limitations.

Obviously, this was a harsh result. It is not fair that a woman's right of action should be extin­guished before she even knows it exists, but this is the nature of statutes of limitation. Statutes of lim­itation are inherently unfair,and their very purpose is to cut off potential claims, confine the liability of potencial defendants, and prevent stale litigation.l5

Further, the' Virginia court has repeatedly refused ;', to adopt a "discovery". rule, and the plaintiff's

. -.~:( knowledge of her injury is not a consideration in d~termining when her cause of action accrued. 16

, .....• The Scarpa decision~ though harsh, was 'in keeping . . with these principles. .

In Nunnally v. A,rtis, the plaintiff presented a factual situation identical to that.in Scarpa, but the court overruled Scarpa and determined that the limitations period did not 'begin to run· until Ms. Nunnally became pregnant. The court based its

. decision on the fact that Nunnally had alleged a caUse of action for wrongfulcortception.BecaUse Nunnally sought to recover for 'Wrongful'concep­

. tron," rather thanthewrorigful suigery, . the court found'· that she . was ',notlnjuredtiirtil she 'suffered

,:. ',',.:.'.< tbeinjury for which 'she'brotight suit,:the' wrong­;::;:"':"; fulcoriception:The cotirN~xplained:; .

Here, the injury of whichN unnally com-' plains'is not "trauma, pain, and inconve­nience"that may have. been associat~d with the negligent sterilization procedUre. 'Rather,

.' ,. t '.' ~':'

~ !,'" " ,

she comphiins of the consequences of the wrongful conception and the subsequent . pregnancy. which, . for medical reasons, she sought to avoid. Indeed, we . fail to. under­stand ·how a plaintiff could have a cause ~f action for wrongful conception if there haS been no conception.

4

Even though a legal wrong may have occurred in 1989 when' the defendants per­formed the negligent sterilizationpr()cedure on Nunnally, we hold that no injury under the Locke accrual rule occurred at that time because Nunnally had . suffered no "positive, physical or mental hurt" related to her cause of action, wrongful conception.l7 .

The Nunnally Court changed the traditional rule that a cause of action accrues "whenever any injury, however. slight, is caused by. the negligent act" by requiring an injury "related to her cause.of

. " Th action. ,'. e court treated the concept of a cause' of action, not as a remedy ·for awrong,but as a remedy for a particular injury, and indicated that the cause of action for a particular injury begins to run at the time of that injury. The court was cor­rect that it is not possible to have a cause of action for wrongful conception before conception. However, this truth is relevant only because the court labeled Nunnally's claim an action for a par­ticular injury, wrongful conception. Had it been lab¢led ,what.it also was _ .... anacdon forrhedic:~l ~alpractice - her cause of action certainly c()uld have accrued before conception. This change in' focus is potentially profound in effect. . . . Nunnally may be limited to the narrow cir­cumstances at issue in that case, i.e. a cause 'of action for wrongful conception following an inef~ fective sterilization. Ina defamation case decided the year after ¥unnally, Jordan v. Shands, 255 Va. 497,(1998), th,e SqpremeCourt restated its tradi­tion~~ view regarding aCcrual, '~We have held that whena~ iBlury,~~s~~~~in~~ inic9pse(111~l}c~ of.~~ )\!"ro'ilgfitilor, !1egHg~nt3,(:t o[:inQtQer,:i1ld.the law affqqis, ar~~f.!dY,thest~wt~ofii:nitati~~~ immer diately attaches. ~,'Jd.;~t 4R8;H'oweve~: I~,~dan involye4 Cl" cau~e of ~ct\,o,n for defamation and, arguably, asiggle,.jndivisible inj'Hry. It do~~,n()~ cleariy:,impact the Nunnally decision. To date, the Supreme Coutt has;given no·' indication· that its reasoning iri Nunnally should be limited to the facts presented therein. " .

PotentialiYiNun~ally permits a plaintiff in a proper case to determine when her cause of action accrues by choosing the injury for which she will sue~ In Ms. Nunnally's case, she sued not for Dr.

Cause of Action -:-contJ~ on page 20

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FALL 2001 LITIGATION NEWS

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Cyber-Jurisdiction by Ellen S. Moore

Introduction Over the past few decades, use of the World Wide Web has risen dramatically, and the Internet itself has evolved and grown mote complex. So, too, have the legal issues surrounding the Internet evolved. Two decades ago, there were less than 300 computers linked to the Internet.! As of last year~ there were more than 175 million people accessing the Internet.2 Communications between Internet users are, routed throughout the United States, notwithstanding the origin and destination of the communication. These communications take a variety of forms, from the passive posting or receiving of information, to the use of interactive sites to buy and sell goods or services. As of 1999, "e-commerce" sites are estimated to have generat-

) ed $18 billion in on-line commerce.3 These devel-opments, in turn, have generated an increasing number of legal disputes, putting the onus on courts to determine how to apply historic concepts regarding the basis for personal jurisdiction to the boundary-less world of the Internet.

The courts' latest, and now most common, approach, has been to apply basic personal jurisdic­tion analysis to Intetnet activities on a "sliding scale" ,ana,lysis of the in teractivi ty of the site. Virginia courts, too, have recently integt:ated this sliding scale analysis in their review of Internet­related jurisdiction. Many of these same courts,"~ however, have not diminished their focus on the perceived, harm to the, Virginia' plaintiff or what is known as the "effects doctrine." Indeed,applica­tion of the sliding scal~ analysis itself h~s been inconsistent from court to court, leaving potential defendants with little by way of br~ght-line tests with which to judge their risk of being haled into a

\ foreign court. )

/ Ellen S. Moore is an associate with thefirm Woods, Rogers & Hazlegrove, in Roanoke, Virginia.

5

General Bases for Jurisdiction The basic premise of personal jurisdiction analysis utilizes a two-part review under the state's long­arm statute and the Due Process Clause of the Fourteenth Amendment to the United States Constitution. In many states, including Virginia, this analysis is simplified by the courts' interpreting the long-arm statute4 to be satisfied whenever the constitutional requirements are met.S

Briefly stated, the Due Process Clause requires 'that no defendant be haled into court unless he has "certain minimum contacts" with the forum state "such that the maintenance of the suit does not offend 'traditional notions of fair play and sub­stantial justice. '''6 The defendant must have "pur­posely avail [ ed] itself of the privilege of conducting activities within the forum State, thus invoking the " benefits and protections of its laws."7 Also, the exercise of jurisdiction must be "fair and reason~ able" under the circumstances of the case and the "defendant's conduct and connection with the forum State [must be] such that he should reason­ably anticipate being haled into court there."8

Personal jurisdiction further may be founded on either of two theories, general or specific furis­diction. A court exercises general jurisdiction when an action "does not arise out of the defendant's activities in the forum state, ... [but] the requisite 'minimum ,contacts' between the defendant and the forum state are 'fairly extensive."'9 In such a case, the defendant's contacts must be "continu­oUs and systematic. "10 A court may exercise specif~ iC jurisdiction when the suit arises out of the defendant's activities in the forum state;!l When exercising sp'ecific jurisdiction over the defendant, the courts need not find extensive contacts be~een the, defendant and the, forum state, but the "fair warning" requirement of the Due Process Clahse requires that the def'endant have "purposely directed" its activities at the forum.l2

J udicialAnalysis of Cyber-Jurisdiction The Internet has not altered the courts' use of tra­ditional jurisdictional concepts; instead, the Internet merely has added a new medium, and a different dimension, to the analysis of such con-

Cyber-Jurisdiction -cont'd on pageS ; ...

LITIGATION NEWS FALL 2001

Sovereign Immunity cantJdfrom page 1

of effectuating the governmental purpose by embracing special risks in an emergency ,situation."6

Within the last year, the Cour~. faced a situation in the middle of these two cases, where an officer drove into the back of another vehicle when he was at the threshold moment of initiating pursuit of a vehicle, but where there was a factual question as to whether he had actually begun the pursuit.7 The Court held that because the officer "was required to exercise discretion and judgment in executing" the decision to pursue, he qualified for the defense. Thus, the Court premised immunity upon conclu­sions as to the state of mind of the defendant. This forecasts' cases where the award of immunity comes down to the defendant's word as to what he was thinking, and contemplates situations where there may be no other objective evidence.

Allother of the Court's recent decisions illus­trates the same liberalized view toward awarding immunity. In Whitley v. Commonwealth, the court granted immunity to the defendant nurses for alle­gations of simple negligence arising from specific . duties that were arguably ministerial, including exe­cuting physician orders regarding medication, mon­itoring medical. records, scheduling the plaintiff for periodic r'eview of his seizure medications, and· assisting physicians in support roles.8 Despite the specific and objective nature of the nurse's responsi­bilities; the Courtfound that "l a ]lthough the nurs­es' acts descdbed in this record have some· ministerial components, the actS ~emselves are dis­'cretion,~J;y in nature andre quire the exercise of . juqgment ~hen considered in the context of the treatment rend~red." While the distinction between .' the discretion. necessary for executing specific tasks . ~sa nurse(discreti9n~iY~. irnIlllme} and ,doing the: saine as a dep~ty shei;iff.in a squad 'car (ministerial, not immune) is by no means clear, there may be a logic~ distinc:tion in the level of professional judg­ment 'necessary, or the'level of care involved. The Court, unwilling to immunize employees from sim­ple negligence due to ordinary driving mishaps, may see a greater state interest in protd::ting state employees engaging in more specialized tasks such .al! medicine, no matter how routine or specific.

6

The immunity of local government also contin­ues to demonstrate the Court's distinction of factual minutiae. Traditionally, a city is immune for the reg­ulation of traffic or a similar activity intended to protect the general public safety, that being a gov­ernmental function of a municipality,9 but not immune for the maintenance of city streets, a pro­prietary function.10 This past year, the Court award­ed the protection to a city in a suit for tortious interference arising from its actions in acquiring real properties)l The plaintiff argued essentially that the city acquired the property in question with propri­etary motives, arid the Court admitted that the poli­cy at issue had some proprietary components, but found that "the principal purpose of that policy is to resolve, efficiently and without resort to litigation, disputes over the proposed use of vacant land within the City in order to control and direct development consistent with the City's public safety concerns of vehicular traffic impacted by that development;"

Two other recent cases ,illustrate this willingness to· interpret the facts. so as to bring them within the umbrella of immunity. Carter v. Chesterfield County Health Commissiqn held that the provision of nurs~ ing services by the County Commission Wal! not a ministerial act of a prop'rietary nature, but an exer­cise of th.e County's police power for the common good and thus a governmentaJ function. U Decker v. Harlan et al extended to the City of Hampton the immunity afforded to municipalities under Va. Code §15.2~809, which bars actions for ordinary negli­gence arising from: "the 'rriaintenahceor operation of any [city-operatedlpark,' recreational facility or playgroul1d?'13/Fh~'actionar()se frornan aCdident with,a refusetruck:being. driven from the Hampton . ColiseumtQ emptyoits . trash at a steam plant. The Courtrejecte4 the. plaintiff's argument that ,the ,ml'*· ~<u,lmile~:~}V~y frO~ the Coliseum, and that . me truck was· Qot' maintaining a recre~tional. facility: ,Bo\Veyer~the Court r~fused t~ extend 'immu~ity to the' Town' of Cape Charles in Lostrangio v. 4tingford.l4 Tl)ere, ,the plaiQtiff sued the town for injuries sustained at a July 4th celebration that the towllco-sponsored. The town claimed immunity, despite the fact that the town did not own the prop-

. erty, nor did it own, maintain or operate the petting

. zoo ~here the plaintiff was injured. As a result, the

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FALL 2001 LITIGATION NEWS

Court concluded that the celebration could not qualify as a "recreatjonal facility" under § 15.2-809.

Although numerous recent cases are finding immunity, the Court does continue to uphold the legislature'S abrogation of immunity for certain actions against state agenCies, even where the indi­vidual defendants responsible for the alleged harm enjoy immunity. While Whitley v. Commonwealth, above, immunized the nurses, the Court still allowed the action to proceed against the state through the Tort Claims Act. In another recent case, Linhart v. Lawson, the Court allowed suit to proceed against the defendant school board due to the abrogation of immunity in Va. Code § 22.1-194, which authorizes suit against school boards for simple negligence even if the employee responsible can be sued only for gross negligence. The Virginia Supreme Court also still respects established limits upon the award of immunity to individuals. The Court reaffirmed the standard, rule that immunity will not extend to independent contractors perform­ing services for the state in Atkinson v. Sachno. 15

-') Overall, it is apparent that the Virginia Supreme /

Court is granting immunity in most of the cases it considers. Particularly worth noting is that the Court will grant immunity in situations where the actions alleged occur in a context that has obvious ministerial components, but where some legitimate argument can be made that discretion is still a nec­essary component or, in the case of municipalities, that the objective involves the protectionpf public safety. The Court essentially rationalizes this 'protec­tionas insurance that public, servants will ,continue to put themselves into positions of individual ' responsibility without fear of liability, and that the state will continue to act in the public good, at least in terms of stated intent. Regardless, defense attor­neys should 'rejoice in the factual elasticity of the court's decisions, and plaintiff's attorneys should ' beware of facts suggesting discreti()n or underlying policy clearly directed toward the public good.

,,') 1 Ashbury v. City of Norfolk, 152 Va. 278, 282, 147 S.E. , 223,224 (1929).

2 Colby v. Boyden, 241 Va. 125, 128-9, 400 S.E.2d 184, 186-7 (1991).

7

Ethics at a Glance (conf'd)

involves the requirement that clients treat their communications

Ul"'-L ... ·UV .. and confidentiality if they hope to preserve the privileged nature of the communica­tions.

A number of courts have indicated that corpo­rations which reveal privileged information beyond those with a "need, to know" risk either: (1) hav­ing the privilege not apply at all (because there is no "expectation of confidentiality"); or (2) waiv­ing the privilege.

Although it might make sens~ to allow man­agement 'to involve themselves in all legal matters facing the company, a corporation probably waives the privilege by widely disseminating privileged information beyond those in corporate, manage­ment with a "need to know."

Therefore, the best answer to this hypothetical is PROBABLY NO.

3 Hinchey v. Ogden, 226 Va. 234, 240, 307 S.E.2d 891, 894 (1983).

4 Colby, supra, 241 Va. at 128-9,400 S.E.2d at 186-7.

5 Heider v. clemons, 241 Va. 143, 145, 400 S.E.2d 190,191(1991).

6241 Va. at 130,400 S.E.2d at 187.

7Nil.tionwideMut. Ins. Co. v. Hylton, 260 Va. 56, 530 S.E.2d421 (2000). '

8260 Va. 482,493-4, 538S.E.2d 296,302 (2001).

'9Transportation Inc. v. Falls Church, 219 Va. 1004, 1006,254 S.E.2d 62, 64 (1979).

10 Bialk '11; City of Hampton, 242 Va. 56, 58, 405 S.E.2d 619,620(1991).

11 City of Virginia Beach v. C;rmichael Development Ca .• 259 Va. 493,501,527S.E.2d 778, 781 (2000).

12 527 S~E.2d 783, 259 Va. 588 (2000).

13260 Va. 66, 531 S.E.2d 309 (2000).

1426'l Va. 495, 544 S.E.2d 357 (2001). 15 261 Va. 278, 541 S.E.2d 902 (2001).

LITIGATION NEWS . FALL 2001

~yber-Jurisdict;on cont)d [rom page 5

tacts. Some courts, especially the early reviewers of these issues, compared the Internet with more r~c­dgniztd forms of communication and commerce. For example, courts have analogized the use of electronic mail to that of the regular postal service, or Internet advertising to that of advertising a product via paper communications and thereby inserting that product into the stream of com­merce. This analysis often falls short, however, in taking into account the potential interac:tivity allowed by the Internet and' the fact that the Internet reaches a much broader and more geo­graphically diverse audience than do most paper­based advertisements or publications. Many courts therefore have adopted a sliding scale or continu­um of characteristics of Internet presence and inter-activity to assist in resolving the question of just when and how much Internet presence is enough for jurisdiction in a given forum.

As set forth in the seminal case of Zippo Mfg. Co. v. Zippo Dot Com) Inc.,13 three general cate­gories of Internet presence have emerged, creating three general lines of case law addressing personal jurisdiction issues. The first category includes pas­sive websites, i.e., those that merely present infor­mation without accepting information . from the viewer, taking orders, or selling or offering services or products. Generally no juri~diction is found with passive sites. The second category concerns websites with both -passive and active characteris­tics i.e. those that allow for the exchange. of some , .. ,.."; . . . .-" "

information between the site and the viewer. Here the court will analyze the level of inter-activity with the customer or user in that state to deter­mine jurisdiction. The third ·category includes thosewebsites· where the provider 'actively con­ducts business over the Internet, for example~ by allowing the user to 'enter into contracts()r. pur­chase products advertised on the site. Jurisdiction is generally found where the website is highly interactive.

Jurisdictional detenhinations, however, are very fact-dependent, and courts have not hesitated to mold the sliding scale analysis or utilize differ­ent jurisdictionaF'analyses to take' into account the

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specific facts of a case. As revealed below, what some courts interpret to be a purely passive web­site, other courts hold to be at least partly active - resulting in very different rulings concerning very similar websites. Still other courts have set aside the sliding scale analysis, at least on occasion, to utilize "effects doc::trine" or other analysis in determining whether to exercise.jurisdiction over a non-resident defendant. Thus, there are no bright line rules. by which Internet users can measure their risk of being haled into court in a foreign jurisdiction.

Pa$sive Websites Gourts generally findinsufficientevidence to sup­port personal jurisdiction based solely on a plain­tiff's accessing the.passive website of a nonresident defendant in the forum state, absent some addi­tional.showing that the nonresident defend.;mt purp()s~ly attempfedto c9nduct or solicit business in the forllffi state .. The following sections present a survey of c::as,e~ ~~viewed concerning passive web­sites.

Cases Finding No Iurisdiction. In·the most~ec:ent case reviewed from April 2001, Revell v. Lidov,14, the United States District Court for the Northern Distrkt of Texas, Dallas Division follow~dthepath set bYJhe Fifth Circuit in adopt­ing the sliding scale analysis with respect to juris­diction based oQInternet activities. Specifically, the court notedthatadet~rmination must be made of t~,~. :~~~el9(hw~rac:gri~ia1)~ sommercialnatu~e. of ;~,l1(tt(,~FlJ.,il~geQf)rf~JfI1~ti(m,witl1 ac:tive ~~tes, ,t;hroll,gh ·wl1ich husine~sis COJ,lduc:ted,supp<;>rtlllg.a ;findillg 'q{,j~ris~t~tio:ll;aIl~ passive sites, which n;H~rdy adYertise. <;>r .place information on the

-XQternet; 0'9tsupporting,;a findin,gof jurisdiction. :I~the c~se ;~thand)ar1' incUyidual. had posted an ,~i~eg~d).y·defama~oryartid~On a websitehostecl by the' Columbia University. School of Journalism. The cou~t found that' this website clearly fit into the passive website category, as there was no direct contact between the people who post information on the site and those who read the information. The possibility of someone from that state reading

. CyberJurtsdiction - cont)d on page 10

"";,:.:~"'.',

)

FALL 2001 LITIGATION NEWS

Recent Law Review Articles

by R. Lee Livingston

The following are recently published· Law Review articles that may prove useful to you in your practice:

Agency Wong, David D. Note. The Emerging Law of Electronic Agents: E-commerce and Beyond. 33 SUFFOLK V.L. REv. 83-106 (1999).

Commercial Law Springer; Melissa Bradford. Note. Perfecting a . Security Interest in ((Electronic Chattel Paper)) Under Revised Article 9.31 V.MEM. L. REv. 491-519 (2001).

Evidence DeMayo, Christopher. Case Comment. The Mediation Privilege and its Limits. (Olam'v. Congress Mortgage Co., 68 F.Supp.2d 1110, N.D. Cal. 1999.) 5 HARv. NEGOTIATION L. REv. 383- .. 398 (2000). .

Hutchings, Shannon D. Note. Tortious Liability .. for Spoliation of Evidence. 24 AM .. J. TRIAL ADvoc. .. 381-406 (2000).

Nickels, Danel Michelle. Note. Casting the Discovery . Net Too Wide:· Defense Attempts to Disclose Nonparty Medical Records in a Civil Action. 34 IND. L. REv. 479-500 (2001).

S~nders, Joseph and Julie Mathai-fulks. The Admissibility o/Differential Diagnosis . Testimony'. to .. Prove Causation in Toxic Tort Cases: The' Interplay, of Adjective and Substantive Law. 64 LAW & . CONTEMP. PROBS. 107-138 (2001).

Insurance Law Randall, Susan: Ma'naged Litigation' and the Professional Obligations of Insurance Defense. Lawyers. 51 SYRACUSE 1. REv. 1-51 (2001).

Jurisdiction Street, Cynthia L. Comment. Rule 68: Erie Go

) Again-Costs) Attorneys) Fees, and Plaintiffs) ~j Offers-Substance or Procedure~ 20 Miss. c.L. REv.

341-355(2000). .

9

Legal Profession Rand, Joseph W. What Would Learned Hand Do?: Adapting to Technological Change .and Protecting the Attorney-Client Privilege on the Internet. 66 BROOK. L. REv. 361-420 (2000).

Medical Jurisprudence Hanson, Laurel R. Note. Informed Consent and the Sr;ope of aPhysician)s Duty of Disclosure. 77 . N.D. L.REv. 71-96 (2001).

Karns, Jack E. Pharmacist Liability Relative to .. Direct Advertising o/Services and the Independent

Duty to Warn. 9 WIDENERJ. PUB. L. 1-15 (1999).

Marczyk, Geoffrey R.· and Ellen Wertheimer. The Bitter Pill o/Empiricism: Health Maintenance Organization's, Informed Consent and the Reasonable Psychotherapist Standard of Care. 46 VIl.L. L. REv.33~93 (2001).

Nevers, 'Ann H. Medical Malpractice Arbitration in the New Millennium: Much Ado About Nothing? r PEPP: Drsp; REsOL. L.J. 45-90 (2000).

Practice and . Procedure Denham, Donna and Richard Bales. The Discoverability of Surveillance Videotapes Under the .FederalRuleS. 52 BAYLOR L.REV.753-779 (2000).

Eastoll, Stephen D. Can We Talk? Removing Counterproiuctive Ethical Restraints Upon Ex PdrteCommunication 'Between Attorneys and Adl/erseBxperi Witnesses. 76 IND: L.J. 647~747 ·(2001).

'I:ioffman,Ad~m. Note. Corralling Constitutional Fact: De Novo Fact Review in the Federal Appellate Courts. 50 DUKE L.J. 1427-1466 (2001). . "

Marcus, Richard L. Confronting the Future: Copi1Jg With Discovery of Electronic Material. 64 LAw& CONTEMP. PROBS, 253-281, (2001).

Law Review Artictes~ cont)d on pagell

LITIGATION NEWS FALL 2001

erber-Jurisdiction cont'd [rom page 8

the article was merely fortuitous circumstance, and insufficient to provide grounds for jurisdiction.

The case cited by the Revetl court was the 1999 decision in Mink v. AAAA Development, LLC,15 by the Fifth Circuit, which followed the sliding scale analysis in determihing that a Vermont company was not subject to, jurisdiction in Texas for its use of a website advertisement accessible in Texas. In that case, the company did not take orders over the Internet but, instead, provided users a printable order form to mail in, the mailing address, electronic mail address arid a toll free tele­phone number. The court found no jurisdiction over the defendant in Texas based on this passive advertisement. 16

In 1997, the Second Circuit in Bensusan Restaurant Corp. v. King,17 found jurisdiction lacking in a trademark ihfringement 'action where the Missouri-based defendant's home page was' passive in nature, and merely gave the Internet user information without selling or offering to sell services or products. In this action, the plaintiff ' owned a New York City nightclub while the defen­dant owned Columbia, Missouri, nightclub of same name. The plaintiff sued in New York for trademark infringement, dilution and unfair com­petition due to defendant's advertisement of his business on a home page using references to plain­tiff's clu,b along with its logo and even ahyperlink " to plaintiff's own home ,page. The defendant's ,website, however~ contained a disclaimer distin-', guishing it from the New York club. New York's long-,!-rm statute, much like Virginia's, contains', provisions for finding jurisdiction overdefe.ridants ( who (~) commit wrtious acts whili inside the s.tate or'(2) 'commit tortious acts outside state causing injury inside state. The court found no personal jurisdiction in New York under the first provision, . holding that' the defendant was noi: physically pre- . sent in New York, despite the presence of its web- ' site on the Internet. The court also found no " 'personal jurisdiction under the second provision, ,,' noting thai the New York long-arm statute also' required that the defendant derive substantial rev- , enue from the state and foresee that its conduct,'

, would have consequences in New York. The coUrt found that the defendant derived its revenue from

" .. .. .

its local cUstomers in Missouri and that its website was directed at Missouri residents, not New York residents.18

Also in 1997, the Ninth Circuit in Cybersell, Inc. v. Cybersell, Inc.,19 found jurisdiction lacking in a case in which the plaintiff Arizona company, with the service mark "Cybersell," brought suit in Arizona against a defendant Florida, company who was using the same name and advertising it on the world wide web. The Ninth Circuit relied heavily on the district court's opinion in Bensusan, distin­guishing between websites that passively provide

, information for any Internet user, such as the deferidant's, and those interactive sites where users can exchange information. The court noted that the defendant's site provided information, includ­ing the company's local phone number and elec­tronic mail address, but found the amount of interactivity'allowed was limited to the defendant being able to receive a browser's nalne and address - no services could be provided,no contracts couidbe consummated and no products could be sold via the Internet.20 The court also considered the fact that there was no evidence that any Arizona resident other than the plaintiff had accessed the defendant's website, signed up for the defendant's. services or entereci into any contracts wIth t;he defendant, and there was no evidence that the defendant had sent any electronic mail mes­sages to" or' earned, any income from, Arizona resi­dents. Stating that "the likelihood that personal

;jq.ri~4iction· ::£~§,~~¢} cpIi,srIt,utionatlyexerClsesf.is 4it:~~tly prqpql;40Qate'~o: fue ~atur~:in(fqualitY6f co~i-qerdala'<;tiviiy ttiat~n,entity conducts over !

'the II{ternet," 1:4eicou/rt:cleclinedtoexercise juris-diction over. the' defendant.21

Other courts that year reach~d similardetermi­natipns. Tl1ePistrictO:mrt in Kansas, in SF Hotel

, Co., Lp.v., En~1lJylnvestments, Inc.,22 adopting the test found in Zippo" similarly found no, jurisdIction over a nonresident defendant who maintained a passive website providing general information about its hotel with no provision for direct com­munication between the defendant and the Iniernet user. A Northern District of Illinois court, in Transcraft Corp. v. Doonan Trailer Corp.,23

", j 10

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FALL 2001 LITIGATION NEWS

founo. no' jurisdictioit over' a defendant basedop, a , website providi,nggeneral ao.vertisementabo'ut defendanes business, finding that the defendant had not thereby "entered" into Illinois in a way that contributed to the plaintiff's injury nor specif­ically intended its advertisements to reach Illinois customers. A District of New Jersey court, in Weber v. Jolly 1iotels,24 found no jurisdiction' over a defendant where general information was placed on defendant's website as an advertisement and "not as a means of conducting business," and likening advertisements on the Internet to adver­tising in a national magazine, which "does not constitute 'continuous and substantial' conta.cts with the forum state." In Smithv. Hobby Lobby Stores, Inc.,25 an Arkansas court found nojurisdic­tion in the forum where the Hong Kong-based defendant's advertisement in a trade publication merely appeared on the, Internet and was not directed at Arkansas residents and the defendant did not contract to supply any goods or services to Arkansas residents over the Internet. Finally, in McDonough v. Fallon McElligott, Inc.,26 the District Court for the Southern District of California found no jurisdiction' over a non-resi­dent defendant whose Internet advertising merely was accessible in the forum state.

Cases Finding Iurisdiction In an early case from 1996, Inset Systems, Inc. v. Instruction Set, Inc.,27 the United States District Court for the District of Connecticut held that' it ' had jurisdiction over adefendaittwho had supplied

that theexerclse' ot'this jurisdiCtion was sat:isfied underConnectif:ut's long-:arm statute by the defendant's continuous advertisements over the web, which could be repeatedly accessed, and this also comprised the basis for the defendant's mini­mum contacts; purposeful availment: and reason­able anticipation of being haled into a Connecticut court.28

Most courts now find no jurisdiction based on this passive level of activity. Inset was the first pub­lished case addressing this jurisdictional issue vis-a­vis the Internet, therefore the court had little guidance at the time. However, an August 20tn Virginia case reached much the same conclusion as Inset, marking a split in Virginia decisions regard­ing so-called passive websites.29

Websites with Both Passive and Active Characteristics The second type of website is the "intermediate" interactive site, where the provider allows for the exchange of certain information between it and those Internet users accessing the site: This type of site may provide various services, on-line to the user. Most: courts hold that these cases require an evaluation of the "level of interactivity and com­mercial, nature of the exchange of information that occurs on the [w ]ebsite" before a ,determination of jurisdiction can be made. Cases generally finO. jurisdiction based on interactive websites, although a handful have found no jurisdiction on the facts presented.

catalogs; pr()vided products and,initia.ted tele-'Cases Finding Personal Iurisdiction phone solicitations to Connecticut customers. The plaintiff, a ConnecticiIt corporation and holde~ of ' , ,Not UtiUzinIJ the SlidinIJ Scale Analysis the trademark "INSET" sued the defendant, a In, a case falling outside of the sliding scale analysis, Massachusetts corporation, in Coim.ecticut, alleg- the Ninth Circuit" in its 1998 decision in ing trademark infringement, dilution and unfair ',Panavision International L.P. v. Toeppe'!1-,30 elected competition as a result of Defendant's procure- instead to follow ~n "effects doctrine" analysis" to ment of "INSET. COM" as its Internet domain determine its jurisdiction over a defendant. The address and as part of its toll free telephone num- defendant was a "cyber- squatter," one who regis-ber. The court held that jurisdiction existed over ters domain names under others trademarks and the nonresident defendant based on its continuous offers to sell the domain names to the trademark advertisement over the Internet, which included at owner~ for 'exorbitant prices. Noting that "simply least 10,000 potential access sites in Connecticut, registering someone else's trademark as a domain and the use and advertisement of atoll-free num- name and posting a website on the Internet: is not

ber on its website. The court specifically found , Cyber-jurisdiction - cont'd on page 14

11

LITIGATION NEWS , FALL 2001

A View from the Bench

Bac!c to Basics: Some Practice Tips for Young

Litigators by The Honorable Jane Marum Roush

lam sometimes asked to speak to young lawyers' about what judges like and don't like to see in their courtrooms. Pet peeves. Do's and don'ts.

Bees in our bonnets. Practice tips. Call them what you will, every judge has "unwritten rules" that every young lawyer should follow in order to present his or her case in the best possible light. At the request of the Young Lawyer's Committee of the Litigation Section of the Virginia State Bar, I am committing my heretofore unwritten rules to writing:

Know the Local Rules, Practices and Procedures If you are new to the practice of law in a jurisdiction, talk to experienced practitioners. They are always willing to assist a young lawyer in learning the lay of the land. Join the Bar Association. Take advantage of CLE's, particularly at the local level.

Observe the Highest Standards of ProfeSsionalism Remember: you. are. young and will. be aroll;l1p.., for a long time. Too often, young lawyers mistake nasti~ ness and aggression as zealo1is:tepresentationof their clients. AlwayS be fair and courteous to opposing counsel, you'll meet him or her again in many Con­texts throughout your career. As a wise person once told me: "Be ruce to those younieet on your way up, you'll meet them again on yourwaydown."

Don't Snipe at Opposing Counsel· Don't rurect any comments at all to opposing Coun­sel at all. Direct all your comments to the Court.

The Honorable Jane Marum Roush is ajudge with the Circuit Court of Fairfax County, Virginia.

12

. ----r.

Don't Adopt the Client's Case as Your Own Be careful to maintain the line between zealous rep­rese:1tation of your client and adopting the client's case as your own. A lawyer loses all effectiveness as an advocate for the client when he or she overly identi­fies with. the client's position.

Be Forthright in Your Representations to the Court; Your Reputation is Everything Judges talk about you! (For good and for bad.) Point out adverse controlling authority to the Court. You may lose 'your motion, or even your case, but you will have fulfilled your obligations a'l an officer' of the Court and impressed the judge with your candor. Conversely, if you get caught in representing a half­truth (or worse) to the Court, your name will be mud very quickly. From my experience, there appears to be no statute oElimitations for such' misconduct .

. The judge will always consider you as someone whose word cannot he trusted. There is nothing, more devastating for an attorney than to be known as one who plays fast and loose with his or her repre­sentations to the Court. .

Always Introduce Yourself and Identify Your Cli~nt.tQtheJudge Don't assume the judge knows you. Introduce your­self to.the judge even 'if you are the judge's former law derk.lt'scomniqncoup:esyto introduce yourself a~ • the beginning of every court proceeding and tell the CoUrt whomyoid,-epresent.· . ,'" • ' ..

,"., ',-.' ";'. ,~'. (.:>: ..... ,.:,.> .. ;~.~ ,- ,.;" .. i (0, "

.·Take/Your·Cu~ttotrithe Judge All' jridg<7~try t.ohelp 6utypu~g lawyers. Listen clo~ely~ the judg~is' usually trying to 'tell you some­thing if'y6u' aretIouridering:For' example, the judge niightsay~ '''Pin'incUnecl to grant the motion to strike, urilessyouwould like to make a motion first." The judge is sending you a big 'hint that you might want to take a nonsuit~

Don't Expect the Judge to Make

) ",,,,.,-7

Your Motions or Objections for You,\ Lawyerssomthetirhes expect judges to make their,_) motions for . em or to correct objectionable matters without anyone.having objected. For example, if a

FALL 2001 .' LITIGATION NEWS

potential juror states in voir dire that he can't be fair, don't just look at the judge pleadingly and expect the judge to excuse the juror. You need to move to exclude the juror for cause. Don't ask or expect the judge to rehabilitate jurors for you. If a prosecutor makes an improper argument that warrants a mistrial, the defense attorney needs to do more than object and say "However you honor wants to handle it." It's counsel's job to make a motion for a mistrial and ask the judge to rule on that motion.

Don't Ask the Judge to Let You Know What Evidence Will Prove Your Case The judge is not your senior partner, there to guide you in selecting the evidence that will win your case. Lawyers frequently ask me whether or not I want to hear from a particular witness. In a child custody case, a lawyer will say: "You honor, I have the chil­dren here if your honor would like to hear from the children." Don't ask the judge if the judge would like to hear from a witness. Call your witness!

Know The Rules Of Evidence Study the treatises Friend on Evidence and Vi1lJinia Evidentiary Foundations in your spare time. If you practice in federal court, read and reread the Federal Evidence Manual just for fun. Go to CLEs on. trial practice and evidence.

Be Nice to the Clerk's Office Get to know the court clerks. They are a young lawyer's best friends. Practically every clerk's office in Virginia has a sign posted prominently warning that. the "Clerks are NotAllowed to Give Legal Advice." What the signs don't say is that the clerks are not allowed to give legal advice to non-lawyers; Court clerks' can and frequently do' give very . sound legal advice to lawyers (and judges).

Don't Harangue the Judge's Courtroom Staff Our law derks,our courtroom clerks and our bailiffs are our staff. We are very close to them. We are loyal to them and protective of them. If you are rude or abusive to them, the judge will hear about it and will firid it difficult to forget.

.) Loose Lips Sink Ships

. . Watch what you say in and around the courthouse. The bailiff and other court personnel will report

13

everything. Don't ask the bailiff (as a lawyer once asked my bailiff): "Is there any way we can get any other judge besides Judge Roush?" It will be report­ed to the judge in a nanosecond. Watch what you say in elevators, lunch lines, rest rooms, etc. at the court­house and advise your clients to do the same,

Familiarize Yourself With the Judge's Rules of Courtroom Decorum Ask the bailiff ahead of time what the judge likes and dislikes. Don't be afraid to ask the judge. For exam­ple, "Does Your Honor mind if I leave the podium when I am making my opening statement?"

Be True to Your Time Estimates It shows respect for the Court, the court personnel and your fellow attOrneys. When in' doubt, overesti­mate how long your case will take. No judge ever got mad at an attorney for completing his or her case ahead of schedt;tle.

Don't Argue with the Court After an Adverse Ruling Is Made There is no need to make "vigorous" or "strenuous" objections. Don't whine. If you think the judge has made a mistake, file a motion to reconsider. If you disagree with the judge's ruling, file an appeal. Particularly in a civil case, you need not say "Note my exception" after every adverse ruling.

Don't Make Every Objection Known to Man It only annoys the fact finder, whether it's a judge or the jury. Don't object to hearsay if it1s good hearsay that helps your case.

Don't Make Speaking Objections Stand up and state the legal grounds for your objec" tion. It's usually one or two words. "Hearsay." "Irrelevant;.;~'. "Beyond the scope of direct." "Assumes facts not in evidence." "Leading." "Argumentative." "Badgenng." "Bolstering." If the judge wants more argument, the judge will ask for it. The most egregious violation of this rule I ever heard was: "Objection, he knows that's a lie!" Hint: "self­serving" is' never a winning objection. Of course the evidence is self-serving. Why else would. your oppo­nent be introducing it?

Viewfrom the Bench - contJd on page 21

LITIGATION NEWS FALL 2001

erber-Jurisdiction contJd from page 11

sufficient to'subject a party domiciled in one state to jurisdiction in another," the court nevertheless found jurisdiction over the defendant based on his scheme to register the domain name for the pur­pose of extorting money from the plaintiff in California. The Ninth Circuit Court of Appeals further found that the defendant knew his actions would injure the plaintiff in California, and, based on "effects doctrine," i.e., the defendant's conduct was aimed at or had an effect on the plaintiff in the forum state, the purposefulavailment requirement necessary for specific jurisdiction was thus satisfied. 31 The court further found that the claim "ar[ ose] out of the detendant's forum related activities" in that Panavision's injuries in California arose from his registration of the domain names on the Internet. 32

The United States District Court for the Western District of North Carolina, Shelby Division, in Supe'flJuide Corp. v. Kegan decision,33 also found jurisdiction over a nonresident defen­dant based on the defendant's website advertise­ment of products to forum state residents. From that advertisement, the court. inferred that the defendant had conducted "substantial activity" in North Carolina, assuming that it would have had a large number of "hits" or visits to its Internet site by North Carolina residents and that a number of the North Carolina visitors would have utilized the defendant's services. 34 The court observed: "Similar to a fisherman on the bank with his line in the water, ;:J.. website' is established, a product is offered, and the business waits for customers. "35 As with thePanavision case, the Superguide court held that the defendant's Internet contacts were related to the action at hand, in this case a declara~ tory judgment action concerning a trademark dis-pute. (

The author notes that the partly "active" nature of these cases appear only in the allegedly illicit activities of the defendants and not in the nature of the websites, which were not reported as being interactive. Under a sliding scale examina­tion of the above websites, however, they likely

14

would have been viewed as passive sites by other courts.

Utit!zino the Slidino Scale Analysis The Ninth Circuit thus ignored what is perhaps the most recognized case, which created the slid­ing scale analysis of Internet jurisdiction, Zippo Manufacturing Co. v. Zippo Dot ComJ Inc. 36 In Zippo, the Pennsylvania-based Zippo Manufacturing Company sued the California­based Zippo Dot Com, an Internet news service that had created the domain names zippo.com, zippo.net, and zipponews.com, all of which Zippo contended infringed its trademarks. Zippo Dot Com's websites contained an on-line application by which subscribers could complete the applica­tion, make payment to Zippo Dot Com for its news service, obtain a password, and view or download news. Zippo Dot Com had 3,000 sub­scribers in Pennsylvania and had agreements with seven Internet Service Providers in Pennsylvania to permit access to their subscribers. The court found jurisdiction based on Zippo Dot Com's "conduct­ing of electronic commerce with Pennsylvania resi­dents," whiCh constituted a "purposeful availment of doing business in Pennsylvania. "37

Massachusetts, in Hasbro v. Clue Computing, Inc.,38 found jurisdiction over a Colorado corpora­tion that utilized a partially-interactive website that could be accessed by Massachusetts citizens. Hasbro, a Rhode. Island corporation, with fac~lities in Massachusetts and owner of the "Clue" trade­ITIark for its popular board game, sued Glue Com.p~g~Q,g,;,a\ Colorido corporatiol)~: in Massachuse~ts for·trad~mark infri,ngement' arising from Defendant's Internet ,domain name "Clue.com." Hasbro's largest facility was in Massachusetts, and Parker ;Brothersand Hasbro Interactive, the devel<?pers and inarketers of the board and electronic. versions of the Clue game were in Massachusetts, as would be all of plaintiff's witnesses. Although the court recognized that Defendant's website was published from Colorado, it was available 24 hours a day to Massachusetts residents and offered to provide services to any customer site, including for Massachusetts resi- ' dents. Noting that a conceded purpose of the home page was to attract more customers from all

.. : --+

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FALL 2001 LITIGATION NEWS

states, including Massachusetts, and that the defendant's website was interactive, encouraging and enabling users to communicate with the com­pany via electronic mail, the court found that the defendant was regularly soliciting business in Massachusetts, sufficient for the imposition of jurisdiction over the defendant under Massachusetts's long-arm statute.39

Similarly, in American Network) Inc. v. Access America/Connect Atlanta) Inc.,40 the Southern District of New York found jurisdiction over a non-resident defendant who was attempting to reach the New York market through its website and had signed up subscribers to its business in the forum state. Also, in Heroes) Inc. v. Heroes Foundation,41 the District of Columbia court found jurisdiction based on a non-resident defen­dant's so~icitation of donations through its home page.

Cases Finding No Jurisdiction

Not Utilizino the Slidino Scale Analysis ) In Kubik v. Route 252,42 the Pennsylvania Superior

Court upheld the Philadelphia Court of Common Pleas finding that a Delaware restaurant's on-line advertisements, which included driving directions to the restaurant, a newsletter and the on-line sale of gift certificates, were riot sufficient to elicit juris­diction over the restaurant in Pennsylvania. The plaintiff in that case allegedly had been injured when his chair collapsed while he was dining at the restaurant. The state court· declined to follow· the sliding scale analysis adopted by the Eastern

. District Court of Pennsylvania in Blackburn v. .Walker Oriental Rug Galleries) Inc.,43 and instead analyzed whether the activities on the website con­stituted. "regularly conducted business" in Pennsylvania. Likening the web-site advertise­ments to phone book and newspaper advertise­ments, the court held that the web-site advertisements did not constitute "regularly con­ducted business" in that state. The court analyzed the sale of gift certificates via the Internet separate­ly, however, but rejected that as a basis for jurisdic­tion where the sale of gift certificates was merely incidental to the restaurant's regular business.

In CD Solutions) Inc. v. Tooker,44 the District Court for the Northern District of Texas merely looked for, and found lacking, the basis for specific jurisdiction over the defendant, although the defendant advertised and sold its services over the Internet. The court found that the plaintiff's claims did not arise from defendant's Internet con­tacts with the forum state and thus declined to exercise jurisdiction over the defendant.

Utilizino the Slidino Scale Analysis

The District Court for the Northern District of Alabama, in Butler v. Beer Across America,45 reviewed a case in which the plaintiff's minor son in Alabama ordered beer from the defendant Illinois company's website to be delivered to his Alabama residence. The court concluded the· defendant's semi-interactive website was insuffi­cient to satisfy minimum contacts requirements

. under the Due Process Clause. The defendant's website did not provide for the regular exchange of information by users; instead, it simply had a limited order· form that could be completed and submitted like a reply card in the mail. The court further found no general jurisdiction over the defendant because it was not registered to do busi­ness in Alabama, did not own property in Alabama, did not have offices in Alabama, key employees had never visited Alabama and it did not advertise with Alabama media. The court also found no specific jurisdiction because the defen­dant never directly solicited the plaintiff's son; instead, it made a sirigle sale to him based on the minor's contact with the defendant.

In Hearst Corp. v. Goliberger,46 the District Court for the Southern District of New York found no jurisdiction over the non-resident defen­dant because, although forum state residents accessed the defendant's website, the defendant had riot contracted to sell :or sold any products or

. services in New York. The defendant merely main­tained the website to advertise future services avail­able through a business the defendant planned to create. The court discounted the fact that the defendant had sent electronic mail messages to New York, analogizing them to telephone calls or

Cyber-Jurisdiction - cont)d on page 16

15

LITIGATION NEWS FALL 2001

erber-Jurisdiction cont)d from page 15

correspondence too insignificant to establish juris­diction. Further, the court expressed concerned about creating a national, or e,:en world-wide, jurisdiction based on the establishment of a web­site.

Active Websites The third type of website is one by which the provider actively conducts its business over the Internet, by displaying product or service informa­tion and allowing the user to enter into contracts and purchase the products or services advertised, most often charged to a credit card number given by the user. Courts generally have no trouble find­ing personal jurisdiction over providers of such sites.

The Tenth Circuit Court of Appeals, in . Intercon) Inc. v. Bell Atlantic Internet Solutions)

Inc.,47 found jurisdiction over a Delaware compa­ny that "purposefully availed" itself of the plaintiff, an Oklahoma server, for months after receiving notice from the plaintiff that it was mistakenly routing its customers electronic mail messages through the plaintiff's server. The plaintiff Oklahoma company was an Internet service provider for Internet and electronic mail services \,mder the domain name icon.net. The defendant Delaware company offered dial-up. Internet service through global service providers , including ac;om­pany called Icon CMT th~t used the iconnet.net domain name. 'the defendant 'mistakenly. routed its . customers' emails throu.gh the plaintiff's server .' rather than. through !Cpn' CMT's server. The plain­tiff complained repeat~dly, bu.t the defendant failed . to correct problem for m;my months. Based on these fa<;:ts, the 1'~nth GircuitCourt of Appeals concluded that jurisdiction was appropriate in .oklahoma.

The Sixth Circuit, in Compuserve) Inc. v. Patterson,48 found jurisdiction to be appropriate in a suit for trademark infringement based on the highly interactive nature of the defendant's Internet contacts with the forum state. The court held that, unlike a passive website provider, the

defendants in this case had "reached out" from Texas to Ohio and had "originated and main­tained" contacts with Ohio sufficient to satisfy due process analysis. Specifically, the defendant had entered into an agreement with Compuserve by which the defendant transferred its software prod­ucts· to the Compuserve system in Ohio, Compuserve stored and displayed those items to its customers and facilitated the sale of those items in Ohio and elsewhere, and Compuserve subse­quently transmitted the resulting purchase money from Ohio to Texas. The court also concluded that jurisdiction over the non-resident defendants was reasonable given that the defendants knowingly contracted with plaintiff, an Ohio corporation, for Internet access and to distribute the defendants' computer software viaits Internet network.

Cyber-Jurisdiction In Virginia Courts Virginia court decisions, within themselves, mimic the spread of determinations found throughout the rest of the United States' courts. Some Virginia courts clearly have adopted the sliding scale analysis, while others have chosen not to.

Acti"ve Websites

Case FindingN 0 I uris diction (Utilizing the Sliding Scale Analysis) In Weinstein v. Todd Marine Enterprises,49 the District Court for the Eastern District of Virginia dismi~sed . the aC.tion for lac.k of juriscliction over the defendant. The, case was for breach .()fcon~act and fraud in connection with the sale of seven cr~is~rsi:o .' aVirgini~ plaintiff.· The~ourt . found

. jlJcri~dktiorito be inapproprl(ltebeca~se'the defen­dant had not even advertised its own web page in Vlrgiqia. Rather, its information had been. made available on· ~n on-line classified advertisement site.

16

Case Finding Personal I uris diction (Utilizing the' Sliding Scale Analysis) In a not-yet-published August 9, i001, decision by Judge Williams in the District Court in Big Stone Gap, it appears thanhe court found jurisdic­tion over a defendant for its use of a passive web­site based on the application of the effects doctrine.soln that case, the plaintiff; Wallens

FALL 2001 . LITIGATION NEWS

Ridge State Prison warden Stanley Young, sued two Connecticut Qewspapers for making allegedly false statements against him depicting him as big­oted, lying and unfit to run a prison. The court stated that the case revolves around "where acts and omissions conducted in cyberspace actually occur. "51 In this case, according to the court, the acts or omissions took place in Virginia. The court noted that the defendants referred to the Virginia plaintiff and the Virginia correctional system in the articles that are the subject of this claim, and therefore the defendants should have been aware that any harm suffered by the plaintiff would occur in Virginia. Rejecting the defendants' argument that it would be unfair to subject them to world wide jurisdiction for merely posting information on the Internet, the court noted that the defen­dants are part of the news media, and therefore the product that they offer to the public is informa­tion. This information, according to the decision, could be accessed by people in Virginia and thus was "present" in Virginia.

Websites with Both Passive and Active Characteristics

Case Finding Iurisdiction In Telco Communications v. An Apple A Day,52 the District Court for the Eastern District of Virginia utilized something of a hybrid sliding scale and effects doctrine analysis in holding that the non­resident defendant was subject to Virginia's juris­diction in a suit alleging defamation, tortious interference with contract and business conspiracy ... PlairitiffTelcO, a Virginia corporation: ·sueddefen­dantApple, a Missouri corporation, in Virginia for two press releases over the Internet that the plain­tiff alleges defamed its business. In conducting its jurisdictional analysis, the court recognized the distinction between a passive website "that does little more than make information available to those who are interested in it," and which does not provide grounds for personal jurisdiction over the provider, and an "active" site, which, in this

-, case, gave readers a phone number to call in order ) to solicit their business. 53 The court found that

.. _j the defendant's "posting a Website advertisement or solicitation constitutes a persistent course of

17

conduct, and that the two or three press releases rise to the level of regularly doing or soliciting business" under subsection (A)( 4) of Virginia's long arm statute; also, the court found jurisdiction under subsection (A)(3) providing for personal jurisdiction over a person who causes "tortious injury by an act or omission in" Virginia.54 The court further found that the service defendants used distributed the information to several Virginia consumer information facilities, including America Online, which is headquartered in the forum dis­trict, and NationsBank. Thus the allegedly defama­tory speech was made available in Virginia, plaintiff was a Virginia resident, and its effects were felt in Virginia. The court further found that the defen­dants should have known that the- material would be distributed to Virginia, where the plaintiff was located, and therefore could have reasonably

. expected to be hailed into court in Virginia, such that no Due Process concerns arose in the case.

Active Websites

Case Finding Iurisdiction In Designs88) Ltd. v. Power Uptik Productions) LLC .55 the District Court for the Western District , of Virginia adhered to the sliding scale analysis in holding that jurisdiction was appropriate over defendants involved in a membership-based web­site on day trading. The court noted that "mere access to a passive website in the forum state is insufficient to support a finding of personal juris,­diction." In this case, however, the defendants allegedly solicited and maintained a relationship with the plaintiff to design, implemeritand main­tain the defendants' website, which the plaintiff worked on in Virginia. The court rejected the defendants' argument that the physical location of the plaintiff waS irrelevant to his work, which exist­ed "only in cyberspace," noting that "[t]here being no District Court of Cyberspace, the defert­dants' argument that laboring on the Internet defeats traditional personal jurisdiction is unper­suasive; Defendants will have to settle begrudging­ly for the Western District of Virginia. "56 .

Cyber-Jurisdiction - cont)d on page 18

LITIGATION NEWS FALL 2001

erber-Jurisdiction contJd from page 17

In Alitalia-Linee Aeree Italiane v. Casinoali­talia.com,57 the District Court for the Eastern District of Virginia applied a hybrid analysis in holding that it could exercise jurisdiction over a non-resident defendant who operated a highly interactive website that allowed for the formation of contracts, gambling on-line and the generation of profits from Virginia customers. In this case brought under the Anticybersquatting Consumer Protection Act, the plaintiff, an Italian airline, sued the defendant, a Dominican Republic entity, for using a similar domain name for its on-line gam­bling business. Analyzing the case first under the "effects doctrine," the court found that the defen­dant had caused tortious injury in Virginia by its commission of a tortious act outside of Virginia, by infringing on the plaintiff's trademark, causing the likelihood of confusion and mistake by Virginia customers and diluting the quality of plaintiff's mark. The court further found that a defendant who conducts advertising and soliciting over -the Internet, which can be accessed by a Virginia resi­dent 24 hours a day, does so regularly for purposes of Virginia's long-arm statute. Lastly, the Virginia court applied the sliding scale or "continuum" analysis of Internet jurisdiction, looking at the level of interactivity and the commercial nature of the website. Here, the defendant had online casino gambling that was .very interactive in nature, five Virginia customers and had earned money from its interactions with -such customers. The court -held that the defendant thus had engaged in o~going business transactions in Virginia and the minimum contacts required by the Due Process Clause were satisfied.

In-the 1999 case of Coastal Video Communica­tions Corp. v. The StayweU Corp.,58 the District Court for the Eastern District of Virginia raised the possibility that general jurisdiction could be exerCised over a defendant where its Internet­based contacts with the forum state were so "con­tinuous and systematic" that the "defendant may be subject to suit for causes of action entirely dis­tinct from the in-state activities. "59 The court

18

found that the defendant, in this case a website owner offering the sale of its publication over the Internet, offered an "on-line storefront that is readily accessible to every person in Virginia" who could access the world wide web but held that - , further discovery would be necessary to determine whether there was sufficient activity between Vir­ginia residents and the website to justify general jurisdiction.60 It should be noted that the defen­dant also conducted non-Internet business in Vir­ginia. The court further held that specific jurisdiction was lacking because the there was not evidence that the publication subject to the copy­right dispute between the parties was ever sold in Virginia.

Conclusion As evidenced by the cases above, while the sliding scale formula provides some guidance to counsel and their clients, even so-called passive websites can expose -an Internet user to suit in a foreign jurisdiction. Many courts still utilize the "effe-cts doctrine" in their analysis of Internet- related; cases, whether or not they also recognize the slid­ing scale analysis established in Zippo. Moreover, courts have been somewhat inconsistent in apply~ ing the sliding scale . analysis when they do utilize that test; for example, what one court deems to be a passive website,. another court finds' to be active in nature. Counsel should keep this in mind when advising Jr-q.ivid\lals and businesses seeking to expand _ theif audience for advertisements or infor­matiOll< via the Internet. There are no sure a~~wers fo~ th~~~ll~ifi~ing the _lpt~rnet r~garding 'whe~e theyIl)ay behalec:i in.tocourt. -. - --- - -

-. --IAmeri~an CivilLibertiesUnionv. Reno, 929F. Supp. 824; 831 (E.D. Pa; 1996). -

2Jeffr<!Y Pollock and Debra Lightner, Civil Procedure in the Age of the Internet JuriSdiction, NEW JERSEY L.J. (August 14,2000).

3 American -Bar Association, Achieving Legal and Business Order in Cyberspace: A Report on Global Jurisdiction Issues Created by the Internet, THE BUSINESS LAWYER (August 2000)~ - -oJ

4 See, e.g., § 8.01-328.1 of the Code of Virginia.

SSee, e.g., Asahi Metal Indus. v. Superior Court, 480 U.S. 102, 106 (1987); Cybersell,Inc. v. Cybersell, Inc., 130 F.3d 414

-.-~

FALL 2001 LITIGATION NEWS

(9th Cir. Dec. 1997); Ruston Gas Turbines, Int;. v. Donaldson Co., 9 F.3d 415,418 (5th Cir. 1993); Alitalii-Linee Aeree Italiane v. Casinoalitalia.com, 128 F. Supp. 2d 340, 348 (E.D.va. 2001); Weinstein v. Todd Marine Enterprises, Inc., 115 F. Supp. 2d 668, 671 (E.D.va. 2000) (citing Nan-Ya Plastics v. DeSantis, 237 Va. 255, 259, 377 S.E.2d 388 (1989)); SF Hotel Co., L.P. v. Energy Investments, Inc., 985 F. Supp. 1032 (D. Kan. Nov. 19, 1997); Transcraft Corp. v. Doonan Trailer Corp., 1997 WL 733905, 1997 U.S. Dist. LEXIS 18687 (N.D. IlL Nov. 17, 1997); Pawlucz v. Global Upholstery Co., 854 F. Supp. 364,366 (E.D. Pa. 1994); MCA Records, Inc. v. Highland Music Inc., 844 F. Supp. 1201, 1203 (M.D. Tenn. 1993).

6 International Shoe Co. v. Washington, 326 U.S. 310,316 (1945) (quoting Milliken v. Meyer, 311 U.s. 457, 463 (1940)).

7 Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). .

8 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1987).

9 Nicholsv. G.D. Searle & Co., 991 F.2d 1195, 1199 (4th Cir. 1993) ~citing Ratliffv. Cooper Laboratories, Inc., 444 F.2d 745,748 (4th Cir.), cert. denied, 404 U.S. 948 (1971)).

10 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,416 (1984).

11 Federal Ins. Co. v. Lake Shore, Inc., 886 F.2d 654, 660 (4th Cir. 1989).

') 12Id. (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. /

770,774 (1984)).

13952 F. Supp. 1119 (W.D. Pa. 1997); discussed in Daniel A. Ross, Jurisdictional Issues Raised by Intellectual Property Disputes on the Internet, THE METROPOLITAN CORPORATE COUNSEL (2000).

14No. 3:00-CV-1268-R (N.D. Tex., N. Div. Mar. 20, 2001), (cited in Defamation Suit over Pan Am 103 Article DistJtissed, COMPUTER & ONLINE INDUSTRY LITIGATION REpORTER (April 10, 20Ql)).

15190 F.3d 333 (5th Cir. 1999).

16 Compare Inset Systems, Inc. P. Instruction Set, Inc.i937 F. Supp. 161 (D. Conn. Apr. 17, 1996) (finding jurisdiction when the website contairis a toll-free number to contact the defendant); Telco Communications v. An Apple A Day, 977 F. Supp. 404 (E.D. Va. 1997) (Alexandria Div.) (finding juris­diction when the website provides a telephone number, and holding that the website was an "active" site); Butler v. Beer Across America, 83 F. Supp. 2d 1261 (N.D. Ala. 2000) (find­ing no jurisdiction when website provided order form, and considering website to be "passive").

.17126 F.3d 25 (2d Cir. 1997), affg 937 F. Supp. 295 (S.D.N.Y. 1996).

18Id. at 29.

19130 F.3d 414 (9th Cir. Dec. 1997).

, 20Id. at 418-19 (finding the defendant's provision of a ) local number. ~n i~s ~e~si~e not to. b7 a ~act~)C weighing in

_. favor of exerclslOg Junsdicnon and disnngUishlOg other cases, including Inset Systems, Inc. v. Instruction Set, Inc., 937 F.

19

Supp. 161 (D. Conn. 1996), by the fact that the defendant in Inset Systems provided a toll free nurriber, which, unlike a local number, is "designed to communicate with people .. .in every state"}.

21Id. at 419.

22985 F. Supp. 1032 (D. Kan. Nov. 19, 1997).

231997 WL 733905, 1997 U.S. Dist. LEXIS 18687 (N.D. Ill. Nov. 17, 1997).

24977 F. Supp. 327,333 (D.N;J. Sep. 12, 1997). 25 968 F. Supp. 1356 (W.D. Ark. June 25, 1997).

261996 WL 753991, 1996 U.S. District LEXIS 15139 (S.D. Cal. Aug. 5, 1996).

27937 F. Supp. 161 (D. Conn. Apr. 17, 1996). Compare Mink v. AAAA Development, LLC, 190 F.3d 333 (5th Cir. 1999) (defendant was not subject to jurisdiction in Texas even though defendant's website advertisement accessible in Texas provided users a printable order form to mail in, the mailing address, electronic mail address and a toll free tele­phone number).

28Id. at 163-165.

29 See Section IV.A. infra.

30141 F.3d 1316 (9th Cir. 1998).

31Id. at 1322.

32Id. (stating that the plaintiff Panavision would not have been injured "but for" the defendant's conduct which was directed towards the plaintiff in California).

331997 U.S. Dist. LEXIS19317 (1997), motion to dismiss denied at987 F. Supp. 481(W.D.N.C, Oct. 8, 1997}.

34Id. at 14-15.

35Id. at 13.

36952 F. Supp. 1119 (W.D. Pa. 1997); As stated above, this court was the first to expressly recognize the sliding scale of Internet activity, separating cases in which: (I) the defen­dant clearly does business over the Internet, as signified by "the knowing and repeated transmission of computer files· over the Internet," where jurisdiction clearly exists; (2) the defendant conducts some limited business via its website, where the jurisdictional inquiry is determined by the "level of interactivity and· commercial nature of the exchange ofinfor­mation" on the website; and (3) the defendant has a purely passive website. that does nothing more than advertise, where jurisdiction generally will not exist based on the existence of the website alone. Id.

37Id. at 1124-1127.

·381997 WL 836498, 1997 U.S. Dist. LEXIS 18857 (D. Mass. Sep. 30, 1997). See also Digital Equip. Corp. v. AltaVista Technology, Inc" 960 F. Supp. 456 (D. Mass. Mar. 12, 1997) (Finding jurisdiction over nonresident defendant that solicit­ed business in the forum state through its website and had completed sales to forum state residents.).

39 Compare Transcraft Corp. v. Doonan Trailer Corp., 1997 WL 733905, 1997 U.S. Dist. LEXIS 18687 (N.D. Ill. Nov. 17, 1997) (distinguishing itself because the defendant in

Cyber-Jurisdiction 7- cont'd on page 20

LITIGATION NEWS FALL 2001

Cyber-Jurisdidion cont)dfrom page 19

Transcraft did not target its advertisements to customers in the plaintiff's forum or conduct business in that forum via the Internet).

. 40 975 F. Supp. 494 (S.D.N.Y. Aug. 14, 1997).

41 1997 U.S. Dist. LEXIS 19317, accepted, mot. denied by, 958 F. Supp. 1 (D.D.C. Dec. 19, 1996).

42PICS Case No. 00-2252 (Pa. Super. Nov. 17, 2000) (discussed in Lori Litchmanof, Cillil Practice, LAW WEEKLY (Nov. 27,2000».

43999 F. Supp. 636 (E.D. Pa. 1998).

44'965 F. Supp. 17 (N.D. Tex May 9, 1997).

4583 F. Supp. 2d 1261 (N.D. Ala. 2000). See also Mink 11.

AAAA Del1elopment, LLC, 190 F.3d 333 (5th Cir. 1999) (finding website advertisements with order forms to be pas­sive websites).

46 1997 WL 97097, 1997 U.S. Dist. LEXIS 2065 (S.D.N.Y. Feb. 26, 1997).

47205 F.3d 1244 (lOth Cir. 2000).

4889 F.3d 1257 (6th Cir. July 22,1996), reh'g and sugges­tionfor reh'g en banc denied (Sep. 19, 1996).

49115 F. Supp. 2d 668 (_ 2000).

500'Donna Ramsey, Judge rules local court can preside ol1er

libel suit, COALFIELD.COM (August 14, 2001).

51 Id. at 2.

52 977 F. Supp. 404 (E.D. Va. 1997) (Alexandria Div.) (Cacheris, J.). Compare Mink 11. AAAA Depelopment, LLC, 190 F.3d 333 (5th Cir. 1999) (finding website advertisements with toll free numbers and order forms· to be passive web­sites):

53 Id. at.406( citing In~et Syste·ms, Inc. 11. Instnlction Set, Inc.,

937F. Supp. 161 (D. Conn. 1996); Compare Mink 11; AAAA Del1elopment, LLC, 190 F.3d 333 (5th Cir. 1999) (finding website advertisemerits with toll free numbers and order forms to be passive websites).

54977 F. Supp.at407.

55133 F. Supp. 873 (W.D. Va. 2001) (1. Michael)

56 Id. at 877.

57128 F. Supp. 2d 340 (E.D. Va. 2001) (J. Ellis).

5859 F. Supp. 2d 562 (E.D, Va. 1999) (1. Smith).

59 Id. at 565.

60 Id. at 568.

20

Cause ofAdiori cont)d from page 4

Artis' allegedly negligent surgery and her immedi­ate injury but for her later conception. Under Locke, her cause of action would have accrued when she suffered the first injury as a proximate consequence of the defendant's breach, i.e., at the time of her surgery, but the Nunnally court held that it did not accrue until she suffered the injury for which she sued. Obviously, this is a dramatic change in the law.

Unfortunately, no reported decisions have examined Nunnally in the several years since it was decided. Those decisions that have cited Nunnally have done so only in passing. IS Thus, it is difficult to determine exactly how far reaching Nunnally's effect might be. However, it has the potential to mark a profound change in the law of accrual.

1 Nunnally 11. Artis, 254 Va. 247 (1997). 2Locke 11. Johns-Manl1ille Corp., 221 Va. 951, 957-58

(1981). 3Id.

41d. at 957. 5 Id. at 957-58. 6Jd. at 959. See also Richmon4. Redepelopment and Housing

Authoriiyl1. IAburnum Constr.Corp., 195 Va, 827,839 (1954) ("Therefore, as a gener3.J. rule, where an irijury, though slight, is sustained in consequence of the wrongful or negligent act of another and the law affords a remedy therefore the statute oflimitations attaches at once.").

7 St. Geor,ge.lI;Pariser, 253 V~. 329 (1997); . 8Id., at 3:32:

9Id; 10 Id.at334'(dtadons omitted).·· llJd. 12 Scarpa. 11. M~lzig, 237 Va. 509(1989)., 13Id. at'513, 14Id. , 15 Hawks 11. Dehart, 206 Va. 810, 813 (1966); Street 11.

Consumers Mining Corp., 185 Va. 561,575 (1946). 16See, e.g., Lo 11. Bu~ke, 249 Va. 311, 317 (1995); Locke 11.

Johns-Manl1ille Corp., 221 Va. 951, 959 (1981). 17 Nunnally, 254 Va. at 252 (emphasis added). 18 See, e.g., Johnson 11. Commonwealth, 51 Va. Cir. 311

(Stafford Cnty. Cir. Ct. 2000). ')

FALL 2001 LITIGATION NEWS

. Law Review Articles cont'd from page 9 .

Products Liability Graddy, Elizabeth. Juries and Unpredictability in . Products Liability Damage Awards. 23 LAW & POL'y 29-45 (2001).

Torts Egr, Jacqueline A. Comment. Closing the Back Door on Damages: Extending the Actual Malice Standard to Publication-related Damages Resulting from Newsgathering Torts. 49 U. KAN. L. REv. 693-718 (2001).

Kendrick, A. Catherine. Comment. In Search of Standard Legislation for Fraternity Hazing Liability. (Ex parte Barran, 730 So. 2d 203, Ala. 1998.) 24 AM. J. TRIALADvoc. 407-440 (2000).

Logan, David A. LibeCLaw in the Trenches: Reflections on C14-rrent Data on Libel Litigation. 87 VA. L. REv; 503-529(2001).

\ Long, Alex. The Disconnect Between At-will ) Employment and Tortious Interference with Business Relations: Rethinking Tortious Interference Claims in the Employment Context. 33 ARIz. ST. L.J. 491-541 (2001) ..

Rasmussen, Benjamin C. Note. Taxation of an Attorney)s Crmtingency Fee of a Punitive Damag~s Recovery: The Srivastava Approach. 15 BYU J.PUB. L. 301-317 (2001).

.. ~

.: .

LITIGATION NEWS is· edited by the Young· Lawyers Committee of the Virginia State Bar Litigation Section ...

Newsletter Editor R. Lee Livingston

Statements or expressions of opinion or comments appearing herein are those of the editors, authors and contributors and not necessarily those of the Virginia State· Bar or its Litigation Section.

21

View from the Bench cont'dfrom page 13

Don't Make Objections that Signal the Witness How to Answer . During cross-examination, lawyers often object in such a way that is patently designed to let the witness know how to answer a question. For example, "Objection, your honor, there's no way he could know that - he's not a doctor." The witness then (surprise, surprise!) answers: "I don't know, I'm not a doctor."

Maintain a Poker Face No frowns, glares, grimaces, smirks, rolling eyes, fur­rowed brows, signaling your witness. Instruct your clients and witnesses to do the same.

Don't Make a Motion to Strike in the Presence of the Jury If the judge denies it, the jury will think the judge (who knows the law better than they do) thinks there is merit to your opponent's case. '

Avoid Ex Parte Communications with the Court Avoid letters to the judge, even if you "c.c." the other ,side, unless it is about a purely administrative matter, If your opponent is writing improper letters to the court, don't feel you need to match their letter with your letter. If you have something to say to the judge, put it in the form of a motion (or other plead­ing), file it with the clerk's office and notice your opponent.

Get into Court as Much as You Can Take Court appointed work. Do pro bono work. Observe the experienced attorneys in action every chance you can get.

If you follow these simple, time~tested rules, I guarantee you that you will be considered (at least by me) as a fine, upstanding, ethical, and effective lawyer: Of course, there are 385 other state court trial. judges in Virginia, and each has his or her own unwritten rules.

LITIGATION NEWS FALL 2001

Virginia State Bar Litigation Section Board of Governors

Frank Kenneth Friedman Chair Woods, Rogers & Hazlegrove, PLC 1.0 St, Jefferson Street, Suite i4.o.o P.O. Box 14125 Roanoke, VA 24.038-4125

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FALL 2001 LITIGATION NEWS

. . Virginia State Bar Litigation Section Young Lawyers Committee

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If you are a young trial lawyer under the age of

36 and .are interested in joining the litigation

. Section Young lawyers Committee, please contact

either Kevin Wayne Mottley or Kevin W. Holt,

Co-Chairs, litigation YlC, at their respective

addresses above.

23

LITIGATION NEWS FALL 2001

IQI~IQIIQIIQI~IQIIQI~IQIIQIIQIIQIIQIIQIIQ] IQI . . k IQI IQI Publish Your Wor IQI IQI Litigclfion News welcomes the sub-IQI IQI mission of litigation-orientec( articles. If IQI IQJ you have· researched or argued an IQI IQI interesting point of Virginia law! or IQI IQI have practice tips to share, conSider .IQI IQI condensing them into an article for IQI IQILitigation News. The contact for sub- IQI IQI mission of these articles is: IQI

IQI R. Lee Livingston, Esq. IQI IQJ Tremblay & Smith, l.l.P. IQI IQI 105~ 109 East High Street IQI IQI PO Box 1585 IQI IQI Charlottesville, VA 22902 IQI

804/977-4455 IQI IQI fax 804/979-1221 IQI IQI e-mail leeJivingston@trembla.ysmith.com .go IQJ .I!;;;;;!J

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~LITIGATION NEWS Virginia State Bar Eighth & Main Building 707 E. Main Street, Suite 1500 Richmond,VA 23219-2803

24

Ethics at a Glance

Ethics in the Information Age

by Thomas E. Spahn

,several months to set up a com­that links your company's law

artment with senior management at all of your company's locations. Although not all of the management is involved in every issue on which there will be communications oyer the network, you think it makes sense for manage­ment to "stay in touch" with company problems even if they are· not involved.

Are communications over the network likely to be protected by the attorney-client privilege?

(Analysis inside ~n page 7)

PRST STD u.s. POSTAGE

PAID PERMIT NO. 709

RICHMOND

)