LinkedIn Page Doesn’t Get Into Evidence As a Rule 803(17) “Directory” or “Compilation” in Podcast Dispute

imagesA key issue in Personal Audio, LLC v. CBS Corporation, 2014 WL 1202698 (E.D. Tex. 2014) was whether a LinkedIn page, printed off the ‘Net by a testifying witness, was admissible at a motion to transfer venue hearing as a “compilation” or “directory” under Federal Evidence Rule 803(17).

A broadcast behemoth defendant (CBS) tried to transfer a podcast patent infringement case from Texas to New York on the basis that material witnesses to the dispute lived closer to New York than Texas (where plaintiff was based).  The plaintiff wanted to keep the case in Texas.  In support of its motion to transfer, CBS tried to offer into evidence a LinkedIn page of a third-party witness who apparently lived in New York.  CBS wanted the page into evidence to support its argument that New York was the more convenient forum for the case.

Held: The LinkedIn page was inadmissible hearsay since CBS failed to lay a foundation for the page’s authenticity. CBS’s motion to transfer venue is denied.

Federal Rule of Evidence 803(17)

The basis for the court’s ruling was Evidence Rule 803(17).  This rule provides for potential admission of “market quotations, lists, directories, or other compilations” generally relied on by the public or persons in particular occupations.

The twin purposes for streamlined admissibility under this rule are reliability and necessity.  Necessity exists because most commercial publications have multiple authors so it’s not logistically feasible to have all of them testify to a document’s contents.  Reliability lies in the fact that the documents are regularly consulted by third parties and that if the documents weren’t accurate, the public or a given industry would stop consulting them. (*5).

To support its argument that key third-party witnesses lived closer to New York than Texas, CBS offered a third-party witness’s LinkedIn page through a CBS employee.  CBS labelled the LinkedIn page as “compilation” evidence under Rule 803(17).  Testifying about the page, the CBS employee stated he was a journalist and that he regularly used online resources to locate individuals – including the witness whose LinkedIn page was involved in this case.

Rejecting CBS’ argument, the court found that the LinkedIn page failed both prongs of the 803(17) admissibility test: “This is clearly not the type of evidence contemplated by FRE 803(17)”, it said.  The LinkedIn page wasn’t reliable because CBS offered no evidence to show LinkedIn (the “compiler” under the Rule) makes any effort to verify the accuracy of its member’s profile pages.  The court also found that the page wasn’t necessary since CBS could have provided testimony or an affidavit of someone who had actual knowledge of the witness’s/LinkedIn member’s location.

Because the page failed both the necessity and reliability prongs of the 803(17) test, the court discredited CBS’ evidence and found that CBS failed to carry its burden of showing it was more convenient to have the case litigated in New York instead of Texas. (*5).

Take-away:

A LinkedIn page or other social media member page can likely be authenticated and admitted into evidence but not as a Rule 803(17) compilation or directory (at least in this District).  If documentary evidence that supposedly shows a witness’s location isn’t reliable or necessary, the proponent of the evidence will need to do more than simply offer hearsay evidence through a third-party.  Instead, the proponent should try to get the evidence in through live testimony or an affidavit of someone who has first-hand knowledge of a witness’s whereabouts.

Post-script: In September 2014, the Federal jury awarded the plaintiff over $1.3M in damages against CBS for infringing the plaintiff’s podcast distribution patent.

 

Agreed Settlement Order Not a Final Order Under Res Judicata Test – IL 1st Dist.

The Illinois First District recently provided a good synopsis of res judicata in Mass Realty, LLC v. Five Mile Capital, 2014 IL App (1st) 133871-U, a November 2014 unpublished opinion.

The case involves two lawsuits – a 2010 mortgage foreclosure case (the “2010 Case”) and a 2013 breach of contract and unjust enrichment case (the “2013 Case”) that both involve a dispute over commercial property.

In the 2010 Case, a lender filed a foreclosure suit and the defendant real estate broker – the plaintiff in the 2013 Case – counterclaimed to foreclose a broker’s lien it recorded for  securing a tenant for the property. The broker’s lien was never adjudicated in the 2010 Case.  

In the 2013 Case, the broker filed suit against current and former owners to recover its commission.  The 2013 Case defendants moved to dismiss the case on the basis of res judicata. The trial court agreed and the broker appealed.

Held: Reversed.  The 2013 Case isn’t precluded by the 2010 Case.

Reasons:

The court found that the 2013 Case was sufficiently different from the 2010 Case so that the broker could go forward with the 2013 Case.

Res judicata elements

– Res judicata is designed to prevent multiple olawsuits between the same parties where facts and issues are the same;

– Res judicata bars a subsequent action between the parties involving the same cause of action;

– The three elements of res judicata are (1) a final judgment on the merits, (2) an identity of parties; and (3) identity of cause of action.

– Where these three elements are satisfied, res judicata bars not only every matter actually litigated but every matter that might have been litigated in the first action;

– A settlement agreement or other agreed order isn’t a final order for res judicata purposes;

– A judgment is final and “on the merits” where it determines the parties rights and liabilities based on the facts before the court

– Illinois uses the transactional test to determine whether causes of action are the same for res judicata purposes;

– Under the transactional test, separate claims are considered the same if they arise from a single group of operative facts; regardless of whether they assert different theories of relief.

(¶¶ 23-26)

The court ruled that a consent foreclosure in the 2010 Case wasn’t a final judgment on the merits.  The court likened a consent foreclosure to a settlement agreement – something that is not a final judgment. This is because a settlement agreement or agreed order is not a judicial determination of the parties rights, but is instead a recording or documenting of the parties’ agreement.

The court also found the “same cause of action” prong of res judicata absent.  In the 2013 Case, in contrast to the 2010 Case, the broker more definitively alleged a breach of the written commission contract and sought damages from the current and former property owner.

The broker’s 2010 Case counterclaim defensively pled the existence of his broker’s lien but didn’t name some of the defendants in the 2013 Case as those defendants didn’t yet have an interest in the property when the 2010 Case was pending.

Since the underlying facts, central allegations and some key defendants in the 2010 and 2013 Cases differed, the two cases were based on different operative facts and not the “same cause.”

Afterwords:

– When faced with a dismissal motion based on res judicata, respondent should underscore any differences between a prior and current lawsuit; including different parties, different underlying facts and distinct causes of action;

– By contrast, a party seeking dismissal based on the doctrine should focus on the sameness between two suits. It should highlight any common parties, property and factual allegations between the two cases.

 

 

 

Does A Garden-Variety Employee Owe Fiduciary Duties to His Employer in IL?

I’m going to answer with a (soft) “yes.”  Its a soft yes because the duty owed by a “regular”, non-officer employee is more limited than that owed by a corporate officer.  There also aren’t many published Illinois cases that discuss an employee’s duties to his erstwhile employer.

By contrast, cases are legion that detail the fiduciary duties owed by corporate officers to their corporate employers.  The case law is replete with multi-factored tests that describe what factors a court considers when determining whether a corporate officer breached fiduciary duties to his former corporate employer.

So what can and can’t a non-officer employee do once his employment ends? Here are some quick-hits that I extracted from several years’ worth of Illinois state and Federal cases:

(1) Employees who are not officers or directors are also bound by fiduciary obligations;

(2) An agent is a fiduciary with respect to matters within the scope of his agency and is required to act solely for the benefit of his principal in all matters concerned with the agency;

(3) A non-officer employee breaches fiduciary duties to the corporation where he diverts potential corporate clients to a competing business;

(4) In Illinois, former employees may compete with their former employer and solicit former customers as long as they do not do so before the termination of their employment;

(5) Employees may plan, form and outfit a competing corporation so long as they do not commence competition before their employment ends.

Sources:

LCOR, Inc. v. Murray, 1997 WL 136278 (N.D.Ill. 1997);

E.J. McKernan Co. v. Gregory, 252 Ill.App.3d 514, 530 (2d Dist.1993);

Veco Corp. v. Babcock, 243 Ill.App.3d 153, 160 (1993