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[240 U.S. 457, 458] Messrs. Burr W. Jones and E. J. B. Schubring for plaintiff in error.
Mr. William Ryan for defendant in error.
This is a suit brought by the city of Madison to recover the cost of asphalt pavement between the rails of the defendant's track and 1 foot on the outside of them, for a certain distance along University avenue in that city. The declaration, after stating the ordinances under which the defendant and its predecessors had built and operated the street railway concerned, sets out an ordinance of June 11, 1910, requiring the defendant, under a penalty, to do the work above described. The defendant answered that to make it pay the cost would deprive it of its property and contract rights under its franchise without due process of law and the equal protection of the laws, contrary to the Constitution of the United States. The judge before whom the case was tried found that the designated space had become so out of repair as to interfere with travel, and that the crushed stone then used was not a proper pavement, and would interfere with the asphalt laid down by the city, and gave judgment for the plaintiff. The supreme court accepted the defendant's position, that its charter was a contract, but met the argument based upon it by a construction that warranted the later ordinance, and judgment for the plaintiff was affirmed. 156 Wis. 352, L.R.A. --, --, 146 N. W. 492.
As our opinion is that the judgment should be affirmed, we shall not dwell upon a motion to dismiss made by the defendant in error. The court expressly upheld the later ordinance, and whether that ordinance can be upheld without impairing the obligation of the admitted contract of the charter is a Federal question none the less that the answer depends upon the construction of the instrument. Even if the opinion below be read as asserting that the duty existed by the charter alone, irrespective of the later ordinance, still as the ordinance was set up and relied upon in the declaration and was present impelling, [240 U.S. 457, 460] so far as might be, the decision reached, and was given effect by that decision, we should not dismiss the case. Terre Haute & I. R. Co. v. Indiana, 194 U.S. 579 , 48 L. ed. 1124, 24 Sup. Ct. Rep. 767. We lay on one side a suggestion that runs counter to the opinion below and to common sense, that the later ordinance, when it requires the defendant to do the work under a penalty of not exceeding $50 a day, is not a legislative command, but merely a notice to perform a duty already in force.
Up to 1892 the defendant's franchise was held under a charter that, after providing for the disposition to be made of snow on the track, continued: 'And said company shall keep the space between the rails and for the distance of 1 foot on the outside side of the rails in proper repair so as not to interfere with travel over the same, and shall keep the same in proper order as to cleanliness at its own cost and expense.' The charter then went on to provide that whenever a street in which were tracks should be paved or macadamized, the railway company should pave or macadamize the above-mentioned space and keep it in equally good and corresponding condition. In 1892, a new ordinance was passed authorizing the company to build and operate a road in the city and to use electricity as a motive power upon its tracks then or thereafter authorized and constructed. It had the above-quoted provision as to keeping the space in repair, and the grant was made 'subject to such reasonable rules and regulations respecting such streets and highways and operation of cars as the said council may from time to time enact,' but the ordinance did not repeat the provision as to paving. The supreme court held that the requirement to keep the space in repair was enough, and, by a diminished majority, that the ordinance of 1910 fell within the reasonable rules and regulations that the company was bound to obey.
If there had been no ordinance of 1910, but the suit [240 U.S. 457, 461] had been brought simply upon the alleged duty under the charter of 1892, and the city had recovered, as it might have upon the present interpretation of that instrument, there would have been no question for this court. Fisher v. New Orleans, 218 U.S. 438, 440 , 54 S. L. ed. 1099, 1100, 31 Sup. Ct. Rep. 57. While this consideration has not required us to dismiss the writ of error, it suggests reasons of more than usual force for following that interpretation. Although we all agree that in this class of cases it is our duty to see that parties are not deprived of their constitutional rights under the guise of construction, still the mere fact that without the state decision we might have hesitated is not enough to lead us to overrule that decision upon a fairly doubtful point. Tampa Waterworks Co. v. Tampa, 199 U.S. 241, 243 , 244 S., 50 L. ed. 170, 173, 174, 26 Sup. Ct. Rep. 23. We appreciate the argument to be drawn from the omission of the paving clause in the charter of 1892, and the possible reason for its omission in the fact that the experiment of substituting electricity for horse power then was relatively new. But it is also possible that the clause was deemed superfluous, if, indeed, the omission should be considered at all. Charles River Bridge v. Warren Bridge, 11 Pet. 420, 543, 544, 9 L. ed. 773, 822, 823. It is to be remembered that this requirement is a widespread one with regard to street railways. Reading v. United Traction Co. 202 Pa. 571, 573, 52 Atl. 106, 215 Pa. 250, 255, 64 Atl. 446, 7 Ann. Cas. 380. There are persuasive decisions that the obligation to keep the space 'in proper repair so as not to interfere with travel over the same' extends to what was demanded of the defendant in this case. New York v. Harlem Bridge, M. & F. R. Co. 186 N. Y. 304, 78 N. E. 1072; State ex rel. Milwaukee v. Milwaukee Electric R. & Light Co. 151 Wis. 520, 139 N. W. 396, Ann. Cas. 1914B, 123. The reasons for construing such ordinances strictly in favor of the public are reiterated in the present case. Knoxville Water Co. v. Knoxville, 200 U.S. 22, 33 , 34 S., 50 L. ed. 353, 359, 26 Sup. Ct. Rep. 224; Blair v. Chicago, 201 U.S. 400, 472 , 473 S., 50 L. ed. 801, 831, 832, 26 Sup. Ct. Rep. 427. Both of the grounds taken by the court below get some support from [240 U.S. 457, 462] decisions of this court. Fair Haven & W. R. Co. v. New Haven, 203 U.S. 379, 389 , 51 S. L. ed. 237, 241, 27 Sup. Ct. Rep. 74; Detroit v. Detroit Citizens' Street R. Co. 184 U.S. 368, 397 , 46 S. L. ed. 592, 611, 22 Sup. Ct. Rep. 410. In view of the finding that the pavement needed repair and that crushed stone would not have been suitable for the purpose and would have been additionally unsuitable when the rest of the street was paved with asphalt, we do not feel prepared to declare the judgment wrong.


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TLJ News from July 1-5, 2008.
7/3. Stewart Mayhew was named Deputy Chief Economist in the Securities and Exchange Commission's (SEC) Office of Economic Analysis. See, SEC release.
7/3. The U.S. Court of Appeals (11thCir) issued its opinion [35 pages in PDF] in US v. Lamons, affirming a criminal conviction obtained following the introduction into evidence of call records of wireless carrier Sprint. The US charged Turhan Lamons, an AirTran steward, with various crimes in connection with his using a cell phone to make phone calls to AirTran that falsely asserted that there was a bomb on board a plane, and with his starting a fire in the lavatory of that plane. The indictment charged, among other crimes, violation of 18 U.S.C. § 35(b) (conveying false information regarding threats to commercial flights) and 18 U.S.C. § 844(e) (using a telephone to make bomb threats or convey false information regarding bomb threats). The prosecution introduced into evidence a CD provided by Sprint of data collected from telephone calls made to AirTran and a call report created from that compact disc. The District Court rejected Lamons' argument that this amounted to testimonial hearsay in violation of the confrontation clause of the Sixth Amendment. The jury reached a verdict of guilty on the §35(b) count, but not the §844(e) count. The Court of Appeals affirmed, concluding that this evidence did not constitute statements. This case is USA v. Turhan Jamar Lamons, U.S. Court of Appeals for the 11th Circuit, App. Ct. No. 06-14427, an appeal from the U.S. District Court for the Northern District of Georgia, D.C. No. 03-00046-CR-01-RLV-4.
7/2. Federal Reserve Board member Frederic Mishkin gave a speech in Eliat, Israel titled "Global Financial Turmoil and the World Economy". He discussed, among other things, the role of information and information technologies in financial markets.
Mishkin (at right) said that "financial markets can do their job well only when they solve information problems that would otherwise impede the efficient allocation of credit to worthy borrowers. The history of financial development can be characterized as a process in which innovation tends to lead to improvements in the quality of information, and this, in turn, enables new financial products and markets to develop. Indeed, in the past decade or so, technological innovations and financial market liberalization improved the flow of information and capital to broader groups of people."
"Advances in information technology and financial innovations in recent decades encouraged new lending products and faster securitization of debt. This lowered transaction costs and contributed to a ``democratization of credit´´", said Mishkin.
That is, "a potential customer with an Internet connection could quickly fill out an online form, and a mortgage broker could rapidly price a loan with the help of credit-scoring technology."
Then, the "resulting mortgages were bundled together to produce mortgage-backed securities, which could then be sold off to investors. Advances in financial engineering took the securitization process even further by carving mortgage-backed securities into more-complicated structured products, such as collateralized debt obligations (CDOs), or even CDOs of CDOs, with an eye to tailoring the credit risks of various types of assets to risk profiles desired by different kinds of investors."
He then reviewed nature and causes of recent turmoil in financial markets. "All seemed well as long as the economy -- particularly, the housing market -- was booming, and credit became more and more available. But when the housing market turned down, substantial problems were exposed."
He explained that "it became painfully clear how poor the underwriting and credit-risk analysis were for a wide range of products. Some appraisers, brokers, and investment banks were motivated by transaction fees and had little stake in the ultimate performance of the loans they helped to arrange. Many securitized products were complex, and the ownership structure of the underlying assets was opaque. Investors relied heavily on credit ratings instead of conducting due diligence themselves, and credit rating agencies failed to fulfill their raison d'etre. The result has been rising defaults, particularly in the subprime mortgage markets, with losses to both investors and financial institutions."
7/2. The Copyright Office (CO) published a notice in the Federal Register that announces, recites, and describes numerous changes to the CO's rules. The notice characterizes these as "housekeeping amendments". See, Federal Register, July 2, 2008, Vol. 73, No. 128, at Pages 37838-37840.
7/1. Corey Booth, who was Director of the Securities and Exchange Commission's (SEC) Office of Information Technology until June 30, joined the Boston Consulting Group in New York. See, SEC release.
7/1. Daniel Gallagher was named a Deputy Director of the Securities and Exchange Commission's (SEC) Division of Trading and Markets. Gallagher has been Counsel to SEC Chairman Chris Cox since 2007. Before that, he was Counsel to outgoing SEC Commissioner Paul Atkins. See, SEC release.
7/1. Colleen Litkenhaus joined the Office of the U.S. Trade Representative (OUSTR) as the Assistant USTR for Intergovernmental Affairs and Public Liaison. See, OUSTR release.
7/1. The Office of the U.S. Trade Representative (OUSTR) announced that Michael Delaney will join the OUSTR as Assistant USTR for South Asian Affairs in September. He is a long time career Foreign Service officer at the Department of State. See, OUSTR release.
7/1. The Department of Justice's (DOJ) Antitrust Division announced in a release that it "will close its investigation" of Visa, Inc., regarding its debit card industry practices. The DOJ wrote that Visa "has rescinded a rule that required merchants to treat Visa-branded debit cards differently when used as a PIN-debit card (and processed via non-Visa networks) from the same cards when used as signature debit cards and processed on the Visa network". (Parentheses in original.) The DOJ added that this "should eliminate any potential for competitive harm".
7/1. The Federal Trade Commission (FTC) published a notice in the Federal Register that announces that it "intends to conduct consumer survey research to advance its understanding of the experiences of consumers who interact with consumer reporting agencies following an incident of identity theft". The FTC seeks public comments on this research. See, Federal Register: July 1, 2008, Vol. 73, No. 127, at Pages 37457-37458. See also, FTC release. Comments are due by September 2, 2008.
Go to News from June 26-30, 2008.


Recently, our clients have seen an increase in insurance claims where an insured, who has previously filed for bankruptcy, subsequently sustains a first-party property loss and seeks indemnification for the loss. There are several important issues to consider when investigating claims of this nature, including whether the insured has fraudulently valued the insurance claim or the assets disclosed in the prior bankruptcy.
At the outset of any claim investigation, where the insured has previously filed for bankruptcy, it is important to obtain all of the insured’s bankruptcy filings, as they may contain admissions or omissions that limit or preclude recovery on the insurance claim. In this regard, it is essential to analyze the bankruptcy filings for a description of the insured’s assets and their values. Further, if the insured failed to disclose the existence of a pending lawsuit in the bankruptcy, he may lose standing to assert, or the ability to prosecute an action on the claim.
A debtor files for bankruptcy as a means of discharging debts and obligations and receiving a “fresh start.” The bankruptcy case is initiated by the debtor filing a bankruptcy petition, which includes schedules of assets and liabilities and a statement of financial affairs. The debtor must execute these documents under penalty of perjury, and is required to include a good faith estimate of the value of all of his assets. See 11 U.S.C. § 521(a)(1). Upon the bankruptcy filing, a trustee is appointed to administer the debtor’s estate and liquidate the debtor’s assets in order to pay creditors. The submission of the petition is required for the trustee to properly administer the debtor’s estate, and ultimately, for the debtor to receive a discharge of his debts. The intentional or unintentional undervaluing of the debtor’s assets, or the failure to disclose those assets in a bankruptcy petition, may limit or preclude the debtor from recovery in a subsequent legal proceeding based upon the doctrine of judicial estoppel.
The doctrine of judicial estoppel holds that “where a party assumes a position in a legal proceeding and succeeds in maintaining that position, that party may not subsequently assume a contrary position because its interests have changed.” McIntosh Builders., Inc. v. Ball, 264 A.D.2d 869, 870, 695 N.Y.S.2d 196 (3d Dep’t 1999). Stated another way, “[a] litigant should not be permitted to lead a tribunal to find a fact one way and then attempt to convince a court in a different proceeding that the same fact should be found otherwise; the litigant should be bound by the prior stance that he or she clearly asserted.” Kilcer v. Niagara Mohawk Power Corp., 86 A.D.3d 682, 683, 926 N.Y.S.2d 224 (3d Dep’t 2011).
In order to assert a defense of judicial estoppel in connection with an insured’s prior bankruptcy filing, there must be a “final determination in the bankruptcy proceeding endorsing the party’s inconsistent position concerning his or her assets.” McIntosh Builders Inc., 264 A.D.2d at 870. The failure of a debtor to disclose all of his assets in a bankruptcy, as well as a debtor’s undervaluation of his assets may prevent recovery for the loss of those undisclosed or undervalued assets in a subsequent proceeding. See Kittner v. Eastern Mut. Ins. Co., 80 A.D.3d 843, 915 N.Y.S.2d 666 (3d Dep’t 2011); Popadyn v. Clark Constr. & Prop. Maintenance Servs., Inc., 49 A.D.3d 1335, 854 N.Y.S.2d 626 (4th Dep’t 2008).
With respect to insurance claims made after a debtor’s bankruptcy filing, the doctrine of judicial estoppel prevents an insured from taking a position, under oath, in a bankruptcy filing and later asserting a contrary or inconsistent position in a subsequent litigation over the denial of an insurance claim. By way of example, assume that an insured filed for bankruptcy in 2009 and indicated in his bankruptcy schedules that he owned only $3,500 in personal property. As such, the insured’s (debtor’s) bankruptcy estate was administrated based upon that premise, with his debts discharged. Assume further that the insured’s home subsequently sustained a fire loss and he made a claim to his insurer for loss of personal property in the amount of $150,000 (in contrast to the $3,500 value he swore to on his petition schedules), which claim was ultimately denied.
Setting aside the potentially significant issue of bankruptcy fraud, a court adjudicating a breach of contract action brought by the insured against the insurer over the denial of coverage would likely find that the insured is judicially estopped from asserting that he owned $150,000 worth of personal property. Because the insured previously affirmed in his bankruptcy case that his personal property was only worth $3,500, the insured’s damages on his personal property claim would either be limited to that amount, or possibly denied outright if the overvaluation constituted a material misrepresentation made in connection with the claim (e.g., as a part of a Sworn Statement in Proof of Loss or at an Examination Under Oath). Thus, the bankruptcy filings are important documents to analyze during the claim investigation stage as they could potentially limit or bar an insured’s personal property claim.
Additionally, a debtor is required to disclose all of his “property” in a bankruptcy. Litigation is considered property since it is a potential asset or liability of the debtor. Therefore, a debtor must disclose to the bankruptcy trustee any litigation in which he is a party, as well as any claims or causes of action he may have against any party, because it is the trustee of debtor’s estate who is solely vested with the right to prosecute the action for the benefit of creditors (unless the trustee abandons the “property” i.e., the litigation, back to the debtor). The failure to disclose litigation may preclude the debtor’s recovery in an action that is not disclosed in bankruptcy since all of the debtor’s claims constitute property of the bankruptcy estate. See Solovay v. Allure Home Improvements, 2011 NY Slip Op 31850U, *4, 2011 N.Y. Misc. LEXIS 3336 (Sup. Ct., Nassau Co., June 29, 2011) (“judicial estoppel prevents a party from prosecuting claims not disclosed in a bankruptcy proceeding that resulted in a party’s discharge”); Best v. MetLife Auto & Home Ins. Co., 7 Misc. 3d 242, 248, 793 N.Y.S.2d 682, 687 (Sup. Ct., Richmond Co. 2004) (“a debtor who fails to disclose a cause of action in bankruptcy, when required by the Bankruptcy Code … is barred following discharge or other substantive termination of the petition by the Bankruptcy Court from asserting capacity and standing to sue on any such cause of action not appropriately disclosed”). Thus, to the extent that an action was pending at the time of a debtor’s bankruptcy proceeding and had not been disclosed in the petition, the action may be subject to a motion to dismiss based on the insured’s lack of standing.
Therefore, where an insured has previously filed for bankruptcy, it is important to obtain the bankruptcy filings at the beginning of any claim investigation or litigation since the debtor’s petition may contain information that may limit or preclude future claims and causes of action.
Reprinted with permssion. All rights reserved.


In this two-hour session, we would like to lead a discussion of important current issues for lawyers representing financial institutions and/or officers and directors including both legal ethics and codes of conduct. We have recently participated in several seminars, including roundtable discussions with regulators. We also have recently presented seminars and training for board members and for lawyers representing financial institutions. In addition, this fall we have led strategic planning and educational meetings for boards of directors to prepare for changes in 2012 and beyond. Never before have we found these presentations and discussions to be so challenging. However, one of the significant benefits has been that the give and take in these sessions has proven to be very valuable in understanding how to best plan for 2012 and beyond.
While the largest financial institutions are subject to enhanced levels of stress testing and submissions of capital plans to the regulators, financial institutions of all sizes are experiencing a trickle down of these enhanced regulatory requirements. At the same time, the “unknowns” in global and U.S. economic developments make it harder to conduct risk assessments.
Also, the legislative mandates which have yet to result in regulations and guidances create uncertainties which can be disconcerting in representing financial institutions and in strategic planning. One area in which lack of clarity looms over the planning processes has created a particularly large surge of discussion between the financial institutions industry and regulators. That is, the area of fair lending and the new definitions in the Dodd-Frank Act, which have yet to be explained, and related issues to be addressed by the Consumer Financial Protection Bureau have been recognized as “unknown” causing “uncertainty” and requiring special efforts in risk management at this time.
We have also provided extensive materials in several seminars presented since the current amended Oklahoma Rules of Professional Conduct (“Oklahoma Rules”) were approved by the Oklahoma Supreme Court and became effective January 1, 2008. The amended Rules contained both changes to the substantive Oklahoma Rules themselves and extensive amendments and additions to the Comments. Several of these amended Rules are cited in these materials and will be the subject of discussions at this seminar.
We note that a number of federal regulatory enforcement actions have been issued which are directed at attorneys and law firms as “institution-affiliated” parties under federal law. These provisions of federal law have been revised and strengthened as have other enforcement powers of financial institution regulatory agencies.
Major federal legislation impacting financial institutions and their lawyers has been passed by Congress in the last decade including the Emergency Economic Stabilization Act of 2008, Financial Services Regulatory Relief Act of 2006, Gramm-Leach-Bliley Act, USA Patriot Act, and Sarbanes-Oxley Act. Most recently the current Congress passed the Dodd-Frank Regulatory Reform Act (“Dodd-Frank Act”) as discussed in this presentation.
In the previous decade, Congress passed a series of federal legislative directives ramping up the enforcement powers of federal financial institutions’ regulators, i.e., the Financial Institution Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”), the FDIC Improvement Act of 1991, and the Reigle Community Development and Regulatory Improvement Act of 1994 (“Reigle Act”). In fact, the regulatory agencies’ Standards for Safety and Soundness were initially issued pursuant to Section 132(c) of the FDIC Improvement Act of 1991 as amended by the Reigle Act in 1994 and those statutory provisions which were mirrored by the regulators are codified in Section 39 of the FDIC Improvement Act at 12 U.S.C. 1831 p-1.
In this discussion, we emphasize that lawyers representing financial institutions and their officers and directors must be familiar with these statutory and regulatory provisions as well as other important federal and state laws. Meeting ethical obligations requires reference to both the Rules of Professional Conduct and these statutory and regulatory provisions.
An attorney who represents a financial institution or a related business encounters some of the most complicated and far reaching ethical issues of any practitioner. All bank regulatory agencies have authority to seek civil damages against any “institution affiliated party” which is defined to include attorneys in certain situations. Section 708 of the Financial Services Regulatory Relief Act of 2006 substantially expanded the scope of regulatory enforcement authority applicable to “institution affiliated parties” by broadening that definition, effective October 13, 2006.
Because of the complications of being an “institution affiliated party” as well as unique conflict issues involving representation of the financial institution or one of its affiliates or related entities and those individuals associated with the institution in the capacity of officers or directors, whether practicing corporate or regulatory compliance law in the sphere of financial institution representation, a lawyer faces a multitude of ethical questions. These ethical questions may also involve potential violations of Federal and state banking law. There are also other ethical issues and concerns which arise when a lawyer serves on the board of directors of a financial institution or one of its affiliates or is simply operating a law firm which has a banking relationship with a financial institution the firm represents.
The uniqueness of representing a client which is subject to high regulatory standards and examination and reporting to government entities increases the scrutiny of the ethical considerations with regard to appropriate confidentiality and conflicts issues. These issues and the accompanying potential liability have been substantially enhanced due to litigation surrounding closed bank receiverships and subsequent legislation. The Federal legislative developments have been substantive and expansive in providing additional enforcement tools and broad safety and soundness standards. Subsequently promulgated regulations to implement these new tools and standards have been effectively used to address regulatory concerns.
Thus, the purpose of this presentation will be to highlight ethical concerns in several areas of banking and consumer law and to heighten awareness of the various laws and ethical considerations. Also, we would seek to encourage the development of discussion and educational presentations concerning ethical issues in corporate and regulatory representation of financial institutions and related businesses.
State professional responsibility rules have also been readdressed in this area. For instance, Rule 1.6 of the Oklahoma Rules which provided for the “Confidentiality of Information” in the client-lawyer relationship; 1.6 has been substantially expanded.
Rule 1.6 of the ABA Model Rules of Conduct is not as permissive as the Oklahoma Rule and other state rules may vary also. Additionally, those attorneys who handle securities matters before the Securities and Exchange Commission (“SEC”) for financial institutions will have the requirements of SEC regulations implementing Part 307 of the Sarbones-Oxley Act of 2002 to meet in their communications with their client and the SEC.
Many unique areas of banking and consumer law and particularly the fair lending area of law give rise to concerns with regard to this Rule. These fair lending auditing results as well as other sorts of compliance auditing records have been addressed by a number of state legislatures including the Oklahoma Legislature. We refer you to Section 3002 of Title 6 of the Oklahoma Statutes, which was effective July 1, 1995 as an example.
The Federal banking agencies have also recognized and discussed the sensitivity and importance of preserving the confidentiality privilege during the examinations. For instance, the Office of the Comptroller of the Currency has addressed these issues in the Comptroller’s Handbook on Litigation and Other Legal Matters.
There are a substantial number of areas of the law which require in depth study and focus in order to achieve and maintain competency in representation of the financial institution client. Lawyers representing financial institutions and related businesses find the applicable law challenging and continuously changing. The need for finding a specific area in which to concentrate and continuing an attorney’s legal education to be apprised of legal requirements and revisions to represent the client is quickly apparent in reviewing enforcement matters as well as civil litigation. Reviewing the current emphasis of issues in both bank safety and soundness and compliance examinations provides guidance in identifying areas of particular importance to your client.
As an example, one area of long term and current emphasis by the regulators is the area of law generally referred to as “fair lending” including the implementing of regulations of the Equal Credit Opportunity Act, the Community Reinvestment Act, the Fair Housing Act, the Home Mortgage Disclosure Act, Real Estate Settlement Procedures Act (“RESPA”), and the Truth in Lending Act which includes Section 32, the Home Ownership and Equity Protection Act of 1994 (“HOEPA”), which have been and continue to be vigorously enforced. Of course, the various regulations, interpretations and commentaries published by the regulatory agencies on this topic are part of this expansive body of law; for instance, the Interagency Policy Statement on Discrimination in Lending as well as other interpretations available from the banking agencies must be familiar to a practitioner assisting a financial institution with compliance.
Most importantly, it is noted that certain consumer laws allow an appropriate redisclosure or reimbursement to customers to limit civil liability if properly accomplished within set time limits. For instance, the Truth-In-Lending law permits corrective action within 60 days of “discovery”. Thus, it is imperative that counsel be familiar with these provisions and timely advise the client of legal alternatives to be considered in addition to the business decisions they may be reviewing.
An area of particular importance in which unwary practitioners may find problems is the appropriate notice or prior approval of the regulations of change of control of a financial institution. This is an area which may result in enforcement actions against individuals or the financial institution. Review of the rules of notice and the definitions of what constitutes “control” is advisable. Additionally, it is noted that a change of control and other factors can trigger certain additional reporting requirements for periods established by regulatory issuances pursuant to Federal statutes. For instance, Federal law requires specified categories of national banks to furnish the OCC with at least thirty (30) days notice before adding any individual to the board of directors or employing an individual as a senior executive officer. That is, a national bank is subject to the notice requirement if the bank (i) has been chartered for fewer than two years, (ii) has undergone a change of control within the preceding two years, or (iii) is not in compliance with the minimum capital requirements applicable to it or is otherwise in a “troubled condition”, as determined on the bases of the bank’s most recent report of condition or report of examination or inspection.
We note that recent revisions to the provisions of federal law which expand enforcement authority over “institution affiliated parties” also specifically relate to change of control transactions. Additionally, enforcement actions which name attorneys have involved issues regarding insider transactions as well as issues of competency.
Areas in which these sorts of issues most quickly arise involve capital and dividend matters and holding company formations and expansion. Also, affiliate party transactions and insider borrowing transactions can involve these sorts of issues because of the complicated overlapping of affiliate and insider borrowing issues. Recently adopted Regulation W implementing provisions of the Banking Affiliates Act and subsequent issuances provide guidance and additional limitations on affiliate transactions. The violations of these provisions are more likely to involve pursuit of civil money penalties than many other sorts of violations. Familiarity with definitions of “executive officer”, “related interests”, and “affiliates” as well as familiarity with the issues of “control” are imperative. Another very difficult area that can involve civil money penalties or criminal prosecution and potential conflict of interest is the Bank Secrecy Act. Federal law disallows the disclosure to a person who is the subject of a suspicious activity report of the fact that a suspicious activity report is to be filed. Bank counsel should be familiar with that requirement and properly advise clients with regard to these issues. Because of the very fine line in handling required reporting, including suspicious activity reports, versus complying with privacy law restrictions, counsel for the financial institution must be well apprised of these areas of law and quick to recognize and disclose conflicts. A review of these pitfalls would involve a discussion of the inherent conflicts in these laws. Generally, no release of customer financial records is permitted unless the customer agrees to the release or the customer is notified and the customer does not object after notice and a reasonable time to raise an objection. However, in certain instances Federal law prohibits the disclosure to the customer of the request for information; for instance, where a Federal grand jury subpoena has been issued involving a crime against a bank. Additionally, financial institutions are obligated to file suspicious activity reports in instances where there is a “suspicion” of a crime; however, only very limited information can be released to appropriate government authorities relevant to a possible violation and, release of information beyond those limits can expose the institution and related individuals to third party liability and the person who is the subject of the filing cannot be notified.
Because of the nature of reporting currency transactions and appropriate use of suspicious activity reports in this area, a substantial degree of risk with regard to handling appropriate release of bank customer information is involved. In instances when an officer or director of an institution is the subject of the report, the attorney’s responsibility remains with the institution. While independent representation may be sorely needed, to so advise the individual would cause a violation of Federal law.
Rule 1.13 of the Oklahoma Rules and the ABA Model Rules of Professional Conduct deal with representing an organization such as a bank or other business entity as a client. This rule addresses the sorts of situations where an officer, employee or other person intends to act or refuses to act in a matter that may cause a violation of a legal obligation of the organization and the lawyer is obligated “to proceed as is reasonably necessary in the best interest of the organization”. One measure that may be taken is advising that a separate legal opinion on the matter be sought for presentation to the appropriate authority (this may be the board of directors). Separately, the rule provides that in dealing with an organization’s directors, officers, employees, members, shareholders or other constituents, a lawyer is obligated to explain the identity of the client when it is apparent that the organization’s interests are adverse to those of the constituents with whom the lawyer is dealing. This rule also separately addresses the situation where an attorney represents both the organization and the interest of any such individual constituent and must obtain the consent required by Rule 1.7 from an appropriate official(s) other than the person being represented (again, this may be the board of directors).
The ethical issues which arise in the situation where a lawyer serves on the board of directors of a financial institution or a related business are manifold. The commentary to Rule 1.7 of the Oklahoma Rules sets forth specific direction on certain of these issues, and the commentary to the amended Rule expands this analysis.
The concept with regard to a “Chinese Wall” in acquisition and merger transactions particularly as well as in regulatory representation needs to be carefully reviewed. Several provisions in the amended Rules affect commercial lawyers’ conflict of interest issues. A new Section 1.18 addresses the liklihood of a conflict being created in the first meeting with a prospective client on a new matter and, as noted above, other revisions include the use of “informed consent” requirements. Separately in amended Rule 1.0(k) the old “Chinese Wall” approach in handling conflicts within a firm is addressed within the definition for the “screened” handling of matters.
The attorney’s obligation to zealously assert the client’s position is found in the Preamble to the Oklahoma Rules and the ABA Model Rules of Conduct and Rule 1.3 of both the Oklahoma and Model Rules. After first identifying the client and resolving any conflicts, the attorney still must guard against advocating a position zealously which ultimately is not in the best interests of his/her client and its directors nor the attorney as an affiliated party.
For instance, attorneys representing financial institutions frequently find themselves in situations involving evaluations of loans for combination or otherwise structuring lending transactions involving insider transactions, affiliate transactions, or lending limit considerations with outside borrowers. Pressure to assist in allowing the loans booked at the bank rather than participated or made by another lender is not uncommon. This is an area in which counsel have been pursued as “affiliated parties” by bank regulatory agencies and further discussion and review of the responsibilities of attorneys in this area is important.
Enforcement actions can only be brought by federal regulators based on statutory authority or certain types of rules of the agencies adopted pursuant to the Federal Administrative Procedure Act. An article published in the American Bar Association’s Administrative Law Review’s Spring 2000 issue entitled Distinguishing Legislative Rules from Interpretive Rulesdescribes the confusion in the law regarding those rules which have the force and effect of law. While you may or may not agree with the position advocated by the author of that article, the review of the status of the law is helpful in reflecting on the various rulemaking endeavors of the federal banking regulatory agencies.
F.Interdisciplinary Practice and Multistate Practice and Unauthorized Practice of Law.
The amended Rules made no substantive changes to current Rule 5.4 which would address multidisciplinary practices. The amended Rules 5.5 and 8.5 did revise the multijurisdictional rules creating specific safe harbors and addressing reciprocal enforcement. Rule 1.13 as amended, addresses the Sabanes-Oxley “up the ladder” communication requirements for representing an entity. We encourage your review of the specific provisions of the Rules on the OBA website cited in these materials.
Issues regarding ethical conduct for financial institution officers, directors, employees and attorneys often arise in connection with the Federal Bank Bribery Act (the “Act”) which prohibits the payment or solicitation of bribes in connection with financial institution transactions. Regulatory pronouncements in recent years have emphasized the need for financial institutions to adopt corporate codes of conduct, codes of ethics or ethics policies (collectively hereafter “code” or “codes”) to address issues arising under the Act, as well as general corporate governance concerns arising under the Sarbanes-Oxley Act and related provisions of the Federal Deposit Insurance Act (“FDI Act”) and regulations, and those laws and regulations specifically addressing prohibitions and limitations on insider transactions, including the Federal Reserve Board’s Regulation O (“Regulation O”). The FDIC issued its “Corporate Code of Conduct Guidance on Implementing an Effective Ethics Program” in October of 2005 (“FDIC Guidance”) and the OCC addressed the need for codes in the “Insider Activities” segment of the Controller’s Handbook, issued in March of 2006 (“Comptroller’s Handbook”).
6. FDIC Guidance “Corporate Governance, Audits, and Reporting Requirements”.
Having identified attorneys as both affiliated parties of the bank and as being specifically subject to the Act, it is apparent that not only should attorneys be involved in developing and implementing a code of conduct from the standpoint of providing legal counsel but that bank counsel must also be familiar and compliant with such codes. It should also be apparent from the many regulatory pronouncements regarding codes of conduct and ethics policies that this is an area of current regulatory scrutiny. Even more importantly, the implementation of an effective code will provide the bank with an important tool to identify, and hopefully avoid, the many economic, reputation, compliance and other risks inherent in unethical and, in some cases, illegal actions on the part of officers, directors, employees and even bank counsel.
Two recent lawsuits between the Federal Deposit Insurance Corporation (“FDIC”) as receiver for failed financial institutions and law firms representing members of the failed institutions’ board of directors raise interesting ethics considerations. Federal Deposit Insurance Corporation, as Receiver for Hillcrest Bank v. Bryan Cave LLP, Civil Action No. 1:10-CV-03666-TCB, USDC ND GA and McKenna Long & Aldridge LLP v. Federal Deposit Insurance Corporation, as Receiver for Darby Bank & Trust Co., K Bank, McInstosh (sic) Commercial Bank, and NorthWest Bank & Trust, Civil Action No. 1:10-CV-03779-RWS, USDC ND GA. The Bryan Cave case was initiated by the FDIC as a result of bank documents being copied and provided to the law firm as counsel for officers and directors of the Hillcrest Bank before that bank was closed by the Kansas Office of the State Bank Commissioner and the FDIC was appointed as receiver. The McKenna case was initiated by that law firm in connection with the failures of Darby Bank & Trust Co., K Bank, McIntosh Commercial Bank and NorthWest Bank & Trust, as what appeared to be a preemptive attempt to forestall the same sort of litigation initiated by the FDIC in Bryan Cave. In its Answer and Counterclaim in the McKenna case, the FDIC asserted essentially the same causes of action against McKenna Long & Aldridge that it asserted against Bryan Cave. While both cases were settled and therefore did not give rise to established precedent and both cases involved failed institutions, the factual and legal underpinnings for the parties’ respective positions in these cases provide food for careful consideration and digestion by attorneys practicing in the financial institution arena. For these purposes, we will focus specifically on the Bryan Cave litigation.
At the outset, the FDIC relied on 12 U.S.C. §1821(d)(2) to support the proposition that, as receiver, it had “succeeded to all rights, titles, powers and privileges of” the failed institution and thus “became the owner of Hillcrest Bank’s books, records and assets, including all copies.” Consequently, for ethics consideration purposes, it may be assumed that the same arguments asserted by the FDIC as receiver could be asserted by any financial institution with respect to the circumstance of purportedly unauthorized delivery of copies of institution records to counsel representing individual officers and directors, rather than counsel representing the institution itself. Of course, the distinction between representation of a financial institution and representation of its officers and directors raises significant ethical considerations in and of itself with respect to conflicts of interest.
Among the allegations asserted by the FDIC was that the bank documents provided to counsel for officers and directors included documents relating to the bank’s business and finances, the FDIC’s examination and investigation of the bank and, importantly, confidential customer information. Due to the inclusion of such confidential customer information in the copied files, the FDIC alleged that the release of documents to the counsel “violates and/or creates a risk of violating” 15 U.S.C. § 6801 and 6905(b) of the Gramm-Leach-Bliley act, 12 U.S.C. §1831p-1 of the [Federal Deposit Insurance Act] and 12 C.F.R. Parts 332 (Privacy of Consumer Financial Information) and 364 (Standards for Safety and Soundness, including the Interagency Guidelines Establishing Information Security Standards). Presumably because the copied documents were transmitted electronically, the FDIC also alleged violations of the federal Computer Fraud and Abuse Act, 18 U.S.C. §1030(a).
The FDIC also included an allegation asserting “Unjust Enrichment/Money Had and Received”, based on the fact that the engagement letter pursuant to which the officers and directors had retained Bryan Cave apparently provided that the bank, and not the officers and directors, would be responsible for all legal fees in connection with the engagement.
 12 U.S.C. § 1813(4), as amended.
 Financial Institutions Reform. Recovery, and Enforcement Act ogf 1989, Pub. L. No. 101-73, 1036 stat. 183 (1989).
 Federal Deposit Insurance Corporation Improvement Act of 1991, Pub. L. No. 102-242, 105 stat. 2236 (1991).
 Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Pub. L. No. 101-73, 103 Stat. 183 (1989), amending 12 U.S.C. §§1813, 1786, (“FIRREA”).
 OK ST RPC Rule 1.6, prior to 2008 amendments.
 MODEL RULES OF PROF’L CONDUCT 1.6 (2001).
 OK ST T.6 § 3002.
 Litigation and Other Legal Matters, Comptroller’s Handbook, Office of the Comptroller of the Currency, February 2000.
 MODEL RULES OF PROF’L CONDUCT 1.1 (2001).
 15 U.S.C. § 1691 et seq.; 12 C.F.R. 202.1 et. seq.
 12 U.S.C. § 2901 et seq.
 12 U.S.C. § 1829(b) and 1951-1959; 31 U.S.C. § 5311-5330; 31 CFR 103.
 42 U.S.C. § 4012 et. seq.
 12 U.S.C. § 23A and B; 12 CFR 223; 12 C.F.R. 215.
 15 U.S.C. § 1601 et. seq.; 12 C.F.R. 226.
 12 U.S.C. § 2601 et. seq.; 12 C.F.R. 3500.
 12 U.S.C. § 4301 et. seq.; 12 C.F.R. 230.
See e.g., Regulation Y issued by the Board of Governors of the Federal Reserve System under the authority of Section 5(b) of the Bank Holding Act of 1956, as amended, 12 U.S.C. § 1844(b), as well as other authorities sets forth in Subpart E provisions dealing with the change in bank control.
 12 USC § 371c & 371c-1.
 OK ST RPC Rule 1.13 and MODEL RULES OF PROF’L CONDUCT 1.13.
 5 U.S.C. § 551, et seq.
FIL-105-2005; Comptroller’s Handbook, Corporate Governance, Insider Activities, March 2006.


TYLER PETERS, et al., Defendants.
Plaintiff Darcy D. Williamson, Trustee for the Bankruptcy Estate of McCorkendale Construction, Inc. (“McCorkendale”) filed an Adversary Complaint for Professional Negligence in the United States Bankruptcy Court for the District of Kansas. United States Bankruptcy Judge Dale L. Sommers recommended the professional negligence matter be transferred to this court and this court adopted that recommendation on June 20, 2017. (Doc. 3.) The matter is now before this court on defendants Tyler Peters and Payne & Jones, Chartered's Motion to Dismiss for Lack of Subject Matter Jurisdiction (Doc. 8). For the reasons set forth below, the court finds it lacks subject matter jurisdiction over the adversary complaint and grants defendants' motion.
According to the adversary complaint filed April 21, 2017, McCorkendale retained defendants to represent them in an action in Johnson County, Kansas District Court against Duggan Homes, Inc., in which McCorkendale obtained a judgment in the amount of $438, 197.36. According to the journal entry of judgment dated April 28, 2010, this judgment could only be a judgment lien on the real property that was specifically identified in Exhibit A, which was attached to the journal entry of judgment. Defendants assisted McCorkendale in obtaining an amended judgment against Duggan Homes, Inc., in which the restrictions set out in the first journal entry were removed.
On March 10, 2011, defendants registered this judgment as a foreign judgment in Clay County, Missouri Circuit Court. Defendants, however, mistakenly registered the first journal entry of judgment. This first journal entry did not create a judgment lien on a 12-acre parcel of land owned by Duggan Homes, Inc. in Clay County because this parcel was not expressly listed in the Exhibit A attached to the first journal entry.
On March 14, 2014, North American Savings Bank, F.S.B. (“NASB”) filed an action against McCorkendale to quiet title to the 12-acre parcel of land in Clay County. NASB argued that McCorkendale's foreign judgment did not create a valid lien on the 12-acre parcel because the wrong Kansas judgment was registered. On January 20, 2015 the Clay County Circuit Court held a bench trial and found in favor of McCorkendale. NASB appealed the decision to the Missouri Court of Appeals.
McCorkendale filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the District of Kansas on March 20, 2015. McCorkendale did not disclose any potential lawsuits in its petition.
On March 8, 2016, the Missouri Court of Appeals reversed the decision of the Clay County Circuit Court and entered judgment in favor of NASB to quiet title to the 12-acre parcel. The Missouri Court of Appeals found that because the first journal entry, and not the second, was registered as a foreign judgment, McCorkendale did not have a lien on the disputed property. In her Adversary Complaint for Professional Negligence, filed April 21, 2017, plaintiff alleges that as a result of defendants' negligence in registering the wrong journal entry of judgment, McCorkendale sustained damages in excess of $75, 000. Plaintiff claims this action arose prior to the Chapter 7 bankruptcy petition and therefore constitutes property of the bankruptcy estate pursuant to 11 U.S.C. § 541.
Dismissal pursuant to Federal Rule of Civil Procedure 12(b)(1) is appropriate when the court lacks subject matter jurisdiction over a claim. Plaintiff claims that subject matter jurisdiction exists and has the burden of establishing it. Port City Props. v. Union Pac. R.R. Co., 518 F.3d 1186, 1189 (10th Cir. 2008). Because federal courts are courts of limited jurisdiction, there is a strong presumption against federal jurisdiction. Sobel v. United States, 571 F.Supp.2d 1222, 1226 (D. Kan. 2008).
Plaintiff claims that she discovered the existence of a professional negligence claim following the filing of McCorkendale's Chapter 7 bankruptcy petition, but that the action arose prior to the filing of the petition. Plaintiff therefore considers this claim property of the bankruptcy estate and maintains this court has jurisdiction over the matter under 28 U.S.C. § 1334(a), 28 U.S.C. § 157, and 11 U.S.C. § 542(b). Plaintiff has not alleged federal question jurisdiction under 28 U.S.C. § 1331 or diversity jurisdiction under 28 U.S.C. § 1332; therefore, if the court finds this action is not the property of the bankruptcy estate, it no longer has subject matter jurisdiction over the case. See In re Gardner, 913 F.2d 1515, 1518 (10th Cir. 1990) (“When property leaves the bankruptcy estate, however, the bankruptcy court's jurisdiction typically lapses . . . .”).
In their motion to dismiss, defendants argue the court lacks subject matter jurisdiction because McCorkendale's professional negligence claim is not property of the bankruptcy estate. Defendants allege that the legal malpractice cause of action did not accrue until after the bankruptcy petition was filed.


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Description: Fifth Division, April 4, 2008 No. 1-06-2837 OMAR AGUIRRE, EDAR ZAVIER DUARTE SANTOS, and ROBERT GAYOL, Plaintiffs-Appellees, v. THE CITY OF CHICAGO, a Municipal Corporation; and CITY OF CHICAGO POLICE OFFICERS ROBERT RODRIGUEZ, CARLOS VELEZ, ALFONSO BAUTISTA, AL PEREZ, PAUL LOPEZ, and MICHAEL CHASEN, Defendants-Appellants. Appeal from the Circuit Court of Cook County Honorable Daniel Locallo, Judge Presiding.
Description: Third Division, September 30, 2008 No. 1-07-2047 WASIM SAM AHMED, as Administrator of the Estate of Gul Nageen Ahmed, Plaintiff-Appellant, v. PICKWICK PLACE OWNERS ASSOCIATION and VISTA PROPERTY MANAGEMENT, INC., Defendants-Appellees. Appeal from the Circuit Court of Cook County. No. 02 L 008938 Honorable Sharon Johnson Coleman, Judge Presiding.
Description: Workers' Compensation Commission Division Filed: March 20, 2007 No. 1-06-1960WC IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT WORKERS' COMPENSATION COMMISSION DIVISION AIRBORNE EXPRESS, INC., Appellant, v. ILLINOIS WORKERS COMPENSATION COMMISSION, et al., (RON BRONKE, Appellee). APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY No. 05 L 50965 HONORABLE SHELDON GARDNER, JUDGE PRESIDING.
Aldroos v. Vance Uniformed Protection Services, Inc.
Description: Fifth Division, October 31, 2008 Nos. 1-06-2009 and 1-06-2126 consolidated MUJTABA AIDROOS; TERRY BRUS, Executor of the Estate of Michael Brus, Deceased; GAIL WEHRHEIM, Special Administrator of the Estate of Robert Wehrheim, Deceased; SHEILA GALE; BRANDON GALE; and DONALD GARCIA, Independent Administrator of the Estate of William Garcia, Deceased. Plaintiffs-Appellants, v. VANCE UNIFORMED PROTECTION SERVICES, INC., and LATESSA DIAMOND, Defendants-Appellees. Appeal from the Circuit Court of Cook County Honorable Lynn M. Egan, Judge Presiding.
Description: No. 2--05--0604 Filed: 3-3-08 In the Appellate Court of Illinois, Second District, ALLEGIS REALTY INVESTORS, ABN AMRO SERVICES COMPANY, PATRIOT AMERICAN, AARON EQUIPMENT COMPANY, AETNA REALTY, B and G REALTY, INC., WILBERT A. EICH, Trustee, NOONEY- KRUMBACH, ILLINOIS TOOL WORKS, INC., INLAND REAL ESTATE, GARY SOLOMON AND COMPANY, and D.R. ZACONNE, Trustee, Plaintiffs-Appellants, v. JOHN LOTUS NOVAK, County Treasurer and ex officio County Collector of Du Page County, Illinois, Defendant (Lisle Township Road District, Intervenor-Appellee). Appeal from the Circuit Court of Du Page County. No. 98--TO--10 Honorable Edward R. Duncan, Jr., Judge, Presiding.

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Evidence, Confrontation Clause: The trial court did not violate defendant’s right of confrontation by admitting into evidence assistant medical examiner’s autopsy report through the testimony of the supervising medical examiner because, even though the person who performed the autopsy was not available for cross-examination, the supervising medical examiner was present during the autopsy and was involved in the post-mortem process. Malaska v. Maryland, No. 2407, Sept. Term, 2012. RecordFax No. 14-0228-03, 28 pages.
Criminal Law, Restitution: The district court did not err in ordering that defendant, who was convicted of bankruptcy fraud and related charges, pay the victim company’s attorneys’ fees incurred in the bankruptcy proceeding as part of the restitution. United States v. Abdelbary, No. 13-4083. RecordFax No. 14-0311-60, 25 pages.
Criminal Procedure, Sentence enhancement under ACCA: In sentencing defendant as an armed career criminal, the district court could rely on an uncertified criminal record check from the National Crime Information Center database, which, in addition to corroboration provided by the government, established the defendant’s 1971 conviction for a violent felony in New York by a preponderance of the evidence. United States v. McDowell, No. 13-4370. RecordFax No. 14-0311-61, 20 pages.
Criminal Procedure, Supervised release: Convicted person’s term of supervised release begins at the end of his imprisonment, and “release from imprisonment” occurs only when a person is freed from confinement, including civil detention. United States v. Neuhauser, No. 13-6186. RecordFax No. 14-0311-62, 15 pages.
Real property, Mineral leases: In a diversity action to be decided under West Virginia law, the 4th Circuit certified the question of whether the proponent, who admittedly did not acquire a property interest in the mineral lease by will or deed, can prove and enforce a working interest in the lease by demonstrating a fractional interest in a “partnership in mining.” Valentine v. Sugar Rock, Inc., No. 12-2273. RecordFax No. 14-0312-60, 16 pages.
Workers’ Compensation, LHWCA fee-shifting provisions: Even if the employer had earlier filed a notice of controversion, its voluntary payment of one week’s compensation as disability benefits for binaural hearing loss, within 30 days of receiving notice of the claim, precluded its liability for attorneys’ fees under the Longshore and Harbor Workers’ Compensation Act’s fee-shifting scheme. Lincoln v. Director, Office of Workers’ Compensation Programs, No. 13-1594. RecordFax No. 14-0311-63, 13 pages.


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NANCY J. KOPPE, UNITED STATES MAGISTRATE JUDGE.
Pending before the Court is the United States' motion for psychiatric treatment. Docket No. 74. The Court has considered the United States' motion, the United States' sealed proposed treatment plan, Defendant's response, and Defendant's sealed psychiatric examination and evaluation. Docket Nos. 74, 75, 83, 84. The United States did not file a reply, and the time to do so has now expired. See Docket. The Court finds the motion properly resolved without a hearing.
On November 30, 2016, a federal grand jury sitting in Las Vegas, Nevada, issued an indictment charging Defendant Mirko Zeppellini with four counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and three counts of money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i) and 2. Docket No. 1. Defendant was arrested on December 8, 2016, and made his initial appearance on the same date. Docket Nos. 5, 12. After a detention hearing, Defendant was ordered detained pending trial. Docket Nos. 5, 11.
On February 17, 2017, after a hearing with Defendant and his then-counsel, the Court found that it had reasonable cause to believe Defendant may be suffering from a mental disease or defect that rendered unable to understand the nature of the proceedings against him or properly assist his defense. The Court therefore ordered a mental competency evaluation of Defendant. See Docket No. 23. On May 8, 2017, after receiving the forensic evaluation of Defendant, the Court found Defendant currently incompetent to stand trial and ordered him placed in a facility for competency restoration. Docket Nos. 43, 46.
On November 27, 2017, the Court held a status conference regarding Defendant's competency. Docket No. 64. See also Docket No. 65. The United States submitted that, based on Defendant's failure to obtain competency, it would ask for involuntary medication to restore his competency. Docket No. 64. The United States has now moved the Court to order involuntary medication with antipsychotics under Sell v. United States, 539 U.S. 166 (2003).
A criminal defendant “has a ‘significant' constitutionally protected ‘liberty interest' in ‘avoiding the unwanted administration of antipsychotic drugs.'” Sell, 539 U.S. at 178 (quoting Harper, 494 U.S. at 221). Antipsychotic medications affect cognition, concentration, behavior, and demeanor, and cause a personality change that, “if unwanted, interferes with a person's self-autonomy, and can impair his or her ability to function in particular contexts.” United States v. Williams, 356 F.3d 1045, 1054 (9th Cir. 2004). Additionally, these drugs “can have serious, even fatal, side effects.” Id. (quoting Harper, 494 U.S. at 229-230).
“The government is allowed to medicate a defendant involuntarily for the purpose of rendering him competent to stand trial only in rare circumstances.” United States v. Ruix-Gaxiola, 623 F.3d 684, 687 (9th Cir. 2010). “When the government seeks to medicate a defendant involuntarily for competency purposes, it must establish by clear and convincing evidence the four Sell factors.” United States v. Gillenwater, 749 F.3d 1094, 1100 (9th Cir. 2014). Those factors are: (1) “that important governmental interests are at stake[;]” (2) “that involuntary medication will significantly further” those interests; (3) “that involuntary medication is necessary to further those interests[;]” and (4) “that administration of the drugs is medically appropriate.” Sell, 539 U.S. at 180-81. The Sell factors “do not represent a balancing test, but a set of independent requirements, each of which must be found to be true before the forcible administration of psychotropic drugs may be considered constitutionally permissible.” Ruiz-Gaxiola, 623 F.3d 684 at 691.
“Orders authorizing involuntary medication pursuant to this standard are ‘disfavored.'” Id. at 688 (quoting United States v. Rivera-Guerrero, 426 F.3d 1130, 1137 (9th Cir. 2005)). The Court has “refus[ed] to permit involuntary medication except in highly-specific factual and medical circumstances.” Ruiz-Gaxiola, 623 F.3d at 691 (quoting Rivera-Guerrero, 426 F.3d at 1136).
The Court therefore analyzes each Sell factor in turn.
The first factor of the Sell test requires the United States to establish “that important governmental interests are at stake.” Sell, 539 U.S. at 180. The government has an important “interest in bringing to trial an individual accused of a serious crime.” Id. “That is so whether the offense is a serious crime against the person or a serious crime against property.” Id. To determine whether a crime is serious enough to satisfy the first Sell factor, “the U.S. Sentencing Guidelines range is ‘the appropriate starting point' because it is the ‘best available predictor of the length of a defendant's incarceration.'” United States v. Onuoha, 820 F.3d 1049, 1044-1055 (9th Cir. 2016) (quoting United States v. Hernandez-Vasquez, 513 F.3d 908, 919 (9th Cir. 2007).

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Defendants in prescription medical product liability litigation are at an inherent disadvantage in discovery already. Our clients have lots and lots of electronically stored information and old-fashioned paper documents. Plaintiffs . . . not so much. With our opponents having many categories of information to choose from, we think that it’s not that much to ask the other side at least to provide a reasonably detailed, case-specific set of document requests – and in many cases that’s what happens. But all too often, the same kind of sloth that leads to plaintiffs’ parking their cases by the thousands in MDLs to avoid having to do any work also shows through in discovery.
Hence, we have to deal with “cloned discovery.” We agree with the court in Barrella v. Village of Freeport, 2012 WL 6103222, at *2 (E.D.N.Y. Dec. 8, 2012), which, when faced with the plaintiff’s demand for “all deposition transcripts and discovery produced” in prior litigation, retorted that the plaintiff “can and should conduct his own discovery” and that the federal rules “do not permit a party to obtain discovery obtained in a separate lawsuit . . . simply because that party maybe does not wish to spend his own time or money.” Id. at *2.
If you’ve never heard of the term “cloned discovery” before, “[t]he name derives from the fact that the plaintiffs are attempting to clone the discovery taken by others in unrelated cases.” Wollam v. Wright Medical Group, Inc., 2011 WL 1899774, at *1 (Mag. D. Colo. May 18, 2011).
Id. (citation to plaintiff’s discovery requests omitted). Not only is this kind of discovery request lazy as sin (and often an attempt to avoid limits on the number of requests for production), but it’s inherently improper, particularly after the 2014 amendments to Rule 26(b)(1), which redefined the scope of discovery to include only: “any nonprivileged matter that is relevant to any party’s claim or defense.” By definition, “all” of the discovery from a prior case is not going to be “relevant” to a subsequent personal injury case involving different plaintiff injured at a different time and place.
[A] party seeking discovery ordinarily must do their own work and request the information they seek directly and must make proper requests describing the information in which they are interested. Direct requests allow a court to consider the relevance of the information sought to the specific claims and defenses in the pending case. A request for all discovery in unidentified actions taken worldwide with the single similarity that those actions involve the alleged failure of [the same product] does not allow such review. Discovery is intended to be liberal, but it is not unbounded. The sweeping cloned discovery sought by the plaintiffs has not been shown to be sufficiently relevant to the claims and defenses in this case and simply reaches too far. . . . It is not clear to me that any showing would be sufficient to justify an order requiring the disclosure of all discovery made or received by the . . . defendants in unknown and unspecified cases.
Id. at *2. See Fields v. Wright Medical Technology, Inc., 2017 WL 3048867, at *3 (N.D. Ind. July 19, 2017) (“to the extent that Plaintiff is requesting that the Court compel Defendants to produce information merely because it has been produced in other cases, and she has not specifically requested the information contained in those documents in this case, that request is denied”).
Cloned discovery has attracted our attention because it reared its ugly head again recently in Costa v. Wright Medical Technology, Inc., 2019 WL 108884 (D. Mass. Jan. 4, 2019), where the plaintiff actually got some benefit from this kind of slothful request. Costa viewed “cloned discovery” as “attractive to litigants because it can reduce the burden and expense of obtaining relevant information and help the parties narrow the issues in dispute.” Id. at *1. While Costa rejected the plaintiff’s request for “all documents and data” from cases involving “distinct” products and from cases that “do not involve” that particular plaintiff’s claimed failure mode, id. at *2, it did compel production of discovery from a prior case involving the same product and claimed failure mode. Id. We wouldn’t even go that far – for the same reasons that prescription medical product liability litigation is never appropriate for class actions. Even if the device and failure mode are the same, every product liability plaintiff has a unique injury, at a different point in time, involving different medical treatment, medical history, and treating physicians. It may well be that a great majority of the documents are in fact discoverable in the subsequent case, but that does not excuse a plaintiff from following the rules and asking for them properly, and complying with applicable numerical limits on document requests.
“Cloned discovery”, requesting all documents produced or received during other litigation or investigations, is irrelevant and immaterial unless the fact that particular documents were produced or received by a party is relevant to the subject matter of the instant case. . . . [P]laintiffs are interested in the content of documents and for that they must make proper requests describing the information in which they are interested. The plaintiffs’ counsel must do their own work and request the information they seek directly.
Id. at *1. Similarly, in Drake v. Allergan, Inc., 2014 WL 12664971 (D. Vt. March 19, 2014), cloned discovery “which permits plaintiffs to obtain all of the materials furnished in the Department of Justice investigation” was denied because it “may result in surrender of documents that are totally irrelevant to the pending litigation.” Id. at at *3. “Generally, courts discourage the use of criminal discovery requests as providing the framework for civil discovery demands in unrelated litigation due to the requirement that plaintiffs make specific requests for discovery related to their individual claims.” Id. “The better approach to discovery here is to require Plaintiffs to make individualized demands based upon what may be relevant documents.” Id. Accord Pensacola Firefighters’ Relief Pension Fund v. Merrill Lynch Pierce Fenner & Smith, Inc., 265 F.R.D. 589, 597 (Mag. N.D. Fla. 2010) (“production of all of the documents produced to the SEC, without a more particularized request, could potentially allow plaintiff to bypass the limitations on the scope of discovery established by the Rules”); In re WorldCom, Inc. Securities Litigation, 2003 WL 22953645, at *7 (S.D.N.Y. Dec. 16, 2003) (“[w]hile the record generated by the Government’s work may ease the burdens of the civil litigation, the civil litigants enjoy those benefits as a matter of convenience, not as of right”); In re Milk Products Antitrust Litigation, 84 F. Supp.2d 1016, 1026 (D. Minn. 1996) (denying cloned discovery seeking documents “already compiled by Defendants in response to subpoenas from the Antitrust Division of the United States Department of Justice”); Cook v. Rockwell International Corp., 147 F.R.D. 237, 245-46 (D. Colo. 1993) (denying plaintiffs’ attempt “to piggyback on the very same discovery the grand jury conducted” in a prior criminal proceeding; “[w]hile materials relevant to Plaintiffs’ case may overlap with those subpoenaed in [the criminal case], Plaintiffs must obtain those documents because they are relevant to the claims in this case, not simply because they were provided to the grand jury in its criminal investigation”).
Concerning prior civil litigation, King County v. Merrill Lynch & Co., 2011 WL 34384913 (W.D. Wash. Aug. 5, 2011), relied on both Wollam and Midwest Gas, and explained that cloned discovery was improper because “without more, the Court cannot ascertain whether the documents requested actually relate to Plaintiffs’ claims and defenses” in the current case. Id. at *3. Even if “some portion of documents encompassed by Plaintiffs’ request may be relevant, the Court has no method of determining which of those documents are relevant, and which are not.” Id. Heck, even if “each and every document” were discoverable, “Plaintiff must make proper discovery requests, identifying the specific categories of documents sought, in order to obtain them − and each category must be relevant to its claims and defenses.’” Id.
Whether pleadings in one suit are “reasonably calculated” to lead to admissible evidence in another suit is far from clear. In the Court’s view, discovery of this type of information typically will not lead to admissible evidence. . . . To date, there has been no inquiry into how let alone a showing that the pleadings sought by plaintiff are related to any of the issues raised in the instant case. Given that fact, and given also the unlikelihood that an adequate proffer could be made, the Court must conclude that the items sought are not “reasonably calculated” to lead to the discovery of admissible evidence.
Other cases denying cloned discovery requests are: In re Volkswagen “Clean Diesel” Marketing, Sales Practices, & Products Liability Litigation, 2017 WL 4680242, at *2 (Mag. N.D. Cal. Oct. 18, 2017) (“Plaintiffs are not entitled to complete access to the MDL Production simply because there may be an overlap between their claims and those [here]. They instead must serve requests for production on [defendant] in accordance with the Federal Rules.”); Z Best Body & Paint Shops, Inc. v. Sherwin-Williams Co., 2017 WL 3730515, at *3 (Mag. C.D. Cal. Aug. 29, 2017) (“the broad request for all ‘record and documents’ produced by Defendant in [prior litigation] appears to be overbroad on its face”); Strickland v. Tristar Products, Inc., 2017 WL 2874621, at *1 (Mag. S.D. Ga. July 5, 2017) (“Plaintiffs are not entitled to ‘all documents’ and ‘all depositions’ in the 10 identified cases, regardless of the pertinence of those materials to the instant case. They simply must identify the materials more specifically than ‘all.’”); Racing Optics v. Aevoe Corp., 2016 WL 4059358, at *1-2 (D. Nev. July 28, 2016) (“’Piggyback’ discovery requests are prohibited. . . . [plaintiff] need[s] to specify which documents it want[s] and to demonstrate its relevance”), reconsideration denied, 2016 WL 4994961 (D. Nev. Sept. 16, 2016); Caves v. Beechcraft Corp., 2016 WL 355491, at *2 (Mag. N.D. Okla. Jan. 29, 2016) (cloned discovery seeking “any and all testimony concerning any other litigation, regardless of connection to the accident or [product] at issue, is clearly objectionable”); Town of Westport v. Monsanto Co., 2015 WL 13685105, at *3 (Mag. D. Mass. Nov. 5, 2015) (cloned discovery “requests for all discovery and deposition testimony from all [prior] litigation [involving the same chemical] is overly broad”); Capital Ventures International v. J.P. Morgan Mortgage Acquisition Corp., 2014 WL 1431124, at *1-2 (D. Mass. Apr. 14, 2014) (“plaintiff indiscriminately pursues wholesale production of all testimonial materials from all employees in all [prior] cases or investigations”; “This request for ‘cloned discovery’ is, like the request for testimonial materials, overbroad and of speculative relevance.”); Burke v. Ability Insurance Co., 291 F.R.D. 343, 355 (D.S.D. 2013) (“The court will not compel defendants to produce all documents from prior litigation when [plaintiff] has not established how they will be relevant or what that prior discovery contains”); Wiand v. Wells Fargo Bank, N.A., 2013 WL 6170610, at *3 (Mag. M.D. Fla. Nov. 22, 2013) (cloned discovery held “overbroad on its face for failing to specify any subject matter of the sought-after documents. By asking for ‘all documents produced . . .’ in the other litigation, the scope of the request is far too expansive.”); In re Cathode Ray Tube (CRT) Antitrust Litigation, 2013 WL 183944, at *1-4 (N.D. Cal. Jan. 17, 2013) (rejecting overseas litigant’s cloned subpoena to “produce all discovery related to the [prior] action” under similar analysis); Pegoraro v. Marrero, 281 F.R.D. 122, 132 (S.D.N.Y. 2012) (cloned discovery denied as “overly broad in its scope because it seeks all documents in connection with any [similar] litigation or proceeding involving the defendants, regardless of the specific nature of the proceeding and factual circumstances underlying those proceedings”); N.J. Carpenters Health Fund. v. DLJ Mortgage Capital, Inc., 2012 WL 13135408, at *1, slip op. (S.D.N.Y. March 2, 2012) (rejecting “monkey see/monkey do” discovery; plaintiffs’ “request that says ‘you gave some documents to the government concerning another investigation, so give them to me’ is DENIED”); Bean v. John Wiley & Sons, Inc., 2012 WL 129809, at *2 (D. Ariz. Jan. 17, 2012) (cloned discovery concerning “similar” but “different” prior litigation denied); Eisai Inc. v. Sanofi-Aventis U.S., LLC, 2011 WL 5416334, at *8 (Mag. D.N.J. Nov. 7, 2011); (cloned discovery held “irrelevant, unlikely to lead to the discovery of admissible evidence in this matter, and that production of same would unduly burden Defendants”); Chen v. Ampco System Parking, 2009 WL 2496729, at *2-3 (Mag. S.D. Cal. Aug. 14, 2009) (“similarities between the [prior] cases and this case . . . are not enough to require a carte blanche production of all documents from the state cases”; “Plaintiff must specifically ask for the documents he wants and be able to demonstrate that the information he seeks is relevant to his claims in this case”) (emphasis original); American Eagle Outfitters, Inc. v. Payless Shoesource, Inc., 2009 WL 152712, at *1 (Mag. E.D.N.Y. Jan. 21, 2009) (cloned discovery “seek[ing] broad categories of documents relating to every litigation in which the defendant has ever been involved where [similar] violations have been alleged” denied as “considerably overbroad”); Moore v. Morgan Stanley & Co., 2008 WL 4681942, at *5 (Mag. N.D. Ill. May 30, 2008) (“just because the information was produced in another lawsuit . . . does not mean that it should be produced in this lawsuit”); Kormos v. Sportsstuff, Inc., 2007 WL 2571969, at *3 (Mag. E.D. Mich. Sept. 4, 2007) (plaintiff’s cloned discovery demanding “copies of any and all other legal complaints filed by other plaintiffs against Defendant” held “as overly broad, unduly burdensome and not reasonably calculated to lead to the discovery of admissible evidence”); Wyeth v. Impax Laboratories, Inc., 248 F.R.D. 169, 171 (D. Del. 2006) (a “request for all documents from the [prior] Litigation is overly broad. The Court finds that [requestor] has not demonstrated why it is entitled to documents from the [prior] involving matters not at issue in this litigation”); Oklahoma v. Tyson Foods, Inc., 2006 WL 2862216, at *2 (Mag. N.D. Okla. Oct. 4, 2006) (“Plaintiffs appear to equate ‘similarity to a prior lawsuit’ to relevant to a claim or defense in the current proceeding. The Court cannot accept that this conclusion is automatic.”).
It’s bad enough for our clients to be subjected to asymmetrical discovery over and over again. It would be worse to allow plaintiffs to recreate that asymmetry in any case they choose, merely by demanding all the discovery that took place previously in other cases. Cloned discovery is an abusive practice that always should be resisted.

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Tag Archive | "Roger Perlstadt"
eHOME CREDIT CORP., a New York corporation; SAXON MORTGAGE SERVICES INC., Defendants.
This matter comes before the Court on plaintiff Ingrid Berg’s Motion to Dismiss defendant Saxon Mortgage Services Inc.’s Counterclaim pursuant to Rule 12(b)(1) for lack of standing  . For the reasons that follow, the motion is denied.
Plaintiff and her husband, Stanley Berg, purchased a property in Highland Park, Illinois, in 2001. The Bergs financed the purchase of the property with a mortgage originally held by eHome Credit Corporation (“eHome Mortgage”). In 2005, Stanley Berg filed for bankruptcy. Ingrid Berg did not file for bankruptcy. The bankruptcy court ruled that the trustee of Stanley Berg’s bankruptcy estate could avoid the eHome Mortgage as to Stanley Berg’s half-interest in the property, but it had no jurisdiction over the half-interest owned by Ingrid Berg. The bankruptcy court further ruled that the trustee could sell the property and Ingrid Berg’s share of the proceeds would be subject to valid liens, and that the trustee could deposit the proceeds with a neutral custodian during the adjudication of any liens.
Ingrid Berg filed this lawsuit seeking a declaratory judgment that her interest in the property is not encumbered by the eHome Mortgage. Defendant eHome Credit Corp. has not filed an appearance in this action. Saxon Mortgage Services, Inc. (“Saxon”), who asserts that it is the servicer of the eHome Mortgage for FV-1, Inc. (“FV-1”), was granted leave to intervene as a defendant. FV-1 purports to be the current holder of the eHome Mortgage and note. Saxon filed an answer and counterclaim seeking a declaratory judgment that the eHome Mortgage is the senior lien on the proceeds from the sale of Ingrid Berg’s half-interest in the property.
The present challenge relates to standing and this Court’s jurisdiction over the matter. The requirements of standing are: (1) an injury in fact; (2) causation; and (3) redressibility. See, e.g., RK Co. v. See, 622 F. 3d 846, 851 (7th Cir. 2010). When deciding a motion to dismiss the Court accepts well-pleaded allegations of the complaint as true, (Tamayo v. Blagojevich, 526 F. 3d 1074, 1081 (7th Cir. 2008)), and draws all reasonable inferences in favor of the nonmoving party. Pisciotta v. Old Nat. Bancorp, 499 F.3d 629, 633 (7th Cir. 2007). On Rule 12(b)(1) motions, the court may consider material outside the pleadings. See United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003).
Plaintiff moves to dismiss defendant Saxon’s counterclaim, asserting that Saxon has no standing to assert the counterclaim because only the entity entitled to enforce the note may bring a complaint to foreclose the mortgage against the mortgagor. See Bayview Loan Servicing v. Nelson, 382 Ill. App. 3d 1184, 1187-88 (2008). Saxon responds that it is an entity entitled to enforce the note because FV-1 is the holder of the note and the mortgage and FV-1 authorized Saxon, as its servicer, to enforce the note on its behalf.
Here, it is undisputed that the eHome mortgage and note were transferred once by an allonge to Option One Mortgage Corporation (“Option One”) on July 16, 2004. Saxon further asserts that Option One then indorsed the note in blank by an allonge, and that FV-1 is in possession of the original mortgage and note with the allonge indorsed in blank.
Saxon attached as exhibits to its response, the original note (Exhibit A, Dkt. # 53-1), the allonge to the promissory note indorsing the note to Option One on July 16, 2004 (Exhibit B, Dkt. # 53-2), the allonge to the note indorsed in blank by Option One (Exhibit C, Dkt. # 53-3 ), a declaration under penalty of perjury signed by Roger Perlstadt, attorney for Saxon, averring that Saxon has provided the law firm with the original note and indorsements relating to the loan secured by the mortgage on the property at 2205 Kipling Lane in Highland Park, Illinois (Exhibit D, Dkt. # 53-4), and the “Limited Power of Attorney” authorizing Saxon to enforce any of the mortgages/notes that it services on behalf of FV-1 (Exhibit E, Dkt. # 53-5).
Under Illinois law, when an instrument is indorsed in blank it becomes payable to the bearer. 810 ILCS 5/3-205(b) (West 2010). The person in possession of an instrument payable to the bearer is the “holder” of that instrument, 810 ILCS 5/1-201(b)(21)(A) (West 2010), and the “holder”of an instrument is entitled to enforce it. 810 ILCS 5/3-301 (West 2010). Here, the counterclaim alleges that FV-1 is the current holder of the note secured by the eHome Mortgage, and that Saxon has the authority to enforce the note on FV-1’s behalf. It alleges that FV-1 obtained the note through various transfers or assignments. The documents attached as exhibits support Saxon’s assertions that FV-1 is the holder of the note and that Saxon has the authority to act on FV-1’s behalf to enforce the note. Proof of possession is essential for standing to enforce payment on an instrument. Locks v. North Towne Nat’l Bank, 115 Ill. App. 3d 729, 71 Ill. Dec. 531, 451 N.E.2d 19 (2 Dist. 1983). It is undisputed that the note in Saxon’s possession that it presented to the Court is the original. At issue here is the validity of the allonges purporting to indorse the note from eHome Credit Corp to Option One and from Option One to blank payable to bearer.
Plaintiff argues that the allonge presented by Saxon, purporting to be the allonge transferring the note from eHome Credit Corp to Option One is a different allonge than the one presented by eHome in the bankruptcy proceedings. Indeed, the allonge that plaintiff attached to her motion to dismiss that purports to transfer the note from eHome Credit Corp to Option One (Exhibit F, Dkt. # 46-7) appears to be different from the one presented by Saxon. The Court directed Saxon to produce for the Court the original note and the allonges purporting to transfer the note; first from eHome Credit Corp. to Option One and then from Option One to blank. Saxon could provide no explanation for the two different allonges indorsing the note from eHome Credit Corp to Option One. Despite a difference in appearance, the two allonges purport to make the same indorsement and transfer.
Plaintiff further asserts that this Court should adopt a rule that an allonge is not an effective means of indorsement unless there is no space on the note itself to write the indorsement. Plaintiff relies on Brown [Fountain] v. Bookstaver, 141 Ill. 461 (1892), in which the Illinois Supreme Court stated: “Generally, an assignment of a negotiable instrument must be indorsed on the instrument, viz., written on the back of it, that being the meaning of the word >indorsement.’ If, however, by reason of the number of indorsements, the back of the instrument is so covered as to make it necessary, `an extra piece of paper may be tacked or pasted on the instrument, and all future indorsements may be written on the attached paper.” Id. at 465.


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This data protection policy informs you about the nature, the scope and the purpose of the processing of personal data (hereinafter ‘data’) within our online website (hereinafter ‘website’). With regard to used definitions like e.g. ‘personal data’ or ‘processing’ we refer to the definitions within Art. 4 of the general data protection regulation (DSGVO).
We do not process any data that belong to special categories of personal data.
Visitors and users of our website.
According to Art. 13 DSGVO we inform you about the legal basis of our data processing. As far as no legal basis is mentioned in our data protection policy, the following applies: legal basis for the obtaining of consent to the processing is Art. 6 Abs. 1 lit. a and Art. 7 DSGVO, legal basis for the processing in order to perform our services or for the performance of a contract as well as the processing of requests is Art. 6 Abs. 1 lit. b DSGVO, the legal basis for the processing in order to comply with our legal obligations is Art. 6 Abs. 1 lit. c DSGVO and the legal basis for the processing for the purposes of our legitimate interests is Art. 6 Abs. 1 lit. f DSGVO. If processing is necessary in order to protect the vital interests of the data subject or of another natural person, the legal basis is Art. 6 Abs. 1 lit. d DSGVO.
We ask you to inform yourself on a regular base about the content of our data protection policy. We will adapt our policy as soon as this is required by changes within our data processing procedures. We will inform you if such changes will require your participation (e.g. consent) or another kind of individual notification.
According to Art. 32 DSGVO we implement appropriate technical and organisational measures to ensure a level of security appropriate to the risk, taking into account the state of the art, the costs of implementation and the nature, scope, context and purposes of processing as well as the risk of varying likelihood and severity for the rights and freedoms of natural persons. These measures include the ability to ensure the confidentiality, integrity and availability of data via control of physical access as well as processing, transmission and separation. In addition we implement procedures to guarantee the rights of data subjects, the erasure of data and response reactions to possible data risks. We consider data protection as key figure during development, selection of hard- and software as well as the implementation of data protection by design and by default (Art. 25 DSGVO).
No processors and/or third parties are engaged.
No personal data is transferred to third countries.
6.1. You have the right to obtain from the controller confirmation as to whether or not personal data concerning you are being processed and where that is the case, access to the personal data and additional information according to Art. 15 DSGVO.
6.2. According to Art. 16 DSGVO you have the right to obtain from the controller the rectification of inaccurate personal data or the completion of incomplete personal data.
6.3. According to Art. 17 DSGVO you have the right to obtain from the controller the erasure of personal data concerning you without undue delay or alternatively you have the right according to Art. 18 DSGVO to obtain from the controller restriction of processing.
6.4. You have the right to receive your personal data you provided to us according to Art. 20 DSGVO and to transmit those data to another controller.
You have the right to withdraw your consent according to Art. 7 Abs. 3 DSGVO, the withdrawal will not affect the lawfulness of processing based on consent before this withdrawal.
You have the right to object to future processing of personal data according to Art. 21 DSGVO at any time. Where personal data are processed for direct marketing purposes, you have the right to object to processing of personal data at any time.
No cookies are used on our website.
10.1. According to Art. 17 and 18 DSGVO personal data are either erased or the processing is restricted. If not mentioned in this data protection policy, personal data that are not longer necessary in relation to the purposes for which they were collected are erased as long as there are no legal obligations which require further processing. If personal data can't be erased because of legal obligations, the processing of this personal data is restricted. In this case the personal data will be locked and there will be no processing for other purposes. This is true for e.g. data that has to be stored because of commercial law or tax law reasons.
10.2. By law a 6 year storing period is required according to § 257 Abs. 1 HGB (books of account, fixtures, opening balances, annual statements, business letters, accounting records, etc.) and a 10 year storing period is required according to § 147 Abs. 1 AO (books, records, reports, accounting records, business letters, tax relevant documents, etc.).
11.1. On our website we don't collect data for the purpose of performing a contract.
11.2. We process subscriber data (e.g. name and address as well as contact data of users), contract data (e.g. services used, names of contact persons, billing information) for the performance of our contractual obligations and services according to Art. 6 Abs. 1 lit b. DSGVO.
11.3. Your data will be deleted after the termination of legal warranty deeds and comparable obligations, the necessity for ongoing storage is checked every 3 years; in case of legal obligations to retain data this data is erased at the end of this period (6 years relating to commercial law and 10 years relating to tax law); data in the sales account is stored until the sales account is erased.
12.1. If you contact us (via email), your information will be processed in order to reply to your request according to Art. 6 Abs. 1 lit. b. DSGVO.
12.2. Your information might be stored in our customer relationship management system (‘CRM system’) or a comparable request organisation system.
12.3. We erase your request unless it is needed for further purposes. The necessity for ongoing storage is checked every two years. Requests from customers with a valid sales account are stored permanently, according to our sales account specifications. In case of legal obligations to retain data this data is erased at the end of this period (6 years relating to commercial law and 10 years relating to tax law).
13.1. Basing on our legitimate interest according to Art. 6. Abs. 1 lit. f. DSGVO we collect and store information about every server access to our website (so-called server log files). These are name of the requested web page, filename, date and time of the request, transferred data size, message about successful request, browser type and version, operating system used, referrer URL (previously visited page), IP address and the requesting provider.
13.2. Log file data is stored for security reasons (e.g. for the clarification of misuse and fraud) for a duration of at most 90 days and erased afterwards. Data necessary for the purpose of later evidence will not be erased before the final clarification of the respective incident.

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