LEGAL LIMITS TO

COMMUNICATION

COMMON LAW FRAUD

CunningDeceptionArtificeCheatCircumventBreach of TrustBreach of

ConfidenceUndue

Advantage

False Material Representation

Known to be False or Asserted Without Knowledge of the Truth

Intended to be Acted Upon

Relied Upon Caused Injury

STATUTORY FRAUD Similar to common law fraud False representation of a

past or existing material fact Made to induce person to

enter into a contract Relied upon by person in

entering into contract; orMaterial false promise to do an actMade with intention of not fulfilling itMade to induce person to enter into a contractRelied upon person in entering into contract

ACTUAL DAMAGES

If court/jury finds that person acted with “actual awareness” of falsity (inferred where objective manifestations indicate that the person acted with actual awareness), it may award exemplary damages.

NEGLIGENT MISREPRESENTATION Representation made by party

in a transaction in which he/she has a pecuniary interest

Party provides “false information” for the guidance of others in their business

Party did not exercise reasonable care or competence in obtaining or communicating the information

Recipient suffered a pecuniary loss by justifiably relying on such information

TEXAS DECEPTIVE TRADE PRACTICES ACT

Purpose: to protect consumers against false, misleading and deceptive business practices, unconscionable acts, and breaches of warranty

~Very few defenses

~Applies to the sale and lease of personal and real property

~Victim does not have to rely on representation

LAUNDRY LIST ITEMS (SUMMARY)Passing off goods or services as those of another

Causing confusion or misunderstanding Misrepresenting attributes of goods or servicesMisrepresenting agreements and legal rights Misrepresenting authority

ButMere puffing is not actionable

Personal beliefInformation generally known to listenerListener would not expect speaker to have superior knowledge

NONDISCLOSUREFailure to disclose

information concerning goods or services which was known at time of transaction if such failure to disclose was intended to induce consumer into transaction which consumer would not have entered had the information been disclosed

REMEDIESActual damagesLost profitsLoss of useExpensesThree times actual

damagesAttorney fees Injunctions

DEFAMATION Injury to reputation Whether a person of

ordinary intelligence would perceive entire statement to affect reputation, in light of surrounding circumstances

Question of law for court unless statement is of ambiguous or doubtful meaning

Ambiguous language may be defamatory

Not all falsehoods are defamatory

ELEMENTS OF DEFAMATION

False and defamatory statement

Published to third party

Publication results from intentional or negligent conduct

LIBEL/SLANDER/BUSINESS DISPARAGEMENT

Libel – WrittenSlander – OralBusiness

Disparagement - Defames business reputation. Must have element of malice

PER SE DEFAMATION Attribution of criminal

activity Attribution of moral

turpitude or dishonesty

Attribution of business dishonesty

Attribution of loathsome disease

Attribution of racism Attribution of

bankruptcy or financial impropriety

APPLICATION OF PER SE DOCTRINE

Slander – rigorously applied

Libel – not as important because libel is controlled by statute

Business Disparagement – no per se violation

COMMUNICATION AND LITIGATION

What is discoverable?Generally, any

unprivileged information that is relevant to subject matter of lawsuit

Includes witness or party statements whether or not prepared in anticipation of litigation

Includes electronic communications

More fact than opinion

Watch out for admissions

Carefully word critical self analysis

Limit circulationLimit drafts

MEMORANDUM AND REPORT WRITING

*Remember: Anything you write may be discoverable

Exempts certain communications from disclosure in lawsuit

Allows for freer communication between clients and attorneys

Attorney/client privilege and work product of a party are interwoven

PRIVILEGES AND WORK PRODUCT

ATTORNEY/CLIENT PRIVILEGEPersons covered:AttorneyAttorney’s

representativesClientClient’s representatives, which include:

Persons having the authority to obtain legal services or to act on legal advice on behalf of clientAny other person who, for purposes of effectuating legal representation for client, makes or receives a confidential communication while acting in the scope of employment for the client

COMMUNICATIONS PROTECTED

Attorney/Client communication

Confidential communication

For legal assistance

Privilege lasts as long as client wants to assert it. It does not end with representation.

PARTY WORK PRODUCT Used to be “attorney” work

product Expanded to include certain

work product of parties Work product of a party or its

representatives – including the party’s attorneys, consultants, sureties, indemnities, insurers, employees or agents – exempt from discovery

Applies to materials prepared, mental impressions developed, or communications made in anticipation of litigation or for trial

Purpose is to allow the attorney to properly prepare for trial

ANTICIPATION OF LITIGATIONAfter the occurrence

or transaction upon which suit is based

Reasonable person would have anticipated the litigation

Party believed in good faith there was a substantial chance litigation would followNote: The materials must

also have been prepared for a party or its attorney in the suit for which the privilege was asserted.

CORE WORK PRODUCTWork product of an attorney or attorney’s

representative – not discoverable

NON-CORE WORK PRODUCTDoes not reflect attorney’s thought processes. Can be discovered if other side proves “need and hardship”

PRIVILEGE DOES NOT EXEMPTWitness informationPhotographsWitness statements

DOCUMENT AND EVIDENCE RETENTION

Retention/destruction policy

Electronic “documents” included

Spoliation

RETENTION/DESTRUCTION POLICY:Written

Coincides with state and federal mandates

Enforced uniformallyReviewed and updated

periodicallyAddresses electronic

mediaWill partially shield

company from allegation of destroying relevant evidence

WHEN YOU GET NOTICE OF A CLAIM:

Stop rotation of backup media

Preserve all existing backup Stop decompression,

defragmention, etc. Make sector by sector

copies of relevant hard drives

Download all electronic logs, usage, records, audit trails, activity logs to storage device

Preserve hardware that might contain data

Locate all computers that may have relevant data

SPOLIATION Not what happens to

your food When a party has

possession of a piece of evidence at a time he knows or should have known it will be evidence in a controversy, and he thereafter disposes of it, makes it unavailable, or fails to produce it, he is guilty of spoliation

Courts will take measures to make sure a litigant’s rights are not impaired by the spoliation

May give jury charge that explains what spoliation is and that there is a a presumption that the evidence, had it been produced would have been unfavorable to the party who did not produce

Court may also tell the jury that if they find that the party had possession of evidence at the time of the occurrence that it knew or should have known it would be evidence, then the jury may presume it would have been unfavorable to the party who did not produce it

Court can also enter “death penalty sanctions,” deny admission of evidence and other penalties

WHAT TO DO

When something happens that leads you to believe that a claim may arise, do not destroy the evidence, regardless of your document retention policy