When an Attorney Signs a Settlement Agreement “Approved as to Form and Content”

July 13, 2019

The California Supreme Court ruled yesterday that an attorney may be personally liable for breaching a settlement agreement that he has signed under the designation “Approved as to form and content.”

Normally, this designation is a term of legal art, meaning only that the attorney has read the agreement, that it embodies the parties’ understanding, and that he sees no impediment to signing the agreement. However, if the settlement agreement imposes obligations on the attorney expressly, the signature might also mean that the attorney has agreed to be personally bound by those terms.

In Monster Energy Co. v. Schechter, a settlement agreement expressly obligated the parties and their attorneys to keep the terms of the settlement confidential.  Sometime after settlement, plaintiff’s counsel reported the settlement to a trade publication, stating that he had reached a “substantial” settlement with Monster Energy, but that Monster Energy would not permit the disclosure of the specific amount.

Monster Energy sued the attorney, and the attorney moved to strike under the Anti-SLAPP law on the ground that he was not personally bound by the settlement agreement.  The California Supreme Court denied the motion.  It held that in light of (1) the express obligations imposed on the attorney and (2) the attorney’s acknowledgment that he had read and approved the agreement, a factfinder could reach the conclusion that the attorney intended to be bound by the agreement.

One factor that may have influenced the Court’s decision was the strong public policy in favor of settlements and the role that strict confidentiality has in promoting settlement.

It should also be noted that the Court’s ruling held only that “Approved as to form and content” does not, as a matter of law, mean that the attorney is NOT a party to the agreement in the procedural posture of an anti-SLAPP motion.  At least one case, cite by the Court, has previously held that the same language does not, as a matter of law, mean that the attorney IS a party to the agreement in the context of a motion for summary judgment.  In both cases, the Court held that the factfinder must decide the attorneys intent based on the totality of the circumstances.


Cross Subpoenas in Federal Court

Opposing counsel has just served a Rule 45 deposition subpoena on a third party witness.  Should you also serve a subpoena?  What if you want to depose her for several hours, but you are not sure if opposing counsel will finish with enough time for your examination under the seven hour limit?  What if you want to ask the witness about matters that have nothing to do with noticing counsel’s examination?

Luckily there is no need to serve a cross-subpoena. Rule 30 governs depositions for parties and non-parties.  Rule 30 allows cross examination at depositions as if it were at trial; and courts interpreting this provision (in light of the broad scope of discovery) hold that a party may ask questions outside the scope of direct examination even if they did not notice the deposition.

However, the 1 deposition/7-hour time limit is fixed, unless there is a party stipulation or court order.  If opposing counsel will not stipulate, you will have to move the Court for leave.

While not required, you may want to serve subpoenas (and pay witness fees) to (i) have control in case defendants withdraw their subpoena; (ii) to specify additional documents for production; and (iii) to avoid disputes.

There Is No Requirement to “Cross-Subpoena” a Non-Party Witness.

Rule 30 provides that “the examination and cross-examination of a deponent proceed as they would at trial under the Federal Rules of Evidence . . . .” Fed. R. Civ. P. 30(c)(1). “This means that counsel for both parties of a civil action are permitted to question witnesses during depositions, regardless of which party noticed the deposition.” Longino v. City of Cincinna, 2013 WL 831738, at *5 (S.D. Ohio Mar. 6, 2013). This interpretation has been adopted by a number of district courts in and outside of California and I have not found any contrary authority. As one district court recently held:

Moreover, “[t]here is no formal requirement for a party seeking to cross-examine a deponent to serve a notice.” F.C.C. v. Mizuho Medy Co. Ltd., 257 F.R.D. 679, 682 (S.D. Cal.2009). Therefore, “[i]n a multi-party lawsuit, one party may notice the deposition and other parties may attend and cross-examine the deponent without also having to notice the deposition.” Id.; accord Longino v. City of Cincinnati, 2013 WL 831738, at *5 (S.D. Ohio Mar. 6, 2013).

Loop AI Labs Inc. v. Gatti, 2015 WL 5522166, at *4 (N.D. Cal. Sept. 18, 2015) (P served subpoena on W; court ordered that D is entitled to 2 hours, even though it did not serve a subpoena).

Take a look at these cases as well:

  • F.C.C. v. Mizuho Medy Co. Ltd., 257 F.R.D. 679, 682 (S.D. Cal. 2009);
  • Spray Products, Inc. v. Strouse, Inc., 31 F.R.D. 211, 212 (E.D. Penn. 1962) (stating that another party may examine a deponent on issues not addressed in the direct examination without serving a prior notice of deposition);
  • Smith v. Logansport Comm. School Corp., 139 F.R.D. 637, 642 (N. D. Ind.1991) (plaintiff’s counsel and co-defendant’s counsel could cross-examine the witness deposed by defendant; stating it would make “no sense” to require a cross-examining party to notice a deposition for matters outside the scope of the direct examination “in light of the liberal objectives of discovery”).

The Court Has Authority to Extend Deposition Beyond Seven Hours.

Rule 30 governs the procedures for taking depositions by oral examination even when compelled by a subpoena. Loop AI Labs Inc v. Gatti, , 2015 WL 5522166, at *4 “Unless otherwise stipulated or ordered by the court, a deposition is limited to 1 day of 7 hours.” Fed. R.Civ.P. 30(d)(1). Rule 30 also provides that when requested to extend these limitations, “the court must grant leave to the extent consistent with Rule 26(b)(1) and (2).” Id., Rule 30(a)(2) (emphasis). In a recent case similar to ours in that both parties wanted to depose a non-party witness for one day each, the court determined that it had authority to extend the deposition:

While neither party to the litigation moved for an extension of the deposition, the Court finds that granting an extension falls within its broad discretion to manage discovery. See Herbert v. Lando, 441 U.S. 153, 177 (1979) (“The [Supreme] Court has more than once declared that the deposition-discovery rules are to be accorded a broad and liberal treatment to effect their purpose of adequately informing the litigants in civil trials.”); Goehring v. Brophy, 94 F.3d 1294, 1305 (9th Cir.1996) ( “Broad discretion is vested in the trial court to permit or deny discovery.”).

Syncora Guarantee Inc. v. EMC Mortg. Corp., 2012 WL 12505608, at *2 (N.D. Cal. Mar. 8, 2012) (P and D served subpoenas and refused to agree to limit total deposition to seven hours; W moved to modify subpoena; court found W’s testimony was important and ordered her to appear for two days).

Tender Witness Fees at the Time of Service.

It is helpful to keep in mind that Rule 45 requires payment of fees at the time of service. In the case below, court issued sanctions against an attorney who moved to compel an invalid deposition subpoena because fees were tendered when he noticed the deposition, not at the time of service. This case is good to keep in mind when serving or responding to Rule 45 subpoenas.

A subpoena is invalid when witness fees or mileage allowances are not tendered at the time the subpoenas are served. Federal Rule of Civil Procedure 45(b)(1) states: “Serving a subpoena requires delivering a copy to the named person and, if the subpoena requires that person’s attendance, tendering the fees for 1 day’s attendance and the mileage allowed by law.” Fed.R.Civ.P. 45(b)(1). A failure to tender fees at the time of service invalidates the subpoena and the deposition testimony will not be compelled. CF & I Steel Corp. v. Mitsui & Co., 713 F.2d 494, 495 (9th Cir.1983) (finding tender 34 days after service and one week after notice of deficiency did not cure defect); Mirana v. Battery TaiShing Corp., 2009 WL 290459, *1 (N.D.Cal. Feb.5, 2009.) In this case, Defendants did not tender the Tourgemans’ witness fees at the time the deposition subpoenas were served. Accordingly, the Court will not compel the deposition testimony of Cesar and Rebecca Tourgeman.

Tourgeman v. Collins Fin. Servs., Inc., 2009 WL 3073714, at *1 (S.D. Cal. May 4, 2009).

Review of E-Service Calendaring & 2017 Rule Changes for E-Filing

Unless a party is personally served, the deadline to respond will be extended for email service.  It’s important to know when additional time is added, and how much.  For a two-minute review of the key rules, see the summary below.  You will also find some 2017 changes to California Rules of Court that will affect (complicate) some filings if you are e-filing in state court.

California Code of Civil Procedure/California Rules of Court (CCP 1010.6; CRC 2.251).

  • Added Time:  Unless a statute or court rule applies otherwise (e.g., new trial, vacate judgment, notice of appeal), the time of notice or to take any act or response is extended by 2 court days.  (This also gives the party serving the document extra time.  See Kahn v. The Dewey Group, 240 Cal. App. 4th 227 (2015) (defendant filing a cost memorandum entitled to two extra days for notice of entry of judgment served on plaintiff by email).)
  • When Service is Complete:  Upon transmission or notification.
  • Proof of Service:  Must include the electronic service address of the person making the service (in addition to the business address); the date and time [see note] the email was sent; the name and electronic service address of the person served; and that the document was e-served.  CRC 2.251(i)(1).  The original POS is kept by the party making the service.  [Note, starting 2017, you won’t need to include the time on your proof of service.]
  • When permitted: E-service is permitted (i) for any document that can be served by mail, fax, overnight delivery if the party consents to e-service or (ii) required by local rule or court order.  Consent to e-service means filing/serving notice of consent to e-service or filing any document electronically.  A non-party may not be e-served unless it consents or service is provided by law.
  • Service by Notification:  Additional rules apply if service is made by notification (i.e., you email a party a link to download a large file).

Federal Rules of Civil Procedure/Central District Local Rules (FRCP 6(d); L.R. 5-3.1.2)

  • Added Time:  When a party may or must act within a specified time after service and service is made under Rule 5(b)(2)(C), (D), (E), or (F), 3 days are added after the period would otherwise expire under Rule 6(a).  FRCP 6(d).  (But note for motions:  If served personally, or electronically, the notice of motion shall be served not later than twenty-eight (28) days before the Motion Day designated in the notice. CDLR 6-1.)
  • When Service Is Complete:  Upon transmission.  (Compare, service by other means is complete when the copy is delivered to the agency designated to make delivery.)  However, e-service is not effective if the serving party learns that the service did not reach the person served.
  • Proof of Service:  The Notification of Electronic Filing generally constitutes proof of service.  For documents not filed, the POS must include document served, the date and manner of service, and the name and address (or email address) of person served.
  • When permitted:  If a person consents in writing, service may be made by electronic means.  In Central District, all attorneys must register with ECF.  Those not registered with the court’s CM/ECF system (or have not consented to electronic service) (e.g., third-parties, pro se parties) must be served traditionally.

Rule Changes.

Starting 2017, the following California Rules of Court change re electronic documents:

  •  CRC 3.1110(f)(4):  Electronic exhibits must meet the requirements in rule 2.256(b). Unless they are submitted by a self-represented party, electronic exhibits must include electronic bookmarks with links to the first page of each exhibit and with bookmark titles that identify the exhibit number or letter and briefly describe the exhibit.
  •  CRC 3.1113(i)(1): Authorities.  A judge may require that if any authority other than California cases, statutes, constitutional provisions, or state or local rules is cited, a copy of the authority must be lodged with the papers that cite the authority.  If in paper form, the authority must be tabbed or separated as required by rule 3.1110(f)(3). If in electronic form, the authority must be electronically bookmarked as required by rule 3.1110(f)(4).
  • CRC 3.1306(c)(2):  Judicial notice. A party requesting judicial notice of material under Evidence Code sections 452 or 453 must provide the court and each party with a copy of the material. If the material is part of a file in the court in which the matter is being heard, the party must: (2) Either make arrangements with the clerk to have the file in the courtroom at the time of the hearing or confirm with the clerk that the file is electronically accessible to the court.
  •  CRC 3.1362(d)(2).  Motion to be relieved as counsel:   If the notice is served on the client by electronic service under Code of Civil Procedure section 1010.6 and rule 2.251, it must be accompanied by a declaration stating that the electronic service address is the client’s current electronic service address.