Quiz question: How long does it take to try a federal case with 22 witnesses and more than 300 exhibits?

Answer: five days- if you're on the "rocket docket" in federal court in Virginia, which streamlines cases to their bare essentials-an approach that the lead plaintiffs' lawyer, Bernard J. DiMuro, encourages all lawyers to adopt no mater where they work.

In this instance, the verdict was even more astonishing than the rapid pace of trial: A record-breaking $177 million Aug. 15 for 13 investors and sales people who sued an Internet start-up company that lied about its financial strength. With $70 million in compensatory damages and $110 million in punitives, it is the largest jury verdict in state history.

The lesson here, said DiMuro, who concentrates in complex civil litigation is "Keep it simple. Get it down to its essence, and try not to make it more than it is." Efficiency and simplicity are the best way to achieve great results, he added.

Here, finding a simple theme was easy, he said.

"Lying and deceit. That [the defendants] have stolen your money," said DiMuro, the current president of the Virginia bar. "But at a higher level, the theme was the need for corporate accountability and the need to be forthright with shareholders. That corporate America needs to be honest, and that's what's outraging the average citizen, because they feel they've been lied to."

The case involved a Virginia-based Internet start-up company called TutorNet.com, which provided live online tutoring to school children. The plaintiffs alleged the company lied about its assets, partnerships with other companies, and celebrity endorsements-and also failed to deliver public stock as promised to investors and stockholders.

"In this case, the defendants looked like cheats. When you get a verdict like this, it has to be that the jury was angry at the other side," DiMuro said. "The facts in this case were outrageous and it was easy to make the jury see that."

Just how angry, though, was something that took DiMuro and the other lawyers on the plaintiffs' team some time to absorb. With so many plaintiffs, as well as four defendants and numerous claims, it took about an hour for the verdicts to be read. "I was writing the verdicts down, and about midway through, I realized, 'we're talking about some real money here!" said DiMuro.

The jury found that TutorNet and its officers had committed federal securities fraud and common-law fraud, and had breached both their fiduciary duty to investors and their contracts with the salespeople.

The 13 plaintiffs in the case were part of a test group. More than 130 more plaintiffs now plan to take their cases to trial against TutorNet.com and their co-defendants, DiMuro said.

The defendants have stated they plan to appeal, according to news accounts.

Celebrity Endorsements

In 1998, a man named Euborn Forde, who'd been trained in telecommunications, left his job at Primus Telecommunications to launch an Internet company he called TutorNet.com. Co-founder Rajiv Dalal was in charge of seeking investors. Primus Telecommunications invested $400,000 in the start-up, received 19.9 percent of the initial public offering of stock in exchange, and was entitled to purchase an additional 51 percent of the stock after the IPO. Primus also set up a wholly owned subsidiary called TutorNet.com Services, Inc., which held the monies that paid the salaries of Forde and Dalal and other expenses.

Forde and Dalal attracted numerous private investors, who contributed $5,000 to $5 million, by assuring them TutorNet had landed lucrative revenue-generating contracts or partnerships with such major companies as America Online, ToysRUs, Quaker Oats and Coca Cola. They also claimed an organization of 70,000 churches had agreed to purchase tutorships, generating millions of dollars. And they claimed that various celebrities - including Barbra Streisand and Demi Moore - endorsed the company. The defendants also hired a staff of salespeople, to whom they made the same claims and who were promised stock as commissions for attracting more investors to TutorNet.com.

But when the company went public, only Forde, Dalal and some employees of TutorNet received publicly traded stock. None of the investors or salespeople received the shares they had been promised. And TutorNet never took off. While some teachers were hired and some subscribers signed on for the online tutoring, the company produced just $20,000 in revenues in 1999. Th stock - which once traded for $20 per share - last traded on Aug. 19 for less than a penny.

According to the plaintiffs' witnesses, there were no celebrity endorsements - at most, Streisand may have said TutorNet was a "good idea," but did not endorse it. That alleged revenue-generating contracts with AOL and other major companies were completely misrepresented, witnesses testified-it was TutorNet that paid AOL for an advertisement, DiMuro said. And the church contract generated $140,000 at best, not the millions that Forde and Dalal claimed.

The original group of plaintiffs included about 150 investors and salespeople. They petitioned the court to allow a test group to try the case, after which the remaining plaintiffs could decide whether to pursue their claims. The plaintiffs sued Dalal, Forde TutorNet.com, TutorNet.com Group - and Primus Telecommunications, alleging that Primus was a controlling investor under federal securities law, had abetted in common-law fraud, and had engaged in conspiracy, among other claims.

The morning of the fifth day of trial, the judge dismissed the case against Primus. Defense attorney Steve Edwards said Primus' position was that it "had absolutely no involvement in TutorNet's efforts to raise money from investors. It didn't meet with them, it didn't make representations to them, it didn't advise TutorNet on approaching investors. Primus had no reason to believe TutorNet was engaging in a fraud." All Primus did was invest in the company, he said.

"The plaintiffs' theory of the case raises some significant issues, because if a passive investor can be liable for management's fraud, then people aren't going to want to be passive investors any more," said Edward.

Judge Leonie M. Brinkema has not yet issued an opinion explaining why she dismissed Primus.

As Primus was the deep-pocket defendant (Forde has declared bankruptcy), DiMuro said he was "stunned" when the judge dismissed it. He expects to appeal her decision, he said. Primus, which carried $20 million in insurance, had offered the plaintiffs $300,00 to settle the case before trial. TutorNet.com Group, the public company that gave shares to Dalal and Forde but not the investors or salespeople, may have licenses or other assets that may enable the plaintiffs to collect something, DiMuro said.

Fast And Simple

The federal court system in Virginia is renowned for its "rocket docket," which not only forces cases to trial less than a year afer filing, but also has numerous procedures that keep litigation moving quickly and efficiently.

"This was a 300- to 400- exhibit case, with 22 witnesses, and it was done in five trial days," said DiMuro. "There's nowhere else you could do that, except in Virginia federal court."

The system is better for juries - who don't get bored or confused by repetitive testimony and evidence - better for the court system, and better for the lawyers, who learn how to boil cases down to their basics, he said.

All exhibits and the witness list must be filed pre-trial. All objections to these must be filed ahead of time; if there are no objections, the exhibits are automatically admitted, which eliminates the time -consuming matter of laying a foundation for evidence. Judges also limit examination of witnesses off of written documents, instead admitting these documents into evidence for the jury to read later.

Every Friday is motions day, which breaks discovery logjams before trial and quickly resolves other issues during trial. All exhibits are bound and presented in a neat package to the judge, lawyers, and later, the jury members. Judges - who work from 8 a.m. to 6 or 6:30 p.m., according to DiMuro - also frown on cumulative witnesses, and encourage the use of stipulations. Continuances are not allowed. And once trial begins, judges keep it moving without interruptions.

"I've seen transcripts where the judge has said, "next witness, counsel.' The lawyer will say, 'He's on his way to court.' And the judge will say, 'I take it your case is closed.' That doesn't mean you have to have all your witnesses there for every day of trial, but you better have enough each day so there's not a delay," DiMuro said.

DiMuro's firm, DiMuro, Ginsberg & Mook, is often hired by firms even as close as Washington, D.C., because of its familiarity with the rocket docket.

"Lawyers know it's different and they need someone who works it," he said. "Every time I get hired as the local lawyer, I warn the other lawyers to get ready for this."

The system can be shock to those unfamiliar with it. One of the defendants, Forde, who represented himself until the day of trial, failed to file a witness list ahead of time and as a result wasn't allowed to present his seven witnesses.

Once trained in the system, though, lawyers become much better at presenting cases in any court, since needless delays and repetition are eliminated. "They learn to get to the point, to have all their documents ready, to have witnesses ready. If you get good at that, by definition, the case goes faster," DiMuro said.

"You're better off trying cases succinctly and to the point, and forgetting the collateral noise, because if you don't win the main part, you're not going to win the others," he added.

Plaintiffs' attorneys: Bernard J. DiMuro of DiMuro, Ginsberg & Mook in Alexandria, Va.; John Clifford of Clifford, Garde & Lyones in Washington, D.C.; Wayne Collins of Collins & Watson in Houston; George P. Hardy III of Hardy & Johns in Houston.
Defense attorneys: Steve Edwards of Hogan & Hartson in New York, N.Y. for Primus Telecommunications; Rajav Dalal, pro se; Laurence Strick in Tiburon, Calif., for Forde; Richard Stahl in Fairfax, Va., for TutorNet.com Group.
The Case: Andrews v. Primus Telecommunications Group; U.S. District Court for the Eastern District of Virginia; Judge Leonie M. Brinkema.