When Does an Order Qualify as a Final Order? How Does This Affect Bankruptcies?

By Jarrad Wright

Failing to notice an appeal in time is a classic pitfall that has led to numerous malpractice claims. One key problem plaguing counsel is determining whether or not an order qualifies as a final order for appellate purposes. As a general rule, a trial court decision becomes final for appellate purposes only after the entire case is finished and when there is nothing more for the trial court to do but execute a judgment. While simple in concept, practical application of this general rule can become complicated, especially when there are different types of claims and parties involved. Indeed, in the bankruptcy context, the United States Supreme Court’s recent decision in Ritzen Group, Inc. v. Jackson Masonry, LLC held that the finality requirement for filing an appeal requires creditors to file an appeal of denials of motions to lift the automatic stay within fourteen days, which is often long before the value of the underlying claim would be decided let alone a bankruptcy would be concluded. This understanding of finality could initially seem counterintuitive but, as Justice Ginsburg explained when writing for a unanimous Court, the “ordinary understanding of “final decision” is not attuned to the distinctive character of bankruptcy litigation.”

When a company or individual files for bankruptcy an automatic stay stops all pending and future civil litigation and attempts by creditors to collect on debts. Creditors wishing to proceed with these efforts outside of bankruptcy court are required to file a motion to lift the automatic stay with the bankruptcy court. Using a variety of factors, the bankruptcy court then decides whether to allow the creditor to proceed independently in another forum or whether the matter should be decided as part of the overall bankruptcy case. In the Ritzen case, the creditor waited until after his claim had been adjudicated and the plan of reorganization had been confirmed, to appeal the denial of the motion to lift the automatic stay. However, the Supreme Court held that “the adjudication of a motion for relief from the automatic stay forms a discrete procedural unit within the embracive bankruptcy case.” The upshot of the Ritzen case is that parties involved in a lift stay proceeding must be ready to file an appeal within the fourteen-day period of the bankruptcy court’s determination.

The Court’s reasoning is that moving to lift the automatic stay is a separate issue from the determination of the creditors’ claim itself and the Court explained that “[i]mmediate appeal, if successful, will permit creditors to establish their rights expeditiously outside the bankruptcy process, affecting the relief sought and awarded later in the bankruptcy case.” Moreover, the Court explained that it does not matter whether the bankruptcy court’s decision on lifting the stay implicates other issues to be decided later in the bankruptcy case as long as it “conclusively resolves the movant’s entitlement to the requested relief.” Therefore, in the narrow context of a motion to lift the automatic stay, a bankruptcy court’s determination to grant or deny lifting the automatic stay is a “final” order in which a litigator should quickly move to notice an appeal in order to avoid waiving such an appeal.

However, litigators should be wary of applying Ritzen outside of this narrow context. Routinely in non-bankruptcy cases a pre-judgment decision can have a significant impact on the course of litigation and can affect the relief sought and to be awarded later, yet the decision may not be final for purposes of appeal. In other instances such as a decision dismissing a party for lack of personal jurisdiction may be appealable immediately. Ultimately, careful consideration of the circumstances and type of order involved remains necessary to avoid the classic pitfall.

DGRead 20.02.15

eDiscovery and How to Best Use it; Rocket Docket Update; Pitfalls of Outsourcing Background Checks; DG/30 Milestone

Be careful when outsourcing your background checks

by M. Jarrad Wright
DiMuroGinsberg, PC

The potential pitfalls of using a consumer reporting agency and maintaining compliance with the federal Fair Credit Reporting Act (FCRA) were highlighted in a recent decision by the federal district court in Richmond, Virginia. In the case, job applicants filed a class action lawsuit against Wells Fargo Bank and the First Advantage Background Services, a consumer reporting agency the bank retained to perform background checks.

Facts

According to the class action suit, the language of the disclosure authorization form used by First Advantage failed to comply with the FCRA’s disclosure requirements. Among other things, the applicants argued the form, which contained a release of FCRA rights, was effectively hidden in Wells Fargo’s lengthy job application form. As a result, the applicants said First Advantage had no legal right to run a background check or provide a background report to the bank.

Court’s decision

Central to the federal court’s assessment of the applicants’ claims was whether they could establish an actual injury as required by the U.S. Supreme Court’s 2016 decision in Spokeo v. Robins. In that case, the Supreme Court said anyone pursuing an FCRA claim must show “an invasion of a ‘legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent,’ not conjectural or hypothetical.”

In this case, the federal court concluded the applicants had failed the Spokeo test. It reasoned they “knowingly and actively consented to the dissemination of their information to Wells Fargo” when, as part of the application process, they went to a website controlled by First Advantage and entered their private information for the explicit purpose of having a background check run. According to the court, “because [they] consented to this disclosure, they have not alleged a sufficient FCRA violation.” Frazier v. First Advantage Background Servs. Corp., Civil Action No. 3:17cv30.

Steps to compliance

Although Wells Fargo was successful in fending off the class action lawsuit, the case represents a cautionary tale for all employers that conduct background checks. Had the applicants not “actively and independently” used First Advantage’s website to provide their information, the outcome could have been much different. Accordingly, to avoid being the target of an FCRA lawsuit, it’s important to fully vet the company you use to conduct background checks and to thoroughly understand the processes used for satisfying the FCRA requirements. Questions you should ask include:

  • What warnings are given to applicants during the background check process?
  • Is there a separate website where applicants enter their information, or is another process used?
  • Are the disclosure forms for applicants fully vetted, and are they in compliance with the disclosure requirements of the FCRA?
  • Is your company using a standalone disclosure authorization form that has been properly vetted? (Using a standalone form is preferable to one that is combined with other information and will reduce the possibility of an FCRA violation.)

Bottom line

Background checks are an increasingly useful hiring tool, but there remain pitfalls with FCRA compliance. Having a formal policy on the use of background checks and the methods for instituting them can help ensure you don’t run afoul of the law. When in doubt, you should have experienced employment counsel review your policies and procedures to ensure FCRA compliance. When dealing with the FCRA, an ounce of prevention is worth even more than a pound of cure.

Editor’s note: For additional information on the requirements of the FCRA and the Supreme Court’s Spokeo decision, please see the following two articles in Virginia Employment Law Letter: “Know the rules before conducting background checks,” Vol. 28, Issue 1, February 2016, and “U.S. Supreme Court clarifies FCRA liability,” Vol. 28, Issue 5, June 2016.

M. Jarrad Wright is an attorney with DiMuroGinsberg PC and a contributor to Virginia Employment Law Letter. He may be reached at mjwright@dimuro.com.

eDiscovery and How to Best Use it

by Bethany Coan, eDiscovery Project Manager
eDiscovery (electronic discovery…I know you knew that) is here to stay! With thousands of emails and documents connected to individual parties, the amount of discovery law firms are receiving is not getting any smaller. Communications, containing incredibly important information for review, have expanded from simple emails, apps like “What’s App”, Facebook Messenger and Slack just to name a few. New online programs are available to make these communications easier for all, but knowing the most efficient and safest ways to use eDiscovery or any form of communication you choose, is of the utmost importance to your success.

Here are some of the most crucial tips to effectively working with eDiscovery

  1. Create a Timeline! Whether you are using online programs or reviewing your documents the old-fashioned way, creating a timeline using all of your documents will allow you to see exactly how all of the emails and their attachments fit together. The timeline will make it easier to find emails and events by certain dates. A timeline can also help you sort by sender, recipient, date, subject, etc. so you can track various points of information which is helpful to identifying key documents. Some eDiscovery review platforms offer this on their site, but you can create your own timeline using Excel (and save it to a central location available to all team members working on the case). I have found this incredibly helpful for finding hot documents and their connected email chain. It’s a great way to see everything laid out in a visual way instead of endless pages of emails. If the documents have been Bates-numbered, it is ideal to add the page numbers to the timeline for additional reference.
  2. Use Tags! This is the best way to identify key documents that you want to return to at a later point on any eDiscovery platform. The tags can be highly nuanced or much broader, but, either way, it can shave off valuable time searching for documents previously identified. Once the tags have been added, you can review all the documents that have been identified by these tags at one time. The online reviewing platforms will allow you to add as many tags as you would like. I have used tags like “Hot Docs,” “For RFAs,” “Exhibit [X],” and “Deposition” to identify important documents that are necessary for the many stages leading up to trial. The tagged names (i.e. Confidential, Attorneys Eyes Only) can be stamped at the bottom of the chosen pages once you are ready to download the production.
  3. Don’t Remove Metadata! If at all possible, it’s always better to upload an email in its native format rather than a PDF version of the same email. These eDiscovery programs are capable of performing searches based on the time/date an email was sent, who it was sent to, a specific phrase, etc., but once the metadata is removed, it is a flat image and it can be much harder to find the desired email. When receiving emails and documents from clients for discovery, strongly encourage them to give it to you in a native format to keep from losing that valuable and pertinent information. It will make the search process so much easier and faster. The eDiscovery platforms will detect the words in the PDF emails, but it is not nearly as accurate.
  4. Be Specific with Your Search Terms! The key to any good search is using the right search terms. Search terms that are too vague will produce an overwhelming number of documents to sift through. Utilizing Boolean Terms to combine keywords with operators and modifiers such as “AND”, “OR”, and “NOT” will create a richer context among the search terms you explore. The more specific you get, the smaller number of hits that will be returned. Include as much relevant information as you possibly can. eDiscovery platforms offer advanced searches for date ranges, email addresses, lists of names or numbers, etc. You can even designate words to be highlighted automatically when found from page-to-page.

To sum up: be organized, think ahead, be specific and let the programs work for you. You almost have to think like a program thinks as you use the program. Don’t be intimidated. eDiscovery is here and it’s the now and the future of how we will work to bring the best to our clients. Get on the bus.