Viability Of Claim For Conversion Of Electronic Data Certified To New York Court

The Second Circuit has asked the highest court of New York state to clarify the law regarding whether a claim of conversion can exist where the property converted consists solely of electronic data.

In Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d 400 (2d Cir. Aug. 21, 2006), a former insurance agent who leased a computer system from his principal sued for conversion when the insurance company reclaimed the computer. The agent had installed various software of his own on the leased system and created electronic documents with that software, all of which he alleged were converted when the company took the computer.

The district court dismissed conversion claims based on the fact that the company owned the computer, but the Second Circuit disagreed that such ownership interest alone was a barrier to the claim. However, it analyzed New York law concerning the applicability of conversion claims to intangible property and found the matter “unsettled.” It certified the question of whether “a claim for the conversion of electronic data [is] cognizable under New York law.”

Sixth Circuit Finds Rule 26(a)(2) Requires Disclosure Of All Information Provided To Testifying Experts

In Regional Airport Authority v. LFG, LLC, No. 05-5754, 2006 WL 2368323 (6th Cir. Aug. 17, 2006), the Sixth Circuit became the second court of appeals to hold that the 1993 amendments to Fed. R. Civ. P. 26(a)(2) created a bright-line rule mandating disclosure of all information provided to testifying experts, even if such materials included attorney work product.

Since 1993, courts have split over the issue of whether work product that attorneys provide to their retained testifying experts must be disclosed. Beginning with Haworth, Inc. v. Herman Miller, Inc., 162 F.R.D. 289 (W.D. Mich. 1995), some district courts have held that work product shared with a testifying expert does not necessarily need to be produced because Rule 26(b)(3) and (4) retain some protections for work product.

However, in Regional Airport Authority the Sixth Circuit overruled the Haworth rule and found that amended Rule 26(a)(2) trumps Rule 26(b)(3) and (4).

Third Circuit Examines Split Regarding Preclusive Effect Of Alternative Findings

The doctrine of collateral estoppel holds that a ruling on a particular issue has preclusive effect and may not be re-litigated in a later proceeding where the identical issue was actually adjudicated, there was a full and fair opportunity to litigate the issue, and the determination by the adjudicator was necessary to the decision in the case. However, courts are split over whether this doctrine applies to a ruling based on alternative findings because of the difficulty in concluding that any one alternative finding was any more “necessary to the decision” than the others.

In Jean Alexander Cosmetics, Inc. v. L’Oreal USA, Inc., No. 05-4321, 2006 WL 2337267 (3d Cir. Aug. 14, 2006), the Third Circuit observed that the First Restatement of Judgments adopted the view that any alternative findings should be given equally preclusive effect, but 40 years later the Second Restatement reached the opposite conclusion, refusing to give preclusive effect to alternative findings that were each independently sufficient to support the judgment. The federal courts of appeal have split behind those two positions, with the majority following the First Restatement.

The Third Circuit rejected the Second Restatement position and sided with the Second, Seventh, Ninth and Eleventh Circuits.

Time To Appeal Of Class Certification Ruling Not Extended By Renewed Motion

Interlocutory appeal of rulings on class certification motions is available, at the discretion of the appellate court, by filing a petition under Fed. R. Civ. P. 23(f) within ten days of the ruling.

In Carpenter v. Boeing Co., No. 04-3334, 2006 WL 2244242 (10th Cir. Aug. 8, 2006), the Tenth Circuit held that the 10-day period is not subject to extension through the filing of a motion seeking the district court’s reconsideration of its ruling. In the Carpenter case, plaintiffs filed a petition within 10 days after the district court denied their “renewed” motion for class certification. The appellate court viewed that motion as a motion to reconsider, and dismissed the petition as untimely.

Substitution Of Correct Defendant After Expiration Of Statute Of Limitations Denied

In Locklear v. Bergman & Beving AB, No. 04-2506, 2006 WL 2244532 (4th Cir. Aug. 7, 2006), a plaintiff sued a company it named “Hassleholms Mekanisk AB” in a products liability complaint filed shortly before the statute of limitations expired. Plaintiff claimed that company was the manufacturer of equipment responsible for his personal injuries.

Subsequently he learned that the manufacturers actually were entities called “Luna AB” and “Bergman & Beving AB.” After allowing him to amend the complaint to substitute those parties as defendants, the court dismissed the complaint as time-barred because the original complaint did not toll the statute of limitations against the new defendants under Fed. R. Civ. P. 15(c)(3).

In affirming, the Fourth Circuit noted that where the Rule speaks in terms of relation-back in the case of a “mistake concerning the identity of the proper party,” courts distinguish between “mistake due to a lack of knowledge and mistake due to a misnomer.” A complaint amended to correct a mere misnomer relates back to the original complaint for limitations purposes, but a correction such as the one in Locklear to add a new party that the plaintiff simply did not know about “drags a new defendant into the case” and does not relate back.