For the first time since the Spanish flu epidemic in 1918, the United States Supreme Court issued a notice postponing all oral argument scheduled through April 1, 2020. With the coronavirus pandemic forcing courts throughout the United States to alter their schedules and procedures, many litigants are left wondering – what now? This alert summarizes the current status of the (admittedly ever-changing) litigation landscape and provides tips to avoid or at least minimize risk during these unprecedented times.
How does COVID-19 impact ongoing US litigation?
Just last week, news broke of the first confirmed coronavirus cases within the judiciary: a judge in Queens, New York tested positive for COVID-19 and the Superior Court of the District of Columbia stopped all proceedings after a deputy US Marshal stationed at the courthouse was confirmed to have the virus. Now, on an almost daily basis, courts at every level are issuing new and updated guidance detailing their respective responses to the pandemic, which have, to date, included the following:
Court closures and restrictions
The operational status of the judiciary varies widely by jurisdiction, ranging from courts that are open and continuing to operate in normal course to courts that have shuttered their doors for all purposes.
In Los Angeles County, for example, select state courts re-opened on March 20 (following a three-day complete closure) to handle only time-sensitive and essential functions, while nearly 400 Los Angeles courtrooms will remain closed through April 16, with more closures expected. All criminal and civil trials and all jury service have been suspended. The US District Court for the Central District of California issued an order cancelling all hearings though May 1. San Francisco Superior Court has closed 75% of its courtrooms, continuing all civil trials and requiring law and motion calendars to continue by phone. Santa Clara County courts have closed their doors, except for a very limited set of “essential functions.” The Northern District of California is also closed, having postponed all trials until May and ordering that all civil matters be decided on the papers (of by telephone if the judge believes a hearing is necessary). New trials and other non-emergency proceedings have also been postponed by courts in Alaska, Florida, Georgia, Hawaii, Illinois, Massachusetts, New York, Texas and Washington D.C., among other jurisdictions. Judges retain individual authority to close individual departments on a case-by-case basis.
While other courts remain fully operational, like those in Arizona and Delaware, they have imposed restrictions on access to the courthouse, specifically excluding recent travelers and those experiencing COVID-19 symptoms. Many courts that remain open are conducting appearances by telephone wherever possible.
Filing deadline extensions
Most courts are still accepting filings, though some have restricted in-person filing or prohibited it altogether. Numerous jurisdictions have temporarily excused hard-copy delivery requirements and others are allowing pro-se litigants to file by email or fax.
Some courts have granted automatic extensions for certain filing deadlines; for example, Georgia state courts have suspended all filing deadlines until April 13, federal courts in Virginia and Maryland have extended filing deadlines by several weeks, and the Second and Third Federal Circuits have extended certain deadlines 21 and 30 days, respectively. Otherwise, filing deadlines remain unchanged, absent an order by the court or individual judge. Courts in various Northern California counties, including Alameda and San Francisco, issued orders declaring all dates through mid-April “court holidays” for the purposes of computing time for filing deadlines and, in some cases, extended statutory limitations periods due to expire before April 3, 2020. However, even those orders granting automatic extensions typically exempt certain deadlines that trial courts are not statutorily authorized to extend, such as deadlines for initiating appeals. Some courts have indicated a willingness to grant continuances based on COVID-19-related difficulties as a matter of course, but litigants are still expected to file formal requests.
As with filings, most party discovery has proceeded as scheduled. However, with more and more government directives limiting travel and mandating shelter (and work) in place, completing discovery in a timely manner may become more and more challenging. With the vast majority of the workforce at home, it is increasingly difficult to access personnel for interviews or to assist with data collection (particularly where extraction must be done on site). Furthermore, with shelter in place and travel restrictions becoming widespread, witnesses, lawyers and court reporters will become increasingly unable/unwilling to travel for depositions.
As discovery becomes more difficult to complete, litigants will need to get creative to keep their cases on track, and parties are increasingly relying on video and written depositions, testimony from alternative witnesses and other remote discovery collection methods. While discovery obviously should not be conducted in a manner contrary to CDC guidance on COVID-19, some judges have refused to grant continuances on account of the virus. For instance, Judge Rodney Gilstrap (Eastern District of Texas) denied a request to continue pre-trial discovery deadlines, finding that the parties were “well-versed in the technological innovations that would remotely produce high-quality witness depositions.”
As evidenced over the past week, the status of the judicial response to COVID-19 is changing rapidly. It is unclear how long court closures will last or what other restrictions might be put in place. If you are a party to pending litigation or arbitration, be sure to discuss with counsel the potential impact on your matter. Do not assume that the matter (or any specific deadlines) will be continued and be sure to support any requests for continuances with specific facts to establish why more time is warranted.
What litigation and compliance risks might arise from the logistical challenges of an increasingly remote workforce? And how can we mitigate those risks?
With some of the most populous states in the country -- including California, Connecticut, Illinois, New Jersey and New York -- requiring their entire “non-essential” workforce to shelter-in-place (or, in the case of Pennsylvania, mandating closure of all non-life-sustaining businesses), the number of employees operating exclusively from home has grown exponentially. This drastic expansion in telecommuting raises a number of litigation and compliance red flags that companies should bear in mind as they navigate this new work-from-home environment. The issues our clients are facing include the following:
Data privacy and attorney-client privilege
Though remote work decreases risk of community-spread disease, it increases cybersecurity challenges in many ways, some of which may materialize in subsequent litigation. For example, employees may now be working from unsecured Wi-Fi and personal devices, or even transmitting sensitive company data via personal and unencrypted email accounts. Employees may also be taking offsite sensitive hard-copy materials and company computers, or taking part in key company meetings by telephone or video in unsecure locations. If these conversations and meetings involve counsel or if those materials are protected by the attorney-client privilege, it is important that employees safeguard against disclosure to third parties that may result in waiving the privilege.
Not only does this vulnerability risk destroying privilege and exposing confidential company information to hackers and eavesdroppers, insufficient security efforts could threaten trade-secret protection. Further, weakened security practices may also increase the risk that such information could be required to be disclosed in litigation. See, e.g., Johnson v. Ford Motor Co., No. 3:13-6529, 2017 US Dist. LEXIS 211877 (S.D. W. Va. Dec. 27, 2017) (evidence that allegedly trade secrets were sent to third parties using unsecured networks suggested that trade secrets were not securely safeguarded and counseled in favor of requiring production in discovery).
Companies should take this opportunity to review their current information security and BYOD policies and guidelines, and remind employees of these expectations.
Validity of digital signatures and “soft copies”
Shelter-in-place restrictions challenge the availability of “wet” signatures, calling into question the binding effect of digitally-signed and “soft copy” documents (i.e., documents signed by hand but transmitted digitally). Existing laws on this point are complex and, at times, uncertain and their effect can vary by jurisdiction and type of transaction. While there is hope that the uncertain legislative landscape will improve, companies should in the meantime develop an e-signature protocol that is consistent with their business and appetite for risk. Baker McKenzie partner Lothar Determann has authored a helpful paper on these issues. Electronic Form Over Substance - eSignature Laws Need Upgrades.
In addition to considering the legality of e-signatures, parties should also consider how e-signed documents can be authenticated if challenged (which is a typical evidentiary issue in trials). Using an application like DocuSign to collect signatures can ease this process by requiring the signatory to provide multiple levels of identity authentication (e.g., email verification, access codes or and knowledge-based identity checks). At trial, the application’s authentication data would be presented through an appropriate witness, such as a digital handwriting expert.
Virtual meetings and regulatory compliance
As proxy season approaches, many companies are rethinking their strategy for mandated meetings and other compliance events. In the wake of COVID-19, the Securities Exchange Commission has offered “regulatory flexibility” for annual shareholder meetings and for the delivery of proxy materials to voting shareholders, allowing companies to conduct “virtual” meetings that avoid the need for in-person attendance but still ensure market participants are informed of changes. In conducting virtual meetings, companies should be sure to implement reasonable measures to verify that each person deemed present and permitted to vote is, in fact, a stockholder and to give shareholders the ability to participate and present proposals at the meeting. Baker McKenzie partners Amy Greer and Jennifer Klass provide further guidance and best practices here.
Meetings should be recorded, and the chain of custody documented, to maximize the likelihood that the recording can be authenticated should that become necessary.
How Do I Get More Information?
As we note above, this is a rapidly evolving area that is changing on a daily basis. Please do not hesitate to contact the Baker McKenzie litigation team if you need assistance navigating any of these issues or visit our Coronavirus Resource Center for more information.