Wisconsin Business Law and Litigation
A blog dedicated to Wisconsin business law and business litigation matters, authored by Chris Moander of the Moander Law Firm.

Small businesses have to leverage each dollar spent to maximize return and software is often one of the major expenditures. Traditionally, software was based on the individual computer or on a server. For example, Microsoft Word is installed on each individual computer in the company and creates documents on that specific computer. Things have changed. Software as a Service (SaaS) is showing its might in areas ranging from document creation to customer relationship management. Examples include Google Docs, 37signals tools, and Linked-In.

There is no doubt these tools are useful, mainly because they are affordable (or free), there are no pure setup costs, and software downtime is rare. Instead of paying for a license per computer, you can buy access based on the number of users, usually totally a far cheaper pricetag. Many companies that offer SaaS have developed simple and easily understood graphical user interfaces - drag-n-drop, tabs with obvious names, and other tools. These are great reasons to use SaaS and I agree, they are compelling. Nothing sounds better than using software that appears to level the playing field by a wide margin between small business and behemoth corporations.

However, there are some downsides to consider and they are quite real and quite problematic for small companies. One is the matter of proprietary and confidential information. Almost anything can be considered proprietary (client lists, schematics, etc); the same applies to confidential information. Does your SaaS provider have quality security? Do they also effectively back up whatever information you’ve given them? Is there any way for you to do an independent backup for your information (aside from paper printoffs)?

What happens if there is a billing tiff? And the SaaS company cuts you off from your information?Any service agreement needs to be examined closely with a mind for these matters.

Another issue is the customization capability of SaaS. Most vanilla modification abilities are available, but what if you need to cater software to extremely specific uses? The other side of this issue is that money saved on basic services can be reallocated to area-specific and customizable software.

Finally, one area that should probably be avoided for SaaS is the company’s financials. It is very much in your best interest to maintain ownership of your financial and economic information.

The moral here: evaluate SaaS for your own needs. If the service fits and you trust the provider and the agreement, by all means use it.

Yes, requests for admissions are what they sound like - questions designed to get a party to absolutely admit or repudiate a fact (which can be an event, a statement, a time, a location, etc). It is always beneficial to a party of a lawsuit to “pin” the opposing party to a fixed position on a fact. After all, if you get your opponent to commit to a position in written discovery, it makes it very hard for them to change their story down the road and you also get the benefit of knowing where the opposing party stands with some certainty. Such a tactic comes in handy when your attorney wants to lay what is called a foundation for documents or other evidence. A foundation is testimony or other evidence that allows the court to admit other evidence, much like a concrete foundation supports a house. A foundation laid through well-drafted admissions gets other evidence in faster and with less effort.

To narrow our definition down further, requests for admissions address two very specific needs: one is to eliminate an element of a cause of action from trial; the other (and opposite) is to show the court that a given issue is very much in dispute and thus fit for trial.

I can break down these two concepts into more manageable bites. A cause of action is the legal theory behind a lawsuit (ex: breach of contract). Each cause of action is constructed of elements, as a cake is made of ingredients - however, in most cases, each element must be proven by facts. To eliminate one element is to “kill” the cause of action and that part of the lawsuit is kicked out of court. You can see why admissions can have a profound impact on your case. On the flipside, admission of certain facts confirms that a dispute exists between the parties and the lawsuit remains alive. This scenario avoids what is called summary judgment, meaning that no dispute as to the facts of the case exists and the judge can apply the law to facts as they stand, resulting in no need for a trial.

The most important concept for you, as a litigant, to understand is that once you admit to something via a request for admissions, that factual matter is definitively settled. The only exception is when the court allows you to withdraw and admission, which is rare.

As with interrogatories, you have a limited time to answer and return requests for admission. By now, you probably realize you will need to handle requests for admission with your attorney. Each response, with your assistance, will be meticulously drafted to stay in line with the litigation strategy and to spot any objectionable requests. Your attorney will also inform you that the tactic of “I don’t recall” that worked with depositions and interrogatories will not be allowed with requests for admission - you either admit or deny, there is no middle ground and there are no qualified answers.

Admissions can kill your case, or get the case resolved in your favor, as fast as any single discovery device. Close work with your attorney will pay handsomely.

Next up is our final topic: inspections of documents, places, and things.

Phew! We’ve briefly covered the topic of depositions, a major component of discovery in a lawsuit. Now, we’ll take a look at “interrogatories.”

Interrogatories
Interrogatories, at the most basic level, are written questions served on the opposing party which must be answered truthfully (as you might guess). They can be served at any stage of litigation prior to trial and so are flexible tools. The key use for interrogatories is to confirm concrete facts, such as dates, locations, times, and names - this allows your attorney to “sharpen” other discovery tools so they can uncover even more details of your case.

Esoteric interrogatories will fail to elicit quality information because opposing counsel almost always formulates the response to the interrogatory, but that is not to say the lawyer herself answers the questions. The party answers the questions and then signs those answers; the attorney ensures that the answers conform to the theory of the case and signs only objections to the questions. As you learned in my last discovery post, depositions do not allow an attorney as much control over a deponent’s response as interrogatories do. Another problem posed by interrogatories is that they offer clues as to the serving party’s strategy, mostly because it takes time and money to formulate quality questions (although there is no explicit limit to the number questions allowed in Wisconsin, Federal rules limit interrogatories to 25 questions) and so questions issued are quite specific and narrow, revealing some strategy to those served.

When your attorney drafts a set of interrogatories, he will likely need your help. Specifically, he may probe your knowledge about people who you think know “things” about your case (these folks could be anyone from a janitor to a highly decorated expert in a field) or what documents might contain information about your case - essentially the same information that would be used to determine who your lawyer should depose.

Of course, if you are served a set of interrogatories, you are obligated to answer them (with the help of your lawyer, of course). Your counsel will mostly likely walk you through each question and discuss the answer with you at length. Timeliness is important (you have 30 days to answer and return the questions), so you will probably need to start working on answers as soon as you can. However, if your answers require lengthy or intensive research, your attorney may require more time to complete the questions and will file motions to extend the time to answer.

It is also important that you and attorney agree that you, as a witness and the person subject to the interrogatories, both understand the answers and can testify to those answers - anything less is dangerous to your case. As with almost all discovery, your answers can be used against you at trial. In the same vein, you will also need to be prepared to dig up documents you may not have already handed over during prior discovery as some interrogatory questions request information best “answered” by turning over a document.

Because interrogatories are subject to a bit more control by your attorney, you will likely feel less immediate stress than from a deposition. However, your answers have a real impact on your case. You should work very closely with your attorney in preparing interrogatories in order to maximize both usage and responses.

Depositions in Wisconsin

Depositions, in most cases, are oral examinations of people related to a case. These questioning sessions can involve anyone, whether or not they are a party to the lawsuit. As one well known litigator has stated, “a deposition is is the accumulation of information, slowly.” What he means is that depositions require the questioning attorney to inquire, in great depth, into every potential detail of the matters concerning a lawsuit.

From a party’s, or any deponent’s, standpoint, one can see how stressful and tiring depositions often are, not including preparation for the event itself. It’s no wonder parties who are familiar with lawsuits hate depositions and why those being prepared for one develop a high sense of anxiety.

From the standpoint of a lawyer, depositions are incredibly useful for a number of reasons. One is that human beings lie, do not remember events/facts with precision, and just plain forget things. Naturally, these flaws affect either party, but a thorough probing by an attorney can clarify facts within reasonable certainty. Quality inquiries by a deposing attorney can also reveal documents, people, or things the deposing party did not know about prior to the deposition. Humans also like to brag in a variety of ways and depositions bring the braggart out of a lot of people - those who know the ins and outs of the matter at issue and those who love gossip. On the other hand, people do like to be helpful and this quality can often lead to answers that extend far beyond the question asked. Lawyers are also better able to cater questions to the individual being deposed because they can gauge responsiveness and truthfulness by the deponent. A final and incredibly powerful application of a deposition is its usage at trial. A deposition can show that a person’s testimony is a lie at worst (and a mistake at best) or can take the place of a witness who is not in the courtroom.

The primary downside of depositions is that they are extremely costly. Costs are tied into time invested in determining who to depose, preparation and research for the actual deposition, possible rental of a place in which to take the deposition, fee for the court reporters, and the attorney fees for taking the deposition itself.

As previously stated, almost anyone is fair game to be deposed in a lawsuit, even if that person lacks any substantive or evidentiary knowledge - generally, the deposing party can depose whomever they wish (although there are some limited exceptions). There is no express limit on the number of depositions a party may take, but often attorneys will set an agreed-upon number, in some cases ten (federal limits a party to ten depositions), but more may be allowed - as always, the ideal number depends on the facts of the case, the strategy employed by the party’s attorneys, and an agreement between parties. The length of time a deposition might consume is not limited, although, as with the number of depositions, attorneys can agree on a limit. A common length is seven hours, the limit at the federal level, and no more than one day.

The location of the deposition is influenced by the person being deposed. If the deponent is a party or a non-party (a third person), a rough rule is that he or she can be deposed within 100 miles of his or her respective residence or place of employment. The court can modify this rule for the sake of convenience, which can be very helpful for busy businesses and business owners. Since one of the goals of discovery is to limit the need for a judge, the parties can also agree to any location they find suitable for a deposition.

Sometimes, a deposition may be used for the wrong reasons, such as embarrassment of a deponent or to specifically hurt the deponent financially. In those cases, a court can issue a protective order to protect the deponent from such inappropriate goals. The court also has power to punish, economically, a party engaged in such tactics. Contrarily, if a deponent is not being cooperative during the deposition, the deposing attorney can compel an answer from the deponent through a court order. The lesson here is to play by the rules and keep the judge out of discovery.

Now we arrive at strategy. While the attorney will handle the deposition tactics, such as whether she is trying to squeeze out a needed fact from the deponent that day, using the deposition evaluate the credibility of the deponent (in other words, is that person telling various versions of his story), or your attorney may suspect that the deponent that day will skip out on the trial and so she wants to preserve the deponent’s testimony (so she can use it later in trial) - this list is far from exhaustive. The possibilities are limited only to your attorney’s imagination and the facts of the case.

During questioning, you may be asked about documents or tangible things. Ask to see them, if possible, before answering any questions. You want to be sure you are clear about the question being asked and any documents or things relating to the question.

There are common “techniques” used during depositions about which your attorney will inform you. Formatting of questions is a common and effective technique, especially when combined with the pace of questioning (slower = rambling, faster = pressure). Question formats are also used at trial, so it is essential that you (as a party) understand them well. Because the goal of a deposition is information acquisition, lawyers often rely on “open-ended” questions - questions that give a deponent the ability to explain themselves as much as they’d like. You might recall my comment above that depositions allow deponents to prattle on and reveal far more information than the question required. Here is where that happens, especially with people that are eager to brag about their intellect or the gossip to which they are privy.

Another format is called a “leading question.” If you’ve ever watched a television show on lawyers, you’ve heard an attorney howl to the judge about leading questions. A leading question is one that suggests the answer to the person being asked, that answer usually being favorable to the person asking. As you can see, an attorney can exercise a great deal of control over a deponent with these questions, denying the deponent the ability to weasel out of an answer. While the power of leading questions appears great, the downside is that they don’t elicit much information (the answers can be as simple as “yes” or “no”) and the general rule is that they can only be used against adverse witnesses/deponents (”adverse” meaning witnesses/deponents that are not on your side).

“Full-circle” questions are those that confirm that the attorney has sufficiently probed a matter; they bring that topic “full-circle.” For example, in a workers compensation case, an attorney might ask a witness to the incident “do you remember anything else about what Jim (the injured) did before the accident that day?” While not as impressive as leading questions, people do like to be helpful and “full-circle” questions tease out information through the desire to help. This list of formats is far from exhaustive, but it gives you a taste of the tools an attorney may use during a deposition.

Taking the deposition. While each deposition is unique, the following is usually how it goes. The reporter will get the basic case info from the attorneys and prepare the stenography setup. Once he or she is ready, the witness will be sworn in under oath. The deposing attorney will give a basic set of instructions to the deponent, usually something similar to: don’t speak over anyone else so the court reporter can get everything down; the reporter cannot record non-verbal answers, so you must always answer vocally and clearly; and if you do not understand a question, do not answer until you do understand. Sometimes the lawyer defending the deposition will “preserve objections” before the questioning begins. Ask your lawyer in advance about this for individual clarification.

During the deposition, the witnesses attorney may object to some questions. The reason for objections may vary, but understand that the quarrel is between the attorneys. Disputes over these objections can become very heated and stressful, so it is essential that you remain calm and let the lawyers sort it out. As a deponent, you are generally obligated to answer the questions asked and there are few “safe harbors” for you to hide.

As you might have sensed by now, I’m trying to tackle a HUGE topic and boil some of it down for you. There is simply no way for me to pack into one post, or ten, the ins and outs of depositions.

On a parting note, I’d like to offer a few things for potential witnesses and deponents to consider:
- Breaks are important during depositions. Take them when you find yourself feeling depleted or easily agitated.
- Listen to the question being asked. take a second and mull it over. Truthful and accurate answers are important. This practice will keep you from rambling and thus giving more information than you were asked for. It may also require you to ask opposing counsel to clarify terms and meanings that are unclear.
- Short answers are best. If a simple “yes” or “no” will suffice, so be it.
- Do not think aloud. This is akin to rambling, which is bad.
- BREATHE! If you are not breathing, you will not feel well and risk making mistakes. Breathing will help control your temper and your brain will be happy with lots of oxygen. Consider avoiding liquids other than water.
- Finally, tell the truth. You will not be able to BS opposing counsel. These folks take depositions for a living and have seen it all.

Over the next few posts, I plan on breaking down one of the most expensive and often most stressful part of litigation: discovery. Specifically, I will focus on: (1) the purpose and strategy of discovery, (2) the “types” of discovery and when will they affect a party, (3) how a business can prepare and cope with discovery. As always, I’m not posting legal advice and you won’t see any case citations, legal tests, or statutes. My goal is to lay out a roadmap of discovery so a potential litigant can feel a bit more comfortable with the discovery process.

Strategy and Purpose of Wisconsin Discovery

Discovery is, on a basic level, the tool used by attorneys to locate evidence that has some bearing on a filed lawsuit. Both plaintiff and defendant have the right to request the other to reveal all types of information, ranging from tangible, physical things to a person’s memories and recollections. The body of information may be very small in volume (a box of papers) or the body of information may fill an entire warehouse (boxes piled to the ceiling) - as always, it just depends on the case. Further, each party’s requests are to be respected and observed, *ideally* without any judicial involvement, unless the parties have a disagreement they cannot settle independent of the judge - professionalism and negotiation skills of an attorney are very important to avoid irritating the judge.

Discovery can make people and businesses feel violated as opposing counsel sifts through one’s paperwork, email accounts, demands that you or your people answer questions (some of which make most people feel very uncomfortable and would never be asked in any other situation), and in some cases require those same people to submit to physical inspections or psychological evaluations. These experiences mask the true intent and goal of discovery, that being revelation of information that can substantiate (or undermine) a party’s claim - information that becomes trial evidence.

Other, more specific goals of discovery include capturing information from a perishable source or from a witness who might be unavailable should a trial be required, evaluating the nature and utility of potential witnesses in anticipation of trial, avoiding surprises during trial for either party, determining that facts thought to exist do not exist at all, and finding particulars that encourage settlement. The real strategy of discovery comes in the timing and achievement of these goals - who to depose and when, what documents should be requested and how do we ask for them, is it worth the trouble to inspect a piece of property or machinery and when should we do it.

In summary, discovery is not a tool of abuse (although some attorneys may use it that way), nor is it a fishing expedition. Rather, discovery is focused on revealing facts, specifically those facts that are: relevant to the claims/defenses of the parties, reasonably likely to be admitted at trial, and are not privileged (i.e. protected under Wisconsin law).

Types of Discovery

In the next few posts, I will go over the basic types of discovery: depositions, interrogatories, requests for admission, and inspections (of places, people, and things). The next topic: depositions.

As a follow-up to my post on cultural barriers to contract formation, the Small Business Times reported that Wisconsin officially topped a billion dollars of exports to China. Well done! Further, out of the top five nations to which exports are sent, three of those nations are non-english speaking - 3.8 billion dollars of exports in Wisconsin are affected by significant language and cultural barriers. Perhaps it is time for all of us Wisconsin business attorneys to buy some language software and diversify our tongues?

Sharmil McKee of the Small Business Blog by McKee Law Office reminds us business owners that the price of stamps is going up…again.

Perhaps this might be a catalyst for a business to reduce it’s physical mailings and move toward email and PDF’s as a cheaper and faster alternative?

I prefer and recommend email for a number of reasons, one of which is particularly relevant to litigation - that emails can preserve the who, what, when, where, why, and even how of communications between businesses and individuals. Such information can be incredibly important during discovery and early phases of a lawsuit. A litigant can show that s/he did send certain documents at a given time, or that things said were memorialized - these are great tools for counsel and encourage necessary prudence of tongue and act by businesses.

Another benefit to email usage is cost. You spend less on stamps, but you can also organize your incoming information without having to do much other than create folders on your computer (versus typing and printing a letter or telephone call).

Uncle Sam’s postal price increases could be seen as creating unintended incentives for more CYA-centered actions by businesses…

Having attended law school in Oklahoma and thus been exposed to the Texas Bar, I have to hand it to the Texas Young Lawyers Association. They offer several tools for the practitioner but the crowning jewel is the “Ten Minute Mentor” series. One has to watch the state-specific law aspects of any presentation, but these lectures are wonderful and incredibly useful. The speakers almost always come off as (1) knowledgeable, (2) professional, and (3) passionate about what they do as evidenced by the detail and concision with which they present their material. I recommend that any and all practitioners check the site out.

I participated in TYLA’s trial competition while in law school, which is cosponsored with the American College of Trial Lawyers. I was coached by an outstanding and accomplished attorney who taught me volumes about trial lawyering. I think TYLA has a good thing going and hope they continue to produce valuable tools for the profession.