In this episode, I speak with Daniel Sollecito, who has had a distinguished career in law, handling antitrust and commercial litigation.  We discuss preparing for litigation, document retention, and communications between the attorney and the client with litigation ongoing.

Here is a lightly-edited transcript of the episode:

Anthony Verna:
Welcome to the Law and Business podcast, Episode Four. I’m Anthony Verna, the Managing Partner at Verna Law, P.C. . You can reach me at anthony@vernalaw.com.  This episode was recorded outside at the request of my guest Daniel Sollecito, an attorney who’s had a very long and distinguished career. So, you will hear some outside noises and I hope that doesn’t affect the content of the episode. Thanks very much for listening and hope you enjoy.

Welcome to the Law and Business podcast. I’m Anthony Verna. I’m here with my good friend, Dan Sollecito. Dan, am I still allowed to call you an attorney-at-law?

Dan Sollecito:
Nope. Attorney-at-law, retired.

Anthony Verna:
Emeritus attorney-at-law. How does that sound?

Dan Sollecito:
Emeritus? Yes, I am definitely  Like Pope Benedict. I am an emeritus attorney-at-law.

Anthony Verna:
Dan has had a long career of litigation and heartache and heartburn.

Dan Sollecito:
I’ve had a legal career about 43 years of which every single day was spent in litigation. I was not a transactional lawyer. I didn’t do wills. I didn’t do real estate closings. I did only lawsuits. I told my clients, unless it begins with a summons and complaint, it has nothing to do with me.

Anthony Verna:
So let’s start here. Because a lot of businesses are sued every day. So, when a business receives that summons and complaint and that business is now a defendant in a lawsuit, what are some steps that you think that business should take besides picking up the phone and calling the lawyer immediately?

Dan Sollecito:
I would think, first of all, we would’ve backtrack a little. Generally, commercial disputes between businesses start with an exchange of letters. You were supposed to ship me a hundred sacks of flour. I only got ninety. Where was the other ten?

Anthony Verna:
Or sometimes with my clients, we think you’re infringing upon our client’s trademark. Please tell us how much of this you’ve sold.

Dan Sollecito:
Yep. So at that stage, a client of mine who was a small business, and I represented many small businesses, I would expect to call me on the phone. If you get a letter which says, unless we can work this out, I’m going to have to sue you. That is a litigation letter and that should immediately be turned over to an attorney. Now if we go into the next step… The next step your opponent gets dissatisfied with your answer.

Now their attorney writes to you. That’s called an attorney demand letter. That to me, if you are businessman, and a good businessman that absolutely requires you, like a forcing bid in bridge, you have to then call your attorney. Once you get that attorney demand letter, if you have a regular attorney who does your litigation or who does all your legal work, he is going to expect that if you get a lawyers letter from  another party, you will contact him immediately. Because now in effect, the clock is running, tape is running. Now we’re making legal history. So, once you get the letter from your opponent and it looks like a threat of litigation, you’re infringing on copyright or a trademark or you know, you sent us the wrong goods or whatever. If you’re a head’s up businessman, you might call your lawyer at that point. That’s not a bad idea. And then he can help you draft your non-lawyer answer to that to try to keep it out of litigation, you know, but once you get the letter from the other side’s lawyer, then you have to be crazy not to contact your lawyer.

Anthony Verna:
Well, of course, but I also think this goes to another area that you and I have experience in, which is that if an attorney is involved for the other side, the two attorneys expect to act professionally to each other before any hard feelings actually set in.

Dan Sollecito:
My experience, over some 6,000 matters, about 300 Navy criminal when I was in JAG and the rest of them civil, mostly commercial disputes, antitrust employment, contract construction. I’ve done just about every kind of civil litigation there is except some specialized areas like tax and matrimonial, which I don’t do.  I forgot where we were going. .

Anthony Verna:
That attorneys generally like to act professional.

Dan Sollecito:
I would say of those matters, let’s say about 5,000 civil matters, I have been on the most excellent terms with my opponents. When we fight, we fight because that’s what we’re paid to do. Otherwise, we’re cordial to each other. We are professional litigators. You and your corporate opponents are businessmen who have gotten angry at each other. You get angry. We don’t get angry. Your object is to achieve justice or vengeance or whatever it is. Our object is to resolve the matter as quickly as possible. You know, with at least expense to our client and as good a result as we can.

Anthony Verna:
Yeah. So from a philosophical standpoint, if it’s going to cost x to settle a matter, even if you think that it’s not the most wonderful settlement, if it’s gonna cost 20 x or 40 x or a hundred x to get to the end of litigation, cause  that has to be the attorney’s first job is to say it’s going to cost you a hundred x.

Dan Sollecito:
I have, since I was in private practice and even when I worked for firms, I have told clients who told me money’s no object, I want to vindicate my rights, I’m angry at this person. I said as an attorney, if I’m being on hours as opposed to a contingent fee, I should be willing to do anything you want me to do as long as you’re going to pay me. But I get no professional satisfaction out of spending $20,000 to recover $5,000. To me, that’s an idiot’s job. I would feel like a bad lawyer. And in fact, in my private practice, I have told clients to leave when they told me no, they didn’t care if I spent $20,000 to recover the $5,000. I said, well, find some other fool who’s willing to have that kind of reputation. I don’t think that it does my reputation or even my sense of professional pride any good to spend more on the lawsuit than the client can possibly recover and I won’t and I don’t think any good barrister that is an attorney who specializes only in litigation would want to do that because it ruins your reputation.

Don’t forget that even in New York, which is the biggest trial jurisdiction in the country, the trial bar is not that large. People know each other and you get a reputation. I do collections for a court reporter who’s based on Long Island and she says that her payments, short of litigation, short of even threatening litigation have improved because of the clients there are also trial lawyers and the word gets around. They know that Mrs. X has an attorney and that he will sue them if they don’t pay and so they pay.

Anthony Verna:
And lawyers don’t like to be sued by other lawyers. That’s for sure.

Dan Sollecito:
And I’ve told clients … I remember a major matter involving international trade and I told the clients, well, you may be willing to look a fool, but this is New York county and I practice here and I’m not willing to look a fool so I’m not going to spend $10,000 of your money over a $2,000 claim. Because then I’ll look like an idiot. And I have other cases here. This may be your only case you ever take to trial, but I’m in court every day.

Anthony Verna:
Apart from an economic viewpoint when you know the party is sued. So the party is now a defendant in this lawsuit, is there specific advice maybe over documentation that you would give?

Dan Sollecito:
Yes, absolutely. And in federal antitrust cases, where I began my practice some  40 years ago at the old firm of Donovan, Leesha, Newton and Irvine, which doesn’t exist anymore.

Anthony Verna:
Last name, last name, last name and last name.

Speaker 2:
No, Wild Bill Donovan. Well, they were famous people, of course, General Wild Bill Donovan who founded the OSS and who led the Fighting 69th in the First World War. In an antitrust case, you get a federal court order saying you can’t destroy any documents. But I tell you, as a lawyer, that if you tell a judge that as soon as you got the complaint, you went out and trashed some files because you thought they might bear badly on your case, it will be held seriously against you. In a federal case, like an antitrust case, it is a felony to destroy documents once a case starts, but you should regard everything that you have that bears on a dispute as something that has to be saved, once you get an employer’s letter from the other side.

Anthony Verna:
When sometimes during discovery and for those who don’t know, discovery is gathering evidence before a trial begins and both sides can ask. Sometimes the other side asks, please give us your client’s document retention policy. And I would say most businesses just don’t have a document retention policy.

Dan Sollecito:
It depends, Anthony, on the size of the business. Most Fortune 500 companies do have a document retention policy. Most local candy stores, even a local business that makes macaroni or a big commercial bakery, they don’t have a document retention policy.

Anthony Verna:
I mean there are even tech companies that don’t have documentation retention policies.

Dan Sollecito:
But a major cooperation with public stock, publicly traded stock almost always has a document retention policy. What you’re thinking are new business posts. What is a document retention policy? My clients at a certain large communications company used to say shouldn’t it be called the document destruction policy. It is a public statement that you put in your records that your policy is that all documents will be retained for at least five years. What it is there for is to dispel the notion that you went out and destroyed paper because you were afraid of a dispute.

So, what you’re telling the world is we keep everything for five years. At the end of five years, we get rid of everything unless we have an, and the document retention policy should say this, unless there is a pending lawsuit or we have some other document retention order, all commercial documents that are not tax related or whatever your other exceptions are, obviously you’re not going to destroy your trade secret documents. All general run of the mill telephone bills, whatever, whatever. At the end of five years we’ve destroyed them all. And why is that important? It’s important so that you can negate the claim that you went out and found everything having to do with this dispute and burned it before the court could get their hands on it.

Anthony Verna:
How about efforts and finding documents related to a particular litigation? Like quite often even smaller companies just don’t care where the contract was stored or maybe they have trouble getting it out of storage, for whatever reason.

Dan Sollecito:
If you expect to successfully prosecute or defend the litigation, then you better know where all the relevant papers otherwise settled because you should not go near court. If this is a contract dispute, and you don’t know where the contracts are, you’re not really giving the judge a very good impression. And in most jurisdictions now, even in New York state, you have the same judge through litigation, through discovery as Anthony was talking about discovery until trial. And you get a reputation with that judge. If he thinks you’re some slipshod company and you don’t know where your papers are, anything that affects your credibility with him. You may wish to try the case to him rather than to a jury. Most of my civil cases are tried to the judge, but you can’t do that if you’ve already made yourself a reputation that you’re a slapdash company and don’t know your papers are, and don’t keep track of things.

So, you know, you’ve got a plan to settle everything early if that’s the way you are. Or basically the best advice is don’t do that.  Keep good files, know where your files are, have a definite policy as to how long you retain things and follow it. If you have a document retention policy and they come into discovery and they find stuff that’s way beyond what was the discovery date, then they’re going to say to the judge, this is no policy. This is like a meaningless document cause they have all kinds of things of all ages except anything having to do with my lawsuit.

Anthony Verna:
Really the best sentence everything that we just talked about is that being successful in court has to do a lot with what’s done way before a company is ever in court.

Dan Sollecito:
This is why, and I know that small businessmen can’t afford this, but this is why major companies have a legal department and have an in-house litigation department, which I did that work for 10 years in a company which I think you might know the name of …

Anthony Verna:
And you certainly don’t have to mention it.

Dan Sollecito:
And there were some 60 of us and all over the country and we had divisions and they all had lawyers because you want to catch this early on, you want to have good document policies so there aren’t mistakes. It brought up a case in that circumstance, which I think is good advice generally for people.

My clients came to me with a very bad document for the purposes of defending an antitrust case in a Fortune 10 company. And they said, well, what should we do about this? I said, well, first thing you’re not going to do is tell people to destroy that document. Because we have two or three pending antitrust cases and several overlapping retention artists plus in a company with more than a thousand employees, there are copies of it every place. Anthony has told me as my tech expert that even the Xerox machine can have its brain washed and recovered documents.

Anthony Verna:
Well sure. Some modern, many modern photocopiers keep a record electronically on their hard drives. So as for easy recovery.

Dan Sollecito:
So, my advice to my client was the person who wrote the document was a, let’s say, a second level employee, and my client is a third level employee. I said you get your fourth level employee to write a letter saying the second level employee was wrong and that that is not the company’s policy. And you attach a copy of that overriding document to every copy in the files of the existing, what you do not do is say find all those memos and destroy them cause you’ll never find them all. And then the government will find the memo saying this. This actually happened years ago in a patent related antitrust case. In the 1930s, an old partner of mine at Donovan Leisure told me this story and he was actually there. A document was marked by some non-lawyer executive: Burn all copies, wouldn’t the Department of Justice love to get their hands on this, with the annotation on it. So do not create bad documents and if you create them, disavow them formally.

There’s a way to do everything. The way is not to go after the company and find every copy because you’ll never get every copy. Some idiot will have taken one home or use it to wrap his lunch. It’ll always turn up. So, you may assume that the government is going to get a copy of it and with that copy should be a copy saying this wasn’t company policy. This was a low-level person who made a mistake.

Anthony Verna:
And even in today’s world where every single email is saved for five years in many companies, and then for every piece of communication, every thought is saved and then produced as a document in litigation, it raises the multitudes.

Dan Sollecito:
This recent I don’t know what to describe it as

Anthony Verna:
Revolution?

Dan Sollecito:
No kerfuffle. When the IRS charitable exemption area was it very instructive for businessmen because these emails were all over the place and not only were the emails an issue or what they may or may not have said, but the fact that when they were asked for by Congress, the IRS said, we can’t find them or we don’t know if we have them. That is not an acceptable answer. Not to Congress and not to a federal judge or to a state judge in a commercial matter. You’re a business. You have, let’s say a hundred employees that you’re an investment of several hundred thousand dollars. You can’t tell the judge, oh, well, we just don’t know what we did with it. You know, you’ve just going to ruin your reputation for the rest of the lawsuit.

Anthony Verna:
I’ll tell you what I find in intellectual property matters a lot of times when a trademark is conceived, a lot of businesses don’t hire a marketing company or they don’t really have meetings about it. So, you’re not finding a lot of documents on why or how. And sometimes it’s just up to somebody’s memory to say why and how a particular mark was chosen or why a particular business decision was made. How should a business handle that particular instance in litigation where documents just aren’t created?

Dan Sollecito:
My wife, of 30 years or so, is an epidemiologist and nurse who does infectious disease control policy for hospitals. She’s now on her third hospital, Christ Hospital in Jersey City. And she always says document, document, document because the the nursing field and the medical field and the hospital field are constantly subject to medical malpractice claims. She’s also subject to claims from the Department of Health and from the Centers for Disease Control as to tracking infectious diseases. The answer is every important fact. That’s why you have a medical record. That’s why my wife is always writing policies. Don’t we have a policy, if the sponges dirty, it’s thrown away. That is so that you don’t stand there and a regulator says to you, “Well, what do you do with all these dirty pieces of gauze?” I don’t know.. That’s not an acceptable way. The answer is on page 21 you’ll see of our manual it says all contaminated gauze is to be turned over to a medical supply destruction company.

There are special medical waste disposal companies that do that. But, I agree with my wife 100%. She would’ve made a good lawyer. Document, document, document, especially in your field of copyright and trademark where the issue is. How long ago did you adopt this mark? How long ago did you have this work?

Anthony Verna:
Right. You know, maybe a business needs to set up a board meeting or upper management meeting and create notes. And so, we’re considering trademark brand name one, brand name two, brand name three. And here are the pros and the cons of each of them and here’s what a marketing company, instead of just naming it, I would go through a process.

Dan Sollecito:
I was doing some research, you may remember, Anthony, about three or four years ago on a historical topic and I sent Anthony an outline of a proposed book. It never was written so it’s meaningless, but I didn’t send it to him for no reason. I wanted to be on record that this concept of this particular book about this particular person was something that I was thinking about even when I was only thinking about it. Because then when somebody else came who wrote the book two months after me, I want to say, well, no, here’s the letter to my copyright lawyer saying in 1999 I was thinking about doing a book like this way.

Anthony Verna:
I wasn’t in law school in 1999 or whatever.

Dan Sollecito:
So when you were doing something of value like creating a mark or some copyrightable work of art or literature, then make a record as early as possible. Formal record. This is my outline for a book about such and such. This is a mark that we plan to use to put on jeans or whatever carts, but the sooner you have a document with the date on it that the stronger your position as against somebody who started it two years later.
Anthony Verna:
And then for some of these more complex legal decisions, whether it’s what’s in a contract or an IP decision, having an opinion letter from an attorney helps us actually as well. Correct?

Dan Sollecito:
Oh, absolutely. Absolutely. We had a presentation at a Bar Association meeting last night on commercial leasing and that fellow was very good. But I said to him, I hope you occasionally make mistakes because litigators is live on the mistakes of transactional lawyers.

That was a joke, but generally people who have a lawyer to write the transaction don’t involve, don’t get involved in litigation. It happens. Everybody has mistakes in their disputes, but there’s far more litigation where businessmen on both have decided they’re going to write their own contracts. They’re going to do their own a trademark application that you know, that way I don’t really, I didn’t speak English. I don’t need a lawyer. Oh, those people are a Godsend to litigators  like me because their transactions always unwind. Why do lawyers use the same will form that there’s been since England 500 years ago? Because every term in that will has been defined by a court. Yes, you can write your own common sense will, make it all up using good, honest English, simple English. Every word in that will could lead to a lawsuit that you could spend $10,000 on, but you use the old form.

We’ve already had all those lawsuits. Everybody knows what every word in that will means as the specific meaning defined by courts. That’s why lawyers use what’s called boiler plate. And I don’t know if Anthony has ever previously used that term with you, but boiler plate is formal language, which means a specific thing which has usually been interpreted by many lawsuits and you use it because everybody on both sides knows what that word, those words mean. If you go off on your own, writing your own document, oh I don’t need a lawyer, I can speak English, I’ll write whatever I want to write. Well that’s fine and dandy, but every word you write is going to be subject to dispute cause it’s not the traditional language. As unintellectual as it may seem, you’re much better off with that boiler plate because everybody on both sides of the transaction knows what it means. The real estate lawyers to this day, their closing documents are literally exactly the same in every commercial lease and every residential lease, they’re different between those two, but they’re the same language because we know what that language means.

Anthony Verna:
And you and I are sitting in New Jersey right now. In New Jersey, real estate is a very, I don’t want to say a very niche practice, but certainly when it comes to those forms, it feels radically different than New York real estate. And, of course, the five boroughs of New York City feel radically different than the rest of New York state when it comes to real estate, as well.

Dan Sollecito:
Well, there are two or three areas of the law which are uniquely local. One is real estate, one is wills, trusts and estates, probate, and the other is matrimonial and family law. Those are not areas where the states are similar. There are areas in which every state is different. Some states like Louisiana and California are very different in the terms in my area, general civil procedure, for many years and New York was very different than most of the rest of the country. But as to how things were done in the courts of the state of New York, between New York citizens is nothing; the federal government has nothing to say about that. And in these areas, and every business gets into leasing and buying real estate or renting a building. And all that. Those are areas where you not only need a lawyer, but you need a lawyer from the jurisdiction in which you are dealing.

Dan Sollecito:
If you’re a big corporation and you operate in ten states and you have a general counsel in New York, his advice isn’t worth a damn on leasing property in Delaware. And if he’s a good lawyer, he’s going to tell you that you have to get local Delaware Council to at least it’s certainly to buy. Buying real estate is something that is so local. And this was true in England, too. This is law that goes back to the Middle Ages and every state is different and you know, especially if you are in an area which is generally federally regulated like trademark and copyright, don’t get the impression that there are some United States law as to everything. If it doesn’t affect your business, but it affects every person: your will, your property, things you want to leave to your children and things you want held in trust.

That is very local law. This happened to a client of mine. If you die in the state of New Jersey and you have property in the state of South Carolina, a separate probate is open in South Carolina where that property is passed under the will and in New Jersey, but subject to South Carolina law because each state controls the real estate in their states, no matter who owns it, The Pope could own it or the or the King of Prussia. As far as the law concerned, New Jersey decides where in New Jersey real estate goes and those areas, real estate trusts in the states and family and matrimonial law especially. But even as to civil procedure and contract law, each state has their own little special rules and regulations in most areas. A general lawyer and a company level. And especially companies that are in a particular industry, their house counsel will know the law as to several of the states they operate, even though not lawyers in that state. But when you get into real estate, and I think, like I said, every business is in somehow. I mean, if you rent one room, you’re in real estate. That is an area where you need a lawyer who is versed in the law of the place where you’re operating.

Anthony Verna:
You know, it’s funny that you mentioned this, you know, specific specificities because I was just asked about making a referral to a North Carolina real estate firm and we have a colleague in Asheville, North Carolina, I mean in Chapel Hill, North Carolina. And this particular matter is in Asheville. And the lawyer in Chapel Hill said, “Well, I can do it, but it’s three hours away from me. And there might be some particular, you know, some particularities that just because it’s in a different part of the state, we might not be familiar with their custom, you know, even though it’s the same state.” in the same way.

Dan Sollecito:
It’s interesting. I had the same experience in South Carolina. I had a client whose mother was from a place down near Charleston in the flats in South Carolina. They died, she’d become a New Jersey resident. There was a dispute as to whether South Carolina law applied or whatever. I was going to hire counsel and I talked to my cousin who lives in Simpsonville, which is up in the mountains very heavily northern now area of businesses and whatnot. I talked to her lawyer and he told me the same thing that Anthony just told you. I could do it, but aren’t you better off to go down to that county, which is only you got 6,000 people and five lawyers, aren’t you better to get one of those lawyers? And that’s exactly what we did, and we ultimately prevailed in our case.

Anthony Verna:
Right. So, you know, so if a business is getting sued, I think, just to kind of wrap up some ideas here. One, obviously hopefully the proper procedures are put in place before litigation ever begins.

Dan Sollecito:
Standard procedures.

Anthony Verna:
Right. And, wild number two, speaking to your business attorney always make sense and having that person intervene and represent the business makes sense. But that goes with making sure the proper procedures are in place anyway. And then certainly number three is making sure that all documents relevant to that proceeding are found and identified. But, of course, that still relates to having the proper procedures in place way before litigation ever begins.

Dan Sollecito:
And let’s try to remember what we said at the very beginning. The final red flag for you as a businessman, when you get a letter from the opposition’s lawyer saying, Mr. X tried to talk to you, you couldn’t work this out. Now I’m telling you, unless we can work out something, I’m going to take you. That’s a litigation letter, a lawyer’s demand letter. That is the last chance. Then you must contact your lawyer because your lawyer is entitled to know what’s going on from the beginning. And as far as the lawsuit’s concerned, that is that lawyer’s demand letter. That is the beginning of litigation, even though you’re not in the courts yet at that point, now it’s time to call your lawyer or if you don’t have one, find one.

Anthony Verna:
Dan, thanks very much for coming.

Dan Sollecito:
I really enjoyed it.

Anthony Verna:
Attorney at law emeritus.
Speaker 2:
Emeritus. You got it. I am attorney at law retired after 43 years and I hope that I’ve been of some help to your clients.

Anthony Verna:
All right, Dan, thanks very much.