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At the Podium: Send Button Doesn't Carry Guarantee

The Recorder

If an email is sent through the ether and nobody's there to read it, can it give rise to a contract claim?

The online version of an age-old legal question — how to prove that a written communication was actually received and read by its intended target — was at the center of a $5 million fight between two appellate heavyweights at the U.S. Court of Appeals for the Ninth Circuit this past week.

Akin Gump Strauss Hauer & Feld partner Rex Heinke argued that a machine company's product guarantee was binding on its corporate parent because the president of the corporate parent had been cc'd on an email promising the guarantee and didn't raise any objection. Keker & Van Nest partner Steven Hirsch argued that just because the email was sent to the company president doesn't mean he read it, let alone ratified it.

Heinke is a dignified dean of California's appellate bar while Hirsch brings a somewhat more scrappy but equally effective style. Judges Jay Bybee and Ferdinand Fernandez grilled each of them hard, but sounded more likely to rule against Heinke in Paramount Farms v. Ventilex B.V., 11-15518. "There's nothing that verifies, swears, et cetera that the email actually went to" the president, Fernandez told Heinke.

Paramount, Heinke's client, is a Central Valley nut farmer that bought a $300,000 almond pasteurizing machine made by Ventilex B.V. of the Netherlands. The company's American sales unit, Ventilex U.S.A., guaranteed that the machine would soon be approved by the FDA, but it never was, rendering the equipment useless. Paramount sued Ventilex U.S.A. and obtained a $5 million arbitration award, but Ventilex U.S.A. declared bankruptcy. Paramount then brought a federal action against Ventilex B.V., arguing that Ventilex U.S.A. had been acting as its ostensible agent. On the surface it looked like a strong case. Ventilex U.S.A. had copied four officers of Ventilex B.V., including company President Henk Dijkman, on the email that guaranteed FDA approval.

Hirsch's advocacy had more of an edge than Heinke's. His brief characterized Paramount as driven by greed, unwilling to settle for the reasonable $1 million it will collect from Ventilex U.S.A.'s bankruptcy reorganization plan.

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Steve Hirsch helps clients reframe and develop their cases for success in the federal and state appellate courts. That process can begin long before any appeal is filed, with dispositive trial-court motions and significant motions in limine, or during the post-trial motion phase, when issues are being teed up for appeal. Mr. Hirsch’s core practice beliefs are that writing matters, that briefs should tell a compelling story, and that framing the issue is critical to success on appeal. He has been recognized by legal-writing expert Bryan Garner as one of the best brief writers in the United States, and has been chosen by the U.S. Court of Appeals for the Ninth Circuit to teach appellate brief-writing and oral argument.