Earlier this week, the ABA adopted a resolution encouraging all private and public sector organizations, including law firms, to adopt appropriate cyber security programs. An accompanying report cites the growing sophistication and frequency of cyber crimes. It notes, in particular, the importance of law firms to be proactive in protecting sensitive client information. According to the report, as many as 80 law firms were hacked in 2011 alone. The ABA’s report cites the ethical obligations of attorneys both to understand the risks of modern technology and to adequately protect client information. 


DRI is getting out in front of cyber risk issues. It is launching its first ever Data Breach and Privacy Law Seminar, September 11–12, at the Conrad Chicago. The seminar will address cyber risks, theories of liability for data breaches, preparing in-house response plans, insurance coverage for cyber crime, and other issues relating to data security. The seminar brochure provides registration details. Anyone involved in law firm or corporate risk management and any lawyer advising or representing clients on these issues should attend.

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“Julian Miller began the evening of October 24, 2003 at his mother’s wedding reception, and ended it in the back of a police cruiser with a broken jaw,” wrote Judge Rovner Tuesday for the Seventh Circuit, reversing in part the summary judgment decision below that had favored two officers. The decision in Miller v. Gonzalez, No. 11-2906, 2014 WL 3824318 (7th Cir. Aug. 5, 2014), can be found at the Seventh Circuit’s web site here

In Miller, while two officers were investigating a call about a stabbing, the plaintiff ran from them and was chased into a fenced-in yard. One officer jumped into the yard first, ordering the plaintiff to the ground with his gun drawn, and then the other officer jumped the fence and landed on the plaintiff’s head, breaking his jaw. The Seventh Circuit affirmed summary judgment for the first officer—who had been sued for not intervening to prevent the other officer from hurting the plaintiff—because he did not have a realistic opportunity to intervene.

But it reversed summary judgment for the second officer, finding a rational jury could determine that he deliberately inflicted the blow that broke the plaintiff’s jaw and that it would not be objectively reasonable to break the plaintiff’s jaw once he was subdued. It noted that the plaintiff claimed that he was motionless for at least ten seconds on his stomach, at gunpoint, with his arms outstretched, in an area illuminated by lighting visible to the second officer, before the second officer jumped the fence and landed on his jaw. The Seventh Circuit also noted that the second officer’s affidavit testimony about jumping the fence used different wording than his police report. And it noted that when the plaintiff told the officer, “You ain’t have to break my jaw,” the officer told him, “I told you not to run.” Deciding what inference to draw, wrote the Seventh Circuit, is the task of a fact finder.

In a brief dissent, Judge Cudahy stated that he would affirm summary judgment for both officers because the evidence presented by the plaintiff did not create a plausible story.

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A Massachusetts jury recently awarded a $14 million wrongful death verdict against a nursing home. Dollar amount aside, this verdict is staggering because it includes a $12.5 million punitive damages award, meaning the jury was trying to punish the facility for its alleged poor care. The facility admitted it failed to administer proper care to the decedent resident, but it rejected claims that the neglect led to the resident’s death.

Was there a way for the facility to avoid this trial, or at least avoid being slammed with a judgement that included punitive damages? Were documents available that may have substantiated the facility’s assertion that its negligence did not lead to the resident’s death? Perhaps early case resolution techniques could have been used to resolve this matter at the outset? This year’s DRI Nursing Home/ALF Litigation Seminar offers sessions that address these questions and more. Timothy Cesar, Brookdale Senior Living, Inc., and attorney Bradley Kelly will lead “Putting the ‘Ending’ in Defending Litigation and discuss how both sides to a dispute can best utilize early case resolution to their advantage. Similarly, during “Ancillary Evidence May Be the Key to a Successful Defense,” Tracey Maw, RN, MSN, will discuss how information collected by a facility beyond a resident’s formal chart may be harnessed to benefit a facility in litigation.

The 2014 Nursing Home/ALF Litigation Seminar will be held September 18–19, 2014, at the Swissôtel Chicago. Register today.

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We Want To Pump, Your Driver Health Up!

Posted on August 7, 2014 02:42 by M. Garner Berry


I’m not a health nut. But I am a pretty fit guy and do some form of exercise 3-5 days a week. However, I love to eat awesome food and the most awesome foods I’ve ever come across usually aren’t the most nutritious for you. 

But I know that to enjoy some meals like that every now and then and stay healthy for my family, I have to exercise and stay away from too many bad habits. As a result, I feel energized on a daily basis and am able to deal with the stresses of life we all face.

Transport Topics reported this past January on the CDC release of a survey that found 70% of longhaul truck drivers obese, 50% smoke and 14% have diabetes. The obesity and smoking alone was more than twice the rate of the general population. The study also found that 15% of the drivers surveyed showed some signs of sleep apnea, while 59% had some respiratory disturbance. And 34% of drivers admitted to nodding off or falling asleep while driving and 7% admitting to being drowsy every day.

Some within trucking industry advocate groups question whether driver health and fitness is really a safety issue that FMCSA should be concerning itself with. Rob Abbott with ATA stated “this very question played out in the hours-of-service rulemaking when the agency used presumed driver health benefits, not substantial safety benefits, to justify the rule change.”

Personally, I completely disagree. AND LET ME BE CLEAR…I do not agree that the HOS reg needed to be changed to begin with and think the FMCSA based the change on unreliable science. In my humble opinion, driver fatigue is not an hours-worked problem or even a problem of whether drivers are getting enough sleep. I believe that the majority of fatigue is resulting from overall driver health. Sure adequate sleep is important to not falling asleep at the wheel. But that is a drop in the bucket to the overall fatigue problem that is going on if you ask me.

I always love when someone I haven’t seen in a while tells me “you look good” because I get to respond with the wisecrack of “well I feel good!” But frankly it’s true. When you take care of yourself, even with minimal exercise and nominally healthy eating, you will feel better.

Many companies are fighting the driver health problem too. This year, Celadon, Con-way and Prime Inc. were recognized for their efforts in improving the health of their drivers by offering health and diet counseling and exercise facilities to their drivers. The companies have realized that keeping drivers healthy makes the drivers safer operators. And while not recognized, Melton Truck Lines is right there with them in fighting this fight. While these companies have no reason to know this, I have been following and keeping up with what they are doing for their drivers. I believe in being healthy and keeping your body a well-oiled machine. And I admire what these companies are striving for.

My Thoughts:
Typically, sleep apnea, or even just poor sleep generally, is a result of poor health and obesity. Not always, but for the most part it is the root cause. And when you’re unhealthy and suffer from sleep disturbance, well, you don’t sleep well and aren’t rested.

FMCSA has stated that a rulemaking effort on obstructive sleep apnea may be in the cards for 2014 or 2015. I don’t know what will happen or even what should happen. I admit this is a hairy issue and I am not a fan of increased regulation. But I am a fan of safety and defending safe companies and drivers.

With recent changes to med certification, companies taking steps to improve driver health, and accidents involving driver fatigue, it seems to me that we may have a perfect storm in the making to see some sort of extensive driver health regulations in the near future.

What do you think?

This blog was originally posted on August 6 on Loaded Up and Trucking. Click here to read the original entry. 

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Last month, the Philadelphia Bar Association Professional Guidance Committee issued Opinion 2014-6, which served as an important reminder that client names cannot be shared with third parties – even third-party payors – without the client’s consent.  The inquiring attorney had been paid a flat monthly retainer by a union to provide certain legal services to union members. When the union decided to terminate its arrangement with the inquiring attorney, it asked the attorney to provide a list of all union members who were current clients, ostensibly to notify them that legal services would be provided through another law firm going forward.

Notably, the inquiring attorney’s contract with the union did not require the attorney to provide the identity of union members or their families who were utilizing his or her legal services. Moreover, a union-issued pamphlet stated that the attorney providing legal services would have an attorney-client relationship with the member or dependent receiving legal services and stated that the attorney “shall maintain the confidentiality of the attorney-client relationship in accordance with the applicable professional standards.”

Opinion 2014-6 began by explaining the difference between privileged information (analyzed under the attorney-client privilege) and confidential information (analyzed under the ethical doctrine of confidentiality).  Whereas client names typically are not considered privileged information, they are confidential information that cannot ethically be shared with third parties unless allowed by Rule 1.6 (of Pennsylvania’s version of the Model Rules of Professional Conduct).

The Opinion noted that Rule 1.6 contains no exception allowing the attorney to provide a list of current clients to the union, even though the union was paying the lawyer to provide legal services to them. The Committee determined that the union’s desire to notify its members of the law firm change did not qualify as an implied authorization necessary to carry out the representation because all union members had already been notified by the union of the law firm change.

The Committee found additional support in Rule 1.8(f), regarding conflicts of interest with third-party payors, and in a union-issued pamphlet.  The Committee explained that Rule 1.8(f) requires attorneys who are paid by third parties to maintain the confidentiality of information protected by Rule 1.6.  Considering the requirements of Rule 1.8(f) and the union pamphlet language requiring attorneys to maintain client confidentiality, the Committee concluded that the requested disclosure of client names was impermissible.

The Committee provided some sage advice at the close of the Opinion, recommending that attorneys accepting payment from third parties should explain to their clients: (1) what information the attorney is required to disclose (and to whom) in exchange for the third party paying for legal services; (2) that the client has the right to allow, limit, or prohibit the attorney from providing otherwise confidential information to the third-party payor; and (3) that limiting or prohibiting the attorney from sharing confidential information with the third-party payor could result in the third party refusing to pay and the client being responsible for legal fees.  The Committee also advised that the attorney confirm the client’s informed consent on these issues in writing to avoid any confusion.  Good advice.

Russell Yurk is an AV-rated attorney with Jennings, Haug & Cunningham, LLP in Phoenix, Arizona. His practice focuses on professional liability, lawyer discipline, and complex civil litigation. Mr. Yurk serves as the Chair of DRI’s Lawyers' Professionalism and Ethics Committee and is an active member of the State Bar of Arizona’s Committee on the Rules of Professional Conduct and the Arizona Supreme Court’s Judicial Ethics Advisory Committee. He has spoken at more than 50 seminars on professional conduct and ethics and, in his spare time, he works as a replay official with the National Football League.  Mr. Yurk can be reached at (602) 234-7819 or rry@jhc-law.com. The views expressed herein are his own.


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The V-8 Moment with Regard to Insurance

Posted on August 5, 2014 04:36 by Steve Crislip

Wow, I should have had professional liability coverage.  I remain amazed at how many lawyers forego such coverage. I do not understand that rationale since they would never risk their assets with an uninsured car or house.  Yet, they think this cost of doing business is too high or it somehow is not needed.

Even a totally bogus claim costs real money to defend.  It takes time and work to get these dismissed, with no return of the costs. Lawyers always seem surprised at the legal costs for such work when they send out similar bills each day.  Then if there is a meritorious claim or even a colorable claim, coverage is very much needed.

When I last looked only one state required legal malpractice coverage as a condition of licensing.  Many states annually require you to disclose whether or not you have such coverage for consumer knowledge. I wonder how many clients ever really check that, or if they even care.  If you err in their case, they will sue you regardless. Do not think they will not, just because you have no insurance.  You certainly do not want to explain to family members that they now need to take the bus, since your cars were attached to pay a malpractice judgment.  Just treat this like a business expense and get coverage, and get the right coverage.

You should shop for coverage with brokers and agents as well as Bar groups.  Be totally forthcoming in any applications so there is no reason for any carrier to later deny coverage. Price varies with the amount of risk you are willing to take by way of the deductible.  Sometimes that is just cost pricing with lower annual premiums for higher retention levels by you. Sometimes in order to get big policy limits for some specialty work, you are required to have a big deductible.  Bigger firms are used to that, but smaller firms must always be mindful of the amount of risk they can absorb and how much they can promptly pay for a defense.  Usually the deductibles are for both losses and for the defense of the claim.

At one time, professional liability policies were like your auto policy — occurrence based.  Were you insured when you had the wreck or act of malpractice, or not?  By the 1970’s, that type of coverage disappeared and all are usually claims-made, eliminating the open-ended coverage concerns.  So, now a lawyer needs to be covered when a claim is made and must therefore avoid any gaps in coverage.

Since claims can arise well after the act or occurrence, prior acts coverage was needed to cover such matters forward when changing carriers or policies.  A tail (extended reporting endorsement) or an endorsement for prior acts must be considered carefully when charging firms.  Someone either closing a firm or making a lateral move needs to consider this carefully.  See, “A Primer on Prior Acts Coverage,” Mark Bassingthwrighte, ALPS 411, May 27, 2014.

For example, working in a mid-size regional firm, it made no sense to take in a lateral lawyer and provide them with prior acts coverage under the firm’s policy.  There had been no quality control by the firm and there were totally unknown risks involved with the lateral’s prior work.  With a large deductible, it was just bad business to assume that liability.  Accordingly, all laterals were told to look to their prior carriers or firms for coverage up to the day that they just started at our new firm.  Going forward they were covered, even when they left, as long as our firm was viable and still covered.  A tail may be needed by them from their prior work, but if they were likewise leaving a viable ongoing firm with good coverage, maybe nothing was needed.

Complicated to some degree, but it is just a part of doing business as a lawyer.  You need certain things to practice and this certainly is one of them.  Just like paying the rent on the office, paying for the coverage in a timely manner, and getting the right coverage is kind of important.  Don’t be the person who thinks they will not be sued by their clients. 

Be advised that most are loss and claim deductibles for any expended fees and costs, as well as claims payouts.  Also, it is customary for you to have to pay your full deductible before any carrier pays anything.  So pick a deductible you can afford and then escrow the funds for it as soon as a claim surfaces.  By the way, give notice of claims promptly, again to avoid coverage issues.  See ALPS 411, Claims-Made Reporting Requirement, February 15, 2012.

This blog was originally posted on the Lawyering for Lawyers blog on August 5. Click here to read the original entry. 


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President Obama signed an Executive Order that prohibits discrimination based on sexual orientation and gender identity in federal hiring and for federal contractors and subcontractors.  The Order requires that the US Department of Labor issues regulations to implement the order within 90 days. This Order takes effect immediately as to the hiring and employment provisions affecting over 2.5 million Federal employees. Contracts entered into on or after the regulations are promulgated by the Department of Labor must comply with the Order. Federal contractors will be required to maintain and/or amend hiring and employment policies against discrimination based on sexual orientation and gender identity.

Currently, there is no federal law that prohibits discrimination based on sexual orientation and gender identity that applies to all employers with 15 or more employees. The Employment Non-Discrimination Act (“ENDA”) would extend existing federal law protections to LGBT employees and was approved by the Senate, but has stalled in the House of Representatives. 21 states (NH and MA included) and the District of Columbia have passed laws prohibiting employment discrimination based on sexual orientation and 18 states (MA included) also prohibit discrimination based on gender identity.

This blog was originally posted in the Employment Law Business Guide on July 22. Click here to read the original entry. 

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Defendants often raise ascertainability when opposing class certification in food, beverage, and personal care products labeling litigation.  District courts in the Ninth Circuit, however, sometimes reach different conclusions regarding a putative class representative’s burden when it comes to establishing ascertainability.  Indeed, the subject has led to divergent decisions in the Northern District of California (often called “the food court”), with judges in that district commenting on the intra-district split.  Two recent decisions, however, bolster defendants’ arguments that ascertainability in contested class certification proceedings (as opposed to settlement classes) is a significant hurdle for such plaintiffs to overcome.  

Martin v. Pacific Parking Systems Inc., 2014 U.S. App. LEXIS 14200 (9th Cir. July 25, 2014), didn’t address consumer product labeling, but it addressed ascertainability.  The Ninth Circuit affirmed the denial of class certification of claims under the Fair and Accurate Credit Reporting Act.  While this is an unpublished decision and short on analysis, it may offer some insight regarding the Ninth Circuit’s leanings regarding ascertainability.  That district court concluded that the putative class was not ascertainable because there was no reasonably efficient way to determine which of the possible class members used a personal credit or debit card, rather than a business card.  That status was important because the claims purported to exclude anyone who used a business card for a transaction.  Id. at *2-3.  The Ninth Circuit agreed with the district court that the plaintiff “has not demonstrated that it would be administratively feasible to determine which individuals used personal, and not business, credit cards to purchase parking . . . .”  Id. at *3.  

Notably, the Ninth Circuit also included a footnote addressing “self-identification” and ascertainability.  We often see plaintiffs in product labeling class actions argue that self-identification is a viable way to identify class members—just have consumers provide affidavits attesting that they bought some quantity of the product during the class period.  But in Martin, the panel suggested that such efforts would not work in a contested class action:

Self-identification may suffice for some settlement-only classes.  But those classes need not satisfy Rule 23(b)(3)(D)’s “manageability” requirement.  “Confronted with a request for settlement-only class certification, a district court need not inquire whether the case, if tried, would present intractable management problems, see Fed. Rule Civ. Proc. 23(b)(3)(D), for the proposal is that there be no trial.”  Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997).  

Id. at *4 n.3.  This footnote could be the beginning of the end for plaintiffs’ self-identification arguments in consumer class actions.    

The other recent decision is In re Clorox Consumer Litigation, No. 12-00280-SC (N.D. Cal. July 28, 2014).  Those plaintiffs challenged whether labeling on Fresh Step cat litter misleadingly suggested that product more effectively eliminated odors than products that do not contain carbon.  Several problems existed with the proposed class, but the district court began with its ascertainability analysis.  Judge Samuel Conti noted a split among courts in the Northern District of California regarding ascertainability, but he explained that he has followed Carrera v. Bayer Corp., 727 F.3d 300, 306 (3d Cir. 2013), in other consumer class actions.  In this instance, the plaintiffs did not propose any method for determining who purchased Fresh Step during the class period.  For example, none of the named plaintiffs kept their receipts.  Moreover, even the named plaintiffs had difficulty remembering whether they bought Fresh Step, what sizes, types, or quantities.  That type of uncertainty made it impossible to rely on affidavits from consumers (i.e., self-identification).  

The plaintiffs argued that various retailers’ records could identify class members.  Even those data, however, were incomplete and often depended on a customer participating in the retailer’s loyalty program.  In sum, those types of retailer programs would capture, at best, a tiny fraction of all transactions involving a specific product.  

While the thrust of the Clorox decision is ascertainability, Judge Conti also explained that predominance was lacking.  Fresh Step labeling varied considerably during the proposed class period—not all included statements about the product’s superiority to other cat litter without carbon—making it impossible to conclude that all or even most class members saw the representations.  While the plaintiffs pointed to “deceptive” television commercials, those commercials only ran for a limited part of the class period, so it was impossible to presume that most class members saw or relied on the advertising.  In addition, Clorox pointed to survey evidence indicating that only 11 percent of customers who read packaging at all even looked at the back panel where the allegedly misleading statements appeared.  The putative class also did not satisfy the superiority requirement, largely for the same reasons that ascertainability and predominance were lacking.

Whenever possible, defendants will want to cite Martin in the Ninth Circuit to explain why self-identification does not solve the ascertainability issues that permeate food labeling class actions. In addition, Clorox is another instance of a judge in the Northern District of California embracing a meaningful ascertainability requirement.  Clorox also provides a solid analysis of the lack of predominance in consumer product labeling class actions based on variations in packaging, the short duration of certain advertising programs, and survey data regarding consumer behavior.  

James Smith is a partner in the Phoenix office of Bryan Cave LLP.  He is a member of the Class & Derivative Actions Client Service Group and the Food and Beverage Team.  

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Earlier this week, the Seventh Circuit rejected an attempt by the U.S. Department of Justice to rewrite a federal statute to suit the Executive Branch’s convenience.  In Bormes v. United States, No. 13-1602 (7th Cir. July 22, 2014), the issue was whether the United States can be sued for damages under the Fair Credit Reporting Act, which authorizes litigation against a  “person” who willfully or negligently violates the statute.  See 15 U.S.C. § 1681n(a).  The Act defines “person,” inter alia, as “any . . . government or governmental subdivision or other agency.”  Id. § 1681a(b).  In an opinion written by Judge Easterbrook, the court of appeals held that “[b]y authorizing monetary relief against every type of government, the United States has waived its sovereign immunity.”  Slip op. at 2.  

To support its contention that the Act does not waive sovereign immunity, DoJ essentially argued that the statute’s damages provision implicitly and necessarily excludes the United States.  According to the court, this was tantamount to  maintaining that  “the definition [of person] should not be given its natural meaning.”  Ibid.  The court explained that “Congress need not add ‘we really mean it!’ to make statutes effectual.”  Id. at 4 (emphasis added).  

The statute was originally enacted in 1970.  The damages provision, § 1681n, was broadened in 1996 to encompass “all persons,” but the already broad statutory definition of “person,” § 1681a(b), remained the same.    “Apparently no one in the Executive Branch asked Congress to revise the definition of § 1681a(b) when changing the category of entities for which § 1681n authorizes awards of damages.” Id. at 3.  The court indicated that “[t]he argument that a silent legislative history prevents giving the enacted text its natural meaning has been made before—and it has not fared well.” Ibid.

The Seventh Circuit did exactly what a court should do when interpreting a federal (or state) statute:  Give the statutory text its plain meaning, rather than rewrite it for policy reasons or the Executive Branch’s convenience.  The Constitution, of course, provides the proper remedy for a problematic federal statute—leave it to Congress to fix!             

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An attorney's fees award to prevailing defendants under 42 U.S.C. 1988 is relatively uncommon, at least more uncommon than fee awards to prevailing plaintiffs.  But this week in Carter v. Inc. Village of Ocean Beach, the Second Circuit affirmed a fee award to certain defendants where the plaintiffs' claims were frivolous.

Plaintiffs are five former seasonal and part-time police officers who were employed - and terminated - by a village in New York State.  They filed suit against numerous village and county defendants, alleging a variety of federal constitutional claims as well as state law claims pertaining to their termination.  The plaintiffs voluntarily dismissed some claims, the district court dismissed other claims on summary judgment, and the court declined to exercise supplemental jurisdiction over the remaining claims, which were state law claims.  The plaintiffs re-filed their state claims in state court, which dismissed all claims against the county defendants.

In the federal action, the county defendants moved for, and were awarded, attorney's fees pursuant to section 1988, to the tune of almost $64,000.  Under fee shifting statutes like section 1988, prevailing plaintiffs are ordinarily awarded attorney's fees.  But prevailing defendants are awarded fees only if the action was frivolous.  At issue on this appeal was whether the action was frivolous, and whether the defendants could be considered prevailing parties given that the claims were disposed of in various ways.

The Second Circuit had no problem finding the action frivolous, making it abundantly clear to the plaintiffs that they never should have filed suit against the county defendants because the county had nothing to do with the village's hiring or firing practices.  As for the prevailing party aspect of the analysis, to prevail for purposes of attorney's fees, a party must have gained through the litigation a material alteration of the parties' legal relationship.  A voluntary dismissal with prejudice is such an alteration because the action cannot be filed again.  Here, the plaintiffs voluntarily dismissed some claims, had other claims dismissed on summary judgment by the district court, and had the remaining claims dismissed by the state court.  Since there was no chance for any of the claims to be relitigated, there was indeed a material alteration of the parties' legal relationship and thus the defendants were properly considered prevailing parties.


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Categories: Governmental Liability

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