How Do You Keep Your Edge?

Posted on December 4, 2014 08:18 by Christopher A. Bottcher

Juries resolve very few cases these days.  Statistics confirm that fewer civil cases are tried to verdict every year, and that only a small fraction of civil cases ever reach a jury.  With litigation costs rising every year, and corporate budgets remaining flat or declining, that downward trend is likely to continue.

This trend has huge implications for those of us that make our living as litigators.  How do we develop and sharpen our skills?  How do law firms develop the next generation of trial lawyers in an environment that is dominated by settlements and ADR?  In years past, young lawyers learned by observing their partners in trial.  War stories supplemented their education.  However, the paucity of trials has limited these opportunities.  

DRI’s Trial Tactics Committee is dedicated to helping trial lawyers maintain their edge.  We do this by drawing on the experience and creativity of nationally recognized trial lawyers, consultants, experts, and in house counsel who share their knowledge and expertise at seminars, in webinars, and through publications. In 2014, Trial Tactics put on an interactive mock trial, complete with a judge and jury, which allowed attendees to observe and critique the tactics and techniques of dozens of experienced lawyers from around the country as they tried a case from voir dire to verdict.  Attendees gave the program rave reviews.  Many said it was the most informative CLE they had ever attended.

The 2015 Trial Tactics Seminar will continue DRI’s legacy of sponsoring outstanding, skills-based programming. This year, the Trial Tactics Seminar will include an interactive voir dire workshop, a mock Daubert hearing, as well as presentations on creative ways to present complex facts to jurors and to handle surprises at trial. The faculty will include a former US Attorney, a federal judge, in house counsel, and leading trial lawyers from across the country. In addition, this year’s program will include “Learning from Others” modules, which will be presentations by litigation sub-specialists who will teach tactics and techniques that are common in their practices, but which can also be helpful in a broader spectrum of cases.  

The seminar will be held at Caesar’s Palace in Las Vegas, March 18-20 – during March Madness. It promises to be a great program and a unique opportunity to learn, network with potential clients and referral sources, and reconnect with old friends. I hope to see you there. 

 

Bookmark and Share

Categories: Daubert | Seminar | Toxic Tort

Actions: E-mail | Comments

 

The often uncertain nature of environmental stigma claims has resulted in diverse and often confusing jurisprudence. Stigma damage claims seek recovery of damages to the reputation of the realty.  Stigma damages represent the market’s perception of the decrease in property value caused by an injury to the property.

In the typical diminution of property value claim, the general rule is that a property owner may seek recovery of diminution of property value or the cost of remediation, but not both.  However, in certain circumstances, claimants contend, there is an “additional” diminution of value due to a public health concern about the subject property or contamination on adjacent property for which recovery is sought.  This is the subset of diminution of property value claims where claimants argue that damages should be awarded on account of stigma.

Stigma claims raise conundrums for the courts.  On the one hand, courts desire to make a distressed plaintiff whole.  On the other hand, courts want to award only those damages that are proven with reasonable certainty.  Industry groups argue that stigma damages should not be permitted because they subject industry to the whim of any landowner able to obtain speculative testimony about the future economic impact of a temporary condition – even a condition that  a regulatory agency considers satisfactorily addressed.  These arguments take on even greater poignancy where the claimant’s property has not been physically impacted and the purported stigma is claimed to derive from mere proximity to a contaminated parcel.

On August 22, 2014, the Texas Supreme Court issued a thoughtful decision examining a number of these issues in Houston Unlimited, Inc.Metal Processing v. Mel Acres Ranch (No. 13-0084). The court performed a painstaking analysis of the opinions of the claimant’s diminution of property value expert, and rejected her methodology and conclusions across the board. As a result of finding the evidence supporting the property diminution claim insufficient, the court declined to take up the stigma issue.  Nevertheless, its discussion of stigma claim jurisprudence is noteworthy.

The Texas Supreme Court observed that American courts and commentators struggle with the issue of whether and when to allow recovery for stigma damages.  Most jurisdictions agree that plaintiffs must experience some physical injury to their property before they may recover stigma damages.  Although courts are divided on whether the injury must be shown to be permanent, defendants have expressed concern that a landowner should not be compensated when the loss is based primarily on public perceptions, which can change over time.

Equally problematic are cases in which the plaintiff’s property has not been contaminated or even threatened with contamination.  Some courts have awarded stigma damages to property owners who could demonstrate that their proximity to a landfill where hazardous wastes were dumped, for example, resulted in a loss of their home’s property value.  There is concern among commercial landowners that the possibility of property owners collecting damages in the absence of any direct physical impact to their homes could increase the number of claimants in mass tort property damage suits.

In reversing the Court of Appeals, the Texas Supreme Court observed that the struggle over whether to even allow recovery of stigma damages arises primarily from the conflicting goals of fully compensating the plaintiff for an injury while only awarding those damages that can be proven with a reasonable certainty.  The court observed that even when it is legally possible to recover stigma damages, it is often legally impossible to prove them.  This is because evidence based on conjecture, guess, or speculation is inadequate to prove stigma damages, not only as to the amount of the loss of value, but also as to the portion of the loss caused by the defendant’s conduct.

Based upon the rigor to which the high court subjected the claimant’s diminution of property value claims, Texas trial courts now are on notice that any diminution of property value, whether or not stigma is alleged, must be supported by strong evidentiary proof and reliable expert testimony.

This blog was originally posted on the Environmental & Toxic Tort Defense Insight blog on September 23, 2014. Click here to read the original article. 

 

Bookmark and Share

Categories: Environmental Law | Toxic Tort

Actions: E-mail | Comments

 

Most of the commentary on the Supreme Court’s June 9 decision in CTS Corp. v. Waldburger has focused on the holding that CERCLA does not preempt state statutes of repose which, after a set number of years, extinguish environmental and toxic tort claims—even if the plaintiff-friendly state statute of limitations that § 9658 of CERCLA mandates has not run its course. No doubt the Court’s ruling is important to us civil litigation defense counsel.  I submitted an amicus brief on behalf of DRI—The Voice of the Defense Bar advocating the conclusion that the Court reached and the fundamental, textually based analytical approach that the Court took.

But Waldburger also includes an interesting side show, one that is fascinating to those of us who have been tracking the Court’s federal preemption jurisprudence during the past three decades. Justice Kennedy’s majority opinion starts off on the right track.  It focuses on the text and structure of § 9658, which functions as an express preemption provision by interjecting into state statutes of limitations an ultra-liberal “federally required commencement date” that does not begin until a tort plaintiff discovers both injury or environmental harm and its alleged cause.  The opinion analyzes the plain language of § 9658, which explicitly refers to state statutes of limitations and nowhere mentions state statutes of repose. Not surprisingly, the opinion reaches the conclusion that § 9658 applies only to statutes of limitations and not to statutes of repose. In so doing, the opinion explicitly rejects the Fourth Circuit’s attempt to read statutes of repose into § 9658 merely because CERCLA is a remedial statute. The Court explained such a liberal interpretation cannot “substitute for a conclusion that is grounded in the statute’s text and structure.” Slip op. at 10.   

Unfortunately, Justice Kennedy’s opinion does not stop there.  It includes a Part II-D, in which Justices Sotomayor and Kagan joined, but Justices Scalia, Thomas, and Alito and the Chief Justice did not. (Justices Ginsburg and Breyer dissented from the Court’s decision.) Part II-D gratuitously invokes the controversial and often disputed “presumption against preemption” of the States’ police powers.  Then, as a corollary to that so-called presumption, Part II-D cites two earlier Supreme Court preemption decisions which stated that “when the text of a pre-emption clause is susceptible to more than one plausible reading, courts ordinarily ‘accept the reading that disfavors pre-emption.’”  Id. at 17.  Yet, the Court did not find that § 9658 is susceptible to more than one interpretation.  Indeed, Part II-D states that the plaintiffs had not shown “with clarity” that Congress intended §  9658 to apply to statutes of repose, in which case—as I argued in DRI’s amicus brief—applicable statutes of repose would “cease to serve any real function.”  Ibid.

Justice Scalia, joined by the Chief Justice and Justices Thomas and Alito, filed a separate, one-paragraph concurring opinion that joined in all but Part II-D.  In his separate opinion, Justice Scalia insisted, as he has since Cipollone v Liggett Group, Inc., 504 U.S. 505 (1992), that the interpretation of express preemption provisions should be governed by “ordinary principles of statutory construction.”  In other words, he rejects the “notion . . . that express pre-emption provisions must be construed narrowly,” rather according to the “ordinary meaning” of the language that they employ. See Cipollone, 505 U.S. at 548 (Scalia, J., concurring in judgment in part and dissenting in part).  

This division within the Court about presumptions and special rules of construction that should or should not apply to interpretation of “express pre-emption provisions” may persist for years to come. But at least in Waldburger, the debate was academic.  

There is one aspect of Waldburger and other Supreme Court preemption cases, however, over which there can be no real debate: Only members of the Court and their law clerks have continued the inexplicable tradition of hyphenating the term “pre-emption” rather than spelling it like the rest of us.  Just another baffling aspect of the Court’s preemption decisions . . . .  


Bookmark and Share

 

It is necessary that natural gas be substituted for coal and oil as an energy source if the world is to have any chance of avoiding runaway greenhouse gas (“GHG”) emissions, particularly from the developing world.

At present, it is unrealistic to expect renewable energy sources (solar, wind and geothermal) to serve as a foundation for national energy policy. In the United States, even with the best use of conservation, energy efficiency and renewables, the combination of these various “alternatives” will not become a substitute for fossil fuels for a very long time.

In a thoughtful article in the New York Law Journal on January 2, 2014, titled  “Countries Approach Fracking With Interest and Caution,” Stephen L. Kass, makes the case that natural gas from hydraulic fracturing should be an important component of a comprehensive energy strategy, both in the United States and abroad. According to Kass, fracking is attractive to: (1) economists seeking to stimulate development; (2) national security officials seeking independence from unreliable oil suppliers; and (3) environmentalists who seek to avoid runaway GHG emissions, particularly from developing countries.

In the United States, fracking now accounts for a staggering 25% of domestic natural gas (a figure expected to rise to 50% by 2035). In addition to lowering energy costs, according to Kass, fracking is widely credited with reducing U.S. “carbon intensity” and GHG emissions.

Fracking places the environmental community between the proverbial rock and a hard place. On the one hand, environmentalists recognize that fracking offers enormous environmental benefits in terms of reduced GHGs. On the other hand, environmentalists continue to be concerned that fracking fluids may contaminate precious water sheds.

Therefore, it is the goal of the environmental community that the amount of water used in fracking be minimized through recycling, that double-walled drill shafts and other controls be effectively utilized to minimize fugitive methane releases, and that waste fluids be adequately treated on-site before being recycled, discharged to water treatment plants or re-injected. The oil and gas industry’s refusal to disclose the composition of its fracking fluids has become an unnecessary distraction from these key environmental concerns.

In the long run, environmental concerns are likely to be largely addressed by increased and moreeffective regulation and by self-policing by industry. From the standpoint of providing an inexpensive fuel to tens of millions of American homeowners, the stakes are simply too high for environmentalists, who support fracking with these reservations, to concede defeat. As industry continues to demonstrate that fracking can be performed in a safe and environmentally sound manner, opposition to the practice will most likely diminish.

This blog was originally posted on January 24, 2014, on the Toxic Tort Litigation Blog by Bill Ruskin. Click here to read the original entry. 

Bookmark and Share

Categories: Toxic Tort

Actions: E-mail | Comments

 

The Army’s development of clean domestic energy resources strengthens national security and plays an important role in helping it to achieve its primary mission. As the world's largest consumer of energy, the military's recognition of the importance of reducing energy use and diversifying energy supplies, particularly beginning a shift from oil, has important ramifications for the economy and the environment.

On October 29, 2013, Environmental Entrepreneurs ("E2") presented “Mission Critical; Clean Energy in the U.S. Military” at Simpson Thacher & Bartlett's offices in New York. The speakers included Richard G. Kidd, Deputy Assistant Secretary of the Army; Colonel Russell LaChance, a West Point faculty member who is shaping an energy management curriculum to train future Army leaders; Scott Sklar, the president of D.C. based Stella Group Ltd., who discussed potential business opportunities from DOD's investment in clean energy technologies; and Kit Kennedy, Clean Energy Counsel at the Natural Resources Defense Council.

The theme that emerged was DOD's stance on aggressive objectives to reduce its fossil fuel dependence and invest in low carbon renewables and energy efficiency technologies. Military leaders contend that our current fuel mix is a national security threat, making Americans vulnerable overseas and at home.

The billions of dollars that Army is shifting toward solar energy, recycled water and better-insulated tents is not about saving the earth.  Instead, commanders in Afghanistan have found that they can significantly reduce casualty rates through energy conservation.  In Afghanistan, protecting fuel convoys is one of the most dangerous assignments. At the meeting, one participant with combat experience discussed how flying barrels of oil to remote parts of Afghanistan, apart from the exorbitant cost, places American lives at risk. Every humvee tow vehicle is subject to IED attack or ambush. 

"By reducing supply chain vulnerability, there are no commodity costs and there's a lower chance of disruption", said the Army's Mr. Kidd in an interview. "A fuel tanker can be shot at and blown up. The sun's rays will still be there." 

At one remote Afghan base in Ghazni Province, there was so little available power that the base commander had to tap into the Humvees for some power, which required soldiers to drive the vehicles around at night to recharge the batteries.  That problem was remedied when the base received a hybrid solar-diesel generator with capacity to store power for use after dark.

On November 22, 2013, at the Halifax International Security Forum, Secretary of Defense Chuck Hagel outlined the growing threats of climate change and the importance of developing cleaner, renewable energy and improving energy efficiency within the military. In particular, he noted that in 2012 "energy efficiency and renewable energy improvements such as tactical solar gear at combat posts in Afghanistan saved roughly 20 million gallons of fuel--taking 7,000 truckloads worth of fuel off the battlefield."

In a recent blog post, Kit Kennedy of NRDC discusses West Point's march toward clean energy goals. She concludes by saying:

"Over the past two years, NRDC has had the privilege to offer advice and assistance to West Point academic faculty and energy facility personnel on West Point's energy needs and clean energy plans. We salute West Point for taking this important step toward meeting its net zero energy goals....  NRDC’s next step will be to review and comment on the draft plan in detail so that we can offer our recommendations on how best to move forward."

A potential stumbling block to achieving these ambitious goals is the U.S. House of Representatives. The House has voted to ban DOD from purchasing biofuels until they are cheaper than fossil fuels.  There is also a move underway to prevent DOD from pursuing the development of advanced biofuels.  These and other regressive House initiatives threaten to force the military to go backward, hurt national and economic security, and jeopardize a fledgling American energy industry.  

This blog was originally posted on December 2. Click here to read the original entry. 

Bookmark and Share

Categories: Toxic Tort

Actions: E-mail | Comments

 

Mr. Ruskin’s blog post calls attention to the important problem of access to research data in litigation and other contexts.  The effort to obtain Dr. Racette’s underlying data is an interesting case study in these legal discovery battles.  Ruskin notes that there is the potential for “injustice” from such discovery, but he fails to acknowledge that the National Research Council has been urging scientists for decades to have a plan for data sharing as part of their protocol, and that the National Institutes of Health now requires such planning.  Some journals require a commitment to data sharing as a condition to publication.  The Annals of Internal Medicine, which is probably the most rigorously edited internal medicine journal, requires authors to state to what extent they will share data when their articles appear in print. Ultimately, litigants are entitled to “everyman’s” and “every woman’s” evidence, regardless whether they are scientists. 

In the case of Dr. Racette, it was clear that the time he needed to spend to respond to defense counsel’s subpoena was largely caused by his failure to comply with guidelines and best practices of the NIH on data sharing.  Racette was represented by university counsel, who refused to negotiate over the subpoena, and raised frivolous objections. Ultimately, these costs were visited upon the defendants who paid what seemed like rather exorbitant amounts for Racette and his colleagues to redact individual identifier information.  The MDL court suggested that Racette was operating independently of plaintiffs’ counsel, but the fact was that plaintiffs’ counsel recruited the study participants and brought them to the screenings, where Racette and colleagues videotaped them to make their assessments of Parkinsonism.  Much more could be said but for a protective order that was put in place by the MDL court.  What I can say is that after the defense obtained a good part of the underlying data, the Racette study was no longer actively used by plaintiffs’ counsel in the welding fume cases.  

It is not only litigation that gives rise to needs for transparency and openness. Regulation and public policy disputes similarly create need for data access.  As Mr. Ruskin acknowledges, the case of Weitz & Luxenberg v. Georgia-Pacific LLC, is very different, but at bottom is the same secrecy and false sense of entitlement to privilege underlying data. The Appellate Division’s invocation of the crime-fraud exception seems to be hyperbolic precisely because no attorney-client privilege attached in the first place.  

The Georgia-Pacific effort was misguided on many levels, but we should at least rejoice that science won, and that G-P will be required to share underlying data with plaintiffs’ counsel. Without reviewing the underlying data and documents, it is hard to say what the studies were designed to do, but saying that they were designed “to cast doubt” is uncharitable to G-P. After all, G-P may well have found itself responding in court to some rather dodgy data, and thought it could sponsor stronger studies that were likely to refute the published papers.  And the published papers may have been undertaken to “cast certainty” over issues that were not what they were portrayed to be in the papers.

Bookmark and Share

 

There is significant tension between the goals of scientific research and the demands of litigation. For scientific researchers, the amount of time required to respond to discovery takes away valuable time that might be otherwise devoted to research. Injustice and unfairness may result when a scientist, who has taken no part in litigation, is served with a lengthy subpoena requiring him to devote large chunks of time to produce the required information. 

In an article published in the journal Neurology by Brad A. Racette, MD; Ann Bradley, JD; Carrie A. Wrisberg, JD; and Joel S. Perlmutter, MD, titled “The Impact of Litigation on Neurologic Research,”Neurology 67(12):2124 (Dec. 2006), the authors complain about the burden of time responding to discovery demands:  

"Any hint of scientific data that support such a cause and effect relationship often encourages plaintiffs' attorneys to file suits against corporations alleging harm to their clients forcing corporations and employers to defend themselves. Both plaintiff and defendant teams hire expert witnesses who are frequently active investigators in relevant fields to bolster their positions. These legal proceedings can influence investigators and hamper research. Interactions with researchers can lead to personal financial or career gain that may bias research findings or impugn other investigators. Even researchers who have not been retained by either side of a legal dispute may be forced to respond to subpoenas for research data causing a substantial loss of research time for investigators and financial burdens on universities. Courts may require release of research records containing personal health information that could sully the trust research participants have in investigators. Litigation and its peripheral effects may bias investigators, impede research efforts, and harm research participants, thereby undermining efforts to understand the cause of neurologic disease."

In a rejoinder to this article, defendant’s counsel in the Welding Fume  Products Liability Litigation, Nathan A. Schachtman, wrote in a reply titled, “Response: The Impact of Litigation on Neurologic Research,” Neurology69(5):495 (Apr. 2007), that the Racette article offered a one-sided, incomplete picture of the interaction between scientific research and the law. 

Schachtman observes that the authors failed to disclose that the welder screenings for their study were funded by plaintiffs as part of an effort to solicit personal injury clients. Defendants served subpoenas to obtain the study’s underlying data only after plaintiffs’ counsel heavily relied on the authors’ study. Thus, Schachtman argues, the authors were not disinterested researchers inadvertently caught up in litigation. He states, “the authors collaborated with plaintiffs’ counsel so closely that counsel invoked litigation privileges to cloak the work in secrecy.” 

In what might be characterized as a sur-reply, Dr. Racette responded that his early collaboration with the plaintiffs had been greatly overstated. Perhaps the best advice, albeit cynical,  to scientific researchers may be to steer completely clear of lawyers at all costs and to avoid the temptation to be "helpful" to lawyers involved in litigation. Of course, the legal profession is the worse off if the best scientists are fearful of becoming involved in the judicial system. 

How then is a court to balance the competing needs for transparency in litigation and permitting scientific researchers, often unrepresented by counsel, with the peace and tranquility necessary to perform their research?  As the court observed in In Re Welding Fume Products Liability Litigation, 534 F.Supp.2d 761 (2008), Dr. Racette had performed some assessments for plaintiffs’ counsel during the nascent stages of the MDL, but later severed his ties with plaintiffs and took no more payments from them. Under these circumstances, the MDL court opted in favor of disclosure. The MDL court reasoned that where an author publishes an article with a view toward litigation, a probability of bias exists which undermines the logic supporting the admission of this material through the “learned treatise” exception to the hearsay rule. In some cases, the “learned treatise” is excluded from evidence due to the taint of suspected bias. On other occasions, the treatise is admitted but subject to impeachment on cross-examination. 

The difficulty arises when a party’s expert reaches his expert opinions by relying on a study performed by a scientific researcher who is completely disinterested in the litigation. In this instance, what intrusion into this scientist’s life will be permitted? Merely because an author has reached a conclusion that dissatisfies one side or the other in litigation should not make that scientific researcher a “target” of a burdensome subpoena.

Pursuant to a very different set of facts, the Appellate Division, First Department, recently ruled in Weitz & Luxenberg v. Georgia-Pacific LLC, 2013 N.Y. Slip.Op. 04127 (6/6/13), that Georgia-Pacific must turn over for in camera review by the Court internal communications related to scientific studies it commissioned into the safety of its products. This discovery dispute arose in the context of the Weitz & Luxenberg New York City Asbestos Litigation (“NYCAL”) cases in which Georgia-Pacific is a defendant. 

In 2005, Georgia-Pacific funded eight published research studies to aid in its defense of asbestos-related litigation. To facilitate this endeavor, Georgia-Pacific entered into a special employment relationship with Stewart Holm, its Director of Toxicology and Chemical Management, to perform expert consulting services under the auspices of in-house counsel, whom the Court found was significantly involved in the pre-publication process. 

The studies at issue were designed to cast doubt on the capability of chrysotile asbestos to cause cancer. The Court observed that despite the extensive participation of in-house counsel, none of the articles disclosed in-house counsel’s involvement. Citing the In Re Welding Fume Products Liability Litigation,  the Appellate Division determined that, “large corporations often invest strategically in research agendas whose objective is to develop a body of scientific knowledge favorable to a particular economic interest or useful for defending against particular claims of legal liability.” 

In determining that the studies and related documents should be subject to in camera scrutiny, the Court stated that the trial court was rightfully wary of prejudicing plaintiffs by permitting the sudden introduction of the studies or experts on the eve of trial, or in the many other pending asbestos cases. Therefore, the principles of fairness, as well as the spirit of the Case Management Order, required more complete disclosure. The Court held that it would be inappropriate to permit Georgia-Pacific to use its expert’s conclusions as a sword by seeding the scientific literature with Georgia-Pacific-funded studies, while at the same time using the privilege as a shield, by withholding the underlying raw data that might be prone to scrutiny by the opposing party which may affect the veracity of its expert’s conclusions. In it’s in camera review, the court will evaluate whether the crime-fraud exception to the attorney-client privilege applies to certain of the client communications in dispute. 

In high stakes toxic tort litigation, such as the NYCAL or Welding Fume litigations, it is not unusual for both well-heeled plaintiffs and defendants to fund studies to support their positions in litigation. In such instances, most courts will require extensive disclosure of the data underlying these studies’ findings. 

However, this is very different from the situation where an independent scientist, who is uninvolved in any litigation, finds that his scientific research and underlying data is the subject of litigation scrutiny. Although some discovery may be appropriate in these instances, forcing scientific researchers to devote an inordinate amount of their time complying with litigation requests may have a chilling effect on the research community’s willingness to take on scientific challenges relating to important public health issues. 

*This blog was originally posted on June 19 by Bill Ruskin on the Toxic Tort Litigation Blog. Click here to read the original entry. 

Bookmark and Share

 

In a decision issued on March 7, 2013, the Supreme Court of Florida reaffirmed Florida’s commitment to adherence to the economic loss rule in product liability litigation. In Tiara Condominium Association, Inc. v. Marsh & McLennan Companies, Inc. etc., et al., No. SC10-1022, the high court provides a helpful discussion of the origin and development of the economic loss rule. In summary, the economic loss rule is described as “the fundamental boundary between contract law, which is designed to enforce the expectancy interests of the parties, and tort law, which imposes a duty of reasonable care and thereby encourages citizens to avoid causing physical harm to others.” Thus, economic loss has been defined by Florida courts as “damage for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits – without any claim of personal injury or damage to other property.” In other words, economic losses are “disappointed economic expectations,” which are protected by contract law, rather than tort law.

Despite the rule’s underpinnings in the product liability context, the economic loss rule has also been applied to circumstances when the parties are in contractual privity and one party seeks to recover damages in tort for damages arising in contract.

In a product liability context, the economic loss rule was developed to protect manufacturers from liability for economic damage caused by a defective product beyond those damages provided by warranty law.  In discussing the development of economic loss rule principles, the Florida Supreme Court analyzed the California Supreme Court’s holding in Seely v. White Motor Co., 403 P.2d 145 (Cal. 1965). In Seely, the California Supreme Court held that the doctrine of strict liability in tort did not supplant causes of action for breach of express warranty.

In that case, the court was confronted with a situation in which plaintiff sought recovery for economic loss resulting from his purchase of a truck that failed to perform according to expectations. The court concluded that the strict liability doctrine was not intended to undermine the warranty provisions of sales or contract law, but was designed to govern the wholly separate and distinct problem of physical injuries caused by defective products. In East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858 (1986), the U.S. Supreme Court adopted the reasoning of Seely when it considered the issue of economic loss resulting from defective products in the context of admiralty.

According to the Supreme Court, when the damage is to the product itself, “the injury suffered – the failure of the product to function properly – is the essence of a warranty action, through which a contracting party can seek to recoup the benefit of its bargain.” Recognizing that the extending strict product liability law to cover economic damages would result in “contract law… drowning in a sea of tort,” the Supreme Court held that “the manufacturer in a commercial relationship has no duty either under a negligence or a strict products liability theory to prevent a product from injuring itself.” Thus, from the outset, the focus of the economic loss rule was directed to damages resulting from defects in the product itself.

In a Client Alert, dated July 5, 2011, Stites & Harbison lawyers John L. Tate and Cassidy R. Rosenthal wrote about the Kentucky Supreme Court’s adoption of the economic loss rule in Giddings & Lewis, Inc. v. Industrial Risk Insurers (6/18/11). The Court unanimously held that “a manufacturer in a commercial relationship has no duty under a negligence or strict products liability theory to prevent a product from injuring itself.” The Court wrote: “We believe the parties’ allocation of risk by contract should control without disturbance by the courts via product liability theories.”
As discussed by Mr. Tate and Ms. Rosenthal, in Giddings & Lewis, the manufacturer sold a sophisticated machining center to an industrial concern. The parties set forth their mutual obligations in a detailed commercial contract. After seven years of continuous operation and after the contract’s express warranty expired, the machining center malfunctioned in a spectacular fashion – throwing chunks of steel weighing thousands of pounds across the factory floor. The costs to repair the machining center and to get the business up and running again were almost $3 million. After reimbursing the machine’s owner for its losses, a consortium of insurance companies asserted a subrogation claim against the machining center’s manufacturer. With the warranty expired, the insurance companies sued in negligence, strict liability, negligent misrepresentation, and fraudulent misrepresentation. What could be more tortious conduct that this?  

Applying the economic loss doctrine, the Kentucky Supreme Court agreed with Mr. Tate holding that the purchaser could not recover from the manufacturer under any tort theory. The consortium was limited to contractual remedies, all of which expired years earlier.

Despite such groundbreaking decisions, is the economic loss rule under-utilized in products liability and commercial litigation today?  Of course, if personal injury results from an alleged defect, the rule does not apply. However, not infrequently, complaints alleging damages arising from a defective product that purportedly caused economic loss sound in negligence or strict products liability. Are defense lawyers seeking dismissal of these tort claims on the basis of the economic loss rule as often as they should?

This blog was originally posted on the Toxic Tort Litigation Blog on April 3 by Bill Ruskin. Click here to see the original post. 


Bookmark and Share

Categories: Product Liability | Toxic Tort

Actions: E-mail | Comments

 

As a general proposition, a defendant at trial suffers unfair prejudice when the court does not permit the jury to learn of certain facts that, if disclosed, would reveal a witness’s bias or self-interest.  If a witness with no apparent motive for lying gives strong testimony favoring one side at trial, that testimony may have a significant impact on the jury.  It is for this reason that all potential bias or self-interest of both fact and expert witnesses must be vigorously explored during pre-trial discovery.

In Polett v. Public Communications, Inc., No. 1865 EDA 2011, slip op. (Pa. Super. March 1, 2013), a verdict for a whopping for $27.6 million in the Court of Common Pleas of Philadelphia County, Civil Division, was reversed on multiple grounds. However, for purposes of this article, we focus on the finding by the Superior Court that it was error for the trial court not to permit the jury to learn that plaintiff’s treating physician, Dr. Richard Booth, an orthopedic surgeon, had been a named defendant earlier in the litigation and had entered into a tolling agreement with the plaintiffs. Under such a tolling agreement, a plaintiff can await the outcome at trial and decide afterward whether to pursue the party with whom she had entered into the tolling agreement.  Dr. Booth's best protection against being sued at a later date was to ensure that the plaintiffs made a substantial recovery at trial.  Is this self-interest?  You bet!

By way of background, in mid-2006, Zimmer, a medical device manufacturer, launched the Gender Solutions Knee, a knee replacement device designed specifically for women. Zimmer hired Public Communications, Inc. (“PCI”), a marketing firm, to produce a sales video, which would include interviews and footage of patients who had undergone successful knee replacement surgery using the device. Plaintiff Margo Polett underwent successful bilateral knee replacement surgery. On account of her good surgical outcome, her treating physician, Dr. Richard Booth, recommended Mrs. Polett to Zimmer as a candidate to participate in Zimmer’s sales video.

Plaintiffs allege that following the videotaping, which involved Mrs. Polett riding on a stationery exercise bike, her condition worsened and she underwent four further surgeries in failed attempts to repair the damage that plaintiffs alleged occurred during the filming of the promotional video.  Dr. Booth admitted in deposition that the “sword of litigation” hung suspended above his head. Substantial evidence was developed during discovery that when Dr. Booth first gave his causation testimony, which supported plaintiffs’ theory of the case, he had a strong incentive to place responsibility on the medical device manufacturer and the filming company and away from himself.
Due to his clear self-interest in presenting causation testimony favorable to plaintiffs, the Superior Court determined that the defendants should have been permitted to demonstrate Dr. Booth’s partiality as a doctor who faced the possibility of litigation; who did not think he was at fault; who did not want to alienate his patient; and who squarely placed responsibility for Mrs. Polett’s injuries on the filming company and the device manufacturer.  

In so holding, the appellate court concluded that the probative value of the tolling agreement outweighed the danger of unfair prejudice. Although the use of a tolling agreement for impeachment purposes was a matter of first impression for Pennsylvania courts, other Pennsylvania courts had found that analogous agreements were admissible to show bias or prejudice.
Another type of agreement between a plaintiff and a defendant is referred to as a “Mary Carter agreement." These agreements are a means of effectuating a settlement with some but not all defendants in a multi-party lawsuit.  Like the tolling agreement in Polett, evidence of a Mary Carter agreement's existence should be presented before the jury, but they are often shrouded in secrecy and never reach the light of day.

Mary Carter agreements usually incorporate the following basic elements although the terms vary from case to case:

1. the defendant in an multi-party lawsuit who enters into the agreement guarantees that the injured plaintiff  will receive a certain amount, even if the plaintiff fails to receive a judgment against that defendant or the amount of the judgment obtained is less than the guaranteed amount;
2. the agreeing defendant’s liability, which is capped, can be reduced or even eliminated by increasing a co-defendant’s liability;
3. the agreement is kept secret from the jury absent court-ordered disclosure; and
4. the agreeing defendant remains in the lawsuit as a party.
 
For obvious reasons, Mary Carter agreements have been challenged as being unethical. Arguably, the agreement contravenes the canons of professional conduct concerning candor and fairness; conflicts of interest; unjustified litigation; and taking technical advantage of opposing counsel. Because Mary Carter agreements are collusive agreements between parties with supposedly adverse interests, they create an inherent danger of perjury.

Moreover, these agreements mislead the jury into thinking that the agreeing defendant has interests adverse to those of the plaintiff, when, in fact, the defendant may sometimes share in the proceeds of the plaintiff’s recovery. In my view, lawyers who enter into Mary Carter agreements are walking into an ethical minefield. In New York, these agreements are considered contrary to public policy and are not permitted..

But whether the agreement in question is a tolling agreement or Mary Carter agreement, the finder of fact should be fully apprised of any relevant information that might give rise to bias or interested testimony. It is discouraging that the Polett court seemingly failed to understand this basic premise of trial fairness.

This article was originally posted on March 27 on the Toxic Tort Litigation Blog by Bill Ruskin. You can read the original post here

Bookmark and Share

Categories: Product Liability | Toxic Tort

Actions: E-mail | Comments

 

On March 27, 2013, a jury in federal district court in Bridgeport, Connecticut awarded Cara Munn, a 20-year-old woman who formerly attended the Hotchkiss School  in Lakeville, Connecticut, $41,750,000 in a case styled Orson D. Munn III et al. v. The Hotchkiss School, No. 3:09cv0919 (SRU).  The case raises important issues concerning "duty" and "assumption of risk."

The jury determined that Hotchkiss, a prestigious prep school, was negligent for two reasons: (1) in failing to warn plaintiff before or during a school sponsored trip to China during the summer of 2007 about the risk of insect-borne illness on the trip; and (2) in failing to ensure that plaintiff used protective measures to prevent infection by an insect-borne disease while visiting Mt. Pan in China.

In an article appearing in the Connecticut Law Tribune (Vol. 39, No. 13), titled "Tick Bite Leads To Big Verdict," it was reported that the school was faulted specifically  for not warning plaintiff (and her parents) that she would be traveling in mountainous and forested terrain. As a result, the jury determined that the plaintiff was not aware that she had to protect herself from insects by wearing bug repellent, long sleeve shirts and trousers, and by avoiding brushy undergrowth.

According to Plaintiffs' Amended Complaint, Ms. Munn's parents had Cara flown back to the United States in July '07, where she was hospitalized for several weeks at Weill Cornell Medical Center in the pediatric ICU and later at the Rusk Institute for extensive rehab.  As a result of her severe encephalitis, plaintiff suffered severe neurological and motor injuries, including permanent loss of speech. 

The case, which will almost certainly be appealed, raises significant issues concerning duty and the assumption of personal responsibility by parents who agree to have their child travel abroad for educational purposes. Apart from the obvious differences in food, culture and living conditions, traveling abroad carries many potential risks, some of which are foreseeable and some of which are not. Stepping back from the facts presented by this particularly tragic case, should a high school be held responsible for failing to prevent a student from being bitten by a tick in China? What if the tick had bitten her during a field trip to Central Park?

Assuming that the Second Circuit upholds this verdict, what does this case portend for high schools and colleges that plan educational trips abroad? Is there some bright line test that would provide guidance to a school evaluating the safety concerns of its students? Short of wrapping all of their students in cocoons and keeping them closely monitored in classroom settings, how can any school protect against the kind of unforeseen liability presented by this case?  

Hotchkiss' Answer to Plaintiffs' Amended Complaint states that plaintiffs' claims should be barred by the doctrine of assumption of risk.  The school argues that plaintiffs voluntarily assumed the risk of travel to China as evidenced by their execution of the pre-trip Agreement, Waiver, and Release of Liability.  In this agreement, plaintiffs agreed that Hotchkiss "would not be responsible for any injury to person or property caused by anything other than its sole negligence or willful misconduct" (emphasis added). Would legal weight did the court give to this release? 

Based upon the Verdict Form presented to the jury, it would appear that the trial court gave short shrift to the language in the release.  The jury was asked the following questions: (1) Was one or more of Hotchkiss' negligent acts or omissions a cause-in-fact of Cara Munn's injuries; and (2) Was one or more of Hotchkiss' negligent acts or omissions a substantial factor, that acting alone or in conjunction with other factors, brought about Cara's injuries? 

Those inquiries are a lot different from asking whether the jury finds that Hotchkiss' "sole negligence or willful misconduct" caused the injuries.  Although the jury determined that plaintiff did not contribute to any degree whatsoever in causing her injuries, it was not asked to consider whether other intervening factors played any role in causing Cara's injuries.

There are circumstances when a school can and should be held responsible when things go wrong on a school outing.  Three examples come quickly to mind: (1) sending kids into a war zone despite State Department warnings; (2) sending kids abroad into an epidemic earlier identified by the CDC; or (3) taking non-swimmers for an ocean swim outing without proper supervision. 

How is Munn different from these scenarios?  Is a random bug bite as foreseeable, if at all, as the kinds of risks discussed in the three scenarios above? According to Hotchkiss' summary judgment memorandum, the CDC reported that plaintiff was the first U.S. traveler ever to have reported TBE after traveling in China. Moreover, no U.S. traveler since plaintiff has developed the disease.  Therefore, how unreasonable was it for Hotchkiss not to take precautions against a risk of harm that arguably had such a slight likelihood of taking place?  Shouldn't plaintiffs have had to prove that the defendant was on prior notice of the existence of circumstances that could give rise to an injury? 

Plaintiffs' expert, Peter Tarlow once led a group of children, including his own son, on a tour of Israel.  If a child on that Israel tour had been unexpectedly assaulted by someone holding anti-Zionist views, would Dr. Tarlow expect to be held responsible for any resultant injury because he was "on notice" of decades of endemic unrest in the region? 

Two strong CT trial lawyers squared off against each for this eight day trial--for the plaintiffs, Antonio Ponvert of Koskoff, Koskoff & Bieder, one of the New England plaintiff bar's preeminent firms, and for the defendant, Penny Q. Seaman of Wiggin & Dana, one of Connecticut's oldest and most accomplished firms.  The bar should expect to see excellent post-trial briefing as events unfold.  

*This was originally posted on April 5 on Toxic Tort Litigation Blog. Read the current post here

Bookmark and Share

Categories: Law Suit | Medical Liability | Toxic Tort

Actions: E-mail | Comments

 
 

Submit Blog

If you wish to submit a blog posting for DRI Today, send an email to today@dri.org with "Blog Post" in the subject line. Please include article title and any tags you would like to use for the post.
 
 
 

Search Blog


Recent Posts

Categories

Authors

Blogroll



Staff Login