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Archive for the ‘Business Litigation’ Category

The Supreme Court Buys Into Argument that Plaintiffs Should Not Be Permitted to Forum Shop

Posted on: June 22nd, 2017

By: Kristian Smith & Robyn Flegal

The U.S. Supreme Court decided one of the most important mass tort/product liability decisions ever Monday, effectively ending forum shopping or “litigation tourism.” In its 8-1 ruling, the Supreme Court in Bristol-Myers Squibb Co. v. Superior Court, No. 16-466 (U.S. June 19, 2017) overturned a California Supreme Court decision that had allowed hundreds of out-of-state patients who took Bristol-Myers Squibb’s blood-thinning medication Plavix to sue the company in California.

For years, plaintiffs involved in “litigation tourism” have relied on broad interpretations of personal jurisdiction to sue large companies in plaintiff-friendly jurisdictions. Ever since “general” personal jurisdiction was limited by the Supreme Court three years ago in Daimler AG v. Bauman, 134 S.Ct. 746 (2014) to those states where a corporation is incorporated or has its principal place of business, plaintiffs have tried to use a similar broad interpretation of “specific” personal jurisdiction to forum shop. The California Supreme Court accepted this theory when it allowed plaintiffs from all over the country to sue Bristol-Myers Squibb in California.

But the Supreme Court didn’t buy it and reiterated that the lawsuit itself must arise out of or relate to the defendant’s contacts with the forum.

The Supreme Court rejected the California Supreme Court’s ruling that any “substantial connection” between a corporate defendant’s activities and California, whether or not causally related to a plaintiff’s claimed injuries, would suffice to support jurisdiction. The California Supreme Court conferred jurisdiction over Bristol Myers-Squibb where the plaintiffs did not reside in the state and did not sue over a drug that they purchased in the state. The Supreme Court called this approach a “loose and spurious” form of general jurisdiction.

As the Court held, “a defendant’s general connections with the forum are not enough.” This means that plaintiffs may “join together in a consolidated action in the States that have general jurisdiction over BMS.” Otherwise, “the plaintiffs who are residents of a particular State… could probably sue together in their home States.”

This ruling ends the days of plaintiffs flocking to accommodating jurisdictions to bring claims against large companies, and it is already having widespread effects. Based on the Court’s ruling on Monday, a St. Louis judge declared a mistrial in a talcum powder trial underway in St. Louis Circuit Court based on lack of personal jurisdiction. The mistrial in St. Louis was declared in a trial where a Missouri man and two out-of-state plaintiffs sued Johnson & Johnson and its supplier Imerys Talc America over a claim that talcum powder in its products caused ovarian cancer. Johnson & Johnson’s lawyers prevailed, arguing that the packaging and labeling company with a plant in Missouri was simply one of the company’s contractors, and played no role in establishing jurisdiction over out of state plaintiffs.

For any questions, please contact Kristian Smith at [email protected] or Robyn Flegal at [email protected].

Georgia Supreme Court Finds Fault with the Court of Appeals’ Decision Requiring a Full Retrial on Apportionment

Posted on: June 9th, 2017

By: Robyn Flegal

In July of 2007, Joshua Martin suffered a brutal gang attack outside of Six Flags Over Georgia and was left with severe brain damage. On June 5, 2017, the Supreme Court of Georgia granted certiorari to decide the following two questions: “(1) whether Six Flags could properly be held liable for the injuries inflicted in this attack; and (2) assuming liability was proper, whether the trial court’s apportionment error does indeed require a full retrial.” The Supreme Court reinstated a $35 million verdict for Mr. Martin, holding that the jury was authorized to find Six Flags liable for the breach of its duty to exercise ordinary care in keeping its premises safe for invitees. The Court then remanded the case to the trial court for a determination as to apportionment of fault.

The jury had apportioned fault between the parties by assigning 92% of the $35 million verdict against Six Flags, and 2% against four of Martin’s attackers. Six flags argued that the jury should be entitled to apportion damages among not only named defendants, but also among individuals who were alleged to have been involved in Martin’s attack. Georgia law provides that, when assessing percentages of fault, the trier of fact shall consider the fault of all persons or entities who contributed to the alleged injury or damages, regardless of whether the person or entity was, or could have been, named as a party to the suit. OCGA § 51-12-33.

The Georgia Supreme Court acknowledged that two of Mr. Martin’s assailants should be added to the verdict form, and decided that apportionment could be decided without a full retrial. “[A]s a general matter, where correction of an apportionment error involves only the identification of tortfeasors and assessment of relative shares of fault among them, there is no sound reason to disturb the jury’s findings on liability or its calculation of damages sustained by the plaintiff.” The Court did, however, concede that a retrial on apportionment might require the presentation of much or all of the same evidence as was presented when determining liability.

To be sure that fault is properly apportioned, Georgia attorneys must include on the jury verdict form all individuals, including the plaintiff, who contributed to the injury or damages.¹

For more information contact Robyn Flegal at [email protected].


¹ While this particular case was not a life sciences case, these principles also apply to drug and medical device trials in Georgia.

 

Insurance Disclosures Under § 627.4137 and its “Teeth”

Posted on: April 3rd, 2017

teeth[1]By: Jeremy W. Rogers

For those insurance defense attorneys and insurance carriers handling liability cases or claims in Florida, unless you have not been paying attention for the past 35 years, you are aware of Fla. Stat. § 627.4137 and its requirements. This statute gives claimants access to information about a defendant’s liability insurance. This usually occurs at or near the outset of plaintiff’s engagement of his or her attorney because, as is always the case, insurance coverage is a major factor (or, in reality, THE factor) in how a plaintiff pursues the case and negotiations toward settlement. The statute requires a liability insurer to produce a copy of the policy and to disclose the following information, under oath, within 30 days of a claimant’s request: a) the name of the insurer; b) the name of each insured; c) the limits of liability coverage; d) a statement of any policy or coverage defense which such insurer reasonably believes is available to such insurer at the time of filing such statement; and (e) a copy of the policy.

While we know the requirements, a question often arises about what are the consequences of failing to comply. The statute has no provision for a private right of action. See Lucente v. State Farm Mut. Auto. Ins. Co., 591 So.2d 1126, 1127-28 (4th DCA 1992)(stating there is no implicit third party right of action against an insurer for failure to comply); Brannan v. Geico Indemnity Co., 569 Fed.Appx. 724, 728 (11th Cir. 2014)(indicating there is no first-party private cause of action). Without a private right of action, where are the “teeth” in the statute?  Most or all of the decisions on the issue appear to fall within two categories:

  1. Invalidating settlements
  2. Invalidating or striking of defenses or pleadings

In the first category, the courts reason that the purpose of disclosure is to guide the parties in their handling of the case and negotiations. The failure to disclose, or to supplement as new information is obtained, means that the plaintiff is proceeding with false or incomplete information. Thus, the statutory disclosure requirement is an essential term of the settlement. The end result is that motions to enforce settlement are denied or defenses based on a pre-suit settlement are not tenable. There was no settlement because there was not meeting of the minds. See, e.g., Cheveire v. Geisser, 783 So. 2d 1115 (Fla. 4th DCA 2001); Schlosser v. Perez, 832 So. 2d 179 (Fla. 2d DCA 2002).

The second category of cases are usually those where the carrier is sued and assert various policy defenses. The court will invalidate or strike a policy defense as a sanction for failure to comply with § 627.4137. In United Auto. Ins. Co. v. Rousseau, 682 So. 2d 1229 (Fla. 4th DCA 1996), because the carrier failed to comply with § 627.4137, the court affirmed a denial of the carrier’s motion for directed verdict that was based upon the failure of plaintiff to comply with certain policy conditions. In Figueroa v. U.S. Security Ins. Co., 664 So. 2d 1130 (Fla. 3d DCA 1995), the court reversed summary judgment in favor of the carrier for the same reason.

The most disturbing decision is a case where a defendant’s pleadings were stricken entirely and the case went forward on damages only. In Oceanside 932 Condominium Assoc., Inc. v. Landsouth Construction, LLC, Case No. 16-2009-CA-007958, plaintiff made a pre-suit insurance disclosure request under the statute. The defendant responded, but not completely. Shortly before trial, Plaintiff’s counsel discovered additional policies which provided coverage. As a result, upon plaintiff’s motion, the Court struck the defendant’s pleadings, entered a default judgment as to liability, and allowed a trial on damages which resulted in an excess verdict. While this is a trial court decision and not binding, it illustrates that there is real jeopardy in the most egregious failures to comply.

So, to answer the question of whether there are “teeth” in § 627.4137, the answer is certainly a yes. It is important, therefore, that when faced with a disclosure request, one complies with the requirements set forth in the statute.

For any questions, please contact Jeremy Rogers at [email protected].

Georgia’s 8 Year Statute of Limitations for Tort Victims of Unidentified Criminals

Posted on: March 17th, 2017

Image result for generic timelinesBy: Jason Kamp

The longevity of certain crime-related tort claims seemingly increased four-fold.

Georgia tort claims are typically extinguished by the statute of limitations after two years, unless the limitations period is tolled.  One source of tolling is O.C.G.A. § 9-3-99.  It tolls the limitations period for tort claims brought by victims of crime for up to six years.  The Court of Appeals of Georgia revisited the statute’s function in Harrison v. McAfee et al., 338 Ga. App. 393 (2016).  In trying to fix one part of the statute, it appears the court inadvertently broke another.

The July 2016 Harrison case is most noteworthy for its holding, which broadened the tolling statute’s application to tort claims against parties who did not commit the crime in question.  The court held that a bar patron shot during an armed robbery could now toll the statute of limitations even for his claims against the bar.  While the holding’s impact was dramatic and wide reaching, so too is the implication of an overlooked fact of the case—the shooter had not been identified, arrested, or prosecuted.

Under the facts of Harrison, the existence of an actual criminal prosecution is no longer a necessary element for tolling under O.C.G.A. § 9-3-99.  With the limiting language “until the prosecution of such crime or act has become final” plainly written in the statute, it is hard to imagine this is what the textualist Harrison court intended to do. Now, claims arising out of unprosecuted crimes last longer than prosecuted ones.  Either way, the de facto result is that victims of unidentified criminals now have eight years to bring tort claims against non-criminal defendants.  Six years from the tolling statute, plus the regular two.   Allowing non-criminal defendants to get dragged into personal injury lawsuits 8 years after the fact is burdensome enough where there is an identified, prosecuted criminal to apportion fault.  Allowing it where the criminal was never identified is even worse.

For more information, contact Jason Kamp at [email protected].

Eleventh Circuit Applies Spokeo’s Stringent Article III Standing Requirements

Posted on: October 27th, 2016

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By: Robyn Flegal

Earlier this year, the Supreme Court clarified the pleading requirements to establish standing in federal lawsuits arising out of alleged statutory violations. A detailed explanation of the Supreme Court’s Spokeo[1] opinion can be found on the FMGBlogLine. As we observed, “the specific line drawing as to what a plaintiff must allege to establish standing ultimately will be determined by the lower courts.” Recently, the Eleventh Circuit sharpened its pencil on this issue.

In Nicknaw v. CitiMortgage, Inc.,[2] the Eleventh Circuit considered whether Nicknaw had standing to bring suit in federal court. Nicknaw alleged that CitiMortgage violated a New York statute when it failed to timely record a certificate of discharge proving he satisfied his mortgage. Relying upon the Spokeo decision, the Eleventh Circuit dismissed Nicknaw’s appeal for lack of jurisdiction because he failed to allege a sufficient “injury in fact.” The Court explained that an injury in fact, which can include intangible harm, requires “an invasion of a legally protected interest that is concrete, particularized, and actual or imminent.”

Applying this standard, the Eleventh Circuit held that the intangible harm caused by CitiMortgate’s recording delay was insufficient to establish standing because Nicknaw failed to allege (1) that he lost money because of CitiMortgage’s failure to timely record, or (2) that he or anyone else was even aware that the certificate of discharge was not recorded during the relevant time. Furthermore, no material risk of harm existed, as Nicknaw filed his suit two years after CitiMortgage recorded the certificate. The Court noted that while Nicknaw failed to allege a concrete and particularized injury as required under Article III, his failure “does not mean that New York law does not create a right that, when violated, could form the basis of a cause of action in a court of New York.”

In conclusion, plaintiffs alleging a technical statutory violation now face a heightened standard to establish standing in federal court. Plaintiffs pursuing claims based upon violations of state statutes may be more inclined to pursue their claims in the state court system to avoid these stringent standing requirements of Article III.

[1] Spokeo v. Robins, 136 S. Ct. 1540 (2016).

[2] Nicknaw v. CitiMortgage, Inc., No. 2:15-CV-14125-JEM,  — F.3d — (October 5, 2016).