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Archive for the ‘General Liability’ Category

Ranking the State Courts: Is the Litigation Environment Getting Better?

Posted on: September 26th, 2017

By: Jacob E. Daly

Earlier this month, the U.S. Chamber Institute for Legal Reform (“ILR”) published the results of its 2017 lawsuit climate survey. Participants in the survey were 1,321 in-house attorneys and other senior executives at companies with at least $100 million in annual revenue who are knowledgeable about litigation matters and have recent firsthand litigation experience in each state they evaluated. The states were ranked on a scale of 0-100 based on grades assigned by participants in the following categories: (1) enforcing meaningful venue requirements; (2) overall treatment of tort and contract litigation; (3) treatment of class action suits and mass consolidation suits; (4) damages; (5) proportional discovery; (6) scientific and technical evidence; (7) trial judges’ impartiality; (8) trial judges’ competence; (9) juries’ fairness; and (10) quality of appellate review. Participants assigned a grade of A, B, C, D, or F for each category, and these grades were then translated to scores of 100, 75, 50, 25, and 0, respectively.

The ILR has conducted this survey 11 times since 2002 (2002-2008, 2010, 2012, 2015, and 2017), and Delaware was the top-ranked state every year until this year when South Dakota claimed the no. 1 ranking. Interestingly, the states in which Freeman Mathis & Gary has an office all rank in the bottom half of the country, which suggests that FMG attorneys are toiling in some of the most difficult legal arenas. Those states and their rankings and scores are: New York (29th; 68.4), North Carolina (33rd; 68.2), Pennsylvania (38th; 66.3), Georgia (40th; 64.1), New Jersey (41st; 63.8), Florida (46th; 60.5), and California (47th; 60.0). In addition, the survey identified the cities and counties with the least fair and reasonable litigation environments in the country, and several cities and counties where FMG has an office are on this list: Los Angeles, San Francisco, New York City, and Philadelphia.

The survey shows that the overall average scores are increasing, which means that in-house attorneys and other senior executives believe that the litigation environment is improving overall, though it is interesting to note that the ranking of each state where FMG has an office has gotten worse since 2010. About 63% of participants describe the fairness and reasonableness of state courts as excellent or pretty good, which is up from 50% in 2015 and 49% in 2012. Further, a substantial majority of participants (85%) say that a state’s litigation environment is likely to affect decisions about where to locate or do business, which is up from 75% in 2015 and 70% in 2012.

The full report on ILR’s survey can be found here.

If you have any questions or would like more information, please contact Jacob Daly at [email protected].


Contesting Damages Involving Medical Lien Funding

Posted on: August 4th, 2017

By: Jason A. Kamp


Medical Lien Funding is a distinct flavor of litigation financing. Medical Lien Funding companies refer personal injury plaintiffs to medical providers for treatment, which is provided pursuant to a medical lien. Lien rates are higher than rates charged to regular payors like Medicare or an insurance company. The company then purchases the lien from the provider at a negotiated discount. The company’s profit is made by collecting the higher lien rate from the plaintiff’s recovery. Part of why such profit is available is because the unpaid lien rate is used to measure the plaintiff’s damages, rather than the paid discount rate. The company takes on the risk of non-payment and the positive rate differential. The provider gets guaranteed payment and the prospect of repeat referrals.

While these arrangements arguably enable personal injury plaintiffs to receive care that would otherwise be unavailable, they do so by creating a perverse incentive structure. The arrangement inherently rewards costly over-treatment and creates a credibility problem for providers. Until recently, it was difficult to combat this incentive structure in Georgia because the collateral source rule made it impossible for the party paying the bill to explore or use it in litigation.

However, two recent federal cases have taken these agreements out of the collateral source rule’s protection. In Houston v. Publix Supermarkets, Inc. No. 1:13-CV-206-TWT, 2015 U.S. Dist LEXIS 102093, 2015 WL 4581541 (N.D. Ga. July 29, 2015) and Rangel v. Anderson, 202 F. Supp. 3d 1361 (S.D. Ga., Nov. 7, 2016), federal courts in Georgia note the inherent differences between Medical Lien Funding arrangements and classic collateral sources. The latter decision also provides a framework for admitting and using them. The door is now open for discovering and using the details of these arrangements to probe the credibility of medical providers, as well as attack the reasonableness of damages. These rulings provide a useful tool advocates for personal injury defendants would be wise to incorporate into their repertoire.

If you have any questions or would like more information, please contact Jason A. Kamp at [email protected].

What Do Jurors Think?

Posted on: July 24th, 2017

By: Jacob E. Daly

Figuring out what jurors think – and, therefore, predicting what decisions they will make – is critical to success at trial. Many lawyers believe they have this figured out, but of course it is impossible to know the attitudes and beliefs of any one juror or group of 6 or 12 jurors. DecisionQuest is a national trial consulting company that has been tracking potential jurors’ attitudes for decades. It recently published the results of its 2017 National Juror Attitude Survey, which involved 1,201 respondents from 12 major metropolitan areas. Some of the results are eye-opening.

For example:

  • 90% agree that there are too many lawsuits.
  • 75% agree that plaintiffs’ lawyers manufacture lawsuits just to enrich themselves.
  • 73% agree that personal injury plaintiffs fake illness or injury to get money.
  • 68% agree that a lawsuit would not go to trial if the plaintiff did not have a legitimate claim.
  • 50% believe that damages awarded in lawsuits are about right; 42% believe they are too high; and 8% believe they are too low.
  • 79% are angered by at least some things about corporations.
  • 42% believe that corporations will do anything to maximize profit.
  • 72% agree that conspiracies between business persons are common.
  • 69% believe that companies destroy their own records to avoid taking responsibility.
  • 79% agree that awarding punitive damages against large companies is the best way to get them to behave more responsibly.

Some of these findings are difficult to reconcile with other findings in the survey as well as with actual results in real trials. The bottom line from this survey is that there is both good news and bad news for personal injury plaintiffs and defendants, especially corporate defendants. The key for each side, obviously, is to maximize the good and to minimize the bad. Predicting jurors’ decision-making is an imprecise exercise at best, but having as much information as possible about their attitudes will help with emphasizing issues that exploit their beneficial attitudes while avoiding issues that promote their harmful attitudes.

For any questions, please contact Jacob Daly at [email protected].

Philadelphia Court Granted Summary Judgment in $18 Million Legal Malpractice Case Rooted in the WorldCom Bankruptcy

Posted on: July 6th, 2017

By: Erin Lamb

A blast from the dot-com bubble past took some of its final breaths in a Philadelphia courtroom recently, when a judge granted summary judgment in a legal malpractice action with its roots in the 2002 bankruptcy of telecommunications giant WorldCom. (The bankruptcy was the largest in U.S. history, until 2008, when it was overtaken in rapid succession by Lehman Brothers and Washington Mutual.)

In Communications Network International, LTD v William Mark Mullineaux, Esquire, et al, the Philadelphia Court of Common Pleas (Philadelphia Court) held that, although Plaintiff’s former attorney may have violated the standard of care on multiple occasions, the client, Communications Network International, LTD (CNI), did not conduct reasonable diligence when it failed to read the Opinion from 2006 that gave rise to the action.

Mr. Mullineaux’s representation of CNI began in March 2001. In February 2001, MCI WorldCom Communications, Inc. (World Com) sued CNI for breach of contract in the United States District Court for the Eastern District of Pennsylvania. CNI hired Mr. Mullineaux to represent them in the litigation. In response, Mr. Mullineaux filed a breach of contract claim on behalf of CNI against WorldCom for “slamming,” a practice that CNI claimed constituted, essentially, the theft of tens of thousands of CNI telephone customers. WorldCom soon filed for bankruptcy. Consequently, CNI’s claims were handled by the bankruptcy judge. In 2006, the bankruptcy court denied CNI’s Motion for Judgment on the Pleadings, granted in part WorldCom’s Motion for Judgment on the Pleadings, and dismissed CNI’s claims. The Court specifically noted the slamming allegations were not properly pled.

At deposition, CNI’s CFO, Mr. Cooke, admitted that Mr. Mullineaux sent him a copy of the bankruptcy court’s opinion back in 2006, shortly after it was issued. He testified that he did not read it. In September 2008, Mr. Mullineaux filed an appeal of the bankruptcy court decision to the United States District Court for the Southern District of New York. Two years later, in September 2010, the Southern District of New York affirmed the bankruptcy court’s rulings, including the holding that the filed-rate doctrine barred most of CNI’s claims Mr. Mullineaux did not send the Order and Opinion to Mr. Cooke until the 30 day appeal period passed. He secured leave from the district court to file the CNI appeal nunc pro tunc; however, the United States Court of Appeals for the Second Circuit dismissed CNI’s appeal as untimely filed and brought the appeals to an end. Consequently, CNI filed its legal malpractice action on December 9, 2014. CNI claimed damages in the approximate amount of $18,000,000.

The Defendants sought summary judgment, based on the running of statues of limitations. The Philadelphia Court of Common Pleas agreed, holding held that the statute began to run when the bankruptcy court ruled against CNI in 2006. The Court relied on Pennsylvania law, which has never tolled the statute of limitations in a legal malpractice claim until appeals have been exhausted. The Court did note that Mullineaux may have violated the standard of care on multiple occasions.

The Court went on to take the client to task for its failure to conduct reasonable diligence. CNI alleged it had lost almost $20 million by 2010, which the court noted constituted a “a hefty incentive for the exercise of attention, knowledge, intelligence and judgment by corporate officers with their own fiduciary duties to the corporation.” As a result, the Court determined that had CNI exercised reasonable diligence it should have at least read the courts’ Opinions denying its claims.

For any questions, please contact Erin Lamb at [email protected].

Implementation of Pennsylvania’s Fair Share Act Continues to Snag Courts and Defendants Alike

Posted on: April 27th, 2017

By: Erin E. Lamb

From the common law period through 2011, the Commonwealth operated under a system of joint and several liability. Joint and several liability meant that any and all defendants were “in for a penny, in for a pound.” Any defendant found liable – even 1% liable – was on the hook for the full amount of the judgment, resulting in countless verdicts where insured Defendants who were Co-Defendants with judgement-proof individuals paid out full judgments. Pennsylvania struggled for the better part of a decade to craft a law that would end joint and several liability and finally passed the Fair Share Act. As the name implies, individual defendants are now responsible solely for their proportionate share of the judgment. There are some exceptions; for example, a defendant found more than 60% liable remains liable to pay the full amount of the judgment. At the time of its passage in 2011, Pennsylvania’s Fair Share Act was hailed by defense counsel as rectification of inequity. However, with the litany of exceptions and without guidance as to the application of the Act to Pennsylvania’s Suggested (read: Compulsory) Jury Instructions, practitioners and the courts have struggled to apply the Act at trial.

The Fair Share Act is particularly thorny when applied to Pennsylvania’s notoriously plaintiffs-friendly products liability and mass torts jurisprudence. (Products Liability, in particular, has already been in a state of flux since the seminal 2014 decision of the Pennsylvania Supreme Court in Tincher v. Omega Flex, `04 A.3d 328 (Pa. 2014), which struck down the Commonwealth’s bright-line separation between negligence concepts and strict liability principles, but declined to adopt the Third Restatement. Everyone agrees it is seminal. No one agrees as to exactly what. The Pennsylvania Supreme Court is seemingly content to allow that state of affairs to continue indefinitely.)

Pennsylvania’s appellate-level Court, the Superior Court, is currently hearing arguments in Roverano v. John Crane Inc., to determine whether the Fair Share Act requires juries in strict liability cases to determine the portion of liability to be imposed against each defendant, or whether a judge simply apportions liability equally. Trial Courts across Pennsylvania – there are 60 total[1] — have struggled with the question and reached different conclusions. At trial in the matter on appeal, the Judge equally apportioned liability among the 8 Defendants.

At oral argument, Plaintiff’s counsel argued that the Fair Share Act should not apply to strict liability cases as it does to negligence cases (shades of a pre-Tincher Commonwealth rearing its head). However, the Court noted asbestos cases are not one of the Fair Share Act exceptions. In a bit of a role-reversal, it is Plaintiff’s counsel arguing that it is the judge, not the jury, that ought to make the decisions about percentages of fault against defendants in strict liability cases. All counsel, and the judiciary, had little to work with, as a footnote in a separate matter, Rost v. Ford Motor, makes up almost the entirety of precedent about the application of the Fair Share Act to strict liability cases. That, and the ever-changing makeup of the Pennsylvania Supreme Court, which has a full complement of justices for the first time since 2014, makes it extremely difficult to predict how these cases will shake out, and to what extent.

We expect these cases to continue to wind their way through the appellate levels for years, if not decades, to come.

[1] Philadelphia, it goes without saying, is the First Judicial District – No.1

For more information, please contact Erin Lamb at [email protected].