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Posts Tagged ‘supreme court’

Are We There Yet?: Auto Service Advisor Exempt Status Under the FLSA Makes Return Trip to the Supreme Court

Posted on: November 28th, 2017

By: Will Collins

Last year, the Supreme Court narrowly avoided a collision with the question of whether service advisors at car dealerships are exempt as “salesmen” under the overtime requirements of the Fair Labor Standards Act (FLSA). However, as Encino Motorcars, LLC v. Navarro returns to the Supreme Court, the case is poised to squarely address this issue and, hopefully, provide much-needed clarity.

As previously discussed, the Supreme Court sent the Encino case back to the Ninth Circuit Court of Appeals to reconsider the exempt status of service advisors, instructing the Ninth Circuit to give no deference to the Department of Labor’s (DOL) regulations providing that service advisors were not exempt.

After considering the case on remand, the Ninth Circuit still held that service advisors do not fall within the FLSA’s exemption for “salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” As a result, the Supreme Court will again consider the exempt status of auto service advisors and all indications are that the Court will resolve the discrepancy between the DOL regulations, the Ninth Circuit decision, and prior decisions by the Fifth and Fourth Circuits.

After a long road of uncertainty, many are hopeful that the Supreme Court will provide clarity when it finally resolves this issue. As the case is scheduled for oral argument in January, we will continue to monitor the case and provide an update of any developments.

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

Pa. Supreme Court To Reconsider If Settlement Can Trigger Malpractice Suit

Posted on: November 9th, 2017

By: Barry S. Brownstein

The Pennsylvania Supreme Court has agreed to reexamine the extent to which a settlement agreement can serve as the basis for a legal malpractice case. The case stems from Eileen McGuire’s efforts to sue a hospital after she was fired in July 2011 in what she claims was retaliation for her refusal to engage in multiple illegal or unethical acts. McGuire also claimed she was illegally targeted for termination on the basis of her age. The case concluded with a $7,000 settlement.

McGuire then proceeded to file a malpractice suit accusing her former attorneys for failing to include a claim for age discrimination and for failing to exhaust administrative remedies before the EEOC, claiming that such failures left her in a weakened position that forced her to accept a deficient settlement.

The case was dismissed on preliminary objections based on the Supreme Court’s 1991 decision in Muhammad v. Strassburger, McKenna, Messer, Shilobod & Gutnick, in which the justices declared they would “not permit a suit to be filed by a dissatisfied plaintiff against his attorney following a settlement to which that plaintiff agreed.” The decision, however, did leave open the door for claims in which a plaintiff can prove that he or she was fraudulently induced to settle.

The Superior Court upheld the dismissal of McGuire’s case, rejecting arguments from McGuire that the negligence of her former attorneys had not been in negotiating the settlement but, rather, in failing to properly pursue her case against the hospital.

The continued viability of the Muhammad case that bars legal malpractice suits following the settlement of a lawsuit absent a showing of fraud on the part of the attorney will be analyzed by the Pennsylvania Supreme Court.

If you have any questions or would like more information, please contact Barry S. Brownstein at [email protected].

Home Run for Analysis of Use of Force During Medical Emergencies

Posted on: October 31st, 2017

By: Kevin R. Stone and Sara E. Brochstein

I’m bad at baseball.  When I step in the batter’s box, I might as well have two strikes against me before the pitcher unleashes his first fastball.  For me, it’s no big deal; I’m destined to strike out anyway.  The Sixth Circuit, however, recognizes that’s no way to treat law enforcement officers faced with the difficult choice to use force in response to medical emergencies.

In determining whether a Fourth Amendment violation has occurred in excessive force cases, the evidence must demonstrate that the officer’s actions were “objectively reasonable” under the totality of the circumstances.  The Supreme Court has provided three over-arching factors to consider in this analysis: (1) the severity of the crime; (2) whether the suspect actively resisted or evaded arrest; and (3) whether the suspect posed an immediate threat.  (The Graham factors.)

When responding to a medical emergency, however, two of those factors usually don’t exist: no crime (strike one) and, by extension, no resisting or evading arrest (strike two).  Thus, the officer’s choice to use force may rest on a single factor, which the officer may have to assess and act on in a split second.  Acknowledging that the Graham factors are not exhaustive and that medical emergencies create unique challenges for law enforcement officers, the Sixth Circuit, in Hill v. Miracle, established a list of additional non-exhaustive factors to consider when determining whether an officer’s use of force is objectively reasonable in such situations:

(1) Was the person experiencing a medical emergency that rendered him incapable of making a rational decision under circumstances that posed an immediate threat of serious harm to himself or others?

(2) Was some degree of force reasonably necessary to ameliorate the immediate threat?

(3) Was the force used more than reasonably necessary under the circumstances (i.e., was it excessive)?

The court explains: “If the answers to the first two questions are ‘yes,’ and the answer to the third question is ‘no,’ then the officer is entitled to qualified immunity.  These questions and answers serve as a guide to assist the court in resolving the ultimate issue of whether the officers’ actions are objectively reasonable in light of the facts and circumstances confronting them.”

The Sixth Circuit’s opinion drives home the principle that rote application of the Graham factors may cause an unfair strike out.  Objective reasonableness requires an examination of the totality of the circumstances and deserves a careful, fact-specific assessment in each case.  Whether other circuits will hit home runs and also apply these new factors remains to be seen.

If you have any questions or would like more information, please contact Kevin R. Stone at [email protected] or Sara E. Brochstein at [email protected].

Federal Circuit Scorecard – Title VII & Sexual Orientation Discrimination

Posted on: October 13th, 2017

By: Michael M. Hill

A Georgia case is in the running to be the one the Supreme Court uses to resolve the question of whether Title VII of the Civil Rights Act of 1964 (which prohibits employment discrimination on the basis of sex and certain other characteristics) also includes discrimination on the basis of sexual orientation. The Supreme Court is widely expected to take on this issue at some point, but no one knows exactly when or which case it will be.

In Evans v. Georgia Regional Hospital, 850 F.3d 1248 (11th Cir. 2017), a former hospital security guard alleged she was harassed and otherwise discriminated against at work because of her homosexual orientation and gender non-conformity.  While the trial court dismissed her case, the Eleventh Circuit Court of Appeals partially reversed.  The Eleventh Circuit held that Evans should be given a chance to amend her gender non-conformity claim, but it affirmed dismissal of her sexual orientation claim.

The issue, in most federal circuits, is a distinction between (1) claims of discrimination on the basis of gender stereotypes (e.g., for a woman being insufficiently feminine), which the Supreme Court has held is discrimination based on sex, and (2) claims of discrimination based on sexual orientation, which all but one federal circuit has held is not discrimination based on sex.

At present, this is how things stand now:

  • In the Seventh Circuit (which covers Illinois, Indiana, and Wisconsin), sexual orientation discrimination does violate Title VII.
  • In every other federal circuit, sexual orientation discrimination does not violate Title VII.
  • But no matter where you are, the U.S. Equal Employment Opportunity Commission (EEOC) takes the position that sexual orientation discrimination does violate Title VII.

To make matters more confusing, the full court of the Second Circuit (which covers New York, Connecticut, and Vermont) is considering whether to affirm its past position that sexual orientation is not protected by Title VII or to join the Seventh Circuit. In that case, the EEOC of course is arguing that sexual orientation is a protected category, but the U.S. Department of Justice has filed an amicus brief to argue that sexual orientation is not protected.  In the words of the Department of Justice, “the EEOC is not speaking for the United States.”

The long and short of it is that, until the Supreme Court weighs in, employers need to be mindful of the federal law as interpreted in their circuit, while also understanding that the EEOC enforces its position nationwide whether or not the local federal circuit agrees with it.

If you have any questions or would like more information, please contact Michael M. Hill at [email protected].

Repaying Old Debts – The Supreme Court Limits FDCPA Liability for Scheduling Time-Barred Claims in Bankruptcy

Posted on: October 9th, 2017

By: Matthew M. Weiss

Earlier this year, the Supreme Court handed a victory to debt collectors when it held that the scheduling of a time-barred claim in bankruptcy was not a violation of the Fair Debt Collection Practices Act (FDCPA).

In Midland Funding, LLC v. Johnson, Aleida Johnson filed for personal bankruptcy under Chapter 13 of the Bankruptcy Code in the Southern District of Alabama. Midland Funding, LLC (Midland) filed a proof of claim asserting a credit card debt of $1,879.71. Johnson’s last charge on the account was in 2003, more than 10 years before Johnson’s bankruptcy filing, even though Alabama’s statute of limitations on the collection of debts was six years. Johnson objected to the claim and it was disallowed. Johnson then brought suit against Midland seeking actual damages, statutory damages, attorneys’ fees, and costs for a violation of the FDCPA, 15 U.S.C. § 1692k. After the district court determined that the FDCPA was inapplicable and dismissed the lawsuit, the Eleventh Circuit Court of Appeals reversed the decision, and Midland appealed to the Supreme Court.

In a 5-3 decision (with Justice Gorsuch abstaining), Justice Breyer, writing for the majority, first determined that a claim under the Bankruptcy Code was a “right of payment”, and that a creditor has the right to payment of a debt even after the limitations period expires. The Court also noted that a claim does not automatically have to be enforceable. Further, the definition of claim under the Bankruptcy Code provided that the claim could be “contingent” or “disputed”. Additionally, the Court found that the running of the statute of limitations was meant to be asserted as an affirmative defense by the debtor after the creditor asserted a claim.

Turning to whether the filing of a time-barred claim was “unfair” or “unconscionable” under the FDCPA, the court distinguished bankruptcy from civil cases in which creditors were subject to FDCPA liability for bringing suit on time-barred claims because “a consumer might unwittingly repay a time-barred debt” in a civil case. The Court reasoned that unlike civil cases, the consumer initiates bankruptcy proceedings, and are unlikely to pay a stale claim just to avoid going to court. Additionally, the Court said that the presence of knowledgeable trustees and procedural rules provided additional protection to debtors. The Court also noted that by filing a stale claim that was subsequently disallowed, that claim would be forever discharged, removing the debt from the debtor’s credit report and “potentially affecting an individual’s ability to borrow money, buy a home, and perhaps secure employment.” For all of these reasons, the Court concluded that the filing of a stale claim in bankruptcy was not “unfair” or “unconscionable” under the FDCPA.

The Supreme Court’s decision in Midland Funding legitimizes a major tool of debt collectors, who now can freely assert time-barred claims in bankruptcy proceedings with the hope that both the debtor and the bankruptcy trustee fail to assert a statute of limitations defense. As Justice Sotomayor wrote in her dissent, because debt buyers assume that a certain percentage of old debt will be written off as uncollectible, the Supreme Court’s decision will likely make consumer debt a more valuable commodity based on the assumption that a greater percentage of that debt will be collected in bankruptcy proceedings. Sotomayor had specifically predicted that “debtor collectors may file claims in bankruptcy proceedings for stale debts and hope that no one notices that they are too old to be enforced.”

In light of the Supreme Court’s decision, bankruptcy debtors should be extra vigilant about reviewing claims filed in their bankruptcy cases to determine whether a statute of limitations affirmative defense can be asserted. Conversely, creditors should not become too comfortable because, even though the Supreme Court’s decision precludes FDCPA liability for filing time-barred bankruptcy claims, the Supreme Court expressly declined to extend its holding to creditors who assert time-barred claims outside of bankruptcy.

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