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Archive for January, 2014

The Dirty Truth From TripAdvisor

Posted on: January 24th, 2014

By: Matt Foree

One cannot browse the internet without encountering a website touting a “10 Best” or “10 Worst” list.  These lists are particularly prevalent at the beginning of the year as websites about music, movies, travel, etc. categorize and repackage their findings from 2013.  These lists drive business to those who find themselves at the top of the list and, presumably, cause readers to avoid those at the bottom of the list.  Do you have any legal recourse if you find yourself at the top of a negative list?  Maybe not.

A resort hotel in Pigeon Forge, Tennessee, Grand Resort Hotel and Convention Center (“Grand Resort”), found itself at the top of an unfortunate list – TripAdvisor’s “Dirtiest Hotels” list.  TripAdvisor is an on-line travel website that collects user-generated information regarding travel, including hotels, restaurants and attractions.  TripAdvisor published Grand Resort’s number one position on the list, as reported by travelers on TripAdvisor, including a photograph of a ripped bedspread, a quotation about “dirt at least ½” thick in the bath tub,” and a thumbs-down image next to the statement “87% of reviewers do not recommend this hotel.”

Grand Resort’s sole proprietor (“Seaton”) filed suit, alleging, among other things, libel and tortious interference with prospective business relationships.  Seaton alleged that TripAdvisor published the statements to cause the public to cease doing business with Grand Resort and to cause injury to its reputation by false and misleading means.  Seaton sought $5 million in damages and another $5 million in punitive damages.

The district court dismissed the case, holding that Grand Resort did not state a plausible claim for defamation because TripAdvisor’s placement of Grand Resort on the list is not capable of being defamatory, because the list constitutes protected opinion.  The court found that the list used loose, hyperbolic language and its tenor undermines any assertion by Seaton that it communicates anything more than the opinions of TripAdvisor’s users.  The Sixth Circuit upheld the district court’s ruling, holding that the list “cannot reasonably be interpreted as stating, as an assertion of fact, that Grand Resort is the dirtiest hotel in America.”

In this case, the obvious hyperbole of the opinions made the Court’s decision easier.  As this is a developing area of the law, the answer may not always be so clear.  If you believe that you have been the subject of a defamatory statement on the internet, feel free to reach out to us.

Immigration Blog: Lessons from ICE’s I-9 Audits in 2013

Posted on: January 24th, 2014

By: Kelly Eisenlohr-Moul

Mandatory E-Verify usage in Georgia just entered its sixth month, and my office is receiving a large number of inquiries regarding compliance issues.

In order to assist with your 2014 compliance plans, I am offering a few observations on Form I-9 penalty trends in 2013.  These are taken from the Immigration & Customs Enforcement (ICE) fines leveled against employers in 2013:

  • High risk industries: hospitality, staffing, retail/distribution, and construction services received the largest number of audits.  If you belong to these sectors, exercise special caution!
  • Fight back!  Employers who appealed ICE’s Notices of Intent to Fine to the Office of the Chief Administrative Hearing Officer (OCAHO) saw an average fine reduction of 46.5%
  • Winning arguments: OCAHO based most of its fine reductions on the poor financial conditions and small size of the employers appealing their fines
  • Losing arguments: employers arguing “lack of knowledge” and attempting to prove the Form I-9 violations were “technical” instead of “substantive” were nearly uniformly shot down by OCAHO

Of course, your best course of action is to prevent ICE from knocking on your door in the first place.  Read my thoughts on preventative measures here.


Medical Device Litigation: Federal Court in Minnesota Separates Medical Product Liability Claims Against Medical Device Manufacturer From Medical Malpractice Claims Against Medical Facilities

Posted on: January 17th, 2014

By: Michael Eshman  

In In re Stryker Rejuvenate and ABG II Hip Implant Products Liability Litigation, multi-district litigation (“MDL”) involving Stryker Rejuvenate and ABG II Hip Implant Products, the federal district court in Minnesota handling the MDL recently severed one plaintiff’s medical malpractice claims against California medical facilities and his product liability claims against the hip implant manufacturer defendants.  In severing the claims, the court found, “[t]he joinder of any malpractice, negligence, or misrepresentation claim against the Hospital Defendants with the other product liability claims (that are properly asserted against the device manufacturer) is inappropriate because the claims do not involve common questions of law or fact and assert joint, several, or alternative liability “arising out of the same transaction, occurrence, or series of transactions or occurrences.”   The court’s ruling allowed the product liability claims against the hip implant manufacturer defendants to proceed in federal court, while the medical malpractice action against the hospital defendants was remanded to state court in California.

In light of this ruling, even if a claim appears superficially to defeat diversity jurisdiction, medical device manufacturers may still have proper grounds to move for removal of the case against it to federal court.

If you have any questions about this case or the handling of your medical device and/or medical malpractice case, don’t hesitate to contact any of the attorneys on our Healthcare Litigation and Medical Device Litigation teams.

“Blurred Lines” and Insurance Coverage

Posted on: January 17th, 2014

By: Seth Kirby

Unless you were living under a rock for all of 2013, it was impossible to avoid hearing Robin Thicke’s hit song “Blurred Lines.”  During the summer of 2013 it was played on every radio format on a near constant rotation.  Thicke performed it on the Today Show, he performed it using schoolhouse instruments on Late Night with Jimmy Fallon and gave a now infamous performance of the song with Miley Cyrus on MTV.  While the song generated controversy due to its lyrical content, there is no question that it was a very catchy tune.  But have you ever wondered, why is this song so appealing to the ear?  It seems that people just can’t help but bob their heads and futilely try to sing along with Thicke’s high pitched vocals.

Some have suggested that the reason the song feels so familiar and welcomed is because it is a rip-off of the Marvin Gaye song “Got to Give it Up.” Indeed, the Gaye family complained of impermissible similarities between the songs and asked EMI (Gaye’s record label) to directly pursue a copyright infringement action on behalf of the Gaye estate.  EMI refused to institute the action and were later sued by the Gaye family for its inaction.  The Gaye’s suit against EMI was settled this week, but the underlying dispute between the Gaye family and Thicke has not yet been resolved.

What does this have to do with insurance?  The answer lies in the procedure utilized by Thicke to get out in front of this particular controversy.  Rather than simply wait to be sued by the Gaye family, Thicke and his label affirmatively filed a declaratory judgment action seeking the court’s declaration that “Blurred Lines” does not impermissibly infringe on any other copyrights.  By doing so, Thicke and his label were able to frame the dispute for the court and affirmatively assert their argument for why their song was unique.  In essence, they have argued that “Blurred Lines” is a homage to the style and sound of Marvin Gaye as well as the sound and style of the bands Parliament and Funkadelic.  Thicke noted that these are artists who he respects and reveres,  but claims that he did not copy anything other than their musical style, which is not subject to copyright protection.  Of course, the Gaye family filed a counter-claim in this action asserting their claims of copyright infringement, but they occupy the status of “defendant” and ironically missed an opportunity to “set the tone” of the litigation.

The declaratory judgment action utilized by Thicke is an invaluable tool for an insurance company faced with a difficult and/or contested coverage determination.  Affirmatively presenting a coverage dispute to a court in a declaratory judgment action takes time and resources, but, it allows the carrier to frame the dispute in the most favorable light possible, thereby maximizes the chances for success.  It also provides protection by establishing that the carrier is seeking a judicial determination of a contested issue rather than simply standing on its own coverage analysis.  I applaud Thicke and his label for utilizing a declaratory judgment action to get in front of their controversy with the Gaye family.  It is a white hat that carriers should don early and often.

Where’s The Beef? In California, Claims Brought By Residents Who Do Not Allege Compensatory Damages May Not Be Covered By An HOA’s Insurance Policy

Posted on: January 14th, 2014

By: Nick Rogers

Insurance companies may not have a duty to defend homeowner associations or their volunteer board members when homeowners do not demand compensation. I have represented a number of clients sued for violating provisions of California’s Davis-Stirling Act that regulate homeowner association elections. In such cases, plaintiffs often request injunctive and declaratory relief invalidating a prior election or an order directing an association to hold a new election and do not demand compensatory damages. A recent California appellate opinion may have broad ramifications on coverage issues implicated by statutory claims arising from certain statutory provisions. (San Miguel Community Association v. State Farm General Insurance Company (2013) 220 Cal.App.4th 798.)

In San Miguel Community Association, two residents complained their association was not enforcing parking restrictions, replacing fire signs, or providing adequate notice of election results. The residents demanded mediation, which proved unsuccessful and then filed suit. At each stage of the litigation the association tendered the claim to State Farm. State Farm denied the claim because in the absence of any demand for compensatory damages there was no allegation of “bodily injury, property damage, personal injury, or advertising injury” as required under their general liability policy or any request for “monetary damages” as required under their directors and officers policy.

The residents’ amended complaint, however, sought compensatory damages. This time State Farm agreed to defend the lawsuit, but specified its obligation to provide defense commenced when the association tendered the amended complaint. State Farm refused to compensate the association for costs incurred in defending the case prior to that time. Upon resolution of the underlying civil action, the association sued State Farm alleging breach of contract and bad faith. State Farm moved for summary judgment contending the policy did not obligate it to provide a defense to any claim unless “covered damages” were sought by the residents, which did not occur until the amended complaint was filed. The trial court entered judgment in State Farm’s favor and an appellate court affirmed.

In light of statutory provisions of the Davis-Stirling Act including, but not limited to Civil Code section 1363.09 (a), [Civil Code section 5145 (a) as of January 1, 2014], which affords a plaintiff the right to solely seek injunctive relief for violation of provisions regulating homeowner association elections, the San Miguel Community Association opinion may effect coverage determinations in 2014. It may also result in the creative theories for compensatory damages in order to trigger insurance coverage for Davis-Stirling claims. Volunteer board members, as well as members of any homeowners’ association subject to provisions of the Davis-Stirling Act, should be aware that in light of this opinion certain claims in California may not be covered under their insurance policies.