BSCR Firm News/Blogs Feed Jul 2019 00:00:00 -0800firmwise Update: Hopping On The Missouri Bandwagon? Not So Fast Out Of State Litigants. Jul 2019Missouri Law Blog<p>In <a href="file:///C:/Users/LJR/Desktop/Second%20Update%20to%20March%202019%20Blog.docx#%20;an=89968&amp;format=xml&amp;stylesheet=blog&amp;p=5258">this March 18, 2019 blog post</a> and in this <a href=";an=91244&amp;format=xml&amp;stylesheet=blog&amp;p=5258">May 20, 2019 blog post</a> we reported on important pending legislation that could substantially change Missouri&rsquo;s venue rules.</p> <p>In May, the House passed the venue and joinder bill (<a href=";BillID=29">Senate Bill 7</a>) by a 100-46 vote. The bill primarily aims to restrict non-Missouri plaintiffs from joining their claims, in the same lawsuit, with those of a Missouri resident, where the non-residents&rsquo; claims have no legal nexus to Missouri.&nbsp;Read more <a href="file:///C:/Users/LJR/Desktop/Second%20Update%20to%20March%202019%20Blog.docx#%20;an=89968&amp;format=xml&amp;stylesheet=blog&amp;p=5258">here</a> and <a href="file:///C:/Users/LJR/Desktop/Second%20Update%20to%20March%202019%20Blog.docx#;BillID=29">here</a>.&nbsp;Senate Bill 7, however, was still waiting for the Governor&rsquo;s signature to become law in May.</p> <p>In case you missed the news (again), look no further&hellip;..</p> <p>Governor Mike Parson has officially <a href="">signed Senate Bill 7</a> (along with three other tort reform bills) into law on July 10, 2019.&nbsp;This move was anticipated based on prior, favorable <a href="">statements</a>&nbsp;he made about the bill.&nbsp;</p> <p>Opponents of the bill continue to believe that the passage of this bill <a href=";utm_campaign=a8d86d2c77-RSS_EMAIL_CAMPAIGN&amp;utm_medium=email&amp;utm_term=0_226e302527-a8d86d2c77-88888931">&ldquo;will harm state citizens by favoring corporations over individuals.&rdquo;</a> Proponents of the bill, now law, believe that this move will make Missouri <a href=";utm_campaign=a8d86d2c77-RSS_EMAIL_CAMPAIGN&amp;utm_medium=email&amp;utm_term=0_226e302527-a8d86d2c77-88888931">&ldquo;a pro-business state.&rdquo;</a></p> the East to the West, Does Arbitration in Missouri Reign Best? Missouri Courts Uphold and Invalidate Arbitration Agreements Jun 2019Missouri Law Blog<p>This past May, the Missouri Supreme Court, Missouri Court of Appeals, and both United States District Courts in Missouri analyzed the validity and enforceability of arbitration provisions. Three key concepts have emerged from these recent decisions:</p> <p>(1) A challenge to the delegation clause in an arbitration agreement (one that says the arbitrator gets to decide who decides whether the dispute is fit for arbitration) must be pleaded separately from a challenge to the contract</p> <p>(2)&nbsp;&nbsp; Incorporation of the AAA rules in an arbitration agreement generally constitutes clear and unmistakable evidence of the parties&rsquo; intention to arbitrate.</p> <p>(3)&nbsp;&nbsp; Under long-standing Missouri law, an employee&rsquo;s continued employment, without more, does not in and of itself constitute adequate consideration for an agreement to arbitrate.</p> <p><b>Consideration for the Entire Contract is Separate from Consideration for the Delegation Provision</b><br /> <i><br /> Newberry v. Jackson</i>, 2019 WL 2181859 (Mo. banc. 2019)</p> <p>The Missouri Supreme Court affirmed, <i>en banc</i>, the circuit court&rsquo;s motion to compel arbitration and stay court proceedings. Employees brought discrimination and retaliation claims against their former employer, Dollar General. The employer responded with Motions to Compel Arbitration and Stay Further Proceedings, to which the employees responded that there was no consideration for the arbitration agreements. More specifically, the employees claimed that the delegation provisions were unconscionable and there was no clear and unmistakable evidence of the parties&rsquo; intent to incorporate them. Although the employees admitted to signing the documents and knew they would be bound to arbitration, they did not necessarily understand the documents. Nevertheless, the circuit court sustained the motions to compel arbitration and stay the proceedings under the Missouri Supreme Court&rsquo;s <i>Pinkerton </i>decision (which upheld a delegation clause in an arbitration agreement), and alternatively held the arbitration agreements valid because they were not unconscionable on their face and supported by consideration by mutuality of enforcement and continued at-will employment.</p> <p>The Missouri Supreme Court accepted the case for review, and affirmed its earlier <i>Pinkerton </i>decision, which it found to be consistent with the U.S. Supreme Court decision in <i>Rent-A-Ctr v. Jackson</i>. The court found the employee&rsquo;s allegations of unconscionability to be inadequate because they challenged the entire contract&mdash;not the delegation provision, specifically. Under <i>Rent-A-Center</i>, the &ldquo;delegation clause must be treated as a separate contract within the larger arbitration contract and must be challenged on an additional ground or basis beyond the fact it is contained in an arbitration contract that the party also contends is invalid.&rdquo; The court found that because the lack of consideration that the employees assert is the same lack of consideration they claim should invalidate the overall arbitration agreements, &ldquo;they do not raise a unique challenge to the delegation clauses. Accordingly, the delegation provisions are valid,&rdquo; and the employer &ldquo;did not have a burden in the circuit court to show legally sufficient consideration.&rdquo;</p> <p><b>Incorporation of AAA Rules Is Clear and Unmistakable Evidence of Intent to Arbitrate</b></p> <p><i>Hughes v., </i>2019 WL 2260666 (Mo. App. Ct. W.D. May 28, 2019) (not officially published)</p> <p>Although Missouri state courts have consistently held that continued at-will employment alone does not constitute consideration for an arbitration agreement, they continue to hold that the incorporation of the AAA rules in an arbitration agreement shows clear and unmistakable evidence of intent to arbitrate. In this consumer action, the Missouri Court of Appeals for the Western District reversed the trial court&rsquo;s denial of a motion to compel arbitration.&nbsp;Consumers brought an action against for allegedly releasing their private health information to third parties without their expressed permission. The company responded with a Motion to Compel Arbitration and Stay Litigation which was subsequently denied by the circuit court. The Court of Appeals reversed and remanded because the consumers failed to separately contest the validity of the delegation provision.</p> <p>The court reviewed the case <i>de novo </i>because arbitrability is a matter of contractual interpretation, which is a question of law. The court had to first determine whether the parties&rsquo; agreement contained a provision that clearly and unmistakably delegated threshold issues of arbitrability to the arbitrator. The provision in the agreement incorporated the AAA rules, which has been held to constitute clear and unmistakable evidence of the parties&rsquo; intent to arbitrate. The court then had to determine the validity of the provision. The Missouri Court of Appeals also reasoned that under <i>Rent-A-Center</i>, the validity of the delegation provision must be challenged separately from a challenge against the agreement, as a whole.</p> <p><i>Hobby Lobby Stores, Inc. v. Bachman</i>, 2019 WL 2331006 (E.D. Mo. May 23, 2019)</p> <p>In this employment discrimination case, the United States District Court of Missouri for the Eastern District had to determine if the Mutual Arbitration Agreement was valid and enforceable in order to grant the employer&rsquo;s Petition to Compel Arbitration. For the reasons discussed above<i>, </i>the court held that because the Mutual Arbitration Agreement incorporated the AAA rules and the employees had not challenged the delegation provision specifically, the agreement was, indeed, enforceable.</p> <p><b>Continued At-Will Employment and Presentation of Agreement Does Not Manifest Mutual Assent</b></p> <p><i>Wilbur v. Securitas Security Services USA, Inc. </i>2019 WL 1980703 (W.D. Mo. May 3, 2019)</p> <p>In this employment discrimination case, the United States District Court for the Western District of Missouri had to determine if there was a valid arbitration agreement and if the dispute fell within the terms of the agreement. As the party seeking to compel arbitration, the employer bore the burden of proving the existence of the valid and enforceable arbitration agreement. The &ldquo;Dispute Resolution Agreement Acknowledgment&rdquo; stated, <i>inter alia, </i>that all claims against the parties must be solved by Arbitration instead of in a court of law. The employee signed and printed his name; however, the lines for the employer representative signature and printed name were left blank. The employer argued that even though the agreement lacked their signature, the presentation of the agreement, the employee&rsquo;s acceptance of the agreement, and their continued employment provided adequate consideration and gave rise to mutual assent. The court cited Missouri state court precedent, in <i>Baier v. Darden Restaurants,</i> in holding that an &ldquo;acknowledgment&rdquo; of this type was not adequate evidence of mutual assent to arbitrate, and that continued employment, without more, did not constitute adequate legal consideration for an agreement to arbitrate.</p> <p><b>Significance</b></p> <p>Missouri has continued to hold that incorporation of the AAA Rules is clear and unmistakable evidence of the parties&rsquo; intent to engage in arbitration. When challenging arbitration, the delegation provision must be challenged <i>separately</i> from a challenge to the whole contract. Presentation of an arbitration agreement to an employee, the employee&rsquo;s acknowledgement of receipt, and the employee&rsquo;s continued at-will employment are not enough to form an enforceable arbitration agreement. An employer should always obtain the employee&rsquo;s expressed assent - i.e., a signature agreeing to the terms of the arbitration provision, and not merely acknowledging its receipt.&nbsp;Additionally, an employer should always specifically express its agreement in order to avoid a mutual assent challenge.<br /> <br /> <em>* Kelly M. &ldquo;Koki&rdquo; Sabat&eacute;s, Summer Law Clerk,&nbsp;assisted in the research and drafting of this post.&nbsp;Sabat&eacute;s is a&nbsp;rising 3L student at the University of Missouri-Columbia.</em></p> References- Is there a duty in Missouri to refrain from making a negligent recommendation to a prospective employer? Jun 2019Missouri Law Blog<p>In recent years, the plaintiffs&rsquo; employment bar has continued to explore new and more creative avenues to state claims in Missouri. In <i>Doe v. Ozark Christian College</i>, Plaintiff filed a negligence action against Ozark Christian College, claiming the college negligently recommended a prospective employee to the employer church, which directly resulted in the employee then injuring Plaintiff after two years. The employee in question had been a student at Ozark Christian College from 1982 to 1989. The employer, a church, contacted Defendant for recommendations on filling an open position. Plaintiff alleged that based upon Defendant&rsquo;s positive recommendation, the church hired the employee in 2004. Plaintiff further alleged that as a result of that employment, employee then sexually abused Plaintiff from 2006 through 2010.</p> <p>The Southern District of the Missouri Court of Appeals, however, affirmed the trial court&rsquo;s ruling that Missouri has not defined or recognized a duty to make recommendations to a prospective employer, whether such a recommendation is done appropriately, or as alleged here, negligently. The Court of Appeals found that while some other states like California, New Mexico and Texas have permitted a &ldquo;negligent job reference&rdquo; cause of action, Missouri had not yet done so. The Court of Appeals reasoned that a whether a duty exists is purely a question of law, either imposed by a controlling statute, ordinance, contract, or by common law. While Plaintiff conceded there was no established case law or statutory authority for such a duty in Missouri, he argued that Missouri should recognize this duty because: Defendant assumed the duty under Section 324A of the Restatement Second of Torts; Section 311 of the Restatement Second of Torts imposes a duty and liability for negligent misrepresentation involving risk of physical harm; other states have recognized this as a duty of common law; and public policy facts support an imposition of this duty upon the Defendant. In a case of first impression, the arguments were ultimately struck down.</p> <p>The Court of Appeals found that Plaintiff&rsquo;s arguments contemplated the declaration of a new common-law duty rather than supporting the existence of a current duty. The threshold application of Section 324A is whether a defendant assumed an obligation or intended to render services for the benefit of an employer. Because Plaintiff lacked proper pleadings to support this legal conclusion, there could be no finding regarding Defendant&rsquo;s undertaking to render services to the employer and therefore application of Section 324A was not appropriate.</p> <p>The Court also held that there is no precedent in Missouri jurisprudence to allow the application of Section 311, where Plaintiff had failed to identify any controlling duty that exists under Missouri common law. While Plaintiff provided case law from New Mexico, Texas, and California in support of his arguments, the Court found numerous contrary cases in Indiana, Kentucky, Washington, Illinois, and New York. The Court of Appeals further stated that it is an error-correcting court, whereas the Supreme Court of Missouri is a law-declaring court and therefore declaration of a new duty is not properly within the Court of Appeals&rsquo; purview.</p> <p>While numerous jurisdictions, like Missouri, that have declined to recognize a duty related to employment recommendations and prospective employers, the rise of these new theories of liability have caused great concern among employers who face a variety of challenges for giving a good reference, a bad reference or an incomplete reference. For this reason, many employers uniformly follow a policy that if asked for a reference for a former employee, they will provide only the person&rsquo;s dates of employment and positions held.&nbsp;Because the law in this area varies from state to state, employers with blanket policies of referrals need to reconsider and make sure that each such request is reviewed using common criteria and guidelines. Questions regarding hiring and employment procedures and policies can always be directed to counsel. &nbsp;</p> <p>John Doe v. Ozark Christian College, SD35573.</p> Court of Missouri Issues First-Of-Its-Kind Ruling Overturning a $2.3 Million Negligent Credentialing Verdict Jun 2019Missouri Law Blog<p><strong>ALERT 06.12.2019:<br /> </strong>The Supreme Court has taken the unusual step of granting rehearing in this case. We will keep you apprised of future developments.&nbsp;<br /> ___</p> <p><strong>ORIGINAL POST 03.28.2019:</strong><br /> In <i>Thomas E. Tharp, et al. v. St. Luke's Surgicenter &ndash; Lee's Summit, LLC</i>, the Supreme Court of Missouri <a href="">overturned</a> a $2.3 million jury verdict in favor of a patient and his wife against a hospital, because there was no proof the hospital negligently granted staff privileges to a surgeon. The opinion is the first from the Supreme Court of Missouri to address the requirements of a negligent credentialing claim.&nbsp;</p> <p>The plaintiff alleged injuries stemming from a surgical procedure to remove his gallbladder.&nbsp;The plaintiff and his wife settled their claims with the surgeon, but went to trial against the hospital alleging it negligently granted privileges to the surgeon.&nbsp;At trial, plaintiffs presented evidence that the surgeon failed to disclose to the hospital all prior malpractice suits.</p> <p>The hospital filed a motion for directed verdict at the close of all evidence on two grounds: (1) There was insufficient evidence to establish it had been negligent; and (2) the act of granting privileges to the surgeon was not the proximate cause of the injury.&nbsp;The trial court denied this motion, and the jury returned a verdict in favor of the plaintiffs.&nbsp;The trial court also overruled the hospital&rsquo;s post trial motion for judgment notwithstanding the verdict, asserting the same arguments set forth above.</p> <p>In a 6-1 decision, the Supreme Court held that a breach of the hospital&rsquo;s bylaws (requiring the surgeon to report all prior malpractice suits) was not enough to support a negligent credentialing claim, and found no evidence that the grant of staff privileges to the surgeon was the proximate cause of the injury.</p> <p>Addressing the nature of the relationship between a modern healthcare facility and its medical staff, the Court observed that &ldquo;Physicians working under staff privileges are typically independent contractors, not hospital employees,&rdquo; and that &ldquo;staff privileges allow physicians to utilize a healthcare facility to admit and treat patients as independent care providers rather than as employees of the facility.&rdquo;&nbsp;Under appropriate circumstances, a negligent credentialing claim can provide an avenue for potential liability against a hospital for injury caused by an independent contractor.&nbsp;The focus is whether the hospital gathered pertinent information to make a reasonable decision as to whether to grant privileges.&nbsp;The proper inquiry is whether the physician was competent and possessed the necessary knowledge, skill and experience to perform his job without creating unreasonable risk of injury to others.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>One of the requirements in the hospital&rsquo;s bylaws was full disclosure of all prior malpractice suits, and the failure to do so was grounds to automatically remove a physician from staff privilege consideration.&nbsp;The evidence at trial showed the surgeon failed to list on his application each suit he had defended over his career, but there was no evidence that addressed the surgeon&rsquo;s qualifications to perform surgery.&nbsp;The plaintiff&rsquo;s own expert admitted there was no &ldquo;magical number&rdquo; of malpractice suits that shows a surgeon is unqualified.&nbsp;Further, plaintiff&rsquo;s expert cited a statistical study showing physician malpractice claim rates vary widely depending, in large part, on the medical specialty involved.&nbsp;&ldquo;Even acts of repeated negligence do not support a finding a surgeon is incompetent when there is no evidence that shows a surgeon generally lacks a professional ability.&rdquo;&nbsp;Thus, the Court found the plaintiffs failed to make a submissible case of negligent credentialing.&nbsp;</p> <p>The Court also found the plaintiffs failed to prove the credentialing of the surgeon was the proximate cause of the injury.&nbsp;It was not enough to prove that but for the credentialing, the surgeon could not have performed the surgery that produced the injury.&nbsp;Rather, the plaintiffs needed to prove the injury was the natural and probable consequence of the surgeon&rsquo;s incompetence.&nbsp;&ldquo;Even a supremely qualified, competent, and careful physician may nevertheless injure a patient through an isolated negligent act.&rdquo;&nbsp;Because plaintiffs failed to show the surgeon was incompetent, they could not prove the injury was the result of the surgeon&rsquo;s incompetence and thus failed to make a submissible case.&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>In this first ruling of its kind in Missouri, the Missouri Supreme Court has provided guidance to Missouri lower courts and practitioners prosecuting or defending a negligent credentialing claim.&nbsp;These claims are difficult to prove, as they require proof beyond that which is required to support a malpractice claim against a physician.&nbsp;Absent credible evidence of a physician&rsquo;s incompetence generally, and the negligent failure of a hospital to discover the incompetence and act accordingly, courts should dispose of these claims via dispositive motion. &nbsp;&nbsp;&nbsp;&nbsp;</p> <p>The opinion did not address whether the negligent credentialing theory conflicts with Mo.Rev.Stat. &sect; 538.210.4, which provides, in part, that &ldquo;[n]o health care provider whose liability is limited by the provisions of this chapter shall be liable to any plaintiff based on the actions or omissions of any other entity or individual who is not an employee of such health care provider . . . .&rdquo;&nbsp;Negligent credentialing liability necessarily depends on the negligent act or omission of a non-employee physician.&nbsp;In the event this argument is raised, it is unclear how the Court would address the apparent conflict of law.&nbsp; &nbsp;</p> Hopping on the Missouri Bandwagon? Not so Fast Out-of-State Litigants. May 2019Missouri Law Blog<p>In <a href="file:///C:/Users/LJR/Desktop/5.16.19-%20Update%20to%20March%202019%20Blog.docx#%20;an=89968&amp;format=xml&amp;stylesheet=blog&amp;p=5258">this March 18, 2019 blog post</a>, we reported on important pending legislation that could substantially change Missouri&rsquo;s venue rules. In case you missed the news, look no further&hellip;.</p> <p>At the beginning of May, the Missouri House passed the venue and joinder bill (<a href=";BillID=29">Senate Bill 7</a>) by a 100-46 vote.&nbsp;The bill primarily aims to restrict non-Missouri plaintiffs from joining their claims, in the same lawsuit, with those of a Missouri resident, where the non-residents&rsquo; claims have no legal nexus to Missouri.&nbsp;Read more <a href="file:///C:/Users/LJR/Desktop/5.16.19-%20Update%20to%20March%202019%20Blog.docx#%20;an=89968&amp;format=xml&amp;stylesheet=blog&amp;p=5258">here</a> and <a href="file:///C:/Users/LJR/Desktop/5.16.19-%20Update%20to%20March%202019%20Blog.docx#;BillID=29">here</a>.</p> <p>Next stop? Governor Mike Parson&rsquo;s desk for signature, which will likely occur based on positive <a href="">statements</a> he has made about the bill: &ldquo;[p]assing venue and joinder reform is a huge win and will provide long overdue relief to Missouri businesses that have been taken advantage of by rampant abuse of our state&rsquo;s legal system&hellip;.I look forward to signing these positive reforms to improve our state&rsquo;s competitiveness, strengthen our legal climate, and bring fairness to our courtrooms.&rdquo;&nbsp;</p> <p>Prior to its passage, while the House did not change the Senate&rsquo;s language, there was not a lack of effort by some opponents in the House.&nbsp;For example, the &ldquo;innocent seller&rdquo; provision of the bill caused a bit of an uproar with some members. This provision discourages lawsuits against a defendant whose liability is based only on its status as a seller in the stream of commerce, permitting such a defendant to seek to be dismissed from a lawsuit. Certain House members challenged this provision in light of the current law not divesting a Missouri court of venue or jurisdiction&nbsp; against&nbsp; such a defendant in the event of a dismissal that was otherwise proper at the time the lawsuit began. However, <a href=";BillID=29">Senate Bill 7</a>removes that protection. Opponents of the bill argued that removing the current provision could force a lawsuit naming such a protected innocent seller entity to move to another county or state. Proponents of the bill countered that this was a prudent way to prevent plaintiffs from unnecessarily suing anybody and everybody in the manufacturing and distribution chain.</p> <p>The House opponents were unsuccessful, <a href=";BillID=29">Senate Bill 7</a> was passed.&nbsp; It will officially become law once it receives the Governor&rsquo;s stamp of approval.</p> on the Missouri Bandwagon? Not so Fast Out-of-State Litigants. Mar 2019Missouri Law Blog<p>In an effort to overhaul Missouri&rsquo;s current venue and joinder laws, Missouri lawmakers introduced <a href=";BillID=29">Senate Bill 7</a>, aimed at restricting non-Missouri plaintiffs from joining their claims in the same lawsuit, with those of a Missouri resident, even though the non-residents&rsquo; claims have no legal nexus to Missouri. The most immediate and prominent impact of the bill, if enacted, would be upon mass tort litigation. The bill also limits the use of joinder in product liability cases, prohibiting joining claims arising out of separate purchases or separate incidents related to the same product.&nbsp;</p> <p>Following its introduction, <a href=";BillID=29">Senate Bill 7</a> was revised to adopt the February 13, 2019 Missouri Supreme Court ruling in <i><a href="">State ex rel. Johnson &amp; Johnson v. Burlison</a></i>. The Missouri Senate subsequently passed the revised version on March 4, 2019.&nbsp; The <i>Johnson &amp; Johnson </i>case dealt with the talcum powder litigation filed in St. Louis City Circuit Courts, involving many plaintiffs with both non-Missouri and Missouri residents, and held that plaintiffs cannot use joinder rules to establish venue in a jurisdiction where it otherwise would not exist.&nbsp;</p> <p><a href=";BillID=29">Senate Bill 7</a> moved onto the House, which recently considered similar legislation. <i>See </i><a href=";year=2019&amp;code=R">House Bill 231</a>.&nbsp; As of March 6, 2019, the Senate bill was read and referred to the Judiciary Committee.&nbsp;</p> <p>Proponents of the legislation say that it will help address &ldquo;a crisis&rdquo; in Missouri&rsquo;s courts, where out of state plaintiffs have flocked to litigate their claims in perceived plaintiff-friendly venues, such as St. Louis City (which has been dubbed a &ldquo;Judicial Hellhole&rdquo; by the defense bar); and Jackson County, which includes the greater Kansas City area.&nbsp; The Senate bill&rsquo;s sponsor, Ed Emery, notes that out of the 13,252 mass tort plaintiffs involved in cases being heard in St. Louis City, only 1,035 are Missouri residents.</p> <p>Proponents of the bill say that its passage will also have significant economic benefits, because Missouri taxpayers are currently paying for out of state plaintiffs to clog the Missouri courts with claims that have nothing to do with Missouri, thus taking up precious judicial resources that would better be used to adjudicate the claims of Missouri citizens.&nbsp; Opponents of <a href=";BillID=29">Senate Bill 7</a> primarily argue that it makes sense to have groups of plaintiffs, who all purportedly suffered similar injuries, to bring their claims together in the same court and lawsuit.&nbsp;</p> <p>The current bill contains &ldquo;grandfather&rdquo; provisions, making the legislation inapplicable to any action that meets two criteria:&nbsp; (1) the action is pending as of February 13, 2019 (when the Supreme Court decided <i>Johnson &amp; Johnson</i>), and (2) the action is set for trial on or before August 28, 2019 (the date on which the new legislation is scheduled to take effect.).&nbsp;</p> If enacted, this legislation may significantly alter the landscape of tort litigation in Missouri, both for litigants, and for the judiciary (especially in St. Louis City and Jackson County).&nbsp; Companies that do business in Missouri should follow its progress closely. County Circuit Court's Fine of City of Raytown Is a Sunshine Law Cautionary Tale Mar 2019Missouri Law Blog<p>A Jackson County, Missouri, Circuit Court Judge ordered the City of Raytown - specifically its City Clerk - to pay more than $42,000 in attorney fees and civil penalties after ruling in July 2018 that the city violated Missouri&rsquo;s Sunshine Law. The City Clerk denied the release of records in an apparent attempt to shield the city from litigation involving the design of one of the city&rsquo;s intersections.</p> <p>Several months after Plaintiff Paula Wyrick&rsquo;s mother died in a vehicle crash at an intersection in Raytown. Wyrick requested records from the City about the intersection, including its design, any traffic or other diagnostic studies conducted there, and any complaints about the safety of or accidents occurring at or around the intersection.&nbsp; On multiple occasions, the City Clerk refused to produce the requested records, asserting all requests fell within the Sunshine Law&rsquo;s litigation exception.&nbsp; The litigation exception protects, in part, documents related to potential legal actions or litigation involving a public governmental body.&nbsp;</p> <p>Wyrick filed suit seeking declaratory and injunctive relief against the City Clerk.&nbsp; Wyrick moved for summary judgment asserting that the City Clerk, on behalf of her office, &ldquo;took a position completely unheard of under Sunshine Law, namely, that a specific category of records can be closed only to Plaintiff and her lawyers, but otherwise open to anyone else.&nbsp; Put another way, the City Clerk has admitted that she would search for and produce records responsive to Paula Wyrick&rsquo;s requests, if only the requests would come from a different person.&rdquo;</p> <p>The City Clerk countered that Wyrick only sought the records to use in potential litigation against the City of Raytown as a result of her mother&rsquo;s death.&nbsp; In the face of this clear and unequivocal threat of litigation in this matter, the City Clerk argued she was justified in closing and refusing to produce the records.</p> <p>In July 2018, Jackson County Circuit Court Judge S. Margene Burnett granted Wyrick partial summary judgment and ordered production of the design records and traffic studies conducted at the intersection.&nbsp; She ruled that while Wyrick admitted she was contemplating litigation against the City, the City Clerk&rsquo;s use of the Sunshine Law as a &ldquo;shield to hide behind rather than shed light on potentially inappropriate governmental activity&hellip;is precisely why the Sunshine Law was enacted.&rdquo;&nbsp;</p> <p>Initially, Judge Burnett declined to order civil penalties against the City Clerk, finding that the refusal to comply was done under an incorrect reading of Missouri law.&nbsp; However, the Judge reconsidered in November 2018 after hearing additional arguments, which convinced her that the city clerk&rsquo;s actions rose to a knowing and purposeful violation of the Sunshine Law.&nbsp; The Clerk had testified that she &ldquo;implemented a policy to refuse the production of any requested documents to any citizen if that citizen has filed a notice of claim against the City of Raytown, regardless of the nature of the document requested.&rdquo;&nbsp; The Court awarded $38,550.00 in attorney fees and assessed civil penalties of $4,000.00, representing $1,000.00 for each of the four distinct violations of the Sunshine Law established by the evidence.&nbsp; The City filed a Notice of Appeal on February 14, 2019.</p> <p>This ruling is likely to encourage municipalities to take a closer look at their open-records policies to ensure they are encouraging the spirit of openness which is embodied in the state&rsquo;s Sunshine Law.</p> <i>Paula Wyrick v. Teresa M. Henry, in her capacity as City Clerk of the City of Raytown</i>, No. 1716-CV-24321, Circuit Court of Jackson County, Missouri.&nbsp;&nbsp; Court of Appeals Rules Venue Proper Only in County Where Decedent First Ingested Opioid Pain Medication and Not Where Drug Prescribed Feb 2019Missouri Law Blog<p>In <i>State ex rel. Mylan Bertek Pharmaceuticals, Inc. v. Vincent</i>, the Missouri Court of Appeals, Eastern District, <a href=" ">held </a>that, in a case alleging wrongful death, medical malpractice, and pharmaceutical liability, venue was proper only in the county where the decedent first ingested opioid pain medication, rather than the county where a defendant prescribed it. &nbsp;</p> <p>Decedent&rsquo;s widow filed suit in St. Louis County, alleging that defendants&rsquo; negligence caused her husband to become addicted to opioid pain medication, leading to unbearable withdrawal symptoms that caused him to commit suicide.&nbsp;The defendants were the physician who prescribed the medication for a back injury and several pharmaceutical companies that manufactured it. &nbsp;The plaintiff alleged the physician defendant first prescribed opioids at his medical office located in St. Louis County and continued to do so over a period of twelve years.&nbsp;Later, while travelling in Florida, the decedent ran out of medication and could not refill it.&nbsp;Plaintiff alleged the decedent suffered intense withdrawal symptoms and, as a result, shot himself in the chest and died.&nbsp;</p> <p>One of the pharmaceutical company defendants filed a motion to transfer venue asserting that venue was proper only in St. Charles County because that was the county where the decedent lived and first ingested the medication. &nbsp;Plaintiff successfully opposed the motion, arguing that St. Louis County was the proper venue because that was where he was first exposed to the physician defendant&rsquo;s negligent prescribing practices in his medical office.&nbsp;</p> <p>The appellate court analyzed &sect; 508.010, RSMo, which sets venue in the county where the plaintiff was &ldquo;first injured.&rdquo;&nbsp;Section 508.010.14 provides that a plaintiff is &ldquo;considered first injured where the trauma or exposure occurred rather than where the symptoms are first manifested.&rdquo;&nbsp;</p> <p>The court explained the alleged bodily injury to the decedent &ndash; opioid addiction, resulting pain and suffering, and ultimately death &ndash; could only have occurred when he ingested the medication.&nbsp;In other words, no bodily injury could have occurred at the time of prescribing, and it was not until the decedent ingested the medication that he exposed his body to the ill-effects of the drug.&nbsp;Under that analysis, venue was proper only in St. Charles County (where decedent first ingested the drug) and not in St. Louis County (where the physician prescribed the drug).&nbsp;&nbsp;</p> <p>Accordingly, the appellate court reversed the trial court&rsquo;s order, issued a writ of prohibition directing the St. Louis County judge not to proceed with the case, and remanded with instructions to transfer to St. Charles County.&nbsp;The court&rsquo;s analysis demonstrates that: (1) under Missouri venue law, the key inquiry is the location where the injury occurred, rather than where the allegedly negligent conduct occurred; and, (2) the alleged injury and alleged negligence do not necessarily occur in the same location.&nbsp;</p> <p class="MsoNormal">The opinion does not reference Section 538.232, which states that, in any action against a health care provider, &ldquo;the plaintiff shall be considered injured by the health care provider only in the county where the plaintiff first received treatment by a defendant for a medical condition at issue in the case.&rdquo;&nbsp; It is unclear what effect that section, if discussed, would have had on the court&rsquo;s analysis.&nbsp; &nbsp; &nbsp;<o:p></o:p></p> trials in the Kansas City area slightly increase in number, but jury verdicts decline in amount Feb 2019Missouri Law Blog<p>Data from the Greater Kansas City Jury Verdict Service shows that while there were slightly more jury trials in 2018 than in 2017, the average monetary awards for Plaintiffs declined significantly. Every year, the Greater Kansas City Jury Verdict Service issues a &ldquo;Summary and Statistics of Jury Verdicts&rdquo; for the greater Kansas City area. The report includes verdicts from the Kansas City division of the U.S. District Court for the Western District of Missouri; the Kansas City branch of the U.S. District Court for the District of Kansas; and state courts in Jackson, Clay and Platte counties in Missouri; and Johnson and Wyandotte counties in Kansas.&nbsp;The statistics in 2018 indicate various shifts from 2017.</p> <p><b>More Trials, with a Lower Percentage of Plaintiffs&rsquo; Verdicts</b></p> <p>The Jury Verdict Service&rsquo;s annual summary reported on 104 trials in 2018, compared to 97 in 2017.&nbsp; Previously, there were 113 trials in 2016, 110 trials in 2015, and 133 trials in 2014.&nbsp;</p> <p>Because trials often involve multiple claims and multiple verdicts, the verdict statistics are based on the claims adjudicated, rather than simply the number of cases.&nbsp;The 104 trials in 2018 resulted in 168 verdicts; and the 97 trials in 2017 resulted in 193 verdicts.&nbsp;</p> <p style="text-align: left;"><img src=" of Trials and Verdicts_2018.png" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="450" height="200" /></p> <p>While the number of jury trials slightly increased in 2018, the percentage of Plaintiffs&rsquo; verdicts decreased very slightly.&nbsp;In 2018, 48% of the verdicts were for Plaintiffs compared to 49% for Plaintiffs in 2017.&nbsp;These figures go against what had been a trend of increases in the percentage of Plaintiffs&rsquo; verdicts dating back to 2014.</p> <p style="text-align: left;"><img src=" of Plaintiffs Verdicts_2018.png" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="450" height="200" /></p> <p><b>Decrease in Average Monetary Awards for Plaintiffs</b>&nbsp;</p> <p>The overall average of monetary awards for Plaintiffs experienced a significant decrease in 2018 from 2017, but was still higher than in earlier years.&nbsp;In 2018, the overall average monetary award was $1,810,693, down from $4,204,501 in 2017.&nbsp;However, first appearances are somewhat deceiving, since the Jury Verdict Service reported that the average in 2017 was greatly inflated by two verdicts of $217.7 million and $139.8 million.&nbsp;In 2018, in contrast, there was only one very large verdict for $76 million.&nbsp;Additionally, the 2018 figure of $1,810,693 represents an increase from the figures from the years prior to 2017.&nbsp;In 2016, the average Plaintiff&rsquo;s verdicts was $1,383,549, while the average in 2015 was $1,376,323.&nbsp;</p> <p><b>Slight Increase in Number of Million-Dollar Verdicts</b>&nbsp;</p> <p>In 2018, there were 14 verdicts of $1 million or more, compared to 11 such verdicts in 2017.&nbsp;But the 14 verdicts figure is slightly lower than in 2016, when there were 16 verdicts of $1 million or more.&nbsp;Of the 14 verdicts of $1 million or more in 2018, 6 were in Jackson County, MO Circuit Court (1 in Kansas City and 5 in Independence), 4 were in the Circuit Court of Clay County, MO, 2 were in the Circuit Court of Platte County, MO, and 2 were in the U.S. District Court for the Western District of MO.&nbsp;Finally, the number of verdicts between $100,000 and $999,999 decreased slightly in 2018 (29 verdicts) from 2017 (36 verdicts).</p> <p style="text-align: left;"><img src=" Monetary Awards for Plfs Verdicts_2018.png" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="450" height="200" /></p> <p><b>Key Observations and Conclusion</b>&nbsp;</p> <p>While the percentage of Plaintiffs&rsquo; verdicts decreased ever-so-slightly in 2018, the 48% figure still remains much higher than where it stood 4 years earlier (38%).&nbsp;Additionally, the average Plaintiff&rsquo;s verdicts ($1,810,693) &ndash; while down from the inflated figures of 2017 &ndash; continues to trend upward from the $1.3 million range of 2016 and 2015 and the low point figure of $350,730 in 2014.&nbsp;Almost half of the verdicts awarded in 2018 that were $1 million or more were in Jackson County, MO, which was again consistent with the view that this can be a Plaintiff-friendly forum.&nbsp;As we have stated in our previous Jury Verdict roundups, clients and national counsel should work with local counsel to carefully consider the forum when assessing the value of a case.</p> <p><u>_____</u></p> <p><img src=" Verdict Data_2018.png" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="450" height="150" /><br /> <span style="font-size: smaller;">Source: Greater Kansas City Jury Verdict Service Year-End Reports 2014 -2018</span></p> 2017 Amendment to Statute, Court of Appeals Holds Section 490.715 Fails to Preclude Evidence of "Charged" Amounts of Medical Expenses at Trial Jan 2019Missouri Law Blog<p style="text-align: left;"><o:p></o:p></p> <p style="text-align: left;">In what was widely seen as an attempt to prevent plaintiffs from introducing evidence at trial of the full, undiscounted &ldquo;amounts charged&rdquo; for medical treatment, a revised version of &sect; 490.715 was signed into law in 2017. It provides that &ldquo;parties may introduce evidence of the <b><i>actual cost</i></b> of the medical care or treatment rendered to a plaintiff or a patient whose care is at issue.&rdquo;&nbsp;<i>See </i>&sect; 490.715(5)(1), RSMo. (emphasis added).&nbsp;&ldquo;Actual cost&rdquo; is defined as:</p> <p style="margin-left: 40px;">&ldquo;a sum of money not to exceed the dollar amounts paid by or on behalf of a plaintiff or a patient whose care is at issue plus any remaining dollar amount necessary to satisfy the financial obligation for medical care or treatment by a health care provider <b><i>after adjustment for any contractual discounts, price reduction, or write-offs by any person or entity</i></b>.&nbsp;<i>See</i> &sect; 490.715(5)(2) (emphasis added).</p> <p>But in the recent case of <i>Brancati v. Bi-State Development Agency</i>, the Eastern District Court of Appeals <a href="">held</a> that evidence of the &ldquo;amount charged&rdquo; could still be introduced at trial, effectively rendering the revised version of &sect; 490.715 meaningless.&nbsp;<i>Brancati</i> was a general liability case with stipulations that the &ldquo;amount charged&rdquo; for medical treatment totaled $77,515.48 while the actual &ldquo;amount paid&rdquo; to satisfy the financial obligation was $40,842.95.&nbsp;Before trial, Brancati filed a pre-trial Motion, arguing that the revised version of &sect; 490.715 did not apply retroactively to this case. The trial court ruled that &sect; 490.715.5, as amended, did not apply and that the parties could offer evidence of the value of medical treatment by allowing both the &ldquo;amount charged&rdquo; as well as the &ldquo;amount paid&rdquo; into evidence.</p> <p>After a $625,000 adverse jury verdict, Bi-State appealed and argued, in part, that the revised version of &sect; 490.715 applied retroactively to limit the evidence admissible regarding the cost of Brancati&rsquo;s medical care to the &ldquo;amount paid&rdquo; and not the &ldquo;amount charged.&rdquo;&nbsp;</p> <p>The Eastern District affirmed the trial court and held that the revised version of &sect; 490.715 did not eliminate the ability to introduce evidence of the &ldquo;amount charged&rdquo; for medical bills.&nbsp;The Court ruled that the statute did not expressly prohibit the introduction of &ldquo;amounts charged&rdquo; and merely permitted parties to introduce the &ldquo;actual costs&rdquo; of medical treatment.&nbsp;It also relied on Subsection 4, which provides that evidence admissible for &ldquo;another purpose&rdquo; may be introduced.&nbsp;Notably, the decision is devoid of any discussion about what other purpose was at issue to support the admission during trial of the &ldquo;amount charged.&rdquo;&nbsp;</p> <p>There are two other fundamental problems with the Eastern District&rsquo;s decision, one dealing with legal and logical relevance, and the other with maxims of statutory construction.&nbsp;First, legal relevance requires a trial court to weigh the probative value of proffered evidence against its costs, such as unfair prejudice, confusion of the issues, misleading the jury, or wasting time.&nbsp;<i>Reed v. Kansas City Missouri School District</i>, 504 S.W.3d 235, 242 (Mo. App. W.D. 2016).&nbsp;Missouri courts have long held that a plaintiff may recover only those medical treatment expenses that he was liable to pay for the medical treatment, and actually incurred.&nbsp;<i>See Cordray v. City of Brookfield</i>, 88 S.W.2d 161, 164 (Mo. 1935); <i>Zachary v. Korger, Inc.</i>, 332 S.W.2d 471, 475 (Mo. App. W.D. 1960).&nbsp;To allow the introduction of the full, undiscounted &ldquo;amount charged&rdquo; for medical expenses defies both basic principles of logical relevance (the evidence tends to make the existence of any material fact more or less probable than it would be without the evidence) and legal relevance.&nbsp;Evidence of the &ldquo;amount charged&rdquo; does not meet the litmus test of logical relevance because its introduction does not affect a plaintiff&rsquo;s ability to recover the &ldquo;amount paid&rdquo; for medical treatment. Nor does it meet the litmus test of legal relevance because its probative value is far outweighed by the dangers of confusing the issue and misleading the jury.&nbsp;</p> <p>Second, this decision disregards the most basic canons of statutory construction.&nbsp;A fundamental principle of statutory construction is that a primary role of the courts in construing statutes is to &ldquo;ascertain the legislature&rsquo;s intent from the language used in the statute and, if possible, give effect to that intent.&rdquo;&nbsp;<i>State ex rel. Koehler v. Lewis,</i> 844 S.W.2d 483, 487 (Mo. App. W.D. 1992).&nbsp;Under the &ldquo;Reenactment Canon,&rdquo; &ldquo;when the Legislature amends a statute, it is presumed that the legislature intended to effect some change in the existing law.&rdquo;&nbsp;<i>State v. Liberty</i>, 370 S.W.3d 537, 561 (Mo. banc 2012).&nbsp;This is because &ldquo;to amend a statute and accomplish nothing from the amendment would be a meaningless act, and the legislature is presumed not to undertaken meaningless acts.&rdquo;&nbsp;<i>Id.</i>&nbsp;By continuing to allow plaintiffs to introduce evidence of the &ldquo;amount charged&rdquo; for medical expenses, the <i>Brancati</i> court appears have rendered this legislative amendment meaningless.&nbsp;Further, in considering the landscape prior to the 2017 amendment, specifically that both the Eastern District and Missouri Supreme Court held that the &ldquo;amount charged&rdquo; for medical expenses could be introduced at trial, the language used in the 2017 statute clearly evinces an attempt to eliminate this practice.&nbsp;<i>See Berra v. Danter</i>, 299 S.W.3d 690 (Mo. App. E.D. 2009); <i>Deck v. Teasley</i>, 322 S.W.3d 536 (Mo. banc 2010).&nbsp;Likewise, this decision violates the canon that courts &ldquo;must examine the language of the statutes as they are written [and] cannot simply insert terms that the legislature has omitted.&rdquo;&nbsp;<i>Loren Cook Co. v. Director of Revenue</i>, 414 S.W.3d 451, 454 (Mo. banc 2013).&nbsp;</p> <p>A request&nbsp;that&nbsp;the <i>Brancati </i>case be transferred&nbsp;to the Missouri Supreme Court for review is presently pending.&nbsp; Whether or not the Supreme Court takes the <i>Brancati&nbsp;</i>case, we are confident that we&nbsp;have not seen the last of litigation on this issue.&nbsp;</p>