BSCR Firm News/Blogs Feedhttps://www.bscr-law.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10en-us20 Jan 2021 00:00:00 -0800firmwisehttps://blogs.law.harvard.edu/tech/rssBaker Sterchi Welcomes Jessica Holliday in Bellevillehttps://www.bscr-law.com/?t=40&an=114423&format=xml&p=544820 Jan 2021Firm News<p>Jessica Holliday joins Baker Sterchi&rsquo;s Belleville office as Of Counsel. Her practice is focused on employment, business and commercial litigation, premises and retail liability and transportation matters. She is a frequent speaker and author on issues related to employment law.</p> <p>Holliday is an active member of the Illinois Defense Counsel, serving as a member of the Board of Directors, and in various roles on the Employment Law Committee, including as Chair since 2018. She earned her law degree from the Saint Louis University School of Law in 2010 and her undergraduate degree from the University of Tennessee in 2005.&nbsp;&nbsp; She is admitted to practice in Illinois and Missouri.</p>https://www.bscr-law.com?t=39&format=xml&directive=0&stylesheet=rss&records=10City of St. Louis and Multiple Illinois Counties Again Distinguish Themselves as "Judicial Hellholes"https://www.bscr-law.com/?t=40&an=114325&format=xml&p=5258&stylesheet=blog20 Jan 2021Missouri Law Blog<p>The 2020/2021 &ldquo;Judicial Hellholes Report&rdquo; from the American Tort Reform Foundation has arrived and certain Missouri and Illinois jurisdictions again find themselves on this infamous list. The City of St. Louis comes in at #7 on the list while the trio of Cook, Madison, and St. Clair Counties in Illinois wins the #8 spot. The silver lining? Both of these rankings are down from the previous slots of #5 and #7 held by these counties, respectively, in the previous Judicial Hellholes Report.</p> <p>Since 2002, the American Tort Reform Foundation has identified and documented places &ldquo;where judges in civil cases systematically apply laws and court procedures in an unfair and unbalanced manner, generally to the disadvantage of defendants.&rdquo; The stated goal of the Foundation&rsquo;s program is &ldquo;to shine a light on imbalances in the courts and thereby encourage positive changes by the judges themselves and, when needed, through legislative action or popular referenda.&rdquo;</p> <p>Coming in at #7 on the list, the City of St. Louis, Missouri, is singled out as being notorious for blatant forum shopping and excessive punitive damage awards, helping to earn Missouri the &ldquo;Show-Me-Your-Lawsuit&rdquo; nickname. The report also asserts that the court fails to ensure that cases are guided by sound science, citing instances where Plaintiff&rsquo;s experts, whose testimony has been determined to not be based in science by other state court, have been permitted to testify in City of St. Louis courts. The report does see some hope for the City and the State of Missouri in general with the 2020 legislative enactment of several reforms intended to curb unreliable expert testimony and reduce litigation tourism, but cautions that true future success is contingent on the City of St. Louis Court&rsquo;s compliance with the new statutes. The report notes that &ldquo;some St. Louis judges have a history of ignoring both state law and U.S. Supreme Court precedent with regard to expert evidence standards, personal jurisdiction and venue, and damage awards.&rdquo;</p> <p>Number 8 on the list is the grouping of Cook, Madison and St. Clair Counties in Illinois. The report singles out these three counties as continuing to be preferred jurisdictions for plaintiffs&rsquo; lawyers &ldquo;thanks to no-injury lawsuits, plaintiff-friendly rulings in asbestos litigation, and the promise of a liability-expanding legislative agenda each and every year.&rdquo; The report calls Illinois ground zero for no-injury lawsuits, thanks in large part to the Biometric Information Privacy Act and the numerous expansive judicial interpretations of that law. The report finds some encouraging news in the Illinois Supreme Court&rsquo;s June 2020 ruling in <i>Rios v. Bayer Corp</i>., where the court dismissed the claims of out-of-state plaintiffs for lack of jurisdiction because Bayer is not located in Illinois and does limited business there, the product was not manufactured in Illinois, and the plaintiffs experienced their injuries outside of Illinois.<br /> <br /> The report also gives a dishonorable mention to the Missouri Court of Appeal thanks to a recent opinion addressing Section 537.065. This section permits a defendant to allow a plaintiff to obtain a judgment against it in court so long as the plaintiff agrees to only seek to collect the award from the defendant&rsquo;s insurer. The Missouri legislature amended Section 537.065 in 2017 to require that parties give notice to the insurer that they have entered such an agreement so that the insurer can intervene and protect its interests, if needed. The report interprets a Missouri appellate court decision from 2020 as limiting an insurer&rsquo;s ability to contest the policyholder&rsquo;s liability or the plaintiff&rsquo;s damages when it intervenes after the entry of arbitration award.</p> While there are some potential future bright spots for these Missouri and Illinois jurisdictions and their individual rankings are moving in the right direction, there seems to be a long way to go before we no longer see these local courts on the &ldquo;Judicial Hellholes&rdquo; list.https://www.bscr-law.com?t=39&format=xml&directive=0&stylesheet=rss&records=10City of St. Louis and Multiple Illinois Counties Again Distinguish Themselves as "Judicial Hellholes"https://www.bscr-law.com/?t=40&an=114324&format=xml&p=20 Jan 2021Illinois Law Blog<p>The 2020/2021 &ldquo;Judicial Hellholes Report&rdquo; from the American Tort Reform Foundation has arrived and certain Missouri and Illinois jurisdictions again find themselves on this infamous list. The City of St. Louis comes in at #7 on the list while the trio of Cook, Madison, and St. Clair Counties in Illinois wins the #8 spot. The silver lining? Both of these rankings are down from the previous slots of #5 and #7 held by these counties, respectively, in the previous Judicial Hellholes Report.</p> <p>Since 2002, the American Tort Reform Foundation has identified and documented places &ldquo;where judges in civil cases systematically apply laws and court procedures in an unfair and unbalanced manner, generally to the disadvantage of defendants.&rdquo; The stated goal of the Foundation&rsquo;s program is &ldquo;to shine a light on imbalances in the courts and thereby encourage positive changes by the judges themselves and, when needed, through legislative action or popular referenda.&rdquo;</p> <p>Coming in at #7 on the list, the City of St. Louis, Missouri, is singled out as being notorious for blatant forum shopping and excessive punitive damage awards, helping to earn Missouri the &ldquo;Show-Me-Your-Lawsuit&rdquo; nickname. The report also asserts that the court fails to ensure that cases are guided by sound science, citing instances where Plaintiff&rsquo;s experts, whose testimony has been determined to not be based in science by other state court, have been permitted to testify in City of St. Louis courts. The report does see some hope for the City and the State of Missouri in general with the 2020 legislative enactment of several reforms intended to curb unreliable expert testimony and reduce litigation tourism, but cautions that true future success is contingent on the City of St. Louis Court&rsquo;s compliance with the new statutes. The report notes that &ldquo;some St. Louis judges have a history of ignoring both state law and U.S. Supreme Court precedent with regard to expert evidence standards, personal jurisdiction and venue, and damage awards.&rdquo;</p> <p>Number 8 on the list is the grouping of Cook, Madison and St. Clair Counties in Illinois. The report singles out these three counties as continuing to be preferred jurisdictions for plaintiffs&rsquo; lawyers &ldquo;thanks to no-injury lawsuits, plaintiff-friendly rulings in asbestos litigation, and the promise of a liability-expanding legislative agenda each and every year.&rdquo; The report calls Illinois ground zero for no-injury lawsuits, thanks in large part to the Biometric Information Privacy Act and the numerous expansive judicial interpretations of that law. The report finds some encouraging news in the Illinois Supreme Court&rsquo;s June 2020 ruling in <i>Rios v. Bayer Corp</i>., where the court dismissed the claims of out-of-state plaintiffs for lack of jurisdiction because Bayer is not located in Illinois and does limited business there, the product was not manufactured in Illinois, and the plaintiffs experienced their injuries outside of Illinois.<br /> <br /> The report also gives a dishonorable mention to the Missouri Court of Appeal thanks to a recent opinion addressing Section 537.065. This section permits a defendant to allow a plaintiff to obtain a judgment against it in court so long as the plaintiff agrees to only seek to collect the award from the defendant&rsquo;s insurer. The Missouri legislature amended Section 537.065 in 2017 to require that parties give notice to the insurer that they have entered such an agreement so that the insurer can intervene and protect its interests, if needed. The report interprets a Missouri appellate court decision from 2020 as limiting an insurer&rsquo;s ability to contest the policyholder&rsquo;s liability or the plaintiff&rsquo;s damages when it intervenes after the entry of arbitration award.</p> While there are some potential future bright spots for these Missouri and Illinois jurisdictions and their individual rankings are moving in the right direction, there seems to be a long way to go before we no longer see these local courts on the &ldquo;Judicial Hellholes&rdquo; list.https://www.bscr-law.com?t=39&format=xml&directive=0&stylesheet=rss&records=10Evidence surrounding an earlier sale of equipment is relevant to a later purchaser's claim for punitive damages in a product liability actionhttps://www.bscr-law.com/?t=40&an=114267&format=xml&p=5258&stylesheet=blog15 Jan 2021Product Liability Law Blog<p>Missouri manufacturers, distributors, sellers, and resellers of equipment have scored an important victory in the Missouri Court of Appeals. In <i>Ormsby v. Central Mine Equipment Co</i>, the Missouri Court of Appeals, Southern District, affirmed admission of evidence regarding the design, manufacture, and first sale of a commercial drilling rig as relevant to the defense of a strict liability claim arising from a subsequent sale when punitive damages are claimed.&nbsp;</p> <p>Generally, a plaintiff can recover under a strict product liability claim if he can prove the product was inherently defective when sold and that the defect in the product caused the injury or damage, regardless of whether the defendant did everything possible to prevent the defect.&nbsp;In <i>Ormsby</i>, the Plaintiff sought to preclude evidence of the initial design, manufacture, and sale of a commercial drilling rig as irrelevant to whether the rig had an inherent defect when the second sale occurred.&nbsp;The trial court admitted the evidence as relevant to the defense, primarily because Plaintiff sought punitive damages on the strict liability claim.&nbsp;</p> <p>Plaintiff lost fingers and mangled his hand after reaching into a running drill rig. The incident occurred, and the underlying lawsuit arose, after a subsequent second sale of the mining drill by the CME.</p> <p>Central Mine Equipment Company (&ldquo;CME&rdquo;) built and sold a commercial drilling rig to the U.S. Army Corp of Engineers in 1976.&nbsp;CME built the drill to design specifications provided by the Corps, and the Corps inspected and accepted the drilling rig pursuant to the Corps&rsquo; quality-assurance procedures.&nbsp;After using the drill for 25 years, the Corps traded the drilling rig back to CME for a credit on a replacement. &nbsp;CME then sold it to Plaintiff&rsquo;s employer, who inspected, purchased and relocated the pre-owned unit in 2001, without CME ever seeing, inspecting, or taking possession of the used unit.</p> <p>In 2013, Plaintiff and a helper picked up the drill rig from a mechanic who had repaired the rig&rsquo;s throttle cable.&nbsp;After starting the engine to check the mechanic&rsquo;s work, Plaintiff could not shut the rig off.&nbsp;Plaintiff reached into the motor compartment in an attempt to maneuver the throttle linkage and governor to idle the engine to a stop.&nbsp;Before Plaintiff&rsquo;s helper could get the motor shut down, Plaintiff caught his hand in the mechanism causing the loss of multiple fingers.&nbsp;</p> <p>Plaintiff filed a lawsuit against CME alleging claims for negligence and strict liability, and requesting a punitive damages award under both theories.&nbsp;On the eve of trial, hoping to preclude evidence regarding design, manufacture and first sale of the drill, Plaintiff dismissed his negligence claim, but did not withdraw his request for punitive damages.&nbsp;Nevertheless, Plaintiff sought to preclude evidence that CME designed the drill pursuant to specifications provided by the Corps, and that the Corps inspected the drill to ensure it passed quality assurance standards before taking possession.</p> <p>Plaintiff sought to preclude the evidence as irrelevant to the litigation, claiming that because strict liability claims do not require proof of knowledge as an element to recovery.&nbsp;But the trial court allowed CME to present evidence of the original design, manufacture, and sale because compliance with an industry standard evidences that a party did not act with a culpable state of mind, which is required to support punitive damages.</p> <p>The Missouri Court of Appeals affirmed the trial court&rsquo;s decision to admit the disputed evidence, finding Plaintiff did not meet his burden in demonstrating the trial court ruled incorrectly.&nbsp;The Court found that so long as punitive damages were alleged, compliance with industry standard and custom goes to prove whether defendant acted with a nonculpable state of mind, hence, to negate an inference of complete indifference and conscious disregard for the safety of others &ndash; proof punitive damages requires.</p> <p>The Court&rsquo;s decision is a positive development for Missouri manufacturers, designers, sellers, and resellers in defending against claims for punitive damages in product liability cases.</p>https://www.bscr-law.com?t=39&format=xml&directive=0&stylesheet=rss&records=10Missouri Court of Appeals holds an employer may not reserve the right to litigate claims against an employee in court while simultaneously restricting the employee to arbitrate her employment claims.https://www.bscr-law.com/?t=40&an=114268&format=xml&p=5258&stylesheet=blog11 Jan 2021Employment & Labor Law Blog<p>The question of whether an arbitration agreement is enforceable is an oft-disputed issue prone to be volleyed between the courts and an arbitrator; such was the case in <i>Caldwell v.</i><i> UniFirst Corporation, </i>No. ED108409, 2020 Mo. App. LEXIS 1328 (Ct. App. Oct. 27, 2020).</p> <p>This case involves a contract within a contract within a contract: a delegation provision contained in an arbitration agreement, which was contained in an employment contract. This not-uncommon scenario requires a court to look at the three contracts and analyze each independent of the others.&nbsp;</p> <p>In <i>Caldwell</i>, a former at-will employee sued his former employer (UniFirst) under the Missouri Human Rights Act alleging disability discrimination and retaliation claims.&nbsp; UniFirst moved to compel arbitration based on the arbitration clause in Caldwell&rsquo;s employment contract.&nbsp; UniFirst also asserted the employment contract contained a binding delegation clause that rendered the threshold issue of whether the case was arbitrable a matter to be determined by an arbitrator rather than by the court.&nbsp; The district court denied UniFirst&rsquo;s motion holding the arbitration clause lacked adequate consideration in two aspects: first, Caldwell&rsquo;s at-will employment was insufficient consideration to support the arbitration agreement, and second, the arbitration clause lacked mutuality because UniFirst unilaterally reserved for itself the ability to assert certain claims against Caldwell in court while Caldwell was required to arbitrate all potential claims.</p> <p>The case made its way to the Missouri Supreme Court, which transferred the case back to the Court of Appeals with the direction to reconsider the case in light of the Supreme Court&rsquo;s decision in<i> Soars</i> <i>v. Easter Seals Midwest</i>, 563 S.W.3d 111 (Mo. banc 2018).&nbsp; In <i>Soars</i>, the court held a delegation clause is severable and should be reviewed independent of any underlying arbitration clause.&nbsp; But in <i>Caldwell</i>, the parties conceded the delegation provision was not at issue, so on reconsideration, the Court held that because the subject delegation provision &ndash; standing alone &ndash; was valid, the question of whether the arbitration agreement as a whole was valid was for the arbitrator to decide.&nbsp;</p> <p>Under Missouri law, an arbitration clause requires its own consideration.&nbsp; Accordingly, the arbitrator ruled that while Caldwell&rsquo;s at-will employment may have supplied sufficient consideration to support the employment agreement, it could not also provide adequate consideration to support the arbitration clause.&nbsp; UniFirst moved to vacate the arbitration order arguing the arbitrator exceeded his power.&nbsp; The trial court denied the motion and affirmed the arbitration order, which UniFirst then appealed.&nbsp;</p> <p>On appeal, in relevant part, only the question of whether the arbitration agreement was supported by consideration was before the Court.&nbsp; At the outset, the Missouri Court of Appeals (Eastern District) held that Missouri contract law principles &ndash; including consideration &ndash; govern whether an arbitration agreement is valid.&nbsp; Under Missouri law, a promise by one party to a contract is sufficient consideration in exchange for a promise by the other party.&nbsp; But when one party retains the unilateral right to sidestep its obligations, that party&rsquo;s promise is considered &ldquo;illusory&rdquo; and thus unenforceable. &nbsp;Here, because only one party was bound to arbitrate its claims both the trial court and the Court of Appeals concluded that the arbitration agreement lacked mutuality of promise and therefore lacked consideration.&nbsp; Thus, the arbitration provision was held unenforceable and the arbitrator&rsquo;s order was affirmed.&nbsp;</p> <p>A little over a year ago, BSCR published a <a href="https://www.bscr-law.com/?t=40&amp;an=96663&amp;format=xml&amp;stylesheet=blog&amp;p=5258">blog</a> that describes a case in which the Eighth Circuit reminds employers to go back to the basics when administering arbitration clauses.&nbsp; The Eighth Circuit held an employee&rsquo;s tacit acknowledgement of an arbitration provision by, for example, clicking through the pages of an employment contract on the computer, is not evidence that an employee accepts an arbitration provision contained therein.&nbsp; Last month, <i>Caldwell v. UniFirst Corporation</i> became another example, this time in state court, of the importance of focusing on contracts fundamentals &ndash; here, on the language of the arbitration provision itself.&nbsp;</p> The enforceability of an arbitration clause, particularly in the employment context, has become the well-traveled subject of recent litigation.&nbsp; Which begs the question: why all the fuss when so many employers include arbitration clauses, often coupled with delegation clauses, in employment contracts &ndash; aren&rsquo;t these employers well-equipped to draft arbitration clauses and, in fact, don&rsquo;t the employers intentionally include these provisions for the very purpose of <i>avoiding </i>litigation?&nbsp; In other words, why are employers including and administering these routine provisions in ways that provide employees paths to the courtroom?&nbsp; The simplest explanation is that too many employers don&rsquo;t know they&rsquo;re doing it wrong.&nbsp; Notwithstanding these apparent pitfalls, there are relatively simple solutions to tackling arbitration agreement drafting and administration.&nbsp; The BSCR employment &amp; labor law team are willing and able to assist you as you navigate your employment arbitration agreement development and implementation needs.https://www.bscr-law.com?t=39&format=xml&directive=0&stylesheet=rss&records=10Court Holds COVID-19 Government Closures Do Not Trigger Business Interruption Coveragehttps://www.bscr-law.com/?t=40&an=114101&format=xml&p=5258&stylesheet=blog06 Jan 2021Insurance Law Blog<p>A recent ruling from the U.S. District Court for the Eastern District of Michigan has provided more guidance in predicting how COVID-19 related losses and litigation will be handled.</p> <p>In <i>Turek Enterprises, Inc., d/b/a Alcona Chiropractic v. State Farm Mut. Auto. Ins. Co., et al</i>, the Court ruled that State Farm Mutual Automobile Insurance Co. did not have to cover a chiropractic office&rsquo;s losses alleged from government-ordered closures due to COVID-19. The Court held that the insured failed to allege physical loss and that the virus exclusion bars coverage.</p> <p>This class action lawsuit seeking business interruption coverage was denied because the entire case focused on the definition of &ldquo;direct physical loss;&rdquo; however, did not demonstrate any &ldquo;tangible damage to covered property&rdquo; that was required as a condition precedent to coverage.</p> <p>The chiropractor sued State Farm in June alleging the insurer wrongfully applied a virus exclusion to deny coverage. The insured argued the virus exclusion did not relate to the claimed losses, which were solely caused by government-closure orders. To support its position, the insured also argued COVID-19 was not present on its property, negating the &ldquo;virus&rdquo; related exclusion.</p> <p>In Judge Ludington&rsquo;s Order, the Court noted that even if the chiropractor alleged that the government-mandated closures were the cause of loss, &ldquo;closure orders&rdquo; were <i>in response</i> to curbing the spread of COVID-19 and the virus that causes it. Accordingly, the chiropractor&rsquo;s business losses were barred by the policy&rsquo;s virus exclusion. The chiropractor&rsquo;s position disregarded &ldquo;the anti-concurrent causation clause, which extend[ed] the virus exclusion to all losses where a virus is part of the causal chain.&rdquo;</p> <p>Plaintiff argued the exclusion applied only to decontamination costs and State Farm misrepresented that provision of the policy. In reviewing the applicable policy, Judge Ludington found that &ldquo;[b]y its terms, the policy does not limit the virus exclusion to contamination, and plaintiff has failed to show that the virus exclusion is ambiguous.&rdquo; &nbsp;Furthermore, &ldquo;[e]ven if defendants misrepresented the purpose and extent of the virus exclusion in 2006, the plain, unambiguous meaning of the virus exclusion today negates coverage.&rdquo;</p> <p>In another creative argument, Plaintiff argued it had experienced &ldquo;tangible&rdquo; damage because the business was suspended by government closure orders; therefore, the business necessarily incurred ongoing &ldquo;passive depreciation,&rdquo; instead of a direct physical loss. &nbsp;The &ldquo;passive depreciation&rdquo; damage argued that all business equipment was continuing to lose value based on age and non-use.&nbsp; The Court rebuffed this argument by reasoning &ldquo;[t]he plain meaning of direct physical loss to covered property requires that there be a loss to covered property, and not just any loss.&rdquo;</p> Ultimately, counsel and the plaintiff&rsquo;s bar are both becoming more creative looking for special policy terms which ambiguity could open the door to such an argument as pleaded in this matter. Carriers should be addressing each claim and litigated coverage file on the individual claim&rsquo;s separate and distinct terms, facts and application. No two COVID-19 claims are the same, and each coverage issue must be individually reviewed in order to fairly and accurately determine coverage and its application.&nbsp;https://www.bscr-law.com?t=39&format=xml&directive=0&stylesheet=rss&records=10Baker Sterchi elects two new Members in St. Louis and Bellevillehttps://www.bscr-law.com/?t=40&an=114234&format=xml&p=544804 Jan 2021Firm News<p>Baker Sterchi Cowden &amp; Rice elected two new Members, effective January 1:</p> <p>Brandy Simpson (St. Louis), whose practice focuses primarily on medical malpractice defense. She also defends premises liability, personal injury, and products liability matters.&nbsp;Simpson earned her Juris Doctor from the University of Dayton, and is licensed to practice in Missouri, Illinois, Kentucky and West Virginia.&nbsp;She serves as a Women&rsquo;s Affinity Group liaison to Baker Sterchi&rsquo;s Diversity Committee and is the 2020-2021 secretary of The Bar Association of Metropolitan St. Louis Women in the Legal Profession Section.</p> <p>Meghan Kane (Belleville), whose practice focuses on toxic torts, personal injury, product liability, and premises liability. Kane earned her Juris Doctor from St. Louis University School of Law, and is licensed to practice in Illinois and Missouri. Kane was recently selected for inclusion in Best Lawyers&reg; in America: Ones to Watch (Mass Tort Litigation/Class Actions and Personal Injury Litigation) and has been recognized by Illinois Super Lawyers&reg; as a Rising Star since 2018.&nbsp;She is a member of the Madison County Bar Association and provides pro bono services through the Madison County, Illinois Legal Clinic.</p>https://www.bscr-law.com?t=39&format=xml&directive=0&stylesheet=rss&records=10Single-Insurer MDLs Are Among Us - JPML Allows Centralization of COVID-19 Insurance Coverage Caseshttps://www.bscr-law.com/?t=40&an=114102&format=xml&p=5258&stylesheet=blog30 Dec 2020Insurance Law Blog<p>The U.S. Judicial Panel on Multidistrict Litigation initially ruled centralization was not appropriate for businesses seeking business interruption insurance coverage because of varying policy language. See our post <a href="https://www.bscr-law.com/?t=40&amp;an=111354&amp;format=xml&amp;stylesheet=blog&amp;p=5258">here.</a> &nbsp;At that time, more than 450 cases were pending in Federal Courts&mdash;now there are over 700.</p> <p>While the JPML rejected total centralization, in the same ruling the Panel suggested that the creation of smaller &ldquo;single-insurer&rdquo; MDLs could be efficient to centralize those actions. &nbsp;Cases argued against one insurer or insurance group were &ldquo;more likely to involve insurance policies utilizing the same language, endorsements, and exclusions&rdquo; that would make sharing common discovery and pretrial motion proceedings more efficient.</p> <p>Policyholders followed the JPML&rsquo;s suggestion, as there were 300 lawsuits against The Hartford, Cincinnati Insurance Co., Society Insurance Co., Travelers and various underwriters at Lloyd&rsquo;s of London that sought centralization into single carrier MDLs. &nbsp;The JPML had to decide whether to create five separate &ldquo;single-insurer&rdquo; MDLS to centralize all of the COVID-19 coverage actions against these specific carriers. &nbsp;On October 2, the JPML ruled that centralization was appropriate for cases against Society Insurance Co., but declined to centralize actions against The Hartford, Cincinnati Insurance Co., Travelers, and Lloyd&rsquo;s of London.</p> <p><b><i>Opponents of Centralization Argued Varying Policy Language and State Law Made MDL Inappropriate. </i></b></p> <p>The insurers argued to the JPML, as they had previously ruled, that the varying policy language would be inappropriate for centralization. &nbsp;More specifically, the insurers argued that business interruption policy language can vary even among the policies issued by the same insurance company.</p> <p>Additionally, Lloyd&rsquo;s underwriters argued that the phrase &ldquo;single-insurer MDL&rdquo; was a misnomer as they are not the same insurer, but rather forty separate insurance carriers selling various policies to business through the Lloyd&rsquo;s marketplace.</p> <p>Policyholders opposing centralization echoed the insurer&rsquo;s arguments about the policy language and focused their arguments on the differences among states&rsquo; laws interpreting the prerequisites for business interruption coverage. &nbsp;For example, the requirement that a business interruption loss stem from a &ldquo;direct physical loss of or damage to&rdquo; its property. &nbsp;A group of Chicago-area businesses argued that decisions in Illinois (and some other states) do not require a tangible alteration or damage to a property to be considered direct physical loss.</p> <p><b><i>Proponents of Centralization Argued COVID-19 Pandemic Itself Triggering their Losses Gave Rise to Common Factual Issues.</i></b></p> <p>The policyholders supporting centralization argued that the cases filed against the same or related insurers would give rise to numerous common and overlapping factual questions because they all related to the COVID-19 pandemic. &nbsp;Furthermore, the language of the policy was a standard form used by the respective insurer.</p> <p>For example, a Florida restaurant argued that Lloyd&rsquo;s underwriters commonly provided business interruption coverage on standard forms that are approved by the Insurance Services Office; therefore, they shared many common terms and a single court could determine &ldquo;in one stroke&rdquo; if the COVID-19 pandemic triggered standard terms in the policies, including the direct physical loss or damage requirement.</p> <p>The Florida restaurant also addressed the issue of any uncommon questions, e.g., whether or not state and/or municipal civil authority orders prohibited access to covered property. &nbsp;They argued the questions &ldquo;may turn to some extent on common issues, and the resolution of all common and uncommon questions by one judge will allow the just and expeditious resolution of all actions to the overall benefit of the parties.&rdquo;</p> <p>Another group of policyholders added that &ldquo;the sheer volume of similar cases across the country implicating common issues&rdquo; made centralization appropriate. &nbsp;They argued that an insurer &ldquo;consistently utilizes a small subset of template policy forms&rdquo; and has &ldquo;uniformly denied&rdquo; business interruption claims. &nbsp;Furthermore, &ldquo;[w]hether an insurance policy provides coverage cannot be separated from the factual predicate that gives rise to coverage in the first place. &nbsp;Here, the related actions all share the same or similar triggering events: the losses of business income occasioned by COVID19 and/or related stay-at-home orders.&rdquo;</p> <p><b><i>The JPML&rsquo;s Most Important Factor for Centralization was the Geographic Scope of Action</i></b></p> <p>What set Society&rsquo;s policies apart from the other insurers, were the &ldquo;defined geographical scope of these actions&rdquo; implicating the insurance laws of only six states.&nbsp;Judge Chang stated that any potential differences among the cases could be resolved with a number of pretrial techniques including state-specific tracks or a bellwether process.</p> <p>The JPML emphasized that centralization involving Hartford, Cincinnati, and Travelers would not promote efficient resolution because of the sheer number and geographic scope of the cases.&nbsp;Especially when many of the policyholder plaintiffs &ldquo;are on the brink of bankruptcy as a result of business lost due to the COVID-19 pandemic and the government closure orders.&rdquo;</p> <p>For Lloyd&rsquo;s underwriters, the JPML said that centralization was not appropriate because it was not a single insurance company but rather a group of several dozen distinct insurers with varying policies.&nbsp;&ldquo;The inclusion of non-standard and non-common forms and policy language would hinder the ability of the transferee court to organize the litigation and quickly reach the common factual and legal questions,&rdquo; the JPML wrote.</p> <p>Nevertheless, the JPML encouraged the insurers to engage in &ldquo;informal cooperation and coordination&rdquo; to be efficient and avoid duplication.</p> <p>Once again, we see creative arguments utilized successfully to support centralization. &nbsp;Regardless of whether or not an insurer uses standard forms, each claim is unique, and insurers must continue to approach all COVID-19 interruption claims, in addition to all claims, thoroughly and cautiously.&nbsp;</p>https://www.bscr-law.com?t=39&format=xml&directive=0&stylesheet=rss&records=10U.S. Supreme Court to Review FCRA Class Action Jury Verdicthttps://www.bscr-law.com/?t=40&an=114130&format=xml&p=5258&stylesheet=blog28 Dec 2020Financial Services Law Blog<p>The United States Supreme Court recently granted certiorari to TransUnion on a multimillion-dollar jury verdict arising out of a class action in the Ninth Circuit.</p> <p>In <i>Ramirez v. TransUnion, </i>a case filed in the Northern District of California,the jury assessed $60 million in damages against TransUnion for three FCRA violations: (1) willful failure to follow reasonable procedures to assure accuracy of terrorist alerts in violation of 15 U.S.C. &sect; 1681e(b); (2) willful failure to disclose to class members their entire credit reports by excluding the alerts from the reports in violation of &sect; 1681g(a)(1); and (3) willful failure to provide a summary of rights in violation of &sect; 1681g(c)(2). The facts relating to the alleged injury suffered by the named class member are compelling. When applying for a car loan, Mr. Ramirez was denied financing by the dealership because he was incorrectly listed a match on an OFAC Advisor &ldquo;terrorist list&rdquo; alert that came up when his credit report was pulled, based on information obtained through a third party vendor. Notably, the dealership did not conduct any further independent investigation to determine whether Mr. Ramirez was in fact a match but instead sold the car to Mr. Ramirez&rsquo; wife.</p> <p>Mr. Ramirez thereafter requested and obtained his credit report from TransUnion, which did not contain the OFAC alert. However, a letter he received from TransUnion a day later notified him that he was listed as a &ldquo;prohibited SDN (Specially Designated National)&rdquo;. After speaking with an attorney, Mr. Ramirez learned of the procedure to dispute the OFAC data associated with his credit file and did so. The alert was removed. The record revealed that more than 8,000 other consumers&rsquo; credit files had also been falsely labeled as prohibited SDNs from January and July 2011 and that they received a letter similar to Mr. Ramirez&rsquo; when they requested their credit reports during that time. Mr. Ramirez subsequently brought the above class action on behalf of himself and those other consumers, who apparently did not suffer any actual injury for which damages could be awarded. The jury verdict amounted to roughly $1,000 in statutory damages per class member and $6,300 each in punitive damages.</p> <p>After the jury verdict, TransUnion appealed to the Ninth Circuit Court of Appeals. The Ninth Circuit <a href="https://cdn.ca9.uscourts.gov/datastore/opinions/2020/02/27/17-17244.pdf">held</a> that the class members had standing sufficient to be certified as a class under Rule 23, but found that the punitive damages award was excessive and cut the punitive damage award in half.</p> <p>On review, the U.S. Supreme Court must consider and rule upon two critical issues: (1) Whether either Article III or Rule 23 permits a damages class action where the vast majority of the class suffered no actual injury, and (2) whether a punitive damages award violates a defendant&rsquo;s due process rights where it is exponentially larger than any class-wide actual damages and multiples greater than the statutory damages awarded for the defendant&rsquo;s violations.</p> <p>The <i>Ramirez </i>case comes before the High Court at the end of another record-setting year for FCRA claims. But its implications far exceed FCRA litigation. With a historically conservative Court hearing this case, there is at least a possibility that class actions may be more heavily scrutinized in the future.</p> <p>Baker Sterchi will continue to monitor the <i>Ramirez </i>case for important updates.</p>https://www.bscr-law.com?t=39&format=xml&directive=0&stylesheet=rss&records=10Parson's Pandemic Protections for Providers - Governor Parson Encourages Tort Liability Legislation During COVID-19 State of Emergencyhttps://www.bscr-law.com/?t=40&an=114077&format=xml&p=21 Dec 2020Healthcare Law Blog<p style="text-align: left;"><u>Introduction</u></p> <p>On November 12, Governor Parson issued a written proclamation encouraging lawmakers to author new tort liability legislation insulating defendants from lawsuits arising out of the COVID-19 state of emergency that has existed since March.&nbsp;This effort is designed to allow these individuals and entities to continue to serve the public without threat of unnecessary and frivolous litigation.&nbsp;We have since learned that the Missouri legislature is not likely to address this issue until early 2021.&nbsp;Governor Parson seems to have reconsidered the timing for the agenda and directed the legislature to address this, not during the ongoing special session, but during the regular January session.&nbsp;The bill will be titled SB1.&nbsp;&nbsp;&nbsp;</p> <p>In the statement, the Governor explained one of the main purposes of this action is to assist healthcare providers who have gone well beyond normal duty to provide exceptional care to Missourians despite great personal risk to their own health and well-being by amending and expanding upon &sect; 44.045, RSMo, to afford liability protections for healthcare workers who provide necessary care during a declared state of emergency. &nbsp;Though not dealt with here, the Governor&rsquo;s proclamation also identifies other organizations instrumental to COVID-19 response efforts, including product manufacturers and premises owners like schools and churches that provide fundamental societal functions.&nbsp;This potentially includes a new Section in Chapter 537, RSMo, to provide products liability protection for product manufacturers, designers, distributors, and sellers involved in bringing products to market in direct response to a state of emergency.&nbsp;It also potentially includes a new section to provide premises liability protection for exposure claims arising from a declared state of emergency.&nbsp;</p> <p style="text-align: left;"><u>Why Is This Necessary?</u></p> <p>The threat of COVID litigation is real.&nbsp;There have been an estimated 10,000 COVID-related lawsuits filed nationally.&nbsp;This includes hundreds of healthcare specific suits and is almost certain to continue well into the next year and beyond.&nbsp;&nbsp; &nbsp;</p> <p>The risk to healthcare workers is real too.&nbsp;As of December 21, there were almost 17.8 million COVID cases and more than 315,000 deaths in the U.S.&nbsp;Healthcare workers make up a significant portion of nationwide COVID-19 infections.&nbsp;As of July, there were 100,000 cases of COVID-19 infecting healthcare workers.&nbsp;By September 2020, more than 1,700 U.S. healthcare workers had died from COVID-19.&nbsp;Per the CDC, healthcare workers make up approximately 6% of adults hospitalized with COVID-19.&nbsp;Among those, 36% were in the nursing field, and 28% were admitted to an ICU.&nbsp;Sixteen percent required invasive mechanical ventilation, and 4% died.&nbsp;</p> <p>None of this is surprising considering healthcare workers are on the frontline of battling this global pandemic and, in doing so, expose themselves to great personal risk each shift providing exceptional care for their communities.&nbsp;They must deal with the challenge not only of exposing themselves to the virus, but also observing terrible suffering and outcomes of their patients, and doing this with limited resources, equipment and healthcare staff.&nbsp;The author of this blog believes prudent legislative action is necessary under the circumstances and likely to be helpful in mitigating some litigation risk for healthcare professionals.&nbsp;</p> <p style="text-align: left;"><u>A National Approach to Liability Protections</u></p> <p>Missouri is not the only state to consider such liability protections.&nbsp;Other states have provided this through executive order and/or legislative action.&nbsp;For example, the neighboring states of Arkansas, Iowa, Illinois, Kansas, Kentucky, and Oklahoma have already passed COVID liability protections.&nbsp;Many of these states&rsquo; protections afford immunity from civil damages for licensed healthcare providers but carve out exceptions for injuries or death caused by gross negligence, willful and criminal misconduct and intentional infliction of harm, and fraud.&nbsp;</p> <p>Although there was much discussion during negotiations for a federal COVID-19 relief package as to whether it would include liability protections for healthcare providers and other businesses, in the end, no such provision was included in the $900 billion program.&nbsp;Though not dealt with in detail here, federal liability protections are already available under the 2005 Public Readiness Emergency Preparedness (PREP) Act, which authorizes the Secretary of the US Department of Health and Human Services to issue a declaration in response to a public health emergency.&nbsp;On March 10, 2020, Secretary of HHS Alex Azar issued such a declaration, effective February 4, 2020, which provides immunity to &ldquo;covered persons,&rdquo; such as healthcare providers, using certain &ldquo;covered countermeasures,&rdquo; including masks, respirators, and vaccines, that are necessary to combat the public health emergency.&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;</p> <p>The Missouri Chamber of Commerce and industry stakeholders overwhelmingly support these protections.&nbsp;The American Medical Association has pushed for states to pursue liability protections for healthcare professionals during the COVID-19 emergency.&nbsp;However, this is not without criticism, with some suggesting such policies would protect irresponsible businesses from accountability and fail to protect the public.&nbsp;&nbsp;&nbsp;</p> <p>It is important to note that the anticipated liability protections parallel &ldquo;good Samaritan&rdquo; laws that have existed throughout the country for decades and afford qualified immunity from civil liability for healthcare professionals who volunteer their services as a generous compassionate act unless they engage in willful or intentional misconduct.&nbsp;</p> <p>We will continue to follow this issue and look for activity during the January 2021 general legislative session.&nbsp;</p>https://www.bscr-law.com?t=39&format=xml&directive=0&stylesheet=rss&records=10