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2017 July Newsletter - Section Updates
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SECTION UPDATES

 

Appellate Law


The FDCC Appellate Law Section would like to remind our members of the program that we will present at the upcoming Annual Meeting in Montreaux, Switzerland. On the heels of the surprising general election in the U.K., and commensurate with the international flavor of the Annual Meeting in Montreux, our section and the Commercial Litigation and International Sections will present an international panel of attorneys who will address current issues of importance and interest. The panel- and audience-interactive discussion will address: (1) Brexit, including the procedural aspects of the rights of EU citizens living in Great Britain; (2) enforcement of judgments in the EU and Britain; (3) differences in discovery practice between Europe and the U.S.; and (4) differences in trials and appeals between the U.S. and Europe.


Our program will occur on Thursday, July 27 at 7:45 a.m. in the Salon de Musique. Please check the on-site brochure to locate this meeting room. The moderator will be Bill Vita of Westerman Ball et al. in Uniondale, NY. The panel members are Jorge Angell of L.C. Rodrigo Abogados in Madrid; Stephen Carter of Carter Perry Bailey LLP in London; Stephen Brake of Nutter McClennan & Fish in Boston; and Charlie Frazier of Alexander Dubose Jefferson & Townsend in Dallas.


We would also like to congratulate Charlie Frazier, who has been appointed as chair of our section for the 2017-2018 FDCC year. If you would like to become more involved in our section in the coming year, please reach out to Charlie at cfrazier@adjtlaw.com.

 

Civil Rights


Sex and Section 1983: Consent as a Defense

By: Jamie Huffman Jones, Friday, Eldredge & Clark, LLP


As a basic principle, no detention officer should engage in a sexual relationship with an inmate. Indeed, at least one circuit has held that it is so patently obvious to not rape an inmate that there is not a need for law enforcement supervisors to train on this subject. Andrews v. Fowler, 98 F.3d 1069, 1077 (8th Cir. 1996); Parrish v. Ball, 594 F.3d 993, 999 (8th Cir. 2010). The foundation for no sexual contact rule is found in the Eighth Amendment (or through the Fourteenth Amendment for pre-trial detainees) that punishment shall never be “cruel and unusual.”[1] When an officer and an inmate do engage in consensual sex, the question arises whether consent is a defense to a claim of sexual assault under Section 1983. The circuits are split on the question, but there is a surprising body of authority allowing consent as a defense. In other words, consensual sex in jail between a guard and inmate, while illegal, may not be unconstitutional.

Standard Employed. Before the question of whether consent is a defense can be answered, one must consider the legal standard to be applied. For post-trial detainees, “[a] sexual relationship between an inmate and a guard may rise to the level of harm required for an Eighth Amendment claim. Sex and coercive relationships are complicated and the level of harm—or lack thereof—will depend on the facts of a given case.” Chao v. Ballista, 806 F. Supp. 2d 358, 374 (D. Mass. 2011). Whether sexual abuse rises to the level of “unnecessary and wanton infliction of pain” will depend on the circumstances of the particular case. Boddie v. Schnieder, 105 F.3d 857, 861-62 (2d Cir. 1997). “To prevail on a constitutional claim of sexual harassment, an inmate must therefore prove, as an objective matter, that the alleged abuse or harassment caused 'pain' and, as a subjective matter, that the officer in question acted with a sufficiently culpable state of mind.” Freitas v. Ault, 109 F.3d 1335, 1338 (8th Cir. 1997).

Pre-trial detainee cases are generally analyzed under the Fourteenth Amendment. Ojo v. Hillsborough Cty. Dep't of Corr., No. 12-cv-204-SM, 2012 U.S. Dist. LEXIS 142509, at *5 (D.N.H. Sep. 25, 2012)(“The Fourteenth Amendment protects a pretrial detainee from unwanted sexual contact by prison officials. Such a claim may be analyzed by analogy to the legal standards governing excessive force claims.”); Maxwell v. Talley, No. 4:07CV00669 SWW/BD, 2010 U.S. Dist. LEXIS 85200, at *10-11 n.4 (E.D. Ark. July 12, 2010) (“Because Plaintiff Smith was a pretrial detainee at the time of the alleged assault, her claims are analyzed under the due process clause of the Fourteenth Amendment. Under that analysis, a pretrial detainee's constitutional rights are violated if the conditions of confinement amount to punishment.”).


Consent is not a defense to a criminal charge. 
Under most criminal statutes, consent cannot be a defense when a prison guard has sex with an inmate because of the superior relationship of the official. These cases are treated as statutory rape. Along that line, some circuits have recognized that prisoners are incapable of consenting to sexual relationships with a prison official even in a civil Section 1983 case. Lobozzo v. Colorado Dep't of Corr., 429 F. App'x 707, 711 (10th Cir. 2011) (stating, with no analysis, “[i]t is uncontested that Lobozzo, an inmate, could not legally consent to sexual activity with Martinez, a guard”); Carrigan v. Davis, 70 F. Supp. 2d 448 (D. Del. 1999) (concluding that “as a matter of law . . . the consent defense is unavailable” to a prison guard who engages in a sexual act with a prisoner); Cash v. County of Erie, No. 04-cv-0182, 2009 U.S. Dist. LEXIS 91232, 2009 WL 3199558, at *2 (W.D.N.Y. Sept. 30, 2009). The rationale for these decisions rests primarily on the imbalance of control between prison guards and prisoners. Wood v. Beauclair, 692 F.3d 1041, 1046-1047 (9th Cir. Idaho 2012) (Even if the prisoner concedes that the sexual relationship is “voluntary,” because sex is often traded for favors, it is difficult to characterize sexual relationships in prison as truly the product of free choice.).

Consent can a defense to a constitutional tort. Other jurisdictions allow consent as a full defense to Section 1983 claims. An example is found in the Eighth Circuit case of Freitas v. Ault, 109 F.3d 1335 (8th Cir. 1997). In Freitas, a male inmate brought a § 1983 action against a warden and a female prison employee, alleging that a guard sexually harassed him in violation of the Eighth Amendment. After a bench trial, the district court found that the sexual relationship between the inmate and the employee was consensual, so the inmate failed to establish an Eighth Amendment sexual harassment claim. In affirming the district court, the Eighth Circuit agreed with the district court's factual determination that the relationship between the inmate and the employee was consensual, and noted that the record contained no evidence, other than the inmate's unsubstantiated assertions, supporting his claim that he succumbed to the employee's advances because she was his boss and he feared the possible negative consequences of reporting her actions. The circuit court concluded that, because the sexual interactions between the inmate and the employee were consensual, there was no violation of the Eighth Amendment.


On cross-appeal, Mr. Freitas contends that the trial court erred in finding in favor of Ms. Howard on his sexual harassment claim. While we have previously held that prisoners can state a cause of action for sexual harassment under 42 U.S.C. § 1983 . . . we have never specified the underlying basis for such claims. We believe that because the sexual harassment or abuse of an inmate by a corrections officer can never serve a legitimate penological purpose and may well result in severe physical and psychological harm, such abuse can, in certain circumstances, constitute the “'unnecessary and wanton infliction of pain,'“ . . . forbidden by the Eighth Amendment. . . . To prevail on a constitutional claim of sexual harassment, an inmate must therefore prove, as an objective matter, that the alleged abuse or harassment caused “pain” and, as a subjective matter, that the officer in question acted with a sufficiently culpable state of mind. . . .

 

Without deciding at what point unwelcome sexual advances become serious enough to constitute “pain,” we hold that, at the very least, welcome and voluntary sexual interactions, no matter how inappropriate, cannot as matter of law constitute “pain” as contemplated by the Eighth Amendment. Because we hold that Mr. Freitas has not established the existence of the objective component of a cause of action under the Eighth Amendment, we need not discuss the subjective component. We therefore reject Mr. Freitas's argument that the trial court erred in finding for Ms. Howard on his sexual harassment claim.

 

Freitas v. Ault, 109 F.3d 1335, 1338-39 (8th Cir. 1997).

 

The Western District of New York applied Freitas in denying an inmate’s claims under Section 1983 that she was raped by three prison officials:

 

Furthermore, even if it is assumed arguendo that Fisher's hearing testimony was credible, she still has not established a clear or substantial likelihood of success on the merits with respect to a number of the individual defendant correction officers. On her claims of rape under § 1983, Fisher has the burden of showing lack of consent. Lyons v. Williams, 91 F.3d 1308, 1311 (9th Cir. 1996), cert. denied, 136 L. Ed. 2d 837, 117 S. Ct. 949 (1997). Fisher's own testimony about her sexual relationships with defendants Schwartz, Hemley and Kuttner can only reasonably be interpreted as showing that the relationships were consensual in nature. While testifying, Fisher never used the word “rape” to describe her sexual interactions with these defendants. In contrast, she expressly stated that defendants DiSalvo and Schmidt “raped” her. Further, she presented no evidence that either Schwartz, Hemley or Kuttner forced, threatened or coerced her to have sex. She admitted that she did not resist them or tell them no. She testified that she had sexual relations with Schwartz and Hemley on several occasions and described each of them as a “friend.” She indicated that she ended her sexual relationship with Schwartz, not because he raped or abused her, but because she “didn't miss him” when she was at Bedford Hills. Although, as stated above, Fisher's prison records indicate that she was never hesitant or afraid to complain to prison officials about perceived mistreatment by correction officers, she did not report her alleged sexual interactions with these defendants until months after they occurred, and she testified that she had sexual relations with Hemley even after she had reported him. Thus, with regard to Schwartz, Hemley and Kuttner, Fisher has failed to show lack of consent, even if her testimony is assumed to be true. . . .

 

Applying Freitas to the instant case, the Court finds that, even if Fisher's testimony had been found credible, Fisher failed to establish an Eighth Amendment violation with regard to defendants Schwartz, Hemley and Kuttner. As stated above, Fisher's own description of her alleged sexual relationships with these individuals shows that they were consensual. Under Freitas, consensual sexual interactions between a correction officer and an inmate, although unquestionably inappropriate, and in this Court's view despicable, do not constitute cruel and unusual punishment under the Eighth Amendment.

 

Plaintiffs argue that there exists a “power discrepancy” between a correction officer and an inmate, making it impossible for an inmate to ever truly consent to having sexual relations with a correction officer. While the Court agrees that a correction officer's position of authority over an inmate is a factor that should be considered when determining, factually, whether or not there was consent, plaintiffs have cited no case law or applicable statutory authority to support the proposition that an inmate may never, as a matter of law, consent to sexual relations with a correction officer. Indeed, the Eighth Circuit, in Freitas, clearly held that an inmate may consent to sexual relations with a prison employee. Here, there is no credible evidence that either Schwartz, Hemley or Kuttner used their positions as correction officers to force, threaten or coerce Fisher into having sex.

 

Fisher v. Goord, 981 F. Supp. 140, 174-75 (W.D.N.Y. 1997).

 

When defending cases arising out of sex between an inmate and a guard, consent may be a defense in your jurisdiction. While not exhaustive, the cases cited here and below may be useful in determining if and when the defense of consent is viable.

Sex with Consent between a prisoner and guard is:


Never a violation of the eighth amendment:

  • 2nd Cir.
    • Fisher v. Goord, 981 F.Supp. 140, 174-75 (W.D.N.Y. 1997) (“Under Freitas, consensual sexual interactions between a correction officer and an inmate, although unquestionably inappropriate, and in this Court’s view despicable, do not constitute cruel and unusual punishment under the Eighth Amendment.”)
  • 3rd Cir.
    • Phillips v. Bird, Civil Action No. 03-247-KAJ, 2003 U.S. Dist. LEXIS 22418, at *17-18 (D. Del. Dec. 1, 2003) (”That an inmate cannot assert consent as a defense to the crime articulated in 11 Del. C. § 1259 does not mean that an inmate can avoid the consequences of consent in a civil suit.”)
  • 5th Cir.
    • Petty v. Venus Correctional Unit, 2001 WL 360868 at *2 (N.D. Tex. April 10, 2001) (dismissing inmate's § 1983 claim because "plaintiff has not shown the alleged [sexual] harassment to have caused him pain").
  • 8th Cir.
    • Freitas v. Ault, 109 F.3d 1335 (8th Cir. 1997)("[W]e hold that, at the very least, welcome and voluntary sexual interactions, no matter how inappropriate, cannot as matter of law constitute 'pain' as contemplated by the Eighth Amendment").
  • 10th Cir.
    • Graham v. Sheriff of Logan Cty., No. CIV-10-1048-F, 2012 U.S. Dist. LEXIS 189549, at *31 (W.D. Okla. Nov. 1, 2012) (holding that one time consensual encounter that did not result in any favors could not constitute a violation of eighth amendment rights)

May be a violation of the eighth amendment:

  • 1st Cir.
    • Chao v. Ballista, 772 F. Supp. 2d 337, 349 (D. Mass. 2011) (differentiating the factual circumstances from Freitas v. Ault, and holding that consent cannot be determined as a matter of law and must be a factual inquiry found at trial).
  • 2nd Cir.
    • Boddie v. Schnieder, 105 F.3d 857, 861 (2d Cir. 1997) (holding that severe or repetitive sexual abuse of an inmate by a prison officer can constitute an Eighth Amendment violation).
  • 3rd Cir.
    • White v. Ottinger, 442 F. Supp. 2d 236, 241 (E.D. Pa. 2006) (holding that evidence that officer knew she was in a position of power and that is why the inmate agreed to sexual acts created a genuine issue of material fact as to consent and the evidence could prove assault occurred which was sufficiently serious enough to constitute violation of eight amendment rights).
  • 8th Cir.
    • Morgan v. Glen, No. 6:12-cv-06098, 2014 U.S. Dist. LEXIS 14740, at *11 (W.D. Ark. Feb. 6, 2014) (“Even voluntary sex may rise to the level so as to constitute a violation of the Eighth Amendment.”) (citing Chao v. Ballista, 772 F. Supp.2d 337 (D.Mass. 2011))
  • North Dakota Supreme Court
    • Grager v. Schudar, 2009 ND 140, ¶ 18, 770 N.W.2d 692, 697 (“An adult prisoner's apparent consent to or participation in sexual conduct with a jailer imposes neither absolute liability on the jailer nor a complete bar to the prisoner's recovery in a civil action premised upon the sexual conduct”)

Per se a violation of the eighth amendment:

  • 2nd Cir.
    • Cash v. County of Erie, 2009 WL 3199558, at *2 (W.D.N.Y.) ("Because plaintiff was incarcerated, she lacked the ability to consent to engage in sexual intercourse with [defendant guard] Hamilton as a matter of law).
  • 3rd Cir.
    • Carrigan v. Davis, 70 F. Supp. 2d 448, 452-53 (D. Del. 1999) (holding as a matter of law that vaginal intercourse or fellatio between an inmate and officer is a per se violation of the Eighth Amendment).
  • 10th Cir.
    • Lobozzo v. Colo. Dep't of Corr., 429 F. App'x 707, 711 (10th Cir. 2011) (“It is uncontested that Lobozzo, an inmate, could not legally consent to sexual activity with Martinez, a guard. And no one disputes that rape is sufficiently serious to constitute a constitutional violation.”)

[1] In most, if not all, states sex between a prison guard and an inmate is always rape because the inmate is presumed to be incapable of giving consent while incarcerated.



Construction Law

Quote of The Month

If you fell down yesterday, stand up today. H. G. Wells


Featured Member


R. Matthew “Matt” Cairns is a Shareholder-Director in Gallagher, Callahan & Garrell, PC in New Hampshire. His practice is diverse. He represents the interests of individuals, professionals, insurers, manufacturers, transportation and other companies in diverse commercial, complex and traditional litigation matters in all state and federal courts and state agencies.

Matt also serves as general counsel to several closely held businesses in New Hampshire. He is also experienced in general corporate and municipal representation, and risk management training.

In October 2011, Matt completed a one-year term as the 2011 president of DRI. Matt is selected for inclusion in The Best Lawyers in America® in the fields of Construction Litigation, for which Best Lawyers® further recognized him as "Lawyer of the Year" 2015, Concord, NH, Labor & Employment Litigation, Municipal Litigation, Personal Injury Litigation and. He has also been selected to the list of New England Super Lawyers® since 2007. Matt is the only New Hampshire lawyer listed in the International Who's Who of Business Lawyers under Product Liability Defense since 2014.

Matt serves as a Dean of the FDCC Litigation Management College and is currently Chair of the FDCC Products Liability Section. He is admitted to the New Hampshire Supreme Court, United States District Court for the District of New Hampshire, United States Bankruptcy Court for the District of New Hampshire, the First Circuit Court of Appeals, and the United States Supreme Court.

 

Upcoming Events

During the week of July 27, 2017 at the Fairmont Le Montreux Palace, Derek Lick, Matt Cairns, and Robert Moore will address “Contractual Risk Transfer – The Changing World of Indemnification and Insurance in Construction Contracts and Litigation.

Wouldn’t it be nice if others would contractually agree to take responsibility for your errors?  The panel will first discuss how general contractors attempt to transfer risk to subcontractors and require subcontractors provide them with insurance coverage.  Then they will focus on how some states have begun to prohibit or limit such requirements either through legislative action or as the result of case law.  These risk-transfer provisions can have a significant impact on our clients, as they can require indemnification for all risk and liability, sometimes regardless of fault.  Similarly, the insurance coverage provisions can require a subcontractor to obtain insurance for the general contractor for the general contractor’s own fault – sometimes in an attempt to circumvent anti-risk-shifting law.  The panel is expected to highlight the changing landscape of risk shifting so that FDCC members can quickly assess the impact and enforceability of such provisions.  Please plan to attend.

For the Winter meeting at Amelia Island, we are planning for the following:

“Reversing the Reptile Through Voir Dire”
Stuart Simon of AJC and Marc Young of Cokinos | Young and who is Chair of Trial Tactics, and Marc Harwell of Leitner, Williams, Dooley & Napolitan, PLLC and perhaps a few others will explore novel methods of questioning during voir dire to reveal the jurors who are most susceptible to reptile tactics by plaintiff’s counsel, to rehabilitate the venire panel, and to reveal to the panel the manipulation that counsel for the plaintiff has employed and in so doing use the reptile theory to bite the real reptile.

 

News and Noteworthy

Please send to Marc Harwell at marc.harwell@leitnerfirm.com notice of new noteworthy verdicts, settlements, decisions; awards, honors, or achievements; and articles for publication to the Construction Section.

Blog Post

Check out our section’s blog last month on the FDCC website.  

And each quarter thereafter, the Construction Section will continue to post an informative blog that provides practical advice and information that can only help you in your practice. If you have addressed through brief or otherwise a topic that is particularly relevant and insightful for the Construction Industry, please send to Marc Harwell for consideration.


Membership

If you know of an attorney who you think is worthy of the FDCC, please mention him or her to Marc, and he will assist with the admissions proposal process.

Enjoy Switzerland!


Data Breach, Privacy & Cyber Insurance Law


The Anthem $115 Data Breach Settlement: A Tipping Point?

Seven years ago, a Texas jury awarded a woman name Melinda Ballard $32 million in what was touted as a toxic mold lawsuit. Almost overnight, a cottage mold litigation industry sprang up. Seminars on how to litigate a mold case from plaintiffs’ and defendants’ perspectives proliferated and were standing room only (I know, I spoke at some). Plaintiffs lawyers advertised their mold expertise in a massive hunt for clients. Lawsuits galore. Experts and consultants came out of the woodwork as moon suits and containment centers like those used for asbestosis abatement became the norm for wiping down common mold with bleach from ordinary walls. Never mind that the Ballard case was really an insurance bad faith case. Never mind that mold was and is ubiquitous. Never mind that the causal relationship between mold and serious illness is, at best, sketchy. Millions of dollars spent in costs and legal fees until the hysteria burned itself out.


Have we reached a Melinda Ballard moment with data breach litigation?  Last month, Anthem agreed to settle a class action over the health insurer’s massive January 2015 data breach. In that breach, hackers obtained and compromised the data of some 78.8 current and former Anthem insureds and employees that led to a probe by the Federal Bureau of Investigation and massive publicity. The information compromised included names, birthdates, Social Security numbers, medical IDs, street and e-mail addresses and employee data, including income.

After the predicable litigation commenced and ran its course, Anthem agreed to pay $115 million to resolve consumer claims over the attack in the largest data-breach settlement in history. As part of the proposed settlement, Anthem agreed to set aside some $15 million to pay for out-of-pocket expenses incurred because of the data breach and to establish a fund to buy at least two years of credit monitoring services for the class to help protect them from fraud. For individual class members who already have their own credit-monitoring services and don’t want to enroll in the settlement’s plan, the settlement provides alternative compensation of as much as $50 per class member.

The proposed accord, which would end class-action lawsuits filed in several states, requires approval from a federal judge in San Jose, California.

Data breach suits have had mixed success in the courts. Substantial Article III standing issues exist since often the damages are only possible or threatened, not actual. Where the breach is compromised financial information, fraudulent changes resulting from compromised account information are reversed by card issuing banks, and only a small percentage of people are actually victimized by identity theft. And even if plaintiffs get past a motion to dismiss for lack of standing, there remain lots of procedural and substantive hurdles. So while other breach cases have outright failed in proving standing (as with Barnes & Noble’s data breach), others have settled for relatively modest sums, such as Target’s recent $18.5 million settlement over its 2013 breach with state attorneys general and a $10 million settlement with consumers.

But some believe the announcement of a $115 million settlement could suggest to the plaintiffs bar that these cases are now lucrative, initiating a feeding frenzy similar to that which occurred after the Ballard case. After all, data breach cases are costly to defend and, if successful, could pose significant exposure particularly if the numbers involved are large. And there are regulatory and attorney general potential liabilities. Not to mention the publicity and complicated nature of responding to data breaches prelitigation and the multitude of often inconsistent state laws which make the chance for errors in the initial handling process possible.

But before we all gear up for another wild litigation ride, there are several points to keep in mind. First, the Anthem breach involved a huge number of people and tons of data. Much of the data was health records, some of the most sensitive and valuable information on the black market. The possibility for mischief with a person’s health records is pretty significant. The regulatory framework involving health records is daunting. So from a standing perspective, it would be easier for a court to conclude that the data has value and/or the threat of harm is “imminent”.  Stolen health records increase the “anger factor” that often drives huge verdicts. These factors all make the Anthem case pretty unique.

Damages in most run of the mill data breach cases not involving health data, though, remain hard to show with any certainty. Given the number of data breach incidents that have already occurred, more and more people already have credit monitoring in place reducing the value of this as damage element. In financial breaches, consumers at least are fairly well protected and knowledgeable.

And unlike the mold situation, the threat of data breach is not one to a person’s health as much as it is to their convenience, making individual damages in most cases pretty low. So that means to succeed, plaintiffs must pursue class actions with uncertain recoveries in an area the law relating to which is still uncertain. From the plaintiffs perspective, a proverbial long shot that could be expensive to bet on.



Drug, Device and Biotechnology


Montreux Summer 2017: 
Reminder that on Wednesday, July 26, 2017 at 7:45 a.m. we will hold the joint DD&B/Transportation/Class Action program entitled: From Farm to Table or Felon to Table: FSMA - What is it and what it means for foreign suppliers. An Update on Implementation, Compliance, Litigation and Enforcement.  This will be a dynamic panel addressing compliance requirements, risk reduction strategies and current enforcement and litigation trends under the new rules.  With a new administration at the helm, it is unclear how the agencies will enforce the new requirements but what is clear is that over 4,000 pages of new rules provide a lot for this multi-section panel to cover.


Please arrive early for the joint program (if that is possible) to discuss any ideas you have for initiatives for the DD&B Section for the next year.


DD&B Webcast:

We have made a change to the topic for our webcast scheduled for early September 2017. The topic is: Drug Device and Biotech: Shifting Political Winds –what does it mean for FDA regulated industry? Regulatory trends: what was left undone under the Obama Administration and where is FDA heading?

Amelia Island Winter 2018:

The DD&B Section is sponsoring a program topic for the Winter 2018 program on opioids.  Not a day passes that there is not a news headline, new medical journal or other data disseminated concerning opioids.  In fact, the federal Department of Health and Human Services puts it this way: “[t]he United States is in the midst of a prescription opioid overdose epidemic.” Our speakers are leading advocates on these issues and the panel will focus on where we are today, how we got here and where this is headed.


Employment Practices and Workplace Liability


DOL Files Reply Brief: Now What for Employers?

On June 30, 2017, the Department of Labor (DOL) filed its long-awaited reply brief in State of Nevada et al. v. U.S. Department of Labor, No. 16-41606 (5th Cir.), the appeal regarding the overtime regulations that has been pending in the Fifth Circuit since before President Trump’s inauguration.  The reply brief provides insight into DOL’s position on the regulations following the inauguration, a position that was in question until the reply brief was filed.  As a result, employers now have a clear picture of DOL’s position on its ability to promulgate regulations, but remain unclear as to what the salary level will be in the future. 


Background

DOL issued final regulations in May of 2016 that changed the salary level from $455 per week to $913 per week, more than doubling the prior threshold amount to qualify as an exempt executive, administrative and professional employees (EAP).  The regulations were scheduled to take effect on December 1, 2016, which provided employers with time to address and implement the regulations.  While employers scrambled to determine how to implement them and whether to raise salaries to allow employees to continue to qualify for the EAP exemption, on November 22, 2016, U.S. District Judge Mazzant from the Eastern District of Texas issued a nationwide preliminary injunction that precluded DOL from implementing or enforcing the final regulations in State of Nevada v. U.S. Department of Labor, No. 4:16-CV-00731 (E.D. TX 2016). 

In evaluating the extent of DOL’s authority to define or delimit the exemptions, Judge Mazzant noted that the Congressional delegation of authority to DOL was limited by the plain meaning of the statute and by Congressional intent that the EAP exemptions under the Fair Labor Standards Act (“FLSA”) be focused on the bona fide duties that an employee actually performs.  Judge Mazzant held DOL exceeded its authority and ignored the Congressional intent by attempting to limit the EAP exemptions, not based on any bona fide duties, but rather by supplanting the duties test and replacing it with a minimum salary requirement that would automatically determine an employee’s eligibility for overtime without regard to the employee’s actual job duties or responsibilities. 

DOL filed its appeal on December 1, 2016, initially requesting expedited briefing the following day along with a request for ruling from the Fifth Circuit by December 8, 2016.  While the Fifth Circuit did not agree to decide the case by December 8, 2016, it did agree to expedite the appeal, scheduling oral argument on January 31, 2017, only 11 days after the inauguration.  However, following the inauguration, the Department of Labor filed three motions requesting extensions to file its reply brief so that incoming leadership would have sufficient time to consider the issues presented in the appeal.  As a result of the third motion, the brief was due on June 30, 2017.

The Department of Labor’s Reply Brief


In its brief, DOL argued that the court erred in issuing a nationwide preliminary injunction when it held that DOL exceeded its regulatory authority.  DOL noted that it had more than a 75-year history of issuing regulations to define the EAP exemption.  Relying on both Fifth Circuit and Supreme Court holdings, DOL argued that its regulatory activity is supported by the text, purpose and history of the EAP exemptions and is consistent with Congress’ delegation of broad authority to “define and delimit” the exemption.  It seeks to have the Fifth Circuit confirm its authority.

However, DOL chose not to request review of the actual salary level.  Noting that Judge Mazzant’s holding, which addressed the threshold legal issue of DOL’s authority, did not reach whether the salary level of $913 per week was arbitrary or capricious or whether it was supported by the rulemaking record, DOL nonetheless chose to forgo argument on this topic, advising the court that it “has decided not to advocate for the specific salary level ($913 per week) set in the final rule at this time and intends to undertake further rulemaking to determine what the salary level should be.”  By doing so, DOL has left the salary level open for further discussion

This position is not altogether surprising in that Labor Secretary Acosta has testified that he questioned the need for the salary level to increase to $913 per week, but did not question the need for an increase from $455 per week.  He has suggested that a salary level in the low $30,000 range would be more appropriate.  If successful in its appeal regarding its rulemaking authority, it seems clear that DOL will move to increase the salary level without otherwise addressing the duties test in the FLSA.  By doing so, it will likely take swift action after the request for information process to promulgate new regulations increasing the salary level, likely at or near the level suggested by Secretary Acosta.


Employer Takeaways

For many employers, employee salaries have already been increased to conform to the salary test in the final rule.  It will be difficult under such circumstances to reduce those employee’s salaries, even though DOL chose not to defend its $913 level per week, without alienating employees.  For those employers that chose not to implement the new salary level pending appeal, the risk of failing to do so appears to be diminished or eliminated.  However, it seems clear that a higher salary level is simply a question of time based on DOL’s reply brief.  If successful on appeal, employers should anticipate swift action by DOL to increase the salary level by a few hundred dollars per week.  In the meantime, employers that did not implement the $913 per week salary level should review their existing EAP employees to determine how to implement the changes that are certain in the future.


Energy Utilities Law

2017 Annual Meeting  - The long anticipated 2017 Annual Meeting in Montreux, Switzerland is only a few weeks away.  For those fortunate section members who will be going to Montreux, I hope you can join Section Vice Chair Ryan Beckett for a section fellowship lunch at noon on Thursday, July 26 at the Montreux Jazz Café, conveniently located in the conference hotel.  Please contact Ryan at Ryan.Beckett@butlersnow.com if you can join him.  We have shamelessly promoted the program “Walking the Tightrope: Balancing the Defense in a War on Multiple Fronts” featuring section members Bruce Parkerson and Michael O’Connor in our last two e-newsletters, so I will only add that this will be a fascinating program not be missed.


2018 Winter Meeting  - Alas, we cannot rest on our laurels regarding section presentations. In fact, we are a little behind in planning a presentation for the 2018 Winter Meeting which will be held on Amelia Island from 2/24-28. Please share any suggestions you may have for a presentation topic. In response to feedback from FDCC members, the meeting will be shorter than usual, which hopefully will allow more people to attend.  For those members with flexible schedules, there will be a unique opportunity to travel to Cuba when the meeting ends.  More to come on that.

Other Meetings –  There are two other upcoming meetings worth noting.  The 14th Annual Corporate Counsel Symposium will take place from 9/17-19 at the Hotel Sofitel in Philadelphia.  The theme of this year’s conference is “A World View: How Corporate Counsel Understand Risk”.  We encourage defense counsel members to invite a client to attend.  The following month, the Insurance Industry Institute “I3” meeting will be held in at the Sheraton Hotel in New York on 11/9-10.   The theme of this bi-annual meeting is “Tapping Into Insurance Insights”.  I will be participating on a panel entitled “Major Claims=Major Challenges”, which will explore the insurer, policyholder and broker perspectives on the special challenges posed by coverage defenses in the face of catastrophic claims.

Other Section News - My two-year term as section chair is ending.  It has been a pleasure to help launch this section and to work with section members, which has afforded me the opportunity to make new FDCC friends in the process.  I believe this section has lots of potential, which I am confident will be achieved under the leadership of incoming chair Deron Wade.

For those traveling to Montreux, bon voyage and a happy summer to all!


Healthcare Practice


OIG Issues Favorable Advisory Opinion Relating to Waivers of Copayments
On July 7, 2017, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) issued Advisory Opinion 17-02.  The Advisory Opinion relates to a request by a hospital outpatient facility and a biomedical company that proposed to reduce or waive the cost-sharing amounts owed by Medicare beneficiaries for items and services furnished in connection with a clinical research study.

Brief Summary of Fact
The hospital is a non-profit, full-service, 171-bed regional medical center that provides inpatient and outpatient services and operates an outpatient facility (“Center”). The Center furnishes comprehensive wound care services, primarily to patients with chronic, non-healing wounds.

The biomedical company manufactures biodynamic therapies for wound care, including a product cleared by the U.S. Food & Drug Administration, which is indicated for the management of ulcers and exuding wounds (“Wound Care System”).

Under the proposed arrangement, the Center would reduce or waive applicable cost sharing amounts owed by financially needy beneficiaries for all study-related items and services.  The biomedical company certified that it would not compensate or reimburse the Center or the hospital in any manner for reduced or waived cost-sharing amounts owed by Medicare beneficiaries.

Under the Proposed Arrangement, the Center would determine a beneficiaries’ financial need in accordance with the hospital’s financial need policy. According to the financial need policy, to qualify for financial assistance, individuals must complete an application and provide documentation such as payroll check stubs, unemployment records, documentation of government benefits, and any other financial documentation requested by the hospital.  In addition, the hospital’s financial need policy requires patients to certify that all information provided on the financial need application is true.  Additionally, the waivers or reductions would not be on a non-routine basis and would not be advertised.

Brief Legal Summary
The anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. For purposes of the anti-kickback statute, “remuneration” includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind.  Where remuneration is paid purposefully to induce or reward referrals of items or services payable by a Federal health care program, the anti-kickback statute is violated. By its terms, the statute ascribes criminal liability to parties on both sides of an impermissible “kickback” transaction.

The Beneficiary Inducement Civil Monetary Penalty rule provides for the imposition of civil monetary penalties against any person who offers or transfers remuneration to a Medicare or Medicaid beneficiary that the offeror knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or Medicaid. The OIG may also exclude a party from Medicare for violations of the Beneficiary Inducement CMP rule.

Conclusion
The OIG concluded that the Proposed Arrangement would not constitute grounds for the imposition of civil monetary penalties and although the Proposed Arrangement could potentially generate prohibited remuneration under the anti-kickback statute, the OIG would not impose administrative sanctions.  The OIG relied on several factors including: (1) there was no advertising of the offer to reduce or waive the cost-sharing or waiver, (2) the study participants would not be told of the offer unless the study participant expressed an inability to pay the cost sharing portion, (3) the reduction or waiver of cost sharing amounts was not routine, and (4) the waiver would be based on objective evidence of financial need.

To view the advisory opinion you may click on the following link:  https://oig.hhs.gov/fraud/docs/advisoryopinions/2017/AdvOpn17-02.pdf


Intellectual Property

Supreme Court Finds the Lanham Act’s Disparagement Clause Unconstitutional

On June 19, 2017, the Supreme Court issued its decision in Matal v. Tam, No. 15-1293.  The case involved a challenge by the Asian rock band The Slants to the United States Patent & Trademark Office’s (“PTO”) denial of registration of the band’s name as a trademark.  Section 2(a) of the Lanham Act (15 U.S.C. Sec. 1052(a)) authorized the PTO to refuse registration of any mark that the trademark examiner found to be disparaging.  The Slants contend that they had chosen their name in order to reclaim what had become a derogatory term for Asian-Americans and argued that Section 2(a)’s disparagement clause was unconstitutional infringement on free speech.  The Supreme Court agreed, holding that the disparagement clause violates the free speech clause of the First Amendment.


This is an issue that the Intellectual Property Section has followed for some time.  The more well-known case involving the disparagement clause involved the PTO’s decision to cancel six trademarks owned by the Washington Redskins.  At the 2015 Winter Meeting, the Intellectual Property section presented on the Redskins matter and discussed the case law under the disparagement clause at some length.  Interestingly, at that time, the majority of courts had rejected First Amendment challenges to the disparagement clause.  There is no doubt that the Tam decision is a positive result for the Washington Redskins.  It will be interesting to see if the decision encourages others to seek registration of what may be considered disparaging terms or phrases as trademarks.


Professional Liability 


Service on a Non-Profit Board of Directors

"I don't know what your destiny will be, but one thing I do know: the only ones among you who will be really happy are those who have sought and found how to serve."         -   Albert Schweitzer

Service on a non-profit board of directors can be a transformative professional experience.  Although we all have the benefit of a law degree and the educational and experiential benefits that come with practicing law, board service requires us to learn and develop new skills – governance, fundraising, performance measurement and strategic planning among others. 

Board service builds strong leaders.  I often say that I got my law degree from UNC Chapel Hill and my PHD in leadership from StepUp Ministry, a non-profit in Raleigh, North Carolina, that helps low income people find employment, where I served as board chair for two years.  That experience changed my life, and I constantly encourage others towards board leadership.

But lawyers who are board leaders must be careful not to take on the role of “board lawyer.”  Naturally, other board members will look to the lawyer on the board for legal advice, just as you would look at the accountant for financial advice and the insurance professional for insurance advice.  The lawyer on the board, however, faces liability exposure if she gives legal advice that the board then relies upon to take board action.

What exposure does the lawyer board face?  First, if there is a claim that implicates a directors and officers liability policy, the D&O policy covers may exclude coverage for professional malpractice of the board lawyer.  The board lawyer’s professional liability policy may then be implicated, and, depending on the insurer, the professional malpractice policy may limit coverage for advice that the lawyer has provided to the non-profit board.  Although a lawyer on a non-profit board is rarely compensated for his service, thereby making it difficult to bring a negligence misrepresentation claim against him, a professional malpractice claim could easily lie where it is shown that the lawyer had a fiduciary duty to the organization, provided legal advice and was negligence in doing so.

To avoid these risks, a lawyer serving on a non-profit board should do the following:

  1. When recruited for board membership, make it clear that you are not agreeing to serve as the board’s legal counsel, but rather, you intend to serve in the same capacity as all other board members;
  2. If the board asks that you serve as legal counsel, share this information with your law partners and your insurer – ensure that you have sufficient professional liability coverage for the engagement;
  3. Determine what, if any, conflicts may arise with your firm’s current or future clients; run conflicts checks as appropriate; and
  4. Recuse yourself from all board action, and wall yourself off, for any matter that could pose a professional conflict for you and your firm.

Service on a non-profit board is deeply meaningful.  It undoubtedly makes us better people, better citizens and better leaders.  Just approach the role with the understanding that other board members and non-profit staff will instinctively look to you for legal advice, and prepare appropriately.

 

Toxic Tort and Environmental Law Content


Upcoming Events:

We are about to close out another Federation year with the Annual Meeting in fabulous Montreux, Switzerland.  Please plan to attend our CLE program presented with the Energy and Utilities Law Section on July 28 at 7:45 a.m., titled “Walking the Tightrope: Balancing the Defense in a War on Multiple Fronts.” The presentation will analyze aspects of the aftermath of the gas pipeline explosion in San Bruno, CA on September 9, 2010, which resulted in 8 deaths, multiple injuries and millions of dollars in property damage. Pacific Gas & Electric (PG&E) was forced to defend hundreds of civil lawsuits and claims while undergoing intense inquiries by several regulatory agencies at the state and federal levels. Federal criminal charges were brought against PG&E in the Northern District of California, which ultimately resulted in the company’s conviction on several counts. The presentation will explore the difficulties inherent in fighting multiple battles on multiple fronts, arising from the same set of circumstances, where each action in any context is likely to affect the defense in others.  The speakers are G. Bruce Parkerson, Plauche Maselli Parkerson, LLP, New Orleans, LA; J. Richard Caldwell, Jr., Rumberger Kirk & Caldwell, Tampa, FL; and Michael  J. O’Connor, Associate General Manager and Chief Legal Executive Law & Human Resources, Salt River Project, Phoenix, AZ.  The presenters have worked very hard, and I know you will learn something that you can share with a current or potential new client.

Recent Toxic Tort and Environmental Developments:          

The DC Circuit has at least temporarily thwarted the Trump administration’s efforts to ease some of the regulatory pressure on your oil and gas industry clients related to methane emissions.  For more information that you can share with your clients, please see the blog post titled, “Delay in Implementing Obama-Era Environmental Rule Found Improper,” explaining the court’s ruling in  Clean Air Council v. Pruitt, ___ F.3d ___, 2017 WL 2838112 (D.C. Cir. July 3, 2017), written by HeplerBroom LLC partner Michael Murphy. 

Looking Back and Planning Ahead:       

Thank you to all of the section members who contributed to our section programming, publications, and other section work in the past year.  I look forward to another year of leadership and hope that you will lend your talents to make the upcoming year the best for our section.  Below are the meeting minutes from our business and planning meeting, which recap our activities for 2016-17 and note plans we are making for new fellowship opportunities, CLE programs, and our section publications for the next year.  Please review the notes below and volunteer for one of the open slots.   

 

Toxic Tort and Environmental Law Section
Meeting Agenda and Minutes, July 13, 2017

1)    Pillars of the Strategic Plan and Brief Recap of Past Year’s Activities

a.    Fellowship
             
 i.  DRI Events

1.  Asbestos Medicine Seminar, Nov. 2016

2.  Products Liability Seminar, Feb. 2017

3.   Winter Meeting Dine Around, March 2017

 

b.    Membership
               i.  “All In” Drive – thanks for participating, and here are some results

  1.  258 names

  2.   54 new members so far

  3.   24 currently before the Admissions Comte.

  4.  180 names still on the prospect list

 

c.     Visibility/Value

  i.     CLE Programming at Winter Meeting –water rights and contamination litigation,
         well attended, cutting edge topic, lots of interest by attendees

  ii.    Publications by the Section Members

  1.  Quarterly Blogs

a.    OSHA Silica Exposure Rule

b.    OSHA Limits on Beryllium Exposure

  2.   Insights article –watch for it in July 2017:  “Can Biomarkers and
        Genetics Help Predict the Future of Malignant Mesothelioma?” by Kurt
        Reeg and Paul Knobbe

  3.   Monthly Newsletter – written by Chair and Vice Chairs each month

 

2)    Montreux 2017 Annual Meeting

a.    Fellowship Day, July 25, 2017

b.    Presentation with Energy and Utilities Law Section, July 28, 7:45 a.m.

 

3)    Planning for Winter Meeting 2018 in Amelia Island

a.    Convention Chair Brett Preston

b.    Program Chair Reid Manley

c.    Theme – Enlightening the Practice

d.    Ideas for presentation at Amelia Island?

 i.   Talc litigation

 ii.   Personal jurisdiction across various mass torts

iii.   Attacks on legislation to limit asbestos cases

iv.   Issues related to bankrupt  trusts – discovery, fraud

 v.   Piecemeal asbestos claims – plaintiffs filing against different groups of  
      defendants in different jurisdictions

e.    Volunteers interested in presenting at the Winter Meeting should contact Beth Bauer

 

4)    Upcoming fellowship and networking opportunities – Besides Annual Meeting

a.    Upcoming DRI and ABA meetings related to our section

b.    Corporate Counsel Symposium, Philly Sept. 17-19, registration open

c.     Asia Pacific Insurance Conference, Singapore, Oct. 18-20, early bird ends 7/31

d.    Insurance Industry Institute (I3), New York City, Nov. 9-10, 2017

e.    2018 Winter Meeting, Amelia Island, FL Feb. 24-28, 2018

f.      2018 Annual Meeting, Maui, HI July 29-Aug. 3, 2018

 

5)    Publication opportunities to grow your network

a.    Monthly newsletter – Volunteers needed

b.    Quarterly blog

  i.    Third Quarter – Paul Knobbe

  ii.    Fourth Quarter – Volunteer needed

c.     Insights –Volunteer needed

 

6)    Nominees for membership

a.    “All In” very effective, but still have requirement for section to nominate 2 people for
        membership each year

b.    Volunteer needed to spearhead this for the remainder of this term and next term
       (4 names total)

 

7)    New member outreach

a.    Volunteers needed

 

8)    Other business – None raised

 

 

Note:  After the conference call, I received notice that the following members are the section Vice Chairs for 2017-2018:


Vicki M. Smith

David A. Zuber

Kurtis B. Reeg

Paul J. Schumacher

Please contact any of us with your ideas for improving the TTEL section.

 

 

Transportation


I TRIED THE CASE AND WON (TWICE)—SO WHAT DID I DO WRONG?

By:  Terrence Graves


In the spring of 2014 I tried a case to a jury in one of the circuit courts in the Richmond, VA metropolitan area.  I represented a truck driver and his corporate entity in a lawsuit that had been filed against him by a young man who was operating a motor scooter.  The accident occurred on a 4 lane highway divided by double yellow lines.  The plaintiff was driving his scooter in the right lane headed westbound and had passed over a rise that blocked the ability of  following traffic to see smaller vehicles unless you were directly behind them. 

My client was deadheading (empty trailer) and headed home for the evening.  He was driving his tractor-trailer at 55 mph.  As he came over the rise, he saw the scooter in front of him and realized immediately that he was going a lot faster than the scooter was traveling.  He looked in his left rearview mirror and began braking at the same time.  He could see a set of headlights coming up on his left side, but couldn't tell if they were beyond the rear of his trailer or how close the vehicle was to his trailer, so he couldn't switch lanes and be assured that he wouldn't hit that vehicle.  He continued to brake and worked to maintain control of his vehicle in order to keep it from jack-knifing, while also edging to the left as much as possible in order to hopefully miss hitting the scooter.  He was unable to stop before colliding with the rear of the scooter although he stopped within 4-5 feet after the impact.  The scooter continued forward another 10-15 feet and the plaintiff was thrown off onto the highway.  The point of impact on the front of the tractor was identified by a dent that was approximately 18 inches to 2 feet from the right side of the front bumper.

Plaintiff suffered a concussion, injuries to his back, knees, shoulder and neck.  He was treated by multiple doctors, including an orthopedic surgeon, his primary care physician, and a pain management physician.  He claimed permanent injuries and an inability to work as an auto mechanic any longer. 

At trial, we based our liability defense on the plaintiff's contributory negligence.  We also argued that the client was free from negligence in causing the accident.  Virginia has a statute that provides that "any person operating a…motorized …scooter,  or moped on a roadway at less than the normal speed of traffic…shall ride as close as safely practicable to the right curb or edge of the roadway,…."  Virginia Code §46.2-905.  The argument that we spent the most time on in closing arguments was that the plaintiff was contributorily negligent because he was not riding his scooter as close as "safely practicable" to the right edge of the roadway.  The evidence conclusively showed that the scooter was being operated well into the right hand lane since the collision left a dent that was 18 inches to 2 feet from the right edge of the front bumper and he had obviously violated the statute and was guilty of contributory negligence and negligence per se.  The jury agreed with me and returned a defense verdict after about an hour of deliberation.

The good guys won, justice prevailed and we should all be drinking a beer right about now.  Not so fast.  The plaintiff filed a Petition for Appeal to Virginia's Supreme Court after his motion for a new trial was denied by the trial court.  Appeals to Virginia's Supreme Court are not a matter of right for civil cases.  You have to Petition the Court and argue to a panel of Justices why your case is worthy of their full consideration.

During the process of briefing his Petition for Appeal, plaintiff's counsel was reviewing the record of the trial court in preparation for having the record forwarded to the Virginia Supreme Court.  It was during this review that he "found" that one of the exhibits, which rightfully consisted of a redacted version of a counseling record, was stapled to the unredacted version of the document.  That unredacted version contained references to the plaintiff's drug use.  We had agreed with opposing counsel that the drug use was inadmissible and that was why the document was redacted.  Plaintiff's counsel immediately fastened upon the idea that the jury was allowed to see this inadmissible information and had somehow been tainted by learning that the plaintiff used illicit drugs.  He filed a motion to stay his Petition for Appeal with the Virginia Supreme Court and simultaneously filed a Petition for Relief From Judgment Pursuant to Virginia Code §§ 8.01-428 and 8.01-677 seeking collateral relief from the trial court's earlier judgement, which was presumably final. 

 

The Virginia Supreme Court denied his motion to stay and ultimately went on to deny his Petition for Appeal.

 

Virginia Code §8.01-428 is generally utilized as a device that allows defendants against whom default judgments have been entered to attack those judgments under the right circumstances. 

It provides as follows:

§ 8.01-428. Setting aside default judgments; clerical mistakes; independent actions to relieve party from judgment or proceedings; grounds and time limitations.

    1. Default judgments and decrees pro confesso; summary procedure. Upon motion of the plaintiff or judgment debtor and after reasonable notice to the opposite party, his attorney of record or other agent, the court may set aside a judgment by default or a decree pro confesso upon the following grounds: (i) fraud on the court, (ii) a void judgment, (iii) on proof of an accord and satisfaction, or (iv) on proof that the defendant was, at the time of service of process or entry of judgment, a servicemember as defined in 50 U.S.C. § 3911. Such motion on the ground of fraud on the court shall be made within two years from the date of the judgment or decree.

    2. Clerical mistakes. Clerical mistakes in all judgments or other parts of the record and errors therein arising from oversight or from an inadvertent omission may be corrected by the court at any time on its own initiative or upon the motion of any party and after such notice, as the court may order. During the pendency of an appeal, such mistakes may be corrected before the appeal is docketed in the appellate court, and thereafter while the appeal is pending such mistakes may be corrected with leave of the appellate court.

    3. Failure to notify party or counsel of final order. If counsel, or a party not represented by counsel, who is not in default in a circuit court is not notified by any means of the entry of a final order and the circuit court is satisfied that such lack of notice (i) did not result from a failure to exercise due diligence on the part of that party and (ii) denied that party an opportunity to pursue post-trial relief in the circuit court or to file an appeal therefrom, the circuit court may, within 60 days of the entry of such order, modify, vacate, or suspend the order or grant the party leave to appeal. Where the circuit court grants the party leave to appeal, the computation of time for noting and perfecting an appeal shall run from the entry of such order, and such order shall have no other effect.

    4. Other judgments or proceedings. This section does not limit the power of the court to entertain at any time an independent action to relieve a party from any judgment or proceeding, or to grant relief to a defendant not served with process as provided in § 8.01-322, or to set aside a judgment or decree for fraud upon the court.

    5. Nothing in this section shall constitute grounds to set aside an otherwise valid default judgment against a defendant who was not, at the time of service of process or entry of judgment, a service member as defined in 50 U.S.C. § 3911.

The plaintiff argued that subsections B and D were applicable to this instance.  He posited that the judge's law clerk must have mistakenly stapled the two documents together, which was in his estimation a "clerical mistake."  He fastened on the idea that subsection D allowed him to file this "independent action" in order to relieve him from the judgment previously entered by the trial court.


Virginia Code §8.01-677 provides "For any clerical error or error in fact for which a judgment may be reversed or corrected on writ of error coram vobis, the same may be reversed or corrected on motion, after reasonable notice, by the court."   Once again, the plaintiff argued that the trial court had the power to "correct" this "clerical error" due to the fact that judgment never should have been entered because of the mistaken provision of the inadmissible document to the jury.

Recently, the parties presented evidence during a bench trial on the issues raised by these statutes.  The plaintiff's goal was to have the judgment from the prior trial set aside and to be granted a new trial.  This was in spite of the fact that his appeal to the Commonwealth's highest court had been denied.  Thankfully, the plaintiff was unable to prove the elements necessary to support a cause of action under §8.01-677.  The test for the use of §8.01 that must be met in order for it to be applicable requires that the alleged error be (1)"an error of fact not apparent on the record, (2) not attributable to the applicant's negligence,  and (3) which if known by the court would have prevented rendition of the judgment."  Commonwealth v Morris, 705 S.E. 2d 503 (VA 2011). 

 

After the presentation of evidence by the parties, the court found that the plaintiff had failed to prove 2 out of the 3 elements necessary to support a cause of action under §8.01-677, with the only notable element proved being that it wasn't attributable to the negligence of either the plaintiff or his counsel.  The court also found that §8.01-428 (B) and (D) were not applicable to our case as it was intended to deal with matters involving default judgments.

Looking back, it was difficult to figure out what I could have done differently to avoid having to basically try this case twice, however, I would suggest that if you find yourself in a similar situation that you pay attention to a couple of details.  First of all, if the trial judge doesn't offer counsel the opportunity to examine the exhibits prior to closing argument, you should ask to see them.  Look through them and then give opposing counsel the opportunity to do the same.  At the end of the trial in 2014, I didn't review the exhibits, as I was using Trial Director at the time and had all of the exhibits scanned into the trial presentation program.  I didn't think I needed to look at them, but if I had looked at them and the redacted document was stapled to the unredacted document, I would have caught it then before it was ever sent to the jury and avoided having to deal with the independent action to set the judgment aside.  Secondly, I would have met with opposing counsel when he went to review the record in the trial court when he was getting it ready for his appeal.  In Virginia, it is the responsibility of the appellant to make sure that the record is "perfected" for appeal.  If you are the prevailing party, you typically don't think that it is your burden to make sure that the record is straight, however, you have a vested interest in making sure that everything is done properly and that the parties are on the same page when it comes to the contents of the record.

 

 

Trial Tactics

Message from the Chair

As I write this month’s newsletter I’m sitting in my office at the end of the day trying to make sure I haven’t forgotten to include any time entries for the day when I noticed I had not received a phone call from anybody outside the firm today.  Use of the phone today is taken by many as a luxury they don’t have time for.  I still believe that every new case assignment should start with a phone call to opposing counsel.  The purpose of the call is many but in particular it is an attempt to understand and get to know your adversary.  In some communities you already know all of your adversaries but in many large communities there are always lots of new faces.  I still believe it’s important to establish a repoire with opposing counsel from day one.  My initial conversation usually includes an invitation for them to pick up the phone and call me if they ever believe there is a problem with discovery or with any aspect of our ongoing case related dealings.  I also try and get a cell phone number so that I can find them at a moment’s notice and I in turn provide mine.  In discussions with associates I’ve learned how easy it is for them to shoot an email where tone can’t be discerned.  I try to encourage all associates to pick up the phone and call their opposing counsel rather than send an email.  Emails are for follow up in my mind.  I explain that you can’t receive any valuable information from a Plaintiff’s attorney if all you’re going to do is shoot emails back and forth.  Plaintiff’s attorneys like to talk about their cases, like to talk about their witnesses, like to talk about facts, like to talk about their opinion of value.  This information is invaluable in trying to understand both Plaintiff’s counsel and his case.  You will never get that by email alone.  So as we prepare for our upcoming trip to Switzerland, let me encourage each and every one of you to remind all of those work for you and with you that they should try not and take the easy route in shooting an email but instead pick up the phone and call opposing counsel, meet them for lunch, learn about their family, understand what they like and what they don’t like.  I believe by doing so you’ll be a better advocate for your client and you’ll continue to work to make our profession the best it can be.  See you in Switzerland.

 

 

 

 

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more Calendar

1/22/2018
Webinar - Succession Planning for In-House Counsel

2/25/2018 » 2/28/2018
2018 Winter Meeting - Amelia Island

2/27/2018
Professional Women's Forum 2018

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5/20/2018 » 5/23/2018
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5/20/2018 » 5/23/2018
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