Product Liability: An Update from the PLC
Seminar Spotlight: 2022 Product Liability Conference
By Chip Adams
DRI’s 2022 Product Liability Conference was held in person in Las Vegas, Nevada, on February 2-6, and it was an outstanding success. The program included nine SLG breakout presentations, in addition to traditional main stage programming on cutting edge presentation topics, and a panel discussion on the right to repair with CPSC Commissioner, Bethesda, MD. The main stage programming was capped off by an afternoon of trial tactics presentations, with jury consultants discussing effective elements and style of presentation designed to captivate and persuade juries based on current research on product liability attitudes and beliefs, followed by discussions from both the plaintiff and defense side, and concluding with all the speakers discussing the reasoning behind their chosen arguments.
Networking events included a Diversity luncheon, Women in the Law luncheon, several small group networking events, and a joint networking event including the Product Liability Conference, Medical Liability and Healthcare Law Conference, and the Litigation Skills Seminar at the Commonwealth in downtown Las Vegas.
Chip Adams resides in Houston, Texas, as a partner with Gordon Rees Scully Mansukhani, LLP. Mr. Adams has extensive litigation experience in matters involving products liability, transportation law, toxic torts, construction and industrial bodily injury matters, and general liability.
Sunscreen: Getting Burned Has Never Been So Painful
By Charles Reynolds
One of the great bellwethers in products litigation is when personal injury attorneys begin to solicit plaintiffs for very specific product lawsuits. Over the last two years, several active and highly visible personal injury firms have done just that regarding sun care products. There appear to be (as of now) two basic allegations related to such products. First, possible chemicals contained in sunscreens leach into the body and become “toxic” or cause harm, particularly forms of cancer. Second, some sunscreen products are simply defective in their primary purpose by failing to prevent severe sunburn injury, or they have been mislabeled or misleading in their ability to prevent sun damage. Only the first of these theories will be examined in any detail here, although the probable expansion of liability to a much wider array of products makes the first theory far more prevalent in current litigation than the second.
The word “toxic” is thrown around a lot in both litigation and popular media when it comes to chemicals. However, any substance can become toxic in the right amount and the right frequency. For instance, water is toxic if you drink gallons and gallons of it, causing the body to shut down due to hyponatremia. The same is true from substances that range from arsenic to sugar. In excessive amounts, frequency, or duration, anything entering the body can be fatal. As toxicologists often say, “the dose makes the poison.” In the case of most sunscreens, the ingredient and alleged “poison” at issue is benzene.
Benzene is a common chemical and widely used in global manufacturing. Some industries use benzene to make other chemicals that are critical to making plastics, resins, and nylon and synthetic fibers. Benzene is also used to make some types of lubricants, rubbers, dyes, detergents, drugs, and pesticides. It is colorless and dissolves only slightly in water. While this is a very useful attribute for some products, it is also a recognized carcinogen. Most notably, it is found in large quantities in cigarette smoke and has been linked to an increased risk of several afflictions, such as blood cancers.
Why would benzene be used in sunscreen? It’s not . . . at least not intentionally according to manufacturers. It is thought that benzene in sunscreen or lotions is the result of contamination somewhere in the manufacturing process. “This isn't a sunscreen issue; it's a manufacturing issue,” said Adam Friedman, MD, professor and chief of dermatology at George Washington University. "We don't want those things to be blurred."
This seems at odds with a study from the U.S. National Library of Medicine that found that benzophenone, also known as oxybenzone, is commonly used in sunblock products like lip balm as a UV absorber. Lab studies have linked it to breast cancer although another study by the U.S. Department of Health and Human Services National Toxicology Program concluded that when used “within normal levels,” it does not have an effect on human hormone levels.
This is obviously an important distinction. If sun care products intrinsically contained an element harmful to humans, the scope of damage and the “fix” for such a flaw could be significant. Alternatively, if the dangerous element is an anomaly, as the industry maintains, the measures needed to make the product safe are straightforward. Simply ensure the contaminant is eliminated. This also means, of course, that the suspect chemical, or the “proximate cause,” of the defective product is more easily identified. If so, it may result in definitive prima facia evidence of negligence.
The cosmetic industry argues that even if benzene is present in certain sunscreens, it exists in very tiny amounts, and with only occasional use, it could be viewed as harmless. Unfortunately, an important element of the dosage making something a poison is the frequency of that dosage. Even minute amounts of a dangerous chemical, administered over and over and over again, can eventually lead to a toxic reaction in the body. For the last quarter century American dermatologists, the FDA, and probably your own mother have been preaching the benefits of sunscreen, preferably on a daily basis. As a result, sun blocking products are as common as hand soap. This is particularly the case in sunbelt states like Florida, Texas, Arizona and California where sun exposure is strong year-round. Who has not seen a young mother slathering sunscreen on a toddler at a park or beach to protect the vulnerable skin of a child? Moreover, one can scarcely find a makeup product or moisturizer that does not contain a sun blocking capability.
The mechanism of the problem is that pores on the skin allow tiny particles of benzene, or any element manufactured at a nano scale, to freely enter the body. Science and technology have advanced to the point that everything from medicine to makeup can contain chemical elements so small they can barely be seen with a powerful microscope. The pores of the human body are simply not designed to restrict elements at a sub-atomic scale entering human tissue. For a visual comparison, imagine that the planet earth is a single atom. By comparison, a nanoparticle would be approximately the size of a tennis ball. Think about that for just a moment to get some idea of the sub-atomic scale that is at issue.
Predictably, manufacturers deny any widespread or longstanding problem with any sun care products. Nevertheless, Johnson & Johnson issued a recall for some of its sunscreen sprays this past July. In October longtime sun care brand Coppertone followed suit, recalling five different sunscreen sprays. Adding to the public awareness and concern, several newspapers and fashion magazines have recently published the names of dozens of popular sunscreen brands and manufacturers whose products allegedly contained benzene.
Most recently, at the end of December 2021, Procter & Gamble recalled numerous lines of aerosol shampoos and conditioners due to high levels of benzene. According to P&G, the chemical was detected in the propellant of several lines of beauty products under the labels of Pantene, Herbal Essences, and Old Spice. Although the levels of benzene detected were safe even under long term exposure, cancer risks were acknowledged as defined by the CDC. As mentioned above, the personal injury litigation industry took note and began signing up clients who have suffered an array of cancers following the alleged use of these same sun care, beauty, and anti-aging products.
Cue the Lawyers
The result? A host of cases alleging personal injury resulting from defective sunscreens were filed around the country and eventually consolidated into multi-district litigation. On October 8, 2021, the U.S. Judicial Panel on Multi-District Litigation consolidated all the matters in the Southern District of Florida for pretrial proceedings. The suits, primarily pending against Neutrogena- and Aveeno-branded products (manufactured by J&J), as well as retailer Costco, involve not only lotions, but a wide assortment of aerosol products as well. The judicial panel recognized, and then apparently discarded, concerns that personal injury actions are not a good fit for consumer class actions. It remains to be seen whether this issue will resurface as a later challenge, but for now, multiple plaintiffs will proceed under the case heading of IN RE: Johnson & Johnson Sunscreen Marketing, Sales Practice and Products Liability Litigation.
While major players in the industry (such as Johnson & Johnson and Procter & Gamble) have wisely attempted to get ahead of the storm with voluntary recalls, other companies are likely watching and waiting to see if individual or class actions are unavoidable.
Where Is the Science?
Looming over all of this of course is the central question of whether there is scientific evidence that the list of allegedly contaminated products actually caused any harm. Without invoking too much humor, the jury is still out on this question. At the present time no cases on record have been tried over the issue and there are no published long-term studies evaluating repeated exposure to benzene in sun care related products. This, of course has not stopped personal injury attorneys from advertising seeking clients who have suffered from a host of afflictions including Leukemia, Lymphoma, Myeloma, Myelodysplastic syndrome and Amyloidosis. Almost predictably, this list of possible conditions linked to sunscreen has grown to include interference with the reproductive process in women, causing irregular menstrual periods, decreased ovary size, low birth weight, and damage to bone marrow, despite no human studies confirming any such connection.
More to Come?
If benzene and its presence in sunscreen were the sole issue, then chemists, manufacturers, distributors, retailers, and consumers might view this as a somewhat finite, or at least definable problem. However, the cosmetic/health industry is venturing ahead with chemical formulas and delivery systems that are truly dizzying. While it is well beyond the reach and scope of this article to try and explain or even catalogue the range of elements used in products used for skin care, a review of science and industry publications makes it clear of the potential for public suspicion of many product formulations. While benzene’s appearance in these products may stem from a simple manufacturing error, a litany of other compounds are in similar products by design.
A recent survey of nanosystems in cosmetic products that was published in the Journal for Molecular Diversity Preservation International (MDPI) in 2019 noted that a number of metal oxides are used in sun care products. Metal oxides are thought to aid in the transparency of products as well as in delivery of a product into and below the skin. The compounds sometimes serve as UV filters for both sunscreen and anti-aging products as well as pigments. The survey further noted that chemical formulations of such nanosystems are so dynamic and changing that attempts to categorize them become outdated almost immediately.
To be sure, elements like zinc and titanium have been used for years in products like sunscreen, moisturizers, cosmetics, and topical medicines. Now, however, these nanosystems can deliver subatomic particles into the body with increasing efficiency, and while this may prove harmless, there are no long-terms studies confirming the safety. Similarly, there are no global standards or regulations to make these compounds or systems universally recognizable to the consumer. In fact, most countries can’t even agree on whether to categorize the finished products sold on shelves as a cosmetic, a therapeutic, a pharmaceutical, or a drug. Further, who, if anyone, regulates such products in any given country is a patchwork of government agencies that would confuse even the most intrepid of bureaucrats. In the United States, sunscreens fall under the jurisdiction of the FDA, but the effort to comprehensively review the short- and long-term effects of most products was only first undertaken in 2018. Up to that time, the industry was largely self-policing.
All of this leads to a strong suspicion that issues regarding benzene in certain sun care and related products are only just beginning. Moreover, as litigation goes in the United States, so goes litigation across the world. Europe and Australia have been more aggressive in regulating cosmetics and sunscreens, but as compounds and even finished skin care products emerge from China and Asia, the multi-billion-dollar cosmetic/health product market and litigation surrounding it will only grow exponentially.
For now, it appears that the viability of continued class action status of the lawsuits referenced will be hashed out in the Southern District of Florida. If the class survives the certification stage, the implications for the sunscreen and cosmetic industry could be significant. As noted above, benzene may be the tip of the iceberg as the ability to detect chemical levels in the human body continue to develop. The debate on whether any individual chemical (or its nano-delivery system that can be traced to a product) is harmful will unfold and be addressed in due course by science and the law. But the increasing ability to identify a chemical present in human tissue at a nano scale, or in the bloodstream at parts per billion, will almost always alarm the public. Screaming media headlines about benzene, arsenic, mercury, metal oxides, or any other foreign element that is found in our bodies, food, drinking water, or atmosphere will have the predictable effect with the plaintiffs’ bar, and a new cycle of advertising for clients will ensue. The combination of breakneck developments in ways to deliver these compounds through the body, together with spotty regulation or government oversight, and an ever-suspicious public will be powerful. One can only imagine endless allegations and causes of action in coming years.
As defense lawyers, we should take note that these sun product cases may only be the start of similar suits across multiple industries in any way related to products that have topical uses for human skin. As science, media, and the plaintiffs’ bar become increasing focused on the potential (even if unsubstantiated) of harm caused by these products, litigation is sure to follow.
Charles “Chas” Reynolds is a Partner with the litigation group of Trenam Law in Tampa. Mr. Reynolds represents manufacturers, distributors, and retailers in all manner of product-related litigation with a focus on construction building products related to construction defects and consumer products defense, including those involving toxic torts.
Interested in joining the Product Liability Committee? Click here for more information.
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Women in the Law: Sharing Success
Five Things I Learned at the 2022 Women in the Law Seminar
By Marie E. Chafe
It’s hard to believe that it was only two years ago that DRI’s Women in the Law Committee gathered in Arizona for our last in-person seminar. Little did we know what lay in store for us over the next two years—travel bans, remote work, waiting for a vaccine, remote school, masks, still waiting for a vaccine, social distancing, hooray—a vaccine!, a variant, are you kidding me?, more masks, more remote work, more remote school …. phew!
After all that, gathering in in person in Austin, Texas on January 26-28 for our beloved Women in the Law Seminar felt like a giant step toward “normal”—or at least, as normal as things can get in a post-COVID world.
Although the world around us has changed, what draws me to the WITL Seminar year after year has not. As always, I came away energized, and inspired, and having learned a ton. Here are five of my biggest takeaways from the 2022 Seminar:
We have amazing leaders.
Putting the seminar together is always a challenge, but pulling it off in the midst of a global pandemic? For that, you need rock stars. Fortunately for us, Seminar Chair Jen Nutter and Vice-Chair Stephanie Holcombe are complete rock stars. Despite all the ups, downs, and surprise cancellations caused by positive COVID tests, this year’s seminar was full of top-notch CLE, business development advice, and networking.
We care – a lot.
On Wednesday morning, attendees of the WITL and Construction Law seminars gathered for a DRI Cares project supporting Caritas of Austin, whose mission is to prevent and end homelessness for people in Greater Austin. Using money donated by members of both committees (including $1,795 by WITL members), we put together over 200 “snack packs” for Caritas to give to their walk-in clients, plus a generous cash donation to Caritas for those in need!
We know our true colors.
Though a fun, interactive session with Tasneem Khokha of GrowthPlay, we learned about our communication styles and why some of us need to write all the things in our email, while others just want the TL;DR version. We continued the discussion the next morning, talking about how we can make our communication styles work in our everyday lives.
We have allies.
As is traditional, the Mary Massaron Award for the Advancement of Women in the Legal Profession was awarded during the Seminar. For the first time in the history of the Award, the honoree was a man, Alex Hagan of Ellis & Winters. Alex stands as a role model for all of us. He is kind, thoughtful, and consistently goes out of his way to promote women in both the workplace and in the various defense organizations. He does not just give women opportunities to shine, he finds those opportunities for them. When he planned programs or suggested committee appointments, Alex enthusiastically selected and promoted diverse speakers. During planning calls, he offered to reach out to diverse speakers to ensure that every effort had been made to maximize the diversity of the panels. As a Board Liaison for our committee, Alex offered unwavering support for our mission to advance women and has been the ultimate supporter, advocate, and cheerleader of the committee at all levels within DRI.
We are all Wonder Women.
Despite all of the challenges the last two years have thrown at us—or maybe because of them—this year’s seminar proves that it takes more than a global pandemic (and a looming blizzard on the East Coast) to keep the women of WITL down. We were fewer in number this year (thanks, Omicron), but no less enthusiastic.
Marie E. Chafe is a Partner at Conn Kavanaugh Rosenthal Peisch & Ford. She is a civil and commercial trial attorney with vast experience representing business clients in the defense and trial of an array of disputes, including wrongful death and catastrophic injuries in complex product liability matters (automotive, medical devices, construction and industrial equipment, building products, consumer and recreational products), transportation issues, toxic torts and asbestos litigation, business and franchise disputes, and consequential warranty claims against U.S. and international manufacturers, distributors, and insurers. She has worked with hundreds of general counsel, national counsel, and insurers to develop a strategy for successful litigation defense. Marie tries cases in the state and federal courts of Massachusetts and Connecticut. She is the chair of the DRI Women in the Law Committee.
Interested in joining the Women in the Law Committee? Click here for more information.
Young Lawyers: Raising the Bar
Moving In and Moving On: Your Involvement in DRI Young Lawyers and Beyond
By Matthew E. Bown, Andre J. Webb, Meredith Hamilton, Scott Hunsaker, Carolyn Cole
Great – You’ve Joined DRI’s Young Lawyers! Now What?
The best advice I received after initially joining DRI’s Young Lawyers Committee was “you get out of it what you put into it.” In my experience, nothing could have been truer. Putting something into your DRI Young Lawyers membership ultimately boils down to two things: Attending and Participating.
Attending the Young Lawyers Seminar is one of the most mutually beneficial ways to contribute to the Young Lawyers community. Your mere presence benefits the greater group by supporting its initiatives and demonstrating its value to DRI at-large and the decision-makers at firms across the country. In return, you’ll have access to quality programming that will fulfill a large portion of most states’ continuing education requirements. Of course, this is just scratching the surface.
The real value of attending Young Lawyers events is found in the connections you make. Understandably, however, this can prove intimidating for many potential first-time attendees, particularly those who (like many of us) are not natural extroverts or are from small or mid-sized firms and may not have any colleagues who are also attending. Overcoming this potential point of hesitation is made easier by remembering that we’re all here for the same reason – to make new connections. I’ve never encountered another organization where it was easier to walk up to a group of people I didn’t know, stick out my hand and say “Hi, I’m Matt,” and feel so immediately welcomed. You’ll be amazed at how fast other attendees go from being strangers to true friends.
Once you’ve decided to join DRI Young Lawyers and attend an event, there are countless ways to participate. The Young Lawyers Committee has approximately two dozen sub-committees to join, so new members can apply themselves to something that suits their current interests or go in another direction and try to develop new strengths. There is also the option to serve as a Young Lawyer Liaison to one of DRI’s many Substantive Law Committees. In whatever capacity you decide to participate, you’ll likely be asked to fulfill certain tasks to help that sub-group meet its objectives. As with most any scenario, if you volunteer to take on a task, do it well, and deliver it on time, you will begin to build a reputation as a valuable member of the group who can be relied upon to take on important matters. In what better light could you hope to be viewed in an organization dedicated to the advancement of your professional goals!
Networking and the creation of meaningful connections are the foundational tenets of this organization that hold us together. Forming these bonds early in your career affords you more time for development and growth. Equally as important as the network you build is the mentor you choose. Anyone can be a mentee, but it takes a true leader to be a mentor. A mentor is someone that can help you assess your strengths and weaknesses while also assisting with your professional growth and development. A mentor is someone who provides meaningful and honest feedback and is ever-conscious of the importance of a well-learned lesson over opinions. Thankfully, DRI presents a myriad of opportunities for its Young Lawyers to partner with mentors and build lasting relationships. As stated best by the Japanese proverb, “Better than a thousand days of diligent study is one day with a great mentor.”
You’ve Had a Great Run in DRI Young Lawyers, But Now It’s Time to Move On
“At some point in your childhood, you and your friends went outside to play together for the last time and nobody knew it.”
The Sandlot, 1993
What was true for the characters in that coming-of-age classic does not have to be true for your involvement in the DRI. Rather, as we (ahem) “experience” out of the DRI Young Lawyers, there are a multitude of ways to stay involved in DRI and stay connected with the many friends you made during your time with the Young Lawyers Committee. That said, a little bit of pre-planning will go a long way in easing this transition. Without a doubt, the clearest way to stay involved and connected is by joining and participating in a Substantive Law Committee before your time with the Young Lawyers comes to an end. The leaders of several of DRI’s Substantive Law Committees have shared their experience with the “experiencing out” transition.
Jennifer Morris Jones, Partner with Cranfill Sumner LLP in Raleigh, North Carolina, says the best way to get involved in DRI as a young lawyer is to “raise your hand.” She encourages young lawyers not to shy away from volunteering for projects and joining committees. She also notes the importance of being reliable and doing the work. Jennifer largely attributes her success in DRI as being someone people know they can depend on to get the job done. Once you show people you are capable of doing the work, and doing it well, they are more likely to remember your name for next time and seek you out to get involved in other ways.
Jennifer’s rise through DRI to the current Committee Chair for the Workers’ Compensation Substantive Law Committee began when she simply raised her hand early on in her involvement in DRI. She was a member of the Workers’ Compensation committee at a time when the committee was looking for a way to boost participation in the Workers’ Compensation Online Community to make their committee a better resource for members in their daily practices. At that time, Jennifer raised her hand and volunteered to send out weekly reminders to committee members to post on the Online Community page to build engagement. Jennifer diligently sent out emails to members reminding them to post. Her reminders were well-received by her colleagues who wanted to be more engaged. Over the course of the next months, the Workers’ Compensation Online Community came to life. Members became more and more active, and people made connections. The Workers’ Compensation Online Community is now one of the most active DRI online Communities, according to Jennifer.
By simply raising her hand and committing to her task, Jennifer made a name for herself within the Works Compensation Committee. She met several people she would not have otherwise met by sending out the weekly emails with reminders to post on the Online Community. Through her efforts, she was able to create a vibrant Online Community for herself and her colleagues and create a lasting impact on the Workers’ Compensation Committee that helped her develop into other leadership positions and into the Committee Chair. Jennifer’s involvement in DRI has helped her to grow professionally in and out of DRI, develop business, and form lasting friendships.
Kelly Gordon with Marshall Gerstein in Chicago, Illinois, has had a similar experience with DRI. She is a member of the Young Lawyers and Intellectually Property committees. In her earlier years of practicing, she was the Young Lawyer Liaison for the Intellectually Property committee. This position allowed her to maintain and develop relationships within the Young Lawyer committee, while at the same time developing new relationships within a substantive law committee—the IP committee. She raised her hand to help when opportunities presented themselves to get involved within the IP committee. For example, she was responsible for developing and planning some of the Young Lawyer breakout sessions at IP seminars. She diligently took on those responsibilities and made a name for her herself within the IP committee. She demonstrated to the committee leadership that she was reliable and someone who gets the job done.
Based on her early success, Kelly has been able to transfer into a more substantive role within the IP committee, and she now holds a leadership position. Her early success within the IP committee will allow her to transfer completely out of the Young Lawyer committee into the IP committee and other substantive law committee.
The key to getting the most out of your DRI membership being involved early and volunteering often. Yes, we are all busy, and, yes, this takes time, but take it directly from the people who have taken this path before you – the experiences and connections they made through involvement in DRI Young Lawyers and beyond have benefitted them both professionally and personally.
Andre J. Webb is an experienced trial attorney with a demonstrated history of success. Andre concentrates his practice on the defense of insured and self-insured entities in a variety of litigation matters, including premises liability, dram shop/liquor liability cases, motor vehicle accidents (inclusive of UM/UIM claims), and professional liability matters. Andre also manages the investigation, litigation, and defense of numerous high-impact, complex cases involving catastrophic injury or death. Andre is an elected member of the Philadelphia Bar Association’s Board of Governors; he serves as Chair of the Executive Committee of the Young Lawyers Division (“YLD”) and is an Executive Committee member of the Philadelphia Association of Defense Counsel (“PADC”). Andre is also active with the Pennsylvania Bar Association, where he serves in the House of Delegates.
Meredith Hamilton is an attorney with Ogletree, Deakins, Nash, Smoak & Stewart, P.C. in Charlotte, North Carolina. Meredith devotes her practice to employment law and employment litigation. Meredith advocates for employers to protect their interests and counsels them with strategic and practical advice to achieve their goals, manage employee relations, develop policies, and navigate pre-litigation matters. Meredith is also an experienced litigator and represents employers at all stages of litigation arising under various federal and state employment laws.
Matt Bown is an experienced litigator who concentrates his practice on complex product liability matters involving medical devices, automobiles, industrial machinery, construction equipment, recreational and sporting goods and other consumer products. Matt also maintains an active commercial litigation practice in which he represents large and small companies in a wide range of business disputes.
Scott Hunsaker is an attorney with Tucker Ellis LLP in St. Louis, MO. Scott represents clients as both national and local counsel in product liability, premises liability, and commercial motor vehicle accident matters across the county. He is experienced in all aspects of civil litigation from pre-suit investigation to jury trials, along with the intermediate stages of written discovery, depositions, and motion practice. From his years of experience, he is now responsible for developing and implementing the appropriate strategy for all phases of litigation. Scott can be reached at firstname.lastname@example.org.
Carolyn Cole of Thompson Hine LLP is a counsel in the firm's Product Liability Litigation practice group. She focuses her practice on mass tort and product liability litigation and defends manufacturers of commercial food processing equipment, asbestos-containing products and medical devices. Carolyn has also been involved in the firm's pro bono work.
Driving Successfully Through a Construction Zone: Maximizing the Value of Your Client’s Case Evaluation Summary in Michigan
By Brandon Pellegrino
For attorneys representing parties to civil cases filed in Michigan’s circuit courts, case evaluation can feel similar to the vehicular congestion every local driver encounters during Michigan’s annual construction season – one might be able to navigate around the pitfalls that await and temporarily circumvent the unpleasantness, but at some point, it becomes unavoidable. When a client’s case is subject to this compulsory form of alternative dispute resolution (“ADR”), the attorney may not be thrilled, but the attorney’s responsibility is to secure the best possible result for the client on a cost-efficient basis. That mission can more easily be accomplished when the attorney can demonstrate a mastery of the facts and law in a concise, structured manner designed to avoid confusing or overwhelming the very people who will place a value on the case. Doing so is as simple as crafting a strong case evaluation summary.
This article provides a brief overview of the case evaluation process; explains why many practitioners share a distaste for this well-intentioned, but minimally effective, ADR mechanism; stresses the value and importance of a strong case evaluation summary; and offers a roadmap for drafting that summary.
The Case Evaluation Process
Michigan’s court rules require its state courts to send all tort cases filed in circuit court through the case evaluation process. MCR 2.403(A)(2). The applicable rules also permit courts, including Michigan’s state district courts, to send any civil case in which a plaintiff seeks money damages or the division of property through case evaluation. MCR 2.403(A)(1), (4). While a court may exempt or remove a case from case evaluation upon a showing of good cause or where the court finds case evaluation would be “inappropriate,” such occasions are typically limited to those in which the parties have agreed to private mediation or the value of the claim does not justify the time and expense of case evaluation and is more likely to prevent, rather than facilitate, case resolution. MCR 2.403(A)(3). The Michigan Court Rule regarding case evaluation was modified as of January 1, 2022, however, to expressly provide parties wide latitude in selecting an ADR process by permitting a stipulation to an ADR process. While this has been common practice for civil defendants, they now have guidance to do so within the first 120 days of the first responsive pleading.
Assuming a case remains in case evaluation, the parties pay a fee for the “privilege” of participation, file a summary designed to persuade its audience as to the merits of the party’s claims and defenses and the supporting evidence, and attend a short hearing two weeks after submitting their summary to a panel. Panels are comprised of three evaluators, commonly consisting of a plaintiff’s attorney, a defense attorney, and an attorney whose practice includes both plaintiff and defense work. LONGHOFER, RONALD S., MICH. COURT RULES PRACTICE TEXT § 2403.7 (5th Ed.). At the conclusion of the hearing, the panel places an award on the case and states whether its decision was unanimous, and the parties have four weeks in which to confidentially accept or reject the award. If all parties accept, the court enters a judgment in that amount and dismisses the case; if not, the case proceeds on the path towards trial.
The Failings of Michigan’s Mandatory Case Evaluation
There is a split of opinion amongst Michigan attorneys and judges as to the purpose of mandatory case evaluation. The majority believes the purpose is to settle or resolve cases, a significant minority thinks the purpose is to place a reasonable value on the case, and a much smaller minority considers the purpose to be to initiate settlement discussions designed to resolve the case after case evaluation provides a barometer of the case value. While the court rules do not specifically outline the goals of case evaluation, several may be inferred by the rules: reduction of litigation expenses, accurate prediction of trial results, and settlement. However, a report issued by a committee of the Michigan Supreme Court stated that “[t]he primary goal of [case evaluation] is to settle cases, not to predict the outcome of trial. Michigan Supreme Court State Court Administrative Office, Campbell, Michael D. and Pizzuti, Sharon L., Courtland Consulting, Case Evaluation and Mediation in Michigan Circuit Courts: A Follow-Up Study, May 1, 2018. Regardless of one’s view of the purpose, attorneys handling these cases have serious misgivings about the process itself for several reasons, including the additional cost and expense outweighing the likelihood that it will achieve its designated purpose; the greater likelihood of successfully resolving a case through private mediation; the extension of the time to disposition often caused by case evaluation; the perceived bias of the evaluators; the unpredictability of awards; insufficient time and space in which to argue complex cases; and evaluators who are unprepared and/or inexperienced with the particular type of case and claims.
These concerns are well-taken. In May 2018, the Michigan Supreme Court State Court Administrative Office (“SCAO”) released a follow-up to its 2011 study exploring the perceptions of attorneys, circuit court judges, and court administrators towards case evaluation and mediation, along with the efficacy of case evaluation compared to private mediation. Michigan Supreme Court State Court Administrative Office, Campbell, Michael D. and Pizzuti, Sharon L., Courtland Consulting, Case Evaluation and Mediation in Michigan Circuit Courts: A Follow-Up Study, May 1, 2018.
Critical findings included:
- Less than half of attorneys who handle cases traditionally sent to case evaluation believe it is an effective method for resolving civil cases, while only half of circuit court judges regard it as effective.
- The use of case evaluation, when compared to mediation, increased the amount of time to disposition by an average of three to four months.
- Two-thirds of cases voluntarily submitted to private mediation ultimately settled at mediation, while only fifteen percent of cases submitted to case evaluation resulted in an acceptance of the case evaluation award.
- Two-thirds of judges and three-fourths of attorneys consider the primary purpose of case evaluation to be arriving at a number the parties can accept, rather than providing a fair valuation on the merits.
- If the court rules did not mandate case evaluation, only three-tenths of attorneys would voluntarily submit to case evaluation, while two-thirds of judges would order case evaluation – down from eight-tenths of judges in 2011.
This inherent bias is one of many reasons why attorneys regularly seek exemption from the mandatory case evaluation process as the basis for seeking leave to participate in private mediation in lieu of case evaluation. In mediation, which is private and voluntary, the mediator is chosen by and acceptable to all parties. The mediator assists the parties in identifying issues of mutual concern, develops options for resolving those issues, and finds resolutions that are acceptable to the parties. The parties do not experience the same flexibility with case evaluation, and the advantages of private mediation over case evaluation are borne out in empirical data.
Making the Most of Case Evaluation
For many attorneys in most cases, getting the best result starts with getting the case excepted from case evaluation. But when case evaluation is inescapable, an attorney can maximize the value and impact of the client’s case evaluation summary by crafting a panel-friendly summary. Many of these concerns can be alleviated, overcome, or eliminated altogether by demonstrating a mastery of the facts, evidence, and law applicable to the case to get the majority of the panel aligned with the defense’s position(s). A case evaluation summary should focus on teaching the panel of evaluators the strengths and weaknesses of each parties’ case, and in so doing, forcing the opposition to closely examine its own position, tempering its expectations, and conducting its own earnest cost-benefit analysis of proceeding to trial. If a strong case evaluation summary is presented to the panel, it will assist in removing the “puffery” of plaintiff’s case.
A.Anatomy of a Panel-Friendly Summary.
Do not overcomplicate the summary. A summary should be concise, well-organized, play up a party’s strengths, and address the weaknesses of the case. If the client’s position cannot be conveyed within ten pages, it is unlikely that the panel will be persuaded in a few superfluous pages. If a summary jumps all over the place, one cannot expect the evaluators, who were not specifically identified for the case type or the case itself, to follow the story that has been crafted, especially when they have several cases to evaluate with multiple summaries for each to analyze and rely upon in assessing the cases on the day’s docket. If an attorney does not broadcast the strengths and tackle the weaknesses of the case, no one else is going to do it on his or her behalf.
In short, reduce the possibility that the client’s summary will get lost in a banker’s box of summaries and ensure its impact on the panel. The following format will ensure the panel of evaluators are equipped with a working familiarity of the key facts and issues to provide a reasonable evaluation:
- Executive Summary - Each case evaluation summary should start with an executive summary that is no longer than one or two pages. It is likely that this is as far as the panel will read. Make it count. This should include, in bulleted list form:
- Case type;
- Incident date and location;
- Incident description;
- Alleged injuries versus actual injuries;
- Plaintiff’s claim(s); and most importantly; and
- Why the defense should prevail.
- Background/Facts – Detail the client’s version of events and the reason(s) why it is more credible than the opposition’s contentions. Apply the pivotal defense facts to the applicable case law to refute liability. Conversely, affirmatively address the weaknesses in the defense’s liability—this will generate credibility with the panel. Create a timeline for the panel outlining any pre-existing injuries, along with plaintiff’s post-accident medical treatment. This ensures that the panel is equipped with all alleged injury related facts in order to provide a fair and equitable valuation, and most importantly, one favorable to the defense. Finally, drive the proverbial nail in the opposition’s coffin by placing emphasis on plaintiff’s weak and strong defense IME reports, respectively.
- Exhibits to, and images within, the summary – Exhibits attached to a summary should also adhere to the rule of concision. Only attach the relevant portions of a deposition transcript, medical records, independent medical examination reports, and so forth. Include imagines within the summary sparingly—for instance, only if there is photographic evidence that is particularly helpful, or if it is necessary to provide a diagram of the incident. Otherwise, it unnecessarily lengthens the summary and can detract from its strengths.
- Conclusion – Restate the weaknesses of plaintiff’s case with an emphasis on alleged injuries versus actual injuries, along with alleged damages versus actual damages. The facts, evidence, and/or law that supports why the defense should prevail should be highlighted with concision. The panel may only have time to read the executive summary and conclusion—ensure they resonate.
As most recognize, case evaluation is not always a fair or predictable form of ADR, nor is it the most effective. While it can extend the disposition of a matter by months, increasing costs along the way, attorneys can maximize the value and impact of the client’s case evaluation summary by crafting a strong case evaluation summary.
Brandon Pellegrino is an associate in the Bloomfield Hills, Michigan office of Bowman and Brooke LLP. Brandon has experience representing businesses in product liability, personal injury, commercial, and complex construction litigation. He has also focused his practice on e-discovery issues, including extensive experience with complicated national product liability discovery. Brandon can be reached at email@example.com.
Top 5 Tips for Preparing to Depose an Opposing Party’s Expert Witness
By Briana Campbell, Taryn Harper, Bert Noble, Sara Schiavone, Kenton Steele
Tip #1: Start Digging
The logical first step—but perhaps the most important—in preparing to depose an opposing parties’ expert witness is conduct an exhaustive search on him or her. The goal is to gather as much information about the expert as you possibly can, as you never know what you may find or what may ultimately prove to be helpful during deposition or at trial. Here are some ideas to get you started:
Your preferred legal search engine is the perfect place to gather some initial information. If the opposing party’s expert has testified at least of handful of times before, you can likely pull an expert witness analysis report by a simple search. Of course, you will want to pay particular attention to any prior challenges to the expert’s testimony, but do not overlook searching for the expert’s name in briefs, expert reports, transcripts, and court opinions. If your firm has library staff, they are often extremely helpful when it comes to gathering this type of information, which will save you time and the client money.
Perhaps the most valuable information you can collect on any expert is obtained from speaking with persons who have had experience with him or her in the past. While sending out a firm-wide email is a good first step, think about how you can expand your search further. Have you considered whether any of your connections through DRI may have had experience with this expert before? Have you posted to the DRI communities’ pages and asked for information? Have you checked with your local defense or bar organizations and the individuals you know through those organizations? What about former colleagues, or law school classmates? There is a good chance that if you utilize your extended network that someone will be able to provide some insight on the expert.
Everyone has social media these days—even expert witnesses. While this is typically one of the first things attorneys gravitate toward when researching lay witnesses, sometimes they forget to do the same for the expert witnesses. The expert’s personal website and LinkedIn page often provide a wealth of knowledge about the expert, but do not forget about Facebook, Twitter, and Instagram, too.
Tip #2: Obtain—and Understand—All Materials Cited and Relied Upon by the Expert
After obtaining all the information you can about the expert, the next step is to educate yourself about the expert, including reading the reports or literature supporting the opinions. While you will not become an expert yourself on the specific subject matter or underlying science, your goal is to better understand what, why, and how of the expert’s work. The best – and easiest – place to start is with any standards or articles cited in the expert’s report, and then look to the expert’s publications listed on his or her CV. There are some key things to look for when digesting this material.
First, if the expert relies on any code sections or industry standards, you should obtain a copy of the code as was in effect on the relevant date, such as when the incident occurred. Keep in mind that codes or standards are regularly updated, and while many annual updates are mundane, sometimes there are changes that significantly affect your case. You also need to review the codes and standards to be prepared to discuss any issues in interpretation or application by the expert.
Next, if the expert uses any tools or is performing any tests, be sure to identify all protocols or procedures for using the equipment or properly conducting the test. If a piece of equipment requires calibration prior to each use, be prepared to ask the expert if each calibration was documented. Chain of custody, following testing protocols, and documented evidence of compliance are essential.
Finally, understanding the information relied upon or scientific basis for opinions allows you to both identify potential holes in the expert’s report and discuss it on relatively even ground with the expert. If an expert applies the facts of your case to a scientific study conducted by someone other than the expert, you need to obtain the study and understand the methodology and conclusions within it to ensure the facts of your case or incident fit within this other study relied upon by the expert. The expert may use a self-created mythology not supported or used by other members of his or her profession, and the best place to identify these issues is within the cited materials.
Do not be intimidated by scientific reports or technical data beyond your knowledge base. An excellent way to understand the materials you are reading or reviewing is to discuss them with your own expert – after all, your expert likely is doing the same work to evaluate the opposing expert as well. Discussing unfamiliar or uncomfortable science with your expert will help you grasp the terminology, methods, and general background, and serve you well both in the deposition and at trial.
Tip #3: Keep Daubert (or the Applicable State-Law Standard) in Mind
In many cases, the groundwork for successfully challenging and seeking exclusion of an opposing party’s expert witness begins at the deposition. As you prepare for the opposing party’s expert’s deposition, think about the applicable standard, whether that is Daubert or another similar standard under state law, and what elements you will need to establish in later moving to exclude or limit the expert’s testimony under that standard.
In federal court, Federal Rule of Evidence 702 and Daubert require that (i) the expert be qualified to give an opinion; (ii) the opinion be reached using a reliable methodology; and (iii) the expert’s testimony be relevant to the trier of fact. See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 589 (1993).
As you prepare for the deposition, review the witness’s resume, prior publications, and prior depositions, and consider whether the witness’s education, work history, knowledge, and skills render him or her qualified to testify as an expert witness on the particular topic at issue. Come up with potential gaps or weaknesses in his or her experience that you can attack at the deposition and use to establish that he or she is unqualified under the first Daubert prong. In assessing the reliance materials cited by the expert witness, consider whether the expert has reviewed all of the relevant literature and data, and whether those materials are flawed or incomplete, and determine whether the expert’s opinions were formulated based on cherry-picked, incomplete, or inaccurate information. Additionally, consider the analysis outlined in the expert witness’s report, including whether it is one typically used in the literature and by other experts in the field, or if it is novel and invented for the litigation. These considerations, among others, bear on the reliability of the expert’s methodology, and provide fertile ground for challenging the expert’s opinions at the deposition and later in a Daubert motion. Finally, in analyzing the expert’s reliance materials and report, consider whether the studies and data the expert relies upon fit the facts of the case and whether the expert’s opinions will be helpful to the judge or jury trying the case; based on these considerations, you may determine that the expert’s opinions lack relevance to the case entirely, in which case, you can shape your deposition strategy to elicit testimony in support of a Daubert challenge based on lack of relevance.
Importantly, because the Daubert case law varies among jurisdictions and courts, research the Daubert (or similar state-law standard) precedent in the applicable court before the expert’s deposition. This way, you can anticipate how the court may view certain factors pertaining to qualification, reliability, or relevance, and can emphasize or deemphasize those factors in preparing your deposition outline. Additionally, if there are certain “buzzwords” the court uses in its Daubert rulings, you can carefully weave those into your outline.
Tip #4: Start with the Expert’s Opinions, Not Their Resume
One of the most seasoned experts I have ever come across once told me that he knew whether he was going to be in for a difficult deposition based on the first question the attorney asked after the general admonitions. Generally, if the attorney started asking about his resume, he knew he was in for a fairly easy deposition. If, on the other hand, the first question went to the merits of or the basis for the expert’s opinion, he knew he was in for a more difficult deposition.
There are several reasons why asking about the expert’s opinion first is a great tip. First, when an attorney spends the first part of the deposition going over the expert’s training and education, it gives the expert time to calm down and settle into the deposition. Asking about their opinions or the basis for those opinions right away keeps them on their toes from the outset.
Second, if done correctly, asking a well-crafted question right out of the gate can indicate to the expert that you have at least a basic understanding of the expert’s field and can call them out if they step out of line. For example, if you were questioning a biomechanical engineer, asking questions that indicate you have some basic understanding of physics at the top of the deposition may keep the expert in check for the remainder of the deposition. When an expert understands that the attorney questioning them has a basic understanding of the science, they are less likely to give outlandish responses because they know the attorney has enough knowledge to call them on it.
Third, just because you do not ask about the expert’s training and qualifications upfront, does not mean that you cannot revisit them later in the deposition. Indeed, if you are laying the groundwork to challenge the expert’s qualifications or methodology, it is often helpful to weave these questions into a broader line of questioning on that basis. In other cases, the expert may have testified a hundred times in the same area and given similar opinions every time. When that is the case, it may not be worth it to extensively question an expert’s resume, particularly in a jurisdiction where the amount of time for depositions is limited or where this type of questioning would play better at trial. In fact, in some cases, it may be the better strategy to withhold this type of questioning for pretrial motions or for crossexamination because it prevents the witness from having too much time to adequately prepare a response.
Whether you choose to ask these questions or not, it is still important to review the expert’s resume in detail. It is always important to understand the training and education of a given expert, what articles they wrote, what associations they are part of, etc. Whether to use that information during a deposition depends on the case and the witness, but you should give some thought to when you ask these types of questions and whether your timing plays well into your overall strategy.
Tip #5: Don’t Try to Out Expert the Expert
One mistake younger attorneys can make in approaching an expert deposition is setting unrealistic expectations for what can be accomplished through the deposition. While older lawyers may have regaled you with “war stories” of winning a case by using a superior grasp of the technical issues to make an opposing expert flip, or recant their opinions, this outcome is not the norm. In most instances, an expert deposition is not an opportunity to hit a home run and win the case. Rather, a successful expert deposition is one in which you learn the full scope of the expert’s opinions, the basis of those opinions, and uncover areas where the expert’s testimony can be effectively challenged through cross examination at trial.
Almost always, an expert witness has superior education, experience, and knowledge of her subject area of expertise. This reality should guide the approach to deposing an adverse expert. Prior to the deposition, you should research and study the relevant field to gain familiarity with the topic and the specific issues in the case. Consulting with your own expert can certainly be helpful in this regard. However, even with thorough preparation, the expert will still have the upper hand as to a command of the specific subject matter.
As an example of how this issue can manifest, an expert deponent may use overly technical terms in her answers as way of demonstrating an unassailable understanding of the subject matter. Even if the attorney believes he understands the jargon being used and feels capable of challenging the expert using the same terms, engaging in an overly technical discussion is unlikely to be the most effective approach to questioning. Instead, take things slow and ask the expert to explain the concepts in laymen’s terms. Ultimately, it is better to appear inexperienced and in need of further explanation of the expert’s answers than to mistakenly assume you understand the technical jargon, which could lead to ending the deposition without fully exploring the expert’s conclusions.
Briana Campbell is an associate at Klein Thomas & Lee. Briana’s practice is dedicated to defending corporations and manufacturers in complex product liability and commercial litigation matters, with a particular focus on defending automotive manufacturers against claims related to Advanced Driver Assistance Systems (ADAS). Briana is a Vice-Chair of the Young Lawyers Online Programming subcommittee. Briana can be reached at Briana.Campbell@kleinthomaslaw.com.
Taryn Harper is an associate in Greenberg Traurig, LLP’s Atlanta office. Taryn focuses her practice on products liability litigation, with an emphasis on pharmaceutical and medical device litigation. Taryn is a member of the DRI Young Lawyers Steering Committee and is Co-Vice Chair of the Wellness subcommittee. Taryn can be reached at firstname.lastname@example.org.
Bert Noble is a Senior Counsel at Gordon Rees Scully Mansukhani. His practice is dedicated to defending liability matters, primarily focusing on defending restaurants and corporations in premises liability and negligent security cases. Bert is the Co-Chair of the Young Lawyers Online Programming subcommittee. Bert can be reached at email@example.com.
Sara C. Schiavone is a litigation associate in Porter, Wright, Morris & Arthur, LLP’s Columbus, Ohio office. Her work focuses primarily on tort litigation, with an emphasis on product liability, wrongful death, and catastrophic injury cases. Sara is the Co-Chair of the Young Lawyers Online Communities subcommittee, and is also the Vice-Chair of the Product Liability Welcoming Committee. Sara can be reached at firstname.lastname@example.org.
Kenton H. Steele is an associate in Reminger Co., LPA’s Columbus, Ohio office. He practices throughout Ohio and West Virginia. His work is focused on matters involving professional liability, including medical malpractice, long-term care, and insurance professionals. Kenton is a Co-Chair of the Young Lawyers Online Programming subcommittee. Kenton can be reached at email@example.com.
Interested in joining the Young Lawyers Committee? Click here for more information.
Young Lawyers: Raising the Bar (Continued)
Now Is Your Time to Get Involved
By Catherine Ava Leatherwood
This issue will be my first time writing to you as Chair of the Young Lawyer’s Committee. Thanks to my predecessors Stephanie Wurdock, Shannon Nessier, Baxter Drennon, and many more who paved the way for this committee, I have some VERY big shoes to fill. This will also be my first time writing to you as a Leatherwood – lots of you in the YLC have known me for years as Catherine Ava Kopiec or “CAK” so I hope this doesn’t weird you out too much.
For those of you who are new to YLC or who I haven’t had the chance to meet yet, let me introduce myself and tell you a little bit more about who I am. I live in Columbia, South Carolina, with my new husband and two dogs, Parker and Sutton. Sutton, our British lab, currently sprawled out on her back on the couch, has her feet on me as I’m writing this to you. Professionally, I’m an associate at Rogers Townsend, LLC, a regional firm where I practice mostly in the areas of construction defect, product liability, and general insurance litigation.
My DRI involvement goes beyond the YLC – I’m currently the Young Lawyers Chair for the DRI Product Liability Committee, as well as the DRI State Membership Chair for South Carolina. Anyone who knows me knows that I truly am “all-in” when it comes to this organization. I have built so many amazing relationships by being involved in DRI, and specifically the YLC. If you take a look at my wedding photos, you’ll see several past and present YLs – if that isn’t a testament to how much of an influence this organization can have and why you should get involved, then I don’t know what is.
For those of you who are super brand new and may be wondering what YLC Steering even does, or those who just haven’t taken the step yet to apply, I encourage you to make now the time that you commit to getting involved. While our 2021-2022 Steering Committee has been made official, there are still many ways you can step up. From writing articles for Raising the Bar, to presenting at webinars, to helping promote the Young Lawyers Seminar in June 2022, and more, there is an opportunity for you here. There are so many ways to get plugged in before our next Steering application term (which I hope all of you will consider applying for in the summer of 2022!). If you have the desire and the eagerness to get involved in the YLC, we have a place for you.
I have learned a lot from the YLC Chairs before me, and it’s hard to believe that it’s now my turn to carry the torch. With that also comes the realization that I have but 12 short months to make the most of this role. So, in closing, I’d like to share a few of my goals for this year with you:
Diversity: Last year we had the most diverse Steering committee ever, and I would like to continue the outstanding efforts of our immediate past Chair Stephanie Wurdock in advancing this area. We need to keep pushing for diversity not only in our leadership, but also in our membership as a whole. We need diversity in our speakers, our webinar presenters, and our authors. We need to continue to educate and provide programming and resources on topics that are important to advancing diversity. Thanks to our amazing Seminar Planning subcommittee, Diversity & Inclusion subcommittee, and all of our speakers, last year’s YL Seminar was a huge step forward in offering content and presenters that showed the YLC’s commitment to diversity. Let’s keep this momentum going and see how we can continue to grow the YLC’s diversity.
Membership Value-Adds: We understand that there’s obviously a monetary commitment to be a member of DRI and to attend the various programs that are offered. It makes sense, therefore, that you want to get the best value possible out of being a member of DRI, and the YLC. This year, we plan to roll out a new Resource Bank thanks to the brilliant idea of Vice-Chair Brett Tarver. Our goal is to create an easily accessible database of checklists, quick-hitting tips, forms, and other resources that YLs can use to find practical help for mediations, depositions, cross examination, site inspections, etc. We also want to expand on our Online Programming offerings to provide you the skills to tackle your practice with confidence, and to impress your partners with the value those new skills bring to your firm.
Membership Engagement: This past August, I attended the DRI Product Liability Conference and was surprised at the number of young lawyers who were not involved in the YLC. They had not attended a YL Seminar, had never written an article for a YL publication, and never presented for a YL webinar. While those aren’t the only ways to be involved, I was really taken aback that many of them did not know much about the YLC and weren’t plugged in to what we do, despite technically being members of the YLC because they were automatically signed up for the committee when they joined DRI. We need to change that. If this is the case at one DRI seminar, it is probably true of others too. And there are probably more YLC members who haven’t attended a seminar at all or gotten involved in any other committee. My goal is to not only bring more members into the YLC, but to create quality opportunities for those who are already here. We want to make involvement worth your while and would like to hear from you about what you want out of this committee.
This isn’t an exhaustive list of goals by any means, and we have a fantastic leadership team at the helm that plans to do much more for you. Our Vice Chair, Brett Tarver, and Second Vice-Chair, Emily Ruzic, and I want to make this the best year yet for YLC, and the three of us have lots of big ideas on how to make that happen. But we can’t do it without you.
To close this message to you, I want to offer you my ear and my time. The best thing, hands down, about the YLC is its people, and I welcome each and every one of you to reach out to me and share what you would like to see from us this year. What can we do to get you more involved? Is there anything that you’re concerned about? What can I personally do to help you? I hope that you will take my offer to heart and email me at Catherine.firstname.lastname@example.org with anything you need or want to talk about. I truly hope all of you will feel encouraged to be a meaningful part of this great group.
Catherine Ava Leatherwood is a member at Rogers Townsend, LLC and practices in the firm’s Columbia office. She focuses her practice on construction defect litigation, product liability, and insurance defense. Catherine is the Chair of the DRI Young Lawyers Committee and also serves on the Product Liability Steering Committee as Vice-Chair of Online Communities.
DRI Young Lawyers Member Spotlight: Wheaton P. Webb
How and why did you first get involved with DRI?
I got involved with DRI in late 2018. I had just started at my firm doing primarily drug and medical device litigation and another associate at the firm – Brett Tarver – strongly (and repeatedly) encouraged me to join. I eventually relented and I’m so glad I did. It has been great getting to know other young lawyers through DRI activities, even if it has been virtually.
What DRI Committees (other than Young Lawyers) are you most interested in, and why?
I’m also interested in DRI’s Drug and Medical Device Committee. A large part of my practice is devoted to health sciences litigation with a sizable part of that work involving drug and medical defense litigation. I did not start out at my firm thinking I would do health sciences litigation, but I do enjoy these cases because I get to become an “expert” in the technical facts involved in these cases.
What is your favorite part about being a lawyer?
My favorite part of being a lawyer is writing briefs. I love working with the law and thinking through the issues to get a good result for my clients. I think there is a tremendous satisfaction that comes from finishing a brief and thinking back on the fact that it started out as a blank Word document but is now a substantive work product that can have a real impact for my client.
I should add that I also really enjoy doing pro bono work. It’s a great opportunity to get exposure to areas of the law that you would not otherwise work with, while having a real impact on the individuals you’re helping.
When you are not practicing law, what do you enjoy doing?
Cooking has always been a good creative outlet for me, especially when I can prepare something special and share it with others. I love to scuba dive but as you can imagine, there aren’t many opportunities to do this in Atlanta. There is lots of good hiking within a few hours of Atlanta, so my wife and I do try to take advantage of this when our schedule allows.
What has been your biggest success in your legal career thus far?
The win I’m most proud of was successfully objecting to an adverse recommendation from a magistrate judge in federal court. We were opposing a motion to remand a medical device product case to state court. I played a prominent role in developing our argument in favor of removal, arguing that the plaintiff had fraudulently joined the resident physician who prescribed the device in an effort to avoid removal. When the magistrate judge recommended the motion to remand be granted, the partner on the case asked me to take the lead drafting our objection. Having just finished a clerkship, I knew that district courts overwhelmingly adopt magistrate judges’ recommendations, so it was great to see our position vindicated when the district court rejected the magistrate judge’s recommendation, agreed that the resident physician had been fraudulently joined, and retained jurisdiction over the case.
What is your favorite book?
The last book I recommended to someone was Shadow Divers. It’s a true story of a group of recreational scuba divers that found a sunken U-boat off the coast of New Jersey, largely by accident.
If someone is visiting your city, where is it essential that they go to eat?
Atlanta has a great food scene so there are lots of options. However, for someone visiting, I’d recommend JCT Kitchen. They’ve got some great southern classics but also lighter fare for anyone not looking to fall into a food coma.
Wheaton Webb is an associate in the Atlanta office of Troutman Pepper Hamilton Sanders, LLP. He handles a variety of business litigation issues with a focus on health sciences litigation. Before joining Troutman Pepper, Wheaton was a law clerk for the Honorable Tilman E. Self, III of the United States District Court for the Middle District of Georgia in Macon, Georgia. Wheaton can be reached at email@example.com.
Interested in joining the Young Lawyers Committee? Click here for more information.
Trucking Law: In Transit
From The Chair
By Stephen G. Pesarchick, Esq.
As you know, I am the chair of DRI’s Trucking Law Committee (TLC). It has been a tough few years with COVID and the rough winters up here in Syracuse, New York.
Finally, it’s here! An in-person seminar you don’t want to miss!
Over the past year, the TLC has been strategizing and working hard for to create a must-attend seminar.
The focus of the seminar is to prepare us for the present and future of trucking litigation. The seminar content will make us smarter, faster, and better at what we do. The substantive topics will give us an edge on plaintiff’s attorneys and stem the tide of nuclear verdicts.
Although the seminar is trucking centered, many of the sessions address general litigation.
On behalf of the TLC, I would like to formally invite you to attend DRI’s 2022 Trucking Law Seminar, taking place April 27-29 in Austin, Texas.
If you register for the conference by March 14, you will be eligible for the early registration discount which is only $995 for members and $1,295 for non-members. For registrations after March 14, the fee increases to $1,295 for members and $1,595 for non-members. Do not miss the opportunity to take advantage of the $300 early registration discount.
The seminar provides an opportunity to network, build your book of business, and earn 10 hours of legal education credit including 1 hour of ethics.
The sessions include the following:
- Tomorrow’s Trucking Landscape
- When your Trucking Case Turns into a Products Case
- The Future of Medicine: Standard of Care or Junk Science
- Same Dog and Pony, New Show: Innovative Strategies to Succeed at Mediation
- Better than Testimony: Trying the Case with Digital and Other Objective Evidence to Tell Your Best Story
- The Price is Wrong: How to Identify and Fight Medical Overbilling
- The Building Blocks for Better Client Relationships: A Recipe for Young Lawyers
- Unforeseen Risks of Automation in the Trucking Industry
- Major Advances in Trucking Tort Reform
- Reimagining the Adjuster/Attorney Relationship
- Expert, Experts Everywhere: An Update on Human Factors, Bio-Mechanics, and Trucking Experts
- Think Before You Speak: Ethical Considerations in Emergency Response
As most of you know, the TLC promotes a “work hard, play hard” mentality. Of course, there will be opportunities to meet with friends and cultivate new relationships at numerous networking events. There will be a young lawyers get together, networking receptions, and local dine arounds. The premier networking event will be at Speakeasy Austin on April 28 at 9:00 p.m. Tickets for this event are $100 and are non-refundable. There’s a maximum of two tickets per person. Tickets must be purchased by April 20 and can be purchased on the seminar registration page at checkout. There is limited availability for this networking event so be sure to sign up soon before it’s too late!
To register for the 2022 Trucking Law Seminar, please click here.
I hope to see you all in warm, sunny Austin, Texas.
Stephen G. (Steve) Pesarchick has been a partner with the Sugarman Law Firm LLP in Syracuse, New York, since 1994. His practice focuses on catastrophic personal injury and property damage cases. His civil litigation experience includes motor carrier accidents, farming accidents/issues, transportation accidents, fire claims, construction accidents, product liability cases, and automobile accidents. He has successfully handled countless cases in New York state and federal courts. As an active DRI member, he chaired the 2017 DRI conference titled “Outsmarting the Trucking Reptile at Trial”; from 2011 to 2016 he was the editor of In Transit, the newsletter of DRI’s Trucking Law Committee; and he is a frequent speaker at many national trucking and fire loss seminars.
Interested in joining the Trucking Law Committee? Click here for more information.
Cybersecurity and Data Privacy: Data and Security Dispatch
Practicing in the Metaverse: Business Opportunities; Cyber and Privacy Risks
By Vice Chair Brent J. Arnold
Many lawyers were surprised, confused and/or amused by recent news that a New Jersey firm had opened the first personal injury firm in the metaverse (the virtual world existing alongside our physical reality, in which people explore, play, and engage in commercial activity as digital avatars). This reaction was probably to be expected; law firms are notoriously slow to adapt to new business models or even to adopt productivity-improving technology. But some lawyers have been thinking about what this world means for the profession for some time. Now that some are setting up shop in Decentraland and other similar platforms, it will be possible for clients to meet with lawyers, avatar-to-avatar, in 3D simulations of law offices, probably with expensive NFT artwork hanging on virtual walls.
The metaverse not only provides new virtual “places” to practice, but also raises legal issues that should keep litigators and courts busy for some time. You can buy virtual property (real and personal) in the metaverse that exists only in the metaverse, so can you sue if your property is damaged or vandalized? What are your rights if you buy a product in real life based in false representations about the product in the metaverse (e.g. it looked better in the 3D virtual “store” where you browsed for it)? YouTube is full of clips of people having accidents while wearing VR headsets; is the headset manufacturer liable if you trip and are injured because you were seeing the virtual world instead of the real staircase in front of you? What if someone in the virtual world is using your real-world trademark to sell their virtual products in the metaverse? What court has jurisdiction over these disputes, and what’s the governing law?
Hanging over the prospect of practicing in the metaverse are the cybersecurity and privacy issues that attend any computer-mediated interaction. How secure is my conversation with a client in my metaverse office from interception and leaking? All clients provide personally identifiable information to lawyers, if only while setting up a retainer; some clients provide valuable but not-yet-patented intellectual property. It is not difficult to imagine that my metaverse office may attract hackers looking to extract ransoms, or to carry out industrial espionage against my clients. As a mere user of the platform (even if I bought the digital real estate where my virtual office stands), the only control I have over the safety of my client’s data in the metaverse is to make sure I don’t discuss or receive it in the metaverse. That is why lawyers already operating on these platforms aren’t practicing there as such. Their virtual offices provide a place to advertise their services and make contact with potential clients, but from there, client intake and the giving of actual advice are quickly redirected to physical offices or to encrypted, private communications tools (e.g. the chat or videoconference platforms lawyers have grown used to using during pandemic remote deployment).
Downstream, it seems likely that as more businesses move the metaverse and seek to do more with it than just advertise, the technology will evolve to address security and privacy concerns. Recall how quickly videoconference platforms moved to end-to-end encryption as they became more crucial in the early months of the pandemic. Even the data sovereignty issue should be surmountable, either through the harmonization of international privacy laws, or the offering of local hosting options.
For now, though, what can a lawyer actually, safely do in a metaverse office? Until safety and privacy features are in place to protect privilege, its safest use is to allow lawyers to establish a marketing presence in a space where clients already are (or will be). Imagine a Facebook ad that your target audience can walk around in, where they see your branding, read about and even ask questions about the firm. Your metaverse office can also double as your virtual event space, where clients come to meet your lawyers socially, or attend more immersive versions of the content firms currently deliver in webinar form. There is no reason that courts could not evolve from hearing cases by videoconference to conducting public hearings in 3D recreations of courts, with all the symbols, costumes, and pageantry we’ve lost in the move from physical courts to the web. As these proceedings are public anyway, security issues (except perhaps the avatar equivalent of Zoom bombing) are less of a concern than in the giving of privileged advice in a public virtual space.
Virtual legal practice aside, the mere act of showing up in the metaverse raises concerns that go to the heart of current and evolving privacy laws. Today, to visit a virtual law office in Decentraland, I need only make up a username, create an avatar (that can look like me, or look nothing like me, if I prefer), and provide an email address. I could be anyone, and all the platform really knows about me is the email address I gave (which I may have made up, as there’s no identity authentication barrier to my starting to walk around in this virtual world). At this level of engagement, I am like a lurker on Twitter with no bio and no photo. However, if I want to customize my experience, engage in commerce, or otherwise have a richer and more immersive experience, then just as with social media, I’ll be providing a lot more personal data (e.g. about my preferences, my reactions and interactions inside the virtual world, possibly biometric data as the interface technology becomes more sophisticated, and certainly my crypto wallet information if I want to buy goods and services). What if I want to access my personal data, or wish my data to be forgotten? Will the platform be able to move my stored data across jurisdictions without my consent, and if it does, what guarantee will I have that it’s protected?
As with seemingly every technological advancement, the metaverse has arrived before the legal framework for managing it has been worked out. It will be fascinating to see how lawmakers, regulators, and courts grapple with the legal issues the metaverse is already raising.
Below: After logging into the platform as a guest (which can be done without sharing personal information or a digital wallet), the author-avatar peers through the window of a virtual law office in Decentraland.
Brent J. Arnold is a partner of Gowling WLG in Toronto, specializing in commercial litigation, arbitration, and cybersecurity. Brent heads the firm's Commercial Litigation Technology Sub-group. He also leads cybersecurity initiatives for the firm's Financial Services Regulatory Group and is a member of its InsurTech Group and its Innovation Council. In 2019, he co-authored the Canada chapter of Chambers Global Practice Guide: Data Protection & Cybersecurity, 2nd ed. Brent's experience includes cyber breach coaching, cyber risk, consumer, implementation and other disputes for e-commerce vendors and software developers, construction, administrative and insolvency law, shareholders' rights, class actions, employment contracts, and general contractual disputes.
Interested in joining the Cybersecurity and Data Privacy Committee? Click here for more information.
Construction Law: The Critical Path
Construction Law Committee Honors David Wilson II Through Action
By Chair Danielle Waltz
The DRI Construction Committee was pleased to hold its first in person meeting in two years in January in Austin, Texas. Seminar Chair Mark Shifton, and Vice Chairs Lisa Black and Melissa Lin worked tirelessly to put on a spectacular program where we welcomed almost 20 new members to our steering committee. Additionally, we were able to put on joint programming with Women in the Law and raise over $2500 to put together care packages for Caritas of Austin.
Most importantly, our committee was able to present the David Wilson II Award to John Cahill in the presence of David’s family. David was not only a prior Chair of the Committee; He was so much more than that—he was a phenomenal construction lawyer, and loyal friend and a mentor to all. He was and continues to be the heart of this committee. John and David were former law partners and dear friends, and John continues to carry on David’s legacy each day. Trey Sandoval, David’s mentee and friend, and David’s daughter joined us and shared words about David’s legacy. Watching DRI leaders, committee members and family share how much David meant to to each of them personally is a moment we will not soon forget.
We will continue to honor David moving forward not only through the yearly provision of the award, but through action. We will continue to welcome new members with open arms and provide mentorship opportunities within our committee. We will continue to serve our communities and look for opportunities to learn and grow. We will develop new and innovative programming on renewable energy and work to promote diversity and inclusion within our profession. And we will do each of these things, emulating our friend David, with an open ear and loyal smile, and an affirmed dedication to our committee, DRI and our profession.
David Wilson II, January 9, 1968-June 3, 2019
Danielle Waltz is a Member in the Commercial Law Practice Group and the Public Policy and Regulatory Affairs Practice Group in Jackson Kelly's Charleston office, where she also chairs the firm's recruiting committee and is a member of its diversity committee. Ms. Waltz has wide legal experience, including litigating commercial banking cases and handling complex multi-party construction matters. Ms. Waltz also has extensive experience in government relations for a wide array of local, state and national business clients, where she has been involved in several of the major legal reforms in WV, including passaged of bills capping punitive damages, modifying the joint and several liability statute and regulating the practice of third party litigation funding.
Interested in joining the Construction Law Committee? Click here for more information.
Employment and Labor Law: The Job Description
Pay Equity in 2022 as the Women’s U.S. National Soccer Team Settles Historic Lawsuit
By Chelsea E. Thompson
The gender discrimination, class action lawsuit brought by members of the United States Women’s National Soccer Team (“USWNT”) against U.S. Soccer (who is both the women’s employer and the regulating body of soccer in America) settled in February 2022, bringing to a close one of the most public rallying cries for equal pay in recent years. The highly publicized lawsuit was filed in March 2019, only a few months before USWNT won its second straight World Cup, and fans in the stadium celebrated the teams’ victory by chanted “Equal Pay! Equal Pay!”—something that still gives me chills, and made pay equity front page news world-wide. Soon, U.S. Soccer was fighting on two fronts: in the court of law, a poorly received filing claimed the women’s team had less “skill” than the men’s team, resulting in the resignation of then-U.S. Soccer President Carlos Cordeiro; while in the court of public opinion, U.S. Soccer faced consistent criticism from other athletes, politicians, celebrities, and the public.
USWNT’s highs on the field and social media were followed by lows in court. Most severe was the May 2020 decision of a U.S. District Court judge in California to grant summary judgment against USWNT’s equal-pay claims, citing the different payment structures contained in the collective bargaining agreements for the men’s and women’s teams. Undeterred, USWNT appealed the decision and were set to give opening arguments to the Ninth Circuit on March 7, 2022. Those arguments will not be needed since, on February 22, USWNT players reached a $24 million settlement with U.S. Soccer. The settlement terms can be debated—after all, though U.S. Soccer agrees to pay the men and women at an equal rate moving forward, no settlement funds will be released until USWNT negotiates a new collective bargaining agreement. Even key figures in the soccer world are divided as to the settlement’s terms, with Megan Rapinoe calling it a “monumental win” and Hope Solo calling it “infuriating and heartbreaking.” What can’t be debated, however, is how USWNT’s lawsuit irrevocably put equal pay into the public consciousness. So, even as the settlement and negotiation of a CBA put this particular legal case to rest, the rest of the nation continues its work to close the wage gap.
The Wage Gap in 2022: What’s the Status?
One of USWNT’s allegations in the lawsuit was an equal pay claim. Equal pay calls for parity in compensation regardless of gender, and is often measured by the “wage gap” or the percent a woman makes compared to a man. The wage gap arises from many intersecting factors, ranging from systematic under-compensation and concentration in lower paying jobs, to sexual harassment and the “motherhood penalty” of maintaining both family and career. In 1979, the U.S. Bureau of Labor Statistics first identified the wage gap where women earned 62% of the wages that men earned. See U.S. Bureau of Labor Statistics, Highlights of Women’s Earnings In 2020 (Sept. 2021). As of 2021, when the Bureau released its most recent statistics, that figure sat at 82%. Though the wage gap is often thought of as that single statistic, pay equity and the wage gap have more nuance than can distilled into a single number. Taking a deeper dive can help educate the community and reveal effective strategies to help close it.
First: The wage gap does not affect all women equally.
Intersectionality confirms that gender is not the only factor in the wage gap. Race, sexual orientation, gender identity, geographic location, education, and age all play roles. For example, according to a study by the Center for American Progress, women of color experience a much larger wage gap than their white counterparts. According to its study of the Bureau’s 2020 census data, Black women made $0.64, multiracial Black women made $0.63, Asian women made $1.01, Hispanic women of any race make $0.57, and white, non-Hispanic women made $0.79 compared to the $1.00 earned by white men. See Center for American Progress, “Women of Color and the Wage Gap,” (Nov. 21, 2021). A 2022 report by the National Partnership for Women & Families also found that Native American women earned only $0.60 on the dollar and certain Asian American and Pacific Islander women made only $0.52. See National Partnership for Women & Families, “Quantifying America’s Gender Wage Gap by Race/Ethnicity,” (Jan. 2022). And race and ethnicity are only one branch of intersectionality—the Bureau does not maintain comparable stats for non-binary individuals, transgender women, or the greater LGBTQA+ community, but a 2021 study by the Human Rights Campaign Foundation found that women in the LGBTQ+ community generally earn about $0.90, with trans women earning even less at $0.60. See Human Rights Campaign, “The Wage Gap Among LGBTQ+ Workers in the United States,” (Jan. 19, 2022). In short, the wage gap is not going to truly be fixed unless and until other bases of illegal discrimination are also eradicated.
Second: The wage gap has stagnated.
As of 2020 (the latest year in which the Bureau has published statistics), the wage gap sits at 82%. Though that progress from the 62% wage gap in 1979 should be acknowledged—alongside the people who fought for it—that change has not been consistent over time. The gap closed steadily in the 1980’s and 1990’s, but has remained stubbornly at or around 82% since 2004. Id. That means there has been little meaningful progress in nearly two decades. In light of this continued stagnation, the lawsuit filed by USWNT has provided a much needed catalyst and call for change.
Third: The COVID-19 pandemic has widened the wage gap for some women.
Covid-19 wreaked havoc on the American economy, and has disproportionately affected women workers. According to the Pew Research Center, more women have lost their jobs than men since the pandemic hit, and particularly women with less education. This is partially because more women work in the health care, food preparation, and personal service industries, which were hit hardest by the shut-downs and quarantines, and partially because women were disproportionately affected by limited child care and schooling options. See Pew Research Center, “Some Gender Disparities Widened In The U.S. Workforce During The Pandemic,” (Jan. 14, 2022). Overall, numbers of women in the work force are at a 33-year low following the pandemic. See Forbes, “The Pandemic And The Gender Pay Gap In 2022,” (Jan. 21, 2022). As businesses struggle to get back to normal, it will be critical for that “normal” to correct this trend.
Learning from the U.S. Women’s National Soccer Team: Take-Aways for Employers
Against this backdrop, the USWNT brought its class action lawsuit demanding the same pay, benefits, and work conditions as their male counterparts. With the high-profile settlement of that lawsuit (and eagerly anticipated CBA negotiations to come), USWNT has once again made pay equity headline news. While the issue has the spotlight—and as Equal Pay Day is observed on March 7 this year—it is important for employers to assess and correct any lingering pay equity issues on their payroll. Even the most well-meaning employers may have rollover inequities based on a female employee’s prior salary, implicit bias, or problematic management. Thus, employers are encouraged to solicit honest, attorney-client privileged audits of their compensation practices, which will empower the company to make informed decisions. The audit should also evaluate the application process (no questions about prior salary, head of household, or childcare), employee handbooks (remove wage confidentiality policies and add remote work options), job descriptions (to enable detailed comparisons), and performance evaluations (unbiased format and execution) in order to guard against gender-based pay inequity. Armed with an audit and updated policies, the employer is in its best position to make wage adjustments and (re)train its workforce. With proactive and thoughtful action, employers can avoid the many pitfalls, in both litigation and public opinion, that U.S. Soccer has faced.
Chelsea Thompson is a Senior Attorney at Spilman Thomas & Battle based in Charleston, West Virginia. Chelsea’s primary area of practice is labor and employment law, assisting on litigation of all types of labor and employment matters in state and federal courts. She also has experience assisting in representation of employers before administrative agencies such as the Department of Labor and the EEOC.
Interested in joining the Employment and Labor Law Committee? Click here for more information.
Life, Health and Disability News
The Wild, Wild West: An Update on Retroactive Application of California’s Lapse and Notice Statutes
By Jodi K. Swick, Charan M. Higbee
The enactment of California Insurance Code Sections 10113.71 and 10113.72 (“the Statutes”) spawned an abundance of litigation relating to the Statutes’ interpretation and their application to policies issued prior to the January 1, 2013, effective date. In sum, the Statutes include mandates for a minimum 60-day grace period for life insurance policies issued or delivered in the State, the mailing of a lapse notice at least 30 days prior to the effective date of policy termination due to nonpayment of premium, and that individual life insurance applicants and policy owners annually be provided the right to designate at least one person to receive the notice of lapse or policy termination for non-payment of premium. These requirements did not exist prior to January 1, 2013.
With the enthusiasm of prospectors, plaintiff attorneys rushed to file lawsuits alleging policies could not lapse where insurers failed to comply with the new statutory requirements regardless of when the policies had been issued. As a first line of defense, insurers argued, in reliance on traditional principles of statutory construction and constitutional law, the Statutes had no retroactive application to policies issued prior to January 1, 2013. Conflicting state and federal court rulings ensued offering no uniformity as to the retroactive application of the Statutes and their scope. In 2021, both the California Supreme Court and the Ninth Circuit Court of Appeals expressed their view offering some clarity and inviting the opportunity for even more litigation.
Shaking Things Up
On August 30, 2021, the California Supreme Court held the Statutes apply to all life insurance policies in force when the Statutes went into effect, regardless of when the policies were originally issued. See McHugh v. Protective Life Ins. Co., 12 Cal.5th 213 (2021). The Court found this “interpretation fits the provisions’ language, legislative history, and uniform notice scheme, and it protects policy owners — including elderly, hospitalized, or incapacitated ones who may be particularly vulnerable to missing a premium payment — from losing coverage, consistent with the provisions’ purpose.” Id. at 220.
McHugh involved a term life insurance policy that was issued in 2005. The policy owner paid all the yearly premiums through January 2012, which meant his policy was in force until February 9, 2013 – a date after the Statutes took effect. The Policy thereafter lapsed, and the insured died later in 2013. The beneficiaries sued the insurer for breach of contract and bad faith arguing the Statutes applied to policies issued before January 1, 2013, and the insurer had failed to comply with the Statutes before terminating McHugh’s policy.
In McHugh, the trial court found the Statutes applied to McHugh’s policy, but the appellate court held the Statutes did not apply retroactively to policies issued prior to January 1, 2013. On review, the California Supreme Court preliminarily noted, the insurance business is a matter of public interest and insurance contracts therefore are subject to substantial regulation under the state’s police power, mainly through the California Insurance Code. See 12 Cal.5th 213, 224. Importantly, “[s]ubject to certain constitutional guardrails, the state may exercise its police power to enact legislation that affects existing policies.” Id. (emphasis added). Thus, the McHugh Court rejected Protective Life’s initial argument, based on an established presumption that statutes operate prospectively, that reading the Statutes’ provisions into McHugh’s policy would be a retroactive application since insurance policies are putatively governed by the law in effect when they are issued. The Court reasoned it was not clear the Statutes operate retroactively at all because the new grace period and notice obligations do not impact a life insurer’s liability for past, preenactment defaults. See 12 Cal.5th 213, 230. “And these rules do not unfairly “rewrite” existing policies . . . [t]hey instead merely impose additional rules on insurers as a condition of doing business in California — rules that govern insurers’ conduct postenactment when, in the future, one of their policy owners misses a premium payment.” Id. at 231. In short, the Statutes’ application to existing policies was deemed prospective rather than retroactive.
Addressing Protective Life’s argument that insurers expected policies issued prior to 2013 to be governed by the laws then in effect, the Supreme Court “questioned the prudence of this expectation” as the highly regulated nature of the insurance industry means that further regulation by the Legislature on policies can reasonably be anticipated. See 12 Cal.5th 213, 233.
Secondly, the California Supreme Court examined the statutory language itself and found “some potential statutory ambiguity” as to whether they were meant to apply to policies issued prior to January 1, 2013. The Court therefore looked to other sources to determine whether the Statutes’ intended purpose entails applying them to existing policies. Under this examination, the Court found the legislative history provides several indications the California Legislature enacted the grace period and notice protections in part to protect existing policy owners. Assembly bills and Senate materials referenced individuals who have been paying premiums for many years, which could include seniors and incapacitated individuals that would particularly benefit from these protections because they would face difficulty in reinstating coverage. Department of Insurance guidance, such as communications with insurers and internal communications of DOI personnel cited by the appellate court to support its ruling, were deemed not official guidance on the agency’s construction of the Statutes. See 12 Cal.5th 213, 244-245. Despite the arguable statutory ambiguity, the California Supreme Court therefore concluded the Statutes are “best read to extend protections to policies issued before these sections went into effect.” Id. at 246.
Shortly after McHugh, the Ninth Circuit addressed the Statutes and created further uncertainty for insurers. See Thomas v. State Farm Life Insurance Company, 2021 WL4596286 (9th Cir. 2021). Thomas involved the lapse of two life insurance policies issued prior to January 1, 2013, that were in force and lapsed for non-payment of premium in 2016. The insured paid premiums from 2008 into 2016 and died in 2017. Prior to the 2016 lapses, the insurer did not comply with either of the Statutes, regarding notice or an opportunity to designate a third party to receive notice of nonpayment, lapse, or termination. The district court determined the Statutes did not have retroactive application, relying on the appellate court decision in McHugh, but held the Statutes applied to the subject policies under the renewal principle which effectively renews a policy each time a premium payment is made. The renewed policy then incorporates all changes in the law that occurred prior to renewal. See Thomas v. State Farm Insurance Company, 424 F.Supp.3d 1018, 1025-1028 (S.D. Cal. 2019). Thus, the district court ruled the insurer was required to comply with the Statutes before terminating the policies and granted summary judgment in favor of plaintiff on her breach of contract claim.
State Farm appealed the district court’s ruling. Based on the California Supreme Court’s subsequent decision in McHugh, the Ninth Circuit held the policies did not lapse due to the insurer’s failure to comply with the Statutes. Nevertheless, State Farm argued summary judgment on the breach of contract action was improper because the plaintiff “failed to establish causation because she did not offer any evidence that the policies would not have lapsed even had State Farm complied with sections 10113.71 and 10113.72.” 2021 WL4596286, *1. In yet another blow to insurers, the Ninth Circuit found such “evidence is not necessary” for the plaintiff to prevail. Id. Since the insurer failed to come forward with any evidence that it complied with the Statutes, the policies could not lapse, and State Farm breached its contractual obligations by failing to pay the death benefits. Summary judgment in favor of the beneficiary was affirmed.
The Gold Rush
The obvious result of McHugh and Thomas is additional litigation. California plaintiffs now are emboldened to seek more than the policy benefits under Thomas by alleging that declarations of lapse related to pre-2013 issued policies, where insurers failed to comply with the Statutes, constitute common law bad faith as well as a California unfair business practice. Some contend class action certification and relief is warranted. Lower courts are beginning to address and resolve some of these issues. However, if the past is any indicator of the future, we can expect conflicting trial court decisions which will again lead to appellate review and resolution.
Two recent rulings from the California federal district courts have undertaken the onus of addressing the issues left open by McHugh and Thomas. On a motion to dismiss decided on February 9, 2022, Judge Andre Birotte Jr. from the Central District of California held that Section 10113.71 (mandatory grace period and notice) applied to group certificates of insurance issued and delivered in California, even where the group policy is issued and delivered outside California. He also held Section 10113.72 (requiring an applicant be given the opportunity to designate one other person to receive notice of policy lapse or termination) by its express terms applied only to individual life insurance policies and not to group policies. See Doc. 62 filed in Larone v. Metropolitan Life Ins. Company, et al., Case No. 2:21-cv-00995-AB (AGRX) in the Central District of California.
In January 2022, Judge Jon S. Tigar in the Northern District of California denied a motion for class certification brought by a plaintiff seeking to represent a class of policy owners and beneficiaries of individual life insurance policies, in force after January 1, 2013, that were allegedly terminated for nonpayment of premiums without provision of the statutorily required notices. See Siino v. Foresters Life Insurance and Annuity Company, 2022 WL 110249 (N.D. Cal. Jan. 12, 2022). The insurer argued that class certification under Rule 23(b)(2) was not available for putative classes that seek monetary damages and that Rule 23(b)(3) certification was improper because individual questions predominate, necessitating hundreds of mini-trials to resolve class members’ claims. Judge Tigar denied certification of the declaratory relief claim under Rule 23(b)(2) because plaintiff sought monetary damages and Rule 23(b)(2) certification is appropriate only where the primary relief sought is declaratory or injunctive. Id. **2-3.
On the issue of certification under Rule 23(b)(3), the district court found plaintiff satisfied the numerosity requirement and commonality test. However, the plaintiff did not satisfy the predominance prong because she failed to show that damages could feasibly and efficiently be calculated once the common liability questions were adjudicated on the breach of contract and California unfair competition law claims. See 2022 WL 110249, *6. Pursuant to Ninth Circuit authority, the plaintiff seeking class certification must proffer a common methodology for calculating damages or restitution. Id. The Siino Court specifically noted plaintiff said “nothing about how damages would be calculated for policyholders who are still alive. Yet living policyholders comprise more than 99% of the putative class.” Id. The plaintiff also provided no expert testimony on the issue. See 2022 WL 110249, *7.
The rulings in McHugh and Thomas were overall, unfavorable to life insurers. Nevertheless, resilient defense counsel and their clients are finding ways to apply these decisions in a reasonable way and limit the plethora of lawsuits seeking relief based on statutory violations related to policies issued prior to 2013. Many of these lawsuits were stayed pending rulings from the California Supreme Court and the Ninth Circuit. Now, the stays largely have been lifted. With insurers continuing to defend these claims, new court decisions may adopt reasoning that narrows the available claims and relief.
In the end, it is California – “[t]here’s work there, and it never gets cold.”
John Steinbeck, The Grapes of Wrath
Jodi K. Swick is the founding partner of McDowell Hetherington’s California office. Jodi’s specialty is representing insurance company clients in complex, coverage, and bad faith disputes. She is known for her ability to take on tough cases and favorably resolve them. She has been victorious on dispositive motions and at trial as well as negotiated settlements on what clients viewed as “impossible to resolve” cases
Charan M. Higbee is a senior attorney in McDowell Hetherington’s California office. For more than twenty-five years, Charan has handled insurance matters in state and federal court during every phase of litigation. Charan’s specialty is representing insurers in cases involving life, health and disability policies and group policies subject to ERISA.
Interested in joining the Life, Health and Disability Committee? Click here for more information.