The Voice^TM

Before the fall of 2019, I had never posted on LinkedIn. In 2018, I attended a conference call that was part of the “Opportunity Calling” series done by the networking subcommittee of the DRI Women in the Law Committee. Attorney Paula Edgar spoke about using LinkedIn for networking. She walked us through how to set up a profile, how to seek more connections, and other ways to up our game on LinkedIn. That is how I started. It took me more than a year before I posted anything. To be honest, it was daunting. It wasn’t something I had done in my twenty-five-plus years of practicing law.

In late 2019, I began to post on LinkedIn every business day. I chose to use LinkedIn as my personal marketing platform. I committed to post something current and informative—most often related to insurance—every business day. My goal was to expand my network. I hoped to meet new people and expand my knowledge of insurance. Ultimately, I hoped that by showing my expertise and providing relevant content, I could build a larger network of clients. I have done all of those things through LinkedIn in 2020.

As I write this, I am approaching 9,000 connections on LinkedIn. It still amazes me. A group of women who I met on LinkedIn are much of the reason for my success. In January of 2020, I was contacted by a woman attorney who had seen my posts and invited me to join a group she was putting together of women attorneys on LinkedIn, who would support each other to get the maximum benefit of LinkedIn. I joined this group, and it has changed my life. Twenty of these women each wrote a chapter in the book we have now published—#Networked. Each of us tells our story of COVID-19, LinkedIn, and life with everyone at home 24/7. I’m honored to have written a chapter in this book. These are amazing women. #Networked is an amazing book. 

My #Networked story involves insurance and insurance law, which is my primary focus on LinkedIn, but I also discuss my mission to show others that insurance is important and not boring. Insurance is involved in virtually every part of our lives. We live in homes that are insured, drive cars that are insured, work for and interact with businesses that are insured. Health insurance has certainly become an even bigger issue as the country faces COVID-19. I post about interesting and unusual cases involving insurance, and I post about developments in insurance law nationally. I also started a series called Insurance 101 to provide my connections, including other lawyers and people involved in the insurance industry, with information that is often not specifically described, but is crucial to insurance.

I also share how I became interested in insurance law, an interest that continues, even after specializing in insurance coverage and bad faith law for more than twenty-five years. It all began the summer after my first year in law school, when I was hired as a research assistant by a law professor who specialized in insurance law. Then, the summer after my second year of law school, I worked for an attorney who did coverage work. I was hooked. Most lawyers find coverage boring and academic. I find it incredibly interesting! Each new fact pattern and new policy term is a new story, a new puzzle to figure out. Insurance coverage has a bad reputation; most people think it is boring. In addition to my desire to expand my insurance network and connections, I am also on a mission to educate people about insurance and to convince them that coverage isn’t boring.

You can learn more about insurance and me by reading my chapter (and by following me on LinkedIn), but also make sure to read each of the chapters, which tell the personal stories of my nineteen co-authors. Each one shares her personal story of the pandemic, networking, and what it means to be a female LinkedIn rock star.

I urge you to order a copy of #Networked and read the rest of my story—including my reelection to local office during the pandemic and my experiences working from home—and to read the stories of the nineteen amazing women from across the country, varying in age from their twenties to their fifties, with different legal practices or law related careers.
And, if you aren’t on LinkedIn—start today. There is so much you are missing. Set up a profile. Send me an invitation to connect and tell me that you read this article! I will be happy to accept your invitation!

Laura Meyer Gregory, Esq., CPCU, is a partner at Sloane and Walsh LLP in Boston, specializing in insurance coverage and bad faith matters in the context of a variety of coverages and policies, litigating in courts throughout New England. She has written and presented on topics relating to insurance coverage and bad faith in the context of both personal and commercial insurance and first- and third-party claims. She is a member of the DRI Insurance Law Committee and several of its SLGs and is active in its Personal Lines SLG. Laura is also a member of the DRI Women in the Law Committee. She is active in the Massachusetts Defense Lawyers Association, serving on the board of directors from 2014 to 2020. She is also an elected official in Andover, Massachusetts, serving as a Selectwoman from 2017 to the present and chair for 2019–2020. Laura can be reached at LGregory@sloanewalsh.com or https://www.linkedin.com/in/laura-gregory/.

It just took the breath out of me a little bit to type that sentence.

I met Daniel one of the first days of law school. He looked like your average southern frat boy, with shaggy hair and a love for music and football. The way he would smile at you with his eyes told you that he knew he was good looking. Beyond his appearance and contagious laugh, he was an absolute intellect. While I would feverishly type notes throughout class so that I essentially had a professor’s lecture written down verbatim, Daniel would sit back, fold his arms, and just listen to the lecture. Then, he had the audacity to do things like get the highest grade in our Constitutional Law class. Maybe even Con Law II, too.

January 31, 2021, marked two years since the day Daniel took his life, and I still think about it on an almost-daily basis. Weren’t his parting words to me, “I’ll see you at the birthday party this weekend!”? I’ve replayed the conversation, and many others prior to that, over and over in my head, and it still doesn’t make any sense. Not to me, at least.

I am someone who, by the grace of God? Genetics? Luck? does not struggle with depression. I think not having any personal experience with depression made processing Daniel’s suicide so hard for me. Death is my greatest fear in life—making it very hard for me to reconcile the concept of choosing death. I cannot rationally explain an act that is, at its core, irrational to me. I’ve searched for that answer throughout my grieving process and have spoken with others who have been brave enough to share with me their own experiences with thoughts of suicide in hopes of trying to understand, even if just a little bit.

I carry a heavy burden knowing I was one of the last people to see Daniel alive and that I had no idea what was to come. How can you have a conversation with someone, who you’ve known for over a decade, and yet not know that they are on the brink of suicide? Did I miss a sign? Was he lingering in my office that day because he wanted to tell me something, but I rushed him out to get to a mediation? Would he have told me even if I had asked? I know that he intentionally hid it from me. But still, those questions don’t leave me when I close my eyes at night, or when I walk by the office down the hall from mine that used to be his, or when I see his wife and two beautiful children.

Unfortunately, I can’t go back in time and change what happened. But after this experience, I feel compelled to act, and even more so, I believe I have an obligation and responsibility to act and to give this issue a voice, not only in my home, but also at my firm. Here are my takeaways.

First, can we all agree to remove from our vocabulary the sentence, “Please let me know if you need anything”? Hard stop. Let’s not task someone struggling with depression, anxiety, or other mental health issues to come to us. If you think someone is struggling, do something. How do you do this in practice? You set the coffee date. You schedule a walk. You offer to bring dinner. You follow up.

Next, and this is not a novel idea, but the legal profession needs to normalize therapy. I don’t know who needs to hear this right now, BUT I MADE AN APPOINTMENT TO SEE A THERAPIST TO HELP ME WITH ANXIETY. According to the American Bar Association, “The legal profession collectively suffers from depression, suicide, and other mental health issues in significantly greater proportion than the general population. These issues can include anxiety; stress, burnout, and balance; anger management; compassion fatigue; alcohol or drug addiction; compulsive behaviors such as gambling; and grief and loss.” State Bar Lawyer Assistance Program (emphasis added).

And finally, perhaps my biggest action item of all, is that when I noticed the need for greater awareness in my firm, I went to my managing partner, Joe Chancey, and told him that I wanted to see the firm do more to support employee mental health during the unprecedented pandemic times. And do you know what Joe said? He said, “thank you,” and then, right then and there, he designated me and a few of my colleagues as the firm’s Advisory Committee on Employee Mental Health and Wellness. This was in October 2020, and since then, our Employee Mental Health and Wellness has taken an anonymous survey of all staff members and attorneys (associates and partners) for a pulse check, both professionally and personally. Based upon survey results, the firm has purchased and provided everyone with access to Cooleaf, an online tool that connects employees and engages them in activities like step challenges, holiday celebrations, act of kindness challenges, and various other contests and activities, and even allows employees to earn rewards that can be used to purchase gift cards to popular retailers. The firm has also approved our committee’s proposal to provide attorneys with access to apps that can be used to support at-home fitness, meditation, mental health, and counseling.

Perhaps even more importantly is that my firm is having the conversations and addressing the issue head on. As 2021 progresses, we continue to innovate, improve remote working set-ups, and identify virtual social activities that are engaging and meaningful. I have also started an initiative within the firm to take advantage of the Georgia State Bar’s “Use Your Six Program.” In addition to the Employee Assistance Program we have through our insurance, the State Bar of Georgia pays for six sessions per year with a mental health professional. These sessions are completely free, confidential, and can be done virtually. All states have lawyer mental health assistance programs that are easily accessible and can be found here. Look at what your state bar offers in terms of mental health and then disseminate that information to the attorneys in your firm. This is a no-cost option that can pay dividends.

If I’ve learned anything from Daniel’s unexpected death and the pandemic, it’s that while the state of the firm is certainly important during times of uncertainty, the state of our people is paramount. To that end, I challenge you, as leaders in your respective organizations, to consider what you are doing and what kind of culture you are creating as it relates to mental health. Do you have a committee at your firm dedicated to employee mental health? Why not? What message is that sending, or frankly, what message is it not sending? If you think a networking, marketing, or business development committee will increase your billable hours and bottom line, imagine what happier, healthier attorneys can do for it.

As we put 2020 behind us and continue to innovate as firms and organizations to adapt to the times and allow for remote working, I hope that you will take the same approach to mental health awareness with yourself and your employees. In fact, I believe we now have an ethical obligation to create this culture in our workplace. I know that these types of initiatives do not gain momentum unless they are supported by firm leadership, which is why I am incredibly grateful that my firm, Drew Eckl & Farnham, believes in the power of its people. It is my hope that you will, too.

Thank you, from the bottom of my healing heart for giving me the space to write this message.

Taylor Poncz is a partner in the Atlanta law firm of Drew Eckl & Farnham, where she specializes in workers’ compensation, defending employers, insurers, and self-insurers throughout the state of Georgia. Taylor is also a trained mediator. In 2016, she was selected as a Georgia Rising Stars, voted as one of Atlanta’s best lawyers. Taylor is a Tarheel by birth, but lives in Atlanta with her husband, Adam, and three sons.

Incentive Awards and Why Plaintiffs Get Them

Incentive awards are payments to a class representative—above and beyond the recovery he or she would be entitled to as a class member—that pay the named plaintiff for serving as the representative of the class. Commentators have explained that, at their best, incentive awards compensate for nonpecuniary costs of serving as the class representative, such as time spent learning about the case, efforts made answering burdensome or intrusive discovery requests, and subjecting oneself to a deposition and cross-examination at trial.

Incentive awards are included, and approved by courts, in approximately twenty-eight percent of class action settlements. See Theodore Eisenberg & Geoffrey P. Miller, Incentive Awards to Class Action Plaintiffs: An Empirical Study, 53 UCLA L. Rev. 1303, 1310–11 (2006). However, in some types of cases, incentive awards are more common. For example, they are present in about fifty-nine percent of consumer-credit actions and forty-six percent of employment discrimination cases. Id. Eisenberg and Miller posit that the high incidence of incentive awards in consumer-credit actions is due to the negligible damages typically awarded in those cases. Without an incentive award, the argument goes, the class representative would suffer a net loss (assuming he or she actually expended significant effort on the case). Likewise, in employment discrimination actions, where the risks of retaliation or stigmatization may be high, incentive awards can compensate the named plaintiff for shouldering these risks, in addition to enduring the burdens of litigation.

Until recently, the federal appellate courts uniformly and routinely permitted incentive payments to class representatives—in all kinds of cases. The circuits applied similar tests for approving such payments, all centered around the fairness of paying the plaintiff extra from the class recovery. These tests include factors such as the amount of effort and risks undergone by the named plaintiff and the benefits conferred on other class members. The Fourth Circuit, for instance, considers incentive awards “typical” and “appropriate,” provided they are not pre-determined at the onset of the litigation and are not a condition for settlement. Berry v. Schulman, 807 F.3d 600, 613 (4th Cir. 2015).

Eleventh Circuit Rocks the Boat

Johnson disrupted the consensus among the circuits, holding incentive awards are prohibited outright under Supreme Court caselaw. The case involved a class action complaint by consumer Charles Johnson against medical debt collector NPAS Solutions LLC. Mr. Johnson alleged that NPAS Solutions made automatic phone calls to him and over 150,000 others in violation of the Telephone Consumer Protection Act. About eight months later, the parties reached a settlement in the amount of $1,432,000. The agreement provided that Mr. Johnson would receive a $6,000 incentive award, with the remaining amount (after subtracting attorneys’ fees, costs, and an administration fee) to be distributed among class members. The district court preliminarily approved the settlement and certified the class.

Unnamed class member Jenna Dickenson objected. She took issue with the proposed $6,000 incentive award, among other things. The district court overruled her objection with little explanation and approved the incentive award and settlement. Ms. Dickenson appealed.

The Eleventh Circuit largely agreed with Ms. Dickenson. In an opinion written by Judge Kevin Newsom and joined by visiting Tenth Circuit Judge Bobby Baldock, the court reversed the district court’s approval of the incentive award and vacated the unexplained approval of the remainder of the settlement.

In striking down the incentive award, the Eleventh Circuit relied on two U.S. Supreme Court cases from the 1880s: Trustees v. Greenough, 105 U.S. 527 (1882), and Central Railroad & Banking Co. v. Pettus, 113 U.S. 116 (1885). The court reasoned that, in both Greenough and Pettus, the Supreme Court upheld the class representative’s award of actual litigation expenses, but rejected an award for “personal services and private expenses.” In Greenough, these “personal services and private expenses” included a yearly salary for the named plaintiff.

The Eleventh Circuit held that “[a] plaintiff suing on behalf of a class can be reimbursed for attorneys’ fees and expenses incurred in carrying on the litigation, but he cannot be paid a salary or be reimbursed for his personal expenses.” The court reasoned that incentive awards are “roughly analogous” to a salary, and therefore prohibited under Supreme Court precedent.

The Eleventh Circuit attributed other circuits’ allowance of incentive awards to “inertia and inattention, not adherence to law.”

Will Johnson Survive?

Johnson’s longevity is, at a minimum, questionable. For one, Judge Beverly Martin dissented. She observed that the Eleventh Circuit expressly allowed incentive payments in Holmes v. Continental Can Company, 706 F.2d 1144 (11th Cir. 1983), which she said was binding and simply required that such payments be “fair.” In addition, Judge Martin argued that the practical effects of the majority’s decision—requiring named plaintiffs to incur costs well beyond any benefits they receive from their role in leading the class—would result in individuals being less willing to take on the role of class representative. Judge Martin also emphasized that the Eleventh Circuit would be alone in its holding, and noted that in Frank v. Gaos, 139 S. Ct. 1041 (2019), and China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018), the Supreme Court acknowledged incentive awards in dicta, suggesting such awards were not strictly precluded by Supreme Court caselaw, as the majority claimed.

Second, Mr. Johnson has filed for en banc review. (Surprisingly, so has Ms. Dickenson, on the ground that the court erroneously approved of calculating attorneys’ fees as a percentage of the common fund, with a twenty-five percent benchmark). Mr. Johnson’s petition has gotten significant amicus attention, focused on both the merits and policy of upending incentive awards. (Ms. Dickenson, as of this writing, has not gotten any amicus support.)

Harvard Law School Professor William Rubenstein and author of the renowned treatise Newberg on Class Actions filed a brief arguing that Greenough is distinguishable from Mr. Johnson’s case because the plaintiff there sought a true salary (a fixed, regular payment) over the course of ten years, and not a one-time payment like Mr. Johnson. Nonprofit legal advocacy organization Public Justice has also weighed in, arguing that Greenough and Pettus are inapplicable because they involved judgments—not a settlement like Johnson.

Twenty-three other law professors, in a joint amicus brief, contend that the majority decision undermines Federal Rule of Civil Procedure 23, which seeks to incentivize individuals seeking small recoveries to prosecute their rights. The professors maintain that, without incentive awards, willing class representatives will be hard to find. Main Street Alliance makes the same argument in relation to small businesses.

The Eleventh Circuit’s mandate in Johnson has been withheld, suggesting that these arguments have gotten some traction.

What Now?

While divining a court’s ultimate opinion is, of course, a fool’s errand, Johnson—which is based on antiquated caselaw, breaks with every other circuit in the nation and has received significant amicus criticism—seems destined for reversal either by the en banc Eleventh Circuit or the Supreme Court. Yet, it still has lessons for class action litigators in jurisdictions that continue to allow incentive awards.

In all jurisdictions, district courts have an obligation under Rule 23(e)(2) to ensure that class action settlements are “fair” and treat class members “equitably relative to each other.” After Johnson, district judges are more likely to scrutinize incentive awards, even if they don’t agree with the Eleventh Circuit’s decision to ban them outright. And with Johnson in hand, objectors are more likely to challenge incentive awards, making district court scrutiny even more likely.

Class Counsel: Think First, Then Make a Record

Class counsel should now think hard about whether an incentive award is justified based on the facts of their case, as well as the contributions actually made and burdens actually undergone by the named plaintiff. In their filings in support of settlement approval, counsel should explain these justifications and provide supporting facts. Counsel for Mr. Johnson could have done a better job of that.

In the motion for settlement approval, counsel for Mr. Johnson and the class noted that each class member was likely to receive approximately $80, that Mr. Johnson was seeking an incentive award of $6,000 (seventy-five times the recovery of other class members), and that defense counsel agreed not to oppose the incentive award. Class counsel did not explain why Mr. Johnson deserved to recover so much more than his fellow class members.

In response to Ms. Dickenson’s objection, counsel for Mr. Johnson provided more, but still only generalities. Counsel asserted that Mr. Johnson “expended a considerable amount of time” on the case, which included “frequently” communicating with his counsel by telephone and email, “reading documents” filed with the court, “responding to interrogatories and request[s] for production,” and “searching for and producing documents relevant to his claims.” Counsel failed to quantify the amount of time Mr. Johnson spent on the case, or the nature or burdensomeness of his discovery responses and document searches. (The Eleventh Circuit majority noted that the discovery involved was only preliminary.) Counsel also failed to address the seventy-five factor difference between each unnamed class member’s recovery and Mr. Johnson’s.

The approach counsel took may have made sense at the time. To be fair, counsel for Ms. Dickenson likewise failed to engage with the specific facts of Mr. Johnson’s case. Nonetheless, after Johnson, class counsel in jurisdictions that allow incentive awards should do more—irrespective of whether an objection is made to the incentive award.

Defense Counsel: Monitor and Intervene if Needed

At the end of her oral argument before the Eleventh Circuit panel, counsel for defendant NPAS Solutions quipped “I’m a little bit like the neighbor at the cookout who’s witnessing a family feud.” NPAS argued neither for nor against the incentive payment and urged the court to uphold the settlement, which was not conditioned on the incentive award, regardless of whether that award was affirmed. After Johnson, defense counsel may need to get involved.

Defendants, of course, have no reason to incentivize the filing of class actions—a main policy goal behind “incentive” awards. (Defense counsel may have different incentives.) Thus, defendants could take the approach of refusing altogether to include incentive awards in class action settlements. However, where an incentive award appears justified on the facts of a particular case, defendants may wish, as part of good-faith settlement negotiations, to agree to one. If they do, counsel should ensure there is justification for the incentive award and that the justification is in the record. If class counsel fails to do so, defense counsel should make that record and encourage the trial court to make related findings.

While this may seem outside the purview of defense counsel, it might have helped in Johnson. There, the Eleventh Circuit vacated the settlement order because the district court did not explain its reasons for approving the various parts. While the majority’s ban on incentive awards may have been inevitable, had counsel justified the award to Mr. Johnson, Judge Martin might have been able to garner a majority for her position, and NPAS Solutions wouldn’t be stuck litigating the settlement—potentially at all three levels of the federal court system.

Conclusion

While Johnson’s elimination of incentive payments is only binding in the Eleventh Circuit, the decision gives class action objectors everywhere a new arrow in the quiver. With this in mind, both class and defense counsel should scrutinize and justify incentive awards, and they should be wary that an unsupported award could sink the settlement.

Michelle Liguori, with Ellis & Winters LLP in Raleigh, North Carolina, has litigated numerous commercial disputes involving claims for breach of contract, breach of fiduciary duty, theft of trade secrets, unfair and deceptive trade practices, and corporate information rights. Her practice also involves estate disputes, product liability defense, and consumer-protection litigation.

Carson Lane, also with Ellis & Winters LLP in Raleigh, North Carolina, practices a wide variety of commercial and tort litigation. Her practice area includes cases involving complex commercial litigation, product liability claims, insurance law, and contract disputes.

I had great parental role models growing up in a northwest Iowa farming community. They took on leadership roles at our church, volunteered as election poll workers, and delivered Meals on Wheels. Their community supported them in return, as shown when my Dad died suddenly in August 2000, and our neighbors and friends harvested my family’s last crop on a crisp fall day.

After graduating from law school and moving to Seattle twenty-five years ago, I became active in three nonprofits that focused on providing access to the water through maritime programs, which lined up well with my love of the water and sailing. Given my passion for each of their respective missions, I joined the boards of these organizations and served in leadership roles. They provided opportunities to learn skills that carried over into my professional life: staying true to the mission, listening, compromise, organization, and confidence—all leading to much personal satisfaction in providing persons of all ages and backgrounds opportunities to discover and feel joy when on or near the water.

Fortunately, I landed at Preg O’Donnell & Gillett, a firm that values service. Shortly after becoming a partner, the partnership worked with a facilitator to identify compass points that recognized our firm’s culture, one of which is service—service to our clients, to our community, and internally to all individuals working at our firm.

The firm’s service to our community has manifested in annual holiday giving to local nonprofit organizations, with a doubling the partnership’s matching gift to staff donations this year given the effects of COVID. One of these is nonprofits was Westside Baby, which works to provide essential items to children, including diapers, clothing, and equipment, throughout Western King County. Westside Baby advised: “Your drive totaled 2,410 diapers, 6 booster seats, 4 pack n plays, 24 coats, and a great amount of various hygiene items and new clothes. … We are so thankful for these items and they are sure to help keep the kiddos in our community stay safe, warm, and dry this winter.” We’ve also participated in Washington Defense Trial Lawyers’ coat, toiletries, and backpack drives. When these drives are announced, it warms my heart to get emails from co-workers in the nature of: “We’re participating in this, right?” Our firm’s pro bono program gives billable hour credit for pro bono work, and our pro bono successes include a victory at the Ninth Circuit Court of Appeals.

DRI also provides numerous opportunities for public service via the DRI Philanthropic Activities Committee and self-care through DRI for Life. DRI’s Annual Meeting, leadership conference, and regional meetings over the past several years have incorporated local donations of books, toys, toiletries, backpacks, and bicycles assembled by DRI members. Even while remote, the message from the recent DRI Leadership Conclave was the goal of including a service project at our committee and regional meetings. Like many of you, I miss attending the in-person DRI meetings and participating in these wonderful projects (along with sipping beverages on the beach and eating fresh churros at the Pac & NW Regional Meetings!).

During these changing and challenging COVID times that can leave you feeling unsettled, I encourage you to connect with your personal and professional touchstones, be it service or otherwise. Using a maritime reference, it can provide you with a needed, steadying hand on your life’s tiller.

The plaintiffs in these cases allege that the defendant nursing homes failed to protect their residents adequately from the COVID-19 pandemic. The defendants removed these cases to federal court on two different grounds. First, they invoked the federal officer removal statute, 28 U.S.C. §1442(a), on the basis that they were “acting under” instructions given by federal agencies—specifically, the Centers for Medicare and Medicaid Services and the Centers for Disease Control—on how to protect their residents and employees from COVID-19. Second, the defendants claimed that they could remove their case under the general federal removal statute, 28 U.S.C. §1441(a), because the Public Readiness and Emergency Preparedness (PREP) Act completely preempts the plaintiffs’ claims. The district court determined that the case had to be sent back to state court: it thought the nursing homes were merely regulated by federal agencies, which is not enough for removal under the federal officer removal statute, and it held that the PREP Act did not preempt the plaintiffs’ claims or permit their removal to federal court.

DRI’s amicus brief to the Third Circuit provides insight on both issues. On federal officer removal, the brief explains that nursing homes have a unique relationship with the federal government through the Medicare and Medicaid programs that go beyond the typical relationship between a federal agency and a regulated entity. Nursing homes provide an essential public service, in many ways stepping into the shoes of the federal government as a provider of healthcare. As a result, they are expected to comply with the federal government’s commands—including those related to the fight against COVID-19—or risk losing the ability to do business with the federal government. On the PREP Act, the brief argues that the act provides the Secretary of Health and Human Services with the exclusive ability to determine which claims are preempted by the act and urges that deference to the secretary’s determination is appropriate in this case.

DRI’s brief was authored by Andrew Kim and William M. Jay of Goodwin Procter LLP. To read the brief in its entirety, click here.

One of Claude’s chief attributes was a willingness to give rather than take. He loved the practice of law, but truth be known, he loved those who worked at it even more. I believe that is why he so generously gave of his time and energy while serving as president of the Northern California Association of Defense Counsel. It also explains why he volunteered to head the Washington, D.C., Roundtable, ABOTA’s effort to influence legislation affecting trial lawyers on both sides of the fence.

But clearly, Claude’s favorite professional association was the Defense Research Institute (DRI).

When first approached about becoming involved with DRI, Claude candidly confessed knowing very little about the organization. But as he learned of the scope of its activities, especially the superlative educational benefits provided to defense lawyers across the country, he made a commitment to serve DRI in a leadership capacity. That commitment was revealed, at first, by diligence in increasing membership in his region, and later, by making sure that cutting-edge topics and top-flight speakers were part of every DRI conference.

And, of course, once fully involved, Claude and his lovely wife, Barbara, planned their lives around DRI meetings. In the early days of Claude’s involvement, DRI was still an appendage of the International Association of Defense Counsel (IADC), which meant that the Greenbrier would be the venue for DRI’s annual meeting every other year. That suited the Smarts just fine, as they loved the place, especially the clay tennis courts. By the time Claude became president of DRI in 1993, the relationship with IADC had been severed, which resulted in self-planned annual meetings at incredible sites in Europe and the finest resorts in the United States. Naturally, when Claude became responsible for selecting the site for DRI’s annual meeting, it took him but a nanosecond to choose the Mauna Kea in Hawaii, his all-time favorite.

The bonding that occurred among the Smarts and other DRI officers and board members over the years of service and travel was truly extraordinary. Trips were never missed, and there was always unmistakable excitement in Claude’s (and Barbara’s) voice(s) as meetings approached. The smile with which Claude warmly greeted each of us upon reuniting at a DRI meeting is unforgettable.

We will all miss Claude, but will never forget him.

Paul Caleo

Congratulations to DRI member Paul Caleo of Burnham Brown and his team, who were successful in obtaining judgment against the plaintiffs on behalf of their client, South Bay Constructions Company, in the matter of Jose Antonio Arcega Lopez et al. v. SBCC et al., Santa Clara County Case No. 17-CV-314841. On October 15, 2020, Judge Thang Barrett granted the motion for summary judgment based on the Privette doctrine filed by the Burnham Brown team on behalf of its client.

South Bay Construction Company was hired by the owners of a commercial property located at 1170 Olinder Court in San Jose as the general contractor for a project that involved renovation and improvement work on the administrative offices of the building, as well as to the refrigeration and food processing portion of the building. South Bay Construction performed the improvements and renovation work on the administrative portions of the building and hired Cold Storage to perform the work on the refrigeration system and refrigeration portion of the building. The plaintiff, Jose Arcega Lopez, was employed by Cold Storage as a laborer. On September 8, 2015, the plaintiff was working for Cold Storage and was standing in the attic of the refrigeration portion of the building when the ceiling panel he was standing on gave way and he fell nineteen feet onto the concrete floor below. The plaintiff suffered multiple serious and permanent injuries, including severe emotional distress that resulted in panic attacks. The plaintiff claimed that he would never be able to return to work as a laborer or construction worker. The plaintiff’s wife made a loss of consortium claim. The plaintiffs claimed total recoverable damages of up to $4.8 million.

The winning motion argued that the circumstances of the plaintiff’s accident fell squarely within the Privette doctrine. The motion argued that South Bay Construction, as the hirer of Cold Storage, had no right of control as to the mode of how Cold Storage would do the work for which it contracted. Further, the motion argued that South Bay specified in its contract that Cold Storage would be solely responsible to take all safety precautions to protect its own workers, including the plaintiff. “Absent an obligation, there can be no liability in tort.” See Toland v. Sunland Housing Group, Inc., 955 P.2d 504, 513 (Cal. 1998).

Notwithstanding the extensive discovery conducted by counsel for the plaintiff seeking to defeat the motion, Judge Barrett agreed with Burnham Brown’s argument and ruled that South Bay Construction had met its burden of proof and provided the factual foundation for the Privette presumption to apply. Judge Barrett further ruled that the plaintiffs had not met their burden of establishing that any of the exceptions to the Privette doctrine applied and, consequently, granted the motion for summary judgment on behalf of South Bay Construction.

The winning motion was filed by the Burnham Brown team in November 2019 but was not heard until September 2020 due to pandemic related delays, and the detailed discovery regarding the factual issues underlying the motion conducted by plaintiffs’ counsel in an effort to establish an exception to the Privette rule and defeat the motion. The plaintiffs were represented in this lawsuit by the Veen Firm in San Francisco. Shortly after the plaintiffs filed their second opposition to the motion for summary judgment in advance of the continued hearing date of September 22, 2020, South Bay Construction associated in as its co-counsel with the Burnham Brown team, attorney Lorin Herzfeldt of Bremer Whyte Brown & O’Meara. Ms. Herzfeldt assisted in drafting the second reply brief in support of the motion and at oral argument before Judge Barrett.

Judgment is being entered against the plaintiffs on behalf of South Bay Construction Company and a cost bill is being filed.

Robert E. Johnston, Matthew Malinowski, Gregory S. Chernack,and Shannon N. Proctor

On February 5, 2021, the U.S. Court of Appeals for the Fifth Circuit affirmed Novartis’s summary judgment win in Johnson v. Novartis Pharm. Corp., No. 20-50462 (5th Cir. Feb. 5, 2021). The court, in an opinion issued without oral argument, affirmed the Western District of Texas’s dismissal of the plaintiff’s innovator liability claims under FRCP 12(b)(6) based upon Fifth Circuit precedent. Novartis was represented by DRI members and Hollingsworth LLP partners Robert E. Johnston, Matthew Malinowski, Gregory S. Chernack, and by firm associate Shannon N. Proctor.

Plaintiff/appellant Ramon Johnson II alleged that his ingestion of generic carbamazepine—the generic version of the brand name drug Tegretol manufactured by Novartis—both caused and worsened his Peyronie's Disease (PD), a condition caused by plaques and scar tissue in the penis. His doctors advised him that the carbamazepine did not cause PD. Ultimately, plaintiff sued Novartis and the multiple generic manufacturers of carbamazepine and another drug.

The district court issued an order on Novartis’s Rule 12(b)(6) motion to dismiss all counts against it, including strict liability, negligent manufacturing, negligent failure to warn/fraudulent misrepresentation, breach of express and/or implied warranty, and loss of consortium—all based on the novel innovator liability theory—concluding that, “Texas law rejects this theory of liability.” Johnson v. Novartis Pharm. Corp., No. 5:19-cv-01087-OLG, 2020 WL 2300139, *3. The court cited to Fifth Circuit decisions Eckhardt v. Qualitest Pharmaceuticals, Inc., 751 F.3d 674 (5th Cir. 2014), and Lashley v. Pfizer, Inc., 750 F.3d 470 (5th Cir. 2014), in holding that the plaintiff’s admission that he did not ingest a Novartis product was fatal to his claim. Id.

The plaintiff/appellant appealed the dismissal of his claims, arguing that the district court erred by not considering Novartis a manufacturer under Texas product liability law. The court of appeals disagreed, holding that “[b]ecause Mr. Johnson alleges that he only ingested the Generic Defendants’ drugs and not the Brand Defendants’ drugs, he has failed to state a products liability claim against the Brand Defendants.” Op. at 7. Further, the court cited prior precedent that “Texas's fraud-on-the-FDA rebuttal is preempted by the Food Drug and Cosmetics Act unless the FDA itself finds fraud.” Id. at 8. Thus, the court affirmed judgment for Novartis. Id. at 9.

Alison Christian

DRI Membership Committee member Alison Christian, a shareholder in the Phoenix office of Christian Dichter & Sluga PC (CDS), successfully obtained a dismissal of all claims against an insurance company arising out of injuries sustained during a New Mexico car accident. The six plaintiffs, residents of California, were injured when their RV was hit by a commercial vehicle insured by the CDS client and driven by an Arizona resident. The plaintiffs brought direct claims against the insurance company in Arizona for negligence and negligent hiring, alleging such direct action was permitted by New Mexico law. The plaintiffs alleged duties imposed on insurers under the Motor Carrier Act of 1980 and direct-action rights under New Mexico’s Raskob authority. CDS correctly argued that Raskob is a procedural joinder rule, and the insurance company had no role in hiring the allegedly negligent driver. In dismissing all claims against the insurer, Maricopa County Superior Court Judge Stephens agreed with CDS’s arguments, holding “There is no legal authority for Plaintiffs’ position that Defendant, as a commercial liability insurer, had a duty to screen, review or participate in the hiring decisions of its insureds.”

James Hankins

In Fireman’s Fund v. Holder Construction Group LLC (State Court of Cobb County; 17-A-3479-1), Fireman’s Fund Insurance Company, the property insurer for a hotel located in downtown, filed a property damage subrogation lawsuit against Holder Construction Company and two of its subcontractors. Holder was represented by DRI member James Hankins, a partner of Goodman McGuffey LLP in Atlanta.

In the complaint, Fireman’s Fund asserted a variety of contract and tort-based claims, seeking recovery of damages exceeding $1 million dollars in damages for business interruption and property damage/remediation. Fireman’s Fund alleged that the coiling coil a roof-top air handler unit on the roof of the hotel froze and burst, and Fireman’s Fund alleged Holder and/or its subcontractors were responsible for the loss.

Holder and its subcontractors initially obtained summary judgment on all contract-based claims and the claim for simple negligence, relying on the waiver of subrogation clause in the construction contract. After the trial court’s initial ruling, only one count for gross negligence remained.

The parties completed discovery, and then Holder and its subcontractors filed a second motion for summary judgment and sought to exclude the testimony of the opposing expert.

In connection with excluding the opposing expert, Holder and its subcontractors argued the opposing expert’s testimony was unreliable because he failed to meet the standard required for a causation opinion. Specifically, he could not testify about the primary cause of the water loss, and he kept saying there were multiple variables to the cause of the loss. He later offered an affidavit, contradicting his earlier testimony and saying he could opine that the proximate cause of the subject water loss was the mechanical contractor’s actions relating to the maximum air damper on the air handler unit.

Ultimately, the trial court agreed with the defense and excluded the opposing expert’s testimony.

After excluding the opposing expert, the trial court also granted summary judgment to Holder and its subcontractor, finding there was no issue of fact on whether Holder and its subcontractor’s actions proximately caused the subject water loss. The full order is available here.