The Jere Beasley Report May : 2020

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CAPITOL OBSERVATIONS

Ten Years Of Citizens United Has Upended American Democracy

On Jan. 21, 2010, the U.S. Supreme Court ruled that corporations have a First Amendment right of free speech that includes spending unlimited amounts of money on political campaigns.

The Citizens United ruling sent a tsunami of influential corporate cash into American politics, effectively drowning the voices and will of the people. The result has been a constant and steady erosion of our democratic processes and institutions over the last 10 years.

Conflating money with speech and corporations with people, Citizens United has allowed huge corporations and their armies of powerful lobbyists to hijack elections and manipulate key decisions, ensuring that political processes work first and foremost for a few of the nation’s wealthiest individuals.

Robert Weissman, president of Public Citizen, said recently that Citizens United has “undermined our democracy in phenomenally dangerous ways.” The erosion of our democratic principles and the subsequent takeover of regulatory bodies by special interests is clearly evident in the Trump administration. In less than four years, it has relentlessly rolled back sensible policies that upheld the safety and well-being of the American people.

Citizens United has systematically blocked the progress that the majority of Americans want and need: Access to affordable prescription drugs and health care; cleaner emissions controls and other green policies; better gun control measures; net neutrality; and protecting our National Parks and other public lands from mining, drilling, logging and other commercial activities; to name a few.

The Citizens United decision unleashed torrents of shady spending by unregulated, often anonymous groups. This deep well of corporate cash finances targeted ads and campaigns of misinformation while keeping elected leaders yoked to donors and special interests. It has also provided an easy pathway for foreign entities to influence U.S. elections, as we witnessed in 2016.

But there is hope. Public Citizen is fueling a pro-democracy movement and has energized calls for a constitutional amendment that would flush corporate money out of politics. Polling consistently shows that the American people strongly and overwhelmingly oppose the Supreme Court decision regardless of their political stripes. According to Public Citizen, nine out of 10 Republicans, Democrats, Independents, and others “[express] disgust with Big Money influence in politics.”

So far, the movement has led 20 states and hundreds of local governments to pass resolutions calling for a constitutional amendment to overturn the decision, and support for such a rule is gaining momentum in the House and Senate.

Source: Public Citizen

TALC LITIGATION UPDATE

Federal Judge Allows Plaintiffs’ Experts To Testify In Talc-Ovarian Cancer Litigation

We received a huge win in the Talc litigation on April 27th. A long-awaited order from the federal judge overseeing the MDL will affect all of the pending talc litigation. This order is critically important since it will allow all of the pending ovarian cancer cases to go to trial.

The ruling, a huge win for victims, will have significant implications for the ongoing multidistrict litigation (MDL) against Johnson & Johnson, U.S. District Court Judge Freda L. Wolfson ruled that scientific and medical experts proposed by the plaintiffs’ steering committee are qualified to testify regarding the link between genital talc use and ovarian cancer. Plaintiffs’ experts will be allowed to testify that talcum powder contains asbestos and fibrous talc and that cell studies demonstrate that talc causes cancer. That is huge for all of the plaintiffs in the pending litigation.

The ruling paves the way for future bellwether trials that could establish compensatory and punitive damage guidelines for the more than 16,000 cases pending in the MDL. Beasley Allen lawyer Leigh O’Dell, co-chair of the plaintiffs’ steering committee, says:

These experts report on the growing amount of peer-reviewed medical literature regarding talcum powder and ovarian cancer and represent the increasing number of highly respected researchers and doctors who are standing up to tell the world about the dangers of talcum powder. These respected and qualified experts will now testify in trials about the risk factors and causes of ovarian cancer, and the biological links of talcum powder use to this deadly disease.

Michelle A. Parfitt, a lawyer with Ashcraft & Gerel, co-chair of the plaintiffs’ steering committee, added:

We are obviously pleased with the court’s ruling and are eager to move forward. Epidemiologists and gynecologic oncologists will be allowed to testify that talcum powder causes ovarian cancer, including their opinions regarding the contribution of asbestos, fibrous talc, and metals to its carcinogenicity.

The clinical experts initially challenged by Johnson & Johnson, but now cleared to testify about the dangers of talcum powder use, include:

  • Anne McTiernan, MD, PhD – Research Professor at the University of Washington School of Public Health’s Department of Epidemiology and the University of Washington School of Medicine, and a cancer prevention researcher at the Fred Hutchinson Cancer Research Center.
  • Arch “Chip” Carson, MD, PhD – Associate Professor and Program Director for the Southwest Center for Occupational and Environmental Health at the University of Texas School of Public Health in Houston.
  • Daniel Clarke-Pearson, MD – Professor and recent Chairman in the Department of Obstetrics and Gynecology at the University of North Carolina-Chapel Hill, specializing in gynecologic oncology.

Judge Wolfson’s ruling allows additional testimony from the following experts:

  • Ghassan Saed MD, PhD – Research Professor in the Departments of Obstetric Gynecology and Oncology at Wayne State University and the Karmanos Cancer Center in Detroit. Dr. Saed will testify about his clinical research demonstrating that talcum powder can cause inflammation and oxidative stress in cells.
  • William Longo, PhD – Material scientist/electron microscopist and founder of Georgia’s Micro Analytical Laboratories, specializing in the analysis of asbestos and mineral fiber-containing materials. Dr. Longo will testify that J&J talcum powder products contain asbestos and fibrous talc, based on his analysis using transmission electron microscopy.

This is a huge win for all plaintiffs. Johnson & Johnson had opposed all of the plaintiffs’ expert witnesses, but Judge Wolfson correctly ruled and the cases can now go forward to trials. If you need more information, contact Leigh O’Dell at 800-898-2034 or by email at Leigh.Odell@beasleyallen.com.

The case is In Re: Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation (MDL No. 2738).

A Further Update On The Talc Litigation

The COVID-19 pandemic is continuing to affect the Beasley Allen Talc Litigation Team along with the rest of the legal world. Most recently the Cadagin trial in East St. Louis, Illinois, was reset from April 30 to July 6. Meanwhile the team has been preparing for the Kleiner trial in Philadelphia, Pennsylvania, which is currently set to start on June 16. The Beasley Allen team is also continuing to prepare for the retrial of the Brower case that was tried last fall in Fulton County, Georgia. We are anticipating trying this case later in 2020 and are working hard to get back into the courtroom as soon as possible. The talc team has been continuing to work on pretrial motions and briefings and stands ready to continue pursuing justice for all our talc clients.

While focusing on the three upcoming trials discussed above, the talc team is also hopeful for a 2020 trial setting in St. Louis, Missouri, and an early 2021 trial setting in South Florida. We will have a more comprehensive update next month. In the meantime, for additional information on this litigation, contact Ted Meadows, Leigh O’Dell or Brittany Scott at 800-898-2034 or by email at Ted.Meadows@beasleyallen.com, Leigh.Odell@beasleyallen.com or Brittany.Scott@beasleyallen.

UPDATE ON THE BOEING LITIGATION

Boeing 737 MAX Crisis Deepens With More Software Problems & COVID-19 Pandemic

As Boeing continues trying to fix all the problems with its defective MAX 737, the company announced recently that it discovered two new software problems. The planemaker’s crisis has been compounded by the fallout from the COVID-19 pandemic. Boeing is weighing its options regarding financial solvency – taking a government bailout or seeking private funding to help it weather the financial storm. If Boeing receives a handout from the government, groups are demanding more transparency and accountability from the manufacturing giant and federal regulators that share blame for green-lighting the MAX’s approval.

More software problems.

The two new software problems that were identified have not “been observed in flight,” Reuters reported Boeing as saying. The company also said that the new software issues are unrelated to the two fatal crashes that killed a total of 346 people and led to the grounding of the aircraft more than a year ago, according to Endgadget. One of the issues involves hypothetical faults that occur in the aircraft’s flight control computer microprocessor. This problem could cause loss of control of the runaway stabilizer. The runaway stabilizer prevents a MAX from climbing or diving on its own. The other problem could potentially disengage autopilot as the plane is making its final approach. Boeing confirmed that it is currently working to address the software issues but didn’t give an expected date of completion. The problems are the latest in a series of software issues discovered since the aircraft was grounded last March following the second of the two fatal crashes.

Last summer, during simulator tests involving erroneous activation of the MCAS, similar to problems that led to the two fatal crashes, a test pilot was unable to quickly and easily recover the plane, in at least one instance using Boeing’s prescribed emergency procedures to regain control of the plane. The pilot gave the system a failing grade, determining that the failure was catastrophic and could lead to the loss of the plane in midflight. In January, Boeing confirmed it discovered that two sections of wiring may be too close in proximity to each other, which could cause a short circuit that could result in a crash if pilots do not act swiftly and appropriately. The wiring issue was identified during a safety audit of the 737 MAX planes by the Federal Aviation Administration (FAA). One month later, FAA chief Steve Dickson announced that an indicator light for the stabilizer trim system “had been staying on for longer than a desired period.” The stabilizer trim helps raise and lower the nose of the aircraft.

Despite the latest problems, Boeing said it doesn’t anticipate this will impact its current plan to have the aircraft back in service by the middle of the year. However, as Verge explained, the MAX’s “ancient computers” and Boeing’s determination to address the plane’s problems with software fixes rather than hardware adjustments have kept the MAX grounded for such an extended time.

The next big milestone in the company’s struggle to get the MAX back in service is the recertification flight, which had been set for April. The company reportedly pushed the scheduled date to May, according to the Motley Fool, but could be forced to push it out even further depending on the length and outcomes of the COVID-19 global pandemic.

Canceled orders and potential government bailout.

The MAX crisis placed demand for the aircraft and even orders the company had secured on shaky ground. As the COVID-19 pandemic has unfolded across the country and globally, the aviation industry has been severely impacted, including Boeing, which was struggling to recover from the MAX crisis already. Significant decline in demand has forced airlines to decrease the number of flights, cutting into their profits and requiring them to reconsider their expenses such as aircraft purchases. Early last month, Avolon, which leases planes, canceled an order for 75 MAX aircraft and industry experts expect more cancellations to follow, Seeking Alpha reported.

In addition to the fallout from the decreased demand, a clause in contracts for orders will allow customers to cancel orders if delivery of the aircraft goes beyond the 12-month “excusable delay.” This trigger could start coming into play more frequently, although Boeing and its customers can renegotiate their deals if they choose to do so. Customers will have many factors to consider the longer the crisis and pandemic continue.

Problems with the MAX have cost the company $18.7 billion and the costs continue to mount, according to CNN. The company’s production of the MAX was reduced after the aircraft was grounded last year and completely halted in January. Although its “balance sheet remains strong” its debt has doubled since March 2019. Costs of the crisis also include numerous lawsuits including several lawsuits the firm is handling for families of victims of the Ethiopian Airlines crash.

Boeing’s biggest customer, the federal government and specifically the Department of Defense, has come to its aid. In early April, the Air Force agreed to move forward in purchasing a fleet of KC-46 refueling planes even though the government had previously withheld the money due to serious problems with the aircraft, Mother Jones reported. Last summer, the Air Force explained that its intention behind withholding the money for the project was to “incentivize Boeing to deliver KC-46s that meet all specification requirements in the contract.”

During a congressional hearing in March, the Air Force reiterated that the aircraft wasn’t fit for “day-to-day operations” but could only be used in emergencies. The deal, which will cost taxpayers $882 million, was reached to help the company combat the impact of the COVID pandemic. The deal was announced just after Boeing secured a $13 billion credit line from the nation’s leading banks in February.

Still, the company is considering if it should take more of a government bailout. As part of the $2 trillion federal stimulus package (CARES Act) in response to the pandemic, lawmakers carved out a provision that would qualify Boeing for up to $17 billion in additional taxpayer funding, according to USA Today. The company has hired two leading investment banks to help analyze whether more government funding would be the best option or if the company should secure the funding through private sources so that it isn’t saddled with the government’s potential conditions, Bloomberg reported.

Groups demand more transparency.

With recent revelations about its bad decisions regarding the MAX’s development and apparent toxic internal culture, critics don’t believe the company should receive a government bailout. Bailout proponents argue the company is “too big to fail,” harkening back to similar arguments favoring other irresponsible corporate entities whose decisions led to the Great Recession a decade ago. One group of friars and nuns in the U.S. that holds Boeing shares believes the manufacturing giant has been disingenuous about its commitment to transparency.

The Financial Times reported that the group demanded Boeing disclose more about its lobbying practices. As part of its shareholder activism, the group filed a resolution with the U.S. regulator in April, making its demands official. As of this writing, we have not seen an announcement about the vote taken on the resolution by the Boeing board at its April meeting.

Since 2014 a coalition of religious orders aligned with the Interfaith Center on Corporate Responsibility (ICCR) has been pushing for more transparency from Boeing. The ICCR and its 300-member organizations hold $400 billion in assets for various companies. It has proposed similar resolutions in 2020 for other companies including Amazon and Walt Disney.

Beasley Allen lawyers have filed a number of lawsuits for families of victims of the Ethiopian Airlines crash. Mike Andrews in our Personal Injury & Products Liability Section leads the effort. He focuses much of his practice on aviation litigation. He is representing a number of families in this litigation. Currently, Mike is also investigating other potential cases. He visited the crash site and surrounding areas several times last year and was overwhelmed at the carnage left behind after Flight 302 hurled itself and passengers 30 feet into the earth.

If you would like to have more information on the Boeing litigation, or any other aspect of aviation litigation, contact Mike at 800-898-2034 or by email at Mike.Andrews@beasleyallen.com. Mike also has written a book on litigating aviation cases to assist other aviation lawyers, “Aviation Litigation & Accident Investigation.” The book offers an overview to the practitioner about the complexities of aviation crash investigation and litigation.

Sources: Reuters, Endgadget, Motley Fool, Seeking Alpha, CNN, Mother Jones, USA Today, Bloomberg, Financial Times

AN UPDATE ON THE OPIOID LITIGATION

Opioid MDL Needs New Pharmacy Bellwether

U.S. District Judge Dan Aaron Polster, the Ohio federal judge overseeing the opioid multidistrict litigation (MDL), told local governments and pharmacy giants to quickly select a new bellwether case to test allegations of improper painkiller dispensing or he will do it himself.

In an order on April 16, the judge directed lawyers for cities and counties to choose a case by April 23 and then confer with the pharmacy Defendants. Both sides were given until April 28 to let the court know if they have agreed on a case. Judge Polster said that he will select a case unilaterally if the parties can’t come to a meeting of the minds.

The judge’s order came just one day after the Sixth Circuit ruled that an upcoming bellwether trial against the pharmacies – including CVS, Walgreens, Walmart and Rite-Aid – can’t examine dispensing claims because those claims were added too late. As a result, the trial in November will only look at wholesale distribution activities.

Judge Polster’s decision to start a third case track to address the merits of the dispensing claims against the pharmacy Defendants was seen as good news by lawyers for the MDL Plaintiffs.

The question of whether improper dispensing and distribution by pharmacies created a public nuisance in the form of the opioid crisis will be the sole legal claim decided at the bellwether trial covered by Judge Polster’s order. When Judge Polster intends to schedule the trial is not known at this juncture.

The order stems from the Sixth Circuit’s unanimous decision granting a writ of mandamus that pharmacy chains petitioned for in January. The appeals court found that Judge Polster improperly allowed two Ohio counties to amend their complaints with retail dispensing allegations even though they had “expressly disavowed” them at one point long ago. The chain pharmacies will now have to face two trials back to back.

There are other bellwether cases in the opioid MDL around the country, but not all of them involve pharmacy Defendants. Pharmacies have been conspicuously absent from most of the publicly reported settlement offers in the opioid MDL, which involves nearly 3,000 cases. That’s a contrast with drug manufacturers and the largest distributors, which have expressed openness to paying billions to state and local governments to resolve their alleged roles in fueling the opioid crisis.

The MDL is In re: National Prescription Opiate Litigation, (case number 1:17-md-02804) in the U.S. District Court for the Northern District of Ohio.

Coronavirus Impact On The Opioid Crisis

Deaths from drug overdoses are likely to increase during the coronavirus outbreak because of disruption to recovery routines and access to treatment, according to counselors and people whose rehabilitation depends on daily care. Lockdowns and social distancing have forced doctors, social services, and support groups to shut down, reduce hours, or move online – leaving people who use drugs and those in recovery to face greater risks with less support.

In the setting of an outbreak of this highly contagious and deadly infectious disease, requiring patients with opioid use disorder to come to an opioid treatment program to get the medication they need to fight their addiction could have two negative outcomes.

  • First, individuals will continue to come and get their medication even though they have symptoms of Covid-19, possibly exposing other patients passing through the program and the medical staff caring for them to the virus.
  • A second possibility is that individuals will not – or cannot – come because of infection, leading to missed medication doses followed by opioid withdrawal and increased risk of recurrent drug use and overdose.

With countries closing their borders and movement restricted, recovery advocates are also concerned that opioid use will become more dangerous. If supplies diminish, opioid dealers will likely be tempted to cut drugs with more dangerous substances, like fentanyl, even more than they do already. In an ideal world, this would lead to more people seeking treatment – but for many, the cost of the medication is prohibitive.

If it was already difficult to deal with the opioid crisis on its own, facing it amid the coronavirus outbreak will be extremely challenging. Devin Reaves, who runs the Pennsylvania Harm Reduction Coalition, said:

I don’t think anything like this has happened before. I can’t remember a time in my life where there were actually two national declared public health emergencies.

To reduce patients with symptoms from infecting others, outpatient clinics and urgent care centers have ramped up the use of virtual visits and insurance companies are expanding coverage for them. Federal agencies could mirror this approach by changing policies regarding methadone during a state of emergency. They could make it possible for clinicians to use virtual visits to evaluate patients, allow all patients to take additional doses home, make it possible for surrogates to pick up doses when someone is ill, or deliver doses to those unable to come to the clinic.

In response to the outbreak, the Substance Abuse and Mental Health Services Administration has issued emergency guidelines, relaxing restrictions on medication-assisted treatment. The new guidelines allow doctors to prescribe buprenorphine via telemedicine, advise methadone clinics to give stable patients take-home doses in order to reduce crowding, and recommend delivery to patients in quarantine.

Opioids like heroin and fentanyl – and most of the medications used to treat addiction to those drugs – create a physical dependency in many people who use them, driving the need for a new dose or else risk going into withdrawal. If clinics are not able to find a way to deliver the medication, patients will either be forced to continue coming in person and risk spreading the coronavirus further or be left to face the consequences, which can include severe flulike symptoms, vomiting, diarrhea, and shaking, mixed with anxiety and depression.

If getting medication becomes too difficult, some people may relapse and seek out drugs on the street. Anyone looking for heroin is most likely to encounter fentanyl, a synthetic opioid, which is the leading cause of the overdose crisis.

Sources: Buzzfeed News and NPR

Claims Dismissed From Opioid MDL’s Hospital Bellwether

U.S. District Judge Dan Polster has dismissed some of the claims in Florida-based West Boca Medical Center’s opioid addiction suit. The suit is a bellwether in the multidistrict litigation (MDL) against drug companies. But, the judge allowed other claims to survive and those claims will be discussed below.

Judge Polster dismissed West Boca Medical Center’s claims that drug manufacturers fraudulently marketed opioids, saying that Florida courts have not found that there is a separate cause of action for negligent marketing claims. Similarly, the judge also said that there is no case law in Florida that there is a negligent distribution claim against pharmaceutical distributors.

The judge also dismissed the hospital’s racketeering claim that it was harmed by the drug distributors and manufacturers’ investment of income made through an alleged scheme to downplay the risks of opioid addiction and turn a blind eye to suspicious orders. The judge agreed with the companies’ argument that West Boca failed to allege a specific injury caused by any investment. West Boca alleges that hospitals have been forced to incur additional operational costs associated with the opioid crisis.

Judge Polster refused to dismiss West Boca Medical Center’s claim that the opioid epidemic is a public nuisance caused by the over-saturation of opioids in the state. The judge also rejected an argument by drug distributors that under Florida law, a public nuisance claim requires that the use and enjoyment of property was interfered with.

Additionally, Judge Polster also refused to dismiss the hospital’s claim that the companies violated the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) through the promotion of opioids. The judge said:

Because the FDUTPA is intended to be construed liberally, applies to non-consumers, and does not require a consumer transaction between West Boca and the Defendants, the Court concludes West Boca has standing to assert its FDUTPA claim.

In November Judge Polster told the Judicial Panel on Multidistrict Litigation that he would likely suggest the hospital’s suit be remanded for bellwether trial. On the same day, he also announced that he will preside over a monthlong trial starting Oct. 13. The trial will feature the northern Ohio counties of Cuyahoga and Summit against five groups of pharmacy companies, including CVS Health Corp., Rite Aid Corp. and Walgreen Co. as Defendants.

The case is West Boca Medical Center Inc. v. AmerisourceBergen Drug Corp. et al., (case number 18-op-45530) and the MDL is In re: National Prescription Opiate Litigation, (case number 1:17-md-02804) both in the U.S. District Court for the Northern District of Ohio.

Source: Law360.com

Some Public Nuisance Claims Cut In New York Opioid Suit

Suffolk County Supreme Court Judge Jerry Garguilo has dismissed public nuisance claims against pharmacy chains in the suit filed by two Long Island counties over the opioid crisis. But the judge declined to dismiss public nuisance claims over Endo Pharmaceuticals Inc.’s marketing of its discontinued drug Opana ER.

Judge Garguilo said that Nassau and Suffolk counties hadn’t shown that retail chain pharmacies, including CVS Pharmacy Inc, Rite Aid and Walgreen Co., are responsible for the conduct of their subsidiaries. He said that it has long been New York law that a parent corporation is not liable for the torts of its subsidiary. Judge Garguilo added:

Accordingly, the court grants the motions of the pharmacy defendants for summary judgment on the public nuisance cause of action only, to the extent that the pharmacy defendants have been sued in their capacities as dispensers of prescription opioids.

Judge Garguilo denied summary judgment on public nuisance claims asserted against the pharmacies in their capacity as opioid distributors. Hunter Shkolnik of Napoli Shkolnik PLLC, a lawyer involved in the case, told Law360:

We have not begun the discovery on the “dispensing” case, and that is all that got cut out by this decision. We won and are going to trial on the gross conduct that led to multimillion-dollar fines related to the “distribution” claims. This has been our goal in New York from Day One.

In a separate order, Judge Gargulio denied Endo’s request for an order barring the state of New York from basing its public nuisance claim on evidence related to the company’s marketing of Opana ER before March 2016, when the state agreed to a settlement with the pharmaceutical company over claims that it was falsely promoting the painkiller as crush resistant. The judge said:

The defendants do not offer proof establishing their entitlement to judgment on an issue in the upcoming trial on the causes of action for public nuisance; rather, in the nature of a motion in limine, they are seeking pretrial determinations limiting the nature of the evidence that may be introduced at that trial. In any event, the defendants failed to demonstrate a prima facie case that the March 2016 agreement with the attorney general extended to their marketing and supply of prescription opioids other than Opana ER.

In March 2017, Endo, because of U.S. Food and Drug Administration (FDA) pressure, agreed to halt sales of Opana ER, which has been linked to abuse and a spike in injection-related diseases.

In another order, Judge Gargulio rejected distributor Cardinal Health’s request for summary judgement on public nuisance claims based on violations of the New York Controlled Substances Act before February 2009. The judge said that the issue would be ruled on at trial, saying:

The court finds that summary judgment is not an appropriate vehicle to obtain the requested relief.

Trial in the suit was set to start March 20, but it has been put on hold indefinitely due to the coronavirus pandemic. The trial is expected to test claims from New York and two Long Island counties against major drug manufacturers and distributors.

Although states and local governments have filed thousands of cases blaming drug companies for the opioid crisis, only one case has gone to trial. That trial saw Oklahoma’s attorney general win a $465 million judgment against Johnson & Johnson, which is on appeal.

The state of New York is represented by David Nachman, John Oleske, Christopher Leung, Sara Mark, Elizabeth Chesler, Carol Hunt, Diane Johnston, Michael Reisman, Jennifer Simcovitch, Paulina Stamatelos, Lawrence Reina, Conor Duffy, David Payne, Cory Nugent and Lisa Landau of the New York State Attorney General’s Office. Suffolk County is represented by Paul J. Hanly Jr., Jayne Conroy, Andrea Bierstein and Thomas I. Sheridan III of Simmons Hanly Conroy LLC. Nassau County is represented by Hunter J. Shkolnik, Salvatore C. Badala and Joseph L. Ciaccio of Napoli Shkolnik PLLC.

The case is In re: Opioid Litigation, (case number 400000/2017) in the Supreme Court of the State of New York, Suffolk County.

Source: Law360.com

The Beasley Allen Opioid Litigation Team

Beasley Allen’s “Opioid Litigation Team” includes Rhon Jones, Parker Miller, Ryan Kral, Rick Stratton, Will Sutton, Jeff Price and Tucker Osborne. This team of lawyers represents the State of Alabama, the State of Georgia, and numerous local governments and other entities, as well as individual claims on behalf of victims. If you need more information on the opioid litigation contact one of these lawyers at 800-898-2034 or by email at Rhon.Jones@beasleyallen.com, Parker.Miller@beasleyallen.com, Ryan.Kral@beasleyallen.com, Rick.Stratton@beasleyallen.com, William.Sutton@beasleyallen.com, Jeff.Price@beasleyallen.com or Tucker.Osborne@beasleyallen.com.

PURELY POLITICAL NEWS & VIEWS

No Time For Politics At This Juncture

The nation’s full attention is on the coronavirus pandemic and its health and economic consequences, and rightfully so. All persons in the U.S., regardless of their pollical affiliations, are being affected. Bluntly, this is no time for political pandering at any level. The focus must be on defeating a powerful, invisible enemy, one that doesn’t pick and choose as it kills people nationwide.

Our elected leaders, starting at the very top, must put politics on the shelf for now. Instead, all lenders must concentrate on taking care of all of our people everywhere. There will be a time – and hopefully before the beginning of fall – for politics. But for now, politics must wait.

Leadership requires taking responsibility and taking all steps needed to successfully deal with any crisis and that certainly includes the coronavirus pandemic. All real medical experts are saying we must test, test and continue to test before we can defeat our current and most powerful enemy. The shelter in place orders by governors and mayors have been successful and must continue so long as needed. As many have said, we are all in this together!

COURT WATCH

The U.S Supreme Court Postpones Oral Argument On Ford’s Jurisdiction Challenges Due To Covid-19

One would be hard-pressed to find an area of life COVID-19 has not upended. Court proceedings are no different. While most routine legal proceedings can be conducted virtually, there are some proceedings so sacred that physical presence will probably always be required. U.S. Supreme Court oral arguments are such sacred proceedings. As such, the U.S. Supreme Court is postponing oral arguments on Ford’s jurisdictional challenges – originally scheduled for April 27 – due to COVID-19. This means we won’t receive a decision until the Fall.

As a reminder, Ford is challenging the Montana and Minnesota Supreme Court’s findings that it is fair and reasonable for Ford to defend product liability suits occurring in their States. In both of these cases, the Plaintiffs were injured by defects in Ford’s cars and filed their suits in the state where the accidents occurred. The cars at issue were manufactured, designed, and originally sold outside the forum state. Ford did not dispute the quality and quantity of its contacts with those states. Instead, Ford argued that since the Plaintiffs’ cars were not purchased brand new in those states, then Ford’s in-state contacts did not “cause” Plaintiffs’ claims. Both the Montana and Minnesota Supreme Courts rejected Ford’s “causation” argument.

Since our last update on this case, many entities have filed Amicus Curiae briefs against Ford’s argument in the U.S. Supreme Court. Thirty-nine state attorneys general and the District of Columbia filed an excellent brief explaining how Ford’s proposed proximate cause standard would restrict “States’ strong sovereign and constitutional interests in ensuring that their own courts remain open to citizens injured within their borders.” However, the federal government filed an amicus brief siding with Ford. In a rare decision, the U.S. Supreme Court rejected bids from the States as well as from the federal government to participate in oral argument.

In addition, the Missouri Supreme Court recently became the third state supreme court to reject a manufacturer’s argument that the vehicle must be originally purchased in the state where it causes injury. On March 17, the Missouri Supreme Court upheld a trial court’s finding of jurisdiction over Suzuki Motor Corporation for a car accident in Missouri that left two Missouri residents severely burned.

Beasley Allen lawyers Graham Esdale and Stephanie Monplaisir were the lawyers on this case, titled State ex rel. Suzuki Moroto Corporation, No. SC 98129. They conducted jurisdictional discovery and filed extensive briefing for two years before receiving this favorable ruling from the Missouri Supreme Court. If you need more information, contact Stephanie Monplaisir at 800-898-2034 or by email at Stephanie.Monplaisir@beasleyallen.com.

Despite Covid-19 Oral Arguments Will Be Heard In J&J’s $4.7 Billion Talc Appeal

The effects of Covid-19 are weighing heavily on courts. Although the coronavirus pandemic has delayed multiple hearings and trials, a Missouri Court of Appeals is still going to hear oral arguments in Johnson and Johnson’s appeal of the $4.69 billion verdict awarded to 29 people (22 women and some of their husbands) due to asbestos and talcum powder in J&J’s baby powder that caused ovarian cancer in the women. The Missouri Supreme Court cancelled all oral arguments in April due to the coronavirus. However, the Missouri Court of Appeals for the Eastern District issued an order allowing the parties to still hold oral arguments if they still wished to hold them. Both parties agreed.

Although oral arguments will still be held on April 24, at 10 a.m., there will be some limitations and special precautions due to the pandemic. First, only two lawyers for J&J and two lawyers for the Plaintiffs will be allowed in the courtroom. Second, if you wish to watch the oral arguments, they will be livestreamed on the court’s Facebook page and recorded for posting on YouTube. Each side will get additional time for arguments, allowing each side 30 minutes, and a six-minute rebuttal for J&J.

J&J argued in its brief that the trial should not have been allowed to proceed with so many Plaintiffs. Further, the Plaintiffs were each awarded identical amounts of compensatory damages ($25 million each) despite the unique circumstances of each case. J&J argued that when presented with so many “heartrending stories” the jury overlooked the scientific evidence.

Houston lawyer Mark Lanier, who represents the Plaintiffs in this case, says he is pleased the appeal can go forward, noting that “several Plaintiffs have already died post trial, and those still alive are entitled to a just review of their cases.”

The case is Ingham v Johnson & Johnson et al., (case number ED107476) in the Missouri Court of Appeals for the Eastern District.

Beasley Allen lawyers continue to investigate cases involving women diagnosed with ovarian cancer after using talcum powder products for feminine hygiene. For more information, contact Brittany Scott or Melissa Prickett at 800-898-2034, or by email at Brittany.Scott@BeasleyAllen.com or Melissa.Prickett@BeasleyAllen.com.

Source: Law360.com

THE NATIONAL SCENE

Paycheck Protection Program Loan For Small Businesses

Social distancing intended to slow the coronavirus outbreak leaves many small businesses across the country fighting hard to stay economically alive. The number-one pressure on small-business owners during this time is payroll. Whether a sole proprietor or a company with 500 employees, businesses have certainly felt the pressure. As businesses scramble to meet payroll and make debt payments, they may get some relief from the Paycheck Protection Program.

The Paycheck Protection Program (PPP) is the cornerstone provision of the CARES Act – providing small-business owners access to as much as $10 million in funding, which could be forgiven if the loan is used to fund payroll. A small business with fewer than 500 employees that was in business on or before Feb. 15, 2020, may qualify for a PPP loan. To obtain a PPP loan, owners must certify that the business has been economically affected or that economic uncertainty makes the loan necessary.

A business may receive 2.5 times its average monthly payroll costs, up to $10 million dollars. Payroll costs include salary, wages, commissions, payment of vacation, sick, parental/family/medical leave, payment of retirement contributions, group health coverage premiums and state and local taxes assessed on payroll. The loan term is two years with an interest rate of 1% and loan payments are deferred for the first six months.

The loan forgiveness provision is the best part. Businesses are eligible for loan forgiveness for the amounts they spend over the next eight weeks after receiving the loan on certain qualifying expenses. The qualifying expenses of the business over the eight-week period include payroll costs, rent, interest on mortgage debt and utilities. However, if the number of full-time employees is reduced over this time period or if the business’ payroll costs are reduced 25% or more, then the amount of the loan eligible for forgiveness will be reduced.

The Paycheck Protection Program is a critically needed lifeline for American small businesses during these unprecedented times. If you need more information, contact Lance Gould, a lawyer in our Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Lance.Gould@beasleyallen.com.

Source: www.sba.gov

AN UPDATE ON THE WHISTLEBLOWER LITIGATION

$2 Trillion Relief Bill Said To Carry Huge Fraud Risks

White collar and government investigations lawyers expect trillions of dollars in COVID-19 relief funds to lead to unprecedented fraud. They are urging businesses seeking funds to protect themselves from future risk in what they expect to be a new decade of government investigations. According to one study, growth of in-house compliance spending has slowed recently after companies built up their capacity over the past decade. Experts noted that it is important for business to strictly adhere to compliance mechanisms that they have in place.

The Coronavirus Aid, Relief, and Economic Security, or CARES, Act is widely viewed as similar in many ways to the U.S. Treasury’s Troubled Asset Relief Program (TARP), only on a much grander scale. Passed in 2008, TARP had built-in oversight mechanisms including a special inspector general (SIG) to oversee the hundreds of billions handed out to banks. That inspector general’s office, known as the SIGTARP, pursued investigations that led to 24 enforcement actions against banks and other organizations and the conviction of 291 individuals, including 76 bankers, according to the office. The effort has recovered some $11 billion, including $900 million in 2019, more than 10 years after the bailout began.

Erin Rodgers Schmidt, a partner at Morgan Lewis & Bockius LLP in Philadelphia, said that companies receiving funds from the pandemic package should be aware that the investigative efforts to crack down on waste and abuse are likely to last just as long. Rogers Schmidt said that companies should make the time to document their decisions to apply for funding, including facts known at the time and copies of governmental guidance that was relied on and may have changed by the time the decision is being scrutinized.

The CARES Act provides three separate oversight mechanisms: a bipartisan Congressional Oversight Commission, a Pandemic Response Accountability Committee made up of inspectors general who oversee various government agencies, and a special inspector general for pandemic recovery, or SIGPR. Brian D. Miller has been nominated by President Trump for the SIGPR role.

Neil Barofsky, the former SIGTARP who is now a partner at Jenner & Block, said in a recent interview that he believes the SIGPR is underfunded. When he signed the bill, the president said that the SIGPR’s reports to Congress are subject to “presidential supervision.” Barofsky said that “could strip one of the most important tools that an inspector general has in obtaining information.”

“Information is the currency of success for oversight. You can’t have transparency if you have an inspector general who can’t get information,” Barofsky told Bill Moyers in an interview published on the journalist’s site.

Whistleblowers are also sure to emerge at many of the companies that avail themselves of bailout funds. Whistleblowers are able to file a lawsuit on behalf of the Federal Government in order to recoup any of these taxpayer bailout funds that may be subject to fraud and abuse. As the programs mature and funds start to be paid out, insiders may start to detect fraud, waste or abuse and come forward in order to stop the wrongdoing.

Lawyers in our firm have extensive experience in whistleblower cases. So as funds are being dispersed if there are concerns about potential fraud, you can contact one of the lawyers on our Whistleblower Litigation Team.

Source: Law360.com

Florida Pain Clinic And Lab To Pay $41 Million To Settle FCA Claims

A related laboratory and pain clinic based in Tampa, Florida, and two former executives have agreed to pay $41 million to settle a False Claims Act (FCA) suit alleging they billed federal health programs for medically unnecessary urine drug testing. Logan Laboratories Inc. and Tampa Pain Relief Centers Inc., along with individual Defendants Michael T. Doyle and Christopher Utz Toepke, reached the settlement that will resolve claims initially brought in a pair of whistleblower cases filed in Tampa and Philadelphia. The suits alleged the companies routinely billed Medicare, Medicaid, Tricare and other federal programs for unnecessary tests over a period from 2010 through 2017.

The government, which opted to intervene in the two whistleblower cases, alleged the companies established a policy of automatically ordering screening and confirmation tests for all patients at every visit, without individualized determinations from treating physicians that any drug testing was medically needed. The screening, or presumptive, tests were conducted by Tampa Pain, while the confirmation, or definitive, tests were performed at Logan Labs, and both companies submitted false claims to the government health care programs. The companies are subsidiaries of Tennessee-based Surgery Partners Inc.

In recognition of their efforts, Cho, Baker and two other whistleblowers from the Pennsylvania case will receive 19% of the settlement total, which comes out to nearly $7.8 million, as permitted under the qui tam provision of the False Claims Act.

The cases are United States ex rel. Cho et al. v. Surgery Partners Inc. et al., (case number 8:17-cv-983) in the U.S. District Court for the Middle District of Florida and United States ex rel. Ashton v. Logan Laboratories LLC et al., (case number 16-4583) in the U.S. District Court for the Eastern District of Pennsylvania.

Source: Law360.com

The Beasley Allen Whistleblower Litigation Team

The Whistleblower Litigation Team has been in place at Beasley Allen for a good while to handle False Claims Act (FCA) claims. Due to our firm’s heavy involvement in the whistleblower litigation there was a definite need for the creation of this team. Fraud against the federal government has been and continues to be a huge problem, involving many industries in this country. We expect the amount of fraud against the government to increase greatly during the coming months.

As we have consistently stated, whistleblowers are the key to exposing corporate wrongdoing and government fraud. A person who has first-hand knowledge of fraud or other wrongdoing may have a whistleblower case. Before you report suspected fraud or other wrongdoing – before you “blow the whistle” – it is important to make sure you have a valid claim and that you are prepared for what lies ahead. Beasley Allen has an experienced group of lawyers dedicated to handling whistleblower cases.

If you are aware of fraud being committed against the federal or state governments, you could be rewarded for reporting the fraud. If you have any questions about whether you qualify as a whistleblower, you can contact a lawyer at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on the firm’s website ( www.beasleyallen.com).

A lawyer on our Whistleblower Litigation Team will be glad to discuss any potential whistleblower claim with you either in person or by phone. You can reach these lawyers by phone at 800-898-2034 or by email at Larry.Golston@beasleyallen.com, Lance.Gould@beasleyallen.com, Paul.Evans@beasleyallen.com, Leslie.Pescia@beasleyallen.com, Leon.Hampton@beasleyallen.com, Tyner.Helms@beasleyallen.com and Lauren.Miles@beasleyallen.com.

PHARMACY BENEFITS MANAGER (PBM) LITIGATION

PBM Litigation: What Are Plaintiffs’ Potential Claims?

Prescription drugs are more expensive in the United States than in any other country in the world and critics are blaming Pharmacy Benefit Managers (PBMs) for the rising drug costs. PBMs are the middleman between drug makers, pharmacies and health care benefit plans and they have been accused of keeping drug prices high in order to pad their own pockets. The major PBM players in the United States include companies like Express Scripts, CVS Caremark, and OptumRX. Consumers and states spend tens of millions of dollars each year paying for pharmacy benefits, and Plaintiffs across the country have been turning their eyes to the PBMs as the cause in increased drug spending.

PBMs contract with employers or health plans to interface with drug manufacturers and pharmacies to process plan participants’ claims for prescription drugs. PBMs are supposed to be using their negotiating power to decrease prescription drugs costs and then pass their savings on to patients and plan sponsors. Unfortunately, PBMs are alleged to have been increasing drug costs, inflating overhead costs, overcharging administrative fees, and pocketing savings. In most instances, however, Plaintiffs are in binding contracts with their PBMs to process the plan’s prescription drug claims and they are not sure what claims can be pursed against them. As more PBM litigation is filed across the country, Plaintiffs continue to refine their claims in order to seek justice.

Currently, Plaintiffs are pursuing many state common law claims against PBMs in order to recover the amounts they overpaid in pharmacy benefits. These potential claims include theories of breach of contract, breach of the covenant of good faith and fair dealing, fraud, fraudulent misrepresentation, unjust enrichment, promissory estoppel, and tortious interference with prospective economic advantage. All of these causes of action under common law would allow for Plaintiffs to seek to recover their actual damages that resulted from the PBM’s conduct. Some states may have enacted a statutory claim for these common law causes of action that would allow for penalties, treble damages, attorney’s fees, and/or costs.

Additionally, an increasing number of Plaintiffs are alleging that the conduct of PBMs is anticompetitive in that PBMs are seeking to create a monopoly and drive out competition. State and federal laws against anticompetitive behavior prohibit agreements that unreasonably restrain competition or create or attempt to create monopolization. More and more Plaintiffs are pursuing these theories and filing antitrust causes of action against the PBMs. Successful antitrust Plaintiffs may seek to recover treble damages in addition to attorneys’ fees, making antitrust claims a particularly attractive cause of action for Plaintiffs.

We may also see more Plaintiffs seek Racketeer Influenced and Corrupt Organizations (RICO) Act claims against PBMs. Here, Plaintiffs must allege that the PBM engaged in an enterprise affecting commerce; was employed by or associated with the enterprise; participated, directly or indirectly, in the conduct; and participated through a pattern of racketeering activity that includes at least two racketeering acts. Like antitrust, Plaintiffs seeking RICO claims may recover treble damages in addition to attorneys’ fees.

Plaintiffs are also seeking to hold PBMs liable as Employee Retirement Income Security Act (ERISA) fiduciaries, arguing that they mismanage health plan assets and fail to achieve cost savings, in violation of a purported duty to act in the plan participants’ best interests as set forth in their binding contract. While ERISA claims have more pleading challenges as compared to non-ERISA claims, there are recoveries and equitable relief specific to ERISA claims that may be of value.

Litigation against PBMs is expected to continue, if not increase, as more Plaintiffs become aware of the wrongful and deceptive practices of PBMs and their contribution to the increase in drug costs. As the law develops in PBM litigation, we can expect to see a wide range of legal theories available to Plaintiffs in hopes of holding PBMs responsible for their bad acts.

Critics of PBMs are tired of their exploitation of the lack of transparency and competition and the role they have played in the increased costs of prescription drugs. Over the years, our firm has represented consumers and states in various complex health care litigation and is currently investigating PBM claims. We welcome the opportunity to investigate potential PBM misconduct. If you have any questions about our firm’s health care fraud practice, contact Ali Hawthorne, a lawyer in our Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Alison.Hawthorne@beasleyallen.com. Ali handles PBM litigation for the firm.

Sources: Bloomberg Health Law and Business News

FRAUDULENT ACTIVITIES DURING COVID-19 OCCURING WITH MORE EXPECTED

Protective Mask Fraud

A Georgia man was charged with fraud after attempting to sell millions of nonexistent respirator masks to the federal government as it struggles to shore up supplies of vital medical equipment during the coronavirus pandemic, the Justice Department (DOJ) said in a statement. Christopher Parris, 39, of Atlanta, was accused of making a series of fraudulent misrepresentations to secure orders that would have totaled more than $750 million from the Department of Veterans Affairs (VA) for 125 million face masks and other personal protective equipment (PPE).

The offer to Veterans Affairs came from a person at a Louisiana-based company that said it sells industrial safety supplies, and identified Parris and his company, Encore Health Group, as one of its suppliers, according to an affidavit. Through a series of misrepresentations, the DOJ says Parris claimed to act as a supplier who could obtain “millions of genuine 3M masks” from domestic factories “when he knew that fulfilling the orders would not be possible,” that Encore Health “has the ability to produce materials in one to two weeks” and that it “buys directly from 3M and other suppliers.”

A lawyer for 3M said that Encore Health is not one of its partners and that “upon review of 3M’s databases” 3M does not sell N95 Masks to Parris or Encore Health. Prosecutors said that Parris was also accused of making similar false representations to other entities in an effort to sell personal protective equipment to state governments.

Parris appeared in the U.S. District Court for the Northern District of Georgia in connection with the masks case and was expected to be extradited to Washington, D.C. If convicted, he could face up to 20 years in prison and a $250,000 fine.

Source: The New York Times

Ventilator Scam During A Pandemic Is Shameful

The lack of ventilators in the U.S. hospital system has emerged as one of the biggest obstacles for state and local governments as the pandemic makes its way across the country. Worse, the Department of Health and Human Services (HHS) Biomedical Advanced Research and Development Authority, known as BARDA, had anticipated a decade ago that hospitals would run short of life-saving ventilators in the event of a pandemic. BARDA tried to find a company that could produce an inexpensive, durable ventilator that could be operated by people with minimal training during a crisis.

BARDA contracted with the Pennsylvania subsidiary company of appliance and technology giant Royal Philips N.V. in 2014 for $13.8 million to design the stockpile ventilator with an option to purchase 10,000 for $3,280 each. The company won Food and Drug Administration (FDA) clearance for its Trilogy Evo Universal ventilator in July, and in September HHS put in its order.

But Philips didn’t deliver any ventilators to the stockpile even as the coronavirus spread across the globe and hospitals scrambled for ventilators to keep their patients alive. Rather than making the government-funded design, Philips has been manufacturing more expensive commercial versions of the Trilogy Evo developed with federal funds at its Pennsylvania plant and selling them overseas and in the United States. As the U.S. scrambles to find enough of the devices to sustain hospital patients affected by the coronavirus, not a single version of the Trilogy Evo Universal model currently is counted within the U.S. stockpile.

Philips said it was within its rights to sell the commercial versions first because its contract with HHS gave the company until 2022 to produce the cheaper stockpile version. Philips had only made the stockpile version in small batches and didn’t want to ramp up production on a ventilator that it hadn’t mass produced, a slower process than increasing production of other models, company spokesman Steve Klink said last month. The company, which only makes ventilators in the U.S., said it wanted to continue selling ventilators to other countries in need. Klink also said the government contract did not cover all of the costs for the ventilators’ development.

Instead, it was announced on April 8, 2020, that the U.S. Department of Health and Human Services will pay the Dutch parent company, Royal Philips N.V, $646.7 million for a new, more expensive model of ventilators than the ventilator model developed with federal funds – purchasing the Trilogy EV300, and paying more than $15,000 each. The first 2,500 units were to arrive before the end of May, according to HHS, and the rest by the end of December.

Suspect business practices that both deceive the public and void valid contracts in attempts to profit during a crisis are again not only immoral, but illegal. Our firm is investigating similar fraudulent patterns of individuals and/or entities seeking to deceive state and local entities and are attentive to all threats of such practices.

Source: propublica.org

Beasley Allen Lawyers Are Available To Help Out

Fraudulent attempts to profit during a health and economic crisis are not only immoral, but illegal. We expect there to be a tremendous amount of fraud and self-dealing resulting from the federal government’s recent heavy spending relating to the coronavirus pandemic. Lawyers in our firm are investigating fraudulent patterns of entities and individuals seeking to deceive state and local entities, as well as individuals and businesses, and are attentive to all threats of fraudulent actions and practices. If you have information of fraudulent activities, contact the authorities or seek legal counsel. You can contact Dee Miles, Larry Golston, Lance Gould, Ali Hawthorne, Leon Hampton, Lauren Miles and Tyner Helms, lawyers in our firm’s Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Dee.Miles@beasleyallen.com, Larry.Golston@beasleyallen.com, Lance.Gould@beasleyallen.com, Ali.Hawthorne@beasleyallen.com, Leon.hampton@beasleyallen.com, or Lauren.Miles@beasleyallen.com.

PRODUCT LIABILITY UPDATE

Gunmakers Must Face Suit Over Las Vegas Mass Shooting

Because of all the attention being diverted away from other news events by the coronavirus pandemic, several important items of interest to the public aren’t being fully reported by the news media. That’s certainly understandable. The public health crisis must take center stage.

Law360 reported recently on a most significant court ruling in a product liability case. A Nevada federal judge has ruled that a federal law shielding gunmakers from liability can’t be invoked to defeat a suit alleging companies unlawfully produced and sold easily modified firearms that were used in the 2017 Las Vegas mass shooting.

U.S. District Judge Andrew P. Gordon partially rejected a motion to dismiss filed by gunmaker Colt’s Manufacturing Co. LLC, dealer Discount Firearms and Ammo LLC, and other firearm companies. This came in a suit accusing the companies of making and selling semiautomatic assault rifles like the AR-15 while knowing that they could be easily modified for automatic fire using third-party devices such as “bump stocks.”

The suit, filed by James Parsons, alleges that the Defendants’ negligent actions caused the death of his daughter, Carrie Parsons, one of 58 people killed by Stephen Paddock while attending the Route 91 Harvest country music festival. Paddock, who utilized bump stocks during the attack, killed himself after the shooting.

The Defendants had argued that the Protection of Lawful Commerce in Arms Act (PLCAA), which immunizes gunmakers for the lawful sale of firearms, bars Parsons’ claims. Judge Gordon disagreed, however, saying Parsons’ wrongful death claim could be subject to an exception under the PLCAA when a manufacturer or seller “knowingly violated a state or federal statute applicable to the sale or marketing of the product.” Because both federal and Nevada law prohibit the manufacture and sale of machine guns, an exception to the PLCAA could apply, the judge said. Judge Gordon said in his order:

The Parsons’ allegations are narrower. They allege that these defendants knowingly manufactured and sold weapons ‘designed to shoot’ automatically because they were aware their AR-15s could be easily modified with bump stocks to do so. The Parsons have alleged a wrongful death claim that is not precluded by the PLCAA.

However, Judge Gordon gave credence to the Defendants’ argument that, under a Nevada statute known as NRS Section 41.131, makers and sellers of guns can’t be sued “merely” because the firearm or ammunition is capable of causing injury or death.

Saying the statute’s text can be interpreted in a multitude of ways, the judge certified a question asking the Nevada Supreme Court to determine the meaning of the statute’s use of the word “merely.’ Section 41.131 was enacted in 1985, but Nevada courts have yet to interpret it. Judge Gordon said:

The parties have not identified, and I have not found, a federal or state decision that has even cited it. I would ordinarily predict how the Supreme Court of Nevada would interpret the statute. But this case presents important public policy concerns for the state of Nevada that should be addressed by the Nevada court.

Separately, Judge Gordon dismissed the Parsons’ claims for negligent entrustment and negligence per se, saying the claims were not valid under Nevada law.

Along with Colt and Discount Firearms, the suit names as co-Defendants gunmakers Christensen Arms, Daniel Defense Inc., FN America and Noveske Rifleworks LLC, and dealer Guns and Guitars Inc., among others.

Parsons is represented by Richard Friedman of Friedman Rubin PLLC, Joshua D. Koskoff of Koskoff Koskoff & Bieder PC and Matthew L. Sharp of Matthew L. Sharp Ltd.

The case is Parsons et al. v. Colt’s Manufacturing Co. LLC et al., (case number 2:19-cv-01189) in the U.S. District Court for the District of Nevada.

Source: Law360.com

Lawsuit Filed Over Faulty Helicopter Part That Led To Marines’ Deaths

The families of the four U.S. Marines who were killed in a fatal helicopter crash in southern California two years ago have filed a lawsuit in Pennsylvania state court naming two companies they say were responsible for supplying a faulty component that led to the crash.

In a complaint filed in the Philadelphia County Court of Common Pleas last month, the families alleged that Kampi Components Co. Inc. provided the military with a bypass valve button – part of the downed helicopter’s tail rotor servo – that failed to live up to contract specifications and caused the aircraft to careen out of control.

According to the complaint, the valve button, which was manufactured by the Alabama-based Diamond Rubber Products Co., incorporated rubber that, in contravention of Kampi’s contract with the military, was not intended to be used with the hydraulic fluid used in the helicopter’s tail rotor servo. The complaint said:

Based on the post-crash analysis and investigation, the bypass valve button manufactured, sold and supplied by the defendants did not conform to the precise and mandated specifications provided and required by the government.

The four marines – Capt. Samuel Schultz, Lt. Capt. Samuel Phillips, Gunnery Sgt. Derik Holley and Lance Cpl. Taylor Conrad – were killed in the April 2018 crash as they tried to land the helicopter in “unimproved” terrain as part of a training exercise outside a town along the U.S.-Mexico border.

During post-crash analysis, investigators discovered that a bypass valve button manufactured by Diamond and supplied to the military by Kampi, which is based outside of Philadelphia in suburban Bucks County, incorporated rubber that can break down when exposed to hydraulic fluid. Degradation of the rubber in the valve button caused a blockage in the helicopter’s hydraulic system that rendered the flight control system inoperable. It was alleged further:

When this condition occurs, the pilots can do nothing to bring the subject helicopter back under control and are blameless in this crash. Kampi and Diamond knew that their valve buttons contained noncompliant parts, but they did nothing to either warn the military or to correct the mistake.

The lawsuit includes counts of strict liability, negligence and breach of warranty, and the families are seeking both compensatory and punitive damages in the complaint.

The Plaintiffs are represented by Richard Genter of the Law Office of Richard E. Genter, Bradley Stroll of Katzman Lampert & Stoll, and David Casey, Robert Francavilla, Jeremy Robinson, Scott Cummins and Jason Evans of Casey Gerry Schenk Francavilla Blatt & Penfield LLP. The case is Mitchell Schultz etc. et al. v. Kampi Components Co. Inc., (case number 200302725) in the Court of Common Pleas of Philadelphia County, Pennsylvania.

Source: Law360.com

An Important 3M Case In Florida

Judge Casey Rodgers, a federal court judge, in Pensacola, Florida, will decide in a pending case whether to allow thousands of lawsuits alleging manufacturer 3M supplied defective earplugs to the U.S. military, causing hearing damage to more than 140,000 service members and veterans, to proceed. The CAEv2 earplug at issue is a two-sided earplug: one side was intended to block as much sound as possible, and the other was designed to allow users to hear soft sounds like speech and footsteps while muffling loud sounds like gunfire and explosions.

In early April, both the Plaintiffs and the Defendants filed motions for summary judgement – each motion asking the judge to rule that the other side does not have valid legal arguments on various issues. The Plaintiffs argue that the Defendants used misleading testing data to oversell the effectiveness of the earplugs and that the company sold the earplugs to the government for more than a decade while misrepresenting them as defect-free. On the other hand, the Defendants are relying on the “government contractor defense,” which essentially says contractors are not liable for damages to government employees caused by products built to the government’s own specifications.

In 2016, the government filed a whistleblower complaint alleging 3M’s Dual-Ended Combat Arms Earplug, known as CAEv2, was too short to fit properly in some users’ ears. The CAEv2 required some users to take an extra step of rolling back one of the cone-shaped ends of each earplug to extend its length and ensure it fits deeply enough into each ear to seal out sound. In 2018, 3M agreed to pay the government $9.1 million to resolve allegations that it knowingly sold the CAEv2 to the military without ever disclosing serious design defects.

The Plaintiffs in the current suit, as did the government prior to the settlement, allege they were not informed of the issues of the earplugs fitting improperly. They claim the instructions that came packaged with the earplugs made no mention of the need to roll one end of the earplug back. The Plaintiffs say many users suffered hearing damage because they believed using the CAEv2 as the packaging directed was enough to protect them. If you need more information, contact William Sutton or Tucker Osborne, lawyers in our firm’s Toxic Torts Section, at 800-898-2034 or by email at William.Sutton@beasleyallen.com or Tucker.Osborne@beasleyallen.com.

Source: Pensacola News Journal

Amazon Settles Suit Over Hoverboard House Fire

Amazon.com has settled a lawsuit in a Tennessee federal court alleging that a hoverboard sold through a retailer’s website caused a fire that destroyed a couple’s home and endangered two of their children. Amazon and the homeowners, Brian and Megan Fox, agreed to the settlement while the parties were engaged in mediation. The terms of the settlement have not been disclosed. The trial of the case was set to begin in November.

The lawsuit, filed in 2016 by the Nashville family, involved a fire that burned down the family home, and claims the retailer was responsible for a dangerous counterfeit hoverboard. The Foxes said they bought a hoverboard called a Fiturbo F1 on Nov. 3, 2015, for $274.79, for their children Hailey, Matthew, Rebecca and Sarah. They said they were charged from Amazon Marketplace Payments on their statement. The Foxes said they put the hoverboard in a closet and then gave it to 13-year-old Matthew for Christmas. On Jan. 9, 2016, the parents were out and two of the children were home when the board caught fire. Brian Fox arrived home to see the blaze and says he “feared that Hailey and Matthew were either dead or dying.”

After a Tennessee district court dismissed the suit, the Sixth Circuit revived it in June of last year, ruling that Amazon had assumed a duty to warn under Tennessee tort law when it emailed hoverboard buyers about reports of fires caused by hoverboard batteries. The circuit court left the question of whether that warning was adequate for the lower courts to decide.

The Fox family is represented by Steven E. Anderson and Sara F. Reynolds of Anderson & Reynolds PLC and Mark E. Spear of Spear Spear & Hamby PC.

The case is Fox et al. v. Amazon.com Inc. et al., (case number 3:16-cv-03013) in the U.S. District Court for the Middle District of Tennessee.

Source: Law360.com

AN UPDATE ON THE JUUL LITIGATION

Beasley Allen Continues Investigating New JUUL Claims, Leading National JUUL Litigation Efforts

Beasley Allen lawyer Joseph VanZandt is leading the firm’s JUUL litigation team. Our firm represents more than 2,000 individuals who have suffered significant personal injuries from JUUL e-cigarettes. Beasley Allen also represents several of the class representatives named in the master class action complaint. Additionally, our lawyers, led by Joseph, represent dozens of school districts that have filed public nuisance claims against JUUL related to unique and significant harm the vaping epidemic has had on schools.

Joseph serves on the Plaintiffs Steering Committee (PSC) for the JUUL multidistrict litigation (MDL). Beasley Allen lawyer Beau Darley serves on the PSC for the consolidated California state court litigation. Joseph, Beau, and a team of dedicated lawyers and staff are committed to seeking justice on behalf of those impacted by JUUL. If you have any questions about the JUUL litigation or would like to work with Beasley Allen on a JUUL case, contact Joseph at Joseph.VanZandt@beasleyallen.com or Beau at Beau.Darley@beasleyallen.com.

JUUL MDL Moves Forward At Rapid Pace Despite COVID-19

The JUUL multidistrict litigation (MDL) in the Northern District of California consists of hundreds of individual personal injury, public entity, and class action cases, with the number of cases increasing daily. Joseph VanZandt, a lawyer in our firm’s Mass Torts Section, serves on the Plaintiffs Steering Committee (PSC) for the JUUL MDL. Despite the impact of the national COVID-19 pandemic, the parties continue to make significant strides on discovery and moving the case forward.

Last month, the JUUL PSC filed Master Complaints expanding the field of Defendants to more than 20 individuals and entities, including JUUL and Altria entities, management, e-liquid manufacturing, distributor, and retail Defendants. In light of recent developments, the JUUL PSC has now filed amended master complaints for individual personal injury cases and the class action cases.

The Amended Master Class Action Complaint now sets forth nationwide antitrust class claims and state-specific anti-trust sub-classes on behalf individuals who purchased a closed-system e-cigarette product. The complaint alleges violations of numerous federal and state antitrust laws.

The Amended Personal Injury Master Complaint alleges that JUUL users are at a greater risk of suffering more serious complications if they contract the coronavirus. According to Michael Felberbaum, a U.S. Food and Drug Administration (FDA) spokesman, “[Vaping] can damage lung cells,” and expose people who “smoke and/or vape tobacco or nicotine-containing products” to more “serious complications from Covid-19.” Further, according to Nora Volkow, director of the National Institute on Drug Abuse, “[b]ecause it attacks the lungs, the coronavirus that causes COVID-19 could be an especially serious threat to those who smoke tobacco or marijuana or who vape”. A Short Form Complaint for personal injury cases has been approved by the parties and Court, which Plaintiffs can utilize to adopt the allegations set forth in the master complaint.

FTC Sues To Unwind Altria’s $12.8 Billion JUUL Investment

On April 1, 2020, the Federal Trade Commission (FTC) filed an administrative complaint alleging that Altria Group, Inc. and JUUL Labs, Inc. entered a series of agreements, including Altria’s acquisition of a 35% stake in JUUL, that eliminated competition in violation of federal antitrust laws. Ian Conner, Director of the Bureau of Competition at the FTC said:

For several years, Altria and JUUL were competitors in the market for closed-system e-cigarettes. By the end of 2018, Altria orchestrated its exit from the e-cigarette market and became JUUL’s largest investor. Altria and JUUL turned from competitors to collaborators by eliminating competition and sharing in JUUL’s profits.

The FTC alleged that as competitors, Altria and JUUL monitored each other’s vape device prices closely and raced to innovate. Altria also leveraged its ownership of leading brands across tobacco categories to secure favorable shelf space at retailers throughout the United States, the complaint alleges. Although early competition resulted in Altria’s MarkTen vape becoming the second most popular brand by market share, by late 2018, JUUL vaulted past the industry leaders Altria and Reynolds to become the leading vape company in the country.

The FTC alleges that Altria dealt with this competitive threat by agreeing not to compete in return for a substantial ownership interest in JUUL. Weeks after Altria declared its intention to wind down its vape business, Altria and JUUL announced an agreement that made Altria JUUL’s largest shareholder, allowed Altria to appoint an observer to JUUL’s Board of Directors, and would have permitted Altria to appoint three members of JUUL’s Board after converting its shares to voting securities. JUUL received more than $12 billion, an agreement that Altria would not compete with JUUL for six years, and a range of support services.

The FTC alleges further that Altria’s acquisition of JUUL shares and the associated agreements together constitute an unreasonable restraint of trade in violation of Section 1 of the Sherman Act and Section 5 of the FTC Act, and substantially lessened competition in violation of Section 7 of the Clayton Act.

The FTC issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge. The administrative trial is scheduled to begin on Jan. 5, 2021. The FTC complaint and proceedings do not address problems related to e-cigarette safety or the youth vaping epidemic. Those issues are being addressed separately by the FDA and private lawsuits filed against JUUL and Altria.

Source: FTC.gov

JUUL Fails In Global Markets

After mass regulatory action and a negative reaction to the vaping giant’s growth in the United States, JUUL Labs, Inc. (JUUL) expanded its sales and promotional efforts to other nations across the globe to make up for the decline in sales that had begun in the U.S. Unfortunately for JUUL, the company was met with disappointment as other nations have responded with even stricter regulations.

Just last January, Altria’s chairman made an announcement implying that the hope of JUUL lied in the international market. A little more than a year later, this prediction has proved to be the complete opposite. Most eastern cultures, where smoking is very prevalent, have rejected the entrance of vaping altogether. China removed JUUL from the market after it had only been there for four days. The President of the Philippines made it a crime worthy of arrest to be caught vaping outside of areas specifically for smoking.

Since the negative reactions abroad and promising countries have shockingly nose-dived sales, JUUL has decided to forego its launch in various countries such as the Netherlands and Israel. Other countries fear the same youth smoking epidemic that has occurred in the U.S. Although JUUL has stopped selling dessert flavored vapes in the U.S., it has not done the same in other countries. While flavors might not be limited in other countries, nicotine percentages have been. For example, South Korea only allows vapes to use 1% nicotine, as compared to the 3% and 5% nicotine products in the United States. South Korea isn’t the only one; other countries have similar limits on nicotine percentages.

Other countries have further warned of the dangers of vaping, arguing that it is even more dangerous than cigarettes, turning people off globally to vaping. In countries like India, where traditional tobacco smokers are rampant, the country’s leaders rejected the launch of vaping in November of 2019 when the Prime Minister signed a law banning their manufacture and sale.

While JUUL might have enjoyed a short stint of success in many countries globally, most by this point have issued warnings, strict regulations, or have banned the devices altogether. If you need more information, contact Sydney Everett, a lawyer in our Toxic Torts Section, at 800-898-2034 or by email Sydney.Everett@beasleyallen.com.

MASS TORTS UPDATE

The FDA Should Have Pulled Zantac Heartburn Drugs Much Sooner

While the Food and Drug Administration (FDA) did the right thing by pulling the heartburn medicine Zantac and generic drugs containing the ingredient ranitidine off the market, it should have done so much sooner. The FDA on April 1 requested all prescription and over-the-counter (OTC) versions of the heartburn drug be immediately withdrawn from the market due to the presence of the probable human carcinogen NDMA. A team of Beasley Allen lawyers, led by Frank Woodson, along with Lisa Littell Courson, have been actively investigating potential claims involving regular Zantac/ranitidine use that may have led to cancer of the stomach, colon, intestines, kidneys, bladder, pancreas, esophagus and prostate; and leukemia, non-Hodgkin’s lymphoma, and multiple myeloma.

Makers of Zantac have been aware of the contaminate N-nitrosodimethylamine or NDMA as a possible human carcinogen for years. A preliminary recall of Zantac OTC in the United States and Canada in October is proof that the results of studies were at the very least alarming. The FDA called for the product to be pulled from the market because of the link being made between the drug and the cancers mentioned above.

NDMA is found in low levels in the environment and is commonly ingested in the diet. Low levels are not considered a cancer risk to humans. However, last year independent pharmacy Valisure alerted the FDA to testing that revealed NDMA in some ranitidine products. At that time, the agency said that it did not have enough scientific evidence to recommend that consumers stop using it. Prompted by information gathered by third-party laboratories, the FDA conducted new testing and evaluation that revealed more cause for concern.

The new data confirmed that NDMA levels increase in ranitidine even under normal storage conditions, and increase significantly in samples stored at higher temperatures, including temperatures the product may have been exposed to during distribution and handling by consumers. The older the ranitidine was, or the longer the length of time since it was manufactured, the greater the level of NDMA. The FDA said:

These conditions may raise the level of NDMA in the ranitidine product above the acceptable daily intake limit.

Previous studies have found that it is also possible that medicines containing ranitidine can cause NDMA to form in the body after ingestion. Approximately 60 million people suffer from heartburn, 15 million use prescription ranitidine and countless others use over-the-counter versions.

Consumers who may have been affected can contact the firm for more information. If you need more information, contact Frank Woodson or Lisa Courson at 800-898-2304 or by email at Frank.Woodson@beasleyallen.com or Lisa.Courson@beasleyallen.com.

New Cancer Risk with Weight Loss Drug

Over the years, there have been several weight loss medications on the market that have caused serious side effects. Some of the risks associated with these medications were found to outweigh their benefit of losing weight. For instance, consumers who used the weight loss drug Meridia saw little weight loss benefit. Conversely, a controlled study for Meridia showed a significant increased risk of heart attacks and strokes. Another example is Fen-Phen, likely a more well-known weight loss medication, which was found to have a significantly elevated risk of valvular heart damage with its usage. Due to the injuries that many of these consumers suffered, several lawsuits were filed against the makers of these various drugs, in order to hold them accountable for their wrongful actions.

History appears to repeat itself with another weight loss medication that has been linked to a significant injury or condition. On Feb. 13, 2020, the Food and Drug Administration (FDA) requested the makers of Belviq and Belviq XR to withdraw this medication from the market due to a link to an increased risk of cancer. Belviq, manufactured by Eisai Inc. and Arena Pharmaceuticals Inc., is a prescription medication that suppresses a person’s appetite by increasing the feeling of fullness.

A class action lawsuit has recently been filed against Eisai Inc. and Arena Pharmaceuticals Inc. The lawsuit alleges, among other things, that the companies knew about the risk of cancer but failed to disclose that risk to the consumers. Additionally, the lawsuit alleges that the risks of these drugs outweigh the benefits of its usage. For instance, the lawsuit claims that users of this medication only achieved about a 5% weight loss among those who were already overweight. This benefit compared to the increased risk of cancer is not what the Plaintiffs’ involved in this lawsuit bargained for. Especially since these drugs were not covered by insurance and consumers paid as much as $300.00 per month for a prescription refill.

Hundreds of thousands of consumers purchased Belviq or Belviq XR and potentially are eligible class members to the lawsuit. A representative of Eisai Inc. indicated that they felt this lawsuit was without merit and planned to vigorously fight it.

Beasley Allen lawyers are investigating cases involving individuals who were diagnosed with cancer after taking Belviq or Belviq XR. Contact Roger Smith, Ryan Duplechin, or Melissa Prickett for more information. They can be reached at 800-898-2034, or by email at Roger.Smith@BeasleyAllen.com, Ryan.Duplechin@BeasleyAllen.com, or Melissa.Prickett@BeasleyAllen.com.

AN UPDATE ON INSURANCE LITIGATION

Business Interruption Insurance And COVID-19

Business interruption insurance is typically part of a business owner’s commercial property coverage or may be a stand-alone policy. Regardless, business interruption insurance helps a business cover bills and payroll in the event of a disaster that forces the business to temporarily close.

In the face of the coronavirus pandemic, several business owners have been required to close by specific orders from state and local governments. Consequently, these owners have been reviewing their insurance policies to determine if business interruption coverage may provide some relief during the shutdown. However, whether a policy provides business interruption coverage for coronavirus closures depends on the language of the policy.

Most insurance policies that cover businesses’ lost income and expenses contain a requirement for physical damage or loss. Thus, a key issue in whether a business interruption claim will be covered is whether potential contamination by a virus satisfies the necessary “physical loss or damage.” Additionally, after viral outbreaks in the early 2000s, the insurance industry, often without notice to policyholders, added exclusions to their commercial property and business interruption policies to preclude coverage for losses related to viral outbreaks. Whether a policy’s exclusions for pollutants, biological agents, bacteria, microorganisms, or viruses applies to the current environment is another critical issue to be determined. Most likely this type exclusion was never discussed by the insurance companies with policyholders, nor was any official notice given by the insurance companies.

Several businesses have filed lawsuits seeking a declaratory judgment that their losses due to the COVID-19 shutdown are covered under their policies. Others, who have already been denied coverage, have filed suit against their insurers for breach of contract and bad faith failure to pay their claims.

In an effort to ensure coverage for COVID-19 business interruption claims, powerful members of Congress have urged the insurance industry to cover and pay such claims, adding that coverage would help sustain America’s businesses through these turbulent times. President Trump has also voiced his belief that the exclusions should not apply and that the insurance policies should pay for the interruption in business losses. Many times, businesses were later closed by government order, even though the virus had been present for weeks. The actual closing of businesses came about solely because of an order by a governor or mayor. The business owners say their businesses was only closed by such orders and not because of the virus.

However, the business of insurance is regulated by the states by virtue of the McCarren-Ferguson Act of 1945; thus, it’s up to the states to pass any meaningful legislation to ensure coverage for “business interruption” losses if the companies fail to rise to the occasion. Actually, several states have introduced legislation to require insurance companies to assist businesses impacted by COVID-19. This is a developing issue.

Lawyers in our firm are actively investigating and pursuing claims against various insurance companies for denial of business interruption coverage during the COVID-19 pandemic. Dee Miles, head of our Consumer Fraud & Commercial Litigation Section, Rachel Boyd and Paul Evans are spearheading this litigation for our firm. They can be contacted at Dee.Miles@beasleyallen.com, Rachel.Boyd@beasleyallen.com, or Paul.Evans@beasleyallen.com if you have any questions or would like to discuss potential claims.

Appeals Courts Agree ‘Labor Cost’ Can’t Be Depreciated On Property Claims

In March 2020, the Fifth and Sixth Circuit Courts of Appeals ruled favorably for property insurance policyholders in separate class actions alleging that their insurance companies improperly depreciated the costs of labor when calculating the actual cash value of their property damage claims. In Mitchell v. State Farm Fire; Cas. Co., the Fifth Circuit held that “actual cash value” was ambiguous as to labor depreciation and affirmed the district court’s order certifying a class of policyholders whose actual cash value payments had labor depreciation withheld. – F.3d –, No. 18-60776, 2020 WL 1503107 (5th Cir. Mar. 30, 2020). Likewise, in Perry v. Allstate Indemnity Co., the Sixth Circuit reversed the judgment of the district court, which failed to see the ambiguity created by the undefined term “actual cash value.” No. 18-4267, 2020 WL 1284960 (6th Cir. Mar. 18, 2020).

Both of these cases involved policyholders who submitted claims under their property insurance policies for damages their properties sustained. In Mitchell, the insured property was damaged by a storm while the insured property in Perry sustained water damage.

Neither State Farm nor Allstate denied that the losses were covered under the policyholder’s policies. Under the policies, the insurers settled claims on an “actual cash value” basis, meaning the amount of the loss was determined by subtracting depreciation from the cost to repair or replace the damaged property. Neither of the policies at issue in the cases defined “actual cash value” and both were silent regarding labor depreciation, but the policy in Perry stated that “there may be a deduction for depreciation” when determining actual case value. When calculating the actual cash value of the policyholders’ losses, the insurers in both cases depreciated both the materials and labor costs associated with the property damages, thereby reducing the amount of the policyholders’ actual cash value payments for the damage to their properties.

The policyholder in Mitchell brought a class action in the United States District Court Northern District of Mississippi while the policyholder in Perry brought a class action in the Northern District of Ohio. Both policyholders alleged that the insurers’ depreciation of labor costs when calculating the actual cash values of the policyholders’ property loss claims constituted breach of contract. The policyholder argued the policies were ambiguous as to whether depreciation applied to labor costs such that the insurers breached their contracts by withholding labor depreciation from their actual cash value payments. Further, the policyholder in Mitchell alleged bad faith, negligent withholding of insurance payment, and fraudulent concealment.

When interpreting the policies and deciding whether “actual cash value” was an ambiguous term with respect to labor depreciation, the Fifth Circuit court in Mitchell applied Mississippi law while the Sixth Circuit court in Perry applied Ohio law. The Fifth and Sixth Circuits held that “actual cash value” is susceptible to multiple reasonable interpretations as to whether depreciation includes labor costs such that it is an ambiguous term that must be construed against the insurers.

Both circuit courts found relevant that the policies did not define actual cash value and were silent concerning labor depreciation. Accordingly, in Mitchell, the Fifth Circuit affirmed the Northern District of Mississippi’s denial of State Farm’s motion to dismiss the policyholder’s breach of contract claim. Likewise, in Perry, the Sixth Circuit reversed and remanded the Northern District of Ohio’s decision to dismiss the policyholder’s breach of contract claim.

Further, the Fifth Circuit in Mitchell affirmed the Northern District of Mississippi’s order certifying a class of policyholders with respect to their breach of contract claim. The Fifth Circuit reasoned that the predominant issue in the case was whether State Farm was permitted to depreciate labor costs, which was common to all class members. The Fifth Circuit notably rejected State Farm’s argument that this common question would be overshadowed by individualized damages issues and reasoned that calculating the amount of labor depreciation withheld from class members’ actual cash value payments was susceptible to a mathematical or formulaic calculation.

Although the Fifth Circuit affirmed class certification as to the breach of contract claim, the court held that the issue of class certification of the policyholder’s bad faith and negligence claims were moot. The court reasoned the bad faith and negligence claims were due to be dismissed because State Farm had an arguable basis for withholding labor depreciation from the policyholder’s property claim since the law was unsettled at the time of the withholding.

Beasley Allen lawyers are handling class actions involving insurance companies undervaluing property claims by depreciating labor costs, which results in policyholders being underpaid – or not being paid at all – for their property damage claims. If you or a client have made a claim for property damage under a homeowners, dwelling, manufactured home, or similar policy in the last six years, consider having a lawyer review the insurance policy and an adjuster’s estimate to determine if the claim was underpaid due to labor depreciation. Contact Dee Miles, Paul Evans or Rachel Boyd, lawyers in our Consumer Fraud & Commercial Litigation Section, by phone at 800-898-2034 or by email at Dee.Miles@beasleyallen.com, Paul.Evans@beasleyallen.com, or Rachel.Boyd@beasleyallen.com.

PREMISES LIABILITY UPDATE

Mother of Victimized Child Receives Substantial Settlement From Apartment Complex

On May 31, 2017, Naomi Jones went missing from her Aspen Village Apartment complex in north Pensacola, Florida. Five days later, her body was tragically discovered in the Escambia Creek nearby. In what can only be described as a parent’s worst nightmare, Naomi’s mother, Shantara Hurry, would later learn the gruesome truth – her daughter had been abducted from their apartment by a convicted sex offender, Robert Howard.

Howard had been living part-time with his girlfriend in the Aspen Village apartment complex at the time of the abduction. Previously, in 1998, Howard was convicted of two counts of rape in neighboring Escambia County, Alabama. He awaits trial, now postponed as a result of the coronavirus pandemic, after having been arrested for Naomi’s disappearance.

A year after Naomi’s death, her mother filed a negligent security lawsuit against Aspen Village Acquisition LLC, the owner of the complex, and Progressive Management of America Inc. In December of 2018, Ms. Hurry said in a press conference that the apartment complex knew there was a sex offender living there. “I would like them to be more concerned about their children’s safety. There is no reason why a child should live and dwell somewhere and not know about the unknown dangers around them,” she told reporters at the time.

In her lawsuit, Ms. Hurry said that the owner and manager of the apartment complex had a duty to know and inform residents that Howard was living on the premises. But because families who lived in Aspen Village weren’t made aware of the situation, Howard had “unfettered access” to their children and other potential victims.

While some apartment complexes do the right thing and put measures in place to protect their tenants, many do the bare minimum or nothing at all, compromising the safety and security of their tenants. In most states, complexes have a responsibility to take reasonable measures to ensure their tenants are safe from foreseeable dangers.

These measures can include properly vetting tenants and apartment employees, hiring a security guard, installing cameras, performing basic maintenance to the grounds, installing proper lighting, setting up a neighborhood watch program, and having solid policies and procedures in place that ensure the complex is properly managed.

In cases that Beasley Allen lawyers handle, we often find that none of these very basic measures are incorporated even though the complex has a history of rampant crime. Unfortunately, it appears the complex in Naomi’s case had critical security flaws that allowed a sex predator to prey on Naomi.

Ultimately, Ms. Hurry agreed to settle her case with the complex for $2 million. Her lawyers did a great job on her behalf. Christopher Marlowe with Haggard Law Firm in Miami handled her case.

At Beasley Allen, our lawyers are investigating or handling cases across the country where a person was victimized and severely injured or killed as a result of negligent security. If you have any questions about negligent security cases, contact Parker Miller in our Atlanta Office at Parker.Miller@beasleyallen.com, or 800.898.2034.

Source: Pensacola News Journal

PG&E Gets Approval On Manslaughter Plea Deal For Paradise Fire

A California bankruptcy judge on April 14 approved Pacific Gas & Electric (PG&E) Corp.’s settlement with the State of California over the 2018 Camp Fire in which the utility pled guilty to 84 involuntary manslaughter counts and agreed to $4 million in fines and reimbursements, following assurances the penalties wouldn’t come from the $13.5 billion wildfire victim trust.

The settlement, approved by U.S. Bankruptcy Judge Dennis Montali, resolves criminal charges brought by the Butte County District Attorney’s Office against PG&E. An acknowledgement by PG&E that its equipment started the 2018 Camp Fire, which killed more than 80 people in Butte County, leveling the towns of Paradise and Concow as well as much of the town of Magalia, was part of the settlement agreement.

Part of the settlement was reimbursement of Butte County for funds spent on the investigation of the wildfire. The Official Committee of Tort Claimants – which represents the interests of the wildfire victims – had initially objected to the approval of the Butte County deal, saying PG&E was trying to establish a bad precedent that criminal fines may be paid from the fire victim trust.

Judge Montali agreed that the payment configuration didn’t look right, writing in a tentative order issued on April 10 that he would approve the settlement if PG&E amended its proposed order to ensure that there is not even an appearance that wildfire victims are paying the utility’s criminal penalties. Judge Montali wrote:

Telling fire victims that their money will be used to pay criminal fines and penalties does not look right. … Nor does saying to people who lost their homes and their loved ones that $4 million is ‘de minimis.’ This not only looks wrong, it is wrong.

PG&E assured the judge during the April 14 hearing that the $4 million fine and reimbursement it owes to Butte County under the settlement would come from accrued interest on the subrogation claimants’ escrow account and not from the $13.5 billion fire victim trust.

You will recall that PG&E filed for Chapter 11 protection in January 2019, because of an estimated $30 billion in potential liabilities tied to its role in causing wildfires that killed 130 people and destroyed billions of dollars in property in 2017 and 2018. The November 2018 Camp Fire is California’s most destructive fire, burning more than 153,000 acres and over 18,800 structures.

Survivors of the fire will still be eligible to receive compensation from the fire victim trust. PG&E said in the statement:

There will be no impact on the amount available for wildfire victims. The approximately $4 million fine is separate from, and in addition to, the more than $500 million PG&E will pay to Butte County agencies under our plan as part of last year’s $1 billion settlement with cities, counties and other public entities.

PG&E said it has reached $25.5 billion in settlements with all groups of victims from wildfires in 2015, 2017, and 2018 and noted that $13.5 billion of that is earmarked for the fire victim trust. While the Butte County agreement has been approved, hurdles remain for PG&E. The tort claimants committee rescinded its support of the $13.5 billion settlement with wildfire victims in early April, citing concerns with the equity-funded portion of the deal in light of the coronavirus pandemic.

If PG&E’s reorganization plan is not confirmed by June 30, the utility is unlikely to qualify for a $21 billion state wildfire insurance plan created by a California statute. The wildfire victims have until May 15 to vote on whether to confirm PG&E’s bankruptcy plan. The tort claimants committee declined Law360’s request for comment.

The bondholders are represented by Michael S. Stamer, Ira S. Dizengoff, David H. Botter, Abid Qureshi and Ashley Vinson Crawford of Akin Gump Strauss Hauer & Feld LLP. The tort claimants are represented by Robert A. Julian, Cecily A. Dumas, Eric E. Sagerman and Lauren T. Attard of BakerHostetler.

The case is In re: PG&E Corp., (case number 3:19-bk-30088) in the U.S. Bankruptcy Court for the Northern District of California.

Source: Law360.com

Settlement In Burn Case Against Wawa

Wawa has agreed to pay $3 million to the family of a child who suffered second- and third-degree burns after hot water spilled on her at a New Jersey store. The incident happened in April 2018 in Neptune, near the Jersey Shore. The convenience store company and the child’s family have reached a settlement in the case.

Roya Konzman, of Virginia, was in the store with her daughter buying items that included two cups of hot water for tea. According to the lawsuit filed against the convenience store chain, the clerk at the register knocked over a bottle of water as he was bagging Ms. Konzman’s items, causing the cups of hot water to spill. The lawsuit states: “The cup immediately burst, causing its top to come off and hot water to splash all over N.K.’s upper body, arms and torso.”

The child, only identified in the complaint as N.K., suffered second- and third-degree burns. The child, who was 3 years old at the time, was rushed to the hospital. The lawsuit says that Wawa was aware that the hot water from its machines was at a “highly dangerous temperature” and would cause significant injury if the water spilled on a person. The suit states:

Despite being aware of this serious danger, Wawa kept the water at such a dangerously high temperature and acted recklessly and with wanton and disregard for the safety of its patrons, including N.K.

Under the settlement, the child will receive $2.55 million to be split into a trust and an annuity plan. Her mother will receive $450,000 for her emotional distress.

Source: NBC News

WORKPLACE HAZARDS

Workplace Safety- Silos Entrapment And Engulfment

Entrapment in silos and other confined spaces in the agricultural setting kills many American workers each year. Although the death rate from workplace accidents on farms has steadily declined in recent years, entrapment deaths have not. In fact, the number of such deaths peaked in 2010 with 26 reported deaths caused by entrapment. Often times, these deaths are completely preventable. Entrapment and engulfment in silos and grain bins typically occurs when grain or other loose debris suddenly collapses, trapping the worker. Engulfment incidents have a high fatality rate. What is more alarming is the rate of death amongst minors in this setting.

Grain entrapment or engulfment occurs when a worker becomes submerged in grain. Most commonly, the worker is in a grain bin or silo when unstable grain wholly or partially buries the person. These incidents often occur when a worker is either “walking down the grain,” a process where the worker is in the silo or bin and is on top of the grain to help the flow out of the bottom of the reservoir, or while cleaning out silos or bins that have grain caked to the sides. “Grain Bridges” can form where an area beneath the seemingly stable grain has settled below. The “bridge” will give way under the weight of the person, causing the grain to settle downward, engulfing the worker. The collapsing grain acts like “quicksand” pulling the worker underneath the grain in seconds. If grain spoils or has too much moisture, it can stick or cake to the interior walls of the bins or silos. Workers are often asked to enter the silos and break the caked grain from the sides. The grain can collapse in on the worker, submerging them. Once engulfed, the worker will suffocate in a matter of minutes. The grain is often aspirated, obstructing the victim’s airways.

The best way to prevent entrapment is a total prevention of workers entering grain silos or bins. If a worker must enter a silo, there must be a proper procedure for preventing the threat of entrapment. The Occupational Safety and Health Administration (OSHA) requires employees that enter a grain silo be attached to a lifeline, and have another employee observe them in case a collapse occurs. Should a collapse occur, the worker can quickly be lifted to safety.

Engulfment and entrapment injuries and deaths are not limited to the agricultural setting. Often, industrial facilities will store various materials such as silica or metal ore in silos as well. Similar entrapments and deaths may occur any time a worker is in a silo or bin with loose particulate. Likewise, the OSHA standards for agricultural settings requiring lifelines and observers are required.

If you need more information, contact Evan Allen, a lawyer in our firm’s Personal Injury & Product Liability Section, at 800-898-2034 or by email at Evan.Allen@beasleyallen.com. Evan handles workplace litigation involving deaths and serious injuries.

Source: The New York Times and https://en.wikipedia.org/wiki/Grain_entrapment

AN UPDATE ON MOTOR VEHICLE LITIGATION

GM Brake Defect Class Action Filed For Truck And SUV Owners

Beasley Allen lawyers Clay Barnett and Mitch Williams, along with the law firms of Cory Watson, P.C., Kiesel Law LLP, Wyly~Rommel, PLLC, and Cuneo Gilbert &LaDuca, LLP, represent Plaintiffs in a brake defect class action lawsuit. The litigation, filed in a Florida federal court, involves defective braking systems in 2014-2018 full-sized SUVs and trucks.

The lawsuit alleges the mechanical pulley-driven vacuum pump installed in the Class Vehicles can suddenly and unexpectedly fail prematurely. Drivers report a hard brake pedal and decreased braking capabilities, particularly at low speed operation, which dramatically increases the risk for injury.

Consumer complaints filed with the National Highway Traffic Safety Administration (NHTSA) are in the hundreds, where drivers consistently report a stiff/hard brake pedal that requires multiple times the normal leg force needed to activate the hydraulic brakes. Some drivers report a simultaneous dashboard alert that the brake assist system requires servicing.

GM recalled nearly 2.5 million Class Vehicles in September 2019. The announcement comes nearly a year after NHTSA opened a preliminary investigation of the problem in response to reports of crashes linked to the defect. GM’s recall involves reprogramming the Anti-lock Braking System computer. This is inadequate. Clay Barnett, who practices in our firm’s Atlanta office, says:

While it is good that GM publicly acknowledged the defect and its inherent safety risk, they’ve misled Americans by implying that they can remedy a mechanical brake failure with an electronic software patch. Ultimately, the failing mechanical vacuum pump at the heart of the defect should be replaced with a more robust unit. GM knows that a software update cannot compensate for a physically worn mechanical pump.

Consumer complaints filed with NHTSA document instances where consumers received the recall repair but continue to experience hard brake pedal and decreased braking abilities. The following is one of the complaints:

I experienced a hard brake pedal at low speed with minimal stopping prior to the vehicle being recalled for the brake vacuum pump issue that was to reprogram the electronic brake control module. The recall has been performed in early December 2019 and since the recall I’ve experienced the hard brake pedal with increased stopping distance several times at low speed and in one particular instance a trailer was in tow as I was maneuvering into a parking spot. The recall in my opinion was not the actual solution to a potentially dangerous issue.

Operators of these vehicles should pay close attention to the braking capabilities before and after receiving the Recall software update. The case is Jason Compton v. General Motors LLC; (1:19-cv-00033-AW-GRJ) filed in the U.S. District Court, Northern District of Florida. If you need additional information, contact Clay or Mitch at 800-898-2034 or by email at Clay.Barnett@beasleyallen.com or Mitch.Williams@beasleyallen.com.

Rulings In Opt-Out Volkswagen Drivers’ Case

A California federal judge has reduced to $23,000 the total punitive damages awarded to five Volkswagen drivers in the German automaker’s first U.S. trial over its “clean diesel” emissions cheating scandal. The drivers’ bid for a mistrial was also denied. U.S. District Judge Charles Breyer reduced a federal jury’s $100,000 punitive damages award to $23,000, saying the earlier amount crossed “the line of constitutional impropriety.” Judge Breyer also rejected the drivers’ mistrial motion, saying there was no judicial bias in how he oversaw the first phase of the bellwether trial.

We wrote last month about Judge Breyer’s omnibus order issued on April 10, agreeing with Volkswagen on three out of four outstanding issues arising from the German automaker’s first U.S. trial involving the “clean diesel” emissions-cheating scandal. The bellwether trial was split into two phases: one for compensatory, or economic, damages, and one for punitive damages. The trial involved claims from 10 people who bought or leased Volkswagen and Audi turbocharged direct injection, or TDI, vehicles, and who had opted out of Volkswagen’s previous consumer settlements in sprawling multidistrict litigation (MDL) overseen by Judge Breyer related to the scandal. But the jury awarded damages to only five of them.

After weighing the parties’ arguments over punitive damages and agreeing that Volkswagen’s emissions cheating scheme was reprehensible and egregious, Judge Breyer concluded that he was constitutionally bound to reduce the punitive amounts to four times what the drivers were awarded in compensatory damages.

According to the order punitive damages for Luke and Kathryn Sanwick are now reduced to $12,532, Timothy Riley is now at $4,320, Julia Robertson now gets $3,808, and Scott Salzer receives $2,328. Those amounts are a fraction of the $25,000 they were each awarded in punitive damages in March. Judge Breyer said:

The misconduct plaintiffs complain of succeeded; relying on Volkswagen’s fraudulent representations, plaintiffs purchased Volkswagen’s cars. There is no need for the court to try to guess at the harm that fraud might have caused – the jury evaluated the harm it did cause. The court concludes that even in light of Volkswagen’s egregious misconduct, a punitive damages award four times the compensatory damages award is the most the Constitution will allow.

Judge Breyer also denied the drivers’ mistrial motion, which accused the judge of exhibiting “overt hostility” toward them while assuming an “advocacy-type role” for Volkswagen.

This order also concluded that Volkswagen asserted a valid defense to the drivers’ claim for damages under California’s Consumers Legal Remedies Act. Volkswagen had argued that the two class settlements it paid out to consumers in 2016 and 2017 – one concerning 2.0-liter TDI vehicles and another for 3.0-liter TDI vehicles – offered appropriate enough remedies or “correction offers” for the consumers’ alleged harms. Those settlements had offered consumers vehicle buybacks, cash restitution payments, emissions-compliant repairs and extended emissions warranties, among other things.

Volkswagen admitted in 2015 that it rigged thousands of diesel vehicles with special software – so-called defeat devices – to fool regulators’ tests while allowing for emissions to spike during normal driving conditions. It has since paid more than $20 billion to resolve civil claims by the U.S. Department of Justice, the U.S. Environmental Protection Agency, the California Air Resources Board, the Federal Trade Commission, states, and class action consumer Plaintiffs in connection with the emissions scandal.

The drivers are represented by Robert S. Peck of the Center for Constitutional litigation PC, Lauren Ungs and Scot Wilson of Knight Law Group and Bryan C. Altman of the Altman Law Group.

The MDL is In re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation (case number 3:15-md-02672) in the U.S. District Court for the Northern District of California.

Source: Law360.com

Volkswagen’s Dieselgate Scandal Moves To Europe

While Volkswagen has for the most part resolved its litigation in the United States on using “cheat devices” to fool regulators on exhaust emissions tests in its diesel engine products (Dieselgate) and some gasoline engine products, Volkswagen may now face litigation for Dieselgate in European national courts other than just Germany.

Advocate General Capos Sanchez-Bordona issued a nonbinding legal opinion to the European Court of Justice stating Volkswagen can be sued in the country where the vehicles were purchased: “a company can be sued by the purchasers of vehicles that it manipulated before the courts of the member state where the vehicles were purchased.”

The opinion responded to a request from an Austrian court to determine whether it has international jurisdiction to hear a case brought by an Austrian consumer group on behalf of 574 owners of vehicles installed with emissions cheating software. The lawsuit arises after Volkswagen’s admission in September 2015 it conspired to hide so-called cheat defect devices designed to cheat pollution tests.

Under the general rule on international jurisdiction, companies should only be sued in courts where the Defendant is domiciled. If that were the case, the Dieselgate cases should only be brought in German courts. However, Sanchez-Bordona said it is possible for tort cases to be brought in national courts where the alleged damage occurred:

The applicant can choose between the court of the place where the damage occurred, or the court of the place where the event giving rise to the harm occurred, since it is assumed that both places have a significant connection to the dispute.

If the advocate general’s opinion is followed, it could mean Volkswagen and other automakers could face lawsuits across Europe from consumers who claim they overpaid for the vehicles – not only in Dieselgate, but in also future cases.

In the United States back in October of 2016, VW settled these “dieselgate” claims with the Environmental Protection Agency, the Federal Trade Commission, the Department of Justice, the California Air Resources Board (CARB) and several consumer class actions for roughly $15 billion. Our firm, led by Dee Miles and Clay Barnett, was honored to serve as class counsel with 20 other distinguished law firms to attain this historical settlement but, unfortunately for VW, its troubles are not yet behind it. We will keep our readers posted on any new developments.

Source: Law360.com

Class Action Lawsuit Filed Against Automaker Involving Brake Defect

A lawsuit has been filed against Toyota alleging several models of its cars have a brake defect. The class action lawsuit affects 2010 to 2015 Prius or Prius PHV, 2012 to 2015 Prius V, 2012 to 2014 Camry Hybrid, and 2013 to 2015 Avalon Hybrid vehicle owners.

In the suit, which was filed on April 4, owners of the Toyota cars contend that the braking system intermittently fails, increasing the risk of a crash, injury or fatality. The alleged brake defect is said to occur in new or almost new vehicles, especially when driving on bumpy or slick surfaces such as potholes or ice.

According to the lawsuit, the brake defect stems from the brake booster pump assembly, which can fail to operate and ensure that the brakes engage when the brake pedal is depressed. Reportedly, hundreds of thousands of Toyota vehicles are susceptible to this dangerous defect.

Reports to the National Highway Traffic Safety Administration (NHTSA) by drivers of the affected Toyota vehicles cited the braking issue. One vehicle owner said:

My brakes consistently lock and the car lunges forward…This caused a crash when the car was only a couple years old when the brakes failed to stop the vehicle and it lunged forward into the back of a car. This is extremely dangerous and I’ve seen this comment often with this vehicle. I don’t understand why Toyota has not addressed this issue.

Another Toyota owner reported to the NHTSA:

Driving vehicle down highway, tapped brakes but brakes did not work, all the lights on my dash lit up. I lost traction in brakes causing vehicle to lose control.

The class action lawsuit is seeking both monetary reimbursement for anyone that has purchased or leased the affected Avalon, Camry or Prius vehicles as well as a court action barring Toyota from continuing to sell the cars with the defective brake system. The Seattle firm Hagens Berman Sobol Shapiro LLP, is handling this lawsuit.

Source: ibtimes.com

TOXIC TORT LITIGATION CONCERNS

PFAS Confirmed Or Suspected At 678 Military Installations Nationwide

The group of toxic chemicals known as PFAS have been found or are suspected to exist in ground and surface water at 678 military installations across the U.S., according to the Environmental Working Group (EWG).

As we have previously explained, PFAS are called “forever chemicals” because they don’t break down in the environment and accumulate in the human body over years. Research shows they increase the risk of cancer, kidney disease, thyroid conditions and auto-immune disorders. In 2016, the EPA set a lifetime health advisory of 70 parts per trillion for PFOS and PFOA, the two most common PFAS.

The EWG’s findings on the military base were based on records maintained by the Defense Department (DOD), which has used aqueous film forming foam (AFFF) to fight fires in training exercises at numerous military installations. The EWG concluded that 28 bases had PFAS in drinking water at levels above the applicable levels set by state regulators. Despite their toxicity, PFAS are not regulated by the EPA, so states have had to lead the way in establishing exposure limits to protect their citizens.

Many of the nation’s highest levels of groundwater contamination have been found at military bases. As of last October, 64 bases and civilian airports hosting National Guard units measured PFAS levels exceeding 100,000 parts per trillion in groundwater. While not all these measurements were taken from drinking water sources, PFAS are extremely mobile in the environment and could eventually contaminate those sources.

Michigan Congressman Dan Kildee co-signed a letter to the chairman and ranking member of the House Armed Services Committee, asking for specific measures to address PFAS chemicals affecting communities and service members. The request included requiring the EPA to create a drinking water standard PFOA and PFOS within two years, blood testing for all DOD personnel and dependents who may have been exposed to PFAS, and increased protections for military firefighters.

As the public learns more about the extent of PFAS contamination, lawsuits have been filed by a variety of Plaintiffs including residents whose drinking water has been contaminated, water systems that require additional filtration to remove PFAS, and firefighters who have used AFFF and have been diagnosed with one of the associated diseases.

Nearly 500 lawsuits involving exposure to PFAS through AFFF have been consolidated into a multidistrict litigation (MDL) before U.S. District Court Judge Richard Mark Gergel in the District of South Carolina. Discovery is ongoing in the MDL with the parties providing the Court with updates monthly.

However, the MDL does not oversee many other PFAS-related lawsuits alleging exposure to the toxic chemicals from non-AFFF sources. These include those filed against chemical companies that manufacture the chemicals and industries that apply the chemicals to a variety of consumer products.

One industry that relies heavily on PFAS is the carpet manufacturing industry, which uses the chemicals to impart water-, stain- and soil-resistance to its flooring products. Lawyers in our firm, along with Roger H. Bedford of Roger Bedford & Associates, have filed lawsuits on behalf of the water systems in Gadsden and Centre, Alabama. These lawsuits allege that carpet and textile companies, manufacturers, and chemical suppliers located upstream in Dalton, Georgia, are responsible for contaminating the Coosa River and Weiss Lake. The lawsuits were filed to ensure that these entities, not ratepayers in Gadsden and Centre, would pay to decontaminate their drinking water.

Beasley Allen lawyers in our Toxic Torts Section are investigating other PFC contamination cases. If you have any questions, contact Rhon Jones, Rick Stratton, or Ryan Kral, lawyers in the Section, at 800-898-2034 or by email at Rhon.Jones@beasleyallen.com, Rick.Stratton@beasleyallen.com, or Ryan.Kral@beasleyallen.com.

Source: MLIVE.com, Environmental Working Group

UPDATE ON NURSING HOME LITIGATION

Georgia National Guard Disinfecting Nursing Homes Across The State

The Georgia National Guard has been deployed to assisted living facilities and nursing homes to help fight the spread of COVID-19. One hundred guardsmen were sent to specific locations across the state to implement infection control protocols and enhanced sanitation methods.

On March 31, 20 soldiers headed to the Pelham Parkway Nursing Home, where five confirmed cases have been reported. Also, 44 National Guardsmen went to Phoebe-Putney Memorial Hospital in Albany to help with the response there.

Long-term care residents are vulnerable to illnesses that can be caused or exacerbated by COVID-19. The Georgia Department of Public Health says the number of cases in these facilities grows daily. Among the precautions advised by the health department is frequent cleaning with disinfectants registered by the Environmental Protection Agency (EPA). Col. John Till, safety officer for the Georgia Department of Defense, who is training the teams, said:

Our mission is to assist in disinfecting nursing homes. We are going to help decontaminate and disinfect rooms in which these citizens are quarantined to prevent the spread of the coronavirus.

Col. Till and members of his team use a disinfectant process that incorporates a solution approved by the EPA, following protocols of the Centers for Disease Control and Prevention (CDC) and the Health Department. Col. Till said his team has used the process to safely disinfect five buildings and more than 150 rooms and Georgia Guard facilities.

The Georgia National Guard expects to send additional teams to nursing homes in south and northwest Georgia while continuing to work with state government and public and private institutions to save lives and alleviate suffering.

Sources: WSBTV and National Guard

The Beasley Allen Nursing Home Litigation Team

Alyssa Baskam in our Atlanta office heads Beasley Allen’s Nursing Home Litigation Team. Currently, Susan Anderson and Andrea Linnear also serve on the team. In order to properly handle nursing home litigation, lawyers and support staff must have specific experience and expertise in this type case.

Alyssa and other members of her team are dedicated to representing the elderly and infirm who can’t fight back when they suffer at the hands of inadequate care and deficient inpatient facilities. If you have a case involving abuse or neglect at a nursing home or other inpatient facility, we would like to talk with you about working together on the case. You can contact Alyssa, Susan or Andrea at 800-898-2034 or by email at Alyssa.Baskam@beasleyallen.com, Susan.Anderson@beasleyallen.com or Andrea.Linnear@beasleyallen.com.

An Update On Class Action Litigation

Class Certified In GM Truck And SUV Engine Defect Case

United States District Judge Edward M. Chen of the Northern District of California certified a class action lawsuit filed by Beasley Allen lawyers on behalf of owners and lessees of GM full-sized SUVs and trucks that suffer premature engine failure from excessive oil consumption.

Our clients allege that their GM’s Generation Four Vortec 5300 V-8 engines consume oil in such high volume that they foul spark plugs and aggressively wear internal rotating components from inadequately lubricated metal-on-metal contact. GM’s documents and witnesses confirm that the excessive oil consumption defect lies in piston rings that wore prematurely and allowed oil to aggressively migrate into the combustion chambers and burn away.

The worn rings also allowed excessive combustion gases to pass into the oil pan, where they blended with oil and traveled back the engine’s intake via the engine’s combustion vapor recirculation system. This excessive oil recirculation process fouled spark plugs, weakening the ignition system in some vehicles to the point of engine shutdown. Compounding the problem, the vehicles’ instruments do not warn drivers of falling oil levels until the engines are oil starved to the point of suffering internal damage.

GM long knew of the oil consumption defect but failed to warn consumers either before or after purchase. In certifying the Plaintiffs’ class, Judge Chen stated, “GM was aware of an oil consumption problem with the Gen IV engines as early as the end of 2008 or early 2009.”

Further, in his rejection of GM’s contention that it repaired owners’ engines with a low-cost engine cleaning procedure, Judge Chen stated:

Despite the fact that GM knew that the [repair] was ineffective by February 2010, it still directed servicers of GM vehicles to complete the procedure as part of the recommended response to oil consumption problems without addressing the root problem.

Importantly, Judge Chen acknowledged the severity of the defect, stating:

There is evidence upon which a reasonable jury could rely to conclude that the alleged Oil Consumption Defect constitutes a safety defect.

In affirmation of Plaintiffs’ claims that the oil consumption defect is dangerous and widespread, Judge Chen certified Plaintiffs’ class of more than 830,000 2011-2014 GM pickups and SUVs. Judge Chen certified class claims for three bellwether Plaintiffs – California, North Carolina and Texas – as the parties agreed at the outset of the litigation to pursue a bellwether Plaintiff model for purposes of efficiency and manageability of the class case.

Clay Barnett, who works in our firm’s Atlanta office, is one of the Beasley Allen lawyers with the technical and mechanical skills required to fully understand engines and how they work. He had this to say:

In an effort to squeeze more power and fuel mileage out of an established GM V-8 platform, GM overcomplicated an otherwise simple design and created an engine that self-destructed typically before the warranty expired.

Dee Miles, who heads up our Consumer Fraud & Commercial Litigation Section, says:

We are pleased that the Court recognized the severity of this serious engine problem and GM’s attempt to cover up the defect. We’re also pleased that Judge Chen viewed the issues in this case as best suited for class-wide treatment.

The case is Montville Sloan, Jr. et al. v. General Motors LLC, (Case 3:16-cv-07244-EMC) and is being handled by Beasley Allen lawyers Dee Miles, Clay Barnett, Leslie Pescia and Mitch Williams, along with lawyers from Dicello Levitt Gutzler in Chicago, Illinois, and Andrus and Anderson in San Francisco, California. If you need more information contact Clay Barnett at 800-898-2034 or by email at Clay.Barnett@beasleyallen.com.

Robinhood Online Trading System Fails, Blindsiding Investors At Market Peaks

On April 16, Beasley Allen lawyers filed a class action lawsuit on behalf of all users of the Robinhood online trading platform after the FinTech company’s trading software failed, causing outages that left investors locked out of their accounts during major market moves. Our Consumer Fraud & Commercial Litigation Section lawyers Dee Miles, James Eubank and Leslie Pescia partnered with Jennie Anderson of Andrus Anderson, LLP to represent the investors. Dee Miles, who heads the Section, had this to say:

Robinhood has spent millions on advertising to attract investors but failed to build an adequate system to handle the clients they gained. When it failed, Robinhood clients watched helplessly with no backup method to access their investments and protect their savings.

Robinhood, founded in 2013, brought millions of users to its online trading service with the promise of commission-free trades that save money for investors and account access through a computer or mobile device. Instead of charging trade commissions, Robinhood makes money in a number of other ways. It charges for premium “Gold” memberships and collects interest on idle cash and margin loan balances. But according to revenue estimates, half of Robinhood’s revenue comes from payments from high frequency trading firms who purchase the right to fill Robinhood client orders.

COVID-19 concerns began to rattle U.S. stock markets in late February. Approximately three minutes after markets opened on March 2, Robinhood’s tech infrastructure failed causing a system-wide outage that blocked all users from their accounts. Robinhood had no backup system and no live brokers to handle orders in the event of an outage. After Robinhood failed, U.S. markets surged all day, with the Dow Jones Industrial Average logging its largest single-day point gain in Dow history at the time. The system failed again for parts of the trading days on March 3 and March 9.

The lawsuit, filed in the Northern District of California where Robinhood is headquartered, alleges that Robinhood breached its contract to provide safe and secure investing services to its clients. It further alleges that Robinhood was grossly negligent for not anticipating the demand and for having no contingencies for outages in the form of either backup computer systems or personnel to handle client orders.

Robinhood blamed the outage on record trading activity and record client signups, but it doesn’t add up. Trading volume was actually higher in the day before the outage, and Robinhood should be well aware of how many clients it is adding to its own service. The system simply wasn’t adequately designed and failed when it was needed most. The outages show it focused more on revenue generation than investor safety, and no one was warned of the risk. In this lawsuit, we will hold Robinhood accountable and ensure that investor protection is prioritized.

The proposed class consists of all Robinhood users at the time of the outage. The exact number is not known, but Robinhood announced on Dec. 4, 2019, that the service had reached 10 million users.

The class action lawsuit, Gwaltney v. Robinhood Markets, Inc., et al. was filed in the United States District Court for the Northern District of California, (case number 3:20-cv-02665). We will keep our readers posted as this case develops.

There Will Be A Huge Number Of COVID-19 Class Actions

As the COVID-19 pandemic continues to unfold across America, Beasley Allen lawyers in our Consumer Fraud & Commercial Litigation Section believe there will be a tremendous number of class action lawsuits filed nationwide. They will be over everything from commercial and employment disputes to outright consumer fraud. There have already been several coronavirus-related cases filed over a range of claims, including exposure to the virus itself and alleged finance and securities frauds stemming from companies’ failure to provide COVID-19 disclosures.

Because of the highly infectious nature of the coronavirus, class actions may be the best vehicle for bringing such claims, because they allow people who are impacted to band together and take on a big corporation or Defendant.

Consumer class actions stemming from alleged price gouging, antitrust violations such as competitors agreeing on minimum prices, and consumer fraud claims are anticipated.

In addition to consumer matters, businesses are also coping with layoffs, financial losses and physical injuries, which can all give rise to class actions. If you need more information, contact Dee Miles at Dee.Miles@beasleyallen.com, Rachel Boyd at Rachel.Boyd@beasleyallen.com or Paul Evans at Paul.Evans@beasleyallen.com, lawyers in our Consumer Fraud & Commercial Litigation Section, at 800-898-2034.

Source: Law360.com

Amazon Accused Of Illegal Price-Gouging In Class Action Lawsuit

California consumers have filed a class-action lawsuit against Amazon.com, accusing the retail giant of violating state consumer-protection laws by price-gouging during the COVID-19 public health crisis. According to the lawsuit filed last month in the U.S. District Court for the Northern District of California, the world’s largest retailer, Amazon.com, has engaged in “unconscionable” and unlawful price increases during the COVID-19 pandemic, inflating prices for essential goods by upwards of 672%.

Under California law, any price increase exceeding 10% during a state or local emergency is presumptively illegal. It’s alleged:

California law rightly prohibits profiteering from a public health crisis. Exploiting consumers in their most vulnerable hour is not only contrary to basic human decency – it is a criminal offense in California and presumptively unlawful under California’s Unfair Competition Law…Amazon’s position as a vital seller in times of contagion does not place it above the law.

Amazon cannot be allowed to take advantage of this global crisis facing all of us by profiteering on vulnerable consumers. Consumers have turned to online shopping to fulfill their essential needs, particularly as warnings mounted from the Centers for Disease Control and Prevention (CDC) and other officials to practice social distancing, stay home and shelter in place, all efforts to curb the spread of the highly contagious coronavirus. The lawsuit says:

Amazon’s sales have never been higher, and since the COVID-19 pandemic began, its sales in some categories (e.g., home items) are up more than 1000 percent.

According to the filed lawsuit, as the COVID-19 crisis has escalated, so too have Amazon’s prices for the goods consumers require to remain healthy, protected and nourished. Attorneys say that after COVID-19 was declared a public health emergency by California officials, certain Amazon prices increased as follows:

  • Face Masks: Increases exceeding 500%, from less than $20 to $120;
  • Pain Reliever: Increases of 233%, from $18.75 to $62.40;
  • Cold Remedies: Increases up to 634%, from $4.65 to $35.99;
  • Black Beans: Increases up to 672%, from $3.17 to $24.50;
  • Flour: Increases up to 400%, from $22.00 to $110.00; and
  • Disinfectants: Increase of 100%, from $14.99 to $29.99.

The lawsuit against Amazon seeks repayment to consumers for Amazon’s price-gouging, as well as injunctive relief from the court barring Amazon’s overpricing. The lawsuit was filed by the Seattle firm Hagens Berman.

Source: Business Wire

17,000-Member Class Certified In Transamerica ERISA Suit

An Iowa federal judge has certified a class of 17,000 current and former Transamerica Corp. employees in an Employee Retirement Income Security Act (ERISA) suit accusing the financial services company of “stuffing its 401(k) plan with underperforming proprietary funds.”

U.S. District Judge C.J. Williams granted a bid for class certification in the suit against Transamerica. The company didn’t oppose a class of 401(k) plan participants and beneficiaries who invested in six challenged funds since Dec. 28, 2012. Judge Williams said common issues pertained to all the class members, such as if the Defendants were fiduciaries of the plan and whether they breached their ERISA-imposed fiduciary duties. Additionally, the judge said a class of 17,000 easily met the numerosity requirement for certification.

The suit was originally filed in December 2018, accusing Transamerica of sitting by and watching as its funds underperformed their benchmarks. The employees claimed Transamerica breached its ERISA-imposed fiduciary duty of prudence by failing to remove six funds, and that it failed to monitor the 401(k) plan’s investment committee and 20 unnamed individuals expected to oversee the fund.

The now-certified class claimed to have lost hundreds of millions of dollars due to Transamerica’s alleged failure to properly manage their retirement savings. Transamerica attempted to have the suit dismissed about a year ago. But Judge Williams ruled in August that a prior $3.8 million settlement in a separate suit over excessive fees didn’t bar the claims in the instant case.

The class is represented by Charles Field, David Sanford, Alexandra Harwin, David Tracey, Paul Blankenstein and Robert Van Someren Greve of Sanford Heisler Sharp LLP.

The case is Karg et al. v. Transamerica Corp. et al., (case number 1:18-cv-00134) in the U.S. District Court for the Northern District of Iowa.

Source: Law360.com

Mylan To Face EpiPen Classification, Rebate Fraud Claims

A class action lawsuit filed by investors against Mylan NV has been allowed to proceed. Securities fraud claims by Mylan investors that the company misclassified EpiPens as generic and paid pharmacy benefit managers anticompetitive rebates will now go forward as a class action. Judge J. Paul Oetken of the U.S. District Court for the Southern District of New York issued an order saying the statute was expressly passed to prevent Mylan from misclassifying the EpiPen and other drugs by closing a loophole that Mylan was exploiting. Judge Oetken had previously ruled that the misclassification claim could proceed, but Mylan argued that the intervening adoption of the Right Rebate Act makes clear that its statements about EpiPen’s classification as a generic were ambiguous.

On the rebate issue, Judge Oetken said the Plaintiffs adequately alleged that Mylan consciously engaged in an anticompetitive scheme for the purpose of forcing a competitor out of the market, and that top executives were personally involved in pricing and thus would have been well aware of the rebates.

The Plaintiffs’ unopposed motion for class certification was granted for all purchasers of Mylan stock, excluding the company’s officers and directors and their families, between Feb. 21, 2012, and May 24, 2019.

The case is In re Mylan NV Sec. Litig., 2020 BL 128553, S.D.N.Y., No. 16-CV-7926 (JPO), 4/6/20 .

Source: Law360.com

Class Action Litigation Settlements

There have been a number of significant settlements in class action litigation around the country. We will discuss several of them below.

Monsanto To Pay $39 Million In Roundup False Ad Class Settlement

Monsanto has settled claims in a proposed class action alleging that the company falsely advertised that the active ingredient in Roundup Weed & Grass Killer only affects plants. A $39.5 million settlement was agreed to that includes changing the labels on its products. The proposed class is led by named Plaintiff Lisa Jones.

It was alleged in the February 2019 suit that Monsanto falsely claimed through its labeling that glyphosate, the active ingredient in Roundup, targets an enzyme that is only found in plants and would therefore not affect people or pets. That enzyme is found in people and pets and is critical to maintaining the immune system, digestion and brain function.

According to the motion for approval, the litigation in other cases against Monsanto over Roundup – including Blitz v. Monsanto in a Wisconsin federal court – contributed to the settlement. Discovery conducted in Blitz was applied to this case.

The Plaintiffs in Blitz made similar claims against Monsanto in June 2017. After their class certification was denied in January 2019, named Plaintiff Thomas Blitz elected to continue his action individually. Blitz has now filed a stipulation of voluntary dismissal in his case.

The proposed class in the Jones case seeks to represent all people in the U.S. who bought Roundup that included the claim that glyphosate targets only plants within the applicable statutes of limitations for false advertising or breach of warranty in their states. Of the $39.5 million settlement fund, up to $1.3 million will go to administrating the settlement.

Each class member will be able to make a claim with proof of purchase or a statement under penalty of perjury, and will receive a payment of 10% of the weighted average purchase price of the products they bought. Any funding left over after the claims are paid out will go to charitable organizations to be picked later by the parties.

In addition, Monsanto has agreed to phase out the labeling claiming glyphosate targets an enzyme found only in plants, to be replaced by a statement saying glyphosate works by targeting an enzyme that is “essential for plant growth.” Consumers who purchase Roundup with the old labeling will be eligible to make a claim under the settlement.

In a statement sent to Law360, Bayer, which owns Monsanto, confirmed the settlement, adding this settlement is not related to the product liability multidistrict litigation (MDL) against Roundup in the Northern District of California, which is currently involved in mediation with Kenneth Feinberg. Beasley Allen lawyers, led by John Tomlinson, are involved in that litigation.

In the liability MDL, as we have reported, Roundup has lost its first three trials, with juries returning multimillion-dollar verdicts against the company. The company was ordered to pay out a $78 million verdict in the first trial in San Francisco state court, $80 million in San Francisco federal litigation and $2 billion in an Oakland, California, state court case involving a married couple both diagnosed with cancer.

A fourth case involving the claim that Roundup causes cancer was getting ready to begin in January on Monsanto’s home turf in St. Louis. Settlement talks put that trial on hold. The company said publicly at the time that it wants to resolve all claims.

The proposed class is represented by Kim E. Richman and Clark A. Binkley of Richman Law Group, Bryce B. Bell and Mark W. Schmitz of Bell Law LLC and Michael L. Baum and R. Brent Wisner of Baum Hedlund Aristei & Goldman PC.

The case is Jones et al. v. Monsanto Co., (case number 4:19-cv-00102) in the U.S. District Court for the Western District of Missouri.

Source: Law360.com

Online Lender Settles Tribal Lending Suit For $141 Million

Online lender American Web Loan has agreed to a settlement worth $141 million to resolve a proposed class action accusing it and others of an illegal predatory lending scheme that exploited tribal immunity.

The settlement, which must still be approved by the court, calls for AWL Inc. to cancel tens of thousands of loans totaling $76 million and pay $65 million in cash to its U.S. borrowers going back as early as 2010. Entrepreneur Mark Curry is also required to exit as the lender’s CEO, among other provisions. The settlement would end a 2017 lawsuit filed by borrowers who have described AWL as “high-tech loan sharking designed for the digital age.”

According to the suit, this was accomplished by setting up AWL as an entity under the laws of the Otoe-Missouria Tribe of Oklahoma so the lender could claim exemption from state interest rate caps using the tribe’s sovereign immunity. But while loans were issued in AWL’s name, the borrowers alleged the company was just a front for Curry, entities he controlled and other outside investors that actually ran the operations, provided the funding for the loans and took on the associated risk but weren’t affiliated with the tribe. The borrowers said in their most recent complaint:

American Web Loan is not a legitimate arm of the tribe and tribal sovereign immunity does not shield American Web Loan or any other defendants from liability in connection with the unlawful online payday lending scheme.

The borrowers are represented by Kathleen M. Donovan-Maher, Norman Berman, Steven J. Buttacavoli and Steven L. Groopman of Berman Tabacco, Matthew B. Byrne of Gravel & Shea PC and David W. Thomas and E. Kyle McNew of MichieHamlett PLLC.

The case is Solomon et al. v. American Web Loan Inc. et al., (case number 4:17-cv-00145) in the U.S. District Court for the Eastern District of Virginia.

Source: Law360.com

JPMorgan Settles Massive 401(k) Class Action

JPMorgan Chase & Co. has settled a massive Employee Retirement Income Security Act (ERISA) class action. Approximately 250,000 current and former employees had accused the bank of profiting from its 401(k) plan at workers’ expense. The bank notified U.S. District Judge Jesse M. Furman that the case was settled. The bank is to submit settlement papers by late May.

The lawsuit, filed in 2017, accused JPMorgan, dozens of company executives and several committees that oversaw the company’s 401(k) plan of violating ERISA. The suit accused the Defendants of including expensive investment options managed by JPMorgan’s affiliates in its 401(k) plan instead of cheaper alternatives, costing the plan participants millions of dollars.

U.S. District Judge Jesse M. Furman certified the case as a class action in June. The class contained about a quarter million current and former JPMorgan workers who kept money in the company 401(k) plan.

The class is represented by Joseph H. Meltzer, Lisa M. Port and Donna Siegel Moffa of Kessler Topaz Meltzer & Check LLP, Kai Richter, Carl F. Engstrom, Jacob Schutz and Mark E. Thomson of Nichols Kaster PLL, Samuel H. Rudman and Evan J. Kaufman of Robbins Geller Rudman & Dowd LLP, David S. Preminger, Tanya Korkhov, Lynn Lincoln Sarko, Derek W. Loeser, Erin M. Riley and Gretchen S. Obrist of Keller Rohrback LLP and Shannon L. Hopkins and Stephanie Bartone of Levi & Korsinsky LLP.

The case is Beach v. JPMorgan Chase Bank et al., case number 1:17-cv-00563, in the U.S. District Court for the Southern District of New York.

Source: Law360.com

M&T Bank Workers Get Initial Approval Of $21 Million ERISA Settlement

A New York federal magistrate judge has given his initial approval to a nearly $20.9 million settlement to resolve an Employee Retirement Income Security Act (ERISA) suit claiming M&T Bank Corp. stuffed its workers’ 401(k) plan with the company’s own costly investment products.

U.S. Magistrate Judge Jeremiah J. McCarthy granted preliminary approval of the $20.85 million settlement. The judge also granted preliminary approval – for settlement purposes only – to a class consisting of people who participated in or were beneficiaries of the plan between May 11, 2010, and Sept. 30, 2019.

The workers claimed that the Defendants didn’t properly inspect the plan’s investment lineup to make sure every investment was cost-efficient, and that they kept proprietary funds in the investment lineup even though better-performing and lower-cost options were available. Additionally, the workers said the Defendants didn’t make sure the plan’s record-keeping expenses were kept low.

Beyond the monetary relief outlined in the settlement, the agreement also calls for other relief, like having an independent consultant review all M&T-affiliated funds in the plan.

The workers are represented by Paul J. Lukas, Kai Richter, Carl F. Engstrom, Jacob Schutz and Chloe A. Raimey of Nichols Kaster PLLP, Donna Siegel Moffa and Joseph H. Meltzer of Kessler Topaz Meltzer & Check LLP, Mark K. Gyandoh of Capozzi Adler PC and Lucinda Lapoff of Trevett Cristo. The case is In re M&T Bank Corp. ERISA Litigation, (case number 1:16-cv-00375) in the U.S. District Court for the Western District of New York.

Wilmington Trust Reaches $19.5 Million Settlement To End ERISA Class Action

Delaware-based money management firm Wilmington Trust has agreed to pay $19.5 million to settle an Employee Retirement Income Security Act (ERISA) class action accusing it of letting an energy company’s employee stock ownership plan pay millions more than it needed to in a $375.5 million stock purchase. The litigation claims Wilmington Trust breached its fiduciary duty under ERISA by bungling its oversight of a two-part stock sale that transferred ownership of Martin Resource Management Corp. to the Texas oil company’s employees by 2013.

The class action, filed in 2017 and certified in December, accuses Wilmington Trust of approving an employee stock ownership plan (ESOP) transaction that benefited Martin Resource Management Corp. and its executives much more than the company’s workers. The $375.5 million transaction transferred ownership of Martin Resource to workers by placing roughly 85% of the company’s stock in a new ESOP, which served as a benefit plan for workers. Workers already owned the rest of the company through an old ESOP. But the stock the ESOP bought from Martin Resource and its executives wasn’t worth $375.5 million, workers say. They accused Wilmington Trust – the money manager Martin Resource hired in 2012 to oversee the ESOP transaction – of allowing the ESOP to pay a significantly inflated price for the stock because it was getting paid by Martin Resource and thus had an incentive to act in the best interest of executives rather than workers.

ERISA forbids plan fiduciaries from acting in the interest of “a party whose interests are adverse to the interests of the plan.” By acting in Martin Resource executives’ interest, Wilmington Trust breached the fiduciary duty it signed up for when it agreed to oversee the transaction, the workers alleged.

The class is represented by Gregory Y. Porter, Ryan T. Jenny, Patrick O. Muench and David A. Felice of Bailey & Glasser LLP and Daniel Feinberg and Todd Jackson of Feinberg Jackson Worthman & Wasow LLP. The case is Choate v. Wilmington Trust NA, (case number 1:17-cv-00250) in the U.S. District Court for the District of Delaware.

Source: Law360.com

Signet To Pay $240 Million To Settle Harassment-Linked Investor Suit

Signet Jewelers Ltd. Has reached a $240 million settlement with investors in a securities class action lawsuit. There have been mixed answers from courts last year as to whether statements in corporate codes of conduct can qualify as “material misrepresentations” under securities law.

The investors provided U.S. District Judge Colleen McMahon with a motion for preliminary approval of the settlement agreement resolving claims that Signet’s code of conduct and code of ethics falsely stated it was “committed to a workplace free from sexual harassment” and that it made employment decisions based on merit alone.

The investors claimed those statements were part of the company’s efforts to minimize fallout from a 2008 class action arbitration case filed by a group of female employees alleging discrimination by Signet’s subsidiary Sterling Jewelers Inc. based on their gender. When the accounts of those employees’ experiences became public in 2017, Signet’s share price dropped 13%.

Pursuant to the settlement agreement, the remainder of the settlement fund, after attorney’s fees and expenses, will be distributed to investors who acquired Signet stock between Aug. 29, 2013, and May 25, 2017. If approved after a fairness hearing tentatively planned for July, the settlement would be among the top 75 securities class action settlements ever reached, according to the investors.

The investors are represented by John Rizio-Hamilton and Rebecca Boon of Bernstein Litowitz Berger & Grossmann LLP and Jason Kirschberg of Gadow Tyler PLLC. The case is In re: Signet Jewelers Limited Securities Litigation, (case number 1:16-cv-06728) in the U.S. District Court for the Southern District of New York.

Source: Law360.com

Wells Fargo Agrees To Pay $18.5 Million To Resolve Mortgage Claims

Wells Fargo has agreed to pay $18.5 million to settle claims that it denied loan modifications to eligible mortgage borrowers. A preliminary settlement agreement, filed in a California federal court, seeks approval of the proposed class action settlement. U.S. District Judge William H. Alsup was asked to sign off on the settlement amount, certify the proposed settlement class of roughly 500 Wells Fargo borrowers, appoint Plaintiffs Debora Granja and Sandra Campos as representatives for the settlement class, and appoint a pair of lawyers, one from Gibbs Law Group LLP and one from Paul LLP, as class counsel for the settlement class.

Pursuant to the proposed settlement terms, the fund would be distributed to class members based on the estimated value of what they lost when Wells Fargo denied their request for a loan modification due to an error in the bank’s algorithm. Each class member would get between $14,000 and $120,000, and the total sums they received would be determined by factors including their unpaid principal balance, the period of delinquency on their mortgage and how much the bank had already paid them over the error.

Additionally, $1 million was allocated to compensate class members “who suffered severe emotional distress as a result of the foreclosure of their homes,” which the class’ proposed administrator for that claim estimated would be sought by approximately 50 members of a 500-member class.

The borrowers are represented by Michael L. Schrag, Joshua J. Bloomfield and Linda P. Lam of Gibbs Law Group LLP and Richard M. Paul III, Ashlea G. Schwarz and Laura C. Fellows of Paul LLP. The case is Hernandez et al. v. Wells Fargo Bank NA et al., (case number 3:18-cv-0735), in the U.S. District Court for the Northern District of California.

Source: Law360.com

Bank Of America, JPMorgan and RBS Agree To $25 Million Settlement In Libor Suit

JPMorgan Chase, Bank of America and RBS have agreed to pay out a combined $25.5 million to settle bondholders’ claims that they rigged the London Interbank Offered Rate (Libor). A request for initial approval of the settlement was filed in New York federal court.

The settlements totaling $25.5 million bring the total bondholder settlements to date to $68.625 million. The bondholder Plaintiffs previously reached settlements with other Defendants, including Barclays, HSBC, UBS and Citibank.

The court was also asked to certify two bondholder classes for settlement purposes: a combined Bank of America Corp. and JPMorgan Chase & Co. class, and a Royal Bank of Scotland Group PLC class. Both would be defined as any person or entity that owned U.S. dollar Libor-based debt securities between Aug. 1, 2007, and May 31, 2010. The bondholders said the proposed settlement classes are “functionally identical,” both to each other and to classes that the court has certified in previous settlements in this case.

The bondholders’ suit is one of many filed in the wake of Barclays Bank PLC’s admittance in 2012 that it had been one of a number of banks lying about the interest rates it actually expected to pay in order to artificially influence Libor. The investors contend the major financial institutions deliberately lowballed their submissions in the Libor rate-setting process to manipulate the benchmark. As a result, the banks took in hundreds of millions, and perhaps even billions, of dollars in ill-gotten gains, according to case filings.

The bondholders are represented by Karen L. Morris and Patrick F. Morris of Morris and Morris LLC, David H. Weinstein and Robert S. Kitchenoff of Weinstein Kitchenoff & Asher LLC and Thomas C. Goldstein and Eric F. Citron of Goldstein & Russell PC.

The immediate case is Gelboim et al. v. Credit Suisse Group AG et al., (case number 1:12-cv-01025) in the U.S. District Court for the Southern District of New York. The multidistrict litigation (MDL) is In re: Libor-Based Financial Instruments Antitrust Litigation, (case number 1:11-md-02262) in the U.S. District Court for the Southern District of New York.

Source: Law360.com

Zimmer Biomet Agrees To $50 Million Investor Settlement

Medical device company Zimmer Biomet Holdings Inc. has agreed to pay $50 million to end investor claims it intentionally hid compliance problems at a critical manufacturing facility, thereby hurting its shareholders.

If approved, the settlement will resolve claims that date back to December 2016, when the investors accused the company of hiding compliance issues at a key Warsaw, Indiana, factory dubbed “North Campus.”

Zimmer had touted strong growth projections following a $13.4 billion merger between Legacy Zimmer and Legacy Biomet in 2015, the investors alleged. But investors claimed that the company soon realized that quality issues at its North Campus factory threatened to derail them. But when the U.S. Food and Drug Administration (FDA) began inspecting North Campus in September 2016, the agency immediately found deficiencies that led it to shut the factory down, devastating third-quarter revenue results, the investors claimed.

The Plaintiffs and the settlement class are represented by Kara M. Wolke, Robert V. Prongay, Jason L. Krajcer and Leanne H. Solish of Glancy Prongay & Murray LLP.

The case is Shah et al. v. Zimmer Biomet Holdings Inc. et al., (case number 3:16-cv-00815) in the U.S. District Court for the Northern District of Indiana.

Source: Law360.com

Investors Seek Approval Of $44 Million Settlement With ER Operator

Investors in Adeptus Health have reached a $44 million cash settlement with the emergency room operator that could resolve claims that the company and its executives misled investors in securities offerings. A class of investors led by two pension funds asked the court to grant final approval of the settlement.

Adeptus Health Inc. went bankrupt in 2017. Lead Plaintiffs are Alameda County Employees’ Retirement Association(ACERA) and Arkansas Teacher Retirement System (ATRS). The Miami Fire Fighters’ Relief and Pension Fund is also a named Plaintiff in the suit. The investors accused Adeptus, its executives and Sterling Partners, its private equity backer, of misleading shareholders about the company’s business practices and its financial health. Company insiders allegedly misled shareholders on earnings calls as well as in the run-up to a pair of securities offerings in 2015 and 2016 that raised a combined $586 million, according to the complaint. The offerings’ underwriters are also named in the complaint.

The judge overseeing the case, U.S. District Judge Amos L. Mazzant III, preliminarily approved the settlement in January, saying the court would “likely” be able to grant final approval.

ACERA, ATRS and the settlement class are represented by lead counsel Jeremy P. Robinson and Abe Alexander of Bernstein Litowitz Berger & Grossman LLP. The lead Plaintiffs and settlement class, as well as Miami Fire Fighters’ Relief and Pension Fund, are also represented by lead counsel Gregory M. Castaldo, Richard A. Russo, Jr., Justin O. Reliford, Michelle M. Newcomer and Evan R. Hoey of Kessler Topaz Meltzer & Check LLP.

Matt Keil of Keil & Goodson PA is serving as additional counsel. Acting as liaison counsel for the Plaintiffs and settlement class are Clyde M. Siebman and Elizabeth S. Forrest of Siebman Forrest Burg & Smith LLP and George L. McWilliams of the Law Offices of George L. McWilliams PC.

The case is Oklahoma Law Enforcement Retirement System et al. v. Adeptus Health Inc., (case number 4:17-cv-00449) in the U.S. District Court for the Eastern District of Texas, Sherman Division.

Source: Law360.com

EMPLOYMENT AND FLSA LITIGATION

The Families First Coronavirus Response Act: What It Provides For Employees

As everyone in the United States (and around the world) knows by now, the World Health Organization (WHO) declared COVID-19 a global pandemic on March 11, 2020 – the first such declaration since the H1N1 virus was declared a pandemic in 2009.

In response to the devastating economic impact caused by COVID-19, on March 18, 2020, the Families First Coronavirus Response Act (FFCRA) was signed into law. The FFCRA provides two essential areas of protections for American workers: The Act does the following:

  • It expands the Family and Medical Leave Act (FMLA) temporarily, and
  • It provides paid sick leave for employees impacted by COVID-19 and their caregivers.

These provisions went into effect on April 2, 2020, and will expire on Dec. 31, 2020.

The FFCRA expands the FMLA by changing the employee threshold for coverage from requiring more than 50 employees, to applying to employers with fewer than 500 employees. The FFCRA also allows employees to qualify after working for an employer only 30 days prior to the requested leave, as opposed to requiring a year of employment. One exception allows the Secretary of Labor to exempt small businesses with fewer than 50 employees if the requested leave would jeopardize the viability of the business, and to exempt health care providers and emergency responders from the definition of employees.

In addition, the FFCRA provides up to 12 weeks of job-protected leave under the FMLA for an employee employed by the employer for at least 30 days before the leave starts if the employee is unable to work or telework and needs to care for the employee’s child because the child’s school, place of care or care provider is closed or unavailable due to a public health emergency. Significantly, this is the only qualifying reason for the expanded FMLA coverage.

The FFCRA also expands the relief under the Act to include paid leave. The first 10 days may be unpaid, but the rest of the leave must be paid at two-thirds of the employee’s regular rate of pay for the number of hours the employee would otherwise be scheduled, although pay is limited to $200 per day and $10,000 per employee. Employees who work part-time or irregular schedules are entitled to receive pay based on the average number of hours worked for the six months prior to taking the requested leave. If the employee has not yet worked six months, then the pay is calculated based on the average number of hours the employee was reasonably expected to work when hired.

The FMLA’s job protection provisions apply to the FFCRA but there is an exemption for employers with fewer than 25 employees. As with the current FMLA requirements, employers with more than 25 employees must still retain employees returning from Emergency Leave and return those employees to the same or similar job position. Employers with fewer than 25, however, are generally exempted from this requirement. This exemption may apply if the employee’s position no longer exists because of an economic downturn or similar circumstance caused by the declaration of a public health emergency and the employer attempts to restore the employee’s employment within a year.

Emergency Paid Sick Leave Act

In addition to the FFCRA, Congress also passed the Emergency Paid Sick Leave Act (EPSL) further providing paid sick leave on a national level to qualifying employees. The EPSL applies to businesses with fewer than 500 employees and employees may take EPSL for the following reasons:

  • The employee is subject to a federal, state, or local quarantine or isolation order due to COVID-19.
  • The employee has been advised by a health care provider to self-quarantine because of concerns related to COVID-19.
  • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  • The employee is caring for an individual who is quarantined or advised by a health care provider to self-quarantine.
  • The employee is caring for a son or daughter if the school or place of care for the child has been closed, or the child care provider is unavailable because of COVID-19 precautions.
  • The employee is experiencing any other, substantially similar condition, as specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Other aspects of EPSL include:

  • Full-time employees are entitled to 80 hours of EPSL, and part-time employees are entitled to EPSL in the amount equal to the average amount of hours they work over a two-week period.
  • There is no carryover of EPSL into the following calendar year, and employers are not required to pay out unused leave upon an employee’s separation from employment.
  • Employers must pay EPSL to employees in addition to any other leave benefits the employer offers, and employers may not require employees to use any other leave before using EPSL.
  • If an employee uses EPSL to care for himself or herself for reasons (i)-(iii) listed above, employers must pay the employee his or her regular compensation, up to a maximum of $511 per day or $5,110 in the aggregate.
  • If an employee uses EPSL to care for a family member or for reasons (iv)-(vi) listed above, employers must pay the employee either two-thirds of his or her regular compensation or the minimum wage, whichever amount is greater. Employers must only pay up to a maximum of $200 per day or $2,000 in the aggregate.
  • Employers must post a notice about leave entitlements in a conspicuous location within the job site; the Department of Labor published a model notice for positing on or before March 25, 2020.
  • The Secretary of Labor is permitted to exempt employers with fewer than 50 employees from the EPSL requirements if the Act’s requirements would “jeopardize the viability of the business as a going concern.”

A business employing fewer than 500 employees is required to pay a full-time employee for 80 hours of emergency paid sick leave, and may provide, at the request of a qualifying employee, this paid sick leave instead of the unpaid leave permitted in the first 10 days by the Emergency Family and Medical Leave Expansion Act.

Further, with respect to paid leave, the employer must provide 80 hours of paid sick leave at the employee’s regular rate, or two-thirds of the employee’s regular rate when caring for others or when any other substantially similar condition applies. Like the FMLA, there is an exception for employers who are health care providers or emergency responders. The EPSL also caps the wages at $511 per day up to $5,110 total per employee for their own use, and $200 per day up to $2,000 total to care for others and for any other substantially similar condition. This paid sick leave is in addition to any leave already provided, and it does not carry over to the next year.

Also, employees who work part-time or irregular schedules are entitled to receive pay based on the average number of hours worked for the six months prior to taking the requested leave. In contrast to the FMLA’s paid leave, however, if the employee has not yet worked six months, then the pay is calculated based on the average number of hours the employee would have worked in a two-week period. The FFCRA provides employers some financial relief in the form of tax credits on a dollar-for-dollar basis for FMLA or EPSL payments to employees, subject to certain caps.

COVID-19 Testing Coverage

Lastly, the FFCRA also mandates that self-funded and fully insured group health plans (including grandfathered plans) cover all costs (e.g., copayments, coinsurance and deductibles) related to COVID-19 diagnostic testing. This includes items and services provided during – urgent care center visits; in-person and telehealth visits; and emergency room visits that result in an order for in vitro diagnostic products approved by the Food and Drug Administration – but only to the extent such items and services relate to the provision of the diagnostic test or the evaluation of an individual to determine whether a test is necessary.

Conclusion

If you need more information in any of the areas discussed above, contact Larry Golston, a lawyer in our Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Larry.Golston@beasleyallen.com.

THE CONSUMER CORNER

Facebook Must Face Renewed Privacy Lawsuit Over User Tracking

The 9th U.S. Circuit Court of Appeals has revived nationwide litigation accusing Facebook Inc of violating users’ privacy rights by tracking their internet activity even after they logged out of the social media website. The appeals court said Facebook users could pursue several claims under federal and California privacy and wiretapping laws.

Facebook users had accused the company of quietly storing cookies on their browsers that tracked when they visited outside websites containing “like” buttons, and then selling personal profiles based on their browsing histories to advertisers.

U.S. District Judge Edward Davila in San Jose, California, had dismissed the lawsuit in 2017, including claims under the federal Wiretap Act, and said the users lacked legal standing to pursue economic damages claims. But in last month’s appellate decision, Chief Judge Sidney Thomas wrote for a three-judge panel that users had a reasonable expectation of privacy and had sufficiently alleged a “clear invasion” of their right to privacy. The panel also said California law recognized a right to recoup unjustly earned profits, regardless of whether a Defendant’s conduct directly caused economic harm. Chief Justice Thomas wrote:

Facebook’s user profiles would allegedly reveal an individual’s likes, dislikes, interests, and habits over a significant amount of time, without affording users meaningful opportunity to control or prevent the unauthorized exploration of their private lives.

Citing Facebook’s data use policy, the Chief Justice also said the Plaintiffs “plausibly alleged that Facebook set an expectation that logged-out user data would not be collected, but then collected it anyway.”

Source: Reuters

President Trump Rolls Back Obama-Era Emission Standards

The Trump administration recently finalized a rollback of Obama-era climate policies, reasoning the new standards will make cars more affordable for consumers. “By making newer, safer, and cleaner vehicles more accessible for American families, more lives will be saved and more jobs will be created,” U.S. Secretary of Transportation Elaine L. Chao said in a statement.

Under the Obama-era rule, automakers were required to produce fleets averaging nearly 55 mpg by 2025. However, the Trump rule requires automakers to attain an average of 40 mpg by 2026.

Consumer watchdog and environmental groups say the Trump administrations’ analysis does not add up. For example, Ben Longstreth, a lawyer for the National Resources Defense Council (NRDC), stated:

The [Obama-era] rule showed you can cut pollution significantly and save drivers billions of dollars, and in order to justify this rollback they’ve had to cut a lot of corners and skew their analysis.

Ann Carlson, an environmental law professor at the University of California, Los Angeles said: “More fuel-efficient cars are cheaper for consumers over the long run.”

In addition to saying this move will save Americans money, the Trump administration also claims that the new rule will save lives because Americans will buy newer, safer vehicles. But critics point out that the agencies’ own analysis finds there would be even more premature deaths from increased air pollution. Specifically, the analysis accompanying the rule predicts it will save about 700 lives, but elsewhere the rule shows anywhere from 440 to 1,000 premature deaths resulting from air pollution caused by the increase in smog and other pollution.

This is just one a of number of environmental rollbacks from the Trump administration, all of which are expected to be finalized before November’s election, making it harder for future administrations to reverse course.

Sources: thehil.com, npr.org and theverge.com

CURRENT CASE ACTIVITY AT BEASLEY ALLEN

Beasley Allen has been able to keep things moving during the current pandemic crisis. Taking care of our clients’ cases and their need for justice are very important and other lawyers and support staff have been hard at work. The following is the April 2020 update on the types of cases that Beasley Allen lawyers are currently working on. The firm operates in four separate Sections with each Section focusing on a specific area of litigation. The four Sections are Personal Injury & Products Liability, headed by Cole Portis; Mass Torts, headed by Andy Birchfield; Toxic Torts, headed by Rhon Jones; and Consumer Fraud & Commercial Litigation, headed by Dee Miles. Information on the current litigation will be set out below for each Section.

Personal Injury & Products Liability Section

The personal Injury & Products Liability Section is handling cases in a number of areas. Currently, the Section has 18 lawyers and 31 support staff. Sloan Downes is the Section Director. The lawyers and support staff are working on the areas of litigation set out below. The primary lawyer contact will be listed for each type case. Following is the list of current activity in the Section.

Product Liability – We continue to focus on accident cases involving automobiles, heavy equipment and consumer products. Some of these auto cases involve single-vehicle crashes, while others involve multiple-vehicle accidents. We would like to review any case involving catastrophic injury or death. Contact: cole.portis@beasleyallen.com, greg.allen@beasleyallen.com, ben.baker@beasleyallen.com, chris.glover@beasleyallen.com, mike.andrews@beasleyallen.com, graham.esdale@beasleyallen.com, labarron.boone@beasleyallen.com or rob.register@beasleyallen.com.

Truck Accidents – There are significant differences between handling an interstate trucking case and other car wreck cases. It is imperative to have knowledge of the Federal Motor Carrier Safety Regulations, technology, business practices, insurance coverages, and to have the ability to discover written and electronic records. Expert testimony is of utmost importance. Accidents involving semi-trucks and passenger vehicles often result in serious injuries and wrongful death. Trucking companies and their insurance companies almost always quickly send accident investigators to the scene of a truck accident to begin working to limit their liability in these situations. Our lawyers, staff and in-house accident investigators immediately begin the important task of documenting and preserving the evidence. We would like to review any case involving catastrophic injury or death. Contact: chris.glover@beasleyallen.com, mike.crow@beasleyallen.com, dan.philyaw@beasleyallen.com or donovan.potter@beasleyallen.com.

On-the-job Product Liability – Many times product claims arise from worker’s compensation claims. After we investigate the circumstances that caused the injuries, many times we discover a defective machine may be the cause of the injuries. Contact: kendall.dunson@beasleyallen.com or evan.allen@beasleyallen.com.

Boeing Litigation – Lawyers in the Section, led by Mike Andrews, are investigating and filing suits arising out of the two crashes involving Boeing planes that have received tremendous public interest and concern. The first suit was filed on June 13. Mike is handling the litigation and has filed several other lawsuits. Others are being prepared for filing. Contact: mike.andrews@beasleyallen.com.

Aviation Accidents – Aviation litigation can be extremely complex and often involves determining the respective liability of manufacturers, maintainers, retrofitters, dispatchers, pilots and others. In some circumstances, the age of the aircraft involved can limit or completely preclude an injured party from compensation. Soaring through the sky hundreds of miles an hour, thousands of feet above the ground in an airplane or helicopter leaves little room for error. One small mechanical problem, misjudgment or faulty response in the air can spell disaster for air passengers and even unsuspecting people on the ground. We are handling cases involving all types of aircraft, military and civilian. Contact: mike.andrews@beasleyallen.com or cole.portis@beasleyallen.com.

Heavy Truck Product Liability Claims – Tractor trailers and other heavy trucks are not required to contain many of the same protections for occupants as smaller passenger cars. They can contain dangerous defects putting the truck driver or passengers at risk of serious injury or death. These trucks many times have particularly weak roofs that crush in rollovers. The passenger compartments are often not protected by effective cab guards, and this allows loads to shift into the truck cab. We would like to review any case involving catastrophic injury or death. Contact: ben.baker@beasleyallen.com or greg.allen@beasleyallen.com.

Defective Tires – Tire failure can result in a serious car crash and even a vehicle rollover accident, causing serious injury or death to vehicle occupants. Air, heat and sunlight can cause the rubber in tires to break down. When a tire is defective, potentially serious problems like detreads and blowouts can occur long before the tire would be expected to wear out. If the tire failure is the result of design or manufacturing defects, and the manufacturer is aware of the problem, they have an obligation to alert consumers to the potential danger. Contact: ben.baker@beasleyallen.com or labarron.boone@beasleyallen.com.

Premises Liability – In premises liability claims, patrons of establishments are often injured because the premises, for some reason, was unsafe. Premises liability claims can take many forms, including when severe injury or death results when a building or structure collapses, merchandise falls, during swimming pool accidents, due to poor lighting, falling debris, unsecured fixtures and furniture that falls or tips over, unsecure drainage that creates drowning or fall hazards, slippery surfaces, and inadequate maintenance. Beasley Allen has successfully handled a number of premises liability cases, and we would like to investigate any cases where severe injury or death results. Contact: mike.crow@beasleyallen.com, ben.locklar@beasleyallen.com, warner.hornsby@beasleyallen.com, or ben.keen@beasleyallen.com.

Negligent Security – Under the law, owners of establishments owe a duty to patrons and guests to ensure that the premises are reasonably safe and secure from anticipated dangers. These cases normally take the form of shootings, fights, stabbings, or other physical violence (including sexual assault) where severe injury or death occurs due to the establishment owner’s failure to take reasonable safety measures. When this occurs, the establishment owner, as well as those contractors charged with security, may be held responsible for the injuries suffered by individuals or groups of individuals on the premises. While the laws vary from state to state, our firm is actively investigating and litigating these cases where severe injury or death results. Contact: parker.miller@beasleyallen.com, rob.register@beasleyallen.com or donovan.potter@beasleyallen.com.

Nursing Home Abuse and Neglect – Nursing homes are supposed to be in the business of providing skilled nursing care to elderly and disabled residents. Unfortunately, statistics indicate residents in nursing homes suffer abuse and neglect more and more frequently at the hands of nursing home corporations. In many cases residents have died or have been severely abused as a result of neglect. They may suffer physical abuse, emotional or psychological abuse, or neglect. We are investigating cases involving serious injury or death resulting from nursing home abuse or neglect. Contact: alyssa.baskam@beasleyallen.com.

The Mass Torts Section

The Mass Torts Section is handling a number of cases involving pharmaceuticals and medical devices. Currently, there are 32 lawyers and 87 support staff in the Section. Melissa Prickett, a lawyer, serves as the Section Director. The lawyers and support staff are working in the areas of litigation set out below. The contact lawyer will be supplied in each case. The following are the current areas of litigation in the Section.

Talcum powder and ovarian cancer – As many as 2,200 cases of ovarian cancer diagnosed each year may have been caused by regular use of talcum powder. Talc is a mineral made of up various elements including magnesium, silicon and oxygen. Talc is ground to make talcum powder which is used to absorb moisture and is widely available in various products including baby powder and adult products including body and facial powder. Talc products used regularly in the genital area increase the risk of ovarian cancer. In February 2016, a jury found Johnson & Johnson knew of the cancer risks associated with its talc products but failed to warn consumers and awarded the family of our client $72 million. She died of ovarian cancer after using J&J talc-containing products for more than 30 years. This case was the start of the litigation that followed. Ted Meadows heads up our talc litigation team handling individual claims. Leigh O’Dell heads up the team of lawyers handling the talc multidistrict litigation (MDL). Contact: ted.meadows@beasleyallen.com, leigh.odell@beasleyallen.com, or melissa.prickett@beasleyallen.com.

JUUL vaping devices – The use of JUUL and other vaping devices has reached epidemic levels, especially among teenagers and young adults. JUUL and other vape device manufacturers fueled this epidemic by targeting and deceiving youth and adolescents with misleading social media marketing and sweet, fruit-flavored pods containing high levels of nicotine. Use of these products has been associated with numerous adverse health effects, such as seizures, nicotine addiction, nicotine poisoning, breathing problems, behavioral and psychological problems, and other serious health conditions. Contact: joseph.vanzandt@beasleyallen.com, sydney.everett@beasleyallen.com or melissa.prickett@beasleyallen.com.

Bone Cement – The type of bone cement used during knee replacement surgery affects the outcome of that surgery. High viscosity bone cement (HVC) boasts shorter mixing and waiting times and longer working and hardening phases, meaning surgeons can handle and apply the cement earlier than with low- or medium-viscosity cements. Although HVC may be more convenient to use, there is mounting evidence that the bond it produces is not as strong. Researchers have observed more early failures with the use of HVC, even when used in combination with a previously well-performing implant. Complications associated with knee replacements performed with HVC include loosening and debonding (where the implant fails to adhere to the cement interface on the shin or thigh bone), which requires revision surgery. Other reported problems include new onset chronic pain and instability. Contact: chad.cook@beasleyallen.com, ryan.duplechin@beasleyallen.com or melissa.prickett@beasleyallen.com.

Zantac – Zantac is used to treat and prevent ulcers in the stomach and intestines. It also treats conditions in which the stomach produces too much acid, such as Zollinger-Ellison syndrome, gastroesophageal reflux disease (GERD) and other conditions in which acid backs up from the stomach into the esophagus, causing heartburn. Zantac was voluntarily recalled from the market on Sept. 13, 2019. We are currently investigating claims for those who used Zantac and were diagnosed with certain types of cancer, including liver, bladder, stomach, colon, kidney and pancreatic cancer. Contact: frank.woodson@beasleyallen.com or melissa.prickett@beasleyallen.com.

Belviq – On Feb. 13, 2020, the FDA issued a Drug Safety Communication requesting that weight-loss drug Belviq and Belviq XR be removed from the market. Based upon the results of a recent clinical trial, the FDA said the potential risk of various cancers, including pancreatic, colorectal, and lung cancers, outweighed any of Belviq’s benefits. The FDA instructed Belviq users to immediately discontinue its use. Sadly, the manufacturers of Belviq, Eisai, Inc., and Arena Pharmaceuticals, were aware that Belviq use was associated with an increased risk of cancer long before Belviq was approved for marketing by the FDA. In fact, their own pre-marketing studies had initially detected the risk, and the FDA had originally refused to approve Belviq for marketing in 2009 due to the risks of cancer. Only after these companies submitted additional or re-evaluated data masking the risk of cancer did the FDA grant regulatory approval for Belvic in 2012. Beasley Allen is investigating cases involving diagnoses of cancer following Belviq use. Contact: roger.smith@beasleyallen.com, ryan.duplechin@beasleyallen.com or melissa.prickett@beasleyallen.com.

Proton Pump Inhibitors – Proton pump inhibitors (PPIs) such as Nexium, Prilosec and Prevacid were introduced in the late 1980s for the treatment of acid-related disorder of the upper gastrointestinal tract, including peptic ulcers and gastrointestinal reflux disorders, and are available both as prescription and over-the-counter drugs. Beasley Allen is currently investigating PPI-induced Acute Interstitial Nephritis (AIN), which is a condition where the spaces between the tubules of the kidney cells become inflamed. The injury appears to be more profound in individuals older than 60. While individuals who suffer from AIN can recover, most will suffer from some level of permanent kidney function loss. In rare cases individuals suffering from PPI-induced AIN will require kidney transplant. PPIs also have been connected with causing gastric/stomach cancer and Beasley Allen is investigating these cases as well. Contact: navan.ward@beasleyallen.com or melissa.prickett@beasleyallen.com

Metal-on-Metal Hip Replacement parts – The FDA has ordered a review of all metal-on-metal hip implants due to mounting patient complaints. Problems with metal-on-metal include, but are not limited to loosening, metallosis (ie: tissue or bone death), fracturing, and/or corrosion and fretting of these devices, which require revision surgery. Many patients that require revision surgery due to these devices suffer significant post-revision complications. We are investigating all cases involving metal-on-metal hip implants, including the DePuy Orthopaedics ASR XL Acetabular System and the DePuy ASR Hip Resurfacing System, recalled in August 2010; the Stryker Rejuvenate and ABG II modular-neck stems, recalled in July 2012; the Stryker LFIT Anatomic v40 Femoral Head (recalled August 29, 2016); the Zimmer Durom Cup, and the Biomet M2A “38mm” and M2A-Magnum hip replacement systems, which have not been recalled. Reported problems include pain, swelling and problems walking. Contact: navan.ward@beasleyallen.com or melissa.prickett@beasleyallen.com.

IVC Filters – Retrievable IVC filters are wire devices implanted in the vena cava, the body’s largest vein, to stop blood clots from reaching the heart and lungs. These devices are used when blood thinners are not an option. Manufacturers include Bard, Cook and Johnson & Johnson. While permanent IVC filters have been used since the 1960s with almost no reports of failure, retrievable IVC filters were introduced in 2003, promoted for use in bariatric surgery, trauma surgery and orthopedic surgery. Risks associated with the retrievable IVC filters include migration, fracture and perforation, leading to embolism, organ damage and wrongful death. Contact: melissa.prickett@beasleyallen.com or frank.woodson@beasleyallen.com.

Zofran – Manufactured by GlaxoSmithKline, Zofran (ondansetron) was approved to treat nausea during chemotherapy and following surgery. Zofran (ondansetron) works by blocking serotonin in the areas of the brain that trigger nausea and vomiting. Between 2002 and 2004, GSK began promoting Zofran off-label for the treatment of morning sickness during pregnancy, despite the fact the drug has not been approved for pregnant women and there have been no well controlled studies in pregnant women. The FDA has received nearly 500 reports of birth defects linked to Zofran. Birth defect risks include cleft palate and septal heart defects. Contact: roger.smith@beasleyallen.com or melissa.prickett@beasleyallen.com.

Physiomesh – Intended for hernia repair, Physiomesh is a flexible polypropylene mesh designed to reinforce the abdominal wall, preventing future hernias from occurring. Though there are several types of hernias, most occur when an organ or tissue protrudes through a weak spot in abdominal muscles. The condition often requires surgery where mesh, like Physiomesh, which is intended for laparoscopic use, is used to fill in a hole in the abdominal muscle or laid over or under it to prevent any further protrusions. Independent studies have found Physiomesh to lead to high rates of complications including hernia reoccurrence, organ perforation, mesh migration, sepsis and even death. In May 2016, Ethicon issued a market withdrawal of Physiomesh in the U.S. and recalled the product in Europe and Australia. We are currently investigating cases involving serious injury or death as a result of Ethicon’s Physiomesh. Contact: melissa.prickett@beasleyallen.com.

Consumer Fraud & Commercial Litigation Section

The Consumer Fraud & Commercial Litigation Section has 14 lawyers and 20 support staff. Michelle Fulmer is the Section Director. Lawyers and support staff in the Section are working on the litigation areas set out below. The primary lawyer contact will be supplied for each type case.

Business Interruption Insurance – Many businesses have suffered losses as a result of the Coronavirus, COVID-19. Most all businesses have a form of “Business Interruption” coverage that is designed to cover losses due to unforeseen circumstances out of the control of the business. This virus is a prime example of an event that would trigger this type of coverage. However, insurance companies are already denying coverage for this type of claim. Obviously, the insurance contract language of each policy governs the coverages, but in many cases the insurance companies are denying coverage despite that the policy actually provides coverage. We are actively pursuing these cases already with our clients who received a denial communication from their insurance companies. Dee Miles, Rachel Boyd and Paul Evans are spearheading this litigation and can be reached at dee.miles@beasleyallen.com, rachel.boyd@beasleyallen.com or paul.evans@beasleyallen.com.

State and Municipalities Litigation – Our firm has represented numerous states throughout the country. These cases have been handled through the Attorneys General and have involved various civil actions. Many times, individuals are barred from bringing a consumer fraud type claim, but the state government is not. We recently concluded litigation in seven of eight states for a recovery dealing with Medicaid fraud. In addition, we are representing five states in related pharmaceutical pricing litigation. For more information, contact dee.miles@beasleyallen.com or alison.hawthorne@beasleyallen.com.

False Claims Act / Whistleblower- We are handling and investigating whistleblower claims of government fraud ranging from Medicare/Medicaid to military contracts, and any other type of fraud involving a government contract. Under the False Claims Act (FCA) the whistleblower is entitled to a percentage of the recovery. Studies show that as much as 10% of Medicare/Medicaid charges are fraudulent. Common schemes involve double-billing for the same service, inaccurately coding services, and billing for services not performed. Additionally, the Commission on Wartime Contracting has warned that the lack of oversight of government contractors has led to massive fraud and waste. Contact: lance.gould@beasleyallen.com, larry.golston@beasleyallen.com, leslie.pescia@beasleyallen.com or tyner.helms@beasleyallen.com.

Pension Plan Litigation (ERISA) – Many large corporations are improperly funding their Employee Benefit plans and / or transferring these Pension Plans to other entities that cannot properly fund the plans. The result is that employees’ life savings for retirement is either lost, compromised or reduced substantially. These transfers and inadequate funding measures are all designed to increase earnings for the corporations at the expense of its employees. Our firm is committed to pursuing the preservation of employee benefits / retirement by challenging these abuses through ERISA litigation and class actions. For more information contact dee.miles@beasleyallen.com, james.eubank@beasleyallen.com or rachel.boyd@beasleyallen.com.

Auto Defect Class Actions – We are continuing to work on numerous auto defect class actions against many of the major automobile manufacturers like VW, Toyota, General Motors, Ford and even some suppliers. These cases continue to be filed because of corporate misconduct in designing and manufacturing unsafe vehicles that are purchased by consumers, corporations and state agencies. We continue to investigate these automobile problems for class relief treatment. Contact: clay.barnett@beasleyallen.com, dee.miles@beasleyallen.com, leslie.pescia@beasleyallen.com or mitch.williams@beasleyallen.com.

Life Insurance Fraud – We have uncovered alleged fraudulent accounting practices by life insurance companies concerning premium increases. The accounting method may result in the policyholder being charged excessive insurance premiums. A client that has a life insurance policy and has been notified of a substantial increase in premium payments, or if they have been told their policy’s “cost of insurance” has increased, may have a valuable legal claim that our firm would like to investigate. Contact: dee.miles@beasleyallen.com, rachel.boyd@beasleyallen.com, or paul.evans@beasleyallen.com.

Property Insurance Fraud – Insurance companies nationwide are unjustly depreciating labor costs on adjusted property claims (roof or fence damage for example). The depreciation of labor costs is contrary to many insurance policy forms and leads to policyholders either being undercompensated for their claims or not compensated at all as they fail to meet their deductible once labor costs are depreciated. If you have had an insurance claim on your property in the past six years, then we would like to review the adjuster’s estimate and your homeowner’s or manufactured home policy as you may have a case. Contact: dee.miles@beasleyallen.com, rachel.boyd@beasleyallen.com or paul.evans@beasleyallen.com.

Supplemental Disability Insurance Denial – We have successfully litigated bad faith denial of benefits cases for years in the disability insurance area and we are interested in reviewing cases involving denial of Individual and Group disability insurance. These cases can be either employee sponsored benefit plan policies (ERISA), individually owned policies or non-ERISA governed supplemental insurance. Contact: larry.golston@beasleyallen.com, rachel.boyd@beasleyallen.com, james.eubank@beasleyallen.com or paul.evans@beasleyallen.com.

Health Care Fraud – We are looking into cases of fraud within the health care industry. These may include cases dealing with pricing, off-label prescriptions, or other health care abuse. Contact: alison.hawthorne@beasleyallen.com, james.eubank@beasleyallen.com or dee.miles@beasleyallen.com.

Self-funded Health and Pharmacy Insurance Plans – Third Party Administrators and Pharmacy Benefit Managers may have been charging unauthorized fees to self-funded insurance health and pharmacy benefit plans. These extra fees may be in violation of the contracts with the self-funded plan and a breach of fiduciary duty under ERISA. We are looking into these cases on behalf of self-funded plans. Contact: alison.hawthorne@beasleyallen.com or james.eubank@beasleyallen.com.

Pharmaceutical Pricing – We are continuing to handle claims involving chain pharmacies falsely reporting their generic pricing transactions to state Medicaid agencies. This misconduct has led to millions of dollars in overpayments by Medicaid agencies for generic drugs to the chain pharmacies. Contact: alison.hawthorne@beasleyallen.com or leslie.pescia@beasleyallen.com.

Antitrust – We are handling claims related to the violation of federal and state antitrust laws. We are currently involved in claims alleging a wide array of anticompetitive conduct, including illegal tying, exclusive dealing, monopolization, and price fixing. Contact: dee.miles@beasleyallen.com, alison.hawthorne@beasleyallen.com, leslie.pescia@beasleyallen.com or james.eubank@beasleyallen.com.

Sexual Harassment – Sexual harassment is outlawed by Title VII of the Civil Rights Act of 1964 because it is a form of discrimination, as explained by the Equal Employment Opportunity Commission (EEOC). The agency states “[u]nwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when this conduct explicitly or implicitly affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment.” We are looking at any claim involving extreme sexual harassment or sexual assault. Contact: larry.golston@beasleyallen.com, lauren.miles@beasleyallen.com or leon.hampton@beasleyallen.com.

Employment Law – We are handling employment cases. Situations that may be addressed in this area include minimum wage and overtime pay, unfair labor practices, all types of discrimination, employee benefits, and whistleblower claims. Contact: larry.golston@beasleyallen.com, lauren.miles@beasleyallen.com or leon.hampton@beasleyallen.com.

Fair Labor Standards Act (FLSA) – We are working several cases involving Fair Labor Standards Act (FLSA) violations. The FLSA cases are brought on behalf of clients whose job title is misclassified by their employers so that employees are not compensated for overtime worked. Cases may also involve unequal pay, where women are paid less for doing the same job as men. Contact: lance.gould@beasleyallen.com, larry.golston@beasleyallen.com, or lauren.miles@beasleyallen.com.

Toxic Torts Section

The Toxic Torts Section has a number of ongoing projects at present. Currently, the Section has 10 lawyers and 27 support staff. Tracie Harrison is the Section Director. Lawyers and support staff are working on the areas of litigation set out below. The primary contact lawyer for each type case will be listed.

State and Municipalities Litigation – Our firm is representing the States of Alabama and Georgia in the opioid litigation. We also represent states and certain local governments in environmental or toxic exposure claims. Many times, individuals are either barred from bringing an environmental claim or it is not a practical solution. These types of government cases may involve issues of environmental catastrophe, or some other type of pollution. One of the most notable cases handled by Beasley Allen on behalf of states for environmental issues is the BP Oil Spill litigation. For more information, contact rhon.jones@beasleyallen.com.

Opioids – Beasley Allen is representing Alabama and Georgia against both manufacturers and distributors of opioids for increased costs related to the opioid epidemic. These lawsuits allege the crisis was created by the pharmaceutical industry, which instead of investigating suspicious orders of prescription opiates, turned a blind eye in favor of making a profit. They intentionally misled doctors and the public about the risks of these dangerous drugs, and state governments are left struggling to cope with the consequences. Contact: rhon.jones@beasleyallen.com, jeff.price@beasleyallen.com or rick.stratton@beasleyallen.com.

Mesothelioma and asbestos-related diseases – Mesothelioma is a highly aggressive and rare form of cancer usually affecting the lining of the lungs (pleural) or abdominal cavity (peritoneal). Occasionally, it also may affect the lining of the heart (pericardial). The only known cause of mesothelioma is exposure to asbestos. About 2,000 new cases of mesothelioma are diagnosed in the United States each year. For years, asbestos was widely used in many industrial products and in building construction for insulation and fire protection. When asbestos is broken or disturbed it can release microscopic fibers that can be inhaled or ingested, posing a health risk, including the development of asbestos diseases and mesothelioma. Contact: rhon.jones@beasleyallen.com.

Defective 3M Earplugs – Beasley Allen lawyers are investigating claims related to defective combat earplugs manufactured by Minnesota-based 3M Company. The earplugs were issued to thousands of military personnel serving in combat in Iraq and Afghanistan and used in training exercises in the United States. Numerous soldiers are now complaining of permanent hearing loss related to the defective ear plugs. Other soldiers have complained of tinnitus, commonly referred to as “ringing” in the ears. The dual-sided earplugs allegedly were improperly designed and manufactured so that the earplugs did not fit snugly in the wearer’s ear canal. Contact: rhon.jones@beasleyallen.com, william.sutton@beasleyallen.com or danielle.ingram@beasleyallen.com.

Leukemia and Benzene exposure – Benzene is widely used in a number of industries and products, yet many people remain unaware of the toxic danger of this chemical substance. Exposure to products containing benzene, whether through inhalation or skin absorption, can cause life-threatening diseases including Acute Myeloid Leukemia (AML), Myelodysplastic Syndrome (MDS), lymphomas and aplastic Anemia. Some of these diseases do not manifest themselves until several years after exposure to benzene. Due to certain statute of limitations for bringing a claim of this nature it is important to contact an attorney as soon as possible if you believe your condition is a result of benzene exposure. Contact: john.tomlinson@beasleyallen.com.

PFC Contamination in Water Systems – In May 2016, the U.S. Environmental Protection Agency (EPA) issued new lifetime health exposure guidelines for perfluorooctane sulfonate (PFOS) and perfluorooactanoic acid (PFOA) in the water supply. After the EPA issued the new exposure limits, Beasley Allen filed suit for two water systems impacted in Alabama. The EPA advisory focused on PFOA and PFOS, man-made chemical compounds that are used in the manufacture of non-stick, stain-resistant, and water-proofing coatings on fabric, cookware, firefighting foam, and a variety of other consumer products. Contact: ryan.kral@beasleyallen.com, david.diab@beasleyallen.com or rhon.jones@beasleyallen.com.

E-cigarette Explosions – We are investigating cases involving severe injuries caused by exploding e-cigarette devices and exploding e-cigarette batteries. These explosions have been linked to faulty e-cigarette products, defective lithium-ion batteries, and insufficient warnings for users. These cases involve personal injury including serious burn injuries. Please contact our Toxic Torts section for assistance with cases you may have involving these devices. Contact: william.sutton@beasleyallen.com.

Even with the changes required by the Coronavirus pandemic, you will have no difficulty getting through to a lawyer in our firm when seeking information or assistance on a specific case. However, in the unlikely event you do have difficulty reaching any of the lawyers listed above as the primary contact for a specific type of case, you can contact one of our four Section Directors and she will promptly put you in touch with a lawyer in her Section who is working on the specific case you are asking about.

The Section Directors at Beasley Allen do a tremendous job for our firm. The Directors are Melissa Prickett, Mass Torts Section; Sloan Downes, Personal Injury & Products Liability Section; Michelle Fulmer, Consumer Fraud & Commercial Litigation Section; and Tracie Harrison, Toxic Torts Section. The directors can be reached at 800-898-2034 or by email at Melissa.Prickett@beasleyallen.com; Sloan.Downes@beasleyallen.com, Michelle.Fulmer@beasleyallen.com; and Tracie.Harrison@beasleyallen.com.

Resources to Help Your Law Practice

Beasley Allen has been recognized as one of the country’s leading law firms involved in complex civil litigation, representing only claimants. We are both honored and humbled to have received that recognition. By choice, our firm does no defense work. Beasley Allen has truly been blessed and we understand the importance of sharing resources and teaming with peers in our profession. The firm is committed to investing in resources, including books authored by our lawyers, to help our fellow lawyers. For those who may be looking to work with Beasley Allen, or simply are seeking information that will help their law firm with a case, the following are among our most popular resources. The names of the books and the authors are set out below.

Aviation Litigation & Accident Investigation

Beasley Allen lawyer Mike Andrews discusses the complexities of aviation crash investigation and litigation. The veteran litigator offers an overview to the practitioner of the more glaring and important issues to be aware of early in the litigation based on years of handling aviation cases. He provides basic instruction on investigating an accident, preserving evidence, and insight into legal issues associated with aviation claims while weaving in anecdotal instances of military and civilian crashes.

Tire Litigation: A Primer

Although tire failures, blowouts and detreads are foreseeable and preventable events, all too often consumers are unaware of the potential dangers from defective, old or degraded tires. Beasley Allen lawyer Ben Baker provides lawyers guidance on evaluating tire litigation and underscores the importance of inspecting the tires of all vehicles involved in a crash.

Nursing Home Abuse & Neglect Brochure

Long-term care facilities, including nursing homes, are rife with abuse and neglect and alarmingly high rates of underreporting. To assist families and lawyers pursuing justice for victims, Beasley Allen has prepared a brochure with information to help identify the signs of abuse and neglect, and advice about how to file a claim.

Co-Counsel E-Newsletter

Beasley Allen also sends out a Co-Counsel E-Newsletter, which is specifically tailored with lawyers in mind. It is emailed monthly to subscribers. Co-Counsel provides updates about the different cases the firm is handling, highlights key victories achieved for our clients, and keeps readers informed about the latest resources offered by the firm.

The Jere Beasley Report

We also consider The Jere Beasley Report to be a service to lawyers as well as the general public. We provide the Report at no cost monthly, both in print form and online. You can get it online by going to https://www.beasleyallen.com/publishing/jere-beasley-report/.

You can reach Beasley Allen lawyers in the four sections of our firm by phone toll free at 800-898-2034 to discuss any cases of interest or to get more information about the resources available to help lawyers in their law practice. To obtain copies of any of our publications, visit our website at beasleyallen.com/publishing/.

PRACTICE TIPS OF THE MONTH FOR TRIAL LAWYERS

We have two practice tips this month from lawyers in our firm. Dan Philyaw in our Atlanta office and Larry Golston from the Montgomery office have information and recommendations that we believe will be helpful to trial lawyers. Dan will discuss a topic that is most timely for Georgia lawyers because of the shelter-in-place orders currently in effect. Larry will discuss trial strategies that are for lawyers in all states.

Dan will go first with his comprehensive article.

Calling Witnesses Via Video Conference In Georgia Civil Trials

The coronavirus pandemic has caused significant disruptions in our legal system and altered the way that courts and lawyers are performing their functions. Judicial emergency orders in states across the nation, like Georgia, have put many courtroom operations, including trials, on hold. When the judicial emergency orders finally lift, and courthouses are once again filled with people in a world likely still managing the pandemic, judges and lawyers may need to consider courtroom practices that best promote public health and accommodate persons most vulnerable to the virus. In Georgia, courts have embraced advances in communications technology that may enable counsel to help protect the health of clients and witnesses under these unusual circumstances, including the ability to call witnesses in civil trials via video conference.

In Georgia, the ability to call witnesses in civil trials by remote means is not specifically codified amongst the rules of civil procedure. Unlike Fed. R. Civ. P. 43(a), which allows a court “for good cause in compelling circumstances” to “permit testimony in open court by contemporaneous transmission from a different location,” the corresponding Georgia statute, O.C.G.A. § 9-11-43(a), simply states that “[i]n all trials the testimony of witnesses shall be taken orally in open court unless otherwise provided by this chapter or by statute.” Thus, the Georgia rule does not explicitly permit remote testimony in the same terms, but it also does not necessarily preclude it. Instead, Georgia courts have provided parties the ability to call witnesses via video conference by promulgating various court rules.

Georgia Uniform Superior Court Rule 9 was amended in June 2004 to provide for video conferencing in court proceedings. Richard C. Ruskell, Davis & Shulman’s Ga. Practice & Procedure § 16:4 (2019-2020 ed.). Importantly, for this discussion, Rule 9.2 states that “[i]n any pending matter, a witness may testify via video conference.” Ga. Unif. Super. Ct. R. 9.2(C).

Other Georgia court rules also address video conference testimony. See Ga. Unif. Juv. Ct. R. 12.2; Ga. Unif. Prob. Ct. R. 11.2; Ga. Unif. Magis. Ct. R. 15.2. Interpreting an identically phrased section of the Juvenile Court Rule related to a witness’ ability to testify via video conference, the Georgia Court of Appeals explained that the rule provided the court with “the discretion to allow individual witnesses to testify via video conference” and did so “without stating any exceptions.” In the Interest of E.T., 342 Ga. App. 710, 715 (2017).

The remainder of this article focuses on the use of Uniform Superior Court Rule 9.2 for video conferencing in civil trials, which is also incorporated within the Uniform State Court Rules. Note, the differences within Rule 9.2 and other considerations in the context of criminal trials are not discussed here.

Practitioners should look closely at the text of Georgia Uniform Superior Court Rule 9.2, where they will see a few important requirements for using video conference testimony. First, the party calling a witness via video conference must file a notice of intention to present video conference testimony at least 30 days prior to the date scheduled for such testimony. Ga. Unif. Super. Ct. R. 9.2(C). The opposing party is then provided 10 days to file any objections with the court. Id. Yet, even if a notice is filed without objection, the rule states that “[i]n civil matters, the discretion to allow testimony via video conference shall rest with the trial judge.” Id.

Thus, counsel may need to persuade courts of the necessity of video conference testimony in some circumstances. There is not a wealth of Georgia case law showing when a trial court abuses its discretion by refusing to allow video conference testimony under Rule 9.2, but the Supreme Court of Georgia has approvingly discussed a trial court’s decision to prohibit video conference testimony where the required 30-day notice was not filed, despite the circumstance of an expedited proceeding. Martin v. Fulton Cty. Bd. of Registration & Elections, 307 Ga. 193, 208 (2019).

Without much Georgia authority, federal court opinions and commentary on the federal rule may provide some context for Georgia court decision-making. The Tenth Circuit, citing the Federal Rule 43 Advisory Committee Notes, has written that remote testimony is intended to be permitted where “a witness’s inability to attend trial is the result of ‘unexpected reasons, such as accident or illness,’ and not when it is merely ‘inconvenient for the witness to attend the trial.’” Eller v. Trans Union, LLC, 739 F.3d 467, 478 (10th Cir. 2013) (concluding that a district court did not abuse its discretion by preventing two witnesses from testifying remotely where unexpected reasons could not be demonstrated). It added further that “[c]ourts most frequently allow remote testimony in special circumstances, such as where a vital witness would be endangered or made uncomfortable by appearing in a courtroom.” Id.

Other federal courts have permitted remote testimony in situations where travel costs or distance would impose substantial hardship on a witness. See, e.g., Beltran–Tirado v. INS, 213 F.3d 1179, 1186 (9th Cir. 2000) (affirming use of telephonic testimony for a hearing in California where the witness was in Missouri); Scott Timber, Inc. v. United States, 93 Fed. Cl. 498, 499–501 (Fed. Cl. 2010) (approving use of video conferencing for a trial in Washington, D.C. where the witness was in Oregon); Lopez v. NTI, LLC, 748 F. Supp. 2d 471, 481 (D. Md. 2010) (holding that Honduran Plaintiffs would be allowed to testify at trial using video conferencing, but Plaintiffs from Virginia and Tennessee would be required to travel to Maryland for trial).

Some courts have commented on the advantages of video conference testimony as opposed to traditional ways of presenting prior testimony to a jury. Sallenger v. City of Springfield, No. 03-3093, 2008 WL 2705442, at *1 (C.D. Ill. July 9, 2008) (“Video conferencing allows the jury to view the witness as he testifies, and thus, it satisfies many of the goals of in-person testimony, while avoiding the shortcomings that accompany the reading of deposition testimony at trial.”). Still, other commentators discount the use of video conference testimony by questioning the extent to which a witness’ demeanor may be observed or point to the effect of a courthouse setting on facilitating truthful testimony. Thornton v. Snyder, 428 F.3d 690, 697 (7th Cir. 2005). See also Fredric I. Lederer, The Road to the Virtual Courtroom? A Consideration of Today’s-and Tomorrow’s-High-Technology Courtrooms, 50 S.C. L. Rev. 799, 841 (1999) (commenting on perceived deficiencies in the truth-finding process of remote testimony).

Therefore, counsel may be able to demonstrate the necessity of video conference testimony to a Georgia court in situations where unexpected reasons such as illness prevent live testimony, where the witness would feel endangered or uncomfortable, where travel costs or distance would impose substantial hardship, where video conference testimony may be more illustrative than traditional means of presenting prior testimony, or where there is little concern with a witness’ ability to be truthful. It is possible that each of these situations could be applicable while the risk of COVID-19 infection remains a widespread threat.

Beyond the question of whether video conference testimony at trial should be permitted, there are additional components of Georgia Uniform Superior Court Rule 9.2 that must also be satisfied. “A record of any proceedings conducted by video conference shall be made in the same manner as all such similar proceedings not conducted by video conference.” Ga. Unif. Super. Ct. R. 9.2(D). Thus, at trial, the court reporter in the courtroom may be able to record the testimony. The parties can also agree to have the video conference testimony video recorded and made part of the record. Id. Lastly, certain technical standards must be met, ensuring adequate video quality so that all parties can observe and see the participant’s demeanor and nonverbal communications. Ga. Unif. Super. Ct. R. 9.2(E).

Again, practitioners should look carefully at the requirements of Georgia Uniform Superior Court Rule 9.2 if seeking to use video conference testimony at trial. Yet, the unique health concerns of the COVID-19 pandemic may provide reason for a Georgia trial court to permit use of video conference testimony at trial in certain circumstances.

The Importance Of ‘Body Language’ Communication To Jurors

Larry Golston, a lawyer in our Consumer Fraud & Commercial Litigation Section, has these words of wisdom for our lawyer readers based on his experience as a trial lawyer. Let’s see what Larry has for us.

Actions speak louder than words. A soft and pleasant smile can draw people in and engage a listener just as a menacing frown can drive people away from a conversation. Nonverbal communication or “body language” is action and nowhere is this form of action more important than inside of a courtroom during trial.

During a trial, whether you are addressing the judge or examining a witness, all eyes are on you, the lawyer. Jurors are taking mental notes of your posture, your facial expressions and whether you appear bothered or annoyed by the evidence being presented. To be successful in trial, not only does a lawyer have to persuade jurors with an effective verbal presentation of the case, lawyers must be persuasive in how they present themselves. Their demeanor. Here are a few simple winning “body language” strategies to consider:

  • Image Is Everything – Maintain A Positive One. Even when a lawyer is not speaking during the trial, the jury is watching the lead lawyer daily – inside and outside of the courtroom. During most trials, jurors are not allowed to have cell phones, tablets or personal laptops. The trial and its participants are the main attraction and the jury’s only source of entertainment. The jury will notice everything a lawyer does and will draw inferences – positively or negatively – about a lawyer based on how he / she handles issues at trial. So, while being thoughtful, careful and nimble, make sure you are always professional.
  • Develop A Good “Poker Face” / Neutral Expression. A neutral and positive facial expression denotes honesty. The key to good courtroom demeanor for trial lawyers is to instill trust. Appearing nervous or uncomfortable can be interpreted as if a lawyer has something to hide or that he or she thinks certain testimony hurts their client’s case. Likewise, display a rude or unpleasant expression, and jurors will be less likely to trust you. Be yourself. If you are less than that the jury will certainly figure it out.
  • Be Cool, Calm & Confident At All Times. As a 1980s deodorant ad proclaimed, “Never let them see you sweat.” Everything that happens during trial should, as far as your demeanor is concerned, appear expected. Therefore, you should appear unbothered by adverse or opposing evidence. A slight smile and nod goes a long way in projecting confidence. In general, a subtle smile, used sparingly and at the right moment, looks friendlier and exudes more confidence than your natural expression does at rest. A key witness gives testimony that contradicts prior deposition testimony or statements? Subtle smile. Documents that were never produced during discovery are allowed at trial? Subtle smile. Getting angry or upset in the presence of the jury will only undermine their belief in the strength of your case. Instead, give a subtle smile at the right moment.
  • Kill Them With Kindness. Follow the Golden Rule of “do to others as you would have them do to you.” In general, kindness is a desirable trait. In trial, being kind and appearing as such has an added advantage: simply, people like other people who are kind. Kindness also carries with it a presumption that a person is good. Being liked by jurors and being perceived as a good person increases your chances of success in court. If jurors believe a lawyer is fundamentally a good person, they will trust his/her words, impute good motives to your client’s case and give that lawyer and client the benefit of the doubt on “toss-up” evidence. On the flipside, if a lawyer is rude and even arrogant, they will be viewed as untrustworthy in the eyes of the jurors and jurors will disregard or impute negative motives to everything that lawyer says and does in court.
  • Be Authentic. Do not try to mimic other lawyers that are mentors or lawyers who are renowned trial lawyers. Nothing sends a message that a person is a fake louder than observing someone who is trying hard to act like something they are not. Be true to your own style of trying cases and trust your instincts. Jurors can spot a fake, easy.
  • Watch Your Delivery. Jurors need good communications from the lawyers. Always make sure your tone is respectful and use the same tone with the Court and opposing counsel. The delivery of your words must be clear, deliberate, concise and at a pace that the jurors grasp your message.

In summary, your body language is a vital aspect of communication during a trial. The way you appear before the jury and the judge will either substantially help your chances in winning at trial or substantially hurt your chances.

RECALLS UPDATE

There have been a large number of safety-related recalls during April. However, this month we are not including the recalls in the Report. Instead, we are making the recalls available on our firm’s website. You can review the recalls by going to https://www.beasleyallen.com/news/recalls-alert-consumers-to-potential-product-dangers/.

FIRM ACTIVITIES

Employee Spotlights

Mike Andrews

Mike Andrews is a lawyer in the firm’s Personal Injury & Products Liability Section. A majority of Mike’s practice involves complex product liability cases involving serious injury or death. He has handled numerous cases against manufacturers of aircraft, light and heavy trucks, automobiles, and agricultural and construction equipment. Mike has received several seven- and eight-figure settlements and jury verdicts.

Mike enjoys highly technical cases and says he has a particular passion for working on behalf of injured children along with an interest in cases involving traumatic brain injuries. Mike says he became a lawyer as an expression of his empathy for others who are in need. He believes that the “least among us” are the ones that deserve the most representation and advocacy.

Currently, Mike represents families of Ethiopian Airlines flight 302 victims involving the Boeing 737 MAX aircraft. Previously, his natural proclivity for and understanding of mechanical engineering concepts was instrumental in the litigation related to General Motors (GM) defective ignition switches. The litigation team in that litigation discovered that the switches could move from the “run” to the “accessory” or “off” position while the vehicle is in operation, resulting in a loss of power. This disabled power steering, brakes, and could disable the airbags, just when a motorist needed them most, resulting in the drivers losing control of the vehicle and crashing. Both cases have centered on product defects that the manufacturers attempted to cover up.

It is these types of cases that require Mike to solve complex puzzles surrounding engineering defects. Mike says those are his favorite cases and what he enjoys most about practicing law. He takes the facts he learns handling those cases and uses the knowledge to hold corrupt, greedy and irresponsible manufacturers accountable for the results of their defective products.

Another example of Mike’s work on such a complex case involved a nurse who was seriously injured in a car accident when she was driving a 2004 Volkswagen Passat. Mike and another Beasley Allen lawyer, Kendall Dunson, received an $8 million verdict on behalf of the nurse after discovering a defect in the car’s design that resulted in an uncontrolled vehicle runaway. The client’s medical expenses alone exceeded $650,000.

Similarly, Mike was on the trial team that received a verdict in Mobile for a young man paralyzed in a heavy truck rollover. The jury awarded $18.8 million, $5 million of which was awarded as punitive damages. The trial team entered into a high/low agreement while the jury deliberated, resulting in a payment to the client of $14 million. There were also partial settlements in the case before trial for confidential amounts.

As an author and speaker, Mike has had the opportunity to share his experience in a variety of products liability cases. He authored “Aviation Litigation & Accident Investigation,” which discusses the complexities of aviation crash investigation and litigation. Mike also authored “Planes, Trains, Automobiles and Escalators” in which he discusses the alarming frequency of childhood injuries caused by poorly designed and maintained escalators.

An award-winning lawyer, Mike’s aviation litigation work has been recognized by the National Trial Lawyers, which selected him to the Top 10 Aviation Attorneys in the United States. Membership is by invitation only and is extended to most qualified attorneys for each state or region. He is also a Martindale Hubbell AV Rated attorney. Mike was selected as Beasley Allen’s 2017 Litigator of the Year and in 2015 was Beasley Allen Lawyer of the Year for the Personal Injury & Products Liability Section.

Similar to his commitment to his clients, Mike is equally committed to improving the lives of those in his community and beyond. He currently serves on the University of Alabama at Birmingham (UAB) Transportation Safety Advisory Board, Board of Directors for Houston County Girls Inc. Mike is the President of the Board of Directors for the Alabama Head Injury Foundation.

In reflecting on how Beasley Allen has shaped his law practice, Mike said that he appreciates the resources, knowledge and experience the firm has provided over the years. However, he said he is “thankful most of all for the culture of integrity, doing the right thing and putting clients’ needs first,” which fits naturally with his own values.

Mike and his wife, the former Carol Benton, were reared in Dothan, Alabama. They have three children: Shelby, David Michael II and Jack. Mike and his family attend First Baptist Church in Dothan. Also of note, Mike is a photographer whose work has received both local and national awards.

We are blessed to have Mike at Beasley Allen. He is a talented lawyer who is totally dedicated to his clients in their pursuant of justice. Without the important work done by our investigators, the firm’s lawyers could not be as successful in trials as has been the case.

Charles Duffee

Charles Duffee, an Investigator within our Personal Injury & Products Liability Section, has been with the Firm for 20 years. In his job, Charles inspects vehicles for product defects, photographs and measures scenes and interviews law enforcement officers and witnesses.

Charles and his wife Linda have been married for 37 years and have two children and two grandchildren who are 5 and 11 years old. Charles’ son Brian works for Edwards Plumbing and his daughter Morgan teaches 5th grade at Millbrook Middle School. Charles grew up in Montgomery County, but now calls Elmore County home.

In his spare time, Charles enjoys deer hunting in Elmore County, working in the yard and spending time with his family, especially his grandchildren.

When asked what his favorite thing is about working at Beasley Allen, Charles said, “Working with other investigators who I worked with at the Montgomery Police Department. I also enjoy how our work is different from day to day.”

We are fortunate to have Charles, a hard-working dedicated employee, with us. The role of an inhouse investigator at Beasley Allen is critically important.

Don Gilliland

Don Gilliland has been with Beasley Allen for 10 years. He is a Senior Web Developer and he helps create strategies to meet the firm’s marketing goals using various marketing technologies and building websites as needed. Don researches new social media platforms, marketing services, and other technologies to determine if and how they can be useful to the firm. Also, he researches our competitors to see how they are marketing their firms, how their efforts compare to ours, and where Beasley Allen can improve our efforts.

Don and his wife Terri have been married for 14 years. They have two daughters, 9 and 2. He also has two “fur-babies” that are just as spoiled as their other babies. Don says he loves music, especially creating it. He plays guitar and other instruments. His family is very involved at his church The Church at Eastern Oaks. Don plays guitar with the praise band. Don says he enjoys reading and “learning new ways of doing old things.”

Don says his favorite thing about working at Beasley Allen is the people. “My coworkers are awesome! I do not have many opportunities to interact with employees outside of Marketing, but from the interactions that I’ve had, I realize the firm has a lot of great people working here.”

Don has an important job. His work for the firm is essential and he does it very well. We are blessed to have Don with us.

Steve Youngblood

Steve Youngblood, an Information Technology Specialist, has been with the Firm since 2001. Steve does a little bit of everything and wears many hats such as helping our staff and lawyers resolve Tech Support issues. He also makes sure that all of our “New Hires” have the necessary computer equipment they need on their first day. Steve helps to make sure that IT Special Projects run smoothly and are completed in a timely manner.

Steve is married to Kimberly who also works for the Firm. They have been married for 15 years and have two sons, Stephen Jr. and Christopher, and two grandsons and a granddaughter. Stephen Jr. is a Lieutenant with the Millbrook Police Officer and Christopher is Sergeant with the Montgomery Fire Department. They also have a 10-year-old Rottweiler named Storm.

Steve loves spending his weekends outdoors, especially target shooting and flying drones. Steve looks forward to his family’s weekly Friday night dinner dates where they get to spend time with all the children and grandchildren.

When asked about his favorite thing about working at Beasley Allen, Steve said it is the comradery. He says “the IT guys have been working together for many years and have become more like family.”

Steve, a dedicated employee, has an important job in the firm. He works hard in that role. We are fortunate to have Steve with us.

SPECIAL RECOGNITIONS

Recognizing Important Role Of Essential Workers

Unprecedented times call for communities to come together in ways we never thought necessary. Under the threat of COVID-19 Alabama is under a mandatory “stay at home” order through the end of April, at least. While not as restrictive as “shelter in place” laws, everyone is being encouraged to stay home as much as possible, to limit contact with other people, to practice social distancing – maintaining at least six feet between yourself and others – and to wear masks to avoid spreading the novel coronavirus.

Some folks are blessed to be able to work from home, with small changes in their daily routine like taking meetings to the phone or video conferencing. Small businesses like restaurants and retail shops employed new ways to serve their customers, with many offering take-out and curbside services, or home delivery of products.

But many more cannot work from home, or are “essential workers” and vitally needed for our communities to keep operating. In particular, frontline responders – doctors, nurses and medical support staff; police officers, dispatchers, emergency medical technicians and firefighters – are working extra hard during the coronavirus pandemic to keep Montgomery running smoothly and safely.

Even in the best of times, these roles are stressful, involving unpredictable situations, long hours and high risks. These are far from the best of times. Yet, there they are. These dedicated individuals are stepping up without hesitation to take care of those who need help.

It has been encouraging to see our community reaching out to offer a heartfelt “thank you” in whatever way we can. Beasley Allen has been working in both Montgomery and Atlanta to look for ways to help, from delivering meals to health care workers and firefighters, to partnering with local restaurants to not only support these locally owned businesses but to also raise awareness and funds for hunger-relief organizations to help those unable to buy a healthy meal.

Who has time to think about dinner plans when you are doing everything you can to make it through such long hours and then thinking about how your own family will be affected, or who doesn’t know where they will get the money to keep a roof over their heads? We at Beasley Allen are privileged and honored to play a small part in making life a little bit easier for those who are working so hard to help protect our communities. It’s what we stand for – “helping those who need it most” has been our firm motto from the beginning and is something we work toward every single day.

I am reminded of the Bible verse I recently shared with all the folks here at the firm:

From everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked. Luke 12:48

Law360 Selects Dee Miles For Editorial Board For Third Year

Dee Miles, the head of the firm’s Consumer Fraud & Commercial Litigation Section, has been selected to serve on the 2020 Product Liability editorial advisory board for the legal news publication Law360. Members of the editorial advisory board provide feedback on Law360’s coverage and gain insight from experts in the field about how to best shape future coverage.

Law360 is a trusted news source for legal professionals, business leaders, and government officials. The publication covers breaking legal developments with real-time alerts and key daily developments in legal news including litigation, policy developments, corporate deals, and more across 60 practice areas, industries and jurisdictions. More than 1 million subscribers receive the Law360 newsletter every day.

Dee joined Beasley Allen in 1991 and he has been a pioneer in the area of consumer fraud and commercial litigation nationwide. Dee has demonstrated great leadership resulting in the firm’s numerous record-setting verdicts for clients in many areas of law.

Dee is a proven leader in complex litigation. In addition to representing clients in litigation, Dee manages the entire Consumer Fraud & Commercial Litigation Section of the firm. He is involved in every case being litigated in the Section. Dee has been appointed by federal district judges to serve in a leadership role for the Plaintiffs in numerous Multidistrict Litigations (MDLs) throughout the country, charged with the responsibility of coordinating the litigation for the entire country on certain cases such as the VW “Clean Diesel” Marketing, Sales Practices and Product Litigation MDL, Chrysler- Dodge-Fiat Ecodiesel Marketing Sales Practices, Toyota sudden unintended acceleration MDL, Target Data Breach MDL, the Home Depot Data Breach MDL, the Blue Cross Blue Shield Antitrust MDL and the Takata airbag MDL, to name a few.

Dee also regularly represents state attorneys general in various states throughout the country on a variety of litigation.

A Martindale Hubbel AV rated attorney, Dee has been named to the 2013-2015 Lawdragon 500 Leading Lawyers; selected annually to the “Best Lawyers in America” list; selected by Alabama Best Lawyers; and selected to Alabama Super Lawyers for consecutive years. He was honored by the lawyers in this firm as “Litigator of the Year” in 2008. Dee also was selected as a “2013 Top Rated Lawyer in Commercial Litigation” by Martindale Hubbell and American Lawyer Media, featured in The American Lawyer, and Corporate Counsel magazine.

Ben Baker Works With ALAJ In Legislative Efforts

When it comes to any public policy work, it takes a village. That saying certainly comes to life when you are talking about the work that the Alabama Association for Justice (ALAJ) does legislatively every year. It is vitally important to not only monitor what is going on at the State House, but to take an active role.

It is the mission of the ALAJ to “preserve and protect the constitutional right to a trial by jury guaranteed by the Seventh Amendment to the United States Constitution by ensuring that every person or business harmed or injured by the misconduct or negligence of others can hold wrongdoers accountable in the one room where everyone is equal – the courtroom.” A key component of that mission is the Association’s work in the legislature.

The crux of ALAJ’s legislative village weighs heavily on its newest officer. By virtue of the position, that individual is responsible for reading all of the legislation that is introduced. This year Beasley Allen lawyer Ben Baker, who is serving as Treasurer, is that person. The following is what Ben has done to date.

  • He has reviewed 457 bills introduced in the House and 323 bills introduced in the Senate.
  • He has worked hand-in-glove with ALAJ President Josh Hayes to manage the 149 pieces of critical legislation that affects the efforts of our membership to protect Alabamians and the 7th amendment to the constitution.
  • Addressed issues including safe buildings, access to firearms, drones, judicial vacancies, personal information, game meat, “born alive,” judges with guns, wiretapping, terrorism, every compact, and now COVID 19.

The list of 149 bills only represents what has been introduced prior to the COVID-19 lockdown. Ben has either rewritten the troublesome bills or amended them to help ALAJ work with all legislators on their projects. As legislators prepare to come back into session, Ben is gearing up to review even more bills. Josh Hayes, ALAJ President, had this to say:

Ben has truly worked tirelessly to help our association have a seat at the table to work on important issues. Ben has brought together other members of our organization to work with us to handle issues across so many different spectrums. He is a brain trust of multiple areas of the law volunteering every week during the session to help protect the work that all of our members cherish. Yes, it takes a village and we are so blessed that Ben Baker is a leader in ours!

Ben works in the firm’s Personal Injury & Products Liability Section. Although Ben’s practice has always focused on products liability and crashworthiness cases throughout his legal career, he also handles claims involving nursing home litigation, aviation crashes and construction injuries. He has received verdicts and settlements in numerous crashworthiness cases that have resulted in multi-million-dollar recoveries for his clients.

Ben also is the author of a book, Tire Litigation: A Primer. The book, which is free to lawyers, is designed as a guidebook to evaluating tire litigation. Although tire failures, blowouts and detreads are foreseeable and preventable events, all too often consumers are unaware of the potential dangers from defective, old or degraded tires.

The mission of the ALAJ is an important one. Ensuring the strength of the judicial system is a way of leveling the playing field, and providing access to justice for everyone. As lawyers, we have a unique ability and, therefore, a unique responsibility to work to bolster a fair and effective judicial system, and working with our elected officials is a critical part of that, to ensure the rule of law is just.

Ben is a hard-working and successful lawyer, and we are blessed that he is a part of our firm. His work with ALAJ will benefit all Alabama citizens, especially consumers.

FAVORITE BIBLE VERSES

Ben Locklar, a lawyer in our Personal Injury & Products Liability Section, furnished a verse for this issue. Ben says:

It goes without saying that we are living in historic times. Life is very different for us all.

During this time when we are “forced” to spend more time in our homes and with our family, we can consider it a curse or a blessing. I hope that each of us is using this time to examine our hearts and to confirm that we are in the faith. The word of God tells us to “test” ourselves. How do we do that? For me, I am praying more, studying God’s word more, working on relationships so that they are deeper and more established, and just spending time praising God. While I enjoyed my routine before COVID-19, I am so thankful for some time to just focus on Christ. It is a blessing to me.

In testing myself, I know that Christ Jesus is in me. Do you? I pray that we all come to know, receive, and express Christ in all we do and every aspect of our lives.

For to be sure, Christ was crucified in weakness, yet he lives by God’s power. Likewise, we are weak in him, yet by God’s power we will live with him in our dealing with you. Examine yourselves to see whether you are in the faith; test yourselves. Do you not realize that Christ Jesus is in you – unless, of course, you fail the test? 2 Corinthians 13:4-5

Mike Andrews, who is also a lawyer in our Personal Injury & Products Liability Section, also supplied a verse for this issue. Mike says that he has always liked Isiah 6:8, particularly in the context of our work at Beasley Allen.

Then I heard the voice of the Lord saying, “Whom shall I send? And who will go for us?” And I said, “Here am I. Send me!” Isaiah 6:8

My friend Dr. Terry Stallings sent in some scriptures for this issue. He says:

I just finished reading the “Jere Beasley Report” and as always, I enjoy the bible verses submitted. I am sending you a couple of verses for a future issue that I hope will be meaningful during this unprecedented time. We must rely on our faith in Jesus Christ, which as James 1:2-4 states, will lead to patience. We must be patient and follow the guidelines to the letter, and allow our faith first, and science and data second, to determine when to open our economy.

My brethren, count it all joy when you fall into trials, knowing that the testing of your faith produces patience. But let patience have its perfect work, that you may be perfect and complete, lacking nothing. James 1:2-4

Terry says “The Prophet Isaiah tells us in Chapter 41:28-31 that God will provide us strength and comfort that will get us through all trials and tribulations, including the Coronavirus pandemic.”

Have you not known? Have you not heard? The everlasting God, the Lord, the Creator of the ends of the earth, neither faints nor is weary. His understanding is unsearchable. He gives power to the weak, and to those who have no might He increases strength. Even the youths shall faint and be weary, and the young men shall utterly fall, but those who wait on the Lord shall renew their strength; they shall mount up with wings like eagles, they shall run and not be weary, they shall walk and not faint. Isaiah 40:28-31

CLOSING OBSERVATIONS

U.S. Senators Face Criticism Over Stock Sales Ahead Of Covid-19 Market Dive

U.S. markets tumbled from late February through March due to growing fears over the novel coronavirus (which causes COVID-19). As the infection spread, governments all over the world took measures to contain the virus that would have dire effects on the world economy. When the extent of those measures became public, the impact caused markets to crater. Investors watched all three major U.S. indices fall by at least 30% in the span of about four weeks. However, just before the fall, several U.S. Senators: Richard Burr (R-North Carolina), Dianne Feinstein (D-California), James Inhofe (R-Oklahoma), Kelly Loeffler (R-Georgia), and David Purdue (R-Georgia), sold off large holdings in companies affected by the virus, raising calls for investigations and even for their resignations.

Securities regulation in the United States was enacted during the Great Depression to protect American markets and with the goal of making them fair and safe for all investors. The Securities Act of 1933 and the Securities Exchange Act of 1934 did so by requiring the registration of securities offerings with the U.S. Securities and Exchange Commission (SEC), mandating truthful and complete disclosure of material information that a reasonable investor would want to know, and by broad anti-fraud provisions creating a cause of action for those who fall victim to fraud in the markets.

Trading on the basis of material, non-public, information had been ruled a fraud by the U.S. Supreme Court as early as 1909, but the anti-fraud provisions of 1933 and 1934 Acts strengthened enforcement. Later, the Insider Trading Sanctions Act of 1984 and the Insider Trading and Securities Fraud Enforcement Act of 1988 created stiff penalties, as much as three times the amount of profit gained or loss avoided from the illegal trades.

For years, however, these insider trading rules did not apply to members of Congress, because even though they have daily access to non-public information by virtue of their jobs, they technically were not part of the corporation. That changed with passage of the Stop Trading on Congressional Knowledge Act (STOCK Act) in 2012, after a scathing 60 Minutes segment on the practice in 2011. The STOCK Act applied insider trading principals to members of Congress, the Executive Branch, and their staff. It also mandated disclosure of trades made by members of Congress. Consider the following fact situations and ask whether they meet “the smell test.”

On Feb. 2, 2020, Sen. Burr (Chairman of the Senate Intelligence Committee) received a briefing about how other countries were dealing with the Covid-19 threat. He received another briefing on Feb. 12 from health experts about potential impact in the U.S. The next day, Feb. 13, 2020, Sen. Burr liquidated somewhere between $628,000 and $1.7 million in stocks, according to Senate disclosure forms required under the STOCK Act.

Sen. Loeffler attended a closed-door briefing on Covid-19 in January, and then, with her husband, sold off as much as $20 million just prior to the crash. They also purchased tech stocks involved in teleconferencing.

Senator Feinstein sold a single holding valued at somewhere between $1 million and $5 million. Loeffler and Feinstein both assert that a third party manages their investments without their input or control.

While they executed these trades with the information they had, the public was being told by persons in high places in government that the virus “will just disappear.” Sen. Burr joined President Trump in publicly stating that the virus was being over-hyped and was not such a severe threat, but privately he spoke to a nonpartisan political club about the potential economic dangers faced from the virus. Senator Burr’s trades, particularly, stand out compared to other disclosures he has filed pursuant to the STOCK Act. His disclosure reads like a fire sale, cashing out 33 positions while not purchasing anything to replace the investments.

While the disclosures are not conclusive evidence of wrongdoing, they certainly warrant investigation. The STOCK Act provides both civil and criminal penalties for violations, and a conviction could prevent the offender from holding public office again. Sen. Burr has called for an investigation into his own trades to clear his name, but one has to wonder how motivated “the Barr DOJ” is to go after a vocal supporter of President Trump. Time will tell whether the STOCK Act continues to provide any protection for the public or accountability for members of Congress, and whether those in power have to play by the same rules as the rest of us.

Our Monthly Reminders

If my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then will I hear from heaven and will forgive their sin and will heal their land.

2Chron7:14

All that is necessary for the triumph of evil is that good men do nothing.

Edmund Burke

Woe to those who decree unrighteous decrees, Who write misfortune, Which they have prescribed. To rob the needy of justice, And to take what is right from the poor of My people, That widows may be their prey, And that they may rob the fatherless.

Isaiah 10:1-2

I am still determined to be cheerful and happy, in whatever situation I may be; for I have also learned from experience that the greater part of our happiness or misery depends upon our dispositions, and not upon our circumstances.

Martha Washington (1732 – 1802)

The only title in our Democracy superior to that of President is the title of Citizen.

Louis Brandeis, 1937
U.S. Supreme Court Justice

Injustice anywhere is a threat to justice everywhere.

There comes a time when one must take a position that is neither safe nor politic nor popular, but he must take it because his conscience tells him it is right.

The ultimate tragedy is not the oppression and cruelty by the bad people but the silence over that by the good people.

Martin Luther King, Jr.

The dictionary is the only place that success comes before work. Hard work is the price we must pay for success. I think you can accomplish anything if you’re willing to pay the price.

Vincent Lombardi

Kindness is a language which the deaf can hear and the blind can see.

Mark Twain (1835-1910)

“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country… corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”

U.S. President Abraham Lincoln, Nov. 21, 1864

In his December 1902 State of the Union address, Theodore Roosevelt said of corporations: “We are not hostile to them; we are merely determined that they shall be so handled as to subserve the public good. We draw the line against misconduct, not against wealth.”

The ‘Machine politicians’ have shown their colors… I feel sorry for the country however as it shows the power of partisan politicians who think of nothing higher than their own interests, and I feel for your future. We cannot stand so corrupt a government for any great length of time.”

Theodore Roosevelt Sr., December 16, 1877

“The opposite of poverty is not wealth; the opposite of poverty is justice.”

Bryan Stevenson, 2019

PARTING WORDS

We Will Survive – But Battling The Coronavirus Pandemic Demands Unity

As the novel coronavirus pandemic widens across the United States, politicians at all levels, from city councilmen to the President of the United States, must abandon partisan bickering and rhetoric if we are to defeat this viral outbreak with a unity of purpose that mitigates further loss of life and economic hardship.

When faced with a common enemy, the saying “all hands on deck” is the common-sense approach. Following the lead of doctors, researchers, and public health experts with experience in containing public health outbreaks has to be the very first order of business.

A recent article by Politico laid bare some of the “multifaceted, personal and stubborn” disputes among our leaders in Washington that have impeded our coronavirus response efforts.

This is not the time to listen to grandstanding politicians, nor is it the time for name calling and finger pointing. Staying focused on the crisis, developing treatments and a cure, and getting the economy back on track are common goals we must unite behind. This will be a costly battle, so the more we keep our attention focused on the problem, the better off we will be.

That’s not to say differences of opinion can’t arise when trying to determine the best course of action, but those differences should be hammered out with facts and reason, not party pandering. Now is the time for our elected officials from City Halls to the Oval Office to show true leadership. That includes President Trump, members of Congress, governors and county officials.

Public health experts around the world are calling for global solidarity, unity and cooperation in taking on this global health threat. “It’s an absolute tragedy to see such a solidarity missing from our response to COVID-19,” wrote two Yale School of Public Health doctors in an April 9 opinion.

Facing a global health threat like the coronavirus pandemic is an opportunity to build bridges and strengthen relationships, yet we are seeing the opposite. Calling the coronavirus a Democratic hoax or by labeling it the “Chinese virus” may galvanize a political base, but that sort of rhetoric won’t strengthen global coordination in finding a cure. Withdrawing funding from the World Health Organization (WHO) in the middle of a pandemic may serve a political purpose, but it weakens our national and global alliances as well as our pandemic response. Mocking and threating states and governors over their handling of the outbreak only generates more political hate and division.

We need the kind of leadership and vision that united us in our response to 9-11 and the economic crisis of 2008-2009 if we are to effectively tackle the coronavirus pandemic. We don’t need to turn Americans against Americans and nations against nations. Going that route will only prolong the pandemic and worsen the path of destruction it leaves behind.

My prayer is for unity, cooperation and bipartisanship at all levels of government and for the public health needs of the American people to be the top priority for all of our political leaders. The American people will meet the challenge – but will the politicians? I pray that all of them will. May God bless America!

Sources: CNBC, Politico, UN News, Hartford Courant