The Jere Beasley Report November : 2020

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CAPITOL OBSERVATIONS

Richard Shelby: A National Treasure

Richard Shelby and I graduated from the University of Alabama School of Law within a year of each other in the early 1960s. We started our legal careers as young lawyers in Tuscaloosa, becoming close friends over the next few years. Public service became of interest during that time for both of us. While my stint in politics was relatively short and relatively unproductive, my friend from Tuscaloosa has become a true statesman in every respect, representing Alabama in Congress with great distinction.

Richard Shelby is Alabama’s longest serving United States Senator, currently serving his sixth term. He is currently Chairman of the Senate Appropriations Committee, having served as Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, and the Senate Committee on Rules and Administration. He is universally recognized as the second most powerful person in the nation’s capital, with only the person serving as president being more powerful.

This is a distinction Sen. Shelby takes seriously, opining on matters of national importance with careful consideration of the weight of his words. He is unafraid to make decisions and provide guidance according to his genuine estimation of the full matter, with an ear to the constituents he represents, regardless of following party line. Although he may often agree with the colleagues on his side of the aisle, he is not afraid of contradiction in the best interests of Americans and Alabamians.

Before he was first elected to the United States Senate in 1986, Shelby had a storied career. While he was a very good lawyer, his political career has truly been quite remarkable and outstanding.

In 1970, Shelby was elected to the state senate. Eight years later he landed in the U.S. House of Representatives, which paved the way four terms later to his being elected to the U.S. Senate. Sen. Shelby is recognized as being a faithful and dependable representative for the people of Alabama. Richard Shelby has been the most popular public figure in Alabama for decades.

Sen. Shelby made a decision early in his career to serve the people of Alabama as an elected official. He has spent the last 40 years as a public servant in the truest sense of the term. He has done more for Alabama – all positive and constructive – than any other elected official in my lifetime, doing his job in a manner that has helped all Alabamians economically and socially. I don’t believe his tenure in the U.S. Senate will ever be matched again, either in productivity or longevity. To say the man is a “national treasure” is an apt and well-deserved recognition. I can say without reservation that the State of Alabama would not be where it is today economically but for Sen. Shelby’s love for his state, his tireless efforts and his tremendous leadership.

In closing, I will say that we need more men and women in public office like my friend Richard Shelby. He is a tremendous role model for any young person who might be looking to serve in public office.

AN UPDATE ON DRAM SHOP LITIGATION

Mobile Greyhound Park Settles Case Involving Fatal DUI Crash

Mobile Greyhound Racing has settled a lawsuit involving a fatal wreck caused by a customer who became intoxicated at the dog track shortly before the 2015 crash. The settlement on Oct. 13 came at the conclusion of a trial and before a Mobile County Circuit Court jury delivered a $12.4 million verdict against Mobile Greyhound Racing. Beasley Allen lawyers Graham Esdale, Kendall Dunson and Cole Portis represented the Plaintiff Katerial Wiggins whose finance’ died in the crash.

Mobile County Circuit Judge Wesley Pipes ruled on Oct. 15 that the settlement was binding and enforceable and did not allow the jury to read the verdict in open court. The case is based on Alabama’s Dram Shop Act. Willie McMillian drank alcohol at Mobile Greyhound Park on June 6, 2015. After leaving the dog track, he crashed his vehicle into the rear end of a car driven by Ms. Wiggins on Interstate 10 in Mobile County. Ms. Wiggins’ fiancé, Dominic Turner Sr., and their son, Dominic Turner Jr., were in the backseat of the vehicle. Dominic Turner Sr. was killed. Both Dominic Jr. and Ms. Wiggins were injured.

McMillian pleaded guilty to reckless murder and received a 15-year sentence.

Ms. Wiggins filed the lawsuit in 2016 against Mobile Greyhound Racing and other entities under the Dram Shop Act, which is intended to hold businesses liable if they sell alcohol to a person visibly intoxicated and that person later causes injury or death to another person.

This case had gone to the Alabama Supreme Court before the trial was held. Ms. Wiggins lost an earlier round. The trial judge granted a motion by Mobile Greyhound Racing for summary judgment and dismissed the case.

Ms. Wiggins appealed to the Alabama Supreme Court, which overturned that decision in May 2019, sending the case back to Mobile County Circuit Court for trial. Stephanie Monplaisir, a Beasley Allen lawyer, successfully handled the appeal for our firm.

After several days of trial, the jury began deliberating on Oct. 12. The next day, our lawyers reached a settlement with Mobile Greyhound Racing. Subsequently, the jury informed the court it had reached a verdict. Judge Pipes allowed the Beasley Allen lawyers to speak to the jurors about the verdict. The jurors told the lawyers what they had done and that they had already filled out a verdict form when the case was settled.

The settlement amount is confidential, but it was less than the amount of the verdict. The outcome of the case with the verdict and settlement sends the right message. Graham Esdale, one of the lawyers, says:

In my client’s mind, she has been through a whole lot and did not want to continue on with the appeals process. In hindsight, she may have thought it may be worth it for that kind of verdict. But she needed some finality. She was ready to move on. This has been five years since this accident happened. She needed some finality and something that would help provide for she and her young son.

Mobile Greyhound Racing is a limited liability partnership that is affiliated with the Poarch Band of Creek Indians. The lawsuit initially named the Poarch Band, Creek Indian Enterprises, and PCI Gaming as Defendants, but they were dismissed from the case.

Our firm has another very similar case set for trial in early January 2021 in Elmore County, Alabama, against Wind Creek Casino and Hotel, PCI Gaming and other Defendants. In that case, a drunk employee of Wind Creek crashed into the vehicle occupied by our clients.

If you have any questions relating to the Mobile case, contact Graham Esdale at 800-898-2034 or by email at Graham.Esdale@beasleyallen.com. Mike Crow, the lead lawyer on the Elmore County case, can be reached at 800-898-2034 or by email at Mike.Crow@beasleyallen.com.

THE TALC LITIGATION

Talcum Powder Litigation Update

The Beasley Allen Talc Litigation Team has continued to advance the litigation over the last month. The multidistrict litigation (MDL) team continues moving forward with case-specific discovery for the Plaintiffs selected for the bellwether pool. Discovery efforts, including treating doctor and witness depositions, will be completed by the end of January. The team is also pushing forward with additional liability discovery. Over the next several months, the team is working to set depositions for multiple Johnson & Johnson corporate witnesses.

In state court, Beasley Allen currently has 10 cases set for trial in 2021 after many cases originally scheduled to go to trial in 2020 were rescheduled due to the coronavirus pandemic. In Illinois, the Cadagin trial setting has been moved to Jan. 4 and will be the first case tried next year. The next case that should be tried in 2021 is the multi-Plaintiff trial in St. Louis, Missouri, which involves three Plaintiffs and is set to begin in mid-February. The team is working to schedule additional potential trial settings in St. Louis throughout the rest of 2021.

In Philadelphia, the Kleiner trial has been pushed to 2021, and will be tried as soon as the coronavirus situation allows. In Atlanta, endeavors continue with the Brower retrial and any additional settings likely being moved to 2021 at this point.

Along with multiple trials already set in Missouri, Illinois and Pennsylvania for 2021, the team is continuing to look at Atlantic City and South Florida as potential venues for additional trials in 2021.

For additional information on these cases, 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.

Johnson & Johnson Settles 1,000 Talc Lawsuits

In early October, Johnson & Johnson (J&J) agreed to settle more than 1,000 talc lawsuits for more than $100 million. The agreement was made between several Plaintiff law firms representing women who had filed either ovarian cancer or mesothelioma lawsuits against J&J based on their use of the company’s Baby Powder. With more than 20,000 similar lawsuits pending against the company, this appears to be the first group settlement the company has reached that includes ovarian cancer claims. We know that Plaintiffs firms Simmons Hanly Conroy, Simon Greenstone Panatier PC and the Lanier Law Firm were involved in the settlement.

We are pleased that J&J would make this initial step toward settling the talc cases globally. It’s most interesting that J&J would make a move to settle these claims in light of the ongoing litigation showing the link between the company’s talc-based body powders and ovarian cancer. This settlement does not affect Beasley Allen’s ongoing representation of ovarian cancer victims in state courts across the nation, including 10 cases currently set for trial in 2021, nor does this news affect the more than 17,000 cases consolidated in the multidistrict litigation in New Jersey. As the nation’s courtrooms begin to reopen, our lawyers and support staff are fully prepared to seek justice for these women and their families.

Update On Legislative Efforts To Ban Asbestos

A bill to ban asbestos has stalled in Congress in the midst of a partisan fight. The Alan Reinstein Ban was expected to go through the voting process with minimal controversy; however, now Democrats and Republicans accuse each other of hindering the bill’s passage. It’s quite obvious where the real blame lies and that will be explained below.

Progress on the bill was stalled because GOP lawmakers objected to a provision assuring the legislation would not impact ongoing litigation over talcum powder injuries and deaths. Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) said:

Everyone should be able to support a ban on this known carcinogen, which has no place in our consumer products or processes. More than 40,000 Americans die every year from asbestos exposure…. Republicans walked away from this opportunity to ban asbestos merely over language that prevents shutting the courtroom door. This raises serious questions about the sincerity of their intentions.

It was obvious that the GOP opposition came from the very corporate wrongdoers – including Johnson & Johnson – that have caused thousands of deaths. The Republicans admit their only issue with the bill is a provision they claim will increase litigation.

Asbestos causes a number of severe health conditions such as lung cancer, mesothelioma and asbestosis, yet asbestos continues to be used in products despite its grave dangers. The bill bars the production, use and importation of asbestos, banning asbestos within a year of its passage, with very minimal narrow exceptions. Additionally, the bill would amend the Toxic Substances Control Act, which does not concern the cosmetic uses of asbestos currently being challenged in court.

Many women have been successful in proving that their ovarian cancer was tied directly to the use of baby powder containing talc powder. The now controversial clause was simply to make sure nothing in the bill would block women, mainly minority females, from bringing suits over harm from cosmetic talc. Nevertheless, Republicans are trying to protect the very corporations that have been and continue to be wrongdoers.

Source: The Hill

Happenings In Imerys Talc America’s Chapter 11 Plan

The Office of the U.S. Trustee has urged the Delaware bankruptcy court to reject Johnson & Johnson talc supplier Imerys Talc America’s Chapter 11 plan voting solicitation statement, saying inadequate information has been provided about protections against fraud and abuse of a personal injury trust at the center of the bankruptcy. The Trustee’s filing to U.S. Bankruptcy Judge Laurie Selber Silverstein said that an amended Chapter 11 plan submitted by Imerys is “not confirmable” because it lacks “safeguards to protect the recoveries” to be received by talc personal injury claimants.

The trustee argues Imerys’ Chapter 11 disclosure statement does not provide creditors “with adequate information because it does not disclose or explain the amended plan’s lack of safeguards against fraud or abuse.” Nor does the statement explain or justify the fact that under the amended plan numerous claims may be paid that would not have been viable and that have not historically been paid in the tort system. This, according to the trustee, would subject all other legitimate claimants to a “risk that their claims will be diluted.” Also, the trustee said Imerys has still left out certain information about who will implement trust distribution procedures under the plan.

The trustee also contends that “a lack of transparency in the claims process proposed for the trust may make it difficult, if not impossible, for interested parties to monitor which claims are being paid and which are being denied, and whether the fiduciaries of the trust are acting in a manner consistent with their fiduciary duties.”

The Office of the U.S. Trustee is represented by Linda Richenderfer and Juliet Sarkessian. The case is In re: Imerys Talc America Inc. et al. (case number 1:19-bk-10289) in the U.S. Bankruptcy Court for the District of Delaware.

Source: Law360.com

Beasley Allen Talc Litigation Team

Beasley Allen lawyers Ted Meadows and Leigh O’Dell head up the Beasley Allen Talc Litigation Team. The team handles claims of ovarian cancer linked to talcum powder use for feminine hygiene. Lawyers Will Sutton and Charlie Stern also are on the team and they are exclusively handling mesothelioma claims. Will and Charlie are looking at cases of industrial, occupational and secondary asbestos exposure resulting in lung cancer or mesothelioma as well as claims of asbestos-related talc products linked to mesothelioma.

Members of the Talc Litigation Team, in alphabetical order, include: Kelli Alfreds (Kelli.Alfreds@beasleyallen.com), Ryan Beattie (Ryan.Beattie@beasleyallen.com), Beau Darley (Beau.Darley@beasleyallen.com), David Dearing (David.Dearling@beasleyallen.com), Liz Eiland (Liz.Eiland@beasleyallen.com), Jennifer Emmel (Jennifer.Emmel@beasleyallen.com), Jenna Fulk (Jenna.Fulk@beasleyallen.com), Lauren James (Lauren.James@beasleyallen.com), James Lampkin (James.Lampkin@beasleyallen.com), Caty O’Quinn (Caty.OQuinn@beasleyallen.com), Cristina Rodriguez (Cristina.Rodriguez@beasleyallen.com), Brittany Scott (Brittany.Scott@beasleyallen.com), Charlie Stern (Charlie.Stern@beasleyallen.com), Will Sutton (William.Sutton@beasleyallen.com), Matt Teague (Matt.Teague@beasleyallen.com), and Margaret Thompson (Margaret.Thompson@beasleyallen.com).

OPIOID LITIGATION

OxyContin Maker To Plead Guilty To Federal Criminal Charges And Pay $8 Billion

Purdue Pharma, the maker of OxyContin, has agreed to plead guilty to three federal criminal charges for its role in creating the nation’s opioid crisis and will pay more than $8 billion and close down the company. The money will go to opioid treatment and abatement programs. The privately held company has agreed to pay a $3.5 billion fine as well as forfeit an additional $2 billion in past profits, in addition to the $2.8 billion it agreed to pay in civil liability. Drug Enforcement Administration (DEA) Assistant Administrator Tim McDermott said:

Purdue Pharma actively thwarted the United States’ efforts to ensure compliance and prevent diversion. The devastating ripple effect of Purdue’s actions left lives lost and others addicted.

Because Purdue doesn’t have $8 billion in cash available to pay the fines, the company will be dissolved as part of the settlement. Purdue’s assets will be used to create a new “public benefit company” controlled by a trust or similar entity designed for the benefit of the American public. The Justice Department said the new company will function entirely in the public interest rather than to maximize profits. Future earnings from the new company will go to paying the fines and penalties, which in turn will be used to combat the opioid crisis.

That new company will continue to produce painkillers such as OxyContin, as well as drugs to deal with opioid overdose. Deputy Attorney General Jeffrey Rosen, who announced the settlement, defended the plans for the new company to continue to sell that drug, saying there are legitimate uses for painkillers such as OxyContin.

The plan is for the company to make life-saving overdose rescue drugs and medically assisted treatment medications available at steep discounts to communities dealing with the opioid crisis.

The Justice Department also reached a separate $225 million civil settlement with the Sackler family, the former owners of Purdue Pharma. The Sackler family – as well as other current and former employees and owners of the company – will still face the possibility that federal criminal charges will be filed against them.

Purdue, which filed for bankruptcy in 2019, pleaded guilty to violating federal anti-kickback laws, as it paid doctors to write more opioid prescriptions.

As the public now knows all too well, abuse of prescription painkillers is a major cause of the nation’s opioid crisis. According to the Centers for Disease Control and Prevention (CDC), 450,000 people died in the United States in the 10 years starting in 1999 from overdoses involving any opioid, including prescription and illicit opioids. And about a third of those deaths in 2018 involved prescription opioids.

Although the more than $8 billion in fines and penalties in the agreement is a record to be paid by a pharmaceutical company, it is only a fraction of what it has cost federal, state and local governments to combat the opioid crisis. States across the country have filed claims topping $2 trillion in the Purdue Pharma bankruptcy case.

Some states are objecting to the settlement. Twenty-five state attorneys general wrote to U.S. Attorney General William Barr in late October arguing against the plan to create a government-controlled company out of the assets of Purdue Pharma, saying that the government should not be in the business of selling OxyContin. It will be interesting to see how this plays out. The settlement needs the approval of the bankruptcy court for it to go into effect.

Source: Law360.com

$5 Billion Settlement Offer From J&J Involving 3,000 Opioid Lawsuits

Johnson & Johnson (J&J) disclosed on Oct. 12 that it is offering up to $5 billion to settle part of its opioid litigation. J&J is accused, and for good reason, of contributing significantly to America’s opioid addiction crisis. The latest offer is a 25% increase on an earlier settlement proposal. There are roughly 3,000 cases involved in this offer all accusing J&J of improper sales and marketing of prescription narcotics.

In its announcement, the company described the $5 billion as “an all-in settlement amount that would resolve opioid lawsuits filed and future claims by states, cities, counties and tribal governments.”

J&J worked out its original offer of $4 billion last year with the attorneys general of North Carolina, Pennsylvania, Tennessee and Texas. It appears that a number of state attorneys general will agree to accept the new offer, but that several will not agree.

Money from opioid settlements is expected to cover past and future expenses for health care, addiction treatment and law enforcement related to opioid abuse, which has killed hundreds of thousands of Americans during the past two decades.

Many of the cases against various drugmakers have also targeted large drug distributors, which have proposed settlements of their own, as well as national pharmacy chains, which have not publicly revealed any global settlement offers.

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.

Source: Law360.com

Chancery Orders Walmart To Turn Over Opioid Oversight Documents

Vice Chancellor J. Travis Laster has criticized Walmart’s attempt to block a bid for records from investors attempting to probe the retail giant’s potential role in worsening the nation’s opioid crisis with faulty oversight. The Delaware vice chancellor said in his order that documents must be provided and that the decision wasn’t a “close call.”

In a strongly worded ruling, handed down during a virtual half-day hearing, the vice chancellor criticized Walmart for claiming that three investor funds that filed separate Chancery Court suits seeking records hadn’t justified their demands. Pursuant to Section 220 of Delaware General Corporation Law, an investor can seek to have the court compel a company to turn over records if the investor can show a proper purpose such as investigating wrongdoing. In this case, the Vice Chancellor found a “credible basis” to suspect wrongdoing and that is constituted a proper purpose.

The vice chancellor was obviously displeased with Walmart’s efforts to block the investors’ bid for records.

Walmart was initially sued in June by investors in two separate lawsuits, each seeking records to ascertain the retail giant’s role in potentially worsening the nation’s opioid crisis. In separate, but virtually identical suits, the Police & Fire Retirement System of the City of Detroit and the Norfolk County Retirement System say their demand results “from what is likely the single most harmful stain on Walmart’s reputation to date.” The suit contends:

Until recently, Walmart concealed the deliberate and destructive role in which it contributed to and exacerbated America’s opioid crisis.

The pension funds assert that “there is significant evidence that Walmart for years failed to implement basic compliance controls to protect its pharmacies and drug distribution business from being used as cover for the illegal dissemination of opioids.”

Another suit seeking records, making similar assertions, was filed in August by The Ontario Provincial Council of Carpenters’ Pension Trust Fund. The investors sought board minutes, board materials and other documents related to the company’s efforts to monitor suspicious orders for drugs, the filling of such prescriptions, and compliance with state and federal regulations regarding the distribution of opioids.

The Detroit pension fund is represented by Gregory V. Varallo, Mark Lebovitch, Jacqueline Y. Ma and Daniel E. Meyer of Bernstein Litowitz Berger & Grossmann LLP. The Norfolk County pension fund is represented by Gregory V. Varallo, Mark Lebovitch, David Wales, Alla Zayenchik and Daniel E. Meyer of Bernstein Litowitz Berger & Grossmann LLP, and Leslie R. Stern, Nathaniel L. Orenstein and Dalton Rodriguez of Berman Tabacco. The Ontario pension fund is represented by Ned Weinberger, David MacIsaac and John Vielandi of Labaton Sucharow LLP.

The cases are Police & Fire Retirement System of the City of Detroit v. Walmart Inc. (case number 2020-0478), Norfolk County Retirement System v. Walmart Inc. (case number 2020-0482) and The Ontario Provincial Council of Carpenters’ Pension Trust Fund v. Walmart Inc. (case number 2020-0697) in the Court of Chancery of the State of Delaware.

Source: Law360.com

Allergan And Teva Sanctioned For Flouting Opioid MDL Discovery

U.S. District Judge Dan Aaron Polster has sanctioned Allergan and Teva Pharmaceuticals after concluding that the companies didn’t search diligently for a “damning internal audit” of efforts to spot suspicious opioid orders and that likely they would have done so if the audit helped their legal defense in the multidistrict litigation (MDL).

Judge Polster partially granted the sanctions request after concluding that the failure to promptly produce an audit of “critical importance” undermined the case of local government Plaintiffs in the opioid MDL and resulted from a superficial search that fell well short of the drugmakers’ discovery obligations. Judge Polster wrote:

The relevance of documents like the [audit] to this litigation cannot be overstated. If the [audit] supported, rather than contradicted, assertions Teva and Allergan made in their summary judgment briefing, it seems awfully likely the defendants would have worked more diligently to find it.

The judge awarded an array of sanctions, including a requirement that Allergan and Teva search the files of a dozen current or former employees and produce records related to a so-called suspicious order monitoring system. Judge Polster also authorized additional depositions and directed the drugmakers to divulge underlying data that was used to create the belatedly disclosed audit.

Judge Polster refused further sanctions, but agreed that the audit was “highly critical” of the monitoring system, saying it described a system in which Allergan’s customers could “move more of a controlled substance per month, even if it is for unknown and potentially unacceptable reasons.”

Allergan and Teva produced the document in August, about 18 months after the Plaintiffs began seeking it. Judge Polster found that the delay “caused prejudice to Plaintiffs in several ways, including having to conduct deposition discovery and negotiate settlements without the report.”

Allergan, now part of AbbVie Inc., paid $5 million to avoid the MDL’s first bellwether trial last year. Teva paid $20 million in cash and $25 million in donated drugs for opioid treatment to avoid the same trial, which ultimately didn’t happen because of additional settlements.

According to the judge’s ruling, Allergan commissioned the audit in 2011 and later sold its generic-opioids business to Teva. When the companies told the MDL Plaintiffs that they couldn’t find the audit despite extensive digging, the Plaintiffs suggested they may have overlooked email attachments. “Plaintiffs’ suggestion proved correct,” according to Judge Polster, who also faulted the drugmakers for examining the records of far too few employees who may have possessed the audit at some point.

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.

Source: Law360.com

The Beasley Allen Opioid Litigation Team

Beasley Allen’s Opioid Litigation Team includes Rhon Jones, Parker Miller, Ken Wilson, David Diab, Rick Stratton, Will Sutton, Jeff Price, Gavin King 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, Ken.Wilson@beasleyallen.com, David.Diab@beasleyallen.com, Rick.Stratton@beasleyallen.com, William.Sutton@beasleyallen.com, Jeff.Price@beasleyallen.com, Gavin.King@beasleyallen.com or Tucker.Osborne@beasleyallen.com.

PURELY POLITICAL NEWS & VIEWS

The Most Important Presidential Race In Modern History

The vote for President on Nov. 3 is the most important vote I will have made in my lifetime. I can’t overstate the importance of the outcome of this election. The future of our democracy is at stake, as is the well-being of every American citizen. The question is: “how should we decide on which of the two candidates to cast our vote for?”

If the office of Mayor of Montgomery was on the ballot, I would vote for the candidate who has the following personal and leadership traits:

  • being a moral person,
  • being honest,
  • being truthful,
  • being ethical,
  • being compassionate,
  • being empathetic,
  • being a caring person,
  • being intelligent,
  • being free of conflicts of interest, and
  • respecting and obeying the Rule of Law.

If these traits would help us decide on selecting a mayor, why shouldn’t we also consider the very same traits when deciding on the person to be our president?

When I put the two candidates to this test the decision as to who should be President of the United States is very clear. I cannot vote for a man who has failed on every single count of this test. Sadly, our current president fails miserably on each count.

While Joe Biden is not a perfect man, he scores extremely well on the test.

Vote like your life and the lives of all Americans depend on it and do so early if at all possible.

I am voting for Joe Biden.

COURT WATCH

The U.S. Supreme Court Hears Oral Argument On Ford’s Personal Jurisdictional Challenges

During the first week of October, the U.S. Supreme Court heard oral arguments on two cases involving jurisdiction over Ford in the states of Montana and Minnesota. 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. For instance, the Minnesota Supreme Court reasoned that jurisdiction should be determined by looking at the totality of Ford’s contacts and not on any one individual contact. The Court found it significant that Ford had sold thousands of cars exactly like the one that injured the Plaintiff in Minnesota; that Ford directed marketing and advertising directly at Minnesotans; that a Minnesotan bought a Ford vehicle that did not live up to Ford’s safety claims; and that a Minnesotan was injured by a Ford vehicle in Minnesota. Bandemer v. Ford Motor Co., 931 N.W.2d 744, 753–54 (Minn. 2019), cert. granted, No. 19-369, 2020 WL 254152 (U.S. Jan. 17, 2020).

Likewise, the Montana Supreme Court noted, “At its core, due process is concerned with fairness and reasonableness: Is it fair and reasonable to ask an out-of-state Defendant to defend a specific lawsuit in Montana?” After looking at Ford’s numerous contacts with Montana, the Court concluded that it would be both fair and reasonable for Ford to defend a lawsuit involving an injury caused by its defective products in Montana:

Companies build vehicles specifically for interstate travel. Irrespective of where a company initially designed, manufactured, or first sold a vehicle, it is fair to say that a company designing, manufacturing, and selling vehicles can reasonably foresee (even expect) its vehicles to cross state lines. When a company engages in the design, manufacture, and distribution of products specifically designed for interstate travel, it is both fair and reasonable to require the company to defend a lawsuit in a state where the product caused injury as long as the company has otherwise purposefully availed itself of the privilege of doing business in that state and if a nexus exists between the product and the defendant’s in-state activity. Where a company first designed, manufactured, or sold a vehicle is immaterial to the personal jurisdiction inquiry, and focusing on those limited factors would unduly restrict courts of this state from exercising specific personal jurisdiction that comports with due process over nonresident defendants in cases such as this one.

Ford Motor Co. v. Montana Eighth Judicial Dist. Court, 2019 MT 115, ¶ 21, 395 Mont. 478, 490–91, 443 P.3d 407, 416, cert. granted sub nom. Ford Motor Co. v. Mt Eighth Dist. Court, No. 19-368, 2020 WL 254155 (U.S. Jan. 17, 2020)

Not happy with these rulings, Ford asked the U.S. Supreme Court to rule that lawsuits may only be brought in the state where Ford is either headquartered (i.e. Michigan) or where a Plaintiff can prove that a specific in-state contact caused the Plaintiff’s claim. In questioning Ford, the Supreme Court Justices made the following observations:

  • Chief Justice Roberts noted that Ford was making the ultimate issue of causation for liability a jurisdictional question. He questioned why there is no causation when the defect in the car causes the accident.
  • Justice Thomas questioned how Ford derived a proximate cause standard for jurisdiction from the Due Process Clause. He considered the leap from one to the other to be a “long journey.”
  • Justice Breyer questioned why it would be unfair for Ford to defend against product liability suits in either State since it does a lot of business with the same kinds of cars there. He noted that “the whole point of this whole doctrine . . . is not to put a defendant to the trouble of going to a different state, where it’s really unfair.”
  • Justice Sotomayor noted that, in essence, Ford is arguing that it can only be liable in its home state.
  • Justice Kagan pointed out that Ford’s argument for a proximate cause standard relied on caselaw where there was no connection with the forum. Unlike in those cases, Ford serves, resells, and advertises cars in these states.
  • Justice Gorsuch observed that this case highlights the difficulties the Court’s doctrinal tests have created.
  • Most pointedly, Justice Kavanaugh read the following from the Court’s well-recognized opinion in World-Wide Volkswagen and asked “if we just follow that sentence, you lose, correct?”

[I]f the sale of a product of a manufacturer/distributor arises from the efforts of the manufacturer/distributor to serve directly or indirectly the market for its products in other states, it’s not unreasonable to subject it to suit in one of those states if its allegedly defective merchandise has there been the source of injury to its own or to others

  • Justice Kavanaugh also questioned why Ford doesn’t “want to litigate these cases in Minnesota and Montana” when it already litigates lots of cases there.

We agree with the closing argument by Plaintiffs’ counsel that “any sensible resolution of these cases is going to have to be grounded in some combination of interstate federalism, fairness to the Defendant, predictability, and common sense . . . Ford’s approach flunks all three tests.” We hope that the U.S. Supreme Court agrees and puts an end to the senseless arguments manufacturers have been using to keep victimized citizens out of court. We will keep our readers updated on any rulings on this issue.

If you have any further questions involving this case or personal jurisdiction issues generally, contact Stephanie Monplaisir or Dana Taunton, lawyers in our Personal Injury & Products Liability Section, at 800-898-2034 or by email at Stephanie.Monplaisir@beasleyallen.com or Dana.Taunton@beasleyallen.com.

THE NATIONAL SCENE

Six Russian Officers Indicted Over Massive Cyberattack

It is abundantly clear that for several years the Russians have been actively involved in efforts to influence elections in America. A Pennsylvania grand jury has indicted six Russian military officers for cyberattacks, including the destructive 2017 NotPetya malware attack, from the same intelligence unit accused of interfering with the 2016 presidential election. The U.S. Department of Justice (DOJ) reported the indictments on Oct. 19.

The attacks, carried out for roughly four years beginning in November 2015, are “the most disruptive and destructive series of computer attacks ever attributed to a single group,” Assistant U.S. Attorney General for National Security John Demers said last month at a press conference. He added:

Today’s charges illustrate how Unit 74455’s election activities were but one part of the work of a persistent, sophisticated hacking group busy sabotaging perceived enemies or detractors of the Russian Federation, regardless of the consequences to innocent bystanders or their destabilizing effect.

Officers from the same unit, including one indicted for the latest attacks, Anatoliy Sergeyevich Kovalev, were previously indicted in 2018 for allegedly hacking Democratic National Committee servers to interfere with the 2016 presidential election.

Four of the current and former Russian officers indicted – Yuriy Sergeyevich Andrienko, Sergey Vladimirovich Detistov, Pavel Valeryevich Frolov and Petr Nikolayevich Pliskin – have been accused of helping to develop malware, including NotPetya, Olympic Destroyer and KillDisk.

The government is represented by Scott W. Brady, Charles A. Eberle and Jessica Lieber Smolar of the U.S. Attorney’s Office for the Western District of Pennsylvania.

The case is U.S. v. Andrienko et al. (case number 2:20-cr-00316) in the U.S. District Court for the Western District of Pennsylvania.

Source: Law360.com

DOJ Charges 345 In Health Fraud Schemes Topping $6 Billion

Federal prosecutors have charged 345 executives, doctors and other medical professionals with perpetuating hundreds of health care fraud schemes involving more than $6 billion related to telemedicine, illegal opioid distribution and durable medical equipment.

Acting Assistant Attorney General Brian C. Rabbitt said the department’s “truly historic” national operation that has been in motion since April cracked down on classic health care fraud schemes like improper billing, as well as newer types of fraud related to telemedicine that arose from stay-at-home orders and quarantining because of the coronavirus pandemic. Brian Rabbitt said in a statement:

This nationwide enforcement operation is historic in both its size and scope, alleging billions of dollars in health care fraud across the country.

The Department of Justice (DOJ) does these “takedowns” does every year to spotlight concerns about fraud in certain areas by grouping similar schemes together. They were organized by the Criminal Division, Fraud Section’s Health Care Fraud Unit – a coordinated effort among the Department of Justice, U.S. Department of Health and Human Services and other agencies that have teams in several cities.

While the allegations run the range of possible Medicare fraud schemes, the telemedicine fraud charges made up the bulk of the nationwide bust, implicating more than $4.5 billion in government losses. Rabbitt said in prepared remarks in Washington:

Telemedicine has proven all the more critical during this national crisis. For all of its benefits, telemedicine, unfortunately, also can be exploited by criminals.

In one of the alleged telemedicine schemes that cost the government $522 million, operators of New Jersey-based Express Diagnostics LLC and other companies paid kickbacks and telemedicine providers in exchange for bogus orders for genetic testing, the agency said. Charges were filed in other telemedicine fraud schemes from New York to California. Health and Human Services Deputy Inspector General Gary Cantrell, in a statement, said:

Bad actors attempt to abuse telemedicine services and leverage aggressive marketing techniques to mislead beneficiaries about their health care needs and bill the government for illegitimate services.

The next largest number of enforcement actions involve more than $845 million in alleged schemes where doctors and business executives are accused of getting addicted patients to go to distant substance abuse treatment facilities, where they can be billed for excessive, unnecessary treatments, the agency said. Another $806 million in alleged government fraud was tied to similar schemes in cities across the country.

In many of the cases, prosecutors say that patient recruiters and Medicare beneficiaries were paid cash kickbacks in exchange for supplying patient information to medical providers, who then billed Medicare for services that weren’t needed or were sometimes never performed at all.

The national enforcement effort has been in operation since 2007, and the agency said it has charged more than 4,200 Defendants who defrauded Medicare for more than $19 billion.

Source: Law360.com

THE WHISTLEBLOWER LITIGATION

SEC Whistleblower Rule Changes Produces A Record Year For Recoveries

On Sept. 30, 2020, the U.S. Securities and Exchange Commission (SEC) announced it had awarded another $37 million in awards to four whistleblowers, closing out a record year for awards in the 2019 fiscal year. Thirty-nine whistleblowers earned awards during the year, totaling $175 million. According to the SEC’s press releases, the latest awards included a $22 million bounty to a single whistleblower “who was the first to alert SEC staff of potential wrongdoing and provided substantial, ongoing assistance” to the SEC during its enforcement action, which “helped the agency return tens of millions of dollars to harmed retail investors.”

The SEC’s program lets a whistleblower apply for an award of 10-30% of the total monetary sanctions collected if the whistleblower provides original information and substantial assistance that leads to the actual recovery of funds through an enforcement action. Since it began in 2012, the SEC’s program has paid more than half a billion dollars to whistleblowers on related actions where the SEC has collected over $2.5 billion for securities violations.

News of the awards was somewhat overshadowed, however, by the SEC’s recent adoption of new final rules that will amend the whistleblower program. The new rules, originally proposed in 2018, have many divided on whether they will hurt or help the whistleblower program going forward.

After adopting the new rules on Sept. 23 by a vote of 3-2, the SEC issued a lengthy press release highlighting the program and the effects of the changes. The purpose of the rules is to “provide greater clarity to whistleblowers and increase the program’s efficiency and transparency” and included new guidance about the process of awards determinations to “provide additional efficiencies, as well as clarity and transparency in the award determination process.”

Rule 21F-6 sets the criteria the SEC uses to determine the amount of a whistleblower award. Most agree that the process by which SEC whistleblower evaluated potential awards was inefficient and took too long. More recently, whistleblower award claims in most cases have taken more than two years to review. This wastes SEC resources and also has a chilling effect on potential whistleblowers who wonder if they can make it through the lengthy process. But efficiency and speed aren’t the only considerations that affect a whistleblower’s decision to aid the SEC. To keep the tips coming in, the award must be worth the work and sacrifice whistleblowers face by coming forward.

As originally proposed in 2018, the new rules included a “soft cap” for awards on the largest cases. It proposed a standard that, in actions where monetary sanctions were more than $100 million, would have allowed the SEC to limit awards based on what they deemed “reasonably necessary to reward a whistleblower and to incentivize other similarly situated whistleblowers.” Many involved in these actions warned that it would give the SEC an arbitrary means to cap the largest awards at the statutory minimum of 10%, even if the factors considered in the case indicated the award should be higher. The SEC ended up backing off this particular rule, but included language stating the Commission had the discretion to consider the award amount in determining the percentage to be awarded.

While there is concern about the highest awards, the new rules do provide better incentive for smaller awards. Rule 21F-6(c) now provides a presumption that for awards of $5 million or less, the SEC will pay the maximum statutory award of 30%, as long as none of the “negative factors” are present for the whistleblower. Negative factors can include culpability in the fraud, unreasonably delayed reporting, or interference with the company’s internal compliance processes or reporting programs. As originally proposed, the presumption was only to apply to awards less than $2 million, but the rule as passed upped that number to $5 million. Awards of $5 million or less make up the lion’s share of claims – 74% of all awards, according to the SEC.

Another notable change expands what the SEC deems to be a “successful enforcement action” that entitles the whistleblower to an award. Oftentimes, in criminal prosecutions, a Defendant may enter a non-prosecution or deferred prosecution agreement as a part of plea negotiations. In these cases, a criminal Defendant will offer either assistance with the prosecution of other persons, or agreements to make victims whole through restitution, but is not actually adjudicated guilty of the crime. The updated rules clarify that these types of cases are successful actions, even though a criminal conviction is not obtained.

The two dissenting votes against adoption were from Allison Herren Lee and Caroline A. Crenshaw. Both noted that the 30% presumption would be good for the program, but were concerned that the SEC’s asserted authority to use discretion in all award amounts, including on the basis of the size of that award, leaves inefficiencies and uncertainties for potential whistleblowers. Both were also concerned that the rules did not do enough to protect potential whistleblowers from retaliation. The new rules will take effect 30 days after they are published in the Federal Register.

Beasley Allen lawyers have been representing whistleblowers for many years and in many different types of cases with good success. We continue to encourage whistleblowers to step forward with their confidential information of misconduct and seek counsel to protect them and consumers affected by corporate misconduct.

Nuclear Site Contractors To Pay $58 Million Settlement After Whistleblowers Allege Massive Fraud Scheme

Recently, federal prosecutors announced that two companies that did work at a former nuclear weapons production plant will pay fines of approximately $58 million for improperly billing the federal government for work that was not performed. The settlement with the government was reached between Bechtel Corp. and AECOM Energy & Construction Inc. For several years the companies were building a nuclear waste treatment plant at the Hanford Nuclear Reservation near Richmond, Washington.

The case began with four whistleblowers who came forward in 2016 and told the federal government about alleged time card fraud in which the companies billed the U.S. Department of Energy for work that was never completed. Bethel and AECOM hired hundreds of electricians, millwrights, pipefitters and other skilled craft workers to build the plant. Between 2009 and 2019, however, executives from the two companies admitted to overcharging the government for “unreasonable and unallowable idle time,” the government said. Company executives admitted to billing the government for thousands of hours for work that was never performed, “even after Bethel and AECOM knew they were under investigation for the improper billing practices,” the government said.

The Hanford Nuclear Reservation was born out of secrecy during World War II to produce plutonium for atomic weapons, including the bomb dropped on Nagasaki, Japan. For more than 40 years, it produced most of the plutonium for the nation’s nuclear arsenal. In this century, the Hanford site has been the focal point of a large and extended cleanup effort.

“It is stunning that, for nearly a decade, Bechtel and AECOM chose to line their corporate pockets by diverting important taxpayer funds from this critically essential effort,” said Joseph E. Harrington, first assistant attorney general for the Eastern District of Washington. The four whistleblowers will receive $13.7 million of the $57.7 million settlement amount, the government said. In addition, approximately $26 million of the settlement will be paid to the Department of Energy as restitution for the overbilling.

If you are aware of fraud, abuse or waste being committed against the federal government or a state government and are interested in pursuing a whistleblower lawsuit, contact a lawyer on our firm’s Whistleblower Litigation Team.

Source: Designanddevelopmenttoday.com and Seattletimes.com

Eleventh Circuit Reinstates An FCA Verdict, Approving A $255 Million Judgment

In February 2017, a Florida jury returned a $347 million verdict against two Florida nursing home facilities for violating the False Claims Act (FCA). The claims were brought by a former nursing employee who claimed that the nursing homes inflated the amount of therapy minutes that were provided; submitted claims to Medicare reflecting higher levels of therapy than the Defendants actually provided; and submitted claims for Medicaid reimbursement without creating or maintaining comprehensive care plans.

The jury found that the Defendants submitted 420 fraudulent Medicare claims and 26 fraudulent Medicaid claims. After applying the statutory penalties and trebling the damages, the district court entered a verdict for the government in the amount of $347,864,285.

The Relator had appealed an adverse ruling on the Defendants’ motion for judgment as a matter of law to the Eleventh Circuit Court of Appeals.

The Eleventh Circuit found that the Relator presented sufficient evidence to show that the Defendants’ misrepresentations were “material” to Medicare’s decision to reimburse the Defendants for services. Specifically, the court pointed to expert testimony elicited from the Relators that the Defendants engaged in “upcoding” and “ramping,” which caused the government to pay more than it owed for the services. Thus, the court reasoned that the misrepresentations were inherently material to the government’s decision to reimburse the Defendants because the fraudulent practices caused the government to pay for services that were not rendered.

The appellate court also rejected the Defendants’ argument that Defendant La Vie Management lacked the requisite scienter to violate the FCA. Specifically, La Vie Management argued that it did not knowingly present or cause a false claim to be presented to Medicare. But the appeals court found that the Relator presented sufficient evidence that would allow a reasonable jury to conclude that La Vie Management caused a false claim to be presented to Medicare.

Importantly, the appeals court adopted a proximate cause standard to analyze whether a Defendant caused a false claim to be presented. Specifically, the court stated:

We find that for “cause to be present” claims, proximate causation is a useful and appropriate standard by which to determine whether there is a sufficient nexus between the defendant’s conduct and the submission of a false claim.

The court stated further:

Under this analysis, a defendant’s conduct may be found to have caused the submission of a claim for Medicare reimbursement if the conduct was (1) a substantial factor in inducing providers to submit claims for reimbursement, and (2) if the submission of claims for reimbursement was reasonably foreseeable or anticipated as a natural consequence of defendants’ conduct. Marder, 208 F. Supp. 3d at 1312-13.

The court pointed to trial testimony that La Vie Management often pressured employees to elevate codes without regard to the services rendered. The court held that such evidence was sufficient for a reasonable jury to determine that the Defendant “caused a false claim” to be presented to the government.

The appeals court upheld the district court’s decision to dismiss the Medicaid fraud claims. The court pointed out that the Defendants never presented evidence that Medicaid would have declined payment if it knew that the Defendants lacked a comprehensive care plan. Thus, the Relators failed to prove that the misrepresentations were material to the decision of the government to reimburse the Defendants.

The court ultimately reduced the actual damages to $85 million. However, after applying the statutory penalties and trebling the damages, the final verdict amounted to $255 million.

Overall, the Eleventh Circuit ruling is a victory for relators. The ruling clarifies the type of evidence that relators must present at trial to prove materiality. Importantly, the Eleventh Circuit specifically rejected the idea that the Defendants’ actions were merely recordkeeping errors and thus immaterial to the government’s decision to pay. Further, the court’s ruling officially adopted a proximate causation standard for “cause to be presented” claims under the FCA. Perhaps, the greatest benefit of the decision is that millions of misused taxpayer dollars will be returned to the government.

Sources: Law360.com

SEC Awards $1.8 Million Whistleblower Fee To A Company Outsider

The Securities and Exchange Commission (SEC) has announced an award of more than $1.8 million to a company outsider who expeditiously reported significant information to the Commission about ongoing securities law violations. SEC Chairman Jay Clayton said:

Today’s award marks a milestone for the whistleblower program. This whistleblower is the 100th individual to receive an award under the program since its inception, and the 33rd individual awarded so far this year. The pace and the amounts of the awards in recent years underscore the Commission’s commitment to increasing the efficiency and effectiveness of the whistleblower program. We remain dedicated to working quickly to get more money into the hands of whistleblowers, including through the improvements that will be implemented as a result the amendments approved by the Commission last week.

Jane Norberg, Chief of the SEC’s Office of the Whistleblower, had the following to say about the award:

Today’s award demonstrates the success of the program and the important role that company outsiders can play in halting ongoing violations. While many of our whistleblowers have been insiders, the agency also receives critical intelligence from company outsiders, like today’s whistleblower, whose swift reporting alerted staff to the violations that resulted in the success of this enforcement action.

The SEC has awarded approximately $527 million since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. It should be noted that no money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10% to 30% of the money collected when the monetary sanctions exceed $1 million.

As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity.

For more information about the whistleblower program and how to report a tip, visit www.sec.gov/whistleblower. You can also contact a lawyer on the Beasley Allen Whistleblower Litigation Team.

Source: SEC News Release

The Beasley Allen Whistleblower Litigation Team

Lawyers on Beasley Allen’s Whistleblower Litigation Team continue to be hard at work handling cases under the False Claims Act (FCA). Fraud against the federal government by all too many industries in this country continues to be a huge problem. We expect the amount of fraud against the federal government, because of the pandemic, to increase greatly during the coming months. The national mishandling of the Coronavirus pandemic and corporate greed will be a major factor.

Whistleblowers are the key to exposing corporate wrongdoing and government fraud and their role will intensify greatly. 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. The experienced group of lawyers on our team are 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 one of the lawyers on Beasley Allen’s Whistleblower Litigation Team for a free and confidential evaluation of your claim.

The following Beasley Allen lawyers are on the Whistleblower Litigation Team: Larry Golston (Larry.Golston@beasleyallen.com), Lance Gould (Lance.Gould@beasleyallen.com), James Eubank (James.Eubank@beasleyallen.com), Paul Evans (Paul.Evans@beasleyallen.com), Leslie Pescia (Leslie.Pescia@beasleyallen.com), Leon Hampton (Leon.Hampton@beasleyallen.com), Tyner Helms (Tyner.Helms@beasleyallen.com) and Lauren Miles (Lauren.Miles@beasleyallen.com). Dee Miles, who heads up our Consumer Fraud & Commercial Litigation Section, also participates in the whistleblower litigation and works with the Litigation Team. The lawyers can be reached by phone at 800-898-2034.

PRODUCT LIABILITY UPDATE

Millions Of Takata Seat Belts May Be Defective And Dangerous

It appears there are more serious safety problems arising from Takata wrongdoing. It was reported last month that millions of vehicles could face recall due to faulty seat belts using parts provided by Takata. This is the same Japanese supplier responsible for the recall of tens of millions of vehicles due to defective air bag inflators resulting in hundreds of injuries and dozens of deaths.

Joyson Safety Systems, a Chinese-owned automotive supplier, took over the remains of Takata after it went bankrupt in 2017. Joyson says it is looking over 20 years of testing data for seat belt webbing. The company says it has found inaccuracies suggesting the numbers might have been altered intentionally by Takata.

Japanese regulators have also begun their own investigation and have reportedly advised automakers to prepare for recalls. If the safety of the belts cannot be verified, the impact could be substantial. Takata provided webbing for as much as 40% of Japanese auto production and 30% of the vehicles produced worldwide.

The downfall of Takata, one of the world’s premier suppliers of automotive safety systems, began in 2014. It was then when there were incidents when the devices used to fill an air bag would explode with unusual force, sending plastic and metal shrapnel flying into the passenger compartment. It was subsequently revealed that senior managers at Takata knew of the problem and tried to cover it up.

The airbag defect has been blamed for hundreds of injuries and at least 17 deaths around the world. Honda reported in September what is believed to be the 17th U.S. death linked to the problem. Meanwhile, automakers are continuing to fix millions of vehicles equipped with faulty Takata air bags. There are about 70 million defective inflators used in the U.S. alone. According to industry reports, as many as 6 million vehicles have yet to be repaired, though some may already have been scrapped.

At this juncture it’s not clear how many vehicles could be subject to recall due to the latest Takata safety problem. But it will likely be a huge number. In February 2017, Takata agreed to pay a $1 billion fine to settle the U.S. investigation over the faulty air bags. Four months later Takata filed for bankruptcy in the U.S. and Japan and most of its assets were taken over by Key Safety Systems.

That Chinese company, since renamed Joyson Safety Systems, has been looking over data covering tests conducted at the old seat belt plant Takata ran in Hikone, Japan, and has found evidence that the company altered results when it found belt webbing produced there didn’t meet legal standards.

While Takata’s primary customers were Japanese – Honda its largest – it also supplied numerous foreign manufacturers, from Ferrari to General Motors.

In an emailed statement to NBC News, the National Highway Traffic Safety Administration (NHTSA) said it is “aware of these reports and is gathering information,” according to spokesperson Sean Rushton. He told NBC News:

If NHTSA finds that this belt webbing leads to noncompliance with Federal Motor Vehicle Safety Standards or otherwise represents an unreasonable risk to public safety, the agency will not hesitate to take appropriate action.

We will continue to monitor this matter and will report further as things develop. Stay tuned!

Source: NBCNews.com

Georgia Supreme Court Affirms $6 Million Award In Suzuki Brake Defect Case

The Georgia Supreme Court has upheld a jury verdict against Suzuki in a brake defect case. But the justices said the trial court had properly reduced a $12.5 million verdict against Suzuki Motor Corp. for what jurors found was a defectively designed brake. The justices affirmed a $6 million judgment for a motorcyclist injured in a crash.

Jurors also found the Plaintiff Adrian Johns partly to blame for the crash that broke his spine, and that the court has to factor that into his strict product liability claim against Suzuki. The jury found the Plaintiff was 49% responsible for the crash because he didn’t properly maintain his motorcycle as instructed by Suzuki. The opinion was written by Supreme Court of Georgia Presiding Justice David E. Nahmias. He wrote in the opinion:

We are not persuaded that we should ignore the plain language of [Georgia law] and write into the statute an exception for strict products liability claims. Permitting comparative negligence to be applied to strict products liability claims does not mean the end of strict products liability.

Suzuki recalled the type of brake that had failed on Johns’ motorcycle a few months after his accident. The Supreme Court said the Georgia Court of Appeals was also correct to find that Johns’ comparative negligence applied under Georgia law. That was because of a 2005 statutory amendment. The Supreme Court affirmed the reduced jury award of just more than $6 million and held that the trial jury properly denied prejudgment interest in the case.

The jury awarded $10.5 million to Plaintiff Johns in February 2018 against Suzuki and its American distributor Suzuki Motor of America Inc. on a single product liability claim and two claims of negligence. His wife, Gwen, received a $2 million award on her related loss of consortium claim. The Plaintiffs said in their 2014 suit that Suzuki knew its brake design was defective well before the crash and that it failed to warn Johns and other customers or to timely recall the affected motorcycles. The trial judge reduced the awards because Johns hadn’t changed the brake fluid of his motorcycle in the eight years he owned it prior to the crash, despite Suzuki’s instructions for the fluid to be changed every two years.

The trial court allocated to the Plaintiff $5.3 million on Johns’ product liability and negligence claims and a further $1 million for his wife’s loss of services and support. The trial court also denied their request for prejudgment interest because their pretrial demand to Suzuki of $10 million was more than they ended up getting at trial.

But the Plaintiff’s attempt to apply Georgia case law predating the 2005 statutory amendment that applied comparative negligence to such damages claims was rejected by the court as not persuasive. The court held that Georgia’s law encompassed product liability claims such as this one within its “broad and by all appearances applicable” language.

Georgia Supreme Court Presiding Justice David E. Nahmias wrote the opinion with full concurrence from Chief Justice Harold D. Melton and Justices Michael P. Boggs, Charles J. Bethel, John J. Ellington and Carla Wong McMillian. Justice Nels S.D. Peterson concurred except for three footnotes.

The Plaintiffs are represented by Jennifer K. Coalson and David F. Walbert of Parks Chesin & Walbert PC, R. Randy Edwards of Cochran & Edwards LLC and Paul A. Piland and John W. Sherrod of Sherrod & Bernard PC. The case is Johns et al. v. Suzuki Motor of America Inc. et al. (case number S19G1478) in the Supreme Court of Georgia.

Source: Law360.com

Mattel And Fisher-Price Sued Over Two Rock ‘N Play Infant Deaths

Two sets of parents have filed separate wrongful death suits against Mattel Inc. and its subsidiary Fisher-Price involving the recalled Rock ‘N Play Sleeper. The parents claim the product is defective and dangerous and that the product killed their babies.

The pair of lawsuits are the latest in a number of legal problems the toy manufacturers have faced over the product, which was recalled in April 2019. The recall came on the heels of a warning from Fisher-Price and the Consumer Product Safety Commission (CPSC) that at least 10 infants had died while in the product since 2015.

Since the recall, parents have filed multiple proposed class actions over the Rock ‘N Play, accusing Mattel and Fisher-Price of knowing about the potential risks, but with that knowledge, selling the products anyway.

The latest two suits, both filed in California state court, involve infant deaths that happened in 2011 and 2018. Parents Sara and William Jeffrey Thompson claimed in their complaint that their son William was killed on Sept. 23, 2011, while in a Rock ‘N Play Sleeper in their Reading, Pennsylvania, home. And Courtney and Justin Warnke’s daughter Isla was injured while in the sleeper on Dec. 4, 2018, they said in their complaint. The child later died as a result of her injuries.

Both parents claim that the deaths could have been avoided if Mattel and Fisher-Price heeded the warnings of doctors and did more research into the product’s safety before its launch in 2009. They said further:

The product frequently caused children to suffer injury and death Fisher-Price and Mattel knew about this risk, and about multiple deaths and injuries that had already occurred, but continued to sell the product anyway.

One of the biggest issues with the sleeper is that the incline can lead to suffocation. Babies should lie flat on their backs to sleep, but many roll over to their stomachs or sides while in the Rock ‘N Play. The companies not only disregarded doctors’ concerns, they also manipulated safety standards for inclined sleepers so they could keep selling the product. The companies continued to sell the sleepers, even though they knew about a significant number of deaths attributed to the product.

A 2018 Wall Street Journal story reported more than 30 deaths and 700 injuries attributed to inclined sleepers, like the Rock ‘N Play. By October 2019, the death toll had risen to 59 babies. The parents alleged in their respective suits:

  • Mattel and Fisher-Price continued to lie and mislead consumers about the product’s safety.
  • The sleeper’s description online, packaging, user manual and product advertising were all misleading.
  • Defendants’ marketing convinced parents and other purchasers of Rock ‘n Play Sleepers that they had been tested and complied with all applicable regulations and laws, and were fit for their intended use.

Last year, the CPSC attributed 10 deaths to the Fisher-Price product, saying that all of the infants who died were more than 3 months old, which is the age when infants typically start being able to roll over. The agency recommended that parents stop using the Rock ‘N Play at 3 months, or sooner if the child starts to roll over earlier than that.

On April 12, Fisher-Price issued a recall of all Rock ‘N Play Sleepers sold since the product was introduced in 2009, totaling about 4.7 million units. Fisher-Price said in a statement on its website:

A child fatality is an unimaginable tragedy. Prioritizing safety has been a long, proud tradition for the company. Generations of parents have trusted us for almost 90 years to provide safe products for their children.

Sadly, the recall didn’t come soon enough to save the Thompson and Warnke infants. A number of other children were also killed or injured before this dangerous product was finally recalled and removed from the market.

Mattel and Fisher-Price have run into issues with the Rock ‘N Play in the past, too. In 2013, Fisher-Price recalled 800,000 sleepers after getting more than 600 complaints from customers about mold forming under the cushions that, in some cases, led to respiratory issues in children. The mold issue also led to a proposed class action complaint.

The parents in the two lawsuits are represented by Adam Shea, Ryan A. Casey, Patrick Gunning and Nicholas W. Yoka of Panish Shea & Boyle LLP and Michael K. Johnson and Kenneth W. Pearson of Johnson Becker PLLC. The cases are Sara Thompson et al. v. Mattel Inc. et al. (case number 20STCV39950) and Courtney Warnke et al. v. Mattel Inc. et al. (case number 20STCV40003); both in California Superior Court for Los Angeles County.

Source: Law360.com

Amazon Cases Show E-Tailer Product Liability Varies by State

Recently, a California court of appeal held that Amazon was subject to product liability claims arising from a defective battery the Plaintiff purchased from a third-party vendor through the “fulfilled by Amazon” program. Amazon distributed the battery from one of its fulfillment centers, packaged it using Amazon-branded shipping supplies, and sent it directly to the Plaintiff, who had no contact with the third-party vendor. The appeals court reasoned that Amazon was a “link in the chain of product distribution even if it was not the seller as commonly understood,” as it “created the environment (its website) that allowed [the third-party vendor] to offer the replacement battery for sale.”

While the Bolger decision will undoubtedly have broad implications for Amazon and other e‐tailers, there may be limitations.

Other courts around the country have also concentrated on the level of control the e-tailer exercises over the transaction. In Fox v. Amazon.com Inc., the Sixth Circuit addressed Amazon’s role in the distribution chain under the Tennessee Product Liability Act, ultimately treating the issue as a function of the e-tailer’s control.

In the Fox case, the Plaintiffs’ home was destroyed in a fire that was undisputedly caused by a hoverboard they purchased from a third-party vendor on Amazon’s website. That third-party vendor was judgment-proof, and the manufacturer of the product was unknown. Because the Plaintiffs could not recover from either party, Amazon faced liability under the Tennessee Product Liability Act if it qualified as a seller.

The Fox court concluded that Amazon was not liable under the Tennessee Product Liability Act because it did not exercise sufficient control over the hoverboard. Although the parties disagreed over whether Amazon stored and shipped the hoverboard under its fulfillment program, the summary judgment record indicated that the hoverboard was “[f]ulfilled by [the third-party vendor].”

Facing claims similar to those in Bolger and Fox, courts have included additional restrictions on the term “seller,” and have required the Defendant to take and transfer title to the product. For example, in Erie Insurance Co. v. Amazon.com Inc., the consumer purchased the defective product from a third-party vendor using the “fulfilled by Amazon” program. The U.S. Court of Appeals for the Fourth Circuit noted that Amazon received, stored and shipped the product, but it rejected the Plaintiff’s “control over the transaction” argument, holding that Maryland law defined “seller” as someone who passes title to the buyer for a price. Because the third-party vendor transferred title directly to the buyer, Amazon could not face liability as a member of the distribution chain.

Although Fox and other courts have rejected a “transfer of title” requirement, it is clear from Erie and other decisions that the question of title transfer is relevant to evaluating potential cases in some jurisdictions. The liability of Amazon and other e-tailers for defective products largely depends on state law.

If you have questions about the e-trailer litigation, contact Will Sutton, a lawyer in our firm, at 800-898-2034 or by email at William.Sutton@beasleyallen.com.

Source: Law360.com, Derek Rajavuori

A Diabetes Drug Has Been Recalled Because It Contains High Levels Of Cancer-Causing Agent

A widely used diabetes drug has been recalled after manufacturers found it contained unacceptably high levels of a cancer-causing contaminant. Indian pharmaceutical company Marksans Pharma Limited is recalling Metformin Hydrochloride extended-release tablets because their levels of NDMA, a “probable human carcinogen,” were higher than the acceptable daily intake limit of 96 nanograms per day. A recall was published in October by the U.S. Food and Drug Administration (FDA).

Metformin tablets are used to treat Type 2 diabetes and are designed to lower glucose levels. The recall applies to metformin tablets between 500 mg and 750 mg, sold under the brand name Time-Cap Labs, Inc.

The recall expands an earlier recall of the same product from this summer. It should be noted that it’s just one of several metformin products that have been found to contain NDMA in the last year. Seven other pharmaceutical companies have issued recalls for metformin hydrochloride extended-release tablets due to their carcinogenic contents.

The FDA is still investigating where NDMA comes from and how it ends up in metformin products. Most levels found in medications are generally low and fall within the FDA’s accepted daily intake, but recently recalled medications exceed that. Marksans Pharma Limited, India, however, did not reveal how much NDMA its recalled products contained.

The recall applies to the following products, which can be identified by their National Drug Code numbers listed below (National Drug Codes can be used to search for and identify products online through the FDA). The tablets are either embossed with 101 or 102 on one side and are plain on the other.

Metformin Hydrochloride Extended-Release Tablets, USP 500mg:

  • 90 counts: 49483-623-09
  • 100 counts: 49483-623-01
  • 500 counts: 49483-623-50
  • 1,000 counts: 49483-623-10

Metformin Hydrochloride Extended-Release Tablets, USP 750mg:

  • 100 counts: 49483-624-01

Source: CNN and Law360.com

Petzl American Inc. Recalls Safety Ropes Due To Fall And Injury Hazard

Petzl America Inc., of Salt Lake City, Utah, has recalled almost 15,000 Low-Stretch Kernmantle Ropes. The rope can have a deep cut or tape securing two ends of rope together, which can cause the rope to fail, posing fall and injury hazards to the user. The recalled low-stretch kernmantle ropes are designed for professional use, including work-at-height use, difficult access, technical rescue and industrial applications; and for recreational use, including climbing, caving and mountaineering. The ropes have a nylon core and polyester sheath material. Only ropes with serial numbers ranging between 18 C 0000000 000 and 20 H 0000000 000are included in the recall. The recalled rope models include:

  • Axis 11mm rope (white, yellow, black, blue, red and orange) available in 150, 200, 600 and 1200 feet. Model Numbers R074AA00 – R074AA27.
  • Parallel 10.5mm (white, yellow, black, blue, red and orange), available in 50, 100, 200 and 500 meters. Model Numbers R077AA03 – R077AA28.
  • Vector 12.5mm rope (white, yellow, black, blue, red and orange) available in 150, 200, 600 and 1200 feet. Model Numbers R078AA00—R078AA27.
  • Segment 8 mm (white) available in 50, 100 or 200 meters. Model Numbers R076AA00 – R076AA06.
  • Ray 12 mm (yellow/black) available in 25, 50, 75, 100 and 200 feet. Model Numbers R091AA00 – R091AA04.
  • ASAP’AXIS 11 mm (white) available 10, 20, 30, 40, 50 and 60 meters. Model numbers R074DA00 — R074DA05
  • Push 200 9 mm (white, orange) available in 200 meters. Model Numbers R40AW200 and R40AO200.
  • Club 200 10 mm (white, orange) available in 200 meters. Model Numbers R39AW200 and R39AO200.
  • Top 9.8 mm (Not sold in North America)
  • Lead 9.8mm (Not sold in North America)
  • JAG Rescue Kit model numbers K090AA00-K090AA02

The recalled safety ropes have the model name and serial number on the label affixed to each end of the rope. The ropes were sold at GME Supply, Karst Sports and industrial and recreational stores nationwide, and online at www.gmesupply.com and www.Karstsports.com from March 2018 through July 2020 for between $200 and $1,200.

Consumers should immediately stop using the recalled ropes and inspect the rope for a deep cut or tape connecting two ends of rope together, and if either is found, contact Petzl America for instructions on receiving a free replacement rope. Contact Petzl America toll-free at 877-807-3805 from 8 a.m. to 5 p.m. MT Monday through Friday, email at safetynotices@petzl.com, or online at www.petzl.com and select Professional or Sport then click on Customer Service/Security Alerts located at the top of the page for more information.

Source: CPSC Release

UPDATE ON THE BOEING LITIGATION

FAA Chief About Boeing MAX: ‘We Still Have Work To Do.’

After his recent test flight of the Boeing 737 MAX, the Federal Aviation Administration’s (FAA’s) chief, administrator Stephen Dickson, expressed that he “liked what I saw” but cautioned that “[w]e still have some work to do yet,” according to BusinessWorld. Dickson’s test flight is another step in the process of returning the updated MAX to commercial service. The FAA head also completed the newly revised pilot protocols and a flight simulator training session. When he assumed his role as head of the FAA, Dickson said he will not lift the grounding of the aircraft until he is satisfied with the changes and “would put my own family on it without a second thought,” the St. Louis Post-Dispatch reported.

Administrator Dickson is correct that more needs to be done to ensure the same type of tragedy doesn’t happen again and part of the work must include restoring full safety oversight authority to the FAA. The authority that has been stripped from the FAA and handed over to manufacturers like Boeing is at the heart of the two MAX tragedies that claimed 346 lives, including a family member of the firm’s clients who was killed in the second of the two tragedies – Ethiopian Airlines flight 302.

The MAX has been grounded worldwide since March 2019 shortly after flight 302 crashed, which crashed just five months after Lion Air flight 610. Investigators determined that the new flight control system, the MCAS, malfunctioned, sparking similar chains of events in both flights that resulted in the tragedies. The FAA announced its airworthiness directive in August, defining the steps necessary for the MAX to resume commercial service.

Dickson did not elaborate on the work left to be done and did not commit to an official hard deadline for returning the MAX to commercial service. Boeing executives were hopeful the MAX would return to service in late October but it appears it will once again have to move the timeframe. Some in the industry believe the ban could lift as early as during this month.

The same day Dickson conducted the test flight of the MAX the U.S. House Committee on Transportation and Infrastructure reported out a bipartisan bill created to address the findings of the committee’s investigation of the two MAX crashes. The committee’s findings were announced in September as part of its final report.

The bill, H.R. 8408, was introduced by the committee chair, Rep. Peter DeFazio (D-Oregon), who expressed that he was “alarmed and outraged” at the findings of his committee’s investigation. The bill is called the “Aircraft Certification Reform and Accountability Act,” and among other things:

  • Reforms the FAA’s process for certifying new airplane designs;
  • Requires U.S. aircraft and aerospace industry manufacturers to adopt safety management systems, which include safety reporting programs for their employees; and
  • Requires the FAA to revise and improve the agency’s process for amending type certificates of older airplane designs to add new derivatives and ensure harmonization with the processes of other international states of design.

Additionally, the House committee will create an independent expert panel to specifically review Boeing’s Organization Designation Authorization (ODA) to improve the management of that program. The ODA is the FAA’s process that allows aircraft manufacturers like Boeing to essentially self-certify. The ODA shifts the authority to select and manage the manufacturer’s employees who are “loaned” to the agency from the manufacturer. The FAA confirmed that Boeing has abused its authority as an ODA by exerting undue pressure on workers charged with safety oversight and other ill-advised actions.

Rep. DeFazio further stated that “being alarmed and outraged is not where this story should end. With the comprehensive legislation we are unveiling today, I believe history can also show this was the moment Congress stepped up to meaningfully address the gaps in the regulatory system for certifying aircraft and adopt critical reforms that will improve public safety and ensure accountability at all levels going forward.”

Ranking committee member Rep. Sam Graves (R- Missouri) echoed the need for improving the FAA’s approval and certification processes for new aircraft and for new derivatives of existing and already approved aircraft. Rep. Graves said:

The fact remains that the United States can only do so much to influence factors outside our borders…[b]ut for us, one fact has to remain constant coming out of this: the United States and the FAA must continue to be the gold standard in aviation innovation and, more importantly, aviation safety. Our economy, our competitiveness, and hundreds of thousands of American jobs depend on that.

Mike Andrews, a lawyer in our Personal Injury & Products Liability Section, focuses much of his practice on aviation litigation. Currently, Mike is representing several families in the Boeing litigation. Mike visited the Ethiopian Airlines flight 302 crash site and surrounding areas several times last year.

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.

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.

Sources: BusinessWorld, St. Louis Post-Dispatch and Congress.gov, Congressman Peter DeFazio

THE JUUL LITIGATION

JUUL Litigation Update

Beasley Allen lawyers are hard at work in the JUUL litigation. There are several new developments on the JUUL multidistrict litigation (MDL) front with two of the most notable being the initiation of the bellwether process and the viability of Racketeer Influenced and Corrupt Organizations Act (RICO) claims. We will take a look at both of these areas.

The MDL

As the litigation continues to progress, U.S. District Judge William H. Orrick has ruled that Bellwether selections for trial should move forward. The bellwether selection process is one of the most important steps in MDL litigation. The chosen bellwether Plaintiffs are intended to be representative of the types of cases present in the litigation as a whole.

In this MDL, Judge Orrick has allowed for Plaintiffs and Defendants to each select six bellwether Plaintiffs. The judge will select an additional 12 cases. The selection of these bellwether cases is crucial, as it will determine the outcome of many of the other cases in the litigation. The first bellwether trial is expected to occur starting in early 2021. Further, Judge Orrick has ruled that the discovery phase can move forward as well, allowing both sides to begin gathering the necessary evidence and keep the litigation moving.

RICO Claims

Claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) are intended to prosecute organized crime and can be used in civil lawsuits. Specifically, RICO claims were upheld against tobacco companies in the Big Tobacco litigation. RICO claims carry with them very serious penalties if successfully alleged and proved, and for that reason JUUL is currently trying to keep these allegations out of the litigation altogether.

JUUL is arguing that school districts and individual consumers are not allowed to allege a RICO claim against JUUL because its actions don’t amount to fraudulent “racketeering.” JUUL denies that there was ever any illegal “enterprise.” Other firms are saying that even JUUL’s best arguments will not be able to completely eliminate the viability of a RICO claim in the cases against the vape device company.

Conclusion

If you have any questions on either the MDL or RICO claims, contact a lawyer on Beasley Allen’s JUUL Litigation team.

Sources: Insurance Journal

The JUUL Litigation Team

Beasley Allen lawyers Joseph VanZandt, Sydney Everett, James Lampkin, Beau Darley, Soo Seok Yang, and Mass Torts Section Head Andy Birchfield are currently representing a number of individuals who are suing the top U.S. vape maker JUUL for the negative impact its products have had on their lives. These lawyers currently make up our firm’s JUUL Litigation Team. Lawsuits have also been filed on behalf of school districts nationwide, which seek to protect students and recover resources spent fighting the vaping epidemic. If you have a potential claim or need more information on JUUL, contact any the lawyers on the team at 800-898-2034 or by email at Joseph.VanZandt@beasleyallen.com, Sydney.Everett@beasleyallen.com, James.Lampkin@beasleyallen.com, Beau.Darley@beasleyallen.com, SooSeok.Yang@beasleyallen.com or Andy.Birchfield@beasleyallen.com.

MASS TORTS LITIGATION

Storage Conditions Impact The Level Of Carcinogens In Zantac

A new study published in the journal Chemical and Pharmaceutical Bulletin shows that storage conditions impact the level of the carcinogen NDMA produced in Zantac. N-nitrosodimethylamine, or NDMA, exists in low levels in the environment and is commonly ingested in the diet. When ingested at low levels, NDMA is not considered a cancer risk to humans. However, in June 2019, independent pharmacy Valisure found dangerously high levels of NDMA during routine testing of Zantac. Research conducted by Valisure and others showed that NDMA contamination in ranitidine is caused by the “‘inherent instability’” of the ranitidine molecule.

As a result, the U.S. Food and Drug Administration (FDA) requested manufacturers to withdraw all prescription and over-the-counter ranitidine drugs from the market in April 2020.

In August 2020, researchers from the National Institute of Health Sciences in Japan published an article studying the impact of high-temperature storage conditions on ranitidine (Zantac). They found that under higher temperatures, the amount of NDMA in two different brands of ranitidine increased significantly from 0.19 to 116 ppm and from 2.89 to 18 ppm respectively. Additionally, the researchers found that other environmental factors, such as oxygen and moisture levels, impacted the level of NDMA formed in ranitidine. Based on their findings, the researchers discussed the importance of controlling and monitoring storage conditions in order to reduce the potential of NDMA-related health risks.

Beasley Allen continues to investigate claims involving a cancer diagnosis after regular Zantac or ranitidine use. Consumers who may have been affected can contact Frank Woodson (Frank.Woodson@beasleyallen.com) or Melissa Prickett (Melissa.Prickett@beasleyallen.com), lawyers in our Mass Torts Section, for more information. You can also call them at 800-898-2034.

Source: Consumer Safety Watch (Chem. Pharm. Bull. 68, 1008-1012 (2020))

INSURANCE INDUSTRY LITIGATION

MDLs Denied For Business Interruption Lawsuits Against Three Insurers, Granted For One

As the COVID-19 pandemic continues to negatively impact our nation, law firms across the country have been taking a stand against insurance companies denying business interruption insurance coverage claims. Numerous cases have been filed and courts are forced to wrestle with whether business interruptions due to an unpredictable virus and subsequent government-forced shutdowns are covered causes of loss. Much of the dispute arises from whether there is an exclusion for viruses in the policy and the meaning of “physical loss or damage” in policies. Since April 2020, policyholders with business interruption coverage claims have sought centralization of their claims into a multidistrict litigation (MDL).

On Aug. 12, 2020, the Judicial Panel on Multidistrict Litigation (JPML) declined to centralize hundreds of cases filed by businesses against more than 100 insurance carriers seeking insurance coverage for losses caused by the COVID-19 pandemic and resultant government orders. However, the JMPL indicated it would consider single-insurer MDLs and issued an order directing specific insurers to show cause why actions involving business interruption claims should not be centralized into MDLs. Specifically, the show cause orders were directed to The Hartford, Cincinnati Insurance Co., Certain Underwriters at Lloyd’s of London, and Society Insurance Co.

On Oct. 2, 2020, the JPML declined to centralize claims against all but one of the insurers to which it previously issued show cause orders. The JPML determined that MDLs were inappropriate for business interruption cases against The Hartford, Cincinnati Insurance Company, and Certain Underwriters at Lloyd’s of London. Although the JPML recognized the lawsuits will involve common factual questions and discovery, the JPML ultimately concluded that efficiency and quick resolution of the lawsuits was best obtained outside the context of MDLs.

On the other hand, the JPML determined that an MDL was warranted for business interruption claims against Society Insurance Company, which is a regional carrier that sells insurance in the Midwest. In centralizing claims against Society in the Northern District of Illinois, the JPML reasoned that the lawsuits against the carrier involve common factual questions, such as whether COVID-19 caused any direct physical loss of or to property, and discovery regarding the drafting and interpretation of the policies would overlap.

In concluding an MDL was the most efficient means for resolving claims against Society, the JPML noted that the lawsuits against Society were filed in six neighboring states and the majority were filed in one district, which was distinguishable from lawsuits against The Hartford, Cincinnati, and Lloyd’s that were filed in nearly half the of states. Ultimately, the JPML concluded that the litigation across the country against The Hartford, Cincinnati, and Lloyd’s created manageability issues that were not present with lawsuits against Society.

Additionally, in August, policyholders with business interruption coverage lawsuits against Erie Insurance Group moved the JPML for consolidation of all similar lawsuits against the insurer. To date, a majority of the lawsuits involving Erie have been filed in Pennsylvania and New York, which would appear to favor consolidation given the JPML decisions on Oct. 2. The JPML is set to hear arguments regarding consolidating the Erie cases on Dec. 3, 2020.

11th Circuit Revives $50 Million Bad Faith Suit Against Progressive

The Court of Appeals for the Eleventh Circuit ruled last month that a unit of Progressive American Insurance Co. (Progressive) must face a suit alleging it is responsible for a judgment of more than $50 million against a policyholder who caused a car crash that severely injured a Florida woman and her four children. The court said there is sufficient evidence that the insurer failed in bad faith to settle the family’s claims.

Reversing a Florida federal judge, a panel of the appeals court said a jury should decide whether Progressive is obligated to cover the massive judgment against its insured, Nathan Pyles, who was found at trial to be liable for the 2013 collision that injured Yolanda Aldana and her four minor children.

Senior U.S. District Judge James S. Moody Jr. had granted summary judgment to Progressive in the Aldanas’ bad faith suit last year. The judge based his holding on a finding that the insurer never had a legitimate opportunity to settle the family’s claims against Pyles within the $500,000 limit of Pyles’ auto policy. The Eleventh Circuit panel disagreed, saying a reasonable jury could find that Progressive failed to take proactive steps to reach a settlement with the Aldanas and avert the possibility that a judgment exceeding the policy limits could be levied against Pyles. The panel wrote:

We conclude that there is sufficient, competent evidence, construed in the light most favorable to the Aldanas, to support a verdict in their favor. Accordingly, we vacate the grant of summary judgment and remand for further proceedings.

Pyles crashed his car into the back of Yolanda Aldana’s vehicle in December 2013 while she was stopped at a red light in Ocala, Florida. The force of the crash caused Ms. Aldana’s vehicle to surge forward and slam into a minivan driven by Jaron Ang.

The collision caused severe injuries to Ms. Aldana and her children, who ranged in age from 2 to 12. Ms. Aldana and the three older children suffered various broken bones and internal injuries, while the 2-year-old suffered a brain injury that rendered him a paraplegic. Ang also suffered relatively minor injuries in the crash.

Progressive American launched an investigation and quickly concluded Pyles was “completely liable” for the crash. A little more than two weeks after the accident, the insurer contacted lawyers for the Aldanas and Ang, seeking a global settlement with all six injured victims within the $500,000 limit of Pyles policy. Progressive American asked the lawyers to respond to the offer by early January 2014.

But the Aldanas’ original lawyer, J. Ross Davis, told Progressive American it would be “virtually impossible” to divide up the policy benefits by the January 2014 deadline, and indicated his clients’ damages were likely to reach well beyond the $500,000 cap and into the millions of dollars. Davis asked for a postponement of the global settlement conference so he could obtain further information on Pyles’ finances – to gauge Pyles’ ability to pay damages over $500,000 – and Progressive American and Ang agreed.

But Pyles never responded to Davis’ request for financial affidavits, and a global settlement never materialized. In August 2014, the Aldanas changed lawyers and they then sued Pyles in Florida state court. A jury returned a verdict in the Aldanas’ favor in February 2017, and the trial court later entered a judgment against Pyles in excess of $50 million.

Following the verdict, Pyles assigned to Aldanas his rights to pursue claims under the Progressive policy. The family then sued the insurance company for bad faith in Florida state court in Spring 2018. Progressive removed the case to federal court shortly thereafter.

In July 2019, Judge Moody issued his decision granting Progressive summary judgment, determining the insurer had “no reasonable opportunity” to settle with the Aldanas within Pyles’ policy limit. The judge noted that, among other things, the Aldanas’ original lawyer, Davis, never responded to the insurers’ request to reschedule the global settlement conference and did not produce medical records regarding the Aldanas’ injuries. After Judge Moody rejected their reconsideration bid, the Aldanas appealed to the Eleventh Circuit.

In reversing Judge Moody’s ruling, the appellate panel pointed to multiple pieces of evidence that could support the Aldanas’ bad faith claim. For one, Yolanda Aldana has testified that, if Progressive had offered Pyles’ full $500,000 limit to settle her claims and those of her children – rather than pursuing a global settlement that also encompassed Ang – they would have accepted that sum. This insurer argued this testimony contradicts Davis’ past statements that the Aldanas would not engage in settlement talks until they had Pyles’ financial data and other information, but the Eleventh Circuit was unconvinced. The panel wrote:

This testimony is not ‘directly contradictory’ to Davis’ prior statements to Progressive, such that no reasonable jury could believe it, for the simple reason that Progressive never offered the policy limits solely to the Aldanas and the Aldanas never responded to that offer.

In addition, the panel pointed to the testimony of the Aldanas’ insurance expert, George Vaka, who opined that Progressive failed to act “with any haste” to try to resolve the Aldanas’ claims – which Vaka described as a “ticking financial time bomb” – after it became clear the global settlement strategy was not working. The panel wrote:

Progressive suggests that it satisfied its good-faith duty by offering to globally settle and that it was then incumbent on Davis and the Aldanas to respond with a reasonable opportunity to settle. But Progressive’s duties are not a “mere checklist” that, once satisfied, will absolve it of liability; rather, ‘the critical inquiry … is whether the insurer diligently, and with the same haste and precision as if it were in the insured’s shoes, worked on the insured’s behalf to avoid an excess judgment.’

The Aldanas are represented by Stephen Anthony Marino Jr. and Michal Meiler of Ver Ploeg & Marino PA and Stephen F. Rosenthal of Podhurst Orseck PA. The case is Yolanda Aldana et al. v. Progressive American Ins. Co. (case number 19-12950) in the U.S. Court of Appeals for the Eleventh Circuit.

Source: Law360.com

CONSUMER MONEY MATTERS

Payday And Title Loans Crushing Alabama Communities

Ten years from now, rural and urban communities throughout Alabama will be $1 billion poorer due to the fees predatory payday and auto title lenders are allowed to charge individuals. Most of that money will be taken from Alabamians already struggling to make ends meet and sadly that money will land in the bank accounts of out-of-state companies.

Payday and title loans are short-term loans that usually require borrowers to pay the loan back in full within two weeks or less. These loans carry exorbitant interest rates as high as 456% for payday loans and 300% for title loans. To say these type loans are anti-consumer would be a gross understatement. They are totally evil and hurtful to Alabama citizens.

Borrowers who can’t repay their loans in full plus the loan fees at the end of their loan term must pay additional fees on top of the unpaid amount. All of this will be rolled over into a new loan term. This means a person borrowing $250 with an APR of 456% would pay $1,140 in fees over the course of a year and still owe the original amount borrowed.

While that may sound like an extreme example, it definitely isn’t. The most common payday loan period in Alabama is 14 days, which results in an APR of 456% for the most common loan structure.

Loan structures like this aren’t based on risk. They are designed to trap people in a spiraling cycle of debt. If it becomes impossible for a borrower to pay back their loan, the lender will forcibly take the cash from the borrower’s bank account, usually without notifying the borrower. They may also cash a post-dated check signed by the borrower when the loan was issued or the loan shark can directly debit the borrower’s bank account, creating insufficient funds and overdraft fees.

It’s easy to see how so many Alabamians become trapped in these nefarious loans and how, in the bigger picture, predatory lenders, the worst of all loan sharks, are crushing Alabama communities. The good news is that more than half of Alabamians support banning payday lending and nearly 75% support a 36% APR cap on payday loans as well as longer (30 day) loan terms. So why hasn’t there been a clamp down on the industry?

The bad news is that too many of our legislators, both at the national and local levels, are supported by the predatory loan lobby. Alabama is not an exception. Not only have legislators obstructed payday and title loan reform, all the progress that has been made over the last several years has been unraveled in Washington by the Trump Administration.

In July, the federal Consumer Financial Protection Bureau (CFPB), an agency designed to protect consumers from corporate usury and fraud, made the almost unbelievable move to completely gut all the hard-fought payday loan regulations passed under the Obama administration. The rollbacks came in the thick of the COVID-19 pandemic, which already had devastating consequences for thousands of Alabama families.

Stephen Reeves, associate coordinator of partnerships and advocacy with the Cooperative Baptist Fellowship, called the rollback “disheartening” but “unsurprising,” according to Alabama Appleseed & Alabama Arise. “I’m afraid the agency built with consumer protection at heart has instead caved to predatory lenders,” he said.

In Alabama, Sen. Arthur Orr, R-Decatur, sponsored a bill (SB 75) to extend the payback time on payday loans to 30 days, up from as few as 10 days now. A House version of the bill was also introduced by Rep. Danny Garrett, R-Trussville. This one measure would reduce the maximum APR on payday loans in Alabama from 456% to about 220%. Neither of these bills have moved. The Senate Banking Committee chairman has given assurances that he would allow a vote on the senate bill.

Paul Baxley, Cooperative Baptist Fellowship Executive Coordinator, expressed urgency in stopping the “immoral and sinful practice of predatory lending.” He told Alabama Appleseed & Alabama Arise:

We cannot keep silent as sisters and brothers in Christ are exploited, and we cannot ignore the systemic racial injustice inherent in this industry.

I encourage everybody who is interested in protecting working men and women, and the public generally, from the payday and title lending industries to get involved in the ongoing battle to either put the companies involved out of business or at the very least to bring about real reforms. You can start in Alabama by contacting Gov. Kay Ivey, Lt. Gov. Will Ainsworth and your Senators and House members.

Sources: Alabama Arise, Alabama Appleseed, Montgomery Advertiser, and Baptist News Global

Consumers Reach $66.7 Million Settlement With Banks Over ATM Fees

A group of consumers has asked a D.C. federal judge to preliminarily approve a $66.74 million settlement with Bank of America and other financial institutions to end claims they fixed prices with credit card issuers to keep ATM fees inflated. If it gets approval, the settlement would be the first settlement out of class actions going back about roughly nine years, encompassing three different cases in district court against Visa, MasterCard and a host of banking companies over ATM surcharges.

The total settlement amount – including $26.42 million from Bank of America, $20.82 million from Wells Fargo and $19.5 million from Chase – represents 57.5% of the maximum single damages estimated for class transactions at those banks’ ATMs. The settlements leave non-settling Defendants Visa and MasterCard jointly and severally liable for the remainder of Plaintiffs’ damages. It also requires cooperation from the bank Defendants in the notice process and litigation.

The named consumer Plaintiffs in the instant case, Andrew Mackmin and Sam Osborn, reached the settlement with Bank of America, National Association; NB Holdings Corp.; Bank of America Corp.; Chase Bank USA NA; JPMorgan Chase & Co.; JPMorgan Chase Bank NA; Wells Fargo & Co.; and Wells Fargo Bank NA.

While the allegations in the consolidated suits vary, the Plaintiffs generally claim consumers would pay lower rates when taking out money or conducting other transactions at ATMs run either by independent operators or by banks at which they do not have accounts if not for an alleged plot to fix the price of access fees. The litigation that started in 2011 also named Visa and MasterCard among the Defendants.

The consumers are represented by Steve W. Berman, Ben M. Harrington and Benjamin J. Siegel of Hagens Berman Sobol Shapiro LLP, Stephen R. Neuwirth, Adam B. Wolfson and Viola Trebicka of Quinn Emanuel Urquhart & Sullivan LLP and Steven A. Skalet of Mehri & Skalet PLLC.

The case is Mackmin et al. v. Visa Inc. et al. (case number 1:11-cv-01831) in the U.S. District Court for the District of Columbia.

Source: Law360.com

EMPLOYMENT AND FLSA LITIGATION

Cable Company To Pay $1.85 Million To Settle Wage & Hour Suit

A cable television installation company has agreed to pay $1.85 million to end a suit from its field technicians in several East Coast states claiming they were not paid overtime and other wages. The proposed agreement seeks to resolve a two-year-old wage-and-hour proposed class and collective action brought against J&L Cable TV Services Inc. by nonexempt, hourly field technicians. J&L Cable installs cable and fiber equipment for residential and commercial customers of telecommunications conglomerates Comcast Corp. and Charter Communications Inc.

The settlement stems from a lawsuit filed by field technicians who alleged that they logged 10- to 14-hour days without overtime compensation, pay for drive time between work sites, meal breaks and reimbursement for tools and fuel for their jobs in violation of federal and state wage and hour laws. The technicians alleged that they were pressured to under-report their work hours by up to four hours a day. They also claimed they were not paid for time spent working before they were allowed to clock in and clock out. The settlement includes potentially hundreds of current and former technicians who worked for the company in Massachusetts, New Hampshire, Maine and Pennsylvania.

This is just one example of labor abuses that occur every day in our country. The law provides protections from these types of wage and hour violations, but it requires courageous employees to come forward and challenge their superiors who are abusing the labor laws. Our firm has been front and center on these issues for many years and we continue to dedicate a portion of our law practice to helping victims of labor law abuses.

For more information contact our firm’s lead labor lawyers Lance Gould or Larry Golston at Lance.Gould@beasleyallen.com or Larry.Golston@beasleyallen.com or at our office, 800-898-2034.

Source: Law360.com

PREMISES LIABILITY LITIGATION

The Premise Of Premises Liability

Claims for negligence arising from premises liability may be the oldest claims known to man. Even the Bible provides some instruction and insight to premises liability; Deuteronomy warns us to build parapets to avoid the “guilt of bloodshed on your house if someone falls from the roof.” In Exodus, the Bible tells us that “[i]f a man opens a pit and does not cover it over, and an ox or donkey falls into it, the owner of the pit shall make restitution.”

Premises liability law has, of course, evolved and become more complex since those times. But even in the Bible we see the importance of foreseeability in the forming of legal standards. This simple truth – that owners should be liable when they know or should have known of a harm – is just as relevant to juries in assessing a verdict as it is to judges contemplating a summary judgment.

In general, many lawyers consider premises liability cases to be tough cases. There are myriad protections to owners of property from suit, and oftentimes the danger to the injured person is at least somewhat visible or understood by the person injured. This can be a death knell to a premises liability case. However, the facts that make these cases difficult can turn quickly into advantages if aggressive and meaningful discovery can show that the Defendant was on notice of the dangerous condition. Let’s take a look at two cases involving premises’ liability.

The Walmart Case

In 2015 Henry Walker went to a Walmart in Phenix City, Alabama, to buy some watermelon. As he was picking a watermelon up from the display, his foot got stuck in the pallet under the display. He turned, not realizing his foot was trapped, and fell, breaking his hip. It is easy to envision the defenses raised in this kind of scenario. However, Plaintiff’s lawyers were able to discover the video footage of the watermelon stand, and the jury was able to see that other customers had been tripped by the pallet and in nearly an identical way. The jury returned a $7.5 million verdict in 2017. This one piece of evidence not only proved that Mr. Henry’s actions were not his fault but it showed that Walmart was on notice of the issue, and did nothing.

The J.C. Penny Case

Natalie Bourg is a mother of two boys, and in 2014 she took her two sons, aged 5 and 9, to the mall. They were going to see a movie, but Mrs. Bourg wanted to do a little shopping first, and took them to the J.C. Penney. While in the children’s section, the boys began playing tag and running around the aisles. In fact, the children were so boisterous in their play that an employee even told them to calm down. When the youngest boy turned the corner in one of the display aisles, a protruding sales rack caught him in the eye, nearly ripping his eyelid off. After surgeries, fortunately the injuries have healed with no lasting physical damage. Even though the rack protruded farther than its base, and had sharp rather than curved edges at head level for a child, it is easy to see the downsides – the children were running around recklessly, the employees had warned them to stop, the mother failed to control her children. On its own, this is a tough case. However, Plaintiffs were able to discover that, across the nation, there were 35 similar instances across J.C. Penney stores. The Mississippi jury returned a $1,468,000 verdict.

These cases highlight the importance of discovery in premises cases to overcome the contributory negligence aspect that is inherent in almost all premises cases. Laws in nearly every state make proving liability in premises cases difficult – but the protections are based in the age-old premise that foreseeability is the harbinger of liability. And usually, if it happened to your client, it has probably happened to others. It is of vital importance to use this underlying truth as the fundamental wrongdoing in a premises case.

Not all notice needs to involve other similar incidents, though. The important point is to frame the injury as a foreseeable event, rather than a single person’s fall or slip or decision. The following case is on point.

The Little Lagoon Case

In 2016, a young man named Samuel Steib rented a condo in Gulf Shores, Alabama. In the condo complex was a pond known as “Little Lagoon.” He didn’t arrive in Gulf Shores until 9 p.m., and eventually he and his friends went to hang out by the lagoon. At some point, near 1:30 in the morning, Steib dove in. He didn’t know that the water was only 3 feet deep, and as a result of the dive, he fractured his neck and was rendered a permanent quadriplegic. Steib was in his 20s, and he chose to jump into a body of water he had never set foot in, in the dark – and he chose to do so head-first. In a beachside community that is certainly aware of the dangers of diving into unknown depths, this is a difficult set of facts to overcome.

What’s the important factor in this case that allowed Plaintiff’s lawyers to show that it was the Defendant’s knowledge of the danger, and not Steib’s own recklessness that led to his injury? The simple fact is that Steib dove off a pier that led to the middle of the lagoon, rather than from the bank. No prior incidents were needed to prove to the Baldwin County jury that this action was foreseeable. As the Bible tells us to build a parapet, the condo needed to have warnings of the shallow water in the middle of the pond. There was no such warning. The jury returned a verdict of $11,600,370.

Premises liability cases are tough – but the same reasoning that provides protection to land owners can be used in a Plaintiff’s favor. It’s all about foreseeability.

If you have any questions, contact Warner Hornsby, a lawyer in our firm’s Personal Injury & Products Liability Section, at 800-898-2034 or by email at Warner.Hornsby@beasleyallen.com. Warner is one of the lawyers in the Section handling premises liability cases for the firm.

WORKPLACE HAZARDS

Employers’ Responsibility To Report Workplace Injuries

The Occupational Safety and Health (OSH) is a federal law established in 1970 to ensure a safe working environment for American employees. The Occupational Safety and Health Administration (OSHA) is the federal agency charged with enforcing safe workplace regulations. The agency is primarily concerned with keeping the workplace safe and reducing injuries, illnesses and fatalities for American workers. One of the more well-known regulations OSHA enforces is the requirement that all employers notify OSHA when an employee is killed on the job or suffers a work-related hospitalization, amputation, or loss of an eye. A fatality must be reported within eight hours; an in-patient hospitalization, amputation, or loss of an eye must be reported within 24 hours.

Kendall Dunson, a Beasley Allen lawyer who handles workplace injury litigation, discovered in a recently filed case that the employer did not report his client’s arm amputation to OSHA. When Kendall informed OSHA of the employer’s failure to report the incident, he expected the agency to punish the employer for its failure to follow federal law. What Kendall discovered was surprising and disappointing.

After informing OSHA of the employer’s violation, Kendall received a letter from OSHA informing him it could not conduct an inspection because the incident occurred more than six months ago. More importantly, Kendall was also informed that there would be no punishment for the employer’s failure to notify OSHA of a reportable workplace injury. If the employer had informed OSHA of the injury, the agency would have dispatched an investigator to visit the site, document the scene and interview essential witnesses including Kendall’s client.

Additionally, OSHA would have determined if the employer violated any OSHA regulations and imposed a fine based on the results of the investigation. All of OSHA’s activities following notice of a reportable workplace injury are beneficial to Kendall’s client’s suit. The ability to capture the site and equipment in the condition it was in on the day of the incident is important. In this particular case, it is extremely important because the employer made changes to the equipment causing the injuries before suit was filed.

The inability of OSHA to investigate if more than six months have passed and the inability of OSHA to issue a fine based solely on the failure to give notice of a reportable injury will incentivize employers to conceal incidents from OSHA. The concealment of incidents from OSHA will affect the agency’s purpose of promoting safety in the workplace and will ultimately result in more injuries and fatalities for innocent American workers. Kendall responded to OSHA to express his concerns and he is committed to pursuing a change in the OSHA regulations to allow OSHA to punish employers for failing to follow federal laws.

I will update you on the progress of Kendall’s efforts in the case and with OSHA. If you have any questions, contact Kendall Dunson at 800-898-2034 or by email at Kendall.Dunson@beasleyallen.com.

OSHA Facts And Statistics

The Occupational Safety and Health Administration (OSHA) was established in 1971. Since its formation, on the job injury and fatality rates have dropped significantly. It is estimated that approximately 14,000 workers were killed on the job in 1970. In 2018, that number fell to just over 5,000. This equates to roughly 100 on the job deaths per week, or 14 per day. Since the OSH Act was passed, the rate of reported serious workplace injuries and illnesses has dropped from 11 per 100 workers in 1972, to 3.6 per 100 workers in 2009. However, these numbers can still be improved upon.

Today, OSHA is still considered a small governmental agency, employing approximately 2,100 inspectors responsible for the oversight of the health and safety of 130 million workers employed at more than 8 million worksites around the nation. This translates to roughly one compliance officer for every 59,000 workers. OSHA has 10 regional offices and 85 smaller local area offices. These compliance officers were responsible for 32,020 inspections in 2018.

Out of 4,779 fatalities in the private sector in 2018, just over 1,000 or 21% were in the construction industry. The leading cause of deaths in the construction industry were falls, workers being struck by objects, electrocution, and crush injuries. These are known as the “fatal four” by OSHA and account for more than half the construction sector deaths. Eliminating the “fatal four” would save 590 lives in America every year.

The 10 most frequently cited OSHA standards in 2019 were as follows:

  • Fall protection, construction
  • Hazard communication standard, general industry
  • Scaffolding, construction
  • Control of hazardous energy, (lockout/tagout), general industry
  • Respiratory protection, general industry
  • Ladders, construction
  • Powered industrial trucks, general industry
  • Fall protection, training requirements
  • Machinery and machine guarding, general requirements
  • Eye and face protection

In the four decades since inception, OSHA has had a dramatic effect on workplace safety. Worker deaths in America are down on average, from approximately 38 worker deaths a day in 1970 to 14 a day in 2017. Worker injuries and illnesses are down from 10.9 incidents per 100 workers in 1972 to 2.8 per 100 in 2017. These numbers are especially significant given that the number of workers and worksites has increased dramatically over this same 40-year time span.

If you have any questions, contact Evan Allen, a lawyer in our Personal Injury & Products Liability Section, at 800-898-2034 or by email at Evan.Allen@beasleyallen.com. Evan handles work-related litigation for Beasley Allen.

Source: OSHA.gov

AN UPDATE ON MOTOR VEHICLE LITIGATION

Beasley Allen Lawyers Handling Major Trucking Cases Across The Country

For years, lawyers in our firm have been fortunate to have had the opportunity to handle significant trucking cases for Plaintiffs across the country. As we have discussed in previous issues of the Report, the results of these trucking accidents are most often horrific. For example, an entire family can be killed when a truck driver loses control of a large truck and crashes into a family vehicle.

Our firm has assembled a team of lawyers with experience in litigating significant trucking cases. They include Chris Glover, Parker Miller, Rob Register and Ben Keen in our Atlanta office, and Greg Allen, Cole Portis, Mike Crow, Ben Baker, Ben Locklar and Warner Hornsby in our Montgomery office. Even in a year dominated by COVID-19, our lawyers have secured multiple major truck accident resolutions in Georgia and Alabama and in other states, including Illinois.

The firm also has cases coming up for trial in the coming months, including a major truck wreck death case in Alabama federal court in November. Truck wreck cases are often removed to federal court based on the nature of the trucking industry (and, from a jurisdictional perspective, the diversity that results). While our lawyers often handle trucking cases in state courts, some of our co-counsel who would prefer to litigate in state court contact us when one of their cases is removed to federal court. Whether in state or federal court, we are glad to help other lawyers and their clients get justice.

While a lawyer would be tempted to treat a trucking case like a regular car accident, trucking cases are quite different. All aspects of handling these cases – including investigation, discovery, technology analysis, and the special laws involved – are far more complicated and time consuming than what’s involved in a traditional car accident case.

For instance, the U.S. Department of Transportation’s (USDOT) Federal Motor Carrier Safety Administration (FMCSA) provides regulations for the safe operation of interstate commercial vehicles. Federal rules and regulations speak to a variety of issues, including a host of matters involving the drivers themselves, the vehicles they operate, company administration, safety measures, hazmat situations and regulatory guidance.

Defendants can range from the trucking company at issue, to a product manufacturer, a broker, the owner of a trailer, or even a maintenance company.

Federal preemption can sometimes become an issue depending on the type of case. For those large commercial trucks operating inside of states, there is typically a state equivalent to the FMCSA.

If you have a truck wreck case, we value flexibility in these cases with our co-counsel and would welcome the opportunity to work with you. If you have any questions about these cases, contact Cole Portis or Parker Miller by email at Cole.Portis@beasleyallen.com and Parker.Miller@beasleyallen.com, or by phone at 800.898.2034.

Lawsuit Filed Against Mercedes-Benz Over Illegal Emissions Cheat Device

The Environmental Protection Commission of Hillsborough County, Florida, has filed a complaint in federal court in Florida alleging the engines in Mercedes-Benz diesel vehicles spewed illegal amounts of toxic emissions into the air by way of a cheat device. Hillsborough County is suing Mercedes-Benz USA, LLC, Daimler Aktiengesellschaft, the automaker’s German parent company, Robert Bosch, LLC, and Robert Bosch GmbH to hold the designer, manufacturer and retailer accountable for the excessive pollution.

The Hillsborough Commissioners, seated in Tampa, unanimously authorized the lawsuit, selecting Beasley Allen, Gardner Brewer Martinez-Monfort, and the law office of Thomas L. Young to represent the county. Beasley Allen is also representing Hillsborough County in a similar emissions cheat lawsuit against Volkswagen. That case, which was filed in 2016, is pending in federal court.

The U.S. Justice Department (DOJ) announced on Sept. 14 that it had reached a $1.5 billion settlement with Daimler over its rigged diesel Mercedes Benz vehicles. The agreement, which was under a 30-day public comment period and is subject to court approval, requires Mercedes-Benz to pay $945 million in penalties, recall and repair the emissions systems in diesel vehicles it sold in the U.S. from 2009 to 2016, and extend the warranty for vehicle parts.

Under the agreement, Daimler/Mercedes-Benz will also execute projects to mitigate ozone-creating nitrogen oxides emitted from the vehicles and implement new internal audit procedures designed to prevent future emissions cheating, including about $110 million for pollution mitigation projects in California.

The DOJ alleged that Mercedes-Benz made more than a quarter-million diesel-powered Sprinter vans and cars that were equipped with undisclosed “defeat devices” programmed into the emissions control software. These cheats allow the vehicles to emit unlawfully high levels of nitrogen oxide into the environment during normal driving. When the vehicles are undergoing testing, the defeat devices restrict the nitrogen oxide emissions, allowing the vehicles to meet Clean Air standards.

If you have any questions, contact Dee Miles, Clay Barnett, Lance Gould, Lauren Miles or Tyner Helms, lawyers in our Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Dee.Miles@beasleyallen.com, Clay.Barnett@beasleyallen.com, Lance.Gould@beasleyallen.com, Lauren.Miles@beasleyallen.com or Tyner.Helms@beasleyallen.com.

The lawsuit was filed in the United States District Court for the Middle District of Florida, Tampa Division (Case No. 8:20-cv-02238-VMC-JSS.)

Hyundai Agrees To Fix Cars In Engine Defect Suit Settlement

A proposed class of Elantra drivers has asked a New Jersey federal court to approve a settlement that would have Hyundai Motor America pay to fix cars with an alleged engine defect and bring the claims against the automaker to a close. Named Plaintiffs Elizabeth Brown, Janeshia Martin and Nicholas Moore said the settlement will have Hyundai cover repairs to correct the defect during an extended warranty period of 10 years or 120,000 miles. The car company will also reimburse class members fully for their out-of-pocket expenses for rental car or towing service, as well as repairs.

In turn, the class will release claims against Hyundai stemming from the allegations in the complaint, except for claims of death, personal injury, subrogation and damage to property besides the class vehicles, the proposed class said.

Hyundai has agreed to pay for notice to the class through direct mail using its own records, and will also not oppose requests for up to $875,000 in attorney fees and expenses and service awards of $2,500 for each of the three named Plaintiffs.

The proposed class action filed in June 2018 alleges the vehicles failed due to a piston defect in the engine, which Hyundai knew about and hid from its customers. Drivers said the defect took the form of a knocking noise coming from the engine followed by complete engine failure. U.S. District Judge Susan D. Wigenton dismissed the suit last August, finding that Brown’s engine failed due to her lack of proper car maintenance rather than an engine defect, defeating her express and implied warranty claims. Judge Wigenton also dismissed state fraud claims, finding that Brown didn’t adequately show that Hyundai knew about the alleged defect. Claims from other named Plaintiffs failed for inadequate pleading or lack of standing, according to the dismissal order.

The plaintiffs filed an amended complaint in September 2019, and stipulated to dismissal without prejudice a year later, before moving for approval of the settlement.

The proposed class asked the court to certify a class of all U.S. drivers who bought or leased a class vehicle, and to designate as class counsel Matthew Schelkopf of Sauder Schelkopf LLC, Nicholas A. Migliaccio of Migliaccio & Rathod LLP, and Daniel C. Levin of Levin Sedran & Berman.

“Certain owners of these vehicles will be eligible for an extended warranty and other remedies,” Hyundai said in a statement. “Hyundai is pleased with the settlement and looks forward to sharing its benefits with customers and the court.”

The proposed class is represented by Matthew D. Schelkopf, Joseph G. Sauder and Joseph B. Kenney of Sauder Schelkopf LLC; Nicholas Migliaccio, Jason Rathod and Esfand Y. Nafisi of Migliaccio & Rathod LLP; and Daniel C. Levin of Levin Sedran & Berman. The case is Brown et al. v. Hyundai Motor America et al. (case number 2:18-cv-11249) in the U.S. District Court for the District of New Jersey.

Source: Law360.com

Judge Paints Path Forward For Oregon Oil Consumption Lawsuit

U.S. District Judge Michael H. Simon, for the District of Oregon, granted in part and denied in part GM’s motion to dismiss claims brought by Plaintiff William Martell alleging GM concealed a serious safety defect from him.

The Plaintiff’s complaint alleges that his and other class members’ Generation Four Vortec 5300 V-8 engines consume oil in such high volume that they mess up spark plugs and wear down internal rotating components from inadequately lubricated metal-on-metal contact. It’s alleged that GM knew about the excessive oil consumption, but actively concealed it from the Plaintiff and other consumers and also failed to offer a free and adequate remedy.

The State of Oregon recognizes affirmative misrepresentation, omission of fact where there’s a duty to disclose, omission of fact needed to make a “half-truth” clear, and active concealment.

Even though Judge Simon agreed with GM that the complaint had some pleading deficiencies, his order permits the Plaintiff to amend his complaint. The judge paints a clear path for moving forward. Dee Miles, the Head of our firm’s Consumer Fraud & Commercial Litigation Section, says:

We are amending the complaint, as the court instructed, to cure any areas of concern. These GM cases have already been certified as a class in a California Federal Court. This case is a single Oregon State class that will ultimately be joined with the other classes. The Judge just wants the complaint pled a certain way. We will comply with the Judge’s order and are confident the case will proceed.

The case is Martell v. General Motors LLC and is filed in the U.S. District Court for the District of Oregon by Beasley Allen lawyers Dee Miles, Clay Barnett and Mitch Williams, along with Adam J. Levitt, John Tangren, and Daniel Ferri of Dicello Levitt Gutzler.

Litigation Arising Out Of Massive Tractor-Trailer Crash That Killed Three

A man injured in a massive crash involving a tractor-trailer on an Interstate highway in Pennsylvania that killed three people, including a 16-month-old girl and her father, and a college student, has filed suit against the trucker and multiple engineering companies.

Paul Potts alleges in his complaint that trucker Jack Satterfield is to blame for driving recklessly while intoxicated and that the engineering defendants didn’t adequately protect motorists who were stopped in the work zone where the crash occurred on the evening of Oct. 12, 2018.

The Plaintiff’s pickup truck became part of a 12-vehicle pile-up when Satterfield’s big rig rear-ended the line of stopped vehicles in a construction zone.

Satterfield, who had been drinking alcohol before the collision, pleaded guilty to multiple criminal charges, including homicide by vehicle. The 31-year-old Mississippi man is currently serving a lengthy prison sentence.

Other Defendants in the Potts suit are Greentree Logistics Inc. of Minnesota (Satterfield’s employer), the construction companies for the road project, three engineers and a traffic control company. It’s contended in the complaint that those Defendants failed to devise a traffic control plan that would give adequate warning of the construction zone or to provide for a safe flow of traffic through the zone.

The Plaintiff was injured in the crash. The filing of Potts’ suit comes nearly two years after Jessica Lybrand, whose infant daughter and 24-year-old husband died in the crash, filed a similar complaint in Philadelphia County Court. It was discovered in that lawsuit that Satterfield was driving on a suspended license and had been previously charged in Mississippi in connection with drug possession.

Source: Pennlive.com

Widow Sues Drunk Driver For Husband’s Wrongful Death In Head-on Crash

Beasley Allen lawyer Mike Crow has filed a wrongful death lawsuit on behalf of Michelle Sullins, widow of Christopher Sullins, and the couple’s three young daughters, against DeMarquis Deon Teague. When driving while impaired by alcohol, Teague’s vehicle crashed head-on into Mr. Sullins’ vehicle, killing him instantly. In addition to Teague, the lawsuit also names as a Defendant Sharon Katrina Latrel Fayson, owner of the vehicle Teague was driving at the time of the crash. The basis for her liability is for loaning Teague the vehicle despite her knowledge of his criminal driving history. Mike had this to say about the lawsuit:

As a result of Teague’s continued pattern of negligent behavior behind the wheel, Mrs. Sullins must pick up the pieces of her life and raise the couple’s three daughters alone – something she never expected to do. Sadly, Fayson enabled Teague. Allowing him access to a vehicle and knowing his proclivity for reckless driving in the past, she essentially armed him with a deadly weapon that took Mr. Sullins’ life and robbed our client and her daughters of a future with a man they knew as husband and father.

The tragic crash occurred in September 2019 when Mr. Sullins and Teague were driving in opposite directions on Gardner Road between Highway 94 and Pisgah Road in Montgomery County, Alabama. Teague, impaired by alcohol, was driving recklessly when he crossed into the opposite lane, causing a head-on crash that immediately took Mr. Sullins’ life.

The complaint alleges that Fayson knew of Teague’s driving history including his pleading guilty to the following crimes:

  • driving while suspended and speeding in December 2013;
  • speeding and no driver’s license in May 2016; and
  • speeding, driving while suspended, reckless driving, failing to stop, possession of marijuana, attempting to elude [law enforcement], and leaving the scene of an accident in November 2016.

Further, within less than a month after the crash that took Mr. Sullins’ life (October 2019), Teague also pled guilty to DUI, driving while revoked, improper lane change, attempting to elude [law enforcement], failing to stop at a stop sign and speeding. Mike, reflecting on cases involving drunk drivers, says:

These types of cases are extremely emotional and take a toll on the clients as well as us, their attorneys. We know we cannot bring back a loved one or compensate them for the lost opportunities and experiences they’ll never have with their loved one. However, we are honored to help them seek justice and accountability for pain they are forced to endure through no fault of their own.

The case was filed in the Circuit court of Montgomery County, Alabama (case number 03-CV-2020-901228.0).

Large Jury Verdicts Are Not Strangling The Trucking Industry

The American Transportation Research Institute (ATRI) issued a report from a study in June 2020 on the effects of verdicts in excess of $10 million against trucking companies. The president of the American Trucking Association claimed that such verdicts were “strangling the trucking industry.” ATRI is comprised of the president and CEOs of more than 20 of the largest trucking firms in the United States. If you check available safety data, you will find the premise of the report is incorrect. There is always a basis in law and evidence for any large verdict in a trucking case.

The report lumps together all motor carriers, whether they are a one truck motor carrier or a 3,000-truck motor carrier. This report ignores the fact that Federal Motor Carrier Safety Administration (FMCSA) found that motor carriers that had identifiable patterns of unsafe behavior (approximately 50,000 motor carriers or about 10% of the total active population of 550,000 motor carriers) were responsible for 45% of the recordable crashes.

While there are more than 100,000 people injured in truck crashes each year, only three or four of these each year result in verdicts in excess of $10 million. The large verdicts in the report normally involve extreme misconduct by truck companies and drivers, and involve catastrophic injuries or deaths. Those injured persons often have either suffered the loss of a limb or suffered a traumatic brain injury, relegating them to a long life of suffering and no ability to care for themselves. The ATRI report does acknowledge the victims won 100% of the trials when there were false logbooks, bad driver history, drug use, or leaving the scene of the crash.

It is undeniable that the eight figure verdicts receive attention from every trucking industry publication. Additionally, they are used in guidance documents prepared by the industry’s safety consultants and insurers. Most of these documents encourage trucking companies to do more to operate safely in order to avoid crashes that lead to large verdicts. That is the ideal effect of the 500-year-old tort system.

The research has confirmed not one motor carrier has declared bankruptcy after a large eight figure verdict. The research will show that most trucking companies that file bankruptcy either under Chapter 7, which is a liquidation, or under Chapter 11, which is a reorganization rarely close their doors. Many trucking companies have historically used the bankruptcy code for strategic and often lucrative restructuring. The fact that a carrier filed for bankruptcy protection, then, does not automatically mean the carrier is out of business. In fact, it often means the opposite.

The research indicates that of the approximately 41 cases between 2011 and the present involving large eight-figure verdicts, only six of them appeared to have closed their doors. Most of them were smaller one- and two-truck companies. In most cases, however, the trucking company does not go out of business because the case is resolved within the insurance policy limits of the trucking company. The companies that most likely go out of business after a large eight-figure verdict are fly-by-night or reincarnated “chameleon carriers” that have literally retitled and rebranded trucks to avoid a low or unsatisfactory safety score, penalties for safety violations, or even other verdicts. They obtained a new U.S. Department of Transportation (US DOT) number and have resumed operation.

One of the real problems in the trucking industry is that the liability insurance minimum limits ($750,000) have not been increased in the last 40 years. Taxpayers end up paying for the lifetime care of trucking victims that at-fault motor carriers should be paying. Large trucking companies don’t have to pay the few large eight figure verdicts: they have insurance to cover their wrongdoing. But the small trucking company with only minimal insurance can’t pay for harm it causes.

Most lawyers who handle trucking cases will acknowledge that many of the large verdicts are a result of the way truck crash cases are defended. The public is tired of baseless denials by bad trucking companies of obviously dangerous conduct. The way the public responds is with these large verdicts based on the facts of a specific case. It is rare to see a large verdict returned by a jury when bad conduct is admitted. These types of cases help call attention to the bad carriers in the industry.

If you have any questions or comments, contact Mike Crow, a lawyer in our Personal Injury & Products Liability Section, at 800-898-2034 or by email at Mike.Crow@beasleyallen.com. Mike is one of the Beasley Allen lawyers who handles big truck litigation for the firm.

TOXIC TORT LITIGATION

Supreme Court Agrees To Hear Jurisdiction Question In Climate Damages Lawsuit

On Oct. 2 the U.S. Supreme Court agreed to hear an appeal by energy companies including BP PLC, Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC contesting a lawsuit by the City of Baltimore seeking damages for the impact of global climate change.

The justices on the high court will decide whether the lawsuit must be heard in state court or in federal court. The suit targets as Defendants 21 U.S. and foreign energy companies that extract, produce, distribute or sell fossil fuels.

The outcome could affect about a dozen similar lawsuits filed by several states, cities and counties including Rhode Island and New York City, seeking to hold such companies liable for the impact of climate change. Baltimore and the other entities are seeking damages under state law for the harms sustained due to climate change, which they attribute in part to the companies’ role in producing fossil fuels that produce carbon dioxide and other greenhouse gases.

Chevron Corp., Exxon Mobil Corp. and other energy companies had petitioned the justices to review the Fourth Circuit’s decision. In March, a Fourth Circuit panel unanimously rejected arguments from the companies that the suit belonged in federal court because the companies were at times working at the government’s behest, what’s known as “federal officer removal” grounds. The circuit court said the entire remand order was not appealable, only the federal officer grounds for removal.

The companies argue that there is a circuit split on the latter issue that warrants the justices’ review, leaning heavily on the Seventh Circuit’s ruling in 2015’s Lu Junhong v. Boeing that an entire remand order is appealable.

In urging the Supreme Court to deny the petition, Baltimore said the Fourth Circuit got its decision right and noted that both the Ninth and Tenth circuits have reached similar conclusions on the federal officer removal issue in remanding similar climate lawsuits to state court. The Ninth Circuit has given energy companies additional time to potentially appeal its ruling to the Supreme Court. A petition in that case is due by Jan. 4. Baltimore acting Solicitor Dana P. Moore, in a statement, said:

The court has decided to review a narrow technical issue that has no bearing on the substance of Baltimore’s suit to hold these defendants accountable for the climate change harms and costs they are imposing on our taxpayers. Four U.S. district judges and three federal appellate panels are aligned on the legal standard for the scope of review of a district court’s remand order. We look forward to a Supreme Court ruling validating that alignment.

The companies contend that not only did the Fourth Circuit come to the wrong conclusion about federal officer removal, they say it took too narrow a view of what it could evaluate in the appeal. The energy companies said in their cert petition that the appeals court isn’t limited to reviewing the federal officer removal grounds for removal, but can instead review any issue encompassed in the trial court’s remand order. They say the Seventh Circuit’s ruling on what’s appealable from a remand order has been endorsed by the Fifth and Sixth circuits, in conflict with the Second, Third, Fourth, Eighth, Ninth and Eleventh circuits.

There has been a significant increase recently in the climate tort litigation against fossil fuel companies. Many experts believe federal appellate court opinions, like the Fourth Circuit’s, have emboldened state and local governments to pursue their claims in state court.

Connecticut had become the 21st state among the states and municipalities seeking to hold Big Oil liable for climate harms caused by their fossil fuels and their concealment of those climate risks. Connecticut’s complaint was filed exclusively against ExxonMobil, the most popular Defendant in the climate fraud litigation percolating in state trial courts and federal appeals courts across the country.

Delaware and Hoboken, New Jersey, have recently joined to the wave of litigation. Each of these complaints raise nuisance and consumer fraud claims against some of the industry’s biggest names.

The Plaintiffs have said they have had to spend more on infrastructure such as flood control measures to combat sea-level rise caused by a warming climate. As widely reported, climate change has been melting land-based ice sheets and glaciers.

The Supreme Court in 2019 declined the companies’ emergency request to put the Baltimore litigation on hold after a federal judge ruled that the case should be heard in state court. In March, the Richmond, Virginia-based 4th U.S. Circuit Court of Appeals upheld the judge’s decision.

In the absence of federal legislation in the bitterly divided U.S. Congress targeting climate change, and the ill-advised opposition and denial of climate change by the Trump Administration, the lawsuits are the latest effort to force action by way of litigation. The Supreme Court in a landmark 2007 ruling said that carbon dioxide is a pollutant that could be regulated by the Environmental Protection Agency. Under President Barack Obama, the agency issued the first-ever regulations aimed at curbing greenhouse gases. But efforts in Congress to enact sweeping climate change legislation have failed.

Other suits have been brought by Washington, D.C.; Minnesota; Massachusetts; and New York state. The District of Columbia, Minnesota and Hoboken lie within the D.C., Eighth and Third circuits, all of which have yet to rule on where climate torts can be brought and litigated.

Baltimore is represented by Victor M. Sher, Matthew K. Edling and Martin D. Quinones of Sher Edling LLP and Dana P. Moore and Suzanne Sangree of the Baltimore City Law Department.

The case is BP PLC et al. v. Mayor and City Council of Baltimore (case number 19-1189) in the U.S. Supreme Court.

Source: Law360.com

California Bans PFAS From Firefighting Foam

In September, California Governor Gavin Newson signed a law banning the use of toxic fluorinated chemicals known as PFAS in firefighting foams by January 2022. PFAS-based firefighting foams, known as aqueous film-fighting foam or AFFF, are among the most significant sources of PFAS water contamination nationwide.

The law will require the State of California to track sales, AFFF use in training will be banned, manufacturers will have to disclose to buyers whether firefighting gear contains the compounds, and it will restrict the disposal of unused foams. Violations are subject to civil penalties of up to $5,000 for a first violation and $10,000 for each subsequent violation.

The law comes on the heels of growing public awareness of the extent of PFAS contamination of the nation’s drinking water. Currently, the drinking water for 7.5 million Californians contains detectable levels of PFAS. Even very low doses of PFAS chemicals in drinking water have been linked to an increased risk of cancer, reproductive and immune system harm, liver or thyroid disease and other health problems. PFAS do not break down in the environment, spread quickly and bioaccumulate.

AFFF has been used at airports, military bases, and at firefighting training facilities for decades because it is effective at extinguishing fuel-fed fires. It accomplishes this by suppressing the oxygen supply to the flammable material and preventing combustion.

Lawsuits against AFFF manufactures and their chemical suppliers such as 3M have been filed nationwide by individuals (water consumers and firefighters) and water treatment facilities. Those lawsuits have been consolidated into a multidistrict litigation (MDL) in the District Court of South Carolina where the parties are currently engaged in discovery.

California joins Colorado, New Hampshire, New York and Washington to ban all PFAS in firefighting foam, with only limited exceptions, and require reporting of the presence of all PFAS in firefighting gear. Legislatures in Connecticut, Illinois, Iowa, North Carolina and Vermont are also considering similar bans.

Source: EWG.org

The ONGOING Roundup Litigation

An Update On The Ongoing Roundup Litigation

As previously reported, Roundup settlements with certain cancer victims’ lawyers in the multidistrict litigation (MDL) appear to be proceeding while others are still in various stages of discussion. It has been reported that approximately 47,000 cases have been settled while roughly 78,000 cases still remain. The California Supreme Court has refused to hear Monsanto’s appeal in the Dewayne Johnson case. This was the first Roundup case to go to trial. The jury verdict had been reduced to $20.6 million.

At that time, the Court has requested that the Parties submit plans for litigating the remaining unsettled MDL cases. The Court will entertain these plans at a status conference on Nov. 9. These plans will include pre-trial scheduling for what has been termed by the MDL Court as “Wave II cases.” Beasley Allen represents one of the 15 Wave II Plaintiffs and was preparing the case for trial prior to the stay. That case will be ready for trial when remanded to a North Carolina federal court.

Beasley Allen lawyers currently represent thousands of Roundup clients across the country. To date, we have not reached a settlement for our clients. Our firm will continue to fight for fair and reasonable results for our clients in their cases either through trial or settlement.

For more information, contact one of the members of the Roundup Litigation Team: John Tomlinson (who heads up the team), Michael Dunphy, Danielle Ingram or Rhon Jones, all lawyers in our Toxic Torts Section. I have added myself to the team as well and look forward to working on these cases.

The MDL case is In re Roundup Products Liability Litigation (case number 3:16-md-02741) in the U.S. District Court for the Northern District of California.

Source: Consumer Safety, Oct 15, 2020

Beasley Allen Roundup Litigation Team

Beasley Allen lawyers are currently representing thousands of clients who have been exposed to Roundup and developed non-Hodgkin’s lymphoma. Our Roundup Litigation Team is willing to answer any questions you might have. For more information, contact one of the members of the Roundup Litigation Team: John Tomlinson, who heads up the team, Michael Dunphy, Danielle Ingram or Rhon Jones, all lawyers in our Toxic Torts Section, at 800-898-2034 or by email at John.Tomlinson@beasleyallen.com, Michael.Dunphy@beasleyallen.com, Danielle.Ingram@beasleyallen.com or Rhon.Jones@beasleyallen.com I have joined the trial team and be involved in the trials involving Beasley Allen clients. My contact information is Jere.Beasley@beasleyallen.com.

Class Action Litigation

Investors’ Suit Over $1.9 Billion Mindbody Deal Moves Forward

Vice Chancellor Kathaleen S. McCormick has let stand claims against two of three Mindbody Inc. officers facing a consolidated proposed shareholder class action alleging they corrupted the $1.9 billion take-private sale last year of the wellness industry payment software provider for their own benefit. The Delaware Chancery judge agreed with the suing investors that Mindbody’s sale to Vista Equity Partners Management LLC for $36.50 per share last year is subject to enhanced scrutiny under the First State’s cornerstone Revlon standard. The opinion said:

The paradigmatic claim under Revlon Inc. v. MacAndrews & Forbes Holdings, Inc. arises when ‘a supine board under the sway of an overweening CEO bent on a certain direction[] tilts the sales process for reasons inimical to the stockholders’ desire for the best price.

The investors assert “this cautionary tale provided the template for” Mindbody’s sale, the vice chancellor said. The consolidated stockholder suit contends the deal’s terms were unfair and seeks damages on behalf of a proposed class of Mindbody investors, accusing three Mindbody officers of tilting “the sale process in Vista’s favor” because of their own conflicts of interest. Mindbody’s co-founder and former CEO Richard L. Stollmeyer, the company’s Chief Financial Officer Brett White and one of Mindbody’s directors, Eric Liaw, are accused of breaching their duties in connection with the transaction. In July, Mindbody announced Stollmeyer was stepping down as CEO but would still serve on the company’s board.

The investors contend Stollmeyer “was motivated by a need for liquidity and the prospect of future employment with Vista,” that White was also “motivated by the prospect of future employment” and that Liaw was looking out for the best interests of the venture capital firm that nominated him to serve on Mindbody’s board. That company was looking to exit as a Mindbody investor, according to the opinion.

Vice Chancellor McCormick was unswayed by arguments for dismissing the officers from any liability because the acquisition was considered by “an informed and engaged board of directors” and approved by “a fully informed, uncoerced stockholder vote.” The opinion said:

All of the defendants’ arguments ignore the well-pleaded allegations supporting the plaintiffs’ paradigmatic Revlon claim, and this decision largely denies the motion.

The Delaware Supreme Court’s landmark 1986 Revlon v. MacAndrews & Forbes Holdings decision established an intermediate deal-review standard between giving deference to directors’ business judgment and the “entire fairness” doctrine, a more stringent standard of review.

Vice Chancellor McCormick said the Mindbody deal, especially given allegations against Stollmeyer, was subject to more scrutiny under Revlon instead of deference to the company’s business judgement per the state Supreme Court’s 2015 Corwin v. KKR Financial Holdings decision. Corwin grants “irrebuttable” business judgment deference when fully informed stockholders approve a deal backed by unconflicted directors. The opinion said:

Plaintiffs do not argue that the stockholder vote was coerced. They contend that Corwin does not apply because the vote was uninformed. In view of the allegations as to Stollmeyer, it should be no surprise that defendants’ Corwin arguments fail at this stage. Generally, where facts alleged make the paradigmatic Revlon claim reasonably conceivable, it will be difficult to show on a motion to dismiss that the stockholder vote was fully informed.

Vice Chancellor McCormick ruled the stockholders have sufficiently pleaded a breach of fiduciary duty claim against Stollmeyer and a breach of the duty of care claim against White. The opinion said:

In this case, plaintiffs’ liquidity-driven and prospective-employment theories of conflicts work in combination to land a powerful one-two punch on Stollmeyer, rendering it reasonably conceivable that Stollmeyer subjectively harbored interests in conflict with those of the Mindbody stockholders.

It was said further that the investors have also sufficiently shown at this stage of the case it is “reasonably conceivable” Stollmeyer “tilted the sale process in Vista’s favor.” The suit alleges Stollmeyer provided Vista with “informational and timing advantages.”

The shareholders have also shown “it is reasonably conceivable that White was at least recklessly indifferent to the steps Stollmeyer took to tilt the sale process in Vista’s favor,” the vice chancellor said.

However, the suit “does not support a reasonable inference that Liaw took any action to tilt the process toward his personal interest,” the opinion said. Vice Chancellor McCormick dismissed claims against Liaw, saying the suit lacked concrete allegations against him.

The transaction at issue came less than four years after Stollmeyer, who founded the company in 2001, in 2015 took Mindbody public with an initial stock offering raising more than $100 million. Leading up to the merger, Mindbody had grown through acquisitions of other software companies that develop systems for billing at salons, spas and fitness centers.

The investors are represented by Joel Friedlander, Jeffrey M. Gorris, Christopher M. Foulds and Christopher Quinn of Friedlander & Gorris PA, and Gregory V. Varallo, Mark Lebovitch, Jeroen van Kwawegen, Christopher J. Orrico and Andrew E. Blumberg of Bernstein Litowitz Berger & Grossmann LLP.

The case is In re: Mindbody Inc. Shareholders Litigation (case number 2019-0442) in the Court of Chancery of the State of Delaware.

Source: Law360.com

Recent Class Action Settlements

There have been a number of significant settlements and approval of settlement around the country in class action litigation. We will mention some of them.

Drivers Seek Final Approval Of $890 Million Hyundai, Kia Engine Fire Settlement

Drivers have asked a California federal judge to sign off on an estimated $890 million settlement that includes full reimbursements for repairs and extended warranties to settle consolidated class claims that Hyundai and Kia sold vehicles with failure-prone engines that could sometimes catch fire.

More than 20 named Plaintiffs spearheading consolidated class actions in the Central District of California filed a motion asking U.S. District Judge Josephine L. Staton for final approval on a nationwide settlement that reimburses consumers for out-of-pocket repairs and extends warranties for affected vehicles, among other things.

The drivers, who have been negotiating the terms of the settlement with Hyundai Motor America Inc. and Kia Motors America Inc. since late 2018, said the benefits to the class are now estimated to be worth at least $889,570,109 and could be worth up to $1.3 billion, according to the motion.

Hyundai and Kia said they had earmarked approximately $758 million to settle the claims in the consolidated case, known as the Hyundai and Kia Engine Litigation. Judge Staton then conditionally approved the settlement in May.

The consolidated consumer class actions alleged that for nearly a decade, Hyundai and Kia knowingly sold certain vehicles equipped with Theta II 2.0-liter or 2.4-liter gasoline direct injection engines that could seize, fail or potentially catch fire. They accused Hyundai and Kia of failing to properly disclose the defects and of issuing piecemeal technical service bulletins or limited safety recalls of just some of the affected vehicles over the years that never fixed the underlying defect.

The National Highway Traffic Safety Administration (NHTSA) in 2017 began investigating reports of engine failures in certain Hyundai and Kia vehicles, a probe that was expanded in April 2019 after NHTSA received complaints of fires in more than 3,000 Hyundai and Kia vehicles.

The settlement calls for Hyundai and Kia to install an updated safety feature called the Knock Sensor Detection System that warns drivers if there’s a risk of engine stalling. Class members will also receive a lifetime warranty on the so-called engine short block – specifically, the rotating assembly where the alleged defect is located – that covers all costs associated with inspections and repairs.

Additionally, class members will be reimbursed for past repair expenses, including for rental car and towing service costs they incurred in connection with having to get the repairs. Class members who experienced engine failures or fires and/or delays in repairs are eligible for additional goodwill payments.

Class members who chose not to get their cars repaired and instead sold or traded in their vehicles after they experienced an engine failure or fire will still be eligible for some compensation. There is also a rebate program for class members who received notice of this settlement but have lost faith in their class vehicle and sold, surrendered or traded it in. They can submit claims to receive the baseline Black Book value of the car.

The class vehicles include 2011-2018 and certain 2019 model year Hyundai Sonata vehicles; 2013-2018 and certain 2019 Hyundai Santa Fe Sport vehicles; and 2014-2015, 2018, and certain 2019 Hyundai Tucson vehicles. They also include 2011-2018 and certain 2019 Kia Optima vehicles; 2011-2018 and certain 2019 Kia Sorento vehicles, and 2011-2018 and certain 2019 Kia Sportage vehicles.

The settlement covers approximately 2.3 million Hyundai vehicles and 1.8 million Kia vehicles that are equipped with the 2.0-liter and 2.4-liter GDI engines. A court hearing on final approval of the settlement is scheduled for Nov. 13.

The drivers are represented by Joseph G. Sauder, Matthew D. Schelkopf and Joseph B. Kenney of Sauder Schelkopf LLC, Adam Gonnelli of The Law Office of Adam R. Gonnelli LLC, Bonner Walsh of Walsh PLLC, and Steve Berman of Hagens Berman Sobol Shapiro LLP.

The lead case is In re: Hyundai and Kia Engine Litigation (case number 8:17-cv-00838) and related cases are Christopher Stanczak et al. v. Kia Motors America Inc. (case number 8:17-cv-01365); Wallace Coats et al. v. Hyundai Motor Co. Ltd. et al. (case number 8:17-cv-02208); Andrea Smolek v. Hyundai Motor America et al. (case number 2:18-cv-05255); Maryanne Brogan v. Hyundai Motor America et al. (case number 8:18-cv-00622); and Leslie Flaherty et al. v. Hyundai Motor Co. et al. (case number 8:18-cv-02223) in the U.S. District Court for the Central District of California.

Source: Law360.com

Reliance Reaches $40 Million Settlement To End Insperity 401(k) Fee Suit

Reliance Trust Co. has agreed to pay $39.8 million to settle an Employee Retirement Income Security Act (ERISA) class action brought by workers who accused the investment manager of including poorly performing and costly proprietary funds in human resources services provider Insperity’s retirement plan. The plan participants – current and former workers for companies Insperity provides services to – said in a motion that the agreement warranted preliminary approval because it was “fair, reasonable and adequate” and had been negotiated in good faith.

Under the agreement, class counsel will request $25,000 incentive awards for each of the five class representatives. The participants also noted that Insperity already made voluntary changes to the plan that would provide value to class members. The participants initially sued Reliance, Insperity Inc., Insperity Holdings Inc. and other related entities in December 2015, but filed an amended complaint in April 2016. The suit alleged the Defendants breached their duties of loyalty and prudence under ERISA by managing the plan for their own benefit at the expense of participants.

According to the suit, Reliance created a new series of collective trust target date funds called the Insperity Horizon RiskManaged Funds on Nov. 13, 2012, and added them to the plan two days later even though they had no performance history. The company included the funds so it could use the plan as seed money and advance its own interests, the suit said.

The court kept alive the participants’ allegations that Reliance wrongly included the Horizon funds in the plan and made the plan pay excessive investment fees, but dismissed claims about the funds’ retention, recordkeeping fees and prohibited transactions. The court also dismissed all of the claims against Insperity Inc. and Insperity Retirement Services LP, but kept certain monitoring claims against Insperity Holdings alive.

Though Insperity isn’t a party to the settlement, the settlement provides a full release of the claims asserted against the company in the case, according to court documents.

The participants are represented by Jerome J. Schlichter, Troy A. Doles and Kurt C. Struckhoff of Schlichter Bogard & Denton LLC, and Bradley S. Wolff of Swift Currie McGhee & Hiers LLP.

The case is Pledger et al. v. Reliance Trust Co. et al. (case number 1:15-cv-04444) in the U.S. District Court for the Northern District of Georgia.

Source: Law360.com

Keurig To Pay $31 Million To Settle Indirect Buyers’ Antitrust Claims

Keurig Inc. has agreed to pay $31 million to settle claims from a putative class of indirect purchasers accusing it of monopolizing the market for single-serve coffee packs. A request for preliminary approval of the settlement has been filed in New York federal court.

If approved, the settlement funds will be split up among the hundreds of thousands of U.S. citizens who bought Keurig K-Cup Portion Packs for their own use from anyone other than Keurig between September 2010 and August 2020, when the settlement was reached.

Keurig is also facing other lawsuits from competitors and direct purchasers. That could affect the company’s ability to pay claims. Keurig is facing eight suits, consolidated into multidistrict litigation (MDL) in 2014, over several allegations of anti-competitive practices in the marketing of its single-serve packs of roasted and ground coffee for use in the company’s coffee machines.

Buyers and coffee companies, including TreeHouse Foods Inc., alleged that Keurig’s anti-competitive actions included forcing distributors to enter exclusive agreements, filing baseless patent infringement lawsuits against competitors and attempting to dissuade retailers from selling competitors’ products. They also alleged Keurig misled consumers into believing that rival pods wouldn’t work with “Keurig 2.0” coffee machines and modified its machines purely to make them incompatible with competitor pods.

The buyers are represented by Robert N. Kaplan, Gregory K. Arenson, Hae Sung Nam and Jason A. Uris of Kaplan Fox & Kilsheimer LLP, Mark C. Rifkin, Thomas H. Burt, Patrick Donovan of Wolf Haldenstein Adler Freeman & Herz LLP, and Clifford H. Pearson, Daniel L. Warshaw, and Matthew A. Pearson of Pearson Simon & Warshaw LLP.

The MDL is In Re: Keurig Green Mountain Single-Serve Coffee Antitrust Litigation (case number 1:14-md-02542) in the U.S. District Court for the Southern District of New York.

Source: Law360.com

Five Big Banks Get Final Approval For $22 Million Libor-Rigging Settlement

U.S. District Judge Naomi Reice Buchwald has given final approval to a nearly $22 million settlement between five major banks and a class of indirect investors that accused the banks of manipulating the London Inter-bank Offered Rate (Libor) benchmark. The latest settlement in the ongoing Libor litigation involves JPMorgan, Citibank, Bank of America, HSBC and Barclays resolving claims by over-the-counter (OTC) investors that had indirect interactions with the banks through interest rate swaps and other transactions. The investors purchased instruments from financial institutions that are not Defendants in the case.

In addition to the cash award, the five banks agreed to provide “significant cooperation” to the investors in their continuing case against nonsettling banks. There was no objection to the settlement.

Judge Buchwald granted permission to this class of investors to move for a settlement of the claims despite a stay being in place. The settlement with HSBC, reached in 2018, was the first to receive preliminary approval from the court, followed by the remaining four banks in April.

Under the terms of the agreements, HSBC will pay $4.75 million, Citi will pay just over $7 million, and JPMorgan and Bank of America will each fork over $5 million. Barclays will substantially assist the investors in their remaining litigation in lieu of a monetary payment. That cooperation, according to the settlement, includes attorney proffers, documents and testimony.

The investors are represented by Joseph J. DePalma and Steven J. Greenfogel of Lite DePalma Greenberg LLC, Jason A. Zweig of Hagens Berman Sobol Shapiro LLP, William H. London of Freed Kanner London & Millen LLC and Vincent J. Esades of Heins Mills & Olson PLC. The case 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

PHARMACY BENEFITS MANAGER (PBM) LITIGATION

Ohio Attorney General Sues Express Scripts Seeking Millions Of Dollars In Prescription Drug Overcharges

The Ohio Office of the Attorney General has sued Express Scripts in connection with its contract to perform Pharmacy Benefit Manager (PBM) services for the Ohio Highway Patrol Retirement System. Ohio Attorney General Dave Yost has accused Express Scripts of overcharging the State in connection with its pharmacy benefit plans and illegally pocketing the money for profit.

The lawsuit was filed in Franklin County Common Pleas Court alleging that Express Scripts has committed various breaches of its PBM contract with the State. Express Scripts has been the PBM for the Ohio Highway Patrol Retirement System’s health benefit plans since 2010. The Ohio lawsuit specifically alleges that Express Scripts breached its contract with the State by knowingly failing to meet pricing guarantees, charging higher prices by misclassifying generics as brands, failing to adjust price lists to ensure the lowest available price, and hiding its sources of remuneration obtained through its PBM services for the State. The lawsuit seeks to recover the damages Express Scripts has caused the State over the past decade.

“This particular PBM egregiously charged for services it didn’t deliver,” Yost said. “Its repeated breaches cost Ohioans millions, and we want our money back.”

This is the second lawsuit Attorney General Yost has filed in connection with the wrongful and deceptive practices of PBMs. In March 2019, the Ohio Office of the Attorney General filed suit against OptumRx seeking to recover nearly $16 million in overcharges to the Bureau of Workers’ Compensation. OptumRx served as the Bureau’s PBM from 2013 to 2019. With the support of the Governor’s Office, the State continues to investigate the practices of PBMs that contract with state agencies – including HPRS, Medicaid and others – to manage drug prescriptions for those agencies’ clients. In connection with the first of Yost’s investigations last year, Governor Mike DeWine’s office released this statement:

“Attorney General Yost and his litigation team have continued working on investigating PBM contracts in Ohio and, through this [OptumRx] lawsuit, are alleging the state was charged more than contractually allowed. My administration will continue to provide any information, documents, and data the Attorney General needs in his continued investigation of PBMs.”

Individual states, as consumers of prescription drugs, are victims of PBM schemes. When PBMs commit deceptive and anticompetitive practices involving state-funded plans, it directly affects citizens of the state and the use of their taxpayer dollars. Attorney General Yost accurately stated,

“It’s no secret that PBMs have been keeping secret their prescription pricing in order to evade public scrutiny and rake in revenue. I intend to shed light on their business model and bring true transparency to the process – they need to answer the tough questions and repay what is owed.”

When a PBM is supposed to use its relationship with a particular state government to negotiate for lower drug prices and instead uses the lack of transparency with rebates, recoupments, drug formularies and other issues to pocket the savings, it can cost state governments millions of dollars in prescription drug costs.

Over the years, Beasley Allen has represented 11 states in various complex health care litigation and is currently investigating PBM claims on behalf of private and governmental plans. Our firm welcomes the opportunity to investigate potential PBM misconduct. If you have any questions about our firm’s health care fraud practice, contact Dee Miles, Ali Hawthorne, or James Eubank, lawyers in our Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Dee.Miles@beasleyallen.com; Alison.Hawthorne@beasleyallen.com; or James.Eubank@beasleyallen.com.

Source: Office of the Ohio Attorney General

U.S. Supreme Court PBM Case Could Be Turning Point In 20-Year Battle

The U.S. Supreme Court heard arguments last month over Arkansas’ attempt to regulate how much middlemen, called pharmacy benefit managers (PBMs), reimburse pharmacies for drugs on insurers’ behalf. Many observers believe this case could mark a turning point in a broader legal fight involving PBMs that has been ongoing for about 20 years.

Pharmacy benefit managers have assumed an increasingly large role in the health care landscape since the first PBM arose in 1968. As we have reported, these companies started as third-party administrators, processing patients’ prescription drug claims on behalf of health insurance plans. Over the years, PBMs have launched drug formularies, pharmacy networks and their own mail-order pharmacies as the industry has grown, and the largest PBMs have integrated with insurers in multibillion-dollar deals. In effect, PBMs play a major role in controlling prescription drug prices in the U.S. to the detriment of consumers.

PBMs now virtually control most aspects of prescription drug dispensing, from how much consumers pay and how much pharmacies are reimbursed to where patients get their drugs and whether they receive name-brand or generic versions. This has resulted in excessively high drug prices and lots of questionable practices both by the PBMs and Big Pharma.

PBMs routinely reimburse their own mail-order pharmacies at much higher rates and thus drive local pharmacies out of business. Many independent drug stores are now forced to sell products at cost and even less than cost on occasion.

States have been attempting to regulate PBMs since at least 2003, passing laws that primarily target the industry’s pricing and reimbursement practices. Today, all but three states have some legislation on the books impacting PBMs, according to the National Community Pharmacists Association.

As the Tenth Circuit weighs the legitimacy of Oklahoma’s law, the U.S. Supreme Court is considering whether to strike down an Arkansas law in a case with huge implications for the legal fight between states and PBMs. On Oct. 6, the high court heard oral arguments in the Pharmaceutical Care Management Association (PCMA) challenge to a 2015 Arkansas law requiring PBMs to reimburse local pharmacies at the same rates as their affiliated pharmacies. If the high court rules that the law flouts the Employee Retirement Income Security Act (ERISA), other states may well fall on similar grounds.

Many observers believe the decision in this case will define the scope of permissible state regulation of PBM practices. Essentially, they say it’s going to define what states can and can’t do. All states are watching this case carefully.

The case is Rutledge v. Pharmaceutical Care Management Association (case number 18-540) in the Supreme Court of the United States.

Source: Law360.com

THE CONSUMER CORNER

The Consumer Fraud & Commercial Litigation Section At Beasley Allen

I am writing a special feature for this issue on our firm’s Consumer Fraud & Commercial Litigation Section. Lawyers in the section are operating on the cutting edge of consumer law and public welfare issues in numerous national litigation cases. The lawyers in the Section have been fortunate to partner with other cutting-edge law firms throughout the country in an effort to improve the marketplace for both consumers and businesses.

This section of the firm, under Dee Miles’ leadership, has also been a leader in representing State Attorneys General throughout the country on similar issues impacting consumers, businesses and taxpayers of a particular state on issues involving corporate and market misconduct.

As the marketplace changes, so does the direction of this litigation. Two areas of litigation that are trending at the moment are auto defect class actions and whistleblower (qui tam) cases.

Auto Defect Class Actions

Our lawyers are continuing to work on numerous auto defect class actions against many of the major automobile manufacturers like VW, Mercedes, Toyota, General Motors, Ford, Honda, Subaru, Nissan and even some automobile parts suppliers like Denso, ZF-TRW and Bosch, to name a few. These cases range from brake defects to fraudulent emissions cheat devices to piston ring defects and other engine failures like defective fuel pumps to design defects with doors and seatbelts. We continue to file these cases as class actions because of the corporate misconduct we continue to find in the design and manufacturing process that results in unsafe vehicles that are unknowingly purchased by consumers, corporations and state agencies. We have been fortunate to have successfully obtained class action approval by many courts that have resulted in relief to consumers by way of an actual cost-free repair, extended warranty and in some cases a cash refund directly to consumers. We continue to investigate these automobile problems for class relief treatment and have a team of experts available to assist us in vetting these theories and test these vehicles for the problems often reported to us directly by consumers.

If a possible auto defect or other product defect has surfaced in your world, we would welcome the opportunity to investigate. Feel free to contact our Section Head of this group, Dee Miles, or Clay Barnett, Demet Basar or Mitch Williams at our firm number, 800-898-2034 directly or by email Dee.Miles@beasleyallen.com, Clay.Barnett@beasleyallen.com, Demet.Basar@beasleyallen.com or Mitch.Williams@beasleyallen.com .

False Claims Act / Whistleblowers /qui tam Cases

Our lawyers 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.

These cases are filed under seal and remain so for the duration of the case up and until the government decides to lift the seal on the case. For that reason, we cannot discuss examples of the types of cases we have on file, but they are many and diverse as to the nature of the claim, and all involve taxpayers paying too much for products and services provided to the government by virtue of a contract with the government. We can explain to potential whistleblowers that there are protections in the FCA laws that prevent retaliation on a person who reports the fraudulent conduct, the “whistleblower.”

Many employees who witness fraudulent conduct are afraid to come forward because of fear of retaliation by their employer or others and that should not be a hurdle to reporting fraudulent activities. The law protects the whistleblowers and provides additional penalties against employers who engage in even the slightest retaliation against a person who has the courage to come forward and report fraudulent activity.

Our lawyers welcome the opportunity to interview any person who has information about fraudulent activity occurring in government billing or other misconduct involving government contracts in a confidential setting and ensure the full protections of the law will be provided to that courageous employee. Feel free to contact our Whistleblower Litigation Team Leaders, Lance Gould and Larry Golston, at 800-898-2034 or directly by email at Lance.Gould@beasleyallen.com or Larry.Golston@beasleyallen.com.

Dee Miles does an excellent job of heading up this Section, assisted by Michelle Fulmer, Section Director. Other lawyers in the Section are Alison Hawthorne, Clay Barnett, Dement Basar, Courtney Horton, Leon Hampton, James Eubank, Lance Gould, Larry Golston, Lauren Miles, Leslie Pescia, Lydia Reynolds, Mitch Williams, Paul Evans, Rachel Boyd and Tyner Helms.

Federal Court Rules Toyota Cannot Force Consumers Into Arbitration

U.S. District Judge Josephine L. Staton, for the Central District of California, ruled last month that Toyota Motors Sales USA, Inc. must face claims against consumers in a court of law, before a jury. The judge dismissed Toyota’s attempt to force consumers into an arbitration proceeding regarding a dispute involving Toyota vehicles. This is a huge victory for consumers in the ongoing arbitration battle.

The consumers brought the putative class action lawsuit against Toyota alleging the inverters in certain Prius models overheat, which may cause the vehicles to enter a “fail-safe” mode resulting in the vehicles drastically reducing speed or coming to a complete stop. The Plaintiffs allege this defect poses a serious safety risk to those who operate these vehicles.

Despite being a non-signatory to the purchase and lease agreements, Toyota moved to compel the Plaintiffs to arbitration claiming that it can enforce the arbitration provisions based on a legal theory of equitable estoppel or as a third-party beneficiary of the lease contract.

However, Judge Staton rejected both of Toyota’s arguments. Let’s take a look at how she reached each conclusion.

  • First, Judge Staton held that Plaintiffs are not equitably estopped from avoiding arbitration because their “claims [arose] independently of the terms of the lease agreements containing the arbitration provisions.” In other words, the Plaintiffs did not reference or rely on the terms of the agreement to form the basis of their claims. Rather, “[p]laintiffs allege fraudulent, deceptive, and/or misleading conduct in connection with Toyota’s alleged knowledge of and failure to disclose the alleged defect.”
  • Second, Judge Staton denied Toyota’s third-party beneficiary argument because nothing indicated the parties intended Toyota Motor Sales USA to benefit from the lease agreement. Toyota claims it was an “affiliate” of the leasing and selling entities and, therefore, an intended third-part beneficiary of the lease contract. However, the court ruled that “[n]othing about the plain language” of the agreement “indicates the parties intended to include [Toyota] within the meaning of ‘affiliate . . . .’” The court further stated that reading the term “affiliate” as Toyota urges “would render the term incongruously broad as compared to the other listed ‘Covered Parties.’”

The ruling in this case, styled Kathleen Ryan-Blaufuss et al. v. Toyota Motor Corp. et al., No. 8:18-cv-00201, in the U.S. Federal District Court for the Central District of California, has put at least a temporary end to Toyota’s recent attempts to escape facing courts and juries all over this country in cases involving products liability claims concerning its vehicles. This was a bold move by Toyota, a company that has now failed for valid legal reasons to force a consumer into arbitration, and it is a rejection to this sort of legal maneuvering.

It was just another example of huge corporations trying to tip the scales of justice in their favor at the expense of consumers. Our country’s court system, while imperfect, is the best judicial system in the world. Courts and juries typically even the playing field for the parties to a dispute. Arbitration has typically proven to be a hostile forum for consumers.

Beasley Allen lawyers continue the ongoing fight against arbitration. Consumers are encouraged to reject the arbitration clauses in contracts when confronted with them in consumer purchases. The jury system works and our founding fathers intended for all of us to enjoy our constitutional right to a trial by jury. We encourage our readers to resist these corporations’ attempts to take the right to jury away.

Divided 9th Circuit Splits With 4th Circuit In DirecTV TCPA Litigation

A split Court of Appeals for the Ninth Circuit has affirmed a lower court’s ruling that DirecTV can’t force a customer accusing the company of placing unauthorized robocalls to arbitrate his claims, holding that to enforce an agreement he signed with AT&T before it purchased DirecTV would lead to “absurd results.”

The published 2-1 opinion authored by Circuit Judge Diarmuid Fionntain O’Scannlain held that the Federal Arbitration Act does not preempt California law requiring courts to interpret contracts to avoid absurd results.

Because the Plaintiff in the proposed class action, Jeremy Revitch, signed an arbitration agreement with AT&T, the panel’s majority said that under DirecTV’s interpretation of the agreement, Revich “would be forced to arbitrate any dispute with any corporate entity that happens to be acquired by AT&T Inc., even if neither the entity nor the dispute has anything to do with providing wireless services to Revitch – and even if the entity becomes an affiliate years or even decades in the future.” The panel added:

No one disputes that arbitration clauses subject to the [Federal Arbitration Act] must be enforced in federal courts. But we are mindful that arbitration is a matter of consent, and we conclude that DirecTV has failed to establish that Revitch consented to arbitrate this pending dispute.

In a dissenting opinion, Circuit Judge Mark J. Bennett wrote that because the agreement with AT&T covered its affiliates and there is nothing in the agreement’s wording stating it would only cover present-day affiliates on the day of signing, DirecTV should be able to compel arbitration.

AT&T Inc. acquired DirecTV in a $48 billion deal in 2015. The Federal Communications Commission signed off on the deal after the two companies agreed to incorporate several provisions, including building out their high-speed network and abiding by some net neutrality-related fixes.

Revitch said when he signed a contract with AT&T in 2011 – before DirecTV was an affiliate of AT&T – that contract did not include DirecTV or any other company that may someday be acquired by AT&T. He said that although his contract specified arbitration with AT&T in the event of a dispute, he “never intended to enter into an arbitration agreement with DirecTV.” DirecTV argued to the district court that as an affiliate of AT&T, it is entitled to arbitration.

In his 2018 order, U.S. District Judge Joseph C. Spero ruled that although DirecTV is now an affiliate of AT&T, the question of Revitch’s intentions remains. Relying on California state law, which states that ambiguities in written agreements are to be construed against the drafter, Spero found that Revitch did not intend to sign an arbitration agreement with DirecTV.

The majority opinion acknowledged that its opinion runs opposite to a recent Fourth Circuit ruling on arbitration it said was identical to that signed by Revitch. In Diana Mey v. DirecTV LLC, the Fourth Circuit in August held that a West Virginia woman must arbitrate claims that DirecTV violated the Telephone Consumer Protection Act (TCPA) because she is bound by a contract she signed with AT&T before it acquired the satellite TV provider.

The majority said much of the Fourth Circuit’s opinion tracks with the dissent in its own case and is “already addressed in our foregoing analysis.”

In the dissent, Judge Bennett said, “Nothing in the arbitration clause or in the dictionary definition of the word ‘affiliate’ confers any type of temporal scope to the term so that ‘affiliates’ should be read to refer only to present affiliate.”

But the majority wrote that if “the wireless services agreement stated that ‘AT&T’ refers to ‘any affiliates, both present and future,’ we might arrive at a different conclusion. However, absent this or similar forward-looking language, we are convinced that the agreement does not cover entities that became affiliated with AT&T Mobility years after the contract was signed in an unrelated corporate acquisition.”

Jeremy Revitch is represented by Joel D. Smith of Bursor & Fisher PA. The case is Jeremy Revitch v. DirecTV LLC (case number 18-16823) In The U.S. Court of Appeals for the Ninth Circuit.

Source: Law360.com

Morgan Stanley Fined $60 Million Over Unsafe Data Practices

Morgan Stanley has agreed to pay a $60 million fine to the U.S. Treasury over unsafe information security practices stemming from its failure to scrub computers of customer data prior to disposal. However, the bank still faces customers’ proposed class actions over the potential exposure of their sensitive data.

The $60 million penalty brought by the Treasury’s Office of the Comptroller of the Currency (OCC) against Morgan Stanley Bank and Morgan Stanley Private Bank comes about four years after the investment bank’s 2016 information security incident and roughly three months after the bank – at the OCC’s direction – notified customers of the incident.

It was stated in the consent order that Morgan Stanley “failed to exercise proper oversight of the decommissioning of two Wealth Management business data centers located in the U.S.

The OCC, an independent bureau within the U.S. Treasury, says further that the Bank:

  • failed to effectively assess or address the risks associated with the decommissioning of its hardware; failed to adequately assess the risk of using third party vendors, including subcontractors; and failed to maintain an appropriate inventory of customer data stored on the devices;
  • failed to exercise adequate due diligence in selecting its third-party vendor and didn’t monitor the vendor’s performance adequately; and
  • in 2019, Morgan Stanley experienced similar vendor management control deficiencies in the decommissioning of other devices, but the bank voluntarily notified potentially impacted customers in July following that incident.

After learning that their unencrypted data may have been exposed, customers began filing proposed class actions in New York federal court, alleging the investment bank mistakenly disclosed customers’ sensitive information to unknown third parties during disposal of computer hardware and servers.

The customers, who are seeking to represent a nationwide class of all individuals whose personally identifiable information was compromised as a result of Morgan Stanley’s alleged failures, allege negligence, invasion of privacy and unjust enrichment.

The customers allege that Morgan Stanley put thousands of people at an increased risk of identity theft. The growing number of suits against Morgan Stanley were consolidated in the Southern District of New York in mid-September.

Morgan Stanley says it has instituted enhanced security procedures, including continuous fraud monitoring, and will continue to strengthen the controls it has in place to protect its clients’ information. It claims that none of its clients’ “information has been accessed or misused.”

The members of the proposed class are represented by Linda P. Nussbaum of Nussbaum Law Group PC. The lead consumer case is Tillman et al. v. Morgan Stanley Smith Barney LLC (case number 1:20-cv-05914) in the U.S. District Court for the Southern District of New York.

California Jury Awards More Than $2.5 Million In Zoom Asbestos Trial

A California jury has awarded a retired Navy admiral and his wife more than $2.5 million in an asbestos case against Metalclad Insulation LLC. Metalclad had argued that the trial was unfairly impacted by COVID-19 restrictions and “juror irregularities.”

A 12-member jury ruled in favor of 82-year-old retired Rear Adm. Ronald Wilgenbusch, and his wife, Judith, finding now-defunct Metalclad liable for negligently failing to recall or warn about the risks of using insulation containing asbestos, which the company supplied to Navy yards for years.

The jury awarded Admiral Wilgenbusch, who has mesothelioma, roughly $1.8 million and his wife $750,000 in noneconomic and economic damages. The jury ruled for Metalclad on the punitive damages claim. The jury held Metalclad, which was the only named Defendant on trial, 7% liable and the Navy 51% liable. The jury found Wilgenbusch bore 4% of liability and 10 other companies were responsible for the rest.

The Plaintiffs’ lawyer, William F. Ruiz of Maune Raichle Hartley French & Mudd LLC, told Law360 that Metalclad patented asbestos products as far back as the 1950s and continued to sell those products until at least 1980. By the late 1960s, Metalclad offered asbestos abatement services, while selling asbestos products without warnings, safety data sheets or safe handling instructions, and then falsely accused the admiral of lying about his condition, while denying responsibility for the company’s own action.

Ruiz said Metalclad had tried to “delay and deny justice” at every turn of the nearly three-month trial. He added: “We are grateful that the Alameda Superior Court recognizes that the measure of justice in society is that justice is served even when society is in crisis.”

The verdict is the latest chapter in a lawsuit that was initially headed to an in-person trial in July, but was moved to Zoom by Alameda County Superior Court Judge Brad Seligman over concerns about spreading the novel coronavirus after one juror came down with a fever. Over the course of the trial, the judge denied multiple requests by Metalclad for a mistrial. Metalclad also argued to the judge that trial experts had been unfairly limited due to COVID-19 restrictions.

During trial closings arguments, Ruiz argued that Wilgenbusch was exposed to asbestos during the installation and removal of Metalclad-supplied insulation on several Navy ships in the 1970s. He said Metalclad boxes containing insulation were not labeled with adequate warnings and no one at the Navy yard was warned that they should wear masks or protective gear while handling the material. Ruiz argued that mesothelioma, which is a “man-made preventable disease” that is caused by asbestos, will likely cut his client’s life short by years. He added that the Defense team had tried to denigrate Wilgenbusch’s service and minimize his suffering, even though he’s “chasing the Reaper.”

This was the third virtual civil jury trial over product liability claims tied to asbestos to take place in Alameda County, California, over Zoom since the novel coronavirus outbreak forced courthouses around the country to shut their doors in the spring. The first trial ended in a Defense win earlier this month, after a jury cleared Honeywell and other Defendants of a former custodian’s allegations that asbestos in Bendix Corp. brake pads contributed to his mesothelioma.

A third virtual trial over asbestos claims started on Sept. 21 in Alameda County. That case was brought by Maune Raichle on behalf of a former Navy sailor, Robert G. Fenstermacher, and his wife, Janet, and it is also against Metalclad. Fenstermacher claims he was exposed to asbestos in insulation supplied by Metalclad, which was installed on the Navy aircraft carrier USS Bonhomme Richard in the 1960s.

Admiral Wilgenbusch and his wife Janet, are represented by William F. Ruiz of Maune Raichle Hartley French & Mudd LLC.

The case is Ronald C. Wilgenbusch et al. v. Metalclad Insulation LLC (case number RG19029791) in the Superior Court of the State of California, County of Alameda.

Source: Law360.com

6th Circuit Says Vape Companies Can’t Appeal FDA Deadline

The Court of Appeals for the Sixth Circuit ruled last month that a vaping company can’t challenge a ruling by a Maryland federal judge setting a deadline for vaping businesses to submit premarket tobacco applications to the U.S. Food and Drug Administration (FDA). The panel ruled that Vapor Stockroom can’t sue the FDA to attack a decision made by the federal judge to speed up deadlines for submitting premarket tobacco applications to the agency, rejecting the company’s argument that an FDA proposal led the court to adopt the accelerated deadline, which it said it was unable to meet. The panel said:

The Maryland court’s injunction was not an action by the FDA – it was an action taken by the court itself. The Maryland court is an independent third party that is not part of the present suit. Vapor Stockroom cannot sue the FDA to attack the Maryland court’s decision.

The appeal stems from an effort by public health groups to accelerate the FDA’s regulation of vaping products under the Tobacco Control Act, citing vaping-related lung injuries that sickened thousands of people and left nearly 70 dead in 2019. The FDA in August 2017 had extended the deadlines for premarket tobacco applications to August 2022 for most vape products, according to the panel.

But in July 2019, U.S. District Judge Paul W. Grimm imposed a 10-month deadline for vape companies, after an earlier ruling found the FDA overstepped its authority in the 2017 deadline extension. That extension defeated the purpose of the Tobacco Control Act, allowing unapproved tobacco products to be made and sold and aggravating public health problems surrounding the vaping trend among young people, Judge Grimm said in his order. The FDA then proposed the 10-month deadline ordered by Judge Grimm, saying a 120-day one desired by the health advocates who brought the suit was too short and would create an administrative headache for the agency.

In March, the judge said that he would grant a 120-day extension to the deadline in light of the novel coronavirus outbreak that has strained FDA resources and disrupted supply chains. The FDA told the Fourth Circuit on March 31 that many of its staff have been enlisted by the U.S. Public Health Service to help fight the pandemic, limiting the agency’s ability to review applications, and that many laboratories and research organizations conducting the clinical trials for the regulatory applications have shut down or otherwise halted in-person testing.

On the industry side, the pandemic has disrupted supply chains, including shuttering factories abroad that manufacture vape products. The FDA said it has received 15 letters from groups representing thousands of market players requesting a 180-day deadline extension in light of COVID-19 disruptions.

The FDA is represented by Lindsey Powell of the U.S. Department of Justice. The case is Vapor Stockroom LLC v. the U.S. Food and Drug Administration (case number 20-5199) in the U.S. Court of Appeals for the Sixth Circuit.

Source: Law360.com

CURRENT CASE ACTIVITY AT BEASLEY ALLEN

Our BeasleyAllen.com website provides all the latest information on all of the current case activity at Beasley Allen. The list can be found at the bottom of our homepage, top navigation, or our Practices page of the website ( BeasleyAllen.com/Practices/)

The following are some of the current case activity listing:

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. 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

Trial Tips From Beasley Allen Lawyers

This month Clay Barnett, a lawyer in our Consumer Fraud & Commercial Litigation Section, will give us some recommendations relating to the handling of video depositions. As a major part of his practice, Clay handles class action cases involving the auto industry. Let’s see what Clay has for us.

Trial Tips By Clay Barnett

Today’s trials frequently feature witness testimony presented by video deposition, testing lawyers’ ability to hold jurors’ focus. This means that lawyers should prepare for deposition as if they’re preparing for a live trial – because there’s no second chance when the deponent lives outside the reach of subpoena power. The keys are organization and laying proper foundations for both evidentiary admission hurdles and juror comprehension. Here are few guidelines.

Sequence deposition questioning just as you would for trial.

When taking a witness’s deposition for video presentment at trial, sequence the exhibits and questioning in a manner that locks in foundational evidence before shifting to key admission evidence. It’s a mistake to assume the jury will appreciate the witness’s competency to testify about the target evidence merely from his job title or status alone. First, secure evidence that demonstrates that the witness is personally familiar with the subject matter and therefore competent to speak to the evidence. A jury that perceives a witness to be personally involved in the subject matter will give greater weight to his admissions and be more suspect of his claims of lack of knowledge.

Once proper foundations are laid, present documents to the witness in an order that secures baseline facts that are both chronological and logical. For example, when instructing the witness to read through a corporate Defendant’s internal investigative report, have him describe his personal involvement in the investigation and the reasons for this involvement. Ask the witness to do the same for other participants in the investigation. Have the witness create a backstory for the internal investigation – the jury will want to know the “why” as they often equate themselves to detectives. Have the witness read the investigation’s purpose, not just its spicy admissions and conclusions. Point being, don’t assume the jury will appreciate the conclusion just by seeing and hearing the conclusion read aloud. Keep in mind, the most devastating internally documented admission is potentially wasted on a juror who wasn’t instructed on the investigation’s purpose, the witness’s hand in developing the report’s admission and the associated weight of this witness’s personal acknowledgement of the admission.

Break down the hot documents line by line.

Again, when the video deponent lives across the country, this is the questioning lawyer’s only shot at securing the evidence for trial. This means don’t just hit the high points, have the witness read the fine details that support the admissions and conclusions that he’ll ultimately reveal on the record. The deposing lawyer can always edit out non-essential material later – a good problem to have.

Separately, when instructing a witness to read a highly impactful statement from a document, have him read it twice, or quote it back to him and seek his confirmation that you read the quote correctly. The idea here is to avoid the valuable testimony being washed out by less valuable material. This is a successful tactic with a live witness at trial, so do it at deposition for later presentation to the jury.

Don’t miss the opportunity to secure key trial testimony from your own witness after the defense concludes questioning.

There are two primary reasons for taking your own witness on direct after the defense concludes: 1) securing critical testimony for submission in summary judgement or class certification briefs; 2) there’s no guarantee the witness will be available for trial and loss of the witness means loss of critical evidence. Here, a full-blown direct examination is likely not practical due to time constraints and witness fatigue, but don’t waste this opportunity. Prior to the deposition, prepare the witness for examination, just as you would for live trial testimony. Eliminate risk of miscues by dry running the direct examination prior to the deposition. Bottom line, prepping your witness for a post-cross examination cleanup session will undoubtedly improve his performance on cross and allow you to secure critical testimony for later use in briefs and perhaps in live trial should he become unavailable.

Lawyers must recognize that jurors are busier and more distracted than ever before. Securing dynamic testimony in a live trial is challenging and an order of magnitude more difficult when conducted offsite for trial via video presentation. But, capturing compelling deposition video testimony can be done when the deposition examination is conducted as if it was performed in a live trial.

If you would like to contact Clay you can call him at 800-898-2034 or reach him by email at Clay.Barnett@beasleyallen.com.

RECALLS UPDATE

A large number of safety-related recalls were issued in October. We are not including the recalls in the Report each month. Instead, we are making all of the recalls available on our website, https://www.beasleyallen.com/recalls/.

You will always find the latest important product recalls on our site throughout the month. The response to this new approach for handling recalls in the Report has been good. You are encouraged to contact Shanna Malone, the Executive Editor of the Report, at Shanna.Malone@beasleyallen.com if you have any questions or to let her know your thoughts on recalls.

FIRM ACTIVITIES

New lawyers At Beasley Allen

We have four new lawyers at Beasley Allen who, after working as law clerks at the firm, passed the Alabama Bar Association examination in September. We are pleased to welcome Courtney Horton in our Consumer Fraud Section, Seth Harding and Mary Cam Raybon in our Mass Torts Section, and Gavin King in the Toxic Torts Section.

Each year, the Firm has a number of students at various points in their studies working with us as part of our Law Clerk program. Stephanie Monplaisir, a lawyer in our Personal Injury & Products Liability Section, oversees and organizes the firm’s internship program, which provides students with a balance of exposure to practicing law combined with networking opportunities to establish and build relationships with some of the firm’s seasoned lawyers. We are appreciative of the time Stephanie dedicates to ensuring the students learn as much as they can about the practice of law while they are here with us. We also appreciate our lawyers who mentor them.

It’s real special when a student who has worked as a clerk with us passed the bar exam and becomes a part of our Beasley Allen team.

These new lawyers faced unusual challenges in completing their law school experience, graduating and taking the Bar exam in the midst of a pandemic. While that chapter in their journey is closed, they are all beginning on an exciting and challenging path in their new careers. You can learn more about each of these new lawyers by going to Beasleyallen.com.

Employee Spotlights

Jenna Fulk

Jenna Fulk joined Beasley Allen in 2012 and she now works in the firm’s Mass Torts Section, handling claims involving dangerous drugs and medical devices. She had previously been in the Toxic Torts Section. Currently, Jenna works on cases where women’s regular use of talcum powder in the genital area for personal hygiene has been linked to the development of ovarian cancer. As many as 2,200 cases of ovarian cancer diagnosed each year may have been caused by regular use of talcum powder products, such as baby powder and body powder in the genital area.

Previously, Jenna worked on cases involving transvaginal mesh (TVM), which is used to repair conditions such as pelvic organ prolapse and stress urinary incontinence. Its use can cause severe complications resulting in permanent consequences. Jenna was also heavily engaged in the multidistrict litigation (MDL) stemming out of the BP Deepwater Horizon oil spill.

Before joining the firm, Jenna, who is originally from Birmingham, Alabama, worked as a law clerk at a Plaintiff’s firm in her hometown. She also was a judicial intern for the Honorable Sharon L. Blackburn, U.S. District Judge, in the Northern District of Alabama.

Jenna says she enjoys practicing law because of the challenges it presents and specifically in litigation where each day is never the same. She says:

The landscape of litigation can change very quickly, and I enjoy seizing every opportunity to advocate for our clients and advance their interests. It is also extremely rewarding to litigate cases that I believe in, while at the same time impacting or changing our clients’ lives for the better.

Jenna is a member of the Alabama State Bar; the Alabama State Bar Young Lawyers Section, the Birmingham Bar Association, the American Association for Justice, the Alabama Association for Justice, where she is a member of the Women’s Caucus, and the Emerging Leaders Section.

The University of Alabama graduate earned a B.A. degree, magna cum laude, in communication and information sciences. Jenna subsequently entered Samford University’s Cumberland School of Law, earning her Juris Doctor in May 2012. While attending law school, Jenna was very active. She was a member of the American Journal of Trial Advocacy (the nation’s oldest law review dedicated to advancing trial advocacy). Jenna was selected as a Judge Abraham Caruthers Fellow and was a mentor for first-year law students in legal research and writing, negotiations and moot court. She was a Scholar of Merit: Juvenile Justice Administration, and was included on the Dean’s List each semester. During her third year of law school. Jenna focused her legal research primarily on international human rights, adoption law and child trafficking.

Throughout her life, Jenna has maintained a committed interest in international missions and has volunteered abroad with organizational ministries located in Morocco, Thailand, Mexico, Haiti, Romania and Spain. She looks forward to continued opportunities to serve the Lord, both in the practice of law and on the mission field.

Jenna says her passion for serving the Lord is a shared value with many of her law partners and co-workers at the firm. She says:

In 2020, it is rare to see a law firm with a tangible and real Christian value focus, which truly sets the firm apart. I have certainly witnessed this in practice within the firm. These values not only impact how Beasley Allen practices law but also how it approaches its clients in their lives.

Additionally, Jenna appreciates the firm’s unique ability to move major litigation forward by its leadership roles in numerous MDLs where it serves as a catalyst for actively litigating and ultimately resolving, by settlement or trial verdicts, these cases. She believes “the firm is structured in such a way that no case is too big to undertake and teamwork is highly valued as every person involved in each case has a meaningful role that ultimately moves cases forward.”

Jenna is married to Andrew Fulk, a Plaintiff’s lawyer in Birmingham, Alabama, where they reside with their two young children. Jenna is a talented lawyer who works hard for her clients and is dedicated to their cases. We are blessed to have Jenna with us.

Wendi Lewis

Wendi Lewis has been with Beasley Allen for 12 years. She is the Senior Editor in the firm’s Marketing Section. Wendi manages content and oversees branding for external and internal communications. This includes copy-editing, writing, and content management. Wendi works together with the firm’s Marketing Team to analyze effectiveness of e-mail, website and social media marketing to develop strategy for future communications pieces.

Wendi and her husband Eric, a Montgomery veterinarian, have three cats, Groucho, Tito and Lafitte. In her spare time, Wendi enjoys reading and spending time visiting with friends and family. Eric and Wendi also love to travel, especially to New Orleans, and watching Auburn football.

When asked what her favorite thing is about working at Beasley Allen, Wendi says:

I really enjoy the team of people I work with. The Marketing Team recently expanded to work more collaboratively with IT and HR, and it’s really enjoyable having new colleagues to work with together. Also, it is satisfying to help our lawyers and support staff share their stories about the work they do for our clients, helping people who are injured and scared about their future. The best feeling is knowing the work we do can make a difference.

Wendi does a tremendous job for the firm in a very important role. She has established extremely good working relationships with persons around the country. Her work for the firm is extremely important and we are most fortunate to have Wendi at Beasley Allen.

Teresa Reid

Teresa Reid, who has been with the Firm for 15 years, is a Clerical Assistant in the Mass Torts Section. Teresa has a number of important duties in her job. She is responsible for certain contacts with clients and referral lawyers.

Teresa and her husband Alan have been married for almost 40 years. They have one daughter Kathryn and two granddaughters Kadence (7 years old) and Maylynn (2 years old) and also Hercules, a 12-year-old Cavalier King Charles Spaniel.

In her spare time Teresa enjoys spending time with her family, reading and sharing meals with friends. Also, she finds fulfillment in relationships and ministries through Christchurch Anglican where they are members. Her husband Alan is a bi-vocational Pastoral Associate at the church.

When asked what her favorite thing is about working at Beasley Allen, Teresa says, “I especially enjoy working at Beasley Allen because of my coworkers who have become good friends through the years. My colleagues are friendly, helpful and they understand the ‘life’ challenges we have with aging parents and grandparenting. They often offer good advice and encouraging words during this time in my life.”

Teresa is a hard-working, dedicated employee who does very good work. We are blessed to have her at the firm.

Matthew Yarema

Matthew Yarema has been with the Firm for 14 years. Matt is a Paralegal working with Parker Miller in the Personal Injury and Products Liability Section. Paralegals are very important to the success of our firm.

Matt and his wife Alyson have been married for 12 years. Together, they have two children. Their 8-year-old son Parker is a very good athlete. Their daughter, Harper, is 5 years old. They also have two dogs. Rubi, a 3-year-old Vizsla, and Cali, a 1-year-old deaf Boston Terrier.

In his spare time Matt loves coaching his son’s Pike Road Travel Baseball Team. He also enjoys watching any and all Auburn sports and going to the beach and hanging out with friends.

When asked what his favorite thing is about working at Beasley Allen, Matt says, “getting to know our clients and helping them in their time of need. I enjoy my co-workers and what this firm stands for.”

Matt, in his role as a paralegal, does very good work. He works hard and is dedicated to seeing that clients receive justice in their cases. We are fortunate to have Matt with the firm.

A SPECIAL RECOGNITION FOR A SPECIAL PERSON

EJI’s Bryan Stevenson Named 2020 Right Livelihood Award Recipient

Bryan Stevenson, an American lawyer, social justice activist, and Founder and Executive Director of the Equal Justice Initiative (EJI), was selected as a recipient of the 2020 Right Livelihood Award for his work in reforming the criminal justice system and advancing racial reconciliation in the United States. Bryan is a worthy recipient of this international award one that is extremely significant.

Established in 1980 by journalist and professional philatelist Jakob von Uexkull, the Right Livelihood Award honors and supports those “offering practical and exemplary answers to the most urgent challenges facing us today.” The award, often referred to as the “Alternative Nobel Prize,” is presented annually in Stockholm at a ceremony in the Swedish Parliament. It is usually shared by four recipients. As part of the honor, Bryan received 1 million SEK (about $112,000) to support his initiatives.

Bryan dedicated his life to criminal justice reform and racial equality, standing up for death row inmates, people with mental disabilities, and children tried and sentenced as adults. Bryan was depicted in the legal drama Just Mercy, which was based on his memoir Just Mercy: A Story of Justice and Redemption. Ole von Uexkull, Executive Director of the Right Livelihood Foundation:

Bryan Stevenson is a defender of the marginalized and the condemned striving to reform the U.S. criminal justice system. In the face of systemic injustice, the legacy of slavery and racism in the country, Stevenson has shown that true freedom requires acknowledging the horrors of the past. With compassion and moral clarity, he is paving the way for the structural changes needed for American society to heal from its long and violent history of racial injustice.

The three other 2020 Right Livelihood Laureates are imprisoned human rights lawyer and activist Nasrin Sotoudeh of Iran, indigenous rights lawyer Lottie Cunningham Wren of Nicaragua, and pro-democracy activist Ales Bialiatski and the non-governmental organization Human Rights Center “Viasna” of Belarus. The recipients will be honored during a virtual awards ceremony on Dec. 3, 2020.

Source: Montgomery Advertiser

FAVORITE BIBLE VERSES

Erin Little, an accounting auditor in the Accounting Department at Beasley Allen, furnished her favorite scripture for this month.

Let your light so shine before men, that they may see your good works, and glorify your Father which is in Heaven. Mathew 5:16

Erin says: “I love this scripture, it is one of my favorites because it is telling us to let our ‘light’ – our love, our goodness, our kindness – be seen by everyone. Especially in today’s world, we all need to have love and kindness shining out of us!”

Angie Taylor, a legal secretary at Beasley Allen, furnished two verses for this issue.

But we do not want you to be uninformed, brothers, about those who are asleep, that you may not grieve as others do who have no hope. For since we believe that Jesus died and rose again, even so, through Jesus, God will bring with him those who have fallen asleep. For this we declare to you by a word from the Lord, that we who are alive, who are left until the coming of the Lord, will not precede those who have fallen asleep. For the Lord himself will descend from heaven with a cry of command, with the voice of an archangel, and with the sound of the trumpet of God. And the dead in Christ will rise first. Then we who are alive, who are left, will be caught up together with them in the clouds to meet the Lord in the air, and so we will always be with the Lord. … 1 Thessalonians 4:13-18

Angie says: “Many of us have lost loved ones (friends and family) during this pandemic. While I grieve and miss them, I hold onto this scripture knowing I will see them again.”

Submit yourselves therefore to God. Resist the devil, and he will flee from you. James 4:7

Angie says: “Did you ever have a wonderful day, week or month, then out of nowhere boom the devil attacks you? I will read James 4:7, pray, sing, and praise God. I always end up feeling better, and what do you know, Satan has left me alone.”

Gregory Kelley, Senior Pastor of First Assembly of God in Montgomery, Alabama, sent in three verses for this issue. Willa Carpenter, our firm’s Human Resources Liaison, attends his church. Pastor Gregory says:

One of my all-time favorites, is an obscure scripture from one of the Minor Prophets in the Bible, that has become kind of a “Life Verse” for me, and I often include the reference in cards that I send to encourage people.

The Lord is good, a refuge in times of trouble. He cares for those who trust in Him! Nahum 1:7 (NIV)

Pastor Gregory says that since the first time this scripture leaped off the page at him, it has been a promise he has held on to. He says that no matter what trouble he may be going through at the time, God is GOOD! Pastor Gregory says:

And HE is my refuge where I can go and find peace and safety and comfort and assurance! He cares about ME! The King James translation says He KNOWS those who trust in Him! When we put our trust in God, he knows He has our hearts and our devotion and He will come through for us and fight for us in times of trouble. That’s because we belong to God. He cares about us and knows what we are going through!

Pastor Gregory said when he graduated from High School he was asked his favorite scripture at the time, and he said Isaiah 40:30-31.

Even youths grow tired and weary, and young men stumble and fall: but those who hope in the Lord will renew their strength. They will soar on wings like eagles; they will run and not grow weary, they will walk and not be faint. Isaiah 40:30-31 (NIV)

Pastor Gregory said from even a young age, God was promising him that in every phase of my life, He would be with him and see him through if he put his hope in Him! He says:

He would renew my strength, and even help me to soar above the problems and see things from a higher perspective. That there are times in life when we soar; times when we just run; and times where we only have strength to walk, but in every season or experience He gives us the strength needed to make it through!

CLOSING OBSERVATIONS

Alabama State Bar Is Commended For Expanding Virtual CLE Opportunities In The Pandemic

The coronavirus pandemic forced many organizations to change the way they conduct business. The legal industry wasn’t immune. State bars and courts across the country were forced to adjust how they handled continuing legal education (CLE) requirements for lawyers to limit in-person gatherings to stop the spread of COVID-19.

As part of this effort, the Alabama State Bar Mandatory Continuing Legal Education (MCLE) Commission temporarily suspended regulations that limit attorneys to six hours of on-demand credits in any single CLE year. This allows Alabama attorneys more flexibility for satisfying their annual CLE requirements of 12 hours (including 1 ethics hour) with approved on-demand courses.

To further assist lawyers during these challenging times, the Alabama State Bar announced in August that it is also offering a free online CLE platform to all active members – enough for members to satisfy their annual CLE requirement by the Dec. 31 deadline.

Minimum CLE courses are required of every practicing attorney. They help lawyers maintain a level of professionalism in the industry and ensure they stay on top of new developments in the legal system. We at Beasley Allen applaud the Alabama State Bar and its President Bob Methvin for expanding the virtual CLE opportunities during the pandemic so lawyers can get their continuing legal education credits they need.

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.

2 Chron 7:14

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

Get in good trouble, necessary trouble, and help redeem the soul of America.

Rep. John Lewis speaking on the Edmund Pettus Bridge in Selma, Alabama, on March 1, 2020

Ours is not the struggle of one day, one week, or one year. Ours is not the struggle of one judicial appointment or presidential term. Ours is the struggle of a lifetime, or maybe even many lifetimes, and each one of us in every generation must do our part.

Rep. John Lewis on movement building in Across That Bridge: A Vision for Change and the Future of America

PARTING WORDS

Our nation is as badly divided today as it has ever been in my lifetime. We are nearing the end of a race for President, one that has added greatly to the division, and the person elected on Nov. 3 will have the opportunity to help heal our land. My prayer is for all Americans to vote their convictions for the candidate of their choice, and when it’s over to accept the outcome of the election.

The loser in this hotly contested race has a legal and moral obligation to participate in a peaceful, orderly transition of power. It’s also critically important for the winner to act with humility and grace and to dedicate his efforts toward unity, peace and progress in the United States.

We can also play an important role after the election is over and a president selected. We should all read 2 Chronicles 7:14 and then pray consistently for America and for all of our people.

May God Bless America!