Holy Week is a time of reflection and anticipation as the Church prepares to celebrate Easter, its holiest feast day and the key to the central mystery of the Faith. This year, however, the Church’s focus may not be on the holy season, but rather on a new wave of lawsuits arising out of allegations of priestly sexual misconduct. Putting aside the merits of the claims, which is far beyond the charter of this blawg, one of the interesting legal issues to arise is whether the Pope, himself, will be deposed. The Vatican is already mounting a sovereign immunity defense. Now, we’ll have to see what a Kentucky court does. It’s worth remembering that Kentucky was once at the forefront of the Know Nothing movement.
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In the case of Simon Finger and Rebecca Finger vs. Audubon Insurance Co, Audubon denied the plaintiffs’ claim for first-party coverage pursuant to, among other things, a pollution exclusion. The state trial court ruled for the homeowners and held that the pollution exclusion “was never intended to apply to residential homeowners claims for damages caused by substandard building materials.” While appeals are likely, for the moment, this decision has significant coverage implications for CGL carriers with drywall exposure.
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In Wutz v. Smith, Wutz was injured in a car accident with Smith. Smith was covered by a minimal $15,000 Progressive Insurance liability policy. Progressive offered to tender the policy to Wutz to settle the claim. Wutz also filed a UIM and bad faith claim against his insurer, State Farm. Pursuant to a consent to settle clause in the UIM policy, Wutz sought State Farm’s consent to accept a $15,000 settlement from Progressive. State Farm elected to pay the settlement offer to Wutz and pursue a subrogation claim against Smith. Wutz then moved to sever the personal injury claims and the UIM and bad faith claims. The court held there was a sufficient basis to grant severance noting that State Farm had created a conflict of interest for itself, since as a subrogee, State Farm would have to show both that Smith was negligent and the damages were as high as possible. In contrast, as a UIM defendant, State Farm would have to show the opposite. However, in a case of bad news for State Farm (and isn’t there always bad news when it comes to State Farm and bad faith claims), the Court held that since there was no longer any dispute between Wutz and Smith, Wutz should first proceed on the UIM and bad faith claims before State Farm got its bite at the proverbial apple.
Special thanks to Ed Lomema for his contributions to this post. If you have any questions, please contact Bob Cosgrove at
In our post of July 9, 2009, we discussed a company’s right to search for and use an employee’s personal email communications with her attorney exchanged through a company provided laptop computer. Stengart v. Loving Care Agency, Inc. In Stengart, the New Jersey Appellate Division decided in favor of the employee and privacy advocates in a case closely followed by the employment bar. The New Jersey Supreme Court believed that the issue was so important that it granted interlocutory leave to appeal and stayed the underlying action until it reviewed that decision.
The facts in Stengart were relatively simple. Marina Stengart was an employee of Loving Care who was provided with a laptop for company related work. The employee handbook of Loving Care alerted employees that emails were considered part of the company’s business records and were to used principally for business purposes. Athough employees were cautioned against considering such communications either private or personal, the handbook explicitedly permitted occasional personal emails.
Stengart was not a happy employee. While contemplating legal action against her employer, she used her company laptop to access her private, password-protected Yahoo mail account through the internet to communicate with her attorney. When she left the company a short time later, she turned in her laptop and thereafter filed an employed related civil action against Loving Care. In response, the company’s lawyers retained a forensic expert who recreated her laptop’s harddrive and retrieved several of the emails exchanged between Stengart and her attorney. These emails were eventually identified in the company’s discovery responses, which drew a vigorous objection by the plaintiff.
The Supreme Court was faced with the specific question of whether these emails were protected by the attorney client privilege and the broader question of under what circumstances an employer may search for and use the contents of email communications between an employee and her attorney when those communications are facilitated by the company’s electronic resources. A sticky wicket indeed.
Siding with the employee and advocates of privacy in this electronic age, the Supreme Court ruled that Stengart had a reasonable expectation of privacy under the circumstances. Although the company provided and presumably owned the laptop, she used her private, password-protected Yahoo email account –not the company server or email system– to communicate with her attorneys. In addition, the company employee handbook was ambiguous in its email policy. On the one hand, the handbook cautioned against any privacy expectation when using the internet or exchanging emails while, on the other hand, it permitted occasional personal email use. On the balance, the court found that the employee’s right to confidential communications with her attorney trumped the company’s absolute right to monitor and access all email communications assisted by company resources.
Stengart provides important guidance on the scope of an employee’s legitimate privacy expectations in the work place when electronic communications are involved. While an employer should use care in formulating a clear and well defined electronic use policy in its handbook, there are limits to a company’s legal right to search for and use an employee’s personal email exchanges no matter how what the handbook states.
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In Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al., a collection of civil liberties groups sued the US Patent and Trademark Office which had granted 7 patents to the breast cancer genes to the University of Utah. The plaintiffs claimed that the assignment of the patents was unlawful since genes are products of nature and thus cannot be patented under the US Constitution or federal statute. In a lengthy opinion, that is the first of its kind, Judge Robert Sweet of the US District Court for the SDNY sided with the plaintiffs. He ruled that “DNA represents the physical embodiment of biological information” and thus is not the proper subject of a patent. If the decision stands — and appeals are inevitable — the case will likely have a major impact on the business of medical research.
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In Adamo v. National Railroad Passenger Corp., plaintiff tripped and fell as she was walking up the stairs of a stopped escalator at Penn Station. She alleged that the uneven spacing of the escalator steps caused her fall.
Defendants were granted summary judgment on the basis that the testimony of plaintiff and defendants’ witnesses indicated that the only problem with the escalator was a defective handrail. A new part had been ordered and it was not the protocol of the defendants to barricade the escalator unless it was actually being repaired. Defendants argued that it was then the plaintiff’s decision to use the escalator and since she testified to having used the escalator in the past, she was aware of the step differentials.
Plaintiff disagreed and provided expert testimony that defendants’ failure to barricade the escalator violated industry safety standards. The appellate court found that the expert did not provide any evidence that a stopped escalator was unsafe or that the uneven steps created a dangerous condition.
Thanks to Katusia Lundi for her contribution to this post.
While a copyright plaintiff has always been entitled to its infringer’s profits, last week’s decision in Graham Co. v. Haughey demonstrates how far these damages will reach. In Graham Co., an insurance brokerage firm brought copyright claims against one of its former employees and his current employer. The Graham Company claimed that the former employee used two of its manuals in sales proposals for his new employer. At trial, the jury awarded 70-75% of the infringers’ profits ($18+ million dollars) over a thirteen year period.
During post trial motions, the District Court limited damages to the three-year period immediately preceding the filing of the complaint (as opposed to the thirteen years of infringement). The Circuit Court of Appeals, however, reversed. It held that The Graham Company was entitled to damages occurring during the entire thirteen year period, because it only discovered the infringement immediately prior to commencing suit. The Court remanded the case to determine whether the damages awarded–i.e. 70-75% of the infringers’ profits–were excessive, “against the weight of the evidence” and not entirely attributable to the infringement. The District Court found that the 70-75% of the infringers’ profits could be attributable to the infringement, and thus did not “shock the judicial conscience”. The Court reinstated the jury verdict, and thus The Graham Company is now entitled to the milk split long ago.
Special thanks to Cheryl Fuchs for her contributions to this post. If you have any questions, please contact Bob Cosgrove at .
Last month, two Bronx convictions for criminally negligent homicide were overturned for evidentiary reasons. Firefighters responded to a fire in an apartment building in which tenants had created partitions in apartments to create extra rooms. The new rooms, however, were cut off from both hallways and fire escapes. Due to the lack of escape routes, two firefighters were tragically killed during the fire. A jury convicted the building owners for criminally negligent homicide. Those convictions have now been overturned because, according to the judge, there was insufficient evidence that the defendant building owners actually knew about the illegal partitions.
Another aspect of this recent decision examined a particular juror’s behavior during the trial. One of the jurors, Karen Krell, sent a Facebook “friend request” to a testifying witness, Firefighter Brendan Cawley, during the trial. In her decision, Judge Margaret Clancy found that these actions by Ms. Krell constituted a “serious breach of her obligations as a juror”, but did not quite rise to the level of misconduct that would require overturning the convictions. As it turned out, the convictions were overturned for other reasons, as mentioned above.
Still, scenarios such as this one should compel judges to expand their jury instructions before and during trial. Judges generally instruct jurors not to speak to the witnesses or lawyers in the halls or outside the courthouse during the trial, so as to not create even the appearance of impropriety. Given that we are now in a digital age, judges would be well advised to expand those jury instructions from courthouse space to cyberspace, charging jurors to refrain from contacting any witness by any means, electronic or otherwise, thereby avoiding potentially costly appeals.
While avoiding such cyber-contact with a witness during a trial may (and should) strike potential jurors as common sense, this case illustrates that common sense is often uncommon, and courts should offer more specific and explicit instructions to the jurors.
Thanks to Brian Gibbons for his contribution to this post.
Tort reform, as specifically applied to medical malpractice litigation, is a popular buzz-word. And many states, like GA, have attempted to cap recoverable damages. However, according to Georgia’s Supreme Court, statutory caps on jury awards are unconstitutional and violative of an individual’s constitutional right to a jury trial. Whether this decision permeates other states remains to be seen.
Shipping claims are the most common types of claims that arise under an all risks fine arts policy. Disputes over the applicability of the Carmack Amendment and diminution in market value inevitably ensue. With all this as background you would think packers would be ever more vigilant about the work they perform. And no doubt many are. But, fine art lifting Olympics certainly can’t be a step in the right direction!
