The WCM Law Blog

In the recent First Department case of U.S. Bank Nat’l Assn, et al. v. GreenPoint Mortgage Funding, Inc., 2012 NY Slip Op 01515, plaintiff appealed from a New York County decision that required plaintiff to bear the cost incurred in the production of electronic discovery.  Prior to the First Department’s decision, New York courts generally required the party requesting the discovery to bear the cost.  This held plaintiffs back from making large scale demands for e-discovery because they would have to pay the cost involved with e-discovery.  

This decision, following the well known Zubulake decision, held that “it is the producing party that is to bear the cost of the searching for, retrieving, and producing documents, including electronically stored information.”  Although cost shifting is permitted, the First Department follows the factors set forth in Zubulake, 217 FRD at 222, in deciding who bears the cost of production. Those factors are: (1) the extent to which the request is specifically tailored to discover relevant information; (2) the availability of such information from other sources; (3) the total cost of production, compared to the amount in controversy; (4) the total cost of production, compared to the resources available to each party; (5) the relative ability of each party to control costs and its incentive to do so; (6) the importance of the issues at stake in the litigation; and, (7) the relative benefits to the parties of obtaining the information.

The First Department states that the Zubulake factors are not a “check list,” but rather should be used as a “guide” by the trial court when determining whether or not the discovery request constitutes an undue burden or expense on the responding party.  Interestingly, the Court concludes that “the adoption of the Zubulake standard is consistent with the long-standing rule in New York that the expenses incurred in connection with disclosure are to be paid by the respective producing parties and said expenses may be taxed as disbursements by the prevailing litigant.” It remains to be seen whether tens of thousands of dollars in e-discovery expenses can be taxed against a losing plaintiff and, even if allowed, defendants will never be able to collect it.   However, the threat of taxing a losing plaintiff significant amounts of money in a judgment may still provide some deterrent to a plaintiff’s counsel seeking to use e-discovery as a weapon of mass discovery.

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_01515.htm

In Silva v. FC Beekman Associates, LLC, the plaintiff was injured when he fell 14 feet from a scaffold while working in the elevator shaft of a high rise building in Manhattan.  The plaintiff sued the owner of the building and general contractor alleging a violation of Labor Law 240(1 based on a claim that there were no railings or safety net around the scaffold he was working on and he was not provided with a harness.

At the close of discovery, the plaintiff moved for summary judgment.  The defendants opposed the motion by providing an affidavit from the plaintiff’s co-worker, James Kern, who stated that he was working with the plaintiff and the scaffold had railings on two sides.  However, Kern did not witness the accident.  The Supreme Court, Queens County granted the plaintiff’s motion, holding that the affidavit was hearsay because Kern did not state that both railings were in place at the time of the plaintiff’s accident.

The Appellate Division, Second Department reversed the lower court’s decision, holding that Kern’s affidavit was based on his personal observations and the fact that he did not specifically state that the railings were present “at the time of the accident” was not dispositive.  The Court further noted that the statement, when read in proper context and in its totality, is clear that Kern was referring to the time of the subject accident.  Accordingly, Kern’s affidavit created a question of fact that precluded summary judgment.

Thanks to Ed Lomena for his contribution to this post.

For more information about this post, please contact Nicole Brown at nbrown@wcmlaw.com.

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_01236.htm

In Kendall v. Hoffman-LaRoche, Inc., et. al., New Jersey’s High Court found that plaintiff’s action for personal injuries arising out of her use of the prescription drug Accutane was timely, despite the fact that her first appearance of inflammatory bowel disease (the injury alleged) and her receipt of an FDA approved presumed adequate warning was more than 2 years (the relevant statute of limitations period pursuant to N.J.S.A. 2A:14-2) prior to her commencement of the action.

 Plaintiff was first prescribed Accutane in 1997. She had outbreaks of inflammatory bowel disease starting in 1999. Plaintiff was prescribed Accutane again in 1998, 2000 and 2003. Over that time period, the warnings associated with Accutane and inflammatory bowel disease became stronger, and plaintiff received said strengthened warnings and signed a consent form acknowledging as such in 2003. As a result, defendant contended that by 2003, plaintiff should have been aware of the possibility of a causal link, given that she had received increased warning. Plaintiff explained, however, that the warnings she had been given never specifically mentioned inflammatory bowel disease or ulcerative colitis. Moreover, critical in this case was the fact that plaintiff had been prescribed the drug for a significant period of time prior to her receipt of any warnings regarding a causal link between the drug and inflammatory bowel disease.

 In reaching its conclusion, New Jersey’s High Court considered New Jersey’s “discovery rule” and “whether the facts presented would alert a reasonable person exercising ordinary diligence that he or she was injured due to the fault of another.” In addition, the High Court considered the effect of New Jersey’s Product Liability Act, if any, on the timeliness of plaintiff’s filing, and found that although the PLA provided a “presumption of adequacy” for the warnings (since the product had been approved by the FDA), such a presumption could be overcome if the plaintiff proved that a reasonable person in her circumstances would not have been aware, within the prescribed time period, that she had been injured by the defendant’s product. The Supreme Court held that because plaintiff, in this case and under these circumstances, proved that she reasonably failed to appreciate the cause of her injury by the requisite time, her filing of the complaint was timely.

http://www.judiciary.state.nj.us/opinions/supreme/A7310KendallvHoffmanLaRoche.pdf

The recent collapse of the Knoedler gallery has been well-documented.  Today’s NYT had an interesting long form article on the collapse and the resulting litigation arising out of questions as to the provenance and authenticity of various pieces sold by the gallery.

For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

In Larsen v. Allstate Property and Geico Ins. Co., plaintiffs were involved in a motor vehicle accident.  Plaintiffs asserted claims for personal injuries against the tortfeasor and their own underinsured motorist carriers.  At a UIM arbitration, the arbitrators entered an award for $62,000, an amount well within the tortfeasor’s $100,000 liability coverage.  Since the damages award fell within the policy coverage, no compensatory damages were provided to the plaintiff, and no payment was made under the UIM policies.  Fifteen month later, the plaintiffs filed a writ of summons and petitioned to confirm the arbitral award and award delay damages against Geico and Allstate.  The Philadelphia Court of Common Pleas rejected plaintiffs’ contention that by filing a summons they created a civil case and were therefore entitled to delay damages under Pa.R.C.P. 238.  The court determined since the arbitration award was less than the policy amounts, no delay damages judgment could be entered because no real award had been made.  In other words, since the compensatory award was zero, the plaintiffs were not entitled to delay damages.

Thanks to Colleen Hayes for her contribution to this post.