Does Facebook Friendship Warrant a Judge’s Recusal? (NY)

As social media has become more integrated with our lives over the past twenty years, a myriad of legal issues have come to light ranging from the discoverability of social media records to, now, whether Facebook activity can support a request for judicial recusal.

In Law Offices of Herssein and Herssein PA et al. v. United Services Automobile Association, the Florida Supreme Court ruled 4-3 the mere existence of a Facebook friendship between a judge and an attorney, by itself, is not sufficient to support a demand for recusal.  The Court reasoned judges and attorneys have long diligently exercised discretion in recusal when personal connections exist, and that recusal has always been warranted when the friendship surpasses mere acquaintance.  Mindful of the need to preserve judicial integrity, the Florida high court expanded that social media records could constitute grounds for recusal provided there is ample evidence of social contact between the judge and an attorney or fact witness.

Justice Labarga, who concurred with the majority, penned a short opinion in order to underscore concern over the appearance of judicial impropriety.  While a social media “friendship” may be innocuous, Justice Labarga argued the safest course of action for judges would be to not engage in social media at all, or, failing that, to carefully limit friendships to close friends and family.

The dissent disagreed with the majority’s analogizing of social media and real life friendships, and urged instead a standard prohibiting judges from friending attorneys on social media.   The dissent relied upon a local district court’s decision and the Florida Judicial Ethics Advisory Committee’s opinion recommending staunch regulation of judicial use of social media.  As social media has rapidly become the leading form of communication, the dissent notes many users share ideological musings or newspaper articles.  The mere review of such postings, of which there may be no evidence, could infringe on the impartiality of the judge.  Further, the friend is privy to all sorts of personal information about the judge.  The dissent expressed concern that litigants or their attorneys may seek to curry favor by means of social media and thus determined the reasonable course of action was to either require recusal in all cases in which there is a friend relationship or simply ban judges from social media.

Both the majority and dissent express the same valid concerns, but reach radically different results.  The common overlap, though, is that litigants have the reasonable expectation that any significant personal relationship will be disclosed either for waiver of any conflict or as sua sponte grounds for recusal.  In any case, to the extent no such disclosure was forthcoming, we should be mindful that social media records could map out the extent of an undisclosed relationship and should be used to support a demand for recusal.

Thanks to Chris Soverow for his contribution to this post.

Cyber Rules About to Get Real.

We have previously reported on NY’s onerous cyber rules. The rules go into effect by month’s end.

Specifically, n August 28, 2017, insurance companies that do business in NY will be obligated to institute policies and procedures that preserve and protect PII of clients, insureds, and other entities in accordance with 23 NYCRR §500 (et seq.). The rationale of the policy was explained by the Superintendent of the DFS:
Consumers must be confident that their sensitive nonpublic information is being protected and handled appropriately by the financial institutions that they are doing business with. DFS designed this groundbreaking proposed regulation on current principles and has built in the flexibility necessary to ensure that institutions can efficiently adapt to continued innovations and work to reduce vulnerabilities in their existing cybersecurity programs. Regulated entities will be held accountable and must annually certify compliance with this regulation by assessing their specific risk profiles and designing programs that vigorously address those risks.

Insurance companies, and other covered entities, are required to perform cybersecurity assessments in accordance with a written policy developed by the covered entity, that includes:
• An evaluation of encryption of data containing PII (both in transit and at-rest);
• The development of a Crisis Response Team (“CRT”) to respond to a breach;
• TFA or MFA;
• Identify and assess internal and external cybersecurity threats;
• Utilize defensive infrastructure in conjunction with appropriate policies and procedures to protect PII;
• Capability of detecting and responding to any intrusion;
• Ability to fulfill the statutorily required breach notification statutes.

Moreover, the regulations require a specific policy that regulates 14 different aspects of the covered entities operations. If this is not enough to develop specific in-house policies, the regulations also require that insurance companies ensure that other entities it does business with and transfers materials containing PII, to maintain and adhere to strict cybersecurity regulations that include a requirement for TFA, encryption, written policies, and periodic assessments of the efficacies and compliance to the policies. The insurance company is required to promulgate a policy for its third-party service providers that complies with the above requirements. If not, the insurance company may be held liable.

Furthermore, we note that this will soon be the policy in all 50 states. It is easier to implement these changes and requirements now as opposed to being forced to implement the policies at a rush and possibly not achieving full compliance.

Special thanks to Matt Care for his contributions to this post.

For more information about this post please e-mail Bob Cosgrove.

Eight Corners and Ongoing Damages Rules Prevent Disclaimer in Environmental Damages Case

The duty to defend can be triggered where there is a lack of specificity in a complaint.

In  USA Environment LP v. American Int’l Speciality Lines Ins. Co., the Southern District of Texas recently rejected an insurer’s denial of coverage to insureds that transported millions of gallons of hazardous waste materials to what was later designated a superfund site.  The “potentially responsible parties” (PRPs) identified by the EPA sued hundreds of companies involved with the Suprefund site, including the insureds who filed a separate action seeking coverage.  The insurer issued policies to the insureds from 2003 to 2014, and denied coverage under waste disposal site and auto exclusions.

The Court observed that the policies issued after 2011 had deleted the waste disposal site exclusion, and created an exception to the applicable pollution exclusion. The underlying complaint filed by the PRPs did not specify when the releases of pollutants occurred or the years the insureds’ services were performed, but did note the insureds transported different kinds of hazardous materials over the course of many years.  The complaint further alleged the release of hazardous materials was ongoing.  Accordingly, the Court held coverage was triggered because it was possible damages occurred during a policy issued after 2011.

Similarly, the Court held the allegations in the complaint were too vague to conclude all the hazardous materials were transported by the insureds in an “auto,” as defined by the policy. As a result, some of the property damage alleged may not have arisen from the use of an auto, and the Court ruled the duty to defend was triggered.

When in a four or eight corners jurisdiction, an insurer is generally beholden to the allegations in a complaint, no matter how vague. If these allegations potentially fall within coverage, under the liberal standard embraced by courts across the nation, the duty to defend is likely triggered.  As with any general rule, there are exceptions and aggressive positions can be warranted.  However, particularly in high value cases, an aggressive position should be weighed against the certainty of litigation and its potential result.

Thanks to Chris Soverow for his contribution to this post.




What Lurks Within the 4 Corners of the Complaint?: Oregon Supreme Court Expands Scope of AI Coverage in Construction Arena

In a move that is sure to shakeup insurance underwriting, the Oregon Supreme Court, in West Hills Development Co. v. Chartis Claims, Inc., recently expanded the scope of coverage afforded by an Ongoing Operations AI Endorsement. What makes this case particularly interesting—or concerning, from an insurer’s standpoint—is that the underlying complaint clearly alleged damage based on the completed work of the contractors. Yet, the Oregon Supreme Court nevertheless read the complaint to trigger coverage for ongoing operations.  The state’s highest court affirmed an appellate court decision, effectively requiring an insurer to provide completed operations coverage, where none was obtained by the insured.

As in many faulty workmanship cases surrounding CGL policies, the underlying action involved defective work in the construction of a residential development. When the new homeowners of Arbor Terrace took up residence in their brand-new townhomes, they quickly discovered shoddy construction was causing significant water intrusion. The Arbor Terrace homeowners then sued the general contractor, West Hills Development Co, alleging negligent construction based on faulty workmanship.

West Hills then tendered the Arbor Terrace suit to its subcontractor, L&T Enterprises, and the sub’s insurer, Oregon Automobile Insurance Company. Oregon Auto denied coverage, among other reasons, because its policy only provided coverage to additional insureds for property damage occurring in the course of L&T’s ongoing operations performed for West Hills. As there were no allegations of damage to townhomes while L&T was actually working on the project, and L&T did not purchase Completed Operations coverage for additional insureds, West Hills did not qualify for coverage under the Oregon Auto policy.

After settling the Arbor Terrace action with the homeowners, West Hills commenced a DJ against Oregon Auto to recover defense costs incurred. West Hills argued that the Arbor Terrace complaint triggered Oregon Auto’s duty to defend because the allegations sufficed to create the possibility that West Hills would have been subject to liability for L&T’s ongoing operations. West Hills also argued that the Ongoing Ops endorsement applied to damages arising out of L&T’s ongoing operations, and this covered consequential damages that resulted from L&T’s work. Oregon Auto argued the underlying complaint did not allege any negligence on the part of its insured, only that West Hills was negligent. As the Oregon Auto policy did not cover West Hills for its own negligence, no coverage was owed. Further, Oregon Auto claimed coverage was only afforded if there were allegations of damages occurring while L&T was working on the Arbor Terrace project. Because no allegations were made, West Hills was not entitled to coverage under the policy’s ongoing operations endorsement. The trial court and court of appeals agreed with West Hills, and Oregon Auto appealed to the Supreme Court of Oregon.

Unsurprisingly, the potential that the state’s highest court would rule in favor of West Hills encouraged a plethora of amicus briefs, including ones from the Property Casualty Insurers Association of American, the National Association of Mutual Insurance Companies, and the Oregon Trial Lawyers Association. There were many issues on appeal, but the crux of the matter boiled down to whether the 4-corners of the complaint could be read to allege property damage caused by L&T’s ongoing operations performed for West Hills, despite the clear evidence the work on the Arbor Hills development was complete by the time the suit was filed.

Both the court of appeals and the Supreme Court of Oregon found one particular allegation by Arbor Terrace to be dispositive: the homeowners alleged the property damage occurred by the time they purchased their townhomes. Taking a broad interpretation of this allegation, the Court held it was possible the damages occurred earlier, and thus it did not rule out the possibility that damage occurred before L&T finished its operations. The Oregon Supreme Court performed some legal gymnastics in a strained reading of the Arbor Terrace complaint to find coverage was potentially triggered under the ongoing operations endorsement. As a result, although there were no allegations that damage arose before work was completed, the Court nevertheless found coverage because the complaint could be reasonably interpreted to allege damage to the Arbor Terrace properties before the homeowners purchased their townhomes.

Ignoring the syntax and grammar of the allegations (all in the past-tense and referring to prior work), the court concluded one allegation was sufficient to grant the insured more coverage than that which it bargained for (i.e., converting Ongoing Operations into Completed Operations coverage). This speculation on what could be meant by a party’s allegations exceeds the traditional scope of the 4-corners rule. Normally, an insurer compares the 4-corners of the complaint with the policy to determine whether anything alleged falls within the scope of coverage. If the allegations fail to plead facts that could trigger coverage under the policy, the insurer is relieved of its coverage obligations. Now (at least in Oregon), so long as the complaint does not expressly state facts ruling out coverage (e.g.,  no “occurrence,” injury/damage occurred before inception of policy, etc.) there would be a duty to defend. Undoubtedly, attorneys will use this to their benefit by making their allegations as ambiguously broad as possible, as a way to trigger coverage.

Thanks to Dan Beatty for his contribution to this post. If you have any questions about this post, please call or email Dennis Wade at for additional information.

Going to Need a Bigger Boat? Will Cyber Rules Finally Impact Insurers and Their Vendors (Like Lawyers)?

You might have noticed that cybersecurity issues are a little bit in the news these days. But, we’re not here to talk about Russian spies influencing US presidential elections (although that would be an interesting discussion). Rather, we’re here to talk about boring NY bureaucrats, who have just promulgated (for comment) 23 NYCRR 500, CYBERSECURITY REQUIREMENTS FOR FINANCIAL SERVICES COMPANIES that is set to go into effect on January 1, 2017 (yes, that’s less than 3 months from now). The proposed regulation is currently in its comment period and, if adopted, will apply to insurers who do more than $5,000,000 in gross revenue and are regulated by the NY Department of Financial Services. It will also likely serve as the blueprint for other states across the country. So what does the regulation propose to do?

Basically, to prevent and mitigate a “cybersecurity event”, i.e. an act or attempt, successful or unsuccessful, to gain unauthorized access to, disrupt or misuse an information system, a regulated entity (like an insurance company) is obligated to ensure that non-public information (like names, dates of birth and social security numbers) are protected. To do that, you must:

(1) develop and implement a cybersecurity program that includes penetration testing, vulnerability assessments, an audit trail system, access privilege limitations, application security, risk assessments, a data retention policy, encryption of nonpublic information and an incident response plan;

(2) develop and implement a cybersecurity policy that includes training and monitoring;

(3) have a chief information security officer (and other personnel); and

(4) have a third-party information security policy that will apply to all third-parties doing business with the insurer.

But, you might ask, what does this really mean for me? It means that you’re going to need a bigger boat (to paraphrase Jaws) if you want to stay ahead of this shark and avoid fines and penalties by the NY Department of Financial Services (and also avoid lawsuits where failure to follow the NY regulations will serve as a blueprint for what you were supposed to do and failed to do). Insurers and their vendors (like attorneys) have in their possession voluminous amounts of information (like medical records, discovery responses and transcripts) that include non-public information. Yet, how often is such information being transmitted by insurers to their attorneys (and from attorneys to their insurers) in unsecured ways? How many insurers are capable of downloading and adding to their files information that is sent by attorneys in secured ways (e.g. via Sharefile — which is our preferred data transmission method at WCM)? I think the answer is “not as many as you would hope.” We here at WCM are happy to help work with you as to what you need to do (and to do what we can for you to help ensure compliance). But, there’s a lot of work to be done and not a lot of time to start doing it.

For more information about this post please e-mail Bob Cosgrove .

Editors Note — Due to public outcry, implementation of the regulations has been delayed to March 1, 2017. The shark remains in the water, but there is not yet blood.

The Parents Aren’t Always To Blame

The Pennsylvania Superior Court ruled a parent-company was not responsible for its subsidiary’s actions.

In Barnes v. Alcoa, Inc., Kawneer Company Inc. was a wholly owned subsidiary of Alcoa Inc. Kawneer hired G&M Crawford Inc. to remove snow and ice from Kawneer’s parking lot.  A Kawneer employee, David Barnes, slipped and fell on ice while walking through the Kawneer parking lot, and sued Alcoa (among others) based on a theory of negligent hiring and negligent supervision.  In response, Alcoa filed a motion to dismiss. In opposition, Barnes attempted to argue that the Kawneer employees who were responsible for the hiring and supervision of G&M were actually Alcoa employees.  In assessing the validity of this argument, the court noted that the relevant employees had testified that they were employees of Kawneer (not Alcoa) and that Barnes had produced no evidence that Alcoa exercised direction or control over the employees’ actions.  Conversely, the only evidence that had been produced by Barnes were paychecks that were issued from Alcoa to the employees, which the court deemed insufficient.  Barnes also attempted to argue that the G&M snow and ice contract, at issue, was actually a contract between G&M and Alcoa.

The court disagreed.  Specifically, the court reasoned since the contract expressly stated that it was between G&M and Kawneer, the contract could not be found to be between G&M and Alcoa.  Finally, Barnes attempted to argue that Alcoa exercised control over the parking lot.  The court again disagreed. Although the court noted that Alcoa did send safety inspectors to the Kawneer facility, there was no evidence that the inspectors conducted any inspections / provided any services in connection with the parking lot.  Consequently, the court concluded that Barnes could not sustain a claim for negligent hiring or negligent supervision against the Alcoa, the parent-company of the owner of the parking lot in which Barnes fell.

This case reveals that Pennsylvania courts will likely analyze a parent company’s liability for the actions of its subsidiary on a case-by-case and fact-by-fact basis.

Thanks to Colleen Hayes for her contribution to this post.





Is Lead Paint a Pollutant? That Depends on Who, and Where, You Ask

While Total Pollution exclusions have generally been applied broadly, insurers must be cognizant of a fascinating conflict between different state’s jurisprudence. This conflict involves the question of whether lead or lead based products and by-products are considered “pollutants” under a total pollution exclusion.

This conflict was highlighted recently when the Georgia Supreme Court found that a policy’s pollution exclusion applied to an injury that resulted from the ingestion of lead-based paint. In Georgia Farm Bureau Mut. Ins. Co. v. Smith, 2016 Ga. LEXIS 245 (Ga. Mar. 21, 2016), a minor tenant was injured due to ingestion of lead-based paint chips. The plaintiff insurer moved to disclaim coverage based on the policy’s pollution exclusion. Following the insurer’s victory at the trial level, the Georgia Court of Appeals reversed, claiming that lead-based paint was not a “pollutant” as defined under the policy because it wasn’t specifically mentioned in the exclusion. The Georgia Supreme Court noted that the pollution exclusion was not limited to environmental harms and that the exclusion needs to be evaluated by its terms in accordance with Georgia law. Additionally, the court referenced a prior Georgia case, Reed v. Auto-Owners Ins. Co., 284 Ga. 286, 667 S.E.2d 90 (2008), where the court found that the pollution exclusion applied to a claim related to carbon monoxide poisoning despite carbon monoxide poisoning not being explicitly mentioned as a pollutant. Using the same analysis, the Supreme Court held for the insurer, declaring lead based paint to be a pollutant for the purposes of the pollution exclusion.

Notably, New York courts take the opposite stance. The case of Westview Associates v. Guar. Nat. Ins. Co., 95 N.Y.2d 334, 338, 740 N.E.2d 220, 222 (2000) concerned essentially identical facts as Georgia Farm Bureau, in that a minor suffered bodily injury due to the ingestion of lead-based paint chips. The New York Court of Appeals, equivalent in stature to the Georgia Supreme Court, held that the lead-based paint chips did not constitute a pollutant. The Court of Appeals reasoned that, if lead-based paint chips were meant to be excluded by the policy, as the insurer claimed, then they would have been specifically mentioned in the exclusion. Since they were not, the court ruled that the issue constituted an ambiguity in the policy and interpreted it against the insurer.

The key difference between each states approach resides in their respective analytical framework. Georgia courts have a history of enforcing pollution exclusions without requiring the pollutants to be explicitly named in the policy—taking a common sense view of what is regarded as a pollutant. By contrast, New York plays by the card, requiring more specificity. This decision, once again, calls upon Underwriters to develop wording with enough breadth to carve-out the risks they are unwilling to embrace. What works in Georgia may not work elsewhere. Insurers have to be cognizant of where a given action is being litigated and where a given policy is issued.

Thanks to Joshua Gornitsky for his contribution to this post.  For more information, please email Dennis M. Wade at .

The Times (or Federal Rules of Civil Procedure) Are A’Changing.

More than 30 years ago, the Federal Rules of Civil Procedure were amended in an attempt to bring proportionality to discovery. Now, new rules with the same goal will take effect on December 1, 2015. We comment on what the changes are so that you can be prepared to the battles ahead.

Cooperation and Rule 1

Rule 1, as amended, provides that the civil rules “should be construed and administered, and employed by the court and the parties, to secure the just, speedy, and inexpensive determination of ever action and proceeding.” The intent of the amendment is clear: both the bench and the bar share the responsibility of cooperation. The theme of cooperation pervades many of the proposed amendments.

Proportionality and Rule 26(b)(1)

Under the proposed amendments, the scope of what is discoverable will now be determined by proportionality. The concept of proportionality is not new; it has been included in the federal rules since 1983. However, for various reasons, courts have avoided enforcing proportionality in favor of reasonableness. The amendment makes proportionality unavoidable. The amended rule reads as follows:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burdens or expense of the proposed discovery outweighs its likely benefit.

By moving proportionality to the top of the list of factors to consider, the amendment makes proportionality unavoidable. With that said, no one factor has greater importance, value, weight, or significance than another. Rather, all factors must be considered to determine the scope of discovery appropriate for the case. Notably, the amended version of the rule also does away with permitting any and all discovery that may be admissible. Under the new regime, discovery will be limited to what is discoverable per the Rules.

There are concerns that the amended rule places new burdens and obligations on the parties. In reality, the amendments do not change the substance of the rule. Rather, the amendments codify what lawyers are supposed to be doing in practice, but only ascribe to in theory (i.e., cooperation). The changes to the scope of discovery are not intended to deprive any party of the evidence needed to prove its claims or defenses. With the amendment, information must be relevant and proportional in order to be discoverable. However, the change will only make a difference so long as judges are willing to engage in active case management. Judges will need to intervene early and help parties identify the amount of discovery reasonably needed to resolve a case.

Case Management and Rule 16

To encourage effective case management, the amendments delete the language in Rule 16(b)(1)(B) that allows the scheduling conference to be held “by telephone, mail or other means.” Judges and lawyers now will actually have to speak to each other. Additionally, the time for holding the scheduling conference will be moved to the earlier of 90 days after any defendants has been served (reduced from 120 days) or 60 days after any defendant has appeared (reduced from 90 days). Finally, the proposed amendments add two subjects to the list of issues to be addressed in a case management order: the preservation of electronically stored information (ESI) and agreements reached under the Federal Rules of Evidence 502. The practical effect of this will be increased communication with the judge and shorter turnaround time for discovery tools such as Rule 26(f) Reports.

ESI and Rule 37(e)

Under the new regime, Rule 37(e) recognizes the existing common law duty to preserve information when litigation is reasonably anticipated. The amended rule applies when “electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery.” If reasonable steps are not taken and ESI is lost as a result, the rule directs the court to focus first on whether the lost information can be restored or replaced through additional discovery. If the ESI cannot be restored or replaced, Rule 37(e)(1) provides that the court can, “upon finding prejudice to another party from loss of the information may order measures no greater than necessary to cure the prejudice.” This provision deliberately preserves broad trial court discretion in imposing sanctions while limiting the application of sanctions to cases in which “the party acted with the intent to deprive another party of the information’s use in the litigation.” The practical effect of this will be more adverse inference jury instructions for the loss of ESI.

Putting the Amendments Into Practice

Going forward, the name of the game is cooperation; cooperation between the parties and cooperation between the bench and the bar. To achieve this, parties should engage in early, ongoing, and meaningful discovery planning. The operative word being “meaningful.” This also means that you should expect your judge to be more involved in the mechanics of the case. Additionally, in cases where there is likely to be voluminous or complex discovery, or in which there is likely to be significant disagreement about the relevance or proportionality, the parties should consider initially focusing discovery on the sources that are most clearly proportional to the needs of the case. There results of this discovery should be used to guide decisions about future discovery.

Special thanks to Hillary Ladov for her contributions to this post. For more information, please e-mail Bob Cosgrove .

What Triggers Accidental Property Contamination Coverage in a Product Recall Policy? The 8th Circuit Lays Out One Definition.

The federal Eighth Circuit Court of Appeals recently dealt with interpretation of a Malicious Product Tampering/Accidental Product Contamination policy and its application to a voluntary recall. The insurance coverage issue in Hot Stuff Foods, LLC v. Houston Cas. Co., 771 F.3d 1071, 1081 (8th Cir. 2014), was whether the insured’s voluntary recall of mislabeled Sausage Breakfast Sandwiches was covered under an accidental product contamination policy (which, of course, should never be confused with a product recall policy). The sandwiches contained very small amounts of MSG (monosodium glutamate) — between 0.06 grams and 0.13 grams, but the packages did not disclose the presence of MSG. Mislabeling a product violates federal law and as a result the insured voluntarily recalled the sandwiches at a cost of over $750,000.

The insurer, Houston Casualty Company, denied coverage for the loss because the presence of MSG in the product was not likely to cause injury to consumers. The policy provided coverage where the consumption of Contaminated Product either resulted, or “may likely” result, in physical symptoms of bodily injury within 120 days of consumption. The insured meanwhile contended that the term “may likely” cause injury should be read to require merely the possibility, not the likelihood, of injury.

The insurance dispute went to trial and as expected there was a battle of immunology experts regarding the harm that MSG causes. Although MSG has a nasty reputation, scientists have long since learned that only a small subset of individuals are negatively affected by MSG, and only in amounts larger than those contained in the insured’s sandwiches.

After a South Dakota jury found in favor of the insured (in part because of the trial judge’s rulings), the insurer appealed and the appellate court focused on the definition of “may likely” cause injury. According to the Eighth Circuit, the phrase means more than a possibility of physical injury, but less than a probability. The court remanded the case to the trial court to determine whether there was a “reasonable likelihood” that injury might result from consumption of the product.

But in reaching this decision, the court stressed that the Malicious Product Tampering/Accidental Product Contamination policy was not a Recall policy. An insured’s decision to recall a product — if undertaken merely because it mislabeled a product and the FDA instructed that a recall be conducted — is not covered under such a policy. Otherwise, the Court reasoned, the cost of the insurance would dramatically increase by extending coverage to voluntary actions that should remain part of an insured’s cost of doing business.

This decision is obviously of great significance for accidental product contamination insurers. Many insureds seem to think that accidental product contamination insurance covers any type of recall that they undertake. But, this is neither the intent (nor the pricing model) of the policies. While there may be jury issues involved, insurers should take solitude in the fact that they are not being made guarantors of product quality.

Special thanks to Mendel Simon for his contributions to this post. For more information, please contact Bob Cosgrove at

Verdict in Stow Suit Against Dodgers

Earlier this week, we posted about Brian Stow’s lawsuit against the Los Angeles Dodgers, which was days into jury deliberations and at risk of a mistrial.  Stow, a Giants fan, was assaulted by two Dodgers fans at a game, and contended at trial that the Dodgers’ inadequate security proximately caused the assault and his injuries.

After several days of deliberation, the jury finally rendered a verdict.  Stow was awarded $18 million in total damages, with the Dodgers 25% liable, and each assailant 37.5% liable.  (The Dodgers argued that Stow was responsible for his own injuries, given that he was intoxicated at the time of the assault – apparently, the jury was not receptive to that argument.)

According to that attached article, the jury awarded Stow $14 million in special (economic)  damages and another $4 million for pain and suffering.  This breakdown is significant to the Dodgers and their insurers.

Under California Law, personal injury defendants are jointly and severally liable for economic damages, but not for non-economic damages (i.e., pain and suffering.) As you can see, economic damages, including past and future medical expenses, comprised the bulk of the verdict.

The Dodgers will only pay $1 million of the $4 million pain and suffering award, but are on the hook for the entire $14 million non-economic award, jointly and severally.   Of course, they are free to seek indemnification and contribution from the two assailants, but the chance that either has assets rendering such a claim worthwhile is probably remote.