That Case You Settled Could Rise Up and Bite You- Just Ask Toyota

A Texas state court judge (I know, not the best source of legal precedent) recently lifted a stay on litigation between a paralyzed woman who settled her Camry roll-over claim against Toyota and then later sought to set aside the $1.5 mil settlement based on undisclosed Toyota documents.  The plaintiff asserts she would have demanded more in settlement or taken the case to trial if she had the withheld documents.  Presumably the settlement agreement contains language that the plaintiff understands and accepts the risk of unknown facts, injuries, etc.  The basis must be that Toyota allegedly fraudulently withheld documents.  The plaintiff apparently obtained the previously unknown documents from a former Toyota attorney who worked on her case and others and has spilled the beans about the withheld documents. 

According to the LA Times, “the ruling could have serious implications for Toyota. If Greene’s allegations are upheld the Japanese automaker could face not only a civil sanction, but also the prospect that dozens — if not hundreds — of other long-closed lawsuits against the automaker could be reconsidered on similar grounds.”

Some friendly advice: Don’t lie.  Don’t cheat.  Be honest, ethical, and above-board and you and your client won’t face the forced-penance music of the damned.

Utah Supreme Court Expressly Recognizes the Cause of Action for Negligent Credentialing Against Health Care Providers

In Archuleta v. St. Mark’s Hospital, the Utah Supreme Court, in a 4-2 opinion released today, overturned a district court decision which had determined that Utah Code sections 58-13-5(7), 58-13-4, and 26-25-1 do not bar negligent credentialing claims brought against health care providers.  The court analyzed each code section and found that the Utah Legislature did “not intend to immunize negligent credentialing claims brought by patients” and “expressly h[e]ld that negligent credentialing is a valid common-law cause of action in Utah.”  If you ever had any question about this before, you should have none now.

In Utah, Attorney’s Fees Are Valid, Consequential Damages for Another’s Negligence If It Causes You to Be Sued

We all know that the ‘American Rule’ applies to bar an award for attorney’s fees unless otherwise permitted by statute or contract.  Utah recognizes an exception to the American Rule “when the natural consequence of one’s negligence is another’s involvement in a dispute with a third party,” which is also known as the “third-party tort rule.” South Sanpitch Co. v. Pack, 765 P.2d 1279, 1282-83 (Utah Ct.App.1988); see also Restatement (Second) of Torts § 914(2) (1979).  The fees may be limited because an “allocation is made between recoverable fees incurred in litigation with third parties and non-recoverable fees incurred in pursuing the negligent defendant or expended on causes of action not proximately necessitated by that defendant’s negligence.”  Id.

If your client gets sued because of the negligence or tort of another, even in breach of contract cases where the contract does not provide for attorney’s fees, remember to raise an affirmative claim against the other for attorney’s fees, costs, and other consequential damages if it is warranted.  Also, this claim can be raised after the fact in a separate claim against the allegedly negligent third-party.  Good luck.

Utah Supreme Court Upholds Constitutionality of Products Liability Statute

The Utah Supreme Court issued Egbert v. Nissan (“Egbert II”) in which it has expressly held:

1) The rebuttable presumption of non-defectiveness in product liability cases is constitutional and has been effective in Utah for more than 20 years; and

2) Restatement (Third) Torts section 16(b-d) regarding enhanced injury claims is rejected.  An “enhanced injury occurs when an injury caused by some other event is increased or enhanced due to a defective product.”  The Court found an inherent conflict between the restatement and Utah’s long-standing abolishment of joint and several liability and adoption of apportionment of fault.

Settling Personal Injury Claims in Utah – an Update on Medicare Liens

No doubt you have heard about Medicare’s new reporting requirements.  If Medicare has paid for any of a personal injury claimant’s medical care, Medicare is entitled to be repaid whenever the case is settled—regardless of any provision in the settlement documentation disputing any liability or otherwise attempting to allocate the settlement funds to a non-medical care purpose.  The new requirements appear to have a dual purpose: 1) reimburse Medicare and 2) deter non-reporting.  Failure to comply with the reporting requirements can result in double recovery and $1,000 per day fines.  The ABA published an article (by Caroline Powell of Cranfill Sumner & Hartzog LLP) that provides a good summary of the new reporting requirements here.

Failure to Issue “Litigation Hold” Could Result in Sanctions and Attorney’s Fees

The recent S.D.N.Y. decision in Pension Committee of the Univ. of Montreal Pension Plan v. Banc of America Securities, 05 Civ. 9016, 2010 U.S. Dist. LEXIS 1839, *1 (S.D.N.Y. Jan. 11, 2010, and amended, Jan. 15, 2010), highlights that litigation requires more than simply responding to discovery once it is initiated by a formal request.  In this case, the plaintiffs failed to anticipate and issue within its company a litigation hold to preserve and collect all reasonably relevant documents.  The plaintiffs waited nearly two years before initiating a written litigation hold.

The court was clear that “the failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information.”  The court found that a litigation hold should “direct employees to preserve all relevant documents —both paper and electronic” and “create a mechanism for collecting the preserved records so that they can be searched by someone other than the employee . . . .”  The court also found that collection efforts do not “require hands-on supervision from an attorney. However, attorney oversight of the
process, including the ability to review, sample, or spot-check the collection efforts is important. The adequacy of each search must be evaluated on a case by case basis.”

Here are some practice pointers offered by Orrick:

*  “[O]nce a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.”

*  Employers should consider whether they have an obligation to preserve, search and collect information on an employee’s home computer or mobile personal device.

*  Once the duty to preserve is triggered: 1) suspend auto-deletion of ESI; 2) ensure preservation efforts account for departed employees; and 3) take steps to ensure preservation of relevant information under the litigating party’s control but in the custody of third parties.

*  Custodian self-collection can be defensible with the appropriate supervision by counsel. To ensure defensibility, it is important to understand the technology and process used for collection, document actions and decisions, and sample custodian self-collection.

*  Collection instructions should be in writing and technical support should be available to the custodian.

*  If relying on custodian self-collection, instructions to individual employees should include a broad description of “relevant documents.” As much as possible, avoid asking the employee to make relevancy determinations.

*  Any proffer of eDiscovery evidence should be specific and accurate. Whether arguing for cost shifting or presenting evidence of the reasonableness of preservation or collection, it is essential that the statements have specificity. Cursory summaries of IT infrastructure, scope of collection and preservation or cost will inevitably lead to problems. To support these detailed evidentiary offerings, it is important to document decisions and actions throughout the eDiscovery process. When identifying an appropriate witness on these issues, ensure the witness understands the company’s IT infrastructure and can explain, in detail, the preservation and collection protocol at issue. The average IT employee or paralegal is unlikely to have the knowledge and skill to be an effective witness.

*  The Pension Committee Court pointed out that all of the declarations in this case stated that “all documents” had been collected.  With today’s proliferation of information, even the most comprehensive and well-run searches cannot locate “all documents.” “Courts cannot and do not expect that any party can meet a standard of perfection.” Rather, when offering evidence or certifications regarding preservation and collection, describe these efforts in accordance with the “reasonable inquiry” standard of Fed. R. Civ. P. 26(g).

*  Where the value of the case justifies the expense, there are distinct advantages to collections performed by expert vendors. These vendors are well versed in collection and search techniques and generate detailed documentation regarding the who, what, where, and when of the collection. They can also serve as the declarant or 30(b)(6) witness on issues of eDiscovery. This can spare the party’s legal or IT department from serving as the witness.

*  Preserve backup tapes when they are the sole source of relevant information. If, on the other hand, they contain duplicate copies of information available on servers, hard drives or other accessible sources, preservation is not necessary.

Good luck.

Remember to Post All legal Notices in Print and Online Beginning January 1, 2010

If you need to post a legal notice in a local publication, remember that the Utah Legislature modified the law somewhat and, beginning January 1, 2010, many legal notices in Utah must appear in a local newspaper and online.  The Utah Press Association, an association of most, if not all, of Utah’s major newspapers, has established UtahLegals.com, as site on which all legal notices published in print will automatically be posted online.

Prosecutors Be Forewarned: Intimidating and Improperly Influencing Witnesses Could Lead to Acquittal.

Honorable Cormac J. Carney, a judge in the Central District of California, Southern Division, entered a judgment of acquittal in favor of the defendant based on a lack of evidence. There was trial testimony, however, the judge struck the testimony based on the prosecutor’s misconduct in intimidating and improperly influencing witnesses.  Here are some of the highlights of the misconduct found by the court as to one of the witnesses:

Among other wrongful acts the government, one, unreasonably demanded that Dr. Samueli submit to as many as 30 grueling interrogations by the lead prosecutor.

Two, falsely stated and improperly leaked to the media that Dr. Samueli was not cooperating in the government’s investigation.

Three, improperly pressured Broadcom to terminate Dr. Samueli’s employment and remove him from the board.

Four, misled Dr. Samueli into believing that the lead prosecutor would be replaced because of misconduct.

Five, obtained an inflammatory indictment that referred to Dr. Samueli 72 times and accused him of being an unindicted coconspirator when the government knew, or should have known, that he did nothing wrong.

And seven, crafted an unconscionable plea agreement pursuant to which Dr. Samueli would plead guilty to a crime he did not commit and pay a ridiculous sum of $12 million to the United States Treasury.

Google Challenges Westlaw and Lexis With “Google Scholar”

Google continues to expand the universe around it—this time it has rolled out “Scholar” a free search engine for case law and articles.  Scholar has the ability to search for specific cases or by topic.  Once a case is identified, you can then explore “cited by” and “related articles” links.  You can also explore articles or opinions related to your case or topic.  Scholar exposes the profit foundation for Westlaw and Lexis and threatens to relegate these companies into nothing more than a way to make sure case is current (a la Shepard’s or Keycite).  That day may be years away while Scholar is fine-tuned to produce results to compete with these services, however, it certainly appears that day is at least on the horizon.  The only question now is how long will it take to get here.

Congratulations to Allan Larson and Heather White

Congratulations! to my partners, Al Larson and Heather White obtained a defense verdict in a widely covered case involving a car accident following a terminated high speed police chase in Ogden, Utah.  The case involved police pursuit in December 2005 by Ogden City Police of Eddie Bustos, a man wanted for multiple traffic violations and suspected DUI.  The pursuit occurred around 3:00 a.m. but lasted less than a minute when the police terminated pursuit a block and a half before Bustos continued on running a red light at 24^th and Grant in Ogden and hit a car instantly killing its driver, Jessica Nelson, and its passenger, Philemon Ellis.

The wrongful death lawsuit asserted that “the officer was negligent in initiating, continuing, and terminating the pursuit”.  Al and Heather successfully argued that the City was not at fault and the accident was caused by the fleeing driver, who is currently serving a prison term for the accident.  The jury agreed.  Although I was not present, I hear Al was great as usual and Heather did a fine job crossing the plaintiff’s evasive expert.  She also crossed the grieving family members, and fielded untold motions from plaintiff’s counsel, Bob Sykes.  Scott Young, an associate, did a great deal of briefing as well.  A great team effort.  Again, Congratulations!

If you know of some good lawyering that should be publicly recognized, send me an email and we’ll get it posted.