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.

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.

Daniels v. Gamma: a Basketful of Medical Malpractice Rulings

In Daniels, the Utah Supreme Court addressed a number of medical malpractice issues together with general trial issues.  Here is the gist:

1. The statute of limitations in a medical malpractice action does not begin to run until the patient discovers the legal cause of his/her injury.  “Legal cause” includes the fact that the patient has been injured, that the injury was caused by negligence, and the precise causal event leading to the injury.

2.  Evidence that two defendant doctors were insured by the same company is not relevant evidence and should be excluded at trial unless there exists a “substantial connection between the witness and the insurance company,” such as where the defendants have an employment or control relationship with the insurance provider.

3. A claim for punitive damages under a gross negligence cause of action may only succeed if the gross negligence is both “knowing” and “reckless.”  The latter element is part of the gross negligence cause of action while “knowing” is a separate element that must be plead and proven in addition to the recklessness.

4. Physicians owe their patients fiduciary duties, however, those duties may be abrogated or modified by statute.  In this case, the duties of disclosure are, in part, abrogated by Utah’s informed consent statute.  A noted exception is the “Nixdorf” disclosure requirement in which a physician has a duty “to disclose to his patient any material information concerning the patient’s physical condition.”

The Court’s clarification regarding breach of fiduciary duty is a potential landmine.  Breach of fiduciary duty often carries by implication the threat of punitive damages.  As noted, there must be proof of knowing and reckless disregard of the patient.  Such allegations, however, may be perceived as easier to make when fiduciary duties are applied instead of the usual professional malpractice or negligence claim.  I suspect that there is more fruit on this tree that this Court is willing to pick in the right case (i.e., the Court declined to rule on Daniels’ assertion of duties of good faith and loyalty because the claims were not adequately briefed).  Good luck.

The New Pleading Standard in Federal Court Requires Greater Factual Content

The United States Supreme Court is your new friend in seeking dismissal in federal district court.  Its Iqbal v. Ashcroft has been heralded as the “most significant Supreme Court decision in a decade for day-to-day litigation in the federal courts.”  Senator Arlen Specter (D-PA) has filed legislation to force a reversal of Iqbal.  The uproar among some counsel is in full swing.

What’s the big deal, you ask?  Well, the Court reiterated and extended in Iqbal its holding from Bell Atlantic Corp. v. Twombly, the shift in the pleading standard from simple “notice pleading” to “facial plausibility,” which provides that in order to “survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”

The Iqbal Court disclosed that a “claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”  The plausibility standard “asks for more than a sheer possibility that a defendant has acted unlawfully.”  Moreover, “[w]here a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.’”

One question that remained following Twombly was whether the ruling was intended to apply beyond the antitrust arena.  The Court expressly rejected this argument.  The Court applied Twombly and identified the two “working principles” found in Twombly: 1) “that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”  And 2) only a complaint that states a plausible claim for relief survives a motion to dismiss.  To determine facial plausibility, the district court judge must “draw on its judicial experience and common sense,” however, “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not “show[n]”—“that the pleader is entitled to relief.”

The Court rejected an assertion that under Rule 9, Federal Rules of Civil Procedure, “general allegations,” i.e., conclusory allegations, are sufficient to assert a claim of discriminatory intent.  The Court held that “the Federal Rules do not require courts to credit a complaint’s conclusory statements without reference to its factual context.”  Moreover, the Court found that “Rule 8 does not empower respondent to plead the bare elements of his cause of action,affix the label ‘general allegation,’ and expect his complaint to survive a motion to dismiss.”

There has been no Utah state court appellate decision to cite either Twombly or Iqbal, however, you should take advantage of them state court because “[i]nterpretations of the Federal Rules of Civil Procedure are persuasive where the Utah Rules of Civil Procedure are ‘substantially similar’ to the federal rules.”  Tucker v. State Farm Mut. Auto. Ins. Co., 2002 UT 54, ¶ 7 n. 2, 53 P.3d 947 (citation omitted).  Moreover, the compiler’s notes to Utah’s Rule 8 admits that the Federal and State Rule 8 are “substantially the same” and the courts, therefore, “freely refer to authorities which have interpreted the federal rule.”  Gold Standard, Inc. v. American Barrick Res. Corp., 805 P.2d 164, 168 (Utah 1990).

Let us know if you have any success applying the Iqbal “facial plausibility” standard in state court.

Utah Federal Court Is Where I Want to Be . . .

The 10th Circuit recently reviewed the differing standards and burdens applicable in motions for summary judgment in Milne v. USA Cycling.  The court reviewed both Pearce v. Utah Athletic Foundation, 179 P.3d 760, 767 (Utah 2008) and Berry v. Greater Park City Co., 171 P.3d 442, 449 (Utah 2007) related to the proper summary judgment standard.  Ultimately, however, the court found that “although we will look to Utah law to determine what elements the plaintiffs must prove at trial to prevail on their claims we will look exclusively to federal law to determine whether plaintiffs have provided enough evidence on each of those elements to withstand summary judgment.”

If you have a case for a defendant that is susceptible to a motion for summary judgment, get it out of state court and into federal court, and keep it there at all costs.  Your chances of securing summary judgment are better.  Happy hunting.

“[W]e see no harm in allowing [counsel] to use a cultural reference as shorthand [in closing argument] . . .

to make the point that, in [counsel’s] opinion, [plaintiff’s] damages methodology was likely to render this jury’s verdict excessive.”  Boyle v. Christensen, 2009 UT App 241.  The Court makes it clear you should feel free to refer to iconic events or cases to assist your argument.  Here, counsel referred to the “McDonald’s” excessive verdict to sway the jury to see this plaintiff’s claims as excessive.  Get creative.  You have “considerable latitude” in closing arguments just as long as you don’t refer to “material that the jury would not be justified in considering in reaching its verdict.”

Make a Clean Exit From Utah Federal Court

Remember that when withdrawing as counsel in Utah Federal District Court that a local rule governs the process: DUCivR 83-1.4 ATTORNEYS - WITHDRAWAL OR REMOVAL OF ATTORNEY.  Please do not file a plain motion for withdrawal like you would in state court because the federal judge will likely deny it and you will be stuck (at least for a bit longer) in a case spending more time for which you will not be compensated.  Do it right the first time.

Utah Law: Law of the Case Doctrine vs. Mandate Rule

The Utah Supreme Court recently clarified a bit of Utah law that has vexed me in a number of my cases recently: when and to what degree a district court is bound by its previous decisions in a case.

In Mid-America Pipeline Co. v. Four-Four, Inc., 2009 UT 43, __ P.3d __, the Supreme Court reiterated the long-held principle that “under the law of the case doctrine, a decision made on an issue during one stage of a case is binding in successive stages of the same litigation.”  (Citing IHC Health Servs., Inc. v. D & K Mgmt., 2008 UT 36, ¶ 26, __ P.3d __).  This rule remains effective regardless whether the judge changes or remains the same.  Id. at ¶ 11.  “Law of the case does not prohibit a district court judge from revisiting a previously decided issue during the course of a case, . . . [r]ather, “the doctrine allows a court to decline to revisit issues within the same case once the court has ruled on them.”  Id. at ¶ 26 (emphasis added by Mid-America court).

The trial court may, sua sponte, revisit any previous rulings in a case.  No motion is required and the court can refuse to reconsider its previous rulings.  There are, however, three exceptions which require a court to reconsider its previous, unappealed, rulings: “‘(1) when there has been an intervening change of authority; (2) when new evidence has become available; or (3) when the court is convinced that its prior decision was clearly erroneous and would work a manifest injustice.’”  Id. at ¶ 14 (citing IHC Health Servs., Inc., 2008 UT at ¶ 34).

Another quasi-exception to the law of the case doctrine lies in the “mandate rule.”  “[A] district court’s power to reconsider decided issues is limited when the case has been appealed and remanded.”  Mid-America, 2009 UT at ¶ 13 (citing IHC Health Servs., 2008 UT 36, ¶ 27).  “The mandate rule, unlike the law of the case before a remand, binds both the district court and the parties to honor the mandate of the appellate court.”  Id. “Thus, the decisions of an appellate court become the law of the case and cannot be reconsidered on remand.”  Id.

You are now informed.  Good luck.

Remember You Can Use an Unsworn Declaration in the Place of an Affidavit

You may recall that in 2008 the Utah Legislature made it possible under Utah Code Ann. 78B-5-705 to submit an unsworn declaration whenever the Utah Rules of Criminal Procedure, Civil Procedure, or Evidence call for an affidavit.  You should use the following magical phrase to make sure the declaration meets the statute: “I declare [or certify, verify or state (pick your poison)] under criminal penalty of the State of Utah that the foregoing is true and correct.  Executed on _____ [date]. ______ [signature].”  Be careful though; just because it is not sworn does not mean it is not binding.  A person who knowingly makes a false declaration is guilty of a class B misdemeanor.

Settlement Agreements Revisited

As an update to my post on securing your settlement agreement, there is one more point to note: if you want the court to address certain issues that may depend on the existence of an admission of liability, it must be contained in the settlement agreement.  In Iron Head Construction, Inc. v. Gurney, the Utah Supreme Court reviewed a situation in which the parties settled their contract dispute but expressly agreed that pre-judgment interest would be determined by the district court.  The Supreme Court reversed an award of pre-judgment interest and the court of appeals.  Here are the highlights:

“where the settlement does not rest on a finding or contain a stipulation of liability and damages against a party, prejudgment interest is unavailable.”

“The settlement amount cannot properly be characterized as an award of damages for which prejudgment interest should be awarded.”

Add this to your arsenal.  Be very careful what you agree to in the heat of battle or negotiations.