Claims and Bad Faith Law Blog

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    **Florida Insurance Bad Faith Expert - Author's Note:  If you have reached this blog through a list that carries advertising, your computer may or may not be put at risk either through the list or through the advertising.  I do not accept or authorize any commercial advertising of any kind on any list or post.  Placing commercial advertisements with or near any of my web log posts is prohibited.  Further, I do not recommend any products or services advertised with or near any of my posts or any list of my posts.** 

   

 

"TOO SMART BY HALF": THE TRUE STORY OF FORBIDDEN CONVERSATIONS.

Judge's Gavel.  (Sun Sentinel)

We have been looking lately at four cases of Stipulated Protective Orders, each one decided on the same day two weeks ago as these words are written.

          The lesson to be learned here is that these four SPOs are not simply typical of each other; they are typical of SPOs in thousands of cases in all types of litigation in the 21st Century.

          One of the more chilling provisions that lawyers have written into their SPOs concerns what they call "SCOPE."  This is the provision in which they say how far they intend their order to reach.  In that paragraph, the lawyers have all agreed that the Protective Order they are proposing will cover any "conversations" that they may have "that reveal Protected Material."

         In some cases, such as Premier Valley Bank in the Eastern District of California, the lawyers have agreed that "Protected Material" is what they say it is; when they have written "CONFIDENTIAL--ATTORNEYS' EYES ONLY" on disclosure or discovery material, then it is protected from public view.  Premier Valley Bank, 2021 WL 1164684, ¶ 2.11, at *2.  In other cases, including in the Central District of California, recent provisions have lowered the bar for recognizing "Protected Material" to material on which the lawyers have written, simply, "CONFIDENTIAL."  E.g., Diarian, 2021 WL 1163962, ¶ 2.13, at *3; Ramos, 2021 WL 1163575, ¶ 2.14, at *2; Orellana, 2021 WL 1163234, ¶ 2.14, at *3.  In all these cases as in most SPOs if not every SPO, the lawyers prevent material from being disclosed because they say it should not be disclosed.

         This may prove to be "too clever by half," as they say.   If "conversations" about confidential material disclosed or discovered in one case are prohibited in other cases, then the lawyers who wrote these agreements seem to have prohibited themselves  from representing the same clients on the same issues in future cases.  This can have real and not simply theoretical consequences, of course.

         For example, the defendant in the Orellana case is Target.  It is reasonably foreseeable that Target will be accused in other cases -- including in future cases -- of many of the same things that Target is accused of in the pending Orellana case.  If that ever happens, then the same lawyers may be prohibited from having "conversations" necessary to defend their client, Target, in any of those cases.

         This provision has echoes of the record in a recent Nondisclosure Agreement or NDA case in the Southern District of New York.  The record in that case reflects that the political campaign that wrote the NDA in that case, also attempted to enforce it in an earlier proceeding by alleging that a former campaign employee violated the NDA "'when she and her attorneys made statements about her lawsuit ....'"  Denson v. Donald J. Trump For President, Inc., No. 20 Civ. 4737 (PGG), 2021 WL 1198666, at *6 (S.D.N.Y. March 30, 2021) (emphasis added).  The Court ruled that the threatened enforcement of this sort of contract that restricts speech, 2021 WL 1198666, at *10, was invalid and unenforceable.

         The SDNY Court's reasoning concerning a Campaign's NDA is instructive concerning SPOs which have similar secrecy provisions.  "As to the scope of the [nondisclosure] provision" in that case, "it is -- as a practical matter -- unlimited."  It was unlimited in its vagueness, 2021 WL 1198666, at *14, just as the SPOs are equally unlimited in their own vagueness.

         Further, the New York Federal Court ruled, "[w]hether the scope of the restrictions in the non-disclosure provision is reasonable must be considered in light of what the Campaign contends are the 'legitimate interests' protected by this provision."  2021 WL 1198666, at *15.  "But even with respect to those categories the terms are not defined," and people purportedly bound by the secrecy provision are left with no idea how to comply with it. 

         "The non-disclosure provision's vague, overbroad, and undefined terms also render it unduly burdensome."  In short, because the effect of these burdens "is to chill the speech" of Campaign workers "about matters of public interest, the non-disclosure provision is harmful not only to them but also to the general public."  2021 WL 1198666, at *15.

         The same could be said of the Stipulated Protective Orders' "vague, overbroad, and undefined" terms such as "Protected Material" marked as 'Confidential' or 'Confidential-Attorney's Eyes Only' by the pens of lawyers, and such as undefined "conversations" that somehow "reveal Protected Material."

         One further thought, which the Federal Judge expressed in the case in the Southern District of New York.  Even if the Court were to set aside other standards of analysis in that case, "the non-disclosure provision is unenforceable under basic principles of contract law."  2021 WL 1198666, at *16.  It is impossible for a person "to know what speech she has agreed to forego" under such provisions, so that the supposed contract simply does not exist, there being "no possibility of mutual assent."  2021 WL 1198666, at *16.

         It seems equally impossible for a person to know what kind of speech she or he has agreed to forego in the stipulations quoted in the series of articles under discussion here.  If it is impossible for a person to know what "conversations" or speech she or he has agreed to forego under such provisions, the supposed stipulation is similarly void for vagueness, ineffective as a contract and unenforceable.  Submitting such provisions to a Federal Judge or Magistrate should not turn them into gold by some judicial alchemy; unenforceable provisions do not become enforceable simply because they have been signed by a judge.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.   

TO WHOM IT MAY CONCERN: QUESTIONS ABOUT YOUR SECRECY AGREEMENTS.

There is just enough time for a few questions in this special Thursday edition of Insurance Claims and Bad Faith Blog.                                                                                                                                                                                                                                                         

1. How did it happen that so many lawyers in so many cases used the same language for their Stipulated Protective Orders?  The lawyers in these and other cases used much the same language when they drew up their Stipulated Protective Orders.  Some of that language has already been quoted in past articles posted here.

          At the moment, I have been addressing three unrelated cases from the Central District of California because they were all decided on the same day.  The lawyers in these cases all used the same or substantially similar language when they wrote and signed the proposed orders they sent to the Courts in their separate cases.

         I cannot find a Model Protective Order in the Local Rules of the Central District of California and these stipulations did not reference any.  So where did this same language come from, to which each of these lawyers had the same access?  If any readers know the answer to this question, or if any reader knows of a Model Protective Order, please let me know.  I gratefully appreciate the information in advance.

2. Who drew up these stipulations for protective orders in these cases?  In many cases it is impossible to tell who drew up the Stipulated Protective Orders that somehow find their way to Judges and Magistrates, who sign them.  In most cases, the dockets just do not reveal how these proposed orders got to there in the first place.

          In at least one of these three cases, on the other hand, the docket reveals who filed the proposed order.  Clearly, the party that files the proposed order is the party that wants it the most.  It is reasonable to assume of course that the party that wants it the most is also the party that wrote it.  In the Orellana case, it was Target, the main defendant, that filed the proposed Stipulated Protective Order.   Orellana v. Target Corp., DE 30, proposed Stipulated Protective Order (C.D. Cal. Case No. 2:20-cv-06665 SVW (KSx)). 

3. What do they mean when they say "return or destroy" any material in "any format reproducing or capturing any of the Protected Material"?  In basic terms, a "return or destroy" provision requires that a person bound by the Protective Order shall either return what all the lawyers call "Protected Material" in all these cases, or destroy it.  The Premier Valley Bank stipulation in a fourth case is typical.  The Premier Valley Bank case was also decided on March 26, 2021, but in the Eastern and not the Central District of California.  It is typical in this regard not only among the subset of what has now become four cases, but it is also typical of the SPO case law at large.

         The Premier Valley Bank stipulation contains the requirement in its "return or destroy" provision that "'all Protected Material' includes all copies, abstracts, compilations, summaries, and any other format reproducing or capturing any of the Protected Material."  Premier Valley Bank v. Nguyen, No. 1:20-CV-00900-NONE-EPG, 2021 WL 1164684, ¶ 13,  at *7 (E.D. Cal. March 26, 2021) (emphasis added).  What does this mean?  Each of the three Central District cases contains the identical language that has been quoted here.  However, none of these cases offers much if any insight into what this language means.

         In particular, the reach of this provision to "any other format" "capturing any of the Protected Material" is vague.  It is also overly broad.  A Nondisclosure Agreement purporting to keep matters from being disclosed was recently held void for vagueness and overbreadth in Denton v. Donald J. Trump for President, Inc., No. 20 Civ. 4737 (PGG), 2021 WL 1198666 (S.D.N.Y. March 30, 2021).  If the same reasoning is applied to the language quoted here, it too should be held "invalid and unenforceable" for the same reasons.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

(Image = Editing,  LexisNexis.)

THREE FROM THE C.D.: "GOOD CAUSE STATEMENT" IN ALL OF THEM.

(Editing.  Lexis/Nexis)

Continuing our look at the three cases decided by Magistrates in the Central District of California on the same day (March 26, 2021), each of the three contained orders with this same language in the lawyers' "Good Cause Statement":

This action is likely to involve ... private information for which special protection from public disclosure and from use for any purpose other than prosecution of this action is warranted.

(Italics and boldface added.)¹

          In each case, this is the opening statement of the lawyers' Good Cause Statement, their lede if these were journalists writing a report for a newspaper, presenting their Statement of Good Cause to the Judge so that she or he will enter this protective order.

          The first question that arises from this single sentence is what exactly is the "private information" the lawyers had in mind?  Presumably, the rest of their Good Cause Statement will tell you, their reader, all they want you to know.  You be the judge.  Whether what the lawyers tell you is enough for you to know what they are talking about when they say, "private information," is up to you just as it will be up to their judge.

          A second question concerns when and whether "special protection from public disclosure" is "warranted."  In the past, Courts in the Ninth Circuit where these orders were entered have struck down so-called "confidentiality" provisions based on a statement that the lawyers would only designate things as "confidential" when they had a "good faith belief" that the things were in fact confidential.

         In each of these cases decided on March 26th, "good cause" was mentioned exactly once after the title.  Lawyers who practice in Federal Court know that they can only obtain a protective order for "good cause shown" to the Federal Court.  After the title of their Good Faith Statement in these three cases, the lawyers wrote a long paragraph without ever referring to "good cause," until they reached the end.  Then they declared that they would designate information "confidential" only when they had a "good faith belief" that the information they designate "confidential" is, in fact, confidential and that there is "good cause" to seal it from public view.  The reason that the old language was rejected by the Courts in the Ninth Circuit (and by many Courts in other Circuits) is because it gave too much power to the vague "good faith beliefs" of lawyers.

          Unfortunately, this present language is not an improvement over the past.  It is nondisclosure in a new shroud.  The new suffers from the same illness as the old.

          Last but far from least is the most important thought of all behind the Stipulated Protective Order.  The lawyers declare that they all seek special protection from public disclosure in their unique cases -- so unique that the same exact words are used by every lawyer in three separate cases -- "from use for any purpose other than prosecution of this action."

          I have been involved in trials since the 1970s.  I know enough  about trials to wonder what information is EVER used exclusively for "prosecution of this action," such that you would want to bar its use "for any purpose other than prosecution of this action."  I can't think of any.  Do you think otherwise?

          The real purpose comes clear now.  The real purpose is to prevent the use of information concealed by the lawyers in one case ever to be used in any other case "other than prosecution of this action."

To be continued ....

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

¹I do not like ellipses much.  Those are the three periods (...) that indicate that what we are reading is not the full quote.  As noted, the opening words of the Good Cause Statement are substantively identical in each of the "three cases from C.D.," with a few variations on the words chosen by the different lawyers in the different cases.  Here then is the statement in full:

This action is likely to involve commercial, financial, proprietary, and/or other private information for which special protection from public disclosure and from use for any purpose other than prosecution of this action is warranted.

This or very similar language is found in Diarian, 2021 WL 1163962, at *1; Orellana, 2021 WL 1163234, at *1 (which adds the words that this action is likely to involve "trade secrets, pricing lists and other valuable research, development" and "technical"), and Ramos, 2021 WL 1163575, at *1 (which substitutes the word, "confidential," for "commercial" in the above-quoted provision).

CAN THERE BE BAD FAITH OFF-SHORING TAX LIABILITY?

 

(Photograph courtesy of NASA)

Jesse Drucker has written an informative investigative report about off-shoring activities designed to reduce tax liabilities.  Apparently, if a corporation large enough to move certain financial activities off-shore -- such as Bristol Myers in this article -- and if that corporation retains its own accountants and lawyers to give it opinions that the off-shoring activity is "legitimate," "that can protect the company from accusations that it deliberately broke the law."  (Apparently, we only know about this particular activity because reporters were able to pierce the redactions in a report which the I.R.S. posted a year ago in April, 2020 about the Bristol Myers activity which actually took place in 2012-2013.)   Jesse Drucker, Slip-up Bared Tax Trick Used by Drug Giant / Bristol Myers Disputes $1 Billion I.R.S. Bill, New York Times, Friday, April 2, 2021, at A1.

          This possibility of legalized chicanery, if you will, raised some questions about Bad Faith in my mind that went beyond what was reported here.  Is there immunity "from accusations that it deliberately broke the law" if, hypothetically, a company deliberately hires accountants and lawyers for the purpose of giving it bogus opinions so that the company can shield itself from liability?

           If there is a "bad faith" exception to this kind of immunity, what would it look like?  Barring authorities on point, resort to general principles of good faith law like the principles governing insurance companies might well provide the answers.

           In the interim, if anyone knows what provisions of statutes or regulations confer the kind of immunity at issue in the Tax Trick article, supra, please leave a Comment below or send me an EMail via my website and let me know.  I have researched them myself, including via Westlaw, and I have come up empty so far.  Thank you for any help you can give.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

PUMPING OUT PROPOSED SECRECY ORDERS, GOOD CAUSE IN HIDING.

(Image via Central District of California website)

In three cases decided on the same day, three different U.S. Magistrate Judges in the Central District of California granted three of the same Stipulated Protective Orders, without saying why.

          Each of the three Stipulated Protective Orders said the same thing, except in one case the parties added the additional words I have [bracketed] in the quotation below:

[Disclosure and discovery activity] Discovery in this action [are] is likely to involve production of confidential, proprietary, or private information for which special protection from public disclosure and from use for any purpose other than prosecuting this litigation may be warranted. Accordingly, the parties hereby stipulate to and petition the Court to entire the following Stipulated Protective Order.

          We may never know why any of these three actions actually required "special protection from public disclosure" and "from use" beyond use in the lawsuit.  Not a single one of the three proposed Stipulated Protective Orders said what the case was about.

          Neither did the Magistrate Judges say what any of the cases was about in any of these three orders.

          Each of the three Magistrate Judges said that they entered the Stipulated Protective Orders because the parties in the case showed "good cause," but we will never know what the good cause shown may have been because none of the three said in any of the three cases what was shown or by whom or when, at least before they entered their orders.

          These are the three cases:  

Diarian v. First Transit, Inc., No. 2:20-cv-02957-FMO (AFMx), 2021 WL 1163962 (C.D. Cal. March 26, 2021) (Alexander F. MacKinnon, USMJ);

Orellana v. Target Corp., No. 2:20-cv-06665 SVW(KSx), 2021 WL 1163234 (C.D. Cal. March 26, 2021) (Karen L. Stevenson, USMJ), and

Ramos v. FCA US LLC, No: 2:20-cv-10440-DMG-AGR, 2021 WL 1163575 (C.D. Cal. filed March 26, 2021) (Alicia G. Rosenberg, USMJ).

We are not done.  To be continued ....

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

"NOTICE-PREJUDICE RULE" NOT FOR CLAIMS-MADE POLICIES IN KENTUCKY.

In Darwin Nat'l Assur. Co. a/k/a Allied World Specialty Ins. Co. v. Kentucky St. Univ., ___ S.W.3d ___, No. 2019-CA-1811-MR, 2021 WL 1045716 (Ky. Ct. App. March 19, 2021) (stated not final), the Kentucky Court of Appeals faced a question of first impression.

    "The issue is whether the notice-prejudice rule applies entitling KSU to coverage under a claims-made-and-reported policy after providing notice of the claim to Allied World three days late."  Darwin, 2021 WL 1045716, at *1.  "KSU" is short for Kentucky State University, which is the policyholder in this case.

    Darwin a/k/a Allied World issued a "claims-made-and-reported" professional liability policy to KSU.  After a time, KSU was confronted with claims of wrongful discharge and intentional infliction of emotional distress.  Darwin, 2021 WL 1045716, at *1. 

   
(Blizzard; Image courtesy of NASA)

Darwin-Allied contended that KSU reported the claims late under the policy;

 

(Florida; Image courtesy of Dennis J. Wall)

KSU contended that Darwin-Allied had to prove that it was prejudiced by the allegedly late notice, and KSU argued that the carrier was not prejudiced.

    To resolve this open question in Kentucky, the Court of Appeals turned to among other sources the Restatement of Liability Insurance (Am. Law Inst. 2019) and concluded that KSU failed to satisfy the "claims-reporting condition of the policy" after consulting the Restatement.  Darwin, 2021 WL 1045716, at *5. 

    Further, on the facts including the parties' negotiations surrounding the insurance policy at issue in this case, the Court rejected "application of the notice-prejudice rule to claims-made policies."  Darwin, 2021 WL 1045716, at *6.

    Open questions make new law, one way or another; sometimes broad questions depend for their resolution on the facts of particular cases and policies.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved. 

HOW ESTOPPEL LIVES IN TEXAS IN THE 21st CENTURY.

Editing.  (LexisNexis)

"It is well established that as an equitable doctrine, estoppel requires that one who comes into equity must come with clean hands. If not, the doors of equity are closed to one tainted with inequitableness or bad faith relative to the matter in which he seeks relief, however improper the behavior of the other party may have been."   Nasser v. Fin. of Am. Reverse LLC, NO. 4:18-CV-4695, 2021 WL 966007, at *3 (S.D. Tex. March 15, 2021) (emphasis added).

           That said, the federal judge denied a motion to strike a new or amended complaint because of the strange and convoluted history of amendments and complaints and orders involved in that case.  The denial was without prejudice and the judge specifically wrote that if the motion was brought up again, it could be ruled on at trial.

           Unresolved intimations of bad faith in the eyes of that judge, it seems.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

IT MIGHT ABUSE DISCRETION, BUT HAPPY ST. PATRICK'S DAY ANYWAY!

 

(Photo by Dennis Wall)

"The district court abused its discretion in permitting Defendants and the DEA to file their pleadings under seal."  In re:  Nat'l Prescrip. Opiate Litig. (HD Media Co. v. U.S. Dep't of Justice), 927 F.3d 919, 939 (6th Cir. June 20, 2019).

           The appellate panel followed this reasoning tree. First, there is a distinction in the Sixth Circuit (as in many courts) "between secrecy in the context of discovery," which is subject to a "good cause" showing, "and secrecy in the context of adjudication, which is generally impermissible due to the 'strong presumption of openness' of court records."  In re:  Nat'l Prescrip. Opiate Litig., 927 F.3d at 938-39 (emphasis added).  The line of demarcation between discovery and adjudication is crossed when the material in question is put in the court file.  At that point, the public presumptively has access to it.  See In re:  Nat'l Prescrip. Opiate Litig., 927 F.3d at 939.

           This "strong presumption in favor of openness" can be overcome and documents can be sealed from public view when, first, the party seeking to seal the information shows a compelling reason to seal them and, second, the seal is "'narrowly tailored to serve that reason.'"  In re:  Nat'l Prescrip. Opiate Litig., 927 F.3d at 939 (citations omitted).

           This case dealt with the issue of sealing or redacting "pleadings, briefs, or other documents that the parties have filed with the court, as well as any reports or exhibits that accompanied those filings[.]"  In other words, it was not merely the sealing of "pleadings and briefs" filed in the court file that was at issue in this case.  Also at issue was the sealing of "any reports or exhibits" attached to them and therefore also "filed with the court[.]"  These are all "the sort of records" subject to the presumption of public access and therefore subject to the compelling-reasons-and-narrowly-tailored standard before such records may be sealed away from public view.  See In re:  Nat'l Prescrip. Opiate Litig., 927 F.3d at 939.

           In this case, these documents also merited a further, stronger presumption "in favor of openness, ... given the paramount importance of the litigation's subject matter."  In re:  Nat'l Prescrip. Opiate Litig., 927 F.3d at 939.

            Following this reasoning tree to the end, a two-judge majority on the appellate panel held that "[t]he district court abused its discretion in permitting Defendants and the DEA to file their pleadings under seal."  In re:  Nat'l Prescrip. Opiate Litig., 927 F.3d at 939.

The panel's ruling has never been appealed.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

NO COVERAGE, NO BAD FAITH MEANT SEVERANCE IN THIS CASE.

The usual rule is no coverage, no bad faith.  That can mean severance for the insurance carrier where there are multiple coverage and bad faith claims in the same case against it.    See, e.g., Optical Works & Logistics, LLC v. Sent inel Ins. Co., No. 15-163-JJM-LDA, 2021 WL 928275, at *3 (D.R.I. March 11, 2021) ("The Court notes the well-established practice of severing a bad faith claim from a breach of contract claim because a defendant cannot be liable for bad faith if it did not breach the contract.  [Citations omitted.]  So, the Court bifurcates these two claims and orders a separate trial of the breach of contract claim, which will be heard first and then, if the jury finds Hartford liable for breach, the trial on the bad faith claim will take place.").

Please read the disclaimer.  ©2021 Dennis J. Wall. All rights reserved.

FLORIDA CIVIL REMEDY NOTICE OBSCURES ADVANCED PAYMENT, BARS BAD FAITH.

(Gridview_imagefull / Florida Department of Agriculture and Consumer Services)

The Fourth District Court of Appeal affirmed dismissal with prejudice of a policyholder's bad faith claim against his homeowner's carrier in Julien v. United Prop. & Cas. Ins. Co., ___ So. 3d ___, No. 4D19-2763, 2021 WL 824438 (Fla. 4th DCA March 3, 2021).

           On the facts, the appellate court pointed out that the carrier advanced payment to the policyholder while the carrier's investigation of his fire claim was pending.  The carrier also put him up in a hotel during that time.   Julien, 2021 WL 824438, at *1.  

           These facts did not determine the appellate court's holding in this case, however.  Its holding that a bad faith claim was not available under Florida law in that case was based instead on the quality of the policyholder's Civil Remedy Notice:

    Julien's civil remedy notice, it seems, listed every statutory provision and every policy provision available to him as the insured. For example, Julien included fourteen statutory provisions followed by twenty-one sections of the Florida Administrative Code. Furthermore, as the “specific policy language” relevant to the violation, Julien referenced the entire policy[.]

Julien, 2021 WL 824438, at *3.

           This behavior ran afoul of the Florida statute that authorizes bad faith actions against first-party insurers like Mr. Julien's homeowner's carrier in this case.  The Florida bad faith statute requires specificity of what was violated, in the Civil Remedy Notice that accuses the carrier of misconduct.  In this case, the CRN was woefully inadequate in the eyes of both the appellate court and the trial judge:

    Here, Julien did not substantially comply with the specificity standard and this was more than a mere technical defect. Julien listed nearly all policy sections and cited thirty-five statutory provisions. As a result, we conclude the circuit court correctly determined that Julien failed to satisfy the requirement that the insured identify the specific statute and specific policy provision relevant to Universal Property's alleged violation.

Julien, 2021 WL 824438, at *3.  Although the Florida appellate panel in this case issued this substitute opinion in March 2021 to supersede and replace the opinion it released in September 2020, the result did not change.  The panel affirmed the trial court's dismissal of Mr. Julien's statutory bad faith claim with prejudice, and denied his motion to certify a question of great public importance to the Florida Supreme Court for resolution.

           As seen by the Florida appellate panel in this case, the answer to the question was already clear to Florida lawyers and judges, and to the Florida public.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

PRESUMPTION OF PUBLIC ACCESS, BUT NO REVERSAL IN FIFTH CIRCUIT.

(Photo © Dennis J. Wall)

Of all Federal Courts, one of the ones you might least expect to uphold the presumption of public access to court records is the Fifth Circuit Court of Appeals.  Yet that is exactly what they have done.

           In what the Court itself described as a "run-of-the-mill case," a unanimous panel chose to identify the differences among a protective order, a stipulated protective order, and sealing evidence.  The entire opinion is worth reading. 

           Here is the reason for decision:

    Judicial records belong to the American people; they are public, not private, documents. Certainly, some cases involve sensitive information that, if disclosed, could endanger lives or threaten national security. But increasingly, courts are sealing documents in run-of-the-mill cases where the parties simply prefer to keep things under wraps.

    This is such a case. The secrecy is consensual, and neither party frets that 73 percent of the record is sealed. But we do, for three reasons. First, courts are duty-bound to protect public access to judicial proceedings and records. Second, that duty is easy to overlook in stipulated sealings like this one, where the parties agree, the busy district court accommodates, and nobody is left in the courtroom to question whether the decision satisfied the substantive requirements. Third, this case is not unique, but consistent with the growing practice of parties agreeing to private discovery and presuming that whatever satisfies the lenient protective-order standard will necessarily satisfy the stringent sealing-order standard.

Hoa Le v. Exeter Fin. Corp., ___ F.3d ___, No. 20-10377, 2021 WL 838266, at *5 (5th Cir. March 5, 2021).

           After losing its head in this rousing tribute to public access, the Fifth Circuit panel returned to its normal and affirmed a summary judgment for the defendant.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

HEARING WITHOUT FORM, SEALING WITHOUT GOOD CAUSE SHOWN.

Courtroom (Pacific Standard)

In Hunter v. Booz Allen Hamilton, Inc., No. 2:19-cv-411, 2021 WL 790208 (S.D. Ohio March 2, 2021) (Vascura, USMJ), a U.S. Magistrate Judge held an "informal" conference during which she formally ruled.

    The plaintiffs in the case requested an "informal" conference to resolve their dispute with the defendants over the defendants' response to production requests.  Hunter, 2021 WL 790208, at *2.   They got their wish.  The Magistrate Judge held the conference and resolved the dispute by ruling that the Defendants need not supplement their production.  She repeated this ruling in a written opinion issued by the Court.  Hunter, 2021 WL 790208, at *2.     

    After issuing a formal ruling at an "informal" conference in Court, and confirming it in writing, the Magistrate Judge officially issued another ruling that the Clerk of Court should mark "SEALED" all the documents that the parties submitted during the conference and that the parties had marked "Confidential" or "Highly Confidential."  Hunter, 2021 WL 790208, at *4.   That was enough for the Magistrate.  There was no other "good cause" shown for sealing the documents.

   Federal Rules of Civil Procedure 5.2(e) and 26(c)(1) both require a showing of good cause before documents and other evidence can be sealed by a Federal Judge or Magistrate Judge.  With the exception of Hunter v. Booz Allen Hamilton, Inc., of course.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

CYBERSECURITY TIPS FOR NATIONAL CONSUMER PROTECTION WEEK!

Notebook Workplace Desk (Courtesy of Free Photos)

During this National Consumer Protection Week, the U.S. Cybersecurity and Infrastructure Security Agency (CISA) encourages consumers to review the Federal Trade Commission's NCPW resource page and review the CISA tips, among others, you will find there

https://us-cert.cisa.gov/ncas/current-activity/2020/02/28/national-consumer-protection-week

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

IT'S NATIONAL CONSUMER PROTECTION WEEK!

Consumer Rights and Responsibilities (Gridview_imagefull  / Florida Department of Agriculture and Consumer Services)

Check out National Consumer Protection Week events by copying and pasting this link into your browser:  https://uspirgedfund.org/blogs/blog/usp/national-consumer-protection-week-2021:

Mon    Report on CFPB.

Tues    ID theft and fraud

Wed    Filing taxes

Thurs   Robocalls

Fri       Auto loans

Sat      Price gouging

U.S. PIRG Education Fund identifies as an independent, nonpartisan 501(c)(3) organization.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

GIVING SHAPE TO SHAPE-SHIFTING STIPULATED PROTECTIVE ORDERS: GOOD CAUSE.

Editing.  (LexisNexis)

"The parties must provide the requisite good cause, which is missing from their pending motions."  Thus did the Court succinctly summarize its ruling in Ramos v. Continental Auto. Sys's, Inc., No. 18-1900-pp, 2020 WL 8617482, at *1 (E.D. Wis. Sept. 3, 2020). 

    In the eyes of the Federal judge in that case, the parties and their lawyers showed no more good cause than their agreement to keep various things "confidential."  This by itself was not good cause, the Court ruled:

    The court acknowledges that the parties have stipulated that they will maintain the confidentiality of certain documents. Paragraph 8 of their stipulated protective order states that all confidential information that is filed with the court must be filed in an envelope marked sealed and such information shall be kept under seal until further order of the court. Dkt. No. 19 at 5; Dkt. No. 20. However, this court requires that the parties comply with General Local Rule 79(d) and Seventh Circuit case law, providing good cause for the requested relief.

Ramos, 2020 WL 8617482, at *1.

     The requirement of good cause determined the outcome.  In moving to seal certain documents, the party requesting confidentiality did not show good cause at that time.  The lack of good cause took the vitality out of that request.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

"DON'T LET THE DOOR HIT YOU ON THE WAY OUT":

 SUA SPONTE REMAND OF UM BAD FAITH CASE.

GEICO General Insurance Company removed a case from Florida State Circuit Court to U.S. District Court on February 5, 2021.

           On February 9, the District Judge issued basically a "show cause" Order (unwritten, known in the Middle District of Florida as an "Endorsed Order") why the case should not be remanded, the requisite jurisdictional amount not appearing from the file.  The Federal Judge acted on her own motion.

           GEICO General responded on the last day given by the Federal Judge to show a jurisdictional basis for the case being in Federal Court.  That was February 16, one week to the day as it turns out, from the date that the District Judge issued the "show cause" Order.

           Seventeen days after GEICO General Insurance Company filed the removal papers, this case was remanded.  Rocha v. GEICO Gen. Ins. Co., No 8:21-cv-291-VMC-AEP, 2021 WL 672701 (M.D. Fla. February 22, 2021).

           The Federal Judge did not say so, but a review of PACER (Public Access to [Federal] Court Electronic Records) reveals that this was an Uninsured Motorist case in two counts, one count for insurance coverage and the other count for alleged insurer bad faith.  Rocha v. GEICO General Insurance Co., Complaint, Doc. No. 1-1 (Exhibit 1 to GEICO's Notice of Removal), filed Feb. 5, 2021 (M.D. Fla. Case No. 8:21-cv-291-VMC-AEP).

           The complaint did not allege a sum certain for the plaintiff's alleged damages.  Not surprisingly, the plaintiff alleged only the jurisdictional amount in Florida Circuit Court where he filed his lawsuit in the first place, $30,000.00.  GEICO argued this deficiency was made up by the plaintiff's demand for $100,000.00 policy limits, by his Civil Remedy Notice of Insurer Violation that the case "was clearly worth" more than the $100,000.00 policy limits, and by his allegation of a "permanent injury."

           The demand was legally insufficient to support federal jurisdiction in an amount in excess of $75,000.00 exclusive of interest and costs because "demand letters do not automatically establish the amount in controversy."  Rocha, 2021 WL 672701, at *2.

           The Court looked for "additional factual support."  It did not find additional factual support in the plaintiff's Civil Remedy Notice required by Florida's bad faith statute.  In Florida, the CRN is merely a condition precedent to suing for bad faith later.   Rocha, 2021 WL 672701, at *2.

           That left the possibility that there was additional factual support in this record that the plaintiff's damages established an amount in controversy in excess of $75,000.00.  The District Judge did not find additional factual support in what the record showed about the plaintiff's damages, either.  "The only concrete damages incurred fall below $37,000, and no information has been provided to reasonably calculate other categories of damages."  Rocha, 2021 WL 672701, at *2.

           The amount in controversy not having been established in this case, the Federal Court found that it lacked subject-matter jurisdiction and remanded the case back to Florida State Court.

           The Federal judge did not mention the insurer bad faith claim one time.  The only time that the Court mentioned "bad faith" at all was in a parenthetical quoted from another case that CRN's "'are precursors to bad-faith-failure-to-settle claims that may be brought against an insurer in the future.'"  Rocha, 2021 WL 672701, at *2 (citation omitted).  That was all.

           Clearly, claims of insurer bad faith do not command the attention of judges regardless of everything else.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

NO SECRETS ON GEORGE WASHINGTON'S BIRTHDAY & NEVER IN SIXTH CIRCUIT.

George Washington Statue (University of Washington)

In Sweeney v. Nationwide Mut. Ins. Co., No. 2:20-cv-1569, 2020 WL 8265654 (S.D. Ohio Oct. 6, 2020), a United States Magistrate Judge applied settled Sixth Circuit case law and denied permission to file an Amended Class Action Complaint in secret and under seal.

    The excuse offered by the parties in that case was that they had agreed to keep things a secret that showed up in the amended complaint.  "The parties’ agreement to maintain confidentiality, standing alone, does not constitute a compelling reason for filing under seal."  Sweeney, 2020 WL 8265654, at *1.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

NO COVERAGE CLAIM, NO BAD FAITH CLAIM.

EMPTY JURY BOX (Brennan Linsley / Associated Press)

In many cases in many Courts across the nation, the argument has taken hold that if there is no coverage claim, there is no bad faith claim.  The main exception has been statutory unfair claims handling practices claims which can exist independent of the common law.

    "Similarly, Pennsylvania courts have held that if the insurer properly denied a claim, the policyholder is unable to state a bad faith claim."  Kahn v. Pa. Nat'l Mut. Cas. Ins. Co., No. 1:20-cv-781, 2021 U.S. Dist. LEXIS 23090, at *11 n.5 (M.D. Pa. February 8, 2021).

The issues of "no coverage claim, no bad faith claim" and statutory exceptions, are discussed at length in Volume 1, DENNIS J. WALL, LITIGATION IN PREVENTION OF INSURER BAD FAITH § 3:28 (Third-Party Cases) and in Volume 2, id. §§ 9:1, 9:14 (First-Party Cases) (Thomson Reuters West 3d ed. & 2021 Supplements in process).

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

CLAIMING GOOD FAITH TO AMEND NO GOOD IN THIS CASE.

(Gridview_imagefull / Florida Department of Agriculture & Consumer Services)

The plaintiff in an insurance bad-faith case sought "to add an additional breach of fiduciary duty theory under her existing Count I, a common law claim for intentional infliction of emotional distress (“IIED”), and a prayer for punitive damages."  Bertels v. Farm Bureau Prop. & Cas. Ins. Co., No. 20-2298-JWB-ADM, 2021 WL 533827, at *1 (D. Kan. February 12, 2021) (USMJ).

           Writing that she proposed her amendment  in "good faith," the plaintiff based her proposed amendment on deposition testimony.   The Case Management Scheduling Order set a deadline for amendments on October 9 but set a discovery cutoff months later on February 5, 2021.   Federal Rule of Civil Procedure 11 provides a basis for amendment if there is evidence to support it or it is likely that the evidence will support amendment after a reasonable opportunity in the future.  But as the Magistrate Judge pointed out in this case, the depositions were already taken two months earlier, in November.  Bertels, 2021 WL 533827, at *4.

           Another crucial date was set by the plaintiff herself:  She did not file a motion for leave to amend based on the November depositions until January 29, 2021.  This did not meet the Court's definition of "good cause" for seeking amendment at this late date under Federal Rule of Civil Procedure 16.  Bertels, 2021 WL 533827, at *1.

            Further, said the Court, the plaintiff "has not shown diligence by waiting two months to move to amend after she learned of the information she says gives rise to the amendments."  Bertels, 2021 WL 533827, at *4.

           Moreover, it is noteworthy that the plaintiff already pleaded claims in this case of breach of fiduciary duty, along with her claims of bad faith, negligence, and breach of contract.  Bertels, 2021 WL 533827, at *2.  Her existing alleged claims were more than noteworthy; their existence was determinative of the outcome along with the passage of deadlines in the eyes of the Court in this particular case.

           The Court ruled that the plaintiff sought to allege some new legal theories based on the same facts.  The facts were already known.  That is why the plaintiff alleged her claims in the first place.  The Magistrate Judge accordingly denied the plaintiff's January 29 motion for leave to amend her insurer bad-faith complaint in this case.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

THIS FEDERAL JUDGE GAVE A DAMN.

 

(Thomson Reuters West via LinkedIn)

PUBLIC ALLOWED TO ACCESS TESTIMONY ABOUT MEDICAL IMPLANTS THAT ALLEGEDLY MAIM AND KILL.

"This multidistrict litigation proceeding ('MDL') involves personal injury cases brought against Defendants C. R. Bard, Inc. and Bard Peripheral Vascular, Inc. (collectively, “Bard”). Bard manufactures and markets medical devices, including inferior vena cava ('IVC') filters. The MDL Plaintiffs have received implants of Bard IVC filters and claim they are defective and have caused Plaintiffs to suffer serious injury or death."  In re:  Bard IVC Filters Prod's Liab. Litig., No. MDL 15-02641-PHX-DGC, 2021 WL 462592, at *1  (D. Ariz. MDL Case No. 15-02641-PHX-DGC Feb. 9, 2021).

           The Court explained what an IVC filter is made to do:  "The IVC is a large vein that returns blood to the heart from the lower body. An IVC filter is a small device implanted in the IVC to catch blood clots before they reach the heart and lungs."  Bard IVC Filters, 2021 WL 462592, at *2.

           The Court also summarized the plaintiffs' claims as a result of allegedly suffering "serious injury or death" from their use of the defendants' IVC filters:

           The MDL Plaintiffs allege that Bard filters are more dangerous than other IVC filters because they have higher risks of tilting, perforating the IVC, or fracturing and migrating to vital organs. Plaintiffs further allege that Bard failed to warn patients and physicians about these higher risks.

Bard IVC Filters, 2021 WL 462592, at *3. 

           The defendants defended on many grounds not pertinent to this particular article.  What is pertinent are the defendants' claims that voluminous deposition testimony should not be made available to the public, nor should the public see reams of documents, all introduced at trial.

           In this case, the Court disagreed.  The Court attached an Exhibit to the Order cited above listing the testimony and exhibits that were introduced into evidence at a bellwether trial in this Multi-District Litigation, and that the Court held accessible by the public despite the parties' Stipulated Protective Order and despite the defendants' claims of confidentiality.

           This Court's landmark ruling and detailed list of dozens of depositions and multiple Trial Exhibits can be found here:  In re:  Bard IVC Filters Prod's Liab. Litig., Doc. No. 21727-2, Court's List of Publicly Accessible Trial Testimony and Exhibits, Filed Nov. 13, 2020 (D. Ariz. MDL Case No. 15-02641-PHX-DGC), Download In re Bard IVC Filters Prods Liab. Litig. Doc. No. 21727-2 Court's List of Publicly Accessible Trial Testimony and Exhibits at a Bellwether Trial Not Confidential Filed Nov. 13 2020 (D. Ariz. MDL Case No. 15.02641.PHX.DGC).

           The Court's treatment of these arguments is noteworthy for several reasons, among them that an ancillary purpose of an MDL, not the main purpose certainly but nonetheless in the reported cases a side-effect if you will, is to shield from public view allegedly harmful behavior on a massive scale.

Another reason is the time it must have taken and the resources that were required to address these issues and compile this list in massive litigation like this.

           This federal judge clearly gave a damn.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

ASKING LIFE INSURANCE COMPANIES FOR GOOD FAITH IN A PANDEMIC.

(Image via Consumer Federation of America)

There is a reported contagion spreading throughout Europe.  It is not the coronavirus itself, but it is a phenomenon directly related to Covid.  It is the reported behavior of some life insurance companies delaying or denying people life insurance coverage based on their having contracted Covid or on being suspected in some way of having contracted Covid.

    In the United States, more than 25 million people have tested positive for the coronavirus as of this writing.   In the face of these developments, the Consumer Federation of America has not waited for the disease of denials to spread to the United States.

    The CFA has issued a letter to the National Association of Insurance Commissioners calling for a new model rule.  Faced with the contagion spreading from Europe in which life insurance companies have denied claims and applications from people with Covid-related issues, the CFA is urging reasonable behavior from life insurers in the United States.

    “We understand reasonable precautions are needed, but to harm COVID patients and their families again is unacceptable. State regulators need to step in and issue a rule to protect consumers from arbitrary insurance company practices. Transparency and reasonableness in underwriting must be the standard,” said J. Robert Hunter, CFA’s Director of Insurance and former Texas Insurance Commissioner, who is quoted by the CFA in its press release.   Press release, Recovered COVID-19 Patients Facing New Life Insurance Hurdles in Europe, Protections Needed for American Consumers /

CFA Urges the National Association of Insurance Commissioners to Adopt Model Rule for Life Underwriters Denying Coverage to Applicants Who Had COVID-19; Group Calls on Insurers to Take Voluntary Action (February 1, 2021), https://consumerfed.org/press_release/recovered-covid-19-patients-facing-new-life-insurance-hurdles-in-europe-protections-needed-for-american-consumers/.

     In issuing its request for a rule of reasonableness, the Consumer Federation of America is essentially asking that life insurance companies in the United States act in good faith.  Dealing fairly with applicants and policyholders is the essence of good faith -- and the surest way to avoid the dreaded extracontractual risk of lawsuits for "bad faith."

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

"MATCHING" REQUIREMENTS FOR REPLACEMENT PARTS: FLORIDA STATUTE, INSURANCE POLICY.

 

(Image courtesy of NASA)

In SFR Serv's, LLC v. Lexington Ins. Co., No: 2:19-cv-229-FtM-29NPM, 2021 WL 322367 (M.D. Fla. February 1, 2021), the Court addressed many motions in limine.  The Court's rulings on one of them is addressed here:  the insurance carrier's motion in limine to prevent evidence and argument on the issue of matching replacement roof tiles on damaged property.

    The Court's opinion was written for the benefit of the lawyers and the parties in that particular case because so many details come clear only from reading the parties' filings on the electronic docket known as PACER or "Public Access to [Federal] Court Electronic Records," and not from reading the decision alone. 

    The plaintiff in this case is a roofing company.  It contracted with a condominium association to repair roofs that were damaged during Hurricane Irma.  The association gave the roofer an Assignment of Insurance Benefits.

    The roofing company asked the carrier to pay for the cost of replacing roof tiles, in pertinent part.  In pertinent part, the carrier refused to pay.  The roofer sued the carrier.  Its complaint was originally filed in Florida Circuit Court, and was then removed to U.S. District Court by the carrier.

    The complaint may seem to be bare-bones upon review on PACER, but it was good enough to withstand the carrier's motion to dismiss in federal court.  Obviously, the complaint in this case contained all the allegations for claims upon which relief can be granted.  However, the controversy over replacement roof tiles is not alleged in the complaint.  To understand that controversy, we need to turn to the Federal Judge's February 1, 2021 opinion.

    The carrier "seeks to preclude," first, "any evidence, testimony and comment regarding the Florida 'matching' statute, Florida Statutes § 626.9744."  SFR Services, 2021 WL 322367, at *1.  Section 626.9744, as quoted by the Court in this case, provides in part pertinent to the Court's holding:

Unless otherwise provided by the policy, when a homeowner's insurance policy provides for the adjustment and settlement of first-party losses based on repair or replacement cost, the following requirements apply:

...

(2) When a loss requires replacement of items and the replaced items do not match in quality, color, or size, the insurer shall make reasonable repairs or replacement of items in adjoining areas. In determining the extent of the repairs or replacement of items in adjoining areas, the insurer may consider the cost of repairing or replacing the undamaged portions of the property, the degree of uniformity that can be achieved without such cost, the remaining useful life of the undamaged portion, and other relevant factors.

 

SFR Services, 2021 WL 322367, at *1.  To summarize what has just been quoted, the features of the Florida statute that the Court saw as pertinent to this case by quoting this language from the statute, were:

• The statute applies by its terms to "a homeowner's insurance policy."
• The statute applies to the "adjustment and settlement of first-party losses based on repair or replacement cost."
• When "the replaced items do not match" in important respects, then the carrier must take certain actions specified in the statute.

The Court quickly held that Section 626.9744 simply did not apply to the carrier in this case:  "The Policy at issue is a commercial policy, not a homeowner's policy....  Therefore, this statute does not apply to Lexington in this case, and this portion of the motion in limine is GRANTED."  SFR Services,  2021 WL 322367, at *1 (boldface by the Court).

    The question of excluding "evidence or argument concerning an alleged requirement to 'match' under the insurance policy at issue" was a different story, however.  The Court denied the carrier's motion and allowed the plaintiff "to present evidence and argument that the Policy requires 'like kind and quality,' which includes matching tiles."  SFR Services,  2021 WL 322367, at *2.

    The insurance policy at issue in the SFR Services case provided the carrier "with the option of repairing, rebuilding or replacing the damaged property 'with other property of like kind and quality....'"  On the basis of this policy language, then, the carrier's motion to exclude all evidence and argument that the policy requires "matching tiles," was quite simply denied.  "It is up to a jury to decide" whether the carrier's argument that the "non-matching tiles" it proposed to use to repair the condominium roofs damaged by Hurricane Irma constituted property "'of like kind and quality'."   SFR Services,  2021 WL 322367, at *2.

    There you have the twin rulings of the SFR Services Court.  They do not match, but they addressed two different things.  One was a statute.  The other was an insurance policy.  In this case, the insurance statute did not govern the insurance policy;  it didn't even apply to it.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

DEPOSING THE CORPORATE REP IN 2021.

(Free Photos)

A new article explores the ways and means of deposing corporate representatives in 2021, by Tiffany Ward and Jessica Kennedy, titled A REVIEW OF THE 2020 AMENDMENT TO RULE 30(B)(6): A GUIDE FOR PRACTITIONERS ON HOW TO APPROACH THE NEW CORPORATE DEPOSITION PROCESS, 95 Fla. Bar. J. 42 (Jan/Feb 2021).

This is a useful and informative review of the new Federal Rule.  States can be expected to follow the Federal lead soon so this article is also timely on the subject of deposing representatives of a corporate party in litigation filed potentially anywhere in the U.S.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

 

FLORIDA COURT PROTECTED COVID RENTERS AND OWNERS FROM FORECLOSURE...

... IN 2017.

 

Sign Asking For Help Turning Covid ICU Patient (Marcus Yarn/Los Angeles Times)

Case law from Florida's Fifth District Court of Appeal shows a simple way to protect renters, homeowners and landlords from evictions and foreclosures, respectively, because of Covid.

    Here it is.  First the way, then the case law.  Congress should enable federal agencies to issue regulations conditioning evictions and foreclosures on the Coronavirus Pandemic.  Even more precisely, authorized federal agencies should issue regulations governing mortgage servicing for the duration of the Pandemic, including many possible provisions from outright bans on foreclosure to specified conditions precedent designed to protect renters and owners including if the owners are landlords who have mortgages on the properties they rent.

    This assumes that Congress has not already authorized federal administrative agencies to issue regulations regulating, restricting, defining and otherwise conditioning mortgage servicing activities specifically because of Covid.  Congress may have already done so.  Let the authorized regulations begin.

    In 2017 in the case of DeLong v. Lakeview Loan Servicing, LLC, 222 So. 3d 662 (Fla. 5th DCA 2017), Florida's Fifth District Court of Appeal showed the way to protect renters and owners from Covid evictions and foreclosures today.

    Robert DeLong executed a promissory note and mortgage which recited that Mr. DeLong's loan was "guaranteed and insured" by Veterans Affairs.

    The documents "specifically incorporate into their terms certain federal regulations issued" under federal law.  In particular, they apparently incorporated regulations governing "Service procedures for holders."  DeLong, 222 So. 3d at 662-63.

    By the time that Lakeview foreclosed on Mr. DeLong, it was the holder of his note and mortgage and so it was bound by the regulations incorporated by reference in the note and mortgage.

    Lakeview lost the appeal because it did not comply with the Federal servicing regulations when it tried to foreclose on Robert DeLong.   Robert DeLong was protected from foreclosure in that case.

    In a similar way, evictions and foreclosures can be regulated, restricted and even prevented for a period of time or for the duration of the Coronavirus Pandemic, if regulations are simply authorized, issued, and incorporated by reference in the notes and mortgages documenting loans for buying land in America during the Pandemic.

    There is the way, and there is the case law.  To say again, let the authorized regulations begin.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

NORTH CAROLINA FILED RATE DOCTRINE RECOGNIZED AS FEDERAL FRD.

Insurance Policy for Slave, Warwick

(New York Public Library Digital Collection)

In DiCesare v. Charlotte-Mecklenburg Hosp. Auth., No. 156A17-2, 852 S.E.2d 146, 153 (N.C. December 18, 2020), the Supreme Court of North Carolina recognized that it had previously adopted the federal filed rate doctrine in an earlier case, N.C. Steel, Inc. v. Nat'l Council on Comp. Ins., 347 N.C. 627, 632,  496 S.E.2d 369, 372 (1998).

National Council on Compensation Insurance was an insurance case.  Insurance is regulated by the States, not the federal government.  North Carolina changed that a bit in 1998 and reaffirmed its 22-year-old decision on December 18, 2020.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

CHALLENGING CONFIDENTIALITY OF "CONFIDENTIAL" DESIGNATIONS: FOUR RULES TO LIVE BY.

 

(Image by NASA)

 

Lawyers tend to write broadly when they write stipulations for protective orders.  They give themselves powers to designate evidence "Confidential" and "Highly Confidential -- Outside Attorneys' Eyes Only."  This is what they did in their stipulated protective order in the case of Edwards Vacuum, LLC v. Hoffman Instr. Supply, Inc. d/b/a His Innov's Grp., No. 3:20-cv-1681-AC, 2021 WL 186932 (D. Or. January 19, 2021).

Except that in that case the lawyers' powers were challenged.  Well, more precisely, some of the powers exercised by some of the lawyers were challenged.

The plaintiff's attorneys designated a lot of deposition testimony either as "Confidential" or as "Highly Confidential."  The defendants challenged these designations with a "Motion to Compel De-Designation of Certain Deposition Testimony."   The defendants' motion was granted in part and denied in part, but the lesson that this case holds lies much more in the way in which the Court reached its decision, than in the decision in this particular case.

"Four legal principles are particularly relevant to Defendants' motion to de-designate, or redesignate, the confidentiality restrictions under the Protective Order of certain deposition testimony of Plaintiff's witnesses."  Edwards Vacuum, 2021 WL 186932, at *1.

Transcribed into a numbered list, here are the four legal principles which this Court applied when one set of lawyers requested relabeling the "Confidential" and "Highly Confidential" designations that another set of lawyers had  placed on deposition testimony:

    1.    The first legal principle, said the Court, was "'well-established,'" which it is at least in the Ninth Circuit where this District Court sits. That is the legal principle that discovery is "'presumptively public'" unless and until a Court has ordered otherwise.  Edwards Vacuum, 2021 WL 186932, at *1.

    2.    "Second, a party's confidentiality designations must be reasonably and narrowly tailored to protect the confidential information the party seeks to shield from further disclosure. In other words, an 'across-the-board' designation is improper, even if some confidential information may be found within the broader designation. As several district courts have explained, a party misuses a protective order when it over-designates discovery materials in that way."  Edwards Vacuum, 2021 WL 186932, at *2.

       3.    "Third," the parties' stipulation for a protective order was written by the lawyers and not by the judge. A stipulated protective order is not dispositive of the outcome even when a stipulation written by the lawyers is accepted by the Court for an order.  In other words, "the fact that the parties may have stipulated to a protective order is not itself a basis for sealing or otherwise restricting access to any specific discovery material."  Edwards Vacuum, 2021 WL 186932, at *2.

    4.    "Finally," said the Court, numerous decisions have established that "'mere embarrassment'" is not enough. Good cause for a protective order requires much more.  If embarrassment is involved, then the embarrassment must "'be particularly serious or substantial'" in order to demonstrate good cause for a judge to enter a protective order.  Edwards Vacuum, 2021 WL 186932, at *2.

The District Judge in this case applied these four legal principles to the deposition testimony which had been designated "Confidential" or "Highly Confidential" by one set of attorneys in the case.  The judge took unusual pains to review and report his rulings on what must have been several hundreds of pages of testimony from four witnesses.  See Edwards Vacuum, 2021 WL 186932, at *4-6.

The extraordinary effort by the District Judge in this case is worthy of attention and, more than that, worthy of high praise.  But the lesson of this case is not in the decision itself, as was said earlier.

The lesson of this case is in the Court's summary of four mandates, four "legal principles," required by the case law of any stipulated protective order submitted by the lawyers in any case.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

ONCE SECRET, ALWAYS SECRET? MAYBE, IF IT'S A STIPULATED ORDER.

 

A physician named Jalowsky was represented in an insurance bad faith case by lawyers who had received discovery in an earlier case from the current defendants, the Unum Group of insurance companies.

Dr. Jalowsky "intends to issue" a subpoena for the information from his own attorneys.  However, the attorneys had received the information subject to a protective order, apparently a stipulated protective order, in the earlier litigation.

The order provided that the information could only be used in the earlier case.  It is common for stipulated orders to have an "only-in-this-case" limitation on the use of evidence.

After discovery closed in the bad faith case, Dr. Jalowsky's lawyers asked Unum for permission to use the evidence in question in the bad faith case, a delay which was fatal in the eyes of the Magistrate Judge, as it turned out.  We may never know what the result might have been if, as the Magistrate Judge suggested, the attorneys had carefully crafted a timely request for production of the same materials in the insurance bad faith case.

In any event, Unum refused Dr. Jalowsky's request to use the materials in question in his insurance bad faith case.

Rather, Unum filed a motion to quash the subpoena and for a protective order.  To say again, the Court revealed that Jalowsky "intends to issue a subpoena" -- how and through whom, it is not clear from the opinion -- against his own attorneys for documentation they had gotten ahold of in the earlier litigation.

The U.S. Magistrate Judge quashed the subpoena and granted Unum's motion for (another) protective order.  The material in question was subject to an order in the earlier case which limited the use of that material to that case, meaning the case in which the material was produced in the first place.  There are no exceptions, said the Magistrate Judge in Jalowsky v. Provident Life & Acc. Ins. Co. and Unum Grp., No. CV 18-279-TUC-CKJ (LAB), 2020 WL 8184343, at *1 (D. Ariz. June 19, 2020) (USMJ).

Counsel for plaintiffs should exercise caution when entering into stipulations for secrecy:  Their clients in later cases may be barred from using the evidence in their cases.

Counsel for defendants should be aware of the same thing.

Please see the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

U.S. MAGISTRATE JUDGE NAILS THE LAW OF STIPULATED PROTECTIVE ORDERS.

 

(Pacific Standard)   A United States Magistrate Judge nailed it in American Fam. Mut. Ins. Co. v. Whirlpool Corp., No. 1:20-cv-00302-WCL-SLC, 2021 WL 118826 (N.D. Ind. January 12, 2021).  Specifically, she nailed a proposed stipulated protective order, sending it back to the lawyers for corrections.

First, the proposed protective order submitted by the lawyers in this insurance coverage case "fails to set forth narrow, demarcated categories of legitimately confidential information. Instead it defines 'Confidential Information' with vague categories such as 'confidential business and commercial information, contracts, and other highly confidential proprietary information....' (ECF 18 § C). Generic terms such as 'confidential,' 'proprietary,' and the like are far afield from a narrowly demarcated category."  American Family Mutual Insurance Co., 2021 WL 118826, at *1.

Next, the proposed stipulation to secrecy did not present legally sufficient reasons for a protective order from a Federal Court sitting in the Seventh Circuit.  The lawyers were required instead to describe the information to be sequestered from public view, and then to "'show that substantial privacy interests outweigh the presumption of public access to discovery material.'"   American Family Mutual Insurance Co., 2021 WL 118826, at *1.

Further, the stipulated order submitted in this case proposed that the Court retain jurisdiction over the parties after the litigation ended.  "The Court, however, is unwilling to enter a protective order that suggests it retain jurisdiction of any kind after resolution of the case."   American Family Mutual Insurance Co., 2021 WL 118826, at *2.

"Finally," the U.S. Magistrate Judge ruled, that the proposed protective order in this case failed because it was not "'explicit that either party and any interested member of the public can challenge the secreting of particular documents.' [Citizens First Nat'l Bank of Princeton v.] Cincinnati Ins. Co., 178 F.3d [943,] at 946 [(7th Cir. 1999).]. The instant proposed order, however, does not contain this language. '[T]he public at large pays for the courts and therefore has an interest in what goes on at all stages of a judicial proceeding.'  Id. at 945.”  American Family Mutual Insurance Co., 2021 WL 118826, at *2.

There are one or two more points that the U.S. Magistrate Judge made in her concise, cogent opinion in this case.  What has been summarized here is enough to show that she nailed it.

The name of the United States Magistrate Judge?  Susan Collins.

Remember that name!

Please read the disclaimer.  ©2020 Dennis J. Wall.  All rights reserved.

THE NEW VIRUS EXCLUSION AND THE CORONAVIRUS.

Coronavirus Coffins (Associated Press)

I am writing a new section on the Virus Exclusion and the Coronavirus for CATASTROPHE CLAIMS:  INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters).  It will be published this Spring.

Revelations about the Virus Exclusion and losses allegedly caused by Covid-19 will also be explored in a forthcoming ABA Tort Trial & Insurance Practice Law Journal (Spring 2021) article by Dennis J. Wall titled, "Remedies in Business Litigation:  Update on Business Income Losses in the Coronavirus Pandemic."

In the meantime, there are many articles already published on the subject, including here, here, and here.

And also in the interim there is the Covid Coverage Litigation Tracker website sponsored by the University of Pennsylvania with additional assistance provided by the students of U. of Connecticut Law School.  The CCLT describes its massive project as follows:  "Thanks to Lex Machina, the CCLT dataset contains what is believed to be close to a complete set of federal Covid coverage cases, with a delay of about two weeks from when the case is filed.  State case coverage is less complete because of the limits of state court data."  

Please read the disclaimer.  ©2020 Dennis J. Wall.  All rights reserved.

FOCUS ON THE ONE ISSUE THAT WILL DECIDE THE THING.

 

(LexisNexis)

I focus on the one issue that will decide the case.  I have done this for many years.  For me, it has been the key to persuasion, a very successful technique.

When I write, I focus on the one issue that will decide the piece.  This is natural enough, I can see, what with all that successful experience of focusing on the one issue that will decide the matter.

However, it is not a universally shared approach to cases, writing, or other matters.  This lesson came hard to me, but it came nonetheless.  Focusing separates people, whether they are writing or not.  But today, and here, I am writing about writing.

My observation in this blog article is a simple one.  Actually I have already made it:  Focus on the one issue that will decide the piece that I am writing.

For example, I originally wrote a poem about lawyers arguing cases and especially about judges deciding cases.  It was and is a poem about what it is like to experience the ways in which one group makes their arguments and the other group decides.   I wrote the poem as a villanelle and openly based it on Dylan Thomas's famous poem Do Not Go Gently Into That Good Night.  I even called my poem Do Not Go Gently Into That Good Fight.

Well, I must have lost sight a little bit of my overriding objective in writing the piece.  I did not know it when I wrote it, but based on reaction to it, I must have lost sight of the one issue that prompted me to write it in the first place.

Some people reacted to it as though I wrote an indictment of all judges or maybe all lawyers, or both.  Plus the tone was a little intense, perhaps, in the original version which is all right, of course, except that in this case it distracted from the reason I wrote the poem.

So, I tweaked it.  I used a couple of different words and edited some punctuation to make my meaning clearer:  I wrote the poem about judges who write overly long opinions about very little things.

Hopefully my edited version, now online, reflects that.  And hopefully the edited version also reflects a little less intensity about the people in it, while preserving a real sense of enthusiasm for the subject of it.  It tells a story that in my view still needs to be told even if, in this case, it needed to be tweaked.

This post was previously published today on Claims and Issues Blog.  Reprinted here with permission.

Please read the disclaimer.  ©2020 Dennis J. Wall.  All rights reserved.