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Waiver in Insurer Bad Faith Cases.

In Yogeshwar, Inc. v. Society Ins., 739 F. Supp. 3d 714, 727 (N.D. Iowa 2024), applying Iowa substantive law, the Court denied motions for summary judgment because of the existence of genuine issues of material fact as to the insurance carrier's waiver of a contractual limitations period.  Yogeshwar, 739 F. Supp. 3d at 729 (first-party case).

            In Bailey v. People’s Trust Ins. Co., 392 So.3d 123 (Fla. 4^th DCA 2024) (first-party insurer bad faith case),  a Florida intermediate appellate court agreed with a homeowner-policyholder’s argument that “by responding to the CRN on the merits and failing to identify any specific defect with the CRN in its response, [her insurance carrier] waived the right to contest the validity of the CRN in the bad faith action. We agree.”  Bailey, 392 So. 3d at 124.

           By deciding to respond to the Civil Remedy Notice on the merits while failing to identify a specific defect within the CRN, the homeowner’s carrier may have added icing to the cake, or in this case, to its waiver.  Under established Florida law applied in the Bailey decision, “an insurer waives its right to contest a defect in the CRN if it fails to identify the specific defect in its response to the CRN.”  Bailey, 392 So. 3d at 124.

          The appellate court accordingly reversed the trial court’s grant of summary judgment to the carrier in this case on the issue of the CRN’s invalidity and remanded for determination of the bad faith claim.

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 5:13, Waiver and Release (addressing third-party cases), and in Volume 2, § 11:14, Waiver (addressing first-party cases) (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

To Be A Drum Major For Justice.

https://claimsandissues.substack.com/p/say-that-i-was-a-drum-major-for-justice

An Open Letter to my Fellow Lawyers.

 

https://claimsandissues.substack.com/p/an-open-letter-to-my-fellow-lawyers

PERKINS COIE LLP v. U.S. DEP'T OF JUSTICE Memorandum Opinion, May 2, 2025.

https://claimsandissues.substack.com/p/perkins-coie-llp-v-us-dept-of-justice

Private Projects, Public Money.

https://claimsandissues.substack.com/p/the-skinny-budget-calling-names-different

Stipulated Protective Orders: Confidentiality and Proof Burdens in Insurance Cases.

In Wright v. State Farm Fire & Casualty Co.,[1] the policyholders filed two motions to seal.  Both were unopposed.  That might set you to thinking that granting the two unopposed motions would be automatic.  If you thought that, you would be wrong.

          In this case, the policyholders’ motions to seal related to “several documents cited in their briefing [that] are covered by the parties’ stipulated protective order and should therefore be filed under seal.”  The Local Rules of the Western District of Washington where this action is pending, incorporate the “strong presumption of public access to the court’s files.”   To overcome this strong presumption, “a party seeking to file a document under seal must provide ‘[a] specific statement of the applicable legal standard and the reasons for keeping a document under seal, including an explanation of’ specific factors. LCR 5(g)(3)(B).”[2] 

          In the Wright case, the policyholders, the Wrights, were of course the parties “seeking to file a document under seal,” but they only provided a statement that State Farm had designated the documents in question “confidential” under a Stipulated Protective Order.

          In the ordinary course of litigation, then, the Wrights’ motions to seal should simply have been denied because they did not provide the required specific statement in order to seal the documents.  But that is not what the Court in this case did.  Instead, this Court shifted the burden of proof entirely to the party claiming confidentiality, in this case, State Farm:

The Court does not reach the question of whether the presumption of public access has been overcome here. The Wrights seek to file the documents at issue under seal because State Farm “has designated [them] as confidential during discovery.” See LCR 5(g)(1)(A). Thus, to the extent State Farm wishes to maintain the confidentiality of these documents, it bears the burden of satisfying LCR 5(g)(3)(B).[3]

           It appears to be a rule in the process of being established, if it is not in fact already an established rule in insurance and non-insurance cases alike, that the party actually seeking confidentiality in a given case is the party that bears the burden of proof on the confidentiality issue:

While Plaintiff technically constitutes the moving party for this Motion, where “a party moves to file material under seal because another party has designated that material as confidential, the party designating the material as confidential must file a response to the motion complying with requirements [around providing statements why sealing is necessary and references to the governing case law].” E.D. Va. Civ. R. 5(C). In light of Defendant’s designation of the relevant materials, and in accordance with Local Civil Rule 5, the Court finds that Defendant constitutes “the party seeking to restrict access” and therefore bears the burden to overcome the First Amendment right of access in this case. Va. Dep’t of State Police [v. Wash. Post, 386 F.3d 567] at 575 [(4^th Cir. 2004)].[4]

This was exactly the approach taken by the Federal Trade Commission in recent litigation, such as in Federal Trade Commission v. Amazon.com Inc. in the Western District of Washington,[5] discussed in DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:107.50 and which of course is the same Court as the Court in which the Wright decision was issued, and such as in Federal Trade Commission v. U.S. Anesthesia Partners., Inc.[6]

 

[1] Wright v. State Farm Fire & Cas. Co., No. 2:23-cv-179, 2024 WL 4979849 (W.D. Wash. Dec. 4, 2024).

[2] Wright, 2024 WL 4979849, at *4. 

[3] Wright, 2024 WL 4979849, at *4 (emphasis added).  

[4] Mission 1^st Grp., Inc. v. Mission First Solutions, LLC, No. 1:23cv1682 (DJN), 2025 WL 864278, at *2 n.2 (E.D. Va. March 19, 2025).

[5] Fed. Trade Comm’n v. Amazon.com Inc., (W.D. Wash. No. 2:23-cv-01495-JHC).

[6] Fed. Trade Comm’n v. U.S. Anesthesia Ptrs., Inc. (S.D. Tex. No. 4:23-cv-03560).  The FTC v. U.S. Anesthesia Partnes case is discussed at greater length in Volume 2, id., §§ 9:28.50 and 9.30.

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:107.50, and in Volume 2 in §§ 9:28 & 9:30 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Perkins Coie v. U.S. Dep't of Justice, Memorandum Opinion, May 2, 2025

Perkins Coie Memorandum Opinion May 2, 2025.  (Author Photo)

"No American President has ever before issued executive orders like the one at issue in this lawsuit," thus beginning the first sentence of an opinion that spans 102 pages.  Most of the 102 pages of this opinion consists of the regime's arguments and contentions.

      As you might expect, there is a lot in this opinion.  Together, we will explore the most significant of many significant issues as the week goes on starting Monday.  I wanted to get the opinion to you as soon as I could today, and not just showing it to you, then telling you to read it for yourself and leaving without any suggestions to hopefully contribute to your own reading of it.  Download Perkins Coie LLP v. U.S. Dept of Justice Memo. Opinion Doc. 185 filed May 2 2025 (D.D.C. No. 25.716.(BAH)).

      A good place to start I think is how the regime responded to this lawsuit.  They responded pretty much the same way they do everything, which is by blaming other people.  For example, in this case Perkins Coie alleged several different First Amendment Free Speech claims; the regime had issued an executive order requiring all agencies of the federal government basically to shun any dealings with Perkins Coie  --including to bar its lawyers from access to federal buildings, which naturally includes federal courthouses--because of the firm's representation of the regime's political opponents.

      The Court rejected the regime's approach.  (The Court refers throughout this opinion to "the government," meaning the regime.)  "The government's attempt to reframe this case as about governmental speech is subterfuge."  (Memorandum Opinion at p. 35.)

      "The claims that the government seeks to dismiss in this lawsuit challenge the use of governmental power, not governmental speech."  (Id., p. 35.)  "Put another way, plaintiff [Perkins Coie LLP] does not challenge 'what the current Administration thinks about Plaintiff,' Gov't's Mem. at 13, but rather what the current Administration seeks to do to plaintiff based on that thinking."  (Id., p. 36) (emphasis by the Court.)

      As you likely already know, the Court denied the regime's motion to dismiss and granted Perkins Coie's motion for summary judgment for "declaratory and permanent injunctive relief on Counts II through IX of the Amended Complaint."  (Id., p. 102.)

To be continued ....

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

"When Your Enemies Know What Your Friends Can't Believe."

https://claimsandissues.substack.com/p/when-your-enemies-know-what-your

A NATIONAL LAW DAY REPORT: STIPULATING SECRECY OVER "ADMINISTRATIVE ERROR."

Kilmar Armando Abrego Garcia is the person who was kidnapped in a parking lot in Maryland and spirited off to El Salvador.  There he continues to stay in a prison run by the Salvadoran regime and paid for by the current U.S. regime with your taxes.  Right or wrong, Abrego Garcia's continued stay in El Salvador's most notorious prison is paid for by your tax money.

The U.S. regime says that it was an "administrative error" that led to Mr. Abrego Garcia's being shuffled off to the one place to which he could not be deported, namely El Salvador.  A federal immigration judge had previously entered an order that Abrego Garcia should not be sent to El Salvador because his life is in danger there.

In El Salvador he stays, to this day.

There is now a Stipulated Secrecy Order in that case.  It was entered on April 21, 2025.  Download Abrego Garcia v. Noem Stipulated Protective Order Doc. No. 95 filed April 21 2025 (D. Md. Case No. 8.25.cv.00951.PX).

Time will tell how much, if anything, is made available to public access to the Court file.  Why was he sent to El Salvador?  Who made that decision?  Why is he still there?

To say again, time will tell how much and whether anything will be made available to the public as this federal case proceeds in federal Court, which is also paid for by your taxes.

General questions of public access to Court files are examined in the context of secrecy in Settlements in Bad Faith Cases in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:107 (Thomson Reuters West 3d Edition, 2025 Supplements in process) (regarding Third-Party cases) and in 2 id. § 9:28 (regarding First-Party cases).  Particular issues of secrecy relating to Insurer Bad Faith cases are discussed in Volume 1, id., §§ 3:107.50-3:107.100 (addressing Third-Party Bad Faith litigation) and in Volume 2, id., §§ 9:28.50-9:28.100 (concerning First-Party Bad Faith lawsuits).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Duty to Indemnify Distinct From Duty to Defend, Coverage Distorted.

In a case involving New York law, the Supreme Court of Delaware highlighted a distinction between the duty to indemnify and the duty to defend that is recognized in most if not all jurisdictions as to a liability carrier's duties to its insureds:

          Although the Insurers' fraud defense required them to prove that Conduent manufactured indemnity coverage through the settlement, the Insurers left the impression at trial that they had no coverage obligations at all.....  The Insurers' duty-to-defend issues and coverage position pre-Settlement had little if anything to do with whether Conduent fraudulently settled the State Action to secure indemnity coverage.  By probing these issues [at trial], the Insurers caused confusion between indemnity coverage and the duty to defend.

AIG Spec. Ins. Co. v. Conduent State Healthcare, LLC, ___ A.3d ___, 2025 WL 369450, at *8 (Del. Feb. 3, 2025)/

Case law on the issues discussed in this post is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:52 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

OFF WITH THEIR HEADS!

Or, how dare they question the regime?

Administrative Stay Order.  (Author Photo)

When the regime refused to turn the planes around and return the people it had abducted to a notorious prison in El Salvador, Judge James Boasberg held a Hearing on whether the regime should be held in Contempt of Court.

After the Hearing was over, Judge Boasberg wrote down all the evidence.  He also wrote down all the reasons why he found Probable Cause to hold the regime in Contempt based on all that evidence.  His Order is 46 pages long. He does not seem to have overlooked anything.  Download JGG v. Donald J. Trump Contempt Findings . Memorandum Opinion filed 04.16.25 (D.C.D.C. No. 25-766 (JEB)) 

The regime filed an appeal, of course.

Look at this appeal like an appellate lawyer would, and early on you would find out who your judges are.  Then you would find out all you could about them.

The regime not only filed what they call an emergency appeal, they also filed what they called an emergency motion to stay (or stop) the Contempt proceedings in Judge Boasberg's Court.  (Everything is an emergency with these people.  They don't dare give you time to think.)

Under the D.C. Circuit Court rules, the emergency motion was referred to a special panel to decide it.  The D.C. Circuit rules provide that the special panel can stay with the case and decide it too,  although that would be unusual.

There were three judges on the special panel in this case, which is usual.  Two of the judges voted for an administrative stay, and one did not.  As the two judges stated in their Administrative Stay Order in this case, in the D.C. Circuit Court the purpose of an administrative stay "is to give the court sufficient opportunity to consider the emergency motion[.]"  

The two judges who voted for a stay  are GREGORY KATSAS and NAOMI RAO.

Judge Katsas practiced law at Jones Day.  He moved over to the job of Deputy White House Counsel alongside Don McGahn, who also came from Jones Day.  David Enrich, who wrote a book about Jones Day, wrote that when Gregory Katsas left Jones Day for his new job at the White House in the first round of the regime, that "Greg Katsas received a bonus -- 'at the discretion of the managing partner,' as he explained in a government filing -- that brought his compensation to nearly $4 million for the year."[1] 

Naomi Rao is well-known to everyone who follows the rulings that sometimes come out of her pen when she can get another vote on the D.C. Circuit to make her ruling the Opinion of the Court.  Many of her dissents are just as well-known.

Both Judge Katsas and Judge Rao were nominated by the same man who is the current first-named appellant, the present head of the regime and the co-president (no, not Elon Musk, the other one).

The third judge on the special panel in this case, the judge who did not vote to grant an administrative stay in this case, is CORNELIA "NINA"  PILLARD.  Judge Pillard was nominated by President Obama.  The special panel's Administrative Stay Order reveals that she dissented because she did not think it was proper; in fact, she thought "there is no ground for an administrative stay."

Knowing what you know now, suppose that right now you are sitting with the lawyers representing JGG and the other people who were abducted to El Salvador.  In this case, your lawyers are effectively representing the Judge who found Probable Cause to hold the regime and its leader in contempt of Court.

Suppose further that all you know about your judges on appeal is what I have told you here.  (I guarantee that this is enough to know for purposes of evaluating how they might rule and what arguments to craft that might work best, if at all, which good appellate lawyers have to do in every appeal.)

Do you think that you have a 100% chance of winning this appeal?  OK, probably not.  How about 50-50?  25%?  Lower %?

You make the call.  But wait!  Before you make the call, wait to see if the special panel sticks around to decide the whole case.  If that happens, unusual though it might be, it will likely predict the outcome right then and there.

My call is that the special panel will decide the whole case.  I also predict that Judge Katasa and Judge Rao will go with the regime.  I would not be surprised if their opinion put the blame on Judge Boasberg and on the people who were kidnapped because, after all, Judge Boasberg had the audacity to issue rulings against the regime right there in his Courtroom and all,  and those people who were kidnapped also got in the way standing there on the street or in their homes or wherever.

Whatever their opinion says, my prediction is a 2-to-1 decision in favor of the abductions and against the 46 pages of evidence reviewed by the District Judge when he found Probable Cause to hold the regime and the regime's current leader in contempt of Court.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter.

 

[1] DAVID ENRICH. "SERVANTS OF THE DAMNED / Giant Law Firms, Donald Trump, and the Corruption of Justice," p. 242.  I previously referred to Jones Day and Mr. Enrich's book in an article posted here on Good Friday, April 18, 2025.

When Unfair Claims Settlement Practice Violates Consumer Protection Statute.

The Supreme Judicial Court of Massachusetts has found an interplay between an Unfair Claims Settlement Practices Act, on the one hand, and a Consumer Protection Statute, on the other.  In Massachusetts, a violation of Massachusetts General Laws Chapter 176D or the equivalent of an Unfair Claims Settlement Practices Act, is in law the same thing as an "unfair or deceptive act or practice" as that term figures in claims made under a Consumer Protection Statute, Massachusetts General Laws Chapter 93A.[1]  As the Court has held:

          Recovery under G.L. c. 93A for a violation of G. L. c. 176D, § 3 (9), is unlikely when "[a]n insurance company ... in good faith denies a claim of coverage on the basis of a plausible interpretation of its insurance policy."[2]  

[1] McGilloway v. Safety Ins. Co., 468 Mass. 610, 618, 174 N.E.3d 1191, 1199 (Mass. 2021).

[2] McGilloway, 488 Mass. at 618, 174 N.E.3d at 1200.  Accord, Marandino v. Utd. States Fire Ins. Co., No. 23-cv-40072-DJC, 2025 WL 902352, at *6 (D. Mass. March 25, 2025).

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:28 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

James Uthmeier The Unelected Florida Attorney General.

(Author Photo of the inside book cover)

Jones Day was so famous that a book was written about that huge law firm, SERVANTS OF THE DAMNED, by David Enrich.

One James Uthmeier worked at Jones Day before he took a job advising the Commerce Secretary in the first iteration of the current regime.  (The Secretary of Commerce at the time was a client of Jones Day.)  He is mentioned briefly on page 241 of the book.

As described in the book, one of the things that made Jones Day famous enough to get their own book was writing threatening letters.

James Uthmeier left the Commerce Department and at some point became the Chief of Staff to the Governor of Florida.  When the Florida Attorney General resigned, the governor appointed Mr. Uthmeier to the post.

A relatively recent appointment, Uthmeier has made headlines with at least one letter.  For example, he wrote a letter to the Mayor of Orlando threatening to remove the Mayor from office if Orlando did not follow the immigration laws, among other things.

In context, the Florida governor has already removed two elected officials from public office, both Democrats.  One, the State Attorney who is headquartered in Orlando, ran and won re-election after she was removed from the office.  Mr. Uthmeier has recently made comments about her, but so far apparently only verbal comments and not in writing.

Back to the Mayor of Orlando and the threat to remove him from office if Orlando did not enforce the immigration laws.  The Mayor wrote back immediately after receiving the letter from General Uthmeier to inform Uthmeier that, in essence, Orlando is following all the laws including the immigration laws.

Not content with the Mayor having the last word apparently, Mr. Uthmeier gave a TV interview following the Mayor's letter, and he said that his letter worked and then pretty much repeated as the Mayor had said, that Orlando was following the law.

It would have been interesting to see if the Florida Attorney General would have actually sought the removal of the Mayor of Orlando from office.  But by what authority, General, by what authority?  Perhaps we will never know, but in the meantime, there is the State Attorney who might be removed from office ....

It is Good Friday.  Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

'TO MAKE A REASONABLE OFFER AFTER LIABILITY IS REASONABLY CLEAR.'

In Urban v. Zurich Am. Ins. Co., 752 F. Supp. 3d 310 (D. Mass. 2024), a U.S. District Judge in Massachusetts considered whether the liability insurance carrier defendant had violated Massachusetts statutes by failing to make a reasonable offer after the policyholder’s-insured’s liability had become reasonably clear.

           As to whether the policyholder-insured’s liability was reasonably clear at any point during the underlying claim, this case involved the possibility of a jury finding of comparative negligence.  The Court pointed out that “[w]hile comparative negligence can, in some cases, prevent liability from becoming reasonably clear,” insurance carriers have an obligation to make a reasonable settlement offer, which they cannot avoid “by hiding behind the gamesmanship of anticipated success at trial.”  Urban, 752 F. Supp. 3d at 341.

          As to the reasonableness of the carrier’s offers, the Court noted that under Massachusetts law (as under the law in most if not all U.S. jurisdictions) all insurance carriers are subject to the following legal standard:  “Reasonableness can be measured by looking to the undisputed evidence indicating the damages suffered against the offer tendered.”  Urban, 752 F. Supp. 3d at 344 (emphasis added). 

          The Court in this case awarded double damages against the defendant carrier in the amount of “$2,841,358.26, plus attorneys’ fees” because it failed to make a reasonable offer after the liability of its policyholder-insured had become reasonably clear in the underlying case.  Urban, 752 F. Supp. 3d at 346.

Third-Party Bad Faith case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:28 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).  First-Party Bad Faith case law on these issues is collected in Volume 2, § 9:14.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

DÉJÀ VU, ALL OVER AGAIN.

It worked for them before.  The regime notoriously spirited one Mahmoud Khalil out of New York City before a federal judge there could rule in his case.  Then the regime argued that the federal judge had no jurisdiction since Khalil was no longer there.  “The regime's response to Khalil's demand to return him to New York City was to say that the federal Court there has no jurisdiction.”  The Doctrine of Nanny Nanny Boo Poo, posted here on March 18, 2025.

In that case, the federal judge in New York City ultimately agreed.  But that was because Khalil filed a habeas corpus petition.  The Latin basically means, “deliver the body,” and the federal judge in New York City ruled that if there was no body in New York City, then he did not have jurisdiction in a habeas case.

That’s not what happened in the case of Kilmar Abrego Garcia.  The regime took Abrego Garcia to prison in the Salvador gulag, outside of the United States, where his life is undeniably in danger.  An immigration judge ordered years ago that Abrego Garcia’s life was in danger if he was sent to El Salvador, and that as a result he should not be sent there.

The regime admitted that their abduction of Abrego Garcia was a mistake and they should not have done that to him.  Moreover, Abrego Garcia’s lawsuit was not a habeas corpus petition since he had already been removed from the U.S.  Instead, he alleged that the regime violated his Constitutional rights in sending him out of the country to prison in El Salvador.    See  Download Abrego Garcia v. Noem Complaint Doc. No. 1 filed March 24 2025 (D. Md. Case No. 8.25.cv.00951.PX) and Download Abrego Garcia v. Noem P's Emer. M. TRO Doc. No. 2 filed March 24 2025 (D. Md. Case No. 8.25.cv.00951.PX).

So what could the regime’s lawyers do to make this case like Khalil’s?  Through a lawyer, they declared that Abrego Garcia’s case was really a habeas corpus case and, as in Khalil’s case, the federal court would not have jurisdiction. 

The regime added one further thought.  They argued that since Abrego Garcia had actually been removed from the country, that a United States District Court had no jurisdiction over his case and the Court could not order the regime to return him to this country.  A lawyer actually wrote that, and the regime actually said that.  See Download Abrego Garcia v. Noem Ds Opp. Memo. to P's Em.M.TRO Doc. 11 filed March 31 2025 (D. Md. Case No. 8.25.cv.00951.PX).

The U.S. District Judge in this case, Judge Paula Xinis, disagreed.  She denied Abrego Garcia’s first try at a Temporary Restraining Order, but she ruled in his favor on his second try, when he filed what the Judge called a Motion for Preliminary Injunction.  She granted his motion and also ordered the regime to return him to this country.  Download Abrego Garcia v. Noem Order Granting Prelim. Injunction (D M.Stay) Doc. 21 filed April 4 2025 (D. Md. Case No. 8.25.cv.00951.PX) and Download Abrego Garcia v. Noem Memorandum Opinion (D M.Stay) Doc. 31 filed April 6 2025 (D. Md. Case No. 8.25.cv.00951.PX)

The regime has now appealed to the Fourth Circuit Court of Appeals, where I understand that they have filed an emergency motion to stay the District Judge’s Order.  (Why might there be an emergency you ask?  There isn’t any emergency that I can see.)

Ordinarily, a motion for a stay on appeal, emergency or otherwise, would go to a panel of Fourth Circuit judges but there is a way to circumvent that normal process.  I will go into it later if it turns out that the regime is trying it, but I do not wish to give them ideas.

But that will not stop me from making a prediction for you about the ultimate success of the regime’s appeal in this case:  I think that the Fourth Circuit will reverse the District Judge and hold that although mistakes were made, it is not the regime’s fault, i.e., the regime does not have to take him out of harm’s way by removing him from the Salvadoran death-trap of a prison to which they mistakenly sent him.

I make this prediction because I do not think that many judges on the Fourth Circuit Court of Appeals have the stomach to order the regime to do something that the regime may refuse to do.  It may be that there are not many judges, federal or State, who have the stomach for the regime to defy their orders.  Whatever would they do in that event?  Rather than force the issue, I predict that they will side-step it completely.

They will rule that Abrego Garcia must stay in the prison in El Salvador without forcing the regime to obey the District Court.

At least for now.

Perhaps forever.

Time will tell.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

Last Thursday ICE abducted a person who was standing trial.

(oneag news agency; Wikimedia Commons)

 

The person, Wilson Martell-Lebron, was on trial for providing false information on an application for a license. He was on trial for a crime.

On the first day of his criminal trial in Boston Municipal Court, Martell-Lebron was abducted by ICE. ICE says that he is from the Dominican and that he was in the U.S. without sufficient documentation. I understand that this is a civil offense, not a crime.

The criminal trial judge, Judge Mark Summerville, conducted an inquiry. He reportedly heard testimony about the incident from the Assistant District Attorney last Friday, testimony which finished up on Monday of this week.

Judge Summerville found that ICE premeditated their obstruction of justice in this criminal case. He further found ICE agent Brian Sullivan responsible, that Sullivan "conspired in a premeditated manner" to obstruct justice by abducting Martell-Lebron, and that Sullivan was a member of the prosecutorial team (at least for purposes of this issue).

Judge Summerville further found that ICE agent Sullivan "intentionally" and "egregiously" deprived Martell-Lebron of Constitutional rights, and that ICE and Sullivan have no intention of returning Martell-Lebron to resume his criminal trial.

The judge was quoted in reports as saying that "I find that this court cannot trust ICE to return the defendant back to court. I don't find that they're credible. I have no confidence in ICE no matter what they told the Commonwealth, that they would ever bring this defendant into court."

Following this inquiry, the judge found Sullivan in contempt.

The judge also dismissed the criminal charges against Wilson Martell-Lebron for prosecutorial misconduct.

So far, I have seen four of these videos filmed during three abductions which are becoming commonplace. ICE agents abduct someone and bundle them into a waiting black SUV. (I assume that they are agents from ICE because that is what they say, but who knows the truth of who they work for?)

It has not been reported so far as I know, but it is not hard to pick up a pattern from these kidnapping videos: There are always 6 people involved in the abduction, all of them always in plain clothes, they use handcuffs, and they are often but not always masked.

The person they abduct is always alone.

So, in this case, if the judge had wanted to, there seems to have been enough legally sufficient evidence to warrant finding 6 "agents" in contempt, without stopping just at Sullivan.

Back to Mr. Martell-Lebron's abduction and his criminal trial that was scheduled to start in Judge Summerville's courtroom last Thursday. I look at this situation from the standpoint of the people who were in that courtroom. There was the judge, the defense attorney, and the prosecutor. For some reason I do not know, reportedly there were also two Massachusetts State Troopers there.

The judge and the defense attorney apparently had no inkling that ICE was waiting to seize Martell-Lebron. The Assistant District Attorney did not know that ICE would seize the defendant during trial, the judge found.

The question becomes whether anyone associated with this incident knew that ICE was planning to abduct the defendant as soon as the trial concluded.  The reporting is unclear although one of the State Troopers reportedly testified last Friday that Ice Agent Sullivan told him and the prosecutor that ICE planned to abduct the defendant, apparently on the first day of trial.

A statement by a spokesperson for the Massachusetts State Troopers offered that the State Troopers followed the department’s policy of not speaking about ICE plans if they know what ICE is going to do.

Whatever anyone knew about ICE plans for Mr. Martell-Lebron, they apparently did not tell either the judge or the defense attorney.

• The judge, who is very likely to deal with the two State Troopers in future cases, has seen with his own eyes and heard with his own ears that the loyalties of these two State Troopers probably do not lie with him or his Court, or with Massachusetts and its laws. If they were, they would have told the judge what ICE was planning to do if they knew it in advance.  The judge reportedly said as much himself in the Hearing.
• Returning to that statement by a spokesperson for the State Police, this apparently was supposed to exonerate the two State Troopers involved in this situation because the Troopers supposedly neither stopped ICE or helped ICE. I call BS. They helped ICE by staying silent. That is what they wanted to do; we know that because that is what they did.

Think on this as well. ICE and its masters have made it pretty clear that they have no respect for persons they find on the street or in their homes including on Thursday of last week in Massachusetts.

And think on this: ICE and its masters showed clearly and beyond any reasonable doubt on Monday that they have no respect for judges, the United States, or the law.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

DEMAND FOR A DEMAND IS NOT BAD FAITH IN SETTLEMENT.

The case of  Jimenez v. GEICO Secure Ins. Co., 730 F. Supp. 3d 1091 (Nev. 2024) resulted in the publication of a decision which seems to have been willfully misinterpreted in the literature or perhaps it simply was not read beyond the headnotes.  In Jimenez, a U.S. District Judge considered the decision in an earlier case,  Chowning v. Nationwide, which was decided by a magistrate judge in Nevada a year earlier.  The cite for the magistrate judge's decision is Chowning v. Nationwide Ins. Co. of Am., No. 22-cv-00798-CDS-EJY, 2023 WL 2971435 (D. Nev. 2023) (USMJ).

 As the Jimenez Court wrote, “GEICO argues that I should follow Chowning, which held that a [statutory unfair claims settlement practices] claim was futile without a settlement demand from the injured party.”  Jimenez, 730 F. Supp. 3d at 1096.  But the Jimenez Court disagreed.  The district judge in that case did not find the decision by a magistrate judge in Chowning to be “controlling law”:

    The Supreme Court of Nevada has not decided the precise question of whether a settlement demand from the claimant is a prerequisite to an insurance bad faith claim. See Chowning, 2023 WL 2971435, at *6. Neither party cites controlling law on this point.

Jimenez, 730 F. Supp. 3d at 1095 (emphasis added).

Nevada law was involved in the Jimenez case and the Jimenez Court applied Nevada Supreme Court decisions which establish that a liability carrier generally cannot be held liable for its alleged bad faith in settlement regardless of whether there has been a settlement demand or not, if it “’has no opportunity to settle within policy limits .…'   Or, if settlement is possible beyond policy limits, … that the insured would be willing to contribute the excess amount.”  Jimenez, 730 F. Supp. 3d at 1095, quoting Allstate Ins. Co. v. Miller, 125 Nev. 300, 315, 212 P.3d 318, 328 (2009) (en banc) (emphasis added).

Applying the Nevada law of bad faith, as interpreted by the Nevada Supreme Court and followed in the Jimenez case, the policyholder’s complaint at issue failed in its claim of bad faith in settlement because it did not contain any allegation that the defendant carrier had “an opportunity to settle, either within policy limits or outside of policy limits with Jimenez’s contributions.”  Jimenez, 703 F. Supp. 3d at 1096.

Without an allegation that the defendant carrier had an opportunity to settle, both the common law claim of bad faith and the statutory claim of bad faith failed, and for that reason both of these claims were dismissed.   Jimenez, 730 F. Supp. 3d at 1096.

The Jimenez decision is thoughtful and researched.  Not once did the Jimenez Court write that a demand (or offer) is necessary to a viable claim of bad faith in settlement; what Nevada law requires is what all modern jurisdictions require, which is an opportunity for the liability carrier “to settle within policy limits or in excess of policy limits with contribution” from the bad-faith plaintiff.  Jimenez, 730 F. Supp. 3d at 1096.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Whether 'tis Nobler to Staff Healthcare Facilities, ...

... or Take the Money and Run?

One week ago, in an article posted here, staffing standards for nurses at Nursing Homes was explored with a look at an ongoing case in Private Equity Strikes Back, posted here on March 21, 2025.

Standards at healthcare facilities continue to be of interest here, just as they are of interest to most people in the United States. 

To be sure, cases go to trial on allegations involving inadequate staffing at healthcare facilities for which private equity may or may not be responsible.  In Estate of Shea v. Meridian Senior Living, LLC,[1] the estates and relatives of deceased residents of an assisted living facility managed by Meridian Senior Living, LLC filed suit against Meridian on account of the residents' deaths.  The case went to verdict on counts for alleged negligence and alleged violation of the Wisconsin Deceptive Trade Practices Act.

A jury returned a verdict for the plaintiffs based on allegations of inadequate staffing and false advertising. The trial court entered judgment for the plaintiffs which was affirmed.[2]

[1] Estate of Shea v. Meridian Senior Living, LLC, No. 2023AP1462, 2025 WL 18229 (Wis. Ct. App. Jan. 2, 2025).

[2] The essential facts supporting the verdict and judgment are outlined by the Wisconsin Court of Appeals in Meridian Senior Living, 2025 WL 18229, at ¶¶ 1-39, at pages *1-*10.  For reasons unknown, when this opinion was initially issued, the appellate panel wrote that "[t]his opinion will not be published," Meridian Senior Living, 2025 WL 18229, ¶ 60, at page *14, although the caption bears a NOTICE that a final publication decision is pending.

 

Case law on these issues is set out in § 18C:6.50, Private Equity and Medicare, in Volume 2 of CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Good Faith or Bad Faith: Your Choice.

We are moving into an era that represents a rejection of the defense establishment, Social Security and Medicare and Medicaid, the environmental protection establishment, and on and on.  There are ways to improve the cast and the script in good faith, if you will, and there are also ways to rewrite the story in bad faith.  The choice is ours, not theirs.

As was said in a different but related context:

We are moving into an era that represents a rejection of the public health establishment.  Change is coming, but not all change is good change.  We need to have honest discussions about what went right and wrong with a focus on learning how to do better next time, not rewriting what happened.[1]

[1] Katelyn Jetelina and Kristen Panthagani, HHS Picks, the House Subcommittee Report, and Pandemic Revisionism, Your Local Epidemiologist (Substack Newsletter, Dec. 4, 2024), https://substack.com/@yourlocalepidemiologist/p-152518123.

Issues like this are discussed in § 18C:16, The Man-Made Catastrophe From Taking Medicare Away From Those That Rely on the Program, 2 CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Antitrust Scrutiny Through Private Litigation.

Antitrust scrutiny is sometimes provided by the filing of private litigation.  Given the current state of affairs in Washington, D.C., this is likely to become the preferred option for some time to come.

On August 1, 2024, many lawsuits against Multiplan, Inc. were consolidated in a Multidistrict Litigation because they "share factual questions arising from an alleged conspiracy to fix, suppress, and stabilize reimbursement rates paid to healthcare providers for out-of-network healthcare services in the U.S. in violation of the Sherman Act."  In re:  Multiplan Health Ins. Provider Litig., 743 F. Supp. 3d 1376, 1377, MDL No. 3121, 2024 WL 3629070, at *1 (J.P.M.L. Aug. 1, 2024).  

Case law addressing the issues in this case is set out in § 18C:6.50, titled Private Equity and Medicare, in Volume 2 of CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Private Equity Strikes Back.

In June, 2024, a trade association and several nursing homes filed suit in Amarillo, Texas.  Their Amended Complaint still appears to be the operative complaint in that case at this time.  American Health Care Association v. Becerra, Amended Complaint, DE 26, filed 06.18.24 (N.D. Tex. Case No. 2:24-cv-00114).  

            The lead plaintiff led five other plaintiffs in filing suit in the Northern District of Texas, Amarillo Division.  This is the courthouse of choice where, as in this case, plaintiffs oppose allegedly "onerous" rules like standards for nursing staff in Nursing Homes.

            In the lawsuit to block the "onerous" nurse staffing standards in Nursing Homes, the American Health Care Association and its five co-plaintiffs alleged:

That rule exceeds CMS’s statutory authority, effects a baffling and unexplained departure from the agency’s longstanding position, and creates impossible-to-meet standards that will harm thousands of nursing homes and the vulnerable Americans they serve.

            The rule is easy to understand to those who read it.  It turns out that the "agency's longstanding position" originated during the American Apocalypse, between the afternoon of January 20, 2017 and the morning of January 20, 2021.  That is not so longstanding in the eyes of most reasonable persons.

            The "impossible-to-meet standards that will harm thousands of nursing homes" depends on how much of a Return on Investment you were counting on when you invested in Nursing Homes.  If you expected to profit from the relative absence of nurses to whom you have to pay salaries, then that would be one thing which would make hiring nurses to staff Nursing Homes "impossible," I suppose.

            The "vulnerable Americans" the nurses serve are the people who live in the plaintiffs' nursing homes.  The plaintiffs actually allege that these "vulnerable Americans" will be harmed by having more nurses on staff.  Not one resident of a nursing home is a plaintiff in American Health Association v. Becerra.

            Outside of Amarillo, none of this seems especially plausible.  Plausibility is of course the standard to measure whether an amended complaint like this one states a claim upon which relief can be granted. 

            Undeterred by questions of plausibility, the Department of Justice and the plaintiffs in this case have stipulated that the case should be resolved by both parties moving for the entry of judgment under a briefing schedule that runs into 2025.  American Health Care Ass'n v. Becerra, Joint Motion for Briefing Schedule, DE 45, filed 08.09.24 (N.D. Tex. Case No. 2:24-cv-00114).  A U.S. Magistrate Judge approved the stipulation.

            In the meantime, there does not seem to be anything to prevent the standards for nurses to staff Nursing Homes in the Northern District of Texas.  Or anywhere else in the United States, for that matter.

            As of Saturday morning, March 14, 2025, I could not find any Order on the electronic docket on PACER that says that the staffing standards are not in effect.[1]

 

Case law on the issues in this case is set out in § 18C:6.50, titled Private Equity and Medicare, in Volume 2 of CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

[1] However I did find several Orders granting leave to foreign lawyers to put in their appearances in the case.  But after checking on PACER for a year-and-a-half, so far I have not found any Orders enjoining the enforcement of the staffing standards for nurses in Nursing Homes, wherever they are located.  And as yet, I have not found stipulations either.

            Unfortunately, Typepad would not cooperate with PACER and upload the documents from the Electronic Court File for your ease of reference here.  I tried, more than once.

Work Requirements to Impose on Medicaid Recipients ARE BACK!

Work requirements are popular in some quarters to impose on disabled people, the elderly, and children who receive Medicaid.  This is a repeat of an earlier time.

As of July 1, 2023 there was actually still one state with work requirements for Medicaid recipients, Georgia:

            The first Trump administration approved work requirements in 13 states.  Only Georgia's program, which started on July 1, 2023, is in effect.  A Medicaid work requirement launched in Arkansas was halted by a court order in 2019.[1]

Like a bad movie, we apparently have to do this again.  Stay tuned.

[1] Andy Miller, Renuka Rayasam and Sam Whitehead, Democratic Senators Ask Watchdog Agency to Investigate Georgia's Medicaid Work Rule, KFF Health News (online Dec. 18, 2024), https://kffhealthnews.org/news/article/georgia-medicaid-word-requirement-democrats-gao-investigate/.

 

Case law on these issues is set out in § 18D:16, Volume 2 of CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

THE DOCTRINE OF NANNY NANNY BOO POO.

 

Mahmoud Khalil v. William P. Joyce, Memo in Support of Motion to Dismiss or Transfer the Case, Doc. 31, page 1, filed March 12, 2025 (SDNY No. 25 Civ. 1935 (JMF)).  (Author Photo)

Mahmoud Khalil was taken into custody allegedly by unknown, unidentified plain-clothes agents of the Department of Human Services.  That was in New York City.

From the City, Khalil was apparently taken to New Jersey, where the plane he was put on may have refueled.  From there he was taken to Louisiana.

When he was taken, he left behind his wife in New York City who sued to have him returned to her.  She was 8 months pregnant at the time Khalil was taken away.

She sued for habeas corpus.  That is one of the few Latin phrases that remain in the law.  (Some people might think it is Sharia law.  It is not.  It is Latin.)  In practice, it means "return the body that you have taken."

The only reason we can see what is being done in this case is that it is a habeas proceeding in a civil case.  If it were in Immigration Court, it would usually be sealed.  The District Judge in this civil case ordered the case to be unsealed even though the case involves immigration laws.

A "deliver the body" or habeas petition is usually directed to the regime that is responsible for taking someone out of circulation.  In this case, Khalil was disappeared at 8:30 PM on a Saturday night by large men who refused to identify themselves.

The regime's response to Khalil's demand to return him to New York City was to say that the federal Court there has no jurisdiction.  They said that only the Court where he is being held has jurisdiction, or perhaps the Court where he was held at the time the habeas petition was filed has jurisdiction.  But certainly not the Court in New York City which is where he was taken from, of course, they say.  Download Mahmoud Khalil v. William Joyce Rs' Memo to Dismiss or Transfer Doc. 31 filed March 12 2025 (S.D.N.Y. No. 25 Civ. 1935 (JMF)).      Download Mahmoud Khalil v. William Joyce Rs' Opp. Memo to Return MK to SDNY Doc. 47 filed March 14 2025 (S.D.N.Y. No. 25 Civ. 1935 (JMF)).   Parenthetically, in the Southern District of New York the case has been assigned to Judge Jesse Furman.

Mahmoud Khalil v. William P. Joyce, Opposition Memo to Motion to Compel Khalil's Return to SDNY, Doc. 47, p. 1, filed March 14, 2025.  (Author Photo)

So, if you follow the reasoning, they are saying that only the Court in the place where they took him has jurisdiction, whether that is the Court in New Jersey or the Court in Louisiana.  If Khalil's habeas case is transferred to Louisiana, then by their reasoning if they transfer him first to say, Florida, before the habeas case is transferred to Louisiana, then they can say that Khalil's case will be in the wrong place and the Court will not have jurisdiction there, either.  They can probably keep moving him around the country on expensive airplane flights.

This is fundamentally unfair.  It is unjust.  It is un-American.  It certainly was all these things before January, 2025.

It is still unfair, unjust, and un-American now.

They haven't gone into this, for obvious reasons, but it seems that there must be an exception to the Doctrine whenever the regime deliberately robs the Court of jurisdiction by moving their prisoner to whatever jurisdiction they think is more receptive to their activity.  If there is not, there ought to be. 

Otherwise we will have nothing in our empty lives but the Doctrine of Nanny Nanny Boo Poo.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

In Court, Facts and Law Matter. They still determine the outcome.

HAPPY ST. PATRICK'S DAY ANYWAY!

Perhaps ahead of the times, Florida sued without legally sufficient supporting facts or law to challenge "the constitutionality of the federal government's use of private accreditation agencies as part of its process to approve postsecondary institutions within the meaning of the Higher Education Act [HEA.}"  Florida v. Cardona, ___ F. Supp. 3d ___, No. 23-cv-61188-JB, 2024 WL 4370879, at *1 (S.D. Fla. Oct. 2, 2024), app. docketed, No. 24-13814 (11th Cir. Nov. 20, 2024).  The Court granted a motion to dismiss Florida's taxpayer-funded lawsuit, saying:  

            There is no precedent for striking down an act of Congress on the grounds that it violates the Spending Clause when the funds at issue are not given to a state or local government entity. Indeed, every case cited by either party involves a challenge to a statute or regulatory scheme that provided federal funds to a state or local government entity.¹⁰ Here, it is undisputed that the State is not receiving the funds.

Florida v. Cardona, 2024 WL 4370879, at *10 (emphasis by the Court) & n.10.  The District Court concluded:

The State, of course, is not without recourse. It can seek to change the law in Congress, provide its own funding to students attending its schools, or compete in the marketplace without the use of federal funds, just to list a few examples. But this Court is only empowered to look at the facts as they are plead, not rhetorical conclusions, and then apply the law as it exists, not as the State would like it to be. By those lights, what the State presented, at least in this Complaint, cannot stand.

Florida v. Cardona, 2024 WL 4370879, at *18.

Case law on these issues is discussed in § 18A:1, Volume 2 of CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

More on "Direct Physical Loss," and on "Loss" or "Damage" coverage determinations.

As two esteemed insurance academics put it in a law review article early in the COVID pandemic:

          Judges granting dismissal motions without any opportunity for discovery, and denying any possibility of coverage at the metaphorical starting gate, have undermined the traditional American commitment to jury trials as well as widely accepted legal principles of insurance policy construction such as interpreting ambiguous terms against the drafter and considering policyholder reasonable expectations.  Where the issue is solely whether sufficient “loss” or “damage” has taken place, standard property insurance policy language is simply not as conclusive as purported by these courts. Although other defenses such as a virus exclusion may carry the day for some insurers, insurers have to date gotten much more mileage out of very weak “no-loss/no-damage” arguments than should be the case if trial judges were consistently doing a thorough job.

Erik Knutsen and Jeffrey W. Stempel, Infected Judgment:  Problematic Rush to Conventional Wisdom and Insurance Coverage Denial in a Pandemic, 27 Conn. Ins. L.J. 185, 192 (Fall, 2020).  This law review article would influence the North Carolina Supreme Court in its interpretation in 2024 of the phrase, "direct physical loss" to property as that term is used in an insurance policy.  In 2024, the North Carolina Supreme Court declared that phrase ambiguous such that coverage was to be decided in favor of the policyholder in that case under a policy containing such a requirement.  North State Deli, LLC v. Cincinnati Ins. Co., 386 N.C. 733,  908 S.E.2d 802, 806 (N.C. 2024).  The North State decision was the subject of a blog article posted here on Wednesday, March 12, 2025.

Case law interpreting policy language of this kind is discussed in § 7:20 by Dennis J. Wall in CATASTROPHE CLAIMS / Insurance Coverage for Natural and Man-Made Disasters (Thomson Reuters West Nov. 2024 Edition, 2025 Supplements in process).

 Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

"Direct Physical Loss" is a "slippery term" said the North Carolina Supreme Court.

It probably remains to be seen whether the current composition of the North Carolina Supreme Court will stick with stare decisis if they do not like the result.

The North Carolina Supreme Court, in contrast to the answer to certified questions by the California Supreme Court, declined "to do what other courts have done and affirmatively define the 'slippery' term [that the insurance carrier at bar] chose to use in this manifestly ambiguous situation."[1]  In an opinion amazing for its unanimity among other things, the North Carolina Supreme Court in North State Deli, LLC v. Cincinnati Insurance Co.[2] expressly rejected the approach of affirmatively defining the term "direct physical loss" where the carrier itself did not define the term in its insurance policy:

          At bottom, a reasonable person in the position of the insured would understand the restaurants’ policies to include coverage for business income lost when virus-related government orders deprived the policyholder restaurants of their ability to physically use and physically operate property at their insured business premises. Since Cincinnati’s interpretation of “direct physical loss” to property is also reasonable, North Carolina’s background principles compel us to resolve this ambiguity in favor of the insured policyholder.  [Citation omitted.]. We therefore conclude that the restaurants have stated a claim for coverage due to a “direct physical loss” to property under their policies, and they are entitled to partial summary judgment as the trial court concluded.

* * *

Otherwise, insurance companies are licensed to pitch consumers on an expansive, “all-risk” policy, while hiding behind a narrower definition imposed by judicial fiat when it comes time to pay out. Such a setup contradicts our Court’s holdings that the lodestar for insurance contract interpretation is the reasonable expectation of the policyholder and that ambiguities should be resolved in the insured’s favor.[3] 

Case law interpreting policy language of this kind is discussed in § 7:20 by Dennis J. Wall in CATASTROPHE CLAIMS / Insurance Coverage for Natural and Man-Made Disasters (Thomson Reuters West Nov. 2024 Edition, 2025 Supplements in process).

 Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

[1] North State Deli, LLC v. Cincinnati Ins. Co., 386 N.C. 733, 908 S.E.2d 802, 812 (N.C. 2024).

[2] North State Deli, LLC v. Cincinnati Ins. Co., 386 N.C. 733, 908 S.E.2d 802 (N.C. 2024).

[3] North State Deli, 908 S.E.2d at 812, 813.

Read their own words that say that Section 504 is unconstitutional.

(Author Photo) 

Ken Paxton is currently the Texas attorney general. His name is on the complaint in Download Texas v. Becerra Complaint Doc. No. 1 filed Sept. 26 2024 (N.D. Tex. Case No. 5.24.cv.00225.H).  I wrote about that lawsuit previously. I may not have written enough, so today I will quote a lot of their own words.

In their complaint, Paxton writes that Texas and other states of the Old and New Confederacy say that Section 504 is unconstitutional.

Here is Count 3, in their own words:

Count 3 Section 504 is Unconstitutional U.S. Const., art. I, § 8, cl. 1.

221. All other allegations are repeated and realleged as if fully set forth herein.

222. Under the Rehabilitation Act, “no otherwise qualified individual with a disability in the United States . . . shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.” 29 U.S.C. § 794(a).

(Complaint, Count III title and paragraphs 221-222, at p. 40.) (Emphasis added to title of Count III of their complaint.)

This is what Paxton has written in their complaint. No question, they knew what they were doing. They certainly know what Section 504 stands for; as you can see they quoted it.

They wrote that they think that Section 504, which prohibits discrimination against handicapped people, is unconstitutional:

239. Because Section 504 is coercive, untethered to the federal interest in disability, and unfairly retroactive, the Rehabilitation Act is not constitutional under the spending clause.

(Complaint, paragraph 239, at p. 40.) (Emphasis added.)

Then they demanded that a judge declare Section 504 to be unconstitutional everywhere in America in all things, no qualifications:

DEMAND FOR RELIEF

Plaintiffs respectfully request that the Court:

a. Issue permanent injunctive relief against Defendants enjoining them from enforcing the Final Rule;

b. Declare that the Final Rule violates the Administrative Procedure Act;

c. Hold unlawful and set aside (i.e., vacate) the Final Rule;

d. Declare Section 504, 29 U.S.C. § 794, unconstitutional;

e. Issue permanent injunctive relief against Defendants enjoining them from enforcing Section 504;

f. Award attorneys’ fees and costs incurred in this action to Plaintiffs; [and]

g. Issue any and all other relief to Plaintiffs the Court deems just and proper.

(Complaint, DEMAND FOR RELIEF, p. 42.) (The only demands for relief that do not address the transgender rule supposedly at issue in this case are the demands to which emphasis has been added so they are easily seen, and those are demands to declare Section 504 unconstitutional and enjoin enforcement of Section 504’s prohibition on discrimination against handicapped people.)

Paxton has since said that this lawsuit "will have no impact" on Section 504 coverage. He says that anything to the contrary is "a misinformation campaign." He says that they never demanded that the protections of Section 504 be taken away, but only, he says, that they demanded that the court "protect them."

What Mr. Paxton speaks now is not what he wrote in their complaint.

Now you can see for yourself what he wrote. Paxton never thought that would happen, but it has.

If they wanted to amend their complaint, they would; but they haven't amended their complaint. Every lawyer knows that it is relatively simple and straight-forward to amend a complaint and that if you don't amend your complaint, all the words in the wind don't matter in court.

Oh, one last Paxtonism contrary to the truth. He says that a recent executive order "paused" this lawsuit. There is no such thing as a "pause," not because of somebody's executive order or anything else. The only thing that can stop a lawsuit is an order from the court. That hasn't happened here. Until and unless that happens, Section 504 is on track for a declaration.

Unless of course they voluntarily dismiss their lawsuit since they won't amend it.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

"Majority" or "minority" views: "Surface water" in the insurance coverage case law.

Some courts say that a majority of courts addressing the question have concluded that "surface water" includes water on a roof, but the Supreme Judicial Court of Massachusetts respectfully disagreed in the case of Zurich Am. Ins. Co. v. Med. Prop's Trust, Inc., 494 Mass. 382, 392 n.12, 237 N.E.3d 733, 741 n.12 (2024):

          Both the insurers and MPT argue that their particular interpretation of the term “surface waters” is the majority position among courts throughout the country. This mirrors courts in other jurisdictions that have similarly asserted both that the majority position is that “surface waters” includes water on a roof, see, e.g., Danville Commercial Indus. Storage, LLC, 442 F. Supp. 3d at 927 (“the majority of [courts] to have addressed this question have concluded that ‘surface water’ includes water on a roof”); ..., and that it does not[.]  As illustrated by our discussion of case law from other jurisdictions, there does not appear to be a definite majority position on the issue.  We also note that most jurisdictions that have defined the term "surface waters" in the insurance context have done so only in cases involving water at ground level.

Case law interpreting exclusions of this kind is discussed in § 7:16 by Dennis J. Wall in CATASTROPHE CLAIMS / Insurance Coverage for Natural and Man-Made Disasters (Thomson Reuters West Nov. 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Ensuing Loss.

Loss ensuing from a construction defect exclusion, and thus within the exclusion's exception for ensuing loss which is covered under the insurance policy, has been held to mean "simply the cost to repair the construction defect[.]" Cincinnati Ins. Co. v. Ropicky, No. 2023AP588, ___ N.W.3d ___, 2024 WL 5220615, ¶38, at p. *10, 2025 WI App 5 (Wis. Ct. App. Dec. 26, 2024).

            The same result was reached in an earlier Wisconsin intermediate state appellate court decision, in which the appellate court confronted this language of ensuing loss in a case of apparent first impression. Arnold v. Cincinnati Ins. Co., 276 Wis. 2d 762, 778 ¶ 27, 688 N.W.2d 708, 715 ¶ 27, 2004 WI App 195 ¶ 27 (Wis. Ct. App. 2004). 

Case law on the issues in this case is set out in § 7:16, Volume 1 of CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Judge Chutkan's Order Denying States' TRO Request Shows The Way.

No, she did not rule that it is okay for the Valley Boys to play with your Personally Identifiable Information in the government's computers.

Click on this Author Photo, Docusigned Declaration dated February 10, 2025, filed in  New Mexico v. Musk, Emergency Motion for TRO filed by State of New Mexico on Feb. 14, 2025, Doc. No. 6, Ex. 11 (D.D.C. No. 25-cv-429 (TSC)). 

Fourteen States represented by their Attorneys General sued to keep Mr. Musk's interns from sharing your Personally Identifiable Information and accessing the federal government's computers.  Their lawsuit is still pending.  It asks a federal court for an injunction and to declare the computers off limits.  Download New Mexico v. Musk Complaint Doc. No. 2 filed Feb. 14 2025 (D..D.C. No. 25.cv.429 (TSC)).

The Attorneys Generals' Offices include a lot of truly talented people.  They convinced the judge of most of their case when they requested a Temporary Restraining Order (TRO), which is a special injunction intended to immediately preserve the status quo while the judge decides how to rule in the end.  However, they failed to prove something crucial to their case, something they had to know is crucial from the beginning:  irreparable harm if the Fourteen States did not get an injunction, at this time, a TRO.

The Fourteen Offices of the Fourteen State Attorneys General have access to all the agencies of their States.  They knew going in that they would need to show irreparable harm to their clients, the Fourteen States.

Fourteen Attorneys General Offices.  Whether or not they were asked before, every one of them must be asked to scour their  own State's agencies for someone to be able to offer a Declaration or Affidavit on personal knowledge about the harmful effect of the Silicon Valley Boys from accessing computer networks at federal agencies.

By my count, and I probably missed one or two, their complaint identified 16 federal agencies that the Silicon Sillies accessed, including the Centers for Medicare and Medicaid Services, the Centers for Disease Control, and the Consumer Financial Protection Bureau.  Of these three that particularly stand out, the complaint contains the most allegations about the CFPB, and even then there is no showing of irreparable harm.  (A few details about the CFPB are alleged in Paragraphs 146-148 on page 34 of the Complaint that the 14 States filed on Valentine's Day, 2025, but nothing to evidence irreparable harm to the 14 States as a result of the interns rummaging about in the CFPB computer systems.)

Instead, the Complaint of Fourteen States refers a lot to newspaper reports about national security matters and potential effects on the States.

Not a word about CMS and its effects on any programs of the Fourteen States, even before the computer meddling began.  The Complaint did allege that this agency is responsible for Medicare and Medicaid programs.  Not a word about how interference with CMS's computers has affected Medicare and Medicaid programs administered by the States, the AGs' clients in this case.  Medicaid in particular depends on the States; witness the continuing brouhaha over the refusal of a handful of States to expand the Medicaid programs in their States.

On the other hand, there were a couple of further allegations about the effect of the computer takeover on the CDC.  The Complaint alleges that the computer takeover must have affected the Fourteen States, without any proof or plausible allegations of actual harm, even though we are still in the midst of a Pandemic and people are still dying, including people that rely on public health programs administered by the States.

The Request for a TRO parrots the Fourteen States' Complaint.

The Fourteen States' Attorneys General Offices did file eleven (11) Declarations with their Request for a TRO.  I have reviewed them all.  The persons who testified in the Declarations did not testify to any actual harm to the programs of any of the States.

It is worth noting something that the judge and her law clerks would have seen.  One of these Declarations was submitted to the Court Docusigned by Mr. Wayne Propst of New Mexico.  The title of his Declaration is "DECLARATION OF [NAME]," with the "[NAME]" highlighted in yellow, apparently waiting in vain to be filled in.  The document is dated four (4) days before it was filed in the Court File.  That's enough time to proof it and fill in the missing name, at the very least.  See New Mexico v. Musk, Emergency Motion for TRO filed by State of New Mexico on Feb. 14, 2025, Doc. No. 6, Ex. 11 (D.D.C. No. 25-cv-429 (TSC)).  Or so the judge and her law clerks would have seen it.

Record evidence in sworn Declarations and Affidavits of irreparable injury to these Fourteen States.  That is what the judge looked for and did not find.

That's what she based her whole ruling on.  She wrote plainly:

          The court’s analysis here begins and ends with irreparable harm, “a threshold requirement in granting temporary injunctive relief.”

 Order at page 5.  Download New Mexico v. Musk Memorandum Opinion and Order Doc. No. 29 filed Feb. 18 2025 (D..D.C. No. 25.cv.429 (TSC)).

Perhaps this case would benefit from adding some individuals as plaintiffs.  That could be an improvement but it would be an improvement only if they file Declarations and Affidavits documenting their irreparable injury.

Documenting irreparable injury.  That's what the judge said was missing here:

When litigants have identified specific individuals or programs imminently targeted by Defendants, courts have issued appropriately tailored TROs.

Order at page 7 (emphasis added).  Those who have eyes to see with, let them see.  I have added boldfacing and italics to help in that effort.

We should soon see Declarations and Affidavits in the Court File documenting irreparable injury to the programs of these 14 States, and perhaps to specific individuals who will be added as plaintiffs in this case.  It is to be hoped.

Note to the Fourteen Attorneys General Offices:  If however you do not have the evidence, don't file the motion until the evidence develops.  It is undoubtedly true that there has been tremendous pressure to stop the bleeding right now, so to speak.  But the greater objective is to stop the Code Red Boys including Big Balls from seeing and sharing your citizens' Personally Identifiable Information.

In the meantime, the press has got it wrong again.  Here's another ruling by a judge that the press just doesn't understand.  Perhaps experienced and knowledgeable journalists would have known that Judge Chutkan's ruling was not an endorsement of Silicon Valley Arrogance.

Nor was her ruling an affirmation of the Re-Code Gang, the misbehaving children who escaped from computerland and were released inside the computers of federal agencies.  That these male misfits are coding is ironic because in their Silicon Valley culture, they look down on coding as beneath them, as clerical, as the only work they will allow females to do in their Valley.

Experienced and knowledgeable journalists have been let go or taken early retirement with a deservedly profitable pay package.  In either case, they are no longer around.

And it shows.

So, back to the case of the 14 States and their attempt to take computer access back from the Valley Boys.  Either the 14 AGs will file another request for a Temporary Restraining Order or they will file a motion for a Preliminary Injunction, but either way they must get the evidence that the judge said she needs:

          Plaintiffs legitimately call into question what appears to be the unchecked authority of an unelected individual and an entity that was not created by Congress and over which it has no oversight. In these circumstances, it must be indisputable that this court acts within the bounds of its authority. Accordingly, it cannot issue a TRO, especially one as wide-ranging as Plaintiffs request, without clear evidence of imminent, irreparable harm to these Plaintiffs. The current record does not meet that standard.

Order at page 9 (emphasis added).  Once again, still it must be said now, as was said thousands of years ago:  "Those who have eyes to see with, let them see."

Hindsight is 20-20, but I think it is clear what happened here.  It is clear even to a person like me who has had difficulty keeping up with all the recent events in D.C., as I suspect you have as well.  It seemed sudden, as a result, that this case surprisingly posted an "L" in the Won-Lost Column of the Good Guys here.  It is clear that the people who put their names on the Complaint in this case think of themselves as among the Good Guys.

Judge Chutkan's Order of February 18, 2025 shows the way to an eventual "W."  Lawyers, go that way for the sake of the nation, for the sake of your Fourteen States, and last and least, for your own sakes.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter.