Claims and Bad Faith Law Blog

TWO RULES OF THREE, OR IS IT?

In the case of John F. Kennedy ex rel. Education Corp. of Am. v. Nat'l U. Fire Ins. Co. of Pittsburgh, Pa., No. 5:24-cv-00082-TES, 2024 WL 3891489 (M.D. Ga. Aug. 21, 2024), a federal judge applied two rules of three under Georgia bad faith law.  Or perhaps more accurately, the federal judge applied one rule of two with a complete defense, and one rule of three with a complete defense.

          Whatever.

          The only remedy for insurer bad faith under Georgia law is afforded by a statute, Ga. Code Ann. § 33-4-6.  Without strict construction of its three requirements, it has been held that the Georgia statute "would impose a penalty on any wayward company."  John F. Kennedy, 2024 WL 3891489, at *9.

          The statute requires that bad faith be proven by a plaintiff meeting three elements which the federal judge explained as follows:

1. "First, the claims must be covered under the policy."
2. "Second, the insured must make a demand for payment against the insurer within 60 days prior to filing suit."
3. "And third, the insured must prove that the insurer's failure to pay was motivated by bad faith."

  John F. Kennedy, 2024 WL 3891489, at *11.  However, Georgia law recognizes a complete defense to insurer bad faith claims if the insurance carrier "'has any reasonable ground to contest the claim[.]'"  John F. Kennedy, 2024 WL 3891489, at *11.

          In this case, the Estate of Education Corporation of America was the first named plaintiff and it was represented by Mr. Kennedy, its Receiver.  The plaintiff dismissed an earlier suit, sent a bad-faith demand letter, and then re-filed what became the instant case.  National Union raised several arguments in its motion to dismiss the bad faith claims at bar.  "Most notably, it argues Georgia law does not allow a plaintiff to dismiss a suit, send a bad-faith demand letter, and then refile under the renewal statute [Section 33-4-6]."  John F. Kennedy, 2024 WL 3891489, at *9.

          The Georgia bad faith statute interpreted by the federal judge in this case was held to have several requirements which some lawyers may call conditions precedent, although the Court does not appear to have used that description in this case.  The first requirement is that "the policyholder must first send a demand notifying the insurance company of an impending bad-faith claim."  John F. Kennedy, 2024 WL 3891489, at *9 (emphasis added).  The italicized language shows the nub of National Union's argument on this point:  The first time that the same claims were presented to National Union, it was apparently a lender and not the "policyholder" that presented them, which the policyholder cured if you will after it voluntarily dismissed its earlier coverage case and before it refiled its new case including claims for bad faith.

          The second requirement as the Georgia bad faith statute has been interpreted, requires that the policyholder's demand "must be sent 60 days before the policyholder files suit claiming damages and fees under § 33-4-6."  John F. Kennedy, 2024 WL 3891489, at *9.

          The third requirement is not really a condition precedent but is more in the nature of a complete defense to bad faith claims under Georgia law:  "This statute operates as the exclusive remedy for claims of bad faith in the world of insurance-coverage disputes governed by Georgia law."  John F. Kennedy, 2024 WL 3891489, at *9.

          On the facts alleged in the Amended Complaint before him, the federal judge presiding over this case denied National Union's motion to dismiss the bad faith claims alleged against it here.  John F. Kennedy, 2024 WL 3891489, at *11.

          The federal judge's opinion in this case was scholarly and well-researched.  It was also by far the most fun opinion I have read written by any federal judge appointed during the American Apocalypse between the afternoon of January 20, 2017 and the morning of January 20, 2021, as this judge was.  It would be interesting to read opinions written by this same judge involving different claims than the claims presented in this case.

Civil remedy notices of insurer violation, like the demand notices in the John F. Kennedy case in Georgia, are discussed in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH §§ 3:30 & 5:57 (Thomson Reuters West Publishing Co. 3d Edition & 2024 Supplements).  The defense that the carrier had a fairly or reasonably debatable claim is addressed in id. §§ 5:16 &  5:51.

          All these discussions concern third-party claims like those at issue in the John F. Kennedy case.  First-party cases are discussed in 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH §§ 9:21, 11:17  & 11:24 (Thomson Reuters West Publishing Co. & 2024 Supplements).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.  Check out my Substack newsletter.

 

DON'T LIKE NURSING STAFF STANDARDS? LAWSUIT! N.D. TEXAS, AMARILLO DIVISION.

Are you against nursing staff standards in Nursing Homes?  Too expensive, perhaps?  Pay lawyers instead!

          File suit!  Block the standards from taking effect!  Run Nursing Homes your way!  But where to file suit?  The answer comes in a moment.

          In 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.  For some reason, this is the courthouse of choice where plaintiffs include organizations that have been formed for the purpose of opposing allegedly "onerous" rules like standards for nursing staff in Nursing Homes.

          For some reason, there is only one judge assigned to the Amarillo Division.  That judge was appointed during the American Apocalypse between the afternoon of January 20, 2017 and the morning of January 20, 2021.

          For some reason, the same judge rules against the United States in these cases.

          In the lawsuit to block the "onerous" nurse staffing standards in Nursing Homes, something called 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" is a figment of the American Apocalypse, chiefly originating sometime between the afternoon of January 20, 2017 and the morning of January 20, 2021.  Not so longstanding.

          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.

          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 Garland 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.

          So it's on to 2025.  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.  I cannot find any Order on the docket that says that the staffing standards are not in effect.

          However I do find several Orders granting leave to foreign lawyers to put in their appearances in the case.

          But no Orders enjoining the enforcement of the staffing standards for nurses in Nursing Homes, wherever they are located.  And as yet, no stipulations either.

          Time will tell, perhaps.

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

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DID THE SUPREME COURT OVERRULE THE FILED RATE DOCTRINE?

The filed rate doctrine suspends judicial inquiry into a claim.  It applies when the defendant has received approval from an authorized administrative agency to charge a rate which the defendant filed for the administrative agency's approval.  The filed rate doctrine or FRD has been applied to insurance cases.  2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 11:26.75, Insurance Cases and the Filed Rate Doctrine—Challenging the Filed Rate Doctrine Defense (West Publishing 3d Edition & 2024 Supplements).

          Query:  Has the Loper Bright Enterprises v. Raimondo, 144 S.Ct. 2244 (U.S. June 28, 2024) decision turned the filed rate doctrine into the judge rate doctrine?

          Answering this question fully would probably take a new book in itself.  In the interim, active practitioners should consider raising the issue in pending cases.

          Once that's done, after a while there will be enough case law and perhaps statute law that it will be time for that new book.

The various manifestations and justifications of the Filed Rate Doctrine in the previously decided case law, including in insurance cases, are addressed in 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH §§ 11:26-11:26.75 (West Publishing Co. 3d Ed.& 2024 Supplements).

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

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COMPARATIVE BAD FAITH. THE CONTINUING CASE OF A NONEXISTENT NEED.

 The Florida Legislature changed bad faith law in 2023.   This was a foretaste of what is to come.  Enacting a law drawn up by the insurance industry, in 2023 the Florida Legislature became the first State legislature to make a new defense of comparative bad faith.  It will not be the last.

            The 2023 Florida Legislature took the issue away from the Florida courts where, as in each and every other American jurisdiction, the courts rejected the very idea of comparative bad faith.  A federal judge's summation of the law was quoted in the article posted here yesterday; it is so clear and concise that it is well worth repeating:

This inquiry looks at the facts of each case and at the "totality of the circumstances." [Citations omitted.]  The proper focus of the inquiry is on the actions of the insurer rather than on the actions of the insured, the claimant, or the claimant's attorney.   Thus, when the evidence clearly establishes the insurer acted in bad faith, the insurer may not escape liability merely because the insured or the claimant may have contributed to the failure to settle the claim. [Citation omitted.]  At the same time, while the focus is on the insurer's conduct, the conduct of the insured or the claimant is relevant as part of the totality of the circumstance.[1]

The judge wrote this before granting the carrier's motion for summary judgment in that case.

            Before the legislature changed it in 2023, bad faith law in Florida, as elsewhere, focused on the carrier's conduct but took into account the relevant actions of the insured, the claimant, or their authorized representatives including attorneys.  Florida imported insurance bad faith law from Wisconsin no later than 1938, and it has been Florida law practically from the beginning to consider the totality of the circumstances when considering an insurance carrier's exposure to bad faith liability.[2] 

    It has been repeated so often since that sometimes the recitation of it can put you to sleep.    The "totality of the circumstances" standard of liability for insurer bad faith was recited in cases you might have heard of, even if you do not practice in Florida, in for example, Harvey v. GEICO General Insurance Co.[3] in 2018; Berges v. Infinity Insurance Co.[4] in 2004, and perhaps most famously in Boston Old Colony Insurance Co. v. Gutierrez[5] in 1980.

            In Auto Mutual Indemnity Co. v. Shaw, the carrier was awarded a new trial on bad faith in 1938.  In Boston Old Colony, a judgment against the carrier for bad faith failure to settle was reversed and the case remanded in 1980.  Perhaps the history of insurer bad faith law has been obscured by looking only at some  recent decisions.  But that is speculation, of course.

            The point is pretty clear:  Bad faith law considered the totality of the circumstances.  The totality of the circumstances always included the conduct of everyone on the scene:  the carrier, the policyholder, the claimant if there was one, and their authorized representatives including lawyers.  In 2023, that changed in Florida and it was the Florida Legislature that changed it, not a court.

            For the first time, a State legislature enacted a new law of comparative bad faith.  That the law was written by insurance carriers and their authorized representatives means that it will be introduced into other State legislatures across the United States in the near future.  It will address the nonexistent problem of "the bad faith setup;" insurance carriers have always had the ability to control their own conduct, as has been seen in many of the cases cited earlier in this article.

            The language in the new Florida statutes, and the implications for the rest of the country, are addressed in the next article to be posted here.  To be continued ....

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

 

[1] Wiseman v. Progressive Paloverde Ins. Co., No. 8:21-cv-2743-TPB-AAS, 2023 WL 8877842, at *11 (M.D. Fla. Dec. 22, 2023 (italics by the Court, boldface added), app. voluntarily dismissed,  No. 24-10187,  2024 WL 3436239 (11th Cir. May 7,  2024).

[2] The Florida Supreme Court adopted the law of insurer bad faith from Wisconsin in the case of Auto Mutual Indemnity Co. v. Shaw, 134 Fla. 815, 829-30, 184 So. 852, 858 (Fla. 1938), quoting with approval Hilker v. W. Auto. Ins. Co., 204 Wis. 1, 231 N.W. 257 (Wis. 1930).

[3] Harvey v. GEICO Gen. Ins. Co., 259 So. 3d 1, 7 (Fla. 2018).

[4] Berges v. Infinity Ins. Co., 896 So. 2d 665, 677 (Fla. 2004).

[5] Boston Old Colony Ins. Co.  v. Gutierrez, 386 So. 2d 783, 785-86 (Fla. 1980), cert. denied, 450 U.S. 922, 101 S. Ct. 1372 (U.S. 1981).

THERE IS NO "BAD FAITH SETUP PROBLEM" ....

....THE "BAD FAITH SETUP PROBLEM" DOESN'T EXIST.  AND COMPARATIVE BAD FAITH IS NO SOLUTION. 

Sadly, the "bad faith setup" has always been a myth.  It is sad because some part-time legislators in various States are being convinced to vote for solutions written by insurance companies to solve a nonexistent problem.  They could spend their time actually doing good work, but they spend their time on this.

    A federal judge summarized the Florida law of bad faith precedent in terms almost universally descriptive of bad faith law in United States jurisdictions.  Juries and judges almost always take the insured's and the claimant's conduct into account in first-party and third-party bad faith cases alike:  

            This inquiry looks at the facts of each case and at the "totality of the circumstances." [Citations omitted.]  The proper focus of the inquiry is on the actions of the insurer rather than on the actions of the insured, the claimant, or the claimant's attorney.   Thus, when the evidence clearly establishes the insurer acted in bad faith, the insurer may not escape liability merely because the insured or the claimant may have contributed to the failure to settle the claim. [Citation omitted.]  At the same time, while the focus is on the insurer's conduct, the conduct of the insured or the claimant is relevant as part of the totality of the circumstance.[1]

Under Florida law the insurance carrier received a summary judgment of no bad faith under the facts of this case.  So it has been since bad faith law was imported into Florida no later than 1938.

This changed in 2023 in Florida, from which we will take our lead example.  This quotation represents a bygone era in the bad faith inquiry in Florida cases.  In future articles, we will take a look at the Florida example of inventing comparative bad faith in the legislature when no judge who confronted the idea ever did anything other than reject it. 

To be continued ....

[1] Wiseman v. Progressive Paloverde Ins. Co., No. 8:21-cv-2743-TPB-AAS, (M.D. Fla. Dec. 22, 2023 (italics by the Court, boldface added), app. voluntarily dismissed, No. 24-10187, 2024 WL 3436239 (11th Cir. May 7, 2024).

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

SHARING CLAUSES, STIPULATED PROTECTIVE ORDERS, AND FEDERAL COURTS.

Courts generally accept stipulated protective orders proposed by the parties.  In federal courts, there is a prevailing conception that “sharing clauses” are frowned upon, in line with the usual prohibition on sharing discovery in one case with other cases. “Sharing clauses” can be found in stipulated protective orders authorized by the courts.

            However, it has been observed that federal courts disfavor sharing clauses. This observation was made by a U.S. Magistrate Judge in a case in which she refused to authorize a sharing clause.¹ In an opinion that may inadvertently become a guide for parties and their lawyers to make a showing in federal courts as to why a sharing clause should be given effect, the Magistrate Judge wrote in such a way as to illustrate two ways in which such a showing might be made successfully.  Careful readers of court opinions will see this right away when they read the opinion in this case.

            The first way lies in the decided case law analyzed by the Magistrate Judge to the effect that the courts have authorized the use of sharing clauses when the party seeking to share has made a showing that the discovery in question is “highly relevant to other litigation,” and so sharing the subject discovery among different cases would have the following salutary effects that might be attractive to a federal judge:

• avoiding duplication;
• promoting efficiency;
• minimizing discovery costs, and 
• conserving judicial resources..”²

            The second way of making such a showing in a case in federal court suggested by the Magistrate's opinion is to "articulate[] specific ways in which the sharing of information could be useful to this case."³ There may be overlap between these two ways of making a successful showing that a sharing clause is desirable in a given case, but the second way mentioned here allows the possibility of other proofs besides those at work in the first way.

 

[1]   SRH Holdings, LLC v. Gov't Emp's Ins. Co., No. 23-10325-DJC, 2024 WL 51279, at *1 (D. Mass. Jan. 4, 2024) (Boal, USMJ).

[2]  SRH Holdings, 2024 WL 51279, at *1.

[3]  SRH Holdings, 2024 WL 51279, at *2. 

 

Please read the disclaimer.  This blog post ©Dennis J. Wall 2024.  All rights reserved.

PRIVATE EQUITY, ANESTHESIA AND HEALTH CARE, AND ANTITRUST.

The Federal Trade Commission filed a complaint against Anesthesia Partners, Inc. and the outfit, a private equity firm named Welsh Carson, that allegedly took it over before it resold it to a corporation formed for the purpose of the resale.   Download FTC v. U.S. Anesthesia Ptrs Inc. Redacted Public Version (of FTC Complaint) DE 69 filed Oct. 26 2023 (S.D. Tex. No. 4.23-cv-03560).  The FTC alleged that both Anesthesia Partners (USAP) and Welsh Carson committed antitrust violations.  The background of the FTC's case was previously explained here in several articles posted on September 29, 2023, on October 2, 2023, and on October 4, 2023. 

          USAP filed a motion to dismiss the FTC's lawsuit against it.  USAP predictably argued  that it was not violating antitrust laws, but it also argued that Section 13(b) of the FTC Act did not support the FTC's lawsuit where the FTC did not file a simultaneous administrative proceeding against USAP, and for good measure that the FTC is unconstitutional.  USAP also raised the issue in its motion to dismiss that the FTC based its claims on an impermissible market definition.

          USAP's motion to dismiss was denied by the District Court, and USAP filed an appeal from the District Court's denial of its motion to dismiss.  FTC v. Anesthesia Ptrs., Inc., No. 4:23-cv-03560, 2024 WL 2137649, at *6-*9 (S.D. Tex. May 13, 2024), app. docketed, No. 24-20270 (5th Cir. June 17, 2024).  In the course of denying USAP's motion to dismiss, the District Court quoted several of the FTC's allegations, including this one:

The FTC quotes an insurance executive describing USAP's consolidation strategy as “tak[ing] the highest rate of all ... and then peanut butter spread that across the entire state of Texas.” 

FTC v. Anesthesia Partners, 2024 WL 2137649, at *9. 

          The District Court granted Welsh Carson's motion to dismiss, in contrast.  FTC v. Anesthesia Partners, 2024 WL 2137649  at *4-*6.  Welsh Carson successfully argued that it, the private equity financier, did not violate and was not about to violate antitrust laws based on the allegations in the FTC's complaint.

          So it's on to the Fifth Circuit where USAP hopes that it will find a more receptive audience for its arguments including that the FTC is unconstitutional despite some 90 years of precedent to the contrary.

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

INSURANCE COVERAGE FOR RIGHT TO ABORTION ON COLORADO BALLOT.

Health insurance coverage for abortion shall not be prohibited in Colorado if a proposed Amendment to the Colorado Constitution is passed in November, 2024.

          In Dobbs v. Jackson Women's Health Organization, 527 U.S. 215, 142 S. Ct. 2228 (2022). the U.S. Supreme Court took away the right to choose an abortion which was formerly recognized under the  U.S. Constitution.  In an interesting response to that decision, an amendment to the Colorado Constitution is on the ballot which would not only recognize that right but bar "Government" from prohibiting health insurance coverage for abortion.  Here is the text of the proposal:

The right to abortion is hereby recognized.  Government shall not deny, impede or discriminate against the exercise of that right including prohibiting health insurance coverage for abortion.

This is the text of the final language of the proposed amendment which was filed with the Colorado Secretary of State in Initiative 89, available at   https://www.sos.state.co.us/pubs/elections/Initiatives/titleBoard/filings/2023-2024/89Final.pdf.  It was also published by ballotpedia at  https://ballotpedia.org/Colorado_Right_to_Abortion_and_Health_Insurance_Coverage_Initiative_(2024).  According to Initiative 89 filed with the Colorado Secretary of State, a previous iteration of the Colorado Constitution was misinterpreted to permit the prohibition of insurance coverage for abortion, and that is why the current proposal would address that issue.

The variety of responses to the Dobbs decision, and the many issues of insurance coverage that the Dobbs decision has spawned and may spawn, are addressed in Chapter 18F in  Volume 2 of CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters June 2024 Edition).  The new Chapter, by Dennis Wall, is titled, Catastrophes of the End of Privacy, the Overruling of Constitutional Rights, and Once Again the Activist Judicial Decisions.

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

THE MANY FACES OF BAD FAITH. This is one.

This article continues from the article posted here on Monday of this week, the first day of a new month.  In this continuation, we learn how the Florida intermediate appellate court ruled on the narrow question before it in the Markuson case.

The Court in the Markuson case concluded:

          We conclude that the trial court correctly determined that [the defendant liability insurance company] had no duty to enter into a consent judgment in excess of the limits of its policy. Having so determined, we hasten to add that our affirmance of the trial court’s ruling is limited to the [one] theory of bad faith the court addressed. The trial court erred by entering a final judgment in favor of [the defendant liability insurance company] to the extent the Appellants’ claims raised other theories of  bad faith governed by Boston Old Colony [Insurance Co. v. Gutierrez, 386 So. 2d 783 (Fla. 1980)] and its progeny. For that reason, we must reverse the partial final judgment and remand for further proceedings.[1]

[1] Markuson, 2024 WL 817545, at *4.

The questions in bad faith cases are explored in the Two Volumes of Dennis J. Wall's Book, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process).  This blog article ©2024 Dennis J. Wall.  All rights reserved.  Please read the disclaimer.

NO IMMUNITY FOR BAD FAITH.

It does not take 20 pages to say that.  If you take 20 pages to say something other than that, you are deliberately sacrificing the truth behind your obscurity.  You are perhaps trying to immunize bad faith, for example.

 Crimes committed in an official capacity are still crimes.

          Crimes are always in bad faith.  Never in good faith.

          In a just world, there is never immunity from bad faith consequences.  Nor should there ever be.

          John Roberts took 20 pages to say the opposite.  (Westlaw has numbered his piece from page *6 through page *25.)  As practicing lawyers, we know the signs, don't we:  You do not take 20 pages to say the truth.  As in this case, the truth is often much easier to write in a shorter space.

          Twenty pages and six votes do not a Constitution make.  Not in 2024, and not ever.

Decisions on insurer immunity in bad faith cases are explored in the Two Volumes of Dennis J. Wall's Book, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process).  This blog article ©2024 Dennis J. Wall.  All rights reserved.  Please read the disclaimer.

 

THE MANY FACES OF BAD FAITH.

The question of bad faith depends on the circumstances and so answering the question will involve a lot of theories of bad faith:

          We pause here to emphasize that the ultimate question in a bad faith  cause of action is whether the insurer breached the duty owed to the insured to make decisions in good faith with proper care and concern given to the interests of the insured.[1]

 

[1] Markuson v. State Farm Mut. Auto. Ins. Co., ___ So. 3d ___, No. 2D21-2443, 2024 WL 817545, at *3 (Fla. 2d DCA Feb. 28, 2024).

 

The questions in bad faith cases are explored in the Two Volumes of Dennis J. Wall's Book, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process).  This blog article ©2024 Dennis J. Wall.  All rights reserved.  Please read the disclaimer.

WHEN DOES THE DUTY TO DEFEND INCEPT?

There are different views among the courts as to when the duty to defend is triggered under a liability insurance policy.  South Carolina has given the usual answer, for example.

   "In South Carolina, the duty to defend arises when a covered lawsuit is filed—not when the insured gives notice of that suit or demands a defense."  Harriman v. Assoc. Indus. Ins. Co., 91 F.4th 724, 729 (4th Cir. 2024) (emphasis by the Court).

The many cases on the subject are discussed in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH §§ 3:51 through 3:54 (West Publishing Co. 3d Edition, 2024 Supplements in process).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

SETTLE SOME, BUT INVESTIGATE ALL.

It seems fair to say that this is now the settled rule under Florida law:  A liability insurance company can settle with some claimants and not others, but it has a legal duty to fully investigate all claims.[1]

[1] See Primeaux v. Progressive Am. Ins. Co., 620 F. Supp. 3d 1173, 1179 (M.D. Fla. 2022).

 

Investigation and settlement are discussed in the context of both third-party and first-party insurance bad faith cases in both Volumes of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

THE QUESTIONS OF INTERPLEADER AND ATTORNEY'S FEES.

In Minnesota Life Ins. Co. v. Alexander, ___ F. Supp. 3d ___, No. 2:22cv207, 2023 WL 6290820 (E.D. Va. Sept. 25, 2023) the Court allowed a life insurance company to interplead multiple various entities which did or could claim to be beneficiaries.  Minnesota Life, 2023 WL 6290820, at *4.

              But the Court did not allow the life insurance company to recover its attorney's fees in the interpleader.  The Court ruled, in a case of apparent first impression within the Fourth Circuit, that the interpleading insurance company cannot recover its fees and costs where it is acting in the ordinary course of business in bringing the interpleader.   That was the case here, the Court ruled.  Minnesota Life, 2023 WL 6290820, at *4-*5.

Interpleader and attorney's fees are discussed in the context of both third-party and first-party insurance bad faith cases in both Volumes of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

THE LATEST ON NO COVERAGE, NO BAD FAITH.

"Where there is no duty to defend and no right to indemnification under an insurance policy, courts have dismissed claims for bad faith and violations of the UIPA [New Mexico Unfair Insurance Practices Act]."  Mayer Botz Enter's LLC v. Cent. Mut. Ins. Co., No. 1:21-cv-00992-MLG-LF, 2024 WL 1015145, at *4 (D.N.M. March 8, 2024) (summary judgment entered for carrier on first-party bad-faith and UIPA claims).

The latest decisions on the issue of whether there can be a cause of action or an actionable claim for insurer bad faith even when there is no insurance coverage under the policy at issue (some courts hold that there can), are explored at length in first-party and in third-party bad faith cases in the 2 Volumes of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (3d Edition West Publishing Co., 2024 Supplements in process).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

VIRGINIA'S UNFAIR CLAIM SETTLEMENT PRACTICES ACT: A QUICK LOOK.

Virginia's Unfair Claim Settlement Practices Act is codified in Va. Code Ann. § 38.2-510.  It parallels the National Association of Insurance Commissioners' Model Unfair Claims Settlement Practices Act in pertinent part.  It has been held that the Virginia Unfair Claim Settlement Practices Act does not convey a cause of action.  Sustainable Sea Prod's Int'l, LLC v. Am. Emp. Surplus Lines Ins. Co., No. 3:21cv697, 2022 WL 3573247, at *4 (E.D. Va. Aug. 19, 2022).

Virginia's statute is one of many Unfair Claim Settlement Practices Acts given a look while exploring third-party and first-party bad faith statute and case law in the 2 Volumes of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (3d Edition West Publishing Co., 2024 Supplements in process).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

INSURANCE BAD FAITH DEPENDS ON EXISTENCE OF AN INSURANCE CONTRACT.

Insurer bad faith is not always remediable in an action for  breach of contract.  In many jurisdictions, bad faith is a tort.  In many other jurisdictions, bad faith is a statutory remedy only.  Regardless of how insurer bad faith may be actionable in the courts of a given jurisdiction, at least one thing is a constant in all the cases:  There must be an insurance contract.

    As the Supreme Court of Ohio has put it:  "Importantly, a bad-faith claim is not rooted in any particular text of the contract....  Consequently, the existence of an insurance contract is what causes the common-law rule to apply to particular entities."  Scott Fetzer Co. v. Am. Home Assur. Co., ___ N.E.3d ___, No. 2022-0595, 2023 WL 7170739, at ¶ 23, p. *5, 2023-Ohio-3921 (Ohio Nov. 1, 2023)  (emphasis added).

This case is among the new cases and statutes featured in DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

IN CASE YOU THINK IMPARTIALITY MIGHT REASONABLY BE QUESTIONED.

In case you were thinking about lawyers and filing recusal motions in pending cases in the U.S. Supreme Court, here are some names and titles and addresses where you can share your views.  In particular, if you think that it is a lawyer's duty to a client to represent the best interests of the client, perhaps you also think that if your client is the United States that a recusal motion might be in order before any more time goes by.

          If you think that, say so.

          If you do not think so, continue to say and do nothing.  It is not my task to persuade you, but consider this.

          The recent behavior of Justice Alito and also of Justice Thomas leads many people to reasonably question their impartiality.  This is the first and overall reason for them to recuse themselves in pending cases under the federal recusal statute.  28 U.S.C.A. § 455(a).

          Both of these gentlemen have involved their wives in their refusals to recuse themselves.  But the federal statute says that they shall "also" recuse when they each know that he (in this case, they are both "he's") "his spouse ... has ... any other interest that could be substantially affected by the outcome[.]"  28 U.S.C.A. § 455 (b)(4).  In my eyes, both of these gentlemen's statements are admissions that their respective spouses have an interest that could be substantially affected by the outcome in cases pending before them.

          Time is urgent.  The Supreme Court is going to issue its opinion in the immunity case and other insurrection-related cases any day now.  Obviously, it would be better to have a recusal motion filed before any opinions are issued.

          Since the lawyers for the United States have not filed a recusal motion, the people of the United States who reasonably question the impartiality of Justice Alito or Justice Thomas as judges in pending cases should make themselves heard.  I have been EMailing and writing just that and I urge you to contact these lawyers as well.  All it takes is to tell them that the recent behavior of Justices Alito and Thomas lead people to reasonably question their impartiality and that as lawyers with the United States for a client, these lawyers have an obligation to represent the best interests of their client and file a recusal motion now:

1. In the case of Trump v. United States, the immunity case:

Jack L. Smith, Esquire, Special Counsel; et al.

Department of Justice

950 Pennsylvania Ave, NW

Washington, D.C.  20530-0001

[email protected]

2. In the case of Fischer v. United States, one of the insurrection cases:

Elizabeth B. Prelogar, Esquire, Solicitor General; et al.

Department of Justice

Washington, D.C.  20530-0001

[email protected]

3. Everyone else:

J.P. Cooney, Esquire, Deputy Special Counsel

Department of Justice

950 Pennsylvania Ave, NW

Washington, D.C.  20530-0001

[email protected]

This lawyer has been involved in many cases involving issues of integrity and he is a former Chief of the integrity section of the U.S. Attorney's Office for D.C.

 

 

Matthew M. Graves, Esquire

U.S. Attorney for D.C.

Denise Cheung, Chief of the Criminal Division,

     U.S. Attorney's Office for D.C.

[email protected]

Liz Aloi, Esquire, Chief of the Public Corruption and

          Civil Rights Section, U.S. Attorney's Office for D.C.

The mailing address for everyone at the U.S. Attorney's Office for D.C. is:

U.S. Attorney's Office for D.C.

601 D Street, NW

Washington, DC  20579

Finally, the name and mailing address of the current Solicitor General of the United States.  She clerked for Merrick Garland when he was a judge:

Elizabeth B. Prelogar, Esquire, Solicitor General

Office of the Solicitor General

950 Pennsylvania Ave, NW

Washington, DC  20530-0001

Please read the disclaimer.  The contents of this blog article, exclusive of names and titles and addresses,  © 2024 Dennis J. Wall.  All rights reserved.

 

 

PREDICTIONS ARE RISKY THINGS.

Predictions are risky things.  I thought that the change in composition of the Florida Supreme Court that decided Harvey v. GEICO Gen. Ins. Co., 259 So. 3d 1 (Fla. 2018), which I have described in Volume 1 of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process), would render the Harvey case as a weak precedent to follow.  Judges in different Courts disagree, particularly in Federal cases involving Florida law, in which Harvey has been followed as guiding precedent:  E.g., Pelaez v. Gov't Emp's Ins. Co., 13 F.4th 1243, 1254 (11th Cir. 2021), cert. denied, 142 S. Ct. 1672 (U.S. April 18, 2022); Wiseman v. Progressive Paloverde Ins. Co., No. 8:21-cv-2743-TPB-AAS, 2023 WL 8877842, at *10  (M.D. Fla. Dec. 22, 2023), app. docketed, No. 24-10187 (11th Cir. Jan. 19, 2024); Colello v. GEICO Gen. Ins. Co., ___ F. Supp. 3d ___, No. 6:22-cv-1262-RBD-RMN,  2023 WL 6850954,  at *2 (M.D. Fla. Oct. 13, 2023), app. docketed, No. 23-13689 (11th Cir. Nov. 6, 2023).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

IS A DEMAND ALWAYS NECESSARY FOR BAD FAITH IN SETTLEMENT?

After citing Illinois, South Dakota, and Tennessee cases, the Court in Sacred Heart Health Serv's v. MMIC Ins., Inc., ___ F. Supp. 3d ___, No. 4:20-CV-4149-LLP, 2023 WL 3742544, at *26 (D.S.D. May 31, 2023), held that "an insurer may be liable for bad faith even if it did not receive a demand to settle within policy limits."  This case will be cited in DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition in 2 Volumes, 2024 Supplements to both of the 2 Volumes in process).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

WITHOUT AGREEMENT, IT AIN'T EASY TO RECOVER DEFENSE EXPENSES, EITHER.

In answer to certified questions, the Supreme Court of Hawaii ruled that a liability insurer may not recover defense costs for defended claims unless the insurance policy contains an express reimbursement provision.  St. Paul Fire & Marine Ins. Co. v. Bodell Constr. Co., 153 Haw. 381, 383-84, 538 P.3d 1049, 1051-52 (Haw. 2023), to be cited in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:6 (West Publishing Company 3d Edition, 2024 Supplements in process).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall. All rights reserved.

INSURER'S REIMBURSEMENT OF SETTLEMENT MONEY: WITHOUT AGREEMENT, IT AIN'T EASY.

Where there is no agreement, it has been held that the insurer has no right to reimbursement of its settlement payment.  Accord with Medical Mal. Joint Underwriting Ass'n of Mass. v. Goldberg, 425 Mass. 46, 680 N.E.2d 1121, 1129 (1997), cited in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:6 (West Publishing Company 3d Edition, 2024 Supplements in process):  Berkley Nat'l Ins. Co. v. Atl.-Newport Realty LLC, ___ F.4th ___, No. 22-1959, 2024 WL 723978, at *5 (1st Cir. Feb. 22, 2024).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

"BEYOND A REASONABLE DOUBT": O.J. SIMPSON vs. MICHAEL COHEN AT TRIAL.

The Election Corruption Trial in NYC this past week has been so historic that I am going to indulge "the blogger's privilege" (kind of like the Chair's privilege or the host's privilege, if you're familiar) and write about it here for a brief change of pace.

    Some of Michael Cohen's trial testimony may prove unbelievable to the jury, but not for the reasons you may have heard.  His testimony raises two issues in my mind.  The first issue is the degree of Michael Cohen's credibility as a witness in this trial.  The second question is the effect of Michael Cohen's testimony on reaching a verdict.

          Much ado has been made about, well, one telephone call on I believe it was October 24, 2016.  On the transcript, the big brouhaha sure doesn't seem like much more than one telephone call and the witness handled it well on cross-examination last Thursday.  On the air, cable media freaked out, and in print, columnists wrote like they needed oxygen.  The emotions brought out by Todd Blanche's cross-examination of Michael Cohen over one telephone call seemingly erupted and captured the attention of columnists and cable media.

          They do not seem to have been reading the trial transcripts.  Kudos to the New York State Court System for posting them so that anyone with online access can read them, and a big thanks to the Washington Post for making them truly accessible and even searchable.  I have been reading the daily trial transcripts on the Washington Post website, and I have read all of Michael Cohen's testimony.

          Michael Cohen comes across mostly as unbelievable in the transcripts.  I did not think this would be my reaction, but after reading the transcripts, it is.

          The prosecution understandably rehearsed his witness testimony with Mr. Cohen, but in his case the preparation must have been very extensive, so much so that he actually testified that he remembered just about every phone call, every text, and every EMail that he sent or received over the course of years, so long as the Assistant D.A. asked him about it.  Nobody remembers those things from years ago, and some of us do not even remember what we said or wrote last week.  So Mr. Cohen's recollection of them all is incredible, unbelievable, unconvincing from reading the trial transcript.  It is true that Todd Blanche's cross-examination was long and tedious.  It was so meandering it became infuriating many times.  But perhaps a long cross-examination of Michael Cohen was appropriate here, given the long recitation of calls, texts, and EMails during the Prosecution's direct examination of Cohen.

          That said, Michael Cohen's testimony was credible in corroborating other witnesses and documentary evidence on important points.  He corroborated the plan directed by the defendant to pay witnesses to keep quiet at a critical point in the 2016 presidential election, and then to lie about it in order to cover it up, not just in their records but also in what they said about it publicly.

          The talking heads and opinion artists had a different reaction to all that of course.  Their big takeaway at first was they were impressed that Michael Cohen handled himself well because he did not erupt, forgetting that this jury has seen Michael Cohen only when he took the witness stand in this trial.  They had nothing to compare his performance with, unlike the pundits who were impressed by his controlled demeanor.

          Until the one phone call of October 24th.  Then their hormones apparently woke up.  They responded now with emotion to the words and gestures during Todd Blanche's cross-examination and Michael Cohen's spoken words about one telephone call.  That changed their opinions from "good job, Prosecution" in presenting your case, to "How is the D.A. going to overcome this October 24th telephone call?"

          The difference in reactions between my reading the trial transcript, and people who heard and saw the cross over one telephone call, struck me.  We live in a time when people no longer think as much as they once might have, instead they go with their gut reactions, their emotions, much more than they ever did in the past.  The O.J. Trial is a good example here, I think.  Everyone "knew" that O.J. was a murderer, or at least that was the prevailing opinion on the matter.  Until.  Until everyone could see that O.J. could not get his hand into a glove years later, at trial.  Then they acquitted him.

          That brings me to the second question I have, which is the effect of Michael Cohen's testimony on reaching a verdict in this case.

          Emotions generally seem to rule in reaching important decisions more often than reasons and thinking do.  I think that explains the difference in reactions in the O.J. Simpson Trial.  I think that also explains the difference in reactions to Michael Cohen's trial testimony this past week.

          I am not saying that there will be the same result in the Election Corruption Trial in NYC as there was in O.J.'s Trial.  If the results did end up being the same, though, it would not surprise me.

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved. 

 

THINGS THAT JUDGES AND JURIES THINK ABOUT IN BAD FAITH CASES.

There are many factors in deciding the question of whether there is bad faith in settlement.

    The factors have been summarized concisely as follows:

   Whether or not an insurer has adhered to the standard of good faith usually depends upon circumstances and elements involved in a particular case.  Kunkel [v. Utd. Sec. Ins. Co. of N.J., 84 S.D. 116, 168 N.W.2d 723, 727 (1969)].  There is an array of factors to consider in determining whether an insurer's  refusal to settle is equivalent to a breach of its good faith duty.  Helmbolt [v. LeMars Mut. Ins. Co., 404 N.W.2d 55, 57 (S.D. 1987)].  These factors include:

(1) The strength of the injured claimant’s case on the issues of liability and damages; (2) attempts by the insurer to induce the insured to contribute to a settlement; (3) failure of the insurer to properly investigate the circumstances so as to ascertain the evidence against the insured; (4) the insurer's rejection of advice of its own attorney or agent; (5) failure of the insurer to inform the insured of a compromise offer; (6) the amount of the financial risk to which each party is exposed in the event of a refusal to settle; (7) the fault of the insured in inducing the insurer's rejection of the compromise offer by misleading it as to the facts; and (8) any other factors tending to establish or negate bad faith  on the part of the insurer.

Id.[1]

          "While not a 'mere checklist,'" it has also been said, "insurers are at a minimum required to investigate the facts, warn the insured of a possible excess judgment and advise how to avoid one, keep the insured apprised of settlement opportunities, and settle where reasonable."[2]

 

[1] Sacred Heart Health Serv's v. MMIC Ins., Inc., No. 4:20-CV-4149-LLP, 2023 WL 3742544, at *28 (D.S.D. May 31, 2023).

[2] Colello v. GEICO Gen. Ins. Co., ___ F. Supp. 3d ___, No. 6:22-cv-1262-RBD-RMN, 2023 WL 6850954, at *2 (M.D. Fla. Oct. 13, 2023), app. docketed, No. 23-13689 (11th Cir. Nov. 6, 2023).

 

FACTORS THAT JUDGES AND JURIES CONSIDER IN THIRD-PARTY BAD FAITH CASES AND IN FIRST-PARTY BAD FAITH CASES ARE EXPLORED IN TWO VOLUMES BY Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith (West Publishing Co. 3d Edition, 2024 Supplements in process).

Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

COURTS NOW CITING THE RESTATEMENT OF LAW OF LIABILITY INSURANCE

In an earlier article published here, it was said that when and as the courts start to cite to the Restatement we will take a very close look at it, but as of then, the time had not yet come when the judges have analyzed it.  The time has now come.

          The Restatement has acquired something of a history of citation in at least one court in South Dakota.  In Sacred Heart Health Services v. MMIC Insurance, Inc.[1] the Court was confronted with the following issue, as it put it:

The issue in this case is whether [the liability carrier at bar] breached its duty to defend such that it forfeited the right to assert control over the defense and settlement of the [underlying] lawsuits.[2]

The Court in this case recited its previous consultation in a case in which "there was no South Dakota precedent on an insurer's liability for providing an inadequate defense[.]"[3]  The Court in its earlier case looked to Section 12 of the Restatement of the Law of Liability Insurance "for guidance given that the South Dakota Supreme Court had found the Restatement to be persuasive in many instances."[4] 

          In Sacred Heart, the Court again "found no South Dakota caselaw on point" and looked again to the Restatement, this time to Section 19 of the Restatement of the Law of Liability Insurance, including its Comment b.[5]  The guidance which the Sacred Heart Court received from the Restatement was this:

Section 19 of the Restatement of the Law of Liability Insurance provides that '[a]n insurer that breaches a duty to defend a legal action forfeits the right to assert any control over the defense of settlement of the action.'”[6]

The Court then held that "[v]iewing the facts in the light most favorable to Plaintiffs, the non-moving parties," the insurance company's motion for summary judgment "on the breach of duty to defend claim is denied."[7]

Citations to the Restatement of the Law of Liability Insurance are more fully set out in the 2 Volumes of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process).

  Please read the disclaimer.  This blog article ©2024 Dennis J. Wall.  All rights reserved.

 

[1] Sacred Heart Health Serv's v. MMIC Ins., Inc., No. 4:20-CV-4149-LLP, 2023 WL 3742544 (D.S.D. May 31, 2023).

[2] Sacred Heart, 2023 WL 3742544, at *36.

[3] Sacred Heart, 2023 WL 3742544, at *35.

[4] Sacred Heart, 2023 WL 3742544, at *35.

[5] Sacred Heart, 2023 WL 3742544, at *36.

[6] Sacred Heart, 2023 WL 3742544, at *36.

[7] Sacred Heart, 2023 WL 3742544, at *36.

877 FEDERAL JUDGES HONOR THE RULE OF LAW.

There are some 900 federal judges in the Courts of the United States.  Let's call it an even 900.  That means that 877 federal judges honor the rule of law.  877 federal judges hire their law clerks, and presumably they also hire federal magistrate judges and other courtroom officers and personnel as well, based on demonstrated capacity for the job.

          In other words, the market determines the hiring practices of 877 federal judges, as it should.  Unfortunately, the 877 do not get the headlines, but they do get the best candidates.

          13 other federal judges honored the students at Columbia University by refusing to consider hiring people who protested the killing of women and children.  Each of the 13 was appointed during the American Apocalypse between January 20, 2017 and January 19, 2021. 

          In contrast, none of the 13 has announced that they have any problems at all with hiring people from a university which is currently under a self-imposed investigation for racism based on developments within the last few days.

          So here is the actual story of hiring practices by all but 877 federal judges today:   Despite the teachings of the market, these 13 prefer hiring from within a racist mob to hiring from within Columbia concern. 

 Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

CONSIDER THESE REQUESTS FOR PRODUCTION IN A BAD FAITH CASE.

22. Please produce documents, reports, memos, or other records of any reserve or reserves set up related to Claim Nos. [of certain claims identified by their claim numbers].
23. Please produce documents and written communication, including all letters, emails, correspondence, fax, or electronic transmission, related to any changes in reserve levels pertaining to Claims Nos. [of certain claims identified by their claim numbers].
24. Please produce actuarial calculations, and/or evaluations used in setting or changing reserve levels related to Claims Nos. [of certain claims identified by their claim numbers].

Similar requests were approved in the bad faith case of Sandpiper Isle Condominium Association v. Empire Indemnity Insurance Co., No.:  2:21-cv-105-KCD, 2023 WL 5720744, at *2 (M.D. Fla. Sept. 5, 2023), in which  a policyholder brought a bad-faith action after its carrier refused to pay the Condominium Association's claim for hurricane damage. 

          The Court held that reserve information was discoverable in this bad-faith action.  Moreover, the carrier objected that discovery "should be limited to Sandpiper's claim only[.]"  Sandpiper Isle Condominium Association, 2023 WL 5720744, at *3.   (Presumably, the carrier was concerned that one or more of the requested claim numbers would implicate other policyholders' claims.)  The Court overruled the carrier's objection in that regard "because in a bad-faith case, [the carrier's] general business practices are at issue."  Sandpiper Isle Condominium Association, 2023 WL 5720744, at *3.  As to pleading and proof of General Business Practices requirements in third-party bad faith cases, see § 3:28, in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process), and regarding pleading and proof of GBP requirements in first-party bad faith cases, see §§ 9:14 and 9:14.75, Volume 2, id.

    Sample requests for production, interrogatories, jury instructions and other materials helpful to trial lawyers are contained in Volume 2 of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH.  The requests in this article will appear, with others, in the forthcoming 2024 Supplements.

TODAY IS EARTH DAY. LEAVE A COMMENT!

Today is the 54th anniversary of Earth Day!  Honor Earth Day by telling your country about changes in your Health Care in 2024!

          Uncle Sam has a Request For Information (RFI), your information.  The RFI is only 12 pages long, which is not too long for Uncle Sam who can be very wordy as we all know.  Click on the blue underlined Request For Information to read all 12 pages of it.

• Have there been changes in your health care since a provider was bought or merged or changed procedures?
• Has your work safety in the health care industry, or have your wages from a health care provider, changed in recent times?
• Is health care affordable for you as a patient or as a taxpayer, both, since one or more of your health care providers changed their business operations because they were bought by some other company, or because they bought some other company or merged with it somehow?

THEN UNCLE SAM WANTS TO HEAR FROM YOU!

          Tell the U.S. Department of Justice, and the U.S. Department of Health and Human Services, and the Federal Trade Commission!  You can send your comments to them by U.S. Mail, or you can leave your comments online at www.regulations.gov.  Put the Docket Number ATR 102 on your comments, and send them in before May 6, 2024.  That's it!

          Except to remember this, as Uncle Sam put it:

Privacy Note: The agencies’ general policy is to make all comments received from members of the public available for public viewing in their entirety on the Federal eRulemaking Portal at www.regulations.gov. Therefore, commenters should be careful to include in their comments only information that they wish to make publicly available.

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

TOMORROW IS EARTH DAY. LEAVE A COMMENT!

Tomorrow is the 54th anniversary of Earth Day!  Honor the Day by leaving a Comment on changes in your Health Care in 2024!

          Uncle Sam has a Request For Information (RFI), your information.  The RFI is only 12 pages long, which is not too long for Uncle Sam who can be very wordy as we all know.  Click on the blue underlined Request For Information to read all 12 pages of it.

• Have there been changes in your health care since a provider was bought or merged or changed procedures?
• Has your work safety in the health care industry, or have your wages from a health care provider, changed in recent times?
• Is health care affordable for you as a patient or as a taxpayer, both, since one or more of your health care providers changed their business operations because they were bought by some other company, or because they bought some other company or merged with it somehow?

THEN UNCLE SAM WANTS TO HEAR FROM YOU!

          Tell the U.S. Department of Justice, and the U.S. Department of Health and Human Services, and the Federal Trade Commission!  You can send your comments to them by U.S. Mail, or you can leave your comments online at www.regulations.gov.  Put the Docket Number ATR 102 on your comments, and send them in before May 6, 2024.  That's it!

          Except to remember this, as Uncle Sam put it:

Privacy Note: The agencies’ general policy is to make all comments received from members of the public available for public viewing in their entirety on the Federal eRulemaking Portal at www.regulations.gov. Therefore, commenters should be careful to include in their comments only information that they wish to make publicly available.

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

JOINT MOTION TO ENTER STIPULATED PROTECTIVE ORDER IS NOT ENOUGH.

A joint motion for entry of a stipulated protective order is not enough for a federal court to enter the stipulated order.  "Rule 26(c) allows the Court to enter a protective order for good cause shown."  Gordon v. Menard, Inc., No. 1:23-cv-00317-HAB-SLC, 2023 WL 6619427, at *1 (N.D. Ind. Oct. 10, 2023) (Collins, USMJ).  Good cause was not shown in Gordon, which is why the Magistrate Judge denied the joint motion without prejudice.

              To begin with, the proposed stipulated protective order was overbroad on its face.  In pertinent part, "it seeks to protect information regarding current and former employees and agents," but as the Court pointed out, there are many times when employee information is subject to disclosure such that an absolute ban on disclosure is contrary to the law.  See Gordon, 2023 WL 6619427, at *1.

              Next, all parties failed to show good cause to protect "Defendant Menard Inc.'s training videos and materials, policy and procedure, information of Menard Inc. and its shareholders and directors, store surveillance videos, and blueprints and schematics."  Gordon, 2023 WL 6619427, at *2.

              An insurance carrier's desire to protect its similar information from disclosure is obvious, particularly if the parties to an insurance case can get away with stipulating to protect something as ill-defined as otherwise unidentified "information of [the insurance company] and its shareholders and directors," similar to what the parties tried to do in proposing their stipulated order in Gordon.  In Gordon, though, the parties' stipulation to protect did not fly in this regard.  "The proposed order makes no effort to specify why the purported protected materials are confidential."  Gordon, 2023 WL 6619427, at *2.

              For a third drawback in the eyes of the Gordon Court, the proposed order would have allowed the parties to file documents marked "Confidential Material" under seal in their entirety, without redacting the supposedly confidential information.  This, too, is contrary to law.  See Gordon, 2023 WL 6619427, at *2.

              For the benefit of the parties in the future, including if and when they redraft and resubmit their proposed stipulated protective order, the Court had two more things to say.  First, this Court "is unwilling to enter a protective order that suggests it retain jurisdiction of any kind after resolution of the case[.]"  Gordon, 2023 WL 6619427, at *2 (emphasis by the Court).

              Second, the Court admonished the parties to modify their version of protected confidentiality of information once the case came to an end:

Similarly, the parties should expressly state that any provisions requiring the return or destruction of confidential or protected information at the end of this litigation—such as those in Paragraph 4 of the proposed order (ECF 16-1 ¶ 4)—do not apply to the Court or material filed with the Court.

Gordon, 2023 WL 6619427, at *2.

              While entering all of these relatively clear and unambiguous rulings that leave no room for reasonable interpretation, the Court actually began its opinion in this case with a seeming ambiguity.  As was pointed out above, the Court began its rulings in this case by referencing Federal Rule of Civil Procedure 26(c)'s requirement of "good cause" before any protective order can be entered by a federal court.

              However, the Court pointed out in a footnote that the same level of scrutiny of what exactly constitutes "good cause" varies from case to case, and that it was applying "a higher level of scrutiny" for a good cause showing that the Court determined was required here, "[b]ecause the proposed order permits filing under seal without court permission[.]"  Gordon, 2023 WL 6619427, at *1 n.1.

              This is an important concept for practitioners and judges to keep in mind when evaluating whether good cause has been shown to shield discovery, evidence, information, or anything else during litigation in federal courts – including insurer bad faith litigation among the rest.

Stipulated Protective Orders in Federal and State litigation are addressed in § 3:107.50 concerning third-party bad faith claims, in Volume 1 of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process), and in § 9:28.50 as they relate to first-party bad faith cases, in Volume 2 of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process).

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.