"Can cell phones cause brain cancer?" With that question, which he did not answer, Judge Weisberg of the Superior Court for the District of Columbia began a 76-page discourse on the admissibility of the testimony of eight plaintiffs' experts in the DC cell phone litigation. The Court excluded the testimony of some of the Plaintiffs' experts and did not exclude the testimony of others. The Court, based on the extensive record before him, clearly found the scientific evidence too inconclusive for any scientist to say to a reasonable degree of scientific certainty whether cell phones can cause brain cancer.
The Court's opinion included this sobering plea to other branches of government to do the research necessary to figure this out:
Even though the financial and social cost of restricting such devices would be significant, those costs pale in comparison to the cost in human lives from doing nothing, only to discover thirty or forty years from now that the early signs were pointing in the right direction. As the inconclusive results of the IARC Monograph make clear, more research is necessary to answer definitively the fundamental question of carcinogenicity. If the probability of carcinogenicity is low, but the magnitude of the potential harm is high, good public policy dictates that the risk should not be ignored. See Richard Posner, Catastrophe: Risk and Response (2004). The court recognizes, however, that policy debates of this kind do not belong in the judicial branch.
I had previously written about judicial estoppel and lack of standing defenses that could arise from a plaintiff's prior bankruptcy filing. There is a recent decision in the District of Columbia in which judicial estoppel barred a plaintiff's personal injury claim, after the plaintiff had failed to disclose the claim in bankruptcy proceedings. To prevail on such a motion, however, it is probably necessary to show a clear financial benefit accruing to the plaintiff from the failure to disclose the claim in bankruptcy.
In a recent case, a homeowner brought suit in Maryland federal court against her insurance broker for negligence, breach of fiduciary duty, negligent misrepresentation, intentional misrepresentation, and fraud, after her house sustained fire damage when the contents of the house were not insured. The Court threw out the breach of fiduciary duty and fraud counts, but held that the defendants had not submitted enough evidence to prevail on the affirmative defense that insurance would not have been available on the property.
The house had been insured by Chubb, but Chubb cancelled the policy for nonpayment after having insured it for years.Subsequently the bank holding the mortgage ordered lender-placed insurance coverage on the house.The bank notified the homeowner that the lender-placed insurance would not only cost more, but does not provide any coverage for loss or damage to personal property and provided limited coverage in other respects.
A couple of months later, the homeowner, who had been traveling, and having realized that the Chubb policy had been canceled, asked her insurance broker, whom she had known for several years and had become good friends with her, to see what could be done, and send him a package of materials concerning the lender-placed insurance.Upon receipt of the package, the broker passed it to a customer service representative of his firm, and gave instructions to find a new insurance policy for the client.The customer service representative initiated steps to find a new insurance policy, but delayed on following up.Unfortunately, 27 days after the broker received the package from the client, a fire broke out in the homeowner's garage and caused extensive damage to the house and its contents.The lawsuit followed.
The defendants moved for summary judgment on the breach of fiduciary duty claim.The Court agreed that in this case, the breach of fiduciary duty does not constitute a stand alone nonduplicative cause of action.The Court held that any purported breach of fiduciary duty for monetary damages cannot, standing alone, constitute a separate and distinct cause of action under Maryland law for a tort called breach of fiduciary duty.The Court stated that the broker may have owed a fiduciary duty to the homeowner, and the alleged breach of fiduciary duty may buttress plaintiff's negligence claim; but it simply does not rise to a cause of action of its own.
The defendants also moved for summary judgment on the grounds that given the underwriting rating of the house and Chubb's previous cancellation for nonpayment, no insurer would have provided plaintiff with an insurance policy, and therefore the defendants' actions were not the cause of the homeowner's injuries.
The Court denied the motion for summary judgment on those grounds.The Court noted that under Maryland law, a plaintiff does not need to show that an insurance policy was obtainable in order to prove that a broker's failure to procure such a policy caused her loss.Instead, the availability of insurance is assumed unless the defendant proves its unavailability as an affirmative defense.The Court stated that the burden of proof on the issue of nonavailability of insurance coverage is on the defendants.Further, in order to discharge that burden, the defendants must do more than show that a particular insurer cannot supply insurance.Finally, if a reasonable fact finder can draw an inference that insurance was available, even if plaintiffs do not provide any evidence on the point, summary judgment for the defendants is inappropriate.
Here, the defendants did not foreclose the possibility that the homeowner could have secured an insurance policy, because the house had been insured for years with Chubb, insurance might have been available from AIG, and finally, a jury could have inferred that the homeowner would have been able to secure a policy from the fact that the bank was able to obtain lender-placed insurance.
The Court also raised an issue concerning the negligent misrepresentation count.A cause of action for negligent misrepresentation may arise when a defendant misrepresents past or existing facts, however, a promissory statement, such as a promise to obtain insurance, generally cannot form the basis of a negligent misrepresentation claim.
The Court granted summary judgment as to the homeowner's fraud claims.When a plaintiff bases a fraud claim on a defendant's unfilled promise, the plaintiff must prove at trial that the defendant made the promise with a present intention not to perform it.The homeowner could not meet that burden here, because the defendant broker did initiate steps to replace the insurance.
The Court also granted summary judgment on the homeowner's claims for emotional distress.Generally, emotional distress attendant to property damage is not compensable under Maryland law.This is because the courts consider injury resulting from a mere damage to property as an unusual and extraordinary result and not contemplated as a natural and probable consequence of the tortious act to the property.In Maryland, a plaintiff cannot ordinarily recover for emotional injuries sustained solely as a result of negligently inflicted damage to the plaintiff's property.
From time to time there are articles like this one published in the New York Times last March, attacking the billable hour as the basis for billing clients for services rendered. Such articles usually have two themes -- that the billable hour results in legal services costing too much, and that the billable hour system is in many ways corrosive to the legal profession. Alternative billing arrangements are usually held up as the solution that might magically benefit everyone. However, these are two different issues. The measures clients impose to control their legal spend are a separate issue from law firms' internal culture.
Insurance defense firms usually are not mentioned in this debate, because we all have been operating under layered cost controls at least since the late 1980's. These layered cost control measures have long included pre-negotiated and below market billing rates; stringent litigation management guidelines that require pre-authorization for extra staffing, for filing of motions, for depositions, for legal research over a minimal amount, and for other selected activities; detailed litigation plans, which have been a requirement dating back to the 1990's (predating the legal project management fad by at least a decade); detailed budgets organized by standardized ABA uniform task and activity codes; detailed and contemporaneous time records, with each entry coded with the uniform task and activity codes; submission of electronic bills in standard formats, to facilitate automated review and analysis of the bills; routine reviews of bills by claims departments or third party auditing services, resulting in write-offs or write-downs of time considered excessive or not compliant with guidelines; and random audits of sample closed cases, sometimes more than a year after they were concluded. And yes, after all of that, the insurers are also adopting flat fee or other alternative billing arrangements.
So, with the perspective gained from having practiced under that regime for most of my professional career, I can say with confidence that the billable hour system is not going anywhere.
The bottom line is that having access to the billing data and the analysis of that data is tremendously valuable to the clients/insurers. I doubt that it would be possible to negotiate workable alternative fee agreements without having such data to analyze.
All that billable hour data is necessary in the first place to structure smart
alternative fee agreements, and to decide which parts of the services can be
“outsourced” to cheaper providers, such as a captive "staff counsel" law firm. I doubt that any insurer would want to move entirely to flat fee arrangements, for example, and be cut off from that data in its larger markets.
Law firms themselves are also dependent on the billable hour system to measure and control productivity, and have invested in expensive back office computer systems for the collection and analysis of billable hour data.
In practice, alternative billing arrangements do not appear to be supplanting the billable hour system, but rather are yet another layer of cost controls that will overlay, and be dependent upon, the billable hour system. For example, imagine that a corporation's general counsel sends a group of cases to a law firm to defend under a flat fee deal, and halfway through the contract period, one of the flat fee cases goes to trial and results in an enormous plaintiff's verdict. Do you think that the corporation's general counsel is not going to ask for a copy of the entire file, including all the time records?
In sum, the adoption of flat fee billing or other alternative billing arrangements is not likely to transform the billable hour culture of law firms. The billable hour culture is in my view a consequence of the information age, in which it became economically feasible to record activity in six minute increments and then store, aggregate and analyze the data with computers over weeks, months, and years. As we have seen in professional sports, see Moneyball, the technology is driving the collection and analysis of more data, not less.
Later: Here's confirmation from a managing partner interviewed by Jim Hassett: "Clients could get more out of their law
firms if they fully embraced change and trusted it. For example, we have a
client that does a lot of fixed fee work with us. They require almost every
project to be a fixed fee, yet we still have to submit detailed time reports
that they use to see how they’re doing." Of course. The client there not only wants the predictability of the fixed fee, but it also wants the detailed time reports so that it can evaluate the fixed fee deal at its conclusion, use the data to negotiate the next fixed fee deal, and compare how different lawyers and different firms handle similar matters. That client is actually being very smart. They know that regardless of all the talk about embracing change, the law firm is going to keep detailed time records anyway, because the law firm needs the data for the same reason the client needs it, as well as for purposes of internal law firm management. Since the law firm is going to keep detailed time records regardless, the client correctly concludes that there is no good reason not to ask for the detailed time records.
I do wonder whether, in a flat fee environment, such time records are as meticulously entered and reviewed by law firms as in a normal hourly fee matter. I would expect that time-keeping practices would get a bit sloppy in a flat fee matter.
Keeping accurate and properly coded time records is an acquired skill that takes effort. It's work. On an hourly fee deal, there is a strong incentive to keep good time -- you want the bill to be paid, and be paid timely. On a flat fee deal, what is the incentive to keep "good time"? By "good time", I am not just talking about overstated or understated time -- which is one possible issue -- but rather descriptive time entries that are properly broken down into discrete tasks with appropriate coding (e.g., no block billing).
It's so annoying to have to search every time I want to use the DCRA's Corporations Division CorpOnline Portal. Why does the DCRA make this so hard to find? This is where to go for online search of all registered District of Columbia entities with expanded entity information. This is the DC equivalent to Maryland's State Department of Assessments and Taxation website.
The Time magazine article, "Bitter Pill - Why Medical Bills Are Killing Us", by Steven Brill, contains important insights about medical billing practices that are relevant to personal injury litigation, and medical debt litigation. This article not only should be read, but it should be kept on file for training purposes.
On the defense side, it is commonplace for medicals to be the foundation for the evaluation of worst case exposure of a claim, and of a reasonable settlement range. Therefore if the medical bills are grossly inflated, the amount paid on the claim will be too. It's common knowledge that health care providers charge extra to cover the cost of care provided to the uninsured, but Brill's article is shocking because it shows that medical bills are inflated many times beyond that.
On the plaintiff's side, the incentive to question the gross amount of medical bills arises with a vengeance after a settlement is reached, and negotiation of the medical liens begins.