Insurance Defense Blog

The amended diversity jurisdiction statute and removal before service

Last month I noted the amendment of the federal diversity jurisdiction statute.  For an overview of the amendments, see Federal Jurisdiction and Venue - New Legislation Takes Effect.  There is also an interesting analysis of this legislation on the Drug and Device Law blog, concerning the impact of the amendment on the issue of removal before service of the non-diverse defendant.  (For a discussion of this tactic, see Removal to Federal Court Before Forum Defendant Is Served.) The argument concerning the amendment is, in essence, that Congress, by re-enacting the same key provision in the amended statute, has effectively ratified the validity of pre-service removal.  I plan to follow this to see how the courts react to this argument.

The restyled Federal Rules of Evidence became effective on Dec. 1

The Federal Rules of Evidence were restyled, and the new version became effective on December 1, 2011.  Here is a link to the restyled version of the Rules, which is defnitely worth reading.   As a sample, the restyled version of Fed. R. Evid. 702 is as follows:

Rule 702. Testimony by Expert Witnesses

A witness who is qualified as an expert by knowledge,
skill, experience, training, or education may testify in the
form of an opinion or otherwise if:

(a) the expert’s scientific, technical, or other specialized
knowledge will help the trier of fact to understand
the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and
methods; and

(d) the expert has reliably applied the principles and
methods to the facts of the case.

A copy of the Report of the Advisory Committee can be found here, and discusses in some detail the contributors to the effort to make the Rules more easily understandable.  Among other things, Bryan Garner's legal style guide was used in the rewrite of the Rules.

As reported by BeSpacific.com, there are also amendments to the Federal Rules of Appellate, Bankruptcy, and Criminal Procedure which also became effective on Dec. 1.  

Congress amends diversity jurisdiction statute

Who says it is a do-nothing Congress?  Congress passed the Federal Courts Jurisdiction and Venue Clarification Act of 2011 on 12/2/2011, which now awaits the President's signature.  Among other things, this statute makes significant adjustments to diversity jurisdiction. 

The amendments are helpful in a case involving multiple defendants, because the statute resolves a disagreement between the Circuits.  Every defendant will now get 30 days to remove, however, the defendants will still need to be unanimous as to the removal decision.

Where removal is based on federal question jurisdiction, there is a provision that requires the severance and remand of state claims not within original or supplemental federal jurisdiction.  That provision requires some caution, because removal could result in the client having to defend two lawsuits instead of one. 

A summary of the bill is available at this post on ProfsBlawg.

Thanks to the Civil Procedure and Federal Courts Blog for the link. 

Statutory waiver of insurer's late notice defense in Virginia

I've previously posted about Va. Code § 38.2-2226, which states that in order to disclaim coverage based on an insured’s breach of a policy condition, an insurer has to give notice to the claimant or claimant’s counsel within 45 days after discovery by the insurer of the breach of the condition. Failure to give such notice within 45 days will result in a statutory waiver of the defense. 

The importance of compliance with this statute cannot be overstated in a Virginia claim involving a potential late notice defense. 45 days has a way of slipping past.

This same statute came up in a relatively recent decision from the Virginia Supreme Court, Dabney v. Augusta Mutual Insurance Co., which is discussed here.

The Dabney opinion was also usefully discussed in Zalma on Insurance, from a different perspective. 

How to use Google's search by image function

Here are step by step instructions to use Google's search by image function, from Slaw.  Basically, go here and upload your image by clicking on the camera icon.  Maybe someday soon if you somehow acquire a photo of a party or a witness, you will be able to run a search by image on it and find things posted on the internet under a user name. Right now, I don't think Google has its facial recognition software running with this seach.

Hat tip to Future Lawyer for the link.

Interactive map of U.S. highway fatalities 2001-2009

There were over 369,000 road accident fatalities in the U.S. between 2001 and 2009, and there is an interactive map showing the location of each one.    I'm not sure if this is useful information, unless perhaps you are handling a motor vehicle accident at a particularly dangerous intersection, and you may want to implead the governmental entity responsible for the road design.  If so, don't forget to give the required statutory notice of the claim. 

Hat tip to Simon Rogers of the Guardian and BeSpacific for this link.

Later:

More maps of traffic fatalities:

NHTSA maps (showing Maryland)

Google Earth Map of Maryland traffic fatalities

None of these seems as useful as the Crashstat map for New York City.

Why isn't there a Crashstat map for every State?

 

Plaintiff's bankruptcy filing may create defenses in civil litigation

A search should be conducted early in every case to determine if the plaintiff has filed for bankrtupcy. There are a number of good reasons to do so.

DRI published a recent article on its website concerning the defense of judicial estoppel arising from the plaintiff's failure to disclose his or her claim as an asset in the bankruptcy proceedings.  There is quite a bit of case law on judicial estoppel arising from bankruptcy. 

Another way in which bankruptcy proceedings can negatively impact a plaintiff's suit was recently illustrated by the case of Kocher v. Campbell, a decision of the Virginia Supreme Court that came out last June.  In Kocher, the Court considered the issue whether the plaintiff in an action to recover damages for personal injuries had standing to maintain his action after filing a petition for bankruptcy, causing his claim to become an asset of his bankruptcy estate.  The Court held that the plaintiff lacked standing, and dismissed the case.

The plaintiff was involved in a motor vehicle accident, and before filing a lawsuit the plaintiff filed a voluntary Chapter 7 petition in bankruptcy.  His petition failed to disclose his personal injury claim as an asset in Schedule B, and failed to list it on Schedule C as an exempt property.  About three months later, plaintiff received a standard discharge in bankruptcy.

The plaintiff then filed his civil action based on the motor vehicle accident.  This was nonsuited then refiled and served.  The defense filed a motion for summary judgment on the grounds that the plaintiff lacked standing to bring the action.  During the hearing on the motion, the plaintiff nonsuited the action again.

The plaintiff then persuaded the bankruptcy trustee to file a motion in bankruptcy court to reopen his bankruptcy case, which was granted.  Then the plaintiff obtained leave to file amended schedules, listing the personal injury action and claiming it as exempt property.  The bankruptcy court ruled that the plaintiff had properly exempted the cause of action.

Next, the plaintiff filed his civil suit for the third time. The defense again moved for summary judgment, asserting the lack of standing and the statute of limitations.  The trial court denied the motion, but certified the issue for an interlocutory appeal pursuant to a Virginia statute, and the Virginia Supreme Court awarded the defendant an appeal.

The Virginia Supreme Court reversed, holding that the action was a nullity at the time of its filing and the statute of limitations had run before it was refiled the third time, and dismissed the case.

The Court reasoned first that as a result of the plaintiff's filing a petition for bankruptcy, his inchoate personal injury claim passed to his bankruptcy estate.  Thereafter, the cause of action was one that could only be asserted by the trustee in bankruptcy, unless and until it was restored to the plaintiff by the bankruptcy court.  Here, the cause of action remained a part of the bankruptcy estate until the bankruptcy court ordered it exempted over five years after the motor vehicle accident.  All three complaints were filed during the period when the plaintiff lacked standing to assert the cause of action because it remained in the bankruptcy estate, enforceable only by the trustee. 

The Court rejected the plaintiff's argument that the final order closing the reopened bankruptcy case had the effect of abandoning all property remaining in the estate, and that abandonment causes the abandoned property to revert back to the debtor retroactively, as if the bankruptcy had never occurred.  The Court reasoned that the exemption that preceded the final order had already removed the plaintiff's cause of action from the bankruptcy estate.  Second, under Virginia law concerning standing, an action filed by a party who lacks standing is a legal nullity.  Standing acquired after the statute of limitations has run cannot be retroactively applied to cure the lack of standing that existed when the action was filed.

How a similar scenario would play out in other States would depend on the State law where the action is pending.  The most important step, however, is to run the search, and find out whether there has been a bankruptcy filing. 

Trouble and how not to meet it: Landrum v. Chippenham and Johnston-Willis Hospitals

As a young associate, I once read an ABA pamphlet on how to manage a law practice, and one of the recommendations was to have a regular meeting of all attorneys, at which one of the agenda items would always be "trouble and how to meet it."   The idea is that usually you can see trouble coming at you from down the road, and that's precisely when an attorney needs the collective wisdom and experience of the firm.  Trouble and how NOT to meet it is illustrated by the recent decision of the Virginia Supreme Court in Landrum v. Chippenham and Johnston-Willis Hospitals, Inc.

Landrum was a Virginia medical malpractice case in which the plaintiff was represented by an out-of-state counsel from Missouri, with Virginia local counsel.  The Virginia Supreme Court affirmed the trial court's exclusion of the plaintiff's expert witness designations for failure to have them signed by local counsel, and the summary judgment in favor of the defense based on the plaintiff's lack of expert testimony.

The trouble was coming down the road for a couple months before the end.  Plaintiff's intial effort at expert witness designations failed to state the substance of the facts and opinions to which the experts were expected to testify and a summary of the grounds for each opinion.  The defense moved to exclude the expert witnesses and for summary judgment.

Plaintiff then attempted to cure the deficiency by providing the expert witnesses' reports, but failed to supplement the designation.

There was a hearing before the Circuit Court on the defense motions, in which the Court warned:

THE COURT: . . . I will give you seven days from today, and I'm going to give you a time that you file your answer to these interrogatories and you file a copy of it in the clerk's office and you do it in the proper manner. I'm not going to sit here and lecture how you're supposed to do it.

. . . .

I will tell you, sir, if you fail to do that, I will dismiss the case after that.

Plaintiff's next effort at filing an expert witness designation also did not comply with the Virginia Rules, as it was not signed by Plaintiff's local counsel, and the defense again moved to exclude the plaintiff's expert witnesses and for summary judgment.

This time, the trial court granted the motions, and dismissed the case with prejudice. 

About two full months passed between the first effort at filing expert witness designations, and the last.  The trial judge gave the plaintiff a week to file a compliant expert witness designation, after delivering a clear warning to comply with the Virginia Rules.  There was time to reread the Virginia Rules, and conference with Virginia counsel. 

Unfortunately, this was a very harsh result in a medical malpractice case, and the Virginia Supreme Court granted an appeal -- a rare and golden opportunity for claim repair.  However, as noted here, plaintiff failed to comply fully with the Virginia appellate rules as well, and the appeal did not go well.  Now it is big trouble.

The reason why in Virginia, local counsel must sign all the pleadings, is that being local counsel in Virginia is not regarded as a pro forma responsibility.    As the Virginia Supreme Court has stated:

The purpose of the Rule is to facilitate the efficient administration of court business by permitting a court to deal exclusively with local counsel, upon whom all notices and processes may be served. It is necessary that our courts have access to attorneys of record who are personally subject to their supervisory control rather than risk delays in communicating with foreign attorneys who may be inaccessible, uncooperative or unfamiliar with the rules and statutes governing the trial of cases in Virginia.

Ortiz v. Barrett, 278 S.E.2d 833 (Va. 1981). 

 

 

 

 

 

 

 

Steve Jobs and the business case for quality

Steve Job's passing was very sad; not because it was unexpected, as he was obviously ill, but because maybe we've lost his values.  Jobs really believed in delivering quality; he wanted to make great products and did.  Apple products typically cost more, but the extra cost was reflected in the quality of manufacturing and the quality and simplicity of the controls.

It is interesting to recall that Jobs was forced out of Apple in 1985, and returned around 1996.  I seem to recall reading articles in the financial press around that time that Apple was finished.   I purchased an Apple computer for home use in the early 1990's, from Apple without Steve Jobs; I still have it in the basement.  It was a PowerPC, and while it was good, it was not great.  In fact, when it had a problem, it took a lot of time and trouble to fix the problem.  I recall some long sessions on weekends doing this.  A couple of times, I could only get it working again by upgrading the operating system.  I remember having to buy a special utility program that would sort out conflicts among program extensions.

When Jobs returned, it wasn't long before he ditched that operating system, and had a new OS built on Linux. That was a gutsy move, as it risked alienating their user base.  At about that point, I myself switched to Windows computers for home use, for compatibility with the Windows software I used at the office.  But I had found the Mac OS troublesome, the software for Macs was way more expensive than Windows versions, and I was unwilling to pay the premium to follow the Mac upgrade path.

The success of Apple since Jobs returned speaks for itself.  That's what delivering quality can do. Quality of course includes a simple and intuitive interface, to reduce time needed for learning and relearning the system.  Quality includes reliability.

In the legal field, it comes down to the fact that the main expense of office computing is not the cost of the hardware, or the cost of the software; it's the cost of training and retraining your people, plus the cost of fixing problems - whatever they are.

I can draw on the example of Ubuntu to illustrate this.  I like Ubuntu.  Ubuntu is one of the free versions of Linux, and it comes with a free office suite called Libre office, which is a variant of Openoffice.  So you can do pretty much everything on Libre office that you can do on Miscrosoft Office.  Ubuntu also is reliable and stable, and is not targeted as much by malware as Windows.  Ubuntu will run fine on older machines.  Ubuntu can run a number of the major web browsers, including Firefox and Chrome.  So for a firm doing cloud computing, you could run Ubuntu on your office machine and use Google Apps ($60 per seat per year) or (presumably) use Microsoft's web-based product.   Likewise for cloud-based practice management software.  Ubuntu has a fairly simple graphical interface, just like Windows.  I even felt comfortable installing Ubuntu on my 93 year old mother's home computer, when her Windows system became hopelessly corrupted.

If you were starting a law firm from scratch you might use Ubuntu for all these reasons.  For an established practice, most still wouldn't switch to Ubuntu despite all these advantages, because all personnel are trained and comfortable with Windows and Microsoft Office.  Partners are not going to want to learn Ubuntu, or want to force all their secretaries to learn it, to save a couple hundred bucks per machine.  (OK, a thousand bucks per machine, but don't tell them!)  And who would know how to solve any problems with Ubuntu?

On the other hand, Macs -- which share many of the advantages of Ubuntu except for low cost, but which have a far more refined and elegant user interface -- are winning over increasing numbers of law offices, even with a cost disadvantage compared to Windows.

That's the business case for quality, right there.

 

 

 

 

 

 

Professional reading -- notable blog posts

Here are some notable blog and twitter posts I've collected:

"Do it yourself tort reform:  How the Supreme Court quietly killed the class action", by Professor David S. Schwartz.  Key quote:  "Concepcion is the culmination of twenty-five years of Supreme Court arbitration jurisprudence that has turned the FAA into a do-it-yourself tort reform statute.  By adding an arbitration clause, a would-be defendant can do away with juries, with pesky discovery into its documents or employees’ testimony, and, now, with class actions."  From Scotus blog.

"Want efficiency?  Look to the little things", by Toby Brown.  In this post the author recognizes the aversion of lawyers and law firms to big changes, and therefore recommends that efficiency be pursued incrementally, in small steps.  As an example, he points to software that will create a Table of Authorities for a brief, Best Authority.  I'd be interested in buying Best Authority but for the pricing structure.  However, this post reminded me of what a miracle it was, the first time I saw Full Authority create a table of authorities.  Where's my old copy of Full Authority, and can I get it to run on Windows 7?

Virginia:  Civil Jury Trials Are On the Decline. " In 2000, there were 1,514 civil jury trials in Virginia.  In 2009, that number declined 61 percent to only 592."  This has also been true of the number of jury trials in federal courts.

Lawyers' runner gets two years in prison.  This was in Virginia.

The Essential Cloud:  Top Tools for Lawyers

  (from Attorneyatwork)

Lexis Nexis has entered the legal document market.  This is in the UK.  In the U.S., LegalZoom and RocketLawyer exist, so it would be surprising if Lexis Nexis doesn't bring its product here.

In D.C., there's a novel way to settle around another defendant, as recently discussed by the Court of Appeals.