By Austin Walsh, Hedrick Gardner Kincheloe & Garofalo, LLP
“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” - Sir Winston Churchill, Remarks at The Lord Mayor’s Luncheon, Mansion House, London (Nov. 10, 1942).
From the time it took effect, North Carolina Rule of Evidence 414 profoundly changed how tort claims are investigated, negotiated, and litigated. However, but for withstanding a constitutional challenge before a three-judge panel in Pollard v. Huber, the Rule has faced little scrutiny in the courts. Last summer, after initial successes in defense of Rule 414, the Court of Appeals opinion in Sykes v. Vixamar and Progressive Univ. Ins. Co. caused us to take pause and consider what Rule 414’s language regarding “amounts actually necessary” to satisfy a medical expense actually means.
We know that Rule 414 limits the admissibility of medical expenses to “the amounts actually paid to satisfy the bills that have been satisfied, regardless of the source of payment, and evidence of the amounts actually necessary to satisfy the bills that have been incurred but not yet satisfied.” The primary dispute since 2011 has been what constitutes relevant evidence of those expenses. See Nicholson v. Thom, 236 N.C. App. 308, 337, 763 S.E.2d 772, 791 (2014) (noting in dicta that Rule 414 abrogated the collateral source rule with regard to past medical expenses). See also Sigmon v. State Farm Mut. Auto. Ins. Co., 5:17-CV-00225, 2019 WL 7940194 at *2 (WDNC Nov. 14, 2019) (holding that Rule 414 is limited to past medical expenses but that a plaintiff may admit the total amount of medical expenses for tangential arguments “such as pain and suffering, embarrassment, or reputational harm – related to the alleged ‘bad debt’ or ‘uncollectible’ write offs”).
Amendments to General Statute Section 8-58.1(b) took effect on the same date as Rule 414. This section receives much less fanfare but does the heavy lifting by clarifying how a defendant may overcome the presumption that a plaintiff’s medical expenses are reasonable. Section 8-58.1(b) states that when a “provider of hospital, medical, dental, pharmaceutical, or funeral services gives sworn testimony that the charge for that provider’s service either was satisfied by payment of an amount less than the amount charged, or can be satisfied by payment of an amount less than the amount charged” then the presumption of a medical bill’s reasonableness is rebutted. Therefore, to contest the admission of a plaintiff’s medical expenses, a defendant may “introduce evidence that some of those bills were written off” or, in the case of the tangential arguments described in Sigmon, a defendant may receive “a limiting instruction informing the jury that the amount written off cannot be considered for determining medical expenses.”
Sykes v. Progressive
Following enactment of Rule 414, attorneys and paralegals scrutinized write offs and contractual adjustments and began to consider why a provider might be required to take less than sticker price. Cue the Fair Health Care Facility Billing and Collections Practices Act.
NC General Statute Section 131E-91 was enacted in 1991 and, at first, only required hospitals to provide an itemized list of charges within 30 days of discharge if requested by the patient. In 2013, the statute was expanded to its current form and subsection (c) was added, which states: “A hospital or ambulatory surgical facility shall not bill insured patients for charges that would have been covered by their insurance had the hospital or ambulatory surgical facility submitted the claim or other information required to process the claim within the allotted time requirements of the insurer.”
Based on Rule 414’s favorable treatment in Nicholson, and the clear language of Rule 414, defendants naturally argued that, pursuant to Section 131E-91, if a plaintiff owed nothing on a medical bill, the amount “actually necessary to satisfy the bills that have been incurred but not yet satisfied” was in fact zero.
In Sykes, the Court of Appeals took up the issue of whether Section 131E-91(c) required hospitals to bill a patient-plaintiff’s medical insurance in order to maintain a lien against a plaintiff’s recovery in a civil action. The Sykes Court held that Section 131E-91(c) was “not intended to force hospitals to bill health insurers” and, therefore, timely billing to a plaintiff’s health insurer was not required to maintain a lien against a plaintiff’s recovery.
The Court of Appeals acknowledged that the provider abandoned its right to seek payment from plaintiff by means other than the litigation when it failed to timely submit a claim to plaintiff’s health insurer. Thus, if plaintiff lost on liability, so too did the provider. Progressive argued that this elimination of plaintiff’s liability to the provider outside of litigation (due to untimely billing) eliminated the provider’s lien on plaintiff’s recovery. In effect, there could be no lien without an underlying debt.
On this point, Progressive cited cases in which medical providers sought to collect more through a statutory lien than they would be entitled to collect through health insurer contracts. In this regard, the Court of Appeals made two points. First, the provider’s failure to timely bill health insurance did not wipe away the debt because an alternative payment source - defendant - remained available. Second, the cases cited by Progressive were distinguishable because, in those cases, the hospital was seeking more than the amounts paid and actually necessary to satisfy the bill. The hospitals in cases cited by Progressive were seeking reimbursement for the health insurance contractual adjustment, which the hospitals would not have been paid under any circumstance. On this second point, the Court of Appeals specifically stated in dicta that “defendants may introduce evidence showing a hospital seeks more through its lien than it would have otherwise accepted from a patient or health insurer. . . . . Evidence that the hospital would accept less than the amount claimed in a medical lien to satisfy the underlying bill is admissible to challenge the reasonableness of the bill. . . . Defendants in these cases may seek discovery on this issue and courts should freely admit this evidence at trial.”
Rule 414 after Sykes
Rule 414 was not directly at issue in Sykes; however, the Court’s holding that the medical provider’s lien (rather than amount billable to plaintiff) was evidence of the amount “actually necessary to satisfy the bills that have been incurred but not yet satisfied” will affect how defendants negotiate and litigate tort claims going forward. After Sykes, Defendants can no longer argue that a total write off under Section 131E-91(c) results in exclusion of the original bill or lien. Whether the Court of Appeals’ logic allows providers to claw back charitable write offs or uninsured discounts and assert liens on the original amounts is a question for another day.
The silver lining to Sykes is the clear affirmation given to defendants, albeit in dicta, that a defendant may develop evidence from a provider about what the provider would have been required to accept under a health insurance contract or, perhaps, under required charity care discounts, and that such evidence shall be “freely” admitted by the trial court.
Sykes was the first time since 2011 that we have had to pause and re-think the language of Rule 414. It marks the “end of the beginning” to our use and understanding of the Rule, opens up new issues for litigation, and begs questions of language that we believed to be plain and clear. Nevertheless, Sykes’ affirmation that defendants are entitled to pull back the curtain of provider’s billing practices gives defendants the strongest support yet for discovery and motion practice on Rule 414.
N.C. Gen. Stat. § 8C-1, Rule 414 (2019).
N.C. Gen. Stat. § 8-58.1(b) (2019).
Nicholson v. Thom, 236 N.C. App. 308, 337, 763 S.E.2d 772, 791 (2014)
Sigmon v. State Farm Mut. Auto. Ins. Co., 5:17-CV-00225, 2019 WL 7940194 at *2 (WDNC Nov. 14, 2019).
1991 N.C. Sess. Laws Ch. 310 (H.B. 588).
2013 N.C. Sess. Laws Ch. 382 (H.B. 834).
Sykes v. Vixamar and Progressive Univ. Ins. Co., 830 S.E.2d 669, 673, 830 S.E.2d 669.
By Kaitlyn Haran, McAngus Goudelock & Courie
On June 14, 2018, the North Carolina House of Representatives voted on the Appropriations Act of 2018, otherwise known as SB 99. This new bill brings about a big change for Worker’s Compensation Penalties per N.C. Gen. Stat. §97-94, which discusses the Employer Penalty Section and comes into effect July 1, 2018.
N.C. Gen. Stat. §97-94 lays out the penalties for failing to comply with §97-93, which states employers are required to carry insurance or prove financial ability to pay for benefits. If the employer refuses or forgets to do this, they are punished by a penalty. This penalty is one dollar for each employee, but not less than fifty dollars or more than one hundred dollars, for each day of refusal or neglect until it stops. Moreover, if an employee is injured during this time, the employer is liable for compensation for that employee. This means if you have 10 employees, and forget to get insurance for one year, you could be liable for $50 per day for 365 days, resulting in an $18,250 penalty. If you have 150 employees for one year, you could be liable for $100 per day for 365 days equaling a penalty of $36,500.
If an employer is found to have violated this, the penalty may be assessed by the Industrial Commission, and the employer has a right to a hearing within thirty days of the notice of noncompliance. The Attorney General enforces this and if the employer willfully fails to secure compensation, they will be guilty of a class H felony, and if they neglect to secure compensation, they are guilty of a class 1 misdemeanor. If you know about the noncompliance and have the ability and authority to get the employer to comply, and you willfully do not, you will be guilty of a class H felony. If you simply neglect to do so, you are guilty of a class 1 misdemeanor. Moreover, you could be liable for a civil penalty up to 100% of compensation due to an injured employee during the time of disobedience.
The Industrial Commission does have the ability to suspend or remit the penalty however, if the employer pays the compensation due and complies with N.C. Gen. Stat. §97-93.
The new law changes the penalty section of the current law. Section (b1) of the new law states instead of not less than fifty dollars, it is not less than twenty dollars and not more than one hundred. Using the same analogy as above, if the employer has 10 employees and forgets insurance for one year, rather than a penalty of $18,250, their penalty is $7,300. However, if you have 150 employees, the penalty remains the same as above.
Section (b2) now offers an alternative to this that was not available before. The employer may submit to the Industrial Commission proof they have obtained insurance and all payroll records for the period of noncompliance. The Commission shall verify the coverage and rescind the (b1) penalty and instead assess a new penalty. The new penalty will be calculated by first determining the cost per employee for insurance. This is done by dividing the cost of the policy by the number of employees. Then, they will determine the average number of employees during the penalty period. Finally, they will multiply the cost per employee during the period by the average number of employees during that time. The Commission will use that number plus an additional ten percent as their new penalty.
For example, under this section, say the worker’s compensation insurance costs $1000 and you currently have twenty employees, you divide 1000 by 20. This is $50. If you had 10 employees during the period of noncompliance, you take 50 times 10 and get $500. Then you add an additional 10% of this, $50, and your total fine is $550. The number of days you were disobedient does not matter. Therefore, if it lasted a year, you still only owe $550 rather than the $18,250 that it was. Keep in mind however; this is only available to an employer who has not previously been penalized under this section.
Again, the employer has a right to a hearing if requested within 30 days after notice and sections (b1) and (b2) the penalty shall not apply to a period that occurred more than three years prior to the date the Commission first assessed the penalty. The employer also continues to be liable for compensation of the injured employee during the penalty period as well, and the criminal charges remain the same. The Commission still has the authority to suspend or remit collections if employer pays any compensation due and complies with §97-93.
How Law has been applied in Past Year
Since the law has passed, there have been several cases at both the Deputy Commissioner Level and Full Commission wherein the issue includes whether there should have been a penalty assessed by the Commissioner at all. However, there have not yet been any cases wherein the parties fight over what the penalty should be and how it should be calculated. The typical course of action has been for the Courts to apply the penalty using the b(1) penalty unless the Defendant specifically requests the penalty be calculated under b(2). As such, it is important to request the Court asses the penalty under b(2) so that the potential reduction applies.
By Melissa K. Walker, NC Department of Justice
As I sat in my hospital bed recovering from an emergency c-section at 28-weeks, I opened my laptop and sent emails requesting opposing counsel agree to extensions of time and continuances in several pending matters. Some were gracious and agreeable, others were not. Thankfully, the requests were ultimately granted by the court, which mooted any potential issue. Had the court not granted my requests, although I was not yet cleared to drive or lift anything heavier than my child (who weighed three pounds at that point), I would have been required to get dressed in a suit and appear in court. Let’s be honest folks -- mesh postpartum underwear is not courtroom attire. Although potentially comical, my situation was not uncommon. Going forward, this situation will be much less likely based on recent advancements in parental leave rights. These recent developments will help to ease some of the burden and uncertainty brought on by parenthood.
The first advancement stems from Executive Order No. 95 signed by Governor Roy Cooper on May 23, 2019. Executive Order No. 95 provides eight weeks of paid parental leave for eligible state employees of any North Carolina department, agency, board or commission under the Governor’s oversight. The Department of Justice, through an Office of State Human Resources Paid Parental Leave Pilot Program, adopted Governor Cooper’s Executive Order effective September 1, 2019. The Administrative Office of the Courts and the Office of Administrative Hearings have also voluntarily agreed to provide paid parental leave to eligible employees. As of August 13, 2019, other agencies that voluntarily agreed to provide paid parental leave to eligible employees included: the Department of Agriculture and Consumer Services, the Office of the Commissioner of Banks, the Office of the Secretary of State, the Office of the State Auditor, the Office of the State Controller, and the Department of Public Instruction.
The Office of the State Treasurer, led by State Treasurer Dale R. Folwell, and the Department of Labor, led by Labor Commissioner Cherie Berry, elected not to offer paid parental leave. A spokesperson for the Department of Labor was quoted in the News & Observer as saying, “Labor Commissioner Cherie Berry ‘feels that there are sufficient leave programs already available to state employees to address such absences.’” The Department of Insurance, the State Education Lottery, UNC System, and the Community College System Office were still evaluating participation as of August 13, 2019. At the time of the entry of Executive Order No. 95 by Governor Cooper, five states, including Rhode Island, California, New Jersey, New York, and Washington, mandated paid family leave to both public and private employees. Eight states including Delaware, Illinois, Indiana, Kansas, Maryland, Ohio, Missouri, and Virginia, provide parental leave to state employees.
According to Governor Cooper’s Executive Order No. 95 Fact Sheet,
Paid parental leave has been shown to promote mental and physical family health, increase worker retention, improve worker productivity and morale and reduce the demand on the social safety net by reducing the likelihood that working parents must apply for taxpayer-funded benefits. Paid parental leave can also reduce gender inequities in the workplace and at home, where women are more likely to bear the burden of unpaid caregiving responsibilities on top of their careers. Furthermore, research suggests that babies born to mothers with paid parental leave are less likely to be born prematurely and more likely to be born at a healthy weight, and children whose parents have access to parental leave are more likely to attend well care visits and exhibit fewer health problems. When paid parental leave is available, women who give birth are less likely to experience postpartum depression and men are more likely to be involved fathers.
Prior to the entry of Executive Order No. 95 and its adoption by multiple state agencies, options for paid parental leave were limited. Employees could use accumulated vacation and sick days, if available, or rely on the kindness of strangers to donate leave in response to a Voluntary Shared Leave Request. Taking unpaid leave was another option. Fortunately, with the adoption of the Paid Parental Leave policy, parents can now bond with their new child without having to worry about using saved or donated leave or taking leave without pay.
In addition to the advancement in paid parental leave, lawyers across the State are also benefiting from a recent rule change that now allows attorneys to designate up to 12 weeks of secured leave when a child is born or adopted. The North Carolina Supreme Court, led by Chief Justice Cheri Beasley, amended Rule 26 of the General Rules of Practice and Rule 33.1 of the Rules of Appellate Procedure to allow an additional 12 weeks of secured leave to be designated in the 24 weeks after the birth or adoption of the attorney’s child. Therefore, if a child is born or adopted in a two-attorney household, the 12-week period of secured leave could be used consecutively to ensure the primary care of the child was provided by a parent during the first six months of the child’s birth or adoption. Moreover, this 12-week period is in addition to the three weeks of secured leave available in a calendar year, for any purpose.
Secured leave is defined as a complete calendar week period, designated by an attorney, within which trial and appellate courts will not hold a proceeding in the attorney’s cases. Therefore, while in-court appearances will not be required by the newly amended secured leave rules, deadlines for filing notices of appeal, as well as the submission of briefs, and records, are not impacted by the change. However, as the amended rules encourage courts to adopt a flexible approach to secured leave, hopefully the appellate courts will also be flexible with requests for extension of time when deadlines fall during a secured-leave period.
While Chrissy Teigen and Amy Schumer can pull off public appearances in postpartum mesh underwear, thankfully now North Carolina attorneys won’t have to endure that experience in the courtroom!
By: Jeri Whitfield and Lisa Shortt, Fox Rothschild, LLP
In five opinions authored by Chief Judge Linda McGee, with concurrences by Judges Dietz and Collins, the North Carolina Court of Appeals affirmed the Industrial Commission and found that Continental Tire The Americas (Continental) did not expose its employees to asbestos sufficient to cause any of the employees’ alleged asbestosis or asbestos-related cancers. The Hinson opinion applies to over 150 workers’ compensation cases filed in 2008, following the closure of Continental’s Charlotte tire manufacturing plant.
The Plaintiffs filed occupational disease claims with the Industrial Commission alleging they suffered from asbestosis and/or asbestos related cancers as a result of exposure to asbestos materials inside the tire manufacturing plant. Plaintiffs obtained these diagnoses of asbestosis and/or asbestos related cancers in 2008 following mass screening exams organized by Wallace & Graham. They alleged they were exposed to asbestos in all areas of the plant due to damaged or deteriorated asbestos-containing pipe insulation, manipulation and handling asbestos-containing gaskets, brake dust on forklifts, and exposure to asbestos-contaminated talc. Based on decades of epidemiologic and industrial hygiene studies, Continental argued that even if Plaintiffs’ claims of exposure were true, such minute, episodic exposures would not be sufficient to cause or contribute to asbestosis or asbestos related diseases. Moreover, based on its own medical experts and the Plaintiffs’ own treating physicians, Continental denied that the diagnoses of asbestosis were valid. Having multiple manufacturing facilities around the world from which there were no claims of asbestosis, Continental denied that working in its North Carolina facility could cause the asbestosis epidemic being claimed, and sought a full trial on the scientific issues.
Consolidation provided an efficient way to address common questions arising in the claims. The Commission consolidated the cases and established a procedure to allow the parties to take depositions and have expert witnesses testify live, unlike most Industrial Commission cases. Given the volume of cases, the parties presented a full trial on liability using five Bellwether Plaintiffs selected by the Plaintiffs’ counsel to represent the long-term employees from various areas of the plant. As noted by the Court of Appeals, this procedure flipped the normal progression by deciding the issue of Continental’s liability first, rather than determining whether the Plaintiffs had the disease claimed. Thus, the trial addressed the work-related issues common to the consolidated Plaintiffs and the relevant scientific and medical research to determine whether the type, quantity, and duration of the alleged exposures to asbestos at the plant could cause or contribute to any asbestos-related diseases. At the outset, the parties agreed that the liability holding would be applicable to all Plaintiffs.
The cases were heard by Deputy Commissioner Stephen Gheen on a special-set basis at various locations over the course of 38 days of live testimony, most of which involved expert witnesses, beginning in February 2011 and concluding in February 2013. When the trial was nearly complete, Plaintiffs’ introduced new allegations that the talc used by Continental was contaminated with asbestos (it wasn’t)—thus resulting in a mini-trial on Vermont talc.
The diagnoses of asbestosis were based on borderline B-reads of poor quality x-rays. A battle of the experts as to whether the Plaintiffs had the disease claimed ensued. However, all parties agreed that although experts may occasionally vary in interpreting an x-ray, that to have over a hundred cases where the defense experts viewed the radiology as normal and the Plaintiffs’ experts found abnormalities does not indicate a difference of opinion; it indicates bias. Most of the Plaintiffs’ diagnoses of asbestosis were based on 1/0 B-readings of their chest x-rays as “consistent with asbestosis,” although a score of 1/0 is a borderline determination. The same radiographs were read by defense experts who rated them as 0/0 or completely normal. When real abnormalities were found by chest x-ray, Plaintiffs’ experts ignored the medical conditions reflected in Plaintiffs’ medical records as the actual cause (i.e. pneumonia, rib fractures, etc.) and attributed all abnormalities to asbestosis. Because B-readers are trained to read x-rays to a standard and a difference of 0/0 to 1/0 is an unacceptable result, the Commission agreed that this consistent disparity raised the issue of B-reading bias by one side.
Pathology showed which experts were reliable. Thus, when several Plaintiffs died of unrelated conditions, over Plaintiffs’ objections, Continental sought and obtained a standing order to be allowed to obtain autopsies and lung samples, which allowed Continental to obtain definitive pathological evidence of the absence of asbestosis. The medical experts agreed that the only definitive way to diagnose asbestosis is by pathology. However due to the risks involved the procedure is not done while the patient is alive, it is performed at autopsy. In several cases, Plaintiffs’ counsel failed to notify Defendant that a claimant died prior to burial. Nonetheless, Defendant obtained lung tissue from Bellwether Plaintiff Hinson (who was alleged to have been the most heavily exposed employee in the plant) and four other long-term employees who worked in various areas of the plant. The lung tissue analyses revealed that none of the five claimants had asbestosis and none of the five claimants had a level of asbestos fibers in their lungs indicative of an occupational exposure to asbestos. Plaintiffs’ only medical rebuttal to the pathology evidence was offered by Dr. Arthur Frank, an occupational medicine physician. He did not look at the pathology reports, but he artfully opined: I would say a radiologic diagnosis combined with a history of exposure is adequate. He also opined that radiology was superior to pathology at diagnosing asbestosis.
The Motion to Compel High Resolution CT Scans to address the conflict among experts: In addition to the consistent disparity of B-reads, which by definition are meant to be read to a consistent standard, Plaintiffs’ x-rays also failed to show other markers of asbestos. Generally 80% of people diagnosed with asbestosis will have bilateral pleural plaques. However, Plaintiffs’ experts in these cases only identified about 10% of the Plaintiffs as having any pleural plaques (findings also disputed by Defendant’s experts). This is statistically improbable. Plaintiffs’ counsel also instructed Plaintiffs to refuse high resolution CT scans, which scans are standard practice in actual cases of suspected asbestosis because a high resolution CT scan allows a superior view of the lungs. In an effort to overcome the bias, early in the proceedings Continental requested the parties agree to an expert chosen by the Commission to B-read the x-rays or agree to another unbiased procedure. Plaintiffs refused. Defendant then moved to require the Plaintiffs to submit to high-resolution CT scans at its expense and agreed to be bound by the opinions of an independent expert chosen by the Commission. Again, Plaintiffs objected. The Commission noted that the Plaintiffs’ refusal could “cut both ways.” The Court held that the Industrial Commission could consider that Plaintiffs had the burden of proof. Plaintiffs’ refusal to agree to certain more accurate medical procedures was also proper to consider.
Holding: The Industrial Commission determined that conditions at Continental could not have exposed any of the employees to airborne asbestos of a type and in a sufficient amount as to cause or contribute to asbestosis or other asbestos-related disease. This finding eliminated all of the claims due to lack of causation and “last injurious” exposure. The Court of Appeals found ample evidence supporting the Industrial Commission ruling.
Is there a question of disability? Most of the Plaintiffs had 1/0 B-reads (a borderline diagnosis) with a Class I AMA impairment—which is normal lung function. The Court analyzed the compensability of occupational diseases under the statute and stated that the employee must not only have an occupational disease, it must result in disability. Query whether a Class I AMA lung function (normal) indicates any disability?
The amount of exposure impacts causation. The Court analyzed the question of exposure dose as impacting the Commission’s causation analysis: (1) Was the exposure sufficient to be a “significant causal factor” in the development of Plaintiffs’ alleged asbestosis; and (2) was the exposure “significantly greater” than the background environmental exposure. . . . If the answer to either of these questions was “no,” then any alleged asbestos-related diseases could not be causally linked to work at the factory. Continental introduced pre-abatement air monitoring surveys and many other surveys showing no evidence of asbestos in the plant air and dust levels well below OSHA permissible exposure limits.
Live expert testimony. The Deputy Commissioner commented that having the expert witnesses testify live was superior to just providing depositions. It allowed him to clarify any questions raised and evaluate credibility.
Colon cancer and tonsil cancer. These conditions were found to be ordinary diseases of life to which the general public was equally exposed and not occupational diseases. The record contains expert testimony regarding both cancers and the literature regarding any causal relationship to asbestos exposure.
Hinson v. Continental Tire The Americas, 832 S.E.2d 519, 2019 WL 4168922
Welch v. Continental Tire The Americas, COA18-769, 2019 WL 4168915 (NC Ct. App. Sept. 3, 2019) unpublished
Epps v. Continental Tire The Americas, COA18-768, 219 WL 4168914 (NC Ct. App. Sept. 3, 2019) unpublished
Wilson v. Continental Tire The Americas, COA18-766, 2019 WL 4168910 (NC Ct. App. Sept. 3, 2019) unpublished
Newell v. Continental Tire The Americas, COA18-767, 2019 WL 4168912 (NC Ct. App. Sept. 3, 2019) unpublished
Dr. Andrew Ghio, Dr. Michael Alexander, Dr. Phil Goodman, Dr. Peter Barrett
Frank Dep. (07/21/2015) p. 43.
Id. p. 65.
Id. p. 68,
Id. pp. 28-30.
Id. pp. 44-5.
The purpose of a guard is to protect people from hazards associated with machinery. Guards also protect people from injuries that occur due to fatigue, distraction, and other forms of human failure. The illustrations below depict various hazards that may be encountered in industry.
Inrunning Nip Hazards
Inrunning Nip Hazard Example
An inrunning nip point is created by a mechanism having one or more rotating parts. Wherever parts rotate over, under, or near a stationary object, or wherever machine parts rotate in contact with or near other rotating parts (in opposing directions) an inrunning nip is formed. The danger of the inrunning nip hazard is that it draws objects into the mechanism, entrapping, and often flattening them. It can be difficult, if not impossible, to withdraw entrapped body parts from these hazards.
Shear Hazard Example
A shear hazard is created where two machine parts move across each other or move closely enough to cut or move an object that enters the system. Shear hazards frequently exist in machinery and equipment designed for cutting or punching.
Crush Hazards (Pinch Point hazard)
Crush Hazard Example
A crush hazard is created where two objects move toward each other or when a moving object approaches a stationary object. Injuries occur where body parts get caught or crushed between two parts/objects. Crush hazards frequently exist in machinery or equipment designed to bend, stamp, or form metals.
Snag Hazard Examples
A snag hazard is created where rotating or reciprocating equipment includes protrusions that can catch or snag on clothing or other passing objects. Snag hazards have the potential to quickly draw a person into moving equipment, creating entanglement hazards. They can also tear flesh or dismember body parts depending on their size, shape, and sharpness. While projections on rotating shafts can catch or snag clothing, a bare rotating shaft can present a snag hazard as well.
INDUSTRIAL MACHINE SAFETY
Manufacturers must assure that hazards are engineered out of the product during the design process. If a hazard is inherent and cannot be designed out of the machine, system, or process, the hazard must be guarded. In all cases, the user must be warned or instructed about dangers of the product. These steps form the fundamental principles and rules of practice for the safe and appropriate engineering of products, and are sometimes referred to as the hierarchy of hazard control.
The requirement for guarding and, more broadly, machine safety is reinforced by a number of government and industry oversight organizations.
Robson Forensic possesses an extensive technical library that houses standards and reference materials dating throughout the modern industrial era. Our experts provide forensic investigations on behalf of both plaintiffs and defendants involving a broad range of industrial, commercial, and consumer products.
For more information, access the complete article at
By: Austin Starkey & Jason Ligon
As a litigation attorney, you could eventually need a financial expert in a case. But if you rarely or never engage one, you might be unsure of where to start that search. Do you consult your peers? Do you ask the professional who files your taxes? Do you just start Googling terms like “Certified Public Accountant”, “financial expert”, and “litigation support”?
As you research your options, you likely have your client’s budget in mind. You want to keep the cost low, but you have concerns about whether your potential expert can survive a Daubert challenge. Ultimately, you want to settle the case in a manner that satisfies your client.
If your tax accountant says they can probably handle the work, beware. The Certified Public Accountant (CPA) license spans a wide spectrum of subject matter; thus, a CPA in the context of audit or tax is vastly different from a CPA in the context of litigation support services. We encounter accountants moonlighting as financial experts and operating outside their depth all too often, and these would-be experts are vulnerable to criticisms of their CVs, if not a formal Daubert challenge. A typical accountant is likely ignorant not only of the specific procedures involved to provide litigation support services, but also the time necessary to complete them. In other words, they don’t know what they don’t know.
Qualified financial experts have the SKEET—Skills, Knowledge, Education, Experience, and Training— that most CPAs lack. These attributes are what make a “good” financial expert and help you win your case. The culmination of these five elements are necessary to make a well-rounded and effective expert. Experts must continually seek training and education to keep with changes in the business and accounting environment, much like attorneys must do as new laws and regulations are passed.
Additional certifications and advanced degrees are not always applicable to the careers of our accounting peers in audit and tax, but they are extremely important to obtain knowledge, education, and training necessary for being a financial expert. Such certifications require completing coursework, passing exams, and earning certain experience on top of the requirements to obtain a CPA license. Maintaining licenses and certifications requires annual continuing education on matters specific to providing litigation support services and opining as to financial damages. In addition to credentials, advanced college degrees add significant value to experts and strengthens your expert’s position during critiques of their CV or during a Daubert challenge. Financial experts have to consider all aspects of a business from operations to sales, accounting, and financial reporting, which cannot be obtained just by obtaining a CPA license.
An accountant or economist that is not regularly involved in litigation matters is frequently unaware of the methodologies associated with this subject matter. Could they explain before-and-after, market share, yardstick, or forecasting approaches for calculating lost profits? How much experience do they have examining legal documents and forming conclusions of damages based on the terms of a specific contract? To a financial expert, these are everyday concepts. Subsequently, a qualified financial expert can convey all this information in front of a judge or jury when it’s show time. Testifying is not at all common among CPAs outside of this specialization; whereas, financial experts regularly sit on the hot seat during depositions and trial testimony. In many circumstances, financial experts have undergone training specifically to prepare for such situations.
Consulting a well-qualified expert early in the litigation process can lead to significant efficiencies in quantifying damages. For example, an expert can assist in the request for documents, evaluate discovery documents, and provide insight on potential issues. The sophisticated expert likely has a team under their supervision contributing a large portion of the assistance and analysis required – they can offer that assistance and analysis at a lower hourly rate than that of the testifying expert. Experienced experts will eliminate many of the “surprises” and uncertainties from the damage quantification process.
When you find yourself in need of a qualified financial expert or need assistance interpreting the financial aspects of a case, Elliott Davis and our team of litigation support professionals are ready to help. Contact the team members:
By Jay C. Salsman and Christina J. Banfield,
Harris, Creech, Ward & Blackerby, P.A.
“[I]t is but just that the public be required to care for the prisoner, who cannot by reason of the deprivation of his liberty, care for himself.”
Local jails and state prisons in North Carolina have an obligation to provide medical care to inmates and prisoners, who inherently rely on jail authorities to obtain treatment for their medical needs as they are not free to seek medical care on their own. When inmates believe that they have been denied or given inadequate medical care by health care providers at these institutions, they have the right to seek monetary relief for such under 42 U.S.C. § 1983.
Civil rights cases brought by state prisoners and county inmates are governed by 42 U.S.C. § 1983, and allow prisoners to seek relief in federal court when they believe their civil rights have been violated. 42 U.S.C. § 1983 states that a person acting under color of state law, such as a state prison employee or county correctional employee, may be liable for the violation of a right protected by the United States Constitution or created by a federal statute.
An individual, private health care provider working at a state prison or county detention center can be deemed to be acting under color of state law. However, a private health care corporation cannot be held vicariously liable under § 1983 for any acts by an individual health care provider. A private health care corporation can only be held liable under § 1983 for a claim demonstrating that an official policy or custom of the corporation caused an alleged violation of a right.
Common § 1983 claims against health care providers are (1) claims that prison or jail conditions cause harm to the health or safety of the inmate, in violation of the Eighth Amendment protection against cruel and unusual punishment, and (2) claims that the providers are deliberately indifferent to an inmate’s serious illness or injury, in violation of the Eighth Amendment protection against cruel and unusual punishment. “In order to make a prima facie case that prison conditions violate the Eighth Amendment, a prisoner must show both ‘(1) a serious deprivation of a basic human need; and (2) deliberate indifference to prison conditions on the part of prison officials.’” In order to establish that a health care provider’s actions constitute deliberate indifference to a serious medical need in violation of the Eighth Amendment, the prisoner must show that the medical treatment is so grossly incompetent, inadequate, or excessive as to shock the conscience or to be intolerable to fundamental fairness.”
Deliberate indifference further requires that a health care provider “actually know of and disregard an objectively serious condition, medical need, or risk of harm.” A health care provider’s failure to alleviate a significant risk that he should have perceived, but did not, cannot establish deliberate indifference. Additionally, mere negligence or medical malpractice is not sufficient to constitute deliberate indifference to a serious medical condition. Further, a mere disagreement between an inmate and a health care provider regarding the appropriate form of treatment does not state a constitutional claim.
Qualified immunity may apply to shield a health care provider from liability for civil monetary damages under a § 1983 suit if the provider’s conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known. The crucial question in a qualified immunity inquiry is whether the provider’s conduct would strike an objective observer as falling within the range of reasonable judgment. A health care provider is entitled to qualified immunity unless a reasonable person in her position would have known, based on the information possessed by her at the time, that her actions would constitute deliberate indifference to a serious medical need.
Pursuant to 28 U.S.C. § 1367, an inmate may also allege a related supplemental state law claim for medical malpractice against a health care provider. Where an inmate’s federal complaint also alleges a state law claim for medical malpractice against a health care provider working at a jail, Rule 9(j) of the North Carolina Rules of Civil Procedure applies, and the inmate must allege that all medical care and all medical records have been reviewed by a person reasonably expected to qualify as an expert and willing to testify that the medical care did not meet the standard of care.
Inmates may not immediately file a § 1938 action after any alleged deliberate indifference to a serious medical need; instead, an inmate must exhaust all administrative remedies available to him, thereby completing the entire administrative remedy process for any such claim. Once administrative remedies have been exhausted, an inmate can file his § 1983 suit in federal court. Because § 1983 does not have its own statute of limitations, it is considered “deficient” within the meaning of 42 U.S.C. § 1988. Therefore, the forum state’s personal injury statute of limitations governs the time in which the inmate may file his suit. In North Carolina, the statute of limitations for personal injury is three years.
After the inmate files his suit, a judge will conduct a frivolity review of the plaintiff’s complaint. If the court determines that the complaint is (1) frivolous, malicious, or fails to state a claim upon which relief may be granted, or (2) seeks monetary relief from a defendant who is immune from such relief, then the court can dismiss the complaint at a very early stage, prior to issuing summons to the named defendants. If the suit moves forward, an inmate may file a motion for appointment of counsel with the court, as inmates have no constitutional right to counsel in a civil action.
In defending against a complaint brought by an inmate, it is important to note that deliberate indifference is an extremely high standard that the inmate has the burden of proving. In supporting a motion for summary judgment on such claims, medical records of sick calls, examinations, diagnoses, and medications may rebut an inmate’s allegations of deliberate indifference. Further, the motion may, and should, be supported by a detailed affidavit from the defendant health care provider, outlining and detailing all medical care given. In addition, expert witnesses who are familiar with the standard of care in county jails or in state prisons may be helpful to outline the standard of care that would have applied to the medical care given to the inmate.
42 U.S.C. § 1983 is an important vehicle that allows inmates to seek relief against private health care providers when they have actually been deprived of a right to adequate medical care during their incarceration. However, there is and will continue to be ample statutory and case law support to assist health care providers with successfully defending against civil rights claims that are baseless or do not allege facts showing deliberate indifference to a serious medical need.
Spicer v. Williamson, 191 N.C. 487, 490, 132 S.E. 291, 293 (1926).
Estelle v. Gamble, 429 U.S. 97, 103 (1976).
Monell v. Dep’t of Social Servs., 436 U.S.C. 658, 690 (1978).
42 U.S.C. § 1983.
West v. Atkins, 487 U.S. 42, 50-51 (1988).
Rodriguez v. Smithfield Packing Co., 338 F.3d 348, 355 (4th Cir. 2003); Austin v. Paramount Parks, Inc., 195 F.3d 715, 727-28 (4th Cir. 1999).
Monell v. Dep’t. of Social Servs., 436 U.S. 658, 690 (1978); see also City of Canton v. Harris, 489 U.S. 378, 385 (1989).
Strickler v. Waters, 989 F.2d 1375, 1379 (4th Cir. 1993).
Miltier v. Beorn, 896 F.2d 848, 851 (4th Cir. 1990), overruled in part on other grounds by Farmer v. Brennan, 511 U.S. 825, 837 (1994).
Short v. Smoot, 436 F.3d 422, 427 (4th Cir. 2006).
Farmer v. Brennan, 511 U.S. 825, 838 (1994).
Estelle v. Gamble, 429 U.S. 97, 106 (1976).
Id. at 105-06.
Wiley v. Doory, 14 F.3d 993, 995 (4th Cir. 1994).
Gooden v. Howard County, Maryland, 954 F.2d 960, 965 (4th Cir. 1992).
Anderson v. Creighton, 483 U.S. 635, 639-40 (1987).
Estate of Williams-Moore v. Alliance One Receivables Mgmt., 355 F. Supp. 2d 636, 649 (M.D.N.C. 2004); Moore v. Pitt Cty. Mem’l Hosp., 139 F. Supp. 2d 712, 713 (E.D.N.C. 2001).
42 U.S.C. § 1997e.
Wilson v. Garcia, 471 U.S. 261, 280 (1985).
N.C. Gen. Stat. §1-52(16).
28 U.S.C. § 1915A.
See Lassiter v. Dept. of Social Servs., 452 U.S. 18, 26-27 (1981).
See Grayson v. Peed, 195 F.3d 692, 695 (4th Cir. 1999).
Banuelos v. McFarland, 41 F.3d 232, 235 (5th Cir. 1995).
By Colleen Byers,
Bell Davis Pitt
Abraham Lincoln, a wise lawyer and visionary leader once said, “With malice toward none, with charity for all, with firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation’s wounds.” Abraham Lincoln was talking about the abolition of slavery and the healing of a young country quite literally torn apart by Civil War. Yet there are pearls of wisdom in President Lincoln’s words that are equally applicable to our modern legal practices. After all, as lawyers and mediators, we are frequently called upon to bind up the parties’ wounds.
Collaborative law is a form of alternative dispute resolution that offers parties an opportunity to bind up their wounds with dignity and respect. Conceived in 1990 by Minnesota family lawyer Stuart Webb, collaborative law is a non-adversarial, attorney-led, structured negotiation process that focuses on the needs and interests of the parties as they work together to create sustainable solutions.
With an emphasis on the open and honest exchange of relevant information, trained lawyers facilitate joint brainstorming sessions to support and empower the parties to craft a workable and lasting solution for themselves, rather than hand their fate over to a judge or jury after a long and costly battle through the court system. Collaborative law offers a faster, more cost effective, and less traumatic path toward conflict resolution that gives the parties a chance to preserve their relationships with each other. Unlike the modern mediation style where the parties remain in separate rooms, entrenched in their respective positions and worried that if the other side gets a bigger piece of the proverbial pie, then they will necessarily get less, in the collaborative process, all of the parties are seated at the same table, with their advocates by their sides, collectively brainstorming ways to expand the pie rather than just divide it. Everyone, including the attorneys, is committed to finding a business or personal resolution that everyone can embrace, not just reluctantly suffer through.
The Business Case for Collaborative Law
Collaborative law is particularly beneficial in matters in which there is an ongoing relationship or future associations. Think of a family business that’s “divorcing,” a construction project in which there’s the opportunity for the parties to have future, profitable ventures, or an employment matter where the parties have a continuing need to work together.
Increasingly, clients are unwilling or unable to pay large legal fees for extended periods of time or tolerate protracted litigation. Particularly those clients in the technology and innovation space do not have the time to wait 18-24 months for a dispute to work its way through the court system. By then, the technology has become archaic. Rather than pay their lawyers to fight over provisions of a required case management order and other procedural formalities, the parties in a collaborative case benefit from knowing that every minute their lawyer spends on their case, he is working toward facilitating a business resolution.
Collaborative Law Regulations Pending in NC
After hours of drafting and consulting with practitioners in a myriad of practice areas, the Uniform Collaborative Law Act (“UCLA”) was submitted to the North Carolina legislature. This winter, it passed the House and is currently before the Senate Rules Committee for consideration. The UCLA seeks to codify the regulations for the practice of collaborative law in non-family civil matters. Of particular importance to attorneys is the restriction on collaborative attorneys and their respective firms from representing their clients in subsequent litigation if the dispute is not resolved in the collaborative process. This disqualification rule is intended to encourage parties and their lawyers to engage diligently in negotiations to avoid having to hire new counsel if they do not reach resolution in the collaborative law process.
Collaborative Law Resources
Led by John Sarratt, the North Carolina Civil Collaborative Law Association (“NCCCLA”) seeks to educate attorneys as well as the general public about the many advantages of utilizing collaborative law to resolve civil disputes in the commercial arena. The non-profit organization defines uniform standards and best practices for civil collaborative professionals, offers training and networking opportunities, and provides resources for practitioners and parties.
If you want to learn more about collaborative law and how to incorporate it into your practice, please join me and other leaders of NCCCLA at an upcoming Collaborative Practice Training CLE in Asheville on June 19th and 20th. For details and registration, click here:
The collaborative process is not the right fit for every dispute, nor for every client, but it is a viable form of alternative dispute resolution that we, as counselors at law, should educate ourselves and our clients about.
About the Author
Colleen L. Byers is a lawyer and certified mediator at Bell, Davis & Pitt. Her legal practice includes business and commercial litigation, legal malpractice defense, trust, estate and guardianship disputes, will caveats, and fiduciary litigation. Colleen is trained in the Civil Collaborative Law process and is certified by the North Carolina Dispute Resolution Commission to mediate Superior Court cases as well as those matters pending before the Clerk of Court. When she is not spending time with her husband and their daughters, Colleen enjoys practicing and teaching yoga.
By Alesha Brown and Michael CohenCranfill Sumner & Hartzog, LLP
Since 2004, the Department of Labor (“DOL”) has required that employees otherwise qualified under the executive, administrative, or professional (“EAP” or “white collar”) exemptions be paid overtime if they earn less than $455 per week, equating to annual salaries below $23,660, regardless of their duties. In May 2016, the Obama administration proposed to increase the annual salary threshold to $47,476, or $913 per week. The Obama administration’s rule also proposed that the Highly Compensated Employee (“HCE”) exemption compensation level increase from $100,000 to $147,414, along with automatic updates to the salary levels every three years.
The Obama administration’s salary threshold rule was scheduled to take effect on December 1, 2016. However, on November 22, 2016, just over one week before the rule’s implementation, a federal judge in the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction, thereby preserving the status quo while the court reviewed the DOL’s authority to make the rule. The court held that the salary threshold increase at issue “create[d] essentially a de facto salary-only test,” and “ignore[d] Congress’s intent by raising the minimum salary level such that it supplants the duties test.” The DOL appealed the court’s ruling to the Fifth Circuit on December 1, 2016.
Following President Trump’s inauguration in January 2017, the DOL largely went silent regarding its position on the appeal and the rule, though it expressed its intention to reevaluate the salary threshold. On August 31, 2017, during the appeal of the preliminary injunction, the Eastern District of Texas granted summary judgment against the DOL, officially invalidating the Obama administration rule. The court therein held that the rule “would exclude so many employees who perform exempt duties,” rendering the rule inconsistent with “Congress’ unambiguous intent.” In essence, while the court did not invalidate the DOL’s ability to adjust the salary threshold, it held that more than doubling the threshold effectively eliminated the duties test, going beyond the DOL’s role of merely setting a floor to screen out employees that are very likely non-exempt.
On March 7, 2019, after seeking public comment, the DOL issued a Notice of Proposed Rulemaking, which reflected its newly proposed rule. The proposed rule would increase the minimum salary threshold for the “white collar” exemptions from $455 per week ($23,660 per year) to $679 per week ($35,308 per year). Any employees paid less than the newly proposed salary threshold would be deemed non-exempt and rendered eligible for overtime premiums, regardless of their duties or basis of pay. The proposed rule does not include automatic adjustments, as the Obama administration rule did, but the DOL has indicated an intent to propose an update every four years via notice and comment rulemaking. The proposed rule is based on the salary level for the 20th percentile of full-time salaried workers in the lowest census region and in the retail industry nationwide. The DOL estimates that, if implemented, its rule will render 1.1 million workers eligible for overtime premiums.
In addition to updating the “white collar” salary threshold, the proposed rule also increases the HCE exemption under the Fair Labor Standards Act (“FLSA”) from $100,000 per year to $147,414 per year. Accordingly, to be considered an exempt HCE under the proposed rule, an employee must be paid on a salary or fee basis, must customarily and regularly perform at least one of the exempt duties of an executive, professional, or administrative employee, and must earn at least $147,414 per year. The proposed rule also allows employers to use “certain nondiscretionary bonuses and incentive payments,” including commissions, to account for up to 10% of the new $679 per week salary threshold. However, the 10% compensation must be paid annually, rather than quarterly. The 10% provision is consistent with the rule proposed by the Obama administration.
The proposed rule will now undergo a period of notice and comment under the procedures of the Administrative Procedure Act, followed by additional evaluation. The DOL estimates that the final rule will take effect January 2020. The DOL’s January 2020 goal is quite ambitious, particularly when considering potential litigation and a presidential election looming. While the process is still underway and the final rule has yet to be rolled out, we anticipate that the final rule will be identical or substantially identical to the proposed rule.
If you advise employers that employ workers earning a salary of less than $35,308 per year, now might be the right time to prepare for the new rule’s implementation. If workers earning below the new threshold amount are already classified as non-exempt and entitled to overtime premiums, this rule will not affect their pay. Likewise, the rule will not affect the pay of workers who do not work overtime hours, i.e. hours in excess of 40 per week, regardless of their exempt status. If, however, your clients employ workers earning a salary below $35,308 (or $147,414 for HCEs), and such workers are currently classified as exempt, you should advise your clients to either reclassify the workers as non-exempt and pay them overtime, or raise the workers’ salaries to or above the threshold amount to maintain their exempt status. Your clients may also want to consider limiting hours and spreading work to other employees to help avoid paying overtime premiums, which was one of the principal purposes for the FLSA’s enactment. To the extent your clients reclassify certain employees due to the new rule, you should ensure that your clients are maintaining adequate records under the FLSA, as is required for non-exempt employees. As always, you should also take this opportunity to examine which employees your clients classify as exempt, and whether such employees satisfy the requisite duties for each applicable exemption.
Misclassification class and collective action and individual suits remain on the rise, and with the passage of this rule, which will likely entitle over one million more workers to overtime premiums, you should expect that trend to continue. Early and comprehensive preparation will help ensure that your clients avoid the significant costs (both economic and non-economic) that accompany these new changes.
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