NC Association of Defense Attorneys Featured Articles

All Law Is Local: Practical Pointers for Navigating NC’s County-by-County Civil Practice

Lynette Pitt — Thu, 26 Feb 2026 16:30:00 GMT

“Same rules, different world” is a useful mindset for any lawyer who practices across county lines. Every time you stand up in court, file a motion, submit a brief, or speak to a jury, you’re doing it in a specific location—not in a generic courtroom where everything works the same way everywhere. The statewide rules travel with you, but local practice does, too, and it can quietly shape whether your case moves smoothly or runs into avoidable friction.

The pointers below are written for young lawyers building instincts, but they are just as useful for seasoned attorneys who find themselves in an unfamiliar venue.

1) Start With Local Geography (Yes, It Matters)

North Carolina has 100 counties and multiple judicial divisions. Those lines matter more than they look on paper. Small, avoidable signals that you’re unfamiliar with the venue can affect credibility—especially in smaller communities.

A related planning point: superior court judges typically rotate within a division. It’s worth checking who is on rotation in your county when you’re deciding when to schedule something important, and then asking lawyers who practice there what they’ve learned about the judges who come through.

Best practice:

Confirm the division and rotation reality before you set high‑stakes deadlines.
Use available court scheduling resources, then validate what you learn with local counsel.
Treat venue familiarity as part of trial readiness, not an optional extra.

2) Treat Local Rules Like “Rules of Civil Procedure—Plus”

Local rules can function like an additional layer of procedure for a district. They apply only within that district, and enforcement can vary from place to place—sometimes even from judge to judge.

Also, be careful about scope. Some local rules apply across a multi‑county district even if the formatting of a “rules book” makes that easy to miss.

Best practice:

Locate the local rules, then verify whether they are county‑specific or district‑wide.
Ask a lawyer who practices there which rules are routinely enforced in that venue.
If you’re unsure, assume the local rule will be enforced and plan accordingly.

3) Scheduling Orders: In Many Places, They’re Not a Given

If you practice mainly in larger counties, you may expect every case to come with a scheduling order. In many counties, cases proceed without a formal scheduling order and counsel manage deadlines more informally.

Even where scheduling is structured, the terminology and forms can vary by venue. A habit that works in one county may not translate cleanly to another.

Best practice:

Ask early whether the venue typically uses a scheduling order or relies on counsel coordination.
Align your discovery plan and motion timing to the venue’s reality—not your home‑county assumptions.
When a form is required, use the county’s form (not your firm’s template) unless you confirm it’s acceptable.

4) Discovery and Depositions: County Culture Can Change What’s “Normal”

Discovery expectations can swing sharply across counties. Some venues specify a defined discovery period; many do not.

Deposition conduct and informal norms can also vary—for example, whether meeting with your client during a deposition break is viewed as improper.

Some venues have detailed expectations for proportionality, e‑discovery, privilege logs, and limits on written discovery.

Best practice:

Before you schedule depositions, check for discovery periods, limits, and any venue‑specific conduct expectations.
If a county has proportionality or e‑discovery guidance, treat it as your baseline from day one.
Don’t count on continuances for discovery disputes—some venues rarely grant them.

5) Motions Practice: Mechanics and Timing Can Be Different Everywhere

The mechanics of getting a motion heard are not uniform. Many counties rely on the trial court administrator or coordinator for scheduling, but individual venues can add their own procedures, calendars, lead times, and restrictions (including limits tied to proximity to trial).

Local scheduling requirements can matter beyond convenience. In some circumstances, compliance can affect whether a motion is heard at all.

Best practice:

Confirm the scheduling method for that county (form, portal, coordinator process) before you notice a motion.
Build in lead time that matches local practice, not your usual cadence.
Check for restrictions tied to trial dates, especially for dispositive motions.

6) Defaults and Minor Settlements: Local Rules Can Be Outcome‑Determinative

Some venues impose local procedures for entry of default, including notice requirements. Missing a local step can create an opening for the other side to seek relief.

Minor settlement approvals are particularly venue‑sensitive. Across the state, you will see many different approaches—including requirements for open court hearings, court reporters, and specific statements on the record.

Best practice:

Before pursuing default, confirm any local notice or timing requirements.
For minor settlements, build a venue‑specific checklist (documents, hearing format, required record statements).
Anticipate judge‑specific preferences and adjust your plan early—not on the hearing date.

7) Pretrial Procedure: Even “Statewide” Rules Don’t Always Feel Statewide

Pretrial expectations can be dramatically different across regions. Some venues operate with minimal pretrial paperwork; others expect detailed pretrial disclosures, exhibit lists, and witness lists.

In some counties, failure to comply with local pretrial requirements can have serious consequences.

Best practice:

Confirm whether the venue expects a pretrial order, exhibit list, witness list, and copies for jurors.
Map those requirements into your trial prep calendar at the start of the case.
If local rules set consequences, treat deadlines as firm—even if you’ve seen them relaxed elsewhere.

8) Local Peculiarities: Credibility Is Built (or Lost) in Small Moments

Venue familiarity is not only procedural. Mispronouncing place names, misunderstanding local reference points, or speaking in ways that feel disconnected from the community can undercut credibility.

Avoid oversimplifying jury pools with “rural vs. urban” labels. Communities are complex, and local attitudes can shape how jurors evaluate liability, damages, and witness credibility.

Be careful with casual comments about common local services or providers; what feels like a throwaway remark can land poorly in a community where that service is trusted and widely used.

Best practice:

Learn how locals pronounce place names and talk about their community—then match that tone respectfully.
Do a quick, focused review of community demographics and local context before trial.
Keep your courtroom language grounded and respectful; avoid broad stereotypes about venues or juries.

9) Your Fastest Local Advantage: People Who Already Know the Venue

One consistent theme: call someone who has been there. Experienced lawyers will often share practical venue intelligence if you ask.

Trial court administrators and coordinators are also key. They sit at the intersection of counsel, the judge, and the smooth functioning of the calendar—professionalism and clarity with them pays dividends.

Finally, avoid emphasizing that you’re from out of town. Let your preparation do the talking.

Best practice:

Develop a habit of getting local input early—before you file, notice, or commit to dates.
Treat the trial court administrator/coordinator with professionalism, clarity, and respect.
In court, project readiness and competence; avoid framing yourself as a newcomer.

The takeaway is not to be intimidated by local practice—it’s that local practice is learnable. A little upfront homework can prevent avoidable missteps and help you focus on what matters most: building credibility with the court and presenting your case clearly and persuasively.

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This article is adapted from the transcript of the July 2023 Practice Pointers Series presented by David Hood of Patrick Harper & Dixon, LLP.

Successful Billing Habits for Young Lawyers

Lynette Pitt — Wed, 28 Jan 2026 15:00:00 GMT

James G. Welsh, Jr., Davis & Hamrick, LLP

Billing can feel like an administrative chore, but it’s a core professional skill—and it directly affects your client relationships, your reputation inside your firm, and whether your work turns into revenue. The good news: strong billing isn’t complicated. It’s mostly about consistency, clarity, and good habits.

Make Daily, Accurate Billing Your Default

Law is a business. Your time has value, and time billed is what leads to time paid. One practical reality to keep in mind: it often takes about 10 hours of work to produce 8 billable hours—so if you’re not tracking time consistently, you can lose billable time without noticing.

Set Yourself Up To Succeed

Keep an accessible clock or timer.
Know your task codes.
Treat timekeeping like a skill you can improve.
Bill consistently and on schedule.
Send reminders when needed.
Learn when each client expects bills, and how they pay (cash, check, direct deposit, ACH, credit card, etc.).

Good billing habits help bills get paid faster—which makes everyone happier.

Best Practices That Prevent Lost Time

Write down your time immediately. The closer you capture time to the work, the more accurate it will be. Small increments matter (0.1s matter), and “small ticket” items add up over a week and a month.

A practical method:

Start the description before or as the work begins.
Then note the time at the conclusion—or complete the full entry at the end.
The key is to record it before you forget or get distracted.

Billing descriptions are where you show value

Descriptions aren’t filler. They’re vital—especially when there’s third-party billing review. Your entries should communicate value in a way that is clear and substantive. Describe what you did, and follow applicable guidelines.

Know What You Can Bill For—And Explain What Needs Explaining

Billing isn’t limited to just lawyer tasks. Depending on the matter and the client, you may be able to bill for items like copies or postage, and for appropriate paralegal tasks.

Some time entries can look high at first glance. When that happens, be proactive:

Offer explanations for time that may look excessive.
Show non-billable items when appropriate.
If something took longer than expected but you’re only charging less time, say so.
Above all, be fair.

Situational billing habits that make entries stronger

A Few Habits Will Save You Headaches Later

Get permission in writing when needed. If you need approval for an activity, get it in writing, confirm it in writing, and note that approval in your time entry.

Note volume and context. If the task involves volume, say so:

How long a brief is.
How many pages you reviewed. If you don’t know the exact page count, describe the volume (for example, a large folder or banker’s box).
Note whether the review was brief or more detailed.
Note time away from the office when relevant.
Track time on weekends or vacations if you are working.

Use the kind of description your client prefers. Some clients want maximum specificity; others want short, self-explanatory entries with general detail. Learn the preference and stay consistent.

Know what your firm wants. Billing expectations vary by firm, and you should understand your internal standards.

Avoid block billing. Break down work into separate entries or clearly separated segments so the reader can understand what was done and why it took the time it did.

When multiple lawyers are involved, communicate. If two or more lawyers are billing on the same matter, coordinate—especially within the same firm. If lawyers in different firms are billing the same client, acknowledge time involved with one another to support consistency and credibility.

Handle Third-Party Reviews and Appeals Like Part of the Job

If your bills are reviewed by a third party, don’t ignore the feedback—review it and understand why time was reduced. Know the appeal process, who to contact, and which appeals are worth pursuing.

Also:

Communicate with adjusters, managers, and clients when issues arise.
Use appropriate and fair budgets: err on the high side, but not too high.
Monitor budgets and warn the client if the budget needs to be edited/amended—and explain why.
Audit yourself before a third-party auditor does.

For unpaid bills, watch aging (30/45/60/90 days) and don’t wait too long to address the problem.

Be Honest and Careful—Every Time

Billing integrity matters. Be honest, and be mindful of confidentiality and privilege in your descriptions. Consider who is seeing the bill now—and who may see it later.

You also have to follow client guidelines, including guideline time restraints. If you exceed a guideline, explain it.

Avoid double billing (billing two clients for work done during the same block of time). If you’re working across matters in the same time period, pro-rate appropriately.

Travel is another common trouble spot. Know what your client treats as non-billable versus billable travel. Use non-billable travel time productively (return calls, dictation, intra-office matters), and remember that clients can check mileage and time.

Remember: Firms and Clients Really Are Different

Billing structures vary widely: hourly, flat fees, sliding scale, unbundled services, retainers. Your firm may use specific software or timesheets, and may rely on productivity or reporting tools. Use those tools to monitor what work you’re doing andd how long it takes—and check whether entries are accurate and what partners are cutting, and why.

Some firms also want non-billable time tracked (business development, pro bono, professional development, community service). Do what your employer expects.

Finally, don’t be afraid to talk to clients about bills and rates. Ask how your billing compares, whether there are concerns, and advocate for yourself professionally.

NC High Court’s Decision Signals Need to Revisit COVID Immunity Protections

Lynette Pitt — Fri, 09 Jan 2026 20:02:59 GMT

Health Care Providers Should Dust Off Preserved COVID Immunity Defenses After the North Carolina Supreme Court Vacated Unfavorable Covid Immunity Decision

Christy C. Dunn, Young Moore and Henderson, P.A.

In October 2025, the North Carolina Supreme Court vacated the Court of Appeals decision in Land v. Whitley, 292 N.C. App. 244 (2024) that affirmed the trial court’s denial of immunity from civil liability to health care providers during COVID-19 under the Emergency or Disaster Treatment Protection Act. Land v. Whitley, 920 S.E.2d 823 (N.C. 2025). Now that the only controlling appellate decision construing the Act (which was unfavorable to defendants) is gone, health care providers that have preserved this immunity defense but have not yet asserted it in active litigation should reconsider whether and when to do so.

Ms. Land received medical care from the defendants between June and August 2020, during the COVID-19 pandemic. In February 2022, she and her husband filed a complaint against her doctor, the physicians’ group, and the hospital, alleging negligence and gross negligence arising from complications following a hysterectomy.

The defendants filed motions to dismiss the complaint on grounds that they were entitled to immunity under Emergency or Disaster Treatment Protection Act, which was passed unanimously by the North Carolina General Assembly in May 2020. Specifically, the defendants moved to dismiss the complaint under North Carolina Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction, 12(b)(2) for lack of personal jurisdiction, and 12(b)(6) for the plaintiff’s failure to state a claim upon which relief may be granted.

The trial court denied the defendants’ motions to dismiss, and the defendants appealed. The plaintiffs moved to dismiss the appeal, arguing that the order was an interlocutory order that was not immediately appealable. The Court of Appeals denied the motion to dismiss the appeal, heard oral arguments on the issues presented, and later issued an opinion affirming the trial court’s order denying the defendants’ motions to dismiss the complaint. The Court of Appeals held that the defendants failed to establish a sufficient causal link between the impact of the COVID-19 pandemic and Ms. Land’s surgery and follow-up care, and therefore the defendants were not entitled to the statutory immunity. The Court of Appeals also held that the plaintiffs adequately pleaded gross negligence by alleging failures by the defendants during the surgery and follow-up care.

The defendants and their amici petitioned the North Carolina Supreme Court for discretionary review of the Court of Appeals decision, which the Supreme Court granted. In the amicus briefs that I authored on behalf of North Carolina’s long-term care facilities supporting the petition for discretionary review and supporting the defendants on the merits, we argued that the Court of Appeals erred because (1) the General Assembly intended to grant broad immunity to health care providers who delivered health care during the public health emergency, not to restrict the immunity to liability only for negligence or injuries caused by Covid; and (2) allowing plaintiffs to escape proper pleading standards for gross negligence nullifies the immunity granted by the Act and thwarts other important public policy.

Approximately one year after hearing oral arguments, the Supreme Court issued an opinion on October 17, 2025 vacating the Court of Appeals decision on grounds that the Court of Appeals lacked appellate jurisdiction because the defendants did not have a right to immediately appeal the trial-court order denying their motions to dismiss. The Court explained that because the order was interlocutory (not a final judgment), it was not immediately appealable unless the defendants could establish that the denial of their motions to dismiss affected a substantial right absent appellate review before a final judgment, or that the order was an adverse ruling on personal jurisdiction.

The Court concluded that the defendants failed to make either of these showings, and thus the Court of Appeals erred in exercising appellate review. The Court explained its reasoning that because the Emergency or Disaster Treatment Protection Act granted immunity from liability, and not immunity from suit, “any perceived injury from the denial of their motions could be remedied later in the trial proceeding or on appeal, precluding the need for interlocutory review.” The Court also disagreed with the defendants’ argument that the trial court’s order was an adverse ruling on personal jurisdiction, explaining that the right to immediate appeal of an adverse ruling on personal jurisdiction is limited to rulings on “minimum contacts” questions, not statutory immunity.

The Supreme Court vacated the Court of Appeals judgment and remanded the case to the trial court for further proceedings not inconsistent with its opinion.

Now that there is no controlling appellate decision construing the Emergency or Disaster Treatment Protection Act unfavorably toward health care providers, defendant health care providers that have preserved this defense in active litigation should consider whether to assert it, especially in cases where the plaintiff has no colorable claim of gross negligence and the assigned medical malpractice judge might be inclined to grant the immunity. Defense counsel should also evaluate the likelihood that your client’s set of facts will stand up on appeal if the trial court grants the immunity and whether those facts might risk making bad law.

Evaluating Military Career Damages in Personal Injury Cases

Lynette Pitt — Wed, 19 Nov 2025 20:25:58 GMT

by Major General (Retired) Boe Young
Military Expert Witness Group

Personal injury claims involving military service members frequently include allegations that an accident ended a promising career. When plaintiffs assert that an injury prevented continued service, that often translates into projected losses that include decades of future military pay, missed promotions, and substantial pension benefits. Because military compensation structures are unique — and North Carolina is home to large military communities spanning active-duty, Guard, and Reserve populations — defense attorneys and insurers must carefully assess these claims. Properly evaluating military career trajectories, advancement expectations, and benefit systems is essential to building a realistic and defensible economic model.

Evaluating Service Potential: A Two-Part Analysis

When assessing whether a service member truly lost a military career, we focus on two core questions:

1. Was the individual truly on track for continued service?

Military advancement is performance-based, not automatic. A service member’s personnel file is central to understanding their competitiveness. Promotion boards review performance reports, training history, leadership potential, and completion of required professional military and civilian education. Comparing a plaintiff’s record against these objective benchmarks — including historical board outcomes — helps determine whether their career momentum supported their damages claim.

2. Did the service have a demand for someone of their skills and rank?

Even strong performers may face limited opportunities if the service is downsizing or reshaping its force structure. We examine published force-management data, promotional opportunity metrics, and trends in specialty demand. Understanding how the military allocates human capital across career fields is critical to determining whether a long-term career was realistically available to the plaintiff and for how long.

Once these issues are understood, we separate fact from assumption. For example, plaintiffs often assume an uninterrupted career path extending to 20 years of service. In reality, many military members serve under short-term contracts and may not even be eligible to reenlist without meeting performance criteria. These details significantly affect projected tenure and retirement eligibility.

With the factual foundation clarified, we model potential career outcomes and compensation streams using DoD pay tables, statutory formulas, and established regulations. These projections typically account for base pay, allowances (BAH and BAS), special or incentive pay, health-care value, and, if applicable, retirement benefits.

The Weight of Retirement in Damages Models

In many military-related injury cases, the largest component of alleged economic loss involves retirement benefits — particularly the value of an immediate, lifetime active-duty pension. Because military pensions are indexed for inflation and continue for life, the total value can reach seven figures.

A Brief Overview of Military Retirement Systems

Active-Duty Retirement (20-Year Retirement)

Members who complete 20 years of service qualify for an immediate pension. Under the Blended Retirement System (BRS) which was implemented in 2018, members receive a smaller defined benefit than under the legacy system but gain matching contributions to the Thrift Savings Plan (TSP), which works similar to a 401K plan.

Reserve/Guard Retirement

Reserve Retirement is earned through accumulated “points” for drills, active service, training, and other duties. Retired pay usually starts at age 60, although many reserve members can qualify for earlier receipt.

Disability Retirement

Those medically retired with a DoD disability rating of at least 30% receive an immediate monthly retirement benefit and lifetime access to military health care. Disability retirement is separate and distinct from VA disability benefits.

Understanding the nuances of these systems — and whether the plaintiff likely would have qualified for any of them — is crucial. Understanding how they mesh with VA benefits, is crucial to comprehend.

Examples Illustrating the Importance of Record-Based Review

The Navy Commander and the Unlikely Promotion to Captain (O-6)

One case involved a Navy Commander who asserted she would have been promoted to Captain, significantly increasing her projected pension value. However, her file showed three non-selections — a critical issue in the Navy’s strict up-or-out system. Historical board data confirmed that further promotion was improbable. Once these facts were presented, the opposing expert withdrew their opinion entirely.

The Army Major Missing a Key Educational Requirement

Another plaintiff, an Army Major, claimed he was on track for promotion to Lieutenant Colonel. Although promotion rates at that level can be favorable, a deeper review revealed he had never attended the mandatory professional military education required for promotion. Without that credential, his upward trajectory was far from guaranteed. Incorporating this fact substantially reduced the claimed damages.

A Marine NCO With a Strong, Well-Documented Career

In contrast, a Marine Corps Non-Commissioned Officer medically retired after a vehicle accident had an exemplary record — meritorious promotions, superior performance, and combat deployments. Given her career timing and trajectory, she appeared likely to advance. Nevertheless, we modeled multiple scenarios to reflect varying probabilities of promotion, offering the court a balanced, transparent picture.

These examples illustrate a consistent theme: military personnel files and objective promotion data often tell a more reliable story than assumptions made in the initial damages claim.

Distinguishing the Major Benefit Systems

Confusion often arises between three separate programs: VA disability compensation, military disability retirement, and disability severance pay. Each carries different legal implications and must be treated correctly in damages analysis.

VA Disability Compensation

A tax-free benefit is paid monthly by the Department of Veterans Affairs for service-connected conditions. It does not represent lost earnings and is separate from military retirement.

Military Disability Retirement

A DoD-administered retirement system for members who cannot continue service due to qualifying disabilities. It functions like a pension and includes long-term health care benefits.

Disability Severance Pay

A one-time lump sum given to members separated for medical reasons with a DoD disability rating below 30%. It is not a retirement benefit and may or may not be considered a setoff depending on jurisdiction.

Misunderstanding the interactions among these systems can lead to inaccurate valuations — sometimes significantly inflating damages.

Beyond Pay: Additional Components of Military Compensation

Military earnings include more than salary. When assessing lost earnings, ensure the following are accounted for:

Basic Allowance for Housing (BAH) – monthly housing allowance that varies based on location and rank.
Basic Allowance for Subsistence (BAS) – monthly allowance for food, which varies based on enlisted/officer and rank.
Special and incentive pay (e.g., aviation pay, language incentives, reenlistment bonuses) – these can be a major factor in total remuneration and are frequently overlooked.
Health-care benefits for members and families. Both reserve and active retirements include healthcare benefits and the value of these can be as high as the defined pension benefit.
Post-9/11 GI Bill benefits — including the value of tuition, stipends, and often transferability to dependents. While the GI Bill is not direct income, losing eligibility due to early separation can represent a meaningful loss of future value.

Conclusion

Service members often present compelling narratives and sympathetic plaintiffs, when they allege an injury derailed their military career. But for defense attorneys— especially in a military-heavy state such as North Carolina — these cases demand more than a surface-level evaluation. Every promotion claim, benefit calculation, and assumption about continued service should be tested against objective data: the personnel file, promotion board statistics, DoD regulations, and force-structure realities. When this analysis is performed early and rigorously, the resulting damages assessments are more precise, more credible, and ultimately more fair for all parties involved.

Challenging Inflated Injury Claims with Integrated Expertise

Lynette Pitt — Tue, 18 Nov 2025 20:30:00 GMT

In traumatic injury litigation, defense attorneys face the critical task of challenging inflated damages claims and countering them with credible, defensible evidence. When plaintiffs present demands involving future medical care, work restrictions, and post-injury income loss, you need experienced experts who can expose exaggerated financial projections, questionable medical recommendations, and unsupported assumptions about long-term employability. Left unchecked, these claims can shape a damages narrative that distorts settlement leverage and influences trial outcomes.

Equipping your defense with an integrated team of medical experts, certified life care planners, vocational experts, and economists helps ensure every claim is scrutinized, every assumption is tested, and your client’s bottom line is protected.

Four Experts, One Cohesive Defense Strategy

A coordinated team of medical, life care planning, vocational, and economic experts provides defense counsel with the clarity and consistency needed to dismantle inflated damages claims. Each discipline plays a distinct role, but together they deliver a unified strategy that withstands scrutiny at every stage of litigation.

Medical Expert Witness

Medical professionals form the foundation for rebutting plaintiff personal injury claims. Their evaluations focus on whether proposed treatments and ongoing care recommendations are medically necessary, clinically supported, and consistent with accepted standards of practice. By highlighting gaps, speculative interventions, or unsupported medical opinions, medical experts help defense teams challenge the credibility of inflated care projections.

Certified Life Care Planner

Life care plans can drive some of the largest figures in a plaintiff’s damages claim. A comprehensive review by a certified life care planner can reveal excessive frequency of treatments and rehabilitation services, inflated costs, or recommendations unsupported by medical recommendations. Through life care plan rebuttal reports and expert testimony, they present reliable, clinically grounded projections of future medical needs and associated costs.

Vocational Expert

Plaintiffs may present vocational assessments that overstate work restrictions or underestimate employment opportunities. Vocational experts, or Certified Rehabilitation Counselors, critically analyze pre- and post-injury earning capacity, transferable skills, and labor market conditions to test the validity of these claims. Their findings can demonstrate that employability is higher and wage loss lower than presented in the plaintiff’s report.

Economist

Economists take the findings from life care planners and vocational experts and translate them into financial terms. They calculate the present value of future medical costs, lost wages, and earning capacity, ensuring that every projection is backed by reliable methodology and accurate economic data. Their role provides the defense with a credible, bottom-line assessment of true damages exposure.

A Collaborative Impact

This integrated team of experts ensures clear case insights and effective collaboration. Clients are not required to engage every discipline, but when retained early in the litigation lifecycle, these experts can begin evaluating records and data immediately. This gives defense counsel a strategic edge in identifying gaps, refining rebuttals, and preparing for mediation or trial.

Benefits of Early Engagement

Traumatic injury defense gains a significant advantage when expert analysis begins before discovery or trial. Engaging a coordinated team of experts early in the litigation process allows every claim to be examined with precision, every assumption to be tested, and every rebuttal to be built on clear, consistent evidence.

Strengthen Your Case from the Start

Retaining all four expert types during early case development allows for immediate review of medical records, identification of missing documentation, and strategic planning. Early engagement also prevents opposing counsel from securing these key experts first, locking in your advantage.

Streamlined Communication and Coordination

When all experts are retained through the same consulting firm, communication becomes more efficient and consistent. Case managers coordinate across disciplines to ensure collaboration and timely deliverables.

Cost and Time Efficiency

Retaining experts with dual credentials, such as a medical doctor who is also a certified life care planner, or a certified life care planner who doubles as a vocational expert, can reduce the need for multiple engagements, saving both time and resources.

Securing Integrated Expert Witness Support

Litigation outcomes hinge on the credibility, preparedness, and coordination of your experts. Selecting professionals who understand the jurisdiction, the medicine, and the economics at issue can meaningfully influence how damages are framed and evaluated.

IMS Legal Strategies maintains a nationwide expert network with coverage across all 50 states, allowing defense teams to identify experts who meet local court standards and venue-specific expectations. Their medical expert witness panel has supported tens of thousands of matters, giving counsel access to clinicians who are experienced in both record review and testimony.

In 2024, IMS launched a national Life Care Planning & Rebuttals service line that brings life care planners and vocational experts together within one coordinated team. This structure supports:

Care projections grounded in clinical evidence and medical recommendations
Vocational assessments that evaluate employability, transferable skills, and earning capacity
Expert testimony that is prepared to withstand challenges under Daubert, Robinson, and similar standards

IMS is also expanding its analytics capabilities to better address complex damages claims, particularly those involving layered medical, vocational, and economic issues.

As Kacy Turner, MS, CRC, CVE, CLCP, Lead Life Care Planner and Vocational Expert at IMS, explains, an integrated approach allows each discipline to build on the others’ work:

“Our life care planning and vocational team reviews medical records so I can understand, as the testifying expert, what the injuries are and what type of rehabilitation the individual has undergone. I then rely on the medical experts to provide restrictions and limitations. When it comes time to work with the economist, I share my findings with them, and the economist calculates the damages. For example, if the individual is going to have a yearly wage loss due to injury, the economist will calculate the work-life expectancy.”

Applying Integrated Expertise to Defense Strategy

Defense strategy in serious injury cases benefits from more than isolated expert opinions. A coordinated expert team can evaluate, challenge, and present evidence across each dimension of a plaintiff’s damages claim, including:

Independent medical assessment and recommendations
Life care plan evaluations and rebuttal reports
Defensible vocational assessments and rebuttals
Accurate cost estimates and cost estimate reviews
Economic damage quantification and present value analysis
Expert witness testimony that is aligned across disciplines

From early case development through trial, an integrated expert team can provide the clarity, consistency, and collaboration needed to scrutinize inflated injury claims and protect the client’s interests.

About the Contributor
This article was contributed by IMS Legal Strategies.

For more information about integrated medical, life care planning, vocational, and economic expert services, contact:

Susan deHoll, Senior Account Executive
North Carolina | South Carolina | Georgia

877.919.6846 • 803.748.6767 • sdeholl@imslegal.com

Time Is Money: Smart Billing and Timekeeping for Paralegals

Lynette Pitt — Wed, 29 Oct 2025 20:11:18 GMT

by Sarah White, Senior Litigation Paralegal, Ragsdale Liggett, PLLC

Paralegals sit at the intersection of legal strategy and business management. The accuracy and clarity of their timekeeping directly influence a firm’s financial health. Yet, exceptional work can lose value when billing entries are vague, miscoded, or combine administrative and substantive tasks. The result often is cuts, appeals, and lost revenue.

This article highlights essential principles for effective timekeeping—what constitutes substantive paralegal work, how to draft defensible time entries, how to manage authorization requirements, and why contemporaneous entry remains one of the most effective habits a paralegal can develop.

What Makes Paralegal Work “Substantive” (and Billable)

Start with the baseline: paralegals are qualified professionals performing delegated substantive legal work for which a lawyer is responsible. Substantive work requires recognition, analysis, and communication of relevant facts and legal concepts. That’s the litmus test for billability.

Examples of billable paralegal tasks include: legal research and analysis; drafting and responding to discovery; preparing and revising pleadings and memoranda; reviewing case management and scheduling orders; communications with clients, experts, court staff, and opposing counsel when tied to a concrete legal purpose; summarizing depositions or document productions; assisting with witness prep; and building trial notebooks and exhibit/witness lists (with careful wording—more on that below).

By contrast, purely clerical or secretarial activities are not billable. Think copying, scanning, routine scheduling and docketing, serving documents, and basic filing. Many carriers will accept zero‑time entries for these—so they see the effort without being charged—while some firms push more of this work to legal assistants.

Sometimes, there are large, complex matters requiring paralegals to take on high‑volume document organization that looks administrative but actually demands legal judgment (e.g., indexing pleadings and exhibits in large, multi‑party litigation cases). In those situations, seek prior authorization and be explicit about the legal need: identification, evaluation, and organization to support trial or deposition readiness.

The Words That Save (or Sink) Your Time Entries

Insurers and clients scrutinize narratives closely. Vague or block‑billed entries will get cut; clear, specific, purpose‑driven narratives will (usually) survive. A helpful formula for communication time entries is: What you did + with whom + why. Example: “Telephone all with trial court administrator regarding courtroom technology logistics for upcoming trial.” The formula for drafting is: Whose document + what it is + to whom/for what purpose (e.g., “Defendant’s memorandum in opposition to plaintiff’s motion for summary judgment”).

Avoid vague or red-flag terms such as “preparation”. Instead use “identification,” “evaluation,” or “selection” of exhibits to support a motion or for use at trial. That framing better reflects the analytical nature of the work.

Avoid large, undifferentiated time blocks; if you spent hours on medical records or document productions, break the entry up by provider or production set and include page counts, if necessary; identify parties or providers in multi‑party cases; and separate trial prep into distinct tasks (witness lists, exhibit admission charts, jury instructions, motions in limine, notebook assembly).

Codes, Cheat Sheets, and a Smarter Workflow

Uniform Task-Based Management System (UTBMS) codes exist to make time categorizable for both client budgeting and firm analytics—use them consistently. Many paralegals maintain a one‑page cheat sheet of L/A/E codes, tenth-hour conversions, and carrier-specific rules. Keep these at your fingertips.

A simple but powerful habit, if you do not have case management software, is to create an Excel time‑capture sheet with dropdowns for dates, matter numbers, and codes; enter brief narratives throughout the day; then post into your billing platform before you sign off. This reduces omissions, improves capture, and helps you spot missing entries when you scan your email or notes that evening.

E‑Discovery and Medical Chronologies

In e‑discovery, most work is billable: uploading client data to a review platform, coding for relevance/privilege, and redacting for production—as long as the narrative ties each step to the legal purpose (e.g., “for review and coding prior to production” or “including redaction of confidential information in preparation for production”). For medical chronologies, cite the provider name and page counts. If you batch multiple small sets in one time entry, name each provider and state the total pages reviewed in the block.

Managing Carrier Authorization

Authorization requirements vary and carriers modify them frequently. Common triggers include motion projects exceeding a time threshold (e.g., more than two hours including hearing), multiple‑attorney attendance at depositions, and large‑scale indexing/linking projects in complex matters.

Beyond time entry, Excel can help you track carrier‑rules. You can create templates using the assignment date or prior report dates to auto‑calculate reporting and authorization deadlines and add checkboxes for authorization requested/approved with approver name and date. When you later bill the task, mirror that authorization detail in the narrative (“Authorization approved by Jane Doe, Claim Specialist, 9/10/2025”). Missing that line is a top reason for cuts.

Avoiding Reductions and Strengthening Appeals

Common reasons for time reductions include missing authorization in the narrative for tasks that required it; excessive time without explanation of complexity; lack of documentation for expenses; duplication (two people billing for the same task) without explaining distinct roles; or attorney‑rate tasks lacking justification for why attorney involvement was necessary instead of a paralegal.

When appealing, detail is your best friend. If the work truly demanded attorney or paralegal involvement or exceeded norms for legitimate reasons, say so plainly and concisely and tie it to legal necessity, complexity, or court directives.

Utilization, Realization, and the Case for Contemporaneous Time

Two key metrics reflect billing performance:

Utilization Rate: Billable hours divided by total working hours.
Realization Rate: The percentage of billed time that converts into collected revenue.

The single most powerful way to improve both is contemporaneous time entry. Waiting until month‑end invites the black hole. Delayed recording leads to lost increments that accumulate significantly over time.

For example, if five paralegals each lose two billable hours per month, that’s 110 hours per year across the team. At a $120/hour billing rate, the firm would lose roughly $13,000. Conversely, if each paralegal improves daily capture by 0.5 hours (about a 10% boost over a 5.45‑hour billable target), the firm would yield approximately $72,000 in additional annual revenue—just by tightening time discipline and narratives.

Practical Habits for Immediate Implementation

1. Capture time continuously. Use timers or incremental entries throughout the day and reconcile against emails and calendars daily.

2. Maintain narrative precision. Apply the “What + With Whom + Why” structure and include identifying details.

3. Refine language. Replace “preparation” with analytical terms such as “evaluation” or “selection.”

4. Segment complex tasks. Record distinct components separately for clarity.

5. Track authorizations. Record and mirror approval details in narratives.

6. Use zero-time entries. Documents administrative support in a transparent manner reflecting work being performed but not paid.

7. Support appeals with detail. Cite complexity, volume, authorization, or court requirements.

In summary, effective billing and timekeeping require more than accuracy—they reflect professionalism, communication, and the value the legal team brings to every case. Precision in narrative, consistency in coding, and discipline in real-time entry transform daily tasks into measurable contributions to the firm’s success.

Download: Time & Billing Cheat Sheet

This article is adapted from the 2024 Fall Seminar Paralegal Practice Group Breakout Session.

Liability in the Moonlight?

Lynette Pitt — Wed, 24 Sep 2025 16:08:41 GMT

Joint Employment and Workers’ Compensation in North Carolina

by Richard Haywood, McAngus Goudelock & Courie, LLC
An NCADA Workers' Compensation Practice Group Article

The issue of joint employment and the lent employee doctrine under North Carolina Workers’ Compensation law is now before the North Carolina Supreme Court. The Court’s decision could have significant implications for both public employers and private contractors who regularly engage the services of off-duty law enforcement personnel.

In Lassiter v. Robeson County Sheriff’s Department, an increasingly common employment scenario is presented. It is a familiar scene: a law enforcement officer directing traffic after a local concert or sporting event, or an off-duty officer providing security outside a downtown bar. In some of these scenarios, off-duty law enforcement officers are working for private businesses. The legal question arises: who is liable when an off-duty officer is injured while performing these duties?

In Lassiter, a large-scale roadwork project required law enforcement officers to direct traffic and ensure safety. The North Carolina Department of Transportation (“NCDOT”) contracted with Truesdell Corporation to perform bridge preservation work on Interstate 95, covering portions of both Cumberland and Robeson Counties. As part of the project, Truesdell was required to retain law enforcement personnel with activated blue lights to manage traffic in accordance with a formal traffic control plan. The plaintiff, a deputy with the Robeson County Sheriff’s Office (“RCSO”), was given the opportunity to work on the project through his department.

While performing traffic control duties, the plaintiff was struck by a vehicle and sustained severe injuries to his head, arms, hands, and legs. He filed a Form 18 with the North Carolina Industrial Commission, alleging that both RCSO and Truesdell were his employers at the time of the injury. Both entities denied the existence of an employment relationship.

The case was initially heard by Deputy Commissioner Peaslee, who issued an Opinion and Award finding that the plaintiff was an employee of RCSO at the time of injury, and that no employment relationship existed between the plaintiff and Truesdell. Truesdell was dismissed from the case.

On appeal, the Full Commission affirmed the Deputy Commissioner’s findings. RCSO then appealed to the North Carolina Court of Appeals.

The Court of Appeals addressed two principal issues: (1) whether the plaintiff was an employee or an independent contractor, and (2) whether a joint employment or lent employee relationship existed between the plaintiff and Truesdell.

The threshold question in such cases is whether a valid employer-employee relationship existed at the time of the injury. The court applied the factors established in Hayes v. Board of Trustees, 224 N.C. 11, 29 S.E.2d 137 (1944), which were later assessed, in a similar context, by the North Carolina Supreme Court in State v. Gaines, 332 N.C. 461, 421 S.E.2d 569 (1992). In Gaines, the Court held that police officers retain their law enforcement status at all times—regardless of whether they are “on duty” or “off duty”—when performing duties to enforce the law or protect the public. Id. at 466, 421 S.E.2d at 571.

Applying the Hayes factors, the Court of Appeals found that the plaintiff was hired specifically because of his status as a sworn officer and used his training and experience in law enforcement to manage traffic. The court determined that the plaintiff was not an independent contractor but was acting as an employee of RCSO at the time of the injury.

The Court then turned to the question of whether a joint employment or lent employee relationship existed between the plaintiff and Truesdell. In Whicker v. Compass Group USA, Inc., 246 N.C. App. 791, 784 S.E.2d 564 (2016), the Court of Appeals set forth a three-part test for determining joint employment:

1. An express or implied employment contract must exist between the plaintiff and the alleged employer;

2. The employers must be engaged in the same or similar business; and

3. Both employers must exercise control over the manner and method of the plaintiff’s work.

Id. at 797, 784 S.E.2d at 569.

In Lassiter, the Court of Appeals found that an implied employment contract existed between the plaintiff and Truesdell. Although RCSO retained direct supervisory control, Truesdell had the authority to request, schedule, and directly pay law enforcement officers—satisfying the first prong of the Whicker test.

Regarding the third prong—control—the court found that both RCSO and Truesdell exercised simultaneous supervision. While on-site supervision came from RCSO superior officers, Truesdell retained functional control through its authority to determine the number of officers needed, to develop traffic control plans, and to relay those plans to supervisors. This control was sufficient to meet the third prong of Whicker.

However, the court departed from existing precedent on the second prong. The Full Commission had determined that the plaintiff was engaged in law enforcement duties, not construction work, and therefore RCSO and Truesdell were not “engaged in the same or similar business.” Lassiter, 896 S.E.2d at 294. The Court of Appeals rejected this narrow reading, modifying the second prong to require only that “the service being performed by the plaintiff for each employer must be the same or closely related.” Lassiter, 896 S.E.2d at 303 04. The court reasoned that although the plaintiff’s work was law enforcement in nature, it was undertaken in direct support of Truesdell’s construction project, making the services between RCSO and Truesdell “closely related.” Lassiter, 896 S.E.2d at 304.

As a result, the Court of Appeals concluded that a joint employment relationship did exist and reversed the Full Commission’s Opinion and Award.

The North Carolina Supreme Court will now weigh in on these significant issues. The ruling could reshape how joint employment is defined in the state—particularly as it applies to off-duty law enforcement officers performing functions for private entities.

If the Supreme Court affirms the Court of Appeals’ modified test, it would significantly expand the scope of joint employment. The precedent in Whicker requires: (1) an express or implied contract; (2) that the employers be engaged in the same or similar work; and (3) shared control over the employee’s duties. A broader reading of the “similar work” requirement would expose private companies to increased liability for injuries suffered by off-duty law enforcement officers operating in quasi-public roles.

How Can Biomechanical Engineering Assist in Workers’ Compensation Cases?

Lynette Pitt — Tue, 23 Sep 2025 15:57:50 GMT

by Michael Hill, Ph.D., P.E. | Biomechanics

Biomechanical engineers investigate a wide variety of cases involving injuries and injury claims, including workplace accidents, falling objects, product failures, slip, trip, and falls, in addition to motor vehicle accidents. Whereas civil engineers, industrial and safety experts, premises liability experts, and accident reconstructionists perform inspections to check for compliance with various codes and may investigate the physics of an incident and what may have gone wrong to cause it, biomechanical engineers analyze how the motions and forces involved in an incident resulted in damage to specific body parts.

Biomechanical Engineering Defined

Biomechanical engineering is a part of a larger field of study known as biomedical engineering, which combines the study of living organisms and medicine with the branch of science concerned with devising and creating machines. Biomechanics deals specifically with mechanics, which involves the motions and forces of the machinery. Biomechanical engineers study the mechanical workings of the human body, just as mechanical engineers study the mechanical workings of materials used in designing automobiles, airplanes, assembly lines, etc.

Biomechanics in Industrial Settings

There are a variety of situations at the workplace that result in injuries, which may be reported. These may involve potential trip hazards, interacting with different types of machinery, performing routine tasks, or accidents involving motorized vehicles such as automobiles, forklifts, yard mules, etc. Below are descriptions of a few case studies based on real-world accidents in which a biomechanical engineer was able to assist.

Forklift and Trailer Pinch Point

An employee at a warehouse was nearing the end of his early-morning shift. After a trailer had been unloaded at the dock, the employee was tasked with closing the trailer door. The employee was not able to reach a strap to close the door, so he used a forklift to assist. He reversed the forklift down a ramp to the trailer door, reached up and out of the forklift to grab the strap, moved the forklift forward up the ramp, and then stepped off the forklift to close the door. As he was lowering the trailer door to close it, the forklift moved back down the ramp and pinned the employee against the door. A security camera recorded the incident.

A forensic biomechanical engineer was retained to investigate the case. As part of the investigation, the engineer inspected and 3D-scanned the forklift, the strap, and the site where the incident occurred. By applying the peer-reviewed literature on human size and reach, the biomechanical engineer worked with animators to reconstruct the incident, showing how the employee moved based on his size, the geometry of the site, and on the surveillance footage. The conclusion was that the employee exited the forklift while it was still in motion, resulting in the accident.

Falling Object on a Hard Hat

At an industrial site, an employee was working on a level below another employee, when the former dropped his hard hat onto the hard hat of the latter standing below. A forensic biomechanical engineer was retained and performed testing and literature research to determine the forces and head accelerations that were involved. The engineer concluded that the components of the hard hat, including the suspension and hard outer shell, served their purpose in reducing the head accelerations compared to a no-hard-hat scenario. The biomechanical engineer opined that the resulting accelerations would not be consistent with the reported brain injuries.

Operating a Lift on an Asphalt Surface

A city parks service employee was driving a telescopic forklift along a city-maintained asphalt road between sites. The employee reported that he sustained spinal injuries due to the vibrations induced while driving over rough portions of the road. The forklift and a driver were instrumented with accelerometers and high-speed video cameras, and the forklift was driven along the reported route. Also, the driver’s head and upper torso were recorded by standard and high-speed video equipment from a vehicle following behind. The accelerations were determined to be well within those experienced during typical driving situations. The head and upper body movement were very minimal and definitely within the movements expected during routine activities of daily living. The biomechanical engineer concluded that biomechanical mechanisms for spinal injuries were not present during the reported incident.

Trip and Fall in a Parking Lot

In the parking lot of a chain grocery store in a busy city center, a customer tripped and fell as she exited the grocery store and walked across the parking lot. The customer claimed that the grocery store had poorly maintained the parking lot and that it presented an unreasonably dangerous condition. Low-resolution surveillance video of the accident depicted the trip and fall, but it was not clear precisely in which area the fall occurred. The site was inspected, and a higher-resolution video camera was elevated on a boom to be adjacent to the subject surveillance camera. The high-resolution footage of people walking to and from the parking lot and grocery store was compared to the low-resolution video from the subject surveillance camera to determine the precise location of the fall. It was determined that a car was turning into the parking lot, so the plaintiff increased her speed and fell into an area in which there were no parking stops or potential tripping hazards. A biomechanical engineer concluded that there were no exceptionally dangerous tripping hazards in the area.

Summary

Biomechanical engineers play a crucial role in a range of impactful tasks, including conducting sophisticated forensic analyses for personal injury litigation and pioneering the design of biomedical devices and methodologies that address injuries and diseases. By meticulously examining accident scenarios, forensic biomechanical engineers can identify critical hazards and evaluate whether the reported injuries are consistent with, or logically arise from, the mechanics of the incident. Their work not only enhances our understanding of accidents but also significantly contributes to the advancement of safety standards and injury prevention strategies.

__________________________

Michael Hill, Ph.D., P.E., is a Biomechanical Engineer at Quality Forensic Engineering, LLC. His background is in orthopedic and cardiovascular biomechanics, vehicle accident reconstruction, injury consistency analysis, mechanical design, instrumentation, and experimental analysis. Dr. Hill has lectured at universities and his research findings have been published in 17 academic articles. Dr. Hill has presented at over 40 international and national scientific conferences and his work has been extensively cited by others. His primary focus is on motor vehicle accidents and premises liability incidents, for both plaintiff and defense cases.

Utilizing Human Factors Analyses In Personal Injury Litigation

Lynette Pitt — Wed, 27 Aug 2025 15:00:00 GMT

by Leah S. Hartman, Ph.D., CPO, CXLT, and Stephanie Whetsel Borzendowski, Ph.D., CPSI, CXLT

Introduction

Human Factors is the scientific study of human interaction with their environment, based on the scientific understanding of human capabilities and limitations (e.g., cognition, perception, biomechanics, etc.). A human factors expert should provide an objective analysis of relevant facts and offer insight into human behavior under specific circumstances. While the explanation of these principles may appear familiar to even a layperson due to their personal experiences in similar contexts, they can fail to fully appreciate the complexity of how the environment affects human behavior. Human factors practitioners can examine aspects of the environment and the human independently, and they are uniquely qualified to analyze the interaction between the two.

While practitioners in other disciplines (e.g., engineers, architects, medical practitioners, etc.) can address one of the elements in the human-environment relationship, they typically do not possess expertise (i.e., educational background or training) in the interaction between the two. Therefore, human factors experts can provide attorneys, judges, and/or juries with a framework for understanding an event or incident by relying upon their education, training, and familiarity with the significant body of literature, standards, and regulations within this field.

Civil litigation is ripe with opportunities for the utilization of human factors analyses to further comprehend simple or complex cases. Exemplar areas in which human factors professionals often provide valuable insight include (but are not limited to): falls, collisions, workplace injuries, warnings, drownings, etc. A human factors analysis may be of use in personal injury litigation when there are questions regarding the relative contributions of environmental factors and human characteristics, and the interaction between the two. The following are examples of contexts in which this type of analysis can enrich the comprehension of case facts.

Premises liability

A trip is characterized by a foot unintentionally coming into contact with the ground and/or an obstacle which arrests the forward movement of the foot. In this biomechanical incident, there is typically a rotation of the body in the direction of travel. If the acceleration of the body cannot be arrested, a fall will likely result. Environmental factors typically considered in the analysis of a trip and fall can include geometric proportions of changes in level along walking surfaces and/or the placement of obstacles (permanent or temporary).

A fall that is attributed to a slip occurs when a foot unintentionally slides across a surface, which can result in a loss of balance. Bilateral slips are when both feet are affected. Typically, this results in a feet-forward slip and fall with the trunk of the body falling backwards and landing posteriorly. Unilateral slips occur when the leading foot slides forward as the back foot remains planted. This results in the legs splitting, but the trunk of the body typically will stay upright or in a more forward position than that of a bilateral feet-forward slip and fall. Environmental factors to be considered are the coefficient of friction of the floor surface, contaminants on the surface, presence of warnings and/or mats, etc.

Another example of a fall on properties can include missteps (e.g., at a single riser change in elevation, stairs, etc.). Commonly considered environmental factors include the presence of handrails, warnings, conspicuous markings on nosings, etc.

While each type of fall has unique considerations from the perspective of environmental features, the human aspects of these incidents share commonalities. These include gait pattern, clothing (e.g., footwear), physical health, expectations, etc. Examination of the human-environment interaction in the context of slips, trips, and falls will include whether features of the walking surface and/or obstacle(s) are readily perceivable and avoidable to a reasonably attentive pedestrian within the context of the general incident area.

A common element in assessing the perceivability of a walkway hazard is available lighting at the time of the incident. The presence of artificial illumination along walking surfaces is particularly important to consider when little to no ambient illumination is present. While people often mistakenly believe they can safely navigate darkened environments, visual processing of objects and fine details are degraded under these conditions. Therefore, illuminance measurements under conditions comparable to an incident can be a key element in the analysis of a fall.

Transportation

While analyses of traffic crashes often include engineers specializing in accident reconstruction, human factors professionals can offer additional, unique insights into the perception and response of typical drivers. Specifically, a human factors expert can apply their expertise regarding human capabilities and limitations (i.e., perception and cognition) to assess the “reasonableness” of a driver’s response to a hazard.

In assessing a driver’s response to a hazard, it is important to distinguish between the visibility and conspicuity of objects. Visibility describes a driver’s ability to detect an object when they are aware of its location. Conspicuity refers to properties of an object in the context of its environmental surroundings, such that the object can capture the attention of a driver whose attention may be directed elsewhere. Addressing the adequacy of an object’s conspicuity is often a factor in collisions involving pedestrians, bicyclists, commercial vehicles, and objects in/along the roadway.

Environmental factors to consider in assessing the conspicuity of a hazard, and whether it is perceivable, can include ambient lighting, properties of the hazard (e.g., color, presence of retroreflective elements, luminance), surrounding landscape, etc. Drivers’ expectations under the conditions and circumstances of a collision are often an essential consideration in analyzing their interpretation of available visual information. Additional driver characteristics to consider include attention/distraction, impairment, visual health, etc. Conducting a human factors analysis to determine the conspicuity and perceivability of a hazard can allow attorneys, judges, and/or juries to better understand the likelihood that a collision could have been avoided.

A common question to evaluate the likelihood of a collision occurring is whether a driver should have perceived and responded to some hazard with enough time to avoid impact. The perception response time (PRT) interval typically starts when a potential risk is first detectable, (i.e., something appearing to move towards or into the driver’s path) and ends when the driver initiates a response. In order to analyze data related to a driver’s response to a hazard, it is important to consider the context in which the incident occurred. Therefore, reliance on a single PRT value without consideration for any factors that may affect a driver’s perception and performance is inappropriate and oversimplifies the complexity of driving. A human factors expert relies upon applicable literature and research to provide a framework to understand a driver’s response (or lack thereof).

Conclusion

While other experts can offer insight into specific issues related to the environment or human for matters in civil litigation, a human factors professional can address the complexity of the interaction between the two as well as their individual contributions.

At Perceptio Forensics, we provide human factors consulting services in a variety of practice areas, aiming to provide our clients with objective, evidence-based insight into their cases. Interested in learning more about human factors and its applications? Feel free to reach out to either Dr. Hartman or Dr. Whetsel Borzendowski.

Best Practices & Top Tips from the Bench: Insights from North Carolina Judges

Lynette Pitt — Thu, 31 Jul 2025 17:58:34 GMT

Drawing from a rich and candid conversation among three distinguished North Carolina judges—the Honorable Robert Christopher Dillon (Chief Judge of the Court of Appeals), the Honorable Matthew Houston (Special Superior Court Judge for Complex Business Court Cases), and the Honorable Aaron Berlin (Superior Court Judge)—this article distills practical wisdom for attorneys seeking to elevate their courtroom presence and advocacy.

1. Preparation Is Power

Judges can instantly tell who’s prepared and who isn’t.
Thorough preparation builds credibility and confidence.
Readiness includes knowing your case inside and out, anticipating questions, and organizing materials for easy reference.

2. Know Your Audience: The Judge

Judges may not know your case as well as you do—start with a clear, concise summary of the issue before the court.
Avoid diving straight into legal minutiae; provide context first.
Tailor your presentation to the judge’s role (e.g., trial vs. appellate) and preferences.

3. Briefs Matter—Make Them Count

Be concise and focused. Avoid unnecessary facts or overly long narratives.
Highlight the key issue early in the brief, and lead with your strongest argument for why the court should rule in your favor.
Use the brief to build your story but keep oral arguments sharp and issue-driven.

4. Credibility Over Combat

Concede strong points from the opposing side when appropriate—it builds trust.
Avoid unnecessary adversarial behavior or name-calling.
Have professionalism and reasonableness in tone and demeanor, judges appreciate and expect this behavior.

5. Courtroom Comfort Comes with Experience

Seek out opportunities to be in court—jury trials, hearings, calendar calls.
Don’t underestimate the value of “reps” in building courtroom confidence.
Surround yourself with mentors and colleagues who challenge and support you.

6. Use Technology Wisely

Webex and remote testimony can be cost-effective but require preparation.
Always test tech setups before court appearances.
Maintain courtroom decorum—even virtually. Remind clients to present themselves professionally.

7. Understand Local Rules & Procedures

Know that each county and court may have different filing, briefing, and scheduling rules.
Build relationships with TCAs (Trial Court Administrators)—they’re invaluable resources.
Familiarize yourself with the Business Court rules if applicable.

8. Preserve Issues for Appeal Thoughtfully

Know your standard of review and tailor your arguments accordingly.
Frame appellate issues clearly and avoid overloading briefs with irrelevant facts.
Make it easy for appellate judges to rule in your favor—clarity and structure are key.

9. Be the Lawyer Others Want to Work With

Litigation is inherently adversarial—don’t make it personal.
Professionalism and courtesy go a long way in building reputation and resolving cases efficiently.
Judges notice and appreciate attorneys who foster a respectful courtroom environment.

10. Take Advantage of Training Opportunities

Participate in pro bono programs that offer oral argument experience.
Watch oral arguments online to learn from others.
Seek feedback and mentorship to continuously improve.

*This article is based on a panel discussion moderated by Jasmine Pitt of Akerman, featuring Chief Judge Dillon, Judge Berlin, and Judge Houston, held during the 48th Annual Meeting on Saturday, June 14, 2025, in Wilmington, NC.

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Does That Life Care Plan’s Medical Foundation Hold Up Under Scrutiny?

Lynette Pitt — Wed, 23 Jul 2025 14:30:00 GMT

by Betsy Keesler, BSN, RN, CLCP

A soundly constructed life care plan is an evidence-based document that comprehensively identifies an individual's current and future care needs as related to a catastrophic injury or chronic health condition. Such needs may include a person's individual requirements for healthcare, educational/vocational services, home modifications, living arrangements, attendant care, equipment, medications, supplies and community services. Many, if not all, of these items require recommendations from a healthcare professional acting within their professional scope of practice. When a life care plan lacks appropriate medical foundation and is determined to be incongruent with accepted life care planning published standards and consensus statements, it will likely be challenged and ultimately may not be accepted into the evidentiary record for the evaluee (subject person).

There are several appropriate avenues a Certified Life Care Planner (CLCP) can utilize to establish solid medical foundation for the life care plan. The most obvious track is direct consultation and collaboration with the evaluee’s treating and/or evaluating medical, psychological, or allied health professionals. Of note, it is essential such consultations be endorsed by the opining healthcare provider through signature, prior to the date of release of the life care plan report. Another appropriate avenue would include directly referencing and utilizing published clinical practice guidelines, empirical research and/or other reliable and credible peer-reviewed publications to identify the standards of care for items applicable to the evaluee’s needs. Equally important, the life care plan should draw clear links between specific statements made within the analyzed medical records and the items or services included within the life care plan. Finally, cited testimony from evaluating and/or treating providers connected with the evaluee’s health care can also serve as appropriate medical foundation.

It is important to understand the subspecialty practice of Life Care Planning has many published consensus and majority statements, relative to the developmental process of establishing solid medical foundation. In 2018, the International Association of Rehabilitation Professionals (IARP), in conjunction with the International Academy of Life Care Planners (IALCP), published a special issue of the peer-reviewed Journal of Life Care Planning which identified current consensus and majority statements for life care planning professionals. These consensus and majority statements were published following completion of a Delphi study of multiple, professional summits across a 17-year period. Of note, the purpose of the Delphi research method is to identify best practice consensus among subject matter experts.

Relative to establishing medical foundation for the life care plan, specific consensus statements address this matter head on.

Life care planning consensus statement 80: “Life Care Planners may independently make recommendations for care items/services that are within their scope of practice.”

Life care planning consensus statement 81: “Life Care Planners seek recommendations from other qualified professionals and/or relevant sources for inclusion of care items/services outside the individual life care planner’s professional scope of practice.”

From the cumulative pool of expert opinions arose the Life Care Planning Standards of Practice, as published by IARP and IALCP, currently in the Fourth Edition, 2022. Standards of practice also address the critical component of evidence-based medical opinion from a healthcare provider that practices/provides the same recommendations they have opined about in the life care plan. In other words, their opinion falls within their healthcare professional scope of practice. The Fourth Edition Standards of Practice provide this guide regarding appropriate medical foundation:

“To address the future care needs, the life care planner collaborates with other professionals in order to develop a transdisciplinary life care plan inclusive of recommendations outside of the individual life care planner’s professional scope of practice. No single rehabilitation or health care professional is trained to have comprehensive expertise in all areas where recommendations may be needed. Even within a profession, there are specialty and sub-specialty divisions, which may limit the life care planner’s ability to independently make all needed recommendations.”

Why do professional guidelines and standards even matter? This question was expertly answered through a 2012 IARP publication entitled “Expert Disclosure: Federal Rules of Civil Procedure 26, 34, & 37.” Dr. Timothy Field and Mr. Kent Jayne emphasized the following to the Rehabilitation and Life Care Planning Professionals as follows:

“The necessary qualifications for the FRC (forensic rehabilitation consultant) have been well established and documented and any forensic rehabilitation consultant should be familiar and comply with the usual and customary guidelines set forth by professional associations for the profession. Association standards, such as statements on scope of practice, professional ethics, and a standard of practice are all important documents and provide significant information of both the necessary credentials and the guidelines for practice.”

In short, the consensus statements and standards of practice are what give vigor and credibility to the life care planning practice.

The following realistic case scenarios illustrate both appropriate and inappropriate practices for the establishment of life care planning medical foundation.

Case #1: An adult evaluee was involved in a head-on motor vehicle collision and sustained a traumatic brain injury (TBI) as well as cervical vertebrae fracture. Fortunately, the evaluee was not paralyzed but was with permanent cognitive functioning deficits and ongoing neck pain and headaches. The evaluee underwent outpatient therapy with a speech language pathologist, an occupational therapist, and a Physiatrist (Physical Medicine and Rehabilitation Physician) who oversaw all medical care relative to the injury, as well as pain management modalities. A life care plan was developed by Certified Life Care Planner who also held a Doctor of Chiropractic (DC) licensure. The life care plan included many items, some of which were ongoing spinal injections for cervical pain management and narcotic medication for headaches, all for the duration of a lifetime. During deposition testimony, the doctor expounded upon his education and clinical practice as foundation to justify his ability to opine every future care recommendation within the life care plan.

To analyze this scenario, it is important to understand that not all doctors can provide all interventions that any ill or injured person may need. Some people do not understand this. The Chiropractic field of healthcare, while incredibly helpful for many people, does not perform spinal injections for pain management, nor do they prescribe narcotic medications. Thus, the life care planner was working outside his scope of practice in recommending spinal injections and narcotic medications. Unfortunately, he did not consult with the treating Physiatrist, or the allied health professionals providing current treatment. There was no evidence that an appropriate evaluating healthcare practitioner, such as a Neurologist or Interventional Pain Management Specialist, was retained to provide future treatment recommendations. There was no evidence of connection drawn between the current treatment found outlined in the medical records and what the life care planner recommended. There were no supporting clinical practice guidelines relative to the recommendations made. Ultimately, the life care plan lacked the required credible and reliable data, as well as the overall foundational information necessary, to formulate an evidence-based plan that was consistent with life care planning standards and expert consensus.

Case #2: An evaluee, with a 30-year history of smoking a pack of cigarettes a day, was rear-ended in a motor vehicle collision. Several days afterwards she began complaining of neck pain with radiating pain down her left arm. The first physician she sought treatment from advised rest, Tylenol and physical therapy. Medical reporting outlined she completed only 8 sessions of physical therapy and stated there was no improvement in her symptoms. She sought a second opinion from a Spinal Orthopedist who opined she had failed conservative therapy and therefore was eligible for a four-level spinal fusion surgery. Then, she sought another Orthopedist opinion (third one) who ordered additional MRI studies and a nerve conduction study. He diagnosed her with ulnar nerve compression and mild herniation at the C6-7 level. He then recommended only conservative therapy and did not agree with spinal fusion. Finally, the fourth Orthopedic opinion she sought indicated that she needed Ulnar Nerve decompression surgery, which she completed. Then, the fourth Orthopedist treated her with a cervical spinal steroid injection, which she reported gave total relief of all her pain. Additionally, this same Orthopedist reported clinical research strongly suggested the evaluee’s extensive smoking history predisposed her to significant surgical complications, including a lack of union at the surgical site, if she were to undergo spinal fusion.

However, the life care plan was developed by a Registered Nurse (RN) and CLCP. She provided a future cost analysis for only the four-level spinal fusion surgery treatment opinion. The life care planner did not acknowledge any other medical opinions or successful treatment the plaintiff had received as was documented within the medical records, nor did she acknowledge the clinical practice research citing smoking as detrimental to the success of spinal fusion. The life care planner acted outside her scope of practice by determining that the surgical opinion was the only opinion appropriate for the evaluee. An RN is not an operative practitioner and therefore not in a position to make any surgical decisions. Clearly, she did not consider all the evidence available to make a solid and credible life care plan for the evaluee.

Case #3: An adult evaluee sustained an upper extremity amputation secondary to malfunctioning equipment while working as a machinist. The life care plan was developed by an experienced and licensed certified rehabilitation counselor (CRC) who was also a certified life care planner (CLCP). The evaluee’s treating health care providers included a Physiatrist, a physical therapist, a psychologist, and a prosthetist. The life care plan included recommendations for the specific type, frequency and duration of future psychological counseling, medical care, medications, diagnostic tests, and prosthetic equipment for the evaluation.

The CRC/CLCP did not make any recommendations outside of his scope of practice. The life care planner noted the medical records reviewed and included a treatment summary within the life care plan as well as recommendations for future care that were secured in collaboration with the treating providers and signed by them, prior to the release of the life care plan report. The recommendations included in the plan were all evident through the medical records, supporting clinical practice guidelines and endorsements.

Sometimes securing the appropriate credible medical recommendation takes extra leg work, but in the end, it is the foundation for which that life care plan will hold up under close scrutiny.

References:

Field, T. & Jayne, K. 2012. Expert Disclosure: Federal Rules of Civil Procedure 26, 34, 27. Athens, Georgia: Elliott & Fitzpatrick, Inc.

International Association of Rehabilitation Professional & International Academy of Life Care Planners (2022), Fourth Edition. Standards of Practice for Life Care Planners.

Johnson, C; Pomeranz, J. & Stetten, N. 2018. “Life Care Planning Consensus and Majority Statements 2000-2008: Are They Still Relevant and Reliable? A Delphi Study.” Journal of Life Care Planning, 16 (4), 5-13.

Johnson, C; Pomeranz, J. & Stetten, N. 2018. “Consensus and Majority Statements Derived from Life Care Planning Summits Held in 2000, 2002, 2004, 2006, 2008, 2010, 2012, 2015 and 2017 and updated via Delphi Study in 2018.” Journal of Life Care Planning, 16 (4), 15-18.

Preston, Karen, et al. “Standards of Practice for Life Care Planners, Fourth Edition.” Journal of Life Care Planning, 20 (3), 5-24.

Weed R. & Berens D.E., (editors). 2018. Life Care Planning and Case Management Handbook. (4th ed.). New York, NY: Routledge.

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Highlights from the Annual Meeting Program

Lynette Pitt — Fri, 27 Jun 2025 13:00:00 GMT

Embracing Opportunities Amid Legal Challenges: Highlights from the Annual Meeting Program

This year's Annual Meeting provided members with enriching networking opportunities and impactful continuing legal education sessions. Guests included representatives from our state’s judiciary, law schools, and other bar organizations, adding depth and diversity to informal discussions.

Highlights from the programming included sessions such as 'Recent Decisions of Relevance,' a key practice resource for members, and a panel discussion on 'Navigating the Legal Impacts of the New DEI Executive Orders.' Attendees gained perspectives from a 'View from the Bench' session featuring judges from the Court of Appeals, Business Court, and Superior Court, a keynote address on maintaining professional well-being by Molly Grantham on 'Practice Makes...Progress,' and an ethics discussion centered on lessons from the Murdaugh Case, featuring Judge Clifton Newman. Additionally, breakout sessions led by the Practice Groups provided interactive discussions tailored to specific practice areas of interest.

During the Annual Meeting, the annual membership and business meeting was held, alongside the recognition of professionalism award winners. Bob Sumner, Partner Emeritus of Cranfill Sumner, was honored with the J. Robert Elster Award for Professional Excellence, and Jon Berkelhammer of Ellis & Winters received the Award for Excellence in Trial Advocacy.

At the Business Meeting, outgoing President J.D. Keister reflected on the year’s initiatives and outlined critical areas of focus for the NCADA, including trial skills training programs leveraging experienced trial attorneys, strategies to address nuclear verdicts through a specialized sub-committee, and the adoption of an updated diversity, equity, and inclusion policy. Keister thanked his colleagues for their support during his presidency and commended the Board for their thoughtful handling of these initiatives. (Watch and listen to JD's remarks here.)

The meeting concluded with the election and confirmation of the 2025-2026 Officers and Directors. George Simpson, IV was confirmed as President; Erin McNeil Young was elected President-Elect; Daniel M. Nunn as Executive Vice President; Scottie Forbes Lee as Treasurer; and Nicole B. Slaughter continues her term as Secretary.

The NCADA also welcomed several new members to the Board of Directors for a term through June 2028: Allison Becker, Bruce Daughtry, John Kubis, Jr., John Nunnally, and Jilliann Tate. Continuing Board members were recognized for their ongoing service and contributions: Kara Bordman, Ryan Bostic, Christy Dunn, Joshua Durham, JD McAlister, Kristine Prati, Stuart Stroud, and Robert Young remain integral to the organization's leadership. Ex-officio members including Gary Parsons, Bob Kaylor, Ashley Brathwaite, Ryan Eubanks, and Nathan Hewitt were also acknowledged for their work across key initiatives.

Heartfelt thanks was extended to retiring Board members after their service terms: Denaa Griffin, Scottie Forbes Lee (transitioning into the Treasurer role), Charles McGee, Jasmine Pitt, and Austin Walsh. Chris Kiger completed his term as an officer and is a past president of the NCADA. Each member was thanked for their dedication and contributions to the organization.

Wrapping up the event, incoming President George Simpson shared reflections on his professional journey, stemming from his early career at Cranfill Sumner, where he was encouraged to engage with NCADA by Richard Boyette. Simpson committed to honoring the organization’s legacy and emphasized priorities such as networking, CLE opportunities, amicus work, and legislative efforts. As he steps into leadership, Simpson pledged to build on NCADA's foundation and advance the organization’s mission for the civil trial bar in North Carolina. (Watch and listen to George's remarks here.)

President's Message: Year in Review

Lynette Pitt — Tue, 27 May 2025 01:42:38 GMT

J.D. Keister, President (2024-2025)
McAngus Goudelock & Courie LLC

I hope to see you at our upcoming Annual Meeting in just a few weeks. We’re looking forward to hosting the meeting in Wilmington again. With unmatched professional development programming tailored to build skills and meet your practice needs, you will not want to miss attending. Join us June 12-15 to learn and network with peers and colleagues from across North Carolina.

The Annual Meeting is also when the NCADA transitions to new leadership. As I shared in my note when taking office last June, I attended my first Annual Meeting over 20 years ago and was encouraged by firm mentors to get involved in the NCADA. In an era where retention and young lawyer development is such a challenge for our member firms, NCADA is an excellent opportunity for firms to invest in younger lawyers in a similar fashion. I encourage younger members to attend, participate, and get involved! There is not a better way to learn or get connected within the civil defense bar. Go to member socials and events. Write articles. Be on a committee.

Major challenges impacting our firms and practices include generative AI into the practice of law, exploding verdicts, and the training and retention of talent. NCADA is working on programming and resources to support members and firms in these areas to include training newer and mid-level attorneys in essential and advanced litigation skills, information resources on AI and programming at our CLE offerings, and appointing a committee to explore strategies and training for defense attorneys on nuclear verdicts. You are invited to share your knowledge and expertise to volunteer to be involved. Contact me if interested.

Your Association is recognized statewide and nationally with working relationships with the NC Chamber, DRI, the DRI Center for Public Policy and Lawyers for Civil Justice working collaboratively on a tweak to Rule 702 at the General Assembly to align with the federal rule. Our Amicus presence continues to grow, and we are fortunate to have an Amicus Committee led by Duane Jones, Steven Bader, and Jeff Kuykendal vetting cases of relevance.

The state of the Association remains steady and stable. Our membership numbers are consistent, yet we encourage you to invite colleagues and peers to join us. We are fortunate to have strong support from our Litigation Support Partners, and we encourage you to take advantage of their expertise and services.

Many in Western North Carolina are still dealing with the impact from Hurricane Helene last September. We applaud the many contributions of our members and firms in supporting recovery efforts. That same day we held our annual Fall Seminar in Cary and despite the storm had good attendance and an excellent CLE program. This year, we have scheduled the Fall Seminar a few weeks later in October and will consider moving to late October to early November, which was the timing in our early years.

Finally, speaking of our early years, NCADA’s 50th Anniversary is in 2 years and will be celebrating this milestone in 2027. Today’s NCADA is THE organization for those of us on the defense side of the “V.” It is an organization where people can connect, where members can learn, and where knowledge can be passed from trial and industry legends to the next generation. What does the next 50 years look like to you? Let us know.

Hidden Fees - The NC Second Injury Fund

Lynette Pitt — Wed, 21 May 2025 21:00:00 GMT

by Michael Hedgepeth, Hedrick Gardner KIncheloe & Garofalo

No one likes hidden fees – especially when they show up after you thought a claim was fully resolved. Unfortunately, that’s exactly what can happen under North Carolina’s Second Injury Fund statute.

Under N.C. Gen. Stat. § 97-40.1, the North Carolina Industrial Commission has the authority to assess a fee to be paid by Defendants (employers, carriers, and TPAs) whenever an employee is assigned a permanent partial disability (“PPD”) rating. This fee may be assessed regardless of whether the claim is resolved through an Industrial Commission Form 26A or a clincher agreement.

Here’s how it typically works:

You submit a Form 26A or clincher agreement involving a PPD rating.
The agreement is reviewed and approved by the Industrial Commission.
You pay the rating or settlement amount to the employee.
Then, weeks – or sometimes more than a month – after approval, you may receive an invoice from the Commission assessing a fee of $250 or $750, depending on the body part or amount of the PPD rating.

Key Points:

The Second Injury Fund fee is governed by N.C. Gen. Stat. § 97-40.1.
The statute allows the Commission to assess a fee against the employer or its insurance carrier as follows:
- Up to $250 for the loss, or loss of use, of each minor member in cases of permanent partial disability.
- Up to $750 for a fifty percent (50%) or more loss, or loss of use, of each major member, defined as the back, foot, leg, hand, arm, eye, or hearing.
The fee is assessed inconsistently and applied at the discretion of the Commission. It is not consistently assessed in every case – or even in most cases – but we have seen a recent uptick in assessments.
There is no prior warning of when the fee will be imposed.

Summary: The Second Injury Fund is still a viable statutory mechanism, and while the associated fees are not commonly assessed, they are legally enforceable and must be paid when invoiced. Be aware that the fund exists and budget accordingly in cases where you are resolving a claim involving a PPD rating.

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This article was originally posted on the Hedrick Gardner blog and reprinted with permission.

Beyond the Outline: How Top Attorneys Earn Witness Trust & Uncover Key Details

Lynette Pitt — Tue, 20 May 2025 15:12:12 GMT

By Bonnie Ruffin, NCCP, CSR, CR

BEYOND THE QUESTIONS: THE ART OF EARNING WITNESS TRUST

One of the biggest challenges I’ve observed during depositions over the years is an attorney getting a witness comfortable enough to speak openly and honestly. Some attorneys are much better at this than others. The ones who come across as genuine, like regular people you'd actually find on a jury, tend to be the most effective.

When a witness feels at ease and genuinely likes the attorney, they’re often more transparent, even when the truth may hurt their case. I’ve seen witnesses willingly disclose damaging details simply because they felt safe enough to be honest.

Attorneys who are most successful at discovering undisclosed information often share a few key traits:

They’re approachable and kind.
They show genuine interest in the witness.
They come across as relatable, just an ordinary person like the witness.
They make an effort to find common ground.

Attorneys who have learned how to connect with witnesses are often able to make them feel at ease, so much so that they may start divulging more information than expected. In contrast, attorneys who come across as stern, rushed, unfriendly, or poor communicators tend to get the least out of a witness. Responses like “not that I recall” become the norm, and meaningful details are rarely shared. Additionally, oftentimes it is obvious if a witness has been prepped for the deposition.

BEYOND WORDS: THE UNSPOKEN KEYS TO WITNESS COOPERATION

Did you know that our verbal communication only makes up a small part of how we communicate? In depositions, communication goes far beyond just the words being spoken. Voice, tone, and body language all play a critical role, and when they don’t align, it’s noticeable. In fact, research shows that verbal communication accounts for only a small portion of what we actually convey. Sometimes, what a person says is completely contradicted by how they say it or how they physically respond.

Like when striving to connect with a jury panel, attorneys often take a similar approach when deposing lay witnesses or interviewees. Building rapport can start with simple, intentional behaviors, such as:

Showing your hands
Use a friendly, calm voice
Relaxing your posture
Maintaining warm, consistent eye contact
Smiling

These subtle, human cues can be the difference between a witness who shuts down and one who opens up. Working with each witness is an important piece to every case, and how you connect with them can shape what you learn.

BEYOND THE SCRIPT: FOCUSED LISTENING THAT DRIVES DISCOVERY

Attorneys who listen closely and with intention often veer from their prepared list of questions, not because they’re unfocused, but because they’re tuned in. They pick up on subtle clues, body language, or passing remarks and use them to dig deeper. It’s truly an art form. Watching a skilled attorney pivot seamlessly to explore a topic that was only lightly touched on by the witness is impressive. Often, it’s the unplanned questions, the ones sparked in the moment, that lead to the discovery of the most valuable insights. Once they have exhausted that unexpected line of questioning, they return to their outline and continue the examination with even more context.

In contrast, attorneys who rigidly stick to their list of questions might miss critical opportunities. A witness may offer more than what was asked, dropping subtle hints or revealing unexpected details, but if the attorney isn’t actively listening, those clues are lost. Additionally, the witness’s body language can be a powerful indicator that they have more information on a subject. Tone, facial expressions, and body language can all reveal when a subject has struck a nerve or triggered an emotional response. Ignoring these signs means missing out on the deeper truth that could significantly impact the case.

BRINGING IT ALL TOGETHER

The most effective attorneys understand that successful depositions are not just about asking the right questions, they’re about earning the witness’s trust, reading between the lines, and staying fully present. The attorneys who get to the truth know how to make a witness feel seen and heard. They build rapport through warmth and relatability, they watch closely for tone and body language that may reveal more than words, and they listen with intention, ready to pivot when something important surfaces. In high-stakes cases, having a second set of eyes and ears, such as a paralegal or co-counsel, can help capture those fleeting, valuable moments that might otherwise be missed. When attorneys approach depositions with curiosity, compassion, and attention to detail, they create space for the truth to emerge, and that can make all the difference in a case.

____________________

About The Author: Bonnie Ruffin, NCCP, CVR, CSR

Bonnie brings a wealth of firsthand experience to the legal field, backed by her credentials as a North Carolina Certified Paralegal and Certified Verbatim Reporter, along with a Bachelor’s degree in Criminal Justice. She spent years as a trial paralegal managing complex, high-stakes caseloads before transitioning into litigation support, where she continued to work closely with attorneys and legal teams across a wide range of practice areas. With deep insight into case management, courtroom procedures, and the realities of fast-paced legal work, Bonnie is a trusted resource known for delivering practical, experience-driven guidance. She now serves as a partner at DepoScripts, a North Carolina-based litigation support company committed to providing reliable, client-focused solutions nationwide.

Strategies to Minimize Impacts of Tariffs on Your Construction Projects

Lynette Pitt — Fri, 25 Apr 2025 15:42:08 GMT

by Robert Strahle, J.S. Held

Introduction

Tariffs have once again become the hot headline that dominates the news. This is not the first time owners and contractors have had to manage the risk associated with tariffs and the related impacts.

This article focuses on the immediate and long-term impacts of tariffs on construction projects and even a company's financial health. It also examines potential key risk mitigation measures that can be implemented to minimize those risks.

What are Tariffs and How Do They Impact My Project?

Tariffs are just one lever countries utilize as a trade policy instrument to “raise revenue for the federal government, to restrict imports and protect domestic producers from foreign competition, and to achieve reciprocity through agreements that reduce trade barriers”.¹ Historically, in the United States, tariffs go back as far as the Tariff Act of 1789 signed by George Washington imposing a 5% tariff on nearly all imports to the newly formed United States. Globally, tariffs have been around since ancient Greek and Roman times.

So, what does that mean for me now? For owners, contractors, and suppliers, the concern is that these new or higher tariffs may add costs, impact the project schedule, degrade margin, cause contractual disputes, disrupt the normal supply chain ecosystem, or add challenges in the bid and estimating phase. Complicating all of the above is the global uncertainty of not just whether the tariffs will indeed be implemented, but also the amount of the individual tariffs, as well as the various downstream reactions of the countries and companies subject to the tariffs. A summary of potential impacts is included below.

Project Level

For those projects that are under contract, the implications may be both short-term (direct cost increase related to the imposed tariff) and long-term (delays impacting the critical path), for which a few examples are provided below.

Increased costs which may not be recoverable under the contract – These could include cost increases for the tariff itself, raw materials, indirect costs, transportation, expediting or compliance costs, or costs to transfer to alternative suppliers.
Schedule delays – Contractors may focus on the immediate cost impacts of a change in price but may initially fail to realize there could be impacts to the schedule at the time of the change, or as market conditions and secondary supply chain impacts emerge later.
Disputes leading to costly litigation – Disputes may arise around the ability to recover costs because of tariffs through the contract which may lead to litigation.

Corporate Level

Potential impact to margins – Impacts may roll up to financials, potentially affecting working capital and ability to bid on future projects.
Potential impact on existing supplier / vendor network – This may lead to delays and costs to procure materials through existing suppliers or sourcing new suppliers.
Potential change in market conditions – Uncertainty in the market may result in projects being shelved to take a wait-and-see approach before proceeding (e.g., slow-down in new construction, cancelation of projects underway).

Solutions to Mitigate Impacts

Real-time project management techniques can be implemented to manage cost and schedule impacts.

Project Level

Address Pre-contract steps – Understand the request for proposal or quotation terms and the ability to negotiate cost escalation impacts.
READ THE CONTRACT – Understand notice provisions for change requests, or exceptions to changes for escalation or tariffs, which may or may not be excluded from reimbursement.
Assess direct and indirect cost increases from subcontractors / vendors / suppliers – Implement additional scrutiny of potential claims from third parties for potential increases of costs due to tariffs and / or inflation.
Assess schedule impacts and management – Evaluate impacts to determine if a schedule impact is due to the supply chain, availability of materials, or lack of inventory.
Communicate with stakeholders – Once assessments are made of the potential direct and indirect impacts, communicate with project stakeholders as necessary.
For federal contracts, understand the relevant federal acquisition regulations that provide for price adjustments and incorporate those into the contract(s).

Corporate Level

Review contract strategy alternatives – Investigate use of alternative contracting strategies or pricing models such as tracking volatile costs with globally recognized indices (e.g., consumer price indices for fuel or steel, or shifting risk to subcontractor / suppliers).
Review supply-chain logistics – Assess risks and opportunities in your supply chain to safeguard against the impacts of tariffs on cost and schedule. While diversifying your supply chain may reduce risk of delay, it may mean potential quality issues or impact longstanding relationships.
Review opportunities to offset tariffs – Examine opportunities at local, state, or country level for leveraging trade incentives, tax credits, or other programs that may be offered by the government to offset tariffs.
Evaluate the company’s risk tolerance – During this time of uncertainty, assess corporate strategy, including market channel, volume, geographical and / or type of projects.

Conclusion

The current uncertainty around tariffs may present immediate and long-term impacts on construction projects and challenges within the industry. Implementing the proper key measures to manage any potential risk is critical to maintaining project stability.

At J.S. Held, we provide expert guidance to help companies adapt to these challenges, ensuring compliance, financial stability, and long-term success.

¹Irwin, Douglas A. "Trade Policy in American Economic History". Annual Review of Economics, August 2, 2020.

This paper is the third installment in a series examining the multifaceted impacts of tariff and trade policies. By delving into the nuances of these policies, we aim to provide valuable insights and perspectives that will inform strategic business decision-making and foster resilience in an increasingly volatile global market. Future papers in this series will explore the specific implications for key sectors such as agriculture, energy, and construction, offering targeted analysis and recommendations to help businesses navigate and thrive amidst evolving trade landscapes. Publication Date: April 11, 2025

More About the Author: Robert Strahle is a Senior Managing Director and the US Lead in J.S. Held’s Construction Advisory practice. Robert is a professional engineer and brings more than 35 years of experience in the engineering and construction industry, both internationally and in North America. His experience includes managing complex engineering and construction projects, the resolution of construction disputes including expert testimony, preparation of construction claims, construction cost assessments, construction fraud and forensic investigations, and process controls improvement.

Robert can be reached at rstrahle@jsheld.com or +1 732 221 2639.

Calm, Cool, and Collected: Handling Disagreements with Composure in the Legal Field

Lynette Pitt — Thu, 24 Apr 2025 13:19:05 GMT

by Kevin Kelly, Chartwell Law

INTRODUCTION

Every lawyer has encountered situations where tensions are high, voices are raised, and tempers have flared. This can occur during phone calls, over email, in depositions or mediations, and even in court. Understanding that the loudest voice is rarely the most persuasive is a key skill that every young lawyer must learn.

WHY IT MATTERS

The legal field is one full of disagreement and many practicing lawyers spend their entire careers arguing each and every day. The mental strain that comes with letting a professional disagreement seep into your personal life, and even worse, letting it happen regularly, will lead you to resent your career choice and burn out rapidly. If every disagreement leads to a shouting match, every day will wear on you. The longer this goes on, the hard it will be to break the cycle and the less you will be prepared to help your clients. While arguments are bound to happen, learning to speak calmly to opposing counsel, deposition witnesses, judges, and even difficult clients will help you to curb the strain that comes with constant disagreements. Not only will you avoid the stress that comes with flaring tempers, but you will also be able to advocate more effectively. When your thoughts are collected, you are more articulate, you think on your feet quicker, and you will get your point across clearer. Most importantly, it will help you keep work at work and your personal life personal. If you spend every night grinding your teeth about the way an opposing counsel talked to you or how a judge ruled against you, sooner rather than later you will want to give up the profession you worked hard to enter.

HOW TO DO IT

Take a breath. Early in my practice an opposing counsel sent an email at 9:00pm the night before a big holiday weekend suggesting that my conduct was unethical, belligerent, abusive, malicious, and a host of other adverbs simply because I did not agree with his legal analysis. In that moment I had two choices, (1) spend my evening furiously typing away a response to the outlandish accusations; or (2) take a deep breath and close the email. I chose the latter. When I revisited the email with a clear head the next day, my response was concise and effective. I was proud to simply reply “we will have to agree to disagree and let the court decide.” The decision to take a breath and walk away saved me hours of stress, and strain on my mental health. This decision was also an example of how to practice the techniques that become habits. Simply put, when you find yourself writing an angry email or starting to raise your voice in a deposition, walk away, take a step back, and breathe. Even a few minutes can be enough time to compose yourself and the next steps you take will always be more effective.

Quit taking it personally. Many times, when speaking with an opposing counsel, they know details about their client’s life that bring emotion into the discussion. Not every judge will agree with your position. There is a reason it is called legal analysis and not legal calculation. You will not always be right. During every deposition there will be answers you do not like or expect. When you are in a disagreement it is critical to remember that this while it may seem like the end of the world, everyone is just doing their jobs. Learning to let an opposing counsel rant without responding or accepting a judge’s ruling when you disagree will help to avoid stress and allow you to enjoy the time you spend outside of work.

Consistency builds a habit, and respect. Earlier this year I was talking to an opposing counsel that I litigate against on a regular basis. In this case, we agreed to multiple extensions, and he asked about one more. I told him calmly that my client would not permit me to grant another extension and that we needed to move the case forward. His response was simply that “he didn’t blame them, and that he would probably say the same thing in my shoes.” This lawyer could have shouted that I was not giving him professional courtesy or he could have yelled that he would go to the judge anyway, and the entire conversation could have devolved into an argument, but that did not happen. In cases I have gone against this lawyer, I have always spoken calmly, I have always acted professionally, and it showed up in this situation. He knew that I was not disagreeing because of a personal spite or to try to get ahead, the time had just come to move the case along. In another situation, I had a disagreement with a client about the strength of their case. We went back and forth for almost an hour, but at the end of the call, he told me that he appreciated my willingness to debate. There was no animosity that I disagreed with him or that I saw the facts differently, he was happy to get a different perspective. When you have consistent, reasonable conversations, you gain trust amongst colleagues and opponents, and that trust leads to respect, even when having difficult conversations. Practice makes perfect is an old saying for a reason, it works.

FINAL THOUGHTS

You may not enjoy fighting the urge to shout back, saying that “we will have to agree to disagree” instead of arguing your point again, or putting in the work it takes to create a habit of composure, but you will be thanking yourself in five, ten, or twenty years when you can still say you enjoy the work you do. Whether these techniques resonate with you or not, what I hope you take away is to find ones that do. There is no shortage of disagreement in the legal field but learning to be calm, cool, and collected during those disagreements will help you succeed sooner rather than later.

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This article was originally posted in DRI's April 2025 issue of "The Briefcase". Reprinted with permission.

Building Strong In-House and Outside Counsel Partnerships

Lynette Pitt — Thu, 27 Mar 2025 18:50:53 GMT

Trailblazing Together: How Outside Counsel Can Drive Success for In-House Teams*

Legal departments rely on outside counsel for expertise, guidance, and representation. The effectiveness of this relationship can significantly impact legal outcomes and business objectives. This paper examines the key factors that contribute to a successful collaboration between in-house counsel and outside counsel, with a focus on selection, industry expertise, performance evaluation, partnership development, and communication.

I. Locating and Selecting Outside Counsel

The process of selecting outside counsel involves multiple considerations beyond legal expertise. In-house counsel typically identifies new firms through referrals, prior experience, or professional networks. Some organizations utilize a formal Request for Proposal (RFP) process to evaluate potential firms based on their expertise, experience, and cost structure.

Insurance carriers may also play a role in approving outside counsel, particularly when cases involve coverage under company policies. In these cases, in-house counsel must align their selection process with the insurer’s requirements while ensuring that the chosen firm can effectively address the legal challenges at hand.

II. The Importance of Industry Expertise

Legal issues do not occur in a vacuum. Each case is shaped by the specific industry in which it arises, and outside counsel must demonstrate a deep understanding of the business environment, regulatory landscape, and industry-specific risks. This expertise allows them to craft arguments and defenses that align with broader business strategies.

A well-rounded legal strategy must also consider the various areas of law that intersect in a given case. For example, a dispute may involve elements of contract law, employment law, regulatory compliance, and corporate governance. Outside counsel must navigate these complexities while also anticipating the broader impact of the case on the company’s operations, reputation, and regulatory standing.

III. Evaluation of Performance

Successful legal representation extends beyond case outcomes. In-house counsel assesses outside counsel based on multiple criteria, including the quality of their work product, adherence to deadlines, cost-effectiveness, and overall responsiveness.

Value-driven representation is critical. Outside counsel must provide not only legal analysis but also practical, business-oriented solutions. Firms that deliver proactive insights, anticipate legal risks, and adapt strategies based on client feedback strengthen their relationships with in-house teams. Moreover, clear and well-structured work products that require minimal revisions enhance efficiency and build trust between legal teams.

IV. Becoming a True Partner

Outside counsel that operate as true partners to in-house teams invest time in understanding their client’s industry, corporate culture, and strategic priorities. This involves more than legal expertise—it requires a commitment to ongoing education about the client’s business operations, key stakeholders, and evolving legal needs.

Building a collaborative relationship means going beyond transactional interactions. Outside counsel should actively seek opportunities to add value, such as by offering training sessions, sharing industry insights, and providing strategic guidance beyond the immediate legal matter at hand. Ensuring that all members of the firm’s client team remain informed and aligned with the client’s expectations fosters continuity and strengthens the relationship over time.

V. Effective Communication

Communication is the foundation of a successful outside counsel-in-house counsel relationship. In-house teams often prefer overcommunication rather than a lack of updates. Regular check-ins, clear and concise status reports, and proactive outreach help maintain transparency and prevent surprises.

Developing trust requires consistent, open dialogue. Outside counsel should be forthcoming about challenges, risks, and potential changes in case strategy. Keeping all key players informed, including executives, business teams, and insurance carriers when applicable, ensures that the legal strategy remains aligned with business objectives.

Conclusion

The relationship between in-house counsel and outside counsel is most effective when it is built on mutual understanding, strategic alignment, and strong communication. By carefully selecting firms with the right expertise, evaluating performance beyond case outcomes, fostering true partnerships, and maintaining clear communication, in-house legal teams can maximize the value they receive from outside counsel. These collaborative efforts not only improve legal outcomes but also contribute to broader business success.

*This article is adapted from panel presentation at the Southeastern Women Litigators Seminar on March 21, 2025 moderated by Kendra Stark, Gordon Rees (NC), and panel members Whitfield Caughman, VP-General Counsel, Paradies Lagardère (GA); Katherine Tebrock, Vice President, Associate General Counsel Regulatory Compliance, Wellpath (TN); LaKeshia Banks, Assistant General Counsel, Duke Univ. (NC)

Overcoming Vicarious Trauma for Legal Professionals

Lynette Pitt — Wed, 26 Mar 2025 14:00:00 GMT

Conquering the Summit: How Legal Professionals Can Overcome Vicarious Trauma to Achieve Success*

I. Introduction to Vicarious Trauma (VT)

Definition and Psychological Impact:

Vicarious trauma (VT), also known as secondary traumatic stress, refers to the emotional and psychological effects experienced by professionals who are indirectly exposed to others' traumatic events. Legal professionals, particularly those working with clients who have endured significant trauma, are susceptible to VT. This exposure can lead to symptoms akin to post-traumatic stress disorder (PTSD), including anxiety, emotional exhaustion, and intrusive thoughts. Over time, repeated exposure to traumatic narratives can alter a lawyer's worldview and diminish their sense of safety and trust.

The Raging River Analogy:

Consider the analogy of a lawyer standing at the convergence of multiple raging rivers, each representing a client's traumatic experience. The cumulative effect of these intersecting "rivers" can overwhelm the lawyer's capacity to cope, leading to VT. This analogy underscores the importance of recognizing and addressing the compounded impact of multiple traumatic exposures in the legal profession.

II. Understanding Vicarious Trauma

Differentiating VT from Other Conditions:

VT vs. Secondary Trauma: VT develops gradually through repeated exposure to clients' trauma, whereas secondary trauma can result from a single, acute exposure.
VT vs. PTSD: While PTSD arises from direct personal experience of trauma, VT stems from indirect exposure through clients' accounts.
VT vs. Burnout: Burnout is associated with chronic workplace stress and feelings of inefficacy, whereas VT specifically relates to trauma exposure and its psychological impact.

Symptoms and Manifestations:

Physical: Legal professionals may experience chronic stress, hyperarousal, and health issues such as headaches or gastrointestinal problems.
Mental: Symptoms include persistent thoughts about clients' cases, emotional numbness, nightmares, and a pervasive sense of pessimism.
Emotional: Feelings of guilt, shame, cynicism, and hopelessness can emerge, affecting personal and professional relationships.
Professional: VT can lead to difficulties in maintaining professional boundaries, increased absenteeism, reliance on negative coping mechanisms (e.g., substance use), and decreased motivation.

III. The Ethical and Professional Consequences of VT

Duty of Empathy vs. Professionalism:

Lawyers are required to empathize with their clients to provide effective representation. However, excessive empathy without appropriate boundaries can lead to VT, impairing judgment and professional conduct. Managing this balance is crucial to uphold ethical standards and ensure competent advocacy.

Ethical Obligation to Address VT:

The American Bar Association (ABA) emphasizes that self-care is integral to a lawyer's professional responsibility. Ignoring VT not only jeopardizes the lawyer's well-being but also compromises their ability to serve clients effectively, potentially leading to ethical violations.

IV. Strategies for Managing and Overcoming VT

Personal Strategies:

Self-Care and Boundaries: Establishing clear personal and professional boundaries is essential. This includes setting limits on work hours and being mindful of the emotional investment in clients' cases.
Maintaining Meaningful Connections: Engaging in mentorship and peer support provides a platform to share experiences and receive guidance, reducing feelings of isolation.
Health & Wellness: Prioritizing physical health through regular exercise, balanced nutrition, and adequate sleep, alongside mental health practices like mindfulness and meditation, can bolster resilience.

Professional Strategies:

Peer Support & Leveraging Local Support Systems: Participating in bar associations, lawyer well-being programs, and utilizing mental health resources can offer support and reduce stigma associated with seeking help.
Delegation: Distributing workload among colleagues can prevent emotional overload and ensure that no single individual bears the brunt of high-trauma cases.
Diversifying Caseload: Balancing high-trauma cases with less emotionally demanding work can mitigate the risk of VT.

V. Coping Strategies and Practical Tools

5-4-3-2-1 Reset Exercise (Grounding Technique):

This grounding technique helps individuals refocus during moments of stress:

5 things you can see: Observe five items in your immediate environment.
4 things you can touch: Acknowledge four objects you can physically feel.
3 things you can hear: Identify three sounds around you.
2 things you can smell: Notice two distinct scents.
1 thing you can taste: Recognize one taste sensation.

This exercise anchors individuals in the present moment, reducing anxiety and promoting calmness.

Reaffirming Meaning and Finding Joy:

Lawyers should actively seek activities and moments that bring joy and fulfillment outside of work. Engaging in hobbies, spending time with loved ones, and pursuing interests can counterbalance the emotional toll of legal work. As poet Audre Lorde aptly stated, "Caring for myself is not self-indulgence, it is self-preservation, and that is an act of political warfare."

VI. Resources and Further Reading

For a deeper understanding of VT and strategies to manage it, consider the following resources:

American Bar Association: "Five Things Attorneys Should Know About Vicarious Trauma"
British Medical Association: "Vicarious Trauma: Signs and Strategies for Coping"
Jean Koh Peters: "Representing Children in Child Protective Proceedings"
Office for Victims of Crime: "Vicarious Trauma Toolkit"
TEDx Talks: "Drowning in Empathy: The Cost of Vicarious Trauma" and "How Lawyers Can Struggle with Secondary Trauma" by Michael J. Rourke

VII. Conclusion and Call to Action

Vicarious trauma is an inherent risk in the legal profession, particularly for those working closely with traumatized clients. However, by proactively implementing personal and professional strategies, legal professionals can mitigate the impact of VT. It is imperative for lawyers to recognize the signs of VT, seek support when necessary, and prioritize self-care to maintain both their well-being and the integrity of their practice. Embracing these strategies not only enhances personal resilience but also ensures the provision of ethical and effective legal representation.

*This article is adapted from a presentation at the Southeastern Women Litigators Seminar on March 20, 2025 led by Jillian Tate, Davis & Hamrick (NC) and Rebecca Bandy, Director, Henry Latimer Center for Professionalims (FL).

Boosting Legal Efficiency: Top Tech Tips and Tricks

Lynette Pitt — Mon, 21 Oct 2024 16:08:12 GMT

by Michael T. Murray, Veritext

Streamlining Legal Work with Technology and Simple Tips

The pressure on legal professionals is immense with managing heavy documentation, meeting strict deadlines and conducting thorough research – all while ensuring case preparation is meticulous. Fortunately, advancements in technology offer tangible solutions to alleviate some of this burden. In addition, there are practical tips that can help attorneys reduce stress and manage their workload more efficiently.

Technology’s Role in Easing Legal Workloads

Imagine transforming time-consuming tasks like formatting transcript summaries, organizing exhibits and managing deposition logistics into seamless activities. With tools like artificial intelligence and automated systems, this is no longer just a vision of the future but an actual opportunity today. AI has proven to significantly enhance productivity, reduce errors and free up time for more strategic tasks. A recent Goldman Sachs study revealed that AI could automate up to 44% of routine legal tasks, providing law firms with both time and cost savings. By adopting these technologies, legal professionals can focus on higher-level work that requires human judgment, empathy and critical thinking.

Here are some technologies and tips to help make your legal work more efficient and stress-free:

A Comprehensive Solution

One indispensable tool is MyVeritext, a complimentary and completely searchable web-based portal for scheduling proceedings; joining upcoming remote depositions; and accessing transcripts, exhibits and other files. It is the most technologically robust repository and scheduling system in the industry. Compliant with both HIPAA and PII standards, MyVeritext allows you to securely store and access your legal documents from anywhere. MyVeritext users have access to drag-and-drop scheduling features and can simply upload a proceeding notice directly from their desktop and schedule a deposition within seven seconds. Its powerful search functionality makes finding the necessary files fast and intuitive, further reducing the time attorneys spend on manual document retrieval.

Transcript Summarization

AI-generated transcript summaries are another leading-edge tool that can transform a once time-consuming task into a fast and efficient process. In general any AI-generated material, though very helpful, should be viewed as draft-quality work; human review is crucial to ensure accuracy.

Security is another major consideration when utilizing AI tools. Though it may be tempting to handle summarization of this nature on your own – through a tool like ChatGPT – it’s critical to consider the associated risks. Legal transcripts may include personal information, copyrighted material or sensitive data requiring HIPAA compliance. Any confidential information can (and will) be used for AI learning on a public model. Refrain from openly sharing your confidential data by utilizing a third-party vendor that can ensure that robust security measures, such as encrypted data storage and transmission, are implemented.

Flexible delivery and formatting options are also helpful to consider when selecting a vendor. Look for those that can supply summaries suited to various litigation types and having multiple delivery options.

For example, Veritext’s Smart Summary offers AI-generated abstracts alongside certified transcripts in an editable Microsoft Word format, allowing you to make adjustments and highlight key testimony quickly.

Dynamic Testimony

Capturing witness interactions with exhibits during a deposition has never been easier thanks to tools like Exhibit Capture. This technology allows clients to present electronic exhibits in a dynamic and compelling way, by recording witness mouse movements and keystrokes in real time during a deposition. A video file of a witness interacting with the document is then paired with picture-in-a-picture legal videography creating a persuasive package of testimony.

Seamless Collaboration

Another key tool for deposition efficiency is Exhibit Share, a secure and straightforward way to introduce exhibits during a deposition. This paperless solution allows participants, whether local or remote, to share exhibits instantly via a secure and private platform. Exhibit Share not only saves time but also eliminates the hassle and costs associated with shipping, scanning and managing paper documents. It’s an ideal tool for today’s remote and hybrid legal environment where depositions often involve both in-person and remote participants.

Electronic Date Calculators

Physical calendars, though useful, can lead to errors. Tools like the Veritext Filing Date Online Calculator allow you to calculate filing dates quickly and accurately, even factoring in holidays and weekends. These calculators help legal professionals avoid deadline mishaps by offering more precise date tracking.

Management of Multiple Exhibits

Managing multiple exhibits across various depositions or cases is a common challenge for legal teams. Veritext’s Advanced Case Exhibits (ACE) is a solution that bundles all of your case exhibits into a single, organized package. Exhibits are arranged chronologically with a descriptive index and presented in a hyperlinked, searchable PDF. Accessible from any device, ACE helps you eliminate the need for cumbersome physical documents, freeing you from those bankers boxes full of paper. Its PDF format makes it especially helpful and easy to access on the fly in courtrooms with spotty Wi-Fi.

Secure Document Exchange

Legal teams need a neutral and secure location to store and exchange documents. Veritext Vault offers a cloud-based depository that keeps documents safely stored and easily accessible, meeting the highest standards of compliance with HIPAA and PII. Accessible from any web browser, Veritext Vault allows for smooth and secure collaboration with external parties.

Industry CLEs

Continuing legal education courses focused on technology can be invaluable for legal professionals. Many providers, like Veritext, offer CLEs on topics such as exhibit sharing, videography, remote proceedings and AI solutions. These sessions not only help legal teams stay updated on the latest tools but also offer hands-on demonstrations that can improve daily workflows. Register for a Veritext CLE at www.veritext.com/cle.

Conclusion

Legal work is inherently challenging, but modern technologies and practical tips can reduce stress and increase efficiency. By leveraging tools like AI, automation and secure document management systems like MyVeritext, Exhibit Capture, Exhibit Share, ACE and Veritext Vault, legal professionals can streamline their workflows, ultimately saving time and enhancing their focus on client advocacy. With the right resources in place, lawyers can manage their workload more effectively, freeing up valuable time for strategic thinking and professional growth.

About the Author
Michael T. Murray is the director of client solutions for Veritext Legal Solutions. Murray stays on top of litigation technology trends and travels throughout the nation speaking and providing informative and entertaining CLEs, educational instruction and product demonstrations to legal professionals.

Providing Death Benefits to Children Born Out of Wedlock: A “Legitimate” Issue

Lynette Pitt — Mon, 30 Sep 2024 19:59:06 GMT

by Salvatore Popolillo III, Hedrick Gardner Kincheloe & Garofalo, LLP

Children born out of wedlock is a growing trend in the United States.¹ According to recent statistics published by the North Carolina Department of Health and Human Safety, from January through March 2024 more than 40% of children born in North Carolina were born out of wedlock.² Given this statistic, it is foreseeable that, more and more often, practitioners will be presented with death claims where the issue arises of whether to provide death benefits to a child born out of wedlock.

For background, the North Carolina Workers’ Compensation Act (“Act”) states persons wholly dependent upon the deceased are entitled to death benefits.³ Further, a “child shall be conclusively presumed to be wholly dependent” upon the deceased.⁴ Under the Act, a “child” is defined to “include a posthumous child, a child legally adopted prior to the injury of the employee, and a stepchild or acknowledged child born out of wedlock dependent upon the deceased….”⁵ Of note, this definition was changed in 2013 to replace “acknowledged illegitimate children” with “acknowledged child born out wedlock.”⁶ Regardless of the nomenclatural change, a child born out of wedlock has presented issue for North Carolina Courts – and correspondingly, workers’ compensation practitioners.

This article will outline precedent, and the standards of proof, set by our Courts for a child born out of wedlock’s entitlement to death benefits. This article addresses our Courts’ findings particularly on the issue of dependency, not the acknowledgment of the child born out of wedlock. Specifically, this article will discuss four cases: The first two cases address a legal dependency standard, generally holding that a decedent as the respective parent of a child born out of wedlock bears a legal obligation to the child, which is sufficient for the child to be dependent upon the deceased; The second two cases are more recent and discuss a factual dependency, requiring children born out of wedlock to show substantial dependence upon the deceased.

Legal Dependency

First, in 1935, the Supreme Court, in Lippard v. Southeastern Express Co., noted children born out of wedlock could be entitled to death benefits, contrary to common law principle which did not provide benefits for “illegitimate children.”⁷ The decedent, Lippard, sustained a compensable fatal injury while his fiancé was pregnant.⁸ Lippard’s fiancé gave birth to his child after his fatal injury; thus, the Court was presented with the issue of whether this child born out of wedlock was dependent upon his deceased father and entitled to death benefits.⁹ In ruling to provide the child death benefits, the Supreme Court considered the interpretation of N.C.G.S. § 97-2(12), and stated:

“The dependency which the statute recognizes as the basis of the right of the child to compensation grows out of the relationship, which in itself imposes upon the father the duty to support the child, and confers upon the child the right to support by its father. The status of the child, social or legal, is immaterial.”¹⁰

Thereafter, in Hewett v. Garrett, the Supreme Court in 1968 was, again, tasked with deciding whether a deceased employee’s child born out of wedlock was entitled to death benefits.¹¹ The decedent, Hewett, was listed on the child’s birth certificate as her father.¹² Hewett’s child and the child’s mother resided with the child’s maternal grandmother.¹³ Hewett also resided in the maternal grandmother’s residence while contributing to the support of the child and child’s mother.¹⁴ However, Hewett separated from the child’s mother and did not provide support to either for four-and-a-half years prior to his death.¹⁵

The Court contemplated the definition of child under N.C.G.S. § 97-2(12), noting this statute recognized “a distinction between actual and legal dependency” for which, “[a] legal dependence is sufficient and the law fixes that type of responsibility on the father of [a child born out of wedlock].“¹⁶ Based on this legal dependence (i.e., Hewett was listed on the child’s birth certificate as her father), the Court concluded that “[a]lthough evidence is lacking that he contributed to the child’s support after he separated from the mother, his legal responsibility continued. His failure to support did not work a forfeiture of the child’s right to participate in the death benefits under Workmen’s Compensation.”¹⁷ Thus the Court awarded death benefits to the child.¹⁸

Factual Dependency

More recently, in 1985, the Court of Appeals, in Winstead v. Derreberry, considered whether a stepchild was entitled to death benefits.¹⁹ The Court considered the definition of child under N.C.G.S. § 97-2(12), and noted the definition provided a “sub-group” of each classification; specifically, the grammatical phrasing of this section requires a stepchild and children born out of wedlock to prove they were dependent upon the deceased.²⁰ In distinguishing from the legal dependency standard set in Lippard and Hewett, the Court noted that stepchildren could not possibly prove legal dependency, unless the child was adopted, so rather the Legislature’s intent was to afford a “presumption of dependency to those persons who would most usually be factually dependent upon the deceased thereby alleviating the burdensome requirement of proof of dependency in every case.”²¹ Thus, the Court noted that stepchildren could also be factually dependent upon the deceased, and created a substantial dependency test specific for determination of a stepchild’s dependency upon the deceased.²²

Although the Winstead Court did not hold this test directly applies to children born out of wedlock, the Court’s grammatical interpretation of N.C.G.S. § 97-2(12) classified stepchildren and children born out of wedlock into the same “sub-group,” impliedly requiring the same burden of proof.²³

In 2022, the Court of Appeals in Thompson by and Through Morris v. J.H. Honeycutt & Sons, Inc., (notably an unpublished decision), considered whether a child born out of wedlock was also entitled to death benefits.²⁴ The decedent, Thompson, acknowledged and provided financial support to the child. However, the child was born out of wedlock, and while the decedent was alive, there was doubt the child was actually his, and a later DNA test showed the child likely was not. ²⁵ In considering whether the child was entitled to death benefits, the Court used the Winstead Court’s grammatical conclusion of N.C.G.S. § 97-2(12), and stated, the test “is whether (1) the decedent acknowledged an illegitimate child in sufficient fashion; and (2) the child was substantially dependent on decedent.”²⁶

Regarding substantial dependency, the Court, in applying Winstead, stated “[t]he ultimate fact to be determined is whether the acknowledged, illegitimate child was substantially dependent on the financial support of Decedent … as compared with all other sources of financial support.”²⁷ The Court declined to provide a bright line rule of how much financial support was sufficient to show substantial dependency, and did not apply the Winstead Court’s test for stepchildren, but found there was sufficient evidence to show the child was substantially dependent upon the deceased.²⁸

Discussion

With the increase in children born out of wedlock, workers’ compensation practitioners in North Carolina will likely see more cases pertaining to death benefits for such children and should be aware of the legal and factual dependency standards.

For legal dependency, the Supreme Court’s rulings in Lippard and Hewett remain precedent. Thus, the Commission could find a deceased employee to be the parent of a child born out of wedlock, if the decedent was on the child’s birth certificate, as in Hewett, and therefore bore a legal obligation to support the child, which is sufficient to show legal dependence. If the decedent is not on the birth certificate or there is some question of parentage, the Commission should, theoretically, apply a factual dependency consideration.

Hypothetically, what if there was a child support order requiring the deceased employee to pay support to a child-born-out-of-wedlock’s mother? If that is the case, a civil court would have had to conclude the decedent was the child’s parent. Is that sufficient for the Commission to apply a legal dependency standard? This is obviously a grey area of law, but with the liberal leanings of case law on the issue, I suspect any legal documentation showing parentage would be sufficient to apply the legal dependency standard.

________________________

¹¹Gretchen Livingston, The Changing Profile of Unmarried Parents, Pew Research Center (April 25, 2018) https://www.pewresearch.org/social-trends/2018/04/25/the-changing-profile-of-unmarried-parents/.

²NC State Center for Health Statistics, YTD2024 Quarter 2 (Jan-Jun) North Carolina Resident Births by County of Residence and Marital Status of Mother https://schs.dph.ncdhhs.gov/data/provisional/Birth/2024/YTD2024PB11ResidentBirthsbyCountybyMaritalStatus.html.

³See generally N.C.G.S. § 97-38.

⁴N.C.G.S. § 97-39.

⁵N.C.G.S. § 97-2(12) (2021) (emphasis added).

⁶See S.L. 2013-198 § 25, eff. June 26, 2013; compare Sec. 2, ch. 120, Public Laws of N.C. 1929. Sec. 8081 (i), N.C. Code of 1931; see Lippard v. Southeastern Express Co., 207 N.C. 507, 177 S.E. 801 (1935).

⁷Lippard, 207 N.C. 507 (1935).

^no8Id.

⁹Id.

¹⁰Id. (emphasis added).

¹¹Hewett v. Garrett, 274 N.C. 356, 163 S.E.2d 372 (1968).

¹²Hewett, 274 N.C. at 359-60.

¹³Id.

¹⁴Id.

¹⁵Id.

¹⁶Id. (emphasis added).

¹⁷Hewett, 274 N.C. at 360.

¹⁸Id.

¹⁹Winstead v. Derreberry, 73 N.C. App. 35, 326 S.E.2d 66 (1985).

²⁰Winstead, 73 N.C. App. at 39-41.

²¹Winstead, 73 N.C. App at 40-41.

²²Winstead, 73 N.C. App. at 42

²³Winstead, 73 N.C. App. 35 at 40-41.

²⁴Thompson by & Through Morris v. J.H. Honeycutt & Sons, Inc., 2022-NCCOA-939, 287 N.C. App. 395, 881 S.E.2d 645 (2022).

²⁵Thompson, 2022-NCCOA-939, ¶¶ 4-8.

²⁶Thompson, 2022-NCCOA-939, ¶ 15.

²⁷Thompson, 2022-NCCOA-939, ¶ 16 (quoting Winstead, 73 N.C. App. at 42).

²⁸Thompson, 2022-NCCOA-939, ¶ 18.

Costing Criteria Necessary for the Valid Life Care Plan

Lynette Pitt — Wed, 21 Aug 2024 20:00:00 GMT

by Betsy Keesler, RN, BSN, CLCP

There are different ideas about what a Life Care Plan consists of and the purpose it serves. The International Association of Rehabilitation Professionals (IARP) and the International Academy of Life Care Planners (IALCP) have collectively and succinctly defined the essence of the Life Care Plan through this definition:

“The life care plan is a dynamic document based upon published standards of practice, comprehensive assessment, data analysis, and research, which provides an organized, concise plan for current and future needs with associated costs for individuals who have experienced catastrophic injury or have chronic health care needs.”

This article will focus on the key concepts of “consensus” and “standards of practice” as the foundational framework for the life care planning professional to build credible and accurate costing research and analysis upon.

The life care plan, as developed for the catastrophically injured person, called the evaluee, is expected to be individualized, comprehensive, and professionally collaborative in nature. We can think of the life care plan as a road map, to assist the evaluee in obtaining optimal outcomes and preventing/reducing complications. Importantly, the life care plan should reflect identifiable input from multiple healthcare professionals, regardless of the life care planner’s professional scope of practice.

As such, the foundationally secure and valid life care plan will be transparent, reproducible, implementable, and evidence based. Each of these characteristics is applicable to every aspect of the life care plan, including the process of researching costs for the myriad of items which will inevitably be presented in the plan.

The life care plan is, in fact, a marriage of sorts between Economics and Rehabilitation Practice.

“In the 1970s, the specialty practice of life care planning emerged from the disciplines of economics and rehabilitation as a methodology to determine future medical care needs and associated costs. The first textbook publication of this method appeared by 1982 (Deutsch& Raffa, 1982). Over the next two decades, the specialty practice evolved. By 1996, a lifecare planning professional association, a nationwide training program, and a life care plan certification program were established” (Weed & Berens, 2018).

The International Association for Rehabilitation Professionals (IARP) and the International Academy of Life Care Planners (IALCP) have collectively published peer-reviewed and agreed upon Consensus Statements, as found in the Journal of Life Care Planning, and are applicable to all life care planners, regardless of their professional background and education.

The Consensus Statements represent the collective expertise of the life care planning community. The current edition of Consensus Statements was published in 2018, following a Delphi Methodology study.

The Delphi research methodology is utilized to establish consensus among subject matter experts. It is important to note, the study included consensus information derived from 17 years of life care planning summits and received endorsements from multiple professional organizations. The initial stages of the study included members of the International Commission of Health Care Certification (ICHCC), as well as practicing life care planners from sixteen states. The professional fields represented include Rehabilitation Counseling, Case Management, Nursing, Medicine, Psychology, and Social Work. The resulting information was then provided to the life care planning community for analysis through rounds of sample surveying. The Consensus Statements developed from this Delphi study constitute peer-reviewed and conclusive findings from the life care planning community at large that outline the developmental requirements for the life care plan.

Pertinent Consensus Statements to the arena of costing include the following:

Consensus #45: “Life Care Plans shall be individualized.”

Consensus #54: “Life Care Planners shall research condition, resources, services, and costs.”

Consensus #61: “Life Care Plans shall include an annotated list of requested and reviewed data/sources.”

Consensus #69: “Life Care Planners shall utilize protocols for cost research.”
(Consensus Statements and standards of practice represent such protocols.)

Consensus #70: “Life Care Planners shall gather geographically relevant and representative prices.”

Consensus #85: “Best Practices for identifying costs in life care plans include:

a. Verifiable data from appropriately referenced sources.

b. Costs identified are geographically specific when appropriate and available.

c. Non-discounted/market rate prices.

d. More than one cost estimate when appropriate.”

Consensus Statements have, in turn, informed the construction of life care planning Standards of Practice, Fourth Edition, as published by IARP/IALCP in the Journal of Life Care Planning (2022).

When delineating costs for the evidence-based life care plan, the following methodology should be adhered to:

“Standard 14: The life care planner uses a consistent, valid, and reliable approach to costs.

Practice competencies include:

a. Uses a consistent method to determine costs for various categories of available/needed services.
b. Uses geographically relevant and representative costs.
c. Identifies services and products from reliable sources.
d. Follows a consistent method for organizing and interpreting data for projecting costs.
e. Explains the life care planning process to involved parties to obtain needed information.
f. Cites verifiable cost data.”

“Standard 15: The life care planner communicates their opinions.

Practice competencies include:

a. Follows a consistent method for creating the narrative component of the life care plan report.
b. Develops and uses documentation tools for reports and cost projections.
c. Considers classification systems (e.g., International Classification of Diseases [ICD], Current Procedural Terminology [CPT], Healthcare Common Procedure Coding System [HCPCS], International Classification of Functioning, Disability, and Health [ICF]) to provide clarity regarding care recommendations and costs.
d. Records lack of access to pertinent information.”

In sum, the life care plan should answer questions, not raise more of them.

To create accurate life care plan costing tables, there are several important concepts to consider: usual, customary, and reasonable, probability vs. possibility, CPT® codes, total present value, and life expectancy.

Usual, Customary, and Reasonable

The American Medical Association (AMA), Policy H-385.923, formally defines usual, customary, and reasonable, relative to service fees, as follows:

1. “‘usual’ fee means that fee usually charged, for a given service, by an individual physician to his private patient (i.e., his own usual fee)

2. a fee is ‘customary’ when it is within the range of usual fees currently charged by physicians of similar training and experience, for the same service within the same specific and limited geographical area, and

3. a fee is ‘reasonable’ when it meets the above two criteria and is justifiable, considering the special circumstance of the particular case in question, without regard to payments that have been discounted under governmental or private plans.”

Probability vs. Possibility/Potential of Care Recommendations

Dr. Joseph Guileyardo published an article in 2015 titled, “Probability and uncertainty in clinical and forensic medicine,” in which he outlines the following concepts:

A reasonable degree of medical probability is a conclusion defined as “having a probability greater, but not significantly higher than 50%.”

A reasonable degree of medical certainty is defined as an opinion “generally considered as significantly exceeding 50% likelihood.”

The Life Care Planning and Case Management Handbook (Fourth Edition) explains that life care plans frequently include projected future complications. This professional treatise also notes, “complications that only rise to the level of ‘potential’ do not meet the criterion of ‘probable’ as defined in the legal sense.” Recommended care items, included within the life care planning cost tables, must have a reasonable degree of medical or rehabilitative probability and/or certainty to associate the items, with costs, in a life care plan.

CPT® Codes

The Current Procedural Terminology (CPT®), as developed by the American Medical Association (AMA), provides health care professionals with a uniform language for coding medical services and procedures across all venues of service operation. In other words, the universal CPT® code creates an avenue to compare costs from one health care provider to another, and from one region to another, in an “apples to apples” fashion. As mentioned in Standard of Practice 15c, the utilization of CPT® codes in the cost development process of the life care plan enables the life care planner to establish usual, customary, and reasonable costs for an evaluee in a specific zip code/geographical region. Relative to the necessity of professional collaboration, the establishment of medical foundation from a health care professional acting within his or her scope of practice, should lead to more accurate costing research by utilizing the most appropriate CPT® codes.

Total Present Value vs. Total Lifetime Cost

The only important total cost of consideration in a life care plan is the total present value. This is the number the trier of fact will be asked to consider providing for a lifetime of medical and care needs for the evaluee. Often, a life care planner will choose to include a lifetime calculation of costs based on his or her costing research. This presentation of total lifetime cost may result in confusing, or even misleading, information to the trier of fact. Most life care planners lack the qualifications and the expertise to perform the economic analysis of factoring in inflation and interest required to determine total present value. Because the life care plan will document the need for future care over an evaluee’s entire life, this future care must be presented in today’s dollars, making necessary the retention of an economic expert to perform this complex calculation.

Life Expectancy

As described in the Journal of Life Care Planning, the overall methodological processes necessary to determine life expectancy for purposes of a life care plan are quite extensive and complex (Caruso et al., 2021; Rosen et al., 2013; Kush et al., 2013; & Krause et al., 2013). From an evidence-based life care planning perspective, it would be inappropriate to assume and utilize an average life expectancy for an evaluee, absent necessary and qualified expert foundation for the same.

In summary, to build a foundationally solid cost table based on the recommendations of the life care plan, it is essential the life care planner follow the Standards of Practice and Consensus Statements put forth by the International Association of Rehabilitation Professionals (IARP) and the International Academy of Life Care Planners (IALCP), as these are the protocols which guide the cost developmental process of the life care plan. Standards of Practice and Consensus Statements are the peer-reviewed culmination of solid practice foundation developed by subject matter experts. As such, these guidelines show the criteria necessary to establish credible, reproducible, and transparent data needed for the robust life care plan cost projection.

REFERENCES:

American Medical Association. (2013). “Definition of Usual, Customary and Reasonable.” From: www.ama-assn.org. H-385.923 Definition of "Usual, Customary and Reasonable" (UCR) | AMA (ama-assn.org)

Caruso, G et al. (2021). “Life Expectancy Issues in Life Care Planning.” Journal of Life Care Planning, 19 (1), 19-58.

Guileyardo J. M. (2015) “Probability and uncertainty in clinical and forensic medicine.” Proceedings (Baylor University Medical Center),28(2). 247-249

International Association of Rehabilitation Professional & International Academy of Life Care Planners (2022), Fourth Edition. Standards of Practice for Life Care Planners.

Krause, J. et al. (2013). “Utilizing Research to Determine Life Expectancy: Applications for Life Care Planning.” Journal of Life Care Planning, 12(1), 51-60.

Kush, S. J., Day, S., & Reynolds, R. (2013). “Life Expectancy for Life Care Planners.” Journal of Life Care Planning, 12(1), 31–49. Journal of Life Care Planning, 12(1), 31-50.

Preston, Karen, et al. “Standards of Practice for Life Care Planners, Fourth Edition.” Journal of Life Care Planning, 20 (3), 5-24.

Rosen, B. et al. (2013). “Estimating Life Expectancy: A Physiatric Perspective.” Journal of Life Care Planning, 12 (1), 3-14.

Weed R. & Berens D.E., (editors). 2018. Life Care Planning and Case Management Handbook. (4th ed.). New York, NY: Routledge.

Evaluating Consumer Product Health Claims

Lynette Pitt — Tue, 23 Jul 2024 21:13:02 GMT

by Jason Clevenger, Ph.D., Jessica Vargas, Ph.D., Nicholas Benetatos, Ph.D., Megan Leonhard, M.P.H., and Diane Boesenberg

FTC scrutiny is expanding the scope of evidence-based claim substantiation, increasing the demands for valid scientific research

“Increase your metabolism.” “Clinically proven to reduce skin irritation.” “Supports joint health.”

Health-related claims can help sell a variety of consumer products. However, when claims may be misleading or lacking the appropriate level of scientific support, product manufacturers can face significant business and regulatory risks.

In an effort to ensure that health-related claims are “truthful, not misleading, and supported by science,” the Federal Trade Commission released its Health Products Compliance Guidance in 2022. This guidance, the first update from FTC since its 1998 Dietary Supplements: An Advertising Guide for Industry, expands the agency’s purview from dietary supplements to all health-related products, including foods, diagnostic tests, apps, medical devices, wearables, over-the-counter drugs, and more.

In addition to expanding its scope from dietary supplements to all health-related products, FTC’s guidance details how consumer product manufacturers need to substantiate their claims through “competent and reliable scientific evidence” and “clear and conspicuous disclosure.” The agency’s increased scrutiny signals that substantiation of new and existing health-related claims may need to be reviewed to confirm there is robust evidence the claims are truthful and not false or misleading based on updated guidelines.

Without substantiating their product health claims, manufacturers risk financial penalties and litigation, as well as the loss of time to market, money, and reputational damage that can come with having to retract or restate claims.

Regulation of consumer product health claims

Although this expansion in scope creates a situation where FTC and the Food and Drug Administration share jurisdiction over the marketing of devices, drugs, dietary supplements, foods, and other health-related products, they have different responsibilities. FTC has primary responsibility for regulating all advertising of foods, drugs, devices, and cosmetics but not their labeling. FDA has primary responsibility over the branding of foods, drugs, devices, and cosmetics, as well as the regulation of prescription drug advertising. FTC and FDA also have different legal frameworks — for instance, the FTC, unlike FDA, can’t exercise premarket approval over health-related claims.

Importantly, a product’s regulatory status can change depending on the claim. For example, dietary supplements making broad and far-reaching claims about being able to “diagnose, cure, treat, mitigate, or prevent” disease could be considered an unapproved drug under the Federal Food, Drug, and Cosmetic Act, subject to the requirements that apply to drugs, even if they are labeled as dietary supplements.

Trending toward increased substantiation

FTC has brought and adjudicated or settled more than 200 cases involving misleading or false health-related claims since 1998. Since 2021, FTC has brought or settled approximately 27 healthcare-related suits, including claims regarding deceptive marketing. Two key principles guide FTC’s actions:

1) Health-related claims must be truthful and not misleading (i.e., clear and conspicuous disclosure).

2) Before advertising health-related claims, advertisers must have adequate substantiation (i.e., robust, reproducible, competent and reliable scientific evidence) for all product claims conveyed expressly or implied, preferably based on peer-reviewed guidelines and published methodologies.

For example, a label on a vitamin bottle that claims 95% of orthopedists consume the product reflects an “expressly stated” claim (i.e., 95% of orthopedists take the product), as well as an “implied” claim because it suggests that the vitamin might support bone health since orthopedists take it. Both types of claims need substantiation.

In verifying these claims, stakeholders will want to think about how different audiences might interpret their health-related claims. Someone who has mobility issues for instance, may be more susceptible to an overstated claim like “boosts leg strength and mobility” than someone without mobility concerns. FTC also requires that qualifiers and disclosures must be “clear and conspicuous,” disclosing any limitations of a health-related claim. Rigorous substantiation can help reveal product claim limitations.

Factors affecting the required level of substantiation

According to the updated guidance, claims involving the safety and efficacy of health-related consumer products may receive a higher level of scrutiny and require increased substantiation. According to FTC, factors influencing the amount and type of substantiation required include:

Product types: Consumer health and safety goods generally require a relatively high level of scientific substantiation.
Claim types: Claims that are difficult for consumers to verify on their own — such as claims that cannot be verified without medical testing — may require more substantiation.
Truthful claims that might benefit consumers but are difficult or expensive to verify: The costs and benefits of verifying claims may affect the level of substantiation required.
Consequences of a claim being false: This could include both physical and economic injury, such as a consumer forgoing more effective treatment or the cost of buying an ineffective product.
Expert opinion: What experts in the field consider a reasonable amount of substantiation can affect the level of substantiation required.

Steps for substantiating health-related claims

According to FTC, basic components of valid scientific research include a treatment and control (or comparison) group, randomization, and double blinding, as well as robust methodology and both statistically significant and clinically meaningful and, if necessary, actionable, results. Taking a scientific approach informed by the following steps can help product manufacturers obtain the evidence needed to understand the specific scope and parameters of their health-related claims and go to market with confidence:

1. Conduct a thorough critical review of the existing scientific literature and data on the product — including history of claims made and accepted — and relevant regulatory guidance and standards to identify gaps and opportunities in the evidence base, as well as potential risks and benefits of the claim.

2. Design a study to address a research question and hypothesis that will meet the regulatory expectations and criteria for the claim, including choosing the appropriate study design, such as a randomized controlled trial or an observational study; selecting the relevant outcome measures, such as biomarkers, clinical endpoints, or subjective ratings; defining the study population, sample size, and inclusion and exclusion criteria; and determining the study duration.

3. Create a statistical analysis plan and perform data analysis that can answer the research question and hypothesis and evaluate the statistical significance and clinical relevance of the results — which may include applying appropriate statistical analyses to test the assumptions and limitations of the data and the methods — and reporting the findings.

4. Synthesize and communicate the evidence in a clear and concise manner that can support evaluation of the claim, which may include preparing a complete study report, manuscript, or presentation that summarizes the study objectives, methods, results, and conclusions; highlighting the strengths and weaknesses of the evidence; providing recommendations regarding whether the claim is supported; and outlining the implications of the claim.

Looking to the future of advertising

Although FTC’s guidance update was its first in many years, consumer product companies can benefit from thinking about how the stakes for substantiation could increase going forward. In the context of evolving advertising platforms like augmented reality (AR) labels, product claims may be presented to consumers in new ways (e.g., multiple languages, additional content unable to fit on a standard label) with the potential to increase consumer engagement and improve consumer interactions and label understanding — quickly delivering more information than a two-dimensional label can provide. With the touch of a button, consumers may be able to scan AR labels with smart phone cameras to receive a variety of content, including videos, customized messaging, related product recommendations, social media, and much more. With these advances, companies should also be mindful of equitable access for populations or communities who may not have access to AR or smart phones and will continue to rely on traditional labels.

While these labels and others like them may offer added value for consumer products companies — fostering brand loyalty and influencing purchasing decisions with increased speed to different demographics — it’s more than likely that as messaging related to health-related digital claims becomes more prominent, so will the demand from regulatory entities in substantiating them. To capitalize on early and ongoing opportunities on these platforms and others, well-designed scientific studies have the potential to help companies appropriately scope and collect the evidence that might be needed for future health-related claims, helping them take advantage of fast-evolving market and advertising trends.

Checks and Imbalances: 2024 Local Government Case Law Update

Lynette Pitt — Mon, 24 Jun 2024 16:23:12 GMT

by Trey Ferguson¹, Sumrell Sugg

We’re only half-way through 2024 and our courts have handed down numerous decisions hand-slapping local governments (“LGs”). Some of these cases are pretty straight forward while others are bit more perplexing, and most (all but one in this Article) rule against the LG. This Article briefly outlines the notable appellate decisions from the last six months that effect local governments and the attorneys representing them.

Pre-auditing LG contracts: Town of Forest City v. Florence Redevelopment Partners, LLC

To start off the year, the Court of Appeals shocked local government (“LG”) lawyers when it essentially said not all written contracts with LGs need to be pre-audited pursuant to N.C.G.S. § 159-28.

In Town of Forest City v. Florence Redevelopment Partners, LLC², the Court refused to invalidate a contract between a developer and the Town of Forest City when the contract at issue lacked a pre-audit certification pursuant to N.C.G.S. § 159-289(a1).

Citing a case from 1999³, the Court held the statutory pre-audit certification did not apply when a LG signs a contract in one fiscal year but does not actually incur an expense under the contract until the following fiscal year. The Court noted that it would not invalidate a contract for lack of a pre-audit certificate at the mere possibility of an expense in the first fiscal year but rather would look to whether an obligation actually occurred in that timeframe.

Zoning & Free Use of Property: Town of La Grange v. County of Lenoir

In the same month, the Court of Appeals reaffirmed the long-standing judicial canon that zoning ordinances should be strictly construed in favor of free and uninhibited use of private property.

In Town of La Grange v. County of Lenoir⁴, a landowner proposed to use recently purchased land to store and sell vehicles at auction. Some of the vehicles had been wrecked and some only had minor damage. The landowner’s proposed use was not listed in the County’s table of permissible uses under its Zoning Ordinance. Rather, the use was a close call between a permissible use (auction sales) and a non-permissible use (junkyard).

In making the initial determination, the County Zoning Official aired on the side of permissible use, finding it dispositive that the cars were not being sold piecemeal for parts and scraps but were sold and transported off-site as a single unit. The neighboring landowner, the Town of La Grange appealed this determination, believing the proposed land use was an impermissible junkyard and would pollute one of the Town’s water source.

The Town appealed the official’s determination. The County’s Planning Board, Superior Court, and State Court of Appeals all agreed with that analysis, and the Court affirmed the official’s determination under a strict statutory construction analysis that favored the free use of private property.

Building Code trumps LG’s Ordinance: Currituck County v. Letendre

Months later, the Fourth Circuit looked to resolve a difference of statutory definitions between State law and a County’s zoning ordinance as it pertained to the construction of a beach front vacation home. Detailing the dense (and lengthy) procedural history of the case, the Court in Letendre⁵ struck down a County’s definition of “building” to the extent it was inconsistent with the North Carolina Building code’s definition.

Prior to the Fourth Circuit opinion, the North Carolina Court of Appeals had found that the property owner’s home construction was made up of three buildings and not one as required by the “single-family dwelling” zoning definition. As a result, the current construction violated the County’s ordinance. Simultaneously, on appeal of an insurance determination, the N.C. Building Code Council had determined the construction was a “one and two family dwelling” as defined by the North Carolina Residence Code. The two determination clearly contradicted one another.

While on appeal, the General Assembly passed the 160D overhaul to the state’s zoning laws, which specifically said LGs could not use a definition of “building” or “dwelling” that was inconsistent with any definition of the same under another statute or rule adopted by a State agency, including the State Building Code.

Based on that legislative amendment, the Fourth Circuit reasoned that the 160D statutory changes had abrogated the previous State Court of Appeals decision and found the Building Code Council’s definition applied to the property owner’s home construction—essentially striking down the County’s zoning determination and effectively vacating the prior state appellate decision.

The Court noted (but did not address) the retroactive application of the 160D changes, which may have altered the outcome in this case, however the County did not raise that issue on appeal.

Racial epithet is not “just cause” for termination: Ayers v. Currituck County Dep’t of Soc. Servs.

Currituck County had its share of appellate attention this year, appearing before the Fourth Circuit and the State Court Appeals (twice). Once on the County’s impermissible expenditures of its occupancy tax⁶, which is a good opinion on tax-payer standing but not addressed in this Article, and again in Ayers v. Currituck County Dep’t of Soc. Servs⁷.

In Ayers, the County DSS Director fired a DSS Supervisor for writing “NR” on an applicant’s paperwork after the Supervisor explained that the denotation stood for a racially derogatory remark and then laughed about it. The Supervisor appealed her termination, which ultimately ended up before the Court of Appeals.

Preliminary, it is important to understand that within county government there are some employees that are dual status employees meaning they are both county employees and agents of various State government agencies. The prime example of these types of dual status employees are those that work in a County’s Department of Social Services (“DSS”).

By virtue of their dual status, these types of employees are subject to the State Human Resources Act (“SHA”), meaning they may only be disciplined for just cause. N.C.G.S. § 126-34.02. With no clear litmus test of “just cause,” the Court employs a flexible concept, embodying notions of equity and fairness.

Now, in Ayers, the Court held that while the use of a racial epithet was wrong and harmful to the County, the use of the epithet itself was not “just cause” under the SHA for terminating the Supervisor. The Court looked to five factors: (1) the severity of the violation; (2) the subject matter involved; (3) the resulting harm; (4) the employee’s work history; and (5) the discipline imposed in other cases involving similarly violations.

After a fact-intensive inquiry into each factor, the Court did not believe the County DSS met it burden for termination but rationalized a lesser punishment would have been more appropriate. In her dissent, Judge Collins pointed out the potential liability to the County for a potentially fostering an abusive working environment had the Supervisor not been disciplined nudges the first three factors in favor of a “just cause” determination.

The County DSS has appealed the split decision to the Supreme Court.

Business regulations & Fruits of Labor (and Equal Protection?): North Carolina Bar & Tavern Ass’n v. Cooper

The same month as Ayers, the Court of Appeals struck down as unconstitutional Governor Cooper’s COVID-19 related executive order closing down bars but not bars in restaurant during the pandemic.

In North Carolina Bar & Tavern Ass’n⁸, the Court found the Governor’s distinction between bars and bars in restaurants was arbitrary and unreasonable, lacking a legitimate scientific basis. As a result, the Order violated the Fruits of Labor clause of the State constitution.

The Court then went on to analyze the Order under the State Constitution’s Equal Protection provision. In doing so, the Court explained that the Order affected the fundamental right of businesses to enjoy the fruits of their own labor and struck down the order under strict scrutiny. The Court reasoned the distinction was underinclusive for not allowing bars to reopen during the same phase as bars in restaurants.

As our courts have been more inclined in recent years to extend the Fruits of Labor provision in striking down business regulations⁹, this decision is the first time the Court has identified the Fruits of Labor provision as a fundamental right implicating the strict scrutiny analysis under the separate, equal protection constitutional provision. This is even more likely given a similar case, Howell v. Cooper (finding an Executive Order closing bars during the pandemic to violate the Fruits of Labor provision) is on review by the State Supreme Court.¹⁰

This could pose severe issues to LGs in passing ordinances regulating businesses; however, the N.C. Bar & Tavern Ass’n decision is on appeal to the State Supreme Court, which has diverging stances on the application of the Fruits of Labor provision (having just recently un published a Court of Appeals decision related to the provision’s applicability to LG employment policies).¹¹ It also remains unclear how much of the legal analysis in these cases rests on the Fruits of Labor jurisprudence versus differing political views on the COVID-19 lock-down restrictions—so stay tuned.

Governmental Immunity Conundrum: Estate of Graham v. Lambert

Governmental immunity is the popular refrain of LG defense attorneys everywhere (much to the Plaintiff’s bar’s chagrin). However, the interplay between governmental immunity, public official immunity, waiver, and preservation can be a minefield of legal doctrine—as evidenced in the Supreme Court’s recent case of Estate of Graham.¹²

There, a police officer hit a pedestrian with his cruiser while the officer was responding to a domestic violence call without his lights and sirens activated. The Estate sued the City and Officer for negligence and gross negligence, and the City unsuccessfully moved to dismiss the Complaint on immunity grounds. After discovery, the City then moved for summary judgment on the same grounds.

In a split decision, the Court of Appeals conflated the motion to dismiss and summary judgment standards in addressing the City’s denial of summary judgment. The Court of Appeals found that the Estate had adequately plead a waiver of governmental immunity through the purchase of liability insurance and, thus, immunity was waived for the purposes of summary judgment. However, the Court of Appeals granted summary judgment for the City and the Officer on the grounds that there was no genuine issue of material of fact as to the Officer’s gross negligence, alleviating liability against the Officer and his employer, the City.

The Supreme Court reversed, pointing out that the Court of Appeals had confused the 12(b)(6) and summary judgment standards on the waiver of immunity issue and instructed the Court to reconsider whether the City had, in fact, waived immunity through the purchase of insurance.

Despite the City’s offer of proof that no insurance existed, the Supreme Court instructed the lower court to consider whether the Estate had sufficient evidence to raise a genuine factual dispute as to the City’s waiver of immunity.

The Supreme Court further rejected the Estate’s argument that N.C.G.S. § 20-145 (when speed limit not applicable) created a statutory waiver of governmental immunity because the statute contemplates personal liability of “the driver” of a vehicle and does not contain clear language withdrawing the City’s immunity.

Cost of red-light regime doesn’t violate Fines and Forfeitures Clause: Fearrington v. City of Greenville

Although most of the 2024 LG appellate decisions to date have hand-slapped LGs, the Supreme Court did offer a brief reprieve from the judicial rebukes by upholding the City of Greenville’s red-light ticket program as constitutional.

In Fearrington,¹³ the City had an interlocal agreement with the County Board of Education whereby the City would remit 100% of the proceeds from red-light tickets to the School Board but would then invoice the Board for the cost of operating the program (roughly 18% of the proceeds initially remitted).

Despite the net proceeds to the Board only amounting to 72%, the Court found that the program aligned with the core purposes of the State Constitution’s Fines and Forfeitures clause and that the interlocal agreement rested on valuable consideration, providing the School Board with a revenue stream it would not otherwise have. Thus, the Court upheld the City’s ticketing program. Despite the affirmation, Justice Berger offered a scathing (and at times humorous) dissent to the majority’s opinion.

In sum, the last six months have provided a wealth of appellate decisions for LG attorneys to consider whether defending LGs or advising them generally, and this Article is only intended to provide brief vignettes of the decisions handed down thus far.

______________________________

¹Trey is an associate attorney at Sumrell Sugg, P.A. in New Bern, focusing his practice on local government defense. In addition to representing LGs in litigation, he works with a number of LGs on a general counsel basis and has presented on topics related to LG liability, law enforcement legal updates, and state constitutional issues.

²Town of Forest City v. Florence Redevelopment Partners, LLC, 896 S.E.2d 653 (N.C. App. Jan. 2024).

³Myers v. Town of Plymouth, 135 N.C. App. 707, 522 S.E.2d 122 (1999).

⁴Town of La Grange v. Cnty. of Lenoir, 897 S.E.2d 121 (N.C. App. Jan. 2024).

⁵Currituck Cnty v. Letendre, 2024 U.S. App. LEXIS 11978; 102 F.4th 252 (4th Cir. May 2024).

⁶See Costanzo v. Currituck Cnty, 899 S.E.2d 569 (N.C. App. Mar. 2024).

⁷Ayers v. Currituck Cnty. Dep’t of Soc. Servs., 900 S.E.2d 381 (N.C. App. Apr. 2024).

⁸N.C. Bar and Tavern Ass’n. v. Cooper, COA22-725 (N.C. App. Apr. 2024).

⁹See, e.g. Howell v. Cooper, 290 N.C. App. 287 (2023), discr. rev. granted, No. 252A23 (May 30, 2024); Kinsley v. Acer Speedway Racing, Ltd., 284 N.C. App. 664 (2022); King v. Town of Chapel Hill, 367 N.C. 400 (2014).

¹⁰See Howell v. Cooper, 290 N.C. App. 287 (2023), discr. rev. granted, No. 252A23 (May 30, 2024).

¹¹Mole’ v. City of Durham, 384 N.C. 78 (2023).

¹²Est. of Graham v. Lambert, 385 N.C. 644 (Mar. 2024).

¹³Fearrington v. City of Greenville, No. 89PA22 (May 23, 2024).

FTC Announces Final Rule Banning Non-Compete Agreements

Lynette Pitt — Thu, 23 May 2024 16:10:58 GMT

by Derrick Foard, Ellis & Winters, LLP

As I wrote about last year for the NCADA’s Employment Law Practice Group (here), the non-compete agreement is quickly falling out of favor. At that time, we previewed the proposed rule by the FTC that would largely ban non-compete agreements.

On April 23, 2024, the final rule was announced. It bans all new non-compete agreements, and it largely invalidates existing non-competes. Existing non-competes for senior executives remain valid. To qualify as a senior executive, a worker must earn more than $151,164 annually and be in a policy-making position.

Read full article here.

Tick Tock – When Does the Statute of Limitations’ Clock Start for Breach of Contract Claims

Lynette Pitt — Thu, 25 Apr 2024 14:00:00 GMT

By: Robert Young and Trisha Barfield, Carruthers & Roth P.A., and Brye Meyer (an Elon Law Student Resident)

Practitioners have likely argued – the three-year statute of limitations for contract actions begins to run when the breach occurs. Seems simple and straightforward. But what happens if the discovery of the breach occurs outside of the three years after the breach occurred? The North Carolina Supreme Court clarified how these instances should be analyzed in its 2021 decision, Chisum v. Campagna.

In that case, the North Carolina Supreme Court made it clear that “. . . a claim for breach of contract accrues when the plaintiff knew or should have known that the contract had been breached. . . .” Failing to consider this during the analysis, “. . . runs afoul of both our recent decisions, such as Christenbury, and basic notions of fairness.”

Despite there having been specific dates on which the Campagna brothers’ actions allegedly breached the Carolina Coast operating agreement and the trial court directing a verdict in favor of the Campagna brothers on that issue, Chisum was nevertheless able to reach the jury on remand for a new trial. The Court remanded on this issue because there was also evidence that supported a determination that Chisum’s discovery of the breach occurred several years later after the breach actually occurred.

While the “discovery rule” is not a new concept for personal injury or property damage claims, where the statute expressly provides for such; and, it is not necessarily a new concept for breach of contract claims, the Campagna Court acknowledged that “a number of our prior decisions have been somewhat opaque in addressing the issue that is before us in this case.”

A practice tip to possibly avoid losing a statute of limitations defense may be to advise clients to add language to their contracts that either limit the statute of limitations period or that specifically exclude the discovery of the breach as being a consideration for determining whether the claim is time-barred or not.

Finally, before you find yourself making a knee-jerk argument that your opposing party’s claim is time-barred solely based on the dates of breach and filing of the lawsuit, take care to review the Chisum case.

The Big Chill: HVAC's Cool Your House and a Nuclear Power Plant

Lynette Pitt — Wed, 24 Apr 2024 19:18:29 GMT

by Kevin Departhy, P.E.

Like the name suggests, HVAC systems are responsible for the heating, cooling, and filtering of the air in our residential, commercial, and industrial facilities. However, they also largely impact the temperature, moisture levels, and air pressure within these spaces, contributing to not only the perceived comfort in our homes and businesses but also the stability of environments where continuous human occupancy is not expected. The proper functioning of HVAC systems can significantly impact the longevity of the mechanical and electrical equipment operating in spaces such as equipment rooms, server rooms, and nuclear power plants which require unique and controlled conditions for optimal and safe operations. Understanding the fundamental science behind how these systems operate will help to explain why HVAC systems can be so complex.

We have all experienced the cool blast of air conditioning as we retreat indoors to escape the blistering heat of a summer day, but what if I told you that HVAC systems are actually responsible for the movement of heat? Let’s break down the principles of thermodynamics and physics which govern our HVAC systems. A fundamental principle of thermodynamics is that heat is transferred from higher-temperature bodies to lower-temperature bodies. This movement occurs spontaneously, meaning that heat moves in a direction from “high” to “low” on its own and without assistance. For example, when you hold a carton of ice cream in your hand and it feels “cold,” what you are feeling is the heat leaving your skin and flowing to that carton of ice cream. The comfort of our indoor environments is dependent on this principle of heat transfer. ASHRAE’s Fundamentals handbook indicates that acceptable human comfort zones can vary depending on factors like season and clothing, but generally speaking, most people prefer indoor air temperatures to be between 68°F and 80°F.

Our comfort is not only dependent on the “heat” in our environment, but also the amount of water in the air. Psychrometrics is the study of the interaction and effects of moisture, or humidity, in the air and is often studied by engineers seeking to improve our HVAC systems. The fascinating relationship between humidity and temperature can lead to an interesting event in which water can change phases from liquid to vapor without a change in temperature in the environment. An example of this relationship can be seen in how we cool our body temperature through perspiration. As we sweat, the water on our skin evaporates into the air, meaning that there is a phase change from liquid to vapor. This phase change releases heat which reduces our body temperature but increases the amount of water in the air. You may have noticed that it feels “hotter” in environments with higher humidity. That is because high humidity means there is already a high percentage of water in the air and the sweat on your skin cannot evaporate as readily. Our HVAC systems need to account for this relationship between humidity and temperature to maintain a balance in our indoor environments. Failures in these systems can cause vital mechanical systems to overheat or be destroyed by condensation and can result in human death or injury.

External conditions and weather events can negatively impact the operations of our HVAC systems. In late December, 2022, there was a prolonged cold front that reduced daily temperatures on the East Coast to be below 0°F for a long period of time. This resulted in the freezing of pipes and the failures of numerous piping systems across the state of North Carolina. My investigations into the failures of these systems were centered around determining whether the pipes were adequately protected from cold weather prior to the cold front by evaluating things like wall thickness, insulation R-value, temperature setting on the thermostat, outdoor air dampers, and a plethora of other protections. When investigating control system failures at industrial plants, a failure to regulate the temperature of the water that was being circulated in plastic piping systems led to the melting of the plastic pipes, flooding the entire plant and causing significant damages and delays to the operation.

Every year, residential spaces suffer from moist conditions and biological growth. If the HVAC unit is not sized correctly, the equipment may not be able to remove an adequate amount of humidity. This is a major function of residential equipment during the warmer seasons in the Southeast. Traditional thermostats sense temperature only and during the shoulder seasons like spring and autumn, indoor humidity can build while indoor temperatures stay moderate, preventing the thermostat from turning the system on. We have seen this scenario result in biological growth and rot on interior and exterior walls.

How many times have you tried to open a door to a restaurant, but the door pulls back and doesn’t want to open easily? The resistive door can be connected to an imbalance in airflow at the kitchen hoods that remove the grease-laden vapors coming off the cooking equipment. You may have also noticed a sewer smell, deterring you from finishing your meal or having a pleasant experience. Air exhausted out must be replaced, and when that doesn’t occur, negative pressure can build, pulling sewer gases through dried floor drains and ultimately pulling back on that entrance door and creating resistance. This failure can occur in aging or deteriorating HVAC systems and can be a much greater issue in places like healthcare and nuclear facilities where hazardous or contaminated air can pose a serious risk.

HVAC system performance can change depending on the time of year because most air-sourced equipment (e.g. chillers, condensers, economizers, etc.) operate as a function of the outdoor air temperature and humidity. Collecting data on the performance of an HVAC system may not be a one-site-visit affair and HVAC performance issues can sometimes warrant a more elaborate study of the conditions. This can be done by placing dataloggers in the equipment, and gathering data over time and multiple seasons.

In conclusion, HVAC systems are more complicated than they might appear. The proper functioning of these systems is crucial for the comfort and safety of human occupants, as well as the longevity of our infrastructure of mechanical equipment. Understanding the science behind these systems can help us appreciate their complexities and the importance of their maintenance and upkeep.

Sounding Out Community Noise Complaints

Lynette Pitt — Thu, 11 Apr 2024 15:30:00 GMT

Understanding the complexities of reported noise disturbances may require a multifaceted scientific approach

by Ryan Harne, Ph.D., P.E., FASME & Eric Ahlberg, Ph.D., P.E.

From construction sites to pickleball courts to traffic congestion, community noise complaints arising from everyday sources create concerns over the effect of noise on well-being and health, the loss of sleep and recovery, and adverse effects on the development of children.

For municipalities, construction companies, and other large-scale noise generators, it’s best practice to develop a comprehensive noise monitoring plan before launching sound-producing activities, especially given the rise of noise-detecting technologies and public awareness of the impacts of noise exposures. Smart cities are turning up the volume on noise complaints by installing cameras and sound meters to capture vehicle noise violations while apps like the Airnoise app allow residents to register airplane noise complaints with the click of a button.

Despite their best efforts, stakeholders — ranging from construction sites and flight path operators to schools and community recreation centers — may find themselves facing community noise complaints, which can carry the risk of litigation, reputation damage, and frayed public relations if not handled correctly. Determining the legitimacy of these noise complaints requires a suite of tools and a data-driven approach to analyze the alleged sources of the complaint, establish the significance of the disturbance, and predict community response while proactively working to prevent noise complaints in the future.

The varying human perception of noise

Analyzing noise complaints requires knowing what data to collect, but this is complicated by the fact that everyone perceives sound differently. An individual’s response to sound — or psychoacoustic perception of sound — varies based on cultural factors, sensitivity to noise, what they were doing at the time of exposure, and more.

For example, sources of noise such as football games, children’s recreation areas, and concerts often elicit very different responses from those nearby, ranging from fun and playful to a minor annoyance to the cause of significant disruption. In 2019, for instance, the volume of noise at Kentucky’s Bourbon & Beyond festival made headlines, but while some residents were angered, others described a very loud Foo Fighters set as a “nice lullaby” for their children. There’s also always the possibility that a noise-producing venture becomes a source of litigation: Northwestern University has recently been involved in a lawsuit related to its Ryan Field stadium and proposal to host summer concerts to help pay for the facility, which has been met with outrage from residents over the potential disturbances.

Predictive models play an essential role in analyzing community noise complaints because the complaint may be driven by a small number of highly annoyed residents.

Because people perceive sound differently, data from sound-level meters and laboratory microphones using essential acoustic metrics (e.g., A-weighted decibels expressed in units dBA or dB(A) and Zwicker parameters) is critical because it helps characterize how “noisy” a sound may have seemed to a particular group.

Measuring sound to quantify noise perceptions

As our ears and brains interpret sound differently, we hear some frequencies as louder than others. A-weighted decibel units (dBA) used to measure data from sound-level meter readings are designed to account for variations in the human perception of loudness by modifying the decibel (dB) reading according to how sensitive the average human ear is to different frequencies of sound (the A-weighting).

For example, a change in sound level of ±5 dBA is considered clearly noticeable, whereas people would categorize a change in sound level of ±10 dBA as twice or half as loud.

But if the sound level changes only by ±3 dBA, many people may not even notice the increase or decrease. As a result, an absolute change in sound level must be interpreted carefully in light of human perception variations.

While basic sound level meter readings provide important information about human perception through loudness measures, the time-dependent data collected by a laboratory microphone or an advanced sound level meter with data recording capabilities provides detailed insights, especially regarding annoyance. We can quantify how “annoying” a noise was by processing microphone pressure data for noise metrics known as Zwicker parameters, which include sharpness, fluctuation strength, and roughness.

For example, when Zwicker parameters show that the sharpness and roughness characteristics of a sound are especially high, they uncover particular insights, such as why a fingernail scratch on a blackboard might draw

cringes even when heard from a hundred feet away. Zwicker parameters also quantitatively explain why sirens and alarm clocks work well to alert people to critical information.

Putting community noise complaints in context

In addition to the human perception of sound, examining the human context of sound can help reveal how a community may have perceived a given sound:

When was the noise created? Was it during the workday when residents were away from their homes?
What produced the noise? Was the noise created by a diesel generator powering construction equipment all night long?
Was the noise impulsive and periodic in nature, like pickleball or pile-driving, or was it continuous, like an engine idling?
How long did the noise last: for a minute or for hours?
Where is the neighborhood? Is the community already exposed to other noise sources?

For instance, community noise complaints are often generated by noise sources that are not native to the community. This is why construction projects near neighborhoods, recreational activities adjacent to residential housing, and traffic near homes often generate noise complaints, whereas noisy lawnmowing in the morning and children who play and shout late into the evening often do not.

Consequently, if absolute sound levels from recordings suggests there is no cause for a noise concern, it is possible a community has risen up against an unfamiliar noise source that temporarily upset the acoustic norms of the community.

Gathering sound data

Knowing how to best collect data is as important as knowing what data to collect. Here are some best practices for gathering data about sound issues and noise complaints:

Know your codes:

Recording noise: Municipal codes often dictate how to record noise and often recommend the use of sound level meters to record a noise source in the community.
Distance from noise: While local codes may require measuring the sound level a certain distance from the noise source, community noise complaints often originate from a resident who is at a different distance from the noise. For example, the codes may require that construction companies monitor the sound level of their activities at a distance of 50 feet, but neighborhood complaints may be collected from residents hundreds of feet away from the construction. In other cases, sound may travel a shorter distance than codes indicate due to natural barriers obscuring the noise, such as hills, dense foliage, or other commercial and industrial buildings. As a result, it’s good practice to collect acoustic measurements not only from the required locations according to code but also from where the complaints originated.

Measure sound in real-time:

Continuous acoustic data: Because basic sound level meters often only save the overall sound level per increment of time, such as one-second increments, it’s wise to complement averaged sound-level meter readings with continuous acoustic data collected using traditional laboratory microphones or advanced sound level meters, which collect the actual sounds as heard in time. Stakeholders can use this real-time data to analyze the human perception-based characteristics of noise, including Zwicker parameters, that sound-level meters do not capture.

If your community noise complaint is delivered long after the noise has ceased, making it difficult to collect new acoustic recordings, it is possible to work with data collected during the noise-generating activities — or even to work with no acoustic data at all. For example, if a construction site only had vibration data to work with, that could be leveraged to confirm sound levels and model the likely propagation of sound over a specific distance.

Science meets psychology: interpreting community noise complaints

With sufficient data gathered — the contextual information about the noise generation along with the loudness recorded by sound level meters and lab microphones — we can assess the legitimacy of the complaint by building a predictive model to analyze community reaction to a given acoustic disturbance. These models account for the duration, location, frequency, and loudness of the noise, as well as the location of the community, to approximate the seriousness of potential community reactions.

Predictive models play an essential role in analyzing community noise complaints because the complaint may be driven by a small number of highly annoyed residents. It’s often best practice to de-escalate community reactions by acknowledging how the noise exposures may have affected their quality of life while interpreting such impacts considering the factual data.

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Reconstructing Reality in a Digital Sandbox

Lynette Pitt — Wed, 27 Mar 2024 12:30:00 GMT

Reconstructing Reality in a Digital Sandbox

by Charles A. Fox, Senior Director of Technology Services

Introduction:

The legal landscape is ever evolving and with it, the tools we use to present our cases. Buzz Lightyear’s iconic phrase, “To infinity and beyond!” may belong to the world of animation, but it also metaphorically represents the bounds we are pushing in legal visualizations. In our courtrooms, 3D animations have transitioned from novel to necessity, playing a pivotal role in elucidating complex facts for juries and judges in many cases. And this is not due to their entertainment value. Animations built on a solid foundation of data can accurately depict events in detailed ways not accessible via photos, security camera footage, or other forms of recording.

Advancements in technology have transformed these animations from illustrative to evidentiary. The 3D scans we employ today offer dimensional precision that allows technologists to build large scenes with millimeter precision. The proliferation of digital recordings from various sources—security cameras, dashcams, and smartphones—allows us to integrate this data into a 3D framework, crafting immersive and reliable reconstructions of events.

Modern 3D animation technology empowers the creation of scaled virtual worlds, testing grounds for hypotheses against the tangible reality of an incident site. This is not merely a theoretical exercise; it's a rigorous investigative process upheld by legal and technical experts to dissect and understand the dynamics of an event.

Gone are the days when 3D models were based on a handful of measurements and a dose of creativity. Today, we harness laser scanners and drones that capture millions of points that are used to define a precise 3D model of an accident scene. Accurately combined scene and object models are then used in an active recreation of an incident, incorporating the crucial element of time. These scenes allow for the analysis of vehicle paths, human movement, and operational machinery and can be further enhanced with environmental factors such as lighting and weather, crucial for understanding visibility and other conditions pertinent to an event.

Developing Visualizations in the Digital Sandbox:

“Visualization” is a broad term that encompasses the result of these investigatory tools. The digital sandbox is a real-time version of the data as it is accumulated. Using a computer, stakeholders interact with the relevant data points like a meticulous child would construct a scene in a sandbox. This allows stakeholders to layer in relevant information anchored by scene geometry and motion. Deliverables from the digital sandbox are often animations simply because the animation is portable, unchangeable, and is easily shared with other parties.

Phase 1: Data Gathering - Capturing the Scene

As an attorney, you know that reconstructing an event for the courtroom isn't just beneficial—it's often critical. The starting point is data collection that paints a detailed and accurate 3D picture of the incident's environment. Whether it's United States Geological Survey (USGS) data of landscapes, drone-captured images of an intersection, or laser scans of vehicles, each dataset is integral to understanding the environment and objects that led to a loss.

Scene Geometry: Created from various sources like USGS terrain data, survey data, and photogrammetry from drones or laser scanners such as FARO Focus or Leica RTC360.
Object Geometry: For vehicles or machinery, we might use manufacturer CAD data if available or 3D models verified with laser scanners.
Motion: Every object that moves in a scene does so in a specific way on a precise timeline. Video can be the gold standard when you know how to reintegrate it into a 3D environment and ensure accurate timing.

Incident data is perishable and immediate scanning of the scene ensures evidence preservation however, this is frequently not possible. We often rely on documentation like first responder photos and video recordings from security cameras that capture information at or near the time of the incident. This photographic and video evidence is invaluable when combined with scan data to reconstruct a virtual scene as it was at the time of the accident even when the laser scan data is captured well after the time of the event.

Phase 2: Analysis

Entering the Sandbox in Real-Time

A digital sandbox doesn't just show a scenario—it immerses you in it. Whether through a head-mounted display or on a computer screen, you're transported to the heart of the incident, able to view the scene from multiple angles, including the perspectives of involved parties. This virtual environment lets you assess the feasibility of witness statements, for example, examining potential obstructions to an eyewitness’s point of view.

Videogrammetry is used to align video within a 3D scene model and enables precise movement recreation. Software like HVE and PC Crash simulate ground vehicle motion and radar and GPS data are useful for aviation accidents. Video and simulation data ensure that by the time we reach trial, the animations presented are founded on accurate and verifiable data.

Critical data analysis is important for developing strong visuals and aligning your legal team. Thorough data collection significantly streamlines this process while taking shortcuts may lead to increased costs and delays. It’s important to secure relevant evidence early that will withstand judicial scrutiny and effectively support your case.

Case Overview: Landscaping Incident

A critical workplace injury occurred at a landscaping site. The individual sustained injuries after being crushed between a motorized concrete transport buggy and a dump truck's tailgate (Figure 1). The landscaper was engaged in the transfer of concrete debris using a skid loader that was stationed on the side of a roadway to load the demolished concrete into a dump truck. During the operational cycle, the buggy operator reversed the concrete buggy away from the loader and into the back of the dump truck, resulting in his upper torso pressing against the vehicle's tailgate. He was trapped in a position that caused his chest to press the safety lever that, when released, stopped the drive system on the buggy.

The reconstruction of the event was informed by two photographs secured by first responders, which became the crux of the spatial analysis (Figure 2). Because the laser scan was taken long after the accident, placing the scale vehicle models accurately within the scene was a challenge. Advanced laser scanning techniques and 3D models of the skid loader, truck, and buggy, augmented by the injured worker’s biometric profile, were utilized to reconstruct the scene. The precise positioning of the skid loader and dump truck, critical to understanding the dynamics of the accident, was extrapolated from the photographs, defining the operational environment that was unsuitably confined.

The 3D model also served as a blueprint for a physical model (Figure 3). This model was instrumental in physical testing to challenge the alleged failure of the buggy's safety mechanism. The tests illustrated the continuous engagement of the drive system when controlled force was applied using a physical surrogate, mimicking the incident conditions.

Case Overview: Urban Transit Incident Analysis

Video camera footage can be informative. Knowing the movements of vehicles, pedestrians, and other objects may explain why an accident occurred. However, it’s frequently not a good tool for determining visibility in nighttime conditions. Video cameras “see” differently in the dark than the human eye can. When a city bus struck and killed a pedestrian, a nighttime conspicuity analysis proved crucial to understanding the bus driver’s view.

The initial step in the reconstruction process involved capturing detailed survey quality data of the accident location using laser scanning to develop a precise 3D model. Concurrently, a detailed lighting analysis was executed, measuring luminosity from multiple sources which were then integrated into the 3D environmental model. This integration was critical in replicating the visual conditions during the incident and included stationary lights, like streetlights, and moving lights on vehicles (Figure 4).

Security camera footage from the bus supplied vital information regarding vehicle movements and pedestrian activity at the time of the accident. A visualization specialist utilized this data to accurately position light sources and animate the scene, enhancing the fidelity of the reconstruction.

Because the bus had a camera viewing the driver, a human factors expert's analysis contributed to the creation of a simulated driver's viewpoint. This virtual driver’s vantage point was critical in showing the driver's potential visual perception during the incident (Figure 5), helping the expert explain why the pedestrian was difficult to see in the background of the headlight glare from oncoming vehicles.

Phase 3: Decision Making

The integration of rapid data collection technologies into legal practice has revolutionized how digital environments are constructed and utilized. These digital sandboxes serve as dynamic tools where layers of information about an event are assembled in valuable ways. Sandboxes allow for the iteration of scenarios, advancing the investigative process by prompting discovery questions. What other useful data exists or could be collected? What should be asked in a deposition? Things learned in the sandbox also guide physical testing to eliminate uncertainties, such as the effect of sunlight on a dirty windshield's transparency.

Once the team has exhaustively analyzed and combined all available information, the reconstructed digital model becomes an educational platform. It translates complex scenarios into visual narratives—images and movies—that animate the event for those outside the investigative circle. These visual aids are instrumental in resolving cases, with the reconstructed reality playing an important role from early in the investigation until the dispute is resolved.

Digital sandboxes play a critical role in helping clients understand and evaluate evidence, which in turn informs their decision-making. These tools allow stakeholders, who may not be well-versed in legal details to better grasp the case strategy and determine the right course of action regarding settlements or trial proceedings.

Deciding to go to Trial:

If the case does not settle and the parties move forward to trial, visual storytelling can significantly enhance juror comprehension of complex information, tapping into the innate human proficiency for processing visual data. It can demystify expert testimony, replacing jargon with clear, impactful imagery. It’s important to remember that jurors will filter the story through their personal experiences, which can both aid in understanding familiar concepts and elicit skepticism towards information that conflicts with their beliefs. Furthermore, a coherent narrative is key; jurors will scrutinize any omissions or inconsistencies with a critical eye, as evidenced by the research of Pennington and Hastie (1992)¹. Therefore, visual aids are most compelling when they are part of a well-orchestrated narrative, enhancing and reinforcing expert testimony, especially when prepared in a digital sandbox.

For attorneys incorporating visual aids alongside expert testimonies, a comprehensive understanding of the trial environment is essential. Crafting a strategy that dovetails with the courtroom's technical capabilities is the responsibility of the attorney who brings the expert witness. Legal teams must address several key logistical questions:

What technology is available at the trial location?
Can you conduct a preliminary test of this technology to preempt trial hiccups?
Does the courtroom offer internet connectivity?
What contingency plans are in place for unforeseen technical glitches?
What is the judge's stance on the use of technology during proceedings?

Finally, make sure to consider the merits and drawbacks of advanced versus basic technological approaches (for example, equipping jurors with VR headsets versus displaying a video or live feed of the expert's VR demonstration on a screen).

Involving your visual expert early and developing themes in a digital sandbox environment can enhance the quality of visuals your team decides to bring to the courtroom. Such proactive collaboration ensures that the presentation is well-founded and informative, enabling the legal team and sponsoring expert to effectively use the visual products to communicate with the jury.

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¹Pennington, N. and Hastie, R. (1992). Explaining the Evidence: Tests of the Story Model for Juror Decision Making. Journal of Personality and Social Psychology, Vol. 62 (2), 189-206. DOI:10.1037/0022-3514.62.2.189

Guardrails and End Terminals: Enhancing Roadside Safety

Lynette Pitt — Tue, 26 Mar 2024 20:00:00 GMT

Guardrails and End Terminals: Enhancing Roadside Safety

by Mitchell Chermak
QForensics

Introduction
Guardrails play a crucial role in ensuring roadside safety by preventing vehicles from encountering roadside hazards such as rigid objects, steep slopes, cliffs, or bodies of water. These protective barriers are strategically placed along highways, bridges, and curves to minimize the severity of collisions. In this article, we’ll delve into the world of guardrails, with a specific focus on guardrail terminals—the critical components that mark the beginning or end of a guardrail system.

Guardrail Face: Redirecting Vehicles Safely

The guardrail face is the visible part of the barrier that faces the road. Its primary purpose is to redirect a vehicle back onto the roadway if it veers off course. Here are some key points about guardrail faces:

1. Composition: The most common guardrail design features galvanized steel w-beam panels that are lapped and connected with rigid splice bolts. Alternative designs include concrete barriers and cable barriers.

2. Considerations: There is no single “best” barrier system. Each has its own benefits and potential drawbacks that make it better suited to specific applications.

o Cable Barrier: High-tension Cable barrier is often the preferred choice in relatively wide medians or on roadsides where there is sufficient “safe space” beyond the barrier location. Cable barriers have the greatest dynamic deflection of the three most prominent barrier types and are thus more forgiving for the occupants of the impacting vehicle. While that behavior is desirable in locations that allow for it, many locations where barrier is installed feature hazards that are located just beyond the barrier.

o W-Beam Guardrail: W-beam guardrail is considered to be a semi-rigid barrier. It still allows for some dynamic deflection, thus reducing the impact forces exerted on occupants.

o Concrete Barrier: Concrete barrier is considered to be a rigid barrier. It has essentially no dynamic deflection (except for precast, temporary barriers, which can move somewhat when struck). This makes concrete barriers the least forgiving for the occupants of an impacting vehicle, but also the only option for many situations where no room for dynamic deflection exists because the hazard is located immediately beyond the barrier.

End Terminals: Absorbing Kinetic Energy

While guardrails are meant to protect drivers from roadside hazards, they themselves can become a hazard, especially at the end, where the guardrail is secured with a rigid anchor, and the narrow, relatively sharp end of the guardrail is exposed to impacting vehicles. Guardrail terminals are the critical components at the beginning and end of a guardrail system, particularly those located within the clear zone for approaching traffic. Their purpose is to anchor the guardrail for redirectional impacts while minimizing the severity of a direct impact. Let’s explore end terminals in more detail:

1. Energy-Absorbing Guardrail Terminals:

o These designs utilize various means to dissipate energy, gradually decelerating an impacting vehicle. This is most commonly achieved by extruding the guardrail through an impact head that kinks, cuts, or crushes the guardrail as it passes through the impact head.

2. Gating End Terminals:

o Gating end terminals are designed to give and allow a vehicle to pass if struck near the end. Gating terminals are designed to function as a redirective barrier after a specific distance from the end.

Crashworthiness Testing

Guardrail systems undergo rigorous crash tests to assess their performance. These tests simulate real-world collisions and evaluate factors such as occupant safety, vehicle redirection, and structural integrity. The results guide improvements in guardrail design and installation practices.

Global Safety Standards

Several safety standards govern guardrail design and installation worldwide. Notable ones include:

1. NCHRP Report 350:

o The crash testing standards described in Report 350 were superseded by the Manual for Assessing Safety Hardware (MASH), but are still applicable for many existing installations, depending on the installation date.

2. AASHTO MASH:

o Developed by the American Association of State Highway and Transportation Officials (AASHTO), MASH provides guidelines for crashworthy guardrail systems.

o MASH is the current crash test standard for safety hardware used on new construction in the U.S.

3. EN 1317 (European Standard):

o EN 1317 outlines requirements for road restraint systems in Europe.

o It covers various performance levels and impact scenarios.

Legal Liability in Guardrail and End Terminal Impacts

When functioning properly, guardrails redirect vehicles and lessen the severity of collisions with rigid objects and other roadside hazards. Similarly, end terminals protect drivers and save lives by preventing the blunt and relatively sharp guardrail end from impaling an impacting vehicle. However, design defects, improper installations, and improper placement can sometimes yield devastating results.

Design

Although the crash test standards referred to above are generally quite effective at keeping dangerous or inadequate designs off public roadways, changes to design parameters after testing or selective reporting of biased crash test samples can lead to the installation of inferior products. While occasional negative crash outcomes are unavoidable due to the unpredictable nature of roadway departures and high variability in impact conditions, it is important to consider the potential reasons behind a severe crash outcome. What type of guardrail terminal was hit? Does that terminal have any known issues or prior litigation associated with it? What are those issues, and are they applicable to the present crash? Was the terminal installed properly? Were the impact conditions within typical limits, such that acceptable performance could be reasonably expected? All of these questions and more can help shed some light on whether severe or fatal injuries resulting from a guardrail or terminal impact were exacerbated by dangerous conditions hidden in the device itself.

Installation/Placement

In addition to deficiencies in the guardrail design, issues with location, installation, maintenance, and repair can also expose drivers to hazardous conditions. In many cases, the entity responsible for maintenance and repair may not be immediately evident. It may be necessary to obtain discovery documents to determine if a government agency or a private contractor is responsible for guardrail maintenance and repair in that particular area. It is not uncommon for a state DOT to enter into an agreement with a private contractor to maintain and repair guardrail in a particular region, defined within the contract. The contract should also specify whether the contractor is responsible for inspecting the guardrail at certain intervals, or whether they are responsible only for repairs after they have been notified of the work needed. In any case, due to the high risk of having a damaged and unsafe guardrail located alongside a traveled roadway, many states have standards regarding the procedures and timelines for repair.

The installation of a roadside or median barrier is initiated either by satisfying one or more warrants or through an engineering study that considers multiple factors and determines a guardrail installation to be appropriate. These warrants are typically described in the roadway or roadside design manual for the state in which the roadway and guardrail installation are located. There is also national guidance provided on the subject by the AASHTO Roadside Design Guide. In many cases, the absence of a guardrail that is clearly warranted could leave the state DOT, the roadway project design engineer, or even the contractor, liable for accidents resulting from the absence of a barrier that should have been provided based on relevant design standards. Standards based on the type of roadside hazard, the distance to the roadside hazard, median width, and other factors, are typically presented as definitive, and well-defined criteria that render a guardrail either required, recommended, or optional. Other criteria, such as crash history and roadway curvature typically require a more detailed engineering analysis to draw definitive conclusions on whether a guardrail installation is warranted.

Conclusion

Guardrails, along with their end terminals, are unsung heroes of roadside safety. By redirecting vehicles and reducing crash severity, they provide the potential for saving lives and preventing catastrophic accidents. As we continue to improve our transportation infrastructure, let’s appreciate the silent guardians that keep us safe on the roads, while also remaining vigilant to root out dangerous conditions present in some guardrail installations even today.

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Note: the infomration provided in this article is based on industry standards and practices. Always follow local guidelines and regulations when designing, installing, or maintaining guardrail systems.

About the Author:
Mitchell Chermak is a Mechanical Engineer with Quality Forensic Engineering. He specializes in accident reconstruction and forensic engineering research and analysis. In over five years of reconstructing vehicle accidents, he has analyzed many cases involving roadside safety and guardrail design, installation and performance.

Legislature Passes Significant Changes to Uninsured and Underinsured Motorist Law

Lynette Pitt — Thu, 08 Feb 2024 19:25:54 GMT

By Allen C. Smith, Brooks P. Miller, and Julianna Grant, Hedrick Gardner Kincheloe & Garofalo, LLP and Austin R. Walsh, Johnston, Allison & Hord, P.A.

On September 22, 2023, Senate Bill 452, An Act to Make Various Changes to the Insurance Laws of North Carolina, to Amend the Insurance Rate-Making Laws, and To Revise High School Interscholastic Athletics, was presented to Governor Roy Cooper for signature. Because Governor Cooper took no action, SB 452 was codified as Session Law 2023-133 (S.L. 2023-133) on October 3, 2023. In addition to prohibiting male students from participating in female athletics, S.L. 2023-133 includes sweeping changes to liability, uninsured motorist (UM), and underinsured motorist (UIM) coverage in auto liability policies through amendments to N.C. Gen. Stat. § 20-279.21. The changes to UM and UIM coverage go into effect on January 1, 2025.

Specifically, the minimum automobile liability policy limits will increase from $30,000 to $50,000. Additionally, S.L. 2023-133 amends N.C. Gen. Stat. § 20-279.21 regarding the rules for service of process on UM insurers outside of the statute of limitations, the definition of an underinsured vehicle, and the calculation of a UIM insurer’s liability.

Uninsured Motorist Coverage

Before S.L. 2023-133, plaintiffs were required to serve a summons and complaint on uninsured motorist (UM) carriers within the statute of limitations. Nearly 50 years ago, the North Carolina Supreme Court established that this requirement was “consistent with the objective of uninsured motorist coverage of placing the insured in the same position as he would have been had the adverse motorist been insured.” Brown v. Lumbermens Mut. Cas. Co., 258 N.C. 313, 319, 204 S.E.2d 829, 833 (1974) (internal citations omitted). The service requirement was plainly stated by the Court of Appeals in Thomas v. Washington: “Failure of insured to serve [a] copy of the [the] summons and complaint on insurer within [the] applicable limitations period [precludes] … recovery under [a] UM policy.” 136 N.C. App. 750, 525 S.E.2d 839 (2000). If a plaintiff failed to serve the Summons and Complaint on a UM carrier within the statute of limitations, the UM claim was subject to dismissal. See Davis v. Urquiza, 233 N.C. App. 462, 757 S.E.2d 327 (2014). The statute of limitations could not be satisfied by mere notice; formal service of process was required to withstand a motion to dismiss. See Id.

Session Law 2023-133

The new language in S.L. 2023-133 states:

The insurer may also be issued a summons, complaint, or other process as an unnamed party and served by registered or certified mail, return receipt requested, or any manner provided by law. Service outside the statute of limitations shall be valid so long as the summons has been properly issued, preserved, and served pursuant to North Carolina Rule of Civil Procedure 4.

S.L. 2023-133(b)(3)(A) (emphasis added). This legislative change overturns 50 years of precedent. Now, a plaintiff may fail to serve the UM carrier within the statute of limitations for the tort action at issue as long as the summons and complaint are filed within the statute of limitations and the summons does not expire prior to service. This will place UM carriers in the same position as tort defendants with regard to statutes of limitations and removes a significant procedural defense.

Underinsured Motorist Coverage

S.L. 2023-133, Section 12(b)(4) amends the method for calculating a UIM carrier’s exposure. Currently, NC Gen. Stat. Section 20-279.21 reduces UIM coverage limits by a tort-feasor’s liability policy limits. For example, if a tort-feasor has policy limits of $50,000 per person / $100,000 per accident and a plaintiff has UIM limits of $50,000, the UIM carrier would have no exposure. UIM carriers will no longer reduce the amount of available coverage by the liability policy. Under the amendment, UIM carriers are now fully exposed up to their policy limits. In the above example, a plaintiff will receive the benefit $100,000 of insurance coverage having only paid for $50,000 of coverage. These changes will also result in increased defense costs for carriers, who will remain exposed in matters where they were previously dismissed as a matter of course.

Section 12(b)(4) also changes the definition of an underinsured vehicle. Presently, an underinsured vehicle is defined as “a highway vehicle with respect to the ownership, maintenance, or use of which, the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the applicable limits of underinsured motorist coverage for the vehicle involved in the accident and insured under the owner's policy.” N.C. Gen. Stat. § 20-279.21(b)(4). When two or more injured persons pursue claims, “a highway vehicle will also be an ‘underinsured highway vehicle’ if the total amount actually paid to that person under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the applicable limits of underinsured motorist coverage for the vehicle involved in the accident and insured under the owner's policy.” Id.

As of January 1, 2025, section (b)(4) will provide that an underinsured vehicle is any vehicle for which policy limits are less than “the total damages sustained by an individual seeking payment of benefits[.]” See S.L. 2023-133(b)(4). Before a claim is reduced to a judgment, personal injury damages are variable and subject to hard-to-value general damages (e.g., pain and suffering). Because UIM carriers will have less certainty whether a tortfeasor’s vehicle is underinsured, carriers are likely to incur increased defense costs closely monitoring a claim.

The ramifications of S.L. 2023-133 will hit insurance carriers and insureds alike. Each change to N.C. Gen. Stat. § 20-279.21 increases UM and UIM insurers’ risk and exposure. It is likely this increased risk will be passed on to the citizens of North Carolina in the form of higher insurance premiums. The legislature’s intention, whether at the behest of plaintiffs’ attorneys or not, was to increase the recovery for injured parties. The ultimate cost remains to be seen.

This article provided by the General Liability Practice Group

Conversation with a Pair of Mentors

Lynette Pitt — Mon, 22 Jan 2024 19:00:00 GMT

By: Louis J. “Johny” Hallow, III

As a young attorney, I am blessed to work in a firm with several mentors. In this piece, I speak with two of my personal mentors, Phil Hornthal and Don Prentiss, about their advice for young attorneys. Phil and Don are both long-standing partners at Hornthal, Riley, Ellis & Maland, LLP, in Elizabeth City, North Carolina. Phil and Don have both practiced law for more than thirty years, and have been heavily involved with a number of North Carolina Bar organizations, including the North Carolina Association of Defense Attorneys. Both Phil and Don focus on insurance defense, mediation, and general civil litigation.

What was the best advice you were given as a young lawyer?

Hornthal: One of the best pieces of advice I received as a young lawyer came from Dan Hartzog: “Do it now.” Whether you have an email you need to respond to or a pleading you need to file, do it now. If you procrastinate, you have a much higher chance of forgetting your task and falling behind.

Prentiss: When I first started practicing law, a lawyer on the other side of a case I had asked for an extension of time. I wanted to give him a hard time about it, but the senior partner at the time, Dewey Wells, pulled me aside and told me: “The practice of law floats on a sea of accommodation.” That piece of advice has always stuck with me. It is important to always try to get along with other lawyers until they give you a reason not to.

What do you believe is the appropriate work-life balance for a young attorney?

Hornthal: I think this varies for all young attorneys, especially with the current generation of young attorneys. These days, there appears to be a trend that young attorneys are more interested in maintaining a work-life balance and spending time outside of the office as opposed to earning high salaries. But for all attorneys, especially young attorneys, it is important to maintain a work-life balance to avoid burn out. I think it is important for all attorneys to have some type of hobby that they can engage in to spend some time away from work.

Prentiss: That is an interesting question. If you had done this survey twenty-five years ago, you never would have heard that question. But, I think older lawyers are likely wrong about not giving work-life balance more attention. It is important to work hard early in your career to establish a reputation. It is important also to spend time with your family and friends and have a work-life balance. With that said, all attorneys need to work hard and put the necessary time in to become a good lawyer.

What advice do you have for a young attorney who is feeling overwhelmed with their caseload?

Hornthal: Seek help from a mentor. One of the worst things an overwhelmed young attorney can do is let the pressure build up and never seek help from a mentor. Having a good mentor—whether it is in the attorney’s own firm or another firm—is essential for a young attorney. When overwhelmed, a young attorney can seek advice from a more experienced attorney about how to sort through their various assignments and stay on track.

Prentiss: Talk with someone, whether it is a partner in your firm or a mentor. I believe mentoring is critical, especially for young lawyers. The willingness to ask for help is the most beneficial thing a young attorney can do when overwhelmed.

Do you think it is important for young attorneys to be involved in organizations outside of the legal profession, whether it is a kickball league or the board of a local nonprofit organization?

Hornthal: Absolutely. This point ties into the question regarding a work-life balance. If a young attorney is involved in local non-profit organizations and other activities outside of the practice of law, it gives the young attorney an opportunity to step away from the legal field and interact with people in their community. This not only leads to an improvement in mental health, but also helps with client development.

Prentiss: Absolutely. Whether it is a big firm or small firm, all attorneys need to give back to the community. I think young lawyers should get involved with different bar organizations and within their own communities. There are numerous opportunities for young lawyers to get involved in their communities, and that is something that can really help with developing a work-life balance.

We often hear the term jack of all trades, master of none. Do you think young attorneys are better served focusing on mastering a few select practice areas, or should young attorneys be willing to take on unfamiliar subject matters?

Hornthal: I think there are pros and cons to both. On one hand, some attorneys may feel more comfortable mastering a few select practice areas and staying within those bounds for their entire career. This is especially true in larger firms. On the other hand, I also think young attorneys should be willing to take on unfamiliar subject matters. In my view, stepping outside of your comfort zone is one of the best ways that a young attorney can develop and learn. Often times, if a young attorney takes on unfamiliar subject matters, he or she will learn things along the way that will help in familiar subject matters.

Prentiss: The latter. Too many people come out of law school and are too focused on a specific practice area. To develop as a lawyer, you need to have exposure to a variety of practice areas. This is especially true early in one’s career. If you are a litigation attorney, for example, you should be willing to go to small claims court, attend depositions, take on trials against pro se litigants, etc. Also, by engaging in a wide variety of matters, young attorneys will have a better idea of what practice areas they want to specialize in as their careers develop.

What is one thing you know now that you wish you knew when you first started practicing law?

Hornthal: A bad result in a case is not always a bad thing. Often times, a bad result comes from a good learning experience. There will be cases that present a number of problems; but as long as you can give the client the pros and cons of trying the case, and feel confident in giving that advice, it is worth trying the case, even if you are likely to have a bad result, as long as the client understands and accepts the risk.

Prentiss: There are several things here. But, if I had to narrow it down to one piece of advice, I would say that procrastination is your enemy. I have been practicing law for almost forty years, and I still struggle with procrastination. When you procrastinate, you often find yourself scrambling at the last minute and trying to put out a fire. I know this sounds like common sense, but it is something that you do not appreciate until you procrastinate and find yourself in a tough situation.

What trial tips do you have for young attorneys?

Hornthal: Overprepare. It is always better to be overprepared than underprepared. The last thing you want to do as a young attorney is walk into a courtroom feeling unprepared. If you are overprepared, you will be able to focus on the different elements of a trial and the potential problems in your case as opposed to the mere fact that you are underprepared.

Prentiss: You need to know your case inside and out. It is important to think about what can go wrong. If you know your case well enough, you will have a sense of what opposing counsel will try to accomplish at trial. You do not want to think about these things in the middle of the trial. On the contrary, you want to have thought about this before trial so that you can comfortably address any problems during the trial.

How should a young attorney prepare for their first trial?

Hornthal: Again, a young attorney should always overprepare for a trial. A young attorney should also seek advice from a more experienced attorney in preparing to try a case, regardless of whether the young lawyer is a solo practitioner or works in a law firm with several seasoned attorneys.

Prentiss: Pick a theme and pound it. You should focus on hitting the theme in jury selection, the opening statement, direct examination, cross examination, and the closing argument. You want to have a good theme that you can weave into all elements of your case.

What mediation tips do you have for young attorneys?

Hornthal: Be patient. I have handled several mediations both as the mediator, and as a party subject to the mediation. One thing I never realized until I served as a mediator is that you never know what is happening in the other room. So, if a mediation begins and the parties are on complete opposite ends of the spectrum, remember to be patient and let the mediator do his or her job. I also think it is important for a young lawyer to be overprepared for a mediation. Not too many cases are tried these days, and more often than not, the mediation is the place to resolve the lawsuit. Given that the mediation may be the final step in the process more often than not, a young lawyer needs to know the case inside and out and be fully prepared.

Prentiss: From the perspective of a defense lawyer, know that most lawyers on the other side of your case in the mediation do not want to try the case. You can often settle cases for a lower amount than you think because the lawyer on the other side does not want to try the case.

Is it helpful to start with a reasonable response to an opening demand in mediation, or should a young attorney start with a low offer?

Hornthal: I have always had more success starting with a reasonable response. In my experience, I have found that low offers often lead to a waste of time, and as a result, a waste of the client’s money. The purpose of the mediation is to resolve the case, so I see no reason why the parties shouldn’t come in with reasonable offers in attempt to reach a resolution. I know several attorneys that prefer to start with a low offer, and I understand why they do so to a certain extent, but I have always had more success starting with a reasonable offer.

Prentiss: As a lawyer and a mediator, it depends on the demand. It is frustrating when the other side does not know what the insurance limits are, or if the other side comes in with a demand that exceeds the limits. But if you get a reasonable demand, you want to respond with a reasonable offer. This will avoid wasting everyone’s time and money.

What deposition tips do you have for young attorneys?

Hornthal: Like with mediation, be patient. Additionally, I think it is important to really listen to the witness. While I believe it is beneficial for all lawyers, especially young lawyers, to prepare a list of questions for the witness, it is equally important to listen to the witness as you ask the questions. Often times, by listening to the witness, you will think of questions you did not consider before the deposition began and can force the witness to expand on important topics that you may not have thought of in advance.

Prentiss: Give the deponent a chance to talk. I find too often that the questioning lawyer spends too much time talking and asking closed ended questions. This often leads to a lack of information at the end of the deposition. I think attorneys should focus on asking open-ended questions and giving the deponent a chance to talk. I also suggest thinking about what documents you want to use in the deposition. If you have favorable documents, you may want to use those to force the witness to admit certain facts.

What is your strategy with introducing documents in depositions? Do you prefer using several documents as exhibits, or do you try to limit your use of documents?

Hornthal: I usually avoid the overuse of exhibits during depositions. This is partially because it is easier to actively listen to a witness speak without having to worry about introducing certain documents and keeping them organized. Of course, there are several instances where I use exhibits to force witnesses to admit certain facts that I will want to introduce at trial, such as the position and condition of an automobile in a negligence case. But unless there are specific reasons to introduce certain exhibits, I typically focus on making sure that I am listening to the witness’s testimony. When you are worrying about where your documents are and whether you have introduced them in the correct order, you often times are missing opportunities to hear what the witness is saying and see how they are physically responding when prompted by your questions.

Prentiss: I think this is something I deal with on a case-by-case basis. From my practice, which has been heavily personal injury defense oriented, I do not think you should be afraid to introduce documents, especially medial records. For example, if a deponent admits they told a doctor that they felt okay on a certain visit, the attorney can cross-examine the witness on that statement while at trial without having to deal with introducing the medical records from the visit.

What are the most common mistakes you see young attorneys make, and how can those mistakes be avoided?

Hornthal: The most common mistake I see young attorneys make these days is having a sense of entitlement. Some young lawyers these days feel that, because they went through law school, passed the bar exam, and became lawyers, they are entitled to certain things in life and in the practice of law. This sense of entitlement often leads to laziness, a lack of preparation, and poor treatment of clients and other lawyers. I think it is important for young lawyers to remember that they are, in fact, young lawyers; and that the practice of law is a privilege.

Prentiss: First, I see several young attorneys asking questions of their own questions in a deposition. Most of the time, this is counterproductive. It is okay to clarify the record; but too often I see lawyers asking questions of their own clients, which leads to additional information coming out of the witness that may be harmful to the case. This also gives the opposing attorney an opportunity to cross examine the witness a second time on the newly released information. The second common pitfall I see with young attorneys is failing to calendar their deadlines. I recommend that all attorneys create their own scheduling orders or deadlines, even if there are no formal orders or deadlines involved in the case.

What has impressed you the most about the young attorneys that you have come into contact with?

Hornthal: I am always impressed with a young attorney that has a strong work ethic. As mentioned earlier, there are several young lawyers that have a sense of entitlement and do not work as hard as they should. If a young lawyer has a strong work ethic, that work ethic will lead to better work product, more clients, and better case results.

Prentiss: Older lawyers tend to be more obsessed with the practice of law and it becomes their entire life. Younger lawyers seem to have a better feel for work-life balance and quality of life. The practice of law is your profession, not your life; and it should not dominate your life.

What tips do you have for young attorneys that want to continue to advance professionally?

Hornthal: Do not be afraid to try something new; and do not be afraid to reach out to a mentor about advancing professionally. That goes for both solo practitioners and young attorneys that work in firm settings. If a young attorney wants to advance professionally, there are several opportunities to do so. There are also several more seasoned attorneys that are willing to help develop young attorneys.

Prentiss: I suggest that young attorneys get involved with legal groups, such as the North Carolina Association for Defense Attorneys or the Advocates for Justice. This creates new opportunities for young lawyers and allows them to meet other attorneys that they would have never met otherwise. For small firms in small towns, this can be especially beneficial.

What advice do you have for a young attorney who finds themselves facing off against a more experienced attorney?

Hornthal: Again, it is better to be overprepared than underprepared. While every case has its own set of facts that may favor one side more than the other, you can never go wrong by overpreparing for a case and ensuring that you are not outworked by the more seasoned attorney.

Prentiss: Remember that the older attorney has the same insecurities as the young attorney. The best thing you can do with a more experienced lawyer on the other side is out work them. If you know your case inside and out, the fact that you are up against a more experienced lawyer should not make a difference.

Do you think experienced staff should play a role in guiding a young attorney?

Hornthal: Absolutely. As mentioned earlier, many young attorneys have that sense of entitlement that they do not need to listen to staff because staff are not lawyers. But that is not the case. Many staff members in law firms have been with the same law firm for decades, and can do almost everything an attorney can do, with the exception of signing pleadings and a few other things. With the significant amount of experience these staff members have, they can serve as a significant aid in helping a new attorney understand their duties and roles.

Prentiss: Obviously, staff cannot practice law. But, they can surely help you find the courthouse and tell you who to speak with at court houses in certain counties. Staff can help with several things that attorneys are not taught in law school. Also, having a good relationship with staff is an important part of being a good lawyer and good person in general.

What risks should a young attorney be willing to take?

Hornthal: Young attorneys should be comfortable in taking risks. As mentioned earlier, taking on cases that may not have the most favorable facts may help the young attorney develop significantly. Taking risks is always a good way to learn, if the risk is calculated, and the attorney feels comfortable taking it.

Prentiss: The first thing I’ll say is do not take any risks with ethics. If something does not feel right, you should not take the risk. On the other hand, you should be willing to take on a novel theory to a case, especially if the law and facts are not on your side. Having a novel theory to a case is often a way that lawyers can win cases that seem impossible.

Two Lives: Clinical Surgeon and Medical Expert Witness

Lynette Pitt — Mon, 22 Jan 2024 14:30:00 GMT

A Forensic Orthopedist on the Intersection of Medicine and the Law

By Joshua M. Peck for Juris Medicus

As a forensic orthopedic and spine surgeon, Dr. James Barlow has seen it all, but one case sticks out in memory.

It fell to Barlow one day a few years ago to review the records of a patient who was suffering from what she described as “full-body, excruciating pain” after what seemed to be a minor auto accident, with little damage done even to the vehicles involved, and less to the people.

“In three months since the accident,” Barlow says, “she had accrued something like 65 office visits with different providers—orthopedists, pain specialists, every specialty known to man. She had every conceivable test, and her records, tests, and radiology showed no plausible explanation for the level of pain she reported.”

“My job was to go through her records and see what might explain the extreme symptoms she reported. It turned out that her records showed that she had been reporting extreme pain to doctors, even before the accident, seemingly with no cause. When it came time for my report, I had to report that ‘No one’s going to find anything, because there’s nothing to find.’ On the stand, in front of the jury, I testified that ‘I’m afraid she doesn’t need another medical specialist; she needs a psychiatrist.’” The defense prevailed.

Dr. Barlow is real, but his name is not. Since he usually testifies for defense attorneys in accident cases, he has had to sit in court more than once as plaintiffs' attorneys accuse him of always favoring the defense. This is not even remotely true, he asserts. It is his practice to provide objective reports to attorneys, which are not always favorable to one side or the other. If his name were to appear in the NCADA News, he would undoubtedly be questioned about his remarks by a plaintiff’s lawyer. Therefore, he thought it best to cloak his identity. An editor at NCADA verified his background and credentials, as a practicing surgeon and witness with more than 20 years’ experience.

A Home at Juris Medicus

Barlow does want it known that he is one of the more than 400 physicians associated with Juris Medicus, the consulting firm that supplies medical experts for litigation in Texas, Florida, Georgia, South Carolina, and, as of a few months ago, North Carolina, with occasional forays into other states.

In other medical specialties, there may be a range of legal complaints that land on an expert witness/doctor’s desk, but in Barlow’s specialty, virtually every case stems from an auto accident or a slip and fall. When the case comes to him, his first step, he says, is to secure every conceivable medical record of the litigating patient, and that includes securing his or her medical records from both after and before the accident.

“The thing I’m most interested in is accurate, robust, and complete medical records, and for an obvious reason,” Barlow says. “I have to see whether what the patient is describing regarding pain or disability might be a pre-existing condition, or more likely to be caused by the accident itself. The attorneys on the plaintiff’s side may be reluctant to part with records that fully answer that question, but I’m either going to review them, or report to the court that they would not disclose this vital medical information,” he added.

One strategy that he learned over his 20 years of consulting is never to accept another physician’s written report or description of an MRI scan or X-ray in isolation. “That report is only an opinion,” he says. “I want to see the film or MRI itself and form my own opinion of what it shows. That’s what I’m being hired to do—come to my own conclusion, not dutifully accept another doctor’s.” And he notes, they do not always see eye-to-eye.

On occasion, he sees doctors for the other “team” surrender the full medical account only reluctantly. “They like to slow-play some of the records,” Barlow says. “I’ll wait for them for a time if needed, but if they’re not delivered at all, I’ll testify to that in court. That does not look good for the other side.”

When he reviews records, Barlow always has an eye out for mentions of doctors a patient may have seen in the past. That provides another source for background on the patient’s medical history and can be key to understanding what happened to the patient, and when.

Witness Work? Only After Hours

Like other Juris Medicus consultants, Barlow is anything but a full-time witness; in fact, he only works on forensic cases after his regular office hours. He is a full-time, hospital-based surgeon, and he is passionate about his job. “I love working with patients in my practice, and helping solve their issues,” he says. The two parts of his work world are a universe apart, he notes. “With my patients, I get to ask them all the questions that will get us to a solution: ‘Tell me about the accident or fall. Where does it hurt? Does anything you’ve done relieve the pain?’ In forensic work, it is not like that.I never see the patient, just their records, from which I must come to my own conclusions and advice. However, I am still providing a valuable service seeing to it that blameless defendants are not held responsible for medical issues they did not cause, and conversely, informing defense attorneys when claims are legitimate, and litigants should be compensated.

Asked if he is free to tell his client/attorneys the truth, as opposed to what they may want to hear, he replied “Absolutely. My commitment is to the truth, not to any particular ‘telling’ of the facts...I have advised attorneys I’m working with that they should pay or settle a case because the accident really did cause the problem.” He adds that medical and legal ethics dictate that a testifying doctor’s allegiance is to the truth, and he rigorously complies with that demand.

Asked what skills he learned to succeed as an expert witness in court, Barlow says he sometimes finds he needs to switch into “teacher mode,” while being careful not to sound condescending. “I always remember to look at the jury and speak to them, not to the attorney asking the questions. I may have to use some medical jargon, but I try to speak plainly and slowly, and to explain medical terms, just as I would with a patient in my office. It is my job to make sure that the answers I give are understandable to jurors of every background; they’re not all college graduates.”

And another tip: “I’m not there to give a medical lecture on orthopedics or spine surgery. I answer the question, and then...I stop talking,” he adds with a laugh.

Of crucial importance is Barlow’s insistence on not answering questions beyond his expertise. “A lawyer might ask me about the mechanics of a car crash, and the dynamic forces impacting the car and its passengers. My answer in this scenario would be to acknowledge that the question posed is not a medical question. I’d redirect the lawyer to ask an accident investigator whose expertise lies in that arena. That’s not my wheelhouse.”

Doctors are often “at sea,” Barlow observes, when it comes to the first time they are called upon for testimony. “I’m sorry to say that medical education has absolutely nothing to say about testifying in court or dealing with the legal world at all. You get your first letter from a lawyer, asking for records for some kind of litigation, and you pretty much must work it out for yourself. Like most doctors who do expert testimony, I learned my forensic skills on the job—simply by doing it,” Barlow says. He adds, “It might be a good idea for medical schools to at least alert students that they may be required to provide legal testimony down the road, and to teach them the basics.”

What has changed about forensic medicine? Barlow is asked. A few things, he says. With each passing year, he observes attorneys on both sides of cases seem to be increasingly familiar with medical concepts and terminology. “It helps me do my job when a lawyer is already up-to-speed on the subject,” he says. “And I think more knowledgeable attorneys ultimately contribute to fairer dispositions.”

Reflecting on his many hours in depositions, court proceedings, and consultations with attorneys, there are a few other moments that stand out, besides the chronic patient mentioned above. A radiologist, testifying for a plaintiff, referred to a minute 1.8-millimeter tear in a spinal disc as a “herniation.” A herniation is much more serious than a mere tear, and Barlow said such a small gap should not be called a herniation at all. “The report he wrote made it sound more serious than it could possibly be. The radiologist called the case ‘acute,’ and it simply wasn’t, and the MRI proved it,” Barlow says. “It’s always fun when you can scope out the truth and get to the heart of the matter.” Or more aptly, when you get to the backbone.

Joshua M. Peck is a freelance writer and legal communications specialist based in Georgia.

Juris Medicus is a 2024 Silver Partner with NCADA.

Service Animal Law: A Retrospective Review

Lynette Pitt — Wed, 20 Dec 2023 20:00:00 GMT

by Derek J. Dittmar, Lewis Brisbois

My life changed forever on the afternoon of November 10, 2014, when I met Howard. Howard, for those who haven’t had the pleasure, is a sweet-eyed black Labrador retriever with a giant head and a tail that can clear a coffee table with one mighty swipe. He is also my guide dog, and the reason I became a lawyer.

Working with a guide dog, as compared to using a white cane, feels like riding a motorcycle. The cane allows you to identify obstacles and safely navigate them. A guide dog skips the obstacles entirely, focusing instead on maintaining its straight line of travel. The feel of freedom is, however, met with challenges and obligations. Many business owners and members of the public do not understand the important job that guide dogs have and are unaware of the federal and state laws that protect service animals and their partners. Working as a guide dog handler is, more often than not, an exercise of advocacy, patience, and education. I undertook these exercises in college, and the ability to advocate for someone important to me pushed me to attend law school.

Unfortunately, guide dogs do not work forever, and it eventually comes time to retire them. Howard has seen me through nine years, two graduations, four countries, three legal jobs, and my wedding. He has seen me home through countless safe street crossings, public transportation trips, and unfamiliar areas. He has more than earned his rest and retirement. As he prepares to go to his new home at the beginning of the year, I have been reflecting, in part, on the network of federal and state laws that have protected our partnership.

While most people know that guide dogs are permitted in public places, the actual network of laws and interpretive guidance is more nuanced. As a defense attorney, I recognize that my clients want to be accommodating to dog-human teams while protecting themselves, and other patrons, from the risk of litigation or the dangers associated with fake service animals. It appears prudent, in other words, for a quick refresher on service animal law, particularly as it affects our clients.

First, we need to get the terminology right. Service animals are specifically defined under the ADA as dogs (or miniature horses) that are individually trained to do work or perform tasks for the benefit of an individual with a disability where the tasks are directly related to the individual’s disability. This definition is contrasted with an emotional support animal (ESA) that may benefit an individual, but (1) that individual does not have to be disabled as that term is defined in the ADA; and (2) the animal does not have to bely individual trained to do work to benefit that disability. This distinction is important because service animals are protected under the ADA and state law while ESAs only receive protection under housing law.

In order to determine whether an animal is a service animal, members of the public may only ask the handler two questions. First, they may ask if the service animal is required because of a disability. Note that they may not ask the nature of the disability. Second, they may ask what work or tasks the animal has been trained to perform. They may not ask the individual to demonstrate these tasks, nor may they ask for an identification card or certification. In fact, there is no such thing as a federal certification for service animals recognized under law. If the answer to these questions demonstrates that the animal is a service animal, then places of public accommodation (such as restaurants, stores, and attorneys’ offices) and governmental entities (such as jails, courthouses, and offices) must allow the service animal and its handler inside. I recognize the risk that unscrupulous persons may bluff their way through these questions in order to bring their pets inside animal-free zones. However, sticking to these questions will likely help our clients limit litigation risk, and they always have the right to ask that the human remove the service animal if it is out of control and the handler cannot or will not control it or the animal is not housebroken. Employers should also note that allowing a service animal as an modification to a no pets at work policy has been repeatedly recognized as a reasonable accommodation. Violations of the service animal portions of the ADA can result in governmental investigation and fine, as well as civil action where the plaintiff may be entitled to injunctive relief and an award of attorney’s fees. Unfortunately, drive-by ADA litigation has seen an exponential increase in the past six years, so this is a very real risk to any public-facing entity.

The above definitions and guidance come from the Americans with Disabilities Act and its interpretive guidance from the Department of Justice. In contrast, a recent amendment to the Air Carrier Access Act, arising out of several well-publicized incidents of fake service animals, allows airline personnel to identify proper service animals “by observation” and to require service animal teams to file paperwork 48 hours before their flight attesting to their service animal’s behavior. Failure to file this paperwork could result in the team being prevented from flying. While this change was brought in response to fake service animal teams, its actual impact has chilled the travel ability of many service animal teams.

In North Carolina, our general statutes provide more robust protection for service animal teams. First, N.C.G.S. § 168-4.2 protects both service animals and service animals in training. Second, N.C.G.S. § 168-4.5 makes it unlawful to falsely claim that a pet is a service animal, to prevent service animal teams from enjoying equal goods and services, or to charge a service animal fee. Finally, N.C.G.S. § 14-163.1 criminalizes the killing, hurting, or intentional distracting of service animals. While law enforcement personnel are often not aware of these laws, they do exist and violations can range from misdemeanor to low-level felony. These benefits work together to provide a robust set of protections for service animals in our state, and they are greatly appreciated.

Service animals change lives, but they are only able to do their jobs when people understand the ways in which the law protects, and limits, working animals. Howard and I benefitted from our understanding of these laws, and I hope that my brief reflection and overview will be of use to you and your clients.

_______________

Derek Dittmar is an attorney in the Raleigh office of Lewis Brisbois Bisgaard & Smith. He focusses his practice on civil litigation, disability accessibility/accommodation, and administrative occupational licensing law. He can be contacted at derek.dittmar@lewisbrisbois.com or at (919) 459-6150.

Howard Dittmar began serving as a guide dog on November 10, 2014, and will officially retire on January 6, 2024. Howard was raised in the central valley region of California and trained at Guide Dogs for the Blind (“GDB,”) the second oldest dog guide training school in the United States. Each guide dog costs roughly $50,000.00 to breed, train, and support, and GDB provides its guide dogs, as well as post-graduation training and medical support, to its clients free of charge. Learn more at https://www.guidedogs.com/.

Preparing for Trial Success: A Paralegal's Role & Essential Strategies - Highlights from the NCADA Seminar

Lynette Pitt — Thu, 26 Oct 2023 19:45:58 GMT

by Nathan Hewitt, Hamlet Law
Vice Chair, NCADA Paralegal Division

The 2nd Annual NCADA Paralegal Seminar is scheduled for Thursday, December 14th, 2023. As we await this year's event, let's take a look at some key takeaways from the first seminar held last year from our all-star speakers!

In the first segment, "The Rules of Engagement: Primer on Federal and State Court Rules," Bobbie Kullman of Amwins and Kellie Myers, Trial Court Administrator for Wake County, discussed important topics such as where to find applicable rules, the most frequently used rules, recent changes to rules, and how to find local rules and customs.

Next was "Who's Who? How to Effectively and Efficiently Research Jurors," presented by Scott Addison of Lincoln Derr. Using the films The Judge and Runaway Jury, Addison presented ethical ways to research juror information, how to determine which information is relevant when selecting jurors, and the best formats for organizing juror information for the trial attorney.

In "Social Media – Discovery, Ethics, Evidence & Sanctions," Damon Beaty of Veritext Legal Solutions presented on how advancements in technology have transformed the practice of law, blurring the lines of public and private identities. Beaty discussed ethical considerations, recent case precedents, and specific techniques and tools to identify and collect evidence from social media sources.

Amy Smith shared her "Tips and Best Practices for Assisting with Document Review & Production" in the next segment, focusing on document collection, organization, standardization, review, and production from both parties and non-parties. She also discussed how to withhold privileged documents from production.

Finally, Christie Herding of Pettey & Partrick, LLP, shared tips on "A Paralegal's Role in Trial Prep and Trial." Her presentation emphasized the importance of proper trial preparation, including assigning tasks, compiling case/trial notebooks and exhibits, reviewing local rules and procedures, predicting exhibits and witness testimonies, and preparing physical equipment and technology.

As we reflect on the first NCADA Paralegal Seminar, we are thrilled to see the positive feedback from attendees. Here are some reviews from participants:

"All topics applied to my everyday duties as a paralegal. I appreciated the experience and expertise of the speakers."
"All the presenters gave us very useful, practical information. Thank you for putting together a great seminar."

We are delighted to hear that the seminar resonated with paralegals and provided valuable insights. We believe that the 2023 Paralegal Seminar, scheduled for December 14th, will be even more insightful and beneficial. We encourage paralegals to attend again this year and take advantage of the opportunity to learn from experienced professionals in the field. Program details are forthcoming!

ChatGPT is everywhere – but is AI ready for prime time in enterprise tech?

Lynette Pitt — Wed, 25 Oct 2023 19:53:39 GMT

By Kevin Smith, CS Disco

Artificial intelligence has reached an inflection point. No one can deny its potential, but many fear its power. Key considerations around data security and privacy, the future of work, and government regulation will be paramount for business leaders as they evaluate AI adoption within their organizations.

The harbinger of change, the launch of ChatGPT has led to a cultural phenomenon that has spurred a wealth of interest in developing AI. According to Swiss banking giant UBS, the generative AI application may have become one of the fastest-growing apps in history after it was estimated to have reached 100 million monthly active users. The introduction of this groundbreaking tool into the market combined with the growth of Large Language Model (LLM) solutions has provided enterprises with a new paradigm for how to evolve their day-to-day business processes, or at least the promise. This is a genie that is unlikely to go back in the bottle.

Yet as business leaders and global organizations are eagerly seeking to accelerate their AI adoption efforts, concerns about the data security, privacy, and AI “hallucinations,” and regulatory compliance remain top of mind. As enterprises seek to leverage the strengths of AI, they must also mitigate its risks.

Recently, there has been increasing scrutiny over how accurate and reliable ChatGPT’s intelligence is, adding another layer of complexity to the current AI boom. Intelligence might be the wrong way to think about what these models and derivative technologies do, but in this accelerated environment, it will be critical for organizations to carefully evaluate each new solution before integrating it into critical operations and processes.

The State of AI

While generative AI technology remains nascent, it’s poised to accelerate the maturity of capabilities around document parsing, code generation, and effective information extraction. Variations of AI are being adopted across industries, with the financial services sector leading the way due to the effectiveness of AI’s predictive algorithms in assessing, predicting and mitigating risks. Conversely, industries heavily reliant on non-quantifiable decision-making, such as marketing and manufacturing, have been much slower to embrace AI (Statista).

So how does Gen AI become enterprise ready? Much has been written and spoken about in conferences and sales pitches about its promise to fundamentally disrupt the enterprise workforce. It is true that this represents a generational agent for change, but it is not quite ready… yet.

OpenAI was sprung onto the world and the gears of imagination started spinning incredibly quickly due to getting a taste of this technology’s potential. But there are three core things every product person thinks about in terms of innovation: Product Market Fit - Does it do something really well in a way that has not been done before? Is it Secure - In today’s world there are many tests for this, including what happens with the data we share with these essentially OEM technologies. And lastly, have the innovators broken the context of the systems and tools used to do work or is the innovation elegantly embedded to enable management and quality control of the jobs they aim to support.

Generative AI is excellent at using the information it was trained on and the context that was provided to produce stunning synthesis of information and generation of novel content, whether code, responsive prose or general information structure. We have tested dozens of LLMs on different legal jobs and leveraged experts to assess whether the product of the LLMs has proven to be sufficiently good at the job that the solution would be hired to do, answering legally relevant questions, organizing complex legal documents into addressable frameworks among other tasks. This is just one sector and a few examples, but great enterprise organizations are not trying to deploy generative AI to be mostly okay substitutes for human processes, meaning there is still a lot of work to ensure that there is product market fit for the solutions that leverage these technologies.

There are other fit requirements that have not yet been met.. For example, if you need to leverage these technologies in a cost effective way to bring innovation to market and need high volumes of information processed performantly, then the current capacity limits of many LLMs may become an issue. GPU shortages have led to rationing for hungry LLMs as they try to keep up with demand and leave no user behind more than the next, which creates performance mismatches. A magical answer that needs to be submitted multiple times or that takes a rather long time to complete is not the magical experience that some expect.

Can we trust it? Data Security, Privacy and Regulation

Today, many of the Organizations without the appropriate safeguards can face immediate risks when using AI, as exemplified by the Samsung ChatGPT data leak. The inadvertent inclusion of company data to ChatGPT's training set highlights the need for careful consideration in deploying enterprise applications of ChatGPT and of AI in general. In a KPMG study, 81% of executive respondents considered cybersecurity as a primary concern with AI adoption, while 78% of executives saw data privacy as a primary concern. To avoid compromising privileged data, business leaders adopting AI technology for enterprise applications must establish appropriate guardrails for AI tools and for any data used in training sets.

Fabrication of evidence presents another worrisome risk, including the proliferation of “deepfake” photographs and video imagery. However, as falsified evidence will likely spur greater forensics involvement in legal review, faked photographs can wreak havoc in other areas as well. Consider the impact of a faked photograph of the Pentagon shared on social media earlier this year that caused a drop in stock prices before the error was widely known.

As AI manipulation becomes more sophisticated, businesses across all sectors must do their due diligence to conduct fact checks and verify their sources. In response to the rapid advancement of AI, the White House launched an initiative on “responsible AI”, addressing worker impact, employer use of surveillance technology, and regulatory standards. The evolving international regulatory landscape is something that enterprise adopters will need to keep a close eye on., as governments continue to standards and practices for protecting against anticipated data risks.

Use Cases for Generative AI in Sensitive Industries

Research from KPMG found that 65% of US executives believe generative AI and LLM solutions will have a very high impact on their organization in the next 3-5 years. However, 60% say that we are still potentially a few years away from actual implementation. While fullscale AI implementation may seem like a ways off, investing time and resources into understanding crucial business needs and capabilities will pay dividends in the long run.

Today, we’re already seeing the potential for generative AI to dramatically impact business use cases within highly regulated industries such as finance, healthcare and legal. In finance, AI can improve accuracy in forecasting , reduce errors, lower operational costs, and optimize decision making for organizations able to invest the time and resources for development (Gartner). In healthcare, it can support synthetic data generation for drug development, diagnostics, administrative tasks, (Goldman Sachs) streamlined procurement of medical supplies, and clinical decision-making, with the caveat that trustworthiness and validation are crucial in this context.

In the legal field, lawyers are cautious about AI adoption due to the importance of accuracy and data integrity during legal proceedings (Bloomberg Law). However, in the near future it will give lawyers powerful new capabilities they’ve never had before including comprehensive document parsing, code generation, information extraction, and improved natural language understanding, all of which will augment and optimize various workflows within the legal profession.

Many of the vendors in this space have started to tune their terms and technologies to be able to meet some of the data security and privacy concerns, but not all. There are approaches that companies can take to mitigate these risks as we have where possible, but the maturity of many rushing to participate is still nascent.

AI and the Future of Work - Management and Workflow

According to research from Goldman Sachs, AI could potentially impact as many as 300 million jobs globally over the next five to ten years. While warnings of job replacement may seem dire, historically advancements in technology have led to the creation of new jobs, as saved time and labor free up human talents for more creative endeavors. The use of AI technology could enhance labor productivity and contribute to global GDP growth of up to s 7% over time. In the United States, office and administrative support jobs have the highest automation potential at 46%, followed by 44% for legal work and 37% for tasks in architecture and engineering. However, the impact of AI on jobs will vary across industries.

If we look at jobs that can be impacted, one might suggest that the adoption is going to be as impactful as the management layer that exists to enable these technologies. Not all jobs have the same level of management requirements and as such different roles will be enterprise ready for Generative AI sooner than later. This means that if you are a marketing professional, you can obtain a draft of marketing collateral and then incorporate that into your normal human, word-based editing process before it is submitted for review, publication, etc. This is a standalone human process and requires very little integrated workflow. If you are a financial services firm using AI to analyze risk or provide investment recommendations, is it critical to be able to manage that information, but in provenance, accuracy and distribution (use) which requires generative AI implementation to be auditable in a system that can be easily managed.

There has been much debate around generative AI and its ability to change and improve the cost of legal outcomes. This fails to understand the system (technical and human) that governs the pursuit of outcomes like Justice or legal advice. How generative AI is implemented within the workflow of legal professionals is critical so that it can be trusted, examined and scaled across a diverse set of topics and context.

Conclusion

AI innovation stands at the threshold of immense possibilities, and has the potential to impact a myriad of aspects of society as we know it. While businesses may approach adoption cautiously, navigating risks and regulatory landscapes, the allure of gaining a competitive advantage will drive widespread adoption.

As enterprise enthusiasm continues to skyrocket, it becomes essential to balance excitement with a healthy amount of skepticism and healthy evaluation. Embracing the power of AI and shaping the future requires careful consideration of its limitations, potential risks and ethical implications.

The Court Of Appeals & The Not-So Exclusive Exclusivity Provision of the Workers’ Compensation Act

Lynette Pitt — Tue, 26 Sep 2023 20:30:00 GMT

by M. Duane Jones, Hedrick Gardner Kincheloe & Garofalo, LLP

In the past four years, the Court of Appeals has issued two decisions which appear to negatively impact the exclusivity provision of the Industrial Commission.

The exclusivity provision is the provision which grants the Industrial Commission exclusive jurisdiction over workplace injuries. Pursuant to the Workers’ Compensation Act enacted in 1929, all workplace injuries are adjudicated in the Industrial Commission, and the only remedies available to an injured employee are those remedies outlined in the Act.

Our Supreme Court has explained that the Act “seeks to balance competing interests and implement trade-offs between the rights of employees and their employers. It provides for an injured employee's certain and sure recovery without having to prove employer negligence or face affirmative defenses such as contributory negligence and the fellow servant rule. In return the Act limits the amount of recovery available for work-related injuries and removes the employee's right to pursue potentially larger damages awards in civil actions.” Woodson v. Rowland, 407 S.E.2d 222, 227 (1991). The Act allows an employee to receive medical and indemnity benefits in a timely manner, but limits the avenues and extent of that recovery. This is the basis for the compromise.

Historically, any negligence claims brought in our superior courts by an employee against his or her employer for negligence have been dismissed. The only exceptions to this rule are Woodson claims or Pleasant claims, which involve the employer or co-employee committing intentional torts. An employee has been allowed to sue their employer in civil court where the alleged negligence involved intentional misconduct by the employer “knowing it is substantially certain to cause serious injury or death to employees and an employee is injured or killed by that misconduct.” Woodson, 407 S.E.2d at 228 (emphasis added). Likewise, an employee has been allowed to sue their co-employee in civil court for willful, wanton and reckless negligence. Pleasant v. Johnson, 325 S.E.2d 244, 249 (1985).

Recently, however, our Court of Appeals has allowed a claim for medical negligence and a claim for negligent retention or hiring to proceed in superior court without meeting the Woodson or Pleasant standard of an intentional tort. Jackson v. Timken, 828 S.E.2d 740 (2019); Marlow v. TCS, 887 S.E.2d 448 (2023). A similar error is present in both cases. The Court of Appeals has confused the jurisdictional test for the Industrial Commission with the compensability test that the Industrial Commission uses to adjudicate its claims to determine whether the employee is entitled to benefits. Furthermore, the Court has confused these tests with no regard to whether the employer or co-employee committed intentional torts.

By confusing these two tests, and failing to analyze whether an intentional tort exists, the Court of Appeals is essentially establishing that if a particular claim is not compensable under the Act, the Industrial Commission lacks exclusive jurisdiction over the claim, and the employee may be able to proceed in superior courts. This conclusion cannot be the intent of our legislature in enacting the Act, nor is it consistent with a nearly century old collection of case law interpreting the Act.

In order for a claim to be compensable under the Act, an employee must prove all three of the following elements: (1) the injury was caused by an accident; (2) the injury was sustained in the course of the employment; and (3) the injury arose out of the employment. Otherwise, the claim is not compensable, and the employee is not entitled to any benefits.

In Jackson, the Court’s ultimate error is stated in the opening sentence: “Where an injury occurs in the course of one's employment but is not caused by an accident and does not arise out of the employment, that injury does not fall under the Workers’ Compensation Act, and the injured party may not be compensated thereunder.” Jackson, 828 S.E.2d at 741. The Court is correct in stating that an injury which is not caused by an accident or which does not arise out of the employment is not a compensable injury; however, the Court mistakenly concludes the lack of meeting any one of these elements renders the claim outside of the Act.

The Court went on to conclude that if “the Industrial Commission lacks exclusive jurisdiction to hear a claim that occurs in the course of one's employment, a trial court does not err in asserting subject matter jurisdiction over that claim.” Id. The error of this reasoning is the Industrial Commission should never lack exclusive jurisdiction over an injury that occurs in the course of one’s employment, except under a Woodson or Pleasant exception.

Similarly, in Marlow, our Court of Appeals stated that an action comes within the Act if all three elements are met. Marlow, 887 S.E.2d at 453. Again, this is not a proper application of the test. Coming within the Act and being compensable pursuant to the Act are not the same thing; yet, like Jackson, the Court implicitly concluded they are the same thing. The Marlow court acknowledged that the employer conceded elements one and two were met (the injury occurred as a result of an accident and in the course and scope of employment), but since the Court of Appeals determined the injury did not arise out of the employment, the Court determined there was no exclusive jurisdiction in the Industrial Commission, and the civil suit could proceed in superior court.

However, once the Court determined the injury was sustained in the course of employment, the Court should have determined the Industrial Commission had exclusive jurisdiction, subject only to a Woodson or Pleasant exception. By combining the jurisdictional test with the compensability test, the Court of Appeals has ignored the any number of circumstances where an employee may be injured at work but is nonetheless not entitled to benefits under the Act.

While the Court of Appeals in both cases referred to the exclusivity provision, the Court glossed over the meaning of the exclusivity provision and restricted the analysis of jurisdiction solely to the compensability question of whether or not the incident arose out of the employment. In doing so, the Court of Appeals is allowing the trial court to answer a question that has been reserved for the Industrial Commission to answer.

If the compensability test is to be used to determine the jurisdiction of the Industrial Commission, then all three elements must be answered in the negative for the matter to be held to be outside of the Industrial Commission’s exclusive jurisdiction. Any other combination of negative or affirmative elements lands the claim within the exclusive jurisdiction of the Industrial Commission, and the compensability of the claim is to be determined by the Industrial Commission. Otherwise, the balance struck by the Act is replaced with imbalance, and the employer has lost all the benefits it traded, specifically an employee being prevented from pursuing civil actions, in exchange for an employee not having to prove negligence or face affirmative defenses.

Ten Tips for New Lawyers

Lynette Pitt — Thu, 24 Aug 2023 15:06:43 GMT

Ten Tips for New Lawyers
Will Graebe, Claims Counsel & Relationship Manager
Lawyers Mutual Liability Insurance Company of NC

Whether you are new to the practice of law or a seasoned practitioner, these tips will aid you in managing your day-to-day practice, managing relationships with clients, colleagues, family, and yourself. Here we highlight key tips from Will from the excellent paper he provided for a recent webinar. Download the complete paper here.

Ten Tips for New Lawyers from Day One

1. Documenting Your Relationship with Clients and Prospective Clients Documenting your relationship with a client is one of the most effective ways to avoid malpractice claims and ethics complaints. A good engagement letter can be the difference between a long, drawn-out legal malpractice case versus a simple one-page denial letter. When an arrangement or relationship between the lawyer and client is not reduced to writing, the lawyer and client may have very different recollections or understandings of what the lawyer was hired to do.

2. Avoid Red Flag Clients Another important risk management tool you have at your disposal is client selection. Good client selection will lead to interesting work, job satisfaction and revenue for your firm. Bad client selection can lead to malpractice claims, ethics complaints and billing nightmares. Red flag clients are far more likely to make claims and file grievances against their lawyers.

3. Dockets, Deadlines and Procrastination The most frequent cause of legal malpractice claims is missed deadlines. These claims can arise from missed statutes of limitation, late tax filings, missed regulatory deadlines, late responses to discovery requests, or any other missed deadline that is either fatal to a client’s claim or causes some damage to the client. The reasons why lawyers miss deadlines are varied. Sometimes, the lawyer just doesn’t know the statute of limitations for the claim. This often happens where a lawyer attempts to handle an out-of-state matter and doesn’t realize the other state has a different statute of limitations than North Carolina for a particular matter. Other times, the lawyer fails to calendar the deadline or enters the wrong date. Most of these claims can be avoided with a good docket control and calendaring system.

4. Own Your Mistakes But Don’t Fall on Your Sword If you practice law long enough, you are bound to make a mistake while representing a client. Some mistakes are harmless and immaterial. Other mistakes may be fatal to your client’s case. In between those two extremes are mistakes that cause your client to suffer some negative consequences or create the possibility of negative consequences in the future. What is required of you when you make a mistake depends on the nature and severity of the error. Failure to make appropriate and timely disclosure of errors can result in adverse disciplinary, malpractice and coverage consequences.

5. Take Care of Yourself As lawyers, we don’t like to talk about our problems. We like to talk about other people’s problems. We’re really good at the latter and really bad at the former. We want people to think that we have it all together, that we don’t have any problems. If we are struggling with something emotionally or mentally, we certainly don’t need help from anyone else. What would people think? Would my adversaries think I’m weak and take advantage of that weakness? Would my clients lose confidence in my ability to handle their matter? This mentality, combined with the daily stress and pressure of practicing law, has resulted in high levels of anxiety, depression and alcohol abuse in our profession.

Well-being and happiness are not prizes at the end of a road. They are not something that we strive for and get and then sit back and enjoy. Well-being is a journey—a lifestyle. It’s about designing a life that creates opportunities for joy and purpose and meaning. It’s about creating a state of mind that, when bad things happen, we can be present with that experience and then move forward. Mental health is much like physical health. To have either, we must be active participants. Sure, there is a genetic component to both physical and mental health. But neuroscience has shown us that we can rewire our brains for improved well-being. We have a choice. We can structure our lives to include some of the practices discussed above or we can let our genetics and circumstances limit what is possible.

6. Communications and Client Relationships What do you think is the number one complaint clients have about their lawyers? It is not lack of knowledge or competence. It is not even dissatisfaction with the outcome of a matter or the cost to the client. A BTI Consulting Group Survey indicates that failure to keep a client adequately informed is far and above the number one complaint clients have.

Poor communication not only results in loss of business, but also increases the likelihood of malpractice claims, ethics complaints and poor reviews. Clients who feel seen and heard by their lawyers are far less likely to make such complaints.

7. Don’t Dabble Rule 1.1 of the Rules of Professional Conduct prohibits a lawyer from handling “a legal matter that the lawyer knows or should know he or she is not competent to handle without associating with a lawyer who is competent to handle the matter.” Handling matters for which you are not competent is known as dabbling, and it is one of the leading causes of malpractice claims.

For new lawyers most new matters will involve some level of dabbling. Law school training may be sufficient for certain matters but does not provide the practical experience for handling many practice areas. That can only come from experience. If you’re in a law firm with other attorneys, you can rely on the experience of more experienced attorneys in the firm to mentor you through a case or matter. If you’re solo, you must find another solution. Here are a few suggestions for new lawyers:

1. Associating Counsel

2. Educate Yourself

3. Use the Resources of Your Bar Association or Specific Practice Area Associations

4. Get Involved in a Mentoring Program

5. Call on Lawyers Mutual Claims Attorneys

8. Watch for and Avoid Conflicts of Interest Conflicts of interest account for many legal malpractice claims and ethics complaints. Sometimes, conflicts are obvious. Other times, a conflict can be subtle or might only become evident well into a representation. Every firm, regardless of size, should have conflict of interest policies and procedures in place to identify conflicts of interest before accepting representation. However, even with a conflict checking system in place, lawyers must still exercise good judgment in assessing conflicts and potential conflicts. Additionally, it is essential to understand the conflicts rules under Rules 1.7, 1.8 and 1.9 of the Rules of Professional Conduct.

9. Take Time to Investigate and Develop Facts As law students, we spend three years learning about the law. We learn how to research cases, statutes and regulations and apply what we find to a given set of facts. However, we are taught very little about how to investigate the facts of a case. A frequent mistake made by new lawyers is failing to fully investigate, collect and develop the facts of a new matter or case. This is true in both litigation and transactional matters. Developing and investigating facts can be tedious and sometimes unpleasant. You may have to speak with parties or witnesses who really don’t want to talk to you. Or you might have a client who needs some prodding to give you all the facts. You must be persistent. Cases are often won or lost on a particular fact that would not have been discovered but for the lawyer’s persistence in digging for and collecting the facts. It can also mean the difference between filing a case within the statute of limitations or missing the statute.

10. Focus Less on Outcomes and More on the Journey Hopefully, you will have a long and fruitful career in the law. You will have good days and bad days. You will win some cases and lose some cases. You will have happy clients and disgruntled clients. Even the best lawyers lose sometimes and have unhappy clients during their career. Does that mean that they have failed? If you measure success by winning and pleasing others, then, yes, they have failed. Living life by this measure will create a life full of anxiety and disappointment. If your happiness and satisfaction are dependent on outcomes being what you need them to be, you will frequently come up short. Plus, sometimes what we see as bad ends up turning out to be good.

But what if you measured success by something other than outcomes? What if you measured success by the actions that you took along the way? You will soon learn that, no matter what you do, you can lose a case or disappoint a client. The only thing that you have any real control over is your own actions. Have you zealously represented your client’s interests to the best of your ability? Have you acted ethically? If so, you can be pleased with whatever the outcome is. Practicing law is no different than anything else in life. We have far less control over results than we think we do. So, let go of the need for control and outcomes. Work hard and enjoy the satisfaction of knowing that you did your best. And if there are times when you don’t give it your best, give yourself some grace. Nobody is perfect, even though our clients sometimes think we should be.

Download complete paper.

Managing Divergent Opinions in the Life Care Plan

Lynette Pitt — Mon, 21 Aug 2023 14:21:29 GMT

Managing Divergent Opinions in the Life Care Plan
Betsy Keesler, BSN, RN, CLCP
InQuis Global

Life care plans are often used in the forensic setting for personal injury cases. They serve as both a plan for future care and cost estimate for such needs. The subject of a life care plan is referred to as an evaluee. The life care plan is an educational tool for the evaluee and the trier of fact, written in understandable language that can be readily duplicated and realistically implemented.

The most widely accepted definition of a life care plan is as follows:

The recommended services and items in a life care plan must have a solid medical and health care foundation. The life care plan outlines provisions to meet the biopsychosocial needs of the evaluee. The life care plan requires the input and expertise of multiple disciplines coming together to create one comprehensive plan tailored to the evaluee’s individualized needs. As such, the foundation of the life care plan is described as transdisciplinary in nature.

In the forensic arena, there may be conflicting treatment opinions expressed throughout the course of life care plan development, as well as after the plan’s formal release. The life care planning Consensus and Majority Statements (2018) inform the life care planner of an obligation to “methodically handle divergent opinions.” (Consensus Statement #65). The Consensus Statements are derived from 17 years of past life care planning summits, with input from life care planning experts. They are a key part of life care planning methodology. Therefore, they provide reliable and trustworthy guidance on ways to compare recommendations.

In addition, life care planning Consensus Statement #84 states the following:

“Review of evidence-based research, review of clinical practice guidelines, medical records, medical and multidisciplinary consultation and evaluation/assessment of evaluee/family are recognized as best practice sources that provide foundation for life care plans.”

On closer inspection, there are typically five sources of information to support expert medical opinion:

The evaluee’s medical record
Evaluation/assessment of the evaluee/family
Consultation with treating and/or evaluating health care providers
Professional clinical practice guidelines
Evidence-based peer reviewed literature

A thorough review of medical records is one starting point for gathering relevant health care data. Medical records represent the factual past history of treatments already received and, sometimes, the projected future health care needs as recommended by the treating provider(s). The medical records unveil which treatments were tolerated by the evaluee and led to favorable outcomes. Likewise, they also reveal which ones were considered or tried, but were not feasible to conduct. Also, medical records serve as a cross reference to life care planning recommendations.

When permitted, the life care planner should conduct a formal evaluation and assessment of the evaluee. Likewise, a forensic medical expert, who may be relied upon to provide medical foundation, may also perform an in-person or telehealth medical evaluation as the basis for recommendations. The life care planner will likely need to speak with the evaluee’s treating and/or evaluating health care providers. With the analysis of medical records, the life care planner’s assessment of the evaluee, review of clinical practice guidelines, research and consultation with the treating and/or evaluating health care provider(s), there should be adequate medical foundation and individualized data established to begin formulating a life care plan.

However, sometimes the forensic medical expert will rely solely upon medical treatment and diagnostic records, sans personal evaluation, to formulate an expert opinion regarding the future health care needs for the evaluee. As such, the medical expert opinion(s) issued may not agree with the current treatment plan in place, setting up a scenario for divergent medical opinions.

Finally, the review and analysis of clinical guidelines and peer-reviewed literature is essential. Clinical practice guidelines are the gold standard outlining best practice. These statements, usually developed by medical organizations and academies, are intended to provide sound rationale to guide effective clinical treatments for individuals. In essence, clinical practice guidelines define the how to and the why in health care practice. Also, peer-reviewed literature is important to the life care plan. It represents expert scholarly research, work or ideas that have been critically scrutinized by other experts of the same field prior to acceptance for publication. Such a peer-reviewed process ensures the scientific quality and validity of the research.

Regardless of whether the life care planner is creating or reviewing a plan, it is incumbent upon the individual to indicate where divergent medical opinions lie and how he/she plans to deal with the range of findings. Specific areas to consider when evaluating medical opinions include:

Is the rendering expert consultant and/or treater acting within his/her scope of practice?
Do the medical records give any indication of what treatments provided were beneficial and which ones were not suitable for the evaluee?
Do the medical records indicate what the treating provider was planning for the future?
Do the medical records give any indications the evaluee has reached maximum medical improvement and whether future care consists of conservative medical management moving forward or not?
Are the future care recommendations individualized for the evaluee?
Are the recommendations reasonable and attainable?
Can the evaluee actually implement the recommendations from where he/she lives?
Has the evaluee made any statements as to whether or not he/she intends to pursue the recommendations?
Do the clinical guidelines and standards of practice support the same recommendations given by the medical and/or health care professionals?
What medical information/opinions are discovered in deposition testimony?
Within deposition testimony, have any parties contradicted themselves or changed their opinions regarding future care needs?

Consensus statement #75 asserts, “Life Care planning products and processes shall be transparent and consistent.” The life care planner, as an educator for the evaluee and the jury, should acknowledge when divergent opinions and contradictions exist. Such differing recommendations/opinions may dictate the need to provide more than one plan option in order to develop a reasonable, relevant, and appropriate life care plan individualized to the evaluee. If one recommendation is chosen over another, the life care planner should be prepared to explain the rationale for making such a decision. Moreover, the rational should follow accepted methodology, standards and consensus while being fully transparent and unbiased.

In closing, it is the life care planner’s responsibility to present a life care plan containing feasible treatment and care options, in a transparent and understandable way, using the proper application of peer-reviewed methodology, standards and consensus. In the forensic arena, the life care planning process should aid the trier of fact in making informed and appropriate decisions.

Resources

Cary, John, et al., 2023. “A Walk Through from Referral to Testimony: Methodology & Admissibility.” Journal of Life Care Planning, 21 (1), 69-84.

Deutsch, Paul M., “Tenants of Life Care Planning.” Paul M. Deutsch & Associates, P.A. www.paulmdeutsch.com/LCP-tenets-of-life-care-planning.htm

International Association of Rehabilitation Professionals & International Academy of Life Care Planners, 05/07/2019, “Transdisciplinary Position Statement.”

International Association of Rehabilitation Professionals & International Academy of Life Care Planners, April 2022, “Code of Ethics.”

Standards of Practice for Life Care Planners, Fourth Edition. 2022. International Association of Rehabilitation Professionals & International Academy of Life Care Planners.

Weed R. O., Berens D.E., (editors). 2018. Life Care Planning and Case Management Handbook. (4th ed.). New York, NY: Routledge.

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Betsy Keesler earned a Diploma in Nursing from Presbyterian Hospital School of Nursing in 1987 where she was awarded Clinical Excellence in Pediatric Nursing upon graduation. Ms. Keesler subsequently completed a Bachelor of Science in Nursing during 1990 with receipt of High Distinction through George Mason University. In 2021, she completed 120-hours of post graduate training for life care planning through the Institute for Rehabilitation Education and Training (IRET). Ms. Keesler is a registered nurse (RN) and a certified life care planner (CLCP). She has worked in the hospital setting as a registered nurse (RN) for Pediatric and Neonatal Intensive Care Units and within the outpatient medical setting as a community health nurse. As a community health nurse, she coordinated and provided care for a large and diverse patient population within the school system. Also, Ms. Keesler was a nursing manager for the Adult Evaluation and Review Service within the Maryland Department of Health. Her clinical work through the public health department involved the coordination of medical and nursing services to support ongoing safe community living for persons with catastrophic diagnoses and chronic health conditions. Ms. Keesler has held numerous leadership positions throughout her nursing career and was the recipient of the Maryland Nurse of the Year award during 2009. She currently works full-time as a life care planner with Inquis Global, LLC.

The Complications Associated with Third-Party Litigation Funding

Lynette Pitt — Thu, 27 Jul 2023 19:42:51 GMT

The Complications Associated with Third-Party Litigation Funding Indicate a Need for Legislative Action as Funding Continues to Unabatedly Increase

Adam Peoples, Hall Booth & Smith, P.C. and Connor Wiseman, Summer Associate

Third-party litigation funding is “an arrangement in which a funder that is not a party to a lawsuit agrees to provide nonrecourse funding to a litigant or law firm in exchange for an interest in the potential recovery in a lawsuit.”¹ This method of funding has increased immensely in recent years and demand amongst litigators for such funding continues to grow. According to Westfleet Advisors (an advisor to lawyers and clients who are exploring litigation financing), new capital commitments from the litigation finance industry to law firms increased by 16% in 2022, which was the largest year-to-year growth rate Westfleet Advisors had ever reported since they began tracking in 2019.² This growth is the result of 44 currently active funders with $13.5 billion in assets under management, with $3.2 billion in commitments to new deals coming in the last year.³ The commitments from funders are distributed to single matters as well as in a portfolio form where the litigation funder finances multiple cases belonging to a lawyer or law firm and receives a return on the invested capital either through individual settlements or through a group of cases.⁴ While litigation funding initially was allocated primarily in single-matter deals, portfolio funding has become more common since 2019 and currently represents 68% of new capital commitments, with each new deal averaging about $10.5 million (up from $8.5 million in 2021).⁵ Given the prevalence and depth of litigation funding, particularly in portfolio transactions, there are obvious concerns as to the integrity of litigation backed by third-party funders and the consequences of this rapidly popularizing funding model. These concerns include an overemphasis on profitability, ethical considerations and conflicts of interests, an impact on settlement dynamics, limited transparency and disclosure, insufficient regulation and monitoring, and a potential impact on access to justice.

Portfolio funding makes litigation less risky for both funders and litigators given that funds can be spread across multiple cases. This decreased risk has the potential to encourage frivolous lawsuits driven by financial gain rather than merit. Not only would this needlessly overburden the court system in general, but defendants would also face an altered set of options. In essence, with the backing of litigation funding firms, plaintiffs would be enabled to pursue even highly dubious claims at trial. In this environment, defendants would be pressured to settle all but those most frivolous suits at amounts higher than the merits would traditionally justify.⁶ This disrupts established customs and expectations by driving up costs through inefficiencies and puts defendants in a comprised position regardless of guilt or innocence.⁷ Ultimately, in the case of insurance, premiums will rise to compensate for increased litigation costs, thereby negatively impacting unaffiliated consumers. While a counterargument to this assertion is that investors would be unlikely to invest in a frivolous lawsuit when recovery is contingent on success, the National Association of Mutual Insurance Companies argues that focusing solely on the probability of success “overlooks the fact that funding companies can negotiate for a larger share of any proceeds that result from a less-meritorious lawsuit, in the same way that investors are able to demand higher yields from the issuers of so-called junk bonds.” ⁸ It remains a worthwhile venture for funding companies to invest cases with low probabilities of success if there is a large enough damages figure due to the fact that, through the portfolio approach, the funding company is able to spread risk across lawsuits and therefore avoid instances of overexposure.⁹ Therefore, there is little reason to expect third-party litigation funding to decrease independently.

While the threat of increasing frivolous lawsuits is problematic, perhaps of chief concern is a compromised attorney-client relationship as a result of third-party funding. Litigation funders are positioned to exert an undue influence on litigation strategy and potentially prioritize financial gain over the client’s best interests. This is possible because funders, unlike attorneys, do not owe a fiduciary duty to plaintiffs.¹⁰ An example of this may occur when a funding agreement allows the funder to decide when to settle, even if the plaintiff would rather proceed to trial.¹¹ This dynamic could arise in any number of critical decisions relating to the direction of the lawsuit. Not only is the attorney-client relationship potentially compromised, but there is also the possibility of conflicts of interest and breaches of ethics. The money in portfolio funding by its definition is allocated to numerous different lawsuits. It follows that through the funding of multiple cases simultaneously, there could be conflicts of interest that involve conflicting parties or legal positions. This jeopardizes the integrity of the legal system and shifts the ultimate objective from justice to profit with no regard for congruence. Often, the court and defendant are unaware of a funding agreement, which prevents monitoring. Without transparency, there is little incentive for funders to behave ethically and there is relatively little chance of recourse. Further, the set of circumstances that results leads to the potential for portfolio funding to widen the gap between those who can afford access to justice and those who cannot, thereby perpetuating existing inequalities in the legal system. Portfolio funding may also lead funders and attorneys to prioritize cases with higher potential returns, potentially diverting resources away from cases with significant societal impact but lower financial prospects. Each of these issues is an indicator that additional regulatory attention needs to be given to third-party litigation funding.

Given the multitude of potential issues with portfolio litigation funding and its ever-growing presence in litigation, the judicial system would be well served to pursue enhanced legislation regulating litigation funding, especially pertaining to the portfolio model. Transparency is a critical component in achieving this goal. In working towards transparency, Senator Grassley and Representative Issa introduced The Litigation Funding Transparency Act of 2021, which would “requir[e] mandatory disclosure of funding agreement in federal class action lawsuits and in federal multidistrict litigation proceedings.”¹² Additionally, in December 2022, a coalition of state attorney generals issued a written call to action to the Department of Justice and Attorney General Merrick Garland, though no definitive action has been taken on the issue.¹³ Alternatively, efforts have been made to add a mandatory TPLF disclosure provision to Fed. R. Civ. P. 26(a)(1)(A).¹⁴ The effort has been led by the United States Chamber Institute for Legal Reform which has cited the following as reasons for the addition of the provision: “(1) alleged “mounting evidence” of funder control over litigation and settlement decisions; (2) growing use of TPLF arrangements as part of “all types of civil litigation” and increased funding amounts; and (3) the need to standardize and simplify TPLF disclosure approaches as part of a single disclosure rule.”¹⁵ As of May 8, a letter with 35 signatories (including American Property Casualty Insurance Association, the Association of Defense Trial Attorneys, the DRI Center for Law and Public Policy, and the National Association of Mutual Insurance Companies) was sent to the Advisory Committee reemphasizing the need for the added provision to Rule 26.¹⁶ The Advisory Committee will take the proposal under consideration, however, this provision has been proposed over the course of the past nine years to no avail.¹⁷ Ultimately, litigation funding has the potential to not only negatively disrupt the judicial system but also have a negative effect on the general public especially in the insurance marketplace where increased premiums could lessen affordability and accessibility to insurance for those who are wholly unaffiliated with litigation. Thus, more robust regulations and monitoring and enforcement of ethical standards in portfolio funding is necessary to promote justice and integrity in the legal system.

________________

¹Third Party Litigation Financing: Market Characteristics, Data, and Trends (Report to Congressional Requesters) UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE 1 (Dec. 2022), https://www.goa.gov/assets/gao-23-105210.pdf

²The Westfleet Insider: 2022 Litigation Finance Report, WESTFLEET ADVISORTS 2 (2022), https://www.westfleetadvisors.com/wp-content/uploads/2023/02/WestfleetInsider-2022-Litigation-Finance-Market-Report.pdf.

³Id.at 3.

⁴What You Need to Know About Third Party Litigation Funding, U.S. CHAMBER OF COMMERCE INSTITUTE FOR LEGAL REFORM (Feb. 7, 2023), https://instituteforlegalreform.com/what-you-need-to-know-about-third-party-litigationfunding/#:~:text=Portfolio%20funding%20allows%20the%20litigation,thier%20risk%20over%20multiple%20cases.

⁵WESTFLEEt ADVISORS supra note 2 at 5-6

⁶Third-Party Litigation Funding: Tipping the Scales of Justice for Profit (Prepared by NAMIC State and Policy Affairs Department) NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES (May 2011), https://www.namic.org/pdf/publicpolicy/1106_thirdpartylitigation.pdf

⁷Id.

⁸Id.

⁹Id.

¹⁰U.S. CHAMBER OF COMMERCE INSTITUTE FOR LEGAL REFORM supra note 4.

¹¹Id.

¹²Tasha Williams, U.S. Study of 3rd-Party Litigation Funding Cites Market Growth, Scarce Transparency, INSURANCE INFORMATION INSTITUTE, (Mar. 23, 2023), https://www.iii.org/insuranceindustryblog/federal-study-of-third-party-litigation-funding-reveals-maturing-and-growing-markets-lack-of-transparence-and-scarce-regulation/.

¹³Id.

¹⁴Mark Popolizio, Several industry groups renew calls for a mandatory TPLF disclosure rule as part of the Federal Civil Rules of Procedure, Verisk (June 9, 2023), https://www.verisk.com/insurance/visualize/several-industry-groups-renew-calls-for-a-mandatory-tplf-disclosure-rule-as-part-of-the-federal-civil-rules-of-procedure/.

¹⁵Id.

¹⁶Id.

¹⁷Id.

Costing Evidence and Requirements for the Life Care Plan

Lynette Pitt — Tue, 25 Jul 2023 18:30:00 GMT

Costing Evidence and Requirements for the Life Care Plan

Ashley Kelly BSN, RN, CLCP

Introduction:

A Life Care Plan is a dynamic and comprehensive document which outlines necessary care, treatment, services, equipment, and the associated costs for an individual who has experienced a catastrophic injury. The costs of the plan should, when medically necessary, span the individual’s lifespan to ensure appropriate care, treatment, and support to facilitate his or her quality of life with maximum independence. Guiding and authoritative requirements for the production of a Life Care Plan are delineated through Consensus and Majority Statements, last published in 2018 within the Journal of Life Care Planning. These statements specify proper methodology that should be utilized when researching and establishing costs for a Life Care Plan. Consensus was obtained through a Delphi study with active participation and involvement by a variety of life care planning organizations and professionals, and is applicable to all Life Care Planners, no matter their professional discipline or educational background.

Specifically, Consensus Statement #85 states:

“Best practices for identifying costs in life care plans include:

a. Verifiable data from appropriately referenced sources

b. Costs identified are geographically specific when appropriate and available.

c. Non-discounted/market rate prices

d. More than one cost estimate, when appropriate”

(Johnson, Pomeranz, & Stetten, 2018, p. 17).

For the purposes of this article, I will be utilizing Consensus Statement #85 as a guide and framework to identify proper practices and methodologies when developing the costs of a Life Care Plan. Each heading directly correlates to a portion of Consensus Statement #85.

Life Care Plans should have verifiable data from appropriately referenced sources.

Certain tools should be applied when developing the costs or charges for goods and services within a Life Care Plan. Medical databases that are published and statistically valid are regularly relied upon as a reference source by Life Care Planners for costing. Databases often used when developing a Life Care Plan are the American Hospital Directory, Context 4 Healthcare, FAIR Health, and the Physicians’ Fee Reference. When using these databases, appropriate medical coding should be used to obtain pricing. Medical coding systems are updated annually, and proper usage of such codes is necessary to create a Life Care Plan with valid and reliable costing.

The following are the most commonly used coding systems and their abbreviations:

Current Procedure Terminology (CPT)
Healthcare Common Procedure Coding System (HCPCS)
International Classification of Diseases 10th Revision Clinical Modification (ICD-10-CM)
International Classification of Diseases 10th Revision Procedure Coding System (ICD-10-PCS)
Ambulatory Payment Classification (APC)
Medicare Severity-Diagnosis Related Group (MS-DRG)

These coding systems serve different primary purposes. Maniha (2020) describes the following:

“The ICD-10-CM represents the why (diagnosis) portion of the scenario. The CPT code represents the who (physician), what (the procedure) and/or the where (outpatient facility). The MS-DRGs represent where (inpatient facility). The ICD-10-PCS represents what (inpatient procedure), The Healthcare Common Procedure Coding System (HCPCS) includes what's included, for example equipment, supplies, orthotics, prosthetics, ambulances, devices, and some professional services” (p. 15).

Also, it should be noted that when creating a Life Care Plan, these medical databases and the correct code for each item or service should be displayed within the plan. Based upon consensus requirements, costing resources must be transparent and consistent for the plan’s reliability and validity.

Life Care Plans’ identified costs are geographically specific when appropriate and available.

Life Care Plans should be individualized to the evaluee. Healthcare goods and service costs vary greatly from one geographic region to another. Therefore, Life Care Planners should apply geographically specific costing parameters when developing their plans. After selecting the appropriate medical code, the Life Care Planner should consider the likely geographic region in which the service, treatment, and/or care will be performed. Charges vary based upon geographic area and evolve over time. Depending on the specific resource used, a geographic adjustment factor (GAF) may need to be applied to the price to calculate the appropriate regional cost.

Life Care Plans should provide non-discounted/market rate prices.

Life Care Plans should be individualized to the needs of the evaluee without regard to funding sources. According to Deutsch & Sawyer (2004),

“At no time during the plan development process should budgetary concerns influence care and rehabilitation recommendations. The life care plan was designed with the intention of citing all of the items and services made necessary by the onset of a disability/injury” (p. 5-6).

With that being said, Life Care Planners are cautioned to use both the highest and the lowest costs for any item. The pricing for items and services should not be driven by referral sources or budgetary concerns, but rather the necessity of the specific items or services needed for the evaluee as a result of a catastrophic injury.

The Life Care Planner should use costs that are Usual, Customary, and Reasonable (UCR). According to the American Medical Association the definition of UCR is as follows:

“(a) ‘usual’ fee means that fee usually charged, for a given service, by an individual physician to his private patient (i.e., his own usual fee).

(b) a fee is ‘customary’ when it is within the range of usual fees currently charged by physicians of similar training and experience, for the same service within the same specific and limited geographical area; and

(c) a fee is ‘reasonable’ when it meets the above two criteria and is justifiable, considering the special circumstances of the particular case in question, without regard to payments that have been discounted under governmental or private plans”

(AMA Policy H-385.923, 2021).

Usual, Customary and Reasonable (UCR) pricing typically falls between the 75th to 80th percentile ranges (Weed & Berens, 2018). Life Care Planners should not be using Medicare or other insurance pricing when creating a Life Care Plan, unless jurisdictional or legal venue issues require such to be provided.

Life Care Plans can have more than one cost estimate, when appropriate.

Other resources can be used in addition to medical databases for costing within a Life Care Plan. These additional geographically appropriate and valid resources should provide a range or data point to develop Usual, Customary, and Reasonable pricing for the plan. Direct contact with vendors and/or healthcare providers within the evaluee’s geographical region can be utilized for costing parameters within a Life Care Plan when appropriately documented. When making direct contact with these vendors and/or providers, it is important for the Life Care Planner to request non-discounted costs (i.e., not insurance or sliding scales charges). The evaluee’s recent medical billing records can be another appropriate source for costing information. Billing records from the evaluee’s current treatment providers, and the specific coding from his or her past care, can provide demonstrated data to help determine and/or confirm expected future costs.

Conclusion:

A consistent approach to identifying the costs of medical services and goods is essential to creating validity for a Life Care Plan. The plan should be individualized to the evaluee’s specific medical needs and contain appropriate UCR costs. Ultimately, accurate costing throughout a Life Care Plan is integral for supplying the appropriate care, treatment, services, and equipment, fundamentally promoting quality of life and independence for an evaluee following a catastrophic injury.

About the Author

Ashley Kelly was employed for 11 years at the Medical University of South Carolina in the High-Risk Obstetrics and Gynecology Unit after earning her nursing degree. In addition to caring for obstetric and gynecological patients in the hospital setting, Ms. Kelly was an educator for the MUSC Prenatal Wellness Clinic and received several nominations for the nationally recognized Daisy Award for Extraordinary Nurses. Ms. Kelly completed a 120-hour post-graduate training program in Life Care Planning through the Institute of Rehabilitation and Education Training. She is currently a partner, Certified Life Care Planner and Forensic Nurse Researcher at InQuis Global. She is presently in residency pursuing her Doctor of Nursing Practice (DNP), with a focus in Family Medicine. She received the Medical University Hospital Authority (MUHA) full academic scholarship for her Bachelor of Science in Nursing (BSN), and recently received the Nina Smith Scholarship during her doctoral program. Ms. Kelly is a Registered Nurse (RN), and a Board-Certified Life Care Planner (CLCP).

References:

Article Title/Date: “Consensus and Majority Statements Derived from Life Care Planning
Summits Held in 2000, 2002, 2004, 2006, 2008, 2010, 2012, 2015 and 2017 and Updated Via Delphi Study in 2018/2018”
Journal Title/Lead Author: Journal of Life Care Planning/Johnson, C.
Publication Info: Volume 16, Issue #4, Pages 15-18

Book Title/Date: Life Care Planning and Case Management Handbook (Fourth Edition)/2018
Editors: Roger O. Weed & Debra E. Berens
Publisher: Routledge

Policy Statement: Definition of Usual Customary and Reasonable (Policy H-385.923)
Publisher: American Medical Association (AMA)

Book Title/Date: A Guide to Rehabilitation (Volume 1)/ 2004
Journal Title/Lead Author: Journal of Life Care Planning/Johnson, C.
Publisher: AHAB Press

Article Title/Date: “Components of a Cost/Charge Scenario as Utilized in the Life Care Plan”/2020
Journal Title/Lead Author: Journal of Life Care Planning/Maniha, A.
Publication Info: Volume 18, Issue #4, Pages 13-34

The Day the Non-Compete Died

Lynette Pitt — Wed, 21 Jun 2023 15:30:00 GMT

By Jeremy Falcone and Derrick Foard, Ellis & Winters, LLP

This has been a bad year for the Instapot, Bed Bath & Beyond, and the North Carolina Tarheels. But the non-compete provision may be the owner of the worst 2023.

Non-compete provisions are used throughout the country to limit employees’ ability to take knowledge gained at one employer and deploy it with a competing company. By some estimates, almost 20% of the current United States’ workforce is subject to a non-compete agreement. More than a third of employees have been subject to a non-compete agreement at some point during their careers. The statistics show that these non-compete agreements have become a fairly standard occurrence within employment relationships.

While other states, like California and Illinois, have statutorily prohibited non-compete agreements, North Carolina allows employers to enforce non-compete agreements. To be enforceable, the agreement meets a five-factor test. The non-compete must be in in writing; reasonable as to time and territory; made a part of the employment contract; based on valuable consideration; and designed to protect a legitimate business interest of the employer. See Copypro, Inc. v. Musgrove, 754 S.E.2d 188, 191-92 (N.C. Ct. App. 2014). The agreements also cannot violate North Carolina public policy. See Phelps Staffing, LLC v. C.T. Phelps, Inc., 226 N.C. App. 506, 509, 740 S.E.2d 923, 927 (2013)

But 2023 has suggested that the non-compete levees may run dry, even in North Carolina.

It was not February that made us shiver. Instead, in January 2023, the FTC proposed a new rule that would largely ban non-competes. The FTC described non-competes as “a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.” FTC Proposes Rule to Ban Noncompete Clauses, Which Hurt Workers and Harm Competition (Jan. 5, 2023). Non-competes, the FTC claims, violate section 5 of the Federal Trade Commission Act as an unfair method of competition.

The FTC quotes some staggering figures, estimating that a non-compete ban would increase American wages by $300 billion per year.

The FTC’s proposed rule would extend to independent contractors, employees, and even volunteers. It would prohibit (a) entering into or attempting to enter into a non-compete with a worker, (b) maintaining a noncompete with a worker, or (c) representing to a worker that the worker is subject to a noncompete (in certain circumstances). The FTC did leave a little wiggle room for employers, noting that the prohibition would not extend to “other types of employment restrictions,” presumably non-solicitation and confidentiality provisions. Id. However, the FTC cautioned that those other provisions would also be prohibited if they were “so broad in scope that they function as noncompetes.” Id.

Fortunately, the courtroom will remain adjourned and no verdict will be returned in the short term. The FTC will not be voting on the proposed rule until April 2024, and it received a substantial number of public comments that will need to be reviewed prior to any implementation.

As if that wasn’t bad enough, in May 2023, the General Counsel of the National Labor Relations Board (NLRB) offered up its whiskey to the FTC’s rye in a memorandum further criticizing non-compete agreements. (See Memorandum GC-23-08). While the NLRB general counsel does not make law, she does prosecute the National Labor Relations Act (NLRA) and the position can become law if and when the NLRB issues a decision or rule. So while the memorandum is not law, it provides a good idea of which direction the Chevy is heading.

In the memorandum, the NLRB outlines its position that non-compete agreements interfere with employee rights under the NLRA.

A 1935 law may seem like odd precedent to support the NLRB’s argument. The NLRA does not mention the word “non-compete,” as it was passed long before the heyday of non-competes.

But the NRLB believes that non-compete agreements violate Section 7 of the NLRA. That provision protects the right to “self-organization, to form, join, or assist labor organizations.” Under the NRLA, it is unfair labor practice to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed” in Section 7.

According to the NLRB, non-compete provisions affect these Section 7 rights by interfering with an employee’s ability to seek better working conditions by threatening to resign, actually resign, or seeking out employment with a competitor. Non-compete provisions also prevent employees from soliciting their co-workers to work for a local competitor.

The NLRB did give lip service to some exceptions, noting that there may be some situations in which a legitimate business interest could justify the use of a non-compete agreement. But at the same time, the NLRB made clear that the church bells all were broken with any such exception:

A desire to avoid competition from a former employee? Not a legitimate business interest.
Retaining employees or protecting special investments in training employees? Not a legitimate business interest.
Protecting business interest in proprietary or trade secret information? Yes, a legitimate business interest—but not a legitimate business interest that justifies a non-compete provision.

If the FTC rule and NLRB position eventually are enforced, what is left? Will the music be able to play?

Perhaps as to the King and Queen, but not the jester. The NLRB does note that “provisions that clearly restrict only individuals’ managerial or ownership interests in a competing business” may be acceptable. This is because the NLRB does not apply to “supervisors” (those who have the authority to hire, fire, discipline, promote). Presumably, a non-compete agreement signed by a manager or front-line worker may be valid if the provision only prohibits the employee from work with a competing company as a manager or owner. Similarly, it may be the case that any non-compete for a supervisor would be acceptable (even if it limited front-line work at the new employer). But the memo is not clear on that point.

But before we start singing dirges in the dark for the non-compete provisions, all hope may not be lost. In our highly-politicized environment, there is frequently a great run-up to significant change, followed by a quick district court opinion from a favorable jurisdiction that bars the change from taking place. For instance, in 2016, employers all over the country scrambled to get their policies for handling exempt and non-exempt status adjusted to meet the proposed requirements from the Obama administration. But a Texas district court issued an injunction, and the changes never took place.

Even still, the levee may end up running dry here. The proposed FTC rule and NLRB memo suggest that employers should look away from non-compete agreements and rely more on narrowly-tailored non-solicitation and confidentiality provisions to attempt to prevent their trade secrets and know-how from being brought to a competitor. Certainly employers will now risk potential enforcement action by the NLRB for attempts to hold an employee to a non-compete. Equally as problematic, though, employers may also have difficulty getting courts to grant relief based on the general thrust of the law on these provisions. A state court reviewing a motion for a TRO or preliminary injunction may be disinclined to enter such an order in the face of such headwinds on non-compete provisions generally.

So what is an employer left to do?

First, employers should revisit their current restrictive covenant provisions. Non-compete provisions should be carefully reviewed and the risk of potential NLRB enforcement action should be considered.

Next, employers should consider how they can use other restrictive covenant provisions and agreements to protect confidential information. Confidentiality provisions continue to be generally upheld, so employers can rely on these provisions to protect the most critical company information. Additionally, non-disclosure agreements are generally enforceable so long as they are reasonable in duration. Furthermore, a narrowly-tailored non-solicitation provision—particularly for important clients with whom the employee has closely worked—should be fair game.

Finally, employers should look for ways to keep employees happy. Even before the FTC proposed rule and the NLRB memo, it was sometimes difficult to enforce a non-compete provision. The best defense against needing the provision is preventing the employee from leaving in the first place.

And last, of course, grab some whiskey and rye and start singing, “This’ll be the day that I die.”

Article feature of NCADA's Employment Law Practice Group.

Of Campaigns and Contracts - North Carolina’s Adoption of Legislative Immunity

Thu, 25 May 2023 14:03:18 GMT

by Derrick Bailey, Sumrell Sugg, P.A.

Late last summer, the North Carolina Supreme Court published an opinion which touched on several immunity doctrines. In particular, the Court formally adopted legislative immunity as an individual capacity defense to State-based claims. In so doing, the Court drew not only from federal immunity doctrines, but also from doctrines unique to the State.

A Small-Town Fire Department and a Local Election

The underlying case involved allegations of fraud, a municipal election, and the discernment of a mayor’s functions during town council meetings. Since 1954, the Providence Volunteer Fire Department (“Providence”) provided fire suppression services for portions of the Town of Weddington and the surrounding areas. Through its years of service, Providence’s fire station began to deteriorate, and in 2013, Providence and Weddington began discussing ways to finance the necessary renovations.

Coincidentally, 2013 was an election year, and several candidates, both for town council and for mayor, publicly spoke in favor of the renovations and on the need for Providence to continue providing fire suppression. William Deter, who was running for mayor, was such a candidate.

In October 2013, while the election campaigns were still ongoing, Providence and Weddington entered into an agreement that, when framed in simplest terms, provided that Providence would sell the station to Weddington, which in turn would finance the necessary renovations and lease it back to Providence for one dollar per year. Weddington also agreed to pay Providence on a monthly basis, for a minimum period of 10 years, for the provision of fire suppression services.

The agreement provided that it could only be terminated “for cause” which it defined as “the failure of either party to perform the material provisions of [the agreement] . . . include[ing], but not limited to, the failure to meet the required service level and transparency requirements[.]” The agreement additionally contained a liquidated damages clause which entitled Providence to $750,000.00 if Weddington terminated the agreement without cause. It further stated that Weddington would remain responsible for renovation costs if there was a contractual breach prior to the transfer of the station’s title.

In November 2013, after the agreement between Providence and Weddington, Deter was elected as the Town’s mayor. Providence alleged that Deter campaigned, in part, by publicly advocating for the fire department’s continued existence while secretly conspiring with certain council candidates to find a way terminate the agreement for cause, upon election, so that the Town could gain title to the station without having to pay liquidated damages.

Pursuant to the terms of the agreement, Providence transferred the fire station to Weddington via quitclaim deed on August 20, 2014. On April 28, 2015, following the results of a commissioned fire study, the town council voted to terminate the contract with Providence with the stated basis being Providence’s financial instability and inability to provide adequate assurances that it could meet its obligations under the contract. Mayor Deter did not cast a vote, but scheduled the meeting, called the vote, and allegedly encouraged the council members to terminate the agreement.

Providence filed suit against Weddington and Deter on March 27, 2018, alleging, inter alia, that the defendants fraudulently induced it into executing the agreement and subsequent quitclaim deed.

Deter moved to dismiss, asserting legislative, qualified, and public official immunity. On November 27, 2018, the trial court denied Deter’s motion, holding that he was not entitled to immunity, at least at that early stage in the proceedings. Deter gave notice of interlocutory appeal given the substantial nature of the right associated with the immunity doctrines. On December 31, 2020, the Court of Appeals reversed, holding that Deter’s actions were legislative in nature and that he was entitled to the corresponding immunity. Providence petitioned the State Supreme Court for discretionary review, which it granted on August 10, 2021.

The Court’s Analysis

On August 22, 2022, the Supreme Court unanimously affirmed, adopting the Fourth Circuit’s legislative immunity test, which provides that an official is entitled to immunity if: (1) he was acting in a legislative capacity at the time of the alleged incident; and (2) the acts were not illegal. Providence Volunteer Fire Dep’t, Inc. v. Town of Weddington, 382 N.C. 199, 220 (2022).

The Court followed the federal courts’ analysis as to the first element, thereby concluding that immunity should not limited to members of the General Assembly, but rather, should extend to all regional and local legislators because their ‘“discretion should not be inhibited by judicial interference or distorted by the fear of personal liability[.]”’ Providence, 382 N.C. at 220 (quoting Bogan v. Scott-Harris, 523 U.S. 44, 52 (1998)). The Court similarly agreed that ‘“officials outside the legislative branch are entitled to legislative immunity when they perform legislative functions.”’ Id. at 221 (quoting Bogan, 523 U.S. at 55).

During oral argument, however, the Court struggled with how to evaluate the second element as there was no authority clearly defining what constitutes an “illegal act” within the context of the test. Ultimately, the Court resolved this question by looking to Epps v. Duke Univ., 122 N.C. App. 198, 204-05 (1996), and incorporating the public official immunity standard, noting that an “official may, however, be held liable in his or her individual capacity if his or her actions were malicious, corrupt or outside the scope of his or her official duties, even if they were legislative in nature.” Providence, 382 N.C. at 220 (emphasis added).

In adopting the public official immunity standard, the Court indirectly addressed a separate, unraised issue, namely whether there was legal authority to justify a State-based version of the doctrine. The issue was not directly before the Court as “Providence ha[d] not contended that [the Court] should refrain from recognizing the doctrine of legislative immunity.” Id.

While there are a handful of State statutes that acknowledge the doctrine, there are none that authorize it. By contrast, federal legislative immunity is rooted in the Speech and Debate Clause of the United States Constitution, which provides that “Senators and Representatives shall . . . be privileged . . . for any Speech or Debate in either House[.]” U.S. Const. Art. I, § 6, Cl 1. The closest North Carolina has to a constitutional equivalent is found in Art. II, § 18, which states that “[a]ny member of either house may dissent from and protest against any act or resolve which he may think injurious to the public or to any individual” by having “the reasons for his dissent entered into [a] journal” that is to be made publicly available after the adjournment of the General Assembly. The Oxford Commentaries on the North Carolina Constitution, co-authored by Chief Justice Newby, explained that the purpose of this section was to create a public record and hold elected officials accountable to their constituents rather than insulate them. Hence, State-based legislative immunity did not have as strong a constitutional foundation as its federal counterpart.

Instead of relying on express constitutional or statutory provisions, the Court invoked the familiar language of public official immunity; “a derivative of sovereign immunity,” Toomer v. Garrett, 155 N.C. App. 462, 481 (2002), and “an established principle of jurisprudence, resting on grounds of sound public policy[.]” Smith v. Hefner, 235 N.C. 1, 6 (1952). In so doing, the Court simultaneously resolved both the issue of the doctrine’s legitimacy and its own reservations regarding adoption of the Fourth Circuit’s test.

Finally, while some of the conduct that Providence alleged gave rise to a claim of fraud occurred before Deter was elected, the Court was quick to note that it “would not have resulted in any injury to Providence in the absence of the legislative acts,” establishing that immunity is applicable if the alleged harm would not have occurred but for the legislative acts. Providence, 382 N.C. at 221

Key Takeaways

In summary, State-based legislative immunity is not absolute, like its judicial or prosecutorial counterparts; but rather is more akin to, and subject to the same limitations as, public official immunity. That being said, the limited the scope of legislative immunity could, in certain circumstances, have the additional effect of eliminating a plaintiff’s ability to assert an alternative claim directly under the North Carolina Constitution because legislative immunity merely presents additional requirements to State torts rather than operating as a complete bar. See Debaun v. Kuszaj, 238 N.C. App. 36, 40 (2014). Moreover, the but-for standard extends to all levels of government, as long as the officials are engaged in ‘“quintessentially legislative”’ acts. Providence, 382 N.C. at 221 (quoting Bogan, 523 U.S. at 55).

“Waterproofing” Your Pleadings: A Tale of Caution

Thu, 27 Apr 2023 14:59:03 GMT

By Robert Young, Trisha Barfield, and Jeffrey Harnden, Elon Law Student

North Carolina courts generally adhere to the notice pleading standard set forth in Rule 8(a)(1) of NC Rules of Civil Procedure allowing leniency in the level of particularity required by a litigant’s pleading so long as the parties are placed on notice of the transactions and occurrences giving rise to the litigant’s claim. The general standard for notice pleading as it applies to tort law requires that a litigant allege that a tortfeasor’s acts fulfill each of the elements of a given tort. For example, a claim for common law negligence requires the plaintiff to allege a (1) a legal duty; (2) a breach of that legal duty; and (3) an injury proximately caused by the defendant’s breach of duty.

Under the notice pleading standard, one would presume that a plaintiff’s negligence claim satisfies Rule 8(a)(1) through factual allegations evidencing that the defendant had a specified legal duty, breached the duty by an act or omission as described, and that the defendant’s breach of duty proximately caused a specified injury. Negligence claims are customarily pled this way in typical construction defect litigation, particularly when a contractor defendant brings counterclaims or third-party claims for indemnification and/or contribution against a subcontractor and/or manufacturer. After all, due to the often elusive nature of the true cause of construction defects, or the likelihood of multiple causes of a construction defect, it is difficult for a party to know and plead detailed facts at the early pleading stage. Prior to discovery, only the most obvious manufacturing defects would be known to the parties, and the exact methods and workmanship employed by a subcontractor may be completely unknown to the plaintiff, at least during the pleading stage. Given these practical issues, notice pleading seems an appropriate and reasonable standard.

However, the Court of Appeals appears to have recently applied a heightened notice pleading standard to third-party claims for indemnity and contribution based on underlying negligence in Ascot Corp., LLC v. I&R Waterproofing, Inc., 2022-NCCOA-747, 881 S.E.2d 353, 358, ___N.C. App. ___ , ___ (N.C. Ct. App. November 15, 2022). In Ascot, the residential construction general contractor Ascot Corp. contracted with I&R Waterproofing to waterproof a basement by installing a TUFF-N-DRI barrier system manufactured by Tremco. Id. Ascot separately contracted with Tanglewood to landscape the property. Id. Approximately two years after construction, water intrusion was discovered in the basement and Ascot independently paid for the repair of the water intrusion. Id. Ascot filed suit to recover its costs against I&R asserting claims for breach of contract, breach of implied warranty of habitability and good workmanship, negligence, and unfair and deceptive trade practices. Id. Subsequently, I&R filed a third-party complaint against both the landscaper, Tanglewood, and Tremco, the manufacturer of the waterproofing barrier, asserting claims for “compensatory damages and contribution” should I&R be liable to Ascot. Id.

I&R’s third-party complaint alleged that Tremco had a duty to manufacture the water barrier in the manner of a reasonably prudent manufacturer, that Tremco breached such a duty by negligently manufacturing the barrier, and that as direct and proximate result of Tremco’s negligence I&R had suffered damages. Id. On its face, it appears that I&R properly alleged negligence against Tremco to assert a common law indemnity and contribution claim per a notice pleading standard. However, the Court of Appeals affirmed the trial court’s dismissal of I&R’s common law indemnity claim for failure to state a claim. Specifically, the Court held:

The allegations set forth in I&R's complaint, including all incorporated allegations, fail to allege facts sufficiently specific to give information of the particular acts complained of. I&R's general allegation that "Tremco was negligent in the production, design, manufacture, assembly, and/or inspection of the Tremco Barrier System, and in breach of its duties to I&R" was not sufficiently specific and thus does not set out the nature of I&R's demand sufficiently to enable Tremco to prepare its defense. Id. at 365.

The Court relied on the same reasoning to affirm the dismissal of I&R’s contribution claim based on underlying negligence against Tremco. Id. The Court’s ruling appears to require more than mere notice pleading. Interestingly, the Court cited a case decided prior to the adoption of the Rules of Civil Procedure in affirming the dismissal. Id. The Court explained that “…a general allegation without such particularity does not set out the nature of plaintiff's demand sufficiently to enable the defendant to prepare his defense." Id. at 365, citing, Stamey v. Rutherfordton Elec. Membership Corp., 247 N.C. 640, 646, 101 S.E.2d 814, 819 (1958).

In contrast, the Court held that I&R sufficiently pled negligence to support an indemnity implied in law claim against Tanglewood, the landscaper. Id. I&R alleged that Tanglewood failed to incorporate proper drainage mechanisms in violation of the NC Residential Code, failed to install pipe of a correct length, and failed to connect certain drainpipes. Id. I&R’s claim against Tremco may have survived a Rule 12(b)(6) motion if it included more detailed allegations about Tremco’s failures and/or omissions during the design or manufacturing process. In other words, it is simply not enough to allege a conclusory allegation of negligence even when incorporating other allegations, which may present challenges for the pleader when the specific facts giving rise to negligence are not apparent at the pleading stage.

Attorneys asserting indemnity and contribution claims based on underlying negligence should read the Ascot case as a tale of caution. It is not certain whether it was only the phrasing of I&R’s claim against Tremco that led to dismissal, or whether the Court analyzed the claim relative to I&R’s more specifically pled underlying negligence against Tanglewood. Regardless, the lesson here remains that mere notice pleading pursuant to Rule 8(a)(1) may not be sufficient and pleading negligence to support indemnity and contribution claims in these cases requires more factual detail to enable a defendant to prepare his or her defense. As courts will certainly differ in considering the sufficiency of indemnity and contribution claims, attorneys should avoid pleading only legally-conclusory terms with a general incorporation of other allegations and include as much factual support as possible even when lacking knowledge of the full extent of the alleged transactions or occurrences. With these considerations in mind, attorneys can “waterproof” their pleadings from a dismissal of their claims.

Prove it! Lessons Learned from Recent N.C. Business Court Rulings on Fee Requests.

Wed, 29 Mar 2023 18:38:12 GMT

By Jeff MacHarg and La-Deidre Matthews

Every litigant wants their attorneys’ fees, but actually recovering them in North Carolina is rare. Fee recovery must be authorized by rule or statute, and fees must be “reasonable.”

As several recent Business Court rulings remind us, when it comes to proof of “reasonableness,” more is better.

A refresher on the basics: A party seeking fees has the burden of establishing both entitlement and reasonableness. Reasonableness is within the Court’s discretion and is determined based on a (non-exhaustive) list of factors. The baseline is set by the factors in Rule 1.5 of the North Carolina State Bar’s Revised Rules of Professional Conduct, which prohibits fees that are “clearly excessive.” These factors often overlap with those in statutes authorizing fees. See N.C. Gen. Stat. § 6-21.6 (listing 13 “reasonableness” factors).

The list below combines factors from Rule 1.5, statutes and recent cases. Parties seeking fees should submit proof of as many of these factors as possible.

· The amount in controversy;

· The results obtained;

· The reasonableness of the time and labor expended;

· The billing rates;

· The fee or rates customarily charged in the locality for similar legal services;

· The novelty and difficulty of the questions raised in the action;

· The skill required to perform properly the legal services rendered;

· the experience, reputation, and ability of the lawyers performing the service;

· The time limitations imposed by the client or by the circumstances;

· The nature and length of the professional relationship with the client;

· Timing and amounts of settlement offers including those prior to the institution of the action, as compared to the result;

· Offers of judgment pursuant to Rule 68 of the North Carolina Rules of Civil Procedure as compared to the result;

· The terms of the business contract;

· Whether the fee is fixed or contingent; and

· Whether any interested party objects or opposes.

See N.C. Gen. Stat. § 6-21.6; Chambers v. Moses H. Cone Mem'l Hosp., 2022 NCBC 61, ¶ 25 (N.C. Super. Ct. Oct. 19, 2022) (Conrad, J.) (assessing reasonableness of fees based on Rule 1.5 of the Revised Rules of Professional Conduct and other practical considerations).

Notably, several of these factors are completely within the parties’ control, particularly those regarding settlement. When a potential fee recovery is in play, parties need to know that settlement offers and demands, especially early ones, could end up helping (or hurting) a fee request that comes months or years later. As a result, all settlement offers, demands, and positions should be documented since settlement positions often dictate (and arguably justify) the vigorousness of the litigation that follows.

The following orders from 2022 provide other and further insights into proving reasonableness of fee requests.

Miriam Equities, LLC v. LB-UBS 2007-C2 Millstream Road, LLC, No. 19 CVS 8523, 2022 WL 2802526 2022 NCBC Order 54 (N.C. Super. Ct. July 08, 2022) (Earp, J.) involved a contract dispute where the contract allowed the prevailing party to recover their fees (as permitted by N. C. Gen. Stat. § 6-21.6). When the defendant prevailed at summary judgment, it sought fees under the contract.

Even though there was no opposition filed, Judge Earp still had to assess the defendant’s proof of reasonableness. The defendant supported its fee petition with invoices, a good first step. But the invoices had defects. Judge Earp first commented (unfavorably) about the difficulty in trying to assess reasonableness of the work when time entries are “block billed,” i.e., different tasks are billed as a single block of time. Additionally, some of the time entries were completely redacted, leaving no information on which to determine reasonableness.

As for rates, the defendants did not support this fee petition with an affidavit. Instead, the defendant relied on an affidavit its counsel submitted several months prior as part of a fee petition for a discovery sanction. But the prior affidavit was incomplete. It did not have rate or experience information for all of the legal professionals.

As for hourly rates, again, the evidence was insufficient. Much like the prevailing party in Vanguard Pai Lung (discussed below), defendant’s (prior-filed) supporting affidavit was from the lead attorney himself. Although an attorney testifying about reasonableness of their own rates is evidence of reasonableness, one might question whether it is the most persuasive evidence. Judge Earp considered the affidavit, but also took judicial notice of customary rates of North Carolina attorneys as reported in other attorney fee cases. In the end, Judge Earp concluded that the rates requested in this case were somewhat higher. She, therefore, reduced the requested rates by 15-25% to bring them more in line with other evidence of customary rates.

The above issues of proof – all of which could have been corrected or at least mitigated – resulted in roughly $100,000 in fee reductions. Surely a balance must be struck, but in this instance more and better proof may have resulted in fewer reductions.

Vanguard Pai Lung, LLC v. Moody, 2022 NCBC 48 (N.C. Super. Ct. Aug. 31, 2022) (Conrad, J.), also illustrates several proof and other considerations when seeking attorney’s fees. Before even getting to “reasonableness,” parties must first apportion requested fees to only those claims that allow for fee recovery. In this case, there were two plaintiffs and two dozen claims and counterclaims. The jury returned a verdict in favor of the plaintiffs on several claims, but only one claim, embezzlement, allowed for recovery of fees. See N.C. Gen. Stat. § 1-538.2(a). Also, although the two plaintiffs shared the same counsel, only one of them prevailed on the embezzlement claim.

Citing authority that allows recovery of all fees when fee and non-fee claims are “inextricably intertwined,” plaintiffs, jointly, sought the full $2.5 million incurred in the case as a whole. They argued that segregation between plaintiffs and specific claims or counterclaims was not “practically possible.” Judge Conrad disagreed.

Judge Conrad pointed out that only one of the two plaintiffs asserted the embezzlement claim, so only one of them was entitled to any fees. Judge Conrad also found that the claims were not so inextricably intertwined that it would be impossible to apportion fees to embezzlement over other claims and defense work. To prove the point, Judge Conrad noted several distinct jury findings on claims that had nothing to do with embezzlement.

As for reasonableness of work and time spent, Judge Conrad found that plaintiffs’ evidence was insufficient. Instead of submitting bills and time entries (which plaintiffs instead offered to provide for in camera review), plaintiffs provided affidavits from counsel of record. These affidavits included charts summarizing total hours billed by timekeeper. But, as Judge Conrad explained, without seeing time entries, the Court cannot assess the reasonableness (or unreasonableness) of any of the work.

As for rates, again, affidavits from counsel of record were not sufficient to justify the hourly rates of some of the out-of-state attorneys. In particular, Judge Conrad questioned the reasonableness of hourly rates of the California lawyers from Perkins Coie LLP, which were nearly double those of able local counsel at Womble Bond Dickenson LLP.

Ultimately, Judge Conrad denied the motion without prejudice to refile after post-trial motions and appeals. This opinion, of course, provides a cautionary roadmap for counsel to ensure fees are properly apportioned and to ensure that they submit their best supporting evidence with the motion.

Erwin v. Myers Park Country Club, Inc., 2022 NCBC Order 32, (N.C. Super. Ct. June 9, 2022) (Robinson, J.) is instructive for a different and practical reason: fee awards are never guaranteed. In this case, the party seeking fees seemed to do everything right. Its fee petition was supported by detailed affidavits from both counsel of record and a reputable local attorney. These affidavits ticked off many of the factors set forth above. There were no issues with block billing. All the relevant time entries were organized, assessed, and submitted. But, as was reported in a previous post, Judge Robinson was not persuaded that the time spent was reasonable. After a painstaking, task-by-task review of every single time entry, Judge Robinson exercised his discretion and awarded only 30% of the fees that were requested. One important takeaway from this ruling is that even with a statutory mandate and seemingly the best proof a party can muster, fees are never a guarantee. That’s because reasonable minds can always differ as to what is “reasonable.”

Bucci v. Burns, 2022 NCBC Order 63, (N.C. Super. Ct. Nov. 17, 2022) (Conrad, J.) reiterates many of the points of above, and one more: when fees are authorized by a remedial statute, parties should request fees incurred in preparing their fee petition, i.e., fees on fees.

In this multi-party case, two of the defendants prevailed at summary judgment on some (but not all) claims asserted by certain two of seven plaintiffs. These defendants successfully argued that the subject claims should never have been brought by these plaintiffs because, contrary to the allegations in the pleadings, these claims were never supported by any actual evidence.

As the prevailing parties on this subset of claims, these defendants sought fees under N.C. Gen. Stat. § 6-21.5, which allows recovery of attorney’s fees caused when a party prevails on claims that were brought despite “the complete absence of a judiciable issue of either law or fact.”

In assessing these fee petitions, Judge Conrad again addressed issues of apportionment and proof. On apportionment, (i.e., how to allocate fees caused only by the nonjusticiable claims when other claims were justiciable), the moving defendants asked the Court to simply divide the total fees incurred by the total number of plaintiffs (seven) and charge the losing plaintiffs’ their share. Judge Conrad disagreed, explaining that this type of simple allocation would be inequitable and contrary to N.C. Gen. Stat. § 6-21.5, which allows only those fees caused by the improper filing. Judge Conrad found that the defendants would have incurred most of the fees in defending the other claims anyway. Instead, proper apportionment could only be had with careful review of the evidence to determine which fees were caused by the nonjusticiable claims. But the defendants’ evidence was deficient, making it impossible to identify (e.g. by time entry) what work was caused by the nonjusticiable claims.

Although invoices were submitted, much of the time was block-billed and aggregated. Defendants also made no effort to try to identify and allocate time caused by the particular nonjusticiable claims. This record evidence left apportionment within the Court’s “ample discretion,” which Judge Conrad exercised, “cautiously.”

Judge Conrad used what information could be gathered from the invoices, and not surprisingly, awarded only a small fraction of the total fees that were requested. For one defendant, Judge Conrad allowed recovery of approximately 50 of the 700 total hours spent on the case. For the other defendant, whose time entries were even more inscrutable for this purpose, Judge Conrad allowed recovery of approximately 30 of 1,200 total hours spent. Neither defendant requested or even hoped for a total recovery, but different evidence, with no block billings and detailed time entries may have made a difference.

This Bucci v Burns opinion is remarkable for an additional reason: one of the two moving defendants requested fees incurred in preparing their fee motion, i.e., fees on fees, and Judge Conrad granted the motion (in part). Judge Conrad acknowledged that fee petitions take time and can be expensive. Disallowing fees on fees that are awarded under a remedial statute would have a “deterrent effect” on seeking fees in the first place, which in turn would undermine the purpose of the statute, N.C. Gen. Stat. § 6-21.5. Since the defendant’s original fee petition was granted only in part Judge Conrad allowed only a portion (25%) of the fees incurred in preparing the fee petition. The defendant who did not seek fees on fees was awarded nothing. Several lessons can be taken from this aspect of the ruling including: if fees are available under a remedial statute, a requesting party should seek fees on fees.

If fees are in play, here are some takeaways:

Apportion judiciously. Know which claims and defenses give rise to fees as early as possible. Ensure time entries are clear so that fees can be apportioned. When it comes time to seek your fees, apportion them to claims that allow fee recovery. If you don’t apportion, the Court will exercise its discretion with caution.
Know the “reasonableness” factors. These factors could impact settlement strategy, timing of offers, and timekeeping habits.
Document all settlement discussions. All settlement discussions, particularly early or pre-litigation offers, will inform the vigorousness of subsequent litigation.
Submit your “best” affidavit(s). If circumstances permit, consider engaging a lawyer outside your firm to assess the case, review billing records, tasks and time spent, and provide affidavit testimony to the Court on these matters including reasonableness of rates, other market rates, and time spent.
Submit bills with detailed time entries. Without time entries, the Court cannot assess the reasonableness of the time spent. Time entries can be in the form of an authenticated summary of relevant entries or actual bills.
Don’t block bill. Time entries should ascribe time to each task. Affidavits can be used to provide evidence that may not included on the bills.
Be realistic. Even a well-supported or unopposed motion may be reduced. This is yet another factor to consider when investing time to marshal and present evidence to support a fee petition.
Seek fees on fees. If a remedial statute is involved, the moving party should seek fees on fees. But, again, be realistic.

Vocational Rehabilitation for Persons with Severe Injuries

Wed, 22 Feb 2023 20:06:42 GMT

By Michael A. Fryar, M.S., CRC, RN, CCM, CLCP, QRP and John J. Humphreys, B.S., M.S., CRC, Inquis Global

INTRODUCTION

Severe injuries such as Spinal Cord Injuries, Amputations, Burns, Traumatic Brain Injuries and/or other Polytrauma circumstances can create very challenging and life-long consequences for an individual. In addition to the immediate medical and functional consequences derived from these types of injuries/diagnoses, such persons are often moving through difficult psychological processes to adapt emotionally to the sudden cognitive and/or physical changes which have occurred. More often than not, these types of significant injuries will immediately disrupt the pursuit of work and can lead to extended vocational displacement and reliance upon disability benefit systems. Vocational rehabilitation services can be provided to directly assist with the assessment, planning and overall work adjustments necessary to support re-engagement of appropriate employment endeavors. This article will explore the overall vocational rehabilitation process necessary to appropriately support persons who have experienced severe injuries and the inherent benefits in pursuing such objectives. Also, a hypothetical case scenario will be outlined for illustrative and educational purposes.

VOCATIONAL REHABILITATION & SEVERE INJURIES

As discussed in Foundations of Forensic Vocational Rehabilitation (Robinson, 2014), the overall vocational rehabilitation process is composed of distinct phases: Evaluation, Planning, Treatment and Termination. The Evaluation Phase typically begins through an intake interview with the individual by the Vocational Rehabilitation Counselor. The interview will likely explore relevant physical, medical, educational, vocational, psychosocial, economic and other personal factors. Next, input through additional assessments, consults, and/or the detailed analysis of past treatment records will be pursued to establish the necessary medical and/or psychological foundation necessary to begin the process of developing an appropriate Individualized Vocational Rehabilitation Plan (IVRP) for the person. Such plan development may include the completion of standardized testing (i.e., intelligence, aptitudes, interests, etc.) by a Vocational Rehabilitation Counselor or other qualified healthcare professionals, a work transferability analysis, vocational research and/or career counseling. A formal individualized plan is established once the Vocational Rehabilitation Counselor has collected necessary and sufficient data/information to establish appropriate objectives to reach vocational, or potentially avocational, goals for the individual. After the Planning Phase is complete, the Treatment Phase of the overall vocational rehabilitation process begins. This phase involves the direct delivery of services to reach the educational and/or vocational goals established. Essentially, it is the unfolding of the individualized plan through the completion of designated objectives to reach educational and/or career goals. The final phase in the standard vocational rehabilitation process includes the termination of services (i.e., the Termination Phase), which is hopefully completed after the establishment of successful employment by the individual.

Past national research (Duta et al., 2008) identified the following job placement statistical outcomes for persons after the receipt of vocational rehabilitation services:

“Sixty-two percent of the clients in this study were gainfully employed after receiving vocational rehabilitation services. Individuals with sensory/communicative impairments had the highest success rate (75%) compared to 56% for the physical impairments group and 55% for those with mental impairments.”

Historically, when it comes to the vocational rehabilitation outcomes of persons with severe injuries and disabilities, the published literature describes one of the major barriers as the appraisal of earnings available through paid employment, compared to established disability-related benefits (Robinson, 2014 & Duta et al., 2008). Specifically, Dr. Robinson points out the following (Page 7):

“A major confounding issue in evaluating the effectiveness of vocational rehabilitation services, which has little to do with the quality or type of the vocational rehabilitation intervention, is systems of financial compensation that reside outside of the vocational rehabilitation delivery systems. Examples include disability-related compensation benefits offered through workers’ compensation programs, Social Security Disability Insurance (SSDI), or veteran’s compensation benefits related to service-connected impairments.”

However, as to be discussed, the overall benefits of work can extend far beyond the economic gains received by the individual.

BENEFITS OF WORK

The International Classification of Functioning, Disability and Health (ICF) of the World Health Organization (WHO) defines employment as “… engaging in all aspects of work, as an occupation, trade, profession or other form of employment, for payment or where payment is not provided, as an employee, full or part time, or self-employed”. A return to gainful employment after experiencing a severe injury can help individuals achieve economic self-sufficiency, attain personal growth, adjust to their disability, increase social interactions, and improve life satisfaction, health and well-being. (Trenaman et al., 2014).

Relative to the benefits of work, Ullah et al. (2017) completed a review of research regarding adults with Spinal Cord Injuries (SCI). Based upon their empirical findings, three common themes or benefits from returning to work after such a severe neurological injury were identified.

The first theme or benefit identified was the re-development or re-defining of self. The individuals of the study had strong motivation to establish a career following the injury. Through such motivated vocational activities, they were able to gain confidence and re-establish a sense of control over their environments and lives. Moreover, reengagement of work helped these persons recognize inherent abilities and shifted their focus away from their newly acquired functional/neurological limitations or disabilities.

The second identified benefit derived from working after a Spinal Cord Injury was it promoted re-establishment of personal roles within the community. Specifically, returning to work facilitated much needed personal opportunities for the individuals to exit their homes, interact socially, perform purposeful activities, and directly contribute to their communities in a meaningful way.

The third and final theme or benefit determined from the research concerned autonomy, and in particular, the finding that a career affords individuals with severe injuries the opportunity to regain overall self-sufficiency and personal autonomy for their lives. In summary, multiple benefits arise from the performance of work for persons with severe injuries and disabilities which extend well beyond the receipt of a paycheck.

WORKPLACE ACCOMODATIONS

Individuals who attempt employment after acquiring a severe injury often face a variety of barriers which can significantly hamper or prevent a successful return to and/or the maintenance of competitive employment. These barriers, whether perceived or actual, can often be minimized or eliminated through the implementation of effective workplace/job accommodations. The U.S. Department of Labor (USDOL) defines workplace accommodation as follows:

“A job accommodation is an adjustment to a job or work environment that makes it possible for an individual with a disability to perform their job duties. Accommodations may include specialized equipment, modifications to the work environment or adjustments to work schedules or responsibilities. Not all people with disabilities (or even all people with the same disability) need the same accommodation. For example, a job applicant who is deaf may need a sign language interpreter during the job interview; an employee who is blind or who has low vision may need someone to read information posted on a bulletin board; and an employee with diabetes may need regularly scheduled breaks during the workday to monitor blood sugar and insulin levels.”

Based upon the Americans with Disabilities Act (ADA, Title-1), an employer must provide the reasonable accommodation(s) necessary for a qualified individual with a disability to have equal opportunity to acquire and successfully perform the essential functions of their job to the same extent as their nondisabled co-workers. According to the ADA, a reasonable accommodation should not cause the employer undue hardship, relative to their business operations.

In their systematic review regarding job accommodations, return to work and job retention for persons with physical disabilities, (Wong et al., 2021) reaffirmed while job accommodations are critical to ensuring equal access of employment for persons with disabilities, a few primary issues or concerns from employers can directly hinder the process. The first major issue the employers relayed concerned their lack of understanding job accommodations and how to effectively implement such to meet the needs and requirements of their employees. To address this employer concern, the Job Accommodation Network (JAN), a service of the U.S. Department of Labor’s Office of Disability Employment Policy (ODEP), is available to provide expert and confidential guidance regarding workplace accommodations for employers and employees free of charge.

The second concern identified by the employers within the research (Wong et al., 2021) pertained to the cost of job accommodations. However, based upon a 2019 employer survey by the Job Accommodations Network (JAN), the polled employers indicated approximately 56% of the accommodations provided did not have a cost to implement, and the remaining typically had a per occurrence expense of less than $500.00. Moreover, the surveyed employers explained the benefits of providing workplace accommodations outweighed the costs and included employee retention, improved productivity, increased morale, reduced workers compensation costs, and increased workplace diversity.

In the authors’ experiences, proactively providing and/or communicating relevant information, data and resources to employers regarding reasonable accommodations could serve to increase overall labor market opportunities for persons with severe injuries and disabilities.

TELEWORK

One possible employment avenue to consider for the accommodation of persons with severe injuries would include telework career opportunities. Job placement into likely positions and with employers allowing, or actually preferring, their employees work from home could serve to remove environmental obstacles and effectively provide greater personal flexibility. Such vocational flexibility could improve the employee’s ability to attend medical appointments, accomplish medical treatments and/or manage daily matters such as bowel and bladder programs and other activities effectively from an accessible home. Due to the labor market impacts of COVID-19, an increasing prevalence and acceptance of telework has been observed within the national economy, which is a fortunate circumstance for individuals with severe injuries.

Relative to this matter, empirical research completed by Dingel and Neiman (2020) included direct evaluation and classification of occupations which could be accomplished remotely by an employee. Specifically, the researchers analyzed data from the O*NET database, as well as survey findings from the Work Context Questionnaire and the Generalized Work Activities Questionnaire, in relation to the Standard Occupational Classification (SOC) structure established by the United States Department of Labor (USDOL). The researchers concluded 37 percent of national jobs can plausibly be performed from home. Additionally, the researchers explained:

“There is significant variation across occupations managers, educators, and those working in computers, finance, and law are largely able to work from home. Farm, construction, and production workers cannot. Workers in occupations that can be performed at home typically earn more. If we assume all occupations involve the same number of hours of work, the 37 percent of US jobs that can plausibly be performed at home account for 46 percent of all wages.”

Specifically, based upon Dingel and Neiman’s research, the following percentage share of jobs arranged within their associated greater occupational grouping could plausibly be performed at home:

Computer and Mathematical Occupations	1.00
Education, Training, and Library Occupations	0.98
Legal Occupations	0.97
Business and Financial Operations Occupations	0.88
Management Occupations	0.87
Arts, Design, Entertainment, Sports, and Media Occupations	0.76
Office and Administrative Support Occupations	0.65
Architecture and Engineering Occupations	0.61
Life, Physical, and Social Science Occupations	0.54
Community and Social Service Occupations	0.37
Sales and Related Occupations	0.28
Personal Care and Service Occupations	0.26
Protective Service Occupations	0.06
Healthcare Practitioners and Technical Occupations	0.05
Transportation and Material Moving Occupations	0.03
Healthcare Support Occupations	0.02
Farming, Fishing, and Forestry Occupations	0.01
Production Occupations	0.01
Installation, Maintenance, and Repair Occupations	0.01
Construction and Extraction Occupations	0.00
Food Preparation and Serving Related Occupations	0.00
Building and Grounds Cleaning and Maintenance Occupations	0.00

In addition, Salon et al. (2022) empirically investigated telework prevalence and future projections after the pandemic through a national survey of adults and concluded the following:

“Analyzing a nationally representative panel survey of adults, we find that 40–50% of workers expect to telecommute at least a few times per month post-pandemic, up from 24% pre-COVID. If given the option, 90–95% of those who first telecommuted during the pandemic plan to continue the practice regularly. We also find that new telecommuters are demographically similar to pre-COVID telecommuters. Both pre- and post- COVID, higher educational attainment and income, together with certain job categories, largely determine whether workers have the option to telecommute.”

In summary, telework options appear to be a growing employer trend within our national economy, which could assist persons with severe injuries during their pursuit of an appropriately planned return to employment.

CASE SCENARIO

The following hypothetical case scenario for a person with a severe injury is offered for educational and illustrative purposes:

o Paraplegia (Young Adult)

Larry Smith, a 21-year-old male, sustained a complete Spinal Cord Injury (i.e., Paraplegia) during a motor vehicle accident. After the accident, he required a manual wheelchair for mobility, but had full range of motion and strength within his upper extremities. He had to self-catheterize multiple times per day due to his neurogenic bladder, and he needed to follow a regular bowel program every other day.

At the time of the Spinal Cord Injury, Larry was set to enroll into his second year of college with intended pursuit of a major for Chemistry. He had planned to complete a pre-medical school academic track. Due to the necessary hospitalization period and rehabilitative process, Larry withdrew from college. Approximately one year after the accident, he reported being very depressed and anxious about his future, especially his career. The family hired a private Vocational Rehabilitation Counselor to assist Larry.

The Vocational Rehabilitation Counselor completed an initial assessment with Larry, which was followed by standardized testing to determine his aptitudes, career interests and work values. The initial assessment and testing were followed by a period of career counseling to pinpoint specific educational and vocational goals and objectives. Following his experiences after the Spinal Cord Injury and the care and rehabilitation which followed, Larry presented with both tested and verbalized interests for pursing a medical degree with specialization as a Physical Medicine and Rehabilitation Physician. A detailed academic pathway was developed by both Larry and the Vocational Rehabilitation Counselor through shared research, discussions and vocational assignments during the period of career counseling. Once Larry was re-enrolled into college, the Vocational Rehabilitation Counselor met with, and remained in contact with, the Disability Coordinator for the University to ensure Larry would have appropriate environmental access and classroom modifications necessary to accommodate his wheelchair and overall needs as a person with a Spinal Cord Injury throughout his period of academic study. Larry moved back into an accessible dormitory on campus and reconnected with his prior social group after encouragement and support from the Counselor. He began college classes and remained in contact with his Counselor, at least quarterly, throughout his period of education for advocacy, counsel and guidance, as needed. Upon completion of medical school and his necessary residency, onsite vocational rehabilitation services increased for Larry, including assistance with job seeking and placement. Also, the Counselor worked with Larry to hone his interviewing skills and overall comfort for discussing accommodation requirements for his work in the healthcare workplace. Consultation was completed with the Job Accommodations Network (JAN) to facilitate and support Larry’s performance of essential duties as a Physician. After three months of job searching and interviewing, Larry accepted an offer of employment. Following a successful six months of employment, at a regional rehabilitation hospital, Larry’s file was closed by the Vocational Rehabilitation Counselor, with the option to re-open, should additional career guidance, counsel and/or advocacy be needed in the future.

CONCLUSIONS

Severe injuries can significantly disrupt individuals from their active or emerging careers. When vocational displacement occurs, these individuals can benefit from working directly with a qualified and experienced Vocational Rehabilitation Counselor. An individualized plan toward a new or related career should be developed to guide such services. The plan may require academic training or focused vocational skill development to facilitate a return to gainful employment within the competitive labor market. Appropriate selection of a career path, with or without accommodations, and the development and subsequent pursuit of objectives to accomplish the intended vocational goal(s) are critical to promote financial independence for many persons with severe injuries and disabilities. Outside of the economic value, the engagement of successful employment provides many other benefits for the individual, and can mitigate many of the emotional, psychological and social challenges that often occur after severe injuries. In closing, persons with severe injuries and disabilities should not be automatically judged disqualified from the world of work. Rather, astute vocational rehabilitation assessment, with individualized planning and counsel, can serve to establish many career paths for persons with severe injuries, including those potentially not easily discerned at first appraisal. In the end, having an appropriately selected and established career can improve personal adjustment, motivation and overall quality of life for persons with severe injuries and disabilities and by virtue, is a worthy goal of pursuit.

ABOUT THE AUTHORS

Michael Fryarearned a Bachelor of Arts in Psychology from the University of North Carolina at Chapel Hill. He subsequently graduated Summa Cum Laude with a Dual Master’s in Rehabilitation Counseling and Vocational Evaluation from East Carolina University. In 2005, he completed a 120-hour post-graduate training program in life care planning through Kaplan University with lead instructor, Dr. Paul Deutsch, the founder of the life care planning process. Finally, Mr. Fryar completed his Associate Degree in Nursing at Sampson Community College. Mr. Fryar is a Certified Rehabilitation Counselor (CRC), Registered Nurse (RN), Certified Case Manager (CCM) and Certified Life Care Planner (CLCP). He is also a registered Qualified Rehabilitation Professional (QRP) through the North Carolina Industrial Commission. Mr. Fryar has worked as a Rehabilitation Charge Nurse for the brain injury, spinal cord injury and general rehabilitation units of Wake Forest University Baptist Medical Center. He has served as the past Secretary for the International Association of Rehabilitation Professionals’ (IARP) National Forensic Board. He is currently an active IARP member and is involved with the Rehabilitation and Disability Case Management (RDCM) National Board of IARP to include past appointment to the Education Subcommittee. More recently, he became Chair for the Rehabilitation and Disability Case Management (RDCM) section of IARP. Finally, Mr. Fryar was recently invited to assist in the updating of the life care planning educational program offered by the Institute of Rehabilitation and Education Training (IRET). In total, Mr. Fryar has worked over 22 years within the vocational rehabilitation, case management and life care planning fields. He provides independent case management and rehabilitative consultant services.

John Humphreys earned a Bachelor of Science in Education from the University of Georgia. He subsequently graduated from East Carolina University with a Dual Master’s in
Rehabilitation Counseling and Vocational Evaluation. Additionally, Mr. Humphreys received certification in Substance Abuse Counseling from Central Piedmont Community College. Mr. Humphreys is a Certified Rehabilitation Counselor (CRC). Prior to obtaining his master’s degree, Mr. Humphreys taught children with intellectual and developmental disabilities, as well as those with neurodiverse needs, to prepare them for work and independent living. In the field of rehabilitation, he worked as the Director of Vocational Services for Carolinas Rehabilitation Hospital of Charlotte, NC. In this role, he provided vocational rehabilitation counseling, vocational evaluation, case management, job placement, and training to individuals with acquired disabilities, such as Traumatic Brain Injuries, Strokes and Spinal Cord Injuries. Mr. Humphreys currently works as a Vocational Rehabilitation Counselor for the North Carolina Division of Services for the Blind. He manages a caseload of individuals with low vision and blindness and provides the rehabilitative assessments, counseling, and services necessary to assist each person with identifying, obtaining, and maintaining competitive employment. Mr. Humphreys has over 23 years of experience within the field of vocational rehabilitation, providing counseling, evaluation, placement, training, and case management to individuals with catastrophic injuries to ensure their successful return to work.

REFERENCES

American with Disabilities Act. Retrieved from https://www.ada.gov

Dingel, J. & Neiman, B. (2020). “How Many Jobs Can Be Done At Home?” (White Paper). Becker Friedman Institute.

Duta, A. et al. (2008). “Vocational Rehabilitation Services and Employment Outcomes for People with Disabilities: A United States Study.” Journal of Occupational Rehabilitation, 18 (4), 326-334

Job Accommodation Network (2019). Retrieved from https:// www.askjan.org

Robinson, R. (Editor). 2014. Foundations of Forensic Vocational Rehabilitation. New York, NY: Springer Publishing Company, LLC.

Salon, D. et al. (2022). “The COVID-19 Pandemic and the Future of Telecommuting in the United States.” Transportation Research, 112 (1-24). https://doi.org/10.1016/j.trd.2022.103473

Trenaman, L. et al. (2014). “Review Interventions for Improving Employment Outcomes

Among Individuals with Spinal Cord Injury: A Systematic review.” Spinal Cord, (52), 788-794.

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Ullah, M. et al. (2017). “The Meaning of Work After Spinal Cord Injury: A Scoping Review. Spinal Cord, (56), 92-105. doi:10.1038/s41393-017-0006-6

United States Department of Labor. Job Accommodations. Retrieved https://www.dol.gov/

general/topic/disability/jobaccommodations.

Weed, R. & Field, T (editors). 2012. Rehabilitation Consultant’s Handbook (4^th ed.) Athens, Ga.: Elliott & Fitzpatrick Inc.

Wong, J. et al. (2021). “Job Accommodations, Return to Work and Job Retention of People with Physical Disabilities: A Systematic Review.” Journal of Occupational Rehabilitation, (31), 474-490. doi:https://doi.org/10.1007/s10926-020-09954-3

World Health Organization. (2001). International Classification of Functioning, Disability and Health. Geneva, Switzerland.

Inquis Global is a 2023 Titanium Partner of NCADA.

The Odyssey E-Filing System Will Increase Efficiency & Accessibility: NC Welcomes E-Filing with Recent Rule Amendments

Lynette Pitt — Wed, 22 Feb 2023 19:56:33 GMT

by J.D. McAlister, McAngus Goudelock & Courie, LLC

NORTH CAROLINA WELCOMES ELECTRONIC FILING VIA ODYSSEY WITH AMENDMENTS TO RULE 5 AND 5.1 OF THE GENERAL RULES OF PRACTICE FOR THE SUPERIOR AND DISTRICT COURTS.

On February 13, 2023, North Carolina Supreme Court executed an Order amending the existing Rule 5 and Rule 5.1 of the General Rules of Practice for the Superior and District Courts, pursuant to its authority under N.C. Gen. Stat. § 7A-34. The need for the Amendment arose from the upcoming implementation of the new electronic filing system rolling out statewide - Odyssey. Many of us have been anticipating implementation of the system for the past few years. Odyssey will eliminate mailing delays, promote the ability to access documents remotely or outside of regular business hours, and substantially reduce excessive (sometimes) amounts of paper traded between the parties and the Court. However, the conversion in practice and procedure practice with respect to filings will require some adjustment, and likely create some turmoil (at least in the initial stages).

Despite best efforts, the COVID-19 pandemic thwarted the initial plans for the implementation of Odyssey, delaying the roll out statewide. Comments to the Order Amending Rule 5 reference the original plan to launch Odyssey in July 2021 and to expend the system to all counties within a five (5) year timeframe. Obviously, that did not happen. However, the COVID-19 pandemic did force changes in practice that helped acclimate attorneys to electronic practice in many respects, helping blunt any sudden impact of the transition to Odyssey. The amendment of Rule 5 of the North Carolina Rules of Civil Procedure in late 2020 to permit service in most situations via e-mail is an example of one such change.

The North Carolina Judicial Branch coordinated sample programs over the past two (2) years, in order to identify and address issues that may arise prior to the full launch of Odyssey statewide. The system is now ready, and officially became interactive for four select counties as of February 2023: Harnett, Johnson, Lee, and Wake. The current plan is to expand Odyssey to the remaining counties by 2025.

The advent of Odyssey will now allow for electronic filing 24 hours a day; 7 days a week, and, 365 days a year; will permit service on all counsel of record, or parties, contemporaneously with filing; will enable access to documents and grant the ability to secure file stamped copies without a trip to the courthouse; and, expand the options to make necessary payments online.

The Court executed the Order following conference on February 1, 2023. The Order mandates an effective date of February 13, 2023. In the four counties in which Odyssey is now operational (Harnett, Johnson, Lee, and Wake) attorneys must file via the electronic system. An overview of the pertinent changes ushered in by the new amended Rule 5, includes the following non-exhaustive list of changes:

1) Every attorney will need to register individually for an account on the Odyssey system in order to use it;

2) As of February 13, 2023, attorneys in counties where the Odyssey system is active (Harnett, Lee, Johnson, and Wake) are now required to file all documents via the system.

3) In the event there is an issue with the Odyssey system (referenced in the Order as a service outage, natural disaster, or other emergency) the attorney may then file, in paper, a motion seeking relief to file the document in paper or seeking other relief. If pursuing this alternative option, the attorney must attach the document to the motion. It is not the intent of this provision to permit the court to extend time or periods of limitation; the Court may only provide relief as permitted by law.

4) Parties not represented by an attorney may secure an Odyssey account, and are encouraged to file using the system, but are not required to do so.

5) There is no longer a need for attorneys, in most instances, to physically sign documents. A “\s\” notation followed by the attorney’s electronically printed name is sufficient to indicate signature on the document. Attorneys may also include electronic signature lines for other counsel involved in the action, so long as the other counsel agree to the form and substance of the document. Any attorney filing a document bearing the electronic signature of another attorney certifies by filing that the other attorney(s) have agreed to the form and substance of the document, and provided authority to submit the document on his/her/their behalf.

6) The Court, absent exceptional circumstances, must sign and file its orders, judgments, decrees, and other documents via Odyssey.

7) For all electronically filed documents in Odyssey, the time of filing will be the time the electronic system receives the document – as evidenced on the face of the document. Previously, the timing of filing was the time at which the Clerk physically stamps the document. Upon filing, Odyssey will generate a Notification of Service that operates as an “automated certificate of service” in satisfaction of Rule 5(b1) of the North Carolina Rules of Civil Procedure.

8) Paper documents remain “filed” at the time the Clerk of Court, or a judicial official authorized by law to accept the document, file-stamps the document. Documents filed by the court generally follow the same timing component as paper documents, except that the file stamp is electronic.

9) A filer may withdraw a document after electronically submitted, up until the time the Clerk of Court or a judicial official authorized by law to accept the document begins processing it.

10) The Clerk of Court or a judicial official authorized by law to accept the document also has the ability to reject improperly filed documents. Such situations may include when a document filed violates an order (such as a Gatekeeper Order), statute, or rule; when the filer submits a rejection request; and/or, when the document submitted is corrupt or quarantined for containing a virus or malicious software.

As of now, the deadline for filing documents remains 5:00 PM on the date a filing is due. Any document received by the system after the 5:00 PM deadline is considered “late filed” – treated as if filed on the following business day. This remains consistent with the current General Rules of Practice for the Superior and District Courts and the North Carolina Rules of Civil Procedure.

The comments addressing the amendments note that additional changes may be required to as Odyssey is rolled out statewide. It is plausible to envision there may be an eventual amendment that will extend the deadline to file on a given day up until 11:59:59 PM, consistent with the Federal Rules of Practice and Civil Procedure. Other states implementing Odyssey have made such changes. Neighboring state Tennessee, which authorized electronic filing in civil trial courts in 2010, implemented a time and deadline change to allow “timely filings” any time up until 11:59:59 PM, after rolling out Odyssey as its electronic filing system. The only caveat being that such documents still must be eventually “accepted” by the Clerk of Court upon review to be considered timely.

Overall, once up to speed, use of the Odyssey electronic filing system should make practice and procedure more efficient, accessible, streamlined, and cost-effective, for both attorneys, judicial officers and personnel, and the public. The key to a successful transition will require embracing technology, adaptability, and a healthy dose of patience. With respect to the latter, it is imperative to recognize that our Clerks of Court, associated personnel, and other judicial officials are also in the midst of this transition – please be kind and patient as we all adapt to the implementation of Odyssey.

No matter your position on “going virtual” continued changes to the practice of law and procedure will be substantially influenced by advances in technology, and will continue to become our new reality.

Please take the time to familiarize yourself with these new changes, including training for use of the Odyssey electronic filing system. You may find the below links, which include instructions and tutorials, helpful in your effort to prepare for implementation of Odyssey in your county:

eCourts | North Carolina Judicial Branch

NC Courts YouTube Channel

Conversations with a Mentor

Thu, 26 Jan 2023 15:28:03 GMT

By: Ryan D. Eubanks, Sumrell Sugg PA

A vital part of achieving professional success as a young attorney is the wisdom, guidance, and support of a good mentor. However, often times the insight, advice, and war stories that help shape the young attorneys in a firm do not make it any farther than the four walls of that corner office. As part of this series, the North Carolina Association of Defense Attorneys will seek to highlight mentors throughout the state whose insight helps mold the next generation of defense attorneys, so that all of our members, but particularly our young attorneys, can benefit from it. Today’s words of wisdom come from a conversation I had with my mentor, Scott C. Hart. Scott is the managing partner at Sumrell Sugg, P.A. in New Bern, North Carolina. He has been practicing law for over 30 years (yes, as young lawyers, that is longer than some of us have been alive) and is a past member of the Board of Directors for the North Carolina Association of Defense Attorneys. He primarily focuses his practice area on insurance defense, mediation, and arbitration.

What was the best advice you were given as a young lawyer?

Try the case, not the other lawyer. I remember coming into a senior partner’s office because I was so upset about what another lawyer was doing, and I had all these ideas about how I was going to try to deal with that other lawyer. The senior partner looked at me and he said, ‘you need to try the case and not the other lawyer.’ He told me, ‘your objectivity is the most valuable thing that you can provide to your client, and if you lose your objectivity because of how you feel about the other lawyer, you cannot provide anything to your client.’ That was the best advice I ever got.

What do you believe is the appropriate work-life balance for a young attorney?

I think every experienced lawyer, on some level, probably thinks that he or she had it more difficult than the current young lawyers do, and they are probably wrong about that. The practice of law is far more efficient than it used to be because of computerized research, not just legal research but research generally. The ability to do video interviews and depositions and the use of email, text messages, and cell phones allow attorneys to get a lot more done in a shorter period of time. And so, I think lawyers that are learning how to practice now have more opportunities to get things done because of that efficiency. But I have also seen too many people burn out because they do not take care of themselves. I think it is important to focus on work while you are at work, but you also have to learn the skill of being able to close your office door at the end of the day and walk away from whatever is waiting on your desk. That means figuring out a way to get as much done as you can while you are at the office and figuring out a way to leave it behind when you are not. That is a tough thing to figure out. I think that balance is different for everybody. Some people can handle checking and returning emails late in the evening because it helps them to sleep knowing any issues have been addressed. Some people are better at saying, ‘I am not going to look at my email or respond to anything that comes in after seven or eight o’clock at night.’ I think you need to find out what works best for you. I think it is also important to find hobbies outside of your practice and to get physical exercise. It is important to find time to include those things in your schedule so you can feel like you are doing things that are for you and that you enjoy doing. It is a difficult job, and you will spend a lot of years doing it. If you burn yourself out by the time you are thirty-five, you have defeated the purpose.

What advice do you have for a young attorney who is feeling overwhelmed with their caseload?

I think every successful lawyer occasionally feels overwhelmed by their caseload. Sometimes it is helpful when that happens to carve out some time when no one is in the office to sit down and organize what is on your desk to make sure that you have a sense of what needs to get done. Whether that time is right after the office closes one evening, or coming in early one day, or coming in for an hour or two on a weekend just to kind of get a sense of what needs to be done so that you can handle it a little bit at a time. In my experience, what typically makes you feel overwhelmed is the total volume. The individual tasks are always doable, it is the number of them that overwhelms you. So if you can sit down and figure out how you are going to get through accomplishing each of those tasks, it will feel like it is much more achievable. Do not look at the whole; look at the parts.

Do you think it is important for young attorneys to be involved in organizations outside of the legal profession, whether it is a kickball league or the board of a local nonprofit organization?

Yes, 100 percent. It is good for your career to be able to interact with other professionals and to be a part of your community, but it is also just good for you as a person to be well-rounded and to be involved in things. It helps you realize that there are things going on in your community outside of your law firm. I also think it is important to be involved in legal organizations like the NCADA or the NCBA to be able to interact with other lawyers outside of your law firm and outside of your town because you can learn a tremendous amount from how other people are doing things. It is also nice to know that there are other people that are basically going through the same things that you are going through.

There are certain areas that you can learn. The question is whether you can be competent to provide the legal services because you have an ethical obligation to make sure before you take a case or a matter that you can competently provide those services. So if someone comes to you and asks you to work on a matter that requires a tremendous amount of technical skill and you do not have that, and no one in your firm has that, and you cannot associate someone to walk you through it, then I think you are making a mistake handling that matter. If you have got those resources available to you, either inside or outside of your firm, so that you have a chance to learn that area through that process, then it is helpful. There are certain areas that are highly technical, areas like tax, finance, and banking, that I would be very hesitant to try to do if you did not have mentoring and expertise. Before you write a will or handle an estate, you want to absolutely make sure that you understand the law well enough to provide those services competently because there can be major repercussions if something is done incorrectly. I think the key is making sure that you have resources and mentoring or guidance from other lawyers and that you can learn thoroughly the area that you need for that case before you take it.

What is one thing you know now that you wish you knew when you first started practicing law?

I wish I would have known how quickly the time was going to pass. I wish I had appreciated more the times that I spent with other lawyers working on cases. I was so busy and so wrapped up in taking care of that case and moving on to the next one that I often did not take the time to step back and reflect on how much I was enjoying it. Before I knew it, I blinked, and 30 years were gone. I wish I had known how fast it would go.

What trial tips do you have for young attorneys?

I think the most important thing that a young trial lawyer can do is make sure that you come into trial with a theory and a theme and that you keep those two things in mind throughout the trial. Be willing to shift if you need to because of unexpected things that happen in the trial itself. But you have got to look at the case as it is being presented to the jury through the lens of your theme and theory of the case so that you make sure you are able to present a consistent message to the jury.

How should a young attorney prepare for their first trial?

You should write everything out that you can and try your best to prepare for every eventuality that may happen. By writing out, I mean write out your plan for your jury voir dire, your plan for your opening statement, your plan for direct and cross-examinations, and your plan for your closing. You will likely not actually follow what you have written down to the letter, but the exercise of writing it down will help you organize it. As you progress in your career, and the more cases that you try, it will become less important to write everything down in advance, but I think that it is helpful for young attorneys as they get used to trying cases. You should also try to think of every potential eventuality of what the other side might do and think about what your response will be so that you have already thought through a number of different possibilities and in your mind plotted out a way to respond to each of them.

What mediation tips do you have for young attorneys?

You should assume that your case concludes at or shortly after mediation. It is a mistake to assume that mediation is just one step in the case. If you do not go into mediation hoping to utilize it to its greatest effect, you will not get the greatest benefit out of it. We know that most cases end in mediation or shortly thereafter, so you should plan for that. You should structure your discovery around the mediation because your case is more likely to end at mediation because of the good job you did in discovery than it is to end with a jury verdict. Not that many cases get to go to trial anymore. So prepare for discovery and prepare for mediation as if they are the determining aspects of your case. They probably are.

Is it helpful to start with a reasonable response to an opening demand in mediation, or should a young attorney start with a low offer?

If you are on the defense side, in almost every case, I think you are most effective by making an aggressive opening offer and then, if necessary, making smaller moves from that point. A lowball offer almost always results in bad blood that slows the process down. If your goal is to settle your case, then you are more likely to do so with an aggressive opening move than you are with a lowball opening move.

What deposition tips do you have for young attorneys?

Prepare for your depositions as if your case depends on them. Have an outline that you use as your backbone for all of your depositions because then, no matter what happens, you have a structure that you can follow that is logical and covers not only background information but the facts of your case. Prepare for the deposition as if you were going to be taking someone’s trial testimony. Be prepared by doing a background investigation on the witness to try to find out everything you can about that witness and read their written discovery. Because a deposition is your opportunity put a witness on the spot, get their testimony, and evaluate how they perform, you need to be prepared in order to make sure you get the best out of that.

I know in your depositions you do not introduce a lot of exhibits. What is your thinking behind that, and do you recommend that to others?

I think it is a personal preference thing. I know some lawyers who are extremely effective and who use lots of exhibits in their depositions. I have always tried in my depositions to focus on how a witness is handling my questions, and I can do that better by focusing my attention on the witness and their answers rather than giving them an exhibit. I also want to know how they are going to respond to me without the benefit of having something in front of them to refer to. But I am always willing, if they have given me information that is contrary to something that I have, to put an exhibit in front of them that shows they are inconsistent. I usually bring exhibits, but I often don’t use them. I never admit exhibits just for the sake of having them.

What are the most common mistakes you see young attorneys make, and how can those mistakes be avoided?

The biggest mistake I see young lawyers make is being unpleasant to other lawyers. This job is stressful enough without unnecessarily getting into fights with lawyers on the other side or on the same side about cases. In my experience, most disputes can be worked out between lawyers behaving reasonably. I think too many young lawyers think that their job is to be in a constant state of altercation, and I do not think that is helpful at all. Some of my best friends are people that I have had on the other side of cases, that I became good friends with during the case, and who I respected and trusted a great deal. We did battle in court when we needed to, but I also trusted them at their word and respected them for the job that they were doing. There is no need for things to become personal, and it should not ever become personal. As a young attorney, there is something to be said for building trust and relationships with attorneys on the opposing side because you will almost certainly see them again, and building those relationships may pay off for you and your clients later in your career. Be prepared, be professional, and be pleasant. Those are the three most important things I think a lawyer can do to cement their reputation. Be prepared for your case to make sure that nothing happens that you haven’t spent time thinking about and preparing for. Be professional and make sure that you are being courteous and providing good communication with other lawyers, and treating them the way you would want to be treated. Be pleasant, be enjoyable to work with, and be a nice person; it is not going to hurt your client, and it will make your life a lot more fun.

What has impressed you the most about the young attorneys that you have come into contact with?

Because law school has become so expensive, people only go to law school if they really want to be lawyers. When I went to school law school, it was relatively inexpensive, and there were people who did it because they did not know what else they wanted to do. Because it is now such a financial commitment, I think that the people that are going into it really want to do it and do it well. So, the commitment that I have seen in young lawyers has been impressive to me. I also think that our law schools are doing a good job of training our young lawyers for legal analysis. That is a skill that is very helpful for a young lawyer, and I have been impressed with that.

What tips do you have for young attorneys that want to continue to advance professionally?

Find practice areas and cases that you have a passion for because if you truly enjoy the work, you will excel at it. Clients will find you, work will find you, and you will be successful. Do not get caught up in how profitable it is because if it makes you happy and challenges you, that is the work you should be doing.

What advice do you have for a young attorney who finds themselves facing off against a more experienced attorney?

You cannot control the facts of your case, and you cannot control how much age and experience the other side has, but you can control how hard you work in preparing the case. You can make sure that you never go into a deposition, a mediation, a hearing, or a trial where you have been outworked. There is at least a decent chance that the older, more experienced lawyer may not have had the time that you have been able to commit to it. They do not simply provide victories to the person with the grayest hair.

Do you think experienced staff should play a role in guiding a young attorney?

Absolutely. I think an experienced legal assistant or paralegal can be a huge help to a young lawyer in trying to figure out how to do things. Young lawyers should be open to listening to experienced staff. Some of the best judges I have ever seen learned more from the clerks than from anybody else. Do not think that just because you have a law degree hanging on your wall that there is nothing you can learn from anybody else in the building.

What risks should a young attorney be willing to take?

I think you should always be willing to run the risk that you are going to lose a case. If you are a defense lawyer, the better you are at defending cases, the more difficult cases you are going to get, and you are not going to get to win all of those. It is not your job to win every case; it is your job to provide good legal advice and to fully evaluate and handle your cases. So, do not get wrapped up in the wins and losses, they are really meaningless.

If you are interest in submitting a “Conversations with a Mentor” article for publication, please contact Ryan Eubanks (reubanks@nclawyers.com) or Halee Morris (halee.morris@mgclaw.com).

North Carolina Full Commission Reaffirms Applying Revised Standard in Third Extended Benefits Decision

Thu, 17 Nov 2022 13:25:31 GMT

By Tracey Jones and Heather Baker, Teague Campbell

On July 26, 2022, the Full Commission issued another extended benefits decision, Messick v. Walmart Stores, Inc. The panel consisted of Vice-Chair Griffin, Commissioner Taylor and Commissioner Goodman. In this case, the Full Commission awarded the claimant extended benefits. The issue of extended benefits was not an issue at the Deputy Commissioner level. The Deputy Commissioner issued an Opinion and Award finding compensable aggravations to claimant’s pre-existing left knee condition and mental health condition, awarded ongoing TTD benefits, and ordered payment for claimant’s dental treatment related to a post-accident fall. Defendants did not appeal the findings or conclusions related to causation, but appealed on the issue of whether the first date of disability versus the date of injury was controlling in regard to determining the indemnity benefits and/or extended benefits owed to claimant under N.C.G.S. § 97-29.

Claimant sustained two compensable injuries; one to her lumbar spine and another to her right knee. Her lumbar spine injury was pre-2011 statutory reform and her right knee injury was post-2011 reform. Both injuries were accepted by Defendants. Defendants also authorized benefits for psychological treatment as a part of the claim. Ultimately, claimant required, among other treatment, a spinal cord stimulator, a knee replacement surgery, and a knee replacement revision procedure, along with increased psychological treatment for depression, which included a 20-day psychological support and physical reconditioning program where she weaned off Oxycodone. Eventually, claimant’s left knee became problematic, and she required a left total knee replacement, which claimant’s doctor opined was the result of her accepted right knee injury. She was ultimately assessed with failed back syndrome, chronic low lumbar pain, and chronic knee pain.

As a part of litigation, the parties deposed nine experts, consisting of claimant’s medical providers and claimant’s vocational expert. In terms of disability, many providers deferred to other providers and/or a vocational expert, and claimant was assigned permanent sedentary restrictions with no repetitive bending or stooping; no lifting more than twenty pounds; no twisting; no kneeling; no climbing ladders or stairs; no walking more than forty yards at a time; and no sitting or standing for more than thirty minutes at a time. The claimant’s vocational expert concluded that there was no reasonable vocational probability that claimant would be able to secure a job and maintain gainful employment. He testified she had a total loss of wage-earning capacity, despite noting that claimant expressed multiple times she would prefer to be working and productive.

The good news is the Full Commission, in keeping with it’s other extend benefits decisions, clearly states that the standard in extended benefits cases is different than the normal standard for proving entitlement to temporary total disability benefits. Applying the revised standard set forth in the 2011 revisions to N.C. Gen. Stat. § 97-29(c), the Full Commission reiterated that to establish entitlement to extended compensation, a plaintiff must show that they have a total loss of the ability to earn wages in any employment. See N.C. Gen. Stat. § 97-29(c) (2021).

However, the Full Commission found the vocational expert’s opinion credible and concluded there were no jobs in the job market within claimant’s functional capabilities. The Commission found ongoing disability for claimant’s pre-reform injury, and the Commission also found a total loss of wage-earning capacity due to her compensable injury for the second post-reform injury. Claimant was awarded ongoing medical benefits and TTD benefits for the pre-reform injury until claimant returns to work or until further order by the Commission and awarded extended benefits for the post-reform injury. The Commission focused on claimant’s chronic pain, age, and length of time from being in any academic situation and relied on the only vocational expert to testify in the case to conclude that claimant has sustained a total loss of her wage-earning capacity.

Takeaways for Defendants

This Opinion and Award once again demonstrates the importance of expert testimony in these extended benefit cases. The physicians deposed all found claimant’s pain complaints credible and either would not comment on claimant’s ability to work or deferred to a vocational expert as to whether there were jobs available that claimant could perform. The only vocational expert that was deposed clearly testified that claimant had suffered a total loss of wage-earning capacity because of her restrictions and chronic pain complaints. In order for defendants to successfully defend these cases, they must retain or have testimony from both medical and vocational experts that the claimant has some wage earning capacity. If defendants can successfully present this evidence, past cases suggest that they will prevail and extended benefits will not be awarded.

‘Tis the Season...For New Workers' Comp Claims?

Thu, 17 Nov 2022 13:22:03 GMT

By Elizabeth Ligon, Teague Campbell

Whether for team building or to celebrate the upcoming holidays, we often see a resurgence of off-site, employer-sponsored events this time of year, which also means an uptick in questions about whether injuries that occur at these types of events are compensable under the North Carolina Workers’ Compensation Act. As with most legal questions, the answer is oftentimes “it depends.” The general rule involving these off-site events is if an employer provides an occasion for recreation or an outing for employees and invites them to participate - but does not require them to do so - and an employee is injured while engaged in the activities, such injury does not arise out of the employment. However, the courts will consider several factors to determine whether an injury occurring at an event is compensable, including whether the event was sponsored and financed by the employer, the extent the employer encouraged their employees to attend the event, and the extent that the employer benefited from the event.

What does case law say?

In Chilton v. Bowman Gray School of Medicine, 45 N.C. App. 13, 262 S.E.2d 347 (1980), the Radiology Department of the hospital organized and paid for a picnic for members of the faculty and new residents to become acquainted. Employees felt no direct pressure to attend, but some employees testified that they felt that they should go to the picnic. During a volleyball game at the picnic, an employee broke his ankle. The Court of Appeals considered several factors to determine whether an injury at an employer-sponsored recreational event was compensable, including:

Did the employer in fact sponsor the event?;
To what extent was attendance voluntary?;
Was there some degree of encouragement to attend evidenced by such factors as taking a record of attendance, paying for the time spent or requiring the employee to work if he did not attend, or maintaining a known custom of attending?;
Did the employer finance the occasion to a substantial extent?;
Did the employees regard it as an employment benefit to which they were entitled as of right?; and
Did the employer benefit from the event, not merely in a vague way through better morale and goodwill, but through such tangible advantages as having an opportunity to make speeches and awards?

After considering these factors, the Court of Appeals found the injury not compensable because it was not clear that the Radiology Department sponsored the picnic; the event seemed to be a self-perpetuating one that occurred each year more because of tradition than from any initiative taken by the Department heads; attendance was voluntary; no record of attendance was taken; the participants were not paid for the time spent, nor was any employee required to work at the medical school if he did not attend; the picnic was not an event that employees regarded as being a benefit to which he was entitled as a matter of right; and the Radiology Department did not utilize the picnic as an opportunity to give a “pep” talk or grant awards.

However, the Court came to a different conclusion in Holliday v. Tropical Nut & Fruit Co., 242 N.C. App. 562, 775 S.E.2d 885 (2015). There. the employer required the claimant to attend a three-day conference. On the first evening of the conference, the employer organized a bowling and laser tag social event for the employees in attendance. The employer paid all expenses for the event, assigned employees to teams, and told each employee which activities they would be participating in upon arrival. The claimant was assigned laser tag. Approximately 15 minutes into the game, he began to feel sharp pain in his knee. After the game concluded, he immediately informed his general manager that he thought he had hurt his knee, but he was able to attend the remainder of the conference.

The North Carolina Court of Appeals held that, since the employer required its employees to attend the conference, encouraged their participation in activities, and derived a business benefit from the event as a whole due to the team building and networking opportunities of the sporting events, the claimant's injury arose out of his employment. The Court further noted that the conference and the claimant's participation in all events during the conference were scheduled by the employer and were calculated to further, directly or indirectly, the employer’s business.

Considerations

When considering whether an injury occurring at a work event would be compensable, evaluate whether the work event is sponsored and/or financed by the employer, and whether the employee’s attendance is mandatory. Team building activities are important, but in order to minimize your exposure, voluntariness is key. If an employee is injured at an event sponsored and financed by their employer and participation is mandatory, the injury will most likely be found compensable.

Air bags: debunking the myths… it’s not rocket science, or is it?

Thu, 25 Aug 2022 14:23:40 GMT

John G. Bauer, BSME, MEM, P.E., Rimkus

Air bags in vehicles have become quite commonplace. They are neatly tucked away and mostly unseen, so most people don’t give them much thought… until there’s a crash. Then, people start asking questions. “Why didn’t my air bag deploy?” “Why did my air bag deploy?” “After the impact, my air bag was smoking… was it on fire?” “The air bag is supposed to cushion me… why did it break my nose and glasses?” “What happened to Tiger Woods? Why didn’t his vehicle have an air bag for his lower legs?” “How do knee air bags work?” It’s not rocket science, or is it?

A little history

The first automotive barrier crash test, conducted at GM in 1934, was an early milestone in vehicle safety. In the late ‘40s and early ‘50s, seat belts began being offered in cars, and the first patents for early air bag designs were filed in 1951 (Figure 1). The inventors of those original air bag devices were limited by compressed air or gas technology of that time; but compressed gas could not fill the bags fast enough, and crash sensing had not been invented yet. So, the concept of automotive air bags stayed “deflated” for several years.

Figure 1. Early patent of automotive air bags

Then, in the late ‘60s, Allen Breed developed a ball-in-tube electromechanical sensor that could detect a crash and close a circuit to deploy an air bag. Also, at about that time, aerospace companies like Talley and Thiokol had been researching solid propellant applications for rocket boosters, military aircraft pilot ejection systems… and automotive air bags.

Breed’s sensor designs and some aerospace rocket science led the way to the actual implementation of air bags in passenger vehicles. Ford and GM began installing air bags in automotive test fleets in the early ‘70s, and the first passenger air bag was sold to the public in the 1973 Oldsmobile Toronado. In 1981 at the Geneva Motor Show, Mercedes-Benz announced a driver air bag and pyrotechnic passenger belt tensioner for the new S-Class (Figure 2). Automatic seat belts or air bags were required in US passenger vehicles in the late ‘80s. After initially fighting their implementation – like a lot of auto industry leaders -- Lee Iacocca decided to gamble and offered driver air bags as standard equipment on several Chrysler models. The bet paid off, and the industry found that “safety sells.” The rest, as they say, is history.

Figure 2. Mercedes-Benz circa 1981

Air bag myth #1

“My air bag didn’t deploy, so it must have been defective.”

Air bags are very reliable. The automotive industry was very cautious before finally embracing air bag technology. Air bags were – and still are – carefully designed, tested, and vetted. Since they are inherently dangerous, special precautions are taken to make sure they work as intended. Also, air bags are only intended to deploy in certain situations.

Air bags are not set to inflate based primarily on the speed of the vehicle. Deployment depends on the object struck, the impact direction, and how rapidly the vehicle changes speed or slows down. Is the struck object fixed or moving, rigid or deformable, narrow or wide?

Early air bag systems were designed to only function in frontal or near-frontal crashes. Later, side impact air bags were developed. Then, rollover air bags were introduced to complement and utilize the side air bags. More recently, knee air bags, inflatable seat belts, rear impact air bags, and others are being developed and introduced. Some vehicles have active head restraints or “deployable” headrests for rear impacts, but those devices currently are mechanically activated and do not use air bag technology. Crash sensors detect impact “forces” or roll characteristics. Deployment thresholds are then used to determine if the air bags should inflate (Figure 3).

Figure 3. Deployment thresholds (Okamura, et.al., 26ESV-19-000248)

Air bags are designed to inflate only if the applicable deployment threshold is exceeded. Deployment thresholds are mostly based on crash severity, usually some function of acceleration (or deceleration). The threshold is set to deploy air bags only in moderate to severe crashes to reduce the potential for serious injuries. More advanced vehicle restraint systems use thresholds based on crash severity, driver and passenger belted status, front seat position, and front passenger occupant size and weight.

Most vehicles built since the late 1980s have air bags. For those vehicles equipped with air bags, nearly all will have one or more frontal air bags. The most common is the driver frontal air bag located in the steering wheel. A larger frontal air bag for the outboard front passenger is also very common. More recent examples of frontal air bags include knee air bags for the driver and outboard front passenger. Frontal air bags are designed for frontal and near-frontal crashes and are not intended to deploy in rear impacts, rollovers, or many side impacts.

Side air bags are set to inflate in side impacts and sometimes rollover crashes. Air bags for side impacts must deploy very early and fast because the gap between the occupant and door is small, and that gap often “closes” rapidly due to the intruding vehicle or object. Side impact sensors are usually solid-state accelerometers or pressure sensors in the doors or side pillars. Like frontal air bags, most side air bags are vented and quickly deflate. Since rollover crashes can last up to 6 seconds or more, rollover air bags need to stay inflated for about 6 seconds and are, therefore, coated and sealed. Some side curtain air bags are designed only for side impacts. Other side curtain air bags have been developed for side impacts and rollover crashes.

Each vehicle model is relatively unique with its own specific size, weight, and structure. Therefore, each vehicle model has its own unique crash “signature” and reacts to crashes differently than other models. To account for this, the air bag sensor system for each vehicle model is calibrated specifically for that vehicle model, and that model only. Many tests and various simulations are conducted and used for air bag sensor calibrations. In addition to standard frontal, angular, side, rear, and rollover crash tests, rough road and other abuse tests like curb impacts and undercarriage strikes are used.

Vehicle crashes can be very complicated and somewhat chaotic events, so it is very difficult and often impossible to replicate actual crashes with tests. Many crashes include multiple impacts and directions and are a small collection of different events. Some develop very quickly, while others develop slowly over several seconds. Due to thorough design and development, air bag sensor calibration is usually quite robust and can assess most crashes and make the proper decision to deploy or not deploy. Although rare, air bag systems can and do occasionally fail to deploy or deploy inadvertently. Before concluding a defect occurred, the conditions of the crash and the vehicle specifications must be carefully examined.

Air bag myth #2

“Air bags pop out after the car stops, like in the movies.”

For most of us, we realize what we see on the big screen is not always completely accurate. Hollywood often takes liberties with physics, with science, with technology, and with air bags. Although not meant to be authentic, one of my favorite portrayals is the Jiffy Pop popcorn air bag by Saturday Night Live (SNL) (Figure 4).

Figure 4. Jiffy Pop air bag (SNL)

Air bags usually deploy a fraction of a second after impact. For example, during a 30-mph frontal barrier test, the occupant begins moving relative to the vehicle in about 15 milliseconds (0.015 second). The occupant continues to move about 5 inches over the next 30 milliseconds. Since a typical driver frontal air bag inflates in about 30 milliseconds, the decision window for air bag deployment is the first 15 milliseconds during that type of crash. So, for a 30-mph frontal, deployment occurs after about 15 milliseconds, air bag inflation in about 30 milliseconds, occupant ride-down over another 50 milliseconds, and occupant rebound back into the seat in about 100 milliseconds or more. The vehicle comes to a brief stop and begins to rebound in about 90 milliseconds, just before the occupant reaches maximum ride-down. The vehicle rebounds or bounces back and comes to rest “long” after the air bag has deployed.

According to various sources, the duration of an eye blink is 100 to 400 milliseconds. Air bags deploy in 30 to 60 milliseconds… “less than the blink of an eye.”

Air bag myth #3

“Air bags are soft cushions or pillows.”

As just described, air bags inflate very fast. As they unfold and deploy, the filling bag front can reach speeds of 100 to 200 mph. Also, most are designed to protect belted and unbelted occupants. To restrain an occupant in a moderate-to-severe crash, an air bag may need to exert a force of 1,000 to 3,000 pounds or more on the occupant. That means the air bag must pressurize and be quite firm for a short time. The air bag is usually porous or vented and allows gas to quickly escape to properly manage the occupant’s energy and allow the occupant to “ride down” the air bag (Figure 5).

Figure 5. Air bag ride-down (phandwc.com)

Air bags are designed to help stop an occupant with a substantial amount of kinetic energy in a crash. Crash forces can be quite high, so the air bag must be firm, not soft. Occasionally, drivers break their eyeglasses or nose when contacting the air bag. The air bag must also deflate rapidly in a controlled fashion to avoid excessively high forces that could seriously injure the occupant.

Air bag myth #4

“My car has air bags, so I don’t need to wear a seat belt.”

Seat belts are primary restraints. Air bags are designed to be supplemental restraints. While air bags will provide some protection for unbelted occupants, air bags alone cannot prevent all injuries. Air bags work best when used in conjunction with seat belts.

Unbelted occupants will normally experience much more movement or “excursion” during a crash, when compared to a belted occupant. For example, a front seat unbelted occupant will travel forward and hit his knees on the lower dash panel, known as the knee bolster, during a frontal crash. Knee bolsters are typically steel or structural plastic panels covered by trim. They are designed to absorb occupant crash energy, but they are relatively hard and rigid. Also, an unbelted occupant is much more likely to penetrate through, miss, or slide off the air bag and strike an interior component like the header, A-pillar, or windshield.

Even worse, an unbelted occupant can easily be ejected from the vehicle during a crash (Figure 6). Ejection from the vehicle is extremely dangerous. It is much safer to remain inside the vehicle during a crash. It is not safer to be thrown clear of the vehicle (another myth). According to National Highway Traffic Safety Administration (NHTSA) (safercar.gov), only two percent of all crashes involved a rollover, but rollovers accounted for 35 percent of all traffic fatalities due to partial or full occupant ejection and other factors.

Figure 6. Occupant ejection through windshield (abcnews.go.com)

Air bag myth #5

“My air bag was smoking, so it must have been on fire.”

All air bags are inflated by gas-generating devices that include some type of ignition train. An igniter or “squib” is a small “micro” gas generator that starts the inflation process. The squib produces a small amount of hot gas that ignites booster material, which in turn produces more hot gas that ignites the main solid propellant. The propellant converts to harmless nitrogen gas and fills the bag. Hybrid-technology air bag inflators use a smaller amount of solid fuel to heat compressed gas that expands and fills the bag.

Some smoke or widely dispersed particulates are produced as a byproduct of air bag inflator ignition and deployment. Most of the heavy particulates are trapped by filters in the inflator, but some of the smallest particulates pass by the filters and enter the bag as smoke. Since the bag is typically stitched and semi-porous or vented, some of the smoke exits the bag during deflation. That smoke is visible inside the vehicle but is mostly harmless. The smoke is a normal byproduct; it does not mean the air bag was on fire.

Early air bag cushions were made from state-of-the-art fabric at that time. Since fabric long-term aging and friction were concerns, the air bag cushions were often coated with cornstarch or talcum powder to keep the fabric soft and lubricated. With the advancement of better fabrics over time, the use of cornstarch or talcum powder on air bags was abandoned many years ago.

What happened to Tiger Woods

As you likely heard, Tiger Woods was involved in a very serious car crash a while back. He was reportedly traveling north on a curvy downhill stretch of road in Los Angeles County, on his way to a TV shoot with other celebrities. Tiger was driving a 2021 Genesis GV80 SUV.

Police said the Genesis contacted the dividing median and struck a wooden sign before crossing two southbound lanes. The Genesis then reportedly struck a curb and some trees, causing it to overturn and roll several times. There was heavy impact damage to the front end and light-to-moderate damage on the rear quarter panels and rear end.

The Genesis driven by Tiger was equipped with 10 air bags, including a front center air bag for side impacts (Figure 7). At least eight of the 10 air bags deployed during the crash. The driver steering wheel and knee air bags deployed due to the frontal impact. The left and right side-curtain air bags and front and rear seat side air bags also deployed for rollover protection.

Figure 7. Genesis GV80 (hooniverse.com)

Tiger was reportedly belted. Although he was protected with a driver knee air bag, Tiger still sustained multiple serious fractures to his lower right leg, ankle, and foot. His injuries were possibly caused by intrusion of the driver footwell. Tiger did not sustain any significant injuries to his head, chest, or vital organs. He can attribute his survival – from what could have been a fatal crash – to the vehicle’s overall structural integrity and crashworthiness, his seat belt usage, and air bag protection and safety containment.

In closing

First invented in the early 1950s, air bags have been in production vehicles since the ‘70s and ‘80s. Although the general concept seems rather simple, air bags are very sophisticated and complicated devices. Special sensing and gas-generating technologies had to be developed to implement air bags. A lot of that technology is tightly packaged and hidden away inside the vehicle. For various reasons, there are several misconceptions or myths about air bags. This article attempted to dispel some of those myths with factual and detailed information… and rocket science.

About the author

John G. Bauer is a forensic mechanical engineer, certified traffic crash reconstructionist, and vehicle occupant restraints expert for Rimkus in Raleigh, North Carolina. His experience includes 25 years in the automotive industry, most of that designing and developing seat belts and air bags. He conducted vehicle crash testing and simulations to optimize passenger safety. He has 11 US patents and was a featured speaker and author for the Society of Automotive Engineers. Since becoming a forensic expert, Mr. Bauer has consulted on various transportation-related matters and reconstructed hundreds of traffic accidents. He has investigated Takata air bag recalls, go-cart and ATV rollovers, and wheelchair accessible vans with safety restraints failures. He was retained as a seat belt expert for a high-profile fatal accident of a young boy on a 168-foot high water slide at the Schlitterbahn Waterpark in Kansas City, KS, in 2016. He enjoys vehicle and home restoration, golf, boating, and other activities with his family and friends.

Evidence-Based Life Care Plans and Earning Capacity Assessments

Thu, 25 Aug 2022 14:08:03 GMT

By: Michael Fryar & Betsy Keesler
InQuis Global, LLC

INTRODUCTION

Evidence-based life care plans and earning capacity assessments ostensibly may not appear to have similarities. However, close examination of their foundation requirements and overall tenets reveals both categorically have common and related developmental connections. This article will review these specific forensic work products with an end goal of identifying their developmental parallels and common denominators.

EVIDENCE-BASED LIFE CARE PLANS

A life care plan is formally defined within the published 2015 Standards of Practice (Third Edition) by the International Association of Rehabilitation Professionals (IARP) and the International Academy of Life Care Planners (IALCP) as follows:

· LIFE CARE PLANNING STANDARDS & METHODOLOGY

An evidence-based and credible life care plan will be based upon adherence to published peer-reviewed life care planning standards of practice and empirically validated consensus statements. These guiding tenets inform the Life Care Planner of the methodological processes and the types of evidence/data necessary for their plans. The categorical types of evidence, data and guidelines utilized during the development of an evidence-based life care plan include:

1. Life Care Planning Standards of Practice
2. Life Care Planning Consensus and Majority Statements
3. Life Care Planning Assessment Information
4. Medical and Clinical Records for Evaluee
5. Testimony from the Evaluee
6. Direct Collaboration with Health Care Providers (Treating and/or Evaluating)
7. Testimony from Health Care Providers (Treating and/or Evaluating)
8. Clinical Practice Guidelines
9. Peer-Reviewed Journal Articles
10. Literature and Guidelines from Professional Academies, Societies and/or Organizations
11. Health Care Cost Databases
12. Medical Billing Records

Many actively practicing Life Care Planners maintain life care planning certification through the International Commission on Healthcare Certification (ICHCC). The ICHCC’s current practice standards and guidelines were released in 2021 and should be followed by all persons certified by the Commission. In addition to the ICHCC, three professional groups have developed standards for life care planning practice, to include the International Academy of Life Care Planners (IALCP), the American Association of Nurse Life Care Planners (AANLCP), and the American Academy of Physician Life Care Planners (AAPLCP). The standards from all three professional groups have been analyzed and the outcomes published within the Journal of Life Care Planning (Gamez, Johnson & Stajduhar, 2017). In summary, all three sets of published standards present the need for professional collaboration when developing a life care plan. Specifically, the noted 2017 peer-reviewed life care planning publication concluded the following:

“Based upon a review of data from each of the three documents, overlap is apparent. Specific reference to collaboration is seen throughout all three standards of practice, reinforcing the interdisciplinary nature of life care planning.”

· LIFE CARE PLANNING CONSENSUS REQUIREMENTS

In addition to published standards, consensus and majority statements have been developed for the practice of life care planning. The most current version is found published within the Journal of Life Care Planning (Johnson, C; Pomeranz, J. & Stetten, N, 2018). The publication outlines that the findings reached are applicable to all Life Care Planners, regardless of their educational/occupational background and/or professional affiliation. Of note, 89 full consensus statements were published during 2018, secondary to the Delphi study, which evaluated decades of professional Summit information with the aid of Life Care Planners across multiple committees and rounds of formal analysis.

o Collaboration

Echoing the themes of published standards, the consensus reached through the past Delphi study included collaboration with health care providers/professionals as an essential requirement for the development of a life care plan. Thus, such collaboration should be readily evident through clear documentation within an evidence-based life care plan. Specifically, published life care planning consensus includes the following foundational requirements for a life care plan:

“84. Review of evidence-based research, review of clinical practice guidelines, medical records, medical and multidisciplinary consultation and evaluation/assessment of evaluee/family are recognized as best practice sources that provide foundation in life care plans.”

o Scope of Practice & Foundational Requirements

Life Care Planners emerge from a variety of health care and educational backgrounds, such as Nursing, Medicine, Allied-Health, Mental Health/Counseling, etc. Each of these professionals has a well-defined scope of practice, in which they must remain, when developing a life care plan. As such, rarely, if ever, is one person fully qualified to make all the recommendations for a comprehensive and evidence-based life care plan. Therefore, it is imperative that the Life Care Planner collaborate with appropriate and necessary treating and/or evaluating health care providers to obtain plan recommendations that are outside of their scope of practice. More precisely, published consensus outlines the following requirements for the Life Care Planner:

“81. Life care planners seek recommendations from other qualified professionals and/or relevant sources for inclusion of care items/services outside the individual life care planner’s scope(s) of practice.”

As a basic example, Registered Nurses (RNs) cannot prescribe medications. It would be outside of their professional scope to attempt such. Therefore, medication recommendations within the life care plan must have a foundation from a qualified health care provider who is able, by virtue of their scope of practice, to prescribe medications.

In addition to establishing foundation through health care collaboration, a Life Care Planner can document direct connections between an evaluee’s medical records and/or health care providers’ testimony to the future care and treatment recommendations of their plans. However, Life Care Planners should not attempt to fill in the informational gaps pertaining to the frequency and duration of future care and services when such matters are outside of their scope of professional practice(s) and were not clearly documented within the medical records or testimony reviewed.

Also, published life care planning consensus requires the Life Care Planner to include relevant evidence-based research and guidelines within their plan’s foundational framework. Such resources may include guidelines from medical academies, professional associations and/or governmental agencies, etc. as well as peer-reviewed journal publications. Based upon consensus, the overall research, resources and processes utilized during life care plan development must be reliable, consistent, transparent and credible.

o Cost Resources & Data

The consensus statements require verifiable data from appropriately referenced resources be used during the development of a life care plan. The plan’s cost data, when reviewed through the same sources by another Life Care Planner, should be reproducible. Also, the costs identified in a plan should be geographically specific to the evaluee. Costs of medical care and treatment are not equivalent across the country, a state or even a larger region for that matter. Moreover, the life care planning community has adopted the use of Usual, Customary and Reasonable (UCR) costs, as defined by the American Medical Association (AMA), for the development of a life care plan. This matter is outlined within a field treatise, the Life Care Planning and Case Management Handbook (Fourth Edition, Weed & Berens, 2018). Due to the requirements inherent for the defining of UCR, more than one cost source will need to be utilized by Life Care Planners in their plans. The same requirement of multiple cost estimates is outlined within the published consensus statements. Per consensus, the cost data of a life care plan should reflect market rate pricing and not be discounted in any manner. Finally, as with all data and processes of the life care plan, the cost data utilized should be reliable, consistent, transparent and credible.

o Individualized Life Expectancy

Published consensus requires that the life care plan be individualized to the evaluee. Such developmental requirements apply to all aspects of the plan to include the life expectancy projection. Most Life Care Planners are not life expectancy experts, and therefore must rely upon the expertise of other professionals for an individualized account of the evaluee’s expected longevity. The peer-reviewed life care planning literature outlines the complex methodological processes necessary to arrive at individualized conclusions of life expectancy for a life care plan, and strongly cautions against endorsing only general population findings. As consistent with the need for medical foundation when qualifying treatment requirements outside of one’s scope of practice, the Life Care Planner, that is not a life expectancy expert, should defer life expectancy determinations to a qualified expert. Otherwise, the Life Care Planner would be guilty of providing an opinion that violates accepted life care planning consensus and standards.

· CASE SCENARIOS & REVIEW

Hypothetical case scenarios and subsequent reviews are offered below for illustrative and educational purposes regarding evidence-based life care plans:

o Case Scenario #1 (Traumatic Brain Injury Secondary to a Fall)

A 28-year-old male evaluee suffered a Traumatic Brain Injury (TBI) after falling from a third story building under construction. The TBI resulted in multiple long-term issues including executive deficits, vision deficits, hearing deficits, depression and anxiety. Following the completion of inpatient rehabilitation care, the evaluee was discharged to his home within the community. A Registered Nurse (RN), who is also a Certified Life Care Planner (CLCP), completed a life care plan for the evaluee. The life care plan’s narrative included a summary of the medical treatments received thus far by the evaluee from the medical records. Also, the life care planning narrative outlined past diagnostic testing completed, a list of the evaluee’s current medications and dosing, and the identification of all records that had been analyzed by the Nurse. Her plan included outpatient medical services the evaluee was actively receiving: Physiatry, Neuro-Ophthalmology, Neurology, Audiology, and Psychology. Based upon her clinical knowledge, the RN, independently and without collaboration, determined all the future medical and psychological care, diagnostic testing, medications, future attendant care, and other support services needed by the evaluee, including their future frequency and duration. Such future care information was not found within any of the medical records reviewed and testimony from the health care providers had not been obtained before release of the life care plan.

o Review of Case Scenario #1

Development of the life care plan did not include any type of documented collaboration with a treating or evaluating health provider for the evaluee. Also, there was not any direct link made between the medical records reviewed and the specific treatment/care recommendations as issued within the life care plan by the Nurse. Moreover, the Life Care Planner did not identify any clinical practice guidelines, empirical research or peer-reviewed literature as specific foundation for the content of her plan. Finally, the Life Care Planner did not have testimony from a treating or evaluating health care provider for foundation either. In summary, the RN acted well beyond her scope of practice when she independently opined about future care and treatment for the evaluee absent necessary medical foundation for the same. Ultimately, the life care plan lacked the required credible and reliable data, as well as the overall foundational information necessary to formulate an evidence-based plan that is consistent with published life care planning consensus and standards.

o Case Scenario #2 (Traumatic Burns Secondary to a Motor-Vehicle Accident)

A 56-year-old female was involved in a motor vehicle accident (MVA). The car exploded before the evaluee could be evacuated by emergency personnel. As a result, the evaluee suffered second and third degree burns over 60% of her body. After receiving extensive acute care services, she was discharged home and began outpatient services, wherein she received care and treatment from a Physician Burn Specialist, Reconstructive Burn Surgeon, Physical Therapist, Occupational Therapist, and Psychologist. The evaluee’s subsequent life care plan was developed by a Certified Rehabilitation Counselor (CRC). The Life Care Planner completed an in-home assessment of the evaluee, and multiple consultations were accomplished by him with the outpatient medical and clinical treatment teams. The consultative recommendations received were carefully documented by the Life Care Planner and fully endorsed through signature by the treatment teams. Subsequently, these medical and clinical recommendations were included into the evaluee’s life care plan. The CRC independently made recommendations for future vocational rehabilitation services within the life care plan. Also, the CRC made direct reference to published clinical practice guidelines for burn care, and peer reviewed journals regarding the psychological supports necessary to aid with emotional adjustment following a severe burn. Also, additional pertinent details of current treatment, as found within the medical records, was noted within the life care plan. The life care plan included a comprehensive list of all medical, clinical and legal documents reviewed during development. Present-value calculations were deferred to an Economist and total calculations were not issued by the Life Care Planner within the plan. Finally, the Life Care Planner deferred the determination of an individualized life expectancy for the evaluee to a qualified expert.

o Review of Case Scenario #2

This Life Care Planner included multiple areas of foundation needed for an evidence-based life care plan. Of important note, the CRC remained within his scope of practice and relied upon other qualified health care providers, published clinical guidelines, literature, and medical records to support the recommendations of the plan. The CRC appropriately deferred other related determinations to qualified experts (i.e., present-value calculations and life expectancy). Overall, the life care plan contained credible and reliable data as well as the foundational information necessary to formulate evidence-based conclusions that are consistent with published life care planning consensus and standards.

EVIDENCE-BASED EARNING CAPACITY ASSESSMENTS

· EARNING CAPACITY METHODOLOGY & STANDARDS

Similar to the life care plan, the determination of an evaluee’s earning capacity before and after an injury and/or chronic health condition is a complex endeavor, requiring adherence to a peer-reviewed and accepted methodology, as well as professional standards. Typically, professionals completing these assessments have an educational and professional background in vocational rehabilitation. A properly developed earning capacity analysis should incorporate evaluee assessment information, standard classifications, relevant research data, statistical information and foundation from necessary medical and/or clinical professionals. The objective evidence, information and data gathered should inform the final clinical judgements reached regarding an individual’s overall capacity for employment and wages within the competitive labor market.

The Commission on Rehabilitation Counselor Certification (CRCC) is the governing national professional organization that manages the Certified Rehabilitation Counselor (CRC) credential as maintained by many of the vocational rehabilitation professionals completing earning capacity assessments for forensic purposes. Published CRCC forensic standards require the utilization of methodologies appropriate to the evaluation process performed. There are multiple published earning capacity methodologies within the peer-reviewed vocational rehabilitation literature. These published methodologies provide the structure and guidance necessary to arrive at objective and valid earning capacity conclusions. A Forensic Vocational Rehabilitation Consultant (FVRC) should be able to discuss the specifics of the published earning capacity methodology adhered to during the assessment process and fully describe the data/evidence utilized for final clinical judgements/opinions.

· CONTENT ANALYSIS & OBJECTIVE DATA

Qualitative analysis of the content factors found within earning capacity assessment reports has been accomplished and the empirical findings were published within the peer-reviewed Rehabilitation Professional journal (Robinson, Young & Pomeranz, 2009). Specifically, the research determined 22 factors were included within at least 50% or more of the forensic vocational rehabilitation reports analyzed regarding employability and earning capacity.

The specific 22 content factors identified included:

Employment-Past Work-Job Title (100% of the reports)

Personal-Gender (100 % of the reports)
Educational-Secondary (97% of the reports)
Employment-Past Work-Employment Data (97% of the reports)
Personal-Age (97% of the reports)
Employment-Past Work-Job Duties (90% of the reports)
Medical-Treatment History (90% of the reports)
Purpose of Assignment (90% of the reports)
Employment-Past Work-Employer Name (87% of the reports)
Employment-Past Work-Pay Rate End (80% of the reports)
Functional Limitations (70% of the reports)
Medication-Prescription (67% of the reports)
Transportation-Driver’s License (67% of the reports)
Psychometric-Vocational Testing (67% of the reports)
Familial-Martial Status (63% of the reports)
Educational-Secondary-Date of Highest Grade (60% of the reports)
Secondary Medical Conditions (60% of the reports)
Educational-Secondary-Highest Grade (57% of the reports)
Employment-Past Work-Physical Requirements (57% of the reports)
Familial-Children (57% of the reports)
Literature Resources-DOT (57% of the reports)
Educational Factor-Vocational (53% of the reports)

The core 22 factors identified through empirical analysis should, at minimum, be considered by a FVRC during the course of analyzing an evaluee’s earning capacity and arriving at evidence-based conclusions. Also, during the course of earning capacity assessment, evidence-based practice requires the consultant to directly consider objective data. Specifically, published CRCC standards require the FVRC utilize objective data for the determination of unbiased evaluation conclusions (CRCC Code, Section F: Forensic Services). The sources of such data may vary, but often include information from governmental surveys, wage and employment databases, professional associations, non-profit organizations, trade associations, research centers, peer-reviewed literature, published professional/medical guidelines, industry literature, and United States Department of Labor (USDOL) publications, as well as the evaluee’s tax, employment and academic records, etc.

· FUNCTIONAL, ENVIRONMENTAL & MENTAL CAPACITY DETERMINATIONS

Multiple published CRCC advisory opinions outline that it is outside the scope of professional practice for a Certified Rehabilitation Counselor (CRC) to determine any type of functional work capacity for an individual. Moreover, based upon vocational rehabilitation treatises, such decisions should be made by qualified and licensed physicians and/or mental health practitioners (Robinson, 2014 and Weed & Field, 2012). In contrast, the FVRC’s professional role includes evaluating and determining the individualized impact that medically and/or clinically established physical, mental and/or environmental guidelines will have upon an evaluee’s employability, placeability and overall earning capacity. In summary, it is professionally inappropriate for a FVRC to determine or assign a specific occupational strength level or other functional, environmental, cognitive or psychological work parameter to an evaluee in the absence of foundation established by a licensed physician or other qualified health care provider.

· CLINICAL JUDGMENTS/OPINIONS & EARNING CAPACITY DETERMINATIONS

Ultimately, within the guiding context of a published methodology and professional standards, and based upon assessment findings, objective data, research analysis and the application of informed clinical judgement, the FVRC can, to a reasonable degree of probability, reach conclusions regarding an evaluee’s pre-injury and post-injury earning capacities. Specifically, published peer-reviewed literature within Rehabilitation Professional (Field, Choppa & Weed, 2009) outlines that clinical judgements/opinions should include relevant information/data, follow a widely accepted and peer-reviewed methodology, adhere to relevant standards of practice, utilize statistical studies and, when professionally necessary, include valid and reliable testing instruments. Finally, the authors outline that the judgements/opinions reached by the Rehabilitation Professional must be unbiased, ethical and professional in nature.

After appropriate clinical judgements/opinions are finalized and the overall earning capacity assessment report is completed, the information can be provided to a Forensic Economist (FE) for calculation(s) related to the determination of present value. A forensic vocational rehabilitation treatise (Robinson, 2014) describes the following, relative to the professional hand-off between the Vocational Rehabilitation Expert (VE) and the Forensic Economist (FE):

“As will be seen, the typical relationship between an FE and a vocational rehabilitation expert (VE) is that the VE provides the FE with differentiations of a postinjury earning capacity scenario from a preinjury scenario in a personal injury case, so that the FE can estimate the present value of lost earning capacity and perhaps other categories of economic damages.”

· CASE SCENARIOS & REVIEW

Hypothetical case scenarios and subsequent reviews are offered below for illustrative and educational purposes regarding evidence-based earning capacity assessments:

o Case Scenario #1 (Herniated Discs Secondary to a Slip & Fall)

A 55-year female was evaluated by a Forensic Vocational Rehabilitation Consultant (FVRC) secondary to a slip and fall that caused herniated discs for both her lumbar and cervical spine. After multiple spine surgeries and the establishment of Maximum Medical Improvement (MMI), the evaluee continued to report cervical, lumbar and right leg pain, as well as moderate to severe functional deficits. She was not actively working. The FVRC did not review the evaluee’s past tax records, testimony or employment file information during his analysis. The FVRC concluded based upon his professional experiences and assessment, the evaluee was physically unable to work and earn a gainful wage within the economy. He specifically indicated the evaluee was physically incapable of functioning at the United States Department of Labor’s (USDOL) Sedentary strength level for a full-time or part-time occupation within the open labor market. A treating or evaluating physician had not issued any medical conclusion regarding the evaluee’s work capacities. Also, the FVRC concluded it was likely the evaluee would have worked until the age of 85, had the fall not occurred, as a Registered Nurse (RN), receiving wages at the 90th percentile for the occupation nationally throughout her remaining career. However, the evaluee had only demonstrated maximum mean annual earnings as a Registered Nurse (RN) in her region before the fall. The FVRC did not make any reference to published work-life expectancy data before rendering his opinions.

o Review of Case Scenario #1

The case scenario has multiple professional errors and omissions. The FVRC did not have the necessary medical foundation to support his independent conclusion that the evaluee had physical capacities that were functionally below USDOL Sedentary strength. Physical capacities are determined by appropriately licensed health care providers and are certainly beyond the scope of practice for a Rehabilitation Counselor. Secondly, the FVRC did not reference a published methodology, or any objective data, to determine past or future earning capacities for the evaluee. Lastly, the FVRC did not incorporate any objective data from an empirical source to define the evaluee’s work-life expectancy. Due to the nature and extent of these professional errors and omissions, the FVRC would not be able to derive reliable and valid evidence-based earning capacity conclusions for the evaluee.

o Case Scenario #2 (Traumatic Brain Injury Secondary to a Motor-Vehicle Accident)

A 45-year-old male sustained a Mild Traumatic Brain Injury (M-TBI) secondary to a motor-vehicle accident (MVA). The MVA and M-TBI resulted in mild deficits related to concentration, attention and processing speed for the evaluee, as described within the treating physician’s records and confirmed through valid neuropsychological testing by a qualified Neuropsychologist. A Forensic Vocational Rehabilitation Consultant (FVRC) was requested to complete an earning capacity assessment of the evaluee. The FVRC completed an onsite assessment of the evaluee with standardized testing. She subsequently consulted with the treating Brain Injury Physiatrist and the evaluating Neuropsychologist regarding the evaluee’s overall capacities for future work. The consult findings were documented through signed summaries from the health care providers and included into the earning capacity assessment report. Also, the FVRC noted that she followed the peer-reviewed and published RAPEL methodology during completion of her earning capacity assessment and documented the same methodological process within the report. The evaluee’s employment files and taxes for multiple years (both before and after the MVA) were reviewed. Published USDOL employment and wage statistics were analyzed for the evaluee’s region and included within the earning capacity assessment report. A standard Transferability of Skills Analysis (TSA) was performed to define the evaluee’s employability. Published and peer-reviewed work-life expectancy data was gathered and included in the report. Based upon all the assessment, data and information researched and analyzed, the FVRC rendered conclusions pertaining to the evaluee’s partial loss of wage-earning capacity after the accident, and she quantified the specifics of the earning capacity loss through her report. The findings from the FVRC were subsequently reviewed by an evaluating Forensic Economist (FE) who applied present-value calculations to the data and earning capacity conclusions reached by the FVRC.

o Review of Case Scenario #2

The earning capacity evaluation process described above followed accepted standards, methods and data requirements necessary to facilitate arrival at evidence-based earning capacity conclusions for the evaluee. Specifically, the FVRC utilized an accepted published methodology, objective data, appropriate analysis tools, statistics and necessary medical/clinical foundation to reach informed conclusions regarding the evaluee’s earning capacities.

SUMMARY & CONCLUSIONS

Life Care Planners and Forensic Vocational Rehabilitation Consultants have similar categorical requirements for the production of their evidence-based evaluation reports. Life care plans and earning capacity assessment reports both require the utilization of an accepted published methodology and the utilization of objective data, research and guidelines to objectively substantiate the professionals’ overall conclusions. Moreover, both the Life Care Planner and the Forensic Vocational Rehabilitation Consultant must rely upon an appropriate health care foundation when specific determinations necessary for their opinion formation are outside of their professional scope(s) of practice. Finally, these two types of damage experts must apply the parameters of informed clinical judgement/opinion formation to reach objective conclusions within their scopes of practice. The utilization of life care planning and earning capacity assessment experts well-versed in necessary evidence-based practice requirements is critically important to the establishment of valid and reliable damage conclusions after an injury and/or a chronic health condition has occurred. The Life Care Planner or Forensic Vocational Rehabilitation Consultant that does not adhere to established evidence-based parameters for the determination of their conclusions places their forensic work product in jeopardy of not being accepted into the evidentiary record.

REFERENCES:

Hot Topics in Medical Malpractice Law

Thu, 28 Jul 2022 16:24:32 GMT

By Taylor Richards, Garrison Law Group PLLC

The Medical Malpractice Group offers the following updates on several issues that are significant to our members: the upcoming lifting of the COVID-19 State of Emergency and its impact on application of immunities, tips on trying cases during a pandemic, and recent appellate decisions.

COVID-19 State of Emergency To Be Lifted August 15

Governor Roy Cooper recently announced that North Carolina’s State of Emergency Order—originally issued on March 10, 2020—will be lifted on August 15, 2022. https://www.newsobserver.com/news/politics-government/article263365608.html. Termination of the Order will have a significant impact on application of COVID-19 immunities enacted by our legislature, as discussed in an outstanding article by Christopher G. Smith, James C. Wrenn Jr., and David Ortiz: https://www.smithlaw.com/resources-publications-1937. As detailed in that article, immunity for negligent transmission of COVID-19 will essentially continue for an additional 180 days, but the temporary immunity for civil liability (which provided “broad protection against most ordinary negligence”) established by SB 704 will end on August 15, 2022. https://www.smithlaw.com/resources-publications-1937.

Tips on Trying Cases During a Pandemic

The Medical Malpractice breakout session at the NCADA Annual Meeting in June featured an outstanding panel discussion with tips on trying cases during the pandemic. Our esteemed panelists were Chip Holmes, Jerry Allen, Pat Meacham, and Barrett Johnson.

The panelists agreed that jury selection has been greatly affected by the pandemic. One panelist realized how much he relies on facial expressions during voir dire, finding that it was quite difficult due to masking. Masking procedures have varied from county to county. Some courtrooms are now “back to normal” in the sense that jurors are not required to be masked, and courtroom logistics are back to pre-pandemic status. Other courtrooms may still require masks. Some judges allow masked jurors or witnesses to pull their masks down when they are testifying.

Discussion of COVID-19 issues during voir dire also varies. One panelist had opposing counsel file a motion in limine seeking to prevent any discussion of COVID-19, and that motion was granted. In contrast, in other cases, counsel directly asked jurors how the pandemic has impacted them and their families. A member of the panel found that due to the challenges of a COVID courtroom, voir dire would take longer because of counsel digging deeper during questioning.

One particularly unpleasant scenario involves what to do if a juror tests positive for COVID-19 during trial. One panelist asked the judge to continue the trial to another date to maintain the current jury. That request was denied. As with the pandemic itself the logistics and practice of trying cases is constantly evolving. However, the panel provided important tips and tricks that will not only be instructive to our practice in COVID-19 courtrooms, but also will help serve our clients in a “normal” courtroom setting.

Recent Medical Malpractice Appellate Decisions

At the Annual Meeting in June, Leslie Packer provided an extensive update on recent decisions. The excellent manuscript authored by her and Dixie Wells is here. (“Wells & Packer”). Three cases of the cases discussed in their paper are of particular interest to the Medical Malpractice Group: (1) Blue v. Bhiro, 871 S.E.2d 691, 2022-NCSC-45 (N.C. 2022); (2) Bryant v. Wake Forest Univ. Baptist Med. Ctr., 870 S.E.2d 269, 2022-NCCOA-89 (N.C. App. 2022); and (3) Hall v. Wilmington Health, PLLC, 2022-NCCOA-204 (N.C. App. 2022).

The Hall case addressed a deponent’s right to have counsel physically present while testifying, even in a pandemic setting. Specifically, “the court of appeals considered whether a trial court’s order prohibiting a medical center’s counsel from being physically present with the center’s own witness during remote depositions violated the center’s constitutional right to due process.” (Wells & Packer, p. 64). The Court reversed and remanded, and Chief Judge Stroud wrote for the majority. The Court held that “[t]his wholesale ban on personal attendance of Defendant’s counsel at depositions of its own employees and witnesses presented the constitutional issue Defendant asserts in this appeal and was not supported by existing law, emergency orders or evidence. … The trial court’s order violated Defendant’s constitutional right by prohibiting counsel from being physically present at depositions of its own employees and witnesses.” Hall at ¶3.

The Bryant case addressed a variety of issues, including whether an implanted device should be considered a “foreign object” under North Carolina law. Procedurally, the Court of Appeals in Bryant “considered whether a doctor had sufficiently shown an absence of material fact necessary to receive summary judgment on his former patient’s claims against him for actual and constructive fraud, res ipsa loquitur, breach of fiduciary duty, and medical malpractice. (Wells & Packer, p. 86). Plaintiff alleged that a “Gore-Tex barrier” that the defendant implanted years ago caused her infertility. Bryant at ¶6. ¶23. Regarding the actual fraud, breach of fiduciary duty, and constructive fraud claims the court held the Defendants were entitled to judgment as a matter of law. Id. at ¶14, 23. The Court “agree[d] with the trial court that res ipsa loquitor cannot apply because a layperson, without the assistance of expert testimony, could not infer negligence from the facts of this case based on common knowledge and ordinary human experience.” Id. at ¶27. The Court also addressed whether the Gore-Tex barrier had a therapeutic purpose and was not a “foreign object,” which would trigger the 10-year statute of limitations. The Court found that the Gore-Tex barrier had a therapeutic purpose or effect, relying on the trial court finding: “’Plaintiff’s and Defendant’s experts agree that Gore-Tex can be properly used as an adhesion barrier to prevent pelvic adhesion formation and that such a use is therapeutic.’” Thus, affirming the trial court’s application of the 4-year statute of limitations. Id. at ¶30. Regarding the punitive damages claim the court held “because we hold that the trial court properly granted summary judgment on each of Plaintiff’s claims above, Plaintiff has no independent basis for punitive damages and this claim necessarily fails.” Id. at ¶ 43.Finally, in the Blue case, the North Carolina Supreme Court “considered whether inclusion of additional facts not in the pleadings converted a trial court’s order on a Rule 12(b) motion to dismiss to a motion for summary judgement under Rule 56.” (Wells & Packer, p. 84). The Court reversed the Court of Appeals, holding that “the trial court did not consider matters outside the pleading and thus was not required to convert the motion.” Blue at ¶ 1. In Blue, the plaintiff alleged that the defendants “were negligent by failing to provide follow-up care after learning the results of the 24 January 2012 PSA test and failing to diagnose plaintiff with prostate cancer.” Id. The Court of Appeals held that the trial court did not expressly exclude facts in the parties’ memoranda and arguments (facts that were not in the Complaint), so the trial court “’considered matters beyond the pleading,’” which converted the motion to dismiss to a summary judgment motion. Id. at ¶6. The North Carolina Supreme Court disagreed, finding that the trial court’s order did not mention any additional documents outside the parties’ memorandums. The defendants’ memorandum “included the pleadings, a statute, and case law as exhibits, but did not include any evidentiary materials” and the plaintiff “did not include any exhibits with his memorandum.” Id. at ¶13. Further, plaintiff’s counsel’s factual assertions in his memorandum and oral arguments were “not evidence and thus are not matters outside the pleading.”

Okay! Define “RECKLESSNESS” to a Nurse!

Thu, 28 Jul 2022 15:47:38 GMT

Pamela Graham, MSN, RN, LNC

There was a collective gasp across the country amongst all health professionals following the criminal conviction of Tennessee Registered Nurse RaDonda Vaught for “reckless homicide” and “gross neglect of an impaired adult." For any practicing nurse, the precedence of this conviction and the staffing and prevention issues surrounding COVID are enough to make any nurse immediately resign or retire. Is it any wonder the nursing shortage has roused itself once again?

As a defense attorney, your reassuring strengths and skills are to guide your client through a most confusing and frightening time in their career and, now, as Ms. Vaught can attest, life. The nurse must journey through the trauma of a licensing hearing process that may likely take his or her professional license, livelihood and a beloved profession. There is also the probability of a civil suit for “wrongful death” or some claim of harm for which, hopefully, professional liability insurance will cover.

Criminal charges must be the worst issue to face. In North Carolina, the charge probably would have been “involuntary manslaughter," the “unintentional killing of another person resulting from recklessness or criminal negligence.” As a defense attorney, defining “intent” and “recklessness” comes with the job; however, how do you define the intent of a nurse who removes the wrong drug from an electronic medication dispensing machine? A machine that required being overridden to obtain the medication ordered? Within a delivery system that apparently required nurses to consistently override it to obtain different medications? Is that “recklessness”? Or is that the current ‘standard’ for that facility at that moment?

There were other extenuating circumstances that drew concerns about the Just Culture philosophy to which we supposedly espouse. While Ms. Vaught reported her error and admitted her fault, the health care delivery system failed to report the incident to the State as required. Ultimately, Ms. Vaught’s failure was that she did not confirm that she had the right medication. The institution failed to report a Sentinel Event. They had the ‘deep pockets’ to settle the case. Ms. Vaught faced criminal charges. It was a horrific error and caused the death of a family’s loved one.

Then comes Michelle Hewitt, a Forsyth County correctional facility nurse charged with “involuntary manslaughter” or “criminal negligence” in the death of inmate, John Neville. Mr. Neville reportedly fell from his bunk and was rendered aid by five correctional officers and Ms. Hewitt. He unfortunately passed away under their care. Now, all five correctional officers and Ms. Hewitt have been charged. It would be interesting to see what failures in the system, aggravating factors and mitigating circumstances influenced this horrible incident.

Defense attorneys have their work cut out for them. Having a Legal Nurse Consultant on your team can help find these nuances and details to define what was “negligent” or “reckless." An LNC is a Registered Nurse who has practiced in a clinical setting and understands what it is like “inside” the practice setting. Most have regulatory experience with a good grasp of what standards and deviations from those standards mean. They can quickly help identify where and how the failures occurred and guidance on evidenced-based references and resources. The LNC can also serve as a trusted colleague and counselor for your nurse-client enduring probably the most frightening time of his or her career.

Don’t go it alone! Have a Legal Nurse Consultant for your team when needed to assist and advise. Your health professional clients will thank you!

Pamela Graham, MSN, RN, LNC is a Legal Nurse Consultant with Pamela Graham LNC, PLLC.

She is a member of the American Association of Legal Nurse Consultants.

UIM Coverage with Multiple Underinsured Tortfeasors and Multiple UIM Policies

Lynette Pitt — Fri, 24 Jun 2022 14:13:20 GMT

by Jeffrey Kuykendal, McAngus Goudelock & Courie, LLC

On May 3, 2022, in Tutterow v. Hall, No. COA21-326, 2022-NCCOA-300, the North Carolina Court Appeals answered the question of how to calculate the underinsured motorist (“UIM”) coverage in a case involving both multiple underinsured tortfeasors and multiple UIM insurance policies.

On October 21, 2014, Vivian Tutterow was a passenger in a vehicle being driven by Pamela Crump. At that same time, Brian Hall was operating a vehicle owned by Kris Hall, his mother, and while in the course and scope of his agency relationship with Randy Hall Automotive, LLC. Ms. Crump stopped her vehicle in a lane of travel and Mr. Hall collided with the back of her vehicle resulting in Ms. Tutterow’s death.

Ms. Crump had an auto policy issued by Horace Mann with a $100,000 per person liability limit and a $100,000 per person UIM coverage limit. Mr. Hall was covered by an auto policy issued by Nationwide with a $100,000 per person liability limit. Ms. Tutterow also had an auto policy issued by State Farm with a $100,000 per person UIM coverage limit.

On October 10, 2016 Horace Mann tendered the $100,000 limits of its liability policy on behalf of Ms. Crump. On October 18, 2016, Nationwide tendered the $100,000 limits of its liability policy on behalf of Hall. Several weeks later, Ms. Tutterow’s estate informed the UIM carriers of the tenders, but advised that it had not accepted the tendered limits. Neither Horace Mann nor State Farm advanced any UIM coverage at that time.

In June 2017, Plaintiff informed the UIM carriers that it had accepted the liability limits of Ms. Crump’s policy. Soon thereafter, State Farm, in light of the North Carolina Supreme Court’s decision in Lunsford v. Mills, 367 N.C. 618, 766 S.E.2d 297 (2014), advanced $100,000 to Tutterow’s estate under its UIM policy while expressly reserving its rights to recoup those funds should Plaintiff recover some or all of the liability limits from the Nationwide policy.

In July 2019, Plaintiff informed the UIM carriers that it had accepted the liability limits of Mr. Hall’s policy. Shortly thereafter, State Farm requested that Plaintiff reimburse the $100,000 that it had advanced in 2017. The funds were placed in escrow and Plaintiff filed a declaratory judgment action to determine the obligations of the UIM carriers.

Plaintiff contended that the stacked per person limits of the two UIM policies, $200,000, was to be compared to the liability limits of Ms. Crump’s policy and Mr. Hall’s policy separately, meaning Ms. Crump was underinsured by $100,000 and Mr. Hall was also underinsured by $100,000. Further, Plaintiff argued State Farm had waived its right of subrogation by failing to timely advance within 30 days of notice of the tender of the liability limits. The UIM carriers contended that the stacked per person limits of the UIM polices were to be compared to the combined limits of the tortfeasors’ liability policies, meaning no underinsured motorist coverage was owed and that State Farm was entitled to reimbursement.

After the trial court granted summary judgment to the UIM carriers, Ms. Tutterow’s estate appealed to the North Carolina Court of Appeals.

The North Carolina Court of Appeals focused on the language in the Financial Responsibility Act. See N.C. Gen. Stat. § 20-279.21. The Court held:

Under the statute, the calculation of applicable UIM coverage has three basic steps. First, the reviewing court must determine if a torfeasor’s vehicle meets the definition of an “underinsured highway vehicle.” If so, the court must determine if the limits of that tortfeasor’s liability policy are exhausted. Finally, if those liability limits are exhausted, the court must calculate the amount of coverage that is available under the applicable UIM policy.

The Court noted that it was not disputed that the first two steps were satisfied and that UIM coverage was triggered. Thus, all that remained was to calculate the amount of UIM coverage available.

The Court determined the answer was in the unambiguous language of N.C. Gen. Stat. § 20-279.21(b)(4). The Court focused on the sentence, which provides:

Furthermore, if a claimant is an insured under the underinsured motorist coverage on separate or additional policies, the limit of underinsured motorist coverage applicable to the claimant is the difference between the amount paid to the claimant under the exhausted liability policy or policies and the total limits of the claimant’s underinsured motorist coverages as determined by combining the highest limit available under each policy…

The Court found this sentence answered the question of what to do when multiple UIM policies apply to a claimant. The Court held “the statute provides an unambiguous method to calculate the applicable limit of combined UIM coverage: it is the difference between the total amount paid under all exhausted liability policies and the total limits of all applicable UIM policies.”

As applied to the facts of the case, the total amount paid under the exhausted liability policies was $200,000, with $100,000 from the Horace Mann liability policy and another $100,000 from the Nationwide liability policy. The total limits of the available underinsured motorist coverages was also $200,000, with $100,000 from the Horace Mann UIM coverage and another $100,000 from the State Farm UIM coverage. Thus, the difference between those two totals was $0.00, which was determined to be the amount of available UIM coverage.

Beyond the unambiguous language of the Financial Responsibility Act, the Court noted the result comported with the purpose of the Act. The purpose of UIM coverage is to put the insured in a position where total insurance coverage for injuries sustained in an automobile accident is not less than the amount of UIM coverage obtained. The Court noted, the result in this case precisely accomplished that purpose. The available UIM coverage for Ms. Tutterow was a total of $200,000, which is the precise amount tendered to the Plaintiff by the carriers for the two liability policies.

Finally, the Court held that State Farm was entitled to reimbursement of the $100,000 it advanced. The Court determined the statutory provision requiring advancement within 30 days to preserve the right to subrogation was inapplicable. Once the limits of both of the liability policies were exhausted, the UIM carriers had no duty to advance any payments because they owed nothing under their policies. Thus, because State Farm did not have an obligation to advance payment under its UIM policy, it was entitled to have its advance returned in full.

Reposition Your Thoughts About Repose

Thu, 28 Apr 2022 14:44:27 GMT

By Ross Bromberger, Hedrick Gardner Kincheloe & Garofalo, LLP

What happens when an owner brings a lawsuit against its former general contractor six years to the day from substantial completion? Or if the owner brings a suit one month before the claim is barred by North Carolina’s statute of repose but the complaint is not served until more than six years after substantial completion? In either scenario, can a general contractor bring suit against its subcontractors or are those derivative claims, either in contract, indemnity, or contribution, barred by North Carolina’s statute of repose? Unfortunately, the answer appears to be that the general contractor is barred from asserting those valuable derivative claims against the subcontractors, even though the subcontractors are often the ones that performed the work at issue.

In ESA, Inc. v. Walton Constr. Co., Inc., the Eastern District Court was faced with this exact scenario. No. 7:04-CV-75-F(3), 2007 WL 9718764, 2007 U.S. Dist. LEXIS 113115, (E.D.N.C. Mar. 16, 2007) (applying North Carolina law). Plaintiff, Extended Stay America (ESA), filed suit against its general contractor, Walton, six years to the day after substantial completion. Walton filed a third-party complaint against its subcontractor, Power Plus, which actually performed the work in dispute. Walton’s Third-Party Complaint, however, was filed six years and two months after substantial completion. At summary judgment, Power Plus sought dismissal of Walton’s Third-Party Complaint, arguing the claim was barred by North Carolina’s six-year statute of repose. In response, Walton argued that such an application of the statute of repose would be inequitable. Ruling in favor of Power Plus and dismissing Walton’s Third-Party Complaint, the ESA Court noted:

Although the court appreciates the seeming inequity of the result, [N.C.G.S.] § 1-50(a)(5)(a), (b)(6) plainly dictates it. Therefore, where, as here, an owner files an action against a general contractor for defective or unsafe conditions arising from improvement to real property on the very last day allowed by law, that same statute of repose operates to preclude that contractor from seeking contribution or indemnity from his subcontractors. The Court of Appeals of North Carolina expressly has rejected the argument that the statute of repose does not bar an action for contribution or indemnification under similar circumstances, pursuant to an earlier version of the statute. New Bern Assoc. v. The Celotex Corp., 359 S.E.2d 481, 483 (N.C. Ct. App.), cert. denied, 362 S.E.2d 782 (N.C. 1987). The court also has pointed out that “[w]hether a statue of repose has expired is strictly a legal issue . . .,” Cellu Products Co. v. G.T.E. Products Corp., 344 S.E.2d 566, 568 (N.C. Ct. App. 1986), and that where “the pleadings and proof show without contradiction that the statute has expired, then summary judgment may be granted.” Id.

ESA, at *3.

What can a general contractor do to avoid, as the ESA court noted, such an inequitable ruling? Such a question requires a closer look at North Carolina’s construction statute of repose. For construction disputes, North Carolina’s statute of repose can be found in N.C.G.S. § 1-50(a)(5), stating, “[n]o action to recover damages based upon or arising out of the defective or unsafe condition of an improvement to real property shall be brought more than six years from the later of the specific last act or omission of the defendant giving rise to the cause of action or substantial completion of the improvement.” (emphasis added).

In reviewing N.C.G.S. § 1-50(a)(5), the North Carolina Supreme Court, in Christie v. Hartley Const., Inc., undertook an inquiry as to the legislative basis and intent behind a statute of repose. 367 N.C. 534, 766 S.E.2d 283 (2014). The Christie Court noted that “[b]ecause an applicable repose period begins to run automatically, statutes of repose give potential defendants a degree of certainty and control over their legal exposure that is not possible when such exposure hinges upon the possibility of an injury to a plaintiff that may never manifest.” Id. at 539, 766 S.E.2d at 287. Therefore, as a statute of repose acts to provide a bulwark against open-ended exposure, where a business contractual modifies and extends the statute of repose, North Carolina courts will allow such modification. Id. at 539-41, 766 S.E.2d at 287-88. Such a modification is allowable as parties generally are “free to contract as they deem appropriate.” Id.

In adopting and applying Christie, Judge Bledsoe of the Business Court found that contracting parties can seek to toll the applicable statute of repose. Window World of Baton Rouge, LLC v. Window World, Inc., 2019 NCBC 10,, 2019 WL 540755, 2019 NCBC LEXIS 11 (N.C. Super. Feb. 11, 2019). In support of this position, Judge Bledsoe stated, “North Carolina courts have explicitly recognized that a statute of repose may be tolled by agreement.” Id. at 6.

Not only can a party contractually modify to extend or toll the applicable statute of repose, but contracting parties can also agree to shorten the applicable statute of repose. Tsonev for Est. of Shearer v. McAir, Inc., 272 N.C. App. 689, 847 S.E.2d 788 (2020). In Tsonev, the plaintiff-homeowners hired McAir to remediate flood damage at their personal residence. Plaintiff and McAir entered into a contract, which, in part, specifically stated, “[McAir is] not liable for any consequential incidental, indirect, punitive, treble, speculative, or special damages of any kind whatsoever, and you may not bring any action against us more than two (2) years after the Completion Date.” Id. at 694, 847 S.E.2d at 792. Five years after completion date, plaintiff-homeowners discovered defective workmanship by McAir and brought suit. Upon review of the contract, the Tsonev Court dismissed plaintiff-homeowners’ claim, stating that the contractually shortened statute of repose was allowable “[b]ecause the express provision of the contract is clear” and therefore “the contract must be enforced as written.” Id. Based upon the Tsnoev decision, it appears a party may contractually modify the statute of repose to match the three-year statute of limitations for construction claims.

Back to the question at hand: what can a general contractor do to avoid the inequity of being sued within an owner’s statute of repose but outside a subcontractor’s statute of repose? At least one of the potential answers is the contractual formation on the front end. A general contractor can contractually modify and limit the statute of repose with the owner as in Tsonev. To that end, one suggestion would be to limit the statute of repose to match the applicable statute of limitations at three years. Alternatively, a general contractor could modify their subcontract agreements to include a tolling provision pursuant to Christie and Window World. In so doing, a subcontractor’s statute of repose would be contractually tolled from the date the owner brings suit against the general contractor. While there’s no silver bullet, at least there do appear to be contractual options available to protect a general contractor against the implicit risk of the statute of repose.

Finally, what can be done if the contracts are silent on the issue of modifying or tolling the statute of repose? Under such a scenario, the options for a general contractor are limited. If, however, the owner of the project has provided notice of potential issues, it might be advisable for a general contractor to file suit against any subcontractors that performed the work in dispute to preserve any available claims. The lawsuit against the subcontractors could later be consolidated with any lawsuit that was filed by the owner but served after the statute of repose has run.

Rule 12(b)(6) Motions: Are They Worth It? See Also: An Invitation To The NCADA Annual Meeting

Wed, 23 Mar 2022 16:46:26 GMT

By Josh Durham, Bell Davis Pitt

North Carolina’s Rule 12(b)(6) provides, in theory, a powerful tool for a defendant to dismiss a lawsuit in its early stages. A challenge under the rule compels the trial court to consider “whether the pleadings, when taken as true, are legally sufficient to satisfy the elements of at least some legally recognized claim.”ⁱ A motion under Rule 12(b)(6) is properly granted when (1) no law supports the plaintiff’s claims, (2) the complaint does not plead sufficient facts to state a legally sound claim, or (3) the complaint discloses facts that necessarily defeat the plaintiff’s claims.ⁱⁱ

In other words, Rule 12(b)(6) can provide a much-desired early exit to litigation, sparing a defendant substantial expense and saving considerable time.

But there is often still a cost to pursue such a motion. Many of our commercial litigation section members practice in the North Carolina Business Court, the state’s specialized forum for cases involving complex and significant issues of corporate and commercial law. While motions in non-Business Court cases frequently do not require briefs, briefs are mandatory in Business Court cases, and they must accompany the motion.ⁱⁱⁱ In 2017, the Court made clear that any defendant pursuing a motion to dismiss under Rule 12(b)(6) must do so, with a motion and supporting memorandum, prior to serving an answer.^iv At least in the Business Court, this put an end to the common practice of placeholder motions to dismiss in answers, to be followed later by a more formal motion and brief.^v

These days, nearly every type of case could merit a Rule 12(b)(6) motion. For example, in suits accusing another of misappropriating a trade secret, the rule can be used to dismiss the case because a plaintiff did not sufficiently describe the alleged secret. Sued for violating a covenant not to compete? Use the rule to challenge the reasonableness of the time, geography, and scope restrictions in the covenant. Rule 12(b)(6) is frequently used in corporate disputes to challenge whether an owner in a closely held entity owed fiduciary duties to another owner. And if a complaint makes reference to a contract, but does not attach it, a defendant can use the rule to introduce the actual contract.^vi At that point, while still under the rule, the defendant can show that a plaintiff’s claims are clearly contrary to the parties’ written agreement.

But, are such motions ultimately worth it?

Each year, the state’s Business Court judges participate as a panel in various continuing education events. In such panels, the judges offer views from the bench, practice pointers, and tips for successfully navigating Business Court practice and procedure. Recently, one of the judges spoke on motions to dismiss under Rule 12(b)(6). The judge confirmed that nearly every type of case could merit such a motion, estimating that nine out of ten cases before the court involve a Rule 12(b)(6) motion.

And he suggested they may not always be the best approach.

Why? A dismissal under Rule 12(b)(6) is not always with prejudice, which means the case will not necessarily end if the motion is granted. A dismissal without prejudice allows a plaintiff to amend its claims, fixing any shortcomings in the allegations. The decision whether to dismiss a case with prejudice or without prejudice (and whether to allow a plaintiff to amend its claims) is entirely within the court’s discretion.^viiA quick survey of Business Court cases within the last six months shows the court often exercises that discretion to dismiss cases without prejudice. Such cases include claims for:

Negligent misrepresentation;^iix
Rescission of a shareholder agreement;^ix
Tortious interference with contract;^x and
Appointment of an independent person to investigate derivative claims under N.C. Gen. Stat. § 57D-8-03(f);^xi

At the recent event, the judge suggested parties should instead consider addressing shortcomings in pleadings without the court’s involvement. In other words, because a motion to dismiss and briefs from the parties might very well result in a plaintiff being given the chance to amend, the parties might save themselves considerable time and expense by just working through a complaint’s shortcomings on their own. And, if a defendant files a motion and memorandum but does not file an answer to the complaint, the plaintiff can amend the complaint as a matter of right. This moots the entire motion and memorandum. The judge suggested this was all the more reason to meet and confer, so to speak, regarding any alleged deficiencies in a complaint. Doing so could avoid having to prepare for a hearing that will ultimately not happen.

The judge’s comments at the recent program follow comments from another judge at past events. With regard to trade secret claims, the judge suggested it might make for a better strategy to refrain from 12(b)(6) motions that attack the sufficiency of a complaint’s trade secret description. Instead, a party should consider whether to wait to attack the trade secret claim at summary judgment, when, if a motion is successful, the case will indeed be over.

These comments are definitely food for thought, and Rule12(b)(6) strategies definitely merit further discussion.

That is why, at this year’s Annual Meeting in Wilmington, the Commercial Section will be holding a breakout session on June 18 to specifically discuss Rule 12(b)(6) strategies. We are planning an engaging session with insight from an esteemed panel and robust discussion from attendees.

We hope to see you there!

ⁱArroyo v. Scottie’s Prof’l Window Cleaning, Inc., 120 N.C. App. 154, 158, 461 S.E.2d 13, 16 (1995).

ⁱⁱOates v. JAG, Inc., 314 N.C. 276, 278, 333 S.E.2d 222, 224 (1985).

ⁱⁱⁱBCR 7.5.

^ivNew Friendship Used Clothing Collection, LLC v. Katz, 2017 NCBC 71 (N.C. Super. Ct. Aug. 18, 2017).

^vAdmittedly, I had done this in a case before the Business Court, filing a formal motion and memorandum more than a year after serving the answer.

^viErie Ins. Exch. v. Builders Mut. Ins. Co., 227 N.C. App. 238, 242, 742 S.E.2d 803,808 (2013).

^viiFirst Fed. Bank v. Aldridge, 230 N.C. App. 187, 191, 749 S.E.2d 289 (2013).

^iixBotanisol Holdings II, LLC v. Propheter, No. 21 CVS 102, 2021 WL 4844528, at *9 (N.C. Super. Oct. 18, 2021).

^ixLoyd v. Griffin, No. 20 CVS 2394, 2021 WL 5865360, at *8 (N.C. Super. Dec. 10, 2021).

^xId.

^xiNorris v. Greymont Dev., LLC, No. 21 CVS 12659, 2022 WL 278278, at *8 (N.C. Super. Jan. 31, 2022).

N.C. Farm Bureau v. Dana: Bringing Common Sense Back to Underinsured Motorist Law

Thu, 24 Feb 2022 17:18:54 GMT

By Austin R. Walsh
Hedrick Gardner Kincheloe & Garofalo, LLP

On 12/17/21, the NC Supreme Court issued its opinion in North Carolina Farm Bureau Mut. Ins. Co., Inc. v. Dana ⁱ, which clarifies the maximum underinsured motorist (UIM) coverage available to claimants regardless of whether the liability coverage was exhausted based on the per-person or per-accident policy limits.

The Dana decision is a win for common sense interpretation of the policy and N.C. Gen. Stat. §20-279.21(b)(4) and a marked change in course following the Supreme Court’s 2018 decision in Hairston v. Harward ⁱⁱ, which declared for the first time that UIM coverage is a collateral source and profoundly increased a defendant’s exposure to an excess verdict.

In Dana, the tortfeasor was intoxicated when his vehicle crossed the center line and collided with the Danas and a third vehicle, causing the death of Pamela Dana and serious injury to William Dana.

The tortfeasor’s vehicle was insured by Integon National Insurance Company with liability limits of $50,000 per-person, $100,000 per-accident. Integon tendered the per-accident limits in a global settlement, including offers of $43,750 to the Estate and $32,000 to William.

The Dana vehicle carried a Farm Bureau UIM policy with limits of $100,000 per-person, $300,000 per-accident. Farm Bureau offered $56,250 in “new money” to the Estate of Pamela and $68,000 in “new money” to William for a total UIM payout of $124,250. When combined with the liability recovery, Farm Bureau’s offers brought the Estate and William’s total recovery to $100,000 per claimant.

The Estate and Mr. Dana refused the offer, arguing that under N.C. Farm Bureau v. Gurley ⁱⁱⁱ, the total UIM coverage available to the Danas was $200,000, not $124,250. The Danas arrived at $200,000 by reducing the $300,000 per-accident UIM limits by the $100,000 per-accident liability limits. Assuming an even split of the UIM coverage, this would have resulted in the Estate of Pamela Dana and Mr. Dana recovering $143,750 and $132,000, respectively.

Farm Bureau sought a declaratory judgment. On cross motions for summary judgment, the trial court found for the Danas. Farm Bureau appealed and the Court of Appeals unanimously affirmed. The Supreme Court granted discretionary review and reversed.

The Supreme Court opinion authored by Justice Ervin gives a detailed analysis of Gurley and N.C. Gen. Stat. § 20-279.21(b)(4). In Gurley, the Court of Appeals laid out two exclusive scenarios to determine available UIM coverage: (1) a liability settlement tendering the per-person limits and (2) a liability settlement tendering the per-accident limits to multiple claimants. In scenario #1, the liability settlement is subtracted from the UIM per-person limits to find the maximum UIM coverage. In scenario #2, the per-accident liability limits are subtracted from the per-accident UIM limits, but an individual’s recovery is not bounded by the per-person limit ^iv.

The statutory language at issue provided that “the limit of underinsured motorist coverage applicable is determined to be the difference between the amount paid to the claimant under the exhausted liability policy or policies and the limit of underinsured motorist coverage applicable to the motor vehicle involved in the accident.” In Gurley, the Court of Appeals implied that by using the singular “limit” and not the plural “limits,” the Legislature intended for only the per-person or per-accident limit to apply as a cap to coverage, but not both ^v. As applied to the Danas, the Gurley Rule would have resulted in a windfall recovery of $75,750 above the per-person UIM limits.

In a clear rebuke, Justice Ervin wrote that the Gurley Court’s reliance on the use of the singular “limit” was a “slender reed upon which to base a conclusion that the per-person and per-accident limits of liability may not both be applicable.” ^vi Relying instead on “the traditional use” of the per-person and per-accident liability limits “that insurers, policyholders, and policy makers are all familiar with,” ^vii Justice Ervin continued, “[w]e are unable to discern any reason why the General Assembly would have intended to preclude the use of both per-person and per-accident liability limitations in determining the maximum amount of underinsured motorist coverage.” ^viii

The opinion went on to hold that in calculating the amount to be paid, Courts should treat “the per-accident amount of [UIM] coverage as the total sum that is available to all of the claimants . . . subject to the caveat that the amount of [UIM] coverage that is available to any individual claimant is limited to the per-person amount.” ^ix As a result, the Danas would receive a total recovery of $100,000 per claimant, which is the maximum per-person coverage bargained for when the policy was purchased.

In her concurrence, Justice Earls argued that the majority rightfully supplanted Gurley, but should have overruled Gurley explicitly, rather than preserving Gurley’s analysis to avoid a “one size fits all” rule.

A second concurrence, authored by Justice Berger and joined by Chief Justice Newby and Justice Barringer, argued that because the statute does not expressly provide whether the per-accident limit is subject to the per-person limit, the Court should have looked to the policy. Specifically, the Dana policy clearly states that “[s]ubject to [the] limit for each person, the limit of bodily injury liability shown in the Declarations for each accident for [UIM] Coverage is our maximum limit of liability for all damages for bodily injury resulting from any one accident.” ^x

For two decades, the personal automobile policy language has been in conflict with the Gurley Rule. Fortunately, the Supreme Court has taken a step in the right direction with Dana’s common-sense re-alignment of the uniform policy and the statute and by providing insurers and policy holders with a solid foundation to evaluate future UIM claims. ^xi

i. N. Carolina Farm Bureau Mut. Ins. Co., Inc. v. William Thomas Dana, Jr., et al., 2021-NCSC-161, 866 S.E.2d 710 (2021).

ii. Hairston v. Harward, 371 N.C. 647, 821 S.E.2d 384 (2018).

iii. N. Carolina Farm Bureau Mut. Ins. Co. v. Gurley, 139 N.C. App. 178, 532 S.E.2d 846 (2000).

iv. Id. at 183, 532 S.E.2d at 849

v. Id.

vi. Dana, 2021-NCSC-161 at ¶ 19, 866 S.E.2d at 717.

vii. Id. at ¶ 18, 866 S.E.2d at 717.

iix Id. at ¶ 19, 866 S.E.2d at 717.

ix. Id. at ¶ 23, 866 S.E.2d at 719.

x. Id. at ¶47-48, 866 S.E.2d at 724 (Berger, J. Concurring) (emphasis added).

xi. The positive outcome in Dana is owed in part to the NCADA’s Amicus Committee and the efforts of J.T. Crook, Phillip A. Collins, and David S. Coats of Bailey & Dixon, L.L.P., who authored the NCADA’s amicus curiae brief.

Extended Compensation Cases Before the Full Commission

Thu, 30 Sep 2021 14:28:12 GMT

by Charles E. McGee, Sizemore McGee, PLLC

In workers’ compensation claims arising on or after 6/24/2011, N.C. Gen. Stat. § 97-29 limits the payment of temporary total disability (“TTD”) compensation to 500 weeks from the date of first disability, unless the claimant qualifies for extended compensation through N.C. Gen. Stat. § 97-29(c). To qualify for extended compensation, the claimant’s extension application must be made at least 425 weeks after the date of first disability, and unless otherwise agreed to by the parties, the claimant must prove by a preponderance of the evidence a total loss of wage-earning capacity. Deputy Commissioners have thus far entered decisions in eight cases addressing extended compensation; five of these have been appealed to the Full Commission, which very recently entered its first decision in the appeals.

· In I.C. No. X51195, Nobles v. NC DHHS/Central Regional Hospital, Plaintiff sustained compensable injuries to his eye, mouth, and shoulder when he was assaulted by a patient on 6/26/2011. Deputy Commissioner Robert J. Harris awarded extended compensation on 1/25/2021. Much of the litigation focused on the compensability of Plaintiff’s alleged chronic post-traumatic stress disorder (“PTSD”) and major depression and alleged disability resulting therefrom. Two neuropsychiatrists authorized by Defendants deemed Plaintiff malingering, and a Rehabilitation Professional prepared a Labor Market Survey (“LMS”) identifying several positions Plaintiff could perform. Plaintiff presented evidence from a treating psychiatrist who opined his chronic PTSD and major depression were related to the 6/26/2011 incident and render him permanently and totally disabled and unemployable. The Deputy Commissioner gave greater weight to the testimony of Plaintiff’s treating psychiatrist over other expert testimony, noting the two neuropsychiatrists authorized by Defendants were one-time evaluators and the Rehabilitation Professional did not meet with Plaintiff and based her LMS entirely on the premise that Plaintiff was malingering and had no restrictions related to the 6/26/2011 incident. The Deputy Commissioner concluded Plaintiff’s chronic PTSD and major depression are causally related to the 6/26/2011 incident and result in a total loss of wage-earning capacity. Defendants appealed to the Full Commission. On 9/29/2021, the Full Commission issued a decision denying compensability for the alleged chronic PTSD and major depression and denying Plaintiff’s application for extended compensation. The Full Commission gave greater weight to the opinions of the two neuropsychiatrists authorized by Defendants, finding Plaintiff’s treating psychiatrist relied solely on Plaintiff’s subjective reports to support his diagnosis while the two neuropsychiatrists authorized by Defendants formed their opinions based upon both Plaintiff’s subjective reports and his objective testing performance. In addition, the Full Commission found Plaintiff had not treated for his eye, mouth, and shoulder injuries since 2012, had reached maximum medical improvement for the injuries, and did not retain any work restrictions stemming therefrom. Accordingly, the Full Commission concluded Plaintiff had not established a lack of total wage-earning capacity as a result of his compensable injuries and thus was not entitled to extended compensation. Vice-Chair Myra L. Griffin authored the Full Commission’s Opinion & Award, and Commissioner Kenneth L. Goodman and Deputy Commissioner David Mark Hullender concurred.

· In I.C. No. X59367, Betts v. NC DHHS/Cherry Hospital, Plaintiff sustained an ankle injury while restraining a combative patient on 8/12/2011 and ultimately underwent six surgeries. Deputy Commissioner Harris awarded extended compensation on 3/12/2021. One authorized treating physician assigned sedentary work restrictions to Plaintiff, while another added that Plaintiff should be allowed to raise her foot to at least heart level. Plaintiff retained a Rehabilitation Professional who performed a vocational evaluation and opined Plaintiff’s ankle condition and restrictions prevent her from obtaining and maintaining employment in any setting due to the foot elevation requirements. Defendants retained a Rehabilitation Professional who opined it is more likely than not Plaintiff could return to wage-earning capacity, but if Plaintiff is required to keep her right foot elevated for at least twenty minutes every hour, there are no jobs in the national economy which Plaintiff could perform unaccommodated. The Deputy Commissioner gave greater weight to the testimony and opinions of the Rehabilitation Professional retained by Plaintiff, determining her analysis is more tailored to Plaintiff’s specific circumstances. In addition, the Deputy Commissioner found that while Plaintiff may be a candidate for a very flexible, part-time, stay-at-home position with an employer which offers on-the-job training, the possibility of such a position existing does not reach the level of providing a reasonable expectation that Plaintiff could earn wages in the competitive economy. Thus, the Deputy Commissioner found, Plaintiff met her burden of proof on extended compensation by showing there is no reasonable expectation she could earn wages in the competitive economy given her limitations and need for accommodation due to her injury, in combination with her age, limited education, and limited transferrable skills for sedentary work. Defendants have appealed to the Full Commission, which heard oral argument on 8/11/2021.

· In I.C. No. Y18418, Sturdivant v. NC DPS, a prior Deputy Commissioner decision had deemed Plaintiff’s 8/31/2011 back injury compensable and awarded TTD. Deputy Commissioner Erin F. Taylor denied extended compensation on 5/5/2021. In rejecting Plaintiff’s argument that the prior decision is res judicata on the issues determined therein and entitles him to a presumption of ongoing disability, the Deputy Commissioner relied on the statutory language of N.C. Gen. Stat. § 97-29, which applies the compensation cap to instances “when a claim has been deemed compensable following a hearing,” and notes TTD compensation ends 500 weeks from the date of first disability “unless the employee qualifies for extended compensation” under subsection (c). In analyzing the merits of the extended compensation application, the Deputy Commissioner relied on Webster’s Dictionary for the plain, ordinary, and literal meaning of a “total loss” of wage-earning capacity, and concluded Plaintiff is required to show “a complete destruction of the ability to earn wages” to extend his compensation. Though Plaintiff testified he was unsuccessful in finding work and that his pain kept him from working, the Deputy Commissioner gave great weight to the opinions of four medical providers, some of whom provided restrictions but none of whom opined Plaintiff was unable to work. The Deputy Commissioner also gave greater weight to the opinions of the Rehabilitation Professional Defendants retained, noting the Rehabilitation Professional Plaintiff retained did not contact any prospective employers for additional information regarding job postings and restricted her LMS to Plaintiff’s home county. Plaintiff has appealed to the Full Commission, which heard oral argument on 9/15/2021.

· In I.C. No. X72421, Tyson v. NC DHHS/O’Berry Neuro-Medical Treatment Center, Plaintiff sustained a low back injury on 10/8/2011 while transferring a client from a wheelchair. Deputy Commissioner Kevin V. Howell denied extended compensation on 8/12/2021. During depositions, Plaintiff’s pain management provider opined that although Plaintiff has been out of work for some time and his medication carries potentially negative side effects, Plaintiff could perform work in the sedentary-to-light physical level; a rheumatologist who also continued to treat Plaintiff agreed he is capable of work with restrictions even after considering his co-existing conditions. Defendants retained a Rehabilitation Professional who conducted an LMS and opined Plaintiff was capable of work and able to earn wages in some capacity. Though Plaintiff disputed his ability to return to work, the Deputy Commissioner gave greater weight to the opinions and testimony of the medical providers and the Rehabilitation Professional. In reviewing the 2011 changes to the Act, the Deputy Commissioner concluded N.C. Gen. Stat. § 97-29(c) utilizes a “new and different standard for weekly compensation beyond 500 weeks,” and its plain meaning prohibits TTD compensation beyond 500 weeks from the date of first disability “if the employee has any wage-earning capacity.” Thus, the Deputy Commissioner concluded, because Plaintiff has not demonstrated by a preponderance of the evidence that he sustained a total loss of wage-earning capacity, he is not entitled to extended compensation. Plaintiff has appealed to the Full Commission, and the appeal is in the Briefing stage.

· In I.C. No. X59853, Kotsias v. Florida Health Care Properties, Plaintiff sustained a mid-back injury while transferring a patient on 8/17/2011. The case has an interesting fact pattern and winding procedural history. Though the issue of extended compensation was not identified in the parties’ 2014 Pre-Trial Agreement, it was subsequently raised, and Deputy Commissioner Tiffany M. Smith addressed it in an 8/12/2021 decision. Of note, the Deputy Commissioner found that Plaintiff was entitled to temporary partial disability compensation when employed in a make-work position in early 2014, but was thereafter capable of some work, did not perform a reasonable job search, and is not totally disabled due to her mid-back injury; in addition, the Deputy Commissioner found Plaintiff’s subsequently reduced and at times total lack of earnings did not arise out of her mid-back injury, Plaintiff had not made an application for extended TTD compensation, and Plaintiff had not demonstrated a total loss of wage-earning capacity. Both parties have appealed to the Full Commission, and the appeals are in the Briefing stage.

Going forward, it will be important for counsel to identify and track the legal standards and methods of proof applied by the Full Commission in its decisions in these extended compensation cases. While Sturdivant and Tyson indicate a “new and different” showing is required to prove a total loss of wage-earning capacity – i.e., “a complete destruction of the ability to earn wages” or a complete lack of “any wage-earning capacity,” buttressed by sufficient medical and vocational evidence – Betts indicates a showing of “no reasonable expectation [to] earn wages in the competitive economy” may be combined with a claimant’s age, education, and transferrable skills to demonstrate a total loss of wage-earning capacity. Though the appellate courts may ultimately weigh in on some or all of the cases, the Full Commission’s decisions will help clarify the applicable burdens and analyses in the meantime.

In addition, the defense bar has noted several issues arising during litigation of extended benefits cases, including: objection to the use of an LMS where the claimant did not take part in its formulation; attempts to require the institution of full vocational rehabilitation efforts in conjunction with an LMS; attempts to add new and even previously-denied body parts/conditions to bolster disability claims (including allegations of injury- and claim-induced psychological issues); and attempts to take voluntary dismissals without prejudice after filing a Hearing Request. Counsel would be well served to be aware of these potential issues going forward, and to anticipate the need to counter new or denied body parts/conditions and restrictions as well as efforts to extend litigation and thwart or blunt LMS evidence.

Water in the Light Fixtures??? How HVAC Defects Appear in Strange Places

Thu, 30 Sep 2021 14:25:18 GMT

By Chad Jones, P.E., CMSE, CFEI, The Warren Group

One of my more interesting calls and subsequent forensic investigations was regarding water accumulating inside of 2X4 fluorescent light fixtures in a suspended ceiling of a secondary school in South Carolina.

A client called reporting an unusual problem. They indicated that the metal chassis of the classroom lights were sweating and generating enough water to accumulate on the diffuser lens of the lights. Seeing is believing, so obviously an on-site investigation was in order!

On arrival at the school the next day, water was indeed observed to be accumulating inside the 2X4 fixtures and puddling on the diffuser lens in one classroom and the adjoining teachers work room. The sweating light fixtures were not observed in the adjacent classrooms or teacher workrooms. The phenomenon was also only observed on the first floor of the building. The facility was an approximately 50-year-old two-story educational facility with CMU walls and precast concrete double tees for the floor and roof.

Inspection above the ceiling of the first story in the affected spaces showed large amounts of condensate on the underside of the double tee panels. The concrete panels were literally sweating and looked like the tile walls of a bathroom after a long, hot shower! Measurements were taken using a non-contact infrared thermometer and the temperature of the areas indicated mid to high 50 degrees Fahrenheit. A quick check of a psychrometric chart indicates that these temperatures are near or at the saturation line for water, explaining why the moisture in the air was condensing on the panels. Test measurements in adjacent rooms not showing moisture problems indicated the temperature of the concrete double tees were in the high 60’s F, certainly above the saturation point as evidenced by the lack of condensation.

These observations led to two main questions, why is the ceiling in the first floor of the affected area so cold and why is there excess moisture present in a conditioned building?

Investigating the cause of the extremely cold concrete double tee in the affected room involved inspecting the classrooms above. When I entered the classroom above our subject one, I noted that it was very cold. From discussions with the teacher, it was discovered that the space was unbearably cold at all times since the start of the school year. In fact, the teacher and students wore coats in class even though it was August in South Carolina, definitely not a normal sight for sure.

The HVAC system in the building was antiquated and did not have a central building management system. Each HVAC unit had a local thermostat housed in locked box. The teachers were not allowed to adjust the setpoint at all. Through the clear face of the locked box, the setpoint in the classroom was observed to be set on 55 °F and the space temperature was 59 degrees!! Because the thermostat setpoint was not reached, the HVAC unit continued to supply 55 – 57 °F air to the space in an attempt to reach setpoint. The unit never cycled off, it continually supplied air at saturation conditions. Temperature measurement of the floor indicated 55 – 57 °F, explaining the high 50-degree temperatures observed in the ceiling of the space below the classroom. Maintenance was notified and the thermostat was reset to mid 70’s per district temperature policies.

With the first question of why the double tees were cold answered, the next question to answer is to find the source of the excess moisture in the ceiling space. As the building is not new, infiltration of outside air is always a concern. While investigating above the ceiling the exterior walls were checked for air intrusion. Large amounts of air could be detected entering the building through the building joints and seams. The quantity of air was so large it could be felt on the skin of the back of your hand and it caused the spider webs above ceiling to sway! A check of exterior doors indicated that the doors had significant resistance to being opened. Once a door was opened, large amounts of air began to rush into the building. The day was calm with little to no wind detectable outside. So why was the building so negative?

Next stop was the roof of the building. Several large upblast “mushroom” exhaust fans were observed on the roof, towards the center of the building. Data plate information on the fans was located and recorded. The fans were obviously quite large and moved a great deal of air. Investigation back inside the building indicated that the fans exhausted the restrooms located in the core of the building but based on experience and knowledge of fan HP and chassis size, the fans were moving air well in excess of code required levels. Where was the makeup air coming from and why were the fans so large?

A trip to the central file repository for the District Maintenance Department was in order. Original drawings were obtained for the building. Reviewing the drawings indicated that the classrooms used to be conditioned by a two-pipe hydronic system with fan coil units located in the ceiling. Each fan coil had an outside air duct tied to the return duct with a louver on the exterior wall to bring in fresh air to the space. The two-pipe system and associated ductwork had been demolished and the louvers sealed. Wall mounted heat pumps had been retrofitted to the school in the past. These units had outside air dampers that would close when the wall mount unit was not running. However, the exhaust fans in the restroom were not replaced with appropriately sized fans considering the HVAC system change. This set up an extremely negative condition in the structure. This was the source of the massive infiltration observed above ceiling.

Outside air calculations and code required exhaust calculations for the restrooms were performed. The overall air balance for the space was then analyzed. New exhaust fans were sized to meet current exhaust requirements in the restroom area. Subsequent replacement of the oversized fans with properly sized fans reduced the infiltration to a level expected from a 50-year-old structure. The space above the ceiling dried up and there were no further reports of puddles of water accumulating in light fixtures.

Design defects can manifest in mysterious places. A thorough investigation should lead us to the root cause and potential responsible parties.

Chad Jones, PE, CFEI, CMSE has a Bachelor of Science in Mechanical Engineering from Clemson University. Chad has over 20 years of engineering experience including mechanical, process, and manufacturing engineering. This work has included equipment design, machine safeguarding, cost estimating and safety compliance. Chad also has over 10 years of commercial, industrial, and residential HVAC and plumbing design experience. Chad is a Certified Fire and Explosion Investigator and IFSAC certified Firefighter II in Greenwood County, South Carolina.

Industrial Commission Returns to Virtual Hearings

Thu, 30 Sep 2021 14:14:53 GMT

By Kristine L. Prati, Wilson Ratledge, PLLC

After announcing a return to in-person hearings, the Industrial Commission notified practitioners that Full Commission and Deputy Commissioner hearings will continue to be held by videoconference until further notice. While the Industrial Commission has been hosting virtual hearings for over a year now, here are some tips and reminders to consider, should you participate in a virtual procedure.

For hearings at the Deputy Commissioner level, email addresses of all witnesses and attorneys must be provided. Similarly, the Full Commission requires identification of the attorney handling the oral arguments, if different from the attorney of record. Prior to the hearing, a WebEx link for the hearing will be provided by the Deputy Commissioner. Similarly, the clerk of the Panel Chair will send an email requesting/confirming a preferred email address to send the Microsoft Teams invite to. Thereafter, a Microsoft Teams meeting invitation and link will be provided by the Full Commission’s office. It is imperative that attorneys respond to the clerk and accept the Microsoft Teams meeting invitation in a timely fashion to ensure receipt of the invitation/link and for oral arguments to run smoothly on the day of.

Prior to a Deputy Commissioner hearing, practitioners and witnesses may perform a “test hearing” through www.webex.com/test-meeting.html. It is also recommended that you and your witnesses “appear” for the virtual conference at least 15 minutes ahead of time to work out at any issues. While members of the Industrial Commission have become quite adept with the virtual platforms, they often have to spend large amounts of time guiding less adept practitioners and claimants who are experiencing technology issues. Microsoft Teams, used by the Full Commission, allows practitioners to navigate the system, through use of the “join” link that is emailed by the Full Commission ahead of time, to ensure competency with it (the link can be used more than once). Alternatively, a request can be made to the clerk of the Panel Chair a few weeks in advance of the oral arguments to schedule a “meeting” through Microsoft Teams.

Some witnesses have trouble securing a strong internet connection, which can cause massive delays, particularly if the witness keeps freezing or dropping the connection, and thus necessitating a pause in the hearing. As such, reaching out to plaintiff’s counsel a few days before the hearing to discuss plans to ensure that all witnesses have a strong internet connection, as well as a device to access the virtual hearing, is advisable.

Asking the Deputy Commissioners for a pre-trial conference via WebEx to work out connectivity issues, especially for pro se claimants, is another excellent resource. In addition to working out connectivity issues, it also gives Deputy Commissioners a chance to explain to pro se plaintiffs what will take place at the hearing and answer questions that may slow a hearing down. Additionally, some Deputy Commissioners have been utilizing the pre-trial conference to explain the Pre-Trial Agreement to pro se plaintiffs and ask the pro se plaintiff to stipulate to everything in the Pre-Trial Agreement if there is no disagreement.

As for exhibits, an organized binder of all bate stamped exhibits the parties intend to admit should be prepared well in advance of the hearing and provided to each witness ahead of time, as a substantial amount of time can be wasted trying to identify what document the witness is to review during the hearing. In addition, while WebEx allows documents to be pulled up on the platform for everyone to see, it is a slow process and some witnesses may not be able to review the document and testify on video at the same time. As far as video evidence is concerned, each Deputy Commissioner seems to have a different protocol for submission of the video, as it cannot be uploaded through the Industrial Commission portal. For example, one Deputy Commissioner requested that the video be mailed to the Industrial Commission on a USB prior to the hearing, while another requested that the video or video link be sent by email and then be mailed to the Industrial Commission post-hearing if admitted into evidence. As such, it is advisable to contact your Deputy Commissioner in advance of the hearing to determine how he or she would like the video to be accessible during the hearing and for entry into evidence.

A Honey Boo Boo? The Ninth Circuit Discusses Bees, the “Reasonable Consumer,” and the Intersection of Federal Labeling Law and Section 75-1.1

Tue, 31 Aug 2021 14:39:36 GMT

By Thomas Segars, Ellis & Winters, LLP

Imagine yourself combing the aisles of the local Trader Joe’s with your brood in tow. You are minding your own beeswax when, above the drone of swarming shoppers, you hear a buzz about a new product: “100% New Zealand Manuka Honey.” As you grab a jar off the shelf, what would you reasonably believe was inside?

The United States Court of Appeals for the Ninth Circuit examined this question recently and offered some lessons about litigating section 75-1.1 claims in the process.

The Comb Foundation

Moore v. Trader Joe’s Co. was a putative class action brought under the consumer-protection laws of California, New York, and North Carolina. The plaintiffs purchased a Trader Joe’s store brand of “100% New Zealand Manuka Honey” that listed “Manuka Honey” as its sole ingredient. Disappointed to learn that only 57.3% to 62.6% of the honey inside actually derived from Manuka flower nectar, the plaintiffs sued. They claimed that the product was adulterated because it had been made, in part, with the nectar of other types of flowers. They also claimed that Trader Joe’s label was misleading because it implied that the honey inside was derived exclusively from the nectar of Manuka flowers.

Trader Joe’s moved to dismiss the complaint on two grounds: (1) that the label was not misleading and the product was not adulterated as a matter of law, and (2) that the state-law claims were preempted by federal labeling laws. The trial court agreed with Trader Joe’s on both points and dismissed the case. The plaintiffs appealed.

Let Me Tell You About the Birds and the Bees

The Ninth Circuit began with some basic facts of life about honey—some of which you probably knew, but others that you may not have.

Honey is made by bees. Bees forage among flowers to collect nectar for honey. By examining a honey’s pollen content, you can estimate the relative concentrations of different floral nectars.

The FDA provides guidance on how honey may be labeled for sale. Although all honeys are made from a combination of different floral nectars, these are not considered separate ingredients. For labeling purposes, honey is a “single-ingredient food.” The FDA allows a honey producer to label honey as being derived from a particular plant or blossom (e.g., clover honey, tupelo honey, or orange blossom honey) if it can show that the plant or blossom on the label is the “chief floral source of the honey.”

The Manuka bush is a plant native to Australia and New Zealand. Honey derived from the Manuka’s floral nectar contains methylglyoxal, an organic compound believed to have antibacterial and other beneficial properties. As Manuka honey has grown in popularity, producers have developed a system for grading the purity called the “Unique Manuka Factor” or “UMF” system. The UMF system grades a honey’s concentration of methylglyoxal on a scale of 5+ (at the low end) to 26+ (at the high end).

The “Reasonable Consumer” Is a Busy Bee

The Ninth Circuit affirmed the dismissal, reasoning that the plaintiffs’ claims failed as a matter of law.

The court made quick work of the adulteration claim. That claim rested exclusively on the fact that the bees had visited different flowers—not only Manuka blossoms. This was not adulteration, the court explained: “Bees make the honey, without any input from Trader Joe’s or any other manufacturer.”

As to the claim that Trader Joe’s label was misleading, however, the Ninth Circuit did something more unusual. Although reasonableness is almost always a question of fact that cannot be resolved on the pleadings, the Moore court held that it was unreasonable as a matter of law for a consumer to be misled by Trader Joe’s label. To reach that result, the court turned to the fabled “reasonable consumer.”

Under section 75-1.1 and the other state laws invoked, the Moore court explained, “claims based on deceptive or misleading marketing must demonstrate that a ‘reasonable consumer’ is likely to be misled by the representation.” For example, the Eastern District of North Carolina’s Solum v. CertainTeed case, to which Moore cited, held that “reasonableness” requires the recipient of the representation to use “reasonable care to ascertain the truth.”

The Ninth Circuit reasoned that “other information about Trader Joe’s Manuka Honey would quickly dissuade a reasonable consumer from the belief that Trader Joe’s Manuka Honey was derived from 100% Manuka flower nectar.”

What information should have tipped off the reasonable consumer? The Ninth Circuit identified three points:

· First, it is impossible to make honey that is 100% derived from one floral source. The court discussed the “foraging nature of bees” and charged the reasonable consumer with knowing that “it is impossible to exercise complete control over where bees forage down to each specific flower or plant” and that “[u]nlike other domesticated animals, bees cannot be commanded or directed.”
· Second, the comparatively low cost of Trader Joe’s product should have been a “signal” that the honey inside had a lower concentration of honey derived from Manuka flower nectar.
· Third, the Trader Joe’s label did include the product’s “10+” rating on the UMF scale. The court explained that “[r]easonable consumers of Manuka honey would routinely encounter such ratings and would likely have some knowledge about them.”

The Ninth Circuit similarly rejected the plaintiffs’ claim that Trader Joe’s label was misleading because it claimed a single ingredient: Manuka honey. The Moore court looked to the FDA guidelines for labeling honey. It concluded that Trader Joe’s single-ingredient label was appropriate under those guidelines. “Manuka honey,” it reasoned, meant “honey whose chief floral source is Manuka.” Even plaintiffs’ analysis that Trader Joe’s product was 57.3% to 62.6% pure confirmed that this was true.

Having concluded that the label was not misleading as a matter of law, the Ninth Circuit did not need to decide whether federal labeling laws preempted plaintiffs’ state-law claims.

Have Consumers Been Stung?

The Moore court charged the reasonable consumer with knowledge of several nuanced facts about bees, honey, and how Manuka honey is graded. Scholars are already debating whether this was fair. See, for example, Rebecca Tushnet’s thought-provoking post on the case.

After all, the rare cases that do hold that it is unreasonable as a matter of law for consumers to be misled tend to read like a page from Captain Obvious’s diary. The reasonable consumer is expected to know, for example, that

· there is no fruit in “Froot Loops”;
· Cap’n Crunch “Crunch Berries” are not actual berries;
· soymilk does not come from cows; and
· a cracker is a “dry thin crispy baked product” and is “not composed of primarily fresh vegetables.”

On the other hand, Manuka honey is a “niche, specialty product”—not a “low-cost, everyday item[]” like shelf-stable parmesan cheese. The Moore court seized on this fact to explain why a reasonable consumer of Manuka honey would be expected to exercise greater diligence, to have a keener price sensitivity, and to have known about the UMF grading system. In short, the Ninth Circuit expects the reasonable Manuka honey consumer to be a busy bee.

The Flight Path for Section 75-1.1 Litigants

Moore is a helpful datapoint for anyone litigating section 75-1.1 claims about deceptive or misleading advertising or labeling. It provides new insight into the mind of the elusive reasonable consumer.

Moore’s use of FDA guidelines and industry standards like the UMF grading system is notable, too. Although the Ninth Circuit never reached the question of whether federal labeling laws preempted section 75-1.1, its analysis relied on those laws and similar standards. As we have discussed in the past, courts evaluating section 75-1.1 claims frequently borrow conduct standards from external sources. Here, both the FDA guidelines and the industry’s UMF grading system informed the court’s analysis of Trader Joe’s conduct.

Do you find Moore’s reasoning sweet? Or did it leave you feeling stung? Either way, its lessons can inform your section 75-1.1 practice. And we hope we’ve left you a more educated consumer of honey heading into National Honey Month.

Fact or Fiction: Can You Trust Your Fire Investigator’s Report?

Thu, 29 Jul 2021 16:21:54 GMT

Following up from yesterday's webinar with JS Held--Fact or Fiction: Can You Trust Your Fire Investigator’s Report?

North Carolina Supreme Court Expands Sound Basic Education to Encompass Deliberate Indifference Claims

Thu, 29 Jul 2021 15:45:46 GMT

By Dan Strong and Becky Thornton, Teague Campbell Dennis & Gorham, LLP

Article I, Section 15 of the North Carolina Constitution provides that “[t]he people have a right to the privilege of education, and it is the duty of the State to guard and maintain that right.” N.C. Const. art. I, § 15. The North Carolina Constitution implements this provision in Article IX, Section 2 by commanding the General Assembly to “provide by taxation and otherwise for a general and uniform system of free public schools ... wherein equal opportunities shall be provided for all students.” N.C. Const. art. IX, § 2. On June 11, 2021, the North Carolina Supreme Court determined that this constitutional protection extends to instances of extreme bullying in public schools, thereby permitting claimants to bring a tort action against a school system based on allegations that it failed to act.

The Lawsuit

In Deminski v. State Board of Education, the North Carolina Supreme Court considered whether a tort action for violation of these two constitutional provisions could be filed against the State Board of Education. Ashley Deminski, guardian ad litem of her three elementary school aged children in Pitt County, North Carolina, filed suit against the State Board of Education and Pitt County Board of Education alleging the three students had been bullied and sexually harassed by other students. The minor plaintiffs and Deminski repeatedly informed teachers and school administrators about the bullying. The County Board of Education is alleged to have been made aware of the incidents. School personnel reportedly informed Deminski that there was a “process” that would “take time.” However, as time progressed, plaintiff alleges the bullying and harassment continued with no real change. When the school did take action to resolve bullying against one of the three students by modifying one bully’s schedule, it resulted in that bully having more time in the other two bullied students’ classes. The three students eventually transferred to a new school effective only for the 2016-2017 school year. The transfer was later modified to be effective for as long as Deminski and the minor plaintiffs resided at their then-current address.

The Deminski suit included claims for violations of Article I, Section 15 and Article IX, Section 2, alleging that the minor plaintiffs were denied their right to a sound basic education as a result of being in a hostile academic environment where the School Board entities: “had substantial control over the harassing conduct;” “had actual knowledge of the harassing conduct;” and “exhibited deliberate indifference to the harassing conduct.” Both the State Board of Education and Pitt County Board of Education moved to dismiss the Complaint. The State’s motion was granted in full. Pitt County’s motion was denied, in part, allowing the Constitutional claims to proceed. Pitt County appealed.

The Court of Appeals Reverses

The Court of Appeals reversed the trial court’s order denying the motion to dismiss, holding that the constitutional guarantee to a sound basic education extended no further than an entity making educational opportunities available. A dissenting opinion, however, concluded that the minor plaintiffs had sufficiently alleged that Pitt County failed to provide them with an opportunity to receive a sound basic education based on the school’s deliberate indifference to a hostile classroom environment. Deminski appealed to the North Carolina Supreme Court based on the reasoning outlined in the dissenting opinion.

The Supreme Court’s Ruling

The Supreme Court, quoting Leandro v. State, 346 N.C. 336, 345, 488 S.E.2d 249, 254 (1997), stated that “[a]n education that does not serve the purpose of preparing students to participate and compete in the society in which they live and work is devoid of substance and is constitutionally inadequate.” An affirmative duty is placed upon the government “to guard and maintain” a student’s right to a sound basic education. The Supreme Court found that Deminski had sufficiently pleaded the elements required to assert a Constitutional claim against Pitt County, including the first and third elements that the violation was undertaken by a state actor and that there was no “adequate state remedy” for the alleged injury. Interestingly, when analyzing whether Deminski had alleged a “colorable constitutional claim,” the Court adopted the rationale of the dissent issued in the Court of Appeals. The Supreme Court found that the school’s “deliberate indifference to ongoing student harassment created an environment in which plaintiff-students could not learn.” The Court noted that “the right to a sound basic education rings hollow if the structural right exists but in a setting that is so intimidating and threatening to students that they lack a meaningful opportunity to learn.”

Deliberate Indifference

A claim for deliberate indifference, which requires a showing that the defendants actually knew of and disregarded the alleged activity, arises in several types of actions. In § 1983 claims alleging violation of the Eighth Amendment protection against cruel and unusual punishment, allegations of deliberate indifference require a showing that the actor actually knew of and ignored a detainee’s serious need for medical care.Young v. City of Mount Ranier, 238 F.3d 567, 575-76 (4th Cir. 1999). Mere negligence or, from a medical provider’s perspective, medical malpractice, is insufficient to establish a violation of the Eight Amendment rights of an inmate. Grayson v. Peed, 195 F.3d 692, 695 (4th Cir. 1999). These deliberate indifference claims involve both an objective and subjective component. As to the objective component, a plaintiff must first show that the alleged deprivation is sufficiently serious, and as to the subjective component, a plaintiff must show that the defendants acted with deliberate indifference to the inmate’s safety. Farmer v. Brennan, 511 U.S. 825 (1994).

Monell claims, which refer to the 1978 United States Supreme Court case Monell v. Department of Social Services, are specific to § 1983 claims against a local government entity as an employer, supervisor, and policymaker. 436 U.S. 658 (1978). For a Monell claim to survive, the plaintiff must establish that a public entity had an unconstitutional policy either by an actual written policy or an unofficial custom or practice exercised repeatedly. Monell claims can include allegations that the municipality was deliberately indifferent in a failure to train or supervise the government employee. While most frequently applied in policing or jail operations, Monell claims can also be asserted in employment-related discrimination claims.

Deliberate indifference claims have been applied in student-on-student harassment in other contexts and jurisdictions. In 1999, the United States Supreme Court held that a student can maintain a private cause of action against a school board under Title IX in cases of student-on-student sexual harassment, “but only where the funding recipient acts with deliberate indifference to known acts of harassment in its programs or activities.” Davis Next Friend LaShonda D. v. Monroe Cty. Bd. of Educ., 526 U.S. 629, 633 (1999). Under the Court’s holding in Davis, a plaintiff must allege that the deliberate indifference, at a minimum, caused the plaintiff to undergo harassment or make them vulnerable to it. Importantly, the Court found that a Title IX fund recipient would only be deemed “deliberately indifferent” to acts of student-on-student harassment where the “recipient's response to the harassment or lack thereof is clearly unreasonable in light of the known circumstances.” Notably, the Court found that a mere decline in grades is not enough to survive a motion to dismiss but that the drop-off in grades could provide necessary evidence of a potential link between the harassed student's education and the harasser's misconduct. The harassed student's ability to state a cognizable claim depends equally on the alleged persistence and severity of the harasser's actions and the board's alleged knowledge and deliberate indifference. In a recent case applying Davis, the United States District Court for the Eastern District of North Carolina found that, to be actionable, the “student-on-student harassment must effectively deny the victim access to the school's educational resources and benefits.” Jane Doe, by her next friend, Tonisha Pullen-Smith, Plaintiff, v. Cumberland County Board Of Education, et al., No. 5:20-CV-523-FL, 2021 WL 2546456, at *5 (E.D.N.C. June 21, 2021). The Court stated that “[w]hile deliberate indifference is a high standard that requires more than a showing of mere negligence, a half-hearted investigation or remedial action will [not] suffice to shield a school from liability.” Id.

Expanded Claims

Prior to the ruling in Deminski, North Carolina Courts had never “recognized abuse, even repeated abuse, or an abusive classroom environment as a violation of the constitutional right to education.” Deminski v. State Bd. of Educ., 269 N.C. App. 165, 174, 837 S.E.2d 611, 617 (2020); see also Doe v. Charlotte-Mecklenburg Bd. of Educ., 222 N.C. App. 359, 731 S.E.2d 245 (2012) (holding that the education rights recognized by the state constitution related to the nature, extent, and quality of the educational opportunities made available to students in the public school system). In Doe, The Court previously recognized that a student was entitled to receive “a sound basic education” in public school which included, among other things, the ability to read and write; fundamental knowledge of geography, history and basic economic and political systems; as well as sufficient academic and vocational skills to enable the student to be successful in post-secondary education, vocational training or employment pursuits. Because “all sound basic education” claims prior to Deminski focused solely on educational opportunities made available to students, deliberate indifference claims were not recognized as “colorable constitutional claims” and would therefore be subject to dismissal.

Under Deminski, however, the Court has expanded the definition of colorable constitutional claims to include situations where a student is not provided with a meaningful opportunity to learn due to the deliberate indifference of a state actor. The expansion of the concept of deliberate indifference to claims for violation of Article I, Section 15 and Article IX, Section 2 creates several areas of uncertainty. One notable question left unanswered in the Deminski opinion, which analyzed a claim of deliberate indifference only against a county school board, is how to apply such claims against individual educators or school administrators. In fact, it now appears likely that individuals acting in their official capacity could be subject to § 1983 claims based upon a theory of deliberate indifference. Other questions that the Court did not address are the objective and/or subjective elements of a deliberate indifference claim under these circumstances, nor did it address whether the claims would be treated similarly to those asserted under Title IX. An additional consideration is that it now appears likely that the State Board of Education could be subject to deliberate indifference claims as well, since the Supreme Court in Leandro held that the State has the ultimate responsibility to provide students with access to a sound basic education. This specific issue was not addressed in Deminski because the trial court’s complete grant of the State Board of Education’s motion to dismiss meant the issue was not considered on appeal. Ultimately, the Deminski opinion presents issues of first impression that will likely result in additional appeals throughout the course of the litigation.

MEDICAL MALPRACTICE: 2021 LEGISLATIVE DEVELOPMENTS

Thu, 29 Jul 2021 14:32:41 GMT

By Lisa Frye Garrison, Garrison Law Group, PLLC

On June 18, 2021, Governor Cooper signed into law Session Law 2021-47 (Senate Bill 255), which makes two changes in the procedures for medical malpractice cases in North Carolina. The first involves the handling of final jury instructions. The second involves designating a specific superior court judge to preside over all proceedings in each medical malpractice case.

First, Rule 51 of the NC Rules of Civil Procedure has a new subsection “(d),” which applies to “[f]inal instructions to the jury. – [i]n civil cases subject to G.S. 90-21.11(2) [the statute that defines a “medical malpractice action”].” In such cases, “the court shall reduce the oral instructions given to the jury to writing. Upon the jury retiring for deliberation, the court is encouraged to and may provide the jury a written copy of the oral instructions for the jury to take into the jury room during deliberation.” (Emphasis added) In short, judges in these future medical malpractice trials are not required to give the jury a written copy of their final instructions, but they are “encouraged to” do so, and are always required to reduce their final instructions to writing. Pursuant to subsection “(1.c)” of SL 2021-47, this new Rule 51(d) only applies to “actions filed on or after” October 1, 2021.

Second, North Carolina General Statute § 7A-47.3—which addresses superior court judges’ rotations, assignments, and sessions—has been amended to add a new subsection "(e)." This new section states, “The senior resident superior court judge, in consultation with the parties to the case, shall designate a specific resident judge or a specific judge assigned to hold court in the district to preside over all proceedings in a case subject G.S. 90-21.11(2)..” (Emphasis added.) Pursuant to subsection “(1.c)” of SL 2021-47, this new subsection “(e)” is effective October 1, 2021. It should apply to all pending medical malpractice cases at that time, as well as all cases filed thereafter.

Section (e) does not indicate that the Senior Resident must select one judge who will hear all medical malpractices cases filed in a given district; the phrase “in a case” suggests that a judge is designated for each individual case. That said, the judge designated must “preside over all proceedings in” that case. Presumably, that will include all dispositive motions, discovery motions (including the process of entering a discovery scheduling order), the trial, pre-trial and post-trial motions, and any settlements requiring court approval.

Notably, the Senior Resident has two options, after consulting with the parties: (1) designating a “resident judge” or (2) designating “a specific judge assigned to hold court in the district.” One open question is whether non-resident judges designated in a given case may only hold hearings in their designated cases while they are “assigned to hold court in the district.” It is possible that the phrase “in the district” only applies to the “designation” period—when the judge is selected by the Senior Resident—and not to the entire life of the case. If so, non-resident, designated judges for particular cases might be able to hold hearings in their assigned cases on occasions when they are not actually sitting in the district, as Rule 2.1 appointed judges often do. It will be interesting to see how judges and parties—particularly parties who do not want to travel to a non-resident judge’s district for hearings—interpret the “in the district” language and its implications for these jurisdictional issues.

Having specific judges assigned to handle each future medical malpractice case will represent a significant change for counsel, parties, and the court. For example, having only one judge who can hear motions in each case may slow down the parties’ ability to calendar motions for hearings that require prompt attention, depending on how the “in the district” language discussed above is interpreted. On other hand, this new designation process may lead to efficiencies and continuity within each case, as the judge assigned will become quite familiar with the parties and the issues involved, as well as the specialized rules applicable to this area of law. This new designation process may also provide opportunities for judges with interests and expertise in medical malpractice cases to handle them more frequently, if Senior Residents are inclined to focus the assignments of these cases accordingly.

Legal Implications of COVID-19 on Workers’ Compensation Claims in North Carolina

Thu, 27 May 2021 13:29:04 GMT

By La-Deidre Matthews, Parker Poe Adams & Bernstein, LLP

On March 11, 2020, the World Health Organization (WHO) declared the novel coronavirus (COVID-19) a global pandemic. More than a year later, many Americans are resuming their normal lives as vaccinations become more readily available and prevention guidelines become more relaxed. However, COVID-19 still poses a risk, especially amongst individuals with jobs that require them to be in close contact with someone who is infected with the virus. Is contracting the disease while on the job a compensable action under North Carolina’s workers’ compensation laws? Like with most legal inquiries, it depends. Pursuant to the North Carolina Workers’ Compensation Act, an employee must show that they contracted COVID-19 due to causes and conditions which are characteristic of and peculiar to a particular trade, occupation or employment, rather than an ordinary disease of life to which the public is equally exposed. While no case law currently exists that addresses whether COVID-19 meets the requirements of a compensable disease under the NC Workers’ Compensation Act (the Act), a review of the pertinent statutes may shed light on the inquiry.

In North Carolina, workers compensation claims are divided into two categories: injuries that occurred by an accident or specific traumatic event, and those caused by an occupational disease. N.C.G.S. § 97-53 enumerates a list of compensable occupational diseases covered under the Act. COVID-19 is not one of the identified diseases. Several states have enacted legislation and/or issued executive orders that expand workers’ compensation for certain workers who contract COVID-19; however, North Carolina is not among them. In May 2020, House Bill 1056 proposed an amendment that would provide coverage for first responders and healthcare workers who contract COVID-19, but the proposed legislation ultimately failed.

Diseases such as COVID-19 not specifically included under N.C.G.S. § 97-53 may still be compensable under a “catchall” provision of the Act if it is proven to be contracted due to “causes and conditions which are characteristic of and peculiar to a particular trade, occupation or employment” and is not an “ordinary disease of life to which the general public is equally exposed outside of the employment.” These first two elements of the analysis are satisfied where an employee can show that her employment exposed her to a greater risk of contracting the disease than the public generally. Further, proof of a causal connection between the disease and the employment must exist. The third element may be proven by circumstantial evidence and is satisfied if the employment significantly contributed to, or was a causal factor in, the disease’s development. Relevant considerations include the extent of exposure to the disease during employment, the extent of exposure outside employment, and the absence of the disease prior to the work-related exposure as shown by the employee’s medical history.

In totality, the factors tend to indicate that an employee who contracts COVID-19 simply by being in close proximity to an infected co-worker would probably not be entitled to workers’ compensation benefits absent proof that the nature of her occupation presented unique circumstances, making her more susceptible to contracting the virus while on the job than the general public. COVID-19 has proven to be a contagious and fast-spreading virus, which makes proving these factors even more difficult. To date, there have been almost 33 million reported cases of the disease in the United States. However, there are certain occupations that would arguably have a higher probability of exposure than the general public. The Occupational Safety and Health Administration (“OSHA”) has identified several occupations as high exposure risk occupations, including healthcare employees, such as healthcare delivery and support staff and laboratory personnel; morgue workers; and mortuary workers.

Whether a disease is occupational is a fact specific-analysis and simply being exposed to COVID-19 is not enough to meet the burden of proof under state law. Although the number of confirmed cases in the U.S. is gradually decreasing, the virus continues to upend the lives of many Americans. Employers must remain vigilant and prepare for issues that arise as employees transition back into the workplace. Keeping employees up-to-date on information provided by the WHO, Centers for Disease Control and Prevention, and the North Carolina Department of Health and Human Services as well as encouraging good hygiene practices are a few ways employers can mitigate the impact of COVID-19 in their respective places of work. During the breakout session at the 44^th Annual Meeting and Spring Program, the Employment Practice Group looks forward to providing more guidance and discussion surrounding issues employers will face as they welcome employees back into the workplace.

N.C.G.S. §§ 97-1 et al.

An Act Amending the Workers’ Compensation Law to Provide Occupational Disease Coverage for First Responders and Health Care Workers who Contract Coronavirus, H.B. 1056, 2019-2020 Session (N.C.).

N.C.G.S. § 97-53(13).

Jones v. Steve Jones Auto Grp., 200 N.C. App. 458, 463, 684 S.E.2d 497, 500 (2009) (citing Rutledge v. Tultex Corp., 308 N.C. 85, 93, 301 S.E.2d 359, 365 (1983)).

Id.

Carroll v. Town of Ayden, 160 N.C. App. 637, 642, 586 S.E.2d 822, 826 (2003) (citing Rutledge v. Tultex Corp., 308 N.C. 85, 93, 301 S.E.2d 359, 365 (1983)).

CDC, Trends in Number of COVID-19 Cases and Deaths in the US Reported to CDC, by State/Territory, https://covid.cdc.gov/covid-data-tracker/#trends_dailytrendscases (last accessed May 25, 2021).

OSHA, Guidance on Preparing Workplaces for COVID-19, https://www.osha.gov/sites/default/files/publications/OSHA3990.pdf.

The Undeniable Power of Twelve: Why Civil Defendants Should be Slow to Shrink the Jury

Tue, 25 May 2021 14:36:42 GMT

By Jennifer A. Milak, Esq.

Few rights are as deeply embedded in our body of laws as the right to a trial by jury. This right, which applies to criminal and civil defendants, is enshrined in both the U.S. Constitution and the laws of all 50 states.

In North Carolina, Article I, Section 4 of our State Constitution provides:

No person shall be convicted of any crime but by the unanimous verdict of a jury in open court.

Section 25 confirms this same right applies to civil defendants, furthering:

In all controversies at law respecting property, the ancient mode of trial by jury is one of the best securities of the rights of the people, and shall remain sacred and inviolable.

Per North Carolina General Statute § 7A-196, the parties in all civil cases in North Carolina, have a right to a trial by jury of 12, unless waived by the parties. The number twelve has long been the convention in civil and criminal trials and has become so inextricably woven into the fabric of our legal system that it has remained largely unchallenged. But, COVID-19 has introduced a challenge to our state courts in the ability to safely seat 12 jurors for jury trials. Thus, state court districts are asking parties to waive their right to 12 jurors for health and safety reasons.

Federal courts in North Carolina have a different system that has existed since the United State Supreme Court’s trilogy of 1970s cases - Williams vs. Florida, Apodaca vs. Oregon, and Johnson vs. Louisiana. Those cases ruled that juries of fewer than twelve are constitutional such that federal courts nationwide have routinely adopted rules allowing seating as few as six or eight jurors in civil trials. This important change has caused the behavior and social science communities to extensively study the effects of smaller jurors. The primary question: is there a good reason for defendants to insist upon twelve?

The answer from the behavioral and social science communities is a firm and resounding yes. Ever since SCOTUS ruled that fewer than twelve is perfectly acceptable, experts and social scientists have confirmed that when it comes to the specific number, twelve is neither arbitrary nor a stale tradition that is easily dispensed. In fact, on matters concerning an individual’s personal liberties or financial and reputational future, there are compelling reasons to insist upon more eyes, ears, and brainpower.

Justice is Best Served by the Dozen.

For well over a decade, research has overwhelmingly confirmed that when it comes to making critical decisions about a defendant’s welfare, a larger group is far better than a smaller one. According to a 2004 American Psychological Association Article, entitled “Are Six Heads as Good as Twelve?,” the consensus in the psychological community is that justice is far better served by larger groups. To support this point, the article cites numerous findings from social studies comparing the decision-making power of smaller groups as compared to larger ones. These findings were subsequently confirmed in a 2020 Judicature piece authored by Patrick Higginbotham, Lee Rosenthal, and Steven Gensler entitled “Better by the Dozen: Bringing Back the Twelve-Person Civil Jury.” The article masterfully summarizes the social science findings on the superiority of larger juries and can be distilled as follows.

Reason 1: Larger juries are substantially less likely to extend outlier verdicts.

Citing a 1971 Chicago Law Review article on the diminution of juries in federal cases, Higginbotham, Rosenthal, and Gensler explain that a six-man jury is four times more likely to return an abnormally high or low damages award than its twelve-person counterpart. Per extensive studies of group behavior, in a smaller group, one individual’s extreme opinion is far more likely to sway the entire group’s decision. Conversely, in a larger pool, one outlier’s opinions have far less pull and face exponentially increased resistance.

This begs the question: why does this particular reason matter, and in particular, why does it matter to civil defendants?

Juries are (ideally) the voice of the people. Their decisions serve justice and the greater good when they follow closely to the consensus of the greater communities they represent. As a general principle, communities tend to hold consensus views that fall between two extremes. Larger juries are more likely to rule in accordance with the consensus view, not the extreme one, thus making them more accurate representations of the community’s opinions, beliefs, and values.

As far as civil defendants are concerned, extremism is not in their best interest. After all, it is very rare that juries will return a $0 award for sympathetic plaintiffs. Even a defendant who is found liable may still walk away relatively unscathed if the jurors equivocate on damages. In fact, in many cases, the best-case scenario for a civil defendant involved in a case with challenging facts is a modest damages award. Frequently, juries reach a middle-of-the-road consensus in complex cases: find the defendant liable, but spare the sting of an outrageously high award for the plaintiff.

Reason 2: Larger groups are wired to make better decisions.

Higginbotham, Rosenthal, and Gensler do not mince words in proclaiming larger groups “better” per the social science. “Better,” in this case, means objectively rooted in logic and facts. Studies have consistently proven that larger groups show better collective recall of the evidence and, as a result, less reliance on conclusory statements and emotional appeals. Higginbotham, Rosenthal, and Gensler report:

[T]he larger a workable decision-making group, the better the decisions will be because of the increased resources more group members provide. If six heads are better than one, 12 are in most respects better than six or eight.

Social studies have also shown that larger groups spend more time deliberating. In some cases and for some parties, the increased deliberation works against the client’s interest. But in complex, high-stakes litigation, the increased deliberation time is beneficial: not only is it unlikely to sap the court’s or parties’ financial resources, but as Higginbotham, Rosenthal, and Gensler note: “given that the parties’ fates and fortunes are on the line, evidence that larger juries spend more time deliberating might be seen as a virtue, not a vice.”

Reason 3: Larger juries more likely to hang.

Studies have consistently shown that smaller juries tend to communicate in a more ordered fashion, but larger groups are more likely to vigorously debate the issues. The aforementioned APA article notes that because of this, a dissenter in a larger jury may be more likely to pick up an ally or two and collectively resist the pressure to, as Higginbotham, Rosenthal, and Gensler write, “yield to the will of the larger group.” Logically, this scenario is far less likely in a smaller group.

In other words, more heads mean a greater likelihood that two or more jurors will join forces to resist the will of the masses. Alternatively, jurors will reach a consensus on liability but diverge on damages. They will agree, in other words, that the defendant was responsible for the injury at issue but then will compromise on the value of the claim. So, while the defendant will still lose, he or she will not lose as severely. In still other cases, the two (or more) holdout jurors may succeed in convincing the group to side with them on both liability and damages.

Even a hung jury, however, carries benefits for defense counsel. First of all, as noted, a divergence on damages can save a defendant substantially. More significantly though, even with weaknesses in a case, or the presence of a particularly sympathetic plaintiff or emotionally charged story, the likelihood of one or two jurors joining to resist the collective will can erode the swaying power of bad facts. However, as that group shrinks, so do the defense’s chances of a holdout juror.

Defense Counsel: You’ve Simply Got to Fight for Your Right to Twelve.

The ongoing social science and empirical, behavioral research shows the undeniably negative effects of smaller jury pools. The evidence indicates that smaller juries are not only composed differently, but also are wired to think and decide differently than larger ones.

As such, per Higginbotham, Rosenthal, and Gensler’s call, it is “time to stop doubting these findings” and for counsel to acknowledge that 12 is not arbitrary: it is essential to fairness and equity in both process and outcome for your defendant clients.

The Painful Privilege of Preparing the Privilege Log

Lynette Pitt — Wed, 24 Mar 2021 18:00:00 GMT

By Mark A. Stafford and Candace S. Friel, Nelson Mullins Riley & Scarborough, LLP

We sometimes think that the drafters of N.C. R. Civ. P. Rule 26(b)(5) sought only to test the pain thresholds of lawyers: Privilege logs are the bane of existence for most attorneys—expensive, time consuming and generally a nuisance. In practice, few of us focus on privilege logs early in the process of obtaining and reviewing client documents, but failing to do so can be dangerous.

Without using the term “privilege log,” N.C. Rule 26(b)(5) (as well as the cognate federal rule) requires that claims of attorney-client privilege, work product, and joint defense or peer review privileges must be invoked at the time of service of the discovery responses or “when the party withholds the information.” This is often made express in case management orders that require a party to serve a privilege log “contemporaneously with its objection.” E.g., Window World of Baton Rouge, LLC v. Window World, Inc., 2019 NCBC LEXIS 54, *89 (N.C. Sup. Ct. Aug. 16, 2019). Not doing so can be deemed a waiver of the privilege.

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Chapter 90 and 42 U.S.C. Section 1983: Raising the Bar for Pro Se Plaintiffs

Lynette Pitt — Thu, 18 Mar 2021 20:43:10 GMT

By J. Matthew Little, Esq., Teague Campbell Dennis Gorham, LLP

In recent years, the Defense Bar has seen historic numbers of pro se prisoner filings. Along with this increase is a new litigation trend that involves coupling traditional medical malpractice claims under Chapter 90 of the North Carolina General Statutes with Federal civil rights claims under 42 USC Section 1983. Given the cap on non-economic damages in Chapter 90 and North Carolina’s broad denial of attorneys’ fees recovery for prevailing parties, plaintiffs have weaponized Section 1983. Unlike Chapter 90, this section does not impose a damages cap and, when paired with a claim under 42 USC § 1988, allows for the recovery of attorneys’ fees–thus resulting in potentially much greater damages awards for aggrieved plaintiffs who have been able to retain counsel.

Although litigants have recently relied upon Section 1983 in cases of alleged excessive use of force by law enforcement, defense attorneys are increasingly seeing it used in cases filed against jail medical staff. Specifically, inmates have used Section 1983 as a cudgel against medical providers within the prison system, claiming violations under the Eighth Amendment’s prohibition against cruel and unusual punishment.

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The Argument for Applying North Carolina Rule of Evidence 414 in Federal Court

Lynette Pitt — Thu, 25 Feb 2021 14:30:55 GMT

The Argument for Applying North Carolina Rule of Evidence 414 in Federal Court with help from Sigmon v. State Farm Mut. Auto. Ins. Co.

by Austin Walsh, Hedrick Gardner Kincheloe & Garofalo, LLP

North Carolina Rule of Evidence Rule 414 is the law of the land – at least in North Carolina state court. The Rule has survived a constitutional challenge and, with only a minor setback in Sykes v. Vixamar, remains a powerful trial and discovery tool for the defense bar. But a question often posed is whether Rule 414 applies in federal court or in binding arbitration, such as for underinsured motorist (UIM) claims. The easy answer is “no,” but perhaps the 2019 case of Sigmon v. State Farm Mutual Auto Insurance Company from the United States District Court for the Western District of North Carolina provides a path to “maybe” (or even “probably”).

Rule 414

On June 16, 2011, House Bill 542 passed by a vote of 80-32 and became Session Law 2011-283, which Governor Bev Purdue signed into law eight days later on June 24, 2011. From S.L. 2011-283, evidence Rule 414 took effect on October 1, 2011, and limited 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.”i Rule 414 has faced little scrutiny in the courts with disputes primarily arising from what constitutes relevant evidence of “the amounts actually necessary to satisfy” unpaid medical bills.ii No state court has decided whether Rule 414 is substantive or procedural law and whether Rule 414 applies in federal court remains an open question.

Remember the Erie Doctrine?

The law school throwback Erie Doctrine mandates that a federal court sitting in diversity applies the substantive law of the state in which it sits but federal procedural law.iii The Erie Doctrine “is rooted in part in a realization that it would be unfair for the character of result of a litigation materially to differ because the suit had been brought in a federal court.” iv The Fourth Circuit has held that “although the Federal Rules of Evidence typically govern in diversity cases, ‘there are circumstances in which a question of admissibility of evidence is so intertwined with a state substantive rule that the state rule … will be followed in order to give full effect to the state’s substantive policy.’”v

As an example of procedural rules affecting substance, the U.S. Supreme Court has held that state tolling statutes, despite being squarely set within rules of procedure, are substantive law.vi Federal Rules of Civil Procedure Rule 41 does not have the one-year saving provision that is found within N.C.’s Rule 41. The Western District held in Haislip v. Riggs that N.C.’s legislatively adopted Rule 41(a) was controlling in diversity cases as a matter of N.C. substantive law.vii The Court in Haislip also reiterated the Fourth Circuit’s test for resolving the substantive vs. procedural problem:

1. If the state provision, whether legislatively adopted or judicially declared, is the substantive right or obligation at issue, it is constitutionally controlling.

2. If the state provision is a procedure intimately bound up with the state right or obligation, it is likewise constitutionally controlling.

3. If the state procedural provision is not intimately bound up with the right being enforced by its application would substantially affect the outcome of the litigation, the federal diversity court must still apply it unless there are affirmative countervailing federal considerations. This is not deemed a constitutional requirement but one dictated by comity.viii

Sigmon v. State Farm

Enter Sigmon v. State Farm. The Sigmon case is not about Rule 414. It is a personal injury, breach of contract, and insurance bad faith case brought by a third-party plaintiff against a tortfeasor’s insurer.ix The plaintiff alleged injuries from a motor vehicle accident on 5/20/2016 from which she filed a claim with tortfeasor’s insurer, State Farm.x In a subsequent lawsuit, Plaintiff’s theory against State Farm arose from the insurer at first accepting liability and paying the property claim before denying liability on the bodily injury claim.xi In denying cross motions for summary judgment, Judge Kenneth D. Bell allowed plaintiff’s claims against State Farm to proceed to trial.xii

In preparation for trial, State Farm filed a motion in limine pursuant to N.C. Rule 414 to exclude evidence of medical expenses other than amounts paid or actually necessary to satisfy the bill.xiii Perhaps owing to Plaintiff’s admission that Rule 414 applied, Judge Bell granted State Farm’s motion with regard to past medical expenses and relegated to a footnote discussion on whether Rule 414 is substantive or procedural law.xiv Judge Bell did not mince words and stated that “[t]he application of Rule 414 may affect the outcome of litigation and is substantive North Carolina law.” xv Judge Bell cited two N.C. cases, first Hairston v. Harward for the N.C. Supreme Court’s treatment of the collateral source rule as substantive law and second, a footnote from Nicholson v. Thom, which recognized that Rule 414 abrogated the N.C. collateral source rule with regard to evidence of past medical expense.xvi

Will Sigmon Hold Up?

Although limited to a footnote within an order granting a motion in limine, Judge Bell’s statement that Rule 414 is substantive law is certainly strong enough to include in your next federal pre-trial motions. However, expect to see renewed constitutional challenges to Rule 414, perhaps again under Article IV, § 13(2), which gives the General Assembly the power to make rules for the trial courts, but sets limits to that power: “No rule of procedure or practice shall abridge substantive rights or abrogate or limit the right of trial by jury.” To the extent arguments against the initial constitutional challenges were that Rule 414 was primarily procedural, Judge Bell’s ruling flips the script and may result in the defense bar winning the federal court battle but losing the war.

________________

i N.C. Gen. Stat. § 8C-1, Rule 414 (2019).
ii 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).
iii Erie R.R. v. Tompkins, 304 U.S. 64 (1938).
iv Hanna v. Plumer, 380 U.S. 460, 467 (1965).
v Hottle v. Beech Aircraft Corp., 47 F.3d 106, 110 (4th Cir. 1995) (quoting DiAntonio v. Northampton-Accomack Memorial Hosp., 628 F.2d 287, 291 (4th Cir. 1980)).
vi Jinks v.Richland County, S.C., 538 U.S. 456, 463-65 (2003).
vii Haislip v. Riggs, 534 F.Supp. 95, 98 (1981).
viii Id.
ix. Sigmon v. State Farm Mut. Aut. Mobile Ins. Co., 5:17-CV-225-RJC-DCK, 2018 WL 3910836 *at 1 (W.D.N.C. July 24, 2018).
x Sigmon v. State Farm Mut. Aut. Mobile Co., et al., 5:17-CV-00225-KDB-DCK, 2019 WL 3928641.
xi Id.
xii Id. *at 4. (The Order is an interesting read for the effect of insurers changing liability positions mid-stream.)
xiii Sigmon v. State Farm Mut. Aut. Ins. Co., 5:17-CV-00225-KDB-DCK, 2019 WL 7940194, *at 1 (W.D.N.C. Nov. 14, 2019).
xiv Id. *at 2.
xv Id. *at n 1.
xvi Id. *at n 1.

A Chat with Young Lawyers

Wed, 24 Feb 2021 19:21:02 GMT

How the Pandemic Has Changed the Practice of Law

In January, a few members met via Zoom to share experiences and reflect on the past year. Prior to the meeting we asked folks to consider a few questions. Firstly, what are your successes, words of wisdom, and best advice—given or received. Overwhelmingly, the committee members responded that simply picking up the phone and calling someone has been invaluable. A year ago, right before in person meetings abruptly ceased, it was easiest to walk down the hall or meet someone for coffee when we needed to ensure clarity. But with email now the norm for communicating, clarity can be sometimes difficult to obtain because email lacks tone. All agreed that in order to avoid confusion or misunderstandings, give the person a quick call.

Gone (for now) are the days of cocktail parties and post-work gatherings—the places we used to network and meet new people. But networking is an integral part of being an attorney. How have you managed networking and mentorship in this virtual world? One member noted that prior to the pandemic their firm held periodic lunch meetings to ensure newer staff members and attorneys were getting to know each other. With the pandemic, they’ve transitioned to a virtual platform so newer employees still get the same experience and don’t feel lost or out of the loop.

Another person noted that virtual meet ups actually give you more time to spend with more people--when you’re not having to factor in travel time, it’s a lot easier to squeeze in two or three calls in a day, whereas previously you might have only been able to do a lunch meeting or a morning coffee. All agreed with the importance of reaching out to people and making sure they feel connected.

And it’s not just networking that has changed in the practice of law. As one member noted, you’re constitutionally entitled to a speedy criminal trial—the same does not apply to a civil trial. In some areas, civil cases are being pushed out several months. Many North Carolina counties are allowing virtual hearings; however, a few are still holding in person trials—forcing attorneys to travel to those counties. A perfect example is the member who had just returned from a deposition in New Hanover county that had to be in person. She commented that while it was a long drive—nearly from one end of the state to the other—the time in the car gave her time to think and be out of the house/office that we don’t often get these days.

But that doesn’t change the fact that trials may still be difficult to manage. One county may be open for trials because they have a larger courthouse that is able to ensure social distancing and accommodate jury trials, whereas smaller counties do not have the space at all for a jury trial. And once you get the go ahead to have the jury trial, the next hurdle is finding 10 people who are willing and able to be on a jury panel. These are situations we will continue to face for months to come.

Turning these changes caused by the pandemic into an asset and seeing the silver linings has been on a lot of people’s minds lately. We may be in this for awhile longer, so how to make the best of it? And the conversation really circled back to the one of the original points—picking up the phone and making an effort to personally reach out has been a game changer in the new normal. The irony of the pandemic is that in some ways we’ve become better communicators. And communication will be key when everything does eventually open up because at that point everything that has been pushed to the back burner will suddenly need to be scheduled.

That’s where everyone learning Zoom may come in handy—client meetings that used to be in person can be transitioned to virtual meetings, allowing for multiple meetings in a day, freeing up time for in person cases, and saving your client money as well. Of course, online meetings have their drawbacks—not everyone has access to reliable internet. Someone noted one of his clients struggled to find a good wi-fi signal, making it nearly impossible to take her statement. Additionally, online only meetings remove some of the humanity we were used to with in person meetings. You can’t know what the judge is feeling because you can’t read their body language. Mingling in the hallways of court houses with other attorneys when there are face to face trials is verboten—all but eliminating the chance to form relationships that might be beneficial in the future.

The practice of law may never return to “normal.” But the pandemic has offered the unique opportunity to step back and assess the profession. For good and for bad. As one member said, “It’s difficult to predict the potential assets from this experience as we remain in the midst of it, I’m sure everyone will come out of it with different lessons.”

All About Service, And More

Thu, 29 Oct 2020 15:52:33 GMT

By Bobbie Kullman, Nelson Mullins Riley & Scarborough, LLP

There have been changes to rules regarding service and issues arising out of service due to the global pandemic and outbreak of COVID-19. Namely, USPS’s COVID-19 modifications for certified mail/return receipt and not obtaining recipients’ actual signatures. Postal workers have been writing “COVID-19” in the recipient’s signature block on the return receipt. That clearly is not compliant with Rule 4 service. During this time, it is recommended you use another avenue of service if you need a true signature from your recipient. Prompted by the pandemic, Rule 5 regarding service and filing of pleadings has been revised to allow service of orders, subsequent pleadings, discovery, motions, notices, etc. to be served via email on opposing counsel without their consent to that avenue of service. There are some exceptions and a review of the rule might be in order.

Initial service of lawsuit and basic deadlines.

Once a summons and complaint has been served on your client, you have 30 days to file an answer in state court and 21 days for federal court. Along with getting a copy of the complaint and summons that was served on your client, always ask the client if discovery requests were served as well. This should be indicated on the civil summons, but some attorneys neglect to indicate such on the summons. If discovery is served with the complaint, that will add additional deadlines. Responses to interrogatories and requests for production will have a 45-day deadline while requests for admission will have a 60-day deadline for state court matters.

If the newly received lawsuit is a state court matter, review defendants and allegations in complaint to determine possibility for removal to federal court. Diversity in citizenship (i.e. plaintiff from NC and defendant is a Texas corporation) is one of the most common requirements for removal I run across in my work. Federal question is another requirement that could allow for federal court to maintain jurisdiction over the lawsuit. If the allegations raise any complaints as to civil rights, discrimination, or other violations under federal law, the matter will be removable. Review the applicable U.S. Codes for additional details for removal.

Is service proper?

As stated above, there have been some issues with the USPS and proper service. Additionally, there are certain avenues of service you must try first prior to using other avenues of service. Under Rule 4 governing service, it states “Upon the filing of the complaint, summons shall be issued forthwith, and in any event within five days. The complaint and summons shall be delivered to some proper person for service. In this State, such proper person shall be the sheriff of the county where service is to be made or some other person duly authorized by law to serve summons.” Many attorneys like to utilize a process server right out of the gate. Technically, that’s not proper service in N.C. but many don’t raise a fuss. The use of private processors is very limited and require you first try service through the Sheriff’s Department. Three points of reference regarding this issue are:

(1) Article: https://civil.sog.unc.edu/youve-been-served-private-process-servers-in-north-carolina/

(2) Locklear v. Cummings, 822 S.E.2d 587, 593 (N.C. Ct. App. 2018); N. Carolina State Bar v. Hunter, 217 N.C. App. 216, 224 (2011)

(3) Court of Appeals: Stewart v. Shipley

In order to use a process server for a summons, Rule 4(h) or Rule 4(h1) have to apply and that includes:

(1) Officer not available/refuses/neglects to serve; or
(2) Office returns process unexecuted.

If a person that is not named in the lawsuit accepts service for the lawsuit, ensure that person has the authority to do so. The person accepting must be over 18 y.o. and must live at the address where service is attempted. One recent problem experienced involved a husband and wife getting served at the family address. The husband accepted service for him and his wife; however, the wife no longer lived there and there was a restraining order in place that prevented them to be near each other. In this situation, the wife was not properly served.

One tidbit to remember is that we on defense have no responsibility to share the whereabouts, if known, of the Defendant to plaintiff’s counsel for service (i.e. defendant is in out-of-state drug treatment).

Another item to be noted regarding proper service is determining if a Summons/Alias & Pluries (A&P) Summonses are up-to-date and accurate. To keep a summons alive until properly served you will need to get an A&P issued no later than 90 days from the previous issuance. If your client is served with an A&P Summons, calculate the time between all dates issued to ensure timeliness of all issuances.

Statute of Limitation and Statute of Repose are always to be evaluated initially and correlate to proper service. Briefly, below are the typical years for the different statutes:

§ Statute of Limitation:
(1) Legal Malpractice: 3 years
(2) Libel: 1 year
(3) Medical Malpractice: 3 years
(4) Personal Injury: 3 years
(5) Property Damage: 3 Years
(6) Wrongful Death: 2 years
(7) Product Liability PI: 2 years (w/in date of injury)
§ Statue of Repose:
(1) Real Property: 6 years (after improvement/substantial completion or last specific act or omission of defendant, whichever is later)
(2) Product Liability: 12 years (vehicles are from the first title. If a 2009 vehicle was actually titled in October 2008, you can run into an issue Usually goes by first purchase.

Service of Subpoenas

State subpoenas are easy to serve. You can use about any means available, including Sheriff, process server, certified mail/return receipt, and any person over 18 years of age and not a party to the lawsuit. Federal subpoenas require personal service. If you require the person’s attendance, you will need to include a check for 1-day appearance ($40) and round-trip mileage with the subpoena. One item to note when serving an out-of-state person with a federal subpoena, you need to find a location for their appearance or document production within 100-miles from where the witness resides to stay in compliance of federal rules. Tips: Any time I serve an out-of-state person with a federal subpoena for production of documents, I find a court reporter’s office near their residence to use as the location for production to comply with the 100-mile rule. Court reporting agencies are also a good resource for local process serves.

Expert disclosures?

Typically, all expert deadlines are set out very specific in your scheduling order. However, occasionally the scheduling order may not specifically set out the deadline to serve your expert disclosers. In those instances, Rule 26 sets it at 90-days prior to trial. Remember, expert disclosures are considered part of discovery and are not filed.

Domesticating Subpoenas

In domesticating any subpoena, whether your assisting an out-of-state attorney in domesticating a foreign subpoena in N.C. or having a N.C. subpoena domesticated in another state, you must first determine if the foreign state is part of The Uniform Interstate Deposition and Discover Act (UIDDA). N.C. has adopted the UIDDA and makes the process much easier to conduct discovery across state lines and obtaining depositions of out-of-state witnesses. Most states have adopted the act leaving only a few (~8) that have not adopted the act. For those states, you have to do your research and figure out what that state requires (motions, hearing before a judge, hire local counsel, etc.). If the state has adopted the act, it’s a pretty simple procedure. First, look at that state’s rules on domesticating as they may have additional requirements. Then, call the county in the state where you need the subpoena domesticated and find out their filing fee. Everywhere is different. Explain what you are doing and most courts are pretty helpful in assisting you or confirming procedures.

In domesticating a N.C. subpoena in another state, first prepare a N.C. subpoena with all the information and issued by an attorney. Second, prepare a subpoena for the state you need to domesticate in and perform any additional requirements of that state/county. Third, send it all to the out-of-state county for issuance along with a check for their fee.

In assisting an out-of-state attorney in domesticating a foreign subpoena in N.C., you first need to obtain an issued out-of-state subpoena (some states allow an attorney to issue like N.C. or they may require a court official to issue). Second, prepare a N.C. subpoena with all required information. Third, prepare a List of Counsel and obtain a check for $200.00 for the issuance fee. Once you have all documents prepared, send to the Clerk of Court in the county you need it domesticated in and the Clerk will issue the N.C. subpoena.

As it goes, situations aren’t always black and white and there will be times of uncertainty on what to do or what’s expected. We are paralegals because we are paired with attorneys. Never be afraid to go to your attorney with questions. They would always rather you ask what you might think is a “dumb” question than fix a mistake.

Cybersecurity Tips: Setting You Up For Success

Tue, 13 Oct 2020 17:23:27 GMT

by Patrick Brown

Happy Cybersecurity Awareness Month (well, almost)! As we enter October, consider a goal of taking a little time each week to think about cybersecurity. Maybe even revisit articles from past years such as: 10 Tips for Cybersecurity Month, The Myth of Security by Anonymity, Wait I hired a hacker, and more!

A great place to begin is with a free and easy security measure: Encryption! Not only is it easy, but it is also one of the best steps you can take to keep things secure. Use it anywhere you might have sensitive or confidential data: computers, laptops, tablets, mobile phones, removable media such as USB drives, etc. That way if your device is lost or stolen, it will not be possible for someone to access the contents without your password. Windows 10 has a built-in tool, BitLocker, and Mac OS has FileVault – you just have to turn it on!

Taking this a step further would be to use encrypted email for sending confidential information. If you use a file-sharing service, be sure your data is encrypted both at rest (stored on the system) and in transit (when sending, receiving, uploading, downloading, etc.). Those two solutions are usually not free, but the cost is typically very low for the protection it affords. Different providers you may encounter include: Citrix ShareFile, ZixCorp, Box, SharePoint, GSuite, and many more.

If you want to read for extra credit, take a glance at the NC State Bar’s ethics opinion 2011 FEO 6, the ABA’s formal opinion 477R, and the Texas State Bar’s ethics opinion 648 (with a shout out to the NSA!). These provide some guidance in selecting providers, using encryption, and factors to consider in implementing security measures.

Next, consider your network. Exclusive clubs and venues have “lists” you must be on to get in – why should your office be any less special? But you do not need to go out and hire a bouncer! Simply enable MAC address filtering on your network. In essence, it means that only your office’s official devices can connect to the local area network when you plug into the wall in your office. If an unknown device connects to your data lines, it will not be given an IP address by your system and will not be able to access your network. This prevents someone from plugging an unknown device to your network and either infecting it with a virus or malware or accessing confidential information.

Create similar exclusivity around your Wi-Fi as well. Consider two networks: an office network and a guest network. The office network should only be for your office’s official devices that require Wi-Fi access, the password should not be generally known, and the SSID (the name of the network) can even be hidden if you like so it is not generally able to be seen by the public. The guest Wi-Fi can then have a password that is available to clients, visiting attorneys, guests, and employee’s personal devices. Most importantly, these networks should be separated so someone on the guest network cannot access your office’s files and devices.

Then consider the Principle of Lease Privilege. What is this, you ask? Why, thanks for your interest! This is a concept that instead of giving access to everything and then restricting people from information they should not see, the access given should only be that which is needed to do this job. So, what do your employees need to do their job? Areas to consider include:

File access (physical and electronic). Consider what people are allowed to access – and keep in mind that a source of data breaches is employees accessing information out of curiosity, not a business need. Removing the temptation may be the best option!
Removable Media Drives (CD, DVD, USB, SD card, memory sticks, etc.). Who really needs access to those? Removable media is a very effective way to have your data walk out the door, or to have malware (including ransomware) and viruses walk in. Think of those devices like a toothbrush you found – if you do not know where it has been and what it has touched, do not put it in your mouth (or computer)!
Administrative rights on computers. It is hard to install malicious software if most users do not have the access rights to install programs on their machines. Controlling what is allowed will help you to better ensure the safety of your network and the information stored in your systems.

Great job! You have encrypted your computers and phones, you have set strong passwords/ passphrases, you have restricted access – but then you walk around the office and see computers logged on with no employees in sight. All those protections are for naught if the electronic doors are left wide open. The solution: automatic screen lock settings! That way if someone forgets to log off, the computer will lock itself after a period of inactivity (maybe start with 10 minutes).

I know. This is a lot to take in all at once. But you have the whole month of October to increase your cybersecurity awareness! Do not try to do everything at once – instead, take it one step at a time and you will quickly be on a path to greater security!

Changes to the North Carolina Rules of Civil Procedure Take Effect Oct. 1, 2020

Tue, 06 Oct 2020 16:48:29 GMT

By Kimberly Marston, Brooks Pierce, LLP

If opposing counsel sends you discovery or a pleading by email, it is no longer just a courtesy copy. Beginning Thursday, Oct. 1, 2020, that email effects service under the North Carolina Rules of Civil Procedure.

During the pandemic, the Chief Justice’s interim orders permitted service by email only upon written consent. That interim order expires Sept. 30, 2020. The amendments to Rule 5 of the N.C. Rules of Civil Procedure enacted by House Bill 679 this summer take effect on Thursday, Oct. 1, 2020.

Under amended Rule 5, service by email (or eFiling where available) is permitted in most circumstances.

House Bill 679 amends N.C. Gen. Stat. § 1A-1, Rule 5 in several important ways:

eFiling (where available) and email are permissible forms of service, with some exceptions.
- Parties represented by an attorney may be served by email. Consent is not required. The email must be sent by 5:00 p.m. EST on a business day, otherwise it is considered served on the next business day. [N.C. R. Civ. P. 5(b)(1)(a)].
- An unrepresented party may only be served by email if they have consented to such service, “and a copy of the consent is filed with the court by any party.” [N.C. R. Civ. P. 5(b)(2)(c)].
- Where electronic filing is available, service is achieved by eFiling, unless a party is not registered in the system. [N.C. R. Civ. P. 5(b)].
Other methods of service, including hand-delivery, fax, and mail are still acceptable.
Certificates of Service
- If you’re serving by email (or fax), the certificate of service must include the email address (or fax number) of every person served by that method. [N.C. R. Civ. P. 5(b1)].
- The automated certificate of service generated by an eFiling system satisfies the requirements for a certificate of service as to every person registered for service through the system. [N.C. R. Civ. P. 5(b1)].
The “3-Day Rule” adds three days to the period of time prescribed for taking some action after service by mail. H.B. 679 did not amend Rule 6(e). Therefore, there is no additional time added to a prescribed period after service by email.
H.B. 679 does not alter or amend the North Carolina Business Court Rules. Business Court Rules are amended by orders of the North Carolina Supreme Court. Currently, when the Business Court Rules apply:
- eFiling and email is treated the same as mail for purposes of the 3-Day Rule [BCR 3.9(d)], and
- Documents must be filed with a certificate of service stating the documents have been filed electronically and served under Rule 3.9(a).

This amendment was spurred by the pandemic, but it also paves the way for expansion of the state’s eFiling and case-management system.

The North Carolina Supreme Court also amended the General Rules of Practice for the Superior and District Courts by order effective Oct. 1, 2020. The amendment adds subsection (a), which lists the matters where eFiling is currently available. The Comment to the amended Rule 5 of Practice states, “the North Carolina Judicial Branch will implement a statewide electronic filing and case-management system beginning in 2021. The system will be made available across the state in phases over a five-year period.” The comment also notes that further changes to the General Rules of Practice, Business Court Rules and Supplemental Rules for the eFiling Pilot Project are expected.

If you litigate in state Superior and District courts, the North Carolina Business Court and federal district courts, keep your rule books close.

The chart below is a summary of generally applicable rules as of Oct. 1, 2020. Major differences are shown in red. Always consult the most up-to-date version of applicable civil rules, local rules, and eFiling rules for any differences based on specific circumstances or future changes.

You can subscribe to updates from the Judicial Branch, including Supreme Court rule announcements, at www.nccourts.gov.

	Filed Documents (after Summons and Complaint)	Other Documents (e.g. discovery, certain notices)
N.C. District and Superior Courts (Effective Oct. 1, 2020)	· eFiling (if available) serves any registered users · Email by 5 p.m. (requires filed consent by unrepresented party) · U.S. Mail (+3-Day Rule applies) · Hand-delivery (delivery to office for represented parties only) · Fax by 5 p.m. (represented parties only)	· Email by 5 p.m. (requires filed consent by unrepresented party) · U.S. Mail (+3-Day Rule applies) · Hand-delivery (delivery to office for represented parties only) · Fax by 5 p.m. (represented parties only)
N.C. Business Court (upon designation or assignment to a Business Court judge under Rule 2.1)	· eFiling by 5 p.m. is mandatory (+3-Day Rule applies) [BCR 3.9(c)] · Unrepresented parties must request to forego use of eFiling [BCR 3.2, 3.9(a)]	· Email by 5 p.m. [BCR 3.9(c)] (+3-Day Rule applies) [BCR 3.9(c)] · Email is exclusive method of service unless parties agree otherwise or CMO calls for a different method
Federal District Court (Local Rules may vary)	· CM/ECF by 11:59 p.m. in court’s time zone [FRCP 6(a)(4)(A)] (unregistered users must be served by other methods)	· Mail (+3-Day Rule applies) [FRCP 6(d)] · Email (written consent required) [FRCP 5(b)(2)(E)] · Hand-delivery · Delivery to office or dwelling

If you have questions on these changes, please contact Kim Marston or Will Walker.

Class Actions 101, and Some Tips for China

Wed, 26 Aug 2020 17:05:14 GMT

By Michelle Liguori, Ellis & Winters, LLP

Like most of us, three small business owners from Winston-Salem, North Carolina are unhappy about the effects of the Coronavirus on the health and economic prospects of North Carolina’s citizens.

Taking matters into their own hands, in Patella v. People’s Republic of China, No. 1:20-cv-00433 (M.D.N.C. May 15, 2020), the three Winston-Salemites filed a putative class action against the People’s Republic of China and several other Chinese government parties, seeking redress for all North Carolina citizens who have suffered physical injury or economic harm as a result of the pandemic. Based largely on cable news reports, the local business owners accuse the defendants of creating the Coronavirus in a research lab for infectious diseases, covering up a local outbreak, allowing the outbreak to spread and reach pandemic proportions, and then unlawfully hoarding the personal protective equipment that North Carolina citizens needed to keep themselves safe. The complaint asserts claims of public nuisance, strict liability, negligence, intentional and negligent infliction of emotional distress, and assault and battery.

While the claims, on their merits, may be destined for the chopping block, the North Carolina business owners’ attempts to seek redress for all affected North Carolinians provides a timely backdrop for highlighting some class-action basics.

What’s a Class Action?

In a class action, a group of individuals who have suffered the same injury by the same defendant may sue that defendant together in a single lawsuit. Class actions are typically brought where the injury suffered by each individual plaintiff is relatively small, and not worth pursuing in an individual action due to the expense of individualized litigation. The class-action form allows a large number of individual plaintiffs to pursue their claims at the same time, with the same counsel, in the same proceeding, and, often, with the same evidence. A class action is typically brought by one named plaintiff, or a small group of named plaintiffs, who seek to represent the interests of the entire class.

But not just anyone can bring a class action. Under Rule 23 of the Federal Rules of Civil Procedure, to sue on behalf of a class, the named plaintiffs must first show the following four things (deemed “prerequisites” for a class action):

(1) the class is so numerous that it would be impractical for each class member to sue individually;

(2) there are common questions of law or fact common to the class;

(3) the named plaintiffs’ claims are typical of the claims of all other class members; and

(4) the named plaintiffs will fairly and adequately represent the interests of the class.

Once these four prerequisites are satisfied, the proponents must also show that a class action is appropriate on one of three alternative bases:

(1) separate actions by class members could create inconsistent decisions that would be dispositive of individual class members’ claims, or could create incompatible standards of conduct for the defendant;

(2) injunctive relief is sought regarding the class as a whole; or

(3) questions common to the class predominate over questions that affect only individual class members, such that resolving the dispute as a class action is superior to individual adjudications.

What does this all mean, in a nutshell? To pursue a class action, the named plaintiffs must show that there is a large class of people, who are just like them, were injured by the defendant in the same way as they were, have the same legal claims as them, and will prove those claims in the same way.

Defense Playbook

What can a defendant do to stop the class?

The defendant may be able to cut off the head of the snake with a motion to dismiss, by showing that the named plaintiffs’ claims care not viable on the merits, or that the named plaintiffs lack standing to bring them. The grounds for dismissing claims on the merits depend on the particular claims at issue. As for standing, a common argument—particularly in cases where plaintiffs seek penalties for statutory violations—is that the named plaintiffs suffered no real injury from the defendant’s conduct, and thus the plaintiffs do not meet the Constitution’s requirements for filing a lawsuit in the first place.

If a motion to dismiss fails, the case moves on to class certification, where the name of the game is individualized differences. While the proponents of a class action must show that the named plaintiffs and class members are the same, the opponent of the class action must show that the named plaintiffs and the class members—and the claims they seek to pursue—are meaningfully different, such that pursuit of the claims as a class does not make sense. This includes showing that the class members suffered different injuries, that their claims are based on different facts, and that proving the claims will require different evidence.

Class-action defendants may also be able to show that some or all class members entered arbitration agreements, which require them to arbitrate their claims against the defendant, rather than pursue them in court. Many arbitration agreements also contain class-action waivers, which prohibit claimants from proceeding as members of a class, either in court or in arbitration.

Some Tips for China

Given all this, what are the People’s Republic of China and other defendants to do with the looming class-action complaint?

First, they might consider moving to dismiss for lack of standing. Setting aside possible merits-based challenges to the complaint (such as sovereign immunity and failure to state a claim, to name a few) there is a conspicuous standing problem: The complaint fails to identify any injuries that Mr. Patella and his two fellow Winston-Salemites actually suffered. The complaint does not state, for example, whether any of these men contracted the Coronavirus, whether any of them were forced to close their businesses as a result of stay-at-home orders, or whether any of them suffered any other harm as a result of the virus. (The complaint does not even allege the type of business each man owned.) Instead, the men largely seek to redress injuries suffered by North Carolina citizens generally.

This is not enough. While a class action allows a plaintiff who has himself been injured to sue on behalf of a class of those who have been similarly injured, it does not give any citizen the ability to sue on behalf the public interest. That role is left to prosecutors and attorneys general. Thus, the People’s Republic of China and other defendants might argue that the complaint should be dismissed because its allegations provide no basis for the named plaintiffs to sue on behalf all North Carolina citizens.

If a motion to dismiss fails, the case will proceed to class certification, where the defendants might try to identify individualized differences between the named plaintiffs and other class members in the injuries they suffered, the basis for their claims, and the proof that would be needed for each to prevail. The defendants might explore the following questions, for example:

Did any of the named plaintiffs or class members visit China within the past six months?
Did some class members, but not others contract the Coronavirus?
Can any of the class members trace their infections back to China?
Was personal protective equipment (PPE) available to some class members, but not others?
Was PPE available to some class members, and did they choose not to use it?
Similarly, are all class members business owners?
Have they all suffered economically as a result of the pandemic?
Have some profited?

In short, while the Coronavirus has affected the lives of all North Carolinians, the People’s Republic of China and other defendants may be well served by showing how the virus has touched each of our lives in different ways—and that proving the specific harms each of us has suffered would require individualized evidence.

Finally, the defendants should not overlook the possibility of arbitration. They may want to consider whether the named plaintiffs, or any potential class members, entered arbitration agreements that would cover their claims that the Chinese government entities violated duties owed to them as North Carolina citizens.

* * *

While Mr. Patella and his associates’ attempt to get redress for all North Carolina citizens may not make it past the chopping block, their complaint has, at least, provided an opportunity to highlight some class-action basics for those in North Carolina and beyond.

Madame Chief Justice and May it Please the Court, Wait, I’m on mute! Can you hear me?

Tue, 21 Jul 2020 17:56:17 GMT

By Jon Berkelhammer,
Ellis & Winters, LLP

On June 16, I had the pleasure of being one of the first handful of attorneys to argue before the North Carolina Supreme Court via WebEx. To say it was a little more nerve wracking than usual would be an understatement. In addition to actually trying to master the subject matter, there were a number of items to address before the first word came flowing across my lips, and I thought I would pass them along.

Number one, and probably numbers two and three, get to know Amy Funderburk and Fred Wood. Ms. Funderburk is the Clerk of the Supreme Court, and Mr. Wood handles the Court’s IT, and they are invaluable resources. Ms. Funderburk and Mr. Wood scheduled one session with the parties to check out the equipment. She offered to do as many more as you would like. I accepted her offer and suggest that you do as well. Like a trial lawyer who visits a new courtroom before the first day of trial to learn her surroundings, each time you have a session with Ms. Funderburk and Mr. Wood you should be in the same place you will use for the argument. During these sessions, you should check your lighting and sound. It is not a good day if you cannot be heard. To ensure you can be, do not use a wireless connection. No matter how strong you think your connection is, the day you argue there will be a severe thunderstorm or sunspots and you will start breaking up. There is no “A” for effort at the Supreme Court.

Next, which I guess is number four, decide whether you want to sit or stand. Whichever one you decide to do, do it with Ms. Funderburk and Mr. Wood. Among the gameday decisions if you stand will be what to do when you are not arguing. Do I sit and then have the camera capture my less than six-pack abs as I stumble to my makeshift podium or do I walk in and out of the frame. The Court, I am told, does not care, so we elected to sit for a couple of reasons. One, it avoided the “what to do when I am not arguing” issue. Second, it allowed easier access to the record or other information that I had prepared, such as a reference to a list of facts and record citations for the main issues that came up. By sitting, no one could tell if and when I reached for and relied on those little “cheat sheets.”

If you elect to sit, test the distance you are from the camera and its height so you present yourself as cleanly as possible in the frame. No one wants to look up your nose while you are arguing, and you do not want to be peering down at anyone as you speak. Adjusting the height can be as easy as placing one or more books under your laptop or moving the camera on your monitor. Also, if you sit, sit still. I was able to lock my chair to prevent it from rocking, but I could not find a way to make it so it would not spin, and other chairs were too low. I tried hard to plant my feet firmly and not move below the waist. I do not know how successful I was, but I am sure you can sit still longer than a seven-year-old. Practice it.

And, while we are testing how we look on screen, practice how you will speak to the screen as well. Some people may want to stare directly into the camera as they talk to make the others feel like you are looking at them. Others may want to look at the Justice who asked the question. I felt uncomfortable staring at the little camera on my laptop while trying to speak or answer questions (I practiced that). In addition, by looking at the screen, I felt that I could tell when one of the Justices was wanting to ask a question, though there were no hand signals.

WebEx allows you to “pin” the participants to one location. Although I am not sure whether the Justices would play “musical chairs” and float from spot to spot if no one else is entering or leaving the “room,” I did not want to take that chance. Importantly, I wanted to make sure that I knew where the timer was. The Court will have the timer as a separate participant and therefore on a separate screen. Pin it in place. Although the timer is visible, the lack of proximity decreases the utility of the warning lights. As a result, if you know where the timer is, you can check it easily throughout your argument.

Finally, and to end where this began – do not mute yourself. Being told by one or more justices you are on mute is not the comment you want. If you cannot keep quiet for the time your opponent is arguing, get someone else to argue for you.

I am sure others have additional tips for arguing in this new age. Reach out to them. And, of course, enjoy your thirty minutes of fame.

Five Lessons Learned From a Lifetime in the Courtroom

Wed, 15 Jul 2020 13:47:29 GMT

By Gary Parsons,
Brooks Pierce, LLP
Originally printed in Lawyers Weekly

I have spent my 43-year legal career in the courtroom as a litigator, including participating in more than 75 trials and 125 appeals. During this time, I have seen the science and psychology of trials evolve. In many cases, litigation has become more a war of attrition than a way to find the truth. Even with all of these changes, there are some fundamental lessons that have helped me in and out of the courtroom,

Lesson 1: You don’t need to be a pit bull to be successful.

When a business has been sued, or is considering filing a lawsuit, it is often after a long period of increasing tension and rancor. There may be little good will left between the parties. It’s not uncommon for everyone involved to want to make life difficult for the other side.

A client’s initial reaction in this situation is often is to hire a “pit bull” – a lawyer seen as fierce, uncompromising and highly combative. Resist this urge, unless you like paying for conflict that does not improve your position.

When you do everything you can to make your opponent miserable, at least two things happen – (1) you spend resources fighting about things that could be solved with a phone call or a courteous email, and (2) you can be confident that for every sharp letter, email or contentious motion you fire off, you will likely get the same or worse in return, if only in self-defense.

This kind of drama may be entertaining to some, but it costs money. Courtesy will often get you where you want to go, sooner and cheaper.

When you are faced with the take-no-prisoners opponent, most trial lawyers know how to respond. The most experienced, effective ones know to try the high road first.

Lesson 2: Focus on the long-term.

The litigator’s core role is to resolve disputes – one way or another. Sometimes that means going to trial. Far more often, it means finding a compromise that works for the client.

When a client approaches me about a filing or defending a lawsuit, one of the first questions I ask is “Where do you want to be a year from now?” If the lawsuit will help you get to that goal, we keep going in that direction. If it won’t help the client’s business, or is likely to cost more than it will yield the client in return, I usually try to persuade them to look at other alternatives.

Lesson 3: Listen to the client more than you talk.

One of the biggest mistakes litigators, and attorneys in general, make is talking more than they listen. In initial meetings with clients, it’s important to learn about them, their business, and their goals and objectives. I ask a lot of questions. I need to fully understand the problem so I can help them find the best solution.

If the client is not doing at least 70 percent of the talking during those initial conversations, I am talking too much. As a good lawyer once told me, “If I’m talking, I ain’t learning.”

Lesson 4: In the courtroom, it’s all about the story you tell.

In a lawyer’s early years, they tend to focus heavily on rules – rules of procedure, rules of evidence, and more. The longer a lawyer practices, they more they learn that, in the end, it’s the story you tell, and how you tell it, that carries the day. It needs to be simple, compelling, and presented one piece at a time.

Jurors learn visually and auditorily. So show them your story and tell them, at the same time.

Technology has given us many great tools to present images, both still and video, to help our storytelling. Use them all – show exhibits on a screen, pop out key passages or images from text or photos on-screen, play videos of critical testimony on cross-examination, make poster-size versions of important images, give jurors copies of material you want them to touch and remember. You never know which medium will best resonate with a pivotal juror.

Just don’t get so enthralled with the toys that you forget the story. Jurors have several times remarked to me about how effective it was when I wrote key points on a flip chart during direct and cross-examination. Surprisingly, I’ve received few remarks on the more elaborate tools we used.

Lesson 5: Don’t assume you are smarter than the jury.

One of the worst mistakes I have seen other attorneys make is talking down to jurors. Jurors sense condescension and will hold it against you and your client.

Jurors also possess skills and talents the lawyer does not. No one is highly skilled at everything. You will have jurors who may have limited formal education but be very gifted at visual-spatial reasoning, mathematics, or many other skills that will be relevant to the story they are asked to judge.

Respect those people. Respect those skills. It will make you a better advocate – and a better person.

At the end of the day, being successful as a litigator and as an attorney simply comes down to being courteous, a good listener, a hard worker and a decent human being.

Mandated Closures Have Law Firms Confused and Scrambling

Wed, 25 Mar 2020 17:57:09 GMT

By Dylan Jackson (originally printed in Law.com/American Lawyer. Used with permission.)

For weeks now law firms have been switching to varying degrees of remote work schedules ranging from voluntary regimes to mandatory work from home policies.

What nearly all of these firms share regardless of policy is the skeleton crew, a bare-bones team of staff that handles the things that can’t be done remotely: mail, checks and deliveries for example.

But a few state governments, including New York, California and Pennsylvania, have handed down blanket rules ordering all “non-essential,” or in Pennsylvania non-life-sustaining, business to shutter and leaving firms wondering about how that affects their skeleton staffs.
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Sykes v. Vixamar and Progressive Univ. Ins. Co.: A Discovery Bar or Discovery Strategy?

Wed, 26 Feb 2020 16:45:52 GMT

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.

Rule 414

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.

Changes to North Carolina General Statute 97-94, Revisions to Penalties for Failure to Hold Workers’ Compensation Insurance

Wed, 18 Dec 2019 15:48:29 GMT

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.

Current Law

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.

New Law

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.

Mesh Postpartum Underwear is Not Courtroom Attire

Wed, 20 Nov 2019 15:30:51 GMT

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!

Cites:

https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/states-impose-paid-family-leave-as-congress-weighs-national-policy.aspx

https://www.newsobserver.com/news/politics-government/article233779807.html

https://www.newsobserver.com/news/politics-government/article234920342.html

https://oshr.nc.gov/news/press-releases/2019/08/12%20/paid-parental-leave-benefit-goes-effect-sept-1-eligible-state

https://files.nc.gov/governor/documents/files/PPL_Fact_Sheet_V6.pdf

https://governor.nc.gov/news/governor-cooper-announces-paid-parental-leave-policy

https://oshr.nc.gov/documents/paid-parental-leave-pilot-program-policy

https://www.nccourts.gov/news/tag/press-release/chief-justice-beasley-announces-rule-changes-to-strengthen-families-and-support-children

https://www.ncapb.com/2019/09/06/supreme-court-adopts-generous-secured-leave-policy-to-assist-sleep-deprived-new-parents/

The Final Opinions: Hinson v. Continental Tire

Wed, 23 Oct 2019 14:23:04 GMT

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.

Practice Hints

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.

Machine Guarding 101

Mon, 26 Aug 2019 15:25:02 GMT

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 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 Hazards

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

www.robsonforensic.com/guarding

Beware Of The Not-So-Expert Expert

Thu, 25 Jul 2019 14:43:11 GMT

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:

Jason Ligon
(980)201-3921

Austin Starkey
(423)308-0679

Jon Strickland
(919)334-6171

Potential Legal Liabilities for the Medical Care of Inmates in North Carolina Jails

Tue, 23 Jul 2019 14:34:04 GMT

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).

A Non-Traditional Approach to Conflict Resolution

Tue, 28 May 2019 17:41:36 GMT

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 19^th and 20^th. For details and registration, click here:
http://gateway.ncbar.org/store/seminar/seminar.php?seminar=140365

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.

Department of Labor Proposes New Overtime Salary Threshold AKA: Here We Go Again!

Tue, 28 May 2019 17:33:48 GMT

By Alesha Brown and Michael Cohen
Cranfill 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.

A Safety Expert Can Help Your Case

Thu, 25 Apr 2019 15:03:40 GMT

A safety expert can provide a lot more than just compliance regulation information. A safety professional can help lawyers paint the “big picture” to a jury by providing insights into the safety culture surrounding an incident or the development of a product or machine. Does the surrounding culture suggest a compliant environment / employer, or does it lead one to believe that safety was not a top priority? Reverse of that would see a strong culture where there is proper signage, floor markings, robust machine guarding, and accountable employees. From a manufacturer’s perspective, the warnings, safety devices, and features of the design itself can provide evidence of consideration of safety concerns, with or without a documented risk assessment. Then you can make the case whether a manufacturer was doing its part and acting as a good corporate citizen.

Thanks to Senior Staff Consultant, Rachel A. Eigen, CSP, AEP, MISE at for this great tip!

Katie Couric prevails in her defamation case at the 4th Circuit Court of Appeals

Thu, 31 Jan 2019 16:52:30 GMT

By Nick Ellis
Poyner Spruill

Under the Gun, a gun violence documentary created by Katie Couric and others d/b/a Epix Entertainment, LLC, not only gave viewers a look at gun violence in America, it also spawned a lawsuit providing both the media and interview subjects nuts and bolts information on defamation in the legal system. The United States 4th Circuit Court of Appeals on December 13, 2018 affirmed the dismissal of a defamation claim against Couric and her colleagues at Epix after analyzing interview and film editing tactics to determine whether the subjects of the interview had been defamed.[1]

In 2016, Couric and filmmaker Stephanie Soechtig released a documentary titled Under the Gun. The film addressed gun violence in America and more particularly, issues relating to regulatory steps that could be taken to effect gun control. The film’s perspective favored regulation of gun ownership.

One of the issues the film addressed was the application of universal background checks to gun ownership. In efforts to present both sides of this issue, the filmmakers contacted the Virginia Citizens Defense League (“VCDL”), a non-profit gun-rights organization, and interviewed several of its members. VCDL was founded in 1994 and according to its website, is a “grass roots organization dedicated to advancing the fundamental human right of all Virginians to keep and bear arms as guaranteed by the Second Amendment to the United States Constitution…”[2] VCDL often tracks similar political position as the NRA. Couric interviewed nine members of VCDL including Daniel Hawes, an attorney and Patricia Webb a gun-store owner.

The film includes a portion of Couric’s interview with the VCDL members and the segment lasts approximately three minutes. Couric asks the members several questions regarding gun policies and there are no legally problematic issues created by the main portion of the interview. However, Couric and her team included a 12-second clip at the close of the 3-minute VCDL interview that was edited in such a way as to inaccurately project the members’ responses.

The final question Couric posed was “If there are no background checks for gun purchasers, how do you prevent felons or terrorists from purchasing a gun?” Approximately nine seconds of silence follows the question, which show the VCDL members sitting in silence and shifting uncomfortably in their seats, while averting their eyes from the camera. Couric is then heard stating “The background check is considered the first line of defense, and 90% of Americans agree it’s a good thing.” There is no other reference to the VCDL or its members in the 105-minute film.

The problem with this 12-second clip is that it did not transpire as depicted. In actuality, when Couric asked the question about background checks for gun ownership, the VCDL members responded for approximately six minutes. Hawes, the attorney, suggested the government cannot, through a prior restraint that violates the United States Constitution, try to prevent crime. Webb, the gun-store owner, responded that background checks were unlikely to prevent motivated criminals from obtaining guns or committing crimes.[3] These two responses took up approximately three minutes and then there was an additional three minutes of related discussion between Couric and the panel. But, Couric’s team did not show any of these responses. Instead, they spliced in footage taken prior to the interview in which she asked the interviewees to sit silently while technicians calibrated the recording equipment.[4]

After the film was released, the VCDL released an unedited audio of the interview, which caused public backlash. Couric then issued a statement taking responsibility for the misrepresented exchange. She acknowledged the insertion of the extended pause made the participants appear to be speechless. Her statement further acknowledged the VCDL members had a right to have their answers be shared, so she posted their responses in full on the film’s website.[5] Couric acknowledged the eight seconds did not accurately represent the members’ response and that this was misleading. To a lay person, this may appear to be exactly what defamation looks like. Legally, it has turned out to be another story.

The 4th Circuit Court of Appeals stated a defamation claim under Virginia law (the site of the interview) required a plaintiff to prove the defendant (1) published, (2) an actionable statement, (3) with a requisite intent. The court found Couric and Epix had published the film with the requisite intent, but that it had to grapple with whether this was an “actionable” statement. Under Virginia law, to be actionable, the statement must be “both false and defamatory.”[6] There does not appear to be any question that the “clip of silence” was false, but was it “defamatory”. This turned out to be the court’s focus.

The court stated that defamatory words are those, which tend to harm the reputation of another such that the estimation of him by the community or others is lowered and that they are deterred “from associating or dealing with him.” [7] Virginia law requires a court to initially decide whether a statement is reasonably capable of defamatory meaning before allowing the case to be presented to a jury. Further, Virginia law requires that inferences from the pleadings must be resolved in the plaintiff’s favor when deciding if the communication is reasonably capable defaming the plaintiffs by innuendo. [8]

The VCDL, Hawes and Webb contended the film was defamatory per se (meaning they did not have to show other evidence that the silent clip damaged their reputation). The precise argument Plaintiffs made was the film was defamatory per se because it was reasonably understood to suggest they were unfit as a gun-rights group, an attorney and as a gun-shop owner.[9] To establish defamation per se legally, there must be some connection between the content of the statement and the skills or character required by the plaintiff to carry out his or her particular occupation.

The court first applied this legal principle to Hawes, the attorney. His practice focused on firearms and self-defense and he argued the film suggested he lacked the required competency and ability to represent clients in such cases. However, the court concluded the background check question had nothing to do with Hawes’ legal practice or expertise. The three-judge panel concluded accepting eight-seconds of silence constituted defamation per se would require it to hold that such silence unequivocally suggested “professional ineptitude.”[10] The court was not willing to go that far.

Likewise, the court denied gun-shop owner Webb’s claim because it did not find that the inserted clip suggested she lacked sufficient knowledge regarding integral aspects of purchasing firearms or operating such a business. The judges concluded Webb’s ownership of a gun store did not require her to have “nuanced views on gun policy.” [11] The VCDL was also found not to be defamed because, while the interview was of its members, they were not identified as leaders of the VCDL and therefore, inserting the silent clip could not be construed to question the overall ability of the VCDL to serve its stated purpose. The court does make a contradictory statement by claiming that the silence in response to Couric’s question did not suggest the VCDL or its members did not have responses to the question because the film did show other questions concerning background checks. Then, the court goes on to say that “To be sure, the film gives the impression that Couric’s final question stumped the panelists.”[12] So, its seems that on one hand, the court acknowledges the editing suggested the plaintiffs had no answer to Couric’s question but also tries to say that this was “no harm, no foul” because other responses to similar questions had been presented.

Procedurally, the courts may not have seen the last of this case as it is almost certain the plaintiffs will seek to have the Supreme Court of the United States review this decision.

So, what are the takeaways for the media? What are the takeaways for persons being interviewed by the media? It seems to me, that one of the distinguishing features of this case is that one of the VCDL members interviewed was an attorney and the other a gun-store owner. The attorney represented individuals involved in gun-rights cases and also defendants facing criminal charges who were asserting self-defense to those charges. Webb owned a business that sold firearms and surely has some duty to lawfully sell those firearms. While the court ultimately concluded the edit did not challenge their competency to serve as an attorney or own a gun shop, one would have to admit it is a close call and Couric and her team could have faced a jury who would have decided if inserting the clip in lieu of their actual answers was defamatory. In my opinion, the questionable manner in which the clip was inserted would have likely been a factor a jury would consider in determining if the plaintiffs were defamed. Members of the media, therefore, should know the occupation of their subjects and other relevant information pertaining to how members of the community may identify them. The closer the interview topic is to the person’s profession, the less latitude you likely have in editing the answer to a question.

If you are the subject of an interview, I think it would be wise to insist that any response you give to a question be shown without any editing and, if possible, in its entirety. This means that interview subjects should try to speak in sound bites rather than give protracted responses which the local news or a filmmaker may simply not have ample time to fully present. If you think you are potentially being “set up” by the interviewer, it may even be a good idea to inject in your response to a question about what your occupation is or what specific knowledge you may have about the subject. Leave no doubt that you are qualified to talk about the subject. This would possibly allow you to clearly create a nexus between your profession/occupation and the Q : A in case there are edits made that alter the accuracy of the response.

While fictional filmmakers certainly have artistic license, it may not be too much expect documentary filmmakers or the news media to waive that license and accurately, without intentional alterations being made, present responses from an interview subject. It may be naïve to suggest this, but the public wants information presented in a fair and accurate manner where it can draw its own conclusions about that information.

Deadline for NFPA 652 Implementation Draws Near

Thu, 31 Jan 2019 16:12:31 GMT

Have a client who handles powders, fibers, or dusts? NFPA 652 – Standard on the Fundamentals of Combustible Dust – was approved as a national standard on September 7, 2015, with the requirement that a Dust Hazard Analysis (DHA) be completed at qualifying facilities within 3 years of its adoption. We’re coming up on that deadline. If any sort of dust, powder, or fiber is handled at a facility, it should be tested for combustibility to determine if a requirement for a DHA exists. Keep in mind that just about anything can be combustible if it is small enough! This includes wood dust, textile fibers, sugar, metal dusts, rubber, pharmaceuticals, and more. When in doubt, get it tested, and proceed from there.

Is That a Fire Hazard You're Hiding Under Your Desk?

Mon, 17 Dec 2018 16:22:18 GMT

Written by James C. Smolka, P.E., CFEI, CESCP, ESi

As you read this article, you probably have a power strip under your desk that powers your laptop, your monitor, your cell phone charger, etc. Power strips, which are officially known as relocatable power taps (RPTs), are designed to be used as a multiple outlet extension in the office and in the home. Many RPTs are listed by Underwriter Laboratories Inc. (UL) meeting the requirements of Standard UL 1363. Some RPTs have limited electrical surge protection and electrical noise filtering for sensitive electronic equipment.

When used as designed, RPTs are useful, reliable devices. However, they have been involved in many fires. Often the fires attributed to RPTs are related to the misuse of the RPT. The picture below shows an example of the misuse of an RPT.

Relocatable power taps were designed for use in an area with a high concentration of low-powered loads such as computers, paraphernalia, and audio/ video equipment. RPTs are not intended for use with high load equipment such as refrigerators, coffee pots, copiers, space heaters, microwave ovens, toaster, toaster ovens, hair dryers, and dehumidifiers. Basically, if the electrical device has a large motor or a large heater, then it was not meant to be plugged into an RPT.

According to UL, RPTs are also known as temporary wire taps and are considered temporary extension of an electrical circuit intended for indoor use. The term temporary also refers to how an RPT is physically mounted. The mounting and removal of a RPT is permitted if tools are not used to secure it in place (i.e., a RPT cannot be secured to a work bench, desk, or a wall by bolting or screwing the RPT to a surface.).

RPTs are great for low power devices. However, there are some do’s and don’ts. According to the NFPA 1, Fire Code, and the UL White Book, RPTs:

Shall be directly connected to a permanently installed receptacle.
Are not intended to be series connected (daisy chained) to other relocatable power taps or to extension cords.
Are not intended for use at construction sites and similar locations.
Are not intended to be permanently secured to building structures, tables, work benches or similar structures.
Are not intended to be used as a substitute for fixed wiring.
Shall not have their cords routed through walls, windows, ceilings, floors or similar openings.

The question for legal minds is, is it illegal to misuse an RPT in the work place? In short, yes. There are ways that the misuse of RPTs can be considered illegal.

The first way that the misuse of an RPT causes a legal issue through violation of the OSHA regulations. The installation and use of electrical equipment, OSHA regulation (29 CFR 1910.303(b)(2) states:

“Listed or labeled equipment shall be installed and used in accordance with any instructions included in the listing or labeling.”

Since RPTs are listed devices, the misuse of a RPT in the work place is an OSHA type violation.

The second way that the misuse of an RPT causes a legal issue is NFPA 70, National Electric Code (NEC), Article 110.3(B), which states:

“Listed or labeled equipment shall be installed and used in accordance with any instructions included in the listing or labeling.”

Since most states have adopted the NEC and have made the NEC a legally enforceable standard, not following the NEC results in a non-compliance of a recognized standard.

Note that the OSHA regulations and the NEC use the same language regarding the use and installation of listed devices. The OSHA regulations tell you what you must do, standards, like the ones from the NFPA, tell you how to meet the OSHA regulations.

RPTs are used in almost all office environments. So, take a moment and look around your office. Are your RPTs in good condition? Are your RPTs used as designed? For safety reasons, the proper use of RPTs is not only recommended, it is an OSHA requirement.

Ten Things You Young’uns Should Know Before Stepping Into a Civil Courtroom

Fri, 14 Dec 2018 15:25:24 GMT

By Warren Savage, Lawyers Mutual

As I rock on my porch muttering while watching you kids in my front yard, I remember my dewy days as a green lawyer trying my first few auto accident trials. Being fortunate to start as an associate in the warm embrace of Bailey & Dixon in the ‘90’s, I was given my own small auto accident cases to prepare and try along with tons of go-bys, outlines, checklists, briefs, forms, and trial notebooks that the firm had developed through decades of trial practice. The partners and senior associates freely shared their time and wisdom and assured me that if I put in the hours and followed their advice I would be as well-prepared as possible for my first trials. Over the next two years, I tried six or seven jury trials and learned that all that firm support and resources had only helped me to get to the courthouse door. Once inside, I learned that each civil jury trial is a living breathing organism with a mind of its own having tentacles, rabbits, and red herrings. Here are ten things I experienced during those early days of trial practice that have seared themselves in my brain for better or worse. May these stories and observations provide you with guidance and amusement.

1) Jury selection is what the trial judge says it is.

With loads of questions I had prepared to ask in jury voir dire, I appeared at calendar call one Monday morning in Johnston County with the second case on the calendar that week. The visiting judge told all the attorneys with trials scheduled that he planned to try three or four cases and we should be ready at a moment’s notice to start our cases when the TCA called. Late Monday afternoon, the call came in that my case would start the first thing Tuesday morning. When I arrived the trial judge was in the middle of the charge conference with the attorneys in the trial that had started the previous day. The judge informed us all that, while he finished up with the first trial, the plaintiff’s attorney and I should go in the adjoining courtroom and “work together” to pick a jury for our trial that would start immediately after closing arguments in the first trial while that jury was deliberating. There would be no judge to rule on challenges for cause or objections during our voir dire, so the plaintiff’s attorney and I agreed that if any potential jurors said that they did not want to serve for whatever reason, we would let them go. All other challenges would count towards our allotted eight peremptory challenges. When the panel was passed to me, I asked whether any of the jurors knew the local plaintiff’s attorney or her partner. Six people raised their hands saying they or a family member had been represented by the local firm in past personal injury cases, and all six were willing to serve as jurors. Without the ability to challenge any of them for cause, I was forced to burn six peremptory challenges on my very first question.

2) Video depositions can be mind-numbingly dull at trial.

In my very first trial, the plaintiff was a teenager who claimed to have been injured in a low impact auto accident resulting in excruciating chronic headaches and neck pain. Having obtained the plaintiff’s school nursing records in discovery, they showed that the plaintiff had regularly visited his school nurse’s office once or twice a week for the two years prior to the auto accident complaining of the same headaches he sought compensation for in my case. Armed for bear, I went into the video trial deposition of the plaintiff’s treating physician and meticulously walked him through each of the nurse’s notes. Ultimately the doctor would not back off of his causation opinion, but did admit that it would be very hard to differentiate the plaintiff’s prior headaches from his headaches after the accident. I confirmed that my questions and the doctor’s answers were accurately recorded in the deposition transcript and then watched as the video was played for the jury at trial. As the recording played, I had the horrible realization that most of my questions were halting, monotone, and meandering. The jurors were either asleep or openly hostile to me and the videotape as I just kept asking the same question over and over about the school nurse’s notes. The only thing that rescued me was the plaintiff attorney’s thirty minute re-direct at the end of which the juror’s disgust was audible in groans and snores.

3) You can’t script everything.

While I mostly defended cases as insurance defense counsel, I occasionally had the pleasure of representing a plaintiff in defending a counterclaim asserted by a defendant. In one early trial in Harnett County District Court, I acted as co-counsel with the plaintiff’s personal injury attorney in a case with disputed liability. The accident report prepared by the investigating officer had originally attributed fault to the defendant driver. However, at the insistence of the defendant, the officer revisited the scene two days later and then supplemented his accident report to state that the accident was the plaintiff’s fault. The only witness to the accident was an adult passenger in my client’s car who we had subpoenaed to appear at the trial to testify for the plaintiff. With trial proceeding more briskly than my co-counsel and I had anticipated, we realized that it was 4 pm and our final witness, the subpoenaed passenger, was not in the courtroom. I was terrified that the trial judge was going to force us to close the plaintiff’s case without the passenger’s testimony, and then start the defendant’s case with her first witness, the investigating officer who had faulted our client in the accident report. Instead, my fearless co-counsel took the bull by the horns and called the investigating officer in our case knowing that the officer’s testimony would not be helpful to our client. With deft bobbing and weaving, she questioned the officer through the rest of the day in order to stall until the next morning when we escorted the passenger into the courtroom to get his critical testimony about the accident. My co-counsel’s improvisation on the fly saved the day and won our client the case.

4) Jurors notice the tiny things.

Juries want to do good things for good people. Towards that end, jurors are constantly looking for clues to the character of the parties and the attorneys during trial. In one of my early defense cases where liability was admitted, the plaintiff testified at length about his injuries including a brief description of how hard it was to give his son piggy back rides after the accident. Thinking nothing of that testimony, I struggled to cross examine the plaintiff about the holes and inconsistencies in his medical records in an effort to convey to the jury that the plaintiff was a malingerer. After only five minutes of deliberations, the jury came back with a verdict of “no injury.” I was flabbergasted and questioned several jurors in the parking lot afterwards about how they reached such a conclusive verdict in such a short time. The jurors said that they noticed that the plaintiff’s son was 15 years old. Either the plaintiff was lying about the piggy back rides, or he had injured himself by giving piggy back rides to a 150 pound teenage boy.

5) How you interact with your client in front of the jury matters.

Jurors don’t just notice the tiny things in testimony, they also look for signals in your body language. If you appear not to like your client, the jury is likely to do the same. Jury voir dire is the first time that most jurors will see you and your client together, and the jury will notice if you never confer with your client or treat him as part of the trial team. During breaks in trial at the courthouse, jurors will notice if you ignore your client or leave them to fend for themselves while disappearing back to your office or a conference room. In lunch restaurants near the courthouse, jurors might draw negative inferences if they notice you eating at a table by yourself while your client eats separately. Show genuine interest in your client as a person and value his input during trial, and hopefully jurors will follow your example.

6) Jurors will get bored and uncomfortable during a long trial.

If you are in a long trial, jurors will hold it against the lawyers if they think their time is being wasted by legal machinations they don’t understand. Objections, sidebars, and motions heard outside the presence of the jury will inevitably accumulate over the course of the long trial giving the appearance to jurors that they are being taken for granted or otherwise ignored. Judges often recognize and sympathize with the jury’s peevishness and will become short and even hostile to one or both of the attorneys in front of the jury. Similarly, long periods without water or bathroom breaks will drive a juror to distraction and resentment. If you need to pee, it is very likely that one or more of the jurors needs to also. Be a hero, and ask the judge for a break that everyone could use.

7) Dress conservatively and nicely at trial.

Save you sartorial expression for other occasions. Your goal is to be just another suit until you earn the gravitas to be different. Bored jurors who don’t know you from Adam, will scrutinize your clothes seeking any insight into what you are like as a person. Rumpled suits or loafers with no socks send a message that you may be ill-prepared or loosey-goosey with the facts. You may wear bow ties and seersucker suits to bar functions, but as a new lawyer I would not wear a bow tie to court for a year or two or three. Some (but not all) experienced trial lawyers can carry it off, but probably not you – at least for a while.

8) Instruct your client, your trial team, and everyone in your “audience” how to act during trial.

In several of my early trials, I was helped immeasurably by the inappropriate or negative reactions of people on the other “side” when something they did not like went the wrong way in the courtroom. During one trial, the plaintiff demonstrably shook her head every time I or one of the witnesses said something she did not like. In another trial, rude gestures made by audience members there to support the plaintiff resulted in an exasperated admonition from the bench to the plaintiff’s attorney to control “his clients.” Juror interviews following both of those trials revealed that the jurors had noticed the bad behavior and had taken offense to the disrespect it showed to my client and the court. While none of the interviewed jurors admitted that it influenced the verdict, they all conceded that it was discussed among the jurors during breaks in the trial and at deliberations.

9) Get to know and appreciate the courthouse personnel.

The TCA, clerk of court, assistant clerks, bailiffs, court reporter and other courthouse personnel are invaluable resources for you as you learn to navigate the specialized world of courthouse/courtroom practice. No one knows more about the inner workings of the courthouse and the predilections of your judges and jury pool (and often the opposing attorney) than the clerks and bailiffs. Don’t be afraid to ask. Don’t be so impressed with your new status as a lawyer that you refuse to access the years of experience that courthouse personnel have to offer you.

10) Just because you won a case doesn’t mean you are a good trial attorney (and just because you lost doesn’t mean you stink).

Whenever I hear a lawyer crow about winning all his or her cases, my first thought is always, “You must not try any hard cases.” You will win and lose case for all kinds of reasons out of your control. For example, when interviewing jurors after one of my “wins,” I found out that none of them remembered much about my closing arguments or trial skills. Instead, jurors believed the plaintiff was a liar after seeing her wear stiletto heels to court for three days while complaining about her lower back pain, a fact that I had not even noticed. Similarly, some of the best lawyers I know have taken tough cases to trial and gotten hammered by a jury. They weren’t worse lawyers after the verdict. In fact in elite circles of trial attorneys, such battle scars mean as much or more than the victories. Trial skills, preparation, and charisma are important in the courtroom, but do not guarantee wins for your client.

#MeToo and the Business Case for Diversity

Thu, 29 Nov 2018 15:56:07 GMT

By Melissa Walker, Asst. Attorney General, NC Department of Justice

I carefully plan my work day in hopes of not having to be alone in the office after hours or when most people aren’t working. I call my spouse/parent/roommate before I leave my building and walk to the parking deck so someone knows where I am and what I am doing. I walk to the car with my keys out and ready so I don’t have to spend time looking for them and not paying attention to my surroundings. Usually, I have the metal piece of the key between my first two fingers so I can use it as a weapon if I were attacked. Before I get in my car, I look in the back seat to make sure no one is in my car.

I don’t schedule repair people to come to the house when I am home alone. I don’t answer the door when I am home alone. I don’t tell callers I am home alone.

I don’t wear headphones when I go running. I tell my spouse/parent/roommate my intended path before I leave the house. If I deviate at all, I let someone know where I am.

These things may sound like standard safety tips or maybe the practices of a hyper-paranoid individual. In fact, I would venture to say, they are more likely the standard practices of half our population – practices that are done routinely without much further thought. I would also bet these are practices that would never even cross the minds of the other half of our population. Go ahead. Ask your spouse or significant other. What precautions do they take, or are these types of safety precautions not even on their radar?

#MeToo is a viral hashtag that began in October 2017, following the Harvey Weinstein sexual abuse allegations. The #MeToo Movement was popularized by several high profile American celebrities and intended to highlight the prevalence of sexual assault and sexual harassment, especially in the workplace. Although the hashtag went viral in 2017, the roots of the Movement go back as early as 2006, when Tarana Burke began using the phrase to raise awareness of the pervasiveness of sexual abuse and assault in society. Recently, the impact of the Movement was returned to the media spotlight with the sexual assault claims and courageous testimony of Dr. Christine Blasey Ford during the confirmation hearings of then Supreme Court nominee Brett Kavanaugh.

So, beyond becoming a more educated, well-rounded individual, why is this relevant to you, your practice of law, and the North Carolina Association of Defense Attorneys (NCADA)? The short answer: diversity and the business case for diversity. The Diversity Committee of NCADA strives to highlight topics that are relevant to your practice, but also topics that contribute to the enrichment of our profession as a whole. Last year, the Diversity Committee presented topics focusing on race relations. This year, we are highlighting topics addressing gender differentials. The Committee selected both of these topics in furtherance of the business case for diversity.

A recent online survey suggests that 81% of women and 43% of men have experienced some form of sexual harassment in their lifetime. A 2017 Survey Report found at the Center for Disease Control (CDC) represents that one in three women and one in six men have experienced some form of contact sexual violence in their lifetime. A 2010 Summary Report found at the CDC represents that one in five women and one in 71 men will be raped at some point in their lives, while a 2001 Violence in the Workplace study shows that eight percent of rapes occur while the victim is at work.

Think of ten women in your workplace. Statistically speaking, eight of those ten women have experienced some form of sexual harassment and two of those women have been raped. The statistics are staggering; but again, why is this relevant here?

Research shows that the disparate impact of sexual assault and sexual harassment on women in the profession forces women out of jobs and affects their career attainment. Not only does the employer lose out on a qualified, diverse employee and their investment in that employee’s training and skills, but employers also face an increased turnover rate and a potentially hostile work environment from harassment claims that can lead to absenteeism, decreased morale, animosity, stress, and low productivity among staff.

Expensive lawsuits can result when companies fail to adequately prevent sexual harassment or when a company fails to properly handle a sexual harassment claim. In the past several years, jury awards in sexual harassment claims have been significant. In one claim, filed by the EEOC involving a rape and sexual harassment allegation against three male supervisors, the jury awarded the plaintiffs $17.4 million dollars. In another case against a global CEO from New York, a jury awarded a former employee $18 million dollars for retaliation, after the CEO’s unwanted sexual advances were refused.

Ultimately, the impact of sexual harassment and sexual assault affect a business’s bottom line, as illustrated by the business case for diversity. Today’s clients demand a diverse workforce; yet, many employers struggle with the recruitment and retention of qualified, diverse applicants. The impact of sexual assault and harassment on a diverse workforce remains one of many factors in this continual struggle.

As the Diversity Committee continues to develop and explore this topic at upcoming CLEs, events, and publications in 2019, we hope you will engage with us as we endeavor to create a more diverse and enriched profession.

Specific questions on these topics? Ideas for future topics? Please let us know! MelissaKWalker6@gmail.com

Artificial Intelligence, Autonomous Vehicles, and the Trucking Industry

Mon, 15 Oct 2018 16:52:30 GMT

Opening the Pod Bay Doors to Assessment of Risk and the Future of Commercial Automobile Coverage

By William A. Bulfer and Brian M. Love

Among other things, autonomous programs that can “learn” through shared data retention and cooperative analysis are likely to eliminate risk on certain fronts, while creating new risks on others.

Early in 2018, the senior vice president and chief economist of the American Trucking Association issued what he referred to as his “warning shot to the industry.” John Kingston, ATA’s Costello Projects Out the Driver Shortage, and It’s a Big Number, Freight Waves (Apr. 3, 2018), https://www.freightwaves.com. The supply of truckload drivers in the United States over the next eight years is projected to be woefully inadequate. Unless something changes, there could be a shortfall of 175,000 drivers by 2026.

For an industry realizing more than $700 billion in annual revenue, the need for increased capacity is ripe for substantial investment. Technology that can produce greater efficiency and reduce risk has been in place for years and continues to be developed. While we are not yet living in a world where Hal 9000 from 2001: A Space Odyssey is driving tractor trailers, smaller scale artificial intelligence in the form of GPS, electronic logs, and crash-data retrieval is already widespread and soon to be mandatory. Fully autonomous vehicles have progressed to the development phase, with driverless pilot programs already in operation. As this trend continues, issues relating to insurability and allocation of risk are sure to follow.

The present and future use of artificial intelligence in the trucking industry raises many questions. From the standard ISO commercial auto coverage forms and the associated MCS-90 endorsement, to commercial general liability and cyber liability forms, the expansion of artificial intelligence into an industry as diverse and widespread as trucking is a critical issue for both commercial auto carriers and the broader insurance market alike. This is particularly true given the possibility of risk transfer, allocation, and apportionment, as well as the Federal Motor Carrier Safety Administration’s heavy oversight of the industry. Whether it should continue with the current regulatory and insurance standards, merge into other sectors of insurance, or begin an entirely new insurance and regulatory scheme is one of the most pressing issues in the trucking industry.

Historical Context

While the advancements discussed here are relatively new, the concept of technological advances working their way into the transportation sector is not. As stated by U.S. Secretary of Transportation Anthony R. Foxx in the U.S. Department of Transportation’s 2016 Federal Automated Vehicles policy, “Technology in transportation is not new. In fact, the airplane, the automobile, the train and the horse-drawn carriage all introduced new opportunities and new complications to the safe movement of people and goods.” U.S. Dept. of Transportation, DOT HS 812 329, Federal Automated Vehicles Policy (2016). Automation in vehicle movement is simply the next logical step in the evolution of vehicular technology.

Though this article focuses on the commercial trucking sector, no discussion of artificial intelligence in a vehicular context can be had without some discussion of passenger automobiles. Historically, advances in vehicular safety have largely started in the consumer auto sector and have worked their way into the trucking sector. From early advances in seat belt technology to the modern crash avoidance systems, advancements within the consumer sector that add value to trucking are routinely implemented and further developed. In doing so, these advances generally facilitate safety and efficiency.

Safety

Of the 37,461 lives that were lost on U.S. roadways in 2016, nearly 10 percent involved large trucks. Nat’l Highway Traffic Safety Admin., Traffic Safety Facts 2016 Data (May 2018). Safety concerns are not, however, limited to the public’s encounters with large trucks on the road. More truck drivers (852) were killed while working than any other single occupation in 2016. Mark Baumgartner, Most Deadly Occupation: Truck Driver, ABC News, https://abcnews.go.com.

The introduction of artificial intelligence is projected to reduce and eventually remove the opportunity for driver error, which will increase safety for drivers and the motoring public alike. According to a study by the Insurance Institute for Highway Safety, Google’s driverless vehicles, which have covered more than two million miles, have been involved in less than 20 collisions, none of which were caused by autonomous vehicle system failure. Ins. Inst. for Highway Safety, Special Issue: Autonomous Vehicles, Status Report, Vol. 53, No. 2 (2016).

In October 2015, the University of Michigan released a study that found that self-driving vehicles were not at fault for any of the crashes in which they were involved. Brandon Schoettle & Michael Sivak, A Preliminary Analysis of Real-World Crashes Involving Self-Driving Vehicles (Univ. of Mich. Transp. Res. Inst., Report No. UMTRI-2015-34, Oct. 2015). In a July 2018 white paper, Travelers noted a series of 2017 reports from KPMG that estimated “a 90-percent reduction in accident frequency by the year 2050.” Travelers Inst., Insuring Autonomy: How Auto Insurance Can Adapt to Changing Risks (White Paper, July 2018), https://www.travelers.com/travelers-institute. Stated simply, the introduction of artificial intelligence and autonomous vehicles will make trucking safer.

Efficiency

Autonomous vehicle technologies can increase efficiency and flexibility with industry supply chains and logistics operations. A combination of autonomous vehicles and other smart technologies can reduce labor costs and increase equipment and facility productivity. Moreover, once it is automated fully, a lean supply chain may help reduce overall load sizes and stock by leveraging smart distribution technologies and smaller autonomous vehicles.

Through the “internet of things” communication between logistics units and operating units with automated decision making and coordination is increasingly possible. As data is collected, it can be stored, and more importantly, evaluated and shared, to increase efficiency throughout the trucking marketplace. As the trucking industry moves toward more complete automation, the demand for drivers will correspondingly decrease to some extent, reducing the present driver shortage severity. If human truck drivers are ultimately displaced by artificial intelligence, efficiency will increase even more by reducing the downtime currently required by human operators.

Levels of Autonomy

The Society of Automotive Engineers (SAE) has published an accepted standard identifying five levels of motor vehicle automation. Taxonomy and Definitions for Terms Related to On-Road Motor Vehicle Automated Driving Systems, SAE J3016 (2016). Each level is based the extent of driver involvement in relation to the automated system:

SAE Level 0: the human driver does everything.

SAE Level 1: an automated system on the vehicle can sometimes assist the human driver conduct some parts of the driving task.

SAE Level 2: an automated system on the vehicle can actually conduct some parts of the driving task, while the human continues to monitor the driving environment and performs the rest of the driving task.

SAE Level 3: an automated system can both actually conduct some parts of the driving task and monitor the driving environment in some instances, but the human driver must be ready to take back control when the automated system requests.

SAE Level 4: an automated system can conduct the driving task and monitor the driving environment, and the human need not take back control, but the automated system can operate only in certain environments and under certain conditions.

SAE Level 5: the automated system can perform all driving tasks, under all conditions that a human driver could perform them.

The National Highway Traffic Safety Administration (NHTSA) Federal Automated Vehicles Policy incorporates the five-level classification in SAE J3016 and projects that level five automation will be achieved by 2025, noting,

Fully autonomous cars and trucks that drive us instead of us driving them will become a reality. These self-driving vehicles ultimately will integrate onto U.S. roadways by progressing through six levels of driver assistance technology advancements in the coming years. This includes everything from no automation (where a fully engaged driver is required at all times), to full autonomy (where an automated vehicle operates independently, without a human driver).

As integration continues, the risk of driver error will necessarily decrease and the application of traditional insurance models will result in new challenges.

Existing and Emerging Technologies

With the trucking industry bringing in hundreds of billions of dollars each year, the use of artificial technology is limited more by capacity than demand. As a result, research and development have increased. Motor carriers and vendors for the trucking industry similarly are continually looking to create and implement artificial intelligence to increase efficiency, safety, and ultimately, profitability.

When considering artificial intelligence it is tempting to think of Hal subsuming the role of humans. The reality, however, is that artificial intelligence has been part of daily life in the trucking industry for some time. Current technologies include radar sensors, onboard cameras, laser distance measuring (LiDAR), GPS systems, and the interactive technology that integrates these systems into a single truck. Crash-data retrieval systems and associated technology make driving a truck and reacting to acute risk safer. When a collision does occur, the data can be analyzed and learned from, improving safety and accurate risk apportionment.

Artificial intelligence also helps with logistics, through electronic logging (ELD) and the use of systems that track everything from breaking, to traffic patterns and sleeping habits of drivers. Indeed, the use of ELDs has been so universally accepted as positively affecting safety and efficiency that Congress has mandated their implementation as part of its Moving Ahead for Progress in the 21st Century Act. Other technologies such as blind-spot monitoring, automatic emergency braking (crash-eminent braking), forward collision warning systems, following distance-monitoring systems, pedestrian automatic-emergency braking systems, and lane-keeping support are similarly being placed in power units with increased frequency.

Current Regulatory Climate

Overlaying the insurance challenges as the trucking industry becomes more autonomous is the question of how regulatory and legislative changes will affect future risk handling. The Federal Motor Carrier Safety Administration (FMCSA) requirement for insurance and application of the MCS-90 endorsement are bound to affect future claims in the autonomous sector. At the same time, federal and state efforts to understand and to legislate in the autonomous-use arena are already taking place.

U.S. Department of Transportation – National Highway Traffic Safety Administration

In September of 2017, the U.S. Department of Transportation’s NHTSA updated its “Federal Automated Vehicles Policy.” The policy sets forth guidelines and policies for vehicle performance, current and future federal regulatory tools, and model state policies.

The NHTSA envisions that autonomous vehicle technology will be regulated at the federal level, while the states would be responsible for licensing drivers, registering autonomous vehicles, enacting and enforcing traffic laws, conducting safety inspections on autonomous vehicles, and regulating autonomous vehicle insurance and the allocation of liability.

The NHTSA has promulgated model state policies governing highly automated vehicles (HAVs). In creating the model state policies, the NHTSA’s goal is to avoid a “patchwork of inconsistent laws and regulations” among the states. To this end, the NHTSA makes certain recommendations for state-level regulations on HAVs, such as who must carry motor vehicle insurance and who is the “driver” of an HAV for purposes of determining accident fault. For example, the NHTSA recommends that states consider a human to be the “driver” of a vehicle when the “human is primarily responsible for monitoring the driving environment (generally SAE Levels 1-2)” for purposes of traffic laws. Such a bright-line rule becomes more difficult to apply as the extent of autonomy increases beyond SAE Levels 1–2 toward a fully autonomous vehicle.

As a consequence, the NHTSA has recognized that a comprehensive regulatory framework is not practical at present and could have unintended consequences. State laws and regulations allocating tort liability could eventually have a significant effect on consumer demand and acceptance of HAVs, the rate at which HAVs are deployed, and the cost of insuring operation of HAVs. The NHTSA thusly foresees that in the future, the states “may identify additional liability issues and seek to develop consistent solutions” and that it “may be desirable to create a commission to study liability insurance issues and make recommendations to the States.”

Federal Motor Carrier Safety Administration

On April 24, 2017, the FMCSA held a public listening session to solicit information relating to the design, development, testing, and integration of automated driving system-equipped commercial motor vehicles. Highly Automated Commercial Vehicles Public Session, 82 Fed. Reg. 18,096 (Apr. 17, 2017). September 2017 policy expressed the belief that FMCSA regulations would require that “a trained commercial driver must be behind the wheel at all times, regardless of any automated driving technologies available on the commercial motor vehicle, unless a petition for a waiver or exemption has been granted.” Request for Comments on Federal Motor Carrier Safety Regulations on the Safe Testing and Deployment of Automated Driving Systems-Equipped Commercial Motor Vehicles, 83 Fed. Reg. 12,933, 12,935 (Mar. 26, 2018).

The FMCSA has encouraged states to “work together to standardize and maintain road infrastructure including signs, traffic signals and lights, and pavement markings” so as to better enable the application of artificial intelligence across state lines.” . Volpe Nat’l Transp. Sys. Ctr., Review of the Federal Motor Carrier Safety Regulations for Automated Commercial Vehicles: Preliminary Assessment of Interpretation and Enforcement Challenges, Questions, and Gaps, No. FMCSA-RRT-17-013, (Mar. 2018). A few states, including California, already have laws in place allowing for the testing of autonomous vehicles on public roads. Cal. Code Regs. Title 13, § 227.00, et seq. (2018).

Application of the Traditional Insurance Model

In the trucking context, the traditional insurance model is based on negligence, or more plainly stated, driver error. Semi-autonomous operation has already been shown to reduce the margins of error, and as discussed above, greater implementation of artificial intelligence has the potential to remove virtually all operator error.

As this trend continues, insurance practices and markets will face new challenges and a new paradigm for insurance and risk transfer. These challenges are complicated further in the trucking sector with the application of the MCS-90 Endorsement for Motor Carrier Policies of Insurance for Public Liability under Sections 29 and 30 of the Motor Carrier Act of 1980.

The Present Paradigm—Commercial Auto Policy and the MCS-90

In most cases, the party at fault for an auto accident is the driver. In a world of autonomous vehicles, however, it is foreseeable that liability will shift to the manufacturers of autonomous vehicles, suppliers of their components, and data service providers. At what point will liability shift away from the driver?

The insuring agreement under the standard ISO commercial auto form provides coverage for “all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies, caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto’.” This raises the question of whether an accident involving an autonomous vehicle would be covered. The answer to this question depends on whether the autonomous vehicle is an “auto,” and whether the accident resulted from the insured’s “maintenance or use” of the autonomous vehicle.

The ISO commercial auto forms generally define “auto” as “ [a] land motor vehicle, ‘trailer’ or semitrailer designed for travel on public roads” or “[a]ny other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged.” The definition of “auto” excludes “mobile equipment.” The definition of “mobile equipment” excludes “[l]and vehicles subject to a compulsory or financial responsibility law or other motor vehicle insurance law.” Noticeably absent from the ISO commercial auto form is the mandate that an auto be operated by a human. Without some clarification on this point, questions regarding the applicability of the terms “auto,” “maintenance,” and “use” will likely become a source of coverage litigation for years to come.

In litigated cases involving property damage and personal injury, the present system that facilitates (relatively) prompt resolution of claims and compensation to victims is likely to become slower due to the introduction of these coverage questions. Still, without moving to a no-fault system, it is difficult to see how these increasingly complicated issues with regard to fault and insurability can be quickly streamlined. As a result, legislative action or movement within the current insurance framework presently represent the two most likely solutions.

Under the majority view, the terms of the MCS–90 endorsement supersede the terms of an underlying insurance policy so as to determine the relationship between an injured member of the public and the MCS–90 insurer. Carolina Cas. Ins. Co. v. Yeates, 584 F.3d 868, 878–79 (10th Cir. 2009). While the majority of cases conclude that the MCS–90 endorsement only operates to protect the public and does not alter the relationship between the insured and the insurer, the practical effect on trucking insurers, even as artificial intelligence becomes more prevalent, is likely to be an immediate obligation to indemnify when public liability risk is involved.

The MCS-90 endorsement applies to and provides coverage for public liability risk as follows:

In consideration of the premium stated in the policy to which this endorsement is attached, the insurer (the company) agrees to pay, within the limits of liability described herein, any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles subject to the financial responsibility requirements of Sections 29 and 30 of the Motor Carrier Act of 1980 regardless of whether or not each motor vehicle is specifically described in the policy and whether or not such negligence occurs on any route or in any territory authorized to be served by the insured or elsewhere.

The MCS-90 endorsement also states,

It is understood and agreed that no condition, provision, stipulation, or limitation contained in the policy, this endorsement, or any other endorsement thereon, or violation thereof, shall relieve the company from liability or from the payment of any final judgment, within the limits of liability herein described, irrespective of the financial condition, insolvency or bankruptcy of the insured.

The broad scope of coverage, “resulting from negligence in the operation, maintenance or use of motor vehicles,” absent legislative reform, may thus implicate commercial auto coverage, even if liability is not directly attributable to the driver or motor carrier.

Collectively, new technologies have had positive effects on logistics, truck function, and driver function with corresponding safety, efficiency, and environmental benefits. Developing technologies are expected to bring increasing vehicle autonomy and continued, positive results. Refinement of current technology and development of new technologies continues and compounds. The ability of autonomous programing to “learn” through shared data retention and cooperative analysis is likely to eliminate risk on certain fronts, while creating new risks on others.

While the frequency and severity of collisions are likely to be reduced, for example, the cost of a claim that does arise may well increase. Property damage to artificial intelligence systems is likely to be more expensive. Arguments regarding causation and risk transfer may increase the cost of litigation. Previously inapplicable areas of risk that may be more unfamiliar to the industry will need to be considered.

Product Liability Paradigm

As the spectrum of autonomous involvement gravitates toward level five on the SAE scale, the traditional model of risk will become more difficult to apply. On one hand, the number of expected incidents, and thus, the comparable cost and need for auto liability insurance will be reduced. On the other hand, when loss does occur, it is more likely to be caused by the failure of an autonomous system rather than operator error. To be certain, there is generally a “human” component to motor vehicle negligence. Even in a fully autonomous situation, it remains to be seen whether the human driver will have a duty to pay attention and intervene to avoid an accident. The level and timing of human involvement could eventually fall outside of the traditional operator framework. In such circumstances, the product liability paradigm may offer an alternative.

As artificial intelligence is incorporated, the manufacturers and suppliers of its systems and components will become increasingly be intertwined with their maintenance and use. This integration will occur over time, so operator involvement both in and outside of the cab will remain a reality for the foreseeable future. It is also likely that insurance for the manufacturers of these systems will remain under commercial general liability, where it currently exists.

In the future, however, new tangential risks are likely to emerge. These risks include the addition of motor carriers and their drivers as additional insureds and the need to protect against new cyber risk as data is collected and shared. While the current insurance framework is likely to be capable of addressing this risk, planning for it requires an in-depth understanding of the technologies being implemented.

Critics of a shift to the product liability paradigm have suggested that “alternative risk transfer mechanisms like product liability are not structured to be primary, comprehensive solutions.” Travelers Inst., supra. In support of this challenge, Travelers points out the complex nature of product liability lawsuits and regulatory overlay compared with what it identifies as existing compensation systems and the unique position of the auto insurance to address this risk. Id.

Given the nature of the prospective risk associated with increased autonomy and involvement of artificial intelligence, a case can be made that adherence to the current commercial auto liability paradigm and moving toward a products-based risk transfer both have merit, Likewise, both are challenging to foresee implementing in the future. Ultimately however, the argument over their applications may be the insurance equivalent of “fighting the last war.” If one were to apply a product liability model to the current auto structure it is easy to see how the compensation system would grind to a halt. At the same time, the data produced thus far suggests a drastic reduction in incidents so that the remaining losses may well require the level of engagement and sophistication typically reserved presently for the product liability sector.

Insurance for a Future with Commercial Autonomous Vehicles

Perhaps more than any other issue, the confluence of autonomous and semi-autonomous vehicles with the present non-autonomous motoring public is where the rubber meets the road. It is unknown how humans will interact with artificial intelligence operating in their environment. It also remains to be seen how the insurance industry will adjust and evolve.

In making its recommendation pertaining to liability insurance, the Federal Automated Vehicles Policy, as updated in September of 2017, notes, “rules and laws allocating tort liability could have a significant effect on both consumer acceptance of HAVs and their rate of deployment. Such rules also could have a substantial effect on the level and incidence of automobile liability insurance costs in jurisdictions in which HAVs operate.”

Driver error plays a role in most motor vehicle crashes in the United States. In the future, a reduction in losses arising from motor vehicle accidents due to the introduction of artificial intelligence should correspond to lower premiums for commercial and personal auto liability policies. Moreover, if there is a shift in the allocation of tort liability toward a product liability model, then it is conceivable that the auto insurance industry could at some point in the future become a thing of the past. In this scenario, risk might be borne by insurers writing commercial general liability coverage to auto manufacturers.

The risk associated with introducing artificial intelligence is not limited to physical injury and property damage. Data security and personal privacy will certainly become sources of potential risk and corresponding insurability as artificial intelligence is implemented. With the cost of a data breach in the United States averaging just under $8 million, the prospective cost of insuring this new technology is sure to rise as well.

Conclusion

Even as new regulatory and insurance solutions are being forged, some of the projected challenges of new technology are already here today. Artificial intelligence is present in one way or another in every commercial motor vehicle presently operating. Though Hal is not refusing to open the pod bay doors, there are and will continue to be problems that relate to the implementation and expansion of technology in commercial vehicles. Addressing these changes on an ongoing basis and with a clear understanding that the future will look decidedly different than today represents the best opportunity for government, the trucking industry, and the insurance sector to identify areas in need of modification, regulation, or wholesale change.

The authors would like to acknowledge the significant contributions of their silent partner, an industry professional who, because of company policy, is not able to be named as an author.

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This article is reprinted with permission from the October 2018 Issue of For the Defense, the publication of DRI.

Litigation in the Era of Fake News and Rampant Suspicion

Lynette Pitt — Mon, 30 Jul 2018 14:00:00 GMT

Maithilee K. Pathak, PhD, JD

Much has been written about conspiracy theories in the American psyche, some of which are classic (e.g., assassination of JFK, Roswell), others comical (e.g., the Earth is flat), and others pernicious (e.g., Sandy Hook never happened). More people believe in conspiracy theories than you might think. Did you know that roughly one-third of jurors (34%) agree with the statement that “the 1969 moon landing was faked”? 1

The Age of Trump has given conspiracy theories room to flourish, in part because of ubiquitous access to the internet, daily harangues about “fake news,” and the viral nature of social media platforms (e.g., Twitter). As an increasing amount of substantive material is characterized as “fake,” a decreasing amount of truly fringe material is dismissed as wholly outlandish and incredible. Thus, conspiracy theories take on a patina of legitimacy—or at minimum, plausibility. People are left wondering what information is reliable and trustworthy, and what is actually “fake.” As a litigator, why should you care?

One consequence of the “What’s-fake-what’s-real?” conundrum is an erosion of public confidence in both corporations and institutions; many people today doubt the integrity of large companies, regulatory and law enforcement agencies (e.g., EPA, FDA, FBI, local police) and the legal system (e.g., attorneys, legislators, and judges alike).

The degradation of confidence in corporations has profound implications for corporate litigants for multiple reasons. For example, jurors are increasingly inclined to discount expert testimony (e.g., jurors conclude that “both sides just have their hired guns,” and/or that “statistics can lie”). Jurors are also more likely to hold companies to idealistic standards of conduct, reasoning that they should do more than meet government standards (e.g., jurors cynically argue that “regulations are determined by company lobbyists”).

In today’s jury climate, jurors simultaneously feel powerful and powerless.

In what way do jurors feel powerful? The internet provides infinite access to information, and information is empowering. “Google” is a verb in the American lexicon. Access to information leads people to confidently conclude, “I can do this!” regardless of what “this” is. People today believe they can renovate their homes, cook gourmet meals, evaluate the safety and efficacy of medications—and solve complex lawsuits. Jurors are confident that they can put information together and “figure it out.”

In what way do jurors feel powerless? Recent media coverage on the mood and psychology of “average Americans” says many feel embattled, abandoned and vulnerable. Pollsters report increased anxiety, disillusionment, unhappiness and distrust in the general population. Jurors’ number one concern is government corruption and pollution and climate change rank among the top 10. 2 Jurors feel they are subject to the whims of powerful corporations perceived to be in control.

Why should corporate litigants be concerned about today’s jury climate?

Increased anxiety and fear provide fertile ground for Ball and Keenan’s reptile strategy to take root.3 The reptile framework generally involves arguing that: (1) the defendant violated a fundamental “safety rule” of operating in society, one which is virtually impossible to controvert; (2) the defendant’s conduct endangered the plaintiff and, left unchecked, endangers the community at large; (3) the plaintiffs need and deserve compensation; and (4) it is incumbent on jurors to render a large award and send a message to the defendant to safeguard the community. The reptile strategy activates jurors’ fears. Plaintiffs advancing the reptile strategy essentially argue that the defendant company acted negligently (e.g., by rejecting industry norms, etc.) and endangered everyone in its ambit. The plaintiffs argue that the only way to get the company “back in line” is to hit it with a huge verdict, thereby negating the company’s cost/benefit analysis. Jurors are implored to correct the errant behavior of the defendant rule-breaker through 8, 9 or 10-digit verdicts (or more).

What must corporate defendants do to prevail in court?

Defense attorneys must do more than merely “respond” to the plaintiffs’ claims. They must provide an alternative explanation for the bad outcome that upends the plaintiff narrative.

Imagine a product liability suit arising from an accident involving an overturned golf cart, a teenage driver (“RJ”) and severe leg injuries to a 10-year-old girl (“MJ”). RJ had been driving his sister around on his grandfather’s farmland when he lost control of the cart, veered off the dirt road and tipped the vehicle into a shallow trough. MJ extended her leg to brace herself as she tumbled from the bench seat and ultimately found her ankle pinned under the cart. MJ’s parents filed suit against the cart manufacturer, alleging design defect based on the absence of a foot guard (i.e., estimated production cost per unit: $2.50) and inadequate warnings (i.e., estimated cost per unit: pennies).

This plaintiff storyline has the thematic components necessary for a compelling case at trial: a sympathetic victim (MJ), a villainous company (the multibillion-dollar cart manufacturer) and customer betrayal (the company put profits over safety).

The defense might argue that the owner’s manual clearly stated the importance of keeping arms and legs inside the vehicle at all times and the obvious risk of overturning when operating at excessive speeds and/or on uneven terrain. The company might also argue that the cart design met or exceeded all industry standards, had a solid safety record, etc. These are good defense arguments, and they are likely necessary to win the case, but they alone are probably insufficient to overcome the reptile framework.

Subject to the reptile tactics in depositions, witnesses would likely be asked questions like, “Wouldn’t you agree that a design engineer has a responsibility to avoid needlessly endangering the public?” and “Wouldn’t you agree that it is always better to be safe than sorry?” An unprepared design engineer would likely feel compelled to concede both points, creating a suboptimal pre-trial record and reinforcing idealistic expectations of the company.

Defense counsel must provide an affirmative story that advances the defense case and motivates jurors to argue it in deliberations. The concepts of knowledge and control are key to doing this.

Jurors apportion blame in all cases by assessing each party’s level of knowledge and control over the circumstances precipitating the lawsuit. The greater the level of knowledge and control ascribed to your client, the more likely you are to lose.

As compared to the injured girl, the golf cart manufacturer will surely be perceived as having superior knowledge and control. After all, the company had engineers trained to improve cart stability, account for human reflexes, etc., and the company certainly had 100% control over its profit margins. But, all product manufacturers are not doomed in every case. Why? Jurors are complicated and generally sensible.

Jurors invariably bring to the courtroom the attitudes and experiences that influence the way they hear, process, remember and recall information. People can hold two seemingly countervailing perceptions at the same time. For example, a person may think it is wrong to kill, but killing in self-defense may be justified. Similarly, a person may harbor some anti-corporate views, but also espouse personal responsibility and accountability. So, even in the face of jury venires that appear rabidly anti-corporate, litigators should assume that jurors harbor some predispositions that are defense-friendly.

Litigators must identify predispositions favoring the defense and leverage them at trial. Jurors must be armed with specific evidence to argue your case and, importantly, be motivated to do so in deliberations.

Many common juror predispositions favor product manufacturers. For example, the vast majority of jurors believe that most accidents are due to human error, not defective products, regardless of the product at issue.4 The majority of jurors also believe that student drivers should be trained and supervised, and statistics consistently show that teens are high-risk drivers. Furthermore, most jurors believe product owners should not modify or disable safety systems on equipment (e.g., remove restraints, rails or seatbelts).

The golf cart manufacturer can prevail at trial by elevating the knowledge and control that the jurors ascribe to other parties closer to the incident. This might include bringing out the following case facts in the opening:

RJ liked racing ATVs with his cousins whenever he visited his grandfather’s farm.
This golf cart was very different from the ATVs RJ was accustomed to riding—i.e., it did not have big, fat tires designed for rough terrain, it did not have a low-center of gravity, etc.
RJ had had never driven this golf cart, or any other cart like it.
RJ had not taken any safety courses related to operating golf carts.
RJ had also not completed driver training and did not have a driver’s license.
Grandpa had declined to participate in the dealer’s free introductory class on maintaining and operating the cart, including risks associated with speeding, uneven terrain, etc.
Grandpa had removed a safety net that snapped into place on either side of the vehicle to facilitate passengers getting in and out.
Mom and Dad had allowed RJ to operate the cart without adult supervision, and they allowed MJ to accompany him.
Mom and Dad had told RJ that they would follow them home about 15 minutes later.

After all, the accident may not have happened if any one of these factors had been reversed. To be clear, the manufacturer cannot win by merely attacking 15-year-old RJ for having maimed his little sister. But, by asking “Who was in the best position to have averted this crash?” the company can reframe the case from “innocent child victimized by greedy corporation” to “tragic accident involving a safe product used improperly.”

Jurors will reconsider the merits of the plaintiffs’ overly simplistic victim/villain storyline if the company can: (1) elevate the knowledge and control of the people closest to the incident; and (2) assuage jurors’ fears that the company is operating “off the rails,” without regard for the safety of customers and the community. This is true even in today’s jury climate which is rife with fear, anxiety and idealistic expectations. Granted, jurors often grumble about getting seated on a jury—after all, it can be inconvenient, disruptive, stressful, expensive, etc. But, once seated and sworn, jurors become emotionally invested in “figuring it out”—in reaching the right conclusion. Play your cards right, and jurors will reach your conclusion.

About the author
Maithilee Pathak Phd., JD, is a partner at R&D Strategic Solutions. She has devoted her professional career to understanding jury-decision-making in complex risky cases. She develops compelling conceptual and visual strategies for trial to help her clients win. Dr. Pathak obtained her doctorate from the University of California, Irvine, and her law degree from the University of Nebraska, Lincoln.

Endnotes:

1 Based on data collected by R&D Strategic Solutions in 18 venues across the nation (N=681)

2 America's Top Fears 2017, Chapman University Survey of American Fears, October 11, 2017

3 David Ball and Don Keena, "Reptile: The 2009 Manual of the Plaintiff's Revolution"

4 R&D Research has consitently found 80-90% of mock jurors agree that accidents are more likely due to human error than product defect in cases involving tires, vehicles, appliances and more.

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This article is reprinted with permission from the Georgia Defense Lawyers Association Journal.

The Scientific Method: It’s Not Just for the Science Fairs! Analysis Methods in Biomechanics

Lynette Pitt — Tue, 29 May 2018 22:02:45 GMT

SCIENTIFIC METHOD APPLIED TO ACCIDENT RECONSTRUCTION

Biomechanical analyses have long played a role in vehicle accident investigation, typically performing injury analysis and the determination of occupant kinematics and impact forces to the body. Here, we explain how the scientific method can be adapted to accident reconstruction from a biomechanical and human factors perspective, incorporating by reference various aspects of accident investigation and engineering analyses for the purpose of testing hypotheses.

Determining what happened in an accident to a reasonable degree of scientific or engineering certainty is driven by a process of accident reconstruction that utilizes biomechanics, injury analysis, and human factors as critical analysis components. The process utilizes the scientific method as a framework for testing compatibility or consistency of different aspects of data or information that has been gathered about an accident (Fig. 1). Preliminary information provides context for understanding the general circumstances surrounding the

accident and guides the overall direction of scientific inquiry. From this information, hypotheses can be generated about specific occurrences or a sequence of events. Usually, these hypotheses are posed as “testable” statements (formulated as either a null hypothesis or in the affirmative) or as questions, where the answer meaningfully directs the analysis toward conclusion. Many times, answers are most useful when they are exclusionary, in that a specific event or sequence can be ruled out. The most important step is ‘testing’ the hypotheses. In this step, a protocol or technique is devised that will identify and gather the appropriate data to analyze to either support or refute the testable statements, or answer the questions. In investigating accidents that have already occurred, these tests may be physical experiments and/or demonstrations of scientific principles, but routinely this is not a practical approach. This is particularly true in human injury analysis where physical experiments can be problematic or impractical. Instead, analyzing research literature (often regarding previously published physical experiments) and other sources of information is the most common way to test these hypotheses. Reasonable care should be used with witness data. In situations where the witness’s version of events is in conflict with the laws of physics or the verifiable physical evidence, those aspects of the testimony must be rejected.

DATA ORGANIZATION

In utilizing the scientific method, a multitude of data from various sources is obtained in order to test the working hypotheses. To ensure it is useful and complete, this data must be organized and considered in a systematic way. One method is a modified Haddon matrix, where the ‘man’-related data is separated into injury data and human factors data, and both are potentially modified by medical factors (Fig. 2). Data are separated into the temporal categories: Before, During, and After the accident, if deemed appropriate for the specific accident reconstruction. The categories provided in the columns of Figure 2 are discussed further below.

Injury As Physical Evidence

The focal point of this method is using the ‘man’-related data, and in particular the injuries, as physical evidence that must be reconciled in order to have an accurate accident reconstruction. The injuries (and other human interactions) in the accident are used as a signature of the where, how, and when the person was placed within the accident sequence. The biomechanical physical evidence can be just as essential as the other physical evidence gathered relating to the product/machine and accident environment (Fig. 2, Col. 1).

To apply this method, the injuries are described by type, location, appearance, and severity from a review of the medical records (which may include review of X-rays, CTs, and MRIs), photographs, witness statements, medical examiner reports, and other similar sources. Second, the injury mechanism for each injury is determined. Injury mechanism information is often ascertained through comparison with specific data documented in the injury research literature. The mechanism provides information about the nature of energy transferred to the body (e.g. mechanical, thermal, electrical) and describes the specific method and means required to create the injury. For example, a spiral fracture of a long bone requires a torsional force component applied about the long axis of the bone. For a mechanically mediated injury, describing the body movements and the forces on and within the body that create the injury allows for an understanding of necessary physical interaction of the human body with the environment. Finally, determining the injury threshold or human tolerance for a particular type of injury can be important in accident analyses, since it provides context to the severity of the incident and the magnitude of force, acceleration, deflection etc. that typically produces injury. For many injury mechanisms, normal biomechanical tolerance has been established in the injury research literature, and provides a comparison to the specific injury or event being analyzed. In many cases, comparison of the accident exposure characteristics is made with biomechanical data from activities of daily living or voluntary human exposure research (see Medical Factors section below in situations where relevant pre-existing conditions/injuries exist).

In accidents where multiple injuries have been received, their pattern and distribution create a ‘constellation of injuries’ that can provide a unique insight to the accident. The steps are repeated for each injury, and those with similar mechanisms or locations are matched. Even what are typically considered minor or superficial injuries can provide important evidence to properly place a person in the reconstruction of an accident scenario.

Human Factors

Human factors data can be another critical component in the accident reconstruction. Human factors is a discipline that evaluates how people interact with their environment and encompasses physical and psychological aspects of human performance, capabilities, characteristics, and interfacing with tools, machines, and the environment. From an accident reconstruction perspective, this application is typically focused on the events leading up to and during the accident sequence in order to evaluate what and how it happened, and in some cases why (Fig. 2, Col. 2). Where appropriate, an individual’s anthropometry should be identified, including one’s height, weight, and segment lengths, which are all aspects of physical evidence that are relevant for addressing a person’s position, posture, and fit within the accident environment. Anthropometric and human factors data are available that describe a wide range of human measurements and provide context for accident specific evaluations. Surrogate studies are an additional means by which human factors considerations can be addressed.

Medical Factors

Important to note are medical factors that could be potential modifiers of both the injury and human factors aspects (Fig. 2, Col. 1 & 2). A person’s health and/or medical condition may have a direct influence on their ability to resist trauma. The presence of disease or other pre-existing conditions, and the use of alcohol, drugs, or medications can have an impact on a person’s physical capabilities as well as their sensory perception and reaction. In these situations, an aspect of the analysis may include a determination of potential exacerbating influences, and whether a particular event is a significant contributor to the existing condition. This determination must follow the same methods described herein. In these circumstances, the mechanism of injury must still be present (e.g. the appropriate direction of force, acceleration, etc.), and comparison of an event with reasonable activities of daily living may be useful.

Product/Machine and Environment

Similarly, data must be gathered about other accident circumstances in order to put the injuries and human factors into context (Fig. 2, Col. 3 & 4). The geometry and layout of the accident site create physical evidence in the form of constraints, boundaries, and specific conditions (e.g. lighting, slip resistance). In accidents where products or machinery are involved, a description or knowledge of such things as the size, shape, materials, construction, controls, movement/action directions, speeds, and other characteristics of the equipment is important to understand the potential human interactions. Particular attention is given to documenting the damage, failed components, and/or witness marks that resulted from the accident. This gives key physical evidence about the nature of physical interaction between the man, machine, and environment. A range of failure analysis techniques are available to determine these interactions. In cases involving vehicles, the analysis can include a determination of the vehicle kinematics, as well as an assessment of the principle direction of force (PDOF) and velocity change (delta V) experienced. This information can then be used to determine occupant kinematics. It is not the intent of this paper to describe all the detailed analyses that are conducted on the product/machine or environment, but the data from these components is key to the accident reconstruction.

TEST AND ANALYSIS OF THE DATA

At the root of every accurate and complete accident reconstruction is consistency with the laws of physics and accounting for all the available physical evidence. When analyzing the data gathered and developed from the man, product/machine, and environment, the physics of all interactions between and within these groups must be consistent. This is identified in the bottom row of Figure 2. By regarding the injuries as physical evidence, they become not just an outcome of the accident, but an additional component (resource) to use in testing accident reconstruction hypotheses. In situations where there are inconsistencies between the available information, one must side with the physical evidence. Where there are apparent inconsistencies in the physical evidence, the data must be reexamined to resolve them. In this sense, the process can be iterative.

By following this method, the biomechanical accident reconstruction conclusions are founded in science and consistent with the laws of physics. Not all reconstructions will lead to a single answer. The available data that are gathered or developed may not be able to exclude all possibilities but one. This is usually a function of the ability to gather or develop sufficient data for this purpose. These efforts still have tremendous value, since knowing what did not happen can be just as important as knowing what did happen.

*This article is adapted from the following peer reviewed publication. Please refer to the publication for additional details and case examples.

Knox EH, Mathias AC, Stern AR, Van Bree MP, Brickman DB. “Methods Of Accident Reconstruction: Biomechanical And Human Factors Considerations.” Proceedings of the AMSE 2015 International Mechanical Engineering Conference and Exposition. Houston, Texas: November 13-19, 2015.

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OSHA’s Spread the Liability Regulation Update

Lynette Pitt — Fri, 27 Apr 2018 14:51:41 GMT

Fall Protection for Buildings: Usage, Responsibilities, and Risk
By: Robert N. Kenney, P.E. and Nila Abubakar, P.E.

OSHA’s recent “at-height” work protection rule, 29 CFR 1926.501 states that it is not just the Contractor that is liable for worker fall risk. Building Owners also are liable for providing safe “at-height” work protection.

The construction industry represents the largest amount of fatality work by volume and rate (Bureau of Labor and Statistics, 2015 data). Fall risks are present everywhere, especially since we are all affected by gravity. Falls account for 40% of construction fatalities. To provide appropriate fall protection, it helps to evaluate usage, responsibilities and risks from the perspective of hazard preventative measures.

Hazards and required fall protection can be evaluated based on a hierarchy of fall protection. This hierarchy helps determine what equipment may be necessary to complete a task as well as provide direction on associated risks. The hierarchy ranks fall protection from no risk, to limited risk, to high risk.

1. Hazard / Fall Elimination – This is the ideal method for fall protection. By eliminating the need to do work at height, the fall risk is eliminated. Work can be performed from the ground utilizing drones, telephoto lenses or equipment affixed to an extendable pole.

2. Passive Fall Protection – Separates the worker from a fall risk or hazard by use of hole covers or the use of Guardrail systems.

Examples of Guardrails:

3. Fall Restraint – If hazards cannot be eliminated for the worker, a fall restraint that includes securing a worker to an anchorage with a tether could be used to reduce the possibility of a worker falling over a free edge. Work that is routinely performed with predictable paths, such as gutter maintenance, benefits from this sort of fall protection. It is also required per OSHA 1910.28: The employer must ensure that each employee on a walking-working surface with an unprotected side or edge that is 4 feet or more above a lower level is protected from falling by one or more of the following - Guardrail systems; Safety net systems; or Personal fall protection systems, such as personal fall arrest (PFAS), travel restraint or positioning system.

4. Fall Arrest – Often used interchangeably with fall restraint, fall arrest systems differ in that they allow freedom of movement to perform activities. In the event of a fall, fall arrest systems safely stop a falling individual before they come into contact with the ground or surface below. An anchorage for fall arrest, positioning, restraint, or rescue systems must be capable of supporting the potential fall forces that could be encountered during a fall. For fall arrest systems to be certified, the minimum design force considered to be a static load is equal to 5,000 pounds or 2x (i.e. twice) the maximum arresting force. These tie-off points must be “certified” by a registered professional engineer or other “qualified” person as defined below. Alternatively, a non-certified anchorage can be determined by a competent person.

One key addition is that a tethered system must also have a separate fall arrest line. Thus, a “certified” building davit for a typical swing stage or swing chair will need to have a certified davit or tie-off anchor and a separate “certified” fall arrest line tie-off point directly connected to the individual(s) on the swing stage or chair.

Examples of Building Anchorages:

5. Administrative Controls – Involves use of signals and warnings to indicate the presence of fall hazards. These controls include safety monitors, warning lines and restriction access codes. These controls prove to be the most ineffective form of fall protection.

Rules, Regulations, and Standards

OSHA 1926 provides Safety and Health Regulations for Construction. The most frequently cited serious violations of OSHA 1926, Subpart M are:

1. Failure to protect workers from falls of 6 feet or more off unprotected sides or edges, e.g. floors and roofs.

2. Failure to protect workers from falling into or through holes and openings in floors and walls.

3. Failure to provide guardrails on runways and ramps where workers are exposed to falls to a lower level of 6 feet or more.

ANSI Z359, the “Fall Protection Code,” is the voluntary consensus standard and is written in language that can be adopted by local jurisdictions. The intention of this code is that employers whose operations fall within the scope and purpose of the standard will adopt its guidelines and requirements. In this document, the following definitions are provided:

Section 3.2.3, “Qualified Person” (partial):

Responsible for supporting the fall protection system.
Expertise in system design, structural analysis, anchorage certification, compliance with fall protection standards.
Supervises the design, selection, installation, and inspection of certified anchorages and horizontal lifelines.

Section 3.2.4, “Competent Person” (partial):

Responsible for the supervision, implementation, and monitoring of the fall protection program.
Knowledgeable through experience and training of applicable fall protection regulations, standards, equipment, and systems.
Conducts a fall hazard survey to identify fall hazards before Authorized Persons are exposed to those hazards.
Has the authority to stop work immediately due to unsafe conditions.
Verifies that Authorized Persons are adequately trained.
Supervises the selection, installation, use, and inspection of “non-certified” anchorages.

Section 3.2.4, “Authorized Person” (partial):

Has a working understanding of (and potentially is certified for) the employer’s fall protection policies and procedures.
Properly inspects and uses fall protection equipment and systems.
Informs the Competent Person regarding unsafe conditions.

The goal of building owners and property managers is to mitigate risk and liability for work performed on their property by Contractors and by the Owner’s in-house staff. To perform this, responsibilities include:

Providing a Use Plan.
Providing “certified” building anchorages.
Providing fall protection training to in-house personnel (Authorized).
Having a Competent Person on staff.

The goal of Contractors is to mitigate risk and liability for their Employees performing work for the contracting company. To perform this, responsibilities include:

Provide an Access Plan.
Provide proper tools and equipment, including PPE.
Provide fall protection training to employees (Authorized).
Have a Competent Person on staff.
Have a Qualified Person on staff or retain one as necessary.

In summary, skilled safe access requires a holistic approach for proper execution. Roles and responsibilities must be defined and access plans must be in place. Trained and certified personnel using proper equipment are necessary to mitigate risk.

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Federal Appellate Courts Split on Standing for Data Breach Claims

Lynette Pitt — Wed, 28 Mar 2018 16:30:00 GMT

by Michael W. Mitchell, Smith Anderson, LLP

What is easier to do in Alaska, Arizona, California, Hawaii, Idaho, Illinois, Indiana, Kentucky, Michigan, Montana, Nevada, Ohio, Oregon, Tennessee, Washington state, Washington, D.C., and Wisconsin than it is to do in Arkansas, Connecticut, Iowa, New York, Maryland, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, South Carolina, South Dakota, Vermont, Virginia, and West Virginia? (Don't worry, this rhetorical question is safe for work!)

Plaintiffs in the former jurisdictions can sue for a data breach even if they have not suffered any actual injury. Plaintiffs in those jurisdictions need only allege that there is an increased risk of future identity theft from the data breach.

But in the latter jurisdictions, plaintiffs must go further and allege an actual injury from the breach, such as fraudulent charges on existing debit or credit card accounts or the opening of fraudulent financial accounts using the stolen personal information. Otherwise, they cannot establish "Article III standing" and the claim cannot survive a motion to dismiss.

Why does this matter? Because class action plaintiffs who can survive a motion to dismiss have much greater leverage for settlement. A class action case that cannot be dismissed prior to discovery can command some settlement value just on the discovery costs alone.

The Sixth Circuit in Galaria v. Nationwide Mutual Insurance (6th Cir. 2016), the Seventh Circuit in Remijas v. Neiman Marcus (7th Cir. 2015) and Lewert v. P.F. Chang’s China Bistro (7th Cir. 2015), the Ninth Circuit in Krottner v. Starbucks Corp.(9th Cir. 2010) and In re Zappos.com (March 2018), and the D.C. Circuit in Attias v. CareFirst (D.C. Cir. 2017), have applied the lower standard for standing on a data breach claim.

The Second Circuit in Whalen v. Michaels Stores (2d Cir. 2017), the Fourth Circuit in Beck v. McDonald (4th Cir. 2017), and the Eighth Circuit in In re SuperValu Customer Data Security Breach Litigation (8th Cir. 2017), have found that general allegations of an increased risk of identity theft from a data breach alone are not enough of an injury in fact to establish standing. These Circuits have held that plaintiffs also must allege an actual injury.

The U.S. Supreme Court seems unimpressed by this disagreement between multiple federal courts of appeal, because the Supreme Court passed on the opportunity to resolve this split in legal precedent across the country when it recently denied an appeal from the D.C. Circuit's CareFirst decision.

Side bar: The Ninth Circuit's opinion in In re Zappos.com cites to a U.S. Supreme Court decision from 1824 to reject one of Zappos' arguments. Who says old law is of no value in the world of modern technology?

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This article was originally posted by Mike Mitchell on LinkedIn

U.S. Supreme Court Scolds the Sixth Circuit for Attempting to Side Step Precedent

Lynette Pitt — Mon, 26 Mar 2018 18:18:19 GMT

by Michael W. Mitchell, Smith Anderson LLP

Three years ago, I co-authored a case summary (here) about a U.S. Supreme Court decision applying "ordinary principles of contract law." See M&G Polymers USA, LLC v. Tackett, 135 S.Ct. 926 (2015). I thought Tackett was worth a short article because it is unusual to see a U.S. Supreme Court case on contract law.

In Tackett, the Supreme Court vacated a Sixth Circuit decision because that court had failed to apply ordinary principles of contract law to a collective bargaining agreement. The issue in Tackett was whether the agreement, governed by The Employee Retirement Income Security Act of 1974 (ERISA), granted lifetime health benefits to employees even in the face of the agreement’s three-year term. In a prior case, International Union, et al v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983), the Sixth Circuit had adopted its “Yard-Man” inference, pursuant to which courts in the Sixth Circuit could construe the grant of health care benefits in a collective bargaining agreement as vested and interminable despite express language setting an expiration date on the entire agreement itself.

It now appears that Tackett has exposed a minor rift between the Sixth Circuit and the Supreme Court, because the Sixth Circuit would not take "no" for an answer in Tackett. Those who are familiar with how judges speak (and write) when they take a lawyer to the woodshed will recognize that same tone and frustration in the Supreme Court's February 2018 opinion in CNH Industrial Nv, et al v. Jack Reese, et al. In a per curiam opinion, the Supreme Court recognizes that it had addressed the same issues in Tackett only "[t]hree terms ago," and then the Court summarizes the case and its holding as follows:

In this case, the Sixth Circuit held that the same Yard-Man inferences it once used to presume lifetime vesting can now be used to render a collective-bargaining agreement ambiguous as a matter of law, thus allowing courts to consult extrinsic evidence about lifetime vesting. 854 F. 3d 877, 882-883 (2017). This analysis cannot be squared with Tackett. A contract is not ambiguous unless it is subject to more than one reasonable interpretation, and the Yard-Man inferences cannot generate a reasonable interpretation because they are not "ordinary principles of contract law," Tackett, supra, at ___ (slip op., at 14). Because the Sixth Circuit's analysis is "Yard-Man re-born, re-built, and re-purposed for new adventures," 854 F. 3d, at 891 (Sutton, J., dissenting), we reverse.

The Supreme Court makes a point of reminding the Sixth Circuit that no other circuit has made this same error: "[t]ellingly, no other Court of Appeals would find ambiguity in these circumstances . . . . The approach taken in these other decisions 'only underscores' how the decision below 'deviated from ordinary principles of contract law.'" Ouch.

In judge-speak for "this is not rocket science," the Supreme Court concludes its opinion by remarking that "[s]horn of Yard-Man inferences, this case is straightforward." The Court then shows the Sixth Circuit how it could have decided the case in about the length of a single paragraph. The Court's final jab notes that the Sixth Circuit continues to be unreasonable in its approach to collective bargaining agreements: "Thus, the only reasonable interpretation of the 1998 agreement is that the health care benefits expired when the collective-bargaining agreement expired in May 2004." (emphasis added)

The nugget of contract law, quoted from Tackett, is that "[w]hen the intent of the parties is unambiguously expressed in the contract, that expression controls, and the court's inquiry should proceed no further." Do not pass go. Do not collect $200!

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This article was originally posted by Mike Mitchell on LinkedIn

Ethical Marketing in Today’s Technological Marketplace

Lynette Pitt — Wed, 24 Jan 2018 20:42:50 GMT

(Adapted from the presentation “The Future Is Now: Ethical Lawyer Advertising and Marketing” scheduled for the NCADA 2018 Winter Workshop on February 2, 2018)

by Martá P. Brown, Butler Weihmuller Katz Craig LLP

As young lawyers progress in their legal career, the emphasis on marketing begins to manifest itself. How to go about this task is not something they teach you in law school. It is never too early to begin thinking about how to best position yourself to attract clients. With today’s technology, it is easier than ever to reach potential clients, but easy is not always ethical.

Online Legal Service Providers

One innovative way to reach clients that is being hotly debated across the United States is the use of online legal service providers, specifically Avvo Legal Services (“ALS”) by Avvo, Inc. Avvo is an online legal services corporation founded in Seattle, Washington in 2006. Avvo uses publicly available information from the internet and state bar associations in order to create a listing of lawyer profiles, which are then given a rating based upon a proprietary system combined with reviews from clients and peers.

ALS is an online legal service introduced by Avvo to provide unbundled legal services to customers. Lawyers who agree to the ALS terms of service and participate in ALS are charged a percentage of the legal fee obtained from the potential client. The portion of the legal fee charged by ALS is called a “marketing fee.”

To use ALS, first the potential client selects a legal service such as advice session, document review, or document drafting, among others. The legal fee for the selected service is displayed on the website together with a description of the service. The potential client then provides a zip code. Nearby participating lawyer profiles are displayed and the potential client selects a lawyer. The potential client pays via credit card, and the selected lawyer is notified by Avvo. The lawyer calls the client over a designated line that is tracked by Avvo to confirm that the call was completed and the length of the call. Avvo deposits the participating lawyer’s ALS legal fees into a designated trust or operating account once a month. Avvo also collects its marketing fee by debiting the designated trust or operating account monthly.

Ethical Concerns

The North Carolina State Bar issued proposed 2017 Formal Ethics Opinion 6 (“FEO”) to address ALS and other online legal service providers used for the marketing of legal services. While the proposed FEO references ALS directly, it applies to all online legal service providers. The proposed FEO states that “a lawyer may participate in an online platform for finding and employing lawyers subject to certain conditions,” which is a rather succinct conclusion, although the ethical considerations are anything but.

N.C. Gen. Stat. § 84-5 prohibits the unlawful practice of law by a corporation, and lawyers are not allowed to assist a corporation or other person in the unauthorized practice of law pursuant to Rule 5.5(f) of the North Carolina Rules of Professional Conduct. The onus is on the participating lawyer to determine that Avvo is straight- forward in its advertising that it is not providing the legal services and is only marketing those services for properly licensed lawyers.

Rule 7.2(d) addresses Lawyer Referral Services. Lawyers participating in ALS must also be mindful that ALS provides an impartial list of the participating lawyers in the zip code selected by the potential client. If ALS or another online legal service recommends a particular lawyer, or restricts the list of lawyers, it would violate Rule 7.2(d). Moreover, the participating lawyer has to ensure complete independence of professional judgment and non-interference by the online legal service pursuant to Rule 1.8(f) and Rule 5.4(c). Because ALS is involved as a third-party, the participating lawyer cannot allow Avvo to compromise the lawyer’s professional relationship with the client.

From time to time, a fee dispute will arise between a lawyer and a client. Rule 1.5(a) restricts a lawyer from collecting a fee that is illegal or “clearly excessive.” Even though Avvo dictates the fee charged through ALS, the participating lawyer is tasked with certifying that the fee charged is not “clearly excessive” for services rendered. If a fee dispute does arise between the lawyer and the client using ALS, Avvo cannot be involved in the dispute.

One particularly troubling aspect of ALS is the potential issue of sharing a legal fee with a nonlawyer entity. Rule 5.4(a) states that the aim of the limitations on sharing legal fees with nonlawyers is “to protect the lawyer’s professional independence of judgment.” As long as Avvo’s “marketing fee” does not violate the restrictions on lawyer advertising under Rule 7.2(b)(1), and the lawyer can maintain “professional independence of judgment,” Rule 5.4(a) is not violated. However, as with many aspects of ALS, the burden is on the participating lawyer to comply with the Rules.

Lawyer Marketing efforts naturally consist of communicating available legal services to potential clients in an effort to attract legal employment. In doing so, a lawyer can run into trouble when marketing and advertising efforts become misleading and thereby violate Rule 7.1 regarding communications concerning a lawyer’s services. Using ALS or another online legal service is no different. When a participating lawyer creates a profile on ALS, the lawyer is responsible for monitoring the information on the website to confirm that the information presented is truthful and does not mislead potential clients.

Status of Proposed 2017 Formal Ethics Opinion 6

As of this writing, the North Carolina State Bar has not yet adopted proposed 2017 Formal Ethics Opinion 6. The proposal was sent back to subcommittee for further study. Several other state bars, including New Jersey, New York, Ohio, Pennsylvania, and South Carolina, have found that the ALS “marketing fee” constitutes fee sharing with a nonlawyer or an improper referral in violation of the Rules of Professional Conduct (ABA Journal, August 9, 2017). Those states would agree, when it comes to marketing, easy is not always ethical.

About the Author

Martá Brown is a Senior Associate with the Charlotte, North Carolina office of Butler Weihmuller Katz Craig LLP. His practice includes commercial litigation, liability defense, and first and third party insurance coverage matters. He is the current Chair of the NCADA Young Lawyers Committee.

Failure to Withhold Settlement Funds Subject to a Medical Lien can Expose an Insurer to Treble Damages

Lynette Pitt — Wed, 27 Dec 2017 17:07:26 GMT

by George Sanderson, Ellis & Winters, LLP

A court’s decision to impose liability for committing an unfair or deceptive trade practice in a particular case may have wide-ranging implications—even when the amount in dispute in the case itself is relatively minor.

Such is the case in Nash Hospitals, Inc. v. State Farm Mutual Automobile Insurance, Co. In Nash, the North Carolina Court of Appeals affirmed a judgment that State Farm committed an unfair and deceptive trade practice in its handling of the disbursement of settlement proceeds subject to a medical lien. Although the matter arose over a $757 hospital bill, how the case is resolved could have broader implications with how insurers handle personal injury settlements.

State Farm settles without notifying the hospital

Jessica Whitaker was involved in an automobile accident caused by another driver. She incurred medical expenses with Nash Hospitals and two other healthcare providers following the accident.

State Farm insured the driver responsible for Ms. Whitaker’s accident. State Farm negotiated a settlement with Ms. Whitaker to pay a substantial portion of her medical expenses. Ms. Whitaker did not involve counsel in her negotiations with State Farm.

State Farm sent a check to Ms. Whitaker for the negotiated settlement amount. The check was jointly payable to Ms. Whitaker, Nash Hospitals, and the other medical providers. Ms. Whitaker was unable to negotiate the check herself because it was a joint check.

Pursuant to N.C. Gen. Stat. Sec. 44-50, Nash Hospitals possessed a lien on the settlement proceeds pro rata with the other lienholders. Under the statute, the lienholders’ recovery was capped at 50% of the total settlement.

Nash Hospitals notified State Farm of its lien prior to the settlement. State Farm did not notify Nash Hospitals, however, that it had reached a settlement with Ms. Whitaker.

Nash Hospitals subsequently contacted State Farm to inquire about the status of the claim. Only then did State Farm disclose that it had reached a settlement with Ms. Whitaker and issued the joint check to her. State Farm took the position that the issuance of the joint check sufficiently protected the hospital’s lien. State Farm told the hospital to contact Ms. Whitaker directly to resolve the issue.

After finding out about the settlement, Nash Hospitals advised State Farm that State Farm’s failure to retain funds sufficient to satisfy its lien violated the lien statute. Nash Hospitals also pointed out that, by issuing a joint check to Ms. Whitaker that she was unable to cash, Ms. Whitaker would be forced to obtain an attorney and incur additional unnecessary expenses in order to work out how the settlements were to be divided between her and her medical providers.

Nash Hospitals sues for its shares of the settlement proceeds

State Farm did not respond to the letter. Nash Hospitals then sued State Farm for violating the medical lien statute. Nash Hospital’s complaint also included an unfair and deceptive trade practices claim.

The trial court granted summary judgment to Nash Hospitals, finding that State Farm violated both the lien statute and N.C. Gen. Stat. § 75-1.1.

State Farm appealed and the North Carolina Court of Appeals affirmed as to State Farm’s liability under both statutes. The appeals court remanded the case, however, to have the trial court recalculate the damages originally awarded.

The Court of Appeals determined that State Farm had a statutory duty to retain sufficient funds from the settlement to satisfy the lien claims and to distribute proceeds to the lienholders before disbursing to Ms. Whitaker.

With respect to the 75-1.1 claim, State Farm first challenged the hospital’s standing to bring the claim. State Farm argued that Nash Hospital lacked privity with the insurer. The appeals court rejected that argument. The court reasoned that the hospital was a third-party beneficiary of the insurance contract and was in privity with State Farm upon notifying State Farm of its asserted lien.

The court also found that State Farm’s failure to notify Nash Hospital of the settlement with Ms. Whitaker, and its direction that Nash Hospitals seek recovery from Ms. Whitaker herself, was both an unfair and a deceptive act.

The court was careful, however, to indicated that State Farm’s violation of the North Carolina medical lien statutes did not make State Farm per se liable under 75-1.1. Rather, liability stemmed from State Farm’s underlying conduct and “its failure to cure the violation absent litigation.”

The Court of Appeals directed the trial court to enter summary judgment to Nash Hospitals for a mere $971.07. Upon remand, it is possible that Nash Hospitals will also seek an attorney fee per N.C. Gen Stat. § 75-16.1.

Although it appears that State Farm will not incur a significant cash outlay in this matter, the case is likely to have broader implications to how the company handles claims settlement in order to avoid treble damages awards in the future. State Farm’s counsel indicated at argument that the insurer routinely issued joint checks and had “the . . . parties agree . . . who’s going to get what.”

Presumably because of the importance of this case to the insurer’s general practices, State Farm has sought discretionary review of the decision by the North Carolina Supreme Court (the Supreme Court has not yet decided whether to take up the case). Assuming the Court of Appeals’ decision stands, State Farm, and possibly other insurers, may need to end the practice of issuing joint checks. Those insurers apparently will also bear greater responsibility for determining how personal injury settlement proceeds should be disbursed.

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About the Author
George Sanderson is a partner with Ellis & Winters LLP. His practice includes general commercial litigation, lender liability defense, and matters involving bankruptcy and creditors’ rights.

Intentionality and Diversity in the Profession

Lynette Pitt — Thu, 30 Nov 2017 18:30:00 GMT

by Denaa J. Griffin, Yates McLamb & Weyher, LLP

Let me first speak to the bottom line: the law firm that intentionally promotes and retains ethnically, racially, and gender-diverse attorneys has a significant edge. Not groundbreaking news. The way to be most successful is to mirror the diversity of the clients and causes our legal profession serves. Law firms and organizations without this edge tend to devise single, predictable solutions and, while those law firms may be successful in some areas, the goal is always to improve and enhance the advocacy for our clients.

Diversifying our legal profession is not an easy task. As the American Bar Association’s 2017 National Lawyer Population Survey1 highlights, not much has changed in the last 10 years regarding diversity in our profession despite noble efforts to improve the same. I am optimistic most hiring partners and recruiters know that it is not enough to merely be open to the idea of hiring diverse candidates and hoping those candidates, if hired, are successful and remain with the firm or organization. I am also encouraged that most hiring partners and recruiters know the importance of taking affirmative steps to establish a diverse candidate pool for summer associates and lateral hires, providing meaningful and intentional mentorship, and ensuring that your clients also know and appreciate the benefits of having diverse attorneys at your firm or organization.

Firms and organizations must recognize, first, that the need for improvement is not going to organically correct itself. Firms and organizations must take affirmative steps in their recruitment, mentorship, and client access.

RECRUITMENT. Firms and organizations must be intentional in the recruitment of summer clerks. Let us ensure we are spreading the recruiting net far and wide when recruiting for summer associates. Did you know there is a Minorities in the Profession First-Year Summer Associates Program? Through that program, the North Carolina Bar Association's Minorities in the Profession Committee gathers minority law students from all of the North Carolina Law Schools who are in the top 10% of their class, after at least one screening interview, just for you to interview. There are other similar programs by various organizations around the State such as the Mecklenburg County Bar’s Charlotte Legal Diversity Clerkship Program. These organizations help to take the initial leg work out of intentionally diversifying your summer clerk class. A diverse summer clerk class gives firms and organizations a diverse pool from which first-year associates are groomed and ultimately chosen.

MENTORSHIP. Intentionality also includes being deliberate about providing your ethnically, racially, and gender-diverse attorneys with mentorship, both within and outside of your firm or organization. Be intentional about that mentorship. Encourage them to serve on the Diversity Committee of the North Carolina Association of Defense Attorneys or the Defense Research Institute. Appreciate that they may want to join the Capital City Lawyers Association, the North Carolina Association of Women Attorneys, or other similar voluntary legal organizations. Mentor them. Explain the importance not only of responding appropriately to discovery requests, but also to remember to introduce themselves to the judge when appearing outside of their home county. Recruitment is only the start; resources must also be dedicated to ongoing resources beyond the initial hiring to sustain a diverse environment. Mentorship is the lynchpin in retaining diverse, talented attorneys.

CLIENT ACCESS. Intentionality also includes being intentional with bringing your ethnically, racially, and gender-diverse attorneys to meetings with your clients so that there is buy-in and a willingness from the client to also rely on your diverse attorneys’ expertise. Law firms and organizations have to continue to improve upon efforts to include their diverse attorneys in critical career development networking opportunities. Client access and having the opportunity to build those relationships is invaluable in the retention and promotion of diversity attorneys at your firm or organization.

Overall, being committed to diversifying your firm or organization must include retention efforts, mentoring, and social programs designed to foster an environment in which all of your attorneys can thrive, not just most of them. The American Bar Association in 2016 adopted a resolution urging law firms and corporations to create opportunities for diverse attorneys, including directing a greater percentage of their legal business toward minorities. We know, through various legal organizations’ research, that there has been an upward nationwide trend in the commitment from law firms to diversity and inclusion efforts. Albeit a larger problem than one firm or organization can change, there are small intentional changes each firm or organization can make with minimal cost such as, but not limited to:

Sponsoring a minority law student/attorney networking event and having your attorneys attend;
Developing a mentoring relationship with an attorney of a different gender, race, ethnicity, or sexual orientation; or
Including a conversation about your firm or organization’s diversity initiatives during your retreat or organizational meeting and develop action items from that conversation.

Be sure your firm or organization does not seek diversity solely for political correctness or for some type of community service. Be diverse to be a better organization. Be diverse to put a different message out to the profession and community overall. Continue to value diversity in opinions and values for the betterment of your organization and the legal profession. Innovative thinking comes from a diverse team. In the fifty years after the Honorable Thurgood Marshall joined the Supreme Court of the United States and in the almost 34 years since the first African-American Associate Justice was appointed to the Supreme Court of North Carolina, it is important to see how far we have come and how we have to continue that progress in the future with our intentional work. As firms and organizations recognize the continued need for improvement in the legal profession, we must all work to ensure that diversity is present and thriving at all levels of the profession.

1 AMERICAN BAR ASSOCIATION, ABA NATIONAL LAWYER POPULATION SURVEY (2017).

Denaa J. Griffin is an Associate Attorney with Yates, McLamb & Weyher LLP located in Raleigh, North Carolina. She serves as a member of the Diversity Committee of the North Carolina Association of Defense Attorneys and is committed to the purposeful work of law firms and organizations in diversifying the legal profession.

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Staring Down the Barrel: Responding to “Shotgun” Complaints in Asbestos Litigation

Lynette Pitt — Wed, 25 Oct 2017 16:30:00 GMT

by Laura Dean, Cranfill Sumner & Hartzog, LLP

Federal Rule of Civil Procedure 8(a)(2) requires a complaint to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” As the United States Supreme Court explained, the purpose of this requirement is to “give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957). In recent years, defendants have been challenging the sufficiency of shotgun-type pleadings based on the United States Supreme Court’s decisions in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 566 U.S. 662 (2009).

Shotgun complaints “fail to apprise the opposing party of the particular claims against it (and the potential extent of its liability) . . . [and] water[] down the rights of parties to have valid claims litigated efficiently and waste scarce judicial resources.” Jackson v. Waring, Civil No PJM 15-1233, 2016 WL 7228866 at *4 (D. Md. Dec. 13, 2016).

In a Section 1983 case, Weiland v. Palm Beach County Sheriff’s Office, 792 F.3d 1313 (11th Cir. 2015), the Eleventh Circuit sifted through more than sixty past opinions and outlined four broad categories of shotgun pleadings. Id. at *1322. The first, most common type, is “a complaint containing multiple counts where each count adopts the allegations of all preceding counts . . . .” Id. The second is “replete with conclusory, vague, and immaterial facts not obviously connected to any particular cause of action.” Id. The third does not separate into a different count each cause of action or claim for relief. Id. The fourth asserts multiple claims against multiple defendants without specifying which defendants are responsible for which acts or omissions, or which of the defendants the claim is brought against. Id.

In asbestos litigation, many complaints arguably fall into the fourth category. Plaintiffs will often include only generic conclusory allegations against multiple defendants without tying any defendant to a particular product. For example, the complaint may include an allegation that plaintiff worked with and was exposed to asbestos and asbestos-containing materials, products or equipment mined, manufactured, processed, imported, converted, compounded, and/or sold by the defendants. However, plaintiff will not provide any additional details, including the particular product to which plaintiff was exposed, the nature of the exposure, or when the exposure occurred.

Some federal courts have expressed skepticism in response to these wide sweeping pleadings. For example, in Craver v. 3M Co., No. 1:16cv01397 (M.D.N.C. Aug. 17, 2017), the court recognized that asbestos litigation “is different from most other federal litigation.” However, the court explicitly stated that despite these difficulties asbestos litigation “is still litigation subject to the Federal Rules.” Id. In dismissing plaintiff’s complaint, the court explained that plaintiff made “only generic allegations against all Defendants as a group” and that the allegations were “too vague to apprise [defendant] of the basis of its alleged liability and to allow the Court to draw a reasonable inference that [defendant] is liable for the misconduct alleged in the Complaint.” Id.

Similarly, in Rhodes v. Mcic, Inc., No JKB-16-2459, 2017 WL 25375 (D. Md. Jan. 3, 2017), the court granted the defendants’ motions for judgment on the pleadings explaining that the complaint “lumped all Defendants together generally”, “made no effort to allege facts particular to any Defendant”, and did not “narrow[] the relevant time period as to each Defendant.” Id. at *3.

In Boggs v. Am. Optical Co., No. 4:14-CV-1434-CEJ, 2015 WL 300509 (E.D. Mo. Jan. 22, 2015), plaintiff alleged exposure to multiple asbestos-containing products without differentiating between the products or defendants. Id. at *1. In ruling on a motion to dismiss, the Boggs court explained:

A complaint which lumps all defendants together and does not sufficiently allege who did what to whom, fails to state a claim for relief because it does not provide fair notice of the grounds for the claims made against a particular defendant. A “shotgun pleading” or “kitchen sink pleading” in which a plaintiff asserts every possible cause of action against a host of defendants for actions over a prolonged period (here, twenty-seven years) but without facts specific enough that those defendants can respond to the allegations does not comport with even the most generous reading of Rule 8(a).

Based on the few facts alleged in the complaint, it is not plausible that all thirty-two defendants caused [plaintiff] to be exposed to asbestos from two dozen kinds of products over a twenty-seven year period and in five different geographical locations. Rule 8(a) requires more specificity than [plaintiff] has provided if his complaint is to be taken as anything more than speculation as to each defendant.

Id. at *2 (citations omitted).

In Bulanda v. A.W. Chesterton Co., No. 11 C 1682, 2011 WL 2214010, at *2-3 (N.D. Ill. Jun. 7, 2011), plaintiff’s claims were also dismissed without prejudice because, aside from the first paragraph in which defendants were listed by name, the complaint made only generic allegations as to the defendants collectively. Id. at *2. The complaint did not “identify the allegedly offending product that [the moving defendant] manufactured, sold, or distributed.” Id. at *2.

Other cases in which the court dismissed similar complaints include Rothchild v. Crane Co., No. 14-80271-CIV, 2014 WL 3805491 (S.D. Fla. Aug. 1, 2014); Baldonado v. Arvinmeritor, Inc., No. 13-833-SLR-CJB, 2014 WL 2116112 (D. Del. May 20, 2014) report and recommendation adopted Civ. No. 13-833-SLR/CJB, 2014 WL 2621119 (D. Del. Jun. 10, 2014); Aguirre v. Amchem Prods., No. CV 11–01907–PHX–FJM, 2012 WL 760627 (D. Ariz. Mar. 7, 2012).

Despite this recent trend, some “kitchen sink” complaints continue to survive motions to dismiss. In Miller v. 3M Co, No. 5:12-CV-00620-BR, 2013 WL 1338694 (E.D.N.C. Apr. 1, 2013), plaintiffs alleged that occupational exposure to asbestos-containing products caused Mr. Miller to contract mesothelioma, which resulted in his death. One defendant moved to dismiss the complaint. In denying the defendant’s motion to dismiss, the court heavily relied on an attachment to the complaint in which plaintiff asserted “factual information about Mr. Miller’s work experience and provide[d] dates, occupations, employers and worksite locations, as well as a list of products containing asbestos to which he was allegedly exposed” and found that these allegations “sufficiently [met] the applicable legal standard.” Id. at *2.

In Lineberger v. CBS Corp., 1:16cv390, 2017 WL 3883711, at *2 (W.D.N.C., Aug 14, 2017), the court, relying on Miller, also declined to dismiss plaintiff’s shotgun complaint. Although the individual defendants were only listed in an attachment to the complaint, the court found that the complaint gave a history of employment during which time plaintiff alleged he was exposed to asbestos and found that these allegations were sufficient to survive the motion to dismiss. Id. at *1.

Other cases in which the court has declined to dismiss shot gun complaints include Hicks v. Boeing Co., No. 13-393-SLR-SRF, 2014 WL 1284904 (D. Del., Mar. 21, 2014); Soucy v. Briggs & Stratton Corp., No. 1:13-cv-00068-NT, 2014 WL 794570 (D. Me. Feb. 27, 2014).

The above decisions are difficult to reconcile and the Fourth Circuit has not yet addressed the issue of shotgun-style pleadings in the asbestos context. However, defendants should continue to challenge these pleadings. While motions to dismiss, when granted, are without prejudice, these efforts may put pressure on plaintiffs’ attorneys to better evaluate the strength of their claims against individual defendants before filing.

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Medicare Updates which are Going to Impact your Workers’ Compensation Practice

Lynette Pitt — Wed, 27 Sep 2017 14:50:53 GMT

by Erin Collins & Shannon Metcalf, Hedrick Gardner Kincheloe & Garofalo, LLP

The Centers for Medicare and Medicare Services (CMS) issued an updated workers’ compensation Medicare Set Aside (MSA) Manual on July 31, 2017 (which was dated July 10, 2017), with new information and options with regard to MSAs. This article is intended to update practitioners on these developments and provide a brief analysis of the new changes, which include 1) a new one-time “Amended Review” process for previously approved MSAs; 2) seemingly new restrictions on CMS approval of “zero-dollar” MSAs; and 3) other various changes that likely impact the workers’ compensation practice.

The “Amended Review” Process:

CMS is now allowing “re-review” of prior approved MSAs under certain circumstances. The “Amended Review” process and allows parties to obtain a second review of MSAs where the parties believe the projected care has changed so much that the new proposed MSA would result in a 10% or $10,000.00 change (whichever is greater) in CMS’ previously approved amount. To be eligible for this re-review option:

The case must still be open and may not have already settled;
The original MSA must have been approved between one and four years from the date the Amended Review is requested;
There must not be a previous request for an Amended Review (so can only do this once); and
The requested MSA change must result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount.

o Note, the new proposed MSA amount can be greater than or less than the approved MSA amount. The example CMS gives is for an Amended Review to increase the MSA.

This process could work well in files sitting around with old, approved MSAs that made the claim unable to settle at the time the MSA was approved by CMS. However, issues may arise where cases are “partially” resolved (ie: indemnity only) or cases are resolved on a contingent basis as it is unclear whether CMS will consider those cases to be “settled” and therefore, ineligible for review. Please also note the prior re-review processes are still in place, which includes: 1) the CMS determination contains obvious mistakes or 2) the parties have additional evidence not previously considered by CMS, which was available prior to the submission date which warrants a change in the CMS determination. These prior processes were historically only successful in a very limited set of circumstances.

Zero-Dollar MSA approvals:

The second change will likely impact practitioners with clients who have historically obtained CMS’ seal of approval on their decision to not set aside any funds for future Medicare-covered medicals for a Medicare beneficiary. For example, CMS traditionally would approve these “zero-dollar MSAs” in denied claims where no benefits had been paid by the Defendants and the settlement reflected a true compromise of a disputed claim. CMS’ placement of the discussion of “zero-dollar MSAs” in the user guide under the “Hearing on the Merits” section indicates the parties may now need to provide CMS with a court order after a hearing on the merits to get a zero-dollar MSA approved by CMS. From a practical perspective, there are very few scenarios where this is going to be possible in the North Carolina workers’ compensation process. It is still yet to be seen whether CMS is going to freeze all approvals of zero-dollar MSAs except for in very limited circumstances; however, practitioners should be cautious when electing to submit a zero-dollar MSA for approval as the response may ultimately be a full projection of lifetime future medicals.

Other Changes in the New MSA Manual:

There are a variety of other changes that took place in the July 10, 2017, version that will impact the value of MSAs moving forward. These changes include:

CMS has advised they will now be including the cost of TENS units in cases involving treatment of chronic lower back pain.
CMS has advised they will no longer be using “across the board” pricing for spinal cord stimulators or other implantable devices. They used to price replacements at a set price of $30,274 in every jurisdiction. Now they are going to price them out specifically for each jurisdiction, which means the pricing in NC will likely be a lot higher than the former price.
CMS has advised the pricing for hospital services are not going to be based on what those should be in the specific area where the claimant lives, but based on what a major medical center in the state would charge. So, for instance, if your claimant was going to have surgery in a Fayetteville hospital, CMS will likely price it based on what a Charlotte or Raleigh hospital would charge for the same service, which will be more. Fee schedules are applicable throughout the state, but that does not mean certain hospitals do not use different codes for pricing, etc.
CMS added the following language to the definition of “total settlement amount” when trying to determine if the review thresholds are met: “amounts forgiven by the carrier.” This can be interpreted many different ways, and could potentially be interpreted to include payment of Plaintiff’s portion of mediation fees and the Defendants’ agreement to not seek reimbursement for Claimant’s portion of the clincher processing fee. Remember, submission of an MSA to CMS is a voluntary process.
CMS now allows parties to change MSA vendors. In the past only one vendor could be involved in the process of an MSA submission. Now a party can change vendors if desired.

These changes only impact MSAs that are going to be submitted to CMS. It is important to remember that CMS submission is a voluntary process and is not mandated by any federal law or administrative memorandum. Many parties still require/demand CMS submission as a part of their guidelines/claims handling and for those parties, these changes will most certainly impact the day to day handling of their claims. For parties that do not have specific requirements for CMS submission, it is important to remember that non-submission is always an option.

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Compatibility of Medical Devices with Electromagnetic and Wireless Signals

Lynette Pitt — Tue, 26 Sep 2017 16:27:10 GMT

by Matthew Pooley, Benjamin Cotts & James Brennan, III

Magnetic induction has long been present in modern society, typically without the knowledge of the general public. The walk-through metal detectors at the airport and the anti-theft gates at the exits of retail stores are among the largest and most commonly-encountered sources of magnetic induction. Other smaller devices, such as hand-held metal detectors (think of the person at the beach searching for jewelry) and induction cooktops that heat cooking pans without heating the surface of the cooktop itself, also make use of magnetic induction. A somewhat different form of magnetic induction is involved in the radiofrequency identification (RFID) used to pay highway tolls without the need for stopping and the RFID used in shipping containers. Magnetic induction is even used inside the highly-specialized coils of a magnetic resonance imaging machine. The magnetic induction from each of these devices is described by Faraday’s law, a basic law of electromagnetics, which states that if a time-varying magnetic field passes through the surface of any conducting loop, a voltage will be induced in that loop. The voltage induced in this loop is proportional to the time-varying change in magnetic flux (i.e., the amount of magnetic field that enters the loop perpendicular to its surface), as shown in Figure 1.

Figure 1. A magnetic field passing through the surface of a loop induces a voltage in the terminals of a loop.

More recently, the mobile revolution and the explosion of wirelessly-connected devices as part of the “Internet of Things” (IoT) has created a desire to be able to conveniently charge devices without the need to plug them into a wall outlet. Wireless charging is among the fastest-growing segments of technology, particularly related to portable devices. Devices such as mobile phones, tablets, and laptop computers are being outfitted with the built-in capability to charge their batteries wirelessly. In addition, larger items such as electric vehicles will soon be available with wireless charging capabilities.

Along with this proliferation of wireless connectivity and charging capabilities comes a potential cost, known in the industry as electromagnetic compatibility (EMC). Each of these devices (and countless others) needs to be able to operate successfully in the presence of potential interference from other devices (i.e., electromagnetic susceptibility or immunity) and each one needs to consider the possible effects of their own emissions on other devices (i.e., electromagnetic interference).

Arguably medical devices are the most important group of devices in need of high electromagnetic immunity, particularly those with life-saving capabilities such as pacemakers and implanted cardioverter defibrillators (ICD). The need for pacemakers and ICDs to operate correctly in the presence of external magnetic-field sources is of keen interest to medical device manufacturers; it is equally important to manufacturers, distributors, and users of inductively-coupled devices that these devices operate without a disruption to their proper function. The following brief discussion focuses on pacemakers, but other implantable and wearable medical devices, such as ICDs, cochlear implants, neurostimulators, wearable continuous glucose monitors, and wearable insulin pumps, are also of concern when considering EMC.

Pacemakers are electronic devices that are surgically implanted in patients to monitor and control irregularities in a patient’s natural heart activity. The two main functions of a pacemaker are sensing and controlling (i.e., pacing) heart rhythm. These functions involve using a pulse generator and lead wires that are configured as either unipolar (shown in Figure 2b) or bipolar (not shown). Typically, while in “sensing mode” the pacemaker monitors the patient’s heart activity through these lead wires. If only natural heart activity is present, the pacemaker will not enter the pacing mode, but if the patient’s heart rhythm is too slow or is interrupted, the pacemaker sends an electrical impulse to the heart to regulate the patient’s heartbeat.

Figure 2. a) X-ray showing pacemaker with lead and heart (left) and the location of the pacemaker with associated skin incision (right);

Modified from Seckler et al., 2015
Figure 2. b) A diagram of a unipolar pacing device, with an intracardiac cathode located on the lead tip in the right ventricle (“Tip”). The circuit is completed by the housing of the device, which forms the anode.

Electromagnetic interference with the function of a pacemaker from magnetic induction occurs when the magnetic field from an outside source passes through the loop formed by the pacemaker’s lead and the pacemaker’s housing. The potential for interference can be calculated by using Faraday’s law of induction (described above). Pacemakers are particularly susceptible to electromagnetic interference from magnetic induction because the leads of the pacemaker sense the very small levels of electrical activity within the heart and therefore small induced voltages can interfere with the proper functioning of a pacemaker. As shown in Figure 3, even a small amount of external interference induced onto the leads of a pacemaker can mask the cardiac rhythm being sensed, potentially interfering with the proper function of the pacemaker.

Figure 3. Illustration of the potential effect of electromagnetic interference on pacemaker function. A normal cardiac rhythm (top) experiencing a magnetic noise source (middle) can cause potential interference with the pacemaker functioning (bottom).

In general, the influence of electromagnetic interference on a pacemaker can be controlled to some extent by the patient. For example, if a patient is aware that a particular source has the potential to influence the pacemaker (information garnered through either their physician or the medical device manufacturer) then he or she can try to stay as far away as possible from the source, or can pass by the source quickly. The patient, however, has little or no control over the intrinsic properties of an electromagnetic source, such as the frequency of its operation, the modulation of the output signal, and power output.

Since there are factors that the patient cannot control, medical device manufacturers build safeguards into the design of pacemakers. These safeguards assure that the device continues to provide clinically acceptable therapy in the presence of typically-encountered levels of electromagnetic interference. In addition, pacemakers are designed to revert to a conservative mode of operation even if the pacemaker no longer senses how the heart muscle is functioning. In this state the pacemaker will provide pacing activity at a pre-determined fixed rate. Though a pacemaker may “fly blind” without its sensing function while in the presence of a source of electromagnetic interference, it is still under software control. This operation, where the pacemaker reverts to a limited but functional state during an interference event, is known as Noise Reversion or Safety Mode.

Since devices emitting magnetic fields are now so common in everyday life, they are often implicated in cases where a patient either had a medical incident or where a medical device malfunctioned; yet other factors need to be considered in a failure analysis, such as the influence of a patient’s overall health, the typical lifetime of a medical device, or known failure incidents of the medical device. Government resources (such as the Food and Drug Administration’s Manufacture and User Facility Device Experience [MAUDE] database) provide a way to locate information on the performance of a given device. If hundreds of thousands of devices have been implanted in patients throughout the United States over several years and no failure incidents related to electromagnetic interference have been reported, then it is important to consider other root causes for a failure. Medical devices are typically designed to operate safely in diverse electromagnetic environments, and manufacturers of devices that emit electromagnetic fields typically keep the intensity of emission as low as possible.

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What's Your Injury Again?

Lynette Pitt — Wed, 28 Jun 2017 15:54:12 GMT

The 4th Circuit Joins the Discussion on Standing in Data Breach Cases
by Patricia Heyen & Rolf Garcia-Gallont, Womble Carlyle Sandridge & Rice, LLP

While seemingly unrelated, Ashley Madison, eBay, Sony, and Target have one thing in common; they have all, at one point or another, lost control over their highly sensitive data due to a data breach.

As the number of reported data breaches reached an all-time high in 2016, federal courts have been grappling with the question of who should be considered a victim in the eyes of the law. To date, six circuits have addressed standing in the context of data breach litigation, with the Fourth Circuit most recently joining the discussion in Beck v. McDonald. In Beck, the Fourth Circuit held that the mere possibility that a plaintiff’s information may be misused as a result of a data breach is insufficient to establish standing.

Beck v. McDonald

In Beck v. McDonald, 848 F.3d 262 (4th Cir. 2017), the U.S. Fourth Circuit Court of Appeals affirmed the dismissal, for lack of subject-matter jurisdiction, of two putative class action claims against the William Jennings Bryan Dorn Veterans Affairs Medical Center (“Dorn VAMC”) and several individuals related to the Dorn VAMC.

The plaintiffs in the consolidated appeal were veterans who received medical treatment and health care at the Dorn VAMC in Columbia, South Carolina. Beck, 848 F.3d at 266. The medical center experienced two data breaches, the result of a medical center laptop and four boxes of pathology reports being misplaced or stolen. Id. The laptop contained unencrypted personal information of approximately 7,400 patients, including names, birth dates, the last four digits of social security numbers, and physical descriptors (age, race, gender, height, and weight). Id. at 267. The pathology reports contained identifying information of over 2,000 patients, including names, social security numbers, and medical diagnoses. Id. at 268.

Richard Beck and Lakreshia Jefferey filed suit on behalf of the approximately 7,400 patients whose information was stored on the missing laptop, and asserted claims under common-law negligence, the Privacy Act of 1974 (5 U.S.C. § 552a et seq.), and the Administrative Procedure Act (5 U.S.C. § 701 et seq.). Id. at 267. The plaintiffs alleged that the Dorn VAMC’s “failures” and “violations” of the Privacy Act caused them “embarrassment, inconvenience, unfairness, mental distress, and the threat of current and future substantial harm from identity theft and other misuse of their Personal Information.” Id. They further alleged that the threat of identity theft required them to purchase credit monitoring services, monitor financial statements, and move their financial accounts to different institutions. Id.

Beverly Watson filed the second suit on behalf of the approximately 2,000 patients whose pathology reports had gone missing. Id. at 268. She alleged the same harm as the Beck plaintiffs, and asserted similar claims for money damages, and declaratory and injunctive relief. Id.

The district court dismissed both suits for lack of subject-matter jurisdiction, holding that the plaintiffs lacked standing because they failed to establish that they had suffered an injury-in-fact. Id. at 268-69.

The Fourth Circuit’s Opinion

As a quick refresher, one of the “irreducible minimum requirements” that a plaintiff must establish to have standing to sue in federal court under Article III is an “injury in fact.” Id. at 269. “To establish injury in fact, a plaintiff must show that he or she suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical.” Id. at 270 (quoting Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016) (internal quotation marks omitted).

The district court in Beck granted the defendants’ motion to dismiss, holding that the plaintiffs lacked standing under the Privacy Act. Id. at 267-68. The district court pointed to the U.S. Supreme Court’s holding in Clapper v. Amnesty International USA, 133 S. Ct. 1138, 1155 (2013), and reasoned that as to the “certainly impending” standard (i.e., an allegation of future injury can support standing to sue only if the plaintiff can demonstrate that the injury is “certainly impending”), the plaintiffs’ fear of future harm was too speculative given that it was “contingent on a chain of attenuated hypothetical events and actions by third parties independent of the defendants.” Id. at 268. The district court concluded that the plaintiffs had “not submitted evidence sufficient to create a genuine issue of material fact as to whether they face a ‘certainly impending’ risk of identity theft.” Id.

The Fourth Circuit agreed, stating that the Beck plaintiffs failed to provide any “evidence that the information contained on the stolen laptop ha[d] been accessed or misused or that they ha[d] suffered identity theft . . . [or] that the thief stole the laptop with the intent to steal their private information.” Id. at 274. The Fourth Circuit held that the Watson complaint suffered from the same deficiency. Id. at 275. In sum, “the mere theft” of the laptop and pathology reports “without more, [did] not confer Article III standing.” Id.

Even as to the lesser “substantial risk” standard, (i.e., a plaintiff must show that there is a “substantial risk” that the harm will occur), the Fourth Circuit determined that the plaintiffs’ calculations that approximately 33% of those individuals whose information was stored on the laptop would have their identities stolen and that all individuals whose information was stored on the laptop would be 9.5 times more likely to experience identity theft was insufficient to establish a “substantial risk” of identity theft. Id.

Both the district court and the Fourth Circuit Court of Appeals relied on Clapper to determine what is required of a plaintiff to prove an injury-in-fact based on a threatened injury: the threatened injury must be “certainly impending,” or there must be a “substantial risk” that the harm will occur such that a party may reasonably incur costs to mitigate or avoid the harm. Id. at 272, 275.

Certainly Impending

The Fourth Circuit applied the “certainly impending” test for the first time in the context of a data breach case, and looked to the First, Third, Sixth, Seventh, and Ninth Circuits for guidance. See id. at 273-74 (citing Galaria v. Nationwide Mut. Ins. Co., No. 15–3386, 663 Fed.Appx. 384, 387–89, 2016 WL 4728027, at *3 (6th Cir. Sept. 12, 2016); Remijas v. Neiman Marcus Grp., LLC, 794 F.3d 688, 692, 694–95 (7th Cir. 2015); Krottner v. Starbucks Corp., 628 F.3d 1139, 1142–43 (9th Cir. 2010); Pisciotta v. Old Nat'l Bancorp, 499 F.3d 629, 632–34 (7th Cir. 2007); Katz v. Pershing, LLC, 672 F.3d 64, 80 (1st Cir. 2012); Reilly v. Ceridian Corp., 664 F.3d 38, 40, 44 (3d Cir. 2011)). Ultimately, the Fourth Circuit distinguished the facts of the case before it from those decided by its sister circuits, and provided some hints as to what evidence would establish “certainly impending” injury: specific misuse of the personal information and intent to steal the personal information. However, the Beck court emphasized that its decision does not require a plaintiff to show that the stolen information has already been misused—such evidence has merely proven to be sufficient before other courts in the past. See id. at 275.

Substantial Risk

With regard to the “substantial risk” standard, the court’s decision provides unclear guidance for future plaintiffs. While the court unambiguously held that the Beck plaintiffs’ calculations of increased risk did not amount to a “substantial risk,” the court also declined to set a numerical “floor.” See id. at 275-76. While plaintiffs will face some uncertainty when bringing data breach cases going forward, at the very least, plaintiffs can rely on the fact that calculations such as those put forth in Beck will not suffice.

Have You Been Injured (in the Eyes of the Fourth Circuit)?

Although the Fourth Circuit did not state so outright, its analysis in Beck strongly indicates that the “certainly impending” and “substantial risk” inquiry is fact-specific. Beyond the examples that can be culled from the cases discussed in the Fourth Circuit’s opinion, there is a broader question of when a data breach causes injury in real life, and what evidence a plaintiff can present to substantiate that injury.

Beck Examples

Standing

Probably No Standing

Maybe Standing

There is evidence of actual misuse or access to the personal information by the “data thief” (e.g., fraudulent charges on a credit card, or attempts to open a fraudulent account using a stolen social security number).

The data breach occurred 3-4 years ago, and no harm has occurred as a result.

The item that was stolen could have been stolen for reasons other than the sensitive data it contained.

The increased likelihood of becoming a victim of identity theft due to the data breach is 33% or lower.

The entity that held the sensitive information has offered to provide free credit monitoring. There is evidence that the “data thief” intentionally targeted the personal information compromised in a data breach.

There is evidence that the "data thief" intentionally targeted the personal information compromised in a data breach.

For example, HAVE I BEEN PWNED? (www.haveibeenpwned.com) is a website that aggregates personal account data that has been illegally accessed and then released into the public domain. By simply entering an email address or username, a visitor can know whether that account has been associated with a known breach, and what data was exposed in that breach, including names, genders, dates of birth, physical addresses, email addresses, usernames, passwords, password hints, security questions and answers, IP addresses, credit card numbers, and phone numbers.

If an individual’s data is picked up by the website, it is very likely that the “data thief” intentionally targeted that sensitive data in the attack—a fact that “sufficed to push the threatened injury of future identity theft beyond the speculative to the sufficiently imminent” in Galaria, Remijas, and Pisciotta. Id. at 274. Yet, if a plaintiff’s information is on the website, but there is no evidence of actual misuse, and the breach happened several years ago, it seems unlikely that the Fourth Circuit would find an injury in fact.

It is possible that reputational injury could suffice to show injury in fact. HAVE I BEEN PWNED? contains a subset of data relating to “sensitive breaches (such breaches are considered “sensitive” in that someone’s presence on the website may adversely impact them if that information became public). Ashley Madison, an online dating service marketed to people who are married or in committed relationships, is considered one of these “sensitive” websites. Even if the Ashley Madison breach had happened five years ago, and there was no evidence of actual misuse of private information, the reputational and marital injury caused by the mere revelation of membership could potentially constitute an injury in fact.

As a final hypothetical, imagine that the compromised information consists of an email address, a hashed password, and a password hint. The potential for injury in such a case is magnified by the fact that individuals tend to use the same email address and the same or similar password across many sites. Indeed, a common method of gaining unauthorized access to an online account is called a “brute-force attack,” where an attacker tries many different passwords until the correct password is found. The number of guesses needed in a brute-force attack is greatly reduced if the attacker has a hint, or the hash used to obscure the actual password is not very strong. If the hypothetical owner of the compromised information can prove that there were multiple login attempts on websites where he/she uses the same email address (an indication of a brute-force attack), would that be enough evidence of actual misuse? Like the plaintiffs in Beck, we will have to wait and see what happens.

This article originally appeared in Volume 7, Issue 1 – May 2017 of "The Middle Ground", the publication of the Federal Bar Association - Middle District of North Carolina Chapter. Reprinted with authors permission.

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Subcontract Agreement Trumps Policy Language in Additional Insured Coverage Dispute

Lynette Pitt — Fri, 28 Apr 2017 13:05:00 GMT

by William Silverman, Wall Templeton & Haldrup, PA

Effective risk transfer in the construction industry is critical. So when an opinion comes out broadening that horizon, practitioners should take note. A recent federal court decision in an additional-insured coverage action opens a new door in North Carolina for construction risk transfer by holding that the construction parties’ contract trumps the language of the insurance policies to determine priority of coverage.

Continental Casualty Company v. Amerisure Insurance Company1 arose from a dispute about coverage under a sub-subcontractor’s CGL and umbrella policies for serious personal injuries sustained during a construction project in Charlotte. The general contractor on the project, KBR Building Group, LLC (“KBR”), entered into a subcontract with SteelFab, Inc. (“SteelFab”) to supply and erect the structural steel for the project. SteelFab then subcontracted with Carolina Steel and Stone, Inc. (“CSS”) for the erection of structural steel. During the project, an employee of CSS fell from steel decking and suffered serious injuries.

Under the policy chain for the project, KBR was an additional insured on SteelFab’s CGL policy with Continental Casualty. SteelFab and KBR also were additional insured on CSS’s umbrella and CGL policies with Amerisure. When the injured employee filed suit, the risk transfer line dance kicked into gear. KBR tendered its defense to SteelFab’s carrier, Continental Casualty. Continental Casualty in turn tendered to CSS’s carrier, Amerisure.

Amerisure admitted that SteelFab and KBR qualified as additional insured under the CSS policy, but noted the owner on the project in question had an owner controlled insurance program (“OCIP”) in place. Amerisure’s policy contained an exclusion for damages arising out of the named insured’s operations when included in an OCIP2. Amerisure thus determined that coverage was excluded and, accordingly, denied that it had any duty to defend SteelFab or KBR.

Continental Casualty stepped in to defend KBR and SteelFab in the personal injury suit upon Amerisure’s denial, incurring more than $650,000 in defense costs, and resolving the case for $1.7 million. As part of the settlement agreement, Continental Casualty preserved its rights to pursue indemnification and/or contribution from Amerisure, and filed a declaratory judgment action to establish that:

- Amerisure owed a duty to defend SteelFab and KBR in the personal injury suit;

- the Amerisure policies applied on a primary and non-contributory basis; and

- Continental Casualty was entitled to reimbursement of all defense costs and expenses incurred in connection with the personal injury suit (i.e., equitable subrogation).

Both Continental Casualty and Amerisure eventually filed cross-motions for summary judgment in the declaratory judgment action on all issues. Judge Graham Mullen presided over these motions and ruled as follows:

1. Duty to Defend

There was no real dispute that Amerisure’s duty to defend SteelFab and KBR was triggered in the personal injury suit. Amerisure admitted that SteelFab and KBR were additional insured under the CSS policies, and the complaint in that suit alleged damages because of personal injury caused by an occurrence. Nonetheless, Amerisure argued that the plain language of the OCIP Exclusion (i.e., bodily injury arising out of CSS’s operations included in an OCIP) applied to exclude coverage.

The fallacy in Amerisure’s position, however, was that CSS was not enrolled in the OCIP on the project – a fact of which Amerisure was aware when it denied a defense to SteelFab and KBR. There was inarguably an OCIP in place on the project, and CSS was eligible to be enrolled in the OCIP. Amerisure contended that the OCIP exclusion should apply to bar its duty to defend because its named insured (CSS) was eligible to be enrolled and should have been enrolled in the OCIP.

In his opinion, Judge Mullen conceded that there may be an issue of fact as to whether CSS was eligible to be enrolled and should have been enrolled in the OCIP, but nevertheless rejected Amerisure’s position. He noted that when determining whether an insurer has a duty to defend in North Carolina, the insurer must accept as true all allegations in the complaint, and also must consider reasonably available facts outside the four corners of the pleading that could be covered by its policy3. An insurer, however, may not consider extrinsic facts to defeat a duty to defend4. The complaint in the personal injury suit made no mention of insurance, much less any OCIP in place on the project. Judge Mullen thus held that Amerisure breached its duty to defend SteelFab and KBR because Amerisure could not establish an element of its OCIP Exclusion (that CSS’s operations were included in an OCIP) based solely on the allegations of the personal injury complaint and could not otherwise rely on facts outside the pleadings to establish the application of an exclusion5.

2. Priority of Coverage

Since coverage was established6 and the amount of the personal injury settlement was more than either of the CGL policy’s limits standing alone, the next issue was the order of coverage – which policies were primary and which were excess. In a novel ruling under North Carolina law, Judge Mullen determined that the contract between CSS and SteelFab governed the priority of coverage, not the language of the insurance policies themselves.

Amerisure argued that even if its policies did provide coverage, that its primary coverage was limited to $1,000,000 (the limits of its CGL policy) and that its umbrella policy was excess over Continental Casualty’s primary policy. In other words, Amerisure’s proferred coverage sequence was: (1) Amerisure CGL ($1M limits); (2) Continental Casualty CGL ($1M limits); then (3) Amerisure umbrella. Conversely, Continental Casualty argued that all of Amerisure’s coverage should be primary, and that its coverage should sit excess to the combined limits from Amerisure’s CGL and umbrella policies.

Judge Mullen first looked at the subcontract between SteelFab and CSS before turning to the policies’ language. The subcontract required CSS to procure both CGL and umbrella insurance with $1,000,000 limits each. The subcontract included an express requirement that CSS would provide insurance that was primary and non-contributory to SteelFab’s insurance program. A Certificate of Insurance issued to SteelFab identifying CSS’s coverage with Amerisure also provided that “coverage is written on a primary basis.” The language in the umbrella policy also plainly provided coverage to SteelFab and KBR as additional insured.

Amerisure argued that the “Other Insurance” provisions in its umbrella policy and Continental Casualty’s CGL policy should govern priority of coverage instead of the subcontract language.7 Amerisure argued these competing clauses made its umbrella excess (only providing coverage after the Continental Casualty CGL policy’s limits were exhausted). Judge Mullen agreed with Amerisure that the language of the “Other Insurance” clauses in the competing policies would make Amerisure’s umbrella policy excess over the Continental Casualty primary policy, but ruled the subcontract language trumped this “Other Insurance” clause analysis to make Continental Casualty’s policy excess.

Judge Mullen premised his decision on the rationale that SteelFab should be entitled to the benefit of its bargain with CSS. SteelFab contracted for protection in the form of $2,000,000 in primary insurance coverage from CSS before its own insurance would be tapped. Judge Mullen held that, because the SteelFab/CSS subcontract evidenced the intent of the parties, that language dictated the priority of coverage notwithstanding insurance policy language to the contrary.

Interestingly, Judge Mullen’s determination was not based on any indemnity agreement between CSS and SteelFab8, although the cases cited in support of his decision all include analysis of a contractual indemnity agreement between the insureds as part of the reasoning for shifting the loss to the downstream subcontractor’s insurance carrier.9

Conclusion

The primary lesson of Continental Casualty v. Amerisure is the importance of careful contract drafting. The explicit risk-transfer terms in the SteelFab/CSS subcontract were central to the end result. The specificity of the insurance requirements created a clear picture of the parties’ intent regarding risk allocation, and Judge Mullen deferred to that arrangement. This decision presents a novel approach to determining priority of coverage in North Carolina, and could create a headache for insurance underwriters given the difficulty in quantifying risk of incurring losses beyond the scope of coverage created by insurance policy language. It will be interesting to see whether the North Carolina state courts follow suit when given the opportunity. Amerisure has appealed this decision to the Fourth Circuit, so an update may be warranted once the appellate process is complete.10

Continental Casualty v. Amerisure also reinforces the sanctity of the duty to defend in North Carolina. North Carolina courts, both state and federal, jealously guard the insured’s right to a defense from its insurer, and this decision exemplifies that zeal. But Judge Mullen’s decision also reflects the absence of any real deterrent for a carrier to deny coverage to a putative additional insured where that party’s own insurer has agreed to defend. While Amerisure was found to owe indemnity for the settlement and had to reimburse half of the defense costs to Continental Casualty, it would have presumably incurred those losses anyway had it accepted the tender in the first place.11 Other than the loss of control of defense and settlement in the underlying suit, Amerisure’s only penalty here is the imposition of pre-judgment interest. Both this decision and the Rodgers Builders decision from last year may encourage upstream carriers to go to the mattresses on additional insured issues going forward, especially in the Western District.12

_________________

13:14CV529-GCM, --- F. Supp. 3d ---, 2017 WL 34822 (W.D.N.C. Jan. 3, 2017).

2The actual exclusion read: "This insurance does not apply to 'bodily injury' or 'property damage' arising out of either your ongoing operations were at any time included within the 'products-completed operations hazard' if such operations were at any time included within a 'controlled insurance program' for a construction project which you are or were involved."

3Waste Mgmt. of Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 691, 340 S.E.2d 374, 377 (1986).

4Judge Mullen explained: "an insurer may look to facts collateral to the allegations against the policyholder to confirm a defense obligation, but no to negate one." 2017 WL 34822, *5 (emphasis in original) (citing St. Paul Fire & Marine Ins. Co. v. Vigilant Ins. Co., 724 F. Supp. 1173, 1179 (M.D.N.C. 1989), aff'd 919 F.2d 235, 239 (4th Cir. 1990)).

5See New NGC, Inc. v. Ace Am. Ins. Co., 105 F. Supp. 3d 552, 568 (W.D.N.C. 2015) ("Permitting evidence outside the pleadings to negate allegations in the complaint is akin to a perfunctory review of the merits of the underlying claims against the insured. Such review is not consistent with the duty to defend as understood by the insured party and as explained by North Carolina law pertaining to the interpretation of contracts for insurance.")

6Because Amerisure breached its duty to defend, Judge Mullen held that it relinquished any coverage defenses and was liable for the costs of defense and settlement paid on behalf of SteelFab and KBS. 2017 WL 34822, *6 (citing Vigilant, 919 F.2d at 240).

7There is North Carolina authority applying competing "Other Insurance" clauses to determine priority of coverage for an additional insured. See Universal Ins. Co. v. Burton Farm Dev. Co., LLC, 216 N.C. App. 469, 479, 718 S.E.2d 665, 672 (2011). The Burton Farm decision, however, was in the context of two competing primary CGL policies. The author is not aware of any North Carolina precedent addressing priority of coverage under facts analogous to this case.

8Judge Mullen expressly refrained from addressing the impact and enforceability of the indemnity clause in the subcontract because he found the plain language of the subcontract and the umbrella policy shifted the entire loss to Amerisure. 2017 WL 34822, *9 n.5.

9E.g., St. Paul Fire & Marine Ins. Co. v. Am. Int'l Specialty Lines Ins. Co., 365 F.3d 263 (4th Cir. 2004) (applying Virginia law); Wal-Mart Stores, Inc. v. RLI Ins. Co., 292 F. 3d 583 (8th Cir. 2002): Am. Indem. Lloyds v. Travelers Prop. & Cas. Ins. Co., 335 F. 3d 429 (5th Cir. 2003).

10Continental Casualty has filed a cross-appeal concerning Judge Mullen's ruling (not discussed above in the interest of brevity) that it was only entitled to a pro-rata reimbursement of its defense costs from Amerisure through a contribution claim. Continental Casualty alleged equitable subrogation, and not contribution, for recovery of all defense costs based on the theory that Amerisure's coverage was primary and non-contributory. Continental Casualty would have no duty to defend until exhaustion of underlying primary coverage if it truly sat excess, so contends it should be entitled to complete reimbursement for defense costs.

11In dicta, Judge Mullen explains in his decision why Amerisure's proposed interpretation of its OCIP Exclusion supporting its denial would render its coverage meaningless. 2017 WL 34822,*6-*7. Accordingly, it appears that there would have been coverage under Amerisure's policy(ies) even if it had accepted SteelFab's and KBR's tender and pursued its coverage defenses.

12See Rodgers Builders, Inc. v. Lexington Ins. Co., No. 3:15CV110-MOC-DSC, 2016 WL 1052623 (W.D.N.C. Mar. 11, 2016), appeal dismissed (Sept. 14, 2016) (finding coverage for general contractor as additional insured under subcontractor's CGL, coverage even where no formal legal claim was asserted by the project owner).

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Fiduciaries in NC Now Have a Duty to Identify & Explain Arbitration Agreements in Contracts

Lynette Pitt — Mon, 27 Mar 2017 20:30:00 GMT

by Michael W. Mitchell & Andrew P. Atkins, Smith Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP

The Supreme Court of North Carolina recently held that a doctor owed a fiduciary duty to a prospective patient prior to the formation of a doctor-patient relationship. The existence of that duty—previously unrecognized in North Carolina—allowed the Court to invalidate an arbitration agreement in the contract with the patient. The Court’s decision seems to redefine the law of fiduciary duty. And the scope of the Court’s decision necessarily reaches beyond arbitration agreements, and therefore could call into question the enforceability of other types of contract provisions whenever one party alleges the existence of a fiduciary duty.

In King et al. v. Bryant, et al.1 a patient in need of a medical procedure filled out and executed routine patient intake forms prior to treatment. Among those forms was an agreement to arbitrate any disputes arising out of the doctor’s medical treatment. The forms stated that execution of the arbitration agreement was not a prerequisite to medical treatment. After completing the forms, Mr. King, the patient, and Dr. Bryant, the doctor, formed a doctor-patient relationship. Dr. Bryant then performed the needed medical procedure; however, the procedure did not go well and Mr. King suffered complications and alleged injuries as a result. When Mr. King filed litigation in state court, Dr. Bryant moved to stay the litigation and enforce the arbitration agreement. While there was much procedural history, the primary question before the Supreme Court was whether the arbitration agreement was enforceable against Mr. King.

Typically, the enforceability of an arbitration agreement turns on an analysis of procedural and substantive “unconscionability.”2 However, here the Court departed from the typical analytical framework, stating “this case hinges upon the nature of the relationship that existed between Mr. King and Dr. Bryant at the time that the arbitration agreement was signed.” Notably, the Court did not focus on whether a doctor-patient relationship existed; rather, the Court looked at whether a fiduciary relationship existed separate and apart from the doctor-patient relationship. The Court held that a relationship of trust and confidence existed between the parties prior to the formation of the doctor-patient relationship, and therefore Dr. Bryant owed a duty to disclose all materials facts to Mr. King before he signed the agreement.

The Court relied on the fact that Mr. King “demonstrated sufficient trust and confidence in [Dr. Bryant] to provide Dr. Bryant with confidential medical information” before the doctor-patient relationship was formed, even though Mr. King provided that medical information contemporaneously with his execution of the arbitration agreement. Thus, according to the Court, if Dr. Bryant failed to disclose all material facts to Mr. King, and in so doing Dr. Bryant received a benefit from his nondisclosure, then he would have breached his fiduciary duties and committed constructive fraud.

The Court in fact held that was the case: Dr. Bryant breached his fiduciary duty to Mr. King, and therefore the arbitration agreement was unenforceable. The Court explained that no one directed Mr. King’s attention to the arbitration agreement, which was included in a stack of other documents, or attempted to explain the ramifications to him. While the Court noted that Mr. King never read the documents, it also seemed persuaded by the fact that he had limited education and experience interpreting legal documents.

The Court further held that Dr. Bryant breached his fiduciary duty for the purpose of obtaining dispute resolution procedures to his benefit. Curiously, the arbitration provision in the agreement did not favor either party to the agreement, and yet the Court did not find this fact to be relevant in the analysis of whether there was a breach of fiduciary duty. If Mr. King had received a benefit of equal value to Dr. King’s, then how could Mr. King have suffered harm that would give rise to a claim that invalidated the arbitration agreement?

The Court’s holding in King appears to presume, as a general proposition, that a bilateral right to arbitrate is nevertheless a benefit to only one of the parties, in this case the professional. Precedent from the United States Supreme Court, however, disapproves of an analysis that looks at whether one party benefits more than the other from arbitration.

In Concepcion, the United States Supreme Court considered an arbitration agreement that restricted class actions in arbitration.3 The Court in Concepcion recognized that such a restriction could benefit one party over the other, and the Court referenced arbitration provisions that do not provide for judicially-monitored discovery as another example.4 But the Court did not find unequal benefits to be a proper subject of consideration, even if it falls within the confines of a generally-applicable state law unconscionability analysis, because it simply is not compatible with the Federal Arbitration Act (the “FAA”).5 The primary purpose of the FAA is to “promote arbitration.”6 Accordingly, state law theories that “stand[] as an obstacle to the accomplishment and execution of the full purposes and objectives” of the FAA are necessarily preempted.7

Two justices dissented in King, arguing that the majority had abandoned the Court’s traditional unconscionability analysis, that it had failed to understand how a fiduciary relationship is formed, that it had failed to acknowledge the preemptive effect of the FAA, and that it had mischaracterized arbitration as a benefit to only one of the parties to the agreement. One of the dissents noted that, even if this arbitration agreement favored Dr. Bryant, contracts of adhesion with arbitration agreements often favor one party over the other, and yet they are enforceable under the FAA. The dissent also noted that any contrary analysis necessarily takes issue with the arbitration agreement itself, simply because it is an arbitration agreement. The other dissent even characterized the majority’s opinion as merely a “rationalization” of state law to avoid arbitration. In sum, both dissents take the position that the majority’s state law analysis necessarily applies in a way that would disproportionately affect arbitration agreements and, therefore, such an analysis is preempted by the FAA.

The Court’s decision raises a significant risk that existing arbitration agreements could be unenforceable. The decision even has implications outside the arbitration setting, because it could just as easily apply to other types of contractual provisions. In fact, the Court expressly stated that its legal analysis would apply to other contractual provisions, not just arbitration agreements. The Court was essentially required to make this holding to avoid the reach of federal preemption under the FAA, which permits invalidation of arbitration agreements only under “generally applicable contract defenses” that also apply outside of the context of arbitration agreements.8

In situations where a fiduciary relationship could be alleged, parties must now give careful consideration to whether they should adopt additional procedures to ensure that their contractual agreements are properly executed and still enforceable. While this process will be most important in the context of arbitration provisions between professionals and their prospective clients/patients, by necessity the Court’s holding extends equally to other types of contract provisions. The Court offers no guidance as to what provisions, other than arbitration agreements, would reach the threshold of such significance that they must be disclosed and/or explained. The Court also offers no guidance as to how the other party’s level of sophistication or experience should affect the fiduciary’s obligations. Undoubtedly, these issues will be the subject of additional litigation.

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1 __N.C.__, 795 S.E.2d 340 (2017)
2 See, e.g., Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93, 655 S.E.2d 62 (2008)
3 See AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 341-42, 131 S.Ct. 1740, 1747-48
4 Id. at 342-44, 131 S. Ct. at 1747-48
5 See id.
6 Id. at 346, 131 S. Ct. at 1749.
7 Id. at 352, 131 S. Ct. at 1753.
8 Id. at 349, 131 S. Ct. at 1746.

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So You've Landed a Firm Job? Five Tips for Surviving Your First Year

Lynette Pitt — Sun, 29 Jan 2017 20:30:00 GMT

by Shantia J. Coley, Hedrick Gardner Kincheloe & Garofalo, LLP

I wish I could say it seemed like just yesterday that was offered and accepted my position at the law firm of Hedrick Gardner Kincheloe and Garofalo. However, the year didn’t just “fly by.” Instead, it inched by in tenths of an hour, slowly and methodically. Do not get me wrong, working at a law firm at some point in their careers is the dream of most young attorneys. I was, and still am, no different. Maybe it’s the millennial in me, but as a person who has governed her life and found success based upon countless checklists, sometimes scribbled haphazardly on the nearest dinner napkin, I almost wish I’d had one as I entered my first year. I’ve been here slightly over a year and now that I am a veteran, (it’s okay to laugh here), I pulled together my very own list of the five tips I wish I had known:

1. Decorate Your Office Space. While this first tip may seem trivial and a waste of time, your office will become your second home. The four walls of your office will become very familiar to you and you may find that you undoubtedly spend more time there than at your own home. Be kind to this space and make it your own. Grace this area with photos, sports memorabilia, paintings, or whatever it is that you choose to make it a comfortable space to work. Think back to law school and how by the end of your 3L year, you had mastered the art of learning your study habits. You knew exactly where in the school, at your home, or at your local coffee shop was the most comfortable for you. Well you don’t necessarily get to choose your office space, but you do get to make it your own, much like the spaces you were used to. A quick word of caution-- please check with the office managers before you go hammering nails into the walls. I’m sure there are policies and people who can guide and assist you when it comes to deciding how to turn your office into the perfect place to perform your best.

2. The Other Young Associates Are Your Best Friend. Seriously. You cannot count on the partners to be at your beck and call and to answer every question you have. Simple as that. Ideally, they would have countless expendable hours to dedicate to answering questions and problem solving, but between maintaining client relationships, handling their own work load and firm management, this is just not possible. Chances are that question about interpreting that particular statute has already crossed the mind of another young associate and they have either figured it out or found a seasoned associate to assist. Another important relationship to foster is your relationship with the staff. Remember the office manager who helped you hang your credentials? Or the paralegal who showed you where the restroom was? Well most of them have been there as long as some of the partners and can assist with issues dealing with office procedure, protocol and getting you otherwise adjusted to the firm culture. The partners are certainly important, but do not take these other relationships for granted.

3. Save Samples of Everything! So you’ve drafted your first set of discovery or an important motion and sent it to a partner for review. You’ve gotten it returned filled with tracked changes and comments in the margins. You’ve accepted the changes, made revisions based upon the comments and after several hours, it is finally ready to go. Congratulations! Send it out and file a copy away for your own personal reference. By the time next week rolls by and you’ve been distracted by other tasks, you will not remember many of substantive considerations that went into the preparation of this task. You’re still trying to locate the bathrooms at this point anyway. I found it very helpful to keep a small folder of “samples” of various final documents for quick reference. What was the appropriate objection again? What was the language in the Order? What language did this particular partner prefer I use? Well, instead of wasting precious billable hours trying to remember, (trust me that 0.2 will make a difference later), I have found it extremely valuable to just be able to flip through my file to find the answer.

4. Lunch At Your Desk Is The New Normal. This one took some getting used to. Billing is no fun but it is a necessary evil (as we will discuss next). If you semi enjoy your weekends or evenings, a few sacrifices will need to be made. If you’re a “foodie,” like me, this one may be a bit difficult. Lunch for many is the one trusted time to break up the monotony of the day. However, taking lunch away from my desk each day quickly added up to lost time and later days at the office. Let’s take a minute and do the math. An hour for lunch each day for one month is 20 hours. That computes to 240 hours of potentially billable time each year. I’m not saying never take a lunch away from your desk. In fact, a lunch away once or twice a week is probably necessary for balance. But when the reports come in and you’re faced with trying to figure out where to capture an extra hour or so every day, having a working lunch sure beats trying to bill while watching your favorite football game later in the evening.

5. Billing Is An Art, Plain and Simple. Finally, billing is not fun and is also not as easy as you may initially think. Figuring out how to bill will probably take more time during your first year than the actual practice of law. Work closely with the partners to master this art. Ask questions of others about what they bill for and what they don’t. You will learn quickly that clients don’t just love paying invoices and will cut time for things they feel are unsubstantiated or unnecessary. I cannot express the importance of learning your clients and learning the style of the partners for whom you are working. It will probably take several months, but you want to invest time on the front end so you can then begin to increase your hours. Do not be ashamed to turn in a “time sheet” each day. I worked closely with a partner and did just this. I have to admit, I cringed when they were returned the next day with comments and edits, but it has paid off and as an added bonus, there is a level of trust that has been developed with that partner and my time entries.

Well, there you have it. These are without a doubt my five top tips for someone entering their first year at a law firm. You will get tons of advice, but hopefully you will remember some of these tips as well. I’ve experienced a rollercoaster of emotions this past year, however, I can genuinely say that the reward is great. Your new opportunity is not one afforded to all. Hang in there, you got this, and don’t forget to pack a delicious lunch!

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Driving Is a Non-Delegable Duty – Automated Vehicle Technologies Do Not Change North Carolina Product Liability Law

Lynette Pitt — Tue, 24 Jan 2017 16:00:00 GMT

by Patrick Cleary, Bowman & Brooke, LLP

News articles about self-driving vehicles are omnipresent as 2017 begins, suggesting that humans will soon no longer need to worry about driving. If technological and infrastructure advances occur at their predicted pace, automated vehicle technologies will assist, supplant and possibly replace human drivers over the next twenty years. This paradigm shift creates the real promise for dramatically reduced motor vehicle accidents and associated fatalities, injuries and damages.

But it also creates the real possibility that the plaintiffs' bar will shift their focus from assigning fault to the driver of accident vehicles to the manufacturers of vehicles involved in accidents. In effect, the plaintiffs' bar will argue that the manufacturer of any vehicle equipped with automated driving technologies is liable when said vehicle has an accident. For example, while the National Highway Traffic Safety Administration ("NHTSA") concluded last week that Tesla's Autopilot system did not have a safety-related defect that contributed to a fatal 2016 accident in Florida, it is not a stretch to think that the plaintiffs' bar would make a different argument that vehicles with autopilot systems are "strictly" responsible.(1)

We expect the plaintiffs' bar to argue that the introduction of automated driving technologies, regardless of form or function, mean that the vehicle itself has the ultimate control over what happens on the roadway. To put it simply, the North Carolina plaintiffs' bar will argue the doctrine of last clear chance will shift from the negligent driver to the motor vehicle manufacturer, opening up new avenues of recovery for injured drivers from their vehicle manufacturer.

If the plaintiffs' bar prevails, it would be a dramatic shift in North Carolina product liability law, creating a quasi-strict liability regime and a repudiation of contributory negligence outside of legislative enactment. But this argument presents a false dichotomy between automated and non-automated vehicles and ignores well-established doctrines of personal responsibility inherent in North Carolina law.

This article clarifies the development and introduction of automated vehicle technologies and then evaluates these technologies within the context of North Carolina product liability law. As a defense bar, we have the obligation to rebut plaintiffs' arguments, showing that automated vehicle technologies do not replace the duty of a driver nor do they supplant North Carolina product liability law.

Development of Automated Vehicle Technologies

Motor vehicles have not and will not immediately shift from completely human controlled to fully autonomous. Instead, motor vehicles will transition from fully human controlled to human controlled but machine assisted, to machine controlled in certain locations then possibly fully automated. An example of this shift was discussed by Dr. Gill Pratt, Toyota Research Institute CEO at the January 2017 Consumer Electronics Show. (2)

For a more detailed description of this transition, in September 2016, NHTSA released the Federal Automated Vehicles Policy. (3) In the Policy, NHTSA differentiates vehicles on "who does what, when" by adopting the SAE Levels of Automation. There are six distinct levels of automation:

At SAE Level 0, the human driver does everything;

At SAE Level 1, an automated system on the vehicle can sometimes assist the human driver conduct some parts of the driving task (an example is vehicle equipped with cruise control);

At SAE Level 2, an automated system on the vehicle can actually conduct some parts of the driving task, while the human continues to monitor the driving environment and performs the rest of the driving task (an example is dynamic cruise control or some types of electronic stability control);

At SAE Level 3, an automated system can both actually conduct some parts of the driving task and monitor the driving environment in some instances, but the human driver must be ready to take back control when the automated system requests (the Tesla auto-pilot system is at this level);

At SAE Level 4, an automated system can conduct the driving task and monitor the driving environment, and the human need not take back control, but the automated system can operate only in certain environments and under certain conditions (vehicles at Level 4 could control themselves on dedicated roadways); and

At SAE Level 5, the automated system can perform all driving tasks, under all conditions that a human driver could perform them.

There are no commercially available levels for sale at SAE Levels 4 or 5. Indeed, the vast majority of vehicles for sale today are SAE Level 1 or 2 vehicles; vehicle automated driving technologies simply assist the driver. And these technologies have been installed on vehicles for an extended period of time, helping drivers safely control their vehicle on the road. What this means is nothing new. Human drivers have the obligation and responsibility to monitor and control the vehicle – there are no vehicles currently available where the driver can abrogate this responsibility to the vehicle itself.

North Carolina Product Liability Law and Automated Vehicles

North Carolina product liability statutes and case law confirm tried and true principles: there is no strict liability in tort, manufacturers must exercise reasonable care in designing and manufacturing their products, product users must exercise reasonable care and contributory negligence is a complete defense to product liability causes of action. N.C. Gen. Stat. §99B-1.1 (“There shall be no strict liability in tort in product liability actions.”); Smith v. Fiber Controls Corp., 300 N.C. 669, 678, 268 S.E.2d 504, 509–10 (1980); N.C. Gen. Stat. §99B-4(3). See also Nicholson v. Am. Safety Util. Corp., 346 N.C. 767, 773, 488 S.E.2d 240, 244 (1997) (noting that the statute “does not create a different rule for products liability actions; it clarifies the common law contributory negligence standard with respect to these actions.”); These tried and true principles provide clear guidance to manufacturers, litigants and the courts when motor vehicle product liability actions occur.

In particular, contributory negligence limits the ability of injured drivers to recover from a vehicle manufacturer. Unlike in many other jurisdictions, injured North Carolina drivers cannot use the doctrine of strict liability to seek recovery from their vehicle manufacturer. These statutory limitations on recovery are consistent with North Carolina tort and product liability law, and ensure that recovery does not occur when a driver fails to exercise reasonable care.

As discussed above, the current introduction of automated vehicle technologies does not replace the need for a driver's reasonable care, but assist the driver in exercising that reasonable care. Any other argument misrepresents North Carolina law and the current status of automated vehicle technologies.

Conclusion

North Carolina's tried and true doctrines of contributory negligence, personal responsibility and reasonable care do not change because of autonomous vehicles and driver assistance technologies. Motor vehicle drivers have the firmly established responsibility to control their vehicles with reasonable care. While automated vehicle technologies will prevent accidents and reduce harm, they do not excuse or replace a driver's non-delegable duty to control their vehicle. The defense bar has an obligation to challenge plaintiffs' attempts to circumvent these tried and true doctrines in motor vehicle accident litigation involving vehicles equipped with automated vehicle technologies.

Endnotes:

(1) https://static.nhtsa.gov/odi/inv/2016/INCLA-PE16007-7876.PDF. Of note, NHTSA classified the Tesla Autopilot as "the Autopilot system is an Advanced Driver Assistance System (ADAS) that requires the continual and full attention of the driver to monitor the traffic environment and be prepared to take action to avoid crashes."

(2) http://corporatenews.pressroom.toyota.com/releases/2017-ces-press-conference-pratt.htm

(3) https://www.nhtsa.gov/technology-innovation/automated-vehicles

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Recent Court Opinions about Privilege Impact Litigation, Business, and Real Estate Practice in North Carolina

Lynette Pitt — Mon, 23 Jan 2017 19:00:00 GMT

by Bradley C. Friesen, Bell Davis & Pitt

In 2016, the North Carolina Court of Appeals issued three opinions that clarify aspects of the attorney-client privilege. They provide helpful refreshers on the basics of attorney-client privilege, as well as guidelines and warnings for how to maintain the privilege during litigation. Additionally, the Federal District Court for the Western District published an opinion about privilege in the context of real estate transactions, which seems to conflict with the view of many real estate practitioners.

The starting point for discussion of these cases is a review of the elements of attorney-client privilege. The privilege protects attorney-client communications from disclosure, thereby promoting full and frank communications between attorney and client. It arises under the following circumstances: (1) the relation of attorney and client existed at the time the communication was made, (2) the communication was made in confidence, (3) the communication relates to a matter about which the attorney is being professionally consulted, (4) the communication was made in the course of giving or seeking legal advice for a proper purpose, although litigation need not be contemplated, and (5) the privilege has not been waived.(1)

Friday Investments v. Bally Total Fitness: No Joint Defense or Common Interest Protection for Indemnity Relationship Arising from Asset Sale Agreement.

In Friday Investments, LLC v. Bally Total Fitness of the Mid-Atlantic, Inc.,(2) the Court of Appeals held that communications between indemnitee and indemnitor did not qualify for privilege under the joint defense or common interest doctrine. This doctrine extends the attorney-client privilege to persons outside of the attorney-client relationship when they “(1) share a common interest; (2) agree to exchange information for the purpose of facilitating legal representation of the parties; and (3) the information must otherwise be confidential.”(3)

This case arose from a lawsuit for back rent under a commercial lease. Friday Investments was the landlord and Bally was the tenant. Before the claims accrued, Bally sold its assets, including its rights under the lease. The asset purchase agreement included the following indemnification provision:

“[Purchaser agrees to] defend, indemnify, and hold [Bally] … harmless of, from and against any [l]osses incurred … on account of or relating to … any Assumed Liabilities, including those arising from or under the [lease] after closing.”

After Friday Investments filed suit, the purchaser agreed to provide a defense for Bally under the indemnification provision.

The plaintiff took the deposition of Bally’s general counsel. During the deposition, the plaintiff’s counsel asked Bally’s general counsel to describe “all of the conversations” after the lawsuit was filed that he personally had with the purchaser—i.e., the entity providing the defense and indemnity for Bally. Attorney-client privilege was asserted. The trial court later granted the plaintiff’s motion to compel the answers, and denied Bally’s motion for a protective order. Bally appealed.

The Court of Appeals held that the joint defense or common interest extension of the attorney-client privilege was limited to relationships formed primarily for the purpose of indemnification, like an insurance contract, or for coordination among parties in common litigation.(4) The Court held that the asset purchase agreement in this case arose out of a business relationship, and that the indemnity provision was ancillary to the business purposes of the parties. (5) The Court further distinguished the indemnity provision at issue from an insurance contract by noting that it did not allow the indemnitor any right to settle or effect the outcome of the litigation, further emphasizing its business purpose.

This rationale begs an important question: when would an indemnification provision in an asset purchase agreement be invoked, except in the “non-business” context of litigation? Additionally, while the indemnitor in this case lacked a contractual right to settle the litigation, it was paying for the defense and any ultimate judgment, which would seem to give it a stake in the outcome sufficient to warrant the right to be informed about the shape and strategy for the litigation without having to reveal it to the plaintiff. The North Carolina Supreme Court granted discretionary review for this case on December 8, 2016, so further clarification about this issue is likely.

Berens v. Berens: A Litigant’s Friend became her Agent to Help with Litigation, thereby Preserving Confidentiality and Privilege.

Berens v. Berens (6) is a family law case in which the plaintiff-husband subpoenaed communications between the defendant-wife and her friend, who was helping her with the case, as well as communications between the wife’s attorney and the friend. Ordinarily, the presence of a non-client or non-attorney during a communication destroys the confidentiality of the communication, and therefore, the privilege. However, the wife asserted that her friend, although not the wife’s attorney, was her “agent and personal advisor to specifically assist her in this litigation.”(7)

At the beginning of the friend’s involvement, and before any privilege dispute arose, the defendant and her friend formalized this principal-agent relationship in a written “Confidentiality Agreement and Acknowledgement of Receipt of Privileged Information.” The agreement provided (1) express authority for the friend to act as agent for the wife (2) subject to the wife’s control.(8) The agreement also provided that the friend-agent would “limit her communications concerning the Client’s litigation … to Client and Client’s attorneys and they [sic] will have no communication with anyone including, but not limited to Wife’s experts, accountants, consultants or attorneys or other advisors and consultants unless Client’s attorneys are present.”(9)

The trial court found that the communications in the presence of the wife’s friend were not privileged because there is “no good friend exception” to the strict elements of attorney-client privilege. However, the Court of Appeals, found that the agency relationship was sufficient to keep the communications within the attorney-client circle. The Court held that being a good friend and being a litigant’s agent are not mutually-exclusive roles.(10) In this case, the record before the trial court and the Court of Appeals contained the friend’s affidavit, describing the agency relationship, as well as a copy of the written agency agreement. The Court of Appeals found these items to be sufficient to establish a client-agent relationship sufficient to preserve the attorney-client privilege.

Sessions v. Sloane: A Checklist for How to Preserve and Present Privilege Disputes.

In Sessions v. Sloane,(11) a group of business partners wanted to protect their internal communications from discovery by a creditor. Sloane and his partners won a $50 Million contract with the Royal Canadian Mounted Police to provide three cruise ships to house security forces during the 2010 Winter Olympics in Vancouver.

A key reason they won the contract was a letter of credit for 10% of the $50 Million bid, which was provided at the last minute by the plaintiff, John Sessions. The defendants agreed to pay plaintiff a fee of $5 Million out of the proceeds of the contract. The proceeds ended up in the trust account for the defendants’ attorney after litigation with the Canadian government. Plaintiff caught wind of a plan by defendants to avoid paying his $5 Million fee, and he sued the defendants and obtained an attachment of the funds in their attorney’s trust account.

During discovery, in response to a commonly-propounded discovery request for all documents “concerning” the plaintiff, the defendants asserted attorney-client privilege and work product protection. They produced a privilege log identifying some emails among the defendants—no attorneys—from the time period when the defendants were negotiating the terms of the letter of credit agreement with the plaintiff. The plaintiff moved to compel these communications, along with the To, From, CC, BCC, and Subject fields for other emails on the privilege log.

In response, one of the defendants submitted an affidavit stating that the defendants had hired counsel and planned from day one to deny the enforceability of the agreement with the plaintiff, and therefore, they involved an attorney and anticipated litigation from the beginning. The defendants did not provide the materials at issue to the trial court for in camera review. The parties disputed whether those materials were offered for in camera inspection, but unfortunately, the court reporter present in the court room did not “take down” the proceedings. (PRACTICE POINTER: Expressly request that the hearing be taken down by the court reporter). The trial court ordered the non-attorney communications to be produced, along with the email header information, including email subject lines, for the emails on the privilege log.

On appeal, the Court of Appeals addressed numerous aspects of privilege, which can be summarized in the following checklist about how to preserve and present privilege disputes:

The party asserting privilege has the burden to establish it. Providing a privilege log with only the date, sender, and recipient information, along with a claim of privilege and the basis, “email seeking or containing legal advice,” without providing the documents for in camera review, does not meet the burden because the court lacks sufficient information to evaluate the claim of privilege. (12)
Orally offering to allow the judge to review the material at issue is not the equivalent of actually submitting the material for review.(13)
If the material was not submitted to the trial court, it will not be reviewed by the Court of Appeals. (14)
“The better practice in privilege controversies would be to submit a motion, affidavit, privilege log, request for findings of fact and in camera review together with a sealed record of the documents to be reviewed.”(15)
In a matter of first impression, the Court of Appeals held that email subject lines may contain privileged material, but the subject line must meet the elements of attorney-client privilege, and should be submitted for in camera review. “Email containing legal advice” is not a sufficient description to establish privilege.(16)

In re: Grand Jury Subpoena No. 2013R00691-009: Communications Made to Effectuate Real Estate Transaction are Not Privileged.

Finally, Judge Whitney issued an opinion in Grand Jury Subpoena No. 2013R00691-009.(17) In this matter, a law firm was subpoenaed to produce “all documents, records, or files maintained by firm regarding the closing of real estate transactions” between its client and certain parties. The law firm objected to producing confidential communications on the grounds of attorney-client privilege. Judge Whitney issued a published opinion granting the government’s motion to compel, stating that “[b]ecause of the frequent recurrence of objections … the Court now memorializes its oral ruling with this published opinion.”(18)

The Court ordered the law firm to produce its communications with its client, stating that

First, the subpoenaed documents are real estate closing files. Second, Movant is admittedly in a position of dual representation. … [E]ither [reason] independently, would suffice to determine that attorney-client privilege does not protect the subpoenaed communications ….(19)

Perhaps alarmingly, the Court further stated that

A client communication made for the purpose of effectuating a real estate closing inherently must be made in contemplation of ultimate public disclosure. Therefore, no intention of confidentiality, and thus no privilege exists.(20)

This decision and rationale conflicts with the way many real estate practitioners view their communications with their clients. While some communications contain information contemplated to be included in the public record, other communications—including details related to negotiations, loan terms, and other matters—are intended to remain confidential. Real estate practitioners should be aware of this published decision.

Conclusion.

The mechanics of attorney-client privilege are often an afterthought during litigation. However, it is important to counsel our clients about privilege at the beginning of the representation so that it is not waived, as well as to avoid creating discoverable non-privileged material in the first place. Finally, remember to create an adequate record for the court to review so that privilege disputes are not waived.

Endnotes:

(1) Sessions v. Sloane, et al., 789S.E.2d 844 (N.C. App. 2016)
(2) Friday Investments, LLC v. Bally Total Fitness of the Mid-Atl., Inc., 788 S.E.2d 170 (N.C. App. 2016), review allowed, 793 S.E.2nd 685 (N.C. 2016)
(3) Id., 788 S.E.2d at 177.
(4) Id., at 178.
(5) Id.
(6) Berens v. Berens, 785 S.E.2d 733 (N.C. App. 2016)
(7) Id., at 739.
(8) Id., at 736.
(9) Id., at 737.
(10) Id., at 741.
(11) Sessions v. Sloane, et al., 789 S.E.2d 844 (N.C. App. 2016)
(12) Id., at 856-7.
(13) Id.
(14) Id., at 854.
(15) Id.
(16) Id., at 856.
(17) In re: Grand Jury Subpoena No. 2013R00691-009, No. 316MC00079FDWDCK, 2016 WL 4385874 (W.D.N.C. Aug. 16, 2016).
(18) Id., at 1.
(19) Id., at 5.
(20) Id.

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Do You Pay An Outrageous Amount For Copies?

Lynette Pitt — Wed, 14 Dec 2016 16:30:00 GMT

by Shannon J. Colangelo, Queen City Court Reporting

In the past decade, the practice of insurance companies contracting for services has changed the court reporting industry, but for better or worse? Who is this practice benefiting, the local court reporting firm or the insurance industry? This practice has been the subject of much debate over the years as to whether these contracts bias the court reporting firms providing the service. In February of this year, California became the latest state to pass a law imposing disclosure requirements similar to those in North Carolina, while over half the states in the U.S. prohibit these contracts completely.

N.C. Gen. Stat. § 1A-28(c)(4) addresses the rise in the use of exclusive or preferential contracts between providers of deposition services being financed by insurance companies, in efforts to ensure fairness and prevent cost-shifting. Such arrangements, while frustrating for small court reporting firms and counsel on opposite sides of such litigation, have thus far not been prohibited in North Carolina. The vexation created by these contracts is felt predominantly by attorneys paying for “outrageous” copies, as evidenced in a recent suit, Crystal Danielson vs. Veritext Corporate Services, Inc., filed by attorney Lamar Armstrong. Although the Court ruled against Mr. Armstrong’s client in this case, his plight is felt throughout the industry. Judge Robinson noted, “Nor does Danielson allege that she, or her counsel, made any efforts prior to the deposition to determine who would be serving as the certified verbatim reporter at the deposition or how much a copy of the deposition would cost.” As an aside, most court reporting firms cannot tell you how much a transcript is going to cost prior to the deposition, as prices are dictated by page count. The best they could have done was disclose their copy page rate.

N.C.G.S. 1A-28(c)(4) also requires “the party desiring to take the deposition under a stipulation shall disclose the disqualification in writing in a Rule 30(b) notice of deposition and shall inform all parties to the litigation on the record of the existence of the disqualification under this rule and of the proposed stipulation waiving the disqualification. Any party opposing the proposed stipulation as provided in the notice of deposition shall give timely written notice of his or her opposition to all parties.”

This business shift allowing insurance clients to dictate which reporting firm to hire has hurt independent reporters and local reporting firms and benefitted national reporting firms and the insurance industry. National reporting firms, most of which are not located in North Carolina and do not benefit our economy in the same way local reporting firms do, contract with insurance companies to provide lower original rates to their client and charge higher than average page rates to the copy attorneys, while paying lower than average page rates to the court reporters who provide the actual service to the client, all in efforts to cover their exorbitant overhead. This shift in business has affected closure of many small firms in recent years due to their clients being herded to the national firms by insurance litigation. Small court reporting firms across our state, as well as throughout the U.S., are still trying to survive this industry shift. In an if-you-can’t-beat-them-join-them mentality, some local reporting firms have petitioned these national agencies, requesting to be placed on their list of approved firms, if only to handle the depositions of their own clients, most times being thwarted in the attempt unless the attorney goes to battle with the insurance company on their behalf.

In a May 2016 Lawyers Weekly article, Lawyer challenges court reporters on ‘outrageous’ copy charges, Phillip Bantz interviewed Mr. Armstrong, the attorney who filed the suit against Veritext. The article quotes Armstrong to have “believed that court reporters are using copy charges as an ‘extra profit center’ but he said he’s been told that reporters have to make money off the copies based on how they price the originals...the answer is to set your originals at whatever cost you need to generate the profits you want.” In theory, this is a plausible answer, but would necessitate an industry-wide pricing model change. If one agency raised the prices of original transcripts to cover the expenses that copy sales now cover, that agency would not be competitively priced within the industry and would soon find themselves out of business. Another way to keep costs down is to use a local firm with a smaller overhead and plan the deposition with enough time to receive transcripts at standard, not expedited, page rates.

This problem has been ongoing for more than a decade. Consumer Watchdog discussed the issue in 1999. One attorney they quoted had complaints that mirror the concerns of court reporters across the nation, “When a client learns that the court-reporting firm is financially tethered to the insurance company, he feels that maybe he's not getting the transcript he deserves,” Says Gallen. “One thing we could always count on in the past was the integrity of the court reporter. I could always make that assurance to my client. But now I can't vouch for something I don't know.” They also point out that “many defense lawyers hate being told which court reporter they can use for a particular case. They'd rather pick the best one for the job.” The same holds true today.

When asked, “How does contracting affect impartiality? Aren’t ethical codes enough?”, the National Court Reporting Association’s answer is that “Any arrangement that threatens the impartiality of court reporters or merely threatens the appearance of impartiality will lead to a breakdown of our justice system. What if the judge in a case of yours was being paid by your opponent in the litigation? Would their oath to be impartial be enough for you? If you lost, would you feel as though you got a fair shake? It is our faith in the impartiality of the judicial system that is the very basis of our Rule of Law and ordered government, and this foundation erodes when the antagonists in litigation--the parties--start directly paying the bills of the allegedly impartial.”

The national agencies keep growing year after year and acquiring more smaller firms in every state and, left unchecked, will eliminate the small reporting firms all together in not too many years. If you’re paying too much for copies now, beware. The monopoly that is growing certainly will not keep prices down in the future.

About the Author: Shannon Colangelo has been a court reporter for 10 years, partnering with three colleagues in March, 2015, to form Queen City Court Reporting. She spent the 20 years prior as an executive assistant and is a Gulf War veteran, U.S. Air Force. Queen City Court Reporting, based in Charlotte, with over 50 years combined experience, serves primarily North and South Carolina, as well as the Southeastern U.S. We pride ourselves on our professionalism, accuracy, and timeliness in every job we take, striving to get to know our clients so we can tailor each job to fit their individual needs.

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Confronting Unconscious Biases in Litigation

Lynette Pitt — Wed, 30 Nov 2016 20:05:05 GMT

by Niki T. Ingram, Marshall Dennehey Warner Coleman & Goggin

"Black lives matter," "equality for women," and "diversity and inclusion" are all phrases that are thrown about in today's world. These phrases mean different things to different people, and one can argue that they refer to moral conclusions that some individual or groups espouse. They are generally not phrases that come to mind when talking to the insurance industry, but perhaps they need to be. It is important for insurance carriers, and those who represent them, to realize that the world is a very diverse place and that the appreciation of these differences can be critical when evaluating cases.

Proper reserving is one of the most important aspects of working in the insurance industry. Carriers set their premiums based upon algorithms used by underwriters when issuing policies. Those algorithms take into account the likelihood of a claim occurring. Insurance companies are obviously in the business of making money when writing insurance, and, from the inception of a claim until its conclusion, it is critical that the reserves are adequate. Once a claim does occur, the initial reserve is set by the insurance adjuster. The setting of the reserves is based upon the most accurate assessment of the case that is possible. Reserves, however, are fluid and should change as the case evolves. Should the case go into litigation, the attorney representing the defendant then becomes involved in the valuation process. It is essential that the adjuster and the defense attorney be as accurate as possible when evaluating cases and that all factors involved in the case are appropriately assessed. One way to assure that this happens is to make certain that neither the claims professional nor the defense attorney allows his or her unconscious biases to impact the valuation of the case.

Unconscious biases are those prejudices we all have that impact our belief structure about other groups. These biases may be based on race, gender, ethnicity, age, disability status, personality type or some other factor. They don't necessarily all exist together, but we all manifest them in some way or another. In the context of this article, the biases that are being discussed are those of racial prejudice.

Several years ago, I had a case where I was asked to provide a settlement analysis for my client, which was a large third-party administrator. I went through the standard process of evaluating the case and considered the age of the plaintiff and her life expectancy, as well as the extent of her injury, the permanency of that injury, the cost of her medical treatment, what future treatment she would need, her ability to work, her loss of earnings and her level of pain and suffering. My settlement recommendation was neither high, nor low, from my perspective. However, the client dismissed my analysis immediately. What was interesting was that the dismissal was done using terms that could be classified as "buzz phrases," such as "people like her don't need that kind of money" and "she's just not a quality human being. I don't want her to get a large settlement. Let's make her sweat it out." What was the plaintiff like? Where did she live? What made her not a quality human being? I'm not sure of all of the answers to these questions, but she was a middle-aged African-American woman who lived in a working class neighborhood that was primarily African-American and Latino. She had an Associate's degree and had been working for a number of years when she sustained her injury. There was nothing to outwardly suggest that she was not "a quality human being." The claims adjuster refused to settle the case, and it dragged on for another year.

The result of the failure to settle this case early was that by the time it did settle, my client paid $50,000 more than the original settlement recommendation. This case has always resonated with me because it is emblematic of the many reasons why diversity and inclusion should be important to the insurance industry. Was the adjuster in this case a racist? Probably not. Did his unconscious biases about African-Americans impact the value that he placed on the case? Probably. There are many studies that show that affinity biases exist. These biases are those which make us inclined to like or value individuals who are most like ourselves. In recent years, many studies have been conducted on unconscious biases, and one study done in 2014 showed that, even when people believe that prejudice and discrimination are wrong, they still harbor these biases. (Henneman, 2014). There are a myriad of unconscious biases that exist, and it is important for the defense industry to understand that hiring and retaining diverse personnel helps to reduce the biases of others in the office and that this, along with formalizing training about issues of diversity, leads to increased understanding and respect for individuals who are different than the evaluator.

The initial response from the insurance industry and the defense bar about a case such as my example above may be that this was an individual instance and there was no demonstrated racism. Perhaps a more thoughtful and realistic way to deal with the issues posed might be to focus on the fact that the case could have settled more quickly and more cheaply had the adjuster been able to recognize and appreciate the value of a non-white life. Even if minorities are not well represented in either the insurance industry or the defense bar, there can be training conducted that helps individuals to understand what their unconscious biases are and how to overcome them or compensate for them. While there is certainly a moral argument that the hiring and retention of minorities is important for the defense industry, there is also an economic incentive to implement and strengthen diversity programs and practices.

All cases need to be evaluated as accurately as possible. This starts with the first-line adjuster. These adjusters need to recognize and overcome any inherent biases they have. As a case proceeds into the litigation process, it is incumbent upon defense counsel to do the same. The recognition that unconscious biases may play into analysis will not only help improve accuracies in setting reserves and settlements, but it is the beginning of change for the industry as a whole.

About the Author: Niki T. Ingram is a Shareholder, Director of the Workers' Compensation Department, and a member of the Board of Directors at Marshall Dennehey Warner Coleman & Goggin.

This article is re-printed with permission from DRI’s Diversity Insider Newsletter, May 6, 2016 issue.

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In-House Counsel No Longer Insulated From Deposition Testimony

Lynette Pitt — Wed, 16 Nov 2016 16:21:03 GMT

by Erin M. Young, Hall Booth Smith, PC

A recent Order and Opinion from the North Carolina Business Court establishes that corporate in-house counsel in this state can no longer rely on the mere fact that they are attorneys as a shield from becoming testifying witnesses in litigation. The Court determined that, under the circumstances, a blanket order prohibiting plaintiff from deposing in-house counsel was not justified and the deposition could proceed. In the November 2, 2016 Order and Opinion, Chief Business Court Judge James Gale denied a Motion for Protective Order filed by Acuity Healthcare Holdings, Inc. and Acuity Healthcare, L.P. ("Acuity") in response to plaintiff's request to depose their general counsel and vice president of compliance and risk management.

Background

Plaintiff, Carmita Edison, worked as a respiratory therapist at Mercy Restorative Hospital ("Mercy"), a long-term acute care hospital in Charlotte. Acuity and Mercy jointly employed the plaintiff. Plaintiff alleges that Acuity and Mercy wrongfully terminated her after she filed a complaint with the North Carolina Respiratory care Board regarding poor patient care, incorrect ventilator settings, false documentation, and management failures.

Plaintiff's attorney requested to depose Acuity's general counsel. Acuity, in its Motion for Protective Order, stated that their general counsel provided "general legal advice and counsel to [Acuity] . . . regarding legal compliance and management of legal risk." Acuity's 30(b)(6) designee also identified the general counsel as the person capable of answering questions on topics relevant to the dispute about which the designee had no knowledge.

Plaintiff then served a notice of deposition on Acuity's general counsel to which Acuity responded with a Motion for Protective Order.

Legal Analysis

The Business Court adopted the "Shelton" rule set forth in the Eighth Circuit decision of Shelton v. American Motors Corp., 805 F.2d 1323 (8th Cir.1986 ). A party may depose corporate in-house counsel if they are able to demonstrate that "(1) no other means exist to obtain the information than to depose opposing counsel; (2) the information sought is relevant and nonprivileged; and (3) the information is crucial to the preparation of the case."

In its discretion, the Business Court found that under the Shelton analysis, Acuity's general counsel could be deposed because the deposition was not targeted solely at eliciting information relating to Acuity's litigation strategy, and the deposition would not necessarily result in undue burden or expense. The Court further determined that there was no evidence that counsel had been substantially involved with overseeing the litigation. Additionally, the 30(b)(6) designee identified in-house counsel as the person who could best speak to certain clinical care standards and to consistency among Acuity's hospitals.

Holding

Where defendant's general counsel also served as one of its vice presidents who may have unprivileged knowledge relevant to the case, she may be deposed. The Business Court stated that a blanket order prohibiting general counsel's testimony was unjustified; that Acuity could assert the attorney-client privilege on a question-by-question or subject-by-subject basis.

Future Implications

Neither North Carolina's appellate courts nor the Fourth Circuit have expressly adopted the Shelton rule. However, federal district courts in North Carolina have applied the rule in some cases. The Business Court's adoption of the rule certainly has persuasive implications for other trial courts considering this inquiry. The trend now seems to be that court's will not issue a blanket prohibition on the in-house deposition but will entertain a motion to limit the scope of the deposition.

Though the ruling in this case sounds ominous, you must remember that Acuity's general counsel served in dual capacities – both as general counsel and as vice president of the company's compliance and risk management department. In that regard, she possessed non-privileged, relevant, factual information necessitating her participation in the litigation as a fact witness.

To reduce the possibility of general counsel becoming a deponent, corporations and their in-house counsel can take some proactive measures to reduce the chances of being deposed or to limit the scope of the deposition.

Do not allow the in-house attorney to act like a fact witness. For example, corporate counsel should avoid signing affidavits or interrogatories as the corporate representative if possible. Participation in factual discovery erodes the line between counsel and fact witness.
Delineate those written communications that are made solely for the purpose of giving legal advice. Routine business communications do not become privileged solely because they are sent to or copied to in-house counsel. Clearly, identify all written communications seeking or providing legal advice as "confidential" and/or subject to the attorney-client privilege in the event of a request for production or in camera review. Also, only disseminate communications with legal advice to those who have a legitimate "need to know." Have non-legal employees identify communications to in-house counsel as a "request for legal advice."
If general counsel serves a dual role, avoid discussing legal and business topics in the same communication or forum. Where the in-house counsel wears both a legal hat and a business hat, that automatically increases the likelihood that he/she possesses non-privileged information. Thus, the dual roles should be clearly delineated as much as possible to protect the attorney-client privilege.

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LIGHTS, CAMERA, ACTION! How to Make the Most of your Video Deposition

Lynette Pitt — Thu, 27 Oct 2016 16:37:06 GMT

by Queen City Court Reporting

There will inevitably come a time in every attorney’s career when theyare faced with the task of conducting a video deposition. We would like to share some insights regarding this process to help make it as seamless and productive as possible for you.

Most legal videographers are independent contractors who are hired by court reporting agencies to represent them during the proceeding. As most court reporters are certified, so too are legal videographers through the NCRA or AGCV. This is important because certain standards should be followed to ensure certification of the deposition video meets acceptable standards and procedures and thereby is not challenged if shown in court.

The videographer is part of the legal community as a non-biased representative of services and should dress accordingly. The legal videographer’s job is to videotape the deposition and not be a distraction to the proceedings.

When the deposition starts, the legal videographer will do a read-on stating the date, time, witness, the case and case number, the court it is in, location of the deposition, his/her name and that of the court reporter too. He/she will then ask all lawyers present to introduce themselves for the record, after which the court reporter will swear in the witness. There are times where the examining lawyer does not want to do a read-on. The legal videographer will ensure that the attorneys representing the plaintiff and defendant are in agreement not to do a read-on or do a shortened read-on before moving forward with the deposition.

What challenges does the legal videographer face when videotaping a deposition?

First, doing a deposition in a closet is not good for the videographer, court reporter, lawyers and/or witness…nor is a bathroom or an exam room (come on, we’ve all been there!) However, there are times when limited space is all that is available. Preferably, the deposition should be taken in a conference room, but break-out rooms, even lobbies have been used. Your videographer will do their best to set up the room so that you will be comfortable with the setting. We do the best we can under the circumstances.

Videographers will come with a lot of fancy equipment. It is more than just a camera and tripod. It additionally includes audio mixer, video capture equipment, audio cables, microphones, background screen, and so on. The word “tape,” as in “videotape,” has been changed to “media”. Almost all legal videographers record directly to DVD or a capture card. In the past, when the “tape” was about to run out, the videographer would provide a 5-minute warning and hope that the lawyer did not go beyond the tape running out. With DVDs and other captured devices the recording time limits are luckily much longer.

Importance of quality audio

First, you want the best audio possible. Below are some of the issues a videographer deals with and how they can affect the quality of your videotaped deposition.

Set up

Generally, the videographer will arrive at the deposition site one hour before it is scheduled to start. This provides enough time to set up equipment, run microphone cable, set up background screen and test equipment prior to lawyers and the court reporter arriving. There are times when the deposition is set up for 7:00 a.m. for a doctor, but no one shows up to open the location until 7:00 a.m. This obviously would waste the time of the lawyer and the deponent (almost always a doctor). It is better to set up these depositions after normal business hours or other free time convenient to all parties.

The Heavy Breather

Microphones in the deposition setting are very sensitive. Some lawyers, who we’ll call “Heavy Breathers”, will wear their microphone in close proximity to their face (nose) so that when they are looking at their notes their heavy breathing is picked up on the video recording. The videographer can often find themselves adjusting audio to minimize the noise when the lawyer is not speaking.

The Note Flipper

The “Note Flipper” is the lawyer who is going through their notes flipping pages toward their chest hitting the microphone and causing extreme static on the audio recording. To avoid being cast as the dreaded “Note Flipper”, attempt to keep all note flipping as quiet and as unobtrusive as possible.

The Shuffler

The lawyer who shuffles papers on the desk will often create enough noise (microphones are sensitive) to be distracting. Understandably, looking for an exhibit in a pile on the table can often be frustrating for the “Shuffler”; nevertheless, it can cause audio issues. Yes, your videographer should be using a sound board (audio mixer) to adjust inputs to minimize these audio issues, but often it can be a challenge of balancing testimony and these other noises in the room.

The Reacher

The videographer will be shooting at an angle that is normally mid chest to just above the head of the witness. In most cases, laptops, drinks, and so on are not in the camera’s view. But there are those times when a lawyer will “reach” forward with a document into the camera view to read, and often it is their witness. This will be distracting to a jury, as will the heavy breather, note flipper, and shuffler.

The videographer will do their best to ensure there is a clear path between the camera viewing lens and the witness, i.e., laptops, drinks, etc. Make a mental note to not obstruct or interfere with the picture or risk the wrath of the videographer!

The Angle of the Camera

If the ordering attorney has a specific desire on how they want the videographer to set up, they should let them or the agency they work with of their preference, i.e., over their shoulder or long shot where the witness sits at the end of the table. Your videographer normally takes 30 to 40 minutes to set up and test their equipment. To re set-up equipment at the time of the deposition will take time and also be distracting.

There is the chance that this video will be shown to a jury, so you want it to look as best as possible. So here are some do’s and don’ts for your witness:

Dress

Don’ts for men and ladies is to not wear sweat shirts or t-shirts to their deposition. A nice shirt or blouse, preferably a solid color, presents itself much better than stripes or zig zag patterns on the video. The videographer will place a Lavalier microphone on the witness for audio recording. If the microphone cannot be attached to a jacket lapel, tie or buttoned shirt, its appearance on the video can be distracting. In rare cases a small tripod mounted microphone can be used, but the method of clipping the microphone on the witness’s clothing is preferred.

If this is your witness, you want them to present themselves as best as they can as this video may end up being viewed by a jury. As they say, “What you are speaks so loudly I can hardly hear a word you are saying!”

Hair

Ladies should wear clothing that a Lavalier microphone can be attached to and not brush against their hair. There is a balance between distance of the microphone to the voice and quality of the audio. If this becomes a problem, the videographer should use a small tripod with the microphone attached and place it on the table in front of the witness out of camera view. The audio level can be adjusted by the videographer, though the quality will be about 90% of normal.

What are some popular formats for the DVD?

During the deposition, the legal videographer will put the deposition on and off the record for each media used. At the end of the deposition, the legal videographer will ask each lawyer what format they want the video delivered in. If they have a standing order with the court reporting agency, that will be noted. Most lawyers order DVD or Synched DVD. The Synched DVD is when the video is synched up with the transcript through trial presentation software so you can see the transcript on one side of the screen and the corresponding video on the other side of the screen. This allows one to jump around with the transcript from one line to another and the corresponding video clip will appear too.

Periodically lawyers will ask for an mp4 or mpeg-4 format, which they can play on their tablet or laptop. For the attorney who scheduled the deposition, the DVD is provided as part of the contracted service. If they wish for the video to be synched or converted to mpeg-4, or other format, there is normally an additional fee.

When the deposition is over

Finally, it takes time for the legal videographer to pack up after the deposition is over. He/she should make sure that the room the deposition was held in is returned to its original layout and all extras, such as empty drink bottles, papers, etc., are properly thrown away, and leave the room as clean and orderly as possible. Those who work at the facility will greatly appreciate this effort. No one wants to be left with a mess.

So now it’s finally time to sigh a huge breath of relief and congratulate yourself as you have successfully completed your video deposition. And always remember to relax and show them your best side. After all, the spotlight is indeed on you!

About the Author: At Queen City Court Reporting, you are our main priority. We tailor our services to meet your needs and will provide accurate, dependable, and experienced reporters. Contact us at 704-300-9770 or office@queencitycourtreporting.com.

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Legal and Regulatory Issues Emerging From Technology-Laden and Autonomous Vehicles

Lynette Pitt — Mon, 29 Aug 2016 20:18:23 GMT

by Luke Dalton

Elements of basic technology were introduced into our vehicles decades ago. Over time, the adapting and interfacing of technological modalities have been slowly, even incipiently, integrated into our vehicles.

Today, many of our vehicles utilize both short-range and long-range connectivity through wireless interfaces to support features such as tire pressure monitoring, telematics and Smart Key keyless entry/ignition start. These interfaces include Bluetooth, Wi-Fi, radio frequency, Global System for Mobile Communications/Code Division Multiple Access and Universal Mobile Telecommunications System.

For some time, our vehicles have also used several self-driving technologies, including collision avoidance, drifting warning, blind-spot detectors, enhanced cruise control and self-parking. Still, not many years ago, the thought of driverless vehicles seemed like a remote and distant possibility. However, the technology that will be utilized in our vehicles has progressed rapidly, more so than many in the legal community previously thought possible.

From recent news, society is learning more about the future of technology in our vehicles, and the resulting legal issues that may arise. In late 2015, Tesla released a self-driving feature called Autopilot to customers in a software update. Through outlets such as The Wall Street Journal, we are now learning about Uber’s plans to utilize self-driving vehicles as soon as this month to transport passengers around Pittsburgh.

The Federal Government seems to be encouraging the development of self-driving automated/autonomous vehicles. The U.S. Department of Transportation John A. Volpe National Transportation Systems Center prepared a preliminary report in March 2016 identifying instances where existing Federal Motor Vehicle Safety Standards may impede the introduction of automated/autonomous vehicles. More recently, during his remarks at the 2016 Automated Vehicles Symposium, Mark Rosekind, Administrator of the National Highway Traffic Safety Administration (NHTSA), outlined many benefits of technology in our vehicles. He spoke of a future “where vehicle automation and vehicle connectivity could cut roadway fatalities dramatically.” Further, the technology will assist disabled and elderly people in reclaiming the independence and freedom allowed by a personal vehicle.

However, as we have also seen in recent news, there are potential dangers associated with connected and automated/autonomous vehicles. For example, the U.S. Government Accountability Office (GAO) has noted that researchers found our vehicles’ wireless interfaces—if not properly secured—may be exploited to gain access to in-vehicle networks, and to take control of brakes and other safety-critical functions. After widespread news coverage of an accident in Florida involving a Tesla Model S using the Autopilot feature, we have also seen that automated/autonomous vehicles will be involved in catastrophic events. Governmental agencies and members of the legal community have been working to keep pace with technological innovation in order to anticipate and address these dangers, while still embracing the use of technology in our vehicles.

In 2014, the NHTSA issued a summary of cybersecurity best practices to address the growing cybersecurity risks associated with vehicles equipped with advanced electronic control systems. The SPY Car Act of 2015 was introduced in the U.S. Senate, which would have directed the NHTSA to issue motor vehicle cybersecurity regulations. Some have called for governmental agencies to take further actions. The GAO recently called for the Department of Transportation to define its role in responding to vehicle cyber-attacks.

This year the NHTSA announced its belief that it retains authority over automated vehicle technologies, systems, equipment, software and after-market software updates, such as Tesla’s Autopilot feature, as “motor vehicle equipment.” The NHTSA noted that a defect in a vehicle’s hardware, software, and other electronic systems “may be considered a defect of the motor vehicle itself,” and that unique safety risks are presented by software installed in or on a vehicle.

According to the NHTSA, a software failure or safety-risk constitutes a defect when the software has manifested a safety-related performance failure, or otherwise presents an unreasonable risk to safety. The NHTSA noted:

To avoid violating Safety Act requirements and standards, manufacturers of emerging technology and the motor vehicles on which such technology is installed are strongly encouraged to take steps to proactively identify and resolve safety concerns before their products are available for use on public roadways.

Issues caused by connected and automated/autonomous vehicles will likely raise novel issues under current state laws. According to the National Conference of State Legislatures, as of 2015, sixteen states introduced legislation related to autonomous vehicles.

In 2015, legislation was introduced in North Carolina that would have directed the NCDOT to study how to implement autonomous vehicle technology on the roads and highways of North Carolina. Is it now time for North Carolina to analyze its criminal and civil laws and regulations in preparation for the expected widespread introduction of automated vehicles?

Some of the legal issues that courts will be presented with because of connected and automated/autonomous vehicles may include how coverage under North Carolina’s vehicle liability policy will be interpreted when accidents are caused by software in vehicles. Courts may be called upon to address novel issues when analyzing the applicability of North Carolina’s product liability law to accidents caused by software that was downloaded as a software update after the sale of the vehicle. Moreover, products liability and personal injury litigants will face new and likely costly challenges when addressing whether software was the actual and proximate cause of any vehicle accident.

It appears that the Internet of Things and the widespread use of technology in our vehicles will continue to be an integral element of our society. The legal community and lawmakers in North Carolina should take note and prepare to address issues that will arise from the use of highly utilitarian, but sometimes risky, technology in our vehicles.

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State v. McGrady: Supreme Court of North Carolina Confirms N.C. is a Daubert State

Lynette Pitt — Wed, 24 Aug 2016 15:30:00 GMT

by C. Rob Wilson, Hedrick Gardner Kincheloe & Garofalo, LLP

a. The Old Standard - Howerton v. Arai Helmet

Until recently, North Carolina Rule of Evidence 702 stated that “[w]hen "scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion." In the 2004 case Howerton v. Arai Helmet, the Supreme Court of North Carolina established a three step test to determine the admissibility of expert testimony: (1) whether the expert's proffered method of proof sufficiently is reliable, (2) whether the witness presenting evidence is qualified as an expert, and (3) whether the expert evidence is relevant. N.C.440, 597 S.E.2d 674 (2004). The Howerton court clarified that North Carolina did not adhere to the federal Daubert standard and that North Carolina followed a liberal approach which was "decidedly less mechanistic and rigorous than the ‘exacting standards of reliability’ demanded by the federal approach."

b. Rule 702(a) Amendment

Rule 702(a) was amended, effective October 1, 2011 and applicable to causes of action arising on or after October 1, 2011. The amended Rule 702 (a) added language stating that a qualified witness may only testify as an expert if all of the following apply: (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. This language brought North Carolina's rule in line with Rule 702 of the Federal Rules of Evidence.

c. State v. McGrady

It did not take long for North Carolina's appellate courts to take up the issue of whether the 2011 amendment to Rule 702 effectively adopted the federal standard set forth in Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579, 597, 113 S.Ct. 2786, 2798-99, 125 L.Ed. 469, 485 (1993). The first case to bring this issue in front of the North Carolina courts was State v. McGrady, which arose from defendant McGrady's first-degree murder conviction for the shooting death of his cousin. The central issue at Mr. McGrady's trial was whether he shot his cousin in defense of himself and his son. McGrady attempted to introduce expert testimony on this issue through a "use of force" expert, but the trial court excluded this expert testimony pursuant to the amended Rule 702 and the standard set forth in Daubert. Specifically, the court decided to exclude the expert's testimony regarding reaction times insofar as it did not satisfy the Rule 702 reliability test because the expert could not provide error rates for the reaction time studies on which he relied and because he did not consider certain variables, such as McGrady's physical disability, in reaching his conclusions. The trial resulted in a unanimous jury verdict finding McGrady guilty of first-degree murder and a life sentence.

McGrady appealed to the North Carolina Court of Appeals, arguing that Rule 702 should still be applied as a liberal standard even in light of the 2011 amendment. State v. McGrady, 232 N.C. App. 95, 753 S.E.2d 361 (2014). The Court of Appeals disagreed, holding that the 2011 amendment effectively adopted the standard set forth in Daubert, meaning the trial court did not abuse its discretion in applying the Daubert standard to the use of force expert.

The Supreme Court of North Carolina then allowed McGrady's petition for discretionary review and heard the appeal on March 17, 2015. The Supreme Court issued its opinion on June 10, 2016, affirming the Court of Appeals and holding that the 2011 amendment to Rule 702 did adopt the federal standard for admission of expert witness testimony articulated in Daubert, largely because the General Assembly amended North Carolina's rule in 2011 in virtually the same way that the corresponding federal rule was amended in 2000. -- N.C.--, 787 S.E.2d 1 (2016). In the words of the N.C. Supreme Court, "the General Assembly has made it clear that North Carolina is now a Daubert state." However, the 2011 amendment to Rule 702 did not abrogate all North Carolina precedents interpreting that rule, so long as those precedents do not conflict with the Daubert standard. To that end, interpretation of Rule 702 remains a state law issue and any future federal court decisions will not dictate the meaning of North Carolina's Rule 702.

d. Where do we go from here?

In McGrady, the N.C. Supreme Court underwent an extensive analysis of how the as-amended Rule 702 should be applied. As a baseline, the McGrady court recognized that Daubert interpreted Rule 702 as requiring the trial court to serve a "gatekeeping role," ensuring that expert testimony is reliable before it is admitted by conducting "a preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue." The McGrady court then considered the three separate requirements of the amended Rule 702(a):

1. The area of proposed testimony must be based on “scientific, technical or other specialized knowledge” that “will assist the trier of fact to understand the evidence or to determine a fact in issue." To “assist the trier of fact,” expert testimony must provide insight beyond the conclusions that jurors can readily draw from their ordinary experience.

2. The witness must be “qualified as an expert by knowledge, skill, experience, training, or education." The expert witness must be competent in his purported field, although that competence can come from practical experience as much as from academic training, as long as the expert has enough expertise to be in a better position than the trier of fact on the subject.

3. The testimony must meet the three-pronged reliability test set forth in Rule 702(a): (1) The testimony must be based upon sufficient facts or data. (2) The testimony must be the product of reliable principles and methods. (3) The witness must have applied the principles and methods reliably to the facts of the case. The primary focus of the inquiry is on the reliability of the witness's principles and methodology, not on the conclusions that they generate. In the context of scientific testimony, Daubert articulated five factors from a non-exhaustive list that can have a bearing on reliability: (1) “whether a theory or technique ... can be (and has been) tested”; (2) “whether the theory or technique has been subjected to peer review and publication”; (3) the theory or technique's “known or potential rate of error”; (4) “the existence and maintenance of standards controlling the technique's operation”; and (5) whether the theory or technique has achieved “general acceptance” in its field. The trial court is free to consider other factors, and the federal courts have articulated additional reliability factors which may be helpful in certain cases, including (1) whether experts are proposing to testify about matters growing naturally and directly out of research they have conducted independent of the litigation, or whether they have developed their opinions expressly for purposes of testifying, (2) whether the expert has unjustifiably extrapolated from an accepted premise to an unfounded conclusion, (3) whether the expert has adequately accounted for obvious alternative explanations, (4) whether the expert is being as careful as he would be in his regular professional work outside his paid litigation consulting, and (5) whether the field of expertise claimed by the expert is known to reach reliable results for the type of opinion the expert would give. The factors articulated in Howerton may also still be relevant: use of established techniques, expert's professional background in the field, use of visual aids to help the jury evaluate the expert's opinions, and independent research conducted by the expert).

The McGrady court recognized that a similar three-step inquiry was already recognized via Howerton. Although the 2011 amendment to Rule 702 did not change the structure of this inquiry, it did change the level of rigor that North Carolina's courts must use to scrutinize expert testimony before admitting it.

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Capturing the White Whale

Lynette Pitt — Tue, 23 Aug 2016 13:30:00 GMT

by Scott S. Addison, Lincoln Derr, PLLC

In June, Judge Robert Ervin granted Directed Verdict in favor of our physician client at the close of Plaintiff’s evidence. Because a Directed Verdict is a white whale in medical malpractice cases (and in many others), we felt the story bore telling. First, it must be said that all counsel involved were highly competent, and the trial was well-fought and contested. The issue boiled down to interpretation of the Continuing Course of Treatment Doctrine, even at the time of trial.

Our case involved an alleged delay in diagnosis of a salivary gland tumor by an otolaryngologist who was also fellowship-trained in head and neck cancer. The patient first presented to a different physician in the same practice with a mass under her chin in May 2009. She returned to that physician for several visits until June 25, 2009. Fifteen months then passed when the patient returned to the practice, this time to see the physician who we represented at trial (the other physician was originally named in the lawsuit but was dismissed due to the statute of repose). The patient visited the practice in September and October 2010; and did not return until January 2012 (despite instructions to do so earlier). The diagnosis of cystic adenocarcinoma of the submandibular gland was made in April 2012.

The lawsuit was filed on May 30, 2014, approximately two years after the cancer was diagnosed. In the Complaint, Plaintiff alleged that Defendant physician was negligent at each of the 2010 visits for not performing an incisional biopsy and in 2012 for not referring her in an expedient fashion. She alleged that even in January 2012, a timely referral would have made a difference in her outcome.

When Plaintiff’s expert was deposed, he was asked if a more expeditious referral in January 2012 would have made any difference in the patient’s staging and outcome. The expert’s testimony was somewhat equivocal, and a jury could have inferred that diagnosis and treatment in January 2012 could have made some amount of difference in her ultimate outcome.

At trial, however, the expert never testified that the physician was negligent during the January 2012 visit or that a different outcome would have been achieved if the patient had been immediately referred. The only criticism related to the care and treatment in September and October 2010.

At the close of Plaintiff’s evidence, we moved for Directed Verdict on the grounds that the lawsuit was filed more than three years after the negligent act(s) giving rise to the cause of action and that the Continuing Course of Treatment Doctrine did not apply to extend the statute of limitations.

As you likely know, the Continuing Course of Treatment Doctrine is “an exception to the rule that ‘the action accrues at the time of the defendant’s negligence.” Webb v. Hardy, 182 N.C. App. 324, 327, 641 S.E.2d 754, 756 (2007) (quoting Locklear v. Lanuti, 176 N.C. App. 380, 384, 626 S.E.2d 711, 715 (2006)).

The doctrine applies to situations where a doctor continues a particular course of treatment over a period of time. The underlying theory of the doctrine is that so long as the doctor/patient relationship continues, the doctor is guilty of malpractice during the entire relationship for not repairing the damage he did and therefore, the cause of action arises at the conclusion of the contractual relationship. In order to benefit from the continuing course of treatment doctrine a plaintiff must show both a continuous relationship and subsequent treatment from that physician. It is insufficient to show the mere continuity of the physician/patient relationship. Rather, the subsequent treatment must be related to the original act, omission or failure to act that gave rise to the original claim.

Whitaker v. Akers, 137 N.C. App. 274, 278, 527 S.E.2d 721, 724-25 (2000)

When the Continuing Course of Treatment Doctrine applies, the statute of limitations is tolled for the period of time between the alleged negligent act “and the ensuing discovery and correction of its consequences”; and “the claim still accrues at the time of the original negligent act or omission.” Horton v. Carolina Medicorp, Inc., 344 N.C. 133, 137, 472 S.E.2d 778, 781 (1996). To take advantage of the Continuing Course of Treatment Doctrine, the patient must allege that the defendant “could have taken further action to remedy the damage occasioned by its original negligence.” Id. at 140, 472 S.E.2d at 782). In addition to the pleading requirements, “there must be some forecast of evidence that the injury occasioned by the original negligence could be remedied by the treating physician.” Webb, 182 N.C. App. at 328, 641 S.E.2d at 757. In Webb, the Court granted summary judgment when it determined that the doctrine did not apply because the plaintiffs had not “forecast any evidence that defendant could have taken any action to remedy the damage occasioned by the alleged original negligence,” despite the fact that the defendant had continued to treat the patient for a year after the injury, and the patient did not learn of the cause of the injury until more than a year after the negligent act. Id.

Taking all of these cases together, the Continuing Course of Treatment Doctrine, has three main elements that must be satisfied in order to apply: 1) a negligent act; 2) a continued physician-patient relationship where the continued care relates to the original care giving rise to the cause of action; and 3) the ability of the defendant at the later encounters to remedy the original negligent care. Failure to establish all three elements defeats the Continuing Course of Treatment Doctrine and the statute of limitation is not tolled. Moreover, and most importantly to our case, the elements of the doctrine must be established at each phase of the litigation: pleadings, summary judgment, and trial.

In our case, Defendant doctor treated the patient in September 2010, October 2010, and January 2012. The patient discovered her injury in April 2012, and she filed suit in May 2014. Therefore, the critical date for purposes of the Continuing Course of Treatment Doctrine was January 2012. If the doctor could have done something to “remedy” his earlier alleged negligence, the doctrine would apply, and the case would have been timely filed. If, however, the die was cast and nothing could have been done in January 2012, then the Continuing Course of Treatment Doctrine would not apply according to Webb and Horton. Plaintiff had satisfied the elements in the initial pleadings and, arguably, to overcome summary judgment. At trial, however, Plaintiff’s sole expert witness did not give any testimony that either (1) the care in January 2012 was negligent or (2) diagnosis and treatment in January 2012 would have changed the patient’s outcome. Therefore, we argued, the Continuing Course of Treatment Doctrine did not apply as a matter of law, and the case was not timely filed.

Judge Ervin heard our arguments on Monday afternoon. He then asked opposing counsel to provide any case law or arguments the following day, and he, too, performed additional research that night. After listening to further argument Tuesday morning, Judge Ervin very carefully and graciously stated: “In every criminal and civil case I preside over, part of my instructions to the jury always is that they are to take the law as I give it to them and not as they think it is or think it should be. Today, I find myself in the same position, where I have to take the law as it is and not as I think it should be. If I require a jury to follow the law as it is, then I have to do the same. I have doubts about the state of the law in Webb and I do not really agree with what it says. However, I have to follow that law. And so I am going to grant the Defendant’s Motion for Directed Verdict.”

The Plaintiff has decided not to appeal the decision. We captured our white whale.

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A Picture is Worth a Thousand Words: New North Carolina Law Offers Guidance On The Disclosure of Body and Dash Camera Footage

Lynette Pitt — Fri, 29 Jul 2016 20:54:49 GMT

by Lori Keeton, Lincoln Derr, PLLC

In North Carolina, footage from a law enforcement officer’s body or dashboard cameras is not considered a public record or personnel record according to a recently passed law that goes into effect October 1. North Carolina joins five other states—Florida, Georgia, Illinois, Oregon, and South Carolina— in making this determination.

Prior to the passage of the new law, such footage was often shielded from release to the public because it was considered part of a criminal investigation or personnel file.

Under the new law, anyone captured in police video or audio can make a written request to the head of the custodial law enforcement agency to see the relevant footage. The agency may consider any of the following in deciding whether to grant the request:

If the person requesting disclosure of the recording is a person authorized to receive disclosure.
If the recording contains information that is otherwise confidential or exempt from disclosure or release under State or federal law.
If the release would reveal information regarding a person that is of a highly sensitive personal nature.
If the release may harm the reputation or jeopardize the safety of a person.
If the release would create a serious threat to the fair, impartial, and orderly administration of justice.
If confidentiality is necessary to protect either an active or inactive internal or criminal investigation or potential internal or criminal investigation.

If the request is approved, the applicant will be allowed to view the relevant footage but will not be provided with a copy without a court order. If the request is denied, the applicant can appeal to the superior court for review of the agency’s decision.

Anyone else who wishes to obtain footage must file an action in the superior court in any county where any portion of the recording was made for an order releasing the recording. In determining whether to order the release of all or a portion of the recording, the court must consider the factors set forth above as well as the following:

Release is necessary to advance a compelling public interest.
The person requesting release is seeking to obtain evidence to determine legal issues in a current or potential court proceeding.
There is good cause shown to release all portions of a recording.

North Carolina Governor Pat McCrory says the new law is an attempt to strike a balance between transparency and prudence. The ACLU and others have criticized the law as granting law enforcement agencies such broad discretion that it hinders the very purpose of the cameras (i.e. to build trust and enhance accountability).

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High Stakes Privacy Breaches – The First Business Associate Settlement Brings HIPAA Compliance Into Sharper Focus for Law Firms

Lynette Pitt — Thu, 28 Jul 2016 18:00:00 GMT

by Beth Stanfield, Lincoln Derr, PLLC

Since 2013, when the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) issued its Final Rule implementing revisions to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the potential for business associates to be sanctioned for privacy breaches has been a concern to law firms that regularly handle protected health information (PHI). A recent settlement involving a business associate brings that concern into sharper focus.

But first, a brief HIPAA refresher . . .

The 2013 revisions to HIPAA, which were mandated by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH Act), extended the privacy and security requirements originally focused on healthcare providers (or “covered entities”) to business associates. In recognition of the fact that most healthcare providers rely on outside providers to carry out various healthcare functions, the definition of “business associate” encompasses a wide variety of outside providers, such as third party administrators, CPAs, transcriptionists, and attorneys. In fact, the website for HHS provides several examples of groups that would be considered business associates under the HITECH Act, including “[a]n attorney whose legal services to a health plan involve access to protected health information.”

Given the high stakes associated with a potential privacy breach, law firms have been working to solidify their security measures and protocols both internally and with outside contractors to comply with all HIPAA and HITECH Act requirements. However, the recent business associate settlement published on the website for HHS provides greater insight into the potential for a HIPAA violation and the degree of security measures necessary to remain in compliance.

The subject of the settlement was Catholic Health Care Services of the Archdiocese of Philadelphia (CHCS), a non-profit organization providing management services to six nursing homes. In February 2014, OCR was notified by each of the nursing homes regarding a breach of unsecured electronic PHI (ePHI). The potential breach arose from a stolen iPhone, which contained ePHI of nursing home residents. Specifically, the phone contained social security numbers, information regarding diagnosis and treatment, medical procedures, names of family members and legal guardians, and residents’ medication information.

After investigating the incident, OCR determined that CHCS (1) failed to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI held by CHCS; and (2) failed to implement appropriate security measures sufficient to reduce the risks and vulnerabilities to a reasonable and appropriate level. The investigation revealed that the phone, which was issued by CHCS to an employee, was not encrypted or password protected. In addition, CHCS did not have any policies addressing removal of devices with PHI or what to do in the event of a security incident. Finally, OCR determined CHCS did not have a “risk analysis” or “risk management plan.”

As a part of the settlement, CHCS agreed to pay $650,000.00 and entered into an “Agreement and Corrective Action Plan” on June 24, 2016.

The corrective action measures outlined in the Agreement are instructive for business associates. For example, CHCS was required to promulgate numerous policies addressing the following items:

encryption of ePHI;
password management;
security incident response;
mobile device controls;
information system review;
security reminders;
log-in monitoring;
a data backup plan;
a disaster recovery plan;
an emergency mode operation plan;
testing and revising of contingency plans;
applications and data criticality analysis;
automatic log off;
audit controls; and
integrity controls.

The Agreement further required CHCS to review its policies at least annually (if not more often) and distribute them to its workforce. CHCS was also required to obtain “signed written or electronic initial compliance certification from all members of [its] workforce” and provide security training.

In addition to the financial and administrative implications of OCR’s investigation, perhaps of even greater concern to business associates is the negative exposure associated with such a well-publicized settlement arising from a fairly common occurrence – theft of an iPhone. While the Agreement and Corrective Action Plan disclaims any admission of liability on the part of CHCS, the Agreement is fully accessible to the public and available here.

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Up In the Air: The Effect of Estate of Armstrong ex. rel. Armstrong v. Vill. of Pinehurst On Future TASER Usage in the Fourth Circuit

Lynette Pitt — Wed, 27 Jul 2016 13:00:00 GMT

by Lori Keeton, Lincoln Derr, PLLC

What should law enforcement officers do if faced with a “a non-criminal” “mentally ill man being seized for his own protection, [who is] seated on the ground… hugging a post to ensure his immobility… surrounded by three police officers and two Hospital security guards, [who has] failed to submit to a lawful seizure for only 30 seconds”?

What should they do if faced with a 260-pound, strong, unrestrained, mentally ill man who refuses to comply with their attempts to arrest him and is trying to kick them who moments earlier had been walking erratically near a busy road and “is a danger to himself having been off his medication for several days and [is] engaging in self-destructive behaviors…” and a possible danger to others and the officers do not know if he is armed and have tried to use lesser force in the form of verbal commands and soft hands techniques without success?

And what would you expect them to do if these two scenarios described the same individual?

These are the types of perplexing questions that law enforcement officers are called upon to answer every day and that the Fourth Circuit recently grappled with in Estate of Armstrong ex rel. Armstrong v. Vill. of Pinehurst, 810 F.3d 892 (4th Cir. 2016).

In Armstrong, the police were called to assist with a subject suffering from bipolar disorder and paranoid schizophrenia who had gone off his medication. His sister had convinced him to go to the hospital after watching him engage in erratic and self-injurious behaviors. While they were in the process of obtaining involuntary commitment papers, Armstrong ran away. The police were called. When Armstrong learned about the commitment papers, he wrapped himself around a sign and refused to leave. In the course of trying to effectuate the commitment, officers utilized their Taser/electronic control device (“ECD”) five times in drive stun mode, but it did not stop Armstrong from resisting. Ultimately, the officers and two hospital security guards physically removed him from the post, laid him face-down on the ground and cuffed both his arms and his legs. Soon after, the officers saw that Armstrong was unresponsive. He was pronounced dead shortly after arrival at the nearby hospital.

The family sued the Village of Pinehurst and TASER International in the Middle District of North Carolina alleging violations of the decedent’s Fourth and Fourteenth Amendment rights by using excessive force. The United States District Court for the Middle District of North Carolina granted summary judgment for the officers based on qualified immunity.

On appeal, the United States Court of Appeals for the Fourth Circuit upheld the granting of summary judgment, finding that the ECD usage was excessive force but the officers were nonetheless entitled to immunity because it was not clearly established at the time of this incident that Mr. Armstrong had the right “not to be tased while offering stationary and non-violent resistance to a lawful seizure.”

Ironically, however, it isn’t the Court’s ruling per se that has garnered national attention, but rather the Court’s use of the opinion to put officers “on notice” of the limited situations in which they may lawfully use ECDs in the future.

In particular, the Fourth Circuit characterized the use of ECDs- in either probe mode or drive stun mode- as “[p]ainful, injurious [and] serious” and advised that the level of resistance required to justify use of an ECD must rise to the level of a “risk of immediate danger.”

The obvious question thus becomes what is a “risk of immediate danger”? Rather than providing examples of what would satisfy this standard, the Court offered guidance as to what would not be sufficient:

The fact that a subject is unrestrained.
The fact that a subject is actively resisting.
The fact that a subject is noncompliant.
The fact that a subject is unrestrained, actively resisting AND noncompliant.

We can also extrapolate some guidance from the Court’s application of the Graham v. Connor factors in analyzing the reasonableness of the force at issue:

FACTORS THAT FAVOR ECD USAGE

The subject is believed to have committed a serious/violent crime.
The subject is advancing towards the officers (or someone else).
The subject is/could be armed.
The subject is violently resisting.
The subject is a danger to others.
The danger the subject poses could be mitigated by ECD usage.
Lesser uses of force have been unsuccessful.

FACTORS THAT WEIGH AGAINST ECD USAGE

The subject is mentally ill.
The subject is stationary or being restrained.
The subject is non-violent.
The number of officers on the scene outnumbers the number of subjects.
The subject is only a danger to himself.
The proposed use would be contrary to manufacturer’s instructions.
The officers have only been working to restrain the subject for a brief period of time.

Justice Wilkinson wrote a concurring opinion for the case joining in the decision of the majority but differing in its analysis. “The majority… left it all up in the air” according to Wilkinson.

What is clear is that while ECDs have been marketed as an alternative to deadly force since their inception, the Fourth Circuit has significantly narrowed the gap between when an officer can lawfully use an ECD versus when an officer can use deadly force and more or less abolished any legal difference between the use of ECDs in drive stun mode versus probe mode.

And the fight isn’t over yet. The defendants have recently petitioned the United State Supreme Court to review the case and TASER International, the National Fraternal Order of Police and the Southern States Benevolent Association have submitted amicus briefs joining in the request. Stay tuned….

To read the opinion, click here.

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The Magic of the Paralegal

Lynette Pitt — Fri, 22 Jul 2016 14:00:00 GMT

by Noelle C. LeBlanc, Lincoln Derr, PLLC

Paralegal?

Exactly what is a paralegal? Why should you care? Interesting question. Intriguing answer.

If you Google, “What is a paralegal?” you would come across the following:

“The American Bar Association (ABA) defines a paralegal as: A person qualified by education, training or work experience who is employed or retained by a lawyer, law office, corporation, governmental agency or other entity and who performs specifically delegated substantive legal work for which a lawyer is responsible.”

The definition doesn’t sound important or glamorous; honestly it sounds pretty blah and boring. Either way, lawyers who partner with paralegals, clients who reap the benefits, and paralegals who are recognized as valuable team members know the truth.

In case you don’t…

Remember the classic story “The Wizard of Oz?” Dorothy and Toto navigating the harrowing Land of Oz in their quest to go home; banking on the hopes that “the Wizard” can make it all happen. Dorothy finally gains an audience with the “Great and Powerful Oz” only to uncover the mighty wizard is actually just an ordinary man “working magic behind the curtain.” Ironically, in spite of his ordinary appearance and limited magical abilities, he is the catalyst for Dorothy and Toto’s return home.

In the litigation world, paralegals are the “mighty wizards behind the curtain” working magic with education, training, skills and abilities to bring a litigation case “home.” To emphasize a few areas- paralegals handle the day-to-day progression of the case from inception to conclusion. Paralegals confirm the attorneys are on task, responsive, meeting deadlines, and prepared for any situation be it conferences with opposing counsel or ready for battle in the courtroom. Paralegals take on tasks (under the strict supervision of their attorneys) like communications with clients, court personnel, opposing counsel, experts and witnesses. Paralegals draft key pleadings for review by the attorneys. Paralegals perform important research and make sure that adherence to civil rules are being followed. N.C. Certified Paralegals, must meet high standards of education, experience and complete continuing legal education requirements annually. Furthermore, N.C. Certified Paralegals must adhere to the same ethics and professional conduct as their attorneys.

Best part of all… paralegal rates are substantially less than attorneys. Paralegals afford the attorney the ability to focus their talents on more complex legal work while providing their clients with exceptional, affordable services when they utilize paralegals to complete tasks that need only minimal review and supervision.

Bottom line: The answer to this question is paralegals are indeed the “magic behind the curtain” and they afford the client the security in knowing they are not only receiving exceptional client service but also receiving the most “bang for their buck!”

So my question to you…. Does your legal team include skilled paralegals? If not, you might be missing out on the “magic.”

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Proposed Revisions to the “Ancient Documents” Hearsay Exception Under Federal Rule 803(16) and Its Implications for Trial Practice

Lynette Pitt — Wed, 29 Jun 2016 18:38:59 GMT

by Jonathan Reich, Womble Carlyle Sandridge & Rice, LLP

Representing clients with dormant or long-tail claims can be a challenge for a number of reasons. Long-tail claims – think asbestos, pollution, sexual molestation, and (increasingly) wrongful convictions – often take decades to develop from the initial tort into the subsequent lawsuit. Sometimes these are products liability lawsuits, where memoranda from the 1960s and 1970s is sought to be admitted at trial. Sometimes these cases are post-exoneration wrongful convictions matters, where the underlying conviction was obtained decades ago. And, sometimes, any of these fact patterns can also initiate bet-the-company insurance coverage litigation. Whether facing a barrage of products liability lawsuits, an alleged civil rights/wrongful conviction from the 1980s, or an insurance coverage matter arising from either, the ability admit into evidence original documents may play a critical part of obtaining summary judgment or a favorable jury verdict. Under both North Carolina Rule of Evidence 803(16) and its federal counterpart, statements in a document which is at least 20 years old and whose authenticity is establish are an exception to the general prohibition against the admissibility of hearsay under Rule 802. This exception is titled “Statements in Ancient Documents” in both the state and federal rule, and has come to be known as the ancient documents exception to the hearsay rule.

Over the last several years, the Judicial Conference Advisory Committee on Evidence Rules has begun the process of removing the ancient documents exception from the Federal Rules of Evidence. This body has proposed amendments to Federal Rule of Civil Procedure 803(16) and has initiated the process of accepting public comments and taking testimony regarding the deletion of the ancient documents rule. This rather innocuous proposal may have major ramifications for tort lawyers generally, including defense lawyers and insurance coverage lawyers.

Although the underlying rationale for this hearsay exception stands on a shaky foundation – a document does not become more reliable when it ages an additional year from being 19 years old to being 20 years old – the rule serves a pragmatic purpose. In many cases with long-tail claims, it is simply impossible for the plaintiff or defendant to locate witnesses which can lay the proper foundation and testify based on personal knowledge about a document which may have been created decades ago.

Under current Federal Rule 803(16), if a document is more than twenty (20) years old, and appears authentic, it is admissible for the truth of its contents. Under the Advisory Committee on Evidence Rules’s pending proposal, Rule 803(16), would be deleted entirely. The Advisory Committee on Evidence Rules reasoning is that the growing presence of ESI – electronically stored information – will lead to an abuse of Rule 803(16) in the future because of the relative ease of retaining documents in excess of 20 years. As a result, the drafters fear an abuse of this hearsay exception in the future.

These future fears have everyday, real-world implications for practicing defense lawyers and insurance coverage lawyers. Clients with long-tail claims, be they asbestos, other products liability, pollution, insurance coverage, or any other, often must rely to some degree on ancient documents. For example, insurance coverage disputes involving insurance policies from the 20th century sometimes rely on fractions of a complete insurance policy. In those cases, specialized insurance expert witnesses (known as “insurance archeologists”) are sometimes used to “reconstruct” the material terms and material exclusions of policies. This process is usually done with a mix of secondary evidence and ancient documents from either the policyholder or the insurer. See, e.g., Dart Industries, Inc. v. Commercial Union Ins. Co., 28 Cal. 4th 1063 (2002).

As clients defending claims well-know, the simple commercial reality is that they will sometimes not be able to produce a records custodian who can testify regarding ancient company documents. Similarly, it is a simple commercial reality that insurance companies and insurance agents (and even law firms!) are usually not required by law to keep every piece of paper generated for an indefinite period of time. With regard to insurance coverage actions for long-tail claims, this is particularly true. In those cases, the defendant in the tort lawsuit often becomes the policyholder-plaintiff in the related coverage action. As plaintiff, it will carry the burden of proof with regards to establishing that a policy of insurance existed.

Under current practice, a witness with personal knowledge can who can testify about company records is often unavailable. It may be because that particular manager of the company has died, cannot be located, is outside the jurisdiction, or has a lack of memory. As a result, Rule 803(16) allows for the admissibility of ancient company documents, if, in conjunction with Rule 901(b)(8), they appear in a condition that creates no suspicion of authenticity and they are simply found in a place they would likely be. If the proposed abrogation of the ancient documents hearsay exception is approved and then incorporated into the Federal Rules of Evidence, any party attempting to prove the contents of an internal memo or ancient insurance policy will be required to produce a witness or additional business records which confirm that the proffered policy is a business record which was made at or near the time indicated on the document in the regular course of that enterprise’s business. Federal Rule of Evidence 803(6).

This proposed amendment to the Federal Rules of Evidence will also raise the stakes in forum battles. Removing the ancient documents hearsay exception from the federal rules will have a major impact in certain types of cases. Cases litigated in North Carolina state courts, where the ancient document rules will continue to apply, will be able to present additional evidence to the trier of fact.

Because long-tail claims will continue to be litigated in our court system, all participants should acknowledge that there remains a role for the ancient documents exception in the Rules of Evidence. Although the period for public written comment has closed, public testimony will be taken. Additionally, a number of lawyers and seven sitting United States Senators have written to oppose the abrogation of the ancient documents exception. Be on the lookout towards the end of the year to see whether the proposed amendment to Federal Rule 803(16) is adopted.

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The Defending Trade Secrets Act is a Big Deal, Especially for Employment Lawyers

Lynette Pitt — Fri, 27 May 2016 19:55:06 GMT

by Michael P. Thomas, Patrick Harper & Dixon, LLP

Those of you paying even the least bit of attention to the relationship between Congress and the President (not to mention within Congress) for the last few years will be surprised to learn that, on May 11, 2016, President Obama signed a bill that passed the Senate 87-0 and the House 410-2. It’s the “Defending Trade Secrets Act” and it contains some new tools that many lawyers who work for business and industry will find appealing in protecting our client’s intellectual property.

Before I get to that, however, most of the other write-ups I have seen on the DTSA have buried the lead, at least from an employment lawyer’s perspective. The DTSA contains significant new whistleblower protection for disclosure of trade secrets and notice requirements that must be included in employee contracts in order for employers to take full advantage of the benefits of the statute in the event of misappropriation.

The DTSA provides for complete immunity from criminal or civil prosecution for the disclosure of a trade secret either made either (1) “in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney… solely for the purpose of reporting or investigating a suspected violation of law” or (2) “in a … document filed [under seal] in a lawsuit or other proceeding….” 18 USC §1833(b). A whistleblower who files a retaliation suit is permitted to disclose the trade secret to her attorney, to use the trade secret in the proceeding, to file papers containing the trade secret under seal, and to seek and obtain a court order setting terms for disclosure of the trade secret. 18 USC §1833(c). To the extent trade secret information is related to any alleged wrongdoing by an employer, these whistleblower protections are robust.

The whistleblower protections go one step further, however, and provide a cause for immediate action by all employment attorneys. Employers who ask employees to sign any “...contract or agreement with an employee that governs the use of a trade secret or other confidential information…,” 18 USC §1833(b)(3), must now provide explicit notice of the whistleblower protections set forth in the DTSA in any such contract after May 11, 2016. Id. The notice can be in the contract or the contract can refer to the employer’s compliance policies. Id. “Employee” includes employees and independent contractors. 18 USC 1833(b)(4).

The penalty for failure to include the notice language is the inability to utilize the exemplary damages and attorney’s fee provisions of the DTSA in a suit for misappropriation – even if the defendant was not a whistleblower. 18 USC §1833(b)(3)(C).

So, at a minimum, it is time to revise any and all forms which employment lawyers use as a basis to draft non-compete, non-solicitation, confidentiality or other similar agreements with employees so that, going forward, agreements will contain such notices. You may also want to confer with your clients about revising existing agreements, though that has broader implications. A process for updating evergreen agreements that would otherwise automatically be renewed is worth discussing with your clients, too.

In substance, the DTSA provides a federal cause of action for trade secrets misappropriation claims where the products or services affect interstate commerce. The claims may be brought in state or federal court. The DTSA provides for general injunctive relief. Damages may be calculated either as actual loss plus disgorgement of unjust enrichment OR application of a reasonable royalty. Willful and malicious misappropriation justifies an award of exemplary damages up to 2 times the actual damages or royalty. Attorney’s fees are permitted to a prevailing party upon a showing of bad faith or willful and malicious action by the other party. The limitations bar is three years from actual or constructive discovery. 18 USC §1836.

The DTSA contains an elaborate provision for obtaining an ex parte order of seizure for products manufactured using misappropriated information. The procedure is analogous to the procedures for obtaining seizure of counterfeit goods or copyright infringing material. It permits a court to impound the products derived from misappropriated trade secrets based on a credible threat the products will be destroyed or hidden. Rigorous procedural and factual hurdles are set up by the statute. If you believe you might have the opportunity to put this provision to work, read the statute in detail.

The DTSA contains a precise definition of misappropriation and revises the definition of trade secret to focus on the economic value of having the secret information not be known to others who could derive economic value from knowing the information, rather than being secret from the public. 18 USC §1839.

With the exception of the immunity provision, the DTSA does not purport to preempt state law.

One final note for employment lawyers, the DTSA does not permit a judge to enjoin a person who is alleged to have misappropriated a trade secret from taking any particular employment and limits conditions which can be placed on employment in an injunction. Such limits must be based on evidence of actual threats of misappropriation and not merely on the fact that the individual knows the secret information. 18 USC §1836. Such an injunction cannot override other state or federal law limiting restraints on employment. Id. These requirements, on their face, however, do not appear to block a court from enjoining employment based on other factors, such as a non-compete agreement.

Mike Thomas is the 2015-2016 chair of NCADA's Employment Law Practice Group

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Comparing Federal and North Carolina Trade Secret Protection

Lynette Pitt — Tue, 10 May 2016 14:00:00 GMT

by Bob Meynardie, Meynardie & Nanney, PLLC

A new federal private cause of action to protect trade secrets appears imminent. Since North Carolina already allows private parties to bring a civil action to protect their trade secrets, we compare the two statutes and answer several practical questions related to the dual protection.

1. Do the statutes protect the same things?

The North Carolina Trade Secrets Protection Act (“NCTSPA”) defines a trade secret as business or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique, or process that derives independent actual or potential commercial value from not being generally known or readily ascertainable through independent development or reverse engineering by persons who can obtain economic value from its disclosure or use and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

The Federal Defense of Trade Secret Act (“FDTSA”) defines a trade secret as all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if the owner thereof has taken reasonable measures to keep such information secret and the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by the public.

Though the federal definition is much wordier, the two definitions are very similar. Essentially both statutes protect financial or technical information that has economic value because it is not generally known and the owner has taken reasonable steps to protect the secrecy of the information.

2. Does the same conduct constitute a misappropriation or violation of both statutes?

The Federal statute defines a misappropriation as the “acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means or disclos[es] or use[s] a trade secret of another without express or implied consent.” Improper means includes, among other things, acquisition “under circumstances giving rise to a duty to maintain the secrecy of the trade secret.” Notably, reverse engineering is not improper.

The NCTSPA defines misappropriation as “acquisition, disclosure, or use of a trade secret of another without express or implied authority or consent, unless such trade secret was arrived at by independent development, reverse engineering, or was obtained from another person with a right to disclose the trade secret.” Reverse engineering is lawful under the State statute as well.

In contrast to the FDTSA, the NCTSPA does not make knowledge or reason to know that the information is a trade secret an element of misappropriation. However, as discussed below, knowledge or reason to know significantly impacts the remedies available under the State statute.

3. Do the statutes offer the same remedies?

Damages are available under both the State and federal statutes. Under the State statute actual damages are measured by either the economic loss to the owner or unjust enrichment of the defendant. Punitive damages are available if the misappropriation was willful or malicious.

Under the FDTSA, damages are available measured by damage to the owner, unjust enrichment to the defendant, or as a reasonable royalty. If the misappropriation is willful and malicious exemplary damages are available in an amount up to three times (House version; two times in the Senate version of the Bill) the amount of compensatory damages awarded.

Both the State and federal statute provide for injunctive relief to prevent the use or disclosure of trade secrets. The State statute provides that an injunction may condition use of the trade secret on the payment of a reasonable royalty. Under the State statute, the knowledge or reason to know that the information is a trade secret has significant effects on the remedies available.

For instance, no damages are available for use prior to the time the defendant knew or had reason to know it was a trade secret. If the defendant has materially changed its position prior to knowledge then she cannot be enjoined but may be required to pay a royalty. Further, if the defendant has acquired inventory without knowledge he may dispose of the inventory without payment of a royalty.

Preservation of Secrecy: The NCTSPA explicitly allows the court to take steps to preserve the secrecy of the trade secret. Since by definition, the secret derives value from not being publicly known anything less would be self-defeating. Under the State statute, this includes:

sealing the record
in-camera proceedings and
protective orders.

In addition to the means of preservation available under the NCTSPA, the federal statute also provides for “civil seizure” of the trade secret. In some cases, this may be a very important remedy but there is a heightened threshold to be met before it is available. The details of civil seizure under the FDTSA is beyond the scope of this post but will be discussed in a subsequent blog post.

4. Can the prevailing party recover attorneys’ fees?

Under the FDTSA, reasonable attorneys’ fees are available to the Plaintiff where the trade secret is willfully or maliciously misappropriated or where a motion to terminate an injunction is made in bad faith. Fees are available to the defendant when the claim of misappropriation or an opposition to a motion to terminate the injunction is made in bad faith.

Likewise, under the NCTSPA, attorneys’ fees are available to the prevailing party if the claim of misappropriation was made in bad faith or if the misappropriation was willful or malicious.

5. When must the action be brought?

A claim under the North Carolina statute must be brought within three years of the misappropriation or within three years of when it was or reasonably should have been discovered.

The Senate and House versions of the FDTSA have different statutes of limitation. The Senate version allows three years but the House would allow five years. Although a five year statute of limitations in some cases may make a difference, waiting five years to protect a valuable trade secret may impact the determination of how valuable a secret it is in the first place.

This article was originally posted on Mr. Meynardie's blog: http://www.businesslawyer-nc.com/blog/

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A Discovery Rule is Bern: The Eastern District Bankruptcy Court Breathes Life Into G.S. § 1-50(a)(5)f.

Lynette Pitt — Wed, 27 Apr 2016 20:00:00 GMT

by Robin A. Seelbach, Wall Templeton & Haldrup, P.A.

In re New Bern Riverfront Dev., LLC, Case No. 8:10-ap-23 (Bankr. E.D.N.C.).

Recent orders from the Bankruptcy Court for the Eastern District of North Carolina and the District Court for the Eastern District of North Carolina provide authority for a general contractor, or any other contractor, to apply the discovery rule in N.C. Gen. Stat. § 1-50(a)(5)f. to its construction defect claims, even if the contractor is not the owner of the project.

The opportunity for risk transfer for non-owners in construction defect cases may have just gotten a little broader. In In re New Bern Riverfront Dev., LLC, Case No. 8:10-ap-23 (Bankr. E.D.N.C.), the Bankruptcy Court for the Eastern District of North Carolina held N.C. Gen. Stat. § 1-50(a)(5)f. tolled the three-year statute of limitations for negligence and contract-based claims until the defect became apparent or should reasonably have become apparent to the non-owner claimant. While North Carolina jurisprudence is replete with cases recognizing a discovery rule for claimants that own the damaged property at issue, this is the first decision applying North Carolina law that has recognized a discovery rule for non-owner claimants (e.g., general contractors, first-tier subcontractors, second-tier contractors, etc.). Depending on the facts of your case, risk transfer options for a non-owner client may extend beyond those parties that performed work on the project within three years from the date suit was filed.

In re New Bern Riverfront Dev., LLC, arose out of the construction of the Skysail Luxury Condominiums in New Bern, North Carolina (the “Project”). Substantial completion of all relevant work occurred on April 15, 2009 (depending on who you ask). In March 2009, New Bern Riverfront Development, LLC (“New Bern”), the owner/developer of the Project, filed suit in Wake County Superior Court alleging construction defects and asserting claims against the general contractor, Weaver Cooke Construction, LLC (“Weaver Cooke”), Weaver Cooke’s surety, the architect, and select concrete and design subcontractors. In November 2009, New Bern filed a petition for relief under Chapter 11 of the Bankruptcy Code and the state court defect action was also removed to the Bankruptcy Court for the Eastern District of North Carolina, where it progressed as an adversary proceeding.

In 2010, Weaver Cooke filed a third-party complaint against the banks that financed the Project, but did not add any building envelope subcontractors for the Project. On April 19, 2012, Weaver Cooke filed a motion for leave to file a second third-party complaint asserting claims of negligence, contractual indemnity, and express warranty against building envelope subcontractors. Citing the substantial completion date of April 15, 2009 – or even earlier completion dates – the subcontractors claimed the three-year statute of limitations under N.C. Gen. Stat. § 1-52(1) and (5)1 barred Weaver Cooke’s claims.

After extensive discovery, almost all of Weaver Cooke’s subcontractors filed motions for summary judgment. The Bankruptcy Court (Judge Stephani Humrickhouse) issued a series of orders on these motions beginning in June 2014 and continuing through December 2014. One of the main issues litigated was whether Weaver Cooke’s breach of contract and/or negligence claims were subject to a statute of limitations defense or if they could be saved by tolling under a discovery rule. There was extensive oral argument and briefing on whether or not the discovery rule in N.C. Gen. Stat. § 1-52(16) would apply to these claims since that statute, by its plain language, only applies to claims for “personal injury or physical damage to claimant’s property.” (emphasis added). The subcontractors argued persuasively that this was inapplicable because Weaver Cooke, the general contractor, did not own the property that was damaged.

Instead of relying on N.C. Gen. Stat. § 1-52(16), Weaver Cooke asserted it was entitled to tolling under N.C. Gen. Stat. § 1-50(a)(5)f., which states:

For purposes of the three-year limitation prescribed by G.S. 1-52, a cause of action based upon or arising out of the defective or unsafe condition of an improvement to real property shall not accrue until the injury, loss, defect or damage becomes apparent or ought reasonably to have become apparent to the claimant.

The Court accepted Weaver Cooke’s position and applied the plain language of the tolling provision in N.C. Gen. Stat. § 1-50(a)(5)f. to find that Weaver Cooke’s claims did not accrue until the injury became “apparent or aught reasonably to have become apparent to the claimant.” This is the first written opinion applying the discovery rule under N.C. Gen. Stat. § 1-50(a)(5)f. to a non-owner. In support of its holding, the Court cited Oates v. Jag, Inc., 314 N.C. 276, 333 S.E.2d 222 (1985). The Supreme Court in Oates, however, applied N.C. Gen. Stat. § 1-50(a)(5)f. to toll claims by a homeowner plaintiff, not to a litigant that did not actually own the property at issue.

After determining that Weaver Cooke was entitled to tolling of the statute of limitations, the Court then performed factual analysis of accrual of the claims against each individual subcontractor under Pembee Mfg. Corp. v. Cape Fear Constr. Co., 313 N.C. 488, 329 S.E.2d 350 (1985). Based on the facts of a given claim, the Court reached different results for different subcontractors. See, e.g., Docket Number 882 (filed 6/3/14) (denying summary judgment on statute of limitations) and Docket Number 884 (filed 6/10/14) (granting summary judgment on statute of limitations). The Court’s discussion of the accrual issue and the governing statutes is in Docket Number 882 (“Order on Summary Judgment Regarding Statute of Limitations: East Carolina Masonry, Inc.”). Later orders on the statute of limitations issue generally refer back to this order and do not give the full explanation. These orders do not appear to be available through Westlaw but can be accessed through PACER.

The majority of Judge Humrickhouse’s orders on the parties’ various summary judgment motions are currently on appeal to the Eastern District of North Carolina. In the first decision to be handed down on appeal, Judge Britt agreed with Judge Humrickhouse’s application of the tolling provision in N.C. Gen. Stat. § 1-50(a)(5)f. and affirmed the denial of summary judgment to Weaver Cooke’s masonry subcontractor. See East Coast Masonry, Inc. v. Weaver Cooke Construction, LLC, Case No. 5:15-CV-252-BR, Docket Number 77 (filed 1/20/16) (E.D.N.C.). Given the number of appeals currently pending in the Eastern District from the Bankruptcy Court’s orders, this issue may well be appealed to the Fourth Circuit.

While these federal opinions are not binding authority on North Carolina state courts, they are persuasive authority on how the plain language of N.C. Gen. Stat. § 1-50(a)(5)f. should be applied. Based on this favorable jurisprudence, non-owners will likely be emboldened to seek claims against entities that completed their work outside the three-year statute of limitations more frequently. The issue, however, is far from settled. There is very real tension between the federal courts’ application of this statute and opinions from North Carolina state courts holding that the statute of limitations for a breach of contract claim begins running as of the date of breach. See, e.g., Kaleel Builders, Inc. v. Ashby, 161 N.C. App. 34, 43-44, 587 S.E.2d 470, 477 (2003) (“A cause of action based upon breach of a contract accrues on the date of the breach, at which time the three years begin to run.”) (citing Miller v. Randolph, 124 N.C. App. 779, 780, 478 S.E.2d 668, 670 (1996)). Ultimately, these issues are likely to be speed bumps rather than roadblocks on the nascent rule’s journey to becoming state law.

1In general, a cause of action based on breach of contract and/or breach of warranty accrues on the date of the breach, at which time the three years begin to run. Kaleel Builders, Inc. v. Ashby, 161 N.C. App. 34, 43-44, 587 S.E.2d 470, 477 (2003). “A cause of action based on negligence accrues when the wrong giving rise to the right to bring suit is committed, even though the damages at that time be nominal and the injuries cannot be discovered until a later date.” Harrold v. Dowd, 149 N.C. App. 777, 781, 561 S.E.2d 914, 918 (2002).

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A Primer on Rollover-Activated Side Curtain Airbags

Lynette Pitt — Mon, 25 Apr 2016 15:00:00 GMT

by Stacy M. Imler, Ph.D., P.E., Exponent, Inc.

History

The first rollover-activated side curtain airbags (RSCAs) were offered by Ford Motor Company in their 2002.5 model year Ford Explorer/Mercury Mountaineer 4 door sport utility vehicles, manufactured after March 4, 2002. The purpose of this technology was to provide incremental benefit to belted occupants in rollover crashes. Implementation of this technology into production vehicles involved rigorous developmental and testing work to design, develop, and test the overall system which included the curtain airbag, seatbelt pretensioners, restraint control module, and platform-specific algorithms for sensing and deployment, all integrated within a specific vehicle platform. Since the introduction of RSCAs, vehicle manufacturers have continued to incorporate this technology into their vehicle fleet at a steady rate with a sharp increase in market insertion starting in the 2010 model year (Figure 1, N

HTSA, DOT HS 811 882, 2014).

RSCAs are passive supplemental restraint systems to seatbelt use. Analysis of field accident data demonstrates that seatbelt use is highly effective in prevention of occupant ejection and reduction of serious and fatal injury in rollovers. For example, Malliaris and Digges (SAE 1999) found that 98.8% of belted pickup rollover occupants did not sustain serious or greater injury. Further, they reported serious and greater injury rates of 1.4% to 3.1% for belted passenger vehicle occupants in rollover crashes.

Initial development of RSCAs was directed at providing incremental head protection through cushioning, as well as a level of supplemental containment through reduced portal size. These objectives were balanced with the goal of minimizing injury potential associated with deployment and occupant interaction with the device itself (e.g., the system must “do no harm”). The resulting systems have evolved and continue to evolve in response to regulatory efforts, but have finite coverage, finite energy capacity, and finite head cushioning capacity. These concepts are demonstrated in the National Highway Traffic Safety Administration’s (NHTSA’s) guided impactor testing of production systems, wherein it has been demonstrated that the greatest retentive capacity occurs in the regions where the curtain is supported by vehicle structures (e.g., at the upper rear aspect for the front window positions). The lowest retentive capacity occurs at the unsupported perimeter of the curtain airbags or in areas of limited coverage. In the region of lower retentive capacity, tests have demonstrated motion of the guided impactor well beyond the glass plane and boundaries of the RSCAs, resulting in ejection of the impactor. More generally, this testing demonstrates that forceful occupant loading into an inflated RSCA results in movement of the RSCA into and through the window plane and can result in occupant ejection.

Published research examining field accident data has shown that an occupant’s injury risk cannot be reduced to zero through implementation of a particular safety countermeasure, particularly for occupants involved in severe crashes. Analysis of initial field accident data which includes vehicles equipped with RSCAs demonstrates estimates of fatality reduction by approximately 20% to 40% (Padmanaban and Fitzgerald, IRCOBI 2012; NHTSA, 2014). Examination of the distribution of rollovers shows that the average rollover crash in the field involves less than 2 quarter revolutions (Gloeckner et al., AAAM 2007), and it is well established that occupant injury potential increases with corresponding increases in the number of quarter revolutions (Moore et al., AAAM 2005). Accordingly, to estimate RSCA efficacy in multiple roll events, the NHTSA specifically incorporated this relationship with recognition of reduced RSCA efficacy with increased exposure for belted, partially ejected occupants (NHTSA FRIA, 2011). Field accidents contain examples of fatal injury as a result of partial ejection even in the presence of a deployed RSCA. These examples as well as those encountered in litigation, demonstrate that for belted occupants, the presence of a deployed RSCA cannot preclude partial ejection or fatal injury.

In addition to ejection related injuries, research examining the effects on occupant kinematics and occupant loading in the presence of RSCAs has been performed in the context of catastrophic neck injuries, also referred to as “diving” injuries, sustained during rollover crashes as a result of torso augmentation at vehicle-to-ground impact. It has been shown in spin testing as well as in full-scale rollover testing that the presence of an RSCA does not prevent the up-and-out motion of a belted dummy. Further, the presence of an RSCA does not prevent the head from coming into contact or close proximity to the interior of the roof nor does it prevent the head-neck-torso alignment needed for “diving” injuries (Heller et al., SAE 2015; Newberry, Imler, et al., SAE 2014). Rollover component system testing demonstrated that the use of pretensioners and RSCAs did not preclude head contact with the roof and had a limited effect on the dummy neck loading at roof to-ground impacts (McCoy, SAE 2010). These tests demonstrate the potential for occupants to sustain catastrophic neck injury even in the presence of a deployed RSCA.

As with considerations for implementation of all safety countermeasures, the incremental benefits in safety provided by RSCAs need to be balanced with the goal of minimizing occupant injury potential related to deployment (i.e., the safety countermeasure should “do no harm”). As supported by field accident data, there are limitations to the efficacy of rollover curtain technologies, particularly in high severity rollover crashes. Further, the design and performance goals need to be balanced with the inherent risks, to result in a system which will increase occupant safety. However, the resulting system cannot mitigate all serious injuries. For a particular rollover crash, the occupant injury outcome related to the performance of the rollover curtain technology is dependent on the vehicle-, occupant-, and crash specific parameters.

FMVSS No. 226: Ejection Mitigation

On January 19, 2011, nearly a decade after vehicle manufacturers first introduced RSCAs into production vehicles, Federal Motor Vehicle Safety Standard (FMVSS) No. 226, “Ejection Mitigation”, was established “to reduce the partial and complete ejection of vehicle occupants through side windows in crashes, particularly rollover crashes.” As detailed in the Final Rule, ejection mitigation countermeasures are required to limit the outboard displacement of a projected headform to 100 mm (3.9 in) beyond the inside surface of the window glazing of the portal. The NHTSA anticipated that manufacturers will modify their existing side curtain airbags through increased window coverage, increased inflation duration, and tethering geometry changes to meet the standard. The agency asserted, “full window opening coverage was key to the effectiveness of the curtain in preventing ejection.” The phase-in schedule for FMVSS 226 requires that a percentage of vehicles meet the new requirement beginning September 1, 2013, and will require that all new vehicles meet the standard by September 1, 2017.

To test for the 100 mm displacement criterion, an 18 kg (40 lb) headform is projected at impact speeds of 20 kph (12.4 mph) and 16 kph (10 mph), at 1.5 and 6 seconds, respectively, following curtain airbag deployment. As per the Final Rule, these tests “replicate the forces that an occupant can impart to the curtain during the rollover event as well as during side impacts.” Impact target locations are determined based on the vehicle specific geometry of the side daylight openings. Pertaining to the specific ejection mitigation countermeasure, the standard “does not allow the use of movable glazing as the sole means of meeting the displacement limit of the standard (i.e., movable glazing is not permitted to be used without a side curtain air bag).” Further, the second impact, executed at 6 seconds following curtain deployment, must be performed with the glazing retracted or removed from the daylight opening.

Conclusions

Rollover-activated side curtain airbags were first available in late 2002 model year vehicles, but only after extensive development and testing performed by component and vehicle manufacturers. Since then, introduction of this technology into the vehicle fleet has followed a phase-in approach for multiple reasons, including technological challenges, still-limited field performance data, and the potential for unintended consequences. As this technology continues to evolve, design and performance goals need to be balanced with the inherent risks, to result in a system which will increase occupant safety. However as with all safety countermeasures, the resulting system cannot mitigate all serious injuries. Evaluation of occupant injury outcome related to the performance of RSCA technology in a specific rollover crash is dependent on the vehicle-, occupant-, and crash specific parameters.

Citation abbreviations: SAE – Society of Automotive Engineers; IRCOBI – International Research Council on Biomechanics of Injury; AAAM – Association for the Advancement of Automotive Medicine.

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About the Author: Dr. Stacy Imler is a Managing Engineer in Exponent’s Atlanta office. Dr. Imler is a licensed engineer who specializes in injury biomechanics and her work includes evaluation of the effects of existing or hypothetical safety countermeasures such as airbags and seatbelts on injury outcome. She earned her undergraduate degree in Mechanical Engineering at Lehigh University and her Masters and PhD in Mechanical Engineering at Georgia Tech.

Don’t Have A Valid Trade Secret Claim Against Your Departing Employee? Have No Fear, NC's New Ag-Gag Law Is Here

Lynette Pitt — Fri, 26 Feb 2016 17:52:35 GMT

by Josh Durham, Bell Davis & Pitt, P.A.

North Carolina's new state law 2015-50 is getting a lot of attention these days, and for good reason. For starters, the law brings to mind the Primetime Live controversy from the early nineties, when ABC employees obtained employment at Food Lion in order to record certain food handling and sales practices. North Carolina's new law would’ve given Food Lion a new remedy against ABC, as it addresses those situations in which an employee does the following acts:

enters a "nonpublic area” of an employer’s business;
does so for a reason "other than a bona fide intent of seeking or holding employment or doing business with the employer;”
records images or sound without authorization; and
causes damage or harm to the business.

The new law also brings with it a lot of controversy. Critics call it an “ag-gag” law, because they fear it will stifle legitimate investigations into farms and food processing facilities. Critics also say that the new law will hamper investigations into other types of businesses as well, such as nursing homes and daycare centers. While the law provides some limited exceptions, including those for law enforcement, it’s still a violation to go to the press. Governor McCrory actually vetoed the bill last year, saying that “it does not adequately protect or give clear guidance to honest employees who uncover criminal activity,” but the legislature overrode the Governor’s veto.

The new law took effect last month, and People for the Ethical Treatment of Animals; Center for Food Safety; Animal Legal Defense Fund; Farm Sanctuary; Food & Water Watch; and Government Accountability Project are among those who have already filed suit in an effort to declare the law unconstitutional. The New York Times recently blasted the law, claiming that “[t]he secrecy promoted by ag-gag laws should have no place in American society."

But there’s one part of the new law that often gets overlooked in these discussions. It applies to a situation that I’ve seen numerous times in my litigation practice.

Imagine this. John Smith has been a loyal and faithful employee of XYZ Sales for years, but he lately has grown disenchanted with his job. It’s just not as fulfilling as it once was. He seeks other employment in his same field, finds a new job, and provides his two weeks’ notice. One day during the notice period, he secretly downloads a customer list and other company information. He uses this information at his new job. XYZ Sales finds out about it, and let’s just say it’s not happy.

Before this new law, XYZ Sales might have filed suit against Smith for breach of a confidentiality agreement, if he in fact ever signed one. Unfortunately, too few employers make use of such an agreement. XYZ Sales also might have tried to make a claim under the federal Computer Fraud and Abuse Act (“CFAA”), which applies to situations in which someone accesses another’s computer without authorization or in which someone exceeds his or her authorized access. Unfortunately for XYZ Sales, courts in our region have dismissed such CFAA claims, because John Smith technically had the right to access the information. He was, after all, still an employee. That he might have copied the information with ill intent is irrelevant under the CFAA.

This leaves XYZ Sales with a possible claim for misappropriation of trade secrets, but this can be extremely hard. Courts in our area require employers to describe such trade secrets with sufficient particularity in their pleadings; merely alleging that an employee stole “processes,” “strategic information,” “designs,” “marketing plans,” and even “customer lists,” can be insufficient. Also, to succeed on its trade secret claim, XYZ Sales must prove that the information is not generally known to others, that the information is valuable to others because of its secrecy, and that it took reasonable steps to protect the secrecy of the information. These are extensive, and expensive, parts of any trade secret litigation.

But have no fear, the ag-gag law is here. In addition to its prohibitions against unauthorized recording, the new law provides a remedy against any employee who "enters the nonpublic areas of an employer's premises for a reason other than a bona fide intent of seeking or holding employment or doing business with the employer and thereafter without authorization captures or removes the employer's data, paper, records, or any other documents and uses the information to breach the person's duty of loyalty to the employer.” If John Smith indeed went to work that day intending to copy that information, it looks like XYZ Sales has a claim against him under the new act.

In pursuing such a claim, XYZ Sales will not have to prove that the information was a secret or that it wasn’t widely known. XYZ Sales will not have to prove that it took any steps to protect the information or that the information was of great value to a competitor. From my reading of the new law, XYZ Sales will only have to prove that John Smith came to work with the intent to take the information, that he gained the information from a nonpublic part of its business, and that such actions damaged XYZ Sales. Under the law, XYZ Sales will be able to recover all damages that Smith caused, plus $5,000 for each day that Smith committed a violation. XYZ Sales can also recover its attorney’s fees.

From a public policy perspective, it will indeed be interesting to see how the courts rule on the attacks to the new law’s constitutionality. It is undisputed that the press has been a powerful force for change in American history, and the ag-gag law does seem to deprive it of potentially valuable sources of information.

But from a litigator’s perspective, I can’t wait to see how, and to what extent, companies like XYZ Sales make use of the new law in cases involving departing employees.

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Double Immunity: Protecting the Corrective Action Process Under State and Federal Law

Lynette Pitt — Wed, 27 Jan 2016 22:30:00 GMT

by Jay C. Salsman, Harris Creech Ward & Blackerby, P.A.

In North Carolina, a physician seeking to challenge the outcome of a corrective action proceeding taken against the physician’s hospital privileges faces substantial obstacles. The Health Care Quality Improvement Act establishes a presumption of immunity for a professional review body participating in a corrective action, and the physician has the burden of overcoming this immunity. Additionally, North Carolina statute establishes a broad grant of immunity to medical review committee members in corrective action proceedings. Importantly, the North Carolina peer review statute also creates an evidentiary privilege preventing the introduction of evidence of the proceedings of a medical review committee, inclusive of the records and materials it produces. When combined with the presumption of immunity under the HCQIA, the evidentiary privilege creates a powerful shield from liability for defendants.

The Immunity Statutes

N.C.G.S. § 131E-95(a). The North Carolina peer review statute provides a broad grant of immunity to medical review committee participants. A medical review committee member, in the absence of malice or fraud, “shall not be subject to liability for damages in any civil action on account of any act, statement or proceeding undertaken, made, or performed within the scope of the functions of the committee.” N.C.G.S. § 131E-95(a). A medical review committee is defined to include, among other things, a committee of a medical staff of a hospital formed for the purpose of evaluating medical staff credentialing. N.C.G.S. § 131E-76(5).

Note that on the face of the statute the immunity applies to “[a] medical review committee member.” Does the statute provide immunity to the hospital which forms the committee? While no North Carolina case has expressly addressed this issue, there is authority which at least implicitly supports the proposition that a hospital is entitled to immunity under the statute. In McKeel v. Armstrong, 96 N.C. App. 401, 386 S.E.2d 60 B1989), the Court of Appeals affirmed summary judgment in favor of a defendant-hospital on immunity grounds under Section 131E-95(a) without specifically analyzing whether a hospital falls within the scope of the immunity provision. Similarly, in Philips v. Pitt County Mem'l Hosp., Inc., -- N.C. App. --, 731 S.E.2d 462 (2012), the Court of Appeals found the defendant-hospital immune under Section 131E-95(a), again without any analysis of the statute’s application to a hospital. Notwithstanding, a convincing argument can be put forth that to further the clearly defined goals of the statute, the immunity must be afforded to a hospital which forms a medical review committee. Otherwise, the immunity could be easily avoided, and the legislative intent behind enactment of the statute frustrated, merely by suing the hospital instead of the committee members who are acting as agents of the hospital in carrying out their committee responsibilities.

Thus, when a physician files suit seeking damages to challenge the result of a corrective action proceeding (assuming the defendants fall within the purview of the statute), the pertinent issue becomes whether the plaintiff is able to establish malice or fraud to overcome the immunity. In McKeel, 96 N.C. App. at 408, 386 S.E.2d at 64, the Court of Appeals recognized that “in almost any situation [involving a corrective action], opportunities [exist to] compromise the investigation if the persons involved [are] motivated by malicious intent[.]” However, the court refused to infer malice or fraud from such opportunities since the plaintiff “failed to produce any evidence of such intent.” Thus, the plaintiff must produce specific evidence demonstrating the hospital or members of the medical review committees acted fraudulently or with malicious intent. Philips, 731 S.E.2d at 472.

The Health Care Quality Improvement Act (42 U.S.C. § 11111, et seq.). Under the HCQIA, professional review bodies are protected from damages suits for professional review actions taken:

(1) in the reasonable belief that the action was in the furtherance of quality health care,

(2) after a reasonable effort to obtain the facts of the matter,

(3) after adequate notice and hearing procedures are afforded to the physician involved or after such other procedures as are fair to the physician under the circumstances, and

(4) in the reasonable belief that the action was warranted by the facts known after such reasonable effort to obtain facts and after meeting the requirement of paragraph (3).

42 U.S.C. § 11112(a); see also 11111(a)(1). HCQIA immunity is not dependent on a hospital’s compliance with its bylaws, but rather, provides a uniform set of national standards. Wahi v. Charleston Area Med. Ctr., Inc., 562 F.3d 599, 609 (4th Cir. 2009). There is a presumption that these requirements have been met. 42 U.S.C. § 11112(a). The plaintiff bears the burden of proving that immunity does not attach. Bryan v. James E. Holmes Reg’l Med. Ctr., 33 F.3d 1318, 1333 (11th Cir. 1994).

The first element for HCQIA immunity is met if “the reviewers, with the information available to them at the time of the professional review action, would reasonably have concluded that their action would restrict incompetent behavior or would protect patients.” Bryan, 33 F.3d at 1334-35. Because the standard is an objective one, assertions of hostility or bad faith are irrelevant to immunity analysis. Poliner v. Texas Health Sys., 537 F.3d 368, 378 (5th Cir. 2008). The Act does not require an actual improvement in health care, nor does it require that the conclusions reached by the reviewers be correct. Poliner, 33 F.3d at 378.

The second element for HCQIA immunity is that the action in question be taken after a reasonable effort to obtain the facts of the matter. 42 U.S.C. § 11112(a)(2). The HCQIA only requires that the totality of the process leading up to the professional review action be evidenced by a reasonable effort to obtain the facts of the matter. Gabaldoni v. Washington Cnty. Hosp. Assoc., 250 F.3d 255, 261 (4th Cir. 2001).

The third requirement for immunity under the HCQIA is that the action be taken “after adequate notice and hearing procedures are afforded to the physician involved or after such other procedures as are fair to the physician under the circumstances.” 42 U.S.C. § 11112(a)(3). There are “safe harbor” provisions established by 42 U.S.C. § 11112(b) which, if satisfied, result in the reviewing body being deemed to have met the adequate notice and hearing requirements as a matter of law. However, failure to satisfy the safe harbor provisions does not mean the reviewing body failed to provide adequate notice and hearing procedures, so long as the procedures were fair under the circumstances.

Finally, the analysis under § 11112(a)(4) closely tracks the analysis under § 11112(a)(1). Poliner, 537 F.3d at 384. To the extent the inquiry differs at all from that under § 11112(a)(1), courts tend to examine whether the specific action taken was tailored to address the health care concerns raised. Id.

The Evidentiary Privilege under N.C.G.S. § 131E-95(b) and its application in actions challenging the corrective action process N.C.G.S. § 131E-95(b) provides:

The proceedings of a medical review committee, the records and materials it produces and the materials it considers shall be confidential . . . and shall not be subject to discovery or introduction into evidence in any civil action against a hospital . . . or a provider of professional health services which results from matters which are the subject of evaluation and review by the committee. No person who was in attendance at a meeting of the committee shall be required to testify in any civil action as to any evidence or other matters produced or presented during the proceedings of the committee or as to any findings, recommendations, evaluations, opinions, or other actions of the committee or its members . . . A member of the committee or a person who testifies before the committee may testify in a civil action but cannot be asked about the person’s testimony before the committee or any opinions formed as a result of the committee hearings.

On the face of the statute, the privilege is broad and absolute. But does the privilege apply when the corrective action itself is being challenged? The answer, it appears, is yes, even though (or perhaps because) application of the privilege severely handicaps a plaintiff-physician’s ability to overcome the immunity provided by state and federal law.

The purpose of the Hospital Licensure Act, under which Section 131E-95 is codified, is “to promote the public health, safety and welfare and to provide for basic standards for care and treatment of hospital patients.” Shelton v. Morehead Mem’l Hosp., 318 N.C. 76, 82, 347 S.E.2d 824, 828 (1986). The privilege was enacted because of fear that access to peer review investigations would stifle candor and inhibit objectivity. Id. “The Act represents a legislative choice between competing public concerns. It embraces the goal of medical staff candor at the cost of impairing plaintiffs’ access to evidence.” Id. There is no exception to this rule when the peer review itself is being challenged as the privilege applies to “any civil action.” Virmani v. Presbyterian Health Svs. Corp., 350 N.C. 449, 515 S.E.2d 675 (1999). Unlike the immunity provision under Section 131E-95(a), there is no “malice or fraud exception” to the evidentiary privilege under Section 131E-95(b).

Similar evidentiary privileges have generally been upheld in other jurisdictions, even when the corrective action is being challenged. For example, in Patton v. St. Francis Hosp., 539 S.E.2d 526 (Ga. Ct. App. 2000), the plaintiff-physician filed suit against the defendant-hospital related to the termination of the plaintiff’s staff privileges. Through discovery, the plaintiff sought information related to the peer review process which resulted in the termination of his privileges, but the court held that such information was immune from discovery under the Georgia peer review statute. Even assuming that the hospital acted with malice, the privilege nonetheless applied. To allow an allegation of malice to destroy the discovery shield would result in full discovery in virtually all peer review cases, contrary to the intent behind enactment of the statute. Id. at 528. Moreover, the failure of a hospital to comply with its bylaws does not destroy the privilege, as allowing such an exception “would virtually destroy the candor sought in the setting of hospital peer review.” The court also rejected the plaintiff’s argument that the privilege should not apply when the peer review process itself is challenged. To allow such an exception would similarly “swallow the rule,” as it is a “rare case in which disciplined physicians do not challenge the peer review process.” Id. at 529-30.

Similarly, in Holly v. Auld, 450 So.2d 217 (Fla. 1984), the Florida Supreme Court upheld a statutory peer review discovery privilege in a suit alleging defamation against members of a hospital’s credentials committee, after the plaintiff’s application for staff privileges was denied. The court held that the peer review discovery privilege applied, even in the face of a defamation claim. The court reasoned as follows:

Inevitably, such a discovery privilege will impinge upon the rights of some litigants to discovery of information which might be helpful, or even essential to their causes. We must assume that the legislature balanced this potential detriment against the potential for health care cost containment offered by effective self-policing by the medical community and found the latter to be of greater weight. It is precisely this sort of policy judgment which is exclusively the province of the legislature rather than the courts.

Id. at 20.

At least one state, however, has adopted a physician-plaintiff exception. In Hayes v. Mercy Health Corp., 739 A.2d 114 (Pa. 1999), the Pennsylvania Supreme Court held that the confidentiality provisions of its state peer review statute did not apply where a physician challenged his own peer review process. Instead, the court reasoned that the privilege applies only in actions where an outside party seeks to hold a health care provider for negligence.

In North Carolina, the Court of Appeals recently had occasion to apply the privilege in a case in which a plaintiff-physician brought suit against a hospital and several medical review committee members after a series of corrective actions which resulted in the revocation of the physician’s hospital privilege. In Philips v. Pitt County Mem'l Hosp., Inc., -- N.C. App. --, 731 S.E.2d 462 (2012), the trial court entered a protective order pursuant to Section 131E-95(b), finding the documents generated by various medical review committees were privileged. In light of the protective order, the entry of which the plaintiff failed to challenge on appeal, the plaintiff was unable to produce any evidence of malice or fraud sufficient to overcome the immunity afforded by Section 131E-95(a). Further, he was not able to admit evidence of allegedly defamatory testimony of several defendants presented before various medical review committees involved in the corrective action proceedings. Thus, the court applied the evidentiary privilege even though it deprived the plaintiff of crucial evidence. See also Virmani, 350 N.C. at 464, 515 S.E.2d at 686 (rejecting argument that the privilege under Section 131E-95(b) applies only to third party malpractice plaintiffs).

Practical Implications

Philips highlights the challenges a plaintiff faces when attempting to overcome statutory immunity, both under state and federal law, when the plaintiff lacks the ability to introduce evidence of the very proceedings the plaintiff is challenging. This difficulty is compounded by the fact that the HCQIA creates a presumption of immunity, which the plaintiff bears the burden of overcoming.

From a defense perspective, your instinct will likely be to defend the case by establishing that the action taken against the plaintiff-physician’s privileges was the “correct” decision based upon the evidence developed during the corrective action proceeding. However, carefully balance your client’s need for this evidence against the plaintiff’s ability to prosecute his case in the absence of this evidence. It will be very difficult for a plaintiff to produce evidence to overcome the statutory immunities if the evidentiary privilege is applied. This decision will likely need to be made early in the litigation, perhaps before filing an answer to the complaint, so as to avoid inadvertently waiving the privilege.

Additionally, in those situations where removal to federal court is a consideration (whether in a diversity case or in action brought pursuant to 42 U.S.C. § 1983), you will need to determine at the outset of the case whether to enforce or waive the privilege. If you remove to federal court, the evidentiary privilege may not be recognized. See, e.g., Virmani v. Novant Health Inc., 259 F.3d 284 (4th Cir. 2001). Accordingly, you may prefer to remain in state court.

Finally, it is important to keep in mind that the proponent of the privilege has the burden of establishing its existence. Hammond v. Saini, -- N.C. App. --, 748 S.E.2d 585 (2013); Bryson v. Haywood Reg'l Med. Ctr., 204 N.C. App. 532, 536, 694 S.E.2d 416, 420 (2010). Thus, the defendant must establish that the committees in question meet the statutory definition of “medical review committees” and that the documents at issue fall within the purview of Section 131E-95(b). This will likely be done through affidavits, with the privileged documents submitted under seal for in camera review. Make sure you submit enough information to allow the trial court, and ultimately the appellate court, to determine the existence of the privilege.

Conclusion

Application of the evidentiary privilege under N.C.G.S. § 131E-95(b) deprives a plaintiff of crucial evidence which is likely necessary to overcome the immunities afforded to defendants by statute. This is no doubt a harsh result and one which plaintiffs and their counsel will likely see as unjust. However, an examination of the legislative histories of the North Carolina peer view statute and the Health Care Quality Improvement Act suggest that this is the very purpose the statutes were enacted to achieve.

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From The Classroom To The Courtroom

Lynette Pitt — Wed, 20 Jan 2016 14:30:00 GMT

A Paralegal’s Guide to Relationship Building with New Attorneys

by Faye Bass, Ragsdale Liggett, PLLC

When you are assigned to a newly licensed attorney, you can be a very valuable asset in the attorney’s transition from the classroom to the courtroom. Many of you have already been in that position, perhaps multiple times, and already have a vast knowledge of how to assist a new attorney in preparing for transition from the classroom to the courtroom. For those of you presented with this challenge for the first time, these are just some suggestions that may prove helpful to both the attorney and you.

First of all, remember to put yourself in their place. Think back to the first day that you started your career and how uncertain and unfamiliar things seemed to you. This will give you an insight as to how they must be feeling, knowing that they are facing many new challenges. This will allow you to help build their confidence.

As each office is set up differently, ensuring that they have items they will need on a daily basis at their disposal is a good way to start. Try to find just a few minutes to show the attorney where the supplies are located so they will be able to find them without having to waste time looking for them. You might also want to set aside a few minutes as soon as you can to go over the instructions for the office equipment. This could include copiers, printers, fax machines, and even postage machines. This may sound trivial, but as you know, it can be daunting to have to deal with not having the appropriate supplies on hand, or a “temperamental” copier or printer or other office equipment when working on a deadline.

The new attorney has likely already interned at a law firm before starting practice. You may find that it is helpful to chat with the attorney for a few minutes and go over skill sets of both the attorney and you. This will also help in establishing a working relationship that will make meeting the challenges of everyday schedules easier for both of you.

Most law firms have a policy and procedure system in place that is unique to their own firm. These policies and procedures probably include many various procedures from scheduling conference rooms for mediations, depositions and other client meetings to an internal website that provides valuable information pertinent to your particular law firm. Reviewing those policies and procedures with the new attorney will also provide resources to turn to when needed.

During law school, attorneys are taught rules and regulations and how to practice law itself, but you will likely also play an important role in assisting the new attorney in the mechanics of how to get things done, such as filing pleadings with the various branches of the Courts. Most of you already have a bank of valuable contacts in most of the court offices that you can rely on for assistance when needed. The attorney will more than likely rely on you to handle these tasks, but by sharing this information with the attorney, the attorney could then reach someone that could assist them with any issue should you not be available at a time when a quick answer is needed.

As you already know, different counties have different procedures, especially when it relates to scheduling matters, calendar requests, and notices of hearing. The attorney will need also to be familiar with these procedures should an emergency arise and neither you, nor any other staff member is available to assist them. I have always found that it is a good idea to review the local rules, and if necessary, a simple phone call to the court can answer the question at hand.

Most of you also have a docketing system in place to insure that no deadlines are missed. You are already aware that one of the main sources for such deadlines are contained in the Case Management Order received from the Court for any given case. Reviewing these deadlines with the attorney as the case progresses will assist in everyone being on the same page as to what date a document is due or dates for hearings and/or trials.

Unless your firm has a database in place to update cases daily, it is a good idea to keep a chart or at the least, a list of all the cases that the attorney is assigned to. If this chart or list includes such information as the client number, name, description of the case, a list of the deadlines for each case, and what person is assigned to a particular task and any other needed information about the case, the chart or list would prove to be very helpful to have handy. It is important to review deadlines or hearings, deposition dates, etc. with the attorney as often as necessary to ensure that all the deadlines are on schedule.

If you are as proactive as possible yourself, and constantly review the caseload and deadlines, this will enable both you and the attorney to work on upcoming deadlines/documents to try to avoid last minute filings. As you have already experienced yourself, these last minute deadlines cause greater stress on both the attorney and you. Anything you can do ahead of time to ensure that the deadline is properly met will prove to be most beneficial.

I have found that the most important goal to establish with the attorney is communication, communication, communication! A reliable, set plan of communication with the attorney will be necessary for everyone involved with a case in order meet all requirements and deadlines, and to avoid duplicative work or last minute issues.

These are just a few of the ways that have assisted me in doing my best to be a valuable asset to a new attorney, as well as seasoned attorneys, and I hope that they will also be helpful to those of you presented with new challenges.

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Managing the Limits of the Work Product Doctrine

Lynette Pitt — Tue, 29 Dec 2015 19:00:00 GMT

by Colleen Byers, Bell Davis & Pitt

Although often wielded as such, the work product doctrine is not an impenetrable shield. Whether advising a client pre-suit or during the pendency of a lawsuit, both lawyers and their clients should be cautioned that just because a lawyer was involved in the preparation of a document or the communication with a third-party does not necessarily make the document, the communication or the information learned thereafter sacrosanct. The work product doctrine is not an absolute privilege, but rather a qualified immunity. See, e.g. Evans v. United Services Auto. Ass’n, 142 N.C. App. 18, 541 S.E.2d 782 (2001). Courts must strike a balance between the need for relevant, non-privileged discovery and the need to safeguard the lawyer’s work in developing the client’s case. Lawyers would be wise to consider and strategically maneuver around the limits of the work product protection long before they begin drafting objections to written discovery. Although the general rule that documents prepared in anticipation of litigation are not discoverable holds true, there are several notable exceptions and limitations to this rule.

1. Substantial need and undue hardship.

Pursuant to Rule 26(b)(3) of the North Carolina Rules of Civil Procedure if a document is created in anticipation of litigation, the party seeking discovery may access the document only by demonstrating a “substantial need” for the document and “undue hardship” in obtaining its substantial equivalent by other means. It is important to note, however, that the requesting party must show both a substantial need and an undue hardship in order to overcome the work product protection. See, e.g. North Carolina State Bar v. Harris, 137 N.C. App. 207, 527 S.E.2d 728 (2000) (even if the attorney, who was the subject of disciplinary proceedings, showed a substantial need to discover reports and witness interview notes of State Bar’s investigator, the attorney failed to show an undue hardship where he failed to exercise his right to depose the witnesses who were the subject of the investigator’s notes and reports). Moreover, where a substantial need and undue hardship have overcome the work product protection, the producing party should consider requesting an in camera review and redactions of the mental impressions, conclusions, opinions and legal theories of an attorney contained therein, which are entitled to a heightened level of protection from disclosure, in order to limit discovery to the fact work product contained in the document(s).

2. Only applicable to documents and tangible things.

The work product protection only applies to documents and tangible things. [Rule 26(b)(3) of the North Carolina Rules of Civil Procedure.] Accordingly, the protection does not extend to actions taken or the identification of persons contacted by a party or the party’s counsel. Brown v. American Partners Federal Credit Union, 183 N.C. App. 529 645 S.E.2d 117(2007); Young v. Kimberly-Clark Corp., 219 N.C. App. 172, 724 S.E.2d 552 (2012).

3. Ordinary course of business exceptions.

Because the work product doctrine only protects documents and tangible things prepared in anticipation of litigation, it does not apply to materials prepared in the ordinary course of business or to facts known by any party. For example, e-mails containing nothing more than that which would be sent in the ordinary course of business that are copied to an attorney are not protected by the work product doctrine solely because they were sent while a lawsuit was pending. Isom v. Bank of America, 177 N.C. App. 406, 628 S.E.2d 458 (2006). Additionally, internal investigations may not be protected if they are conducted in the ordinary course of business and are completed prior to the reasonable anticipation of litigation. Fulmore v. Howell, 189 N.C. App. 93, 657 S.E.2d 437 (2008) (trucking company’s accident report and internal investigation following fatal traffic accident were conducted for safety purposes in the normal course of business and, therefore, subject to discovery in subsequent negligence action); Evans, 142 N.C. App. 18 (in coverage dispute, investigative report completed by independent claim adjusters prior to insurer’s denial of claim was not protected by work product doctrine because it was completed in the ordinary course of the insured’s business and the insured could not reasonably anticipate litigation of a coverage question before the investigative procedure was completed and the claim was denied); Cook v. Wake Co. Hosp. System, Inc., 125 N.C. App. 618, 482 S.E.2d 546 (1997) (hospital’s accident report prepared after physician’s slip and fall in hospital was not prepared in anticipation of litigation, but rather for routine, business risk management purposes and was, therefore, discoverable in physician’s personal injury action).

4. Certain communications with experts.

Effective October 1, 2015, Rule 26(b)(4)(e) of the North Carolina Rules of Civil Procedure now expressly identifies the circumstances under which communications between an attorney and an expert witness are discoverable. Communications between an attorney and an expert witness, regardless of the mode of communication, are protected from discovery except to the extent that the communications do any of the following: (i) relate to compensation for the expert’s study or testimony; (ii) identify facts or data that the party's attorney provided and that the expert considered in forming the opinions to be expressed; or (iii) identify assumptions that the party's attorney provided and that the expert relied on in forming the opinions to be expressed. To avoid an in camera review and a redaction fight, consider keeping protected communications with an expert witness separate from those that are discoverable under the recently revised Rule 26(b)(4)(e).

Although the work product doctrine is not without its limits, a little strategic planning can go a long way to mitigate the impact of those limits.

Endnote: This article is limited to North Carolina state law, but it should be noted that, unlike the attorney-client privilege, the analysis of the work product rule in federal court is governed by federal law rather than the state law of the jurisdiction. Bowne of New York City, Inc. v. AmBase Corp., 150 F.R.D. 465 (S.D.N.Y. 1993).

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Recent Amendments to North Carolina’s Expert Discovery Rule

Lynette Pitt — Mon, 28 Dec 2015 18:00:00 GMT

by R. Kent Warren, McGuireWoods

Effective October 1, 2015, the rules regarding expert discovery have changed. North Carolina Rule of Civil Procedure 26(b)(4), which governs expert discovery, has been amended to bring it more in line with its federal counterpart. Amended Rule 26(b)(4) changes the way parties disclose testifying experts and extends work-product protections to draft expert reports and most attorney communications with experts. Amended Rule 26(b)(4) only applies to cases filed on or after October 1, 2015. Cases filed before then are still governed by the old rule. The most notable changes to Rule 26(b)(4) are summarized below.

Affirmative Obligation to Disclose Testifying Experts. The prior version of Rule 26(b)(4) did not require parties to identify testifying experts unless another party requested this information by way of interrogatory. Amended Rule 26(b)(4) now imposes an affirmative obligation on parties to disclose their testifying experts regardless of whether this information has been requested. Failure to comply with this disclosure requirement could result in exclusion of the expert at trial.

Expert Reports Permitted By Agreement. Amended Rule 26(b)(4) provides parties with the option of accompanying their expert disclosures with a written report. If the parties agree to exchange written reports, the report must contain the following information: a complete statement of the witness’s opinions and the basis and reasons for them; the facts or data considered by the witness in forming the opinions; the witness’s qualifications, including a list of all publications authored in the previous 10 years; a list of all cases in which the witness testified in the previous four years; and a statement of the witness’s compensation. Absent an agreement by the parties or court order requiring written reports, a party may through interrogatory require any other party to identify the following information: the subject matter on which the witness is expected to testify; the substance of the facts and opinions to which the witness is expected to testify; and a summary of the grounds for each opinion.

Right to Depose Testifying Experts. Under the prior version of Rule 26(b)(4), a party was only entitled to obtain expert discovery “through interrogatories.” As a result, expert depositions were permitted only by agreement of the parties or court order. Under Amended Rule 26(b)(4), a party is now entitled to depose any other party’s testifying expert; no agreement by the parties or court order is needed.

Discovery of Non-Testifying Experts Is Prohibited Absent “Exceptional Circumstances.” Amended Rule 26(b)(4) provides that discovery of non-testifying experts is prohibited absent a showing of “exceptional circumstances under which it is impracticable for the party to obtain facts or opinions on the same subject by other means,” or unless permitted under Rule 35(b) (court-ordered examining physicians).

Discovery of Draft Reports Prohibited. Amended Rule 26(b)(4) provides that “[d]rafts of reports provided under [this Rule] are protected from disclosure and are not discoverable regardless of the form in which the draft is recorded.”

Trial Preparation Protections Extended to Attorney Communications with Experts. Under the prior version of Rule 26(b)(4), it was unclear whether or to what extent attorney communications with testifying experts were discoverable. Amended Rule 26(b)(4) resolves this issue by explicitly shielding from discovery communications between a party’s attorney and its testifying experts unless the communications do any of the following: (1) relate to the expert’s compensation; or (2) identify information or assumptions provided by the attorney that the expert considered in forming his or her opinions.

Default Deadlines for Disclosing Expert Testimony. Under Amended Rule 26(b)(4), unless otherwise agreed to by the parties or ordered by the court, the parties must disclose any expert opinions (either by written report or interrogatory response, as applicable) at least 90 days before trial. Parties must disclose any rebuttal witnesses within 30 days after the other party’s expert witness disclosure.

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Things Break…The Hard Part is Figuring Out Why!

Lynette Pitt — Wed, 23 Dec 2015 16:00:00 GMT

By Eric Guyer, Ph.D. and Joseph Lemberg, Ph.D., P.E.

It’s true: nothing lasts forever, certainly no useful engineering materials or products made of them do. Moreover, it is not reasonable to expect an engineer or scientist to design a product that does last forever. Indeed, all products have a finite service life. When things do eventually break, whether early or late in their life, it is sometimes important for a manufacturer of the product or an attorney who represents a manufacture to determine why it broke. That’s where Failure Analysts come in. Failure Analysts can be of many engineering and scientific disciplines; the authors of this article are both Metallurgists with specific training in the fracture, fatigue and corrosion of materials. We are often asked to describe the cause as to why something broke. Accordingly, we use tools such as optical microscopes and scanning electron microscopes to examine and study the features on fracture surfaces – this field of study is called “fractography.” We look at features on a fracture surface that are centimeters in size to nanometers (or one billionth of a meter). A common perception is that this field seems more like reading tea leaves as opposed to objective science.

Here we peel back the curtain and discuss briefly some of the features we as metallurgists, fractographers, and failure analysts examine to help us diagnose failures. In doing so, we hopefully shed some light on a process that at times can seem to be a black art.

Common Fracture Modes

When we first learn of a failure, specifically a fracture, we ask several questions in order to understand how and why it occurred:

What type of material was it and how was it manufactured?
What type of environment was it subjected to?
How long was it in service before the fracture occurred?
Was it subjected to loads or forces and were they sustained or cyclic?
How was the product used and maintained?
Is this a new design or old design?
How many failures exist and how large is the total population of similar parts?

Such questions help us sort through potential failure modes and develop potential hypotheses so that we can apply the scientific method to our investigation. For instance, if a product is never subjected to cyclic loads, then fatigue is not a likely failure mode. Questions about the material help us understand, for instance, if it is generally going to be a brittle or ductile material and whether or not it may be susceptible to attack by various environments. As a general proposition, there are numerous failure modes that exist in reality, only the most predominant failure modes are discussed in this paper which include:

Overload
Fatigue
Environmentally-assisted cracking

Each of these modes is now described as well as compared and contrasted. All leave behind tell-tale signs that a trained metallurgist can use to determine which type of failure occurred.

Overload

Briefly, the word “overload” represents a one-time excursion where the load-carrying capacity of the part is exceeded and the part breaks. Overload failures typically originate from a single location that may be a small surface nick, an inclusion in a part, or an area where stress concentrates as a result of the design of a part (a hole, for example). Depending on the properties of the material, a crack can propagate in what is known as a “brittle” manner or a “ductile” manner.

Brittle Overload Fracture

On the microscopic scale, metals are comprised of crystals which we call “grains” (see Figure 1). The morphology of these grains forms what we call the “microstructure” of the metal. Brittle fracture commonly occurs by two means: intergranular fracture (at the interface between adjacent grains) or transgranular fracture (meaning the fracture grows through a grain). The boundaries between adjacent grains may represent a natural weak point in the structure or potentially as a result of contamination of the boundaries as well as other factors. An example of intergranular fracture is shown in Figure 2. Transgranular fracture, also known as cleavage, occurs when a crack plows through a grain, and doesn’t follow the boundaries. Transgranular fracture typically occurs in very hard materials, like ceramics. An example of a transgranular fracture is shown in Figure 3.

Ductile Overload Fracture

Ductile fracture occurs by a different mechanism entirely. A ductile fracture presents a dimpled fracture surface, as shown in Figure 4. These dimples form as the result of tiny voids that form and grow together (coalesce) as the material is deformed. Typically, these voids form around local hard particles, where the nearby material can deform to a different extent than the hard particle; eventually, the hard particles separate from the softer material deforming around them, leading to the characteristic dimples. The crack propagates as these dimples link up in a process known as microvoid coalescence.

Fatigue

In contrast to an overload fracture, fatigue is the cyclic application of loads to a part; here, damage accumulates on a part, a crack is initiated and then it grows to the point of final fracture. It is a time dependent fracture mechanism. In fatigue, a crack can propagate a minute amount with every load-unload cycle. Though the vast majority of fatigue occurs as a result of ductile processes, it is possible to have fatigue of brittle materials. One of the hallmarks of fatigue is the presence of multiple origins. Local inhomogeneities, surface perturbations or surface damage can all lead to the propagation of fatigue cracks.

Most of the lifetime of a part is spent generating the small perturbations, while crack extension typically consumes only a small portion of the life of a part. The fact that a crack extends a small amount with every load cycle leaves behind features known as “striations.” These marks, which are another hallmark of fatigue, point back towards the origin of the crack (picture ripples in a pond from a rock that is dropped). As the crack grows, the spacing between striations increases. Striations start out very small, and require very high magnifications to observe (1000s of times magnification). Such fracture surfaces also generally contain larger features, known as “beach marks” for their similarity to ripples sometimes observed in the sand at the water line at a beach, do not necessary represent a single load-unload cycle (that is, many load-unload cycles may occur between beach marks). An example of striations on a fracture surface is shown in Figure 5.

Environmentally-Assisted Cracking: Stress-Corrosion Cracking

Both of the above fracture modes are primarily and typically related to loads and material properties (temperature can be an exception). However, the service or manufacturing environment can play a role in a fracture as well. One such mechanism is known as stress-corrosion cracking, or SCC. SCC is also a time dependent fracture mechanism and is the result of a sustained stress, rather than a sudden overload or the cyclic application of stresses. A combination of three factors are required for SCC to occur, as described below and shown schematically in Figure 6:

1. Stress: This can be an applied stress from installation or service, or residual stresses left over from manufacturing.

2. Susceptible material

3. Environment: A service or manufacturing environment containing a component that can attack a particular material is required. One common SCC agent for brass is ammonia.

SCC cracks tend to have multiple origins, and usually present as highly branched, intergranular cracks (though transgranular SCC cracks are also possible). An example of SCC cracks in brass is shown in Figure 7.

Final Thoughts

Fractography is a challenging field of study with many intricacies and subtleties that can impact the outcome of an analysis and accordingly requires a trained eye to accurately diagnose. Hopefully, although only a few of the high level features are examined here, this short article sheds some light on the types of features that we metallurgists look for when examining a failure. The fracture surfaces are therefore extremely important, and are sometimes the only information available to aid in determining what led to a failure.

Eric Guyer, Ph.D., Principal, Exponent, Inc., 3350 Peachtree Rd. NE Atlanta, GA 30326 eguyer@exponent.com

Joseph Lemberg, Ph.D., P.E., Managing Engineer, Exponent, Inc., 3350 Peachtree Rd. NE Atlanta, GA 30326 jlemberg@exponent.com

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Medicare Advantage Plans: There is a New Lien in Town

Lynette Pitt — Mon, 23 Nov 2015 22:00:00 GMT

Medicare Advantage Plans: There is a New Lien in Town
Erin T. Collins, Hedrick Gardner Kincheloe & Garofalo, LLP

Attorneys defending clients in civil and workers’ compensation cases understand that settlements involving Medicare beneficiaries must involve an arrangement to reimburse traditional Medicare for claim-related conditional payments made under Medicare Parts A and B. There is an established process (albeit a long and arduous one) to obtain a conditional payment demand from traditional Medicare when settling these types of claims. As the title of this article indicates, there is now yet another box to check when resolving claims with Medicare-eligible claimants: Do any Medicare Advantage Plans have a lien against this settlement?

Medicare Advantage Plans are not actually new; however, they are becoming increasingly popular with Medicare-eligible individuals, and recent litigation indicates they may have the same or similar recovery rights as traditional Medicare. Medicare Advantage Plans are insurance plans for Medicare-eligible individuals administered by private entities (for example: Medicare Blue, Humana, AARP) but funded in part by the federal government. See 42 U.S.C. §§ 1395w-21-28. It is Medicare’s formal position that these plans should be given the same rights of recovery against third party claims as traditional Medicare. (See CMS Memorandum on December 5, 2011, re: Medicare Secondary Payment Subrogation Rights, Authored by Danielle R. Moon, J.D., M.P.A., and Cynthia Tudor, Ph.D.)1. Several Courts throughout the country have recently allowed these plans to recover their payments from settlements through filing a private cause of action in federal court. In re Avandia Mktg. Sales Practices and Products Liability Litigation, 685 F.3d 353 (3d Cir. 2012); Humana Ins. Co. v. Farmers Texas County Mutual Insurance Co., 95 F. Supp. 3d 983 (W.D. Tex. 2014); Collins v. Wellcare Healthcare Plans, Inc., 73 F. Supp. 3d (E.D. Louis. 2014). Assuming this position continues to prevail, Medicare Advantage Plans will be able to bring private causes of action against insurers - even after a settlement - in the event they are not reimbursed out of the settlement proceeds. To add insult to injury, these plans may also be able to seek double damages against primary payers under the right set of circumstances. See 42 U.S.C. § 1395y(b)(3)(A).

Approximately one third of all Medicare-eligible individuals have enrolled in a Medicare Advantage Plan. See “Don’t Settle for Less: Protecting Medicare Advantage Plans’ Recovery Rights,” Aaron P. Frederickson, 88 A.P.R. Wis. Law. 30 (April 2015). As such, it is likely that most workers’ compensation and/or liability defense attorneys are currently handling at least one case involving a Medicare Advantage beneficiary (even if they do not know it). There are unique challenges presented when dealing with Medicare Advantage Plans, and although some questions remain unanswered, here is basic information for attorneys handling cases involving claimants with a date of birth of 1950 or earlier, or with a long-term SSA-approved disability.

How are defendants to know there is a Medicare Advantage Plan involved? If a conditional payment letter or final demand letter received from traditional Medicare is $0.00, and the claimant, a Medicare-eligible individual, has undergone claim-related medical treatment, there is likely a Medicare Advantage Plan involved. The typical reaction to a $0.00 lien letter from traditional Medicare involves a call for a quick disbursement and file closure, but the reaction should be motivation to do more research before finalizing the settlement. Someone (or entity) paid for the medical treatment, and oftentimes, the payer is a Medicare Advantage Plan. Also, if the itemized billing statements reference AARP, Humana, Medicare Blue, etc., there will likely be payments by a Medicare Advantage Plan.
Do you notify the Medicare Advantage Plan of their rights? It feels unnatural to place a lienholder on notice when they have not provided any indication of a lien. However, these plans will likely have notice of the third party claim through the manner in which they are funded by the federal government. Insurance companies now report settlement/judgment/award payments to the federal government through the Section 111 mandatory reporting requirements, and in turn, the federal government reduces the “capitation rate” they pay the Medicare Advantage Plans for the beneficiary. See “Is Medicare Advantage Entitled to Bring a Private Cause of Action Under the Medicare Secondary Payer Act?” by Jennifer Jordan, 41 Wm. Mitchell L. Rev. 1408, 1417 (2015)2. Assuming everything works as designed, in theory, the Medicare Advantage Plan will indirectly have notice of the third party claim. It goes without saying it is better to negotiate before settlement/disbursement, rather than after the funds have been disbursed and are unavailable to satisfy the lien.
How do you obtain a lien once the Medicare Advantage Plan is identified? This is perhaps the good news. Medicare Advantage Plans are administered through private insurance companies and as such, the parties are able to call, email or fax to obtain a lien amount and itemized statement relatively promptly (particularly compared to the traditional Medicare process).
May there still be a conditional payment reimbursement request from Medicare for Medicare Parts A and B? Yes. A beneficiary can switch back and forth from Medicare Advantage to traditional Medicare and therefore, although there was good news in bullet three above, a thorough lien search will involve both confirmation that there are no liens being asserted by traditional Medicare or any Medicare Advantage Plan.
Why is this my problem? It does not have to be; however, if opposing counsel (or the unrepresented claimant) does not reimburse the Medicare Advantage Plan (or any claim by traditional Medicare), the lienholder, whether traditional Medicare or a Medicare Advantage Plan, may have a direct cause of action against the insurance carrier to be reimbursed for claim-related payments, and potentially double damages.

Awareness of the “new lien” in town is step number one to protecting clients from future liability related to Medicare-related liens. Good luck out there!

1Found at: https://www.cms.gov/Medicare/Health-Plans/HealthPlansGenInfo/downloads/21_MedicareSecondaryPayment.pdf

2 Found at http://web.wmitchell.edu/law-review/wp-content/uploads/2015/05/5.-Jordan_Website.pdf,

Department of Education Sides with Transgender Student’s Allegations of Sex-Based Discrimination

Lynette Pitt — Thu, 19 Nov 2015 14:30:00 GMT

Department of Education Sides with Transgender Student’s Allegations of Sex-Based Discrimination
Sidney O. Minter, Teague Campbell Dennis & Gorham, LLP

On November 2, 2015, the Department of Education (the “DoE”) issued a potentially landmark decision regarding the rights of transgender students. This decision was issued following months of investigation into allegations that Palatine High School District 211 (the “District”) discriminated against a transgender female (“Student”) on the basis of her sex. The DoE determined that the District violated federal discrimination laws by denying Student access to gender-appropriate locker rooms because she is transgender.

Student’s Complaint:

In December 2013, Student filed a complaint against the District alleging violations of Title IX. of the Educational Amendments of 1971 (“Title IX”). Based on the allegations of Student’s complaint, she was born a male at birth, but identified as a female from a young age. The complaint also indicated that Student came out to her family as transgender a few years earlier and that she owned a United States passport identifying her as a female. The complaint outlined that Student had been diagnosed with a psychological condition—gender dysphoria—a condition for persons who experience incongruence between their experienced/expressed gender. In addition, Student indicated that, for the past few years, she lived her life as a female (There was not any discussion regarding whether Student underwent a medical procedure to change her sex). This included dressing and presenting as a female, requesting that everyone refer to her by her female name, requesting that everyone refer to her using female pronouns, and by using female restrooms.

During her eighth grade year, she requested a meeting with administrators from the District regarding her transition to high school. Following a meeting with a psychologist from the District, she was informed that she would be allowed to use girls’ restrooms, to wear female uniforms during gym class, and to participate on female athletic teams. However, at the same time, she was informed that she would not be allowed to use girls’ locker rooms to change for her daily gym class. Instead, she was instructed to use a separate bathroom, which she contended was far from the gym. Following this decision, Student met with the District’s principal—who confirmed the District’s position regarding Student’s access to girls’ locker rooms.

Student’s Legal Arguments:

In Student’s complaint against the District, her legal counsel alleged a number of legal claims. First, Student alleged the District had engaged in per se discrimination by singling Student out for differential treatment and segregating her from other students because of her gender identity. Next, she alleged that the District engaged in per se discrimination against Student due to her change of sex. Lastly, she alleged that the District’s decision to ban her from the girls’ locker rooms was unlawful sex stereotyping under Title VII.

The District’s Legal Arguments:

The District has made a number of legal arguments, but, ultimately, its legal position seems to be steeped in Constitutional Rights—namely, the Right to Privacy. The District believes its decision to not allow Student unfettered access to the girls’ locker rooms is both lawful and reasonable. The District emphasized that its position protects the privacy rights of all students when changing clothes or showering before or after physical education and after-school activities. Moreover, the District noted that it continues to support transgender students and families—while always balancing the rights and concerns of the other 12,000 or so students it serves. Further, the District believes that it has provided individual accommodations in a manner that does not infringe on the privacy concerns of other students, and will continue to do so—despite the DoE’s ruling. Lastly, the District underscored that it is prepared to contest the DoE’s ruling through litigation—if necessary.

Department of Education’s Ruling:

On November 2, 2015, the DoE found that the District denied Student access to the girls’ locker rooms because of: (1) her gender identity, and (2) her gender nonconformity. If true, both of these claims are actionable causes of action. The DoE’s ruling mandates that the District: (1) reach a solution before the expiration of thirty days (on or before December 2, 2015); or (2) face enforcement, which could include administrative law proceedings or a Justice Department court action. Additionally, the District could lose some or all of its Title IX. funding.

Potential Ramifications of the Ruling:

This case is the first of its kind and could lead to new legal precedent in the developing area of discrimination against transgender individuals. The parties on both sides of this issue—whether the District violated federal discrimination laws by not allowing Student unfettered access to the girls’ locker rooms—are fighting for the rights of many. The District is advocating for similarly situated schools across the country. The District believes it has been reasonable and complied with applicable federal laws as it relates to Student’s treatment. On the other hand, Student is fighting for transgender students across the country who have been subjected to discriminatory treatment, and/or been ostracized, bullied or demeaned.

I believe this case will be litigated in federal district court because it seems that the District will not comply with the DoE ruling. The legal arguments being advanced by both sides are nuanced and broad sweeping. Determining whether a person’s right to be treated equally should be given more, less or the same credence as another person’s right to privacy is a very difficult legal question. This type of legal question may prove to be one that can only be decided—once and for all—by our nation’s highest court—SCOTUS. To add an additional layer to this case, I also believe the issue of accommodation can easily be applied in other areas of society—such as the workplace. With such potentially wide-sweeping ramifications, I believe we have only reached the tip of the iceberg with respect to the relevant legal issues discussed above.

I will continue monitoring this case because the final decision could very well set legal precedent—as it relates to transgender individuals—in public schools across the country.

What must a plaintiff “beat” to recover attorney fees under the 2011 amendment to N.C. Gen. Stat. § 6-21.1?

Lynette Pitt — Wed, 18 Nov 2015 20:30:00 GMT

What must a plaintiff “beat” to recover attorney fees under the 2011 amendment to N.C. Gen. Stat. § 6-21.1?
Allen C. Smith, Hedrick Gardner Kincheloe & Garofalo, LLP

Introduction

Absent a statute allowing for the recovery of attorney fees and costs, litigants in North Carolina bear their own costs. Prevailing plaintiffs to recover attorney fees in actions for personal injury and property damage in which the plaintiff can show the following:

(i) that there was an unwarranted refusal by the defendant to negotiate or pay the claim which constitutes the basis of such suit, (ii) that the amount of damages recovered is twenty-five thousand dollars ($25,000) or less, and (iii) that the amount of damages recovered exceeded the highest offer made by the defendant no later than 90 days before the commencement of trial.

N.C. Gen. Stat. § 6-21.1 (2013) (emphasis added).

North Carolina amended N.C. Gen. Stat. § 6-21.1 in 2011 to include the “unwarranted refusal” language; increase from $10,000 to $20,000 the cap on amount of damages for which attorney fees may awarded; add the very important language about the “amount of damages recovered exceed[ing] the highest offer made by the defendant no later than 90 days before trial; and limiting the amount of fees that can be recovered to $10,000. The legislature amended the statute in 2013 again to increase the cap on the amount of damages eligible for an award of attorney fees from $20,000 to $25,000.

As of this date, there is no appellate law in North Carolina addressing “amount of damages recovered” from the 2011 version of N.C. Gen. Stat. § 6-21.1. The only appellate decision addressing the 2011 version of N.C. Gen. Stat. § 6-21.1 is an unpublished one (Morales v. Garcia, 761 S.E.2d 753 (N.C. App. 2014)) which focuses on the “unwarranted refusal” requirement.

What is meant by “amount of damages recovered?”

The threshold question is how to determine whether a jury (or bench) verdict qualifies for an award of fees under N.C. Gen. Stat. § 6-21.1. Does the court compare the jury verdict to $25,000 and the highest offer? Is something added to the jury verdict? If so, what is added? Most likely, the position of a plaintiff’s attorney will depend on whether he or she is trying to beat the offer or keep the “amount of damages recovered” at or under $25,000.

If the plaintiff’s attorney is in the position of trying to beat the offer, expect him to present the court with case law interpreting “judgment finally obtained” under Rule 68 , which addresses offers of judgment, in making his argument for attorney fees. The case of Stillwell v. Gust, 148 N.C. App. 128, 557 S.E.2d 627 (2001), review denied, 355 N.C. 500 (2002), interprets “judgment finally obtained” used in N.C. Gen. Stat. § 1A-1, Rule 68 (“Offer of judgment”). The Stillwell Court holds, “’Judgment finally obtained’ means the amount entered as final judgment modified by any adjustments.” 148 N.C. App. at 131, 557 S.E.2d at 629 (quoting Poole v. Miller, 342 N.C. 349, 353, 464 S.E.2d 409, 411 (1995), reh’gs denied, 342 N.C. 666, 467 S.E.2d 722 (1996)). The adjustments include interest, costs, and even attorney fees.

Prior to 2011, N.C. Gen. Stat. § 6-21.1 allowed an award of attorney fees “where the judgment for recovery of damages is ten thousand dollars ($10,000) or less . . .” N.C. Gen. Stat. § 6-21.1 (2010) (emphasis added). However, the new version of N.C. Gen. Stat. § 6-21.1 does not use the term “judgment” or “judgment finally obtained” – it replaced “judgment for recovery of damages” with “amount of damages recovered” and added the qualification of “the highest offer made by the defendant no later than 90 days before the commencement of trial.” These changes make the language in Stillwell inapplicable to the determination of whether fees may be awarded.

Instead of looking at case law that interprets “judgment finally obtained,” a trial court needs to look at case law interpreting “amount of damages recovered.” In short, the Court is to consider “damages” as opposed to “judgment.” The case of Brown v. Millsap provides the Court with the items or elements a trial court is to add together when considering a request for attorney fees. 358 N.C. 212, 594 S.E.2d 1 (2004) (per curiam decision adopting dissenting opinion of Judge Tyson of NC Court of Appeals in 161 N.C. App. 282, 588 S.E.2d 71 (2003)).

The Brown Court explained what items the trial court is to consider or add together when making a decision about whether a case even qualifies for an award of attorney fees under N.C. Gen. Stat. § 6-21.1. Those items are the jury award and prejudgment interest. 161 N.C. App. at 286, 588 S.E.2d at 73. Significantly, both the NC Court of Appeals (2002) and Supreme Court (2003) decided Brown after the Court of Appeals (2001) decided Stillwell.

In Brown v. Millsap, the jury returned a verdict of $9,500, and the trial court refused to award attorney fees after concluding that “the judgment obtained exceeded “$10,000.00.” 161 N.C. App. at 282, 588 S.E.2d at 71. The trial court included the award ($9,500), pre-judgment interest ($669.76), and costs ($435) when reaching the decision that “judgment for recovery of damages” exceeded $10,000 (which has now been replaced by $25,000). 161 N.C. App. at 283, 588 S.E.2d at 72.

The NC Court of Appeals reversed the trial court, recognizing that “damages and costs are legally separate items” and ruling that “damages” only apply to the jury verdict for purposes of determining whether the $10,000 figure is exceeded or not. Id. (citing Sowell v. Clark, 151 N.C. App. 723, 567 S.E.2d 200 (2002)).

In his dissent opinion that the Supreme Court adopted, Judge Tyson agreed that costs and damages are separate and opined that the jury award is to be combined with mandatory prejudgment interest, but not costs, in determining whether the “judgment for recovery of damages” exceeds $10,000. 161 N.C. App. at 287, 588 S.E.2d at 71.

In conclusion, Judge Tyson wrote:

The trial court erred by adding discretionary court costs of $435.00 to the jury's award of $9,500.00 with interest to determine whether plaintiff was entitled to be heard on its motion for attorney's fees under N.C. Gen. Stat. § 6-21.1. This error is harmless because the trial court was required to automatically add pre-judgment interest of $669.76 to the jury's verdict of $9,500.00.

Id. (emphasis added).

Interestingly, even the Stillwell Court acknowledged “damages” are the amount that the jury awards: “After a jury trial, the trial court entered judgment awarding Lisa E. Gaffney Stilwell (“plaintiff”) damages in the amount of $5,401.00 and attorneys’ fees and costs in the amount of $10,853.75 in her civil negligence action against Amanda Danley Gust (“defendant”).” 148 N.C. App. at 129, 557 S.E.2d 628 (emphasis added). The jury had returned a verdict of $5,401 for Plaintiff. Id.

Conclusion

Under North Carolina law, the trial court is to add the jury award and interest together to determine whether “the amount of damages recovered exceeded the highest offer made by the defendant no later than 90 days before the commencement of trial.” N.C. Gen. Stat. § 6-21.1 Costs incurred by Plaintiff are a legally separate issue and not part of any equation when determining whether attorney fees may be awarded under N.C. Gen. Stat. § 6-21.1. This is a fair interpretation which favors the plaintiff when trying to keep the award at or under $25,000 and the defendant when comparing the award to the highest offer.

Practice pointers

To keep a plaintiff’s attorney from being duplicitous, pin the attorney down before the trial – in writing! For example, at some point during the negotiations, ask the plaintiff’s attorney what the “amount of damages recovered” includes. Quite frankly, if the plaintiff’s attorney is concerned about staying under $25,000, you may get a different answer than if the attorney is concerned about beating the offer. At a minimum, make your position known, as most plaintiff attorneys are reluctant to take a position.

The language in N.C. Gen. Stat. § 6-21.1 (“Allowance of counsel fees” and N.C. Gen. Stat. 1A-1, Rule 68 (“Offer of judgment”) is different. In some cases, the plaintiff will beat an offer of judgment but not the “highest offer made by the defendant no later than 90 days before the commencement of trial.” In such a case, the plaintiff may recover costs (as defined by N.C. Gen. Stat. § 7A-305 – court reporting fees, expert witness fees, etc.) but not attorney fees.

Send the plaintiff’s attorney a letter containing the offer (e.g., we offer $10,000 in exchange for a voluntary dismissal with prejudice and release of all claims) to address the attorney fee issue and a separate offer of judgment to address the potential for costs. Keep in mind, that it will be easier for the plaintiff to recover costs. Make sure your client understands the different standards that determine whether attorney fees and costs may be awarded.

Use the prayer for relieve in the complaint to your advantage. In Superior Court, the plaintiff will demand of “an amount in excess of $10,000.00 (and now $25,000).” How does this amount compare to the jury verdict? If the amount sought in the complaint is well in excess of the jury verdict and the defendant made a reasonable offer, the defense attorney has reasonable argument that there was no “unwarranted refusal by the defendant to negotiate or pay . . .” N.C. Gen. Stat. § 6-21.1. See also, Harrison v. Herbin, 35 N.C. App. 259, 261, 241 S.E.2d 108, 109 (1978), cert. denied, 295 N.C. 90 (May 8, 1978( (addressing plaintiff’s reliance on Hicks v. Albertson and holding that “[w]hile the statute is aimed at encouraging injured parties to press their meritorious but pecuniarily small claims, we do not believe that it was intended to encourage parties to refuse reasonable settlement offers and give rise to needless litigation by guaranteeing that counsel will, in all cases, be compensated”).

If you like rock and roll, you will love this video: https://www.youtube.com/watch?v=SnnL8wEDNJM.

Footnotes:

1“If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer. The fact that an offer is made but not accepted does not preclude a subsequent offer.” N.C. Gen. Stat. § 1A-1, Rule 68(a) (emphasis added).

2Stillwell also addresses the factors to be considered by a trial court in exercising its discretion whether to award fees. 148 N.C. App. at 130-32, 557 S.E.2d 628-29. Specifically, the Stillwell Court cites and relies on the factors described in Washington v. Horton, 132 N.C.App. 347, 349, 513 S.E.2d 331, 333 (1999).

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Representing Healthcare Professionals

Lynette Pitt — Tue, 29 Sep 2015 16:25:34 GMT

Representing Healthcare Professionals

by James A. Wilson, Attorney at Law

Our president, David Hood, asked me to write introducing myself as a new member. I am honored and grateful to be included in this Association, and grateful David asked me to share a little about my practice.

I am proud to be a defense attorney, although I rarely get involved directly in civil litigation. Instead, I represent healthcare professionals in obtaining licenses, defending licensing board disciplinary investigations and charges, in hospital privilege disputes, HMO and other health insurance credentialing and de-selection, DEA registration and show cause proceedings, Medicare exclusion, NPDB reporting and disputes, and military medical credentialing. Although I primarily defend healthcare professionals, I also serve as prosecutor and hearing officer in hospital privileges cases at various hospitals throughout North Carolina.

Litigation in these fora bears a passing resemblance to litigation in court. The basic tools of proof and persuasion are similar. However, there are many differences. Mere public disclosure of the allegations can be very embarrassing, perhaps devastatingly so. There rarely is a judge, and the other side gets to pick the jury (the agency members, typically). The rules of evidence and civil procedure may not apply. Statutes of limitation nearly never stop a case against my client but are usually very strictly enforced when they cut off a defense or right to a hearing or appeal. Compulsory process is often available only to the other side. In some cases, the burden of proof is on my client to establish that he or she did not commit an offense or is of good character. The end result of the “trial” might be a recommendation rather than a binding decision, and the courts may be available only for a pure appeal rather than a new trial. This appeal, if available, typically is limited in its scope. Finally, although insurance might pay my fee, there typically is no coverage whatsoever for any other consequences of the proceeding.

Medical malpractice defense counsel and I work together on issues where there is intersection between the Medical Board and a malpractice claim. The Board reviews all malpractice claim payments, and a Medical Board investigation sometimes precedes and occasionally affects the progress of a malpractice case. Indeed, my first encounter with the Association was as a speaker at the 2010 annual meeting’s malpractice breakout session on how Medical Board and malpractice cases can affect one another.

I got my start in this area of law in 1994 when I became the first in-house chief prosecutor and general counsel to the North Carolina Medical Board, where I remained until the end of 2000. I started my solo practice in Durham, North Carolina, in January 2001.

I am a past president of the North Carolina Society of Health Care Attorneys and have served several terms on the governing councils of the Health and Administrative Law Sections of the North Carolina Bar Association. I have been included in The Best Lawyers in America® in the field of Health Care Law since 2013 and was named the Best Lawyers® 2014 Raleigh Health Care Law “Lawyer of the Year.” I have a Bachelor of Science in Physics (1982) and a Juris Doctor with Honors (1989), both from the University of North Carolina at Chapel Hill. I was an officer in the United States Marine Corps, serving in Beirut, Lebanon, in 1984.

Whenever I can be of help to you or one of your clients, I would be honored for you to ask.

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Demasters v. Carilion Clinic: Elimination of the “Manager Rule” in Title VII Litigation

Lynette Pitt — Mon, 31 Aug 2015 20:36:45 GMT

Demasters v. Carilion Clinic: Elimination of the “Manager Rule” in Title VII Litigation
Sidney O. Minter, Teague Campbell Dennis & Gorham, LLP

Introduction

In a recent case, Demasters, the United States Court of Appeals for the Fourth Circuit, determined the “manager rule,” which has its roots in Fair Labor Standards Act litigation, should not apply in Title VII litigation. Demasters v. Carilion Clinic, No. 13-2278, WL 4717873 (4th Cir. 2015). Under the rule, in order for an employee to be engaged in protected Title VII activity, he must step out of his role of representing the company. I will discuss the rule and its application in greater detail later in this article.

Factual History

In Demasters, Neil Demasters (Mr. Demasters) worked as an employee assistance program (EAP) consultant for Carilion. In this role, he reported employee complaints to Carilion’s human resources department. In late 2008, John Doe (Doe), a Carilion employee, consulted Mr. Demasters regarding his manager’s sexually suggestive behavior. After listening to Doe’s complaints of harassment, he had Doe sign a release enabling him to communicate directly with Carilion’s human resources department on Doe’s behalf. Mr. Demasters reported Doe’s complaints to the human resources department, which prompted Carilion to investigate the allegations and ultimately led to the termination of Doe’s manager.

Following his termination, Doe continued complaining to Mr. Demasters regarding continued harassment he received from co-workers supporting his recently terminated manager. Mr. Demasters contacted Carilion’s human resources department to inform them of Doe’s continued complaints of harassment. During a subsequent conversation with the human resources department, Mr. Demasters stated his belief that Doe’s complaints were being handled improperly.

Following Mr. Demasters’ last conversation with the human resources department, he did not communicate with Doe and was unaware of the legal remedies Doe pursued against Carilion. One day, a few years later, a manager for Carilion, called Mr. Demasters to inform him Doe had filed a complaint against Carilion based on alleged violations of Title VII’s anti-retaliation provision. During the conversation, the manager questioned Mr. Demasters regarding his involvement with Doe’s complaints of harassment. The manager stated that Doe and Carilion settled their claim prior to trial. Shortly thereafter, a few high-ranking human resources professionals called Mr. Demasters into a meeting. During the meeting, they questioned him regarding his involvement with Doe’s complaints. They asked

Mr. Demasters why he had not taken a pro-employer position and also told him that he left Carilion “in a compromised position.” Two days after this meeting, Mr. Demasters was fired for failing to act in a manner consistent with the best interests of Carilion.

Following this, Mr. Demasters filed a Complaint against Carilion in federal district court. His Complaint contained allegations that Carilion violated Title VII’s anti-retaliation provision. In response, Carilion filed a Motion to Dismiss, alleging that Mr. Demasters had not properly alleged a prima facie case under Title VII’s Opposition Clause. The District Court granted Carilion’s Motion to Dismiss and Mr. Demasters timely appealed to the United States Court of Appeals for the Fourth Circuit.

Analysis

On appeal, the Court examined (1) whether, pursuant to Title VII, Mr. Demasters had engaged in protected behavior; and (2) whether the manager rule should apply in Title VII retaliation claims. Under Title VII, in order to establish a prima facie retaliation claim, a plaintiff must demonstrate three elements: (1) that he engaged in a protected activity; (2) that his employer took an adverse employment action against him; and (3) that there was a causal link between the two events. Boyer-Liberto v. Fontainebleau Corp., 786 F.3d 264, 281 (4th Cir. 2015).

The Court ultimately determined that Mr. Demasters had engaged in protected behavior, and that he had satisfied the other elements necessary to establish a prima facie retaliation claim and therefore his claim was improperly dismissed. In making this determination, the Court carefully examined other analogous cases, as well as the broad purpose of Title VII—which is to eliminate discrimination in the workplace. The Court examined Mr. Demasters’ Complaint, in which he described: (1) his discussions with Doe regarding his manager’s behavior, (2) his role as an advocate for Doe, (3) his discussion with other EAP colleagues to devise a plan to stop the workplace harassment, and (4) his conversation with the human resources department regarding his opinion that they were mishandling Doe’s complaints. The Court determined that, after reviewing all of these factors, Mr. Demasters’ behavior amounted to protected activity for which he could bring a claim. However, because of the manager rule, the Court’s analysis did not stop there.

Applicability of Manager Rule

The Court noted that the manager rule has been applied in some Fair Labor Standards Act retaliation claims. The rule requires that an employee “step outside of his or her role of representing the company” in order to engage in protected behavior. McKenzie v. Renberg’s Inc., 94 F.3d 1478, 1486 (10th Cir. 1996). Here, Mr. Demasters successfully argued that the manager rule should not apply in Title VII litigation, and the Court agreed. The Court outlined several reasons the rule should not apply in Title VII cases.

First, the Court highlighted that Congress never intended to exclude a class of workers from retaliation protection based solely on their job descriptions. The Court also discussed the breadth and scope of Title VII’s anti-retaliation provision, which has been held to “provide broad protection from retaliation,” and to cover a wide range of conduct. Burlington N., 548 U.S. at 67.

Additionally, the Court focused on an affirmative defense employers can avail themselves of when an employee does not take advantage of his employer’s internal investigation procedures—this is known as the Farragher/Ellerth defense, which did not apply in this case. The Court concluded that applying the manager rule in the context of Title VII litigation would discourage employees from reporting concerns of discrimination and would have a chilling effect on those employees, such as Mr. Demasters, who are charged with reporting discrimination on behalf of co-workers. The Court believed this would lead to claims of discrimination going unreported and unsolved. Carilion argued—unsuccessfully—that failing to apply the manager rule in Title VII litigation would lead to increased litigation. Although the Court acknowledged Carilion’s concern, its ultimate decision hinged on the chilling effect the rule’s application would have on reports of discrimination in the workplace. Ultimately, the Court rejected the manager rule in the context of Title VII retaliation claims, reversed and remanded the case to federal district court.

Best Practices for Employers

Employers should be proactive with respect to implementing (or drafting) neutral policies regarding discrimination against employees. Employers should:

1. Investigate each complaint of discrimination thoroughly;

2. Provide training for employees—especially human resources professionals—regarding handling complaints of discrimination; and

3. Follow through with necessary disciplinary action, per company policy, if necessary.

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Twenty Tips To Take To Trial

Lynette Pitt — Thu, 30 Apr 2015 19:38:46 GMT

Twenty Tips To Take To Trial
By David W. Hood, Patrick Harper Dixon LLP, Hickory NC

Lawyers talk. It’s what we do. I have been in a lot of trials - seen a lot of lawyers do a lot of cool things, and seen a lot of lawyers do a lot of stupid things (definitely including me.) If we want to communicate well to the judge and jury when we are in trials, we need to keep several things in mind.

In fact, we should keep exactly 20 things in mind, and they helpfully all begin with the letter “T”. Wow, how totally convenient.

Let’s begin with preparation before the trial begins. When you are packing your bag for your big trip into the courtroom, there are things you better not forget:

1)Theme. Whenever you hear someone speak effectively, whether it is a sermon, or a political speech, or a jury argument, you can usually distill down into one phrase what the overall point was. That is how a trial theme needs to work. If your friend asks you what case you are trying next week, you should be able to explain the gist of it briefly, but meaningfully. I tried a case with one of my partners where our theme basically was “This is the case where the woman walked out in front of a truck.” Your theme could be less fact-specific, like “This is a case about taking personal responsibility for your actions.” Or you can throw around unnecessary Latin like lawyers often do, as I did once where the case had surface appeal, but not much substance underneath – so my theme was the NC state motto, Esse Quam Videri, which basically means “to be rather than to seem.”

Lots of different types of themes can work – what does not work is trying a case without an overarching theme. I recommend planning your trial theme by starting with the jury issues/instructions (what is it the jury will be deciding and on what basis), then work backwards through the likely evidence that helps or hurts your ability to prove or disprove the important points on each jury issue. Then you can settle on your theme, to tie together the important facts you think will decide the issues for the jury. The theme should be something you at least set the stage for in jury selection and opening statement, even if you don’t say your theme phrase or sentence in so many words until your closing.

I have seen lawyers try a case without an organizational theme. It generally sucks. Don’t do it.

2) Test. Once you have an idea for your theme, flesh it out a little with what you might say in opening and/or closing to explain the theme a little. Then, try it out with other lawyers and, especially, with real people too. We get so caught up in our cases, we live with them and watch them develop over months and years, and thus we lose perspective. You need to test both your theme and your overall trial strategy on folks, and for goodness sake don’t argue with their reactions even if you feel tempted to. Those reactions are a gold mine of information for you, so that you can better persuade the finders of fact at trial. Test your legal arguments on other lawyers as well, as it is also easy to lose perspective on what a judge may or may not go for after you have lived with a case for a long time.

Don’t fall in love with your arguments. You may think they are awesome – but if your spouse says huh-uh, listen to him or her and come up with something else. Winning is not everything, but I’m here to tell ya that losing ain’t nothing. So don’t let your ego get in the way. In fact, if there is a person that you don’t often agree with, seek them out as a test subject. There may be people like that on your jury, so you need to know how they react to your case.

3) Technology. Plan ahead of time with respect to your technology needs for the particular trial you will be conducting. I am not a big-time proponent of trial technology, by any means. In my experience, the fancy stuff can go wrong so often that you lose any benefit of the whiz-bang because the jury is wondering if you are a screw-up. However, I am a Luddite minority on this point and I know it. The important thing I want you to take from this Tip is that you had better practice the hell out of a powerpoint or an animation, or whatever else you plan to use to soup up your presentation. Tech with a glitch is so, so much worse than no tech at all.

Find out what the particular courthouse has in terms of equipment, for playing deposition transcripts or showing documents on a screen, or whatever. Not every court room can be quite as advanced as the ones in Haywood County (yes, Haywood County – I said that right, it’s pretty impressive.) In fact, in some counties you will need to bring your own DVD player and television, even, so please find out and plan ahead. Then, go early to scope out the courtroom so you can figure everything out ahead of time. I tried a case in Hendersonville one time where the opposing counsel wanted to show hundreds of pictures of a condominium project, but then it turned out that to allow all the jury to see the photos well, the projector had to be situated so far from the electrical outlet that the cord would not reach.

He found this out while the jury was watching him trying to rig this thing up on the fly. Ugh.

4) Travel. If you only try cases in a large urban county like Mecklenburg or Wake, then a) I guess you can skip this Tip and b) I feel sorry for you. If you do travel out into God’s country though, in another one of our lovely 100 counties, you need to do some homework before jury selection begins. What are the towns and cities in that county and what are their demographics? Are people from that part of the county likely to be biased against your guy or gal because of where they are from? Who are the big employers in that county and what do they make or do (so you can seem knowledgeable during voir dire.) And for Pete’s sake, don’t underline the fact that you are from out of town by making extraneous comments or by mispronouncing things.

Here are a few of my favorite examples of what not to do. I had an out of state lawyer try a case against me in my home county one time – and when a prospective juror was named Isenhower he went off on a tangent with the guy about how cool it was that he shared a last name with President Eisenhower and how he must be asked all the time if he were related…and all us local folks were rolling our eyes since there are literally thousands and thousands of people in Catawba County with that name, spelled about four different ways.

And then there was the land development case I tried over in Statesville where a know-it-all expert from Charlotte came up there to say how he was very, very familiar with the standards and procedures of the “Erdell” County Building Inspections Department. On cross, I politely asked him to say again what county he thought we were in, and he again, helpfully, mispronounced Iredell County as “Erdell” County. But yeah, he was an expert on how that county did things. Yep.

5) Terse. As in, keep things brief and to the point when planning your trial strategy, theme, examinations and arguments. Lawyers often talk too much, about too many different things, in a trial. It is not effective communication. If you are defending a personal injury case, for example, you should probably pick only one target primarily to shoot at – the plaintiff’s credibility, the doctor’s over-treatment, the spouse’s trumped up consortium claim, the lawyer’s overreaching. Pick only one because it is hard to make a scattershot approach work.

If anything this Tip is even more important when making legal arguments during a trial. If you have a legit argument for directed verdict, or to exclude important evidence, or whatever, please do not pollute your good argument with a bunch of crappy ones. Lawyers do this all the time, and it is a terrible blunder. Make your point, do it persuasively, and then stop talking. I know you want to give the judge several ways for you to win, I get that, but judges are loath enough to make any definitive rulings as it is. The practical effect of talking too much is that you lose whatever persuasive force you had going with your best argument. Same is true for case law – ONE case is enough unless you are just trying to show the weight of the law being on your side, but in that event just suggest to the judge that they only need to look at the one best case with which you started your argument.

6) Three. Humans tend to think in groups of three. Rhetoricians call this the Rule of Three, or if they also like to throw around unnecessary Latin like we lawyers do then they say “Omne Trium Perfectum.” Think about it – it is a common rhetorical device, because people remember it if you say something in a group of three: Life, Liberty and the Pursuit of Happiness; Stop, Look and Listen; the Good, the Bad and the Ugly. The list can go on and on. It works in speechwriting, it works in stand-up comedy, and it works very well in court.

I am not saying that you HAVE to create a group of three points. But if you can figure out how to do it, the technique will help the jurors remember your points back in the jury room. I have tried something like 200 jury trials, give or take, and I bet I was able to use the Rule of Three is at least 180 of those. So, by God, you can do this. If you have a bunch of points to make that is perfectly fine, but group them into three categories. Then, after you win your case, you can go back to the office and tell your co-workers: Veni, vidi, vici. (Caesar and Cicero and those blokes already knew about the Rule of Three some 2 bloody thousand years ago, so what’s your excuse?)

7) Tactics. A trial is not a game. But game theory can be used to help you win it. Every decision you make of a strategic or tactical nature is either a net positive for your position or a net negative. Sure, the outcome of the trial might end up as a draw, like in Chess, but that is not what you are aiming for when you plan your strategy. I am not suggesting that you refuse any procedural proposal made by the other side just because if they want it, you should not want it. Often you get more out of an evidentiary or other agreement than the side that proposed it, or perhaps you agree to it because you think the judge will like you to and that will pay off later in good will. I am only suggesting that you think carefully before any decision to make sure that the net positive is for you rather than against you.

My most important reason for including this Tip, though, is for multi-party cases. Just because you are at the defense table with a co-defendant does not mean you are on the same team with them. Depending on the pleadings or factual situation, you might actually be able to make common cause easier with the plaintiff instead. Conversely, if you are a third-party defendant brought in because the defendant says you are the real cause of the problem, for example, that does not mean you need to put up your dukes and fight with the defendant. Unless the plaintiff asserts a direct claim against you, then your interests and the defendant’s are exactly the same on the liability issue – to convince the jury that the defendant is not liable, since if that is true then neither are you. I had a case one time with a significant coverage issue where my defendant may have been outside the scope of employment and thus without insurance coverage – and the plaintiff’s lawyer was so intent on kicking the crap out of my client that he started asking questions in deposition that would help the carrier trying to get out of coverage. Not bright. Think carefully about your interests vis-à-vis the other interests in the case, then plan your strategy accordingly.

8) Thoughtfulness. Alright, now we move away from pretrial considerations to Tips about what style to use once you are in the courtroom. Be thoughtful, considerate, and use good etiquette. If you are normally a horse’s behind, step out of character when you are in trial. Don’t treat opposing counsel with disrespect, don’t whisper with your client too much (jurors think it is rude if you overdo it), don’t make facial expressions when the other party or lawyer is talking, and for Heaven’s sake don’t yell at your son, in front of the jury, because he is there to help you with your trial technology and it is not going well. Yes, I saw this happen with a normally very good Charlotte lawyer one time, and could hardly believe it.

9) Temperance. This one is a corollary to the last one. Maybe the Rules of Professional Conduct are not always sensible. But the one that says you should yield gracefully to the rulings of the court…yeah, that one is pretty helpful. Lawyers don’t like to lose an argument, heck neither do I, but you cannot keep arguing with the judge after you lose a point. That is, you cannot do that if you want any chance of coming back from that to win the case. I cannot tell you how many times I have seen this happen. I remember doing it myself one time, where I got carried away with myself and blurted out “Yes it is indeed relevant!” after a judge excluding my proposed evidence on the grounds that it was, ahem, irrelevant. And this was in front of one of my all-time favorite Superior Court judges.

Of course, one of the reasons I like him is because he has such an even keel, and is himself very well-tempered. He merely put me in my place the next time the jury left the room, and he was completely right to do that. He and I have never spoken of it again. There are some lawyers, though, who cannot let things go even after the judge calls them down. They keep arguing, they hold a grudge, they mutter under their breath, etc. In addition to “lawyers”, we should also call these folks “losers” since that is what they are apparently trying to do.

10) Truth-Telling. Jurors need to be able to trust you. They need to know you are being honest, fair and reasonable with them. One good way to screw that up is to be excessive, to exaggerate, or to embellish. (Hey, I just did a Rule of Three, everyone!) We have all seen this in court before, where a lawyer takes a perfectly good case and uses language that makes it sound like the most important or substantial matter since Brown v. Board of Education. As a defense attorney, sometimes my best strategy is to hope that the other side will not be able to avoid the temptation, and will turn the jury off by being excessive.

Good example of this Tip, or more accurately, the failure to follow this Tip, occurred in a trucking case I tried. The woman was hurt really bad, she had a significant claim that had substantial future damages from a permanent injury. Instead of putting up a reasonable life-care plan, however, the plaintiff’s attorneys put up a pile of smelly manure. $2 million for home health care for 8 hours, every day, 365 days a year, for the next 40 years – for a woman who could certainly take care of herself and had no trouble functioning in court for the 6-day trial. Plus - 40 years of gym memberships (um, if someone is so bad off that they cannot function at home without 8 hours of daily care, are they really likely to go to the local Planet Fitness for, ahem, the next 40 years?) and over $100k to buy and keep up a handicap van when the woman does not use a wheelchair. It was pretty bad, and they did not recover what they wanted. Don’t oversell, don’t overreach, and don’t overdo it.

11) Time. We never seem to have enough of it. At least, I know I don’t. People can’t stand for their time to be wasted. And yet, lawyers forget about this when they are conducting trials. Judges and juries appreciate organization in your presentation not only because it helps them understand the points you are making, but also because they appreciate you not wasting time. If there is a minor point you could fight about or ask questions about, consciously decide whether it is worth the effort, don’t just do it because you can. This is hard advice even for me to follow sometimes, and I am the one giving it.

Don’t just ask questions of a witness because you think people expect you to. I usually ask no questions whatsoever of a witness unless there is really something useful I can get from them. Don’t put on duplicative witnesses just because you can, and because it was your plan going in to put on certain witnesses. If things go really well with your first witness, consider just not calling the next one at all unless there is something unique and good you can get from that witness. Always focus your brain on what you are trying to prove or disprove, and how close you are to achieving that goal. If you can achieve it using less time, do that. Juries like that.

12) Tempo. Don’t be one-dimensional in trials. Communication experts will tell you that variety is not only the spice of life, but also helps people to learn. Repetition can be useful, sure, in terms of making sure the jury hears your theme and supporting facts enough times to really take, but I am not talking about what you say or do here as much as how you say or do it. For example, change your speaking style at different points in the trial. You could be a little more deadpan with some witnesses and more animated with others. By all means change the dynamic level of your voice for dramatic effect. When saying something really important in closing, for example, consider saying it much softer than you have been talking. That will actually emphasize it better than saying it more loudly.

Let me give away another couple of tricks here. Sometimes it can be effective, when beginning your closing, to start talking before you even stand up from your chair. It’s interesting, and makes the jury think you have something so important to say that you cannot wait to stand up and walk over to them. This is particularly true if you are responding to something completely unreasonable or unfair said in the preceding argument. Once you do stand up, vary the location from which you are speaking. It is more interesting, and thus will help the jury pay attention to what you are saying. If you have three major points to make (and you probably WILL, right?) then consider choosing three specific places in the floor to go to and each time you talk about one of those points, go to that same place in the floor.

One more idea – I had a case one time where the issue was that my landlord client tried to contact the tenant a number of times about a certain issue but the tenant did not respond. So when discussing that issue in closing I said “And here’s the response my client got from the defendant…” and then just looked at the jury in complete silence for about 15-20 seconds. It drove home just how uncomfortable it is when someone tries to make contact and all they get is silence in return. Plus, hopefully it was interesting – and thus more memorable.

13) Totality. A final stylistic point before we start talking a little more substantively about trial communication. By “totality”, I mean to underscore that while I have been focusing on specific points of style, I also think it critical for you to remember that you are communicating to the jury from the very moment you drive into the parking lot of the courthouse the first day of the trial. They may see you get out of your car, interact with other lawyers in the parking lot, stand in line with them at the metal detector or skip through (I suggest waiting in line unless the deputy won’t let you.) Basically, everything you do, verbal or non-verbal, tells the jury what kind of person you are. Be very careful. Even if you really are hot stuff, or think you are, be very sure that is the persona you want to portray at any time the jury might be watching. I would vote no, by the way. Be the person that you would want to present a case to you if you were a judge or juror – confident, but not a know-it-all; friendly, but not overtly back-slappy with others in the courthouse (that looks juvenile); focused, but not with blinders on to everyone around you.

14) Think. This brings me to a related point, but one more about your specific case than general style. Please remember to guard your mouth when walking around the courthouse during the trial. World War I gave us a very useful saying – “Loose Lips Sink Ships.” I once saw a defense attorney discuss his case in the hallway with another attorney prior to jury selection, mentioning things like the carrier he was there for and the settlement offers, WHILE POTENTIAL JURORS WERE AROUND. It was a classic case of loose lips. Be very careful about seeing people you know around the courthouse, and if you do need to talk to them try to steer the conversation away from the case you are trying. unless you are absolutely sure there are no eavesdroppers.

15) Talk. While we are on the subject of jury selection, let’s talk about the primary purpose of jury selection in most civil trials. Spoiler alert – it is not really about discovering which jurors to strike. Sure, that can be important, but frankly beyond a few obvious disqualifying answers to your voir dire questions, it can be maddeningly difficult to really figure out which jurors you should keep. Instead of focusing completely on that issue, consider instead the potential you have to connect with the jurors during the process by carrying on conversations with them. It is your only chance to have bilateral, give-and-take contact with them. Use it. Here I think you really should talk even if you have little to say. You may not really care, for selection purposes, about exactly what they do at their jobs, or whether anyone in their family has a law enforcement background. But follow up on such things anyway, to give you the chance to establish rapport with that juror. I know, I know – the jury instruction about voir dire specifically says that is not what the process is for. I am here to tell you, though, that if you don’t pay attention to establishing rapport with those jurors while at the same time conducting the jury selection process, you may be establishing negative rapport instead.

Remember, most aspects of a normal trial are zero-sum. Either that jury selection helped you create a relationship with the jury that will help them believe you in your closing, or it didn’t.

16) Theory. If you were listening earlier, then you know that before trial you should have come up with a theme, and a supporting plan of action that puts that theme into practice to win the jury issues. Now you are in the trial, though, and things have not worked out exactly as you expected. A witness surprised you. The judge excluded something important, or let something screwy in. Now that you have analyzed that document in light of how that other witness came cross, is the document now helpful or harmful to your position? Sure, you need a theory but make it a flexible one.

17) Training. When you get into the heat of battle, don’t forget your training. There are basics you don’t want to forget just because your heart is racing faster than Usain Bolt. For example, don’t ask a cross exam question to which you don’t know the answer. Excellent advice we learned in law school, but the temptation at trial can really be spectacular. I have deviated from the rule myself on occasion, sometimes with great success, but by God the odds are against you. Tread very carefully when leaving that straight and narrow path. Don’t ask leading questions on direct – you will be tempted to when the chips are down because you know exactly what you need the witness to say. Remember though that the jury is more persuaded by the witness than by you, because you are the lawyer and thus paid to spin things a certain way. The jury wants to hear from the witness without the lawyer putting words into his or her mouth with leading questions.

18) Trees. As in, don’t miss the forest because of the bloody trees. This is important. Many of the battles we wage in trial are not likely to influence the outcome of the war. Try to remember what is important, and devote your time and your attention to those points. The British won most of the set-piece battles in the American Revolution but lost the war, because they didn't realize that destroying the American army was way more important than taking territory by winning particular battles. Sometimes your client will want to focus on something else, some issue that really gets the juices flowing but that you know very well is not important. Pull rank, tell that client that while the tree may be very important to him, you need to focus instead on the whole forest.

The big picture is whether you are winning or losing, not whether the other side got the better of some evidentiary fight that is probably of secondary importance. In a similar vein to what I have said before, guard your time and do not get side-tracked.

19) Teach. There is a difference between teaching and preaching. As much as I like to mix things up a bit and get a little theatrical when I think it will help the jury remember something, I do think it is important that you not overdo the rhetoric. I have seen lawyers argue in a way that was preachy or over-the-top, like they were about to pass a collection plate around afterwards. You need to be emotional where appropriate, of course, but stay grounded to the issues the jury will be answering and the facts necessary for the jury to formulate those answers. The jury is not there to do rough justice based on who the parties are rather than what the evidence shows. Instead, they are there to “listen to the evidence and render their verdict accordingly”, in the words used to impanel the jury before opening statements. Raw emotional power can be, well, powerful, but in my experience jurors appreciate being treated more like partners in a process rather than sheep to be herded. Good teachers establish ties with their students, respect their intelligence, and partner with them in the learning process. Do that.

20) Listen, and Adapt. Hey, wait a minute, Hood! I thought all Twenty Tips were going to start with the letter T! What’s your problem!

My problem is that people don’t listen. They just keep barreling along with their preconceived notions and they don’t realize it when the ground shifts beneath them, because they are not paying attention. Trials are organic creatures, they grow and change and go off in directions you cannot expect. Unless you really, truly listen to what is happening during the trial you may not realize that your grand plan has become impossible to pull off. So, even if your plan is to list Twenty Tips that all start with T, don’t be afraid to adapt if that train leaves the tracks. Even if some client does not show up (yep, been there), or a witness says for the first time that she kinda wasn’t paying attention to the road because she was putting on lipstick (yep, had that), or you suddenly realize that the plaintiff is not going to put on the evidence you were going to use to focus the jury’s attention on a different negligent party than your client (yep, happened to me last week actually as I write this), your trial is not lost necessarily. Trial practice is about preparation, absolutely, but it is even more about thinking on your feet.

Y’all can think and sit at the counsel table at the same time, I bet. Appreciate what has happened, analyze how to deal with it, and adapt accordingly.

Hey, look: Appreciate/Analyze/Adapt – just happens to be another group of three…

The Rising Shortage of Stenographers

Lynette Pitt — Thu, 30 Apr 2015 16:30:00 GMT

The Rising Shortage of Stenographers

A stenographer is a very special type of person. Most have the ability to write at over 225 words per minute, just part of what makes stenographic reporting the most popular choice for documenting depositions. Operating a steno machine is more akin to playing a piano than typing on a computer keyboard. Contrary to common belief, stenographers don’t type much of anything at a deposition. They combine phonetic sounds into strokes that are then interpreted by Computer Aided Transcription (CAT) software. The result is a highly accurate and legally relevant document from a proceeding.

To this day, stenography is the only method of record keeping that can attain near perfect accuracy while providing a fully readable, searchable, and certifiable transcript as a proceeding is happening. Known as realtime court reporting, attorneys are able to annotate, bookmark, and review live testimony during the deposition. Realtime court reporting provides parties with a clear and instant understanding of testimony without having to wait for a final copy weeks later.

Schools Shut Doors on Stenographers

Because of the high level of proficiency required to be a stenographer, various reports indicate that only 5% - 10% of court reporting students ever make it to graduation. Part of the reason for this is that the price of a steno machine, CAT software, and ongoing support and maintenance can reach nearly $10,000, and the cost of tuition, books, and room and board can easily double that. However, graduation rates tell only half of the story. The more immediate and impactful change has been the decline in enrollment rates at court reporter schools across America. This phenomenon has helped contribute to the beginning of a dangerous cycle for the court reporting industry. As fewer and fewer students enroll, schools have been forced to close their doors, leaving even less opportunity for the industry to recruit young blood. With the current average age of stenographers at over 50 years old, all members of the court reporting community have taken notice.

National Association Investigates Shortage

The current predicament led the National Court Reporters Association to probe further, first to confirm the issues and second to combat them. In 2014, the NCRA released the first ever Court Reporting Industry Outlook Study with the help of Ducker Worldwide, a leading research and consulting firm. After analyzing the data, the consulting firm reported back an optimistic outlook on some relatively grim data. While the current supply of stenographers is believed to be balanced nationwide, regional shortages have already begun to emerge.

The study confirmed that retirement rates are on the rise and graduation rates have been steadily declining for at least two decades. The report forecasted that more than 5,500 additional stenographers will be needed by 2018 and at the time of the report, only 2,500 students were currently enrolled nationwide. Based on this outlook, the NCRA needed to act swiftly and decisively to turn the tide.

Youth Targeted in Marketing Mission

Armed with the industry statistics provided by Ducker Worldwide, the NCRA launched the Take Note campaign. With the assistance of BowStern, a well-known marketing and public relations firm, the Take Note campaign was launched with the primary focus of driving interest to court reporting among the youth of America. With major spots on programs such as Fox and Friends and a front page article in The Wall Street Journal, the NCRA acknowledged that the time to act is now and it was willing to put real advertising dollars toward its cause.

Digital Court Recording Emerges as Viable Alternative

While the verdict is still out on the success of the Take Note campaign, court reporting companies are beginning to investigate and pilot alternative methods of capturing the official record. The early winner among the alternatives to stenography thus far is known as digital court recording. Digital court recording is the use of digital audio and video equipment to capture a proceeding. The audio is then sent to a legal transcriber (often a stenographer) who then creates the verbatim transcript.

Digital court recording is not an exact replacement for stenography, however it is a perfectly acceptable method for a high percentage of depositions. While digital court recording does not have the full suite of offerings of stenography, there have been major strides for innovation and positive change. Services that weren’t offered in the beginning of digital court recording are now available, such as read backs during a proceeding. Additionally, as a replacement for rough drafts, many digital court recorders offer a full copy of the deposition audio.

Freelance digital court recording has developed its first legs in states like Florida, Kentucky, Michigan, and Oregon. Existing court reporting firms are initially using the digital alternative to fill in gaps for last minute depositions and depositions that may not be profitable enough for a traditional stenographer. In small pockets around the country, pure-play digital court recording firms have even begun sprouting up where shortages are more prominent. As for the long-term success of digital court recording, it will largely be determined by the industry’s ability to enroll and graduate stenographers.

Time Will Tell

Will the foresight of the NCRA lead to success at finding, training, and developing new stenographers from Generations Y and Z? Many believe this will be the case but only time will tell. In the meantime, the world of stenography can hang its hat on a 96% market share and the ability to provide services such as realtime reporting that are unmatched by any other form of record keeping.

Written by Tony Wright

CaseWorks is a full-service court reporting, legal videography, and video conferencing company that has been serving the legal community of North Carolina for over 25 years. With 9 offices located throughout the state, and through its association with the National Network of Reporting Companies, CaseWorks is well-positioned to serve clients both in-state and around the country while delivering a level of personal service that is unmatched.

Medical Practice Competition Restrictions

Lynette Pitt — Wed, 29 Apr 2015 22:00:00 GMT

Medical Practice Competition Restrictions
Bill Constangy*

The landscape is rapidly changing in North Carolina for the enforceability of employment contract restrictions on medical practice competition. The proliferation of medical practice employment contract covenants not to compete is consistent with the expanding use of such covenants to protect employers’ legitimate business interests in a multitude of businesses. Specifically in regard to medical practice, it has also been accelerated in North Carolina by the increased accessibility of medical specialty and other medical services throughout the state and the continuing rise of integrated health care systems.

It has become common for such health care systems, employing many physicians, and smaller medical practices to employ physicians bound by employment contract physician services agreements including covenants not to compete during employment and for a limited period of time after termination in a restricted physical area.

Such contracts often contain forfeiture clauses by which the offending physician agrees to give up certain retirement or other benefits, such as severance pay or pension rights, that the physician would otherwise receive. They also may contain even broader liquidated damage clauses that require the physician who violates the restrictions to pay a predetermined fixed sum based on a mathematical formula to compensate the employer medical practice for anticipated economic loss caused by the physician’s decision to remain in the restricted area and compete after termination of employment.

The inherent nature of medical services and the potential for harm to public health, raises significant public policy concerns in relation to the enforcement of such restrictions.

The North Carolina Court of Appeals noted in the 1988 case of Iredell Digestive Disease Clinic v Petrozza that “medical doctors are by no means immune from such agreements.” However, the court held that “[i]f ordering the covenantor to honor his contractual obligation would create a substantial question of potential harm to the public health, then the public interest outweighs the contract interests of the covenantee, and the court will refuse to enforce the covenant.” The court found that “public health and welfare would be harmed” by enforcing the covenant and leaving “only one gastroenterologist in Statesville.” Holding that covenant was unenforceable, the court noted that “[t]he doctor-patient relationship is a personal one and we are extremely hesitant to deny the patient-consumer any choice whatsoever.”

Interference with patient choice by physician non-compete agreements continues to be a major public policy concern. In November, 2014, the American Medical Association issued Opinion 9.02 in accordance with their Code of Medical Ethics concerning such restrictive covenants stating that “[c]ovenants-not-to-compete restrict competition, can disrupt continuity of care, and may limit access to care. Furthermore, the opinion urges physicians not to “enter into covenants that: (a) unreasonably restrict the right of a physician to practice medicine for a specified period of time or in a specified geographic area on termination of a contractual relationship; and (b) do not make reasonable accommodation for patients’ choice of physician.”

The issue of the “the effect of AMA's Code of Medical Ethics on validity of the restrictive covenants” was raised in Calhoun v. WHA Medical Clinic, a 2006 case heard by the North Carolina Court of Appeals. Two of the five physician employment contract covenants not to compete contained the following language: “no provision of this Agreement shall be enforceable by Company or Physician or any court of competent jurisdiction where local, state or federal laws and regulations and/or the AMA Code of Professional Ethics prohibits and/or discourages the conduct described in or intent of the provision(s) sought to be enforced.”

Technical evidentiary and assignment of error issues on appeal precluded the court from deciding this important question of the effect of a provision in the covenant making such covenant unenforceable if in violation of the AMA Code.

North Carolina courts have carefully distinguished substantial risk of harm to the public and mere inconvenience. The court in Statesville Medical Group. v. Dickey, a 1992 North Carolina Court of Appeals case, sets forth the following determinative risk factors: “the shortage of specialists in the field in the restricted area, the impact of ... establishing a monopoly ... in the area, including the impact on fees in the future and the availability of a doctor at all times for emergencies, and the public interest in having a choice in the selection of a physician.”

In Dickey, the court held that a 2 year restrictive covenant with “the only endocrinologist living and practicing in Iredell County” was unenforceable because it “would create a substantial question of potential harm to the public health.” The court concluded that if the restrictive covenant were enforced patients would have to travel forty-five minutes to Charlotte or Winston-Salem for treatment and “that [t]he distance between the two locations may very well impact on the availability of a doctor at all times for an emergency.” The court also considered the fact that since the plaintiff would be contracting with a part-time specialist from Charlotte to provide such services in Statesville one-half day per week that the plaintiff would have a monopoly on endocrinologist services in Iredell County and there would be no fee competition.

Public policy issues, which are central to the strict scrutiny analysis and reasonableness requirement for all enforceable covenants not to compete, have taken a backseat in the North Carolina appellate courts’ determination of the enforceability of forfeiture and liquidated damages clauses related to medical practice non-competition.

The North Carolina appellate courts have taken a softer approach to such clauses and opened the door widely for an alternative approach to damages incurred by the employer as a result of post-termination competition. In a series of cases the courts held that such clauses are not covenants not to compete and are not subject to covenant not to compete enforceability standards.

In 1975, the North Carolina Supreme Court in Hudson v. North Carolina Farm Bureau Mutual Insurance upheld a forfeiture clause in an insurance agency employment contract with an agency manager. Pursuant to the contract the employee forfeited, that is, gave up, his rights to pension plan solely funded by the employer as a result of violation the post-termination non-competition restrictions in the contract. The court concluded that “the forfeiture, unlike the restraint included in an employment contract is not a prohibition on the employee engaging in competitive work but is merely a denial of the right to participate in the retirement plan if he does so engage.”

This rationale has been applied to such clauses in medical practice employment contracts.

The Court of Appeals in the 1987 case of Newman v. Raleigh Internal Medicine Associates, upheld a “limitation of practice” forfeiture clause in which a cardiologist gave up 90 days of post-termination benefits including a productivity bonus and a portion of his base salary by engaging in a similar practice in Raleigh.

In Nalle Clinic v. Parker, a 1991 North Carolina Court of Appeals case, reversed the trial and refused to enforce a “practice limitation clause” including a covenant not to compete and a liquidated damage clause. The court found that there would be substantial risk of harm to the public by enforcing a 2 year covenant prohibiting the only full-time practicing pediatric endocrinologist from practicing medicine or surgery in Mecklenburg County. The liquidated damages provision, which was cumulative and not an alternative to any other damages for violation, such as injunctive relief or loss of profits, would have required the physician to pay 50% of his monthly compensation for each month of the breach in addition to any other remedies.

In the 2002 North Carolina Court of Appeals case, Eastern Carolina Internal Medicine v. Faidas, which was appealed and affirmed by the North Carolina Supreme Court, the court enforced a stand-alone “cost sharing” liquidated damages clause that was not in addition to a traditional non-compete provision. The clause required the physician who chose to continue practice in Jones, Craven or Pamlico Counties to pay a “reasonable estimate” of the prospective damages pursuant to a mathematical formula. The court held that the provision was not an unenforceable penalty and was not a covenant not to compete.

In the 2006 Calhoun case, even though medical specialists were involved, the NC Court of Appeals unanimously held that the liquidated damages clauses were enforceable. The non-compete covenants at issue involved five cardiologists employed by a sixty physician multi-specialty group covering seven North Carolina counties. Upon termination the five employees were prohibited from practicing medicine in those counties. The liquidated damages clause contained a formula for assessing damages if the physicians chose to violate the restrictions and continue practicing in any or all of seven counties. The clause also included a provision requiring the physicians to pay back certain payouts that they otherwise received under the employment contract. The court held that there would be substantial risk of harm to public safety by enforcing the covenant if there were no provision allowing the physician to continue practicing in the restricted area. However, the court found that the liquidated damage clauses provided an alternative, allowing the physicians to compete upon compliance. The court held that such provisions are not considered to be a covenant not to compete and consequently not subject to the same scrutiny and enforceability factors as covenants not to compete.

Without denominating it as such, the North Carolina appellate courts appear to have adopted the “employee choice doctrine” applied by the Court of Appeals of New York in the 2006 case of Morris v. Schroder Capital Management. The rationale for this doctrine is explained in Morris, as follows:

We have recognized an exception to the general disfavor of non-compete provisions, however, in the “employee choice” doctrine. This exception applies in cases where an employer conditions receipt of post-employment benefits upon compliance with a restrictive covenant. The doctrine rests on the premise that if the employee is given the choice of preserving his rights under his contract by refraining from competition or risking forfeiture of such rights by exercising his right to compete, there is no unreasonable restraint upon an employee's liberty to earn a living. It assumes that an employee who leaves his employer makes an informed choice between forfeiting his benefit or retaining the benefit by avoiding competitive employment.

However, it should be noted that the Court of Appeals has extended the enforcement of such clauses beyond traditional forfeiture clauses which consists of giving up a benefit, such as the pension in Hudson, the progenitor of North Carolina’s forfeiture clause exception, to include broader liquidated damages clauses that involve payments of specific sums of money. Also, even under the New York “employee choice doctrine”, the New York courts refuse to apply this exception to at will or fixed term employees who are involuntarily terminated.

The Calhoun court did not differentiate between enforcement of the clause in regard to the one cardiologist who was involuntarily terminated the day before he intended to resign and the other four cardiologists who voluntarily resigned.

*Bill Constangy is a retired Superior Court Judge in Charlotte, an arbitrator and mediator, the author of a law book and numerous articles on employment law and other legal subjects.

U.S. Supreme Court Describes "Ordinary Principles of Contract Law"

Lynette Pitt — Tue, 31 Mar 2015 18:00:00 GMT

U.S. Supreme Court Describes "Ordinary Principles of Contract Law"
Michael W. Mitchell, Smith Anderson, LLP

In a contract governed by federal law, does “The End” really mean “The End”? Some federal courts have said “no,” but the U.S. Supreme Court has just said “yes.”

Most contract cases in federal court involve the application of state substantive law and so it is uncommon for the U.S. Supreme Court to expound on what it considers to be the contract principles to be applied in federal cases where no state’s substantive law applies. But in a recent unanimous decision, M&G Polymers USA, LLC v. Tackett, 135 S.Ct. 926 (2015) (four justices concurring in a separate opinion), the Court took the opportunity to do just that when it vacated a Sixth Circuit decision because that court had failed to apply “ordinary principles of contract law” to a collective bargaining agreement.

The issue in M&G Polymers USA was whether the agreement, governed by The Employee Retirement Income Security Act of 1974 (ERISA), granted lifetime health benefits to employees even in the face of the agreement’s three-year term. In a prior case, International Union, et al v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983), the Sixth Circuit had adopted its “Yard-Man” inference, pursuant to which courts could construe the grant of health care benefits in a collective bargaining agreement as vested and interminable despite express language setting an expiration date on the entire agreement itself.

In M&G Polymers USA, the collective bargaining agreement provided a durational clause, stating that the employer would provide health benefits for the duration of the agreement. The agreement provided for renegotiation of its terms in three years. Despite this explicit language, the Sixth Circuit applied its Yard-Man inference and held that the health care benefits were vested for the life of all retirees. In other words, health benefits would continue after the agreement’s expiration and for the remaining life of the retirees.

But the Supreme Court rejected the Yard-Man inference in M&G Polymers USA. As the Court explained, “[w]e interpret collective-bargaining agreements, including those establishing ERISA plans, according to ordinary principles of contract law, at least when those principles are not inconsistent with federal labor policy.” Below are the four basic principles the Court applied in reaching its decision:

Intention of the parties should be determined by case-specific evidence.

Courts should use case-specific evidence to determine the intentions of the contracting parties and not the court’s own general suppositions regarding their intentions. The Supreme Court noted that the Yard-Man inference distorted the attempt to ascertain the intention of the parties because its “assessment of likely behavior…is too speculative and too far removed from the context of any particular contract to be useful in discerning the parties’ intentions.” The Court also explained that courts may look to known industry customs or usages to determine the meaning of a contract. But, the parties first must prove that those particular customs and usages apply to the contract and do so with specific evidence in each case.

General durational clauses should be construed as part of the whole agreement.

According to the Court, a written agreement is presumed to encompass the whole agreement of the parties. Therefore, it is not necessary for parties to include a separate durational clause in a contract in order to terminate any specific provision when the contract already contains a general durational clause.

The “illusory promises” doctrine does not apply where the promise is only partly illusory.

The Court also described the proper application of the “illusory promises” doctrine. The doctrine discourages an interpretation of a contract that would render a promise illusory because an illusory promise cannot serve as consideration. And without consideration, a contract is invalid. The Sixth Circuit had held that the collective bargaining agreement would be illusory if the health care benefits did not vest for the life of the employee, because some employees would not get the benefit of the promise. But the Supreme Court explained that, if a promise is only partly illusory, then it is necessarily partly real. And a real promise can serve as consideration.

Contractual obligations generally cease upon termination of the contract.

Finally, the Court recognized the “traditional principle that courts should not construe ambiguous writings to create lifetime promises.” The Court held that, generally, contractual obligations will cease upon termination of the contract. And when a contract is silent as to the duration of the term, a court may not infer that the parties intended it to last indefinitely.

While most commentators have focused on the importance of M&G Polymers USA in relation to collective bargaining agreements and health care benefits, the case also provides valuable insight into the Supreme Court’s view of those contract principles that federal courts should apply in the absence of applicable state law.

Reprinted with Permission.

North Carolina Erroneously Interprets How UIM Statute is Applied in Multiple Tortfeasor Scenarios

Lynette Pitt — Mon, 30 Mar 2015 20:05:28 GMT

North Carolina Erroneously Interprets How UIM Statute is Applied in Multiple Tortfeasor Scenarios
David S. Coats, Bailey & Dixon, LLP

In the recent case of Lunsford v. Mills, No. 385PA13, 2014 N.C. LEXIS 1202 (December 19, 2014), a matter of first impression, the North Carolina Supreme Court decided when underinsured motorist (UIM) coverage is triggered under the provisions of N.C. Gen. Stat. § 20-279.21 in situations involving multiple tortfeasors. In doing so, the Court appears to have undermined the purposes of the UIM statute and allowed an injured party to recover more than the UIM coverage they bargained for, to the detriment of the UIM insurer.

The facts in Lunsford were that Defendant Mills was operating a tractor-trailer owned by his employer (Crowder) on Interstate 40 when he lost control while rounding a curve, causing the vehicle to collide with a concrete median and flip. Plaintiff Lunsford, a volunteer firefighter, was standing in the highway median attempting to lift Mills over the concrete barrier and carry him to safety when a second accident occurred: Defendant Buchanan, traveling the opposite direction on the Interstate, swerved to the left to avoid the vehicle in front of him (itself slowing due to the tractor-trailer accident) and struck Lunsford, causing him severe bodily injuries. At the time of the accident, Defendants Mills and Crowder were covered under a business auto policy issued by US Fire Insurance Company that carried $1,000,000 in limits. Defendant Buchanan was insured under a personal auto policy issued by Allstate Insurance Company that carried $50,000 in limits. Finally, Lunsford had two policies issued by NC Farm Bureau Insurance Company that carried combined UIM limits of $400,000.

Lunsford filed a negligence action against Mills, Crowder, and Buchanan, claiming that they were jointly and severally liable for his injuries. Lunsford also put his insurer, NC Farm Bureau, on notice of a UIM claim. When Allstate thereafter tendered its $50,000 limits to Lunsford, Lunsford’s attorney demanded that NC Farm Bureau tender its limits on his UIM claim. NC Farm Bureau refused, and Lunsford later settled his lawsuit against Mills and Crowder for $850,000 (out of their $1,000,000 in liability insurance coverage). When Lunsford continued to demand payment of the UIM coverage limits, NC Farm Bureau filed a motion for summary judgment arguing that Lunsford was not entitled to UIM coverage because the total amount of his settlements ($900,000) exceeded the $400,000 in UIM coverage. The trial court disagreed, however, and entered an order requiring NC Farm Bureau to pay Lunsford $350,000 (the $400,000 in UIM coverage minus the $50,000 first received from Allstate on behalf of Buchanan).

NC Farm Bureau appealed the trial court’s ruling, but the North Carolina Court of Appeals affirmed. In doing so, the court relied on the relationship between the “triggering provision” of N.C.

Gen. Stat. § 20-279.21(b)(4) and the statute’s definition of “underinsured highway vehicle.” The former provision provides that “underinsured motorist coverage is deemed to apply when, by reason of payment of judgment or settlement, all liability bonds or insurance policies providing coverage for bodily injury caused by the ownership, maintenance, or use of the underinsured highway vehicle have been exhausted.” (emphasis added). NC Farm Bureau focused on the “all liability bonds or insurance policies” language to argue that, in determining whether UIM coverage is triggered, the insured’s UIM coverage limit must be compared to the sum of all the liability limits of all the at-fault motorists. The Court of Appeals disagreed, however, noting that the term “underinsured highway vehicle” was defined by statute as “a highway vehicle with respect to the ownership, maintenance, or use of which, the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the applicable limits of underinsured motorist coverage for the vehicle involved in the accident and insured under the owner’s policy.” (emphasis added). As the court reasoned, “a” means “one,” and thus UIM coverage is triggered as soon as the insured has recovered under all policies applicable to one underinsured motor vehicle. Consequently, UIM carriers are obligated to “first provide coverage, and later seek an offset through reimbursement or exercise of subrogation rights” against other tortfeasors.

Although the Court of Appeals’s decision was unanimous, the Supreme Court of North Carolina granted NC Farm Bureau’s petition for discretionary review, raising the specter of a reversal. The Supreme Court applied the same logic as the Court of Appeals, however, and the affirmed the trial court’s order requiring payment of NC Farm Bureau’s UIM coverage. In ruling, the court further noted that the purpose of the UIM statute – and the Financial Responsibility Act in general – was “to provide the innocent victim with the fullest possible protection.” Consequently, thecourt stated that “if Farm Bureau’s interpretation were adopted, insureds would be required to pursue all claims, including weak, tenuous ones, against all potentially liable parties, no matter how impractical, before being eligible to collect their contracted-for UIM benefits.” The court rejected NC Farm Bureau’s argument that the plaintiff received a windfall, noting that it could have preserved its subrogation rights against Mills/Crowder’s policy if it had timely advanced its UIM policy limits at the time of plaintiff’s initial settlement with Buchanan.

The Supreme Court’s decision in Lunsford provoked a dissent from Justice Newby. The dissent began by pointing out that the statutory purpose of UIM coverage is to provide a secondary source of recovery for an insured when the tortfeasor has insurance, but those insurance limits are insufficient to compensate the injured party. That purpose was thwarted on the facts in Lunsford, however, when not only did the plaintiff fail to exhaust the liability insurance limits of all the parties that he sued (by accepting a settlement for only $850,000 of Mills/Crowder’s $1,000,000 in limits) but he also received a windfall by receiving $350,000 in UIM benefits in excess of his agreed-upon damages. Justice Newby further argued that the Court of Appeals’s and Supreme Court’s interpretation of the UIM statute was flawed. According to Justice Newby, the definition of an “underinsured highway vehicle” falls within the “activation” provision of the statute, which tells us that UIM coverage is activated when the insured’s UIM policy limits are greater than the liability limits of policies connected with the tortfeasor’ s ownership, maintenance, or use of a highway vehicle. Because the combined liability limits of the jointly and severally liable tortfeasors exceeded the UIM coverage available under Lunsford’s policies, NC Farm Bureau’s UIM coverage was never activated. Justice Newby also rejected the majority’s fear that NC Farm Bureau’s interpretation would require insureds to pursue weak and tenuous claims, noting that Lunsford himself elected to sue multiple tortfeasors whose combined insurance coverage far exceeded the UIM coverage that he paid for. As he reasoned, “having chosen . . . to pursue simultaneously claims against multiple tortfeasors whose combined liability limits far exceeded plaintiff’s own UIM coverage, plaintiff was no longer able to access his UIM policy limits.” Finally, Justice Newby argued that the majority opinion blurred the distinction between a UIM carrier’s right of subrogation (if they advance their UIM limits upon notice of the insured’s settlement with a tortfeasor) and its ability to seek reimbursement from other tortfeasors.

In this author’s opinion, Justice Newby’s dissenting opinion correctly points out the multiple flaws in the Supreme Court’s opinion. As the UIM statute is interpreted by Lunsford, an insured who paid for UIM coverage limits of $400,000 – and thus protected himself only to that amount – was allowed to collect those limits in addition to the $850,000 that he received from other tortfeasors. Meanwhile, an automobile insurance carrier with moderate UIM limits was told that it should have paid those limits to its insured as soon as the insured settled with the tortfeasor with the lowest liability limits, otherwise its right to seek reimbursement of those limits from other tortfeasors was barred. This system, if it is allowed to remain in place, essentially places all of the risk on the UIM insurer, while the insured receives a benefit greater than it bargained for. In this regard, the Court has taken the “remedial nature” of N.C. Gen. Stat. § 20-279.21 a step too far.

This article was originally printed February 22, 2015 and reprinted with permission.

The Rest of the Story: Search for the Truth in Use of Force Cases

Lynette Pitt — Thu, 26 Mar 2015 13:30:00 GMT

The Rest of the Story: Search for the Truth in Use of Force Cases
James C. Thornton, Cranfill Sumner & Hartzog, LLP

The late radio personality Paul Harvey had a famous show called “The Rest of the Story.” Harvey would bait his audience with a cliffhanger story based on sketchy facts, let them reach a conclusion, and then finish it with details that put it all in perspective.

With the recent use of force events in our country, there has been much attention as to whether a police officer’s use of force was appropriate under the circumstances. The danger is that our desire for a quick answer to this question can sometimes usurp the necessity to first search for the unabridged truth. The rise of the information age – including 24/7 news outlets clamoring to be the first to break a story (however incomplete) -- only adds an additional layer of challenges for municipalities and their police forces.

So what do police departments need to keep in mind regarding training their officers and managing possible incidents in this digital world? A comprehensive understanding of the law is critical, but so is the completion of a comprehensive incident report.

Graham v. Connor: The United States Supreme Court’s Word on Excessive Force.

In Graham v. Connor, the United States Supreme Court stated that an officer’s actions do not amount to excessive force if they are objectively reasonable in light of the facts and circumstances confronting the officer, without regard to underlying intent or motivation.

The Court outlined three factors to consider in this analysis:

· Severity of the Suspected Crime

When evaluating this factor, courts look at the type of crime at issue when an officer confronts a suspect. This requires the officer to evaluate whether the suspect is engaged in a violent crime, such as armed robbery or assault; or whether the offense is non-violent in nature, such as a minor traffic violation. Whether the offense is a misdemeanor versus a felony is also a factor to consider. Courts have uniformly held that nonviolent misdemeanor offenses are not of the type that would typically give an officer reason to believe the suspect was a potentially dangerous individual. On the other hand, more serious and potentially violent offenses create a heightened awareness that the suspect may be armed and dangerous, and therefore would lead a reasonable officer to conclude force may be necessary to apprehend the suspect. Many times these lines are blurred, and the officer must use his best judgment. The real question is whether the offense at issue would give the officer reason to believe the suspect was a potentially dangerous person.

· Whether the Suspect Poses an Immediate Threat

This factor is typically the most discussed of the three, and considers such facts as the physical size of the suspect versus the officer involved, and whether the suspect had a weapon at the time. Other facts that are considered are the demeanor of the suspect when approached by the officer, and whether the suspect was willing to answer the officer’s questions. The presence of a weapon on a suspect is typically viewed as an obvious threat of harm to the officer. However, it should be emphasized that the law does not require the officer to actually see a weapon to justify the use of force. The officer only need a reason to believe the suspect is armed. For instance, if an officer sees a bulge under the suspect’s shirt or waistband, the officer has reason to believe the suspect is armed and poses an immediate threat.

Contrary to popular belief, the presence of a weapon on a suspect is not required to justify an officer’s use force. Courts have routinely held that force is appropriate in circumstances when a large-sized suspect is belligerent to the officer, unwilling to answer questions, and threatens the officer with words and body language -- even though the suspect is unarmed.

· Whether the Suspect Was Resisting Arrest of Attempting to Flee

This factor is important as it relates to the officer’s need to keep a suspect under control during the detainment or arrest process. If a suspect is calm and compliant, the need to use force is not likely present. However, there are situations where use force is justified to allow the officer the opportunity to contain the suspect at the scene. The court looks at whether the suspect was compliant with the officer’s commands, such as instructions to stop running or to show hands; whether the suspect attempted to evade arrest by turning away from the officer or running from the scene; and whether the suspect attempted to strike the officer to improve the opportunity to flee.

The Supreme Court’s Analysis – Excessive Force

The Court emphasized that the use of force determination is a fact specific analysis and must be reviewed on a case-by-case basis. The question is whether a reasonable officer in the same circumstances would have concluded that a threat existed justifying the particular use of force. Courts also are careful not to look at the particular use of force with the 20/20 vision of hindsight. Instead, the analysis is judged from the perspective of a reasonable officer on the scene at the time.

Any officer involved in a potential excessive force case should take the time to complete a comprehensive incident report, making sure the factors outlined above are addressed in detail. While the media may sensationalize the story for their own self-serving purposes based on sketchy facts, an officer’s report and other investigative documentation can serve to put the matter into the proper perspective.

It is only after the whole truth is obtained through proper documentation that The Rest of The Story can be told.

NC Court of Appeals Upholds “Class” Distinction In Determining UIM Liability Apportionment

Lynette Pitt — Thu, 26 Feb 2015 15:00:00 GMT

NC Court of Appeals Upholds “Class” Distinction In Determining UIM Liability Apportionment
Jessica C. Tyndall, McAngus Goudelock & Courie

On January 21, 2014, the North Carolina Court of Appeals handed down the Nationwide Mutual Ins. Co. v. Integon Nat’l Ins. Co. decision, affirming its somewhat controversial holding in North Carolina Farm Bureau Mutual Ins. Co. v. Bost, 126 N.C. App. 42, 483 S.E. 452 (1997) and holding that the “Class” of insured into which the claimant falls is a determinative factor in apportioning liability and credits among competing UIM policies. Nationwide, 2014 N.C. App. LEXIS 64, 1, 2014 WL 217110 (N.C. Ct. App. Jan. 21, 2014).

The fact pattern on which the Nationwide decision is based involves a motorcyclist who was killed when an underinsured driver failed to stop at a red light. The motorcyclist was a named insured on separate policies issued by Integon National Insurance Company and State National Insurance Company, both of which provided the motorcyclist with underinsured motorist coverage. The motorcyclist was also a resident of his parents’ household at the time of the accident and, as a result, qualified for underinsured motorist benefits under their Nationwide Mutual Insurance Company policy as well.

The underinsured tortfeasor admitted liability for the accident, and her insurer paid its $50,000 limit of liability. Nationwide argued that its policy and the other two applicable policies all afforded the motorcyclist primary coverage because the motorcyclist was a “Class I” insured under all three policies. Based on the fact that the claimant was a “Class I” insured under all three policies and the fact that all three policies had “mutually repugnant” “Other Insurance” clauses, Nationwide argued that all three carriers were entitled to a pro-rata share of the $50,000 paid by the tortfeasor’s carrier.

In contrast, Integon, which insured the motorcycle involved in the accident, argued that its policy and the State National policy covered the claimant with respect to vehicles owned by the claimant while the Nationwide policy covered the claimant with respect to a vehicle he did not own. Thus, based on a “plain reading” of the policies’ “Other Insurance” clauses, the Integon and State National policies would afford primary coverage to the claimant while the Nationwide policy would afford excess coverage to the claimant.

Relying on its holding in Bost, the Court agreed with Nationwide and set out a three step analysis to instruct courts and practitioners on how “UIM credit/liability apportionment disputes” should be decided. Nationwide, 2014 N.C. App. LEXIS 64, 11, 2014 WL 217110.

The Court’s three step analysis requires carriers and practitioners to first decide whether the competing policies’ “Other Insurance” clauses are “mutually repugnant,” meaning that they have identical terms or, if not identical terms, the same meaning. If those clauses are mutually repugnant, they are effectively stricken from the policies and given no effect.

When mutually repugnant “Other Insurance” clauses are involved, carriers and practitioners must evaluate the “Class” into which the claimant falls for each of the UIM policies at issue. Case law interpreting North Carolina’s underinsured motorist statute has established that “Class I” insureds are those who are “named insured[s] and, while resident of the same household, the spouse of any named insured and relatives of either, while in a motor vehicle or otherwise.” “Class II” insureds are those insureds who do not fall within Class I but who nonetheless qualify as insureds for the purpose of UIM coverage. If the claimant falls within the same “Class” for each policy at issue, the competing UIM carriers share liability and credits on a pro-rata basis.

If the claimant does not fall within the same “Class” under each of the UIM policies at issue, carriers and practitioners must revisit the policies’ language, specifically evaluating, at least in the Nationwide decision, whether the vehicle in which the claimant was riding at the time of the accident was owned by the named insured or the named insured’s spouse whose policy covered the vehicle. The “owned” versus “non-owned” distinction may require one or more policies to extend primary UIM coverage to the claimant while other policies will extend excess coverage.

According to the Court, the Nationwide decision was intended to clarify decisions handed down subsequent to Bost suggesting that the “Class” determination was not relevant to the apportionment analysis. As examples, in Benton v. Hanford and Iodice v. Jones, the Court, faced with arguably identical apportionment issues to those addressed in the new Nationwide decision, looked not at the claimants’ “Class” and instead looked at whether the claimants suffered injury while riding in “owned” or “nonowned” vehicles. See Benton v. Hanford, 195 N.C. App. 88, 671 S.E.2d 31 (2009); Iodice v. Jones, 133 N.C. App. 76, 514 S.E.2d 291 (1999).

In Benton and Iodice, the claimants were passengers riding in vehicles owned by named insureds possessing policies with underinsured motorist benefits. In both cases, the claimant passengers were also entitled to underinsured motorist coverage through policies held by family members on vehicles not involved in the collisions at issue. In both cases, the Court construed the policies’ “owned” vs. “nonowned” language to require the policies covering the vehicles in which the claimants were riding to afford the claimants primary coverage (as “owned” vehicles) while the policies covering the claimants as resident family members (as “non-owned” vehicles) afforded excess coverage.

The Nationwide Court distinguished the Benton and Iodice decisions by noting that the claimants in both cases were “Class II” insureds under the policies of insurance covering the vehicles in which they were riding and “Class I” insureds under the policies covering them as resident family members.

Because insureds of different Classes may be treated differently, the Court reasoned that those cases were decided consistently with the Court’s new three-step analysis. Nationwide, 2014 N.C. App. LEXIS 64, 21, 2014 WL 217110.

Critics of the Nationwide decision point out that the Court’s analysis seems unnecessarily complicated given that, as Integon and State National argued, the dispute could have been decided by applying the plain language of the policies’ “Other Insurance” clauses to the facts. Instead, the Court has inserted the Class I/Class II dichotomy into the analysis without having any contractual basis in policy language to do so.

On the other hand, as Nationwide itself argued in its appellate brief, “for the sake of consistency and predictability, the focus [of the Nationwide decision appears to have been] on determining what the law actually is, rather than what the law arguably should be.” Brief for Appellee at p. 27, Nationwide, 2014 N.C. App. LEXIS 64, 21, 2014 WL 217110 (No. COA 13-640)(emphasis in original). In that regard, the Nationwide decision upholds Bost and perhaps provides practitioners and insurers more certainty when these disputes arise. Now, whether grounded in policy language or not, the initial inquiry will be to look at the Class into which the claimant falls first with the ownership or nonownership of the vehicle involved in the collision becoming a secondary inquiry.

Meet the New Boss…

Lynette Pitt — Thu, 29 Jan 2015 17:03:42 GMT

Meet the New Boss…Strategies to Help Young Lawyers As New Managers
Kelli A. Burns, McGuireWoods, LLP

Learning how to navigate being a boss and managing people can be a difficult transition, but it is doable. Many young lawyers are thrown into the “boss” role for the very first time without much, if any, training or experience in managing people. It’s even more challenging when these new responsibilities require a young lawyer to manage individuals that may have been in their jobs longer, or have significantly more experience than they do. These situations can be challenging and often rather than cultivating a sense of pride and accomplishment, can cause even the most capable young lawyer to experience an increased amount of anxiety and stress. What’s important is to take the role in stride, communicate, and open yourself up to feedback.

Everyone make mistakes, everyone has bad days, and everyone has moments they just want to get up and walk out the door. Being a good manager is figuring out how to motivate people through those moments, help keep and improve morale, and most importantly making sure the people who report to you feel valued and appreciated while maintaining an appropriate level of productivity. There are some basic principles and ideas that can guide you through the initial struggles until you get your footing.

Take a minute to think about what it is that you need and crave from your supervisors. Chances are most of you thought about the same few overreaching ideas: (1) having a clear understanding of what is expected of you; (2) receiving feedback on your performance; and (3) getting recognition for your work. Now the trick is implementing those same desires into how you manage others.

Setting clear expectations is the foundation for effective management. Without clear expectations, you have set yourself and those under you up to fail. A prior supervisor of mine used to say “set yourself up for success” about ten times a week. It drove me crazy at the time – similar to when your parents used to say “if your friends jumped off bridge, would you?” But it is now a mantra that flows through my head regularly. Setting up for success includes knowing the strengths and weaknesses of the people you are managing – as individuals and as a whole. It may be that you sit down with each individual early on and ask them what they believe their attributes and interests are, while also observing from afar. Taking initiative to learn about your team will also allow them to develop a sense of your management style, while also building your credibility as a manager that strives to see your whole team succeed.

Another critical part of setting clear expectations is leading by example. Keeping a positive focus, avoiding venting or gossiping, and meeting your own expectations, will set the tone for your team and provides leadership. Solution based thinking, rather than the problem focused alternative, also fosters leadership qualities. Do not underestimate how your actions feed and nourish your team’s attitude.

People crave and need honest feedback on performance, whether good or bad. In providing feedback there are some golden rules to live by. Always praise in public and discuss issues with performance in private. The “sandwich” method of providing constructive criticism seems to be the most effective. Start with something positive, then provide the comments on what could be done better, and always end on a positive note. Face to face meetings are always better than an email or phone call. Who wants bad news via email? While email may be easier to say something difficult, words on a page have no emotion and there is no opportunity for mutual discussion. Instead, a face to face meeting not only shows you are truly interested in the person and their development, but it also allows for expressions and tone of voice to assist you in delivery of the feedback and minimize misinterpretations. Plan to go to their office or work area or meet in a neutral spot like a conference room – it provides a sense of ease for a person to be in their own environment (no one likes to be called to the principal’s office). The fastest way to undermine yourself and the sincerity of your attention is to look down at your phone or answer an email during a meeting, so don’t do it. Be present, it will be appreciated.

When providing any type of constructive criticism, be sincere, but specific about what behavior or actions you want to see altered. Provide potential solutions, specific ideas, or options on how to correct the course. That said, do not compare one team member to another. No one wants to hear how their older brother got straight A’s and your B’s just are not measuring up. Effective management understands and respects the individuality of the people who report to them and utilizes each person’s strengths to the betterment of the team while working on changing the weaknesses into assets.

Probably the most important thing in being an effective manager is knowing how, and when, to recognize the people you manage. Recognition is a basic need of all people. Recognition not only that they are trying to work hard and exceed expectations, but simply, that they exist. Recognition can come in many forms: praise, acknowledgment, awards, and money to name a few. As young attorneys, we do not have any real control over awards or raises, but we can give recognition by way of praise and acknowledgment. While getting to know your team, you should also understand how each member of your team would like to be recognized. Some people enjoy being praised in a public environment, some in private. Also, recognition should be consistent, just be sure it is deserved and does not become an entitlement. Contradictory, right? If people see unfairness in what prompts the recognition, it only serves to divide your team. However, if you always recognize people in the same way and on a consistent basis, it no longer becomes a special thing and becomes expected.

Recognition by saying “you did a good job” is a start, but it does not a provide powerful communication of praise. Instead, be specific about what it was that made you notice the team member – “thank you for taking the initiative to call the court and determine if our assigned judge would like a proposed order for the motion hearing.” The second statement reinforces that you appreciate the initiative as well as the action.

Recognition can also be simple. Walking around the floor, or showing your face for something other than delegating a task is recognition. Merely taking a moment to have a conversation while remembering names of children or a significant other, and details of interests of each of your team members, demonstrates that you care and understand they are human beings who desire to be noticed. Acknowledging life events, birthdays, employment anniversaries, marriage, birth of a child, etc., will also go a long way. Be sure these are noticed equally among all members.

Managing people effectively is challenging – we have all had bosses that were ineffective in one way or another – so approach it with intent and a plan. Consider what motivates you and the interaction that you desire from your superiors and apply them to your own management style.

Advice from the Experts: How to Become a “Rainmaker”

Lynette Pitt — Thu, 30 Jan 2014 18:09:07 GMT

Advice from the Experts: How to Become a “Rainmaker”
by Leslie P. Lasher, Teague Campbell Dennis & Gorham, L.L.P

At some point, every young lawyer transitions from learning how to practice to learning how to use their practice to generate business. In the first few years, your goal is simply to learn how to practice law. After a few years, the focus shifts from learning how to practice to trying to find your “niche.” Then comes the big one: once you have figured all of this out, you have to figure out how to generate business. Then, maybe one day you will be a “Rainmaker,” which is of course the ultimate goal in the marketing world.

This process generally occurs in steps. Sometimes, though, we have to try to figure all of these things out in one fell swoop. This process is not easy and leads to questions like: What if I am still figuring out what areas I want to practice in? How do I market myself? How to I earn the business of my ideal clients? What organizations are really worth my time? And my personal favorite: How do I sell myself as an expert in a certain area when I have only been practicing four years?

The Young Lawyer’s committee hears these questions all of the time. So, we thought it would be worthwhile to seek some advice, and who better to ask than some of the State’s most highly regarded defense attorneys. Our distinguished panel of experts includes:

Julie Theall Earp, Greensboro
David Allen, Charlotte
Leslie Packer, Raleigh
Nick Ellis, Rocky Mount
Don Ennis, Wrightsville Beach, and
Bill Bulfer, Asheville

The following recommendations are a compilation of the experts’ intuitive, and sometimes off-the cuff advice on “How to become a Rainmaker.”

1. Quality sells. If you do a good job, people notice. Your current clients will not continue to hire you if you do not produce quality work, nor will they recommend you to others. According to the experts, the main reasons clients choose to fire their attorney is because the attorney was a poor communicator, was not worth their high fees, or did not pay enough attention to their case.

So, while your client may not appreciate how brilliant your brief was on the Motion for Summary Judgment, they are abundantly aware that you cannot spell correctly in an email, always send their correspondence to the wrong address, or cannot explain a basic legal issue in a way they can understand. These are easy things to get right, and they are easy things to be good at. So, it goes without saying that the first step in becoming a “Rainmaker” is to pay attention to detail, sharpen your skills, and perfect your work product.

2. Become an expert. Find something you like, and go with it. Then, learn everything about it that you possibly can. Find someone who is in that field, whether it be an attorney, a client, or a friend, and ask them to teach you everything they know. You should not let your age or year in practice hold you back from learning, but instead use it to help set yourself apart at an earlier age. Ask for a ride along or a plant tour. Take a class in order to learn your clients’ trade or skill. Ask the experts in the area what publications they read, and start reading them. Then, start writing and presenting on topics that are interesting and useful in that particular field. Don’t be shy. Tell your colleagues and your clients about your interest and your new found expertise and ask them if they know a group that would benefit from your knowledge, articles, and presentations. In order to sell yourself, you have to know yourself, so start learning.

3. Sell your product. Once you have the work product and the expertise, one expert says: “you simply have to get out of the cloud that you currently walk around in.” As another expert put it: “you are never going to get a date if don’t ask anyone out.” So, start thinking of yourself as a product provider, and start thinking of everyone you meet as a potential client or a referral source. Figure out who your ideal client is. Figure out what they like to do and where they hang out. Then, go there and hang out with them. Stop telling people what you do for a living and instead tell them how you can help them with what they do for a living. Start telling your ideal clients how much you like to work with them, and ask them to keep sending you work. But, don’t be the pushy lawyer that is always saying “we want your work!” Everyone has the capacity to sell their product, but different approaches work for different people. Forget the dog and pony show and take the time to figure out what works for you, and then, go do it.

4. Build and maintain personal relationships. According to one of our experts, this is the “don’t be a jerk” part. If people think you are a jerk, they are not going to recommend you. According to another expert “Competence is presumed. Relationships are what really make you successful.” So, be genuine and empathetic. Become as invested as you can, and always use the word “we,” never “you” or “me.” Do not be Facebook friends with people you meet, be actual friends. Call people on their birthdays, send them a memento after you win a big case, or send them a handwritten note every so often. If your clients are not up for the standard “conference dinner,” put on your jeans and go watch football instead. Lawyers do not typically get clients by showing the depth of their legal knowledge, so, stop talking about law all of the time. While it certainly does not hurt educate a client on a certain issue, taking a genuine interest in your client will likely get you farther.

5. Be intentional and get involved. Only really lucky people become “Rainmakers” by chance. Yes, some people are just naturally born for it, but for most people, it is going to require a lot of very intentional effort. Start by determining the most important organizations to you and your practice. For attorneys that get business primarily from lawyer referrals, this may mean becoming involved in a state wide organization, like the NCADA or the State Bar Association in order to expand your referral base. For others, this will mean finding the trade association that your niche group of clients belong to. Then, as one expert says “you have to get involved- with capital letters: INVOLVED.” It is simply a waste of your time go to an event and not meet new people, or to be on a committee and offer no input. You have to be dependable, and you have to devote your attention to the organizations you have chosen. When you are engaged and intentional, whether it is in your law firm, organizations, or personal life, good things will follow.

All of the experts unanimously agree on one thing: “Rainmaking” is not rocket science. There is no trick or magic pill. While these attorneys are now experts in maximizing the balance between practicing law, marketing, and generating business, getting there was a career-long process. As one expert aptly noted: “At the end of the day, there are hundreds of lawyers who do exactly what you do, just as well as you do. So, you have to find a way to be memorable. You have to be true to yourself.” Becoming a “Rainmaker” simply does not happen overnight, so we as young lawyers should not become discouraged. We simply have to have our eyes open when an opportunity presents itself, be smart enough to recognize it, and brave enough to take it.