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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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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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by Queen City Court Reporting

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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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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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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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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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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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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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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