Professionals may be exposed to liability outside of their “home” state. For those professionals that provide interstate advice, they may be subject to the jurisdiction and laws of any state in which they practice. Take for example the recent legal malpractice case in which a Connecticut law firm was dragged into a lawsuit in Arizona because of allegedly negligent tax advice. Sure, the first rule is to avoid a lawsuit. But, a close second rule is to implement procedures such that the professional is in a better position to defend the inevitable lawsuit. A forum selection and choice of law clause may be the key.
Many aspects of litigation involve high levels of emotion when reputations, resources, pride, and goals are on the line. Nonetheless, it is highly unusual for an attorney to be subject to mental distress damages arising from a legal malpractice claim. Recoverable damages are usually limited to compensatory losses. However, a recent decision from Iowa’s highest court suggests that the tide may be turning.
The fact pattern sounds like it was ripped from the pages of a Hollywood screenplay. Two criminals back a trailer to a pharmaceutical warehouse and cut a hole in the ceiling of the facility. They proceed to utilize the company’s own forklifts to load over $80 million in prescription drugs into the trailer and exit without detection on any security cameras. All told, authorities estimate that the heist represents the largest known theft of prescription drugs in US history. The last scene in this bizarre, real world thriller takes place in the Federal District Court of Connecticut where the parties are fighting the first cyber liability suit of its kind with major implications on the fiduciary responsibilities of data storage and security companies.