Many legal issues are easier to articulate than they are to resolve. For example, suppose State Y does not recognize a testimonial privilege but a witness is called to testify from State X which does recognize the privilege. Can the witness who holds the privilege claim it during litigation pending in State Y? Due to differing legal constructs applied by state courts, it can be an onerous task for counsel to determine whether certain documents or communications are considered privileged or are discoverable in interstate litigation.
In the professional liability world, errors occur. To quote Forrest Gump, “*% happens!” These errors can carry great consequences, and can include payouts by insurers under E&O policies. However, what happens when there is a possibility to rectify the error and place the would-be plaintiff in a position where they were before? Also, how conceivable is it to utilize funds from other sources as a means to bring closure to claims.
There is a growing phenomenon of securities class action and shareholder derivative suits arising from the #MeToo movement. Specifically, these suits address the alleged failure of corporations to disclose in public filings and/or prevent sexual harassment by corporate officers and directors. Moreover, the suits allege a corporate culture permitting such conduct to be engaged in. The latest suit targets a well-known pizza chain.
On August 13, 2018, New York State Governor Andrew M. Cuomo signed an anti-hazing bill targeting student hazing at higher education institutions. The bill amends the New York Penal Code and prohibits certain physical contact as well as the physical activity requirements traditionally found in many student organizations’ initiation ceremonies, and which frequently result in serious injury, and sometimes in fatalities.
Unlike most licensed professions, the practice of law can significantly restrict an attorney's geographic mobility. If an attorney wishes to move to another state, it typically requires at least one year of planning before the move is possible. This may include studying for and successfully taking the new state's bar examination, re-taking the Multistate Professional Responsibility Exam, and going through another character and fitness review. However, the Uniform Bar Examination is now used in the majority of states and there appears to be significant momentum toward a more relaxed approach to attorney licensing. While a recent decision by the Ohio Board of Commissioners on Character and Fitness may appear to be a halt on this new trend, it will likely also serve as one of UBE proponents' key examples of an arguably archaic system that must be changed.
The customer isn't necessarily always right. Neither is a patient. In Gardner v. CLC of Pascagoula, LLC, the Fifth Circuit Court analyzed an employer’s alleged failure to respond to a complaint of inappropriate actions of a patient in an assistant living facility. The allegations are unsettling. Plaintiff worked as a Nursing Assistant with the responsibility of caring for patients including one suffering from dementia, who had a long history of violent and sexual behavior toward fellow patients and staff. While being cared for by Plaintiff, the patient repeatedly grabbed her private areas and asked for explicit sexual acts. This was a daily occurrence. Allegedly, Plaintiff's complaints to her employer were effectively ignored.
Often, case law relating to insurance agent/broker E&O typically involves the procurement of property/casualty insurance or the handling of property/casualty claims. However, there have been some recent developments relating to the duties and responsibilities of life insurance agents/brokers that are important to note.
The increase in connectivity has greatly improved an attorney's ability to represent her clients. From searching a party on social media, to quickly parsing through online materials, saves hours and hours of time. Furthermore, attorneys can leverage professional organization memberships to seek input from thousands of other practitioners on legal questions or strategic decisions. Thus, an attorney can investigate deeper than ever before and easily liaise with other practitioners. But, this cuts both ways. Attorneys must be aware that technological advances also mean that her own clients and experts are vulnerable, and they must take steps to protect confidential information as necessary.
July 4 is not the ideal time to consider insurance but for too many it is a reality. By way of a reminder, after voting for independence on July 2, 1776, in the midst of the American Revolution, Congress turned its attention to the Declaration of Independence. The document was a statement explaining this decision, which had been prepared by a committee led by Thomas Jefferson. Congress debated and revised the wording of the Declaration, finally approving it on July 4, 1776. The following year, Americans celebrated their independence with fireworks and the tradition continues today. Let’s celebrate our Nation’s birthday safely. Reportedly, there are more than $35 million in fire damages every July 4. On average, about 7 fireworks related deaths are reported each year (along with 20,000 injuries per year from BBQ grill accidents!). As we reflect on and enjoy the holiday, be smart and stay safe. Happy 4th of July from your friends at Professional Liability Matters.
It is no secret that parties more often settle than proceed through trial. While courts roundly applaud this as beneficial to both the system and litigants, it sometimes generates second guessing from the clients. As Larry David put it, "a good compromise is when both parties are dissatisfied." It is therefore no surprise that many legal malpractice claims follow from settlements, despite the general principle that the settlement itself precludes such a suit. In a recent decision from the New Jersey Appellate Division, the court's discussion of when this principle applies does little to pacify concerns of attorneys that their clients will settle and sue. Even well documented settlement agreements, and testimony reflecting a voluntary resolution, still can be undone via a malpractice complaint.
The risk of a malpractice claim is real. That's the bad news. But, now that we have your attention, the good news is that insurance is available to defend and indemnify professionals who face malpractice claims. In order to receive coverage, however, professionals generally must disclose whether they are the subject of any potential claims when completing their applications. If an insurer discovers that a professional had knowledge of a potential claim, but failed to disclose it, it could rely upon the nondisclosure as a basis to disclaim coverage.
Employees should feel safe at work. But not everyone is that fortunate, including an assistant manager at a Burger King who was attacked at gunpoint when attempting to make a bank deposit on behalf of his employer. He allegedly suffered from PTSD and depression. Burger King denied his request for an accommodation by changing his work schedule prompting an interesting decision.
The smoking gun. That key piece of evidence that will conclusively prove your client's case and guarantee victory may be out there. Truly dispositive evidence is rare, given that most cases turn on a series of events, an application of the law or several facts, as opposed to one document or one line of testimony. But what if you discover that key fact which is harmful to your own claim? It may be tempting to quickly settle the case without disclosing the smoking gun. Not so fast. A recent decision from the Western District of Pennsylvania has taken issue with that response from counsel for the plaintiff, and awarded sanctions for the failure to quickly dismiss the complaint.
No one is perfect. In the adversarial arena of litigation, attorneys are rarely willing to admit even having a weak legal argument, let alone an actual error. However, the American Bar Association recently issued an opinion which makes it an ethical duty for attorneys to disclose any material errors in representation to their clients.
Show of hands: who'd like to receive less pay for performing the same functions as your colleagues? The Equal Pay Act seeks to combat this issue and permits wage disparity only in the most limited of circumstances. In a recent federal decision, the court addressed whether an employer's computation of salary based on a strict formula violated the Act when it resulted in disparate payment of female and male employees.
Third-party litigation funding is still in its relative infancy and yet it has blossomed into a massive industry. Litigation funding spans from payday-like loans for personal injury litigation to multi-million dollar intellectual property disputes. Many attorneys across the spectrum have commented on the issues that could arise from this new market, but malpractice lawsuits in connection with the funding itself are extremely rare. However, a recent suit filed in the United Kingdom could be a sign of things to come for those firms who are involved in the financing transaction itself.
It’s been said that the first step toward success is showing up. But is that always required in the workplace? More to the point, is physical presence an essential function of an employee’s job? Sometimes. In a recent decision, the Sixth Circuit addressed whether physical presence was an essential job function for an in-house legal counsel employee.
In a recent decision, the Pennsylvania Supreme Court brought the commonwealth into line with the majority of states in allowing predecessor law firms to bring quantum meruit claims against substituted counsel. In the underlying case, the plaintiff’s claim was originally brought by an attorney at Firm A who then left for Firm B. While the plaintiff initially allowed Firm A to remain as co-counsel, the firm was eventually dismissed and the case settled. Firm A then sued Firm B to recoup a portion of the attorneys’ fees for work performed until dismissal.
Is obesity a disability? No. Well, can obesity lead to an ADA-defined disability? That's where things get tricky. In Ronald Shell v. BNSF Railway Co., a federal court in Illinois addressed these questions and others when a prospective employer denied employment due to its belief that the would-be employee could develop a disability resulting from his obesity.
At 2 a.m. on Sunday, March 11, 2018, people across the United States will set their clocks forward one hour to begin Daylight Saving Time (DST). The change is intended to align the average workday more closely with the hours that the sun is visible, which studies have shown to cut energy consumption, reduce instances of seasonal affective disorder, and even boost regional economies. Often perceived as a holdover from a simpler and more agrarian U.S. culture, the practice actually enamors some contemporary lawmakers: the Energy Policy Act of 2005 actually expanded DST by four weeks.
Attorneys referring cases amongst each other is as old as the practice itself, with referral fees embedded in state and model ethical rules. Whether a conflict exists or the attorney who receives the case is not adept at handling that type of matter, a referral can be a way for attorneys to be rewarded for successful marketing while ensuring proper client representation. However, when a firm appears to focus solely on marketing, and not on the legal matters advertised, significant ethical concerns arise.
It’s generally known that communications between attorney and client are privileged absent waiver. Often, the client may waive the privilege by sharing an otherwise confidential communication with a third-party. But what if the third-party was engaged by counsel? Parties to a transaction rely on multiple outside professionals to advise on legal and business matters. In such cases, otherwise confidential communications are sometimes shared by counsel with third-party consultants hired to assist with the matter. However, the mere fact that a third-party consultant was engaged to assist with a matter at the same time as an attorney, does not necessarily mean that communications with the consultant are protected from discovery.
For most professionals, renewing your policy is a matter of fact that includes little thought beyond answering a questionnaire. However, it is incumbent upon both insurers and policyholders to regularly review policy language to determine what is, is not, or only may be covered. For example, there is often an assumption that most policies will not cover certain criminal or intentional acts, but that is not always the case. For example, in a recent New Jersey District Court decision, the court found that an insurer…
One of the primary points of contention in data breach actions is when, and whether, sufficient damages exist to meet the standing requirements under Article III. Circuit courts across the country have come to different conclusions, with some requiring a showing of actual damage and others allowing the existence of the breach to essentially serve as confirmation that the data will be used illicitly. According to a recent brief in support of certiorari, the DC Circuit falls into the latter category and a review by the Supreme Court is necessary to resolve the current circuit split.
Similar to the fallout from Enron, the Great Recession of 2007 saw many accounting firms back in the cross-hairs for allegedly failing to warn of the impending financial doom. Many of these entities (turned plaintiffs) were massive companies with billions in assets, leading to protracted and expensive litigation. While some cases settled to avoid further legal costs, one major accounting firm was recently found liable for violating audit standards for one of its major bank clients prior to the Great Recession. The presiding judge is now set to proceed to the damages phase of the trial, where it will be determined the extent to which damages were caused by the violations.
One of the most common problems facing a would-be plaintiff considering a malpractice case is when to file suit. Similarly, those that defend professionals must consider whether to move to stay proceedings if applicable. Especially with accountants and attorneys, causation and damages are difficult to calculate until the underlying matter has concluded. This means that the notoriously long legal process can often come into conflict with the statute of limitations, or create evidentiary problems. The decision is whether to wait many years for the underlying action to conclude and damages to materialize, or continue with the malpractice action in the midst of unresolved issues although the facts are still fresh in witness’s minds. In a recent Texas appellate decision, the court ruled that the case should proceed immediately.
The New Jersey Supreme Court recently declined to dismiss a medical malpractice case for an attorney’s failure to file a timely affidavit of merit (AOM). The court based its decision in large part on the trial court’s failure to schedule a preliminary conference (called a "Ferreira" conference in NJ) to discuss the sufficiency of the AOM. The court further stated that it would order improvements to the courts’ automated case management system to ensure the electronic notification of both the AOM filing obligation and the scheduling of such Ferreira conferences.
Professionals assume a duty of care to their clients. Accordingly, professionals may be held liable for damages to clients that are proximately caused by their negligent acts. In many cases, the link between the professional’s negligent act and the client’s injury is clear, such as a missed deadline that waives a client’s rights. The limits of foreseeability become more difficult to define when the professional’s alleged misconduct triggers independent acts by third parties, such as a government investigation of the client.
With the recent wave of allegations concerning employment-related conduct, there may be in uptick of employers engaging outside firms to conduct internal investigations. While these can be kept in-house, high profile cases and social media often results in the publication of these reports to the public. Consider the NFL’s investigation of the Miami Dolphins known as “bullygate.”
In a decision addressing the facts necessary to plead a breach of fiduciary duty claim against a broker, a California federal district court considered the difference between an “ordinary” broker-customer relationship, and one which rises to the level of a fiduciary relationship.
Friendship has taken on new meaning in the age of social media. Old acquaintances, former classmates, co-workers, professional contacts, public figures, family, and close companions may all be similarly situated as a “friend” on social media, regardless of the level of personal interaction with each. Social media users therefore often apply more liberal standard when accepting new network friends than they would in their personal lives. Professionals, however, may need to be more cautious.
Today’s employees demand flexibility. In turn, many employers are moving towards a “results orientation” business model and getting away from the standard 9-5 schedule. In other words, the employer cares less about when employees get the work done, and only cares that the work gets done effectively. Employment laws are only beginning to catch up to this shift in work hours. Take for example the recent decision where the Third Circuit confirmed that the FLSA requires employers to compensate employees for breaks of 20 minutes or less where the employer allowed employees the flexibility to log off their computers at any time they wished.
Huge cybersecurity breaches at major retailers caught the attention of the public and have made headlines. Now, more recent breach at one of the major credit reporting agencies has the attention of Congress. 48 states and the District of Columbia already have some form of legislation governing security breaches. These statutes typically begin by laying out who is subject to the requirements, such as businesses and information brokers, and what information is considered protected “personal information.” The laws then outline what constitutes a breach, the requirements for providing notice, and exemptions to the law. What's next, Congress?
Captive insurance companies have long been a popular vehicle for companies that require insurance in areas where it is hard to find coverage. Although the IRS has been somewhat suspicious of captives for some time, it was not until the past several years that microcaptives, or captives for smaller companies, apparently piqued the interest of the IRS. After the Tax Court issued an opinion over the summer, several other similar cases have gone to trial and await opinion. The result of these cases will have a significant effect on professional firms who facilitated the creation of these microcaptives, as the businesses hit with improper deductions and tax penalties will likely look for somewhere else to lay the blame.
Cases turn on the evidence. In the case of an employment discrimination or retaliation claim, the key may lie in the employee file maintained by the employer. One common piece of documentation created and maintained by many employers is performance evaluations. In Walker v. Verizon, a federal district court in Pennsylvania ruled on a case illustrating how important documentation can be in defending these claims.
Employers rely upon employees to get the job done. Usually, the “job” requires the employee’s physical presence at work. But injuries and medical conditions throw a wrench in the works. Most employers are at least generally aware of the implications of various federal and state laws governing treatment of employees with medical conditions and injuries. Yet, there is plenty of gray area where employers may be subject to liability. Take for example the recent decision in Severson v. Heartland Woodcraft, Inc. where the Seventh Circuit decided whether an employer could terminate an employee who requested a multi-month leave of absence from employment.
Attorneys and their clients must make strategic decisions during litigation whether to take certain actions that are available to them. Should you move for dismissal or answer the complaint? Should you seek more specific answers to written discovery, or just save your questions for a deposition? These are common questions that do not necessarily have a “right” answer. However, the Pennsylvania Supreme Court recently ruled that waiting too long to decide on a motion to recuse may result in the request being untimely.
Making a referral is most often understood as a recommendation as to the quality of that professional’s services or products. In turn, there are different tort theories that are recognized in many states for negligence in doing so, and potential liability for the actions of a referred professional. What is far less common is to allow liability to flow through several parties even absent independent conduct or a theory of agency.
There are several federal laws with protections for pregnant employees and those employees experiencing complications from birth. Depending on the circumstances, FMLA, ADA and/or the Pregnancy Discrimination Act (“PDA”) may be triggered. In Hicks v. Tuscaloosa, the Eleventh Circuit ruled on a case involving an employee’s post-pregnancy lactation and need to nurse her newborn.
Today it seems as though cyber-security protections are always a half-step behind hackers. For every patch that quietly protects from one type of ransomware, there’s another WannaCry infecting a major company or financial institution. Of course, cyber-security is an important concern for all businesses, including professionals, a point which is still gaining awareness across the country. As these less technologically sophisticated businesses learn more about the importance of cyber-security in the modern world, it can be easy to forget that there are many everyday protections that are just as valuable as the software that protects your data.
Navigating the waters of employee leave is tricky business for employers. At the federal level, FMLA requires "covered" employers to provide employees with job-protected and unpaid leave for qualified medical and family reasons. The question of the appropriate causation standard that must be proven in an FMLA claim is not unanimous among the Circuit Courts. In Woods v. START Treatment & Recovery Centers, the Second Circuit put its stake in the ground.
Professional liability insurance is necessary to any responsibly-run professional practice. The limits of coverage available under an E&O policy help to protect professionals against financial loss. However, the limits of coverage between different policies do not necessarily offer the same protection, even if the face value would appear to be same. For instance, a policy may specify that costs of defense are included in the limits of coverage, a/k/a “burning limits,” which reduces the amount available to satisfy a judgment or pay a settlement as the case progresses. Generally, a policy will state limits of coverage available for each “claim” made against the insured, as well as aggregate limits that cap the amount of damages if multiple claims are brought. Separate claims are easy to distinguish when separate lawsuits are filed by different parties involving unrelated acts. However, do separate claims exist when a single lawsuit is filed that alleges several different instances of misconduct?
New York has joined a growing list of states with ethics boards limiting an attorney's ability to participate in online legal service providers like Avvo and LegalZoom. Similar to other jurisdictions, the New York ethics board authored an opinion honing in on the so called “marketing fee” charged by Avvo for attorney use of its website. Although the opinion declines to decide a list of other potential ethical issues with the company, it concludes that the “marketing fee” is actually a referral fee in violation of Rule 7.2(a) of the New York Rules of Professional Conduct.
Marijuana laws are evolving in the US. Marijuana is a Schedule 1 drug under the Controlled Substances Act, and has no accepted medical use under federal law. However, 29 states and Washington, D.C. have passed laws that decriminalized medical or recreational marijuana use. Nonetheless, many employers have longstanding zero tolerance drug use policies. The question remains, how should employers reconcile their internal policies with the laws requiring employers to accommodate employees with certain medical conditions? The answer is hazy.
Many business deals begin with a handshake or a quiet conversation. Corporate America is filled with side deals and compromise and promises. Often, these arrangements are perfectly acceptable. But, the intersection between business and politics is a different animal; there are strict regulations regarding governmental contracts and bids and proposals. Transparency is key. Attorneys engaged by governmental contractors must be careful. The recent indictment of a Pennsylvania mayor and an outside attorney in what is being alleged as a pay-to-play scheme is a reminder of the fine line attorneys must walk. In addition to the target-attorney being named, the indictment is littered with references to other attorneys allegedly involved in the scheme. This involvement spans from contributions to the mayor’s various campaigns to presence at meetings to discuss city contracts. While many clients may battle for the throne, attorneys must steer clear of even the appearance of impropriety.
Federal civil rights actions are somewhat unique in that they allow the prevailing party to be granted “reasonable attorney’s fees.” An employer on the wrong side of a decision or verdict could leave it paying (a) damages; (b) its attorney's fees and (c) its adversary's attorney's fees. But what are “reasonable” attorney fees? In Sommerfield v. City of Chicago, the Seventh Circuit shed some light on this important question.
Most jurisdictions require that a plaintiff establish allegations of accounting malpractice through expert testimony. Moreover, accounting experts are often relied upon to establish damages. Accordingly, the vast majority of litigators, even those outside of the malpractice community, will encounter a CPA expert witness. This may be daunting for attorneys. Fortunately, there’s a handy, but underutilized, guide. The special reports to the AICPA Code of Professional Conduct include ethical standards required of every CPA. The reports provide a readymade guide for evaluating the efficacy and admissibility of a CPA expert’s testimony. Using these standards as a benchmark should help practitioners retain and oppose an accounting expert.
Most employers know of the requirement to adjust any aspect of the working environment which may conflict with an employee’s religious beliefs. At the federal level, under Title VII, an employer must make reasonable accommodation for the religious observances of its employees, short of incurring an undue hardship. But what are religious accommodations? What proof may an employer request in order to establish that the employee is being sincere? The 4th Circuit recently examined a religious accommodation scenario that ended in an award of nearly $600,000 in damages and other benefits to the employee.
Most employers and business owners are generally aware of the requirements set forth by the ADA to accommodate accessibility to buildings and facilities by individuals with disabilities. These guidelines may impact the type of material used or the design of entrances, doorways and the like. However, how many business owners understand that these regulations also govern the Internet? The advancement of technology continues to make it easier for consumers to purchase goods and services without venturing outside. While websites allow companies to market to more consumers, the use of Internet services also expose employers and business owners to liability of the site isn't compliant with the ADA. The Southern District of Florida addressed this issue in Gil v. Winn-Dixie Stores, Inc.
In Justice Neil Gorsuch’s first written opinion for the Supreme Court, he handed down a major victory for the secondary debt market by ruling that debt buyers do not fall under the definition of “debt collector” for purposes of the FDCPA. Under the FDCPA, debt collectors are subject to strict requirements when attempting to collect debts and violating these rules leads to significant liability. Until now, a split among the circuits existed as to whether the term “debt collector” includes entities that purchase debt originally owned by another party. The Supreme Court therefore granted writ in Henson v. Santander Consumer USA, Inc. in order to resolve the inconsistent application across jurisdictions.