Complete Defense Digest

Transcription

DEFENSE
D i g est
A T T O R N E Y S - A T - L AW
Volume 16 • No. 4 • December 2010
OnThePulse…
A PROFILE OF OUR HARRISBURG,
PENNSYLVANIA OFFICE
OUR LIFE, HEALTH AND DISABILITY
PRACTICE GROUP
By Timothy J. McMahon, Esq.*
By Eric A. Fitzgerald, Esq.*
Timothy J. McMahon
Marshall, Dennehey has had an
office in Harrisburg for over 20 years.
The Harrisburg office has grown
consistently with the growth of the
firm and the expanding number of
clients we serve. The office moved six
years ago from a downtown location
to a more suburban location, which
permits our lawyers to more easily travel
to the ten counties in the office’s prin-
cipal service region.
The fourteen lawyers in the Harrisburg office, along
with three litigation paralegals, handle matters in the federal
and state court venues in the south central Pennsylvania
region. Our attorneys also handle matters pending before a
variety of Commonwealth boards and agencies which are
located in the Commonwealth’s capital city. Consistent with
the firm’s commitment to providing top quality legal representation within distinct practice groups, the Harrisburg
office has dedicated attorneys in the Healthcare, Professional
Liability, Workers’ Compensation and Employment, and
Casualty Departments. Indeed, each of these departments
within the Harrisburg office has at least a shareholder and an
associate or more handling cases within the discipline.
Craig Stone is a shareholder in this office who concentrates his practice in the defense of medical negligence
claims. Craig has over twenty-five years of experience in this
area and has represented hospitals and physicians in south
central Pennsylvania throughout his career. Craig is widely
recognized as an accomplished trial lawyer. He also lectures
to both the legal and medical communities on issues related
to the defense of medical negligence cases and risk management matters arising in the medical community.
Marshall, Dennehey, Warner, Coleman & Goggin’s Life, Health and Disability Practice Group is dedicated to the
representation of insurers and employers
in disputes arising out of employer-sponsored and individually issued life, health
and disability products.
Our group’s attorneys are knowledgeable
in
the complex field of ERISA litigaEric A. Fitzgerald
tion, including issues of preemption and
removal of state court actions in general, scope and standard of
review, effect of different plan wordings and, in particular, recent
developments regarding structural conflicts in plan administration, attorney fee awards and scope of the administrative record.
We are well versed and recognized in the federal courts where we
practice, and we vigorously defend our clients’ rights to federal
jurisdiction in the face of remand litigation involving preemption, fraudulent joinder and other diversity issues.
With respect to life insurance disputes, we handle named
beneficiary issues, determination of accidental death, as well
as suicide and intoxication exclusions. The firm’s cumulative
experience cooperating with local law officials and investigators
in a broad variety of civil litigation is invaluable for effective and
efficient handling of death causation issues. For disability policies, our experience with local treating physicians and experts
facilitate our defense of coverage determinations distinguishing
between “own occupation” and “any occupation” benefits and
temporary and total disability. Our group’s familiarity with the
industry and its underwriting practices allows us to economically
evaluate and counsel our clients with respect to named insured,
certificate holder and group plan holder issues.
Perhaps the strongest asset of the group is the fact that
each and every one of our attorneys is a defense litigator. Our
(continued on page 4)
* Tim is a shareholder and the managing attorney of the firm’s Harrisburg, Pennsylvania, office. He can be reached at (717) 651-3505 or tjmcmahon@mdwcg.com.
Vol. 16, No. 4
* Eric is a shareholder and works in the firm’s Philadelphia, Pennsylvania, office.
He can be contacted at (215) 575-2688 or eafitzgerald@mdwcg.com
December, 2010
Page 2
Defense Digest
IN THIS ISSUE
On The Pulse…
A Profile Of Our Harrisburg, Pennsylvania Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Our Life, Health and Disability Practice Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Message From The Executive Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
On The Pulse…
Our Litigation Achievements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Our Recent Appellate Victories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Other Notable Achievements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Firm Background and Statement of Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
About Our Publication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
FEDERAL
NEW JERSEY (cont.)
Civil Rights
Safety First: The Third Circuit
Finds Safety Concerns Trump
Claim for Religious Accommodation
in Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Long Term Care Litigation
Contracts Requiring Nursing
Home Residents to Arbitrate
Disputes with Facility Enforceable
but with Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . 19
Employment Law
Americans with Disabilities Act:
Impairments Caused Solely Due
to the Side Effects of Medications
Can Constitute a Disability . . . . . . . . . . . . . . . . . . . . 7
Workers’ Compensation
Once Is Enough! When It Comes
to Considering Evidence of the
Plaintiff ’s Intentional Injury by
the Employer and Loss of the
Workers’ Compensation Bar . . . . . . . . . . . . . . . . . . . 20
Technology & Intellectual Property
Data Breach 101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
PENNSYLVANIA
FLORIDA
Construction Litigation
Substantial Factor Test or Theory . . . . . . . . . . . . . . . 10
Amusements, Sports & Entertainment
No Uphill Battle in Defense
to Downhill Skiing Liability . . . . . . . . . . . . . . . . . . . 22
Health Care Liability
Psychiatric Records Can Be Subject
to Discovery in Pennsylvania . . . . . . . . . . . . . . . . . . 23
NEW JERSEY
Attorney Ethics
Disqualification of Counsel and
the Substantially Related Matters Test. . . . . . . . . . . . 11
Vol. 16, No. 4
December, 2010
Defense Digest
Page 3
MESSAGE
from the
EXECUTIVE
COMMITTEE
By Philip B. Toran, Esq.
As many of you know, over
It is hard to believe that we
Chairman of the
the past few years, the firm was
are preparing for the winter holExecutive Committee
pleased to announce the creation
iday season. It seems just a short
of various new practice group distime ago we were experiencing
ciplines. Specifically, the firm is
an almost unprecedented hot
now actively defending aviation,
summer, and here we are preparing for winter. As such, I thought it appropriate to relay marine and technology/privacy matters. We also added a
Health Law Practice Group. Consistent with our defense
what has been occurring at the firm over the fall season.
Shortly after Labor Day, we were pleased to announce approach, the firm was pleased to announce October 1, 2010,
a new class of associates. The firm hired fourteen new attor- the creation of its White Collar Criminal Defense Practice
neys. These attorneys are located in several offices and Group. Initially, this group will be manned by Jack Gruenacross various practice groups. Specifically, we welcomed stein, a 30-year veteran white collar defense lawyer. Jack Gruenstein joined the firm as special counsel. In this capacity, he
the following individuals:
●
Wendy O’Connor (Bethlehem, PA) – Healthcare will lead the firm’s white collar defense practice, as well as assist
our healthcare, privacy and professional liability clients in govDepartment
●
Michael Daly (Cherry Hill, NJ) – Healthcare ernment audits, investigations and prosecutions. Additionally,
he will also conduct internal investigations for our clients. As
Department
a trial lawyer, Jack has handled more than 50 criminal and civ●
Jason Walker (Cherry Hill, NJ) – Casualty Department
il jury trials and a substantial number of non-jury cases. He has
●
Bradley Somrack (Erie, PA) – Workers’ Compen- represented many corporate employees and officers and physisation Department
cians in both state and federal courts.
●
Alan Muraidekh (New York, NY)– Casualty Department
Additionally, Kevin Hexstall will also be working in this
●
Adam Crystal (New York, NY) – Casualty Department area and defending civil matters. Kevin also has substantial tri●
Shane Haselbarth (Philadelphia, PA) – Casualty al experience. The decision to enter into this new area of law
Department
was based upon requests from many clients. As always, I want
●
Christine Becer (Philadelphia, PA) – Healthcare to thank you for your ongoing support and entrusting the firm
Department
in this new area of practice.
●
Hannah Hubler (Philadelphia, PA) – Casualty Department
To better serve all of our clients, commencing in the first
●
Lauren Moser (Philadelphia, PA) – Professional Lia- quarter of 2011, the firm will be installing a new billing and
bility Department
accounting system. We are excited about this upgrade. Addi●
Nicolai Schurko (Philadelphia, PA) – Professional tionally, the firm has upgraded its software programs in order
Liability Department
to be more efficient in our practice group areas.
●
Michaelene Weimer (Pittsburgh, PA) – Casualty
One of the most difficult decisions, as a firm, is whether
Department
to relocate. The firm’s Philadelphia office lease will be expir●
Josie Scanlan (Roseland, NJ) – Healthcare Department ing in the not too distant future, and we have spent close to
●
Douglas Saltarelli (Tampa, FL) – Professional Lia- one year analyzing the pros and cons of extending our current
lease or relocating. This will be announced in the near future.
bility Department (Special Counsel)
●
Samuel Pratcher (Wilmington, DE) – Casualty
We are currently preparing for our year-end, which
Department
will include the naming of new shareholders. Much of our
●
Matthew Valocchi (Wilmington, DE) – Casualty decision making process in elevating associates to possible
Department
Vol. 16, No. 4
December, 2010
Page 4
Defense Digest
A PROFILE OF OUR HARRISBURG, PENNSYLVANIA OFFICE
(continued from page 1)
Matthew Owens is a shareholder whose practice involves
a substantial focus on the defense of civil rights, municipal liability and public officials’ errors and omissions matters. Matt
has tried many civil rights cases to verdict, principally in the
United States District Court for the Middle District of Pennsylvania. He is active in a variety of defense groups and particularly the Defense Research Institute as it pertains to the
defense of civil rights and municipal liability matters.
Sharon O’Donnell is a shareholder in the office who handles a variety of professional liability matters with an emphasis
on the defense of employment cases, as well as the defense of
alleged malpractice matters brought against attorneys, accountants, brokers and other professionals. Sharon has substantial
trial experience in the federal and state court systems and handles matters before the EEOC and PHRC as well. In addition,
Sharon routinely provides counsel to a variety of clients with
needs in the employment law concentration, including the
larger school districts in south central Pennsylvania.
Kacey Wiedt is a shareholder who focuses his defense
efforts exclusively on workers’ compensation matters. Kacey is
an active member of the workers’ compensation defense bar
and the Harrisburg Claims Association. He is often invited to
provide advice, seminars and tutorials to employers in south
central Pennsylvania as part of an ongoing effort to more effectively defend workers’ compensation claims. Each of the three
attorneys in the Worker’s Compensation Department – Kacey
Wiedt, Shannon Fellin and John Swartz – have more than ten
years experience exclusively in this area.
Timothy McMahon is a shareholder and the managing
attorney of the Harrisburg office. Tim joined the firm in 1987.
He handles a variety of complex casualty matters ranging from
products and liquor liability, to trucking and transportation
cases. In addition, he handles and has tried professional liability
cases representing physicians, hospitals, attorneys, accountants
and others. Tim is an AV rated lawyer by Martindale-Hubbell
who has also been named a Pennsylvania Super Lawyer in
2005 and 2006. He is an active member of the Pennsylvania
Bar Association’s Professional Liability Committee and regularly
participates in the presentation of the malpractice avoidance
seminars that the Committee provides to the various sixty-seven counties in Pennsylvania.
Christopher Reeser is a shareholder in our Casualty
Department who concentrates his practice exclusively on the
defense of casualty matters ranging from products liability,
premises liability and motor vehicle litigation. Chris has tried
cases in both federal and state jurisdictions, as well as arbitrations and mediations.
Marshall, Dennehey’s Harrisburg office, with its central
location and staff of experienced and dedicated attorneys, shareholders and associates alike, has long prided itself on providing
cost-effective, high-quality legal representation to the firm’s
clients in south central Pennsylvania. Inquiries concerning the
services offered by the firm through the Harrisburg office should
be directed to Timothy J. McMahon via e-mail at tjmcmahon
@mdwcg.com or by telephone at (717) 651-3505. ★
OUR LIFE, HEALTH AND DISABILITY PRACTICE GROUP
attorneys bring all the trial skills and efficiencies of a civil defense
litigation firm to our handling of ERISA and privately issued life
and health products. This experience is critically important to our
clients when they are faced with complex discovery issues, such as
demands for documents and procedures outside the administrative
record, and in defending attorney fee award claims.
Similarly, our firm’s broad geographical coverage is an asset.
Our nineteen offices are strategically spread throughout all of Pennsylvania, New Jersey, Delaware and Florida and portions of Ohio
and New York. Where plaintiff’s attorneys commence litigation in
rural or little known venues for “hometown” benefit, our attorneys
are intimately familiar with the local judiciary, experts and court
rules to even out the playing field for our clients. Not surprisingly,
this combination of local, practical experience with our familiarity
with the technical rules and strategies underlying ERISA and state
court litigation is a valuable asset for the firm and our clients.
The group also coordinates with the firm’s Coverage and
Extra-Contractual Exposure Practice Group for its handling of
complex insurance disputes. The Coverage Group represents the
Vol. 16, No. 4
industry, both with respect to the handling of these claims and in
the errors and omissions market for claims against program
providers alleging mishandling of claims. The group also draws
from the experience of the firm’s Securities and Investments Professional Liability Practice Group with respect to the defense of
brokers and agents in errors and omissions claims.
The Life, Health and Disability Practice Group’s chair, Eric
Fitzgerald, Esquire, devotes his practice exclusively to the representation of insurers and self-insureds with respect to insurance
coverage disputes. Eric is a former National Governor in the Chartered Property Casualty Underwriters (“CPCU”) Society. He is
active in the Defense Research Institute’s Life, Health and Disability Section, where he was recently published in its journal The
ERISA Report. Eric is also matriculated with the American College
where he is closing in on earning his Chartered Life Underwriter
(“CLU”) designation. Please feel free to contact Eric with any questions or if you would like a presentation on cutting-edge developments in the life, health and disability field for your claims staff. ★
December, 2010
Defense Digest
Page 5
Federal – Civil Rights
SAFETY FIRST: THE THIRD CIRCUIT FINDS SAFETY
CONCERNS TRUMP CLAIM FOR RELIGIOUS
ACCOMMODATION IN EMPLOYMENT
By Walter Kawalec, III, Esq.*
KEY POINTS:
●
●
●
In accommodation matters in religious discrimination cases under Title VII, the court is reluctant
to credit an offer of accommodation by the employer where it would require the court to make a
theological evaluation of the accommodation offered.
A claim for religious discrimination under Title VII can be defeated where the proposed accommodation would present an undue hardship on the employer, which merely requires a showing of something greater than a de minimis cost.
Where an undue hardship defense is offered, it is important to support the claim with sufficient factual
evidence and testimony from knowlegable agents in order to substantiate the claims of hardship.
In EEOC v. The GEO Group, the
Third Circuit Court of Appeals
addressed the question of whether female
Muslim employees of a private prison
who wish to wear the khimar, a Muslim
head scarf, are entitled to a religious
accommodation in the form of a exemption from a policy restricting employees
from wearing headgear. In a 2-1 decision,
Walter Kawalec, III
the court held that, on the facts of the
case, the defendant established that it would be a substantial
hardship in granting the exemption and, as such, the plaintiffs’
Title VII claim was properly dismissed.
The claim arose from the 2005 institution of a dress code
policy at the prison in which hats, scarves and headgear of any
kind not issued by prison management were banned. The plaintiffs, who worked in various capacities in the prison, sought an
exemption based on religion in order to wear the khimar. After
they were told that no such exemption would be made, they
commenced the action with the Equal Employment Opportunity Commission as plaintiff.
The defendant implemented the dress restriction in order
to promote safety at the prison and to promote uniform appearance. The safety consideration was three-fold. First, the wardens
of the prison were concerned with smuggling of contraband,
such as hiding small quantities of drugs or other forbidden items
in the head covering. Second, specifically applicable to khimars,
the wardens sought to eliminate a potential choking hazard.
A person wearing a scarf or khimar around the neck could
* Walt is a shareholder in our Cherry Hill, New Jersey, office and is the editor-in-chief
of Defense Digest. He can be reached at (856) 414-6024 or wfkawalec@mdwcg.com.
Vol. 16, No. 4
potentially have that item used in an attack by an inmate. Finally,
it could be used to hide the identity of the wearer.
The prison moved for summary judgment, which the
EEOC opposed by arguing that the professed reasons for the
policy lacked merit and substance; that the prison made no reasonable attempt to accommodate the wearing of the khimar;
and that there was no legitimate reason to ban the khimar. The
EEOC’s position was supported by the testimony of its expert,
whereas the prison’s position was supported by the extensive testimony of the Warden and Associate Warden.
The trial court granted summary judgment, in large part
applying the Third Circuit Court of Appeal’s decision in Webb
v. City of Philadelphia. In Webb, the court had found that a dress
code with the Philadelphia Police Department which banned
the wearing of religious symbols or garb, and which had the
effect of preventing Muslim female officers from wearing khimars,
was not a violation of Title VII.
The majority opinion in the Court of Appeals began by
noting that there was no question that the plaintiff could
establish a prima facie case under Title VII for religious discrimination. Rather, the question in the case was whether the
defendant either provided a reasonable accommodation by
permitting the women to wear wigs, rather than khimars, and
whether the prison could provide any other reasonable accommodation without undue hardship.
On the first issue, the court refused to find that a wig
would constitute a reasonable accommodation as the court
declined to investigate theological matters and the record did
not contain information from the women suggesting that this
accommodation would be compliant with their religious
obligations as they saw them.
December, 2010
Page 6
Defense Digest
MESSAGE FROM THE EXECUTIVE COMMITTEE
shareholdership is based upon the feedback from our clients.
We appreciate your ongoing dialogue concerning our professional staff and thank you for your time in advising firm
management about these young men’s and women’s accomplishments.
Although the past two years, by any account and for all
businesses, has been economically challenging to say the
least, we feel blessed to be able to move forward with those
items referenced above. The mark of any ongoing business
concern is the ability to continue to invest in itself. Because
of our clients’ overwhelming support, we have been able to
take these steps to better serve the needs of our clients.
With that said, on behalf of everyone at Marshall,
Dennehey, Warner, Coleman & Goggin, let me be one of
the first to wish you a happy and healthy holiday season.
As always, and again from all of us here at the firm, thank
you for your ongoing support. We never take it for granted. ★
SAFETY FIRST: THE THIRD CIRCUIT
On the second issue, the prison offered significant testimonial evidence from the wardens substantiating the
claims regarding the concerns which led to the implementation of the policy and supporting the notion that permitting the women to wear the khimar in light of those
concerns would constitute an undue burden. The court
correctly characterized “undue hardship” as being anything more than a de minimis cost to the employer. The
court also noted that non-economic as well as economic
costs can pose the undue hardship, that the “undue hardship” test was not a difficult threshold to pass and that
safety or security risks certainly could constitute such an
“undue hardship.”
The court found that the no headgear policy must
stand or fall on the testimony of the wardens that khimars
(1) could be used to smuggle contraband, (2) could be
used to conceal the identity of the wearer causing misidentification problems and (3) could be used as a weapon.
After analyzing these points, the matter was described
as a “close call,” as the majority noted:
The arguments presented by the parties make this
a close case. The EEOC has an enviable history of
taking steps to enforce the prohibition against
religious discrimination in many forms and its
sincerity in support of its arguments against the
application of the no headgear policy to Muslim
Vol. 16, No. 4
employees wearing khimars is evident. On the
other hand, the prison has an overriding responsibility to ensure the safety of its prisoners, its
staff, and the visitors. A prison is not a summer
camp and prison officials have the unenviable
task of preserving order in difficult circumstances.
Based on the court’s evaluation of the testimony of the
wardens, the majority found that the prison established the
undue hardship based on the security issues that could be
presented by the khimar and the fact that the prison had the
right to protect against those issues.
EEOC v. GEO Group demonstrates the importance in
Title VII “undue hardship” cases of ensuring that sufficient
and detailed testimony is obtained to detail the reasons for
the limitations and to set out the costs to the employer. This
should be done as broadly as the facts will permit as it is
often the case that, when some of the reasons are credited
by the courts, some may not be and the courts are given
multiple rationales for the decision. It should be understood
that while the “undue hardship”/de minimis is not difficult
to meet, it does require substantiation and something more
than theoretical costs. Further, full and complete testimony
presents the court with a level of detail which reinforces the
legitimacy of the proffered reasons and makes the finding of
undue hardship more likely. ★
December, 2010
Defense Digest
Page 7
Federal—Employment Law
AMERICANS WITH DISABILITIES ACT: IMPAIRMENTS CAUSED
SOLELY DUE TO THE SIDE EFFECTS OF MEDICATIONS
CAN CONSTITUTE A DISABILITY
By Anthony F. Andrisano, Esq.*
KEY POINTS:
●
●
●
The side effect of medical treatment may in and of itself constitute an impairment under the ADA.
To constitute an impairment under the ADA, the medication or course of treatment must be
required in the “prudent judgment of the medical profession,” and there must not be an available
alternative that is equally efficacious that lacks similarly disabling side effects.
The ADA Amendments Act does not affect the court’s holding in Sulima.
The weight-loss medication caused Mr. Sulima to develop a
In Sulima v. Tobyhanna Army Depot, et
al., 602 F.3d 177 (3rd Cir. 2010), the United gastrointestinal disorder necessitating Mr. Sulima to take long and
States Court of Appeals for the Third Cir- frequent bathroom breaks. A Tobyhanna supervisor observed Mr.
cuit considered whether the meaning of Sulima taking several extended bathroom breaks. After approaching
“disability” under the Americans with Dis- Mr. Sulima about the frequent breaks, Mr. Sulima informed the
abilities Act can encompass an impairment supervisor that the bathroom breaks were a result of the medication he was taking. Mr. Sulima
resulting
further informed the supervisor
solely
that he would be “going back to
f ro m
Anthony F. Andrisano
[his] doctor to see if he can give
the side
[him] different medication.”
effects
of medication; whether or not
Mr. Sulima continued to
the underlying health problems
take the frequent extended
requiring the medication are
bathroom breaks, and, as a
…that our commitment to leadership
disabling.
result, the Tobyhanna super-
?
The plaintiff, Ed Sulima,
was employed by defense contractor Defense Support Services, LLC (“DSS”), and in
January of 2005, Mr. Sulima
was assigned to work as an
Electronics Technician for
Tobyhanna Army Depot
(“Tobyhanna”). In August of
2005, Mr. Sulima, who is
morbidly obese, was diagnosed
with sleep apnea. Although
surgical options were discussed, Mr. Sulima’s treating
physician recommended that
he lose weight to reduce the
effects of the sleep apnea. To
help facilitate the weight loss,
Mr. Sulima was prescribed
weight-loss medication.
Did you know...
and client service has been recognized
by the Delaware Valley Total Quality
Consortium, along with such companies
as Ametek, Boeing, Independence
Blue Cross, Lockheed Martin, and
Subaru of America, Inc.?
visor asked DSS to transfer
Mr. Sulima to a different
work area. When Mr. Sulima
was made aware of the transfer request, he spoke with
his treating physician and
brought DSS a note indicating
that Mr. Sulima’s medication
had been changed and he was
now able to work without
needing frequent bathroom
breaks. DSS, however, still
decided to transfer Mr. Sulima, but since there was no
other work available at that
www.marshalldennehey.com
time, Mr. Sulima was forced
to accept a voluntary layoff.
Although Mr. Sulima was
eligible for rehire, he was not
contacted again by DSS, and he did not inquire about similarly
advertised positions that later became available.
* Anthony is an associate in the firm’s Harrisburg, Pennsylvania, office who can
be reached at (717) 651-3517 or at afandrisano@mdwcg.com.
Vol. 16, No. 4
December, 2010
Page 8
Defense Digest
Federal—Technology & Intellectual Property
DATA BREACH 101
By Eric A. Packel, Esq. and Nicolai A. Schurko, Esq.*
KEY POINTS:
●
●
●
11.1 million adults were victims of identity theft in 2009, suffering a combined $54 billion in total
fraud, leading to potential claims against the entities that exposed the individuals to identity theft.
Data breaches can lead to a variety of costly consequences for an affected entity and/or its insurance carrier,
including enforcement actions by government regulators and class action litigation.
Data breaches can also trigger costly mandatory investigations, credit monitoring costs and/or public
relations costs. According to a recent study, the total average cost of handling a data security incident
in the United States in 2009 was $6.75 million ($204 per record), comprised of notification costs, lost
business and fines/penalties.
Eric A. Packel
The risk of unauthorized access to
personal identifying information (“PII”)
and personal health information (“PHI”)
poses a genuine threat to every business and
every person. According to a recent study
published by Javelin Research, 11.1 million
adults were victims of identity theft in
2009, suffering a combined $54 billion in
total fraud (up 12.5 percent from 2008).
Those same people, in turn, could have
claims against the companies who maintained their PII or PHI and exposed
them to the identity theft.
WHAT IS A “DATA BREACH”?
A data breach is generally considered
to be the release or exposure of PII maintained in electronic format to an unauthorized individual. A data breach can
Nicolai A. Schurko
result from a hacking incident, lost or
stolen laptops and hard drives, as well as the improper disposal
of computer equipment. PII is usually considered to be names
in combination with social security numbers, drivers’ license
numbers or financial account numbers. All but a handful of
states now have data breach notification laws meant to protect
consumers from these incidents. Although the specific requirements of state laws vary widely, most states define a breach as
any unauthorized acquisition of PII regardless of whether the
security or confidentiality of such information has been materially compromised. To complicate matters, there are regulations
and federal laws that conflict with state laws that need to be reconciled when developing a data breach response plan.
* Eric is an associate in our Philadelphia, Pennsylvania, office who can be reached
at (215) 575-4554 or eapackel@mdwcg.com. Nicolai is a graduate attorney in
our Philadelphia, Pennsylvania, office. He can be reached at (215) 575-2701 or
naschurko@mdwcg.com.
Vol. 16, No. 4
WHAT IS REQUIRED WHEN A DATA BREACH
STATUTE IS TRIGGERED?
If a breach of PII or PHI occurs, the parties to be notified
under a typical state statute may include the individuals whose
information has been compromised, the state Attorneys General, credit reporting agencies, law enforcement and/or any
applicable government agencies. The parties subject to required
notification will differ depending on factors such as the number of individuals within a state whose information has been
compromised. However, the affected individual, typically, must
always be notified.
The time frame in which notice must be provided varies by
state, regulation and federal law as well. Most states require notice
to the affected individuals “without unreasonable delay.” However, some states impose specific timelines. This means the clock is
running and an investigation and notification must be completed relatively quickly.
FEDERAL REGULATIONS
In addition to the state laws regarding data breach notification, the federal Health Information Technology for Economic
and Clinical Health Act (“HITECH”) provides breach notification requirements for certain disclosures of PHI. PHI may
include diagnostic and treatment information associated with an
individual, and a “breach” is an unauthorized acquisition, access,
use or disclosure of PHI that poses a significant risk of financial,
reputational or other harm to the individual.
Unlike state data breach laws, which attach to residents of
that state and typically apply to any entity, HITECH applies to
only certain entities regulated by the Department of Health and
Human Services (“HHS”), such as hospitals, pharmacies and
physicians. Patients affected by a HITECH breach must be notified with 60 days. The HSS Office of Civil Rights (“OCR”) and
the press may also need to be notified.
December, 2010
Defense Digest
Page 9
AMERICANS WITH DISABILITIES ACT:
Mr. Sulima filed a lawsuit against both DSS and Tobyhanna under the Americans with Disabilities Act (“ADA”)
and the Rehabilitation Act (“RA”), arguing that he was
forced to accept a layoff due to a disability or a perceived disability. The District Court dismissed the lawsuit, finding that
Mr. Sulima had “not produced sufficient evidence to succeed
in the litigation.” Mr. Sulima appealed the dismissal to the
Third Circuit.
Relying primarily on Christian, the Third Circuit held
that the side effects of medical treatment may in and of itself
constitute an impairment under the ADA. This category of
disability, however, is subject to limitation—the medication
or course of treatment must be required in the “prudent
judgment of the medical profession,” and there must not be
an available alternative that is equally efficacious that lacks
similarly disabling side effects.
The Third Circuit initially agreed with the District
Court’s determination that Mr. Sulima was not arguing that
the gastrointestinal problems were caused by anything other
than the medications he was taking and, as a result, Mr. Sulima was solely claiming to be disabled due to the side effects
from his prescribed medications. In other words, even though
Mr. Sulima had underlying medical issues, his claimed impairment under the ADA and RA was solely based upon a disorder resulting from medication, not from the underlying health
problem the medication was meant to treat.
Applying this holding, the Third Circuit held that Mr.
Sulima could not establish that the weight-loss medication
was required in the “prudent judgment of the medical profession,” as Mr. Sulima’s treating physician specifically testified at his deposition that, if Mr. Sulima would have made
him aware of the extent of the side effects, he would have
simply informed Mr. Sulima to stop taking the medication.
Moreover, there was no evidence in the record to show that
the medications causing the side effects were, in the judgment of the medical profession, the only efficacious medications available to Mr. Sulima. Accordingly, Mr. Sulima could
not establish that the side effects of the weight-loss medication were an impairment within the meaning of the ADA.
While this issue was a matter of first impression for the
Third Circuit, several other Circuits had already addressed
the issue. In Christian v. St. Anthony Med. Ctr., 117 F.3v
1051 (7th Cir. 1997), the Seventh Circuit held that the treatment of a condition that is not itself disabling may be a disability within the meaning of the ADA. The Eight Circuit, in
Hill v. Kan. City Area Transp. Auth., 181 F.3d 891 (8th Cir.
1999), similarly acknowledged that the side effects from
medications could constitute a physical impairment. Finally,
in Gordon v. E.L. Hamm & Assocs., 100 F.3d 907 (11th Cir.
1996), the Eleventh Circuit did not reject the notion that a
plaintiff could claim an impairment resulting from the side
effects of chemotherapy treatment in response to cancer
which was not itself disabling.
Although the facts involved in this matter pre-date the
ADA Amendments Act of 2008 (“ADAAA”), the Third Circuit Court explicitly noted that the ADAAA does not address
the situation in which a plaintiff is claiming a disability as a
result of the side effects of medical treatment for an impairment that does not itself constitute a disability. Accordingly,
even with the passage of the ADAAA, an employer must still
abide by the court’s holding in Sulima when one of its
employees claims to be disabled solely as a result of the side
effects from medication. ★
DATA BREACH 101
ENFORCEMENT AND RELATED COSTS – I.E. WHY
SHOULD INSURANCE CARRIERS BE CONCERNED?
Data breaches can lead to a variety of costly consequences
for an affected entity and/or its insurance carrier. Most state data
breach statutes provide for enforcement actions brought exclusively by the state Attorney General. A minority of states also
provide for private rights of action. There is no private right of
action under HITECH; however, state Attorneys General may
file cases in federal district court to enjoin violations or obtain
damages on behalf of individuals.
Another concern is the threat of class action litigation. For
example, in March 2008, the Hannaford Bros. supermarket
Vol. 16, No. 4
chain disclosed that it suffered a breach which resulted in
the theft of credit/debit card holder data of approximately
4.2 million individuals. This breach led to extensive and
costly class action litigation. However, in a ruling issued on
September 21, 2010, the Maine Supreme Court held that
consumers affected by a data breach cannot claim damages
unless they suffer uncompensated financial losses or some
other tangible injury. In other words, the plaintiffs could
not sue Hannaford merely for the time and effort put into
avoiding or mitigating harm from fraudulent charges on
their cards.
December, 2010
Page 10
Defense Digest
Florida—Construction Litigation
SUBSTANTIAL FACTOR TEST OR THEORY
By Geoffrey R. Lutz, Esq.*
KEY POINTS:
●
●
●
Although a long standing theory in personal injury accidents in Florida, the Substantial Factor
Theory has only recently been attempted in construction defect claims.
There are few cases that consider the Substantial Factor Theory as it would apply to construction
defect claims; therefore, there is little guidance under Florida law.
However, even if the Substantial Factor Theory can be applied to construction defect claims, it should
not substantially impact the defense of construction defect claims.
A theory has been put forth by the
plaintiffs in several construction defect
cases that they do not need to attribute
fault to the various contractors, subcontractors and other parties under the Substantial Factor Theory. Plaintiffs argue that
all they need to establish is that each party
was a substantial factor in the damages.
Under Florida law, if two or more
Geoffrey R. Lutz
tortfeasors are found to be a “substantial
factor” in an injury or harm to a plaintiff, then each of those
parties may be found one hundred percent liable to the plaintiff
for the harm in which they were a substantial factor. See Gross v.
Lions, 763 So.2d 276 (Fla. 2000). This theory, or test, appears
to be applied to both cases concerning contractual damages as
well as tort damages. See also Cedar Hills Property Corp. v. Eastern Federal Corp., 575 So.2d 673 (Fla. 1st DCA 1991). This
theory is best explained in an auto accident or medical injury
case. The primary example as seen in case law is when two or
more tortfeasors cause damage in auto accident type case. If the
plaintiff was injured in the initial accident and then re-injured
or had a subsequent injury in a subsequent accident, at times it
would be impossible for a jury to determine from which accident the damages arose. Therefore, Florida’s courts have adopted this substantial factor test in order to determine responsibility for damages. In fact, the Supreme Court in Gross re-labeled
the test the indivisible injury rule.
And in at least one Florida case this test or theory was
applied to a construction defect claim. In Centex-Rooney Construction Co., Inc. v. Martin County, Florida, 706 So.2d 20 (Fla.
4th DCA 1997), the Fourth District Court of Appeals determined that the general contractor could be found one hundred
percent at fault for a “sick building” even though there were several other contributing factors to the plaintiff ’s damages. However, this case and most of the other cases concerning this substantial factor test do not explain exactly what is required to be
a substantial factor or how this test should be applied. In fact,
the Centex case could be seen as distinguishable from many of
our actions. Centex was a general contractor for the construction project. It is obvious that the general contractor could be
found to be a substantial factor in defects in a building. However, the case did not go into any detail as to whether or not the
subcontractors who worked on various portions of the building
could be determined to be a substantial factor. I did not discover any case in which a subcontractor was found to be a substantial factor in the overall failure of a construction project. However, there does not appear to be many cases that actually
address this issue; therefore, there was no guidance either way.
The substantial factor test, or theory, appears to be applied
when a jury cannot apportion fault or injury amongst various
joint tortfeasors. This theory has been established in Florida for
a number of years, but it does not appear to have been applied
to construction defect claims until very recently. This might be
due to the fact that, typically, construction defect claims experts
are retained in order to determine an apportion of fault amongst
tortfeasors and the various parties in litigation. Therefore, there
is very little guidance in Florida law as to construction cases and
the Substantial Factor Theory.
CONCLUSION
The substantial factor test or theory has been established in
Florida since at least 1980. See Turtle Fest White Constructors, Inc.
v. Montgomery Elevator Co., 385 So.2d 98 (Fla. 5th DCA 1980).
However, the law of Florida has changed numerous times as to
joint and several liability and comparative fault since that time.
The Gross v. Lions, 763 So.2d 276 (Fla. 2000) case established in
2000 that the Supreme Court found the comparative fault and
substantial factor theories were not mutually exclusive. However, I question that ruling as it would apply to a construction
defect claim. The example cited in that court is that, if the tortfeasor in the primary auto accident is a substantial factor in the
secondary auto accident and the injury thereof, he could be
found one hundred percent liable for the plaintiff ’s damages.
* Geoffrey, an associate in our Jacksonville, Florida, office, can be reached at
(904) 358-4211 or grlutz@mdwcg.com.
Vol. 16, No. 4
December, 2010
Defense Digest
Page 11
New Jersey—Attorney Ethics
DISQUALIFICATION OF COUNSEL AND THE SUBSTANTIALLY
RELATED MATTERS TEST
By Arthur F. Wheeler, Esq.*
KEY POINTS:
●
●
●
Under New Jersey Rule of Professional Conduct 1.9(a) a lawyer who has represented a client in a
matter shall not thereafter represent another client in the same or substantially related matter in
which that client’s interests are materially adverse to the interests of the former client unless the
former client gives informed consent confirmed in writing.
The New Jersey Supreme Court has held that for purposes of RPC 1.9, matters are substantially
related “if (1) the lawyer for whom disqualification is sought received confidential information from
a former client that can be used against a client in a subsequent representation of parties adverse to
the former client; or (2) facts relevant to the prior representation are relevant and material to the subsequent representation.”
The evaluation as to whether the matters are the “same or substantially related” must be based in
fact. The Court has rejected the appearance of impropriety as a factor to be considered in determining whether a prohibited conflict of interest exists under RPC 1.9.
The New Jersey Supreme Court’s
opinion in City of Atlantic City v. Trupos,
201 N.J. 447, 992 A.2d 762 (2010), is
the Court’s first opinion addressing the
question of what may constitute “substantially related matters” that can cause
disqualification of counsel from handling a matter since the 2004 revisions
of the Rules of Professional Conduct, at
Arthur F. Wheeler
which time the Court eliminated the
“appearance of impropriety” language.
In Trupos, an Atlantic City law firm handled a number of
real estate tax appeals for the City of Atlantic City in 2006 and
2007. The law firm also served as a non-voting consultant to a
City committee responsible for implementing a court order for
the re-evaluation of real estate tax assessments. The law firm
ended its representation of the City of Atlantic City in most
matters by March of 2008. The firm was then retained to
represent several hundred taxpayers challenging their 2009
assessments. The City attempted to disqualify the law firm.
The City was successful in its arguments to the Tax Court,
which ruled that the firm would not be permitted to represent
the Atlantic City taxpayers in their 2009 appeals. The Tax
Court found that the current and former matters were “substantially related” so that the law firm would be disqualified
from representation of the taxpayers under RPC 1.9. City of
Atlantic City v. Trupos, 25 N.J. Tax 108 (2009).
While the law firm settled only one case during its period
of representation of the City, the Tax Court assumed that the
firm must have had the opportunity to discuss settlement litigation strategy with the Mayor, the City Council and the Tax
Assessor and that this knowledge gave the law firm insight into
the thought processes of its 2008 and 2009 assessments. The
Tax Court concluded that the law firm must be disqualified
because of the great likelihood that the firm was knowledgeable of relevant confidences of the City’s Assessor, the Mayor
and Council which could be used against the City.
The Supreme Court stated that for purposes of RPC 1.9,
matters are substantially related “if (1) the lawyer for whom
disqualification is sought received confidential information
from a former client that can be used against a client in a subsequent representation of parties adverse to the former client;
or (2) facts relevant to the prior representation are relevant and
material to the subsequent representation.” The Supreme
Court found that the law firm did not receive confidential
information from the City which can be used against the City
in the prosecution of the 2009 tax appeals. Thus, the Supreme
Court found that the disqualification was unwarranted.
The Court emphasized that the evaluation as to whether
the matters are the “same or substantially related” must be based
in fact, noting that the Court has rejected the appearance of
impropriety as a factor to be considered in determining whether
a prohibited conflict of interest exists under RPC 1.9.
* Art is an associate in our Cherry Hill, New Jersey, office who can be reached at
(856) 414-6316 or afwheeler@mdwcg.com.
Vol. 16, No. 4
December, 2010
Page 12
Defense Digest
OnThePulse…
IMPORTANT & INTERESTING LITIGATION ACHIEVEMENTS*...
We Are Proud Of Our Attorneys For Their Recent Victories
CASUALTY DEPARTMENT
Samuel Casolari (Akron, OH) obtained a summary judgment on
behalf of our roller skating rink client. The plaintiff claimed he
was skating in the carpeted locker area when his skate became
caught on a portion of the floor where the carpet had peeled away.
He fell and broke his ankle. When asked in a deposition if the rink
had been aware of the defect, the plaintiff answered, “If they wasn’t, they was blind.” Sam moved for summary judgment on the
grounds that the alleged condition was an open and obvious hazard and a property owner has no duty to warn of such a condition.
The trial court granted summary judgment, and the Court of
Appeals affirmed. This is one of only a few reported decisions
dealing with the carpeted area off the skate floor in a roller rink.
It was also a strategic way to deal with an otherwise poor liability
case involving an admitted defect.
John Cofresi (New York, NY) obtained summary judgment dismissing the complaint in a motor vehicle accident on the
grounds that the plaintiff failed to sustain a serious injury within
the definition of New York’s Insurance Law. The case was venued
in the Supreme Court, Nassau County. It involved a three-car
accident in which the insured/client was alleged to have started
the chain collision. All parties moved for summary judgment
against our client on the grounds that it was a hit-in-the-rear collision. John opposed the motion for summary judgment on the
grounds that there were issues of fact as to the sequence of the
collisions that precluded summary judgment on liability. The
court agreed and denied the plaintiff ’s and the co-defendants’
summary judgment motions. Thereafter, John moved for summary judgment dismissing the case on the grounds that the
plaintiff failed to sustain a serious injury within the definition of
New York’s Insurance Law. Plaintiff ’s counsel argued that there
were issues of fact concerning the extent of his client’s injuries
because she needed future knee replacement surgery. John argued
that the plaintiff ’s three prior motor vehicle accidents and two
prior right knee surgeries interrupted the chain of causation
under Pommels v. Perez and the case should be dismissed. The
court agreed with John’s arguments and dismissed the complaint
on the grounds that the plaintiff failed to sustain a serious injury.
Laurianne Falcone (Philadelphia, PA) obtained a defense verdict
at trial in the Philadelphia Court of Common Pleas. The plaintiff
was 11 years old when she was struck in the back by a firework on
July 4th while watching skateboarders at FDR Park in South
Philadelphia. Two eyewitnesses identified our client as the perpetrator, and he was arrested and tried. Our client was acquitted of
all criminal charges in a bench trial, so the plaintiff’s family filed
this civil suit. The two eyewitnesses testified at trial, but their testimony was inconsistent. It was revealed that they had a verbal
altercation with our client after the incident, which was caught on
a YouTube video. We were precluded from presenting any evidence regarding the acquittal, and the jury was not allowed to hear
any details of it. The plaintiff is physically recovered, but she has
permanent scarring on her lower back as a result. Ten out of
twelve jurors found in our client’s favor.
Michele Krengel (King of Prussia, PA) won in a Berks County
matter involving an intersectional collision where both drivers
claimed to have had a green light. The interesting aspect of the
case is that the roadway where the accident occurred had camera
surveillance. While the cameras did not capture the actual event,
they did show real time sequencing of the traffic lights at the intersection as the vehicles approached. Using her client’s description
of the event and supportive expert testimony, Michele was able to
provide scientific evidence supporting her client’s position.
Diane Magram (Cherry Hill, NJ) obtained a defense verdict in a
four-day trial in Cape May County before Judge Daryl Todd. The
plaintiff claimed permanent injuries in the form of herniations in
the neck and back as a result of the subject motor vehicle accident.
The jury deliberated for nearly six hours before deciding that the
plaintiff did not sustain permanent injures as a result of the accident. The vote was 6:1. The arbitration award was $62,500.
Thomas O’Malley and Matthew Stone (Philadelphia, PA)
obtained summary judgment in a premises liability matter in
Philadelphia County Court of Common Pleas. The plaintiff, a
Texas resident, has a very unique occupation. He is the equivalent of an industrial “Spiderman” and one of the few individuals
in the United States who is certified to climb oil rigs to check for
cracks, fissures, etc. While at a Philadelphia-area hotel, he fell in
the parking lot on ice. Our insured was responsible for snow
removal and was sued along with the hotel, the owner of the
property. The plaintiff sustained a very severely fractured ankle,
which required five surgeries at the University of Pennsylvania
Hospital and in Texas. The demand was $2.5 million. The plaintiff and the hotel defendant obtained liability experts opining
that our client, the landscaping company, contributed to the
accident by failing to salt the parking lot. We were able to show
that we had no duty to salt, inspect or provide ice removal or
preventive services on the parking lot.
Douglas Suplee (Cherry Hill, NJ) obtained a defense verdict
on behalf of a national automobile manufacturer following a
three-day jury trial before Judge Eugene McCaffrey of the Superior Court of New Jersey, Gloucester County. It was “lights out”
for the plaintiff from the get-go. Literally. The plaintiff alleged
violations of the Magnuson Moss Warranty Act and the New
Jersey Lemon Law as a result of having to return for repairs four
times in October 2007 with regard to an illuminated “check
* Prior Results Do Not Guarantee A Similar Outcome
Vol. 16, No. 4
December, 2010
Defense Digest
OnThePulse…
Page 13
engine” light in her vehicle. The servicing dealer performed
repairs under warranty to alleviate the light and provided the
plaintiff with a loaner vehicle on each occasion. Doug conceded
that the plaintiff was inconvenienced, but argued that she failed
to meet her burden under the law as the illuminated light never
affected the operation of the vehicle and the plaintiff continued
to drive the vehicle an average of 22,000 miles per year. Doug
also persuaded the jury that the plaintiff failed to prove an
unreasonable number of repairs for any one defect, establishing
that an illuminated light is not a defect in and of itself but,
rather, an indication that repairs may be required. The jury,
unimpressed with the plaintiff ’s claim that she lost confidence
in a vehicle she drove from here to Timbuktu, returned a unanimous defense verdict in less than 15 minutes.
PROFESSIONAL LIABILITY DEPARTMENT
David Blake (Cherry Hill, NJ) obtained summary judgment in
a coverage action involving a claim for coverage made by a contractor in the business of waterproofing basements. The contractor/insured’s defective work lead to the destabilization of the
foundation of the claimant’s home. The foundation required
immediate shoring and had to be completely rebuilt. Our insurance company client disclaimed coverage based upon an “earth
movement” exclusion in the policy and asserted that there was no
“occurrence” under the policy since the coverage sought was the
cost to repair and replace the insured’s defective workmanship.
The underlying judgment totaled $130,000. The court granted
summary judgment, finding that there was no coverage under
the earth movement exclusion and, further, that there was no
occurrence to trigger coverage.
Michael DeCandio (Jacksonville, FL) obtained summary judgment on behalf of a structural engineering firm that had prepared
plans and specifications on a large condominium project. The
complaint alleged multiple defects, primarily related to the roof,
windows, and building envelope/stucco. Discovery was undertaken and affidavits prepared attesting to the fact that the scope
of work provided by the client did not encompass the areas of
alleged defects and that they were architectural and construction
issues rather than structural in nature.
Wilhelm Dingler and Scott Gemberling (Philadelphia, PA)
obtained an order of dismissal with prejudice on a Motion for
Judgment on the Pleadings on behalf of a Delaware County
accounting firm. The plaintiffs filed a Certificate of Merit indicating that “expert testimony is unnecessary” for prosecution of its
claims. Utilizing the note to Pa.R.C.P 1042.3(3), Wilhelm and
Scott argued that the plaintiffs could not present expert testimony
on the standard of care or causation and, since the averments of the
complaint taken as a whole implicated matters requiring expert
testimony, the plaintiffs’ entire case must fail. Judge Burr agreed
and dismissed the entirety of the plaintiffs’ claims.
Terry Lefco and John Quinn (Philadelphia, PA) obtained summary judgment in a legal malpractice case where our client defend-
ed a wealthy landlord who was convicted of laundering drug proceeds for the Junior Black Mafia and was sentenced to ten years in
federal prison. He sued his lawyer, who had charged him close to
$1 million in legal fees, on the basis that the lawyer gave him bad
advice to go to trial when all he ever wanted to do was to plead
guilty. While the lawyer initially expected a guilty plea, the government was never able to show him admissible evidence proving his
client’s guilt. The lawyer, therefore, counseled trial. Unfortunately,
the government came up with additional evidence, including a
shoebox filled with $50,000 in cash, which, evidently, was enough
for the jury. The government never actually offered a plea deal the
defendant was willing to accept; trial was, therefore, inevitable.
Dennis Roman and Charlene Seibert (Pittsburgh, PA)
obtained a defense verdict in a legal malpractice action in the
Court of Common Pleas of Elk County, Pennsylvania, arising
out of an underlying plaintiff ’s personal injury action. The wifeplaintiff had fallen into a seven-foot deep open pit at her workplace, which had been dug by a mason to accommodate a metal press, thereby sustaining serious injuries. The attorneydefendant, our client, had timely filed the underlying action
but erroneously named the son by the same name (Junior)
instead of the proper party (Senior) who had dug and allegedly failed to secure the pit. The attorney was unable to later amend
the caption and serve the proper party due to the running of the
statute of limitations, resulting in dismissal of the underlying
action. In the legal malpractice trial, negligence of the attorneydefendant was conceded, and the case was tried solely upon the
plaintiff ’s ability to prove that she would have recovered in her
underlying personal injury lawsuit had the proper party been
named at case inception. We successfully proved that the plaintiff was 75% comparatively negligent in the accident, thus precluding recovery on her underlying claims as well as her legal
malpractice theories as part of her case-within-a-case proof burden. In doing so, we also convinced the court that OSHA standards, sought to be admitted to prove negligence per se of the
mason, were inapplicable for several factual and legal reasons,
including that the mason was not an “employee” of the metal
press plant within the meaning of the statute.
Daniel Sherry and Donna Modestine (King of Prussia, PA)
obtained a defense verdict in Philadelphia County on behalf of
a Philadelphia attorney in a legal malpractice case. The underlying action involved a medical malpractice claim initially filed
by an attorney based on an extremely limited theory of negligence. Following the filing of the original complaint, our client
was referred the case and continued to prosecute. After discovery
and expert review, it was determined that the theory of liability outlined in the original complaint was too narrowly pled
and that the theory of negligence was unsupportable by expert
testimony. Our client successfully filed a motion to amend the
complaint, and the matter went to trial, resulting in a verdict
of $2.5 million. However, the defendant physician filed posttrial motions claiming that the court improperly allowed the
Vol. 16, No. 4
December, 2010
Page 14
Defense Digest
OFFICE LOCATIONS & CONTACT INFORMATION
PENNSYLVANIA
Philadelphia
1845 Walnut Street
Philadelphia, PA 19103
(215) 575-2600 • Fax (215) 575-0856
Thomas A. Brophy, Esq., President and CEO
(215) 575-2748 • tabrophy@mdwcg.com
Bethlehem
Doylestown
1495 Valley Center Parkway, Suite 350
Bethlehem, PA 18017-2342
(484) 895-2300 • Fax (484) 895-0208
William Z. Scott, Esq., Managing Attorney
(484) 895-2306 • wzscott@mdwcg.com
10 N. Main Street, 2nd Floor
Doylestown, PA 18901
(267) 880-2020 • Fax (215) 348-5439
R. Anthony Michetti, Esq., Managing Attorney
(267) 880-2030 • ramichetti@mdwcg.com
Erie
Harrisburg
717 State Street, Suite 701
Erie, PA 16501
(814) 480-7800 • Fax (814) 455-3603
G. Jay Habas, Esq., Managing Attorney
(814) 480-7802 • gjhabas@mdwcg.com
4200 Crums Mill Road, Suite B
Harrisburg, PA 17112
(717) 651-3500 • Fax (717) 651-9630
Timothy McMahon, Esq., Managing Attorney
(717) 651-3505 • tmcmahon@mdwcg.com
King of Prussia
Pittsburgh
620 Freedom Business Center, Suite 300
King of Prussia, PA 19406
(610) 354-8250 • Fax (610) 354-8299
Wendy J. Bracaglia, Esq., Managing Attorney
(610) 354-8256 • wjbracaglia@mdwcg.com
Scranton
U.S. Steel Tower, Suite 2900
600 Grant Street, Pittsburgh, PA 15219
(412) 803-1140 • Fax (412) 803-1188
Scott G. Dunlop, Esq., Managing Attorney
(412) 803-1144 • sgdunlop@mdwcg.com
Williamsport
P.O. Box 3118
Scranton, PA 18505-3118
(570) 496-4600 • Fax (570) 496-0567
Robin B. Snyder, Esq., Managing Attorney
(570) 496-4610 • rbsnyder@mdwcg.com
P.O. Box 68
Williamsport, PA 17703
(570) 326-9091 • Fax (570) 326-5507
Robin B. Snyder, Esq., Managing Attorney
(570) 496-4610 • rbsnyder@mdwcg.com
NEW JERSEY
Roseland
Cherry Hill
425 Eagle Rock Avenue, Suite 302
Roseland, NJ 07068
(973) 618-4100 • Fax (973) 618-0685
Joseph A. Manning, Esq., Managing Attorney
(973) 618-4103 • jamanning@mdwcg.com
Woodland Falls Corporate Park
200 Lake Drive East, Suite 300
Cherry Hill, NJ 08002
(856) 414-6000 • Fax (856) 414-6077
Richard Goldstein, Esq., Managing Attorney
(856) 414-6013 • rlgoldstein@mdwcg.com
Vol. 16, No. 4
December, 2010
Defense Digest
Page 15
DELAWARE
Wilmington
1220 N. Market Street, 5th Floor
Wilmington, DE 19801
(302) 552-4300 • Fax (302) 651-7905
Kevin J. Connors, Esq., Managing Attorney
(302) 552-4302 • kjconnors@mdwcg.com
OHIO
Akron
39 E. Market Street, Suite 301
Akron, OH 44308
(330) 255-0037 • Fax (330) 255-0040
Samuel Casolari, Jr., Esq., Managing Attorney
(330) 255-0039 • sgcasolari@mdwcg.com
FLORIDA
Ft. Lauderdale
Jacksonville
One E. Broward Boulevard, Suite 500
Ft. Lauderdale, FL 33301
(954) 847-4920 • Fax (954) 627-6640
Craig S. Hudson, Esq., Managing Attorney
(954) 847-4955 • cshudson@mdwcg.com
200 W. Forsyth Street, Suite 1400
Jacksonville, FL 32202
(904) 358-4200 • Fax (904) 355-0019
Martin Sitler, Esq., Managing Attorney
(904) 358-4234 • mhsitler@mdwcg.com
Orlando
Tampa
Landmark Center One
315 E. Robinson Street, Suite 550
Orlando, FL 32801
(407) 420-4380 • Fax (407) 839-3008
Cynthia Kohn, Esq., Managing Attorney
(407) 420-4388 • cjkohn@mdwcg.com
201 E. Kennedy Boulevard, Suite 1100
Tampa, FL 33602
(813) 472-7800 • Fax (813) 472-7811
Edward F. Gagain, III, Esq., Managing Attorney
(813) 472-7804 • efgagain@mdwcg.com
NEW YORK
New York
140 Broadway, 19th Floor
New York, NY 10005
(212) 878-1700 • Fax (212) 878-1701
Jeffrey J. Imeri Esq., Managing Attorney
(212) 878-1708 • jjimeri@mdwcg.com
Wall Street Plaza, 88 Pine Street, 21st Floor
New York, NY 10005-1801
(212) 376-6400 • Fax (212) 376-6494
Daniel G. McDermott, Esq., Managing Attorney
(212) 376-6432 • dgmcdermott@mdwcg.com
Vol. 16, No. 4
December, 2010
Page 16
OnThePulse…
Defense Digest
plaintiff to amend the complaint to add a new theory of liability after the statute of limitations. After extensive settlement
negotiations, the plaintiff accepted a $1 million settlement and
pursued this legal malpractice action. After being served with
the legal malpractice complaint, the plaintiff ’s attorney, who
had originally handled the underlying action and drafted the
faulty Complaint, filed a Joinder Complaint adding our client
and the attorney’s firm as additional defendants. This case was
originally mediated, and the mediator recommended a 50/50
split between the defendant and our client, which our client
rejected. The jury in the legal malpractice action found that
the defendant attorney was casually negligent and found that
our client, the third party defendant, was not negligent. The
jury was not required to determine damages since it was a liquidated amount and had been stipulated as $1,787,000, which
was the medical malpractice verdict plus delay damages minus
the $1 million settlement.
WORKERS’ COMPENSATION DEPARTMENT
Tony Natale (Philadelphia, PA) won an important case involving
the right to suspend benefits. The claimant sustained a work-related injury during the course and scope of employment. Although
he was released to return to work light duty and did return, he
brandished a weapon to his supervisor and was discharged. The
original Workers’ Compensation Judge found that the claimant’s
discharge did not disqualify him from benefits. While on appeal,
the claimant was arrested and arraigned on other charges. Although
incarcerated for these other charges, he was not yet convicted. His
trial was scheduled for nearly a year in the future, and he was being
held in prison until the trial since he could not post bail. According to the previous Workers’ Compensation Judge’s decision, temporary total disability benefits continued. The carrier wanted to
stop benefits since the claimant appeared to be “incarcerated”;
however, the law only offers suspension of benefits if “incarcerated
after conviction.” Since the claimant was not convicted, an IME
was scheduled, and the claimant failed to appear. Thereafter, a sus-
pension petition was filed and ultimately granted by the Workers’
Compensation Judge. The Workers’ Compensation Judge commented that there is no real case on point which allows him to
grant or deny such a petition. The issue has come up in other
venues in Pennsylvania with no solid results. It is now established
by this decision (which will head to the Supreme Court eventually) that a post-incarceration but pre-conviction can be the subject
of a suspension based on failure to go to the IME.
Linda Wilson (Wilmington, DE) successfully defended a highdollar claim on behalf of a national manufacturer. The claimant
suffered an occupational disease as a result of inhaling fumes from a
urethane adhesive while working for the employer and suffered significant lung impairment. She testified by video deposition that her
life has been completely altered in that she rarely leaves her home
and regularly has reactions to exposures. She was seeking permanent
impairment benefits, alleging a 92 percent impairment of each lung
($315,545.28). The employer’s medical expert, relying on the AMA
Guides, opined that the claimant had a 54 percent impairment of
each lung ($196,068.60). After a detailed journey through the respiratory and pain chapters of the AMA Guides, as well as through
the claimant’s treatment records, the Board accepted Linda’s arguments and found in favor of the employer.
Judd Woytek (Bethlehem, PA) won a case where the claimant was
a reading teacher and middle school basketball coach for a school
district. She had suffered a left ankle sprain injury that resulted
from demonstrating a rebound technique. The claimant filed petitions seeking to expand the injury to include a medial meniscal
tear of the left knee. She had knee surgery and missed a short period of work post-op. Our IME physician acknowledged a left knee
sprain but said the meniscal tear was degenerative in nature and
not work-related and that the surgery was not related to the work
incident either. The Workers’ Compensation Judge found in our
favor, denying the claimant’s petitions and granting our termination petition based upon our medical expert’s opinion of full recovery from both the ankle and knee injuries. ★
OnThePulse…
MARSHALL DENNEHEY IS HAPPY
TO CELEBRATE OUR RECENT APPELLATE VICTORIES*
Chuck Craven (Philadelphia, PA) succeeded in persuading the
Third Circuit to affirm the decision of the District Court,
obtained by John Gonzales (King of Prussia, PA), to deny the
plaintiff’s motion for F.R.Civ.P. 60(b) relief from a judgment. In
response to the plaintiff’s complaint, John filed a timely motion to
dismiss. When the plaintiff failed to file a response to the motion
when due, the District Court granted the motion as uncontested
and dismissed the plaintiff’s complaint. Five months later, the
plaintiff filed a motion for relief under Rule 60, claiming excusable
neglect and extraordinary circumstances. The essence of the plaintiff’s motion was that its outside counsel had misled it by promising to answer the motion to dismiss and by sending a draft of the
motion, along with assurances that the dismissal was a mistake that
would be rectified. In his successful opposition to the plaintiff’s
Rule 60 motion, John pointed out that there was no excusable
neglect or extraordinary circumstances since the plaintiff’s in-house
counsel knew of the dismissal at least four months before hiring
new counsel to seek relief from the dismissal, and he persuaded
Vol. 16, No. 4
December, 2010
Defense Digest
OnThePulse…
Page 17
the District Court to find that the plaintiff had not satisfied the
criteria governing relief under Rule 60. On appeal, Chuck
responded to the plaintiff’s attacks against the District Court’s
decision by persuading the Court of Appeals that, for several reasons supported by the record and the applicable case law, the District Court had not abused its discretion in denying Rule 60 relief.
Ethan Michael, Inc. v. Union Township, No. 09-4325, 2010 U.S.
App. LEXIS 18182 (3d Cir. 2010) (8/30/10).
Kim Boyer-Cohen (Philadelphia, PA) succeeded in having the
Pennsylvania Superior Court affirm the entry of summary judgment and dismissal of the plaintiff ’s complaint. After the plaintiff filed a workers’ compensation claim, his employer contested
benefits and retained the defendant, an investigating company, to
perform surveillance on the plaintiff. As part of its investigation,
the defendant observed and videotaped the plaintiff as he stood
inside an Islamic Center near a window and prayed. The investigator was between 79 and 80 yards away and videotaped the
plaintiff using a zoom lens. The videotape was subsequently
shown to a Workers’ Compensation Judge, and the plaintiff
brought suit against the defendant under the intrusion upon
seclusion tort of invasion of privacy. After the trial court granted
summary judgment in favor of the defendant, the issue on appeal
was whether an individual who was participating in a worship service in a sanctuary had a reasonable expectation of privacy. In a
published opinion, the Superior Court held the plaintiff failed to
show that he had an expectation of privacy while praying in public. First, he had a diminished expectation of privacy because of
his workers’ compensation claim. Second, the Islamic Center was
open to the public, and the plaintiff was praying directly in front
of a plate glass window. Finally, the Superior Court held that the
defendant’s use of a zoom lens, similar to using binoculars, was
not unreasonable. Thus, there was no abuse of discretion in granting the motion for summary judgment and dismissing the complaint. Tagouma v. Investigative Consultant Services, Inc., __ A.2d
__, 2010 Pa. Super. 147 (Pa. Super. 2010).
Audrey Copeland (King of Prussia, PA) successfully obtained the
Third Circuit’s affirmance of the District Court’s summary judgment procured by Thomas Wagner (Philadelphia, PA) in a case
involving the Medical Device Amendments (“MDA”) to the Federal Food, Drug and Cosmetic Act, 21 U.S.C. §360k(a), which
concerned a Class III medical device given pre-market approval by
the FDA. The court reasoned that the allegations of strict liability
based upon manufacturing defect and breach of warranty (i.e. generalized common law theories of liability) were pre-empted by the
MDA pursuant to the Supreme Court’s decision in Riegel v.
Medtronic, Inc. in that the plaintiffs would be required to prove
that the device was unsafe or ineffective despite the pre-market
approval process, thus interfering with the requirements already
established by the MDA. The plaintiffs’ strict liability claim for
malfunction failed because they did not explain how the device
deviated from FDA requirements, instead attempting to ground
the defendant’s liability on requirements beyond the MDA.
Williams v. Cyberonics, Inc., no. 09-3800 (3d. Cir., July 30, 2010).
Audrey Copeland (King of Prussia, PA) succeeded in obtaining the
Commonwealth Court’s affirmance of an employer’s second Termination Petition and denial of Utilization Review Petitions obtained by
Niki Ingram (Philadelphia, PA) in a workers’ compensation matter.
The court found that the employer’s expert unequivocally opined that
the claimant had recovered from her remaining injuries, including
chronic pain syndrome, and that the Workers’ Compensation Judge
had found a change in the claimant’s physical condition since the last
determination of her disability. Although the expert never specified
that the prior injury included chronic pain syndrome, he did not
opine that she never had it or had a different injury, only that there
were no objective signs of it at the time of his examination; thus, his
testimony was competent. This was akin to the testimony in Jackson
v. W.C.A.B. (Resources for Human Development) and To v. W.C.A.B.
(Insaco, Inc.). In that no objective medical testimony corroborated the
pain complaints, the Workers’ Compensation Judge was free to find
a full recovery. The expert’s competent and unequivocal opinion also
provided substantial evidence for the Workers’ Compensation Judge
to deny the Utilization Review petitions. Biawogei v. W.C.A.B. (Woods
Services), 2334 CD 2009 (Pa. Cmwlth. July 27, 2010).
Audrey Copeland (King of Prussia, PA) successfully obtained an
affirmance from the Commonwealth Court of the denial of a Claim
Petition originally litigated by Joe Vender (Scranton, PA). The
claimant sought workers’ compensation benefits, asserting that as a
result of his exposure to raw sewage in the performance of his work
duties, he developed an infection of his lower left extremity diagnosed as osteomyelitis. While diagnostic studies confirmed this
diagnosis, the Workers’ Compensation Judge found that his exposure to raw sewage was not the proximate cause of this condition.
Rather, the Judge ascribed the cause of his condition to a chronic
infection the claimant had prior to his employment. This finding
was based on the Judge’s attachment of credibility to medical testimony stating that the development of this infection was too close in
time to the claimant’s exposure to raw sewage for that exposure to
constitute the proximate cause. The court also noted that there was
evidence that the claimant had a left foot problem prior to commencing work with the employer and that the claimant’s testimony
was equivocal as to when he began working on the sewer construction project. Stefanek v. W.C.A.B. (Jim Lagana Plumbing and Heating Inc.), 673 C.D. 2010 (Pa. Cmwlth. September 10, 2010).
Walter Kawalec (Cherry Hill, NJ) succeeded in persuading the
Third Circuit Court of Appeals to affirm the decision obtained by
John Gonzales and Deirdre Collins (King of Prussia, PA). In a 21 decision, the court affirmed the grant of summary judgment in
favor of our client, a company which ran a prison in Delaware
County, Pennsylvania. The plaintiffs were a group of female Muslim employees who sued under Title VII for religious discrimination based on a prison policy that outlawed the wearing of headgear by employees, including the Muslim headdress, the khimar,
which the women wanted to wear. The court agreed with the district court that it would be an undue hardship for the prison to
permit the women to wear khimars in light of safety concerns and
because of the prison’s interest in preventing smuggling of contraband into the facility. EEOC v. The Geo Group.
Vol. 16, No. 4
December, 2010
Page 18
Defense Digest
DATA BREACH 101
In addition to the threat of litigation, data breaches can result
in significant fines and penalties. Some state data breach statutes
include civil penalties for failure to comply with the notification
laws. HITECH provides for various tiers of penalties, depending
on whether a violation is committed unknowingly, with reasonable cause or with willful neglect. These fines range from $100 per
violation if an entity did not know and could not know of the violation, to $50,000 per violation for a violation caused by willful
neglect that is not cured within 30 days.
Carriers should also be aware that data breaches may trigger
costly mandatory investigations, credit monitoring costs and/or
public relations costs. A 2010 study by the Ponemon Institute
estimates that the total average cost of handling a data security
incident in the United States in 2009 was $6.75 million ($204
per record). Of that $6.75 million, $4.47 million ($135 per
record) was comprised of lost business. The remaining $2.28
million ($69 per record) was attributable to notification costs,
defense costs (including attorneys’ fees), crisis management,
credit monitoring and call center support, internal and regulatory investigation costs and fines/penalties.
Our Technology, Media & Intellectual Property Practice
Group, along with our Health Law Practice Group, have helped
clients respond to various breaches. Some examples include fairly common events, such as the theft of a laptop or briefcase, to
mitigating file transfer errors which impact the privacy rights of
millions of people. Developing the proper response plan is critical not only for compliance with the numerous laws, but also
to help avoid the regulatory backlash following the event
because of the underlying conduct that caused it to happen in
the first place. ★
SUBSTANTIAL FACTOR TEST OR THEORY
In many of our cases, we would have multiple parties responsible for the same alleged defect. It is possible to describe which
of these parties was responsible for what portion of the damages.
Even if this was not an easy thing to do or something that was
possible, I believe that a construction defect claim would be different than an auto accident. No one party is one hundred percent at fault for anything. Each party is only at fault for their
defect, if any. I think this is a distinction that we can draw upon
when debating this topic.
However, even if the substantial factor theory/test is
allowed to proceed, I do not believe it would impact construction defect claims substantially. The plaintiff still must prove
that our clients are a substantial factor in the plaintiff ’s damages.
Next, the plaintiff still must prove his damages, and a jury must
find that we are a substantial factor. Further, if we believe this
test will be applied, or could be applied, it would be prudent for
us to file cross claims against the various co-defendants, thirdparty defendants and other parties so that those parties will be
on the verdict form alongside us. At that point, the jury would
be forced to attribute fault to the various parties in order to satisfy the cross claims. So, unless the plaintiff is able to separate
the cross claims and third-party claims from its original actions,
all these claims will be decided by the same jury, and, therefore,
the apportionment of fault will be de facto despite the plaintiff ’s
efforts to apply the Substantial Factor Theory. ★
DISQUALIFICATION OF COUNSEL
The Court also provided a survey of other jurisdictions and
their determination of the “substantially related matters” test.
The District Court for the Eastern District of Pennsylvania has
held that matters are “substantially related for purposes of RPC
1.9 if they involve the same transaction or legal dispute, or if
there otherwise is a substantial risk that confidential factual
information as would normally have been obtained in the prior
representation would materially advance the client’s position in
the subsequent matter.” United States v. Fumo, 504 F. Supp. 2d
6, 28 (E.D. P.A. 2007).
The Court also cited New York’s statement of the test,
“Whether facts which were necessary to the first representation
are necessary to the present litigation.” United States Football
Vol. 16, No. 4
League v. National Football League, 605 F. Supp. 1448, 1459
(S.D. N.Y. 1985).
The Court also provided the New Jersey federal court interpretation that “matters are considered substantially related when
it can reasonably be said that in the course of the former representation an attorney might have acquired information related
to the subject matter of his or her subsequent representation.”
Rohm & Haas Co. v. American Cyanamid Co., 187 F. Supp. 2d
221, 228 (D.N.J. 2001).
This decision highlights not only the need for a thorough
conflicts check prior to a firm accepting a new assignment but,
further, provides a detailed, factually-based framework for evaluating any potential conflict analysis. ★
December, 2010
Defense Digest
Page 19
New Jersey—Long Term Care Litigation
CONTRACTS REQUIRING NURSING HOME RESIDENTS TO
ARBITRATE DISPUTES WITH FACILITY ENFORCEABLE BUT
WITH EXCEPTIONS
By Philip J. Anderson, Esq.*
KEY POINTS:
●
●
●
Federal Arbitration Act, which declares arbitration provision in contracts “valid, irrevocable, and
enforceable,” preempts the public policy of this state as expressed by the Legislature in N.J.S.A.
30: 13-8.1, a key component of the Nursing Home Responsibilities and Rights of Residents Act,
which renders void and unenforceable “[a]ny provision or clause waiving or limiting the right to
sue … between patient and nursing home.”
The arbitration agreement will be found unenforceable if it significantly restricts discovery, limits compensatory damages and/or prohibits punitive damages.
There is legislation pending in both houses of Congress, namely the Fairness in Nursing Home Arbitration Act. S-512 was introduced by Sens. Mel Martinez, R-Fla., and Herb Kohl, D-Wis., while H.R.
1237 was sponsored by Rep. Linda Sanchez, D-Calif.
Recently before the New Jersey
Appellate Division was the issue of
whether §2 of the Federal Arbitration
Act (“FAA”), 9 U.S.C.A. § 2, which
declares the arbitration provision in
contracts “valid, irrevocable, and
enforceable,” preempts the public policy
of this state as expressed by the Legislature in N.J.S.A. 30: 13-8.1, a key comPhilip J. Anderson
ponent of the Nursing Home Responsibilities and Rights of Residents Act, which renders void and
unenforceable “[a]ny provision or clause waiving or limiting
the right to sue … between patient and nursing home.” Ruszala
v. Brookdale Living Communities, Inc., 1 A.3d 806 (App. Div.
2010) held that the Federal Arbitration Act preempts New Jersey’s Nursing Home Responsibilities and Rights of Residents
Act. The court considered New Jersey’s laws protecting the
elderly and infirm against a national policy favoring arbitration as an alternative forum for resolving civil disputes. Ultimately, the court diffused this tension by both respecting the
supremacy of federal law while relying on well-established
principles of contract law to declare certain provisions of the
arbitration agreements unenforceable under the doctrine of
substantive unconscionability.
On a consolidated appeal, the two plaintiffs each signed
residency agreements with two New Jersey assisted living facilities. Subsequently, each resident suffered significant injuries
and later died as a result. The plaintiffs brought suits sounding
in negligence and wrongful death against each facility and
other individuals associated with the ownership and operation
of these facilities. Both contracts signed by the plaintiffs contain identical arbitration and limitation of liability provisions,
requiring claims be resolved through binding arbitration. Other
sections of the arbitration and limitation of liability clause
significantly restrict discovery, limit compensatory damages
and prohibit punitive damages.
Upon reviewing the record developed before the trial
court, the Appellate Division reversed and found that the FAA
preempts the anti-arbitration provision in N.J.S.A. 30:13-8.1.
The court also found that the economic activities performed by
these nursing facilities in servicing the residency contracts
“involve” interstate commerce. The Appellate Division
affirmed the trial court’s determination that some of the arbitration provisions are unenforceable based on the doctrine of
substantive unconscionability. While the panel found that the
residency agreements were contracts of adhesion as they were
presented on a “take-it-or-leave-it” basis, evidencing the indicia
of procedural unconscionability, they were not automatically
disallowed under the state Supreme Court’s ruling in Rudbart v.
North Jersey District Water Supply Commission, 127 N.J. 344
(1992). The Appellate Division was satisfied that the discovery
restrictions, limitations on compensation for non-economic
damages and the outright preclusion of punitive damages form
an unconscionable wall of protection for nursing home operators seeking to escape the full measure of accountability for
tortuous conduct that imperils a discrete group of vulnerable
consumers. After striking these provisions from the residency
agreement, the Appellate Division held that the arbitration
agreement was found enforceable.
* Phil is an associate in the firm’s Cherry Hill, New Jersey, office. He can be reached
at (856) 414-6005 or at pjanderson@mdwcg.com.
Vol. 16, No. 4
December, 2010
Page 20
Defense Digest
New Jersey – Workers’ Compensation
ONCE IS ENOUGH! WHEN IT COMES TO CONSIDERING
EVIDENCE OF THE PLAINTIFF’S INTENTIONAL INJURY BY THE
EMPLOYER AND LOSS OF THE WORKERS’ COMPENSATION BAR
By Robert J. Fitzgerald, Esq.*
KEY POINTS:
●
●
●
The workers’ compensation bar protects employers from bodily injury damages for workplace
injuries.
Employers lose the benefit of the workers’ compensation bar for “intentional injuries.”
The court will consider many factors in determining intentional wronging by the employer, even an
employer’s subsequent actions after a workplace injury has occurred.
The court once again tackles the
issue of the “intentional injury” exception
to the workers’ compensation bar in Van
Dunk v. Reckson Associates Realty Corp., et
al., and James Construction Co., 2010 N.J.
Super LEXIS 179 (August 30, 2010).
Like most “no-fault” jurisdictions, the
New Jersey Workers’ Compensation Act
Robert J. Fitzgerald
provides medical and disability benefits to
injured workers, regardless of having to
prove negligence on behalf of the employer. In return for these
no-fault benefits, injured workers are barred from bringing negligence actions for bodily injuries against their employers under
Section 8. The workers’ compensation benefits are the exclusive
remedy for workplace injuries. However, if an injured worker can
prove that the injury was intentionally caused by the employer,
then the workers’ compensation bar (to a negligence action for
bodily injuries) can be pierced.
In Van Dunk, the plaintiff sustained multiple injuries as
the result of a trench collapse. The plaintiff was employed as a
laborer by James Construction Co. The contract between Reckson Associates Realty and James required James to complete excavation work for a retention pond and storm water upgrades by a
certain date so that other work on an overall construction project
could be completed. Glenn Key (“Key”) was James’ superintendent and a “competent person” for purposes of OSHA.
James had experienced difficulties because of record rainfalls
which impeded the progress of the project. On the day of the
accident, a dewatering sump for the retention pond under construction was being relocated. The sump had to be relocated
before it rained because the rest of the project could not advance
if the sump was not relocated. In order to relocate the sump,
there had to be an excavation and construction of a trench which
would be lined with a geo-textile fabric. Initially, Key attempted
to cover the trench, which was eighteen to twenty feet deep, by
having his men stretch out the fabric and walk it over the trench.
However, the crew experienced some difficulty as the fabric was
not lying correctly against the trench and getting twisted.
At that point, the plaintiff volunteered to go into the trench
and fix the fabric. However, Key stopped him and told him not
to enter the trench because he was concerned about the plaintiff’s
safety. Key acknowledged that, considering the depth of the
excavation, the soil type and conditions and the lack of room to
cut the slopes back more, he did not want personnel to enter the
excavation to install the filter fabric because he was worried about
the trench failing.
After denying the plaintiff’s initial offer to enter the trench,
the crew continued to drape the fabric over the trench. Key saw
some cracking in the bank of the trench as they tried to lay the
fabric. However, they were still unsuccessful in laying it properly.
In his frustration to get the fabric to install correctly, Key ultimately directed the plaintiff to enter the excavation to correct the
problem with the fabric. The court noted that this direction was
in violation of OSHA’s non-discretionary requirements because
the trench had no protective system, such as a trench box, to
make it more stable and protect against a cave-in. There was a
trench box available, but Key did not use it because the bucket
and backhoe were wider than the box and would not fit inside
the trench. Additionally, Key could not slope the trench back any
further, which would have made it more stable, because it was a
confined area and the space for the trench would not allow it.
* Bob, a shareholder in our Cherry Hill, New Jersey office, can be reached at
(856) 414-6009 or rjfitzgerald@mdwcg.com.
Vol. 16, No. 4
December, 2010
Defense Digest
Page 21
CONTRACTS REQUIRING NURSING HOME RESIDENTS TO ARBITRATE DISPUTES
A determination of whether an arbitration agreement is
enforceable must be made on a case-by-case basis. Numerous
factors to determine substantive unconscionability must be
considered, which include, but are not limited to, the subject
matter of the contract, the parties’ relative bargaining positions, the degree of economic compulsion motivating the
adhering party and the public interest affected by the contract.
As noted in Ruszala, the unconscionability issue centered
on limitations of discovery, the capping of compensatory
damages to a seemingly arbitrary figure and the outright
prohibition of punitive damages. However, in the right
case, arbitration is cheaper, faster and less subject to jury
passion and prejudice. ★
ONCE IS ENOUGH!
In less than five minutes after the plaintiff entered the
trench, it caved in and buried the plaintiff to his chest.
OSHA issued James a citation for a “willful” violation of its
regulations based on the fact that it had failed to protect its
employees from cave-ins by an adequate protective system; it
had failed to properly slope the trench; and because it
allowed the plaintiff into an unprotected trench of approximately twenty feet in depth.
The trial court, in a summary judgment ruling, dismissed the plaintiff ’s subsequent bodily injury action against
James. The court found that James did not commit an
“intentional wrong.” On appeal, the plaintiff argued that the
totality of the facts created a jury question on the issue of an
intentional wrong. The court then went into an extensive
analysis of the legal requirements to prove an “intentional
injury” starting with Millison v. E.I. Du Pont de Nemours &
Co., 101 N.J. 161 (1985) and Laidlow v. Hariton Mach. Co.
Inc., 170 N.J. 602, (2002). In Millison, the Court stated that
the “intentional wrong” exception was to be interpreted narrowly so as not to “swallow up” the “‘exclusivity’ provision of
the Act” and adopted the “substantial certainty” test:
The mere knowledge and appreciation of a risk—something short of substantial certainty—is not intent. The
defendant who acts in the belief or consciousness that
the act is causing an appreciable risk of harm to another
may be negligent, and if the risk is great the conduct
may be characterized as reckless or wanton, but it is not
an intentional wrong.
Gross negligence by an employer, lack of concern for an
employee’s safety and the mere toleration of workplace hazards
are insufficient. The Court adopted a two-prong test that had
to be satisfied in order to establish that an employer has lost its
immunity under the statute:
(1) The employer must know that his actions are substantially certain to result in injury or death to the employee
(conduct prong); and
(2) The resulting injury and the circumstances of its
infliction on the worker must be:
(a) More than a fact of life of industrial employment;
and
(b) Plainly beyond anything the Legislature intended
to immunize (context prong).
In Laidlow, the Court refined the two-prong test stating
that no one fact was dispositive—that there had to be an analysis based on the totality of the circumstances. The absence of a
prior accident, or close-calls, does not necessarily mean that the
employer did not appreciate that its conduct was “substantially
certain” to cause death or injury. Furthermore, the removal or
alteration of a safety device, although not an “intentional
wrong” per se, could meet the conduct prong depending on the
facts of the case. The same facts and circumstances will be relevant to both prongs of Millison.
First, the court must make an initial judicial finding to
determine whether the evidence could lead a jury to conclude
that the employer acted with knowledge that it was substantially certain that a worker would sustain injury. If so, the court
must next then determine as a matter of law whether, if the
employee’s allegations are proved, they constitute a simple fact of
industrial life or are outside of the purview of the conditions the
Legislature could have intended to immunize. If the court finds,
as a matter of law, that the employer’s conduct was sufficient to
overcome the “context prong” to the worker’ compensation bar,
then a jury trial is required on the “conduct prong” to determine
if the injury that occurred was a substantial certainty.
On appeal, the plaintiff argued that the motion judge erred
in finding that Key’s conduct did not present a jury question
under the conduct prong. The court agreed and reversed the
matter for a jury trial. The court first focused on the testimony
of Key and his acknowledgment that, considering the depth of
the excavation, the soil type and the conditions and the lack of
room to cut the slopes back more, he didn’t want personnel to
Vol. 16, No. 4
December, 2010
Page 22
Defense Digest
Pennsylvania—Amusements, Sports & Entertainment
NO UPHILL BATTLE IN DEFENSE TO DOWNHILL SKIING
LIABILITY
By Jason P. McNicholl, Esq.*
KEY POINTS:
●
●
●
●
Ski resort does not owe a duty to a skier injured while using a ski lift.
Allegations of employee negligence cannot overcome the express terms of a release barring suits for
employee negligence.
Purported statements made by an employee immediately prior to accident do not supersede exculpatory provision signed by skier absolving resort of liability for negligent acts of employees.
In future disputes involving adhesion contracts, the issue may not be whether the contract is one of
adhesion, but whether the contract as a whole is “unconscionable.”
The Pennsylvania Supreme Court held in the release. The Superior Court determined that Summary Judgin Chepkevich v. Hidden Valley Resort, LP, ment was not appropriate because of a fact dispute as to what the
2010 Pa. LEXIS 1311 that a ski resort does lift operator said to Chepkevich immediately preceding the accinot owe a duty to protect a skier from dent, that he would stop the lift. Subsequent oral representations
injuries sustained while falling from a ski lift. made by the operator, as intimated by the Superior Court, may
supersede the terms of the initial conLaurie
tract. The Superior Court further held
Chepkevich
that the Act did not bar suit because
and her husband
D E F E N S E L I T I G AT I O N
the negligent operation of a lift was
alleged personal
Jason P. McNicholl
not an act inherent to the sport.
injuries after a
In overturning the Superior
chairlift operaCourt, the Pennsylvania Supreme
tor agreed to stop a ski lift so that her
Court first addressed the Act, which
nephew could more easily board the lift,
provided the statutory context upon
but failed to so, causing Chepkevich to
which the release was based. The
fall. Prior to the incident, Chepkevich
Court provided a detailed analysis of
signed a form which indicated that by
the assumption of the risk doctrine as
accepting a season pass, she accepted all
it applied to sports and places of
risks and agreed not to sue the Resort or
amusement, which is also described as
its employees if injured while using the
the “no duty” rule. Under the “no
facilities, “regardless of any negligence”
duty” rule, an owner or operator of a
of the Resort.
place of amusement has no duty to
The Resort filed a Motion for Sumprotect the user from hazards inherent
www.marshalldennehey.com
mary Judgment with the Somerset
to the activity. In reaching its determiCounty Court of Common Pleas, argu1-800-220-3308
nation, the Court relied heavily upon
ing that suit was barred by the signed
Hughes v. Seven Springs Farm, Inc., 563
release, which exempted the Resort from
Pa.
501,
762
A.2d
339,
344
(Pa. 2000), where the Court previousliability, and by Chepkevich’s voluntary assumption of the risk purly
held
that
the
assumption
of
the risk doctrine barred a skier’s lawsuant to the Skier’s Responsibility Act, 42 Pa.C.S. 7102(c) (“the Act”).
suit
arising
from
a
collision
with
another skier at the base of a ski
Although holding that the Act did not bar suit because Chepkevich
did not assume the risk of an activity inherent to the sport, the trial slope because the activity was an inherent risk to downhill skiing.
As opined by the Court, downhill skiing involves more than just
court granted Summary Judgment on the basis of the release alone.
The Pennsylvania Superior Court reversed on appeal, holding skiing down a hill, it also encompasses those activities directly and
that the release was “arguably” an adhesion contract as the term necessarily incident to the act of skiing, such as boarding a ski lift,
negligence was undefined and there were no examples of negligence riding the lift, exiting the lift, etc. According to the Chepkevich
Court, falling from a ski lift is a “general risk” that is common, frequent and expected in the sport.
* Jason is an associate in our Harrisburg, Pennsylvania, office and can be reached
STRATEGICALLY
LOCATED.
directly at (717) 651-3510 or jpmcnicholl@mdwcg.com.
Vol. 16, No. 4
December, 2010
Defense Digest
Page 23
Pennsylvania—Health Care Liability
PSYCHIATRIC RECORDS CAN BE SUBJECT TO DISCOVERY
IN PENNSYLVANIA
By T. Kevin FitzPatrick, Esq.*
KEY POINTS:
●
●
●
Psychiatric records are privileged, but prevention from discovery is not absolute.
Pennsylvania recognizes numerous statutes and policy considerations restricting disclosure of mental
health information.
Waiver of privilege occurs when a plaintiff places a mental health at issue in a pleading.
In a recent case involving a personal
injury plaintiff with a previous psychiatric history, the Pennsylvania Superior
Court addressed the issue of whether her
complaint placed her mental health at
issue so as to result in a waiver of any
claim for privilege. The court in Gormley
v. Edgar, 2010 Pa. Super. 71, conducted
a thorough review of multiple conT. Kevin FitzPatrick
tentions for protection advanced by the
plaintiff but decided that the trial court
order granting the defense Motion to Compel Special Consent
for Release of Records was justified.
The plaintiff in Gormley brought suit in Philadelphia County to recover for injuries sustained in a September 2006 motor
vehicle accident. During discovery, the defendant served a subpoena for records from Lower Bucks Hospital, which refused to
provide them without the plaintiff ’s written consent. The plaintiff filed formal objections to the subpoena, which were stricken
by court order. The plaintiff then produced the hospital records
with the exception of a gynecological visit and an ER visit from
2007 and 2005, respectively. The plaintiff also produced a privilege log citing to the Mental Health Procedures Act (“MHPA”),
50 P.S. §7101, et seq., as the basis for withholding the ER records
from 2005. The defendant moved to compel special consent for
release of the withheld records. The court conducted a hearing,
and the plaintiff requested that the court conduct an in-camera
review of the records at issue. The court then denied the defendant’s motion regarding the gynecological records but granted
the Motion to Compel authorization for release of the ER
records. The plaintiff then pursued an appeal.
The issue was accepted by the Superior Court as an appropriate appeal of the collateral order under PA.R.A.P. 313. Fundamental to its decision was the recognition that the appeal
* Kevin is a shareholder and Assistant Director of our Health Care Liability
Department. He works in our King of Prussia, Pennsylvania, office and can be
reached at (610) 354-8252 or tkfitzpatrick@mdwcg.com.
Vol. 16, No. 4
from the discovery order raised a question of application of privilege regarding mental health records and separate privacy and
policy considerations.
The Superior Court then addressed the plaintiff ’s multiple
bases for claiming that the trial court committed an abuse of
discretion, with particular focus on certain arguments. The
plaintiff claimed that the trial court order contravened various
privileges, specifically the confidentiality provisions of the
MHPA, contained in 50 P.S., § 7111(a), and the Mental
Health and Mental Retardation Act of 1966 (“MH/MRA”), 50
P.S. § 4605. With respect to the MHPA, the court recognized
the broad scope of the confidentiality protection and specifically cited the Supreme Court case of Zane v. Friend’s Hospital,
836 A.2d 25 (Pa. 2003). However, the determination was made
that the MHPA was inapplicable because the medical care at
issue, an ER visit, was voluntary outpatient treatment and not
covered by the Act. Likewise, the MH/MRA was determined to
be inapplicable because under §4605, the prohibition against
disclosure of information without authority or consent applies
only to “a person who has been admitted, committed or
detained pursuant to the provisions of the Act.” Such was not
the case with Ms. Gormley.
The plaintiff also argued that disclosure was inappropriate
because of the statutory protections of confidential communications between a psychiatrist and patient under 42 Pa.C.S.A. §
5944. Importantly, the trial court agreed that the
psychiatrist/patient privilege was applicable to the case but
determined it had been waived because the plaintiff placed her
mental health at issue in the lawsuit. In upholding this ruling,
the Superior Court delineated the rationale for protection of
such confidential communications and the “strong public policy designed to encourage and promote effective treatment and
to insulate the client’s private thoughts from public disclosure.”
Citing, Kalenevitch v. Finger, 595 A.2d 1224 (Pa. Super. 1991).
The court specifically stated that it “holds this privilege in the
highest regard,” however, similar to an attorney/client relationship, the privilege is not absolute and may be waived.
December, 2010
Page 24
Defense Digest
ONCE IS ENOUGH
enter the excavation to install the filter fabric because he was
worried about the trench failing. Additionally, Key indicated
that he had said “no” to the plaintiff’s initial request to enter the
trench because he was worried about his safety. Moreover, Key’s
acknowledgement that there was an accumulation of water in
the bottom of the trench, an indication that moisture was weeping from the soil, that there was cracking on the bank of the
trench, coupled with his knowledge that Type C soil, the kind of
soil he was working with, was the least stable, all show, in the
totality of the circumstances, that he knew the trench was unstable and that it could fail.
In addition to Key’s testimony, the court also found the nonuse of the trench box to be “somewhat analogous” to a removal
of a safety device. The court found that the motion judge did not
give significant credit to the OSHA citation or the fact that the
defendant could have made the trench more stable if it had used
protective devices. Additionally, the court also noted the fact that
OSHA gave the defendant a “willful” citation, although the court
did not go into what OSHA defined as a willful violation.
Based on this, the court found that the defendant had
knowledge that allowing its employees to enter the trench without any safety device could lead to injury or death. Although not
required under the Millison/Laidlow analysis, the court also
found that the employer’s actions were motivated to increase the
defendant’s profit and productivity. Potash, James’ president,
acknowledged that the relocation of the sump was essential
because, without it, the rest of the project could not go forward.
The court found, therefore, that the defendant was under pressure to relocate the sump before it rained and sacrificed the
plaintiff’s safety accordingly.
Importantly, the court also referred to facts that occurred
after the accident in its analysis. Specifically, the court noted that
after OSHA had finished its investigation, the defendant was
able to relocate the sump by using the trench box it had on site
without harm to any of its employees. This fact, the court
found, showed that the plaintiff ’s safety was sacrificed for the
defendant’s financial benefit.
Finally, the court found that, although construction sites
have a dangerous nature, it does not excuse the failure to use
safety devices to alleviate the dangers and risks, which were
clearly known. Here, it is unlikely that the Legislature would
have considered allowing an employee to enter an unstable
trench without the use of a trench box or adequate sloping, coupled with the employer’s knowledge that the trench was unstable and could fail at any moment, to constitute simple facts of
industrial life.
The Van Dunk Court has seemingly expanded what evidence can be considered when considering if an employer has
committed an “intentional wrong.” Specifically, by considering facts that occurred after the accident, the court now puts
employers in a very tough position. For example, what if this
employer had not used the trench box after this accident and
the same type of accident occurred a second time? Presumably, on the second accident the employer would be found to
have committed an intentional wrong because it had knowledge of the first cave-in. Yet, by using the trench box after the
accident and safely completing the project, the court now
finds this to be evidence of the wrong doing by the employer
on the first accident. Moreover, the court’s focus on the possible
overall financial motivations of the parties may lead to more
complex discovery and litigation for this type of cases in the
future since they may be included in the totality of the circumstances analysis.
Finally, the court’s analysis does reinforce the notion that
the workers’ compensation benefit scheme does not employ
concepts or defenses of negligence law, such as assumption of
the risk. Even if an employee understands the dangerous
nature of a task and volunteers to proceed, this will not shield
the employer from liability for injuries. Obviously, employers,
both large and small, should develop comprehensive safety
programs for employees. Safety programs should be updated
regularly and reviewed with experts in OSHA and the insurance industry as safety standards are ever changing and occupational medicine continues to evolve. ★
NO UPHILL BATTLE
Although effectively disposing of the matter by holding that
suit was barred by Chepkevich’s assumption of the risk, the Court
still addressed the appropriateness of the release, indicating that
even if the Resort owed a duty to the skier, Summary Judgment
was properly entered on the basis of the release since she absolved
the Resort from liability for the negligence of its employees.
An exculpatory provision contains language which excuses
a party to a contract from liability for unintentional negligent
acts or omissions. Although such provisions are strictly conVol. 16, No. 4
strued against the enforcing party and are not favored by law, an
exculpatory provision is still valid where the contract does not
contravene public policy; is between persons relating entirely to
their own private affairs; and each party to the contract is a free
bargaining agent to the agreement so that the contract is not one
of adhesion. Where an exculpatory clause is found valid, it is still
not enforceable unless the language of the parties is clear that
one is relieved of liability for his negligent acts.
December, 2010
Defense Digest
Page 25
NO UPHILL BATTLE
The Court determined that the Superior Court erred in
suggesting that the release was an unenforceable adhesion
contract. Although this was not found to be an adhesion contract, the Court suggested that in future disputes, adhesion
contracts, especially those involving voluntary hazardous
activities, could be enforceable and that the relevant question
may not be whether the contract is one of adhesion, but
whether the contract as a whole is “unconscionable.” Unconscionability, as suggested by the Court, should be based upon
general principles.
In upholding the contract’s enforceability, the Court
opined that the Resort made sufficient effort to inform
Chepkevich with a full-page, detailed agreement written in
normal font with the title “RELEASE FROM LIABILITY”
to inform her that by signing and purchasing a lift ticket, she
gave up any right she had to sue for damages arising from
injuries caused even by negligence. The Court further opined
that because an exculpatory agreement need not contain the
word negligence in order to affectively bar suit (i.e. an exculpatory clause absolving a party of “any and all liability” covers negligence even though the word negligence does not
appear in the contract), it would be illogical to deem an
agreement inadequate that references negligence but does not
define or illustrate the term. The Court further concluded
that the use of a ski lift is a risk inherent to the sport of skiing, was properly encompassed by the exculpatory language
of the release and the release explicitly encompassed the negligence of resort employees. ★
PSYCHIATRIC RECORDS
The plaintiff persisted with her position and challenged
the trial court’s determination that she had waived the privilege by putting her mental health at issue in the case. Despite
placing on the record that she did not intend to offer psychiatric or psychological testimony at trial, her statement was
inconsistent with her complaint. In paragraph 12 of her
complaint, which she refused to withdraw, she alleged that
she “has been unable to attend to her usual duties and occupations, avocations and enjoyment of life all to her great loss,
frustration and anxiety, and she may continue to be so disabled for an indefinite time in the future.” The Superior
Court agreed with the trial court that by pleading anxiety, a
recognized mental condition, she placed her mental health at
issue. [Note, however, that the Superior Court did not feel
that more general averments of shock, mental anguish and
humiliation, routine elements of non-economic damages,
resulted in waiver of the privilege.] It went on to explain that
OnThePulse…
“it would be clearly unfair for a party to seek recovery for
anxiety if that mental health issue pre-dated the accident.
Moreover, where a party seeks recovery for aggravation of a
pre-existing mental health condition, records of prior treatment for that condition are discoverable.”
The lessons from Gormley center on multiple competing
interests including: generally liberal discovery practices; the
strong protections afforded confidentiality of psychiatric
treatment; the right to privacy; and the right of a named
defendant to properly defend himself and obtain relevant
information. Courts will factor these interests given particular circumstances, but what is clear is that the privilege associated with confidential psychiatric treatment information is
not absolute. Defense practitioners should examine pleadings
carefully to determine whether mental health issues are a
focus of damage claims. If so, discovery should ensue, and
Gormley supports appropriate inquiry and production. ★
Walter Kawalec (Cherry Hill, NJ) succeeded in persuading
the New Jersey Appellate Division to affirm the decision
obtained by Howard Mankoff (Roseland, NJ). The case was
a legal malpractice case brought against our client, a matrimonial attorney, by a disgruntled former client who, after
being sued to recover the attorney’s fee, countersued alleging
malpractice. The trial judge granted summary judgment on
the grounds that by settling the underlying matrimonial
Vol. 16, No. 4
action, the plaintiff could not then sue his attorney for malpractice. During the pendency of the appeal, the New Jersey
Supreme Court issued a decision clarifying some of the key
points of the law in this area. The Appellate Division, applying this new law, found that the plaintiff’s malpractice claim
was properly dismissed because he failed to provide adequate
factual and expert evidence to support his allegations of negligence, and the court affirmed. Gidding v. Heathcote. ★
December, 2010
Page 26
Defense Digest
OnThePulse…
OTHER NOTABLE ACHIEVEMENTS*
Kate McGrath (King of Prussia, PA), Director of the
firm’s Healthcare Liability Department, has been named
“Trial Lawyer of the Year “ by the Board of the Trial Lawyers
Section of the Montgomery County Bar Association.
Matthew Keris (Scranton, PA) was renamed statewide
Secretary for the Pennsylvania Defense Institute at their
annual conference at the Bedford Springs Resort, Bedford,
Pennsylvania, on September 30, 2010 to October 1, 2011.
James Cole (Doylestown, PA) and Jeffrey Rapattoni
(Cherry Hill, NJ) recently spoke in Orlando, Florida, at
the International Conference of IASIU, the International
Association of Special Investigative Units. The presentation
was titled “Public Adjusters – An SIU Prospective.” The
conference was attended by 450 members of the insurance
fraud community, including insurance claims representatives, investigators and executives.
Bradley Remick (Philadelphia, PA), a shareholder, has
received the National Liberty Museum Volunteer Firefighter
of the Year award.
Marc Jones (Cherry Hill, NJ) recently participated in a
one-hour televised webinar entitled “What Risk Managers
and Insurance Professionals Should Know About Today’s
Mounting Environmental Exposures.” The webinar was
conducted at AM Best’s offices/TV studio in Oldwick, New
Jersey. The webinar was very well attended, with over 500
participants on the web and on the phone. The webinar was
geared to insurance professionals, claims adjustors and risk
managers. Marc spoke on current trends in environmental
litigation, changes in the regulatory environment for environmental remediations, the status of the absolute pollution
exclusion in insurance policies as defined by courts in New
Jersey and the U.S. and the legal impact of climate change
legislation on insurance policies.
Andrew Davitt (Philadelphia, PA) and James McGovern
(Pittsburgh, PA) recently spoke at the Investors Capital
Corporation Annual National Convention in Boston,
Massachusetts. Andy and Jamey put on a “Best Practices
Boot Camp” risk management seminar to over 600 financial
advisors from across the country in an interactive question
and answer format.
Matthew Keris (Scranton, PA) co-organized and presented the Pennsylvania Defense Institute & Northeast
Pennsylvania Trial Lawyers’ Association’s Third Annual
“Civil Litigation Update” CLE and Cocktail Reception at
the Mohegan Sun Casino in Wilkes-Barre on August 18,
2010. Attendance and participation in the event was at its
highest levels as nearly 100 locally practicing attorneys, 20
insurance representatives from eight companies and 20
judges participated in the event.
Vol. 16, No. 4
Theodore Kobus (Philadelphia, PA) was a speaker at
the NetDiligence Cyber Risk and Privacy Liability Forum on
the topic of “Data Breach Liability: An Unstable Legal Environment.” The conference was attended by all of the major
insurance carriers and brokers from the U.S. and London.
Daniel McDermott (New York, NY) was selected by
the Board of Directors of the American Institute of Marine
Underwriters (AIMU) to participate in its strategic planning
conference held at the premises of Swiss Re Insurance Companies in Armonk, New York. AIMU has over 100 years of
service as the trade association representing the United States
Ocean Marine industry as an advocate, educator and information center. Representatives from 30 U.S. marine insurers
were in attendance. Dan was selected as the sole representative of the 22 maritime law firm members to represent the
issues and interests of the Maritime Bar and is the first attorney to be invited to attend.
Jeffrey Rapattoni (Cherry Hill, NJ) and James Cole
(Doylestown, PA) presented at a National Insurance Crime
Bureau sponsored event that hosted approximately 200
people from a variety of backgrounds, including various
insurance carriers and law enforcement agencies, on the topic
of “Hail Storm and Property Damage Fraud.” Jeff and Jim
presented on the topic of civil litigation strategies related to
fraudulent claims in New Jersey and Pennsylvania and
offered advice as to how to effectively litigate same. At the
conclusion of the seminar, Jeff and Jim were presented with
awards from the National Insurance Crime Bureau for their
continued dedication to the fight against insurance fraud.
Christopher Boyle (King of Prussia, PA) presented a
seminar “Legal Updates for Law Enforcement Executives” at
the yearly meeting of the Pennsylvania Chiefs of Police Association in Lancaster, Pennsylvania. The seminar was attended
by 120 chiefs and assistant chiefs from departments throughout the state.
David Shannon (Philadelphia, PA) recently had an article entitled Starbucks v. Charbucks, Substantial Similarity is not
Required to Prove Dilution by Blurring in the Pennsylvania Bar
Association Intellectual Property Law Section Summer
Newsletter. David’s article dealt with a recent Second Circuit
U.S. Court of Appeals decision that held proof of “substantial
similarity” between two trademarks is not required to establish dilution by blurring. This decision is likely to lead to
more infringement litigation since large corporations with a
famous trademark may be more inclined to pursue small business owners then to simply abandon their rights when they do
not need to prove “substantial similarity.” ★
December, 2010
Defense Digest
Page 27
FIRM BACKGROUND AND STATEMENT OF PURPOSE
Marshall, Dennehey, Warner, Coleman & Goggin, a professional corporation, was founded in 1962. Since that time, our
law firm has realized substantial growth in response to our continually expanding client base. We are exclusively a defense
firm, and our professional practices encompass a wide spectrum of litigation matters. We apply business discipline to the
practice of law with resulting cost savings to our clients.
We are over 400 attorneys strong and have nineteen offices strategically located in Pennsylvania, New Jersey, Delaware,
Ohio, Florida, and New York. Devoted to defense alone, our firm consists of a number of litigation practice groups, including:
CASUALTY DEPARTMENT:
PROFESSIONAL LIABILITY DEPARTMENT:
Thomas A. Brophy, Esquire—Director
1845 Walnut Street, Philadelphia, PA 19103
(215) 575-2748 • Fax (215) 575-0856
E-Mail: tabrophy@mdwcg.com
Amusements, Sports & Entertainment Practice Group
Automobile Liability Practice Group
Aviation Practice Group
Class Action Litigation Practice Group
General Liability Practice Group
Hospitality Litigation Practice Group
Maritime Litigation Practice Group
Medical Devices & Pharmaceutical Practice Group
Product Liability Practice Group
Property Litigation Practice Group
Retail Liability Practice Group
Special Investigation Litigation Practice Group
Trucking & Transportation Liability Practice Group
Philip B. Toran, Esquire—Director
(215) 575-2813 • Fax (215) 575-0856
E-Mail: pbtoran@mdwcg.com
Appellate Advocacy & Post-Trial Practice Group
Architectural, Engineering & Construction Defect
Practice Group
Consumer & Credit Law Practice Group
Defective Drywall Practice Group
Environmental & Toxic Torts Practice Group
Insurance Coverage & Bad Faith Practice Group
Life, Health & Disability Practice Group
Professional Liability Practice Group
Public Entity & Civil Rights Litigation Practice Group
Real Estate E & O Practice Group
Securities & Investments Professional Liability
Practice Group
Technology, Media & Intellectual Property Practice Group
White Collar Crime Practice Group
HEALTH CARE LIABILITY DEPARTMENT:
Kathleen S. McGrath, Esquire—Director
620 Freedom Business Center, Suite 300
King of Prussia, PA 19406
(610) 354-8255 • Fax (610) 354-8299
E-Mail: ksmcgrath@mdwcg.com
Health Law Practice Group
Health Care Liability Practice Group
Long-Term Care Practice Group
WORKERS’ COMPENSATION & EMPLOYMENT PRACTICES DEPARTMENT:
Peter S. Miller, Esquire—Director
(215) 575-2610 • Fax (215) 575-0856
E-Mail: psmiller@mdwcg.com
Surveys of the nation’s largest firms consistently show our firm to be a leader in minority hiring and advancement.
Our continued dynamic growth and the expansion of our client base constitute the best evidence that we are
effectively meeting our clients’ business needs and expectations. We are very proud of our success. We will strive
to continue to be part of yours.
Vol. 16, No. 4
December, 2010
Page 28
Defense Digest
ABOUT OUR PUBLICATION
Our experience confirms that effective risk and claims management must be founded upon timely information.
Our firm is dedicated to prompt, informative reporting to our clients.
This publication is offered to furnish our views on current court decisions and other matters that may be of
interest to our clients on a variety of topics not specifically related to any particular claim. This publication is provided
free of charge and without a professional relationship to any particular person, entity, or claim. The views expressed are
those of the authors and are not to be construed or used as professional advice.
Our firm welcomes inquiries, comments, and suggestions regarding this publication or other questions, which
may be directed to:
Peter S. Miller, Esquire
Chairman & COO
1845 Walnut Street
(215) 575-2610
email: psmiller@mdwcg.com
Thomas A. Brophy, Esquire
President & CEO
1845 Walnut Street
(215) 575-2748
email: tabrophy@mdwcg.com
Philip B. Toran, Esquire
Chairman, Executive Committee
1845 Walnut Street
(215) 575-2813
email: pbtoran@mdwcg.com
Defense Digest is also available online at www.marshalldennehey.com.
Our other newsletters, Law Alerts and What’s Hot in Workers’ Comp, are also available on the Publications
Page on our web site.
If you would like to receive your copy of any of our newsletters via e-mail, or if you would like to be
removed from our mailing list, contact tamontemuro@mdwcg.com with your information.
This newsletter is prepared by Marshall, Dennehey, Warner, Coleman & Goggin to provide information on recent legal
developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or
to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these
and other subjects when called upon.
Defense Digest is published by our firm, which is exclusively a defense litigation law firm with over 400 attorneys working out of 19
offices in the states of Pennsylvania, New Jersey, Delaware, Ohio, Florida, and New York. In some jurisdictions this publication may be considered attorney advertising.
Copyright © 2010 Marshall, Dennehey, Warner, Coleman & Goggin, all rights reserved. No part of this publication may be
reprinted without the express written permission of our firm. For reprints or inquiries, contact marketinghelp@mdwcg.com. If you
wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.
A T T O R N E Y S - A T - L AW
MARSHALL, DENNEHEY, WARNER, COLEMAN
A DEFENSE LITIGATION LAW FIRM
PA • NJ • DE • OH • FL • NY
Vol. 16, No. 4
December, 2010
&G
OGGIN

Complete Defense Digest

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