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Tenth Circuit allows Utah continued control of trust property held by Warren Jeffs and polygamist sect.

April 29, 2011 by Jodie L. Hill

In recent years, Warren Jeffs, incarcerated leader of the Fundamentalist Church of Jesus Christ of Latter-Day Saints, has been charged with bigamy, sexual assault, and rape in multiple states. The $110 million trust for the polygamist sect owns more than 700 houses, farms, dairies, and other businesses on land in two communities along the Arizona-Utah border. Several entities have sued the trust as an accomplice to Jeffs, and Utah intervened in the trust amid claims of mismanagement stemming from the alleged crimes of Jeffs.

A federal trial court entered an order returning control of the trust, including financial and property records and all of the trust’s assets, to the Fundamentalist Church of Jesus Christ of Latter-Day Saints. Then a state trial court filed a motion with the Tenth Circuit Court of Appeals, requesting a stay of the first order. The Tenth Circuit agreed and indefinitely stayed that order, halting the return of control of a $110 million trust to the polygamist sect.

For the full story, click here.

Posted in Practice & Procedure, Property Law, Trusts & Estates | Tagged | Leave a Comment »

Utah Supreme Court holds that reference to large verdict in McDonald’s coffee case unreasonably influenced jury.

April 21, 2011 by Jodie L. Hill

Kerry Christensen drove a truck that hit John Boyle in the crosswalk of a grocery story parking lot. Boyle, a former professional golfer, underwent back surgery after the accident and lost his job at a golf shop because he cannot carry two buckets of golf balls at a time. Christensen admitted liability, and the case went to trial to determine damages. In closing arguments, Christensen’s lawyer said the following:

Ladies and gentlemen, they want a lot of money for this. A lot of money. . . . How many days has it been since the accident? How many days for the rest of his life? And how much per day is that worth? That’s what’s been done here. That’s how we get verdicts like in the McDonald’s case with the cup of coffee.

In that case, Liebeck v. McDonald’s, a jury awarded $2.7 million in punitive damages to a woman who was scalded by hot coffee. Boyle’s attorney objected to the reference, but the trial court allowed it.

On appeal, Boyle argued that the cultural reference unduly prejudiced the jury, which subsequently awarded him $62,500 – far short of the $458,724 he sought for pain and suffering. The Utah Supreme Court and reversed and remanded the case for a new trial:

We reverse and remand for a new trial because under the circumstances, the reference had a reasonable likelihood of influencing the jury verdict to Mr. Boyle’s detriment.

The court noted that a new trial is an “extreme remedy,” but stated that, without the reference, there was a reasonable likelihood of a more favorable outcome for Boyle.

For the full story, click here.

Posted in Torts | Tagged | 1 Comment »

Seventh Circuit agrees that employee cannot sue for religious discrimination after she was fired for telling a lesbian co-worker that she would go to hell.

April 8, 2011 by Jodie L. Hill

In September 2005, Tanisha Matthews, an overnight stocker at Wal-Mart for nine years, became involved in an impassioned discussion about God and homosexuality with a lesbian co-worker named Amy during a break. When Wal-Mart officials investigated the incident, they learned that Matthews screamed at Amy that God does not accept gays, that gays should not "be on earth," and that they will "go to hell" because they are not "right in the head." After the three-month investigation, Matthews was fired for violating Wal-Mart’s Discrimination and Harassment Prevention Policy, which prohibits employees from harassment based on an individual’s status, including sexual orientation.

Matthews sued Wal-Mart, arguing that Wal-Mart fired her for stating her religious belief that gays will go to hell, which she maintains is central to her Apostolic-Christian faith. If perceived harassment had really spurred Wal-Mart’s action, Matthews said the company would not have let her continue working with Amy for the next three months during the company’s investigation. The trial court granted summary judgment to Wal-Mart, finding no evidence that similarly situated employees had received different treatment.

On appeal, the Seventh Circuit Court of Appeals affirmed the decision, noting the following:

Wal-Mart fired [Matthews] because she violated the company policy when she harassed a coworker, not because of her beliefs, and employers need not relieve workers from complying with neutral workplace rules as a religious accommodation if it would create an undue hardship.               

For the full story, click here.

Posted in Civil Rights, Employment Law, First Amendment | Tagged | Leave a Comment »

Ninth Circuit holds that California’s air-quality rules for ships near its ports are not pre-empted by the Submerged Lands Act.

March 29, 2011 by Jodie L. Hill

In 2009, the Pacific Merchant Shipping Association (“PMSA”) sued the head of the California Air Resources Board over the state’s Vessel Fuel Rules, which require ships to use cleaner fuels within 24 miles of the coast as they move through the state’s busy ports. The PMSA argued that the regulations were pre-empted by the federal Submerged Lands Act (“SLA”). The PMSA filed a motion for summary judgment on its pre-emption claim, but the trial court denied it.

On appeal, the Ninth Circuit Court of Appeals unanimously affirmed that decision. The court noted that the rules amount to an "expansive and even possibly unprecedented state regulatory scheme," but found that California has a right to mitigate its environmental problems, which "are themselves unusual and even unprecedented." Although the regulations will likely cost the shipping industry some $1.5 billion through the end of the 2014, the court stated that California had “clear justification” for the rules:

It appears uncontested that ocean-going vessels have long been a leading source of air pollution in California, due in large part to the widespread use of low-grade bunker fuel.

The court referenced data showing that ocean-going vessels traveling within 24 nautical miles of the California coast spew about 15 tons of diesel particulate matter per day, as well as 157 tons of nitrogen oxides and 117 tons of sulfur oxides. The vessel fuel rules are expected to significantly reduce such harmful emissions and "should prevent, between 2009 and 2015, approximately 3,500 premature deaths and nearly 100,000 asthma attacks as well as reduce cancer risks."

The court noted that, while the SLA granted states the rights to all of their coastal lands within 3 nautical miles of the continent, other courts have rejected challenges to state laws despite the 3-mile regulatory limit:

Applying this effects test to the vessel fuel rules, we conclude that there are genuine issues of material fact with respect to both the effects of the fuel use governed by California’s regulations on the health and well-being of the state’s residents as well as the actual impact of these regulations on maritime and foreign commerce.

Accordingly, the court remanded the case back to the trial court for further proceedings.

For the full story, click here.

Posted in Constitutional Law, Environmental Law | Tagged , , | Leave a Comment »

Arkansas Court of Appeals explains dominance necessary in confidential relationship to give rise to presumption of undue influence.

March 22, 2011 by Jodie L. Hill

Thorn v. Pierson, No. CA10-229.

In 2002, Noble Vance Pierson was a woman in her seventies with a sizable estate and three children, Dale, Leslie, and Sandra. One of the brothers, Leslie, lived in a trailer on Mrs. Pierson’s three-acre home property, and she intended that he should receive that property upon her death. Mrs. Pierson told her daughter, Sandra Thorn, that she wished to have her real property settled and divided. Sandra suggested that she purchase the land for $100,000, which would constitute Dale’s share of the property. Mrs. Pierson agreed and later signed a deed to that effect. The purchase price of $100,000 was placed in a certificate of deposit to be given to Dale upon Mrs. Pierson’s death.

At some point later, Mrs. Pierson sued Sandra to have the deed cancelled. At trial, Mrs. Pierson testified that she did not have a good understanding of legal issues and relied upon her daughter to help her with them. The trial court found that Sandra was the dominant party in a confidential relationship with her mother. Under Arkansas law, this gave rise to a rebuttable presumption that Sandra had used undue influence to procure the deed. The trial court then found that there was insufficient evidence to overcome the rebuttable presumption and cancelled the transaction.

On appeal, the Arkansas Court of Appeals noted that Mrs. Pierson testified at trial that (1) she was an independent woman, (2) she handled her own affairs, (3) she negotiated the purchase of her SUV, and (4) she was familiar with real estate transactions, easements, and leases of mineral rights. The court further noted that Mrs. Pierson corrected an attorney regarding a bequest in her will. She noted the bequest was not merely to her son, but also to “the heirs of his body.” That court stated that this understanding showed Mrs. Pierson was not compelled to rely on her daughter in legal matters.

Accordingly, the court held that (1) Sandra was not the dominant party in a confidential relationship and (3) she did not procure the deed by the exercise of undue influence.

Posted in Contract Law | Tagged , | Leave a Comment »

Ninth Circuit upholds $250,000 verdict against debt-collection firm for emotional distress.

March 7, 2011 by Jodie L. Hill

Tim McCollough sued Johnson, Rodenburg & Lauinger, a debt-collection law firm, for pursuing his credit card bet after the statute of limitations had expired. McCollough claimed that he and his wife fell behind in paying their credit card bills after he suffered a brain injury while working as a school custodian and his wife underwent surgery. He stopped making payments on his account with Chase Manhattan Bank in 1999 when there was an unpaid balance of about $3,000. In 2005, another debt-collection agency sued McCollough, but the lawsuit was dismissed because the five-year statute of limitations had already expired.

Johnson, Rodenburg & Lauinger then became involved and were incorrectly informed that McCollough had paid $75 on his account in 2004, effectively resetting the clock to run through 2009. The 2004 activity was not a payment; however, it was the return of court costs to the other debt-collection agency for an earlier attempt to pursue McCullough’s debt. No one at Johnson, Rodenburg & Lauinger requested documentation of the activity. Instead, the firm simply sued McCullough in 2007 for about $10,000. In his pro se answer to the complaint, McCullough again wrote that the statute of limitations had expired:

FORGIVE MY SPELLING I HAVE A HEAD INJURY AND WRITING DOSE NOT COME EASY. THE STACUT OF LIMITACION’S IS UP, I HAVE NOT HAD ANY DEALINGS WITH ANY CREDITED CARD IN WELL OVER 8½ YEARS.

McCullough eventually retained a lawyer, and Johnson, Rodenburg & Lauinger dismissed the suit with prejudice. He then filed suit against the firm, claiming it had violated the federal and state fair debt laws, as well as state torts of malicious prosecution and abuse of process. A Montana jury ordered Johnson, Rodenburg & Lauinger to pay Tim McCollough $250,000 in damages for emotional distress. The trial court refused to reduce the award or give Johnson, Rodenburg & Lauinger a new trial.

On appeal, the Ninth Circuit Court of Appeals found that Johnson, Rodenburg & Lauinger filed an average of five collection lawsuits a day in Montana between January 2007 and July 2008, which amounted to about 2,700 total. On one day, the North Dakota firm filed 40 lawsuits. About 90% of the firm’s suits end in a default judgment. The court affirmed the trial court’s ruling, noting that the
firm’s error was its own to prevent.

For the full story, click here.

Posted in Consumer Protection, Contract Law, Practice & Procedure | Tagged , | Leave a Comment »

Tenth Circuit refuses to lower sentence for scrub tech convicted of stealing pain medication from patients and infecting them with Hepatitis C.

February 25, 2011 by Jodie L. Hill

Kristen Parker tested positive for hepatitis on her first day of work in 2008 as a "scrub tech" for Rose Medical Center in Denver, Colorado. She noted she probably contracted the disease by sharing heroin needles, a practice that developed with a prescription for painkillers after jaw surgery in 2001. While Parker worked at the hospital, she repeatedly stole fentanyl from operating room anesthesia carts, injected the painkiller into her system with syringes, and returned the used syringes to the carts. Fentanyl is a powerful, synthetic, opioid painkiller 80 to 100 times stronger than morphine. Parker was fired after testing positive for the drug in March 2009. She used similar tactics to get drugs at the next hospital that hired her, the Audubon Surgical Center in Colorado Springs.

Around that time, the Colorado Department of Health began investigating an outbreak of Hepatitis C. After Parker was indicted in August 2009, her former employers contacted about 6,000 patients who could have been exposed to Parker’s strain of hepatitis C. Genetic testing of 17 patients who tested positive for the disease showed a 97% chance that their strain was genetically linked to Parker’s.

At Parker’s sentencing hearing, the judge rejected her plea bargain and sentenced her to 30 years imprisonment, instead of the 20 recommended in sentencing guidelines. The judge noted the following:

The repeated theft and abuse of fentanyl, one of the most puissant drugs on the planet for selfish, personal gratification to get high while exposing so many innocent, unsuspecting, undeserving people to this insidious and incurable disease is as incomprehensible as it is unconscionable. She finally and thankfully got caught.

Parker appealed the sentence, calling it unreasonable and an abuse of discretion. The Tenth Circuit Court of Appeals, however, upheld the order, stating that the sentence was reasonable in light of all the circumstances. The court further noted that “. . . Parker’s crime stands out as particularly repugnant. [She] displayed a callous disregard for human suffering. By stealing fentanyl from operating carts, Parker deprived surgical patients of needed anesthesia. At least one of her victims awoke mid-surgery in severe pain."

For the full story, click here.

Posted in Criminal Law, Health Law | Tagged | 1 Comment »

Arkansas Supreme Court holds that attorney discharged for cause is entitled only to reasonable value for her services.

February 16, 2011 by Jodie L. Hill

Harrill & Sutter, PLLC v. Kosin, No. 10-518.

Facts

Cynthia Kosin’s husband, John Robert Kosin, died in March 2003. At the time of his death, Mr. Kosin resided in Arkansas, his estate included properties and business interests in several states, and he has numerous tax difficulties. Under the will, Mrs. Kosin was to receive (1) all of her husband’s household property and personal effects, (2) annual payments of $525,000 for life, and (3) a life estate in their Hot Springs home. The will provided several other bequeathed gifts to friends and left the remainder of the estate to St. Luke’s Episcopal Church. The will named Stephen Butler of Virginia as executor of the will and trustee of the estate. Melanie Grayson of Arkansas was later appointed as administratrix of the Arkansas estate.

On May 23, 2003, Mrs. Kosin engaged Raymond Harrill to represent her in regard to her rights to inherit from her husband’s estate. Because of the complexity of Mr. Kosin’s estate, Harrill requested the assistance of his partner, Luther Sutter. Mrs. Kosin entered into a contingency-fee agreement under which the firm was to receive either (1) 20% of the gross amount recovered from the estate through settlement or (2) 30% if a lawsuit was necessary.

From June 2003 through July 2005, Sutter requested information from Butler, attempting to obtain a complete financial picture of Mr. Kosin’s companies. On November 11, 2003, Butler informed Sutter by letter that he had entered into a contract to sell Mr. Kosin’s businesses for $39.4 million with a contingency clause that allowed Butler to be released if he deemed the sale inadequate. Butler also provided Sutter with an appraisal of the Hot Spring home, which indicated a value of $2.9 million. Butler indicated he would be willing to settle Mrs. Kosin’s interests if she sold the home. Under this offer, Mrs. Kosin would retain the proceeds of the sale free of Mr. Kosin’s estate less (1) the expense of the sale, (2) settlement with St. Luke’s, (3) payment of any indebtedness or taxes for the home, and (4) payment of the expenses of the administration of the Arkansas estate. The offer would likely have resulted in Mrs. Kosin receiving in excess of $1 million.

Sutter forwarded a copy of Butler’s November 11, 2003, letter, but did not explain the terms of the offer. In September 1, 2004, Mrs. Kosin retained Friday, Eldredge & Clark. After learning this, Sutter advised Mrs. Kosin of the $1 million settlement offer and noted that he learned of the offer from Grayson instead of Butler. Later that month, Mrs. Kosin discharged Harrill & Sutter.

On February 10, 2006, Harrill & Sutter filed suit to enforce an attorney’s lien to protect its claim for attorney’s fees and services rendered on behalf of Mrs. Kosin. The firm alleged that Mrs. Kosin breached the contingency-fee agreement and requested $75,000. Mrs. Kosin responded that she was justified in terminated the attorney-client relationship. After the sale of the Hot Springs home, Mrs. Kosin deposited $225,000 into a bank account pending resolution of the case.

After a bench trial, the trial court ruled that Mrs. Kosin discharged Harrill & Sutter for cause. Because Mrs. Kosin agreed that (1) Harrill & Sutter had provided valuable services for her benefit until November 19, 2003, and (2) those services and fees equaled $55,775.44 (based on Harrill & Sutter’s itemized professional services invoice), the trial court awarded Harrill & Sutter that amount pursuant to a quantum-meruit recovery. The trial court further ordered Harrill & Sutter to received 25% of the interest accumulated on the $225,000 sum since it was deposited.

Appeal

The Arkansas Supreme Court noted that attorney-client contracts contain an implied provision allowing the client to discharge the attorney at any time, with or without cause. If the attorney is discharged without cause, he is to be compensated based upon the terms of the fee agreement. If the attorney is discharged with cause, her compensation is determined by quantum meruit. Although there is no bright-line rule for determining whether a client has discharged an attorney with cause, the court held that the trial court did not err in finding that Mrs. Kosin discharged Harrill & Sutter for cause. The court then held that the $55,775.44 award was reasonable based on Harrill & Sutter’s time and services.

Posted in Contract Law | Tagged , , | Leave a Comment »

Sixth Circuit allows civil rights suit of former inmate against deputy for failure to protect against sexual assault.

February 8, 2011 by Jodie L. Hill

At nineteen, Russell Bishop spent about a month in the Macomb County, Michigan jail on charges of assault with intent to murder. Bishop had a history of mental illness, and his temporary cell assignment form noted that he (1) was of small build, (2) was unable to understand questions, (3) exhibited angry or hostile and bizarre behavior, and (4) appeared anxious or afraid, depressed, confused, and unusually embarrassed. Bishop was housed in the jail’s mental health unit with another inmate, Charlie Floyd, a forty-four-year-old who had been charged with multiple counts of criminal sexual conduct. Nearly three years after his confinement, Bishop sued several jail employees, claiming they did nothing to stop Floyd from sexually abusing him even after he reported repeated assaults. Defendants sought summary judgment for qualified immunity, but the trial judge denied the motion as to four jail deputies, finding that they did not qualify for immunity because they purposefully ignored Bishop’s pleas for help.

The four deputies appealed to the Sixth Circuit Court of Appeals, but the court granted immunity only to three of the deputies, noting:

We have recognized that a prison official may be held to be deliberately indifferent to a substantial risk to inmate safety if he is aware that an inmate is vulnerable to assault and fails to protect him.

The court stated that Bishop failed to specifically identify any deputy to whom he reported Floyd’s abuse or to prove that any deputy other than Deputy James Stanley had enough personal contact with him to be subjectively aware of his vulnerability to attacks or the abuse that he alleges he was suffering. The court found that "Stanley was aware of Bishop’s personal characteristics because he testified that he talked to Bishop quite often on his rounds." The court then found that Stanley could have been aware that Bishop belonged to a class of prisoners particularly vulnerable to sexual assault. Accordingly, the court reversed the trial court’s denial of qualified immunity to three of the deputies, but upheld the decision against Stanley.

For the full story, click here.

Posted in Civil Rights | Tagged , , | Leave a Comment »

Ninth Circuit joins other circuits in holding that Levine applies to generic drug manufacturers.

January 25, 2011 by Jodie L. Hill

After A.G., a minor, had two benign moles removed in 2004, his doctor gave him a prescription for ibuprofen. His parents, the Gaetas, bought an over-the-counter generic ibuprofen manufactured by Perrigo Pharmaceuticals (“Perrigo”). Later, A.G. developed a high fever and had to be rushed to the hospital and treated for liver failure. A.G. needed a liver transplant less than two weeks after the mole surgery and later had dead tissue from his fingers and toes amputated. Doctors determined that the ibuprofen had clashed with the anesthetic Halothane, which had been administered during the mole-removal surgery. Halothane is hepatotoxic or known to cause liver failure in some circumstances.

The Gaetas sued Perrigo and other manufacturers of generic ibuprofen, alleging defective design, defective marketing, breach of express and implied warranties, negligence and gross negligence, and deceit by concealment. The Gaetas claimed that Perrigo failed to warn doctors and consumers that ibuprofen could cause liver injury if mixed with other drugs. In response, Perrigo argued that the Gaetas’ state-law failure-to-warn claims were preempted by the labeling and marketing regulations of the Food and Drug Administration (“FDA”) governing generic drugs. The trial court agreed, concluding that since federal law required generic drugmakers to conform to the approved labeling of brand-name drugs, Perrigo could not have changed its labeling without violating federal law.

The Gaetas appealed the decision to the Ninth Circuit Court of Appeals. While the appeal was pending, the United States Supreme Court issued its opinion in Wyeth v. Levine, holding that approval of medication by the FDA does not shield a manufacturer of brand-name medications from liability under state law. After Levine, the Gaetas won a limited remand from the Ninth Circuit so that the trial court could reconsider its decision with the Supreme Court ruling in mind. The trial court denied the motion for reconsideration, however, and ruled that the high court’s decision only applied to brand-name drug manufacturers.

The Gaetas again appealed the trial court’s decision. With its holding, the Ninth Circuit joins the Fifth and Eighth Circuits in applying Levine to generic drugs as well. The court noted that (1) manufacturers are primarily responsible for warning consumers about possible drug dangers because they have better access to information about their products than the FDA, and (2) there is nothing in Levine that limits this responsibility to brand-name drug manufacturers. The court stated that both sets of manufacturers must take specific steps when they learn of new risks associated with their products. Finally, the court concluded that compliance with both state and federal law was not “impossible.” Accordingly, the court remanded the case to the trial court for further proceedings.

For additional information, click here.

Posted in Consumer Protection, Health Law, Medical Malpractice | Tagged , , | Leave a Comment »

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