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Monthly Archives: May 2009

Mold experts not ready for prime time

Sometimes you just have to wonder how a case ever made it before a jury.

Take the case of Darcee Dee.


The Los Angelino lived in the Mammoth Park Apartments for four and a half months.


During that time (she claims) she was exposed to molds capable of producing mycotoxins, which in turn (allegedly) caused her to suffer from a laundry list of ailments ranging from fibromyalgia to dementia. The mycotoxin also (supposedly) increased her risks of various forms of cancer, which naturally causes her emotional distress.


So Darcee sues the apartment owners for allowing mold to contaminate her apartment. And she has three experts ready to testify that exposure to mycotoxins has caused her health to deteriorate.


Two big problems.


One, testing failed to show the presence of mycotoxins in the apartment at the time she lived there.


Two, medical tests purportedly showing Darcee suffered from the effects of mycotoxin exposure are not generally accepted by the medical community.


To no one’s surprise, the trial judge boots Darcee’s experts and a jury renders a defense verdict.


As the California Court of Appeal succinctly observed, the experts “sought to testify that Dee’s exposure to mycotoxins caused her symptoms and her susceptibility to cancer without any evidence that Dee was exposed to mycotoxins. [The experts’] opinions relied on an incorrect premise, and thus their opinions lacked evidentiary value.” (Dee v. PCS Property Management)   


— Pat Murphy


Plaintiff’s smoking habit nixes recovery for back injury

Back injuries are notoriously tricky, both for those who suffer them and lawyers who must prove their existence and causes.

The 10th Circuit just today decided an interesting case involving a plaintiff whose smoking habit upset her plans to collect damages from an automobile accident.


In Neiberger v. Fed Ex Ground Package System, misfortune piled upon misfortune when Penni Neiburger was injured in a Colorado automobile crash after she had back surgery.


In order to recover for personal injury under the state’s no-fault statute, Penni needed to show that the failure of her spine to heal following the preaccident surgery was due to the crash.


But the defense had an ace up its sleeve, producing an expert witness who testified that the failure of the plaintiff’s spine to heal was probably due to her smoking habit, rather than the accident.


Needless to say, Penni’s attorney wanted this evidence booted from the trial.


The 10th Circuit rejected the Daubert challenge, concluding that the district judge rightly admitted the evidence given that the plaintiff’s own doctor warned her not to smoke and the medical literature supported the thesis that smoking inhibited spinal fusion.     


— Pat Murphy


D.C. Circuit: Big Tobacco deceived smokers

Big Tobacco took another hit today when the D.C. Circuit upheld a federal judge’s ruling that the nation’s top cigarette makers for years engaged in a racketeering enterprise to deceive the public about the health hazards of smoking.

“The district court found — permissibly in our view — that the enterprise had the common purpose of obtaining cigarette proceeds by defrauding existing and potential smokers,” the court said in a per curiam opinion in U.S. v. Philip Morris USA.


Today’s ruling upholds most of a lower court decision finding tobacco companies liable for civil RICO violations and ordering the companies to stop labeling cigarettes as “low tar,” “light,” “ultra light” or “mild.” See  “Judge holds cigarette makers violated racketeering laws,” Lawyers USA, Aug. 28, 2006.


According to Bloomberg News, tobacco companies complain that decision will cost the industry hundreds of millions of dollars and “fundamentally alter the business landscape.”


It’s been a rough week for the tobacco industry.


On Monday, the California Supreme Court reinstated a consumer class action seeking to hold Big Tobacco liable for false advertising under the state’s unfair competition law.


— Pat Murphy


Banks can’t be sued for foreclosure crisis

The crisis in the housing market has left vacant homes scattered throughout the country’s neighborhoods.

Urban areas are the hardest hit, with foreclosure notices tearing at the fabric of already fragile communities.


The city of Cleveland, Ohio, claims that the epidemic of foreclosures, apart from eroding its tax base, has burdened it with the added cost of protecting the public from the hazards posed by the increasing stock of vacant homes.


And, according to the city, the foreclosure crisis is directly related to the risky lending practices of Wall Street investment banks that brought on the subprime crisis.


But can those banks be made to pay for allegedly bringing about foreclosures that saturate and ruin city neighborhoods?


One federal judge says no, rejecting a Cleveland lawsuit that sought to hold many of the country’s largest lenders liable for creating a public nuisance.


Such claims are both preempted by state lending law and barred by the “economic loss” doctrine, according to U.S. District Judge Sara Lioi.


“[W]hile the physical deterioration of foreclosed homes may represent an injury to property sufficient in the abstract to avoid the economic loss rule, the affected properties did not belong to the City when the physical damage allegedly took place. Instead, the City seeks to recover for alleged physical damage to properties it did not own, but that were owned by someone else – i.e., the homeowners that went through foreclosure. The City provides no support for this position, and none exists,” wrote the judge in City of Cleveland v. Ameriquest Mortgage Securities.


Citibank and Wells Fargo were among the corporate giants named in the suit.


The Plain Dealer reports that Cleveland has already appealed last week’s decision.


— Pat Murphy


Calif. justices reinstate tobacco class action

The California Supreme Court has breathed new life into a consumer suit against Big Tobacco in a decision that bodes well for the future of class actions in the state.

The court in In re Tobacco II Cases loosened the standing requirement for consumer class actions in the wake of Proposition 64, the 2004 state initiative that limited such suits to plaintiffs who claimed they had lost money or property as a result of a company’s wrongdoing.


The court said that only class representatives need to satisfy the Prop 64 “injury in fact” requirement for a class action to proceed.


The plaintiffs in the case had sued under the state’s unfair competition law, alleging that the tobacco industry had conducted a decades-long campaign of deceptive advertising and misleading statements about the addictive nature of nicotine and the relationship between tobacco use and disease.


A lower court had decertified the class because not all class members could show Prop 64 standing


Today’s decision gives the plaintiffs the chance to demonstrate standing under a more flexible standard.


And that wasn’t the only good news for class-action attorneys.


The court also held that plaintiffs, in showing detrimental reliance, do not need to plead or prove with “an unrealistic degree of specificity” that the plaintiff relied on particular advertisements or statements when the unfair practice is a fraudulent advertising campaign.”


The Los Angeles Times explains that the decision clears the way for consumer class actions that many lower courts in California have been throwing out.


— Pat Murphy






Animal House: Suspended fraternity can’t obtain §1983 relief

The 1978 comedy classic, “National Lampoon’s Animal House,” evokes fond memories of college.

Unfortunately, there can be an ugly reality to fraternity life at wide variance from that portrayed by the loveable John “Bluto” Blutarsky and his compadres.


Take the case of the Iota Xi Chapter of Sigma Chi Fraternity at George Mason University in Virginia.


The university revoked its recognition of the fraternity until at least 2016 after finding several serious incidents of misconduct.


Apart from the unsurprising charge of allowing underage drinking, the school found that two female guests had been sexually assaulted at parties sponsored by fraternity. In addition, the school concluded that the fraternity engaged in hazing that one official characterized as amounting to kidnapping.


This dispute came to the courts when the fraternity and two of its members sued for a violation of their constitutional rights.


The 4th Circuit this week upheld a judgment for the school, satisfied that the institution’s disciplinary process adequately provided the fraternity and its members due process, and that the University otherwise “did not deprive the Chapter members of any free association right.” (Iota Xi Chapter of Sigma Chi Fraternity v. Patterson)


— Pat Murphy




A cautionary tale: Employer liable for defamation

How should an employer proceed when an employee is suspected of theft?

Very carefully, says the Connecticut Supreme Court.


Yesterday, the court in Gambardella v. Apple Health Care upheld a $224,000 defamation award against a nursing home that had fired Laurie Gambardella after she had taken two chairs from the room of a resident who had died from a heart attack.


According to the court, Gambardella lost her job even though the deceased resident’s relative later confirmed that the woman’s personal property had been left to Gambardella to keep or dispose of as she wished.


The nursing home had a policy against employees receiving gifts from residents, but the facility’s administrator carelessly communicated to others that Gabardella had been terminated due to theft.


In determining that the employer acted with actual malice, the court remarked that it is “axiomatic that a defendant who closes his eyes to the facts before him cannot insulate himself from a defamation charge merely by claiming that he believed his unlikely statement.”


— Pat Murphy


Dillard’s not liable for ‘discriminatory surveillance’

Retailers were handed a big win Monday when the en banc 8th Circuit decided that Dillard’s department store couldn’t be sued for the “discriminatory surveillance” of African-American shoppers.

“Racially biased watchfulness, however reprehensible, does not ‘block’ a shopper’s attempt to contract,” wrote Circuit Judge Steven M. Colloton for the majority in Gregory v. Dillard’s.


The decision upheld the dismissal of a §1981 claim brought by 13 disgruntled Dillard’s customers who accused one of the company’s Missouri stores of having an unwritten policy of closely surveilling black shoppers.


Circuit Judge Diana E. Murphy authored a stinging dissent criticizing the majority’s interpretation of §1981


“Section 1981 does not require as a matter of law that within the context of closing a contract a customer persist in her attempted purchase despite overt racial hostility right up until a merchant flatly denies her service and forcibly ejects her from the premises,” Murphy wrote.


Murphy led the original 8th Circuit panel in the case that had ruled that the shoppers stated a viable cause of action. (See “Black shoppers can sue for discriminatory surveillance,” Lawyers USA, July 30, 2007.)


— Pat Murphy


Fee award is subject to federal debt offset

The Equal Access to Justice Act governs the award of attorney fees in a broad spectrum of actions against the federal government.

But does an award under the Act belong to the claimant or the attorney?


This distinction can be critical because the Debt Collection Improvement Act makes awards against the government subject to an offset for any outstanding amounts owed the country by a claimant.


The issue was starkly presented in a Social Security case recently decided by the 4th Circuit.


In Stephens v. Astrue, the government owed attorney fees to 34 Social Security claimants who had prevailed in various benefit disputes.


The government argued that it could offset the fee payments to cover debts owed to the government by the claimants because the fee awards belonged to the claimants rather than to their attorneys.


To the consternation of the attorneys, the court agreed with the government, observing that the “plain language” of the EAJA provides that attorney fees are payable to the prevailing party — in this case the Social Security claimants — and not the lawyer.


— Pat Murphy


Calif. high court nixes attorney fees in comp case

Is a workers’ compensation claimant entitled to attorney fees when he successfully resists an attempt to terminate payment for his medical treatment?

The California Supreme Court yesterday answered that question in the negative.


Smith v. Workers’ Compensation Appeals Board involved two claimants who obtained awards for future treatment of their workplace injuries.


Their employers’ insurance carrier later disputed their entitlement to the medical treatment at issue.


In response to the termination of payments, the claimants instituted proceedings before the state’s workers’ compensation board in which they demonstrated their right to coverage.


The claimants argued that, based on their success in having benefits reinstated, they were entitled to attorney fees under the state’s workers’ compensation statute.


But the court concluded that an employer or insurer that disputes a specific medical treatment request cannot be said to have “institute[d] proceedings to terminate an award” for the purpose of opening the door to an award of fees.


— Pat Murphy