Category Archives: Trial strategy

Gilbert LLP Convinces Sixth Circuit to Rule in Favor of Asbestos-Containing Product Manufacturer-Policyholders

By Mark Packman and Krishan Thakker

Comprehensive general liability policies limit the amount the insurer has to pay for each “occurrence”, which is typically defined as an “accident” or “exposure to [injurious] conditions”. Insurers and policyholders frequently battle over the number of occurrences that result from asbestos lawsuits and other toxic-tort claims.

Miriam Smolen, a partner at Gilbert LLP, recently won a significant victory for policyholders, convincing the Sixth Circuit that Ohio law treats each asbestos tort claim against a policyholder as arising from a separate “occurrence” for insurance purposes. See LuK Clutch Sys’s, LLC. v. Century Indem. Co., No. 11-4212 (6th Cir. Oct. 11, 2012), aff’g LuK Clutch Sys., LLC v. Century Indem. Co., 805 F. Supp. 2d 370 (N.D. Ohio 2011). The decision delivers a blow to general liability insurers nationwide on the hotly contested issue of number of occurrences.

LuK Clutch (“LuK”) was sued in hundreds of product liability personal injury actions alleging exposure to asbestos-containing automotive clutch products manufactured by a corporate predecessor of LuK. LuK sought coverage under four commercial general liability policies issued by the defendant- insurers over the period from 1985 to 1987. Each of the policies had a per “occurrence” limit. When the defendant-insurers claimed exhaustion of the policies, LuK brought a declaratory judgment action against defendant-insurers and MTD Products, Inc., a joint owner of LuK’s predecessor, for coverage under the policies.

The insurers argued that there was a single occurrence, namely, LuK’s initial decision to use and manufacture asbestos-containing products, and therefore that no coverage remained under the policies. LuK Clutch, 805 F. Supp. 2d at 371, 380. LuK argued there were multiple occurrences i.e. that each individual claimant’s exposure to asbestos-containing products constitutes a separate occurrence. Id. at 371, 377.

Ruling for LuK, the District Court held that the “occurrence” is the exposure to asbestos fibers, and that each asbestos claim arose from a “separate occurrence.” The district court, in rejecting the insurer’s argument that the decision to manufacture asbestos was a single occurrence, reasoned that it is “difficult to characterize a decision to use asbestos in clutch facings as a condition to which the claimants were exposed.” Id. at 378. Additionally, the court said the definition of the term “occurrence” includes the clause, “which happens during the policy period and which result in personal injury.” Id. Since the claimants’ exposure to LuK’s products occurred during the relevant policy periods, it was possible that this exposure “result[ed] in personal injury” to the claimant. Id. Thus, the court reasoned that “it is impossible that a decision made in the 70s took place in 1985 or 1986 and resulted in personal injury.” Id. (emphasis in original).

The court further found the policies’ “Limits of Liability” provisions did not require a “single occurrence” to result, since the relevant part of that provision stated that “all bodily injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence.” Id. at 373, 380. In addition to analyzing the policies’ language, the court adopted the so-called “cause test,” which holds that the number of occurrences is equal to the number of causes of the policyholder’s tort liability. Id. at 380-381. Accordingly, the court held that each asbestos claim arising from an individual claimant’s “continuous and repeated exposure” to LuK’s asbestos-containing products constituted a separate, “single occurrence.” Id. at 381. Significantly, the court also noted the underlying complaints alleged exposure with differing injuries in different places, at different times, under different circumstances. Id. at 380-381.

The Sixth Circuit, after oral argument, issued a one-sentence order stating “that the judgment of the district court be, and it hereby is, affirmed upon the opinion of the district court for the reasons stated in open court.” LuK Clutch Sys’s, LLC. v. Century Indem. Co., No. 11-4212 (6th Cir. Oct. 11, 2012).

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Skirmishes Over Use of Social Media in Litigation Continue to Intensify

By Barry Buchman and Emily Grim

Since our prior two posts on the issue, there have been several developments showing that questions about the proper use of social media in litigation continue to abound.  These developments demonstrate that practitioners who fail to stay on top of the latest developments in this area – both in terms of the potential appropriate and beneficial uses of social media and the potential risks associated with this medium – do so at their peril.

Most recently, a plaintiff in a personal injury case received a reduced award from a jury after the defendant introduced, at trial, certain of the plaintiff’s Twitter messages, which discussed traveling and partying after the car accident at issue.  See Mark Niesse, Twitter Sunk Woman’s Award after Car Crash, N.J. Law Journal (Jan. 2, 2013).  This outcome follows a similar case, in which a judge reduced a monetary judgment awarded to a man who sued over the death of his wife in an accident, after the court learned of a post-accident Facebook photo that showed the man wearing a garter belt on his head and a t-shirt with the phrase “I love hot moms” on it.  See Zach Winnick, Social Media an Ethical Minefield for Lawyers, Law360 (Apr. 13, 2012).

The takeaway from these cases is that attorneys need not only to monitor the social media postings of potential clients before taking a case; they also need to continue vigilant monitoring of posting after the representation begins.  Attorneys also should urge caution to their clients about what they post on social media sites.

Courts also continue to grapple with the extent to which parties can obtain formal discovery of an adverse party’s social media information.  As we noted in our last post on the issue, courts generally have been receptive to such discovery requests.  See Barry Buchman and Emily Grim, Recent Ethics Charges Against Attorneys Demonstrate Need for Full Understanding of “Do’s and Don’ts” of Using Social Media, We’ve Got You Covered – Insurance Law Blog (Sept. 11, 2012) (citation omitted).  But, in a recent decision in an employment discrimination case, a federal magistrate judge ruled that the bulk of the defendant’s request for social media discovery was too broad.  Although the judge granted a portion of the discovery request, the decision did take a narrower view of permissible discovery in this area than certain prior decisions.  See Abigail Rubenstein, Courts Struggle to Lay Out Social Media Discovery Limits, Law360 (Sept. 20, 2012).

Finally, courts continue to crack down on improper juror use of social media during trials.  Just as jurors cannot go to an accident or crime scene during a trial without court supervision, or give interviews about a trial while it is ongoing, jurors likewise cannot conduct online research about a case during trial, or exchange “Tweets” with reporters about it.

The potential negative impact on the judicial system of such improper juror behavior is very significant.  In three recent high profile cases, a juror’s comments about proceedings on Facebook and Twitter put verdicts in jeopardy and generated debate over the best way to protect the impartiality of judicial proceedings in the age of social networking.  See Juror Number One v. Superior Court, 206 Cal. App. 4th 854 (Cal. Ct. App. 2012) (requiring juror to turn over, for private review by the court, comments that he made on Facebook regarding criminal trial in which he had served as juror, after comments were discovered post-verdict); Dimas-Martinez v. State, 2011 WL 6091330, at *16-*17 (Ark. Dec. 8, 2011) (overturning conviction and corresponding death sentence after juror continued to post comments about case on Twitter even after court instructed him to cease such activity); U.S. v. Fumo, 655 F.3d 288, 305 (3d Cir. 2011) (declining to overturn conviction for fraud, tax evasion, and obstruction of justice despite juror’s posts about the anticipated timing of the verdict on Facebook and Twitter, but acknowledging potential for such communications to undermine the impartiality of trial proceedings and encouraging district courts to instruct jurors as to such dangers).

Courts have attempted to crack down on such misconduct by confiscating jurors’ mobile devices at the start of each day, requiring jurors to sign a pledge to refrain from using social media at trial, or, in some cases, imposing fines or removing jurors from the panel.  Most recently, in response to a national survey of federal trial judges showing growing concern regarding juror misuse of social media, the federal judiciary released new model jury instructions explaining the dangers of social media use and prohibiting jurors from communicating about a case via cell phone, email, blogs, or social media sites such as Twitter, Facebook, or YouTube.  Significantly, these model instructions urge jurors to turn in other jurors who disregard these prohibitions.

Likewise, lawyers also can take an active role in identifying and preventing incidents of juror misconduct.  As we discussed in a previous post, ethical and legal authorities agree that a lawyer may view a juror’s publicly-available online content during trial, as long as the juror does not become aware that the lawyer is monitoring them.  See Barry Buchman and Emily Grim, How Far Can Lawyers Go in Researching Jurors on Social Media Sites, We’ve Got You Covered – Insurance Law Blog (July 11, 2012), quoted in Advice to Lawyers: Look But Don’t ‘Friend’ Potential Jurors, Wall Street Journal Law Blog (July 12, 2012).  Indeed, at least one ethics panel has found that if a lawyer learns that a juror is engaging in misconduct, such as tweeting or blogging about the case during trial, the lawyer must promptly bring that information to the court’s attention.  See N.Y. Co. Law. Assoc. Comm. on Prof. Ethics, Formal Op. No. 743 (May 18, 2011).

Recent Ethics Charges Against Attorneys Demonstrate Need for Full Understanding of “Do’s and Don’ts” of Using Social Media As Litigation Tool

By Barry Buchman and Emily Grim

As we discussed in an earlier post regarding the use of social media to research potential jurors, the information available through social media can be a potent litigation tool. 

Indeed, far from being limited to a juror-research device, practitioners in the insurance realm and beyond are now using social media sites as a potential source of impeachment material for use against opposing parties or witnesses.  For example, counsel for an insured might attack the credibility of the insurer’s expert witness with evidence from Facebook or LinkedIn of the witness’s past professional or personal affiliation with the insurer or a competitor of the insured. 

 But, as recent ethics charges filed against two attorneys demonstrate, using social media in this fashion presents serious ethical considerations, just as it does when used for juror research.  As a result, it is essential that attorneys learn the boundaries of social media use and stay within them.  See M. Gallagher, Hostile Use of ‘Friend’ Request Puts Lawyers in Ethics Trouble, N.J. Law Journal (Aug. 30, 2012).

As with social media research in the juror context, there is little precedent on the ethical aspects of this issue, but the authority that does exist is in general agreement that lawyers can access publicly-available online information of any party or witness, even if the party or witness is represented.  The rationale is that if the online information is publicly-available (such as a public Facebook profile), it is no different than if the party or witness had published an article in print or online media.  See, e.g., N.Y. State Bar Assoc., Comm. on Prof. Ethics Op. No. 843 (Sept. 10, 2010).

As with jurors, however, the authorities also generally agree that lawyers may not seek to access non-public portions of a represented person’s social media accounts.  Moreover, also as with jurors, a lawyer may need to cease viewing even the publicly-available portions of these social media accounts if the represented party or witness learns that the lawyer is monitoring their online activity, as continued monitoring could be viewed as an attempt to intimidate or harass the party or witness.  Practitioners should be particularly mindful of this issue when searching sites such as LinkedIn, which show users the names of other site members who have viewed their profile.  And, lawyers who delegate this type of online research to paralegals or other non-lawyers should understand and convey these boundaries, as pleading ignorance of precisely how the research could be and was being conducted is risky.

Although a lawyer cannot seek to communicate directly with represented parties or witnesses by, for example, attempting to “friend” them on Facebook, a lawyer may do so with unrepresented parties and witnesses, but only if the lawyer does not use deception to obtain the online connection.  Most of the ethics opinions to address this issue have stated that the attorney must disclose both her true identity and the reasons for her connection request; i.e., the lawyer must not suggest that she is disinterested.  See, e.g., San Diego County Bar Assoc., Legal Ethics Comm. Op. No. 2011-2 (May 24, 2011).

Practitioners also can avoid the ethical risks associated with using social media to obtain informal discovery of parties and witnesses by serving requests for formal discovery of those persons’ online information.  For example, lawyers can serve direct discovery requests on other parties to the case or serve subpoenas on third-party witnesses.  Lawyers also may be able to subpoena social media providers to obtain information about a particular individual’s online accounts.  Courts generally have been receptive to such discovery requests.  See, e.g., Loporcaro v. City of New York, 2012 WL 1231021 (N.Y. Sup. Ct. Apr. 9, 2012).

Social media research in litigation can offer significant tactical benefits, but it also presents ethical risks.  Thus, it is important for practitioners to stay abreast of the law in this area, particularly given its rapid and continuing evolution.  Among other things, lawyers should know all pertinent procedural and ethical rules, including the procedures of the particular court and judge presiding over their case.  We will continue to monitor this topic closely in the coming months.

Commercial Insurance Policies Could Provide Protection for Businesses Facing Suits Under the Telephone Consumer Protection Act

By Barry Buchman

In one of the latest decisions to address the continuing debate over whether there is coverage under commercial general liability (CGL) insurance policies for so-called “blast fax” and “blast texting” lawsuits brought under the Telephone Consumer Protection Act (TCPA), a Wisconsin appellate court has ruled in favor of coverage.  See  Sawyer v. West Bend Mut. Ins. Co.,  2012 WL 2742291 (Wis. App. July 10, 2012).  In doing so, the court rejected the recurring insurance industry argument that CGL policies cover only invasion of privacy lawsuits that involve the alleged publication of the plaintiffs’ secrets; the court held that CGL policies also cover invasion of privacy lawsuits that allege a violation of the right to seclusion, i.e., the right to be left alone, which is typically the issue in “blast fax” and “blast texting” claims.

Although some commentators have suggested that decisions like this one likely will have no effect on disputes arising under newer CGL policies, which typically have TCPA exclusions, that is not necessarily so.

“Blast fax” and “blast texting” lawsuits frequently allege both statutory, TCPA claims and common law claims.  For the purpose of getting coverage at least for the costs of defending such lawsuits, as long as there is at least one covered claim or theory of liability, insurance companies often will have to pay all defense costs unless and until the policyholder is adjudicated liable only on the uncovered claims.  At least one court has issued exactly such a ruling in a dispute over coverage for blast fax claims in which the policies had a TCPA exclusion.  And, if the policyholder settles the lawsuit, there is, of course, never an adjudication of liability based only on the uncovered claims.  Thus, policyholders may be able to get coverage for such settlements, because it often will be difficult to establish that the policyholder settled the case solely due to concern about the uncovered claims.

Further, if an insurance company did not give proper notice to its policyholder of the addition of the TCPA exclusion to the CGL policy, that might provide a way around the exclusion as well.  And, other policies that an insured company may have, such as errors and omissions policies and directors and officers policies, may have exclusions that are narrower, i.e., that exclude less coverage, than the exclusions in CGL policies.

Thus, CGL and other commercial insurance policies continue to be a potentially very valuable source of protection for businesses facing TCPA lawsuits.  Businesses, therefore, should be willing to challenge coverage denials from their insurers if appropriate after an analysis of all of the circumstances, including the particular policy language and the particular underlying lawsuits.

Counterintuitive Strategies in Mediation

By Richard Shore

In an article just published in the Forbes Leadership Forum, I outline four counterintuitive strategies that harness the strengths of mediation rather than treating it as litigation light:

1.  Let the other side pick the mediator – agreeing to a mediator the other side likes can work in your favor, and save time and money to boot.

2.  Don’t argue about who is right – exchange views on the merits, but don’t let substantive disagreements hijack the process; remember that your goal in mediating is to reach a favorable settlement, not to win an argument.

3.  Leave the litigators at home – many litigators are good at settlement, but settlement calls for a different skill set and mindset than litigation; a separate settlement track allows you to use a diplomat to negotiate peace while the generals continue to fight the war.

4.  Deal with hard issues last – lock in a deal on a key term, usually money, and build the rest of the agreement on that foundation; even hard issues tend to fall into place once the parties believe they have a deal.

 Read the article here:  http://onforb.es/O9ZxY2

Victory for Elderly Policyholders in Conseco Case

 In a case that Gilbert LLP has pursued for several years on behalf of a certified class of thousands of policyholders who purchased life insurance from Conseco Life Insurance Company, our clients have just won a significant victory in the U.S. District Court for the Northern District of California.

A U.S. district judge’s July 17 decision to grant a preliminary injunction against Conseco marked a major win for the class, who are contending that Conseco is imposing unaffordable charges on some members of the class.

The Court ordered that Conseco must take immediate action to stop imposing these charges, known as cost-of-insurance charges, on some members of the class pending the outcome of a trial. The Plaintiffs affected are largely elderly policyholders who own life insurance policies called Lifetrend policies and who will lose their life insurance coverage before the end of next year because the cost-of-insurance and expense charges will deplete their policy accumulation accounts.

The Court held that the class is likely to prevail in the case based on the merits of its breach of contract claims against Conseco. The Court also held that the policyholders whose accumulation accounts will be exhausted before the end of next year because of the charges face irreparable harm.

The Court found that the policyholders who are unable to make the payments to sustain their policies will lose the peace of mind that comes with life insurance and that loss, the Court found, “cannot be remedied by money damages after the fact.”

In its opinion, the Court noted the case of a 91-year-old policyholder who already paid hundreds of thousands of dollars for his policy and recently faced deductions of over $7,000 per month in new cost-of-insurance charges.

We believe that this ruling is correct on the law and is also a significant step toward providing fairness and justice to our clients, elderly people whose savings were being depleted by the excessive insurance charges. Partner Craig Litherland says the decision represents “an important milestone in this litigation, and demonstrates that the Judge found the merits of plaintiffs’ case to be compelling.”

Andrea Hopkins, Michelle Price, Emily Grim, and Daniel Wolf also are working on the case.

How Far Can Lawyers Go in Researching Jurors on Social Media Sites?

By Barry Buchman and Emily Grim

As in any case, a favorable jury can be a key component to success in an insurance coverage trial. Selecting a sympathetic jury, however, is no easy task. Historically, jury selection has been akin to a guessing game, as practitioners have relied largely upon jury questionnaires or brief interviews during voir dire to glean information on the background and beliefs of potential jurors.

With the explosion in popularity of social networking sites such as Facebook, MySpace, Twitter, and LinkedIn, however, practitioners have a new weapon in their litigation arsenal: social media research.

Unlike jury questionnaires, which often reveal only basic information about a juror’s background, social media content can provide a unique window into a juror’s personal views, biases or affiliations. In insurance coverage cases, for example, an attorney might search for the following:

• A juror may have posted on Facebook, Twitter, or a personal blog some information about a past negative experience with his or her own insurance company, suggesting a potential lack of sympathy towards insurers.

• A juror may have expressed sentiments on Facebook, Twitter, or a personal blog that are critical of large corporations, potentially suggesting either lack of sympathy for an insurer or, conversely, lack of sympathy for large corporate policyholders.

Further, lawyers also may discover that one or more jurors themselves is violating court instructions by commenting about a trial online while it is in progress, or by following one or more of the trial participants, such as a lawyer or witness, online. This has been a growing problem, and courts recently have taken measures to address it.

Can a trial lawyer use such information to try to keep a juror out, or to try to make sure a juror stays in? Is this ethical?

There is an emerging consensus among courts and bar associations that social media research of jurors is legally and ethically permissible. Indeed, one court has gone so far as to indicate that at least some limited amount of such research is required, because of the obligation to represent a client zealously, within the limits of the law, when the information is available simply by going online and looking at a publicly available website. Recent ethics opinions indicate that viewing the public portion of a person’s Facebook page, for example, gives rise to no ethical implications, as the user has no privacy expectations concerning that content and the act involves no inappropriate or deceptive communications by the attorney. What if the juror had written a newspaper op-ed article about the topic? There would be no ethical reason not to read it and act accordingly.

However, a good deal of information on sites such as Twitter, Facebook, and LinkedIn can be accessed only by “friends” of the user on Facebook, those who “follow” the user on Twitter, those who are first-degree connections on LinkedIn, and so on. This information is not available to the general public. A trial lawyer who takes action to “friend” the prospective juror, to “follow” him or her on Twitter, or the like, in order to get access to the information, may well have crossed an ethical line – in this case, the rule against communicating directly with a juror. According to some ethics opinions, lawyers also may have to stop viewing even the publicly-available online information of a prospective or actual juror if the juror becomes aware of the monitoring, because of the risk that the juror will feel intimidated or harassed.

This area continues to be a rapidly evolving one, and thus there remain, of course, many unanswered questions regarding the legal and ethical boundaries around the use of social media in litigation. Stay tuned; we will continue to monitor this area and we will post updates.