Exxon Shipping Co., et al. v. Baker, et al.
554 U.S. ____ (2008)
Decided June 25, 2008

Background:  Just after midnight, on March 24, 1989, Exxon Valdez grounded on Bligh Reef, spilling 11 million gallons of crude into Prince William Sound. The ship was about to maneuver to return to the shipping lane when the captain, Joseph Hazelwood, left the bridge. Hazelwood had a well-known history of alcohol abuse. The vessel's third mate and an unlicensed helmsman failed to execute the turn in time, and the subsequent grounding created one of the worst environmental tragedies in the history of the United States.

Over 32,000 plaintiffs, consisting of commercial fishermen, Native Alaskans, and landowners brought an action against Exxon, as vessel owner, seeking punitive damages. Exxon stipulated to negligence and liability for compensatory damages. The jury ultimately award $5 billion in punitive damages against Exxon. The Ninth Circuit Court of Appeals remanded the matter twice to adjust the award to comport with due process requirements. Finally, the Ninth Circuit remitted the award to $2.5 billion--Exxon appealed.

The Supreme Court certified three issues: whether a shipowner may be held liable for punitive damages when the owner did not acquiesce to the harm-causing action; whether punitive damages are barred implicitly by applicable federal statutory law that has no explicit provision for such damages; and whether, given the circumstances, $2.5 billion is greater than maritime law should allow.

Holding: The first issue, relating to the vicarious liability of the shipowner, remains unresolved. Justice Alito recused himself from the matter due to his stock interest in Exxon Mobil. The remaining justices were equally divided. This case is therefore not precedential, and the Circuits remain split as to the availability of imputed corporate liability.

The Court held that there was no clear indication that Congress intended to foreclose awarding punitive damages under the Clean Water Act. Absent such clear indication, the Court refused to hold that common law principles were abrogated by the statutory scheme.

Lastly, the Court held that $2.5 billion is an excessive award as a matter of maritime common law. This determination was not an analysis under due process scrutiny. Rather, the Court determined that maritime punitive damages are best governed by the application of a ratio of punitive to compensatory damages with 0.65:1 as generally appropriate, and with a 1:1 ratio as a fair upper limit. Leaving the District Court's calculation of $507.5 million in compensatory damages unchallenged, the Supreme Court held that punitive damages shall not exceed that amount.

Any questions regarding this case can be directed to Joseph Kulesa at 610-332-7009 or jkulesa@tthlaw.com.  Mr. Kulesa is Chair-Elect of the American Bar Association’s Admiralty and Maritime Law Committee and a member of the Maritime Law Association. His focus is on general liability defense—including maritime, environmental, and recreational boating claims.

District of Columbia v. Heller
554 U.S. ____ (2008)
Decided: June 26, 2008

Holding:  The scope and meaning of the Second Amendment has long been debated: “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” The U.S. Supreme Court has decided that the Second Amendment specifically protects an individual’s right to keep loaded handguns in the home.

Background: Heller, a special police officer authorized to carry a handgun in the course of employment, attempted to obtain a registration certificate for a handgun he wished to keep in his home. The District of Columbia refused.  It was a crime to carry an unregistered firearm, and the registration of handguns was prohibited. Additionally, residents were required to keep their lawfully owned firearms “unloaded and dissembled or bound by a trigger lock or similar device” while in their homes.

Outcome: In a 5-4 split, the Court found the ban on handgun possession in the home to be a violation of the Second Amendment. The Court stated that “[a] well regulated Militia, being necessary to the security of a free State,” is a prefatory clause that explains the purpose of “the right of the people to keep and bear Arms, shall not be infringed,” rather than a restriction of the operative clause.

The Court generally dismissed the idea that the Second Amendment is obsolete in the modern world, where the country has a well-funded military. Rather, the right to bear arms is in part based in the right to band against a tyrannical government and its selected militia. The Court determined that, as handguns are the most preferred “arms” for the lawful purpose of defense of self, family, and property, and as protection is the core lawful purpose of the handguns, the D.C. ban was unconstitutional.

Any questions regarding this case can be directed to Anne Kulesa at 610-332-7027 or akulesa@tthlaw.com

Glover v. State Farm Mut. Auto. Ins. Co.
2008 PA Super 110
Decided May 28, 2008

Holding: Statute of limitations for first party benefits is four years, and pedestrian making a claim for such benefits to the insurer of the car that struck him has four years to do so.

Background: Pedestrian struck by driver appealed the trial court’s grant of the driver’s and driver’s insurer’s summary judgment motions. The trial court held that the two year statute of limitations barred each, as did the fact that the Pedestrian sued the driver after the driver had died.

Outcome: The Superior Court affirmed the grant of summary judgment in favor of the driver, because the action against the driver, initiated after the driver’s death, was a nullity and the pedestrian never sought to substitute the personal representative of the driver’s estate prior to the expiration of the two year statute of limitations governing personal injury actions. However, the Court reversed the grant of summary judgment in favor of the driver’s insurer, stating that pursuant to Pennsylvania statute (specifically 75 Pa.C.S. §1713(a)(4)), a pedestrian involved in a motor vehicle accident may seek first party benefits from any vehicle involved in the accident. As the statute of limitations governing first party benefit actions is four years, and the pedestrian brought the action within four years of the date of the accident, the trial court erred in granting the insurer’s summary judgment motion.

Any questions regarding this case may be directed to Corey J. Adamson at 717-255-7639 or cadamson@tthlaw.com

Heller v Pennsylvania League of Cities
2008 Pa. Commw. LEXIS 254
Decided June 4, 2008

Holding: UM/UIM exclusion of anyone eligible for worker’s compensation from the Named Insured is valid.

Background: Heller was injured while working as a policeman for a municipality and sought UIM benefits under the municipality’s policy with the Pennsylvania League of Cities, doing business as “Penn Prime Trust.” The policy excluded from coverage “[a]ny claim by anyone eligible for workers compensation benefits that are the statutory obligation of the [Municipality].” The trial court held that the exclusion was invalid as against public policy.

Disposition: The Commonwealth Court panel, by a 2 to 1 vote, reversed the trial court, holding that the exclusion was valid. The Court distinguished pre-1990 decisions on the grounds that UM/UIM coverage was not optional then and post-1990 decisions on the grounds that they did not deal with policy exclusions, but rather only the issue of whether the worker’s compensation statutes barred UM/UIM claims in certain circumstances.

Heller has recently filed a motion for reargument before the Commonwealth Court en banc.

Any questions regarding this case may be directed to Jason Giurintano at (717) 237-7157 or jgiurintano@tthlaw.com

Griffin v. Univ. of Pittsburgh Med. Ctr.
2008 Pa.Super.104, 2008 Pa.Super. LEXIS 1000
Decided May 19, 2008

Holding: Medical expert’s legal opinion must be given within a reasonable degree of medical certainty, and testifying to a percentage of 51% is not sufficient under Pennsylvania law.

Background: In this medical malpractice case, the Plaintiff underwent an exploratory laparotomy and ileocolectomy. Following the procedure, Plaintiff experienced confusion and agitation, and then complained of right shoulder pain. Plaintiff was diagnosed with a right posterior shoulder fracture/dislocation. Plaintiff’s expert witness testified Plaintiff’s right shoulder problem was caused by either a grand mal seizure or forcible restraint. For purposes of the litigation, a grand mal seizure would not legally support a negligence claim against the Defendant-hospital; however, forcible restraint would legally support a negligence claim against the Defendant-hospital.  Expert Witness testified at Trial that there was a 51% chance Plaintiff’s shoulder injury was caused by forcible restrain, and a 49% chance that the Plaintiff’s shoulder injury was caused by a grand mal seizure. The jury awarded Plaintiff damages in the amount of $2,277,131.00. Following post-trial motions, the Trial Court entered judgment on the verdict in favor of Plaintiff. Defendant-hospital appealed.

Outcome:  In reversing, the Superior Court of Pennsylvania focused on the testimony of Expert Witness noted above. The Court held that the Expert Witness opinion that there was a 51% chance Plaintiff’s injury was caused by forcible restraint was insufficient under Pennsylvania law to support the negligence claim against the hospital. The Court also noted an expert’s opinion that a cause “possibly” or “could have” led to a result, or “could very properly account” for a result, is likewise insufficient under Pennsylvania law. The Court pointed out that, while a medical expert is not legally required to use the specific words “reasonable degree of medical certainty” in an opinion, the expert must nonetheless give an opinion that is within a “reasonable degree of medical certainty.”

If you have any questions, or wish to discuss this case, please contact Jody A. Mooney at (610) 332-7013 or jmooney@tthlaw.com

American and Foreign Ins. Co. v. Jerry’s Sports Center, Inc.
2008 Pa. Super. 94
Decided: May 5, 2008

Holding: The Pennsylvania Superior Court adopts the minority view in the U. S., holding that an insurer does not have the right to seek reimbursement of defense expense from an insured absent an express policy provision.

Background:  Royal Insurance Company defended its insured, Jerry’s Sports, in an action for negligence in the marketing and distribution of handguns. In June, 2001, Royal retained a specialized law firm for the defense, under reservation of rights, to seek reimbursement of defense expense. Royal advised Jerry’s Sports that it could retain its own counsel to consult with the defense firm. Jerry’s Sports did not object to the defense afforded by Royal nor did it retain its own counsel. In September, 2001, Royal advised Jerry’s Sports of its coverage decision (no coverage), but stated it would continue to defend, and periodically affirmed that Royal would seek reimbursement of defense expense. Royal reviewed all bills, determined that they were reasonable, and ultimately reached an agreement with AIG to pay 50% of the defense. Royal sued for declaratory judgment, and the trial court found that Royal had no duty to defend or indemnify which was affirmed on appeal. Royal then filed a separate motion for reimbursement of defense expense. The trial court found an implied contract based on the reservation of rights letters, and ordered reimbursement on a quantum meruit theory. Jerry’s Sports appealed.

Holding: The Superior Court held that no implied enforceable contract existed, and that the insured was not unjustly enriched by Royal paying the defense expense. No reimbursement is allowed, absent an express policy provision. A duty to defend is broader than the duty to indemnify. Under the Royal policy, Royal not only had the duty, but the “right” to defend, and Royal exercised its right to defend and characterized the assumption of a defense due to the potential for coverage. Royal benefited from assuming the defense, and assumed complete control of the defense.

Any questions regarding this case can be directed to Paul Walker at 717-441-7061 (pwalker@tthlaw.com).

Laing vs. Volkswagen of America, Inc.
Court of Special Appeals of Maryland, No. 1040
September Term, 2007

The Court, for the second time this year, deals with a defective vehicle and the burden of proof necessary to send a case to the jury. The consumer in this case sued Volkswagen alleging violations of the Maryland Automotive Warranty Enforcement Act, the Maryland Consumer Protection Act, and the Federal Magnuson-Moss Warranty Act. The Court found without expert testimony which established the defect, the consumer could not proceed. On appeal, the consumer argued that for these types of causes of action, unlike a products liability case, there was a reduced burden of proof. The Court rejected this distinction. The Court made it clear that in these types of cases, the consumer could only establish that there was a defect in the vehicle and that the defect existed at the time of sale by producing expert testimony. Without proof of a defect, the consumer could not go forward on the Warranty Enforcement Act or the Maryland Consumer Protection Act claims.

Any questions regarding this case can be directed to Michael H. Burgoyne at 410-752-0057 or mburgoyne@tthlaw.com

Brown vs. The Daniel Realty Company, et al
Court of Special Appeals of Maryland, No. 01965
September Term, 2006

Holding:  Court affirmed a Defendant’s verdict in this lead paint poisoning case, venued in Baltimore City Circuit Court where the trial judge admitted an unredacted copy of a test report that had been prepared by an expert for the Plaintiffs which report purported contained irrelevant and prejudicial material.

One of the bases for Plaintiff’s appeal was the admission of an unredacted copy of the lead paint test report. There was no test made for the presence of lead based paint at the time the Plaintiff lived at the property. That test report, not only recorded whether or not lead based paint was present but also recorded the condition of the paint surface. The Plaintiff argued that the condition of the paint surface at the time of the test was not relevant and highly prejudicial. The Defendant, in support of the admission of the unredacted test result, argued that it was proper to assist the jury in fully understanding how the testing was performed.

In affirming the verdict for the Defendant, the Appellant Court stated that the Plaintiff’s “fear that the jury might not be able to comprehend that the testing took place many years after Appellant vacated the property gives the jury little credit for being able to understand the testimony that made that particular point absolutely clear.”

Any questions regarding this case can be directed to Michael H. Burgoyne at 410-752-0057 (mburgoyne@tthlaw.com).

Payton-Henderson, et al vs. Evans, et al
Court of Special Appeals of Maryland, No. 1326
September Term, 2007

The Court highlights the differences between a Motion to Dismiss for improper venue, and the request for a discretionary transfer of venue on the grounds of forum non conveniens.

The Plaintiff in this case, who was seriously and permanently injured by a gunshot fired by another student at a Baltimore County High School sued the shooter, as well as the principal of the High School, the Board of Education of Baltimore County, the Baltimore County Police Department and several Baltimore County police officers. The suit was filed in Baltimore City to obtain a more advantageous venue with regard to the prospects of a large recovery. The Defendants filed a Motion to Dismiss for improper venue.

The Court pointed out that there was no discretion with the trial judge in deciding this Motion; either venue was proper in Baltimore City or it was not. However, the Motion in the alternative asked the Court to transfer the case from Baltimore City solely based on the fact that the venue was inconvenient to the litigants and the witnesses. The Court went on to explain how the decision on this Motion was discretionary and involved a balancing of factors. Finally, the Court discussed the fact that an affirmative order of transfer of venue is immediately appealable as a final order within the contemplation of the Courts and Judicial Proceedings Article. However, a denial of a motion to transfer would only be interlocutory and not appealable.

Any questions regarding this case can be directed to Michael H. Burgoyne at 410-752-0057 or mburgoyne@tthlaw.com