April 2013 20.22 MB (pdf) - DRI Today

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On The RecordWhat Lawyers Can DoThe Need to Protect JudicialIndependenceBy Steven M. Puiszis, DRI Board of DirectorsA sense of confidence in the courts is essential to maintainthe fabric of ordered liberty for a free people.Chief Justice Warren G. Burger, The State ofthe Judiciary, Address at the Annual Meetingof the American Bar Association (1970).The DRI Judicial Task Force was formed to identifyissues that threaten the fairness of our court systemsand the independence of the judiciary. The mission ofthe task force is to bring these threats to the attention ofDRI members and to assist members of the defense barand state and local defense organizations in respondingto them.The need to protect the independence of the judiciaryand the fairness of our legal system has never beengreater. Today, merit selection is under attack, a fundingcrisis is closing the doors to our courthouses around thecountry, federal judgeships are sitting vacant because ofpartisan wrangling over nominations, and judges arebeing threatened with impeachment or unfair criticismover their decisions.Our courts were set up to be the one place where everyAmerican could receive a fair shake. In recent years,however, the ability of our courts to provide that justicehas been severely compromised. Over the past threeyears, 42 states have dramatically reduced the fundingprovided to their judicial branches due to the economicrecession that has gripped the country. This has causedmany state court systems to impose startling cost cuttingmeasures. Thirty-four states have laid off staff, 23 havereduced the hours courts are open, 10 have imposed judicialfurloughs, and nine states have closed their courtsone day a week. In California, Chief Justice Tani Cantil-Sakauye reported, “In the last five years, $1 billion dollarshas been taken from the judicial branch.” Duringthis same time frame, the number of suits filed in statecourts has increased, especially mortgage foreclosureand debt collection actions.And now, across- the- board federal budget cuts fromsequestration will add to the financial stress that statesand their court systems are under. This perfect storm hasimpacted the ability of state courts to function as theyhave in the past. Criminal cases subject to speedy triallaws have to be given priority over civil suits. In manycounties around the country, courts have only enoughfunds to pay jurors to serve on one criminal jury trial amonth. Backlogs of civil cases are becoming more commonbecause of the longer time it takes to resolve civilcases. As a result, parties are increasingly turning to privatemediation and arbitration for the justice that ourcourts are now unable to provide in a timely manner.Years ago Francis Bacon warned, “[I]f we do not maintainjustice, justice will not maintain us.” Today thatwarning is on display in courthouses around the country.If our courts are unavailable to protect our constitutionalfreedoms, who will?Courts are being asked to resolve some of the mostsensitive social and difficult political issues facing oursociety, ranging from same-sex marriage and abortionrights to affirmative action, the right to bargain collectively,and whether corporations can invoke the protectionof the First Amendment. When a case presentsa hot button social or political issue, it does not matterwhether the losing side is liberal or conservative, Democraticor Republican; it will criticize the decision as a wayto galvanize its members. And it doesn’t matter if thecourt was right on the facts and the law. Inevitably thedecision will be criticized as the product of judicial activismwithout any reference to the decision’s rationale.The 2010 Iowa Supreme Court retention election is avibrant example of this strategy. Several years earlier,the Iowa Supreme Court unanimously voted in favorof same-sex marriage. The court’s decision addressedthe civil definition of marriage in light of the constitutionalduty to ensure equal protection of the law. ThreeIowa Supreme Court judges running for retention weretargeted for defeat because of the court’s unanimousdecision on the issue. Critics of the court, supportedby funding primarily from out of state special interestgroups, filled the airwaves with commercials claimingthat if the Iowa Supreme Court was allowed to redefinemarriage, every liberty was in jeopardy. Notably, therewas no challenge to the qualifications, competence, orthe ethics of the three Iowa Supreme Court judges whowere targeted, nor was the legal reasoning of the court’sdecision challenged. The attack was purely ideologicalin nature.On The Record, continued on page 10For The Defense ■ April 2013 ■ 1

DRI—The Voiceof the Defense BarVol. 55, No. 4 April 2013PresidentMary Massaron RossBloomfield Hills, MichiganImmediate Past President Henry M. SneathPittsburgh, PennsylvaniaIn This Issue1 On The RecordWhat Lawyers Can Do: The Need to Protect Judicial IndependenceBy Steven M. Puiszis, DRI Board of Directors4 DRI NewsMembers on the Move • DRI Calendar • Toxic Torts and EnvironmentalLaw Committee Participates in Operation GratitudePresident-ElectJ. Michael WestonCedar Rapids, Iowa7 Affiliates in ActionBusy Times for “Bluegrass,” “Volunteer” SLDOs1st Vice President2nd Vice PresidentSecretary-TreasurerExecutive DirectorJohn Parker SweeneyBaltimore, MarylandLaura E. ProctorNashville, TennesseeJohn E. CuttinoColumbia, South CarolinaJohn R. KourisDeputy Executive Director Tyler HowesDirector of PublicationsEditorProduction ManagerContributing EditorAdvertisingRepresentativeJay LudlamMichelle ParriniJulia BergerudMarge MotluckLaurie P. MokryFor The Defense, April 2013, Vol. 55, No. 4 (ISSN 0015-6884). Copyright ©2013, DRI. All rights reserved.Published monthly by DRI, 55 West Monroe Street ~Suite 2000, Chicago, Illinois 60603. Telephone: (312)795-1101. Fax: (312) 795-0747.Periodicals postage paid at Chicago, Illinois, and atadditional mailing offices. Subscription price is $65.00per year, and, for DRI members, is included in the membershipdues. Individual copies are $7.00 for DRI membersand $12.00 for non-members, plus postage andhandling.POSTMASTER: Send address changes to For TheDefense, DRI, 55 West Monroe Street ~ Suite 2000, Chicago,Illinois 60603.Correspondence and manuscripts should be sent tothe Editor.All views, opinions and conclusions expressed in thismagazine are those of the authors, and do not necessarilyreflect the opinion and/or policy of DRI and itsleadership.9 DRI Center for Law and Public PolicyThree Presidents Discuss Common InterestsYoung Lawyers12 From the ChairLeadership—Synonymouswith ServiceBy James L. Pattillo14 Just Add CMS GuidanceModernizing MSP CostContainment ProtocolsBy John V. Cattie, Jr.19 In the Wake of Hurricane SandyThe Scope of Civil Authority ProvisionsBy J. Tyler Butts24 Not Real Froot?Deconstructing Food LabelingConsumer Class ActionsBy Nilda M. Isidro, Anne A. Gruner,and Carla R. Pasquale31 Case Law Developments“Failure to Train” and MedicalDevice Misuse ClaimsBy Jennifer A. Eppensteinerand Regina M. Nelson35 New Regulations and LitigationWhat You Need to KnowAbout Vapor IntrusionBy Michael J. Gray and Susan Holtsclaw39 You Have the Right to an Attorney,but It Might Not Be MeUnderstanding CorporateMiranda WarningsBy Daniel C. Headrick and Ryan L. Harrison44 Preservation of ElectronicallyStored InformationProposed Changes toFederal Rule 37(e)By Jennifer Ecklund and Janelle L. Davis48 A Strangling HoldApplication of the WorkProduct ProtectionBy Maureen Bickley and Larissa Koshatka53 What’s New?Recast of the EuropeanRegulation “Brussels I”By Christelle Coslin58 Observations of PersuasionLessons from Politics forthe Appellate Lawyer?By Richard J. Montes64 Legal HerpetologyLizards and Snakes in the CourtroomBy David C. Marshall70 Defense Ethics and ProfessionalismSpring Cleaning: Ten Bad Practices Every Lawyer Should Clean Out of the HouseBy Mike H. Bassett and Michael N. Bryant76 Advocates and New Members2 ■ For The Defense ■ April 2013

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DRI Services55 West Monroe StreetSuite 2000Chicago, Illinois 60603Phone (312) 795-1101Fax (312) 795-0747DRI NewsInternet www.dri.orgE-mail dri@dri.orgHours8:30-4:30 CST, Monday-FridayDRI Staff Contacts (direct-dialnumbers in area code 312).■ Membership Services■ Change of Address■ Group Life Insurance■ Disability and Major Medical■ Accidental Deathand Dismemberment■ Professional LiabilityInsurance■ DRI Credit Card Programe-mail: membership@dri.orgCheryl Palombizio, 698-6207Marge Motluck, 698-6237Sarah M. Vlcek, 698-6258■ DRI Committeese-mail: committees@dri.orgChar Graczyk, 698-6243■ Meeting ServicesLisa M. Sykes, 698-6233Beth DeMars, 698-6234Sandra Galindo, 698-6254■ Annual Meetinge-mail: annualmeeting@dri.org■ Communications OfficeTim Kolly, 698-6220■ MarketingE-Mail: marketing@dri.orgKatie Malinich, 698-6256Megan O’Neill, 698-6244■ AdvertisingLaurie P. Mokry, 698-6259■ SalesTracy Schorle, 698-6276Mark Walkie, 698-6225■ Sponsorships ■ ExpertWitness Database ■ DRI Online■ Website Content MgmtE-Mail: ewd@dri.orgJohn Hovis, 698-6218■ For The Defense/In-HouseDefense Quarterlye-mail: jludlam@dri.org■ The Voicee-mail: thevoice@dri.orgBarb Lowery, 698-6219■ Publication Orderse-mail: publ-orders@dri.org■ Seminarse-mail: seminars@dri.orgJennifer Cout, 698-6205Cathy Butler, 698-6226Kerri Leo, 698-6238■ Webconferences/CLEJamie Rocks, 698-6212■ Customer Servicee-mail: custservice@dri.orgTiffany Caldwell, 698-6230Angelique Diaz-Rodriguez,698-6257Shnese Ingram, 698-62554 ■ For The Defense ■ April 2013Members on the MoveThe New York State Bar Association (NYSBA) presentedawards to several members this month,including Buffalo attorney Dan D. Kohane. Mr.Kohane, a senior member of Hurwitz & Fine PC,was recognized by the NYSBA’s Torts InsuranceCompensation Law Section. He received the JohnE Leach Memorial Award, which is presented to anindividual who demonstrates “outstanding serviceand distinguished contributions to the legal professionas a member of the TICL section.” Mr. Kohane,a former member of the DRI Board of Directorsand a past chair of the DRI Technology Committee,is a nationally recognized insurance coveragecounselor who offers training, consultation and inhouseseminars for the specialized practice. He isthe fourth attorney from Hurwitz & Fine to receivethe award.Bullivant Houser Bailey PC, a nationally recognizedlaw firm with offices in Washington, Oregon,and California, is pleased to announce thatLaura Caldera Taylor, a shareholder in the Portlandoffice, was recently elected to the Fellows ofthe American Bar Foundation. The Fellows of theAmerican Bar Foundation is an honorary organizationof lawyers, judges, and legal scholars whosecareers have demonstrated outstanding dedicationto the welfare of their communities and to the highestprinciples of the legal profession. Ms. Taylor’spractice focuses on intellectual property and complexbusiness disputes. She has experience helpingclients involved in patent, trademark, copyright,trade secret, and other complex business disputes.Gordon & Rees LLP opened a Philadelphia officewith the addition of several new lateral partnerswho joined from Cozen & O’Connor. WilliamP. Shelley, who previously served on Cozen &O’Connor’s board of directors and ManagementCommittee, as well as chair of the firm’s GlobalInsurance Group, serves as the Philadelphia officemanaging partner. Joining Mr. Shelley in the newoffice are Joseph A. Arnold, Ann Thornton Field,and James E. Robinson. Mr. Shelley says, “G&R isa great fit for our practices and clients. The firm hasbeen expanding across the country in areas such ascomplex commercial litigation and insurance coverage,both of which are areas of increased importanceto our clients.”National law firm Wilson Elser is pleased to announcethat experienced trial attorney Peter M.Hughes has joined the firm’s San Diego office as ofcounsel. Founding partner of his former firm, theHughes Law Firm, Mr. Hughes has more than 24years of experience in the defense of civil litigationmatters, with an emphasis on transportation, generalliability and casualty, construction, productliability, professional liability and services, commercialand business litigation, and employment matters.He has tried more than 50 cases to jury verdict.DRI Southeast Region Director and Public PolicyCommittee Chair R. Bruce Barze, Jr., hasbeen named the chair of Balch & Bingham LLP’sProduct Liability and Casualty Litigation PracticeGroup. During more than 20 years of law practice,Mr. Barze has tried insurance and commercialdisputes, fraud cases, environmental claims, andwrongful death and personal injury cases. Heserved as national coordinating counsel for a pharmaceuticalcompany in the phen-fen litigation, andserves as state or regional counsel for a number ofcompanies, including product manufacturers thatmake heavy trucks, other vehicles, and electricaland automation equipment. Mr. Barze also advisesclients on matters involving environmental issues,commercial disputes, and insurance coverage.Roger D. Townsend of the Houston office ofAlexander Dubose & Townsend LLP is servingthis year as president of the American Academyof Appellate Lawyers. The academy serves as theappellate- lawyer equivalent to the American Col-Members on the Move, continued on page 11Diversity and Inclusion in DRI: A Statement of PrincipleDRI is the largest international membership organization of attorneys defending theinterests of business and individuals in civil litigation.Diversity is a core value at DRI. Indeed, diversity is fundamental to the success ofthe organization, and we seek out and embrace the innumerable benefits and contributionsthat the perspectives, backgrounds, cultures, and life experiences a diverse membership provides.Inclusiveness is the chief means to increase the diversity of DRI’s membership and leadership positions.DRI’s members and potential leaders are often also members and leaders of other defense organizations.Accordingly, DRI encourages all national, state, and local defense organizations to promote diversity andinclusion in their membership and leadership.

CalendarUpcoming eventsof interest toDRI members andother defense lawyersFor more informationabout any of these events,call DRI Customer Serviceat (312) 795-1101,or visit our website atwww.dri.org.April 24–26 Life, Health, Disability and ERISA Claims Seminar BostonDRI CalendarMay 1–3 Employment and Labor Law Seminar PhoenixMay 3 Fidelity and Surety Roundtable ChicagoMay 9–10 Business Litigation Seminar ChicagoMay 9–10 Intellectual Property Seminar ChicagoMay 16–17 Drug and Medical Device Seminar New York CityMay 16–17 Retail and Hospitality Litigation and Claims Management Seminar ChicagoMay 30–31 Diversity for Success Seminar ChicagoJune 6–7 Insurance Bad Faith and Extra-Contractual Liability Seminar BostonJune 13–14 DRI International Seminar Prague, CzechRepublicJune 20–21 Young Lawyers Seminar Las VegasJune 27–28 Government Enforcement and Corporate Compliance Seminar Washington, DCSeptember 19–20 Nursing Home/ALF Litigation Seminar Scottsdale, AZSeptember 19–20 Strictly Automotive Seminar Dearborn, MISeptember 26–27 Construction Law Seminar Las VegasOctober 16–20 DRI Annual Meeting ChicagoNovember 7–8 Asbestos Medicine Seminar New OrleansDecember 12–13 Insurance Coverage and Practice Symposium New York CityInvestigative Technologies Inc.TMForensic Engineering • Expert TestimonyAccident ReconstructionAreAs of expertise:• Biomechanical• Civil/structural• Construction• Consumer products• Disaster• electricalengineering• environmentalengineering• fire investigation• Human factors• industrial Machinery• Marine• Material sciences• Mold• safety/osHACompliance• slip & fall• VehicularVisit us online:• search periodicals• immediate online help• View expert profiles• press room of eventswww.cedtechnologies.com 1-800-780-4221Washington • Cleveland • Jacksonville • New York • Ft. Lauderdale • ChicagoFor The Defense ■ April 2013 ■ 5

DRI NewsToxic Torts and Environmental Law CommitteeParticipates in Operation GratitudeDRI’s Toxic Tortsand EnvironmentalLaw Committee heldits 2013 seminar inNew Orleans from February28–March 1. Onthe Saturday followingthe seminar, the committeehosted a service projectto show support for membersof the military andtheir families. This year, thecommittee prepared 240 personalhygiene care packagesfor deployed troops, and stuffedand dressed 250 teddy bears forthe children of deployed servicemembers. The care packages andteddy bears were sent to California-basedOperation Gratitude, which willdistribute the packages and bears to militarypersonnel and their families.This year the committee also decidedto show support for a New Orleans-based6 ■ For The Defense ■ April 2013charity.The committeepresented a checkfor $2,000 to Shurhonda Love,supervisor of the New Orleans chapter ofthe Disabled American Veterans.Overall, the project was a huge success,with over 30 attorneys assisting in assemblingthe care packages and stuffing thebears. “As you can see by the turnout,” saidcommittee memberand project organizerJennifer Dlugosz ofJenner & Block, “thisis a project that is verydear to the hearts ofour committee members.It expresses ourgratitude for our servicemembers overseas, butalso remembers the kidswho wait for their mom ordad’s return.”Funds for the care packages,teddy bears, and donations wereraised by several firms who hosted jeansday and also individual contributions.The committee sends a special thanks tothe following firms and individuals whoworked hard to make this happen: BowlesRice LLP; Hinshaw & Culbertson LLP;Steptoe & Johnson LLP; Thompson HineLLP; Tucker Ellis LLP; Timothy J. Coughlin;and John Parker Sweeney.

Affiliates in ActionBusy Times for “Bluegrass,” “Volunteer” SLDOsKentuckyKentucky Defense Counsel, Inc. (KDC)held its inaugural Young Lawyers Section(YLS) Seminar in conjunction with theKDC 2012 Fall Seminar on November 8–9,2012 at Marriott Griffin Gate, Lexington,Kentucky. The YLS program was chairedby Melissa Calabrese of O’Bryan, Brown &Toner, Louisville and the 2012 Annual FallSeminar was chaired by Kit Hornback ofReinhardt & Associates, Lexington.While the YLS Seminar was organizedwith a focus on attorneys practicing 10years or less, all KDC members were ableto attend at no charge. The seminar wasfollowed by a reception with approximately55 people in attendance, including someof Kentucky’s appellate and circuit judges.Since a long range planning meeting ofthe KDC Board of Directors on January 26,2012, KDC has established the followingcommittees:• Young Lawyers Section, chaired byMelissa Calabrese, O’Bryan Brown &Toner, Louisville• Trial Tactics Committee, chaired by BradCase of Dinsmore & Shohl, Louisville• Awards/Recognition Committee chairedby Kit Hornback of Reinhardt & Associates,Lexington• Bylaws Committee, chaired by Bob Hofferof Dressman Benzinger & LaVelle,Crestview Hills;• Membership Committee, co-chaired byCasey Stansbury of Fowler Bell, Lexingtonand Pat Moloney of Sturgill TurnerBarker & Moloney, LexingtonAt a board meeting held on November 10,2012, the Board of Directors also voted toestablish a Legislative Committee, chairedby Tony Sammons of Dinsmore & Shohl inLexington, and a Publications Committee,co-chaired by Jason Kuhlman of Adams,Stepner & Wolterman in Covington, MitchHall of VanAntwerp, Monge, Jones, Edwards& McCann, in Ashland; and Miller Grumleyof Bradley & Freed, P.S.C., in Paducah. Morerecently, KDC established an Amicus Committee,chaired by David Kramer of Dressman,Benzinger & LaVelle, in Crestview Hills.KDC is looking forward to its first magazinebeing published and mailed in Octo-KDC President Park Priest with KDC member Samantha Propp and KDC Vice President CaseyStansbury at the KDC’s inaugural YLS Seminar Receptionber 2013. The plans at this time are for a36-page, full-color magazine to be publishedsemi- annually. Any KDC memberinterested in working on the publication iswelcome to contact Jason Kuhlman, MitchHall, or Miller Grumley to discuss thoseareas where assistance is needed.On April 19, 2013, KDC will be hosting aTrial Tactics Seminar, organized by the KDCTrial Tactics Committee. The event will takeplace at Downtown Louisville Marriott, andsince the event is two weeks before Oaks andDerby, the lunchtime program will includea speaker on handicapping.Plans are now underway for the 2013YLS Annual Fall Seminar to be heldNovember 7–8 at the Marriott Griffin Gatein Lexington. YLS members Tia Combs,Christine Hajjar, and Stephanie Wurdockhave organized this year’s program, whichwill again feature a reception held immediatelyfollowing this program.Planning is also underway for the KDC’s2013 Annual Fall Seminar, which is beingchaired this year by KDC Vice PresidentCasey Stansbury.KDC’s re- modeled website is up and runningat this time. DRI developed the website,and KDC now has complete controlover its contents. Members are now able toupdate their profile, pay dues and registrationfees online, search for members by severaloptions, and review the weekly lobbyistreports. The YLS is in the process of gatheringbriefs, depositions, and pleadings thatcan be posted on the members- only sectionof the website. And blogging is available!KDC would also like to take this opportunityto extend its heartfelt thanks to JohnTrimble for all he has done to help turnKDC around. For its board of directors, thelast two winters KDC has held an all-day,long-range planning meeting facilitated byMr. Trimble, which has helped turn KDCinto a very active organization. KDC nowhas a very large turnout at its board meetingsand has learned that people really dowant to be involved.TennesseeThe Tennessee Defense Lawyers Associationheld its 2012 Fall Seminar & AnnualMeeting September 20–22 at Union Stationin Nashville. The event kicked off, after aTDLA Board of Directors meeting, with thePast President’s Cocktail Reception at SambucaNashville.For The Defense ■ April 2013 ■ 7

Affiliates in ActionOn Friday morning, TDLA PresidentRobert A. Crawford of Kramer Rayson LLPin Knoxville and Seminar Chair HeatherDouglas of Manier & Herod in Nashville,welcomed those in attendance. After substantiveprogramming during the day onFriday, several individuals played a roundof golf at Tennessee Gaylord Springs.At a reception and dinner on Friday evening,Mr. Crawford passed the presidentialgavel to John W. Barringer of Manier& Herod in Nashville. Brad Box of Rainey,Kizer, Reviere & Bell PLLC in Jackson,rotated into the position of president- elect,while James H. Tucker, Jr., of Manier &Herod in Nashville was named secretarytreasurer.Lisa Ann Overall of McDonaldKuhn in Memphis was named to the boardas a vice president.Those who stayed through Saturday’sCLE programming enjoyed dinner andgreat weather at Whiskey House.TDLA Past President Doug Dooley and 2012–13 President John Barringer at the TDLA Fall Seminarand Annual Meeting reception.In other TDLA news, TDLA lobbyists GifThornton and Brad Lampley of Adams andReese in Nashville, are supplying the organization’smembers with weekly updates asthe 2013 Tennessee legislative session continues.TDLA is monitoring very closelythe workers’ compensation reform that ison the legislative agenda.TDLA will be joining the AlabamaDefense Lawyers Association for the thirdyear in a row at Sandestin Golf & BeachResort, June 13–16, for a joint ADLA/TDLAseminar. Marcia McShane of ConstangyBrooks & Smith LLP in Nashville is organizingthe speakers for the TDLA breakoutsession, which will take place the morningof Friday, June 14. The joint CLE programwill be held on Saturday morning. TDLAcontinues to promote how family friendlythis event really is.The TDLA 2013 Fall Seminar & AnnualMeeting will take place October 10–12 atMarriott Griffin Gate, Lexington, Kentucky.Phil Mischke of Wyatt, Tarrant &Combs in Memphis is already in the processof lining up CLE speakers. The scheduleincludes a Past President’s Dinner onThursday evening, three hours of CLE Fridaymorning and again on Saturday, golfFriday afternoon, dinner and reception onFriday evening, and tickets to KeenelandSaturday afternoon.2013 TDLA Fall Seminar Chair Heather Douglas, Past President Terry Hill, 2013 TDLA Fall SeminarHospitality Chair Allison Malone, and TDLA Director Sarah Reisner.TDLA Past Presidents Melanie Stewart andGary Wilkinson8 ■ For The Defense ■ April 2013

DRI Center for Law and Public PolicyThree Presidents Discuss Common InterestsBy Mary Massaron RossOn January 15, 2013, the presidents ofDRI, ABA, and AAJ met to discuss issuesof common interests for safeguarding thejudiciary and addressing problems in thelegal profession. Laurel Bellows of the ABAand I gathered at DRI headquarters inChicago, and Mary Alice McLarty of AAJjoined us by conference call. As unique asthat moment was, it was heightened by thefact that we gathered as the first women toserve simultaneously as presidents of thethree major national bar organizations.Even though we not infrequently disagreeon policy and politics, for the nexthour and a half, we discussed a host ofissues on which we held common interests.The meeting reflects our joint commitmentto the rule of law, civility, and collegiality inthe profession, and the desire of each of usto talk about our mutual goals, concerns,and dreams for the American judicial systemand for the legal profession. It was aprivilege for me to be there representing theviews of the 22,000 members of DRI as wediscussed the issues of the day.Stable and Adequate Fundingfor the JudiciaryThe judiciary was created as the third coequalbranch of government by federal andstate constitutions. Its institutional legitimacydepends upon its independence, itsaccountability to the rule of law, and itsability to provide a just and speedy resolutionto disputes brought before it.Today, there is widespread national concernthat courts are not able to adjudicatematters before them on a timely basis becauseof inadequate funding. One problem stemmingfrom inadequate funding is the inabilityof some local courts to conduct civil jury tri-als in a timely manner because limited availablefunds are allocated for criminal trials.ABOTA Resolutions to which the threegroups all subscribe have declared thatthe Constitution prohibits withholdingthe funds necessary for the courts to protectthe people and their rights throughthe rule of law. Constitutional rights donot vary with the rise and fall of budgets,and the protections afforded the rights ofthe people through the judicial branchare not contingent on transitory politicaljudgments regarding the popularityof raising or lowering taxes or on tacticaldecisions about periodic budget deficits.DRI feels that the state and federal judiciariesmust have a stable, constant, andadequate level of funding so that the rightsand access to justice guaranteed by theConstitutions are preserved, secure frompartisan and ideological debate. We willwork for policy changes that meet that goal.On March 4, DRI, the ABA, and the AAJissued a joint statement warning policymakersof the dire effects of sequestrationon a judiciary already starved for funds.■■Mary Massaron Ross is a member of Plunkett & Cooney PC’s Board of Directors. From its BloomfieldHills, Michigan, office, she heads the firm’s appellate practice group. Ms.Massaron Ross became President of DRI in October 2012. She has served asan active member and brief writer for the DRI Amicus Committee, filing briefsin cutting edge cases in the United States Supreme Court as well as severalstate courts of last resort. Ms. Massaron Ross is a past chair of the DRI AppellateAdvocacy Committee. She is also a co-editor of DRI’s A Defense Lawyer’sGuide to Appellate Practice.Judicial VacanciesDelays in filling judicial vacancies on thefederal bench have created a vacancy rate ofalmost 10 percent (83 of 874 federal judgeships).This inadequate judicial cohort,when coupled with inadequate funding,produces delays that deny justice to citizens,creates hardship and expense for thelitigants, and is inconsistent with a fullyand effectively functioning judiciary.DRI will work on reforms in the nominationand confirmation process with a goal ofeliminating the serious shortage of availablejudges. I personally would like to see a vacancyrate of no more than five percent andefforts to identify the mechanism or mechanismsthat will secure this goal. I know howfrustrating it can be for clients when a case isstalled in the courts waiting for a trial dateor an appellate oral argument. These delaysare not inevitable; changes can be made.Gender Equity Within theLegal ProfessionIn addition to creating a more just society,studies definitively demonstrate a clearcompetitive and economic advantage tosocieties that draw upon the skills and talentsof all of their people.Despite the significant legal and professionalgains of women in the legal profession,research shows that female lawyersin law firms are less likely to serve on themanagement or compensation committeesof their firms. Statistics also show thatmany women attorneys leave the profession,rather than make it a lifelong career, and thisis particularly true in the area of litigation.DRI is committed to gender equity andwill work to make the legal professiona model for gender equity. ABA PresidentLaurel Bellows has also made this ahallmark of her administration. To thatend, DRI hopes to identify model programsand to identify best practices thatcan lead to greater opportunity for professionaladvancement and compensationfor women, equal compensation forequal work, and greater representation forwomen on senior management and governingbodies of law firms. The Women in theLaw Committee of DRI is working on manyof these issues and reflects a remarkableeffort on DRI’s part to effect real change.Diversity on the BenchThe judiciary and our rule of law depend onthe public’s confidence in, and its respect for,judicial decrees. The absence of judicial diversityfosters a perception of bias among varioussegments of our society, heightening theperception that the judicial system is unfair.Women and minorities remain underrepresentedon the federal and statebenches. A more diverse judiciary will notonly improve public perception of Americancourts, but will also enhance the pub-Presidents, continued on page 11For The Defense ■ April 2013 ■ 9

DRI Center for Law and Public PolicyOn The Record, from page 1Debate can be healthy, and if a court’sdecision is wrong on the facts or the law,it is fair to criticize it. We are seeing withincreasing frequency, however, attacks onthe judiciary that are purely ideologicallydriven. This type of “criticism” is not onlyunfair, but undermines the rule of law bysuggesting that judges are free to ignore therelevant facts or the applicable law to reachthe outcome sought by a special interestgroup. This type of “criticism” is alsohaving a corrosive impact on the public’sperception of the judiciary. Judicial independencedoes not mean that judges arefree to make decisions as they wish; ratherit is the freedom to decide as they must, touphold the rule of law.The judicial branch is where we havealways turned to protect our rights andliberties. The last thing we can have in ademocracy is a judiciary concerned withthe latest public opinion polls on an issuethey are deciding. Lawyers need to defendthe judiciary to ensure that judges willfearlessly follow the rule of law, even whendoing so will lead to a politically unpopulardecision or a result with which wedisagree.What the special interests did in 2010in Iowa was to send a message, not just tothe members of the Iowa Supreme Court,but to every judge in the country, that ifyou decide a case contrary to a particulargroup’s views, that group will be comingafter you. It empowered critics of an independentjudiciary to attempt to imposetheir will upon the courts and intimidatejudges. Judicial independence requiresthat judges make rulings free from thepressure of outside influence or politicalintimidation. For a democracy to survive,the public must believe that our courtscan and will render fair and impartialdecisions.So, I ask the question: What kind ofcourt system do you want? One that closesevery Wednesday because there are notenough funds to keep the lights on and thedoors open? One that is filled with judgeswho are worried about being kicked off thebench because of a politically unpopular,but legally correct decision? Or do you wantcourt systems that can deliver justice on atimely basis, with judges who act withoutfear or favor to any party?What can lawyers do about unfair criticismof the judiciary and the underfundingof our court systems? First, understandthat a judge must abstain from publiclycommenting about any court proceeding.Unfortunately, that allows groups challengingjudicial independence to gain tractionwith the public. However, the Model Rulesof Professional Conduct encourage lawyersto defend judges and courts that areunfairly criticized. How many times haveyou as a lawyer made a representation to ajudge as an officer of the court? As officersof the judicial branch it is our responsibilityto protect the independence of the judiciaryand the ability of our courts to deliverjustice to all.Do not fall prey to the notion that thereis nothing we can do to protect judicialindependence or the funding of our courtsystems. There is plenty we can and shoulddo. There is a critical need to educate thepublic about the judiciary and the role thatjudicial independence plays in our democracy.We can educate the public about whatthe separation of powers really means;explain how a judge decides a case; identifywhat qualities make up a good judge;and explain when criticism of a judge,a court, or a decision is unfair and why.We can write letters to the editor correctingmisperceptions about a decisionand explain that our courts are woefullyunderfunded. When we have the oppor-New and Improved DRI Online10 ■ For The Defense ■ April 2013

DRI Center for Law and Public Policytunity to speak to members of a communitygroup, stress these points and the rolethat the judiciary plays in protecting ourrights. And, we should write to our legislativeleaders to seek full funding of our statecourt systems.Lawyers can no longer ignore theseissues. We need to protect the independenceof the judiciary and seek full fundingof our court systems so they can continueto deliver justice to all. Remember thewords of Robert F. Kennedy, “Each of uscan work to change a small portion ofevents, and in the total of all those acts willbe written the history of this generation.”The time to act is now.Presidents, from page 9lic’s confidence in our court systems in allsegments of our society.Diversity has long been a core valueof DRI and we will continue to promotegreater diversity on both the federal andstate benches. And I think it’s fair to saythat both the ABA and the AAJ likewisesupport this goal.Jury PreservationThomas Jefferson rightly characterizedtrial by jury “as the only anchor yet imaginedby man, by which a government canbe held accountable to the principles of itsconstitution,” and the preservation of thejury trial has long been a major goal of DRI.Innovative projects in various stateshave shown that impediments to jury trials(primarily those of cost and duration) canbe adequately managed. DRI is committedto promoting the preservation of the jurytrial through public education and supportfor reforms.The meeting of the three presidents produceda good exchange of ideas and theremay be other opportunities for joint action,where appropriate to DRI’s goals and interests.Regardless, DRI will press on, alone orin collaboration, with these principles thatare the elements of our longstanding mission.I look forward to continuing these andother efforts as your president, working withthe DRI Officers, Board of Directors, Centerfor Law and Public Policy, and other groupswithin our great organization.Exclusive members-only access toDRI’s vast online library including:All publications in the Defense Library Series (excludingnew releases within 12 months)For The Defense and In-House Defense Quarterly articlesCommittee e-newsletters and The Voice articlesSeminar course materialsCourt Report and Case SummariesFind on-point, previously published articlesand resources within seconds.Members, from page 4lege of Trial Lawyers, and fellowship is byinvitation only. Mr. Townsend is a memberof the DRI Appellate Advocacy Committee.After 33 years of exemplary service toFarmers Mutual’s policyholders, agents,and employees, James B. Dobler, ExecutiveVice President, Secretary and GeneralCounsel, will be retiring on June 1, 2013.Mr. Dobler has served Farmers Mutual asan employee, officer, and board memberwith great professionalism, integrity, andwisdom. At Farmers’ board of directorsmeeting earlier this year, Ann L. Parr waselected to the board and will fulfill the remainderof Mr. Dobler’s term. Ms. Parr wasalso promoted to senior vice president, secretary,and general counsel. Farmers wouldalso like to announce the promotion ofMark T. Gokie to the position of vice presidentand assistant general counsel.DRI member Megan S. Wynne recentlyreturned to Morris Polich & Purdy LLP as apartner in the firm’s Los Angeles office afterbeing in-house counsel for I-Flow LLC, amedical device manufacturer located inOrange County, California, for almost fiveyears. At I-Flow, Ms. Wynne managed thecompany’s litigation and provided adviceon a variety of nonlitigation matters. AtMPP, she will continue to represent medicaldevice and pharmaceutical companiesin product liability litigation and providerisk management and nonlitigation adviceto those same clients. Marge MotluckFor The Defense ■ April 2013 ■ 11

Young LawyersFrom the ChairBy James L. PattilloLeadership—Synonymouswith ServiceDFoClYou don’t have to be aleader to get involved inthe YLC, you becomeone—and a betterlawyer—by doing so.InsuranceLaw:Sandy andthe CivilAuthorityProvisionTheEmergingPlaintiffs’ReptileStrategyPreservationof ESIWorkProductProtectionAppellateAdvocacy:LessonsfromPoliticsModernizing MSPCost ContainmentProtocols12 ■ For The Defense ■ April 2013■ James L. Pattillo is a litigation partner with the Birmingham, Alabama, law firm of Norman Wood Kendrick & Turner. His practiceareas include insurance litigation, product liability, professional liability, and commercial litigation. Mr. Pattillo has extensivetrial experience, having first-chaired over 50 trials to verdict. He is the chair of the DRI Young Lawyers Committee and hasserved in numerous committee leadership roles over the past 10 years.

econstructingod Labelingass ActionsCorporateMirandaWarningsAs I prepare for the Young Lawyers Committee fly-in meeting andsee the roster of lawyers on the steering committee, I am amazed.We aren’t just assembling in Chicago to rubber stamp an extensivelist of activities that comprise the Young Lawyers Committee(YLC). I have the privilege to lead a team of leaders.Not only are they leaders in the YLC, they areleaders in their firms and communities. In reflectingon that team, it strikes me that each persontook the courage to sign up for their first seminaror attend their first young lawyer networkingevent, likely not knowing a single person. Thereare dozens of examples on our team of people whohave simply volunteered for a simple job or taskand did it well and on time.The call for you is to be a part of this growingand vibrant group. You don’t have to be a leader toget involved in the YLC, you become one by doingso. Like most places in life, opportunity begetsmore and bigger opportunities when some reliabilityand ingenuity are applied. Those wordsdescribe each person who becomes involved inthe work and business of the YLC. Do those wordsdescribe you?We are hosting networking events around thecountry this spring. If you are a member of theYoung Lawyers Committee you should be contactedabout an event in your city very soon (possiblybefore this column hits your desk). Attendand find out more about all we have going on.These events point to our seminal event, theYoung Lawyers Seminar. This year it will beJune 20–21 in Las Vegas at the Cosmopolitan.The theme will focus on business development,understanding generational differences, and skillsrequired of successful associates. Not only willyou receive great continuing legal education andnetworking opportunities, we will also debut our“Fast-Pitch” program. In this program, you willhave an opportunity to fire your business pitcheson actual in-house counsel and get feedback fromthem. This is a first-come, first-served limitedopportunity. Sign up soon!The best way to get involved on a broader scaleis to attend the business committee meeting onThursday afternoon of the seminar. You will hearabout the activities of each subcommittee andlearn about the application process for the steeringcommittee. So come take advantage of all Vegashas to offer! (OK, maybe not all Vegas has to offer,but at least the things that don’t “stay” in Vegas).While the June seminar is the most visible ofall our activities, there is a lot we do that providesleadership opportunities for young lawyers. Thereis no better place to build your resume. We have21 active subcommittees, each with a chair andat least one vice chair. These leadership positionsare merit-based and are assigned via an applicationprocess each summer. The steering committeeis slated at the end of the summer and officiallyinstalled at DRI’s Annual Meeting in October.While there are always more applications thanavailable positions, the positions change on anannual basis, allowing young lawyers to serve ina variety of ways during the 10-year period thatdefines one as a “young lawyer.”There are many who are taking advantage of theopportunities outside our formal steering committee.This issue of For The Defense is a great example.We have 11 articles on the cutting edge of legal issuesthat were authored by young lawyers both inthe United States and internationally. We also publisha monthly electronic newsletter, The Whisper,with news, commentary, and updates on our committeeactivities. Finally, many of our young lawyerscontribute regularly to DRI’s online presenceat DRI Today and the DRI Blog. In short, publicationopportunities are replete. This is a great firststep into young lawyer leadership.It does not take long to realize that in the YLC,leadership is synonymous with service. As I wrotein my recent column for the The Whisper, serviceis synonymous with the practice of law. Our clientsdemand and deserve consistent work productdone reliably and on time. These are the samecharacteristics that DRI leaders exhibit every day.Getting involved in leadership will no doubt makeyou a better lawyer and a better service providerto your clients.Last of all, I would be remiss not to expresspublic thanks to Jenifer Heis of Ulmer & BerneLLP in Cincinnati and Kelly Jones of Harris Beach,PLLC in New York City. Jeni and Kelly are the vicechair and second vice chair of this committee,respectively. Their hard work, innovative ideasand friendship are invaluable to the success ofthis unparalleled group. Together, we invite andlook forward to your involvement in the YoungLawyers Committee beginning with attendance atthe Young Lawyers Seminar, June 20–21 in Vegas,baby!For The Defense ■ April 2013 ■ 13

Young LawyersJust Add CMSGuidanceBy John V. Cattie, Jr.Modernizing MSPCost ContainmentProtocols2013 appears to bethe year when settlingparties’ roles andresponsibilities will be“cemented” into place.2013 appears to be a watershed year for the Medicare SecondaryPayer (MSP) program, one that may have a drasticeffect on your practice given some proposed changes to theMSP program.You could think of the MSP like concrete.Among other things, concrete consists ofcement, gravel, sand, and water. Whencombined, these separate and distinct componentstransform into a powerful bondingagent. But all components must be presentto give the concrete its strength. This articleexplains the different components of theMSP in light of recent guidance, and howthese components collectively strengthenMedicare’s recovery rights.Like concrete, the MSP (42 U.S.C.§1395y(b)(2), as amended by the StrengtheningMedicare and Repaying Taxpayers(SMART) Act of 2012, Pub. L. 112-242, 126Stat. 2380), also consists of separate componentsthat must all be addressed formaximum compliance. These componentsare Medicare Medicaid SCHIP ExtensionAct (MMSEA) Section 111 (Section 111)reporting, conditional payment reimbursement,and future medical expenses. Metaphorically,one could think of Section 111as the gravel, conditional payment reimbursementas the cement and future medicalexpenses as the sand. The Centers forMedicare and Medicaid Services (CMS)will add the water this year by issuingregulations operationalizing the SMARTAct and guidance for MSP compliance onfuture medical expenses. Once those regulationsare issued, the MSP will morphfrom a bag of cement into industrial gradeconcrete, as it develops a strong foundationupon which MSP compliance programs canbe built.Medicare may collect double damagesplus interest from parties responsible forreimbursing Medicare when the partiesdo not reimburse Medicare for conditionalpayments. 42 U.S.C. §1395y(b)(2)(B)(iii).But does this priority right of recoveryapply evenly to future medical expensesas well as to past medical expenses? Doesthis priority right of recovery apply evenlyto defendants as well as to plaintiffs? Atthe heart of the confusion surroundingMSP compliance is identifying who isresponsible to Medicare for future medicalexpenses, referred to as “future medicals.”14 ■ For The Defense ■ April 2013■ John V. Cattie, Jr., of Garretson Resolution Group in Charlotte, North Carolina, focuses on Medicare Secondary Payer compliance.The Garretson Resolution Group is a provider of party- neutral outsourced medical lien resolution, Medicare Set Aside andcomplex settlement administration services. Mr. Cattie is currently vice chair of the DRI Medicare Secondary Payer Task Force,and is a consistent contributor to DRI articles, blogs and webcasts.

This article has two purposes: (1) toexplain the term “conditional payment” asMedicare applies it; and (2) to clarify howadding “water” in the form of regulationsaffects defendants and insurance carrierswith respect to future medicals. Outsidethe scope of this article is a detailed discussionof potential regulations CMS mayimplement to operationalize the recentlyenacted SMART Act. Id.The Composition of Concrete:MSP Recovery ObligationsAt times, Medicare may make paymentsfor medical services for which the programexpects reimbursement. The paymentscover medical services that beneficiarieshave already received. These paymentsare known as “conditional payments,” andunder the MSP, Medicare must be reimbursedfor the conditional payments thatit makes. 42 U.S.C. §1395y(b)(2)(B)(ii). Conditionalpayments represent one key componentof the MSP. When parties resolvetheir legal disputes in the form of a settlement,judgment or other payment, thoseevents trigger Medicare’s recovery right.Future medicals represent another keyrecovery piece of the MSP. In lump sumcompromise workers’ compensation settlementswhere the settlement agreementsallocate certain amounts for future injuryrelatedmedical expenses, Medicare will notpay for those expenses until the amount allocatedis exhausted by paying for an equalamount of those medical expenses. See 42C.F.R. §411.46(d)(2). CMS interprets theMSP to include a right to not pay certainfuture medicals when “payment has beenmade or can reasonably be expected to bemade.” 42 U.S.C. §1395y(b)(2)(A)(ii).We cannot fully understand Medicare’sright to remain a secondary payer postsettlement,by not paying for certain futuremedical expenses, without first understandingMedicare’s right to be reimbursedfor any conditional payments that it madeprior to settlement.The Cement of the MSP: ConditionalPayment ReimbursementMedicare does not automatically possess arecovery right under the MSP. Medicare’srecovery rights ripen when a primary planor payer, in resolving disputes involvingmedical expenses pled, claimed and/orreleased by a Medicare beneficiary, acceptsresponsibility (but not necessarily liability)for those expenses, which is demonstratedby a judgment or a payment conditionedupon a waiver, compromise, or release. 42U.S.C. §1395y(b)(2)(B)(ii). If a payer demonstratesresponsibility, then the payer andany entity that has received payment fromthe payer must reimburse Medicare for anyconditional payments made. Id.A “conditional payment” is an MSP termof art. Medicare defines a “conditional payment”as a Medicare payment for servicesfor which another payer is responsible. 42C.F.R. §411.21. Medicare makes a “conditionalpayment” when no one else hasaccepted responsibility for that medicalexpense or service. But the fact that Medicaremakes a “conditional payment” doesnot automatically mean that payment mustbe reimbursed. Federal law provides Medicarea recovery right only under certaincircumstances.Regulations previously promulgated byMedicare fill in the blanks created by theMSP statutory language. Medicare’s recoveryrights ripen under federal law onlyif: (1) a payer accepts responsibility for aclaimant’s medical expenses, and (2) thatresponsibility is demonstrated by a settlement,judgment, award, or other paymentconditioned upon the recipient’s compromise,waiver, or release (regardless of anydetermination or admission of liability)of payment for items or services includedin a claim against the primary payer or itsinsured). 42 C.F.R. §411.22. Thus, underMedicare’s own rules, a “conditional payment”is exactly what it sounds like: a paymentthat Medicare may make for items orservices when repayment is conditionedon the subsequent act of a payer acceptingresponsibility for those items or services,and such responsibility is shown by anobligation to pay for those items or serviceswhether by settlement, judgment, award,or otherwise.Medicare’s regulations also specifyexactly who is on the hook for conditionalpayment reimbursement. Without question,Medicare may pursue any entity thatmakes or receives payments, if conditionalpayments are not reimbursed. 42 C.F.R.§§411.24(e), (g). While Medicare has theability to cross- service a debt it is owed (i.e.,refer the eligible delinquent debt to the U.S.Department of Treasury for collection),and as a result, typically pursues a claimantand the claimant’s attorney for conditionalpayment reimbursement before pursuing aprimary payer, the CMS has demonstrateda willingness to pursue primary payers aswell. See United States v. Stricker, 2010 WL6599489 (N.D. Ala. Sep. 30, 2010); see alsoMedicare Financial Management Manual,Like sandis moresusceptible to nature’selements than cement,future medicals usuallyare more susceptibleto interpretation.CMS Pub. 100-06, Chap. 4, Section 70.3; seealso Debt Collection Improvement Act of1996, P.L. No. 104-134, 110 Stat. 1321, 1358(April 26, 1996); see also 31 U.S.C. §3720C.Importantly, provided CMS does notpursue legal action, the maximum amountreimbursable to the CMS is capped by thegross damages award. 42 U.S.C. §1395y(b)(2)(B)(ii). Beyond that amount, the payerhas not accepted responsibility for and cannotbe held liable to Medicare for any additionalfunds. Medicare’s recovery rights,outside that gross award for which a payerhas accepted responsibility, have not ripened.If CMS does not have to pursue alegal action to recover, then it will recoverthe lesser amount of the conditional paymentamount compared to the gross award.42 C.F.R. §411.24(c)(1). If CMS is forced totake legal action against a payer to recoverconditional payments, then it may seek torecover twice the amount of those conditionalpayments. 42 C.F.R. §411.24(c)(2).Medicare also has promulgated certainregulations that primary payers shouldheed in particular. Medicare advises thatif a beneficiary or other party that receivespayment from a primary payer does not reimburseMedicare timely, the payer mustreimburse Medicare even if it has alreadyreimbursed the claimant or the other party.For The Defense ■ April 2013 ■ 15

Young Lawyers42 C.F.R. §411.24(i)(1). Those same provisionsalso apply if a primary payer disbursesproceeds to a claimant and knows or shouldhave known that Medicare has made a conditionalpayment. 42 C.F.R. §411.24(i)(2).Situations involving procurement costsfollow a different set of rules. 42 C.F.R.§411.24(i)(3). These rules apply when counselrepresents a claimant. Instead of 42According to the ANPRM,the individual or Medicarebeneficiary would be requiredto satisfy Medicare’s futureinterest by selecting one ofseven proposed options.C.F.R. §411.24 dictating how much Medicarecan recover for a conditional payment,42 C.F.R. §411.37 becomes the operativeregulation. Medicare advises that if it seeksrecovery from a payer, in accordance with42 C.F.R. §411.24(i), then it will recovernothing more than is permitted under 42C.F.R. §411.37(c), §411.37(d), or §411.37(e).42 C.F.R. §411.37(b).These three subparts prohibit Medicarefrom recovering more than the grossaward from where Medicare is not requiredto take legal action to recover. When aconditional payment amount is less thanthe gross award, Medicare recovers a percentageof the amount of the conditionalpayments that it made, determined afterapplying a ratio of procurement costs to thegross award. 42 C.F.R. §411.37(c). When aconditional payment amount exceeds thegross award, Medicare recovers the totalamount of the gross award less total procurementcosts. 42 C.F.R. §411.37(d). Ifthe CMS incurs procurement costs when itattempts to recover for a conditional paymentdue to opposition from the claimant,Medicare recovers the lesser of the totalconditional payment or the gross award,minus the claimant’s total procurementcost. 42 C.F.R. §411.37(e). Where (1) theCMS makes conditional payments for16 ■ For The Defense ■ April 2013injury- related care after a Medicare beneficiaryreceives the care; and (2) a primarypayer accepts responsibility for the beneficiary’smedical costs as evidenced in a settlement,judgment, or award by a primarypayer, thereby triggering Medicare’s recoveryright, parties need to ensure a reimbursementprocess exists to repay CMSfor its conditional payments. The procurementcost offset rules lead one to the conclusionthat claimant’s counsel is bettersituated to address conditional payments,but also that defense counsel should ensurea formal process is established (by utilizingrelease language containing representationsand warranties from plaintiff andevidence of lien satisfaction as a conditionsubsequent to the agreement). By followingthese rules, a payer’s liability to Medicarefor conditional payments will not exceedthe amount of the gross settlement, judgment,or other payment amount.Can CMS Make a Future“Conditional Payment”?With this foundation, we can considerwhat kind of recovery right Medicare hasregarding future medicals. More importantly,we can identify which parties haveexposure to Medicare if that recovery rightis not addressed compliantly. Specifically,would payments made by Medicare for aclaimant’s future injury- related care qualifyas “conditional payments” as defined byMedicare under the regulations?Though widely perceived that Medicareregularly makes “conditional payments”for future medicals, potentially exposingthe insurance industry to penalties forfailing to repay such payments, the truthis that this happens rarely. It would onlyhappen if the settling parties collectivelyneglected to address conditional paymentreimbursement and Medicare’s right toremain a secondary payer post- settlementat the time of the settlement.It is best to collaborate with plaintiff’scounsel to address Medicare’s recoveryrights as part of a judgment. Specifically,a defendant should insist on verification ofMedicare entitlement and evidence that arecovery record has been established withCMS, as well as satisfaction of any conditionalpayment reimbursement obligationas a condition subsequent to the settlement.This process enables defendants or insurancecarriers to save time, resources, andmoney on these activities, which yields costsavings on an individual claim-by-claim basis,and significant savings over time withoutsacrificing risk management principles.Remember that a “conditional payment”under the MSP is a payment that Medicaremakes for services for which another payeris responsible but for which that payer hasnot yet accepted responsibility. 42 C.F.R.§411.21. So, would a payment made byMedicare after another payer has acceptedresponsibility as part of settlement andwhen no additional claims are pendingwith the payer be deemed a “conditionalpayment”? Probably not, and the payer hascomplete control to ensure that the answeris a resounding “no,” when implementingthe principles set forth above.Post- settlement Medicare paymentscannot be defined as true “conditionalpayments.” When Medicare makes a postsettlementpayment, no other payer has yetto accept responsibility. That is, as long asthe payer has accounted for all the claimsthat would fall within the settlement to ensurethat no additional claims are pending.Conditional payments are about timing.Medicare made a payment that someother entity should have made. As the statutedoes not expressly state as much, regulationsare needed. So, how could there bea future conditional payment? In reality,there should not be one, provided the partiesfollow a uniform process for addressingthis obligation.The Sand of the MSP: Future MedicalsWe now turn to anticipated future medicalexpenses and current MSP obligations.If conditional payments are the cement(regulations are in place, though they willbe strengthened later this year per theSMART Act), future medicals representthe sand. Like sand is more susceptibleto nature’s elements than cement, futuremedicals usually are more susceptible tointerpretation.Historically, parties have disagreedabout MSP obligations. On one side ofthe spectrum, the argument goes thatthe MSP does not address Medicare setasidearrangements (MSAs) specifically orbroadly address future medicals. Therefore,the MSP does not impose obligations onother payers regarding future medicals. On

the other side of the spectrum is the argumentthat since CMS states its right not topay future medicals in liability settlementsstems from the same part of the statute asits right not to pay future medicals in theworkers’ compensation context, partiesmust fund an MSA in nearly all liabilitysettlements meeting certain conditions.The truth is somewhere in the middle.Remembering that we have a statute butno regulations to date, this author and hiscolleagues have always said that as long assettling parties have: 1) a reasonable interpretationof the MSP on future medicals,2) documented this reasonable interpretation,and 3) can produce it to CMS officialupon request, then CMS most likelycould not otherwise sanction the parties.General Electric Company v. United StatesEnvironmental Protection Agency, 53 F.3d1324, 311 U.S. App. D.C. 360 (D.C. Cir.1995). This approach is similar to wearingboth a belt and suspenders. A ruleor requirement establishing a substantivelegal standard cannot take effect until theCMS issues a regulation on point, and asmentioned, CMS has not yet issued one. 42U.S.C. §1395hh(a)(2).The Water of the MSP: ANPRMCMS has been working to establish a substantivelegal standard since last year. OnJune 15, 2012, CMS issued an advance noticeof proposed rulemaking (ANPRM) regardingfuture medicals and liability settlementsunder the MSP. http://www.regulations.gov/#!documentDetail;D=CMS-2012-0073-0001(last visited Mar. 7, 2013). The ANPRM containsa “proposed general rule” and seven“proposed options.” The proposed generalrule states:If an individual or Medicare beneficiaryobtains a “settlement” and hasreceived, reasonably anticipates receiving,or should have reasonably anticipatedreceiving Medicare covered andotherwise reimbursable items and servicesafter the date of “settlement,” heor she is required to satisfy Medicare’sinterest with respect to “future medicals”related to his or her “settlement”using any one of the following options.It is difficult to overstate the significance forinsurers if CMS issues a final rule adoptingthis proposed general rule verbatim.The proposed general rule contains twocriteria. First, a claimant must obtain a“settlement.” What CMS means to say here,and does in fact say within the ANPRMis that a claimant must obtain a “settlement,judgment, award or other payment.”Remember, claim resolution is one of thetwo criteria that will trigger Medicare’s priorityright of recovery. 42 U.S.C. §1395y(b)(2)(B)(ii).Second, future medicals must be in play.While the specific language might seemvague, particularly the “should have reasonablyanticipated receiving” language, aconservative reading leads to the reasonableconclusion that the future medicalscriteria may be triggered simply if plaintiffsFor The Defense ■ April 2013 ■ 17

Young Lawyersplead or release future medicals. Therefore,the proposed general rule would apply if(1) a claimant obtains a “settlement,” and(2) the pleadings or release language identify(either expressly or implicitly) futuremedical expenses as a component of theitems or services over which the primarypayer or its insured accepted responsibility.See GRG’s Comments to CMS onDefense attorneys mayconsider obligating claimantsto provide evidence thatfuture medicals havebeen addressed in someway, shape, or form aspart of the settlement.ANPRM, http://garretsongroup.staging.wpen-gine.com/assets/GRGClientAlert-CMS-6047-AN-PRM-final_v2_-8.15.12.pdf.Once the proposed general rule applies,the ANPRM identifies the next steps totake (presuming CMS adopts the ANPRMin its entirety). According to the ANPRM,the individual or Medicare beneficiarywould be required to satisfy Medicare’sfuture interest by selecting one of sevenproposed options. The very notion thatthe proposed general rule, once finalized,would contain a requirement is likely toquiet any debate about whether the MSPprovides Medicare a right to remain a secondarypayer post- settlement. Even CMS’workers’ compensation regulations do notimpose such a “requirement.” See 42 C.F.R.§§411.46, 411.47. A requirement to satisfyMedicare’s future medicals interest wouldexceed the obligations currently containedin the workers’ compensation regulations.The most interesting facet of theANPRM addresses who would be responsiblefor failing to consider Medicare’sfuture interests. Prior regulatory ambiguityabout future medicals has forced insurersto adopt certain protocols to insulatethemselves from exposure (whether actual18 ■ For The Defense ■ April 2013or perceived) to the CMS regarding MSPrelatedfuture medicals.A plain reading of the ANPRM, however,reveals that the CMS looks solely tothe individual or the beneficiary for satisfactionof Medicare’s future interests. Ifthis is true, the CMS will remove a majorhurdle for all constituents. By placing theonus on the plaintiffs’ bar to address, manage,and calculate the future medicals obligation,insurers can focus on their ownMSP obligations, namely (1) validatingthat conditional payment reimbursementhas occurred (as we discussed above), and(2) reporting certain information to theCMS to comply with Section 111. See 42U.S.C. §§1395y(b)(2)(B)(ii), 1395y(b)(8).While perhaps inconsistent with settlingparties’ previous understanding, thisconclusion is perfectly consistent with previousstatements that the CMS has madeabout future medical services under theMSP. In the workers’ compensation context,the CMS states the following aboutfuture medical services: “If Medicare’sinterests are not considered, CMS has apriority right of recovery against any entitythat received a portion of a third party paymenteither directly or indirectly.” Introductionto WC, Centers for Medicare andMedicaid Services, http://www.cms.gov/Medicare/ Coordination-of-Benefits/WorkersCompAgencyServices/workerscompensationoverview.html (last visited Mar. 7, 2013).Rarely would a defendant or carrier bedeemed an entity that received a portion ofa third-party payment. Defendants or carriersmake the payment as a primary payeror its insured. The ANPRM, if adopted insuch a manner as to identify which party isresponsible for ensuring Medicare’s futureinterests are satisfied, would validate thiscurrently existing guidance.When the DRI Medicare SecondaryPayer Task Force submitted comments tothe CMS on behalf of DRI in response to theadvance notice of proposed rulemaking, themembers sought clarification on this point.Medicare Secondary Payer Task Force,DRI.org, http://www.dri.org/News/MSP (thenfollow “DRI Formal Comments to Centersfor Medicare and Medicaid Serviceson Proposed Rulemaking” hyperlink) (lastvisited Mar. 7, 2013). Though the task forcebelieves that the current language providessufficient clarity, it may not soothe the mostconservative carrier or self- insured entity.Clarification from the CMS in the final regulationswould allow entities to keep filespermanently closed without fearing thatCMS will seek post- settlement dollars, providedthat conditional payments have beenreimbursed.Other groups such as the AmericanInsurance Association (AIA) agree:We understand that the proposedoptions do not seek to place any obligationson an insurer or self- insured withrespect to “future medicals,” as there isno statutory authority permitting CMS toimpose any such obligation or granting ita right of recovery against an insurer orself- insured with regard to “ future medicals”(emphasis added). CMS’ lack ofauthority with respect to insurers andself- insureds regarding “future medicals”underscores the importance ofproperly focusing the seven optionssolely on beneficiaries.Am. Insurance Ass’n, AIM MedicareMedicaid Task Force Comments onCMS-0647-ANPRM, available at http://www.regulations.gov/#!documentDetail;D=CMS-2012-0073-0059 (last visited Mar. 7,2013).DRI and the AIA agree that future medicalsare claimants’ task to handle, andclaimants alone have exposure to the CMS.This author and his colleagues agree. Muchlike addressing conditional payments,claimants are best situated to address thefuture medicals obligation. Plaintiffs haveaccess to the key data needed to make aninformed decision. Defense attorneys mayconsider obligating claimants to provideevidence that future medicals have beenaddressed in some way, shape, or form aspart of the settlement.Future Medicals Compliance WhileAwaiting Final RegulationsWhile the ANPRM represents the directionCMS is heading, we are not quite there. Youmay ask yourself this: “How do I complyon this issue in the interim? I must ensure100 percent compliance, but can I do thatin a more cost- effective manner?” By piecingtogether opinions from three recentcases involving future medicals under theMSP, we can answer that question in theaffirmative.MSP Protocols, continued on page 73

Young LawyersIn the Wake ofHurricane SandyBy J. Tyler ButtsThe Scope ofCivil AuthorityProvisionsEvacuations orderedin the face of theapproaching “superstorm”suggest that one lesserknown insuranceprovision, the civilauthority provision, willbe significantly litigatedin the coming years.The Coming StormIn the days leading up to October 29, 2012, and in the faceof the approaching, nearly 1,000-mile-wide super- stormthat came to be known as Hurricane Sandy, states, cities,municipalities, and towns throughout theNortheast ordered the evacuation of hundredsof thousands of people from theirhomes and businesses. When the stormcame ashore, it brought with it drivingwind, torrential rain, and a devastatingtidal surge. While the vast physical propertydamage that Hurricane Sandy causedwas immediately apparent, the storm alsoimplicated a number of lesser- known andrarely litigated insurance provisions incommercial and business- owners propertyinsurance policies. The evacuations mentionedabove suggest that one such provision,the civil authority provision, will besignificantly litigated in the coming years.The goal of this article is to give timely, relevant,and practical consideration of businessinterruption or extra expense claimsarising from Hurricane Sandy evacuations.The Civil Authority ProvisionGenerally speaking, a civil authority provisionis designed to compensate or reimbursea business owner for lost profitscaused by the government shutting down,or otherwise prohibiting access to, an insuredbusiness. A typical example takesplace when some governmental body issuesan evacuation order that covers the area inwhich an insured business is located. Theeffect of such an order is not only to prohibita business owner or his or her employeesfrom opening and running the business,but also in effect to prohibit potential customersfrom physically patronizing thatbusiness even though the business itselfhas not suffered physical damage. All commercialactivity essentially ceases. As aresult, that business suffers lost incomefor every day that the evacuation orderremains in place. The longer the order ofcivil authority lasts, the longer the closureof the insured business, and the greater thepotential exposure for insurers.To offset the risk of a potentially devastatingloss caused by an order of civilauthority, many commercial and businessownersproperty insurance policies containa civil authority provision. Althoughthe language of a civil authority provisiondiffers markedly among policies, a typical■ J. Tyler Butts is an associate in the Hartford, Connecticut, office of Robinson & Cole LLP. He is a member of the firm’s InsuranceLitigation and Appellate Groups. He focuses his practice on property insurance coverage and bad faith litigation and currentlyholds a leadership position on the American Bar Association Section of Litigation Appellate Practice Committee.For The Defense ■ April 2013 ■ 19

Young Lawyersprovision provides that coverage is availableunder the policyfor the loss of Business Income andExtra Expenses which you incur due tothe actual interruption of your operationsduring the period of indemnitywhen a civil authority prohibits accessto your covered property due to directphysical loss of or damage to property,other than at the described premises,caused by or resulting from a CoveredCause of Loss.The goal of civil authority coverage is plain,but demonstrating the right to payment ina particular circumstance requires certainshowings by an insured business. As theabove example provision demonstrates,an insured seeking recovery for lost businessincome or extra expenses must demonstrate(1) a civil authority took action;(2) the action prohibited access to thecovered business; (3) the action directlyresulted from or was because of a directphysical loss or damage; (4) the direct physicalloss or damage causing the civil authorityaction happened at a location other thanat the described premises, meaning awayfrom the covered property; and (5) the lossor damage that happened away from thedescribed location was caused by a coveredcause of loss as defined in the applicablepolicy.Furthermore, civil authority provisionscan include additional components thatdiffer materially from the sample provisionabove. For example, although someprovisions simply require that the damagecausing an evacuation or a civil authorityorder take place at some place otherthan at the described premises, some provisionsrequire that the damage actuallyoccur somewhere in the vicinity of the coveredproperty. Even then, the geographicscope of an “in the vicinity” element canvary from policy to policy and can rangefrom requiring that the damage happen to“adjacent” property, to within 100 miles,to some other range. Syufy Enters. v. HomeIns. Co., 1995 U.S. Dist. Lexis 3771 (N.D.Cal. Mar. 20, 1995) (requiring damage tohappen to “adjacent” property, interpreting“adjacent” as “denot[ing] a sense of physicalproximity,” and finding that a businesstwo blocks away was not adjacent to thedamage). Kushner Lagraize, LLC v. PhoenixIns. Co., 2009 U.S. Dist. Lexis 8157620 ■ For The Defense ■ April 2013(E.D. La. Sept. 9, 2009) (requiring damageto happen within 100 miles).Obviously, the further away a civilauthority provision permits the damageon which an insured predicates a claim tobe, the easier it becomes for an insured torecover under that provision. For example,in Assurance Co. of Am. v. BBB Serv.Co., 265 Ga. App. 35 (Ga. Ct. App. 2003),the civil authority provision did not havea geographic limitation but only requiredthat the damage happen somewhere “otherthan at the covered premises.” The insuredowner of several Wendy’s restaurantssought coverage for two and a half daysof lost income, caused when the countyordered evacuations as Hurricane Floydapproached. During the trial, the plaintiffalso presented evidence that the governmentalgroup that ordered the evacuationhad examined photographs of damage thatthe hurricane had caused in the Bahamasand that these photographs had, in part,motivated the evacuation decision. Id. at37. Therefore, the court found that the civilauthority order for the evacuation was aresult of direct physical damage to propertyother than the insured’s. Had the policyinstead required that the damage be adjacentto, or within 100 miles of, the property,the insured probably would not have beenable to recover.Additionally, some civil authority provisionsmay include a temporal element,requiring that an order of civil authority bein place for a certain period of time beforethe policy will begin to cover losses andcapping the coverage by offering it only fora certain length of time. A typical provisionmight require that “[t]he coverage forbusiness income will begin 72 hours afterthe time of that action and will apply fora period of up to three consecutive weeksafter coverage begins.” This time- elementprovision can easily serve to prohibit coveragein the case of a short evacuation andcan also assist insurers in measuring theirpotential total exposure in a worst-casescenario. For example, in BY Dev., Inc v.United Fire & Cas. Co., 2006 U.S. Dist. Lexis14703 (D. S.D. Mar. 14, 2006), authoritiesclosed a hotel in Deadwood, South Dakota,due to a nearby wildfire. The policy had a72-hour waiting provision similar to theone described above. In interpreting thatprovision, the court found that “the Plaintiffis entitled to recover only for lossesincurred… for longer than that amount oftime.” Because the civil authority order hadonly prohibited access for 54 hours, the insuredwas denied civil authority coverage.See also Kushner Lagraize, LLC v. PhoenixIns. Co., 2009 U.S. Dist. Lexis 81576 (E.D.La. Sept. 9, 2009) (interpreting a similar24-hour waiting period in an evacuationcaused by Hurricane Gustav).Insureds most frequently assert claimsfor civil authority coverage in the aftermathof catastrophic events, and as a result,courts have had limited opportunities todiscuss the breadth of the provided coverage.Most recently, insureds made claimsbased on the provision after the terroristattacks of 9/11 and the devastation causedby Hurricane Gustav in 2008, HurricanesRita and Katrina in 2005, and HurricaneFloyd in 1999. Briefly reviewing the lessonslearned from those cases will offer someclues about the coverage that business ownersmight expect and that courts might findappropriate for the evacuations caused byHurricane Sandy.It should go without saying that beforelooking to case law for answers, a practitionershould carefully examine the relevantlanguage of the specific policy, especiallyfor the wrinkles described above that canlimit coverage and simplify the analysis.Having a firm understanding of the variousissues that can arise in a claim groundedin a civil authority provision can mean thedifference between a successful defenseand an unavoidable insurance payment.Reactive vs. Preventive EvacuationsOne of the principle lessons derived fromthe civil authority litigation following 9/11and the recent hurricane disasters is thatfor a civil authority provision to apply, thecivil authority order must be in responseto damage that has already taken place,not in anticipation of the possibility offuture damage. As described below, thisrequirement comes directly from the clauserequiring that the order of civil authoritybe issued “due to direct physical loss of ordamage to property.” In other words, theremust be a nexus between past damage andthe present order.In the aftermath of the 9/11 terroristattacks, a wide variety of businesses allegedthat they had lost income, not as a result of

the destruction at the World Trade Centeror the damage to the Pentagon, butbecause of the Federal Aviation Administration(FAA) “ground stop” that bannedthe takeoff of all civilian aircraft in theUnited States after the attacks. The resultinglawsuits and case law make clear thatto recover under a civil authority provision,the civil authority action must be inresponse to actual damage, not in anticipationof future damage.In United Air Lines, Inc. v. Ins. Co. of theState of PA, 439 F.3d 128 (2d Cir. 2006), theplaintiff airline alleged that it lost income“caused by the national disruption of flightservice and the government’s temporaryshutdown of [Reagan National Airport].”Id. at 129. The Second Circuit found thatthe civil authority provision of the policywas not triggered by the FAA groundstop order because “[t]here was apparentlya temporary halt of flights into andout of the Airport on 9/11 before the Pentagonwas struck.” Id. at 134 (emphasisadded). In other words, the cessation offlights happened before any property damageto any adjacent structure occurred,namely, the Pentagon. Furthermore, thecourt found that the subsequent shutdownof Reagan National was not causedor prompted by the damage to the Pentagonbut by “fears of further attacks.” Id.Therefore, the shutdown of the plaintiff’sbusiness at the airport was not, as the policyrequired, a “‘direct result’ of damage toadjacent premises.” Id. at 135. But damageto the plaintiff’s business was the result of(1) preventive measures taken by the FAAbefore any nearby damage occurred, and(2) precautionary measures designed toprevent future harm.Similarly, in Paradies Shops, Inc. v. HartfordFire Ins. Co., 2004 U.S. Dist. Lexis30124 (N.D. Ga. Dec. 15, 2004), the plaintiff,an operator of airport gift shops, newsstands,and retail stores, sought to recoverlost business income allegedly suffered as aresult of the FAA ground stop. As a result ofthe ground stop, national air traffic came toa halt, and the constant flow of the travelingpublic that the plaintiff relied on similarlyceased. The U.S. District Court forthe Northern District of Georgia foundthat to be entitled to coverage under thecivil authority provision, the plaintiff wasrequired to establish that some order ofcivil authority was issued “as the directresult of the physical damage sustained bythe World Trade Center, the Pentagon, orthe field in Stony Creek Township, Pennsylvania.”Id. at *18. The court concludedthat the plaintiff could not meet this burdenbecause “the ground stop order wasissued as a result of the threat of additionalterrorist acts involving the nation’s airlinesand not because of the existing disasters.”Id. at *20.As with the 9/11 decisions, cases involvingevacuations in the face of impendinghurricanes make clear that to recover undera typical civil authority provision, the civilauthority action must be a direct result ofdamage that has already happened.In S. Texas Med. Clinics v. CNA Fin.Corp., 2008 U.S. Dist. Lexis 11460 (S.D. Tex.Feb. 15, 2008), the plaintiff medical clinicssought coverage for losses caused by evacuationorders issued two days before thelandfall of Hurricane Rita near the Texas-Louisiana border. In granting the insurer’smotion for a summary judgment, the courtcited the Second Circuit decision in UnitedAir Lines with approval. The court heldthat, in light of testimony that the evacuationorder was issued “due to… fear thatHurricane Rita would strike nearby” andnot “due to the actual physical damage thatoccurred in Florida and on oil rigs in theGulf,” the civil authority provision did notcover the clinics’ losses. Id. at *32–33. (“Therecord shows that [the] decision to evacuatewas based on the anticipated threat ofdamage to Wharton County. The only significanceof the prior damage to propertyoutside Wharton County was as an indicationof the harm that could result if HurricaneRita made landfall near WhartonCounty.”).As discussed briefly above, the case ofAssurance Co. of Am. v. BBB Service Co.,Inc., 265 Ga. App. 35 (Ga. Ct. App. 2003),involved an insured seeking coverage fortwo and a half days of lost income causedwhen the county ordered evacuations asHurricane Floyd approached. The evacuationorder specifically stated that the evacuationswere necessary “because of theserious threat to the lives and property ofresidents of Brevard County from HurricaneFloyd [and] [b]ecause of the uncertaintyof the path of devastating windsand storm surge.” Id. at 35. On its face,Generally speaking,acivil authority provision isdesigned to compensateor reimburse a businessowner for lost profitscaused by the governmentshutting down, or otherwiseprohibiting access to,an insured business.and given the cases discussed above, itwould appear that the insured in this casewould be out of luck and could not recover.Instead of relying on the text of the order,however, the insured presented evidenceduring the trial that the evacuation orderwas, in part, a response to damage thatHurricane Floyd had already caused in theBahamas. The court accepted that testimonyand determined that coverage didexist. BBB Service demonstrates that thenecessary analysis concerning evacuationorders and civil authority provisions isheavily fact- intensive and case- specific.Therefore, it may be quite difficult for aninsurer to defend a coverage decision successfullywith a motion for a summaryjudgment, at least as long as an insured canraise a factual dispute about whether anevacuation order was in response to damageand not in anticipation of it.Finally, the case of Dickie Brennan &Co. v. Lexington Ins. Co., 636 F.3d 683 (5thCir. 2011), illustrates what can happen if aplaintiff fails to present adequate evidenceto support coverage at the summary judgmentstage. As with BBB Service, the civilauthority provision in this case did notcontain a geographic limitation. In otherwords, if the plaintiff could plausibly allegethat the evacuation order that precededHurricane Gustav was directly related toproperty damage previously caused by thestorm, a claim for lost business incomeFor The Defense ■ April 2013 ■ 21

Young Lawyersmight succeed. Again, as in BBB Service,the evacuation order itself only referred tothe possibility of future storm damage. Id.at 684. (ordering an evacuation “becauseof anticipated high lake and marsh tidesdue to the tidal surge, combined with thepossibility of intense thunderstorms, hurricaneforce winds, and widespread severeflooding”). The plaintiff insured arguedThe further away a civilauthority provision permitsthe damage on which aninsured predicates a claimto be, the easier it becomesfor an insured to recoverunder that provision.that because Hurricane Gustav had alreadycaused damage in Cuba and Jamaica, thecivil authority provision applied. Id. Crucially,however, the plaintiff failed to introduceevidence to support that argument,and the court upheld the decision of thedistrict court, finding that the plaintiff had“failed to demonstrate a nexus between anyprior property damage and the evacuationorder.” Id. at 686.Sandy Evacuation OrdersThese cases make clear that to recoverunder a civil authority provision, the order,or, in the case of Sandy, the evacuation,must be in response to some damage thathas already taken place. Because Sandyaffected such a large area, it is virtuallyimpossible to examine the particulars ofeach evacuation order. However, examininga sample of orders from around theregion reveals the difficulties that insuredsmay have asserting claims for coverage.Babylon, New York, is a town of justover 200,000 people, located 40 miles tothe east of New York City on Long Island.On October 28, 2012, as Hurricane Sandyapproached, the town supervisor issuedExecutive Order 1 of 2012, declaring a state22 ■ For The Defense ■ April 2013of emergency and ordering the evacuationof certain beach communities and otherareas. The Executive Order stated, in part:[O]n October 28, 2012, and continuingthereafter, Hurricane Sandy is forecastto impact the State of New York,which will result in evacuations of thethreatened populations and poses animminent danger to public health, andpublic safety systems within the Townof Babylon.[T]his event may cause power outagesand extensive flooding; damage tohomes, businesses and transportationinfrastructure; the disruption of localwater supplies, and may result in personalhardships, displacing thousandsof families, as well as hamper the movementof emergency personnel, and willcontinue to pose a threat to the publichealth and safety.The executive order does not referencedamage already caused by HurricaneSandy, but it frames the evacuation as anecessary precautionary measure.Similarly, the town of Branford, Connecticut,located on Long Island Sound,ordered mandatory evacuations in a pressrelease on the night of October 28, 2012.The press release declared, in part: “Sandy’sstorm force winds are expected to affectBranford around midnight tonight and areexpected to become increasingly worse inthe succeeding 36 hours. Storm surges arepredicted to be worse than what we experiencedin Hurricane Irene and have beencompared to the 1938 Hurricane.” Onceagain, the decision by Branford officials toevacuate appeared to be driven by the factthat Sandy could or might bring significantstorm damage, not that storm damage hadalready taken place.In some cases, the evacuation orders donot specify a reason for an evacuation. Forexample, Manasquan, New Jersey, a boroughof less than 6,000 people on the NewJersey shore, ordered mandatory evacuationson October 27, 2012. No particularreason was given for the order on theborough’s website. Insurers facing civilauthority claims in similarly small townsmay encounter difficulties determiningthe precise when and why of evacuationsrelated to Sandy.The evacuation orders from Babylon,Branford, and many other locales thatwere affected by Sandy demonstrate thatthe primary concern in the minds of theauthorities ordering the evacuations wasthe impact that Sandy could have if it cameashore. Because of that, insureds may havea difficult time proving entitlement to civilauthority coverage. However, a difficulttime does not mean an impossible time,and insureds facing this situation may turnto Assurance Co. of Am. v. BBB Service Co.,Inc., 265 Ga. App. 35 (Ga. Ct. App. 2003),for guidance. They are likely to argue thateven though the evacuation orders do notdiscuss prior damage, Hurricane Sandydid, in fact, cause significant propertydamage and death in Jamaica, the Bahamas,the Dominican Republic, Cuba, andHaiti before any orders were issued in theUnited States. Similar to the insured in BBBService, 265 Ga. App. 35 (Ga. Ct. App. 2003),the insured here will need to produce testimonythat those making the evacuationdecisions were aware of the damage inthe Caribbean and that their actions weremotivated, in part, by that damage.Finally, it is important to keep in mindthat the damage that caused a Sandyrelatedevacuation must have been causedby a covered cause of loss as defined in therelevant policy. This requirement could beproblematic for policyholders when they donot have coverage for flood-caused losses.A large portion of the damage that Sandycaused resulted from flooding, storm surge,or both. Standard commercial or businessownersproperty insurance policies typicallydo not cover these causes of loss.Faced with that, an insured might arguethat an evacuation order was not solelya result of flood damage but also due toother causes of loss, potentially includingcovered causes of loss such as wind or fire.When a civil authority provision does nothave an anti- concurrent causation clause,how a court would handle such a claimis unclear. Surely a court would initiallyrequire an insured to demonstrate whatcaused a civil authority to issue an evacuationorder.Additional Issues in Zone AMore so than any other location affected byHurricane Sandy, “Zone A,” in New YorkCity, presents some additional civil authorityprovisions issues that have not yet beenlitigated. Zone A is a dense and populous

area of some 375,000 residents and consistsof portions of Manhattan, includingthe lower East Side and East Village, aswell as parts of Staten Island, Coney Island,Queens, Brooklyn, and the Rockaways.Similar to many other areas, Zone A wasevacuated before Sandy hit. Mayor MichaelBloomberg issued Executive Order 163 onOctober 28, 2012. As with many of theareas discussed above, the evacuation orderseems preventive, as opposed to reactive.Executive Order 163 states, in part:the National Weather Service is predictingthat a hurricane or tropical stormmay hit the City within hours.… ThisState of Emergency has been declaredbecause anticipated weather conditionsare likely to cause heavy flooding,power outages, and disruption of publictransportation and other vital services,and these conditions imperil thepublic safety.Were that the only executive order forZone A, the applicable analysis would bethe same as the analysis discussed above.After Sandy hit, however, the mayor issueda number of additional executive ordersthat might affect interpreting a civilauthority claim.On October 31, 2012, Mayor Bloombergissued Executive Order 165, which, in thesecond paragraph, stated: “WHEREAS,as forecasted, a severe storm hit New YorkCity in recent days, causing heavy flooding,power outages, and disruption of publictransportation and other vital services.”Executive Order 165 indicated that ExecutiveOrder 163 “remain[ed] in effect,” exceptthat owners, residents, and employees ofbusinesses were permitted to reoccupybuildings in Zone A upon a determinationby the Department of Buildings that reoccupationwas permitted.Executive Order 165 presents interestingquestions in connection with a civilauthority insurance claim. First, is ExecutiveOrder 165 a separate act of civil authoritythat could, separate and independentfrom Executive Order 163, trigger coverage?Faced with the distinction betweena reactive and preventive civil authorityorder, an insured in Zone A might advancethat exact argument. Such an argumentwould allow the insured to point to the“whereas” clause of Executive Order 165as proof that the evacuation was orderedas a result of damage that took place whenSandy came ashore. Obviously, an insurerwould likely argue that Executive Order 165simply modified Executive Order 163 andthat only Executive Order 163 should matterfor the purposes of a civil authority provisionanalysis.Although an insured may succeed inarguing that Executive Order 165 is a separateevacuation order, issued in responseto Sandy damage, the insured would stillface a steep climb recovering any moneybecause of the civil authority insuranceprovision requirement that an evacuationorder “prohibit[ ] access” to the coveredproperty. Courts have interpreted thisrequirement as meaning that no one couldhave access to the property. In Abner, Herman& Brock, Inc. v. Great Northern Ins.Co., 308 F. Supp. 2d 331 (S.D.N.Y. 2004),the plaintiff insured claimed that post-9/11 traffic restrictions made it difficultfor employees to come to the office, despitethe fact that pedestrian traffic and publictransportation was functioning. The courtfound that the insured was only entitledto coverage for the period of time duringwhich people were completely prohibitedfrom accessing the premises, not for thelonger period of time during which accesswas merely made more cumbersome due tothe rerouting of traffic.Similarly, in TMC Stores, Inc. v. FederatedMut. Is. Co., 2005 Minn. App. Lexis585 (Minn. App. Ct. 2005), the insured storesought coverage as a result of damage to itsparking lot caused by a nearby constructionproject. The court found that it wasundisputed that the store had remainedopen although ease of access for customerswas diminished. The court noted thataccess was not prohibited “[e]ven if moredifficult or less convenient access discouragedcustomers from patronizing” theinsured’s store. The court did note that ifthe store had demonstrated “a virtual economicshutdown,” it would have been “amore difficult case.”The terms of Executive Order 165allowed certain people, including employees,to return to the covered premises. Aninsured arguing that Executive Order 165was a new evacuation order would have adifficult time making an internally consistentargument for coverage because the insuredwould have to admit that it and/or itsemployees were allowed back into its businesswhile continuing to maintain that theevacuation order prohibited access to thebusiness.Whether a civil authority provisionapplies in that case could conceivably turnon the nature of the business. If the businesswas one that does not require muchdirect or everyday contact with customersor clients, such as a large law firm, thefirm would have difficulty arguing thatthe firm’s operations were shut down if allemployees were allowed to go to work. Conversely,a business that heavily depends oncustomer traffic, such as a corner bodega,would have a stronger argument for coveragebecause even under Executive Order165, the general public was still prohibitedfrom accessing Zone A. Even in the situationof the bodega, however, an insurercould argue that the bodega’s main clientbase, people who lived and worked in thearea, were in fact allowed into Zone A byExecutive Order 165. In that case, the orderwould not directly prohibit accessing thebusiness. The insured would then have todemonstrate that customers were not ableto access the business, or that the businesssuffered an economic shutdown.ConclusionHurricane Sandy has the potential to generatea significant amount of litigationsurrounding civil authority provisions ininsurance policies. Businesses that lost significantrevenue as a result of the evacuationorders will be eager to recover theirlosses. Many businesses may find it difficultto establish the elements necessary tosucceed based on a civil authority provisionclaim. Although a typical provisionrequires that a civil authority action havebeen in response to damage, it appears thatmany of the evacuation orders were issuedin preparation for Sandy’s arrival and notas a result of prior Sandy damage. Additionally,if an insured is able to prove thatan evacuation was ordered as a result ofSandy damage, they will still have to showthat the prior damage was due to a coveredcause of loss and that access to the businesswas prohibited. Given that, it may be difficultfor many insureds to recover for lossof income caused by Sandy- related evacuations.For The Defense ■ April 2013 ■ 23

Young LawyersNot Real Froot?By Nilda M. Isidro,Anne A. Gruner,and Carla R. PasqualeA broad overview of thetypes of claims broughtin these cases, as well asvarious issues to considerwhen responding,including removal,standing, preemption,primary jurisdiction,insufficiency of variousclaims, and settlement.Deconstructing FoodLabeling ConsumerClass ActionsProduct liability lawsuits have traditionally arisen in thepersonal injury context, where the plaintiff generallyalleges that use of the product (or, in the case of foods andbeverages, ingestion of the product) caused his or herclaimed injury. There is, however, a newtype of product liability case on the rise thatdoes not focus solely on personal injury.Instead, plaintiffs’ focus is on alleged misrepresentationsmade in food labeling andadvertising. These lawsuits, often broughtunder state consumer protection laws prohibitingdeceptive conduct, seem to beincreasingly attractive to plaintiffs’ counselbecause these cases eliminate the requirementto prove medical causation, thusgreatly simplifying the case from plaintiffs’perspective. Additionally, some state lawsarguably do not even require that plaintiffsprove reliance on the allegedly misbrandedlabel, making class action certification significantlyless cumbersome.As plaintiffs increasingly begin to bringthese consumer class action lawsuits—which can include nationwide plaintiffsand sometimes result in sizable settlements—foodand beverage companies needto become aware of the types of claimsbrought, potential defenses, and steps thatcan be taken to avoid these lawsuits. Thisarticle provides the authors’ views of theseclaims, including a broad overview of thetypes of claims brought in these consumerclass action cases, as well as various issuesto consider in responding to such lawsuits,including removal, standing, preemption,primary jurisdiction, insufficiency of variousclaims, and settlement.Overview of Regulatory FrameworkGoverning Food LabelingSeveral prominent federal regulations governfood and beverage labeling and advertising.Foremost in this arena is the FederalFood, Drug, and Cosmetic Act of 1938(FDCA) which prohibits the sale or distributionof misbranded foods. Under the■ Nilda M. Isidro, Anne A. Gruner, and Carla R. Pasquale are associates at Goodwin Procter LLPin New York City. Ms. Isidro is a member of the firm’s Food Industry Group, which providesstrategic counseling to food, beverage, and supplement businesses on a range ofissues, including launches, regulatory compliance, litigation avoidance, and risk management.The authors are members of the firm’s Products Liability & Mass Torts Practiceand specialize in food, supplements, medical devices, and pharmaceuticals. This articlestates opinions of its authors, and does not necessarily represent opinions of GoodwinProcter LLP or its clients.24 ■ For The Defense ■ April 2013

FDCA, the Food and Drug Administration(FDA) has responsibility to protect publichealth and has promulgated regulationsregarding foods and beverages pursuant tothis authority. See, e.g., 21 C.F.R. pts. 100–199. The FDCA does not provide a privateright of action; rather, the FDA must bringan action to enforce regulations. See 21U.S.C. §337(a).With regard to product labels, §343(a)(1) of the FDCA states that a food is misbrandedif “its labeling is false or misleadingin any particular.” The term“misbranded” under the FDCA at leastarguably operates as the functional equivalentof “deceptive” under state laws, butbecause there is no private right of actionunder the FDCA, litigants’ claims may bedismissed if they would require courts tomake decisions related to FDA regulationspromulgated under the FDCA.The Nutrition Labeling and EducationAct (NLEA) is codified as part of the FDCAand specifically addresses certain food andbeverage labeling requirements, includingrequirements to identify artificial flavorson product labels (21 U.S.C. §343(k)) andto identify “imitation” products or ingredients.21 U.S.C. §343(c).The Organic Foods Production Act of1990 (OFPA) establishes national standardsfor the sale and labeling of organicallyproduced agricultural products, and createsa certification program through whichagricultural producers and products maybecome certified as organic. The UnitedStates Department of Agriculture (USDA)has promulgated regulations, known asthe National Organic Program (NOP), 7C.F.R. pt. 205, defining which agriculturalproducts qualify as organic. Courts haverecognized that Congress expressly preemptedindependent state certification lawsby enacting OFPA (see 7 U.S.C. §6507), butcertain courts have held that Congress didnot expressly preempt state tort claims,consumer protection statutes, and commonlaw claims so long as the requirementsat issue do not conflict with OFPA.See, e.g., Jones v. ConAgra Foods, Inc., No.C 12-01633 CRB, 2012 WL 6569393, at *2–6(N.D. Cal. Dec. 17, 2012) (citing Brown v.Hain Celestial Grp., Inc., No. C 11-03082 LB,2012 WL 3138013 (N.D. Cal. Aug. 1, 2012),petition to appeal denied, No. 12-80186 (9thCir. Dec. 17, 2012), motion to dismiss andmotion to strike denied, No. C 11-03082 LB(N.D. Cal. Dec. 22, 2012)).In addition to the various federal regulations,state laws can also be implicatedin consumer class actions relating tofood labeling. California—where a majorityof these consumer class actions arebeing filed—has a number of consumerprotection laws that class plaintiffs frequentlyinvoke, including the False AdvertisingLaw (FAL), Unfair Competition Law(UCL), and Consumer Legal Remedies Act(CLRA). Plaintiffs have similarly invokedanalogous consumer protection statutes inother states, such as the New Jersey ConsumerFraud Act.Claims Targeted by ClassAction Plaintiffs“All Natural”Among the consumer class action claimsthat plaintiffs bring alleging deceptivelabeling, some of the most common involveclaims that a food is deceptively labeled as“all natural,” “nutritious,” or “healthful.”American consumers have been increasinglypurchasing products that claim tohave “all natural” ingredients. Althoughthe FDA has not specifically defined whatfoods qualify as “natural,” a 1993 regulationstates that use of the term “natural”on a food label is not misleading when“nothing artificial or synthetic… has beenincluded in, or has been added to, a foodthat would not normally be expected tobe in the food.” 58 Fed. Reg. 2302, 2407(Jan. 6, 1993). Warning letters have alsoshed some light on what the FDA considers“natural.” For example, in November2011, the FDA issued a warning letterto Alexia Foods, concerning an “all natural”claim on their Roasted Red Potatoes& Baby Portabella Mushrooms product,which contained the synthetic chemicalpreservative disodium dihydrogen pyrophosphate.Warning Letter to Alex Dzieduszycki,Alexia Foods (Nov. 16, 2011).The synthetic chemical preservative was anadditive that the FDA said “would not normallybe expected to be in the food.”Lawsuits challenging “all natural”claims have frequently involved productscontaining ingredients such as high fructosecorn syrup, alkalized cocoa, factorymadeascorbic acid, and geneticallymodified organisms (GMOs). For example,plaintiffs sued Snapple Beverage Companyalleging its products labeled “all natural”contained high fructose corn syrup. FirstAmended Class Action Complaint & JuryDemand, Weiner v. Snapple Beverage Corp.,No. 07 Civ. 8742 (DLC), 2007 WL 4837756(S.D.N.Y. Nov. 20, 2007); see also ClassAction Complaint, Ries v. Hornell BrewingCo., Inc., No. CV10-01139 PVT ADR,2010 WL 2100662 (N.D. Cal. Mar. 17, 2010)(class action lawsuit alleging Arizona IcedTea is not “natural” because it containshigh fructose corn syrup and artificial citricacid). Nature Valley has also been thetarget of a class action suit based on granolabars allegedly containing high fructosecorn syrup, high maltose corn syrup,and maltodextrin, as well as GMOs. Complaint,Chin v. Gen. Mills, Inc., No. 0:12-cv-02150-MJD-TNL (D. Minn. Aug. 31, 2012);Class Action Complaint, Rojas v. Gen. Mills,Inc., No. 4:12-cv-05099 SBA (N.D. Cal. Oct.1, 2012). Similarly, consumers have broughtclaims against Frito Lay for its “all natural”claims on products (including Tostitos, SunChips, and bean dip) allegedly containinggenetically modified corn or soy, as well ashexane- extracted soybean oil. Class ActionComplaint, Deaton v. Frito-Lay N. Am.,Inc., No. 1:12-civ-01029-SOH (W.D. Ark.Apr. 2, 2012); Class Action Complaint, Altmanv. Frito-Lay N. Am., Inc., No. 0:12-cv-61803-WJZ (S.D. Fla. Sept. 13, 2012). Otherproducts targeted for purportedly containingGMOs have included Green Giant products.Class Action Complaint, Cox v. Gen.Mills, Inc., No. 3:12-cv-06377-WHA (N.D.Cal. Dec. 17, 2012). Products as varied ascookies, smoothie kits, canned tomatoes,cocoa, and cooking spray have been the targetsof consumer class actions challengingtheir labeling as “natural” based on a varietyof allegedly non- natural ingredients.See Class Action & Representative ActionComplaint, Jones v. ConAgra Foods, Inc.,No. 3:12-cv-01633 (N.D. Cal. Apr. 2, 2012)(challenging “natural” labeling on PAMcooking spray, Hunt’s canned tomato products,and Swiss Miss cocoa products); Complaint,Anderson v. Jamba Juice Co., No.12-CV-01213 YGR, 2012 WL 1576913 (N.D.Cal. Mar. 12, 2012) (challenging labeling ofsmoothie kit as “natural” based on ascorbicacid, steviol glycosides, xanthan gum,and citric acid content); Complaint, Larsenv. Trader Joe’s Co., No. 3:11-cv-05188-SIFor The Defense ■ April 2013 ■ 25

Young Lawyers(N.D. Cal. Oct. 24, 2011) (challenging “natural”label on a variety of products, includingcookies and apple juice, containingascorbic acid, xanthan gum, and/or otheringredients).“Healthful” ClaimsPlaintiffs also frequently challenge productsclaiming to be “healthful” when theyDefendantscan challengestanding early with a motionto dismiss, or later at thesummary judgment stage orin opposition to a plaintiff’smotion to certify a class.contain trans fat, high sugar content, highsodium content, or artificial colors. In aprime example of such a case, Lam v. GeneralMills, Inc., plaintiffs challenged thehealthful claims made by General Millson its Fruit Roll-Up snacks and other similarproducts. Class Action Complaint,No. 3:11-cv-05056-SC (N.D. Cal. Oct. 14,2011). The complaint alleged that, whilethese snacks were presented as healthfulby the company, they contained “transfat, added sugars, and artificial food dyes;lacked significant amounts of real, naturalfruit; and had no dietary fiber.” Id. 3.Another example of this type of claim isa class action lawsuit in which plaintiffsclaimed that defendant Ferrero’s Nutellawas falsely advertised under the New JerseyConsumer Fraud Act as a “nutritious,”“wholesome” food, while allegedly havinghigh saturated fat and sugar content. ClassAction Complaint, Glover v. Ferrero USA,Inc., No. 3:11-cv-01086-FLW-DEA (D.N.J.Feb. 27, 2011).Other Labeling ClaimsIn addition to claims falling under the “natural”or “healthful” category, class actionsuits have been brought alleging othertypes of alleged misrepresentations foundon food and beverage labels. For example,26 ■ For The Defense ■ April 2013in Williams v. Gerber Products Co., 552 F.3d934 (9th Cir. 2008), the plaintiffs arguedthat the packaging of Gerber’s Fruit JuiceSnacks displayed a variety of fruits, butthat in reality the only fruit in the snackwas white grape juice, and the two mostprominent ingredients were corn syrupand sugar. The plaintiffs in the class actionFishbein v. All Market Inc. claimed thatAll Market, Inc.’s VitaCoco coconut waterdoes not contain the amount of electrolytes(sodium, magnesium, and potassium)stated on the label, and that it does nothydrate more effectively than less expensivesports drinks despite being labeled“super hydrating.” Complaint, No. 1:11-cv-05580-JPO (S.D.N.Y. Aug. 10, 2011). In Khasinv. Hershey Co., No. 5:12-CV-01862 EJD,2012 WL 5471153 (N.D. Cal. Nov. 9, 2012),the plaintiffs challenged claims regardingnutrient content and antioxidant content inHershey chocolate products. Plaintiffs havealso alleged that an orange juice product isnot “100 percent orange juice” if it is processed,pasteurized, and has compoundsadded to it to mask taste. Veal v. CitrusWorld Inc., No. 2:12-CV-801-IPJ, 2013 WL120761 (N.D. Ala. Jan. 8, 2013). And, ina recent lawsuit, plaintiffs alleged thatYoplait Greek yogurt is neither “Greek”nor “yogurt” because it is made using milkprotein concentrate, rather than by straining.Summons & Complaint, Taradejna v.Gen. Mills Inc., No. 0:12-cv-00993-SRN-LIB(D. Minn. Dec. 10, 2012).Issues to Consider in DefendingFood Labeling Class ActionsRemoval to Federal Court Underthe Class Action Fairness ActIf a class action lawsuit is initially filed instate court, it may be possible for the defendantto remove the action to federalcourt under the Class Action Fairness Act(CAFA). Under 28 U.S.C. §1332(d)(2):The district courts shall have originaljurisdiction of any civil action in whichthe matter in controversy exceeds thesum or value of $5,000,000, exclusive ofinterest and costs, and is a class actionin which—(A) any member of a class of plaintiffs isa citizen of a State different from anydefendant;(B) any member of a class of plaintiffs isa foreign state or a citizen or subjectof a foreign state and any defendantis a citizen of a State; or(C) any member of a class of plaintiffsis a citizen of a State and any defendantis a foreign state or a citizenor subject of a foreign state.Certain limitations on original jurisdiction,based primarily on the proportion ofproposed class members who are citizensof the state in which the action was initiallyfiled, are set out in 28 U.S.C. §1332(d)(3) and (4). To determine whether the$5,000,000 threshold is met, the claimsof all individual class members are aggregated.28 U.S.C. §1332(d)(6).Plaintiffs may attempt to defeat removalby stipulating that the award sought iscapped at an amount below the $5,000,000amount-in-controversy threshold for CAFAjurisdiction, as was done in a recent putativeclass action originally filed againstFrito-Lay North America, Inc. in Arkansasstate court. Deaton v. Frito-Lay N. Am.,Inc., No. 12-01029 (W.D. Ark.). The defendantremoved the action to federal courtpursuant to CAFA, but the plaintiff thensought to remand by adding a stipulationto the complaint promising not to seek anydamages or award beyond the jurisdictionalthreshold. The stipulation was writtenin the first person (e.g., “I do not seekand will not accept…”). The court neverthelessheld that the stipulation was sufficientto bind the whole class, includingabsent class members, thus defeating jurisdictionunder CAFA. Deaton, 2012 WL3986804 (W.D. Ark. Sept. 11, 2012).A recent decision by the Supreme Courtof the United States, however, has limitedplaintiffs’ ability to use such tactics. InStandard Fire Insurance Co. v. Knowles, theCourt held that a class action plaintiff cannotdefeat federal jurisdiction by entering astipulation limiting damages prior to certificationof the class. No. 11-1450, S. Ct., 2013 WL 1104735 (U.S. Mar. 19, 2013).The Court’s holding was based on the factthat “a plaintiff who files a proposed classaction cannot legally bind members of theproposed class before the class is certified.Id. at *3.Challenging the Plaintiff’s StandingOne potential strategy for food companiesdefending class action suits againsttheir product labeling is to challenge the

named plaintiff’s standing to bring the lawsuit.Because standing must be establishedbefore a class can be certified, and beforea court arrives at the merits of a lawsuit,defendants can challenge standing earlywith a motion to dismiss, or later at thesummary judgment stage or in oppositionto a plaintiff’s motion to certify a class. Ifnone of the named plaintiffs has standing,the district court lacks subject matterjurisdiction.To establish standing under Article IIIof the United States Constitution, plaintiffsare required to demonstrate that theyhave suffered some actual or threatenedinjury. Some courts, such as the NorthernDistrict of Alabama in Veal v. CitrusWorld, Inc., No. 2:12-CV-801-IPJ,2013 WL 120761 (N.D. Ala. Jan. 8, 2013),also consider the “prudential” standingrequirements of 1) whether the plaintiff’sclaims fall within the zone of intereststhat the relevant statute protects or regulates;2) whether the complaint “raisesabstract questions amounting to generalizedgrievances which are more appropriatelyresolved by legislative branches”;and 3) whether the plaintiff asserts his orher own rights rather than those of thirdparties. See also Miller v. Ghirardelli, No.C 12-04936, 2012 WL 6096593, at *5 (N.D.Cal. Dec. 7, 2012) (citing same prudentialconsiderations).In consumer class actions brought infederal court, individual state consumerprotection statutes might impose standingrequirements in addition to Article IIIrequirements. For example, under Californiaconsumer protection statutes (UCL,FAL, and CLRA), a plaintiff only has standingto sue if he or she has suffered aninjury- in- fact and has lost money or propertybecause of the defendant’s conduct.Lack of InjuryAn attack on a plaintiff’s standing canprovide grounds for dismissal where thatplaintiff cannot establish an injury inthe context of food labeling claims. Forinstance, in Veal v. Citrus World, Inc., abreach of contract and breach of expresswarranty case, the Northern District ofAlabama found that the named plaintiffdid not have standing because he failed toallege an actual injury. He did not explainhow purchasing packaged, rather thanfresh-squeezed, orange juice caused himany injury. Nor did he properly allegefuture injury. The court also reviewed prudentialstanding considerations and determinedthat because the plaintiff did notallege the amount of the purported highervalue charged for the alleged deceptivelylabeled orange juice, and did not allegewhat the orange juice would have beenworth had it been the product the plaintiffbelieved it to be, the allegations werejust “generalized grievances” that would be“more appropriately resolved by the legislativebranches.” The court also rejected theplaintiff’s “benefit of the bargain” argument—thatthe plaintiff suffered injurybecause, had he known the truth about theorange juice, he would not have paid thehigher price.Nevertheless, certain courts have foundthat a showing of even a nominal economicinjury can amount to an injury- infact.In Ries v. Hornell Brewing Co., Inc.,No. 10-01139 RS, 2012 WL 597247 (N.D.Cal. Nov. 27, 2012), the court ruled it wassufficient for standing purposes that thenamed plaintiffs had testified they sufferedeconomic injury when they purchased theproduct for a dollar or two based on therepresentations on the product’s label. Furthermore,the court found that plaintiffsneed not show that the defendant’s allegedmisrepresentation was the only, or eventhe decisive, factor influencing plaintiffsto purchase the product. Similarly, in Khasinv. Hershey Co., the Northern Districtof California found that the plaintiff satisfiedArticle III and UCL standing requirementsand established injury- in- fact byalleging that he would not have purchasedthe product (and could have purchased acheaper alternative) had it been properlylabeled and had he known the ingredients.No. 5:12-CV-01862 EJD, 2012 WL 5471153.Lack of Future InjuryWhen plaintiffs seek injunctive relief, defendantscan point to a lack of future injuryto defeat standing. In determining whethera named plaintiff has standing to seekinjunctive relief, courts focus on whetherthe plaintiff has alleged future injury asa result of the defendant’s conduct. TheVeal v. Citrus World, Inc. court found thatthe plaintiff did not have standing to seekinjunctive relief because he did not explainhow the defendant’s conduct would causehim injury in the future. Similarly, whenruling on a motion to certify a class in Robinsonv. Hornell Brewing Co., No. 11-2183(JBS-JS), 2012 WL 6213777 (D.N.J. Dec.13, 2012), the District of New Jersey foundno Article III standing because the namedplaintiff had testified and stated in writtendiscovery that he would not purchase theIn determining whether anamed plaintiff has standingto seek injunctive relief,courts focus on whetherthe plaintiff has allegedfuture injury as a result ofthe defendant’s conduct.product in the future. Cf. Ries, 2012 WL597247 (holding that standing for injunctiverelief was satisfied because there wasno evidence in the record negating theplaintiffs’ stated intent to purchase the beveragesin the future).Lack of Standing to RepresentOther Class MembersAnother way for food industry defendantsto challenge standing is to argue thata named plaintiff lacks standing to bringclaims on behalf of class members whopurchased a different flavor or variety of aproduct than was purchased by the namedplaintiff. In Miller v. Ghirardelli, 2012 WL6096593, the Northern District of Californianoted that there is no controllingauthority on the issue of whether a plaintiffhas standing to allege claims for productshe or she did not purchase, notingthat some courts have held that a plaintifflacks standing to bring claims for productshe or she did not purchase, but othercourts have ruled that the standing questionshould be reserved and decided on amotion for class certification. This type ofstanding argument is strongest in casesin which the named plaintiff purchased aFor The Defense ■ April 2013 ■ 27

Young Lawyersproduct that is a totally different type ofproduct than those purchased by someother plaintiffs in the class (even if allproducts were manufactured by the samecompany). In Miller, the court found thatthe Ghirardelli products (which includedbaking chips, drink powders, and wafers)were not “substantially similar” enoughto confer standing on the named plaintiff.Standing argumentsare currently pending inconsumer class actionsbefore several districtcourts, so food industrycompanies should continueto monitor the emergingcase law on this issue.The plaintiff was challenging different languagein the labels of the various products,and the court held that the commonalitiesin the alleged misrepresentations on thelabels were not sufficient to confer standingon the plaintiff for the products he didnot purchase. Moreover, because the productsand labels were so dissimilar, the courtdeclined to wait until the class certificationstage to decide this issue, instead opting todismiss the plaintiff’s claims as to the productshe did not purchase. Courts have heldsimilarly in situations where the namedplaintiff did not personally purchase theproduct at issue. See Colucci v. ZonePerfectNutrition Co., No. 12-2907-SC, 2012 WL6737800 (N.D. Cal. Dec. 28, 2012) (findingone of two named plaintiffs lacked standingbecause, even though the other namedplaintiff (his wife) purchased the nutritionbars for him, he himself did not purchaseany of the bars).A number of courts, however, have ruledthat the named plaintiff has standing ifthere is enough similarity between thepurchased products and non- purchasedproducts, and between the purchased and28 ■ For The Defense ■ April 2013non- purchased products’ labeling. Whenanalyzing the similarities, courts considerwhether the products are of the same kindand include mostly the same ingredients, aswell as whether the product labels containthe same alleged misrepresentations. Forexample, in Anderson v. Jamba Juice Co.,No. 12-CV-01213 YGR, 2012 WL 3642835(N.D. Cal. Aug. 25, 2012), the court foundsufficient similarity to establish standingbecause all of the smoothie kits borethe same allegedly deceptive “All Natural”language despite containing ingredientsthe plaintiffs claimed were non- natural.See also Colucci, 2012 WL 6737800 (findingsufficient similarity where the productswere all nutrition bars of the same sizeand shape, bearing the same “All- NaturalNutrition Bars” label, and differed only inflavor).Standing arguments are currently pendingin consumer class actions before severaldistrict courts, so food industry companiesshould continue to monitor the emergingcase law on this issue.Federal Preemption of FoodLabeling ClaimsDefendants have recently had some successasserting federal preemption as a defenseto lawsuits challenging substantiation offood and beverage labeling claims. Thishas been particularly effective when thepreemption arguments focus on state lawclaims that require the defendants to omitor add language to their federally approvedor mandated product labeling.NLEA prohibits individual states fromimposing “any requirement respecting anyclaim of the type described by Section 343(r)(1) made in the label or labeling of food thatis not identical to the requirement of Section343(r).” In Turek v. General Mills, Inc.,662 F.3d 423 (7th Cir. 2011), the plaintiffs’claims were dismissed as preempted byNLEA. The plaintiffs claimed that the defendants’labeling for their “chewy bars”should have disclosed an allegedly nonnaturalfiber ingredient, inulin. Judge Posner,writing for the court, held that theseclaims were preempted because of NLEA’sstatutory requirement that the labeling state“the amount of… dietary fiber… containedin each serving size or other unit of measure.”Turek, 662 F.3d at 427. Therefore, theingredient disclaimer the plaintiffs soughtwas not identical to the NLEA labeling requirements,which require only identificationof amount of dietary fiber. Similarly, inLam v. General Mills, Inc., 859 F. Supp. 2d1097 (N.D. Cal. 2012), certain of the plaintiffs’claims were dismissed as preemptedbecause they conflicted with NLEA.The Veal v. Citrus World, Inc. court, afterholding that the plaintiff lacked standing,also addressed preemption, noting thatthe defendant’s orange juice labeling wascompliant with FDA regulations. 2013 WL120761. Because the FDCA and its implementingregulations govern the languageincluded on food and beverage labelingand the way that language is displayed,21 U.S.C. 343(f), the court noted that theplaintiff would not be able to escape preemptionof his state law claims. Veal, 2013WL 120761, at *9–10.However, some courts have held thatcertain state law consumer protectionclaims are not preempted because theyparallel or mirror the labeling requirementsunder federal statutes and regulations. InJones v. ConAgra, No. C 12-01633 CRB, 2012WL 6569292 (N.D. Cal. Dec. 17, 2012), thecourt rejected ConAgra’s argument thatNLEA expressly preempted the plaintiffs’state law claims, holding that the plaintiffs’claims were based on state laws that parallelthe requirements of NLEA. The courtalso declined to find conflict preemptionby NLEA of the plaintiffs’ claims becausethe relevant provisions in the Californiaconsumer protection statutes at issue weresubstantially the same as the provisionsof NLEA. Although the court recognizedthere is no private right of action to enforceprovisions of the FDCA pursuant to §337(a),the court also found that the Californiastatutes do not impose labeling requirementsdifferent from federal law requirementsand, thus, the FDCA did not preemptthe plaintiffs’ state law claims. Similarly,the court in Khasin found no FDCA orNLEA preemption where the plaintiffs’state law claims did not impose additionallabeling requirements and, thus, were parallelto federal law. 2012 WL 5471153.The Jones court held that the plaintiffs’organic food labeling claims were notexpressly preempted by OFPA because theclaims did not concern the organic certificationof the defendants’ food products,and because the Eighth Circuit had held

in In re Aurora Dairy Corp. Organic MilkMarketing and Sales Practices Litigation,621 F.3d 781, 792 (8th Cir. 2011), that OFPAdoes not expressly preempt consumer protectionstatute claims, state law tort claims,or common law claims. Because the courtfound that the plaintiffs’ state law claimsdid not conflict with OFPA’s requirements,the court ruled there was no express preemption.The court did not find conflictpreemption either, holding that the Californiastatutes did not impose organic labelingrequirements additional to those in OFPA.Federal preemption of food consumerclass action claims is being actively litigatedin courts throughout the country. InCalifornia, for example, the case law hasbeen shifting over the past year or so. Forinstance, the Ninth Circuit recently vacatedits decision in Degelmann v. AdvancedMedical Optics Inc., 659 F.3d 835 (9th Cir.2011), which was frequently cited to argueconflict preemption of plaintiffs’ state lawclaims when state law presents an obstacleto the completion of Congress’s objectives.699 F.3d 1103 (9th Cir. 2012). Otherrecent California cases have made referenceto primary jurisdiction in addition to(or instead of) federal preemption. (See discussion,infra.)As the body of preemption case law concerningfood labeling continues to grow, itremains to be seen what state law claimscan survive a federal preemption defense.Primary JurisdictionDefendants are increasingly alleging thedefense of primary jurisdiction in tandemwith their preemption arguments.This defense often arises in the context ofclaims that a defendant’s use of the terms“all natural,” “pure natural,” or anothersimilar variant on a product label is falseand misleading. Under the doctrine of primaryjurisdiction, defendants urge thecourt not to intervene when doing so wouldundermine the FDA’s comprehensive regulatoryscheme with respect to labeling pursuantto the FDCA. Case law provides thatthe primary jurisdiction doctrine enablescourts, in their discretion, to determinethat “initial decisionmaking responsibilityshould be performed by the relevant agencyrather than the courts.” Syntek SemiconductorCo., Ltd. v. Microchip Tech., Inc.,307 F.3d 775, 780 (9th Cir. 2002). The courtheld that the doctrine applies where fourelements are met: where there is “(1) theneed to resolve an issue that (2) has beenplaced by Congress within the jurisdictionof an administrative body having regulatoryauthority (3) pursuant to a statutethat subjects an industry or activity to acomprehensive regulatory authority that(4) requires expertise or uniformity inadministration.” Id. at 781–82. If primaryjurisdiction is employed, the court caneither stay proceedings or dismiss the casewithout prejudice. Id. at 781.This defense is particularly well suitedto situations where the FDA has promulgatedspecific guidelines based on agencyexpertise relating to the claims at issue.For example, in Astiana v. Hain CelestialGroup, Inc., No. C 11-6342 PJH, 2012 WL5873585 (N.D. Cal. Nov. 19, 2012), the courtdeclined to determine whether the defendants’use of the term “natural” on cosmeticlabels was false or misleading. Id. at *3. Itreasoned that doing so would “risk undercuttingthe FDA’s expert judgments andauthority.” Id. (citing Pom Wonderful LLCv. Coca-Cola Co., 679 F.3d 1170, 1177 (9thCir. 2012)). This was especially so becausethe FDA’s regulations for cosmetic labelingare “remarkably specific” and “[t]helevel of detail provided in these regulationsshows that the area of cosmetics labeling isindeed comprehensively regulated by theFDA.” Id. at *2.Similarly, in Pom Wonderful, the courtcited the specificity of FDA regulationswith regard to the naming and labeling offoods and beverages in finding the plaintiff’sclaims barred. See 679 F.3d at 1176–77. There, the plaintiff, Pom Wonderful,alleged that the Coca-Cola Company misledcustomers by labeling its Minute Maidjuice as “Pomegranate Blueberry,” eventhough those fruits allegedly only compriseda minute proportion of the product.See id. at 1172–73.The need for uniformity was a paramountconsideration in Taradejna v. GeneralMills, Inc., No. 12-993 (SRN/LIB), 2012WL 6113146 (D. Minn. Dec. 10, 2012),where the plaintiff challenged the labelingof Yoplait Greek yogurt, alleging that“‘Yoplait Greek yogurt is neither yogurt,nor Greek, as those terms are used in theindustry and as defined by regulation.’”Taradejna, 2012 WL 6113146, at *1 (quotingPl.’s Summons & Complaint 3). In additionto citing the specific FDA regulationsdefining standards of identity for yogurt(21 C.F.R. §131.200), the court emphasizedthat the FDA’s “decision on the permittedingredients in yogurt will ensurenational uniformity in labeling, utilizingthe Agency’s special expertise in thisregard.” Taradejna, 2012 WL 6113146, at *6.As the bodyof preemptioncase law concerningfood labeling continuesto grow, it remains to beseen what state law claimscan survive a federalpreemption defense.This was an added incentive for invokingthe primary jurisdiction doctrine, as severalother yogurt lawsuits involving similarissues were pending across the country. SeeClass Action Complaint, Conroy v. DannonCo., Inc., No. 12-CV-6901 (S.D.N.Y. Sept. 11,2012); First Amended Class Action Complaint,Smith v. Cabot Creamery Coop. Inc.,No. 3:12-CV-4591 (N.D. Cal. Oct. 9, 2012).Courts have neglected to apply the primaryjurisdiction doctrine where defendantsfail to demonstrate a need foruniformity or FDA expertise. In Jones, 2012WL 6569393, class action plaintiffs allegedthat various products were deceptivelylabeled as 100 percent natural when theypurportedly included chemical preservativesand other allegedly artificial ingredients.Lockwood v. ConAgra Foods, Inc.,597 F. Supp. 2d 1028 (N.D. Cal. 2009), alsoinvolved claims that the label of “all natural”on pasta sauce was misleading becausethe sauce included high fructose cornsyrup. In both cases, the court reasonedthat the FDA has been asked to define “natural”formally in the food labeling contextand it “has declined to do so becauseit is not a priority and the FDA has limitedresources.” Jones, 2012 WL 6569393, at *6For The Defense ■ April 2013 ■ 29

Young Lawyers(citing Lockwood, 597 F. Supp. 2d at 1034–35). Further, the Jones and Lockwood courtsheld that the FDA’s technical expertise wasnot required in this context because courtsroutinely decide whether conduct is misleading.See id. at *7 (citing Lockwood, 597F. Supp. 2d at 1035). In Jones, the court distinguishedTaradejna’s application of theprimary jurisdiction doctrine on the basisThe court found thatthe Froot Loops cerealbox would not mislead areasonable consumer intothinking that the productcontained actual fruit.that the FDA had proposed a rule specificallyconcerning the standard of identityfor yogurt. See id. at *6 n.4. The court alsodistinguished Astiana, citing an absenceof FDA guidance on the word “natural”in the cosmetics context, in contrast to anFDA policy statement on the subject in thefood context. Id.Courts will likely handle future cases ina fact- specific manner, with considerationof the regulations at issue, the need for uniformity,and FDA expertise being decidingfactors in whether to apply the primaryjurisdiction doctrine.30 ■ For The Defense ■ April 2013Breach of Express Warranty ClaimsBased on Magnuson-Moss Warranty ActPlaintiffs in numerous class actions involvingfood labeling claims have attemptedto establish a cause of action for breach ofexpress warranty under the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C.§§2301, et seq. These claims have largelybeen unsuccessful for a variety of reasons,and are typically dismissed with prejudice.The MMWA is expressly “inapplicableto any written warranty the making orcontent of which is otherwise governed byFederal law.” 15 U.S.C. §2311(d). Becausethe FDCA and its implementing regulationsgovern the labeling of foods and beverages,MMWA is inapplicable to food andbeverage labeling claims. Hairston v. S.Beach Beverage Co., No. CV 12-1429-JFW(DTBx), 2012 WL 1893818, at *5–6 (C.D.Cal. May 18, 2012).In addition, plaintiffs typically areunable to allege sufficient facts to establishthat food labeling meets the narrow definitionof “written warranty” establishedwithin MMWA. Under MMWA, a “writtenwarranty” is:(A) any written affirmation of fact orwritten promise made in connectionwith the sale of a consumer productby a supplier to a buyer whichrelates to the nature of the materialor workmanship and affirmsor promises that such material orworkmanship is defect free or willmeet a specified level of performanceover a specified period of time,or(B) any undertaking in writing in connectionwith the sale by a supplierof a consumer product to refund,repair, replace, or take other remedialaction with respect to suchproduct in the event that such productfails to meet the specificationsset forth in the undertaking.15 U.S.C. §2301(6). With respect to foodlabeling, plaintiffs typically are unable toallege that the label promises a defect- freeproduct or guarantees a level of performanceover a specific time period; claimssuch as “all natural” are considered productdescriptions, rather than promises thatthe product is defect- free or will perform acertain way. See Jones, 2012 WL 6569393;Anderson, 2012 WL 3642835 (dismissingMMWA claims without prejudice); Hairston,2012 WL 1893818. This disqualifiesfood labels as “written warranties” under15 U.S.C. §2301(6)(A). In addition, foodlabels typically do not promise refund,repair, or replacement if the product failsto meet specifications. Hairston, 2012 WL1893818, at *6. This disqualifies food labelsas “written warranties” under 15 U.S.C.§2301(6)(B). Courts have also held thatalleged artificial or synthetic ingredientsdo not constitute a “defect” for purposes ofMMWA, even though the product is labeledas “all natural.” See Colucci v. ZonePerfectNutrition Co., No. 12-2907-SC, 2012 WL6737800, at *6 (N.D. Cal. Dec. 28, 2012).The Common Sense Approach:Plausibility of ClaimsDefendants have also had some successinvoking common sense and plausibilityto challenge the sufficiency of plaintiffs’claims relating to food and beverage labeling.For example, to establish a deceptivelabeling claim under California statutes,plaintiffs must allege that a defendant’sproduct label is “likely to deceive a reasonableconsumer.” McKinnis v. KelloggUSA, No. CV 07-2611 ABC (RCx), 2007 WL4766060, at *3 (C.D. Cal. Sept. 19, 2007).Assessing this standard, several courtshave found that plaintiffs’ consumer classaction lawsuits alleging claims based onfood labels simply are not plausible. InVeal v. Citrus World, Inc., while findingthat the named plaintiff lacked standing topursue his claims, the court also criticizedthe plaintiff for allegedly believing that thepackaged orange juice was actually “freshsqueezed” orange juice. The court notedthat it is common sense that a containeron a grocery store shelf bearing an expirationdate several weeks later would nothold a “fresh” product. Similarly, in McKinnisv. Kellogg USA, the court found thatthe Froot Loops cereal box would not misleada reasonable consumer into thinkingthat the product contained actual fruit.The court opined that no reasonable consumerwould think that the name “FrootLoops,” which does not even properly spellthe word “fruit,” was describing the productas actually containing fruit. The courtfurther found that a reasonable consumerwould not think that the actual cerealpieces depicted pieces of fruit; nor would areasonable consumer believe that the picturesof fruit surrounding the words “naturalfruit flavors” on the cereal box indicatedthat the cereal contained actual fruit.SettlementsIn the face of this new type of litigationinvolving potentially large class action lawsuits,food industry companies will need toconsult with experienced counsel to considerpotential defenses versus settlementoptions. Settlement, however, may arguablynot always be the end of the matter.Notice of appeal papers have been filed inthe Third Circuit on behalf of several classmembers after a settlement order was en-Food Labeling, continued on page 72

Young LawyersCase LawDevelopmentsBy Jennifer A. Eppensteinerand Regina M. Nelson“Failure to Train”and Medical DeviceMisuse ClaimsThe current state ofthe law leans awayfrom imposing onmanufacturers anyheightened liabilityassociated with physiciantraining programs.Medical device manufacturers often find themselves havingto defend unique theories of liability. “Failure to train”arguments are becoming increasingly popular amongplaintiffs, and while no court has ruled directly on theargument in a medical device or pharmaceuticalcase, this has not prevented thistheory from appearing in newly filed productliability actions against device manufacturers.Even in many instances whenmedical device manufacturers have offeredprograms to train physicians on the properuse of their products, when the procedureshave resulted in adverse outcomes, plaintiffsstill have argued that those companieswere liable. In other cases, plaintiffsseek to impose heightened duties on devicemanufacturers to prevent misuse of theirproducts by physicians. Recent case lawmay be instructive in responding to thesearguments.This article will first discuss recentdevelopments in case law addressing the“failure to train” argument and respond tothe argument that by training these physicians,manufacturers are automatically liablefor injuries resulting from a physician’snegligence. This article will then reviewcases in which plaintiffs have alleged thatmanufacturers have new and heightenedduties to prevent misuse of their productsand how the courts have ruled on these theories.While the case law in these areas isnot well developed, the available decisionsprovide device manufacturers with strongdefenses to these plaintiffs’ claims.Liability Premised on the“Failure to Train”Medical device companies create productsthat are used for a variety of purposes,whether they are spinal cord stimulatorsfor use in patients with severe pain or foleycatheters to help drain urine. Use of manyof these products has become standard,making manufacturer- sponsored trainingunnecessary. However, with many devicestraining programs may be beneficial todoctors and patients alike.Plaintiffs essentially argue that once amanufacturer does offer a training program,the company has agreed to becomea guarantor of a physician’s abilities. The■ Jennifer A. Eppensteiner and Regina M. Nelson are associates in Reed Smith’s Life Sciences HealthIndustry Group, both practicing in the firm’s Philadelphia office. Their practices focus on defending pharmaceuticaland medical device product liability cases, both in mass tort litigation and single plaintiff matters.Ms. Eppensteiner is also a member of the DRI Drug and Medical Device, Young Lawyers, and Women in theLaw Committees.For The Defense ■ April 2013 ■ 31

Young Lawyerscourt in Chamian v. Sharplan Lasers, Inc.,No. 200000171, 2004 WL 2341569 (Mass.Super. Sept. 24, 2004), addressed below,rejected this argument, finding that it is nota medical device company’s responsibilityto ensure that a physician uses a productcorrectly.Plaintiffs have also attempted to bolstertheir arguments using the requirements ofCurrently,neither caselaw or nor statutes imposean “affirmative duty” totrain physicians in thedrug or device context.hospital boards. As more and more physiciansmove away from private practice tobecome affiliated with large health-caresystems, they become more likely to reportto a hospital board and to become subjectto the requirements that the hospitalboard establishes for practicing physicians.Plaintiffs use this to argue that medicaldevice companies must train the physiciansbecause some hospitals require that a physicianbe “certified” before using a product.Plaintiffs contend that a device manufactureris uniquely suited to provide this certificateshowing that a physician has takena course and demonstrated his or her abilityto use or to implant that particular medicaldevice. As the case law discussed belowexplains, this duty to certify does not exist.Further, if manufacturers do opt to providetrainings, they are not necessarily responsiblefor any negligence on the part of thephysicians whom they train.32 ■ For The Defense ■ April 2013Generally No Affirmative“Duty to Train”While plaintiffs make “failure to train”arguments fairly commonly in medicaldevice cases, research has not revealed acourt ruling directly on the argument in amedical device or a pharmaceutical case.The Minnesota Supreme Court did ruledirectly on this theory in an aviation productliability matter. In Glorvigen v. CirrusDesign Corp., 816 N.W.2d 572 (Minn.2012), the court held that a manufacturerdoes not have a “duty to train” when theplaintiffs alleged that a two-day on-thegroundand in-flight transition trainingcourse provided by an airplane manufactureras part of the purchase price of theairplane was deficient. The manufacturerin this case provided written materials,including an FAA- approved Pilot’s OperatingHandbook. Id. at 576. In additionto the written materials, the pilot in thecase received a two-day training session,although the parties disputed whether heactually completed the training. Id. at 578.Such “transition trainings” are standardin the general aviation industry, providingtraining to already licensed pilots whoplan to fly a new or unfamiliar airplane.Id. at 576. This training builds on a pilot’sprevious experience and teaches the differencesbetween the previous airplane andthe new airplane. Id. The plaintiffs arguedthat the instructions alone could not adequatelyinstruct the pilot in the safe use ofthe plane and therefore a flight lesson wasrequired. Id. at 582.In Glorvigen, the court acknowledgedthat the duty to warn requires suppliersto warn end users of a dangerous productif it is reasonably foreseeable that aninjury could occur in its use. The duty hastwo elements: (1) the duty to give adequateinstructions for safe use and (2) the dutyto warn of dangers inherent in improperusage. Id. at 581 (citing Frey v. MontgomeryWard & Co., 258 N.W.2d 782, 787 (Minn.1977)). However, the court also acknowledgedthat the “duty to warn has neverbefore required a supplier or manufacturerto provide training,” and in reachingits conclusion that there is no duty totrain, noted that “imposing a duty to trainwould be wholly unprecedented.” Id. at583 (emphasis added). The court held thatthe written instructions were sufficient asrequired under the law, and because themanufacturer “adequately discharged itsduty” without providing any training, tohold that the manufacturer “must providetraining would either create a new commonlaw duty to train or expand the dutyto warn to include training.” Id. Imposinga duty to train would “require an unprecedentedexpansion of the law,” and the courtdeclined to do so. Id.Currently, neither case law or nor statutesimpose an “affirmative duty” to trainphysicians in the drug or device context.In a recent Texas case, the court held thata defendant could not have “failed to train,warn or educate” physicians because thedefendant did not have a duty to do so.Woodhouse v. Sanofi- Aventis U.S. LLC, No.EP-11-CV-113-PRM, 2011 WL 3666595 at*3 (W.D. Tex. June 23, 2011). In Woodhouse,a doctor prescribed Ambien CRto the plaintiff to help her sleep. Id. at *1.The plaintiff then suffered the side effectof somnambulism, or sleepwalking, causingher to drive, then crash, her vehicle andbecome injured. Id. The defendants fileda motion to dismiss the plaintiff’s claimsthat the manufacturer failed to warn andhad “failed to train” prescribing doctors,and specifically, the plaintiff on the adverseside effects of Ambien CR. Id. at *2. Becausethe plaintiff had alleged that the defendants“failed to train, warn or educate” thephysician rather than that the doctor hadrelied on an inadequate warning, the courtfound that the plaintiff had failed to establishthat the defendants owed her a duty. Id.at *3. To impose liability, a court must firstfind that a duty exists. Id. Furthermore,even if a device manufacturer does trainthe physicians, this does not automaticallymake the manufacturer responsible for aphysician’s competency in actually usingthe product. In Brown v. Drake- WillockInternational, Ltd., the Michigan Court ofAppeals held that “[a] manufacturer shouldbe able to presume mastery of basic operationsby experts or skilled professionals”such as doctors and therefore “should notowe a duty to warn or instruct such personson how to perform basic operations.”530 N.W.2d 510, 515 (Mich. Ct. App. 1995).The Michigan Court of Appeals found thatthe manufacturer did not owe a duty to theplaintiff because it had sold the equipmentto a “sophisticated” user and could dependon the ability of the expert or physician toperform the basic operations of the product.Id. These cases, particularly Glorvigen,are helpful in defending against claims thatmanufacturers failed to train physicians onthe use of their products.Defending “Failure to Train” ClaimsEven though medical device companiesdo not have an affirmative duty to train,

unfortunately they still have to defend failureto train claims in the courts. Glorvigenis instructive. Most medical devices comewith instructions on how to use a product,just as the manufacturer in Glorvigen providedinstructions on how to use the newaircraft model. In addition, the “transitiontraining” provided to pilots using a newaircraft is arguably similar to the trainingprovided by medical device companies.When a medical device manufacturerintroduces a new device to physicians, itsometimes provides a one- or two-daytraining course on how to use the device.Of course, the training presumes that thephysicians are building on skills that theyalready have and that learning about anew device will build on previous medicalknowledge; therefore, the medical devicecompany cannot be liable for not providingfull and complete training under the rationalein Glorvigen. Additionally, as noted inBrown, the manufacturer should be able torely on the physicians’ ability to performthe basic skills or operations necessary touse the medical device.Even if a manufacturer has providedphysicians with training on its device, aswill be discussed below, current case lawholds that a medical device manufactureris not liable for the misuse of its product bya physician or a skilled professional. Attorneysfor medical device manufacturersmust therefore analyze each claim to determinewhether it was actually the productthat caused the injury or whether the injuryalleged was caused by something else.Misuse of a ProductSome case law does support the argumentthat even if a physician attends amanufacturer- sponsored training, themanufacturer is not liable for either thefailure of the physician to use the productcorrectly or an adverse outcome experiencedby a patient, especially if thewarnings accompanying the product mentionedthe adverse outcome as a possibility.In Chamian v. Sharplan Lasers, Inc., No,20000171, 2004 WL 2341569 (Mass. Super.Sept. 24, 2004), the plaintiff suffered injuriesfrom a laser used during a cosmeticprocedure. The physician in this case hadattended numerous training sessions andworkshops on laser resurfacing. Id. at *2.The physician also had undergone a preceptorshipwith an experienced surgeon andhad received training from the laser manufacturer.Id. The Massachusetts court foundthat “the fact that individuals who havereceived training on medical equipmentsubsequently misuse the equipment to thedetriment of a patient, standing alone, isinsufficient to establish a breach of duty tothe injured patient on the part of the entitythat provided the training.” Id. at *7. Thedefendant manufacturer did not become a“guarantor of the competence” of the physicianswho the manufacturer trained justbecause it provided training. Id.Plaintiffs have also argued that when amanufacturer is aware of widespread misuseof its product, such awareness imposesa heightened duty on the part of the manufacturerto protect consumers by warningthem directly. In some cases plaintiffshave claimed that manufacturers knewthat unqualified persons were using theirproducts in violation of the law. In Swayzev. McNeil Labs. Inc., the plaintiff’s son dieddue to complications caused by an overdoseof a narcotic that the defendant manufactured.807 F.2d 464, 465 (5th Cir. 1987).Although the narcotic was a prescriptiondrug that could only be prescribed, administered,and dispensed under the directionand supervision of a licensed physician, theplaintiff argued that the learned intermediarydoctrine did not apply because thedefendant should have known about thewidespread misuse of its product, wherecertified registered nurse anesthetists(CRNAs) routinely determined dosagesduring surgical procedures. Id. at 466. Theevidence confirmed that during the procedureat issue a CRNA determined thedose of the narcotic to administer withoutreceiving supervision from an anesthesiologistor supervising surgeon. Id. Theplaintiff argued that the manufacturer hadheightened duties to provide warnings toconsumers directly regarding the operatingroom practice, to pressure the medicalcommunity to heed the warnings providedto it, and ultimately to remove the productfrom the market. Id. at 469. The trialcourt rejected the plaintiff’s arguments,and the Fifth Circuit affirmed the lowercourt’s ruling.In rejecting the plaintiff’s claims, theFifth Circuit emphasized that the manufacturerhad discharged its duty by providinga warning to the physician andexplained the further warnings to consumersregarding the potential misuse of aproduct “would only lead to confusion, andperhaps undermine the physician- patientrelationship.” Id. at 470–71. The Fifth Circuitthen stressed the importance of thephysician- patient relationship, explaining“[w]hen the physician- patient relationshipEven thoughmedicaldevice companies do nothave an affirmative duty totrain, unfortunately they stillhave to defend failure totrain claims in the courts.does exist, as here, we hesitate to encourage,much less require, a drug manufacturer tointervene in it.” Id. at 471. Because the physiciantook responsibility for the patient’scare, a “special relationship, between physicianand patient, thus formed,” which thecourt noted “receives special protection inlaw, and, at the same time, creates a greatresponsibility for every physician.” Id. Thedoctor, therefore, assumed the role of the“learned intermediary” and the burdensassociated with it. Id. Although the facts ofthe case revealed that physicians routinelyallowed CRNAs to use too much discretion,the Fifth Circuit found that the physicianshad undertaken the responsibility of supervisingthe CRNAs, and that responsibilitycould not be shunted onto, or shared with,the drug manufacturers. Id.The Fifth Circuit also rejected the plaintiff’sargument that the manufacturershould have done more to force physiciansand hospitals to heed its warnings, stating“[i]t is both impractical and unrealisticto expect drug manufacturers to policeindividual operating rooms to determinewhich doctors adequately supervise theirsurgical teams.” Id. See also Labzda v. PurduePharma, L.P., 292 F. Supp. 2d 1346,1354–55 (S.D. Fla. 2003) (finding that theduty of a physician “to exercise an inde-For The Defense ■ April 2013 ■ 33

Young Lawyerspendent judgment” based on his or herknowledge of a patient’s medical conditionand a drug cannot be shifted to the manufacturer,and the drug manufacturer didnot have a duty to intervene in physicianpatientrelationship even when the manufacturerhad knowledge that the drugmay have been prescribed inappropriately).Nor should the manufacturer have beenThe court stated thatthe manufacturer’sclinical specialist “was notresponsible” for the insertionof the device and “could notmake a judgment” aboutwhere to place the lead.required to remove the product from themarket even if it was aware of misusebecause thedefendant cannot control the individualpractices of the medical community…and we decline to impose sucha duty. Drug manufacturers must adequatelywarn physicians of the potentialside- effects of their prescription drugs;thereafter, the physician, with his specialknowledge of the patient’s needs,assumes the burden of presiding overthe patient’s best interests.Id. at 472.The ruling in Swayze highlights theissues associated with requiring a manufacturerto police the misuse of its productonce it gives adequate warnings and furtherstresses the concerns related to forcinga manufacturer to step into the middleof the doctor- patient relationship.The Appellate Court of Illinois followedsimilar reasoning when affirming alower court’s finding that a medical devicemanufacturer did not owe any duty tothe patient decedent to prevent a surgeonfrom implanting a pacemaker as an outpatientprocedure in his office. Kennedy v.Medtronic, Inc., 851 N.E.2d 778 (Ill. App.34 ■ For The Defense ■ April 2013Ct. 2006). In Kennedy, at the decedent’srequest, a physician implanted a cardiacpacemaker manufactured by the defendantas an outpatient procedure in his clinic, asopposed to performing the procedure ina hospital. Id. at 780. The physician had adentist monitor the decedent’s vitals duringthe procedure; in addition to two registerednurses who were also present, thedevice manufacturer provided a clinicalspecialist to provide technical support.Id. Following the procedure, the decedentexperienced various health problems, wasforced to undergo a second procedure toremove his device and to have a new pacemakerimplanted due to the surgeon’s errorin placing the electrode, and subsequently,died. Id. The decedent’s daughter instituteda wrongful death action against the manufacturer.Id.Although the safety of the implanteddevice was not at issue, the plaintiff allegedliability on the part of Medtronic, claimingthat the manufacturer had a duty:(1) to refrain from providing a pacemakerto the physician and from participatingin the insertion of the pacemaker, knowingthat the physician intended to proceedin an inadequate facility without qualifiedpersonnel present and without monitoringany of the patient’s vital signs; (2) towarn of the dangers inherent in proceedingwith the surgery under the conditions; and(3) to assist with the insertion in a reasonablemanner once it voluntarily undertookto participate. Id. at 782. In a case of firstimpression, the court rejected these argumentsafter finding that no such duties ofcare existed, and further, that the burdenand consequences of imposing such dutieson the manufacturer would be substantial.Id. at 785–86.First, the court stated that the manufacturer’sclinical specialist “was not responsible”for the insertion of the device and“could not make a judgment” about whereto place the lead. Id. at 785. Furthermore,the court explained that the decedent’sinjuries were not reasonably foreseeable,noting that the same injuries could haveoccurred in a hospital setting. Id. The courtalso emphasized the burden that it wouldplace on a manufacturer to require themanufacturer to monitor the conditionsunder which a doctor performed surgery.Id. at 786. More importantly, however,the court refused to place a device manufacturerin the middle of a doctor- patientrelationship, finding that a central aspectof the learned intermediary doctrine isthat “a licensed physician… has the knowledgeof his patient’s medical history andbackground, and, therefore, he is in a betterposition, utilizing his medical judgment,to determine a patient’s needs andwhat medical care should be provided.” Id.The court went on to explain that it wouldbe “unreasonable, and potentially harmful,to require a clinical specialist… todelay or prevent a medical procedure simplybecause she believes the setting is notappropriate or the doctor is unqualified.”Id. Furthermore,the consequences of requiring suchscreening by [a manufacturer] wouldrun the risk of imposing additional liabilityon the manufacturer in the eventit determined a physician was not in aposition to properly implant a device,refused to provide one, and the patientsuffered adverse medical consequencesbecause he did not have access to aneeded device.Id.The court also rejected the plaintiff’sargument that because the manufacturer’sclinical specialist reassured the plaintiffabout the implanting physician’s qualificationsbefore the surgery and participatedby providing technical support, the clinicalspecialist voluntarily assumed a dutyto assist with the surgery in a reasonablemanner. Id. The court held that taking alimited role did not mean that the specialistvoluntarily assumed a duty to ensurethat the physician placed the lead in thecorrect ventricle of the patient’s heart. Id.A federal court rejected a similar argumentin Harrington v. Biomet, Inc., in which theplaintiff alleged that a device manufacturerrepresentative failed to act with ordinarycare when the representative did notadvise the plaintiff’s surgeon about whichsize and type of prosthetic hip componentto implant, claiming that the representativeshould have recommended a differentimplant than the one chosen by the physician.No. CIV-07-25-R, 2008 WL 2329132,at *7 (W.D. Okla. June 3, 2008). The courtgranted summary judgment to the manufactureron the plaintiff’s negligence claimMisuse Claims, continued on page 75

Young LawyersNew Regulationsand LitigationBy Michael J. Grayand Susan HoltsclawWhat You Needto Know AboutVapor IntrusionTo avoid unwantedcosts and litigation,business and real estateprofessionals, propertyowners, and attorneysmust have some basicknowledge of thischanging area of the law.In recent years, the environmental phenomenon known asvapor intrusion has sparked new fears of illness and environmentalliability. Vapor intrusion occurs when pollutantsin soil and groundwater migrate toward buildings.These chemicals then seep through cracksin foundations and walls and enter interiorspaces as vapor. You could think ofthe threat from vapor intrusion as similarto radon, except that vapor intrusion is aman-made problem. This relatively new environmentalissue could fuel a wave of toxictort lawsuits as the U.S. Environmental ProtectionAgency (EPA) continues to beef upits regulation of sites with vapor intrusionissues. While vapor intrusion has receivedscant attention in the popular media, thiswill change as the EPA begins to conductmore indoor air sampling and increase publicawareness of vapor intrusion.The presence of vapor intrusion in interiorspaces has caused concern becauseinhaling the volatile and semi- volatile chemicalscan cause a variety of health problems.In fact, the EPA recently finished a study ofone chemical associated with vapor intrusion,tetrachloroethylene, also known as“PCE,” used in dry cleaning solvent, andconcluded that it is both carcinogenic to humansand can cause other, noncanceroushealth problems in the respiratory tract andkidneys. In addition to PCE, several commonchemicals are thought to pose healthrisks through vapor intrusion, includingdegreasers, dry cleaning solvents, gasoline,petroleum, and certain pesticides.Mitigating vapor intrusion is particularlychallenging because unlike mitigating theeffects of contaminated water, vapor intrusion’seffects cannot be minimized by givingproperty owners bottled water or other temporaryfixes. Vapor intrusion is also problematicbecause of the breadth of exposurepathways. As chemicals migrate through soiland groundwater into foundations and walls,vapor intrusion can occur in propertieswhere no industrial activity has ever takenplace. For example, scientists have found vaporintrusion contamination in homes thatare simply located near dry cleaning facilitiesand gas stations. If the EPA detects vapor intrusioncontamination, it can force remediationof the site, install ventilation systems inaffected facilities, and even limit future constructionin the at-risk area.■ Michael J. Gray is an associate at Dinsmore & Shohl LLP in Cincinnati. His practice focuses on mass tortlitigation and environmental law. He serves as Ohio liaison to the DRI Young Lawyers Legislative Subcommittee.Susan Holtsclaw is a 3L law student at University of Cincinnati College of Law. Ms. Holtsclaw was asummer associate at Dinsmore’s Cincinnati office.For The Defense ■ April 2013 ■ 35

Young LawyersVapor Intrusion LitigationIs IncreasingVapor intrusion litigation will likely increasefor a few reasons. First, there hasbeen an increasing awareness of the healthrisks, real or imagined, associated withchronic exposure to gaseous chemicals inindoor air. Second, plaintiff attorneys havedodged statute of limitations issues becauseMerely showingexposure toa toxic chemical through vaporintrusion is not necessarilyenough to sustain a lawsuit.of plaintiff ignorance of the vapor intrusion.Third, plaintiffs increasingly have used thecitizen lawsuit provisions of the ResourceConservation and Recovery Act, 42 U.S.C.§6972 to seek relief in the courts.Injuries from Vapor IntrusionPlaintiffs have established injuries fromvapor intrusion in two main ways. First,plaintiffs increasingly have found expertsto connect health problems to vapor intrusionissues. Second, plaintiffs have showninjury through reduced property valueswhen their property became difficult to sellafter being tagged as a property with real orpotential vapor intrusion.Indoor air pollution has become anincreasing area of concern with environmentalgroups and regulators. While mostpeople are familiar with pollution fromsmoke stacks and exhaust pipes, the publicis beginning to realize that most peoplespend 95 percent of their time indoors, andindoor air pollution can pose a real healthrisk. Given the thousands of environmentallycontaminated sites around the country,a significant number of people live,work, or shop in facilities that could havesome amount of vapor intrusion contamination.Vapor intrusion does not only occurnear Superfund sites, it also can come fromleaking underground storage tanks at gasstations, small drycleaners, and contaminatedsites that have already been remediatedand deemed safe for inhabitation.36 ■ For The Defense ■ April 2013At the same time, scientists and regulatorsidentify more and more chemicals ashealth risks. In 2011, for example, the EPAidentified, trichloroethylene, or “TCE,”one of the main chemicals associated withvapor intrusion, as carcinogenic to humansthrough all routes of exposure. The EPAconcluded that risks from “TCE exposureby inhalation include hepatic, renal, neurological,immunological, reproductive, anddevelopmental effects.” Similarly, researchhas connected chemicals such as PCE andbenzene to health problems and cancer.Plaintiffs have had some success withclaims of health problems associated withvapor intrusion. In Leese v. Lockheed Martin,2012 U.S. Dist. Lexis 50963 (D.N.J. Apr.11, 2012), a married couple constructed anew home on property across the streetfrom land owned by Lockheed Martin. TheNew Jersey Department of EnvironmentalProtection determined that because ofLockheed Martin’s remediation efforts onits property, no more remediation was necessaryon the site. However, in 2008 theNew Jersey Department of EnvironmentalProtection informally requested that LockheedMartin conduct vapor intrusion testingon residential properties around thesite. Lockheed Martin’s vapor intrusiontesting discovered that the couple’s basementand first floor contained traces of PCEgas with the basement exceeding New Jersey’smaximum levels. Lockheed Martininstalled a filtration system, but the coupleclaimed that their properties still containedlevels of chemicals in excess of thelegal limits. The couple claimed numerousinjuries from the vapor intrusion includinglowered home value, “seriousnegative health effects, including two childrenwho refused to eat as babies, fell offthe growth charts, and are currently belowthe 10th percentile for height and weightfor their ages, and a third child who hasdevelopmental issues,” and severe stressfrom living on a contaminated property.The district court rejected Lockheed Martin’smotion to dismiss the couple’s claimsand allowed the case to proceed.However, merely showing exposure toa toxic chemical through vapor intrusionis not necessarily enough to sustain a lawsuit.In Ivory v International Bus. MachinesCorp., 37 Misc. 3d 1221A (N.Y. Sup.Ct. 2012), two families sued IBM allegingthat exposure to TCE and other chlorinatedsolvents through vapor intrusion and ambientair caused cancer- related symptomsin some family members, but also an increasedrisk of cancer in asymptomaticfamily members. The plaintiffs’ own expertconcluded that the increased risk of cancerin the asymptomatic family member was“at worst, an increase of 6 thousandths ofone percent (or .00607 percent).” While thecourt refused to a grant summary judgmentagainst the claims of the family memberswith cancer symptoms, the court did granta summary judgment against the claims ofasymptomatic family members. The courtconcluded that “[t]he simple reality is that.00607 percent does not under any circumstancerise to the level of reasonable certainty,namely 50 percent or greater.”While it can sometimes be difficult for aplaintiff to establish bodily injury in a vaporintrusion case, it is much easier to showthat vapor intrusion has harmed a property’svalue. In Forest Park Nat’l Bank & Trustv. Ditchfield, 2012 U.S. Dist. Lexis 103007(N.D. Ill. July 24, 2012), the court pointed toa property owner’s difficulty selling a propertywith vapor intrusion issues as evidenceof injury. In that case, the Agency for ToxicSubstances and Disease Registry, a federalpublic health agency, advised against habitationof the property until further vapor intrusiontesting occurred. The court in ForestPark, noted that when a property is in closeproximity to large amounts of contamination,“it does not require ‘an ingenious academicexercise in the conceivable’ to infera diminution in property value may resultfrom those facts.”Similarly, in Sisters of Notre Dame DeNamur v. Garnett- Murray, 2012 U.S. Dist.Lexis 78747 (N.D. Cal. June 6, 2012), agroup of nuns inherited a property thatwas contaminated with PCE through vaporintrusion caused by a nearby dry cleaner.The court granted the nuns’ motion for asummary judgment regarding claims ofnuisance and trespass. For the claim of nuisancethe court relied on the fact that theowners of the dry cleaner property knewabout the contamination issues yet had nottaken any steps toward remediation. Thewrongful entry of contamination on thenuns’ property showed trespass. The injuriescited by the court included the nuns’inability to sell the contaminated property.

Plaintiff Attorneys Can Maneuver AroundStatute of Limitations DefensesMuch of the contamination that results invapor intrusion occurred many years ago,so it is natural to consider a statute of limitationsdefense when confronted with avapor intrusion claim. However, plaintiffattorneys have maneuvered aroundstatutes of limitations for vapor intrusionexposure successfully. In Aiken, etal. v. General Electric Co., 2008 N.Y. App.Div. Lexis 9212 (N.Y. App. Div. Dec. 4,2008 ), homeowners filed a lawsuit againstthe owner of a contaminated site claiminginjury through vapor intrusion. Theexistence of contamination was commonknowledge in the community for morethan 20 years before the homeowners filedthe lawsuit. However, the plaintiffs arguedthat it was only recently that they were informedthat soil vapor contamination, asopposed to ground water contamination,posed a threat to their properties and, asa result, the time to commence such anaction should only begin to run whenwarnings about such a threat were disseminatedthroughout their community.The court held that vapor intrusion was alatent injury and that the statute of limitationsdid not begin until the homeownersdiscovered, or should have discovered, thevapor intrusion.Given the low profile that vapor intrusionhas in the public sphere, it is still realisticfor a plaintiff to argue that he or shedid not know that vapor intrusion was arisk in his or her home. However, the finalEPA guidance on vapor intrusion is widelyexpected to include increased interior airtesting and to emphasize community relations.As the public becomes aware of possiblevapor intrusion it will become harderand harder for plaintiff attorneys to avoidstatute of limitations issues by claimingthat plaintiffs were unaware of vapor intrusionin their areas.Citizen Lawsuits Present OtherOpportunities for PlaintiffsPlaintiffs can also pursue recovery underthe citizen lawsuit provision of the ResourceConservation and Recovery Act. A citizenlawsuit under the Resource Conservationand Recovery Act allows a private partyto enforce provisions of the act if the partymeets certain requirements of the law. In thecontext of vapor intrusion, plaintiffs oftenattempt to show “an imminent and substantialendangerment to health or environment,”which allows a citizen lawsuit. TheResource Conservation and Recovery Actpermits a successful private party to obtaininjunctive relief as well as attorney’s fees.Plaintiffs have had success pursuingResource Conservation and Recovery Actcitizen lawsuits involving vapor intrusion.In Grace Christian Fellowship v. KJG Invs.,Inc., 2012 U.S. Dist. Lexis 43421 (E.D. Wis.Mar. 29, 2012), a church’s basement becamecontaminated with petroleum vapors froma nearby gas station. Even after emergencyremediation of the site, vapor intrusiontesting still revealed the presence ofpetroleum- related chemicals in the basement.The church filed a lawsuit againstthe owner of the gas station under the citizenlawsuit provision of the Resource Conservationand Recovery Act, among otherclaims. To prevail on a “contributed to”claim a plaintiff is required under §6972(a)(1)(B) to demonstrate, as is relevant to thecase, that (1) the defendant does or did generatesolid or hazardous waste; (2) the defendantcontributes or has contributed tothe handling, storage, treatment, transportation,or disposal of solid or hazardouswaste; and (3) the solid or hazardouswaste may present an imminent and substantialendangerment to health or to theenvironment. The court in Grace ChristianFellowship granted the church’s motion fora summary judgment on the first two elementsof this standard, but it concludedthat material fact issues remained aboutwhether the gas station’s contaminationwas “an imminent and substantial endangermentto health or environment.”A plaintiff can have more difficulty maintaininga Resource Conservation and RecoveryAct citizen lawsuit based on vaporintrusion when a defendant has alreadystarted remediation and a plaintiff can onlyestablish that a “remote” threat still exists.In Tilot Oil, LLC v. BP Prods. N. Am., Inc.,2012 U.S. Dist. Lexis 5365 (E.D. Wis. 2012),the plaintiff alleged that it had to seal offthe basement stairs in one of its buildingsto prevent exposing its employees to vaporintrusion coming from BP’s petroleum contamination.Four of the plaintiff’s employeeswere seen for medical evaluation afterchemical exposure and developing rashes.The plaintiff’s medical experts reached contradictoryconclusions regarding whetherthe petroleum fumes from the basementcaused the employees’ illnesses. The plaintifffiled a lawsuit against BP alleging that animminent or substantial threat to health orthe environment existed. The court grantedBP’s motion for a summary judgment onthis claim, finding that an imminent threatdid not exist because a ventilation fan keptvapor levels below OSHA permissible exposurelimits and remediation efforts wereongoing. In the words of the court, “whenthe fan is running, there is no substantialthreat. And, while there may still be somethreat of harm, through the possibility ofthe fan being shut off or losing power, thatharm is not substantial or serious in that itnecessitates action; it is simply too remote.”Vapor Intrusion RegulationsAre in FluxEnsuring compliance with state and federalregulations concerning vapor intru-For The Defense ■ April 2013 ■ 37

Young Lawyerssion is not easy. Currently, the UnitedStates has a hodgepodge of federal andstate vapor intrusion rules and regulations.The science behind vapor intrusionis also constantly evolving. It is difficultto test for vapor intrusion because variablessuch as wind, air pressure, precipitationchange, and HVAC systems can affectits exposure pathway. The complexity ofA plaintiff can have moredifficulty maintaining aResource Conservation andRecovery Act citizen lawsuitbased on vapor intrusionwhen a defendant has alreadystarted remediation and aplaintiff can only establish thata “remote” threat still exists.vapor intrusion has led to uncertainty inregulation.The EPA is the federal agency chargedwith regulating the potential, presence, andeffect of vapor intrusion. In 2002, the EPAissued Draft Guidance for Evaluating theVapor Intrusion to Indoor Air Pathway fromGroundwater and Soils. The draft guidanceprimarily addressed the risk of vapor intrusionin residential buildings. After issuingthe draft guidance, things stalled at theEPA. Without good federal guidance, thestates began to craft their own standards toaddress vapor intrusion. Currently, over 35states have their own vapor intrusion guidance.These standards vary greatly in scopeand also in the amount of chemicals in theair that will generate action.The federal draft guidance proposeda three-tiered process for determiningwhether underground vapors have intrudedinto an indoor air space. The EPA has backedaway from this tiered approach and is expectedto abandon it in favor of what it calls“analyzing multiple lines of evidence.” To38 ■ For The Defense ■ April 2013analyze multiple lines of evidence the EPArecommends evaluating all available data,such as analytical results, building type, andventilation rates, to determine whether vaporintrusion is an issue at a site. The EPAalso encourages the use of models to helpunderstand whether a site has an exposurepathway. This new form of analysis is supposedto address the complexity and the sitespecificnature of vapor intrusion.Interest groups have mounted pressureon the EPA to implement a uniform systemto address vapor intrusion. In 2009, the EPAinspector general released the report Lackof Final Guidance on Vapor Intrusion ImpedesEfforts to Address Indoor Air Risks.The report complained that the draft guidancewas too limited in scope and that it wasnot appropriate for use in sites with petroleumcontamination. At the same time, therealization has grown that new vapor intrusionregulation will have a major impact oncontaminated sites and brownfields aroundthe country. In a 2010 report, the UnitedStates Government Accountability Office(GAO) expressed concern that new standardsand efforts to address vapor intrusionwill add many more sites to the Superfundprogram National Priorities List of hazardouswaste sites. The GAO report stated that“[a]ccord ing to an EPA headquarters official,based on recent discussions with regionalofficials, up to 37 sites could becomeeligible for National Priority List listing ifthe EPA includes vapor intrusion assessmentsas part of the listing process.” TheEPA is in the process of adding vapor intrusionto the list of considerations that ituses to determine which sites to add to theNational Priorities List.In November 2012, the EPA released newguidance entitled Assessing Protectivenessat Sites for Vapor Intrusion, which requiresthe consideration of the risks posed byvapor intrusion at completed Superfundsites during five-year reviews. Notably,the document rejected the tiered approachincluded in the 2002 draft guidance andrecommended analyzing multiple lines ofevidence. This 2012 guidance is significantbecause considering vapor intrusionat old Superfund sites could call into questionthe adequacy of the remedies alreadyin place at the sites. Most of the sites upfor five-year reviews probably have remediesthat did not address vapor intrusionbecause it was not a major concern untilabout 10 years ago.The EPA is expected to replace the 2002draft guidance with two new, final documents:OSWER Final Guidance for Assessingand Mitigating the Vapor IntrusionPathway from Subsurface Sources to IndoorAir, which addresses vapor intrusion ingeneral, and OUST Guidance for AddressingPetroleum Vapor Intrusion at LeakingUnderground Storage Tank Sites, whichaddresses vapor intrusion from hydrocarboncontamination. These forthcomingdocuments are controversial because theyhave the potential to affect hundreds ofenvironmental sites around the nation andalso because the EPA has supposedly maderadical changes to the 2002 draft guidancewithout releasing an updated version to itsince 2002. However, reporters and someothers received leaked drafts of the OSWERFinal Guidance and the OUST Guidancethat the EPA has not released for publiccomment, while the EPA has made otherdocuments available on the Internet thatit maintains it has relied on to formulatingthe guidance in these leaked documents.U.S. Envtl. Prot. Agency, Vapor Intrusion,http://www.epa.gov/oswer/ vaporintrusion/index.html. If the leaked documents indicate whatthe final guidance will involve, the EPAhas followed the recommendations of theEPA inspector general and the final guidancewill have a broader and more completescope than the 2002 draft guidance.The new guidance is expected to presenta new model for the evaluation of vaporintrusion as well as a set of guidelines forevaluation, testing, investigation, and mitigation,as well as for involving communitiesin vapor intrusion issues.ConclusionThe increased publicity surrounding vaporintrusion will certainly lead to increasedvapor intrusion litigation and even moreregulation. To avoid unwanted costs andlitigation, business and real estate professionals,property owners, and attorneysmust have some basic knowledge ofthis changing area of the law. With newEPA guidance on vapor intrusion comingin 2013, it seems very likely that moresites with vapor intrusion will be identifiedand vapor intrusion related litigation willincrease.

Young LawyersYou Have the Rightto an Attorney, but ItMight Not Be MeBy Daniel C. Headrickand Ryan L. HarrisonUnderstandingCorporate MirandaWarningsWhether you representa corporation, apartnership, or anyother organization, itis imperative that youconsider the implicationsof Upjohn and its progenybefore conducting aninternal investigation ora fact- finding interview.If you have ever watched a movie or a TV show you haveprobably heard the Miranda warning given to a criminaldefendant. Miranda’s lesser known civil counterpart neverreally made it into Hollywood’s lexicon, but it is a vitallyimportant concept for the civil defenselawyer to master. In essence, an attorneyadministers the “corporate Miranda,”sometimes referred to as an Upjohn warning,when he or she informs a corporateemployee that he or she representsthe corporation, not the employee, theattorney- client privilege will protect whatthey discuss, but the corporation, not theemployee, controls the privilege.In this article we will analyze UpjohnCompany v. United States and the subsequentcase law to understand how federaland state jurisdictions have respondedto the decision. Next, we will explore thepractical side of administering corporateMiranda warnings, including determiningwhich test applies, understandingwhat a corporate Miranda warning shouldinclude, and other related practical issues.Finally, we will discuss using corporateMiranda in settings outside of internal corporateinvestigations.■ Daniel C. Headrick and Ryan L. Harrison are attorneys with Paine Tarwaterand Bickers LLP in Austin, Texas. Mr. Headrick practices civil litigationin a variety of areas, including employment law, product liability,personal injury, and construction law. Mr. Harrison’s practice is focusedon construction disputes and other complex tort litigation. He is a memberof the DRI Young Lawyers and Construction Law Committees.Upjohn Company v. United States:The Birth of Corporate MirandaThe so-called corporate Miranda warningwas impliedly created in 1981 when theUnited States Supreme Court expanded theattorney- client privilege to cover certaincommunications between attorneys representinga corporation and the corporation’semployees in Upjohn Company v. UnitedStates, 449 U.S. 383 (1981). In Upjohn, theInternal Revenue Service demanded productionof completed questionnaires thatUpjohn’s general counsel had sent to allthe corporate managers regarding questionablepayments made to foreign governmentofficials. Upjohn refused to producethe questionnaire responses, arguing thatthe managers had acted as “clients” whenthey responded to the general counsel’squestionnaire, and therefore the attorneyclientprivilege protected the responses.The Sixth Circuit Court of Appeals limitedthe scope of the attorney- client privilegeto communicationswith employees in the socalled“control group,” whichmeant those “responsible fordirecting Upjohn’s actions inresponse to legal advice.” Id.at 388. The Supreme Court,however, rejected the controlFor The Defense ■ April 2013 ■ 39

Young Lawyersgroup test because it did not clearly delineatewhich employees were considered corporatedecision makers, thus frustratingthe purpose of the attorney- client privilege.The Supreme Court declined to createa new bright-line test and stressed, withoutadding any helpful factual scenarios, thata court should decide cases on a “case-bycase”basis. Id. at 396.When choosingwhichemployees to interview, itis imperative to know thetest that your jurisdictionuses to determine whethera corporation can invoke theattorney-client privilege.40 ■ For The Defense ■ April 2013In the wake of Upjohn and the controlgroup test rejection, practitioners were leftto wonder when the attorney- client privilegemight apply to communications with a corporateemployee. Eventually, some wonderedwhether the attorney- client privilege potentiallycould protect every interview of corporateemployees. As a result, state and federaljurisdictions have created their own tests relatedto attorney- client privilege protection.In the federal landscape, the courts generallyapply some version of a subject- mattertest, which protects communications concerningmatters within the scope of anemployee’s corporate duties. See, e.g., In reM&L Business Mach. Co., Inc., 161 B.R. 689,693 (D. Co. Nov. 3, 1993) (holding that theattorney- client privilege protected memorandasent to counsel to determine whethera bank was involved in improper activities);Harper & Row Publishers, Inc. v. Decker,423 F.2d 487, 491 (7th Cir. 1970) (holdingthat the attorney- client privilege protecteda communication made by an employeewho was not a member of the control groupwhen the communication was related tothe employee’s employment duties).Some state jurisdictions still use a controlgroup test, which protects communicationsmade by corporate decision makers.See, e.g., Consolidation Coal Co. v. Bucyrus-Erie Co., 89 Ill.2d 103, 118–19 (Ill. 1982)(“[t]he control- group test… [protects] consultationswith counsel by those who arethe decisionmakers or who substantiallyinfluence corporate decisions and [minimizes]the amount of relevant factualmaterial which is immune from discovery”).For example, the attorney- clientprivilege likely would protect communicationswith a corporation’s chief executiveofficer or high-level manager, while itwould not protect communications with alower-level assistant manager. See Nemirofskyv. Seok Ki Kim, 523 F. Supp. 2d 998, 1001(N.D. Cal Oct. 23, 2007) (applying Californialaw); Midwesco- Paschen Joint VentureFor Viking Projects v. Imo Industries, Inc.,265 Ill. App. 3d 654, 663 (Ill. App. Ct. 1994)(applying Illinois law).Other state jurisdictions use some versionof a subject- matter test. See, e.g., Keefev. Bernard, 774 N.W.2d 663, 672 (Iowa 2009)(“the test must focus on the substance andpurpose of the communication”); In re MonsantoCo., 998 S.W.2d 917, 922 (Tex. App.1999, no pet.) (“[Texas] Rule of Evidence 503was amended to adopt the ‘subject matter’test for an entity’s assertion of privilege”);Wrench LLC v. Taco Bell Corp., 212 F.R.D.514, 516 (W.D. Mich. June 6, 2002) (“wherethe attorney’s client is an organization, theprivilege extends to those communicationsbetween attorneys and all agents or employeesof the organization who are authorizedto speak or act for the organization in relationto the subject matter of the communication”).Under the subject- matter test,the attorney- client privilege would protectvirtually any communication to a corporation’sattorney by an employee as long as thesubject matter fell within the scope of theemployee’s corporate duties. For example,under the subject- matter test the attorneyclientprivilege would protect an interviewof a department store janitor about a slipand fall, whereas it would not protect aninterview of the department store’s presidentabout the same slip and fall. So, do notassume that the attorney- client privilegewill protect your interview merely becauseyou will interview a high-level managerialemployee.Beyond the various tests used by courtsto determine whether the privilege mightprotect a communication, three fairlyrecent cases present cautionary tales forpractitioners.The Broadcom Case—KnowWho You RepresentIn 2006, attorneys representing BroadcomCorporation, a supplier of semiconductors,met with the company’s CFO, WilliamRuehle, to conduct an interview regardingthe propriety of the corporation’s backdatingof stock options. U.S. v. Nicholas, 606 F.Supp. 2d 1109, 1111 (S.D. Cal. Apr. 1, 2009).The attorneys also represented Ruehle in aseparate derivative action. When the governmentconvened a grand jury investigationinto the backdating, it interviewedthe attorneys regarding the statements thatRuehle made to the attorneys during the2006 interview, and it later sought to introducethis information as evidence againstRuehle. Ruehle objected to the admissionof this testimony under the attorneyclientprivilege. Ruele and the attorneysdisputed whether Ruele received a corporateMiranda warning, and the districtcourt did not believe the attorneys’ testimonythat they administered the warning.The district court found that Ruehle’scommunications were privileged under hisattorney- client privilege and excluded allof the statements between Ruehle and theattorneys. The district court scorchinglycriticized the attorneys’ ethical breaches,commenting that they had “committed atleast three clear violations of [their] dut[ies]of loyalty to Mr. Ruehle.” Id. at 1117. Theattorneys failed to attain Ruehle’s writtenconsent to a conflict waiver regarding theirrepresentation of both Ruehle and Broadcom;they questioned Ruehle for Broadcom’sbenefit; and finally, they voluntarilydisclosed his communications to the government.The district court concluded byreferring the attorneys to the California Barfor disciplinary proceedings.On an interlocutory appeal, the NinthCircuit Court of Appeals did not address thecorporate Miranda issue. U.S. v. Ruehle, 583F.3d 600 (9th Cir. 2009). It presumed thatRuehle had an attorney- client relationshipwith the attorneys but declined to extendthe attorney- client privilege to the communications,holding that Ruehle did notmake the statements with the reasonableexpectation that they would remain confi-

dential. The Ninth Circuit noted that the attorneys’“allegedly unprofessional conductin counseling Broadcom to disclose, withoutobtaining written consent from Ruehle,while troubling, provides no independentbasis for suppression of statements he madein June 2006.” Id. at 613 (emphasis added).Thus, the Ninth Circuit made clear that othersshould not read the decision to reversethe district court’s decision as a green lightto follow the example set by the attorneys.Those looking for a crystal clear ethicslesson should look elsewhere as the meaningand importance of the district court’sdecision given the Ninth Circuit’s reversalon other grounds is supremely unclear.Regardless, the Ruehle decision could easilyhave gone the other way. Practitionerswill want to avoid ambiguity by administeringiron-clad written warnings. If yourepresent a corporation and also representan employee in a related action, whichwe advise against due to the likelihoodthat it will lead to an impermissible conflictof interest between the company andits employee, you must present your clientswith conflict waivers or decline one orboth representations. You cannot undertakedual representation without protectingyourself and your clients.The Pendergest-Holt Case—Hire Your Own LawyerAnother recent case raising corporateMiranda issues involved Laura Pendergest-Holt, a former financial officer with theStanford Group. Pendergest- Holt v. Sjoblomet al., No. 3:09-cv-00578-G (N.D. Tex.Mar. 27, 2009) (notice of dismissal withoutprejudice filed Apr. 9, 2009). In thislegal malpractice case, Ms. Pendergest-Holt believed, wrongly as it turned out, thatshe was represented by a Stanford Groupattorney at a U.S. Securities and ExchangeCommission (SEC) proceeding, which ultimatelyled to her criminal indictment. Duringthe SEC proceeding, the attorney wasasked whom he represented. The attorneystated, “I represent the company StanfordFinancial Group and affiliated companies.”Pl. Am. Compl. at 10. When asked toclarify whether he represented the witnessindividually, the attorney allegedly stated,“I represent her insofar as she is an officeror director of one of the Stanford affiliatedcompanies.” Id.Ms. Pendergest- Holt filed a $20 millionlegal malpractice lawsuit against the attorney,claiming that she was led to believethat the attorney represented her and wasacting in her best interests. Furthermore,she claimed that she was never told shedid not have to appear at the SEC hearing,nor was she told that her appearance couldresult in criminal prosecution. The lawsuitwas later dismissed without prejudice,but the very fact that it was initiated presentsa cautionary tale for practitioners onthese issues.The AOL Case—Not All CorporateMiranda Warnings Are Created EqualA Fourth Circuit case styled In re GrandJury Subpoena: Under Seal, 415 F.3d 333(4th Cir. 2005), considered the sufficiencyof Miranda warnings provided during aninternal investigation by America Online(AOL). Before an interview, AOL’s attorneystold one employee the following: “We representthe company. These conversationsare privileged, but the privilege belongsto the company and the company decideswhether to waive it. If there is a conflict,the attorney- client privilege belongs tothe company.” Id. at 336. Some evidencealso indicated that this employee was toldthat the corporate attorneys “‘could’ representhim as well, ‘as long as no conflictappear[ed].’” Id.During an investigation of AOL, thegrand jury issued a subpoena for documentsrelated to the internal investigation.The district court denied the employee’smotion to quash the subpoena, and theemployee appealed on the grounds thathe reasonably believed he was personallyrepresented by the interviewing attorneys.The Fourth Circuit rejected the employee’sargument, noting that the corporate attorneyswould have had to do something morethan state that they “could” represent theemployee to create an attorney- client relationship.However, the court emphasizedthat its decision “should not be read as animplicit acceptance of the watered- down‘Upjohn warnings’.” The Fourth Circuitviewed the attorneys as having weakenedthe warnings when they left open the possibilitythat they “‘could’ represent him [theemployee] as well.” Id. at 335.Based on Upjohn and its progeny, hereis what we know for sure: the attorney-client privilege possibly could protect communicationsby a corporation’s attorneywith some corporate employees when theemployee invokes the privilege even thoughthe attorney does not actually representthese employees. When choosing whichemployees to interview, it is imperative toknow the test that your jurisdiction usesto determine whether a corporation canAt its core, a corporateMiranda warning implicatesan attorney’s ethical duty ofloyalty to his or her client.invoke the attorney- client privilege. Andfinally, before interviewing any employee,the employee must receive a corporateMiranda or Upjohn warning.Practice Tips for HandlingCorporate Miranda IssuesMany defense attorneys do not think aboutcorporate Miranda warnings until it is toolate: when they have already conductedemployee interviews and failed to administerwarnings, when they have receiveddiscovery requests for those interviews, orwhen they have confronted the issue whiledefending an employee deposition. By followinga few simple steps, you and yourcorporate client will gain some protectionif a party attempts to compel productionof your discussions with a corporateemployee.Know Who You RepresentThis one is obvious, but it has to be said:achieve absolute clarity regarding whomyou represent. Do you represent the corporation?The corporate employee? If so, doyou represent the employee in the employee’sindividual capacity, corporate capacity,or both? These are questions that you mustanswer before you even think about administeringa corporate Miranda warning.Undertake Thorough Conflicts ChecksAt its core, a corporate Miranda warningimplicates an attorney’s ethical dutyFor The Defense ■ April 2013 ■ 41

Young Lawyersof loyalty to his or her client: “The mostfundamental aspect of the attorney- clientrelationship is the duty of undivided loyaltyowed by a lawyer to his client, and ultimatelyall of the ethical rules are derivedfrom this fundamental principle.” Nicholas,606 F. Supp. 2d at 1117. If you representa corporation, an employee who you interviewunderstandably may feel confusedIf you do not conductconflicts checks, you mayhave much larger problemsthan dealing with subsequentdiscovery arguments aboutwhether your interviewswere privileged.about whether or not you can or will protectthe employee’s interests. According to ABAModel Rule 1.13(f), “[i]n dealing with an organization’sdirectors, officers, employees,members, shareholders or other constituents,a lawyer shall explain the identity ofthe client when the lawyer knows or reasonablyshould know that the organization’sinterests are adverse to those of the constituentswith whom the lawyer is dealing.”A corporate Miranda warning intends, inpart, to fulfill this ethical responsibility byclarifying for a company’s employee who alawyer represents and to whom the lawyerowes the duty of loyalty. However, beforeinterviewing employees, conduct rigorousconflicts checks to ensure that interviewingany of the corporate employees or otherconstituent members will not create ethicalproblems for you. If you do not conductconflicts checks, you may have much largerproblems than dealing with subsequent discoveryarguments about whether your interviewswere privileged.Determine Which Test Appliesin Your JurisdictionBecome familiar with the corporateMiranda law in your jurisdiction. State42 ■ For The Defense ■ April 2013jurisdictions use a wide variety of tests todetermine how the attorney- client privilegeapplies to communications with corporateemployees. When choosing whichemployees to interview, it is imperative toknow the test that your jurisdiction usesto decide if, when, and how the attorneyclientprivilege will protect the interviews.If your jurisdiction does not extend theprivilege to low-level employees when acorporation invokes the privilege, then acompany’s privilege may not encompassyour employee interviews. Alternatively,if your jurisdiction uses some form of asubject- matter test, a company’s attorneyclientprivilege may not encompass allhigh-level employee interviews.Understand What You Should Includein a Corporate Miranda WarningAlthough individuals often write about thecorporate Miranda warning, we have foundvery little case law on the content of thewarning. Most cases simply cite Upjohn asthe authority for what goes into the warningeven though that case did not expresslyfurnish one. Ironically, even the employeesin Upjohn did not receive adequate corporateMiranda warnings: they were told inambiguous terms that they were not representedby the attorneys propounding thequestionnaire.Unfortunately, corporate Mirandawarnings do not have statutory bases, andthey have been left open to interpretationby the courts entirely. The AOL case taughtus that courts generally will view “watereddown”warnings as insufficient. Based ona recent Ninth Circuit Court of Appealscase, we propose that a warning shouldcontain something substantially similar tothe following:I represent your employer, the corporation.I do not represent you personally.Although I do not represent you,our conversation is confidential andprotected under the attorney- clientprivilege. However, you need to understandthat the privilege belongs to youremployer, the corporation. The corporation,and only the corporation, candecide whether and when to waive thatprivilege.Furthermore, the corporation cantell third parties and the governmentwhat you and I talk about, and they donot need your permission to make thisdisclosure.Our conversation is confidential, andyou need to treat it as confidential inorder for the privilege to be protected.You may wish to consult your ownattorney if you have any questions orconcerns about your own personal liability.I cannot advise you on any ofthese issues.See generally Ruehle, 583 F.3d at 604 n.3(extrapolating from articulated principles).See also id. at 612 (regarding treating aconversation as confidential and observingthat the “settled rule that any voluntarydisclosure of information to a thirdparty waives the attorney- client privilege,regardless of whether such disclosure laterturns out to be harmful”).If separate counsel is retained on behalfof a corporation’s employee, we recommendthat the corporation’s attorneys andthe employee’s individual counsel executea written joint agreement regarding privilege.This will help protect the ongoingapplicability of the attorney- client privilegeand maintain the confidentiality ofthe discussions.Deliver the Warning in WritingIf you take the trouble to administer a fullcorporate Miranda warning, why rely solelyon a verbal warning to that employee? Theabsence of a written record invites factualand credibility disputes between anemployee and the corporation’s attorney.Before an interview begins, give the verbalwarning, and then have the witness reviewthat same warning in writing and sign anddate an acknowledgement that he or shehas read the warning. The Broadcom case,which involved conflicting testimony aboutwhether the attorneys had administered awarning, should provide enough reason tofollow this advice. See also Nicholas, 606F. Supp. 2d at 1117 (“An oral warning to acurrent client that no attorney- client relationshipexists is nonsensical at best—andunethical at worst.”).Do Not Give Legal Advice to an EmployeeEmployees may ask—and they often doask—for legal advice from a corporation’sattorney. The attorney should not entertainthese requests for ethical and practi-Miranda, continued on page 73

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Young LawyersPreservation ofElectronically StoredInformationBy Jennifer Ecklundand Janelle L. DavisProposed Changesto FederalRule 37(e)The proposed rule couldgo a long way towardproviding certaintyto, and conservingresources for, bothcourts and litigants.At its November 2, 2012, meeting, the Judicial Conferenceof the United States Advisory Committee on Rules of CivilProcedure voted to recommend approving amendments toFederal Rule of Civil Procedure 37(e). Both the AdvisoryCommittee on Rules of Civil Procedureand the Committee on Rules of Practiceand Procedure, referred to as “the StandingCommittee,” likely will consider a finalversion of the proposed rule as well as publicationcommentary later this year. Giventhe increasing importance of electronicdiscovery and its corresponding obligations,the proposed rule change probablywill affect most practitioners. This articlewill briefly address (1) the current versionof Federal Rule of Civil Procedure 37(e);(2) issues created by the varying interpretationsand applications of the rule; and(3) the proposed change recommended bythe Advisory Committee on Rules of CivilProcedure.Federal Rule of Civil Procedure 37(e)The development of technology, particularlyover the last decade, has led toincreased concerns and discovery obligationsfor both plaintiffs and defendants.In the face of increased technologicalcapabilities and the sheer volume of electronicallystored information, companieshave adopted document retention policiesthat routinely delete electronicallystored information after a certain periodof time. Of course, these retention policiesand the automatic deletion of informationsometimes led to spoliation claims whendestroyed information potentially was relevantto a pending or future dispute.Before the 2006 amendments to theFederal Rules of Civil Procedure, courtsoften struggled to find a balance betweenthe duty to preserve and the complexitiesof managing electronically stored information.Some courts recognized the arduousburden that keeping all electronicallystored information would place on litigantsand adopted a less stringent approachto the duty to preserve. See Concord BoatCorp. v. Brunswick Corp., No. LR-C-95-781,1997 U.S. Dist. Lexis 24068, at *15–17 (E.D.■ Jennifer Ecklund focuses her practice on cases in securities fraud, health care fraud, tax fraud, andmortgage fraud, as well as matters related to Ponzi schemes and resulting receiverships. Janelle L. Davisfocuses her practice on mass tort, product liability, and aviation litigation, representing commercial airlinesin litigation arising from passenger claims and product manufacturers in product liability litigation. They bothwork in the Dallas office of Thompson & Knight LLP. The authors acknowledge the contributions of DougSalisbury, an associate with Thompson & Knight LLP.44 ■ For The Defense ■ April 2013

Ark. Aug. 29, 1997) (denying the plaintiffs’request for a spoliation instruction andfor costs and fees because the court foundthat the deletion of the defendant’s e-mailwas not due to bad faith). Other courts,however, took a more stringent approach,holding that the duty to preserve requiredaffirmative action to prevent the automaticdeletion of material that would be “reasonablylikely to be the subject of a discoveryrequest even before a request is actuallyreceived.” See Wiginton v. Ellis, No. 02 C6832, 2003 U.S. Dist. Lexis 19128, at *12–18 (N.D. Ill. Oct. 27, 2003) (finding that adefendant that followed its normal documentretention and destruction policieshad acted in bad faith by failing to preserveevidence and that it should have changedits normal retention policy). Perhaps oneof the most notable cases demonstratinga stringent approach is the Second Circuit2002 decision in Residential Funding Corp.v. DeGeorge Financial Corp., 306 F.3d 99(2d Cir. 2002).In that case, Residential Funding suedDeGeorge on a contract, and the partiesthen agreed to a discovery schedule.Despite their agreement, Residential Fundingmissed several deadlines and failedto produce certain relevant e-mails, andDeGeorge moved for sanctions in the formof an adverse inference charge. The districtcourt denied the motion for sanctions,in part because DeGeorge did notestablish “bad faith” or “gross negligence”on the part of Residential Funding. Onappeal, the Second Circuit held that discoverysanctions may be imposed on aparty that breaches a discovery obligationthrough ordinary negligence as well—that“bad faith” or “gross negligence” need notbe proved. Accordingly, the Second Circuitremanded the case to the district courtfor reconsideration, and the order originallydenying the motion for sanctionswas vacated.Thus, according to this Second Circuitdecision, a court could impose sanctionswhen appropriate based on a party’s noncompliancewith discovery obligationswhether or not the party acted in badfaith. A trial court, therefore, would havewide discretion to make sanctions availableand to impose them, and wise litigantswould take care to ensure that they proactivelyaddressed the requests made to themand to preserve evidence that a litigantmight request at a later date. Under ResidentialFunding, a mere negligent failureto preserve evidence could subject a partyto monetary sanctions, an adverse inferenceinstruction, or an array of other possiblepenalties that may affect the offendingparty’s case. The Residential Funding decisionmade clear that a court would view theefforts that a litigant undertook to avoiddestroying evidence as central to whetherit could appropriately sanction the litigant.According to the Second Circuit, litigantsmust take some steps to ensure thatthey preserved relevant materials to protectthemselves from discovery penaltiesdown the road.As parties continued to struggle with thecomplex responsibilities that accompanydiscovery of electronically stored information,disparate approaches by the courtsultimately prompted a change to the FederalRules of Civil Procedure to provideuniformity and clarity. In 2006, FederalRule of Civil Procedure 37 was amended toadd subsection (f) in an attempt to addressthe complex balance between the needfor parties to have access to electronicallystored information and the duty of custodiansof that information to preserve evidence.Federal Rule of Civil Procedure 37(f)is now codified in 37(e) as a result of stylisticchanges that were made in 2007. Therule was also designed to provide a consistentand clear standard for courts to applywhen deciding whether to impose sanctionsresulting from spoliation. But whilethe drafters of the rule wanted to providea clear standard for sanctions, theyalso intended for the rule to provide onlylimited protection against sanctions arisingfrom the destruction of electronicallystored information through routine systems.Advisory Comm. on Rules of CivilProcedure, Report of the Civil Rules AdvisoryComm. 83 (May 27, 2005). In otherwords, the drafters wanted to protect partieswith routine electronic systems thatautomatically discarded information. Id.Accordingly, when drafting the text ofFederal Rule of Evidence 37(f), the AdvisoryCommittee on Rules of Civil Proceduretried to strike a balance between theimportance of preservation of evidence anda party’s routine operation of its computersystems. Id. According to the AdvisoryCommittee on Rules of Civil Procedure,asking a party to stop the routine operationof its computer systems as soon as itanticipates litigation was unreasonable. Id.With these considerations in mind, FederalRule of Civil Procedure 37(f) attemptedto create a safe harbor for parties thatinadvertently destroyed documents inconnection with the use of an electronicLitigants must takesome steps to ensure thatthey preserved relevantmaterials to protectthemselves from discoverypenalties down the road.information system. Under the languageof the rule, and unless “exceptional circumstances”exist, a court may not imposesanctions “on a party for failing to provideelectronically stored information lost as aresult of the routine, good-faith operationof an electronic information system.” Fed.R. Civ. P. 37(e).Inconsistencies in theInterpretation of the RuleAlthough the goal of the Federal Rule ofCivil Procedure 37(e) was to provide consistencyand clarity, it has done little toachieve this goal. Despite the language ofthe rule, some courts still apply the rationaleof the Second Circuit decision in ResidentialFunding. And courts continue torule inconsistently—some applying theplain language of the rule to determine thatthey cannot impose sanctions for the failureto preserve electronic evidence withoutbad faith, and others deeming sanctionspermissible based on the inherent powerof the court or based on a party’s failure topreserve materials once the party reasonablyanticipated litigation.First, some courts have obediently followedthe plain language of the rule infinding that they cannot impose sanctionsappropriately without bad faith. For exam-For The Defense ■ April 2013 ■ 45

Young Lawyersple, in Escobar v. City of Houston, CV-04-1945, 2007 WL 2900581 (S.D. Tex. Sept. 29.2007), plaintiffs sued the city after theirson was killed by a Houston police officerand sought sanctions arising from thedestruction of certain electronic communicationsrelevant to their claims. The courtrefused to sanction the City of Houston,finding that the documents were destroyedSome courtshaveobediently followedthe plain language ofthe rule in finding thatthey cannot imposesanctions appropriatelywithout bad faith.46 ■ For The Defense ■ April 2013under the routine operation of a documentdestruction policy and the HoustonPolice Department’s computer system. Theplaintiffs failed to show bad faith regardingthe destruction of the documents atissue. Without evidence of bad faith, thecourt held that sanctions were inappropriateaccording to Federal Rule 37(f), thenthe rule in effect. The 2007 stylistic changesthat codified 37(f) as Federal Rule of CivilProcedure 37(e) had not been made whenthis decision was issued.Similarly, in Se. Mech. Services, Inc. v.Brody, No. 8:08-CV-1151-T-30EAJ, 2009 WL2242395 (M.D. Fla. July 24. 2009), the defendantcomplained of the plaintiff’s failureto adopt a proper litigation hold and tosuspend automatic overwriting of backuptapes that led to the destruction of relevantinformation. In that case, the plaintiff contendedthat one defendant deleted all of hise-mail, contacts, and tasks before endinghis employment with plaintiff. The plaintiff’sIT manager made this discovery afew days after the defendant’s employmentterminated but did not review the backuptapes that would have contained the deletedinformation until more than two weekslater when the system had already overwrittenthe tapes automatically. Anotherdefendant complained because this wouldhave been the only evidence to supportor to refute the plaintiff’s claim that thematerials had been deleted. The court ultimatelyfound that sanctions were inappropriatebecause the documents were lostduring the routine operation of the plaintiff’scomputer system, and nothing indicatedthat the plaintiff operated the systemin bad faith.Finally, in Denim North America Holdingsv. Swift Textiles, 816 F. Supp. 2d 1308(M.D. Ga. 2011), the plaintiffs did not havea document retention policy, and employeesroutinely deleted all but “important”e-mails immediately. This practice did notchange after the plaintiffs reasonably anticipatedthe litigation. The defendant soughtdismissal as a sanction for the destructionof the e-mails. The court denied sanctions,holding that bad faith was not apparent,and Federal Rule of Civil Procedure 37(e)prevents imposing sanctions without sucha finding.The second approach taken by somefederal courts is to hold that Federal Ruleof Civil Procedure 37(e) does not limit acourt from imposing sanctions under itsinherent powers or because a party has anobligation to preserve evidence once theparty reasonably anticipates litigation. Thisapproach is more in line with the ResidentialFunding decision despite the adoptionof Federal Rule of Civil Procedures 37(f) in2006. In three separate cases, the U.S. DistrictCourts for the Southern District ofNew York, the District of Columbia, and theNorthern District of Illinois all held that therule did not operate to exempt a party fromcomplying with its duty to preserve informationbecause of pending or reasonablyanticipated litigation. See Disability RightsCouncil of Greater Washington v. WashingtonMetro. Transit Auth., 242 F.R.D. 139(D. D.C. 2007); Arista Records v. Usenet.com, 608 F. Supp. 2d 409 (S.D. N.Y. 2009);Domanus v. Lewicki, 284 F.R.D. 379 (N.D.Ill. 2012) (objections sustained by 2012 WL3307364 (N.D. Ill. Aug. 13, 2012). In each ofthese cases, the courts held that the partieswere obligated to intervene before destructionof electronic information could occuror suffer consequences based on their failureto do so. As the Domanus court put it,“Rule 37(e) does not apply where a party isalready under a duty to preserve information.”Each of these courts found that theoffending party had breached its existingduty to preserve information by failing tostop routine destruction mechanisms evenwithout a showing of bad faith.In Stanfill v. Talton, 851 F. Supp. 2d 1346(M.D. Ga. 2012), the court captured theargument that many parties use to circumventFederal Rule of Civil Procedure 37(e)in its current form to support applying theResidential Funding’s negligence standard.Essentially, these parties argue either thatthey have not moved for sanctions underthe federal rules but instead under a court’sinherent powers, or the other party did notlose evidence “as a result of the ‘good faithoperation of an electronic informationsystem,’ but rather because of [the otherparty’s] failure to preserve the [evidence]before it was overwritten” when that partyhad a duty to preserve that evidence. Litigantsargue that when a party has a duty topreserve evidence and does not interveneto stop the routine operation of the storagesystem, then that party cannot claim thatit operated a system in good faith. Thesepositions have convinced several courts touse their inherent powers to disregard theplain language of Federal Rule of Civil Procedure37(e) and to impose sanctions basedon failure to intervene in the routine operationsof an electronic information system.Nucor Corp. v. Bell, 251 F.R.D. 191 (D.S.C. 2008), exemplifies a court’s willingnessto use its inherent powers to imposesanctions despite the bad faith standardin Federal Rule of Civil Procedure 37(e). Inthat case, Nucor sued a former employeeand a competitor for misappropriation oftrade secrets. The plaintiff filed a motionfor sanctions for spoliation and allegedthat the defendants intentionally destroyedevidence on a laptop, among other things.The defendants argued that Federal Rule ofCivil Procedure 37(e) prevented the courtfrom imposing any sanction for loss ofdata on the laptop. The court disagreed,declaring that even if 37(e) protected thedefendants’ conduct, the rule only appliedto sanctions issued under the Federal Rulesof Civil Procedure and was “not applicablewhen the court sanction[ed] a party pursuantto its inherent powers.” With thisrationale, courts are not limited by theprovisions of Federal Rule of Civil Proce-

dure 37(e) when they determine whetherthey may sanction discovery conduct, anda party cannot rely on good faith as offeringcertain protection when the party has beenaccused of destroying evidence.Thus, while enacting Federal Rule ofCivil Procedure 37(f) in 2006 sought toclarify the circumstances under whichsanctions would be an appropriate remedyfor the loss or destruction of evidence,courts have not necessarily strictly adheredto the rule in their decisions. As these casesdemonstrate, some courts have imposeddiscovery sanctions on a party despite therule even when another party has neitheralleged nor demonstrated bad faith by thepotentially offending party in the strictestsense. A court may resort to its inherentpower to sanction a party, or it may determinethat failure to act to interrupt the routinedestruction of information suffices asevidence of bad faith given a party’s dutyto preserve information once the party reasonablyanticipates litigation. The rule inits current form has not therefore consistentlyprovided protection to a party whenthe routine operation of computer systemsdestroys documents, at least not when thatparty should anticipate that a system thatroutinely destroys documents might losedocuments relevant to anticipated or pendinglitigation. These decisions suggest thata litigant needs to undertake affirmativeefforts to demonstrate compliance with itspreservation obligations to protect the litigantfully from discovery sanctions downthe road, irrespective of intentions.The Proposed Rule ChangeThe continued inconsistency among thefederal courts and the continued applicationof the Second Circuit decision in ResidentialFunding has prompted yet anotherproposed change to Federal Rule of CivilProcedure 37. If adopted, the new FederalRule of Civil Procedure 37(e) will more preciselyset forth the standard and factorsfor courts to apply when deciding whetherto impose sanctions for the destruction ofelectronically stored information. Thoughstill subject to change, the proposed newFederal Rule 37(e) currently reads as shownin box at right:Practitioners will want to note severalimportant things about the proposed newrule. First, the rule applies to all “discoverableinformation,” not just electronicallystored information or information lost dueto “the routine, good-faith operation of anelectronic information system.” Second,the proposed rule is designed to give litigantswho make reasonable efforts to satisfytheir preservation responsibilities theconfidence that they will not suffer serioussanctions should they lose informationdespite those efforts. Thus, under theproposed rule, a court may impose serioussanctions only if the court finds that(1) the failure was willful or in bad faithand caused substantial prejudice in the litigation;or (2) that the failure irreparablydeprived a party of any meaningful opportunityto present a claim or defense. Thisproposed change provides a clear and consistentstandard for courts to look to whendeciding sanctions motions. The changewill no longer permit courts to impose serioussanctions under a negligence or grossnegligence standard. Moreover, courtsmay not impose sanctions unless they findwillfulness or bad faith and substantialprejudice.The exception to the bad faith requirementis if the party seeking the discoveryestablishes that the failure to preservediscoverable information “irreparablydeprived” the party of “any meaningful”opportunity to present a claim or a defense.The drafters deliberately used these specificwords in (e)(2)(A)–(B). The words heightenthe burden that the party seeking sanctionsmust meet. According to the AdvisoryCommittee on Rules of Civil Procedure,examples of such situations that wouldwarrant sanctions “might include cases inwhich the alleged injury- causing instrumentalityhas been lost before the partiesmay inspect it, or cases in which the onlyevidence of a critically important evidencehas been lost.” Advisory Comm. on Rulesof Civil Procedure, Report of the Civil RulesAdvisory Comm. 131 (Nov. 1–2, 2012).These situations obviously happen rarely.Electronic Info, continued on page 72Proposed New Federal Rule 37(e)(e) FAILURE TO PRESERVE DISCOVERABLE INFORMATION. If a party failed to preservediscoverable information that reasonably should be preserved in the anticipation or conductof litigation,(1) The court may permit additional discovery, order the party to undertake curativemeasures, or require the party to pay the reasonable expenses, including attorney’sfees, caused by the failure.(2) The court may impose any of the sanctions listed in Rule 37(b)(2)(A) or give anadverse- inference jury instruction only if the court finds:(A) that the failure was willful or in bad faith and caused substantial prejudice inthe litigation; or(B) that the failure irreparably deprived a party of any meaningful opportunity topresent a claim or defense.(3) In determining whether a party failed to preserve discoverable information thatreasonably should have been preserved, and whether the failure was willful or inbad faith, the court should consider all relevant factors, including:(A) the extent to which the party was on notice that litigation was likely and thatthe information would be discoverable;(B) the reasonableness of the party’s efforts to preserve the information, includingthe use of a litigation hold and the scope of the preservation efforts;(C) whether the party received a request that information be preserved, the clarityand reasonableness of the request, and whether the person who made therequest and the party engaged in good-faith consultation regarding the scopeof preservation;(D) the proportionality of the preservation efforts to any anticipated or ongoing litigation;and(E) whether the party sought timely guidance from the court regarding any unresolveddisputes concerning the preservation of discoverable information.See Comm. on Rules of Practice and Procedure, Report of Comm. on Rules of Practice andProcedure 104 (Jan. 3–4, 2013).For The Defense ■ April 2013 ■ 47

Young LawyersA Strangling HoldBy Maureen Bickleyand Larissa KoshatkaApplication ofthe Work ProductProtectionWeighing how workproduct protectionsupports the legalsystem against theways a party’s failureto preserve evidencemight destabilize it.As electronic discovery has become more prevalent andvoluminous, national standards for the preservation ofevidence have evolved dramatically in the past decade.Through a proliferation of electronic discovery ordersinvolving discovery compliance, courtshave addressed when the duty to preserveevidence arises, signifying a party’s dutyto issue a “litigation hold.” Courts havenot answered, however, whether a partycan withhold documents generated beforeissuing a litigation hold on the basis ofwork product protection. Both the duty topreserve evidence and the work productdoctrine require the “anticipation of litigation.”Thus, can a party anticipate litigationfor purposes of asserting work productprotection before it anticipates litigation forpurposes of issuing a litigation hold?This new issue surfaced in an Indianastate case in Marion County SuperiorCourt, where both parties withheldthe production of thousands of documentson the basis of the work product doctrine.In its motion to compel, the defendantargued that its opponent could not havecreated or exchanged certain documents inanticipation of litigation because the documentswere created prior to the issuanceof a litigation hold. Citing federal authorityrequiring a party to issue a litigationhold once it anticipates litigation, the defendantreasoned that its opponent couldnot have anticipated litigation before issuingthe litigation hold and, therefore, allthe documents created or exchanged beforethe issuance of a litigation hold were notentitled to work product protection. If aparty cannot withhold documents generatedbefore issuing a litigation hold on thebasis of work product, the consequences forfailing to issue a timely litigation hold willbe significantly greater. The repercussionsfor failing to issue a litigation hold will notonly include sanctions for spoliation of evidencefor the documents that are not preservedbut will also include the loss of workproduct protection over documents thatwere preserved and withheld. If this legalproposition develops into federal case law,it would likely encourage counsel and clientsto reexamine policies and standardson issuing litigation holds in order to pre-■ Maureen Bickley is a senior associate in the Cincinnati office and Larissa Koshatka is an associate in theIndianapolis office of Frost Brown Todd LLC. Ms. Bickley’s practice focuses on the defense of product liabilityand personal injury actions as well as the prosecution and defense of contract disputes, business torts,and unfair competition claims, including noncompete and trade secret claims. Ms. Koshatka concentratesher practice on tort and insurance defense and product liability litigation.48 ■ For The Defense ■ April 2013

serve the undoubtedly valuable work productprotection.The Work Product DoctrineWork product is a concept involving thework prepared by a party or attorney “inanticipation of litigation or for trial.” Fed.R. Civ. P. 26(b)(3). Under the federal workproduct rule, as codified in the FederalRules of Civil Procedure, a party mayobtain discovery of documents that wereprepared in anticipation of litigation onlyupon showing substantial need and theinability to obtain the substantial equivalentof the materials by other means withoutundue hardship. Fed. R. Civ. P. 26(b)(3). A state’s rules may vary from the federalmodel in providing that work productis absolutely immune from disclosure, butmany state work product rules mirror thefederal rule. See, e.g., Ind. Tr. R. 26(B)(3);Oh. Civ. R. 26(B)(3). Although sometimesclassified as a privilege, the work productrule establishes a qualified immunity fromdiscovery, which a requesting party mayovercome only with the requisite showing.See, e.g., Kandel v. Bro. Intern. Corp., 683 F.Supp. 2d 1076, 1083 (D. Cal. 2010). When arequesting party has achieved this showing,a court must protect against the mentalimpressions, conclusions, opinions, orlegal theories of an attorney or other representativeof the disclosing party concerningthe litigation in ordering discovery oftrial preparation materials. Fed. R. Civ. P.26(b)(3).Although almost all of the work thatattorneys do and the advice that they dispensemay be viewed as being “in anticipationof litigation” or avoiding it, workproduct protection requires a strong showingthat litigation was more than a remotepossibility. Rexford v. Olczak, 176 F.R.D. 90,91 (W.D.N.Y. 1997). Work product protectionrequires a substantial probability thatlitigation will develop and that it will beginimminently, or at least that a party reasonablyanticipates it. William A. Gross Const.,Assoc., Inc. v. Am. Mfrs. Mut. Ins. Co., 262F.R.D. 354, 362 (S.D.N.Y. 2009). However,the fact that litigation eventually arisesdoes not in and of itself cloak materialsprepared by an attorney with work productprotection. Tellabs Operations, Inc. v.Fujitsu Ltd., 283 F.R.D. 374, 388 (N.D. Ill.2012). The work product doctrine generallywill not protect documents prepared inthe ordinary course of business before litigationcommences. Lindley v. Life InvestorsIns. Co. of Am., 267 F.R.D. 382, 394 (N.D.Okla. 2010). Preparing a document in theordinary course of business that a partyknows may be useful if litigation ariseswill not meet the “anticipation of litigation”requirement. La. Mun. Police EmployeesRet. Sys. v. Sealed Air Corp., 253 F.R.D.300, 307 (D. N.J. 2008).The work product doctrine was developedto prevent a possible adversary fromgaining an unfair advantage by acquiringdocuments prepared in anticipation of litigationthat may expose the preparing party’sstrategy or evaluation of the strengthsand weaknesses of its case. It prevents partiesfrom taking advantage of a free rideon their opponents’ investigative effortsin the course of litigation. In the seminalcase on work product protection, Taylor v.Hickman, the United States Supreme Courtstated that “proper preparation of a client’scase demands that [the attorney] assembleinformation, sift what he considers tobe the relevant from the irrelevant facts,prepare his theories and plan his strategywithout undue and needless interference.”Hickman v. Taylor, 329 U.S. 495, 67 S. Ct.385, 393 (1947). This purpose was furtherclarified through legal scholarship:The central justification for the workproduct doctrine is that it preserves theprivacy of preparation that is essentialto the attorney’s adversary role. Anyinvasion of this privacy could distortor modify the attorney’s function tothe detriment of the adversary system.Commentators and courts agree thatthe function of work product immunityis to preserve the benefits of adverse representationwithout frustrating the goalsof open discovery. A secondary rationale,sometimes proposed as an independentjustification for the doctrine,emphasizes the need to protect the privacyof the attorney’s mental processes.Note, The Work Product Doctrine, 68 CornellL. Rev. 760 (1982–83).Work product protection may be waived.Most courts hold that both the client andthe lawyer may waive the work productprotection. S.N. Phelps & Co. v. Circle KCorp., 199 B.R. 92, 99 (Bankr. S.D.N.Y.1996). Generally, waiver of work productprotection occurs when the covered materialsare used in a manner that is inconsistentwith the protection. Lindley v. LifeInvestors Ins. Co. of Am., 267 F.R.D. 382,394 (N.D. Okla. 2010). Thus, disclosingwork product to an adversary normallywaives work product protection. However,unlike attorney- client privilege, disclosingwork product to third parties does notautomatically waive work product protection.Viacom, Inc. v. Sumitomo Corp., 200F.R.D. 213, 221 n.6 (S.D.N.Y. 2001). Disclosingwork product to a third party otherthan an adversary waives protection only ifthe disclosure makes it likely that the workproduct will fall into the adversary’s hands.In re Doe, 662 F.2d 1073, 1081–82 (4th Cir.1981). In such situations, courts frequentlyconduct a fact- intensive analysis of whetherthe disclosure of the work product makes itmore likely that the adversary will acquireaccess to that work product. Verschoth v.Time Warner, No. 00 CIV 1339, 2001 WL546630 (S.D.N.Y. May 22, 2001).The Duty to Preserve EvidenceLitigants owe an “uncompromising dutyto preserve” what they know or reasonablyshould know will be relevant evidence in apending lawsuit even without a discoveryrequest or order to preserve the evidence.The duty to preserve evidence exists whena party “is on notice that documents andinformation in its possession are relevantto litigation, or potential litigation, or arereasonably calculated to lead to the discoveryof admissible evidence.” Bayoil, S.A. v.Polembros Shipping Ltd., 196 FRD 479, 482(S.D. Tex. 2000). Courts have used differentphrases in explaining the test for potentiallitigation, including “anticipated,” “likely,”and “probable.” See Silvestri v. Gen. MotorsCorp., 271 F3d 583, 591 (4th Cir. 2001)(“anticipated”); Cache La Poudre Feeds,LLC v. Land O’Lakes, Inc., 244 F.R.D. 614,621 (D. Colo. 2007) (“likely”); In re Napster,Inc. Copyright Litig., 462 F. Supp. 2d 1060,1068 (N.D. Cal. 2006) (“probable”).A useful and frequently cited examplefor determining when a duty to preserveevidence begins is found in a series of opinionsissued by United States District Courtfor the Southern District of New York inZubulake v. UBS Warburg, LLC, 220 F.R.D212 (S.D.N.Y. Oct. 22, 2003) (sometimesreferred to as “Zubulake IV”). The courtFor The Defense ■ April 2013 ■ 49

Young Lawyersheld that once a party “reasonably anticipates”litigation, it must suspend its routinedocument retention and destructionpolicy and implement a litigation hold toensure the preservation of relevant documents.Zubulake IV, 220 F.R.D at 218. InZubulake IV, the court stated that the dutyto preserve evidence arose “at the latest”when Zubulake filed her employment discriminationclaim. However, the court alsonoted that the duty to preserve may havearisen earlier. Specifically, USB employeesexchanged e-mails regarding possible litigationwith the plaintiff months before theplaintiff, Zubulake, filed her charge. Whilethe court recognized that merely contemplatinga lawsuit was not enough to warranta duty to preserve, the e-mails at issuewere labeled with an attorney- client privilegelabel and sent to “the relevant people.”Accordingly, the court decided that USBreasonably anticipated litigation and theduty to preserve documents began whenthe e-mails at issue were exchanged.Courts analyze cases individually to determinewhen a party reasonably knew orshould have known that future litigationwas likely, thus activating the duty to preserveevidence and issue a litigation hold.See, e.g., In re NTL, Inc. Sec. Litig., 244 F.R.D.179, 193 (S.D.N.Y. 2007) (holding that theduty to preserve evidence was triggeredby a prelawsuit internal memo referencingthe heightened risk of litigious activity); Inre Kmart Corp., 371 B.R. 823, 844 (Bankr.N.D. Ill. 2007) (stating that an administrativeclaim containing sufficient informationto put Kmart on notice that litigationwas likely triggered Kmart’s duty to implementa litigation hold); E*Trade Sec. LLC v.Deutsche Bank AG, 230 F.R.D. 582, 588–89(D. Minn. 2005) (holding that defendants’duty to preserve relevant information commencedwhen they received notice that abankruptcy court was investigating an allegedscheme). Cf. Cache LaPoudre Fees,LLC v. Land O’Lakes, Inc., 244 F.R.D. 614(D. Colo. 2007) (holding that defendant’sduty to preserve evidence was not triggeredby prelawsuit correspondence from plaintiff’scounsel that did not threaten litigationbut instead raised the possibility of nonlitigiousresolution of alleged claim); AAB JointVenture v. United States, 75 Fed. Cl. 432,442 (Fed. Cl. 2007) (stating that defendant’sduty to preserve evidence was not triggered50 ■ For The Defense ■ April 2013by correspondence that did not apprise thedefendant the requisite certainty of litigationor of the scope of the claims).Violation of the duty to preserve evidenceis known as “spoliation.” See Kronischv. United States, 150 F.3d 112, 130(2d Cir. 1998); Sensonics, Inc. v. AerosonicCorp., 81 F.3d 1566, 1575 (Fed. Cir. 1996);Silvestri v. Gen. Motors Corp., 271 F.3d583, 590 (4th Cir. 2001). Spoliation is thedestruction or significant alteration ofevidence or failure to preserve evidencein pending or reasonably foreseeable litigation.United Med. Supply Co. v. UnitedStates, 77 Fed. Cl. 257, 263 (2007). Thecourt in United Medical Supply noted that“[s]po lia tion may result in a variety of sanctions,with ‘the oldest and most venerableremedy’ being an ‘adverse inference,’ underwhich the finder of fact may infer that thedestroyed evidence would have been favorableto the opposing side.” Id. at 263.Work Product Protection ActivationGenerates a Litigation Hold DutyUltimately, the work product doctrine andthe duty to issue a litigation hold noticeturn on whether a party reasonably anticipateslitigation. Therefore, the two doctrinesare intrinsically intertwined. Anumber of federal courts, recognizing therelationship between the two doctrines,have held that once a party anticipates litigationactivating work product protection,the party has an affirmative obligation topreserve evidence. See PacifiCorp v. Nw.Pipeline, 879 F. Supp. 2d 1171 (D. Or. 2012);Sinai v. State Univ. of N.Y. at Farmingdale,No. CV09-407, 2010 WL 3170664 (E.D.N.Y.Aug. 10, 2010); sanofi- aventis DeutschlandGmbH v. Glenmark Pham. Inc., USA, No.07-CV-5855, 2010 WL 2652412 (D. N.J. Jul.1, 2010). See also Medeva Pharma SuisseA.G. v. Roxane Lab., Inc., No. 07-5165, 2011WL 310697 (D. N.J. Jan. 28, 2011).In PacifiCorp v. Nw. Pipeline GP, thedefendants sought sanctions against theplaintiff for spoliation of evidence. 2012WL 2903976, at *11. At issue in PacifiCorpwas various shutdowns of a natural gaspower generation plant allegedly causedby compressor oil in the gas supply thatcontaminated the generator turbines. Id.at **3–6. The plaintiff testified that it firstbecame aware that the damage was dueto the contamination in July 2007. Therefore,the defendants argued that the plaintiffreasonably anticipated litigation in July2007 and had an obligation to preserve evidence.Id. at *12. The plaintiff argued thatits duty to preserve evidence arose on October9, 2007, the date that it retained outsidecounsel.Before filing a motion for spoliationsanctions, the defendants filed a motion tocompel the production of documents fromthe plaintiff. Id. at *13. In its memorandumin opposition, the plaintiff took theposition that e-mails and other documentscreated after August 2, 2007, were immunefrom production because the work productdoctrine protected them. Id. The plaintiffargued that documents created afterAugust 2, 2007, were created in anticipationof litigation. Id. The court held that theplaintiff was judicially estopped from takingthe position that documents were entitledto work product protection before theplaintiff had a duty to preserve evidence.The plaintiff reasonably anticipated litigationby August 2, 2007, and, therefore, itsduty to preserve all relevant evidence beganon August 2, 2007.In Siani v. State Univ. of N.Y. at Farmingdale,the U.S. District Court for the EasternDistrict of New York held that if litigationwas reasonably foreseeable “for work productpurposes,” it was reasonably foreseeablefor the defendants’ “duty to preserve purposes.”2010 WL 3170664, at *5. The plaintiffin Siani filed a charge with the U.S.Equal Employment Opportunity Commission(EEOC) on June 27, 2008. The defendantsargued that they became obligated topreserve evidence when the plaintiff filedwith the EEOC. The plaintiff countered thatthe defendants were put on notice of his agediscrimination allegations in January 2008,the defendants retained outside counsel inearly 2008, and the defendants claimedwork product protection on documentsdated as early as February 2008. Id. at *5.The court found that the duty to preserveevidence arose at the same time that thework product privilege became availableto the defendants. Id. The court ultimatelyrefused to impose an adverse inference fordocuments destroyed between February2008 and July 2008 because the plaintiffcould not show that the documents wererelevant to the plaintiff’s claims. Id. at *9.That was not the case in sanofi- aventis

Deutschland GmbH v. Glenmark Pharm.Inc., USA. In sanofi-aventis, the U.S. DistrictCourt for the District of New Jerseyheld that an adverse inference was appropriatebecause the defendant claimed thatthe work product doctrine applied during aparticular time period but failed to issue acorresponding litigation hold or otherwisepreserve e-mail communications from thattime. 2010 WL 2652412, at *5. sanofi-aventiswas a patent infringement case over thefiling of a Paragraph IV certification. Thedefendants asserted that the work productdoctrine protected certain documentsdated February 23, 2006, and later. Id. at*1. But the defendants failed to issue a litigationhold notice until June 26, 2007. Id.Because the defendants anticipated litigationas early as February 23, 2006, theyhad an obligation to issue a litigation holdnotice no later than February 23, 2006.Id. at *5. The defendants’ failure to do soalone was sufficient for the court to grantan adverse inference that all documentsdestroyed during that 16-month period“might or would have been unfavorable tothe position of the” defendants. Id. at *4–5.Although only a few cases address theissue, the precedent is set: if the work productdoctrine applies to a particular timeperiod, then a party has an affirmative dutyto issue a litigation hold or otherwise preserverelevant evidence from the period.And, in fact, it makes sense. If a party reasonablyanticipates litigation to the extentthat it creates communications and documentsin anticipation of that litigation,then the party has a duty to preserve evidencerelated to the potential litigation. Thepenalty for failing to preserve the evidencewill vary depending on the jurisdiction,ranging from none at all to dismissal of alawsuit and monetary damages.Does Invoking Work ProductProtection Depend on a ProperlyTimed Litigation Hold?The authors have not uncovered publishedopinions in which a court has ordered theproduction of documents despite a claimof work product protection when the protectionclaiming party failed to issue alitigation hold notice. Yet some partiesseeking material withheld on work productgrounds will argue that failing to issuea litigation hold indicates that the withholdingparty did not anticipate litigationso the withheld material cannot have workproduct protection. In addition to the Indianastate case, the authors found only oneother case in which a party attempted tomake this argument, although the courtviewed it as baseless:Lockheed makes a blanket assertion thatthe absence of a litigation hold indicatesthat MTA did not anticipate litigation.This contention is without basis andLockheed cites no authority in supportof it. If the nature of the communicationsare such that, but for the prospectof litigation, the material would not otherwisehave been made, then the mate-International Association of Defense Counsel41stannualtrialacademyJuly 27 - August 2, 2013Stanford Law School Palo Alto, California USAOpen tO all DRI membeR fIRmsENROLL TODAYlImIteD seats avaIlablethe iadc trial academy is the Onlydefense-fOcused civil trial academyA Week of Investment for Immediate and Lifelong Benefits• Instant results in an accelerated learning environmentthat covers every major aspect of trial• Hands on learning exercises that are videotaped andcritiqued by an elite faculty of defense attorneysFor more information, Trial Academy video, and registration,visit www.iadclaw.org.“You could be lead counsel for a party in 10 jury trials andget feedback from each juror and you still would not be ableto match the level of insight learned about your style andmethod of delivery during one week at Trial Academy.”-Ashley Brathwaite, Ellis & Winters LLPFor The Defense ■ April 2013 ■ 51

Young Lawyersrial in question is—by definition—workproduct, notwithstanding the issuanceof a notice issued within the corporationto preserve documents.… [T]hereis neither authority nor logic backingLockheed’s assumption that issuance ofa notice is a pre- requisite for establishingthat a given document was createdin anticipation of litigation.A court properly mayimpose an instructionregarding evidencespoliation only when a partyhas deliberately destroyedevidence, and often acourt will not make oneavailable when the partymerely negligently failedto issue a litigation hold.52 ■ For The Defense ■ April 2013Lockheed Martin Transp. Sec. Solutionsv. MTA Capital Constr. Co., Nos. 09 CV4077, 09 CV 6033, 2011 WL 8197601, at*29 (S.D.N.Y. Jul. 28, 2011) (internal citationsomitted). Yet, if successful, thisargument could have serious implicationsfor everyone involved in litigation, butparticularly for corporations. Imaginethis scenario: a manufacturer managing arecall begins preparing for the inevitableonslaught of litigation but only issues alitigation hold notice after a plaintiff filesthe first lawsuit. Following the logic of thedefendant in the Indiana state case, plaintiffscould discover all of the documentscreated by the manufacturer and its counselbefore the manufacturer issued a litigationhold prepared for litigation unlessthe manufacturer could establish thatthe attorney- client privilege covered it.On the other hand, as discussed below,it seems unlikely that a court would holdthat a party waived the work product doctrineby failing to issue a litigation holdnotice.The work product doctrine affords aninherent, qualified privilege to all partiesin litigation. To claim the benefits of workproduct immunity does not require takingaffirmative steps. Rather, once a potentiallitigant reasonably anticipates litigationand prepares documents or exchangese-mails in anticipation of the litigation,the privilege applies. The work productdoctrine preserves the duties that attorneysowe to clients and clients’ legal interests.Consequently, the only way to waivework product protection is to use the coveredmaterials in a manner inconsistentwith their protection. Essentially a partywaives the work product doctrine only byactively disclosing the privileged informationor documents.Therefore, the reasoning of the defendantin the Indiana state case has anintrinsic flaw. By arguing that a partywaives protection under the work productdoctrine by failing to issue a litigation holdnotice or otherwise preserving evidence,the party’s failure to act would waive theprotection. Failing to ensure the preservationof evidence does not result in the useof materials that would otherwise be coveredby the work product doctrine. A failureto issue a litigation hold notice doesnot result in the waiver of the work productdoctrine.Underlying Policy ConsiderationsThe work product doctrine developedpartly to shield an attorney’s trial preparationfrom an opponent’s discovery and toprotect a client’s legal interests. An attorneywould have less incentive to performthe diligent investigation and research necessaryto represent a client adequately if anopponent could simply benefit from theattorney’s efforts through discovery. If anopponent could discover documents preparedby an attorney anticipating litigationmerely because the attorney’s clientnegligently failed to issue a litigation hold,it seems likely that trial preparation qualitywould decline.The purpose of requiring a litigationhold when a party anticipates litigation isto preserve evidence that may be relevantto that litigation. A party anticipating litigationalready has an incentive to preserveevidence in the moment because sanctionsalready exist to penalize the party’s failureto issue a litigation hold. In most jurisdictions,the intentional spoliation of evidencerelevant to a case raises an inference thatthe evidence would have been unfavorableto the party responsible for the spoliation.Union Pac. R.R. Co. v. Barber, 149 S.W.3d325 (Ark. 2004); Morris v. Buchanan, 44N.E.2d 166 (Ind. 1942). Moreover, a partyseeking an adverse- inference instructionor other sanctions for evidence spoliationmust establish the following elements:(1) the party having control over the evidencehad an obligation to preserve it at thetime it was destroyed; (2) the evidence wasdestroyed with a culpable state of mind;and (3) the destroyed evidence was relevantto the party’s claim or defense such that areasonable trier of fact could find that itwould support that claim or defense. Zubulakev. UBS Warburg LLC, 229 F.R.D. 422(S.D.N.Y. 2004). Accordingly, a court properlymay impose an instruction regardingevidence spoliation only when a party hasdeliberately destroyed evidence, and oftena court will not make one available whenthe party merely negligently failed to issuea litigation hold. Thus if courts generallydo not impose adverse inference instructionswhen parties fail to issue litigationholds, it seems much too heavy handedto revoke work product protection for thesame failures.ConclusionSince the duty to preserve evidence andwork product protection both require the“anticipation of litigation,” it may seemlogical to prohibit a party from withholdingdocuments on the basis of work productthat it generated before issuing a litigationhold. However, as discussed, it wouldviolate the policy considerations underlyingboth work product protection and theduty to preserve evidence to revoke a party’swork product protection for the negligentfailure to issue a litigation hold notice.Thus, although the Indiana state case presentsa compelling argument that couldstrengthen the incentives to promptly issuea litigation hold, the ways that work productprotection supports the legal systemoutweigh the ways a party’s failure to preserveevidence might destabilize the system.

Young LawyersWhat’s New?By Christelle CoslinRecast of theEuropean Regulation“Brussels I”The recast regulationwill certainly have animpact on cross-borderlitigation between theEuropean Union and non-European countries, suchas the United States.On December 12, 2012, the European Council and EuropeanParliament formally adopted Regulation (EU)No. 1215/2012 on Jurisdiction and the Recognition andEnforcement of Judgments in Civil and CommercialMatters. Far from a complete innovation,this regulation is the recast of Regulation(EC) No. 44/2001 of December 22, 2000,bearing the same title, the so-called “BrusselsI Regulation.” The Brussels I Regulationreplaced the Brussels Convention ofSeptember 27, 1968, on Jurisdiction andthe Enforcement of Judgments in Civil andCommercial Matters, which had progressivelybeen ratified by all member statesjoining the European Union.BackgroundThe Brussels I Regulation, which came intoforce in March 2002, is the cornerstone ofthe European legislation on cross- borderlitigation and judicial cooperation in theEuropean Union. It includes rules of jurisdictiondetermining when national courtsof European member states have jurisdiction,rules designed to ensure the coordinationof proceedings pending in severalmember states, and rules governing howthe member states will recognize judgmentsfrom other member states. Since itsinception 11 years ago, the Brussels I Regulationhas been successful, according tomost legal authors, in establishing commonrules of jurisdiction, as well as in facilitatingthe recognition and enforcement ofcourt decisions in other member states incommercial and civil matters.Nonetheless, the European institutionswished to take it a step further, and it tookthem two years to draft, discuss, and adoptRegulation (EU) No. 1215/2012. The recastingprocess started at the end of 2010 whenthe European Commission published a proposalwith suggested reforms. CommissionProposal for a Regulation of the EuropeanParliament and of the Council on Jurisdictionand the Recognition and Enforcementof Judgments in Civil and Commercial Matters,COM (2010) 748 final (Dec. 14, 2010).In this proposal, the European Commissionproposed radical changes to the BrusselsI Regulation. These were the result ofseveral years of thinking as well as empiricaldata gathering as demonstrated by arelatively abundant legislative history. The■ Christelle Coslin is a senior associate in the litigation practice of the Paris office of Hogan Lovells. Ms. Coslin has broad experiencein commercial litigation and product liability issues and provides assistance to major companies in litigation relating to tort,negligence, and product liability claims. She often assists clients with respect to white collar crime and corruption issues. Ms.Coslin regularly advises clients about international jurisdiction and choice-of-law issues in cross- border disputes.For The Defense ■ April 2013 ■ 53

Young Lawyersrecasting process followed the publicationof several preliminary studies regardingthe concrete application of the Brussels IRegulation, notably the Report on the Applicationof Regulation Brussels I in the MemberStates, presented by Prof. BurkhardHess, Prof. Thomas Pfeiffer, and Prof. PeterSchlosser. Study No. JLS/C4/2005/03 (Inst.for Comp. Law, Conflicts of Law, and Int’lThe European Councildecided not to follow theEuropean Commission’ssuggestions aboutarbitration and to maintainarbitration issues outsidethe scope of the regulation.54 ■ For The Defense ■ April 2013Bus. Law, Heidelberg Univ. Sept. 2007). TheEuropean Commission also commissionedan external study assessing the suggestedamendments’ impact. Centre for Strategyand Evaluation Services, Data Collectionand Impact Analysis—Certain Aspects of aPossible Revision of the Council Regulation(EC) No. 44/2001 on Jurisdiction and theRecognition and Enforcement of Judgmentsin Civil and Commercial Matters Regulation(Sept. 2010).On May 5, 2011, the European Economicand Social Committee submitted itsopinion on the reform proposal, generallyapproving the proposal and its major orientations.The committee expressed a few reservationson some of the proposed changes.Opinion of the European Economic andSocial Committee on the ‘Proposal for a Regulationof the European Parliament and ofthe Council on Jurisdiction and the Recognitionand Enforcement of Judgments inCivil and Commercial Matters’ COM (2010)748 Final—2010/0383 (COD), 2011 O.J. (C218/14).On June 8, 2012, the Council of the EuropeanUnion, which, among other things,oversees justice and home affairs, adoptedan amended version of the reform proposal.This was the result of the guidelinespreviously agreed upon by the EuropeanCouncil during its session in December2011, as well as from further discussions.It was then approved by the European Parliamentwith limited amendments, andthe European Council agreed to the latestversion of the recast Brussels I Regulationon December 6, 2012. The recastBrussels I Regulation, Regulation (EU) No.1215/2012, was published in the OfficialJournal of the European Union on December20, 2012, and it will become effective asof January 10, 2015. This regulation shouldapply to all member states when it comesinto force: the United Kingdom and Irelandhave decided to take part in the adoptionand application of the recast regulation,which, once adopted, Denmark will alsoadhere to under an agreement it made withthe European Union in 2005.Objectives of Regulation(EU) No. 1215/2012According to the European Commission,the objectives of the changes presented inthe initial reform proposal were three-fold:(1) lowering legal costs, diminishing proceduraldelays, and improving legal certaintywithin the European Union; (2) allowingbetter access to justice and protecting weakparties; and (3) ensuring a better coordinationof legal proceedings. The EuropeanCommission intended these reformsto take into account the evolutions that theEuropean Union had experienced since theadoption of the Brussels I Regulation in theearly 2000s, in particular the developmentof the European single market.As mentioned in Recital 3 of Regulation(EU) No. 1215/2012:the Union has set itself the objective ofmaintaining and developing an area offreedom, security and justice, inter alia,by facilitating access to justice, in particularthrough the principle of mutualrecognition of judicial and extra- judicialdecisions in civil matters. For the gradualestablishment of such an area, theUnion is to adopt measures relatingto judicial cooperation in civil mattershaving cross-border implications, particularlywhen necessary for the properfunctioning of the internal market.In the same direction, Recital 4 providesthatcertain differences between nationalrules governing jurisdiction and recognitionof judgments hamper the soundoperation of the internal market. Provisionsto unify the rules of conflictof jurisdiction in civil and commercialmatters, and to ensure rapid andsimple recognition and enforcement ofjudgments given in a Member State, areessential.Furthermore, the recast regulation, Regulation(EU) No. 1215/2012, also sought toaddress the challenges that arise from crossborderlitigation—within and outside theEuropean Union—which globalization renderedmore frequent and more complicated.For example, some of the new provisionswere designed to prevent forum- shoppingstrategies that have attempted to circumventchoice-of-court agreements. Moreover,the recast regulation, Regulation (EU)No. 1215/2012, was conceived with an economicperspective. In particular, the impactassessment of the initial reform proposalcommissioned by the European Commissionmentioned the economic crisis severaltimes and wished that the proposal would“create the necessary legal environment forthe European economy to recover” thanks toreduced litigation costs and improved legalcertainty. Centre for Strategy and EvaluationServices, supra, at 8.Amendments to the MaterialScope of ApplicationCurrently, the Brussels I Regulation excludesarbitration from its scope. To achievebetter coordination, the recasting proposalincluded provisions on the interface betweenarbitration and court proceedings.Legal scholars debated these provisions,fearing that arbitration clauses could consequentlybecome less efficient. The EuropeanCouncil decided not to follow the EuropeanCommission’s suggestions about arbitrationand to maintain arbitration issues outsidethe scope of the regulation.More precisely, Recital 12 of the recastregulation, Regulation (EU) No. 1215/2012,explains the exclusion in detail. Regulation(EU) No. 1215/2012 will not preventa national court from staying or dismissingthe proceedings because of an arbitrationagreement or from examining whethersuch an agreement is null and void or cannotbe enforced or opposed to the parties.

These questions will remain subject to thenational laws of member states. The rulingsof national courts on such issues are notsubject to the recognition rules set forth byRegulation (EU) No. 1215/2012. This beingsaid, once a national court has decided toexercise jurisdiction despite an arbitrationagreement because the clause is null andvoid or unenforceable, the judgments onthe merits of the case will become subjectto the rules of recognition and enforcementof Regulation (EU) No. 1215/2012 once ittakes effect in 2015. In addition, Regulation(EU) No. 1215/2012 willnot apply to any action or ancillaryproceedings relating to, in particular,the establishment of an arbitral tribunal,the powers of arbitrators, the conductof an arbitration procedure or anyother aspects of such a procedure, norto any action or judgment concerningthe annulment, review, appeal, recognitionor enforcement of an arbitral award.Apart from arbitration, Regulation (EU)No. 1215/2012 mentions a few additionalexclusions relating to the liability of thestate for acts and omissions committed inthe exercise of state authority and relatingto relationships deemed to have comparableeffects on marriage and on maintenanceobligations.Status Quo Regarding the TerritorialScope of the Rules of JurisdictionThe territorial scope of most of the rules ofjurisdiction in the Brussels I Regulation—subject to certain noteworthy exceptions—is limited to cases in which the defendant isdomiciled in a member state. However, oneof the most groundbreaking amendmentsthat the European Commission suggestedin the initial reform proposal consisted ofeliminating such a limitation and extendingall rules of jurisdiction to defendantsdomiciled in non- European countries, includingthe United States. This would havemeant that member states would have hadto apply in almost all cases the rules of Regulation(EU) No. 1215/2012 instead of theirnational rules.The European Council did not agree withthis suggestion. As a result, the amendedreform proposal, as well as the final versionof Regulation (EU) No. 1215/2012, containa similar wording to the current provisionsof the Brussels I Regulation. In theRetail & Food SafetyBarry E. Parsons, FMPRestaurant, Retail Store, and Food Safetybparsons@robsonforensic.comfuture, a defendant domiciled in a memberstate may be sued in another member stateonly based on the rules set out in Regulation(EU) No. 1215/2012. As for a defendantnot domiciled in a member state, the internationalrules of jurisdiction contained inthe domestic law of each member state willapply in most cases as a matter of principle.The Brussels I Regulation already providesseveral exceptions to this principle,which relate to rules establishing theexclusive jurisdiction of specific courts orrules regarding prorogation of jurisdiction.These are applicable even if a defendant isnot located in a member state. Regulation(EU) No. 1215/2012 has maintained andeven broadened those exceptions.Under Regulation (EU) No. 1215/2012,the rule governing jurisdiction clauses incontracts will become applicable regardlessof the domicile of all parties, whereas,currently, Article 23 of the Brussels I Regulationrequires one of the parties, eitherthe defendant or the claimant, to be domiciledin a member state. In addition, Regulation(EU) No. 1215/2012 includes a newexception in favor of consumers. It willallow a consumer to sue a party with whichthe consumer has a contract in the memberstate where the consumer is domiciledeven if the contracting party is not a Europeandefendant. As a result, a U.S. manufacturercould be sued in France by anyEuropean consumer domiciled in France.Regulation (EU) No. 1215/2012 adopts asimilar approach for employment issues:employees will be entitled to sue their non-European employers in most cases in thecourts of the place where the employeesusually carry out their work.These amendments, which are ratherlimited compared with the initial reformproposal prepared by the European Commission,aim to fulfill one of the mainobjectives set by the European Commission.They reinforce protection for weakparties by ensuring that the protectiverules of jurisdiction available for consum-Barry has more than twenty years experience managing restaurants,supermarkets, and retail stores. He is an expert in store operations,training and management of workers; floor cleaning and safety; productdisplays; and maintenance inside and outside the store.Engineers, Architects, Scientists & Fire InvestigatorsBarry has years of experience as a chefand manager of food service operations.He is an expert in preventing injuries tofood workers and preventing foodcontamination during preparation,transport and storage.www.robsonforensic.com | 800.813.6736For The Defense ■ April 2013 ■ 55

Young LawyersThe area in whichtheBrussels I Regulation willendure the most changesrelates to the recognitionand enforcement ofjudgments from othermember states.ers and employees will apply in a greaternumber of cases, specifically against non-European defendants. Such modificationsare significant in comparison with theregime under the Brussels I Regulationbecause they imply that in cross-borderlitigation the courts having jurisdictionover proceedings brought by consumersor employees would no longer be determinedby applying the domestic law ofone member state but by Regulation (EU)No. 1215/2012. It is worth noting that thesame reasoning is not transposed to insurancematters. Under the Brussels I Regulation,a non- European insurer may alreadybe sued before a court of a member stateonly with respect to the operation in thatcountry of the insurer’s local branches orestablishments.Further, member states will be requiredto notify the European Commission oftheir national rules of jurisdiction thatcannot be applied to European defendants.One can anticipate that these notificationswill likely correspond to the grounds forjurisdiction already mentioned in AnnexI to the Brussels I Regulation. This Annextogether with all the other Annexes to theBrussels I Regulation have recently beenconsolidated following the receipt of newnotifications from member states. CommissionRegulation (EU) No. 156/2012(Feb. 22, 2012).The Brussels I Regulation is still perceivedas offering protection to Europeandefendants against the so-called exorbitantrules of jurisdiction that may be part of thenational law of member states. A typical56 ■ For The Defense ■ April 2013example of an exorbitant rule of jurisdictioncan be found in Articles 14 and 15 ofthe French Civil Code, which confers to theFrench courts jurisdiction over all claimsbrought by or against a French citizen orcompany. Under the current Brussels IRegulation and the recast regulation, Regulation(EU) No. 1215/2012, such nationalrules are available to persons domiciled ina member state whatever their nationalitiesonly against non- European defendants.Thus any person domiciled in France mayinvoke these rules against U.S. defendants.Adjustment to Several Rulesof Jurisdiction to ImproveCoordination of ProceedingsNotably, the main rules of jurisdiction providedby the Brussels I Regulation have notundergone any changes in Regulation (EU)No. 1215/2012. Thus, as a matter of principle,the courts of the member state wherea defendant is domiciled have jurisdiction.Special grounds for jurisdiction in contractualor tort matters remain untouched aswell, broadly in terms of, respectively, theplace of performance of the contract andthe place of the harmful event. In practice,constructing these provisions often createsdifficulties, and they regularly become thesubject of rulings of the Court of Justiceof the European Union. Protective rulesexist in favor of employees, insurance policyholders, and consumers, and Regulation(EU) No. 1215/2012 has extendedtheir scope.During the recasting process, Europeaninstitutions discussed introducing new rulesof jurisdiction. They would have been usefulif the European Commission’s suggestion toextend the scope of application of the BrusselsI Regulation to all defendants in all caseshad been followed. The European Commission’sinitial proposal for reform includedtwo additional rules of “subsidiary jurisdiction”designed to apply when no otherrule of the Brussels I Regulation would conferjurisdiction on the courts of one of themember states. The first rule would haveenabled a party to sue a non- European defendantat the place of the party’s assets inthe European Union. The second provisionestablished a forum necessitatis ground forjurisdiction to be used on an exceptional basis.In the end, these rules did not appear inthe recast regulation.With respect to choice of jurisdictionclauses in contracts, the European Councilvalidated the suggestion in the initialEuropean Commission reform proposal toaddress the substantive validity of a jurisdictionclause in a contract in the regulation.The recast regulation specifies that thesubstantive validity of a jurisdiction clausein a contract will be subject to the law ofthe member state of the chosen court, includingits rules of conflict of laws. The newregulation adds that a jurisdiction clausein a contract should be considered as a distinctand separate clause from the remainderof the contract in which it is includedand that its validity should not be questionedbased only on the invalidity of thecontract.In addition, the recast regulation, Regulation(EU) No. 1215/2012, assigns greatereffects to jurisdiction clauses in contractsto ensure their efficiency. At present, ifthe parties have designated by contracta particular court to resolve their dispute,the Brussels I Regulation lis pendensrules, which generally apply when thesame dispute is brought before two differentcourts, prevail over the contract jurisdictionclause. This means that the chosencourt may have to stay the proceedingsuntil the decision of the court first seisedaccepts or declines its own jurisdiction.To ensure a better enforcement of choiceof-courtagreements, Regulation (EU) No.1215/2012 will give the court initially designatedby the parties the priority to decideon its own jurisdiction. This will forceother courts in the European Union to staythe proceedings pending before them andto decline their jurisdiction once the chosencourt has established its jurisdiction.In its reform proposal, the EuropeanCommission originally sought to improvethe lis pendens rules by creating a sixmonthtime frame for the court first seisedto rule on its jurisdiction. However, thislimitation was removed from the amendedproposal and does not appear in the recastregulation, Regulation (EU) No. 1215/2012.However, a new rule based on the duty ofcooperation of national courts within theEuropean Union was added. It providesthat a national court, upon request, shouldindicate without delay the date when itwas seised to other national courts of othermember states.

Moreover, specific rules relating to coordinationin the event of concurrent proceedingspending in non- European countries setforth in the European Commission initialreform proposal were accepted and completedby the European Council. Under therecast regulation, a member state court, ifseised on certain jurisdiction grounds containedin the recast regulation, will be allowedto stay its proceedings if an actionrelating to the same cause of action andinvolving the same parties or a related actionis already pending in a non- Europeancountry. To stay proceedings requires twoconditions: (1) the judgment that the non-European country court will hand downwill be capable of recognition and enforcement,when necessary, in the member stateconcerned, and (2) a stay appears necessaryfor the proper administration of justice.However, if the proceedings in thenon- European country are discontinued,stayed, or unlikely to be concluded withina reasonable period of time, the memberstate court may reinstate and continue theproceedings in the member state. Once thenon- European court has given a decisionthat may be recognized and enforced inthe member state of the court seised, theproceedings pending in the member stateshould be dismissed. The recast regulationexplicitly mentions that the memberstate court would invoke this coordinationmechanism upon request of one of the parties,or if allowed by the national law of themember state, sua sponte.Toward the Limitation of Recognitionand Enforcement ProceedingsThe area in which the Brussels I Regulationwill endure the most changes relates to therecognition and enforcement of judgmentsfrom other member states. Based on theprinciple of mutual trust between memberstates, the new recast regulation, Regulation(EU) No. 1215/2012, completely abolishesexequatur procedures and establishesa system that will circulate judgments automaticallyin civil and commercial matters.Therefore, it did not follow the suggestionof the European Commission in its initialreform proposal to create specific safeguardsto protect defendants’ rights and tomaintain exequatur proceedings in a fewareas such as matters relating to defamationand collective redress mechanisms.Under the Brussels I Regulation, as amatter of principle, a court judgment givenin a member state is already recognizedin other member states without any specificprocedure. Yet, under the recast regulation,if enforceable in the member stateof origin, a judgment will also be enforceablein other member states without anydeclaration of enforceability. For example,it will be possible to apply for protectivemeasures based on the foreign judgmentwithout first undertaking another procedure.This system of circulation of judgmentswill be based on the issuance by thecourts of origin, at the request of one party,of certificates following a standard form.This certificate notably will mention if thejudgment is enforceable in the memberstate of origin, and, if so, the enforceabilityconditions, if any. The certificate will haveto be served on the person against whomenforcement is sought before enforcementmeasures can be initiated, and the personconcerned will be entitled to challenge theenforcement.In addition, the recast regulation haseliminated the recognition procedure.Rather, it only allows a procedure of refusalof recognition. Parties will not need toapply to a court for recognition since themember states will recognize judgmentsautomatically, and any interested partywill be allowed to seek a decision refusingthe recognition of the judgment. In thisrespect, the grounds allowing the courtsof the member states asked to refuse to recognizeor to enforce judgments are strictlylimited and along the same lines as thosecurrently in force. The grounds for refusingto recognize a judgment are (1) recognitionwould conflict with the public policy ofthe member state addressed; (2) the judgmentwas granted in default of appearanceand the defendant was not adequatelyinformed of the proceedings; (3) the judgmentwas incompatible with another decisiongranted in the member state addressedor with a previous decision of anothermember state or of a non- European countryinvolving the same cause of action andbetween the same parties, but this groundrequires the condition that the previousdecision would fulfill the requirement ofrecognition under the law of the memberstate addressed; or (4) the judgment did notcomply with the rules of exclusive jurisdictionor the protecting rules of jurisdictionapplicable in insurance, employment, andconsumer matters, provided that the weakparty was the defendant. Apart from whatis required to examine the last ground forrefusal, the courts of the member stateaddressed cannot examine whether thecourt of origin had jurisdiction even whenreviewing potential public policy conflictsmentioned in item “1” above.ConclusionThe European Commission reform proposalwas innovative, particularly withrespect to abolishing exequatur proceedings,the interface between the Brussels IRegulation and arbitration, and the generalextension of rules of jurisdiction ofthe regulation to non- European defendants.Yet, the final version of the recastBrussels I Regulation, Regulation (EU)No. 1215/2012, did not retain the two lattersuggestions. Indeed, the major accomplishmentof the recast is obviously thesystem of automatically circulating judgmentsacross Europe, which should facilitatejudgments enforcement even thoughsome wonder whether this will spark a risein fraud.The recast regulation, Regulation (EU)No. 1215/2012, will certainly have animpact on cross-border litigation betweenthe European Union and non- Europeancountries, such as the United States, eventhough it would have been far more significantif it had adopted the suggestion ofthe European Commission to extend thescope of all rules of jurisdiction to non-European defendants. The recast regulation,Regulation (EU) No. 1215/2012,includes more rules of jurisdiction concerningnon- European defendants inconsumer and employment matters. Inaddition, the recast regulation asks thenational courts of member states to takeinto consideration proceedings pending innon- European countries based on a specificcoordination mechanism. Finally, theabolishment of exequatur proceedings mayalso impact non- European defendants asjudgments granted against them in onemember state may easily circulate and beenforced in another member state wherethe defendants could have assets.For The Defense ■ April 2013 ■ 57

Young LawyersObservations ofPersuasionBy Richard J. MontesLessons fromPolitics for theAppellate Lawyer?When used correctlyand credibly, strategiesdrawn from the worldof politics can promotemore efficient advocacyand increase thechances of achievingsuccess in an appeal.58 ■ For The Defense ■ April 2013While it may seem strange to suggest, an appellate attorneyactually can learn a lot from the world of politics, andit is not all cautionary tales of misbehavior, although thisarticle will certainly contain its fair share of that. Politicscan provide a tangible way of observingvarious strategies used to persuade anaudience and the psychology behind thosestrategies. This article is not an endorsementof the tactics of politicians but areflection on how politicians constructtheir messages, what if anything it tellsus about how people receive and processinformation, and how as appellate lawyerswe can use that knowledge in crafting ourarguments.A Bailout vs. an EconomicRescue PlanOften the most effective tool of persuasionis framing the issue. Politicians know thatif they can create and control the “narrative,”they can help shape public opinion.This comes from the psychological conceptof framing. Stated simply, framing isa perspective. A writer or speaker can createthat perspective by setting the vocabularyand story elements through which anaudience can comprehend and discuss the■ Richard J. Montes is a partner in Mauro Lilling Naparty LLP, the largestboutique appellate practice in New York. He has litigated appeals in areasincluding medical and other professional malpractice, personal injury, construction,insurance coverage, toxic tort, and commercial litigation. Mr. Montesis a member of the DRI Appellate Advocacy Committee.issue. See James M. Druckman, On the Limitsof Framing Effects: Who Can Frame?, 63J. Pol. 1041, 1043 (2001).Researchers have learned that when peoplemake decisions, they unconsciously usecognitive shortcuts, or heuristics, to assessthe probabilities. See Amos Tversky & DanielKahneman, Judgment Under Uncertainty:Heuristics and Biases, 185 Sci. 1124(1974). Mostly these heuristics promotesound judgment, but they can also at timesproduce systematic errors in judgment. Assomeone might expect, the frame that adecision maker adopts is controlled partlyby the norms, habits, and personal characteristicsof the decision maker. It also, however,can be influenced by the formulationof the problem. See id. This is known as theframing effect.In one study, subjects were offered twodecisions. See Daniel Kahneman & AmosTversky, Choices, Values and Frames, 39Am. Psychol. 341, 344 (1984). In “decisionone” subjects were asked to choosebetween (1) a sure gain of $240 or (2) a 25percent chance to gain $1,000 and a 75 percentchance of gaining nothing. The vastmajority of subjects went with the suregain, choice one. In “decision two” subjectswere asked to choose between (1) a sure lossof $750 or (2) a 75 percent chance of los-

ing $1,000 and a 25 percent chance to losenothing. Even though the options in decisiontwo had the same expected value as indecision one, a 25 percent chance to gain$1,000 has the same expected value of $250as a 75 percent chance to lose $1,000, themajority of subjects in decision two wentwith choice two. Id. This study showed thatpeople tend to be risk averse with choicesinvolving gains and risk seeking in choicesinvolving losses. Thus, the mere way thatthe question was framed led subjects tomake different choices.Politicians are certainly aware of thesetendencies and use them in framing issues.In politics, framing can be as simple aswhether you refer to something as a “bailout”or an “economic rescue plan.” A bailoutemphasizes the companies that are infinancial difficulty. It invokes the notionof letting them off the hook for their mistakes.An economic rescue plan, however,is broader. It changes the focus fromthem to us: we all need this otherwise ourfinancial system will collapse. Thus, whilethese frames describe the same content, orunderlying policy, each suggests a perspectiveor lens through which a person shouldview their options and judge norms. Otherexamples of altering language to try toreframe the debate include the death taxv. the estate tax, drilling for oil v. exploringfor energy, and the Affordable Care Actindividual mandate v. personal responsibilityprovision.Each contrast highlights the importanceof the words that you choose. In thatregard, polling data has also shown the waythat a question is worded can change howpeople respond to the question. A starkexample came in 1993 just before the openingof the Holocaust Museum in Washington,D.C. The results of a poll conductedby the American Jewish Council showedthat 22 percent of Americans thought itwas possible that the Holocaust never happened.It turned out, however, that thequestion was flawed, and when the questionwas rephrased to mitigate the originalflaw, only 1 percent said that it was possiblethat the Holocaust never happened, and8 percent said that they were unsure. SeeGreg Raven, Major Holocaust Polls ShowBuilt-In Bias, Inst. Hist. Rev., http://www.ihr.org/jhr/v15/v15n1p25_Raven.html, (last accessedMar. 13, 2013).Another recent example of framinghappened during the 2012 presidentialcampaign. Was the 2012 election a referendumon President Obama or a choicebetween individuals and competing theoriesof government? Incumbents tend tolike the choice frame, particularly when jobapproval ratings are low or polls show thata majority believes that the country is notheading in the right direction. See Matt Bai,Choice, Referendum and Midterm Elections’Real Meaning, N.Y. Times, July 22, 2010, atA18 (New York ed.). Given the economicclimate, therefore, Democrats wanted tomake this election a choice between GovernorRomney, who they characterized asaloof and only caring about the wealthy, orPresident Obama, who they depicted as anadvocate and fighter for the poor and themiddle class. See Helene Cooper, In StrategyShift, Obama Team Attacks RomneyFrom The Left, N.Y. Times, April 21, 2012,at A13 (New York ed.). On the other hand,Republicans wanted to make the electiona referendum on President Obama andwhether his job performance merited a secondterm. They wanted to focus the conversationon the unemployment rate, thenational debt, and promises that PresidentObama did not keep.In the appellate arena, the way that youframe a case can be very powerful. If youcan prompt judges to view a case throughyour frame from the beginning, it shapeshow they will receive and analyze all subsequentinformation. Thus, framing shouldbegin with the preliminary statement. Ifpossible, rather than begin with a generalopening such as “This is an appeal from aJudgment dated January 20, 2012 againstthe defendant Dr. Jones,” begin to framethe issue right away. For example, “Thiscase raises the fundamental question ofwhether an anesthesiologist should havea legal duty to a patient after the treatingphysician has completed the surgical procedureand the patient has awoken from theanesthesia.” This sentence has three criticalaspects of a good frame: setting, characters,and conflict. See Kenneth D. Chestak, ThePlot Thickens: the Appellate Brief as Story,14 Legal Writing 127, 137–47 (2008). First,it provides the setting by emphasizing thetime frame—after the surgical procedure.Second, it presents the characters, the anesthesiologist,the treating physician, and thepatient, while placing the emphasis on theanesthesiologist. Third, it presents the conflict.By focusing on the anesthesiologistand the relevant time frame, it presentsthe conflict as whether it would be fair toimpose a duty after an anesthesiologist finishedhis or her primary job.This frame or theme should then be carriedthroughout the brief by the facts. AtPoliticians know thatif they can create andcontrol the “narrative,”they can help shapepublic opinion. This comesfrom the psychologicalconcept of framing.its most effective, you can win a case bythe time that a judge has read to the endof the statement of facts: “the statementof facts can, and should, in the very processof statement, frame the legal issue,and can and should, simultaneously producethe conviction that there is only onesound outcome.” See Karl N. Llewellyn, TheModern Approach to Counseling and Advocacy—Especiallyin Commercial Transactions,46 Colum. L. Rev. 167 (1946). As oneNew York Court of Appeals judge statedduring a lecture that I attended, wheneverhe picks up a brief, the first question that heasks himself is “Ok who got screwed?” If bythe end of the statement of facts you haveconvinced one judge that it was your client,you may be well on your way to persuadingthat judge to rule in your favor.Another critical way to frame an issueis with your question or issue presented.A good example comes from the constitutionalchallenge to sodomy statutes. In a17-year span the Supreme Court changeddirections from upholding a sodomy statuteto striking one down. There is no doubtthat cultural changes and the compositionof the Court played a role in the reversal.What is notable for the purposes of thisFor The Defense ■ April 2013 ■ 59

advantage or overcome them in the abovereferencedarticle “Using Research intoIntuitive Fallacies to Guide Advocacy.”Heuristics alone, however, cannot win acase for you. While judges are humans andare susceptible to these mental shortcuts,heuristics are only one part of the equation.Judges also bring with them theirown backgrounds, ideals, and experiences,which Tversky and Kahneman recognizedcan affect how a person responds to a particularframe. In the next sections we willdiscuss others factors that can play a role ineffective advocacy.Trying to Put Lipstick on a PigCan Build a Bridge to NowherePerhaps above all other tools and strategies,when picking your frame, makesure that it is credible. Do not lie, exaggerate,or misstate the facts or the law. Notonly can doing one of these things createa very embarrassing moment during anoral argument if a judge calls you out on it,but it undercuts your attempt to frame anissue and to persuade a court. It does so byundermining a court’s confidence in yourposition and level of expertise, and it distractsfrom the primary issues at hand.Former vice presidential candidate CongressmanPaul Ryan is widely regarded asan expert in fiscal and budgetary matters.During the recent presidential campaign,however, he allowed that expertise to becalled into question by trivial matters thathad nothing to do with his expertise. Forexample, during an interview with radiohost Hugh Hewitt, Congressman Ryansaid that he had completed a marathon injust less than three hours. See NBC PoliticsBlog, Paul Ryan Says He Misstated MarathonClaim, Sept. 1, 2012, http:// nbcpolitics.nbcnews.com/_news/2012/09/01/13611931-paul-ryan-says-he-misstated-marathon-claim?lite(last accessed Mar. 13, 2013). It turned out,however, that he had actually completedthe marathon in just over four hours. Whenconfronted with the discrepancy, he saidthat if he was rounding he should haverounded to four and not three. This ledsome to question that if Congressman Ryancould make the error of rounding an overfour hour marathon time to less than threehours, could he make similar errors whencalculating the debt or trying to balance thebudget? Granted, it seems small and petty,but in politics these things have a way ofsnowballing, and Democrats tried to spinit that way. This “revelation” on the heelsof Congressman Ryan’s convention speech,which Democrats already had panned asdishonest, gave them a further chance toadvance a theme that the Romney- Ryancampaign did not care about the facts.Exaggerating or misstating facts canalso become a distraction. It can allowyour adversary to pivot from the framethat you want to promote or to bog a courtdown in perhaps irrelevant or minor factualdisputes. A good example of this camein the 2008 presidential campaign. Whilethe conventional wisdom is that JohnMcCain’s bounce after the Republican Conventionin 2008 began to disappear whenLehman Brothers collapsed on September16, his numbers had started to declinesometime around September 10 and 11.See RCP Poll Average, General Election:McCain vs. Obama, Real Clear Politics,http://www. realclearpolitics.com/epolls/2008/president/us/general_election_mccain_vs_obama-225.html#polls (last accessed Mar. 13, 2013)(interactive chart). That may have been inpart due to a turn in press attention to severalnegative advertisements that McCainran, such as the claim that then SenatorObama supported sex education for kindergartnersand that he meant GovernorPalin when he commented that you cannotput lipstick on a pig. These advertisementstook attention away from themomentum generated by the conventionand prompted questions about the directionof the McCain campaign. By allowingthe narrative to change, it set the groundworkfor the momentum shift when thefinancial markets collapsed.For an appellate attorney, therefore, oneof your best assets is your credibility witha court. As Supreme Court Justice AntoninScalia and Bryan A. Garner conclude theirbook, Making the Case: The Art of PersuadingJudges:If you appear before the court in questionwith any frequency, the judges willremember you as fair-minded, reliable,and trustworthy—or the opposite. Ifthe former, they will be more likely togrant discretionary review in a case thatyou assert to be worth considering; andwhen you appear to argue, the credibilityyou have developed will give you aleg-up. If your argument has been uninformativeand misleading, you may wellbegin your next case at a disadvantage.So look upon this profession of advocacyas a long-term continuum, eachindividual case not standing in isolationbut profiting from and building uponyour prior success. Argue not just for theday but for reputation.The anchoring effectoccurs when a decisionmaker focuses on a pieceof information as a baselinefrom which to judge allsubsequent information.See Antonin Scalia & Bryan A. Garner,Making Your Case: The Art of PersuadingJudges, at 84–85 (2008).Avoid Personal AttacksCalling a political opponent a Communist,un- American, or even accusing him orher of wanting to kill grandma has unfortunatelybecome commonplace in modernpolitical life. In fact, the vast majorityof advertisements during the 2012 campaigncycle were negative ads that triedto make the opponent appear untrustworthyor dangerous to a certain value system.See Donovan Slack, RIP Positive Adsin 2012, Politico (Nov. 4, 2012), http://www.politico.com/news/stories/1112/83262.html (lastaccessed Mar. 13, 2013). While those typesof personal attacks may have some effectin politics, they have no place in legal writing.Courts often frown on personal attacksin briefs, and ultimately they do little toadvance an appellate argument. They canalso distract from your main argumentsand cause a court to look less favorablyon you: “An attack on opposing counselundercuts the persuasive force of any legalargument. The practice is uncalled for,unpleasant, and ineffective.” Antonin Scalia& Bryan A. Garner, supra, at 35 (quotingMorey L. Sear, Briefing in the UnitedFor The Defense ■ April 2013 ■ 61

Young LawyersStates District Court for the Eastern Districtof Louisiana, 70 Tul. L. Rev. 207, 224 (1995).You should make a distinction, however,between a personal attack and pointingout that a record or the case law doesnot support statements made by an opposingcounsel. Thus, when an opposing counselhas made an incorrect factual assertion,stating it in that manner is preferred toWith some people andsome issues, regardless ofthe frame that you create,you may encounter anideological divide that yousimply cannot bridge.referring to the opposing counsel as a liaror dishonest. As others have explained,“A straightforward recital of the facts willarouse whatever animosity the appellatecourt is capable of entertaining, withoutdetracting from the appearance of calmand equanimity that you want to project.”Antonin Scalia & Bryan A. Garner,supra, at 35. In fact, if you can show thatthe opposing counsel has not accuratelyconveyed the facts or legal precedent, itcan add to your credibility and increasethe chances that the court will adopt yourframe of the case.The Empty Chair and Empty SuitPerhaps one of the most memorablemoments of the 2012 campaign was ClintEastwood’s conversation with an emptychair on the last night of the RepublicanNational Convention. According to reports,Governor Romney’s staff did not knowwhat Eastwood would do or say, but theyhoped that he would give a speech similarto those he had made to donors in thepast. See Gregory J. Krieg & Emily Friedman,Clint Eastwood Chair Stunt UpstagesMitt Romney, ABC News, Otus News (Aug.31, 2012), http://abcnews.go.com/Politics/OTUS/clint-eastwoods-man-show-upstages-mittromney/story?id=17129724#.UVB2NVeReDc(last62 ■ For The Defense ■ April 2013accessed Mar. 13, 2013). History, however,did not turn out as they hoped and Eastwoodwent viral. In doing so, media coveragethe next day centered on Eastwood,and not on Governor Romney’s speech andmessage. See id.The lesson to be learned then is to beprepared. Any great campaign or argumentbegins with preparation. As many greatsport coaches have said, “The will to win isnot nearly so important as the will to prepareto win.” Preparation includes studyingthe record, reviewing all the cited cases,rechecking authorities, learning about yourbench, and mapping out your arguments.See Antonin Scalia & Bryan A. Garner,supra, at 142–44, 150–60. A large part ofpreparing also includes anticipating questions.In that regard, do not just thinkabout the flaws in your adversary’s argument,but also concentrate on the weaknessesin your own. See id. at 150. Makea list of all the potential questions thatyou think a court can ask and hone yourresponses. See id. If possible, have anotherattorney in your office who has not workedon the case read the briefs and the records,and prepare a list of questions the courtcould ask. The purpose of this exercise isto simulate the “new reader” experience. Inmany intermediate appellate courts, a lawclerk who comes into a case cold often willread the briefs and the records first, and heor she may not have much experience withthe issues. The law clerk then prepares abench memo for the court that contains aproposed result. Having someone in youroffice serve as a “new reader” can give youinsight into how the law clerk might viewthe case and draft the bench memo. At thehighest appellate levels, mock argumentscan also be an effective preparation tool.Another key to a strong oral argument isconviction. The best speeches and presentationsare those from the heart. Convictioninfuses an argument with credibility andcan reach an audience’s emotions. Conviction,however, does not mean that you needto use flowery and lofty rhetoric or dazzlewith your oratory flare. It just means that alistener should know from your tone, style,and substance that you believe in what youare saying.It was this seeming lack of preparationand conviction that led so many tocriticize President Obama’s first debateperformance during the 2012 presidentialcampaign. During that debate, when hediscussed his accomplishments or guidingprinciples, they seemed to be more ofa laundry list than deep-seated beliefs. Healso did not raise many of the themes thathis campaign had promoted for months. AsMSNBC analyst Chris Matthews put it, “Idon’t know what he was doing out there. Hehad his head down. He was enduring thedebate rather than fighting it. Romney, onthe other hand, came in with a campaign.He had a plan. He was going to dominatethe time. He was going to be aggressive. Hewas going to push the moderator around,which he did effectively. He was going torelish the evening, enjoying it… Wherewas Obama tonight?” During the nexttwo debates, however, President Obama“appeared” different. I say “appeared”because the truth is that in general substancehis answers remained about thesame throughout the three debates. Hisstyle and delivery changed, which causedpeople to grade his performance differentlyfrom that of the first debate.Speak to the Swing VoterWith some people and some issues, regardlessof the frame that you create, you mayencounter an ideological divide that yousimply cannot bridge. Some people aredriven by a philosophy that is fundamentallyopposed to a different viewpoint. Youhave about as much of a chance of convincingEd Shultz of MSNBC that unionsshould be abolished as convincing FoxNews’ Sean Hannity that governmentshould be expanded.On certain issues this can also apply tosome judges. For example, if an abortionissue eventually comes before the RobertsCourt, we have a strong sense of wheremany of the justices will fall. If so, the keyis to speak to the swing voter. This canbe done by reviewing past decisions andlearning about the philosophy that driveshis or her decisions. If you can discern apattern, that will help you to frame an issuein the best possible light for that judge.For example, in the recent cases involvingthe constitutional challenge to theAffordable Care Act, or Obamacare, withall eyes on Justice Kennedy, the Obamaadministration also made appeals toAppellate, continued on page 72

Young LawyersLegal HerpetologyBy David C. MarshallLizards andSnakes in theCourtroomWhat every defenseattorney needs to knowabout the emergingplaintiff’s reptile strategy.In 2009, attorney Don Keenan and jury consultant DavidBall authored a book on trial strategy for the revolutionaryplaintiff’s lawyer, entitled Reptile: The 2009 Manual of thePlaintiff’s Revolution. Since then, the authors have pro-moted the book and the underlying trialstrategy to plaintiffs’ lawyers across thecountry through their website, trial blog,seminars, and workshops offered exclusivelyto plaintiffs’ lawyers. Additionally,the authors now offer more books andinformative DVD sets explaining howto incorporate the “reptile” strategy intowitness preparation, voir dire, openingstatements, and trials. Currently, the websiteclaims that the “reptile” strategy hasresulted in more than $4.4 billion in verdictsand settlements across the country.As time passes, more and more plaintiffs’attorneys have begun incorporatingthe “reptile” strategy in depositions andtrials. Personally, I have seen “the reptile”at work, and perhaps you have too,although you may not have realized it atthe time. I also recently attended a seminarin which Keenan spoke of “the reptile”and offered insight to plaintiffs’ lawyerson how to use it to defeat “the black hat”defense attorneys. This article will providea general overview of the “reptile” strategyas described by Keenan and Ball, discusssome scenarios under which opponentsmay use it in your cases, and possible waysto counteract this new wave strategy.What Is the Reptile?In the 1960s, neuroscientist Paul MacLeanformulated a model of the brain consistingof three parts: the reptilian complex, thepaleomammalian complex, and the neomammaliancomplex. MacLean proposedthat the three parts developed throughevolution, and he coined the phrase “triunebrain.” The reptilian complex, alsoknown as the R- complex or reptilian brain,includes the brain stem and the cerebellumand is the oldest part of the brain. Italso serves as the starting point for the“reptile” trial strategy. See David Ball &Don Keenan, Reptile: The 2009 Manual ofthe Plaintiff’s Revolution, 13–14 (BalloonPress, 2009).According to Keenan and Ball, the reptilianbrain controls our basic life functions,such as breathing, hunger, and64 ■ For The Defense ■ April 2013■ David C. Marshall practices in the Columbia, South Carolina, office of Turner Padget Graham & Laney PA. Mr. Marshall’s practicefocuses primarily on product liability and other complex litigation involving automotive, motorcycle and truck products, heavyequipment and machinery, drugs and medical devices, construction defects, and commercial trucking and transportation. He isscared of snakes and most other reptiles.

survival, and instinctively overpowers thecognitive and emotional parts of the brainwhen those life functions become threatened.Id. at 17. It thrives on evolution andtherefore maximizes “survival advantages”and minimizes “survival dangers.” Id. Onestated goal of the “reptile” trial strategy isto frame each case in a way to shift eachjuror’s brain into survival mode when heor she decides a case. Id. Thus, the “majoraxiom” repeated throughout Reptile is“When the Reptile sees a survival danger,even a small one, she protects her genes byimpelling the juror to protect himself andthe community.” Id. at 17, 19, 73.Keenan and Ball argue that “the reptile”has been a defense attorney’s tool for years,referring to the alleged chilling effect oftort reform on juries in recent times, froma plaintiff’s perspective. Specifically, theyposit that our society’s increase in litigationmakes jurors instinctively believe thattheir own survival is threatened—beliefsthat lawsuits undermine the quality andavailability of health care, make productsmore expensive but less safe, and negativelyaffect the economy. Ball & Keenan, supra,at 25. To overcome those obstacles, Keenanand Ball cite individual and communitysafety as the antidote, reasoning that jurorswill prefer a verdict that enhances safetydespite any tort reform bias they may have.Id. at 27–30. Thus, to employ the “reptile”strategy, a plaintiff’s attorney must show“the immediate danger of the kind of thingthe defendant did, and how fair compensationcan diminish that danger within thecommunity.” Id. at 30.To determine if a defendant’s actionsinvolved negligent conduct or communitydanger, Keenan and Ball outline threequestions in Reptile that a plaintiff’s attorneyshould answer for a jury:• How likely was it that the act or omissionwould hurt someone?• How much harm could it have caused?• How much harm could it cause inother kinds of situations?Ball & Keenan, supra, at 31–34, 38. The“reptile” strategy proponents believe theanswers to these three questions give a jurythe necessary information to determine ifa defendant acted negligently because theyshow that “the tentacles of danger” extendbeyond the single plaintiff and throughoutthe entire community. Id. at 35. The authorsargue that the valid measure of damages isnot the amount of harm actually caused ina case, but instead the maximum harm thata defendant’s conduct could have caused.Id. at 33, 225, 232.After establishing the danger to thecommunity, the next step of the “reptile”strategy is to demonstrate to a jury that ithas the power to improve everyone’s safetyby rendering a verdict that will reduce oreliminate the dangerous conduct. Id. at38–39. Reducing danger in the communityfacilitates survival, which awakens thereptilian part of the brain in each juror andovercomes logic or emotion. Id. at 45. Theoretically,implementing this strategy givesjurors a compelling reason to rule in favorof a plaintiff over the defendant despitewhat their logic might tell them.How Is the Reptile StrategyUsed in Litigation?Drawing from Patrick Malone and RickFriedman’s book, Rules of the Road, Keenanand Ball create the following formula foremploying the “reptile” strategy:Safety Rule + Danger = ReptileBall & Keenan, supra, at 51. In addition todemonstrating the danger to the community,the “reptile” strategy also requiresthe use of “safety rules” and urges plaintiffs’lawyers to frame cases so it appearsthat every defendant chose to violate asafety rule. Id. at 51–53. Indeed, the bookstresses that “[e]very wrongful defendantact derives from a choice to violate a safetyrule.” Id. at 54. Keenan and Ball outline sixcharacteristics that each safety rule musthave to promote the “reptile” strategy:• It must prevent danger.• It must protect people in a wide varietyof situations, not just someone inthe plaintiff’s position.• It must be in clear English.• It must explicitly state what a personmust or must not do.• It must be practical and easy for someonein the defendant’s position to havefollowed.• It must be one that the defendant willeither agree with or reveal him or herselfas stupid, careless, or dishonestfor disagreeing with.Id. at 52–53.Keenan and Ball state that implementingthe “reptile” strategy begins in discoveryby seeking admissions from a defendanteither in written discovery or depositions.Ball & Keenan, supra, at 54–55. The admissionsestablish first that a defendant agreeswith the safety rule and second that it controlsthe verdict because a violation endangerseveryone. Id. Again, the ultimate goalduring a trial involving the “reptile” is to(1) have the jury go beyond the level ofOne stated goal of the“reptile” trial strategy is toframe each case in a wayto shift each juror’s braininto survival mode whenhe or she decides a case.harm or damages caused in the case athand, (2) consider the maximum potentialharm the conduct could have causedwithin the community, and (3) believe thedefendant has endangered the communityby its conduct and unwillingness to acceptresponsibility. Id.To spread the “tentacles of danger” aswidely as possible, the authors believe thatevery case must have an “umbrella rule,”which is the widest general rule violated bythe defendant and one to which every jurorcan relate. Ball & Keenan, supra, at 55. Theclassic example provided by Keenan andBall is the rule that “a [ ] is notallowed to needlessly endanger the public.”Id. A plaintiff’s attorney can fill inthe blank with whatever best suits his orher case—a company, doctor, manufacturer,truck driver, or anyone applicable tothe specific type of case. After establishingthe umbrella rule, the next step for implementingthe “reptile” strategy is to createcase- specific rules directly applicable to theconduct attributed to a defendant. Id. at 58.For instance, a case- specific rule in atrucking case could be that a truck drivermust adhere to the federal motor carriersafety regulations, or he or she needlesslyendangers the motoring public. Fromthere, Keenan and Ball recommend havingFor The Defense ■ April 2013 ■ 65

and they are deserving of our time andattention.Before a trial, deposing a defendantoffers a plaintiff’s counsel a prime opportunityto obtain agreement by the defendantto the safety rules that will ultimately dominatethe plaintiff’s attorney’s trial strategy.Indeed, shortly after hearing the aboveopening statement, I sat through a Rule30(b)(6) deposition of a co- defendant cardealership in another case and witnesseda different plaintiff’s attorney use the “reptile”strategy:• Does [the defendant] agree that a cardealership, through its employees,must follow the manufacturer’s policiesand procedures when repairing avehicle under warranty?• Does [the defendant] agree with thestatement that if a dealership, throughits employees, fails to follow the carmanufacturer’s policies and procedureswhen repairing a vehicle, andthat failure to do so causes injuryto a customer, then the dealershipis responsible for harms and lossescaused?• Does [the defendant] also agree withthe statement that, as an authorizeddealership, it must follow the policiesand procedures set out in themanufacturer’s warranty and policymanual when a customer comesin with a vehicle under warranty andthe dealership undertakes to repairthe vehicle?• And does [the defendant] agree withthe statement that if it fails to followthose policies and procedures set outin the warranty and policy manual,and that failure contributes to thecause of a person’s injury, then thedealership should be responsible forthe harms and losses caused to thatindividual?• Does [the defendant] agree with thestatement that the dealership mustfollow the procedure set out in theworkshop manual for the vehiclewhen attempting to perform repairson a vehicle under warranty?• And [the defendant] agrees that if thedealership fails to follow the proceduresset out in the workshop manualfor the vehicle in attempting to repairit, and that failure causes harms orlosses to the customer, then the dealershipis responsible for the harmsand losses caused, correct?Upon hearing these questions, I immediatelyknew that I needed to prepare myclient, the automotive manufacturer, forsimilar questions, and sure enough, the followingquestions were asked of my client inits corporate deposition as well:• Does [the defendant] agree that carmanufacturers must make vehiclesthat are free from defects in materialsand workmanship?• So [the defendant] agrees that if a carmanufacturer makes a vehicle thathas a defect in materials or workmanship,and someone is injured becauseof that defect, then the car manufactureris responsible for the harms andlosses caused?• Does [the defendant] agree withthe statement that car manufacturersmust make their vehicles so theyoperate the way the manufacturerrepresents they will operate?• And if a vehicle does not operate theway in which it is represented it willoperate and a person is injured, thenthe car manufacturer is responsiblefor the harm caused to that person,isn’t it?Having the benefit of hearing the reptilianstyled questions to the co- defendantbefore my client’s deposition, I was able toprepare my witness for these types of questionsand have him review the earlier transcript.Ultimately, my witness answeredmany of the questions, “Not necessarily.That is why we have a legal system, to allowthe jury to consider all of the facts anddecide what caused the injury and who isresponsible.” Implicit in that answer is thefact that other proximate causes could accountfor the alleged injuries, such as theplaintiff’s comparative negligence, discoveryof defect and voluntary assumption ofrisk, improper use, misuse, or other interveningcauses such as modifications, alterations,or conduct of other third-parties.After all, jurors do not decide cases in a vacuum.Rather, a jury will consider all of theseother factors if they are present in the case.Another opportunity for a plaintiff’slawyer to appeal to “the reptile” is duringdepositions of the retained defense experts.Indeed, another plaintiff’s lawyer pursuedthe following questions with multiple doctorsin a recent medical malpractice case:• A doctor must not needlessly exposea patient to an unnecessary danger,true?• A doctor should never expose a patientto such unnecessary danger, true?• It would not be reasonable for anyphysician to expose a patient tounnecessary harm, true?• That would be completely unreasonable,true?• It would violate the Hippocratic Oath,true?• It would violate standards of care,true?• You learned a long time ago that doctorsshould not needlessly endanger apatient, true?• It’s an important rule, true?• It should be followed by all doctors,true?• And it is a safety rule to protectpatients’ interests, true?• It protected you when you were apatient, true?• You, as a doctor, must follow this rule,true?• You expect other doctors to followthat rule, true?• The rule, when enforced, ensures publicsafety, true?• The rule, when enforced, preventsharm to the public, true?• Violation of safety rules by physicianscan hurt anybody, true?• They can be hurt seriously, true?• They can even be killed or braindamaged,true?• If a safety rule is broken and a patientis harmed thereby, do you believe therule breaker should be held responsiblefor the harm that was caused?• Can you give me even a single exampleof a situation where a physicianviolates a safety rule, thereby causingharm to the patient, where youbelieve the physician should not beheld responsible for the harm?• Safety rules should be enforced, true?• If safety rules are not enforced, thoserules lose their value as a rule, true?• If a doctor has more than one courseof action to choose between, the doctorshould choose the one that is safestfor the patient, true?For The Defense ■ April 2013 ■ 67

Young Lawyers• A doctor must not choose a dangerouscourse of conduct if a safer choiceexists, true?• If 50 percent of the doctors in a giventown needlessly endanger the patientthat they are caring for, does thatmake it reasonable and prudent forother doctors in that community toneedlessly endanger their patients?You should prepareyour client and expertsto handle these types ofquestions designed tocreate testimony that willappeal to the reptilianbrain, perhaps by invokinga risk- benefit analysis.You should prepare your client andexperts to handle these types of questionsdesigned to create testimony thatwill appeal to the reptilian brain, perhapsby invoking a risk- benefit analysis. Afterall, that analysis is the core of all medicaldecision making: will the potential benefitto my patient from this treatment, drug,or procedure outweigh the potential harm?For this analysis, “absolute safety” is notthe criterion; rather, it is “standard of care.”Have your experts explain this to debunkthe plaintiff’s attorney’s theory that anythingother than the absolute safest decisionconstitutes negligence. If the opposingattorney refers to the Hippocratic Oath,have your experts explain that “First do noharm” is an incomplete, and perhaps inaccurate,perversion of the oath. When surgeonsmake incisions, they do harm. Whendoctors prescribe medication, the medicationcan have potential harmful sideeffects. But doctors make those decisionsfor the greater good of the patient becausethey believe the benefits outweigh the risks.That conduct is always judged by a reasonablenessstandard.68 ■ For The Defense ■ April 2013Of course, attorneys can easily implementthe “reptile” strategy in the simplestof automobile wreck cases as well. Similarto medical malpractice, Reptile devotes anentire chapter to “small cases,” and much ofit focuses on the maximum potential harmthat a defendant could have caused. Ball &Keenan, supra, at 225–32. I’ve seen the followingline of questioning in a depositionof a defendant driver in a routine automobilenegligence case:• You made a conscious decision to makethe left turn when you did, correct?• You’ve been driving for a long time,correct?• You understand there are certain rulesthat you must follow while driving?• What are some of the things you aresupposed to do in making a left turn?• One of the rules for driving is that youmust pay attention at all times, right?• Why are these things important?• Could people get hurt if these rulesaren’t followed?• Could people get killed?• And you’ve known that since you werelicensed to drive?Hopefully, these examples demonstratehow preparing your clients, witnesses, andexperts for these types of questions is criticalas Reptile provides skeleton outlines ofquestions, opening statements, and closingarguments that even the least skilled plaintiff’sattorney can adapt for almost any typeof case. Whatever your standard witnesspreparation repertoire may include, addthe “reptile” topic and prepare yourself andyour witnesses!You also may encounter the “reptile”strategy when you depose the plaintiff andthe plaintiff’s experts. According to Keenanand Ball, using the strategy to prepare witnessesfor depositions gives them confidencein answering difficult questions fromdefense lawyers, educates them on the ultimatetrial theme, and lays the foundationfor the plaintiff’s lawyer to implement thestrategy in the opening statements. Indeed,Reptile devotes an entire chapter to witnesspreparation. Ball & Keenan, supra, at 189–208. The authors even offer a 6-disc DVDset outlining the seven phases of “reptilewitness preparation.”Lastly, Keenan and Ball indicate in Reptilethat attorneys can use the strategy withinsurance adjusters, mediators, and evenjudges. Id. at 173–87. Likewise, they suggestusing the strategy during voir dire. Id.at 102–08, 119–27.How to Handle the ReptileEvery jurisdiction recognizes some versionof the golden rule, which disallows anyargument asking jurors to put themselvesin the shoes of a party. Such argumentsdestroy the impartiality of the jurors andencourage them to depart from neutralityand decide a case based on personal interestand bias rather than on the evidence.Additionally, the golden rule should disallowany argument that arouses the passionor prejudice of a jury.The “reptile” strategy appears to be aveiled golden rule argument because itseeks to have jurors decide a case not on theactual damages sustained by a plaintiff butrather on the potential harms and lossesthat could have occurred within the community,which includes each juror and hisor her family members. Indeed, the bookdirectly or indirectly invokes the underpinningsof the golden rule on multiple occasionsby appealing to the reptilian brain ofeach juror:When the Reptile sees a survival danger,even a small one, she protects her genesby impelling the juror to protect himselfand the community. Ball & Keenan,supra, at 17, 19, 73.It gives jurors personal reason to wantto see causation and dollar amount comeout justly, because a defense verdict willfurther imperil them. Only a verdict[for the plaintiff] can make them safer.Id. at 39.The juror’s decision rests on the Reptilianquestion of which verdict willmake her safer. Id. at 72.Just remember that the Reptile doesnot get involved unless she sees that thedanger is to her, and can be meliorated.Id. at 80.The Reptile ignores tragedy becauseshe can’t do anything about it. Instead,the trial… is an opportunity for jurorsto use the horror of [the plaintiff’s case]as a way to make their offspring safer.Id. at 86.So as with all things Reptilian, youshow that the safer decision for the community(and thus the individual juror)is a fair verdict for your client. Id. at 99.

Defense Ethics and ProfessionalismSpring CleaningTen Bad Practices Every LawyerShould Clean Out of the HouseBy Mike H. Bassett and Michael N. Bryant■■Mike H. Bassett (pictured) is the senior partner at The Bassett Firm. Mr. Bassett’spractice focuses on insurance defense, transportation litigation, and productliability, premises liability, and employment litigation. He is a member of theDRI Lawyers’ Professionalism and Ethics Committee. Mr. Bassett was voted aTexas Super Lawyer in 2006. Michael N. Bryant is a law clerk at The BassettFirm. Mr. Bryant received a B.S. in Computer Engineering from Texas A&M Universityand is currently in his second year at Southern Methodist University DedmanSchool of Law in Dallas, Texas. Ethics, continued on pageare often scheduled so that trials happen over a year7570 ■ For The Defense ■ April 2013Surely you have never committed any of the bad practicesbelow, but you may have a “friend” who has. Purgingthese behaviors from your practice will maintainthe integrity of the profession and improve your reputation.Here are 10 bad practices that you should throwin the trash.Expressing a heated temper with a sharp tongue.Have you ever had an excessively aggressive opposingcounsel who got under your skin? Did you respondin kind, or did you take the high road? Litigation isan adversarial process. Naturally relationships amongopponents can become, well, adversarial. In these tryingmoments, it is important to remember that lettingyour temper dictate your actions will only lead to moredifficulties. Fighting among counsel only increases thecost of litigation without changing its outcome, and it israrely, if ever, in your client’s interest.Over-promising and under- delivering. You maymake a client or a boss swoon by promising them theworld, but that romance will be short lived if you cannotdeliver in the end. Sometimes a client’s case projectionneeds a reality check, or a boss needs telling thata deadline is impossible. Being honest about a situationup front may disappoint someone initially, but inthe long run, you will develop a reputation of reliabilityand avoid facing the music when you cannot deliveron your promise.Sending sensitive information through e-mail.Without a doubt e-mail, more than any other recentinvention, has radically changed the way that we practicelaw. The ease of clicking “send” makes e-mail anintegral part of business, but e-mail poses security risks.Many firms combat these risks by encrypting outgoingmessages. But no system is foolproof. Just ask GeneralPetraeus. Additionally, cyber- attacks against law firmsare on the rise as hackers realize that they offer anotherway to gain access to a business’ confidential information.When deciding whether to send a client’s sensitiveinformation such as medical or financial recordsthrough e-mail, consider whether using a courier oreven a fax machine could decrease the risk of exposure.Letting your ego cloud your judgment. Alwaysplace your client’s interests and goals ahead of your own.Taking a case to trial and achieving a big win may elevateyour firm’s reputation, but your client may be servedbetter by settling discreetly out of court.Submitting questionable billing. Lawyers havedeveloped a reputation of nickel- and- diming their clientsby billing for unnecessary tasks or rounding up tothe nearest hour. This is obviously a stereotype that wewant to dispel. As attorneys, we are required to be ethicaland honest with our billing practices and shoulddo so to uphold the integrity of the profession. Shouldyou need even more motivation, honesty in billing canstrengthen your relationship with current clients andgrow your business. Every defense attorney dreams of aclient that will pay bills on time without disputing everyline on the invoices. Developing trust and a reputation ofhonesty will transform the clients that you have into thedream clients that you want. So consider not charging aclient for every little e-mail or phone call, and be sure torecord your time accurately and honestly.Taking cases when you have a conflict of interest.Despite this cardinal rule, some attorneys let thethought of more money cloud their judgment when takinga case. The most obvious conflicts occur when anattorney represents both sides of a dispute. This situationarises most often in transactional work. Sometimes,however, a conflict is not so apparent. For example, a personalinjury defense firm may find it profitable to be onthe other side of the “vs.” for a few cases and to representplaintiffs. Although this may not involve a conflict at thetime, in the future, insurance firms may be less likely tohire that firm because it took cases against them. Considerhow representing each client may affect your overallbusiness strategy.Procrastinating. With today’s crowded dockets, cases

Food Labeling, from page 30tered in July 2012 in the class action Gloverv. Ferrero USA, Inc. See, e.g., No. 12-3456(3d Cir.). The plaintiffs in the underlyingcase alleged that Ferrero’s Nutella productwas falsely advertised under the New JerseyConsumer Fraud Act as a nutritious,wholesome food, despite having a claimedhigh saturated fat and sugar content.Notice of appeal papers have also beenfiled in the Second Circuit on behalf of aclass member after a settlement order wasentered in August 2012 in the class actionFishbein v. All Market Inc., No. 12-3892 (2dCir.). In the underlying action, the plaintiffsalleged that All Market, Inc.’s VitaCocococonut water did not contain the amountof electrolytes (sodium, magnesium, potassium)stated on the label, and that it allegedlydid not hydrate more effectively thanless expensive sports drinks despite beinglabeled “super hydrating.”While the threat of class certificationcan incentivize some defendants to participatein settlement negotiations, emergingtrends in the success of various defensesdiscussed above may equip defendantswith various options to oppose claims.Differences in states’ laws may be used todefeat nationwide class certification. Additionally,certain claims may be amenableto early dismissal. As the body of case lawgrows, precedent involving these tacticsmay strengthen defensive opportunities,and we may then see the rate of settlementbegin to decline.Electronic Info, from page 47Third, the proposed rule provides a varietyof considerations that a court shouldweigh in calibrating its response to a loss ofinformation. Specifically, the rule providesfive factors that courts should use to determinewhether a party failed to preservediscoverable information that reasonablyshould have been preserved or whether thefailure was willful or in bad faith. Thesefactors give practitioners some guidanceabout how courts will perceive their actionsand give courts direction about appropriatecircumstances for sanctions. Finally,the proposed rule gives courts rule-basedauthority to impose sanctions, eliminatingthe need for courts to resort to their inherentauthority as so many have in the past.As electronic discovery continues toincrease, specific standards relating to preservingdiscoverable information, particularlyelectronically stored information,will continue to be critically important toboth plaintiffs and defendants. The proposedrule will go a long way to providesome certainty to courts and to litigants,and it should incentivize parties to makereasonable decisions about preservationissues and to avoid the urge to preserveexcessively, which increases the cost of discovery.The proposed rule should also conservethe resources of both the courts andthe litigating parties by reducing the motivationto spend time arguing about preservationand spoliation issues. Ultimately theproposal by the Advisory Committee Rulesof Civil Procedure is still just that—a proposal.It may change, and if and when Congressagrees to adopt a version, the courtswill interpret it. For now, the proposed rulerepresents a step toward clarity and consistencyfor litigants and should further assistcourts in managing the complicated issuesthat arise from the ever- expanding digitalage.Appellate, from page 62Justices Scalia, and Roberts. See JenniferHaberkorn, Obama Makes a Play forScalia, Politico (Feb. 28, 2012), http://www.politico.com/news/stories/0212/73412.html (lastaccessed Mar. 13, 2013). The administrationquoted frequently from Judge JeffreySutton’s opinion upholding the individualmandate as a valid exercise of the CommerceClause. See id. Judge Sutton is a former lawclerk to Justice Scalia and one who JusticeScalia has said that he holds in regard. Seeid. As to Justice Roberts, the administrationfocused on his decision in United States v.Comstock, 130 S. Ct. 1949 (2010). While theCommerce Clause arguments ultimately didnot succeed, they reflect one particular approachto trying to appeal to Justice Roberts.As history will now show, however, itwas an issue that drew substantial less attention,the tax issue, which ultimately swayedJustice Roberts.Even when cases may not involve issuesabout which the judges may have predispositions,learning the traits of a bench can72 ■ For The Defense ■ April 2013have benefits. For example, understandingif a judge tends to react from the gut,relies on personal experience, or emphasizespolicy, can help you understand thenature of the judge’s questions and howto respond best to his or her concerns. AsJustice Scalia has stated, “you should scopeout the judges involved in your case beforeyou write your brief or before you standup.” This is because understanding thethemes and the factors that drive a judgecan help you understand the nature of hisor her questions and how to frame an issueto coincide better with the judge’s philosophyor approach.ConclusionImportantly, none of the strategies discussedin this article alone can win yourcase because as much as we have becomebetter at understanding certain tendencies,humans are inherently unpredictable.How many people predicted after theoral argument on the Affordable Care Actthat the Supreme Court would uphold it,let alone on the basis of Congress’ taxingpower? Indeed, while research suggeststhat strategic framing can produce unconsciouserrors in judgment, the goal is notto manipulate a court into making a decisionas some politicians attempt to do. Nor,in my opinion, is that really probable at theappellate level. As Tversky and Kahnemanhave stated, formulating a question is onlypart of the equation. The other part is anindividual’s conscience acquired throughyears of personal experiences, education,training, and moral development. Thosefactors, in a sense, become the anchor bywhich your proposed frame is judged. Itis speaking to those factors in a way thatis consistent with a judge’s general outlookthat can give you a better chance ofwinning.For more effective advocacy, therefore,practitioners should use these strategies incombination. When someone uses themcorrectly and credibly, they can increasethe chances of achieving success in anappeal.

Miranda, from page 42cal reasons. Although the privilege mightprotect the advice, once you begin renderinglegal advice to an employee, a court ora state bar may find that you representedthat employee, and you may have alreadybreached your ethical duty of loyalty.Beyond Corporate Miranda andthe Internal InvestigationWe have already seen how courts haveapplied the attorney- client privilege to corporateemployee interviews in the contextof internal investigations in confusingand unclear ways in Upjohn and the othercases discussed above. Practitioners canface profound ethical dilemmas when theyattempt to determine representation inthese matters and give corporate Mirandawarnings. Tread cautiously.We face these issues in situations thatoccur much more commonly than highlevelinternal investigations, though. Forinstance, we face them when we representcorporate entities in civil actions involvinggarden variety tort claims such as slip andfalls, dram shop actions, and other claimsarising from negligence. Because a corporateentity can only act through its agentsand employees, the alleged wrongdoing,and the defense lawyer’s factual investigationof that wrongdoing, has to involve theagents and the employees.Should an attorney give an employeea corporate Miranda warning in a dramshop case involving allegations that someemployees served a patron too much alcohol?Presumably, the employees could allbecome civil defendants, subject to criminalpenalties depending on the applicablestate law. Can Upjohn protect interviewsconducted with these employees duringa standard factual investigation either inanticipation of litigation or during thediscovery phase of a lawsuit? The generalUpjohn premise seems to apply. An attorneyrepresents a business and interviewsemployees of that business to obtain information.Although technically the attorneymay not mount an internal investigation,the attorney interviews the employeesfor the purpose of obtaining informationrelated to a lawsuit. Many attorneys askemployees to tell them “the good, the bad,and the ugly” in an effort to obtain all of therelevant information. This situation seemsripe for inadvertent representation. If anemployee assumes that the attorney representshim or her, or that he or she controlsthe attorney- client privilege, she may sharepotentially incriminating information thathe or she would not otherwise share.It appears that any attorney who interviewsemployees of their clients ought toissue corporate Miranda warnings in someform before conducting fact- finding interviewseven if the interviews are not partof an internal investigation. However, ifan attorney gives an employee a corporateMiranda warning, the attorney runsthe risk that the employee will not sharesignificant information related to a lawsuitfor fear of personal liability. To avoidthis risk, attorneys should achieve a balancebetween informing employees thatan attorney- client relationship does notexist and obtaining the necessary factsto defend a lawsuit properly. In the typicaltort lawsuit, for example, an attorneyshould explain to the employee that theemployer will ultimately be responsible forthe employee’s negligent acts committed inthe scope of his or her employment but theemployee will be held responsible for intentionalacts and any acts committed outsidethe scope of employment. That way, hopefully,the employee will be forthcomingabout negligent acts that he or she carriedout in the scope of his or her employment,which is likely the subject matter ofthe lawsuit. Similar to internal corporateinvestigations, it appears that courts willevaluate a corporate Miranda warning inanother context on a case-by-case basis.ConclusionWhile you may not see an attorney administera corporate Miranda warning in the nextHollywood film, it will continue to be importantto defense attorneys. Whether you representa corporation, a partnership, or anyother organization, it is imperative that youconsider the implications of Upjohn and itsprogeny before conducting an internal investigationor a fact- finding interview.MSP Protocols, from page 18The first case, Guidry, provides readerswith a peek behind the curtain regardinghow to consider and protect Medicare’sfuture interest. Guidry, et al. v. ChevronUSA, Inc., Civ. No. 6:10-cv-00868, 2011U.S. Dist. LEXIS 148942 (W.D. La. December28, 2011). There, the parties had agreedto fund an MSA as part of settling a claim.However, they weren’t sure how muchshould be allocated. The parties hired anMSA vendor who set the MSA allocation at$77,204.16. The parties submitted the settlementagreement to the Court along withthe MSA allocation. The Court held that theparties had reasonably considered and protectedMedicare’s future interest. Specifically,the Court advised that as long as theparties relied upon “sound methodology”in analyzing the MSA issue, then the partiesreasonably considered and protectedMedicare’s future interest.The second case, Early, involved injuriesa cruise ship passenger allegedly suffered.Early v. Carnival Corporation, No.12-20478-CIV-Goodman (S.D. Fla. February7, 2013). At mediation, the partiesagreed that defendant would pay an undisclosedsum to the plaintiff, and the mediator’sfees, with the parties to each paytheir own attorneys’ fees and costs. Notably,the parties could not agree on whethera MSA was needed, and asked the Court todetermine that issue. The Court ruled that,under the governing law, settlements mustbe “mutually agreeable on every essentialterm,” and that the parties had failedto reach an agreement on the essentialterm of whether an MSA was needed. TheCourt declined to make that determinationand ruled that because the MSA issue wasundecided, the parties had failed to reacha settlement.In its ruling the Court distinguishedthis case from others where the partieshad asked the Court to enforce a settlementagreement. Here, the parties askedthe Court to assist with a critical term of apotential settlement agreement. The Courtnoted that it could not draft an essentialterm of the agreement, nor issue an advisoryopinion on the matter.The third case, Sterrett, involves aCourt’s recognition that, although the partieshad reasonably considered Medicare’sfuture interest, an MSA was not required.Sterrett v. Klebart, 2013 Conn.Super. LEXISFor The Defense ■ April 2013 ■ 73

245 (filed February 5, 2013). The partiesasked the Court to determine whether, inreaching the decision on the MSA issue,they had reasonably considered Medicare’sinterests. The Court determined that theparties had adequately considered Medicare’sinterests, even though an MSA wasnot needed, because the parties had properlyevaluated the terms of the settlement,by recognizing that the settlement awarddid not address future medical expenses.Instead, the Court held that the settlementproceeds represented Plaintiff’s noneconomicdamages as well as some “modestallocation for future medical expenses arisingout of the possible need for home healthaides” though such costs are not typicallycovered by Medicare.Read together, Guidry, Early and Sterrettdemonstrate how parties can reasonablyconsider and protect Medicare’s futureinterest in today’s environment. Defendantsand insurance carriers have an interestto ensure that files stay closed, becauseCMS will not pursue them for any additionalfunds post- settlement. Plaintiffs’counsel share this concern (with the additionalconcern of protecting the plaintiff’sMedicare card going forward). Earlyadvises that the burden is on the parties,not the Court, to address the future medicalsissue. Guidry provides the reasoningthat, so if you use sound methodology toreach your conclusion, then you have reasonablyconsidered and protected Medicare’sfuture interest. Sterrett stands forthe conclusion that an MSA is not needed ifthere are no damages paid for future medicaltreatment. Instead of automaticallyfunding an MSA, a defendant or insurancecarrier can be MSP compliant for a muchlower cost.Understand this is a short term approach.Once CMS issues final rules and regulations,the process changes. Until then, thisauthor and his colleagues believe the bestapproach is to address the issue proactively,documenting your file with the conclusionof whether a set aside is needed alongwith the records obtained and reviewed toreach that conclusion. The formal analysisshould involve an upfront screening to verifya claimant’s Medicare eligibility and/orenrollment status. As parties identify thepotential damages award, they can thendetermine if proceeds for future medicalsexist within the gross award, either in theform of a specific carve out or within theundifferentiated lump sum.In order to assist with this future medicalsanalysis, you may choose to utilizetechnology based solutions, such as theMSA Decision Engine, which providecompliant solutions for minimum coststo the file. See, for example, http://www.garretsongroup.com/services/medicare-set-asides(last visited Mar. 19, 2013). Tools like thisallow a user, after answering certain questions,to obtain immediate feedback onthe need for an MSA in a particular case aswell as what the maximum possible MSAamount could be based on a particular factpattern.Currently, the lowest cost of complianceon the future medicals issue means utilizingsound methodology with cost containmentprotocols. When CMS issues finalregulations placing this obligation on theplaintiffs’ bar, defense attorneys can focustheir MSP attention on their clients’ areasof exposure: conditional payment reimbursementand Section 111 reporting.The MSP concrete is hardening in 2013.Until now, identifying settling parties’ rolesand responsibilities under the MSP havelargely been a product of intense dialoguebetween the parties. 2013 appears to bethe year when CMS adds water to cementthese issues and roles into place. This concretewill add structure to the MSP process.GRG and the DRI Medicare SecondaryPayer Task Force will continue to monitorthese developments and provide updates.For more information, please see http://www. garretsongroup.com/ and http://www.dri.org/News/MSP.Reptile, from page 69a jury to “send a message to a defendant”or to “act as the conscience of the community.”These cases may offer additionalarguments for excluding “reptile” tactics.For instance, the Fifth Circuit has held thata “conscience of the community” argumentconstitutes “improper distraction from thejury’s sworn duty to reach a fair, honest andjust verdict according to the facts and evidencepresented at trial.” Westbrook v. GeneralTire & Rubber Co., 754 F.2d 1233, 1268(5th Cir. 1985). The court continued:Our condemnation of a “communityconscience” argument is not limited tothe use of those specific words; it extendsto all impassioned and prejudicialpleas intended to evoke a sense of communityloyalty, duty and expectation.Such appeals serve no proper purposeand carry the potential of substantial injusticewhen invoked against outsiders.74 ■ For The Defense ■ April 2013Id. at 1538–39. See also U.S. v. Johnson, 968F.2d 768 (8th Cir. 1992) (prohibiting undulyinflammatory and prejudicial “conscience ofthe community” arguments); U.S. v. Solivan,937 F.2d 1146 (6th Cir. 1991) (recognizing asimproper any “conscience of the community”argument that is designed to inflameor incite the jury, and reversing convictionbased on prosecutor’s closing argument urgingjurors to “send a message” because it appealedto the jurors’ emotions, passions andprejudices); U.S. v. Monaghan, 741 F.2d 1434(D.C. Cir. 1984) (“A prosecutor may not urgejurors to convict a criminal defendant in orderto protect community values, preservecivil order, or deter future lawbreaking.”);U.S. v. Barlin, 686 F.2d 81 (2d Cir. 1982) (condemningthis genre of comments and argumentsas designed to divert, rather thanfocus, the jury upon the evidence).Lastly, if you are unsuccessful in excludingthese trial tactics, you might considerusing your closing argument to counter the“reptile.” For instance, if your opponent hasused the “reptile” strategy during a trial, youcould compliment the plaintiff’s attorney inyour closing and praise his or her ability andzeal in representing his or her client. Thenyou can explain the appeal to the reptilianbrain, without ever mentioning the book,and inform the jury of the psychological“reptile” strategy that your opponent hasused. Exposing to a jury that a plaintiff’sattorney has based his or her strategy andtrial theme on a desire for the jury to decidethe case based on fear or matters not in evidence,as opposed to the facts of the caseand actual damages, will allow you to explainwhy the jurors should disregard sucharguments and decide the case based on thefacts presented and the applicable law thatthe judge will charge. If Keenan and Ball arecorrect that today’s jurors have “tort reformbias” or bias against plaintiffs’ lawyers, the

jury may appreciate this approach more thanwe will ever know. Indeed, this type of strategywas reportedly implemented by defenseattorneys in a case against Keenan himself,resulting in a defense verdict.These are just some of the many ways todeal with the “reptile” trial strategy. I amsure there are others. During the seminarthat I attended in which Keenan spoke tothe plaintiffs’ bar of my state, he indicatedthat he has collected more than 85 motionsfiled by “black hat defense attorneys” seekingto exclude the strategy. He also indicatedthat at least one court has specificallyexcluded the “reptile” strategy, causinghim some heartburn. However, Keenanremained steadfast in his faith about thepropriety and effectiveness of the “reptile”strategy, and he criticized the plaintiff’sattorney in that case for implementing thestrategy incorrectly after simply readingthe book and not attending any of the seminarsor workshops. Nevertheless, with thegrowing number of resources available toplaintiffs’ lawyers, one thing appears certain:the emerging “reptile” strategy is sureto remain at the forefront of the legal communityfor years to come.ConclusionThe plaintiffs’ bar is banding together toimplement new trial strategies to framecases in ways to obtain the best possibleverdicts and maximum damages awards.As a defense bar, we must keep up withtheir efforts and confront them head-on. Beready to recognize the “reptile” strategy inyour cases, and prepare yourself and yourwitnesses to deal with it.Ethics, from page 70after their filing dates. Do not be lulled bythis long waiting period. Deadlines comequicker than you expect so stay vigilantrather than procrastinate and find yourselfscrambling at the last minute. Plus, asa defense attorney, while procrastinating,you might miss valuable opportunities tosave your client money by settling early.Posting everything on social media.Every defense attorney can appreciate thejoy in finding that compromising photoof a plaintiff on Facebook or Twitter—the smoking gun to win your case. However,this situation is not nearly as joyouswhen that compromising photo is of you.Take a lesson from plaintiffs who sharetoo much and carefully guard your onlinepresence. Make sure that your privacy settingson public media sites are set so thatonly friends may view your profile and besure to maintain a professional image. Donot post photos or messages that may harmyou or your firm’s reputation.Demonizing your opponent. Believe it ornot, opposing attorneys are not always outto get you. Try giving them the benefit of thedoubt until they prove otherwise. A friendlyworking relationship can make litigation gosmoothly. Do not treat every request to delaya hearing or to extend discovery as an opponent’slatest attempt to trick you. Hopefully,he or she will return the favor.Showing up late and unorganized.Just don’t do it! Now that everyone hasa computer in their pocket, there is noexcuse to be late to a meeting or to forgetyour files. Keep your calendar up-to-dateand find secure ways to gain access to yourfiles from anywhere. If you will be late, callahead.Misuse Claims, from page 34against the manufacturer, holding that theplaintiff had failedto show either that Defendant had aduty to advise the surgeon and breachedthat duty or that Defendant voluntarilyundertook to advise [the implantingphysician] as to what size and types ofcomponents to use and that it breachedthat duty, much less that such negligencewas the cause of Plaintiff’s injuries.Id.ConclusionAs failure to train claims become more commonand as medical device manufacturerscontinue to develop more sophisticated anduseful products for which physician trainingprograms would be beneficial, the currentstate of the law leans away from imposingany heightened liability on manufacturersassociated with these training programs.As the Minnesota Supreme Court stated inGlorvigen, a manufacturer cannot take responsibilityto make sure that the end userof a product knows how to use the product,particularly when the manufacturer includeswritten instructions on product useto a purchaser and the manufacturer cannotcontrol how someone uses the product.Additionally, courts have consistently heldthat a manufacturer cannot be held liable ifthe manufacturer provided training but theproduct was not used properly anyway. Existingcase law is also favorable regardingproduct misuse, rejecting plaintiff’s argumentsthat manufacturers have heightenedduties to warn consumers directly whenthey know or should suspect that their productsmight be misused.SEMINARYoung LawyersJune 20–21, 2013The Cosmopolitan of Las VegasLas Vegas, NevadaHitting the Jackpot: Businessand Practice Developmentfor the Young LawyerVisit http://dri.org/Events/Seminarsor call 312.795.1101to register or formore information.For The Defense ■ April 2013 ■ 75

AdvocatesRonald L. Bair, Houston, TXCarl A. Beckstedt III,Christiansted, VIJulia L. Bergstrom,Aliso Viejo, CAJonathan L. Berryhill,Birmingham, ALJames H. Bolin,Ridgeland, MSStephen A. Bost,Los Angeles, CAJames G. Bynoe, Boston, MAShirley J. Christian,Salem, OHJohanna W. Clark,Orlando, FLJ. Michael Cogbill,Fort Smith, ARRussell F. Conn,Boston, MADeirdre A. Connolly,New York, NYPeter L. Contini,Garden City, NYJoseph C. DeBlasio,Red Bank, NJBrian J. Duva, Atlanta, GADominic J. Gianna,New Orleans, LAStuart J. Goldberg,Toledo, OHHeidi B. Goldstein,Cleveland, OHMatthew M. Haar,Harrisburg, PAMarie Trimble Holvick,San Francisco, CARussell S. Jones, Jr.,Kansas City, MOJerome M. Joseph,Denver, COAldean E. Kainz, Austin, TXJoseph A. Kaufman,Los Angeles, CAJames A. Keller,Philadelphia, PAKelly Marie Lippincott,Washington, DCThomas E. Liptak,Buffalo, NYEric P. Mathisen,Valparaiso, INCraig R. May, Denver, COShellie McGaughey,Bellevue, WAJames F. Murdica,New York, NYNiels P. Murphy,Jacksonville, FL76 ■ For The Defense ■ April 2013Advocates and New MembersEach month, DRI welcomes new members from the United States and Canada and abroad. Some of these newmembers have been recommended by current members actively involved in advancing goals shared by DRI. Anyindividual who recommends a new member is recognized as an “Advocate” for DRI.H. Michael O’Brien,White Plains, NYJ. Stephen O’Hara, Jr.,Jacksonville, FLDavid A. Oliver, Jr.,Houston, TXThomas A. Paruolo,Edmond, OKStephen C. Pasarow,Glendale, CAKathy Phillips, Franklin, TNSteve Puiszis, Chicago, ILJames F. Rogers,Columbia, SCWalter Brandon Rogers,Chicago, ILJoseph W. Ryan, Jr.,Columbus, OHFrederick N. Sager, Jr.,Atlanta, GAJonathan L. Schwartz,Chicago, ILMartha Lynn Shaff,Davenport, IARobert A. Shields,San Diego, CASandra Tvarian Stevens,Washington, DCMahsa Tajipour,San Antonio, TXW. Brent Threlkeld,Indianapolis, INTracey L. Turnbull,Cleveland, OHCharles H. Watkins,Miami, FLW. Scott Welch III,Jackson, MSGlenn Zakaib, Toronto, ONNew MembersAlabamaJonathan M. Hooks,BirminghamStewart McCloud,BirminghamGlen Moore, BirminghamTom Roper, BirminghamHerbert B. Sparks, Jr.,BirminghamNicolas Trey Canida,MontgomeryArizonaCarlyle W. Hall III, PhoenixBrandon Newton, PhoenixKeith R. Ricker, ScottsdaleArkansasJ.R. Carroll, FayettevilleRebecca Dawn Hattabaugh,Fort SmithCaliforniaJulia L. Bergstrom,Aliso ViejoDiane O. Palumbo, Aliso ViejoRobert D. Brugge, GlendalePeter LeRoy Haviland,Los AngelesSteven B. Kotulak,Los AngelesHeather L. Mills, Los AngelesRobert Kenneth Dixon,San DiegoCurtis K. Greer, San DiegoErich Joseph Lidl, San DiegoDavid B. Newdorf,San FranciscoNasstaran Tara Ruhparwar,San FranciscoAnne O’Meara Hanna,San JoseHoanh N. Robinson,Santa AnaDarci Teobaldi, ValenciaColoradoMaureen Reidy Witt,Greenwood VillageConnecticutMaria VanDerLaan, HartfordDistrict of ColumbiaRaymond G. Bender,WashingtonSuzanne E. Derr,WashingtonKerry Clinton O’Dell,WashingtonAndrew M. Williamson,WashingtonFloridaTravase L. Erickson,JacksonvilleJeffrey J. Humphries,JacksonvilleChristen Elizabeth Luikart,JacksonvilleJulie W. Allison, MiamiNicole M. Ellis, MiamiJoshua D. Moore, OrlandoGeorgiaRichard S. Bruno, AtlantaAndrew M. Capobianco,AtlantaFrederick L. Cooper IV,AtlantaIllinoisStacey Austin, ChicagoMary Ellen Callahan,ChicagoPaul W. Doerscheln, ChicagoE. Lynn Grayson, ChicagoRyan Ann Kelly, ChicagoJustin H. Lessner, ChicagoAlexander B. Mahler,ChicagoCarey J. Prill, ChicagoScott Douglas Spears,ChicagoAlia M. Horwick, EvanstonJudith Gaston, NorthbrookIndianaAudrey K. Hagedorn,IndianapolisBenjamin Stevenson,IndianapolisScott J. Fandre, MishawakaIowaAmanda Mestan Richards,DavenportKansasMeagan Patterson,Prairie VillageAlison St Clair, TopekaShelly Starr, TopekaKentuckyClaire Parsons, CovingtonMichelle L. Duncan,LouisvilleLouisianaMary G. Erlingson,Baton RougeChristina Raquel Valdes,Baton RougeMia Mitchell Grandpre,New OrleansMagali Puente Martin,New OrleansLee Rudin, New OrleansThomas L. Watson,New OrleansElizabeth Aycock, ShreveportKatherine Smith Baker,ShreveportMary Bicknell, ShreveportPatrick F. Cole, ShreveportMarcus E. Edwards,ShreveportTara Hoffmann, ShreveportMarylandAshleigh J.F. Lynn, BaltimoreCynthia E. Rodgers-Waire,BaltimoreHeather Leigh Williams,Ellicott CityEdward M. Shin, HagerstownMassachusettsStefanie Lempp, AndoverGregory Boucher, BostonJohn W. Dennehy, BostonErin K. Higgins, BostonHeather A. Lacey, BostonAlexa H. O’Keefe, BostonMichiganP. Adam Tountas,Grand RapidsElizabeth L. Amaru, TroyJerome Crawford, TroyMinnesotaJames C. Selmer,MinneapolisMississippiJason B. Purvis, GulfportBradley S. Clanton, JacksonEric Price, RidgelandMargaret Smith, RidgelandMissouriJ.A. Felton, Kansas CityKevin Kuhlman, Kansas CityJoshua Michael McCaig,Kansas CityMark A. Olthoff, Kansas CityHarley Ratliff, Kansas CityJeremiah Wikler,Kansas CityKathryn MorganHuelsebusch, Saint LouisMargaret Moore, Saint LouisNevadaStephanie J. Smith,Las VegasNew JerseyLisa DeMarzo-Rabke,Far HillsDebra Urbanowicz-Pandos,Far HillsJodi Sydell Rosenzweig,Florham ParkJean Patterson, NewarkRyan Richman, NewarkZane C. Riester, NewarkEdward Francis Roslak,NewarkGary R. Tulp, NewarkKelly D. Gunther, Red Bank

New YorkMelissa B. Burke, BuffaloMarie Hoenings, Garden CityPeter Jon Biging, New YorkAimee L. Creed, New YorkThomas Philip Kurland,New YorkDavid A. Lewis, New YorkSandra C. McCallion,New YorkKenneth E. Pitcoff, New YorkTimothy J. Sheehan,New YorkKimberly Hunt Lee,PoughkeepsieMichael W. Coffey,White PlainsJoseph Jeziorkowski,WoodburyB. Hart Knight, NashvilleJason Michael Pannu,NashvillePaul Maxwell Smith III,NashvilleTexasBreck Harrison, AustinPaul A. Grinke, DallasTy M. Sheaks, DallasSarah Shulkin, DallasMichael Beckelman, HoustonRoberta Benson, HoustonRichard P. Griffin, HoustonJason C. McLaurin, HoustonLatosha Lewis Payne,HoustonSrujana Shivji, HoustonElliott W. Taliaferro, HoustonChristine E. Reinhard,San AntonioShannon B. Schmoyer,San AntonioVermontMario B. Hankerson,RandolphJoel P. Iannuzzi, RutlandWilliam J. Blake, SpringfieldVirgin IslandsRichard M. Prendergast,ChristianstedVirginiaSasha Ward McNickle,FairfaxCaroline V. Davis, RichmondSuzanne M. Lim,RichmondLindsey A. Strachan,RichmondWashingtonStephanie Christensen,BellevueThomas P. Miller, SeattleBenjamin I. VandenBerghe,SeattleWest VirginiaMary Catherine Funk,CharlestonIra Matthew Mains,HuntingtonKeisha N. Jackson,MartinsburgWisconsinBrian Weber, La CrosseRyan R. Graff, ManitowocKatelyn P. Sandfort,ManitowocJon Feldbruegge, WaukeshaAndrew Versnik, WaukeshaCanadaOntarioRobert B. Cohen, TorontoShane Hardy, TorontoChristopher Horkins,TorontoQuebecAnnie Bernard, MontrealStephanie Lapierre, MontrealNorth CarolinaGillain S. Crowl, CharlotteJustine Kelly, DurhamNorth DakotaCourtney Olson, DickinsonOhioDevin Andrew Barry,ClevelandMargaret M. Koesel,ClevelandMary McWilliams Dengler,ColumbusTracie N. Ransom, ColumbusKathleen M. Guarente,IndependenceMichael J. Podolsky, ToledoMegan M. Graff, YoungstownAcknowledge a colleague for his or herexperiences and accomplishments usingthe new recommend feature in the DRIMembership Directory.OklahomaAndrea Marie Wyrick,CatoosaMelanie K. Christians,EdmondCarolyn S. Smith, EdmondPennsylvaniaJoseph Zack, BerwynAnita F. O’Meara,East FallowfieldLauralee B. Baker, LancasterLeslie Dias, PhiladelphiaCecil J. Jones, PhiladelphiaMarc D. Portlock,PhiladelphiaMatthew A. Meyers,PittsburghSouth CarolinaJarrett O. Coco, ColumbiaAdam Hegler, ColumbiaDavid L. Paavola, ColumbiaTennesseeAndre Bernard Mathis,MemphisYou will receive a notificationvia email when you have beenrecommended by a colleague.Make sure your memberprofile is up-to-date andcomplete. Visit theMembership Directory andstart recommending!Note: You must be a DRI member andlogged in to the website to utilize this feature.Recommendationswill be highlightedon your memberprofile with a linkto the profile of theperson whorecommended you.

Deciding the direction of MSAs [] just became easier.GRG RESOLUTION & COMPLIANCE PROGRAMHEALTHCARELIEN RESOLUTIONMEDICARE SET-ASIDESOLUTIONSMSP & MANDATORYINSURER REPORTINGCOMPLEX SETTLEMENTADMINISTRATIONBuilding on a decade of experience providing Medicare Set-Aside (MSA) services, Garretson Resolution Grouplaunches an innovative online-based tool, the MSA Decision Engine.whether an MSA is appropriate by guiding you through a series of simple questions and steps.The result is a comprehensive, fast and compliant recommendationto ensure Medicare’s future interests are properly considered.To learn more about our full suite of MSA services visit our websitegarretsongroup.com or call toll-free 888-556-7526.1 EVALUATE 2 ALLOCATE 3SUBMIT©2012 Garretson Resolution Group.