Wednesday, November 16, 2011

Year End Review Article: GENERAL CIVIL LITIGATION CASES AND TRENDS

Below is a copy of my year end review article on general civil litigation cases and trends over the past year of 2011.  This article was published in this week's Pennsylvania Law Weekly.

Over the next month or so, I will share my year end articles reviewing the important cases and trends in the Auto Law context and the Bad Faith context.


Rule Changes Alter State Civil Litigation Landscape

by
Daniel E. Cummins


Pennsylvania Law Weekly


November 15, 2011

In civil litigation, this has been a year of big changes and shifts in how personal injury matters are to be played out in Pennsylvania courts. A seismic shift in the state's civil litigation landscape was felt on June 28 when state Gov. Tom Corbett signed into law the Fair Share Act, drastically changing the joint and several liability of defendants in civil litigation matters.

Another important rule change for state civil litigation matters came when the state Supreme Court passed amendments Pa.R.C.P. 212.3, 212.5 and 212.6, pertaining to pre-trial conferences and settlement conferences. There have also been some major substantive changes in Pennsylvania civil litigation law.

Under the prior joint and several liability law, a defendant who was found responsible for only one percent of the liability for an injury or economic loss could be required to pay the entire 100 percent of the damages owed to the injured party.

Under the Fair Share Act, Pennsylvania now joins about 40 other states that require defendants in personal injury matters to pay only the proportion of the degree of fault assessed to them by a jury. For example, if a defendant is found 25 percent liable by a jury, that defendant is only required to pay 25 percent of the verdict, i.e., his or her "fair share" of the damages.

Note that this new law applies to causes of action that "accrue on or after the effective date," — June 28, 2011. As such, all causes of action arising before this date will still proceed under the old joint and several liability rule.

Pennsylvania's Fair Share Act also provides, with certain limited exceptions, where the defendant's liability for the damage or loss is assessed by a jury at 60 percent or more, that defendant can still be held jointly liable, i.e. responsible for the full amount of damages regardless of their percentage of fault.

Of note in the January rule changes to pretrial and settlement conferences is the new provision to Rule 212.3 that provides that "[a] court may require, pursuant to a court order, various parties to attend a pretrial conference, including an insurance or similar representative, who has authority to negotiate and settle the case."

The rule goes on to state that, if the pretrial conference is set up without any court order regarding the attendance of an insurance representative with settlement authority, such a person is still required by the terms of the rule to attend the conference in person "or be promptly available by phone."

The 3rd Circuit Applies Third Restatement of Torts to Products Cases


On July 12, the 3rd U.S. Circuit Court of Appeals issued an important decision in the products liability case of Covel v. Bell Sports Inc. In Covel, the 3rd Circuit affirmed the U.S. Eastern District Court's application of the Third Restatement of Torts and negligence concepts to claims of injuries allegedly caused by a defective product.

In so ruling the court reaffirmed its prediction from the case of Berrier v. Simplicity Manufacturing Inc., that, if faced with the issue, the Pennsylvania Supreme Court would move to applying the Third Restatement's standards in products liability cases as opposed to continuing with the current utilization of strict liability standards set forth in Section 402A of the Restatement (Second) of Torts (1965) .

It therefore appears that, by virtue of this opinion, until the Pennsylvania Supreme Court holds otherwise, the Third Restatement 's "reasonableness"-based form of strict liability will be utilized in federal courts applying Pennsylvania law as opposed to the strict liability theory of law espoused by the Restatement (Second) of Torts.

Under the old restatement, defendants in products liability cases could be held strictly liable to parties injured by unreasonably dangerous products, even if the defendant exercised reasonable care in the manufacturing, distribution or sale of the product. Under that analysis, negligence principles (duty of care, breach of standard of care, causation) do not come into play. Usually, the plaintiff includes a separate and distinct negligence claim in the complaint against the defendants.

Under the Third Restatement , defective products are defined under standards that incorporate negligence concepts such as foreseeable risk and care into the definition of defective.

This change basically means that a risk-utility balancing test, which is a negligence concept, would be utilized in the determination of whether or not a product is defective. Under this new analysis, defendants in products liability cases will not be strictly liable for defective products regardless of fault; rather, the liability test will be less stringent, which is a change in the law that favors the defense in these types of cases.

As noted, this decision currently only applies to Pennsylvania federal court matters. It remains to be seen how the Pennsylvania Supreme Court will address the issue if faced with it in the future.

Error of Judgment Defense Banned in Medical Malpractice Cases

The Pennsylvania Superior Court recently ruled in the medical malpractice case of Passarello v. Grumbine that its earlier ruling banning medical malpractice defendants from relying on an "error in judgment" defense at trial can be applied retroactively in certain cases.

Under the "error in judgment" defense, the courts would instruct jurors at trial that "physicians who exercise the skill, knowledge and care customarily exercised in their profession are not liable for a mere mistake in judgment."

The prior Superior Court decision in which this defense was first found to be invalid was the Superior Court case of Pringle v. Rappaport. In that case, the Superior Court reviewed the history of the error in judgment rule and held that it was no longer valid in Pennsylvania due to its inconsistency with the "standard of care" analysis utilized in medical malpractice cases.

In the more recent decision of Passarello, the Superior Court held that its previous ruling in Pringle could be applied retroactively but only in those cases where the final judgment of the verdict had not been entered before the 2009 filing date of the Pringle decision. The Passarello court noted in its opinion that it felt that the number of prior cases that may arise as a result of this retroactive application of the rule of law would be limited and not open the floodgates to numerous new appeals.

Medicare/Medicaid Liens and Settlements

Another recent trend in civil litigation matters is the increasing concern of addressing Medicare liens asserted by the federal government against personal injury settlements and verdicts.

Late last year, in the case of Zaleppa v. Seiwell, the Superior Court upheld a plaintiff's argument that a defendant's statutory obligation to reimburse Medicare was separate and distinct from Medicare's statutory right of reimbursement and that nothing under federal law or any provision of the Medicare Secondary Payer Act "expressly authorizes a primary plan to assert Medicare's right to reimbursement as a pre-emptive means of guarding against its own risk of liability."

In other words, defendants and liability carriers in personal injury matters did not have a right to demand that certain steps be taken by a plaintiff to ensure that a Medicare lien was satisfied out of the monies paid to the plaintiff. Rather, the Medicare Secondary Payer Act expressly provides that only the U.S. government, and not any private entity, such as a tortfeasor defendant or liability insurance company, may pursue the rights of the government in this regard.

Since the issuance of the Zaleppa, a few trial court decisions have come down over the past year expanding on this issue.

In both the Cambria County case of Vincent v. Buck, and the Monroe County case of Dailey-Console v. Barnwell, the trial court judges relied upon the Zaleppa case to support a granting of a plaintiff's motion to compel a defendant to pay a settlement over the defendants' objection that Medicare lien issues were not yet resolved. In both decisions, the trial courts emphasized that there was nothing in the releases entered into between the parties that entitled the defense to insist that certain measures be taken by the plaintiff to ensure that the Medicare lien was addressed prior to the issuance of the settlement check.

Pursuit of Dept. of Public Welfare Liens Upheld

While the issues pertaining to Medicare liens and settlements were clarified in 2011, longstanding procedures regarding the recovery of Pennsylvania Department of Public Welfare Medicaid liens were upheld as valid by the 3rd Circuit U.S. Court of Appeals in June. The decision came in a 59-page opinion in Tristani v. Richman.

The 3rd Circuit noted that the U.S. Supreme Court, in the case of Arkansas Department of Health and Human Services v. Ahlborn, assumed, without deciding, that such liens, when limited to the portion of a settlement or judgment constituting reimbursement for medical costs are an implied exception to the federal law that prohibits states from imposing liens on the property of Medicaid beneficiaries.

The 3rd Circuit in the Tristani case was tasked with the job of deciding "whether these liens in fact constitute such an exception." More specifically, the issue for the court to decide was "whether state agencies responsible for administering the Medicaid program have the authority to assert such liens and, if so, whether Pennsylvania's statutory framework is consistent with the Supreme Court's decision in Ahlborn."

The ultimate decision in Tristani was that its "examination of the text, structure, history and purpose of the Social Security Act leads [the 3rd U.S. Circuit Court of Appeals] to conclude that liens limited to medical costs are not prohibited by the anti-lien and anti-recovery provisions of the act." Accordingly, court upheld Pennsylvania's longstanding practice of allowing for such Medicaid liens to be recovered by the Pennsylvania Department of Public Welfare in civil litigation matters.

Social Media Discovery

Another emerging trend in Pennsylvania personal injury matters is increasing litigation over the extent to which one party may gain access to information on an opposing party's social networking sites such as Facebook or MySpace. The trend of the initial trial court decisions in this regard has been to allow such discovery.

One of the initial, if not the first, decisions handed down on this issue came back in September 2010 when President Judge John H. Foradora of the Jefferson County Common Pleas Court ruled in McMillen v. Hummingbird Speedway Inc. that Facebook postings were discoverable and ordered the plaintiff to provide his username and password to the defense in order that the information may be accessed.

The McMillen decision was followed by Northumberland County case Zimmerman v. Weis Markets Inc. Common Pleas Court Judge Charles H. Saylor wrote, "This court agrees with the rationale of the opinion in McMillen, authorizing access for the reasons that no privilege exists in Pennsylvania for information posted in the nonpublic sections of social websites, liberal discovery is generally allowable, and the pursuit of truth as to alleged claims is a paramount ideal."

A similar ruling was also handed down by the U.S. District Court for the Middle District of Pennsylvania in the case of Offenback v. L.M. Bowman Inc. In Offenback, Magistrate Judge Martin C. Carlson granted the defendant's request for access to the plaintiff's Facebook page under Fed.R.C.P. 26(b)(1). The court conducted an in camera review of the plaintiff's Facebook page as part of the court's analysis and found that the information contained on the site should be indeed discoverable as relevant to an evaluation of the plaintiff's damages claims.

One contrary trial court decision in this area was handed down in Bucks County case Piccolo v. Paterson. In a one paragraph order, the court denied a defendant's motion to compel the plaintiff to allow the defense access to the plaintiff's Facebook page.

At issue in the Piccolo case was a scarring injury. Prior to the defendant's request for access to the plaintiff's Facebook page, the plaintiff had already provided the defense with a great number of photographs pertaining to the scarring injury claim. The court apparently found that the defendant's desire to access even more photos of the plaintiff on her Facebook page was cumulative and unnecessary.

Authentication of Text Messages At Trial

Sometimes, updates to the practice of civil litigation law can come from criminal court decisions. Such was the case with the recent criminal court appellate decision, Commonwealth v. Koch, described as a case of first impression. In Koch, the Superior Court ruled that text messages were not admissible in court unless they were properly authenticated.

In Koch, a criminal defendant's cellphone had been seized by the police during a search warrant. The text messages discovered on the phone were transcribed, offered at trial by the prosecutor and allowed into evidence by the trial court judge over the defendant's objections.

On appeal, the Superior Court found that the text messages were not properly authenticated and, therefore, should not have been admitted. The criminal conviction was overturned.

In the decision, the court noted that "electronic writings typically show their source, so they can be authenticated by contents in the same way a communication by postal mail can be authenticated."

Pointing to the rules of evidence on the proper authentication of evidence at trial, Pa.R.E. 901-902, the Superior Court held that there must at least be "[c]ircumstantial evidence, which tends to corroborate the identity of the sender," of the text message before that evidence may be considered authenticated and admitted.

This emerging authentication issue could obviously also come into play in civil litigation matters with respect to authenticating text messages offered into evidence. Such authentication will also likely be required for Twitter postings and e-mails as well as evidence in the form of the commentary and photos found on social media sites such as Facebook, MySpace, LinkedIn and Google Plus, to name a few.

The Future of Expert Discovery

Revisions to Rule 26 of the Federal Rules of Civil Procedure took effect on Dec. 1, 2010, resulting in a significant change in the long-standing Federal Court procedure regarding the discovery of expert witness reports.

Relying upon the work-product doctrine, Rule 26 now no longer requires full discovery of draft expert reports or broad disclosure of any communications between trial counsel and the expert, all of which was previously required since the rule's last revision back in 1993. Still permitted is the full discovery of the expert's final opinion and of the facts or data used to support the opinions.

Both the plaintiff's bar and the defense bar are keeping an eye on a highly anticipated decision by the Superior Court on the same issue in the case of Barrick v. Holy Spirit Hospital. That case revolves around the all-important issue of whether one party is entitled to discovery of correspondence written by opposing counsel to the opposing party's expert for trial.

The trial court originally ruled that such communications by the plaintiff's attorney to the plaintiff's expert were discoverable. On appeal, the original Superior Court panel affirmed.

Thereafter, the Superior Court granted the plaintiff's motion for reargument before an en banc panel and, in doing so, withdrew the Superior Court's affirming decision.

On April 5, the en banc panel heard reargument of the Barrick case and the case has remained under advisement ever since. For full disclosure purposes, I note that I assisted the defense in this matter by way of an amicus brief sponsored by the Pennsylvania Defense Institute.

The court's decision in Barrick will serve clarify the interplay between Pa.R.C.P. 4003.3 and 4003.5 — the balance between the protections of the attorney work product doctrine and the discoverability of the bases for an expert's opinion could have a major impact in how litigating attorneys communicate with their respective experts during the course of a lawsuit.

It is also noted that, earlier this year, the Pennsylvania Supreme Court Civil Procedural Rules Committee published a draft of its Proposed Recommendation No. 248, seeking to amend Pa.R.C.P. 4003.5, which pertains to expert discovery.

This proposed recommendation intends to bring state court practice more in line with new federal practice noted above. Significantly, it expressly prohibits the discovery of any kind of communications between any attorney and his or her expert.

It remains to be seen whether this issue of expert discovery will be resolved by way of the Barrick decision or a revision to the Rules of Civil Procedure or a combination of both. •

Daniel E. Cummins is a partner and civil litigator with the Scranton law firm of Foley, Cognetti, Comerford, Cimini & Cummins. His civil litigation blog, "Tort Talk," may be viewed at http://www.torttalk.com/.

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