The Voice^TM

Supreme Court Sides with Energy Companies in Climate Change Case

By Carmen R. Toledo

Climate change cases continue to proliferate and work their way through the courts. Whether those cases belong in federal or state court remains an important—and yet unresolved—question. In a procedural ruling that addresses at least part of that issue, the U.S. Supreme Court has reversed a decision in which the Fourth Circuit held that it lacked jurisdiction to consider all of the defendants’ grounds for removal under 28 U.S.C. §1447(d). See BP P.L.C. v. Mayor and City Council of Baltimore, No. 19-1189, slip op. (May 17, 2021). DRI has been closely following this case. DRI National Director John Guttmann wrote about the case (p. 8) when the Supreme Court granted certiorari and DRI, through its Center for Law and Public Policy, filed an amicus brief supporting the petitioners.

The City of Baltimore is just one of several municipalities that have sued energy companies claiming they are responsible for climate change and sea level rise. Baltimore filed its lawsuit in Maryland state court in 2018, asserting state law causes of action and seeking to recover damages the City allegedly has suffered (and will continue to suffer) as a result of climate change. The energy companies timely removed the case to federal court, invoking several federal statutes. Most notably, the energy companies relied on federal officer jurisdiction (28 U.S.C. §1442(a)(1)), arguing that some of the challenged operations—exploration, drilling, and production operations—“took place at the federal government’s behest.” Slip op. at 2. The City filed a motion for remand, arguing that none of the companies’ grounds for removal were valid. The district court agreed and remanded the case.

While a remand order is generally not appealable, 28 U.S.C. §1447(d) allows appellate review when the removal was based on §1442 (federal officer) or §1443 (civil rights). Relying on their federal officer jurisdiction argument, the defendants appealed. The Fourth Circuit, however, read §1447(d) as allowing it to review only that portion of the remand order specifically discussing §1442 and refused to consider all the other grounds for removal that the defendants had asserted. Mayor & City Council of Baltimore v. BP P.L.C., 952 F.3d 452 (4th Cir. 2020).

In an opinion written by Justice Gorsuch for a 7–1 majority, which aligned with the argument set forth in DRI’s amicus brief, the Court ruled that the Fourth Circuit should have considered the remand order in its entirety. Specifically, the Court ruled that the ordinary meaning of §1447(d)’s text permits review of the district court’s entire remand order when a defendant relies on §1442 as grounds for removal—noting that the word “order” in §1447(d) means the entire district court’s order, which in this case expressly ruled on all of the defendants’ grounds for removal. Slip op. at 4–5. The Court rejected the City’s argument that exceptions to statutory rules should be construed narrowly, as well as a new argument that defendants did not really remove the case “pursuant to” §1442. Id. at 7–8.

Justice Sotomayor, the sole dissenter, argued that the Court’s ruling allows defendants to “sidestep §1447(d)’s bar on appellate review by shoehorning a §1442 or §1443 argument into their case for removal. In other words, it lets the exception swallow the rule.” Dissenting op. at 2. The majority considered this argument and rejected it, explaining that the “Court’s task is to discern and apply the law’s plain meaning as faithfully as we can, not to assess the consequences of each approach and adopt the one that produces the least mischief.” Slip op. at 13 (citation omitted). Justice Alito did not participate in the case.

The Court declined to consider the grounds for defendants’ removal, and remanded the case to the Fourth Circuit for consideration of those grounds “in the first instance.” Slip op. at 14. While the decision does not address the question of whether the case will ultimately remain in federal court, it is a clear victory for defendants in climate change cases and beyond. The decision resolves a circuit split and makes it clear that, if a remand order is appealable under §1447—i.e., if one of the grounds for removal was §1442 or §1443—the entire remand order must be considered on appeal.

Carmen R. Toledo is a partner in the Atlanta office of King & Spalding. Her practice focuses on litigation involving toxic torts, environmental disputes, product liability, and other complex litigation matters. She represents chemical, agricultural, pharmaceutical, and energy industry clients in individual, mass joinder, and class action cases across the United States, at both the trial and appellate levels. Carmen is member of the DRI Board of Directors and a past chair of the DRI Toxic Torts and Environmental Law Committee.

DRI Files Brief in Missouri Talc Case

DRI—The Voice of the Defense Bar filed an amicus brief on April 5, 2021, supporting certiorari in the U.S. Supreme Court in the high-profile talcum powder case against Johnson & Johnson, where a Missouri appellate court affirmed a judgment of over $2 billion. The case had twenty-two plaintiffs whose disparate claims were consolidated for trial under twelve states’ laws, with jury instructions that took five hours to review. This consolidation was not just unwieldy, but raised substantial due process concerns, compromising the defense of each plaintiff’s case and severely prejudicing Johnson & Johnson. In particular, despite the fact that each plaintiff had a unique case based on individualized facts, the jury awarded each plaintiff an identical $25 million, followed by an astounding $1.6 billion in punitive damages—a figure that is more than eleven times the compensatory damages. DRI’s brief emphasized the concerns that all product liability defendants experience, given the unfairness arising from consolidated trials. The brief analyzed the depth and breadth of prejudice arising in consolidated trials and demonstrated why the resulting verdict was inconsistent with fundamental due process principles.

DRI’s brief, filed through the Center for Law and Public Policy, was authored by Lisa Baird of Reed Smith in Miami. Ms. Baird is chair of the DRI Appellate Advocacy Committee and a member of the DRI Amicus Committee.

Florida Updates Summary Judgement Standards

The Florida Supreme Court finalized an amendment largely to replace the text of Florida’s summary judgment rule (Florida Rule of Civil Procedure 1.510) with the text of Federal Rule of Civil Procedure 56, with some exceptions for timing-related issues. The amendment takes effect on May 1, 2021, and applies to any summary judgment motion decided on or after that date, including in pending cases. DRI, through the Center for Law & Public Policy, had urged the court to adopt this change.

Climate Change Hot Sheet: Big Second Circuit Greenhouse Gas Victory for the Oil Industry

By Steven M. Siros

Breaking from the pack and potentially creating a circuit split, the Second Circuit’s decision in City of New York v. Chevron, et al., dismissing New York’s City’s climate change lawsuit, is a significant victory for the oil and gas industry. The unanimous ruling from the Second Circuit affirmed a district’s court decision dismissing New York’s common law claims, finding that issues such as global warming and greenhouse gas emissions invoked questions of federal law that are not well suited to the application of state law.

Taking a slightly different tack than state and local plaintiffs in other climate change lawsuits, the State of New York sued five oil producers in federal court, asserting causes of action for (1) public nuisance, (2) private nuisance, and (3) trespass under New York law stemming from the defendants’ production, promotion, and sale of fossil fuels. New York sought both compensatory damages and a possible injunction that would require defendants to abate the public nuisance and trespass. Defendants filed motions to dismiss that were granted. The district court determined that New York’s state law claims were displaced by federal common law and that those federal common law claims were in turn displaced by the Clean Air Act. The district court also concluded that judicial caution counseled against permitting New York to bring federal common law claims against defendants for foreign greenhouse gas emissions.

The Second Circuit agreed with the district court, noting that the problems facing New York can’t be attributed solely to greenhouse gas emissions in the state nor the emissions of the five defendants. Rather, the greenhouse gas emissions that New York alleges required the City to launch a “$20 billion-plus multilayered investment program in climate resiliency across all five boroughs” are a byproduct of emissions around the world for the past several hundred years.

As the Second Circuit noted, “[t]he question before it is whether municipalities may utilize state tort law to hold multinational oil companies liable for the damages caused by greenhouse gas emissions. Given the nature of the harm and the existence of a complex web of federal and international environmental law regulating such emissions, we hold that the answer is ‘no’.”

Finding that New York’s state common law claims were displaced by federal common law, the Second Circuit then considered whether the Clean Air Act displaced these federal common law claims. The Second Circuit noted that the Supreme Court in Am. Elec. Power Co. v. Connecticut (AEP) (2011) had previously held that the “‘Clean Air Act and the EPA actions it authorizes displace any federal common-law right to seek abatement’ of greenhouse gas emissions.” As to the State’s damage claims, the Second Circuit agreed with the Ninth Circuit’s reasoning in Native Vill. Of Kivalina v. Exxonmobil Corp. (9th Cir. 2012) that the “displacement of federal common law does not turn on the nature of the remedy but rather on the cause of action.” As such, the Second Circuit held that “whether styled as an action for injunctive relief against the Producers to stop them from producing fossil fuels, or an action for damages that would have the same practical effect, the City’s claims are clearly barred by the Clean Air Act.”

The Second Circuit was careful to distinguish its holding from the holdings reached by the First, Fourth, Ninth, and Tenth circuits in prior climate change cases, noting that in those other cases, the plaintiffs had brought state law claims in state court and defendants then sought to remove the cases to federal courts. The single issue in those cases was whether the defendants’ federal preemption defenses singlehandedly created federal question jurisdiction. Here, because New York elected to file in federal as opposed to state court, the Second Circuit was free to consider defendants’ preemption defense on its own terms and not under the heightened standard applicable to a removal inquiry.

Whether the Supreme Court will be more inclined to review the Second Circuit’s decision in light of its recent decision in BP PLC et al v. Mayor and City Council of Baltimore remains to be seen.  As discussed in greater detail in the Center For Law and Public Policy’s coverage of the decision above, the Supreme Court found in a 7–1 decision on May 17, 2021, that the Fourth Circuit had erred in concluding that it only had narrow jurisdiction to review whether the case had been properly removed under the “federal officer removal statute.”  Here, the defendants had alleged a number of different grounds for removal, one of which is known as the “federal officer removal statute” that allows removal to federal court of any lawsuit filed against an officer or person acting under that office of the United States or an agency thereof, but the Fourth Circuit found that it could only consider the federal-officer removal ground.  The Supreme Court found that there was nothing in the statutory language that would appear limit the scope of the appellate court’s review, noting that “[§1447(d)] allows the courts of appeals to examine the whole of a district court’s ‘order,’ not just some of its parts or pieces.”  

Steven M. Siros is a partner of Jenner & Block in Chicago, where he chairs the firm’s environmental litigation practice and co-chairs the environmental workplace health and safety practice. He focuses primarily on environmental and toxic tort matters. Corporations seek his counsel on complex CERCLA and RCRA matters and cases involving toxic tort and natural resource damages. He counsels policyholders in insurance coverage disputes relating to environmental issues, advises on regulatory compliance issues, and assists clients on a variety of climate change and sustainability issues. Mr. Siros serves on the DRI Toxic Torts and Environmental Law Committee as chair of its Regulatory Lawyers Subcommittee.

Complete Preemption 101

State courts are courts of general jurisdiction, and as such they are presumed to have jurisdiction to decide both state and federal causes of action.

By contrast, federal courts are courts of limited jurisdiction. The Constitution defines the maximum extent of federal judicial power to include controversies between citizens of different states and all cases arising under the Constitution, laws, or treaties of the United States. Further, the Constitution grants Congress the power to determine the scope of jurisdiction of the lower federal courts. As a result, federal courts may only exercise jurisdiction that has been specifically authorized by federal statute.

Generally, a defendant may remove a civil action filed in state court to federal court if the federal court has original jurisdiction over at least one of the plaintiff’s claims. However, the federal court must remand the case if the court lacks original subject matter jurisdiction.

Unless the parties are completely diverse, removal is proper only if the complaint affirmatively alleges a federal claim, under the well-pleaded complaint rule. A federal defense is not enough to overcome the strictures of this rule. But there is an exception when there is a substantial, actually disputed, federal issue embedded within the state law cause of action. Under the Grable doctrine, a federal court may exercise jurisdiction to decide an embedded federal question without disturbing the balance of federal and state judicial responsibilities that Congress intended.

The well-pleaded complaint rule secures the plaintiff as the “master of his complaint” and should effectively secure the plaintiff’s forum selection. A plaintiff who wants to keep a case in state court should succeed as long as the complaint only invokes state law.

However, an exception is made to the well-pleaded complaint rule when a federal statute wholly displaces—or “completely preempts”—a state law cause of action. Under the complete preemption doctrine, if the plaintiff’s claim is within the scope of the federal statute, then even a complaint that alleges only state law claims “arises under” federal law. Unlike ordinary preemption, which is an affirmative defense, complete preemption is jurisdictional. Thus, when complete preemption applies, jurisdiction is proper only in federal court.

To preempt state substantive law completely, not only must the federal statute’s force be so extraordinary that it completely replaces the relevant state substantive law, but the text of the statute must clearly show that Congress intended the federal cause of action to be the exclusive cause of action.

Application of the complete preemption doctrine is rare. The Supreme Court has approved complete preemption by statutory provisions in just three areas: section 502(a) of ERISA, sections 85 and 86 of the National Bank Act, and section 301 of the Labor-Management Relations Act. Indeed, the Fourth Circuit recognizes a rebuttable presumption against finding complete preemption, “because federalism concerns strongly counsel against imputing to Congress an intent to displace a whole panoply of state law in a certain area absent some clearly expressed direction.” Johnson v. Am. Towers, LLC, 781 F.3d 693, 701 (4th Cir. 2015).

The PREP Act provides absolute immunity from suit and liability under federal and state law to nursing homes and other healthcare providers for all claims of loss caused by and related to the administration or use of covered countermeasures against COVID-19. Covered countermeasures include qualified pandemic products; security countermeasures; and drugs, biological products, or devices approved, cleared, or licensed by the FDA. The PREP Act also provides for a Covered Countermeasure Process Fund to compensate eligible individuals for serious physical injuries or deaths directly caused by the administration or use of a covered countermeasure. The only statutory exception to this immunity is for actions or failures to act that constitute willful misconduct, and such cases should be transferred to a three-judge panel of the District Court for the District of Columbia.

The Office of the General Counsel of the Secretary of the Department of Health and Human Services issued Advisory Opinion 21-01 on January 8, 2021, in which it explained that the PREP Act is a complete preemption statute because it establishes a federal cause of action (albeit an administrative one). It opined that in cases where the PREP Act is triggered when the defendant’s action or inaction falls within its scope, complete preemption attaches and “the district court is usually obligated to dismiss the case as pleaded, either because no federal cause of action is alleged or the exclusive initial venue is a federal administrative agency.” Notably, the opinion also stated that it does not have the force and effect of law.

Some of the federal district courts to consider whether the PREP Act completely preempts state law have discussed the complete preemption doctrine in detail, but have avoided answering the question directly because they have determined that the PREP Act was not triggered when the defendants’ alleged conduct did not fall squarely within the administration or use of covered countermeasures for COVID-19. See, e.g., Maltbia v. Big Blue Healthcare, Inc., No. 20-2607-DDC-KGG, 2021 WL 1196445 (D. Kan. Mar. 30, 2021); Sherod v. Comprehensive Healthcare Mgmt. Svcs., LLC, No. 20-cv-1198, 2020 WL 6140474 (W.D. Pa. Oct. 16, 2020).

Of the federal district courts that have answered this preemption question, most have not been persuaded by Advisory Opinion 21-01 and have instead concluded that the PREP Act is not a complete preemption statute because it fails to create an exclusive federal cause of action that would allow a federal court to adjudicate plaintiffs’ claims on the merits (except for allegations of willful misconduct). See, e.g., Schuster v. Percheron Healthcare, Inc., No. 4:21-cv-00156-P (N.D. Tex. Apr. 1, 2021); Estate of Maglioli v. Andover Subacute Rehab. Ctr. I, No. 20-cv-6605-KM-ESK, 2020 WL 4671091 (D.N.J. Aug. 12, 2020) (currently on appeal); Dupervil v. All. Health Operations, LCC, No. 20-cv-4042-PKC-PK, 2021 WL 355137 (E.D.N.Y. Feb. 2, 2021) (currently on appeal) (explaining that the PREP Act is essentially an immunity statute that does not create rights, duties, or obligations but instead confers jurisdiction on the Secretary via the Covered Countermeasure Process Fund, and rejecting the argument that the Grable doctrine creates federal-question jurisdiction in this context); Estate of Winfred Cowan v. LP Columbia KY, LLC, No. 1:20-CV-00118-GNS, 2021 WL 1225965 (W.D. Ky. Mar. 31, 2021) (remanding due to lack of federal subject-matter jurisdiction, noting that the proper interpretation of a federal statute is protected by the Supreme Court’s power to review state court decisions involving such issues); Wright v. Encompass Health Rehab. Hosp. of Columbia, Inc., No. 3:20-cv-02636-MGL, 2021 WL 1177440 (D.S.C. Mar. 29, 2021) (declining to apply Chevron deference to Advisory Opinion 21-01 because an agency’s position on jurisdiction is not entitled to Chevron deference).

By contrast, a federal district court in California held that the PREP Act is a complete preemption statute. Garcia v. Welltower OPCo Group LLC, No. SACV 20-02250JVS, 2021 WL 492581 (C.D. Ca. Feb. 10, 2021). The court agreed with the administrative agency’s interpretation of the PREP Act as explained in Advisory Opinion 21-01, citing Chevron, Inc. v. NDRC, Inc., 467 U.S. 837, 843 (1984), Skidmore v. Swift & Co., 323 U.S. 134 (1944), and United States v. Mead Corp., 533 U.S. 218, 220 (2001).

The federal circuit courts of appeal will soon examine this issue and decide for their own circuits whether the PREP Act completely preempts state law and thus grants subject-matter jurisdiction over these claims to the federal courts.

Christy C. Dunn is an attorney at Young Moore and Henderson, P.A. She represents insurers and businesses in a variety of civil litigation matters, including insurance coverage, employment, electric, and long-term care claims.

Addressing Personal Factors

For workplace safety policies to be effective, employees must first seek out and/or notice the information, understand it, and accept it as a credible source. Employees may not be motivated to do so for several reasons. For example, after more than a year of pandemic life, they may be feeling “disaster fatigue” (Elledge et al., 2008). Survey data collected from a national sample at several timepoints during the pandemic show that individuals’ perception of the risk posed by the pandemic diminished over time, even during subsequent “waves” of reported infections (Crump et al., in preparation).

Such habituation to risk can manifest in a workplace setting in several ways. For one, employees may have had prior benign experiences in which behaviors deemed risky by an employer’s policy have not resulted in illness or other negative consequences—such as failing to wear a face covering in the office several times without incident (e.g., Elledge et al., 2008). Relatedly, individuals may feel they already know everything they need to know about COVID-19, which can result in failure to update knowledge about protective measures and post-vaccination guidance; this is particularly problematic due to the ever-evolving state of knowledge about the COVID-19 pandemic. To illustrate, a fully vaccinated employee may believe that because it was once advised to continue to wear masks in all situations post-vaccination, the same guidance should hold today because he or she has not sought out updated guidance that provides certain exceptions when with others who are also fully vaccinated.

When any of these factors comes into play, the likelihood of noncompliance increases—even if only in certain situations. Although these factors can potentially be out of an employer’s control, they can often interact with situational factors that allow employers an opportunity to influence compliance.

Addressing Situational Influences

Even employees who understand and believe the information in an employer’s safety policy, and have every intention of complying, can still fail to abide by the safety guidelines because of the prevailing context. For example, an employee may understand the requirement to wear a face covering when in common areas like conference rooms but fail to put the face covering on when others enter his or her individual office. Many factors can affect compliance in a given situation, including such factors as social influences, perceived “costs,” and consequences of non-compliance.

Social Modeling

Studies of self-protective behaviors, such as seatbelt use in automobiles (Hong et al., 1998) or home isolation in prior epidemics (Braunack-Mayer et al., 2013), demonstrate that the likelihood of individual compliance is highest when everyone else around the individual is complying, and vice versa. If an employee works beside an individual who is not wearing a face covering or using hand sanitizer despite the employer’s requirements, he or she may feel singled out if complying with the safety policy. This is especially true if the employee views that individual as an authoritative figure (Hovland & Weiss, 1951). Because of this phenomenon, compliance is likely to be greatest when all workers model safe behavior, regardless of their role, responsibility, or risk associated with their job function.

Cost of Compliance

Both opportunity and convenience “costs” associated with compliance can affect behavior (cf. Webster et al., 2020; DiGiovanni et al., 2004). Even relatively minor difficulties with compliance—such as having to go out of one’s way to pick up protective equipment—can dramatically reduce the likelihood of compliance (Dingus et al., 1991). Survey data indicate that perceived “costs” associated with consistent use of face masks range from discomfort to unavailability of the mask because it is dirty or otherwise inaccessible (Crump et al., in preparation). Thus, when crafting workplace safety policies, employers may seek to remove costs to compliance whenever possible. For example, if wearing masks and routinely sanitizing hands is required, employers could place mask and hand sanitizing stations in immediate proximity to workstations.

Degree of Enforcement

Studies of self-protective behaviors demonstrate that compliance is highest when individuals are held accountable for their own behaviors (cf. Goodwin et al., 2013). For example, one study found that the implementation of mandatory mask policies in Germany, in April and May of 2020, was associated with an increase from approximately 25 percent compliance to over 80 percent compliance, despite an overall low rate of personal acceptance for wearing masks (Betsch et al., 2020). If wearing face masks is strictly enforced, employees’ motivation to comply may outweigh the cost of their own discomfort or inconvenience.

Conclusion

The COVID-19 pandemic has highlighted important human factors issues related to workplace safety. Even the most extensive and clear protocol may not align with what people actually do, despite all good intentions. As such, an effective plan needs to consider not just how employees should behave but how people typically will behave.

Dr. Caroline Crump is a Human Factors scientist with Exponent, Inc. in Southern California. She received a Ph.D. in Psychology from UCLA and completed postdoctoral training at the Semel Institute for Neuroscience and Human Behavior. Dr. Crump’s expertise includes attention, perception, decision-making, and the factors that can influence these processes. She applies her expertise in questions of product use and failure-to-warn claims, use of guards and personal protective equipment, driver behavior and response, children’s capabilities and understanding of hazards, and slips, trips, and falls.

Dr. Young Bui is a Human Factors scientist working in Exponent’s Denver office. He has a Ph.D. in Psychology from Washington University in St. Louis. Dr. Bui has expertise in assessing visibility and conspicuity issues, and applies this knowledge to incidents involving automobiles, pedestrians, motorcycles, bicycles/scooters, and tractor-trailers. He performs general assessments of roadway environments that include analyses of lighting, glare, and sightline evaluations in vehicle accidents, slip/trip-and-fall scenarios, and other premises liability claims. Dr. Bui’s work also examines issues related to driver behavior and perception, warnings, attention, and witness memory.

Demand for Asphalt Shingles

Consider this, in the United States alone, demand for asphalt shingles is expected to reach 136.9 million roofing squares of shingles in 2021.  In more relatable terms, that’s over 490 square miles or roughly half the size of Rhode Island. When you consider that asphalt shingles are the most common roofing materials on pitched residential roof systems coast-to-coast, it’s easy to see that the likelihood that some deficient or defective shingles will be produced is something that can’t be ignored. Moreover, in coastal and hail-prone regions, harsh weather has the potential to exploit any manufacturing defects, resulting in damage or premature deterioration. With the increased demand for residential housing in numerous areas throughout the country, there is no doubt that the demand for asphalt shingles will continue to rise, as will the probability of roofing damage from storms, installation defects, and manufacturing deficiencies.

Incorrect Diagnosis of Common Defects

Beyond the commonly discussed damage from wind or hail, as well as typical installation defects, the purpose of this article is to highlight common defects that are often incorrectly attributed to other causes. Each of the conditions discussed below can be mistaken for storm-related damage or a construction defect. However, manufacturing defects must also be considered to avoid improperly attributing the damage to either weather or deficient construction.

Granule Loss

Asphalt shingles are typically impregnated with extra granules to ensure longevity and serviceability. However, when extensive and premature granule loss occurs, often exhibited by sections or clumps of missing granules, the condition is indicative of an underlying manufacturer defect. Bare locations can appear circular in nature and can be incorrectly considered hail damage, even when evidence of exposure to hail capable of damaging roofing is not present.

Blistering

Similar to granule loss, blisters are often mistaken for storm damage, given the shape of the condition. Blisters may be indicative of underlying deficiencies with the roof structure, such as deficient attic insulation and/or ventilation. However, such conditions may also be the result of a manufacturing defect of the shingles—the blisters result from moisture or gases becoming entrapped within the shingle asphalt. When sunlight heats the shingle, the water or gas expands, causing blisters in the shingle surface, which can burst and lead to accelerated degradation of the shingle and exposure of the underlying reinforcing mat.

Curling/Cupping

Manufacturers identify this condition as a sign of age-related degradation, but when occurring shortly following installation, that is not the case.  Again, like blistering, the damage may be attributable to insufficient attic insulation or ventilation. However, when such curling/cupping conditions are exhibited earlier within the life cycle of the roofing, insufficient installation of the asphalt-based binder of the shingle, which prevents the shingle from properly resisting ultraviolet light exposure, may be the cause of the damage.

Conclusion

Damage and deterioration of asphalt shingles from exposure to weather events, installation defects, or manufacturing deficiencies often exhibit similar conditions that can mimic each other. Damage from a weather event can mimic manufacturing defects and manufacturing defects can mimic damage due to problems related to attic insulation and ventilation. This can make it difficult to ascertain whether damage is related to a product defect, construction defect, or storm damage. However, proper knowledge combined with a thorough investigation are key to determining the cause of the damage properly and, where appropriate, to being able to allocate responsibility to the responsible parties properly. Too often, the industry looks for an easy out or the path of least resistance. It’s time for that to change.

Many lawyers would answer “yes.” Few accept the facilitative, “hands off” model of mediation. Instead, they opt for an evaluative mediation, focused on the “merits” and conducted by one with actual or perceived expertise on those merits. In short, many want a mediator to accept the dispute as lawyers have decided to frame it and then hope for the mediator to render an “expert opinion,” telling them they are right and their opponent wrong.

A subject matter expert can be a perfect fit in binding arbitration or other forms of ADR “on the merits.” But if such expertise is the key to a successful mediation, why is the case in litigation at all? Typically, it is not because of a significant knowledge gap. Usually, at least the lawyers and sometimes their clients are “experts” of a sort. Yet, each side has applied expertise and come to opposite conclusions. In such situations, empiricism has its limits in negotiating a solution acceptable to both sides.

That’s because what’s really at the heart of a dispute may escape expert analysis. Often, clients have concerns that do not rise and fall with “objective” opinions. A former business partner feels betrayed. A nonbreaching party is angry. An ex-employee seeks respect. A former employer bristles at being accused of discrimination. An injured party feels ignored.

Likewise, other drivers of settlement value can be divorced from the legal merits. Parties to a commercial dispute might have more interest in preserving a business relationship than in “winning” the mediation. An insurer might be more driven by timing of payment than amount. An individual might highly value avoiding the stress of testifying in court.

Such situations are common and are not usually solved simply by educating a given side on the law or subject area. This is not to say evaluative opinions have no place in mediation. If a trial is contemplated, the parties, at some point, need to come to grips with the strengths and weaknesses of their case. For mature torts and other traditional case types that have a track record for valuation, each mediation lives within the shadow of prior settlements and verdicts. Counsel on each side will know those ranges, no doubt. And, when properly timed by the mediator, such evaluations can close the gap. But relying primarily on anecdotes about “what these cases settle for” or “what juries do with these cases” overlooks that the settlement value of a case is largely a function of the micromarket that the parties create, and how they have subjectively assigned value to it. Finding and driving overlap in those respective valuations will determine the mediation’s success. Tools such as active listening for common ground, building trust and rapport, and creative problem solving are often more helpful than subject matter expertise in resolving such disputes.

Finally, every mediation should include a comparison of the offer on the table with the consequences of not settling. In the absence of a negotiated solution, the ultimate decision-makers in your case are unlikely to be experts themselves. The presiding judge is most often a generalist by necessity, and jurors lack subject matter expertise by design. What they rely upon to make decisions in the absence of subject matter expertise should be at least as important in assessing value. Moreover, variables like witness performance, how jurors will reconcile competing expert opinions, “likeability,” etc., also affect outcome. Depending on a subject matter expert to posit reliable predictions about such factors may be expecting too much.

To be sure, there certainly are subject matter experts who are skilled mediators, and their success in resolving disputes speaks for itself. But subject matter expertise alone may not be any more likely to result in a successful mediation. Ultimately, a mediator who seeks to learn from the parties is more successful than a mediator who depends on the parties learning from him or her.

The Hon. J. Mark Coulson is a United States Magistrate Judge for the District of Maryland. Jeff Trueman,Esq., is an independent mediator and the former director of Civil ADR for the Circuit Court for Baltimore City.

Lisa M. Rolle

DRI member Lisa M. Rolle, a partner in Traub Lieberman’s Hawthorne, New York, office obtained summary judgment in favor of defendant SRI Fire Sprinkler LLC, a family-owned and operated fire sprinkler company that generally provides fire sprinkler installation, inspection, and maintenance services throughout the Northeast and New England. The judgment was determined pursuant to CPLR 3211(a)(5) on the grounds that plaintiff Philadelphia Indemnity Insurance Company’s negligent construction claim accrued on the date when work was completed at the premises, not on the date of the incident as alleged in the plaintiff’s complaint. In the underlying subrogation action, the plaintiff commenced the action in subrogation of its insured, Bet Am Shalom Synagogue (Bet Am), to recover damages in excess of $173,390.86, which it allegedly paid to Bet Am for water damage cleanup and remodeling after certain sprinkler pipes froze and burst in the recently constructed wing of the Westchester synagogue on January 1, 2019, and January 7, 2019. The plaintiff alleged that its subrogor, Bet Am, sustained interior water damage on the first floor and basement levels of the premises, including the carpets, drywall, insulation, bathroom, kitchen and appliances, dining room, hallways, closets, basement storage rooms and supplies, and basement classrooms.

In 2003, general contractor Caldwell Construction Corp. undertook the construction of the additional wing at Bet Am between 2003 and 2006. The plaintiff named Caldwell and two fire sprinkler subcontractors, including SRI Fire Sprinkler LLC, as party defendants. The plaintiff contended that its subrogation action accrued when the property damage was sustained in January 2019. Traub Lieberman moved to dismiss the plaintiff’s complaint in its entirety, as New York courts have long held that a cause of action based on an alleged defective construction or design—whether described as negligence, malpractice, or breach of contract—accrues on the date of completion of construction and not on the date of the alleged injury or date of payment. Therefore, a subrogee may have its claim dismissed based upon the action or inaction of its subrogor. Allstate Insurance Co. v. Stein, 1 N.Y.3d 416 at 423 (2004); Winkelmann v. Excelsior Insurance Co., 85 N.Y.2d 577, 650 N.E.2d 841, 626 N.Y.S.2d 994 (1995); Krause v. American Guaranty & Liability Insurance Co., 22 N.Y.2d 147, 239 N.E.2d 175, 292 N.Y.S.2d 67 (1968); Exchange Mutual Indemnity Insurance Co. v. C.H. Gas El. Co., 243 NY 75 at 79 (1925). The court agreed that the subrogee plaintiff’s claims for negligent construction accrued upon completion of the construction work at Bet Am in 2006 and dismissed the plaintiff’s complaint in its entirety. Costs were also awarded to insured SRI Fire Sprinkler LLC.

Robert W. Maxwell and Thomas N. Vanderford

An en banc Mississippi Supreme Court reversed a $10.5 million dollar verdict against Hyundai Motor America based on jury tampering, concluding misconduct by the plaintiffs’ team “threaten[s] the public’s confidence in our system of justice.” The majority wrote that: “justice dictates a reversal and a retrial unencumbered by extraneous assaults on our justice system.” (Miss. Sup. Ct. No. 2015-CA-01886-SCT, 03/10/21). Hyundai was represented by DRI members Robert W. Maxwell of Bernard Cassisa Elliott & Davis in Covington, Louisiana, and Thomas N. Vanderford, Jr., of Hyundai Motor America in Fountain Valley, California.

The case arose from a two-car accident when a Hyundai Excel crossed the centerline of a rural state highway into the path of a Lincoln Continental and was struck on the side with closing speeds approaching 90 mph. All three occupants of the Hyundai were killed due to collision forces. A multi-week jury trial resulted in a plaintiff verdict, which was appealed on numerous substantive grounds by Hyundai.

During initial appellate proceedings, Hyundai was informed that a member of the plaintiff team, identified variously as a clergyman, jury consultant, investigator, or mere courtroom observer, had been overheard bragging about helping to “manufacture” a plaintiff verdict through improper contact with jurors. The Mississippi Supreme Court ordered an investigation into the allegations that produced the evidence underlying the court’s decision.

The investigation uncovered evidence during depositions of six attorneys not involved in the case and multiple other witnesses, including the former sheriff of the county in the Mississippi Delta where the case was tried. The court found this testimony and other evidence “overwhelming” that the plaintiffs’ “consultant,” in concert with one of the plaintiffs’ trial lawyers, had improperly influenced the jury pool before trial and tampered with the jury during trial. Witnesses recounted that the “consultant” told them he “knew a family member of one of the jurors” and knew “we [plaintiffs] are going to win.” He bemoaned that they “worked with a juror who couldn’t count” during trial and that what “should have been” a $21million verdict (the exact amount asked for in plaintiffs’ closing argument) wound up “only” being $10 million.

The court found “overwhelming evidence of actual impropriety, which destroys any confidence in the jury verdict.” It further concluded the trial was “permeated by actual deception upon the trial court, which led to plaintiffs obtaining a favorable ruling . . . [and left] an indelible stain on these proceedings.” In ordering a reversal and remand, the court explained that it considered the ultimate sanction of dismissal with prejudice but did not take the action only because there was no evidence that any of the plaintiffs had directly employed the “consultant.”

Keep the Defense Wins Coming!

Please send 250–500 word summaries of your “wins,” including the case name, your firm name, your firm position, city of practice, and email address, in Word format, along with a recent color photo as an attachment (.jpg or .tiff), highest resolution file possible (minimum 300 ppi), to DefenseWins@dri.org. Please note that DRI membership is a prerequisite to be listed in “And the Defense Wins,” and it may take several weeks for The Voice to publish your win.

Almost one year later, the world watched as Derek Chauvin, a former Minneapolis police officer, was tried for the killing of George Floyd. As the trial was occurring, the harassment and killings of Black people and people of color did not end. First, Duante Wright was killed just outside of Minneapolis by a law enforcement officer, not even ten miles from where George Floyd was murdered. In Virginia, U.S. Army Lieutenant Caron Nazario was driving his newly purchased Chevy Tahoe home when two officers pulled him over and harassed him during a traffic stop.

Chauvin’s trial eventually ended with the jury finding him guilty of second-degree murder, third-degree murder, and second-degree manslaughter. For a brief second, we were able to breathe a sigh of relief as a law enforcement officer was finally held accountable for the murder of an unarmed Black person. However, not even half a day passed before another Black person, Mah’khia Bryant, a sixteen-year-old girl, was shot in the chest four times in Columbus, Ohio. Most recently, Andrew Brown was also killed by law enforcement in North Carolina.

While I am relieved by Chauvin’s conviction for George Floyd’s killing, one conviction does not amount to justice for the countless number of Black men and women and people of color who have been killed at the hands of law enforcement. I can go on and on naming the countless number of Black men and women and people of color who have been killed, but one thing is clear: the unjust killings must come to an end. While I am not a mother, I am an aunt. I am a sister-in-law. I am a friend to so many Black men and women and people of color. I often fear whether my friends, brothers-in-law, nephews, and nieces who are full of light and promise will become the next hashtag. Each time I watch the news and witness yet another Black person or other person of color harassed or killed by another law enforcement officer, I feel as though I am living through Groundhog Day. Maybe one day, this country will be able to see the light at the end of the tunnel and overcome the other pandemic.

Ebony S. Morris is an associate attorney in the New Orleans office of Garrison Yount Forte & Mulcahy LLC. Ebony handles all day-to-day aspects of general litigation matters from inception to resolution and takes and defends fact and expert witness depositions in general litigation matters throughout Louisiana. She was recently selected for inclusion in the 2019 Louisiana Super Lawyers “Rising Stars” List.

DRI Announces Annual Law Student Diversity Scholarship Program

Once again in 2021, DRI will award scholarships in the amount of $10,000 each to two successful law student applicants. The recipients will be announced at the DRI Annual Meeting in October. The goal of these scholarships is to provide financial assistance to two, worthy law students from ABA-accredited law schools to promote the DRI Diversity and Inclusion Statement of Principle.

These scholarships are open to rising (2021–2022) second- and third-year African American, Hispanic, Asian, Native American, LGBTQ+, and multiracial students. Incoming second- and third-year female law students are also eligible, regardless of race or ethnicity. Incoming second- and third-year law students who also come from backgrounds that would add to the cause of diversity, regardless of race or gender are eligible to apply. Students who are members of the American Association for Justice (AAJ), law school or law student members of AAJ, or students otherwise affiliated with or employed by AAJ are not eligible for DRI Law Student Diversity Scholarships. To qualify for this scholarship, a candidate must be a full-time student. Evening students who have completed one-third or more of the total credit hours required for a degree by the applicant’s law school also qualify for consideration.

Apply today or send the application to an eligible law student you may know. All applications are due by Wednesday, June 30. Learn more.   

Upcoming DRI Elections

Four Director Elected Nationally seats on the DRI Board of Directors, plus the offices of Second Vice President and Secretary–Treasurer, will be filled at the 2021 DRI Annual Meeting in Boston, October 13–16. To be considered for any position, a DRI member must first file a Declaration of Candidacy form. For more information, please contact Nancy Parz at DRI headquarters: nparz@dri.org or 312.698.6224. Declarations are due by July 1, 2021.

DRI Call for Nominees: Annual Professional Achievement and Service Awards

Do you have a colleague who deserves recognition for his or her professional contributions? DRI's Annual Professional Achievement and Service Awards celebrate and honor outstanding performance by state and local defense organizations, DRI law firms, and individual members, and we are looking for nominees.

These awards aim to recognize individuals for their achievements on behalf of the defense bar and the civil justice system or their involvement in community and public service activities that have a positive effect on society at large. Recognition enhances members’ personal growth and accomplishments, provides us all with role models, and strengthens members’ images in the legal and business communities and with the general public.

Please download a copy of our awards brochure and read how you can nominate a deserving individual, your organization, and its members. We encourage you to submit an entry for each award by July 1, 2021. Winners will be announced at the Celebration of Leadership on Friday, October 15, held in conjunction with DRI’s Annual Meeting in Boston, Massachusetts, from October 13–16, 2021. In addition, DRI will recognize award recipients in The Voice and through press releases to national and local media.