Does Coito Dilute Work Product Privilege In California?

By on June 27, 2012

On June 25, 2012, the California Supreme Court issued its long-awaited decision in Coito v. Superior Court, addressing the issue of whether a party in litigation could rely upon the work product doctrine to withhold witness statements obtained by its attorneys or the identities of persons who had given such statements. 

In summary, while parties in California have long relied upon dicta in the Court of Appeal decision in Nacht v. Lewis for the proposition that such information is protected from disclosure by the work product doctrine, case-by-case determinations may now be required to determine whether a party must provide such information to its adversary in discovery in California state court cases.

 Fortunately for state court judges who will be required to make these case-by-case determinations, Coito is a well-drafted decision that contains an excellent discussion of the policy considerations underlying this privilege. Trial courts that must make discovery decisions concerning the application of the work product privilege, and the litigants who will be required to present their arguments on the subject, have been provided with excellent guidance by the California Supreme Court. In citing the U.S. Supreme Court’s landmark decision in Hickman v. Taylor, the court reaffirms its commitment to the privilege and reminds trial court judges that “discovery was hardly intended to enable a learned profession to perform its functions either without wits or on wits borrowed from the adversary.”  Be that as it may, defense counsel will now be required to conduct discovery battles to maintain the protection of the work product privilege.

The Coito court rejects the dicta in Nacht that provided for an absolute privilege for witness statements, holding instead that witness statements may be entitled to an absolute privilege only under certain circumstances.  The court explains that, “In light of the legislatively declared policy and the legislative history of the work product privilege, we hold that the recorded witness statements are entitled as a matter of law to at least qualified work product protection. The witness statements may be entitled to absolute protection if defendant can show that disclosure would reveal its ‘attorney’s impressions, conclusions, opinions, or legal research or theories.’ (§ 2018.030, subd. (a).)  If not, then the items may be subject to discovery if plaintiff can show that ‘denial of discovery will unfairly prejudice [her] in preparing [her] claim . . . or will result in an injustice.’ (§ 2018.030, subd. (b).)”

As for the identities of persons who provided witness statements to counsel, those will now be easier to obtain in California state court cases.  The Court explained, “As to the identity of witnesses from whom defendant’s counsel has obtained statements, we hold that such information is not automatically entitled as a matter of law to absolute or qualified work product protection. In order to invoke the privilege, defendant must persuade the trial court that disclosure would reveal the attorney’s tactics, impressions, or evaluation of the case (absolute privilege) or would result in opposing counsel taking undue advantage of the attorney’s industry or efforts (qualified privilege).”

This decision may certainly have an impact on litigation strategy in California.  The decision whether to require a party to turn over witness statements obtained by counsel, or disclose the identities of persons who provided statements, will generally be left to the discretion of the judge.   Some judges may be more inclined to require the production of this information than others.  In employment litigation, for example, there is concern in the defense bar that "employee-leaning" judges will automatically order disclosure of statements obtained by the employer’s counsel.

Accordingly, defense counsel will have to give some further thought concerning whether to obtain written statements, mindful that they may potentially have to one day disclose those statements to the opposing party or, at the very least, the identities of the individuals from whom statements were taken. 

This may require an especially important strategic decision in class actions and collective actions, where defendants often obtain a great many written statements from putative class members early in the case for use at a later time.  Should a defendant be concerned that, as a result of Coito, it may be required to turn over witness statements early in the case, thereby educating the plaintiff’s counsel about the defendant’s strategy?  Could this encourage plaintiff’s counsel to contact putative class members who have provided statements to try to get them to recant their statements or to try to stop other putative class members from speaking with defendant’s counsel?  Only time will tell how these scenarios will play out.

 In the final analysis, Whether Coito  properly balances the competing interests of fair disclosure and the protection afforded by the work product privilege will be determined in the years to come. However, if nothing else it clear, it is certain that the decision will generate numerous discovery battles throughout the state over the extent to which the work product privilege should be applied on a case-by-case basis.

Filed under Coito v. Superior Court, Debra Coito, Hickman v. Taylor, Nacht v. Lewis, Privilege, qualified privilege, Superior Court of Stanislaus County Tagged with

Value Assurance Plan Protects Canadian Property Owners

By on June 25, 2012

We have written in the past concerning Value Assurance Plans (or “VAPs”), which should be considered as a significant component of a corporate response to homeowner concerns over property values due to environmental issues. Mass tort diminution of property value litigation often results when panic selling by homeowners drives down property values across an entire community due to the emergence of a perceived environmental risk. The liability exposure in these cases can be enormous.

In essence, a VAP is a contractual promise made to assure homeowners that the equity in their homes will be protected if they sell their homes and realize less than full value from the sale due to an environmental concern. The VAP is designed to reduce panic selling by assuring homeowners that their home equity will be protected if they stay in the community during an extensive remediation.  The world’s largest VAP has been operating successfully for several years in Port Hope, Ontario, which is located on the north shore of Lake Ontario. 

In the 1930’s, a radium manufacturing facility opened in Port Hope, Ontario, which generated uranium as a waste byproduct. After uranium’s critical role in the development of nuclear weapons became understood, the Port Hope operation was purchased by the Canadian government in 1942. Consistent with waste disposal practices at the time, waste from the uranium operation, which contained Radium-226, uranium, arsenic and other contaminants resulting from the refining process, was discarded around the former plant site; swept into Port Hope harbor; disposed of in local dump sites; or distributed throughout the community as fill.

On October 1, 2001, the Canadian government introduced the Port Hope Area Initiative  to address the remediation and long-term management of low-level radioactive waste in the Port Hope area. Because thousands of homeowners reside in and around the proposed waste management facilities, or along the route that would transport waste to the facilities, the Canadian government had the foresight to protect home values by establishing a VAP, which Canada refers to as a Property Value Protection Program or “PVP” The PVP was offered as part of the Port Hope Area Initiative to compensate property owners who suffered financial loss on the sale of their property, loss of rental income or mortgage renewal difficulties as a result of the plans or activities of the Initiative.

Under the PVP, eligible property owners may apply for compensation if they have realized any of three types of financial loss: (1) their property sold for less than its fair market value because of activities relating to the Initiative; (2) their rental property was unable to rent units for fair market value because of the Initiative; or (3) they had difficulty renewing a mortgage at fair market value as a result of the Initiative. The purpose of the PVP is to ensure that anyone selling a property in a defined area would not be financially disadvantaged by the activities of the Port Hope Area Initiative.

As a result of the PVP, real estate within the Port Hope Area Initiative has remained remarkably stable. There was no panic selling by homeowners rushing to get out the door before property values fell precipitously. During the first ten years of the program, some 83 claims were filed, resulting in payments of approximately $2,500,000. Given that some 5,800 properties could potentially be affected by the projects, the Program appears to have been very successful at reasonable cost

Studies have shown that Port Hope and environs is a safe place to live. The radiation levels in Port Hope are reportedly lower than in the average Ontario community and about the same as in Toronto. Nine years of independent public attitude surveys have shown that residents feel well informed and support the project. These surveys show that 80 per cent of residents are confident that the project can be done safely.

According to Judy Herod, who authored an Abstract titled, “Evolution of the Property Value Protection Program – A Study of How a Compensation Plan to Address Project – Related Diminution has Evolved to Meeting Changing Needs,”  since  inception, the PVP Program has continued to build stakeholder confidence by mitigating the risk of economic vulnerability of current and prospective property owners, thereby contributing to stability in the local real estate market. Ms. Herod is the highly regarded Acting Manager, Communications & Stakeholder Relations, for the Port Hope Area Initiative Management Office. 

To be successful, it is vital that a VAP (or PVP) does not take place in a vacuum. At Port Hope, some important early decisions defined the "zone of influence" that was key to establishing homeowner eligibility for the program; determined the scope of benefits that could be applied for; and devised conservative predictions for potential nuisance effects, such as increased noise, dust or traffic within zones established for each, specific remediation activity.  For example, it was estimated that approximately 80,000 to 90,000 trucks transporting waste would travel over the life of the project. 

Increasing awareness of the PVP Program and communicating its requirements to potential claimants were primary communications objections.  Key stakeholders include all owners with the PVP zone and professionals working in the real estate sector. To be successful, all VAPs must incorporate a strong communications component that serves to keep homeowners informed and maintains the transparency of the remediation process. 

 

Filed under Diminution of Property Value, Evolution of the Property Value Protection Program - A Study of How a Compensation Plan to Address P, Judy Herod, Port Hope Area Initiative, Property Value Protection Program, PVP, Value Assurance Plan, VAP Tagged with

Does Wireless Internet In Courthouse Exacerbate Lawyer Abuse?

By on June 14, 2012

Yesterday, we published an article titled  ‘Lawyers’ Use Of Internet To Influence Jurors’  raising the concern that the fairness of jury trials may be jeopardized if jurors can surf the Internet and read misleading or self-serving messages by trial counsel that have been deposited where straying jurors can find them. 

Even if a prospective juror (not yet selected to sit on a particular case) or a sitting juror does not read about the facts underlying a specific case, he or she can still peruse biographical information about the lawyers, their firm’s specialties, featured clients and "war stories," crusades or victories they describe.  For example, if a plaintiff  law firm’s website states that the firm is "dedicated to protecting innocent American consumers from the catastrophic injuries caused by unfeeling, profit-driven drug companies", that is probably not information that a pharmaceutical company defendant in a product liability case would want distributed among its jurors.  Judges need to be particularly diligent that juors do not have access to this kind of extraneous information.

Could the courts do more to prevent this kind of Internet abuse?   "N.M."  wrote me the following  after yesterday’s article appeared:

Definitely a timely topic – I had to go to Essex Co (NJ Superior Ct)  jury selection recently and quite a few potential jurors brought their laptops with them – in fact, wi-fi is offered for those waiting to be sent to court rooms. Very tempting in the midst of voir dire, after the facts of the case have been discussed by the judge, to check the internet during a break to see what information might be available.

Should laptops, iPhones and iPads be permitted in courthouses?  If the courts cannot control what jurors do when they go home for the evening should they at least attempt to prevent jurors from going on-line during jury selection or whenever there is a break in the action during trial?  Internet use by jurors is an enormous potential problem; there needs to be a concerted effort by our judiciary to address it!

Filed under during, Internet, Internet abuse, jurors use of Internet, Litigation Issues and Factors, trial' Tagged with

Lawyers’ Use Of Internet To Influence Jurors

By on June 12, 2012

In an earlier article, we discussed the danger posed to an impartial jury system by the “Googling Juror.” In his article titled “Lawyers’ Use of Internet to Influence Jurors” (New York Law Journal, 6/12/12), Michael Hoenig cautions that “the danger to fair trials posed by Internet-surfing jurors is exacerbated by lawyer ‘advertising’ of their prowess or success on websites, by publishing case-specific information on firm sites or blogs or other Internet outlets, and by skillfully weaving inaccurate, misleading or self-serving messages, and ‘depositing’ them where straying jurors can ‘find’ them.” 

Hoenig concludes that these can be purposeful stratagems or innocent puffing. He points out that despite First Amendment protections, courts can and should restrict prejudicial speech by attorneys. real estate ligation in Nashville cautions that lawyers must be diligent in reviewing whether their adversaries (or agents) might be depositing messages about case facts or party litigants, or extraneous, non-admissible information on websites, blogs or other internet locations with the expectation that a straying juror would find the information. Even if the specific facts of a case at trial are not discussed, prospective or sitting jurors can still peruse the attorney’s website, noting biographical information, the firm’s specialties, featured clients and the “war stories,” crusades or victories many firms describe. Hoenig believes that this information likely will be passed to other jurors.

Lawyers do have First Amendment rights to a wide range of speech but they are also subject to reasonable restrictions as officers of the court. Further, lawyers are bound by ethical rules. Rule 3.6 of the Model Rules of Professional Conduct prohibits an attorney from making an “extrajudicial statement that the lawyer knows or reasonably should know will be disseminated by means of public communication and will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.” Rule 8.4 prohibits “conduct involving dishonesty, fraud, deceit or misrepresentation” and also states, “a lawyer or law firm shall not: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce to do so, or do so through the acts of another.”   The article discusses the facts of some of the cases that are emerging in this important area of the law

Thus, it is essential that trial counsel perform their own internet investigation concerning both the subject matter of their upcoming trials, and their adversaries’ internet materials, to determine whether prejudicial information available to prospective jurors has been posted.

 

Filed under First Amendment, Internet surfing, Lawyers use Internet to influence jurors, Litigation Issues and Factors, Michael Hoenig, Model Rule 3.6, Model Rule 8.4, Model Rules of Professional Conduct, New York Law Journal Tagged with

Daubert On The Defense?

By on June 6, 2012

We discussed in an earlier article how the Reference Manual for Scientific Evidence, published by the Federal Judicial Center, has become an indispensable tool for judges in managing cases involving complex scientific and technical evidence. The manual describes key scientific fields from which legal evidence is typically derived, and judges often refer to the manual to help them better understand and evaluate the relevance, reliability and usefulness of the evidence being proffered. It has been suggested by some practitioners that the Third Edition, published in 2011, retreats from the rigorous Daubert standards set forth in the Second Edition, and thus will assist the plaintiff’s bar.

A distinguished panel comprised of members of the International Association of Defense Counsel (“IADC”) will examine this issue at IADC’s upcoming Annual Meeting in a program titled, “Reference Manual on Scientific Evidence: Take 3.” The moderator of the panel will be Bruce R. Parker, a partner at Venable LLP in Baltimore, Maryland. The panel members will include James F. Rogers, a partner with Nelson Mullins Riley & Scarborough LLP in Columbia, South Carolina; James W. Shelson, a partner with Phelps Dunbar LLP in Jackson, Mississippi; and Jessalyn H. Zeigler, a partner with Bass Berry & Sims PLC in Nashville, Tennessee.

The panelists have jointly authored a paper titled, “Changes in the Reference Manual on Scientific Evidence (3rd Ed.)” (“RMSE Third”). The authors discuss some of the changes to RMSE Third that suggest a weakening of the Daubert standard for the admissibility of expert testimony. In particular, there is significant concern that the First Circuit’s decision in Milward v. Acuity Specialty Products Group, Inc., 693 F.3d 11 (1st Cir. 2011) will undermine Supreme Court precedent requiring that expert testimony be admitted only when it is based on sound science.

The Milward case involved a plaintiff who alleged that his Acute Promyelocytic Leukemia (“APL”), an extremely rare disease, was caused by his exposure to benzene. The key issue on appeal was whether the expert opinion of plaintiff’s toxicology expert, Dr. Martyn Smith, was admissible on the issue of general causation.

In reversing the district court, which had excluded Dr. Smith’s testimony, the First Circuit held that the district court had erred in treating the separate evidentiary components to Dr. Smith’s analysis “atomistically” in “reasoning that because no line of evidence supported a reliable inference of causation, an inference of causation based on the totality of evidence was unreliable.” The First Circuit concluded that Dr. Smith’s “weight of the evidence” approach was acceptable because Dr. Smith reasoned, “to the best explanation for all of the available evidence.”

According to the IADC panel authors, Milward is bad law because: (1) its application of the “weight of the evidence” methodology permits an expert’s opinion to be admitted solely on the basis of the ipse dixit of the expert – i.e., a statement that rests solely on the authority of the expert who made the statement. This is expressly contrary to Joiner  which cautioned that the ipse dixit of the expert does not transform the expert’s opinion into a reliable methodology; (2) reasoning to “the best explanation for all of the evidence available” is not alone sufficient because an expert’s opinion must be excluded when the underlying scientific data do not permit a conclusion beyond hypothesis or speculation; and (3) the First Circuit was wrong to criticize the district court for “atomistically” or, separately, reviewing each evidentiary component of Dr. Smith’s analysis.

Rule 702 requires that expert testimony be “based on sufficient facts or data” and a gatekeeping court must inquire into the data and reasoning underlying an expert’s testimony.  For more information concerning the legal discussion, you can look to the Defendants/Appellees’ Petition for Rehearing and, best of all,  the Petition for a Writ of Certiorari to the US Supreme Court,  which did not accept cert.  This issue may ultimately be taken up by the Supreme Court, however, because the First Circuit’s decision is at odds with the Daubert jurisprudence of all of the other circuit courts of appeal that have considered these issues. 

RMSE Third frames the issue of “atomization” by asking, “When there is a Daubert challenge to an expert, should the court look to all the studies on which the expert relies for their collective effect or should the court examine the reliability of each study independently?” RMSE Third incorrectly suggests that the former approach may be the more appropriate.

Although the “weight of the evidence” approach may be used by regulatory agencies to assess the risk of chemicals, that does not render this approach reliable and relevant under Daubert. It is well known that regulatory agencies will often err on the side of caution without clear scientific evidence, but that Daubert requires that testing and validation occur before evidence is admissible in court.

 

Filed under Bruce R. Parker, Changes in the Reference Manual on Scientific Evidence (3rd Ed.), Daubert v. Merrill Dow Pharmaceuticals, Inc, Electric, Federal Court Litigation, IADC, James F. Rogers, James W. Shelson, Jessalyn H. Zeigler, Joiner', Milward v. Acuity Specialty Products Group, Inc, Reference Manual on Scientific Evidence: Third Edition, RMSE Third Tagged with , ,

No Duty To Disclose To Prospective Homeowners

By on May 22, 2012

What is the duty of a real estate developer to disclose to prospective residential purchasers information about the neighborhood that may adversely impact property values? Apparently none if the developer is not in privity with the homeowners, according to the Eleventh Circuit.

On May 21, 2012, Law 360 reported on the Eleventh Circuit’s decision in Luis Virgilio v. Terrabrook Vista Lakes L.P., et al. , Case No. 11-11027 (5/18/12).  We have discussed in a past article the circumstances under which a commercial  real estate broker may be found have a duty to disclose environmental liabilities to a prospective purchaser.  Here, the court was clearly troubled by the question of how far the developer’s potential liablity to disclose “inside information” would extend and how an obligation to disclose this information could be satisfied..

By way of background, class action plaintiffs purchased their homes from a builder, The Ryland Group, Inc. (“Ryland”), in a subdivision in Vista Lakes, a residential development in Orlando, Florida. Unbeknownst to the Virgilios (and other members of the class), the homes they purchased from Ryland were located adjacent to Pinecastle,  a World War II bombing range that, to this day, remains laden with unexploded bombs, ammunition, ordinance and related chemicals. Once Pinecastle’s existence became public, the homes in the subdivision lost considerable market value and the Virgilios brought this lawsuit to compensate for their loss.

Plaintiffs entered into a $1,200,000 settlement with Ryland and then turned their attention to the four other defendants involved in the development and marketing of the subdivision. However, on the same day that the district court certified the plaintiff class and approved the Ryland settlement, it dismissed plaintiffs’ claims against the remaining defendants as legally insufficient. On appeal, the Eleventh Circuit affirmed the trial court ruling in all respects.

Plaintiffs pursued four legal theories against the developer defendants, all based on their failure to inform plaintiffs about Pinecastle before they purchased their homes. One developer/defendant, Terrabrook, sold Ryland the undeveloped land that became the subdivision. At the time of the sale, Terrabrook informed Ryland of this real estate law firm existence. Terrabrook actively marketed Vista Lakes to prospective buyers and received a commission for each home or lot sold.

Count 1 of the Complaint attributed the defendants’ duty to disclose to the Florida Supreme Court’s landmark decision in Johnson v. Davis, which holds that “when a seller of a home knows the facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer.”

In Johnson v. Davis, the court overturned the old rule that  “where the parties are dealing at arms length and facts lie equally open to both parties, with equal opportunity of examination, mere non-disclosure does not constitute fraudulent concealment.” The Florida Supreme Court concluded, however, that this rule was “not in tune with the times and did not conform with current notions of justice, equity and fair dealing.” Thus, Florida’s high court held that the law required “full disclosure of all material facts” whenever “elementary fair conduct demands it.”

In rejecting plaintiffs’ argument that Johnson v. Davis should be applied to uphold their claims, the Eleventh Circuit found no facts to support the plaintiffs’ conclusory allegation that the defendants were acting as Ryland’s agent in promoting homes in the development. As the Court noted, “Count 1 is missing an essential allegation – the critical element of an agency relationship – that the principal exercised, or had the ability to exercise, control over the agent.”

Count 2 is silent as to the source of the duty, but suggests that it lies in equity since it is a claim for unjust enrichment. Count 2 alleges that because defendants failed to inform plaintiffs about Pinecastle, it would be inequitable for defendants to retain the benefits. Count 3 locates the duty in the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), FLA Stat. §§ 501.201 et seq., asserting that defendants’ failure to inform plaintiffs about Pinecastle constituted a “deceptive, misleading and unfair trade practice.” Count 4 locates the duty to disclose in common law negligence.

The heart of the Eleventh Circuit’s decision is its refusal to extend Johnson v. Davis.  The court found that the case did not apply because: (1) the defendants were not in privity with the buyer or acting as an agent in privity with the buyer (such as the seller’s real estate broker); and (2) there was no allegation in Count 1 that defendants’ “marketing efforts were at the behest or direction of Ryland, that Ryland exercised any control over [the] marketing efforts, or that [defendants] actually listed any of the homes… on behalf of Ryland.”

Applying the same logic to Count 2, the court held that even assuming the plaintiffs conferred a benefit on defendants, Johnson’s duty to disclose did not extend to defendants. Thus, since defendants did not breach a duty to plaintiffs, plaintiffs had not been wronged and defendants were not unjustly enriched. The trial court dismissed Count 3 because the alleged FDUTPA “deceptive or unfair trade practice” was the breach of an affirmative duty of disclosure. Since the Court determined in dismissing Count 1 that there was no such duty, the FDUTPA claim was dismissed as well.

In essence, the Eleventh Circuit found plaintiffs’ “argument – that because defendants developed and marketed Vista Lakes, they had a duty to warn prospective purchasers of Pinecastle’s existence – without merit.”  Rejecting plaintiffs’ logic, the Court observed:

What about those to whom Ryland’s home buyers sold their houses? Would Terrabrook have a duty to them as well? Since Terrabrook was not a party to Ryland’s contracts with the buyers, and thus did not know the buyers’ identities, under Plaintiffs’ approach the only way Defendants could discharge their duty of care would be through marketing: Defendants could not escape liability unless they saturated the market place with the negative information

Would  the case have turned out differently if the developer had prepared brochures that affirmatively misrepresented the environmental condition of the neighborhood?  In granting summary judgment, the district court said that while it was foreseeable that the defendants’ general marketing campaign could lead some members of the public to consider purchasing a home in Vista Lakes, the general marketing had nothing to do with any particular home in Vista Lakes and simply put plaintiffs in face-to-face discussions with Ryland.

For more on the lower court’s decision and a discussion of developments built on former bombing ranges, see Larry Schnapf’s informative discussion titled “Home on the Bombing Range” and his more recent discussion about the Eleventh Circuit’s decision.

.

Filed under Bombing, Deceptive And Unfair Trade Practices, duty to disclose, FDUTPA, Florida Deceptive and Unfair Trade Practices Act, Home on the Bombing Range, Johnson v. Davis, Luis Virgilio v. Terrabrook Vista Lakes L.P." "Eleventh Circuit" Pinecastle, Pinecastle, privity, Range', Real Estate, real estate developer, Theories of Liability Tagged with

Lone Pine Order Ends “No Causation” Hydrofracking Case

By on May 16, 2012

A Lone Pine Order is an innovative judicial case management tool that requires toxic tort plaintiffs to produce credible expert evidence to support their theory of causation (or another key component of plaintiffs’ claim) prior to the commencement of pre-trial discovery. A Lone Pine Order is designed to weed out frivolous claims before defendants must invest hundreds of thousands of dollars in legal fees and incalculable time and effort only to learn prior to trial that plaintiffs cannot establish a prima facie case. Both federal and state court judges have learned by experience that a Lone Pine case management order can end in their infancy baseless cases that would otherwise require an enormous expenditure of judicial time and resources. I have written about the use of Lone Pine Orders both on this blog and in journal articles. 

The most recent successful use of a Lone Pine Order resulted in an order of dismissal in William G. Strudley v. Antero Resources Corporation, et al., a hydro-fracking toxic tort case pending in the District Court for Denver County in Colorado. On May 9, 2012, District Court Judge Ann B. Frick dismissed plaintiffs’ action due to their failure to comply with the court’s Modified Case Management Order (“MCMO”), which had been entered several months earlier. The MCMO required plaintiffs to provide the Court with sworn expert affidavits establishing the identity of the hazardous substances plaintiffs alleged caused their harm; whether these substances could cause the type of diseases and illnesses claimed by plaintiffs (general causation); the dose or quantitative measurement of the concentration, timing and duration of alleged exposure to each substance; an identifiable, medically recognizable diagnosis of the specific disease or illness for which each plaintiff claims medical monitoring is necessary; and a conclusion that each such disease or illness was caused by the alleged exposure (specific causation).

As Judge Frick noted in her decision, the plaintiffs scrambled to provide a creditable response to the MCMO over the next several months. Plaintiffs submitted a jumble of maps, photos, medical records, air and water sampling analysis reports, together with the affidavit of Thomas L. Kurt, M.D., MPH. In a nutshell, the Court found that Dr. Kurt merely opined that further investigation was necessary, but offered no opinion as to whether the purported exposures were a contributing factor to plaintiffs’ alleged injuries or illnesses. Plaintiffs failed to provide any “statement regarding what constitutes dangerous levels of any substance in drinking water or whether any causal link exists between the study’s results and plaintiffs’ alleged injuries.” The Court determined that Dr. Kurt’s Affidavit was wholly lacking in establishing causation and, at times, presented evidence “circumstantially, in direct contradiction to plaintiffs’ allegations.”

In their Complaint, plaintiffs alleged that “environmental contamination and polluting events caused by the conduct and activities of the defendants… caused the release, spills and discharges of combustible gases, hazardous chemicals and industrial wastes from their oil and gas drilling facilities…” According to the petition, the defendants engaged in oil and gas exploration approximately one mile from the plaintiffs’ residence. Plaintiffs alleged that they relied on a groundwater well for “drinking, bathing, cooking, washing and other daily uses,” but that drilling operations had caused various toxic chemicals to contaminate the air and their water well, forcing them to pack up and abandon their home. In addition to personal injuries, they requested that a medical trust fund be established to monitor their medical conditions.

The result achieved in this case was due to excellent legal work by James D. Thompson III at Vinson & Elkins in Houston and Daniel J. Dunn at Hogan Lovells in Denver, who represented Antero.

It is not enough to draft a motion seeking entry of a Lone Pine Order stating, in sum or substance, “how about that Lone Pine Order, judge?” In their memorandum in support of the Lone Pine Order, the Antero lawyers argued: (1) that the facts alleged in plaintiffs’ Complaint were not sufficient for the court or the parties to expend their resources in discovery; (2) that plaintiffs’ Complaint identified no specific exposure or injury; (3) that plaintiffs’ initial disclosures provided no evidence of specific exposure, injury or causation; (4) that independent evidence concerning the well operations demonstrated that there was no factual basis for plaintiffs’ claims; (5) that the court had the authority to enter a Lone Pine Order; and (6) that the Lone Pine Order would in no way prejudice plaintiffs. The defendants successfully argued that any burdens associated with requiring plaintiffs to make a prima facie showing on their claims were outweighed by the benefits:

A Lone Pine order will assist the parties and this Court in efficiently and effectively assessing the merits of plaintiffs’ claims before engaging in costly and time-consuming full discovery and pre-trial procedures. Such an order will promote efficient pre-trial and trial proceedings by focusing whether plaintiffs can produce admissible expert testimony concerning exposure, injury and causation. If plaintiffs cannot produce such discovery, then the resources of the parties and the Court should not be wasted. Dismissal, in that instance, would be appropriate.

Amen!

It is not as if plaintiffs’ counsel did ot have the financial or technical resources to comply with the Lone Pine Order if their clients’ case had merit.  Plaintiffs are represented by Napoli Bern Ripka Shkolnik, LLP, a well-heeled New York plaintiff personal injury firm that had the resources to represent hundreds of plaintiffs in the World Trade Center Disaster Site Litigation and battle Exxon  in the New York City MTBE Litigation.  The Napoli Law Firm has now branched out, according to its website, into the oil and gas exploration field and has conducted  informational meetings with groups of  Colorado residents residing near drilling operations concerning their legal options.

If plaintiffs’ evidence of causation was so lacking in the high-profile Strudley case, why shouldn’t all similar hydrofracking cases be "tested" by Lone Pine?  The alternative is to subject oil and gas industry defendants nationwide to the burden of defending frivolous spare-no-expense WTC Disaster Site-style litigations. These toxic tort cases can go on for years and take on a life of their own. Better for the courts and all the litigants if causation evidence must be demonstrated at the outset of the case rather than at the tail end.   

 

 

Filed under Antero Resources Corporation, Case Management, Daniel J. Dunn, Frick', Hogan Lovells, James D. Thompson III, Lone Pine, Lone Pine Order, Strudley v. Antero, Thomas L. Kurt, Vinson & Elkins Tagged with

Contradictory Testimony No Basis for Denial Of Summary Judgment

By on May 4, 2012

All too often, a defendant in a toxic tort case loses a motion for summary judgment because the court determines that imprecise witness testimony creates a triable issue of fact that warrants denial of the motion. Indeed, it is the rule in California that the task of deciphering the meaning of “ambiguous” witness testimony is a role reserved for the jury. Reid v. Google, Inc. (2010) 50 Cal.4th 512, 541, 113 Cal.Rptr. 3d 327, 235 P.3d.988

Thus, quoting from this oft-cited case, plaintiffs routinely argue that “the task of disambiguating ambiguous utterances is for trial, not for summary judgment.” Other California holdings suggest that an inconsistency in witness testimony does not require that the testimony be disregarded in its entirety; rather, it is for the trier of fact to determine what weight the testimony should be given. Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865.

On May 4, 2012, the Bloomberg BNA Toxic Law Reporter reported on the recent  decision in Davis v. Foster Wheeler Energy Corp., Cal. Ct. App., No. B226089, 4/26/12, where the California Court of Appeal for the Second Appellate District drew a sharp distinction between testimony that was “ambiguous” and testimony that was “internally contradictory.”  In affirming summary judgment, the court found that no triable issue of fact was established where the witness testimony was contradictory. Here are the pertinent facts.

Ronald Davis worked at a chemical plant in Torrance, California in the 1960’s. He later developed mesothelioma, and died in 2009. Among others, the plaintiff sued Foster Wheeler, alleging negligence, strict liability, breach of warranty, and loss of consortium. Foster Wheeler moved for summary judgment, arguing that it did not manufacture, sell, or distribute any asbestos-containing product, and that the decedent was not exposed to asbestos dust by any Foster Wheeler product. The trial court granted summary judgment and plaintiffs appealed.

The plaintiffs argued that there was a triable issue concerning whether Davis was exposed to asbestos dust when Foster Wheeler employees, such a decedent, stripped old asbestos-containing insulation from the outside of boilers during maintenance activity. Key to the plaintiffs’ appeal was the deposition of Claude Chabot, a witness who initially claimed that he observed a maintenance worker stripping insulation wearing a hat with “FW” on the brim. However, in a later deposition, Mr. Chabot testified that he had no information whether any Foster Wheeler personnel removed or installed insulation on the boilers at the plant.

Under these circumstances, the trial court decided that “no reasonable jury considering this opposing testimony would conclude that the [Foster Wheeler] workers are the workers who removed the asbestos insulation around the Foster Wheeler boiler.” The appeals court agreed that Mr. Chabot’s internally contradictory testimony did not establish the existence of a triable issue of fact.

I have not examined whether other jurisdictions draw a similar distinction between “ambiguous” and “contradictory” or “internally inconsistent” testimony, but if they do not, perhaps they should. In many toxic tort cases, defense counsel may be confronted with potentially adverse testimony from a witness who is testifying to recollections that may be decades old. (Did the witness see that FW hat at the plant or at a UCLA football game?)

One school of thought is to leave adverse testimony alone. Pursuant to this view, taking an expanded deposition of plaintiff’s witness would only make the “record” worse. The holding in Davis suggests that this view may be shortsighted. The adverse witness who provides an affidavit to plaintiff’s counsel may be doing so out of sympathy for a co-worker who has died or suffers from a serious illness. A witness’s recollection of events is often different when the witness is deposed, possibly on videotape, in a formal deposition setting. It is possible that the witness, who provided the unhelpful affidavit, may be willing to admit in deposition that his recollection of long past events may be faulty or possibly inaccurate.

Eliciting contradictory testimony from a witness may not necessarily mean that the witness is dishonest or hostile. Rather, it reflects the tendency in all of us to want to be helpful. Foster Wheeler’s counsel skillfully developed inconsistencies in the witness’s testimony and thereby obtained dismissal from the case. There is no reason why “inconsistent” or “internally contradictory” testimony from witnesses, perhaps originally adverse, should not be disregarded by trial courts in other jurisdictions besides California.
 

Filed under Ambiguous Testimony, Asbestos, Bloomberg BNA Toxics Law Reporter, Davis v. Foster Wheeler, internally inconsistent testimony, Mesothelioma, Summary Judgment, triable issue of fact Tagged with

Pitfalls In Proving CERCLA Divisibility Of Harm

By on April 24, 2012

In a stinging decision, the Hon. Lonny R. Suko, a federal district court judge sitting in the Eastern District of Washington, ruled on April 4, 2012, that PRP Teck Cominco Metals, Ltd. failed to prove that contamination at a CERCLA site was divisible and, as a result, will be subject to CERCLA 107 joint and several liability at an upcoming September 2012 bench trial (Pakootas v. Teck Cominco Metals Ltd., E.D. Wash., No. 04-cv-256, 4/4/12).

The Confederated Tribes of the Colville Reservation, and the State of Washington as Plaintiff-Intervenor, filed a CERCLA action against Teck, alleging that the company had discharged slag and other hazardous substances into the Upper Columbia River, a Superfund site (the “UCR Site”) from its lead-zinc smelter across the border in British Columbia.

An earlier Ninth Circuit decision in the case discussed how Teck’s smelter had dumped slag waste into the Columbia River, ten miles north of the border, over several decades of operation, which resulted in pollution downstream in the United States. In 2003, the EPA placed the site on the National Priorities List. Thereafter, EPA issued a unilateral administrative cleanup order, which Teck failed to comply with. Initially, a lawsuit seeking enforcement of the order was brought. The State of Washington intervened in the action and amended its initial complaint to seek future CERCLA response costs and declaratory relief seeking natural resource damages.

A settlement between Teck and EPA followed, pursuant to which EPA withdrew the unilateral administrative cleanup order. Because enforcement of the order was then no longer at issue, there were no longer any pending claims by Plaintiffs Pakootas and Michel. Thus, what is at issue in the upcoming trial are the cost recovery and natural resource damages claims of the Tribes and the State.

Against this procedural backdrop, the motions before Judge Suko were the Tribes’ motion to dismiss Teck’s affirmative defense seeking to apportion liability and the State’s motion for partial summary judgment on Teck’s Divisibility Defense. At the outset, the court provided some helpful definitions of the technical CERCLA terms that would be discussed in the Opinion. For example, the judge explained that divisibility/apportionment is not a defense to liability itself. Rather, it is a judicially created defense to joint and several liability. Although “divisibility” and “apportionment” are terms often used interchangeably, what is potentially divisible is the harm, and if the harm is divisible, what it potentially apportions is liability, assuming a reasonable factual basis for apportionment. 

In opposing the motions, Teck argued that, even assuming it was liable under CERCLA, liability should be several, not joint and several, because the harm at issue is divisible. Pursuant to the Supreme Court’s landmark decision inBurlington Northern and Santa Fe Railway (“BNSF”) case, liability under CERCLA is generally joint and several unless a defendant meets its burden to prove the harm is divisible and capable of apportionment. Under the Restatement (Second) of Torts §433(A), the universal starting point for divisibility of harm analyses is “when two or more persons acting independently cause a distinct or single harm for which there is a reasonable basis for division according to the contribution of each, each is subject to liability only for the portion of the total harm that he has himself caused.” According to the Eighth Circuit’s decision in U.S. v. Hercules, “evidence supporting divisibility must be concrete and specific.”  

At the outset, it appeared that Teck had some probability of defeating the motions on the strength of an impressive array of expert witnesses. One environmental expert, Mark W. Johns, Ph.D., opined that there was no detectable release of hazardous substances from Teck’s barren slag and no evidence that dissolved metals from liquid effluent releases were located at the site. Using three different methodologies to apportion Teck’s liability for the harm at the UCR Site, Dr. Johns argued persuasively that Teck’s share of liability should be nothing or next to nothing 

Unfortunately for Teck, the court concluded that Teck had failed to present sufficient evidence to support its divisibility argument. Critical to the district court’s decision was its analysis of the term “harm.” Teck argued, based upon its reading of the BNSF decision, that the type of harm subject to apportionment was the alleged contamination from the leaching of metals traceable to the leaching of Teck’s slag and effluent. However, the Court ruled this argument missed the mark. The Ninth Circuit’s definition of harm, relied upon by Teck, was “for the purposes of determining divisibility,” not liability in the first instance, according to the district court. The court held that “the harm is the entirety of the contamination in the UCR site and what the Plaintiffs seek are recovery of costs to investigate and cleanup the entirety of that contamination…” The court continued:

"This contamination is not limited to metals which have been released or which threaten to be released from Teck’s slag and/or liquid effluent deposited in the UCR Site. None of Teck’s apportionment theories address the entirety of the contamination. Instead, they begin with the assumption that the only harm at issue is whatever metals were released from Teck’s slag and/or liquid effluent and the same metals which were released from non-Teck sources. This is a fatal flaw. Because Teck has not addressed the relevant harm in the first instance, it has failed to establish as a matter of law that the relevant harm is a single harm divisible in terms of degree".

In other words, Teck’s fatal flaw was in failing to account for all of the harm at the UCR Site. Because it did not do so, it would not prove that the harm it caused was divisible and thereby capable of apportionment.

For the CERCLA cost recovery practitioner, Pakootas makes for important reading, not only because of its cautionary holding, but because of its detailed analysis of other CERCLA cases, including BNSF, in which cases all of the harm at the respective sites was accounted for in determining that divisibility was possible. In short, Teck failed to consider the full range of environmental consequences at the UCR Site and, subject to post-trial appeal, may pay a steep price .
 

Filed under BNSF, Burlington Northern & Santa Fe Railway Co. v. United States, CERCLA and Cost Recovery, CERLCA, Divisibility, Hon. Lonny R. Suko, joint and several liability, Pakootas v. Teck Cominco Metals Ltd, UCR Site, Upper Columbia River Site Tagged with

Hydraulic Fracturing Risks and Opportunities

By on April 19, 2012

On April 18, 2012, Winston & Strawn and the Environmental Law Institute co-hosted an informative seminar on, “Hydraulic Fracturing Risks and Opportunities: Regulator, NGO, Industry and Investor Perspectives,” in New York City. The meeting was expertly chaired by May Wall, a partner in the law firm’s Environmental Law Department in Washington, D.C. The panelists included Kate Sinding, an NRDC Senior Attorney and Deputy Director of NRDC’s New York Urban Program; John Imse, a principal at Environ in Denver, who advises clients in the oil and gas industry; Lawrence A. Wilkinson, an analyst with Standard & Poor’s Oil & Gas Team; and Carol P. Collier, the Executive Director of the Delaware River Basin Commission. All four speakers were knowledgeable, informative and articulate. Unfortunately, there is insufficient space here to summarize all of the speakers’ discussion points.

John Imse emphasized how horizontal drilling evolved from the development of  “game-changing technology,” which has spurred significant changes in the gas exploration industry. As a result of new technology, there may be multiple horizontal wells drilled and developed from a single pad location – four to eight wells from a single drilling pad is not uncommon. Each well may have from as few as four to as many as twenty fracturing intervals. According to Imse, “these are not your wildcat wells of the early twentieth century,” but represent highly sophisticated technology.

Imse also discussed the evolving environmental consciousness of the gas exploration industry. He emphasized that “protective steel casing” and “a good cement job” is critical to a well’s success. Contrasting prior poor practices with current practices, Imse described the construction of drilling pads as “highly engineered sites” with liners and berms for spill control, and structural panels on working surfaces to protect the integrity of the liner. He emphasized the evolving consciousness concerning materials management, including the handling of chemicals in large volume containers; spill containment and secondary containment; and on-site 24/7 spill response.

To date, thirteen states have enacted statues requiring disclosure of fracking chemicals used by industry. These thirteen states account for 90% of current gas drilling, according to Imse. In response to pressure by the public and environmentalists, the additives used in fracking have evolved to “more green and more benign components.” For example, Halliburton is increasingly using guar-based gels and food grade mineral oil carriers, and less diesel for fracking.

There are a number of new web-based resources available to the industry. For example, the University of Colorado Natural Resources Law Center has assembled a compilation of Best Management Practices, which Imse strongly recommends as a reference.

Carol R. Collier, the Executive Director of the Delaware River Basin Commission, discussed the importance of the Delaware River Basin to New York City, which extracts 8.7 billion gallons of water per day. Collier’s “bosses” are the governors of the four states that comprise the Delaware River Basin – Pennsylvania, New Jersey, New York and Delaware. Significant portions of Marcellus Shale underlie portions of the Delaware River Basin. Water withdrawal from the Delaware River Basin is a significant concern. In addition to the 100,000-500,000 gallons of water extracted during the drilling of the well, another 5,000,000 gallons of water is withdrawn during the production life of each well.

Kate Sinding, a Senior Attorney with NRDC, discussed the highly charged political backdrop to the fracking controversy. According to Sinding, experiences in Pennsylvania over the past three to four years have given rise to much of the current environmental debate. Fracking has challenged the long held assumption that natural gas is a more environmentally benign fuel than coal, an assumption that is now coming under fire. Sinding expressed concern about environmental issues that she believed were “not amenable to best practices.” 

 

Filed under Delaware River Water Basin" "horizontal drilling" "Marcellus Shale", Environ, Environmental, Hydraulic Fracking, Institute, Law, NRDC, Oil & Gas Tagged with

← Older posts

Newer posts →