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 NOTE FROM THE EDITOR:
Could the end of the pandemic be near? Well, New York Governor Kathy Hochul has lifted the state's mask mandate on indoor public spaces, meaning New Yorkers no longer are required to wear a mask or show proof of vaccination when going into a restaurant or grocery store. The statewide mask mandate for schools is remaining in place, likely to be lifted in March, and still remains in effect for health care facilities, nursing homes, correctional facilities and public transportation. While the state mandate has been lifted, local governments and private businesses are still allowed to require masks or proof of vaccination if they so desire.
Last month we reported on various pieces of passed and proposed legislation that impact litigation in New York, with the most talked about and controversial being the “Comprehensive Insurance Disclosure Act” (“CIDA”) and the expansion of New York’s “party admission” exception to the rule against hearsay.
There is some good news, at least as it relates to the new insurance disclosure requirements as substantial modifications in the form of Chapter Amendments were introduced and, from what we are hearing, likely to pass. The notable revisions include the following:
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The disclosure requirement would only apply to lawsuits files after 12/31/21 effective date, and not retroactively to pending cases;
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Disclosures of policies or declarations pages would be required within 90 days after answer is filed, rather than 60 days. Declarations pages may suffice if agreed to by plaintiff, but plaintiff would have option to later request the policies;
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Disclosure would no longer require the application to be included;
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Disclosure of contact information for person adjusting the claim would still be required, but only name and email address;
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TPAs would no longer be required to disclose the name of the person to whom they are reporting;
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Disclosure would require provision of the total limits available under the policy after accounting for erosion/offsets;
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The amendments eliminate disclosure of lawsuits that may erode the policy and attorney contact information from such lawsuits;
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The amendments would eliminate attorney fee disclosure that may have eroded the policy limits;
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Instead of a broad “ongoing obligation” to ensure disclosures remain accurate and complete, defendants must make reasonable efforts at the time of the filing of the note of issue, entering into negotiations, or mediation to ensure that information is accurate and complete;
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PIP lawsuits would be expressly excluded.
While these proposed Chapter Amendments are welcome news, unchanged is the need to provide certifications, sworn to by both counsel and the insured, that the coverage information being provided is accurate and complete, and that reasonable efforts have been undertaken, and will be undertaken, to ensure that this information remains accurate and complete. We are closely monitoring the progress of these chapter amendments and will keep everyone apprised of new developments. While the Senate passed the amendment bill by a 60-1 margin, there is now haggling in the Assembly about proposed new (and completely unnecessary) language to more explicitly state that CIDA applies not only to policies issued in New York, but policies issued outside the state as well.
There are other pieces of proposed legislation that are making their way through the legislature that we are closely monitoring, most notably the “Grieving Families Act” (S.74-A/A.6770), which would amend the Wrongful Death Statute codified in the Estates, Powers, and Trust Law, to permit the families of wrongful death victims to recover compensation for their emotional anguish, not just pecuniary loss. The bill has been sent to Judiciary Committee with an important new amendment to extend the statute of limitations for wrongful death from two years to three and a half years from the date of fatality.
The “Adult Survivors Act,” S66, which would implement a one-year lookback window for individuals who were sexually assaulted as adults to file claims against their abusers even if the statute of limitations has already expired, has passed the NYS Senate Judiciary Committee. The bill must still be approved by both the Senate and Assembly, but we are hearing that the new governor may have more of an appetite to see this implemented than the prior administration.
Lastly, the oft-proposed lead-paint exclusion bill, S3079, which seeks to amend the insurance law to prohibit the exclusion of coverage for losses or damages caused by exposure to lead-based paint, is once again percolating and has been referred to the Senate Insurance Committee.
I would like to welcome our newest contributor, Long Island attorney Jesse Siegel, who will be handling all the news that is fit to print on toxic torts, asbestos, and lead paint. Mike Williams provides an update on the Purdue Pharma opioid settlement and bankruptcy litigation, which could have broad implications on other mass torts and child victims act claims. The Second Department does not buy the “casual seller” defense in a product defect claim involving a hoverboard purchased from a television shopping network. The Eastern District fails to cut a failure to warn claim in the context of a table saw injury with alternate theories of causation.
And now for this month’s dad joke:
Do you have a date for Valentine’s Day?
Yes, February 14th.
-VCP
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V. Christopher Potenza ■ Member
Hurwitz & Fine, P.C.
1300 Liberty Building ■ Buffalo, NY 14202
tel (716) 849-8900 ■ cell (716) 523-8941 ■ fax (716) 855-0874
Email: [email protected]
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Don’t forget to subscribe to our other publications:
Coverage Pointers: This twice-monthly electronic newsletter summarizes important insurance law decisions from appellate courts in New York State with the occasional snapshot across borders. Contact Dan Kohane at [email protected] to subscribe.
Employment & Business Litigation Pointers: Employment & Business Litigation Pointers aims to provide our clients and subscribers with timely information and practical, business-oriented solutions to the latest employment and general business litigation developments.
Labor Law Pointers: Hurwitz & Fine, P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. Contact Dave Adams at [email protected] to subscribe.
Medical & Nursing Home Liability Pointers: Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Chris Potenza at [email protected] to subscribe.
Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Contact Jody Briandi at [email protected] to subscribe.
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Manufacturing Defects
By: Brian F. Mark
[email protected]
If you are a parent like me and think hoverboards look dangerous, well, apparently, the courts agree with you. In a claim filed by a mom attempting to ride her daughter’s “self-balancing scooter,” the Second Department affirmed the denial of summary judgment, holding that the defendants failed to establish that the hoverboard was reasonably safe for its intended use. The court did dismiss the manufacturing defect claim, however. Television retailer QVC made the rather dubious argument that it cannot be held strictly liable by claiming it is a “casual seller” of the product. The “casual seller doctrine” insulates from strict products liability the unsophisticated occasional sellers of a product who are not regularly engaged in the business of product sales. The court did not buy this argument in the least.
1/19/2022 Lascala v. QVC, et. al.
Appellate Division, Second Department
Defendants fail to establish that hoverboard was reasonably safe for its intended use.
The plaintiff allegedly was injured when she fell off a self-balancing scooter known as a “hoverboard,” which she had purchased from television retailer QVC. The defendant manufacturer and seller (QVC) were granted for summary judgment in the lower court. The Second Department reversed and re-instated the claims for strict products liability for design defect and failure to warn.
As to the design defect cause of action, the Second Department found that the defendants did not meet their prima facie burden in establishing that the product was reasonably safe for its intended use or that the plaintiff's actions constituted the sole proximate cause of her injuries. The defendants’ expert opined in mere conclusory fashion that the hoverboard was not defectively designed, without providing any explanation of the hoverboard's design, or any discussion of industry standards or costs. Nor did the expert state whether the defendants had received complaints about any of the other hoverboards they had sold. The conclusory affidavit was insufficient to affirmatively demonstrate, prima facie, that the hoverboard was reasonably safe for its intended use. Further, plaintiff’s deposition testimony suggested that she was using the hoverboard in a manner consistent with the product’s instructions. Even if there was culpable conduct attributable to the plaintiff, a jury could nevertheless conclude that the product was so inherently dangerous, relative to its utility, that it should never have found its way into the stream of commerce as packaged and marketed.
As to the failure to warn cause of action, the Second Department also found that the defendants failed to meet their burden of proof in that the defendants’ submissions did not eliminate triable issues of fact as to whether plaintiff’s injury could have been prevented by more prominent or specific warnings regarding the risks and correct means of using the hoverboard to avoid such an injury.
The Second Department did uphold the dismissal of the manufacturing defect claim, finding that defendants met their burden through an expert who examined the product and found that the unit in question performed normally and as expected, with no malfunctioning or evidence of a defect. Further, plaintiff and her daughter both testified that the daughter had used the subject hoverboard previously, and that she had no trouble using it prior to the date of injury. Plaintiffs’ opposition did not establish that the hoverboard did not perform as intended and exclude all other causes for the product's failure that are not attributable to defendants.
QVC further argued that it was merely a “casual seller” that could not be subject to strict liability to the plaintiff. While the court noted that not every seller is subject to strict liability, it appropriately applies to sellers who engage in product sales in the ordinary course of their business. Here, QVC failed to establish, prima facie, that it was only a “casual seller” of the hoverboards with no duty to purchasers.
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Failure to Warn
By: Kara M. Eyre
This month we have an interesting case out of the Eastern District of New York which addresses the interplay of a question of fact on the cause of injury from an alleged defective table saw with the attempted disposition of the failure to warn claim. Luckily, it’s that time of the month again for . . . Lady Facts, a lesser known but nonetheless inspiring fact about women in history, because this case wouldn’t have been possible without Tabitha Babbit, inventor of the circular saw. Ms. Babbit lived in a Shaker community and worked as a weaver. She was troubled watching men struggling to cut wood with a pit saw, which required two users and cut in only one direction. Ms. Babbit attached a circular blade to her spinning wheel and the circular saw was born!
2/2/2022 John McNeil v. Ryobi Technologies, Inc., et al.
United States District Court, Eastern District of New York
District Court declines to dismiss failure to warn claim due to competing theories of causation for table saw injury.
Plaintiff initiated a lawsuit against the manufacturer of a circular table saw, alleging that two loose bolts on a safety device called a “rip fence” caused the wood he was cutting to kickback, resulting in the loss of his index finger. Other pertinent facts include that plaintiff was an experienced operator of home power tools, he had read the section of the manual relating to safety for the saw in question, and he had removed a different safety device called a “blade guard” despite knowing that the manual states that the blade guard should always be used. There were no warnings, either in the safety manual or directly on the product, that the rip fence bolts should be checked prior to use.
Defendant put forth three main arguments in support of its motion for summary judgment on plaintiff’s failure to warn claim, and all were rejected by the District Court. First, the District Court determined that the facts did not, as defendant argued, qualify as a case where a danger was so open and obvious that a manufacturer’s duty to warn is automatically discharged. The Court reasoned that while a table saw blade may be open and obvious, loose bolts, which plaintiff alleges were the proximate cause of his injury, are not. Second, the District Court rejected defendant’s argument that plaintiff was an experienced user of power tools and had actual knowledge of the danger posed by using the table saw without the blade guard, therefore discharging defendant’s duty to warn. The District Court disagreed, finding that this defense depends on defendant’s own theory of causation that the blade guard, and not the loose bolts, caused plaintiff’s injury. The District Court noted that the cause of plaintiff’s injury remained a disputed question of fact. Lastly, the Court disagreed with defendant’s argument that the on-product warnings adequately discharged its duty to warn, as there were no on-product warnings regarding checking the bolts on the rip fence.
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Multidistrict Litigation
By: Michael J. Williams
[email protected]
Welcome to February everyone! With some major holidays behind us, I’ll set aside my dire warnings about fire safety (but, seriously, check your alarms) in favor of a bankruptcy fire sale for opioid assets. How does a Bankruptcy Court faced with nearly 618,000 claims exceeding two trillion dollars fairly distribute a mere $1.8 billion in assets from a closely-held company where family owners legally looted $10.4 billion in judgment-proof equity? As we enjoy Valentine’s Day sweets, the result here was one that the Bankruptcy Judge described as “B-I-T-T-E-R” even while confirming it, only to be reversed by an equally reluctant District Court.
In re: Purdue Pharma L.P., 21 cv 7432 [Master Case], United States Bankruptcy Court for the Southern District of New York
12/16/2021; litigation stay expiring 2/16/2022
A defendant facing ruinous litigation may seek relief through bankruptcy, staying proceedings and reorganizing in a manner permitting claimants to receive its assets. In the 1980s, Congress expanded on this authority in response to asbestos litigation where plaintiffs faced difficulties identifying the exact product or manufacturer that contributed to their mesothelioma injuries decades after exposure. Bankruptcy settlement pools, releasing third party contributors, became an acceptable solution to provide some degree of justice. Since then, third-party contributions and releases have become normalized and routine.
In September 2019, Purdue Pharma declared bankruptcy due to “a veritable tsunami of litigation” resulting from its criminally marketing OxyContin. The resulting opioid epidemic contributed to 247,000 deaths in the United States at an annual economic burden of $53-$72 billion. When filing for bankruptcy, Purdue Pharma reported $1.8 billion in business assets while its owners, the Sackler Family, had distributed to themselves $10.4 billion in the immediately preceding years. The Sacklers, of course, wanted third-party releases absolving themselves of any liability. To buy peace, they offered $4.325 billion.
The experienced Bankruptcy Court, aided by world-class negotiators and a second Bankruptcy Judge, reluctantly confirmed settlement including the third-party releases. The court lamented the laws protecting the Sackler’s judgment-proof funds while recognizing that absent the agreement, due to the United States’ superpriority claim, unsecured creditors such as personal injury plaintiffs would receive nothing and programs countering opioid addiction would go unfunded. In the end, 95% of the aggregated claimants voted to support the settlement.
The Southern District of New York on appeal, in a scholarly 142 page opinion, concluded that the Bankruptcy Code simply does not grant statutory “power to release, on a non-consensual basis, direct/particularized claims asserted by third-parties against non-debtors” outside of asbestos litigation. Congress, it held, reserved for itself the right to expand this power, had not granted it, and the United States Supreme Court had precluded judicial remedies outside of the Bankruptcy Code’s “comprehensive scheme.” As of this writing, renegotiations continue with the current bankruptcy stay expiring on February 16, 2022.
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Toxic Torts, Asbestos, and Lead Paint
By: Jesse L. Siegel
[email protected]
The Long Island office here at Hurwitz & Fine received nearly a foot and a half of snow late last month, but the snow quickly melted, and we are actually expecting record highs this weekend. That is music to my younger son’s ears, as he cannot put down a basketball these days and is convinced he is the 8-year-old version of LeBron James. When should I break the news to him?
With the Super Bowl right around the corner, this month’s quasi-relevant sports fact is pigskin related. Retired football official Ed Hochuli, whose resume included refereeing two Super Bowls, is also a retired attorney who used to practice in Arizona with a specialty in Toxic Torts.
Only one relevant matter this month, with a focus on discovery in a lead paint case. Plaintiff showed a meritorious cause of action along with a reasonable excuse for failing to disclose a treating psychiatrist’s handwritten notes prior to the deposition, as those notes had not transferred to the doctor’s recently implemented electronic health record system.
01/12/2022 C.C. v. Vargas
Appellate Division, Second Department
Conditional preclusion and dismissal not appropriate as plaintiffs in lead paint claim demonstrated a reasonable excuse for failure to provide the doctor’s handwritten notes before the treating psychiatrist's deposition testimony.
In an action for personal injuries of an infant plaintiff due to alleged lead paint contamination at their residence, the Supreme Court issued a conditional order of preclusion requiring that the plaintiffs provide certain psychiatric records to the defendants within 45 days and directed that the deposition of the treating psychiatrist be conducted during that time period. At the deposition, it was discovered that some of the psychiatrist’s handwritten notes had not been provided to the defendants.
The defendants moved for summary judgment on the grounds that the failure to provide those records triggered the conditional order, making it impossible for the plaintiffs to establish their cause of action. The plaintiffs opposed and cross-moved to vacate their default in complying with the conditional order. The infant plaintiff's complete psychiatric records were attached as an exhibit. The plaintiffs' cross motion also included an affirmation of the general counsel for the psychiatric clinic that explained that the psychiatrist's handwritten notes inadvertently had not been produced because they had not been transferred to an electronic health record system to which the clinic had transitioned at around the time of the infant plaintiff’s treatment.
The Court found that plaintiffs had previously demonstrated the existence of a meritorious cause of action irrespective of the records which had inadvertently not been produced, and that there was a reasonable excuse given by general counsel for the failure to produce the complete set of records before the psychiatrist's deposition testimony. As such, the Appellate Division upheld the lower’s court’s decision.
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Hurwitz & Fine, P.C.
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Phone: 716-849-8900, Fax: 716-855-0874
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