11/19/2018

CLM National: November 2018

News and verdicts that affect you from across the country

By Phil Gusman

The Monsanto verdict is upheld in California, but punitive damages are slashed; changes to Florida’s Statute of Repose benefit general contractors, and, in New York, a court of appeals decision on partial summary judgment changes the landscape in the state.

Wyoming

AG Files Opioid Suit Against Purdue Pharma

Wyoming has become the latest in a growing number of states and local governments filing opioid-related lawsuits against manufacturers, distributors, and retailers. The Wyoming complaint, filed by the state’s attorney general, Peter Michael, against Purdue Pharma, which makes OxyContin, alleges that defendants engaged in an “unprecedented and multi-faceted promotional and marketing campaign to remove the medical community’s reluctance to prescribe opioids outside of cancer-related pain, end-of-life pains, and acute, short-term pain.” It says defendants spread misinformation through direct and indirect promotional tools about the drugs. Among the alleged misdirection and misrepresentations, the suit says Purdue Pharma “spread the idea that pain was vastly undertreated,” identified pro-opioid doctors it funded as “key opinion leaders,” overstated the benefits of opioids while downplaying the risks, misrepresented addiction and abuse risks, and targeted naive and elderly patients.—From Managing Editor Phil Gusman

California

Monsanto Verdict Upheld, Punitive Damages Slashed

A judge upheld the verdict against Monsanto over whether its weed killer was a substantial factor in causing plaintiff Dewayne Johnson’s cancer, but punitive damages were cut from $250 million to $39 million. Judge Suzanne Bolanos, in San Francisco Superior Court, said, “The punitive damages award must be constitutionally reduced to the maximum allowed by due process in this case—$39,253,209.35—equal to the amount of compensatory damages awarded by the jury based on its findings of harm to the plaintiff.” Total damages in the case, Dewayne Johnson v. Monsanto Company, now stand at $78 million instead of $289 million. Monsanto had sought a judgment notwithstanding the verdict or a new trial, but Bolanos ruled there was no legal basis to disturb the jury’s determination that Johnson’s exposure to glyphosate from weed killers he used was a substantial factor in causing his non-Hodgkin’s lymphoma. News reports say Monsanto still plans to appeal the verdict.—From Managing Editor Phil Gusman

Ohio

Faulty Workmanship is ‘Foreseeable Occurrence’

In Ohio Northern University v. Charles Construction Services, the Ohio Supreme court found that the general contractor’s CGL policy did not cover claims for property damage caused by a subcontractor’s faulty work because it is not an occurrence under the policy since it was not fortuitous. In 2012, the court found that there was no occurrence under a CGL policy for faulty workmanship by the general contractor in Westfield Insurance Co. v. Custom Agri Sys. Inc. The court applied that reasoning in this case, stating that the key issue is whether the contractor controlled the process leading to the damages and whether the damages were anticipated. The court concluded that claims of faulty workmanship are not claims for property damage caused by an occurrence under the CGL policy, noting that “faulty workmanship is not an accident; instead it is a foreseeable occurrence.”—From CLM Member Patricia J. Trombetta, Esq

New York

Partial Summary Judgment Ruling Changes Landscape

The New York State Court of Appeals in Rodriguez v. City of New York issued a decision that will have far-reaching negative consequences for insurers and their clients in the state. In a radical departure from long established precedent, the court held that tort plaintiffs that move for partial summary judgment on liability need no longer establish their freedom from comparative fault. The court examined the defense of comparative negligence and concluded that it “is not a defense to the cause of action of negligence, because it is not a defense to any element (duty, breach, causation) of plaintiff’s prima facie cause of action for negligence, and, as CPLR 1411 plainly states, is not a bar to plaintiff’s recovery, but rather a diminishment of the amount of damages.” The practical effect of this ruling is that, where a plaintiff has obtained partial summary judgment on liability and comparative negligence is still at issue, defense counsel will be in the unfamiliar position of affirmatively trying a case.—From CLM Member Claire Rush

Florida

Statute of Repose Change Favors GCs

Recognizing the latent ambiguity that has plagued Florida’s Statute of Repose for years, the Florida legislature recently removed uncertainty for the overall benefit of general contractors. Fla. Stat. § 95.11(3)(c) mandates that “[a]n action founded on the design, planning, or construction of an improvement to real property…must be commenced within 10 years after the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.” But it failed to define what “completion of the contract” meant. The latest version says, “Completion of the contract means the later of the date of final performance of all the contracted services or the date that final payment for such services becomes due without regard to the date final payment is made.” —From CLM Member Chance Arias

Delaware

Judge Rejects Goldman Sachs Settlement

A judge has rejected a settlement proposal in a shareholder suit, Stein v. Blankfein et al., against certain Goldman Sachs directors. The lawsuit involved direct claims and derivative claims on behalf of the company against the director defendants, alleging they excessively compensated themselves and did not disclose relevant information when issuing stock and cash incentive awards. In the settlement, defendants agreed the company would make relevant disclosures, continue current director compensation practices for three years, and pay attorney’s fees. The judge said that, under the settlement, the defendants would be released of the monetary claims against them while giving up nothing themselves, instead causing the company to take or refrain from certain actions. The judge also said the release would prevent similar claims from being litigated by anyone else. “It is true that no one else has stepped forward to litigate these derivative claims. However, the release will prevent the claims from ever being litigated,” stated the judge.—From Managing Editor Phil Gusman

 



Phil Gusman is managing editor of CLM magazine, a publication of the CLM. He can be reached at phil.gusman@theclm.org.

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