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Quaere, and purposely not decided, whether the reduction in tariff rate provided by § 2 of the Treaty with Cuba of 1903 is limited to rate of duty in general tariff act and does not apply to special rates under special agreement with other countries. Whitney v. Robertson, 124 U. S. 190.
decisions of this Court in the Insular Cases to the effect that Porto Rico and the Philippine Islands were not foreign countries, and within the meaning of that treaty, the Philippines are not a foreign country or another country, and the reduction of tariff on articles imported from Cuba are not to be based on tariff rates on the same articles brought from the Philippine Islands.
In the absence of some qualifying phrase, the word "country" in the revenue laws of the United States embrace all provinces of a state, no matter how widely separated, and the Philippines are a part of the United States within the meaning of the Treaty with Cuba of 1903.
The duties imposed and collected on articles coming into the United States from the Philippine Islands are not covered into the Treasury of the United States, but are used and expended solely for the use and government of those Islands, and are not to be regarded as duties on imports from foreign countries within the meaning of the Treaty with Cuba of 1903.
The word "imports" is the correlative of the word "exports," and preferential rates granted to Cuba under the treaty of 1903 relate only to duties on imports from countries foreign to the United States.
The provisions of Art. VIII of the Treaty with Cuba of 1903 will not be construed so as to give that country advantages over shipments coming into the United States from a part of its own territory.
157 F. 140 affirmed on the above points.
This case raises the question as to whether Cuban imports are entitled to a reduction of twenty percent upon the rates charged on goods coming from the Philippine Islands, or only twenty percent upon the regular tariff rates on goods imported from foreign countries.
The Tariff Act of July 24, 1897, lays a duty on cigars of $4.50 per pound and twenty-five percent ad valorem.
product of the Philippine Archipelago, coming into the United States from the Philippine Archipelago, there shall be levied, collected, and paid only seventy-five percentum of the rates of duty aforesaid. . . . All duties and taxes collected in the United States upon articles coming from the Philippine Archipelago . . . shall not be covered into the general fund of the Treasury of the United States, but shall be held as a separate fund, and paid into the Treasury of the Philippine Islands, to be used and expended for the government and benefit of said islands."
32 Stat. 54, 5 Fed.Stat.Ann. 716.
"during the term of this convention, all articles of merchandise . . . being the product of the soil or industry of the Republic of Cuba, imported into the United States shall be admitted at a reduction of twenty percentum of the rates of duty thereon, as provided by the tariff Act of the United States approved July 24, 1897, or as may be provided by any tariff law of the United States subsequently enacted."
"the rates of duty herein granted by the United States to the Republic of Cuba are and shall continue during the term of this convention preferential in respect to all like imports from other countries, and, in return for said preferential rates of duty granted to the Republic of Cuba by the United States, it is agreed that the concession herein granted on the part of the said Republic of Cuba to the products of the United States shall likewise be, and shall continue, during the term of this convention, preferential in respect to all like imports from other countries."
pay a duty twenty percent less than that collected on tobacco coming into the United States from Philippine Islands, which paid seventy-five percent of the regular rate under the Tariff Act of July, 1897. He also claimed that he should not be required to pay twenty percent less than the regular tariff on alcohol, but twenty percent less than special rates allowed on importations of alcohol from France, Germany, Italy, and Portugal.
His claim being disallowed, he paid, under protest, a duty of twenty percent less than the tariff rate on cigars and alcohol. On a hearing by the Board of Appraisers, his protest was overruled. That judgment was affirmed by the circuit court (157 F. 140), and the case was brought here.
United States at a reduction of twenty percent of the rates of duty in the tariff of 1897, or tariff laws subsequently enacted. There is much force in the suggestion that the reduction is limited to the rates of duty in general tariff acts, and does not apply to special rates under special agreements with other countries. Whitney v. Robertson, 124 U. S. 190. This point, however, we purposely leave open, and limit our consideration to the principal question discussed in the brief, whether the Philippine Islands are "another country," within the meaning of the eighth article of the Cuban treaty, providing that the rates therein granted shall continue "preferential in respect to all like imports from other countries."
"the theory that a country remains foreign with respect to the tariff laws, until Congress has acted by embracing it within the customs union, presupposes that a country may be domestic for one purpose and foreign for another."
That case and De Lima v. Bidwell, 182 U. S. 1; United States v. Heinszen, 206 U. S. 370; Dooley v. United States, 183 U. S. 151, show that, notwithstanding their geographical remoteness, the Philippines are not a foreign country, and, if so, not "another country" within the meaning of the Cuban treaty.
the possessions of a foreign state, however widely separated, which are subject to the same supreme executive and legislative control."
Stairs v. Peaslee, 18 How. 521, 59 U. S. 526. If, therefore, in our revenue laws, a colony is treated as a part of the country to which it belongs, the Philippine Islands must be treated as a part of this nation, and not as another country. It must be presumed that the words "other country" in the Cuban treaty were used according to their known and established interpretation, ibid., and did not refer to charges on shipments from territory belonging to the United States. That they were not so regarded appears from the language of the Act of March 8, 1902, 32 Stat. 54, c. 140, which studiously avoids using the words "imports" and enacts that, upon articles "coming into the United States from the Philippine Archipelago," there shall be levied only seventy-five percent of the rates of duty imposed on like articles imported from foreign countries. These duties, when collected, are not covered into the Treasury of the United States, but are to be used and expended solely for the use and government of the Philippine Islands.
But it is argued that, even if the United States understood the Philippine Islands to be a part of this country, Cuba could not be expected to understand that the words "other countries" did not include the Philippines, if a duty was in fact charged on goods coming from those islands.
-- on imports -- from countries which are foreign to the United States. Both in the light of our own legislation and in view of the generally accepted interpretation of the word "imports," the eighth article of the treaty cannot be construed to have been intended to give to Cuba an advantage over shipments of merchandise coming into the United States from a part of its own territory, where the collections were in part made as a means for raising revenue for the support of the government of the Philippine Islands. Cuba was given a preferential of twenty percent over tariff rates on imports from countries which are foreign to the United States.

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N. Varela singled to left field.
V. Alvarran reached on a fielder's choice; N. Varela advanced to second on a throwing error by p.
M. Walton singled through the left side, RBI; V. Alvarran advanced to third; N. Varela scored, unearned.
J. Gellatly struck out; M. Walton advanced to second on the throw; V. Alvarran stole home.
V. Garza singled to left field; S. Anguiano advanced to second.
K. Williamso doubled to left field, RBI; V. Garza advanced to third; S. Anguiano scored.
K. Lilavois doubled to right field, RBI; K. Williamso scored.
K. Lilavois advanced to third.
A. Mendez reached first on a fielding error by lf; S. Rengifo advanced to third; K. Lilavois scored, unearned.
A. Haro pinch ran for L. Vasquez.
S. Rengifo singled; A. Haro advanced to second.
A. Mendez walked; S. Rengifo advanced to second; A. Haro advanced to third.
L. Vasquez pinch ran for A. Haro.
N. Gonzalez reached first on a fielding error by ss.
S. Anguiano singled through the left side; N. Gonzalez advanced to second.
S. Anguiano advanced to second on a passed ball; N. Gonzalez advanced to third.
V. Garza doubled to right center, RBI; S. Anguiano advanced to third; N. Gonzalez scored, unearned.
K. Williamso singled, advanced to second on the throw, 2 RBI; V. Garza scored; S. Anguiano scored.
L. Vasquez homered to left field, 2 RBI; K. Williamso scored.
A. Mendez homered to right field, RBI.
E. George to 1b for M. Walton.
H. Williams pinch hit for D. Guzman.
J. Alcala pinch hit for N. Gonzalez.
J. Alcala reached first on an error by 1b; H. Williams advanced to second.
H. Williams advanced to third.
C. Greene pinch hit for S. Anguiano.
J. Alcala advanced to second; H. Williams scored on a wild pitch, unearned.
S. Anguiano to ss for C. Greene.
J. Avilla to c for V. Garza.
C. Hernandez to rf for L. Vasquez.
/ to rf for M. Mattocks.
M. Mattocks pinch ran for K. Tatman.
A. Maher singled to pitcher; M. Mattocks advanced to second.
N. Varela reached on a fielder's choice; A. Maher advanced to second on the throw; M. Mattocks out at third 3b unassisted.

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FREDERIC W. SLATER vs. MARY P. EASTER.
The plaintiff brought this bill in equity seeking specific performance of a purchase option in a lease of real estate which, by its terms, was to be exercised "at any time during the term of this lease." The term of the lease was for one year "and continuing in full force and effect after the above term from year to year until . . . [terminated by either party on or before the first day of January in any year]." On December 27, 1972, the lessor gave notice that the lease would terminate on January 31, 1973. The plaintiff-lessee exercised the option on January 12. 1. The trial judge correctly ruled that the option could be exercised at any time while the lease was in effect and not just during the first year of the lease, as contended by the defendant. We decline to follow the case of Estfan v. Hawkes, 166 Kan. 712 (1949) (option in lease extinguished by notice of termination), principally relied on by the defendant. 2. The judge found that: the plaintiff gave written notice to the defendant of the exercise of the option; the defendant said she would not sell at the option price and demanded a greater amount; the plaintiff gave written notice that he would be at a named bank at 10:00 A.M. on January 31, 1973, prepared to purchase the property; the plaintiff was at the appointed place at the designated time and was ready, able, and willing to buy the property; the defendant was not there. Those findings were supported by the evidence. The judge's ruling that there was a valid exercise of the option was correct. See Hurd v. Cormier, 358 Mass. 736, 738-739 (1971). 3. The contention on the remaining issue raised by the defendant amounts to nothing more than an unsupported assertion that it would be "highly inequitable to insist that a house be sold in 1973 at a price the parties adopted as fair in 1967," and cannot be considered to be argument within the meaning of Lolos v. Berlin, 338 Mass. 10, 13-14 (1958) and Hathaway v. Hathaway, ante, 727 (1975).
STRUCTURAL SYSTEMS, INC. vs. DAVID SIEGEL (and a companion case).
to produce or request made for the originals. Siegel also asserts that the testimony of Structural's president about certain deliveries of steel should have been excluded because of the president's lack of personal knowledge about the deliveries. Since nothing to the contrary appears in the bill of exceptions, the admission of the invoices implies the finding, warranted by the evidence, of facts prerequisite to their admission. G. L. c. 233, Section 78. Taylor v. Harrington, 243 Mass. 210, 213 (1922). Chadwick & Carr Co. v. Smith, 293 Mass. 293, 294, 295 (1936). See Milham v. Mitrano, Inc. ante, 73, 75 (1975). Siegel also contends that the judge erred in ruling that the terms and conditions on the reverse side of the contract were incorporated therein by specific reference on the face of the contract. This contention falls short of argument. Chronopoulos v. Gil Wyner Co. Inc. 334 Mass. 593, 598 (1956). In any event, the judge's ruling was correct. There was no ambiguity in the contract and no inconsistency between the printed and the typed terms. These terms were properly construed together. Malden Knitting Mills v. U.S. Rubber Co. 301 Mass. 229, 232 (1938). Siegel's first two requests for instructions were properly refused for to grant them would have left the construction of the contract for the jury. O'Brien v. Boston & Maine R.R. 325 Mass. 451, 454-455 (1950). Corbett v. Salusti, 330 Mass. 273, 276 (1953). Industrial Engr. & Metal Fabricators, Inc. v. Fontaine Bros. 2 Mass. App. Ct. 695, 697 (1974), and cases cited. His third request is not properly argued and brings nothing before us. His ninth request dealing with the evidentiary limitation of the auditor's report was properly refused. Siegel's remaining contentions, all of which deal with the law of damages in his action against Structural, are based upon the judge's denial of requested instructions numbered 4, 5, 7, 8, 10 and 11, and his giving of others which Siegel claims were erroneous. We need not consider them because they relate exclusively to issues rendered immaterial by the jury's verdicts in favor of Structural. Cunningham v. Parks, 97 Mass. 172, 175 (1867). Gentile v. Boston Elevated Ry. 217 Mass. 113, 115 (1914).

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The Fifth Circuit vacated and remanded the district court's conclusion that the insurer was not obligated to defend or indemnify an additional insured after sued by a person allegedly injured in the insured's casino when falling off a stool. See Barden Mississippi Gaming LLC v. Great Northern Ins. Co., No. 08-60521, 2009 U.S. App. LEXIS 15861 (5th Cir. July 16, 2009).
Before the accident, Barden, the additional insured, had sued the manufacturer of the stools. The matter settled when the manufacturer agreed to repair 100 of the 800 stools. As to the remaining 700 stools, the manufacturer agreed to name Barden as an additional insured in its liability policies. The settlement incorporated a Certificate of Insurance, which named Barden as an additional insured, but only with respect to its liability for bodily injury caused by the sole negligence of the manufacturer.
In June 2004, Barden and the manufacturer were sued for personal injuries allegedly caused when the plaintiff fell from one of the stools. Barden requested the manufacturer's insurer, Great Northern, to defend and indemnify. Great Northern refused coverage.
Barden sued Great Northern. The district court granted summary judgment to Great Northern, finding no genuine issue of material fact existed as to whether Great Northern had met its obligations to Barden.
The Fifth Circuit agreed the policy unambiguously limited the duty to defend and indemnify to claims involving the "sole negligence " of the manufacturer based on the language of the settlement agreement and the Certificate of Insurance. The district court's determination that the undisputed facts showed that the manufacturer was not solely negligent in the Baier case was premature, however. Until the underlying case was resolved, the court would not know whether the manufacturer was solely negligent. The need for a defense arose long before the precise allocation of liability could be determined at trial. The manufacturer could be found 100% negligent, meaning the policy arguably covered the claim as alleged in the underlying complaint. Therefore, the duty to defend attached.
The duty to indemnify could only attach once the manufacturer was ultimately found 100% negligent. Therefore, no determination could be made on the duty to indemnify until the conclusion of the Baier case.
In Cecilia Schwaber Trust Two v. Hartford Accident and Indemn. Co., No. JFM-06-0956, 2009 U.S. Dist. LEXIS 59788 (D. Md. July 14, 2009), Hartford unsuccessfully moved to dispose of the insured's claim for failure to act in good faith.
Hartford's policy covered the insured's warehouse for the period March 1, 2002, through March 1, 2003. In February 2003, a large snowstorm caused snow and ice to accumulate on the roof. In March 2003, the roof sprung a series of leaks. Hartford initially denied the claim, stating the damage was excluded based on faulty workmanship, maintenance, and wear and tear. Later, Hartford agreed that approximately five percent of the loss was covered.
The insured sued and Hartford moved to dismiss the good faith claim. A new Maryland statute provided the insured could recover expenses and litigation costs in an action for coverage under a policy if it could be shown "the insurer failed to act in good faith." "Good faith" was defined as making "an informed judgment based on honesty and diligence supported by evidence the insurer knew or should have known at the time the insurer made a decision on a claim."
Despite the language of the statute, Hartford argued the "fairly debatable" standard should be adopted. Under this standard, where a claim was not fairly debatable, an insurer's refusal to pay would be bad faith. The court determined, however, that the fairly debatable standard did not comport with the language of the Maryland statute. Moreover, the claim here was for failure to act in "good faith," which the Maryland courts had indicated was different from an action for bad faith. Therefore, it would be inappropriate to apply the "fairly debatable" standard.
Hartford further argued the new statute could not be applied retroactively. The court disagreed, however, because the legislature intended to give the statute retroactive effect.
In East Texas Medical Ctr. Regional Health Sys. v. Lexington Ins. Co., No. 07-40904 (5th Cir. July 10, 2009) [here], the Fifth Circuit determined Lexington received proper notice from the insured of a claim by a computer-generated loss run.
Lexington's claims-made medical malpractice policy ran from June 8, 2002, to June 8, 2003. The policy provided excess liability coverage to the Medical Center, covering claims above a self-insured retention of $2 million per claim. Under the policy, the Medical Center had discretion to resolve any claim within its $2 million retention. If the Medical Center wanted coverage, it was required to provide "written notice" to Lexington of medical incidents, claims, and lawsuits.
In March 2003, the Medical Center received a medical malpractice claim on behalf of David Wayne Cornelius. The letter indicated that Cornelius had suffered unspecified personal injuries at the Medical Center. In April 2003, the Medical Center entered information about the Cornelius claim on a computer-generated spreadsheet, known as a "loss run." At the end of the policy period, the loss run remained the only notice of the Cornelius claim given Lexington. There was evidence that Lexington previously acknowledged receipt of three other claims submitted on loss runs.
On May 27, 2003, Cornelius filed a medical malpractice suit against the Medical Center. The policy period expired on June 8, 2003, shortly after the Medical Center filed its answer. Not until depositions were taken in the Cornelius suit in December 2003 did the Medical Center realize the claim was likely to exceed the $2 million self-insured retention. In January 2004, the Medical Center gave its first written notice to Lexington of the Cornelius lawsuit. Lexington denied the claim due to the Medical Center's late notice.
At trial, a jury returned a verdict in favor of the Medical Center and awarded $1.7 million in damages. The district court, however, granted Lexington's motion for judgment as a matter of law due to lack of sufficient evidence.
On appeal, the Fifth Circuit vacated and remanded. First, the Fifth Circuit agreed with the jury's determination that the loss runs provided adequate notice. Of significance were Lexington's letters accepting loss runs as notice of claims in prior cases.
Next, the Fifth Circuit ruled that the policy required separate notice of claim and of suit. The Medical Center was obligated to notify Lexington of the claim in March 2003, and then again report the filing of the lawsuit in May. Because notice of the suit was required, notification seven months after suit was filed was not given "as soon as practicable," as required by the policy. Nevertheless, on remand, Lexington had to show prejudice as a result of the Medical Center's failure to send notification as soon as practicable.
Finally, the district court found that Lexington waived the entitlement of immediate receipt of the suit papers as required by the policy. The Fifth Circuit disagreed, finding there was no waiver, but Lexington would still have to show it was prejudiced by the Medical Center's failure to provide proper notice.
The "insured versus insured" exclusion in a Directors and Officers Liability policy was at issue in Biltmore Assoc., LLC v. Twin City Fire Ins. Co., No. 06-16417, 2009 U.S. LEXIS 15322 (9th Cir. July 11, 2009).
The policy named Visitalk.com, Inc. and its directors and officers as insureds, and promised to pay losses that the insureds became liable to pay as a result of covered claims. Under the "insured versus insured" exclusion, there was no liability coverage if Visitalk sued its directors or officers. Specifically, there was no coverage for loss "in connection with any Claim made against the Directors and Officers . . . brought or maintained by or on behalf of an Insured in any capacity."
Visitalk filed a chapter 11 bankruptcy petition. As a "debtor and debtor in possession," Visitalk sued its discharged officers and directors for breach of their fiduciary duties, including looting of the company. Twin City, the insurer, refused to cover the claims.
In its reorganization plan, Visitalk assigned its claims against the directors and officers to a trust established for its creditors, with Biltmore named as trustee. Biltmore settled with four directors and officers for $175 million. The four directors and officers then assigned to the trust their rights against the liability insurers. Biltmore sued Twin City, but the suit was dismissed by the district court.
The Ninth Circuit affirmed. Biltmore argued the claim against directors and officers was on behalf of the creditors and brought by the creditors' trustee. Therefore, it was not brought or maintained on behalf of "an Insured." The Ninth Circuit disagreed. The insured versus insured exclusion barred coverage for Biltmore's claims because a post-bankruptcy debtor in possession acts in the same capacity as the pre-bankruptcy debtor for the purpose of directors and officers liability insurance. Biltmore also argued that Visitalk, the chapter 11 debtor in possession that brought the underlying suit, was not the same entity as Visitalk, the insured corporation. Again disagreeing, the Ninth Circuit determined the prefiling company and the company as debtor in possession in chapter 11 were the same entity.
No Hawai`i appellate court has ever interpreted the meaning of the CGL policy's pollution exclusion. The Ninth Circuit recently issued an Order certifying a question to the the Hawai`i Supreme Court regarding its interpretation of the pollution exclusion. See Apana v. TIG Ins. Co., No. 08-15369 (9th Cir. July 15, 2009) [here].
The underlying case involved an insured plumber who was called upon by Walmart to service a clogged floor drain. An alleged "strong drain cleaner" was used, emitting "noxious fumes" within the store. A Walmart employee breathed in the fumes and left the store bleeding from her nose and mouth. The employee sued the plumber.
The insured tendered the defense to TIG. TIG rejected the claim based on the policy's Total Pollution Exclusion. The employee and insured went to arbitration, where the employee was awarded $87,770.27 in damages. The insured plumber then assigned his rights under the policy to the employee.
The policy excluded coverage for bodily injury resulting from the "discharge, dispersal, seepage, migration, release or escape" of "any solid liquid, gaseous or thermal irritant or contaminant, including smoke vapor, soot fumes, acids, alkalis, chemicals and waste." The district court held TIG had no duty to indemnify but did have a duty to defend. Both parties appealed.
The Ninth Circuit noted there was a split of authority nationwide on the meaning of the pollution exclusion. On one side, courts applied the exclusion literally because they found their terms to be clear and ambiguous. On the other side, courts limited the exclusion to situations involving traditional environmental pollution, either because they found the terms of the exclusion to be ambiguous or because the exclusion contradicted policyholders' reasonable expectations.
Hawai`i's case law did not indicate a preference for either mode of analysis. Some Hawai`i cases enforced a lay person's reasonable expectations, even if "painstaking study" of the pollution exclusion would require a different result. See, e.g., Del Monte Fresh Produce (Hawaii), Inc. v. Fireman's Fund Ins. Co., 183 P.3d 734, 745 (2007). Other cases indicated Hawai`i courts might not apply the policyholder's reasonable expectations to the total pollution exclusion because its terms are unambiguous. See, e.g., Dairy Rd. Partners v. Island Ins. Co., 992 P.2d 93, 106 (2000).
Does a total pollution exclusion provision in a standard commercial general liability insurance policy apply to localized uses of toxic substances in the ordinary course of business (such as when a plumber uses chemicals to open a clogged drain and an employee working nearby inhales the fumes and suffers injuries, or is it limited to situations that a reasonable layperson would consider traditional environmental pollution?
The Insurance Coverage Group of the Hawai`i State Bar Association recently met with Hawai`i Insurance Commissioner, J. P. Schmidt. The Commissioner gave his insight on the state of the Insurance industry on both the mainland and in Hawai`i.
At the national level, the Commissioner reported there are several bills before Congress to federalize the insurance industry. The Commissioner reported that Hawai`i is opposed to federal regulation of the industry, with the exception of reinsurance. Currently, insurance companies are regulated by 50 different state regulators. The Commissioner felt that given the current economic crises, state regulation of the insurance industry is working well. State commissioners work together on issues of common interest through the National Association of Insurance Commissioners. This Association has worked hard to develop a working relationship with Congress.
Turning to Hawai`i, the Commissioner believes insurance companies are in good shape and competition is thriving. The problem areas are commercial liability, especially construction and medical malpractice because no insurers providemalpractice coverage for hospitals. Further, health insurance remains a challenge as the two largest insurers, Hawaii Medical Service Association and Kaiser Permanente, control about 85 per cent of the market.
The Commissioner believes auto insurance in Hawai`i is competitive and the most profitable in the nation. For workers compensation, Hawai`i has enjoyed one of the largest reductions in premium rates in the country. There has been a reduction in premiums for life insurance. The Commissioner has had to revoke licenses, however, from life insurance agents who have taken advantage of seniors.
Regarding hurricane insurance, a number of new companies have entered the market. A hurricane insurer needs significant capital that may be due suddenly in the event of a catastrophic hurricane. Three insurers were approved to issue hurricane policies in Hawai`i a couple of years ago; subsequently, three more entered; and last year four new hurricane insurers came on board. Since meeting with our group, the Commissioner announced that Universal Insurance Holdings of North American was approved to buy ICAT Specialty Insurance Company, which has provided hurricane policies in Hawai`i since 2006. See coverage provided by the Pacific Business News here.
The Commissioner also reported that the Hawai`i Hurricane Relief Fund is dormant at this point, but consists of $184 million. The Fund is created from a variety of sources, including premiums, assessments, fees and taxes. Currently, there is serious discussion on whether this is the time for the legislature to raid the fund to cover the State's budget deficit.
1) HB 262 - Expands the authority of the insurance fraud investigations unit.
2) SB 892 - Authorizes the Commissioner to conduct criminal history record checks for agents seeking licenses to do business.
3) SB 92 - A cleanup bill addressing various problems in the Insurance Code.
The Commissioner is obviously well versed in national and local insurance issues. We appreciated his taking time to meet with our group.
Acknowledging that the insured's cotton was damaged by an occurrence, the Eighth Circuit nonetheless affirmed the district court's denial of coverage based upon an exclusion. See Michigan Millers Mut. Ins. Co. v. DG&D Co., Inc., No. 08-2699, 2009 U.S. App. LEXIS 14236 (8th Cir. July 1, 2009).
The insured operated a cotton gin. After delivering 50,000 bales of cotton to warehouses, cotton brokers and purchasers asserted claims against the insured for losses caused by mold, mildew and hard spots found in the bales. The damage appeared after delivery of the cotton bales to the warehouses. Two brokers sued,alleging that excess moisture during the ginning process rendered the cotton unmerchantable. Michigan Millers agreed to defend under a reservation of rights and filed suit for declaratory relief.
The Commercial Agribusiness Policy covered damages the insured was legally obligated to pay because of property damage caused by an occurrence. The district court agreed damage to the cotton from excess moisture was "property damage." Further, plaintiffs in the underlying suit alleged an "occurrence" - the insured's alleged negligence in adding excess water to the cotton during the ginning and packing process. Nevertheless, there was no coverage because the policy excluded property damage to "personal property in the care, custody or control of the insured."
On appeal, the insured argued the property damage occurred, not while the cotton was in the insured's care, custody and control, but in the warehouses when the rot, mildew and hardening were discovered. The Eighth Circuit noted that the underlying suit alleged the insured's negligence at the cotton gin caused the excess moisture in the cotton. If damaged at the gin, it did not matter if the cotton developed significant additional damage after it left the gin. In cases of progressive damage, coverage issues were determined at the time the initial property damage occurred; progressive damage may affect the amount of the covered loss.
The policy expressly adopted this principle in its definition of property damage by providing that all loss "shall be deemed to occur at the time of the physical injury that caused it." Thus, if the cotton suffered any physical injury when in the insured's care, custody, and control at the gin, the entire loss was excluded, even if it was aggravated when the bales sat in warehouses while mold and mildew developed.
The scope of coverage for "real estate professional services" was at stake in St. Paul Fire and Marine Ins. Co. v. ERA Oxford Realty Co. Greystone, LLC., No. 07-00921-CV (11th Cir. June 23, 2009) [here].
The underlying suit alleged ERA employees approached two real estate brokers to discuss a merger. A verbal agreement was reached, but then allegedly breached by ERA. Subsequently, ERA entered a written agreement to merge with a realty company. Again, ERA allegedly breached the merger agreement. The underlying complaint alleged nine causes of action, including breach of contract and willful misrepresentations.
ERA was insured under a Real Estate Agents or Brokers Professional Liability Protection Policy with St. Paul, which covered loss resulting from the performance of, or failure to perform, real estate professional services caused by a wrongful act. "Real estate professional services" were defined as "those professional services performed, or failed to be performed, for others . . . in the capacity of a real estate agent or broker."
When ERA sought coverage for the underlying suit, St. Paul filed for declaratory relief. The district court ruled St. Paul must defend the allegations relating to losses resulting from the providing of "real estate professional services."
The Eleventh Circuit reversed. The entire policy indicated the parties intended for the term "professional services" to apply only to those services which require the specialized knowledge of a real estate agent in performing professional duties for others. The actions in connection with attempted mergers between real estate businesses was not part of the "professional services" provided by the real estate agents. Therefore, there was no coverage.
The New York Court of Appeals considered whether a Landlord was an additional insured under a policy obtained by the Tenant. See Kassis v. The Ohio Casualty Ins. Co., No. 117 (N.Y. Ct. App. June 25, 2009).
The Landlord leased property to the insured, who, pursuant to the lease, obtained a commercial general liability insurance policy from The Ohio Casualty Insurance Company. The policy provided bodily injury coverage where "the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement" which falls within the definition of an "insured contract." The policy extended coverage not only to the named insured, but also to any person whom the named insured was required to name as an additional insured under a written contract or agreement.
There was no dispute that the lease was a insured contract. It obligated the insured to "indemnify, defend, and hold harmless" the Landlord from any liabilities arising out of occupancy of the premises caused by the Tenant. The lease further provided the Tenant was to obtain a general liability policy "for the mutual benefit of Landlord and Tenant."
When the insured's employee slipped on snow and ice outside the premises, injuring himself, he sued the Landlord. Ohio Casualty disclaimed coverage because the Landlord was not a named insured. In the coverage action, the Supreme Court found Ohio Casualty was obligated to defend. The Appellate Division reversed.
The Court of Appeals reversed the Appellate Division. An additional insured was entitled to the same protection as the named insured. Here, the insured was not required to complete and return to Ohio Casualty any notification forms listing the persons it intended to name as additional insureds. The intended meaning of "mutual benefit" in the lease was that Landlord and Tenant were intended to enjoy the same level of coverage. Because the Landlord was an additional insured, Ohio Casualty was obligated to defend.
Two issues were presented in Stewart Enterprises, Inc. v. RSUI Indem. Co., Inc., 2009 U.S. Dist. LEXIS 50156 (E.D. La. June 15 2009). First, was the excess carrier's following form policy was bound by the primary carrier's exception to the flood exclusion? Second, was the primary policy's anti-concurrent causation clause applicable?
The insured owed various cemeteries, funeral homes, and other commercial properties that were damaged during Hurricane Katrina. The insured held a primary layer of property insurance from Lexington Insurance Company with a limit of $10,000,000. The first excess layer of coverage was provided by Lloyd's, with $15,000,000 in excess of the primary limit. Finally, RSUI provided a second excess layer of coverage for $225,000,000 in excess of the $25,000,000 primary and first excess limits.
Lexington and Lloyd's paid policy limits, but RSUI only made a "good faith" advance of a little over one million dollars. The insured sued.
Because RSUI's policy was following form, Lexington's flood exclusion was critical. Lexington's policy excluded, "Flood, unless specified in Section 3, Sublimits of Liability, Paragraph H., and then only for such specified amount." Section 3, paragraph J then set forth a $10,000,000 sublimit of liability "in the aggregate for any one policy year for the peril of Flood." The Lexington policy, therefore, excluded the peril of flood, but in the same sentence created an exception to that exclusion by providing flood coverage up to $10,000,000.
RSUI argued its policy simply adopted the flood exclusion as a traditional exclusion, i.e., without the $10,000,000 sublimit exception in the Lexington policy. The court disagreed. Had RSUI desired to exclude flood coverage, it could have done so by an exclusion in its own policy rather than by complex and indirect reliance on Lexington's exclusion with an exception.
(3) any and all loss from any other cause when occurring concurrently or sequentially with . . . Flood . . . .
Regarding Paragraph P(2), the Court declined to enforce the anti-concurrent causation clause to preclude recovery for flood damage when the RSUI policy afforded coverage for that same peril.
A different result was reached under paragraph P(3), however. This paragraph contained anti-concurrent language independent of paragraph P(2) and the prefatory anti-concurrent causation language of the policy. Paragraph P(3) excluded damage caused by wind only "when occurring concurrently or sequentially with . . . Flood." Accordingly, the insured could recover for damage caused by wind which did not occur concurrently or sequentially with flood.
Because the decision involved controlling questions of law, the Court granted the right to an immediate appeal under 28 USC 1292 (b).

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After the Supreme Court’s TC Heartland decision reaffirmed 28 U.S.C. § 1400(b) to be “the sole and exclusive provision controlling venue in patent infringement actions,” one important question remained as to whether foreign defendants (especially foreign corporations) in a patent case may invoke that provision to challenge venue. On May 9, 2018, the Federal Circuit denied HTC Corporation’s attempt to defeat venue based on § 1400(b), and held that provision does not provide an exception to the “long-established rule that suits against aliens are wholly outside the operation of all federal venue law, general and special.” In re HTC Corp., No. 2018-130, slip op. at 7 (Fed. Cir. May 9, 2018).
In In re HTC Corp., HTC Corporation, a Taiwanese corporation with its principal place of business in Taiwan, petitioned the Federal Circuit for a writ of mandamus seeking dismissal for improper venue pursuant to 28 U.S.C. § 1406(a) of a patent infringement action pending against HTC Corporation in the District of Delaware. Id. at 2. The Federal Circuit denied the mandamus petition after finding that HTC Corporation failed to meet each of the three conditions necessary for obtaining such a drastic remedy. Id. at 3-20.
First, the Federal Circuit found that HTC Corporation failed to demonstrate that it had “no other adequate means to attain the relief [it] desires.” Id. at 3-7. The Court noted that “unlike a defendant challenging the denial of a [28 U.S.C.] § 1404(a) transfer motion, a defendant aggrieved by the denial of an improper-venue motion has an adequate remedy on appeal from a final judgment,” namely, by obtaining an appellate “order vacating the judgment . . . and directing the remand of the action to the [appropriate venue].” Id. at 4-5 (citations omitted).
Next, the Federal Circuit held that HTC Corporation failed to show a clear and indisputable right to the issuance of the writ. Id. at 7. The Court examined two Supreme Court decisions directly addressing whether the venue laws protect alien defendants. In In re Hohorst, the Supreme Court established what the Federal Circuit referred to as the “alien-venue rule.” 150 U.S. 653, 662 (1893) (holding that the venue restriction was “inapplicable to an alien or a foreign corporation sued here, . . . and that, consequently, such a person or corporation may be sued by a citizen of a state of the Union in any district in which valid service can be made upon the defendant”); In re HTC Corp., No. 2018-130, slip op. at 8. Later in Brunette Machine Works, Ltd. v. Kockum Industries, Inc., the Supreme Court upheld the alien-venue rule, despite the existence of § 1400(b). 406 U.S. 706, 714 (1972) (concluding that the “broad and overriding” principle stated in then-§ 1391(d) “cannot be confined in its application to cases that would otherwise fall under the general venue statutes,” as the statute merely reflected the “long-established rule that suits against aliens are wholly outside the operation of all the federal venue laws, general and special”); In re HTC Corp., No. 2018-130, slip op. at 9-10.
The Federal Circuit further rejected HTC Corporation’s contention that “§ 1400(b) should apply to it because Congress abrogated Brunette—and the alien-venue rule—through the Federal Courts Jurisdiction and Venue Clarification Act of 2011 (‘the 2011 amendments’).” In re HTC Corp., No. 2018-130, slip op. at 10-11. The Court noted that § 1400(b) “was not intended to supplant the longstanding rule that the venue laws do not protect alien defendants.” In re HTC Corp., No. 2018-130, slip op. at 11; see also Brunette, 406 U.S. at 713-14 (“Since the general venue statutes did not reach suits against alien defendants, there is no reason to suppose the new substitute in patent cases was intended to do so.”). The Court then held that the recent “TC Heartland [decision] d[id] not alter this conclusion” because “while § 1400(b) governs venue in patent cases, it governs only to displace otherwise-applicable venue standards, not where there are no such standards due to the alien-venue rule.” In re HTC Corp., No. 2018-130, slip op. at 12-13. The Court also found no indication that Congress intended to either “modify the alien-venue rule specifically for patent cases” or “discard the well-established alien-venue rule in favor of generally bringing alien defendants, including foreign corporations . . ., within the protection of the venue laws.” Id. at 14-15. Although abiding by the alien-venue rule may create a loophole for a plaintiff to forum shop, the Court emphasized that HTC Corporation’s argument would “create a far more unsatisfactory loophole—a complete inability for a patent owner to bring its infringement claims against alien defendants that fall outside the non-residence-based clause of § 1400(b).” Id. at 19.
Therefore, the Federal Circuit determined that “[w]ith the Supreme Court having spoken on this issue twice [in In re Hohorst and Brunette], this court—without clear guidance from Congress—will not broadly upend the well-established rule that suits against alien defendants are outside the operation of the federal venue laws.” Id.
Finally, as to the third condition of obtaining the mandamus relief, the Federal Circuit was not convinced that a writ would be warranted in this case “even if [HTC Corporation] had satisfied the first two mandamus requirements,” because HTC Corporation cited no case adopting its interpretation while “characterize[ing] this legal issue as ‘unsettled’ and resulting in ‘inconsistent’ holdings.” Id. at 20.
In patent infringement actions, venue is now proper in any judicial district for foreign defendants, including foreign corporations. The foreign defendants cannot rely on § 1400(b) or even the general venue statutes to dismiss or transfer a case pursuant to § 1406(a).
Depending on the particular facts in a case, foreign defendants may still seek to transfer the patent infringement action pursuant to § 1404(a).
In patent infringement actions against foreign defendants, plaintiffs’ ability to force foreign defendants into an unfavorable forum can give the plaintiffs additional leverage in settlement negations.
 The Court did recognize that “while an appeal will usually provide an adequate remedy for a defendant challenging the denial of an improper-venue motion, there may be circumstances in which it is inadequate.” But the Court determined that it was unnecessary to articulate such circumstances in this case, because HTC Corporation’s “only argument is that it should be able to avoid the inconvenience of litigation by having this issue decided at the outset of its case,” which was rejected by the Supreme Court in Bankers Life & Cas. Co. v. Holland, 346 U.S. 379, 383 (1953) (“[T]he extraordinary writs cannot be used as substitutes for appeals, even though hardship may result from delay and perhaps unnecessary trial.”). In re HTC Corp., No. 2018-130, slip op. at 6-7.
 Section 1391(d), at the time, stated that “[a]n alien may be sued in any district.” 28 U.S.C. § 1391(d) (1970).
 The Court noted that “Congress made only one clear change to the alien-venue rule in 2011” by “grant[ing] venue protection to alien natural persons having permanent resident status” but implemented “no comparable change with respect to foreign corporations.” In re HTC Corp., No. 2018-130, slip op. at 13-17.


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Were Car Makers Keyless & Clueless? Heads up—Anyone with a keyless system for their Toyota, Ford, Nissan, Honda, BMW, General Motors, Volkswagen, Mercedes-Benz, or Hyundai—a defective automotive class action lawsuit has been filed against these car makers alleging that a flaw in the design of keyless fob systems has led to 13 documented deaths from carbon monoxide poisoning. The plaintiffs estimate that at least 5 million vehicles are affected by the alleged defect. Got that? Read on.
According to court documents filed in California court this week, the plaintiffs claim that reasonable drivers misunderstand that keyless-ignition fobs do not turn their vehicles engines off. Further, the cars don’t have a safety mechanism to automatically turn off the engine after it’s been left idling for a set amount of time. When the car engines are left running in owners’ garages, it can lead to in an increased risk of carbon monoxide poisoning.
According to the keyless ignition fob lawsuit, in cars that use traditional keys, the engine can no longer operate once it’s removed from the vehicle. By contrast, keyless-ignition fobs can remotely turn on the engine, but have nothing to do with turning off the engine. Therefore, drivers can park their cars and exit with the keyless fob and still leave the engine running no matter how far the fob goes from the car.
The lawsuit alleges the defendants and their research and design companies installed the keyless fob systems without instituting proper safeguards and warnings.
Further, the plaintiffs contend that the lack of an auto-off feature is not mentioned in the car manuals, therefore failing to warn of the risk for carbon monoxide poisoning. The cars have no audible warnings alerting drivers that the engine is still running.
The plaintiffs assert that individuals personal injury lawsuits have been filed over the lack of an auto-off feature, resulting in confidential settlements. Similarly, consumers have filed complaints with the National Highway Traffic Safety Administration. However, the plaintiffs contend the automakers haven’t taken action in response to the complaints.
In fact, the plaintiffs assert that the automakers have known for years about the deadly consequences of drivers’ leaving their vehicles without hitting the start/stop button used in keyless-ignition cars, but that they refuse to act.
The lawsuit states that the auto-off feature is feasible and has already been implemented by some of the automakers. The plaintiffs claim that while some new vehicles are now outfitted with the auto-off system, the automakers are doing nothing to rectify older models or notify drivers about the potential safety risk.
The lawsuit asserts national claims for negligent failure to recall and unjust enrichment, as well as state claims for fraudulent concealment, violation of state consumer protection acts and breach of implied warranty, among others.
FYI—The case is Draeger et al. v. Toyota Motor Sales USA Inc. et al., case number 2:15-cv-06491, in the U.S. District Court for the Central District of California.
Washio Employees File Suit against the App’s Spin Cycle. This week, a potential employment class action lawsuit has been filed against Washio Inc., a mobile laundry application, over allegations it pays its employees below the minimum wage. Further, the complaint claims that Washio misclassifies its standard employees as independent contractors to avoid state labor laws. Washio, Uber, Lyft—are these the new face of employment law violators?
The Washio lawsuit was filed by Akil Luqman, a former Washio employee who worked for the company between March and June picking up and delivering customer laundry. In the lawsuit, he asserts the company paid employees for each customer stop, in violation of minimum and overtime wage laws. Further, he claims the company denied rest and break periods, failed to fully reimburse work expenses and issue correct pay stubs, and classified full-time hourly workers as independent contractors.
The complaint states that Washio’s classification of its employees as independent contractors “was in fact subterfuge by [Washio] to avoid granting employee status” because the company controlled the amount, time and place of the work performed and the level of pay the plaintiffs received.
The complaint also claims that Washio was in violation of California labor law because it failed to pay overtime or provide rest periods and breaks, despite frequently scheduling employees to work more than eight hours in a day and/or 40 hours in a week.
According to the complaint, Washio still operates in violation of state and federal labor laws, and therefore, the plaintiffs are seeking a permanent injunction halting the company’s actions, and an order requiring Washio to provide the names and contact information for all current and former employees that may be included in the proposed class.
Additionally, plaintiffs are seeking unspecified damages related to lost wages, undisclosed withholdings, unpaid overtime, unreimbursed expenses, denial of proper rest and break periods, and legal fees.
Luqman is represented by Kevin T. Barnes and Gregg Lander of The Law Offices of Kevin T. Barnes. The case is Luqman v. Wash.io Inc., case number BC592428, in the Superior Court of the State of California, County of Los Angeles.
Here’s One for Every Tuna Lover—Sorry—Tinned Tuna Lover. A consumer fraud class action settlement has been reached between Starkist and consumers who alleged the company under-filled some of its 5-ounce canned tuna products by several tenths of an ounce. According to federal law a 5 ounce can of tuna must contain an average of 2.84 to 3.23 ounces of tuna, depending on variety.
Class Members who wish to file a claim must complete the appropriate form online or by mail, which must be postmarked no later than November 20, 2015 in order to be considered for benefits.
Ok—That’s a wrap folks…See you at the Bar!
Were you “Outed”? …by the massive data breach of Ashley Madison? Are you one of some 37 million people who got caught with their firewalls down—sorry Ashley Madison’s firewalls? Well, further to all the talk about filing a class action, this week a data breach lawsuit was filed against the website.
The Ashley Madison lawsuit, filed on behalf of all Canadian subscribers, targets the dating website for married people as well as Avid Dating Life, Inc. and Avid Life Media, Inc., the corporations who run the website. The lawsuit is seeking $750 million in general damages and $10 million in punitive damages.
Eliot Shore, a widower from Ottawa, is the plaintiff in the lawsuit. He signed up with the website “for a short time in search of companionship” but, allegedly, never went on a date.
The plaintiffs are seeking compensation and access to justice for all affected. “Another major aspect of this is behaviour modification; (our clients) went to this website being promised anonymity and confidentiality, but their privacy has been violated. Corporations need to be accountable for what’s happened so that others can follow,” attorneys for the plaintiffs stated. True enough.
TWC got TCPA Troubles? Time Warner Cable Inc,(TWC) got hit with a putative class action lawsuit this week, filed by a former customer who asserts the company violated the Telephone Consumer Protection Act (TCPA). Specifically, the plaintiff, Raquel S. Mejia, alleges TWC used an autodialer to make at least two unsolicited sales calls a day to her cellphone in an attempt to win her business back.
Mejia claims she stopped using TWC in 2007 and never gave her consent to TWC to call her phone, nor did she have any business relationship with the cable provider after 2007.
According to the Time Warner Cable lawsuit, Mejia states that there were several indicators that the calls were made by autodialers, in violation of the TCPA. Specifically, she would sometimes answer a call and only hear background noise at what appeared to be a call center. A live call center representative would often take a few moments before engaging her, an indication they were not actively aware of an automatic dialing system’s activities, she claims.
“Based on the circumstances of the calls, including but not limited to the multiple calls over a short period of time, plaintiff was not immediately engaged by a live person … and defendant called despite plaintiff’s requests to defendant to stop calling (indicating a computer automatically dialed the number again), plaintiff believed defendant called her cellular telephone using an ATDS that automatically selected her number from a computer database,” the complaint states.
Stating that “the TCPA was enacted to protect consumers from unsolicited telephone calls exactly like those alleged in this case,” Mejia, on behalf of herself and all others who received similar allegedly illegal calls, is suing for an injunction against the practice and treble damages of $500 per TCPA violation. She is also seeking attorneys’ fees and costs, the complaint states.
The case is Raquel S. Mejia, individually and on behalf of all others similarly situated v. Time Warner Cable Inc., case number 15-cv-06445 in U.S. District Court for the Southern District of New York.
Defective Air Conditioning Coils… remember those? A lawsuit against Lennox industries was the result and this week a settlement has been reached. The Lennox Air Conditioning lawsuit claimed the company’s air conditioning units are susceptible to formicary corrosion as a result of the deficient materials used in the manufacture of its coils. FYI—an evaporator coil is a part of an air conditioning system or heat pump system in the cooling mode.
Lennox denies all of the claims in the lawsuit, but has agreed to the settlement to avoid the cost and risk of further litigation.
The Lennox settlement class includes all U.S. residents who, between October 29, 2007 and July 9, 2015, purchased at least one new uncoated copper tube Lennox brand, Aire-Flo brand, Armstrong Air brand, AirEase brand, Concord brand, or Ducane brand evaporator coil, covered by an Original Warranty, for their personal, their family, or their household purposes, that was installed in a house, condominium unit, apartment unit, or other residential dwelling located in the United States.
Original Coils may have been purchased separately, as part of an air handler, or they may have been included as part of a Packaged Unit.
The final approval hearing is scheduled for December 2, 2015. The lawsuit is: Thomas v. Lennox Industries Inc., United States District Court for the Northern District of Illinois, Eastern Division, Case No. 13 CV 7747.
In the lawsuit, Guariglia estimated that Tide Pods ruined at least $200 worth of her laundry, including towels, sheets and clothing, which had blue/purple stains that allegedly appeared after she began using Tide Pods. She further states that despite rewashing with other detergents and pretreating the stains with Shout stain remover, which is made by SC Johnson & Co., the stains remained. Similarly Emmanuele said she was unable to remove the stains she blamed on Tide Pods even with bleach. She estimated the detergent ruined at least $650 worth of towels, sheets and clothing. Plaintiff Byrne claims that in December 2012 her son and daughter had blue/purple stains on their clothes but she used Tide Pods for at least 18 more months before realizing the detergent was the cause. She estimated the detergent damaged at least $500 worth of clothing and other laundry.
The lawsuit states: “P&G failed to inform consumers, through the directions on the packaging or any other written disclosure, even when consumers use Tide Pods as instructed by P&G, that blue/purple staining will result due to defects in the design.” However, “on P&G’s own website, P&G has acknowledged that Tide Pods can cause blue/purple stains on laundry and insists that this staining can only occur when the consumer is not using the product correctly,” the suit states. The complaint cites an article in Consumer Reports magazine, published February 20, 2014, which quotes a P&G spokesperson who said such stains can be caused by not putting a Tide Pods pack into the washing machine before clothing is inserted or by overstuffing a machine with laundry. “P&G reiterated over and over, in its responses to consumer complaints, that it would not put a product on the market that would ruin laundry, that Tide Pods have been successfully tested, and it is certain that if used as directed, Tide Pods do not stain laundry,” the lawsuit states. “However, it is clear from plaintiffs’ experiences, as well as those of the customer complaints set forth above, and the hundreds of additional complaints on the Tide website, that even when used as directed, Tide Pods permanently stain white and light-colored laundry.” So—no more blaming dodgy washing on the laundry fairy! The lawsuit seeks to represent anyone in the United States who bought Tide Pods and had laundry damaged.
Is MegaRed a Mega Crock? Another wonder supplement got hit with a consumer fraud class action lawsuit this week. This one targets Reckitt Benckiser Group PLC and its subsidiary Schiff Nutrition International Inc, alleging the companies misled consumers about the health benefits of krill oil. According to the complaint, the defendants marketed the krill oil as a dietary supplement with cardiovascular benefits it does not have. Really? How unusual.
The nitty gritty is that the defendants made claims that an omega-3 fatty acid dietary supplement marketed as MegaRed would help prevent heart disease. According to the proposed MegaRed class action, these types of claims have drawn attention from the US Food and Drug Administration (FDA), which has allegedly condemned such advertisements, describing claims about omega-3’s health benefits as “false and misleading.” Well, that certainly did a lot of good.
“In conjunction with their extensive, long-term campaign of deceptive advertising and misleading statements,” the complaint states, “defendants have violated [the FDA’s] clear directives by … consistently and repeatedly falsely telling consumers that taking just ‘one small softgel per day’ may reduce the risk of coronary heart disease.” Further, the complaint cites a guideline by the American Heart Association recommending that patients consume 500 to 1,000 miligrams of omega-3 fatty acids daily to help combat heart disease. A single MegaRed capsule, the supplement’s recommended daily dose, contains only 50 mg of omega-3 fatty acids.
The proposed class action asserts the packaging for MegaRed is misleading because it claims that using “just one small softgel” of the supplement daily “may reduce the risk of coronary heart disease.” Schiff has marketed the size of the MegaRed capsules, which are slight in comparison to fish oil capsules, as having similar health benefits, which is one of the product’s main advantages. Named plaintiff in the complaint, Jeffrey Johnson, a “health-conscious individual” contends that he and others like him were misled by the marketing claims, and as a result paid a premium for the supplement, which costs significantly more than fish oil. The proposed class action complaint accuses Schiff of unjust enrichment, on behalf of a nationwide class; and violations of the California Consumers Legal Remedies Act; California Unfair Competition Law; California False Advertising Law; and California Sherman Food, Drug and Cosmetic law, on behalf of a Californian subclass. Plaintiffs are seeking an injunction prohibiting Schiff from further misleading advertisements, as well as actual and punitive damages.The case is Johnston v. Schiff Nutrition International et al., case number 3:15-cv-03669, in the US District Court for the Northern District of California.
Strike One for the Little Guys. A $13.1 million settlement has been awarded to Southeastern Pennsylvania Transportation Authority workers who alleged the authority was in violation of the Fair Labor Standards Act shift work. According to court filings, “The parties now believe that considering the costs and risks of continuing this litigation, it is in their best interests to fully and finally resolve plaintiffs’ claims.” The parties filed a joint motion for approval, which involves some 2,300 current and former bus and trolley drivers. If approved, the SEPTA settlement will end a case first brought in June 2011, alleging SEPTA did not pay its drivers for off-the-clock time spent doing tasks before pulling their vehicles out at the start of their runs.
“Resolution of the FLSA claim requires a factual determination of the amount of time operators are required to work prior to their scheduled start, and a legal determination regarding whether this time is compensable and subject to the overtime provisions of the FLSA,” a three-judge Third Circuit panel stated. The case is David Bell et al. v. Southeastern Pennsylvania Transportation Authority, case number 2:11-cv-04047, in the U.S. District Court for the Eastern District of Pennsylvania.
Ok – That’s a wrap folks…Happy Friday…See you at the Bar!
Car Hacking = Car Jacking = Lawsuit!!!! That’s all the math we need, and indeed three Fiat Chrysler customers, who have have filed a proposed consumer fraud lawsuit alleging the recent recall of 1.4 million Dodge, Ram and Jeep vehicles for a software patch is not enough to safeguard customers against hacking of uConnect and the 3G “infotainment” systems networked into the vehicles.
The Fiat Chrysler lawsuit is seeking a court order forcing Fiat Chrysler to physically disconnect the uConnect system from the controller area network, or CAN bus network, that links it to the rest of the vehicles electronics. The plaintiffs claim this is the only way to ensure those other systems are protected from hacking. The complaint also names Harmon International Industries, the maker of the infotainment system, as a defendant.
According to the plaintiffs, hackers could even use uConnect to shut down cars while on the highway, both through the 3G network, which cannot be disconnected, and through the radio, a separate hacking risk that is currently under investigation by the National Highway Traffic Safety Administration. That investigation is looking into an estimated 2.8 million additional vehicles with uConnect from other manufacturers on top of the ones Fiat Chrysler recalled.
The lawsuit contends that Fiat Chrysler was aware of the hacking vulnerability almost 18 months prior the recall, and waiting for the recall to be issued constituted a breach of the company’s responsibilities under the Transportation Recall Enhancement, Accountability and Documentation Act. Further, that wait means Fiat Chrysler cannot be trusted to expeditiously address vulnerabilities found in the future, the complaint states.
“It’s clear the defendant chose to finally update the software only because the flaw was being made public by the security researchers,” the lawsuit states. However, the plaintiffs contend that simply updating the software on affected cars is a complicated process that will not guarantee future safety. Therefore, Fiat Chrysler is liable for fraud for its characterization of the recall as a software issue rather than an inherent vulnerability resulting from the link between uConnect and the other systems, the plaintiffs assert.
“Defendants’ claims that this update makes these vehicles safe are untrue,” the plaintiffs contend. “By inaccurately describing the problem, the defendants are perpetrating a fraud on class members and giving them a false sense of security.” The case is Flynn et al v. FCA US LLC et al, case number 3:15-cv-00855 in the U.S. District Court for the Southern District of Illinois.
Where are those electric self-driven cars they’ve been promising?
Heads Up Soccer Moms! A personal injury and negligence class action lawsuit has been filed on behalf of several current and former soccer players against soccer’s worldwide governing body, FIFA, and affiliated soccer organizations in the United States including U.S. Youth Soccer and American Youth Soccer, leagues responsible for over three million child and adolescent soccer players in the United States, for allegedly failing to incorporate up-to-date guidelines into their concussion policies.
The soccer concussion lawsuit states that no rule limits headers in children’s soccer, and children are often taught to head the ball from the age of three. A dedicated youth player might sustain 1,000 headers per year, and a high school player more than 1,800 headers.
– Require FIFA and its U.S. affiliates to implement up-to-date guidelines for detection of head injuries and for return to play after a concussion.
– Regulation of heading by players under 14 years old.
– A rule change to permit substitution of players for medical evaluation purposes.
The lawsuit alleges that these groups have failed to adopt effective policies to evaluate and manage concussions, a common occurrence at all levels of the game. They also claim that a lack of effective policies poses a greater danger to women and children players, who are more vulnerable to traumatic and long-lasting brain injury.
Here’s a whopper…A $235 million settlement has been approved, ending a securities class action brought by a pension fund against Citigroup Global Markets Inc., Goldman Sachs & Co. and UBS Securities LLC, over allegations that the Residential Accredit Loans Inc. (RALI) certificates’ seller, Residential Capital, and the underwriter defendants failed to disclose weaknesses in the underlying loans in approximately 59 offerings.
The lawsuit was brought in 2008 by the New Jersey Carpenters Health Fund in New York over the sale of mortgage-backed securities to the fund as well as other investors in several offerings between 2006 and 2007 that were issued and sold by RALI. The class action claimed the prospectuses had material misstatements and omissions.
There are three tiers of putative class members, and the funds will be distributed based on the strength of their claims at the time of settlement.
The case is New Jersey Carpenters Health Fund et al. v. Residential Capital LLC et al., case number 1:08-cv-08781, in the U.S. District Court for the Southern District of New York.
Ok – That’s a wrap folks…See you at the Bar folks!

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Employees in Mississippi, like many other states, are permitted to store a firearm in their locked personal vehicle while on their employer’s parking lot unless the employer has taken the necessary steps to provide adequate security. While this does nothing to alleviate the employee’s concerns about driving to or from work while unarmed, it does at least offer a modicum of assurance the employee will not be assaulted in the employer’s parking lot. Whether right or wong, the Mississippi Legislature made this policy decision years ago but only now are employers starting to pay attention.
Read below for an example putting all these principles into context.
Joseph Parker was hired by Leaf River Cellulose in October 2008 to work at its plant located in New Augusta, Perry County, Mississippi. On December 12, 2013, Leaf River received a report from another employee that Parker had a handgun in his personal vehicle located in an employee parking area. Leaf River thereafter requested and received permission to search Parker’s vehicle. This search confirmed the presence of a handgun within Parker’s locked, private vehicle equipped with tinted windows.
Immediately following the vehicle search Leaf River suspended Parker’s employment and directed him to leave the premises. On December 13, 2013, Defendant terminated Parker’s employment in violation of its own policies and in violation of Mississippi law.
Leaf River had an established employee policy generally prohibiting an employee “from bringing any firearm or other weapon onto any property owned . . . by the company, except as allowed by applicable law. . . . You are also prohibited from carrying or transporting any weapon in your own vehicle while on company property and/or while using company transportation, . . . except as allowed by applicable law.” While the “applicable law” permitted Parker to have a gun in his personal vehicle Leaf River still terminated his employment for violating their illegal policy.
We find that an employer may be liable and that Section 45-9-55(5) does not shield Aurora from liability under the facts of this case.
The Supreme Court stated that Mississippi Code Annotated § 45-9-55 is a Legislatively-created exception to the employment-at-will doctrine. The Supreme Court also found that the immunity provided in sub-section (5) was “for the actions of employees or third parties.” The Supreme Court stated that the “occurrence” mentioned by sub-section (5) of the statute was not the employer’s violation of sub-section (1). In other words, the Supreme Court said that the immunity applies to a workplace shooting but does not immunize the employer for terminating an employee for (legally) having a gun in the employee’s car. This decision is the opposite of that of the district court and Fifth Circuit which dismissed Mr. Parker’s case.
Thus, there is a right to sue an employer who establishes, maintains, or enforces any policy or rule that has the effect of prohibiting a person from transporting or storing a firearm in a locked vehicle in any parking lot, parking garage, or other designated parking area unless it is a private employer who restricts access to the parking lot through a gate, guard, or other means.
Not only does this law prevent terminating or reprimanding the employee for having a gun in his/her personal, locked vehicle, the statute also says that it is illegal to “establish” or “maintain” any such employment policy.
*** UPDATE #1 : On Thursday, July 28, 2016, the Mississippi Supreme Court denied rehearing of its earlier 9-0 decision that employees terminated in violation of Miss. Code Ann. section 45-9-55 may sue their employer. This means that the Parker v. Leaf River Cellulose and Swindol v. Aurora Flight Sciences Corporation cases should be remanded by the Fifth Circuit back to the US District Courts for a determination of how much damage each employee suffered because of their employers’ illegal action.
One other thing for employers and employees to keep in mind is that Miss. Code Ann. section 45-9-55 not only prohibits enforcement of a no-guns-in-parking-lot policy, it also prevents the employer from establishing or maintaining such a policy. Thus, just having a policy in the personnel manual is a violation even if the employer does not terminate the employee.
Finally, over 2 1/2 years after this illegal termination, the United States District Court for the Southern District of Mississippi has vindicated Mr. Parker by entering an order (court’s opinion) which says that Leaf River is liable to Parker for his illegal termination. A trial on the issue of how much Leaf River was scheduled for September 2017 but the case settled shortly beforehand. At trial the Court was going to consider whether Leaf River was liable to Parker for punitive damages for firing him in violation of the law.
Although it has been a long road, Parker and his counsel would like to publicly thank the court for the speed in which it addressed the opposing motions for summary judgment.
As you can read in the court’s opinion, placing a sign saying “no guns” (paraphrase) and “employee parking” is not legally sufficient under the statute (cited below). Similarly, putting in an alleged security station across a street, nearly 1/2 a football field away, is not good enough either. Leaf River illegally fired Parker and now they are going to pay for it.
In another stunning example of employer policies violating the law, the case of Smith v. Huntington Ingalls, Miss. So. Dist. Civil No. 1:16cv406-HSO-JCG, held consistently with Parker v. Leaf River that the use of no-trespassing signs, security patrols, and closed circuit cameras monitored in a central security station does not meet the requirements of Miss. Code § 45-9-55(2). Accordingly, yet again Huntington Ingalls will have to pay a wrongfully terminated employee the damages that he suffered for exercising his constitutionally and statutorily protected rights. Like Parker, Smith may be entitled to punitive damages for his former employer’s bad policy.
A similar case under a different state’s (Illinois’s) similar law has also resulted in a victory for the employee. Read more from the NRA’s press release.