Pennsylvania Litigation Blog

Thirteen cents worth of postage generates a $12,000 late fee and a law suit. Horst Realty manages the Village of Pineford, an apartment complex in Middletown Borough. The Borough provides electric service to the residents of the Borough. Horst Realty failed to place sufficient postage on its September payment of the electric bill, which payment was in excess of $124,000. The payment was received by the Borough four days late.

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

On March 2, the Court of Common Pleas for Monroe County issued a decision dismissing, on Preliminary Objections, an employment-related privacy case for failure to state a claim.  In Adamski v. Johnson, 80 D. & C. 4th 69, an employee sued her employer for invasion of privacy.  In a nutshell, the employee was going to have a surgery but, when her employer asked what type, the employee refused to answer.  Curiosity having been aroused, the employer allegedly "asked [employee's] fellow workers what surgery she was scheduled to receive, 'using the power of the employment relationship to force, coerce and intimidate' the[] employees to disclose [the] information."  The employee further alleged that, not only did the employer learn the concealed information, he also discussed it with others.  Of all the nerve, right?  Naturally, litigation ensued.

Continue Reading...

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

In the wake of the Enron/Worldcom/Tyco/etc. fiascos, Congress got about the work of reforming the regulation of corporate accounting and reporting practices.  The result is the now well-known Sarbanes-Oxley Act (full text .pdf) (here's a summary).  By way of example only, Sarbanes-Oxley requires:

• [T]hat public companies evaluate and disclose the effectiveness of their internal controls as they relate to financial reporting, and that independent auditors for such companies "attest" (i.e., agree, or qualify) to such disclosure
• Certification of financial reports by chief executive officers and chief financial officers
• Independence, including outright bans on certain types of work for audit clients and pre-certification by the company's Audit Committee of all other non-audit work
• [T]hat companies listed on stock exchanges have fully independent audit committees that oversee the relationship between the company and its auditor

How financially onerous are the requirements?  Well, what better way to answer that question than by resort to anecdotal evidence?  According to DealBreaker, Warren Buffet reports: 

Berkshire-Hathaway spent $24 million on auditing this year, a figure he says would have been closer to $10 million without Sarbanes-Oxley.

Based on Buffett's experience, then, Sarbanes-Oxley imposes a roughly 150% increase in auditing costs.  Granted, Berkshire Hathaway is hardly representative of most other public companies and its substantial investment operations may contribute to its enormous auditing-related compliance cost.  Nevertheless, if a public company -- no matter its size -- hasn't experienced a significant uptick in auditing costs under the Sarbanes-Oxley regime, the company might question whether it is employing best practices when it comes to the nitty gritty of compliance.  With substantial civil and criminal penalties available for violators, Sarbanes-Oxley is not to be trifled with.

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

If you are anything like me, when you hear the phrase "custody battle" you first think of two people who used to love each other now locked in a grim struggle over children and, occasionally, pets.  True, but only so far as it goes.  The Superior Court (.pdf) has reminded us that custody battles can also arise in connection with disposition of the dead -- in this case, cremated remains:

The Superior Court has ruled that trial courts have the authority to order the division of cremated remains where the loved ones are in a dispute, in what appeared to be an issue of first impression for the court.

But in the case over the disposition of a divorcing couple’s deceased son’s remains, the court found that the Court of Common Pleas of Schuylkill County had abused its discretion in ordering the division of ashes in Kulp v. Kulp.

As a result, the court remanded the case back to the trial court.

“Given the extremely sensitive nature of this issue, and husband’s opposition to division of the remains, we conclude that the trial court abused its discretion in using its equitable powers to override the desires of one of the next of kin as to the division of son’s remains,” Judge John L. Musmanno wrote for the panel.

. . .

When the trial court ordered that the ashes be placed in two separate urns with each party keeping their urn at the place of their choosing, David Kulp Jr. appealed to the Superior Court.

Hmmm.  Could there be a more clear cut candidate for application of the maxim "Equity is not for the squeamish?"  (h/t How Appealing).  And don't think for a minute this is the only custody battle involving the Dead.  It is not.

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

No self-respecting blawg should consider itself complete without first addressing the Lost Maxims of Equity.  In 2002, Eugene Volokh, an unprepossessing UCLA law professor and legal blogger of rather modest esteem, re-discovered nine lost maxims to round out the body of pithy sayings, that, in the aggregate, define law's weak sister, Equity.  See 52 J. of Legal Educ. 619 (2002).

A few of my favorites:

Equity Delights in a Good Practical Joke
Equity, Schmequity
Equity is a Mean Drunk

And, finally, so many cases cry out for strict application of the lost maxim "Equity Abhors a Nudnik," it's a wonder the maxim was ever lost. 

While we're dealing with the lighter side of the law, my friend Dan Solove (GWU Professor of Law, author of The Digital Person and Lancaster County native), offers a humorous rumination on his most widely-read published work.  It's an old piece in one sense but fresh as daisy in every other.

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

Because we here at the PLB are, oddly enough, interested in litigation that occurs in and/or affects the great Commonwealth of Pennsylvania, it's time to take a brief peek at the events unfolding in Hazleton.  But for the otherwise-sleepy locale's recent foray into immigration policy, Hazleton would perhaps remain best defined as a city somewhere in the vicinity of Scranton.  Prior to current events, my only knowledge of Hazleton was derived from the fact that its name is featured on roadsigns at the I-81/I-78 split north of Harrisburg.  If you want I-81 North, you want Hazleton.

Today, however, Hazleton is best known for the "Illegal Immigration Relief Act," which was adopted by the city's five-person council (on a 4-1 vote) in July of 2006.  Under the law (or is it an ordinance?): 

landlords would face $1,000 fines for every illegal immigrant found renting their properties and businesses who employ illegal immigrants wouldn't be given licenses.

In late 2006, United States District Judge James Munley enjoined enforcement of the IIRA pending trial on the merits.  Trial in Lozano v. City of Hazelton began this week. 

Continue Reading...

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

Lancaster County Coroner, Gary Kirchner, stands accused of giving reporters confidential password information to a county website where official files are maintained.  Although Kirchner was recently charged with unlawful use of a computer and conspiracy, no charges were brought against the reporters believed to have accessed the website.

"It became clear during the investigation that the reporters had been authorized, indeed, invited by the coroner to use his password and user name," said George Werner, attorney for Lancaster Newspapers Inc., publisher of the Intelligencer Journal, Lancaster New Era and Sunday News.

Congratulations to George for successfully navigating these tricky waters on behalf of Lancaster Newspapers Inc.  Last fall, George was instrumental in successfully resisting the Attorney General's efforts to force Lancaster Newspapers' reporters to turn over their computer harddrives in connection with the ongoing investigation.  Well done all 'round.

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

This afternoon, I delivered a presentation (pdf warning) to the York Society of Human Resources Managers on the subject of identity theft.  Now, everyone understands identity theft from the perspective of a consumer, i.e., the poor sap whose identity is stolen, but identity theft from the perspective of an HR professional is, as I found out, a rather different kettle of fish. 

The presentation discusses two recent Pennsylvania laws that bear on identity theft as well as the federal "shredder law," all of which place obligations on businesses that maintain confidential/personal information, whether for customers or employees.  In addition, the presentation considers a relatively recent negligence case (pdf warning) out of Michigan as a cautionary tale for Pennsylvania businesses that don't take sufficient precautions to guard employees' confidential/personal information.  Although the law elucidated in the Michigan case is not yet the law of Pennsylvania, I suspect it may be if and when such a case percolates through the courts.  The very bottom line?  Businesses should stop using employee social security numbers for any purpose not strictly necessary.  If you can accomplish that, you've halfway cracked the nut.

Over at their joint blog, Becker and Posner bring a law-and-economics approach to bear on the issue of deterring ID Theft   Although the discussion is from last September, it remains interesting stuff.  Really, though, how could it not?

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

Class action cases are being filed to stop the practice of stock option backdating. Backdating allows a stock option exercise price to be set using hindsight, by reporting the market price from a previous date. In most cases of backdating, a date on which the stock price was very low is chosen. Currently, there are over a dozen securities fraud cases in federal court and an unknown number of derivative actions in state courts related to the practice. It reportedly has hit hardest in the technology and telecommunications industries. Backdating is not expressly forbidden by statute but rather is being postured as a violation of SEC disclosure regs (SEC Rule 10b-5). With the recent US Supreme Court ruling in Dura Pharmaceuticals (requiring a casual connection between a company's misrepresentation and the plaintiff's economic loss), it appears that there will be proof issues in the cases that have been filed.

Eric adds™ -- Perhaps the next significant options backdating ruling will be rendered in the forthcoming U.S. v. Jobs matter.  Although I don't know about doctors, it sure doesn't look like an Apple a day repels the SEC . . .

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

The Pennsylvania Rules of Civil Procedure require a plaintiff to file a timely certificate of merit in any professional liability action, including a medical malpractice lawsuit, subject to dismissal of the action.  We have seen a number of procedural issues come up in this context, and the legal landscape is developing.

One argument plaintiffs raise with some frequency in trying to revive a dismissed lawsuit is that the application of the rules was inequitable under the circumstances.  The Supreme Court of Pennsylvania has weighed in on the issue and said that the certificate of merit rules are subject to equitable considerations so long as the rules' requirements are met.  See Womer v. Hilliker, 908 A.2d 269 (Pa. 2006) (Justices Baer's dissent is here).  At least substantial compliance is required, and where a plaintiff does nothing to comply with the rules, equitable considerations cannot save a claim.  The court also said that serving an expert report upon a defendant, in and of itself, is not substantial compliance with the rules.  Generally, we do not expect equitable considerations to save many dismissed lawsuits.

A plaintiff's compliance with the certificate of merit rules must be carefully evaluated.  We can offer valuable assistance to our healthcare clients in this regard.

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

Over at the Volokh Conspiracy there is an interesting series of posts on what one might call the Problem of the Air Force.  The problem, being one only for those espousing a so-called originalist view of the Constitution, is this:  The document confers on the federal government (Congress in particular) the powers "To raise and support Armies" and "To provide and maintain a Navy."  The Constitution, however, says nothing about Congress' power to create an independent Air Force.  As such a force could hardly have been envisioned by the framers -- let alone intended to be encompassed by the terms Armies and Navy -- originalists must concede that such power simply does not exist.  In sum, the U.S. Air Force is unconstitutional. 

As I said, an interesting argument.  Fortunately, it is just plain wrong.  Contrary to what one might initially suspect, aircraft did exist during the time in which the framers toiled:

The first recorded manned balloon flight was made in a hot air balloon built by the Montgolfier brothers on November 21, 1783.

So too did the knowledge, however inadvertently acquired, that such craft could be used to distinct military advantage:

The first aircraft disaster occurred in May 1785 when the town of Tullamore, Co. Offaly Ireland was seriously damaged when the crash of a balloon resulted in a fire that burned down about 100 houses giving the town the unusual distinction of being home to the world's first aviation disaster.

It seems odd, then, that the framers would have deprived the republic of the ability to defend itself from the air.  And, of course, they did not.  A close reading of the constitution reveals the manifestly intentional establishment of a federal Hot Air Force.  See Article I, section 1.  And being thus descended, the modern Air Force remains a perfectly constitutional branch of service.  (With all due apologies to John Cole and Allahpundit).

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

OSHA has set forth a standard that an employer shall insure that each employee uses protective footwear when working in areas where there is a danger of foot injuries due to falling or rolling objects, piercing the sole or where such employees feet are exposed to electrical hazards. Employers have frequently had questions over when safety shoes are required and who has to pay for them. Generally, it is believed that the OSHA standard will be interpreted with an eye towards the employer’s experience with foot injuries to determine whether there has been a history of foot injuries due to work-related accidents. Where the hazard is particularly great, a history of prior accidents may not be required. OSHA representatives have recently announced that they are “working on the standard to tighten it up,” presumably to create some certainty as to when protective footwear will be required in the workplace. 

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

State Farm Insurance Company has agreed to pay approximately $80 million to more than 600 policyholders who sued the company for refusing to cover storm damage resulting from the Katrina natural disaster (and an additional $50 million on previously closed claims). Settlement follows an adverse jury verdict in the initial lawsuit to go to trial regarding these claims.

It is noteworthy that the Judge who has assumed jurisdiction for these claims has ordered dozens of policyholders to participate in an experimental mediation program. Hundreds of other homeowners who have not filed lawsuits already have settled their disputes in a mediation program sponsored by the Mississippi Insurance Commissioner George Dale. The interplay between civil litigation and alternative dispute resolution may help bring a measure of certainty and economic efficiency to both insurance companies and claimants in this disaster scenario.

Continue Reading...

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

In a case of first impression, the Pennsylvania Superior Court has carved out an exception to the longstanding practice of barring lawsuits by skiers against ski resorts -- partially on the basis of the release language typically on the back of the lift ticket. It has been held that there is an issue of fact to be determined regarding knowing waiver where the skier was not the one who purchased the ticket, the resort did not claim that the skier or purchaser was informed about the release language, and the skier and purchaser both denied having read the release language. Beck-Hummel v. Ski Shawnee, 902 A.2d 1266 (Pa. Super. 2006). Prior cases were distinguished due to the absence of one or more of the three preceding points, such as the injured party not denying having actually read the release on the back of the lift ticket.

The court also distinguished cases rejecting a claim by persons injured when struck by a foul ball, on the basis that the baseball operators have no duty to warn against common risks inherent in the activities. Another recent case, however, appears to find this baseball foul ball limitation inapplicable when the patron is struck in an area designed to keep their attention from the field of play -- such as where food is being served or activities unrelated to the game are being held.

• Send To A Friend
• Print This Article
• Comments
• Trackbacks

Yes, according to the US Court of Appeals for the 3rd Circuit.  A creditor sent a collection letter demanding payment, failing which the matter "could" result in a legal action being filed against the debtor. The debtor filed a damages action against the creditor, for claimed violation of the federal Fair Debt Collection Practices Act (FDCPA), which prohibits numerous "abusive and deceptive" actions, including threatening consumers with legal action when no such step actually is intended to be taken. The trial court dismissed the action, on the basis that "could" does not mean "will", so there was no actual threat of action being taken, but merely a statement that legal action would be a possible remedy if the debt was not paid. The Court of Appeals reversed and sent the case back to be decided, because a jury might find that the letter did give the impression that legal action was imminent, despite use of the word "could". Brown v. Card Service Center, (3rd Cir. September 29, 2006)

Collection letters and practices should be monitored and updated regularly.  New decisions such as this can cause liability that would not reasonably have been previously expected.

• Send To A Friend
• Print This Article
• Comments
• Trackbacks