Pennsylvania Litigation Lawyer & Attorney : Barley Snyder Law Firm : Serving Lancaster, Reading, York, Chambersburg

Back in April, I looked at the matter of Pearson v. Custom Cleaners.  As you may recall, Pearson is suing his dry cleaners over a lost pair of pants.  He claims damages of $54 million, recently reduced from a high of $65 million.  The matter has gone to trial and, as luck would have it, Emil Steiner of the WaPo's OFF/beat blog is live-blogging the proceedings. 

Yesterday was fascinating and, if you can believe it, Pearson actually broke down on the stand . . .  during a withering direct examination that he conducted upon himself.   And it gets better.  As Overlawyered points out, Pearson managed to coax his own witness into a violation of Godwin's law. 

Do not delay.  Join Emil, start from the beginning, and sip the sweet nectar of sheer absurdity.

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A few weeks back in a post entitled "When Losers Win," I discussed the case of Sole v. Wyner just prior to oral argument before the SCOTUS.  At the time, I predicted:

Although an affirmance would not be the strangest thing to ever happen at the Court, this case appears as close to a slam dunk reversal as a Supreme Court case gets.

Today, the SCOTUS unanimously reversed the 11th Circuit, holding that, under the "prevailing party" rule, a plaintiff who successfully obtains preliminary relief can not be considered a "prevailing party" in cases where the plaintiff ultimately loses on the merits of the action.

To me, the result seems self-evident.  And nine out of nine Supreme Court Justices surveyed also concluded that one cannot be considered a "prevailing party" unless one, well, prevails.

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TEDCO Construction Company was hired to do construction work at a site across the street from St. Paul Cathedral in Pittsburgh.  During the course of construction, TEDCO's pile driver allegedly caused structural damage to buildings on St. Paul's property, which were insured by Church Mutual Insurance Company.  St. Paul's notified Church Mutual of the damage and Church Mutual retained engineering firm WJE to inspect the properties and prepare a report. 

In litigation between St. Paul's, TEDCO and other defendants, one defendant sought production of WJE's report.  Church Mutual resisted production on the grounds that the report constituted work product of a non-testifying expert, which is not discoverable under Rule 4003.5(a)(3).  The defendant moved to compel on the basis that Rule 4003.5(a)(3)  protects the work product of a non-testifying expert only to the extent the expert has been retained "by another party" to the litigation.  Because Church Mutual was not a "party" to the case, defendant reasoned, the rule was inapplicable.  Church Mutual responded that, although it was not a party, the expert's work product should be shielded because Church Mutual functioned as "a representative of plaintiff, employing an expert on plaintiff's behalf for purposes of litigation which plaintiff was expected to commence against third parties." 

The court rejected Church Mutual's agency argument based on its conclusion that Church Mutual's interests "do not necessarily coincide with plaintiff's interests because of the possibility of a dispute between plaintiff and Church as to what is covered by insurance and the amount of money the insurance company should pay."  The court expressly noted that the case before it was "very different" than a case in which an insurer assumes responsibility for claims brought by or against its insured.

Bottom Line:  In cases where an insurer does not formally assume responsibility for litigating claims, an insured cannot treat expert reports prepared for the insurer as though they were prepared for the insured.  Although the court in TEDCO noted that there was a coverage dispute between St. Paul's and Church Mutual, it is not entirely clear whether -- or why -- the absence of such a dispute would alter the result.  Rule 4003.5(a)(3) protects the reports of non-testifying experts only when prepared for a party and the existence of a coverage dispute between an insured and its insurer does not strike me as determinative of whether the insurer is a party to litigation.  I suppose Church Mutual's agency theory would be strengthened in the absence of a coverage dispute, but it is far from clear that even a strengthened agency argument would be sufficient to render Church a party for purposes of the Rule.  The better practice is to assume that reports prepared by an insurer will be discoverable in an action involving the insured absent a formal assumption of responsibility for defending or prosecuting the claims at issue.

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What's the most expensive commodity on Earth?  Diamonds?  Gold?  Plutonium?  Moon rocks?  Wrong, wrong, wrong and wrong.  Ounce for ounce, the most expensive commodity appears to be wool.  Specifically, that comprising Roy Pearson's pants. 

Mr. Pearson, a lawyer and administrative law judge for the District of Columbia, has sued his dry cleaner for losing his pants and thereby failing to meet its twin pledges of "Same Day Service" and "Satisfaction Guaranteed".  The price of Mr. Pearson's drawers?  $65,462,500.00:

[Pearson] says he deserves millions for the damages he suffered by not getting his pants back, for his litigation costs, for "mental suffering, inconvenience and discomfort," for the value of the time he has spent on the lawsuit, for leasing a car every weekend for 10 years and for a replacement suit, according to court papers.

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How does he get to $65 million? The District's consumer protection law provides for damages of $1,500 per violation per day. Pearson started multiplying: 12 violations over 1,200 days, times three defendants. A pant leg here, a pant leg there, and soon, you're talking $65 million.

Worst(ed) of all, it appears the pants have been located.  They are currently housed in the office closet of the dry cleaner's lawyer.  Mr. Pearson could have them back if only he could bring himself to accept the cleaner's current settlement offer.  The trifling offer Pearson won't accept?  $12,000.00.   This, folks, is why we have lawyer jokes.  (via Howard).

Update:  ABC News has now picked up the story (with a headline that, while perhaps obvious, calls to mind our own humble effort).  The story is also linked on Drudge.  The sixty-five million dollar pants have now gone viral. 

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On Tuesday, the Pennsylvania Supreme Court decided Harkness v. Unemployment Compensation Board of Review, No. 112 MAP 2005.  Based on the caption, one could be forgiven for dismissing the case as singularly uninteresting.  It is, however, worthy of some note.  The matter required the Court to consider whether a non-lawyer's appearance before a state administrative tribunal, in this case an unemployment compensation hearing before a referee, constituted the unlicensed practice of law. 

The case fractured the temporarily-shrunken Court.  Two Justices (Cappy and Bear) joined the opinion of the court; two Justices (Eakin and Castille) were in dissent.  The case turned on the vote of Justice Saylor, who joined neither opinion, concurring in the result only.  Former Justices Nigro and Newman did not participate in decision of the matter.

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Merisant Co. v. McNeil Nutritionals, currently being tried in the E.D. Pa, may be the sweetest courtroom battle ever waged.  Merisant, the maker of Nutrisweet and Equal has sued McNeil, the manufacturer of Splenda.  The issue in the case is straightforward.  McNeil advertises Splenda as being "Made from Sugar So it Tastes Like Sugar."  Merisant claims that McNeil's advertising is fraudulent because Splenda contains no sugar at all.  McNeil counters that its claim "Made from Sugar" does not mean, and cannot be reasonably interpreted as meaning, "Made of Sugar."  Law.com reports on the trial so far:

In his opening statement Tuesday, Merisant's lead lawyer, Gregg F. LoCascio of Kirkland & Ellis in Washington, D.C., told the jury that internal corporate memos from McNeil will prove that the company knew that its advertising and packaging was misleading consumers into thinking that Splenda was safer and healthier than other artificial sweeteners.

"McNeil documents show that they knew consumers were confused and they didn't do anything to stop it," LoCascio said.

LoCascio said McNeil initially marketed Splenda with the tagline, "Made from sugar so it tastes like sugar. But it's not sugar."

But after disappointing sales, the company dropped the last sentence and sales skyrocketed, LoCascio said.

LoCascio promised the jury that, through the evidence he will present, "you will have the benefit of going behind the scenes" at McNeil by seeing internal e-mails and documents from company meetings.

That evidence, he said, will show that McNeil was not only aware of the consumer confusion it was causing, but that it "boasted" about it.

At stake is in excess of $200 million in damages, principally consisting of profits Merisant attributes to McNeil's allegedly fraudulent marketing strategy.  McNeil, of course, argues that the "Made From Sugar So It Tastes Like Sugar" campaign is not fraudulent and, in any event, Merisant should have sued long ago.  A similar action, brought by the Sugar Association, is pending in Los Angeles.

Rebecca Tushnet has a comprehaensive preview that details the pre-trial process.

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In Cole, et al. v. General Motors Corp., No. 05-31070 (pdf), a strong panel of the Fifth Circuit (King, Garza and Owen) has vacated class certification in a nationwide warranty action against GM.  In 1998 and 1999, GM marketed its Cadillac Seville with side airbags.  In 2000, GM learned that the air bag sensors were defective and could cause deployment of the airbag in the absence of a collision.  GM issued a voluntary recall notice and, despite some hitches with production of replacements, GM completed the recall in 2002.  Naturally, litigation ensued.

Bottom Line:  Regardless of whether it establishes a per se rule (and it comes close), Cole is a very powerful decision standing between the class action bar and nationwide certification of warranty claims.

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When they seek attorneys fees, of course.  Under the so-called American Rule, parties to a litigation bear their own counsel fees.  Accordingly, a litigant may recover fees from an adversary only where allowed by contract or statute.  As a general rule, fee-shifting statutes confer the right to recover fees upon "prevailing parties."  Seems simple enough, right?  Well, not for the 11th Circuit.  Its decision (pdf) in Sole v. Wyner, (No. 06-531) is on the SCOTUS's docket for argument next week (briefs).  I can't improve on LawMemo's summary of the salient facts:

Plaintiffs Wyner and Simon sued in federal district court and obtained a preliminary injunction against state park officials barring interference with plaintiffs’ enactment of a nude peace symbol at a public beach. Later in the case, plaintiffs lost their claims. The district court awarded to the plaintiffs their attorney fees related to the initial preliminary injunction. The 11th Circuit held that the plaintiffs were "prevailing parties" as to the preliminary injunction and were entitled to attorney fees.

The question for the SCOTUS is the degree to which a party must succeed on the merits to be a "prevailing party."  The 11th Circuit thinks a party need prevail only a wee bit.  The 4th (pdf) has held in substance that the word "prevailing" should be considered to mean, well, prevailing.  As in winning.  On the merits.  At the end. 

To be fair to the 11th, it's not as though the court would affirm an award of fees in connection with a successful motion for scheduling order.  Its decision in Wyner turns on its view that the plaintiff's preliminary injunction victory was, in some sense, a victory on the merits.  That is, the PI resolved a substantive issue between the parties as opposed merely to maintaining the status quo.  Still, by the time the 11th heard the case, there was no sense in which the plaintiff had prevailed on the merits of its claims.   Although an affirmance would not be the strangest thing to ever happen at the Court, this case appears as close to a slam dunk reversal as a Supreme Court case gets.

Parting Shot:  The 11th Circuit's opinion in this action is marked DO NOT PUBLISH.  Perhaps the question has been discussed before and I've missed it, but I'd be curious just often the Court finds itself granting certiorari in connection with unpublished dispositions.  Frankly, I am sick to death of finding helpful cases that are unpublished and, hence, unusable in many courts.  Fortunately, under new Fed. R.A.P. 32.1, federal courts of appeals may no longer "prohibit or restrict" the citation of unpublished opinions.  Unfortunately, new Rule 32.1 only covers unpublished opinions that are unpublished withheld hidden suppressed memory-holed issued on or after January 1, 2007.  By my lights, when your unpublished opinion winds up in the Supreme Court, you, as a court, might want to rethink your entire approach to publication.

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On Monday April 2, the SCOTUS decided Massachusetts, et al. v. EPA, No. 05-1120 (pdf).  Although the case involved issues of greenhouse gases and global warming, the case is, from a litigator's perspective, far more notable for its treatment of Article III standing.  In a nutshell, Justice Stevens's majority opinion strongly suggests (one might even say "holds") that states may possess Article III standing to pursue litigation in the federal courts even in circumstances where private citizens would not:

It is of considerable relevance that the party seeking review here is a sovereign State and not, as it was in Lujan, a private individual.

(emphasis added).  The Court also noted "the special position and interest of Massachusetts" as well as its inclination to display a "special solicitude" for the arguments of states when it comes to Article III standing.  This strikes me as strong stuff and a significant departure from the Court's prior Article III jurisprudence.

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This morning, the SCOTUS will hear argument in Leegin Creative Leather Products Inc. v. PSKS, Inc. (06-480).  Leegin is a straightforward case of resale price maintenance.  The plaintiff, Kay's Kloset, is a reseller of Leegin products.  When Leegin discovered Kay's reselling Leegin products at prices other than those Leegin required, Leegin ceased doing business with Kay's.  Kay's brought an antitrust suit.  Because retail price maintenance is per se illegal under the nearly 100-year-old Dr. Miles rule, Kay's naturally prevailed in the trial court and Fifth Circuit.  The SCOTUS agreed to hear Leegin's case.

According to SCOTUSBlog's preview:

Leegin’s main point for doing away with the per se rule for resale price maintenance agreements is that it is based upon an “antiquated common-law rule” against “alienating” the rights of property once sold, and that the Supreme Court for 30 years has been casting aside other per se rules under the antitrust laws.

Leegin's position seems to be that it is "antiquated" to insist on the passage of title to the buyer in connection with a sale of the goods -- i.e., the notion that you actually own what you buy is an anachronism.  Hyperbole aside, the case asks whether resale price maintenance is always anti-competitive such that Dr. Miles' prescription for per se proscription remains indicated (sorry for that).  Leegin argues it does not and that the Court should instead view a seller's post-sale retention of rights -- here, the right to dictate the resale price -- through the lens of the "rule of reason."

Medill's On the Docket has more on the facts and procedural history; the Antitrust Review has more on the law and policy.

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We all agree no contemporary means of punishment can satisfy our collective desire for retribution against email spammers.  That said, the spectacle of spammers being tied up in knots by litigation is as satisfying as anything legal can be.  John Leyden of The Register reports:

e360 Insight, the Illinois-based mass mailer suing Spamhaus for calling it a spammer, is being sued in California for spamming.  David Linhardt, individually, and his firm e360 Insight are among the defendants in a lawsuit brought by William Silverstein, an aggrieved spam recipient.  . . . [e360 Insight's] messages violated Federal anti-spam laws and California state laws because they were allegedly sent through compromised machines and with forged headers, offences against the Federal CAN-SPAM Act.

Mr. Silverstein is seeking statutory and punitive damages from e360.  Godspeed, Sir.

Parting Sho[r]t:  Spamhaus, spamming, spammer, spam.  Hmmm.

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At Baker Botts's Sct Today newsletter/blog/publication thingee, Aaron Streett posts a humorous aside on Tuesday's SCOTUS ruling in the Travelers case:

When Chief Justice Roberts testified in his confirmation hearing that he hoped to increase unanimity on the Court, skeptical observers did not realize that he had a secret plan: grant more Ninth Circuit cases. That strategy continued to pay dividends today, as the Court unanimously reversed the CA9 for the sixth time this Term, and the CA9 ran its overall record to 0-9. Only time will tell whether the Ninth Circus can match the 1976 Buccaneers’ 0-14 mark. You may recall that the Bucs’ coach, when asked about the execution of the Tampa Bay offense, responded, “I’m in favor of it.” While no one is proposing execution here (which the CA9 would stay anyway), you have to admit that this is getting kind of ridiculous.

Good stuff.  Even the ostensibly serious part of the discussion is funny.  Well, funnier than mine, at any rate.

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Womble Carlyle's South Carolina Appellate Law Blog highlights an opinion penned by a jurist who, from all appearances, suffers from thesaurophilia:

The cognoscenti of federal preemption jurisprudence bestow panoramic application so as to limit state common law tort actions. We decline to accept this broad-brush federal judicial barricade.

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Importantly, scholars on basic conflict preemption principles inculcate in regard to the fundamental elixir of the rule when juxtaposing federal/state constitutional analysis. If a state statute, administrative rule, or common law cause of action conflicts with a federal statute, it is incontestable that the state law has no efficacy. It is pellucid that the Supremacy Clause does not bless unelected federal judges with carte blanche to utilize federal law as a conduit to impose their own views of tort law on the States. Assumptively, we recognize that common law tort actions are historically within the scope of the States’ police powers and are safe from preemption by a federal statute unless Congress reveals a clear and manifest purpose to preempt.

If you are a budding legal writer, take note how the five-dollar words quickly add up to a two-bit piece of writing.  (via the Conspiracy)

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In a truly weird lawsuit, a federal jury in Salt Lake City, Utah has awarded Proctor & Gamble $19.5 million in connection with P&G's Lantham Act claims against Amway Corp. distributors.  The Canton Repository summarizes the strange facts thusly:

[The case] was one of several the company brought over rumors alleging a link with the company’s logo and Satanism.

Rumors had begun circulating as early as 1981 that the company’s logo — a bearded, crescent man-in-moon looking over a field of 13 stars — was a symbol of Satanism.

The company alleged that Amway Corp. distributors revived those rumors in 1995, using a voice mail system to tell thousands of customers that part of Procter & Gamble profits went to satanic cults.

According to the report, the defendant Amway distributors are "shocked" by the verdict and damages award.  Plainly, this is not a case in which the devil gets the hindmost.  (via Fark).  Snopes and UrbanLegends have more on this rather dated calumny.

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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.

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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.

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