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U.S. District Court for the District of CT Determines that Connecticut’s Medical Marijuana Law Protects Qualifying Patients from Workplace Discrimination

Posted in Connecticut Courts, Employment Litigation, Litigation Trends, Rhode Island Courts

This article is Part Five of our Medical Marijuana and the Workplace: Recent Decisions from New England Courts Provide Significant Protections to Medical Marijuana Patient Employees Five-Part Series. See Parts OneTwoThree and Four for reference.

A federal court in Connecticut has continued the recent trend of New England courts recognizing a cause of action under state law for patient-employees who are allegedly discriminated against due to their status as qualifying medical marijuana patients.  In Noffsinger v. SSC Niantic Operating Co. LLC, No. 3:16-CV-01938(JAM), 2017 WL 3401260 (D. Conn. Aug. 8, 2017), the United States District Court for the District of Connecticut denied a motion to dismiss state law claims by an individual whose job offer was rescinded as a result of her testing positive for marijuana.  Connecticut enacted a medical marijuana act in 2012—the Palliative Use of Marijuana Act (“PUMA”), which allows the use of medical marijuana by “qualifying patients” with certain debilitating conditions and expressly prohibits discrimination against qualifying patients by schools, landlords and employers.  See Conn. Gen. Stat. § 21-a-408p(b).

Plaintiff Katelin Noffsinger was diagnosed with post-traumatic stress disorder in 2012 and became a qualifying patient under PUMA in 2015.  Thereafter, she was recruited for and offered the position of director of recreational therapy at a nursing facility in Connecticut in 2016, and immediately accepted the offer.

Prior to starting her employment, Ms. Noffsinger was advised that she would need to take a pre-employment drug test.  She informed a representative of the defendant employer that she suffered from PTSD and was prescribed medical marijuana as a qualifying patient pursuant to PUMA, and provided her employer with a urine sample for the drug test.  Plaintiff further advised that she only consumed a capsule of synthetic form of marijuana, Marinol, in the evening prior to bed, and that she would never be under its influence in the workplace.  The day before Plaintiff expected to start work, she was informed that the offer was rescinded based on the fact that she tested positive for the use of marijuana.

Plaintiff filed suit alleging three counts; namely, a violation of PUMA’s anti-discrimination provision; wrongful rescission of a job offer in violation of public policy; and negligent infliction of emotional distress.  The employer removed the matter to Federal court.  The employer’s main defense was that PUMA was preempted by federal statute; to wit, the Controlled Substances Act (“CSA”), the Americans with Disabilities Act (“ADA”), and the Food, Drug, and Cosmetic Act (“FDCA”).

The Court first addressed the employer’s preemption argument and its underpinnings in the Supremacy Clause of the U.S. Constitution.  The Court discussed four potential bases for federal preemption by Congress: (1) express preemption; (2) preemption where Congress has manifested an intent to occupy the bounds of a particular regulatory field (“field preemption”); (3) preemption of state law that stands as an obstacle to the objectives of federal law (“obstacle preemption”); and (4) preemption where compliance with both the federal and state law is impossible (“conflict preemption”).  The employer argued that because PUMA was an obstacle to the objectives of Congress expressed in the CSA, ADA, and FDCA, those three federal statutes preempted PUMA.

The Court opined that obstacle preemption is applicable where the state law in question gives rise to an actual conflict with an overriding congressional objective.  Thus, there is no preemption unless that the conflict is direct and in such a manner that the two acts cannot be reconciled or consistently applied.

The employer argued that the CSA preempts PUMA because by authorizing the medical use, possession, cultivation, sale, dispensing, and distribution of marijuana, PUMA directly ran afoul of the main objective of the CSA—to make it a federal crime to use, possess, or distribute controlled substances (in this circumstance, marijuana).  The employer explained that the CSA classifies marijuana as a Schedule I substance, and allows no exceptions for medical use.  The Court regarded the employer’s argument as too broad and instead focused on PUMA’s anti-discrimination provision, rather than PUMA in its entirety.  The employer had cited several cases arising under the medical marijuana laws of other states that have been discussed in previous installments of this series. See Emerald Steel Fabricators, Inc. v. Bureau of Labor & Indus., 348 Or. 159, 230 P.3d 518 (2010); Coats v. Dish Network, LLC, 2015 CO 44, 350 P.3d 849 (Colo. 2015); Casias v. Wal-Mart Stores, Inc., 695 F.3d 428 (6th Cir. 2012); Stanley v. County of Bernalillo Com’rs, 2015 WL 4997159 (D.N.M. 2015); see also Part 2.  However, none of the cases relied upon interpreted a law with an express anti-discrimination provision, and the Court distinguished them on that basis.  The Court then directed its attention to the Rhode Island Superior Court’s recent decision holding that the CSA did not preempt the specific anti-discrimination provision of Rhode Island’s medical marijuana law.  See Callaghan v. Darlington Fabrics Corp., 2017 WL 2321181 (R.I. Super. Ct. 2017); see also Part 3.  The Court concluded that the provision at issue in Connecticut’s PUMA was similar to the statute that had survived a preemption challenge in Callaghan, and that both statutes regulate the employment relationship—an area in which states have broad authority to regulate—while the CSA does not contain a specific prohibition on employers hiring applicants who use controlled substances.

The employer also argued that the ADA preempts PUMA because the ADA occupies the area of protecting those with disabilities from employment discrimination.  The employer noted that the ADA contains a specific provision stating that an employee or applicant who uses drugs illegally is not a “qualified person with a disability” protected by the ADA, when the employer acts on the basis of that person’s illegal drug use  42 U.S.C.A. § 12114(a).  The ADA also specifically authorizes a covered employer to prohibit the illegal use of drugs and the use of alcohol in the workplace by employees.  42 U.S.C.A. § 12114(c)(1).  In addition, the ADA provides that drug testing is not a violation of the ADA, 42 U.S.C. A. § 12114(d), and also provides that an employer may “hold an employee who engages in the illegal use of drugs or who is an alcoholic to the same qualification standards for employment or job performance and behavior that such entity holds other employees, even if any unsatisfactory performance or behavior is related to the drug use or alcoholism of such employee.” 42 U.S.C.A. 12114(c)(4).

The Court held that the ADA did not preempt PUMA’s anti-discrimination provision.  The Court first emphasized that the matter before it did not involve the use of marijuana by Plaintiff in the workplace, and that PUMA explicitly declines to authorize workplace use of medical marijuana.  See Conn. Gen. Stat. §§ 21a-408p(b)(3), 21a-408p(b)(2). The Court disposed of the “qualification” arguments by explaining that the wording of the ADA also states that the qualification standard must be related to an individual’s job performance and their behavior in the workplace.  The Court found that there was no contention that Plaintiff’s use of medical marijuana would adversely affect her performance.  Thus, the Court held that the employer had failed to show any conflict between the ADA and PUMA’s anti-discrimination provision that would support a finding of preemption.  Finally, the Court rejected the employer’s assertion that the FDCA preempted PUMA’s anti-discrimination provision, reasoning that because the FDCA does not regulate employment, PUMA does not conflict or pose an obstacle to the objectives of the FDCA.

The employer also argued that PUMA’s anti-discrimination provision did not create a private cause of action upon which Plaintiff could rely.  Thus, as with the Rhode Island statute at issue in Callaghan, see Part 3, the question was whether an implied right of action exists under PUMA.  The Court reasoned that Plaintiff, as a qualifying patient, certainly falls within the class of those the statute was enacted to benefit, and that there was no indication that the legislature meant to deny to patients such a right.  Allowing a private cause of action would help to effectuate the legislative goal of combatting workplace discrimination for medical marijuana patients.  The Court therefore held that a private cause of action under PUMA for work place discrimination existed and that to state otherwise would render the protection a nullity.

The Court also rejected an Equal Protection argument proffered by the employer, because the legislature could, on a rational basis, favor those who are qualifying patients compared to those that use marijuana illicitly and for non-medical purposes.  The Court did dismiss the claim for wrongful discharge in violation of public policy, as the private cause of action recognized by the court served to vindicate the public policy at issue.  However, the negligent infliction of emotional distress claim was allowed to remain.

Connecticut employers should be reviewing their drug testing policies as they relate to applicants and current employees, as well as informing executives, supervisors, and managers of their obligations under PUMA’s anti-discrimination provision.  Schools and landlords should also exercise caution, as PUMA’s anti-discrimination provision applies to them as well.

Florida Supreme Court’s Recent Decision Places Objections to Amendment 7 Discovery on Life Support

Posted in Florida Courts, Medical Malpractice

Since 2004, the Florida Supreme Court has examined a series of objections raised by defendants to avoid producing records of “adverse medical incidents.”  In each case, the Court has found that Amendment 7 to the Florida Constitution, which grants broad rights of record access to medical patients, abrogates any Florida statute that would otherwise prohibit discovery, including statutes that previously exempted from discovery any records of investigations, proceedings, and/or peer review panels. Undaunted, defendants have continued to object to Amendment 7 discovery requests, using new and refined theories in response to each court decision. On October 26, 2017, the Florida Supreme Court appeared to have put an end to many of these creative defense tactics in Edwards v. Thomas.

 

History of Amendment 7

In 2004, the citizens of Florida voted to amend the Florida Constitution to allow nearly unfettered access to records of “adverse medical incidents.” This amendment, commonly referred to as Amendment 7, entitles any patient to records related to a health care facility’s “medical negligence, intentional misconduct, and any other act, neglect, or default that caused or could have caused injury to or death of a patient.” The stated purpose of the amendment was to “lift the shroud of secrecy from records of adverse medical incidents and make them widely available” because such records “may be important to a patient.” Although a lawsuit does not need to be filed to access these records, the issue seems particularly germane in medical negligence actions.

Before Amendment 7, Florida statutory law prohibited discovery of records of adverse medical incidents, which gave defendant hospitals a distinct advantage over medical negligence plaintiffs. These records tend to shed light on what a defendant hospital knew about the qualifications of attending physicians, the adequacy of its policies and procedures, and its own analysis of the particular medical incident at issue. After Amendment 7’s enactment, extensive litigation has sought to define the amendment’s scope, primarily with regard to what health care facilities can withhold from requesting patients, culminating in the opinion in Edwards v. Thomas.

 

Florida Supreme Court’s Decision in Edwards v. Thomas

In Edwards v. Thomas, the Florida Supreme Court was asked to decide if records from external peer review reports are discoverable under Amendment 7, and what it means for documents to be “made or received in the course of business.” The defendant hospital had refused to produce external peer review reports at issue, maintaining “that certain requested records did not relate to ‘adverse medical incidents,’ were not ‘made or received in the course of business,’ were protected by attorney-client privilege, and were protected as opinion work product.”

The trial court granted plaintiff’s motion to compel the defendant hospital to produce specific reports listed in the hospital’s privilege log “relating to attorney requested external peer review.” However, the Second District Court of Appeal quashed, in part, the trial court’s order on the basis that the external reports were not “made or received in the course of business” per Amendment 7’s requirements, and that they did not relate to an adverse medical incident. Specifically, the Second District Court of Appeal determined that the documents were not “made or received in the course of business” because the records were created by an expert retained for the purposes of litigation. The Second District also stated that the report did not relate to adverse medical incidents because the third party’s review was not part of the defendant hospital’s regular or routine peer review process.

In its analysis, the Florida Supreme Court focused on the text of Amendment 7, which states in full:

(a) In addition to any other similar rights provided herein or by general law, patients have a right to have access to any records made or received in the course of business by a health care facility or provider relating to any adverse medical incident.

(b) In providing such access, the identity of patients involved in the incidents shall not be disclosed, and any privacy restrictions imposed by federal law shall be maintained.

(c) For purposes of this section, the following terms have the following meanings:

(1) The phrases “health care facility” and “health care provider” have the meaning given in general law related to a patient’s rights and responsibilities.

(2) The term “patient” means an individual who has sought, is seeking, is undergoing, or has undergone care or treatment in a health care facility or by a health care provider.

(3) The phrase “adverse medical incident” means medical negligence, intentional misconduct, and any other act, neglect, or default of a health care facility or health care provider that caused or could have caused injury to or death of a patient, including, but not limited to, those incidents that are required by state or federal law to be reported to any governmental agency or body, and incidents that are reported to or reviewed by any health care facility peer review, risk management, quality assurance, credentials, or similar committee, or any representative of any such committees.

(4) The phrase “have access to any records” means, in addition to any other procedure for producing such records provided by general law, making the records available for inspection and copying upon formal or informal request by the patient or a representative of the patient, provided that current records which have been made publicly available by publication or on the Internet may be “provided” by reference to the location at which the records are publicly available.

Art. X, § 25, Fla. Const. (emphasis added).

The Court found the language of Amendment 7 clear and unambiguous, and that it “conveys a clear and definite meaning.” In light of this, the Court was obligated to apply the unequivocal meaning of the plain language. The Court noted that the amendment provides for no limitation on the types of adverse medical incident reports and no qualifying provision that restricts the scope of discoverable records to those previously prohibited by the Legislature. In other words, the Court found that the amendment’s scope was not restricted to adverse medical incident records previously protected by statute:  “The prior statutory protections served only as an explanation for Amendment 7’s genesis, rather than a limitation on the amendment’s broad application. Moreover, in the cases since Buster, many courts have expanded upon Buster’s explanation by interpreting the amendment’s right as an absolute right to review adverse medical incident reports. Therefore, as the plain language of the amendment mandates, we hold that Amendment 7 was aimed at eliminating all discovery restrictions on ‘any records . . . relating to any adverse medical incident.’” (emphasis in original).

I. External Peer Review Reports

The first issue the Supreme Court decided was whether external peer review reports fall within the purview of Amendment 7 and whether external peer review committees can be a “similar committee” as articulated in the constitutional provision. The Court considered whether there are differences between documents prepared in compliance with Florida statutes and those “documents prepared or produced at the specific request of the defendant hospital’s attorney for use in litigation.” However, as stated previously, the Court recognized the clear and broad language of the amendment (i.e., “any records” and “any adverse medical incident”), and concluded that its scope went beyond adverse medical incident records previously protected by statute.  Thus, the Court determined that external peer review committees “cannot logically be excluded from Amendment 7’s application simply because they are in addition to the base-level, statutorily-required risk management committees. Such a result would be directly contrary to the intent and express words of Florida voters to have greater access to adverse medical incident records than they did before the passage of Amendment 7.” The Court explained that a contrary conclusion would allow defendants to avoid their obligations under Amendment 7 by simply outsourcing adverse medical incident reporting to third party committees separate from those required by Florida law.

II.“In the Course of Business” Requirement

Amendment 7 provides explicit definitions of its major terms, except for “in the course of business.” Until the Edwards opinion, courts had not interpreted the term, either. The defendant hospital in Edwards contended that the external peer review reports at issue were not created “in the course of business” because they were not drafted in accordance with the defendant hospital’s statutory documentation and reporting requirements, but rather were requested in anticipation of litigation.

However, the Florida Supreme Court disagreed, finding that just because the defendant hospital chose to outsource its peer review needs did not exempt third party reports from the scope of Amendment 7. If that were the case, a hospital could simply outsource all of its peer review and thereby avoid producing any records. Moreover, the records produced by an external peer review committee are the same category of reports that hospitals otherwise would maintain or receive in their course of business, even in the absence of any statutorily-mandated duty to do so.

III. Fact Work Product Privilege

The last issue the Court considered was whether the external peer review reports at issue were protected from discovery under the fact work product privilege. Again, the Court considered the plain language of Amendment 7 and its goal of providing a broad right to know about adverse medical incidents. The Court concluded that Amendment 7 nullifies any fact work product privilege that may have attached to adverse medical incident reports. Otherwise, the amendment could be rendered meaningless merely by having an attorney request records following an adverse medical incident.

 

Future of Amendment 7 Challenges

In Edwards, the Florida Supreme Court has severely limited potential objections to Amendment 7 discovery requests. However, the Edwards decision did not address opinion work product or the attorney-client privilege. Given the high unlikelihood of overruling good-faith opinion-word product or attorney-client privileges, defendants may find that no other objections would be valid with regard to records of “adverse medical incidents.”

 

Florida Plaintiffs Challenge the Constitutionality of Florida’s Asbestos and Silica Fairness and Compensation Act

Posted in Asbestos Litigation, Toxic Tort

The Florida Asbestos and Silica Fairness and Compensation Act (the “Act”) has governed asbestos litigation in Florida nearly seamlessly for more than a decade until a series of recent challenges threw a wrench into the system by calling into question its constitutionality.

The purpose of the Act, which came into effect in June 2005, is to preserve funds of viable defendants in asbestos litigation to ensure compensation for those who develop or may develop asbestos-related cancers or an actual physical impairment caused by asbestos, and enhance the ability of the judicial system to supervise and control asbestos litigation. See § 774.202. While Defendants will argue the Act has served its purpose, Plaintiffs contend quite the contrary. In three separate motions filed in the Robert G. Clark, et. al. v. Borg Warner Corporation, et. al., Case No. 14-027985, Miami-Dade County, Florida case, Plaintiffs attempt to undo the legislative reform of asbestos litigation in Florida by challenging the constitutionality of the following provisions of the Act: (1) the pleading requirements for establishing an alleged non-malignant asbestos-related physical impairment; (2) the limitations on the liability of sellers and retailers; and (3) the abolition of punitive damages.

In the first of the three motions, Plaintiffs address the provisions of the Act, which govern the pleading requirements applicable to plaintiffs pursuing claims for non-malignant asbestos-related diseases. See Fla. Stat. §§ 774.204(1) and 774.205(2). These provisions require a plaintiff to demonstrate a “physical impairment” by requiring them to file prima facie evidence supporting his/her alleged asbestos-related injury along with their complaint. In Clark, while Plaintiffs provided medical documentation, which they maintain establishes Mr. Clark’s alleged diagnosis of asbestosis, they concede not only that the documentation provided does not meet the requirements of the Act, but also that they will never be able to meet those requirements. As such, they argue that these provisions of the Act should be declared unconstitutional on the following grounds: (1) they are procedural in nature, and therefore violate the separation of powers provision of the Florida Constitution; (2) they restrict access to the Courts; and (3) they violate Plaintiffs’ right to equal protection.

Plaintiffs’ first argument in support of this motion is based on the premise that the Act is procedural in nature, and therefore violates the separation of powers provision of the Florida Constitution, which grants the Florida Supreme Court exclusive authority to enact procedural laws. Plaintiffs look to the Florida Supreme Court’s ruling in Massey v. David, 979 So.2d 931, 936 (Fla. 2008) (citing Allen v. Butterworth, 756 So.2d 52, 59 (Fla. 2000)), which states “[g]enerally, the Legislature is empowered to enact substantive law” and the Florida Supreme Court “has the authority to enact procedural law.” In Massey, the Court described the difference between procedural and substantive law as follows:

 

Substantive law has been defined as that part of the law which creates, defines, and regulates rights, or that part of the law which courts are established to administer…On the other hand, practice and procedure encompass the course, form, manner, means, methods, mode, order, process or steps by which a party enforces substantive rights…

 

Massey, 979 So.2d at 936-37. Relying on the Courts explanation in Massey, Plaintiffs argue that the Act is clearly not substantive in nature because it does not “create, define or regulate” any rights that did not already exist at common law. Instead, Plaintiffs contend that the Act is procedural because it (1) creates priorities among injured plaintiffs by giving priority to plaintiffs that can demonstrate actual physical impairment; (2) regulates the manner in which an injured plaintiff can enforce substantive rights that existed at common law; and (3) conflicts with the Florida Rules of Civil Procedure by requiring harsher pleading requirements.

Next, Plaintiffs contend that the provisions of the Act governing the pleading requirements violate Florida’s constitution by restricting access to the Courts for those plaintiffs, like Mr. Clark, who are injured but not considered as having a “physical impairment” as defined by the Act. Plaintiffs again look to the Florida Supreme Court for guidance citing the two-part test set out in Kluger v. White, 281 So.2d 1, 4 (Fla. 1973), which precludes the Legislature from restricting access to the courts “without providing a reasonable alternative to protect the rights of the people of the State to redress for injuries, unless the Legislature can show (1) an overpowering public necessity for the abolishment of such right, and (2) no alternative method of meeting such public necessity can be shown.” Plaintiffs argue the Legislature failed to meet either prong.

Lastly, in support of their first motion, Plaintiffs argue that the Act violates the Equal Protection Clause of the Florida Constitution. First, Plaintiffs contend that the Act denies recovery to plaintiffs based on arbitrary criteria distinguishing those it deems have a physical impairment and those that do not. Second, Plaintiffs assert that the Act fails to meet the requirements of the Florida Supreme Court’s rational basis set out in McCall v. United States, 134 So. 3d 894, 901 (Fla. 2014). The McCall test requires a determination of (1) whether the challenged statute serves a legitimate governmental purpose, and (2) whether it was reasonable for the legislature to believe that the challenged classification would promote that purpose. The intent of the Act was to preserve funds of viable defendants in asbestos litigation to ensure that plaintiffs who develop asbestos-related cancers can be compensated and continue to contribute to the state economy.  Plaintiffs argue that there is a lack of data to support the stated purpose of the Act and the limitation of the number of cases filed by plaintiffs who were injured, but not “impaired” as required by the Act’s pleading requirements does not bear a rational basis to that purpose.

In their second motion, Plaintiffs challenge the Act’s prohibition of strict liability claims against sellers and retailers of asbestos-containing products. They contend that this provision, Fla. Stat. §774.208, violates the Equal Protection Clause of the Florida Constitution by creating the following arbitrary distinctions: (1) discriminating among plaintiffs injured by defective products by making an unnecessary distinction between those who are injured by asbestos and those injured by all other defective products; and (2) wrongfully distinguishing between product sellers based solely on the product they sell; i.e., by distinguishing between sellers of asbestos-containing products and sellers of all other defective products. Plaintiffs again assert that this provision of the Act fails the rational basis review under Florida’s McCall test, as set forth above, given the lack of legislative findings to support the purpose of the statute. And, even if the Court were to decide that the Legislature had a legitimate governmental purpose for this provision, preventing all plaintiffs from asserting strict liability claims against sellers and retailers is not rationally related to achieving the stated goals of preserving assets to compensate future plaintiffs or protect Florida’s economy. Notably, Plaintiffs failed to aver in their motion that they are unable to assert claims for strict liability against any of the defendants named in their complaint. So whether they even have standing to bring this motion in the Clark case is yet to be determined.

In their third and arguably most significant motion, Plaintiffs seek punitive damages against one of the defendants in Clark and challenge the constitutionality of the Act’s provision that abolishes punitive damages, Fla. Stat. §774.207. In the motion, Plaintiffs first provide the bases for why punitive damages are warranted against the defendant in question. Next, Plaintiffs present their constitutional challenge of the Act’s prohibition of punitive damages arguing that it violates the Equal Protection Clause of the Florida Constitution. Plaintiffs contend this provision creates an arbitrary distinction –this time, by immunizing manufacturers of asbestos–containing products against punitive damages, even when they have engaged in grossly negligent or intentional misconduct, while manufacturers of all other products remain subject to punitive damages in Florida. Plaintiffs also contend that the Act’s bar on punitive damages fails the rational basis test under McCall, because the legislative record supposedly does not support the stated purpose of imposing a punitive damages bar against defendants in asbestos. According to Plaintiffs, regardless of whether this provision serves a legitimate governmental purpose, the Act does not preserve assets for sick plaintiffs by precluding punitive damages in a small number of Florida lawsuits.

These motions are still in a very preliminary posture and discovery relevant to the constitutional challenges is currently being conducted. Nevertheless, they will be closely watched, as the outcome could have far-reaching effects on asbestos litigation in Florida.

Pennsylvania Frye Test Precludes Two Experts from Testifying in Cashmere Bouquet Talc Case

Posted in Asbestos Litigation

On September 25, 2017, the Court of Common Pleas of Pennsylvania in Philadelphia County precluded two of plaintiffs’ experts from testifying in the Brandt v. The Bon-Ton Stores, Inc., et al. asbestos-related talcum powder case, effectively ending the case. Both Sean Fitzgerald and Dr. Ronald Gordon were precluded from offering expert testimony regarding the asbestos content in the Cashmere Bouquet talcum powder at issue.

 

The Brandt case involved a plaintiff who claimed she developed mesothelioma as a result of exposure to asbestos from using Cashmere Bouquet talcum powder. Defendants moved, in part, to challenge the opinions of plaintiffs’ experts regarding the asbestos content of Cashmere Bouquet on grounds the experts did not employ generally accepted methodologies to support their opinions.  During the hearing on the defendants’ challenge, the plaintiffs’ experts both conceded the tests they conducted were insufficient to differentiate between asbestos fibers and cleavage fragments—particles that look similar to asbestos fibers. The plaintiffs argued their experts’ methodologies for testing the asbestos content in Cashmere Bouquet were fodder for cross examination, and the case should proceed to the jury.

 

After four days of testimony from the plaintiffs’ experts and the defendants’ expert, Dr. Matthew Sanchez, the court issued a nine-page memorandum opinion excluding Mr. Fitzgerald’s and Dr. Gordon’s opinions as unreliable, “inherently unscientific,” and not generally accepted pursuant to the Frye test, which Pennsylvania continues to follow.  See Frye v. United States, 293 F. 1013, 1014 (D.C. Cir. 1923). The court painstakingly detailed the experts’ methodologies for determining the alleged asbestos content in Cashmere Bouquet, and concluded that while some of the methodologies employed by Mr. Fitzgerald and Dr. Gordon were generally accepted in the scientific community, each expert modified, varied, or deviated from those generally accepted methodologies, making their opinions unreliable under Frye.

 

Pennsylvania is one of few states that still apply the Frye “general acceptance” test for determining whether an expert’s opinion is admissible.  The overwhelming majority of states across the country follow the standard set forth in Daubert v. Merrill Dow Pharmaceuticals, Inc. for evaluating admissibility of expert testimony.  Under Daubert, an expert’s testimony must be both relevant and reliable; however, unlike the Frye standard, which uses general acceptance as its cornerstone, Daubert does not require or consider whether the methodologies employed by the expert are generally accepted among the scientific community.

 

It is difficult to predict whether the methodologies employed by the plaintiff’s experts in the Brandt case would have survived a Daubert challenge.  Both experts conceded that had they followed generally accepted methodologies for testing asbestos in talcum powder, they likely would have been unable to identify asbestos in Cashmere Bouquet, and it is difficult to imagine a jurisdiction where such “inherently unscientific” testimony would be sufficient to submit to a jury.  Nevertheless, jurisdictions following Daubert will not evaluate whether such testing methods are generally accepted in the scientific community. Therefore, it remains to be seen what impact the exclusion of Mr. Fitzgerald’s and Dr. Gordon’s expert opinions in the Brandt case will have generally on asbestos-related talcum powder litigation.  Regardless, the ruling should be welcomed by defendants facing liability in this next wave of mass tort litigation.

Conducting Business in Illinois May Be Insufficient to Establish Personal Jurisdiction

Posted in Premises Liability

According to the Supreme Court of Illinois, merely conducting business within that state is insufficient to satisfy the standards for personal jurisdiction established by the U.S. Supreme Court in Daimler AG v. Bauman, 134 S. Ct. 746 (2014).  The Illinois Supreme Court recently explored that issue in Aspen American Insurance Company v. Interstate Warehousing, Inc., where a plaintiff headquarted in Indiana attempted to bring an action in Illinois for damages allegedly caused by the collapse of a warehouse in Michigan.  Plaintiff Aspen brought a subrogation action in Cook County, Illinois seeking to recover damages allegedly caused by the collapse of a warehouse near Grand Rapids, Michigan, which was owned by Defendant Interstate Warehousing. The Defendant, which is headquartered in Indiana, operates eight warehouses across the country, one of which is in Joliet, Illinois.

 

In its pleadings, the Plaintiff sought to rely upon the Defendant’s Joliet warehouse to establish personal jurisdiction in Illinois. In its motion to dismiss for lack of personal jurisdiction, the Defendant did not dispute that it was doing business in Illinois. Instead, the Defendant argued that the business it was conducting in Illinois was insufficient to subject it to general personal jurisdiction under the U.S. Supreme Court’s decision in Daimler AG v. Bauman. Relying on Daimler, the Defendant explained that the Plaintiff failed to establish that the Defendant was either domiciled or “at home” in Illinois. The circuit court disagreed, and denied the Defendant’s motion. A divided appellate court affirmed the dismissal denial of the motion to dismiss.

                                                                                                                                                                                   

Writing on behalf of a unanimous Court, Justice Burke reversed the lower court decisions, holding that the Plaintiff failed to make a prima facie showing that the Defendant was “essentially at home” in Illinois, as required by Daimler. More specifically, the Court determined that the Plaintiff’s burden was to show that the Defendant was incorporated or had its principal place of business in Illinois, or in the alternative, that the Defendant’s contacts with Illinois were so substantial that an exception was warranted. In making its determination, the Court looked at Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952), in which the defendant, a Philippines company, was forced to relocate from the Philippines to Ohio during World War II. In that case, the Supreme Court found that Ohio was “the center of the corporation’s wartime activities” and, effectively, a “surrogate for the place of incorporation or head office.” Perkins, 342 U.S. at 448.

 

In the Aspen case, the Defendant Interstate Warehousing was an Indiana corporation with its principal place of business in Indiana, which was registered to conduct business in Illinois and employed the general manager of a warehouse in Joliet. The Plaintiff pointed both to the Defendant’s registration with the Illinois Secretary of State and the business it carried out at its Joliet warehouse as establishing jurisdiction; however, the Illinois Supreme Court ultimately concluded that those facts were insufficient either to render the Defendant at home in the state or to establish that the Defendant’s contacts constituted the type of exceptional connection to the forum that was recognized by the Perkins Court. The Aspen Court reasoned that “if the operation of the warehouse was sufficient, in itself, to establish general jurisdiction, then the defendant would also be at home in all the other states where its warehouses are located.” That kind of reasoning already was expressly rejected by the U.S. Supreme Court in Daimler.

 

Therefore, the Illinois Supreme Court reversed the lower court rulings and remanded the case to be dismissed for lack of personal jurisdiction. The Aspen decision is consistent with the Delaware Supreme Court’s decision last year that merely registering to do business in that state is insufficient to establish personal jurisdiction.  See Genuine Parts Co v. Cepec (137 A.3d 123 (Del. 2016). Earlier this year the U.S. Supreme Court left open the question of whether registration to do business may constitute consent to personal jurisdiction.  See BNSF Railway Co. v. Tyrrell (May 30, 2017), slip op. at 12.  Accordingly, the issue remains unsettled.  However, the Aspen and Genuine Parts decisions suggest that until the U.S. Supreme Court weighs in, momentum currently runs against the use of business registration statutes to establish personal jurisdiction.