Jury_Box_Purchased_8-13-14_iStock_000010826297SmallSince the United States Supreme Court’s decision in Daimler AG v. Bauman in 2014, general jurisdiction over a corporate defendant has become a hot topic. See 134 S. Ct. 746 (2014). In most jurisdictions, it is no longer sufficient for a plaintiff to establish a corporate defendant was registered to do business in the jurisdiction at issue or that the corporate defendant had sales and/or derived revenue in the jurisdiction at issue. Rather, there is a heightened inquiry and heavier burden placed on a plaintiff.

The Daimler Court held that a corporate defendant is deemed “at home” for purposes of establishing general jurisdiction over it in the forum where it is incorporated and in the forum where it maintains its principal place of business. Outside of those two circumstances, a corporate defendant will be considered at home only in exceptional cases.

One such exceptional case, as noted by the Daimler Court, can be found in the Perkins v. Benguet Consol. Mining Co. case wherein a corporate defendant moved its operations to Ohio out of Japanese occupied Philippines during World War II. See 342 U.S. 437 (1952). In Perkins, the president of the corporate defendant company kept an office, maintained company files, and oversaw the company’s activities in Ohio sufficient to render the defendant essentially at home in Ohio.

Many courts have interpreted the Court’s opinion in Daimler to place a heavy burden on plaintiffs to present such an exceptional case. With such a heavy burden placed on plaintiffs, the question many defendants are asking is: what amount of discovery are plaintiffs entitled to take in order to establish general jurisdiction over a corporate defendant?

The Delaware Superior Court recently faced this very question. In April 2016, the Delaware Supreme Court issued a decision in Genuine Parts Co. v. Cepec limiting the circumstances in which a defendant is deemed to be subject to general jurisdiction in the State of Delaware pursuant to Daimler. 137 A.3d 123 (Del. 2016). Shortly thereafter, Defendant Union Carbide Corporation (“UCC”) filed motions to dismiss for lack of personal jurisdiction pursuant to Daimler and Cepec in 211 cases pending in New Castle County, Delaware. The plaintiff in one of those cases – Charles Kimble – responded by serving written discovery requests and seeking the deposition of UCC’s corporate representative. In addition, plaintiffs in six additional cases[1] (out of the 211 with pending motions to dismiss) sought the deposition of The Dow Chemical Company (“Dow”) alleging Dow, as a Delaware corporation and parent to UCC, held some information relevant to whether the Delaware Superior Court could exercise general jurisdiction over UCC.

UCC responded to written interrogatories and document requests providing its basic corporate information and publicly available documents detailing its limited contacts with Delaware and its relationship with Dow. However, UCC and Dow both filed separate motions to quash the depositions of their corporate representatives (“Motions”). In their Motions, UCC and Dow argued Plaintiffs failed to provide “some indication” of a plausible basis for their
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de-courtJudge Vivian L. Medinilla of the Delaware Superior Court recently denied defendant Monsanto Company’s motion to dismiss on the basis of forum non conveniens (“FNC”) in Barrera v. Monsanto Company.  This ruling, along with a similar ruling issued by Judge Andrea L. Rocanelli one day prior in Gilchrist v. GlaxoSmithKline, LLC, reaffirms and provides new strength to Delaware’s long-standing precedent of offering great deference to a plaintiff’s choice of forum and requiring a defendant to establish “overwhelming hardship” in order to dismiss a case on FNC grounds.

In Barrera, the Court considered the claims of three Plaintiffs alleging their cancers were caused by Monsanto’s glyphosate pesticide known as Roundup.  The case’s only connection to Delaware was Monsanto’s status as a Delaware corporation (although Monsanto’s principle place of business is in Missouri).  None of the Plaintiffs lived in Delaware or alleged any exposure to Roundup in Delaware.  Rather, Plaintiffs alleged exposure to Roundup in Michigan, New York, Oregon, Texas, Virginia, and Washington.  Monsanto therefore asserted that Plaintiffs’ claims would be more properly adjudicated in the respective jurisdictions of their alleged exposures and moved to dismiss the Delaware action on FNC grounds.

In analyzing Monsanto’s motion, the Barrera Court considered the following six factors, known as the “Cryo-Maid” factors, which Delaware Courts have long relied upon in examining FNC motions:

  1. The relative ease of access to proof;
  2. The availability of compulsory process for witnesses;
  3. The possibility of viewing the premises;
  4. Whether or not Delaware law will be applied;
  5. The pendency or nonpendency of similar actions in another jurisdiction; and
  6. All other practical problems that would make the trial of the case easy, expeditious, and inexpensive. Barrera, at 12-13.

In considering all of the factors as a whole, the Court concluded an overwhelming hardship did not exist.  Although the relevant proof, witnesses, and premises (factors 1-3) mostly lie outside of Delaware, the Court found  obtaining such evidence was not a hardship on Monsanto given the technology available in today’s global age.  The Court also noted that it routinely applies other states’ laws (factor 4) and that no other action was currently pending in another jurisdiction (factor 5).  The Court found that the “other practical problems” sixth factor weighed in Monsanto’s favor, but nevertheless concluded that this single hardship was insufficient to justify dismissal, stating:

It may be true that there are more appropriate or convenient forums to litigate Plaintiffs’ claims.  Yet to prevail on this FNC motion to dismiss, Defendant is nonetheless required to demonstrate with particularity that this is “one of those rare cases where the drastic relief of dismissal is warranted” because Defendant will suffer overwhelming hardship if forced to litigate here.  Defendant has not demonstrated that this is one of those rare cases.  Barrera, at 22.

The Barrera ruling takes on added significance given that Delaware’s FNC jurisprudence had come under some question of late after a pair of decisions,  Martinez v. E.I. DuPont de Nemours & Co., Inc. in the Delaware Supreme Court and Hupan
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Overview:

In an opinion written by Justice Henry DuPont Ridgely, a unanimous panel of the Delaware Supreme Court recently threw out a $2.8 million verdict in the case of Michael Galliher v. R.T. Vanderbilt.  Defense Litigation Insider previously covered the verdict and Trial Court’s post trial opinion.  Here, R.T. Vanderbilt (“Vanderbilt”) appealed the verdict claiming the Trial Court failed to include a necessary jury instruction and certain testimony from plaintiff’s witnesses prejudiced the trial.  Plaintiff cross appealed and claimed he should receive post-verdict interest on the award, but the Supreme Court did not reach that issue.  Instead, the Court ordered a new trial based on the fact that Dr. Barry Castleman provided inadmissible testimony and the Trial Court did not provide a jury instruction on the duty of care owed by Mr. Galliher’s employer.

Dr. Castleman’s Testimony:

During cross examination, Dr. Castleman made several statements that were non-responsive to questions of defense counsel, including some information that had been specifically excluded by the Trial Court.  Dr. Castleman testified that: (1) Johns-Manville employees had called Vanderbilt “liars;” (2) Vanderbilt spent millions of dollars on studies to undermine government regulatory action with respect to its talc; and (3) it was “buying senators and lobbying the government.”  The Court determined Dr. Castleman’s unsolicited testimony during cross examination was inadmissible and its prejudicial effect required a new trial.

Jury Instructions:

The Court also overturned the verdict because the Trial Court did not include an instruction to the jury on the duty of care owed by Mr. Galliher’s employer.  Vanderbilt sought apportionment of fault to the employer and requested a duty of care instruction.  While the Trial Court indicated it would include such an instruction in the final set of jury instructions, it omitted the instruction from the set given to the jury.  The Court found that was an error and such an instruction must be added for the re-trial, which has since been scheduled for March 9, 2015.

 

Trial Tip Take Aways:

  1. All parties should carefully review the final jury instructions and be prepared to address any omissions or errors with the Court prior to or, if necessary, immediately after the instructions are given to the jury, so any errors can be corrected immediately.
  2. All parties should be sure to tell witnesses of evidentiary rulings that impact their testimony and instruct them to limit their testimony accordingly.
  3. Video testimony played by plaintiff at trial included a line of testimony that the Trial Court had ruled was inadmissible.  Although the Court did not thoroughly analyze this issue in this ruling, it created an appealable issue and all parties should be sure to review final cuts of videos before they are played to the jury to avoid potential appellate issues.
  4. Defense counsel should be armed with this opinion in future trials where Dr. Castleman will testify and be prepared to immediately address his testimony with the Court if his answers start to stray from the questions asked.  This opinion may encourage Trial Courts to


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Companies and insurers continue to experience an increase in the number of lawsuits they face, which involve Plaintiffs who allege that their lung cancer was caused by asbestos exposure, despite the fact that many of these Plaintiffs were longtime smokers.  The trend, which has emerged over several years, has gained nationwide prominence as highlighted by New York Congresswoman Carolyn McCarthy’s asbestos lawsuit.

Congresswoman McCarthy sued more than 70 companies alleging that their asbestos-containing products caused her lung cancer, despite the fact that she spent 30 years as a nurse and was a heavy smoker for more than 40 years, writes Daniel Fisher in Forbes. As Fisher notes, lung cancer claims in Madison County, Illinois and Delaware have more than doubled since 2010.

As Joe Nocera recently wrote in the New York Times, the upsurge in lung cancer cases appears to be driven by economic incentives.

The increase in lung cancer filings is notable not only because of the number of additional filings, but also because many of the injured parties are longtime smokers.  Congresswoman McCarthy, for example, reportedly “is such an avid smoker that she’s known around Capitol Hill for taking breaks ­between votes.

Marc C. Scarcella and Peter Kelso have recently published on the subject of the economic incentives of lung cancer cases.  Lung cancer filings in Madison County and Delaware have increased from less than 200 in 2000, to an estimated total for 2013 of more than 1,200.  The trend is especially notable given that smoking is likely a contributing factor in 90% of lung cancer cases, (pdf download).

As Daniel Fisher noted in a follow-up article, despite her admitted 30-year smoking history, Congresswoman McCarthy denied that her lung cancer was caused by smoking.

Conclusion

With ever-increasing lung cancer lawsuits involving allegedly injured parties, zealous and thorough investigation and representation are even more important.  Determining the injured’ party’s smoking history is not only essential, but should be a critical and repeated theme woven throughout the defense of the case by defense attorneys.  Companies and insurers faced with lung cancer lawsuits involving alleged asbestos exposure must be vigilant regarding questionable claims.
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Approximately a year ago Delaware Asbestos Judge John A. Parkins, Jr. asked the asbestos bar to recommend a revised Standing Order No. 1  (pdf download) and General Scheduling Order (pdf download) (“GSO”) to govern the ten asbestos trial settings in Delaware each year.  The endeavor was led by the ADR Master, David A. White, and then Judge Joseph R. Slights, III, who is now a practicing lawyer in Wilmington.  Judge Slights previously presided over the asbestos docket.  A year of negotiations led to joint proposed orders.  After a few minor changes, the Court issued the new orders earlier this month.  Transitioning to the new orders is still a work in progress, but it appears they will take full effect starting with cases scheduled for trial in February 2015.  Here are the Top 5 Changes you should know:

  1. The new standing order streamlines deadlines, while expanding the number of days in the GSO for most cases and providing an expedited track for exigent cases.  The new GSO has only 24 deadlines compared to 60 deadlines in the old GSO.  Unnecessary deadlines were removed and others were combined to allow for the more efficient processing of cases.  Under the prior GSO, discovery and pretrial took place over a 360 day schedule.  Now non-exigent cases will have a 420 day track and exigent cases, in which Plaintiffs provide certain discovery in advance of docketing for trial, can use “a spur” to jump into the GSO 320 days from trial.
  2.  New Standing Order No. 1 updates plaintiffs’ production requirements regarding claims forms.  Within 60 days of filing a complaint, plaintiffs must produce copies of all claims forms and all related materials.  In addition to bankruptcy trust proof of claims forms, plaintiffs must also produce applications for Social Security benefits, worker’s compensation benefits, military service benefits, and disability benefits.  Plaintiffs have an obligation to supplement these records up to the time of trial.  The new order expands plaintiffs’ production requirements and makes clear their ongoing obligation to produce these documents.
  3. The new GSO requires that the parties complete summary judgment fact discovery prior to the drafting of motions for summary judgment.  Practically speaking, the major change provided in this provision is that it allows plaintiffs an opportunity prior to motions for summary judgment to depose witnesses on which defendants plan to rely for those motions.  This provision should provide a more complete factual record for motions for summary judgment.
  4. For the second time in his tenure as Asbestos Judge, Judge Parkins moved summary judgment oral arguments earlier in the process.  Shortly after assuming the docket, he moved oral arguments from 30 days prior to trial to 60 days.  The goal was to give the Court time to rule on motions taken under advisement and the parties time to resolve claims prior to trial.  The new GSO calls for oral argument 100 days prior to trial.  The new oral argument date further accomplishes the Court’s goals discussed above and allows for motions to be heard prior


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