"Although the term was designed to be a clarification of coverage, it comes as no surprise to someone who represents policyholders when claims have been denied that insurance companies would have courts believe that instead, “occurrence” was designed to support coverage denials or limitations. Insurance companies also are happy to argue conflicting interpretations of “occurrence,” depending on which interpretation will mean less coverage for the policyholder in the dispute at issue."
Saturday, June 13, 2009
Commentary On The Definition of Occurrence in Insurance Policies - Another Reason GCs for Insureds Get Grey Hair Managing Legacy Claims
An interesting post at the Adams Drafting blog points out various issues regarding the meaning of the word "occurrence" in commercial insurance policies. Billions and soon trillions of dollars will change hands based on the meaning given or found by court's deciding insurance coverage cases for underlying toxic tort cases. The post includes comments from some lawyers who focus on insurance coverage for insureds, including Scott Godes. The following words from Scott are key:
Asbestos Awareness and Asbestos Ban in Dubai
An article here describes a construction group in Dubai trying to raise consciousness regarding asbestos in building projects. This type of activity was what the US went through in the mid to late 1980s, and it spawned tort litigation seeking to recover the costs of coping with asbestos regulations. According to the article:
"By volume, there is more asbestos here than in the UK. The asbestos here is different to what you find back in the UK. It is usually asbestos cement and is classified as a lower risk. There is also legislation but it did not come into effect till 2006 and there is low awareness and a possibility that it is present in projects before that period. Besides, the current law only applies to asbestos boards. So it is legal to use water pipes for water supplies and sewage," said Faulkner. "Hence we are working with Build Safe UAE to create greater awareness among the 90 signatories of BSU."
"By volume, there is more asbestos here than in the UK. The asbestos here is different to what you find back in the UK. It is usually asbestos cement and is classified as a lower risk. There is also legislation but it did not come into effect till 2006 and there is low awareness and a possibility that it is present in projects before that period. Besides, the current law only applies to asbestos boards. So it is legal to use water pipes for water supplies and sewage," said Faulkner. "Hence we are working with Build Safe UAE to create greater awareness among the 90 signatories of BSU."
Friday, June 12, 2009
Update: Chinese Drywall Litigation - More Signs of Interest - What Does It All Mean and Where May It Go ?
Update: The drywall litigation industry apparently is booming. A friend told me that prior seminars were attended by lots and lots of lawyers, and that the insurance coverage seminar for drywall was especially popular. I'm also getting emails telling me that only 9 seats are left for a June seminar in New Orleans on the topic by the HB Litigation Conferences Group.
Tort litigation is probably one of the few industries that tends to increase when there are tough economic times.
___________________________________________________________________
Media stories abound regarding the purported hazards of "Chinese drywall," and some websites provide links to some of underlying class action complaints.
Now my email inbox is filling up with other signs of the litigation picking up speed.
For one, a conference on the topic is being organized by Harris-Martin, which is a firm that publishes specialized litigation reporters and puts on specialty litigation conferences.
For another, industrial hygiene companies are touting their skills in this area and providing links to various online sources of information on the topic.
So, how far will this all go and what does it mean? I'm sure I do not know all the answers. What I can say with confidence is that the plaintiff's bar will use this situation to expand their knowledge of and precedents regarding suits against Chinese manufacturers and their distributors here in the US. I'm less sure of what the American distributors will do, but one suspects that they will want to minimize their risk of being the target defendants by working to help bring the actual manufacturers into court in the United States.
Tort litigation is probably one of the few industries that tends to increase when there are tough economic times.
___________________________________________________________________
Media stories abound regarding the purported hazards of "Chinese drywall," and some websites provide links to some of underlying class action complaints.
Now my email inbox is filling up with other signs of the litigation picking up speed.
For one, a conference on the topic is being organized by Harris-Martin, which is a firm that publishes specialized litigation reporters and puts on specialty litigation conferences.
For another, industrial hygiene companies are touting their skills in this area and providing links to various online sources of information on the topic.
So, how far will this all go and what does it mean? I'm sure I do not know all the answers. What I can say with confidence is that the plaintiff's bar will use this situation to expand their knowledge of and precedents regarding suits against Chinese manufacturers and their distributors here in the US. I'm less sure of what the American distributors will do, but one suspects that they will want to minimize their risk of being the target defendants by working to help bring the actual manufacturers into court in the United States.
Blazing Saddles (the movie), Bankruptcy Injunctions, and Self-Created Deadlines and Emergencies
The point of this post is to explore, briefly, whether injunctive relief is warranted in chapter 11 cases for harm that may arise if deadlines can not be met that arise from self -created emergencies? Indeed, can a debtor be deemed to have the "clean hands" typically required for equitable relief if it has fouled up a business so badly that it will fail with so little money that it will be unable to pay even 1 cent per dollar of tort claims against it?
These questions of course are posed in the light of the recent Chrysler situation where the debtor and Fiat cited deadlines they had agreed to as the basis for obtaining rapid injunctive relief. Certainly there are some situations in which a deadline actually may be real, and perhaps Chrysler was such a case. But certainly there also is room to question self-imposed deadlines and/or the genuineness of alleged harms said to arise from agreed dates for agreed actions. In some bankruptcy cases, courts have rejected self-created deadlines as a basis for preliminary or permanent injunctive relief. This issue arose, for example, in an asbestos bankruptcy, In re Federal-Mogul Global, Inc., No. 01-10578 (D.N.J.). There, bankruptcy Judge Raymond T. Lyons was called on to consider a request for a preliminary injunction to block the litigation of underlying asbestos cases against a non-debtor. According to the debtor, a preliminary injunction was critical because the debtor had made a deal that required the injunction by a date certain as a condition of the contract.
Ultimately, Judge Lyons held that injunctive relief was inappropriate because the situation involved essentially a self-created emergency. The path that took Judge Lyon to that result is presented in a January 20, 2006 hearing transcript available here. The debtors opened the hearing on their motion by arguing that a preliminary injunction could be issued under section 105 of the Code in order to protect the possibility of later entering a section 524(g) injunction to enjoin a host of underlying asbestos cases. See Tr. at 87. Various counsel for asbestos plaintiffs’ lawyers, on the other hand, opposed the injunction, arguing that their clients should not be deprived of their underlying tort trials. The lawyers making this argument included lawyers representing asbestos plaintiffs’ firms SimmonsCooper; Seitz Van Ogtrop & Green; Levy Phillips & Konigsberg; David Lipman and Gebhardt & Smith. One of the plaintiffs’ lawyers, Mr. Ruckdeschol of the David Lipman law firm in Florida, explicitly argued that the injunction should be denied because it was "an emergency of the creation of the drafters of the term sheet." Tr. at 115.
Ultimately, Judge Lyons accepted that argument, among others, and denied the request for injunctive relief. In ruling, Judge Lyons memorably referred to a self-created emergency depicted in the movie Blazing Saddles:
"Let me focus first of all upon irreparable harm. And one of the opponents here has characterized this as a self created irreparable harm. And this really reminds me of the scene from the movie Blazing Saddles where the sheriff played by Clevon Little is being hassled by a crowd and he's being threatened with physical violence. And he pulls out a gun and he holds it to his head. And he says, stand back or I'll shoot the sheriff. The debtor in this case has agreed to a deal in which they've undertaken to get a preliminary injunction and the other party to the deal has said, if I don't get this preliminary injunction I'm going to withdraw from the deal. This to me is a totally self created scenario for irreparable harm. "
It seems to me pretty hard to argue with the logic of Judge Lyons.
These questions of course are posed in the light of the recent Chrysler situation where the debtor and Fiat cited deadlines they had agreed to as the basis for obtaining rapid injunctive relief. Certainly there are some situations in which a deadline actually may be real, and perhaps Chrysler was such a case. But certainly there also is room to question self-imposed deadlines and/or the genuineness of alleged harms said to arise from agreed dates for agreed actions. In some bankruptcy cases, courts have rejected self-created deadlines as a basis for preliminary or permanent injunctive relief. This issue arose, for example, in an asbestos bankruptcy, In re Federal-Mogul Global, Inc., No. 01-10578 (D.N.J.). There, bankruptcy Judge Raymond T. Lyons was called on to consider a request for a preliminary injunction to block the litigation of underlying asbestos cases against a non-debtor. According to the debtor, a preliminary injunction was critical because the debtor had made a deal that required the injunction by a date certain as a condition of the contract.
Ultimately, Judge Lyons held that injunctive relief was inappropriate because the situation involved essentially a self-created emergency. The path that took Judge Lyon to that result is presented in a January 20, 2006 hearing transcript available here. The debtors opened the hearing on their motion by arguing that a preliminary injunction could be issued under section 105 of the Code in order to protect the possibility of later entering a section 524(g) injunction to enjoin a host of underlying asbestos cases. See Tr. at 87. Various counsel for asbestos plaintiffs’ lawyers, on the other hand, opposed the injunction, arguing that their clients should not be deprived of their underlying tort trials. The lawyers making this argument included lawyers representing asbestos plaintiffs’ firms SimmonsCooper; Seitz Van Ogtrop & Green; Levy Phillips & Konigsberg; David Lipman and Gebhardt & Smith. One of the plaintiffs’ lawyers, Mr. Ruckdeschol of the David Lipman law firm in Florida, explicitly argued that the injunction should be denied because it was "an emergency of the creation of the drafters of the term sheet." Tr. at 115.
Ultimately, Judge Lyons accepted that argument, among others, and denied the request for injunctive relief. In ruling, Judge Lyons memorably referred to a self-created emergency depicted in the movie Blazing Saddles:
"Let me focus first of all upon irreparable harm. And one of the opponents here has characterized this as a self created irreparable harm. And this really reminds me of the scene from the movie Blazing Saddles where the sheriff played by Clevon Little is being hassled by a crowd and he's being threatened with physical violence. And he pulls out a gun and he holds it to his head. And he says, stand back or I'll shoot the sheriff. The debtor in this case has agreed to a deal in which they've undertaken to get a preliminary injunction and the other party to the deal has said, if I don't get this preliminary injunction I'm going to withdraw from the deal. This to me is a totally self created scenario for irreparable harm. "
It seems to me pretty hard to argue with the logic of Judge Lyons.
Thursday, June 11, 2009
FELA Plaintiffs Must Prove A Genuine and Serious Fear of Cancer
In a win for defendants in general and some asbestos defendants in particular, the U.S. Supreme Court issued a June 1, 2009 per curiam opinion holding that when FELA claimants pursue "fear of cancer" claims, the defendant is entitled to an instruction that the jury must find evidence that the fear is "genuine and serious." The opinion is titled CSX Transp., Inc. v. Hensley, 556 U.S. _______ (2009). The slip opinion is here. The issue arose because a plaintiff said to have suffered other severe diseases also claimed damages for alleged fear of cancer due to having been diagnosed as having asbestosis.
The win is significant for railroads and others because FELA applies nationally since it is a federal statute. Click here for a Wikipedia article on the history of FELA.
The win is significant for railroads and others because FELA applies nationally since it is a federal statute. Click here for a Wikipedia article on the history of FELA.
Sovereigns - US Supreme Court Says Legislation Blocks Suits Against Iraq Under FSIA
Chrysler & GM Dealers - Promissory Estoppel Claims ?
Now that the Chrsyler asset sale has been consummated, there apparently will be ample numbers of angry yterminated car dealers thinking about legal remedies. Especially for those who recently purchased or invested ample money in a dealership, a very recent Illinois Surpeme Court decision may become popular for some of those seeking remedies as it explictly allows a promissory estoppel remedy even when a contract-based recovery would not succeed. The damages awarded may be limited but could prove better than nothing IF a source of funds could be found. The April 2, 2009 decision is Newton Tractor Sales, Inc. v. Kubota Tractor Corp. , --- N.E.2d ----, 233 Ill.2d 46, 2009 WL 886866 (Ill.). The Court's free version of the opinion is here. There may also be exploration of claims that seek to reach pockets of insurance, such as D & O coverage.
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