This article from Corporate Counsel provides great advice on how to protect your trade secrets while collaborating with third-parties.  As the article notes, you should consider:


Using a non-disclosure agreement to protect your interests
Limiting the sharing of information to those who need to know
Marking the information "confidential" 
Clearly identifying the items you consider to be trade secrets
Training your staff on how to handle sensitive information

For additional tips and advice, check out DRI's State-By-State Compendium on Trade Secrets and Agreements Not to Compete.  The law on trade secrets and non-disclosure agreements varies greatly by state and the Compendium serves as a fantastic resource for quick answers about the confines of each state's law on these topics.  

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A year ago we published an article in The Whisper titled Please Jurors, Check Your iPhone With The Bailiff (Vol. 7, Issue 2.) The article discussed the increasingly frequent problem of jurors' use of the Internet to do their own research and the use of social media sites such as Facebook and Twitter to communicate with each other and the world outside of the courtroom regarding the trials in which they serve. The temptation of a sitting juror to do her own research, or to discuss the case with other jurors or outsiders, has always been there; it is just that the advent of the digital age has made the ability to succumb to temptation so much easier. Clearly, courts have taken notice of the problem. Our article last year discussed the nature of the problem and what you, the lawyer, could do to learn of and handle the problem when it occurs. This article will in turn discuss what courts and legislatures around the country have done, and to suggest what more should be done to combat the problem at its source.

In the past year, there have been countless stories of jurors tweeting, posting to Facebook, blogging, or doing internet research during an ongoing trial. In a recent criminal case in California the jury was excused for a Mardsen hearing, which is when a defendant requests a new court-appointed attorney based upon a claim of ineffective assistance of counsel. During the hearing, which must be held outside the presence of the jurors, several jurors used a cell phone to Google the meaning of the hearing. The judge found out and was forced to declare a mistrial. Before releasing the jury, the judge reprimanded the jury and told them the consequences of their actions – that the State would have to pay for a new trial, and that the defendant, who may in fact be innocent, would have to spend the next few weeks in jail awaiting his new trial. Thus, the judge advised, the State incurred substantial funds and a man lost his liberty, all because the jurors spent less than five minutes on Google during a trial. Had the jury been better warned, with an explanation of potential risk, the jury may not have committed the misconduct.

Another example is that of Seth Rogovoy, a Massachusetts juror who was dismissed from a trial in February 2011 for his tweeting during his service. The tweets included a post which stated: "I am in contempt of court, de facto if not de jure" and "Sucks that you can't tweet from the jury box. What's the fun in that?" These tweets show that Mr. Rogovoy both understood that he was not allowed to make the posts and the potential consequence to himself, yet he did so anyway. After being dismissed by the judge, Mr. Rogovoy stated: "I never mentioned any of the people: the defendant, the witnesses. I never mentioned the court I was sitting in." In an interview later given to Bob Gardinier, as reported in the February 9, 2011 Albany Times-Union article Rape trial of ex-priest now before jury: Deliberations set to start in case; juror dismissed after using "Twitter," Mr. Rogovoy stated that, given the popularity of social media platforms like Twitter, judges will be forced to confront them in the courtroom. In that respect, Mr. Rogovoy is absolutely correct.

In order to prevent further juror misconduct through the use of social media, legislatures need to make it clear that it will not be tolerated, and courts need to instruct juries specifically on the impropriety of discussing or researching regarding an ongoing trial, why it is improper to discuss or research an ongoing trial, and the consequences to the juror if he or she fails to follow those instructions. This instruction should be made several times throughout the course of a trial, including when candidates are first called for jury duty, before voir dire, at the beginning of trial, before every recess, and before deliberations. The court must then monitor the jurors as best it can, and follow through with the threatened punishment. Most courts are now doing something about the social media, and in fact most of these suggestions are being followed by at least some jurisdictions. However, no jurisdiction has yet put them all together in a comprehensive effort to combat the social media problem. Without a strong message that juror misconduct is impermissible, the problem will only get worse.

More than half the state and federal courts now have jury instructions that at least make a passing mention of the internet when advising jurors or prospective jurors on the prohibition of performing outside research or discussing an ongoing case. This is a good first step, as many of the jurors who have made social media postings in the past have relayed that they did not understand this to be a "discussion" which was prohibited by the rules. For this reason, it is important that the instructions make more than a mere passing reference. Rather, the instructions should be as specific as possible, mentioning sites such as Facebook and Twitter (or whatever the prevalent form or social media of the day happens to be). At least then, the rule itself will be clear to the jurors.

Additionally, the most effective jury instruction not only gives the rule, but also explains the reasons behind the rule. While lawyers understand that some evidence is inadmissible for one reason or another and will not be known to the jury, many laypersons have a different view. They see lawyers and judges as keeping information from them that they need to know. Thus, not only are they curious, but many believe that they must know all the facts in order to be the best juror they can be. It is also important, as many model instructions now realize, to give the jury the reasons so that they understand that it is important that they follow the rules. Just as important is to advise the jury of the consequences to the courts and parties if they do not follow the rules, and the likelihood of a mistrial.

Often these instructions are repeated in one form or another several times throughout the trial. This, coupled with a recitation of the policy reasons underlying the instruction, will provide the jury with a constant reminder of the prohibition and sound basis for not falling to temptation. While it may seem repetitive, the ease with which a person in today's world can pull out their cell phone and record a status update which can jeopardize the entire trial necessitates the constant reminder as seen in the examples above.

In San Francisco County, in response to a jury pool of over 600 that was dismissed in 2009 following the realization that they had all researched a high-profile case prior to voir dire, the court takes a more aggressive approach. Prospective juries are given a questionnaire with a cover sheet that states in part:

You are ordered not to discuss this case with anyone; do not allow anyone to discuss the case with you. The only information you may tell anyone is that you are in a jury pool for a trial and the time requirements of that trial. You are also ordered not to read, listen to, or watch any news, Internet, or other media accounts of this case, past or present. You may not do research about any issues involved in the case. You may not blog, Tweet, or use the Internet to obtain or share information. (CCP §1209(a)(10))

In addition to the instruction on prohibition, there must be consequences for a juror's willful disobedience of the rules. There are many individual instances where a judge has held a juror in contempt of court for violating the prohibition on research and discussion, and held hearings. This may need to be a more frequent and publicized occurrence to stem the growing problem. California recently passed a new law, AB 141, which went into effect on January 1, 2012, that makes a willful violation of the prohibition on research or use of social media punishable by not only civil contempt, but also makes it a misdemeanor. See Cal. Civ. Proc. Code § 1209(a)(6); Cal. Penal Code § 166(a)(6). In addition, the bill amends current law and requires that the jury be specifically instructed, before trial and before recesses, on the prohibition of research or dissemination of information, in all forms including electronic and wireless. See Cal. Civ. Proc. Code § 611; Cal. Penal Code § 1122. If anything, the bill does not go far enough. For instance, it could require offending jurors to pay for the consequences of their action, including the re-trial of the case if necessary.

While several judges in California and in other jurisdictions have taken it upon themselves to hold a juror in contempt for prohibited conduct, including the use of social media or performing internet research, the California Legislature's codification of this violation as not only civil contempt, but also a misdemeanor, is a step in the right direction. However, while California's new law requires the judge to advise juries regarding the prohibition on internet research and use of social media, it does not require the judge to instruct the jurors on the consequences of their actions if they fail to follow the rules. This too is important. While advising the jury of the reasons behind the rule appeals to their sense of civic duty – the carrot – advising the jury of the consequences of failing to adhere to the instruction lets the jury know that there will be real punishment – the stick. Both the carrot and the stick are necessary in order to have the best chance of strict adherence to the rules.

Finally, not only is it important that there be a law in place for handling a juror's violation and that the jury be advised of that law. The law must be enforced, possibly by the district attorneys as a misdemeanor rather than the judge as civil contempt. The instruction could also contain a request that the jurors report to the court if they know or suspect that one of their co-jurors may be violating any of these orders, which would in essence be self-enforcement.

Other courts have experimented with the prohibition of cell phones in the courthouse for everyone, or at least for jurors. Indiana, for instance, requires the bailiff to collect and store computers, cell phones and other electronic communications devices prior to deliberations. This rule was implemented after the Indiana Supreme Court considered a case wherein a juror took a cell phone call during deliberations. There, the Indiana Supreme Court wrote: "We additionally observe that permitting jurors, other trial participants, and observers to retain or access mobile telephones or other electronic communication devices, while undoubtedly often helpful and convenient, is fraught with significant potential problems impacting the fair administration of justice….The best practice is for trial courts to discourage, restrict, prohibit, or prevent access to mobile electronic communication devices by all persons except officers of the court during all trial proceedings, and particularly by jurors during jury deliberation." Henri v. Curto, 908 N.E.2d 196, 202-203 (Ind. 2009). Although helpful for times when the jurors are actually at the courthouse, this solution may not provide much in the way of curbing the practice of Internet research and social media discussions after hours, unless the jury is sequestered for the entire trial.

Our jury trial system is dependent on the jurors who are privy only to the evidence admissible in court, instructed on the law solely by the judge at the conclusion of the evidence and who have not been predisposed to outside opinions or discussions of the case before deliberation with their fellow jurors. While no solution is perfect, it is clear that courts, legislatures, and lawyers must do more to halt the increasing episodes of juror misconduct.

Tom D'Amato is a shareholder with Murphey, Pearson, Bradley & Feeney in San Francisco. He maintains an active litigation and trial practice in state and federal courts, and in administrative proceedings before regulatory and government agencies. Chief among his areas of practice are professional liability, business disputes, intellectual property, real estate, employment and personal injury. Mr. D'Amato also regularly represents clients in appellate courts.

Adam Koss is an associate with Murphey, Pearson, Bradley & Feeney in San Francisco. Mr. Koss focuses his practice on all phases of litigation, representing clients at mediation, arbitration and through to trial if required. Mr. Koss has an active practice defending professionals and their businesses, specifically in malpractice actions. Although he focuses predominantly on the defense of professionals and businesses, he also represents clients in a variety of other fields, including products liability, employment law, real estate, contract disputes and general negligence.

 

 

 

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The release of this audio recording raises numerous issues.  Williams' career was already in serious jeopardy prior to the release of this recording, but now, he is virtually un-employable.  His rhetoric and tone exceed that which would be considered normal locker room speak, and leaves little doubt that bounties were indeed taking place.  Williams called for specific injuries to numerous San Francisco players, even suggesting players should attempt to go for the head of concussion-prone wide receiver Kyle Williams.  With the multitude of lawsuits already filed against the NFL related to concussion issues, this is pretty damning for Williams, the Saints, and the League as a whole.  It is possible, and perhaps even likely, that Commissioner Goodell could turn Williams' current indefinite suspension into a lifetime ban.  It seems as though Goodell has ample evidence to do so at this point, and he may need to take such a step to remain consistent with the NFL's present crusade in support of player safety.  

To that end, Goodell clearly has authority to discipline Williams, consistent with the NFL's Standard of Conduct: 


Standard of Conduct

While criminal activity is clearly outside the scope of permissible conduct, and persons who engage in criminal activity will be subject to discipline, the standard of conduct for persons employed in the NFL is considerably higher. It is not enough simply to avoid being found guilty of a crime.


Discipline may be imposed in any of the following circumstances:

  • Conduct that imposes inherent danger to the safety and well being of another person; and
  • Conduct that undermines or puts at risk the integrity and reputation of the NFL, NFL clubs, or NFL players.

It will also be interesting to see if this audio recording affects the ongoing appeal of Head Coach Sean Payton.  Payton's chances of succeeding on appeal of his year-long suspension were probably slim before this recording, but in light of the public outcry, it seems certain that Goodell will uphold Payton's suspension. If Payton was in the room during this speech (it appears that he was not at this point), and knew of the bounties (which he has admitted), he had a duty to report Williams and others involved, even if he did not partake in the scheme himself.  Goodell can fall back on the NFL's Standard of Conduct in this regard as well: 

Reporting of Incidents: The League must be advised promptly of any incident that may be a violation of this policy, and particularly when any conduct results in an arrest or other criminal charge.  Players and club employees must report any such incident to the club, which must then report it to NFL Security at (800) NFL-1099. Failure to report an incident will constitute conduct detrimental and will be taken into consideration in making disciplinary determination under this policy. Clubs are also required to report incidents that come to their attention.

Another interesting issue that could trigger litigation is the fact that this audio recording was allegedly not authorized for release.  This recording was captured during filmmaker Sean Pamphilon's work on an ESPN documentary entitled, "Run Ricky Run," which chronicled former Saints player Steve Gleason's fight with Lou Gehrig's disease.  However, Gleason, who expressed regret and disappointment over the release of the recording, apparently owns the rights to all recordings compiled during the filming.  Gleason conceivably could bring an action against Pamphilon for the unauthorized release, though it could be difficult for Gleason to prove damages, given the circumstances. 

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As reported by Forbes, a U.S. District Court sanctioned a prominent U.S. law firmfor manufacturing a frivolous lawsuit.  The case is Lavesky et al. v. ITT Educational Services, Inc., filed under the False Claims Act (“FCA”).  The Lavesky court did not mince words in sanctioning plaintiff’s counsel: “From what the Court can gather, [plaintiff’s attorneys’] view is that virtually any ex-employee will do for purposes of manufacturing an FCA lawsuit.”  


Lavesky carries implications for all cases, not just those filed under the FCA--it provides a blueprint for the defendant victim of a manufactured lawsuit.  If discovery shows that the plaintiff was unaware of the facts upon which she based her lawsuit before an “enlightening conversation” with her attorney, the defendant should consider moving for sanctions pursuant to:(i) Federal Rule of Civil Procedure 11, and (ii) Model Rule of Professional Conduct 7.3, which prohibits lawyers from soliciting “professional employment from a prospective client when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain.”  This recipe ended up costing the Lavesky’s counsel almost $400,000 in fees.

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As mandated by Section 212 of the Consumer Product Safety Improvement Act of 2008, the Consumer Product Safety Commission created a publicly accessible and searchable database allowing consumers to submit reports about various products as of March 11, 201l.  This database, found at www.saferproducts.gov, supplements the Commission’s existing publicly accessible and searchable databases – the National Electronic Injury Surveillance System (NEISS) database, which collects data from hospitals on injuries associated with particular consumer products.

The new database, though intended to provide consumers timely information about potentially unsafe products, has been widely criticized for its accuracy issues and the burden it places on manufacturers.  No evidence or proof is even required for a consumer to submit a complaint about a product.  Rather, the consumer must merely click a button stating his or her belief that the information reported is true and accurate to the best of the consumer’s knowledge.  After the report is posted, manufacturers have 10 days to respond.  

The hearsay and reliability issues on the admissibility of such information contained in this database are apparent.  However, judging by how plaintiffs currently use the NEISS database to advance lawsuits and given the courts' leniency in allowing such information to be admitted in one form or another, there is no doubt that manufacturers will face an uphill battle keeping such purported “evidence” out of the courtroom.  

Just recently, the federal district court in Jenks v. New Hampshire Motor Speedway, D.N.H., 1:09-cv-00205, 1/31/12, held that NEISS data was admissible in a product liability action involving a golf cart.  In that case, the plaintiff sued the defendant manufacturer of the golf cart, alleging failure to warn and other claims, when her husband was thrown from the rear of the cart and sustained serious head injuries.  The court denied the manufacturer’s pretrial motion to exclude the NEISS data, finding the database to be a public record as defined in an exception to the hearsay rule. The court also found that the information in the database met the exception’s trustworthiness requirement and that it was further admissible to show notice to the manufacturer of the danger of falling from golf carts. 

Though plaintiffs will surely attempt to draw parallels between the NEISS data and the contents of the new CPSC database, the accuracy issues inherent in the new database should warrant its exclusion from the courtroom.  Unlike the hospital reports which form the basis of the NEISS data, the reports in the new database can be submitted by anyone, including competitors, advocacy groups, and even attorneys attempting to advance their lawsuit by generating evidence.  Moreover, the CPSC explicitly disclaims the accuracy and completeness of the information contained in the new database.  Accordingly, this information is not only replete with hearsay, but it can be and should be considered inherently untrustworthy.

Another problem faced by manufacturers is that, unlike the NEISS data, they cannot claim lack of knowledge of the information contained in the new database. The CPSC is required to notify manufacturers every time a report is submitted about its product.  Therefore, any such defense will likely fail.  
 
Manufacturers are advised to keep themselves informed by registering  to receive reports submitted to the new database and to carefully consider how to respond to any inaccurate information, knowing that such information has the potential to end up in the courtroom.

William F. Auther is a partner in the Phoenix, Arizona office of Bowman and Brooke LLP where he has an active trial practice in product liability and business litigation and Mary M. Kranzow is a former associate at Bowman and Brooke LLP.

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The smooth transition of NFL jersey production responsibilities from Reebok to Nike hit a snag this week with the filing of a lawsuit by Nike against its rival. Nike filed suit in federal court against Reebok over Reebok’s swift production of Tim Tebow-New York Jets jerseys after Tebow’s trade to the Jets. The trade announcement on March 21st left an extremely tight window of time for Reebok to capitalize on the deal before its contract with the NFL expires on April 1, 2012.  


While Reebok’s deal with the NFL is technically still in place until April 1, Nike alleges that the jerseys are not valid licensed merchandise as authentic jerseys require two license agreements – one with the NFL to use its marks and one with the NFLPA (National Football League Players Association) or the individual player to use a specific players name.  Nike has had an endorsement deal with Tebow in place since his graduation from the University of Florida in 2010.  In appears that in this case, Reebok does not have a deal with either the NFLPA or Tebow that would allow it to use his name on its jerseys.

With the April 3rd premier of Nike’s NFL jersey collection quickly approaching, Nike asserts that Reebok’s hastily produced Tebow-Jets jerseys will negatively impact the demand for new Tebow-Jets apparel that has been steadily growing since the trade was announced. Nike is seeking injunctive relief to stop the sales of the jerseys along with the compensatory and punitive damages.  While being first to market may earn Reebok a quick profit in this situation, if the Court decides in Nike’s favor, the quick move could end up being a costly one. 

On Friday, March 30, Reebok was ordered to stop producing the jerseys.

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The Importance of Demonstrative Exhibits

Posted on March 20, 2012 01:49 by Blair Jones

Demonstrative exhibits are an integral part of any trial presentation.  They are the tools that help us educate the jury about products, teach them about complex technical issues and understand the evidence.  They can illustrate salient points that could be difficult to explain concisely and clearly, and can refute claims of our opponents.  If a picture is worth a thousand words, a video or reenactment may be worth millions of words.  The importance of the effective use of demonstrative aids cannot be overstated.

Demonstrative aids can run the gamut from simple drawings made on chalkboards by witnesses during their testimony to a high tech accident reconstruction video presentation.  They may consist of several blowups of significant photographs, or enlargement of pertinent documents.  The technology available today permits a wide range of possibilities, including highlighting text in a document and during testimony, enlarging and pulling out important language from a document and marking the document on the screen to direct the jury’s attention to a specific part of an exhibit.

It may be important to demonstrate how a machine works, or how technology is used.  It may be necessary to depict the biomechanical possibilities in a given accident.  Videos, computer simulations and other technologies can be very effective to bolster your case.  Timelines are a favorite demonstrative aid and with modern technology, the timeline can be “created” during witness testimony before the jury’s eyes. 

There are many creative and effective ways to create engaging demonstrative aids.  The Trial Techniques SLG will take up the topic at the upcoming DRI Products Liability meeting in Las Vegas (April 11-13).  If you have any particular questions about this topic that you would like to be considered for further discussion in Las Vegas, please post.  

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Holy Bat Trap, Batman! – Guano & Insurance

Posted on March 16, 2012 02:03 by Barry Zalma

The plaintiffs filed suit against their insurer, Auto-Owners, for breach of contract and bad faith, claiming that Auto-Owners was liable for the total loss of their vacation home that was uninhabitable and unsaleable as a result of the accumulation of bat guano between the home’s siding and walls.  The Supreme Court of Wisconsin was asked to resolve the question whether the pollution exclusion in the Auto Owners policy defeated the claim in Joel Hirschhorn and Evelyn F. Hirschhorn v. Auto-Owners Insurance Company, 2012 WI 20 (Wis. 03/06/2012).

Auto-Owners moved for summary judgment, which the circuit court initially denied. Upon reconsideration, however, the circuit court agreed with Auto-Owners that its insurance policy’s pollution exclusion clause excluded coverage for the Hirschhorns’ loss. The court of appeals reversed, concluding that the pollution exclusion clause is ambiguous and therefore must be construed in favor of coverage.

FACTUAL BACKGROUND
Beginning in 1981, the Hirschhorns owned a vacation home in the town of Lake Tomahawk, Wisconsin. At all relevant times, the home was covered by a homeowners insurance policy issued by Auto-Owners. The policy insured the Hirschhorns against the risk of loss of the home, along with structures and personal property located at the insured premises, against “accidental direct physical loss.” However, the policy contained a pollution exclusion clause that excluded from coverage any “loss resulting directly or indirectly from the “[d]ischarge, release, escape, seepage, migration or dispersal of pollutants . . . .” The policy, also defined “pollutants” as any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, liquids, gases and waste and described waste as including materials to be recycled, reconditioned or reclaimed.

In May 2007, Joel Hirschhorn met with a real estate broker to list the home for sale. At that time, the broker inspected the home and saw no signs of bats. However, in July 2007, upon inspecting the home again, the broker discovered the presence of bats and bat guano. The broker attempted to remove the bats and clean the home. The broker’s efforts failed.

The Hirschhorns and their family stayed at their vacation home between August 9 and 14, 2007. During their stay, they noticed a “penetrating and offensive odor emanating from the home.” Upon leaving on August 14, 2007, they arranged for a contractor to conduct a more thorough inspection of the home. The contractor determined that the cause of the odor was the accumulation of bat guano between the home’s siding and walls. The contractor provided the Hirschhorns a remediation estimate but could not guarantee that cleaning up the bat guano would rid the home of its odor.

Subsequently, on October 23, 2007, the Hirschhorns filed with Auto-Owners a notice of property loss. The notice described the loss as resulting from the discovery of bats in the Hirschhorns’ home and specifically stated, “smell awful and [insured] cannot stay in house . . . .” Auto-Owners denied the claim three days later, reasoning that the accumulation of bat guano was “not sudden and accidental” and, in any case, resulted from “faulty, inadequate or defective” maintenance within the terms of the policy’s maintenance exclusion clause.

On November 4, 2007, the Hirschhorns entered into a contract with a builder to demolish their existing vacation home and construct a new one in its place. In his affidavit, Joel Hirschhorn explained that he thought it was more practical financially to demolish the home than to spend the money to make it habitable again.

After the home’s demolition, on February 22, 2008, Auto-Owners sent to the Hirschhorns a revised denial letter. Auto-Owners denied the Hirschhorns’ claim on the additional ground that “[b]at guano is considered a pollutant” within the terms of the policy’s pollution exclusion clause.

The parties did not dispute the material facts giving rise to the Hirschhorns’ loss. Rather, the sole issue presented to the Supreme Court was whether the pollution exclusion clause in Auto-Owners’ insurance policy excluded coverage for the loss of the Hirschhorns’ home that allegedly resulted from the accumulation of bat guano.

ANALYSIS
Since Auto-Owners’ insurance policy defines “pollutants” and lists waste as one such irritant or contaminant in its definition of “pollutant” the Supreme Court analyzed whether bat guano was the type of waste excluded by the policy.

Noting that the reach of the pollution exclusion clause must be limited by reasonableness, or everyday incidents may be characterized as pollution and the contractual promise of coverage reduced to a fantasy. For example, exhaled carbon dioxide, while potentially harmful in a confined and poorly ventilated area, is universally present and generally harmless since every animal, including people, exhale carbon dioxide. .

The ordinary meaning of “irritant” is a condition of inflammation, soreness, or irritability of a bodily organ or part. The Supreme Court concluded that bat guano falls unambiguously within the term “pollutants” as defined by Auto-Owners’ insurance policy. Bat guano is composed of bat feces and urine. Bat guano is or threatens to be a solid, liquid, or gaseous irritant or contaminant. That is, bat guano and its attendant odor make impure or unclean the surrounding ground and air space  and can cause inflammation, soreness, or irritability of a person’s lungs and skin. The Supreme Court noted that the Wisconsin  Department of Health & Family Services in cooperation with the Agency for Toxic Substances & Disease Registry, Indoor Air and Health Issues concluded that people who live around large quantities of bat wastes are more likely to become ill with histoplasmosis; people who contact mites that live in bat wastes may get skin rashes; and molds that grow in moist, warm, highly organic situations may increase asthma attacks in affected people.

The Supreme Court noted that these points cannot be seriously contested by the Hirschhorns because they alleged in their complaint that the odor of bat guano was so penetrating and offensive as to render their vacation home and unfit place to live. As a result the Supreme Court concluded that a reasonable person in the position of the insured would understand bat guano is waste. Since bat guano is composed of bat feces and urine bat guano is commonly understood to be waste.

The Hirschhorns argue, and the court of appeals agreed, that the term “waste” does not necessarily call to mind feces and urine, given the policy’s other examples of irritants and contaminants. The Supreme Court disagreed because, unlike exhaled carbon dioxide, bat guano is not universally present and generally harmless in all but the most unusual instances. To the contrary, bat guano is a unique and largely undesirable substance that is commonly understood to be harmful. A reasonable homeowner should understand bat guano to be a pollutant.

The Supreme Court’s conclusion that bat guano falls unambiguously within the policy’s definition of “pollutants” was not enough to resolve the dispute. The court needed to determine whether the Hirschhorns’ alleged loss resulted from the “discharge, release, escape, seepage, migration or dispersal” of bat guano under the plain terms of the policy’s pollution exclusion clause.

The policy does not define “discharge,” “release,” “escape,” “seepage,” “migration,” or “dispersal.” The Supreme Court was required, therefore, to construe these terms according to their plain and ordinary meanings as understood by a reasonable person in the position of the insured. As their dictionary definitions make clear, the six terms are often synonymous with one another and taken together constitute a comprehensive description of the processes by which pollutants may cause injury to persons or property.

The bat guano, deposited and once contained between the home’s siding and walls, emitted a foul odor that spread throughout the inside of the home, infesting it to the point of destruction. The Hirschhorns acknowledged as much in their complaint. They alleged that “the drapes, carpets, fabrics and fabric furnishings in the home were rendered unusable as a result of the absorption of the bat guano odor.” Accordingly, implicit in their complaint is an allegation that the bat guano somehow separated from its once contained location between the home’s siding and walls and entered the air, only to be absorbed by the furnishings inside the home.

ZALMA OPINION
Interestingly, as noted in a footnote to the opinion the Supreme Court noted that the Hirschhorns helped the court decide against their position by by conceding that a reasonable insured may understand the pollution exclusion to include human excrement. They failed to explain, however, why the policy’s definition of “pollutants” should be interpreted differently for feces and urine from humans is more a pollutant than feces and urine from to bats.

There should be no question that a collection of excrement from any animal, whether human, bird, bat or aardvark, if collected sufficiently in a home to make the dwelling incapable of sustaining life comfortably in the structure is both waste and a pollutant. The Wisconsin court clearly applied the the common meaning of a group of unambiguous terms.

© 2012 – Barry Zalma
Barry Zalma, Esq., CFE, is a California attorney, insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud. Mr. Zalma serves as a consultant and expert, almost equally, for insurers and policyholders.

Mr. Zalma can also be seen on World Risk and Insurance News’ web based television program “Who Got Caught” with copies available at his website at http://www.zalma.com.

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Many people will not be shocked by the title of this post.  However, a new report issued by an advocacy group for the U.S. Chamber of Commerce was recently released that was entitled, “The Plaintiffs’ Bar Goes Digital, an Analysis of the Digital Marketing Efforts of Plaintiffs’ Attorneys and Litigation Firms.”  The report found that marketing efforts were being camouflaged as forums or support group sites.   The report estimated that law firms had spent more than $50,000,000 on Google advertising in 2011.  The overwhelming majority of that was spent by Plaintiff’s firms.  However, despite the fact that the amount of spending does not rank with large corporations, it is disproportionate for the size of the industry.  The report is critical of the Plaintiffs’ Bar because of a lack of transparency that many of their sites were actually marketing for law firms.  

As social networking, blogs, and other methods of disseminating information grow, they will become an increasingly prominent part of Plaintiff’s attorneys networking and marketing strategies.  To a lesser extent, we can expect the same on the defense side.  As we expand our internet marketing footprint, we need to be ever vigilant to ensure that our marketing is done truthfully and ethically.  Advertisement by legal professionals should be transparent and truthful.  Various bar associations will most likely weigh in on specific examples in the near future.  We should all make diligent efforts to make sure we are on the right side of whatever precedent is set.  

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On March 31st of last year, San Francisco Giants fan Brian Stow allegedly was attacked and  sucker-punched by two L.A. Dodgers fans after an opening-day game between the two clubs at Dodgers Stadium.  His head hit the pavement, leaving Stow with a fractured skull and brain trauma.  Doctors placed him in a medically-induced coma for several months.  According to Stow’s attorneys, the attack has left Stow with permanent brain injury and severely limited  movement.  Today, he is wheelchair-bound and reportedly will require 24-hour nursing care for the rest of his life.  Only recently has he begun to write and try to speak.  A former paramedic, he is unable to support himself or his family.

In May, Stow filed suit in Los Angeles Superior Court seeking $50M in damages against the Dodgers, Dodgers owner Frank McCourt, and several others.  Stow asserts that the Dodgers were negligent, among other reasons, for failing to provide adequate security, failing to provide adequate lighting, and promoting a half-off beer sale that promoted violence.  He also claims that the Dodgers fired 300 security staff shortly before the assault, and he submitted sworn declarations from eight other Giants fans alleging that they had difficulty in finding security personnel to respond to threats against them during the game.  He also argues that one of Stow’s assailants was involved in two prior incidents that day and that the Dodgers should have ejected him from the ballpark hours before he attacked Stow.  Many people online report a long-term tolerance by the Dodgers of a significant “thuggish” element at the ballpark. 

 In opposition, the Dodgers have argued that stadium security was at record levels on opening day and that they had no way to anticipate the attack.  Further, they deny any half-off beer promotion.

 In June, the Dodgers filed for bankruptcy in Delaware, resulting in a stay of the L.A. case.  Under a reorganization plan filed by the Dodgers, et al., McCourt and other Dodgers officials would be released from legal liability for any actions they took in their official capacity as team representatives that may have contributed to Stow’s injuries.

On February 3rd of this year, the Dodgers moved in the Bankruptcy Court for a motion disallowing all of Stow’s claims, arguing that Stow cannot win the L.A. case as a matter of law because Stow cannot prove a link between security issues and the beating.  In response, Stow’s counsel has asked the Bankruptcy Court to yield to Los Angeles Superior Court. 

For several  reasons, the Bankruptcy Court is likely to allow the L.A. suit to run its course:  First, the case has obtained nationwide attention, and federal judges are not immune from media-generated pressure.  If the court stops the L.A. action, some will claim that the court hijacked the jury-trial process.  Second, the Dodgers recently disclosed documents establishing the existence of insurance of over $300M, which is more than enough for a verdict in favor of Stow.  Third, the Dodger bankruptcy is unusual in that the owners will be flush with money after reorganization.  Reports cite many interested buyers, with a predicted sale price as high as $2 billion for the franchise.  Finally, the Dodgers reportedly have admitted that, in all likelihood, all creditors will be paid in full from sale proceeds from the sale.   Bankruptcy judge Kevin Gross already has hinted at the likely outcome, noting that the Dodgers will have a considerable task in convincing him "that there are absolutely, positively no facts that could result in liability under California law."  Hearings on the matter are scheduled for March 7th and March 21st.   A hearing regarding the proposed reorganization plan is set for April 13th, and sale of the franchise is scheduled for April 30th

 

Bill Staar is a partner in the Boston office of Morrison Mahoney LLP, Chair of DRI's Sports Law & Entertainment Group, and a member of the Sporting Goods Manufacturers Association’s Legal Task Force.  He concentrates in the areas of product liability, construction disputes, toxic torts, and general business litigation. He also is a member of DRI's Product Liability, Commercial Litigation, and Construction Law Committees.

 

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