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Pennsylvania Superior Court Confirms a Fictional “Lord of the Rings” Character Can’t File a Lawsuit

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Who is allowed to file a lawsuit in Pennsylvania. This is a straightforward, but often overlooked question. An amusing opinion by the Pennsylvania Superior Court offers some insight. Short answer – definitely not fictional characters from Lord of the Rings.

In Ex. Rel Six et. al v. Gustafson, et al, two individual plaintiffs filed suit to regain possession of six storage containers that had, in prior landlord tenant litigation, been awarded to the Gustafsons. The named, individual plaintiffs were “Thomas E. Bombadil” and “Timothy D. Parr.” But these plaintiffs had an existential problem having nothing to do with property law or rules or procedure. They didn’t exist.

The trial court dismissed the matter after it was discovered that “Thomas E. Bombadil” was not a living, breathing person, but a fictional character from the “Lord of the Rings.” Likewise, as pointed out by the trial court, “Timothy D. Parr” did not exist and, in various pleadings, “regularly denied his own existence.”

The fictional plaintiffs appealed to the Superior Court. But, as you can imagine, the Superior Court was unmoved. In affirming the trial court’s dismissal the Superior Court offered the following insightful and humorous analysis:

In a typical case, we would dispose of an appeal by addressing the merits of cognizable claims and denying relief when none is due. We cannot even get to that point here, however, because we can only consider claims asserted by a real person or entity, and “Appellants” do not dispute the trial court’s findings that they do not exist.

There you have it. Who can file a lawsuit in Pennsylvania? Real people with real injuries. And definitely not Tolkien characters!

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Insurance Law

Pennsylvania Supreme Court’s First Insurance Bad Faith Decision a Big Win for Plaintiffs

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Supreme Court Wades Into Bad Faith

On Friday, the Pennsylvania Supreme Court delivered a groundbreaking decision in Rancosky v. Washington Nat’l Ins. Co., the first decision by the Court interpreting the requirements of Pennsylvania’s Bad Faith Statute, 42 Pa. C.S. § 8371. The Supreme Court’s decision in Rancosky was critical for two reasons.  First, it formally adopted the legal test set for bad faith, first established by the Pennsylvania Superior Court 23-years ago in Terletsky v. Prudential Property & Cas. Ins. Co., 649 A.2d 680 (Pa. Super. 1994).  In Terletsky, the Superior Court held that in order to recover in a bad faith action, the plaintiffs must establish by clear and convincing evidence that: (1) the insurer did not have a reasonable basis for denying benefits under the policy; and (2) the insurer knew of or recklessly disregarded its lack of a reasonable basis. More significantly, the Supreme Court also held that the insurer’s motive of self-interest or ill will is not a requirement to recovering under Pennsylvania’s Bad Faith Statute. While evidence of self-interest or ill will on the part of the insurer is probative in considering the second prong of Terletsky, the Court held that “evidence of the insurer’s knowledge or recklessness as to its lack of a reasonable basis in denying policy benefits is sufficient.” This ruling is important as the Supreme Court explicitly rejected efforts to raise the threshold evidentiary showing necessary to prove insurance bad faith.

Rancosky v. Washington National Insurance

The Rancosky case arose out of Washington National Insurance Company’s, successor by merger of Conseco Health Insurance Company, denial of insurance benefits to plaintiff for failure to pay premiums.  The plaintiff in Rancosky brought claims of breach of contract and bad faith, which were bifurcated, and plaintiff’s bad faith claim proceeded to a bench trial. The trial court determined that the insurer’s handling of plaintiff’s claim was sloppy and even negligent, but that plaintiff failed to establish that the insurer lacked a reasonable basis for denying benefits under the insurance policy because the plaintiff did not prove the insurer had a motive of self-interest or ill will. The trial court entered judgment in favor of the insurer on plaintiff’s bad faith claim. The Pennsylvania Superior Court vacated the trial court’s judgment. Consistent with its previous decisions, the Superior Court held that motive of an insurer’s self-interest or ill will is probative of the second prong of Terletsky, but is not a prerequisite to recovery. The Superior Court went further and determined that, based upon its review of the record, the evidence did not support a finding that the insurer had a reasonable basis for denying plaintiff’s benefits under the policy. The Superior Court found that the insurer lacked a reasonable basis for denying the plaintiff’s benefits to meet the first prong of Terletsky and remanded to the trial court for a determination on the second prong.

Although the Supreme Court found that Superior Court erred in making the determination of the first prong from Terletsky, that the insurer lacked a reasonable basis for denying the plaintiff’s benefits, the Court agreed with the Superior Court in adopting the two (2) prong test of Terletsky.  Further, the Supreme Court sided with the Superior Court and concluded that in proving that an insurance carrier acted unreasonably and recklessly, a plaintiff does not need to show that an insurer’s conduct was motive of self-interest or ill will. The Court remanded to the trial court for consideration of plaintiff’s bad faith claim in accordance with the test set forth by the Court.

No “Ill Will” Needed for Bad Faith

The significance of Rancosky cannot be understated.  Given the Pennsylvania Supreme Court’s ruling, insurers will no longer be able to rely upon a failure to show self-interest or ill will to defeat bad faith claims.  As such, insureds do not need the “smoking gun” evidence some courts had previously demanded. This is a big win for insureds, as it preserves the ability to recover under the Bad Faith Statute. Had the Court found the other way, with motive of self-interest or ill will being a prerequisite to a bad faith claim, it would have effectively put an end to bad faith claims.  Indeed, as Justice Bear stated in his opinion, if a plaintiff were required to show that an insurance company acted with ill will, bad faith claims would be limited to “the most egregious instances” and “only where the plaintiff uncovers some smoking gun evidence indicating personal animus towards the insured.” Although it is still true that insureds have an uphill battle in establishing a bad faith claim given the clear and convincing evidentiary standard, the Supreme Court, with its well-reasoned decision, permits bad faith claims to continue. Therefore, insurers permitting delay in adjusting claims, inadequate investigations and/or unreasonable interpretations of policy provisions, all of which fail to reach the level of self-interest or ill will, continue to be subject to bad faith claims.

This article was co-written with James G. Begley, Esq.  James Goslee is a trial attorney in Philadelphia and can be reached at https://gosleelaw.com/about/

Courts, James P. Goslee

Pennsylvania Superior Court’s Befuddling Decision in Wilson v. U.S. Security Associates Turns the Stautute of Limitations on Its Head

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Earlier this month, the Pennsylvania Superior Court vacated a Philadelphia jury’s $38.5 million punitive damages verdict after concluding that the plaintiff’s claim for punitive damages was brought after the applicable statute of limitations.  The Superior Court’s decision holding that a claim for punitive damages is a cause of action that must be pled prior to the expiration of the statute of limitations caught many practitioners by surprise, and for good reason.  The ruling is at odds with long-standing precedent.  It is also confusing, fundamental wrong and completely unworkable as a matter of practice.  The good news is that the Wilson decision is likely to be short-lived, as it will almost certainly be reversed by the Pennsylvania Supreme Court. But until then, Pennsylvania law regarding what constitutes a cause of action susceptible to the statute of limitations has fundamentally changed and plaintiffs lawyers everywhere ought to be cautious.

The Wilson case arouse out of a shooting at the Kraft Food factory in Philadelphia a few years back.  The plaintiff brought claims of negligence against multiple defendants, including a third-party commercial security company. The plaintiff alleged, among other things, that the company negligently allowed a disgruntled former employee to enter the factory and begin shooting.  At the inception of the case, plaintiff’s original counsel included a request for punitive damages in the Complaint.  As is typical, the defendant filed a preliminary objection seeking to strike the punitive damages claim.  Often times when this happens, the parties will either agree to remove a claim for punitive damages from the Complaint without prejudice, or the Court will strike the claim without prejudice.  In either case, the idea is that discovery should be taken before a defendant is subject to a potential verdict for punitive damages.

In Wilson, the plaintiff’s counsel agreed to remove the claim for punitive damages from the Complaint by way of stipulation.  Counsel for both parties filed a stipulation to dismiss the claim for punitive damages, without prejudice.  Consistent with the custom in Pennsylvania, both parties contemplated that the plaintiff would have the right to again request punitive damages after discovery, if the evidence warranted such a remedy. However in this case, the plaintiff did not include in the stipulation a provision barring the defendant from raising the statute of limitations as a defense if the pleading was subsequently amended to bring back the punitive claim.

Now, it was certainly an oversight for plaintiff’s counsel not to include this language regarding the statute of limitations.  But it really shouldn’t have mattered, because as everyone knows, a claim for punitive damages is not a cause of action.  It is not even a theory of liability (read more about the myth of “theories of liability” here https://legalviewpoints.wordpress.com/2017/05/11/amending-a-civil-complaint-in-pennsylvania-after-the-statute-of-limitations-beware-of-the-new-theory-of-liability-myth/).  It is simply an element of damages.  And because it is not a cause of action, it can be added to a civil Complaint any time, regardless of the statute of limitations, right?

Unaccountably, and in defiance of all prior precedent, a panel of Superior Court judges ruled that a claim for punitive damages is in fact a cause of action and must be pled within the two-year statute of limitations.  Notwithstanding the chaos this decision will now cause practitioners (plaintiffs must now plead punitive damages in all negligence cases, regardless of the facts, just to be safe and to avoid a future claim of malpractice), the decision cannot be squared with long-standing precedent or common experience.  With respect to precedent, Pennsylvania is and always has been a notice pleading state.  Plaintiffs do not need to include every potential theory of negligence in a Complaint, nor do they need to specifically enumerated all elements of damages. Rather, it has always been the law that a plaintiff need only plead sufficient facts to allow a defendant to prepare a defense against a cause of action.   No court in Pennsylvania has ever held that a request for punitive damages is a stand alone cause of action.  And this makes sense, because there is no independent cause of action for punitive damages.  Punitive damages are simply a component of damages permitted in those rare cases where a defendant’s conduct is outrageous.

Given that the panel’s decision in Wilson represents a sea change that will fundamentally alter the practice of law for civil litigants in Pennsylvania (because if punitive damages are a “cause of action,” you better plead everything under the sun in a Complaint!), you would think that the court would have spent considerable time explaining its decision. You would also think it would have engage in a deep legal (and perhaps philosophical) analysis. But you would be wrong.  After boiler plate citation to decisions that in no way support the panel’s holding, here is the entirety of the Superior Court’s analysis:

On independent review, we are constrained to conclude that the trial court’s decision to permit the addition of a claim for punitive damages in the middle of the first trial was legally incorrect. Quite plainly, and without factual dispute, the statute of limitations had expired.

“Quite plainly.”  The Superior Court thought the issue so obvious it dismissed it in two words: “quite plainly.”  The Superior Court threw out a $35 million verdict, and created a new and unworkable legal paradigm on the strength of two words.

With all respect to the Superior Court, which gets it right most of the time, it really missed the mark on this one.  It is clear from the lack of analysis that the Court did not consider the implications of its decision.  If an element of damages is now considered a “cause of action,” the legal definition and common understanding of “cause of action” has (without any principled explanation) expanded beyond reason and beyond measure. The upshot, unfortunately, is that plaintiffs’ counsel will now be forced to include a claim for punitive managers in every Complaint.  More than that though, the Complaint should now be a compendium of every single fact and theory of liability known or conceivable to counsel.  Because if nothing else, the Superior Court is now signaling that our state’s well established pleading conventions have been turned upside down.

James Goslee is a trial attorney in Philadelphia and can be reached at https://jamiegoslee.com/about/

Courts, James P. Goslee

Where to File a Lawsuit? Proper Venue in Pennsylvania

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City Hall

Where to File a Lawsuit in Pennsylvania

Where to file a lawsuit?  It is one of the first questions a trial attorney asks when representing a new client.  And it is one of the most important questions.  The county in which a lawsuit is brought can have a major impact on both the value of the claim and how quickly it can be resolved. For instance, some counties are known for higher verdicts, which can drive up the settlement value of a claim.  Also, civil litigation moves at a different pace depending on which county you find yourself in.  Some counties, like Philadelphia, move cases quickly and a plaintiff usually gets a trial date within 1 or 2 years of filing suit.  But, in other counties, it can be 4 or 5 years before there is a trial date and thus take half a decade (or longer) before a claim can be resolved.  Because the venue of litigation is so important and directly impacts the value of a claim and how quickly it can be resolved, it is important for trial lawyers to identify the best viable venue before filing a Complaint.

Naturally, corporate defendants have the opposite incentive as plaintiffs.  If possible, corporate defendants want to make sure a lawsuit is filed in a jurisdiction known for small jury verdicts and a slow docket.  Because venue is so important, the Pennsylvania Rules of Civil Procedure set out specific rules controlling where a corporate defendant can be sued.  Under Rule 2179, a corporation can be sued:

  • in any county where its principal place of business is located;
  • in any “county where it regularly conducts business”; or
  • in the county where the accident occurred.

In cases where a plaintiff files suit in the defendant’s home county, or where the accident or incident giving rise to the claim took place, there is nothing really to fight over.  In these cases, venue is proper and the corporate defendant cannot object.  The area of contention is when a plaintiff files a claim in a county where the incident didn’t happen and where the defendant does not have a principal place of business, but where the plaintiff alleges that the defendant “regularly conducts business.”

“Regularly Conducting Business”

What does it mean to “regularly conduct business” in a county?  Over the years courts in Pennsylvania have issued rulings clarifying what that means and increasing the burden on a plaintiff to prove that a defendant “regularly conducts business” in the chosen jurisdiction. To this end, the Pennsylvania Superior Court has adopted a two prong “Quality and Quantity” test.  In determining whether a corporate defendant “regularly conducts business” in a specific county, courts must consider both the quantity or business conducted in the county, and the quality of the defendants contacts with the forum.  The Superior Court explained this test in Zampana-Barry v. Donaghue:

In determining whether a corporation or partnership regularly conducts business in a county, we employ a quality-quantity analysis. A business entity must perform acts in a county of sufficient quality and quantity before venue in that county will be established. Quality of acts will be found if an entity performs acts in a county that directly further or are essential to the entity’s business objective; incidental acts in the county are not sufficient to meet the quality aspect of the test. Acts that aid a main purpose are collateral and incidental while those necessary to an entity’s existence are direct.

An issue that has arisen over the years involves cases where a defendant “solicits” business in a specific county, but does not actually conduct business “directly” in that county. This sort of “indirect” contact often becomes an issue where a car manufacturer is a defendant.  Car manufacturers, with limited exceptions, do not sell automobiles directly to customers.  Rather, they sell cars to consumers through independent automobile dealerships. And although these manufactures extensively advertise and get the economic benefit of sales to customers in various counties, they have successfully managed to get cases removed from the plaintiff’s chosen forum because they do not have “direct” contact with that county. To this end, the Pennsylvania Supreme Court has specifically ruled that “mere solicitation” in a particular county does not amount to conducting business. Purcell v, Bryn Mawr Hospital.

Faust v. BMW

Recently, the Superior Court of Pennsylvania had an opportunity to consider proper venue in a case involving a car manufacturer. In Faust v. Bayerische Werke AG and BMW of North America, the plaintiff brought a claim for a faulty airbag against BMW in Philadelphia.  BMW filed a preliminary objection arguing that venue in Philadelphia was not proper because, under existing Pennsylvania law, it does not regularly conduct business in the City. The plaintiff responded with record evidence showing that BMW regularly advertises its cars in Philadelphia and, through independent licensed dealerships, sells and leases a significant amount of cars to Philadelphia citizens.

Despite an obvious argument as to fairness (i.e. BMW makes a lot of money selling and leasing cars to Philadelphia citizens, and intentionally markets in Philadelphia, why can’t they be sued there?), 2 of the 3 judges on the appellate panel upheld the trial court’s ruling transferring the case to Lancaster County.  The majority opinion cited BMW’s primary business purpose as follows:  “to sell or lease vehicles to individual consumers, which is facilitated by a national distribution network of authorized, affiliated, and independently-owned BMW dealership.”  According to the majority, because BMW does not “directly” sell or lease cars to Philadelphia residents, but instead does so through independent dealerships, it cannot be said that it conducts business in Philadelphia.  Further, the majority held that although BMW regularly markets in Philadelphia, that sort of conduct is mere “solicitation” insufficient to allow for proper venue.

Time to Reconsider the Law?

The majority opinion in Faust is not wrong from a legal perspective. The majority followed prior precedent set by the Supreme Court.  But it is unfortunate because it is expanding a legal rule that is unprincipled and at odds with the realities of modern economics.  BMW makes a tremendous amount of money from customers in Philadelphia. Why should it matter if that money comes directly from Philadelphia citizens via direct sales, or passes through a dealership acting as a middle man?  If the company is going to receive the bottom line economic benefit of doing business with Philadelphians, and intentionally market its goods in Philadelphia, why is it unfair to hold the company to account in Philadelphia?

James Goslee is a trial attorney in Philadelphia and can be reached at https://jamiegoslee.com/about/

 

James P. Goslee, Medical Malpractice

Amending a Civil Complaint in Pennsylvania After the Statute of Limitations? Beware of the “New Theory of Liability” Myth

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For trial lawyers, drafting and filing a Civil Action Complaint is an obvious and important step in litigation. The Complaint is the document that literally starts a lawsuit. But it is more than that. Much more. Although it is filed at the very beginning of a case, the Complaint, and specifically the allegations and causes of action set out in the Complaint, is the foundational document that controls the scope of the litigation and the availability of remedies. So you better get it right.

A plaintiff can only purse the specific claims (causes of action) against a defendant that are “pled” (i.e “alleged”) in the Complaint. If you don’t plead a cause of action, you cannot pursue it and you cannot recover for it. So needless to say, it is important to understand what causes of action you have before filing a Complaint.

Unfortunately, what constitutes a “cause of action” is not always clear and a number of sloppy Superior Court opinions in recent years have made it even more challenging.

“Causes of Action”

But lets start with the basics. What is a cause of action and why does it matter? Say, for example, you undergo surgery and things go badly. Sadly, you are permanently injured. Assume also that you believe your surgeon did two things wrong that caused your injury. First, he made a mistake during surgery and that mistake contributed to your injury. Second, the surgery he performed was different from the surgery you agreed on. In this scenario, you have at least two different causes of action. One cause of action is medical negligence (the doctor made a mistake). The second cause of action is one for lack of informed consent (the doctor did not have permission to perform the surgery). In this scenario, you need to include both causes of action in your Complaint. If you forget to plead one of the causes of action and the statute of limitations expires, you are out of luck.

“The Myth”

But in recent years, lawyers and courts have blurred the line between a cause of action (which needs to be pled), and a theory of liability, which does not. What do I mean? Well lets go back to our previous example. Say you file a Complaint after your surgery alleging both medical negligence and lack of informed consent. Assume further that your claim for medical negligence is that the doctor accidentally cut a specific nerve in your knee during surgery leaving you with limited function in your leg. When you file your Complaint you include an allegation that the doctor accidentally cut nerve A. Turns out though, that the doctor did not accidentally cut nerve A. He used the wrong medical equipment which led to your nerve injury. In either case nerve A is injured and you still can’t use your leg. If you wanted to amend your Complaint after the statute of limitations, under Pennsylvania law you absolutely should be permitted to do so. Why? Because you are not alleging a new cause of action (your claim is still that the surgeon committed medical negligence that caused nerve damage), you are only revising your theory of liability (wrong equipment instead of accidentally cutting a nerve).

Over the years, both trial courts and even the Superior Court have begun to blur the distinction between a “cause of action” and a “theory of liability.” The result is that courts have disallowed amendments after the statute of limitations, even when those amendments do not change the cause of action, but merely seek to alter or expound upon the theory liability. For instance, the Superior Courts decision in Reynolds v. Thomas Jefferson Hospital flat out ignores the distinction between a cause of action and a theory of liability. That decision is wrong, but still has not been corrected.
The upshot is that it is now common practice for defense attorneys to object to motions to amend a complaint, claiming that a plaintiff should not be permitted to allege a “new theory of liability” after the running of the statute of limitations. This is completely wrong. It is a modern legal myth in desperate need of correction.

So lets work on that correction!

The “Real” Law

The Pennsylvania Supreme Court has long held that the “right to amend should be liberally granted at any stage of the proceeding  unless there is an error of law or resulting prejudice to an adverse party.” Werner v. Zazyczny, 681 A.2d 1331, 1338 (Pa. 1996). The reason for freely allowing amendments is to “secure a determination of the case on the merits whenever possible, and not enforce technical rules of pleading.” In re Francis Edward McGillick Foundation, 594 A.2d 322, 329 (Pa. Super. 1991), aff’d in part, rev’d in part on other grounds, 642 A.2d 467 (Pa. 1994).

Not only should amendments be liberally permitted, but trial courts have broad discretion to allow amendments that include more specific factual pleadings. See, e.g., Pike Cnty. Hotels Corp. v. Keifer, 396 A.2d 677, 681 (Pa. Super. 1978). The Pennsylvania Superior Court has observed that “the lower court has broad discretion in determining the amount of detail that must be averred since the standard of pleading set forth in Rule 1019(a) is incapable of precise detail.” Id. at 681.

Contrary to the defense counsel “new theory of liability” myth, it is blackletter law that a Complaint does not limit plaintiff to a specific theory of liability. Indeed, as explained by the Pennsylvania Supreme Court in Kusis v. Baldwin-Lima-Hamilton Corp., 319 A.2d 914 (Pa. 1974):

The notion that a complaint weds a plaintiff to a particular theory of liability is foreign to Pennsylvania pleading. Ours is a system of fact pleading, not “theory” pleading; a plaintiff is free to proceed on any theory of liability which the facts alleged in his complaint will support. Id. at 918, n.8; see also Zitney v. Appalachian Timber Prods., 72 A.3d 281 (Pa. Super. 2013).

Although a plaintiff may not assert a new “cause of action” after the statute of limitations has run, if an amendment “merely amplifies that which has already been averred, it should be allowed even though the Statute of Limitations has already run.” Connor v. Allegheny General Hospital, 461 A.2d 600, 602 (Pa. 1983). The Pennsylvania Superior Court addressed the issue of a “new cause of action” in Junk v. East End Fire Dep’t, 396 A.2d 1269 (Pa. Super. 1978), explaining:

A new cause of action does not exist if plaintiff’s amendment merely adds to or amplifies the original complaint or if the original complaint states a cause of action showing that the plaintiff has a legal right to recover what is claimed in the subsequent complaint. Id., at 1277.

I cite this case law because it is an accurate reflection of Pennsylvania law governing pleadings. It also obliterates the growing myth that a theory of liability is the same thing as a cause of action.

James Goslee is a trial attorney in Philadelphia and can be reached at https://jamiegoslee.com/about/

 

Hospital Injuries, Medical Malpractice

Medical Negligence, MCARE Act and Future Medical Expenses in Pennsylvania

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Credit: Darastar, Everystockphoto.com

Back in March 2002, Pennsylvania joined a host of other states in passing legislation aimed at insulating medical providers from liability for their negligence. Rather than accepting accountability for needless injuries caused by carelessness, physicians and large medical providers successfully lobbied to have special laws passed. Laws intended to make it more difficult for injured patients to receive compensation. Or stated another way, special laws that would make it easier for medical providers to get off the hook for their misconduct.
Citing dubious studies suggesting trial lawyers were responsible for escalating medical insurance premiums in the State (as opposed to formation and consolidation of giant health networks that placed patient care a distant second to growth and profitability), Pennsylvania passed the Medical Care Availability and Reduction of Error Act (“MCARE”). MCARE, despite its pretentious title, was a clumsily drafted tort reform act.
Among the various roadblocks to seeking justice erected by the MCARE Act was a provision that arguably makes it less profitable for trial lawyers to represent people injured by medical negligence.
Virtually all lawyers representing injured clients do so on a contingency basis. Most injured clients are unable to pay a lawyer on an hourly basis, or front the costs of litigation, which can easily run into the hundreds of thousands of dollars. Contingency fee agreements provide a solution. Clients pay nothing, no fees, no costs unless there is a recovery. If litigation does result in a successful recovery, the attorney gets an agreed upon percentage of the net recovery, normally one-third.
In medical malpractice cases, as in most personal injury cases, plaintiffs can recover (among other things) the cost of future medical expenses. Historically, juries would award future medical expenses in a lump sum amount. In other words, if a jury found a defendant negligent, it would be instructed to: (1) determine how long they thought a plaintiff would live; (2) the amount of medical expenses the injured plaintiff would incur per year; and (3) multiply those two numbers and award that amount to the plaintiff in a lump sum.
Defendants often objected to this method of calculation with a credible argument. If a jury awarded a plaintiff a specific sum of money for yearly medical expenses assuming the plaintiff would live another 10 years, but the plaintiff only ended up living 2 more years, why should they have to pay the entire amount?
The MCARE Act changed this paradigm by prohibiting juries from awarding future medical costs in a lump sum. Instead, each verdict sheet should contain a specific amount of future medical expenses, itemized per year (i.e., 2018: $100,000; 2019: $102,000). The MCARE Act also specifies that a plaintiff is only entitled to future medical awards if they are alive. So if a jury awarded a plaintiff future medical awards from 2017 to 2021, and the plaintiff died in 2018, he would not be permitted to receive the amounts awarded for 2019-2021.
But the MCARE Act threw in one more twist. Instead of a plaintiff lawyer receiving a previously agreed percentage fee for the future medical component of an award, the ACT operated to reduce the fee of the lawyer. Under the MCARE Act, future medical expenses awarded by the jury need to be reduced to present value for purposes of calculating attorney fees. So, using our previous example, if a jury awarded $102,000 for future medical expenses in 2019, that amount needs to be reduced to 2017 dollars (which will be something less than $102,000), and the lawyer will receive only a percentage of that lesser amount.
But the language of the MCARE Act is so unclear, for years defense lawyers have been arguing (frivolously) that the entire award should be reduced to present value (not just the amount awarded in attorneys fees). The upshot of this argument is that a medical defendant found liable for future medical expenses years into the future should only have to pay the present value of that award.
With respect to future medical costs, the MCARE Act states:
(b) Future Damages
(1) Except as set forth in paragraph (8), future damages for medical and other related expenses shall be paid as periodic payments after the proportionate share of counsel fees and costs based upon the present value of future damages awarded pursuant to this subsection. 40 P.S. §1303.509.
Now admittedly, this provision is very poorly written. And defense counsel have seized upon this poor draftsmanship to argue that juries need to reduce the amount of future medical awards to present value. The problem with this argument is that it is inconsistent with the purpose of the MCARE Act and really doesn’t make any sense.
Contrary to the defense bar’s arguments, the MCARE Act does not require reducing the future medical costs to present value before submitting them to a jury. In fact it requires just the opposite. Future medical costs are only reduced to present value after a verdict in order to award attorney’s fees. See Pa. SSJI (Civ.) § 14.150 (commentary).
This result is also compelled by logic. One of the benefits conferred by the MCARE Act to medical providers is that an award of future medical damages is paid out in yearly increments and only if the plaintiff is still living. Thus, considering the yearly amounts awarded by the jury are only paid in the future and only if the plaintiff is living, it would make no sense for the jury to reduce its award to present value before entering the verdict.
Judge Rambo reached this exact conclusion in a case of first impression in the Middle District of Pennsylvania in 2014. See Late v. U.S., No. 13-0756, 2014 U.S. Dist. LEXIS 112999, at *5 (M.D. Pa. Aug. 14, 2014). Two years later in Shiflett v. Lehigh Valley Hospital, Judge Carol McGinely reached the same conclusion.
But it was not until last month that the issue was finally (I think) put to rest. In Tillery v. CHOP, the Superior Court finally had an opportunity to address the issue. Following the logic of Judges Rambo and McGinley, the Superior Court rejected any argument that the MCARE Act required future medical costs to be reduced to present value by the jury. To the contrary, the Superior Court held that future medical costs are only reduced to present value for purposes of calculating attorneys’ fees.
James Goslee is a trial attorney in Philadelphia and can be reached at https://jamiegoslee.com/about/

Hospital Injuries

Hospital Falls, Injuries and Corporate Negligence in Pennsylvania

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Photo Credit: jynmeyer

The risk of hospital acquired infections has generated a lot of publicity in recent years.  And rightfully so.  Infections can be dangerous and hospitals have a poor track record of keeping patients safe.  This issue has garnered particular attention recently given the growing list of antibiotic resistant bacterium and recently discovered, widespread contamination of crucial medical equipment (e.g., https://jamiegoslee.com/2016/09/13/unsuspecting-patients-exposed-to-deadly-mycobacteria-infection/).  But one of the most persistent and significant risks facing hospital patients remains overlooked, under-reported and preventable.  What is this risk?  Falling.

Believe it or not, the biggest risk you likely face going into a hospital for surgery is not an infection, surgical complication or medical malpractice, but a post-operative fall.  This is especially true for older patients undergoing procedures involving anesthesia.  Older patients are especially sensitive to anesthesia and the drugs well known cognitive side effects.  It is not uncommon for patients to have some disorientation as anesthesia begins to wear off.  But older patients are at an increased risk for confusion, often unable to remember or follow instructions (such as “don’t get out of bed”) for days after receiving anesthesia. Also, older patients often remain physically infirm and unsteady for days (sometimes weeks) after surgery.  In short, older patients are not only more likely to fall, they are more likely to suffer serious injuries.

For decades, hospitals have recognized the danger patients face if they fall. For decades’ hospitals recognized that too many patients were falling down and suffering catastrophic injuries.  Many of these patients were suffering injuries that left them permanently disabled.

Hospital falls and injuries became a national epidemic. To address this problem, the Joint Commission on Accreditation of Health Care Organizations (“Joint Commission”) requires accredited hospitals to adopt policies and procedures to reduce the risk of patient falls.  These policies and procedures are called “fall precaution guidelines.”  And nurses are primarily responsible for implementing these guidelines.

Normally, fall precaution guidelines utilize a two-step process. The first step for nurses is to identify which patients are at an increased risk for falling.  The second step is for nurses to implement specific tools or interventions to prevent high risk patients from falling.

One of the most popular, evidence based fall prevention guidelines used by hospitals is called the Hendrich II Model.  The Hendrich II is popular because it has a predictive accuracy rate of about 70%.  In other words, it is correct in identifying high risk patients about 70% of the time.

Here is how it works. At least once every 24 hours, nurses rounding on patients are supposed to assign a fall score to their patients.  A fall score is a numeric score that is used to identify who is at risk for falling.  Following the guidelines, nurses are supposed to consider various factors that have been shown to put patients at risk for a fall.  Each factor has a number associated with it.  The nurses go down the list of factors and check the box next to each one that applies to a patient.  They then add up the numbers associated with each box they check, and that is a fall score.

So for instance, patients who are unable to stand up on their own are at higher risk for falling.  If you are a patient who can’t stand up on your own (for instance if you just had major knee surgery), under the Hendrich II model, you get a fall score of 4.  Certain medicines can also increase your risk of falling. Under the Hendrich II if you are taking certain medicines, you get additional points. If you are on pain medicines, you may get 2 additional points because pain medications can cause confusion, drowsiness and balance problems.

Using the Hendrich II, a patient with a score of 5 or higher is considered a “high fall risk.”  And once a patient is identified to be a high fall risk, the guidelines have a list of preventative measures that can be used to reduce the risk of a fall or injury.  For example, nurses rounding on high-risk patients should:

  • Instruct the patient that under no circumstances should they try to get out of bed without first notifying a nurse.
  • Make sure all the nurses and staff are aware that the patient is a fall risk. Preventing falls takes a team effort, so the entire staff must be aware of the risk.
  • Make sure a call bell is within easy reach of the patient so the patient does not need to get out of bed to contact a nurse.
  • Make sure that the patients bed is in the lowest position possible. This is important because if a patient does try to stand up and falls, they are closer to the ground.
  • Make sure the patient has on non-slip socks.
  • Using a bed alarm. A bed alarm is an alarm that goes off if a high-risk patient tries to get out of bed. This is important for two reasons. One, it serves as an audible reminder to patients that they should not try to stand up. Second, it alerts the nursing staff so that they can enter the room and assist the patient.
  • For elderly patients, particularly those who recently had anesthesia or are taking medications known to cause drowsiness or disorientation, notify the patients loved one that they have been identified as a fall risk and encourage them to stay with the patient. This is important because elderly patients can become confused, especially at night and try to get out of bed.  Having a loved one nearby can reorient a patient and keep them in bed.

Fall precaution guidelines have proven effective for reducing the risk of patient falls.  But they are only effective if they are used.  What is troubling is that many hospitals go to great lengths to formulate and “officially” adopt fall precaution procedures to comply with the Joint Commissions mandate, but don’t actually use those procedures and do not adequately train nurses to use them.  In other words, hospitals create the procedures to get the Joint Commission off their back and then put them on a shelf, never to be seen again. Unenforced policies are worth less than the paper they are printed on.

And this problem, of formulating, but not enforcing fall prevention procedures brings me to a critical legal issue in Pennsylvania.  For 30-years Pennsylvania has recognized that hospitals owe non-delegable duties to ensure the safety of their patients.  Indeed, since the seminal case of Thompson v. Nasson, hospitals have been subject to direct negligence (as opposed to the vicarious negligence of its staff) for breaching 4 specific duties.  These duties include the following:

(1) a duty to use reasonable care in the maintenance of safe and adequate facilities
and equipment;
(2) a duty to select and retain only competent physicians;
(3) a duty to oversee all persons who practice medicine within its walls as
to patient care; and
(4) a duty to formulate, adopt and enforce adequate rules and policies to ensure
quality care for patients.

The last duty, the duty to formulate, adopt and enforce rules and policies has particular importance in hospital fall cases. This is true because, as noted above, hospitals are good at adopting fall prevention policies, but often fail to enforce them (which requires allocation of time and resources).  But a review of the case law in Pennsylvania shows that direct negligence cases involving the duty to formulate, adopt and enforce policies and procedures focus primarily on whether policies and procedures were adopted and whether they were adequate.  There is almost no case law dealing with a frequently encountered scenario where a hospital adopts adequate policies, but does not require or adequately train its nurses to use them.

The lack of precedent on the issue is likely the result of lawyers not advancing this theory through trial. For whatever reason, the focus of plaintiffs’ lawyers has been on whether a hospital has procedures and whether those procedures work. In my opinion this is a mistake.  As noted above, even the best policies and procedures are pointless if they are not used.  And although not presented with the square issue, the Pennsylvania Supreme Court has made clear that a hospital’s failure to actually enforce its policies can give rise to a claim of negligence: “hospitals [have] obligations to observe, supervise, or control a patient’s treatment approved by multiple physicians, and to apply and enforce its consultation and monitoring procedures.”

Given the prevalence of injuries caused by hospital falls and the recurring pattern of hospitals not enforcing policies aimed at preventing these occurrences, lawyers would be wise to pursue a broader approach in representing injured clients.

James Goslee is a trial attorney in Philadelphia and can be reached at https://jamiegoslee.com/about/

Mycobacteria

Unsuspecting Patients Exposed to Deadly Mycobacteria Infection

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A number of patients who recently had surgery may have been exposed to dangerous bacteria that is notoriously hard to diagnose, but can have life-altering, even deadly consequences.  What is worse (and frightening) is that the patients probably don’t even know they have been infected and may not learn that they have been infected until it is too late.

The problem, which has become global in scope, is that a few years ago certain medical equipment frequently used during cardiac surgery was contaminated with bacteria in a German manufacturing plant.  The contaminated equipment was then shipped to hospitals in the United States.  Unfortunately, hospitals have used this equipment for years without properly cleaning and disinfecting it, thus exposing countless patients to a dangerous pathogen called non-tuberculosis mycobacteria. And because mycobacteria is a slow growing organism, most patients don’t even know they have been infected until they become sick or incapacitated, which can take many months.

The contaminated medical equipment is frequently referred to as a heating-cooling system.  The purpose of heating-cooling system is to keep patients either warm or cold during surgery to optimize the chance of successful surgery.  These machines are routinely used during open-heart surgery.  A German company called Sorin Group (now known as LivaNova) manufactured a popular model known as the Soren 3T heating and cooling system.  The Soren 3T’s were sold all over the United States, including in Pennsylvania.

Beginning in 2011, a number of reports began filtering in about patients suffering from unusual mycobacteria infection after heart surgery.  The risk of a mycobacteria infection from heart surgery is normally very low, so a cluster of new cases was alarming.  The one common thread among these cases was that a Soren 3T heating system was used during surgery. In July of 2014, Soren sent a letter to a number of medical facilities using the 3T model that outlined important information about reported mycobacteria infections.  The letter notified hospitals about the problem and recommended strict adherence to the company’s cleaning and disinfection protocols.

According to a recent FDA release, Soren discovered that the mycobacteria contamination originated in its plant in Germany.  In other words, these machines were contaminated during production and sent to medical facilities already colonized with dangerous bacteria.  Compounding the problem, evidence is beginning to emerge that these machines were not being properly cleaned by hospitals.  Thus, the mycobacteria was permitted to colonize the machines and potentially infect countless patients during surgery.

The nature of a mycobacteria has made this recently discovered crisis even more dangerous. Mycrobacteria is notoriously slow growing and subtle.  Often patients do not feel its effects until months after exposure. This is very dangerous because it allows the infection to grow and spread over time. Without intervention with antibiotics, these infections can become a major health risk. Patients who received valve replacement surgery are at particularly high risk because the bacteria can grow on the valve and eventually break off causing a potential stroke or even death.

There have been a number of reported mycobacteria cases in Pennsylvania. Last fall, Wellspan York Hospital reported publically that a number of their patients were exposed to mycobacteria during surgery.  Recently a few lawsuits have been filed, including one that alleges a patient died after contracting mycobacteria during surgery at WellSpan.  As more and more patients discover that they have been exposed and injured, it is likely that we will see a lot more of these cases filed.

James Goslee is a trial attorney in Philadelphia and can be reached at https://jamiegoslee.com/about/

Constitution, Courts, James P. Goslee

High Profile Lawsuit Against Attorney General Kathleen Kane Dismissed (For Now)

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Earlier this week a federal district court judge dismissed a high-profile lawsuit against Attorney General Kathleen Kane brought by former employees.  But the legal reasoning of Judge Harvey Bartle in dismissing the claims is probably less interesting than his summary of the allegations, which provide a detailed look at an evolving political grudge match between Pennsylvania’s sitting Attorney General and a high level State prosecutor.

I have written about the ongoing legal/political battle between Attorney General Kathleen Kane and former prosecutor Frank Fina before, see http://wp.me/p6DFYU-2g.   Judge Bartle’s opinion sheds more light on the origin of this controversy and his ruling resolves, at least temporarily, some of the contentious civil claims being made against Attorney General Kane.

The lawsuit in question was brought by Fina and a few other former employees of the Attorney General’s Office.  Fina and the other plaintiffs sued Attorney General Kane claiming she retaliated against them for exercising their right to free speech and defamed them publically.  Judge Bartle summarized the factual allegations underlying Fina’s lawsuit, which more or less go as follows:

In 2012, Kathleen Kane announced her candidacy for Attorney General.  Around the time she announced her candidacy, allegations that Jerry Sandusky had been molesting children dominated the news. As part of her platform, Kane criticized the OAG’s handling of the Sandusky investigation under Tom Corbett’s leadership. Specifically, she claimed the OAG’s office both delayed charging Sandusky and failed to allocate the appropriate resources to the investigation.  As part of her campaign for Attorney General, Kane promised she would “investigate” the OAG’s handling of the Sandusky investigation. 

When Kane assumed office in January 2013, Fina (who handled the prosecution of Sandusky) was overseeing a long-running bribery investigation. As part of the investigation, Fina was utilizing an informant named Tyron Ali.  Ali had signed a cooperation agreement with the OAG’s office and, in exchange for avoiding prosecution, was recorded offering bribes to various Philadelphia officials.   According to Fina’s lawsuit, he immediately informed Kane that she could not oversee the investigation because she had a conflict of interest.  According to Fina, the investigation could potentially implicate Joshua Marrow, a friend and former campaign employee of Kane’s.

Kane disagreed with Fina and immediately suspended the investigation.  She publically claimed that the investigation run by Fina had improperly targeted minorities and, as such, was discriminatory and could not be prosecuted.  For their part, Fina and the other plaintiffs made statements critical of Kane and denying that the investigation was racially motivated or flawed.

Around the same time, Kane began her investigation into the Sandusky prosecution.  A report summarizing the inquiry into the Sandusky investigation was completed in May 2014. The same day the report was released publically, Kane made public statements claiming that Fina and the other plaintiffs improperly delayed the prosecution of Sandusky and, as a consequence, Sandusky had an opportunity to molest two additional minors.   In response, Fina held a press conference where he maintained that Kane’s investigation was a sham and the report was false. 

Fina’s Complaint alleged that in response to his criticisms, Kane launched a retaliatory conspiracy to besmirch his record.  Fina claimed that Kane illegally leaked confidential grand jury records from a 2009 grand jury investigation into the former head of the Philadelphia chapter of the NAACP, J. Whyatt Mondesire.  That grand jury investigation ended without indictment.  Kane believed the grand jury records she leaked proved that it was Fina’s misconduct that resulted in the failed grand jury investigation.  The grand jury materials were turned over to Daily News Reported, Christopher Brennan.  Brennan, in turn, used the material to write a story accusing Fina of impeding and improperly terminating the investigation into Mondesire.   

The problem with leaking confidential grand jury information is that it is illegal. When Fina learned of the leak, he reported it to the Supervising Judge of the grand jury.  Fina was then called as a witness into a grand jury investigation into the leak.  Before he could testify, however, he was confronted by one of Kane’s employees who, allegedly, attempted to physically intimidate him.

Kane was criminally charged with leaking the grand jury information and is awaiting trial.  However, according to Fina’s Complaint, Kane further retaliated against him by kicking off the porn-gate controversy http://wp.me/p6DFYU-2g.  In short, according to the Complaint, Kane tipped off reporters that Fina had received pornographic and otherwise inappropriate emails on his work computer. Fina’s Complaint alleged that Kane “selectively” released a portion of emails to emphasize his role in the scandal. 

According to the Complaint, Kane also appeared on CNN and suggested that she had uncovered emails to and from state employees that were pornographic, racist and misogynistic. During the interview she suggested that some of the emails contained child pornography, an allegation her office later retracted.

Fina and his fellow plaintiffs alleged that Kane’s conduct in: (1) criticizing the bribery investigation as racially motivated; (2) leaking grand jury material; (3) releasing allegedly improper emails was done in retaliation for their public criticisms of Kane’s performance. According to Fina and the other plaintiffs, this retaliation was illegal and violated their First Amendment rights.  Fina and the other plaintiffs also brought claims under state law for defamation.

Judge Bartle dismissed all of the Section 1983 (First Amendment) claims because Kane’s alleged retaliatory conduct was not significant enough to give rise to a lawsuit.  For a public official to be held accountable for retaliating against an employee exercising rights protected by the First Amendment, the retaliation must involve a “threat, coercion, or intimidation intimating that punishment, sanction, or adverse regulatory action will be immediately followed.”  In this case, according to Judge Bartle, Kane’s criticisms of Fina did not involve threats of sanction or punishment.  Rather, according to Judge Bartle:

“Fina was not terminated, demoted, disciplined, or subjected to any other adverse employment action as a result of his criticisms of Kane. Instead, he merely bore the effects of a generalized critique of an investigation in which he took part under a former Attorney General.”

Judge Bartle found plaintiffs’ claim that Kane retaliated against them by releasing emails containing inappropriate and pornographic material absurd, holding that “it would defy logic to conclude that Kane violated the constitutional rights of plaintiffs by bringing to light their use of state-owned computers and email systems to exchange pornography.”

Judge Bartle also dismissed the plaintiffs’ claims for defamation, but without prejudice.  Having dismissed all of the federal claims for retaliation, Judge Bartle declined to retain jurisdiction over plaintiffs’ claims for defamation.  Those claims, presumably, will be brought in state court.

Acknowledging the political back story to the lawsuit, Judge Bartle concluded his opinion by noting as follows:

“In essence, the [plaintiffs’ Complaint] details a long-standing political battle between the Attorney General of Pennsylvania and former high-ranking state officials who served in the administration of her adversaries.  The battle has been hard fought and is not pretty.  Each party, however, has exercised his or her rights under the First Amendment, and there has been alleged no illegal retaliation giving rise to a claim under Section 1983.”

James Goslee is a trial attorney in Philadelphia and can be reached at http://jamiegoslee.com/about/

 

Credit: Darastar, Everystockphoto.com

Constitution, Courts

A Trial Lawyer in Federal Court- Grappling With Pseudo-Law

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Litigation is often compared to sports.  An imperfect analogy, but not a bad one.  There are usually at least two “teams” (the “plaintiff” or “prosecutor” and the “defendant”) and normally a winner and a loser.  The stakes for the players are often high.  In criminal cases, the defendant’s very liberty is at risk.  In the civil context, a monetary award can change the lives of both plaintiffs and defendants.  This is particularly true for plaintiffs who have suffered catastrophic injuries and can no longer work, or are facing enormous medical bills.  Because of the high stakes, both sides prepare zealously for their day in court. Trial is a winner-take-all proposition.  It is an unscripted and unpredictable match, filled with drama, shifting strategy and gamesmanship.  At the end of the trial, 12 random jurors (people with their own unique life experiences, education and inherent biases) will decide the winner and the loser.  The decision is a profound one, often altering the lives of those involved.

In the mist of the inherent unpredictability of litigation, litigants and lawyers take some small comfort in knowing the process is at least governed by rules.  And these “rules” are enforced by a judge, who plays a role very similar to a referee.  The judge makes sure both sides play a fair game.  So although litigants don’t know what the outcome of litigation will be, they at least know how the game is supposed to be played.  And that is important.  Because the thin line separating what is just from what is arbitrary is called predictability.

In large part, our entire legal system is set-up to establish predicable rules.  This isn’t news.  Our nation began with a bunch of colonist fed up with the arbitrary impositions of a monarch sitting on a throne across the Atlantic.  It wasn’t so much the ridiculous taxes that had colonist fuming, it was the fact that they were being imposed out of left field, with no rhyme or reason. How can anyone live that way?  With such uncertainty! We need rules because rules create predictability.  Predictability, in turn, gives us at least a sense of control and allows us to plan our tomorrows.  This isn’t so much a legal principle as it is an element of human nature.

But law is a reflection of human nature.  So for the system to work, the law needs to be predicable. The law does not always need to be right. It does need to be consistent.

Written judicial opinions are a linchpin of our nation’s legal system and are paramount to ensuring consistent, predictable rules.  One important point of a written opinion is to allow a judge to explain and justify his or her legal decision to specific parties in specific cases.  But more important, judicial opinions either create or follow precedent.   They either create new legal rules (for instance in cases where no rule has ever been established or where a prior rule is no longer viable), or they follow the legal rules that have been established in prior cases.  In situations where there is a well-established legal precedent that still works, judges are expected and normally required to follow those established rules.

But let’s be clear. The point of legal precedent is not to create the “best,” the “most practical” or the “most rational” rules.  That’s not it at all.  The purpose of legal precedent is to create consistent rules that are consistently applied. In a simplified sense, legal precedent serves a similar purpose to a rule book in sports. You might believe that a specific rule is not fair or illogical.  You might believe a specific rule is outdated and should be changed (happens all the time in professional sports).  But as long as everyone knows the rules ahead of time and those rules are followed during “the game,” there is at least a rough sense of justice.

But, imagine a situation where two professional sports teams square off in championship game.  Both teams put in a tremendous amount of work to get to this final game and made significant personal sacrifices. This “game,” this moment in time, will impact the future of these players. The outcome is not just about deciding the “winner” and the “loser.”  It is bigger than that.  There are financial stakes, careers and legacies on the line.  No doubt there will be unpredictable moments, key turning points in the match.  Both sides are hoping to play their best and catch a few lucky breaks along the way.  As they walk out onto the field to start the match, neither side knows exactly what is going to happen.  In fact they live every day in a world of stress and uncertainty.  The only comfort these players have is that they know how to play the game.  They may not know the outcome, but they know the rules. And that is something vital.  Crucial.  Because at its core, this “game,” inherently influenced by unpredictability and randomness, has a set of consistent principles that the players can rely upon.  They can plan around these principles! Without them there is only chaos.

The whistle blows, the game starts.  But then something funny happens.  It is not truly funny, it is bizarre and utterly frightening.  The referees who are supposed to be enforcing the rules are acting strangely, unpredictably.  In fact they are not following the rules at all.  They are making arbitrary decisions. They are not enforcing the written rules.  They are making calls that seem to make no sense.  Refusing to blow the whistle when it is clearly appropriate. The players are confused, tentative.  They are not sure what is happening and not sure what to do.  The game being played on the field is completely different than the game they have played throughout their career.  They look to the referees for answers, but get no explanation that makes sense. With no guidance, the players throw out their game plan, ignore the rule book and start doing whatever the referees will allow.

At some point the game ends.  One team is declared the winner.  But everyone understands it is not a just result because the game was not played according to the rules.  It was chaos.  The losing team is demoralized and angry. They were never given a fair shot.  The rug had been pulled out from under them by referees who decided, apparently on their own, to change the rules during the game.  They feel betrayed, but utterly powerless.  Although they are reluctant to say anything critical of the referees, even the winning team will concede that the game was strange and the rulings unpredictable.

The losing team really does not have much of an option.  They can only complain to the league’s front office.  They file a formal petition, a protest, and ask that the game be replayed.  They point out that the referees were acting erratically and did not follow the rules. In fact their protest points out specific examples of the referees’ mistakes and demonstrates beyond question that the mistakes cost them the game.  The response they get is cold comfort.  The league’s front office sends a letter to the losing team and acknowledges that things went a little sideways during the game.  The league concedes that the referees did not apply the rules as written and “yeah, okay, maybe some mistakes were made.”  But, from the league’s perspective, it’s no big deal.  It was only one game after all and no-one is perfect!  Although the referees did not follow the rules in this particular game, it’s not like they created a whole new rule book.  Next year, when the seasons starts again, the same old rule book that had always been in place will still be used. Next year the referees will be expected to follow the old rules – not the random decisions made by the referees in last season’s championship game.  Maybe the losing team got the short end of the stick in this single game, they lost unfairly.  But life is not always fair and in the scheme of things, all will be well.  We don’t need to “replay” the game, because it was only a minor, one-time hiccup.  The letter concludes by “reassuring” the losing team that if other referees in future games start applying different rules, if it becomes a consistent problem, the league will take formal action “to do something about it.”  Until then, let’s all just move along.

The losing team is clearly not satisfied with this response.  “Ok, great,” the team thinks, if it happens again the league will “do something about it.”  But “what about us,” they say?  “We lost a game we should have won!”  “Where is the justice for us?”  What is really frustrating though, is that everyone else in the league seems to be okay with the league’s explanation.  Everyone seems to be okay with the fact that the losing team was treated unfairly.  Justice for one particular team doesn’t matter, as long as unfair treatment does not become a systemic problem.  So long as it does not happen again next year . . .

This fictional scenario seems absurd, even outrageous.  It is an embellishment, to be sure.  But the truth is that our federal appellate courts actually operate in an analogous manner.  Today, federal courts of appeal decide most cases by issuing written opinions that are designated as “non-precedential.”  The idea of a “non-precedential” opinion is to expeditiously resolve specific disputes between litigants without creating precedent.  In fact, these non-precedential opinions contain a specific disclaimer that the decision is not precedential and “does not bind the court.”  In other words, the circuit courts are basically saying, “Okay, well we decided this particular case this particular way.  But, that doesn’t mean we won’t change our mind and do the opposite next time. Carry on and good luck.”

The fundamental problem with this approach are easy to see.  But before discussing the problems with non-precedential opinions, why do these things exist in the first place? Ultimately, non-precedential opinions became a thing because of volume.  Historically, federal appellate court decisions were published in bound books sometimes called “Reporters.” Still are in fact.  In the 1950s and 1960s the volume of appeals began to rise dramatically and, thus, so did the volume of written appellate decisions.  The consequence of this increase in appellate decision was that the official bound Reporter containing appellate court opinions was becoming too large and unwieldy.  The Judicial Conference noted this problem, and also recognized that a lot of the opinions being crammed into the Reporter were redundant and only addressed well-established legal rules.  Because these opinions were not creating new precedent or clarifying old precedent, they really were not all that important.  So why take up space in the Reporter with these run-of-the-mill opinions?

The second issue, also the result of an uptick in volume, was that the number of appellate court judges was not keeping pace with the number of appeals.  So as the number of appeals continued to grow, appellate judges were forced to churn out more and more opinions.  The strain on judicial time and resources started becoming a problem.

So the Judicial Conference came up with a simple solution that would reduce the size of the federal appellate Reporter and relieve the strain on appellate court judges.  Instead of the appellate courts deciding each appeal with a precedential opinion, why not create “non-precedential opinions”?  The idea being that for run-of-the-mill cases, those that do not involve new issues of law or novel issues of fact, why not let appellate court judges dispose of these cases quickly, without much effort? A lot of time and attention is spent on precedential judicial opinions because litigants rely on those decisions and lower court judges are required to follow them (trial court judges are “bound” by the appellate court decision). Precedential opinions have a ripple effect, they impact everyone, not just the parties involved in the specific lawsuit being decided by the appellate court.  But if we allow appellate judges to designate an opinion as “non-precedential,” we can do away with this ripple effect! Other litigants will not be allowed to rely on “non-precedential decisions” and lower courts will not be bound by them.  It’s like it never happened!  These non-precedential opinions don’t really exist!  And if they don’t really exist and won’t impact anyone else, appellate court judges do not need to spend as much time on them.  If they get it wrong, it’s no big deal because the damage will be limited. Plus, these “non-precedential opinions” will not be placed in the federal Reporter so they would not take up valuable space on the bookshelf.  Sounds like a great plan, right?

For their part, the various circuit courts of appeal were really digging this new “non-precedential” opinion deal.  In fact, non-precedential opinions became so popular that the in the past 10 years, the vast majority of all appellate court decisions are non-precedential.  From 2000 through 2008, for instance, approximately 85% of the Third Circuit’s decisions were non-precedential (the Third Circuit includes Pennsylvania, New Jersey and Delaware).

But this “non-precedential” opinion approach has its problems.  In fact it is a quintessential example of a plan looking really good on paper, but having really troubling implications.  One of the prime problems being that non-precedential opinions appear fundamentally unfair.  Another is that non-precedential opinions turn the entire concept of predictable rules on its head.

Let’s start with the issue of fairness.  First of all, allowing judges to “decide” which cases to designate as non-precedential (i.e. not worthy of publication or precedent) gives the unmistakable impression that appellate courts prejudge certain cases before even getting to the merits.  From the outside, it looks like appellate courts are imposing a subjective and opaque classification system. Deciding, without explanation, which cases are worthy enough for publication (and, some would argue, entitled to more time and attention) and which are not. From an optics perspective, this is problematic.  Although it is true that most appeals do not implicate broad social, political or financial concerns, that doesn’t mean they are insignificant.  You can bet that even a “run-of-the-mill” case is vitally important to the litigants involved.  For “the little guy,” when their appeal is dispatched with a short, terse opinion, it looks like the appellate court did not take their case seriously.  It feels like they didn’t get a fair shake.  Perception and all of that.

The length and quality of non-precedential opinions often make matters worse.  I have not done any research on this issue and I don’t have any empirical evidence, data or metrics supporting my position.  However, in my experience as a practicing trial lawyer (including my time as a federal law clerk), non-precedential opinions are often significantly shorter and contain less rigorous analysis than precedential decisions.  There are exceptions of course.  But, in general non-precedential opinions appear hastier. The product of a system valuing quantity over quality.  But is this what we want from our courts of appeal?

Fairness aside, it is difficult to square non-precedential opinions with a legal system that values consistency, predictability and, quite frankly, due process.  As I noted above, at the very top of every non-precedential opinion is a disclaimer that the opinion you are about to read is not binding precedent.  That allows the same circuit court to decide the same legal issues differently in different cases.  Applying the law differently to different people is inconsistent with bedrock constitutional principles, namely due process.  To be fair, our nation is dual sovereignty with 50 states and 13 federal circuits.  So we are bound to end up with inconsistent legal rulings across the federal circuits (called “Circuit splits”) from time to time. But when different circuits decide the same legal issue differently, when there is a Circuit Split, the Supreme Court usually steps in to resolve the inconsistency.

But this is different.  It’s different because non-precedential opinions allow and arguably encourage individual circuit courts to render inconsistent rulings. Simply by designating an opinion as non-precedential, a circuit court is explicitly reserving the right to change its mind next time it hears the same issue.  The practical impact of such a discretionary system is that it provides zero clarity to litigants.  It provides zero predictability.  Today the court of appeals is saying the law is X, tomorrow it is Y, and next week it is Z. It doesn’t matter though, because the opinions are “non-precedential!”  They don’t really count!!!!

Sounds questionable, right?  Sounds fundamentally flawed?  It is, and the inherent problems are exposed when a losing party asks the circuit court for a rehearing en banc.  Normally an appeal to a circuit court is heard and decided by a three judge panel.  On rare occasions, the entire court of appeals for a circuit will decide a case together.  So, for instance, in the Third Circuit there are presently 14 active judges.  Normally a case appealed to the Third Circuit is sent to a panel of 3 judges. This is done for efficiency reasons.  If all 14 judges had to decide every case not a lot of cases would be decided. When a three judge panel makes a decision, the losing party can ask for a rehearing en banc, meaning that all of the judges on the Third Circuit reconsider the case together.

An en banc hearing is extraordinarily rare and requests for a rehearing en banc are almost always denied.   The criteria for granting an en banc rehearing is very limited.  One of the primary factors the Third Circuit will consider in deciding to proceed with an en banc rehearing is whether the panel’s decision “involves a question of exceptional importance.”  Naturally, when a losing party requests an en banc hearing they typically argue that not only was the panel’s decision wrong, but the legal issue is so important it requires an en banc rehearing to fix the mistake.  And here is where the justification and rational for non-precedential opinions begin to break down.   If the winning party files a response to the request for a rehearing en banc, it often argues that the panel’s decision was correct AND even if it is wrong, the decision is not of “exceptional importance.”  Why not? Well if the panel’s decision was non-precedential (and it almost always is), the winning side usually argues that because it is a non-precedential opinion, other courts and other judges don’t need to follow it. In fact they can ignore the decision and “fix it” next time.  In other words, there is no ripple effect.  The panel’s decision may be wrong, but the only person impacted is the guy who lost.  That may be sad for him, it may be unfair, but life is not fair and his unfortunate loss is not “exceptionally important.”

The crazy thing is, this is a legitimate argument.

So what’s the solution?  The easy answer is to do away with non-precedential opinions altogether.  The historic justification for creating non-precedential opinions is dubious and at the very least outdated.  Most attorneys do their case research online these days so ongoing concerns about thick, unwieldy hard-copy Reporters are questionable. Nobody really uses them!  It is also fair to question the argument that non-precedential opinions can be drafted faster and more efficiently than precedential decisions. If the justification is that non-precedential opinions are reserved to routine decisions based on well-established law, well then why can’t these decisions be made just as quickly without assigning a “non-precedential” label?  Shouldn’t appellate judges make the same effort in all cases? Shouldn’t they stand by the quality and clarity of their work?

Look, I get it.  Some will argue there are still advantages to non-precedential opinions.  It’s faster (again I doubt this).  It’s more efficient!  Maybe.  If you value speed and efficiency in appellate review, maybe this is a good thing.  But if you value individual justice, if you value predictability, well, you may have some legitimate concerns.

James Goslee is a trial attorney in Philadelphia and can be reached at http://jamiegoslee.com/about/