Failure to Maintain Sterilization Equipment Falls Under Purview of MMA

Plaintiff filed suit against a hospital when he developed an infection following spine surgery. Defendant filed an exception of prematurity, arguing that it was a qualified healthcare provider under the Medical Malpractice Act (MMA) and that plaintiff’s claims had not yet been presented to a medical review panel. The district court granted the exception as to all of plaintiff’s allegations with the exception of the allegation that defendant failed to properly maintain and service all equipment utilized in the sterilization process.

On a supervisory writ, the Louisiana Supreme Court found that plaintiff’s improper sterilization allegation also fell under the MMA. Under the MMA, a medical malpractice claim against a qualified healthcare provider is subject to dismissal if the claim has not yet been reviewed by a medical review panel. The MMA applies strictly to medical malpractice, and all other tort liability on the part of a qualified healthcare provider that falls under general tort law. The Court ultimately concluded that that the conduct at issue constitute malpractice under the MMA. First, the alleged conduct was treatment related. Next, the allegation would require expert medical evidence to determine whether the standard of care was breached. Further, the allegation fell within the scope of activities that defendant was licensed to perform. Finally, the injury would not have occurred had plaintiff not sought medical treatment. Therefore, the Court ruled that the district court should have granted defendant’s exception in its entirety.

Dupuy v. NMC Operating Co., LLC d/b/a The Spine Surgery Hospital of Louisiana

Maro Petkovich, Jr.
mpetkovich@mblb.com

Liebeck, Move Over – There’s a New Plaintiff in the Coffee Game

Remember the “hot coffee case” (Liebeck v. McDonald’s Restaurants)? Well, now Starbucks is in the litigation crosshairs for its allegedly insufficient and falsely advertised iced drinks. Stacy Pincus, from Illinois, filed a lawsuit against Starbucks on April 27, 2016, accusing the company of cheating its customers out of delicious cold iced coffee; too much ice is the problem. The complaint reads in part:

A Starbucks customer who orders and pays for a Cold Drink receives much less than advertised . . . often nearly half as many fluid ounces. This is a class action lawsuit against Starbucks for misrepresenting its Cold Drinks as having more fluid ounces of the ordered Cold Drink than it actually delivers . . . and charges . . . the customer for.

The complaint continues:

Plaintiff would not have paid as much, if anything for the Cold Drinks had she known that it contained less, and in many cases, nearly half as many, fluid ounces than claimed by Starbucks. As a result, Plaintiff suffered injury in fact and lost money or property.

The plaintiff goes as far as to allege elements of conspiracy, in that “Starbucks instructs its employees to provide its customers with fewer fluid.”

As for Starbucks’ position, they were quoted as follows: “Our customers understand and expect that ice is an essential component of any ‘iced’ beverage. If a customer is not satisfied with their beverage preparation, we will gladly remake it.”

Stacy Pincus v. Starbucks Corporation

Michael P. Shlansky
mshlansky@mblb.com

Government Adaptation to the Increase in Ride-Hailing Apps

Over the last year, ride-hailing companies like Uber and Lyft have faced increased scrutiny from local governments and the taxi cab industry as they attempt to expand their growth into new markets. On Saturday, May 7, 2016, voters in Austin, Texas voted against a proposition that would allow ride-hailing companies to continue to use their own background check systems in certifying their drivers. Instead, Austin has proposed requiring these companies to fingerprint their drivers. Advocates for this requirement argue that fingerprinting is a more thorough way to identify potential drivers with criminal histories.

The ride-hailing companies have countered that fingerprinting relies on outdated databases and makes it increasingly difficult to hire drivers in a timely fashion. This is especially true when considering that the business models of these companies rely heavily on part-time drivers. In response to the recent vote, Uber and Lyft have indicated that they will cease operations in Austin. The impact of the Austin vote on this burgeoning industry raises questions of the viability of this business model when faced with government regulation and the public rebuke of the industry push in a city viewed to be open to technological innovation.

Pierce C. Azuma
pazuma@mblb.com

Do Not Wait – Timely Evidence is Necessary in Discovery Disputes

In the course of the discovery phase of federal court litigation, parties oftentimes find themselves in a heated discovery dispute. One party seeks production of information or entry upon land for inspection of property, while the responding party objects to the requested discovery, either partially or in its entirety. In these circumstances, the requesting party may move the court to compel the requested discovery, pursuant to Rule 37 of the Federal Rules of Civil Procedure. Depending on the local rules for the district court where the action is pending, motions to compel are typically referred to the magistrate judge allotted to the case.

What happens if a party is displeased with the magistrate judge’s discovery order? In such event, a party may appeal the magistrate’s order to the district judge assigned to the case, pursuant to Rule 72 of the Federal Rules of Civil Procedure. Inasmuch as a motion to compel is a non-dispositive pretrial motion, subsection (a) of Rule 72 applies. Rule 72(a) states:

When a pretrial matter not dispositive of a party’s claim or defense is referred to a magistrate judge to hear and decide, the magistrate judge must promptly conduct the required proceedings and, when appropriate, issue a written order stating the decision. A party may serve and file objections to the order within 14 days after being served with a copy. A party may not assign as error a defect in the order not timely objected to. The district judge in the case must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law.

“A finding is ‘clearly erroneous’ when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948). A legal conclusion is contrary to law “when the magistrate fails to apply or misapplies relevant statutes, case law, or rules of procedure.” Ambrose-Frazier v. Herzing Inc., No. 15-1324, 2016 WL 890406, at *2 (E.D. La. 3/9/2016). For issues that are committed to a magistrate judge’s discretion, such as the resolution of discovery disputes, the decision will be reversed only for an abuse of discretion.

On appeal, the losing party to a discovery motion may attempt to offer new evidence, or new arguments based on new evidence, for the district court judge to consider on the appeal. However, the district court is typically not permitted to consider any such new evidence on appeals of non-dispositive matters, such as discovery motions. Under Rule 72(a), “the district court is not permitted to receive further evidence; it is bound by the clearly erroneous rule in reviewing questions of fact.” Haines v. Liggett Grp. Inc., 975 F.2d 81, 91 (3rd Cir. 1992).

Accordingly, attorneys must exercise due diligence and gather all necessary evidence when presenting and/or opposing discovery motions. If a magistrate does not rule in your favor, you will lose your opportunity to bolster any argument with additional evidence, should an appeal be made.

Michael H. Rodrigue
mrodrigue@mblb.com

Advancing Technology’s Consumption of Rights

In a recent case, which highlights the ongoing turbulence between technology and the law, a California woman, Paytsar Bkhchadzhyan (kudos to those who can pronounce that) was recently ordered to provide her fingerprint to unlock a seized iPhone.

Being ordered to provide a passcode could be considered testimonial, thus running afoul of the Constitutional right against self-incrimination. However, the same does not hold true when compelled to give up something physiological or biometric (i.e. a DNA sample and/or fingerprints).

Cases that have demanded that someone unlock his or her smartphone with their own fingerprint remain relatively rare. In 2014, a Virginia Circuit Court judge found that a person does not need to provide a passcode to unlock their phone for the police, and it also ruled that demanding a suspect to provide a fingerprint to unlock a phone would be constitutional.

However, as we move toward authentication systems based solely on physical tokens or biometrics (things we have or things we are, rather than things we remember) the government could demand that we produce them without implicating anything we know, making it less likely that a valid privilege against self-incrimination would apply. Moral of the story: if you’re going to commit crime, think about switching back to your old flip-phone.

Michael P. Shlansky
mshlansky@mblb.com

Puerto Rico’s Latest Debt Restructuring Proposal

On April 11, 2016, Puerto Rico announced its latest debt restructuring proposal. The U.S. Territory faces $70 Billion in total debt, a 45% poverty rate, and a shrinking population, all of which threaten to collapse its economy. The government already stated that it cannot afford to pay the $422 million due on May 1, 2016.

The most recent plan would reduce a $49 Billion dollar portion of its debt by $12 to $17 billion by exchanging existing debt for two classes of new bonds—a base bond and a capital appreciation bond.

Stateside, the U.S. congress is expected to unveil a new bill that would put Puerto Rico’s finances under federal oversight and likely provide a legal debt restructuring mechanism. The bill is expected to be unveiled this week.

http://www.reuters.com/article/usa-puertorico-debt-idUSL2N17E0M6

Juan C. Obregon
jobregon@mblb.com

Can a LLC Recover Damages for a Member’s Slip and Fall?

In Louisiana, corporations and business entities are juridical persons that often have rights similar to natural persons, i.e. humans. A recent decision by the Louisiana Fifth Circuit Court of Appeal helps clarify the legal distinctions between juridical and natural persons. In that case, Deborah Norred, the sole member of American Rebel Arms, LLC (“LLC”), suffered bodily injuries as the result of a slip and fall in a restaurant in Jefferson Parish. Individual lawsuits were thereafter filed by both Norred and the LLC against the restaurant. In her capacity as the sole member of the LLC, Norred alleged that due to her injuries she was unable to open the LLC as originally scheduled, thus resulting in business losses. The restaurant filed a motion asserting that a LLC has no cause of action for personal injuries caused to its sole member. The district court sustained the motion and dismissed the LLC’s claims with prejudice.

On appeal, the Louisiana Fifth Circuit noted that the purpose of a peremptory motion for no cause of action is to address whether, on the face of the petition, accepting all allegations as true, if there is a valid cause of action for relief. As the plaintiff’s claims sounded in negligence, the sole issue was whether the restaurant owed the LLC a legal duty. The court noted that duties that arise under the Louisiana Merchant Liability Statute only extend to natural persons, not juridical persons such as LLCs. Because the restaurant did not owe a duty to the LLC, it had no valid cause of action stemming from Norred’s slip and fall. The district court’s dismissal of the LLC was affirmed.

American Rebel Arms, LLC v. New Orleans Hamburger and Seafood Company

Jeremiah N. Johns
jjohns@mblb.com

Failure to Formally Cancel Policy Costs Insurer

A recent decision by the Louisiana First Circuit Court of Appeal demonstrates the importance of formally cancelling an insurance policy when coverage has lapsed or expired. In this case, Smith filed a Petition for Damages against Shelmire and her auto liability insurer, Gramercy Insurance Company (“Gramercy”), for an automobile accident that occurred on July 27, 2010. Shelmire failed to pay her insurance premium that was due on July 20, 2010. Notably, a few hours after the motor vehicle accident, Shelmire went to the insurance company’s office and paid the outstanding premium. Gramercy proceeded to pay the property damage claim.

In the lawsuit, Gramercy filed a motion for summary judgment asserting that there was no insurance coverage at the time of the accident because Shelmire had allowed coverage to lapse. The judge denied the motion and the case proceeded to a bench trial where the court ruled that Gramercy was responsible because it never formally cancelled Shelmire’s policy. Gramercy thereafter appealed to the Louisiana First Circuit Court of Appeal, which noted that an insurer has the burden to establish that a policy had been cancelled for nonpayment of premium. The court pointed out that Gramercy offered no credible evidence that it had actually cancelled the insurance policy. Rather, Gramercy actually paid Shelmire’s property damage claim knowing that the accident had occurred after coverage had technically lapsed. Accordingly, the lower court’s decision was affirmed.

This case exemplifies the importance of being mindful of the voluminous regulations that govern the insurance industry in Louisiana, in addition to the hundreds of cases interpreting these same regulations.

Smith v. Gramercy Insurance Company

Jeremiah N. Johns
jjohns@mblb.com

Deepwater Horizon Settlement

On April 4, 2016, U.S. District Judge Carl Barbier, approved a Consent Decree between BP, the United States, and the Gulf States (Alabama, Florida, Louisiana, Mississippi, and Texas) related to the civil claims brought in response to the Deepwater Horizon explosion on April 20, 2010 and the subsequent discharge of oil from the Macondo Well site. Under the agreement, BP agreed to pay $5.5 billion in civil damages to be paid in installments through 2031. BP also agreed to pay $7.1 billion for Natural Resources Damages. Additional payments, penalties and interest were also included for a total settlement amount as much as $20.8 billion.

In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010

Pierce C. Azuma
pazuma@mblb.com

Is Your Website ADA Compliant?

Title III of the Americans with Disabilities Act (“ADA”) has traditionally been thought of as requiring access to physical places of public accommodations to disabled individuals. Title III does not expressly apply to websites. However, in certain situations, courts have begun to extend the reach of the ADA to websites. In National Federation for the Blind v. Target Corporation, a class action lawsuit was filed against Target alleging that Target’s website was not accessible to blind individuals. The court rejected Target’s argument that a website is not a “place of public accommodation,” noting that the purpose of the ADA is broader than physical access, especially where there is a nexus between a place of public accommodation and website. Rather, the court held that the ADA bars actions that “impair a disabled person’s ‘full enjoyment’ of services or goods of a covered accommodation.”

The Department of Justice is evidently in support of expanding the scope of the ADA to cover certain websites. In June 2015, the DOJ filed Statements of Interest in class action lawsuits brought against two private universities in which the plaintiffs sought to have thousands of videos posted on the universities’ websites to be captioned for the hearing impaired. The plaintiffs were not students who enrolled in courses that used uncaptioned video content. Rather, the plaintiffs asserted that video content should be made accessible to the public at large. In briefs to the court, the DOJ stated that a final rule on web accessibility is scheduled to be released in the spring of 2016. Perhaps evidencing things to come, the DOJ argued that the universities should make online programming accessible to “the public at large” for topics of general interest.

Website accessibility is a legal gray area that will continue to develop with time and advances in technology. However, the general trend appears to be in favor of expanding the scope of the ADA so that websites are accessible to the disabled.

Jeremiah N. Johns
jjohns@mblb.com