California: Medical Device Cases Move Forward
In drug and medical device cases, the manufacturer generally is entitled to a defense that preempts any state law claims. In a case involving the birth control device Essure, a California trial court judge has ruled in favor of the plaintiffs, denying a preemption defense and allowing the plaintiffs’ cases to go forward. The plaintiffs argue that the drug manufacturer did not properly complete post-market studies and therefore the state law claims may proceed. The judge also has consolidated 58 cases. Additionally, HR 5403, or “Ariel Grace’s Law,” was introduced to Congress to amend the Federal Food, Drug and Cosmetics Act to restrict claims of preemption in medical device cases. However, such legislation is considered unlikely to pass.—From CLM Member Ned Babb
Illinois: Landowner Negligence Not Immunized Under Snow and Ice Removal Act
On Dec. 1, 2016, the Illinois Supreme Court issued its decision in Murphy-Hylton v. Lieberman Mgmt. Services Inc., holding that the Snow and Ice Removal Act does not immunize a landowner from negligence claims arising from a defective condition or a failure to maintain the premises that results in an unnatural accumulation of ice on sidewalks. Under the act, a landowner is insulated from liability arising out of claims from negligent snow and ice removal efforts. The Supreme Court’s interpretation of the act finds that immunity will not be extended to claims caused by icy sidewalks that result from an otherwise negligent failure to maintain the premises. The court held that extending immunity to claims of that nature “would reward a landowner’s passivity in failing to exercise due care in maintaining his property in a reasonably safe condition and would turn the purpose for the immunity on its head.” This case further clarifies the scope of immunity provided under the Snow and Ice Removal Act.—From CLM Members James A. Foster and Lara Lickhalter
Kentucky: After 95 Years, Opportunity for Change in Bad Faith and Tort Reform
While much of the country was focused on the presidential election on Nov. 8, an earthquake was happening in Kentucky. After 95 years of Democratic control of the statehouse, many of whom were members of the plaintiff’s bar and presented obstacles to bad faith and tort reform change, the balance of power shifted greatly. With this change, there is opportunity to have a profound impact on both tort and bad faith reform. Those with ideas on how to exact changes that will positively impact our insurance system are encouraged to share them.—From Kentucky Chapter President Ronald L. Green
Ohio: Person Identified as Driver on Auto Policy Is Ineligible for Coverage as Named Insured
In Wetzel v. Auto-Owners Ins. Co., an appellate court upheld a summary judgment denying underinsured motorist coverage to the son of a commercial policyholder. Shane Wetzel, who had been severely injured in an accident while driving his girlfriend’s car, sought coverage through an Auto-Owners policy issued for his father’s trucking company, which identified him as a “scheduled driver” on the declarations page. Wetzel alleged that the policy’s failure to define that term created an ambiguity about whether he was a “named insured” entitled to underinsured motorist coverage. In rejecting his coverage argument, the appellate court emphasized that Wetzel’s name appeared nowhere else in the policy besides the declarations page. This decision adds Ohio to the majority view that listing an individual as a driver on the declarations page of an insurance policy does not make that individual a named insured.—From Northeast Ohio Chapter Secretary Michael C. Brink
Texas: When Does a Cause of Action Accrue?
When does a cause of action under a homeowners’ policy arise? In Vada De Jongh v. State Farm Lloyds, the U.S. District Court of Appeals for the 5th Circuit held that the cause of action accrued when an insurer closed its file, even though the insured claimed she didn’t know the file had been closed and had not received a denial letter. In affirming a grant of summary judgment, the court stated, “Under Texas law, ‘a cause of action accrues when a wrongful act causes some legal injury, even if the fact of injury is not discovered until later.’” The court referenced the discovery rule that can delay the accrual if the injury is fraudulently concealed or inherently undiscoverable, but the plaintiff denied reliance on the discovery rule. The court noted that the closing of the claims file was an objectively verifiable event and, therefore, the date of closure of the file began the accrual of the cause of action for the statute of limitations.—From CLM Member James C. Wright
Washington: Where Duty to Protect Begins and Ends
Schools and youth-serving entities in Washington face liability claims for youth-on-youth, out-of-custody conduct. In N.L. v. Bethel School District, the Washington State Supreme Court held that the school district could be liable for injuries occurring off campus and out of custody if the alleged breach of the duty to protect occurs while the student is in custody. This matter involved two students on the track team: a 14-year-old girl and an 18-year-old male registered sex offender who mentored younger track students and sexually assaulted the younger student in his home at lunchtime. The school knew that the 18-year-old was a registered sex offender but failed to give notice to staff or to create a safety plan to prevent his contact with younger female students. This opens a new avenue for imposing deep-pockets liability for incidents out of the school’s supervision.—From CLM Member Karen Kalzer