CLM National: December 2018

Loss estimates are in for California’s wildfires, an Illinois court rules on the ability of a MAP to bring a secondary payer private cause of action, and, in Florida, a ruling establishes Frye, rather than Daubert, as the standard governing expert testimony in the state.

California

Camp, Woolsey Wildfire Losses Could Reach $19 Billion

Loss estimates are rolling in for the Camp and Woolsey Wildfires, with RMS estimating insured losses between $9 billion and $13 billion and CoreLogic estimating total losses at between $15 billion and $19 billion. AIR Worldwide estimates insured losses from just the Woolsey Fire to be at least $2.5 billion. RMS estimates between $1.5 billion and $3 billion in insured losses for the Woolsey Fire and between $7.5 billion and $10 billion for the Camp Fire, with RMS’ estimates including property and auto damage including burn and smoke damage; business interruption; additional living expenses; and contents loss. CoreLogic estimates total losses of between $11 billion and $13 billion for the Camp Fire and between $4 billion and $6 billion for the Woolsey fire. “This analysis of both residential and commercial properties accounts for building, contents, and additional living expenses, and the estimated losses include fire, smoke, demand surge, and debris removal,” CoreLogic says.—From CLM Managing Editor Phil Gusman

Illinois

MAP Can Bring Secondary Payer Private Cause of Action

42 U.S.C. §1395y(b)(3)(A) creates a private cause of action for double damages against one who fails to reimburse Medicare as required. MAO-MSO Recovery II, LLC, et al. v. State Farm Mutual Automobile Insurance Company decided whether Medicare Advantage Plans (MAPs)—not the government itself—could bring this private cause of action. Plaintiff alleged defendant was a primary payer who failed to reimburse it for its insured’s medical expenses. The Illinois district court rejected defendant’s argument that, because it exhausted the limits of its no-fault coverage, plaintiff was not entitled to reimbursement. The court further stated that the 7th Circuit has not established the parameters of this cause of action by a MAP. However, the court noted holdings from other circuits recognizing MAP’s right to bring this action. It denied defendant’s motion to dismiss, permitting the suit to proceed.—From CLM Member Sean P. Sheehan

Kentucky

Medical Record Review Cannot Be Used to Deny No-Fault Benefits

The Kentucky Supreme Court issued a decision in November in GEICO v Houchens that upheld the appellate court’s ruling that a paper review of medical records cannot be used to unilaterally deny payment of no-fault benefits to claimants in automobile accidents. The decision limited denial to those circumstances specifically provided by KRS 304.39-200. However, the insurance carrier has the right of recovery for payment of any medical bills paid under KRS 304.39.210(4) against the provider or the insured dependent upon which misrepresented the fact to the insurance carrier.—From CLM Member Patricia J. Trombetta

New York

Court of Appeals Broadens Access to Plaintiffs’ Social Media Postings

The New York Court of Appeals dramatically expanded defendants’ ability to access a plaintiff’s social media postings. Chief Justice Janet DiFiore, writing for a unanimous court in Forman v. Henkin, soundly rejected New York appellate case law requiring a party to demonstrate “a factual predicate” before demanding production of “private” social media evidence. The Court of Appeals said such a heightened threshold “effectively permits disclosure only in limited circumstances, allowing the account holder to unilaterally obstruct disclosure merely by manipulating ‘privacy’ settings or curating the materials on the public portion of the account.” While the Forman decision rectifies the most egregious injustices that existed under prior case law, it creates a potential boondoggle of future litigation. The court suggests the party opposing disclosure make the initial determinations as to relevancy, which will certainly spawn further disputes and controversies down the road.—From CLM Member Claire Rush

Florida

Ruling Establishes Frye as Standard for Expert Testimony

In a rules decision in October 2018, the Florida Supreme Court established Frye as the standard governing expert testimony in Florida’s state courts, overruling the federally accepted Daubert standard for expert testimony in the Sunshine State. When assessing Daubert in the case of DeLisle v Crane Co. et al., the Florida Supreme Court issued a rules decision to the 2013 legislative amendment of Section 90.702 of the Florida Rules of Evidence, which incorporated Daubert as the standard governing admission of expert witness testimony. The court determined that the legislature’s codification of Daubert violated the state’s Constitution. This ushered in Frye as the standard in Florida courts, despite Daubert’s continued admissibility in federal courts. If you have a Daubert motion pending in Florida, then reassess under the Frye standard, but be aware there is uncertainty in the workers compensation sector, with that system remaining under the executive branch.—From CLM Member Kristin Keehan

New Jersey

Bill Legalizing Recreational Marijuana Advances

New Jersey appears on track to become the 11th state to legalize recreational use of marijuana after bills were reported out of committees in both the Senate and Assembly. S2703/A4497 passed the Senate Budget and Appropriations Committee by a seven-to-four vote with two abstentions, and passed the Assembly Appropriations Committee by a seven-to-three vote with one abstention. The measure would allow possession of up to an ounce of marijuana for people 21 and older, limit where marijuana can be used in a way similar to limitations on tobacco smoking, and establish a 14 percent tax on the sale of the drug. While news reports indicate that the bill is expected to pass, complications remain. Bloomberg reports that Gov. Phil Murphy is unhappy with the tax rate, which would be the lowest in the U.S. And USA Today states that nearly 40 municipalities in the state have voiced opposition to legalization, with some banning marijuana businesses.—From CLM Managing Editor Phil Gusman