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CLM National: June 2021

News and verdicts that affect you from across the country

June 23, 2021 Photo

The U.S. Court of Appeals for the 1st Circuit determines that pharmacists provide services and do not sell goods for the purposes of claims based on the sale of goods; a series of police reform bills is signed in Washington; and, in Mississippi, the Supreme Court strikes down a medical marijuana voter initiative and also potentially upends the state’s entire voter initiative process.


Inslee Signs Police Reform Legislation

Gov. Jay Inslee signed a series of bills designed to “improve accountability for law enforcement in Washington state,” according to a statement he released. The statement adds that the bills “will create the nation’s strongest police accountability system.” Among the 12 bills Gov. Inslee signed, HB 1267 creates an Office of Independent Investigations designed to conduct independent, unbiased investigations of allegations of police use of excessive force; HB 1054 prohibits chokeholds and neck restraints, restricts vehicular pursuits, and limits the use of tear gas; SB 5051 requires more thorough oversight requirements for hiring and for reporting misconduct; and SB 5066 requires officers to intervene if they witness another officer engaging in excessive force. For a full list of the bills and links to their wording, go to https://bit.ly/3uuofZC.—From Senior Managing Editor Phil Gusman


Naval Defendant Denied Summary Judgment

In this asbestos action before the U.S. District Court for the Northern District of California, the decedent alleged asbestos exposure from pumps manufactured by defendant Warren at Hunters Point Naval Shipyard from 1962 until 1973, as well as at the Treasure Island Naval Base from 1974 until 1980. Warren moved for summary judgment, asserting plaintiff could not show exposure to asbestos from Warren pumps as the decedent did not work with any internal components of the pumps. In opposition, the plaintiff contended that the decedent worked with flange gaskets and insulation associated with Warren pumps. In this matter, the plaintiff proffered evidence to show that Warren “knew that its pumps would require maintenance, including replacing gaskets, and that it sold asbestos-containing replacement gaskets.” The court found that the defendant did not show that it was entitled to summary judgment on this issue as the defendant did not address the theory of liability related to third-party component parts.—From CLM Member Elizabeth M. Lautenbach, Goldberg Segalla


Legislature Passes COVID-19 Liability Protection Bill

The Nebraska legislature passed and sent to the governor a bill (LB 139) that provides protections to a range of people and organizations in the state from COVID-19-related civil lawsuits. The bill states, “A person may not bring or maintain a civil action seeking recovery for any injuries or damages sustained from exposure or potential exposure to COVID-19 on or after the effective date of this act if the act or omission alleged to violate a duty of care was in substantial compliance with any federal public health guidance that was applicable to the person, place, or activity at issue at the time of the alleged exposure or potential exposure.” The bill does not affect rights or coverage limits under the Nebraska Workers’ Compensation Act.—From Senior Managing Editor Phil Gusman


Supreme Court Strikes Down Medical Marijuana

Voters approved a medical marijuana initiative in November 2020, but the Mississippi Supreme Court recently struck it down, and also called into question the state’s entire voter initiative process. The issue concerns Article 15, section 273(3) of the state’s constitution, which stipulates constitutional-amendment initiatives may be placed on the ballot if a certain percentage of signatures are obtained from the state’s five congressional districts. However, currently, Mississippi has four congressional districts. The court reasoned, “Whether with intent, by oversight, or for some other reason, the drafters of section 273(3) wrote a ballot-initiative process that cannot work in a world where Mississippi has fewer than five representatives in Congress.” In a dissenting opinion, Justice Maxwell says the majority correctly points out the Supreme Court cannot amend the state’s constitution. “Yet the majority does just that—stepping completely outside of Mississippi law—to employ an interpretation that not only amends but also judicially kills Mississippi’s citizen initiative process.”—From Senior Managing Editor Phil Gusman


Supreme Court to Decide if COVID-19 Is Direct Physical Loss

The Ohio Supreme Court has recently agreed to answer a certified question about whether the presence of COVID-19 in the community or on surfaces constitutes a “direct physical loss or damage to property.” In Neuro-Communication Services Inc. v. Cincinnati Ins. Co., the insured bought an all-risk insurance policy that covered “direct loss” at the premises due to a “covered cause of loss.” The subject policy, which does not include a virus exclusion, defines “loss” as “accidental physical loss or accidental physical damage.” As a result of the pandemic, Neuro-Communications halted operations between late March and early May 2020, leading to significant financial losses. The Supreme Court’s decision will impact dozens of cases filed by Ohio businesses against commercial insurers for lost revenue caused by statewide COVID-19 restrictions.—From Northeast Ohio Chapter President Michael C. Brink, Progressive Insurance


Pharmacists Provide Services; Do Not Sell Goods

When a plaintiff sues a pharmacist for dispensing and selling a prescribed medication that allegedly causes an injury, is the claim based on the negligent provision of services or on the sale of a defective product? A recent case in the U.S. Court of Appeals for the 1st Circuit arose out of the plaintiff’s use of Levaquin, a prescription quinolone antibiotic. The pharmacy prevailed at the district court level, and the 1st Circuit upheld the dismissal of plaintiffs’ claims on summary judgment. The plaintiff’s negligence-based claims were properly dismissed because, as the 1st Circuit explained, the plaintiff failed to proffer any non-excluded expert testimony to support them. More applicable to other cases is the 1st Circuit’s conclusion that, when a pharmacist dispenses and sells a prescription medication, it is primarily a provision of services and not the sale of a good. This means that claims based on a theory founded on a sale of goods—such as the breach of warranty claim asserted by plaintiff in this case—must necessarily fail.—From CLM Member H. Lockwood Miller III, Goldberg Segalla

About The Authors
Phil Gusman

Phil Gusman is senior managing editor for CLM Magazine and Construction Claims magazine.  phil.gusman@theclm.org

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