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CLM National: November 2021

News and verdicts that affect you from across the country

November 29, 2021 Photo

Louisiana lifts its mask mandate in most settings, Honeywell International files suit against an asbestos victims trust, and, in Texas, competing state and federal rules regarding vaccine mandates muddy the waters for businesses in the state.

Washington

Judge Strikes Down Emergency Credit Scoring Rule

Thurston County Superior Court Judge Mary Sue Wilson overturned Insurance Commissioner Mike Kreidler’s emergency rule that temporarily banned insurers’ use of credit scoring in Washington. According to news reports, Judge Wilson found Kreidler did not have “good cause” to file the rule as an emergency, noting that Kreidler did not tell the legislature the matter was an emergency when the legislature considered a bill that would have done the same thing. Kreidler, who made the emergency rule after that bill died, said in a statement that he was “disappointed” in the ruling, adding, “It’s way past time for the industry to apply reliable and fairer factors to determine premiums.” When Kreidler made the rule, he cited as justification disruptions to the credit reporting crisis due to state and federal emergency COVID-19 actions. “This disruption has caused credit-based insurance scoring models to be unreliable and, therefore, inaccurate when applied to produce a premium amount for an insurance consumer in Washington state,” his rule stated.—From Senior Managing Editor Phil Gusman

California

New PFAS Laws Regulate Children’s Products, Food Packaging

On Oct. 5, Gov. Gavin Newsom signed two laws further restricting the use of per- and polyfluoroalkyl substances (PFAS). AB 652 will bar the use of PFAS in the manufacturing and sale of children’s products, including car seats, pillows, bassinets, changing pads, playmats, bouncers, walkers, strollers, and cribs, unless they were previously owned. The law specifically excepts from regulation medical devices, and “children’s electronic products, including, but not limited to, a personal computer, audio and video equipment, calculator, wireless phone, game console, handheld device incorporating a video screen, or any associated peripheral....” The second law, AB 1200, set to take effect on Jan. 1, 2023, will ban “intentionally added” PFAS from food packaging, require companies that make cookware to disclose on their product labels whether they use PFAS, and include a statement regarding how a consumer can obtain more information about the chemicals in the cookware.—From CLM Member Oliver E. Twaddell, Goldberg Segalla

Texas

Abbot Order, Federal Rule at Odds

On Oct. 11, Gov. Gregg Abbott issued an executive order banning COVID-19 vaccine mandates for all entities in the state, including private businesses, for both employees and patrons, subject to a fine up to $1,000. Abbott’s order comes conflicts with President Joe Biden’s Executive Order mandating vaccinations for certain businesses. If businesses comply with Abbott’s ban, they will be in violation of federal law, with penalties expected to be in the range of $14,000 per violation and potentially higher. If they comply with Biden’s vaccine mandates, they will be in violation of Texas law. Texas employers are advised to wait for further guidance from the governor’s office, the legislature, OSHA, or a court ruling before changing or altering any policies in place. Texas employers with 100 or more employees, health care employers, and federal contractors will likely need to comply with federal law regarding vaccines in the workplace, and may be able to avoid application of the Abbott order.—From CLM Members Dana C. Ring and Madison O. Arcemont, Wood, Smith, Henning & Berman

Louisiana

Mask Mandate Lifted in Most Settings

Gov. John Bel Edwards announced on Oct. 26 that he will lift Louisiana’s statewide mask mandate in all settings except for K-12 schools. He cited “sustained improvement across the state in terms of new cases, test positivity, and hospitalizations.” In a statement, Edwards says, “Today, I am cautiously optimistic and very relieved that the worst of this fourth surge of COVID-19 is clearly behind us, which is a direct result of the people of Louisiana who stepped up to the plate when we needed them to and put their masks back on, got vaccinated, and took extra precautions to stay safe.” Edwards adds that, while the K-12 mask mandate will remain in place, school districts can opt out if they follow existing, evidence-based CDC quarantine guidance. Masks will still be mandated by federal regulation in some instances, including on mass transit and in health care facilities.—From Senior Managing Editor Phil Gusman

Pennsylvania

Honeywell Files Suit Against NARCO Asbestos Trust

Honeywell International, Inc. has filed a claim in the U.S. Bankruptcy Court for the Western District of Pennsylvania against the North American Refractories Co. asbestos victims trust. The trust was established to resolve the bankruptcy of Honeywell’s former affiliate, North American Refractories Co. (NARCO). In the lawsuit, Honeywell alleges that there has been severe and abusive mismanagement of the trust, and that the trust has paid claimants that have not demonstrated any exposure to a NARCO product. Following Honeywell’s lawsuit, the trust administrators filed suit against Honeywell. The trust administrators allege Honeywell’s lawsuit is an attempt to evade its obligation to fund the trust. This litigation may have interesting implications impacting the future management of other bankruptcy trusts. Regardless of the outcome, this lawsuit highlights the importance of meaningful oversight of the asbestos bankruptcy trust system.—From CLM Member Catherine L. Schwarze, Goldberg Segalla

New York

Bills Threaten Business Environment for Insurers

Between taxes, regulations, and high costs such as housing, companies often skip New York as a place to do business in favor of friendlier, pro-business jurisdictions. Now, the New York legislature might be helping that trend along as they consider two pieces of legislation that would drastically change bad faith in New York. Bill A7285 creates a new private cause of action against an insurer that has refused or delayed payment of a claim. Bill A5623B would allow a plaintiff to recover interest, costs and disbursements, compensatory damages, consequential damages, and reasonable attorney’s fees for bad faith. In addition, the plaintiff would recover amounts due under the policy when the insurer has refused to pay, settle, and or unreasonably delayed payment of a claim and was not reasonably justified. If these two bills pass, it’s unclear what New York’s new governor, Kathy Hochul, will do.—From CLM Member Marc H. Pillinger, Pillinger Miller Tarallo LLP

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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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