A district court in Oklahoma rules Johnson & Johnson must pay for its part in the state’s opioid crisis, Alabama increases the jurisdictional limit for civil district court cases, and, in Nevada, a new law will allow observers to attend independent medical examinations and, in some cases, suspend them.
Oregon
Insured Not Entitled to Coverage for Losses Under Prior Policies
In Summit Real Estate Mgmt. LLC v. Mid-Century Ins. Co., the Oregon Court of Appeals addressed coverage under successive commercial crime policies. The insured had commercial crime coverage continuously in place with the insurer from 2004 to 2013. In July 2013, the insured discovered that its bookkeeper had embezzled from the company from 2005 to 2013. The insurer had agreed to cover the funds embezzled in 2010 and thereafter under the three policies in effect in 2010-11, 2011-12, and 2012-13; the insurer denied coverage for losses prior to this time under the earlier policies. The insured contended that there was coverage back to 2005 because coverage had been continuously in place. The Court of Appeals rejected the insured’s contention, agreeing with the insurer that the coverage only extended back to the 2010-11 policy.—From CLM Member Geoff Bedell
Nevada
New Law Allows Observers to Attend, Suspend IMEs
The Nevada legislature passed, and Gov. Steve Sisolak has signed, AB 285, which allows a claimant’s lawyer, but not defense lawyer, to attend an IME, and unilaterally suspend the IME in certain circumstances. The bill “authorizes an observer to suspend an examination if the person conducting the examination is abusive towards the person being examined or the person conducting the examination exceeds the authorized scope of the examination.” The bill also allows the person conducting the examination to suspend the examination if the observer attempts to participate in or disrupt it.—From CLM Member Michael Lowry
Oklahoma
J&J Ordered to Pay $572 Million for Opioid Crisis
Cleveland County District Court Judge Thad Balkman ruled that Johnson & Johnson must pay Oklahoma $572 million for the company’s part in helping to fuel the opioid epidemic in the state. Balkman ruled that the defendants’ marketing overstated the efficacy of opioids and disseminated the message that pain was being under-treated, and that there was a low risk of abuse and a low risk of danger when prescribing opioids. The state argued that the defendants caused a public nuisance pursuant to Oklahoma law. Balkman agreed, stating, “Based upon my finding that the defendants’ false, misleading, and dangerous marketing campaigns have caused exponentially increasing rates of addiction, overdose deaths, and neonatal abstinence syndrome, I conclude these are unlawful acts which ‘annoys, injures, or endangers the comfort, repose, health, or safety of others.’” The $572 million is the cost to the state for one year of its plan to combat the opioid crisis. Johnson & Johnson says it plans to appeal the verdict.—From Managing Editor Phil Gusman
Texas
Late-Fee Collection Requirements Updated
Texas has updated the conditions under which a landlord may collect a late fee for a tenant’s failure to pay rent under the state’s property code. Effective Sept. 1, 2019, for leases that are new or renewed after that date, a landlord may not collect a late fee unless the notice of the fee is included in a written lease, the fee is reasonable, and any portion of the tenant’s rent has remained unpaid two full days after the date the rent was originally due. The prior version of the statute defined “reasonable fee” as an estimate of uncertain damages to the landlord that is incapable of precise calculation and results from late payment of rent. The updated provisions define “reasonable fee” as the greater of not more than 10 percent or 12 percent of the rental period, depending on the number of units in the structure; or not more than uncertain damages to the landlord that relate to the late payment of rent, including direct or indirect expenses, direct or indirect costs, or overhead associated with the collection of late payment.—From CLM Member Yaron Shaham
Alabama
Jurisdictional Limit for Civil District Court Cases Increased
On Sept. 1, 2019, a law went into effect increasing the jurisdictional limit for civil district court cases in Alabama from $10,000 to $20,000. We expect more cases with low liability limits or simple soft tissue bodily injury claims will be filed in district court, due to its lower filing fees and limited discovery and evidentiary rules. Circuit and district courts will have concurrent jurisdiction for cases alleging damages of more than $6,000 and less than $20,000. If a claim is between $6,000 and $20,000, a plaintiff may bring suit in either district or circuit court; if the value exceeds $6,000, a defendant can remove a case to circuit court and demand a jury. This action by a defendant negates the $20,000 district court cap and places the verdict in a jury’s hands as if the case had initially been filed in circuit court.—From CLM Member Jeremy W. Richter
Ohio
Statute of Repose Applies to Tort and Contract Actions
The Ohio Supreme Court determined the 10-year statute of repose for construction projects applies to both tort and contract actions in the case of Ne Riegel Local School Dist. Bd. of Edn. v. Buehrer Group Architecture & Eng. Inc. The plaintiff argued that revised code 2305.131 only applied to tort actions and its action was a breach of contract claim against the builders of a school. The Supreme Court disagreed, citing the wording of the statute itself and indicating that if the plaintiff was correct, then there would be no need for additional language in the statute. The court did not decide if the cause of action accrued during the statute-of-repose period would allow the contract statute of limitations to apply from that date. The plaintiff has filed a motion for reconsideration.—From CLM Member Patricia J. Trombetta