Former Major Leaguers Fail to Reach First Base
Seymour (Cy) Block played in 17 games for the Chicago Cubs from 1942 to 1946, plus one game in the 1945 World Series. For his career, he batted .302 and struck out three times. Make that four, courtesy of the California Court of Appeal, First District.
In Block v. Major League Baseball, 76 Cal. Rptr.2d 567 (1998), Block and four other major league baseball players who played before 1947 filed a class action in a California state court against Major League Baseball and three other licensing and distribution agencies alleging violations of their statutory and common law rights of publicity by using the "names, voices, signatures, photographs and/or likenesses" on products such as "books, films, trading cards, collector merchandise, memorabilia and apparel" without their consent or compensation. In 1947, the standard major league player contract was revised so that representations of players' likenesses belong to the employing baseball clubs for their use.
After discovery, the plaintiffs moved for class certification, proposing a class of about 800, consisting of "all major league baseball players who played major league baseball before 1947, or, if they are now deceased, their heirs or beneficiaries." They also narrowed the case to seek damages only for unauthorized uses in California since 1992. The trial court denied certification, stating that in view of the diverse factual and legal issues, "it appears to the court that if certified as a class action, this action would in fact become one of multiple lawsuits separately tried," which would not be "advantageous to the judicial process and to the litigants themselves."
Reviewing on the abuse of discretion standard, the Court of Appeal agreed that the proposed class did not meet California's community of interest requirement--that is, whether common questions of law or fact predominated. First, there might be the evaluation of thousands of individual claims for usage, a task that would be too daunting. Second, the claims would be complicated by the value of the right of publicity of each class member, values that would have a wide range from stars to player would had only a "cup of coffee" in the major leagues. Third, the statute of limitations periods were complicated because some of the proposed class had remained close to organized baseball, thus raising the possibility of affirmative defenses and the need for individual factual inquiries.
Surprise Video Nixes Plaintiff's Judgment
A repetitive stress injuries plaintiff lost a $293,385 award because her attorney suddenly came up with a last-minute videotape. Rotolo v. Digital Equipment Corp., 150 F.3d 223 (2d Cir. 1998).
The plaintiff, Jeanette Rotolo, used a computer manufactured by Digital in her job at the Long Island Jewish Medical Center in New York. Her suit in federal district court alleged that as a result of the keyboard operation she developed what generally are described as cumulative trauma disorders (CTDs) or repetitive stress injuries (RSIs). Without notice and apparently to show defective design, her attorney succeeded in getting District Judge Jack Weinsetin to admit into evidence a videotape the attorney had obtained in an undisclosed manner. The video appeared to have been created by Apple Computer Corp, a competitor of Digital, and showed three Apple consultants, two physicians and one engineer, discussing the possible causal connection between computer keyboard use and RSI, as well as Apple's contemplated efforts to ameliorate the problem.
Judge Weinstein told the jury that they might consider the tape as evidence of "what might have been made available by these defendants [sic] and what was in the field to show what their of mind was or should have been." (For opinion below, see 980 F.Supp. 640.)
This was too much for the Second Circuit to stomach. Chief Judge Van Graafeiland, writing for the panel, pointed out the video was the rankest kind of inadmissible hearsay and that the three persons in it were absent, unsworn and without stated qualifications. The court relied on its decision in George v. Celotex Corp., 914 F.3d 26 (2d Cir. 1990), in which it held that before a defendant who has never see an unpublished report that is not part of the published literature can be said to have non-hearsay notice, it must be shown that the defendant "was at least inferentially put on notice by the report." The video was not an "ancient document" that would be admitted under Rule 803(16) of the Federal Rules of Evidence, the court continued, noting that Digital was not given notice of the contemplated use of the video.
The error in admitting the videotape went directly to the heart of the litigation, the Second Circuit panel stated in vacating the judgment and remanding, and thus it was reversible error.
State Alternate Provider Statute Escapes Preemption
Who needs Congress to repeal ERISA's federal preemption provision when the courts can do it quicker. The federal Employee Retirement Income Security Act does not preempt Washington state's so-called alternate provider statute, which requires health maintenance organizations and health care service contractors to cover acupuncture, massage therapy, naturopathy, chiropractic services and a variety of other alternative medical treatments, the Ninth Circuit held in Washington Physicians Service Association v. Gregoire, 147 F.3d 1039 (1998).
The court noted that since 1985 when the U.S. Supreme Court upheld a Massachusetts requirement that insurers offer some limited form of mental health coverage in Metropolitan Life Insurance Co. v. Massachusetts, 461 U.S. 724, the trend of states requiring certain coverages has continued and has been controversial in view of ERISA's preemption (29 U.S.C. [sections] 1144(a)), which provides that ERISA "shall supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan." But that provision has an exception (29 U.S.C. [sections] 1144(b)(2)(A)) stating that it shall not be construed to exempt or relieve any person from "any law of any state which regulates insurance, banking, or securities."
The court went on to note that Washington has crafted its statute carefully to circumvent ERISA preemption and that it had succeeded in doing so. The statute does not "relate to any employee benefit plan," the court said, but to insurance plans. The distinction in the court's estimation was this: if an employer wants a self-insurer plan, the statute wouldn't apply, but if an HMO or an HCSC wants to sell a plan in Washington, it must comply. "Accordingly," the court remarked, the [Washington statute] does not operate directly on the ERISA plan, but only indirectly by limiting the options available in the market--if the plan should choose to purchase health insurance on the market, rather than providing it itself or not providing it at all.... The mere fact that the act regulates a product that ERISA plans often choose to buy does not mean that it `relates to' an ERISA plan."
With this reading, the court was able to divorce its case from numerous other cases that have found a "reference" to ERISA plans in a state's regulation of health plans.
As an alternative, the court held that the Washington statute regulates insurance and thus was saved from preemption under the ERISA exception.
Disclaimers, Explanations Don't Help This HMO
Employing the doctrine of apparent authority, the First Distract Appellate Court of Illinois held that an independent practice model health maintenance organization could be vicariously liable for the negligent failure to diagnose of the independent medical groups with which they contract to provide services for their members.
In Petrovich v. Share Health Plan of Illinois Inc., 696 N.E.2d 356 (Ill.App. 1998), a retired union member was enrolled in the union's plan with Share Health, which provided a list of participating physicians, who are responsible for the over-all care of patients and who make referrals. She sued Share Health, claiming that two physicians in the plan negligently failed to diagnose her cancer sooner.
Share Health's subscriber certificate stated that the physicians are independent contractors and "not agents or employees" Share Health, adding, "The Share plan physician is solely responsible for the medical services provided to any member." The plaintiff testified in deposition that she didn't know the physicians relationship with Share Health, that she didn't remember receiving the subscriber certificate, but that she did remember receiving and reading portions of the member handbook.
No wonder, because the member handbook contained the smoking gun on which the court relied to find application of the apparent agency doctrine and to reverse the trial court's grant of summary judgment to Share Health. It stated that Share Health would "provide all your healthcare needs" and "comprehensive quality services." This satisfied the elements of apparent authority, which, according to the court, are first a holding out of the party who was alleged to be negligent as an agent, and second a reasonable reliance by a third party on the principal's conduct. Ironically, Share Health's efforts to screen physicians and hospitals and its quality assurance measures only added to what the court regarded were elements supporting apparent authority.
Perhaps the bottom line for the court's decision was its reading of public policy. Noting Share Health's advertising, the court declared that "HMOs should not be allowed to hold themselves out as total providers of health care and then seek to avoid liability based on a disclaimer buried in a contract."
In granting summary judgment, the trial judge had focused on the individual responsibility of the plaintiff, who admitted that she read some of the plan documents. "If I were to allow that kind of reliance as reasonable," he said, "then anyone could pick and choose a few words out of a contract in any situation and argue that their reliance on those sections was reasonable. ... This information was not hidden."
No Class Action Because of Individual Issues
In Small v. Lorillard Tobacco Co., 1998 WL 398176, July 16, the New York Appellate Division, First Department, reversed the trial court and decertified two huge class actions against five major cigarette manufacturers. (See 668 N.Y.S.2d 307 (Sup.Ct. N.Y. Cty. 1997).)
For each of the five class actions, the trial court certified a class defined as persons who purchased and smoked the defendants' cigarettes in New York state on or after June 19, 1980. So defined, the plaintiff class for each of the five lawsuits would exceed a million persons.
The plaintiffs did not seek damages for ill health caused by smoking. Their suit was cast as a consumer fraud case in which they sough recovery of the money they had spent on cigarettes since 1980, as well as an injunction preventing the cigarette manufacturers from making further misrepresentations about nicotine and ordering them to notify the class members about the drug's true effect on smokers. They alleged common law fraud, civil conspiracy by lying about nicotine's addictive properties, and violations of New York's deceptive business practices legislation.
In an opinion by Justice Rosenberger, the Appellate Division rested its decision on the predominance of individual issues. "First," he wrote, "even though they seek compensation only for economic losses as consumers, not personal injury damages, plaintiffs have not eliminated the very individualized issue of whether each was nicotine dependent. Second, it cannot be presumed that each class member even knew of the alleged misrepresentations, let alone relied on them."
The proposed class action would be unmanageable, the court concluded, because of the individual issues of reliance, causation and damages with respect to each of the five million plaintiffs. It would be more efficient, the court stated, for persons whose personal injury and fraud claims had individual merit to bring individual actions.
The court also held that the principles of federal preemption embodied in the Cigarette Labeling and Advertising Act, 15 U.S.C. [sections] 1331 et seq., as interpreted by the U.S. Supreme Court in Cipollone v. Liggett Group, 505 U.S. 504 (1992), preempted all the plaintiffs claims except those grounded in "affirmative misrepresentations on which plaintiffs relied to their detriment." But even these fell in the court's view because the complaint did not furnish sufficient examples of misrepresentations on which the plaintiffs relied.
No Cause of Action for Rules Violation
The Supreme Court of New Jersey refused to recognize a new cause of action for civil liability against an adversary's attorney premised on the attorney's breach of the applicable Rules of Professional Conduct. Baxt v. Liloia, 714 A.2d 271 (1998).
The two lawyer-defendants were alleged to have violated Rules 3.3 ("Candor Toward the Tribunal"), 3.4 ("Fairness to Opposing Party and Counsel") and 4.1 ("Truthfulness in Statements to Others") of the New Jersey Rules of Professional Conduct, which are based on the American Bar Association Model Rules. They misled the plaintiffs about the source of a document used in litigation and refused to answer specific requests for information.
Writing for a unanimous court, Chief Justice Poritz pointed out that the ABA Model Rules state, "Violation of a rule should not give rise to a cause of action nor should it create any presumption that a legal duty has been breached." Consonant with this, he said, no new Jersey case has allowed a cause of action based solely on a violation of a professional conduct rule. Moreover, he continued, research had found no other jurisdiction permitting use of the rules in this manner.
Chief Justice Poritz conceded that New Jersey courts, as well as other jurisdictions have recognized the relevance of the disciplinary rules in civil cases against attorneys for malpractice, but, he added, they "serve purposes that are substantially different from those of an individual litigant in a civil action."
The defendants did not go scot-free, however. Remarking that the record before it presented an "object lesson in unprofessional behavior by experienced and knowledgeable trial lawyers" in stonewalling and obstructing the discovery process, the court gave the plaintiffs an opportunity to seek attorney's fees and costs in the trial court, and it referred the alleged violations to the New Jersey Office of Attorney Ethics for review and consideration."…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Current Decisions. Contributors: Not available. Journal title: Defense Counsel Journal. Volume: 65. Issue: 4 Publication date: October 1998. Page number: 559. © 1999 International Association of Defense Counsels. COPYRIGHT 1998 Gale Group.
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