Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Search


Fettering the Insurer's Privilege to Control the Defense It Is Duty-Bound to Provide
April 28, 2006
For more than 50 years, policyholders and their insurers have been struggling over the insurer's promise to defend and the insurer's control of the defense. Policyholders properly have been concerned that an insurance company that controls the defense of an action potentially covered by the carrier's duty to indemnify will use that control to avoid that very same indemnity obligation. In egregious cases where a lawyer hired by the carrier has abused his or her relationship with the insured ' the client ' so as to favor the lawyer's source of income ' the insurance company ' the courts have responded to protect the insured's interests. But most courts have ruled that such after-the-fact remedies are insufficient: They do not adequately compensate for the injury; meritorious claims are not pursued (in part because insureds may not discover the abuse); and the potential for this abuse alone undermines the dominant purpose of the insurance relationship ' to afford protection and peace of mind for the insured.
Evaluating Valued Policy Law After Katrina
April 28, 2006
Since first enacted in 1874 in Wisconsin, Valued Policy Law ('VPL') has become an important regulatory fixture in the insurance law of many states. At least 19 states have enacted some version of a traditional VPL. In its original formulation, VPL obliges an insurer that collected premiums for an insurable interest based on an assigned value to pay that predetermined value to the insured in the event of a total loss. That statutorily imposed obligation prevents insurers from collecting premiums on artificially inflated property values on the front end while paying insureds less than that amount after a total loss, based on actual values. VPL thus encourages insurers to investigate the actual value of the insurable interest and to collect premiums on that amount, thereby avoiding the hazards of over-insurance. Furthermore, by encouraging insurers to minimize variance between assigned values and actual values, VPL theoretically reduces insurance fraud by policyholders.
Case Notes
April 28, 2006
Recent rulings of interest to you and your practice.
Jury Hits Merck with $9M in Punitives
April 28, 2006
On April 11, a jury in Atlantic City, NJ, ordered Merck & Co. to pay $9 million in punitive damages to a user of Vioxx, finding the drug maker knowingly withheld data from federal regulators about the painkiller's cardiovascular risks. Merck withdrew Vioxx from the market in 2004 when a study showed it doubled heart attack risk after 18 months of use. The Atlantic City trial was the first involving plaintiffs who had used Vioxx longer than that period of time.
PA Court Declines to Apply 'Heeding Presumption' to Pharmaceutical Failure-to-Warn Cases
April 28, 2006
<b><i>Part One of a Two-Part Series.</i></b> Last December, the Pennsylvania Superior Court handed a sharp blow to pharmaceutical liability plaintiffs' lawyers in the state who have consistently argued that a 'heeding presumption' should apply to their failure-to-warn claims and, in effect, relieve them of the burden of proving causation. A unanimous three-member panel upheld the decision of the trial court awarding summary judgment to the defendant because the plaintiff 'presented no evidence that a different warning would have changed [the prescribing physician's] decision to prescribe [the drug at issue] for Appellant.' <i>Lineberger v. Wyeth</i>, 2006 PA Super. 35, at *24 (Pa. Super. Ct., Feb. 23, 2006).
Practice Tip
April 28, 2006
The Bush administration has adopted a new tactic in its ongoing efforts to create liability shields on behalf of various industries, including the pharmaceutical industry. Despite a number of failed legislative attempts at tort reform, on Jan. 18, the administration quietly enacted its own liability-shield agenda under the guise of federal pre-emption. A new U.S. Food and Drug Administration ('FDA') rule titled <i>'Final Rule: Requirements on Content and Format of Labeling for Human Prescription Drug and Biological Products'</i> (21 C.F.R. 201, 314 and 601), which goes into effect on June 30, 2006, extensively modifies the format of prescription drug information, commonly referred to as the 'package insert' and published in the Physician's Desk Reference', and will come with an attempt at broad federal pre-emption.
Putting Plaintiff to the Test: The Crashworthiness Doctrine
April 28, 2006
<b><i>Part Two of a Two-Part Series.</i></b> The plaintiff's burden of proof in a 'crashworthiness case' is dramatically higher than in the standard product liability action. In the automotive context, these cases are sometimes referred to as 'second collision' cases because the manufacturer's liability is based not upon the 'first collision' between the vehicles involved in the accident, but upon the 'second collision' comprised of the physical contact made between the plaintiff's body and the vehicle's interior. Generally, in a crashworthiness case, the plaintiff must prove that the alleged defect enhanced his or her injuries beyond what would have otherwise been sustained in the collision. A failure to meet the weighty burden of proof in a crashworthiness case can be fatal to one's case. The first part of this two-part series discussed a recent New York case, <i>Katz v. Ford Motor Company and Hempstead Ford, Inc.</i>, No. 18933-00 (N.Y. Sup. Ct., Suffolk Cty., Dec. 7, 2005), and the definition of crashworthiness. The second part addresses whether the crashworthiness doctrine applies to a 'failure to deploy' case, how to charge the jury, and how to apportion the damages among tort-feasors.
May issue in PDF format
April 28, 2006
&#133;
On-Sale Bar By Upgrade? An Invention May Be Put On-Sale By a Contract Made Before the Date of Invention
April 28, 2006
A straightforward reading of the existing on-sale bar law suggests that companies and inventors, particularly in the software industry, may be unwittingly putting their inventions on sale by agreeing to deliver future improvements or versions of their product to their customers. This is a consequence of the initially counterintuitive principle that an invention may be put on sale by a contract or offer made before the invention even exists. This principle will often apply in the context of 'upgrade' contracts, where a seller contracts, at the time of a sale, to provide future 'upgrades' to a product. In that situation, the seller's pre-existing obligation to provide the invention as an 'upgrade' can put the invention on sale, even though the obligation arose before the invention was conceived.
News Briefs
April 28, 2006
Recent news from around the country.

MOST POPULAR STORIES

  • Major Differences In UK, U.S. Copyright Laws
    This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
    Read More ›
  • Inferring Dishonesty: The Fifth Amendment and Fidelity Coverage
    Dishonest employees always have posed a problem for businesses. The average business may lose 6% of its annual revenues to employee fraud, and cumulatively the impact of employee theft on the economy is estimated to be $600 billion annually. <i>See</i> Association of Certified Fraud Examiners ("ACFE"), 2002 Report to the Nation on Occupational Fraud &amp; Abuse, at ii, 4 (2002), available at <i>www.cfenet.com/publications/rttn.asp.</i> Although the average loss through employee embezzlement is $25,000, where computerized financial records or transactions are involved, the average loss increases nearly twentyfold. <i>See</i> National White Collar Crime Center, <i>WCC Issue: Embezzlement/Employee Theft,</i> at 2 (2002), available at <i>http://nw3c.org/downloads/Computer_Crime_Weapon.pdf.</i>
    Read More ›
  • The Article 8 Opt In
    The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
    Read More ›