NYC Agrees to $657 Million Settlement For WTC Rescue Worker Suits

According to The New York Times, the Ground Zero injury settlement was announced yesterday by WTC Captive Insurance Company.  The Captive Insurance Company an entity created with a $1 billion federal grant that provides insurance coverage to the City of New York and its debris-removal contractors.  The Ground Zero injury settlment agreement in the sum of 657.5 million dollars is scheduled to be presented to Southern District Court Judge Alvin Hellerstein in Manhattan today for approval.  According to Associated Press reports, Judge Hellerstein has said that he favored a settlement, but planned to analyze it carefully to make certain that is fair. 

I believe that it goes without saying that the settlement must be fair and equitable before the Court issues an Order approving the terms.   

California Court Holds That Non-Party Witness Statements Are Not Privileged

Although this blog was primarily intended to discuss New York civil litigation, in this entry I'm discussing a California appellate decision because I find that it has a profound impact on discovery rules and could be persuasive authority for a further broading of pre-trial discovery in other jurisdictions.

In Coito v. Superior Court, 10 C.D.O.S. 2697, a divided California appellate court ruled on Thursday that non-party witness statements which are either recorded or documented in writing by attorneys or their representatives aren't privileged work product and, therefore, are subject to pre-trial discovery. 

In the lower court, Stanislaus County Superior Court Judge William Mayhew relied on a decision by the Third District appeallate court in Nacht & Lewis Architects Inc. v. Superior Court (McCormick), 47 Cal.App.4th 214, as authority to deny plaintiff's attorney's demand for the recorded statements of four juveniles who witnessed the drowning death of a 13-year-old boy in 2007.

Contrary to the holding in Nacht & Lewis, the majority in Thursday's ruling held that the "weight of authority" states that written and recorded statements taken by attorneys aren't work product, but rather "classic" evidentiary material.  "They can be admitted at trial as prior inconsistent statements, prior consistent statements or past recollections recorded," Justice Betty Dawson wrote in Coito.  "Yet, if the statements are not subject to discovery, the party denied access to them will have had no opportunity to prepare for their use."  Justcie Dawson referred to the decision in Nacht & Lewis as "cursory."  "It contains no analysis to support [its] language and fails entirely to acknowledge the long line of contrary precedent," Justice Dawson wrote.  "Neither does it consider nor weigh the purposes of the work-product privilege and the Civil Discovery Act."

In dissent, Justice Stephen Kane argued that he felt witness statements recorded by attorneys constitute "qualified" work product, which remains undiscoverable unless a court determines that denial of discovery unfairly prejudices the party seeking it.  However, Justice Kane wrote that, "a per se rule of absolute protection goes too far."  Accordingly, Justice Kane would have preferred to remand the case to give the trial court judge an opportunity to consider whether discovery was warranted under the qualified work-product privilege.  "Requiring such a showing strikes a fair balance between the competing statutory policies of protecting work product and allowing liberal discovery," Kane wrote.  Justice Kane noted that the California Supreme Court, the state's highest court, has not weighed in on the issue in this case and therefore urged it to do so.  "Clarifying the scope of the work-product privilege in this context," he wrote, "is important for legal practitioners and in propria persona litigants (those representing themselves in court without assistance of an attorney, at least "on the record."  Often abbreviatd to "in pro per").

The majority, concurring and dissenting opinions all require more analysis and discussion.  However, the general rule in New York is that non-party statements are materials prepared in anticipation of litigation and therefore not subject to disclosure.  See, DeGourney v. Mulzac, 287 A.D.2d 680, 732 N.Y.S.2d 97 (2d Dep't 2001); Volpicelli v. Westchester County, 102 A.D.2d 853, 476 N.Y.S.2d 623 (2d Dep't 1984); Bush v. E. H. Cottrell, Inc., 33 A.D.2d 983, 307 N.Y.S.2d 284 (4th Dep't 1970).  The apparent rationale has been that a party should not be required to disclose that which they obtained through the investment of their own time, effort and money.  Unless these non-party witnesses have become unavailable, there is no reason why the party seeking the statements can't contact the witnesses and perform their own investigation.  If the non-party witnesses evade or refuse to cooperate, a reasonable inference can be drawn that their testimony will not be favorable to that party.  Even in the instance of evasiveness or refusal, the non-party subpoeana remains as that party's device to obtain the testimony sought.  Moreover, the subpoena on notice is arguably more just and equitable given that the adverse party has an opportunity to cross-examine the witness.      

The Supremes Rule on "Principal Place of Business"

In Hertz Corporation v. Melinda Friend, (08-1107) plaintiffs brought a class action suit against Hertz in California state court seeking damages for alleged violated of California wage and hour laws by Hertz.  Hertz moved to remove the case to federal district predicated upon purported diversity jurisdiction because the company headquarters is located in New Jersey.  Therefore, Hertz wanted the trial moved to federal court based upon plaintiffs and defendants being residents of different states.  To the contrary, plaintiffs argued that there was no diversity jurisdiction because Hertz' principal place of business was California, not Florida.  The federal district court agreed and remanded the case to state court.

On appeal, the U.S. Court of Appeals for the Ninth Circuit affirmed the federal district court.  The appellate court held that the district court correctly applied the "place of operations test" to determine Hertz' principal place of business.  Accordingly, there was no diversity jurisdiction and the district court had no subject matter jurisdiction to hear the case.

In a unanimous decision dated February 23, 2010, the Court concluded that the phrase "principal place of business" refers to the place where the corporation's high level officers direct, control and coordinate the corporation's activities," Justice Stephen Breyer wrote. "Lower federal courts have often metaphorically called that place the corporation's 'nerve center.' We believe that the 'nerve center' will typically be found at a corporation's headquarters."

Under 28 U.S.C. § 1332(c)(1), a corporation is a citizen of its state of incorporation and the state “where it has its principal place of business.”  Accordingly, the case hinges on the interpretation of the language “principal place of business.”  The Supreme Court’s ruling could broadly affect the way multistate corporations conduct their business and the specific recourse available to plaintiffs seeking to litigate state law claims against them.

Court of Appeals Oral Argument

February 10, 2010

If you're snowed in today and tomorrow, visit the Court of Appeals Web site for live simulcasts of oral arguments. 

LegalTech Trade Shows

On February 1st through the 3rd, a LegalTech trade show will be held at the Hilton New York Hotel, 1335 Avenue of the Americas, New York City, NY 10019.  LegalTech promotes the show as "the largest and most important legal technology event of the year."  The show is one of two such events, the other being held in Los Angeles. 

LegalTech promises to provide an in-depth look at what the technological world offers to make life in the legal professional more efficient and lucrative.  According to ALM media company, in addition to learning about the newest advances in law firm technology, by attendting a LegalTech event one can earn CLE credits as well as network with industry leaders.  Unfortunaely, the attorney time spent at the event is not "billable."   

Harm to Plaintiff Caused By Gravity Upon Object Invokes Labor Law 240(1)

In response to certified questions from the U.S. Court of Appeals for the Second Circuit, the New York Court of Appeals, held in Runner v. New York Stock Exchange, Inc., No. 197, that § 240 of the New York Labor (the so-called “Scaffolding Law”) applies where a worker’s injuries were caused directly from “the application of the force of gravity to an object.” The facts of Runner are relatively simple and did not invlove plaintiff falling from an elevated work surface nor did it invlove him being struck by hoisted materials.  Rather, plaintiff, an electrician, and his co-workers, were endeavoring to lower an 800 pound reel of wire down a set of four steps in the course of the work.  To prevent the reel from rolling freely down the flight and causing damage, the workers were instructed to tie one end of a ten-foot length of rope to the reel and then to wrap the rope around a metal bar placed horizontally across a door jamb on the same level as the reel. The loose end of the rope was then held by plaintiff and two co-workers while two other co-workers began to push the reel down the stairs. As the reel descended, it pulled plaintiff and his fellow workers, who were essentially acting as counterweights, toward the metal bar. The expedient of wrapping the rope around the bar proved ineffective to regulate the rate of the reel's descent and plaintiff was drawn horizontally into the bar, seriously injuring his hands.  Expert testimony was proffered at trial that a pulley or hoist should have been used to move the reel safely down the stairs and that the jerry-rigged device actually employed had not been adequate to that task. 

The jury, having been instructed that liability pursuant to Labor Law § 240 (1) could not be assigned unless plaintiff’s injuries had been attributable to a gravity-related risk, and having found that no such risk had been implicated, returned a verdict for defendants. A motion by plaintiff to set side the verdict ensued. In granting the motion and directing judgment for the plaintiff upon his Labor Law § 240 claim, the District Court found, as a matter of law, that the movement of the reel down the stairs presented a gravity-related risk; that an adequate safety device had not been used to manage the risk; and that that failure had been a substantial factor in causing plaintiff’s injury.

On appeal, the Court rejected defendant's argument that section 240 was inapplicable and instead held that the injury was the direct consequence of a failure to provide statutorily required protection against a risk plainly arising from a workplace elevation differential.  Accordingly, the case represents the Court’s expansion of coverage under the Scaffolding Law and most certainly will be the source of much debate as plaintiffs will endeavor to further invoke the extraordinary protections of 240.

CPLR 2221 "Cheat Sheet"

The Smart Rules Blog has a brief "Motion to Reargue Cheat Sheet" that I want to share.  Find the blog here.