Outside Inhouse Lawyer Blog : New York & Seattle Corporate Dispute Lawyer & Attorney : Grace M. Healy : Outside counsel : King County, Tacoma, Bellevue

Two big lessons can be learned from an interesting decision by Magistrate Payson in Tailored Lighting, Inc. v. Osram Sylvania Products, Inc., decided last week in the US District Court for the Northern District Court of New York.  First, an in-house lawyer can anticipate a deposition notice if he or she verifies interrogatories, and second, make sure that the witnesses produced in response to a Rule 30(b)(6) notice of deposition can answer all questions asked.

As for the in-house counsel's deposition, the opinion discusses the factors that should be present before a lawyer will be deposed, and, after deciding that the deposition should go forward, states that the questions are to be limited to:

(1) identifying the information provided to and relied upon by [the in-house lawyer], whether through communications with individuals or review of documents, in answering the interrogatories; (2) identifying the particular source (person or record) of that information; (3) non-privileged communications between [the in-house counsel] and his human sources about that information that occurred in the course of investigating and answering the interrogatories.

In other words, there is a good chance – as anyone who has ever attended a deposition knows – that there will be a lot of going back and forth about privilege with threats to call the judge the day that the deposition takes place. It seems easier to have someone outside of the legal department sign the verification.

Second, the decision addresses the scope of Rule 30(b)(6) witnesses – and orders that two of the identified witnesses to be re-deposed to answer certain questions that they could not answer in their initial testimony. 

In no way am I critical of the parties in this case because I know from experience that you pretty much have to be in a case to understand the how and why that litigation unfolds, and when I unsuccessfully looked for a free copy of this opinion on-line, I could see that this case has been a siege for the parties. 

But, I see literally dozens of articles each week about concern regarding outside counsel fees in these days of financial sturm und drang.  Avoiding motions to compel by anticipating arguments like those made on this motion seems like a good way to go.




 

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This is a quick post on what should be an important decision regarding tort liability in Washington.

Yesterday, the Ninth Circuit certified a question regarding the extent of the economic loss rule to the Washington Supreme Court.  Affiliated FM Ins. Co. v. LKT Consulting Services Inc.  The Washington Supreme Court decision – when it comes – should be an important ruling on the scope of the economic loss rule, which bars tort recovery for purely economic damages, as opposed to damages for personal injury or other property losses.

The action seeks damages as a result of a fire in 2004 which damaged the monorail trains.  The monorail is owned by the City of Seattle, which in 1999 contracted with defendant LTK for a study to identify and repair problems with the monorail trains.  The monorail is actually operated by Seattle Monorail Services (SMS) pursuant to a concession contract with the city.  SMS did not have a contractual relationship with defendant.  Plaintiff, asserting the interests of its insured, SMS, brought this action claiming tort damages as a result of the 2004 fire – alleging that the fire was the result of defendant’s negligent design work. 

The district court dismissed the case finding that the economic loss rule applied.  It analyzed the nature of SMS’s interest and found  that SMS’s interest was akin to a license, rather than a lease, and, therefore, it was seeking damages to its economic interest, rather than for a property interest.   Thus, its tort damage claim was barred by the economic loss rule. 

The Ninth Circuit has now submitted the question to the Washington Supreme Court.  In its order, the Ciruit notes that the Washington Supreme Court has never defined the type of interest in property required for the rule to apply.  The Circuit order seems to focus on whether the economic loss doctrine, which bars tort recovery, requires privity of contract.



 

 

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In a unanimous decision today in Michael V. Mosquera-Lacey, or what the media calls the ‘Cow Bone Case’ the Washington Supreme Court discussed two facets of a Washington Consumer Protection Act claim -- its application to professionals, and the requirement that a CPA claim must impact the public interest.  The plaintiff alleged that the CPA was violated when her periodontist implanted a cow bone rather than human bone during a bone graft.  The court dismissed the claim. 

I'm not sure there is anything new here, but, since, at one time or another, everyone is a consumer and pretty much everyone in "trade or commerce" might have to defend one of these claims, it is an interesting opinion.

The decision first discusses when a claim against a professional is considered to be in trade or commerce as required by the CPA. Professionals are not exempt from the CPA, but, for a claim to be proven, the allegedly unfair or deceptive practice must relate to the entrepreneurial aspects of the professionals' practice -- not to the substantive quality of the services they provided.  In finding that the CPA did not apply, the court noted that the allegedly deceptive act (use of cow bone)  involved plaintiff’s treatment and not the ‘entrepreneurial’ aspects of a practice -- billing, or obtaining or retaining patients, or increasing profits or the number of patients. 

The court also decided that the case did not impact the public interest.  (Maybe the claim doesn’t, but the decision is interesting for anyone who might want to bring or might be faced with a CPA claim.)  A claim may have an impact on the public interest if it is likely that additional plaintiffs have or will be injured in exactly the same fashion.  To decide that, four factors will be looked at:

•    Were the acts in the course of defendant’s business,
•    Did defendant advertise to the public in general,
•    Did defendant actively solicit this plaintiff (because this suggests that others in the public also may have been solicited),
•    And, were there unequal bargaining positions.

Not all of these factors have to be present for a claim to  have an impact on public interest.  Here, bottom line, the dental office did not act in trade or commerce in using some human bone, and the misplant did not impact the public interest.
 

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