Video Depositions – the New Normal for the Age of Social Distancing

The Circuit Courts for St. Louis City and County have both issued Administrative Orders that approve of taking of depositions by video conference.  Both of these orders require that a party opposing the taking of a deposition by video conference, for that reason alone, has the burden to prove that the deposition not go forward (i.e., that the deposition notice be quashed).

At a Town Hall videoconference on April 16, Judge Rex Burlison, the presiding judge of the St. Louis City Circuit Court, made clear that, at least in the city, a party opposing the taking of a deposition by videoconference will have a difficult time convincing the court not to permit such deposition to go forward.  For now, at least, in the age of social distancing amidst fear of the COVID-19 virus, it appears that videoconference depositions will be the new normal.

However, there are real issues that need to be addressed concerning depositions by videoconference.  Perhaps the most important has to do with the security of the videoconference platforms used by court reporting services.  In a survey of several large national court reporting services and one smaller service, they all reported using Zoom for depositions, despite recent reports by credible sources that Zoom has been hacked and is not secure.  Unless and until these security concerns are addressed, I will oppose taking of depositions over Zoom (although other services may be more secure).  The security of depositions is of particular concern when depositions involve businesses’ confidential information or otherwise will address sensitive information.

There are also questions regarding the preservation of video and audio of depositions, including how this will be done, how parties can access any recordings, and whether storage of any such video and/or audio is secure.  Again, the security of recordings of Zoom conferences has also been reported to be an issue. Continue reading »

Buckle Up, Buttercup: Missouri Governor Signs Law Enhancing Failure to Wear Seatbelt Defense

Failure to wear a seatbelt will be admissible in product liability cases in Missouri beginning January 1, 2020. Governor Mike Parson signed Senate Bill 30 into law on July 10, 2019, amending Section 307.178 RSMo to provide that a plaintiff’s failure to wear a seatbelt shall be admissible as evidence of comparative negligence or fault, causation, absence of a defect or hazard, and failure to mitigate damages in product liability lawsuits involving an automobile.  Previously, such evidence was only allowed to be admitted before the jury to mitigate damages up to 1% of the damages after any reductions for comparative negligence.

Dan Hegeman, the bill’s sponsor, said that Senate Bill 30 “serves the dual purpose of both creating fairer court procedures in which a jury is able to come to a broader understanding of the causes of a plaintiff’s injuries, and encouraging general seat belt safety.”

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New Benefits for Those in Financial Difficulty: The Small Business Reorganization Act of 2019

If you own a small business (defined as one owing less than $2,725,625 in total debt) and are in or nearing financial difficulties, you should contact your attorney to learn more about The Small Business Reorganization Act of 2019 (the Act).

Effective in February 2020, this new addition to Chapter 11 of the U.S. Bankruptcy Code provides the benefits of a traditional Chapter 11 case, but with fewer burdens and more flexibility.

For instance:

• There will be no creditors’ committee to deal with (unless the court orders otherwise).
• A trustee will be appointed instead. This may be a mixed benefit.
  • On one hand, a good trustee might be able to help keep the case moving, negotiate a consensual plan of reorganization, object to claims, and take other burdens off the debtor.
  • On the other hand, a bad trustee might misuse his/her powers and make things worse for the debtor.
  • In either case, the debtor will pay the trustee on a percentage basis, generally under 5% of debtor’s quarterly revenues.
• A status conference must be held within 60 days after the commencement of the case to further a prompt and economical resolution of the various issues involved.
• No disclosure statement will be required, saving both time and attorney fees in the process.
• Only the debtor may file a plan; creditors may not.
• It is somewhat easier to “cram down” the terms of the plan on objecting creditors.
• The Absolute Priority Rule is essentially eliminated, making it easier for owners to retain their ownership in the debtor.
• Confirmation standards are relaxed, making it easier to get your reorganization approved.

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Re-evaluating Standards for Admissibility of Photographs of Vehicular Collisions

In Illinois, historically, two predominating schools of thought regarding the admissibility of photographs of vehicular collisions have existed. The first school of thought, Baraniak v. Krauby, holds that when using photos to correlate vehicular damage to injuries, expert testimony is always necessary. The second school of thought, Fronabarger v. Burns, holds that vehicular collision photographs are admissible if the jury can properly relate the vehicular damage depicted in the photos to the injuries without the aid of an expert. In 2008, the Fronabarger court declined to follow the rigid rule from Baraniak.

In the 2019 case of Peach v. McGovern, the 5^th Circuit Court of Appeals in Illinois addressed this contentious issue once again. Here, the plaintiff and the defendant were involved in a car accident where the defendant rear-ended the plaintiff. The defendant claims that she was at a full stop behind the plaintiff, and she rolled into the plaintiff, “tapping” his truck, when she accidentally let her foot off the brake. The plaintiff contends that the defendant “plowed” into him at a speed of 20-30 miles per hour. After the accident, the plaintiff began experiencing severe neck issues, incurring over $23,000 in medical expenses.

At trial, plaintiff presented his pain management specialist as an expert witness, who opined that the plaintiff’s neck injuries were consistent with having been rear-ended in a motor vehicle collision, and even a very low speed collision could have caused this damage. Though the plaintiff had a degenerative disc condition, the expert testified that the plaintiff’s injuries were consistent with a sudden impact rather than the degenerative condition. The defendant did not present any expert witnesses, instead using the photographs depicting minimal damage to both vehicles in her closing arguments to argue that the plaintiff exaggerated the impact of the collision in order to relate his injuries to the collision. Continue reading »

#SocialMediaAsEvidence

Social media has officially taken over our lives. The statistics only confirm this fact. There are 2.3 billion active social media users across the world. Any given internet user has an average of five social media accounts. Facebook has over 1.71 billion users, YouTube has over 1 billion users, and WhatsApp has 900 million users. Every day, there are 60 billion messages sent through Facebook messenger and Whats-App. Three hundred hours of videos are uploaded on YouTube every minute. Snapchat users watch 6 billion videos on average a day.

It is clear that an individual’s accounts contain a plethora of intimate, personal details meant to be shared exclusively with friends or a fan base. But this begs the question, with this personal nature of social media, what can be excluded from court? The answer: potentially none of it. Continue reading »

UPDATE: Salaries Speak Louder than Words

Equal Pay Day was celebrated this month on April 2, 2019. This date symbolizes how far into the year women must work to earn what men earned in the previous year. Thankfully, this date is not stationary. In fact, the date occurs seventeen days earlier than it did in 2005. While there is a lot to celebrate with that achievement, there is still a long way to go to completely close the gender wage gap.

In fact, the Supreme Court recently faced the opportunity to potentially close this wage gap even further when it granted cert to Rizo v. Yovino. See Katherine Flett’s blog post titled “Salaries Speak Louder than Words” for more discussion on the case. In Rizo, the Ninth Circuit sitting en banc found that the use of salary history to establish a starting salary violated the Equal Pay Act, as it perpetuated the discriminatory nature of women historically being underpaid in almost all sectors of employment. Thus, reliance on prior pay could no longer be considered as an affirmative defense under the Act’s fourth catchall exception, “any other factor other than sex.” Continue reading »

Mandatory Arbitration in the Transportation Industry Takes a Blow from The United States Supreme Court

New Prime, Inc. v. Oliveira

On January 15, 2019, the United States Supreme Court ruled unanimously in favor of Dominic Oliveira, a purported Independent Contracted driver (“owner-operator”) for New Prime, Inc., an interstate trucking company, holding that Oliveira’s dispute need not be compelled to arbitration.

The case hinged largely on the Federal Arbitration Act (FAA), a 1926 law that requires courts to move cases involving interstate commerce disputes to arbitration.  However, the FAA includes an exception in Section 1 for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”

Oliveira filed a class action lawsuit, alleging that New Prime deprived its driver of legal wages.  New Prime sought to resolve the dispute via arbitration pursuant to Oliveira’s owner-operator agreement, which included a mandatory arbitration provision.

The first issue that the Court considered was whether a court or an arbitrator should decide whether the Section 1 exception applied.  In a unanimous opinion written by Justice Neil Gorsuch, the Court held that “a court should decide for itself whether Section 1’s ‘contracts of employment’ exclusion applies before ordering arbitration. After all, to invoke its statutory powers . . . to stay litigation and compel arbitration according to a contract’s terms, a court must first know whether the contract itself falls within or beyond the boundaries of §§1 and 2 [of the FAA].” Continue reading »

Favorable Changes to 065 Agreements in Missouri Apply Prospectively Only

The Court of Appeals of Missouri’s Western District has issued an opinion holding that the recent amendment to Section 537.065 RSMo. may not be applied retrospectively, under the Missouri Constitution.  The Court of Appeals held in Desai v. Seneca Specialty Ins. Co., 2018 WL 3232697 (not released for publication as subject to motion for rehearing or transfer, etc.) that the trial court’s judgment should be affirmed in which the insurance company’s motion to intervene and motion for relief from judgment were denied.  The insurance company had argued that Section 537.065, as amended effective August 28, 2017, required that it should have received notice of a “065” agreement and the opportunity to intervene as a matter of right.

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Employers With Arbitration Clauses Win – Part Two: Factors Employers Should Consider When Determining Whether to Incorporate an Employee Arbitration Program

One of the many employment-related decisions a company must make is whether it wishes to require employees to give up their rights to file an employment action in court, and instead to require employees to use arbitration.

In Part One, we discussed how employers can require employees to arbitrate claims on an individual basis. This much-anticipated U.S. Supreme Court decision in Epic Systems Corporation v. Lewis allows employers to use arbitration agreements as a tool to avoid costly class action claims with more certainty that they will be enforced by the courts.

The decision in Epic also added an additional favorable factor to the arbitration choice column. The Court ruled that employers can require employees to arbitrate claims on an individual basis and thus avoid class actions. Epic Systems (which was decided along with two sister cases) involved employees seeking class action litigation, despite having employment contracts with provisions that required individualized arbitration proceedings.

Although Missouri is an employment at will state, employees can sue employers under various state and federal statutes in state or federal court. Some of those statues, for example, the Fair Labor Standards Act, allow class actions. Litigation is very costly and there could always be a runaway jury. Arbitration, on the other hand, is designed to avoid complex and time-consuming litigation and to provide an alternate source of justice. An arbitration could take six months to resolve but the decision will be final and binding and unappealable, while a court proceeding through a jury trial could take 21-41 months and the decision is always appealable. Continue reading »

Employers With Arbitration Clauses Win – Part One: The U.S. Supreme Court Embraces Arbitration Agreements with Class Action Waivers

The U.S. Supreme Court upheld the legality of class action waivers in employee arbitration agreements by issuing a 5-4 decision in Epic Systems Corporation v. Lewis on March 21, 2018.

In short, employers can require employees to arbitrate claims on an individual basis. This much-anticipated decision allows employers to use arbitration agreements as a tool to avoid costly class action claims with more certainty that they will be enforced by the courts.

Brief History of Arbitration Clauses and Class Action Waivers in the Employment Context

The Federal Arbitration Act (“FAA”) was enacted in 1925 in response to hostility toward arbitration agreements. The FAA provides that a written agreement to submit a controversy arising out of the agreement to arbitration is to be enforced unless “grounds exist at law or in equity for the revocation of any contract.” Since the enactment of the FAA, the Supreme Court has consistently recognized the establishment of a federal policy supporting arbitration agreements.

However, in 2012, the National Labor Relations (“NLRB”) found in D.R. Horton, Inc., that mandatory arbitration agreements with class action waivers were violative of employees’ rights under Section 7 of the National Labor Relations Act (“NLRA”), which guarantees employees the right to self-organize, bargain collectively, and “engage in activities for the purpose of collective bargaining or other mutual aid or protection.” Following the NLRB’s decision, a split among the circuits developed. While the Second, Fifth and Eighth Circuits rejected the NLRB’s reasoning in D.R. Horton, the Seventh and Ninth Circuits sided with the NLRB and refused to enforce employee arbitration agreements with class action waivers.

Epic Systems Corporation v. Lewis

On May 21, 2018, the Supreme Court resolved the circuit split and upheld the use of class action waivers in arbitration agreements in Epic Systems Corp. v. Lewis.  Epic Systems, which was decided along with two sister cases, involved employees seeking class action litigation despite having employment contracts with provisions that required individualized arbitration proceedings. The following are the three key arguments by employees and the Court’s decisions: Continue reading »