Articles Posted in Federal Court Procedure

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Doris Neumann sued multiple companies, including MW Custom Papers LLC, a manufacturer of friction tape containing high levels of asbestos. In her lawsuit, she claimed she developed mesothelioma caused by her son’s clothing as a gas station attendant. He used a friction tape and wound up bringing stray asbestos fibers home, causing her to suffer secondary, or “take-home,” mesothelioma.

In the lawsuit, she claimed that MW Custom Papers knew or should have known the dangers of asbestos and should have warned users and families of take-home asbestos. MW Custom Papers moved to dismiss, asserting that take-home mesothelioma was not reasonably foreseeable under the Illinois Supreme Court rule found in the decision Simpkins v. CSX Transportation, Inc., 2012 IL 110662, 965 N.E.2d 1092 (Ill. 2012) and that MW could never know who the users and family members were and thus could not possibly warn them of the dangers of asbestos.

The motion was granted by the U.S. District Court judge in Chicago: The court concluded that it could not assess whether the injury was foreseeable and remanded the case so that the plaintiff could amend the complaint. Ultimately, the Illinois Supreme Court did not undertake the four-factor analysis and did not address whether a duty could exist as a matter of public policy, as the [5th U.S. Circuit Court of Appeals] has held.

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Lee Newsome sustained a serious injury to his right foot when a rail hanging from a crane fell on him. He was working for the Wisconsin Central Railroad. Newsome sued the railroad under the Federal Employers Liability Act (FELA) claiming that his injuries caused him a “loss of future earning capacity.” Wisconsin Central moved for partial summary judgment on Newsome’s loss of future earning capacity, arguing that the evidence did not support his claim. The U.S. Magistrate Judge handling this case denied Wisconsin Central’s motion, holding that there was a fact question for the jury.  According to the Magistrate Judge’s decision, the U.S. Supreme Court has held that the FELA allows for the awarding of damages for impairment of earning capacity.

“The FELA is a broad remedial statute to be construed liberally in order to effectuate its purpose. In addition to compensation for pain and suffering, the FELA allows damages for economic harms such as loss of past and future wages and impairment of earning capacity that result from injury.” Grunenthal v. Long Island RR Co., 393 U.S. 156, 160-62 (1968).”

There were no 7th Circuit Court of Appeals cases for the Magistrate Judge to rely on. However, there were other federal circuit court cases that stated that proofs necessary to recover future loss of earning capacity is allowed in the FELA context.

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On May 12, 2011, the plaintiff, John Barrow IV, age 58, was a coal mine forklift operator. Barrow walked into a coal mine near Equality, Ill., when a hydraulic hose on the ground caused him to fall and land on his back. The defendant in this case, Temper Fabricators, a fabrication contractor working at the mine, had left several steel-reinforced hydraulic hoses lying across a walkway just inside the entrance to the mine’s main warehouse.

Barrow apparently did not see the hoses when he entered the mine after walking in from the outdoor sunlight. He stepped on one of the hoses, which then rolled out from under his foot. While falling, he sustained lower back injuries that required spinal fusion surgery and left him with ongoing pain, disability and severe sexual dysfunction.

Barrow’s wife, Kimberlee, claimed loss of consortium. The Barrows asserted that the Temper Fabricator’s employees were at fault for choosing not to post any barricades or warning flags before leaving the hoses unattended. The Mine Safety & Health Administration (MSHA) regulations required all safety hazards to be barricaded or flagged off. Employees of contractors were subject to the same MSHA safety regulations as employees of mine owners.

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Toni Dugan was insured by Nationwide Insurance Co. She was involved in an automobile accident with Chelsea Rainey who was insured by American Family Insurance Co. Rainey’s policy had a $100,000 limit, which American Family paid to Dugan and her husband, James.

The Dugans’ damages exceeded $200,000, and they made a claim under their own underinsurance motorist coverage through Nationwide. The Dugans’ claim against Nationwide sought $400,000 less American Family’s $100,000 payment. Based on the underinsured motorist coverage (UIM), the Dugans claimed coverage for 4 automobiles. The premium was charged on each of the four cars for UIM coverage of $100,000 per person and $300,000 per occurrence.

Nationwide denied coverage, contending its policy prohibited stacking of UIM coverage and filed a complaint for declaratory judgment. The parties filed cross-motions for summary judgment and the U.S. District Court judge of the Southern District of Illinois granted Nationwide’s motion finding that stacking was prohibited.

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When litigation is possible or pending in a federal case, the litigants should take care to instruct those in possession of documents and especially electronically stored information to preserve and prevent loss of such documents. If the litigation has begun, or is reasonably anticipated, lawyers should send a letter by way of email or written notice to the other side to put them on notice that there is a duty of preservation that has been triggered. They should also describe the electronically stored information believed to be relevant in a case that should be preserved.

The newly amended Rule 37(e) authorizes what measures the courts can use if the electronic information that should have been preserved has been destroyed or lost.

Amended Rule 37(e) provides:

Rule 37. Failure to Make Disclosures or to Cooperate in Discovery; Sanctions

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Menzies Aviation and CenterPoint Properties Trust entered into a 10-year lease for a warehouse near Chicago’s O’Hare International Airport in 2007.  CenterPoint owned the warehouse, while Menzies operated an aircargo handling business that included the use of 15,000- and 30,000-pound forklifts.  The warehouse was a single-story, 185,000-square-foot structure built in 1998.

The warehouse had a 6-inch concrete slab that did not show any damage in 2007.  However, by January 2009, the concrete slab was cracking and scaling along the surface and was damaged along the contraction joints.

This type of wear was not typical, but rather was caused by Menzies’ use of heavy forklifts.

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James Brooks was severely injured in a work accident in which he lost his left hand, wrist and forearm. Brooks was an assembly-line operator for Prairie Packaging Inc.  The on-the-job incident resulted in the filing of a worker’s compensation claim in 1999, the year of this accident. In addition, Brooks sought recovery for a permanent and total disability because of the loss of his limb. 

Prairie Packaging kept Brooks employed despite his inability to work, treating him as a disabled employee on company-approved leave of absence.  In the meantime, Brooks continued to receive healthcare coverage under the company’s employee-benefits plan.

Brooks’s medical costs were paid by the employer-placed health insurance and supplemented by payments through the worker’s compensation action. 

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The U.S. Court of Appeals for the Seventh Circuit in Chicago has affirmed a decision by a trial judge that led to the forfeiture of an oil and gas franchise. Emmanuel Joseph operated a British Petroleum (BP) service station in Chicago.  Sasafrasnet, LLC was the authorized distributor of BP products.  Joseph was the franchisee with Sasafrasnet being the franchisor. 

In November 2010, Sasafrasnet served Joseph with notice of its intent to terminate the franchise. The termination was based on the three occasions when Sasafrasnet’s attempt to debit Joseph’s bank account to pay for fuel deliveries was declined because of insufficient funds. 

In May 2011, Joseph sought a preliminary injunction to stop the termination. The U.S. District Court judge denied the request finding that Joseph chose not to show “sufficiently serious questions going to the merits to make such questions fair ground for litigation.” Joseph appealed the denial to the Seventh Circuit Court of Appeals. The appeals court first returned the matter to the trial judge for additional findings and conclusions on whether Joseph’s insufficient funds denials amounted to “failures” under the Petroleum Marketing Practices Act (PMPA). PMPA is a federal law that regulates the sales of many petroleum products by producers of oil and gas products to franchised dealers who sell to the public.

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Kraft is a well-known manufacturer of food products sold in grocery stores.  It has been selling packaged cheeses sold under the trademarked “Cracker Barrel” label.  Kraft has been selling under that name for more than 50 years.  Thousands of grocery stores carry Kraft cheeses bearing that label. Kraft does not sell any non-cheese products under the name Cracker Barrel. 

Cracker Barrel Old Country Store (CBOCS) is a well-known chain of low-priced restaurants. It opened its first restaurant in 1969. There are more than 620 restaurants now operating, many of them located just off major highways.

When Kraft learned that CBOCS planned to sell a variety of food products, such as packaged hams in grocery stores under its logo, “Cracker Barrel Old Country Store” (the last three words are in smaller type in the logo), Kraft filed this lawsuit. Kraft claimed that many customers would be confused by the similarity of the companies’ logos and would think that food products so labeled were Kraft products. 

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In a class action brought by Motorola investors it was maintained that during 2006, the company made false statements in order to disguise its inability to deliver a mobile phone for sale that would employ three different protocols. When it became public that Motorola could not produce the new mobile phone, its stock sank significantly. 

After the lawsuit had been pending for four years, the district court denied Motorola’s motion for summary judgment. After that, the parties settled for $200 million. The class members approved the settlement, but objected to the judge’s decision to award 27.5% of the settlement to the trial lawyers who represented the class.

One of the former class members filed an objection a month after the deadline. Though he filed an objection to the award of legal fees, the objector chose not to file a claim for his share of the settlement fund. As a result, the court of appeals concluded that the objector lacked any interest in the amount of attorney fees awarded and as a result, dismissed his appeal.

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