Second Circuit Trump Ruling Is a Tale of Two Statutory Interpretations

The Federal Employees Liability Reform and Tort Compensation Act, or Westfall Act, amended the Federal Tort Claims Act to extend absolute immunity from personal tort liability to “any employee of the Government while acting within the scope of his office or employment.”

Until recently, no federal court had squarely addressed whether the U.S. president is an employee of the government for purposes of the Westfall Act. This question of statutory interpretation controlled the U.S. Court of Appeals for the Second Circuit’s recent split decision in Carroll v. Trump.

The majority opinion in Carroll answered the question affirmatively, while the dissent disagreed. Remarkably, both opinions purported to apply the same tools of statutory interpretation to reach these disparate conclusions.

To read the full text of this article by Duane Morris attorneys David McTaggart and Kevin Savarese, which was originally published in Law360, please visit the firm website.

Andrew R. Sperl Appointed Co-Vice Chair of Pennsylvania Bar Association Appellate Advocacy Committee

Duane Morris LLP partner Andrew R. Sperl has been appointed as a co-vice chair of the Pennsylvania Bar Association Appellate Advocacy Committee. The committee promotes communication and cooperation between lawyers who practice before the state and federal appellate courts and members of the judiciary, and provides the opportunity to identify and address the means to achieving quality practice in all manner of appeals. It seeks to enhance the knowledge and professional capability of lawyers through focused educational programs. The committee also fosters dialogue between the bench and the bar, explores means and methods to improve and advance the appellate process, and may review and make recommendations concerning the rules of procedure that affect the appellate process.

To read the full text of this press release, please visit the firm website.

Clerk’s Annual Report for the Court of Appeals

The 2021 Annual Report of the Clerk of the Court of Appeals, John Asiello, to the Judges of the Court summarizing the work and accomplishments of the court during calendar year 2021 was recently released. It is his last, as he has announced his retirement. As with his prior reports, and those of his predecessors, it is a document crammed full of information that will be of interest not only to appellate practitioners and dedicated court watchers, but to anyone seeking to learn the role and operation of our state’s highest tribunal.

To read the full text of this article co-authored by Duane Morris attorney Thomas R. Newman, originally published in the New York Law Journal, please visit the firm website.

The Concept of Appealability

Appealability” is a threshold jurisdictional consideration that incorporates a requirement of “appealable paper” and relates to the issue of whether a direct appeal, either as of right or by permission, may be taken to the Appellate Division from the judgment or order in question. Judging by the volume of decisions dismissing appeals on the court’s own motion for lack of appealability, practitioners often overlook it before embarking upon the time and expense of an appeal.

To read the full text of this article co-authored by Duane Morris attorney Thomas R. Newman, originally published in the New York Law Journal, please visit the firm website.

Pennsylvania Court Rules Business Registration Does Not Grant General Jurisdiction Over Foreign Corporations

On December 22, 2021, the Supreme Court of Pennsylvania handed down a landmark ruling on personal jurisdiction in Mallory v. Norfolk Southern Railway Company. Before this decision, the controlling rule had been that foreign corporations subject themselves to general personal jurisdiction by registering to do business in Pennsylvania. In Mallory, the Pennsylvania Supreme Court changed that rule and held that a foreign corporation’s registration to do business does not confer general personal jurisdiction over the corporation.

To read the full text of this Duane Morris Alert, please visit the firm website.

Update: In Recent Wave of COVID-19 Business Interruption Decisions in Federal Appeals, Carriers Enjoy Unanimous Success

Recently, we began to see real decisions being made by the appellate courts on COVID-19 Business Interruption issues.  The U.S. Circuit Courts of Appeals have established a uniformly favorable trend for insurance carriers – these courts have affirmed the district court decisions that have ruled in favor of the insurers, and in one case, the Sixth Circuit vacated a district court’s decision that ruled in favor of the policyholder. Since our original blog post on this issue in October, this trend continued in December with a Tenth Circuit decision.

To read the full text of this post by Duane Morris attorneys Max H. Stern & Holden Benon, please visit the Duane Morris Insurance and Reinsurance Blog.

Insurers Win on COVID-19 Business Interruption Claims

The first California state appellate decision on COVID-19 Business Interruption coverage is now in the books, and it’s one more victory for insurers.  In The Inns by the Sea v. California Mutual Ins. Co., Case No. D079036 (Cal. Ct. App. 4th Dist., Div. 1, Nov. 15, 2021), the California Court of Appeal for the Fourth District found there was no coverage, notwithstanding the absence of a virus exclusion in the relevant policy.  The court’s 36-page opinion provides a thorough and careful analysis of several important COVID-19-related business interruption issues.

To read the full text of this post by Duane Morris attorneys Max H. Stern and Holden Benon, please visit the Duane Morris Insurance Law Blog.

Ethical Considerations on Appeal

Most New York attorneys are familiar with Part §130, Costs and Sanctions, of the Rules of the Chief Administrator which requires that every pleading, written motion and other paper served on another party or filed or submitted to the court be signed by an attorney whose signature certifies that attorney’s good faith, informed belief that “the contentions therein are not frivolous.” 22 NYCRR §130-1.1(a). The intent of Part 130.1 is “to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics.” Kernisan v. Taylor, 171 A.D.2d 869 (2d Dept. 1999).

Regrettably, some attorneys do not understand that their ethical obligations do not come to an end when an appealable order or judgment is entered against their client in the trial court. Part 130 and the discretionary monetary sanctions it authorizes the court to impose-up to $10,000 for any single occurrence of frivolous conduct-also applies to motions and briefs filed and submitted to an appellate court.

To read the full text of this article by Duane Morris of counsel Thomas R.  Newman, please visit the firm website.

Motions for Reargument in the Court of Appeals

It is a fundamental tenet of our system of jurisprudence that there must be an end to lawsuits. The law recognizes that “it is to the interest of the State that there should be an end to litigation.” Israel v. Wood Dolson Co., 1 N.Y.2d 116, 118 (1956). This principle pervades the judicial attitude toward motions for reargument, which were aptly described almost 70 years ago in Cohen & Karger, Powers of the New York Court of Appeals (rev. ed 1952), at page 694. “A motion for reargument is generally an act of desperation; it is a psychological device for raising hopes which are almost invariably doomed to defeat. The percentage of cases in which a motion for reargument has been granted in the Court of Appeals is very low—unquestionably less than one out of one hundred.”

Nothing has changed. The 2019 Annual Report of the Clerk of the Court of Appeals contains a table showing that during the period 2015-2019 of 131 motions for reargument of appeals, none was granted; of 317 motions for reargument of motions, only one was granted. (2019 Report, Appendix 7).

To read the full text of this article by Duane Morris attorney Thomas R. Newman, please visit the firm website.

Pa. Supreme Court to Reconsider Validity of Legal Malpractice Claims Based on Settlement Advice

In 1991, the Pennsylvania Supreme Court created a bright-line rule barring certain types of legal malpractice claims. Specifically, if a client settled a lawsuit but ultimately was unhappy with the settlement, the client could only sue her lawyers for legal malpractice if the lawyers fraudulently induced her to settle. See Muhammad v. Strassburger, McKenna, Messer, Shilobod, & Gutnick, 587 A.2d 1346, 1358 (Pa. 1991). In such situations, claims based on negligence or breach of contract would not be cognizable. Id.

This bright-line rule has slowly eroded over the years. In Collas v. Garnick, 624 A.2d 117 (Pa. Super. 1993), for example, the Superior Court held that Muhammad did not bar claims based on inaccurate legal advice related to a settlement agreement. In that case, a lawyer advised that certain language in a settlement agreement would not affect the client’s ability to sue other potentially liable parties, but that advice turned out to be wrong. Id. at 119. After the plaintiff’s second lawsuit was dismissed based on the release she signed when settling the first lawsuit, the plaintiff sued her lawyer. Id. The trial court held that the plaintiff’s claims were barred by Muhammad, but the Superior Court reversed. The Superior Court noted that Muhammad dealt with clients who were dissatisfied with the amount of the settlement, whereas the clients in Collas were complaining that they were misinformed as to the effect of the settlement. Id. at 121. The Superior Court held that, in such circumstances, lawyers could be liable for malpractice if they failed to exercise the necessary degree of care. Id.

The Superior Court has since clarified when Muhammad bars legal malpractice claims arising from a settlement agreement and when it does not:

[If] a dissatisfied litigant merely wishes to second guess his or her decision to settle due to speculation that he or she may have been able to secure a larger amount of money, i.e.[,] “get a better deal[,]” the Muhammad rule applies so as to bar that litigant from suing his counsel for negligence. If, however, a settlement agreement is legally deficient or if an attorney fails to explain the effect of a legal document, the client may seek redress from counsel by filing a malpractice action sounding in negligence.

Banks v. Jerome Taylor & Assocs., 700 A.2d 1329, 1332 (Pa. Super. 1997).

The Supreme Court will now consider doing away with Muhammad altogether as part of its review of the Superior Court’s decision in Khalil v. Williams, 244 A.3d 830 (Pa. Super. 2021), allocatur granted 53 EAL 2021 (Pa. Aug. 3, 2021). In Khalil, the plaintiff claimed that she only signed the settlement agreement in question after asking her lawyers to add language making clear that her claims in a related lawsuit would not be affected. Khalil, 244 A.3d at 840-41. After the plaintiff signed the revised release, her counsel allegedly doctored the signed release to remove any limiting language. Id. Her claims thus sounded in fraud and were not barred by Muhammad. Id. Yet, the plaintiff also alleged legal malpractice claims based on negligence and breach of contract. While the plaintiff claimed on appeal that she pleaded facts alleging that her counsel gave incorrect advice about the legal effect of the settlement agreement in the alternative, the Superior Court disagreed. Id. The Superior Court found that the only allegations in the complaint supported the fraud claim, not any claims sounding in negligence or breach of contract. Id. at 841. The Superior Court thus affirmed the dismissal of those claims.

The Supreme Court has now agreed to consider two issues on appeal—whether the plaintiff sufficiently pleaded negligence or breach of contract and, if so, whether Muhammad continues to be valid. Depending on the Court’s outcome and reasoning, Khalil could prove to be very important for understanding both the pleading rules for legal malpractice claims in Pennsylvania, as well as the potential liability for lawyers when advising their clients to accept a settlement offer.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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