Two Important Insurance Matters Set For The California Supreme Court’s May Calendar

Yesterday, the California Supreme Court set two important and much anticipated insurance cases for May oral argument.

On May 26, 2015, the Court will hear argument in Fluor v. S.C. (Hartford Accident & Indemnity Company), No. S205889, which presents the following issue: Are the limitations on assignment of third party liability insurance policy benefits recognized in Henkel Corp. v. Hartford Accident & Indemnity Co. (2003) 29 Cal.4th 934 inconsistent with the provisions of Insurance Code section 520?

On May 28, 2015, the Court will hear argument in J.R. Marketing, L.L.C. v. Hartford Casualty Insurance, No. S211645, which presents a rare opportunity for guidance from the Supreme Court on independent Cumis counsel issues. The case present the following question: After an insured has secured a judgment requiring an insurer to provide independent counsel to the insured (see San Diego Fed. Credit Union v. Cumis Ins. Society Inc. (1984) 162 Cal.App.3d 358), can the insurer seek reimbursement of defense fees and costs it considers unreasonable and unnecessary by pursuing a reimbursement action against independent counsel or can the insurer seek reimbursement only from its insured?

Both matters will be heard in San Francisco on the 9:00 a.m. calendars. Under California rules, the Supreme Court must issue its decisions in the matters within 90 days after the argument.

A Judge’s Perspective on Interlocutory Appeals

It is one thing to know the high standards that govern requests for discretionary interlocutory appeals. It is quite another to hear two federal judges describe first-hand their extreme reluctance to permit such appeals.

Circuit Judge Thomas Ambro of the United States Court of Appeals for the Third Circuit and District Judge Harvey Bartle of the District Court for the Eastern District of Pennsylvania offered that perspective at a meeting of the Philadelphia Bar Association’s Appellate Courts Committee on April 15. The most striking theme of their presentation was that it is—and, in their view, should be—very hard to obtain permission for a discretionary interlocutory appeal.

Judge Bartle recalled entering no more than two Rule 54(b) orders to permit an interlocutory appeal and certifying only one interlocutory appeal under 28 U.S.C. § 1292(b) in his 23-year judicial career. He noted that district judges are very reluctant to permit interlocutory appeals because they tend to cause delay in trial proceedings.

With respect to appeals under § 1292(b) specifically, Judge Bartle said that he rarely sees grounds for a substantial difference of opinion on the legal issue involved. In particular, he noted that district judges tend not to be moved by a split in authority between themselves and a court in another district. The circumstance in which a substantial difference of opinion is most likely to be found is where district judges within the same district are split on an issue.

Judge Ambro discussed interlocutory appeals under § 1292(b) as well. He said that while § 1292(b) is intended to be a flexible path for immediate appeal, it is an avenue that, in his experience, is not often used. The Third Circuit is most likely to take an appeal under § 1292(b) where it sees a controlling issue of law that could recur in other cases. Where the primary rationale for an interlocutory appeal under § 1292(b) is dispute resolution, Judge Ambro said that the court is much less likely to grant permission to appeal.

Judge Ambro also spoke about interlocutory appeals of class certification decisions under Federal Rule of Civil Procedure 23(f). He suggested that the Third Circuit is more likely to grant an appeal under Rule 23(f) if the district court has certified the class than it is where the district court has denied certification. Judge Ambro also reported that certifications under Rule 23(f) have declined significantly over the last three years as compared to the several previous years.

With regard to mandamus petitions, Judge Ambro said, “In my 15 years, I’ve seen mandamus work maybe once.” Mandamus is simply “not part of the culture” of the Third Circuit. Even compared to other types of interlocutory appeals, seeking mandamus stands out as particularly unlikely to be effective.

Litigators who do not often practice in appellate courts can easily underestimate the difficulty in obtaining permission for an interlocutory appeal. By underscoring these difficulties, Judge Ambro and Judge Bartle’s presentation offered an important strategic insight for lawyers practicing in the Third Circuit.

VA’s Restriction on Competitive Bidding by Veteran-Owned Small Businesses Challenged Before the Supreme Court

On May 1, 2015, the government is expected to submit its response to the petition for certiorari filed by Kingdomware Technologies, Inc., which seeks to reverse a 2-1 ruling by the U.S. Court of Appeals for the Federal Circuit in Kingdomware Technologies, Inc. v. United States, 754 F.3d 923 (Fed. Cir. 2014).  Kingdomware contends in its petition that the Federal Circuit’s decision improperly limits the opportunities for veteran-owned small businesses to competitively bid for contracts with the Department of Veterans Affairs (“VA”).

The Kingdomware petition is one to watch in light of the significant adverse impact imposed by the Federal Circuit’s ruling on veteran-owned small businesses.  If Kingdomware’s petition is granted, the Supreme Court will have the opportunity to restore the prospects for competitive bidding by veteran-owned small businesses to the full extent that Congress intended.  (Full disclosure:  Duane Morris LLP filed an amicus brief on behalf of a coalition of veteran-owned small businesses in support of Kingdomware.  The American Legion also filed an amicus brief in support of Kingdomware). Continue reading “VA’s Restriction on Competitive Bidding by Veteran-Owned Small Businesses Challenged Before the Supreme Court”

The Dangers of Relying on ECF Notices

Eighteen lawyers at two different law firms received ECF notifications of orders denying their client’s post-judgment motions. But the ECF notifications did not accurately describe the content of those orders. The attorneys relied on the incorrect descriptions in the ECF notifications and did not open the orders or realize that the post-judgment motions had been denied. As a result, they missed the 30-day deadline to appeal a $40 million judgment entered against their client. The Federal Circuit has now affirmed the trial court’s refusal to extend or reopen the deadline to appeal under Federal Rule of Appellate Procedure 4(a)(5) and (6).

This cautionary tale highlights a simple point: a lawyer should open and read every document received by ECF notification. Lawyers who rely on the clerk’s description in notifications do so at their own risk.

The Ninth Circuit’s Workload Shows

The Administrative Office of the United States Courts released its 2014 federal court statistics this month and it reveals some interesting aspects of the Ninth Circuit’s workload. Not only is the Ninth Circuit the largest circuit geographically, it remains by far the busiest, with 13,868 cases pending in 2014.  By contrast, the next busiest circuit—the Fifth—had 4,717 cases pending in 2014.  Based on these caseload statistics, it is not surprising  that appeals take longer in the Ninth Circuit than in the other Circuits.  As the statistics indicate, the Ninth Circuit’s median time from Appellee’s brief to oral argument in civil appeals is 13.6 months, and from notice of appeal to decision is 21.3 months (and  that is just the median time.)  By contrast, the next slowest circuit—the DC Circuit—handles civil appeals in 5.5 months from Appellee’s brief to oral argument, and 12.7 months from NOA to decision.

Rob Palumbos Will Speak at the Pennsylvania Bar Association Civil Litigation Section Retreat

Partner Rob Palumbos in Philadelphia will speak at the Pennsylvania Bar Association Civil Litigation Section Retreat to be held from April 17, 2015 to April 19, 2015 at The Hotel Hershey in Hershey, Pennsylvania. Mr. Palumbos will be speaking about “Legal Writing for the 21st Century” on Saturday, April 18 from 9:00 a.m. to 12:15 p.m.

For more information about the event, please visit the event page on the Duane Morris website.

San Francisco Partner Paul Killion Receives National Legal Writing Award

Duane Morris is pleased to announce that partner Paul J. Killion of the firm’s San Francisco office will receive a Burton Award for Legal Achievement at a gala ceremony to be held on June 9, 2014, at the Library of Congress in Washington, D.C. This honor is given to only 30 authors selected from entries from the nation’s 1,000 largest law firms.

Killion was selected as a 2014 Distinguished Legal Writing Award winner for an article he wrote about how to use Internet sources in legal writing. “Warning: The Internet May Contain Traces of Nuts (Or, When and How to Cite to Internet Sources)” appeared in California Litigation: The Journal of the Litigation Section, State Bar of California, last spring.

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The Limits of Common Sense in Judicial Decisionmaking

Judge Posner’s recent opinion in Mitchell v. JCG Industries, Inc. enters a Twilight Zone of appellate decisionmaking that is truly bewildering. The issue was whether the FLSA requires poultry workers to be paid overtime for “donning and doffing” protective clothing at the beginning and end of their lunch breaks. Judge Posner answered that question, in part, by timing how long it took three of the court’s staff to don and doff the clothing. The parties had submitted conflicting testimony about this precise issue at the summary judgment stage. Nonetheless, Judge Posner, joined by Judge Kaanne, affirmed the grant of summary judgment in the employer’s favor based in part on the results of the in-chambers experiment.

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How to Appeal a Sanctions Order

Can a lawyer obtain appellate review of a sanctions order by piggy-backing on her client’s notice of appeal? The Court of Appeals for the First Circuit raised this question sua sponte in a decision issued on March 26, 2014, In re Joannie Plaza-Martinez.

A federal public defender appealed a sanctions order against her as well as her client’s sentence in a single notice of appeal. The notice of appeal was “unarguably proper” as to the client. Whether it was also proper as to the public defender’s appeal of the sanction order was “an unresolved jurisdictional question.”

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Duane Morris Attorney Thomas Newman Selected as the New York City “2013 Appellate Practice Lawyer of the Year”

Duane Morris congratulates Thomas R. Newman on being named the New York City “2013 Appellate Practice Lawyer of the Year” by Best Lawyers. Those honored as the “Lawyer of the Year” in their specialty have received impressive voting averages amongst their peers, and are a select group, with only a single lawyer in each practice area and metropolitan area being recognized as such. Mr. Newman has also been recognized by Best Lawyers in America for both Appellate Practice and Insurance Law since 2007, and is listed in Chambers USA: America’s Leading Lawyers for Business in Insurance: Dispute Resolution, both in New York and Nationwide.

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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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