The Lawletter Vol 41 No 8

Sandra Thomas, Senior Attorney, National Legal Research Group

      The Supreme Court of Montana imposed a constructive trust on $2.3 million of proceeds of two insurance policies in a case in which the husband ("Husband") in a divorce proceeding changed the beneficiaries on the policies in violation of a restraining order issued by the court while the divorce was pending. Volk v. Goeser, 2016 MT 61, 382 Mont. 382, 367 P.3d 378.

     Husband and wife ("Wife") were married in 1996, and they had a son, RBV, in 2000. In June 2010, Husband filed a petition for dissolution; that same day the trial court issued a restraining order under which the parties were not allowed to transfer assets while the divorce was pending. In December 2011, the parties entered into a settlement agreement in which, among other things, Husband agreed that "'[h]usband shall execute a will naming his son as beneficiary of his estate, giving all of his assets to his son.'" Id. ¶ 5, 382 Mont. at 384, 367 P.3d at 381.

The Lawletter Vol 41 No 8

Jason Holder, Research Attorney, National Legal Research Group

     In State v. Loomis, 2016 WI 68, 881 N.W.2d 749, the Supreme Court of Wisconsin upheld the use of risk assessment tools at sentencing against a due process challenge. In doing so, however, the Loomis court noted that such tools are consistent with due process protections only if they are used properly and in accordance with certain limitations. Additionally, the court may have provided a possible road map for future challenges to the use of risk assessment tools at sentencing.

     Loomis had been charged with a number of offenses stemming from a drive-by shooting and ultimately pleaded guilty to two of the lesser offenses. A presentence investigation report was prepared and included a Correctional Offender Management Profiling for Alternative Sanctions ("COMPAS") risk assessment. In ruling out probation, the circuit court noted that it did so because "of the seriousness of the crime and because your history, your history on supervision, and the risk assessment tools that have been utilized, suggest that you're extremely high risk to re-offend." Id. ¶ 19, 881 N.W.2d at 755.

The Lawletter Vol 41 No 8

Mark Rieber, Senior Attorney, National Legal Research Group

     In United States v. Lambis, No. 15CR734, 2016 WL 3870940 (S.D.N.Y. July 12, 2016), a federal court, apparently for the first time, suppressed evidence obtained as the result of the warrantless use of a cell-site simulator to locate a target's cell phone. The court explained that a cell-site simulator—sometimes referred to as a "StingRay," "Hailstorm," or "TriggerFish"—is a device that locates cell phones by mimicking the service provider's cell tower (or "cell-site") and forcing cell phones to transmit "pings" to the simulator. The device then calculates the strength of the "pings" until the target phone is pinpointed.

     The court's holding relied mainly on Kyllo v. United States, 533 U.S. 27 (2001), which held that a Fourth Amendment search occurred when government agents used a thermal-imaging device to detect infrared radiation emanating from a home. In Kyllo, the Supreme Court reasoned that "[w]here . . . the Government uses a device that is not in general public use to explore details of the home that would previously have been unknowable without physical intrusion, the surveillance is a 'search' and is presumptively unreasonable without a search warrant." Id. at 40.

The Lawletter Vol 41 No 7

Jeremy Taylor, Senior Attorney, National Legal Research Group

     New York's highest court recently addressed the issue of whether an automobile manufacturer could be held strictly liable for a mechanic's malignant mesothelioma allegedly caused by the mechanic's exposure to asbestos while replacing asbestos-containing brakes, clutches, and engine parts in the manufacturer's automobiles. See Finerty v. Abex Corp., 2016 N.Y. slip op. 03411, 2016 WL 1735804 (N.Y. May 3, 2016). The plaintiff claimed that he was exposed to asbestos during the 1970s and 1980s while working on engine parts in tractors and passenger vehicles manufactured by the defendant, Ford Motor Company. The plaintiff was later diagnosed with peritoneal mesothelioma. The plaintiff sued Ford and others alleging strict products liability under theories of defective design and failure to warn.

     The New York Court of Appeals concluded that Ford could not be held liable under the plaintiff's theories. At the threshold, the court noted that a manufacturer of defective products which places those products into the stream of commerce may be held strictly liable for injuries caused by its products, since it is the manufacturer alone who (a) can fairly be said to know and to understand when a product is suitably designed and safely made for its intended purpose, and (b) has the practical opportunity to produce safe products. The court observed that product sellers are subject to strict liability with respect to allegedly defective products because they may be said to have assumed a special responsibility to the public, which has come to expect them to stand behind their products.

The Lawletter Vol 41 No 7

John Stone, Senior Attorney, National Legal Research Group

      It is commonly understood that substantive agency regulations that are promulgated pursuant to statutory authority typically have the "force and effect of law." See Perez v. Mortgage Bankers Ass'n, 135 S. Ct. 1199, 1204 (2015). That does not mean, however, that for all purposes and in all contexts, a law is the same as a statute, and vice versa. The point is illustrated by a recent decision by the Court of Appeals for the Federal Circuit, where the presence of a one-letter word, "a," was a part of the court's reasoning. Rainey v. Merit Sys. Prot. Bd., No. 2015-3234, 2016 WL 3165617 (Fed. Cir. June 7, 2016).

     A Foreign Affairs Officer in the Department of State was relieved of his duties as a contracting officer representative. The officer filed a complaint with the Office of Special Counsel, alleging that his duties had been taken away because he had refused his supervisor's order to tell a contractor to rehire a terminated subcontractor. He argued that his refusal was based on his view that carrying out the order would have required him to violate a federal regulation, by improperly interfering with personnel decisions of a prime contractor and requiring the prime contractor to operate in conflict with the terms of the contract.

The Lawletter Vol 41 No 7

Paul Ferrer, Senior Attorney, National Legal Research Group

      For many years, trial attorneys were familiar with the broad scope of discovery under Rule 26(b)(1) of the Federal Rules of Civil Procedure, which provided that unless otherwise limited by court order, parties could "obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense." As indicated in Rule 26(b)(1), the scope of discovery could be limited by the entry of a protective order if the court determined, among other things, that "the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues." Fed. R. Civ. P. 26(b)(2)(C)(iii) (amended), quoted in EEOC v. Thompson Contracting, Grading, Paving, & Utils., Inc., 499 F. App'x 275, 281 n.5 (4th Cir. 2012). As part of the "Duke Rules" package of amendments to the Federal Rules of Civil Procedure, which took effect on December 1, 2015, that language was moved out of Rule 26(b)(2)(C)(iii) and into Rule 26(b)(1), which now provides that

The Lawletter Vol 41 No 7

Anne Hemenway—Senior Attorney, National Legal Research Group

     A personal service contract, such as one between an artist and a manager or between a recording group and a record company, may be rejected or assumed under the U.S. Bankruptcy Code. Generally, such management or promotional agreements are considered to be executory contracts under 11 U.S.C. § 365(a). An executory contract under § 365 is not specifically defined, but the term commonly refers to a contract that has performance due from both the debtor and the contracting party. In re Gen. Datacomm Indus., 407 F.3d 616 (3d Cir. 2005). Professor Vern Countryman's definition in Executory Contracts in Bankruptcy: Part I, 57 Minn. L. Rev. 439, 460 (1973), is considered to be the definitive definition of an executory contract.

     A trustee or debtor-in-possession has a right to assume or reject executory contracts under § 365 within the time frames set forth in § 365(d), but the agreement remains in effect pending the actual act of assumption or rejection. In re Nat'l Steel Corp., 316 B.R. 287 (Bankr. N.D. Ill. 2004). If a personal service contract is rejected, it is considered breached under § 365(g) as of the date immediately preceding the date the bankruptcy petition was filed.

The Lawletter Vol 41 No 6

Matthew McDavitt, Senior Attorney, National Legal Research Group

     While the issue is apparently one of first impression in many jurisdictions, a handful of courts nationally have addressed the relevancy and admissibility of evidence of pre- or post-will-execution mental capacity—normally deemed irrelevant to will-execution mental capacity—where it has been shown that the testator suffered from a permanent mental deficiency. Importantly, as observed by the U.S. Supreme Court, where evidence is developed of permanent or continuing mental incapacity, the burden properly shifts to the will proponent to prove a lucid interval, rather than the normal burden upon the contestant to prove incapacity, as continued mental incapacity is legally presumed:

     In addition to the proof . . . of his undoubted insanity prior [to] and for some time subsequent []to [the will execution], there was slight evidence of insane acts during the month of February, though there was no opinion expressed by anyone that he was incapable of making a valid deed or contract. The whole testimony regarding his insanity was duly submitted to the jury, who were instructed that if they found his insanity to be permanent in its nature and character, the presumptions were that it would continue, and the burden was upon the defendant to satisfy the jury by a preponderance of testimony that he was, at the time of executing the will, of sound mind. There was no error in this instruction.

Keely v. Moore, 196 U.S. 38, 46-47 (1904) (emphasis added).

The Lawletter Vol 41 No 6

Fred Shackelford, Senior Attorney, National Legal Research Group

      Can a court or a jury award punitive damages against a tortfeasor's estate? The Ohio Supreme Court addressed this issue of first impression in Whetstone v. Binner, 2016-Ohio-1006, 2016 WL 1061742. The case arose when a mother left her daughters with a babysitter, who was a relative. When the mother returned to pick up the children, she discovered the relative with one hand on one child and the other hand holding a pillow over the child's head. The mother struggled with the relative before escaping with her daughters. The mother and both daughters were later diagnosed with posttraumatic stress disorder, and they sued the relative for assault, false imprisonment, emotional distress, and loss of consortium. They sought both compensatory and punitive damages.

     After a default judgment was entered, the relative moved for relief from the judgment and requested postponement of an evidentiary hearing to determine damages. The trial court rescheduled the hearing but refused to grant relief from the judgment, and the relative died before the hearing took place. After the administrator of the relative's estate was substituted as the defendant, the trial court awarded compensatory damages but declined to award punitive damages. The court believed that punitive damages cannot be awarded against a tortfeasor's estate.

The Lawletter Vol 41 No 5

Suzanne Bailey, Senior Attorney, National Legal Research Group

     A recent case from the Second Circuit Court of Appeals sets forth new Second Circuit standards for addressing certain issues under the Family and Medical Leave Act ("FMLA"), 29 U.S.C. §§ 2601–2654, and the employment discrimination provisions of the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12111–12117, and provides a set of facts on how not to respond to an employee's request for FMLA leave. Graziadio v. Culinary Inst. of Am., No. 15-888-CV, 2016 WL 1055742 (2d Cir. Mar. 17, 2016).

     The plaintiff, Cathleen Graziadio, had been employed at the Culinary Institute of America ("CIA") as a Payroll Administrator for five years on June 6, 2012, when she notified her direct supervisor that she needed to take FMLA leave to care for her 17-year-old son, who had been hospitalized as a result of previously undiagnosed Type I diabetes. At Graziadio's request, the necessary FMLA paperwork was forwarded to her by the appropriate employee. Graziadio returned to work on June 18, 2012, and on or about June 27, 2012, she submitted a medical certification supporting her need for leave to care for the 17-year-old son. That same day, June 27, Graziadio's 12-year-old son underwent surgery after having fractured his leg playing basketball, and Graziadio promptly notified her supervisor that she would need immediate leave to care for her son and that she expected to return the week of July 9 at least part-time.