The Lawletter Vol 36 No 6

John Stone, Senior Attorney, National Legal Research Group

The California Invasion of Privacy Act ("Act"), Cal. Penal Code § 632, prohibits unconsented-to recording or monitoring, regardless of the content of the conversation or the purpose of the monitoring.  The law is intended to protect rights that are separate and distinct from the right to prevent the disclosure of improperly obtained private information, and it requires the assent of all parties to a communication before another person may listen.  An actionable violation of the Act occurs the moment a surreptitious recording or eavesdropping takes place, regardless of whether it is later disclosed.

In Kight v. CashCall, Inc., 200 Cal. App. 4th 1377, 2011 WL 5829678 (Nov. 21, 2011), the court reversed a summary judgment for the defendant company, finding that a lending corporation was potentially liable for violating the Act's prohibition against eavesdropping on telephone calls, without the consent of all parties, if it had directed one or more of its employees to secretly listen to a telephone conversation between a borrower and another employee.  The legislature enacted the Act prohibiting the recording of confidential communications to ensure an individual's right to control the firsthand dissemination of a "confidential communication," and the legislature further expressed its intent to strongly protect an individual's privacy rights in electronic communications.

During the relevant period for the class action, CashCall randomly monitored 547 calls to and from the servicing department:  225 inbound calls and 322 outbound calls.  The calls were monitored for quality control purposes to ensure that CashCall employees were following CashCall's policies and procedures and applicable laws governing debt collections. Supervisors monitored calls either electronically by using software or by physically sitting next to the representative and "plugging" in to the call.  For purposes of the summary adjudication motion, it was assumed that the calls were not recorded; the supervisor would listen to the call while the conversation was occurring.

While in many cases of incoming calls the customer heard the familiar recording that "[t]his call may be monitored or recorded for quality control purposes," it was not always the case, and it was never the case on outgoing calls.  At the beginning of the borrower relationship, CashCall generally provided written notice to all borrowers that information disclosed to CashCall would be disseminated to "those employees who need to know that information to provide products or services to you."

A "person" is defined in the Act broadly to include business entities like the defendant in Kight.  Based on the facts before it, the appellate court ruled that the lender corporation had potentially violated the Act's prohibition against eavesdropping on telephone calls if the borrowers had had a reasonable expectation that their telephone conversations with its employees were not being secretly overheard by other employees, even if the borrowers knew that the information in their calls would eventually be disseminated to other employees.

The Lawletter Vol 36 No 6                                   

Alistair Edwards, Senior Attorney, National Legal Research Group

For obvious reasons, one's decision to purchase or not to purchase a home may be impacted by the knowledge that there was a previous murder or suicide (or a combination of both) at the home.  Does the seller have a duty to disclose this sort of information to a potential purchaser?  Does the failure to disclose this information before the sale is accomplished amount to an actionable fraud or a negligent misrepresentation on the part of the seller?

Recently, in Milliken v. Jacono, 2011 PA Super 254, 2011 WL 5936768, a Pennsylvania court suggested that a home seller may be required to disclose to a potential purchaser that the house had been the site of a murder-suicide involving the home's prior owners.  First, the court considered whether there was a duty to disclose this information under Pennsylvania's Real Estate Seller Disclosure Law ("RESDL"), 68 Pa. Cons. Stat. §§ 7301–7315.  The RESDL requires that a seller of residential real estate disclose to a buyer any material defect with the property.  See 68 Pa. Cons. Stat. § 7303.  The court indicated that the murder-suicide history would constitute a material defect under the RESDL if it were to have a significant adverse impact on the value of the property.  The court went on to hold that there was a genuine issue of material fact on the issue of a material defect under the RESDL, thereby precluding the defendant seller's and real estate agents' motion for summary judgment on the purchaser's claim for a RESDL violation.

Likewise, the court also held that there were genuine issues of material fact as to the purchaser's claims for fraud and negligent misrepresentation (as well as the Unfair Trade Practices and Consumer Protection Law claim).  As with the RESDL claim, the court held that there were factual disputes concerning whether the murder‑suicide incident was a material defect.  With respect to the fraud claim, the court commented:

Whether a fact is material in the context of a fraud claim hinges on whether the transaction would have been consummated if the other party knew of the fact. See Skurnowicz v. Lucci, 798 A.2d 788, 793 (Pa.Super.2002).  Here, Buyer has alleged that had she known of the murder suicide, she would not have purchased the property.  R. at 268a.  Based on the foregoing, we conclude that whether Sellers and Agents failed to disclose a material fact was a question for the jury.  See Alloway v. Martin, 434 Pa.Super. 518, 644 A.2d 201, 204 (Pa.Super.1994) (stating that "fraud is a question of fact for the trier‑of‑fact to decide").  Accordingly, we conclude that the trial court erred in granting Sellers and Agents summary judgment on Buyer's fraud claim.

2011 WL 5936768, at *6.

January 17, 2012

Fred Shackelford, Senior Attorney, National Legal Research Group

As the cost of medical treatment in the United States continues to increase, health-care providers and patients must often weigh the costs and benefits of various treatment options in deciding what course of treatment to follow. Until recently, there was apparently little or no case law directly addressing the effect of treatment cost considerations on a health-care provider's potential liability for medical malpractice.

However, in Murray v. UNMC Physicians, 282 Neb. 260, ___ N.W.2d ___, 2011 WL 4104935 (2011), the court addressed the novel issue of whether the standard of care in a medical malpractice action may be affected by the cost of treating a patient. In Murray, a patient had been suffering from pulmonary arterial hypertension, a chronic condition in which blood vessels in the lungs constrict, causing pressure on the heart that can cause heart failure. The condition can be treated by a vasodilator known as Flolan, but this treatment costs roughly $100,000 per year, and if this treatment is begun, it must generally be continued for the rest of the patient's life. If the treatment is discontinued, pulmonary blood pressure rebounds and can be life-threatening. In Murray, the treating hospital's practice was to wait for the patient's insurance company to approve the treatment before beginning it, as most patients cannot afford the drug and it is more dangerous if treatment is started and then stopped. Unfortunately, Mrs. Murray died before the Flolan treatment was begun, and a medical malpractice complaint asserted that treatment should have been started before obtaining insurance approval.

At trial, the defendant hospital presented witnesses who testified that the standard of care required finding some source of payment for the Flolan treatment but that if insurance was unavailable, it was usually possible to find some other payment on a "compassionate need basis" within the 12-week period that was purportedly appropriate for treating the condition.  The jury returned a general verdict for the hospital, but the trial court granted a motion for new trial, concluding that "a medical standard of care cannot be tied to or controlled by an insurance company or the need for payment." 2011 WL 4104935, at *3. The trial court added:

The "bean counters" in an insurance office are not physicians. Medicine cannot reach the point where an insurance company determines the medical standard of care for the treatment of a patient. Nor, can we live in a society where the medical care required is not controlled by the physicians treating the patient. The position advanced by [UNMC's] expert tells us that the standard of care is different for those with money than for those without. This is neither moral nor just. It is wrong.

Id.

The Lawletter Vol 36 No 5

Steve Friedman, Senior Attorney, National Legal Research Group

In pertinent part, the First Amendment to the U.S. Constitution provides that "Congress shall make no law respecting an establishment of religion."  The Establishment Clause, applicable to the states and their political subdivisions through the Fourteenth Amendment, thus prohibits the Government from promoting or affiliating itself with any religious doctrine or organization, discriminating among persons on the basis of their religious beliefs and practices, or otherwise involving itself too deeply in the affairs of religious institutions.  See County of Allegheny v. Am. Civil Liberties Union Greater Pittsburgh Chapter, 492 U.S. 573, 590-91 (1989).

However, the Supreme Court has carved out an exception to its traditional Establishment Clause jurisprudence for so-called "legislative prayer."  In Marsh v. Chambers, 463 U.S. 783 (1983), the Court held "that the practice of opening legislative sessions with prayer has become part of the fabric of our society" in that its roots can be traced back to the beginnings of this nation.  See id. at 792.  Accordingly, legislative prayer has more of a civic than a religious overtone in this context, see id. at 792-93, provided that such prayer is not used "to proselytize or advance any one, or to disparage any other, faith or belief," see id. at 794-95.

In subsequent years, Marsh's "legislative prayer" exception to the Establishment Clause has been applied to analogous legislative or deliberative bodies at the local level as well.  See, e.g., Pelphrey v. Cobb County, 547 F.3d 1263, 1276 (11th Cir. 2008) (county commission).  However, juxtaposed to Marsh and its progeny is another line of "school prayer" cases.

In Lee v. Weisman, 505 U.S. 577 (1992), the Supreme Court declared unconstitutional a school policy of having clergymen give nonsectarian prayers at school graduations.  A major focus in Lee was the "heightened concerns" of "indirect coercion," given the impressionable youth in the public schools.  Indeed, the Court emphasized that "[i]nherent differences between the public school system and a session of a state legislature distinguish this case from [Marsh]."  Id. at 596.  The mere fact that students had the option of remaining silent during the prayer or of skipping the graduation ceremony altogether did not cure the constitutional defect.  See id. at 593-94.

So the question is, which case provides the applicable law in the school board context—Marsh or Lee?  Recently, the U.S. Court of Appeals for the Third Circuit took up this issue head-on.  See Doe v. Indian River Sch. Dist., 653 F.3d 256 (3d Cir. 2011).

In Doe, the plaintiffs challenged the school board's practice of beginning each public meeting with a prayer as being unconstitutional under the Establishment Clause.  The school board contended, and the district court agreed, that the school board was akin to a legislative or deliberative body and, thus, that its practice was akin to the legislative prayer approved of in Marsh.  See id. at 259.  Rejecting that argument, the Third Circuit reasoned that "[t]o conclude that, merely because the Board has duties and powers similar to a legislative body[,] Marsh applies, is to ignore the Board's role in [the] system of public school education."  Id. at 279.

The Lawletter Vol 36 No 5

Suzanne Bailey, Senior Attorney, National Legal Research Group

The Third Circuit Court of Appeals recently became the first federal appellate court to consider whether 18 U.S.C. § 3147 allows a federal district court to impose a sentence that exceeds the statutory maximum sentence for the underlying crime.  Section 3147 requires a sentence to be enhanced when the crime of conviction was committed while the defendant was on pretrial release from another federal charge.  In United States v. Lewis, 660 F.3d 189 (3d Cir. 2011), the court also addressed whether the district court had erred in permitting the defendant to be convicted of an offense under § 3147, rather than having § 3147 be considered as a sentencing enhancement.

Section 3147 provides:

A person convicted of an offense committed while released under this chapter shall be sentenced, in addition to the sentence prescribed for the offense to—

(1)       a term of imprisonment of not more than ten years if the offense is a felony; or

(2)       a term of imprisonment of not more than one year if the offense is a misdemeanor.

A term of imprisonment imposed under this section shall be consecutive to any other sentence of imprisonment.

18 U.S.C. § 3147.  The statute is implemented through § 3C1.3 of the Federal Sentencing Guidelines, which states:  "If a statutory sentencing enhancement under 18 U.S.C. § 3147 applies, increase the offense level by 3 levels."  U.S.S.G. § 3C1.3.

In Lewis, the defendant had been charged with one count of carjacking in violation of 18 U.S.C. § 2119, one count of possession of ammunition by a convicted felon in violation of 18 U.S.C. § 922(g)(1), and one count of committing an offense while on pretrial release in violation of 18 U.S.C. § 3147(1).  The defendant was convicted of being a felon in possession of ammunition and committing a felony while on pretrial release.  Although the maximum sentence for being a felon in possession of ammunition is 10 years, with the addition of the three offense levels under U.S.S.G. § 3C1.3, the advisory sentencing range was 140 to 175 months, and the court sentenced the defendant to 138 months.  On appeal, the defendant challenged the sentence on the grounds that it exceeded the statutory maximum for being a felon in possession of ammunition and that § 3147 was an enhancement statute, not an offense.  The court reviewed the sentence for plain error.

The court of appeals concluded that the clear and unambiguous language of § 3147 expressed the intent of Congress to increase the maximum sentence for the underlying offense by adding up to 10 years "in addition to the sentence prescribed for the offense."  Although it was unnecessary to look to the legislative history, the court opined that, given the clarity of the statutory language, were it to consider the history, it would find little support for the defendant's argument that Congress had intended to add up to 10 years to a sentence as long as the total sentence remained within the statutory maximum for the underlying crime.  The note to U.S.S.G. § 3C1.3 did not support the defendant's position either.  The court found that cases from other circuits, relied on by the defendant, were dicta or supportive of its holding.

September 14, 2011

Doug Plank, Senior Attorney, National Legal Research Group

One of the most significant consequences of the recent use of DNA testing in the criminal justice system has been the growing recognition that eyewitness identification testimony is simply not as reliable as it was previously thought to be.  In fact, now that DNA test results have exonerated hundreds of imprisoned convicts—most of whom were convicted on the strength of eyewitness identification from presumably reliable citizens—it has become apparent that traditional means of obtaining eyewitness identification have been too suggestive and too likely to create errors.  This fact has led some courts to question the propriety of investigative techniques that have long been approved by the U.S. Supreme Court and to adopt new rules with regard to both identification procedures utilized by the police and the admission of eyewitness identification testimony at trial. 

In accordance with this trend, the New Jersey Supreme Court, troubled by the lack of reliability of eyewitness identification evidence, has just announced guidelines that will make it easier for criminal defendants to challenge such evidence.   In State v. Henderson, No. 062218, A-8 Sept. Term 2008, 2011 WL 3715028 (N.J. Aug. 24, 2011), a unanimous decision, the court found that a "vast body of scientific research about human memory" has emerged in recent years that "casts doubt on some commonly held views relating to memory" and "calls into question the vitality of the current legal framework for analyzing the reliability of eyewitness identifications," id. at *1, as established in Manson v. Brathwaite, 432 U.S. 98 (1977), and State v. Madison, 109 N.J. 223, 536 A.2d 254 (1988).

 The case arose from the identification by an eyewitness, James Womble, of the defendant, Larry Henderson, as the accomplice to a murder, about which Womble did not speak to the police until they approached him 10 days later.  According to Womble's story, he had been drinking wine and champagne and smoking crack cocaine with Rodney Harper in an apartment, when two men, only one of whom was known to Womble, barged in and tried to collect $160 that Harper owed.  The second man—a stranger to Womble—pointed a gun at him and told him not to move because he was not involved in the debt.  Womble later stated that he "got a look at" the stranger, but not "a real good look."  2011 WL 3715028, at *3.  The first man eventually shot Harper in another room, and as the two intruders left the apartment, they threatened Womble with harm if he told the police anything.

 When approached by police during their investigation of the murder, Womble initially denied having been present during the murder and said that he had heard the gunshot coming from outside the apartment and that he had gone outside to find Harper, who was slumped over in his car.  Womble later admitted that he had lied to police, claiming that he had been threatened if he cooperated with them.  He then viewed a photographic array of suspects and identified Henderson as the man who had assisted the shooter and pointed a gun at him.  When Henderson was arrested on the basis of this identification, he acknowledged that he had gone to the apartment at the time of the shooting but insisted that he had waited in the hallway and had not participated in the shooting.

 The New Jersey Supreme Court closely examined the circumstances of the photographic array, the viewing of which, according to police guidelines, was initially conducted by an officer who had not previously been involved in the murder investigation.   The array consisted of seven "filler" photographs and one photograph of Henderson, and all eight photographs depicted headshots of African-American men between the ages of 28 and 35, with short hair, goatees, and, according to the officer, similar facial features.  Womble quickly eliminated five of the photographs, then reviewed the remaining three, discounted one more, and said he "wasn't 100 percent sure of the final two pictures."  Id. at *5.  After some time had passed, and after the two investigating officers had come into the room to assure Womble that he had no reason to be afraid because the police would protect him, Womble finally identified Henderson from his photograph as the person who had assisted the shooter.  At the subsequent hearing, held pursuant to United States v. Wade, 388 U.S. 218 (1967), Womble did not recant his identification but testified that he felt as though the officer had been "nudging" him to choose Henderson's photograph and "that there was pressure" to make a choice.  2011 WL 3715028, at *5.  Then, applying the two-part test from Manson and Madison—which requires courts to first determine whether police identification procedures were impermissibly suggestive, and if so, to then weigh five reliability factors to decide whether the identification evidence is nonetheless admissible—the trial court concluded that there was nothing in the photograph identification procedure that was so suggestive as to result in a substantial likelihood of any misidentification.

 Henderson was convicted of reckless manslaughter, largely on the basis of Womble's identification testimony at trial.  On appeal, the appellate division decided that the photographic array procedure had been suggestive, and it remanded for a consideration of the five Manson/Madison factors for determining whether the identification was nevertheless reliable.  The State appealed, and the New Jersey Supreme Court then ordered a remand for the establishment of a factual record that would be adequate to test the current validity of state law standards on the admissibility of eyewitness identification.  The court directed the trial court to conduct a plenary hearing to consider whether the assumptions and other factors reflected in the two‑part Manson/Madison test, as well as the five factors outlined in those cases to determine reliability, remained valid and appropriate in light of recent scientific and other evidence.

 A number of distinguished experts in psychology and law presented evidence at the remand hearing.  Based on this evidence, the New Jersey Supreme Court determined that the record substantiated the conclusion that eyewitness misidentification was "the single greatest cause of wrongful convictions in this country."  Id. at *9.  The court noted that more than 75% of convictions overturned due to DNA evidence had involved eyewitness misidentification and that comprehensive studies had shown that eyewitnesses to crimes had made an alarming number of misidentifications in lineups and photographic arrays, selecting a "filler" (an innocent person presented along with a suspect) about one-fourth of the time.  The court did not attribute this result to bad faith.  Rather,

We accept that eyewitnesses generally act in good faith. Most misidentifications stem from the fact that human memory is malleable; they are not the result of malice. . . . [A]n array of variables can affect and dilute eyewitness memory.