June 14, 2011

Doug Plank, Senior Attorney, National Legal Research Group

Most people undoubtedly assume that their personal e-mail correspondence is a private matter between them and the recipients of the correspondence and that when they send an e-mail to a particular person, that e-mail carries an expectation of privacy such that it will be protected from disclosure to the Government.  However, the scope of an individual's right to privacy with regard to his e-mail account is far from settled, as the U.S. Supreme Court has specifically declined to decide whether an individual's electronic messages are within the scope of Fourth Amendment protection, and the lower courts have taken different approaches in addressing the scope of e-mail privacy.

In City of Ontario v. Quon, 130 S. Ct. 2619 (2010), a civil rights action brought under 42 U.S.C. § 1983, the Supreme Court reversed a Ninth Circuit decision that had held that a police officer had a reasonable expectation of privacy in personal text messages he had sent to a third party, using a pager that had been issued to him for work use, and, further, that the officer's employer could be liable for damages for its violation of that privacy right because it had obtained the text messages from the wireless communications provider without a search warrant.  Stating that "[t]he judiciary risks error by elaborating too fully on the Fourth Amendment implications of emerging technology before its role in society has become clear," id. at 2629, the Court declined to rule on the Fourth Amendment issue but instead concluded that even if the officer did have a right to privacy in the text messages, his employer had not violated the Fourth Amendment in reviewing those text messages to and from a Government‑owned pager, because its review was reasonable and motivated by a legitimate work‑related purpose.  [For a discussion of Quon in the Employment Law context, see John Buckley, Employment Law:  Workplace Computers and Other Devices, www.nlrg.com/employment-law-legal-research (posted Jan. 21, 2011).]

Subsequently, in Rehberg v. Paulk, 611 F.3d 828 (11th Cir. 2010), the Eleventh Circuit declined to resolve the issue of whether e-mails are protected by the Fourth Amendment, also choosing to decide the case on an alternative ground.  Rehberg was a civil rights action brought by a citizen whose e-mails had been obtained by law enforcement officers from the citizen's Internet service provider ("ISP") and examined without a warrant.  The Eleventh Circuit noted that at the time of the officers' conduct, no court decision had held a Government agent liable for Fourth Amendment violations related to e-mail content received by a third party and stored on a third party's server, and thus it held that the officers were entitled to qualified immunity under the doctrine announced in Harlow v. Fitzgerald, 457 U.S. 800 (1982).

More recently, the Sixth Circuit became the first court to squarely hold that a person's e-mails are private and protected by the Fourth Amendment, even after they have been sent to a recipient.  In United States v. Warshak, 631 F.3d 266 (6th Cir. 2010), the issue reached the court after the defendant had been charged and convicted of fraud in connection with the operation of several of his businesses.  In the course of the Government's investigation of the defendant, it had subpoenaed the defendant's ISP to obtain the content of e-mails sent and received by him.  These e-mails contained incriminating evidence of the defendant's criminal culpability and were used at trial to convict him.

June 7, 2011

John Buckley, Senior Attorney, National Legal Research Group

Title VII makes it unlawful for an employer to "discharge any individual, or otherwise discriminate against any individual with respect to his . . . terms, conditions, or privileges of employment, because of such individual's . . . religion." 42 U.S.C. § 2000e-2(a)(1). "Religion" includes "all aspects of religious observance and practice, . . . unless an employer demonstrates that he is unable to reasonably accommodate . . . an employee's . . . religious observance or practice without undue hardship on the . . . employer's business."  Id. § 2000e(j).  Thus, it is unlawful for an employer not to make reasonable accommodations for an employee's religious practices, unless doing so would impose an undue hardship.  Ansonia Bd. of Educ. v. Philbrook, 479 U.S. 60, 63 & n.1 (1986).

The Lawletter Vol 35 No 8, May 27, 2011

Brett Turner, Senior Attorney, National Legal Research Group

In Burriss v. Burriss, 2010‑Ohio‑6116, 2010 WL 5140442 (Ct. App.), the trial court awarded $31,673 in personal property to the husband and $7,500 in personal property to the wife.  It then found that an equitable division of marital property was appropriate, so that the husband would have to pay a monetary award to the wife to equalize the division.  The court computed the amount of the equalizing award as $31,673 minus $7,500, or $24,173.

Not surprisingly, the trial court was reversed on appeal.  The proper amount of an equalizing award is not the difference between the parties' respective shares of the marital estate but, rather, half of the difference.  When the full difference is awarded, the division simply reverses the existing imbalance.  In Burriss, for example, the trial court's order left the husband with a net award of $7,500 ($31,673 minus $24,173), while the wife received a net award of $31,673 ($7,500 plus $24,173).  This is the exact reverse of the division which the trial court expressly held to be inequitable.  To equalize the division, the husband should have been ordered to pay half of the difference, or $12,086.50.

The Lawletter Vol 35 No 8, May 27, 2011

Jim Witt, Senior Attorney, National Legal Research Group

The requirements for the execution of a will or codicil are normally regarded as demanding strict compliance.  The requirements under New Jersey law are set forth in the New Jersey Statutes in a section entitled "Requirements for will; handwritten will; evidence establishing intent":

a.         Except as provided in subsection b. and in N.J.S.3B:3‑3, a will shall be:

(1)        in writing;

(2)        signed by the testator or in the testator's name by some other individual in the testator's conscious presence and at the testator's direction; and

(3)        signed by at least two individuals, each of whom signed within a reasonable time after each witnessed either the signing of the will as described in paragraph (2) or the testator's acknowledgment of that signature or acknowledgment of the will.

b.         A will that does not comply with subsection a. is valid as a writing intended as a will, whether or not witnessed, if the signature and material portions of the document are in the testator's handwriting.

c.         Intent that the document constitutes the testator's will can be established by extrinsic evidence, including for writings intended as wills, portions of the document that are not in the testator's handwriting.

N.J. Stat. Ann. § 3B:3‑2.

The Lawletter Vol 35 No 8, May 27, 2011

Tim Snider, Senior Attorney, National Legal Research Group

The United States is in approximately the fourth year of a period that has seen residential mortgage foreclosures at unprecedented levels.  Although the rate of filing of mortgage foreclosure notices has begun to decline recently, most of that decline is attributable to judicial foreclosure states such as Florida, Massachusetts, Connecticut, New York, and New Jersey, where judicial hostility to questionable procedures utilized by mortgage loan services has caused lenders to slow the process of initiating foreclosures.

An illustration of how skeptically courts view mortgage foreclosure procedures in some states is provided by In re Cruz, 446 B.R. 1, 2011 WL 285229 (Bankr. D. Mass. Jan. 26, 2011).  In that case, a Chapter 13 bankruptcy debtor brought an adversary proceeding against a residential mortgage lender for improperly proceeding with foreclosure while the debtor's application for modification of his loan under the Treasury Department's Home Affordable Modification Program ("HAMP") was pending.  The debtor asserted claims not only as an alleged third‑party beneficiary of the lender's obligations under HAMP, but also on the theory that the lender had violated its obligation of good faith and reasonable diligence under Massachusetts law.  The debtor moved for preliminary injunctive relief to prevent foreclosure from proceeding.

The Lawletter Vol 35 No 7, May 6, 2011

John Buckley, Senior Attorney, National Legal Research Group

If an employee's supervisor performs an act motivated by antimilitary animus and if that act is a proximate cause of an ultimate adverse employment action, then the employer is liable under the Uniformed Services Employment and Reemployment Rights Act ("USERRA").  So the Supreme Court recently held in a case in which a U.S. Army reservist relied on the "cat's paw" theory of liability.  Staub v. Proctor Hosp., 131 S. Ct. 1186 (2011).  A "cat's paw" case is one in which a plaintiff employee seeks to hold his or her employer liable for the discriminatory animus of a supervisor who did not make the ultimate employment decision but who nonetheless influenced that decision.  In applying a tort "proximate cause" analysis to the case, the Court reversed the Seventh Circuit's holding that a court cannot admit evidence of a nondecisionmaking supervisor's animus unless it has first determined whether a reasonable jury could find that the supervisor exerted a "singular influence" over the ultimate decisionmaker.

The Lawletter Vol 35 No 7, May 6, 2011

Fred Shackelford, Senior Attorney, National Legal Research Group

Can an insurer rescind a life insurance policy after the period of incontestability has expired?  In Sun Life Assur. Co. of Can. v. Berck, Civ. No. 09‑498‑SLR, 2011 WL 922289 (D. Del. Mar. 16, 2011), a 77-year-old man obtained a life insurance policy and transferred it to investors in the secondary life insurance market.  After the two-year incontestability period had expired, the insurer sought a declaratory judgment that the policy was void as a wagering contract, or stranger-oriented life insurance ("STOLI") policy.  In a STOLI arrangement, speculators collaborate with an individual to obtain life insurance and then sell some or all of the death benefit to stranger investors.  The Berck court noted that an insured must have an insurable interest and that this requirement discourages the use of insurance as a wagering contract.  A wagering contract gives the policyholder "a sinister counter interest in having the life come to an end."  Id. at *5.  The court ruled that expiration of the incontestability period does not preclude rescission of a life policy for which the policyholder lacked an insurable interest at the time the policy was procured, particularly when the incontestability clause was subject to a fraud proviso.  The court noted that no clear consensus exists as to what constitutes a lack of insurable interest at the time of procurement.  However, the court suggested that no insurable interest exists if a scheme to transfer the policy to an identifiable stranger is in place prior to submitting the application for insurance.  Id. at *7.  The court denied the defendants' motion to dismiss, allowing the insurer to conduct discovery in an effort to identify a specific party that was involved in the scheme from the outset.

The Lawletter Vol 35 No 7, May 6, 2011

Matthew McDavitt, Senior Attorney, National Legal Research Group

In the realm of interstate motor carrier law, federal law mandates that any policy of insurance covering the motor carrier contain a special surety endorsement to assure that in the event of damage or loss, a judgment obtained by the injured party against a negligent motor carrier will be paid.  Under the Federal Motor Carrier Act ("FMCA") and its implementing regulations, insurers of interstate motor carriers must pay unpaid judgments of plaintiffs who prevail against motor carrier insureds, up to the policy limits so long as federal minimum coverage is met, in the event that (1) the carrier's insurance denies coverage (e.g., through exclusions, use of nonscheduled vehicles, insured noncooperation, breached policy terms, and the like), and (2) no other insurance will cover the loss.

The most common endorsement used to comply with the FMCA mandate is the so-called MCS-90 form, with the "MCS" standing for "Motor Carrier Safety."  This form may be found at 49 C.F.R. § 387.15.  The MCS-90 endorsement comes into play only regarding acts of negligence by permissive users of the motor carrier; intentional acts are not covered.  Even if a nonscheduled vehicle was employed by the carrier during the actionable loss, the MCS-90 surety clause will pay the claim; the plain language of the MCS-90 form itself compels this reading: