The Lawletter Vol 35 No 4, March 4, 2011

Dora Vivaz, Senior Attorney, National Legal Research Group

The Lawletter Vol 35 No 3, February 11, 2011

Fred Shackelford, Senior Attorney, National Legal Research Group

May an employee pursue common-law tort claims against an employer and a coemployee for conduct that occurs during the termination process?  The Nevada Supreme Court recently addressed this issue in Fanders v. Riverside Resort & Casino, Inc., No. 51225, 2010 WL 5422506 (Nev. Dec. 30, 2010).  The plaintiff in Fanders was a guest room attendant at a casino, whose job was to clean hotel rooms.  When she was accused by a coworker of improper conduct, she became angry and quit her job.  Before she could leave the premises, security guards approached her and attempted to photograph her.  She resisted by hiding under a table, and the guards allegedly grabbed her by the hair, pulled her from under the table, and called her by a derogatory name.  She sued the casino and the guards individually, presenting claims for assault and battery, vicarious liability, wrongful imprisonment, negligence, and punitive damages.  The trial court granted summary judgment for the defendants, ruling that the plaintiff's exclusive remedy was under Nevada's Industrial Insurance Act ("NIIA").

The Lawletter Vol 35 No 3, February 11, 2011

Scott Meacham, Senior Attorney, National Legal Research Group

After learning that a monumental 1925 church building would be deconsecrated, and fearing that the building could eventually be altered or demolished, a city council passed an ordinance declaring the parcel of land containing the church—and only that parcel—to be a historic district.

At first blush, this sounds like a case of spot zoning or the inhibition of religious exercise.  Indeed, when the religious corporation sued the City in federal court, it put forward a dozen claims under state and federal law, many of them focused on the First Amendment.

But the outcome was decidedly in favor of the City.  In Roman Catholic Bishop of Springfield v. City of Springfield, C.A. No. 10‑cv‑30033‑MAP, 2011 WL 31288 (D. Mass. Jan. 4, 2011) (slip copy), the federal district court granted the City's motion for summary judgment by focusing on two themes:  the fact that several of the claims were not ripe for adjudication and the fact that the City's ordinance was a proper implementation of an existing state law.

First, the state's Historic Districts Act clearly prohibits owners from making exterior alterations to an affected building within a district.  For the religious corporation that owned the church, this could have created a serious religious problem, since its own laws can require some of the building's religious symbols to be removed as part of the deconsecration.

The Lawletter Vol 35 No 3, February 11, 2011

Doug Plank, Senior Attorney, National Legal Research Group

The recent felony indictment of a Michigan man for accessing his wife's e-mail account on a shared family computer has drawn attention to the broad scope of some state statutes that were enacted for the more limited purpose of prohibiting unauthorized persons from hacking into corporate or governmental computers or computer networks for the purpose of carrying out criminal schemes.  See Hayley Tsukayama, Michigan Man Could Go to Jail for Reading His Wife's E-Mail, Washington Post, Dec. 27, 2010, http://voices.washingtonpost.com/fasterforward/2010/12/michigan_man_to_could_go_to_ja.html.  Michigan's relevant statute provides in pertinent part that "a person shall not intentionally and without authorization or by exceeding valid authorization . . . [a]ccess or cause access to be made to a computer program, computer, computer system, or computer network to acquire, alter, damage, delete, or destroy property or otherwise use the service of a computer program, computer, computer system, or computer network."  Mich. Comp. Laws § 752.795(a).  At the time that the statute was enacted, one law review article stated that "[t]he legislature recognized the growing influence of computers and computerized devices that are employed in criminal activities and amended the computer and telecommunications statutes to include new proscriptions and penalties for crimes committed with the aid of such devices."  Joseph A. Lavigne & Clara Scholla McCarthy, Annual Survey of Michigan Law June 1, 1996BMay 31, 1997, 44 Wayne L. Rev. 655, 734 (1998).  The same article further concluded that the statutes "represent positive attempts to penalize the ever increasing use of computers and computer technology to facilitate the commission of criminal acts."  Id. at 736-37.

The Lawletter Vol 35 No 3, February 11, 2011

Matt McDavitt, Senior Attorney, National Legal Research Group

When parties litigate claims implicating maritime law, an often misunderstood doctrine is the so-called "saving to suitors" rule, deriving from a cryptic phrase appearing in the U.S.C. section conferring admiralty jurisdiction to the federal courts:

The district courts shall have original jurisdiction, exclusive of the courts of the States, of:

(1)     Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.

28 U.S.C. § 1333(1) (emphasis added).  Under this rule, in circumstances where a plaintiff (1) possesses both state common-law claims as well as maritime claims arising from a single transaction, but (2) chooses to file an in personam suit in state court rather than an in rem suit in a federal forum, the plaintiff's forum and choice-of-law selections may not be circumvented by removal by the defendant to federal court unless federal jurisdiction is proper on grounds other than the maritime or admiralty claims arising from the events that are the subject of the suit.

The reasoning supporting application of this "reverse-Erie" doctrine is that once the plaintiff elects to initiate the suit as a common-law tort action rather than a federal admiralty one, this choice thereafter irrevocably removes the action from federal jurisdiction, despite the potential admiralty federal law claims.

The Lawletter Vol 35 No 3, February 11, 2011

John Buckley, Senior Attorney, National Legal Research Group

For most professional, commercial, and retail establishments, maintaining a website has become a matter of business necessity.  Yet with its undisputed advantages, the operation of a website also presents new areas of exposure to liability for its owner or operator.  Sources of potential liability include infringement (either in the domain name itself or in the content of the website), privacy (relating to the use of website user information or to the posting of website content containing the name or likeness of a person), defamation (in the form of web content), reliance (based on information contained on the website and the use of that information), or accessibility (for visually impaired individuals).

On January 10, 2011, the U.S. Department of Justice concluded a series of public hearings on proposed new rules that would expand the Americans with Disabilities Act by making certain websites accessible to the blind and deaf.  These new rules, expected to be promulgated within the next year, are sure to prompt litigation over website accessibility issues.  Even before the proposed rules, several judicial decisions revealed potential bases for website liability.

The Lawletter Vol 35 No 2, January 21, 2011

John Stone, Senior Attorney, National Legal Research Group

Taneia, a 14‑year‑old girl, attended a field trip with a youth outreach program organized by a public university and the State of Iowa.  On the field trip, she was injured when she was struck by a car as she attempted to cross the street.  Before Taneia had been allowed to go on the field trip, her mother had been required to sign two documents, entitled "Field Trip Permission Form" and "Release and Medical Authorization."  The gist of these documents was that they purported to waive any potential claims against the university and the State arising from injuries to participants in the field trip.

When Taneia's mother sued the trip organizers in negligence for Taneia's injuries, an Iowa trial court granted the defendant State summary judgment on the basis of the agreements signed by the mother before the field trip.  The Iowa Supreme Court recently reversed that decision and remanded the case to the trial court.  Galloway v. State, 790 N.W.2d 252 (Iowa 2010).  The court joined what it described as a majority of the states which have concluded that it is against public policy for a parent to waive liability for a child's injury before the injury has occurred.

The Lawletter Vol 35 No 2, January 21, 2011

Alistair Edwards, Senior Attorney, National Legal Research Group

In order to reform the real estate settlement process, Congress passed the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617.  The purpose of the statute was to ensure that consumers are "provided with greater and more timely information on the nature and costs of the settlement process" and "protected from unnecessarily high settlement charges caused by certain abusive practices."  12 U.S.C. § 2601(a).  One significant section, RESPA § 8(b), deals with "splitting charges":

(b)        Splitting charges

No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.

Id. § 2607(b).  Although that provision talks about "splitting charges," the U.S. District Court for the Southern District of Ohio in Augenstein v. Coldwell Banker Real Estate LLC, No. 2:10‑cv‑191, 2010 WL 4537049 (S.D. Ohio Nov. 9, 2010), recently opined that the above  provision can be violated even when there are not multiple settlement service providers splitting charges.  The court held that the RESPA provision directing that "[n]o person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service" except "for services actually performed" does not by its plain terms prohibit only the splitting of fees between multiple settlement service providers.

In the Ohio case, the Augensteins had entered into a federally related loan in order to finance their purchase. In connection to the sale and settlement, the Augensteins obtained settlement services from Coldwell Banker.  At closing, Coldwell Banker charged the Augensteins an administrative fee of $199 in addition to the total sales/broker commission of $19,710.  The Augensteins alleged that Coldwell Banker had not provided any services in exchange for the administrative fee and that the charging and the accepting of the fee violated RESPA because (1) it was a fee for which no services were rendered; and/or (2) it was a duplicative fee for services already rendered as part of the total sales/broker's commission.  In holding that the Augensteins had stated a claim under RESPA and that a violation of § 2607(b) did not require multiple providers, the court commented:

This Court finds that the text of RESPA § 8(b) clearly and unambiguously prohibits undivided unearned fees.  The statute explicitly states that "[n]o person shall give and no person shall accept" any part of a fee "other than for services actually performed." RESPA § 8(b).  In OfficeMax, Inc. v. United States, the Sixth Circuit said that "and" should presumptively be read conjunctively. 428 F.3d 583, 589 (citing Crooks v. Harrelson, 282 U.S. 55, 58, 51 S.Ct. 49, 75 L.Ed. 156 (1930)).  But if this reading would lead to incoherent or absurd results, then "and" should be read disjunctively to mean "or."  Id. at 589‑90.  Keeping in mind that "[i]t has long been a 'familiar canon of statutory construction that remedial legislation should be construed broadly to effectuate its purposes,[']" Carter, 553 F.3d at 985 (quoting Tcherepnin v. Knight, 389 U.S. 332, 336, 88 S.Ct. 548, 19 L.Ed.2d 564 (1967)), it would lead to absurd results if two settlement service providers could violate § 8(b) by sharing an unearned fee, but one settlement service provider could freely charge consumers such fees.  Thus, the "and" in § 8(b) creates two prohibitions:  it prohibits a settlement service provider from charging a fee for which no work is performed, and it prohibits a settlement service provider from receiving such a fee.  The violation exists regardless of whether the provider is sharing that fee with another.  See Sosa, 348 F.3d at 982; see also Santiago, 417 F.3d at 388.

The Lawletter Vol 35 No 2, January 21, 2011

Paul Ferrer, Senior Attorney, National Legal Research Group

Courts in a number of states have addressed the enforceability of an arbitration clause prohibiting one party to a contract from bringing a class action against the other party.  For example, in Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007) (en banc), the representative plaintiffs had purchased cellular telephones and calling plans from Cingular.  The contracts they had all signed were standard preprinted agreements that included a provision requiring mandatory arbitration.  That arbitration provision, in turn, contained a clause prohibiting consolidation of cases, class actions, and class arbitration.  The plaintiffs in Scott nevertheless filed a class action against Cingular, alleging that it had overcharged individual consumers between $1 and around $45 per month by unlawfully adding roaming and other hidden charges.  Obviously, the ability to bring this suit as a class action was crucial because, as the plaintiffs alleged, while no individual consumer suffered a significant overcharge, Cingular unilaterally overcharged the public by very large sums of money in the aggregate.