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ADR Arbitrators must decide arbitration-joinder issue The question of whether reinsurance arbitrations should be consolidated, where the agreements are silent on that point, is for arbitrators rather than the courts to decide, the 7th U.S. Circuit Court of Appeals held on April 4. Employers Ins. Co. of Wausau v. Century Indemnity Co., No. 05-3437. Century Indemnity Co. entered into reinsurance agreements with a number of reinsurers, including Employers Insurance Co. of Wausau. Century claimed that its reinsurers must reimburse it for payments it had made to one of its insureds. After Wausau and others refused to pay, Century demanded that its reinsurers participate in a consolidated arbitration. Wausau acknowledged that its two reinsurance agreements required arbitration, but claimed that it need not submit to a consolidated arbitration. Wausau sued, seeking a declaratory judgment that it is entitled to separate arbitrations for each of its two reinsurance agreements at issue, and separate arbitrations from Century’s other reinsurers. A Wisconsin federal district court found that the question of whether the arbitration could be consolidated was a question for the arbitrator, not the court, and ordered Wausau to proceed with arbitration. The 7th Circuit affirmed, noting that the arbitration clauses state that “any dispute arising out of this Agreement” shall be submitted to arbitration. Although the question of the arbitrability of a particular dispute is for the courts to decide, the consolidation question is not a “question of arbitrability.” Rather, it is a procedural question. According to the U.S. Supreme Court’s ruling, Howsam v. Dean Witter Reynolds Inc., 537 U.S. 79 (2002), procedural issues are presumptively for arbitrators to decide.   Full text of the decision BANKRUPTCY Federal, state tax refunds exempt from bankruptcy Federal and state tax refunds are exempt from bankruptcy proceedings in consolidated cases, the 8th U.S. Circuit Court of Appeals determined on April 6. Benn v. Cole, No. 04-6053EM. Various Chapter 7 bankruptcy debtors claimed exemptions in their 2003 income tax refunds under Missouri’s Rev. Stat. � 513.427, 26 U.S.C. 6402 and 31 U.S.C. 3727. Prior to a hearing being held in each case on the issue, the debtors received refunds of both their federal and state income tax withholdings. The attorneys for the debtors are holding the original refunds pending a final judgment. The bankruptcy court in each case found that a debtor’s tax refund is not exempt from bankruptcy and ordered turnover to the bankruptcy trustee. The 8th Circuit reversed. Mo. Rev. Stat. � 513.427 allows bankruptcy debtors to exempt property that is not subject to attachment and execution under Missouri or federal law. The federal and state government may reach a tax refund in limited circumstances, such as when the Internal Revenue Service is allowed to use the refund to pay certain past-due debts. The court found that authorization to reach tax refunds in such circumstances is statutory, and that the procedure does not involve attachment and execution. CIVIL PRACTICE Adding defendant means new suit under CAFA Amending a complaint to add a new defendant commences a new suit under the Class Action Fairness Act of 2005 (CAFA), the 5th U.S. Circuit Court of Appeals ruled on April 6 in an issue of first impression. Braud v. Transport Service Co., No. 06-30088. On Aug. 30, 2004, a class action was filed in Louisiana state court for damages related to a chemical spill. On April 8, 2005, the plaintiffs amended their original complaint to add defendant Ineos Americas LLC, the alleged owner and co-shipper of the chemical that spilled. The plaintiffs served Ineos with both the original and amended petitions on April 19, 2005. On May 19, 2005, Ineos removed the action to federal court based on CAFA, which provides that any single defendant can remove a class action to federal court without the consent of the other defendants. CAFA became effective on Feb. 18, 2005. A Louisiana federal court granted the plaintiffs’ motion to remand, finding that CAFA did not apply because the original complaint was filed prior to CAFA’s effective date. The 5th Circuit reversed and remanded. Section 9 of CAFA states that “[t]he amendments made by this Act shall apply to any civil action commenced on or after the date of enactment of this Act.” U.S. Supreme Court case law holds that “a party brought into court by an amendment . . . has a right to treat the proceeding, as to him, as commenced by the process which brings him into court.” U.S. v. Martinez, 195 U.S. 469, 473 (1904). In addition, 28 U.S.C. 1446(b) provides that the removability of an action is determined as of the date of receipt of service of the amended complaint and not as of the date the original suit was filed in state court. CONSTITUTIONAL LAW Florida informed consent law like common law A Florida law requiring informed consent by physicians for pregnancy terminations violated neither the United States nor the Florida constitutions, the Florida Supreme Court held on April 6. State v. Presidential Women’s Center, No. SC04-2186. In 1997, the Florida Legislature enacted Fla. Stat. ch. 390.0111, the “Woman’s Right to Know Act.” The act holds abortions to be illegal unless the treating or referring physician provides adequate information to the patient, including possible complications. Presidential Women’s Center and others sued, arguing the law was unconstitutionally vague under both the United States and Florida constitutions. They argued that the vague language would require doctors to give every patient needless information under a “reasonable person” standard, and that the statutory language could require doctors to advise patients on even nonmedical effects of the procedure. A trial court enjoined enforcement of the law, and an intermediate appellate court affirmed. Reversing, the Florida Supreme Court held that the law was constitutional, based, at least in part, on concessions the state had made regarding the scope of the required informed consent. Noting that Florida law provided for informed consent for other types of procedures, the court said, “By interpreting the term ‘reasonable patient’ to be a reasonable patient under the particular patient’s circumstances, and the word ‘risks’ to encompass solely and exclusively medical risks, we agree with the State and conclude that subsection (3)(a)(1) of the Act constitutes a neutral informed consent statute that is comparable to the common law and to informed consent statutes implementing the common law that exist for other types of medical procedures.” Strict scrutiny required in prison religion case A trial court should have applied strict scrutiny to a Muslim prisoner’s free exercise of religion claim because the Massachusetts Constitution contains more stringent religious freedom protections than the U.S. Constitution, the Massachusetts Supreme Judicial Court held on April 7 in a case of first impression. Rasheed v. Commissioner of Correction, No. SJC-09617. Rashad Rasheed, an adherent of the religious teachings of the Nation of Islam, sued Massachusetts corrections officials, arguing that a commonwealth prison’s failure to accommodate his religious beliefs violated his First and 14th Amendment rights under the U.S. Constitution and the religious freedom protections of the Massachusetts Constitution. Following the standard for accommodation of prisoner religious rights articulated by the U.S. Supreme Court in Turner v. Safley, 482 U.S. 78, 89-91 (1987), the trial court held that there was no constitutional violation because the prison policies were reasonably related to legitimate penological interests. Reversing in part, the Massachusetts Supreme Judicial Court held that, because the Massachusetts Constitution gives the free exercise of religion greater protection than the U.S. Constitution, the trial court should have applied strict scrutiny when analyzing the prison’s refusal to supply religious meals on holidays. The court said, “While we have adopted the Turner standard of scrutiny for the review of regulations that infringe on other First Amendment rights in the prison context, we have yet to rule on whether that standard applies to the infringement of the exercise of religious beliefs. In our view, it does not. We will not ignore the explicit attention our Constitution gives to the application and extension of the right of religious exercise to inmates, an attention given no other right or liberty.” CRIMINAL PRACTICE Death caused by fleeing suspect is felony murder A suspect fleeing the scene of a home invasion in his car is still “in the perpetration” of that felony; his subsequent car wreck that killed two other people thus qualifies as felony murder, the Michigan Supreme Court ruled on April 5. People v. Gillis, No. 127194. While breaking into someone’s house, John Gillis was surprised by the homeowner. Gillis left immediately in his car, and police chased him as he drove the wrong way down an interstate. Gillis crashed headlong into a car, killing the couple inside. He was charged with two counts of first-degree felony murder, for killing two people while “in the perpetration” of a felony, that is, the invasion of the homeowner’s house. Gillis was convicted in a state trial court. An intermediate appellate court reversed, ruling that the home invasion was complete when Gillis left the house. The Michigan Supreme Court reversed. In determining whether Gillis was still “in the perpetration” of the home invasion felony when he committed the murders, factors include: (1) the length of time between the felony and the murders; (2) the distance between the scenes of the felony and the murders; (3) whether there is a causal connection between the murders and the felony; and (4) whether there is continuity of action between the felony and the murders. Here, Gillis killed the couple as he was actively attempting to avoid being caught for the home invasion. GOVERNMENT Del. laws bar disclosure of autopsy information Delaware’s Medical Examiners Statute and Health Record Privacy Statute prohibit the public disclosure of autopsy results, the Delaware Supreme Court ruled on April 3. Lawson v. Meconi, No. 252, 2005. Lisa Lawson’s husband was killed in a car fire in Rehoboth Beach, Del. Without Lawson’s permission, but acting on her authorized discretion, the assistant state medical examiner conducted an autopsy. The final report, which included a toxicology analysis, and which concluded that there was no foul play, was forwarded to the Office of Vital Statistics. The police and fire department also concluded that the death was accidental. In order to dispel rumors, the police chief and the fire marshal sought to release all of the autopsy-related information to the public. Lawson sued to enjoin them from doing so. The state trial court denied her request. The Delaware Supreme Court reversed. The Delaware attorney general has said in the past that autopsy reports are exempt from the Delaware Freedom of Information Act as investigatory files. Consequently, any information gathered during the course of an investigation is not public information. According to the Medical Examiners Statute, an assistant medical examiner can communicate autopsy results to the police, but not the public. The Health Record Privacy Statute similarly prohibits public disclosure of autopsy information by the police. City can enforce zoning rule despite permit error A city can enforce a zoning ordinance against a property owner whose substantially completed home has been built in violation of the ordinance, even though the city had approved the building plans, the Texas Supreme Court ruled on April 7. City of Dallas v. Vanesko, No. 04-0263. Doug and Grace Vanesko tore down the house they lived in and began building a new, larger home on the same spot. Acting as their own designers and contractors, the Vaneskos paid an extra fee to the city of Dallas to have their building plans carefully reviewed. The plans were approved and a building permit was issued. As construction progressed, the city made several site visits without complaint. When the roof was framed in, however, inspectors said it was too high for the applicable zoning ordinance and recommended that the Vaneskos ask for a variance. Though there was no discernible opposition from neighbors or from the city, the city denied the request for variance. A Dallas trial court reversed the city’s decision, and an intermediate appellate court affirmed. The Texas Supreme Court reversed. The mere issuance of a building permit does not render a city’s zoning ordinances unenforceable, nor does the fact that a permit was granted in error entitle a property owner to an automatic variance. The court noted that a city ordinance prohibits variances to relieve self-created hardships. IMMIGRATION LAW No Medicaid for illegal alien for chemotherapy Chemotherapy for an illegal alien’s leukemia is not a Medicaid-reimbursable treatment, the North Carolina Supreme Court held on April 7. Diaz v. Division of Social Services, No. 523PA04. Hector Diaz, an alien not lawfully admitted for permanent residence, was hospitalized with symptoms that were later diagnosed as acute lymphocytic leukemia. A North Carolina hospital gave him treatments including chemotherapy for more than a year. His providers applied for Medicaid coverage for him. The North Carolina Division of Medical Assistance approved payment for his first days of medical services as emergency medical services, and for three days of services later on, but denied coverage for all of the other services, including the chemotherapy, calling them “nonemergency.” The Department of Health and Human Services affirmed, but a state trial court reversed and an intermediate appellate court affirmed, saying that Medicaid should pay for the treatment of an emergency medical condition. The North Carolina Supreme Court reversed. It said that under the federal Medicaid statute, 42 U.S.C. 1396a, the federal government refuses to reimburse states for illegal aliens’ medical care, except for treatment of an “emergency medical condition” where the lack of “immediate” treatment could reasonably be expected to result in placing the patient’s health in serious jeopardy, serious impairment to bodily functions or serious dysfunction of any bodily organ or part. The court said that the exception does not apply unless one of those results is reasonably expected if “immediate treatment is withheld.” The court rejected the claim that once a patient shows an emergency medical condition, all treatment needed to cure its underlying cause must be covered, even when the condition is no longer an emergency. LEGAL PROFESSION Malpractice action fails if injury isn’t foreseeable Because a law firm’s overreaction to a sanction motion is not a foreseeable consequence of a discovery blunder, an attorney-malpractice claim fails, the 7th U.S. Circuit Court of Appeals held on April 7. TIG Ins. Co. v. Giffin Winning Cohen & Bodewes P.C., No. 05-2203. Female professors sued Illinois State University, claiming that they were being paid less than male professors. In their response to the plaintiffs’ discovery request, the university’s attorneys, Giffin, Winning, Cohen & Bodewes of Springfield, Ill., failed to produce two gender- equity studies. The law firm had routed the request to William Gorrell, a university official, but Gorrell failed to provide the studies. Subsequently, Gorrell, now terminated by the university, provided the plaintiffs’ attorney, Joel Bellows, with the studies. Believing the studies to be based on a database, Bellows demanded that the university turn this over and filed a motion for sanctions and default judgment for failure to produce the gender-equity studies. By now, Latham & Watkins was representing the university. Concluding that the alleged database had never existed, the trial court denied the default judgment request but sanctioned Giffin Winning $10,000 for the discovery lapses-a sanction that was later vacated. The university’s liability insurer, TIG Insurance Co., paid the university’s attorney fees, including $1.2 million for defense of the sanction motion. TIG brought a malpractice case against Giffin Winning over the discovery lapses that led to the sanctions motion. An Illinois federal district court dismissed the malpractice case. The 7th Circuit affirmed, holding that TIG’s claim failed for a lack of proximate cause. Applying Illinois law, the court said that the issue is whether the injury is of a type that a “reasonable person would see as a likely result of his or her conduct.” The court asked, “[W]ould reasonable people foresee that Gorrell would mislead Bellows about a database which did not exist? Would reasonable people then think that, upon hearing Gorrell’s story, Bellows’ first impulse would be to move for sanctions including default judgment in the case? Would reasonable people foresee that, next, a large law firm . . . would jump into high gear . . . to defend against the possibility [of a] default judgment on the basis of an alleged conspiracy to hide something which does not exist?” The court answered no. A trustee in foreclosure, attorney is debt collector An attorney acting as a trustee in a foreclosure was a “debt collector” for purposes of the federal Fair Debt Collection Practices Act (FDCPA), the 4th U.S. Circuit Court of Appeals held on April 5. Wilson v. Draper & Goldberg PLLC, No. 05-1392. Chase Manhattan Mortgage Corp. retained attorney Darren Goldberg and his law firm, Draper & Goldberg of Leesburg, Va., to represent it in the foreclosure of Karen Wilson’s real property. After Wilson retained counsel, Draper & Goldberg continued to contact her about the foreclosure. Wilson sued Goldberg and his firm, claiming violation of the FDCPA for contacting her after she had retained counsel. A Maryland federal court granted summary judgment to Goldberg and his firm, holding that, because they were substitute trustees in a foreclosure, they were not “debt collectors” for purposes of the FDCPA. Reversing, the 4th Circuit held that despite being substitute trustees in a foreclosure, Goldberg and his firm were still, for FDCPA purposes, debt collectors collecting a debt. The court said, “Defendants’ argument, if accepted, would create an enormous loophole in the Act immunizing any debt from coverage if that debt happened to be secured by a real property interest and foreclosure proceedings were used to collect the debt. We see no reason to make an exception to the Act when the debt collector uses foreclosure instead of other methods.”

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