by Mark Bauman | Mar 22, 2023 | Commercial Litigation & Corporate Law, Legal News
In a recent decision, the Court of Common Pleas determined that claims for corporate negligence were sufficiently plead against a professional corporation. In Astleford v. Delta Medix, P.C., et al.[1], the trial court held that plaintiff’s claims for corporate negligence against Delta Medix, P.C. and Delta Medix, P.C. t/a The Center for Comprehensive Cancer Care (“Delta Medix”) was sufficiently plead to survive the preliminary objection phase. In the underlying case, the plaintiff filed suitagainst her treating physician as well as Delta Medix for radiating the wrong side of her neck/throat for treatment of squamous cell carcinoma.
In 2015, the plaintiff was diagnosed with squamous cell carcinoma the length of her right tonsil and into the soft palate and uvula. The defendant doctor scheduled the plaintiff for thirty-five (35) radiation treatments on the right side of her neck. After twenty-six (26) treatments, the defendant doctor notified the plaintiff that he had been radiating the wrong side of her neck. He offered her an additional seventeen (17) treatments on the right side of her neck, which was beyond the safe recommended dosage of radiation. Plaintiff’s complaint asserted claims for vicarious liability and corporate negligence against Delta Medix; and negligence, informed consent and intentional infliction of emotional distress against the defendant doctor.
After the complaint was filed, all defendants filed preliminary objections. Notably, the defendants argued that plaintiff’s claim of corporate negligence against Delta Medix could not be maintained because it is not a hospital or a health maintenance organization (“HMO”). Further, the defendants asserted that claims for corporate negligence have never been extended to the office of a physician or a private medical group. The defendants relied on the Supreme Court’s decision in Thompson v. Nason Hospital,[2] where a hospital’s liability in corporate negligencewas established, as well as, the Superior Court’s decision in Shannon v. McNulty[3], where the court determined that “an HMO is similar to a hospital in that the central role played by an HMO in the total health care of its subscribers is similar to that of a hospital’s role in the total health care of its patients.” The defendants argued that Delta Medix is a professional corporation providing specific cancer-related treatment services to its patients with a specialized focus regarding its scope and treatment, and therefore, cannot be classified as a comprehensive health care facility as referred to in Thompson.
In reaching its decision, the Court of Common Pleas relied on the 2012 Supreme Court decision in Scampone v. Highland Care Center, et al.[4] Scampone involved an action by a decedent’s estate against a nursing home and a corporation providing management services to the nursing home. The Court of Common Pleas opined that a fair reading of Scampone undercut the defendants’ argument that a claim for corporate negligence against Delta Medix could not stand. The Supreme Court in Scampone determined that “. . . a defendant is not categorically exempt from liability simply because appellate decisional law has not specifically addressed a theory of liability in a particular context. Categorical exemptions from liability exist . . . only where the General Assembly has acted to create explicit policy-based immunities. . . ” Id. at 599. Based on the Court of Common Pleas reading of the Supreme Court’s Scampone opinion, and in light of the fact that the defendants failed to point to any action of the General Assembly conferring the benefit of immunity on them, the Court of Common Pleas declined to extend immunity from corporate negligence claims.
Ultimately, the Court of Common Pleas found that the plaintiff pled sufficient facts to state a claim for corporate negligence against Delta Medix. Significantly, however, the Court noted that whether or not the claim survives is a question for another day.
[1] Astleford v. Delta medix, P.C., et al, 2016 Pa. Ct. Comm. Pl. (unpublished opinion)(June 8, 2016).
[2] Thompson v. Nason Hospital,527 Pa. 330, 591 A.2d 703 (Pa. 1991).
[3] Shannon v. McNulty, 718 A.2d 828 (Pa. Super. 1998).
[4] Scampone v. Highland Park Care Center, et al., 57 A.3d 582 (Pa. 2012).
by Mark Bauman | Mar 22, 2023 | Legal News, Other News
On June 6, 2012, the Pennsylvania Supreme Court entered an order amending the Pennsylvania Rules of Civil Procedure for production of documents and things, 4009.1, et seq. and 4011, to provide for discovery of “electronically stored information.” The amendments take effect on August 1, 2012. Specifically, the term “electronically stored information” has replaced the prior language in Rule 4009.1 referring to “electronically created data . . .” The amendments to Rule 4009.1 further provide that the party requesting electronically stored information may specify the format in which it is to be produced. However, the party or non-party to whom the request is directed has the right to object to the request. If no format is specified by the requestor, the electronically stored information is to be produced in the form in which it is ordinarily maintained or in a reasonably usable form. Additionally, an explanatory note has been added to Rule 4009.11 which states that a request for electronically stored information “should be as specific as possible.” The note further places emphasis on limitations as to time and scope, and favors agreements between the parties. Rules 4009.12, 4009.21, 4009.23, and 4011 were amended to include a note referencing the changes to Rule 4009.1.
The term “electronically stored information” is also found in the Federal Rules of Civil Procedure, but the Supreme Court has cautioned that the change in language to Rules 4009.1 et seq. are not intended to incorporate the federal interpretation of the term. Rather, in Pennsylvania, discovery of “electronically stored information” will continue to be governed by the traditional principles of proportionality, i.e., the just, speedy and inexpensive determination and resolution of litigation disputes. Thus, in the event of a discovery dispute, this proportionality standard requires the courts to consider (i) the nature and scope of the litigation, including the importance and complexity of the issues and the amounts at stake; (ii) the relevance of electronically stored information and its importance to the court’s adjudication in the given case; (iii) the cost, burden, and delay that may be imposed on the parties to deal with electronically stored information; (iv) the ease of producing electronically stored information and whether substantially similar information is available with less burden; and (v) any other factors relevant under the circumstances.
Healthcare providers must keep in mind that producing “electronically stored information” during discovery is about more than printing off copies of email messages – it is the entire process of accessing, using and preserving information, data, and records created or maintained in electronic form and can be extremely costly. For a healthcare provider, discovery of electronic data could involve the process of identifying and validating the identity of every user of a patient’s electronic medical record. It can also involve searching and analyzing the data behind the data, known as “metadata.”
The Supreme Court, in maintaining the proportionality standard, has specifically recognized that not all electronic information is reasonably accessible and may be costly to produce. Thus, there is an exception to production of electronically stored information that would relieve a party from having to disclose electronically stored information that is not “reasonably accessible,” that is, information that would be costly and burdensome to produce. If this objection is raised; however, the healthcare provider and/or its lawyer must be able to explain why certain data is not reasonably accessible and then document the true cost and burdens of producing the data being requested.
by Mark Bauman | Mar 22, 2023 | Legal News, Other News
Pursuant to an order issued on March 26, 2013, the Supreme Court has ruled that it will hear appellate arguments on the issue of whether the analysis of the Restatement (Third) of Torts should replace the strict liability analysis of the Second Restatement.
In the underlying case of Tincher v. Omega Flex, the defendant manufactured natural gas piping that was installed at the plaintiffs’ house. According to court papers, during the time at issue, the piping was damaged by lightning, which eventually caused the plaintiffs’ house to be damaged by fire. Following trial, the jury was instructed to follow the standard set forth in the Second Restatement and accordingly found in favor of the plaintiffs on a claim of strict liability. The defendant subsequently appealed and the Superior Court affirmed the judgment, holding that the trial court did not err by following the Second Restatement. Thereafter, a petition for allowance of appeal was filed regarding the application of the Third Restatement.
With regard to products liability law, Pennsylvania courts have traditionally adhered to Section 402A of the Second Restatement of Torts, which holds sellers “strictly liable” for harm caused to consumers by unreasonably dangerous products. In this regard, liability is attributed to sellers irrespective of any negligence, i.e. whether they exercised reasonable care, based on instead an analysis of defects within the product, the intended user, and his or her intended use of the product. The Third Restatement, on the other hand, rejects such a “no negligence” regime and holds sellers liable only for the sale of products determined to be “defective,” pursuant to various criteria which incorporate negligence concepts such as “foreseeable risk” and “care.” Notably, the Third Restatement also requires a showing of an alternative design, and whether utilization of such a design could have minimized or eliminated the risk of injury. While the additional elements of proof contained within the Third Restatement would appear to generally favor defendants, the law also benefits plaintiffs by allowing recovery for injured bystanders who are not the intended users of products.
The Supreme Court’s decision to hear the Tincher appeal is particularly significant due to several previous predictions by the U.S. Court of Appeals for the Third Circuit that the Court would adopt the Third Restatement as the applicable standard for addressing products liability. Such predictions notwithstanding, the Third Circuit has gone so far as to instruct the lower district courts to follow their precedent, given the lack of Supreme Court authority on the issue.
by Mark Bauman | Mar 21, 2023 | Commercial Litigation & Corporate Law, Legal News
The U.S. Court of Appeals for the Third Circuit affirmed a $5 million punitive damages award in a dispute involving safety testing and certification of commercial heaters. In Brand Marketing Group LLC v. Intertek Testing Services, No. 14-3010 (Sept. 10, 2015), the Court held that: (1) juries may award punitive damages in negligent misrepresentation claims; and (2) in awarding punitive damages, courts may consider harm to the general public rather than solely harm to the plaintiff.
Plaintiff manufacturer developed vent-free heaters which it provided to defendant testing company to perform safety testing and certification pursuant to American National Standards Institute (ANSI) standards. Defendant testing company performed the testing on the heaters in China using standards written in English and certified that the heaters met ANSI standards. Plaintiff manufacturer then delivered the heaters to its retail store customer. Plaintiff manufacturer’s retail store customer subsequently discovered that the heaters did not meet ANSI standards and stopped sales. The retailer then filed a claim against Plaintiff manufacturer and obtained a judgment in the amount of $611,060. Plaintiff manufacturer then brought suit against defendant testing company including a negligent misrepresentation claim.
The jury awarded a judgment in favor of plaintiff manufacturer in the amount of $1,045,000 in compensatory damages in addition to $5 million in punitive damages. The jury found that defendant testing company negligently misrepresented that it had the necessary expertise to determine whether the heaters met ANSI standards.
The Third Circuit affirmed the award including punitive damages holding that the jury may award punitive damages for negligent misrepresentation claims.
Aside from the application of punitive damages in negligent misrepresentation cases, the Third Circuit also addressed the broader issue of whether courts could consider harm to the general public rather than simply harm to plaintiffs. In the case at bar, plaintiff manufacturer sustained financial damages, but no consumers were harmed by an accident or injury caused by the heaters. However, the court held that the fact that no consumers were actually injured was irrelevant. The court further held that the potential public harm was “directly tied” to the harm to plaintiff manufacturer. Therefore, it was appropriate for the trial court to consider the harm to the general public in addition to the harm to plaintiff manufacturer.
by Mark Bauman | Mar 21, 2023 | Legal News, Other News
The Civil Practice Rules Committee has made several recommendations for rule changes in New Jersey, which, if enacted, will affect the way lawsuits are handled in the state.
Two proposed amendments in particular affect pleadings. The first proposal would benefit plaintiffs by requiring the defendant doctor in a medical malpractice action to state his or her specialty in the answer to the complaint to ensure that the plaintiff obtained an affidavit of merit from an appropriate physician. The purpose of this amendment is to prevent plaintiffs from having their case dismissed for an improper affidavit of merit. The second proposed amendment would require personal injury plaintiffs to sign authorizations for the release of treating physicians’ medical records at the time of answering discovery. Receiving these authorizations from plaintiffs early in discovery would benefit defendants by relieving them of the burden of seeking signed releases later in the discovery process.
See N.J. Ct. R. 4: 5-3; See also N.J. Ct. R. 4:17-4.
by Mark Bauman | Mar 21, 2023 | Legal News, Other News
In a memorandum opinion, the District Court for the Eastern District of Pennsylvania held that the PA Department of Public Welfare (“DPW”) was not entitled to the full amount of its lien against the settlement between a plaintiff and the Philadelphia Housing Authority.
The case involved a minor plaintiff who suffered injuries as the result of the presence of mold in a subsidized home, which triggered an asthma attack resulting in permanent brain damage. The case settled for $11,913,000.00 prior to trial. DPW paid $1,265,896.00 for plaintiff’s medical treatment as a result of the injuries sustained. Plaintiff’s counsel reached out to DPW a number of times in an effort to negotiate the lien to no avail. The Court approved the settlement on June 15, 2010 and the parties placed $1,267,611.41 in escrow, which represented more than the total DPW lien. DPW filed a motion to vacate the settlement or in the alternative to intervene and attempted to assert a lien for the full amount. The Court denied the motion to vacate, however, it granted the motion to intervene and a hearing to determine the amount DPW may collect was held on August 5, 2010.
Plaintiff argued that DPW could only collect a limited amount of its lien based on its “ratio theory.” The true value of plaintiff’s claim was over $45 million and the $11.9 million settlement represented less than a third of that value. Thus, the amount DPW would be entitled to receive would be one third of the settlement minus costs and fees, which in this case was approximately $200,000.00.
DPW admits that its recovery for reimbursement is limited in that it cannot exceed one half of the beneficiary’s recovery after deducting fees and costs (and any medical expenses paid by the beneficiary). DPW argued that Pennsylvania law establishes a presumption that half of a plaintiff’s settlement is properly attributed to compensation for medical expenses and therefore, DPW can lawfully collect its full lien because that amount does not exceed half the total settlement.
The Court disagreed with both arguments. Plaintiff’s “ratio theory” would require the Court to hold mini-trials to determine the true value of a claim and would seriously undermine the economy of settlement. In addition, the Court noted that DPW’s argument ignores the compromise that is involved with a settlement. “When parties settle, everyone sacrifices. DPW’s suggestion that it does not need to sacrifice (unless its lien is for more than half of a plaintiff’s total recovery) ignores this reality.”
Instead, the Court determined that the proper approach was for the trial judge to assess the factors that would have influenced the parties’ settlement positions and to make an ultimate determination of what portion of the settlement represented compensation for past medical expenses. In the case at hand, the Court considered each side’s potential arguments at trial and determined that the plaintiff settled for two-thirds the value of the claim, and therefore, DPW was entitled to two-thirds of its $1,265,896.00 lien (minus fees and costs) which amounted to $537,448.43.
