Maryland Increased the Jurisdictional Limits to Demand a Jury Trial From $15,000 to $25,000 

August 2023 • Source: DeCaro, Doran, Siciliano, Gallagher & DeBlasis, LLP

On Tuesday, November 8 of 2022 Maryland voters voted to approve a constitutional amendment to increase the minimum amount in controversy that guarantees a jury trial from $15,000 to $25,000.  This change went into effect as of December 4, 2022.   

The $30,000 amount in controversy limit for District Court was not amended as part of the ballot measure meaning that cases with amount in controversy between $25,000 and $30,000 have the option of remaining in District Court for a bench trial or being pled up to Circuit Court for a jury trial. The Maryland Association for Justice, whose members are primarily plaintiff’s attorneys supported the measure along with the Maryland State Bar Association (MSBA).  Richard Montgomery III, the director of Legislative and Governmental Relations for the MSBA argued that:

“The MSBA has found that civil claims with lower amounts in controversy cannot be litigated economically in the circuit courts. Generally, when those claims require testimony by medical experts, the high costs of those expert witnesses, as well as the expansive discovery in the circuit court combine make such cases unduly expensive to pursue. The result is that often plaintiffs with smaller claims face unfairly high barriers to justice. Given the ever-increasing costs associated with asserting medical claims, we believe the time has come to adjust the amount in controversy thresholds.”[1]

The American Property Casualty Insurance Association Political Action Committee (Insuring America PAC), the Maryland Association of Mutual Insurance Companies, the Maryland Defense Counsel and the National Association of Mutual Insurance Companies PAC all opposed the measure and issued papers outlining their opposition. [2],[3],[4],[5]  Robert Glass, the president of the Maryland Association of Mutual Insurance Companies argued that:

“The enactment of this legislation would deprive many defendants in civil actions of the ability to remove an action from the District Court to the Circuit Court, where appropriate rules of discovery would be available. ... We should also note that, in the majority of states, no threshold of any kind exists. Among those states that have thresholds, Maryland is an outlier, with one of the highest thresholds in the Nation. Increasing the threshold now –doubling it – would only upset this balance without a demonstrated need.”[6]

The interesting division of opinions on the issue may be surprising to the average lay person because the organization that supports Plaintiff’s attorneys who represent people against larger corporations and insurance companies are in favor of limiting the right to a jury a trial and the Organizations representing the other side of the “V” in civil lawsuits, the Insurance Companies and corporations oppose the limitation of a right to a jury.

The defense organizations presented concerns about allowing larger cases between $15,000 and $25,000 to remain in District Court where the rules of discovery are limited that often result in challenges to mount a proper defense to case. Additionally, noting that Maryland joins a minority of states that have any jury trial threshold and will now be one of the highest in the country.  Plaintiff’s attorneys, who typically are the strongest proponents of the jury system, raised concerns over the costs associated with prosecuting a small case that result in them not being able to take cases that do not have large damages which creates a barrier to the justice system for the majority of victims of negligence.

Highway Accident Fairness Act of 2023 Attempts to Strengthen Penalties for Staged Commercial Motor Vehicle Accidents and Mandate Disclosure of Third-Party Litigation Funding

August 2023 • Source: Ney J. Gehman and Trent P. Roddy, Perrier & Lacoste

The Highway Accident Fairness Act (H.R. 2936)(118^th Congress) was introduced by Representative Henry Cuellar (D-TX) and cosponsored by Garret Graves (R-LA) and Mike Bost (R-IL) on April 27, 2023.  The bipartisan legislation is intended to make it a federal crime to intentionally cause an accident with a commercial vehicle and to make a false claim for damages. The goals of the Highway Accident Fairness Act of 2023 is to “reduce unnecessary lawsuits, lower car insurance rates, and increase safety on our roads.”[1]

The three main goals of the Act include establishing criminal penalties for staged highway accidents involving commercial motor vehicles (CMVs), provide federal courts jurisdiction in cases involving accidents with truck crashes involved in interstate commerce and exceeds $5 million; and to require the disclosure of third-party litigation financiers.[2]  

The Purpose of the Highway Accident Fairness Act

The purposes of the Act include:

(1)  Assure fair and prompt recoveries for highway accident victims;

(2)  Benefit society by preserving predictability and stability in the movement of freight in interstate commerce and lowering costs to the supply chain and, ultimately, all Americans;

(3)  Protect the motoring public from the safety hazard of staged collisions between passenger cars and commercial vehicles;

(4)  Prevent fraudulent claims that result from staged collisions;

(5)  Protect law enforcement agencies and highway departments from expending resources dealing with the aftermath of staged collisions; and

(6)  Minimize the impact of staged collisions on the supply chain and the movement of goods in interstate commerce.[3]

Staged Commercial Motor Vehicle Accidents

Without question, staged commercial motor vehicle accidents have emerged as an ongoing issue facing the trucking industry and their insurance carriers.  For example, a federal investigation continues in the Eastern District of Louisiana has focused on more than 150 accidents in the New Orleans area has led, to date, of more than fifty (50) individuals convicted for their involvement in staged accidents.  The foregoing included one lawsuit that resulted in a $4.7 million settlement alone prior to the fraudulent claims being exposed.[4]

 “Just incredibly selfish and irresponsible to do these sorts of things, which is why we’ve got to bring the FBI and other federal law enforcement to shut these things down,” said Representative Garret  of Louisiana.  “Once we learned about what happened down in New Orleans, we realized this is something that could not happen again.” 

“Our bill will prevent criminal rings that are intentionally causing accidents from driving up costs for the rest of us by cracking down on fraudulent claims, increasing safety on the roads, and lowering insurance rates for everyone,” said Graves.[5]

Third Party Legal Funding Disclosure

Another key component of the Highway Accident Fairness Act is for the disclosure of “any civil action in State or Federal court alleging bodily harm or loss of life involving one or more commercial motor vehicles, as defined in in section 31101 of title 49, operating on a public road in interstate commerce.”[6]  This wide-ranging requirement of disclosure would apply to any state or federal civil action “alleging bodily harm or loss  

Conclusion

It remains to be seen whether the Highway Accident Fairness Act of 2023 will be enacted in its current form, or will be revised or modified to increase its likelihood of enactment.[7]   The Highway Accident Fairness Act of 2021, which contained the same Third-Party Litigation Funding disclosure proposal, did not receive a vote in a prior session of Congress.  The bill has not currently been scheduled for debate.

Man’s Best Liability: A Brief Overview of Homeowner’s Insurance and Dog Bites*

August 2023 • Source: Michael "Maz" Mazurczak, Melick & Porter, LLP

The issue of insurance coverage in the event of a dog bite is becoming a more and more common problem as time goes by. The American Veterinary Medical Association has found that there are nearly 85 million dogs living in US households and according to the Insurance Information Institute dog bites make up approximately one-third of homeowners insurance claims and these claims have increased by ninety percent over the last fifteen years with a 2.2 percent jump from 2020 to 2021 alone. This makes sense considering the 4.5 million people are bitten by dogs each year in the United States. And these injuries can carry hefty financial consequences, as of 2021 the average award for dog bite cases (taking into consideration both settlements and trial verdicts) was $49,025.

Massachusetts has strict liability for dog bites, regardless of the breed of dog and whether or not the dog has a history of aggression. This means a plaintiff does not have to prove the person responsible for the dog was negligent in order to recover damages. Taking measures such as a leash, harness, or fence are also not enough to avoid liability. It is also key to note that the law applies to the person responsible for the dog. Case law is clear that if someone is housing and caring for another’s dog they can still be found liable a bite that happens while the dog is in their care. The only exception to this strict liability is if the plaintiff provoked the dog, was trespassing on the dog owner’s property, or was threatening the owner or another individual. Damages have even been awarded in cases where there wasn’t serious physical injury, PTSD and mental anguish suffered by the plaintiff following a dog attack can be enough.

Homeowners insurance will provide coverage for dog bites that occur in the home provided that the policyholder informed them in advance of each dog being adopted. If the insurance was not previously aware of the dog or the attack occurs off the owner’s property insurance may deny coverage. While it is illegal for local laws to prohibit owning certain dog breeds, insurance companies can deny coverage based on a dog’s breed and often do. The most commonly denied dogs are pitbulls, presa canarios, rottweilers, german shepherds, and akitas. Dogs will a history of aggressive behavior will also almost always be denied. Some insurance companies won’t cancel the policy altogether but will require the dog owners to sign liability waivers for dog bites, acknowledging that their homeowner’s insurance is not extending coverahe to the dog. Separate insurance that specifically provides coverage for dog attack and property damage caused by a dog can also be purchased but often homeowner’s insurance will still cancel a policy if the policyholder adopts what their guidelines deem a dangerous dog.

*Melick & Porter, LLP loves dogs and would never want to discourage anyone from adopting a furry friend. This is simply a guide to know how to best protect yourself and your pup.

US Supreme Court Ruling to Make Philadelphia the Center of Personal Injury Litigation

August 2023 • Source: Ross J. Di Bono., Zarwin, Baum, DeVito, Kaplan Schaer Toddy, PC

On June 27, 2023, the United States Supreme Court issued a ruling in Malloy v. Norfolk Southern Railway Co. (600 U.S. ___ (2023))[1], that upheld a Pennsylvania Statute granting Pennsylvania State Courts general jurisdiction over all foreign corporations that register to do business in Pennsylvania.  This ruling has the potential to drastically increase the number of cases that are filed in Pennsylvania, with a particular emphasis on personal injury cases. 

The Mallory case involved a claim for damages due to illnesses that were allegedly caused by exposure to carcinogens.  Plainitff was a longtime Norfolk Southern freight mechanic and worked for the company in Ohio and Virginia.  While Plainitff lived in Pennsylvania for a period of time, he does not allege that he sustained any exposure to the cancer-causing chemicals while in Pennsylvania. 

Ultimately, Malloy retained a Pennsylvania personal injury attorney and filed suit in Pennsylvania state courts for his alleged injuries.  He asserted that the Pennsylvania state courts had personal jurisdiction over Norfolk Southern pursuant to a Pennsylvania Statute that governed registration of foreign corporations doing business in Pennsylvania.  Pursuant to 42 Pa. Cons. Stat. §5301(a)(2), as a requirement of registering to do business in Pennsylvania, a foreign corporation must consent to Pennsylvania state courts exercising general jurisdiction over the foreign corporations.  This means that by way of registering to do business in Pennsylvania, a foreign corporation is consenting to be sued in Pennsylvania even though the cause of action did not arise in that state. 

Norfolk Southern opposed this lawsuit and argued that the consent to general jurisdiction set forth in 42 Pa. Cons. Stat. §5301(a)(2) violated its due process rights under the 14^th Amendment of the US Constitution.  This issue proceeded before the Pennsylvania Supreme Court which sided with Norfolk Southern and ruled that the consent to general jurisdiction requirement violated Due Process under the 14^th Amendment. 

Malloy appealed this ruling to the US Supreme Court.  In a divided, 5 to 4 opinion, Justice Gorsuch overruled the Pennsylvania Supreme Court and held that the consent to jurisdiction requirement set forth in 42 Pa. Cons. Stat. §5301(a)(2) did not violate the 14^th Amendment.  Justice Gorsuch noted that this issue was not a new issue and had been decided by the Supreme Court in 1917 in the Pennsylvania Fire Ins. Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U.S. 93. 

Per Justice Gorsuch, Pennsylvania Fire specifically ruled that similar consent to general jurisdiction clauses did not violate the 14^th Amendment’s Due Process Clause.  Thus, Pennsylvania Fire was binding precedent.  Justice Gorsuch specifically rejected Norfolk Southern’ s argument that the Pennsylvania Fire ruling had been chipped away by subsequent Supreme Court decisions.  Thus, and by a 5 to 4 margin, the Court vacated the ruling of the Pennsylvania Supreme Court and remanded Malloy for further proceedings. 

While Justice Gorsuch was clear that the consent to general jurisdiction clause does not violate Due Process, Malloy may be overturned on other grounds.  In a concurring decision, Justice Alito noted that, while he agrees that the consent to general jurisdiction clause does not violate the 14^th Amendment’s Due Process Clause, he believes it may violate the Dormant Commerce Clause.  Per Justice Alito, Norfolk Southern raised the Commerce Clause issue with the Pennsylvania Supreme Court, but that court did not rule on this specific issue as it had reached a dispositive conclusion on the Due Process argument.  Pursuant to Justice Gorsuch’s ruling, Malloy is now being remanded back to the Pennsylvania Supreme Court, which is expected to rule on the Dormant Commerce Clause issue.

Given that the Pennsylvania Supreme Court already found the consent to general jurisdiction clause unconstitutional, there is a chance that the court once again rejects this requirement.  As Just Alito noted, under the Commerce Clause, the Constitution grants Congress the power to regulate commerce among the States.  The Dormant Commerce Clause prohibits States from enacting laws that unduly restrict interstate commerce.    Justice Alito also noted that the Constitution also restricts a state’s power to reach out and regulate conduct that has little, if any, connection to the State’s legitimate interest.

Based on his concurring concurrence, Justice Alito has left to door open for Malloy to be revaluated under the Dormant Commerce Clause as he noted that the consent to general jurisdiction clause allows Pennsylvania State Court to govern over issues that have little to no connection to the state, and therefore interferes with interstate commerce.  As Malloy was decided by a slim margin, there are signs that should the case get back in front of the Supreme Court on the Dormant Commerce Clause argument, the vote may proceed differently. 

Practically, this decision opens the door for Pennsylvania to see an influx of personal injury lawsuits, with most of them to be filed in Philadelphia.  As Justice Alito noted, Philadelphia is especially favorable to tort plaintiffs.  Since forum shopping is not prohibited by the Constitution, it is anticipated that most of these new cases will be filed in Philadelphia, even those they have no tangible connection to the City or State.

Because of this, there will be a renewed focus on Motions challenging the propriety of venue in Philadelphia, as well as removal proceedings.  In Pennsylvania, venue is proper in any county where a corporation “regularly conducts business.” Pa. R. C. P. 2179 (a)(2).  When a corporation challenges venue solely based on its business contacts, the courts conduct a so-called the quality-quantity analysis. Substantively, venue is proper under Rule 2179(a)(2) where there is: (1) a “quality of acts” conducted by the corporation that directly further or are essential to corporate objectives; and (2) a “quantity of acts” that are “sufficiently continuous so as to be considered habitual.”

Recently, the Pennsylvania Supreme Court heard oral argument regarding the “quantity” prong of the venue analysis. Hangey v. Husqvarna Prof'l Prods[2]. There, the Plaintiff purchased a lawnmower from a retailer in Bucks County. PA.  After falling off the lawnmower while in use, the Plaintiff sustained severe injuries to both legs when the lawnmower continued to operate and ran over his legs. Plaintiff, a resident of Wayne, Pa, filed a products liability case against the manufacturer and retailer in Philadelphia County. The trial court issued an order transferring this case Bucks County based on the defendants’ preliminary objections for improper venue. The trial court reasoned that although .005% of sales from a multi-billion-dollar company satisfied the “quality prong,” the tiny percentage failed to meet the “quantity” standard.

The Superior court disagreed, and overturned the trial court, stating it abused its discretion by focusing on the percentage of business when ruling the contacts did not satisfy the quantity prong of the venue analysis. Because the Defendants are vast, billion-dollar entities with at least one authorized dealer in Philadelphia, the court held the trial court abused its discretion.

Accordingly, venue is going to be one of the most “hot button” issues before the Pennsylvania Supreme Court this coming year.  Not only will the court be addressing the consent to general jurisdiction clause under the auspice of the Dorman Commerce Clause, but it will have the chance to set a definitive rule by which to measure a corporation’s quality of contacts with a given county.  

These rulings have the potential to make Pennsylvania, and Philadelphia in particular, a major focus of personal injury litigation throughout the country.  These decisions will also place a renewed focus on the challenging venue, either by Preliminary Objection or removal.  Since a challenge to venue must occur within twenty days of service, and removal within thirty days of service, foreign corporation, registered to do business in Pennsylvania, must be judicious in reporting new lawsuits and obtaining defense counsel to make sure that all proper precautions are taken to ensure that case are not tried in an improper venue.