Mr. Ehrlich briefed and argued this case in the U.S. Supreme Court. In a unanimous decision the Supreme Court adopted the position advocated by Mr. Ehrlich, and limited ERISA’s preemptive scope by making ERISA plans subject to state common-law rules of insurance regulation, which generally benefit consumers. The Ward decision benefited more than 80 million people who obtained their health insurance, life insurance, or disability insurance through their employer.
On February 15, 2012, the California Court of Appeal issued its opinion in Kaiser Foundation Health Plan, Inc. v. Superior Court (Rahm)(2012) __ Cal.App.4th __. The opinion holds that a health-care service plan like Kaiser is not subject to the protection of section 425.13 of the Code of Civil Procedure, which prohibits punitive-damages claims against health-care providers without prior court permission. The court held that section 425.13 did not apply to claims against health plans, which are not considered health-care providers under California law. The court also held that the allegations of the plaintiff’s complaint were sufficient to allege a bad-faith claim against Kaiser in its role as a health plan, and was not merely an attempt to hold the health plan vicariously liable for the medical negligence of the doctors it employed. In the Rahm case, Anna Rahm, then 17, was complaining to Kaiser doctors for months about unrelenting back pain. Her family repeatedly requested that Kaiser perform an MRI to determine the cause of the pain, but the Kaiser physicians delayed. As a result, they did not discovery that Anna was suffering from osteosarcoma, and she lost her leg, and part of her pelvis and spine.
In a unanimous decision the California Supreme Court reversed a JNOV ordered by the Court of Appeal in Cabral v. Ralph’s Grocery Co. The decision reinstates a wrongful death judgment on behalf of the family of Adelmo Cabral, who was killed when his car veered off the freeway and collided with the back of a Ralph’s tractor-trailer rig that had been parked 16 feet from the freeway while its driver had a snack.
The jury held that Ralphs’ was 10% at fault for the crash, but the appellate court reversed, finding that the crash was “unforseeable” and that truck drivers therefore owed no duty to passing freeway motorists in the manner in which they parked their trucks as long as they were out of the travel lanes. The Supreme Court rejected all of the appellate court’s reasoning. The decision is important because it expressly curtails the practice used by trial and appellate courts with increasing frequency to decide negligence cases as a matter of law by finding that the defendant owed the plaintiff no duty of care on the particular facts of the case.
The Court held that the decision that no duty of care is owed — which is more accurately framed as a finding that an exception should be made to the general duty of care imposed on all persons by California law — “is to be made on a more general basis suitable to the formulation of a legal rule.” As a result, the Cabral decision will mean that more negligence cases in California will be decided by juries, based on the specific facts of the case, and not by courts based on a finding that no duty exists.
Read The Decision (.pdf)
On August 11, 2010, Jeffrey I. Ehrlich, principal of The Ehrlich Law Firm filed a depublication request (L.A. Checker Cab Cooperative, Inc. v. First Specialty Ins. Co.) on behalf of the Consumer Attorneys Association of California. On October 27, 2010, the California Supreme Court granted the request for depublication in the L.A. Checker Cab decision.
Depublication of Court of Appeal decisions by the Supreme Court of California used to be a common practice, but in recent years has become quite uncommon. Fewer than 12 cases a year have been ordered depublished in the last few years.
The significance of the depublication of LA Checker Cab is this: the decision effectively eliminated all insurance coverage in California for any claims of negligent supervision or negligent hiring, because the court held that such claims did not qualify as an “occurrence” that is necessary to trigger coverage. Depublication of the decision means that the decision cannot be cited as precedent in California courts, and therefore California trial courts are not required to follow it.
Read Depublication Request: L.A. Checker Cab Cooperative, Inc. v. First Specialty Ins. Co.; 186 Cal. App. 4th 767, No. B213948 (Second District iv. One); Order published: July 13, 2010
A unanimous California Supreme Court held that a “severability of insurance” clause made a homeowner’s liability policy ambiguous where the insurer sought to rely on an exclusion that withdrew coverage for all insureds under the policy based on the intentional acts of one insured. Plaintiff Scott Minkler holds a $5 million judgment against David Schwartz, who molested him, and against David’s mother, Betty, for negligently failing to stop the wrongful conduct. Betty’s insurer rejected coverage, arguing that the intentional-acts exclusion in the policy, which withdrew coverage for any claim arising from the intentional acts of “an” insured, applied to the claims against Betty because David’s conduct was intentional. The Supreme Court adopted the approach advanced by the Ehrlich Law Firm, finding that the policy’s severability provision, which states that “this insurance applies separately to each insured” would lead a reasonable insured to conclude that he or she would be treated as the only insured under the policy. Because most liability policies have severability clauses, the Minkler case may substantially broaden coverage in California for failure-to-supervise claims. Minkler v. Safeco (2010) __ Cal.4th __.)
Ehrlich Law Firm prevails in California Supreme Court on case involving important issues of California civil-writ practice and procedure. In a closely-watched case involving civil-writ procedure in California, the California Supreme Court adopted the position advocated by the Ehrlich Law Firm, and held that appellate courts can properly issue so-called “speaking” or “suggestive” Palma notices when they are inclined to issue a peremptory writ of mandate in the first instance. A Palma notice informs the parties that an appellate court is inclined to grant a peremptory writ in the first instance.
Waters, Kraus & Paul, with one of the premier asbestos-litigation practices in the U.S., hired the Ehrlich Law Firm to argue an important products-liability case, O’Neil v. Crane Co. in the Court of Appeal, Second District, Div. 5.
The issue in O’Neil was whether sailors injured by asbestos released during the maintenance of valves and pumps that were manufactured to contain asbestos within them, and that were insulated with asbestos, could be held liable on theories of strict products liability and negligence, even if the asbestos material in the equipment had been replaced with other asbestos material during the product’s life.
In Taylor v. Elliott Turbomachinery Co., Inc. (2009) 171 Cal.App.4th 564, the Court of Appeal , First District, held that the manufacturers could not be held liable because the asbestos was not “their” product.
Ehrlich convinced the court not to follow Taylor, and in a written decision the court held that Taylor had been wrongly decided. (O’Neil v. Crane Co. (2010) 177 Cal.App.4th 1019.) The Supreme Court later granted review to resolve the conflict between the positions advocated in O’Neil and Taylor. Ehrlich is expected to argue the matter in the California Supreme Court.
Judge David Mintz had been fighting lung cancer for years. When it recurred, his doctors said his only chance was a treatment called radio-frequency ablation (“RFA”). Blue Cross was the third-party administrator of Mintz’s CalPERS health plan. Blue Cross denied the claim for RFA on the grounds that it was excluded as experimental. But it failed to notify Mintz that under state law, the plan was required to pay for experimental treatment if an independent medical review determined it would be more beneficial for the patient than conventional treatment. Mintz was unable to obtain RFA, and died while his lawsuit was pending. The trial court dismissed his case on demurrer, and the Court of Appeal reversed, finding that third-party administrators can be held liable for their negligent administration of the plan. Mintz v. Blue Cross of California, 172 Cal.App.4th 1594 (2d Dist. 2009).
Insurance companies in California can no longer prevail in bad-faith lawsuits brought by their policyholders simply by showing that there was a “dispute” about whether the insurer should pay the claim. In Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, the Supreme Court reined in the so-called “genuine dispute rule” that had become the insurance industries’ most potent defense in bad-faith cases, holding that the rule only applied at the summary-judgment stage, and then only in cases where a jury would be unable to make a finding that the insurer had acted unreasonably.
The Wilson ruling makes it much harder for insurers to obtain summary judgment in bad-faith lawsuit.
January 2007 – The Court of Appeal in Los Angeles has reversed a trial court’s order requiring that Mary Medeiros arbitrate her claims against Health Net, arising from the company’s failure to provide her with timely medical care. Even though Health Net’s enrollment form failed to comply with the mandatory disclosure requirements concerning arbitration clauses, the trial court ordered the case to arbitration.
The Ehrlich Law Firm filed a writ of mandate, which was granted in a published opinion. (Medeiros v. Superior Court (Health Net) (2007) 146 Cal.App.4th 1008. Medeiros is a victory for public employees, because it held that health plans that provide coverage through public agencies must comply with the arbitration-disclosure requirements in the Health & Safety Code and the Insurance Code.