Results matching “randy maniloff”

Santa's liability issues - PointOfLaw Forum

Global warming lawsuits and insurance - PointOfLaw Forum

There have been a variety of meritless lawsuits against power companies on a theory that power companies contributed to global warming, global warming contributes to property damage, therefore power companies are liable. Randy Maniloff discusses the case of AES Corp. v. Steadfast Ins. Co., 715 S.E.2d 28 (Va. 2011), where a power company (now joined by a state trial lawyers association on a motion for rehearing) unsuccessfully argued that these lawsuits created a duty to defend from its liability insurer.

Around the web, January 13 - PointOfLaw Forum

Randy Maniloff has a new paper on bad-faith insurance claims in the August 5 issue of Mealey's Emerging Insurance Disputes. I discussed the issue with Marie Gryphon here.

The Kagan nomination, May 17 - PointOfLaw Forum

  • "This notion that [Justice Kennedy] can be led around by the nose by some clever person seems to me wildly off the mark." [Geoff Stone, quoted by Liptak @ NYT]
  • Miguel Estrada, Ken Starr, and Michael McConnell endorse Kagan. [AP/WaPo]
  • John Yoo doesn't. [Philadelphia Inquirer]
  • Senator Sessions predicts bumpy ride. [Reuters; WaPo]
  • Orin Kerr to advise Senator Cornyn on process. [Politico; Volokh]
  • The New York Times characterizes Kagan's support of free speech as "conservative." Conservatives might disagree, since Kagan took the position that the government could constitutionally ban books under McCain-Feingold, but it's interesting that, in three decades, the "liberal" and "conservative" stereotypes have switched places. [NYT]
  • White House asks for release of Kagan's White House papers. She's the first nominee who has an email paper trail. [AP]
  • Kremlinologists including POL favorite Randy Maniloff try to divine Kagan's opinions on insurance law. [PhillyDeal$]
  • Other Kremlinologists try to divine Kagan's role on the Court from her six Supreme Court arguments. [AP; Mauro @]
  • Stephen Carter's Kremlinology. [NYT]
  • Still others attempt to extrapolate from the Solicitor General's office choosing to defend a USDA regulatory decision on behalf of Monsanto against a bad Ninth Circuit decision. The article reflects precisely zero understanding of what the solicitor general is supposed to do. [Truthout]
  • "Which 'recently appointed' justice does Kagan have a beef with?" [Yahoo Newsroom]
  • Annotated guide to legal blogosphere commentary ignores Point of Law, but has lots of other links. [Conglomerate]
  • I'm not going to link to the racist site, which you can find on Google, but I'm accused of being part of a Jewish conspiracy to take over the Court through the Kagan nomination. So keep that in mind as you read my posts.
  • I don't think you can tell much about a person by what they wrote when they were twenty, but if you think otherwise, here's Kagan's Princeton thesis on radicalism, at least until Princeton issues another copyright claim. [Infidels; DeLong; Newsweek; Media Matters spin (via Playbook)]. Playbook points out that Chief Justice Roberts wrote about Bolshevism and Marxism in his senior thesis.

Top Ten lists -- and Mark Herrmann departs blogging - PointOfLaw Forum

Randy Maniloff is back with his annual survey (PDF) of the top ten insurance coverage decisions. At Drug and Device Law, James Beck offers the "Top Ten Worst Prescription Drug/Medical Device Decisions Of 2009". And speaking of Drug and Device Law, co-blogger Mark Herrmann is departing both the blog and the field of drug litigation to take over as vice president and chief counsel-litigation of Aon, the giant insurance brokerage firm. You can read his farewell post here, and Beck's intrepid vow to carry on without him (but with some additional Dechert blogging talent) here. Plus: reactions.

Federalist Society "Class Action Watch", May - PointOfLaw Forum

A few highlights from the new issue, dated last month:

  • Troy Yoshino and Patrick Perez, "Recent Wave of Case Law Rejects "Concealed Defect" Class Actions";
  • Karl Neudorfer and Erika Birg, "After Bridge: RICO Class Actions at a Crossing";
  • Randy Maniloff, "Fifth Circuit Expands False Claims Act Qui Tam Provisions in Time for Debate over Stimulus Package Fraud".

And other topics: CAFA & Katrina; certification in the Third Circuit; "foreign-cubed" actions; and mortgage-backed securities. The full issue is available in PDF form here.

Sotomayor and insurance coverage cases - PointOfLaw Forum

A surprise? Randy Maniloff at White and Williams finds that she's ruled mostly for insurers against policyholders (PDF) in coverage disputes -- not usually seen as the more "liberal" or empathy-driven way of doing things.

Top ten insurance coverage cases of 2008 - PointOfLaw Forum

Randy Maniloff (White and Williams), writing with Jennifer Wojciechowski, has another annual survey (PDF). His 2007 survey can be found here.

New featured column: Randy Maniloff on FACTA - PointOfLaw Forum

We've posted regularly at Point of Law on FACTA, the federal law on credit-card-receipt privacy that's given rise to a large volume of opportunistic litigation by and for the benefit of entrepreneurial attorneys. Now Randy Maniloff of White & Williams in Philadelphia, whose writings on insurance law we've often linked at this site, has written a new piece for us explaining why developments in insurance coverage litigation arising from FACTA claims could prove important in shaping the future course of litigation under the law itself.

By Randy J. Maniloff

FACTA litigation and all its abusiveness have been chronicled in detail at Point of Law. Here's the elevator pitch. Identity theft is a serious problem. So Congress set out to reduce the amount of financially sensitive paper floating around by prohibiting merchants from printing identifying credit and debit card information on receipts. But the Fair and Accurate Credit Transaction Act went awry.

When it comes to identity theft, the receipts to worry about are those that contain more than the last five digits of a customer's card number. However, the law was drafted in such a manner that it is violated if a merchant prints a receipt containing nothing more than a card's expiration date—even if the card numbers were properly truncated. It turned out that many merchants assumed that they were in compliance with FACTA by simply truncating their customers' card numbers on receipts, and didn't realize they needed to omit the expiration date as well. That seems like an honest mistake, and one without likely consequences most of the time: after all, knowing the card's expiration date will not enable identity theft if the would-be thief lacks access to sufficient accompanying card numbers. But the statute says what it says. As a result, many thought-to-be-complaint merchants found themselves being sued for issuing non-compliant receipts.

The question here was not whether stores would pay for someone's actual experience of identity theft. FACTA eliminates the need to prove actual injury by allowing for an award of statutory damages in an amount between $100 and $1,000 for a willful violation. That doesn't sound like much. But the law also allows for the recovery of attorney's fees—the magic provision that can turn lawyers into social activists. Not to mention that where there is one FACTA violation there are sure to be many (many, many). Enter the class action lawyers, coupon settlements and six-figure attorney's fees awards. See, for example, Palamara v. Kings Family Restaurants, 2008 U.S. Dist. LEXIS 33087 (W.D. P.A. April 22, 2008) (court approves FACTA settlement that awards each class member their choice of ice cream, soup, salad or homemade pie from the defendant's restaurant, with a value of up to $4.68. As for the plaintiffs' attorney's fees: an amount not to exceed $75,000).

There is nothing new in itself about this type of litigation business model. But most of the time the laws invoked in attorney's-fee-driven suits at least address some genuine wrong to be righted or injury to be recompensed, and the exploitation is (one hopes) just an unfortunate and unintended consequence. FACTA is different. It has been the Olympics of gaming the system. In many instances it serves no purpose whatsoever. Federal judges have said so; but they have also said that they are powerless to do anything about it.

FACTA: The Congressional Fix

FACTA is unique for another reason. Avoiding the political divisiveness that so often accompanies any effort at tort reform, Congress stepped in relatively quickly to close the loophole that allowed for basing liability on nothing more than an expiration date violation. That it did so with virtually no attempts at opposition—the House voting 407-0 and the Senate by unanimous consent—speaks volumes about just how abusive the litigation was.

This summer President Bush signed into law the Credit and Debit Card Receipt Clarification Act (Public Law No. 110-241). The Act states that any person who printed an expiration date on a receipt that was provided to a consumer between December 4, 2004 and June 3, 2008, but which otherwise complied with the card number truncation requirement, shall not be deemed in willful noncompliance with FACTA.

The Act does not do away with the basing of FACTA violation solely on expiration dates. Rather, by deeming that an expiration date violation taking place during this window will not be considered "willful," it does away with the customer's ability to recover statutory damages (which, of course, are the only damages that matter since actual damages can't be sustained). The Act went into effect, and poof, a boatload of FACTA cases disappeared.

FACTA - The Insurance Fix

The Receipt Clarification Act served to retroactively eliminate the potential for damages in likely hundreds of FACTA cases. But any merchant that commits an expiration date violation after the Act's effective date of June 3rd is back in the soup, subject to statutory damages if "willfulness" can be proven.

So despite Congress's efforts, FACTA lives on and the possibility of a second wave of litigation looms. At this point, however, it seems likely that those retailers that are still printing expiration dates on receipts are the proverbial mom and pops, such as—to cite personal experience—the kids' shoe store and deli in my neighborhood. The national franchise retailers and restaurants have already been put through the drill. If the remaining FACTA malefactors are small retailers and restaurants (which, small though they may be, might have printed thousands of non-compliant receipts at $100 to 1,000 a pop), then the availability of insurance to fund the litigation will likely become a crucial factor in determining how FACTA litigation evolves from here.

Because this litigation is driven by attorneys' economic self-interest, there will be far less enthusiasm for pursuing it if insurance proceeds are not available for FACTA damages and in particular for the attorney's fees needed to settle. If insurance money is available, FACTA will remain, as it has been, low-hanging litigation fruit. Plaintiffs will file suit and seek to settle, using as leverage the insurers' exposure to defense costs as well as the always-present risk of a runaway verdict. But it is much more difficult to reach a settlement with or collect a judgment from a small business when there is no insurer to deal with. Therefore, resolution of the insurance coverage questions will likely go a long way toward determining FACTA's future.

That process has now begun. When FACTA litigation first proliferated, many insurers faced the question of whether it posed a kind of liability included within the scope of commercial general liability coverage, especially as to the costs of defense. That assessment had to be undertaken without the benefit of case law on the subject. Now, at last, a FACTA coverage case has caught up to the litigation, with a Pennsylvania federal court issuing what is apparently the first decision to address insurance coverage for a FACTA action.

On September 29th, the Western District of Pennsylvania issued a decision in Whole Enchilada, Inc. v. Travelers Property and Casualty, No. 2:07-cv-1533, finding that no coverage was available to a policyholder under a commercial general liability (CGL) policy for an alleged violation of FACTA. The business in question, a restaurant in Pittsburgh, had provided the plaintiff in the underlying putative class action with an electronically printed receipt that included the expiration date of his credit or debit card. The question addressed by the court was whether coverage was available under the "Personal Injury" section of a CGL policy issued by Travelers Insurance to Big Burrito Holding Company.

Of note for insurance coverage mavens, the Travelers policy at issue initially contained a standard Insurance Services Office definition of "personal injury," which defined the term as "injury, including consequential 'bodily injury,' arising out of one or more of the following offenses:...e. Oral or written publication, in any manner, of material that violates a person's right of privacy."

However, the Travelers policy was amended by endorsement to define "personal injury" as "injury, other than 'bodily injury' arising out of one or more of the following offenses:...e. Oral, written or electronic publication of material that appropriates a person's likeness, unreasonably places a person in a false light or gives unreasonable publicity to a person's private life." (emphasis added).

The Whole Enchilada decision is lengthy (50 pages). In general, the court concluded that, based on the nature of a FACTA violation—stemming for a one-on-one transaction between customer and merchant—it does not involve the kind of public communication to which the terms "publication" and "publicity" refer. The money paragraphs are as follows:

Here, however, the Reed Complaint does not allege publication that gives unreasonable publicity to a person's private life. It does not allege that Whole Enchilada displayed the plaintiff's information to the public or took any action designed to disseminate the information to the public at large. Rather, the Complaint alleges factual allegations stating that the Reed plaintiffs' credit or debit card information was printed on a receipt that was handed back to them, in violation of FACTA. While the Complaint alleges that Whole Enchilada printed information, this Court finds it does not allege the kind of public communication to which the term "publicity" refers, thereby triggering coverage.

* * *
In the context of the factual scenario surrounding Whole Enchilada's alleged violation of this provision of FACTA, the Court's reasoning becomes clear. At the point of sale transaction, a cardholder gives his or her credit or debit card to the individual at the cash register. The credit information is exchanged between the cardholder, Whole Enchilada and the cardholder's bank. There is no violation of a privacy right, insofar as the cardholder willfully gives over his or her credit information to Whole Enchilada so that the information can be used to process the sale. This factual scenario does not meet the requirement of publicity under the policies.

Whole Enchilada. at 36-37.

The Whole Enchilada court addressed coverage under a non-standard definition of "personal injury," namely, publication of material that gives unreasonable publicity to a person's private life. But most FACTA claims will test whether coverage is available for "personal injury" that is defined as oral or written publication, in any manner, of material that violates a person's right of privacy. However, while it addressed "publicity," the Whole Enchilada court also concluded that FACTA does not violate a person's "privacy right," when such policy language was not even before it.

Given the court's additional conclusion that a FACTA violation does not involve "publication" and its determination that the "statutory damages" being sought for a FACTA violation are not compensatory, and, therefore, do not satisfy the policy's "damages" requirement, Whole Enchilada is broad enough to encompass those claims that are brought under the standard ISO definition of "personal injury." That is the take-away point from the case. Also of great practical importance for the future, insurers have been adding specific FACTA exclusions to their policies and ISO has such an exclusion in the pipeline. So plaintiffs' lawyers are on notice that likely wellsprings of insurance money are drying up.


On one hand, Whole Enchilada was a defeat for policyholders. Even those defendants that had their FACTA claims extinguished by the Receipt Clarification Act likely still have claims for defense costs and would have benefited from a finding of coverage. For such companies, there is no way to put a positive spin on the decision. On the other hand, if a second wave of FACTA claims is on the horizon aimed at small companies that have done no real injury to consumers, then the lack of insurance availability may help to prevent the claims from being brought in the first place. When it comes to collecting a settlement or judgment, plaintiffs seek the path of least resistance, most commonly via the insurance route. But if that road is blocked, plaintiffs may simply decide that the risk of being unable to settle a FACTA case or collect a judgment is too great and turn back. That would be an ultimate outcome much to be desired for insurance buyers, for insurers, and for our society as a whole.

Randy J. Maniloff is a partner at White and Williams, LLP in Philadelphia. He writes frequently on insurance coverage topics for publications that include Lexis/Nexis Mealey's Insurance.

Congress's FACTA patch - PointOfLaw Forum

Following an outcry from the business community, lawmakers on Capitol Hill claim to have fixed the notorious "gotcha" statute on credit card receipt privacy, which entrepreneurial plaintiffs had used to gin up gigantic class actions with no proof of actual harm. But as Randy Maniloff points out in a WLF paper (PDF), the fix actually leaves retailers, especially the unsophisticated mom-and-pops, wide open to another wave of opportunistic suits down the road.

Around the web, February 11 - PointOfLaw Forum

  • New York officials move to ban unlicensed private ownership of chemical/radiological detection equipment [Volokh, Village Voice]
  • Insurance coverage litigation highlights of 2007 make a better read than anyone had a right to expect [Maniloff/Lexis via Rossmiller, also podcast]
  • Heartburn after a hot-chili meal, or cardiac distress? Better to err on the side of an ER referral [Starr/Cortlandt Forum via KevinMD]
  • There's a time for the Supreme Court to weigh policy considerations in securities law, and a time for it not to [Bainbridge]
  • PBS airing "Kingdom", series on small-town British lawyer [Cathy Gellis]
  • "Incoherent mess", "easy-to-spot falsehoods and silly exaggerations": Felix Salmon tells us exactly what he thinks of Ben Stein's latest [Portfolio]

Top 10 insurance coverage cases of 2007 - PointOfLaw Forum

David Rossmiller (who continues to have must-read Scruggs coverage above and beyond what the newspapers and other legal blogs are reporting), has Randy Maniloff's Top 10 cases of 2007.

More on FACTA - PointOfLaw Forum

Randy Maniloff has a take on the emerging insurance issues related to FACTA litigation. And Richard M. Hoffman and Katherine K. Ivers write on the subject for WLF. Earlier: Oct. 31.

The Fifth Circuit gets it right - PointOfLaw Forum

The Fifth Circuit Court of Appeals has overturned the district court's determination last year that flood exclusions in the homeowners policies of various insurers were ambiguous and unenforceable in relation to New Orleans canal breaches.

The case is called In Re Katrina Canal Breaches Litigation, and one astute commentator, Randy Maniloff, had labeled the underlying decision by Judge Stanwood Duval In Re Breach of Common Sense. Judge Duval's thinking was that the standard flood exclusions in most policies did not specifically refer to the type of flooding that occurs because of man's negligence in designing levees that crumble. He did acknowledge that they would exclude traditional "natural" flooding.

However, as I point out in a post today at my Insurance Coverage Law Blog (where a pdf of the appellate court's decision is available), the Fifth Circuit sliced right through this tortured reasoning, and said that human negligence was not really a cause of the flooding at all, in the sense that word is understood in analysis of first-party property insurance losses. The Fifth Circuit also said that once this type of negligence analysis gets started it has no logical end: due to extent of human flood control measures such as dams and levees, many if not most floods can be said to involve the human hand. This is an important decision that is in keeping with the interpretation of flood exclusions by the overwhelming majority of courts that have considered this policy language.

Breach of common sense - PointOfLaw Forum

When it was handed down late last year, the decision by federal Judge Stanwood Duval in In re Katrina Canal Breaches Consolidated Litigation was widely greeted with amazement. Judge Duval declared the flood exclusions in a number of insurers' policies ambiguous (and therefore not enforceable) because, he said, they did not clearly exclude flooding from man-made sources like New Orleans' canals, as opposed to floods that are "natural occurrences." Never mind that what caused the New Orleans canal breaches was a natural occurrence called Hurricane Katrina. Randy Maniloff has written an analysis of judicial restructuring of contracts that focuses on the case, which he renames "In re: Breach of Common Sense." Interestingly, he notes that in a prior case with lower stakes, Judge Duval appeared to come out on the other side of the question. See prior posts by Ted Frank on this case here and here.

Randy Maniloff wins the award for best one-liner so far:

Mr. Hood�s feelings toward State Farm are reminiscent of that great joke recounted by Alvy Singer in Woody Allen�s �Annie Hall�: �The food in this place is really terrible. Yes, and such small portions.�

David Rossmiller comments. Speaking of circuses, State Farm has moved to recuse Judge Senter and there has been supplemental briefing in Woullard regarding the settlement class action. David Rossmiller's blogging is on the case. Earlier POL coverage: Feb. 16 (State Farm withdrawal); Jan. 30 (Woullard); Jan. 12 (Broussard).

Via Rossmiller, Randy Maniloff has a lengthy article on Judge Senter's rejection of the Katrina settlement (Jan. 27; see also Jan. 23 and earlier Katrina coverage). Highlights plus my comments:

  • The settlement leaves open 200 non-Scruggs Mississippi claims pending in court, as well as those of any opt-outs, meaning State Farm's liability wasn't even being capped by the settlement. Maniloff doesn't mention it, but previous mass tort settlements have started a feeding frenzy where lawyers will have an incentive to encourage further opt outs. (Maniloff does not discuss where the statute of limitations fits in to opt-outs: however, if a class is certified, it might imply American Pipe tolling, which could mean that State Farm ends up buying more claims for its trouble than it's settling.)
  • The settlement has put pressure on Louisiana Attorney General to match the price achieved in Mississippi. I note that Jim Donelon hasn't brought the same sort of extortionate illegitimate criminal investigation that Jim Hood did, but State Farm is creating the perverse incentive to do so.
  • Senter denied class certification in Woullard, just as he did in Guice. While settlement class certifications are easier, this is still a hurdle for the parties that probably was not fully contemplated in the drafting of the settlement papers.
  • Maniloff correctly singles out Judge Senter's statement that "I will never approve a procedure that would allow the resolution of claims under standards that are, or may be, different from or contrary to this Court�s prior rulings" as especially problematic. It simply is not the case that parties are required to disregard the possibility of appellate reversal when reaching settlement. One hopes that Senter was simply sloppily referring to the disparate treatment of the Scruggs clients from the unrepresented class members (a not implausible interpretation, given the fact that Senter granted interlocutory appeal in Tuepker), but if Senter is demanding that his decisions be treated as immutable law for any settlement framework, it is difficult to see how the parties can settle until the Fifth Circuit resolves at least some appeals of Senter rulings.
  • Speaking of likely reversals, Maniloff is justifiably critical of the Broussard directed verdict (Jan. 12).

Another view of Leonard v. Nationwide - PointOfLaw Forum

Attorney Randy Maniloff points us to his analysis of Katrina insurance litigation in the September 12 Mealey's Litigation Report. Maniloff (who generously quotes us) notes that Judge Senter's analysis of anti-concurrent causation language contradicts that of the Mississippi state courts in Boteler v. State Farm Casualty Insurance Company, 876 So. 2d 1067 (Miss. Ct. App. 2004), and has more to say about Judge Senter's opinion in the Guice class action that was overshadowed by his Leonard decision. More on Leonard from me Aug. 24 (AEI) and Aug. 17; from Walter, Aug. 18 and Aug. 16 (as well as in the Wall Street Journal); and Martin, Aug. 17.