TRANSPORTATION SEMINAR

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1 TRANSPORTATION SEMINAR 2011

2 2011 Transportation Seminars The Harmonie Group (ALL RIGHTS RESERVED) Working Together: Cost-Efficiency in Managing Litigation and Moving Cases Forward...1 Early Resolution of Trucking Claims...6 Proposed Hours of Service Rule Changes Put More Burdens on Commercial Drivers...9 Evidence of Pre and Post Accident Drug Usage, Addition and the Implications of Prescription Medications in Brain Injury Cases Exhibits An Update on MMSEA 2007: Current State of the Law and Best Practices in the Non-Workers Compensation Case Exhibit...44 Evidentiary Issues in Trucking Litigation Graves Amendment: Application to Leased Operations, Rental Cars and the Trucking Industry A Step by Step Guide to Managing TBI Claims Owner-Operators or Employees: The Transportation Industry Begins a Counter Attack on the Plaintiff Bar and the Government Over Independent Contractor Misclassification Trucking Accident Lawsuits in the Post-CSA Courtroom Pre-Suit Investigation: Creative Options for Gathering Information Outside of Discovery Detecting and Reporting Insurance and Claims Fraud Taking Control of the Steering Wheel in Negligent Hiring, Retention, Supervision and Entrustment Claims in Trucking Litigation

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4 Working Together: Cost-Efficiency in Managing Litigation and Moving Cases Forward Rob Griffin Cranfill Sumner & Hartzog LLP I. Working Together: Transportation Company/Insured; Insurance Carrier/Claims TPA; Attorney A. Early Recognition of Responsibilities In most claims, there are three separate entities (or some combination of those three entities) involved in the investigation and defense of the claim. First, there is the trucking or transportation company itself. The company is usually insured in some manner, although the company may have a large self-insured retention such that the claim may be handled in-house. Secondly, in most cases, there is an insurance company or a claims-person involved in the matter. There may be a separate insurance company providing coverage for the trucking company, or there may be a claims person for a third-party administrator on behalf of the trucking company. In some instances, the trucking company itself handles the claims with in-house adjusters. Third, at some stage of the claim, an attorney or attorneys may be involved. It is extremely important that these entities have a good working relationship in order to effectively manage the claim and move it forward toward the desired resolution. In furtherance of this goal, these entities should seek to recognize and define each of the respective responsibilities at an early date. Each of these entities has rather distinct responsibilities in the investigation and defense of most claims. For example, the insurance carrier/claims-person will typically coordinate the initial investigation, including the hiring of independent adjusters, taking statements, gathering or obtaining accident documents, photographs, etc. In some claims, it may be necessary to involve defense counsel at an early date to assist in the investigation, or even to direct the investigation, sometimes for purposes of maintaining privilege. Another important responsibility of the insurance carrier is to set reserves. The claims-person will also make decisions, or be involved in decisions, regarding the hiring of a defense attorney, and perhaps even expert witnesses to assist in the defense of the claim. The next entity is the insured trucking/transportation company. If the insured handles its own claims, it will obviously be involved directly from the outset. However, even if the claims investigation is being handled by a separate insurance carrier, the insured company itself is a vital component of any investigation. The trucking/transportation company will be the repository of much key information. For example, the insured should have possession of important documents such as personnel/employment records, driver qualification files, logs, electronic data, information regarding the tractor-trailer or other equipment involved in the accident, maintenance history, etc. The insured trucking company is also the vital contact between the insurance carrier and/or attorney and the truck driver. The defense attorney will also play a significant role in the claims process at some stage. As noted above, the attorney may be retained right after the accident to assist in the investigation. The retention may occur later in the investigation process, or only after suit has been filed. Consideration must be given to how defense counsel is selected, and who is in charge of that Page 1

5 process. Many times, the selection is made by the insurance carrier, but in other instances, the trucking/transportation company retains the right to refuse its own counsel. The defense attorney has knowledge and expertise regarding the substantive law to be applied to the accident. Perhaps as important, the defense counsel should have personal knowledge regarding the jurisdiction and local venue of the accident. If the claimant already has an attorney, defense counsel should be familiar with the attorney. This information, while intangible, is extremely important in the attempts to handle and resolve the claim. B. Advanced Planning It is advised that the entities above engage in early and meaningful discussions regarding each entity s respective responsibilities before an accident ever happens. There should be discussion regarding the relationships, responsibilities, risk management, and how a claim will be handled. If this planning is not done in advance, then such decisions will take place, in real time, following an accident. These decisions need to be thought out ahead of time, rather than under the stress and pressure of dealing with a serious or catastrophic accident. C. Cooperation and Communication While this topic may seem obvious, it is far too important to ignore. It is vital that all of these entities cooperate with each other, and engage in effective communication regarding their joint and respective responsibilities and activities in the claims process. Each entity needs to be in agreement regarding who is performing which particular activity in furtherance of the collective goal in the defense of the claim. Furthermore, there must be regular communication between the entities so that everyone knows what everyone else is doing. The importance of cooperation and communication in the defense of the claim cannot be overstated. II. Cost-Efficiency in Managing Litigation A. Early Assessment of Exposure hour Emergency/Accident Response Teams These teams allow carriers and companies to begin gathering vital information within hours or minutes of an accident happening. This is vital to developing an assessment of exposure as early as possible. These teams can assist companies and carriers in any number of ways, including accident site response; on-site investigation management and control; extending attorney-client privilege to investigation matters where possible; arranging ancillary services such as adjusters, photography, videotapes, criminal defense, reconstructionists, etc. Many law firms have such teams available upon request. 2. Evidence Preservation It is essential that the preservation of evidence begin right after the accident. If any evidence is not preserved, it may lead to future spoliation claims from the potential plaintiff s attorney. The trucking company must be advised immediately as to what evidence and information needs to be preserved. Such evidence may include the tractor-trailer itself (at least until the plaintiff s attorney has had an opportunity to inspect and photograph the truck, or for at least a reasonable period of Page 2

6 time before repairs are made); electronic data from the truck, such as ECM data, GPS data, etc.; driver logs; driver qualification files and personnel/employment records; documents related to the trip on which the accident occurred; maintenance/repair records for the tractor-trailer. 3. Experts It may be necessary to hire an expert almost immediately after the accident. The most frequent type of expert retained early in an investigation is an accident reconstruction expert. As further investigation is performed, other experts may be necessary, including industry safety experts, medical experts, etc. 4. Investigation It may be necessary to hire an independent adjuster to travel to the scene of the accident immediately. This adjuster may be in charge of things such as witness statements, photographs, etc. It is also important to utilize today s technology to perform quick and thorough investigations regarding potential plaintiffs and even the trucking company and driver. The Internet allows ample opportunities for background investigations, criminal and traffic record checks, etc. In addition, there are numerous social media outlets (such as Facebook, MySpace, Google, Twitter, etc.), which can provide a wealth of information regarding potential claimants. Be advised, however, that this is an evolving area of law, and most states will not allow an adjuster or attorney to friend a plaintiff surreptitiously in order to obtain information regarding a claim. 5. Venue/Jurisdiction It is extremely important, as you assess exposure, to factor in the jurisdiction and venue of your claim. If the trucking company or insurance carrier is not familiar with the locality, you are advised to contact your local defense counsel for information in this regard. Similarly, it is very important to obtain information regarding the plaintiff s attorney, once such representation is known. B. Collaboration Between Claims/Persons and Attorneys 1. Further Assessment of Liability, Damages, Exposure As more information is obtained during the investigation, there should necessarily be further and additional assessments of all issues, including liability, damages, and monetary exposure. Prompt communication regarding new information and developments will help everyone move more expeditiously to a cost efficient resolution of the claim. 2. Goals It is important that all of the entities discussed above determine collectively, as soon as possible, the actual goals of the investigation and management of the claim. For example, if it appears that there is clear liability on the part of the potential defendant, the goal should be to gather necessary information to evaluate the claim and resolve it as soon as possible. If there are liability defenses, all relevant information should be gathered and factored into the analysis of damages so that decisions can be made about the ultimate goal of the defense. If the evidence is overwhelming in favor of the Page 3

7 defense, the result may be a denial of the claim. If the liability evidence is unclear, it may be that the claims-person attempts to resolve the case on a diminished value basis. 3. Reserves The above discussions regarding early assessment damages and determination of goals apply equally here. All information must be gathered and assessed as soon as possible, so that the claims adjuster may effectively evaluate and set reserves on the claim. III. Moving the Case Forward A. Pre-Suit Opportunities 1. Direct Settlement Negotiations If the goal is to resolve the claim as expeditiously as possible, there may be opportunities to negotiate a settlement prior to suit being filed. It may be possible to negotiate directly with the plaintiff s attorney, or even the potential plaintiff if such plaintiff is not represented. 2. Pre-Suit Mediation Participation in a mediated settlement conference prior to the filing of suit has become more prevalent in the past few years. This generally happens only in very serious or catastrophic claims, and trucking/transportation claims often fall into this category. While this is an increasingly popular and effective tool for moving the case to resolution, it is important to keep several things in mind. First, there must be sufficient information exchange prior to mediation to make the conference meaningful. Since no suit has been filed, there is no discovery performed, and therefore information exchange is informal and voluntary. It is vital that the claims-person or attorney receive enough information to effectively evaluate the case prior to a mediation. Another factor is the timing of the mediation. This factor relates to the first item above, in that no mediation should be conducted before there has been sufficient investigation and information gathered to adequately evaluate the claim. Otherwise, the mediation will not be effective, and could even be counter-productive to the goal of resolution. Finally, the selection of an effective mediator is significant. If the claims-person or trucking company representative is not familiar with local mediators, they should contact and rely upon local defense counsel in making this decision. 3. Alternative Dispute Resolution B. LITIGATION 1. Pleadings and Discovery If the claim is denied, or if the case cannot be resolved prior to litigation, then suit will ultimately be filed. Even though a lawsuit has now been filed, it is equally important to remain focused on moving the case forward as quickly and effectively as possible. Defense counsel should file the Answer as soon as possible, and serve written discovery along with the Answer. Depositions should be taken as soon as possible, after appropriate discovery information has been received. Page 4

8 2. Mediation/ADR It is likely that a mediated settlement conference will be required as part of the litigation, even if the parties have conducted a pre-suit mediation and were unsuccessful. It may be that appropriate discovery and depositions allow the parties to move forward with a more successful mediation as part of the formal litigation. 3. Trial Rob Griffin Cranfill Sumner & Hartzog LLP 5420 Wade Park Boulevard, Suite 300 Raleigh, NC P: (919) E: Page 5

9 Early Resolution of Trucking Claims Richard Mincer and Kara Ellsbury Hirst Applegate, LLP You can t talk your way out of something you behaved your way into. You have to behave your way out of it. Doug Conant (CEO of Campbell Soup) If passion drives you, let reason hold the reins. Benjamin Franklin In business, you don t get what you deserve, you get what you negotiate. Chester Karrass One might as well try to ride two horses moving in different directions, as to try to maintain in equal force two opposing or contradictory sets of desires. Robert Collier Human beings love to be right. When a person is willing to give up being right, a whole world of possibilities opens up. Pete Salmansohn If you choose not to decide, you still have made a choice. Rush The more we sweat in peace the less we bleed in war. Vijaya Lakshmi Pandit Step 1: Thoroughly investigate the accident and determine exposure a. Retain an attorney that knows and shares your goals. b. Thoroughly investigate the accident see The Harmonie Group s Transportation Accident Investigation Checklist. Call the THG 24 Hour Emergency Response Hotline for competent counsel and experts in every jurisdiction. c. Are there any other sexy, even if not necessarily relevant, issues that might influence a jury s determination of your liability if not excluded at trial? Step 2: Determine your probable liability. a. Determine the extent of your probable liability. i. Fact specific, case-by-case determination. ii. Understand the substantive law of the jurisdiction comparative fault, joint and several liability, rules of the road, punitive damages, statute of limitations, wrongful death law, etc. iii. What is the probability that you will be allocated fault at varying percentages. iv. Evaluate potential co-defendants as you do yourself. b. Is this a dangerous case? c. Is this a punitive damages case? Step 3: Estimate damages a. Understand the jurisdiction s law governing damages, both compensatory and punitive, if appropriate. b. Gather all available evidence of special damages. i. Medical bills Page 6

10 ii. Wage records iii. Property damage and other out-of-pocket c. Calculate general damages i. Go with your gut your first impression may be the most accurate ii. Multipliers may prove to be a useful first step, but are not the be-all, end-all. iii. Other relevant factors: 1. Severity of injury 2. Nature and probable duration of the pain 3. Likelihood the injury will cause future disability, disfigurement, loss of function, etc. 4. Likeability (or not) of claimant and driver. 5. Get a lay opinion from a friend, family member, or bartender. d. Determine a range of probable damages before an allocation of fault. e. Is this potentially a punitive damages case? Are there any skeletons in the closet that need to stay there? Step 4: Determine settlement value a. Determine the reasonable range of your exposure based on the reasonable range of your allocation of fault multiplied by the reasonable amount of gross damages. b. Research recent verdicts in similar cases. c. Have a frank discussion with counsel about the cost of defense through certain mileposts and trial. d. Have a frank discussion with counsel about the cost of defense through certain mileposts. e. Additional cost considerations: i. What is the likelihood you will prevail on a dispositive motion really? ii. Is there a unique legal issue that will require extensive research and briefing? iii. What experts will you need really? iv. Likelihood of future litigation on this occurrence even if you settle with this claimant? f. Non-economic considerations: i. Negative media coverage. ii. Creating a perception you are willing to settle any claim. iii. Business considerations. iv. Any counterclaims/cross-claims related to the same occurrence? g. Are there possible tenders of defense/indemnity to or from you? Keep Your Eye On the Ball The main reason to settle early is to save defense costs, which can sometimes reach six figures in a hurry. Additionally, certain potentially inflammatory cases will only get more expensive once you have to answer discovery. Full value now is often a lot less than full value later. Moreover, few MVA cases are likely to be dismissed on a dispositive motion. Make a realistic determination of your probable exposure and react accordingly. Don t step over dollars to pick up dimes. Don t get too concerned with conventional wisdom. You don t have to wait for a demand. You can bid against yourself in the right situation and survive. A realistic number now doesn t necessarily set a floor unless you let it. If your early evaluation suggests you should aggressively pursue early settlement, then do it aggressively. Page 7

11 At the same time, realize there are some cases that just need to be tried and the reasons for this are as numerous and varied as the reasons to settle early. If that is the case, accept it, keep your resolve, and discuss the best way to aggressively yet economically defend the case. Understand that the legwork necessary to make an informed decision about early resolution puts you that far ahead of the game if the case must be defended through trial. You are not liable just because you are the truck really. 10 REASONS Cases That Need to Settle Early Don t Assuming this case isn t that bad. If it s defensible, stop here. Assuming you are not at fault. Assuming the claimant isn t hurt that bad. Therefore, failing to thoroughly investigate the claim. Hiring a leaf-raker for an attorney. Showing off your conventional wisdom. Eager to please or not wanting to be the bearer of bad news. Pride Stepping over dollars to pick up dimes. Lack of courage. Richard A. Mincer Hirst Applegate, LLP 1720 Carey Avenue, Suite 200 PO Box 1083 Cheyenne, WY P: (307) x213 E: Page 8

12 Proposed Hours of Service Rule Changes Put More Burdens on Commercial Drivers Kenneth P. Abbarno Reminger Co., L.P.A. On December 29, 2010, the Federal Motor Carrier Safety Administration ( FMSCA ) published a proposed set of rule changes regarding Hours of Service ( HOS ). The public comment period closed March 4, The FMCSA will now review the comments and issue final HOS rules on July 26, 2011 which will probably be effective several months later. The stated reason behind the changes is to give drivers more flexibility, but they may have the unintended consequence of unnecessarily complicating their logs and may lead to a reduction in hours. The FMCSA website has a detailed summary of all rule changes. This article will focus on three of the more controversial proposed rule changes: 1. The 34 hour restart; 2. Possible reduction of daily driving time from 11 hours to 10 hours; 3. One Hour Rest Break These are complicated changes to the HOS rules that can result in fines to the employer and limit a driver s total driving hours during a seven day period. 34 Hour Restart Restrictions The FMCSA kept the 34 hour restart timeframe, but restricts how a driver can use their time between a restart. Under the new rule a driver must now have two rest periods between midnight and 6:00 am before restarting his HOS. This may have the unintended result of removing tractor trailors from the road at night and placing them on the road during the day when traffic is already heavy. The mandatory midnight to 6:00 a.m. rest affects anyone s work week that begins before 6:00 a.m. For example, if a driver typically begins his work week at 5:00 a.m., he would need to eliminate two days of his work week to comply with this requirement. Alternatively, he would need to start his work day after 6:00 a.m. to be in compliance with the new regulations. It does not make any accommodation for drivers that start their day earlier than most of us. This rule will also impact long haul drivers. They will need to adjust their schedule and drive through the heavier traffic during the day, or add extra evenings to their trip. For example, if a driver finishes work and arrives at a rest location on Monday at 1:00 AM, he is penalized for beginning a 34 hour restart. If the rest break starts at 1:00AM, he will not have accumulated two consecutive Midnight to 6 AM periods until Wednesday at 6:00 AM, 53 hours later. He has lost 19 hours of productive work time. There are traps for drivers in the revised start time rule that can also result in fines for the company. Drivers can only use the restart provision once in 168 continuous hours (7 days). Drivers must designate which restart applies if they have more than two. This is important because it affects how Page 9

13 they account for their time after the restart. This can occur if the driver is at the end of the 70 hour cycle, uses a 34 hour restart, drives the next day and then uses another 34 hour restart. Probable Reduction from 11 to 10 hours driving time per Day The current proposed rules allow a driver 11 hours driving time after a 10 consecutive hours off duty, but the FMCSA indicated they prefer to reduce it from 11 to 10 hours of driving time. This reduction in conjunction with the other changes will not only reduce the work day, but can reduce a drivers work week. One Hour Rest Break While the FMCSA s says it is keeping the 14 hour rule, it effectively reduces it to 13 hours in a driving window by requiring one hour rest break. The 14 hour driving window can be extended two times in a seven day rolling period, but the 11 (or 10 hour if reduced) listed above hour driving maximum remains. This simply means the driver can take a three hour break instead of one hour break if using the 16 hour window. This proposal has the possibility of reducing a driver s hours, increasing the number of drivers needed for comparable deliveries and ultimately increasing costs. If a driver makes a delivery and is unable to be relieved from all work responsibilities, he cannot use this time to satisfy the required break. He will then have to schedule the break either before or after arriving at the customer and further limit his available work time. These proposed changes are another reminder to drivers and motor carriers that all must remain constantly vigilant in monitoring a driver s on-duty, driving and off duty time and record the same with precision and accuracy. Kenneth P. Abbarno Reminger Co., L.P.A Midland Building 101 Prospect Avenue West Cleveland, OH P: (216) E: Page 10

14 Evidence of Pre and Post Accident Drug Usage, Addition and the Implications of Prescription Medications in Brain Injury Cases Keith Harris Braff, Harris and Sukoneck Closed head injuries can lead to a gamut of medical, neurological and psychological impairments. There is no universally accepted definition of a closed-head injury or any exhaustive universal acceptable list of symptomology. In certain instances even mild injury can lead to allegedly significant and permanent impairment and there is a medical school of thought that even absent definitive diagnostic evidence, an individual may still be suffering from the results of a closed head injury. The inspecific nature of the diagnosis and the inexactitude of any list of comprehensive symptoms create challenges from a legal perspective in terms of defending claims involving closed head injury. In cases of severe head injury the causally related conditions which arise are non-objective in nature and more readily proven or disproven. Individuals with serious head injury may demonstrate physical indications of closed head injury such as skull fracture, positive CT/MRI studies, impaired muscle tone, tremors, apraxia and disturbed sleep patterns. In milder cases where, for example, there is no post accident loss of consciousness, the range of symptoms is much greater and in many cases the complaints are largely of a subjective nature. Many diagnostic tools used to diagnose traumatic brain injury are inherently questionable because the results are dependent both upon the clinician and his or her skill and perspective as well as dependent upon good faith efforts by a candidate to perform to the best of his or her ability during any evaluation or testing process. Neuropsychiatric testing requires appropriate training for the administration of the testing and allows for interpretive analysis of test results. Neuropsychology is inexact even under the most ideal circumstances. In most cases, diagnosis of traumatic brain injury and evidencing the sequellae of such an injury is challenging. The challenges are only enhanced when a candidate has a history of either pre or post accident substance usage. Whether prescribed or not, the use of medications can have serious implications on the validity of neuropsychiatric testing. In addition, various medications may cause an individual to manifest symptoms which are in fact drug related effects rather than indications of traumatic brain injury. Prescription Treatment Medication Individuals who claim traumatic brain injury are frequently prescribed a variety of medications to address their alleged impairments. While psychopharmacology may offer relief to certain candidates, they may also exacerbate other problems or, in fact, cause them. Many medications may cause fatigue, sleep disturbance, delayed response time, difficulty attending or other impairments. Those side effects may all be perceived as symptoms of traumatic brain injury but in fact may be related to medications rather than to any organic injury. The issue of prescription medications is complicated by individuals who sustain both physical injury as well as claim traumatic brain injury. Absent coordination by a medical team, different medical Page 11

15 providers may be administering medications to the same patient without regard for drug interactions. It is also the case that traumatic brain injury plaintiffs complain about inability to plan or complain of memory problems, two issues which frequently lead to excess use of medications or utilization of medications or other mishaps. Many drugs which may be prescribed for anxiety, depression, concentration issues, and fatigue as well as physical pain are highly addictive and prone to abuse. It is frequently the case that defense examinations take place while patients are under the influence of medications which can have significant impact on a plaintiff s performance on neuropsychiatric testing. Consideration of a candidate s medications at the time of testing is critical in order for a practitioner to make a valid assessment. Attached as Exhibits A and B are examples of reports written by a qualified psycho pharmacologist concerning a traumatic brain injury plaintiff and the implications of his medications on diagnosis. The reports demonstrate the likelihood of prescribing medications impairing a plaintiff from a neuropsychiatric perspective. Substance Abuse During Treatment Consideration has to be given to whether a brain injury plaintiff is abusing any substance during treatment. Whether the substance is legal or not, substance abuse and legally poly substance abuse are directly material to an individual s cognitive and executive functions. It is self evident that a plaintiff with a prior history of drug or substance abuse may have had preaccident impairments. Evaluating the breadth of those limitations can be challenging without the benefit of pre accident neuropsychiatric evaluation, but experts in the field of brain function and substance abuse can provide support in that area. Even more relevant is the issue of abuse post accident. Discovery should be directed to ascertain any substance abuse and investigation whether the treating physicians and experts are aware of the abuse and have taken it into account when evaluating an individual s neuropsychiatric testing. It is also important that consideration be given to the interaction of any prescription medications with the substance being abused. Claims have been asserted that substance abuse and/or addiction can be triggered or caused by a traumatic brain injury. There is no scientific or medical data which support such an argument and the claim that a brain injury predisposes an individual to either abuse a substance or relapse to a prior addiction should be challenged as being junk science. Attached as Exhibits C and D are reports relating to a traumatic brain injury plaintiff who alleged that marijuana usage enhanced the efficacy of prescribed Atavan and also claimed that hyper somnolence caused by alleged brain injury led her to resume alcohol abuse. The defense perspective is effectively stated in the reports. Evidential Issues A claimant s use of prescription medications post accident is obviously relevant and admissible. However, evidence of pre incident drug usage which results in criminal conviction is often challenged as being irrelevant. Plaintiffs claim that drug related crimes are not the type which relate to issues of truthfulness or honesty and do not usually lead to incarceration long enough to allow for Page 12

16 the admissibility of such a conviction. That argument is immaterial. The evidence is relevant and proper because a history of substance abuse is medically relevant to a diagnosis of traumatic brain injury. It is also the case that where a plaintiff alleges a reduction in employability due to a brain injury his or her criminal history of any kind becomes relevant to the extent it may be inquired about by a potential employer and considered in conjunction with employment decisions. Persons with criminal convictions are less employable than those without. Individuals asked about the use of illegal substances sometimes assert a Fifth Amendment right against self-incrimination. The majority of jurisdictions, in a civil matter, allow for an inference to be drawn that when an individual asserts Fifth Amendment rights, the information which would be elicited in response to the question posed would be adverse. A plaintiff s assertion of a Fifth Amendment right should be immediately challenged and an Order sought compelling disclosure of the information. Keith Harris Braff, Harris & Sukoneck 570 West Mt. Pleasant Avenue Livingston, NJ P: (973) xt.116 E: Page 13

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