SCOW Summary: The Economic Loss Rule Still Causing Trouble

I’ll have more analysis later today or tomorrow (my brother is visiting from Portland!) but for those of you who need/want the latest Washington Supreme Court news, the Court today one again addressed the much-maligned economic loss rule.

The majority opinion in Elcon Construction, Inc. v. Eastern Washington University (Wash., March 29, 2012), takes another stab at explaining what exactly the economic loss rule is, when it applies, and its relationship with the independent duty doctrine.  The Court states that the ELR and the IDD are essentially the same and that the IDD was “formerly referred to as the [ELR].”

In a concurring opinion, Chief Justice Madsen thinks the Court has further muddled the ELR and shouldn’t have touched the issue in the first place, since it was unnecessary to the Court’s disposition of the appeal.  Chief Justice Madsen despairs at the Court’s “mistaken statement that the ‘independent duty rule’ was formerly known as the ‘economic loss rule,’ as if the two are and have been the same.  This is not the case, and it will only add to the confusion engendered by this new rule.”

I’ll have more to write on this later, since the economic loss rule and its… cousin? twin? long-lost brother? the independent duty rule have caused all sorts of trouble for Washington civil litigators.  So stay tuned!

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Daily Decisions: Neglect of a Vulnerable Adult

Resa Raven v. Department of Social & Health Services (Division 2, March 27, 2012), is a quite sad case involving the neglect and death of Ida in 2007 (because of privacy laws, the Court only gives Ida’s first name).

Under the Abuse of Vulnerable Adults Act, RCW ch. 74.34, the Department of Social and Health Services (“DSHS”) must “investigate allegations of abandonment, abuse, exploitation, and neglect of vulnerable adults,” with a “vulnerable adult” being “a person over the age of 60 who lacks the functional, mental, or physical ability to care for herself.”

Ida was a vulnerable adult.  Accordingly, after some initial judicial proceedings, the Superior Court appointed Resa Raven (a licensed mental health counselor) as Ida’s “limited guardian” in 2004.  “The trial court gave Raven authority to (1) consent to or refuse medical treatment and (2) decide who would provide care and assistance.”

The Court of Appeals explained Raven’s duty to Ida:

A court-appointed guardian owes a duty of care to her ward.  RCW 11.92.043(4).  Specifically, a guardian has a duty “to care for and maintain the incapacitated person in the setting least restrictive to the incapacitated person’s freedom and appropriate to the incapacitated person’s personal care needs, [and to] assert the incapacitated person’s rights and best interests.” RCW 11.92.043(4).

Raven claimed that to establish neglect under the statute, the DSHS had to show that Raven’s alleged neglect actually caused some harm to Ida.  The Court of Appeals disagreed:

The Act requires DSHS to prove a pattern of conduct resulting in a deprivation of care. But it plainly does not require DSHS to prove that such pattern of conduct caused Ida harm or that if Raven had offered an alternative care plan, Ida would have accepted it.

The underlying facts clearly established that Ida’s care was extremely difficult. She suffered from dementia, often refused care, and had an uncooperative and unhelpful family.  The Court recognized these factors, but concluded that they did not save Raven from a finding of neglect:

We agree that Ida’s case presented difficult problems. . . . Raven’s obstacle argument frustrates the very purpose of her appointment as Ida’s guardian.  When Raven reached the conclusion that obstacles were beyond her control, she should have stepped aside.  We are satisfied that the Board did not err in finding this two-and-a-half year pattern of inaction to be neglect.

Lastly, Raven argued that because DSHS’s finding of neglect affected the use of her counseling license, then the Due Process Clause was implicated by the proceeding.  In other words, the finding deprived her of a property interest, and she was therefore entitled to due process.

The Court seemed somewhat sympathetic to Raven’s argument, but noted that “[b]ased on the record, however, it is not clear whether this would entirely prohibit Raven from using her license or whether it would merely preclude her from working in one sector of the industry.”  Accordingly, the negative implication is that if the finding of neglect did entirely prohibit Raven from using her license, then the DPC would have been implicated.  Based on the Court’s discussion of the issue, application of the DPC might then have required a heightened burden on the DSHS — from “preponderance of the evidence” to “clear, cogent, and convincing evidence.”  But the DPC was not implicated, so the use of the “preponderance” burden was just fine.

More McKenna vs. McKenna vs. Ziff Blog

Since my initial post on McKenna vs. McKenna, I have read this piece by Brendan Williams in The Stand, in which Williams makes some additional inconsistency/hypocrisy-based arguments against McKenna.  And as a bonus, The Stand includes this cool photo:McKenna v. McKenna

Also, I read through all of McKenna’s ACA-related press releases and statements on his website, which you can find here (just click back for previous years).  I think these statements are entirely consistent with a politician who (a) wants the mandate struck down, (b) wants some “good” parts of the ACA to survive, and (c) wants to avoid much/any public acknowledgement that in seeking goals (a) and (b), he’s allied himself and our state with folks who want to toss the whole thing out.  And that (c) problem may indeed be a problem for him.

Continue reading

McKenna vs. McKenna vs. The Seattle Times vs. The Stranger vs. Ziff Blog

The local press recently has been taking Attorney General Rob McKenna to task for his involvement in this week’s U.S. Supreme Court case dealing with the Affordable Care Act (“ACA”).  The Stranger’s Eli Sanders had this piece on Monday, which was a follow-up on a similar piece he wrote back in January.  And Jim Brunner of The Seattle Times warned over the weekend that McKenna’s involvement could cost him politically with Washington voters.

As you probably know, McKenna signed Washington on with the State Petitioners – the group of states that brought the case against the ACA.  The State Petitioners claim that the ACA’s so-called individual mandate is unconstitutional.  McKenna has said publicly that that is also his view—that the individual mandate is unconstitutional.  McKenna has also said, however, that by attacking the individual mandate, his goal is to get rid of only the individual mandate.  He wants to keep the other parts of the ACA that he likes, such as “[p]rotections for children with pre-existing conditions, young adults wishing to stay on their parents’ plans, and for those with little or no income.”

The curious thing (at least to me) about the recent critical press is that the articles do not attack McKenna on the substance of his views.  That is, the articles do not argue that McKenna should support the individual mandate or that he should (either as a matter of policy or a matter of proper application of the law) want the ACA as a whole to rise or fall with the individual mandate.  Instead, the articles criticize McKenna for the inconsistency between his stated views and the views of the State Petitioners as a group.  The State Petitioners, according to their filings in the Supreme Court, agree with McKenna that the individual mandate is unconstitutional, but they disagree with him on the question of whether the individual mandate is severable from the rest of the ACA.  The State Petitioners have argued (and continue to argue) that if the Supreme Court strikes down the individual mandate, then the Court should sweep away the rest of the ACA with it.

Sanders argues, based on this inconsistency, that McKenna is lying to Washington voters about his views.  He writes that McKenna’s “contention that he’s only going after the mandate—just the mandate!—[is] simply not credible.”  And that: “McKenna’s telling the Supreme Court that the whole law needs to come down, mandate and spokes and all, while telling Washingtonians that he thinks all of the law’s great benefits can survive the striking down of the mandate.”  Brunner’s criticism seems to be a bit more subtle: that by asserting one position personally but lending his name to the opposite position in court filings, McKenna is taking a political risk that may cost him with Washington voters who won’t understand (or care about) his legal parsing.

I carry no brief for Rob McKenna.  On the merits of the ACA case I think the individual mandate should be upheld.  I would certainly criticize McKenna for his view to the contrary as well as his decision to sign Washington onto a lawsuit arguing that the individual mandate is unconstitutional.  But I don’t think the recent anti-McKenna press-bashing has been entirely fair.  Sure, he may be lying to Washington voters.  And maybe his position is a huge political blunder.  I have no idea.  But I don’t think his actions with respect to the case thus far are necessarily the actions of a liar or someone who is flopping through a political mine field.

There are lots of good, honest, rational reasons for McKenna to be doing what he’s doing, even if you assume that he’s telling the truth when he says he is anti-mandate but pro-severability:

  1. By joining the State Petitioners, and letting other states take the lead, McKenna is saving Washington money.  One of the costs of joining a group of plaintiffs is that you cede some control over the litigation.  But one of the benefits is that you disburse the burden of legal fees, which in a case like this can be quite high.  As Brunner reports:  “The case is being directed by the Florida Attorney General’s Office, and Washington state is not paying any of the legal costs.”
  2. By joining a party in the case—and the State Petitioners are a party—McKenna is more able to influence the course of the litigation.  Sure, McKenna was out-voted in the group on the severability question.  But at least he had a vote and was in the room.  One suspects that to the extent McKenna is involved in the case at all, he’s now assisting on the anti-mandate part of the case while staying out of the way on the severability part.
  3. There is nothing strange about one individual in a group representation disagreeing with the others in the group about one aspect of the litigation.  Individual members of multiple-party groups disagree and compromise all the time.  Some disagreements are bigger than others, but when you sign on to a multiple-party group, you are agreeing to compromise on certain things where you can.  The odd thing here is that we’re hearing about the disagreement because McKenna has made it public.  But the fact of the disagreement itself should be no surprise.
  4. He’s not wrong!  While neither of the parties in this case is taking McKenna’s view that the mandate is unconstitutional and severable, the Eleventh Circuit Court of Appeals adopted that view.  It’s a reasonable view, at least from a legal perspective.  Severing the mandate may cause problems for certain parts of the ACA, but there’s no reason it would have to affect the parts he likes: protections for children and those with little income.
  5. But why not sign on with the State Petitioners on the anti-mandate briefs but not sign on with the severability briefs?  Well, you can’t do that when you’re an actual honest-to-goodness party in the case.  A party is unified for all purposes.  The State Petitioners’ brief is the State Petitioners’ brief, and that means all the State Petitioners sign on to it.  If McKenna just wanted to be an amicus curiae (friend of the court) instead of a party, he could pick and choose different briefs to join.  But he’s a party so he doesn’t have that luxury. Sanders makes this mistake when he takes McKenna to task for signing “a high court amicus brief” for the State Petitioners.  If it were just an amicus brief McKenna could have avoided signing it.  But it wasn’t an amicus brief; it was the brief for the State Petitioners—a party, of which McKenna is a member.  So his name is on the brief.
  6. So why not just be an amicus instead of a party?  Amici are sort of useless.  They hardly matter outside the Supreme Court.  Courts of Appeals rarely accept/consider them and District Courts almost never do.  By being a party, McKenna has been able to have a voice in this litigation from the inside and from the very beginning at the trial court.  Also, if he were an amicus, he would have to file his own brief on Washington’s dime.  That’s what Governor Gregoire did.  On the merits, I agree with the Governor.  But I don’t know if we needed to hire a team of Seattle lawyers at taxpayer expense to submit a brief making that point.  Again, I think it’s good for Washington taxpayers that McKenna’s limited involvement means we are saving money and not wasting the time of government employees.
  7. So why not just drop out?  Well, I don’t think that would make much/any practical difference.  McKenna is one member of a group of petitioners.  Maybe his participation in strategy sessions has strengthened the anti-mandate arguments (which he likes) and narrowed or limited the severability arguments (which he doesn’t like).  But really, he is just a name on the line, and his participation is largely symbolic.  By publicly stating that, unlike the State Petitioners, he’s pro-severability, he’s essentially muted whatever symbolic power his name has on that anti-severability brief.

At base, I think the critics are attacking McKenna for an apparent meekness.  If he really thinks the individual mandate is unconstitutional but severable, then he should be out there making that case on his own, instead of signing on with a group of petitioners who only partially agree with him.  But let’s assume McKenna actually did that—hired some Seattle lawyers, got more involved in the case, and filed briefs setting forth his exact views.  I doubt that Sanders and Brunner would stand up and applaud.  I certainly wouldn’t!  If we assume that McKenna’s stated views are actually his views (and I have no reason to suspect otherwise), then I think what he’s done thus far is about the best course of conduct you could hope for if you are a Washington taxpayer who thinks the individual mandate is constitutional and the ACA should be upheld in full.

Daily Decisions: Court of Appeals Clarifies that “Withhold” Means “Withhold”

Pacific Continental Bank v. Soundview 90, LLC (Division 1, March 26, 2012), involves the determination of priority for recorded secured obligations that permit draws over some period of time after the recordation.  (If that lede doesn’t grab you, I don’t know what to say.)  Specifically, when a lender records an obligation that permits periodic draws, and then a second lender records a second obligation, what is the priority for claims by the first lender based on draws the borrower makes after the recording of the second obligation?  Well, it turns out Washington has an interesting statutory scheme to answer that question. Continue reading

Monday [word to be determined later, perhaps beginning with “M”?]

If you haven’t already noticed, one of the things I’ll be doing here at Ziff Blog is reading each and every Washington Court of Appeals published decision and then summarizing (with varying degrees of pithiness) the civil cases.  (Sorry to all you Washington criminal practitioners, maritime practitioners, or other non-civil (uncivil?) folks, but you’ll have to get your fix elsewhere.)  I hope that, eventually, this will become your go-to spot for keeping up with Washington State developments in civil litigation case law.  But, hey, I know you’re busy.  And I know you may not want to check the blog every day.  And I know that if you check the blog maybe once a week or so, you don’t want to sift through all the posts looking for the Court of Appeals decision summaries.

Well, your worries are over!  Every Monday, starting today, I’ll have a post with all of the previous week’s “Daily Decisions” in one convenient place.  This way, you can check in with Ziff Blog on Monday and get your entire recommended weekly allowance of Court of Appeals opinions.  Of course, let’s be honest, you really should be visiting every day, but that doesn’t mean you will.

Now all we need is a name for this regular Monday post.  Monday… something-or-other.  Please put your suggestions in the comments below!  And now, without further delay:

Lake Chelan Shores Homeowners Ass’n v. St. Paul Fire & Marine Ins. Co. (Division 1, March 12, 2012) (previously unpublished) — on the use of expert testimony at summary judgment.

Fowler v. Washington State Department of Retirement Systems (Division 2, March 13, 2012) — on the review of Department of Retirement Systems agency action.

Nickell v. Southview Homeowners Association (Division 2, March 13, 2012) (previously unpublished) — on adverse possession and equitable estoppel.

Newlon v. Alexander (Division 3, March 15, 2012) — on the constitutional jurisdiction of the superior courts.

Levy v. Snohomish County (Division 1, January 23, 2012) (previously unpublished) — on the state’s compliance with requests under the Public Records Act.

Rice v. Offshore Systems, Inc. (Division 1, March 19, 2012) (previously unpublished) — on surviving summary judgment with evidence of pretext in an age discrimination claim.

Boeing Employees’ Credit Union v. Burns (Division 1, March 19, 2012) — on the interplay between claims under a promissory note and claims on a related deed of trust.

River House Development v. Integrus Architecture (Division 3, March 15, 2012) — on waiver of a contractual right to arbitration or mediation.

In re The Trust and Estate of Melter (Division 3, March 20, 2012) — on burden shifting and presumptions in will contests.

Federal Judge: Washington State Can Kill Sea Lions

According to the Wall Street Journal Law Blog, the United States District Court for the District of Columbia has denied a request for a temporary restraining order, which paves the way for Washington, Oregon, and Idaho to kill or remove 30 sea lions this year.  The Humane Society had sought the restraining order to put an end to government sea lion killings.  The government contends that removing or killing sea lions is necessary to protect the endangered salmon population.

At press time, the Court’s opinion was not available on the District Court’s website, but it should be posted soon.  Check back for updates!