Evidence of immigration status allowed on claim for future wage loss under Washington law

In a case of first impression, Washington Court of Appeals, Division I, held yesterday that a plaintiff's immigration status may be admissible where plaintiff claims damages for future wage loss.

The case, Salas v. Hi-Tech Erectors, involved an injured worker's claims against a scaffold supplier for damages caused when the worker slipped from a scaffold ladder at a construction site.  Plaintiff entered the United States on a valid visa, which had since expired, and he had applied for citizenship.  Plaintiff sought to exclude evidence of his immigration status at trial.  The trial court found that if he chose to pursue his claim for impairment of future income, his status as a non-legal resident would be allowed as probative as to the extent of the future impairment.  The Court of Appeals affirmed, stating "we conclude that evidence of a party's illegal immigration status should generally be allowed only when the defendant is prepared to show relevant evidence that the plaintiff, because of that status, is unlikely to remain in this country throughout the period of claimed lost future income."

In the opinion the court discussed differing holdings from several other states.  Look for this and related immigration status issues in other appellate court cases across the country.

Don’t forget to confer before filing a motion in Oregon state court

While it can be easy to overlook the conferral requirement in Uniform Trial Court Rule (UTCR) 5.010, a recent opinion by the Oregon Court of Appeals underscores the importance of communicating with opposing counsel before filing a motion.  UTCR 5.010 requires attorneys to make a good faith effort to confer with the other party before filing most motions under ORCP 21, 23 and 36-46.  In Anderson v. State Farm Mutual Company, the Oregon Court of Appeals made it clear that this requirement is not to be taken lightly.  The defendant in Anderson successfully moved to dismiss an action under ORCP 21 A(3). On appeal, the court held that the requirements of UTCR 5.010 were mandatory, and overturned the trial court’s dismissal because the defendant had failed to confer. The court also held that futility was not an excuse—a party is required to make a good faith effort to confer with the other side even if that party believes that doing so would be futile.

No common law wrongful death claim in Oregon, high court rules

In a much-anticipated ruling, the Oregon Supreme Court today in Hughes v. Peacehealth held that there is no common law wrongful death cause of action in Oregon.  Plaintiffs in numerous wrongful death cases over the years have argued in favor of a wrongful death claim outside of the statutory claim allowed under Oregon law. Today, the Supreme Court unequivocally ruled that no such claim existed at the time of the drafting of the Oregon Constitution in 1857. 

At issue in the case was whether the plaintiff could pursue--under a common law theory--non-economic damages in excess of the $500,000 limit imposed by statute.  Plaintiff argued that the limitation violates both Article 1, section 10 and section 17 of the Oregon Constitution.  Those sections protect remedies available at common law and the right to a jury trial, respectively.  Shooting down both arguments, the Court stated, "[T]he view expressed by this court in previous cases--that wrongful death in Oregon is purely statutory and has no secure basis in the common law as it existed in 1857--is correct."  You can access the opinon here.

Plan participants can sue to recover investment losses, U.S. Supreme Court holds

The U.S. Supreme Court unanimously decided yesterday that ERISA retirement plan participants can sue plan fiduciaries for losses to their individual accounts caused by alleged fiduciary breaches.

In LaRue v. DeWolff, Boberg & Associates, Inc., the plaintiff alleged that the plan fiduciary had not carried out his investment directions properly, causing $150,000 in losses.  ERISA allows participants to bring actions against plan fiduciaries for breaches of the fiduciary's duties, but previous Supreme Court decisions had limited recovery to losses to the plan as a whole, not to individual participants.  Since only one participant alleged damages in this case, the fiduciaries hoped the court would toss the lawsuit.

Plaintiff LaRue argued successfully that the earlier decisions denying relief involved defined benefit plans, where plan assets are held and invested collectively by the fiduciaries.  LaRue's claim involved a 401(k) plan that, as almost all do, allowed participants to invest their individual account in a variety of investment options.  The court agreed that distinction justified not applying the earlier decisions and allowing the suit to proceed.  As a result, the case now heads back to the trial court to resolve the issues on the merits.  Although plan fiduciaries may not like the outcome, at least the decision clarified an issue that had grown increasingly uncertain over the past few years.

Plan fiduciaries should clearly understand the risks inherent in their position and how to mitigate them.  Good processes, competent advisors and insurance coverage all play a part in protecting fiduciaries.

You've gotta pay to play, says the Washington Court of Appeals

In a sharply-worded opinion, the Washington Court of Appeals yesterday reiterated some bedrock principles governing contract formation.  In Granton v. State Lottery Commission, a pro se plaintiff claimed that he was prevented from purchasing what he believed would have been a winning lottery ticket for a "Mega Millions" drawing, due to a malfunctioning ticket distribution machine in a gas station convenience store.  He asserted that the "play slip" he handed to the clerk with his chosen lottery numbers matched the winning numbers later drawn; accordingly, despite the fact that the faulty machine prevented him from actually paying for and receiving an official lottery ticket, he sought the jackpot.

Not a chance, said the Court -- literally.  The Court noted that, because the ticket sale was frustrated, plaintiff did not have a valid ticket and was unable to provide the required consideration (the ticket price) necessary to accept the Lottery Commission's offer of a chance to win a prize.  Therefore, no contract was formed.  The plaintiff was lucky nonetheless:  the Court, in an exercise of merciful discretion, decided not to impose monetary sanctions on the plaintiff for having filed a frivolous lawsuit.

Washington Court of Appeals refuses to enforce a promise to create an easement

Inadequate documentation of a promise to create an easement defeated a landowner's easement claim  in a case decided yesterday by the Washington Court of Appeals.  In Gold Creek North Limted Partnership, et al. v. Gold Creek Umbrella Association, the real property at issue was once held by a common owner. The owner then sold about half of the property to a developer. The Real Estate Purchase and Sale Agreement had a provision entitled "Seller's easement" which included a promise by the Buyer to grant the Seller an easement when the Seller decided to develop the remaining property. The Seller later sued the Buyer's successor-in-interest for quiet title seeking an "express easement" when the Seller started to develop the property. The Purchase and Sale Agreement did not create an easement, but only described Buyer's promise to grant an easement in the future, according to the court.  The Buyer's successors-in-interest were not on notice of the promise, and, as a result, their land was not subject to the easement.   

U.S. Supreme Court: Federal Arbitration Act preempts state law

In a case widely followed because one of the parties is television personality "Judge Alex" Ferrer, the U.S. Supreme Court today bolstered the federal policy favoring arbitration.  The court held in Preston v. Ferrer that, where a contract provides for arbitration of disputes, a state cannot require that an administrative agency initially determine the contract's validity.  The Federal Arbitration Act preempts California's Talent Agencies Act to the extent that the state statute directs the state labor commissioner to determine the validity of a talent agency agreement, where that agreement includes an arbitration clause.

Will business method patents be put out of business?

"Business method patents" are those that that describe and claim a new method for conducting a business-related operation.  Until 1998, business methods were largely unpatentable.  But in that year, the Court of Appeals for the Federal Circuit (CAFC) declared business methods patentable in State Street Bank & Trust Co. v. Signature Financial Group, Inc., and the court later held that a patentable method need produce only a "useful, concrete, and tangible result" (AT&T Corp. v. Excel Communications, Inc., 1999).  State Street precipitated a flood of business method patent applications and substantial criticism, including from Supreme Court Justice Anthony Kennedy, who noted the patents' "potential vagueness and suspect validity" in eBay Inc. v. MercExchange, L.L.C. (2006).

Last week, the CAFC signaled an intent to review en banc the patentability of business method patents, including possibly reversing course and redefining patentability requirements.  The move highlights the still-evolving definition of patentable subject matter under 35 U.S.C. § 101, including whether the definition actually "include[s] anything under the sun that is made by man" (Diamond v. Chakrabarty, 1980).  The business community and patent practitioners will watch this one closely. Any tightening of patentability requirements will likely generate lawsuits seeking to invalidate existing business method patents.

The case, In re Bilski, is set for hearing in the CAFC on May 8, 2008.

Economic development compact could spur new investment in Indian Country

The Crow Tribe in Montana has become the first Indian tribe to enter into a so-called "Economic Development Compact" with a state to make it easier for banks to file secured loans within the Tribe's Reservation.   This, in turn, should lead to a greater flow of capital to the Crow community.

The Compact covers transactions in which personal property is used as collateral for loans, including bank loans for business startups, auto loan financing, and revolving lines of credit. Such transactions usually fall under state law.  Because Indians living on Indian reservations are generally not subject to state laws, banks often refuse to enter into such loans for fear of being unable to recover on the loan.  The Compact addresses this problem by allowing a bank to file its claim on collateral as a lien with the Montana Secretary of State's office.  The Compact enables the lien to be enforceable within the Tribe's Reservation.  The Compact was made possible by the Tribe's decision to adopt a Model Tribal Secured Transactions Act. 

Similar efforts could yield substantial benefits to Indian tribes, lending institutions, and businesses looking to relocate or enter into joint ventures with Indian tribes in the Pacific Northwest.  Businesses and lending institutions should look to encourage Indian tribes to adopt a version of the Uniform Commercial Code and seek out similar compacts with the states of Oregon and Washington.   

Washington business, labor and Legislature react to the Brink's drive-time ruling

Blog contributor Brenda Molner has published an article addressing the responses of business, labor, and the Washington legislature to the Washington Supreme Court's October 2007 ruling in Stevens v. Brink's Home Security, Inc.  The article is in the February 2008 edition of the Puget Sound Chapter of the National Association of Women in Construction's newsletter.  The Brink's case deals with payment of drive-time to employees who use company vehicles to commute to and from work.  The article is a follow-up to a previous article in the same publication.

You may access Washington HB 3294 and SB 6867, referenced in the article, by clicking on the links provided.

Oregon Court of Appeals affirms employer's unilateral changes to retirement plan

Applying the contract law doctrine of accord and satisfaction, the Oregon Court of Appeals last week held that an employer did not breach a contract with its employees when it unilaterally increased the amount the employees must contribute to their retirement benefits.

In Lauderdale v. Eugene Water and Electric Board, the court held that the employer, EWEB, contracted to give its employees free or low-cost lifetime retirement benefits equal to active employees' benefits. Since those rights vested when the employees accepted employment or continued to work, EWEB could not unilaterally modify or revoke the retirement benefits without breaching the contract. The court held, however, that those plaintiffs who were still working at the time of a unilateral cost increase accepted the increase as an accord and satisfaction by continuing to work for EWEB and not challenging the change in benefits.

Flawed jury instruction leads Oregon Supreme Court to affirm punitive damages

The 10-year saga of Williams v. Philip Morris, Inc. yields this lesson for Oregon litigators:  keep your jury instructions short.  After remand of the cigarette products liability case by the U.S. Supreme Court, the Oregon Supreme Court last Thursday rejected a jury instruction proposed by Philip Morris, and on that basis affirmed a $79.5 million punitive damages award.  While the lengthy jury instruction may have accurately stated federal law on punitive damages, it misstated Oregon law.

Last year the U.S. Supreme Court, applying federal Due Process law on punitives, issued an opinion signaling that the jury instruction should not have been rejected by the trial court.  But the Oregon Supreme Court has now found that a different section of the three-and-a-half page jury instruction did not accurately recite Oregon's punitive damages law.  Because a jury instruction can be rejected if any part of it is invalid, the trial court did not err in refusing the Philip Morris instruction.  According to Justice Michael Gillette, "asking the court to give a multiple-page instruction . . . involves a significant danger that the proffered instruction will be erroneous in some aspects."  If the instruction had recited only federal law, the Oregon Supreme Court may have found error in refusing to give the instruction, resulting in reversal of the judgment.

See our earlier coverage of the case here.

Announcing our new name: The Northwest Business Litigation Blog

The Oregon Business Litigation Blog is now the Northwest Business Litigation Blog.  We have expanded our scope to cover business litigation developments in Washington as well as Oregon.  And we welcome lawyers from Ater Wynne's Seattle office to our roster of blog authors.  The Washington bloggers include Roger Dunaway, Kathy Feldman, Pete Haller, Steve Kennedy, Brenda Molner, and Rob Roy Smith.