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Following up from yesterday's webinar with JS Held--Fact or Fiction: Can You Trust Your Fire Investigator’s Report?  

By Dan Strong and Becky Thornton, Teague Campbell Dennis & Gorham, LLP

Article I, Section 15 of the North Carolina Constitution provides that “[t]he people have a right to the privilege of education, and it is the duty of the State to guard and maintain that right.”  N.C. Const. art. I, § 15.  The North Carolina Constitution implements this provision in Article IX, Section 2 by commanding the General Assembly to “provide by taxation and otherwise for a general and uniform system of free public schools ... wherein equal opportunities shall be provided for all students.” N.C. Const. art. IX, § 2. On June 11, 2021, the North Carolina Supreme Court determined that this constitutional protection extends to instances of extreme bullying in public schools, thereby permitting claimants to bring a tort action against a school system based on allegations that it failed to act.

The Lawsuit

In Deminski v. State Board of Education, the North Carolina Supreme Court considered whether a tort action for violation of these two constitutional provisions could be filed against the State Board of Education. Ashley Deminski, guardian ad litem of her three elementary school aged children in Pitt County, North Carolina, filed suit against the State Board of Education and Pitt County Board of Education alleging the three students had been bullied and sexually harassed by other students. The minor plaintiffs and Deminski repeatedly informed teachers and school administrators about the bullying. The County Board of Education is alleged to have been made aware of the incidents. School personnel reportedly informed Deminski that there was a “process” that would “take time.” However, as time progressed, plaintiff alleges the bullying and harassment continued with no real change. When the school did take action to resolve bullying against one of the three students by modifying one bully’s schedule, it resulted in that bully having more time in the other two bullied students’ classes. The three students eventually transferred to a new school effective only for the 2016-2017 school year. The transfer was later modified to be effective for as long as Deminski and the minor plaintiffs resided at their then-current address.

The Deminski suit included claims for violations of Article I, Section 15 and Article IX, Section 2, alleging that the minor plaintiffs were denied their right to a sound basic education as a result of being in a hostile academic environment where the School Board entities: “had substantial control over the harassing conduct;” “had actual knowledge of the harassing conduct;” and “exhibited deliberate indifference to the harassing conduct.” Both the State Board of Education and Pitt County Board of Education moved to dismiss the Complaint. The State’s motion was granted in full. Pitt County’s motion was denied, in part, allowing the Constitutional claims to proceed. Pitt County appealed.

The Court of Appeals Reverses

The Court of Appeals reversed the trial court’s order denying the motion to dismiss, holding that the constitutional guarantee to a sound basic education extended no further than an entity making educational opportunities available. A dissenting opinion, however, concluded that the minor plaintiffs had sufficiently alleged that Pitt County failed to provide them with an opportunity to receive a sound basic education based on the school’s deliberate indifference to a hostile classroom environment. Deminski appealed to the North Carolina Supreme Court based on the reasoning outlined in the dissenting opinion.

The Supreme Court’s Ruling

The Supreme Court, quoting Leandro v. State, 346 N.C. 336, 345, 488 S.E.2d 249, 254 (1997), stated that “[a]n education that does not serve the purpose of preparing students to participate and compete in the society in which they live and work is devoid of substance and is constitutionally inadequate.” An affirmative duty is placed upon the government “to guard and maintain” a student’s right to a sound basic education. The Supreme Court found that Deminski had sufficiently pleaded the elements required to assert a Constitutional claim against Pitt County, including the first and third elements that the violation was undertaken by a state actor and that there was no “adequate state remedy” for the alleged injury. Interestingly, when analyzing whether Deminski had alleged a “colorable constitutional claim,” the Court adopted the rationale of the dissent issued in the Court of Appeals. The Supreme Court found that the school’s “deliberate indifference to ongoing student harassment created an environment in which plaintiff-students could not learn.” The Court noted that “the right to a sound basic education rings hollow if the structural right exists but in a setting that is so intimidating and threatening to students that they lack a meaningful opportunity to learn.”

Deliberate Indifference

A claim for deliberate indifference, which requires a showing that the defendants actually knew of and disregarded the alleged activity, arises in several types of actions. In § 1983 claims alleging violation of the Eighth Amendment protection against cruel and unusual punishment, allegations of deliberate indifference require a showing that the actor actually knew of and ignored a detainee’s serious need for medical care.Young v. City of Mount Ranier, 238 F.3d 567, 575-76 (4th Cir. 1999). Mere negligence or, from a medical provider’s perspective, medical malpractice, is insufficient to establish a violation of the Eight Amendment rights of an inmate.  Grayson v. Peed, 195 F.3d 692, 695 (4th Cir. 1999). These deliberate indifference claims involve both an objective and subjective component. As to the objective component, a plaintiff must first show that the alleged deprivation is sufficiently serious, and as to the subjective component, a plaintiff must show that the defendants acted with deliberate indifference to the inmate’s safety. Farmer v. Brennan, 511 U.S. 825 (1994).

Monell claims, which refer to the 1978 United States Supreme Court case Monell v. Department of Social Services, are specific to § 1983 claims against a local government entity as an employer, supervisor, and policymaker. 436 U.S. 658 (1978). For a Monell claim to survive, the plaintiff must establish that a public entity had an unconstitutional policy either by an actual written policy or an unofficial custom or practice exercised repeatedly. Monell claims can include allegations that the municipality was deliberately indifferent in a failure to train or supervise the government employee. While most frequently applied in policing or jail operations, Monell claims can also be asserted in employment-related discrimination claims.

Deliberate indifference claims have been applied in student-on-student harassment in other contexts and jurisdictions. In 1999, the United States Supreme Court held that a student can maintain a private cause of action against a school board under Title IX in cases of student-on-student sexual harassment, “but only where the funding recipient acts with deliberate indifference to known acts of harassment in its programs or activities.” Davis Next Friend LaShonda D. v. Monroe Cty. Bd. of Educ., 526 U.S. 629, 633 (1999). Under the Court’s holding in Davis, a plaintiff must allege that the deliberate indifference, at a minimum, caused the plaintiff to undergo harassment or make them vulnerable to it. Importantly, the Court found that a Title IX fund recipient would only be deemed “deliberately indifferent” to acts of student-on-student harassment where the “recipient's response to the harassment or lack thereof is clearly unreasonable in light of the known circumstances.” Notably, the Court found that a mere decline in grades is not enough to survive a motion to dismiss but that the drop-off in grades could provide necessary evidence of a potential link between the harassed student's education and the harasser's misconduct. The harassed student's ability to state a cognizable claim depends equally on the alleged persistence and severity of the harasser's actions and the board's alleged knowledge and deliberate indifference. In a recent case applying Davis, the United States District Court for the Eastern District of North Carolina found that, to be actionable, the “student-on-student harassment must effectively deny the victim access to the school's educational resources and benefits.” Jane Doe, by her next friend, Tonisha Pullen-Smith, Plaintiff, v. Cumberland County Board Of Education, et al., No. 5:20-CV-523-FL, 2021 WL 2546456, at *5 (E.D.N.C. June 21, 2021). The Court stated that “[w]hile deliberate indifference is a high standard that requires more than a showing of mere negligence, a half-hearted investigation or remedial action will [not] suffice to shield a school from liability.” Id.

Expanded Claims

Prior to the ruling in Deminski, North Carolina Courts had never “recognized abuse, even repeated abuse, or an abusive classroom environment as a violation of the constitutional right to education.” Deminski v. State Bd. of Educ., 269 N.C. App. 165, 174, 837 S.E.2d 611, 617 (2020); see also Doe v. Charlotte-Mecklenburg Bd. of Educ., 222 N.C. App. 359, 731 S.E.2d 245 (2012) (holding that the education rights recognized by the state constitution related to the nature, extent, and quality of the educational opportunities made available to students in the public school system). In Doe, The Court previously recognized that a student was entitled to receive “a sound basic education” in public school which included, among other things, the ability to read and write; fundamental knowledge of geography, history and basic economic and political systems; as well as sufficient academic and vocational skills to enable the student to be successful in post-secondary education, vocational training or employment pursuits. Because “all sound basic education” claims prior to Deminski focused solely on educational opportunities made available to students, deliberate indifference claims were not recognized as “colorable constitutional claims” and would therefore be subject to dismissal. 

Under Deminski, however, the Court has expanded the definition of colorable constitutional claims to include situations where a student is not provided with a meaningful opportunity to learn due to the deliberate indifference of a state actor. The expansion of the concept of deliberate indifference to claims for violation of Article I, Section 15 and Article IX, Section 2 creates several areas of uncertainty. One notable question left unanswered in the Deminski opinion, which analyzed a claim of deliberate indifference only against a county school board, is how to apply such claims against individual educators or school administrators. In fact, it now appears likely that individuals acting in their official capacity could be subject to § 1983 claims based upon a theory of deliberate indifference. Other questions that the Court did not address are the objective and/or subjective elements of a deliberate indifference claim under these circumstances, nor did it address whether the claims would be treated similarly to those asserted under Title IX. An additional consideration is that it now appears likely that the State Board of Education could be subject to deliberate indifference claims as well, since the Supreme Court in Leandro held that the State has the ultimate responsibility to provide students with access to a sound basic education. This specific issue was not addressed in Deminski because the trial court’s complete grant of the State Board of Education’s motion to dismiss meant the issue was not considered on appeal. Ultimately, the Deminski opinion presents issues of first impression that will likely result in additional appeals throughout the course of the litigation.

By Lisa Frye Garrison, Garrison Law Group, PLLC

On June 18, 2021, Governor Cooper signed into law Session Law 2021-47 (Senate Bill 255), which makes two changes in the procedures for medical malpractice cases in North Carolina.  The first involves the handling of final jury instructions.  The second involves designating a specific superior court judge to preside over all proceedings in each medical malpractice case.  

First, Rule 51 of the NC Rules of Civil Procedure has a new subsection “(d),” which applies to “[f]inal instructions to the jury. – [i]n civil cases subject to G.S. 90-21.11(2) [the statute that defines a “medical malpractice action”].” In such cases, “the court shall reduce the oral instructions given to the jury to writing. Upon the jury retiring for deliberation, the court is encouraged to and may provide the jury a written copy of the oral instructions for the jury to take into the jury room during deliberation.” (Emphasis added) In short, judges in these future medical malpractice trials are not required to give the jury a written copy of their final instructions, but they are “encouraged to” do so, and are always required to reduce their final instructions to writing. Pursuant to subsection “(1.c)” of SL 2021-47, this new Rule 51(d) only applies to “actions filed on or after” October 1, 2021.

Second, North Carolina General Statute § 7A-47.3—which addresses superior court judges’ rotations, assignments, and sessions—has been amended to add a new subsection "(e)." This new section states, “The senior resident superior court judge, in consultation with the parties to the case, shall designate a specific resident judge or a specific judge assigned to hold court in the district to preside over all proceedings in a case subject G.S. 90-21.11(2)..” (Emphasis added.) Pursuant to subsection “(1.c)” of SL 2021-47, this new subsection “(e)” is effective October 1, 2021. It should apply to all pending medical malpractice cases at that time, as well as all cases filed thereafter.

Section (e) does not indicate that the Senior Resident must select one judge who will hear all medical malpractices cases filed in a given district; the phrase “in a case” suggests that a judge is designated for each individual case. That said, the judge designated must “preside over all proceedings in” that case. Presumably, that will include all dispositive motions, discovery motions (including the process of entering a discovery scheduling order), the trial, pre-trial and post-trial motions, and any settlements requiring court approval.

Notably, the Senior Resident has two options, after consulting with the parties: (1) designating a “resident judge” or (2) designating “a specific judge assigned to hold court in the district.” One open question is whether non-resident judges designated in a given case may only hold hearings in their designated cases while they are “assigned to hold court in the district.” It is possible that the phrase “in the district” only applies to the “designation” period—when the judge is selected by the Senior Resident—and not to the entire life of the case. If so, non-resident, designated judges for particular cases might be able to hold hearings in their assigned cases on occasions when they are not actually sitting in the district, as Rule 2.1 appointed judges often do. It will be interesting to see how judges and parties—particularly parties who do not want to travel to a non-resident judge’s district for hearings—interpret the “in the district” language and its implications for these jurisdictional issues.

Having specific judges assigned to handle each future medical malpractice case will represent a significant change for counsel, parties, and the court. For example, having only one judge who can hear motions in each case may slow down the parties’ ability to calendar motions for hearings that require prompt attention, depending on how the “in the district” language discussed above is interpreted. On other hand, this new designation process may lead to efficiencies and continuity within each case, as the judge assigned will become quite familiar with the parties and the issues involved, as well as the specialized rules applicable to this area of law. This new designation process may also provide opportunities for judges with interests and expertise in medical malpractice cases to handle them more frequently, if Senior Residents are inclined to focus the assignments of these cases accordingly.

By La-Deidre Matthews, Parker Poe Adams & Bernstein, LLP

On March 11, 2020, the World Health Organization (WHO) declared the novel coronavirus (COVID-19) a global pandemic. More than a year later, many Americans are resuming their normal lives as vaccinations become more readily available and prevention guidelines become more relaxed. However, COVID-19 still poses a risk, especially amongst individuals with jobs that require them to be in close contact with someone who is infected with the virus. Is contracting the disease while on the job a compensable action under North Carolina’s workers’ compensation laws? Like with most legal inquiries, it depends. Pursuant to the North Carolina Workers’ Compensation Act, an employee must show that they contracted COVID-19 due to causes and conditions which are characteristic of and peculiar to a particular trade, occupation or employment, rather than an ordinary disease of life to which the public is equally exposed. While no case law currently exists that addresses whether COVID-19 meets the requirements of a compensable disease under the NC Workers’ Compensation Act (the Act), a review of the pertinent statutes may shed light on the inquiry.

In North Carolina, workers compensation claims are divided into two categories: injuries that occurred by an accident or specific traumatic event, and those caused by an occupational disease. N.C.G.S. § 97-53 enumerates a list of compensable occupational diseases covered under the Act. COVID-19 is not one of the identified diseases. Several states have enacted legislation and/or issued executive orders that expand workers’ compensation for certain workers who contract COVID-19; however, North Carolina is not among them. In May 2020, House Bill 1056 proposed an amendment that would provide coverage for first responders and healthcare workers who contract COVID-19, but the proposed legislation ultimately failed.

Diseases such as COVID-19 not specifically included under N.C.G.S. § 97-53 may still be compensable under a “catchall” provision of the Act if it is proven to be contracted due to “causes and conditions which are characteristic of and peculiar to a particular trade, occupation or employment” and is not an “ordinary disease of life to which the general public is equally exposed outside of the employment.” These first two elements of the analysis are satisfied where an employee can show that her employment exposed her to a greater risk of contracting the disease than the public generally. Further, proof of a causal connection between the disease and the employment must exist. The third element may be proven by circumstantial evidence and is satisfied if the employment significantly contributed to, or was a causal factor in, the disease’s development. Relevant considerations include the extent of exposure to the disease during employment, the extent of exposure outside employment, and the absence of the disease prior to the work-related exposure as shown by the employee’s medical history.

In totality, the factors tend to indicate that an employee who contracts COVID-19 simply by being in close proximity to an infected co-worker would probably not be entitled to workers’ compensation benefits absent proof that the nature of her occupation presented unique circumstances, making her more susceptible to contracting the virus while on the job than the general public. COVID-19 has proven to be a contagious and fast-spreading virus, which makes proving these factors even more difficult. To date, there have been almost 33 million reported cases of the disease in the United States. However, there are certain occupations that would arguably have a higher probability of exposure than the general public. The Occupational Safety and Health Administration (“OSHA”) has identified several occupations as high exposure risk occupations, including healthcare employees, such as healthcare delivery and support staff and laboratory personnel; morgue workers; and mortuary workers.

Whether a disease is occupational is a fact specific-analysis and simply being exposed to COVID-19 is not enough to meet the burden of proof under state law. Although the number of confirmed cases in the U.S. is gradually decreasing, the virus continues to upend the lives of many Americans. Employers must remain vigilant and prepare for issues that arise as employees transition back into the workplace. Keeping employees up-to-date on information provided by the WHO, Centers for Disease Control and Prevention, and the North Carolina Department of Health and Human Services as well as encouraging good hygiene practices are a few ways employers can mitigate the impact of COVID-19 in their respective places of work. During the breakout session at the 44^th Annual Meeting and Spring Program, the Employment Practice Group looks forward to providing more guidance and discussion surrounding issues employers will face as they welcome employees back into the workplace.

N.C.G.S. §§ 97-1 et al.

An Act Amending the Workers’ Compensation Law to Provide Occupational Disease Coverage for First Responders and Health Care Workers who Contract Coronavirus, H.B. 1056, 2019-2020 Session (N.C.). 

N.C.G.S. § 97-53(13).

Jones v. Steve Jones Auto Grp., 200 N.C. App. 458, 463, 684 S.E.2d 497, 500 (2009) (citing Rutledge v. Tultex Corp., 308 N.C. 85, 93, 301 S.E.2d 359, 365 (1983)).

Id.

Carroll v. Town of Ayden, 160 N.C. App. 637, 642, 586 S.E.2d 822, 826 (2003) (citing Rutledge v. Tultex Corp., 308 N.C. 85, 93, 301 S.E.2d 359, 365 (1983)).

CDC, Trends in Number of COVID-19 Cases and Deaths in the US Reported to CDC, by State/Territory, https://covid.cdc.gov/covid-data-tracker/#trends_dailytrendscases (last accessed May 25, 2021).

OSHA, Guidance on Preparing Workplaces for COVID-19, https://www.osha.gov/sites/default/files/publications/OSHA3990.pdf.

By Jennifer A. Milak, Esq.

Few rights are as deeply embedded in our body of laws as the right to a trial by jury. This right, which applies to criminal and civil defendants, is enshrined in both the U.S. Constitution and the laws of all 50 states.

In North Carolina, Article I, Section 4 of our State Constitution provides:

No person shall be convicted of any crime but by the unanimous verdict of a jury in open court.

Section 25 confirms this same right applies to civil defendants, furthering:

In all controversies at law respecting property, the ancient mode of trial by jury is one of the best securities of the rights of the people, and shall remain sacred and inviolable.

Per North Carolina General Statute § 7A-196, the parties in all civil cases in North Carolina, have a right to a trial by jury of 12, unless waived by the parties. The number twelve has long been the convention in civil and criminal trials and has become so inextricably woven into the fabric of our legal system that it has remained largely unchallenged. But, COVID-19 has introduced a challenge to our state courts in the ability to safely seat 12 jurors for jury trials. Thus, state court districts are asking parties to waive their right to 12 jurors for health and safety reasons.

Federal courts in North Carolina have a different system that has existed since the United State Supreme Court’s trilogy of 1970s cases - Williams vs. Florida, Apodaca vs. Oregon, and Johnson vs. Louisiana. Those cases ruled that juries of fewer than twelve are constitutional such that federal courts nationwide have routinely adopted rules allowing seating as few as six or eight jurors in civil trials. This important change has caused the behavior and social science communities to extensively study the effects of smaller jurors. The primary question: is there a good reason for defendants to insist upon twelve?

The answer from the behavioral and social science communities is a firm and resounding yes. Ever since SCOTUS ruled that fewer than twelve is perfectly acceptable, experts and social scientists have confirmed that when it comes to the specific number, twelve is neither arbitrary nor a stale tradition that is easily dispensed. In fact, on matters concerning an individual’s personal liberties or financial and reputational future, there are compelling reasons to insist upon more eyes, ears, and brainpower.

Justice is Best Served by the Dozen.

For well over a decade, research has overwhelmingly confirmed that when it comes to making critical decisions about a defendant’s welfare, a larger group is far better than a smaller one. According to a 2004 American Psychological Association Article, entitled “Are Six Heads as Good as Twelve?,” the consensus in the psychological community is that justice is far better served by larger groups. To support this point, the article cites numerous findings from social studies comparing the decision-making power of smaller groups as compared to larger ones. These findings were subsequently confirmed in a 2020 Judicature piece authored by Patrick Higginbotham, Lee Rosenthal, and Steven Gensler entitled “Better by the Dozen: Bringing Back the Twelve-Person Civil Jury.” The article masterfully summarizes the social science findings on the superiority of larger juries and can be distilled as follows.

Reason 1: Larger juries are substantially less likely to extend outlier verdicts.

Citing a 1971 Chicago Law Review article on the diminution of juries in federal cases, Higginbotham, Rosenthal, and Gensler explain that a six-man jury is four times more likely to return an abnormally high or low damages award than its twelve-person counterpart. Per extensive studies of group behavior, in a smaller group, one individual’s extreme opinion is far more likely to sway the entire group’s decision. Conversely, in a larger pool, one outlier’s opinions have far less pull and face exponentially increased resistance.

This begs the question: why does this particular reason matter, and in particular, why does it matter to civil defendants?

Juries are (ideally) the voice of the people. Their decisions serve justice and the greater good when they follow closely to the consensus of the greater communities they represent. As a general principle, communities tend to hold consensus views that fall between two extremes. Larger juries are more likely to rule in accordance with the consensus view, not the extreme one, thus making them more accurate representations of the community’s opinions, beliefs, and values.

As far as civil defendants are concerned, extremism is not in their best interest. After all, it is very rare that juries will return a $0 award for sympathetic plaintiffs. Even a defendant who is found liable may still walk away relatively unscathed if the jurors equivocate on damages. In fact, in many cases, the best-case scenario for a civil defendant involved in a case with challenging facts is a modest damages award. Frequently, juries reach a middle-of-the-road consensus in complex cases: find the defendant liable, but spare the sting of an outrageously high award for the plaintiff.

Reason 2: Larger groups are wired to make better decisions.

Higginbotham, Rosenthal, and Gensler do not mince words in proclaiming larger groups “better” per the social science. “Better,” in this case, means objectively rooted in logic and facts. Studies have consistently proven that larger groups show better collective recall of the evidence and, as a result, less reliance on conclusory statements and emotional appeals. Higginbotham, Rosenthal, and Gensler report:

[T]he larger a workable decision-making group, the better the decisions will be because of the increased resources more group members provide. If six heads are better than one, 12 are in most respects better than six or eight.

Social studies have also shown that larger groups spend more time deliberating. In some cases and for some parties, the increased deliberation works against the client’s interest. But in complex, high-stakes litigation, the increased deliberation time is beneficial: not only is it unlikely to sap the court’s or parties’ financial resources, but as Higginbotham, Rosenthal, and Gensler note: “given that the parties’ fates and fortunes are on the line, evidence that larger juries spend more time deliberating might be seen as a virtue, not a vice.”

Reason 3: Larger juries more likely to hang.

Studies have consistently shown that smaller juries tend to communicate in a more ordered fashion, but larger groups are more likely to vigorously debate the issues. The aforementioned APA article notes that because of this, a dissenter in a larger jury may be more likely to pick up an ally or two and collectively resist the pressure to, as Higginbotham, Rosenthal, and Gensler write, “yield to the will of the larger group.” Logically, this scenario is far less likely in a smaller group.

In other words, more heads mean a greater likelihood that two or more jurors will join forces to resist the will of the masses. Alternatively, jurors will reach a consensus on liability but diverge on damages. They will agree, in other words, that the defendant was responsible for the injury at issue but then will compromise on the value of the claim. So, while the defendant will still lose, he or she will not lose as severely. In still other cases, the two (or more) holdout jurors may succeed in convincing the group to side with them on both liability and damages.

Even a hung jury, however, carries benefits for defense counsel. First of all, as noted, a divergence on damages can save a defendant substantially. More significantly though, even with weaknesses in a case, or the presence of a particularly sympathetic plaintiff or emotionally charged story, the likelihood of one or two jurors joining to resist the collective will can erode the swaying power of bad facts. However, as that group shrinks, so do the defense’s chances of a holdout juror.

Defense Counsel: You’ve Simply Got to Fight for Your Right to Twelve.

The ongoing social science and empirical, behavioral research shows the undeniably negative effects of smaller jury pools. The evidence indicates that smaller juries are not  only composed differently, but also are wired to think and decide differently than larger ones.

As such, per Higginbotham, Rosenthal, and Gensler’s call, it is “time to stop doubting these findings” and for counsel to acknowledge that 12 is not arbitrary: it is essential to fairness and equity in both process and outcome for your defendant clients.

By Mark A. Stafford and Candace S. Friel, Nelson Mullins Riley & Scarborough, LLP

We sometimes think that the drafters of N.C. R. Civ. P. Rule 26(b)(5) sought only to test the pain thresholds of lawyers: Privilege logs are the bane of existence for most attorneys—expensive, time consuming and generally a nuisance. In practice, few of us focus on privilege logs early in the process of obtaining and reviewing client documents, but failing to do so can be dangerous.

Without using the term “privilege log,” N.C. Rule 26(b)(5) (as well as the cognate federal rule) requires that claims of attorney-client privilege, work product, and joint defense or peer review privileges must be invoked at the time of service of the discovery responses or “when the party withholds the information.” This is often made express in case management orders that require a party to serve a privilege log “contemporaneously with its objection.” E.g., Window World of Baton Rouge, LLC v. Window World, Inc., 2019 NCBC LEXIS 54, *89 (N.C. Sup. Ct. Aug. 16, 2019). Not doing so can be deemed a waiver of the privilege.

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By J. Matthew Little, Esq., Teague Campbell Dennis Gorham, LLP

In recent years, the Defense Bar has seen historic numbers of pro se prisoner filings. Along with this increase is a new litigation trend that involves coupling traditional medical malpractice claims under Chapter 90 of the North Carolina General Statutes with Federal civil rights claims under 42 USC Section 1983. Given the cap on non-economic damages in Chapter 90 and North Carolina’s broad denial of attorneys’ fees recovery for prevailing parties, plaintiffs have weaponized Section 1983. Unlike Chapter 90, this section does not impose a damages cap and, when paired with a claim under 42 USC § 1988, allows for the recovery of attorneys’ fees–thus resulting in potentially much greater damages awards for aggrieved plaintiffs who have been able to retain counsel.

Although litigants have recently relied upon Section 1983 in cases of alleged excessive use of force by law enforcement, defense attorneys are increasingly seeing it used in cases filed against jail medical staff. Specifically, inmates have used Section 1983 as a cudgel against medical providers within the prison system, claiming violations under the Eighth Amendment’s prohibition against cruel and unusual punishment.

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The Argument for Applying North Carolina Rule of Evidence 414 in Federal Court with help from Sigmon v. State Farm Mut. Auto. Ins. Co.

by Austin Walsh, Hedrick Gardner Kincheloe & Garofalo, LLP

North Carolina Rule of Evidence Rule 414 is the law of the land – at least in North Carolina state court. The Rule has survived a constitutional challenge and, with only a minor setback in Sykes v. Vixamar, remains a powerful trial and discovery tool for the defense bar. But a question often posed is whether Rule 414 applies in federal court or in binding arbitration, such as for underinsured motorist (UIM) claims. The easy answer is “no,” but perhaps the 2019 case of Sigmon v. State Farm Mutual Auto Insurance Company from the United States District Court for the Western District of North Carolina provides a path to “maybe” (or even “probably”).

Rule 414

On June 16, 2011, House Bill 542 passed by a vote of 80-32 and became Session Law 2011-283, which Governor Bev Purdue signed into law eight days later on June 24, 2011. From S.L. 2011-283, evidence Rule 414 took effect on October 1, 2011, and limited the admissibility of medical expenses to “the amounts actually paid to satisfy the bills that have been satisfied, regardless of the source of payment, and evidence of the amounts actually necessary to satisfy the bills that have been incurred but not yet satisfied.”i  Rule 414 has faced little scrutiny in the courts with disputes primarily arising from what constitutes relevant evidence of “the amounts actually necessary to satisfy” unpaid medical bills.ii  No state court has decided whether Rule 414 is substantive or procedural law and whether Rule 414 applies in federal court remains an open question.

Remember the Erie Doctrine?

The law school throwback Erie Doctrine mandates that a federal court sitting in diversity applies the substantive law of the state in which it sits but federal procedural law.iii  The Erie Doctrine “is rooted in part in a realization that it would be unfair for the character of result of a litigation materially to differ because the suit had been brought in a federal court.” iv  The Fourth Circuit has held that “although the Federal Rules of Evidence typically govern in diversity cases, ‘there are circumstances in which a question of admissibility of evidence is so intertwined with a state substantive rule that the state rule … will be followed in order to give full effect to the state’s substantive policy.’”v

As an example of procedural rules affecting substance, the U.S. Supreme Court has held that state tolling statutes, despite being squarely set within rules of procedure, are substantive law.vi  Federal Rules of Civil Procedure Rule 41 does not have the one-year saving provision that is found within N.C.’s Rule 41. The Western District held in Haislip v. Riggs that N.C.’s legislatively adopted Rule 41(a) was controlling in diversity cases as a matter of N.C. substantive law.vii  The Court in Haislip also reiterated the Fourth Circuit’s test for resolving the substantive vs. procedural problem:

1. If the state provision, whether legislatively adopted or judicially declared, is the substantive right or obligation at issue, it is constitutionally controlling.

2. If the state provision is a procedure intimately bound up with the state right or obligation, it is likewise constitutionally controlling.

3. If the state procedural provision is not intimately bound up with the right being enforced by its application would substantially affect the outcome of the litigation, the federal diversity court must still apply it unless there are affirmative countervailing federal considerations. This is not deemed a constitutional requirement but one dictated by comity.viii

Sigmon v. State Farm

Enter Sigmon v. State Farm. The Sigmon case is not about Rule 414. It is a personal injury, breach of contract, and insurance bad faith case brought by a third-party plaintiff against a tortfeasor’s insurer.ix  The plaintiff alleged injuries from a motor vehicle accident on 5/20/2016 from which she filed a claim with tortfeasor’s insurer, State Farm.x  In a subsequent lawsuit, Plaintiff’s theory against State Farm arose from the insurer at first accepting liability and paying the property claim before denying liability on the bodily injury claim.xi In denying cross motions for summary judgment, Judge Kenneth D. Bell allowed plaintiff’s claims against State Farm to proceed to trial.xii

In preparation for trial, State Farm filed a motion in limine pursuant to N.C. Rule 414 to exclude evidence of medical expenses other than amounts paid or actually necessary to satisfy the bill.xiii  Perhaps owing to Plaintiff’s admission that Rule 414 applied, Judge Bell granted State Farm’s motion with regard to past medical expenses and relegated to a footnote discussion on whether Rule 414 is substantive or procedural law.xiv  Judge Bell did not mince words and stated that “[t]he application of Rule 414 may affect the outcome of litigation and is substantive North Carolina law.” xv  Judge Bell cited two N.C. cases, first Hairston v. Harward for the N.C. Supreme Court’s treatment of the collateral source rule as substantive law and second, a footnote from Nicholson v. Thom, which recognized that Rule 414 abrogated the N.C. collateral source rule with regard to evidence of past medical expense.xvi

Will Sigmon Hold Up?

Although limited to a footnote within an order granting a motion in limine, Judge Bell’s statement that Rule 414 is substantive law is certainly strong enough to include in your next federal pre-trial motions. However, expect to see renewed constitutional challenges to Rule 414, perhaps again under Article IV, § 13(2), which gives the General Assembly the power to make rules for the trial courts, but sets limits to that power: “No rule of procedure or practice shall abridge substantive rights or abrogate or limit the right of trial by jury.” To the extent arguments against the initial constitutional challenges were that Rule 414 was primarily procedural, Judge Bell’s ruling flips the script and may result in the defense bar winning the federal court battle but losing the war.

________________

i N.C. Gen. Stat. § 8C-1, Rule 414 (2019).
ii See Nicholson v. Thom, 236 N.C. App. 308, 337, 763 S.E.2d 772, 791 (2014) (noting in dicta that Rule 414 abrogated the collateral source rule with regard to past medical expenses).
iii Erie R.R. v. Tompkins, 304 U.S. 64 (1938).
iv Hanna v. Plumer, 380 U.S. 460, 467 (1965).
v Hottle v. Beech Aircraft Corp., 47 F.3d 106, 110 (4th Cir. 1995) (quoting DiAntonio v. Northampton-Accomack Memorial Hosp., 628 F.2d 287, 291 (4th Cir. 1980)).
vi Jinks v.Richland County, S.C., 538 U.S. 456, 463-65 (2003).
vii Haislip v. Riggs, 534 F.Supp. 95, 98 (1981).
viii Id.
ix. Sigmon v. State Farm Mut. Aut. Mobile Ins. Co., 5:17-CV-225-RJC-DCK, 2018 WL 3910836 *at 1 (W.D.N.C. July 24, 2018).
x Sigmon v. State Farm Mut. Aut. Mobile Co., et al., 5:17-CV-00225-KDB-DCK, 2019 WL 3928641.
xi Id.
xii Id. *at 4. (The Order is an interesting read for the effect of insurers changing liability positions mid-stream.)
xiii Sigmon v. State Farm Mut. Aut. Ins. Co., 5:17-CV-00225-KDB-DCK, 2019 WL 7940194, *at 1 (W.D.N.C. Nov. 14, 2019).
xiv Id. *at 2.
xv Id. *at n 1.
xvi Id. *at n 1.

How the Pandemic Has Changed the Practice of Law

In January, a few members met via Zoom to share experiences and reflect on the past year. Prior to the meeting we asked folks to consider a few questions. Firstly, what are your successes, words of wisdom, and best advice—given or received. Overwhelmingly, the committee members responded that simply picking up the phone and calling someone has been invaluable. A year ago, right before in person meetings abruptly ceased, it was easiest to walk down the hall or meet someone for coffee when we needed to ensure clarity. But with email now the norm for communicating, clarity can be sometimes difficult to obtain because email lacks tone. All agreed that in order to avoid confusion or misunderstandings, give the person a quick call.

Gone (for now) are the days of cocktail parties and post-work gatherings—the places we used to network and meet new people. But networking is an integral part of being an attorney. How have you managed networking and mentorship in this virtual world? One member noted that prior to the pandemic their firm held periodic lunch meetings to ensure newer staff members and attorneys were getting to know each other. With the pandemic, they’ve transitioned to a virtual platform so newer employees still get the same experience and don’t feel lost or out of the loop.

Another person noted that virtual meet ups actually give you more time to spend with more people--when you’re not having to factor in travel time, it’s a lot easier to squeeze in two or three calls in a day, whereas previously you might have only been able to do a lunch meeting or a morning coffee. All agreed with the importance of reaching out to people and making sure they feel connected.

And it’s not just networking that has changed in the practice of law. As one member noted, you’re constitutionally entitled to a speedy criminal trial—the same does not apply to a civil trial. In some areas, civil cases are being pushed out several months. Many North Carolina counties are allowing virtual hearings; however, a few are still holding in person trials—forcing attorneys to travel to those counties. A perfect example is the member who had just returned from a deposition in New Hanover county that had to be in person. She commented that while it was a long drive—nearly from one end of the state to the other—the time in the car gave her time to think and be out of the house/office that we don’t often get these days.

But that doesn’t change the fact that trials may still be difficult to manage. One county may be open for trials because they have a larger courthouse that is able to ensure social distancing and accommodate jury trials, whereas smaller counties do not have the space at all for a jury trial. And once you get the go ahead to have the jury trial, the next hurdle is finding 10 people who are willing and able to be on a jury panel. These are situations we will continue to face for months to come.  

Turning these changes caused by the pandemic into an asset and seeing the silver linings has been on a lot of people’s minds lately. We may be in this for awhile longer, so how to make the best of it? And the conversation really circled back to the one of the original points—picking up the phone and making an effort to personally reach out has been a game changer in the new normal. The irony of the pandemic is that in some ways we’ve become better communicators. And communication will be key when everything does eventually open up because at that point everything that has been pushed to the back burner will suddenly need to be scheduled.

That’s where everyone learning Zoom may come in handy—client meetings that used to be in person can be transitioned to virtual meetings, allowing for multiple meetings in a day, freeing up time for in person cases, and saving your client money as well. Of course, online meetings have their drawbacks—not everyone has access to reliable internet. Someone noted one of his clients struggled to find a good wi-fi signal, making it nearly impossible to take her statement. Additionally, online only meetings remove some of the humanity we were used to with in person meetings. You can’t know what the judge is feeling because you can’t read their body language. Mingling in the hallways of court houses with other attorneys when there are face to face trials is verboten—all but eliminating the chance to form relationships that might be beneficial in the future.

The practice of law may never return to “normal.” But the pandemic has offered the unique opportunity to step back and assess the profession. For good and for bad. As one member said, “It’s difficult to predict the potential assets from this experience as we remain in the midst of it, I’m sure everyone will come out of it with different lessons.”

By Bobbie Kullman, Nelson Mullins Riley & Scarborough, LLP

There have been changes to rules regarding service and issues arising out of service due to the global pandemic and outbreak of COVID-19.  Namely, USPS’s COVID-19 modifications for certified mail/return receipt and not obtaining recipients’ actual signatures. Postal workers have been writing “COVID-19” in the recipient’s signature block on the return receipt. That clearly is not compliant with Rule 4 service. During this time, it is recommended you use another avenue of service if you need a true signature from your recipient. Prompted by the pandemic, Rule 5 regarding service and filing of pleadings has been revised to allow service of orders, subsequent pleadings, discovery, motions, notices, etc. to be served via email on opposing counsel without their consent to that avenue of service. There are some exceptions and a review of the rule might be in order.

Initial service of lawsuit and basic deadlines.

Once a summons and complaint has been served on your client, you have 30 days to file an answer in state court and 21 days for federal court. Along with getting a copy of the complaint and summons that was served on your client, always ask the client if discovery requests were served as well. This should be indicated on the civil summons, but some attorneys neglect to indicate such on the summons. If discovery is served with the complaint, that will add additional deadlines. Responses to interrogatories and requests for production will have a 45-day deadline while requests for admission will have a 60-day deadline for state court matters.

If the newly received lawsuit is a state court matter, review defendants and allegations in complaint to determine possibility for removal to federal court. Diversity in citizenship (i.e. plaintiff from NC and defendant is a Texas corporation) is one of the most common requirements for removal I run across in my work. Federal question is another requirement that could allow for federal court to maintain jurisdiction over the lawsuit. If the allegations raise any complaints as to civil rights, discrimination, or other violations under federal law, the matter will be removable. Review the applicable U.S. Codes for additional details for removal.

Is service proper? 

As stated above, there have been some issues with the USPS and proper service. Additionally, there are certain avenues of service you must try first prior to using other avenues of service. Under Rule 4 governing service, it states “Upon the filing of the complaint, summons shall be issued forthwith, and in any event within five days. The complaint and summons shall be delivered to some proper person for service. In this State, such proper person shall be the sheriff of the county where service is to be made or some other person duly authorized by law to serve summons.” Many attorneys like to utilize a process server right out of the gate. Technically, that’s not proper service in N.C. but many don’t raise a fuss. The use of private processors is very limited and require you first try service through the Sheriff’s Department. Three points of reference regarding this issue are:

• (1)  Article: https://civil.sog.unc.edu/youve-been-served-private-process-servers-in-north-carolina/    

• (2)  Locklear v. Cummings, 822 S.E.2d 587, 593 (N.C. Ct. App. 2018); N. Carolina State Bar v. Hunter, 217 N.C. App. 216, 224 (2011)

• (3)  Court of Appeals: Stewart v. Shipley
•  

In order to use a process server for a summons, Rule 4(h) or Rule 4(h1) have to apply and that includes:

• (1)  Officer not available/refuses/neglects to serve; or
• (2)  Office returns process unexecuted.

If a person that is not named in the lawsuit accepts service for the lawsuit, ensure that person has the authority to do so. The person accepting must be over 18 y.o. and must live at the address where service is attempted. One recent problem experienced involved a husband and wife getting served at the family address. The husband accepted service for him and his wife; however, the wife no longer lived there and there was a restraining order in place that prevented them to be near each other. In this situation, the wife was not properly served.

One tidbit to remember is that we on defense have no responsibility to share the whereabouts, if known, of the Defendant to plaintiff’s counsel for service (i.e. defendant is in out-of-state drug treatment).

Another item to be noted regarding proper service is determining if a Summons/Alias & Pluries (A&P) Summonses are up-to-date and accurate. To keep a summons alive until properly served you will need to get an A&P issued no later than 90 days from the previous issuance. If your client is served with an A&P Summons, calculate the time between all dates issued to ensure timeliness of all issuances.

Statute of Limitation and Statute of Repose are always to be evaluated initially and correlate to proper service. Briefly, below are the typical years for the different statutes:

• §  Statute of Limitation:
• (1)  Legal Malpractice: 3 years
• (2)  Libel: 1 year
• (3)  Medical Malpractice: 3 years
• (4)  Personal Injury: 3 years
• (5)  Property Damage: 3 Years
• (6)  Wrongful Death: 2 years
• (7)  Product Liability PI: 2 years (w/in date of injury)
• §  Statue of Repose:
• (1)  Real Property: 6 years (after improvement/substantial completion or last specific act or omission of defendant, whichever is later)
• (2)  Product Liability: 12 years (vehicles are from the first title. If a 2009 vehicle was actually titled in October 2008, you can run into an issue Usually goes by first purchase.

Service of Subpoenas

State subpoenas are easy to serve. You can use about any means available, including Sheriff, process server, certified mail/return receipt, and any person over 18 years of age and not a party to the lawsuit. Federal subpoenas require personal service. If you require the person’s attendance, you will need to include a check for 1-day appearance ($40) and round-trip mileage with the subpoena. One item to note when serving an out-of-state person with a federal subpoena, you need to find a location for their appearance or document production within 100-miles from where the witness resides to stay in compliance of federal rules. Tips: Any time I serve an out-of-state person with a federal subpoena for production of documents, I find a court reporter’s office near their residence to use as the location for production to comply with the 100-mile rule. Court reporting agencies are also a good resource for local process serves.

 

Expert disclosures?

Typically, all expert deadlines are set out very specific in your scheduling order. However, occasionally the scheduling order may not specifically set out the deadline to serve your expert disclosers. In those instances, Rule 26 sets it at 90-days prior to trial. Remember, expert disclosures are considered part of discovery and are not filed.

Domesticating Subpoenas

In domesticating any subpoena, whether your assisting an out-of-state attorney in domesticating a foreign subpoena in N.C. or having a N.C. subpoena domesticated in another state, you must first determine if the foreign state is part of The Uniform Interstate Deposition and Discover Act (UIDDA). N.C. has adopted the UIDDA and makes the process much easier to conduct discovery across state lines and obtaining depositions of out-of-state witnesses. Most states have adopted the act leaving only a few (~8) that have not adopted the act. For those states, you have to do your research and figure out what that state requires (motions, hearing before a judge, hire local counsel, etc.). If the state has adopted the act, it’s a pretty simple procedure. First, look at that state’s rules on domesticating as they may have additional requirements.  Then, call the county in the state where you need the subpoena domesticated and find out their filing fee. Everywhere is different.  Explain what you are doing and most courts are pretty helpful in assisting you or confirming procedures.

In domesticating a N.C. subpoena in another state, first prepare a N.C. subpoena with all the information and issued by an attorney.  Second, prepare a subpoena for the state you need to domesticate in and perform any additional requirements of that state/county. Third, send it all to the out-of-state county for issuance along with a check for their fee.

In assisting an out-of-state attorney in domesticating a foreign subpoena in N.C., you first need to obtain an issued out-of-state subpoena (some states allow an attorney to issue like N.C. or they may require a court official to issue). Second, prepare a N.C. subpoena with all required information. Third, prepare a List of Counsel and obtain a check for $200.00 for the issuance fee. Once you have all documents prepared, send to the Clerk of Court in the county you need it domesticated in and the Clerk will issue the N.C. subpoena.

As it goes, situations aren’t always black and white and there will be times of uncertainty on what to do or what’s expected. We are paralegals because we are paired with attorneys. Never be afraid to go to your attorney with questions. They would always rather you ask what you might think is a “dumb” question than fix a mistake.