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U.S. Airways v. Qwest (CA1 11/1/15)

This case is of value primarily for its discussion of tariffs, which routinely take plaintiffs’ counsel unaware (though presumably not here since airlines also file them). But at the end it also broadly interperts the Blue Stake law.

U.S. Airways’ operations were knocked out for a few hours when a nearby construction project cut a cable. Underground lines had been mismarked because Qwest’s maps were wrong. U.S. Airways sued Qwest, among others. Qwest won summary judgment because its tariffs limit liability for negligence. U.S. Airways appealed.

The Court of Appeals affirms. The opinion reviews the substantial body of law upholding tariffs that limit liability for negligence. U.S. Airways argued that the tariff didn’t apply to it because it wasn’t Qwest’s customer (the cable cut disrupted its AT&T service). The court cites various cases holding that tariffs apply to the public generally, not just to customers.

U.S. Airways also argued that the tariff (or, more specifically, the state’s approval of the tariff) unconstitutionally abrogates its cause of action. But it couldn’t cite authority that negligence against a utility for economic loss existed at common law. And even if it had, the tariff merely limits Qwests’ liability (although to an amount that is basically de minimis).

Qwest cross-appealed the trial court’s finding that it owed a duty to U.S. Airways under the Blue Stake statute (40-360.22). The statutes provide for liability to “underground facility operators and excavators.” But the court decides that since the statute creates a “duty or obligation” – to mark its lines and to do so “carefully” —  “the legislation was enacted, in part, to protect end users like US Airways.”

(The case also involved the issue of whether the contractor who marked the location of the underground cables for Qwest owed a duty to U.S. Airways. The court affirms that it did not but the reasons are fact-specific; the opinion restates existing law.)

(link to opinion)

Grubaugh v. Blomo (CA1 9/22/15)

Lawyers who handle mediations will want to be aware of this one.

After Grubaugh’s divorce was resolved by mediation she sued her lawyer for the allegedly bad advice during the mediation that led her to accept its result. The lawyer moved the trial court to order either that Grubaugh waived the mediation privilege (12-2238) or that she could not base her malpractice claim on communications she also had the right to keep privileged. The trial court accepted the “either” position, ruling that the claim waived the privilege. Grubaugh took special action.

The Court of Appeals accepted it and took the “or” position: Grubaugh did not waive the privilege but can’t sue based on privileged information. The traditional argument is that you can’t use a privilege as both a sword and a shield but the court says that while this applies at common law the mediation privilege is strictly statutory. Under the statute everything at mediation is inadmissible later unless the parties agree otherwise, disclosure is required to enforce the agreement or by another statute, or the information is relevant to a claim against the mediator. A malpractice claim against the lawyer isn’t one of those exceptions so Grubaugh didn’t waive the privilege by making one.

But the court then says in essence that since it would be unfair to prevent the lawyer from defending the malpractice claim, “striking from the complaint any claim founded upon confidential communications during the mediation process is the logical and necessary consequence of applying the plain language of this statutory privilege.” Sounds good but there really isn’t much more reasoning to it than that. The thought, presumably, if there was one, was that the legislature intended this result and that insulating lawyers from liability for malpractice during mediation was a policy decision within its power.

The court remands to let the trial court decide which communications were privileged and strike claims based on those.

The trial court had decided, according to the opinion, that the privilege did not apply because “the statute did not contemplate the precise issue presented.” Whether the opinion says it that way to make the ruling seem stupid we can’t and won’t say. Our guess, though, is that in context the trial judge was referring  to a constructive-intent argument, in which case – whether ultimately right or wrong – his analysis had at least as much legal thought behind it as the appellate court’s approach.

.(link to opinion)