City Center v. Jantzen (CA1 2/24/15)

This special action is about a supersedeas bond. After the next paragraph, though, we encounter an interesting thing.

Some homeowners sued for an injunction and damages to prevent a golf course from becoming an RV park. They won their injunction, $1 in damages – and over $2 million in costs and fees. Defendants wanted to appeal and the question became the amount of the supersedeas bond; the statute (12-2108)  and  rule (ARCAP 7) refer to “the total amount of damages” but also say that the trial court can set it in the full amount of the “judgment” if the appellee is dissipating assets, as these plaintiffs claimed (or reduce it in case of hardship, which the defendants claimed). So the plaintiffs emphasized the word “judgment” and wanted a huge bond, the defendants emphasized “damages” and wanted a $1 bond.

The interesting thing is that this also describes an essentially identical special action taken by the same parties last year. The trial court had ordered the $2 million bond and the defendants took special action. The Court of Appeals kicked the case back to the superior court because the trial judge hadn’t held a hearing. It specifically refused to decide the “damage”/”judgment” question because the parties hadn’t made below the same arguments about it that they briefed for the special action.

So guess what happened: the trial judge held a hearing and decided that he was right, though on hardship grounds he reduced the bond from $2 million to half a million. And the defendants decided that, even so, they would rather have a $1 bond. So they filed another special action to get the “damage”/”judgment” issue finally resolved.

The Court of Appeals takes de novo review of this question of law and decides that the answer is $1. “Judgment” and “damages” mean two different things; damages can be part of a judgment but judgments are not damages.

In a footnote the court also criticizes two procedural errors the trial court made in calculating the bond. These are of course inconsequential given this ruling. And so the last sentence of the footnote says “But because we are remanding the matter for the court to set the bond at $1.00, these errors are inconsequential.” Now, maybe we shouldn’t complain – CA1 is generally better about footnotes than it used to be. But what is its theory of footnotes? What is the reasoning behind footnoting the admittedly inconsequential? Is that what footnotes are for? The four other footnotes in these eight pages are just as important, by the way.

The opinion in the first special action came out last June so the case apparently lost only eight months or so, not a whole year. But who couldn’t have seen this coming? One party or the other would have taken the issue up no matter which way the trial court ruled. You can make a procedural argument for ducking the question the first time – but you can also make an argument for answering it, especially since it’s an issue decided de novo that the trial court was going to have to face on remand. Can you imagine what lawyers who charged $2 million to try a case have charged their clients for eight extra months of appellate practice? Not that the defendants’ lawyers come much cheaper.

(link to opinion)

Hayenga v. Gilbert (CA1 2/12/15)

The court holds that if you sue the wrong defendant then the malpractice claim against you doesn’t accrue until the lawsuit you did file is over.

Plaintiff bought land based on a representation that the City of Phoenix had zoned it in a particular way. It hadn’t, so she sued the seller. She lost at trial, during which she learned that the mistake was the City’s fault; the court entered a large judgment for costs and fees against her. She got new lawyers. They moved for new trial but lost; they appealed but eventually dropped it and she satisfied the judgment. They also sued the City; they were able to settle part of the claim but lost the rest on summary judgment because the statute of limitations had run. So Plaintiff got yet another lawyer and sued her first one.

But by that time more than two years had passed since she learned of the City’s culpability. Defendant therefore moved for summary judgment. Plaintiff argued that she was not injured until the conclusion of the underlying litigation, less than two years  before. The trial court granted the motion.

The Court of Appeals reverses and remands. When malpractice occurs during litigation there is no damage until the appeals are over. Although the court discusses that as if it were an interesting bit of law, its hornbook law and has been for a long time. The question here is whether not including the City in the case against the seller constituted malpractice during the course of it. The court holds that it did. The analysis, though padded with case citations, policy discussion, etc., is actually brief and conclusory. (Our point is that it’s right and should have been brief and conclusory without the padding.)

The analysis is also a bit strange because it treats separately with the two claims Plaintiff purports to make: that the lawyer was negligent for not suing the City and was also negligent for not anticipating that the seller would blame the City. That there’s a significant analytical difference isn’t particularly apparent from the decision. What’s more interesting is that they’re both somewhat artificial; Plaintiff’s real theory, which the court at one point vaguely alludes to – without mentioning (presumably because the record doesn’t) that her present lawyer explained it to a newspaper reporter – is that her old lawyer deliberately didn’t sue the City because that would have given him a conflict of interest.

(link to opinion)

Watts v. Medicis (CA1 1/29/15)

The opinion abolishes the learned intermediary doctrine.

Watts took Medicis’ acne drug for several months; it allegedly gave her lupus. (Taking serious drugs for trivial problems is a form of insanity for which we do blame drug companies; their commercials promise relief from any annoyance while, over scenes of happy and attractive people playing in fields or eyeing each other suggestively, the mellow voice mildly mentions the threat of a dozen different deaths.) Watts sued, alleging consumer fraud and products liability. Medicis made a 12(b)(6) motion, which the trial court granted.

Medicis’ defense of Watts’ appeal first presented some jurisdictional arguments. We omit them, as they ranged from clueless to hopeless.

The Consumer Fraud Act prevents misrepresentation in the “sale or advertisement of any merchandise.” Watts alleged that the company documentation she received said that the effects of long-term use were unknown but that Medicis knew (and informed doctors) that it could cause lupus. (Did her doctor tell her? The opinion avoids answering that, though presumably the Compliant did as well.) Medicis’ response? That a drug is not “merchandise.” But the statute defines “merchandise” – “objects, wares, goods, commodities, and intangibles”; the court says that drugs fall under the plain meaning of that. For some reason it then feels the need to justify the result on what are basically policy grounds. In any event, it concludes that Watts’ allegations were sufficient under the Act.

As to learned intermediary, Watts’ argument was that it is inconsistent with contribution among tortfeasors. The court notes that the doctrine was at first analyzed as a causation issue but that other cases refer to it as a duty-to-warn issue. So which is it? Here is the court’s analysis of that, in its entirety: “In its application, the learned intermediary doctrine appears to be less a rule of causation and more a standard for determining when a drug manufacturer has satisfied its duty to warn.”  So which is it? Well, if the answer were “causation” then the court would be stuck because UCATA would have nothing to do with it. And a bit later “appears to be . . . more” has morphed into a legal conclusion: “the learned intermediary doctrine precludes a complete assessment of comparative fault among tortfeasors because it preemptively limits the scope of a manufacturer’s duty.” And “Watts’ allegations give rise to questions of fact regarding whether Medicis adequately warned Watts.”

The court tells us that this result “is further supported by the realities of modern-day pharmaceutical marketing.” Of course, there are no facts or “realities” in the record, this being an appeal from a 12(b)(6) dismissal. The court’s discussion of consumer fraud was carefully phrased to acknowledge that. And a principal reason for analyzing learned intermediary in the context of UCATA is to avoid having to discuss the policy issues that led to its adoption; here the court suggests that it could analyze policy if it wanted to, which in turn underscores its almost complete failure to do so. But divorcing reality from mere fact is no doubt fine by the amicus since its next step will be to argue that learned intermediary should be abolished simply because pharmaceutical advertising exists, regardless of the facts of a given case, a result it will contend this case either already establishes or at least “foreshadows.”

(link to opinion)