Pounders v. Enserch (8/21/13)

We reviewed the Court of Appeals opinion here; go there for the facts. The Supreme Court granted review “to consider issues of statewide importance regarding the choice of law in wrongful death actions involving long-latency disease cases.”

It means by that accepting Pounders’ argument that injury occurs when and where the disease manifests itself. Well, actually, it says “when the disease is discoverable,” which raises issues to which the court gave no evident thought, but the point is to adopt the manifestation theory. It does this by showing a sudden regard for the rule lex loci delicti (having treated it for a generation with disdain, if not disgust), deciding that the discussion of it in the first Restatement (which adopted it) has “continuity” with that in the Second Restatement (which rejected it) if manifestation is the law.

Once upon a time the Restatement was intended to summarize the law of the states. It was a handy guide and that’s why our default was to follow it when Arizona had no law on point. Nowadays it is apparently regarded as Holy Writ, with subtle secrets to be revealed by a labored analysis (at least if you also use texts no longer canonical). The advantage of this is that, like the other kind of Holy Writ, the Restatement can mean whatever you want it to. This approach would delight the ALI; how it helps Arizona is less clear. There are decent arguments in favor of manifestation; this sort of pseudo-intellectual game playing will not convince any doubters that is necessarily either the law or a good idea. And as the Court of Appeals opinion illustrates, a more straightforward reading of the Restatement favors exposure, not manifestation.

But even though the injury took place in Arizona the applicable law is that of the state with the “more significant relationship to the occurrence and the parties.” The actual lex loci delicti is not entitled to preference or greater weight – especially where, as in many long-latency cases, it is “fortuitous.” The court goes through a standard Restatement Second choice-of-law analysis and decides, like both courts below, that under these facts New Mexico’s is the law that should apply.

The court did not take review of the ruling that that law bars the claim. The result is therefore affirmed, though the Court of Appeals’ manifestation-vs.-exposure analysis is vacated.

(link to opinion)

Sullivan v. Pulte Homes (7/31/13)

We blogged the Court of Appeals opinion here. The Supreme Court took review only of the economic-loss issue. In a brief opinion the court agrees with the Court of Appeals but vacates that part of its opinion, perhaps to remove the weaker aspects of its analysis of Flagstaff.  The take-away: “We decline to extend the [economic-loss] doctrine to non-contracting parties.” The Sullivans can pursue a tort claim – though the opinion cites a Restatement note suggesting that they don’t have one.

This is one of the new slip opinions formatted to look like those from the SCOTUS. We’re going to assume that somebody got new software and that that’s the easiest way to use it. The other explanations involve unfortunate perceptions of the relationships between the courts and, also, vanity. But at least its good to see that our Supreme Court can afford printers than can handle decent fonts.

(link to opinion)

Clark v. Renaissance West (CA1 7/30/13)

Businesses that use arbitration agreements with consumers will want to look at this one.

While in a nursing home Clark signed an agreement to arbitrate claims. When he later brought suit against it the nursing home raised the agreement as a defense. After an evidentiary hearing the trial court ruled it procedurally valid but substantively unconscionable: Clark’s expert testified that the arbitrators’ fees would exceed $22,000, Clark couldn’t afford that because he was retired and lived on a fixed income. The nursing home appealed; the Court of Appeals affirms.

“An arbitration agreement may be substantively unconscionable if the fees and costs to arbitrate are so excessive as to ‘deny a potential litigant the opportunity to vindicate his or her rights,’” citing Harrington, 211 Ariz. 241. The court in Harrington said that was a valid argument but that those plaintiffs hadn’t proved it. That’s why Clark got an evidentiary hearing and proved up the purported arbitration costs and his income. On appeal the nursing home questioned the expert’s conclusions and qualifications and whether Clark’s income was enough to cover the arbitration fees but those were factual and discretionary matters concluded by the trial court.

Harrington pointed out a solution: AAA rules allow fees to be reduced or waived in cases of “extreme hardship.” The nursing home wasn’t using those rules; it was a private, you-pick-one-and-we’ll-pick-one agreement that split costs equally. A provision that lets the arbitrator shift costs on a showing of extreme hardship may be the price to pay for keeping some of these agreements alive.   

(link to opinion)