Third Circuit grants ADA protection for side effects of medication; the U.S. Senate has nothing on Ms. Stucky's fourth graders.

by Kirsten E. Small

This morning I visited my son's fourth grade class to talk about the Supreme Court and the process for confirming a new justice. The students had a great time questioning the "nominee" (their teacher, Ms. Stucky), and then had a rigorous debate over her qualifications, ability to be fair, and whether or not she had a hidden agenda (seriously!). In the end, the "Senate" narrowly confirmed Mrs. Stucky to the Supreme Court. Would someone please get the President on the line for me? ...

In other (some would say "actual") news, the Third Circuit on Monday ruled that side effects from a medication can constitute a "disability" under the Americans with Disabilities Act and the Rehabilitation Act, even if the condition for which the medication is prescribed is *not* a disability. The ruling, in Sulima v. Tobyhanna Army Depot, can be accessed here. The Third Circuit joins the Seventh Circuit in explicitly holding that side effects from medication (in this case, gastrointestinal disress from a weight-loss drug, which required the plaintiff to take long bathroom breaks during work hours) can constitute a "disability" under the ADA and the RA. The Eighth Circuit and the Eleventh Circuit have indicated that they, also, would treat side effects from medication as a possible disability.

The Third Circuit adopted the Seventh Circuit's three-part test for determining whether side effects of a medication may constitute a disability: "(1) the treatment is required “in the prudent judgment of the medical profession,” (2) the treatment is not just an “attractive option,” and (3) that the treatment is not required solely in anticipation of an impairment resulting from the plaintiff’s voluntary choices." Applying this test, the court concluded that Sulima was not disabled because his doctor changed the medication after Sulima reported his work problems, indicating that the treatment was not "required."

Which came first, Daubert or class certification? 7th Circuit says Daubert.

by Kirsten E. Small

Class action practitioners will want to take a look at American Honda Motor Co. v. Allen (No. 09-8051), decided by the Seventh Circuit last week.

Richard Allen sued Honda on behalf of a putative class, claiming that a design defect in the company's Gold Wing GL1800 motorcycle made it, and I am not kidding here, too wobbly. Allen's theory was supported by Mark Ezra, whom Allen offered as an expert in motorcycle engineering. Honda challenged Ezra's opinion under Daubert, arguing that his opinion was deficient in a number of respects. Honda further argued that the admissibility of Ezra's opinion had to be decided before class certification because absent the opinion, Allen could not establish that common issues predominated, as required by Rule 23(b)(3).

The district court agreed with Honda, sort of. It concluded that Ezra's opinion was shaky (pun intended), but nevertheless admitted it and certified two classes of consumers who had purchased GL1800s.

The Seventh Circuit accepted Honda's petition for review and reversed in a per curiam opinion that reads very much like something Judge Posner would write. The heart of the ruling is as follows: "[W]hen an expert's report or testimony is critical to class certification ... a district court must conclusively rule on any challenge to the experts qualifications or submissions prior to ruling on a class certification motion." Slip op. at 6. The court did not address when the Daubert analysis might be "critical to class certification," but presumably that is a common-sense determination.

It will be interesting to see what kind of play this decision gets in other design defect cases, particularly the glut of Toyota sudden acceleration claims.

Fourth Circuit Update: April 8, 2010

by Kirsten E. Small

"They" tell you never to do this, but I'm starting with an apology: I've got a brief due in the Fourth Circuit today, so there will be no scintillating analysis of yesterday's Fourth Circuit decisions. Maybe I'll get back to y'all over the weekend, or maybe I'll sleep and play with my kids.

The Fourth Circuit published two decisions yesterday:

In United States v. Ayala, the court affirmed RICO and VICAR convictions against several MS-13 gang members.

Westmoreland Coal Co. v. DOWCP may warrant more comment over the weekend (sorry, kids). The court affirmed an award of black lung benefits (no biggie there) but vacated the award of attorney's fees because--even though the award was "not unreasonable in sum"--the the ALJ failed to identify a specific hourly rate after rejecting the hourly rate proposed by claimant's counsel.

Fourth Circuit holds that authority to hire/fire is not essential to a finding of supervisor status.

by Kirsten E. Small

Employment lawyers should take note of Whitten v. Fred's, Inc. (09-1265) decided yesterday by the Fourth Circuit. The case is chock-full of important rulings. Although the court was addressing state law claims, South Carolina discrimination law mirrors federal law, and the court applied federal case law in its holdings. Therefore, it would seem that these holdings would apply to federal Title VII claims.

Whitten was allegedly sexually harrassed by the store manager (Green) of the Belton store where she worked. The harrassment occurred on Whitten's first two days working at the store, a Friday and Saturday. Whitten informed the district manager, who told Whitten she was "overreacting." Feeling otherwise, Whitten quit.

Whitten subsequently filed a complaint with the EEOC and requested that the complaint also be filed with the South Carolina Human Affairs Commission (SHAC).
The EEOC issued a right-to-sue letter, and Whitten subsequently filed suit. Because her federal claims were time-barred (more on this anon), Whitten pleaded a hostile environment claim only under state law.

The district court granted summary judgment to Fred's, concluding that Green's conduct was not imputable to Fred's because Green was not Whitten's supervisor. This was so, the court reasoned, because Green did not have the authority to hire or fire Whitten.

The Fourth Circuit reversed and remanded in an opinion written by Chief Judge Traxler.

1. Authority to hire/fire is not essential to a finding that an employee is a supervisor. The court held that the test for whether an employee is a supervisor is whether the employee's harrassing conduct is "aided by the agency relation." While this is always the case when an employee has hiring and firing authority, such authority is not a requirement because an employee can be a supervisor even when lacking such authority.

Here, Green was the highest ranking employee in the store, bore the formal title of store manager, and directed Whitten's activities and work schedule. The Court determined that this evidence established that Green was a supervisor.

2. State administrative remedies are exhausted when the EEOC forwards a complaint to a state agency. Fred's argued that Whitten had failed to exhaust administrative remedies because she filed her complaint with the EEOC rather than the SCHAC. The EEOC then forwarded the complaint to the SCHAC, which acknowledged receipt. The Court held this sufficient, reasoning that nothing in the statute requires that a complainant personally file with the SCHAC.

3. Untimeliness under federal law does not establish untimeliness under state law. A federal discrimination complaint must be filed within one year of the discrimination or 120 days of EEOC dismissal, whichever comes first. Whitten's federal claims were time-barred because she failed to file her complaint within 120 days of the EEOC's right-to-sue letter (although she filed within one year of the discrimination). Fred's argued that this time bar was also fatal to Whitten's state claims, which are subject (as a matter of state law) to the same limitations period. The Court disagreed, holding that the state statute refers only to the SCHAC, not to the EEOC. Since the SCHAC never dismissed Whitten's complaint, her federal suit was timely.

NC Court of Appeals Addresses Public Policy Exception To "At-Will" Employment Doctrine

by Gary L. Beaver

Normally, a fired at-will employee in North Carolina has almost no chance of a successful wrongful discharge claim against his or her former employer. An employer can usually terminate an at-will employee for any reason whatsoever or even for no reason at all. However, there is a very narrow public policy exception to the at-will employment doctrine that allows such claim if the termination was done for an unlawful reason or purpose that contravenes public policy. The court applied the exception here. The discharged employee (Combs) claimed he was fired for reporting to the management of his employer, City Electric Supply Company, that the company had engaged in illegal and fraudulent activity by stealing from its customers' accounts. Apparently, there were times when customers overpaid and their accounts would then reflect a negative balance. Combs noted, and City Service admitted at trial, that City Service did not apply the negative account balances against later bills incurred by the customers. After Combs reported to a head supervisor (Smith) that the Combs's immediate supervisor was ordering him to take such actions, Smith denigrated Combs in an employment review and reduced Combs's salary. Then Combs was fired and Smith told him it was for job performance issues. Combs sued, among others, City Electric and Smith, and the trial court granted a directed verdict on the wrongful discharge claim against both City Service and Smith and on a tortious interference with contract claim against Smith.

City Service boldly contended that there was nothing wrong with its handling of the negative balances so the plaintiff had no basis for asserting the public policy exception. On March 16, 2010, the Court of Appeals agreed with Combs that taking the evidence as true and in the light most favorable to Combs, City Electric's withholding of negative balance statements, transfers of the overpayments to a separate account, and sending later statements that did not reflect the negative balances so that the customers paid the new balances without getting any credit for the prior overpayments were evidence of obtaining property by false pretenses. The Court of Appeals reversed the directed verdict as to the wrongful discharge claim. The case opinion is useful to give one a sense of what the courts will look for in applying the public policy exception. The Court also reversed the directed verdict as to Smith's alleged tortious interference with Combs's employment contract because the forecasted evidence of Smith's conduct was enough to defeat a non-outsider's qualified privilege to interfere with a contract.

On a personal note, one of the customers that had been allegedly ripped-off was Wilbur's BBQ & Restaurant. That alone gets my dander up as Wilbur's, located on US 70 in Goldsboro, has the best commercial BBQ and hushpuppies in North Carolina (note that I said commercial as my father makes the best BBQ in NC) and, in my humble opinion, does not deserve to be mistreated by anyone. I would have to drop the hammer on anyone who cheats Wilbur's. Go get 'em Mr. Combs.

N.C. Court of Appeals Allows Charlotte To Withhold Documents - Were They Prepared For Reasonably Anticipated Litigation Or For Speculative Litigation?

by Gary L. Beaver

On March 16, 2010, in Wallace Farm, Inc. v. City of Charlotte, the North Carolina Court of Appeals affirmed the Mecklenburg County Superior Court's order preventing the plaintiff from inspecting certain public records held by the City of Charlotte. The City had produced over 21,000 pages of documents but withheld about 225 documents consisting of about 500 pages on grounds that they were protected from discovery because they were attorney work product materials prepared in reasonable anticipation of litigation. The lower court conducted an in camera review and agreed with the City.

Charlotte zoning inspectors had used an administrative warrant to search the plaintiff farm after complaints were made of odor from the farm's composting facility and allegations that the farm had grown beyond limits set in 1999 zoning regulations. The farm owners requested all public records from 1998 to 2008 referring to the farm. The City said it would comply but the plaintiff impatiently filed the lawsuit to compel production of the public records. The City asserted in a letter that the documents were prepared in anticipation of a legal proceeding that had yet to commence that being if the City was to take action against the farm pursuant to the complaints, the litigation that was reasonably anticipated to follow. At a hearing, the City added that the materials related to the City's research and consideration of legal strategies related to possible zoning enforcement. Despite the fact that the Public Records Act (in Chapter 132 of the NC General Statutes) provides for liberal access to public records and exceptions and exemptions to the Public Records Act must be construed narrowly, the appellate court, after its own in camera review, agreed with the City withholding the documents using an abuse of discretion standard.

These kinds of cases are difficult to evaluate because the courts necessarily cannot provide much detail about what is in the documents reviewed in camera. One would think that, in light of the Public Records Act's bias toward disclosure, a public agency would have to make stronger arguments than were presented here. For example, one does not see this type of leeway given by the courts to insurance companies withholding documents in reasonable anticipation of litigation that has much greater likelihood of occurring and where the Public Records Act does not provide a bias favoring disclosure. Why treat a public agency's work product claims with greater deference than a private insurer? However, without knowing what was in the documents, one cannot know whether the court's decision here was sound. Regardless, this case is likely to be cited by every public agency in NC that withholds a document based on work product claims further driving up the cost for private citizens to obtain public information.

A Tale of Two Airports

by Kirsten E. Small

Over a strong dissent by Judge Davis, the Fourth Circuit recently ruled that a total ban on newspaper racks by the Raleigh-Durham International Airport violates the First Amendment. News & Observer Publishing Co. v. Raleigh Durham Airport Authority, No. 09-1010 (Mar. 12, 2010).

The Publisher has its newspapers for sale in airport shops, which are required to be open before the first flight leaves in the morning and until after the last flight arrives. Nevertheless, some 30-odd flights arrive each evening after the shops have closed, depriving arriving passengers of the ability to purchase that day's paper. The majority also noted that papers were sometimes unavailable when the shops opened, or sold out before the end of the day.

The Airport does not allow any newspaper racks in the terminals, citing four concerns: aesthetics; preserving revenue for airport shops (particularly, revenue from incidental purchases made by those buying papers); preventing congestion (studies show that a newrack in a corridor reduces traffic flow by 42 people per minute when closed, and by 110 people per minute when open); and security (including the need to screen delivery persons and the possibility that a newsrack could be used as a hiding place for an explosive). Relying on Multimedia Publishing Co. v. Greenville-Spartanburg Airport, 991 F.2d 154 (4th Cir. 1993), the majority affirmed the district court's grant of summary judgment to the newspaper, concluding that the Airport's interests did not outweigh the "significant" restriction on the Publisher's protected expression.

Judge Davis' dissent challenged the majority's conclusion that there was no issue of fact for the jury to resolve, chastising the majority for "answer[ing] the wrong inquiry"--i.e., whether the Airport's interests outweighed the Publisher's rights, rather than whethere there was a material question of fact for trial. Judge Davis noted the strange procedural posture of the case: The district court first denied summary judgment, then sua sponte reversed itself a year later, without any intervening briefing by the parties.

Judge Davis then identified numerous facts tending to contradict the majority's conclusions regarding the significance of the restriction on the Publisher's rights; the similarity of this case to the prior litigation involving the Greenville-Spartanburg Airport; and the strength of the Aiport's interests in restricting newspaper sales to shops.

As is often the case with dissenting opinions, the pictures painted by the majority and the dissent are in sharp contrast. More than pointing out factual differences, however, Judge Davis challenges the majority's juridical approach to review of summary judgment, asserting that the majority decided the case on the merits rather than simply determining whether there was a genuine issue of material fact.