Overall, the cases decided in the Supreme Court’s spring term were a disappointment to plaintiffs. In this overview, we will look at three broad categories of cases: torts, arbitration, and oil and gas.
Foreseeability is one of the bedrock principles of tort law. In Humphry v. Westchester Limited Partnership, the Supreme Court had an opportunity to apply foreseeability in a way that would have held businesses fully accountable for the risks they create when illegally serving alcohol to minors. Instead, the Court’s cramped foreseeability analysis gave safe haven to a business that admittedly broke the law. The Court lost its way by focusing on whether, or not, the minor who was served was the same one who was driving the car. As Justice Workman stated in her dissent, that analysis misses the point. What matters is the chain of causation: the business should be accountable because it served a minor who became intoxicated and whose impaired decision-making directly led to the crash. Worse yet, an innocent victim was left without any possibility of compensation.
The Court also issued an opinion in Goodwin v. City of Shepherdstown making it harder to prove malicious prosecution. Two aspects of this case are especially troubling. First, the Court found that a dismissal “without prejudice” was not an outcome favorable to the accused. Therefore, did not satisfy the first element of malicious prosecution. Justice Workman, in dissent, warned that prosecuting attorneys will simply begin entering dismissals “without prejudice” as a way of avoiding any future malicious prosecution claims. Second, the Court found that a grand jury finding of probable cause effectively negates any claim by the accused that probable cause was lacking. In doing so, the Court did not even consider cases finding that an accused may challenge a grand jury’s probable cause finding where it was based on “intentional, knowing or reckless falsehood.”
Oliver Wendel Holmes famously said that “hard cases make bad law.” We see this in Amoruso v. Commerce and Industry Ins. Co., where the Supreme Court was addressing a motion seeking relief from a default judgment. Even though the default judgment was clearly obtained and enforced through questionable means, the Court refused to vacate it--largely, it seems, because the defaulting party had a reputation for avoiding judgments. Hopefully, the Amoruso opinion is simply an overreaction to a “bad” party and not a sign that our Court is changing the way it treats default judgments.
It’s hard to find even a glimmer of light in the Supreme Court’s arbitration opinions. Attacking arbitration agreements has become increasingly difficult. In a typical case, there are only two methods of attack: formation (did the parties actually have a meeting of the minds?) and unconscionability. In this term’s cases we see examples of each. Unfortunately, the results are not encouraging.
In Rent-A-Center v. Ellis, the Supreme Court dealt with a recurring theme in these kinds of cases. The plaintiff, a high school graduate, was applying for a job and was presented with a slew of papers prepared by a multibillion dollar company and its legal team. The plaintiff was rushed through the signing the process and had no idea that one of the papers she was signing was an arbitration agreement. No matter. Even in the face of an unconscionability challenge, the Court still found the agreement to be effective.
The plaintiff fared no better in Collins v. Employee Resource Group. Collins raised a formation issue: did the plaintiff actually agree to arbitrate when she was filling out employment papers electronically through the employer’s website? The parties disputed the process by which papers could be electronically signed. The plaintiff testified that she did not sign the arbitration agreement and that the electronic signature was prestamped. The circuit court agreed and entered judgment accordingly. In the end, however, the Supreme Court reversed and ordered the case to arbitration.
Oil And Gas
There was a pleasant surprise in the realm of oil and gas law.
In EQT Production v. Crowder, the Supreme Court addressed a gas company’s implied rights under a gas lease. EQT held a 100 year old lease authorizing it to drill vertical wells. Without the surface owner’s consent, EQT claimed that the lease also authorized it to drill horizontal wells crossing under adjoining properties so it could extract gas from those properties. The Court, however, held that “a mineral owner or lessee does not have the right to use the surface to benefit mining or drilling operations on other lands, in the absence of an express agreement with the surface owner permitting those operations.”
As this sampling of cases suggests, there isn’t much to cheer about in the realm of torts and arbitration. The Supreme Court has clearly charted a conservative, pro-business path that is slowing chipping away at the rights of the injured. But the situation is not hopeless. The Court’s willingness to stand up to the oil and gas interests in the Crowder case shows that it can act courageously. We hope the Court can find this inner courage more often in the coming term. The people of West Virginia deserve it!