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THE TERM IN REVIEW: Spring 2018

THE TERM IN REVIEW: Spring 2018

The spring term is now over. The term was a mixed bag for those suffering injuries and for victims of consumer law violations. Many trends we have seen in the past continued, undercutting the rights of those seeking recovery and preventing them from pursuing a trial by jury. However, there were a few positive developments that are worthy of note. Here, then, are a few of the highlights from the spring term.

Arbitration

In a long string of cases, the Supreme Court has consistently enforced arbitration agreements in the face of legal challenges. The Court continued this trend in Hampton Coal, LLC v. Varney. Unfortunately, the court in Varney refused to provide protection against forced arbitration in two important areas.

First, the Court rejected the argument that more stringent rules should be applied in the employment context. Employers often require employees to sign an arbitration agreement as a condition of employment. Because the arbitration agreement is offered on a take-it-or-leave-it basis, the plaintiff argued that it was unsupported by consideration and, therefore, unenforceable. The Court disagreed, finding that mutual promises to arbitrate were sufficient to make the agreement valid.

Second, the plaintiff argued that statutory claims should not fall within the scope of an arbitration agreement. Claims arising under the human rights act, W.Va. Code 55-11-1, are meant to implement our state’s public policy favoring equal treatment. Those claims should be heard by law-trained judges and decided by juries chosen from a cross section of our communities--not by arbitrators. There are, after all, critically important rights at stake. Nevertheless, the Supreme Court held that even statutory claims are subject to arbitration, depriving the plaintiff of the right to a jury trial.

Consumer Law

There was a bright spot this term in the world of consumer lawThe plaintiff in State ex rel. U-Haul Co of West Virginia v. Tabit argued that the defendant, U-Haul, had improperly charged and collected an “environmental” fee as part of its standard rental contract. U-Haul pointed out that its rental contracts could be obtained by three distinct methods--telephonically, electronically, or by a face-to-face transaction with a U-Haul representative. Because of this, U-Haul argued that individualized proof would be required and, therefore, that certifying a class would be inappropriate under Rule 23.

The Supreme Court, however, rejected this argument and affirmed the trial court’s certification order. The key issue was not the method by which individual contracts were obtained. Instead, the key issue was U-Haul’s companywide policy--i.e., its “business practice of charging an environmental fee that is not disclosed in the base price quoted for the rental, but which is later automatically charged.” There will, of course, be individualized issues in any class case. But because the issues common to the class as a whole predominated, class certification under Rule 23 was appropriate.

Torts

The Supreme Court has dealt before with issues involving medical record subpoenas. In Barber v. Camden Clark Hospital, the Court gave a win to patients, concluding that a hospital could still be liable for releasing mental health records even if it otherwise complies with the Medical Records Act and HIPAA regulations.

The defendant in Barber issued a subpoena to Camden Clark, which had in the past provided medical care to the plaintiff. The plaintiff did not object to the subpoena. Camden Clark not only produced medical records, but also records from in-patient mental health treatment the plaintiff had received as a teenager. The plaintiff then sued Camden Clark alleging that release of the mental health records violated W.Va. Code 27-3-1. The trial court dismissed the complaint, however, finding that a health care provider could only be held liable for specific violations of the Medical Records Act and/or HIPAA.

The Supreme Court reversed. Mental health records are given special status in West Virginia. Under W.Va. 27-3-1, a patient’s mental health records are treated as “confidential” and may only be released pursuant to (1) a signed, written authorization by the patient, or (2) a court order. The Court in Barber rejected the argument that by failing to object to the subpoena the plaintiff had waived any confidentiality rights. Clearly, a failure to object, without more, is not a signed writing. Furthermore, the Court reaffirmed that a subpoena is issued ex parte by the clerk and, therefore, is not a court order within the meaning of W.Va. 27-3-1. The new syllabus in Barber reads as follows:

“A hospital’s compliance with the Medical Records Act, West Virginia Code §§ 57-5-4a through -4j (1981), and the Health Insurance Portability and Accountability Act of 1996 when responding to a subpoena for a patient’s records does not preclude an action-based on the wrongful disclosure of confidential information in violation of West Virginia Code § 27-3-1 (2008).”

Subpoenas

In Kahle’s Kitchen, Inc. v. Shutler Cabinets, Inc., the Supreme Court not only found a subpoena to be overbroad, but also affirmed an award of attorney fees under Rule 45.

This case arose out of an alleged infestation in a shipment of plywood from DSI to Kahle’s. Another DSI customer, Shutler, received plywood from the same shipment. Kahle’s issued a sweeping subpoena requesting not only Shutler’s shipping records, but also the names and addresses of Shutler’s customers so it could contact them directly. The trial court quashed the subpoena and awarded attorney fees.

The Supreme Court affirmed the bulk of the trial court’s order. Importantly, the Court emphasized that, under Rule 45(d)(1), a party issuing a subpoena is under “a clear, unambiguous duty…to take reasonable steps to avoid imposing undue burden…on a person subject to [a] subpoena.” In this case, the subpoena was overbroad and placed an undue burden on Shutler because the records it requested were irrelevant and obtainable from other, independent sources. This is a good case to have in your back pocket when confronting an overbroad or oppressive subpoena.

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