Kentucky Law Review

SCOTUS News: Supreme Court rejects case on Bullitt deputy's firing

Local case takes a bullet on cert at SCOTUS.  CJ story:

Supreme Court rejects case on Bullitt deputy's firing

WASHINGTON— The U.S. Supreme Court declined Monday to consider whether the dismissal of a former Bullitt County, Ky., deputy violated his civil rights.

SCOTUS: What do Brandeis and Sotomayor have in common? Contentious confirmations, maybe.

This post from the UofL Law Faculty blogs strikes close to home and provides a little insight on daylight disinfectant:

Peter Scott Campbell's blog: Wall Street Journal Republishes Brandeis Confirmation Articles

Every time there are confirmation hearings for a new Supreme Court justice, there is renewed interest (at least on the media’s part) in the confirmation hearings of Brandeis.  The Brandeis nomination set the standard for contentious confirmation hearings. Brandeis was nominated by Wilson on January 28, 1916.  Brandeis was not confirmed until June 1, over 5 months later.

If the Sotomayor hearings aren’t giving you enough excitement to fill your Supreme Court politics cravings, the Wall Street Journal has reprinted 4 of their articles from the Brandeis hearings. Look for the links in the second column, about a quarter of the way down the page. Enjoy.

Chief Justice Roberts Speaks at UofL

Chief Justice Roberts stops in Louisville to speak at the McConnell Center.  I could NOT find the video of it on line, but should someone know where the link is, then please email it to me. 

Chief Justice John Roberts speaks at U of L from CJ

U.S. Supreme Court Justice John Roberts was mildly critical of the U.S. Senate yesterday, saying during a discussion at the University of Louisville's McConnell Center that he wishes its members would not doggedly pursue Supreme Court nominees about their positions on hot-button issues

Chief Justice John Roberts Speaks At U of L

Gabe Bullard's story at 89.3 FM

SCOTUS: "2008 Annual Supreme Court Round Up 7-11-08" from the Federalist Society

From the Federalist Society's Audio Blog is the following A/V:

2008 Annual Supreme Court Round Up 7-11-08

On July 11, 2008, former United States Solicitor General Theodore B. Olson delivered the Annual Supreme Court Round Up at the Mayflower Hotel in Washington, DC.

SCOTUS: "Courts - The Supreme Court and its conundrum of continuity and change" from ILB

SCOTUS posting from Marcia Oddi at the Indiana Law Blog:

Courts - The Supreme Court and its conundrum of continuity and change - Linda Greenhouse, who is soon to leave the NY Times after 30 years, offers reflections and a personal overview of the Supreme Court's work titled "2,691 Decisions." Here is a sample: * * * *

SCOTUS: Kentucky Retirement System v. EEOC decision hold no discrimination against older workers

SCOTUS decision reported in Herald Leader.  Also, see SCOTUSWiki summary of decision with history, links, and analysis at KRS v. EEOC.

Court: No age bias in retirement system

The Supreme Court ruled Thursday that Kentucky's retirement system does not discriminate against older workers.

The court, in a 5-4 ruling, says the retirement system reasonably takes age and length of service into account when structuring benefits for disabled workers who are eligible for retirement.

SCOTUS: Metropolitan Ins. Co. v. Glenn - ERISA plan fiduciary and conflicts of interest in denying claims; any applicability beyond just ERISA

In this 6th Circuit decision that wound its way up to the US Supreme Court, it was held by SCOTUS that federal law imposes a special standard of care on insurers requiring full and fair review of claim denials. Justice Breyer noted that MetLife had emphasized a medical report that favored denial, de-emphasized other reports suggesting benefits should be granted and failed to provide MetLife’s vocational and medical experts with all relevant evidence.

Many of these thoughts are of a preliminary nature; and hopefully they might stir some debate or thoughts by others.

In looking at an ERISA third party administrator's duties it was noted that that a company which both administers and funds a benefit plan operates under a conflict of interest that must be considered as a factor in a court’s review of claim denials.

Click here for the SCOTUS Wikipedia summary and anaysis of Met Life v. Glenn.

However, my question is whether or not the same analysis for conflicts of interest applicable to the ERISA TPA should apply to a first party insurance coverage claim within any insurance context where a person pays for a premium, the insurer accepts that premium, and promises to pay under certain conditions.  Alas, that is the heart of any insurance contract which is part and parcel of a business highly regulated by government.

Insurance contracts are approved by the state agency regulating insurers; and their terms are not freely negotiated, much less some parity between the parties.  Kentucky decisions have long held the terms of the policy will be interpreted against the drafter.  However, what about the application of those terms in payment of claims? 

Does the Kentucky Unfair Claims Settlement Practices Act constitute sufficient oversight on the insurer's conduct?  Does the creation of a fiduciary relationship with conflict of interest concerns in ERISA set up a standard that (a) can be extended to non-ERISA first party contracts; and (b) would the conflict of interest duties preempt any state law to the contrary? 

I would submit the ERISA standard is clearly not going to control and regulate the non-ERISA contract.  But a federal recognition of the standard of care in processing the claim to avoid a conflict of interest is a clear sign that something may be in the air and constitute persuasive authority to develop law along the fiduciary standards rather than an unfair claims settlement practices standard.  These two areas clearly are not the same.

Below this line are some cases which discuss good faith and the applicability of a fiduciary duty in first party insurance.  Does a conflict of interest analysis need now to be considered?

See, Morton v. Bank of the Bluegrass and Trust, 18 S.W.3d 353 (Ky. App., 1999):

         A fiduciary relationship "is one founded on trust or confidence reposed by one person in the integrity and fidelity of another and which also necessarily involves an undertaking in which a duty is created in one person to act primarily for another's benefit in matters connected with such undertaking." Steelvest, Inc. v. Scansteel Service Ctr., Inc., Ky., 807 S.W.2d 476, 485 (1991). Although a bank is not traditionally held to be in a fiduciary relationship with its depositors, "services to borrowers and pledgors may support a finding that a bank, in taking a borrower's note and collateral, falls under a fiduciary duty to disclose material facts affecting the loan transaction." Id.

Addington v. Lewis, No. 2006-CA-001340-MR (Ky. App. 8/17/2007) (Ky. App., 2007):

A fiduciary relationship, we are instructed, "is one founded on trust or confidence reposed by one person in the integrity and fidelity of another and which also necessarily involves an undertaking in which a duty is created in one person to act primarily for another's benefit in matters connected with such undertaking." Steelvest, 807 S.W.2d at 485.

The sad fact is that the insurance industry sells their policies under an umbrella of trust and concern for protecting the policy holder and providing a benefit when needed which is replaced with a fiduciary duty to stockholders and other insureds in managing those company assets to see that only appropriate claims are paid.  Hmmmm..... Does this sound like a conflict of interest and what MetLife v. Glenn was looking at in the ERISA context?  Now do you catch my drift?

First party claims take on an air of adversity pitting the insured against the company that took his premium dollars while placing the insured under a duty to cooperate, the failure of which may vitiate the policy protections, and the insurer's duty to disclose material facts and to primarily act for the insured's benefits sometimes forgotten.

An older Kentucky decision incorporated language from Chief Justice Cardozo of the New York Court of Appeals, in the case of Meinhard v. Salmon et al., 249 N.Y. 458, 164 N.E. 545, 546, 62 A.L.R. 1, who in that case had before him the duties of one occupying the position of trustee or fiduciary for the benefit of others.

"Joint adventurers, like copartners, owe to one another, while the enterprise continues, the duty of the finest loyalty. Many forms of conduct permissible in a workaday world for those acting at arm's length, are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctillio of an honor the most sensitive, is then the standard of behavior. As to this there has developed a tradition that is unbending and inveterate. Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the `disintegrating erosion' of particular exceptions. Wendt v. Fischer, 243 N.Y. 439, 444, 154 N.E. 303. Only thus has the level of conduct for fiduciaries been kept at a level higher than that trodden by the crowd. It will not consciously be lowered by any judgment of this court." So say we. Also see to the same effect the case of Re Estate of Elder, 160 Or. 111, 83 P. 2d 477, 119 A.L.R. 302, and annotations thereto in the ALR volume, and our late case of Karsner's Ex'r v. Monterey Christian Church, 304 Ky. 269, 200 S.W. 2d 474.

Carpenter v. Planck, 304 Ky. 644 (KY, 1947).

I submit to you that Justice Breyer has reminded us that fiduciary duty is more than a litany of don'ts under the guise of unfair claims practices and that the field of propriety is much larger and more demanding.  In a world in which insurance companies supposely sell peace of mind, more is promised, more is expected, and more is required.

SCOTUS: Justice Breyer's talk at the Kentucky Author's Forum on MP3

UPDATED 6/12/2008:  I apologize to Jon Hoban at radio station WFPL (Louisville Public Media) for failing to properly attribute the interview of Justice Stephen Breyer from the Kentucky Author Forum on May 6, 2008.  I attributed the post to the Kentucky Author Forum but overlooked the fact that the streaming media presenation saved for web watchers was at the WFPL web site at http://www.wfpl.org/cms/?page_id=20. 

Hopefully, this updated posting with appropriate attribution will return me to their good graces, and again I apologize profusely. 

For your information, WFPL, 89.3 on your FM dial, has archived lots of their interviews and stories and provides an excellent resource of timely interviews now and from the past.  Click here for a page with links to those archives.

Please note the original post was on 5/17/2008.

Supreme Court Justice Stephen Breyer - May 6, 2008

Stephen G. Breyer, associate justice of the Supreme Court, took his seat in 1994. His book Active Liberty is based on the Tanner lectures on Human Values that Justice Breyer delivered at Harvard University in November 2004. In it, Justice Breyer argues that the Constitution’s lasting brilliance is that its principles may adapt to cope with current sitations. (courtesy: Kentucky Author Forum).

Justice Breyer was interviewed by Pete Williams, Justice Correspondent for NBC News, on May 6, 2008 at the University of Louisville Kentucky Author Forum.

Listen to the interview:

• Part 1: Active liberty / challenges of interpretation
• Part 2: Text, history, tradition, precedent, purpose, consequence
• Part 3: Group democracy and purpose / summary

SCOTUS: "Are justices moving back to the center?"

Nationally syndicated op-ed piece in Courier Journal on SCOTUS:

Are justices moving back to the center?

The Supreme Court last week made big news because it hardly changed the law at all. What was deemed noteworthy were lopsided majorities that spanned the ideological spectrum. What intrigued legal scholars was the justices' adherence to the Court's precedents.

SCOTUS: Scalia Interview Podcast (audio) on Appellate Advcacy at ABA Site

This 27 minuted podcasted interview is free with clicks to book and to transcript regarding Garner and Scalia's Book "Making Your Case".

Podcast: Scalia and Garner on Appellate Advocacy
ABA Web Site

In March, the ABA Journal’s Richard Brust sat down with U.S. Supreme Court Justice Antonin Scalia in the Supreme Court’s Lawyers’ Lounge—joined by Bryan A. Garner via teleconference—to talk about writing and oral argument.

• Some short bullets:
  • Written and oral advocacy
  • Be brief
  • Listen to questions
  • Know your audience but can't focus on one judge when panel
  • Textualist vs. statutory or legislative history
  • Humor to be avoided.  Game is not worth the candle, and not every judge (or litigator) has sense of humor.  (but show appropropriate appreciation to attempts at humor by the court ;)
  • Burdens, maxims, and relief sought (besides wanting to win)
  • Growth of a "specialized" appellate bar for both sides (to include Solicitor General for states)
  • Writing tips, contractions, footnotes, citations, spaghetti cites
  • Recognizing the friendly judge and the obstreperous judge or just listen to the quesitons - not all questions are hostile!