Fourth Circuit rules Chapter 13 bankruptcy debtor has standing to sue

In Wilson v. Dollar General Corp., No. 12-1573 (4th Cir. May 17, 2013) (PDF), an employee filed a charge of discrimination with the EEOC against his employer, Dollar General Corporation, alleging Dollar General failed to provide a reasonable accommodation for his disability.  While the claim was pending, he filed for Chapter 13 bankruptcy and properly listed his ADA claim as an asset. He then filed suit in district court, and Dollar General moved for summary judgment. The district court ruled  that the Chapter 13 bankruptcy did not deprive the employee of standing, but ruled against him on the merits.

In a case of first impression on the bankruptcy standing issue, the Fourth Circuit affirmed, joining five other circuits in ruling that, "unlike a Chapter 7 debtor, a Chapter 13 debtor possesses standing — concurrent with that of the trustee — to maintain a non-bankruptcy cause of action on behalf of the estate."

Regarding the merits, the court ruled that because the employee could not identify a possible reasonable accommodation that could have been discovered during the interactive process that would have allowed him to perform the essential functions of the job, his ADA claim was properly dismissed on summary judgment.

West Virginia's New Business Court

West Virginia's court system repeatedly ranks dead last in surveys about the fairness of states' litigation environments.  Yesterday, the West Virginia Supreme Court took a significant step toward changing that perception by creating a new business court division.

The Business Court Division is governed by Rule 29 of the West Virginia Trial Court Rules. It is not really a new "court," per se.  It is comprised of a panel of current and senior status circuit judges across the state.  It will only handle cases between business entities (business vs. business litigation), so its benefits for businesses in the state will be limited.  Expressly excluded from the court are cases involving personal injury claims, product liability claims, just about all types of consumer claims, insurance coverage disputes, employment claims, and landlord-tenant disputes.  Without such carve-outs, the plaintiff's lawyer lobby would have killed this idea right away.

According to the State Supreme Court, the goal was to design a Court that focuses on the complex issues that arise in commercial litigation.  Parties can file a motion to have their case transferred to the business division, and the Chief Justice of the West Virginia Supreme Court will rule on the transfer motion.  Cases handled by the business division will receive expedited treatment, and the presiding judge is charged with making sure "all reasonable efforts" are undertaken to conclude the case within ten months.

I'm not sure how much this will help our business climate, but it certainly can't hurt.

U.S. Senate confirms Groh to U.S. District Court

Congratulations to Berkeley County Circuit Judge Gina Groh who was just confirmed to the federal bench by a 95-2 vote of the United States Senate.  Judge Groh will replace the late Judge W. Craig Broadwater who passed away in 2006.  Judge Groh will sit in the Martinsburg Division of the U.S. District Court for the Northern District of West Virginia.

W.Va. Supreme Court adopts apex deposition rule

High-ranking corporate officials with little or no personal knowledge of the facts of a civil case can be protected from deposition until after less-intrusive discovery options are exhausted, ruled the West Virginia Supreme Court of Appeals in  State ex rel. Massachusetts Mutual Life Ins. Co. v. Sanders, No. 11-1514 (Feb. 24, 2012).

In a case of first impression, the Court was asked to consider whether a high-ranking corporate official of Massachusetts Mutual Life Insurance Company, who was without any personal or unique knowledge of the facts and circumstances of the case, could be compelled to be deposed, despite the availability of other corporate witnesses and other means of discovery.  The Court held that the trial court should have applied the so-called "apex deposition rule" to determine whether a protective order should have been entered.

In Syllabus Point 3, the court adopted the "apex deposition rule" as follows:

3. When a party seeks to depose a high-ranking corporate official and that official (or the corporation) files a motion for protective order to prohibit the deposition accompanied by the official’s affidavit denying any knowledge of relevant facts, the circuit court should first determine whether the party seeking the deposition has demonstrated that the official has any unique or personal knowledge of discoverable information. If the party seeking the deposition cannot show that the official has any unique or personal knowledge of discoverable information, the circuit court should grant the motion for protective order and first require the party seeking the deposition to attempt to obtain the discovery through less intrusive methods. Depending upon the circumstances of the particular case, these methods could include the depositions of lower level corporate employees, as well as interrogatories and requests for production of documents directed to the corporation. After making a good faith effort to obtain the discovery through less intrusive methods, the party seeking the deposition may attempt to show (1) that there is a reasonable indication that the official’s deposition is calculated to lead to the discovery of admissible evidence, and (2) that the less intrusive methods of discovery are unsatisfactory, insufficient or inadequate. If the party seeking the deposition makes this showing, the circuit court should modify or vacate the protective order as appropriate. As with any deponent, the circuit court retains discretion to restrict the duration, scope and location of the deposition. If the party seeking the deposition fails to make this showing, the trial court should leave the protective order in place.

The Court was quick to add that this rule is not blanket prohibition of depositions of high-ranking corporate officials.  However, it is a means of ordering discovery to avoid undue burden and harassment of such officials.

Lincoln's Day saves the day for defendant

In Postlewait v. City of Wheeling, the West Virginia Supreme Court confirmed that legal holidays designated in W.Va. Code § 2-2-1 are "legal holidays" under Rule 6(a) of the West Virginia Rules of Civil Procedure, including "Lincoln's Day." Therefore, they are excluded in calculating deadlines of fewer than 11 days:

The question we must therefore resolve is, does the term "legal holiday" in Rule 6(a) of the Rules of Civil Procedure include "Lincoln's Day" (the Friday after Thanksgiving Day) or any other legal holiday designated by the Legislature in W.Va. Code, 2-2-1? We hold that it does.

In this case, the 18 calendar days between the November 19, 2010, judgment order and the December 7, 2010 motion for a new trial were only ten "Rule 6" days due to all of the weekends and holidays.  Therefore, the motion for a new trial was timely filed.

Changes to Jurisdiction, Removal and Venue Statutes Now Effective

On Wednesday, December 07, 2011, President Obama signed into law H.R. 394, the "Federal Courts Jurisdiction and Venue Clarification Act of 2011," which amends the statutes dealing with jurisdiction and venue of civil actions in U.S. district courts, including procedures for removal of cases from state courts.

For Fourth Circuit practitioners, one of the more important changes relates to the 30-day time limit for defendants to remove a case. You may recall there was a split of circuits on the so-called "last served defendant rule."  The Fourth Circuit itself was even split on this issue.  There were two different opinions in Barbour v. Int'l Union United Auto. Aerospace, a 2010 opinion adopting the last-served defendant rule, and a later 2011 en banc opinion adopting the "McKinney Intermediate Rule".  No use going into details because this new law settles the question once and for all.

Under the newly amended 28 U.S.C. 1446(b), each defendant now has 30 days to remove from receipt or service of the initial pleadings. The new 1446(b)(2) reads:

(A) When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action.

(B) Each defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons described in paragraph (1) to file the notice of removal.

(C) If defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier-served defendant did not previously initiate or consent to removal.

This avoids unfair prejudice to the later-served defendant where an earlier-served defendant blew his deadline.

The new law also has some other provisions you will want to review.  It

• allows removals in diversity cases beyond one year where the court “finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing the action.”
• adopts a “preponderance of the evidence” standard for proving the amount in controversy and makes some other changes to the amount in controversy proof requirements; and
• allows removal of cases involving both removable and non-removable claims with required severance and remand of certain non-removable claims; and
• allows venue changes by consent of all parties

This law does a lot to improve defendants' access to the federal courts.

Supreme Court recognizes "ministerial exception" to employment discrimination laws

Yesterday, the Supreme Court recognized, for the first time, a “ministerial exception” to employment discrimination laws, holding that churches and other religious organizations are free to choose their ministers without government interference. Hosanna-Tabor Church v. Equal Employment Opportunity Commission, No. 10-553 (Jan. 11, 2012).

Writing for the unanimous court, Chief Justice Roberts stated that allowing anti-discrimination lawsuits against religious organizations could force churches to take religious leaders they no longer want.

"Such action interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs ... By imposing an unwanted minister, the state infringes the Free Exercise Clause, which protects a religious group's right to shape its own faith and mission through its appointments."

The Court avoided creating a set of "hard and fast" rules regarding who is a religious employee of a religious organization.  "We are reluctant ... to adopt a rigid formula for deciding when an employee qualifies as a minister ... It is enough for us to conclude, in this, our first case involving the ministerial exception, that the exception covers Perich, given all the circumstances of her employment."