Businesses Subject to Thousands in FCC Fines for Illegal Wi-Fi Blocking

No Wi-Fi

The FCC has put the nation’s major hotel chains, restaurants and other big businesses on notice: Wi-Fi hotspot-blocking is “patently” illegal. The FCC’s most recent example since its January announcement to pursue these consumer complaints is the largest corporation yet: Hilton Worldwide Holdings, Inc.

Consumer Complaints Reach FCC

A consumer complaint – similar to those lodged against other big businesses – alleged that Hilton was blocking visitors’ Wi-Fi at an Anaheim, California location. The complaint further alleged Hilton forced hotel guests to pay a $500 fee just to access Hilton’s Wi-Fi. Additional complaints alleged similar Wi-Fi blocking at many Hilton-brand properties

The FCC Enforcement Bureau sent Hilton a letter of inquiry in November 2014. The Bureau’s letter requested specifics regarding Wi-Fi management practices at various Hilton-brand properties in the United States. Now, one year later, Hilton has yet to provide the FCC with the requested information for the vast majority of its properties.

The FCC proposed a $25,000 fine against Hilton for “apparent obstruction of an investigation into whether Hilton engaged in the blocking of consumers’ Wi-Fi devices.” The proposed fine against Hilton includes a demand by the FCC requesting the hotel giant immediately provide the essential information about its Wi-Fi practices. The FCC also warned Hilton that it may face significantly higher fines for continued obstruction or delay.

FCC Investigations of Major Hoteliers

Hilton is not the first hotel chain to receive a fine, and this recent number pales in comparison to the FCC’s previous reprimands. The Commission received a complaint in March 2013 from a patron of Nashville, Tennessee’s Gaylord Opryland Hotel. The individual alleged the Gaylord Opryland was “jamming mobile hotspots so you can’t use them in the convention space.”

The FCC’s Enforcement Bureau launched an investigation into the Wi-Fi practices of Marriott, which has managed the day-to-day operations of the extravagant hotel since 2012. The Bureau found the Marriott had used features in a Wi-Fi monitoring system to contain and/or de-authenticate guest-created Wi-Fi hotspot access points in the conference facilities.

The investigation revealed Marriott employees would even send de-authentication packets to the targeted convention center access points to dissociate consumers’ devices from their own personal Wi-Fi hotspots. This practice disrupted consumer communications, transmissions, and overall cell phone use throughout the entirety of convention attendance. At the same time Marriott engaged in these practices, it charged convention exhibitors and other attendees anywhere from $250 to $1,000 per device just to use the Gaylord Opryland Wi-Fi service.

In a public October 2014 release, the FCC announced Marriott agreed to pay a $600,000 civil penalty to resolve the unlawful Wi-Fi blocking it engaged in. Still yet, the FCC’s fines do not stop there. The Commission announced a $718,000 fine against M.C. Dean, one of the nation’s largest electrical contracting companies, earlier this month.

Wi-Fi Blocking: Inexcusable and Unlawful

The FCC investigated systems integrator M.C. Dean for blocking Baltimore Convention Center visitors’ personal mobile hotspots. Exhibitors who tried to use their own data plans at the convention center to connect to the Internet were instead forced to pay M.C. Dean substantial fees to use the company’s Wi-Fi service. Trade show and convention telecom services provider Smart City Holdings LLC was fined $750,000 for Wi-Fi blocking at several sites in August.

The Commission has made it clear: there is absolutely no excuse for business establishments to block Wi-Fi personal hotspots while charging fees. Hoteliers, service providers and restaurants have been put on notice by the FCC to shape up, stating, “The Commission again urges hotels, convention centers, and other commercial establishments to review their practices to ensure that there is no unlawful blocking of Wi-Fi communications.”

Federal Statutes: 47 U.S.C. §§ 401, 501, 503, 510; 47 C.F.R. § 1.80(b)(3).

Ford Focus “Tire Eater” Class Action Regains Traction from Ninth Circuit

546b5585a9359_-_2005-ford-focus-st-lgA Ninth Circuit judge reinstated a class action suit against Ford for consumers who purchased a 2005-2011 Focus.

The plaintiffs alleged the models had a rear-suspension “alignment/geometry” defect that caused the rear tires to wear prematurely. The order states that plaintiffs had rear tires replaced for the first time between 12,086 and 20,723 miles.

Ford was charged with knowing or should have known about the defects and failed to disclose to consumers at the time of sale.

The California plaintiffs claimed a breach of implied and express warranties, as well as fraud in the sale of Ford Focus models sold between 2005 and 2011.

For a de novo review on appeal, the Ninth Circuit addressed whether the district court’s summary judgment on the implied warranty under the Song-Beverly Consumer Warranty Act (“Act”) and express warranty claims was improper.

Implied Warranties under the Act

The Act addressed the duration of time an implied warranty of merchantability and fitness would last following the sale of a consumer good. It specifically stated that “each consumer good sold at retail in the state shall be accompanied by the manufacturer’s and the retail seller’s implied warranty that goods are merchantable.”

The deadline prescribed was no more than one year after purchase. However, previous court decisions ruled that there was “no requirement that a consumer report discover and report a latent product defect within [one year] unless there is convincing evidence to decide differently.” Mexia v. Rinker Boat Co. 95 Cal. Rptr. 3d 285, 295 (Ct. App. 2009).

Based on a lack of evidence that the state’s highest court would change its decision from Mexia, the court reversed summary judgment on the implied and express warranty claims.

Express Warranty Claims

Ford created express warranties through the distribution of the New Vehicle Limited Warranty. The information served as an affirmation of fact or promise that the vehicle would operate properly.

Both parties argued that the warranty was ambiguous. Ford argued the warranty only applied to manufacturing defects and the plaintiffs argued it guaranteed against any design defects.  Ford’s warranty expressly referenced defects that are a part of the “design.” The court concluded that the warranty could apply to both manufacturing and design defects and reversed the district courts summary judgment.

Fraud Claims

To be successful in a claim of fraudulent omission the court stated there must be actual reliance. A plaintiff is required to show that:

  • The defendant’s non-disclosure was an immediate cause of the plaintiff’s injury-producing conduct.
  • It was a substantial factor in his decision, and
  • The omission was material causing one to behave differently.

 

The worn tires created  safety hazards such as decreased stability, handling, steering, and braking. Safety hazards are considered a material omission, the court stated.

Additionally, the plaintiff would need to show there would have been aware of a disclosure had one been made.

Had Ford made the disclosures through authorized dealerships, the plaintiffs would have been aware of the defect and made any changes. All warranty repairs had to be performed by authorized dealerships.

A sufficient inference could be made that a reasonable consumer would have depended on the information communicated to dealerships on issues with their cars, had they been told. The lower court was instructed to reconsider the plaintiff’s motion for class action.

This case is Margie Daniel et al. v. Ford Motor Co., case number 13-16476, in the U.S. Court of Appeals for the Ninth Circuit.

Mirena IUD Brain Injury Action Denied MDL Transfer

Mirena IUDA United States Judicial Panel on Multidistrict Litigation (MDL) has denied the transfer of nine pending actions against intrauterine device (IUD) maker Bayer Healthcare Pharmaceuticals, Inc. (Bayer).

The nine actions that are pending in six districts assert that the synthetic hormone, levonorgestrel, released by the Mirena IUD results in a neurological condition called pseudotumor cerebri or idiopathic intracranial hypertension.

Progesterone hormone released

Levonorgestrel is a type of progesterone hormone that prevents pregnancy by thickening a woman’s cervical mucus, creating an impenetrable barrier for sperm.  It also restricts uterine lining thickness, which affects fertilization and prevents pregnancy.

Intracranial hypertension causes abnormal elevation of cerebrospinal fluid in the skull which may cause symptoms of severe migraine headaches, tinnitis (ringing in the ears), vision loss, swollen optic nerves and possible blindness. In severe cases, placement of a shunt to drain the fluid in the skull is recommended, according to a memorandum in support of the transfer to an MDL court.

Centralization not warranted

The judicial panel discussed that some characteristics of the litigation would benefit from centralization in an MDL docket, but ultimately found that centralization was not warranted.  The nine actions share factual issues arising from the synthetic hormone released by the Mirena IUD, and charge that Bayer failed to warn consumers of the risks associated with its use.

However, the court was unconvinced that centralization was necessary for convenience and efficient litigation in the matter because a single plaintiffs’ counsel filed all nine actions naming Bayer as the defendant in each.  Bayer has national counsel coordinating its response to the litigation and is willing to share any overlapping discovery.

The court stated, “given the few involved counsel and limited number of actions, informal cooperation among the involved attorneys is both practicable and preferable to centralization.

Unlike pending Mirena MDL litigation

The court agreed with Bayer’s assertion that unlike the MDL No. 2434 litigation involving Mirena IUD for uterine perforation and migration injuries, the neurological symptoms alleged in this case are nonspecific and would require “fact-intensive inquiry over whether each plaintiff was properly diagnosed.”

The plaintiffs also acknowledged that the symptoms of intracranial hypertension at issue in this case are also regularly diagnosed in individuals who do not use Mirena.

The court lastly found that the mere possibility of six additional related actions still did not warrant centralization and denied the plaintiff’s motion to transfer the case to an MDL court.

 

The case is In RE: Mirena IUS Levonorgestrel-Related Products Liability Litigation, Case MDL number 2559 in the United States Judicial Panel on Multidistrict Litigation.

Florida Supreme Court Lowers Burden for Products Liability Plaintiffs

Asbestos

The Supreme Court of Florida reinstated a $6.6 million jury verdict for a man who contracted mesothelioma from working with asbestos materials mined by Union Carbide Corp. The 5-2 reinstatement decision lessens the burden of proof for products liability plaintiffs like William Aubin, the Florida man who suffered the asbestos-related side effects.

Clear Causation

Aubin was exposed to the asbestos materials contained in a product called SG-210 Calidria. Aubin used this Georgia-Specific texture spray made of joint compounds while working as a home builder in the 1970s. Union Carbide was aware that using joint compounds and texture sprays would create respirable dust . . . and could ultimately cause both asbestosis and mesothelioma.

At trial, Aubin presented expert testimony that concluded exposure to respirable Calidria fibers causes mesothelioma. Mesothelioma is a tissue tumor that lines the lungs, stomach, heart, and other organs. Aubin’s expert testimony and evidence of Union Carbide’s knowledge was sufficient to permit the jury to make a causation determination.

On the district level, Union Carbide argued that Aubin, as the plaintiff, should bear the burden of proving a better, alternative design for the spray. The Florida Supreme Court disagreed, stating:

“There is absolutely no requirement . . . nor has this Court ever adopted a requirement as set forth in the Third Restatement, that the plaintiff must either present proof of a reasonable alternative design or establish that the product was manifestly unreasonable before the requirement of proof of an alternative design could be excused. The parties may, in proving or defending against such claims, present evidence that a reasonable alternative design existed and argue whether the benefit of the product’s design outweighed any risks of injury or death caused by the design.”

Florida Supreme Court Justice Barbara J. Pariente reasoned that the Third District’s decision was directly in conflict the state Supreme Court and several other district courts of appeal. The Florida high court even warned that the jury instruction presented at trial was so misleading it warranted a reversal.

The Best Test

The District Court improperly applied the risk utility test in direct conflict with the Florida Supreme Court’s consumer expectation test. By requiring a plaintiff to prove that a manufacturer should have foreseen a product’s risks, the Court held:

“[T]he risk utility test imposes a higher burden on consumers to prove a design defect than exists in negligence cases — the antithesis of adopting strict products liability in the first place. Increasing the burden for injured consumers to prove their strict liability claims for unreasonably dangerous products that were placed into the stream of commerce is contrary to the policy reasons behind the adoption of strict liability [claims] in the West.”

The majority ultimately concluded that the verdict reinstatement was sufficient and a new trial was not warranted, but Justice Ricky Polston (dissenting) and Justice Charles Canady (concurring) disagreed on this point. Union Carbide requested a jury instruction on the learned intermediary defense, and Justices Polston and Canady believed the facts at trial were sufficient to warrant the defense.

The Florida Supreme Court’s opinion has potentially far-reaching effects because the Court did not limit its rulings to Aubin’s case only. The potential impact of the ruling drew amicus briefs from the U.S. Chamber of Commerce, the Coalition for Litigation Justice, Florida Consumer Action Network and the Florida Justice Association, to name a few.

The case is William P. Aubin v. Union Carbide Corporation, No. SC12-2075 (October 29, 2015) decided by Pariente, J. in the Supreme Court of Florida.

Florida Condo Owners to Proceed on Loss of Value from Stigma Claim

Chinese DrywallThe Fifth Circuit Appeals Court affirmed a lower court’s decision to allow a condo owner to proceed in a class-action against a condominium developer and drywall supplier for the loss of market value to their condo’s as a result of the stigma of being associated with the faulty condominium building.

Developer Used Chinese Drywall

Sixty-Fifth and One, LLC (Sixty-Fifth) developed a Florida Condominium complex, Lauderdale One, using drywall supplied by Banner Supply Company Pompano, LLC (Banner).  The drywall used to construct one of the condo buildings, Building One, was Chinese Drywall that was imported to the United States from 2005-2008.

Inhabitants of buildings containing the Chinese Drywall noticed corrosion of metal building components, electrical wiring issues, and experienced physical ailments including skin irritation and respiratory problems.

After federal actions were brought against Sixty-Fifth and Banner and transferred to a multi-district litigation panel, both reached settlements in the class actions claims against them in 2013.

Loss of value from stigma

Ralph Mangiarelli, Jr. owned a condo at the Lauderdale One Condominium complex, but in Building Two, where the Chinese Drywall was not used.  Mangiarelli and other Building Two residents filed a class action complaint against Sixty-Fifth and Banner for the loss to the market value of their condos as a result of being associated with Building One, even though their own walls are not built with the Chinese drywall.

Sixty-Fifth and Banner asked that the district court enjoin Mangiarelli’s claims, arguing that they were barred because Mangiarelli did not opt out of the previous settlement agreements made. The district court rejected the argument and denied Sixty-Fifth and Banner’s motions to enjoin Mangiarelli.  It also denied their motion to reconsider.

On appeal, the Fifth Circuit court affirmed the district court’s decision, finding that it did not err in denying Sixty-Fifth and Banner’s motions.  The court rejected Sixty-Fifth and Banner’s argument that Mangiarelli’s claims fell within the scope of the original settlement agreements because they arose from claims related to the Chinese Drywall.

“Nonsensical” to require opt out

The court clarified that because the opt out provisions from the original settlement case contemplated only plaintiffs seeking damages to an “affected property, the opt out did not apply to Building Two.  The court stated, “it spurns simple reasoning to require individuals to opt out of a settlement agreement under which they were never entitled to compensation.”

Sixty-Fifth and Banner also attempted to argue that individuals could be class members and barred from recovery.  The court rejected the argument and agreed with the District court that it would be “nonsensical” to find that Mangiarelli was a class member under the original settlement agreements.

The court refused to address Sixty-Fifth and Banner’s argument that Mangiarelli had a shared ownership interest in the common area of Building One, giving him a sufficient connection to the property to make him a class member under the original agreement.

The court refused because the issue was addressed for the first time on appeal. In a footnote, the court stated that even if it had addressed the argument, it was a misguided one because Mangiarelli is not suing for damages to the common area, but instead for the stigma that came from the use of the Chinese Drywall.

The case is Ralph Mangiarelli, Jr. v. Sixty-Fifth and One, LLC; Banner Supply Company Pompano, LLC., case number 14-31355, in the United States Court of Appeals for the Fifth Circuit.

 

$10 Million Settlement Reached in California Lead Poisoning Suit

shutterstock_301605446Thanks to a $10,000,000 settlement, a California family can move forward and care for their son after the child was diagnosed with severe lead poisoning, after the property manager failed to remove hazardous paint from the premises.

The Nolan family rented a home from Carltrans, the defendants. The home showed visible signs of damage including chipped paint in and outside of the home. Despite the damage, Caltrans treated the damage as cosmetic and failed to make the necessary repairs.

Failed to remove the lead-based paint

The Nolan’s argued Caltrans were negligent because it failed to remove the lead-based paint from the rental property. Lead-based paint poses a hazard when it is disturbed or turns into dust.

The family filed suit in 2013 after a 2012 blood test discovered the young child was lead poisoned. As a result of his exposure the child suffers from permanent brain damage and is unable to form words. The child had been exposed to lead-based paint since he was 16 months old.

The Caltrans were cited by the Los Angeles Department of Public Health, but the Caltrans took five months to remove the lead from the home.

The child will require extensive care for the remainder of his life. The plaintiffs were prepared to present a number of expert witnesses but the case settled after a second mediation session.

Helpful Tips Here: Why Lawyers Fail

Matthew S. McNicholas & Phillip Shaknis of McNicholas & McNicholas, Los Angeles , CA represented plaintiff. Matthew S. McNicholas is a Top 100 member of the The National Trial Lawyers.

This case is Connor Michaels Nolan et al. v. State of California, Department of Transportation, Case No. BC503484, Los Angeles Superior Court, Central District.

Horrors of Forced Arbitration Spreading Far and Wide

unfair arbitrationThe New York Times just published an extensive investigation into how Wall Street and corporate America pursued a deliberate, corrupt and insidious attack on the American consumer.

It reports on “a far-reaching power play orchestrated by American corporations” in a series of articles, titled “Arbitration Everywhere, Stacking the Deck of Justice.”

By “inserting individual arbitration clauses into a soaring number of consumer and employment contracts, companies like American Express devised a way to get around the courts and bar people from joining together in class-action lawsuits, realistically the only tool citizens have to fight illegal or deceitful business practices.”

Class-action bans

The Times notes that “over the last few years, it has become increasingly difficult to apply for a credit card, use a cellphone, get cable or Internet service, or shop online without agreeing to private arbitration,” as well as “getting a job, renting a car or placing a relative in a nursing home.” According to the Times, “some state judges have called the class-action bans a ‘get out of jail free’ card, because it is nearly impossible for one individual to take on a corporation with vast resources.”

“Forced arbitration is a corporate bullying tactic designed to kick people out of court and eliminate their right to seek justice. It’s a rigged system set up by corporations to favor corporations,” said American Association for Justice CEO Linda Lipsen.

“Big businesses are using fine print to take away the rights of consumers, patients, and workers.  Unfortunately forced arbitration has infiltrated nearly all aspects of American life.  Americans are subjected to forced arbitration clauses when they use credit cards, talk on their cell phones, visit websites, start a new job, and even admit a loved one into a nursing home. Corporations use forced arbitration because they know that when they lie, cheat, and steal from the public, the fine print gives them a free pass to break the law and evade all accountability.”

The New York Times reports that Deborah L. Pierce, an emergency room doctor in Philadelphia, “was optimistic when she brought a sex discrimination claim against the medical group that had dismissed her,” but “she began to worry, though, once she was blocked from court and forced into private arbitration,” where a corporate attorney who also handled arbitrations ultimately ruled against her.

An investigation by the Times found that arbitration “often bears little resemblance to court,” and that “over the last 10 years, thousands of businesses across the country – from big corporations to storefront shops – have used arbitration to create an alternate system of justice.” Under arbitration, “rules tend to favor businesses, and judges and juries have been replaced by arbitrators who commonly consider the companies their clients, The Times found.”

Zofran Birth Defects Will Lead to a Rise in Mass Tort Litigation

belly of pregnant woman and vitamin pills in the hand

The rise of mass tort litigation continues with a focus on Zofran, an anti-nausea drug. The FDA approved Zofran for women undergoing chemotherapy. Later, Zofran was illegally marketed to pregnant women for the off-label use of treating morning sickness, which caused serious birth defects.

Birth Defects

Several years ago, GlaxoSmithKline – the manufacturer of Zofran – reached a $3 billion settlement with the Justice Department for the fraudulent marketing. A multidistrict litigation (MDL) docket was subsequently created in Philadelphia, and the first cases were filed in 2014.

Zofran has been on the market since 1991, and evidence shows approximately 30,000 children were born with birth defects because of the drug’s off-label use.

A mass tort is ordinarily a product liability case where hundreds of plaintiffs file suit collectively against a pharmaceutical company. These cases are typically collected into one of 300 federal MDL dockets.

The average settlement value for a single plaintiff is $600,000. This appears to be the cost of doing business to GlaxoSmithKline. The types of birth defects caused by Zofran are similar to the birth defects caused by Paxil, a drug with a currently high settlement value. Thus, it is safe to assume the settlement value of defects caused by Zofran will be similar, too.

The 2012 GlaxoSmithKline criminal case does not affect the settlement value in civil cases.

According to senior consultant and former pharmaceutical executive John Ray, “Zofran is in the early stages of the litigation. We estimate that it will take six years, from this point, for an investment in the Zofran case to pay return on [plaintiff attorneys’] investments.” This is the cost of doing business for mass tort plaintiffs’ attorneys interested in pursuing Zofran litigation.

Deep Pockets

A decision to form the MDL is expected any time. GlaxoSmithKline (GSK), the second-largest pharmaceutical company in the world by revenue, has deep pockets. In fiscal year 2010, GSK generated revenues of £28.4 billion and net earnings of £1.85 billion after taxes.

Products liability lawyers are currently marketing heavily to find mass tort clients. Marketing expert Steve Nober, CEO of the Consumer Attorney Marketing Group, says that Zofran is one of the most advertised mass tort campaigns out there.

In June, 2015, one mother asserted that she started using Zofran to prevent nausea and vomiting in her first trimester of pregnancy. Six months later, she gave birth to a baby girl who was born with “hole in the heart” defects.The little girl needed surgery immediately.  Her heart defects included ventricular septal defect and atrial septal defect.

In addition to deadly heart defects, Zofran has also caused cleft lip and palate in newborns. One anonymous little girl has undergone ten surgeries to correct her cleft lip and palate. Her mother alleged that her birth defect impairs her development and enjoyment of a normal life both at home and at school.

Personal injury lawyers should expand their practices in the area of Zofran mass tort litigation and keep informed of the MDL progress.

Supreme Court Upholds $236 Million Jury Award Against ExxonMobil

Supreme Court Upholds $236 Million Jury Award Against ExxonMobil

ExxonMobil knew of the risks associated with adding MTBE to gasoline and failed to warn the State or the EPA.

The New Hampshire Supreme Court affirmed today the $236 million jury verdict in favor of the State of New Hampshire against ExxonMobil for its role in contaminating the State’s groundwater with the toxic compound MTBE (Methyl Tertiary Butyl Ether).

After the longest trial in state court history, a New Hampshire jury found in April 2013 that ExxonMobil was responsible for the widespread presence of MTBE in the state’s drinking water.

The Attorney General in 2003 hired law firm Sher Leff PC in San Francisco to be co-lead counsel with the New Hampshire Attorney General’s Office.  Sher Leff specializes in representing cities, states and other public sector clients to solve some of their most challenging contamination problems.

ExxonMobil knew of the risks

“Our goal is to ensure that the cost associated with the contamination of drinking water is paid for by those who are responsible for the pollution, not the citizens.  The Supreme Court’s decision confirms what was presented to the jury – that ExxonMobil knew of the risks associated with adding MTBE to gasoline and failed to warn the State or the EPA about those dangers.  It sends a clear message to companies that they are responsible for the environmental consequences of their business decisions,” co-founder Vic Sher said.

In the trial, the jury awarded the State of New Hampshire its costs of cleaning up New Hampshire’s drinking water contaminated with MTBE.  The jury found ExxonMobil disregarded warnings from its own environmental engineers to not use the chemical on a widespread basis because of its threat to the nation’s drinking water supply.

Vic Sher said, “Today’s decision by the Supreme Court underscores the jury’s conclusion that this problem could have been avoided and the citizens of New Hampshire should not have been exposed to the dangers associated with MTBE contamination.”

The Supreme Court’s decision upheld the allocation to ExxonMobil of 28.94% of the total $816 million verdict.  This was based on ExxonMobil’s total share of MTBE gasoline that was distributed in the state.  All the other oil companies settled either before or during trial.

The case is State of New Hampshire v. Hess Corp., New Hampshire Supreme Court Case Nos. 2013-0591 and 2013-0668.  For more information, visit www.sherleff.com.

$20.5M Verdict Upheld Against Jack in the Box for Not Preventing Parking Lot Brawl

Jack AttackA Missouri Court of Appeals upheld a $20.5 million jury verdict awarded to a St. Louis man who was in a two-year coma after suffering permanent brain damage from an attack that occurred in a Jack in the Box restaurant parking lot.

Ali Aziz, by and through his mother, brought a claim against Jack in the Box for premises liability resulting from an attack by five partygoers who were loitering in the parking lot of a 24-hour Jack in the Box in the early morning hours one weekend. The attackers pleaded guilty to assault and were sent to prison.

Disruptive group attacked man

The group of attackers called the “Lane group” arrived to the parking lot sometime before 5:00 am in a car driven by Johnnie Lane. The group played loud music while dancing and roaming the parking lot and drive through lane of the Jack in the Box.  Their disruption, including dancing and jumping on the hoods of other drive-through customers, lasted from 30 minutes to an hour causing customers to honk and pull away from the restaurant.

Aziz arrived to the parking lot was engaged by several members of the Lane group.  A fight broke out, and Aziz was knocked to the ground, beaten and kicked in the head repeatedly by the group for 90 seconds. The Lane group then robbed him and left him lying unconscious, bleeding on the ground.

At 5:18 am, a customer in the drive-through lane called the police, who arrived at 5:27 am. The Jack in the Box manager did not call the police until 5:26 am — and then only after an employee asked him twice to call.

Aziz was unable to breathe on his own and suffered a skull fracture, jaw fracture, and brain damage.  He spent two months in the intensive care unit of the hospital, and remained in a coma for approximately two years.  He now suffers from permanent brain damage and is unable to sit, stand, or walk and requires constant care.

Trial jury grants award

During the two-week trial, a certified life care planner, relying on the medical opinions and care billed by Aziz’s treating physician Dr. Witt Jamry, prepared a plan for all future care of Aziz, and concluded total lifetime costs would be $19,298,000.  Treating physician Dr. Jamry submitted testimony via a videotape deposition, and agreed with the numbers provided by the certified life care planner.

Jack in the Box attempted to impeach Dr. Jamry by introducing his federal court heath care fraud conviction, which the trial court denied.

The jury awarded Aziz $25 million, but reduced it to $20.5 million, finding Aziz 18 percent at fault. Jack in the Box filed a motion for judgement notwithstanding the verdict or for a new trial, which the trial court denied. On appeal, the Missouri appeals court upheld the trial court’s decision, affirming the $20.5 million verdict.

Restaurant claims no duty owed

On appeal, Jack in the Box claimed that the trial court erred because it did not owe Aziz a duty to protect him against third parties and because Aziz was not an invitee of the restaurant.

The court disagreed, writing that state law recognized that a duty for business owners is triggered when it knows a third party to be violent or behave in a dangerous way on the business premises.

Because the restaurant was aware that its 24-hour openings made it a greater target for crime, even referencing Jack in the Box’s policies that recognized the threat of crime that could arise due to ate night disruptive loitering.

Jack in the Box policy required that action be “taken immediately” when disruptive activity was present on its premises because it leads to “fighting, injury, or other danger to people on the premises.”  The court further discussed that the restaurant even had a “duress button” and “red phone” they did not use, which would have contacted their outside security service.

The court found that Jack in the Box did have a duty to protect Aziz against third parties on their property and further found that Aziz was an invitee deserving protection of the Jack in the Box restaurant because at the time of attack, he was on the property as a potential customer.

Court denied new trial

The court also denied Jack in the Box’s claim it should be granted a new trial because the court erred in refusing to allow the impeachment of Dr. Jamry based on his fraud conviction.  The court ruled his testimony did not materially affect the merits of the case.

Further, Jack in the Box did not offer any evidence to rebut the material facts in Dr. Jamry’s testimony, “did not call its own medical expert or life care planner at trial, and did not have Aziz examined by its own physician.  The court upheld the lower court’s ruling and jury award of $20.5 million.

 

The case is Aziz v. Jack in the Box, Inc., Case number 1122-CC0629 in the Missouri Court of Appeals Eastern District.