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January 18, 2020

Why Standards for the Appellate Court Need to Be Higher

For many citizens, appellate courts represent a venue of last resort when seeking to rectify failures by trial courts.

Two elements of civil law, however, act as a barrier to equality under the law: The discovery rule and the lengthy, expensive process of petitioning courts for a hearing. Together, these two obstacles combine to provide a legal pathway for deep-pocketed and lawyered-up defendants to run out the clock on disadvantaged plaintiffs.

The discovery rule and statute of limitations

Most civil lawsuits are constrained by a rule called the statute of limitations, which limits the time plaintiffs have to initiate legal action. The statute of limitations “tolls” -- as in, the clock to file suit begins -- from the date at which a defendant could reasonably be expected to have discovered their “injury”.

The discovery rule, in theory, safeguards defendants like attorneys, doctors, and drugmakers from frivolous or belated legal actions. However, by protecting defendants from litigation, the discovery rule can create a sometimes-insurmountable obstacle to plaintiffs.

In some cases, the date from which a plaintiff can reasonably be expected to have “discovered” their injury is subjective. That’s why a rigid statute of limitations subject to a discovery date open to interpretation by judges in trial court often prevents plaintiffs from seeking redress through the courts.

For instance, in attorney malpractice cases, a client operating under an assumed good-faith expectation of legal representation may not learn of any fraudulent actions by their attorney until a date that precludes bringing suit under the rules of discovery.

In medical malpractice cases, the discovery rule and statute of limitations also present a unique obstacle. Because the particular cause of harm in often complex cases of medical malpractice is not always evident, establishing the exact date of discovery is subjective. For example, an incorrect or partial diagnosis, followed by an unsuccessful treatment may not necessarily reveal an obvious initial date from which to “toll” the statute of limitations.

To ensure equal, accessible justice before the law for all, these two elements of civil law need to be reformed. The following appellate cases illustrate how the discovery rule and statute of limitations be a serious barrier to justice in instances of both attorney and medical malpractice:

The case of Geoffrey Hammond

The case of Geoffrey Hammond illustrates how the rigidity of the discovery rule in some states can effectively deny any avenue for legal redress in instances of attorney malpractice. In 2012, Geoffrey Hammond joined with three family members in hiring attorneys David F. Wentzel and Scott Blake to represent their interests in a complex inheritance dispute over their family’s significant assets. Hammond contends that his attorneys fraudulently and explicitly ignored his stated directives and interests by misrepresenting ongoing settlement negotiations.

Ultimately, Hammond’s case was dismissed by the Illinois appellate court as “time-barred” under the state’s two-year statute of limitations for legal malpractice suits. This ruling presumed Hammond should have discovered his injury “at the very latest, upon the entry of the binding arbitration award that determined the enforceability of the March mediation settlement that he ‘vehemently’ disagreed with.”

However, this ruling ignores the exigencies of Hammond’s case and highlights the practical deficiencies of many states’ discovery rules. If Hammond was unaware of his attorneys’ alleged malpractice until his family’s asset divestiture began in November 2013 -- several months after a settlement was reached -- how can the statute of limitations have “tolled” any earlier than that date? Apparently, he should have been aware his attorneys were lying and this not relied upon their advice.

The Risperdal lawsuit

The long, complicated path of a lawsuit filed against Johnson & Johnson over their marketing of the antipsychotic drug Risperdal also demonstrates the shortcomings of the discovery rule when applied to medical malpractice.

Originally released in 1993, Risperdal was initially FDA approved only for the treatment of adults with schizophrenia. However, Risperdal was widely marketed and prescribed as a treatment for a variety of mental health disorders in children that went well beyond the drug’s FDA guidelines.

A lawsuit brought by Nicholas Murray in 2013 alleged that the plaintiff developed gynecomastia  -- a condition that causes the development of female breast growth in males -- after being prescribed Risperdal for an “off-label” non-FDA approved use in children.

A Pennsylvania trial court initially ruled against Murray, arguing that punitive damages were “time-barred” under the discovery rule, as the symptoms of Murray’s gynecomastia accrued no later than June 30, 2009. Subsequently, a Pennsylvania appellate court affirmed the trial court’s ruling that the plaintiff’s further legal actions against Johnson & Johnson in 2014 exceeded the state’s two-year statute of limitations. However, the appellate court’s ruling was overturned by the state supreme court in 2018, and in October 2019 a Philadelphia jury awarded an $8 billion verdict to Murray.

While Murray ultimately overcame the restrictive discovery rules in his suit against Johnson & Johnson, it was also a highly unusual situation. Consider that it took a high-profile, media-intensive nationwide suit -- over 13,000 individuals have sued Johnson & Johnson over Risperdal -- against a household-name drug manufacturer to overcome Pennsylvania’s discovery rule.

If successful litigation in such cases requires a decades-long, media-friendly case, without significant reforms to the appellate court and discovery rule, what chance does the average plaintiff have against a wealthy, lawyered-up defendant?

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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