There used to be a saying: "The father may be unknown, but the mother is never unknown." That saying no longer has relevance, thanks to modern science. Actor Matthew Broderick and his wife, actress Sarah Jessica Parker, are the proud parents of twin girls. Broderick and his wife are the biological parents of the twins, who were carried by a surrogate. Another Hollywood couple, married when California's same-sex marriage law was valid, plan to have a child. The egg of one will be fertilized by a sperm donor and implanted into the other. The fast-changing world of reproductive technology, marriage, and relationships is creating a burden on the courts as they attempt to apply current, but often archaic, laws to modern situations.
A New York surrogate court was faced with just such an issue recently. In the case of In re Adoption of Sebastian, 879 N.Y.S.2d 677 (Sur. Ct. 2009) (slip op.), a same-sex couple living in New York had been legally married in the Netherlands. One of the parties was a Dutch citizen, and the other, a U.S. citizen of Somali/Yemeni heritage who had had an international upbringing. The couple decided to have a child. An egg from one was fertilized by a sperm donor and implanted into the other. After the child was born, a birth certificate was issued, naming the gestational mother, not the biological mother, as the parent. The biological mother then sought to adopt the child.
The New York Surrogate Court's opinion is lengthy, but it acknowledges that although statutory and common law continue to expand to encompass an ever-changing world of parental relationships, artificial reproductive technology continues to outpace the law:
Id. at 680 (footnotes omitted).These physiological possibilities, combined with the inadequacy of pre-existing legal frameworks, have generated a vast and confusing landscape involving controversies over "surrogacy," "ownership" rights to frozen embryos (Kass v. Kass, 91 N.Y.2d 554, 673 N.Y.S.2d 350, 696 N.E.2d 174 [1998]), fertility clinic errors (Perry-Rogers v. Fasano, 276 A.D.2d 67, 715 N.Y.S.2d 19 [1st Dept. 2000]), and custody and visitation disputes between genetic and gestational mothers (e.g. K.M. v. E.G., 37 Cal.4th 130, 33 Cal.Rptr.3d 61, 117 P.3d 673 [2005], supra (previously cohabiting domestic partners); Johnson v. Calvert, 5 Cal.4th 84, 19 Cal.Rptr.2d 494, 851 P.2d 776 [1993], cert. denied 510 U.S. 874, 114 S.Ct. 206, 126 L.Ed.2d 163 [1993]) (wife whose ovum was fertilized in vitro by her husband's sperm then implanted in surrogate/gestational mother).
The court discussed all of the issues involved in this type of case, from the Defense of Marriage Act to equal protection, constitutional bases, and full faith and credit. Ultimately, the court determined that adoption of the child by the biological mother afforded the best protection of the biological mother's rights.
The court's opinion is well written and researched, and is worth reading in its entirety.
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The doctrine of federal preemption of state law products liability cases, when applicable, constitutes a powerful defense to state tort claims. A finding of federal preemption constitutes an absolute defense to state tort liability in a majority of cases. Given this effect, the preemption defense is frequently raised whenever a particular product is federally regulated. This does not mean, however, that a plaintiff cannot overcome the preemption defense. The recent decision in Stacel v. Teva Pharm., USA, 2009 WL 703274 (N.D. Ill. Mar. 16, 2009), illustrates how the preemption defense may be circumvented in a prescription drug case.
Stacel was decided within weeks after the U.S. Supreme Court rejected the preemption defense under the circumstances presented in Wyeth v. Levine, 129 S. Ct. 1187 (Mar. 4, 2009). In Wyeth, the Court concluded that state law failure-to-warn claims against a prescription drug manufacturer were not preempted by the Federal Food, Drug, and Cosmetic Act (FFDCA), because the manufacturer could have made the changes to its label for which the plaintiff contended under state law, and could have strengthened its warning label despite the label's approval by the Food and Drug Administration (FDA). The Stacel plaintiff filed a state court action against a generic drug manufacturer, alleging that she had contracted drug-induced lupus as a result of ingesting minocycline manufactured by the defendant. The plaintiff set forth state law causes of action for products liability, common-law fraud, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), and punitive damages. The defendant argued that the plaintiff's claims were preempted by the FFDCA.
The court examined each of the plaintiff's representational causes of action in turn. It concluded that the plaintiff had alleged common-law fraud with sufficient particularity in asserting that the manufacturer had misrepresented the risk that minocycline poses for the development of drug-induced lupus by failing to include a warning about that risk in the package labeling. As to the ICFA claim, the court ruled that the plaintiff had set forth with sufficient particularity the circumstances allegedly constituting fraud by alleging that the drug manufacturer had deceptively withheld data as to the risk of drug-induced lupus, that the defendant had done so with the intent to cause consumers to rely on the deception, that the deceptive acts had taken place in the course of commerce, and that the plaintiff had been injured as a proximate result of the defendant's conduct.
The court then turned to the preemption defense. It began by noting that federal preemption may be (1) express, pursuant to preemptive language in the governing statute; (2) implied, based upon a pervasive scheme of federal regulation that allows the reasonable inference that Congress left no room for states to act, or upon a situation where a federal statute touches a field so dominated by the federal interest that the federal system is assumed to preclude the enforcement of state laws on the same subject; or (3) implied, when state law actually conflicts with federal law. The court noted that the purpose of Congress is the ultimate touchstone in all preemption cases and that a court must begin its analysis with the assumption that the historic police powers of the states are not to be superseded by federal law absent the clear and manifest purpose of Congress to that effect.
Applying these principles to the case before it, the court ruled that the plaintiff's state tort claims were not preempted by the FFDCA. The court determined that the labeling requirements of Illinois law did not directly and positively conflict with the FFDCA's labeling mandates since the drug manufacturer retained responsibility for its label at all times, that Illinois law provided appropriate relief for consumers, that Illinois tort law did not frustrate the purpose and intent of Congress to assure that drugs are safe when marketed, and that Congress did not intend FDA oversight to be the exclusive means of ensuring drug safety and effectiveness.
Stacel is yet another example of the ability of a plaintiff injured through the use of a federally regulated product to avoid a preemption defense, despite the existence of substantial federal regulation of the product. It serves as a reminder to counsel for a products liability plaintiff that pervasive federal regulation does not necessarily mean federal control over the remedies available for injuries caused by defective products.
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Often, the parties to a standard business transaction will sign an agreement not to sue for a set period of time. Despite the existence of the nonsue contract, when a serious dispute actually arises, one party will often file a lawsuit against the other. Surprisingly, courts have approached such agreements in diverse fashions.
Basically, "the authorities are split over whether to preclude a lawsuit filed in violation of an agreement not to sue for a limited time." CollectACheck, Inc. v. Check Collection & Recovery, Inc., 2009 WL 1279329, at *1 (D. Colo. May 6, 2009) (slip op.). Some courts have taken the position that an agreement not to sue for a specified period of time bars any lawsuits filed within that time period. These courts reason that the plain language of a contract agreed to by both parties should be enforced. See, e.g., Shay v. First Fed. of Miami, Inc., 429 So. 2d 64, 65-66 (Fla. Dist. Ct. App. 1983) (ruling that plaintiffs waived enforcement of a cause of action based on breach of a contract to fund a trust when they agreed to a covenant-not-to-sue provision).
Other courts, in contrast, have ruled that a party who files suit in violation of an agreement not to sue for a limited time should not be completely barred from filing his or her case, but may be held liable in damages for breaching the nonsue provision. See, e.g., Kunza v. St. Mary's Reg'l Health Ctr., 747 N.W.2d 586, 592 (Minn. Ct. App. 2008). Courts taking this position allow an action to proceed because the agreement not to sue for a period of time does not completely extinguish a party's right of action. Because the cause of action still exists, the party's right to sue has not been affected. See id. In jurisdictions that have adopted this approach, the only recourse left to the party who does not file suit is to bring an action for damages against the suing party for breach of the nonsue agreement.
Interestingly, this split of authorities exists even among legal scholars. id="Compare" 12 Richard A. Lord, Williston on Contracts § 36:16 (4th ed.) (stating that a covenant not to sue for a limited time "does not suspend or affect in any other way the covenantor's right to sue, but the covenantee's only remedy is for breach of contract"), id="with" Restatement (Second) of Contracts § 285 (stating that a contract not to sue for a limited time "bars an action to enforce a duty during that time").
Notably, neither of these scenarios applies where the parties each sign a covenant not to institute any action against the other party indefinitely. In such cases, the covenant not to sue is not an agreement to temporarily refrain from bringing a cause of action but, rather, is akin to a release. See Kunza, 747 N.W.2d at 592. Such an agreement acts as a complete bar to any lawsuit pertaining to the matters specified in the contract.
When confronted with an agreement not to sue, careful research should be done to ascertain which of the foregoing approaches, if any, courts in the relevant jurisdiction have adopted. In addition, counsel should keep in mind that the length of time the covenant is to extend is also relevant in determining the legal effect of the agreement.
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Some 24 years ago, the Supreme Court recognized that searches in the school setting are justified by reasonable suspicion, something less than the probable cause generally required elsewhere. See New Jersey v. T.L.O., 469 U.S. 325, 340-42 (1985). Specifically, the Court held that a school search "will be permissible in its scope when the measures adopted are reasonably related to the objectives of the search and not excessively intrusive in light of the age and sex of the student and the nature of the infraction." Id. at 326. Although the rule is clearly stated in T.L.O., application of that rule to particular fact patterns has proved troublesome. In the Court's most recent decision involving searches in the school setting, T.L.O. was once again the center of attention.
In Safford Unified Sch. Dist. No. 1 v. Redding, 2009 WL 1789472 (U.S. June 25, 2009), a school district subjected a female, 13-year-old, eighth-grade student (Savana) to a strip search. The assistant principal, acting upon arguable probable cause, suspected that Savana was a source of prescription and over-the-counter ibuprofen on school grounds, something strictly prohibited by the school absent express permission. Upon interrogation, Savana insisted that she had never brought any pills to school or provided pills to any students. Savana then agreed to a search of her backpack, which failed to reveal any contraband. Despite not finding any pills in her backpack, the assistant principal then requested a pair of female school nurses to strip-search Savana. Having still not found any contraband after Savana had removed each layer of outerwear, the nurses then instructed Savana to pull her bra and underwear out away from her body and to shake each garment. Savana complied, exposing her breasts and pelvic area in the process, and no pills were found. Based on these facts, Savana's mother brought a § 1983 action against the school district, alleging that the strip search violated the Fourth Amendment. After multiple appeals, a closely divided en banc Ninth Circuit held, among other things, that the strip search violated the Fourth Amendment. See 531 F.3d 1071 (9th Cir. 2008) (en banc).
In relevant part, the Supreme Court held that the strip search violated the Fourth Amendment. Initially, the Court found that the school officials' suspicions were sufficient for a search of Savana's backpack and outer clothing in the relative privacy of the assistant principal's office. On the other hand, the fact that Savana was required to pull out her underwear while two school officials necessarily saw her exposed breasts and pelvic area was unreasonable. Given that there was no hint of imminent danger to the students, from either the content or the quantity of the drugs, nor any reason to suggest that Savana had hidden pills in her underwear, the school officials' suspicions simply "failed to match the degree of intrusion" inflicted by a strip search. 2009 WL 1789472, at *2. Thus, in terms of the T.L.O. decision, the instant search was unlawful due to the degree of intrusiveness (a strip search as opposed to a mere search of the backpack or outerwear), the nature of the infraction (contraband ibuprofen as opposed to an illegal drug), and the age and sex of the student (13-year-old, eighth-grade female).
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As part of the 2005 revisions to the U.S. Bankruptcy Code under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Congress added specific provisions to Chapter 11 both to assist small businesses that file for bankruptcy relief and to protect the interests of creditors of these small businesses by requiring information not sought under other circumstances. A small business is defined under 11 U.S.C. § 101(51D) as an entity engaged in a commercial business activity that has an aggregate, noncontingent, liquidated, secured, and commercial debt, as of the date of the petition, of not more than $2,190,000. See In re Gateway Access Solutions, Inc., 374 B.R. 556 (Bankr. M.D. Pa. 2007) (holding that the total scheduled liabilities were less than the $2 million debt ceiling for a small business).
Under § 1116(1)(A), the Code requires small businesses to file, as an appendix to the Chapter 11 petition, the small business's most recent financial information or federal tax information. A debtor that fails to comply with these special filing requirements will not qualify as a small business debtor. See In re Fisher, 2008 WL 1775123, at *7 (Bankr. D. Mont. 2008) (mem.) (not reported in B.R.). In addition, under § 1116(5), a small business filing for bankruptcy protection must demonstrate to the court that it is maintaining insurance coverage. The small business must also allow the U.S. trustee to examine the debtor's premises and books and records, 11 U.S.C. § 1116(7), and must attend, through its senior management personnel, meetings scheduled by the court or the trustee, including meetings with creditors convened under § 341, id. § 1116(2).
The timing for filing a reorganization plan by the small business debtor is extended to 180 days under § 1121(e)(1). Additionally, a plan and a disclosure statement may be filed, regardless of the plan proponent, within 300 days after the order for relief. Under § 1125(f), after the reorganization plan is filed, the court may either determine that a disclosure statement is not necessary or schedule a combined hearing on the disclosure statement and plan confirmation. Likewise, Fed. R. Bankr. P. 3016 was amended, effective December 1, 2008, to state that a debtor under Chapter 9 or Chapter 11 does not have to file a disclosure statement if the plan itself contains adequate information and the court finds that a separate disclosure statement is unnecessary.
Under § 1141, the confirmation of a plan does not discharge any commercial debtor, including a small business debtor, if the plan provides for the liquidation of the company and the business ceases operation after completion of the plan.
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