Tuesday, May 1, 2012

A New South Carolina Workers’ Compensation Commissioner

Commissioner Bryan Lyndon’s term with the South Carolina Commission has now expired. The South Carolina Senate appointed Melody James as the newest Workers’ Compensation Commissioner on April 25. Commissioner James is an attorney and has experience representing both claimants and employer/carriers in Workers’ Compensation claims. Most recently, she was a partner at the firm of Mozingo & James in Camden, South Carolina and served as the municipal judge for the City of Cayce. She has already begun hearing cases.

Monday, December 20, 2010

Full defense verdict in United States District Court on behalf of Old Dominion Freight Line

Partner Duke Highfield and associate Brandt Horton recently secured a full defense verdict in United States District Court on behalf of Old Dominion Freight Line, a long-time client of the Firm. The case arose out of an interstate accident involving ODFL’s tractor-trailer and four passenger vehicles. The plaintiffs claimed significant physical injuries and damages in excess of $500,000. Highfield and Horton engaged in extensive discovery, ultimately establishing that the tractor-trailer did not cause the accident and proving the majority of the plaintiffs’ alleged injuries pre-dated the wreck. The pair also secured favorable pre-trial rulings on the admissibility of certain evidence and testimony, severely limiting the plaintiffs’ case. With the assistance of accident reconstruction and medical experts, Highfield and Horton convinced the jury that the tractor-trailer driver did nothing to contribute to the accident. The jury took less than one hour to return a full defense verdict.

Tuesday, April 6, 2010

New Case Addressing Limits on Expert Testimony in State Court

SOUTH CAROLINA

New Case Addressing Limits on Expert Testimony in State Court

In a brand new opinion, South Carolina’s Supreme Court proclaimed an end to the seemingly limitless breadth of the admissibility of expert testimony. In Watson v. Ford Motor Company, Op. No. 26786 (Filed March 15th, 2010) the Court gave additional analytical heft to its 2009 decision in State v. White, 382 S.C. 265, 676 S.E.2d 684 (2009), which has been read as the Court’s direct instruction to the trial courts that they more stringently enforce Rule 702 of the South Carolina Rules of Evidence, which sets forth the admissibility criteria for expert testimony. In Watson, the Court articulated analytical instructions so clear that they suggest the Court had been eager for the right case to declare its preference for more selective admissibility of expert testimony.

The case involved a single car motor vehicle accident which was caused by the Ford Explorer in which the plaintiffs were traveling, and which was under the apparent control of the vehicle’s cruise control feature, unexpectedly and without human stimulus accelerating, causing the vehicle to roll over and the plaintiffs to be ejected. The injuries were severe, and the jury awarded eighteen million dollars actual damages to the two plaintiffs. Ford appealed on several bases, most notably that the trial court erred in admitting the testimony of plaintiffs’ experts Bill Williams and Dr. Antony Anderson.

According to the Court’s recitation of the facts, “[the plaintiffs’] theory of the case was that the Explorer’s cruise control system was defective because it allowed electromagnetic interference (EMI) to affect the system.” Bill Williams, testifying in the field of “cruise control diagnosis”, was presented in order to offer evidence from third parties of similar cruise control failures in other Ford products. Anderson, an expert in EMI, offered his theory as to how EMI can cause the very malfunction which allegedly caused the subject accident. After reviewing the record, the Supreme Court ruled that both experts should have been excluded.

With respect to Williams, the Court noted that in the course of the motion in limine concerning Williams’ testimony, Williams had described his experience as involving training, consulting, and developing and writing software for the automotive industry, with particular current emphasis on issues involving brake failures. He acknowledged that prior to being retained in the lawsuit, he had no professional experience of any kind in cruise control systems, never had compared the cruise control system in the Explorer in question to any other system, and never had published a paper on cruise control systems. Despite these limitations, the trial court qualified Williams as an expert in “the training and operation of the cruise control and brakes” and permitted him to testify on “cruise control diagnosis.” While the casual reader might believe this was obvious error on the trial court’s part—and while, indeed, that conclusion is clear from a reading of Rule 702—in practice qualification of experts on so specious a basis has been utterly routine.

So the Supreme Court’s determination that Williams was not qualified and should have been excluded was no small surprise. Specifically, the Court ruled that Williams’ lack of pre-litigation experience with the subject matter of the litigation—during the motion in limine he described “how he taught [himself] the Explorer’s cruise control, or speed control system”—was fatal. Because it appeared he “merely studied the Explorer’s system just before trial”, he was not qualified to discuss the cruise control system, despite his vast qualifications in other aspects of automotive engineering. South Carolina’s trial judges undoubtedly will hear this principle argued frequently in the years to come.

While Williams should have been excluded due to inadequate qualification, the Court’s finding concerning Dr. Anderson concerned the other cornerstone of expert testimony’s admissibility: methodological reliability. Dr. Anderson’s testimony was damning to the defense: it established not only that EMI could cause a malfunction in the cruise control system, but that Ford had a technically and economically feasible alternative at hand: the use of a “twisted pair” wiring schematic. Examining Anderson’s qualifications, the Supreme Court noted that while an eminently qualified electrical engineer, Dr. Anderson had no particular experience with cruise control mechanisms, or even with the automotive industry as a whole. Coupling this experiential inadequacy with Dr Anderson’s inability to support with meaningful explanation his theory that “twisted pair” wiring would have prevented the particular malfunction that he theorized, the Court found that testimony concerning the twisted pair wiring theory—i.e., the feasible alternative—should have been excluded as unreliable.

The Court went a step further, ruling that Dr. Anderson’s testimony concerning the specific mechanism by which the EMI caused the cruise control malfunction should have been excluded as well. While acknowledging that Dr. Anderson was qualified to testify to EMI and to its effects generally, the Court concluded that his testimony was the product of unreliable methods. He had not published any peer reviewed paper on EMI’s effect on cruise control systems, and could not identify the source of the EMI he claimed had caused the malfunction. Further, he had not tested his theory and, indeed, testified that his theorized EMI reaction could not be replicated in a laboratory or other testing environment. In light of this, the Court found that Dr. Anderson’s EMI theory was the product of unreliable methods and should have been excluded.

Encapsulating the trial court’s error, the Supreme Court rendered what to litigants and practitioners in South Carolina must be considered the opinion’s critical statement: “In our view, the trial court’s error in admitting Dr. Anderson’s testimony is largely based on solely focusing on whether he was qualified as an expert in the field of electrical engineering and failing to analyze the reliability of the proposed testimony.” This statement must be taken as an exceedingly clear signal to trial courts in South Carolina: the days of admitting any testimony solely because its subject matter falls within the expert’s general area of expertise—the standard practice in this state—are over. That an expert’s methodology makes no sense and cannot be confirmed by scientific methods affects the opinion’s admissibility and not merely its weight, as so often had been proclaimed. Should the trial courts heed the Supreme Court’s obvious intent, this opinion has the potential to effectuate a fundamental shift in personal injury litigation of all kinds: product liability, retail liability, trucking and transportation, construction and beyond.


YOUNG CLEMENT RIVERS, LLP

Duke R. Highfield
Benjamin A. Traywick

Young Clement Rivers, LLP
28 Broad Street
Charleston, SC 29401
(843) 720-5456
Fax: (843) 579-1330
dhighfield@ycrlaw.com
btraywick@ycrlaw.com
www.ycrlaw.com

Friday, March 26, 2010

Proposed Op-Ed that was sent to the New York Times by Michael A. Molony

The attached was a proposed Op-Ed that was sent to the New York Times by Michael A. Molony, in response to an article titled “Financial Perversions Sold During Credit Boom” by Floyd Norris which was published in the New Your Times on February 12, 2010. The New York Times declined to publish Michael Molony’s proposed Op-Ed piece.


Michael A. Molony



February 26, 2010

The Editor

New York Times

RE: “Financial Perversions Sold During Credit Boom” by Floyd Norris

Gentlemen:

The February 12th article written by Floyd Norris caught my attention since I have been involved in a number of transactions involving the formation of captives for XXX Reserve Relief. Unfortunately, the reason it caught my attention was the number of serious inaccuracies and misconceptions Mr. Norris has about the securitizations involving XXX reserve requirements.

First of all, each of the initial bullet points are inaccurate for several reasons:

1. The assumption that insurance regulators were requiring life insurers to retain too much capital is wrong. The regulators were requiring so-called “excess reserves”, to be held against certain types of insurance underwritten by insurance companies in the US. (Excess reserves are reserves held in addition to the “economic reserves” used to fund expected mortality on a specific block of term life business). The writer apparently does not understand that fundamental insurance regulatory requirements set minimum capital requirements to establish any insurance company, particularly the captive underlying the transaction. In the case of the companies in the XXX securitizations, not only were their capital and surplus requirements set by the more than one State insurance regulator, but also this capital was in addition to corresponding amounts of “economic reserves” and “excess reserves”.

2. Investors in these XXX securities were required to be “Regulation 144A Investors” who, ostensibly, are sophisticated and experienced in the capital markets. Further, the method for calculating “excess reserves” was mandated by a regulation (Regulation XXX) promulgated by the National Association of Insurance Commissioners (“NAIC”) and not the insurance companies themselves;

3. The reference to risk-free cash equivalents pertains to the Dutch Auction Market Securities which are, in my experience, are a small percentage of the total amount of securitizations in the programs that I have been involved with in my law practice;

4. The offering prospectuses may be complex in the eye of the reporter but certainly not to those investors who, again are required to meet certain minimum standards before investing in these securities. They were not offered to unsophisticated retail investors.

5. The monolines were brought in to help asses risk and provide protection to investors, which they have done by agreeing to pay out coupons on notes that have missed their payment. In one sense this worked, and investors and the banks benefitted by having their issuers pay for the “Wrap”. The mere fact, however, that a XXX security was insured did not persuade people that there was “nothing to worry about”; in fact, the existence of bond insurers appeared to have made investors complacent in terms of analyzing the underlying assets backing these securities. Lack of due diligence on the part of investors is no reason to vilify an entire segment of a viable market.

Having addressed the points he raised, seriatim, several other points need to be made regarding the XXX securitizations.

First of all, putting aside that the majority of the article addresses auction rate securities, there is a significant difference in the XXX securitizations that need to be brought to the attention of the writer.

Specifically, unlike mortgages and many other asset-backed securities, XXX securitizations involve mortality, which in its purest form is a risk de-linked from the economy. The underlying insurance transaction is heavily regulated, not only by NAIC Regulation XXX but by the various state regulators themselves. Every transaction with which I have been involved was preceded by months of detailed analysis. Further, there is thorough ongoing regulation to ensure the proper performance of the insurance entities involved. The securitizations also require extensive annual reporting to regulators. Most of these items were lacking in the traditional ABS space.

In addition to this XXX regulation, there are ongoing surveillance reviews by rating agencies as well as careful monitoring by the regulators and companies themselves. There is an annual actuarial analysis to ensure that the underlying block of insurance policies is performing as expected. In fact, in virtually every XXX transaction I have been associated with, the liability projections (expected mortality, lapses, etc.) have been accurate based on the projections provided to the regulator and investors. In some cases, these projections are now approaching 9 years and, with each passing year, experience shows them to be even more precise.

Second, the issue with XXX securities, like many other structured asset backed securities, has been deteriorating value on the asset side. This is not unique to the life insurance world. Unlike mortgage securitizations though, XXX securitizations require a very tightly regulated trust instrument which holds the XXX reserves assets. There are also investment guidelines regulating the assets in these trusts. No one could have predicted the absolute meltdown of the value of investments, including those held in the various regulatory trusts. This is particularly true of the one company referenced in the article.

Finally, the writer ends the article writing about the financial guarantors. What the writer fails to observe is that in any of these transactions, there are two sides to the equation: the regulatory side and the capital markets side. To my knowledge to date, there have been no XXX securitization failures as a result of lax or inadequate insurance regulation; in fact, it is my belief that the existence of this regulation of XXX transactions will afford them a unique place in the asset backed securitization market which, inevitably, will come back in some form. The XXX securitization market is the economic engine that provides capital to finance term life insurance products, making them safe, affordable and a sound part of a consumer’s financial plan. Misinformation disseminated in articles such as this do nothing but impede the recovery process of this effective and vital source of funding.

With kind regards, I am

Sincerely,

Michael A. Molony

28 Broad Street

Charleston, SC 29401

(843) 724-6631





Wednesday, February 24, 2010

Young Clement Rivers announces new attorney in Longshore practice group

Young Clement Rivers, LLP is pleased to announce that Brian P. McElreath has joined the firm as an associate attorney in the firm’s Workers’ Compensation and Longshore and Harbor Workers practice groups. Brian received a Bachelor of Arts in Economics in 2003 jointly from North Carolina State University and the University of North Carolina at Asheville, and received his Juris Doctor from the Charleston School of Law in May of 2009. During law school, Brian was a member of the Maritime Law Bulletin. The firm now has 12 attorneys practicing in their Workers’ Compensation practice group, five of which are skilled in handling the concurrent jurisdiction claims under the South Carolina Workers’ Compensation Act and the Longshore and Harbor Workers’ Compensation Act.

Wednesday, February 3, 2010

YCR Partner Presides in Charleston’s Livability Court

1/17/2010

The court that deals with the little stuff

Insurance Fraud in South Carolina

11/9/2009

Jeffrey J. Wiseman and Joseph W. Rohe, both from the Commercial Litigation and Insurance Coverage practice groups, recently published an article in the SC Lawyer magazine’s 2009 issue entitled, ”Insurance Fraud in South Carolina – Potential Pitfalls for Insurers.”

Partner D. Jay Davis, Jr. has been elected as a member of the American Board of Trial Advocates

10/29/2009

Partner D. Jay Davis, Jr. has been elected as a member of the American Board of Trial Advocates

The Best Lawyers in America 2010

8/7/2009

Young Clement Rivers, LLP is pleased to announce that William J. Bates, C. Michael Branham, Carol B. Ervin, Wallace G. Holland, and Michael A. Molony have been chosen for inclusion in Best Lawyers in America 2010 Edition.

Young Clement Rivers, LLP is pleased to announce that Michael Branham has been chosen for inclusion in Marquis Who’s Who in American Law.

7/23/2009

Young Clement Rivers, LLP is pleased to announce that Michael Branham has been chosen for inclusion in Marquis Who’s Who in American Law.

Jeff Wiseman Teaches Expert Testimony Course for Arson Investigators

5/8/2009

Associate Jeffrey J Wiseman recently completed teaching an Expert Witness Courtroom Testimony Course for the International Association of Arson Investigators (IAAI). The course consisted of classroom lecture and then a mock trial setting in which the IAAI students were examined and cross examined by Jeff and other attorneys on the stand in a courtroom at the Horry County Courthouse.

SUPER LAWYERS 2009

4/16/2009

YOUNG CLEMENT RIVERS, LLP IS PLEASED TO ANNOUNE THAT J. RUTLEDGE YOUNG, JR., SHAWN WALLACE AND CAROL ERVIN HAVE BEEN CHOSEN FOR INCLUSION IN SOUTH CAROLINA SUPER LAWYERS 2009. THIS IS THE SECOND YEAR IN A ROW THESE ATTORNEYS HAVE BEEN SELECTED FOR THIS GREAT HONOR.

PARTNER D. JAY DAVIS, JR. RECENTLY SPOKE AT THE SOUTH CAROLINA BAR AT A CLE ENTITLED “DEPOSITION ESSENTIALS: WINNING YOUR CASE BEFORE TRIAL.”

4/6/2009

PARTNER D. JAY DAVIS, JR. RECENTLY SPOKE AT THE SOUTH CAROLINA BAR AT A CLE ENTITLED “DEPOSITION ESSENTIALS: WINNING YOUR CASE BEFORE TRIAL.”

WILBUR E. JOHNSON NEW MANAGING PARTNER FOR YOUNG CLEMENT RIVERS, LLP

3/20/2009

Young Clement Rivers, Attorneys at Law, is pleased to announce that Wilbur E. Johnson has been elected to serve as Managing Partner.

“I appreciate the confidence demonstrated by my partners in electing me as Managing Partner. I hope to be able to follow in the footsteps of my immediate predecessor, Mike Branham, and others who have so effectively served in that role,” said Johnson.

“After 10 years of participation in the management of the firm, including the last 7 years and 3 months as Managing Partner, I am pleased to be back in the full time practice of law,” said Branham. “I was very pleased that Wilbur made the decision to consider the role of Managing Partner. Wilbur has been involved in numerous leadership roles including the management of the firm for many years. With his experience and guidance, the firm will continue to prosper under his leadership.”

Johnson practices primarily in the area of employment and labor law, and is licensed to practice in State Court, the United States District Court, and the United States Court of Appeals. Until 1994, Wilbur worked as an assistant attorney general in the office of the Attorney General of South Carolina and was the recipient of the Earl Warren Legal Training Fellowship.

He is a member of the South Carolina Bar House of Delegates, the South Carolina Bar Nominating Committee and the Employment and Labor law, the Litigation sections of the American Bar Association and has recently been admitted to membership in the Federation of Defense and Corporate Counsel. He is also past chair of the Editorial Board of the ABA/BNA Lawyer’s Manual on Professional Conduct.

Active in the community, Johnson serves as a board member of Roper Hospital, the Historic Charleston Foundation, the Charleston Metro Chamber of Commerce, the Trust for Public Land, Crisis Ministries, Charleston County Greenbelt Advisory Board, the South Carolina Aquarium, the New Morning Foundation, the International African American Museum Board of Trustees, and the Carolina Youth Development center. He also serves as an adjunct professor at the Charleston School of Law.

As chairman of the Charleston Metro Chamber of Commerce’s Port Development Task Force, Johnson is a leader in the efforts to generate support for the Port of Charleston from the SC General Assembly, regulatory agencies, and other SC chambers of commerce. In addition to serving as a past chairman of the Charleston Metro Chamber of Commerce, Johnson has chaired the chamber’s Public Policy Committee and served on the task force that aimed at passing as school bond referendum to generate money for repairs to the Charleston County School District’s physical plant.

Johnson is a graduate of Augusta State University, in Augusta, GA, and the University Of South Carolina School Of Law.

DEFENSE VERDICT FOR COMMERCIAL LITIGATION AND APPELLATE GROUP

3/19/2009

Attorneys Stephen Brown and Jeffrey Wiseman of the Commercial Litigation and Appellate Group received a defense verdict after a three day trial in which the plaintiff was represented by a large local firm. The client, a builder, was sued by the plaintiff who claimed to have fallen from a deck where the railing gave way on a house built by the client. The plaintiff claimed five broken ribs and a compression fracture in his back from the fall. In addition to the medical bills, the plaintiff also claimed substantial lost wages. After three days of testimony, the jury returned a verdict for Young Clement Rivers’ client and found that the client was not negligent in the construction of the railing system.