MALICIOUS PROSECUTION RULING: "WELCOME TO THE 21ST CENTURY"

The Illinois Appellate Court just made malicious prosecution cases more difficult with its ruling in Reynolds v. Menard (First District, 2006). The plaintiffs, an elderly couple, were arrested at a Menard's store. They had purchased a number of items which they subsequently returned. When they did so it appears they were given a store credit in excess of their purchases. When they subsequently returned yet again to attempt additional purchases, they were detained and arrested for retail theft. The decision to do so was based in part on "red flags" that popped up in the Menard computer system when the history of the purchases was examined. The plaintiffs refused to plea on the criminal charges, went to trial, and were found Not Guilty. They then sued Menard for Malicious Prosecution. A jury found for Menard and further indicated, via Special Interrogatory, that Menard did not act with malice or without probable cause. The trial court then entered judgment notwithstanding the verdict, and after a hearing on damages, a different jury awarded plaintiffs $76,000. Menard appealed, arguing in part, that that the trial court erred in entering judgment notwithstanding the verdict, as sufficient evidence existed to support the original verdict on behalf of Menard.

The Appellate Court first spelled out the elements of a cause of action for malicious prosecution: 1) the commencement or continuation of an original criminal or civil action by the defendant; 2) the termination of that proceeding in favor of the plaintiff; 3) the absence of probable cause for that proceeding; 4) malice on the part of defendant and 5) damages suffered by plaintiff. The Appellate Court also defined "probable cause" as "...a state of facts that would lead a person of ordinary caution and prudence to believe, or to entertain a suspicion, that the person arrested committed the offense charged." The state of mind of the person commencing the prosecution, rather than the facts, or the guilt/innocence of the accused is at issue. After getting the fundamentals out of the way, the Appellate Court got down to the nitty gritty - that reliance on computer records for probable cause is permissible. "Welcome to the 21st Century. We find that probable cause to believe a person is guilty in the context of a malicious prosecution or false imprisonment actions may be based on information from sources other than personal knowledge, including information from other persons as well as from records kept on store computers. The Court held that there was sufficient evidence from which the jury could have found for the defendant. The judgment of the trial court was reversed and the trial court was directed to enter judgment on the jury verdict finding defendant did not act with malice.

POLICE MISCONDUCT RESULTS IN $6.74 MILLION DOLLAR VERDICT

As reported by Fran Spielman in the April 18, 2006 Chicago Sun Times, a Cook County jury recently rendered a verdict of $6.74 million dollars against the City of Chicago Police Department for the wrongful imprisonment of three men for a 1997 murder they did not commit. The civil trial grew out of the 1997 murder of Sindulfo Miranda, the owner of a furniture store in the City. Miranda was kidnapped and killed by members of the Latin Kings street gang who mistakenly believed he was a drug dealer. Omar Aguirre, Edgar Duarte Santos and Robert Gavol were picked up for the crime. Two of the plaintiffs had proof they were working at the time of the crime, which was ignored, according to their attorney, former Corporation Counsel James Montgomery. In addition, although neither Aguirre or Santos spoke much English, but both allegedly provided confessions in English. The three men ultimately spent five years in prison, until 2002, when federal prosecutors received information about the actual killers, who were indicted and convicted. The City dropped charges against Aguirre, Santos and Gavol in 2002 and the sentences were vacated.

Montgomery argued that the confessions were coerced, as were supposedly corroborative witness statements. The jury apparently agreed and found the City had acted with malice and had no probable cause for the charges. Montgomery offered evidence that one of the plaintiffs lost his family, who "gave up on him" during the incarceration. Another one of the plaintiffs became estranged from his wife and a sick child during the 5 years in prison. The jury awarded $3 million each to Aguirre and Santos, and $740,000 to Gayol.

Jennifer Hoyle, a spokesman for the City of Chicago, said attorneys for the City would be filing post-trial motions and would review their options if those motions failed.

INSURANCE COMPANIES BEING PROBED ON KATRINA CLAIMS

The Chicago Tribune recently reported that Mississippi Attorney General Jim Hood has convened a grand jury to investigate whether State Farm improperly denied Hurricane Katrina claims. Hood is looking into whether State Farm tried to pressure the engineering consultants they used to alter reports about how homes were damaged or destroyed by the storm. Hood's actions come after a number of State Farm claimants had filed civil lawsuits against the insurer claiming that State Farm tried to hide that wind had been the primary cause of their losses, and pointed to flooding instead. [The claimants' policies apparently did not cover flooding-related damages]. Hood recently subpoenaed records from State Farm and a Mississippi judge allowed the insurer until May 26, 2006 to provide the documents.

And Hood is taking a look at Allstate as well. In September, 2005 he filed a civil suit againt the "Good Hands" company fighting Allstate's attempt to contest certain hurricane claims by citing certain exclusions in the relevant policies. Hood took position in that case that the language relied upon by Allstate was too vague.

MERCK TAKES A BIG HIT IN VIOXX TRIAL

On April 6, 2006, a New Jersey jury held Merck & Company responsible for the heart attack and subsequent health problems suffered by Vioxx user John McDarby. McDarby had been a Vioxx user for years, and then suffered a heart attack in his home, as well as a broken hip. McDarby alleged the the heart attack and broken hip started an irreversible decline in his health, ultimately leaving him in a wheelchair, unable to care for himself.

McDarby and his lawyers alleged that Merck, losing market share because of the advent of Celebrex, rushed Vioxx to the market, even though Merck knew the drug caused cardiovascular difficulties. And Vioxx made a lot of money for Merck - $2.5 billion in 2003 alone. But Merck had to pull it from the market in 2004 after clinical studies showed long-term users to be at increased risk for heart attacks and strokes.

The jury awarded McDarby $4.5 million in compensatory damages, finding that the company failed to adequately warn McDarby about the risk factors. In additon, the jury also awarded McDarby $9 million in punitive damages. This is the second Vioxx loss Merck has suffered at the state level. The company has also prevailed in two cases. There are nearly 10,000 additional cases still pending.

The same jury found against plaintiff Thomas Cona who had also sued Merck for a heart attack he suffered. Although the jury found Merck had failed to adequately warn Cona as well, they determined that Vioxx hadn't been a factor in his heart attack and awarded him $450 to cover his out of pocket expenses.

SUPREME COURT UPHOLDS SEXUAL HARASSMENT VERDICT

The April edition of Fortune Small Business has an interesting article on a sexual harassment case arising out of New Orleans. The plaintiff, Jennifer Arbaugh was a waitress at the Moonlight Cafe. After the owner allegedly groped her and made lewd remarks, she sued. A federal jury awarded her $40,000. The defendant appealed, and argued that the business had less than 15 employees, and therefore wasn't governed by the legislation at issue. [The article indicated that Title VII provides that companies with less than 15 employees can't be held liable for sexual harassment]. The District Court agreed, as did the Federal Appeals court. The Supreme Court however, disagreed in a February, 2006 decision. The Supreme Court held that after Moonlight had litigated the case through trial, it couldn't then take the position the claim was legally insufficient. Commentators have suggested that the defendant probably could have had the case tossed at the outset if it asserted the 15 employee provision.

FEDERAL JUDGE QUOTES ADAM SANDLER

According to a March 6, 2006 report at The Smoking Gun, a Bankruptcy judge in Texas recently quoted none other than Adam Sandler in a recent ruling. In his February 21, 2006 order, Judge Leif Clark denied defendant's motion after noting that "...the court cannot determine the substance, if any, of the Defendant's legal argument, nor can the court even ascertain the relief that the Defendant is requesting. The Defendant's motion is accordingly denied for being incomprehensible".

The Judge however, wasn't done yet. He added a footnote that read as follows:

Or, in the words of the competition judge to Adam Sandler's title character in the movie "Billy Madison,", after Billy Madison had responded to a question with an answer that sounded superficially reasonable, but lacked any substance,

Mr. Madison, what you've just said is one ofthe most insanely idiotic things I've ever heard. At no point in your rambling, incoherent response was there anything that could even be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.

Deciphering motions like the one presented here wastes valuable chamber staff time and invites this sort of footnote.

No word on whether the movant appealed. Who says federal judges don't have a sense of humor?

BEDBUGS BACK IN THE NEWS

The Chicago Sun-Times recently reported that a Chicago woman and her husband are suing a Catskills resort for $20 million after she allegedly suffered 500 bedbug bites while staying at the hotel last summer. Ms. Leslie Fox claims that the incident occurred while she and her husband were staying at the Nevele Hotel in Ellenville, New York. The article noted that Ms. Fox discovered the bites after her third night in the hotel. Fox appeared on The Today Show shortly after the story went public and displayed a bunch of pictures presumably taken shortly after she discovered she had been bitten. The pictures showed some pretty nasty looking red lesions all over the body of Ms. Fox, who is allegedly still receiving treatment. An attorney for the hotel claimed that the property is regularly inspected by pest control companies that will certify the resort was "bug-free".

This is the second time in recent history bed bug cases have made news. In 2004 the Seventh Circuit here in Chicago upheld an unusual verdict in a bedbug case. In Mathias v. Economy Lodging (7th Circuit, 2003) the a federal jury awarded the plaintiffs $5000 in compensatory damages and $186,000 in punitive damages against the defendant. In Mathias though, there was some rather damaging evidence against the defendant. Evidence came out that bedbugs had been discovered some 2 years before plaintiffs were bitten and an exterminator had suggested fumigation, but the Economy refused. Finally, and likely most damaging, was the evidence that the defendant continued to rent the room after it had been classified as DO NOT RENT ROOM UNTIL TREATED.