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CLM National: May 2022

News and verdicts that affect you from across the country

May 11, 2022 Photo

The sunset of a COVID-19-era rule leads to confusion, the SEC is proposing a new climate disclosure rule, and, in Pennsylvania, the state Supreme Court will take up a case regarding interpretation of the state’s Motor Vehicle Financial Responsibility Law (MVFRL).

Washington

JUUL Settles Lawsuit Over Advertising Practices

Electronic cigarette company JUUL will pay $22.5 million to resolve a lawsuit filed by Attorney General Bob Ferguson that alleged JUUL violated the law by marketing its products to appeal to underage consumers, and misled consumers about the addictiveness of its products. According to the consent decree, filed in King County Superior Court, JUUL does not admit to any liability or wrongdoing, but agrees to the payment and reforms such as: stopping advertising that appeals to youth, stopping most social media promotion, accurately marketing the content and effects of nicotine, and adhering to strict practices to confirm the age of the products’ consumers.—From Senior Managing Editor Phil Gusman

California

Sunset of COVID-19-Related Rule Spurs Confusion

To support essential court services during the pandemic, the Judicial Council of California adopted Emergency Rules to the California Rules of Court in April 2020. At the March 11 meeting of the Judicial Council, it was recommended that all statewide emergency rules sunset on June 30, 2022. Causing particular confusion amongst courts and attorneys is Emergency Rule 10, which reads: “For all civil actions filed on or before April 6, 2020, the time in which to bring the action to trial is extended by six months beyond the normal five-year limit. And for all civil actions filed on or before April 6, 2020, where a new trial is granted, the time to bring the action to trial again is extended by six months beyond the normal three-year limit.” Although the court considered Emergency Rule 10 in its determination, ultimately it found that the emergency provision was an administrative rule and does not have the force and effect of a statute. Thus, it would not trigger the six-month extension available under section 583.350.—From CLM Members Ranjan A. Lahiri and David S. Webster, Wood Smith Henning & Berman

Florida

DeSantis Calls for Special Session on Property Insurance

Gov. Ron DeSantis issued a proclamation calling for a special session so that the legislature can consider solutions to property insurance matters. The topics are expected to include property insurance, reinsurance, changes to the Florida building code to improve insurance affordability, the Office of Insurance Regulation, civil remedies, and appropriations, according to a memo from DeSantis’ office to members of the press. Outlining the need for a special session, the proclamation points to issues such as: Florida accounting for 79% of the nation’s homeowners’ lawsuits over claims filed, while making up only 9% of the nation’s homeowners’ claims; the industry suffering two straight years of underwriting losses exceeding $1 billion; four insurers going insolvent or requiring midterm cancelations in 2021; and the state’s insurer of last resort seeing an increase of 399,822 policies since the beginning of 2020. The proclamation states the special session will run from May 23 to no later than May 27.From Senior Managing Editor Phil Gusman

Washington, D.C.

SEC Proposes Climate-RElated Disclosure Act

On March 21, the Securities and Exchange Commission (SEC) proposed a new rule aimed at requiring public companies to disclose extensive climate-related data to not only the federal government, but also their shareholders. The “Enhancement and Standardization of Climate-Related Disclosures for Investors” would require both foreign and domestic companies, in their registration financial statements and annual reports (including 10-Ks), to disclose climate-related physical risks (“any climate-related risks reasonably likely to have a material impact on the registrant’s business or consolidated financial statements.”), the bottom line impact of these material climate-related risks on the company’s strategy, business model, and outlook, governance of climate risks, transition plans to reduce climate-related risks, and greenhouse gas emissions. If adopted, this rule would impose substantial new disclosure responsibilities on public companies in their SEC filings.—From CLM Member Stephen L. Jenkins, Goldberg Segalla

Pennsylvania

Is Vehicle Deletion a “Purchase”?

The Pennsylvania Supreme Court has agreed to consider whether deletion of a vehicle from an automobile policy constitutes a “purchase” of coverage, requiring an insurer to secure a new written stacking waiver from its insured under the state’s MVFRL. In Franks v. State Farm Mutual Insurance Company, Robert Franks obtained automobile insurance coverage for two vehicles and executed a waiver of stacked UIM coverage. Franks added a third vehicle to the policy and executed a second waiver of stacked limits. Months later, Franks removed the oldest vehicle from the policy, but was not asked to, nor did he sign, a new waiver form rejecting stacked UIM benefits. Franks was injured in an automobile accident and sought the stacked limits of $200,000. The majority of an en banc panel of the Superior Court reversed a three-judge Superior Court panel and held that the opportunity to waive stacked limits for UIM or UM benefits in writing need not be given to an insured who removes a vehicle from a multi-vehicle policy, as this act is not a “purchase” under the coverage provisions of the MVFRL.—From CLM Members Cathleen Kelly Rebar and Jennifer Strawn, Rebar Kelly

Rhode Island

Settlement Reached in MTBE Litigation

Three of the nation’s largest refiners of gasoline—Shell, Sunoco, and CITGO—along with several other refiners, will pay $15 million as part of a settlement of a lawsuit filed by Rhode Island Attorney General Peter F. Neronha. The lawsuit concerned pollution of Rhode Island’s soil and groundwater with the gasoline additive methyl tertiary-butyl ether (MTBE). The funds will be dedicated to emergency response and ongoing MTBE contamination remediation efforts by the Rhode Island Department of Environmental Management. The complaint alleged that the defendants manufactured and/or supplied MTBE, or gasoline containing MTBE, for sale within the state while they knew, or reasonably should have known, that MTBE would be released into the environment and cause contamination of property, water, water supplies, and wells. The defendants did not admit to any of the allegations, according to the consent judgment. Litigation against other refiners—including British Petroleum, Chevron, Exxon Mobil, Valero, and Irving—is ongoing.—From Senior Managing Editor Phil Gusman

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About The Authors
Phil Gusman

Phil Gusman is senior managing editor for CLM Magazine and Construction Claims magazine.  phil.gusman@theclm.org

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