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Stephen P. Imhoff
2843 Brownsboro Rd., Suite 101
Louisville, KY 40206-1274
Phone: 502-442-0039
Toll Free: 866-690-5497
Fax: 502-899-2415
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RECENT LEGAL DEVELOPMENTS-HANDLED BY VARIOUS KENTUCKY LAW FIRMS

$25 Million Settlement Against Accutane

There has been a recent settlement involving Health Canada and Hoffman-La Roche. They will now issue a new warning stating that the use of Accutane (isotretinoin) has been linked to rare but severe skin reactions. The companies announced that skin reactions such as Stevens Johnson Syndrome (SJS) and Toxic Epidermal Necrolysis (TEN), which can result in hospitalization or even become fatal, can occur with the use of the drug.

Issues according to customers and experts include, Crohn's Disease, Kidney and Liver problems, Severe Birth Defects as well as Suicide.

A party was recently awarded $25.16 million after a New Jersey jury ruled that Accutane had caused his Inflammatory Bowel Disease. Roche Holding AG has lost five or more cases by Accutane users. They have paid out awards totaling over $50 million, with this most recent case being the highest awarded so far. Roche was found to have inadequately warned Accutane users of the risks of using the drug. They stopped selling it in 2009.

3.8 Million Dollar Verdict

In June 2009, a Kentucky Jury entered a jury verdict for $3.8 million against a doctor's insurer for bad faith. The woman underwent a hysterectomy in 2003, and the doctors suggested a "tummy tuck." He did not tell her that he had never been trained to perform the procedure. She also did not know he was kicked off the staff of another hospital. As a result of the surgery, he left a basketball-sized hole in her stomach 7"-8" deep. According to her, she was left permanently disabled. For two years, the insurance company refused to engage in settlement discussions. When it finally made an offer, after almost two years, it proposed paying $75,000, even though the company's internal documents showed it had valued her damages at $1,000,000. She eventually accepted $650,000 the day before trial, but she did reserve the right to sue the company for the delay in settlement. The verdict included $3,479,277 in punitive damages for bad faith.

Russell County Kentucky Daycare Violations

The Lexington and Russell County media have reported on Small Steps Child Care in Jamestown, Kentucky. The stories relate to it being closed (License suspended, October 1, 2009) due to alleged violations of several Kentucky safety regulations. These are allegations, and the truth will be determined later.

On November 25, 2009, the owner and two employees of Small Steps were indicted by the Russell County Grand Jury for criminal violations regarding alleged improper care of children enrolled at the childcare facility. An indictment, by itself, is not a finding of guilt. This determination is up to the judicial process.

WORKERS' COMPENSATION

A. Clark County Board of Education v. Audeen Jacobs; Hon.

Sheila C.Lowther, CALJ; Workers' Compensation Board

2008-SC-000222-WC 2/19/2008

Claimant was employed as a high school teacher and served as sponsor of the school's chapter of the Beta Club-a national honor student organization. While accompanying the club to a convention in Louisville, claimant fell and fractured her shoulder in four places. The school board asserted the injury was not work-related and denied the claim. The ALJ determined the injury was work-related, noting claimant attended the convention with her principal's approval and that she was not required to take sick or vacation time to do so. Further, the ALJ found that the club provided a service to claimant's employer by advancing the school's responsibility to educate students and prepare them for adult life. In affirming, the Supreme Court restated the test from Spurgeon for determining if an activity arises in the course of employment: 1) that an employer must exercise a sufficient degree of compulsion to permit a reasonable finding that it brought the disputed activity within the scope of the employment; and 2) that evidence of a specific employer benefit may bolster evidence of compulsion.

Tom Duffy, Sr. et al v. Hon. Karen L. Wilson, et al.

2008-SC-000507-MR March 19, 2009

Opinion by Justice Venters; all sitting. Ryan Owens died following football practice at Henderson County High School. Two weeks later, an adjuster for the school board's insurer conducted interviews with witnesses. Present at the interviews were two attorneys for the school board, one of whom (Wilson) made statements to the effect that he was not hired to sue or defend anyone. Owens' estate subsequently brought a wrongful death suit against the coaches and school board officials. The estate sought to compel production of the statements. The trial court granted the motion to compel concluding that the statements were not privileged attorney work product under CR 26.02(3) because, based on Wilson's remarks, they were not made in anticipation of litigation. The trial court further held that even if the statements were considered attorney work product, they would still be discoverable since the estate had a substantial need for the statements and would be unable to otherwise obtain them without undue hardship since the witnesses' memories would not be as clear as they were at the time of the interviews. The Court of Appeals affirmed, and the defendants sought a writ of prohibition blocking execution of the trial court's order to compel from the Supreme Court.

The Supreme Court reversed the Court of Appeals and ordered it to enter the writ, concluding that the statements were attorney work product as they were "clearly" taken in anticipation of litigation. The Court stated that Wilson's disclaimer, while truthful, was not a conclusive admission that litigation was not anticipated. The Court further held that the estate had not shown that it was unable to obtain a substantial equivalent of the statements without undue hardship; noting that the estate had presented no compelling argument that the witnesses' memories had substantially deteriorated since the time of the incident. In his dissent, Justice Cunningham wrote that common sense dictates that statements taken from witnesses within two weeks of the incident are not equivalent in quality or veracity to those taken six months later.

Construction Law

TORTS

A. Greg Beaver (d/b/a Beaver Construction Co.) v. Kevin Oakley &

Crawford Electric, Inc.

2006-SC-000813-DG March 19, 2009

Opinion by Chief Justice Minton; all sitting, all concur. Oakley brought suit in tort against Beaver for injuries suffered at a construction site. The trial court granted summary judgment to Beaver, holding he was entitled to "up-the-ladder" immunity from tort liability as a contractor. The Court of Appeals reversed, holding that since Oakley's employer (Crawford Electric) had not contracted with Beaver's employer (Whitaker Construction Management) there was no contractor/subcontractor relationship though which Beaver could avail himself of up-the-ladder immunity. The Supreme Court reversed the Court of Appeals and reinstated the trial court's award of summary judgment in favor of Beaver, holding that a formal written contract between an injured worker's employer and an alleged tortfeasor is not essential to establish up-the-ladder immunity. While acknowledging that Crawford and Whitaker had contractual relationships with the property owner rather than each other, the Court concluded that the "paperwork obscured the reality of the functional contractor/subcontractor relationship."