Back to the Basics - No retaliation claim if no protected activity

Retaliation claims are among the most numerous types of employee claims processed through the Equal Employment Opportunity Commission and state EEO agencies. Central to these claims are whether an employee engaged in protected activity and how the employer responded to it. A recent Eighth Circuit case involving Nebraska law on retaliation is exemplary. 

In Walker v. First Care Mgmt. Grp., LLC, the United States Court of Appeals for the Eighth Circuit held that employees’ conduct in response to a facility resident’s abuse upon another facility resident did not constitute protected conduct to support a retaliation claim under Nebraska law.  27 F.4th 600 (8th Cir. 2022). 

Two caregivers employed by a retirement community witnessed a resident sexually assaulting other residents several times.  Per company policy, employees had to report resident abuse immediately, by reporting any incident to a supervisor, completing an incident report, and making a note in the resident’s chart.  The two employees claimed they reported observing the abuse, but on at least one occasion, they waited to make their report until day after the incident. 

The Nebraska Department of Health and Human Services (“DHHS”) responded to an anonymous complaint about the resident’s abuse and made an unannounced site visit of the facility.  Shortly after, a retirement community manager claimed she was unaware of the abuse that led DHHS to the facility.  Several employees stated the manager must have been aware of the abuse because the employees reported such abuse.  Upon completion of the visit and a staff meeting, the two caregiver employees were terminated. 

The employees filed suit alleging, among other claims, unlawful retaliation after engaging in a protected activity.  The retirement community moved in the District Court for summary judgment, which was granted, resulting in a judgment against the employees and dismissing their claims.  The employees appealed. 

On appeal, the Eighth Circuit considered whether the lower court erred in granting the retirement community’s motion for summary judgment.  Under Nebraska law, an employer may not discriminate against an employee who opposed or refused to carry out any unlawful action of the employer.  Neb. Rev. Stat. § 48-1114(1)(c).  In other words, employees claiming retaliation must demonstrate that they opposed an unlawful practice of their employer. 

The two employees alleged engaging in the following activities: the report made to DHHS, internal complaints to supervisors about the abuse, and confronting a manager about her alleged ignorance of their report of abuse.  However, none of these acts were found to have opposed unlawful activity of the retirement community. Nor did they amount to acts of refusing to carry out an unlawful action. Thus, there was no protected activity on which to base a retaliation claim.  Accordingly, the Eighth Circuit upheld the summary judgment because the employees’ conduct in response to the abuse of the facility resident did not constitute protected conduct under Nebraska law. 

Obviously, the facts of the case suggest egregious acts of abuse. However, a retaliation claim is closely focused on the activities of employees and the response of the employer. Any time an issue arises, employers are cautioned to involve their attorneys at an early stage to avoid or minimize potential claims of retaliation and to appropriately respond to abuse, to complaints, or to protected activity of employees.

Thanks to Rob Toth, current law clerk and joining E|S as an associate attorney in the fall of 2022, for assistance in preparing this article.

Bonnie Boryca and E|S employment attorneys can be reached at 402-397-2200.

Law or equity – whether a jury decides the claim in light of the equitable ‘clean up’ doctrine

In Schmid v. Simmons, the Nebraska Supreme Court held that the common law “clean up” doctrine is still good law, discussed when a party is entitled to a jury trial on civil disputes, and clarified how a litigants may waive the right to jury trial on legal claims.  311 Neb. 48 (2022).   

The Nebraska Constitution guarantees the right to trial by jury. However, on civil matters, which are generally disputes about money or other non-criminal matters, the state Constitution allows the Legislature to modify this right to allow juries less than 12 to decide matters in courts inferior to the District Courts, and, in such cases, the decision may be rendered by five-sixths majority of the jury.  Neb. Const. art. I, § 6.

 Litigants still have a right to seek a jury trial on legal claims—those involving disputes over specific real or personal property and money damages—but not on equitable claims, which may be tried “to the bench” without a jury.  Whether a claim is legal or equitable rests upon the “main object” of the claim, which is shown by the issue the lawsuit seeks to resolve.  

 Under the “clean up” doctrine, a court may determine equitable issues and then “clean up” other legal issues in the case, even where a defendant asserts a legal claim as a defense or counterclaim.  The purpose of this doctrine is to preserve judicial efficiency by allowing the same court to hear and determine all disputed issues in a single lawsuit. 

Applied to the facts, the Court found proper the district court’s decision to resolve plaintiff’s equitable claims (quiet title, declaratory judgment, LLC accounting, and judicial dissolution) and then “clean up” defendant’s amended counterclaims seeking damages for breach of contract, a legal claim.  Because the District Court retained jurisdiction to quiet title and determine rights of LLC members, and because the parties agreed the matter before the court was equitable, the District Court correctly applied the “clean up” to resolve any remaining legal claims all equitable claims were decided.  

The Court further clarified the manner in which parties may waive the right to trial by jury on a breach of contract action, or with the court’s agreement in other actions, finding that waiver could be accomplished in three ways: (1) by consent of a party where the other party fails to appear, (2) by written consent delivered to the clerk of court, or (3) by oral consent in open court on the record.  Neb. Rev. Stat. § 25-1126.

 E|S attorneys are experts in civil trials, whether to a jury or to a judge, whether in equity or common law. Bonnie Boryca and E|S litigators can be reached at 402-397-2200. 

Thanks to E|S law clerk Ross Serena for contributing to the above article.

E|S Successful Before Nebraska Supreme Court In Construction Site Accident Case

In Porter v. Knife River, Inc., the Nebraska Supreme Court affirmed the district court for Thurston County’s grant of summary judgment to D.P. Sawyer, Inc., a traffic control and highway striping company. 310 Neb. 946 (2022).  Erickson | Sederstrom’s attorneys aided in the summary judgment and appeal process. 

In the case, the administrator of decedent’s estate sued D.P. Sawyer, along with several other construction contractors, alleging negligent maintenance of a construction site.  The administrator’s claim arose when an Omaha Tribal Police officer bypassed warning signals and road barricades along a highway closed for construction.  The officer then tragically collided with a large crane parked on the closed highway.  The administrator argued the contractors were liable for negligence because the crane was left on the highway without adequate illumination, barricades, or other traffic control, which allegedly caused decedent’s death. 

E|S attorneys argued defendants were entitled to summary judgment because the administrator failed to prove a prima facie case of negligence and that the decedent assumed the risk of harm involved when he bypassed the road barricades.  The Honorable John E. Samson, District Judge, agreed, granting summary judgment in favor of the defendants.  The administrator appealed.

The Nebraska Supreme Court affirmed the district court’s grant of summary judgment, determining that barricades placed at the termini of a closed highway need not absolutely prevent entrance to the construction area.  Highway contractors are not statutorily required to place additional signals at the termini of a closed highway notifying drivers that the highway utilizes dangerous machinery and may contain potential defects.  This is because warning signals and barricades at the termini thereof already give drivers notice that the highway is under construction and the condition of the highway itself shows that it is under various stages of completion. 

Accordingly, the Nebraska Supreme Court upheld the district court's order granting summary judgment because they offered evidence showing they exercised ordinary care under Nebraska law. 

Erickson | Sederstrom’s experienced litigation group has a long history of success in defending claims arising out of construction projects, vehicle accidents, and all types of injury accidents.  Ross M. Serena or E|S’s litigation attorneys can be reached at 402-397-2200.

Thanks to E|S law clerk Rob Toth for his assistance in preparing the above analysis!

Arbitration versus Litigation

The terms ‘arbitration’ and ‘litigation’ are often paired off against each other. When or if a dispute arises, we recommend knowing the general differences and similarities between these procedures.  

Litigation is a lawsuit filed in a court of law. People may be self-represented, but more often, attorneys represent their clients in moving through the phases of litigation. Phases include filing a complaint (or petition, depending on the court and type of issues involved), answer, discovery, motions, and may eventually involve a trial to a judge or jury.

 Arbitration is like litigation in that it is a process to resolve a dispute between two or more parties. It is a private means of resolving disputes. Arbitration may occur non-publicly. It usually takes place when parties have agreed in advance, through a written contract, to arbitrate future disputes on a specified subject matter, in lieu of bringing a lawsuit in court. The arbitrators are paid by the parties to assist in resolving the matter. Pros of arbitration can be that it moves more quickly, can be less expensive, and results in a final resolution earlier.  A major con for some is that there is no means of appeal or review after an arbitrator enters an award. The exception to that would require showing deceit or fraud or major errors in the fairness of the process, within very limited circumstances.

 More and more, large employers may require new employees to enter arbitration agreements in the onboarding process at start of employment. They will often cover possible future employment-related disputes. Employees should think carefully about rights they give up doing so. Employers should think carefully about how to draft these kinds of agreements and about how to present them to employees for their review and agreement. Courts and policy makers in our legislatures continue to consider how, whether, and to what extent these kinds of arbitration contracts should be enforced.

 If you are faced with arbitration in lieu of litigation, or are considering entering an agreement to arbitrate claims, or would like to craft a valid arbitration clause for your business, an attorney may be able to help. An experienced attorney can ensure your rights are fully addressed and you are fully informed about what you give up and what you gain in arbitration versus litigation.

 Bonnie Boryca and Erickson | Sederstrom, PC’s team of attorneys are well-versed in these issues. 

Partner Matt Quandt granted summary judgment in Sarpy County

Matt represented the City of Springfield, Nebraska regarding a single-vehicle injury accident that occurred within city limits. Plaintiff sued the City alleging:

• Improper intersection control under the Manual on Uniform Traffic Control Devices;

• Failing to reasonably place a “Stop” or “Yield” sign at the uncontrolled “T” intersection;

• Failing to place visible traffic control devices at an intersection with inadequate sight distance (Clear Sight Triangle) for uncontrolled approaching vehicles;

• Inadequate guidance for motorists approaching the uncontrolled “T” intersection;

• In constructing a retaining wall in excess of six feet high when the Defendant knew, or in the exercise of reasonable care should have known that said retaining wall would be unreasonably dangerous and/or present a hazard for members of the public;

• In constructing a retaining wall in excess of six feet high without providing a barrier at the top of said retaining wall to deter pedestrians, bikers and motorists from falling over the edge of the retaining wall when the Defendant knew or in the exercise of reasonable care should have known that said retaining wall would be unreasonably dangerous and/or present a hazard for members of the public;

• In failing to warn members of the public of the existence of the retaining wall hazardous drop off in excess of six feet;

• Violation of city ordinance regarding retaining wall height;

• Failing to provide a forgiving roadside suitable for the safe recovery and control of errant vehicles leaving the street.

Plaintiff claimed over $135,000 in medical bills, past and future lost wages, and permanent injury and disability.

With the help of Creighton law clerk Ali Clark, Matt filed a Motion for Summary Judgment. They argued that the City has discretionary function immunity, the purpose of which is to "prevent judicial 'second-guessing' of legislative and administrative decision grounded in social, economic, and political policy through the medium of an action in tort," and that Plaintiff was the sole proximate cause of the accident. After full briefing and oral arguments, Hon. George A. Thompson agreed and held:

• Defendant has sovereign immunity under the Political Subdivision Tort Claims Act; and

• Defendant was not the proximate cause of the accident.

The District Court of Sarpy County granted Defendant’s Motion for Summary Judgment and dismissed Plaintiff’s Complaint with prejudice.

Erickson | Sederstrom’s experienced litigation group is well-versed in defending claims brought under the Political Subdivision Tort Claims Act. Don’t hesitate to contact us with any litigation needs.

Trucking Accidents, Brokers, and Federal Preemption

In catastrophic trucking accidents, plaintiffs don't just limit their claims to the driver. More commonly, they try to sue the motor carrier, shipper, broker(s), etc. However, recent federal court rulings provide some insight and strategy for dismissing claims against brokers.

In Gillum v. High Standard, LLC, 2020 WL 444371 (W.D. Tex. Jan. 27, 2020), Scott Gillum was hit by a tractor-trailer and sued the driver, the motor carriers involved in hiring and training the driver, and the freight broker that selected the motor carriers. The freight broker, which Gillum accused of negligently hiring the motor carriers, moved to dismiss under the argument that federal law completely preempts state common law negligence claims against a freight broker. The federal district court agreed, concluding that the Federal Aviation Administration Authorization Act (FAAAA) completely preempts simple and gross negligence claims related to a freight broker’s services.

There was a split amongst courts that previously addressed this issue. The court considered the existing authority, looked at the plain language of the pertinent federal statutes, the limited statutory exceptions, Congressional intent, etc. The court held that “the FAAAA completely preempts Plaintiff's negligence claims . . . where that negligence ‘relates to’ the services the broker provides.”2020 WL 444371 at *7.

In essence, Plaintiff claims that [the broker] was negligent in arranging for the transportation of property between motor carriers. These allegations “go to the core of what it means to be a careful broker.” Krauss, 2018 WL 2063839, at *5 (holding FAAAA completely preempted claim against freight broker under negligent hiring theory because careless selection of a carrier is a core service of a freight broker); see also Georgia Nut Co. v. C.H. Robinson Co., No. 17 C 3018, 2017 WL 4864857 (N.D. Ill. Oct. 26, 2017) (“While the services of a freight broker do not include the actual transportation of property, they are focused on arranging how others will transport the property; these services, therefore, fall within the scope of the FAAAA preemption.”).

. . .

The Court finds most persuasive the line of cases that have held negligence claims against freight brokers are preempted under the FAAAA because “[e]nforcing state negligence laws that would have a direct and substantial impact on the way in which freight brokers hire and oversee transportation companies would hinder” the objective of the FAAAA in deregulating the shipping and transportation industry.

. . .

Plaintiff's claims against [the freight broker], therefore, seek to enforce a duty of care related to how Defendant arranged for the transportation of property between [the motor carriers], which—Plaintiff admits—are the very “services” Defendant provides as a federally-licensed freight broker. Such a claim “falls squarely within the preemption of the FAAAA.” Creagan, 354 F. Supp. 3d at 813.

. . .

Such a holding comports with the impetus behind the FAAAA's preemption provision because, in essence, Plaintiff is seeking “to reshape the level of service a broker must provide in selecting a motor carrier to transport property.” Miller v. C.H. Robinson Worldwide, No. 17-cv-408, 2018 WL 5981840, at *4 (D. Nevada Nov. 14, 2018), appeal docketed, No. 19-15981 (9th Cir. May 7, 2019). To avoid negligence liability, a broker like Defendant would need to inspect each motor carrier's background and the ways in which the motor carrier investigates, hires, and trains its own drivers, and “such additional inspection would result in state law being used to, at the least indirectly, regulate the provision of broker services by creating a standard of best practices, and ultimately contravening Congress's deregulatory objectives in enacting the FAAAA.” Id. (citing Rowe, 552 U.S. at 370).

Gillum, 2020 WL 444371 at *4, 5, 6.

Erickson | Sederstrom was recently involved in a similar case. The Southern District of Iowa held:

Plaintiffs’ negligence claim against NTC Logistics relates directly to NTC Logistics’ services as a broker and their arrangement of the transportation of property. Thus, the [Federal Aviation Administration Authorization Act] preempts it. Further, the FAAA’s safety regulation authority exception does not apply to Plaintiffs’ claim because the claim does not constitute a regulation of motor vehicles. Because Plaintiff’s claim against NTC Logistics falls under preemption provision of the FAAA and the safety regulatory exception to preemption does not apply, Plaintiffs fail to state a claim upon which relief may be granted.

Eugene Flanagan v. BNSF Railway Co. et al, No. 1:21-cv-00014-RGE-HCA (S.D. Iowa Nov. 19, 2021).

There is still a divide among some federal district courts, but current trends seem to be giving freight brokers detailed and persuasive preemption opinions to use for dismissal.

Matt Quandt is a member of Erickson | Sederstrom’s experienced litigation group. His practice concentrates on catastrophic trucking accidents. Mr. Quandt is a member of TIDA (the Trucking Industry Defense Association) and offers rapid response services. He is licensed in state and federal courts in Nebraska, Iowa, Missouri, and Kansas.

Nebraska Supreme Court Clarifies the Common Fund Doctrine

The common fund doctrine is a long held common law principle that allows recovery of reasonable attorney fees when legal services are used to recover money to which multiple people share an interest. The doctrine is typically applied where an insurance company makes a payment to its insured to cover certain out-of-pocket expenses. Then, when the insured files suit against the responsible party and recovers these out-of-pocket expenses, the insurance company has a right to recoup its earlier payments made pursuant to the policy, less the fees that the insured incurred to make that recovery.

While the doctrine has been around for decades, there still remain some gray areas in its application. One such gray area is whether the doctrine applies to an insurer's subrogation claim for medical payments under Neb. Rev. Stat. § 44-3,128.01. The Nebraska Supreme Court recently addressed that gray area and has provided some clarity.

In Hauptman O’Brien v. Auto-Owners Ins. Co., the insurer argued that an insurer who makes medical payments under an automobile liability policy is entitled to full reimbursement upon settlement of the case, without reduction for the attorney fees of the insured's lawyers. The basis for this argument was the insurer's position that § 44-3,128.01 preempts the common fund doctrine because the statute and doctrine were inconsistent and incompatible. The Court disagreed.

Applying rules of statutory construction, the Court found that is silent as to recovery of reasonable attorney fees under the common fund doctrine, and that by giving the insurer the right to recover medical payments in subrogation, the legislature did not necessarily rule out a reduction for attorney fees under the common fund doctrine. The Court decided that the legislature's silence in this regard meant that the common fund doctrine applies to allow for a reduction to account for attorney fees where a law firm secured a common fund in a pretrial settlement. The insurer was thus entitled to recover its $1,000 medical payment, less the 1/3 ($333) fee, to which the insured's counsel was entitled.

Thanks to law clerk Ross Serena for assistance in drafting this article. Matt Reilly and Erickson | Sederstrom’s litigation attorneys are ready to assist with a range of civil disputes and can be reached at 402-397-2200.

Erickson | Sederstrom represented at the Trucking Industry Defense Association’s annual meeting

Erickson | Sederstrom partner Matthew D. Quandt recently attended TIDA’s Annual Seminar in Philadelphia, PA.  The Trucking Industry Defense Association (TIDA) is a nonprofit association that is devoted to sharing knowledge/resources for defense of the trucking industry and committed to reducing the cost of claims and lawsuits. This year’s seminar featured presentations regarding the state of the industry, accident reconstruction experts, orthopedic experts, fraudulent claims, fleet management, jury psychology, and more.

 From the initial accident investigation, following a rapid response team call in the middle of the night, to pre-suit negotiations and litigation of catastrophic injury and wrongful death cases through discovery and trial, Matt handles all aspects of trucking and transportation litigation. He is committed to making sure his clients are comfortable with the litigation process and emphasizes early resolution of all claims in an efficient, cost-effective manner whenever possible.

A “Verdict” is not a “Judgment" for Purposes of Nebraska's Post Judgment Interest Statute, and it is Error to Grant Post Judgment Interest Until Certifying the Final Judgment

The recent Nebraska Supreme Court case of VKGS v. Planet Bingo, et.al., 309 Neb. 950, ___ N.W.2d ___ (2021) addressed proper application of Nebraska’s post judgment interest statute and the propriety of bifurcating issues at trial.   

Planet Bingo, LLC, (Planet Bingo) owns an electronic gaming software called EPIC.  EPIC was developed in the late 1990’s by Planet Bingo’s wholly owned subsidiary, Melange Computer Services, Inc. (Melange).  VKGS, LLC, (VKGS) and Planet Bingo, competitors in the bingo hall gaming industry, sued each other for breach of contract.  Although they were competitors, Planet Bingo and VKGS maintained a contractual business relationship from approximately 2003 through 2012, which as of 2005 was protected by an extensive confidentiality provision drafted by VKGS.   

In 2011, Planet Bingo sued VKGS for breach of contract for VKGS’s misuse of Planet Bingo’s confidential information -- by taking confidential EPIC information to develop its own competing software program called OMNI. VKGS in turn alleged that Planet Bingo breached contractual obligations and tortiously interfered with business relations by using pricing information and disparagement to influence customers. Two separate jury trials ensued. 

A jury trial commenced in August 2018 on both parties’ claims.  About halfway through the trial VKGS attempted to offer a Canadian Patent application that contained some description of EPIC’s source code.  VKGS claimed that this public discourse of confidential information precluded Planet Bingo’s misuse of confidential information as a matter of law.   But VKGS did not have a certified copy of the patent application and failed to otherwise authenticate it at trial.  VKGS did not disclose the patent application as a trial exhibit.  The district court sustained Planet Bingo’s objections and did not receive the exhibit into evidence. 

Furthermore, the existence of the patent application raised issues about whether Planet Bingo could proceed with its case in chief.  Thus, VKGS moved to dismiss Planet Bingo’s misuse claim.  Because VKGS had not yet rested its case in chief, and because Planet Bingo had not yet presented evidence on its claims, the court instead bifurcated VKGS’s and Planet Bingo’s claims and proceeded on the VKGS claims only.  About a year later, in June 2019, Planet Bingo’s claims were tried to a separate jury.   

In the trial on VKGS’ claims, the jury found Planet Bingo liable for $558,405. In the second trial on Planet Bingo’s claims, the jury found VKGS liable for $2,990,000.  After the second trial, the court offset the verdicts and entered one judgment in Planet Bingo’s favor, but also awarded VKGS post judgment interest on its 2019 verdict while still offsetting VKGS’ award.   

VKGS appealed the court’s order bifurcating VKGS’ and Planet Bingo’s claims and also appealed the court’s decision to exclude the patent application from evidence in the first trial (the patent application was eventually received into evidence during the second trial of Planet Bingo’s claims).  Planet Bingo cross appealed claiming that the court erred in awarding VKGS post-judgment interest on its verdict because the “verdict” was not a judgment for purposes of the post-judgment intertest statute.  

As to the patent application, the Nebraska Supreme Court held that VKGS failed to authenticate the exhibit.  Also, in noting that authentication is a condition precedent to a document’s admission into evidence the court said  “Neb. Rev. Stat. § 27-901(1) (Reissue 2016) does not impose a high hurdle for authentication or identification of proffered evidence as a condition precedent to admissibility. ”  Instead, authentication “may be satisfied by testimony that a matter is what it is claimed to be, and proper authentication may also be attained by evidence of appearance, contents, substance, internal patterns, or other distinctive characteristics, taken in conjunction with circumstances, sufficient to support a finding that the matter in question is what it is claimed to be. ”  In fact, the Court noted that certified public records are self-authenticating under Neb. Rev. Stat. § 27-902(4) (Reissue 2016) but VKGS failed to even offer a certified copy of the application. 

As to the bifurcation issue, the Court held bifurcation of a trial may be appropriate where “separate proceedings will do justice, avoid prejudice, and further the convenience of the parties and the court.”   Additionally, the Court reaffirmed that trial courts have the inherent power over the general conduct of a trial and a decision to bifurcate will not be overturned absent an abuse of discretion.  The Court held that no abuse of discretion occurred because the unauthenticated patent application was not properly offered in VKGS’ case in chief because its contents were irrelevant to VKGS’ tortious interference claim.  Also, the potential effect of the application on Planet Bingo’s claims was a sufficient reason to bifurcate the trial. Thus, the Court dismissed VKGS’ appeal.  

As to post judgment interest, Court agreed with Planet Bingo that VKGS’ trial verdict was not a “judgment’ for purposes of post judgment interest and that the lower court erred in awarding VKGS post judgment interest.  Instead, the Court held that the two competing verdicts were required to be offset and interest could only accrue on the final judgement entered after the verdicts were offset.  Thus, the Court reversed the trial court’s award of post judgment interest on VKGS’ verdict and held “Final judgment in this case occurred after all of the parties’ claims were adjudicated and both jury verdicts were accepted by the district court. As post judgment interest accrues only on judgments, and [Neb. Rev. Stat.] § 25-1316 contemplates only one ‘judgment,’ the district court erred in awarding VKGS post judgment interest when interest had not begun to accrue on VKGS’ claim and Planet Bingo’s claim exceeded VKGS’ claim.”

E|S Attorney Pat Guinan Does it Again.

Congrats to our attorney Patrick Guinan on another appeal win, this time in front of the United States Court of Appeals for the Eighth Circuit. The court upheld the lower court’s entry of summary judgment completely in favor of certain defendants, including one represented by Erickson & Sedestrom. The opinion can be found here: https://www.ca8.uscourts.gov/todays-opinions (Pals v. Weekly et al).

Eighth Circuit Denies Relief for Female Employee Who Was Paid Less for Doing More

In Perry v. Zoetis, the United States Court of Appeals for the Eighth Circuit upheld the United States District Court for the District of Nebraska’s decision finding that a female employee was not discriminated against for receiving less compensation than her male co-workers when she voluntarily chose to complete tasks that were not required of her. See Perry v. Zoetis, LLC, No. 20-2232, 2021 WL 3435535 (8th Cir. Aug. 6, 2021).

Barbara Perry, a former employee of Zoetis, LLC, became upset upon discovering she was making less money than her male co-workers. Perry met with the company’s human resource manager and requested a raise, arguing she was performing more job duties and receiving less compensation than her male co-workers. Soon after her requests were denied, Perry quit her job and brought suit against Zoetis under the Nebraska Equal Pay Act (“NEPA”) and the Nebraska Fair Employment Practices Act (“NFEPA”), alleging she was discriminated against because she received less compensation for performing more duties than her male peers.

When bringing a claim under NEPA, a plaintiff must establish that they completed equal work on jobs requiring equal skill, effort, and responsibility. When comparing Perry’s position to those of her higher-paid, male co-workers, the facts revealed that the male co-workers’ positions required different skills and responsibilities than Perry’s. Perry argued she completed the same duties as her male co-workers, but the record showed such duties were not required of her; rather, she volunteered to take on those extra tasks.

The court stated that “[w]hile Perry’s work ethic is laudable, the fact that she was not paid more for the extra tasks, or for her skill in completing them, is not proof of sex discrimination.” Perry needed to provide evidence that showed she was doing equal work requiring equal responsibility, which she failed to do since her position did not require her to take on the additional duties of her co-workers.

For similar reasons, Perry’s claim under the NFEPA was also rejected. Perry could not meet her burden to prove that she was treated differently than male employees who were “similarly situated” because the male co-workers had different duties and responsibilities.

The Eighth Circuit further relied on facts showing that one male co-worker earned more than Perry because new employee rates were based on differing levels of responsibility, education, and related experience. Another male co-worker earned more than Perry because Zoetis has an internal policy to keep an employee’s pay rate the same when transferring the employee from a different department. Ultimately, Perry failed to provide evidence that Zoetis “offered a phony excuse” for the disparate treatment in pay, and she was denied relief.

Bonnie Boryca is an employment and litigation attorney with Erickson & Sederstrom, PC in Omaha, Nebraska. She was assisted in the above article by law clerk Alison Clark, who will be joining the firm in 2022 as an associate. Bonnie can be reached at 402-397-2200 or boryca@eslaw.com.

No Recovery for Alleged Demotion of Military Servicemember Upon Return from Deployment

A former Union Pacific employee wasn’t entitled to judgment as a matter of law (i.e., a ruling in his favor) or attorneys’ fees after a job change following his return from military deployment, the U.S. 8th Circuit Court of Appeals (which covers Nebraska employers) recently decided, reversing the lower court’s opinion.

Facts

Rodolfo Quiles began working for Union Pacific as a general manager of safety analysis in 2014. He supervised other employees and received “D-band” level compensation. With A-band pay being the lowest, his salary slotted him just below E-band (or executive-level) compensation.

Quiles served in the U.S. Marine Corps Reserve and left Union Pacific in 2015 for voluntary deployment. While deployed, the company underwent a reduction in force (RIF), which eliminated all general manager titles, reclassifying many of them as directors instead. In addition, the company:

·         Adjusted the general director position to require five years of field experience; and

·         Hired a new employee for the position of general director of safety analysis, who Quiles believed was intended to be his replacement.

After the deployment, Quiles returned to work at Union Pacific under a new role as director of safety analysis. Although he received the same benefits and his compensation remained at the D-band level, he viewed the new job as a demotion. He claimed he was given less responsibility and status than in his previous position as general manager.

Quiles didn’t qualify for the general director job because he lacked the five years of field experience necessary to meet the new requirement for the position.

Unhappy with the new job title, Quiles became insubordinate, and his work performance declined, leading to his termination from Union Pacific in 2016. He then sued the company claiming it violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by effectively demoting him during his military leave.

How USERRA works

Under USERRA, military servicemembers are entitled to reemployment when they return from service that doesn’t exceed five years. Upon returning to work, they’re entitled to return to a job based on the “escalator position” principle, which places them in the job they “would have attained with reasonable certainty if not for the absence due to uniformed service.” The principle covers pay, benefits, seniority, and other job perks they would have attained if not for the period of service.

There are exceptions to the rule. You don’t have to reemploy a servicemember if:

·         The company’s circumstances “have so changed as to make such reemployment impossible or unreasonable”;

·         Employment would “impose an undue hardship” on your company; or

·         The servicemember’s previous employment was “for a brief, nonrecurrent period” with no reasonable expectation it would continue for a significant length of time.

The district court ruled in Quiles’ favor, finding Union Pacific demoted him upon his return in violation of USERRA and awarding attorneys’ fees. The case proceeded to trial on the remaining claims, and the jury returned a verdict in the employer’s favor, concluding Quiles was fired for cause and not entitled to any damages.

8th Circuit’s ruling

After the favorable jury verdict, Union Pacific appealed the district court’s grant of judgment as a matter of law and award of attorneys’ fees to Quiles. In reversing the lower court’s decision, the 8th Circuit held it was impossible to reemploy him to his previous position because:

·         It had been eliminated; and

·         A reasonable jury could find “Union Pacific attempted to fit Quiles into an appropriate job within the corporation’s reorganized structure upon his return from deployment” in accordance with the escalator-position principle and for which he was qualified.

Because Quiles wasn’t entitled to judgment as a matter of law, the court further held he didn’t qualify as a prevailing party for purposes of attorneys’ fees. Quiles v. Union Pac. R.R. Co., Inc., No. 19-3489 (8th Cir., July 6, 2021).

Bottom line

You should take care in responding to servicemembers’ requests for leave and be aware of USERRA’s strict requirements. When in doubt, call your employment law attorney.

Bonnie Boryca is one of Erickson Sederstrom’s employment attorneys and can be reached at boryca@eslaw.com or 402-397-2200. This article was written with assistance of law clerk Ali Clark, who will be joining the firm as an associate in the fall of 2022.

No Double Liability to Amputee for Loss of Foot and Toes in Workers’ Compensation Matter

In a recent decision, the Nebraska Supreme Court considered whether the discontinuance of temporary partial disability benefits triggered the payment of permanent partial disability payments in a Workers’ Compensation case involving an employee who endured an amputation below his knee as a result of a work-related injury. 

In Melton v. City of Holdrege, Mr. Benjamin Melton (“Employee”) was employed by the City of Holdrege (“City”) as a journey-man lineman where he sustained a work-related injury resulting in an amputation of his left leg just below the knee.  309 Neb. 385, 386-87 (2021).  Thereafter, Employee obtained a prosthesis; however, he endured issues with the prosthesis including shrinking, swelling, sweating, and obtaining a good fit.  Just over six years later, Employer provided City medical documentation from his physician indicating he reached maximum medical improvement (“MMI”).  City paid Employee permanent partial disability benefits for a one hundred percent loss of his foot and an additional five percent loss to his leg upon receipt of such documentation. 

The trial court waded through conflicting evidence concerning Employee’s impairment rating and when Employee reached MMI.  It was determined Employee’s amputation below the knee entitled him to statutory benefits for 150 weeks under Neb. Rev. Stat. Ann. § 48-121(3).  The trial court reasoned that Employee had not lost all functional use of his left leg, but his loss of thigh strength and atrophy combined with his knee pain reduced the function of his leg beyond the loss of his foot.  Employee suffered a twenty percent loss of function to his leg, entitling him to forty-three weeks of disability benefits.  Employee was awarded a combined total of 193 weeks of compensation, rejecting Employee’s argument that he was entitled to an award for the loss of each toe on his left foot in addition to the loss of that foot.   

On appeal, Employee argued the trial court (1) failed to evaluate loss of use of his leg without the prosthesis attached when determining his impairment; (2) should have awarded him compensation for the total loss of use of his leg; and (3) erred in failing to award him consecutive disability benefits for a total loss of all his toes, his foot, and use of his left leg.   

The Nebraska Supreme Court held the trial court did not err in failing to evaluate Employee’s loss of use of his leg without his prosthesis attached since Employee did not lose all functional use of his left leg.  The court reasoned Employee, without his prosthesis, could pick his left leg up waist high, crawl up stairs, climb ladders, and navigate uneven terrain by crawling, scooting, or sliding.  Accordingly, the trial court was not in error in determining Employee’s loss based on the use of his prosthesis.   

To bolster his argument in favor of an award for a total loss of use for his left leg, Employee turned to the practical intents and purposes test, which derived from Pennsylvania, and was cited in Jacob v. Columbia Ins. Group, a Nebraska Court of Appeals case.  2 Neb. App. 473, (1994).  In essence, the test has been used to determine whether a disability to a claimant’s body renders such a body part to serve “no real purpose.”  Applied in Melton, Employee argued he sustained a 100 percent loss of use of his left leg.  However, the court held Employee’s left leg could not be rendered “useless” because he retained enough strength in his left leg to successfully use the prosthetic device by being able to bend his knee and support weight on the residual limb.  Therefore, although Employee’s leg was not useless, Employee suffered an additional twenty percent loss of function in his leg that went beyond what would have otherwise been expected after amputation of his left leg below the knee.   

Finally, Employee asserted he was entitled to consecutive amounts of disability benefits for the loss of his five toes, the loss of his left foot, and the total loss of his left leg under Neb. Rev. Stat. Ann. § 48-121(3).  However, the court directed Employee to the four corners of the law and held § 48-121(3) explicitly stated a below-the-knee amputation was the equivalent of a loss of a foot and did not equate to the loss of one’s entire leg.  The court turned to the policy behind the law and reasoned a party may not have double recovery for a single injury.  Accordingly, Employee’s loss of his leg below-the-knee would obviously include the loss of his toes under § 48-121(3) since the legislature limited the loss to the foot.   

Ultimately, the court upheld the trial court’s determinations that Employee did not suffer a total loss of use of his leg because it appropriately compensated Employee for the functional loss of his leg that was not already accounted for in the compensation for the loss of his foot.  Further, the court upheld the trial court’s award of loss of use benefits for the leg and refused to extend double recovery to Employee.   

This article was prepared by Erickson Sederstrom’s law clerks Alison Clark and Rob Toth under the direction of employment attorney Bonnie Boryca, who can be reached at 402-397-2200.

COVID-19 Impacts Ordinary Course Defense When Defending Preference Claims

As a business owner or manager, it is frustrating to receive a bankruptcy preference demand letter.  Unless you want to pay the preference demand, you have little choice but to undertake a defense.  Unfortunately, the business disruptions caused by the COVID-19 pandemic have further complicated the legal landscape surrounding defense of preference claims.  The purpose of this article is to briefly summarize preference procedures, explain the COVID pandemic impact regarding preferences, and discuss some general strategies for businesses responding to or defending against preference claims.

I.                     Preference Process

Transfers made by a business within 90 days of it filing a bankruptcy petition under the Bankruptcy Code are potentially subject to a preference action.  In many cases, such transfers consist of payment for goods or services received by the bankrupt party in the months prior to filing its bankruptcy petition.  The preference statutes are intended to prevent the bankrupt party from preferentially transferring assets to favored parties or individuals before the bankruptcy is filed, to the detriment of other creditors, during the time leading up to the bankruptcy (when the business is likely insolvent). 

Bankruptcy trustees and debtors-in-possession have the right to seek the return into the bankruptcy estate of preferentially transferred assets or funds, so the assets can be allocated and distributed as part of the orderly bankruptcy process.  11 U.S.C. § 547(c)(2).  Typically, a preference claim begins with a demand letter being sent to the party who received the funds, demanding that payment be made back to the bankruptcy estate.  If the preference claim is not resolved based upon the demand letter, the matter may progress to an adversary proceeding, a lawsuit within the bankruptcy case for recovery of the alleged preference funds.

The most common defense against preference claims is that the transfer at issue to the bankrupt party was made “in the ordinary course” of business.  Proving the “ordinary course’ defense requires the party defending against the preference claim to show:  (A) the transfer was made in the ordinary course of business or financial affairs of the debtor and the transferee or (B) the transfer was made according to ordinary business terms.  11 U.S.C. § 547(c)(2).  (A) requires a subjective comparison of the historical transactions between this debtor and this creditor.  (B) requires an objective comparison with other transactions between parties in the same industry.  Either way, the question is whether the alleged preferential transfer was “ordinary”. 

II.                   COVID Impact

With the impact of COVID-19 since early 2020, very little has been “ordinary” about how many, or even most, businesses or industries have functioned.  This lack of normality makes it more difficult to present and prove the “ordinary course” defense.  When a course of dealing between the debtor and creditor, or even an entire industry, has been disrupted due to impacts of COVID-19, parties defending against preference actions need to think creatively.  Referring back to the business relationship between debtor and creditor preceding the 90 day preference period might not provide much value, if that time frame was influenced by COVID-19 effects. 

 III.                 Defense Perspective

When defending against preference claims, creditors preparing a defense need to take a broader look than in the past and be prepared to present extensive evidentiary support.  Developing and presenting an effective defense requires the assistance of experienced counsel to identify the best way to identify and present supporting evidence.

Questions for the creditor to evaluate include:

What relationship did this debtor and this creditor have prior to COVID-19 impacts and what changed?  How can these separate periods be quantified?  When was the last time their business relationship was “ordinary”?  If the transfer that is the subject of the preference claim was affected by COVID-19, what still makes it “ordinary”?

Was this transfer “ordinary” pursuant to a broader analysis of industry practices?  How can the industry be redefined to show what is “ordinary”?

As discussed above, defending against preference claims requires a solid understanding of relevant bankruptcy law, and effective application of bankruptcy law to the current business environment.  Erickson|Sederstrom’s bankruptcy attorneys are ready to help if your business needs to defend against a preference demand. 

New Nebraska Law Protects Culture-Specific Hairstyles

Recently enacted into law, Legislative Bill (LB) 451 amends the Nebraska Fair Employment Practices Act (NFEPA) to expand the definition of “race” to include protection against discrimination for characteristics such as skin color, hair texture, and protective hairstyles. Governor Pete Ricketts signed the legislation on May 5, and it will take effect 90 days after the current legislative session adjourns. Let’s examine the new amendment.

What new legislation covers

LB 451, introduced by Senator Terrell McKinney of Omaha, passed the legislature by a 40-4 vote (with five senators not voting) on April 29. The intent was to protect individuals against race discrimination based on characteristics associated with race, culture, and personhood, including natural and protective hairstyles. The law defines “protective hairstyles” to include braids, locks, and twists.

In legislative hearings and floor debate, the bill’s supporters claimed employers have forced some employees to straighten or trim their hair or cut off braids and dreadlocks to maintain their employment. Under the new law, employers can’t discriminate or base employment decisions on an individual’s culture-specific hair texture or hairstyle.

You’ll still be able to maintain bona fide health and safety standards that regulate characteristics associated with race and culture-specific hairstyles, however, if you can show:

·         A safety policy or grooming standard is necessary to guarantee employees’ health or safety;

·         You adopted the standard for nondiscriminatory reasons;

·         It’s applied equally; and

·         You’ve engaged in good-faith efforts to reasonably accommodate a particular applicant or employee with regard to the required standard.

For employers in most industries, however, it will likely be very difficult to establish a need for an exception to the standard.

Finally, the new law contains an exception for the Nebraska State Patrol, county sheriff’s departments, and various other law enforcement agencies as well as the Nebraska National Guard, which may continue to impose their own dress and grooming standards.

What happens next

The Nebraska Legislature is expected to end its session in very late May or early June. Therefore, the new law will go into effect sometime around September 1, 2021.

It’s too early to project the law’s full impact or the number of new employment discrimination claims it will likely generate. We may have to wait a few years to see how the claims are processed and interpreted by the Nebraska Equal Opportunity Commission and the courts. Of course, we’ll provide updates as necessary.

Attorneys Mark Schorr, Bonnie Boryca, and Heather Veik lead Erickson Sederstrom’s labor and employment group and can be reached at (402) 397-2200.

‘Patient Safety Near Miss’ Justifies Termination Without Age or Disability Discrimination Liability

After a university dismissed a member of its medical residency program, she sued for wrongful termination and alleged she had been a victim of age discrimination under the Age Discrimination in Employment Act (ADEA) and the Nebraska Fair Employment Practices Act (NFEPA) as well as disability discrimination and retaliation under both under the Americans with Disabilities Act (ADA) and the NFEPA. The U.S. 8th Circuit Court of Appeals (which covers Nebraska employers) recently upheld the dismissal of her claims without a trial, however, affirming a U.S. District Court for the District of Nebraska ruling.

Facts

Dr. Mary E. Canning, age 57, became an internal medicine resident at Creighton University in July 2015. During the first year of residency, she scored in the lowest 15 percent in the country on an in-service examination. Several doctors expressed concerns about her basic skills and level of competence, including memory issues.

After reviewing each resident's progress, a committee determined Canning hadn’t evolved in several areas, making it necessary for her to repeat the first year of residency. The panel let her know she was being placed on a leave of absence with pay until a fitness-for-duty evaluation could be conducted proving she was safe for patient care. She also was told her residency contract wouldn’t be renewed regardless of the evaluation’s results.

Canning retained counsel who sent the committee members a letter outlining their alleged acts of unlawful discrimination and objecting to her participation in the fitness-for-duty evaluation. Creighton's counsel in turn offered a firm resolve that she could repeat the first year of residency so long as she agreed to the evaluation and was cleared for duty.

A neuropsychologist evaluated Canning and found her to be in good mental health. The fitness-for-duty evaluation’s results also gave no indications of medical or psychiatric conditions that would preclude her from performing her duties. Therefore, she was permitted to repeat the residency intern year.

Canning continued to struggle academically, showing an inability to complete assessments or improve to the level of what would be expected from a first-year resident. After taking the in-service exam for the second time and scoring in the lowest seven percent in the country, she was placed on probation.

While on probation, Canning made an error that could have affected a patient’s safety. She discharged a patient admitted for a pulmonary embolism without providing a prescription for an anticoagulant. Her supervisors had previously reviewed the discharge plan with her and instructed her to prescribe the anticoagulant.

Canning admitted the error was “extremely serious.” The committee let her know she had been dismissed from the residency program, pointing to the “significant patient safety near miss” as its reason.

Resident’s claims and lawsuit

After Canning sued for age and disability discrimination and retaliation, Creighton offered nondiscriminatory reasons for terminating her from the residency program by thoroughly documenting her:

·         Lack of medical knowledge;

·         Substandard clinical skills; and

·         Inability to perform a first-year internal medicine resident's duties in a timely fashion.

The documentation showed Canning’s performance in the residency program lacked progression and was at the minimum standards expected of a first-year resident. Creighton argued it “had a right—if not an obligation—to respond to an act or omission affecting patient safety with termination of the responsible individual.”

Creighton asked for summary judgment (dismissal without a trial), and the district court agreed, concluding there wasn’t enough evidence for a jury ever to rule in Canning’s favor. She appealed.

On appeal, Canning argued the district court erred when it concluded no rational fact-finder ever could conclude her termination was motivated by age, but the 8th Circuit affirmed the ruling. It pointed out Creighton produced a legitimate, nondiscriminatory reason for the termination by explaining she had made an “egregious” error affecting patient safety in spite of “supervisor and attending efforts.”

Thus, Creighton satisfied its burden. To rebut the reason, Canning needed to show it was pretextual (or a cover-up for illegal discrimination). But, the 8th Circuit agreed with the district court that her proof had fallen short.

Bottom line

Sensitivity to an employee’s potential or actual disabilities is a good practice and required by the law in terms of considering accommodations. Often, older employees’ age may lead to the question of disabilities. But safety concerns, particularly in the medical arena, will often be paramount and provide justification for dealing with an employee’s errors that threaten the safety of a patient (or coworker, client, customer, or the public).

Bonnie M. Boryca is an attorney with Erickson│Sederstrom, P.C., in Omaha, Nebraska. You can reach her at 402-397-2200 or boryca@eslaw.com.

Nebraska: A Second Amendment Sanctuary State

The Second Amendment of the Untied State’s Constitution reads, “A well regulated Militia, being necessary to the security of a free State, the right of the people to bear Arms, shall not be infringed.” According to the Pew Research Center, over 72 million Americans own a gun and approximately three-quarters of Americans consider their right to own a gun essential to their freedom.

Many gun owning Americans were concerned with President Biden’s April 07, 2021 announcement that his administration would not “wait for Congress” to draft new legislation regarding gun ownership. The Biden administration advised that it will order the Department of Justice to issue new proposed rules to stop the proliferation of guns assembled from kits, provide a clear definition for stabilizing devices used in target shooting pistols, and publish model “red flag” legislation for states.

In the wake of the presidential announcement, Nebraska Governor Pete Ricketts, issued a signed proclamation designating Nebraska as a “Second Amendment Sanctuary State.” That proclamation read:

WHEREAS, The Second Amendment to the U.S. Constitution Protects the right to keep and bear arms; and

WHEREAS, Article 1-1 of the Nebraska State Constitution guarantees “the right to keep and bear arms for security or defense of self, family, home, and others, and for lawful common defense, hunting, recreational use, and all other lawful purposes” and states that this right “shall not be denied or infringed by the state or any subdivision thereof;” and

WHEREAS, The State of Nebraska has protected the right of Nebraskans to open carry and conceal carry; and

WHEREAS, Nebraska will stand up against federal overreach and attempts to regulate gun ownership and use in the Good Life; and

WHEREAS, The White House and U.S. Congress have announced their intention to pursue measures that would infringe on the right to keep and bear arms; and

WHEREAS, A growing number of counties in Nebraska have declared themselves as “Second Amendment Sanctuary” counties; and

WHEREAS, Nebraska will continue to take any necessary step to defend our right to keep and bear arms.

NOW, THEREFORE, I Pete Ricketts, Governor of the State of Nebraska DO HERBY PROCLAIM the State of Nebraska is a

SECOND AMENDMENT SANCTUARY STATE

and I do hereby urge all citizens to take due note of the designation.

IN WITNESS WHEREOF, I have hereunto set my hand and cause the Great Seal of the State of Nebraska to be affixed this Thirteenth day of April, in the year of our Lord Two Thousand Twenty-One.

With so much attention on firearms and the importance of the Second Amendment to the United States Constitution, responsible gun owners and prospective gun owners need to be informed regarding their rights and the laws surrounding gun ownership and possession. There are currently an array of confusing and rapidly changing legal authorities affecting gun owners. For example, there are many hurdles that a hopeful gun owner must clear before becoming an actual gun owner such as background checks. Gun owners must also be familiar with the many laws setting forth restrictions on the ownership of both handguns and long guns, the laws related to when and how guns can be carried concealed, when and how guns can be carried in the open, and where guns are and are not permitted. Not being familiar with these laws can have severe consequences for gun owners. Those consequences can include criminal repercussions and loss of a gun owner’s right to own or possess a firearm in the future. Some prospective gun owners may have already lost their rights to own a gun and wish to regain that right through the proper channels but do not know how. And, finally, current gun owners may wish to protect the ownership of their firearms with devices known as “gun trusts” but do not know where to get started.

Many of these answers can be found in Nebraska Revised Statute Chapters 69 and Chapter 28. Those interested in purchasing a firearm, or having questions about firearm ownership or possession should not hesitate to review the legislative materials in these statutes or contact an attorney familiar with the subject. Erickson | Sederstrom has several attorneys with significant expertise regarding this area of the law.

United States Supreme Court Holds that "Mere Retention" of Debtor Property Does Not Violate the Automatic Stay

The United States Supreme Court recently held, in City of Chicago v. Fulton, that a creditor's "mere retention" of a debtor's property does not violate the bankruptcy automatic stay.  In Fulton, the Court found that the Bankruptcy Code permits a creditor to maintain the status quo when a debtor files for bankruptcy.  In other words, the creditor is not automatically compelled to return property of the debtor that the creditor recovered prior to the bankruptcy filing, but the creditor also cannot dispose of the property while the bankruptcy case is pending absent permission from the bankruptcy court. 

                As most bankruptcy creditors are aware, the Bankruptcy Code contains an automatic stay within § 362(a)(3).  The automatic stay acts to automatically protect the debtor and his or her property from most collection or enforcement acts by creditors upon filing of a bankruptcy petition.  Many debtors' counsel have also taken the position that the automatic stay requires creditors to return property to the debtor if the property had been repossessed or otherwise recovered by the creditor shortly before the bankruptcy filing.  Bankruptcy courts had inconsistently interpreted this aspect of the automatic stay.  Fulton made clear that if the debtor seeks return of the property, the correct means to pursue the return is a Motion for Turnover under §542 of the Bankruptcy Code, not the automatic stay statute. 

                Fulton is good news for secured creditors who fear bankruptcy filings by their defaulted customers.  If the creditor can lawfully recover collateral before a bankruptcy case is commenced, the creditor is not automatically compelled to return that collateral as soon as the bankruptcy is filed.  The debtor must take the affirmative step of filing a Motion for Turnover to compel return of the property. 

                Writing the Supreme Court’s opinion, Justice Samuel Alito noted that the language of § 362(a)(3) leads most logically to the conclusion that only affirmative acts that disturb the status quo are prohibited.  If collateral is already in the creditor’s possession when the bankruptcy case is commenced, the creditor must retain the property, but at least is not automatically required to give up possession without a separate Motion for Turnover by the debtor and opportunity for the Bankruptcy Court to decide that issue.   

                Creditors navigating bankruptcy law issues regarding how to deal with collateral or other property recovered from debtors should seek legal advice about how to proceed.  Bankruptcy law remains fraught with potential pitfalls for creditors.  Erickson|Sederstrom’s creditors’ rights attorneys provide timely advice to creditors who are seeking guidance regarding pre-bankruptcy and bankruptcy rights against debtors and debtors’ property. 

Nebraska Supreme Court Clarifies the Duties of Mental Health Professionals

The Nebraska Supreme Court recently clarified duties of mental health professionals to warn and protect third parties from their patients.  In Rodriguez v. Lasting Hope Recovery Ctr. of Cath. Health Initiatives, the court held that mental health professionals owe no duty as a matter of law to third parties for physical injuries caused by a patient who has not “actually communicated” such a threat to their mental health professionals.  The court further determined that a mental health professional’s duty to warn or protect may be met by reasonable efforts to communicate the threat to the third party and law enforcement. 

 Facts of Rodriguez

 In Rodriguez, the Omaha police placed a patient under emergency protective custody and transported him to Lasting Hope because he expressed intentions of killing his mother.  Upon arrival, the patient was assigned a treating psychiatrist.  The patient’s psychiatrist determined the patient was paranoid, homicidal, delusional, and posed a risk for harm to others outside the hospital environment.  The psychiatrist’s determination was based on the patient’s previously expressed intentions of killing his mother.  Therefore, the psychiatrist recommended for the patient five to seven days’ hospitalization for stabilization and safety, and Lasting Hope called the patient’s mother to warn her of his threats.  

 During the patient’s hospitalization, his girlfriend visited and expressed that she no longer wished to be his girlfriend.  The girlfriend was not afforded the same warning as his mother because the patient had not expressed a similar threat against his girlfriend. 

 After six days of compliance with medication and hospitalization by the patient, the psychiatrist concluded the patient was ready to be released.  Further, the patient no longer expressed an intent to harm his mother.  In fact, the patient stated to his psychiatrist that he “had a good conversation” with his mother over the telephone during his hospitalization, and he committed to “not act to harm anyone.”

 The former girlfriend’s body was discovered the following day.  Investigators concluded that the patient strangled his former girlfriend.  The decedent’s parents brought action against Lasting Hope claiming that it was responsible for wrongful death. 

 Duty to Warn & Protect

 The Nebraska Mental Health Practice Act and the Nebraska Psychology Practice Act both contain limits on practitioners’ duties regarding treating patients with mental illness.  These limits were enacted in response to the California Supreme Court's decision in Tarasoff v. Regents of University of California.  There, the court held that a mental health professional “who knows or should know that a patient poses a serious danger of violence to a third party owes a duty to exercise reasonable care to warn and protect that third party.”   

 In the case of Munstermann v. Alegent Health, the Nebraska Supreme Court determined that:

 [A] psychiatrist is liable for failing to warn of and protect from a patient’s threatened violent behavior, or failing to predict and warn of and protect from a patient’s violent behavior, when the patient has communicated to the psychiatrist a serious threat of physical violence against himself, herself, or a reasonably identifiable victim or victims.  The duty to warn of or to take reasonable precautions to provide protection from violent behavior shall arise only under those limited circumstances . . . and shall be discharged by the psychiatrist if reasonable efforts are made to communicate the threat to the victim or victims and to a law enforcement agency.

 Like the Munstermann rule, the Mental Health Practice Act and the Psychology Practice Act explicitly require that for a duty to warn to arise, a serious threat of physical violence against a reasonably identifiable victim must be “actually communicated” to a mental health professional.  “Actual communication” requires the patient to verbally express or convey to the psychiatrist their prediction to commit physical violence either against themself or a reasonably identifiable victim.

 The only reasonably identifiable victim the patient “actually communicated” an intent to physically harm was his own mother.  Based on these verbal expressions of threats, the psychiatrist ordered Lasting Hope staff to call the patient’s mother to warn her.  By the time the psychiatrist had ordered the patient’s discharge, she knew that Omaha police were aware of the patient’s threats of physical violence against his mother because Lasting Hope staff had discussed the threats with law enforcement officers, who also warned the patient’s mother.  The patient never actually communicated to his psychiatrist that he intended to harm his former girlfriend; therefore, the psychiatrist had no duty to warn her.

 Under the Munstermann rule, psychiatrists owe no duty as a matter of law to third parties for physical injuries caused by a patient who have not “actually communicated” a threat of physical violence.  Once an “actual communication” has taken place, any duty to warn or protect on the part of the psychiatrist can be discharged by reasonable efforts to communicate the threat to the victim and a law enforcement agency.  Here, the patient’s lack of communicated threats against his former girlfriend meant that no duty to warn or protect was triggered for the psychiatrist.  The former girlfriend’s death was not legally attributable to a breach of duty by the psychiatrist or Lasting Hope because the patient never “actually communicated” that he intended to harm his former girlfriend. 

 Future Developments

 When faced with a patient who “actually communicates” a serious threat of physical violence against a reasonably identifiable individual, mental health professionals have a duty to both warn and protect that individual.  However, these duties shall be discharged by the psychiatrist if reasonable efforts are made to communicate the threat to both the individual and to a law enforcement agency.

 Erickson | Sederstrom has provided counsel to mental health and other practitioners for decades.  Please consult with one of our attorneys if you have questions regarding impact of the Rodriguez decision and how mental health practitioners can minimize their legal risks.

Erickson|Sederstrom Elects Matt Quandt and Shay Garvin as Partners; Connor Orr Joins the Firm

ERICKSON | SEDERSTROM is pleased to announce that MATTHEW D. QUANDT and SHAY GARVIN have been elected Partners and CONNOR W. ORR has joined the firm as an Associate.

Matt has been with the firm for two years, before which he litigated at a reputable Kansas City firm. His practice focuses on civil litigation, including catastrophic injury and wrongful death, trucking and transportation, construction defect, product liability, and professional liability. He is also a member of TIDA (the Trucking Industry Defense Association). He received his J.D. from the Washburn University School of Law (cum laude) and his B.S. from Baker University (cum laude). He is admitted to practice law in the state and federal courts of Nebraska, Kansas, and Missouri.

Shay has been with the firm since 2019. Prior to joining Erickson | Sederstrom, he practiced for several years with a nationally recognized firm in Lincoln. Shay focuses his practice on transactional areas, including mergers and acquisitions, business formation, securities offerings, debt and equity financing, and general counsel. Shay also has extensive experience in the transportation industry and is active in the Nebraska logistics community. He received his J.D. and M.B.A. in 2015 from the University of Nebraska and his B.A./B.S. from the University of Arizona. He is admitted to practice law in Nebraska.

Connor has joined the firm representing both individual and commercial clients for litigation and general counsel matters. Connor graduated from Creighton University Magna Cum Laude in 2014 with a Bachelor’s degree in Economics, then went on to obtain his Juris Doctorate from the Creighton University School of Law in 2017. He is a member of both the Nebraska and Iowa State bars, and has extensive litigation experience representing clients in both state and federal courts for matters including commercial contract disputes, insurance defense, personal injury, construction defects, product liability, wrongful death, trucking and transportation, and disputes concerning both commercial and residential real estate. He also has experience providing estate and business planning services, providing advice to help guide families and small, local business owners through both prosperous and difficult times.