Source: http://tdla.net/page-1566601?pg=3
Timestamp: 2019-04-22 02:06:22+00:00

Document:
Phil Mischke, a former board member of the TDLA, was recently approached by Senator Brian Kelsey’s (R-Germantown) staff about the Senator’s desire to meet with defense attorneys to discuss how he might be able to help civil trial attorneys in our state. Senator Kelsey is the chair of the Senate Judiciary Committee. I have attached a link from the TBA today below. Phil, along with myself, Brad Box, and Michael Mansfield are planning to attend a meeting on January 27 on behalf of the TDLA. In this vein, we wanted to reach out to our membership to see if any of you have any particular concerns or thoughts with respect to the Senator’s request. If you do, please submit your thoughts/questions/concerns via email to me at BSA@smrw.com and we will do our best to address these with the Senator. If you would like to discuss via telephone, please feel free to reach out to one of the members listed above.
Click here to find the TN Workers' Compensation Data Statistical Supplement for calendar years 2009-2015.
The Department has admitted that it cannot create an evaluation “based on salary alone.” . . . But this significant increase to the salary level creates essentially a de facto salary-only test. For instance, the Department estimates 4.2 million workers currently ineligible for overtime, and who fall below the minimum salary level, will automatically become eligible under the Final Rule without a change to their duties. . . . Congress did not intend salary to categorically exclude an employee with EAP [executive, administrative, and professional] duties from the exemption [from the Fair Labor Standards Act’s minimum wage and overtime requirements].
The injunction applies nationwide. The Court will still have to hold a full evidentiary hearing before deciding whether the injunction is to become permanent, however. Even if that ultimately happens, the DOL could still appeal any permanent injunction to the Fifth Circuit Court of Appeals and ultimately to the United States Supreme Court. Whether the DOL will try to immediately appeal this temporary injunction is unclear. Also, it is unclear whether the new Trump administration will continue to fight for the implementation of the new salary level test or whether it will be content to leave the 2004 salary level of $455/week in place when it is installed in January 2017.
What is clear is that the new salary level test of $913/week will not go into effect in any state by Dec. 1, 2016, because of this temporary injunction. Whether employers, because of this temporary injunction, decide to delay changes to their employees’ pay based upon the new salary level or attempt to “roll-back” such changes already made will depend upon the business considerations of each employer.
1. Salary Threshold Changed to $913/week ($47,476/Year) – This is the guaranteed pay that an employee must receive in order to be classified as exempt from the federal Fair Labor Standards Act’s minimum wage and overtime requirements. This new threshold more than doubles the current salary threshold level of $455/week. While this level is slightly lower than the threshold in the proposed rule ($970/week), it still encompasses many employees that are currently classified as exempt. Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.
2. Automatic Salary Threshold Increases Every 3 Years (Not Annually) to Maintain Level at 40th Percentile in Lowest-Wage Census Region – The DOL reduced the frequency of the automatic increases in response to concerns raised by employers. Instead of annual increases, the threshold will be adjusted every 3 years to maintain the level at the 40th percentile of full-time salaried workers in the lowest-wage Census region.
3. Job Duties Test is Unchanged –The DOL did not make changes to the standard duties test.
5. Highly Compensated Employee (HCE) Exemption Is Now $134,004/Year – This is an increase from the current threshold of $100,000/year. The final rule retains the methodology in the proposed rule setting the threshold at the 90th percentile of full-time salaried workers nationally.
If you have questions about this development please give us a call.
The 2017 TDLA Sponsorship package is now available! Sponsorship levels run from January 1 to December 31.
To view the TDLA Sponsorship package for 2017, click here.
TDLA would like to congratulate the 2016 TDLA award winners! These awards were given at the TDLA 50th Anniversary Celebration & Annual Meeting on September 16, 2016.
"Defense Lawyer of the Year"
For those of you interested in recent developments regarding the plaintiff Reptile theory you should take a look at the recent California Court of Appeals, Fourth District opinion published in the case entitled Regalado v. Callaghan. A copy of the decision can be seen by clicking here.
While the decision is ultimately adverse to the defense, the important point to be gleaned from the ruling is the fact that there is now finally a published California opinion addressing the “Reptile” theory. See pages 19-21.
Essentially, the Court of Appeal holds that such arguments are improper, but in this case not prejudicial and were waived due to the lack of a timely objection.
While the decision is ultimately against the defense, there is now an opinion holding that the Reptile argument is improper.
1. Reptile arguments are misconduct.
2. Defense counsel has to object as soon as those arguments are made (even better, pave the way with a MIL or pre-argument brief explaining that it is misconduct and that you will object).
Please be sure to pass this along to all of your clients and colleagues. This case was brought to my attention by members of the Amicus Committee of the Association of Southern California Defense Counsel (ASCDC).
The Tennessee Defense Lawyers Association wishes to recognize the talent and achievements of our members by presenting the following two annual awards at the Fall Meeting’s Friday night event: "Defense Lawyer of the Year" and the "Rising Star Award". Nominations are now being accepted. The Deadline for nominations is August 31, 2016. To be eligible for the awards, nominees must be members in good standing of TDLA.
The 2016 TDLA Awards Nomination Form may be found by clicking here.
On June 2, 2016, the Western Section of the Tennessee Court of Appeals issued its opinion in Dedmon v. Steelman, No. W2015-01462-COA-R9-CV (Tenn. Ct. App. June 2, 2016). Judge Brandon O. Gibson delivered the opinion, in which Judge Andy D. Bennett joined, and Judge Joe G. Riley, sitting as a Special Judge on the panel, filed a concurring opinion. The Dedmon case, on interlocutory appeal from the Circuit Court of Crockett County, Tennessee, directly addressed the case of West v. Shelby County Healthcare Corp., 459 S.W.3d 33 (Tenn. 2014), and considered its effect on personal injury litigation in Tennessee.
As a brief summary, the Tennessee Supreme Court’s decision in West considered the appropriate measure of “reasonable medical expenses” in the context of the Hospital Lien Act (“HLA”), codified at Tenn. Code Ann. § 29-22-101(a). Under the HLA, medical providers are entitled to recover, through a lien, for the “reasonable medical expenses” resulting from their treatment of a patient. In West, the Court considered the scope of the “reasonable expenses” that can be recovered by medical providers under this Act. The Supreme Court looked past the often-illusory “unadjusted charges” issued by modern healthcare companies and found that “with regard to an insurance company’s customers, ‘reasonable charges’ are the charges agreed to by the insurance company and the hospital. [The hospital’s] contract with [the insurer] defined what the reasonable charges for the medical services provided to [its patients] would be.” West, 459 S.W.3d at 46. With this in mind, the Court limited the amount a hospital could recover as “reasonable expenses” to the amount paid and accepted in satisfaction of a patient’s bill. The West Court further explained that the concept of “reasonable medical expenses” is “well known to the bench and bar,” applying not only in the hospital lien context, but also in medical malpractice actions, workers’ compensation actions, and personal injury actions.
Based upon this decision and the far-reaching language used by the Supreme Court, many members of the Defense Bar began pursuing efforts to limit recoverable medical expenses in personal injury actions to the amount paid on a Plaintiff’s behalf and accepted in satisfaction of a Plaintiff’s bill. These efforts were fiercely opposed by Plaintiffs hoping to pocket the difference between the unadjusted charges and actual charges as “phantom damages.” The Plaintiffs’ Bar routinely argued this price difference, known as the “negotiated price differential” was a benefit conferred to the Plaintiff through insurance, and therefore was protected by the long-standing collateral source rule. These opposing arguments were met with varying degrees of success in both state and federal trial courts, and conflicting orders appeared across the state.
In Dedmon, expressly relying upon the authority of West, the Defendants filed a motion in limine seeking to prohibit the Plaintiff from introducing evidence of any medical “expenses” exceeding the amounts accepted by the Plaintiff’s healthcare providers in satisfaction of the Plaintiff’s medical bills. Defendants argued that these excess charges were unreasonable as a matter of law following West. Though acknowledging that West construed “reasonable expenses” under the HLA, the trial court judge concluded: “I cannot imagine that [the Tennessee Supreme Court] would use any other logic in this situation than they used in that situation.” Dedmon v. Steelman, No. W2015-01462-COA-R9-CV at 3 (Tenn. Ct. App. June 2, 2016). Accordingly, the Defendants’ motion in limine was granted, and an interlocutory appeal followed. Although the Court of Appeals ultimately reversed the trial court’s order, it is important to recognize that the Dedmon opinion is not necessarily “bad” for Defendants. Rather, the Court charted a middle ground between the two sides, ultimately adopting a “hybrid approach” that will allow Plaintiffs to present evidence of the full, “unadjusted” charges issued by healthcare providers, but will also allow Defendants to present evidence of the lower, “adjusted” charges that were actually paid in order to refute the excess charges claimed by Plaintiffs.
In considering the issue, the Court of Appeals acknowledged that the concept of “reasonable medical expenses” has come under increased scrutiny in recent years “due to the increased involvement of government payors, the complexity of health care reimbursement provisions, financial pressures on hospitals, and the significance of medical expense recovery in personal injury litigation.” Dedmon at 6. The Court further noted that the unadjusted charges issued by healthcare providers are “vastly different” than the amounts actually paid on behalf of patients. Id. at 7 n.5. However, the Court concluded that under existing authority, “damages in personal injury cases are not measured by ‘fixed rules of law’ but rest largely in the discretion of the trier of fact.” Id. at 13 (quoting Roberts v. Davis, 2001 WL 921903, at *4 (Tenn. Ct. App. Aug. 7, 2001)). The Court found that Plaintiffs are entitled to present expert testimony regarding the reasonableness of their claimed damages. Id. (citing Borner v. Autry, 284 S.W.3d 216, 218 (Tenn. 2009)). However, the Court further found that “existing law in this state also makes clear that Defendants are permitted to offer proof contradicting the reasonableness of the medical expenses.” Id. at 16. Although Defendants were cautioned not to run afoul of the collateral source rule by indicating how a bill was actually paid, “allowing evidence that a medical bill was satisfied for a lower amount does not necessarily require evidence that the payment was made by a collateral source such as insurance.” Id. at 7 n.6. As the Court explained, the collateral source rule “does not address, much less bar, the admission of evidence indicating that something less than the charged amount has satisfied, or will satisfy, the amount billed.” Id. at 17 (quoting Martinez v. Milburn Enters., Inc., 233 P.3d 205, 222–23 (Kan. 2010)). In so holding, the Court specifically addressed and refuted the argument that the “negotiated price differential” is somehow protected by the collateral source rule. Thus, under Dedmon, Plaintiffs will no longer be able to use the collateral source rule as sword and shield when telling juries how much their medical expenses are. Juries will still determine the reasonable expenses, but only after hearing both sides of the story.
It should also be noted that the Court of Appeals specifically asked the Supreme Court to review this case to weigh in on whether the logic of West should apply in the context of personal injury actions. In his concurring opinion, Judge Riley agreed with the majority opinion based upon existing law; however, he further explained that “[w]ere it not for existing case law which we are bound to follow as an intermediate appellate court, I would apply the West rationale to personal injury litigation.” Judge Riley further opined that “modern day medical providers’ non-discounted charges generally dictate that that non-discounted charges are no longer reasonable medical expenses,” and “if the non-discounted charge is used as the reasonable medical expense, I believe the amount of the windfall to plaintiffs is no longer rationally based and is out of kilter as compared to the past.” Thus, Judge Riley concluded: “I see no reason to continue to provide the jury or other fact-finder with misleading data.” With both the majority and concurring opinion calling upon the Tennessee Supreme Court to consider this issue, it is likely that this matter will soon come under review once again. In the meantime, however, the authority of Dedmon provides clear opportunity for Defendants to introduce the actual cost of medical expenses to challenge the often exorbitant “unadjusted” rates issued by healthcare providers. This system leaves the ultimate decision to the jury, but it should limit the “phantom damages” recovered by Plaintiffs.
For more information and pdf of TDLA's Amicus Brief, please click here.
*Attorneys Bradford D. Box and Adam P. Nelson with Rainey, Kizer, Reviere & Bell’s Tort and Insurance Defense section submitted an Amicus Brief on behalf of the TDLA in support of the Defendant’s position.
TDLA Membership Renewals will begin in June. Members will receive an emailed invoice. Regular Members are $200/ year and Young Lawyer Members are $100/ year (for the first three years of their young lawyer membership). TDLA Membership runs from July 1 to June 30.
Those who have enjoyed a one year free Membership because of their DRI membership, will have the chance to become a paid Regular or Young Lawyer TDLA member.
You may renew your membership through PayPal (please note a processing fee does apply), or by check. To use PayPal, please go to our website renewal page here.
The TDLA community lost a beloved member of our organization recently. Brian Trammell, of Trammell, Adkins & Ward, PC in Knoxville, TN was a TDLA President (1997-98) and former DRI State representative. The TDLA community mourns his loss, and our thoughts are with the Trammell family, friends and law partners during this time.
Brian Trammell was 58 years old and passed away Sunday March 27. Funeral Arrangements will be by Rose Mortuary Mann Heritage Chapel. Full obituary may be read by clicking here.

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