Ohio Federal Court Upholds ICDR Arbitration Award in Favor of Chinese Party

Recently, the U.S. District Court for the Southern District of Ohio denied an Ohio company’s motion to vacate or modify a USD 1.3 million arbitration award from the International Centre for Dispute Resolution (“ICDR”) and confirmed the award in favor of the Chinese company claimant. The case illustrates the benefits of international arbitration and serves as a reminder of the limited grounds on which an award can be vacated under the U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) and the Federal Arbitration Act (the “FAA”), which adopts and implements the New York Convention under Chapter 2.

Petitioner, G&K Services LUG, LLC (“LUG”), a Minnesota company, sought to vacate or modify the ICDR award in favor of Talent Creation, Ltd. (“Talent”), a Chinese corporation. LUG alleged the arbitrator exceeded her authority under the FAA and New York Convention and “manifestly disregarded [Ohio] law in issuing the Award[,] by ruling on a claim that Talent “did not assert in its Demand for Arbitration, and in fact never asserted until after the evidentiary hearing[,]” and by refusing to enforce Ohio’s 4-year statute of limitations and “Ohio law on laches.”

Alternatively, LUG requested that the court modify the award “to remove $400,000 in liquidated damages awarded” on the claim it alleged was not asserted until post-hearing. The 15-page Final Award from the ICDR arbitration and the underlying International Supply Agreement, which contained the arbitration provision, were attached to the Petition as exhibits.

The motion to confirm the ICDR award was succinct and the memorandum offered no legal argument whatsoever, as the issues were reserved for briefing.

In the Order, the court found it had jurisdiction over the matter pursuant to 9 U.S.C. § 203 and 28 U.S.C. § 1332. The court noted the New York Convention governed the matter because the arbitration award involved a party domiciled or having its principal business outside of the United States. The court observed that the New York Convention provides seven (7) grounds for vacatur or modification of an international arbitration award and that the court also has authority to vacate or modify the award on any of the grounds set forth in the FAA, including where “arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award…was not made.” Recognizing the strong public policy favoring arbitration and enforcing awards, the court noted the narrow standard when reviewing awards.

The court rejected LUG’s argument that the arbitrator exceeded her powers by including an amount for liquidated damages in the award. LUG argued Talent’s Notice of Arbitration did not include a claim for liquidated damages based on a provision in the International Supply Agreement. LUG further asserted that because the claim was raised only in Talent’s post-hearing brief, “without obtaining LUG’s consent to arbitrate the issue and without amending or supplementing its initial arbitration notice[,]” Talent violated the ICDR rules.

LUG seems to have applied a civil procedure analysis in challenging the ICDR proceedings by arguing that without Talent obtaining leave or LUG’s consent to amend the Notice (as would be required if the case were being litigated in federal court), the arbitrator could not render an award on the liquidated damages claim. The court rejected that contention, holding the arbitration provision called for the parties to arbitrate any dispute under the International Supply Agreement. The court found the arbitrator did not exceed her powers because the dispute “fell squarely within the Agreement’s subject matter,” and it also deferred to the arbitrator on this procedural matter because the court “is not governed by, or even necessarily familiar with, ICDR rules.”

The court also rejected LUG’s arguments that the arbitrator exceeded her powers by rejecting its laches defense and that she manifestly disregarded the applicable Ohio statute of limitations. The court addressed these issues in-depth. It held the arbitrator’s rejection of the laches defense was not unreasonable, arbitrary, or unconscionable. Similarly, it found, in part, that in light of the “strong pro-enforcement biases of the Convention and FAA,” LUG failed to meet its burden that the arbitrator manifestly disregarded Ohio law in rejecting the status of limitations defense. Eight (8) days after the court confirmed the award, a Satisfaction of Judgment was filed, concluding the matter.

Generally, the benefits of arbitrating international commercial disputes are well-recognized. This case shows the importance of thoughtfully drafting the arbitration provision in an international commercial agreement. For instance, parties can agree that the arbitrator must be admitted to practice law in the jurisdiction of the law that will govern the arbitration or that the arbitrator(s) can only decide claims raised in the arbitration demand, which may avoid issues such as those raised by LUG. Parties to international commercial agreements may want to consider giving more attention to arbitration provisions in light of this decision.

For questions on and assistance with international commercial agreements and disputes, please contact Jon P. Yormick at jon@yormicklaw.com or 216.928.3474.

Former NFL Player’s Motion to Remand Complaint is Sacked

Recently, the U.S. District Court for the Southern District of Ohio denied a motion to remand to state court an action seeking to compel arbitration against Certain Interested Underwriters at Lloyd’s of London and other defendants.  The plaintiff, a former National Football League player and star defensive player at The Ohio State University, suffered a career-ending injury in 2001 after just 2 years as a member of the New England Patriots professional football team.  He allegedly purchased a disability insurance policy from the defendants, but his claim for disability was allegedly denied by the defendants without proceeding to mandatory arbitration called for in the policy.  The plaintiff then filed a complaint for specific performance, breach of contract, and insurance bad faith in state court in Columbus, Ohio.

Two of the defendants removed the case to federal court and indicated that the third defendant consented to removal, but the third defendant did not sign the Notice of Removal.  The plaintiff moved to remand the case to state court, arguing that the federal court lacked subject matter jurisdiction because removal was not timely consented to by all defendants, as required by the removal statute, 28 U.S.C. § 1446.

The Notice of Removal, however, invoked federal question jurisdiction under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”), 9 U.S.C. § 201 et seq. and the Federal Arbitration Act, 9 U.S.C. § 1 et seq.  The Court explained that it has federal question jurisdiction if the Notice of Removal relied on the Convention as grounds for removal.  The Court cited 9 U.S.C. § 203, which states an “action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States.”

The Court further noted that the Convention applies to written arbitration agreements arising out of a commercial relationship where at least one of the parties is not a U.S. citizen or the commercial relationship has a reasonable relation with at least one foreign state.  Despite the Lloyd’s Underwriters not being disclosed parties, the Court found sufficient evidence that the defendant that signed the insurance agreement had acted as an agent for the Lloyd’s Underwriters.  The defendant signed the agreement as a “Lloyd’s Correspondent.”  Accordingly, the requirements of the Convention were met, meaning the action was deemed to arise under U.S. laws and treaties and the Court had subject matter jurisdiction over the action.

Significantly, the Court went on to hold that the removal statute’s rule of timely unanimity was not applicable.  That rule requires all defendants to join in a Notice of Removal within 30 days of when the case became removable to federal court.  The Court explained that the failure of the third defendant to consent to removal in a timely manner would generally render removal improper.  Here, however, the Convention provides that where the subject matter of a state court action relates to an arbitration agreement falling under the Convention, “the defendant or the defendants may, at any time before the trial thereof, remove such action.”  9 U.S.C. § 205.  Since all defendants joined in removal before trial of the state court action, the Court held the case was timely removed to federal court.

The Magistrate Judge issued a Report and Recommendation to deny the plaintiff’s motion to remand.  Neither side filed objections and the District Court Judge adopted the Report and Recommendation.  See Katzenmoyer v. TR’BL Marketing, Ltd., Civil Action 2:12-cv-660 (S.D.Ohio 2012).

For questions about and assistance with international litigation and dispute resolution matters, please contact Jon P. Yormick, Attorney and Counsellor at Law, jon@yormicklaw.com.

Insurer Owed Defense of Trade Dress Case, But Not ITC Case

A recent decision from the State of Washington found that an insurer had a duty to defend a patent and trade dress infringement case brought against its insured, but did not owe a duty to defend a related action filed in the International Trade Commission.

Australia Unlimited (AU), a Washington corporation, and producer, importer, and distributor of NothinZ brand shoes sued Hartford Casualty Insurance after the company declined AU’s tender of defense of certain actions filed against AU by Crocs.   In 2006, Crocs filed a federal court lawsuit against AU and other defendants and a proceeding before the U.S. International Trade Commission (ITC).  Both cases involved claims for patent and trade dress infringement, violation of the Colorado Consumer Protection Act, and common law unfair competition.  AU tendered defense of the cases to Hartford which issued commercial general liability (CGL) and umbrella policies. Hartford denied the tender of both matters.  In its action against Hartford, AU asserted claims for breach of contract, bad faith, and violation of Washington’s state Consumer Protection Act for Hartford’s refusal to defend AU.  The claims brought by Crocs were ultimately settled by AU.

The court of appeals first noted the distinction between an insurer’s duty to defend (based on potential liability) and the duty to indemnify, which requires actual liability and actual coverage under the policy.  The CGL policy contained an exclusion applicable to Crocs’s claims, but the umbrella policy did not.  Under that policy’s definition of “Personal and advertising injury” the court found the trade dress allegations, which included references to AU’s marketing and sales efforts, and the prayer for damages from the “manufacture, marketing, sale, offering for sale, and/or distribution of products or services” triggered Hartford’s duty to defend the federal court lawsuit seeking damages.

The court summarily determined that Hartford, however, was not required to defend the ITC case, an action regarding unfair practices in import trade. In that trade remedy action, Crocs requested the ITC to investigate and determine its patent and trade dress infringement claims.  As a remedy, it sought a cease and desist order and a permanent exclusionary order that would preclude AU and the other respondents from importing and entering infringing products into the U.S.  The court noted that Hartford’s umbrella policy only required it to defend claims seeking damages.  The court reasoned that since the ITC does not have authority to order monetary damages, Hartford properly declined the defense of the ITC action.

As intellectual property cases continue unabated despite the current economic conditions, companies facing infringement allegations should look to promptly tender the defense of those claims and lawsuits and aggressively pursue coverage if necessary.  The difference in not doing so can be measured in tens and hundreds of thousands, if not millions, of dollars in avoided defense, settlement, and verdict costs.

Disclaimer: This Litigation Law Alert is provided for informational purposes only and is not intended to serve as or provide legal advice relating to a particular matter. If you would like to discuss a litigation, arbitration or dispute matter please contact Jon P. Yormick, Managing Attorney, jon@yormicklaw.com, Jason B. Desiderio, Associate, jdesiderio@yormicklaw.com, or Nicholas A. Panagopoulos, II, Associate, npanagopoulos@yormicklaw.com, or call toll free (U.S. and Canada) at +1.866.967.6425.

Termination of Canadian Employee in U.S. Gives Rise to Lawsuit in Ontario

Recently the Court of Appeal for Ontario considered whether a wrongful dismissal action against his former employer should be tried in the state of Indiana instead of in Ontario.

In this case, the worker (a Canadian citizen) began his career in Canada. When his services were not needed in Canada, the company moved him to temporary jobs in the U.S. and agreed to find a permanent job for him in Canada when conditions there changed.

After 21 months in the U.S., he accepted a permanent job with the company managing one of its U.S. facilities. He was dismissed while working at a U.S. location. The plaintiff started his action in Ontario and the defendant moved for a stay of the action on the ground that Indiana, not Ontario, was the convenient forum to hear the action. The trial court granted the stay.

The Court of Appeal for Ontario reversed. According to the court, when deciding these motions, judges consider a list of factors including: the location where the contract in dispute was signed; the applicable law of the contract; the location of witnesses, especially key witnesses; the location where the bulk of the evidence will come from; the jurisdiction in which the factual matters arose; the residence or place of business of the parties; and the loss of a legitimate juridical advantage. When weighing these factors, the plaintiff’s choice of jurisdiction is given great deference, and “the existence of a more appropriate forum must be clearly established to displace the forum selected by the plaintiff.”

Here, the Court found that plaintiff’s connections to Ontario are strong: plaintiff resides there; two of the defendants reside there; some important witnesses reside there; the 2004 employment agreement was made there; and Ontario law applies to the agreement. Since plaintiff’s connections to Ontario were strong, the Court determined that he may legitimately claim the juridical advantages available in Ontario, including the right to reasonable notice of termination or pay in lieu.

Given this decision, U.S. companies doing business in Canada should ensure that they are familiar with Canadian employment laws. Further, U.S. companies should be prepared to produce information related to the above factors to demonstrate that their cases are more appropriately heard in the U.S.

Disclaimer: This Litigation and Dispute Resolution Law Alert is provided for informational purposes only and is not intended to serve as or provide legal advice relating to a particular matter. If you would like to discuss a litigation, arbitration or dispute matter please contact Jon P. Yormick, Managing Attorney, jon@yormicklaw.com, Jason B. Desiderio, Associate,jdesiderio@yormicklaw.com, or Nicholas A. Panagopoulos, II, Associate, npanagopoulos@yormicklaw.com, or call toll free(U.S. and Canada) at +1.866.967.6425.

 

U.S. Court Clarifies Design Patent Infringement

The United States Court of Appeals for the Federal Circuit has unanimously clarified the way in which it determines design patent infringement.

Design patents are used to protect new and nonobvious ornamental characteristics of a functional item. They do not protect the structure or function of the item.

In this case, the two parties produced nail buffers. The plaintiff’s nail buffer had padding on three sides, and defendant’s had padding on all four sides. The district court and Federal Circuit agreed that the four-sided nail buffer did not infringe on the patent that covered three-sided nail buffers.

Then, the court granted a motion to hear the case en banc to determine what test lower courts should use when a party claims its design patent has been infringed. Previously, when determining whether a design patent was infringed, the court would consider whether an ordinary observer would confuse the two products (the “ordinary observer test”) and whether the alleged infringing design incorporated novel aspects of the patented design (the “point of novelty test”).

In this case, the court determined that “the ‘point of novelty’ test should no longer be used in the analysis of a claim of design patent infringement.” “Instead, . . . we hold that the ‘ordinary observer’ test should be the sole test for determining whether a design patent has been infringed.” Therefore, an accused article infringes a design patent if it “embod[ies] the patented design or any colorable imitation thereof.”
This decision makes a district court’s job easier as the “point of novelty” test was overly cumbersome in cases where there are several prior patents at issue. Further, the new test clarifies an important area of patent law and considerably strengthens design patents.

Disclaimer: This Litigation and Dispute Resolution Law Alert is provided for informational purposes only and is not intended to serve as or provide legal advice relating to a particular matter. If you would like to discuss a litigation, arbitration or dispute matter please contact Jon P. Yormick, Managing Attorney, jon@yormicklaw.com, Jason B. Desiderio, Associate,jdesiderio@yormicklaw.com, or Nicholas A. Panagopoulos, II, Associate, npanagopoulos@yormicklaw.com, or call toll free(U.S. and Canada) at +1.866.967.6425.

Ontario Court Upholds Jurisdiction Over Texas Defendant

The Court of Appeal for Ontario has ruled that provincial courts have personal jurisdiction over non-resident defendants, including one from Texas, in a case alleging breach of fiduciary duties.

The plaintiff alleges that it hired an Ontario individual and his company to procure financing to develop mining projects in Peru. The plaintiff claims that the Ontario defendants then solicited the assistance of a Texas resident to secure the needed financing from United Kingdom sources. The plaintiff alleges these parties were to work together to procure the financing and they would receive shares in the plaintiff’s Ontario corporation as compensation for their efforts. The plaintiff contends the parties breached their alleged fiduciary duties and a duty of confidentiality owed to the plaintiff by improperly taking the mining opportunities in Peru for themselves to the exclusion of the plaintiff. The plaintiff seeks a declaration that the mining opportunity is held in trust for its benefit or, alternatively, damages of CAD 200 million.

The Court of Appeal rejected the defendants’ assertion that because the agreements upon which the claims are based expressly provide for exclusive jurisdiction in English courts, the Ontario court could not exercise personal jurisdiction over them. The Court of Appeal agreed with the motion judge’s view that the claims against the Texas defendant centered on the fiduciary relationship, not on alleged breaches of the contracts. The suit was about “an alleged abusive course of conduct by fiduciaries.”

Although the Court of Appeal disagreed with the motion judge’s 2-step analysis of personal jurisdiction, it found his conclusion to be correct. The Court applied the “real and substantial connection” test. It found that the Texas defendant received confidential information in Ontario from the Ontario-based plaintiff; that he agreed to work with the Ontario defendant on behalf of an Ontario corporation; and that he knew his co-defendant was the Ontario corporation’s agent and was in a fiduciary relationship with the company. Therefore, the Court found the Texas defendant “could well have foreseen an action in Ontario.”

The Court also rejected the forum non conveniens argument, finding that the defendants did not show that some other jurisdiction, namely England, was a more appropriate forum for the litigation.

This decision on procedural grounds should help to guide American and other foreign defendants on their business dealings in Ontario, other Canadian provinces and shows the potential to become a defendant in litigation in Canadian courts.

Disclaimer: This Litigation and Dispute Resolution Law Alert is provided for informational purposes only and is not intended to serve as or provide legal advice relating to a particular matter. If you would like to discuss a litigation, arbitration or dispute matter please contact Jon P. Yormick, Managing Attorney, jon@yormicklaw.com, Jason B. Desiderio, Associate,jdesiderio@yormicklaw.com, or Ruby K. Singh , Associate, rsingh@yormicklaw.com, or call toll free (U.S. and Canada) at +1.866.967.6425.

 

Court Clarifies Use of Declaratory Judgment in IP Cases

The U.S. Court of Appeals for the Federal Circuit recently clarified how it will determine when a party has shown there is a sufficient dispute between the litigants to justify a declaratory judgment action in intellectual property rights (IPR) litigation.

In MedImmune, Inc. v. Genentech, Inc., the U.S. Supreme Court set forth the standard for determining a “dispute” justifies proceeding with a declaratory judgment action.  The recent decision further explained the standard the lower courts will follow, providing companies and counsel with additional guidance.

In the case, the plaintiff had developed a cleansing product and sought a declaration that its product did not infringe on four patents owned by the defendant covering a similar cleaning products.  The district court had dismissed plaintiff’s complaint for declaratory judgment finding it did not set forth an actual case or controversy.  On appeal, plaintiff argued that an actual controversy existed because the defendant listed the patents on its product (as required by law), previously sued plaintiff to enforce a different patent, might someday try to enforce its rights under the patents at issue, and refused to sign a covenant not to sue under the patents.

The Federal Circuit echoed the Supreme Court and stated that when determining whether an actual case or controversy is presented in a complaint, it takes all facts into account to determine if “there is a substantial controversy, between the parties having adverse legal interest, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”  The Court, however, made clear that “some affirmative actions by the defendant will also generally be necessary.”  Since, in this case, the defendant never took any affirmative actions to cause plaintiff to believe defendant would enforce its rights, the Federal Circuit found that the trial court properly dismissed the case.

While a declaratory judgment action can be an important tool in a company’s intellectual property strategy, it is necessary to understand when it is a viable option to pursue and how to effectively defend such actions.

Disclaimer: This Litigation and Dispute Resolution Law Alert is provided for informational purposes only and is not intended to serve as or provide legal advice relating to a particular matter. If you would like to discuss a litigation, arbitration or dispute matter please contact Jon P. Yormick, Managing Attorney, jon@yormicklaw.com, Jason B. Desiderio, Associate,jdesiderio@yormicklaw.com, or Nicholas A. Panagopoulos, II, Associate, npanagopoulos@yormicklaw.com, or call toll free(U.S. and Canada) at +1.866.967.6425.

 

California Supreme Court Holds Non-Competition Agreements Void

The Supreme Court of California affirmed the State’s prohibition of noncompetition clauses in a decision issued August 7, 2008.

The plaintiff in the case was an accountant at Arthur Andersen who had signed a noncompetition agreement upon the start of his employment.  As Arthur Andersen unraveled in 2002, Edwards attempted to join HSBC.  A dispute over the terms of Edwards’s departure for HSBC led to litigation over the validity of his non-compete clause.

The common law, as developed in cases across the country, recognizes the validity of reasonable contractual non-compete clauses.  Under the relevant California statute, however, “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”  The statute expressly permits noncompetition agreements in the context of sale or dissolution of corporations, partnerships, and limited liability corporations.

Arthur Andersen argued that California also used a reasonableness standard when evaluating non-compete clauses.  The lower court agreed with Arthur Andersen.  The Supreme Court, however, reversed and found that Andersen’s noncompetition agreement was invalid because it restrained Edwards’s ability to practice his profession.  The cases Arthur Andersen relied on were either federal court cases or those addressing one of the explicit exemptions to the statue.  The Supreme Court pointed out that “no reported California state court decision has endorsed the [federal court’s] reasoning, and we are of the view that California courts ‘have been clear in their expression that [the statute] represents a strong public policy of the state which should not be diluted by judicial fiat.’”  The court went on to say, “We . . . leave it to the Legislature, if it chooses, either to relax the statutory restrictions or adopt additional exceptions to the prohibition-against-restraint rule under [the statute].”

Under this ruling, non-compete agreements are essentially void in California unless they fall in one of the narrow categories expressly provided for in the statute.   Therefore, parties should pay special attention to employment agreements in California and understand the significant limitations for non-compete clauses in that state.

Disclaimer: This Litigation and Dispute Resolution Law Alert is provided for informational purposes only and is not intended to serve as or provide legal advice relating to a particular matter. If you would like to discuss a litigation, arbitration or dispute matter please contact Jon P. Yormick, Managing Attorney, jon@yormicklaw.com, Jason B. Desiderio, Associate,jdesiderio@yormicklaw.com, or Nicholas A. Panagopoulos, II, Associate, npanagopoulos@yormicklaw.com, or call toll free 
(U.S. and Canada) at +1.866.967.6425.

 

Court of Appeals Confirms Korean Arbitration Award; Rejects Counterclaims

The U.S. Court of Appeals for the Ninth Circuit has upheld a Korean arbitration ruling.  In the case, the plaintiff sued to enforce an arbitration award from the Korea Commercial Arbitration Board (“KCAB”).  The contract between the parties called for arbitration in Seoul, Korea, before the KCAB, applying the laws of the Republic of Korea, and stated that an award by the KCAB would be final and binding upon both parties.  The trial court granted summary judgment for the plaintiff to confirm the award and the defendant appealed.

On appeal, the Ninth Circuit explained that courts shall confirm foreign arbitration awards unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”).  The New York Convention identifies seven defenses to enforcement, which are: (1) the arbitration agreement is invalid under applicable law; (2) the losing party was unable to present its case; (3) the decision is outside the scope of the arbitration agreement; (4) the proceedings did not comply with the arbitration agreement or laws of the country in which the proceeding took place; (5) the award is not yet binding or has been set aside; (6) the dispute is not subject to arbitration under the laws of the country in which the arbitration occurred; (7) enforcement violates public policy.

The defendant raised several arguments against the arbitration award.  All of the arguments, and its affirmative defensives, however, dealt with the merits of the case and not one of the seven defenses in the New York Convention.  Importantly, the court found the defendant’s counterclaims were barred by res judicata because they should have been presented in the Korean arbitration proceedings.  Therefore, the court affirmed judgment in favor of the plaintiff.

Given this decision, companies should ensure that they understand the arbitration clauses in their international business contracts, understand the rules of the arbitration body, realize they are binding regardless of where the arbitration occurs, and present any available counterclaims in the arbitration proceedings.

Disclaimer: This Litigation and Dispute Resolution Law Alert is provided for informational purposes only and is not intended to serve as or provide legal advice relating to a particular matter. If you would like to discuss a litigation, arbitration or dispute matter please contact Jon P. Yormick, Managing Attorney, jon@yormicklaw.com, Jason B. Desiderio, Associate,jdesiderio@yormicklaw.com, or Nicholas A. Panagopoulos, II, Associate, npanagopoulos@yormicklaw.com, or call toll free 
(U.S. and Canada) at +1.866.967.6425.

 

Product Liability Damages Cap Upheld in Ohio

The Ohio Supreme Court has upheld the constitutionality of noneconomic and punitive damages limits that may be awarded to personal injury plaintiffs

The Court answered certified questions from the U.S. District Court for the Northern District of Ohio in a product liability lawsuit against a pharmaceutical company. The plaintiff sought damages for medical problems alleged to have been caused the defendant’s birth control patch. The federal court lawsuit challenged the constitutionality of the damages caps on grounds that the tort reform measures deny plaintiffs to a trial by jury, to a remedy for injuries, due process of law, and equal protection of law. The federal court certified these state law questions to the Ohio Supreme Court. Each challenge was rejected.

In upholding the noneconomic damages cap, the Court noted that the statute does not apply to certain tort actions such as those in the Court of Claims, against political subdivisions, or actions for wrongful death, medical or dental malpractice, or breach of contract. In addition, the law exempts from the caps plaintiffs who suffer “[p]ermanent and substantial physical deformity, loss of use of a limb, or loss of a bodily organ system,” or “[p]ermanent physical functional injury that permanently prevents the injured person from being able to independently care for self and perform life-sustaining activities.” The Court also reasoned that since other state laws authorize an increase in actual damages awarded by a jury, such as violations of the Consumer Sales Practices Act or the corrupt activities statute, a statute requiring a decrease “cannot logically violate” the right to a trial by jury.

The Ohio tort reform statute caps noneconomic damages at the greater of $250,000 or three times the amount of “economic damages” awarded, up to an absolute maximum of $350,000. Punitive damages are limited to two times the amount of compensatory damages awarded to the plaintiff.

Disclaimer: This Litigation and Dispute Resolution Law Alert is provided for informational purposes only and is not intended to serve as or provide legal advice relating to a particular matter. Should you have specific questions regarding an international business or legal matter, please contact Jon P. Yormick, Managing Attorney or Nicholas A. Panagopoulos, III, Associate, Yormick & Associates, Co., L.P.A., t: +1.216.928.3474, f: +1.216.566.0857, e-mail: jon@yormicklaw.com ornpanagopoulos@yormicklaw.com

 

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