Case Summary for November 8, 2016

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Case Summary for November 8, 2016

THE FOLLOWING DOCKET SUMMARIES ARE PREPARED BY THE COURT'S STAFF FOR THE INTEREST AND CONVENIENCE OF THE READER. THE SUMMARIES MAY NOT INCLUDE ALL ISSUES PENDING BEFORE THE COURT AND DO NOT REFLECT ANY OPINION OF THE COURT ON THE MERITS OF A CASE. COPIES OF ALL BRIEFS FILED WITH THE COURT ARE AVAILABLE AT THE SUPREME COURT BUILDING, COURT EN BANC DIVISION. SUMMARIES ARE UNOFFICIAL AND SHOULD NOT BE QUOTED OR CITED.

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The attachments below may not reflect all briefs filed with the Court, the complete filing or the format of the original filing. Appendices and other attachments generally will not be posted here. To see what documents have been filed in a particular case, visit Case.net.

DOCKET SUMMARIES
SUPREME COURT OF MISSOURI

9:30 a.m. Tuesday, November 8, 2016
____________________________________________________________________________________________________

SC95422
State of Missouri ex rel. Jeremiah W. (Jay) Nixon v. American Tobacco Co., et al., Commonwealth Brands Inc., et al.
St. Louis city

Dispute over how to allocate adjustment to cigarette manufacturers’ annual payments to Missouri following multistate arbitration
Listen to the oral argument:

SC95422.mp3
The state was represented during arguments by Peggy A. Whipple of the attorney general’s office in Jefferson City; the participating manufacturers were represented by Elli Leibenstein of Greenberg Traurig LLP in Chicago.

Background

In 1998, Missouri and 51 other states and territories entered into a master settlement agreement with numerous participating cigarette manufacturers to settle lawsuits seeking to recover healthcare costs. Under the agreement, the participating manufacturers make an annual payment that is apportioned among the participating states and administered by an independent auditor. The annual payments are subject to adjustments, including one that addresses the concern that nonparticipating manufacturers would gain a marketplace advantage by not being subject to the agreement’s constraints. A state can avoid paying its share of the adjustment if, in that year, the state diligently enforced statutes requiring nonparticipating manufacturers selling products to escrow funds to pay future judgments. If it was diligent, its share of the adjustment is allocated among the non-diligent states.

A dispute arose over the various states’ responsibility for the 2003 adjustment, which was nearly $1.15 billion. The auditor recommended binding arbitration under the agreement to determine what states had been diligent. In 2007, a state circuit court ordered Missouri and the participating manufacturers to arbitrate their 2003 adjustment dispute. They did so as part of a nationwide arbitration process. Following lengthy discovery, briefing and hearings, a panel of arbitrators made various findings. One was that the agreement requires a state to prove its diligence. Second, the panel determined that, under the agreement, the auditor cannot allocate any part of the adjustment to any state unless and until that state is found non-diligent. Third, the panel determined that, under the agreement, if a state’s diligence no longer is contested, it could be deemed diligent and its share of the adjustment could be reallocated to non-diligent states.

Before the arbitration concluded, the participating manufacturers and 22 signatory states agreed to a multiyear adjustment settlement. Missouri did not. The arbitration panel then determined that, although the master agreement did not dictate expressly what to do when states enter into settlements before their diligence has been determined, it does indicate an appropriate allocation method in such circumstances. The panel also interpreted the master agreement to provide that the 2003 adjustment was subject to a pro rata reduction among the non-signatory states that were found not to be diligent. Ultimately, the arbitration panel held that Missouri and five other states were not diligent and allocated the remaining adjustment among them.

Missouri sought to vacate the arbitration award. In response, the circuit court modified the arbitration award, requiring all contested signatory states to be treated as non-diligent for purposes of reallocating the 2003 adjustment among the non-signatory states. In so holding, the circuit court determined the pro rata allocation was clearly erroneous under the master agreement. The participating manufacturers appeal this ruling. Missouri also sought to compel state-specific arbitration rather than a multistate arbitration. The circuit court overruled this motion. The state appeals this ruling.

Issues

The various participating manufacturers’ appeals present several questions for this Court. One is whether the circuit court exceeded the permissible scope of its judicial review in modifying the arbitration award or otherwise reviewing the arbitrators’ interpretation of the master agreement. A related issue is whether the master agreement permits a pro rata reduction of the adjustment after only some states subject to the agreement reach a settlement. Another question is whether the circuit court misinterpreted the master settlement agreement or otherwise was incorrect in determining that the pro rata ruling was clearly erroneous. An additional question involves whether the circuit court should have compelled single-state arbitration or whether every dispute a state has with the participating manufacturers must be consolidated into a nationwide arbitration of similar disputes between the participating manufacturers and other states.

The state’s appeal presents further questions for this Court. One involves whether the circuit court’s conclusion that the master agreement requires nationwide arbitration properly applies the law and is supported by the evidence. Another is whether Missouri’s dispute with the participating manufacturers over the 2004 adjustment also must be arbitrated with the disputes of other non-signatory states in light of the multiyear settlement the signatory states reached with the participating manufacturers.

SC95422_RJ_Reynolds_and_Phillip_Morris_first_brief.pdf

SC95422_Certain_subsequent_participating_tobacco_companies_first_brief.pdf

SC95422_State_first_brief.pdf

SC95422_RJ_Reynolds_and_Phillip_Morris_second_brief.pdf

SC95422_Certain_subsequent_participating_tobacco_companies_second_brief.pdf

SC95422_State_second_brief.pdf

SC95422_RJ_Reynolds_and_Phillip_Morris_third_brief.pdf

SC95422_Certain_subsequent_participating_tobacco_companies_third_brief.pdf

SC95422_State_third_brief.pdf

SC95422_RJ_Reynolds_and_Phillip_Morris_fourth_brief.pdf

SC95658
Bishop & Associates LLC v. Ameren Corporation, Union Electric Company d/b/a Ameren Missouri, Ameren Services Company, James Armistead, Michael Wright and Richard George
St. Louis city
Challenge to judgment against independent contractor that sued following termination of a contract, sought punitive damages and claimed whistleblower status
Listen to the oral argument:

SC95658.mp3
Bishop & Associates was represented during arguments by Kenneth M. Chackes of Chackes, Carlson & Gorovsky LLP in St. Louis; Ameren was represented by Robert T. Haar of Haar & Woods LLP in St. Louis.

In 2002, Bishop & Associates LLC entered into a contract with Ameren Corporation, Union Electric Company d/b/a Ameren Missouri and Ameren Services Company (collectively, Ameren) to provide plumbing services and maintenance at various Ameren facilities. Beginning in 2005, Bishop worked nearly exclusively for Ameren, following a “flex-time” arrangement under which Bishop performed routine and recurring maintenance at Ameren facilities on a flexible schedule and at Bishop’s discretion as to timing. In exchange for being allowed to perform recurring work on its own schedule and to fill gaps in slower periods, Bishop offered Ameren reduced labor and equipment costs. In January 2010, Bishop offered to provide Ameren with exclusive and extensive plumbing and preventive maintenance services. In its presentation of the proposal, Bishop questioned certain work performed by Ameren employees and cited past instances in which it alleged it had helped Ameren correct illegal or unsafe conditions. Ameren rejected Bishop’s proposal. Bishop alleges Ameren then began to reduce the volume and scope of work it authorized Bishop to perform. Bishop gave letters and reports to Ameren managers about various environmental and other issues Bishop believed it had observed at Ameren facilities. In July 2010, after Bishop arrived to perform unscheduled maintenance at one of Ameren’s facilities, Ameren terminated Bishop’s contract. Ameren alleges Bishop subsequently filed complaints with regulatory agencies and the agencies investigated those complaints, but no agency cited Ameren for any violations based on Bishop’s reports.

In August 2012, Bishop sued Ameren and three of its building maintenance managers. Bishop alleged wrongful termination and breach of contract against Ameren and tortious interference with a business relationship and defamation against the managers. Ameren and its managers moved to dismiss the suit. In June 2013, the circuit court held that Bishop adequately pleaded its wrongful termination, breach of contract and tortious interference claims but dismissed, with prejudice (so it could not be filed again), Bishop’s claim for punitive damages related to its wrongful termination claim. Ameren and its managers in January 2015 filed a motion for summary judgment (judgment on the court filings, without a trial). After briefing and argument, the circuit court in May 2015 granted summary judgment in favor of Ameren and its managers. Bishop appeals.

This case presents several questions for the Court. One is whether the circuit court should have granted Ameren summary judgment on the wrongful termination claim. A related issue involves whether an independent contractor can bring a wrongful discharge claim. Other related issues involve whether Bishop was a whistleblower and whether Bishop created any genuine issue of material fact that it reported serious misconduct constituting a violation of law. An additional related issue involves whether state or federal case law permits or precludes expanding whistleblower protection to independent contractors. Another question is whether the circuit court should have granted Ameren summary judgment on the breach of contract claim. Related issues involve whether the contractual duty of good faith and fair dealing applies in a commercial relationship that can be terminated at will as well as whether such a contract can be terminated for reasons that contravene public policy. An additional question is whether the circuit court should have dismissed Bishop’s claim for punitive damages relating to wrongful termination. Related issues involve whether a substantive change in the common law governing punitive damages should apply retroactively, whether extending whistleblower protection to independent contractors promotes public policy and whether imposition of punitive damages in this case would violate due process. A further question is whether the circuit court should have granted the Ameren managers summary judgment on the claim alleging tortious interference with a business relationship. Related issues involve whether state law authorizes such a claim against individual managers of a company and whether there was a genuine issue of material fact as to whether the managers used improper means or acted out of their own self-interest in terminating Bishop’s contract.

Several organizations filed briefs as friends of the Court. The St. Louis and Kansas City chapters of the National Employment Lawyers Association argue Missouri law protects both independent contractors and employees from retaliation for whistleblowing. The Missouri Coalition for the Environment argues that, because whistleblowers are necessary to help ensure enforcement of environmental laws, any whistleblower – including an independent contractor – should be protected from retaliation. The Missouri Business Legal Center, Associated Industries of Missouri and Edison Electric Institute argue that neither the wrongful discharge cause of action nor the duty of good faith and fair dealing should be extended to independent contractors, that there are important differences between employees and independent contractors, and that any such expansion should be left to the legislature.

SC95658_Bishop_&_Associates_brief.pdf

SC95658_Ameren_Corp_and_Union_Elec_brief.pdf

SC95658_Bishop_&_Associates_reply_brief.pdf

SC95658_STL_KC_Chapters_Natl_Employment_Lawyers_Assoc_amici_brief.pdf

SC95658_MO_Coalition_for_Environment_amicus_brief.pdf

SC95658_MBLC_AIM_and_EEI_Amicus_brief.pdf

SC95619
State ex rel. Charles Zimmerman v. The Honorable David Dolan
Mississippi County
Challenge to probation revocation hearing scheduled 13 years after the alleged violation
Listen to the oral argument:

SC95619.mp3
Zimmerman was represented during arguments by Amy E. Lowe of the public defender’s office in St. Louis; the state was represented by Michael J. Spillane of the attorney general’s office in Jefferson City.

Charles Zimmerman pleaded guilty to first-degree robbery in 1997. The circuit court sentenced him to 20 years in prison, suspended execution of the sentence and placed Zimmerman on probation for five years. Following a probation revocation in 2000, the circuit court again placed Zimmerman on probation for five years. In January 2003, a probation violation report was filed in Missouri alleging Zimmerman was being charged with a crime in Indiana. Another probation violation report was filed six months later, and an arrest warrant was issued. A hearing was scheduled for January 2005 but was continued without being rescheduled. In March 2005 – six months before Zimmerman’s probation was set to expire – the circuit court made a docket entry suspending Zimmerman’s probation. Zimmerman advised the court he was about two years into a 30-year sentence in Indiana, requested a trial and appointment of a lawyer, and waived extradition. He continued to correspond with the Missouri court during 2006 indicating that he wished to resolve his warrant in Missouri and that Indiana had agreed to release him temporarily for the purpose of Missouri conducting probation violation proceedings. Documents from the spring of 2008 indicate that the arrest warrant still was active but that Missouri would not extradite Zimmerman. In April 2011, following additional correspondence from Zimmerman, the circuit court ordered the county prosecutor to prepare a writ directing the county sheriff to extradite Zimmerman from Indiana. He was released from prison in Indiana in January 2016 and was returned to Missouri. The next month, a third probation violation report was filed referring back to the 2003 reports. The circuit court scheduled a March 2016 probation violation hearing. Zimmerman sought a writ prohibiting the circuit court from revoking his probation, but while that matter was pending, the circuit court held a probation violation hearing in May 2016 and revoked Zimmerman’s probation. Zimmerman now seeks relief from this Court.

This case presents one primary question for this Court involving the circuit court’s jurisdiction (legal authority) over Zimmerman – whether Zimmerman’s probationary term, and the circuit court’s jurisdiction over him, ended by operation of law in 2005 or whether the circuit court retained jurisdiction by suspending the probationary term. Related issues involve whether there was a known and readily available means by which the court could have or should have procured Zimmerman’s presence for a probation violation hearing or whether it was appropriate for the circuit court to delay the hearing until after Zimmerman completed his Indiana prison sentence. Additional issues involve whether, by not holding a probation violation hearing sooner, the circuit court exceeded its authority under section 559.036, RSMo, deprived Zimmerman of his state and federal constitutional rights to due process, or resulted in a miscarriage of justice.

SC95619_Zimmerman_brief.pdf

SC95619_State_brief.pdf

SC95619_Zimmerman_reply_brief.pdf