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Week 15 (2018)

Week of April 9, 2018 through April 13, 2018

Ass’n. for Accessible Medicines v. Frosh (Thacker 4/13/2018): The Fourth Circuit held that a Maryland statute, which prohibits price gouging in the sale of prescription drugs, violates the dormant commerce clause because it directly regulates the price of transactions that occur outside Maryland.  The court reversed the District Court of Maryland’s dismissal of the claim and remanded the case with instructions to enter judgment in favor of AAM.  Full Opinion

Upstate Forever v. Kinder Morgan Energy Partners (Keenan 4/12/2018): The Fourth Circuit held that an alleged discharge of pollutants, reaching navigable waters located 1,000 feet or less from the point source by means of ground water with a direct hydrological connection to such navigable waters, falls within the scope of the Clean Water Act.  The court determined that the District Court of South Carolina had jurisdiction over this matter and that plaintiffs had stated a cause of action.  Consequently, the court vacated the District Court of South Carolina’s decision and remanded the case for further proceedings consistent with the opinion.  Full Opinion

United States v. Wooden (Traxler 4/10/2018): The Fourth Circuit held that Intellectual Development Disorder (IDD) is not a “serious mental illness, abnormality, or disorder” under the Adam Walsh Act requiring civil commitment.  Thus, the court, under the highly deferential standard of clear-error review, affirmed the Eastern District Court of Virginia’s order requiring Wooden’s release.  Full Opinion

Rainbow Sch., Inc. v. Rainbow Early Educ. Holding LLC (Agee 4/10/2018): The Fourth Circuit held that a school, which violated a permanent injunction banning trademark infringement twice, could be sanctioned according to its settlement agreement and subject to attorney’s fees.  Consequently, the court affirmed the Eastern District of North Carolina’s findings of contempt and awarded sanctions and dismissed for lack of jurisdiction Early Education’s appeal from the order requiring it to undergo an audit.  Full Opinion

United States v. Edlind (Shedd 4/10/2018): The Fourth Circuit held that a woman’s attempts to confuse a potential witness in an ongoing trial was corrupt persuasion sufficient for convictions of witness tampering, conspiracy to commit witness tampering, and obstruction of justice.  The court affirmed the Western District of Virginia’s judgment denying Edlind’s Rule 29 motion.  Full Opinion

Highlight Case

Levine v. Employers Ins. Co. of Wausau, No. 17-1342

Decided: April 12, 2018

The Fourth Circuit held that an insurer can validly limit motor vehicle insurance coverage to the insured’s owned vehicles through an uninsured/underinsured motorists (“UIM”) endorsement.  Owned vehicles can be defined in these policies in a narrower sense than the definition provided in the state-mandated UIM endorsement.  An insurer should not be penalized for potential ambiguities caused by the state-mandated UIM endorsement.

Plaintiffs, Carlos Bolanos Castillo and Marco A. Gabarette, were independent contractors transporting furniture for Purnell.  To make the delivery, Plaintiffs drove a truck that Purnell rented from Penske.  While driving to their destination, Plaintiffs pulled over on the side of the interstate to check on the security of the furniture.  Another driver struck the Penske truck, killing Castillo and injuring Gabarette.  Plaintiffs sued the allegedly negligent driver, but the driver had limited insurance coverage.  Purnell had an insurance policy, issued by Wausau, that included an UIM endorsement, which was limited on the declarations page to “Owned Autos Only.”  Therefore, Plaintiffs also filed suit against Wausau, seeking a declaration as to UIM coverage under the Wausau policy and their entitlement to UIM coverage.

In examining the plain language of the policy, the court reasoned that the language in the declarations page determines the applicability of UIM coverage.  Further, under the law of Virginia, parties may contract to limit UIM coverage to certain vehicles, including owned vehicles.  Under the plain language of the Wausau policy, only owned vehicles are included under UIM coverage.  Purnell rented the Penske truck, and the truck was not included in the policy’s list of Purnell’s owned vehicles; thus, the Penske truck was excluded from coverage.

Plaintiffs’ case rests on the fact that the definition of “covered auto” in the UIM endorsement is broader than the UIM limitation in the policy’s declarations page and, thus, provides them with coverage.  However, the court noted that limitations in declarations pages to the state-mandated UIM endorsement have been permitted in Virginia.  Further, such discrepancy is not an ambiguity in the policy because Virginia wrote the generic description and no ambiguities existed in the portion of the policy that Wausau wrote, the declarations page.

Accordingly, the Fourth Circuit affirmed the Eastern District of Virginia’s decision granting Wausau’s motion for summary judgment.

Full Opinion

Madison A. Smith