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10 Oct 2024
blog, Michael Coffey, News Permalink

Hurricane Milton’s destruction

October 10, 2024
Coffey Modica founding partner, Michael Coffey, was featured in The Real Deal, offering expert insight on the recent crane collapse in St. Petersburg caused by Hurricane Milton.
Oct 10, 2024 | By Lidia Dinkova and Katherine Kallergis

In the wake of Hurricane Milton, developers and contractors in the Tampa Bay area are evaluating damage at project sites, calling insurers and preparing to resume construction work.

Milton made landfall as a Category 3 storm with winds of 120 miles per hour on Wednesday night in Siesta Key in Sarasota County, flooding streets and homes, and spawning tornadoes as far away as western Palm Beach County. More than 3 million homes and businesses lost power. At least 12 people are confirmed dead.

The storm came nearly two weeks after Category 4 Hurricane Helene, which hit Florida’s Big Bend. But as Milton took aim at the Gulf Coast and then crossed the state, it plowed through a much more developed and populated region. Early predictions estimated losses of up to $175 billion in the Tampa Bay area due to Milton.

In St. Petersburg, where winds reached over 100 miles per hour, a crane at the construction site of developer John Catsimatidis’ luxury Residences at 400 Central condo tower partially collapsed and slammed into the office building across the street, leaving a hole in its side and bricks scattered. The offices at 490 First Avenue South house the Tampa Bay Times newspaper and other businesses.

“The good news is that the only thing that was hurt was a few bricks. No human beings were hurt,” said Catsimatidis, founder of New York-based Red Apple Group.

The 46-story, 301-unit condo tower will be the tallest building in St. Petersburg at 515 feet. It has three construction cranes reportedly rated to withstand winds of up to 110 mph.

The cranes were “fully secured,” Catsimatidis said, adding that work will resume with the two remaining cranes. “Bottom line is let the insurance companies sort it out. It’s going to be the insurance company for whoever put the crane up there.”

Attorney Michael Coffey, who has worked on construction crane accident cases, said the St. Petersburg collapse likely will prompt investigations by federal, state and local authorities. Among the inquiries will be whether the site should have used cranes made to withstand more than 110 mph winds.

“One of the questions would be who made the call that that level sufficed. Was that an appropriate crane to have been up on one of the largest construction sites in western Florida in the middle of hurricane season?” said Coffey of New York-based Coffey Modica.

Development has boomed in the Tampa Bay region in recent years. In addition to Catsimatidis’ luxury condo tower, South Florida developers Related Group and Mast Capital are active along Florida’s west coast.

Miami-based Related assessed impacts from Milton in the greater Tampa Bay area on Thursday. Related’s founder, billionaire Jorge Pérez, said this summer that he plans to spend upwards of $3 billion on projects in the Tampa area.

“Fortunately, early reports show very limited damage across projects like The Ritz-Carlton Residences, Rome Yards, and West River,” a Related spokesperson said.

Related, led by Pérez and his sons Jon Paul and Nick, broke ground on the second tower at the planned Ritz-Carlton Residences in November. The construction site at 3101 Bayshore Boulevard overlooks Hillsborough Bay.

Rome Yards and West River are both mixed-income housing developments in west Tampa.

Even if damage on project sites is minimal, developers and general contractors have a lot of work to do, said Oscar Seikaly, CEO of Miami-based NSI Insurance Group. Damage at construction sites usually is from water intrusion, which could lead to mold and mildew.

Contractors and developers have to document the issue, as well as document that it was fixed and the precautions they will take to avoid the same problem in the future.

“There’s a lot of mitigation that has to be done even if you have a small water claim,” Seikaly said. Otherwise, those water issues could cause bigger problems for buyers of those units down the line.

Also in St. Petersburg, Hurricane Milton tore through Tropicana Field Stadium’s fiberglass roof. The Tampa Bay Rays, a Major League Baseball franchise, previously announced plans to replace Tropicana Field with a new stadium as part of a larger mixed-use development. Tropicana was reportedly built to withstand winds of up to 115 miles per hour.

Though South Florida was largely spared from Milton, parts of the tri-county region suffered tornadoes. Video footage shows damage from a tornado in Avenir, a new master-planned community southeast of Lake Okeechobee, as well as a tornado that touched down in Wellington. Damage was also spotted in south Miami-Dade County and western Broward County.

Just north of South Florida in St. Lucie County, a tornado outbreak killed at least six people in the senior housing community of Spanish Lakes Country Club near Fort Pierce, according to reports.

Milton came as Florida residential and commercial property owners have been reeling from skyrocketing insurance premiums. The state’s vulnerability to hurricanes and storm surge led some carriers to opt out of providing coverage in Florida, leading to less competition among insurers and ever-increasing premiums.

Seikaly, of NSI, said he does not expect Milton will necessarily further raise builders liability premiums, or those for flood and wind policies at construction sites. But in light of the partial crane collapse, insurance for crane operators could become more challenging in South Florida where only half a dozen insurers are willing to cover the risk. The tri-county region’s dense development makes real estate damage from a crane accident more likely.

“It will make insurance companies take a much tougher look when they are asked to quote a crane company,” Seikaly said. “A crane in Brickell, I would have sleepless nights because no matter how the crane moves, it would hit something.”

 

03 Oct 2024
Michael Mezzacappa, News Permalink

Uber win on lawsuit motion highlights major role of binding arbitration

October 3, 2024
Coffey Modica partner, Michael Mezzacappa, was quoted in Legal Drive, offering insight on arbitration.
Justin Bachman, Senior Reporter | October 3, 2024

Dive Brief:

  • A couple who suffered severe injuries riding with an Uber driver must take their complaint against the company to arbitration, having agreed to waive their jury trial right, a New Jersey appeals court ruled last month in a case that has drawn national media headlines. Binding arbitration clauses are common across countless consumer user and employment agreements governing products from mobile phones to tax-preparation software to cable TV service.
  • Georgia and John McGinty said their minor daughter had agreed to Uber’s “terms of use” in January 2022 while placing an Uber Eats order with her parents’ permission. Two months later, the couple were injured when their Uber driver failed to stop for a red light, according to the ruling. Uber says it has only one user agreement and that Georgia McGinty had agreed to its terms three separate times since her first use of the rideshare app in 2015.
  • “Despite assertions to the contrary, the court concluded that the plaintiff herself — not her teenage daughter — agreed to Uber’s Terms of Use, including the arbitration agreement, on multiple occasions,” Uber Technologies said Thursday in a statement. The company said its arbitration motion does not affect the plaintiffs’ claim against the driver, Jia Zheng, for whom Uber has a state-mandated $1.5 million auto liability policy, or “50 times more coverage than a typical driver is required to carry.”

Dive Insight:

Binding arbitration clauses have increased significantly in corporate user agreements and employment offer letters as companies seek to resolve disputes in a forum that offers less legal expense and quicker resolutions. Arbitration also helps defendants avoid class actions and the kind of nuclear verdicts jury trials can present.

The American Arbitration Association said in its annual report that it had more than 500,000 cases filed last year for the first time since the organization’s founding in 1926.

On Sept. 20, a three-judge panel of the New Jersey appeals court reversed a Superior Court ruling last year denying Uber’s motion to compel arbitration of the McGintys’ complaint.

The court found that Uber’s arbitration provision “clearly and unambiguously evidences a waiver of plaintiffs’ right to pursue any claims against Uber in a court of law and obligates plaintiffs to resolve their claims through binding arbitration.”

A person using Uber’s platform for a ride or restaurant delivery must agree to the user terms before they can proceed to a particular service. They must also be 18.

The couple intends to file a motion for reconsideration at the appeals court by Oct. 11, and, if the court declines, would then appeal to the New Jersey Supreme Court, one of their attorneys, Evan Lide of Stark & Stark PC, told Legal Dive Thursday in an email.

“This is not only about my clients’ plight, but this decision has a negative effect on millions of other consumers as well,” he wrote.

The Uber lawsuit is the second compelled arbitration case in three months to draw national media headlines.

In August, Walt Disney Parks and Resorts abandoned its motion to compel arbitration of a complaint filed by the husband of a New York doctor who died in October 2023 after she suffered an acute allergic reaction to nuts and dairy from a restaurant on a Disney property near Orlando, Florida.

Disney argued that the woman’s husband, Jeffrey Piccolo, had agreed in 2019 to arbitrate any disputes when he signed up for a Disney+ streaming video account. The company later dropped its motion, agreeing to let the case proceed in a court.

Walt Disney did not respond to a message from Legal Dive seeking comment on that litigation.

The company “strive(s) to put humanity above all other considerations,” Disney Experiences Chairman Josh D’Amaro said in an Aug. 20 statement to Ars Technica. “With such unique circumstances as the ones in this case, we believe this situation warrants a sensitive approach to expedite a resolution for the family who have experienced such a painful loss.”

In response to forced arbitration, many trial lawyers have filed arbitration demands in bulk, by the tens of thousands, hoping to provoke a defendant to settle, the U.S. Chamber of Commerce and Mayer Brown attorneys argued in a 2023 white paper. Defendants typically bear the fee burden for arbitration proceedings.

When a firm files as many as 100,000 demands “does it really intend to resolve those claims on the merits?” attorneys Archis Parasharami, Andrew Pincus and Kevin Ranlett wrote. “Or is the goal to use the costs of instituting an arbitration — which are disproportionately borne by companies when consumers or employees initiate arbitration — to coerce a settlement without regard to the merits of the underlying claim?”

Corporations rely heavily on arbitration as a way to obtain “fair and reasonable” outcomes, said Michael Mezzacappa, a partner with Coffey Modica LLP.  Courts have become overly burdened, with litigation taking as much as five years in many states, he said.

“The jury verdicts the last 10 and 20 years are going nuclear,” said Mezzacappa, whose defense practice focuses on insurance cases. “An arbitrator is not going to sit there and give billions of dollars to somebody. Jurors are freely giving money away and it’s a problem for all of us.”

Consumers should also focus more attention on the agreements that they’re asked to sign in the course of their everyday lives, he said. “I think that society over time has learned to sign things without reading them.”

Georgia McGinty, an attorney who practices family law, believes that “consumers need to be protected,” Lide said.

“I am hopeful that the New Jersey Supreme Court is going to continue to protect the rights of consumers, but if we are unable to overturn the appellate decision, I think we need to look to a legislative fix,” he wrote. “Although the legislative fix may be too late for the McGintys, we want to do whatever we can to help other consumers in similar situations.”

01 Oct 2024
News, Veronica Mishkind Permalink

Malpractice strategies

October 1, 2024
Coffey Modica associate, Veronica Mishkind, was quoted in Medical Economics Journal, offering insights on the common cause of malpractice suits.
By Keith Loria | October 1, 2024

Malpractice suits are something that doctors unfortunately need to be prepared for. After all, mistakes happen and sometimes patients don’t end up with the desired results, so in their minds, the doctor must be to blame.

But there are numerous safeguards physicians can engage to keep malpractice suits at bay.

Ari Gurian, founding partner of Gurian Law in Illinois whose practice represents victims of medical malpractice, notes that a plaintiff’s attorney in these lawsuits usually gets paid only if they win, so if they bring suit, most feel the case against a physician is pretty strong.

“Misdiagnosis, surgical errors, medication mistakes, lack of informed consent and improper documentation are the most common causes of malpractice claims we see,” she says. “I recommend health care professionals proactively address each of these areas of vulnerability on a continuous basis as their first defense against my firm or others.”

Danielle Kelvas, M.D., a primary care physician with The HCG Institute, says from her experience, the most effective strategies in guarding against malpractice suits are to spend more time with patients and really answer their questions, including being readily available for questions or issues later.

“Everyone just wants to feel heard, cared for and appreciated,” she says. “If you can do that, patients will like and respect you and you’ll have less disagreements. Of course, conflict is unavoidable. Even if the patient was in the wrong, I always thanked them for their feedback and reemphasized that my priority is their health and that I always had their best interest at heart.”

Veronica Mishkind, a registered nurse who is now an attorney in Coffey Modica’s medical malpractice and professional liability practices, notes that the most common cause of malpractice suits is a failure to diagnose or a delay in diagnosis.

“The risks associated with this can be catastrophic, so in order to mitigate those risks, PCPs (primary care providers) should conduct thorough head-to-toe examinations of their patients, refer patients to specialists or further tests for any complaints the patient may present,” she says. “The PCP should also refer the patient to blood panel screenings and other standard screenings such as mammograms.”

Importantly, all of this should be documented in the PCP’s chart, including the results of the head-to-toe physical examination.

Heather Warner, health care practice lead at Woodruff Sawyer, an insurance broker and consultant, notes that a lack of knowledge, fear and an inability or refusal to change their lifestyle are the most common reasons patients pursue medical malpractice lawsuits.

“Many patients don’t want to go to the doctor or face their injury or illness, and they are intimated by medical jargon and the disparate knowledge between them and their health care providers,” she says. “However, at the same time, many patients believe that doctors can fix anything with surgery or a pill without them having to actively participate in their health.

The best way to mitigate these risks is to be kind and empathetic, to put the patients at ease and to invest them in their recovery.”

Alex Foxman, M.D., F.A.C.P., medical director at the Beverly Hills Institute, says all physicians should keep their medical knowledge up to date and ensure that they are practicing within the scope of their expertise.

“Refer patients to specialists when necessary and do not hesitate to seek second opinions when faced with complex cases,” he says. “You should also conduct regular audits of your practice to identify potential areas of risk. This includes reviewing patient records, practice protocols and communication methods to ensure they meet the highest standards.”

Mistakes to avoid

Almost half of adults in the U.S. have taken at least one prescription drug in the past 30 days. And, according to the FDA, 1.5 million patients are harmed each year by preventable medication errors. That means that they either got the wrong drug, they got too much of the drug, they had allergic reactions or there was some harmful interaction with another drug they were taking.

“My advice here is to pay attention to your patients, find out what other drugs they are taking and communicate effectively about potential risks and dosage,” Gurian says. “Each one of these injuries is preventable.”

Then there are misdiagnoses, which happen most often because of inadequate patient assessment; errors in medical judgment; failure to consider all relevant information or alternative diagnoses; and communication breakdowns within a health care team.

“To avoid a misdiagnosis malpractice lawsuit, I recommend doctors keep these risk areas in mind with every patient,” Gurian says.

Communication matters

Proper patient communication is key in preventing malpractice claims. The challenge is that not all patients feel comfortable discussing their concerns and complaints, so the PCP won’t get the correct information to make a plan of care, including further evaluation.

Therefore, PCPs should practice building their patient’s trust and rapport long term with their patients and being direct and empathetic with patients about their health, their options and their prognosis without using complex medical terms is key.

“Physicians need to take the time to make sure the patients understand what’s going on and what their treatment options are in plain, simple language, and then provide them with written notes to take home that reiterate what was discussed during their visit,” Warner says. “Research has shown that patients often forget up to 80% of what was said to them during their medical visits, so being precise is important.”

Physicians can try to foster an open and communicative relationship by trying to remember personal patient details to bring up at visits and take time during their patient’s visit to ensure that all patient concerns are addressed, fully considered and answered.

Proper documentation

Comprehensive and accurate documentation is a health care professional’s best defense against malpractice claims.

“You’d be surprised how many health care professionals keep poor records, and it only makes my job easier to win cases against them,” Gurian says. “Keep records of patient assessments, diagnoses, treatment plans and follow-ups to reduce the risk of error, and stick to established documentation protocols for maintaining electronic health records.

In litigation, Warner shares that she repeatedly hears the familiar mantra: “If it wasn’t documented, it didn’t happen” from the plaintiffs’ bar, so the importance of detailed, accurate documentation cannot be overstated.

“Physicians should be consistent in their charting, provide necessary detail, document their communications with the patient and refrain from interpersonal commentary that could be perceived as judgmental or insensitive,” she says.

From the first visit, Mishkind recommends writing down everything and anything that was discussed both with and from the patient.

“Not only should results of the physical evaluation be documented, but so should what was discussed with the patient, along with next steps and future care plans,” she says. “Further, any materials provided to the patient, including medical articles and studies, referrals, etc., should also be noted in the chart.”

At the end of each documented visit, Kelvas always adds a few sentences about how she educated the patient about what would happen if they didn’t take their medication or follow our plan of action.

“If someone is nonadherent — the old term is ‘noncompliant’ — doesn’t get their regular blood work, doesn’t refill their meds on time so there’s a lapse in care, you have to document it, otherwise, you can get dinged for a failure to follow up,” she says.

For informed consent documents, things need to be detailed and complete and include only the risks/benefits of the specific treatment being provided. The written document must be written in plain language at a seventh-grade reading level or below, and the physician needs to schedule an appointment long enough to explain everything while leaving time for questions and clarification.

Information on any treatments should be provided to the patient in their fluent language and a copy of the same should also be documented in the chart and indicated as provided to the patient.

“An informed consent document should be executed by the patient prior to any treatment or procedure,” Mishkind says.

Dealing with difficult patients

Most physicians at one time or another have run into a difficult patient relationship or someone who screams a risk of potential litigation.

When encountering someone who they think could be a challenge, Warner says physicians should slow down, have a nurse or other health care provider in the room and document.

“Though there are rare patients out there who are looking for an opportunity to sue a physician, most patients are just upset about their health issues and scared of what might happen to them, which sometimes leads to lashing out at — and blaming — their health care providers,” she says. “Empathy and patience are essential in these situations, and the physician needs to remain calm and avoid getting emotional, annoyed or angry with the patient.”

Primary care physicians need to actively listen to their patients and demonstrate that they genuinely care about their well-being. If they foster a relationship of open communication without judgment or condescension from the beginning, the barriers to patient communication, such as fear and embarrassment, will be vastly reduced and the physicians will get a more complete and accurate picture of their patients’ issues and health, making treatment plan decisions easier and more informed. That will cut down on any threats of a malpractice suit.

30 Sep 2024
Jodi Ritter, News Permalink

How the restaurant, hospitality industries manage today’s risks

September 30, 2024
Jodi Ritter, a partner at Coffey Modica, provided her insights on common hospitality risks in a recent quote for Property Casualty 360.
Kristen Beckman| September 30, 2024

Hotels, motels, restaurants and resorts are subject to an array of perils and exposures including trips and falls, theft, alcohol-related accidents, natural disasters and cybersecurity breaches. With a multitude of people visiting and working at these properties daily, insurance is crucial, although it can be complex to navigate and represent a substantial business expense.

Like other sectors, hospitality is impacted by losses related to increased natural disasters, increased costs, a rise in litigation and the lingering impacts of COVID-19. Many insurance carriers have been evaluating their participation in the hospitality market, resulting in reduced capacity and double-digit rate increases.

“Hotels are subject to the same natural catastrophe perils as other classes of business but are often disproportionately impacted by such events due to their concentration in urban population centers and coastal areas,” says Dustin Ritch, a broker at World Insurance Associates who specializes in serving the hospitality industry on the East Coast. “Aside from natural catastrophes, water damage continues to prove a loss leader in the hotel industry due to both drain backups and bursts or accidental discharge of sprinkler systems (often when a guest hangs clothing on a sprinkler head in a room).”

Rising costs

Facing a slower expected travel environment this year, the hospitality industry is keen to manage risks and related insurance costs. In 2023, hotel insurance accounted for about 1.7% of total operating revenue, up from its long-run average of 1.2%, according to CBRE Hotels Research. Some factors driving the surge in commercial insurance premiums include the number and severity of losses due to hurricanes in Florida, fires in California and Hawaii, tornadoes in the Midwest, winter freezes in Texas, and convective storms across the country, says CBRE. Concurrently, the cost of fixing damages and replacing buildings has gone up and supply chain interruptions and lack of available labor continue to inflate construction-related costs and drive building values higher, which leads to increased premiums. Hotel size and capacity impact premiums, as does claims history and risk management practices.

“Unfortunately for U.S. hoteliers, the ability to control insurance costs is limited,” says CBRE. “On property, hotel owners can make physical ‘risk improvements’ such as flood gates and earthquake seismic shutoff valves. Owners also have the option to buy less insurance, or increase their deductible, to reduce their premiums.”

Common hospitality risks

Besides trips and falls, which are a prevalent risk across most commercial entities, one of the most obvious and common risks hotels and restaurants face is fire loss, says Jodi Ritter, a partner at New York-based law firm Coffey Modica LLP and former lead of the Sompo Global Risk Solutions program at Gallagher Bassett Services. Hotels and restaurants have strict guidelines for building and health code regulations, including fire suppression in the kitchen, hard-wired smoke detectors, sprinkler systems and fire extinguisher placements. Properly marked exits and evacuation plans to assist patrons and reduce risk of liability are also warranted, she says.

One area often overlooked in hotel coverage is pair and set coverage, noted Ritter. Since hotel furniture is coordinated and matching, if only a portion of their furniture is damaged, they may need to replace an entire set to maintain their décor.

Another common risk for hospitality is around swimming pools, she says.

“The presence of a swimming pool presents safety hazards for both patrons and staff,” says Ritter. “Lifeguards can be a good investment as they supervise and assist immediately if there is a problem. Either way, rules should be posted and some level of oversight provided in order to maintain a safe place.”

Employee theft also commonly presents a risk to the hospitality industry. This can include embezzlement as well as theft of the employer’s property, says Ritter. Communicating with employees is the first step in prevention, ensuring everyone knows what constitutes theft and fraud and that there is a zero tolerance for it. Having company oversight by managers and frequent third party audits is advisable and conducting background checks on new hires is also a relevant risk management tool, she says.

Emerging risks

One emerging legal risk unique to the hospitality sector is the increasing incidence of human trafficking in hotels resulting in lawsuits. Hotels can be held civilly and criminally liable for failing to prevent and report trafficking on their premises. Days Inn, for example, was ordered to pay a multi-million-dollar settlement to eight victims in a 2023 human trafficking case. Many policies now incorporate exclusions for human trafficking and other crimes as well as for weapons, says Ritch.

In addition, communicable disease exclusions have become a mainstay in the industry following the pandemic. “It can be found baked into virtually every commercial general liability policy at this point, particularly in the hospitality space,” says Ritch. Like many other commercial entities, hospitality also faces cyber issues, and protecting guests’ personal and financial information is mandatory, says Ritter. She also noted hotels face cyber risks related to guests using hotel Wi-Fi systems to work remotely. “Safe systems are imperative to prevent cyberattacks and data breaches,” she says.

Risk mitigation

Major types of hospitality insurance include commercial general liability insurance covering guest injuries and property damage; commercial property insurance to guard against disasters, fires and storms; commercial auto insurance for properties that provide shuttles or other transportation-related services; workers compensation insurance to cover employee injuries; equipment breakdown insurance; cyber liability insurance; dram shop insurance broadly covering liquor liability concerns; and innkeeper liability insurance.

Beyond proper insurance, proactive mitigation practices can help the hospitality industry reduce its exposures. Both Ritter and Ritch encouraged regular inspection and maintenance of properties and ensuring proper security is in place. Ritter also pointed to ensuring proper contracts are in place with third-party vendors: “If you’re a mall, a restaurant, an apartment complex and you have a cleaning company, you must have a contract with an indemnification clause that if the vendor does something negligently or omits to do something and somebody is injured as a result, then they have to provide defense and indemnification to the owner.”

Training is also key to mitigating risk in hospitality, especially because risk managers often aren’t present when incidents occur. Employees should be trained to proactively watch for potential dangers, keep guests safe during incidents, and collect information and properly fill out incident reports. The American Hotel and Lodging Association (AHLA) offers free training to employers and employees on how to recognize and respond to human trafficking through its No Room for Trafficking initiative.

Broker best practices

In the increasingly challenging hospitality insurance environment, experts say property owners and managers should start working with their broker up to 120 days before renewal and make sure the broker is aware of any recent improvements to the property. The hospitality industry is increasingly looking for and may benefit from customized coverage for unique risks. In addition, digital tools tend to appeal to hospitality insurance purchasers.

11 Sep 2024
blog, Mostafa Soliman, News Permalink

Ethical Rules for Using Generative AI in Your Practice | Model Rule 1.6: Confidentiality

September 11, 2024
Coffey Modica’s Mostafa Soliman, Counsel, was featured by Fishman Haygood for his insights on ChatGPT.
September 11, 2024

At the risk of stating the obvious, we are still in the early days of what we believe to be an “AI Revolution” in the way that goods and services, including legal services, are and will be provided. Which means that we do not, at this point, have much in the way of formal guidance.*

With that preface, in this series we will examine some of the Professional Rules[i] and other legal requirements that could potentially be implicated by a law firm’s use (or non-use) of ChatGPT or other Generative AI (GAI). Last time, we discussed the importance of establishing, periodically reviewing, and enforcing internal policies and protocols regarding the use—and/or limitation and restrictions on use—of ChatGPT and other AI products by lawyers and other employees at the firm. One reason for this precaution is the issue of confidentiality, which brings us to our fourth rule.

Model Rule 1.6: Confidentiality

Perhaps the most serious concerns that have been raised regarding the use of ChatGPT and other AI systems surround the security of privileged and other legally protected information. Under Model Rule 1.6, an attorney is not only generally prevented from disclosing “information relating to the representation of a client,” but is also charged with an affirmative duty to “make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”[ii]

Using ChatGPT to analyze a client’s legal documents that contain privileged or other confidential information can pose a risk that such information could be misused or exposed.[iii] Generative AI programs that are ‘self-learning’ continue to develop responses as they receive additional inputs, adding those inputs to their existing parameters. The use of these kinds of programs creates a risk that client information may be stored within the program and revealed in response to future inquiries by third parties.[iv]

In March of 2023, for example, there was a data leak at ChatGPT that allowed its users to view the chat history titles of other users.[v] Outside of such data breaches, chat history can be accessed and reviewed by ChatGPT or other Generative AI company employees and may also be provided to third-party vendors and affiliates.[vi]

In addition to attorney-client privileged information and/or work product, one also must be cognizant of other legal protections and requirements that might apply to client information, including:

  • HIPAA (Health Insurance Portability and Accountability Act of 1996)[vii]
  • The European Union’s General Data Protection Regulation (GDPR)[viii]
  • The California Consumer Privacy Act (CCPA)[ix] (and/or other State Privacy Laws)
  • Trade Secret Protection[x] (which may be compromised by “disclosure” to the AI service)
  • Contractual Non-Disclosure Agreements and Obligations

The Florida Ethics Opinion regarding the use of Generative AI advises that existing ethics opinions regarding prior technological advances (such as cloud computing, electronic storage disposal, remote paralegal services, and metadata) have “addressed the duties of confidentiality and competence and are particularly instructive” and generally conclude that a lawyer should:

  • Ensure that the provider has an obligation to preserve the confidentiality and security of information, that the obligation is enforceable, and that the provider will notify the lawyer in the event of a breach or service of process requiring the production of client information;
  • Investigate the provider’s reputation, security measures, and policies, including any limitations on the provider’s liability; and
  • Determine whether the provider retains information submitted by the lawyer before and after the discontinuation of services or asserts proprietary rights to the information. [xi]

The California Practical Guidance for the Use of Generative Artificial Intelligence reinforces this responsibility and further suggests that a lawyer who intends to use confidential information in a generative AI solution should anonymize client information as well as “ensure that the provider does not share information with third parties or utilize the information for its own use in any manner, including to train or improve its product.”[xii] These measures should include reviewing consulting with an IT professional as well as reviewing the program’s Terms of Use.

In the Terms of Use dated March 14, 2023, OpenAI advised that:

If you use the Services to process personal data, you must provide legally adequate privacy notices and obtain necessary consents for the processing of such data, and you represent to us that you are processing such data in accordance with applicable law. If you will be using the OpenAI API for the processing of “personal data” as defined in the GDPR or “Personal Information” as defined in CCPA, please fill out this form to request to execute our Data Processing Addendum.[xiii]

The updated Terms of Use, promulgated in November of 2023 and effective as of January 31, 2024, simply state that:

You are responsible for Content, including ensuring that it does not violate any applicable law or these Terms. You represent and warrant that you have all rights, licenses, and permissions needed to provide Input to our Services.[xiv]

ClaudeAI’s Acceptable Use Policy similarly prohibits users from “violating any natural person’s rights, including privacy law” as well as “inappropriately using confidential or personal information.”[xv]

Natalie A. Pierce and Stephanie L. Goutos of Gunderson Dettmer Law Firm note that challenges to the responsible use of GAI systems are actively being addressed by legal entities, from academic institutions to law firms, through methods such as “employee training, AI governance policies, and the formation of specialized AI task forces.” The authors emphasize the importance of recognizing existing countermeasures that aim to help mitigate risks associated with confidentiality concerns, while the framework for a lawyer’s responsible AI use continues to develop. For example, OpenAI’s April 2023 policy change allows users to disable chat history in ChatGPT. The company’s August 2023 update introduced an “enterprise-focused model that offers enhanced security protocols, sophisticated data analysis, and bespoke customization capabilities.” As the technology in Artificial Intelligence continues to evolve, Pierce and Goutos predict that a “majority of law firms and organizations will adopt custom experiences powered directly into their own applications, as well as prohibit the input of any confidential information into public GAI tools, which will substantially alleviate breach of confidentiality concerns.”[xvi]

A lawyer’s affirmative duty to reasonably communicate with his or her client is also implicated in this context. Model Rule 1.4 requires an attorney to “reasonably consult with the client about the means by which the client’s objectives are to be accomplished” and to explain relevant matters “to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” [xvii] To the extent use of ChatGPT and other AI services in connection with the representation of a client is contemplated, it is therefore important to discuss the potential risks and benefits with the client, so that an informed decision can be made.[xviii]

 

Explore Mostafa Soliman’s analysis in Navigating the Ethical and Technical Challenges of ChatGPT (2023), available through the New York State Bar Association.

10 Aug 2024
E-bikes, Michael Mezzacappa, News Permalink

Readers sound off on Laura Kavanagh’s Legacy

August 10, 2024
Coffey Modica partner, Michael Mezzacappa, was published in the New York Daily News opinion section regarding retiring FDNY Commissioner Laura Kavanaugh and her legacy of awareness and advocacy regarding the growing threat of e-bike battery fires.
New York Daily News | August 10, 2024

Continue her legacy 

Tarrytown, N.Y.: Former FDNY Commissioner Laura Kavanagh’s relentless advocacy for lithium-ion battery safety was rightly celebrated in your Aug. 7 editorial  “Laura Kavanagh’s mission continues.” Shining a light on the scourge of e-bike battery fires has not only inspired swift action on the part of our representatives at all levels of government, but it’s saved lives in the process. According to reporting in July 2024, e-bike battery fires had led to only one fatality versus 13 at the same point in 2023, no doubt due to greater consumer awareness of what to do in case of these fires. But more must be done, as the number of fires, year over year, has remained pretty much the same even as fatalities and injuries decline. Congress must pass federal safety standards that will keep improper equipment off the market and ensure that manufacturers doing business in the U.S. are traceable and insured. 

31 Jul 2024
E-bikes, Michael Mezzacappa, News Permalink

Opinion: E-Bike Battery Fires Demand Sweeping Safety Reforms

July 31, 2024
Michael Mezzacappa, partner at Coffey Modica, wrote an insightful opinion on E-Bike Battery Fires featured in City Limits.
By Michael P. Mezzacappa | July 31, 2024

The rash of lithium-ion battery fires across the country has finally sparked Congressional action with the introduction of the Setting Consumer Standards for Lithium-Ion Batteries Act (H.R. 1797), requiring the Consumer Product Safety Commission to establish product safety standards for rechargeable lithium-ion batteries used in e-bikes and other micro-mobility devices.

Such legislation merely touches the surface of a larger enforcement problem. E-bikes are here to stay, and without a multipronged approach demanding action from the business community and individual stakeholders, along with local governments, no meaningful difference will be achieved.

Since the onset of COVID-19, when home deliveries to locked-down residents became an essential service, e-bikes have become ubiquitous in major cities like New York. The lithium-ion batteries that power the bikes have become the leading cause of fatal fires throughout the five boroughs.

According to New York’s Fire Commissioner Laura Kavanaugh, in just the past two years, e-bike batteries have caused approximately 500 fires and killed 24 people, and there are no signs of this trend slowing down. H.R. 1797’s main sponsor is New York Congressman Ritchie Torres of the Bronx, which experienced three e-bike fires in the first half of May 2024 alone.

But the dangers of lithium-ion batteries are hardly an “only-in-New York” issue. Municipalities from coast to coast have seen a surge in incidents where exploding batteries suddenly go ablaze and trap those inside the affected home or business.

In California, San Francisco saw 58 fires involving lithium-ion batteries in 2022, with an additional 41 fires counted in 2023. Meanwhile, the San Diego Fire-Rescue Department reported at least 32 e-bike battery fires since mid-March 2024, in addition to 104 fires in 2023.

Data from the International Fire Chiefs Association found more than 60 battery fires in Houston, TX during 2023, and 73 lithium-ion battery fires were investigated by the Phoenix Fire Investigations Task Force between June 2023 and February 2024.

Even the DMV—the District of Columbia, Maryland and Virginia—is not immune, with 17 fires reported in Fairfax County in 2023, and eight Washington D.C. fires in the same year.

This ever-growing scourge has led to a patchwork of rules and regulations as cities and states tackle the problem with their own array of legislation, fire code changes and more. There is certainly an appetite for action on the federal level, as H.R. 1797 easily passed the House with bipartisan support. At a recent event in Brooklyn, New York Senator Kirsten Gillibrand voiced her support for the federal safety standards outlined in the bill and pushed for its inclusion in the Fiscal Year 2025 National Defense Authorization Act (NDAA).

While developing and enforcing safety standards for rechargeable lithium-ion batteries can aid the fight against the fires they spark, it is far from enough to solve the issue. More actions need to be considered to fully put these deadly blazes behind us.

E-bikes are often used by delivery workers who are independent contractors living on an hourly salary. When battery issues arise, these price-conscious drivers frequently gravitate toward the cheapest possible option, whether that is a disreputable online seller or a secondary market flooded with foreign-based goods.

While putting stringent safety standards on new e-bike batteries is helpful, lawmakers will not be able to go into people’s homes to confiscate older, unregulated e-bikes and batteries.

The fact is, however, that lithium-ion battery imports in the U.S. roughly doubled for the third consecutive year in 2022, according to S&P Global—a period when 60 to 70 percent of global e-bike production occurred in China.

Those majority-foreign-manufactured models currently dominate the market and will continue to be sold from person to person at garage sales or on sites such as Craigslist.

So, while legislators at the federal, state and city levels debate and design the structures of their own interventions, more needs to be done to spread responsibility to all involved.

Local municipalities should mandate the creation of an insurance market that can handle e-bikes. For those used for commercial purposes, the e-bikes in the delivery fleet should be periodically inspected by the public authorities that might license operators of these motorized devices.

Further measures must also be taken on the federal level, as any lithium-ion battery standards must ensure that manufacturers are traceable and insured, if they want to do business in the U.S.

When deadly fires do occur, high-level investigations should take place. Just as the The National Transportation Safety Board (NTSB) is called in when a train derails, a ship crashes or when airplane parts fall out of the sky, there must be a body to oversee and investigate incidents involving e-bikes on a national basis, ensuring that whatever went wrong is not constantly recurring.

While Congress should be applauded for recognizing the importance of this issue and making attempts to tackle some of the root causes head on, it is going to take a concerted effort from all of us to put a lid on these growing fire hazards and save lives.

Michael P. Mezzacappa is a partner and general counsel with Coffey Modica LLP. Admitted to practice in New York, New Jersey and the District of Columbia, he is a trial attorney who has represented insurers, property owners and managing agents, manufacturers, construction companies, trucking companies and other professionals in cases based on some of the largest and most high-profile litigations, including fires and explosions.

09 Jul 2024
Michael Coffey, News Permalink

Boeing’s Plea Deal Shows The Importance Of Accountability After A Crisis

July 9, 2024
Coffey Modica’s founding partner, Michael Coffey, comments on Boeing’s plea deal in Forbes article.
By Edward Segal, Senior Contributor | July 8, 2024

Boeing’s plea deal with the federal government that was announced Sunday concerning issues related to the company’s 737 Max is a timely reminder for business executives about the importance of full disclosure and accountability in the aftermath of a crisis.

The failure to provide all the information that is requested by authorities about a crisis further damages the image and reputation of a company and can deepen or extend the crisis—or create a new one.

Subject To Approval

In the deal that is subject to a judge’s approval, Boeing would plead guilty to defrauding the government in a case related to the crash of two of its 737 Max planes and not adhering to the terms of an agreement with the government that enabled the company to avoid prosecution.

Boeing confirmed that it had reached an “agreement in principle in terms of a resolution with the Justice Department subject to the memorialization and approval of specific terms,” according to the Washington Post.

Another Low Point

“It is rare for a company of Boeing’s stature to plead guilty to a crime, and the moment marks another low point for the already-battered reputation of the century-old aircraft manufacturer,” the Washington Post reported.

“The plea underscores the long shadow of the deadly crashes and also comes at [a[ time when Boeing is trying to restore the trust of regulators and the flying public amid a fresh safety crisis that began in January when a panel flew off the side of a newer model Max mid-flight,” the news outlet wrote.

Ripple Effect

In addition to further damaging its reputation, the plea deal “potentially ability to secure lucrative government contracts with the likes of the U.S. Defense Department and NASA, although it could seek waivers,” Reuters reported.

“Over on-third of Boeing’s work is via government contract and [the plea] could have long ranging impact on Boeing their contracts and the lives of Boeing’s 167,000 member workforce,” Michael Coffey, an attorney and senior partner of Coffey Modica, a defense litigation firm, explained via email.

Downsides

Despite the damage the deal will have on Boeing, legal experts say it may not discourage others from similar transgressions.

Deal Lacks Teeth

“The Boeing plea deal— like others involving corporations— lacks teeth,” Wayne Cohen, a law professor at the George Washington University School of Law, said in a statement.

“The flaw here is that although individuals may go to prison for similar offenses, corporations escape with fines. This begs the question whether justice has been served. Financial penalties in civil cases are acceptable, but in criminal cases no one faces prison. That’s the problem,” he observed.

Limited Deterrence

“A criminal plea for Boeing’s misconduct is likely to have a deterrent effect on other corporations,” Jason Brown, a former Department of Justice Special Agent and a legal advisor to the FBI.

“However, if only the company pleads guilty and no individuals are held accountable, the deterrence may be limited, as individual actors might feel insulated from criminal liability behind the corporate shield. Often, the act itself isn’t enough to trigger culpability; it’s the obstruction and cover-up that lead to charges,” he noted.

Controlling The Narrative

One of the lessons to come out of the plea deal is “the importance of engaging a crisis management team and legal experts who can tactfully disclose wrongdoing while controlling the narrative,” Brown observed.

“This approach helps avoid a concealed liability that will inevitably be exposed, often through whistleblowers or other means. Business leaders should learn from this plea deal that transparency and accountability are crucial in crisis management to prevent further legal and reputational damage,” he concluded.

03 Jul 2024
Jonathan Heller, Joseph Hopkins, Maxwell Bottini, Michael Coffey, News, Robert Modica Permalink

Coffey Modica Promotes Two Partners and One Counsel in NY

July 3, 2024

Law360 | Connecticut Pulse

By Matt Perez | July 3, 2024

New York litigation boutique Coffey Modica LLP announced the promotion of two attorneys to partner, including the firm’s first hire in 2021, as well as the elevation of another lawyer to counsel.

Maxwell Bottini, who joined the firm around its founding, and Joseph Hopkins have both been elevated to partner, according to a Monday statement from Coffey Modica, while Jonathan Heller steps into the counsel role. The attorneys practice within labor and professional liability law.

“Each of these talented attorneys has played a key role in the incredible growth Coffey Modica has experienced in just under three years since its founding,” said partner Robert Modica in a statement Monday. “The knowledge, dedication and integrity they bring to every client interaction is admirable.”

Bottini, who practices out of New York and Connecticut, handles labor law cases, defending both general contractors and subcontractors. He has tried over 20 cases to verdict and several more to settlement.

Before joining Coffey Modica, Bottini worked as an associate at Tyson & Mendes LLP. He began his career as an assistant district attorney with the Kings County District Attorney’s Office. Bottini earned his bachelor’s from Villanova University and his law degree from Brooklyn Law School.

“I was the first attorney hired at Coffey Modica, and it has been a privilege every day since to work alongside this top-notch team,” Bottini said in the statement. “I am grateful to all of my colleagues and mentors, especially Michael Coffey and Robert Modica, for their support and guidance, and I look forward to continuing to grow along with the firm well into the future.”

Also stepping into the partner role, Hopkins works on litigation matters related to labor law, construction defects, professional liability and casualty defense, representing developers, general contractors and real estate investment and management companies.

Hopkins runs his practice out of New York City, having joined the firm in early 2023 after previously serving as an associate at O’Toole Scrivo LLC and Wood Smith Henning & Bergman LLP. He received his bachelor’s and law degrees from Seton Hall University.

“It has been a privilege to work alongside Michael Coffey, Robert Modica and all of my esteemed colleagues, whose mentorship has helped guide my professional growth,” Hopkins said in the statement. “I am excited for the firm’s continued expansion, and I look to what the future has in store.”

Heller becomes a counsel at Coffey Modica after two years in an associate attorney role with the firm. Working out of Coffey Modica’s White Plains, New York, office, Heller also handles labor law, general liability and casualty matters. During his career, he’s represented owners, contracts and corporations across New York. He earned his bachelor’s from Queens College and his law degree from Hofstra University.

“I am thankful to the entire Coffey Modica team for their faith and trust in me to be a part of the firm’s extremely bright future,” Heller said in the statement. “I feel that every day is an opportunity to learn a better tactic or a better argument that would further assist us in getting the best results for our clients, and I look forward to further cultivating our firm’s relationships.”

Founded in 2021, Coffey Modica has several locations across New York, as well as offices in New Jersey and Connecticut. The firm represents businesses and insurance companies in litigation defense and appellate strategy, along with consulting across professional industries.

01 Jul 2024
Jonathan Heller, Joseph Hopkins, Maxwell Bottini, Michael Coffey, News, Robert Modica Permalink

Coffey Modica Promotes Three Attorneys

July 1, 2024
July 1, 2024

Coffey Modica LLP, a defense litigation firm representing prominent business and insurance companies in liability claims, excess property/casualty, medical malpractice, nursing, and other professional industries, announced that two of the firm’s attorneys have been promoted to Partner, with a third being given the role of Counsel.

“Each of these talented attorneys has played a key role in the incredible growth Coffey Modica has experienced in just under three years since its founding. The knowledge, dedication and integrity they bring to every client interaction is admirable and it is exactly that talent that our firm hopes to continue fostering with these much-deserved promotions,” said Founding Partner Robert Modica.

Partner Maxwell Bottini has been working with Coffey Modica since its founding in 2021. Practicing out of the firm’s New York and Connecticut offices, Bottini focuses on high-exposure labor law cases, defending general contractors and subcontractors alike. He has successfully tried more than 20 cases to verdict and settled even more, achieving the most favorable results possible for his clients. Bottini began his career as an Assistant District Attorney in the Kings County District Attorney’s Office, where he investigated and prosecuted hundreds of misdemeanor and felony cases. He is a graduate of Brooklyn Law School and currently lives in Fairfield, CT.

“I was the first attorney hired at Coffey Modica and it has been a privilege every day since to work alongside this top-notch team. I am grateful to all of my colleagues and mentors, especially Michael Coffey and Robert Modica, for their support and guidance, and I look forward to continuing to grow along with the firm well into the future,” said Bottini.

Partner Joseph Hopkins focuses primarily on New York Labor Law, construction defects, professional liability and casualty. A former judicial law clerk for the Honorable John I. Gizzo, Hopkins has represented prominent general contractors and developers in Manhattan on high-value matters, and he successfully achieved a defense verdict in New Jersey on behalf of a national real estate investment and management company. He practices out of the firm’s New York City office and is admitted to the Bar in both New York and New Jersey. A graduate of Seton Hall University School of Law, Hopkins currently lives in Cranford, NJ.

“I am truly honored to be elevated to Partner at Coffey Modica. It has been a privilege to work alongside Michael Coffey, Robert Modica and all of my esteemed colleagues, whose mentorship has helped guide my professional growth,” said Hopkins. “I am excited for the firm’s continued expansion, and I look to what the future has in store.”

Counsel Jonathan Heller joined Coffey Modica in 2022 and practices out of the firm’s White Plains office, where he specializes in labor law and general liability and casualty matters. As a third-generation attorney, over the course of his eight-year career, Heller has both defended and prosecuted cases on behalf of dozens of leading owners, contractors and major New York corporations, as well as one of the largest hospital conglomerates on Long Island and a host of well-known physicians and surgeons. The Long Island native is a graduate of Hofstra University’s Maurice A. Deane School of Law and currently lives in Teaneck, NJ.

“I am thankful to the entire Coffey Modica team for their faith and trust in me to be a part of the firm’s extremely bright future,” said Heller. “I feel that every day is an opportunity to learn a better tactic or a better argument that would further assist us in getting the best results for our clients, and I look forward to further cultivating our firm’s relationships. In this new role, I hope to contribute to the passion for excellent work product that makes our firm one of the top rising law firms in the United States, and one of the best places to work in the New York Metropolitan Area.”

Coffey Modica LLP is a New York-based defense litigation firm with offices in New York, New Jersey and Connecticut, and is among the fastest-growing firms in the nation. The firm represents defendants in high-profile, high exposure matters across many disciplines and industries around the country. Known for being aggressive trial attorneys and litigators, Coffey Modica resolves matters on behalf of its clients with the most cost-effective resolutions aligned with their short- and long-term business goals and culture.