Other Areas of Law

Rex P. Fennessey, Esquire

Private university which permits members of the public to apply for admission is open to “a subset of the general public” is therefore subject to the Missouri Human Rights Act. State of Missouri ex rel., Washington University v. Richardson & Missouri Commission on Human Rights, Nos. 74907 & 74993 (Mo. App. W.D., February 5, 2013), Newton, J.

Jessica Richardson alleged that she was sexually harassed and verbally abused by her advisor in Washington University’s Same Fox School of Design and Visual Arts (“University”); and that she was retaliated against for reporting the alleged harassment. Richardson filed a Charge of Discrimination with the Missouri Commission on Human Rights (“MCHR”) alleging violations of the Missouri Human Rights Act (“MHRA”). When the MCHR requested a response from the University, the University sought and obtained a writ from the Circuit Court of Cole County prohibiting the MCHR from initiating administrative proceedings or issuing a “Right to Sue” to Richardson on the basis that the University was not a “place or business offering or holding out to the general public” under § 213.010(15), RSMo, because it had selective criteria for admission,  and, even assuming it was a place of public accommodation, that the University was exempt from the MHRA under § 213.065(3), RSMo, because the University was “not in fact open to the public.” Richardson and the MCHR both appealed.

Held: Reversed and remanded with instruction to quash the writ.
The Western District first noted that the distinction argued by the parties between the University’s Fox School of Design and Visual Arts and the University as a whole was largely irrelevant; and the remaining opinion discussed the University itself rather than the Fox School specifically. The Western District rejected the trial court’s reasoning that the University was not “offering or holding out to the general public” and found that the services of the University (i.e. educational instruction) were, in fact, “offered” to the general public because members of the public could apply for admission; the limitation resulting from selective admission only limited the delivery of those services.  The Western District also found that the University was “in fact open to the public” because “admittees are a subset of the general public that was invited to apply[.]”  The court therefore found the University subject to the MHRA and remanded to the trial court with instructions to quash its previously issued writ and permit the MCHR to proceed.

Editor’s Note
  In the final portion of its opinion, the court found that the trial court also erred in issuing the writ of prohibition against the MCHR before it had the opportunity to investigate Richardson’s claims and determined whether to issue Richardson a “Right to Sue” letter. This opinion was issued before the Missouri Supreme Court’s decision in Farrow v. St. Francis Medical Center, No. SC92793 (Aug. 27, 2013), and practitioners should be aware of that decision’s implications for timely challenging the MCHR’s statutory authority to issue a “Right to Sue.”

Multiple acts occurring during a single incident do not qualify as a repeated unwanted course of conduct necessary to support an order of protection under § 455.040.1, RSMo. M.L.G. v. R.W., No. 99465 (Mo. App. E.D., August 20, 2013), Clayton, J.

R.W. and M.L.G. were neighbors owning adjoining property. R.W. confronted M.L.G.’s wife and requested she stop spraying pesticides on the grass along their adjoining property because he was concerned his horses could eat the grass and become ill. Believing R.W. had yelled at his wife, M.L.G. then confronted R.W. who, during the confrontation, pulled a gun from his pocket and threatened M.L.G.; allegedly touching the weapon to M.L.G.’s temple. Following a struggle, M.L.G. pinned R.W. to the ground. No shots were fired, and although police were called to the scene, no criminal charges were filed.

M.L.G. subsequently petitioned for an order of protection against R.W. alleging that R.W. had “stalked” him within the meaning of § 455.010. The trial court issued a full order of protection, reasoning that the verbal threats made by R.W. to M.L.G. and the pointing or touching of the gun to M.L.G.’s head combined to create a repeated course of unwanted conduct by R.W. causing M.L.G. alarm; thus satisfying the statute’s definition of “stalking.”  R.W. appealed.

Held: Reversed and remanded with instruction to vacate order of protection.
Under § 455.010(13), RSMo, stalking occurs when “any person purposely and repeatedly engages in an unwanted course of conduct that causes alarm to another person when it is reasonable in that person’s situation to have been alarmed by the conduct.” The Eastern District found that it was undisputed that R.W. had engaged in multiple acts of unwanted conduct towards M.L.G. during the confrontation, but joined decisions of the Southern and Western District Courts of Appeal in holding that multiple acts occurring during a single incident were insufficient to support a full order of protection for stalking.

No abuse of discretion in Missouri Merchandising Practices Act attorney’s fee lodestar award of $3,087,320 and multiplier of two (bringing total fee award to $6,174,640). Courts should consider different factors from those in lodestar analysis in determining whether multiplier is appropriate; including (1) the contingency nature of the fee agreement; (2) preclusion of counsel from accepting less risky employment; and (3) the delayed to class counsel’s other work. Berry, et al., v. Volkwagen Group of America, Inc., No. 92770 (Mo. Banc, April 9, 2013), Draper, J.

Darren Berry filed suit against Volkswagen Group of America, Inc. (“Volkswagen”), alleging violation of the Missouri Merchandising Practices Act (“MMPA”) in that certain Volkswagen vehicles contained defective window regulators. Berry sought certification of a nationwide class-action, but only a class of Missouri owners and lessors of Volkswagen vehicles. (the “Class”). Class and Volkwagen engaged in extensive discovery. Shortly before trial, nearly five years after suit was filed, the Class and Volkswagen settled. Under the terms of the settlement, Volkswagen owners and lessors who had already repaired the window regulators were entitled to reimbursement plus $75 for each incident; those who had not repaired the window regulator were notified that they could have it repaired without cost at an authorized dealer within 90 days, and were also paid $75. Following approval of the settlement, notice of the settlement was published in Missouri newspapers and approximately 22,000 claim notices were successfully mailed. Only 130 valid claims were made; requiring Volkswagen to pay out at total of $125,261.00. The trial court awarded, inter alia, Class counsel awarded lodestar amount (number of hours reasonably expended multiplied by reasonable hourly rate in the community) of attorney’s fees of $3,087,320, and applied a multiplier of 2.0 to the loadstar amount. Volkswagen appealed.

Held: Affirmed and remanded for determination of attorney’s fees on appeal.
The five-judge Court’s decision reiterated that a trial court is “deemed an expert at fashioning an award of attorneys’ fees.” As to the lodestar amount, the Court listed relevant factors as (1) the rates customarily charged by the attorneys involved in the case and by other attorneys in the community for similar services; (2) the number of hours reasonably expended in the litigation; (3) the nature and character of the services rendered; (4) the degree of professional ability required; (5) the nature and importance of the subject matter; (6) the amount involved or the result obtained; and (7) the vigor of the opposition. The Court also reaffirmed that fee awards could exceed the relief obtained and noted the possibility that the “amount of the verdict or judgment may have little bearing on the amount of attorneys’ fees.”  The Court found that, although Class counsel did not obtain nationwide certification, they protected class members “from errors made by Volkswagen,” the case involved a novel problem and required skill to litigate, was of significant duration (5 years) and noted “the paternalistic legislation that authorized attorneys’ fees.”  It therefore found no abuse of discretion as to the lodestar amount awarded.

As to the multiplier, the Court declined to adopt the United States Supreme Court’s guidelines for multipliers in federal cases in Perdue v. Kenny A. ex rel. Winn, 130 S.Ct. 1662 (2010); although, the Court did adopt the Perdue court’s admonition that trial courts “should avoid awarding a multiplier based upon facts considered in its initial determination.”  Although it determined that the trial court did so as to four of the seven factors it considered in arriving at its 2.0 multiplier, the Court found no abuse of discretion in applying the multiplier because (1) “the fee to be received by class counsel was always contingent”; (2) “[t]aking this case precluded class counsel from accepting other employment that would have been less risky”; and (3) [t]he time required by the demands of preparing this cause for trial delayed work on class counsel’s other work.”  The Court found Class counsel entitled to attorney’s fees in defending the appeal and remanded to the trial court for determination of the same.

Partial dissent:
  Judge Stith dissented as to the trial court’s method of arriving at the lodestar fee amount and its multiplier. First, Judge Stith found the record bare of evidence supporting the trial court’s determination that the hourly fee (as opposed to the hours expended ) were reasonable. Further, Judge Stith found the trial court’s findings suggested that it simply re-used the traditional lodestar factors as the basis to enhance the lodestar with a multiplier; rather than considering additional factors. Judge Stith also disapproved of the trial court’s decision to ignore the actual benefit to the class members, and would evaluate both the potential and actual recovery in determining that appropriate fee.

Taxicab drivers were “employees” where the cab company owned the vehicles, trained drivers, directed drivers through use of its dispatch system and employed them full-time. MCHR awards for violations of civil rights in administrative actions are not limited to a portion of awards for emotional distress and humiliation; but MCHR lacks statutory authority to award punitive damages in administrative actions. State of Missouri ex rel., Sir v. Gateway Taxi Management Company d/b/a Laclede Cab Company, et al., Nos. 98703 & 98715 (Mo. App. E.D., April 16, 2013), Crane, J.

The Attorney General of Missouri filed an administrative complaint before the Missouri Commission on Human Rights (“MCHR”) on behalf of Anatoly Sir (“Sir”) against Gateway Taxi Management Company d/b/a Laclede Cab Company (“Laclede”), alleging disability discrimination of the Missouri Human Rights Act (“MHRA”). Sir, a stroke victim, answered an advertisement by Laclede for an open taxicab driver position, but during his interview with Laclede’s president, he was observed to have limited mobility of his left arm and stumbled. Laclede’s president indicated he would not hire complainant because of his prior stroke.

Before the MCHR, Laclede argued that as a taxicab driver, Sir was not an “employee” under the MHRA. Laclede owned cabs bearing its name which it leased to drivers, obtained permits for its drivers, and provided liability insurance, vehicle maintenance, and charge system for payment of fees and a radio dispatch system informing drivers of customer locations. Drivers were responsible for paying leasing fees, but kept all fares and tips over the fee paid to Laclede. Drivers also paid for gas and cleaned the cabs. Laclede advertised openings for taxicab driver positions. Laclede required applicants to meet a number of standards and undergo an interview before being hired. Drivers signed an independent contractor lease agreement and underwent training and certification required by Laclede before beginning driving. On these facts, the MCHR found that Sir was an employee, and his disability was a contributing factor in his termination. It awarded Sir damages for emotional distress and deprivation of civil rights, but no back-pay or punitive damages. Both Sir and Laclede appealed the MCHR’s decision first to circuit court, then to the Eastern District Court of Appeals.

Held: Affirmed
. The Eastern District followed the Missouri Supreme Court’s decision in Howard v. City of Kansas City, 332 S.W.3d 772 (Mo. banc 2011) in rejecting cases applying the common-law agency tests used in Worker’s Compensation cases and in determining employer-employee relationships under the Internal Revenue Code; applying instead a dictionary definition of employee. The court affirmed the MCHR’s finding that Laclede’s drivers were “employee” under the MHRA because Laclede owned the cabs, trained drivers, directed drivers through use of its dispatch system, and was a full-time position. It gave no weight to the “independent contractor” agreement Laclede and employees signed. The court also distinguished the “means an manner” test used by cases interpreting the National Labor Relations Act finding that Missouri courts placed more emphasis on the ownership of vehicles and that drivers were integral to generating revenue. As to the damage award, the court rejected Laclede’s argument that monetary awards for violations of civil rights was limited to a ration of an award for emotional distress and humiliation.

Sir also appealed on the failure of the MCHR to award him lost-pay and punitive damages. Because Sir had not addressed these requests for lost-pay to the MCHR, the court found that Sir had failed to preserve this argument on appeal. Finally, the court found that the MCHR had no statutory authority to award punitive damages in administrative proceedings.

Director of Department of Social Services need not make specific findings as to each step of Medicaid regulation’s disability analysis in written findings on claimant’s eligibility for MO HealthNet for the Aged Blind and Disabled benefits. Lester v. Department of Social Services, Family Support Division, No. 32457 (Mo. App. S.D., January 16, 2014), Bates, J.

Tambra Lester applied for MO HealthNet for the Aged, Blind and Disabled (“MHABD”) benefits following an injury and the development of pain and stiffness in her back, neck, ankle, headaches, limited mobility and depression. MHABD benefits are part of the federal-state program providing assistance to needy persons under Title XIX of the Social Security Act and are administered by the Missouri Department of Social Services, Division of Family Services (“DFS”). Federal Medicaid regulation 20 C.F.R. § 404.1520 utilizes a five-step analysis to determine disability. Following a hearing, the Director of DFS determined that Lester was ineligible for MHABD benefits because she was not permanently and totally disabled. The Director’s written decision did not make separate specific findings on each of the five steps outlined in the federal regulation. Lester appealed, arguing, inter alia, that the Director had erred in failing to make specific findings as to each of the five steps in determining whether Lester was “disabled.”

Held:  Affirmed.
The Southern District recognized that federal courts require federal fact-finders to make specific factual findings in applying 20 C.F.R. § 404.1520. See, e.g. Groeper v. Sullivan, 932 F.2d 1234, 1238-39 (8th Cir. 1991). However, the Court found that, although DFS cannot utilize a methodology to determine eligibility for services that are more restrictive than those used by the federal government, there was no authority for the proposition that State fact-finders are required to make such specific factual findings when applying the regulation. Instead, the Court recited that Missouri law requires administrative fact-finders to include only “a concise statement of the findings on which the agency bases its order[,]” (see § 536.090, RSMo), and enable a court to review such findings “intelligently and ascertain if the facts afford a reasonable basis for the order[.]”  Because the court was able to determine from the Director’s other findings the basis for his decisions relating to each of the required steps, it affirmed the Director’s decision.

Editor’s Note:
The appellate court’s opinion discussed several additional points raised by Appellant not summarized.

Breach of warranty is not a per se “unfair practice” under the Missouri Merchandising Practices Act. Jackson v. Hazelrigg Automotive Service Center, Inc., No. 32526 (Mo. App. S.D., January 27, 2014), Bates, J.

Sandy Jackson owned a 1978 Cadillac Coupe De Ville which she brought to Hazelrigg Automotive Service Center, Inc. (“Hazelrigg”) for an engine overhaul in preparation for a trip to Oregon. During its overhaul, Hazelrigg did not replace the carburetor. “[O]ne Full year, 12,000 mile warranty” was written on the face of the Jackson’s invoice. During her trip to Oregon, Jackson experienced poor gas mileage, engine noise and excessive oil consumption. Jackson had an Oregon mechanic inspect the car, who ultimately rebuilt the carburetor and made other repairs to the car. Jackson filed suit against Hazelrigg for breach of warranty and violations of the Missouri Merchandising Practices Act (“MMPA”). The trial court awarded Jackson damages against Hazelrigg based on breach of warranty, but denied recovery under the MMPA. Jackson appealed, arguing that, because Hazelrigg violated its own warranty, it necessarily engaged in an “unfair practice” under the MMPA.

Held: Affirmed.
Addressing Jackson’s MMPA argument, the Southern District noted that the MMPA contains no specific definition of deceptive practices or fraud, but leaves such determinations as questions of fact for the trial court. It thus rejected Jackson’s argument that, having found a breach of warranty, the trial court was required as a matter of law to conclude that Hazelrigg had also violated the MMPA. Because the court found no evidence to support a finding that Hazelrigg engaged in a deceptive or fraudulent practice, it affirmed the trial court’s judgment.

Editor’s Note
  The appellate court’s opinion discussed several additional points raised by Appellant not summarized; including the perils of late 70s automotive technology.