D&O Perspectives on Coronavirus: Part 5

Kevin LaCroix, Carl Metzger, and Rob Yellen convene for Part 5 of their discussion on D&O Perspectives on Coronavirus. These speakers continue to look at possible effects of COVID-19 from a variety of D&O perspectives. This recording is part of the ongoing PLUS series PL Perspectives on Coronavirus—past recordings are here on the PLUS Blog, and stay tuned for more discussions to be posted in the coming weeks.

If you would like to hear more, Kevin LaCroix will be moderating a panel at this year’s PLUS Conference with Rob Yellen, on D&O Underwriting in an Era of Surging Bankruptcies. You can register for the 2020 PLUS Conference here.

Listen here to D&O Perspectives on Coronavirus, Part 5:



Kevin LaCroix, Executive Vice President at RT ProExec

Kevin LaCroix is an Executive Vice President at RT ProExec, Beachwood, Ohio, a division of R-T Specialty, LLC. RT ProExec is an insurance intermediary focused exclusively on management liability issues. Kevin is also the author of the Internet weblog, The D&O Diary, which the New York Times called “influential” and the Wall Street Journal described as “widely followed.” Kevin has been involved in directors’ and officers’ liability insurance issues for more than 35 years.


Carl Metzger, Partner and Chair of Risk Management & Insurance at Goodwin Proctor

Carl Metzger is a partner in Goodwin’s Financial Industry and Business Litigation practices and Chair of the firm’s Risk Management & Insurance practice and Chair of the firm’s Partnership Committee. His clients include both public and private companies, major insurance carriers and brokerages, private equity and venture capital firms and non-profit and educational institutions.

Rob Yellen

Rob Yellen, Executive Vice President, D&O and Fiduciary Liability Product Leader, FINEX at Willis Towers Watson

With over 28 years of Financial Lines industry experience, Rob Yellen is a respected leader in the management and professional liability space. He currently works with Willis Towers Watson, FINEX NA brokers and claims advocates to identify and track developments in risk, coverage and markets, and with our business partners to develop innovative, best-in-class strategies and solutions. Rob joined Willis Towers Watson in 2015 from AIG where, during his 14-year tenure, he served in several key leadership roles–including Chief Underwriting Officer, Financial Lines, U.S. and Canada and, most recently, Head of Product Development for Financial Lines–globally and for the Americas Region.

The Supreme Court Is Poised to Take A Right Turn: What Does This Mean for Professional Liability?

Chadwick photo

Robert G. Chadwick, Jr.
Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC

Robert Chadwick is a Managing Member of the law firm of Seltzer, Chadwick, Soefje & Ladik, PLLC. He has more than 36 years of experience representing management, fiduciaries and professionals in the areas of labor and employment law, ERISA investigations and litigation, and professional liability. He is Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization.

The 2020-2021 term of the Supreme Court began with a bang on October 5, 2020. In a published statement, joined by Justice Samuel Alito, Justice Clarence Thomas took aim at the Court’s decision in 2015 in Obergefell v. Hodges upholding the right to same-sex marriage. He blasted the decision for “leaving those with religious objections [to same sex-marriage] in the lurch” and creating “ruinous consequences for religious liberty.” This bold language captured headlines across the country.

The timing and target of the statement leave little doubt about Justice Thomas’ motivation. The timing of the statement was the beginning of the first Supreme Court term in 27 years in which Justice Ruth Bader Ginsburg will not hold a seat on the Court. Barring unforeseen circumstances, Justice Amy Coney Barrett will join the Court later this year. Like Justice Thomas, Justice Barrett has made no secret of equating her opinions with those of late Justice Antonin Scalia, a former member of the Court’s conservative wing.

The target of the statement was one of several 5-4 decisions in the past decade in which the conservative wing of the Court found itself in the minority. Two of the Justices who joined the majority – Justices Anthony Kennedy and Ginsburg – are no longer on the Court. Even though the Obergefell decision is over five years old, the anticipated composition of the Court has never been better for Justice Thomas to renew the debate over whether it was correctly decided.

Viewed in this context, Justice Thomas reads nothing like gratuitous recalcitrance over a perceived wrong past decision by the Court. Rather, it reads more like a confident assertion of power by a Justice sitting in the driver’s seat as the Court makes a right turn.

So, what does this right turn mean for the professional liability insurance industry?  As to issues which may indirectly impact the industry, there are at least (1) four cases before the Court for this term, (2) four certiorari petitions pending before the Court for this term, and (3) four areas of dispute amongst lower courts likely be decided by the Supreme Court in the near future. Time will tell, therefore, as to the extent to which the Court’s composition will change the professional liability landscape.

2020-2021 CASES

1. Is the Affordable Care Act Constitutional?

This is the second time this question has been presented to the Court. In 2012 the Court was presented with two questions in National Federation of Independent Businesses v. Sebelius: (1) Whether the individual mandate of the Affordable Care Act (“ACA”) was within the constitutional powers of Congress? (2) If the answer to the first question was no, whether the ACA could survive without the individual mandate?

In another 5-4 decision, Chief Justice John Roberts joined Justices Ginsburg, Breyer, Kagan, Sotomayor in upholding the constitutionality of the individual mandate. Their reasoning was the penalty for not procuring health insurance operated as a tax, and within the constitutional powers provided Congress. By upholding the constitutionality of the individual mandate, the Court was able to avoid the question of whether the ACA as a whole was unconstitutional.  

Following the 2016 election, the ACA was amended in 2017 to reduce the individual mandate penalty to zero. Predictably, this amendment provided new ammunition for challenging the constitutionality of the ACA in court.

Such a challenge is presented in California v. Texas, which will be heard by the Court this term. Following decisions below, this case presents two new questions for the Court not presented in 2012 in Sebelius: (1) Is the individual mandate of the ACA, as amended in 2017, unconstitutional? (2) If the individual mandate is unconstitutional, is the entire Act unconstitutional? Oral arguments regarding these questions will take place on November 10, 2020.

2. Is Monetary Relief Available Under the Federal Trade Commission Act?

The Federal Trade Commission Act empowers the Federal Trade Commission (“FTC”) to prevent unfair methods of competition and unfair or deceptive acts or practice affecting interstate commerce. Section 13(b) of the Act empowers the FTC to seek a permanent injunction to enforce the Act. No language of the Act expressly empowers federal courts to order the restitution of money obtained through illegal activities. For more than 30 years, however, the FTC has sought and obtained monetary damages for consumers under Section 13(b) of the Act.

In AMG Capital Management, LLC v. FTC, a lower federal court found several companies and Scott Tucker acted unlawfully in providing high-interest, short-term loans to consumers. The court ordered both injunctive relief and restitution of $1.3 billion under Section 13(b).  The $1.3 billion dollar order represented the largest litigated judgment ever obtained by the FTC. The Supreme Court granted certiorari on a single question: Does the Federal Trade Commission Act authorize the FTC to sue for monetary relief as restitution to consumers?

3. What is the Scope of Personal Jurisdiction by States Over Non-Resident Defendants?

Ford Motor Company is a Delaware corporation with its principal place of business in Michigan. There is no question the company sells automobiles in all 50 states. The company nevertheless moved to dismiss, for lack of personal jurisdiction, a suit in Montana state court brought on behalf of a Montana resident who died while driving a Ford Explorer. Fords’ motion is predicated upon the long chain of custody of the Ford Explorer, which was (a) assembled in Kentucky, (b) sold by Ford to a dealer in Washington, (c) sold by the dealer to resident of Oregon, and (d) sold by the Oregon resident to the deceased Montana resident. 

Ford’s motion to dismiss was denied by Montana state courts including the Montana Supreme Court. In Ford Motor Company v. Montana Eighth Judicial District, the Supreme Court granted certiorari on a single question relevant to litigation in all 50 states: May a state court properly exercise personal jurisdiction over a non-resident defendant when none of the defendant’s contacts with the state actually caused the harm alleged by the plaintiff? The Court heard oral argument as to this issue on October 7, 2020.

4. Who Decides Whether an Exempted Claim is Arbitrable Under a Contract?

In 2019, the Court was presented with a contract which provided for arbitration of any dispute arising under the contract except for, among other things, actions seeking injunctive relief.  When one of the parties sued in federal court for monetary damages and injunctive relief, the other party filed a motion to compel arbitration arguing only an arbitrator could determine whether the dispute was arbitrable.  The other party maintained this motion was “wholly groundless”, and the federal court and Fifth Circuit agreed. In a unanimous 2018 opinion, the Court in Henry Schein, Inc., et al v. Archer & White Sales, Inc. remanded the case to the Fifth Circuit to determine whether the arbitration contract in fact delegated the arbitrability question to an arbitrator.

On remand, the Fifth Circuit determined only the arbitration contract did not “clearly and unmistakably” delegate the question of arbitrability to an arbitrator. The Supreme Court again granted certiorari on a single question: Does an arbitration agreement that exempts certain claims from arbitration negate an otherwise clear and unmistakable delegation of arbitrability questions to an arbitrator?  Oral arguments regarding this question will take place on December 8, 2020.

2020-2021 PETITIONS

1. Do State Anti-SLAPP Statutes Apply in Federal Diversity Cases?

There is presently a split amongst the Circuits regarding this question. The First, Second, and Ninth Circuits say state Anti-SLAPP (Strategic Litigation Against Public Participation) statutes do apply in diversity cases. The Fifth, Tenth, Eleventh and District of Columbia say state Anti-SLAPP statutes do not apply in federal diversity cases. The Petition in Retzlaff v. Van Dyke, asks the Court to resolve this split.  

2. What Showing Is Required to Recover Damages For Sexual Harassment Under Title IX?

In Davis v. Monroe County Board of Education, the Supreme Court held that, under Title IX of the Federal Education Amendments, school boards are liable for failing to stop student-on-student sexual harassment under certain circumstances. A school is “properly held liable in damages only where [it is] deliberately indifferent to sexual harassment, of which [it] has actual knowledge, that is so severe, pervasive, and objectively offensive that it can be said to deprive the victims of access to the educational opportunities or benefits provided by the school.”

The Sixth and Eighth Circuits hold a plaintiff must show post-actual-knowledge of further harassment in order to state a claim for damages under Title IX. The First, Tenth and Eleventh Circuits hold no such showing is required to recover damages. The Petition in Kollaritsch v. Michigan State University asks the Court to resolve this conflict among the Circuits.   

3. Whether the Employee Retirement Income Security Act Imposes a Duty on a Plan Fiduciary Who is Also a Corporate Officer to Use Inside Information for the Benefit of Plan Participants?

This is the question presented by the Petition in Retirement Plans of IBM v. Jander.

4. Should A Greater Burden Be Imposed Under Title VII to Show Accommodation Of an Employee’s Religious Exercise Would Be an “Undue Hardship?”

In Transworld Airlines, Inc. v. Hardison, the Supreme Court stated that, under Title VII of the Civil Rights Act of 1964, employers suffer “undue hardship” in accommodating an employee’s religious exercise whenever doing so would require them “to bear more than a de minimis cost.” The Petition in Small v. Memphis, Light, Gas & Water asks to Court to overturn its prior ruling.        


1. What Standard Determines A Joint Employment Relationship Under the FLSA?

In 2018, the Court denied certiorari in Hall v. DirecTV to resolve a split amongst federal circuits as to the proper standard for determining whether a joint employment relationship exists for purposes of liability under the Fair Labor Standards Act. In Hall v. DirecTV, the Fourth Circuit focused on the relationship between two or more alleged joint employers, whereas other circuits focus on the putative employer’s relationship to an employee. At some point, this split will prove to be unsustainable and will need to be resolved by the Supreme Court.

2. When Should Expert Testimony Be Deemed Inadmissible?

In Daubert v. Merrell Dow Pharmaceuticals, the Supreme Court made plain that, as part of their gatekeeping function, judges must ensure that expert testimony “both rests on a reliable foundation and is relevant to the task at hand.” The federal circuit courts, however, are split on two issues as to the gatekeeping function:

(a) When Should the Gatekeeping Function Be Performed in a Class Action?

The Second, Third, Fifth, Fifth and Seventh Circuits all require this function be performed at the class certification stage. The Eight and Ninth Circuits have decided this function need not be performed at the class certification stage. Only the Supreme Court can resolve this split.

(b) What Function does the Gatekeeper Role Serve?

As the gatekeeper, a federal court is charged with determining the admissibility of expert testimony. If faults exist in the expert’s methodology, the testimony should be deemed inadmissible. This, indeed, is the view of the Second, Third, Sixth and Tenth Circuits. Decisions from the Seventh, Eighth and Ninth Circuits, however, have determined such flaws go the weight of such evidence, not their admissibility. This split was presented to the Supreme Court in 2014 in SQM North America Corp. v. Pomona, but the Supreme court denied certiorari. As long as this split exists, the Court will likely be asked to revisit it in the future.

3. Who Determines Class Arbitrability When An Arbitration Agreement Delegates This Determination to An Arbitrator?

All circuits which have addressed the issue have said that, absent a clause delegating the responsibility to an arbitrator, class arbitrability is a gateway matter for the courts. However, when the arbitration agreement purports to delegate this responsibility to an arbitrator either expressly or impliedly by incorporating AAA or other rules with a delegation provision, the federal circuits are split. The Third, Fourth, Fifth, Sixth and Eighth Circuits maintain that class arbitrability is a matter for the courts. The Second, Tenth and Eleventh Circuits maintain delegation clauses should be respected by the courts. This split begs for resolution by the high court.


For those interested in following the Supreme Court, there is an excellent blog at  www.scotusblog.com. Audio recordings of oral arguments before the Court are also available on the Court’s website (https://www.supremecourt.gov/oral_arguments/argument_audio/2020) at the end of each argument week.

PLUS Strives to be a Model of Inclusiveness

A message from PLUS President Todd Greeley

PLUS has a long history of being a forward-looking organization that values all members and different opinions. It has encouraged diverse thoughts and respects all views. It strives to ensure a welcoming environment in all that is does.  And it has and remains filled with passionate leaders who care about their fellow members, co-workers and customers. This is being tested even more so today as the spotlight shines brightly on the continued need for change and social justice in the United States and around the world. PLUS is committed to fulfilling its core mission in a way that will help our industry and our communities address these important issues. To that end, I’m excited to outline in this post some recent changes to PLUS’s highly successful Leadership And Mentorship Program (LAMP) that we think will enhance PLUS’s contribution to driving positive change.

Since the formation and adoption of PLUS’s first Diversity & Inclusion (D&I) Committee and D&I plan, PLUS has continued to advance its D&I efforts, most notably with its LAMP initiative. LAMP provides members from traditionally underrepresented groups in the PL industry with leadership development, along with mentorships and opportunities to engage with PLUS leaders. Entering its fourth cohort, the program continues to build momentum. One of the successes about which we are most proud is the number of LAMP “alumni” who are now leaders and key contributors to PLUS. This diversity within PLUS’s volunteer leadership makes us even stronger. But again, we know this is just a part of PLUS’s continuing path toward greater equality, and we recently decided to make a change that we believe will move us even further down that path.

You likely have seen that the PLUS Foundation recently changed its mission. The PLUS Foundation has changed to meet the needs of its members and the industry many times in its relatively short lifetime. Now it is changing again to meet our industry’s evolving priorities. Seeing the need for greater workforce development and ensuring opportunities for all, the PLUS Foundation will shift its focus to advancing tomorrow’s workforce through outreach, education, mentoring and giving back. In doing so, it will support individuals and groups that face obstacles to advancing their career and that have been traditionally underrepresented in the PL industry, particularly in senior management roles.

In light of the Foundation’s new mission and focus, and after much deliberation, PLUS has decided to transition LAMP from PLUS to the PLUS Foundation.  We believe doing this will better serve the needs and goals of LAMP and its fantastic participants. We also think LAMP fits perfectly alongside the Foundation’s successful Women’s Leadership Network (WLN), which provides thought leadership, mentorship and education to advance women in the PL industry. This will allow the Foundation to utilize its expertise and expand the focus on this already successful program to benefit LAMP. To aid in the LAMP transition, and to provide continued counsel for the Foundation Board, the Foundation is also forming a D&I Advisory Committee. This committee will include several past LAMP participants.

This shift of LAMP to the Foundation does not mean that PLUS is diminishing its effort on equality. In fact, it is quite the opposite. We will be heightening of level of commitment by forming a Board level standing committee that will focus on ensuring PLUS looks through the equity lens in all that it does. We recognize our size in the landscape of this large industry, and that our corporate partners have far more and resources to wield in moving the industry in all matters around diversity and inclusion. As a result, we feel our most impactful option is to focus our resources on the PLUS organization, members, volunteers, staff, events, and offerings. This focus will allow PLUS to lead by example, while also expanding its opportunities for all to be heard, have access to, and participate equally in PLUS.

No doubt these are challenging times, but also opportunities for great leadership. PLUS accepts that challenge and will lead by ensuring broad perspectives are considered in every facet of the organization. This clear focus and the actions that follow will hopefully be a model for others.  Thank you for the opportunity to serve you over the last year and I look forward to being a part of this effort to ensure equality and provide inclusive opportunities for all in our industry.