EMERSON & ELDER UPDATES FOR YOU

Are Your Images Protected?

In Virgina, in the matter of Brammer v. Violent Hues Productions, a company used a photographer’s work without his permission for an advertisement on its website.
 
In general, a photograph is copyrightable because it is the personal reaction of an individual upon nature. And personality always contains something unique. It expresses its singularity even in handwriting, and a very modest grade of art has in it something irreducible, which is one man’s alone.
 
However, the Brammer court held that the low level of creativity in the work found that the image was fair use as Violent Hues use of the image was different than Brammer’s use. The Court goes on to list other factors that were used to eventually decide that Violent Hues use was not copyright infringement.
 
This decision goes against the majority and should only be taken as informative at this point as it has been appealed. However, please be aware of what you post online as if such images are not protected properly those images could be considered fair use.
 
“It would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the worth of pictorial illustrations, outside of the narrowest and most obvious limits.”
 

Forum Selection Clauses - When Do They Apply?

In Kadiyala v. Pupke, 2017 WL 2350454 (N.D. Ill. May 30, 2017), the court held that an agreement’s forum selection clause controlled the forum of the lawsuit due to the dispute arising from the agreement and even though not all of the parties involved in the dispute were parties to the agreement.

Please note, when drafting any type of agreement, it is best to have a favorable forum for the types of disputes that you are predicting to arise under your business practices; therefore, more attention may be needed to the forum selection clause within your controlling agreement.

Are Environmental Hazards Covered Under Your CGL Policy?

On July 18, 2018, the Northern District of Indiana issued its opinion in Great American E & S Insurance Co. v. Coupled Products, LLC, 2018 WL 3475398 (N.D. Ind. 2018), regarding whether coverage exists for a Notice of Violation (“NOV”) and Proposed Agreed Order (“PAO”) from the Indiana Department of Environmental Management (“IDEM”) for an abandoned electroplating facility.
 
Briefly, Coupled Products, LLC’s (“Coupled”) tenant abandoned its electroplating operation; Coupled received a NOV and POV from IDEM demanding remediation.  Coupled then sought coverage under CGL policies issued to it by Great American E & S Insurance Co. (“Great American”) over a five year period.  Great American agreed to defend the claims under a reservation of rights, and then filed a motion for summary judgment.
 
The NOV cited Coupled and its former tenant for numerous violations under the Resource Conservation and Recovery Act (“RCRA”) for improper storage of hazardous wastes. 
 
Great American argued that it did not have any coverage obligations because there was no “occurrence” and no “damage” to a third party, rather the costs were regulatory compliance costs which are a cost of doing business, and were to prevent future harm.  Great American relied upon the Indiana Supreme Court decision in Cinergy Corp. v. Associated Electric and Gas Insurance Services, Ltd., 865 N.E. 2d 571, 583 (Ind. 2007), where the court held that there was no coverage for a federal lawsuit alleging that a number of power companies failed to properly install pollution control technology to bring their plants into compliance with the Clean Air Act.  The Indiana Supreme Court found that the federal lawsuit sought to require the power companies to prevent future environmental harm and thus there was no “occurrence”.
 
Coupled argued that it was being ordered to remediate an existing situation and not bring the facility into compliance to prevent future harm, and that Cinergy Corp. thus did not apply.  Coupled also argued that Cinergy Corp. ignores the interplay of a third-party lessor creating the environmental hazard, as in this case.  Coupled argued that the Indiana Court of Appeals decision of Hartford v. Dana Corp., 690 N.E. 2d 285 (Ind. Ct. App. 1997), where a manufacturer of automotive components with facilities across the country was subject to environmental contamination actions by EPA and third parties, applied.  The Court of Appeals there concluded that Dana’s carriers were obligated to cover the cost of containment to prevent further release of hazardous substances.
 
The court did not follow either Cinergy Corp. or Dana Corp., although it agreed with Coupled that the PAO was for an existing situation, not to prevent future harm.  Thus, the court found covered damages here, but noted that while the Dana Corp. line of cases “seemingly support the position of Coupled”, Coupled is seeking coverage for remediation of waste on its own property and requested additional briefing.  The court specifically referred to the owned property exclusion that was mentioned by Great American but not discussed, and stated, however, that there is a line of cases suggesting that the owned property exclusion is “obsolete” where an insured is seeking coverage for costs of liability imposed upon it by a state agency.  The court concluded that it is “hard-pressed” to hold on the briefing presented that the policies exclude coverage.  The court ordered either a renewed motion for summary judgment or additional briefing.
 
This decision raises some concern as this federal court essentially avoided state substantive law, and from a state supreme court, nonetheless, set forth in Cinergy Corp.

For more information or if we can be of any assistance, please contact Joe Welch at (312) 339‐5601 or joe@emersonelder.com.