An internet search on the phrase "litigation funding" returns thousands of hits.  There are an incredible number of companies and persons "out there" who will buy equity shares in a lawsuit.  Hedge funds are actively seeking opportunities to invest in lawsuits.

Putting aside the concerns about champerty and maintenance, I wonder whether defense counsel are doing enough to work on this issue in trials.  Assuming that these websites really are engaged in the practice they describe, shouldn't defense counsel include questions related to investments in lawsuits, in their voir dire of the jury panel?

Obviously if potential jurors owned stock in the defendant company, they would be disqualified.  Equity ownership in a chose in action surely is relevant to counsel's evaluation of a prospective juror's impartiality.  Even if the prospective juror is not invested in this particular lawsuit, the question is important.  If the investment is in the litigation generally, or in other plaintiffs' cases within the same litigation, then a jury verdict in favor of the plaintiff would likely benefit the juror by increasing the settlement value of the other cases.  Even investments in unrelated personal injury litigation, the investments have the potential to prejudice the juror against the defense.  For instance, if the juror has investments in another personal injury litigation, returning a large verdict in the present case could benefit the investment by making the company defending against the juror's chose in action believe that trying cases in the particular venue was too dangerous to risk, and those claims should be settled.

Certainly, the existence and extent of investment by others in a lawsuit should be a worthy line of discovery to conduct in mass tort litigation.

Are we doing enough to stop this insanity?

This article was first posted at the author's website on May 8th, 2012: http://schachtmanlaw.com/litigation-funding/

When Consumer Product Safety Commissioner Thomas Moore retired in October 2011 after serving three terms, the Consumer Product Safety Commission (CPSC) was split evenly along party lines.   There were two republicans, Nancy Nord and Anne Northup, and two democrats, Robert Adler and Chairman Inez Tenenbaum.  Now it seems President Obama's nomination of democrat Marietta Robinson will again give democrats the edge. 

Marietta Robinson has been a trial lawyer in Michigan for thirty three years, representing both plaintiffs and defendants.   Additionally, for eight years Robinson served as the federally appointed trustee of the Dalkon Shield Trust, a trust that paid billions to women who used the Dalkon Shield contraceptive.  Robinson threw her hat in the ring for a seat on the Michigan Supreme Court in 2000 and 2002. 

The CPSC works to "protect the public against unreasonable risks of injury associated with consumer products."  CPSC Commissioners are nominated by the President and confirmed by the Senate.  Robinson told the Washington Post that she was honored to be nominated and hoped to get through Senate confirmation quickly.    

(originally posted on www.masstortsstateoftheart.com on October 4, 2011)

The Restatement (Third) of Torts shrivels duty into an if-then statement executable by even obsolete jurists: if an actor's conduct creates a risk of physical harm then he owes a duty to exercise reasonable care.

Duty supposedly needed a new and simple algorithm because opinions turning on the question of duty were seen as incoherent and generally the result of a court having invaded the province of the fact finder (jury, hereafter). Foreseeability, the reporters decided, isn't the sort of legal or policy question judges decide; it's fact- and case-specific, and thus something lay people relying upon common sense and communal norms of behavior ought to decide.

So that judges need not be completely replaced by computers, the Restatement's reporters added that in exceptional cases a court may find that, due to some other explicitly stated policy, a defendant may not owe a duty. Furthermore, a court may on rare occasions properly find that reasonable people could not conclude that an outcome was foreseeable and so hold that the duty auto-generated by the new formulation had not been breached. Very simple indeed. But how's it working out?

If Nebraska (an early adopter of the Restatement's new duty formulation) is any indication the answer is "same results; different justification". Does a landlord who allows a renter to keep a pit bull owe a duty to a third party bitten by the dog? Sure; but wasn't foreseeable so defendant wins. See Monica S. v. Nguyen. Does the owner of a road grader that can only be turned off while it's still in gear owe a duty to a mechanic called to fix it who twice accidentally bumps the ignition button causing it to start up and run over him? Sure; but wasn't foreseeable so defendant wins. See Riggs v. Nickel.

What's going on? Look at the gold disk in my graphic. It contains all the acts, however remote, that created the risk of an injury that came to pass (e.g. the risk the road grader owner's great grandmother created by having his grandfather). American courts have pretty much uniformly taken the position that whatever risk the jury is to focus on should not be too remote. Whether because they recognized that "security is mostly a superstition" or that "a man sits as many risks as he runs" courts have in the past made essentially policy decisions to the effect that only a subset of all risks, those that aren't insubstantial, may be subjected to a foreseeability analysis. It's only for that subset of substantial risks that an actor assumes a duty and only for those risks that a jury may find to have been foreseeable can he be made liable. Now, in Nebraska (and Iowa), courts are finding a duty for every risk but then holding that whatever risks they would have formerly found to have been insubstantial are instead simply unforeseeable.

Rather than deciding the limits of tort liability those courts that have adopted the Third Restatement's concept of duty are now engaged in the business of deciding the limits of human foresight. Hardly sensible and no improvement over the old rule: "you're under no duty to do the impossible i.e. guard against every 1-in-a-million risk you create". Oh, well, at least it's frustrating what I suspect was the real purpose of the new duty formulation: to backdoor the Precautionary Principle into the law of torts.

Originally posted at David Oliver’s blog site Mass Torts State of the Art, April 5, 2011. Republished with permission.

The U.S. Supreme Court is getting set to hear the challenge to a federal court of appeals decision allowing several states to pursue a public nuisance suit against various utilities for their alleged greenhouse gas emissions. See American Electric Power Co. v. Connecticut, No. 10-174 (U.S. certiorari petition granted 12/6/10).  Last week the federal government weighed in and asked the Court to overturn the Second Circuit's decision in this public nuisance suit against American Electric Power Co. and other utilities for their greenhouse gas emissions, but on relatively narrow grounds. The brief filed by the Acting Solicitor General argues that the plaintiffs lacked “prudential standing” and that their suit should therefore be dismissed. One central issue in the case is whether the EPA will be the primary regulator of greenhouse gas emissions or whether private parties will be permitted to go directly to court. Should a single judge set emissions standards for regulated utilities across the country — or, as here, for just that subset of utilities that the plaintiffs have arbitrarily chosen to sue? Judges in subsequent cases could set different standards for other utilities or industries, or conflicting standards for these same utilities. A second issue is whether controlling power plant emissions' alleged effects on the climate is a political question beyond the reach of the courts. The government's current position is that if plaintiffs' overall theory is correct, that means that virtually every person, organization, company, or government across the globe emits greenhouse gases, and also virtually every one of them will sustain climate-change-related injuries. Principles of prudential standing do not permit courts to adjudicate such generalized grievances absent specific statutory authorization, said the SG.

This topic will be featured at the breakout session for the Mass Torts & Class Actions SLG at this year's DRI Product Liability Conference in New Orleans. We'd be interested to hear you reaction to the briefs, including the papers from amici. DRI's amicus brief stresses to the Supreme Court that it should reverse the Second Circuit's decision in order to bring fairness, consistency and predictability to public nuisance litigation seeking to redress alleged climate change injuries. Although DRI acknowledges in its brief that the respondents' goal of reducing the threat of possible global climate change is laudable, pursuing a federal common law public nuisance action against a handful of arbitrarily selected energy-generating targets is an improper use of the courts in achieving that end.

On January 27, 2011, Wisconsin Governor Scott Walker signed into law a significant tort reform statute.  The bill, introduced at Governor Walker’s request, passed both houses of the state legislature during special session. 

The legislation covers a wide range of issues.  Among the most far-reaching could be its alteration of Wisconsin’s standard for admission of expert testimony.  The state has had one of the most liberal standards in the nation, focusing almost exclusively on the qualification of the witness.  Wisconsin courts had rejected the Frye and Daubert tests.  The new law adopts an approximation of Daubert.  Expert testimony must now be based upon sufficient facts or data, be the product of reliable principles and methods, and result from the expert’s reliable application of the principles and methods to the facts of the case.  Experts also may not testify if they have any fees contingent on the outcome of the case. 

The bill also legislatively overturns the Wisconsin Supreme Court’s controversial Thomas v. Mallett decision that extended “risk contribution” theory to a product liability case alleging exposure to lead pigment.  The risk contribution doctrine relieved a plaintiff of the burden of proving that a product defendant actually manufactured or sold the specific product alleged to have caused injury.  Under the new statutory scheme, plaintiffs are generally required to prove product identification.  Limited exceptions to product identification are permitted, but only if the plaintiff has joined manufacturers who collectively produced at least 80% of chemically identical products sold in Wisconsin.  In addition to that requirement, the plaintiff must also show that no other lawful process exists to seek redress for the injury, that only the product at issue or a chemically identical product could have caused the injury, and that the defendant sold the product or a chemically identical one during the required time period.  Potential liability under these provisions applies only for products sold within 25 years before the plaintiff’s cause of action accrued. 

One of the other significant changes is the comparative fault scheme for strict liability products actions.  The jury must apportion fault between the plaintiff, the allegedly defective product and the contributory negligence of any other person.   If the plaintiff’s percentage of fault is greater than that of the product, the plaintiff cannot recover from any party responsible for placing the product into the stream of commerce.  If the plaintiff’s percentage is not greater than the product’s, the jury must apportion responsibility for the defect among all defendants alleged to have caused the defect.  The court then multiplies each defendant’s percentage of responsibility for the defect by the percentage of fault attributable to the product, and the result is the defendant’s percentage of liability for damages.  Joint and several liability applies only to defendants for which this final percentage is 51% or more. 

This legislation also adopts statutory criteria for determining whether a product is defective.  A design defect is defined to exist when “the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design” and failure to adopt that alternative design makes the product not reasonably safe.  There is a separate requirement that the defect make the product unreasonably dangerous.   

Other highlights of the bill include: 

• A rebuttable presumption that drug or alcohol intoxication by the injured party was the cause of injury;
• Exclusion of subsequent remedial measures evidence from products cases;
• A 15-year statute of repose for products actions, except in cases of latent disease or when the manufacturer specifies a longer lifetime;
• Application of the medical malpractice statute of limitations and noneconomic damages cap to actions against long-term care providers;
• Adoption of a stricter standard for awarding punitive damages, which are now permitted only if the defendant acted with intent to injure particular persons or with knowledge that the injury was practically certain to result. 

So as we start another year there is some worthwhile reading in the National Center for State Court’s report Examining the Work of State Courts (2008 Data). It is a report on case filings and caseloads in our states, for the last year where complete data was available. As you might imagine the statistical information available from state to state varies. However a number of states keep detailed reports on the types of cases being filed. Some interesting facts emerge.

Reading Table 4, a report on annual new tort filings in state courts from 1999 to 2008 you can see that tort filings were down in 2008 compared to the average tort filings over those 10 years in 25 states. The 2008 filings were more than 20% below the 10 year average in California, Idaho, Kansas, Michigan, Mississippi, Missouri, New Jersey, New York, North Dakota, Ohio, and Texas.

Over all tort filings fell 5 percent in the general jurisdiction courts in 13 states with the most detailed recordkeeping practices.

During 2008 the number of contract filings increased dramatically, a sign of our economic times. North Dakota lead the nation in 2008 in the ratio of incoming contract suits to tort suits. They had 320 tort cases and 19,590 contact cases, a 98% ratio. Kansas had 155,756 contract cases filed to 3,342 tort suits. The farming states weren’t the only ones with this ratio. In New Jersey there were over 9 times as many contact suits filed as tort suits and in Connecticut there were 8.2 times as many contact suits as tort suits. In fact, in 11 states there were better than 8 times as many contract suits filed as tort suits, in 2008.

In the tort arena, in 17 states, with better data compilation systems,  55% of the tort cases were automobile cases. North Carolina leads the list with 69% of their tort filings in 2008 being automobile cases, but with a very low ratio of tort suits, 94 cases per 100,000 of population. That compares to New Jersey where 627 cases per 100,000 populations were filed with 52% of them being auto cases. Connecticut’s new filings show 435 cases per 100,000 in population, with 68% being automobile torts.

Don’t worry about docket delays in New Jersey. They terminated 27% more tort cases in 2008 than were filed. 16 other states joined them in keeping ahead of the tide of tort cases with dispositions.

So if you do Medical Malpractice cases the news isn’t good. During the 10 years measured new filings were down 15% in the seven states which collected that data over the period, Arizona, Connecticut, Mississippi, New Jersey, New York, Rhode Island and Oregon. So where was the best place to have been in 2008? In Kansas, where 7.4% of the new tort cases were classed and medical malpractice followed by Puerto Rico with  6% of the new cases being medical malpractice. If you were in Wisconsin, Connecticut, Oregon or Minnesota doing medical malpractice work, life was tough in 2008 since less than 2% of the tort cases were medical malpractice In fact if you were in Oregon only 49 cases were filed and in Minnesota only 37 were filed.

So what does all this mean? It looks like that data confirms there are fewer tort cases being filed. Historically, when bad economic times hit, tort filings increase and verdicts tick up as well. Whether the data for the last two years, when available, will bear this out remains to be seen. For now its is clear we continue to live in interesting times and hopefully there will be plenty of new, challenging and interesting cases coming our way in the new year.

Originally posted at Litigation from the Trenches.

As I was reading through the November 22, 2010 edition of Missouri Lawyer's Weekly, I came across a Commentary piece regarding the rising costs of litigation. It comes from the perspective of a plaintiff's attorney. I, as someone whose practice has primarily focused on representing insurance companies, have a different take on the issues raised in the commentary. I wanted to use this forum as an opportunity to provide my thoughts on some of the issues raised in the Commentary, hoping to generate a discussion amongst readers on both sides of the aisle.

One of the examples given of the system working in strange ways is a case where mediation had been offered prior to the suit being filed, but then after suit was filed that offer was withdrawn until certain discovery was completed. This may seem strange to a lay person, but in my experience working with insurance companies it is not strange at all. Oftentimes, before a suit is filed the matter is handled by one adjuster, and then once suit is filed, the claim is transferred to a litigation adjuster. Also, the company itself likely has guidelines to follow once suit is filed, which may include the completion of certain discovery and investigation prior to agreeing to mediation. Also, carriers often consider settling cases that have questionable merit prior to suit being filed because they can be closed quickly and cheaply. Once a "questionable" case gets past that point, the more prudent approach is frequently to defend the case vigorously, since that often does cost the carrier less than settling. We can debate for hours on end whether the guidelines themselves create waste in the system, but the fact is the insurance companies have put them in place to protect themselves in resolving claims that have made it all the way to litigation.

To suggest that defense firms "churn" files just to generate fees ignores the reality of the defense assignment generally. Our firm, for example, must defend cases assigned to us pursuant to relatively stringent defense counsel "guidelines" from most of the carriers for whom we work. Although those guidelines differ from carrier to carrier, in general they require us to communicate regularly with the insurance company regarding our strategies, plans and the rationale for any work we expect to do. We submit frequent reports to our clients, alerting them to witnesses whom we might wish to depose and explaining why, and outlining the work we expect to do before we do it. If the carrier thinks we are doing more than is necessary, they are not shy about refusing to authorize the work, because the cost of that work does increase their expense.

I agree with the Commentary’s assessment of trying to resolve claims prior to suit being filed. In the plaintiffs’ cases that I have handled in my career, that is exactly what I try to do. For many of the reasons mentioned in the Commentary and above, it is advantageous to all parties to do so. It keeps costs down, it results in a quicker resolution for your client. That being said, if there is not clear liability, or the damages do not warrant resolution, or there is a coverage dispute, the insurance carrier should not be blamed for having those matters litigated to the full extent. Requiring a Plaintiff to prove their entitlement to an award is central to our system of civil justice. We don’t require them to prove it "beyond a reasonable doubt" like we do for criminal liability, we require them to prove it "by a preponderance of the evidence" or simply that it is "more likely than not" that the Defendant is liable. It is my job as a Defense attorney, on behalf of my clients, to make sure the Plaintiffs meet their burden before being compensated. If that is viewed as "running up the bill" by the Plaintiff's bar, then so be it. I can tell you that it has not been my practice to waste my or anyone's time, whether it be the Plaintiff, my client, or the Court, by filing frivolous motions or propounding unnecessary discovery. That type of behavior can be detrimental not only to the case at hand, but it can also lead you to quickly lose credibility with the Judges and your fellow members of the Bar, which will adversely impact cases you handle in the future.

Finally, I want to point out an area in which I may be in agreement with the Commentary. I would be in favor of a state system of expert disclosure similar to that required by Federal Rule of Civil Procedure 26. I am in favor of expert reports being prepared and disclosed to the opposing party early on in the proceeding. I am in favor of those reports following a certain format, and that certain information be required in that report. I am also in favor of experts being required to disclose their rates for services and prior testimony when providing their reports. It is my opinion that these disclosures allow the parties to make intelligent decisions as to whether to depose the particular expert witness. As the system in Missouri stands now, the only way for an opposing party to learn the opinions of an expert is to take a deposition. The types of disclosures required by Federal Rule 26 do not do away with the ability to take a deposition, but make the decision as to whether a particular deposition is necessary a more intelligent one.   

Laying the blame for the spiraling costs of litigation at the feet of one party (Plaintiffs or Defendants) is not appropriate, as the truth always lies somewhere in the middle. So long as the issues are discussed with civility, which I think was done in the Commentary, and I hope I have done here, we will hopefully all end up with a system that continues to improve and serve the interests of justice.

Yesterday's Wall Street Journal had three stories on the Marketplace page about events which will influence the practices of DRI members and the lives of all of us over time.

First, Continental Airlines was found criminally liable for apparently improperly maintaining an airliner resulting in the crash of a Concorde outside Paris in 2000. Second, GNC an American vitamin retail chain is on the verge of being bought by a Chinese state backed company for more than $2 billion. Finally, Wal-Mart will receive a hearing at the Supreme Court which will address whether class action litigation is appropriate for employment cases where individual acts predominate.

In the first case, it's the criminalization of acts where there is was no criminal intent when the plane was maintained. Our tort system was designed to address private wrongs and seldom has the criminal process been used to punish mere negligence. We are seeing increased efforts in financial cases, products cases, and in other controversial situations to involve criminal prosecution to precede or augment tort suits. The Dodd-Frank act has put even more muscle behind criminal and civil suits involving financial fraud and at the same time it has created an even greater arena for whistle blowers and their lawyers to profit from uncovering questionable acts. The linking of criminal and civil proceedings isn't new, but it is becoming more prevalent, as evidenced by the Continental case.

If foreign governments take a greater stake in our businesses, on top of buying our debt, will our dispute resolution system survive? How will our regulatory system work with increased foreign ownership of companies which dominate the American marketplace? These foreign influences can impact our commercial and tort systems and bring new interests to the table when decisions need to be made. This is what can happen when more acquisitions like GNC occur.

Finally, if the scales shift the balance in dispute resolution to the aggregation of claims as opposed to a fact by fact, case by case, method of evaluating causation and damages, our system of justice will also change in ways never imagined when we were in law school. That is what is at stake in the Wal-Mart case.

These changes are going to affect all of us, our firms and our practices.  We should all work within DRI to be sure to share what we know and develop effective strategies to effectively represent our clients in the coming years in this very changed world. DRI has been very effective at helping its members do just that for the past 50 years and with your interest and commitment together we can make sure DRI help us all meet these new challenges, too.

Confronting an issue of "first impression" in Massachusetts and the First Circuit, the Supreme Judicial Court joined with the majority position taken by the 8th and 3rd Circuit Courts of Appeal and courts elsewhere in holding that a malicious prosecution tort "occurs" for purposes of triggering the duty to defend when the underlying litigation is first filed, not when it is dismissed.  Billings v. Commerce Ins. Co., 458 Mass. 194 (Nov. 4, 2010).
 
Defendant Commerce Insurance Company ("Commerce") insured plaintiff George H. Billings ("Billings") under a personal umbrella liability policy (the "Policy") that afforded coverage for "personal injury" caused by "an 'occurrence' to which this policy applies."  "Personal injury" included "malicious prosecution, libel, slander or defamation of character." 

In 1998, before Commerce insured Billings, Billings and others filed a lawsuit against the trustees of the Peterson 1990 Real Estate Trust, seeking to annul a decision of the Falmouth zoning board of appeals regarding issuance of a building permit on one lot, enjoin construction on other lots, and enjoin the building commissioner from issuing building permits for other lots.  In April 2000, while Billings was insured by Commerce, this action was dismissed after the parties reported the action settled but failed to file the settlement agreement with the court.  In December 2000, Scott and Eric Peterson, individually and as trustees, sued the plaintiffs in the 1998 action, including Billings, alleging malicious prosecution and intentional infliction of emotional distress. 

Billings sent Commerce the 2000 complaint and requested a defense.  Commerce declined coverage on the basis that "there is no allegation in the [c]omplaint of an offense which was committed during the coverage period."  Billings retained defense counsel at his own expense, and a jury returned a verdict in favor of Billings.  Billings filed a declaratory judgment action seeking a declaration that Commerce breached its duty to defend him in the 2000 action.  He also sought actual and punitive damages under G.L. c. 93A, alleging unfair insurance practices in violation of G.L. c. 176D § 3(9).  The trial court judge granted Commerce summary judgment and denied Billings' motion for summary judgment.  The Supreme Judicial Court transferred Billings' appeal on its own motion.

On appeal, the SJC considered two issues: (1) when a civil action against a policyholder alleges a claim of malicious prosecution, and coverage under the liability policy is based on the date of the "occurrence" rather than the date of the claim, is the "occurrence" when the underlying, allegedly malicious action is filed or when the action is terminated?; and (2) is the allegation that Billings and other defendants were "spreading rumors that the [Petersons] would fill the wetlands and build [sixteen] houses in the marsh" "reasonably susceptible of an interpretation that states or roughly sketches a claim for damages because of 'personal injury' arising from 'libel, slander or defamation of character,'" and if so, did the claim occur within the policy period?

On the first issue, the Court concluded that "occurrence" is the filing of the malicious action, not its termination.  Noting that the occurrence is the time when the complaining party was injured, not the time the wrongful act was committed, the SJC noted that the majority of jurisdictions having addressed this issue have concluded that the "occurrence" causing personal injury is the filing of the underlying malicious suit, not its termination.  Only two courts – the Illinois Court of Appeals and the U.S. District Court for the Middle District of Florida – have separated the definition of "occurrence" under the policy from the damage caused by the conduct, concluding that the time of "occurrence" of a malicious prosecution is when the final element of the tort is satisfied. 

In rejecting this view in favor of the majority position, the Court concluded that the "plaintiff suffers actual damages from a malicious prosecution on the filing of the underlying compliant, which at a minimum triggers the need to invest the time, money, and effort to prepare a defense.  While the termination of the underlying action is a required element and a necessary condition precedent before the malicious prosecution claim accrues for purposes of the statute of limitations, it is not an event that causes harm to the plaintiff and therefore not an 'occurrence' within the meaning of the policy." 

The Court also rejected Billings' contention that malicious prosecution should be considered a continuing tort throughout the duration of the underlying litigation.  The Court reasoned that it is not difficult to determine when the injury occurs and "any reasonable person recognizes that the injury occurs on the filing."  Consequently, Commerce did not owe Billings defense coverage because its policy took effect in March 2000, and the "occurrence" took place in 1998 when the underlying malicious prosecution action was filed. 

On the second issue, regarding the duty to defend against allegedly defamatory allegations, the Court acknowledged that the 2000 complaint did not include an express claim for defamation, libel, or slander, but explained that this was not determinative in deciding whether the allegations about spreading rumors were reasonably susceptible of an interpretation that states or roughly sketches a claim for damages because of "personal injury" arising from "libel, slander or defamation of character."  "The process is not one of looking at the legal theory enunciated by the pleader but of 'envisaging what kinds of losses may be proved as lying within the range of the allegations of the complaint, and then seeing whether any such loss fits the expectation of protective insurance reasonably generated by the terms of the policy.'" 

In determining an insurer's duty to defend, Massachusetts courts examine the allegations in the complaint, information known to the insurer that may assist in interpreting the allegations, and information "readily knowable" by the insurer.  The "content of publicly available court records in the underlying case and related cases is readily knowable by an insurer and, where that information is relevant to the duty to defend, may be considered in deciding whether the insurer had a duty to defend.  A policyholder is not entitled to a defense where court records in the case where the policyholder was a party demonstrate that the insurer has no duty to defend."  While evidence outside the complaint can generally be considered only to give rise to, instead of deny, a defense, the SJC noted that the "Appeals Court has recognized a 'rare' exception to this rule where there exists 'an indisputed extrinsic fact that takes the case outside the coverage and that will not be litigated at the trial of the underlying action'." Farm Family Mut. Ins. Co. v. Whelpley, 54 Mass. App. Ct. 743, 747 (2002). 

Applying these standards, the Court concluded that the allegation that Billings spread rumors, while plead in support of a claim of intentional infliction of emotional distress, was "reasonably susceptible of an interpretation that roughly sketched a claim of libel, slander, or defamation, whose defense is covered under the terms of the policy."  In making this determination, the Court noted that Commerce's representative agreed in a deposition that the allegation regarding the rumors "constituted an offense under the terms of the policy that, had it happened within the coverage period, would have triggered a duty to defend."  While cautioning that the representative's statements cannot establish as a matter of law that the allegations are reasonably susceptible of an interpretation that state a claim under the policy, the Court will consider an admission in determining whether the allegations are reasonably susceptible of such an interpretation.  While the rumor allegations were sufficient to state a potentially covered defamation claim, Commerce's duty to defend was not triggered because the rumors were not spread during the policy period.