Chris Lazarini Examines Proximate Cause Claims in Wrongful Death Suit Against Broker-Dealer

April 18, 2019
Securities Online Litigation Alert

Bass, Berry & Sims attorney Chris Lazarini examined a case in which a wrongful death action was brought against J.P. Morgan and related entities after the death of a former broker. Following the suicidal death of the broker, the broker’s estate filed suit claiming that the death was caused by J.P. Morgan’s intentional, systematic scheme to discriminate against the broker due to his age and disability. The scheme, the estate alleged, was the proximate cause of his death. The court dismissed the charge, finding that generally, the issue of proximate cause is for the jury to decide; if speculative enough, however, the causative connection may be deemed too speculative by the court.

Chris provided the analysis for Securities Online Litigation Alert (SOLA). The full text of the analysis is below and used with permission from the publication. If you would like to receive additional content from the SOLA, please visit the SOLA website to sign up for the newsletter.

Mullaugh vs. JPMorgan Chase & Co, No. 18 Civ. 2908 (S.D. N.Y., 2/26/19)

Generally, the issue of proximate cause is for the jury to decide; if speculative enough, however, the causative connection may be deemed too speculative by the court.

Plaintiff, the personal representative of the Estate of Michael Lorig, brought this wrongful death action against J.P. Morgan Securities, other J.P. Morgan entities, and Lorig’s supervisor (collectively “JPMorgan”). Plaintiff alleged: Lorig suffered from anxiety and depression, had taken medical leaves in the past, and always returned to work as a productive employee. In 2014, after Lorig commenced a short-term disability leave for treatment, his supervisor unilaterally assigned 80% of the commissions from his book to the broker servicing his accounts. After Lorig’s short-term disability was converted to long-term, his supervisor unilaterally re-assigned his book to the other broker and told Lorig that JPMorgan intended to terminate his licenses. More than once, the supervisor pressured Lorig to retire. Each time, Lorig declined, stating an intent to return to work.

In August 2016, according to the Complaint, Lorig was medically cleared to return to work, only to find that he had no business to return to. JPMorgan refused to assist Lorig in reinstating his licenses or in amending the language on his Form U5, making it impossible for him to find another job. A despondent Lorig committed suicide. In 2014 and 2015, Lorig’s medical team sent periodic reports about Lorig’s condition to JPMorgan. The 2014 reports noted Lorig’s suicidal ideations. Plaintiff claimed JPMorgan knew and deliberately ignored or was reckless and negligent in not knowing that Lorig had suicidal tendencies and engaged in an intentional, systematic scheme to discriminate against him due to his age and disability. The scheme, Plaintiff alleged, was the proximate cause of his death.

On JPMorgan’s motion to dismiss, the Court notes that proximate cause is generally an issue of fact for the jury; however, New York courts have recognized situations where the causal nexus is too tenuous to permit a jury to “speculate” as to the proximate cause of a suicide. The Court finds this to be such a case and dismisses the complaint. From the face of the complaint, the Court finds that, until August 2016, Lorig was under the impression that he could return to work and was unaware of JPMorgan’s opposition to his return and the problems he faced in reinstating his licenses. Thus, the Court deems that only actions occurring after August 2016, should be considered in the proximate cause analysis. The Court finds suicide was not foreseeable by that time, and JPMorgan’s actions were too attenuated to be the proximate cause of death, because the last medical report stating that Lorig was suicidal came in August 2014.

One wonders what would have happened if plaintiff filed an arbitration. FINRA Rule 13200 is usually interpreted broadly, so it seems likely a court, facing a challenge to an arbitration, would find this dispute arose out of the business activities of JP Morgan Securities and compel arbitration against that entity where plaintiff would have avoided, or likely prevailed over, a dismissal motion and had the case heard on the merits.