So much to choose from to write about this week, but I am, by my own rules for this series of posts, limited to five topics. I noted last week that there was a risk I would beat holiday jokes into the ground this month, and here I go again, starting with an article about Santa, and then moving onto AI generated holiday scenes.

1. Santa Claus is coming to town. Or maybe not. As this Planet Money article reflects, demand for hiring Santas for the holidays is down significantly. Why does this matter and, more importantly, why does it matter for the purposes of the topics of this blog? Well, we all have our favorite tells about the economy. For me, before the pandemic and the rise of remote work, a clear leading indicator of an upcoming economic downturn was when it started getting easy to get a parking spot for the 8 am commuter rail train into Boston, as you could never get a spot during a boom (you had to instead get there for the 7 am train). On the other hand, once the lot, empty for months or years, began filling slowly up again in the morning, it was a leading indicator that we had hit bottom and it was time to buy the dip. Less Santas almost certainly correlates to less holiday spending, which likewise almost certainly correlates to less financial confidence on the part of employees – as I have written before (including here, in the last item), what harms the labor market reverberates in increased ERISA litigation, including breach of fiduciary duty claims over benefit plans. I have never had more class actions on my docket than within months of the 2008 collapse, and wouldn’t finish off the last of my Great Recession driven lawsuits until more than six years later. So pay attention to the underemployed Santas – they are likely a sign of rising risks for plan fiduciaries.
2. An angry internet mob bearing pitchforks has come for a McDonalds’ ad featuring AI generated actors and scenes. I don’t know – personally, I think the ad is kind of funny. Watch it yourself here and see what you think. (Me, I love the part where the cat takes out the tree). What’s not funny when it comes to AI, though, is the potential mischief that may come from allowing AI into the claims handling process. As I discussed last week in this post, massive bad faith judgments are being imposed against insurers based on the pattern of errors that can show up in a claim’s history simply because human judgment, which is all claims handling really is, is not infallible. While AI has some real potential to improve claims handling, primarily in ensuring that the information on which judgment calls are made is accurate, well documented and thorough, it is not going to remove human judgment or the fallibility of human judgment from the process, and thus any fantasy that AI will perfect claims handling is just that, a fantasy. But it can improve it. And as insurance broker Mark Flippen pointed out in this excellent post, some states are already passing bills intended to ensure exactly that, namely that AI’s incorporation into claims processing actually improve the process from the point of view of insureds and claimants.
3. I have seen trade dress from all sides of the insurer’s perspective. My very first argument was in the famous Norfolk courthouse where major historical cases, such as the Sacco and Vanzetti trial and the Karen Reade trial, had occurred, and concerned whether coverage existed for a claim by one competitor that another had ripped off its trade dress (there was no coverage and, in point of fact, it was pretty obvious that the insured had done exactly that). Years later, I would litigate a trade dress dispute over the packaging of competing biotech products, where the defendant received a defense (provided by me) under its insurance policy, after the claims pled in the complaint triggered the duty to defend. While other claims in that case would be tried, the trade dress claim went away on summary judgment. You noticing a pattern here? That trade dress claims sound great but don’t tend to pay off? Yup, that’s the same lesson I drew from decades of experience with them. This article on a trade dress dispute over Uncrustables peanut butter and jelly sandwiches shows why – the element of consumer confusion is a tough bar to hurdle.
4. Nuclear verdicts are, in my opinion (which is based on decades of studying them for purposes of resolving and, where necessary, trying the insurance bad faith and coverage claims that arise from them), driven by a number of identifiable factors, including changing views of jurors of the world around them. It may be time to think carefully about what a nuclear verdict, including an award of $10 million in punitive damages, in an employment discrimination action, tells us about how jurors are viewing workplace dynamics. For what it’s worth, I predicted the expansion of nuclear verdicts from the personal injury environment to the employment context years before it happened, in this post.
5. Someone once said that Marx was wrong about a lot of things, but he was right that everything is economics. The impact of rising homeowners insurance premiums, and even more so of the loss of private coverage in some areas, is dramatically changing the makeup and the nature of various neighborhoods across the country. This article does a great job of showing the toll this is taking at street level in America.