Corp Reform - Not Tort Reform

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I am blogging from a smartphone. dangerous stuff. I also just took a pic and blogged it.

State Farm Acknowledges The Efficiency Of The Tort System

State Farm is dropping its rates in Colorado because they've returned to the "Pottery Barn" rule of "you break it, you bought it." 

State Farm Mutual Automobile Insurance Co., the largest auto insurer in Colorado, on Monday announced it is lowering overall insurance rates by 7.2 percent. The change becomes effective July 16.

The insurer estimates that the change will save its Colorado customers a combined $38.8 million per year. This marks the ninth rate decrease for State Farm since July 2003.

The company credited the premium decline, at least in part, to Colorado's change from "no-fault" auto insurance - where injuries in car accidents were paid regardless of fault - to a tort-liability system, where at-fault drivers are responsible for all the damages.

Source: The Denver Post - State Farm slates rate cut, citing tort-system savings

Odd that the evil, bad, inefficient tort system is saving consumers money, isn't it?

Technorati tags: State Farm, Colorado, Insurance cartel, tort system, tort reform

Have John Engler and the National Association of Manufacturers been naughty?

Technorati tags: John Engler, NAM, ATRA, ATRAF, tort reform, illegal contributions, Grover Norquist, bad guys

I haven't fact checked any of this, but one blogger points out the possibility that the NAM is illegally funneling money to other tort reform groups.

In 2005, the National Association of Manufacturers (NAM) funneled $870k through the American Justice Partnership (AJP) to American Tort Reform, according to the 2005 AJP 990.  Another $451k went to pay a "service fee". Total AJP expenditures were only $1.7 milllion.

Was AJP set up in 2005 to facilitate NAM's contribution to American Tort Reform? Is NAM legally prohibited from contributing directly to American Tort Reform?

The answer could, in part,  depend on which American Tort Reform received the $870k, the American Tort Reform Association (ATRA) which is a 501(c)(6) or the American Tort Reform Foundation (ATRAF), a 501(c)(3).

This is not the first time that I have suspected NAM of disguising illegal contributions. Last year, I speculated here in the TPM Cafe about whether the 2004 $650k grant made by Grover Norquist's Americans For Tax Reform to the National Alliance for Worker and Employer Rights (NAWER) was funded by NAM. NAM is prohibited from contributing directly to NAWER by law

Source: American Justice Partnership, Another NAM Scam | TPMCafe

I'll do a little digging and keep my eyesfor more about this story.

Remember, it's ok if healthcare bucks go to support lavish corporate expenditures...

Just as long as we make sure injured patients don't see a dime.

Check out the photos in this blog... nice place.

EPIC makes a big deal about being a small company with only a handful of clients - 140 hospitals (or hospital systems), according to their website. If that many clients can support the money not just for EPIC's brand new headquarters (next door, and they're obviously just as grand) but also for this training center, then it just further illustrates some of the places our healthcare dollars are going that won't be curbed by tort reform bills.

Source: jupo42: Money to spare

Perhaps the best way to guarantee medical experts aren't biased

Walter Olson at Point of Law quotes an AMA article about an expert witness who wants to make sure his testimony is correct:

When New York dermatopathologist A. Bernard Ackerman, MD, is called to testify as a medical expert witness, he refuses to know which side the lawyer represents.

It is his way of remaining objective when he evaluates a case. In addition, the academic clinician typically previews his presentation of the facts and his opinion for a student audience, as a way of holding himself accountable.

"I want to let the facts speak for themselves," said Dr. Ackerman, who has testified equally for the defense and the plaintiff in medical liability cases and in other cases where medical expertise is needed, such as criminal cases. Sticking to the facts, he says, prevents a cross-examining lawyer from tripping him up about his opinion being consistent.

Source: PointofLaw.com | PointOfLaw Forum: The scrupulous expert witness

I can't think of any better way to make sure doctors aren't biasing their testimony for one side or the other than to require them to be hired blindly.  Unfortunately, I'm sure all sides of the litigation debate would have some objections to this, as would the doctors who make a (good) living testifying exclusively for plaintiffs or defendants.

Technorati tags: medical malpractice, Walter Olson, Point of Law, expert witnesses

Oregon works to protect citizens from toxic mold

Admittedly, I had never even heard of synthetic stucco until I read this article: 

The State of Oregon has taken a huge step in preventing toxic mold in new home construction with House Bill 2112-B by banning the use of synthetic stucco. Synthetic stucco has been the subject of a number of investigations including one by NBC Dateline. Homeowners have claimed the product causes water retention within the walls leading to wood rot which in turn leads to mold contamination.

Source: Bay Area Houston: Toxic Mold. When it Happens to You.

The most interesting fact is that the legislation didn't happen until a Senator's granddaughter got ill from mold...

Technorati tags: mold, toxic mold, synthetic stucco, 2112-B, Oregon

Business is booming in Alabama, despite supposedly poor legal climate

"Reform" groups have a vested interest in engaging in fearmongering over the civil justice system.  The executive directors of most state "reform" groups earn six-figure salaries, which come from donors who believe the civil justice system is broken.  A common charge levied against the tort system is that the legal climate is preventing businesses from coming to an area.  Certainly, the "reform" movement has tried that in Alabama.  Here's a letter to the editor that calls their bluff.

New businesses rain on Alabama:

Alabama may be in the midst of a severe drought as far as rain, but new businesses are raining down on our state. Notwithstanding the claims of some organizations, lawsuits do not seem to be preventing corporations from locating new plants in Alabama.

On May 11, ThyssenKrupp approved a proposed $3.7 billion, 2,700-worker, steel-finishing complex in Mobile County. On June 12, The News reported Magna International Inc. is looking at a northwest Alabama site for a North American vehicle-assembly plant. Hardly the kind of activity you would expect to see from companies fearing the litigation explosion, or is there really such an explosion?

According to U.S. Department of Justice statistics, the number of civil trials dropped by 47 percent and tort cases dropped by 31 percent between 1992 and 2001. However, as reported in The News recently, CEO compensation has seen a dramatic rise during this time. Of the companies listed in the Standard & Poor's 500, the CEOs received a combined $4.16 billion in 2006. If the minimum wage had increased at the same pace as CEO pay since 1990, the minimum wage would be $22.61 per hour.

So, business is up, CEO pay is up, minimum wage is stagnant and tort cases have dropped. Hmmm, it does seem like there is a problem here.

Jon E. Lewis

Downtown

Source: Letters, faxes, and e-mail- al.com

Can you imagine the howls if a legislator suggested tying minimum wage to CEO salaries? 

Technorati tags: Alabama, tort Reform, litigation, CEO compensation, minimum wage

Is "trial lawyer" losing its stigma?

The triumph of trial lawyers in the 2006 election might mean just that: 

The days when Republicans can win an election by smearing a candidate as a “trial lawyer” are over.

18 “trial lawyers” ran for Congress in 2006. 14 of them won.

Source: Stop Cornyn » Blog Archive » The Death of a False Right-Wing Talking Point

Then again, it could have been anti-Republican backlash.  The article is also a good read for explaining why the Republicans embrace tort "reform" so much - it puts the screws to the Democrats. 

Technorati tags: Democrats, Republicans, trial lawyers, tort Reform

Live in Michigan? Don't buy cheap crap from China - here's why.

The law firm of Thompson, O'Neil, & VanderVeen in Traverse City, Michigan posted today about what "reform" has done to Michigan. 

These products bear an additional risk for Michigan residents, since after tort "reform" the seller of the product is not legally responsible for defects or injuries they cause.  Further, the Chinese government doesn't allow its industries to be sued (particularly since most are government-owned).  As a result, when a "Thomas" occurs in Michigan, if it causes catastrophic injuries to someone, no one is responsible and has to stand behind it.

Source: TOV Blog: Product injuries and the Flat Earth

So what happens if a person on public assistance gets hurt by say, poisonous toothpaste from China?  Why, the generous taxpayers of Michigan get to pick up the tab for their treatment.  Even if they bought the toothpaste from a wealthy store like Wal-Mart, Target, etc. 

That the "reformers" talk up the supposed "tort tax" but refuse to acknowledge the costs of "reform" to taxpayers speaks volumes as to their dishonesty.

 

Technorati tags: tort reform, Michigan, Traverse City, product liability, tort tax, Made in China

How it was in the good old days - before greedy trial lawyers ruined America

The problem with trial lawyers is that they think they have the right to tell business owners how best to run their businesses.  With the benefit of 20/20 hindsight, trial lawyers point the finger of blame whenever an unfortunate business makes a prudent, but incorrect decision.

Greedy trial lawyers meddle in virtually every industry and drive up the prices of all our products and services.  Every business decision made has to take into consideration the predatory litigation lobby, and not what's best for the business.  No wonder so many businesses are driven into bankruptcy!

The situation is only as bad as it is because activist judges and politicians in the wallet of the trial bar extended tort doctrines to dubious causes of action.  It didn't used to be this way.  There once was a time when corporations were free to run their businesses as they saw fit, and when entrepreneurs weren't held hostage by trial lawyers. 

If only we had meaningful tort reform, we could return to a time of fairness and efficiency in commerce.  A time perhaps best exemplified by the manner in which White Star Lines handled the tragic loss of the Titanic.  Thanks to a common-sense attitude towards compensating the victims, the management of White Star saved the company from ruin.  Were an identical tragedy to occur today, the company would surely be devoured by ravenous trial lawyers and greedy family members unwilling to accept reasonable compensation.

Let's take a trip back to the good old days and see how White Star Lines handled the crisis:

In 2002, new evidence surfaced, revealing that the Titanic’s owners expected, and in fact demanded fees for the return of bodies.White Star was the Enron of its day; a succession of callous acts without end. Through letters that still survive, historians have long known that Ismay’s line notified the widows of the Titanic’s bandsmen (notwithstanding the fact that their husbands did much to prevent panic on the port side by playing cheery ragtime music) that 75% of the money owed them was being withheld, based on the premise that their husbands had entertained passengers only halfway through one leg of what was to have been a two-way trip. Furthermore, White Star judged that it was only fair to warn the widows that there would be little left over from the remaining 25% because they would have to “settle a bill” for the loss of their husbands’ uniforms.

In February 2002, documentary film-maker Rip Mackenzie sent a dispatch describing a letter demonstrating once and for all time that there was probably no subterranean marsh into which White Star was unwilling to descend.

Written on White Star stationary and dated two weeks after the sinking, the letter was addressed to Sarah Gill of Somerset, England, in reply to her inquiry about the fate of second class passenger John Gill, her childhood sweetheart and husband of two months.

The owners of the Titanic demanded of Sarah a fee of 20 pounds ($1400 in year 2002 dollars), or her husband’s body would “regrettably” have to be buried in Halifax. White Star used this letter as an opportunity to stress that the sinking of the Royal Mail Steamer Titanic was no one’s responsibility . . . as if driving a ship full speed ahead into the night, toward an ice field about which the bridge had been repeatedly warned . . as if . . .

--------------------------------------------------------------------------------

“The sinking was an unfortunate accident, [for which] we cannot be held responsible. We regret that we do not see our way to bring home the bodies of those recovered free of expense, and in cases where it is desired for this to be done, it can be carried out only if the body was in a fit state to be returned, and upon receiving a deposit of 20 pounds on account of the expenses.”

--------------------------------------------------------------------------------

Given the precedent of how White Star treated with widows of Wallace Hartley, Jock Hume, and the other bandsmen (whose families found settlement of the “uniform account” doubly difficult after corporate lawyers declared violinists and cellists “not crew, but officially passengers, therefore not covered under the Workmen’s Compensation Act”), the Sarah Gill discovery should bring no sense of surprise. The behavior of J. Bruce Ismay and his legal team at White Star begins to look increasingly analogous to a car thief who manages to get away with billing his victims for the labor of dismantling their cars and selling the parts.

Source: Charles Pellegrino Web Site

Remember White Star Lines the next time some corporate sock puppet tells you we need tort reform.  If it weren't for "greedy trial lawyers" it's entirely possible that airlines would bill the families of dead captains for the cost of their uniforms. 

Technorati tags: trial lawyers, greedy trial lawyers, tort reform, Titanic, White Star Lines, punitive damages, damage caps, predatory lawyers

Race Baiting, Ted Frank Style

 To most tort "reformers" Judge Roy Pearson's lawsuit was upsetting.  But the "reformers" were truly outraged by something else: The fact that the AAJy condemned the lawsuit and came to the defense of the defendants.  Unfortunately for the "reform" lobby, there were no trial lawyers to demonize in this case.  So since Ted can't blame trial lawyers for this lawsuit, he does the next best thing: He plays the race card and accuses trial lawyers of opposing Pearson's lawsuit simply because Pearson is black.  (Ted also describes Pearson as being poor, but since Pearson earns a bit over $100k per year, that claim fails.)

We're excited to see Franklin join the world of reformers and recognize that many more lawsuits are frivolous than what Public Citizen recognizes. We encourage her to read the data and arguments of those she mistakenly claims to oppose, and to scrutinize those she mistakenly thinks are her allies a bit more closely. Why is it alright for wealthy white trial lawyers to extort billions from big business using the same ad terrorem tactics (and even the same consumer-protection laws!) as a poor African-American pro se did to extort $12,000 from a small business? We encourage Franklin to examine the Association of Trial Lawyers of America's racial double-standard.

Source: Overlawyered: The Litigation Lobby's "frivolous" bait-and-switch: the Judge Roy Pearson pants-suit

If Ted Frank is truly offended by racism, perhaps he should take a closer look at his employer, the American Enterprise Institute for awarding fellowships to Dinesh D'Souza and Charles Murray.

In addition to blaming liberals for 9/11, D'Souza has also gained a reputation for being a racist for such unique writings as:

The American slave was treated like property, which is to say, pretty well. [Justinian: Wow.]

If America as a nation owes blacks as a group reparations for slavery, what do blacks as a group owe America for the abolition of slavery?

[S]egregation was designed "...to assure that [Blacks], like the handicapped, would be...permitted to perform to the capacity of their arrested development.

Sources: Dinesh D'Souza - SourceWatch, Dinesh D'Souza

D'Souza is no longer with AEI, but Charles Murray is.  He gained a great deal of notoriety in the mid 1990's when he wrote The Bell Curve, a book that theorized (among other things) blacks aren't as smart as whites, and it is their intellectual inferiority that prevents blacks from succeeding in America.  Murray based this conclusion based partially upon "studies" performed by groups not generally renowned for their scholarship:

Charles Lane discovered that 17 researchers cited in the book's bibliography were contributors to the racist journal Mankind Quarterly. Murray and Hernstein also relied on at least 13 scholars who had received grants from the Pioneer Fund, established and run by men who were Nazi sympathizers, eugenicists, and advocates of white racial superiority.

Source: Media Matters - Altercation: You've got to be taught to hate and fear ...

In stark contrast D'Souza and Murray, the AAJ and its members fights for the rights of African Americans.  For example, many of the companies that fund the AEI have been successfully sued by members of the AAJ for racial discrimination.

It's more than a little ironic for Ted to accuse trial lawyers of having a racial double standard.  He's condemning the AAJ for opposing one African American's frivolous lawsuit, but Ted works tirelessly to deprive the members of the AAJ of the ability to file meritorious discrimination lawsuits on behalf of all African Americans.

Accusing one's opponents of being racist is truly the lowest form of ad hominem attacks.  That Ted would resort to such foolishness shows just how foolish he is to criticize the AAJ for opposing Pearson's suit. 

Technorati tags: Ted Frank, American Enterprise Institute, AEI, AAJ, ATLA, racism, racist, smoking crack

Lawrence McQuillan Just Can't Stop Making Stuff Up

I wonder if Lawrence McQuillan of the Pacific Research Institute spent more time making up his fictional study of tort costs, or defending his study against those who expose it for being the sham that it is?  I've lost track of all the letters-to-the-editor I've seen by McQuillan that attempt to prop up his rickety study.  Here's an excerpt of another one that McQuillan wrote in response to Ralph Cook's letter to the editor. 

Cook stated that a Tillinghast-Towers Perrin report contains "a long list of costs not at all associated with the civil justice system." We disagree.

The report includes costs such as fender-benders and insurance CEO salaries, as Cook mentioned, because it is a comprehensive accounting of direct tort costs. Fender-benders are torts, and the tort-related portion of CEO salaries is an overhead cost of making tort-damage payments. (Emphasis added.)

Source: Your views- al.com

Funny - whenever I look at an annual report of an insurer, it doesn't break down it's CEO's compensation by "tort-related" compensation.  What the hell is that supposed to mean, anyway?  Does that mean that if 25% of an insurer's business is based on liability insurance that 25% of the CEO's salary is tort-related?  Or is it a measure of how much time the CEO spends tending the liability portion of the business?  If so, did insurers send McQuillan the timecards for their CEOs?

I think I've got it! The "tort-related portion of CEO salaries" is just a meaningless term that McQuillan made up to hide the fact his meaningless study relies on meaningless information to come to a misleading conclusion! 

McQuillan and the PRI have been taken to task by many leading economists, scholars, and jurist.  Judge Richard Posner wrote a scathing critique of their study, and he used phrases like "adding apples and oranges," "assume without evidence or analysis," and "fictitious."  Some of the better portions of Posner's critique are below:

"...It is impossible to determine from Tillinghast-Towers Perrin’s report what the sources for most of its data are, and so the figures I have quoted must be taken with a grain of salt; indeed, so far as I can tell, they may be completely unreliable. They are almost certainly exaggerated, given the financial connection between the firm and the insurance industry...

...The authors of Jackpot Justice know the difference between a cost, which in economic terms is a reduction in the amount of valuable resources, and a transfer of wealth from one person to another that doesn't reduce the total amount of resources but merely redistributes them. The $128 billion figure is a transfer, not a cost...

...The sum of $328 billion and $359 billion is $687 billion, which is almost $200 billion short of the authors' grand total of $865 billion. The excess malpractice costs and accidental-death costs they estimate at less than $50 billion, so there is still a big gap. I can't figure out how they fill it....

...The figure, however--the authors' estimate of the net social loss created by our tort system--is, as I have tried to show, fictitious."

Source: The Becker-Posner Blog: Is the Tort System Costing the United States $865 Billion a Year?--Posner

I wonder if McQuillan includes the cost of preparing his propaganda about the tort system in his estimates of the cost of the tort system? 

Technorati tags: Lawrence McQuillan, Pacific Research Institute, PRI, tort tax, tort reform, propaganda, Richard Posner, Ralph Cook, CEO Salaries, pure fiction

Effects of Tort "Reform" in Texas are Mixed

The Dallas Morning News has a fairly balanced article about the effect of tort "reform" on doctors and patients.   An excerpt of the most powerful story is below:

Naydene Lambert's family was ready to sue the hospital when she died after a routine colonoscopy last June.

The Gordonville woman developed a blood clot in her lungs. She didn't get blood-thinning medicine, despite a history of the problem and obvious varicose veins signaling potential clotting problems, her daughters say.

"We're not sue-happy people at all, but they killed our mother," daughter Patsy Wertz said.

But because Ms. Lambert, 73, didn't earn any money, they couldn't ask for lost wages.

That left pain and suffering – a claim that requires lots of costly experts and, because of the $250,000 damage cap, holds zero hope of a substantial award.

After expenses and attorney fees, the family would probably end up with nothing from a lawsuit, even if they won, lawyers told the family.  (Emphasis added.)

Source: How tort reform has affected four people | Dallas Morning News | News for Dallas, Texas | Business

And that's the number-one reason tort "reform" is unfair - if you're a stay-at-home parent or a retiree, you or your family might not even be able to bring a truly legitimate lawsuit.  But, if you make six-figures (like most people in the "reform" movement do), your damages will be high enough to ensure your case will make financial sense.

The article also tells the story of two doctors who are in Texas at least in part because of the "reform" legislation passed in 2004.  While both doctors liked the damage caps, one chose to move to Brownwood because he wanted small-town life, and the other doctor chose Corpus Christi because his brother is a cardiologist there.  Another interesting tidbit from the article: Missouri has a $500k cap on noneconomic damages and Texas has a cap of $250k.  A urologist in Missouri will pay $60,000 per year in malpractice premiums, while a urologist in Texas will pay $2,000.  The damage caps in Missouri are twice as high, but the malpractice premiums are 30x higher...  So why not tie insurance premiums to damage caps?  You know, offer to institute $250k caps if malpractice insurers will cut their rates to $2,000 per year?  Somehow, I don't think they'd go for it.

Technorati tags: medical malpractice, Texas, tort reform, Brownwood, Corpus Christi, Dallas Morning News, damage caps

Tort "reform" = Inequality under the law

Ken Connor at Townhall.com writes a piece that explains why Federal "reform" legislation goes against Federalist principles. 

Conservatives should not embrace an agenda that relieves wrongdoers of the consequences of their wrongdoing. Affirmative action for wrongdoers can hardly be described as a conservative approach to problem solving. Furthermore, Americans have historically rejected the idea of a "privileged class" that is allowed to operate under a different set of rules from everyone else. "Equality under the law" is a proud American tradition. Most Americans understand that when they act irresponsibly and put fellow citizens in harm's way, they will be held accountable for their conduct. There should be no exceptions for the rich and powerful. Rich or poor, big or small—accountability for the consequences of one's actions should be the norm for all members of a just society.

Source: Townhall.com::Thompson, Torts, and True Conservatism::By Ken Connor

Technorati tags: Townhall.com, Federalisn, Fred Thompson, Ken Connor, tort reform

Ralph Cook on the PRI "Study" that claims tort costs are pushing a trillion bucks a year

Ralph Cook wrote a letter to the editor in which he criticizes the propaganda  study issued by the Pacific Research Institute:

The $865 billion figure PRI advertises contains a long list of costs not at all associated with the civil justice system. For example, the Tillinghast study which PRI calls the "gold standard" and bases much of its study on, says tort costs in the United States are around $279 billion. Business Week, one of the corporate community's most trusted publications, said Tillinghast's total included "everything from payouts for fender-benders to the salaries of insurance CEOs," and is "a wild exaggeration." With Tillinghast's grossly exaggerated total tort costs of $279 billion, PRI's total, largely based on and more than three times Tillinghast's, is even more far-fetched.

Source: montgomeryadvertiser.com ::  Inflated figure undercuts premise

The "reform" movement has a history of relying on made-up data.  Regular readers will recall Professor Fink's take on another bogus study.

Technorati tags: PRI, Pacific Research Institute, propaganda, Ralph Cook, Tillinghast, tort tax, tort reform

"It's for a cop." - Update!

The instant I read this story, I immediately thought of Super Troopers: "It's for a cop."

Officer Kevin Lynn Dupre is suing McDonald's Corp. after a cockroach just over an inch long ended up in his mouth when he sipped the coffee, according to his lawsuit.

McDonald's did not respond to a request for comment.

In the suit, Dupre said he stopped at a Cleburne McDonald's in May 2006 while on patrol. As he pulled away from the drive-through window, he took a sip, and the coffee was cold. He took another sip and felt something soft in his mouth. He spat a roach onto the lid of the cup and drove back to the restaurant.

Source: Star-Telegram.com | 06/14/2007 | Cop spitting mad over coffee roach

For those of you who haven't seen Super Troopers - shame on you.

Update: Apparently, the media got this one wrong, as Officer Dupre just posted the following comment:

"I am the "cop" who is supposedly suing McDonald's for finding a roach in my coffee. It's funny, because the first notice I recieved of this was 2 days ago when I read it in the FT Worth paper. I told McDonalds when it happened that I did not want any money. I only wanted 2 things; the employee who did it and the video tapes. I got no answers from the company, and even recieved veiled threats from their legal department. Of course I contacted an attorney, gave a statement, and a year later find out that I am suing for "emotional distress." The lawsuit has been dropped of course."

Technorati tags: Mcdonald's, coffee, Super Troopers, roach

Proof positive that tort "reform" does not prevent frivolous lawsuits

One of the major goals of the "reform" movement is to enact "loser pays" legislation, which would force the losing party in a lawsuit to pay the legal fees and other expenses of the winning party.  A substantial step in that direction is "offer of judgment" legislation, which has two effects.  The direct effect is that if a defendant makes a formal offer of judgment that the plaintiff doesn't accept, the plaintiff will have to pay the defendant's legal expenses unless the plaintiff gets an award as high or higher than the offer of judgment.  The indirect effect of "offer of judgment" legislation occurs when damage caps have been enacted: If a defendant offers a judgment as high or higher than the damage cap, the plaintiff is basically given "an offer he can't refuse."

The "reformers" tell us that a good way to eliminate frivolous lawsuits is to enact "offer of judgment" legislation.  Proof that it doesn't comes in the form of Roy Pearson:

"Keep in mind that the defendants apparently made a formal offer of judgment in the case, in the neighborhood of $12,000 or so. So if Pearson wins, but wins less than that amount, he may be on the hook for all of the defendants' legal fees over the last year and a half. Since those fees would amount to far more than the case was worth, it would be poetic justice."

Source: Overlawyered: Pearson penultimate (?) update - the trial ends

The next time you hear a "reformer" argue for "loser pays" or "offer of judgment" legislation, bring up the Pearson case.

Technorati tags: Roy Pearson, pants lawsuit, loser pays, offer of judgment, overlawyered, David Nieporent, tort Reform

Bill Daniels on the importance of being a trial lawyer

I saw a post today at Billdanielsblog.com and it included this quote from Alexander Hamilton. 

As Alexander Hamilton wrote in Federalist No. 83 (one of my favorite quotes):

"The friends and adversaries of (the proposed federal constitution), if they agree in nothing else, concur at least in the value they set upon the trial by jury; or if there is any difference between them it consists in this: the former regard it as a valuable safeguard to liberty; the latter represent it as the very palladium of free government."  (A "palladium," by the way, is "anything believed to provide protection or safety.")

Source: California Insurance, Personal Injury and Wage Hour Law Blog: Why personal injury lawyers help keep our country strong.

The rest of his post is worth reading, too.

Good news about my cat

The vet called and Ficus is doing very well.  Looks like he'll be coming home tonight!  Thanks for everyone's concern. 

E-discovery gone wild in TorrentSpy case

A Law.com story today is about the recent order that TorrentSpy must produce data kept in its servers RAM:

Magistrate Judge Jacqueline Chooljian's May 29 order requires TorrentSpy to turn over customer data only ephemerally kept in its computers' random access memory, or RAM. It could result in floods of similar requests in other civil cases, according to Ira Rothken, the Novato, Calif.-based attorney for the TorrentSpy site.

The Los Angeles magistrate's order also has privacy watchdogs concerned.

This is the first case Rothken said he could find where a court considered transient RAM data as something discoverable, he said. Any company currently being sued -- even before any liability has been found -- could end up having to collect and turn over RAM data at great cost, Rothken said.

"Lawyers will be flinging around preservation letters, coming up with all kinds of creative ways to tell the other to preserve RAM," he said. "That would cause huge economic implications. If it's not changed, it can create e-discovery chaos."

Source: Law.com - RAM Ruling Portends a New E-Discovery Brawl

Before I continue, I want to point out that this is not supposed to set a precedent:

She also noted that it was not her goal to set a far-reaching precedent with her decision.

"The court emphasizes that its ruling," Chooljian said in the documents, "should not be read to require litigants in all cases to preserve and produce electronically stored information that is temporarily stored only in RAM."

Source: MPAA accuses TorrentSpy of concealing evidence | Tech news blog - CNET News.com

If corporations think that SOX is bad, they should be scared to death that this decision might eventually lead to the requirement to preserve data in RAM.  Such preservation would be close to impossible and would be incredibly expensive.  First, the data storage requirements would be extraordinary, especially if workstations are included.  Second, servers and workstations would take a huge performance hit if every action written into RAM had to be written to a hard drive.  I can't think of any way this is practical at all.  Scary, scary stuff.

Technorati tags: torrentspy, MPAA, RAM, e-discovery, electronic discovery, scary, law.com, CNET, bad idea

Minimum wage to hit $22.61 per hour!

Well, it would if the minimum wage was tied to CEO pay raises, anyway.

...if the minimum wage had increased at the same pace as CEO pay since 1990, the minimum wage would be $22.61/hour. 

Source: CEO Income on the Rise « Justice Begins Here

Interesting, eh?

Technorati tags: ceo pay, minimum wage

Please think of my sick cat, Ficus

I don't generally do this sort of thing, but my 8 year old cat, Ficus, is in the vet hospital tonight.  He's been very sick since he got his vaccines last Tuesday... not eating, not drinking, and vomiting after he's force fed.  I've had him since he was six weeks old, and he truly is like a child to me.  So far all the tests have come back negative, but they're running two more tonight and are going to do an ultrasound on him.  I can't afford to have him put on a feeding tube, especially if there's "nothing wrong" with him.  Please, keep Ficus in your thoughts and hope he regains his strength and will to live.  I love him terribly and don't know what I'll do without him.

Walter Olson misses an important point about NYC aluminum bat ban

At Point of Law, Walter Olson notes that the NYC city council has banned aluminum baseball bats from NYC high school games on the grounds that they may lead to more injuries and deaths than wooden bats.  Olson preemptively rebuts a common argument used to defend such bans:

Don't miss Julian Sanchez's concise account ("The Nanny Two-Step") of the dangers to liberty in accepting the argument that runs roughly, "We pay through taxes when someone gets injured, why shouldn't we regulate the risks people take in sports?"

Source: PointofLaw.com | PointOfLaw Forum: Aluminum bats and NYC paternalism

Sanchez' post and Walter's citation of it is inappropriate in this context.  Sanchez' suggests that perhaps we shouldn't force taxpayers to pay for such programs as Medicaid, thus obviating the need to regulate risky behavior on financial grounds.  But here's the big point Olson and Sanchez seem to miss: High school sports are paid for by taxpayers.

The NYC council has no right to tell citizens what bats they may purchase with private funds to use on private property.  But it has every right to regulate how public funds can be spent to subsidize high school baseball - especially if taxpayers will be liable for injuries sustained during the ball games.  It's worth debating whether metal bats are more dangerous than wooden bats, but it's unreasonable to deny the city council the right to regulate a sport that taxpayers pay for.

Conservatives often complain about so-called entitlement programs such as Medicare/Medicaid, etc. and suggest that society would be better off if those programs were curtailed or eliminated.  The same argument can be used against high school baseball: If we're not going to pay for injuries caused when kids play baseball, why should we pay for kids to play baseball? 

Technorati tags: Point of Law, Walter Olson, New York City, NYC, baseball, aluminum bats

How can you tell when your state has enough tort "reform"?

When the only "reform" measure left to pass is one that protects sellers of oysters.

"Senate Bill 791, which will take effect Sept. 1, is a form of "tort reform lite," a minor (or so it seems) continuation of the movement to limit civil lawsuits and damage judgments against Texas businesses.

It adds oysters to a list of products recognized by state law as "inherently unsafe" for human consumption, thus shielding sellers or servers of the products from liability for any ill effects the products can naturally be expected to cause."

Source: Oyster bill is 'tort reform lite' | Chron.com - Houston Chronicle

More proof that "reformers" are dishonest comes from the sponsor of this bill, State Senator Tommy Williams.  Even though his bill defines oysters as "inherently unsafe," he says of the bill, "I think they're an inherently delicious food substance, not an inherently dangerous one."  In other words, he pushed for a bill he believes to be false just to prevent injured consumers from holding anyone accountable.

Technorati tags: oysters, Texas, tort Reform, Tommy Williams, Houston

The real hypocrites in the drama surrounding Bork's lawsuit

By now, anyone who reads blawgs is aware that conservative icon Robert Bork has filed a million dollar lawsuit against the Yale Club in New York City as a result of injuries he sustained when he tripped and fell at the club.  A slip-and-fall lawsuit isn't ordinarily newsworthy, but this one is for several reasons.

• Former Supreme Court nominee Robert Bork is a leading conservative scholar who has written on more than one occasion that Congress should enact some sort of tort "reform" to protect business interests.
• Bork is not only asking for damages "in excess of $1 million dollars" but is also asking for punitive damages - which is nearly unheard of in cases such as his.   
• Despite the fact that Bork is a leading constitutional scholar and law professor, his lawsuit makes two blatant and basic errors.  First, he is requesting attorney's fees, which are not recoverable in a personal injury lawsuit.  (This, perhaps more than any other, is the reason most personal injury attorneys operate on a contingent-fee basis.)  Second, he also asks for prejudgment interest, which is not available in New York.

The New York Times and the Wall Street Journal have good coverage of the case, and I've written briefly at Tortdeform.com about reactions in the blogosphere. 

First, a quick rehash of the facts as alleged by Bork in his lawsuit: 

Bork was invited to speak by The New Criterion at the Yale Club in June of 2006.  Instead of a traditional stage, the Yale Club had a foot-tall dais with a lectern on top.  Bork, who was 78 at the time, tripped and fell while trying to step up to the dais.  He injured his head and his left leg during the fall.  However, he did successfully climb on the dais and deliver his speech.  Bork reports that he suffered serious injuries that required surgery and months of physical therapy.  He claims he was unable to work for much of the year, and to this day suffers from impaired mobility. 

Eric Turkewitz notes that Bork's surgery may have been outpatient surgery.  This suggestion is bolstered by the fact Bork's detailed complaint does not state he was hospitalized for his injuries.  The fact that Bork was able to climb back on the dais, give his speech, and leave the event unassisted makes me question how severe the injuries actually were.  But I am willing to give Bork the benefit of the doubt and assume he is not exaggerating the extent of his injuries.

Now, let's restate the fact pattern and omit the plaintiff's identity:

A 79 year old man tripped while trying to step onto a foot-high platform.  He fell and hit his head and leg, but was able to give a speech and leave on his own.  He has minor surgery and some physical therapy.  A year after his injury, he sues the restaurant where he fell for over $1 million dollars plus punitive damages.  What reaction do you think most "reformers" would have to such a case?

There's no need to speculate.  Instead, let's look at the fact pattern from another famous case:

A 79 year old woman spilled hot coffee on herself while trying to put cream in it.  She suffered third degree burns and needed surgery and months of physical therapy.  Over a year after her injury, she sued the restaurant who served her the coffee and asks for punitive damages.

The case I'm referring to is of course Stella Liebeck's famed "McDonald's coffee case."  There are definitely a lot of similarities between the cases: A 79-year-old is seriously injured by a product not generally considered to be dangerous, and the injuries are caused at least in part by the 79-year-old's own negligence. 

It's not an exaggeration to say that the "reform" movement has crucified Stella and used her as exhibit 1 in the case against the civil justice system.  Rare indeed is the "reform" advocate who hasn't criticized Stella or her lawsuit.  But the "reform" blogs are strangely silent about Bork's suit - with one notable exception.

Let me give credit to Ted Frank at Overlawyered for having the courage to give his honest opinion of the case.  Ted wrote, "Before someone accuses us of playing this down, let me be out front and say that I find Judge Bork's slip and fall suit against the Yale Club embarrassingly silly."  "Embarrassingly silly" is quite polite compared to some of the comments from the "reformers" about Stella and her lawsuit.  But the same readers at Overlawyered who live to vilify plaintiffs are instead attacking Ted for daring to suggest that Bork's lawsuit is silly and that Bork doesn't deserve punitive damages.  One commenter stated, "Let me add that your insinuation that Judge Bork has capitulated to negative forces in the practice of law, to which he has vocally and persuasively combatted for years, is an unacceptable cheap shot at a great man."

As of the writing of this post, I haven't found any other article on a"reform" or conservative blog about Bork's lawsuit.  The right's unwillingness to criticize their own has given rise to the witty acronym IOKIYAR - "It's OK if you're a Republican."  Understandably, dozens of progressive bloggers have described Bork's lawsuit as a clear-cut case of IOKIYAR and have called Bork a hypocrite.  (IOKIYAR also describes former Senator Rick Santorum and his wife's obesity lawsuit against a chiropractor.)

Perhaps Bork is a hypocrite.  Then again, perhaps he's an injured citizen who truly believes he has a legitimate lawsuit.  While my gut reaction is that Bork's lawsuit is baseless, I'm inclined to do for him what I'd do for any other similarly situated plaintiff: Put my faith in the jury system to sort out the matter.  "Reform" advocates who criticize the jury system should take note of the fact that Bork requested a jury trial instead of a bench trial.  If noted "reform" advocate Bork is willing to trust a jury, perhaps the other "reformers" should, too.  Instead of attacking an injured 79-year-old, let's save the slings and arrows for the hypocrites who bash Stella but defend Bork.

The real hypocrites here are the many "reformers" who viciously attack Stella Liebeck for her lawsuit but who refuse to find fault with Bork or his lawsuit.  Their unwillingness to criticize Bork reinforces my own belief that the "reform" movement is dedicated to ensuring only the rich and powerful have access to the civil justice system.  

Cross-posted to TortDeform 

Technorati tags: Bork, Robert Bork, Ted Frank, Overlawyered, hypocrisy, tort reform, Rick Santorum, lawsuits, Stella Liebeck

Why do pharmaceuticals switch prescription drugs to over-the-counter?

The Prescription Access Litigation project has a wealth of information about the pharmaceutical industry.  Here's their answer to the above question. 

There are a number of reasons. Since it’s easier for a patient to get an OTC drug (you don’t have to visit the doctor and get a prescription), it’s likely that more people will buy it. So switching a drug to OTC can increase a company’s sales. Many people also have the impression that Over-the-Counter drugs are “safer” than prescription drugs, even though this is not necessarily the case. So switching a drug from prescription to OTC can convince people who might worry about the drug’s safety to buy it.

But sometimes drug companies make this switch as part of a larger strategy to protect and increase their profits. This usually happens when a prescription drug’s patent is about to expire. A company that discovers a new drug gets a patent that prohibits anyone else from selling that drug for a certain number of years. When that patent expires, the company’s profits on that drug drop, as competitors start selling generic versions of it. Brand-name drug companies have used a variety of questionable schemes to protect their sales when this happens. Sometimes they introduce an “extended release” version of the drug (that lasts, say, 12 hours instead of 6); or they introduce a “new” brand-name drug that’s really a minor tweak of the old drug.

Sometimes, as part of this, the brand-name drug company will try to get the FDA to switch the drug from prescription-only to Over-the-Counter. When Prilosec’s patent expired, the manufacturer petitioned the FDA to make it over the counter, while at the same time introducing a “new” prescription drug, Nexium. Claritin’s manufacturer did the same thing when its patent expired, while introducing Clarinex, a “new” prescription allergy drug.

Making this switch has a couple of effects:

• It can hurt the sales of the generic versions of the prescription drug, since it’s easier for consumers to just buy the OTC drug than go to the doctor and get a prescription. There are already numerous obstacles to generic drug companies making cheaper prescription generics available to consumers. This tactic just adds to those obstacles, potentially hurting consumers in the long run as fewer generics come onto the market.
• Health plans usually will not cover the OTC version, but often will cover the “new” brand-name prescription drug. Health plan co-payments for drugs are often lower than even the cost of the OTC drug, meaning that it’s often actually cheaper for the consumer to pay the co-payment for an expensive brand-name prescription drug than the full-price of the OTC version. But the overall cost to the health care system, and thus to all of us, is higher because of the higher price of the brand-name prescription drug.
• The manufacturer usually starts a splashy advertising campaign to convince consumers that the “new” drug is a major breakthrough that makes it worth the high pricetag. They may also run ads for the OTC version. When Nexium came on to the market, AstraZeneca spent huge amounts on ads focusing on its treatment for “gastric reflux disease,” a serious sounding disease, while ads for Prilosec OTC (essentially the same drug) focused on heartburn, a reasonably-harmless sounding symptom.
• If the company does new studies (clinical trials) as part of its request to the FDA to allow the switch, it gets to be the only OTC version on the market for three years. It can then aggressively market the OTC version and preserve a good-size chunk of its profits on the drug.

Source: Prescription Access Litigation (PAL) Project

When you hear about the high cost of medical insurance, remember this article.

Technorati tags: pharmaceuticals, prescription drugs, generic drugs

Pharmaceutical doesn't blame tort system for high prices

And not greedy trial lawyers, surprisingly. 

“The psychology of the industry is that, if you are first, the price should be high,” [Elan CEO] Martin tells The Financial Times. “The economic structure is unsustainable. The tension will grow and something has to give.”

Source: Pharmalot » What Did He Say? Elan CEO: Lower Prices

Of course if you're first to market, your prices are going to be high.  It's just refreshing to read a CEO admit thaty and not claim it's because of the tort system.

Technorati tags: Elan, Kelly Martin, Pharmaceuticals, drug prices, pharmalot

Wow, I just lost a bunch of respect for Donald Trump

I actually thought I couldn't lose any more respect for Trump after he whored himself out to NBC... but he's sunk to an even lower low.

As I write this, he's on QVC hawking "Trump Steaks."  Now, I love steak.  It's my favorite food.  Supposedly, it's Trump's favorite food, too.  Anyone who knows steaks knows the best way to have them is medium rare or rare.  Trump, on the other hand, "only" orders them "well done."  I'm watching him eat these steaks and they're so overdone it's ridiculous.  I'm just waiting for the man to ask for a bottle of ketchup... who the hell orders a $70+ filet mignon well done?  A ponce.

And lets talk about the steaks.  They appear to be riddled with tendons, fatty (not well-marbled), and tough.  The woman cutting the steaks is trying to hide the fat she's cutting off.  And the grill marks!  The steaks are a deathly shade of pale gray but the grill marks are so dark and fake looking that they probably came from Just For Men.  If they weren't sprayed on, I'm surprised.

Oh!  Did you know that Trump Tower is the number one tourist attraction in New York City, beating out such passe attractions as The Empire State Building, The Statue of Liberty, Ground Zero, and Times Square? 

Now the steak is falling apart and the lady is trying to hide the fat again.  And now Trump is bloviating about how beautiful the steaks are when he cooked them at home last weekend.  Uh huh.  If Trump barbecued one of these steaks for himself last weekend, then I'll eat my shoe.  Or at least one of his steaks, which are probably tougher.

Mr. Trump, you sir are either a liar or know nothing about steak.  Your $60 porterhouse steak looks as good as a $10 porterhouse at my grocery store.  And I won't even dignify your $3.00 hot dogs with a comment. 

P.S. Keep sucking up David, I know you'd love to land a rich one.

Technorati tags: Steak, Donald Trump, QVC, shyster, rip off, Trump

" 'Reform' is Republican for 'screw the poor and the middle class.' "

 If you're looking for a great f-bomb laden critique of the Bush administration and its pro-business, anti-consumer policies, Lance Mannion just posted a good one: 

Don't worry.  The market will take care of it.  When enough people get sick and know what companies' products made them sick and stop buying from them and when enough stores that carry those products close and enough lawsuits are filed, then all that tainted and spoiled food will just magically vanish from the marketplace.

Except the Republican Free Marketeers want to take away your ability to sue.  They call it tort reform.  It's like Social Security reform.  "Reform" is Republican for "screw the poor and the middle class."

Nevermind.  At least on your sickbed or in your grave you'll have the satisfaction of knowing your suffering saved the rest of us a few pennies per pound on imported produce.

Source: Lance Mannion: They poison everything they touch

He's right.  A great many "reformers" do indeed think the invisible hand of the market will sort everything out and that government regulation will just cost money.  It seems all the invisible hand can do these days is flip us a very visible bird.

Technorati tags: Lance Mannion, tort reform, Bush, invisible hand

Monday Roundup

Dirty Deeds Don't Come Cheap: A common charge levied by the business community is that trial lawyers and plaintiffs are corrupt.  Greedy Trial Lawyer comments on a hospital which felt the best way to defend itself in a malpractice case was to destroy evidence and encourage employees to lie.  Their deceit cost them $1.3 million in sanctions.  Another news story, which is no longer on the web, claimed that the hospital's attorney was sanctioned as well.

There are hospitals that take the concept of risk management too far. From the Associated Press account of the conduct of one hospital's risk manager (and the likely assistance of other hospital folks) we learn post-malpractice deceit and concealment can be a management tool.

Source: Hospital Risk Management Carried To Its Dishonest Extreme - Greedy Trial Lawyer

Did a drug addict help get your meds approved by the FDA?:  As you probably know, an important part of getting a drug approved by the FDA is a clinical trial.  Who runs those trials?  Doctors, with the help/backing/assistance of the pharmaceutical company.  How do the pharmaceuticals choose the doctors?  One must wonder:

From 1997 to 2005, at least 103 doctors who had been disciplined or criticized by the state medical board received a total of $1.7 million from drug makers. The median payment over that period was $1,250; the largest was $479,000.

The sanctions ranged from reprimands to demands for retraining to suspension of licenses. Of those 103 doctors, 39 had been penalized for inappropriate prescribing practices, 21 for substance abuse, 12 for substandard care and 3 for mismanagement of drug studies. A few cases received national news media coverage, but drug makers hired the doctors anyway.

Source: Pharmalot » Scraping The Bottom Of The Medical Barrel: Despite Sanctions, Docs Get Paid For Studies

BofA is down with the OCC: Most people don't know what the OCC is, let alone what it does.  The OCC is the Office of the Comptroller of Currency.  The agency is charged with (among other things) regulating national banks, such as Bank of America.  The OCC's preemptive authority has been expanded to the point that a state cannot prohibit a shopping mall from selling gift cards with misleading fees and hidden expiration dates.

The problem is that by focusing on the activity rather than the actor, the Court endorsed a broad understanding of the OCC's preemptive authority, and one that could possibly extend to oust state regulation of all kinds of commercial actors, none of whom are actually "national banks," and none of whom are therefore expressly protected by federal statute. Justice Stevens, in his eloquent dissent, raised the specter of such a possibility, and the First Circuit, yesterday, proved Justice Stevens prophetic.

Source: Concurring Opinions: Why Watters Matters: An Early Lesson from the First Circuit

No wonder corporate defendants appeal so often: Attorney Anne Reed comments on a new study from Cornell Law Professor Theodore Eisenberg which shows defendants are far more likely to win on appeal than plaintiffs.  And "reformers" complain about appellate courts being unfair to defendants!

[D]efendants were far more likely than plaintiffs (41.5% versus 21.5%) to successfully reverse an adverse trial outcome. Indeed, from the perspective of a plaintiff victorious at trial, the appeals process offered a chance to retain victory not far from what a coin-flip would predict. For defendants, by contrast, victories at trial were far more secure.

Source: Deliberations: Tip: On Appeal, Bet On Defendants And Bench Trials?

A different kind of immigration problem: I did not know that illegal workers were entitled to workers compensation.  For better or for worse, they are.  I would prefer that they be subject to tort claims, thus discouraging the usage of illegal workers.  However, until that happens, I don't think employers should get their injured workers deported when they file for workers comp.  That's low.

In a truly startling case, an undocumented worker who was maimed in a chainsaw accident at work was arrested and deported just before a hearing on his workers' compensation claim.

Edgar Velázquez told a reporter that he believes his employer called immigration agents to court.

Source: Undocumented worker deported just before workers' compensation hearing - Greensboro Personal Injury Lawyer

A fair application of the death penalty: If it were up to me, bribing a governmental official or accepting such a bribe would be a capital offense.  But it's not up to me, and corruption in this country means a light sentence.  It's rare, but here's a time where I think the Chinese government got it right.

The former director of China’s top food and drug safety agency was sentenced to death on Tuesday after pleading guilty to corruption and accepting bribes, the state-controlled news media said...

The death penalty wouldn’t be excessive punishment for Zheng,” said Wang Yigao, a professor at the Hunan Academy of Sciences. “Zheng was simply using the power given by the state to pursue his personal ambition.”

Source: China Sentences Former Drug Regulator to Death - New York Times

Cross-posted to TortDeform 

Technorati tags: FDA, immigration, appeal, tort reform, Theodore Eisenberg, Greedy Trial Lawyer, Anne Reed, OCC, Watters, First Circuit

Social irresponsibility must be the answer, then!

Ted Frank at the AEI will be moderating a discussion today about managing corporate image.  I wish I was close enough to D.C. to attend, as the debate might explain why being socially irresponsible - outsourcing jobs, moving factories to countries with lax environmental laws, encouraging your employees to apply for Medicaid, getting life insurance on employees with dangerous jobs instead of improving safety conditions - is the better business practice. 

Does corporate social responsibility represent a good business strategy in the long run, or has reputation management become, in effect, an apology for making money? If so, does this trend ultimately pose a threat to free enterprise?

Source: PointofLaw.com | PointOfLaw Forum: Corporate Image Advertising and the Future of Free Enterprise

To answer the question posed above, reputation management has become, in effect, an apology for making money by exploiting workers, polluting or otherwise damaging the Earth, and putting profits well ahead of safety. 

Ted notes that Steven Hantler of DaimlerChrysler (Is it going to be Chrysler again?) will be attending.  Hantler might be familiar to you for his policy of adopting scorched Earth litigation tactics for the sole purpose of discouraging trial lawyers from suing his employer, even if the underlying case is meritorious.  Hantler also gained a reputation as being a hypocrite for spending "six figures" to defend an $8,000 claim, and then arguing that the winning plaintiff wasn't entitled to $143,000 in attorney's fees.  Apparently, "loser pays" is only fair to corporations when they aren't the loser.

Technorati tags: Steven Hantler, AEI, Steve Hantler, social responsibility, social irresponsibility

Windows Live Writer 2.0 Beta is Out

I praised it once before, but now it's time to praise it again.  Windows Live Writer 2.0 has taken (cliche on the way) the product from good to great.  If you're a blogger, you should definitely check it out.  Here's an excerpt from Microsoft's site: 

Writer can to publish to Windows Live Spaces, SharePoint, WordPress, Blogger, LiveJournal, TypePad, Moveable Type, Community Server, and many other weblog services.

Source: Windows Live Writer Beta

I love how easy it is to blog about something I find on the web now.  Click the link above and download a copy. 

Technorati tags: Windows Live Writer

Enron-inspired policies net insurers billions

I haven't noticed attorney Chris Nichols' blog before, but it looks like one I need to pay attention to.  He's written an informative article that explains that A: juries never get to know about insurers or insurance policies, and B: that at the recommendation of a former Enron consulting company, insurers are denying more claims than ever... and making billions doing so.

As I'm getting ready for a trial, I'm constantly reminded that the "reason the case is going to trial" has more to do with the defendant's insurance company than anything else.  It's frustrating as an attorney fighting for justice because I have the burden of proof for the "facts" of the case, but what the jury really needs to hear, I'm not allowed to tell them.

Why?  Well, the insurance industry has effectively "gagged" anyone from telling the jurors why the case is going to trial.  Typically, the reason for that is that the insurance company who pulls the strings on the defendant, WANTS the case to go to trial, because they know that for every case that goes to trial, 99 just give up, and the insurance company gets to pay less than what is "fair and just" as the rules require...

Believe it or not, insurance companies have saved Billions of dollars since the mid 1990s, by improperly denying claims, and otherwise forcing litigation by paying far below the jury verdict average to settle claims. Frivolous defenses to legitimate claims have resulted in an increase in litigation, against people insured by these companies. This is part of a deliberate claim handling program implemented by McKinsey & Company, the same consulting firm that set up Enron's business model, at many of the nation's largest insurance companies. See "Record Insurance Profits" Article...

McKinsey & Company counted on this when they told Allstate Insurance in the mid 1990's to quit treating people with “Good Hands” and instead treat them with “Boxing Gloves.” When Allstate forced more litigation and posted record profits, the rest of the insurance industry followed their lead. It is now standard operating procedure in the insurance industry to spend multiple times what a reasonable settlement would be to fight the claim, simply to prove to injured people and their lawyers that filing a claim for injuries is more trouble than it is worth. Read a Transcript of Anderson Cooper's Interview with one of Allstate's Victims

Source: North Carolina Trial Law Blog: The Truth That Juries Never get to See

He's absolutely right about spending multiple times what a claim is worth.  They aim to intimidate attorneys into settling cases for less than the cases is really worth, rather than the time-and-money consuming trial process.

Technorati tags: Allstate, Enron, insurance, insurance cartel, improper claims denial, Chris Nichols

Better never than late...

The National Association of Manufacturers just yesterday posted about the incredibly flawed study done by the Pacific Research Institute about the supposed costs of the tort system:

"Out-of-control litigation and a broken legal climate cost Americans the equivalent of almost $10,000 for every family of four, a study by the Pacific Research Institute has determined. Here to describe his findings from "Jackpot Justice: The True Cost of America's Tort System" is the study’s author, Lawrence J. McQuillan, PRI’s Director of Business and Economic Studies. Renee Giachino of The American Justice Partnership adds the AJP's latest news and views on tort reform.

America’s aging infrastructure is a major factor in manufacturing’s ability to compete. John Horsley, executive director of the American Association of State Highway and Transportation Officials, highlights a new report that lays out the full scope of the problem." (Emphasis added.)

Source: This Week on America's Business

 

It would have been better if NAM had never cited the PRI's study, but it's embarrassing they cited it this late in the game.  Note that just one paragraph later they point out a real problem to manufacturers...

Technorati tags: NAM, National Association of Manufacturers, John Engler, Lawrence J. McQuillan, Pacific Research Institute, bogus study

Are there really doctors this crooked? And do the pharmaceuticals really pay the bribes?

Another development in the Avandia story is the claim that Dr. John Buse was improperly pressured by GlaxoSmithKline to keep quiet about his concerns about the drug.  The entire article at the NY Times is worth a read, but the portion below really jumped out at me: 

"In a recent interview, Dr. Peters said that she had previously received money from Glaxo as a speaker on behalf of Avandia, but had resigned because she was worried about the drug’s risks.

About five years ago, she said, she helped change the formulary — or list of preferred drugs — for Los Angeles County so that patients in her clinic would get prescriptions for Actos rather than Avandia.

“The Avandia people, it was just so surprising, they asked me what I wanted to keep Avandia on the formulary,” Dr. Peters said, recounting events that occurred sometime in the 2000-to-2002 period. “They asked me, “What can we give you that will have you keep it on the formulary?’ ”

Dr. Peters said that she asked the company to establish a database at the clinic that would track the outcomes of patients on both drugs.

When she asked for the database, which would have cost several thousand dollars, she said, a company representative replied: “That’s all you want? Other doctors ask to go to the Caribbean.”

Dr. Peters said that Glaxo representatives first asked her to write a proposal, then asked her to go to Philadelphia to meet with company officials before the database could be approved. She decided to purchase it herself." (Emphasis added.)

Source: Doctor Says Drug Maker Tried to Quash His Criticism of Avandia - New York Times

If it's true that doctors ask for and receive "free" vacations to lie about the safety and efficacy of drugs, we need to put concerns about medical liability aside and focus on medical reliability.  If this practice is occuring, I hope it's investigated and those involved see actual jail time.  And when I say "those involved" I don't just mean the sales rep, but I mean the executives who approved the purchase orders.

Cross-posted to TortDeform 

Technorati tags: Avandia, GlaxoSmithKilne, Dr. John Buse, John Buse, bribery