Will the little guy ever get ahead?

Will the little guy to get ahead? That’s certainly a legitimate question in light of Jeffrey Rosen’s new article which appeared in the Sunday New York Times Magazine on March 16, 2008. To view the article, click here.

In the article entitled Supreme Court Inc., Rosen contends that the United States Supreme Court has been shaping up nicely for business interests at the expense of ordinary consumers. With their pro-business jurisprudence, the justices on the Supreme Court are capturing an emerging spirit of agreement among liberal and conservative elites about the value of free markets. It goes on to suggest that this is a culmination of a carefully planned, behind-the-scenes campaign over several decades to change not only the courts, but also the country’s political culture.

The article speaks a lot about the powerful influence of the United States Chamber of Commerce, which over the course of the last 30 years, has championed business interests before the Supreme Court. At the same time, there has been a decline of economic populism in Congress, a weakening of trade unions, and the rise of globalization. This combination has led to a series of decisions that have limited access by consumers to the courts in product liability cases, have undermined jury awards of punitive damages, and has let corporate corruption go unchecked in the courts.

The article has not gone without criticism. Indeed, some have suggested that Rosen has supplied little evidence that the Court has become pro business in recent years. Others have suggested that Rosen has distorted legal history and misunderstands the proper role of the judiciary. In either event, the article is a compelling read and certainly signals a seismic shift in the ability of ordinary consumers to have their day in court.

Consumers have been inundated with tort reform legislation that has severely limited their ability to seek justice, and now it appears that the courts themselves are closing the doors. You can view a series of tort reform pieces by clicking here.

FDA ignores Congress and lets drug companies off the hook

This news just came in from the American Association for Justice (AAJ):

Last month, the Food and Drug Administration (FDA) issued a proposed rule which directly contradicts Congress’ expressed intent when it passed the Food and Drug Administration Amendments Act of 2007 (FDAAA), an act which encompasses the Prescription Drug and User Fee Act.  If the rule becomes final, drug companies will enjoy more relaxed labeling requirements and will surely use the rule to claim immunity for failing to warn patients of potential drug hazards.

When Congress passed the FDAAA it included language confirming the responsibility of the drug manufacturer to promptly update its drug label when they become aware of new safety information.  Congress was clear that it intended to keep the burden squarely on the drug companies to update warning labels. 

Nevertheless, the FDA has promulgated this new rule against Congress’ expressed wishes.  Congress explicitly stated that it did not intend to ease the requirements on drug companies to inform consumers of potential drug hazards.  It reiterated the need for drug companies to change its label if the drug company learns of reasonable evidence of that risk. 

In fact, the drug companies fought and lobbied hard to include language to loosen warning label obligations that the Congress specifically left out of the final bill.  But since the drug companies couldn’t get Congress to agree to lessen their responsibilities towards consumers, they turned to the Bush Administration.

Unfortunately, the FDA’s tactics are not new to Bush Administration bureaucrats.  Unelected federal agencies have been ignoring congressional directives in a number of other cases.  The Environmental Protection Agency (EPA), National Highway Traffic Safety Administration (NHTSA), Consumer Product Safety Commission (CPSC), and others are also engaging in this tactic of Bureaucratic Activism.

How can we undo this system of backdoor tort reform and prevent it in the future?  We are asking Congress take action to safeguard Congressional prerogatives and protect the public.  It is important that your Member of Congress hears from you so that they understand that this matters to you. You can obtain a pre-formatted letter To Congress by clicking Contact Congress Today.

We are committed to putting an end to this unjust form of backdoor tort reform and will continue to fight against it.  Your help in alerting Congress will also be important.  We also encourage you to take the effort one step further by making a phone call to your Members of Congress.  Send a letter, set up a meeting, whatever it takes, let them know how the FDA is letting drug companies off the hook and ignoring Congressional intent.  You can look up their contact information easily at www.peopleoverprofits.org/legdirectory. To view some talking points for your conversation, click here.

With your help, we can put an end to this bureaucratic activism. 

Debunking a frivolous lawsuit myth

The annual Stella Awards, which lists the most extravagant lawsuits of the year, has recently made the rounds on the Internet and in in-boxes. However, this year’s top lawsuit was nothing more than popular urban myth, writes Houston Chronicle columnist Rick Casey. To view the article, click here.

Casey cautions the public to take stories like those enumerated in the Stella Awards with a grain of salt and notes that stories about most “frivolous” lawsuits are usually nonsense. His lesson that he hopes readers will take from his article: The next time an Internet tale makes you think things are even worse than you thought, check it out. Especially when the tale suggests that the American system is stacked against wealthy corporations.

One easy way is to visit Snopes.com, a site that investigates urban myths.

Blocking the courthouse door

By now you have heard of Stella Liebeck and the infamous and the case against McDonald’s that arose from a hot cup of coffee. That case and the myths that grew out of it have been fodder for tort reformers of all shapes and sizes. In case you have not heard, click here.

If you are interested in the truth, then you should spend some time with a book entitled Blocking The Courthouse Door: How the Republican Party and Its Corporate Allies are Taking Away Your Right to Sue written by Stephanie Mencimer (2006). Mencimer, an investigative reporter and contributing editor to the Washington Monthly, takes on tort reformers with an energetic “serve and volley” approach. The book provides some interesting history from the 1990’s and 2000’s on how tort reform was pushed through in Mississippi, Texas and elsewhere, including the attacks on the judiciary in both of those states. It also provides some details of the little-publicized exonerations of some of the Justices like Oliver Diaz of Mississippi and folks like attorney Paul Minor who were viciously attacked and prosecuted under criminal indictments, which had their chilling effect on political donations and gave a boost to legislative reform even though less publicized acquittals resulted from the trumped up charges.

Mencimer also writes a blog called The Tortellini which is a good source of news and analysis on the subject of tort reform and is a companion to the book. As Mencimer writes: “Tort reform has become a staple of Republican politics. Limits on lawsuits are offered as a solution to everything from the health care crisis and economic stagnation to America’s moral decline. Americans overwhelmingly believe that the nation is awash in frivolous lawsuits.”

And that’s just where Mencimer’s book and The Tortellini comes in. Much of what you’ve heard about tort reform is wrong and comes courtesy of a long disinformation campaign by the U.S. Chamber of Commerce and other big business sponsors like the tobacco, insurance and automobile industries. These folks have managed to convince voters from to Hawaii to Maine that plaintiffs in civil actions are whiners, hustlers, and malingerers, and that their attempts to win the “lawsuit lottery” have created a “litigation explosion.”

The truth is much more complex and you are urged to consult these sources to get a more balanced view.

Kentucky jury finds in favor of Allstate

Allstate Insurance Co., under siege by trial lawyers who say it drags out insurance claims, won a major legal victory yesterday after a Fayette County jury in Kentucky unanimously found it was not responsible for a two-year delay in settling a Richmond woman’s claim.

Trial lawyer J. Dale Golden had alleged that Geneva Hager, 60, was the victim of an illegal, systematic scheme by Allstate to bully car accident victims into accepting lowball offers for their pain and suffering. In the trial, he had relied upon the soc-called McKinsey documents, the topic of a previous blog on this site (see Auto insurers play hardball). These documents outline the strategy which was developed in the mid-1990s with the assistance of consulting giant McKinsey & Co. Looking for a way to boost profits, McKinsey focused on soft-tissue injuries incurred in minor crashes. Playing off Allstate’s signature slogan, one document recommends the insurer put boxing gloves on its “good hands” for those who insist on going to court.

The McKinsey work was the subject of a May 2006 BusinessWeek article. Entitled In Tough Hands at Allstate, the article highlights a new book by plaintiff’s lawyer David Berardinelli of Sante Fe, New Mexico. In the book, From Good Hands to Boxing Gloves, Berardinelli tells the story of the key role played by management consultant McKinsey & Co. in reengineering auto insurance claims operations at Allstate Corp. — and it’s a story Allstate doesn’t want told.

In the Kentucky case, plaintiff had sought $1.425 billion in the seven-day trial in Fayette Circuit Court because, as her lawyer said, it was the only way of ending a corporate culture of greed. But two jurors said plaintiff’s arguments rang hollow with jurors, who voted 11-1 just minutes after beginning their deliberations. After only 35 minutes of discussion, another juror changed her mind and the verdict became unanimous, juror Betty Sherwood said.

For a newspaper report on the case from Kentucky’s Herald-Leader, click here.

The importance of lawyers

A former boss of mine from my journalism days wrote a column for his current paper (the Brockton Enterprise) about the importance of lawyers. It’s a great piece, and talks about many of the misperceptions about lawyers. He has graciously allowed me to share it with you here.

Lawyers don’t get respect they deserve

By David Maril, Enterprise staff writer

It’s become fashionable to knock lawyers.

People who couldn’t tell a funny joke to save their lives can recite insulting wisecracks about the legal profession.

The fact lawyers are held in such a low esteem came to mind the other day when Democratic hopeful John Edwards announced his intention to seek his party’s nomination for the presidency.

Before serving a term in the U.S. Senate, Edwards was a personal injury trial attorney and specialized in corporate negligence and medical malpractice claims.

He ended up making a fortune through his success as a trial lawyer.

And that, more than his inexperience serving in an executive political capacity, may be the biggest handicap he has to overcome.

His detractors will make up disparaging stories about him dragging people with fake bandages into court and then having them get out of their casts and wheelchairs to dance around celebrating over huge settlements. The fact he was defending the rights of innocent victims will be downplayed.

Unless it’s in the context of a television program, lawyers today do not get any respect. For some reason the public revels in watching lawyers protect the justice system on TV but takes a dim view of lawyers in the real world.

When the subject of lawyers is mentioned, eyes roll and complaints of red tape and high legal fees are often raised.

To some, being a lawyer ranks on the same level as being an embezzler, pickpocket or corrupt politician.

“They chase ambulances, looking for lawsuits to pry money from people and companies,” is a charge leveled quite frequently.

It’s not uncommon to hear comments like, “Lawyers and their litigation are ruining this country.”

Or — “Leave it to a lawyer to take something simple that can be settled out of court with common sense and make it a complicated issue that costs everyone money.”

A few years ago a neighbor of mine complainedafter a nearby house had been sold.

“I heard a lawyer bought the place,” he said. “Just what we don’t need, a lawyer moving into the block.”

I mistakenly thought he was joking.

OK, there are greedy lawyers. And there are attorneys around who do not always have the best interest of their clients at heart. However, every profession has its share of people who don’t measure up under close scrutiny.

Those who chase ambulances and try to exploit situations unfairly are the exception rather than the rule.

Take a moment to evaluate the people you know who are lawyers. I think it’s safe to say we are all familiar with lawyers who work tirelessly around the clock to serve their clients.

Most of the attorneys I know will go out of their way to encourage settlements in cases before they go to court. With the exception of divorce cases, where too often emotion pushes things into a win at all cost mentality, the lawyers I know are reasonable and practical.

The process alone of becoming a lawyer, forging through law school and having to pass stringent state bar exams, is enough to discourage all but the most dedicated.

Many go into the law profession to defend people without enormous wealth, giving them a chance to compete on equal footing against the rich, famous and powerful in a court of law.

Certainly it’s true we live in a society that has become needlessly controlled by litigation. But that’s not the fault of lawyers. Blame people who are too often greedy, self-centered and caught up in the ruthless nature of the corporate world for having a need to hire lawyers.

For the most part, lawyers abide by a high code of ethics and steer their clients to play by the rules.

What could be more honorable than that?

David Maril, an Enterprise copy editor, can be reached at dmaril@enterprisenews.com.

The great insurance hoax

In February, we told you how auto insurers were playing hardball in so-called “minor” crash cases (click here for February report).  Today, it’s homeowners who are under seige.

Yet again, we find an insurance industry that uses secret tactics to cheat customers out of payments as profits break records.  In a remarkable study which appears in the Sepetember 2007 issue of Bloomberg Markets magazine, authors David Dietz and Darrell Preston revealed the industry’s latest ploy on claims by homeowners:

When there’s a disaster, the companies homeowners count on to protect them from financial ruin routinely pay less than what policies promise. Insurers often pay 30-60 percent of the cost of rebuilding a damaged home–even when carriers assure homeowners they’re fully covered, thousands of complaints with state insurance departments and civil court cases show.

To read the full article, click here.

The study was also discussed in a PBS newsmagazine NOW special called Home Insurance 9-1-1.  To view the show video, click here.  In the show, these insurance industry abuses and others were detailed.  The show even included comments from California Lieutenant Governor and former Insurance Commissioner John Garamendi who observed:

“The insurance industry…is purposely misleading customers.  The first commandment of the insurance industry is, ‘Thou shalt pay as little, as late, as possible.’…You go to financial heaven if you can carry out that commandment.”
 

The NOW show also featured the author of From Good Hands to Boxing Gloves book David Berardinelli of Sante Fe, New Mexico who spoke of industry abuses in auto claims cases.  Insurance company responses to the show can be viewed by clicking here.

The study noted how insurers provide incentives to their adjusters for paying less on claims.  An internal e-mail shows how one company had pressured its adjusters, whom it calls claims representatives, or CRs, to pay out smaller amounts — and rewarded them when they did.

“As you know, we have been creeping up in settlements,” David Harding, a Farmers claims manager, wrote in an e-mail to employees on Nov. 20, 2001. “Our CRs must resist the temptation of paying more just to move this type file. Teach them to say, ‘Sorry, no more,’ with a toothy grin and mean it.” Harding praised a worker for making low settlements. “It can be done as Darren consistently does,” he wrote. “If he keeps this up during 2002, we will pay him accordingly.”

Unfortunately, while insurance industry profits continue to increase, it is the ordinary consumer that pays the price.

Legal scholars examine genuine tort reform

For decades, the term “tort reform” has been used by those who wish to destroy the civil justice system. But when eight of the nation’s most prominent scholars met to talk about tort “reform” last spring, they discussed several proposals for making real improvements in the tort system without limiting people’s access to the courts.

The Genuine Tort Reform Symposium was sponsored by American Association for Justice’s (AAJ) Robert L. Habush Endowment. Held in April at the Roger Williams University Ralph R. Papitto School of Law in Bristol, Rhode Island, it took what Roger Williams law professor and symposium organizer Carl Bogus called a “backward approach.” It gave participating scholars an opportunity to present basic reform proposals and receive feedback on their ideas before writing their papers.

David Logan, dean of the Roger Williams law school, welcomed participants to the symposium, and University of Wisconsin Law School professor Marc Galanter followed with a historical overview of the tort “reform” movement. Linda Wertheimer, Villanova University School of Law professor, spoke of tort “reform” as tort curtailment, listing several examples of damages caps and shortened statutes of limitations.

Ross Cheit, associate professor at the Taubman Center for Public Policy at Brown University, discussed several innovative proposals that would lead to greater transparency in the tort system. Professor Joseph Sanders of the University of Houston School of Law laid out factors that he considered necessary to allow “genuine tort reform” to work.

Several other professors took part in the symposium and offered unique perspectives on working to improve the civil justice system. Their papers will be published in the Spring 2008 issue of the Roger Williams University Law Review.

New Poll Reveals Voter Anxiety about Corporate Misconduct, Support for Strong Civil Justice System to Ensure Accountability and Fairness

The American Association for Justice released an important poll.  It shows significant anxiety concerning corporate misconduct and large support among voters for a strong civil justice system to ensure corporate accountability and fairness.   Key findings reveal that:  

• Americans are deeply worried about their nation’s future, and concern about corporate misconduct is a major source of their anxiety.  “Worried swing voters,” who see corporate irresponsibility as a central problem, may play a pivotal role in the 2008 election. 
• Voters support the civil justice system as an important remedy for corporate misconduct, and reject legal “reforms” that restrict plaintiffs’ ability to hold corporations accountable and obtain fair restitution. 
• Voters will support candidates who defend the civil system over candidates who assail “frivolous lawsuits” and advocate “tort reform.”  Pro-civil justice candidates not only command overwhelming support from swing voters, but also appeal to significant blocks of Republicans.

The report can be found by clicking here.

Film debunks tort myths

We’ve all heard rumblings about frivolous lawsuits.  But the news reports and ads we see on TV rarely give you an in-depth view of our civil justice system.  But that’s about to change. 

In the first segment of a film series on tort myths called Mr. Fancy Pants, viewers are treated to a glimpse into the realities of the American Civil Justice System.   We urge you to view this eight minute short film and pass the link along to your friends.  Let them know the real truth about our justice system!