Wal-Mart Stores Inc. is dropping a controversial effort to collect over $400,000 in health-care reimbursement from a former employee who is confined to a southeast Missouri nursing home since she suffered brain damage in a traffic accident.

The world’s largest retailer said Tuesday in a letter to the family of Deborah Shank it will not seek to collect money the Shanks won in an injury lawsuit against a trucking company for the accident. For a complete report on Wal-Mart’s change of heart decision, click here.

We originally blogged about this story in November 2007 (click here to see that piece) after a federal appeals court in Missouri gave the green light to Wal-Mart’s egregious collection practices through subrogation. The efforts by Wal-Mart were condemned on many fronts. The LA Times called the move legal, but wrong (click here to read that opinion piece). The folks at Wal-Mart Watch called it moral bankruptcy (click here to read that opinion piece). The American Bar Association warned that some people who are injured and receive a settlement or verdict are getting a big surprise: more litigation from the health plan that paid their benefits and now wants the money back.

It’s good to see that the pressure paid off and that the family can move on with their lives.

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.

Where do you turn when you have a legal question, want to research it on your own, want to be able to do it from your computer, and want it for free? Well, thanks to the folks at Fastcase, you now can turn to the Public Library of Law (PLoL).

Fastcase created the PLoL to make it easy to find the law online. PLoL is claimed to be the largest free law library in the world and is assembled from law sources available for free scattered across many different sites. The PLoL site contains the following legal sources:

• Cases from the U.S. Supreme Court and Courts of Appeals
• Cases from all 50 states back to 1997
• Federal statutory law and codes from all 50 states
• Regulations, court rules, constitutions, and more!

It also contains a user guide and resources to get you started.

While PLoL is a great starting place to find law on the web, users should be cautious, as it certainly does not replace legal advice and research from a seasoned attorney.

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. 

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. 

Florida Insurance Commissioner Kevin McCarty announced that he is suspending the certificate of authority of Allstate Companies to write new insurance in Florida until they fully comply with the subpoenas served October 16, 2007 by the Office of Insurance Regulation (Office). A copy of the order is available by clicking here.

The decision by the commissioner follows Tuesday’s (January 15, 200 action when he abruptly halted the scheduled two-day hearing into the Allstate Companies’ reinsurance program, their relationships with risk modeling companies, insurance rating organizations and insurance trade associations. The subpoenas seek disclosure of the McKinsey Documents, in which McKinsey & Co. instructed Allstate how to systematically underpay claims starting in the mid 1990s. The content of the documents is so explosive that Allstate has already ignored a $25,000 per day fine in Missouri for its ongoing failure to provide the McKinsey Documents in that state.

The McKinsey documents were the subject of a previous blog which can be viewed by clicking here.

“In view of Allstate’s ongoing, blatant disregard of our subpoenas, I have little choice but to take an action that will send a clear message about how seriously I am taking this issue,” said Commissioner McCarty. “Suspending their certificate of authority to write new business in our state should make my point.

“If Allstate is willing to pay $25,000 per day in fines to a Missouri court for its ongoing failure to provide similar documents, it’s obvious to me that it will take more than a monetary sanction to get them to comply with our subpoenas.”

Allstate was to have provided all appropriate company documents related to the above topics at or before Tuesday’s hearing, but failed to do so. Instead, the Office received 51 pages of objections to the subpoenas.

The suspension applies to Allstate Insurance Co., Allstate Indemnity Co. and Allstate Property and Casualty Co., and it only suspends the companies from writing new business in Florida.

Existing policyholders will not be affected. Allstate must continue to service them and the companies must make all required statutory filings including, but not limited to, audited annual financial statements, quarterly financial statements and rate filings.

“The duration of the suspension is up to them,” added McCarty. “It will be lifted when I am satisfied that we have received each and every document we need to properly investigate the important issues before us.

“It continues to trouble me that Allstate has not complied with our subpoenas and is not willing to explain to us their relationships with rating agencies, modeling companies and trade groups and how these relationships might have influenced the huge rate increases they have requested. This clearly cannot be in the best interests of Florida consumers.”

This is the first time the Florida Office of Insurance Regulation has suspended a company for failure to “freely” provide documents as required by Florida law.

A copy of the subpoena is available by clicking here.

A copy of Allstate’s response is also available by clicking here.

In powerful new videos, three courageous individuals share how systemic health care quality problems forever changed their lives and the lives of their parents, children, and families. The subjects in the videos are members of the Consumer Health Quality Council of Health Care for All and make a powerful call for reform. You can view them by clicking here.

Health Care For All seeks to create a consumer-centered health care system that provides comprehensive, affordable, accessible, culturally competent, high quality care and consumer education for everyone, especially the most vulnerable. The organization works to achieve this as leaders in public policy, advocacy, education and service to consumers in Massachusetts.

The video stories show how systemic problems in the quality of health care can have a permanent impact on lives. Health Care for All posted these stories to share their experiences and to enact change in the health system for the benefit of future consumers.

In the first video, Linda lost her mother to preventable medical errors. In the second, Ginny’s life was changed forever by a preventable hospital-acquired infection. And in the third, Lisa survived a terrible misdiagnosis and as an empowered health care consumer later saved her daughter from the same misdiagnosis.

If you are moved to do something, please visit http://www.hcfama.org/quality to join the movement for a safer, higher quality health care system.

The property/casualty insurance industry continued in 2007 to systematically overcharge consumers and reduce the value of home and automobile insurance policies, leading to profits, reserves, and surplus that are at or near record levels. The study, released by the Consumer Federation of America, estimates that insurer overcharges over the last four years amount to an average of $870 per household.

The report provides extensive data demonstrating that property/casualty insurance companies are paying out lower claims in relationship to the premiums they charge consumers than at any time in decades. The pure loss ratio, the actual amount of each premium dollar insurers pay back to policyholders in benefits, was only 54.6 cents in 2007. Over the past 20 years, the amount paid back as benefits has dramatically declined from over 70 cents per premium dollar, indicating a huge loss in the value of insurance to consumers.

“Consumers ultimately pay the price for the unjustified profits, padded reserves, and excessive capitalization that exist right now in the insurance industry,” said J. Robert Hunter, the Director of Insurance for the Consumer Federation of America (CFA) and author of the study. Hunter is an actuary, former state insurance commissioner, and former federal insurance administrator.

“The insurance industry reaped record profits in 2004 and 2005, despite significant hurricane activity,” said Hunter. “Profits in 2006 rose to unprecedented heights and 2007 may set a fourth consecutive profit record,” he said. “Unfortunately, a major reason why insurers have reported record-high profits and low losses in recent years is that they have been methodically overcharging consumers, cutting back on coverage, underpaying claims, and getting taxpayers to pick up some of the tab for risks the insurers should cover,” said Hunter.

You can view the full study by clicking here.

The state Supreme Judicial Court ruled last week that a doctor can be sued over a car accident caused by his patient. It was a reasonable expansion of tort law, held physicians accountable for negligent conduct in prescribing harmful medications without advising of the attendant risks, and will make the streets safer. In its opinion, the court said that the mother of a boy who was hit by a car and died can sue the physician who prescribed numerous medications to the driver, including narcotics that can cause drowsiness. The mother’s lawyers alleged that the physician, Dr. Roland Florio, who practices in Brockton, failed to warn his patient, David Sacca, about the side effects of the medication and the potential danger of driving while taking them. Sacca passed out and drove off the road March 22, 2002, hitting 10-year-old Kevin Coombes, who was standing on the sidewalk with a friend.

Justice Roderick L. Ireland, who wrote the lead opinion, compared a doctor who fails to warn a patient about a drug’s side effects that could endanger others to a bartender who serves a drunk customer. In the opinion for the court, Judge Ireland wrote:

“To recover for negligence, a plaintiff must show ‘the existence of an act or omission in violation of a . . . duty owed to the plaintiff[s] by the defendant.” Cottam v. CVS Pharmacy, 436 Mass. 316, 320 (2002), quoting Dinsky v. Framingham, 386 Mass. 801, 804 (1982). Whether a defendant owes a plaintiff a duty of reasonable care is a question of law that is decided “by reference to existing social values and customs and appropriate social policy.” Cremins v. Clancy, 415 Mass. 289, 292 (1993). “We have recognized that ‘[a]s a general principle of tort law, every actor has a duty to exercise reasonable care to avoid physical harm to others.’ See Remy v. MacDonald, [440 Mass. 675,] 677 [(2004)] . . . . A precondition to this duty is, of course, that the risk of harm to another be recognizable or foreseeable to the actor. . . . Consequently, with some important exceptions, ‘a defendant owes a duty of care to all persons who are foreseeably endangered by his conduct, with respect to all risks which make the conduct unreasonably dangerous.’ Tarasoff v. Regents of the Univ. of Cal., [17 Cal. 3d 425,] 434-435 [(1976)].” (Citations omitted.) Jupin v. Kask, 447 Mass. 141, 147 (2006). Although a jury are uniquely qualified to determine the scope of the duty at issue, see Commonwealth v. Angelo Todesca Corp., 446 Mass. 128, 137-138 (2006), “[t]he existence of a legal duty is a question of law appropriate for resolution by summary judgment.” Afarian v. Massachusetts Elec. Co., 449 Mass. 257, 261 (2007). “If no such duty exists, a claim of negligence cannot be brought.” Remy v. MacDonald, supra.

In the context of medical professionals, this court has held that a doctor’s duty of reasonable care, owed to a patient, includes the duty to provide appropriate warnings about side effects when prescribing drugs. Cottam v. CVS Pharmacy, supra at 321. As a result, “[p]hysicians . . . are required to inform their patients of those side effects they determine are necessary and relevant for patients to know in making an informed decision.” Id. When the side effects in question include drowsiness, dizziness, fainting, or other effects that could diminish a patient’s mental capacity, this warning serves to protect the patient from, for example, the foreseeable risk of an automobile accident caused by driving while under the influence of the medication. In the case of automobile accidents, it is clear that the foreseeable risk of injury is not limited to the patient.

In similar cases outside the medical context, when the foreseeable risk in question is the risk of an impaired driver causing an automobile accident, we have extended a duty of reasonable care to all those involved in such a foreseeable accident, including other motorists, bicyclists, and pedestrians. See Michnik-Zilberman v. Gordon’s Liquor, Inc., 390 Mass. 6, 7-8, 10-12 (1983) (liquor store liable for injuries to cyclist struck by automobile driven by minor to whom liquor store had sold beer); Jesionek v. Massachusetts Port Auth., 376 Mass. 101, 106 (197 (jury could have found owner of forklift liable to pedestrian injured when drunken seaman drove forklift over her foot; foreseeable consequence of negligently leaving key in ignition); Adamian v. Three Sons, Inc., 353 Mass. 498, 501 (196 (negligence of bar extended to motorist killed in collision with automobile driven by man who became intoxicated at bar). This is so even when the plaintiff is unknown to the defendant before the accident. See Jupin v. Kask, supra at 149 n.8 (foreseeability of danger to specific person irrelevant; sufficient that general kind of harm was foreseeable); Adamian v. Three Sons, Inc., supra at 500-501 (foreseeable consequence of selling liquor to intoxicated patron was that accident would injure third party, even when identity of third party was unforeseeable).

Relying on those same principles, the court concluded that a physician owes a duty of reasonable care to everyone foreseeably put at risk by his failure to warn of the side effects of his treatment of a patient.

The decision does not mean that the plaintiff in Coombes wins the case. It simply means that a jury will be able to decide whether or not Dr. Florio acted unreasonably in failing to warn his patient of the side effects. And in that respect, it was the right decision. It leaves the decision in the hands of a jury, and reinforces the social purposes of tort law. Indeed, the social purpose of Tort Law is accident and injury prevention. It is only when we fail in our initial purpose that we move to the secondary purpose, compensation for the injured person. Moreover, the decision upholds the notion advanced by John Adams in 1774: “Representative government and trial by jury are the heart and lungs of liberty. Without them we have no other fortification against being ridden like horses, fleeced like sheep, worked like cattle, and fed and clothed like swine and hounds.”

Some in the medical profession complain that the decision will raise malpractice insurance rates and drive doctors out of Massachusetts. As shown in previous pieces on this site, these are unsupported myths, and will have little effect on insurance rates (see The Great Medical Malpractice Hoax, Doctors face high rates despite reforms). To the extent the decision makes doctors act more responsibly, the society benefits.

The full text of the court’s opinion can be viewed by clicking here. View the oral arguments before the court by clicking here.

On December 19, the House of Representatives, by a vote of 407 to 0, passed legislation reauthorizing the Consumer Product Safety Commission (CPSC) and included statutory language specifically prohibiting the CPSC from issuing any rule or regulation that expands the scope of federal preemption of state law. The measure — officially called the Consumer Product Safety Commission Modernization Act of 2007, H.R. 4040 — was rushed along through a procedural maneuver that let Congress vote before leaving town for the holiday recess. The text of the bill can be viewed by clicking here.

The legislation creates the toughest lead standard in the world, as well as significantly increase funding and staffing for the Consumer Product Safety Commission (CPSC). “This legislation is a common-sense solution to our national consumer safety crisis,” said Rep. John D. Dingell (D-MI), Chairman of the Committee on Energy and Commerce and an original sponsor of the bill. “The American people and, especially, American parents are demanding swift action to protect children from dangerous imports and contaminated toys. This legislation creates the toughest lead standard in the world for children’s products and I’m proud that policymakers, consumer advocacy groups and industry leaders have worked together to move this bill forward. I look forward to supporting H.R. 4040 on the House floor and hope to see it approved as quickly as possible.”

H.R. 4040 increases funding for the CPSC, giving them more resources to conduct better oversight of consumer products, especially those imported from abroad. This year the CPSC’s budget was a mere $62 million even though the agency regulates a $1.4 trillion industry. H.R. 4040 increases the budget of the CPSC to $100 million in fiscal year 2011. This increased funding will allow the CPSC to employ more product inspectors and investigate more reports of injuries and deaths caused by consumer products.

The Public Affairs lobby team of the American Association of Justice worked successfully with the House Energy and Commerce Committee and Democratic Leadership to include terrific language in the Committee Report, which is the official statement of congressional intent. The Committee Report language formally and specifically disapproves the CPSC’s effort to override state common law by including preemption language in preambles to its proposed rules and final rules. Specifically with regard to preemption language in the preamble to a recently issued rule on mattress flammability, the Report states “this preamble should not be accorded deference by State or Federal Courts.”

The Report also specifically identifies the importance of “tort actions based on negligence” which the Committee says “are predicated on procedures and standards developed over hundreds of years of American and English jurisprudence.” And it says this about the preservation of common law remedies generally: “The preemption provisions of the statutes under the jurisdiction of the CPSC are clear, and State common law actions and standards are not preempted.”

This is a tremendous victory for consumers and for our clients.

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.