August 2009 Archives

"Make a list of threats to your job and your health," CJAC President John H. Sullivan wrote in an op-ed published in today's San Francisco Chronicle.

"Layoff, pay cut, swine flu, West Nile virus, for starters. You probably won't list personal injury lawyers. But you should."

California personal injury and other plaintiffs' lawyers are working to preserve laws that make the state a haven for speculative lawsuits and a risky place for businesses to operate and create jobs.

Their other schemes include asking California courts to destroy the state's model medical liability law, and lobbying to kill individuals' right to choose less-costly arbitration to settle disputes.

"Anyone injured through the negligence of another should have access to justice and a fair opportunity for compensation," Sullivan wrote. "But when a state's litigation playing field tilts toward lawyers, then jobs and the economy suffer."

California's courthouses are expected to close once a month to help deal with the state's financial crisis, which could lead to new backlogs and delay civil trials. However, some simple changes in how courts handle asbestos cases might carve a day or more from their workloads.

That suggestion comes in an op-ed published in today's Daily Journal legal newspaper by Dominica Anderson and Kathryn Schultz. Anderson, managing partner of the Las Vegas office of Duane Morris, practices in both Nevada and California in the areas of insurance and business litigation with an emphasis on complex litigation. Schultz is an associate in the firm's San Francisco office, practicing in the areas of insurance litigation and appellate law.

They wrote:

"California judges in major counties are spending more time than ever on asbestos matters. This is happening as the asbestos workload in other states has been decreasing. In those states, many asbestos claims were filed on behalf of plaintiffs who may have been exposed to asbestos fibers but were not affected by an asbestos-related disease. In response, some courts established 'inactive dockets' to hold these 'unimpaired' claims and prioritize the administration of claims filed by the truly impaired. Other states require that minimum medical evidence of illness be shown in order to bring an asbestos claim. California has not followed suit, increasing the incentive for plaintiffs' firms to open shop here and bring out-of-state plaintiffs and their claims into California's courts.

"With court resources -- as well as defendants' funds -- dwindling, will those with actual asbestos-related disease be protected? Is it time for California's courts to establish some form of 'inactive docket' to conserve limited resources while maintaining court access for the truly sick?"

The authors conclude: "Without any procedural safeguards in place, the number of non-malignant claims, in which the plaintiff has no discernible impairment, will continue to rise in the state. As the nation's economy has demonstrated over the past year, dollars for vital government services can rapidly disappear. The courts should not wait until their asbestos dockets are completely overwhelmed before they act."

Docket Science.pdf

A month ago, we blogged about a medical center that had cut its number of malpractice claims and reduced its backlog of open claims by admitting mistakes upfront and offering compensation before being sued.

Today, a Wall Street Journal article shows this is a growing trend. According to the Journal, "... some hospitals like Baptist Children's are taking steps to admit grievous mistakes and to learn from them in order to overhaul flawed procedures. That represents a sharp departure from hospitals' traditional response when something goes terribly wrong -- retreating behind a wall of silence to guard against potential lawsuits.

"Now, some hospitals are hoping to stem the tide of lawsuits by being more open with aggrieved patients and their families. While some experts warn that disclosure will lead to an increase in litigation and costs, there are some indications that patients are less likely to sue if they receive full disclosure and an apology, along with an offer of compensation. But longer term, some administrators say the solution is to improve hospital safety records."

Another hospital cited in the story, University of Illinois Medical Center in Chicago, has had a policy since 2006 of fully disclosing medical errors, apologizing when they occur, and swiftly offering a financial settlement.

During the past four years, the number of lawsuits against the center is down 40% compared to the period between 1999 and 2004, even though the number of procedures increased 23%, according to the Journal. The chief safety officer for the hospital told the paper that while he can't say for sure that the disclosure problem was responsible for the decreases, "we can certainly say that it has not caused an increase in lawsuits or payouts."

It's a scheme that sounds more fit for a legal thriller than real life: A group of top plaintiffs' lawyers and doctors conspiring to recruit accident victims and persuade them to undergo serious -- sometimes needless -- surgeries, to inflate the size of personal-injury claims.

The result, as Fortune magazine reported, was multimillion-dollar insurance settlements, even for dubious cases, and lucrative fees for the doctors, the lawyers, and one man whom prosecutors allege was at the center of the fraud: Howard Awand, who called himself a "medical consultant."

According to Fortune:

The alleged scheme began in 1999 and lasted for at least six years, prosecutors charge. Business and court records and local press reports suggest that the group -- which numbered about 30 -- colluded in hundreds of suits that yielded hundreds of millions in settlements. According to government evidence, the group coordinated their testimony as expert witnesses, lied under oath, protected one another from malpractice lawsuits -- even after the surgeries left a few patients paralyzed -- and ate away at the plaintiffs' settlement money with kickbacks disguised as contingency fees.

In May 2007, federal prosecutors unveiled indictments against Awand and plaintiffs' lawyer Noel Gage that charged them with conspiracy, fraud, and (in Awand's case) witness tampering. But so far, Awand and his associates have thwarted medical prosecutors. A judge dismissed indictments against Awand and one plaintiffs' lawyer because a key witness wouldn't testify.

Awand moved to Indiana in 2007, but now faces a second case: He and his wife were charged with four counts of misdemeanor tax evasion. They have pleaded not guilty and the trial is scheduled for September.

Personal injury lawyer Juan Dominguez has been in the news a lot lately. The Los Angeles plaintiffs' lawyer has been accused by a judge of participating in a massive fraud in helping fabricate claims that Nicaraguan banana workers had become sterile from exposure to a pesticide used on banana plantations in the 1970s.

But Dominguez appears to be just one in a line of personal injury lawyers to set up shop in Nicaragua and recruit clients to file lawsuits against Dole Food Company, as a front-page article in The Wall Street Journal details.

Among those mentioned in the Journal is Los Angeles lawyer Walter J. Lack, named a Superlawyer of Southern California for the sixth year in a row (by none other than Superlawyer Magazine). His resume includes lead counsel in the "Erin Brockovich" toxics case and a nice mention in her movie.

Not mentioned in the article was even more prominent Los Angeles plaintiffs' lawyer and State Judicial Council member Tom Girardi. The Daily Journal legal newspaper reported last year that, as one of the paper's writers Dan Levine blogged on March 27, 2008:

Girardi, Lack face Huge Ninth Circuit Fines ... Looks like Los Angeles plaintiff attorneys Tom Girardi and Walter Lack are facing nearly $400,000 in sanctions from the Ninth Circuit for filing a frivolous appeal. The two lawyers spearheaded a lawsuit on behalf of Nicaraguan workers against Dole Food Company and other corporations over pesticide use. Check out A. Wallace Tashima's brutal 67 page recommendation here.

And Daily Journal staff writer Cortney Fielding wrote in ink the next day (a link to the full article is available at the end of this post):

"LOS ANGELES - An overlooked 'clerical error,' discovered by Dole Foods during litigation with Nicaraguan banana farmers who claimed they were injured by pesticides, could cost high-profile plaintiffs' attorneys Tom Girardi and Walter Lack $400,000 in sanctions.

"In a 67-page report released this week, 9th Circuit Judge A. Wallace Tashima was highly critical of the two attorneys. Tashima said the pair knew, or should have known, their Nicaraguan counterparts had provided them with faulty translations of a foreign writ used against Dole and Shell Chemical Co.

"He said both lawyers had therefore misled the court and filed a frivolous appeal by attempting to win a judgment in the U.S. based on those suspect documents.

"On Thursday, Girardi issued a written statement saying the sanctions against his firm, Girardi & Keese, were unfounded. He said three law firms were involved in the litigation, and his had nothing to do with the Nicaraguan writ or the appeal.

" 'Neither I nor our law firm had any responsibility for the motion. We did not draft it. We did not see it. We did not contribute to it. We did not even know when it was argued and what the result was,' he wrote. 'With respect to the appeal, the only information I had was that the ruling was being appealed. We did not write the briefs. We did not see the briefs. We did not contribute to the briefs.'

"Lack did not return calls for comment.

"The proceedings will move to a 9th Circuit panel, which will decide whether to approve Tashima's recommendation."

A curtain seems to have been pulled over this matter ever since.

Writing of the pesticide lawyers this week, Wall Street Journal reporter Steve Stecklow observed that, "Emboldened by a developing-world legal system that heavily favored plaintiffs, they filed an avalanche of lawsuits here against California-based Dole and eventually won $2.1 billion in local judgments."

But the validity of some of those cases have been called into question after Los Angeles Superior Court Judge Victoria Chaney, citing "clear and convincing evidence" of fraud, in June dismissed two cases brought by Dominguez on behalf of Nicaraguan plaintiffs. Dominguez is now under federal criminal investigation for his actions in the cases and also faces an investigation by the State Bar of California. (Read more in a Los Angeles Times story here.)

As the Journal noted: "The banana-pesticide litigation is unusual in that few of the parties involved, including plaintiffs, defense and plaintiffs' lawyers, and lab workers, dispute that many claims were faked. Judge Chaney noted that more Nicaraguans have filed claims against Dole than ever worked on the plantations when (the pesticide) DBCP was in use."

'Clerical Error' May Cost Pesticides Case Lawyers - Daily Journal.pdf

A new survey shows that a majority of Californians are very concerned about the economic future of their families and the state, and they believe lawsuits are part of the problem.

The poll, released this week by the California Citizens Against Lawsuit Abuse, asked California voters about their attitudes toward jobs and the economy. The poll of 700 registered voters was conducted by Charlton Research Company in late July.

According to CALA, more than 80% of voters surveyed reported that local businesses have laid off employees or closed their doors. More than half believe that there are too many lawsuits in the state and that lawsuits are costing Californians their jobs.

Some other highlights:

• Of the Californians polled, 92% are concerned with the economic future of California, while 76% are concerned about the economic future of their own family.

• In general, 55% think the state has too many lawsuits, and 94% feel it is important for the legislature to enact reforms to help attract more jobs to California and retain the jobs currently in the state.

• Also, 60% believe lawsuit reforms will make it easier for California to keep businesses in the state, while 62% think lawsuit reforms will make it easier for California to attract new businesses to the state.

One CJAC-sponsored bill, recently signed into law by Governor Arnold Schwarzenegger, received a little ink today.

Writing in the National Law Journal, reporter Amanda Bronstad noted that Assembly Bill 470, authored by Assemblyman Roger Niello, will allow insurance companies to directly provide medical or accident records to an insured party's lawyer. Current law in the Insurance Code only allowed the insurance company to obtain and share a copy of the report with the insured person -- but not the insured's lawyer.

"If we can make things easier, which leads to quicker settlements, everyone will be happier and there will be fewer lawsuits," Kim Stone, CJAC's Vice President-Legislation, told the Journal. "If these insurance claims get resolved quicker, you don't have to go to a lawsuit."

In a press release, CJAC President John H. Sullivan lauded the Governor for signing AB 470 and Assemblyman Niello (pictured) for authoring "a bill that will, in these difficult economic times, help carve out a piece of lawsuit bureaucracy and facilitate settlements."

Bronstad's article also noted that the Governor signed one Good Samaritan bill. Assembly Bill 83 will protect people who are not in the medical profession from being sued after they help someone at the scene of an accident, unless their actions rise to the level of gross negligence or recklessness.

Senate Bill 722, authored by Senate Pro Tem Darrell Steinberg (D-Sacramento), which CJAC opposes, was moved to the inactive file. The bill is most likely dead for the session, but it could be removed from the inactive file at any time.

The bill is unnecessary and would invite unjustified litigation in the effort to reduce greenhouse gas (GHG) emissions.

Senate Bill 722 would subject legitimate GHG offset providers -- who provide real, permanent, verifiable, and additional emission reductions -- to meritless litigation by parties who have not suffered any actual injury.

Senate Bill 722's information retention requirements would, in many cases, require the retention (or compilation) of information of little or no relevance to the emission reduction offset at issue while doing little or nothing to ensure the accuracy of emission reductions advertising. Instead, it would create fertile ground for creative pleading of imagined injuries. In addition to providing overly broad standing for "any person" to sue, the bill encourages lawsuits by authorizing attorney fees for "any action brought" by plaintiffs -- even those who do not prevail.

Senate Bill 722 - Assembly Floor Alert.pdf

Governor Arnold Schwarzenegger has signed into law an important piece of legislation that will expedite the processing and settlement of insurance claims and reduce the number of cases in California's courts.

Assembly Bill 470, authored by Assemblyman Roger Niello and sponsored by CJAC, allows an insurance company to provide a copy of a police or accident report to an insured's lawyer (instead of having to relay them through the insured).

Before the bill's passage, California's Insurance Code allowed insurance companies to obtain and share copies of police and accident reports with the insured but not with their lawyers. Since an insured person's lawyer could obtain a copy of such a report via existing laws in other California codes anyway, the new law simplifies the process by eliminating the bureaucratic run-around and allowing insurance companies to provide copies to the lawyers directly. This ensures quicker processing of insurance claims and reduces the delays and confusions that can lead to unnecessary lawsuits.

The bill was one of 137 waiting for the Governor's signature or veto as a result of the Governor's announcement in late June that he would not sign any legislation until the state budget had passed. After signing the budget in late July, the Governor signed 128 bills and vetoed nine.

Take these lawsuits with a grain of salt, the Los Angeles Times urges in an editorial this week about two suits that "bring little common sense to the table."

The lawsuits, both out of New Jersey, include one demanding a warning label that says consuming hot dogs "increases the risk of cancer," and another that demands Denny's restaurant menus include the sodium content of all its dishes.

The Times states the suits "represent the kind of where-does-it-end silliness that makes even reasonable food-labeling laws seem out to lunch."

The one benefit to such lawsuits, the paper concludes, is that crazy-making headlines make consumers ask more questions about their food.

According to the Times, "In June, Denny's introduced a line of healthier alternatives with lower salt and fat content. It did so because of consumer demand, not fringe lawsuits."

The Ninth Circuit Court of Appeals has thrown out a suit by a plaintiff who assumed the role of a "spam sleuth" in order to capture massive volumes of e-mail marketing messages to fuel his "litigation enterprise" and then share the settlement proceeds with his "clients."

The spam scam went like this, according to Recorder newspaper reporter Pam Smith:

The plaintiff, James S. Gordon, Jr. created a personal e-mail address through GoDaddy, a domain registrar and web hosting company. He then set up additional e-mail accounts for a half dozen friends and family members, and subscribed himself and his "clients" to e-mailing lists for various online promotions and prize giveaways between 100 and 150 times.

Soon after, these accounts began receiving e-mails from businesses marketing their goods and services, according to the opinion in Gordon v. Virtumundo, Inc. In 2004, Gordon began filing lawsuits in state and federal court against the companies or individuals who sent the solicitations to the e-mail accounts. In this particular case, he sought injunctive relief, several million dollars in statutory and treble damages, and his attorney fees and costs.

The court ruled that Gordon did not have standing to bring a private action under the federal CAN-SPAM Act, noting: "Gordon has purposefully avoided taking even minimal efforts to avoid or block spam messages. Instead, Gordon devotes his resources to adding his 'clients' e-mail addresses to mailing lists and accumulating spam through a variety of means for the purpose of facilitating litigation."

"The CAN-SPAM Act was enacted to protect individuals and legitimate businesses -- not to support a litigation mill for entrepreneurs like Gordon," the court continued.

However, the court noted that it has granted standing to plaintiffs with similar schemes before. In a concurring opinion, Judge Ronald Gould wrote, "We accord standing to individuals who sue defendants that fail to provide access to the disabled in public accommodation as required by the Americans with Disabilities Act ('ADA'), even if we suspect that such plaintiffs are hunting for violations just to file lawsuits."

Governor Arnold Schwarzenegger today signed two important pieces of legislation that will shield Good Samaritans from civil liability: Senate Bill 39, authored by Senator John Benoit, and Assembly Bill 83, authored by Assemblyman Mike Feuer.

The bills, which CJAC supported, amend California's Health and Safety Code to ensure that liability protections extend to all persons -- both medical professionals and laypeople -- who help out in good faith at the scene of an emergency. Both bills have urgency clauses and will go into effect immediately.

The bills were authored in response to the California Supreme Court decision in December 2008 in Van Horn v. Watson, in which the court ruled that the Health and Safety Code provides liability protection only to medical professionals who provide emergency medical care.

In that case, Lisa Torti moved Alexa Van Horn out of a car, thinking the car would explode and burn her. Van Horn alleges that the movement caused her subsequent paralysis.

Click here to read more background on the bills. Watch CJAC's Vice President-Legislation, Kim Stone, testify on AB 83 here.

Also, click here to read a news release from Assemblyman Feuer's office.

A federal judge in the Eastern District of Pennsylvania has resolved more than 500,000 asbestos claims in four months with a simple method: by ordering that each plaintiff state a specific case against each company being sued.

Legal Newsline reporter Aricka Flowers wrote: "Legal analysts say the order has made it difficult, if not impossible, for some plaintiffs to maintain their case."

As Lester Brickman, a law professor at the Benjamin N. Cardozo School of Law, explained in the article, the key to Robreno's cleanup strategy is his call for an Administrative Order Number 12, which requires the plaintiffs to produce basic information about each of their claims or dismiss the case.

Several opinion pieces published in California papers recently have explored issues with asbestos litigation in the state. Click here for details.

Two years after the Los Angeles Times ran a lengthy story on the plight of some banana plantation workers and the heroics of one Los Angeles plaintiffs' lawyer, the paper today published an entirely different account on its front page.

The plaintiffs' lawyer, Juan J. Dominguez, now stands accused by a judge of participating in a broad conspiracy built on phony claims that Nicaraguan banana workers had become sterile from exposure to a pesticide used on banana plantations in the 1970s, according to the paper.

Cases that Dominguez expected would go to trial this year have been thrown out. A $3.2-million jury verdict on behalf of six plaintiffs in 2007 is likely to be overturned.

Dominguez, 52, continues to protest his innocence, but he faces investigations by the State Bar of California and scrutiny by the U.S. Department of Justice.

The story details Dominguez's campaign to recruit and manage plaintiffs.

Jose Francisco Gutierrez Fletes, 58, who worked as a "captain" to recruit and manage plaintiffs, told the Times he faced constant pressure from Dominguez's office to deliver more. "We had to keep bringing people in," he said.

In a 2008 deposition, plaintiff Francisco Donald Quinonez testified that one of Dominguez's captains had trained him "like a parrot" to recite facts about the farm.

On Saturdays, Dominguez would go on national radio to talk about his efforts. He liked to be introduced as a "super lawyer."

Now, Dominguez is going to need his own "super lawyer" to face the accusations in the case, which were deftly unraveled by Los Angeles Superior Court Judge Victoria Chaney in April.

Dominguez and other plaintiffs' attorneys had set out to find legitimate claims but turned to fraud when they found few, Chaney wrote. What resulted was a "heinous" scheme "cemented together by human greed and avarice," she said in making her ruling.

Read CJAC's earlier coverage of the case by clicking here, here, and here.

Among the anecdotal-based criticisms of the Medical Injury Compensation Reform Act (MICRA) is that California's $250,000 cap on non-economic damages in medical professional liability cases acts as some kind of bar to the justice system. That's not enough money to attract a lawyer, the argument goes.

There's just one problem: The claim does not stand up to actual scrutiny.

According to researchers led by former California Legislative Analyst William Hamm, "empirical evidence provides no support for the hypothesis that MICRA (including the $250,000 cap) has reduced access to the court system." That conclusion, contained in a comprehensive study of MICRA's effects on the health care delivery system in California, finds support in three findings:

• Hamm and his researchers looked at estimated medical liability lawsuit filings on a per capita basis in California from 1968-2007. The team found that per-capita filings were generally higher in the period beginning in 1986 (when MICRA had finally cleared its main legal challenges) than in late 1960s to early 1970s -- before MICRA.

• The study looked at a general decline in per-capita medical liability lawsuit filings since 1993. Significantly, Hamm's team found that the incidence of non-medical liability personal injury lawsuits - which are not affected by MICRA -- decreased at a faster rate than the incidence of medical malpractice suits.

• Hamm and his team looked at claims data provided by a medical professional liability company, which showed that in the period before the California Supreme Court's action upholding MICRA, medical malpractice claims frequency was 23.4%. But in the 20 years after MICRA was affirmed, Hamm found, the rate decreased only slightly, to 22.9%. "This data supports our finding that MICRA has not had a significant impact on the rate at which medical liability lawsuits are filed," Hamm stated.

At trial, judges warn juries that what the lawyers say in their arguments is not actual evidence. Seems the same is true when the personal injury attorneys talk about MICRA.

***
Gordon Ownby is general counsel of the Cooperative of American Physicians, Inc., www.cap-mpt.com, and can be reached at gownby@cap-mpt.com.

The tippy Explorer case against Ford Motor Company is getting a lot of ink because of the settlement: The lawyers got millions and the class members got coupons worth nothing to most. But what's so unusual about that?

The real story here is that this lawsuit did not involve vehicles that rolled over, were damaged, or hurt anyone. If you had a car that did, you couldn't get in this case if you tried!

No, this one was filed on behalf of people whom the lawyers claimed "suffered" a loss in Explorer resale value due to news of rollover problems.

Plaintiffs' lawyers justified the coupon deal as the best they could do for their "clients." It's hard to believe these lawyers launched a suit like this really believing they would achieve anything net positive for the class members. In fact, it would be entirely logical (and appropriate?) for a follow-up class action against the plaintiffs' lawyers in this case, alleging that their lawsuit and its publicity caused a further reduction in the resale value of Explorers.

We await these lawyers' next foray into "value diminution" litigation. The opportunities are endless. Say I bought a 2005 Snorecedes and a subsequent Consumer Reports says the 2006 model makes mine loud and polluting in comparison. Kicks my trade-in value in the teeth. Class action! Other examples come to mind. But why give the lawyers more ideas?