Saturday, December 15, 2007
Towers Perrin has released its 2007 Update on U.S. Tort Costs Trends, which is available here. "Tort costs" are defined as: 1. benefits paid or expected to be paid to third parties, 2. defense costs, and 3. administrative expenses. Tort costs in 2006 declined by 5.5% from the previous year, the first decline since 1997.
Friday, December 14, 2007
The House yesterday rejected Rep. Markey's amendment to the CPSC overhaul bill that would have added fixed-site rides to the CPSC's jurisdiction. Park companies had fought the amendment aggressively.
Is a foundation set up to administer the clinical practices of faculty at a medical school in Virginia eligible for charitable immunity? Part I is here.
As a normative matter, the foundation's claim should be rejected. An immunity operates against tort law's traditional purposes. It thwarts compensation; the loss cannot be spread from an entity with funds to a plaintiff who presumably can show serious economic loss. It hinders deterrence because physicians are not held responsible for their negligence. Finally, to the extent negligence creates a moral imbalance, immunity prevents the imbalance from being rectified. To justify an immunity, there must be some purpose outside of traditional tort law that the immunity furthers.
Charitable immunity was created to help charities in their good work, primarily by preserving charities' resources. There is a general problem with this rationale. Charitable immunity was created prior to liability insurance. Thus, frequently the choice was between a charity, often poorly funded, being able to continue its work or paying a tort judgment. Liability insurance altered that dilemma.
Furthermore, there are several problems with applying charitable immunity on these specific facts. First, another common reason proffered for charitable immunity is the preservation of donations. It is argued that donations to a charity will dry up if the funds are used on tort claims instead of the charity's mission. However, HSF actually prohibits donations; it will not accept them. Second, HSF has been operating, VERY successfully, for nearly thirty years without the benefit of the immunity. It has been able to fulfill its mission AND compensate those arguably injured by its negligence. Just like similar medical schools in all those jurisdictions that don't have charitable immunity.
Third, simply put, HSF is not a charity. Essentially, it provides billing and collection services to the medical school faculty, and then distributes the vast majority of the money it collects to the medical school faculty, the same people that earned the money in the first place. The record does indicate that, in 2005, HSF reported $22,500,000 in forgone collections for care provided to indigent patients. An impressive number, except it must be put in context. That is money HSF pursued, but was not able to recoup. In an analogous context, a Virginia lawyer could not count the services as pro bono: "services for which fees go uncollected would not qualify." Virginia Rules of Professional Conduct, Rule 6.1, comment 6. Furthermore, only 1.5% to 2% of the physicians' services is to indigents without payment from any source.
HSF was set up to "get billing and collection straight." There is no shame in that. Just because the primary motivation of an actor is financial does not mean the actor doesn't do a lot of good. It does, however, mean it is not a charity.
Full disclosure: My former firm, Tremblay & Smith, played a tangential role in this case. Two fantastic lawyers from the firm, Thomas E. Albro and R. Lee Livingston, wrote an amicus brief for the plaintiff on behalf of the Virginia Trial Lawyers Association. (Tom was recently one of five lawyers recommended for two Fourth Circuit vacancies by Virginia Senators John Warner (R) and Jim Webb (D).)
The Boston Globe has the story of Audrey Serrano, who was given HIV treatment for nine years when, it turned out, she was not in fact infected.
In her lawsuit against a doctor who treated her, Audrey Serrano said the powerful combination of drugs she took triggered a string of ailments, including depression, chronic fatigue, loss of weight and appetite and inflammation of the intestine.
I'm not sure how the damages are broken out, but it may be one where a cap on non-economic damages would have reduced it dramatically. Would that be desirable? (My inclination is "no.")
Thursday, December 13, 2007
Are foundations set up to administer the clinical practices of faculty at medical schools eligible for charitable immunity? I will discuss the issue, which has arisen in Virginia, over my next two posts. This post will discuss background information and the facts. Tomorrow's post will offer my analysis. The facts of the case in both posts are taken from the briefs.
Only nine states retain some form of charitable immunity: Alabama, Arkansas, Georgia, Maine, Maryland, New Jersey, Utah, Wyoming, and, significantly for this story, Virginia. The gist of charitable immunity is that a charity is not liable to its beneficiaries for basic negligence.
A couple of years ago, doctors at two teaching hospitals in Virginia (the University of Virginia (UVA) and Eastern Virginia Medical School), who had previously formed foundations to organize their clinical practices, began claiming charitable immunity. Virginia circuit court judges reached opposing conclusions on whether the foundations were, indeed, charities. The Supreme Court of Virginia granted an appeal in Crystal Ann MacArthur, a minor, etc., et al. v. University of Virginia Health Services Foundation (Record No. 070475). Oral arguments are scheduled for next month.
In the case, Crystal Ann was admitted to UVA Medical Center in 2002 for treatment of hydrocephalus. Allegedly, physicians delayed surgery on her emergent condition for 25 hours, resulting in her becoming permanently blind. The organization claiming charitable immunity is the UVA Health Services Foundation (HSF), a corporation comprising all of the attending physicians in the hospital. According to the founding chief executive officer of HSF:
[W]e set up the Health Services Foundation for the primary responsibility of getting the billing and collection out there straight, running it more like a business, getting more collections into the system so we could put them back into the medical school. So my first task was to set that up and find a good billing system.
To that end, HSF has a collection and billing staff of 115 people, including five who exclusively institute collection proceedings against patients who do not pay. HSF pursues these claims unless and until the patient establishes indigency. In 2005, HSF filed, on average, over 350 warrants in debt per month in an attempt to recover approximately $33 million in fees.
HSF has been extremely successful. In 2004, its receipts exceeded $244 million. What happens to that money? In general, the funds do not directly support the medical school. The vast majority of the money is paid to physicians employed by HSF (who are all also employed by the medical school and receiving base salaries of approximately $100,000).
So, what's the charitable purpose? HSF claims it is to provide medical education, medical research, and patient care without regard to the patients' ability to pay. It appears HSF's argument has two parts. First, supplementing the physicians' incomes allows the medical school to attract a great faculty (thus providing medical education and medical research). Second, HSF provides care to indigent patients.
Wednesday, December 12, 2007
As Bill previously mentioned, Southwestern University Law Review will be hosting a major absestos litigation symposium in January. Professors Alan Calnan and Byron Stier and are co-chairing the event. A few of the scheduled speakers include Justice Helen Freedman (N.Y. Supreme Court), Mark Behrens (Shook Hardy), Anita Bernstein (Brooklyn), Mark Geistfeld (NYU), Deborah Hensler (Stanford), Keith Hylton (BU), Linda Mullenix (Texas), Richard Nagareda (Vanderbilt), David Owen (South Carolina), and Neil Vidmar (Duke). More information is available in the brochure (pdf download).
As you prepare for next semster, put this one on your calendar!
Tuesday, December 11, 2007
As the documents below make clear, the case was initially filed in arbitration and then in the Southern District of Texas; the arbitration has been stayed pending a decision on the motion to compel arbitration in federal court. The plaintiffs acknowledge that Jones's employment agreement requires arbitration in at least some circumstances; they argue alternatively that the agreement is invalid and that it does not apply to this case.
A few documents of interest:
The complaint: Download leighcomplaint.pdf
The motion to compel arbitration: Download KBRCompel.pdf
Jones's opposition to the motion to compel arbitration: Download LeighOpposition.pdf
As the PIRG blog points out, there's pending legislation that would narrow the scope of arbitration provisions greatly, focusing on arms-length commercial transactions and not (probably) suits like this one.
Update: In the comments, Ted points out that much of the case file is available for free on Justia. I could've avoided the PACER charges! Curses! He also notes that the arbitration complaint's allegation vary fairly significantly from the complaint in district court, and that Jones's lawyer did some fairly transparent forum shopping. And finally, he notes that Halliburton is a defendant though Jones didn't work for Halliburton; she did, however, work for a Halliburton subsidiary. (Halliburton divested KBR earlier in 2007, well after the events in question.) Obviously there may be corporate veil issues, but it doesn't seem crazy to list Halliburton as a defendant.
(Later addition: In a second comment, Ted notes that the complaint merely alleges alter ego and says it won't fly. He may be right; though I've been involved in litigation in which another Halliburton subsidiary was also involved, I don't remember much about how separate its subsidiaries really are. Without knowing more, it's hard to have much of a view besides "still not crazy" on including Halliburton as a defendant. Certainly helps get press.)
Update 2: The third amended complaint (which I somehow missed the first time through the docket) is here: Download Leigh3rdComplaint.pdf
In an opinion with potentially broad implications, the Supreme Judicial Court here in Massachusetts has ruled (click on Coombes v. Florio) that a physician issuing a prescription has a duty not just to the patient but also to foreseeable injured parties. The facts:
Dr. Florio became Sacca's primary care physician in 1999. By 2002, when the accident occurred, Sacca was seventy-five years old and had been diagnosed with a number of serious medical conditions including asbestosis, chronic bronchitis, emphysema, high blood pressure, and metastatic lung cancer that had spread to his lymph nodes. . . . Shortly after the cancer was diagnosed, in July, 2000, Dr. Florio warned Sacca that it would not be safe for him to drive during his treatment for cancer. Sacca obeyed the warning and did not drive until the fall of 2001, when treatment for his cancer concluded. At that time Dr. Florio advised Sacca that he could safely resume driving.
At the time of the accident Sacca had prescriptions from Dr. Florio for Oxycodone, Zaroxolyn, Prednisone, Flomax, Potassium, Paxil, Oxazepam, and Furosemide. Potential side effects of the drugs include drowsiness, dizziness, lightheadedness, fainting, altered consciousness, and sedation. . . . According to the plaintiff's expert, when used in combination these drugs have the potential to cause "additive side effects" that could be more severe than side effects resulting from separate use. The plaintiff's expert also opined that the sedating effects of these drugs can be more severe in older patients, and that the standard of care for a primary care physician includes warning elderly or chronically ill patients about the potential side effects of these drugs, and their effect on a patient's ability to drive. Dr. Florio did not warn Sacca of any potential side effects. Before the accident occurred Sacca reported no side effects from the medication and had no trouble driving. Sacca's last visit to Dr. Florio before the accident was on January 4, 2002. At that visit, Dr. Florio did not discuss potential side effects and gave no warning about driving.
On the day of the accident, March 22, 2002, Sacca drove his automobile to do some errands. On his way home he lost consciousness and his automobile left the road and hit Coombes, who was standing on the sidewalk with a friend.
Coombes died from his injuries.
The majority, while recognizing that a number of cases go the other way due to concerns about excessive liability, concludes that ordinary negligence principles of foreseeability are sufficient to protect defendants.
I conclude 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. [case citations]
Courts in other jurisdictions have imposed a duty on doctors in circumstances similar to this case. In McKenzie v. Hawai'i Permanente Med. Group, Inc., supra at 307-309, the court held that a doctor owed a duty to a person killed in an automobile accident caused by the doctor's patient who was driving after taking medication prescribed for him by the doctor. The court reasoned that "a logical reason exists to impose upon physicians, for the benefit of third parties, a duty to advise their patients that a medication may affect the patient's driving ability when such a duty would otherwise be owed to the patient." Id. at 308. [additional cites]
* * *
Sound public policy also favors a duty in these circumstances. The costs of imposing a duty owed to individuals other than a patient are limited because existing tort law already imposes on a doctor a duty to warn a patient of the adverse side effects of medications. See Cottam v. CVS Pharmacy, supra, citing McKee v. American Home Prods. Corp., 113 Wash.2d 701, 709 (1989). The duty described here does not impose a heavy burden because it requires nothing from a doctor that is not already required by his duty to his patient. See McKenzie v. Hawai'i Permanente Med. Group, Inc., supra at 306; Hardee v. Bio-Med. Applications of S.C., Inc., supra; Burroughs v. Magee, supra at 333. Meanwhile, the benefits of such warnings are significant. They serve to protect the public from the very harm that creates the parallel duty to the patient, the foreseeable risk that known side effects of a drug will impair a patient's ability to drive. See McKenzie v. Hawai'i Permanente Med. Group, Inc., supra at 307; Burroughs v. Magee, supra at 332-333.
A second opinion (concurring in part and dissenting in part) disagrees that the duty should be so broad, but concludes that in this case, summary judgment was inappropriate, focusing on the fact that the alleged failure to warn related to precisely the same time of risk.
Extending the scope of liability for the benefit of third parties foreseeably put at risk by an uninformed patient's decision to drive alters neither the physician's medical decision to prescribe medication, nor the physician's legal duty under the Cottam decision to warn the patient about adverse side effects. Because the foreseeable risk of danger that the patient faces (here, death or bodily injury due to a motor vehicle accident) is the identical risk that the physician may anticipate others, such as the plaintiff's son, to encounter, there can arise no conflict of professional interest. Contrast Spinner v. Nutt, 417 Mass. 549, 553-554 (1994) (lawyer's primary duty owed to client bars imposition of secondary duty owed to third parties). The imposition of liability for a failure to warn a patient rests on a physician's superior knowledge of the risks (to the patient and to others) involved, and the physician's professional responsibility to ensure that a patient understands the risks involved in taking prescribed medications.
And two dissents reject the notion entirely, arguing that the majority ruling is mucking up the doctor-patient relationship too much to be acceptable. From the first one:
Today's result impedes not only the work of doctors. It impedes the work of our courts. On remand, the trial judge is left the unenviable task of divining from the vague generalizations of the concurring opinions the outer limits of a novel duty of physicians to third-party nonpatients. Because I agree with the trial judge that the physician's liability does not extend to the third-party decedent in this case, I would uphold the grant of summary judgment in Dr. Florio's favor, and not leave it to trial judges to puzzle their way through this thorny issue of public policy.
Over at Legal Theory Blog, Larry Solum has a fascinating Lexicon entry on "the reasonable person." Solum explores various interpretations of the reasonable person (including Rawls, Hand, Kant, and Aristotle). Great read.
Toby Shute (Motley Fool over at MSNBC.com) predicts that the new wave of lawsuits will be climate change suits:
Known to its detractors as Trial Lawyers, Inc., the plaintiffs' bar makes serious bucks by launching mass tort and class action suits. The bigger the damages, the bigger the contingency fees, so high-profile harm is how these litigation firms make hay -- and it doesn't get much more high-profile than climate change.
Companies are potentially vulnerable to shareholder lawsuits if they either fail to properly disclose the risk of potential climate change regulations, or to demonstrate efforts to mitigate those risks. The Corporate Library, a governance watchdog, analyzed two dozen "carbon-intensive" companies in a recent study, and the results varied widely.
Monday, December 10, 2007
An intermediate appellate court in New York has affirmed the award of punitive damages in a breach of privacy case where a medical practice failed to keep a patient's abortion private from her parents.
The patient had an abortion at Long Island Surgi-Center in 1999 and verbally instructed the staff to contact her on her cell phone because she did not want her parents to know about it, court records show. But after the procedure, a nurse called the patient's home to check on her and spoke with her mother. The nurse didn't mention the abortion but shared enough information for the mother to surmise what occurred.
Judges acknowledged that the breach didn't appear intentional but found enough evidence that the facility's conduct could be considered grossly negligent -- a standard sufficient to warrant punitive damages.
"There was no justification whatsoever offered for the remarkably casual way in which the center handled the plaintiff's sensitive medical information, and the need to deter other medical providers from engaging in similar conduct could hardly be clearer," the Sept. 25 opinion states.
The conduct was evidently violative of state law relating to medical privacy. The court ordered a new trial because the defendant was not permitted to argue that the incident was an isolated event, which would be relevant to determining the punitive damages amount.
Sunday, December 9, 2007
Honest, you really won't want to. Especially not at Burger King.
The title is enough, isn't it?
The Times has a lengthy piece about Dickie Scruggs and his indictment for allegedly attempting to bribe a judge. It includes a story from his past regarding major fighting over relatively trivial (to him) fees that does not, to say the least, make him look great. And it addresses what, if anything, his and Lerach's legal troubles might say about the plaintiffs' bar generally -- and how it could affect political races. Worth reading.