TortsProf Blog

No Arbitration for KBR, At Least Not for All Claims

Jamie Leigh Jones's tort suit against KBR (and its former parent Halliburton) will, after the pure workplace claims are resolved, go to litigation.  Details at Forbes (AP story) and TimesOnline; via TortDeform.  Past post here.

The opinion is here: Download KBR.pdf

It's far from a rejection of arbitration, even arbitration of tort suits, or even arbitration of tort suits related to employment (though it's clear that Judge Ellison has concerns about broad arbitration clauses).  He finds the arbitration clause valid and enforceable, rejecting arguments relating to fraud in the inducement, unclean hands, unfair bargaining power, and so on. 

His conclusion is fairly simple and not dependent on any policy arguments: even though the arbitration clause is valid and enforceable, it doesn't reach some of this alleged conduct.  The more pure employment claims are arbitrable, and he stayed the non-arbitrable claims pending the arbitration of those claims.

--BC

Autism/Thimerosol Trial Begins

Pharmalot has the details of the test case focusing on whether the mercury-based preservative in vaccines can by itself cause autism. 

In related news (though not part of the same case), if I haven't already pointed you to Eric Turkewitz's ongoing posts (and links to other posts) about the subpoena served on autism blogger Kathleen Seidel, well, head on over there now.

--BC

"Trial Lawyers, Inc." and Asbestos

If you're interested in the "elephantine" asbestos situation, you should review the last week or so of Point of Law's asbestos category.  Recent posts started with the release of the Manhattan Institute's asbestos report and followup discussions, including AAJ's news release in reaction (which PoL notes, pretty accurately, isn't actually a response so much as a criticism of the Manhattan Institute's funding and of the Manhattan Institute's legal issues director).

--BC

Bork Settles

Judge Bork has settled his much-maligned slip-and-fall suit, and Eric Turkewitz has a great overview.

--BC

Medical Malpractice: Actors, Flaws, and Reform (IV)

               Previous posts have discussed the flaws in medical malpractice law as uncertainty, delay, and high transaction costs.  Next week, I'll discuss a potential reform.

II.     Flaws (cont.)

               After all the time and money spent, aren’t the results of medical malpractice litigation extremely accurate?  Although perhaps better than earlier studies indicated, malpractice results are imprecise.  The Harvard School of Public Health study, in assessing how often medical error occurred in a random sample of closed claims, found that, "73 percent of all claims for which determinations of merit were made had outcomes concordant with their merit." Studdert et al., 354 New Eng. J. Med. at 2028.  That figure would likely be reduced somewhat further if the technical requirements of medical malpractice were applied to the concept of medical error.  In sum, after all these resources are expended, more than one in four cases is decided incorrectly. 

               Data is mixed regarding the distribution of the errors (whether errors generally favor plaintiffs or health care providers).  The Harvard School of Public Health study finds a fairly even distribution.  On the other hand, Professor Philip G. Peters, Jr. analyzed all seven studies that have compared verdicts rendered in individual malpractice cases with independent evaluations of each claim by medical or legal experts.  Philip G. Peters, Jr., Doctors & Juries, 105 Mich. L. Rev. 1453 (2007).  According to Peters, the studies demonstrate that plaintiffs win about 10% to 20% of cases with weak evidence of negligence and 50% of the cases with strong evidence thereof.  In other words, plaintiffs win between 10% and 20% of cases they should likely lose, but lose one-half of cases they should likely win.  Id. at 1464.  If that's true, plaintiffs' lawyers, who tend to support the current malpractice regime, take a big risk with each individual client with a strong case that goes before a jury.

--CJR

Medical Malpractice: Actors, Flaws, and Reform (III)

               Last week, I started this series on  medical malpractice litigation here and here.  This week, I continue with the flaws.

II.     Flaws (cont.)

Delay

               The uncertainty as to both liability and pain and suffering leads inevitably to delay.  As lawyers contest uncertain standards, time passes.  A recent study by a team of researchers from the Harvard School of Public Health considered a random sample of 1,452 close medical malpractice claims.  David M. Studdert et al., Claims, Errors, and Compensation Payments in Medical Malpractice Litigation, 354 New Eng. J. Med. 2024 (2006).  Of the claims examined, the average time between injury and resolution was five years, and one in three claims took six years or more to resolve.  Id. at 2031.  That’s a long time for an injured claimant—who may have medical bills and be out of work—to wait for compensation.  It’s also a long time for a physician to be distracted—via worry, depositions, etc.--from patient care.

Transaction Costs

               The uncertainty requires litigants to obtain costly assistance from lawyers and expert witnesses.  The delays in the resolution of claims ensure that litigants will pay these expenses for a considerable duration.  Thus, medical malpractice litigation has a third major flaw:  high transaction costs.

               On the plaintiff’s side, the contingent fee absorbs from 33% to 40% of the award.  On the defense side, insurers pay an hourly rate (which over the course of a case lasting several years can become significant).  Finally, in 2002, the late Professor Gary Schwartz estimated the total expenses for a malpractice action for a plaintiff (not including attorney’s fees) was at least $50,000 (mostly for expert witness fees).  Gary T. Schwartz, Empiricism and Tort Law, 2002 U. Ill. L. Rev. 1067, 1071. 

               In the 2006 study conducted at the Harvard School of Public Health, the authors analyzed the transaction costs as a percentage of the plaintiffs’ recovery in their sample of malpractice actions.  The combination of defense costs and standard contingency fees charged by plaintiffs’ attorneys (the latter estimated by the authors at 35 percent of the liability payment) brought the total costs of litigating the claims in the sample to 54 percent of the compensation paid to the plaintiff.  In other words, plaintiffs recovered only 46 percent of each dollar spent on their cases.  Studdert et al., 354 New Eng. J. Med. at 2031.

--CJR

"Fire Safe" Cigarettes Questioned

We've had a rash of fires in the area started by carelessly disposed-of cigarettes.  A local TV station notes the contrast with the fact that Massachusetts recently became one of 22 states to require the sale of "fire-safe" cigarettes, and points out the limitations of those cigarettes.

--BC

Fine Against X-Ray Outfit Upheld

So the folks at Provost Umphrey hired MOST Health Services, Inc., to do screening of 161 people for potential silicosis injuries.  The screenings took place at various hotels in Pennsylvania.  Only problem -- oops! -- MOST didn't comply with the state regulations on x-ray screenings, failing to get either Department of Environmental Protection approval or the presence of a licensed health professional at the screenings.  The DEP fined the company $80,500 ($500 per unauthorized screening).  The company appealed, not challenging liability but the amount of the fine, which it contended was excessive.

The Environmental Hearing Board upheld the fine: Download mosthealth.pdf. 

The Board concluded that though it found MOST's behavior to be closer to negligent than reckless (disagreeing with the lower officer), it concluded that the amount of the fine was not excessive.  The majority focused on the fact that the lower officer had already reduced the fine significantly from the default amount ($805,000).

A lively concurrence said that a much higher fine would have been appropriate too ("Before X-raying, Provost Umphry did not inquire of the patients as to their medical history, but it did make sure to have them sign contingent fee agreements respecting occupational exposure litigation."; "MHI is not entitled to a volume discount.").

And a dissent argues, more or less, that it would have been trivial to obtain approval of either DEP or of a physician, and so a much smaller fine would be appropriate.

--BC

Sebok on 1993 WTC Bombing

In his latest FindLaw Writ Column, Tony Sebok addresses the recent decision by the New York Appellate Division affirming the jury's verdict against the Port Authority of New York & New Jersey for the 1993 World Trade Center attack.  As Sebok notes, the jury found that the "Port Authority was 68% at fault and the terrorists 32% at fault for the attack."

On appeal, the Port Authority argued that the jury's verdict was "manifestly unreasonable."   The Appellate Division, however, disagreed.  Sebok points to two competing torts rationales - compensation versus fairness - as an underlying explanation:

From a full-compensation point of view, one might argue that the jury's verdict was reasonable enough, for we should err on the side of giving full compensation for the innocent victims at the WTC in 1993, not on the side of protecting the Port Authority's interest in paying for exactly the harm it caused and not a dollar more. Thus, even if it stretched credulity to deem the Port Authority more at fault than the terrorists, at least it served the interest of full compensation.

The Port Authority, however, contends that the harm to fairness here is too great to be borne. It points out that, even if the court invalidated the jury's finding that it was more than 50% liable (and hence more at fault than the terrorists), it would still have to pay plaintiffs' full economic damages. Only the non-economic (pain and suffering damages) would be apportioned according to fault.

- SBS

"They'll figure out a way to hurt themselves."

So says the owner of a privately-held water park in Illinois:

How do you test your rides to ensure they're safe?

We ride 'em ourselves. When we are ready to fire up, my team and I will get in our fiberglass rides and feel every square inch to make sure there's nothing sharp, abrasive or that would snag a guest or a bathing suit. We wax the daylights out of our slides. Maintenance and safety are number one around here.

Do you have lawsuits filed against you?

We have petty lawsuits every year. People are very creative. No matter what we come up with, they'll figure out a way to hurt themselves.

You must carry a lot of insurance.

As the industry began to learn what privately owned water parks were all about, we began to see decreases in the annual premiums. The experience showed that a well-trained staff at a privately owned water park is approximately 100 times safer than a conventional swimming pool. Insurance is easy to get now. There's a lot of competition out there.

--BC

Lawsuits - One Reason Not To Become A Doctor

Chris has been posting a series on Medical Malpractice:  Actors, Flaws and Reforms.  (Second post in series here).  In an article yesterday, Forbes reported on "Reasons Not To Become A Doctor."  Forbes identifies malpractice lawsuits as one of the reasons:

[G]etting sued by a patient is a major concern. Of course, doctors who make fatal mistakes and who are unqualified should be held responsible. But there's evidence that the bulk of lawsuits brought are frivolous. Of all malpractice lawsuits brought to jury trial in 2004, the defendant won 91% of the time. Only 6% of all lawsuits go to trial; those that aren't thrown out are settled. Only 27% of all claims made against doctors result in money awarded to the plaintiff, according to [Lawrence] Smarr, president of the trade association for medical malpractice companies.

Regardless, doctors need to defend themselves against the possibility of damages--and that's an extremely expensive proposition. It takes about four-and-a-half years from the start of a lawsuit to the end, and the average cost to the defense in legal fees was $94,284 in 2004, according to the American Medical Association.

- SBS

Keanu's Excellent Adventure In Punitive Damages

A photographer has filed a personal injury suit against actor Keanu Reeves based on allegations that Reeves struck the photographer with his car.  The suit brings negligence and assault & battery claims.   The complaint seeks an unspecified amount in compensatory and punitive damages.  Yesterday, Judge Elizabeth Grimes of the L.A. Superior Court denied Reeves's motion to strike the punitive damages claim. 

(Via California Punitive Damages).

- SBS

Roger Clemens, Defamation, and Evidence

The Sports Law Blog has a detailed post on the admissibility (or, more likely, inadmissibility) of evidence relating to Roger Clemens's alleged affairs on his defamation claim against trainer Brian McNamee.  Worth a read if you're following the story.

--BC

Study on Texas Liability Modifications

Texans for Lawsuit Reform commissioned a study on the effects of the various reforms in that state over the past couple of decades.  That study (PDF of report, article in The Monitor) concludes that "the reforms [since 1995] have resulted in nearly $113 billion in additional annual spending, almost 500,000 new jobs and $2.6 billion a year in increased state budget resources."  The study was done by the Perryman Group, a Waco economics group that does economic and policy analysis.

--BC

Scheuerman on Punitive Damages and Class Actions

TortsProf's own Sheila Scheuerman has posted Two Worlds Collide:  How the Supreme Court's Recent Punitive Damages Decisions Affect Class Actions on SSRN.  Here's the abstract:

This article examines the intersection between two controversial areas of the law - punitive damages and class actions - and argues that the Supreme Court's recent jurisprudence clarifying the due process limits on punitive damages has broad implications on the procedural laws governing the types of cases that can properly be certified as a class action. Specifically, the article discusses the Supreme Court's evolving approach to punitive damages from one that considered the harm a defendant's conduct caused to society as a whole to one that now focuses almost exclusively on the harm to the specific individual bringing the lawsuit. This shift, which recently culminated in the Court's 2007 decision in Philip Morris USA v. Williams, constitutionally requires that the amount of a punitive damages award relate to the amount of harm suffered by the party bringing the suit. That requirement is at odds with class action practices that treat punitive damages as a common, class-wide issue and that have allowed juries to assess a punitive damages award before evaluating the harm to the individual class members. The article argues, therefore, that where injuries are not uniform among class members, punitive damages cannot be pursued as a class-wide remedy.

I read an earlier draft, and it's thorough and thoughtful.

--CJR

Bridge Collapse Deal Reached

Minnesota legislators reached a deal to settle with the victims of last year's bridge collapse, reports the Strib. The default payment cap is $400,000, but a second fund will provide compensation for "extraordinary" losses -- medical expenses above $400,000 and the like. Those accepting the payments will waive future claims. It appears that victims are supportive of the bill.

--BC

Medical Malpractice: Actors, Flaws, and Reform (II)

Yesterday, I started this med mal series here.  I'll finish discussing the flaws next week.

II.          Flaws

               The first problem with medical malpractice litigation is uncertainty, both as to liability, and as to the proper amount to award for pain and suffering.  Uncertainty leads to two further problems:  delay and high transaction costs. 

          A.          Uncertainty

               In the medical context, the problem begins with the sheer number of potentially negligent defendants:  physicians, nurses, hospitals, equipment and drug manufacturers, etc.  Add to that the complexity of the evidence.  Any fault, whether multi or monocausal is difficult to prove due to the intricate nature of the human body.  That is especially true given that adverse consequences due to a physician’s negligence—if any—must be separated from preexisting conditions that simply further developed during the course of treatment.

               In attempting to single out the blame of these actors, the fault standard gives limited guidance.  The health care provider is supposed to act “reasonably,” with custom typically dispositive as to reasonableness.  However, in all but the clearest cases, there are medical experts who will opine both that there was and was not a breach of the standard of care.

               The problem of uncertainty is perhaps worse in determining the amount of a plaintiff’s pain and suffering damages.  There is, after all, no market by which to determine the amount of pain and suffering.  In comparing the vagueness of punitive damages (which are regulated by the Constitution) to the vagueness of pain and suffering damages (which are not), Professor Mark Geistfeld points to the California jury instructions.  Mark Geistfeld, Constitutional Tort Reform, 38 Loy. L.A. L. Rev. 1093, 1105-06 (2005) (quoting California Jury Instructions-Civil 14.13).  To say the standard for measuring pain and suffering is uncertain is merely to paraphrase the instruction itself:  “No definite standard [or method of calculation] is prescribed by law.”

               As a result of the uncertainty in assessing pain and suffering, legally irrelevant factors such as poverty, race, gender, and even whether judges are elected influence the amounts awarded by juries.  See, e.g., Eric Helland & Alexander Tabarrok, Judge and Jury:  American Tort Law on Trial (2006); Edie Greene & Brian H. Bornstein, Determining Damages:  The Psychology of Jury Awards 55-57 (2003).

                           

--CJR

Sebok on Nagareda's Mass Torts in a World of Settlement

Professor Anthony Sebok's book review, What Do We Talk About When We Talk About Mass Torts?, 106 Mich. L. Rev. 1213 (2008), is available here.  Sebok reviews Professor Richard Nagareda's Mass Torts in a World of Settlement (2007), available here.

Via Stier/Mass Tort Litigation Blog.

--CJR

Medical Malpractice: Actors, Flaws, and Reform

          Today I'm beginning a multi-post series on medical malpractice litigation.  The posts are inspired by a book I'm publishing with Jeffrey O'Connell, A Recipe for Balanced Tort Reform.  It should be available in June.  Of course, all comments are welcome.

I.         Actors

          There is considerable antagonism among the actors involved in the medical malpractice litigation system:  lawyers, health care providers, and liability insurers.  In particular, there is enmity between plaintiffs’ lawyers and insurers (with health care providers generally aligned with insurers).  The sides each blame the other for perceived problems in the system.  The vilification is unfortunate, but perhaps understandable.

 

          It seems to me that each group of actors is simply responding to incentives.  In other words, to the extent there are problems with medical malpractice law, it is not generally due to the illicit conduct of either the plaintiffs’ bar or insurers (and certainly not health care providers).  They are behaving largely as one would expect, given the adversary system in which they operate.  Insurers are in business to make a profit.  They want to maximize the amount of premiums collected and minimize the amount of settlements and judgments paid out.  Plaintiffs’ attorneys are also in business to make a profit.  The contingent fee provides their incentives.  The more claims they can settle or win, and the higher the value of those claims, the better.

 

        Although that sounds stark (perhaps even critical), it’s not meant to be.  All of the actors in this system have positive roles to play.  We want them to play their roles, and there is a good reason for the incentives.  The benefits we receive from health care providers are too obvious to require elaboration.  Medical liability insurers are necessary because health care providers are necessary.  Insurers allow health care providers to spread the risk of liability.  Many med mal judgments are so large they would financially crush even the wealthiest health care provider.  Even if there is a defense verdict, the costs of defense are often steep as well.  Few people considering a medical education would invest the necessary money, only to risk a reasonable possibility of financial ruin through liability.

 

          Finally, plaintiffs’ lawyers have a positive role to play.  As valuable as health care providers may be, they are only human.  They make mistakes, and, because of the nature of their work, those mistakes can have serious consequences.  Plaintiffs’ lawyers bring lawsuits that can:  1. correct the wrong of an injury, 2. compensate the victim, and 3. provide cost-internalization.

 

        The problems lays not so much with the actors in the malpractice system, but in the content of the rules that goven it.

--CJR