Vested Interest - News and Notes - April 2006 Issue

Hospital Admissions for Complications from Surgery and Medical Care Increasing

The number of patients admitted by U.S. hospitals to treat complications resulting from surgery or medical treatment increased from 305,000 in 1993 to 452,000 in 2003, according to HHS’ Agency for Healthcare Research and Quality. Complications from surgery can include postoperative infections. Complications from medical care can result from extended bed rest and may include lung embolism, dangerously low blood pressure, or collapsed lung. The number of cases of surgical or medical care complications admitted through hospital emergency departments rose from 98,000 in 1993 (32 percent of all cases) to 211,000 (47 percent of all cases) in 2003. The average cost to hospitals for treating surgical or medical complications increased from $6,840 in 1993 to $9,600 in 2003. (Medical News Today – March 1, 2006)

Second Cholesterol Drug Poses Hazard

A widely used cholesterol-lowering drug that is alleged to cause kidney failure or insufficiency may soon be the subject of lawsuits around the country, echoing litigation over the health hazards of Baycol, a similar drug withdrawn from the market five years ago. Manufactured by London-based AstraZeneca, Crestor (rosuvastatin calcium) is still on the market and has been used by more than 4.3 million patients in more than 70 countries. (ATLA Law News Digest – March 3, 2006)

HealthSouth Agrees to Settle Class Action

HealthSouth Corp. said it reached a $445 million preliminary agreement to settle federal lawsuits resulting from a massive financial fraud that nearly drove the rehabilitation chain to ruin. The company will pay $215 million in common stock and warrants under the global settlement, and insurance companies will pay another $230 million in cash. Investors involved in class action suits filed in federal court also will receive 25 percent of anything the company eventually gets in its lawsuit against fired chief executive Richard Scrushy. (ATLA Law News Digest – March 3, 2006)

Rhode Island Cannot Seek Punitive Damages in Lead Paint Cases

A judge ruled the state cannot seek punitive damages against three lead paint manufacturers found liable for creating a public nuisance in Rhode Island. The companies- Sherwin-Williams Co., NL Industries Inc. and Millennium Holdings LLC – still must pay to clean up the mess caused by lead paint, which could amount to billions of dollars. The judge will later decide exactly what the companies must do to fix the problems caused by lead paint, which was banned in the United States in 1978 because it can cause brain damage and other health problems in children. (ATLA Law News Digest – March 3, 2006)

U.S. Reducing Safety Penalties for Mines

The Bush administration has decreased major fines for safety violations since 2001, and in nearly half the cases, it has not collected the fines, according to a data analysis by The New York Times. Federal records also show that in the last two years the federal mine safety agency has failed to hand over any delinquent case to the Treasury Department for further collection efforts, as is suppose to occur after 180 days. (ATLA Law News Digest – March 3, 2006)

Chromium Industry Hid Cancer Risks

As federal regulators are poised to announce a new standard for protecting workers, a team of scientists reported that the chromium industry and its consulting scientists withheld and skewed data that suggested workers exposed to low levels of chromium were dying from lung cancer. Chromium-producing corporations and metal-finishing companies have opposed stricter limits on workers’ exposure to hexavalent chromium since 1976, when OSHA first proposed changes in the regulation. (ATLA Law News Digest – March 3, 2006)

Allstate to Limit Home Policies

Allstate announced it will cut the number of homeowners policies it sells in Texas to reduce its exposure to hurricane-related losses. For counties once removed from the coast the company will stop selling new homeowners policies to those not already Allstate customers. Those not affected include existing auto, homeowners, and renter insurance policyholders. (ATLA Law News Digest – March 3, 2006)

Big Tobacco Seeks $1.2 Billion Cut in Payments to States

State governments, addicted to billions in revenue from the tobacco industry, have begun to worry they will have to cut back. Forty-six states are expecting a total of $6.5 billion this spring, the latest in a series of annual payments stemming from the 1998 Master Settlement Agreement with major tobacco companies. But Altria Group Inc.’s Philip Morris USA and others say they expect to withhold $1.2 billion and are raising the possibility they will seek similar cuts in years to come. The 1998 agreement – which requires big tobacco companies to pay $206 billion into state treasuries – has been seen as a success by the states. (ATLA Law News Digest – March 10, 2006)

WI Med-Mal Caps Pass Again

In a 74 to 22 vote, the Wisconsin state Assembly approved legislation capping damages awarded in cases of medical malpractice. The legislation, Assembly Bill 1073, caps the limit of non-economic pain and suffering damages that can be rewarded in medical malpractice cases. The bill provides for $750,000 in non-economic medical malpractice caps, and economic loss remains unaffected. (ATLA Law News Digest – March 10, 2006)

DaimlerChrysler to Appeal $3.4M Awarded in Minivan Accident

DaimlerChrysler has said it will appeal a federal jury’s $3.4 million award to the mother of a 2-year-old who died in an accident caused when the child dislodged the automatic transmission lever of the parked minivan in which she was sitting. A company press release said the jury award could be reduced because the jury found the child’s mother 49 percent responsible for the child’s death. (ATLA Law News Digest – March 10, 2006)

More Women Die After Using Abortion Pill

Federal health regulators reported two more women have died after using the abortion pill RU-486, warning doctors to watch for a rare but deadly infection implicated in earlier deaths. At least seven U.S. women have died after taking the pill, sold since 2000. The FDA cannot prove the drug was to blame in any of the cases and has not confirmed the cause of the latest two deaths. However, in four of the earlier cases, the women died from an infection of the bloodstream, or sepsis. Those women did not follow FDA-approved instructions for the pill-triggered abortion, which requires swallowing three tablets of one drug, followed by two of another two days later. (ATLA Law News Digest – March 23, 2006)

Right to Trial By Jury Upheld in Trade Secret Case

The Connecticut Supreme Court became the first court in the country to rule that parties seeking damages in trade secrets litigation have a state constitutional right to demand a trial by jury. The court’s unanimous ruling orders the trial court to grant the request for a trial by jury in a theft-of-trade-secrets lawsuit against General Motors Corp. In reaching its decision, the court looked to a case decided in England in 1817, in which the English court said the issue of whether a party had unlawfully disclosed the ingredients of a particular medicine would have to go to trial. English courts of law during that time conducted jury trials. (ATLA Law News Digest – March 23, 2006)

Spitzer Says H&R Block Duped Clients

H&R Block Inc., the biggest U.S. tax preparer, duped clients into investing tax refunds into retirement accounts that usually cost more in fees than they generate in interest, New York Attorney General Eliot Spitzer said. H&R Block failed to disclose expenses on its Express IRAs to about 500,000 purchasers. The company will fight the lawsuit, which seeks up to $250 million in civil penalties. (ATLA Law News Digest – March 23, 2006)

Ford said Risky Tires were OK for SUV

Ford Motor Co. approved replacement tires for its Explorer sport utility vehicle that made it just as likely to roll over as the originals that Ford blamed for more than 200 deaths. Ford’s test results of replacement tires, introduced as evidence last month in an Explorer trial in Mississippi, may support hundreds of pending lawsuits contending that the vehicle is unstable and can flip over amid evasive driving maneuvers. Ford has lost six Explorer rollover cases totaling $151 million in jury verdicts in the past year. In a 2000 government investigation into Explorer rollovers, the company blamed the original Bridgestone/Firestone Inc. tires for the accidents. (ATLA Law News Digest – March 10, 2006)

Report Blows the Whistle on Lax Federal Oversight of Railroad Accidents

The Federal Railroad Administration (FRA) needs to do more to investigate accidents at grade crossings and enforce safety regulations, according to a recent report by the inspector general of the U.S. Department of Transportation. The FRA too often accepts railroads’ reports that collisions between trains and cars are caused by motorists’ errors, does not report grade-crossing accidents soon enough to preserve evidence for an independent investigation, and rarely assesses fines for critical safety defects at grade crossings, the report said. (ATLA Law News Digest – March 10, 2006)

FDA, Beverage Makers Downplay Benzene in Soft Drinks

When small amounts of benzene, a known cancer-causing chemical, were found in some soft drinks sixteen years ago, the FDA never told the public. The beverage industry told the government it would handle the problem, and the FDA thought the problem was solved. A decade and a half later, benzene has turned up again. The FDA has found levels in some soft drinks higher than what it found in 1990, and two to four times higher than what’s considered safe for drinking water. Both the FDA and the beverage industry said the amounts were small and that the problem didn’t appear to be widespread. (ATLA Law News Digest – March 16, 2006)

New Orleans Courts to Expedite Storm-Related Suits

New Orleans civil courts began fast-tracking what they expect to be thousands of lawsuits stemming from damage done to homes, businesses and personal property during Hurricanes Katrina and Rita. In many of the cases, property owners will be asking the courts to force insurance companies to pay claims for storm-related damage. The Hurricane Litigation Pilot Program will govern the handling of hurricane-related property damage disputes. (ATLA Law News Digest – March 16, 2006)

State Unemployment Rate Lowest Since 2000

The February seasonally adjusted Illinois unemployment rate was 5.0%, down 0.2% from January, according to the Illinois Department of Employment Security. This is the lowest unemployment rate reported since December 2000. The number of the unemployed fell by 11,700 to 328,000 individuals, its lowest level since January 2001. The Illinois unemployment rate has declined in seven of the last eight months, continuing an overall downward trend. (Illinois Department of Employment Security News Release – March 23, 2006)

Survey Shows Most Manufacturers Concerned About Energy, Production Costs and Skills Shortage

The 2006 National Manufacturing Week survey of manufacturers in the United States shows that 44 percent expect manufacturing to trail the overall economy in 2006, up from 34 percent in the previous year’s survey, and a substantial majority expect the economy to grow more slowly less than 2.9 percent in the year ahead than most economists predict. The biggest challenge besetting U.S. manufacturing are rising external costs associated with health care, materials and energy, which manufacturers are unable to transfer to product pricing. External costs burdens are having the biggest impact on manufacturers lowering their profitability and tying up more funds that would otherwise be spent on investment, research and development and new product lines. Also noted was the double-digit increase in health care costs and the lack of a skilled workforce. Half of the respondents have unfilled positions because they cannot find qualified workers. (National Manufacturers Association Press Release – March 21, 2006)