Vested Interest - News and Notes - January/February 2005 Issue

Court Caps Damages in Lending Law

The U.S. Supreme Court, siding with the financial-services industry, tightened the limits on damages consumers can get from companies that violate the 1968 federal Truth in Lending Act. The consumer-protection law generally caps damages at $1,000 when the customer hasn’t proven the amount of actual harm. Banks, auto dealers and other lenders urged the high court to impose the $1,000 ceiling, which will apply to most loans and credit. For mortgages, the damage limit is $2,000. Consumer advocates said the ruling will mean inadequate penalties for car dealers who cheat their customers. (Chicago Tribune – December 1, 2004)

Insurance Firms Subpoenaed in New Probe

New York and Connecticut state officials said they are investigating whether improper behavior by insurance companies has been a factor in the rapidly rising cost of malpractice insurance for lawyers and doctors. New York Attorney General Eliot L. Spitzer and Connecticut Attorney General Richard Blumenthal have not filed charges, officials said. Recently, three insurers that cover lawyers - the Hartford Financial Services Group Inc., American Financial Group Inc. and Arch Capital Group Ltd. - have said they received subpoenas from Spitzer’s office. Lawyers for Spitzer’s office have also been interviewing class-action attorneys about their particular problems getting insurance, said Fred Taylor Isquith, president of the National Association of Shareholder and Commercial Law Attorneys. Many of the group’s more than 75 member firms have faced large premium increases or their carriers have refused to renew coverage in the past few years. (ATLA Law News Digest – December 9, 2004)

Study Suggests Lower Tolerance for Benzene Exposure

The first study of a large group of workers breathing air with very low levels of benzene suggests that the chemical may harm the bone marrow, the body’s main factory for blood cells, even in amounts below the threshold deemed safe under American law. The researchers said counts of certain protective white blood cells in 250 Chinese shoe factory workers exposed to small amounts of benzene - less than one part per million in the air - were 15 percent to 18 percent lower than counts in a similar group of 140 garment workers who were not exposed. The lower blood counts were not in a range deemed harmful, but independent experts said the findings strongly hinted that benzene was one of a small group of chemicals for which no safe threshold exists. Experts not affiliated with the new study said it should prompt a re-evaluation of the American workplace standard, which the Occupational Safety and Health Administration set at one part per million in 1987, even though the National Institute of Occupational Safety and Health recommended a standard of 0.1 parts per million. (ATLA Law News Digest – December 9, 2004)

Specter: Curbing Asbestos Suits Priority

Republicans will try for quick action on a measure that would end asbestos lawsuits in exchange for a trust fund to compensate victims, the incoming chairman of the Senate Judiciary Committee said, despite a two-year deadlock. "It is my hope to be able to present a bill through markup at a very, very early date," said Sen. Arlen Specter, R-Pennsylvania, who will become Judiciary chairman. "Whether that can be done in late January or early February remains to be seen." Democrats argue that the GOP bills didn’t have enough money for victims and that Republicans are only trying to help their friends in the business and insurance communities by immunizing them from lawsuits. (ATLA Law News Digest – January 6, 2005)

Panel Seeks Better Disciplining of Doctors

Experts retained by the Bush administration said that more effective disciplining of incompetent doctors could significantly alleviate the problem of medical malpractice litigation. As President Bush prepared to head to Illinois to campaign for limits on malpractice lawsuits, the experts said that states should first identify those doctors most likely to make mistakes that injure patients and lead to lawsuits. The administration recently commissioned a study by the University of Iowa and the Urban Institute to help state boards of medical examiners in disciplining doctors. "There’s a need to protect the public from substandard performance by physicians," said Josephine Gittler, a law professor at Iowa who supervised part of the study. "If you had more aggressive policing of incompetent physicians and more effective disciplining of doctors who engage in substandard practice, that could decrease the type of negligence that leads to malpractice suits." Randall R. Bovbjerg, a researcher at the Urban Institute, said, "If you take the worst performers out of practice, that will have an impact" on malpractice litigation. "Most doctors have few or no claims filed against them," he added. "But within any specialty, a few doctors have a high proportion of the claims." (ATLA Law News Digest – January 6, 2005)

Children’s Motrin - Side Effects

The parents of a 7-year-old girl sued the makers of Children’s Motrin and several other companies that distribute the painkiller, claiming their daughter lost her eyesight and suffered other severe side effects after taking the medication. The lawsuit seeks unspecified compensatory and punitive damages against healthcare giant Johnson & Johnson, subsidiary McNeil Consumer & Specialty Pharmaceuticals, and several other firms, including retailers Ralphs Grocery and Albertsons Inc.’s Sav-On pharmacies. In their lawsuit, the parents accuse the defendants of negligence, breach of warranty and of concealing from consumers and doctors potential health risks of taking the flu and pain medication, specifically the risk of developing two disorders- Stevens-Johnson Syndrome and Toxic Epidermal Necrolysis which are typically caused by an adverse reaction to a drug or virus. (ATLA Law News Digest – January 6, 2005)

Eli Lilly Documents Linked to Prozac Concerns

The Food and Drug Administration is reviewing internal Eli Lilly & Co. documents that suggest the antidepressant Prozac may be linked to violent behavior, according to a U.K. medical journal. The documents - part of a 1994 civil suit against Eli Lilly, the maker of Prozac - had disappeared during the 10-year-old case, the medical journal said. After recently receiving the documents through an anonymous sender, the British Medical Journal gave them to the FDA, according to an article in the January 1 issue of the publication. A spokeswoman for the FDA declined to comment. According to the British Medical Journal, the documents appear to suggest a link between Prozac, which is known generically as fluoxetine, and suicide attempts and violence. The documents were being used in the case of Joseph Wesbecker, who in 1989, while being treated with Prozac, went on a shooting spree at his workplace, killing eight people before killing himself. The jury found in favor of the drug maker, but Eli Lilly later disclosed it had settled with the plaintiffs during the trial. One of the internal company documents cited in the article, dated November 8, 1988, and titled "Activation and Sedation in Fluoxetine Clinical Trials," found 38% of patients reported "new activation" - symptoms of which include agitation and aggressiveness - compared with 19% of placebo patients. According to the article, the FDA clinical reviewer responsible for approving fluoxetine said he was never given this and other data. (ATLA Law News Digest – January 6, 2005)

Rx Refill Errors Deadliest at Beginning of Month

According to a study published in the January journal Pharmacotheraphy, deaths due to medication mistakes rise by as much as 25 percent above normal in the beginning of the month. Researchers blame the boost in fatal medication errors largely on pharmacists’ workloads, which tend to peak early in the month when people typically receive Social Security, welfare and other government assistance payments. About 3 percent of the deaths researchers examined resulted from adverse effects of a drug, even though it was the right drug and the right dose. The remaining 96.8 percent were due to medication errors, such as the wrong drug being given or the right drug being taken in too high a dose. (Chicago Sun-Times – January 7, 2005)

Hospitals Urged to do More to Avoid Errors

Doctors at a conference of the American College of Endocrinology said hospitals should use computers to order drugs for patients, work harder at coordinating treatment and educate patients to help care for themselves in an effort to reduce medical errors. Doctors at the conference said an estimated 50 percent of people with a chronic condition at some time experience a medical error in their care or that of a family member. The group along with the American Association of Clinical Endocrinologists are working with state patient safety organizations in an effort to get hospitals to follow their recommendations. (Chicago Sun-Times – January 12, 2005)

Connecticut Governor Orders Rate Debate: Rare Alliance Forms

Gov. M. Jodi Rell ordered a public hearing on rate increases for medical malpractice insurance after doctors, lawyers and the state attorney general earlier in the day called for a hearing on a 90 percent increase. However, the kind of hearing that Rell and Insurance Commissioner Susan Cogswell agreed on does not go far enough and should not just be for "venting," Attorney General Richard Blumenthal said. Doctors and lawyers usually butt heads on malpractice issues. But the Connecticut State Medical Society and Connecticut Trial Lawyers Association both sent letters asking Cogswell for a public hearing on an 89.6 percent rate increase. (ATLA Law News Digest – January 13, 2005)