Vested Interest - Tort Briefs - February 2000 Issue

Allstate Found Liable for Misleading Accident Victims

A Washington state court has found Allstate Insurance liable for “engaging in the unauthorized, negligent practice of law” for urging accident victims not to hire attorneys to handle their claims against the insurer. Janet Jones was struck by a driver insured by Allstate. Before she filed a lawsuit or even spoke with an attorney, Allstate sent her a letter pledging to conduct a fair appraisal of her injuries and a brochure entitled “Do I Need an Attorney?” that insisted that accident victims “do not need attorneys to receive fair treatment or a fair settlement.” On the basis of those statements, Jones settled her claim for less than her $75,000 medical bills, even though the 17-year-old driver who hit her was solely responsible for the accident. The ruling in Jones v Allstate holds that the insurer is now liable for any damages Jones may have suffered as a result of her reliance upon Allstate’s inappropriate legal advice.

Asbestos Victims Settle Claims for $160.6 Million

Lawyers for 4,000 asbestos victims have settled their claims against 18 asbestos makers for a total of $160.6 million. The settlement calls for payments based on the victim’s residence, not the degree of injury sustained, leading some to criticize the settlement. Victims who live in Mississippi will average $263,000, while victims in Ohio will average just $14,000. A judge has yet to approve the deal. (AP, January 24, 2000)

U.S. Supreme Court to Balance ADA and States’ Rights

The U.S. Supreme Court has added disputes with Arkansas and Florida to its calendar, questioning whether states may be sued in federal court for violations of the Americans with Disabilities Act. The ruling comes on the heels of another Supreme Court decision that states may not be sued in federal court for age discrimination claims. The disputes revolve around the conflicting nature of the 11th and 14th Amendments to the U.S. Constitution. The Court has previously held that the federal government is on firmer ground when regulating race and gender issues than when it takes on age and other issues. (AP, January 25, 2000)

Flight 990 Victims to Divide $115 Million

EgyptAir Flight 990 crashed into the Atlantic just east of the New England coast last October 31. While the investigation into the causes of the crash are on-going, EgyptAir has announced that the families of the 215 victims will share in insurance payments totaling $115 million. Early American press reports suggested that one of the pilots deliberately crashed the plane; a charge Egyptian authorities quickly denounced. EgyptAir Chairman Mohammed Fahim Rayan had earlier announced payments of $100,000 to each victim. He is quoted in more recent Egyptian newspaper accounts as approving the larger settlements. (AP, January 22, 2000)

Supreme Court Allows Punitive Verdict of $20 Million to Stand

Douglas Axen began taking American Home Products’ Cordarone in August, 1994, eight years after the drug was put on the market, to treat a heart condition. The package insert warned of possible temporary optic nerve inflammation as a side effect. Axen suffered the inflammation, which continued even after he stopped taking the drug in October, 1994. The damage to his nerve endings deteriorated, and he was legally blind when he sued in 1997. A Multnomah County, Oregon, jury returned a verdict for $407,000 in economic damages, $1.5 million in pain and suffering, and $20 million in punitives. Defendant AHP appealed, claiming the punitive portion was excessive. The Oregon Supreme Court affirmed the verdict, and the U.S. Supreme Court declined to hear the dispute. (AP, January 24, 2000)

Chief Justice Rehnquist Calls for Higher Pay Rates for Lawyers for the Poor

Chief Justice William H. Rehnquist’s annual message to Congress called upon lawmakers to increase the allowable billing rate for lawyers who represent criminals in federal courts. Even with the recent $5.00 per hour increase, putting current rates at $70 per hour for in-court work and $50 an hour for out-of-court work, pay for criminal defense attorneys “has been eroded by inflation and [is] substantially below prevailing rates in the legal profession.” He continued, “Adequate pay for appointed counsel is important to ensure that a defendant’s constitutional right to counsel is fulfilled.” (AP, January 1, 2000)

Chicago Sun-Times Calls for Merit Retention of Judges

Describing the current process of electing judges as “anything but dignified and judicious”, the Chicago Sun-Times has called for a phased-in form of merit selection of judges, beginning with merit retention. The editorial noted that Cook County candidates often file for several seats on the bench, and then decide which one race they have the best chance of winning, dropping out of the others. The paper cited a model adopted by the Illinois State Bar Association, by which a panel of lawyers and non-lawyers would evaluate sitting judges and determine which should be retained and which would have to run for re-election. (Chicago Sun-Times, January 3, 2000)

Canadian Lawsuit Faults Tobacco Makers for Not Adopting Fire-Proof Design

While most of the tobacco litigation has focused on the addictiveness of cigarettes and their health effects, a lawsuit filed recently in Toronto, Ontario takes a different approach. Davina Ragoonanan claims that the fire that killed her daughter and brother could have been prevented if tobacco companies produced self-extinguishing cigarettes. Such a design, using a dense wrapper and a thinner design, was recommended by a U.S. Congressional committee, which also found a high degree of consumer acceptance for the product, but to date, tobacco companies declined to offer it. Philip Morris has recently announced plan to market such a cigarette, and Canadian lawmakers have begun talking about mandating a fire-safe design. (CBC News, January 12, 2000)

Judge Reduces Tort Deformers’ Verdict

U.S. Senator Rick Santorum (R-PA) has been an outspoken opponent of the jury system, calling time and again for limits on jury verdicts. His wife recently secured a jury verdict for $350,000 from a chiropractor whose malpractice resulted in back injuries. In response to defense motions, however, Fairfax County Circuit Court Judge Arthur Vieregg reduced that verdict to $175,000, citing undue passion and sympathy toward the plaintiff. The Senator’s wife will now have to choose between the lower verdict and a new trial.

Pilot Fired for Refusing to Fly in Ice Storm; Jury Issues $10 Million Verdict

Michael LaGrotte, a ten-year veteran with American Eagle, was ordered to fly a turboprop plane from Dallas to Houston. After take-off, he ran into an ice storm; determining that conditions were unsafe, he returned to Dallas. Airline officials asked him to try again, and he refused. He was fired for his decision, and sued, claiming wrongful termination. A jury hearing his claim has returned a verdict for $10 million. (AP, January 13, 2000)

World’s Most Widely Syndicated Political Cartoonist Sues for Malpractice

Ranan Lurie’s first cartoon in the New York Times ran when he was 21-years-old. Forty-six years later, Lurie is cited by the Guinness Book of World Records as the most widely syndicated political cartoonist. But his career is in jeopardy due to a botched surgery on his drawing hand which resulted in a painful disfigurement to his fingers. Lurie claims that he initially injured the small finger of his right hand in 1997, and sought treatment from Dr. Richard G. Eaton. After the procedure, Dr. Eaton offered no corrective therapy, and the “finger stiffened ... form[ing] a tight crescent.” He has been reduced from eight-to-ten cartoons each week to doing just four. (AP, January 14, 2000)

LA, Federal Government Agree to $5 Million Settlement in Wrongful Shooting Claim

Donald P. Scott was awakened by the sound of someone breaking into his home in the middle of the night. The 61-year-old, who had been drinking, went to investigate, bringing a pistol with him. An LA County Deputy then shot him to death. The agents claimed they were looking for narcotics, but found none at the house. Scott’s relatives claimed the raid was really an effort to seize Scott’s 200 acre ranch under federal drug forfeiture laws. Under the terms of a tentative settlement approved in federal court, LA County will pay $4 million, and the federal government will pay an additional $1 million. (AP, January 12, 2000)

No Right to Pro Se on Appeal: U.S. Supreme Court

Salvador Martinez was arrested and tried on criminal charges in California. He described himself as a “self-taught paralegal”, and had worked at a dozen different law firms. He insisted on representing himself at trial, where he was convicted. He appealed, and again sought to represent himself. A California court, however, ruled that his appeal should be handled by a state-appointed attorney. He refused, but the U.S. Supreme Court ruled unanimously that states are within their rights if they require litigants to use a lawyer in appeals. A 1975 ruling allows criminal defendants to represent themselves at trial if they so choose, but the new ruling finds that the state’s interest in maintaining the efficiency of the appellate process is more important than a litigant’s right to self-representation. (Reuters, January 12, 2000)

Surge in Civil Rights Employment Cases Seen

The U.S. Department of Justice, Bureau of Justice Statistics, has released a new study tracking civil rights claims filed in U.S. district courts. “Between 1990 and 1998 the number of cases in which plaintiffs sought civil remedies related to discrimination in employment, housing, welfare, voting, or other civil rights issues more than doubled from 18,793 to 42,354,” according to the new report, “Civil Rights Complaints in U.S. District Courts, 1990-98.” The report attributes this increase largely to growth in employment cases. At the same time, the proportion of cases dismissed grew from 66% to 71%. (Copies of the report are available at the BJS website at www.ojp.usdoj.gov/bjs)

Nursing Home Company Settles Fraud Charges for $175 Million, Divestiture

Federal authorities, in concert with California state regulators, have alleged that 10 nursing homes owned by Beverly Enterprises, the largest operator of nursing homes in the counrty, illegally overcharged the Medicare system for treating senior citizens. While unable to put an exact figure on the overbilling, prosecutors have agreed to settle the case in return for a payment of $170 million by Beverly and another $5 million in criminal fines by a Beverly subsidiary. And in an unusual move, Beverly has agreed to sell the ten nursing homes to an unaffiliated buyer. "We want Beverly to bear the burden, we don't want the patients to bear the burden," said Alwyn Cassil of the U.S. Health and Human Services Department, adding that the divestiture requirement will accomplish that goal. (Reuters, February 3, 2000)