Vested Interest - Tort Briefs - July 2000 Issue

U.S. Supreme Court Bars Some HMO Suits Under ERISA

The U.S. Supreme Court has blocked an Illinois woman's suit against her HMO, noting that her theory of negligence was not actionable under the Employee Retirement Income Security Act. Victim Cynthia Herdrich claimed that Dr. Lori Pegram accurately determined that she needed diagnostic tests to measure her need for an appendectomy, but that Pegram's financial relationship with the HMO wrongly induced Pegram to delay the testing for 8 days until the HMO's preferred hospital could perform the tests. During the delay, Herdrich's appendix burst. Under Illinois law, Herdrich recovered $35,000 in damages, but also claimed that the HMO was separately liable for urging the delay. Citing ERISA, the HMO obtained a transfer to federal court, where the appeals process landed at the U.S. Supreme Court. Justice Souter's opinion, for a unanimous court, argues that ERISA anticipated plan managers having conflicting duties, so the financial inducement to Dr. Pegram was not in and of itself sufficient to trigger damages. Because the decision to delay testing could have been a medical decision as well as a plan management decision, ERISA does not allow Herdrich to seek damages. Pegram v Herdrich is docket no. 98-1949. The Court also remanded other HMO cases, Healthcare Systems of Pennsylvania v Pennsylvania Hospital Insurance Co. (98-1836), dealing with a three hour delay, and U.S. Healthcare v Baumann (99-1383), dealing with a 24-hour discharge rule for newborn children, with instructions to review in light of Pegram. (Bloomberg, June 19, 2000)

Republicans Block Federal HMO Liability Law

A Democratic measure to allow patients to hold managed care entities responsible for refusing to pay for needed care failed on a 48-51 vote in the U.S. Senate. Four Republicans, including Illinois Senator Peter Fitzgerald, joined with all Democrats, save one who was absent, in voting for the measure. The measure would have applied to health plans administered under ERISA as well as other health plans managed under state laws. Observers now predict that no health care reform measures will become law this year. (Bloomberg, June 8, 2000)

U.S. Supreme Court Clarifies Rules for Employment Discrimination

Roger Reeves was fired from his job with Sanderson Plumbing Products of Columbus, Mississippi, at age 57, after 40 years with the company, and replaced with a younger worker. He sued, alleging age discrimination, citing the age difference between himself and the replacement, as well as derogatory comments made by his supervisor. A trial jury returned a verdict of $98,000 in damages and back pay. On appeal, the 5th Circuit ruled that Reeves had to prove that Sanderson was actually motivated by age bias, and tossed out the verdict. The U.S. Supreme Court, however, reversed the appellate court. Justice O'Connor's opinion concluded that "Given that [Reeves] established a prima facie case of discrimination, introduced enough evidence for the jury to reject [Sanderson's] explanation and produced additional evidence of age-based animus, there was sufficient evidence for the jury to find that [Sanderson] discriminated." Reeves v Sanderson is docket no. 99-536. (AP, June 12, 2000)

New Hampshire Supreme Court Crisis Will Not Ensnare U.S. Supreme Court

New Hampshire's investigation of alleged abuses of power by members of its state Supreme Court continues. To date, one justice has resigned, and all of the rest have come under fire. Every justice who served in 1987 has testified before a legislative committee, save one: current U.S. Supreme Court Justice David Souter. Lawmakers have uncovered memos suggesting that Justice Souter may have expedited a case for a company owned by a prominent Republican legislator, but have declined to issue subpoenas. Meanwhile, New Hampshire Chief Justice David Brock has formally apologized to the legislature for lapses in judgement regarding his handling of certain cases, but insisted that his actions did not rise to the level of impeachable offenses. (AP, June 26, 2000; AP, June 28, 2000)

Oregon Jury Returns $29 Million Verdict in Fen-Phen Case

Juanita Batson used the diet drugs Fen-Phen for almost a year, while her son Richard Wirt used the drugs for four months. They later discovered that the drug contributed to potentially fatal heart valve damage. Responding to complaints by victims like these, the Food & Drug Administration forced American Home Products, maker of one of the ingredients of Fen-Phen, to remove the product from the market. Contending that AHP or their own doctor should have known of the risks and failed to warn them in time, the two sued for compensation. A Coquille, Oregon jury returned a verdict for $29.1 million. A similar trial in Texas resulted in a $23 million verdict, but that case is reported to have settled on appeal for less than 10% of that amount. AHP has set aside $3.75 billion to settle a class action suit on behalf of Fen-Phen users, but a fraction of the victims have, like Wirt and Batson, opted out of the class. (AP, June 28, 2000)

Jury Returns $22.9 Million Verdict in Helicopter Crash Case

A U.S. Army helicopter crashed in Germany in 1993, killing four of eight passengers. Six of the victims, including the families of all of the dead, sued United Technologies, manufacturer of the UH-60 Blackhawk helicopter, arguing that a design defect contributed to the crash. A federal jury in Connecticut agreed, and issued a verdict for $22.9 million. The jury found that pilot error was not a factor in the crash. (Reuters, June 9, 2000)

Ford Must Pay $26 Million Verdict: Trial Court

A California judge has upheld a jury's verdict of $26 million in damages, all of it compensatory, for injuries suffered in a truck rollover accident. Richard Raimondi's Ford Bronco II flipped over in a 1996 accident, leaving him paralyzed and breathing through a respirator. He died less than four years afterward from complications from his injuries. The jury determined that total economic damages reached $51 million, but reduced the verdict for comparative negligence. Ford moved to have the verdict reduced by the trial judge, but Alameda Superior Court Judge David Hunter's review of the verdict concluded that the amount was not excessive. (Reuters, June 8, 2000)

Chicago Jury Returns $55 Million Verdict in Hospital Case

Anna Mederos sought treatment for pneumonia. During bronchoscopy, her doctor hit an artery, resulting in what the doctor later described as "the greatest amount of bleeding in my career." Due to a delay in intubation, she went without oxygen for several minutes. The 59-year-old victim now has severe and irreversible brain damage. A jury hearing the facts returned a $55 million verdict against Dr. Donald L. Vidger, Dr. James B. Gallai, and the Ravenswood Hospital Medical Association. Observers have said this is the largest medical malpractice verdict in Illinois history. (AP, May 28, 2000)

Texas Gov. George W. Bush Trusts Some Juries, Some of the Time

Texas Gov. George W. Bush has cited the role of juries in determining the facts as part of his strong support for the death penalty. Gov. Bush has signed off on more executions than any other sitting U.S. governor. But, as Northwestern University School of Law Professor Steven Lubet has pointed out, Bush's support for juries goes only so far. While he praises jurors accurate fact-finding abilities in criminal case, he insists that juries cannot determine some facts in civil cases. Specifically, Gov. Bush will not allow civil juries to determine the extent of damages owed to injury victims in civil cases. As a champion of that state's tort deforms, Gov. Bush has blocked juries from providing justice to victims of another's negligence. And he has pledged to continue this anti-juror crusade if he is elected President of the United States. (Chicago Tribune, May 30, 2000)

Corporation Found Liable for Homicide

In an extremely rare incident, a court has found a corporation criminally liable for the deaths of some of its workers. Wisconsin Circuit Judge Richard Werner found that YES, an Iowa company that hires young adults to sell magazine subscriptions, was guilty of murder in the deaths of seven people killed when a company van overturned on a highway. Jeremy Holmes, driver of the van, attempted to change places with a passenger when he saw that a police officer was about to pull him over for speeding. The crash killed half of the 14 people on board, whose ages ranged from 15 to 22. YES declined to appear for its own defense. The court has yet to determine the amount of restitution owed to the families of the deceased. (AP, June 5, 2000)

City of Chicago Agrees to $1.5 Million Crash Settlement

Elton Jackson, an off-duty police officer, was driving on Chicago's south side in September, 1993, when his motorcycle collided with a fire truck responding to a call. The driver of the fire truck, though on duty, was allegedly drunk at the time of the accident. In court, the case resulted in a mistrial due to conflicting testimony over whether Jackson or the driver, or both, were legally drunk at the time. The City has agreed to pay $1.5 million to settle the claim. (Chicago Sun-Times, June 2, 2000)

Corrupt Police Officer First Identified in Civil Lawsuits

As corruption charges continue to reverberate within the Los Angeles Police Department, one observer has pointed out how the civil justice system could be used to help protect citizens. To date, 28 officers have been accused of corruption in Los Angeles County. According to one estimate, those same 28 officers have been named as defendants in at least 108 different civil cases. These cases allege beatings, chokings, and planting evidence. Three of the officers have been sued 10 times or more. The Los Angeles Daily Journal suggests that more study of civil suits against police officers could help to weed out bad cops. (AP, June 1, 2000)

Jury Issues $50,000 Verdict in Excessive Force-Dog Bite Case

Jerome Jarrett was pulled over on suspicion of driving without a license or insurance in Yarmouth, Massachusetts. Fearful of the police, he fled. The officers unleashed their 90-pound Belgian Malinois, who chased and tackled Jarrett. In the ensuing scuffle, the dog bit Jarrett's right knee. Jarrett sued, citing excessive force and prior complaints that the Yarmouth Police Department failed to take necessary steps to train its dogs properly. The jury returned a verdict of $1 for Jarrett's injuries, and $50,000 for attorney's fees. (AP, June 7, 2000)

Wal-Mart, Others Sanctioned for Withholding Evidence

Several recent cases, including a number against retail giant Wal-Mart, have demonstrated what happens to defendants who conceal evidence during discovery. A Chicago case against Shell Oil ended abruptly when a former defense paralegal testified that Shell had deliberately concealed 142 boxes of evidence from plaintiffs. U.S. District Judge Michael Mihm, based in Peoria, Illinois, concluded that Wal-Mart's refusal to release documents owed to plaintiffs in a personal injury case were so outrageous that he would issue a bench verdict without a trial. A Texas judge fined Wal-Mart $18 million for providing deceptive and incomplete answers to direct questions in discovery. A judge in West Virginia has fined Wal-Mart $2,500 for failing to produce documents. Tennessee State University Law Professor Lewis Laska has even started a webpage to track instances where Wal-Mart is fined for abusing discovery. (Chicago Sun-Times, June 25, 2000; June 26, 2000)