Vested Interest - Tort Briefs - June 2001 Issue

STATE FARM ORDERED TO PAY $1 BILLION IN AFTERMARKET PARTS SUIT

An Illinois Appellate Court has upheld $1.05 billion of a $1.18 billion judgment against State Farm Mutual Automobile Insurance Co. in a policyholder class action over use of generic parts in automobile repairs. The Appellate panel found adequate evidence to conclude that crash parts made by aftermarket suppliers were inherently inferior to those made by original equipment manufacturers. (Liability & Insurance Week – April 9, 2001)

TEXAS JURY AWARDS $56 MILLION IN FEN-PHEN LAWSUIT

A plaintiff in Alice, Texas was awarded $56 million after a jury concluded American Home Products, maker of the diet drug fen-phen, was responsible for her heart damage. The jury awarded $11.5 million in compensatory damages and $45 million in punitive damages. American claims there are solid grounds for having the award reduced or thrown out. (Liability & Insurance Week – April 9, 2001)

TEXAS JURY FINDS NO DESIGN DEFECT IN FORD EXPLORER

A Texas jury decided Ford Motor Co. was not liable in the crash of a 1995 Ford Explorer that went out of control four years ago and rolled over, killing two men. Plaintiffs’ asked for $58 million and alleged Ford knew about potential Explorer rollover problems as early as 1989. Ford said the accident occurred when the Explorer veered off the road and onto a sloped shoulder while trying to avoid a crash with another vehicle. (Liability & Insurance Week – April 9, 2001)

ILLINOIS TIRE MANUFACTURER HIT WITH $55 MILLION VERDICT

A Los Angeles jury ordered Continental General Tire to pay $55.4 million for an accident caused by a failed tire manufactured in the Mount Vernon, Illinois plant. Memos and reports uncovered during the trial revealed quality control problems in every department. Former employees said the company set unrealistic production levels, resulting in shoddily-made tires. (Chicago Sun-Times – April 16, 2001)

ST. LOUIS JURY AWARDS $3.45 MILLION IN PERSONAL INJURY CASE

After twice refusing settlements from his company for injuries sustained at work, an East St. Louis jury awarded plaintiff $3.45 million after finding his employer violated the ADA when it failed to call him back to work. Plaintiff herniated the discs in his neck and back, and was able to show the jury how easily the company could have modified his job so he could return to work. (Chicago Tribune – April 20, 2001)

CELLULAR PHONE COMPANIES SUED FOR HEALTH RISKS

A plaintiff lawyer known for suing the tobacco and asbestos industries has filed class-action lawsuits against cellular phone companies, alleging the companies have known about health risks for users of the phones but failed to warn them. The suits seek to force the wireless industry to cover the cost of headsets he claims would protect users from possible radiation hazards. The suits also seeks unspecified punitive damages. Companies named in the lawsuits include Motorola, Ericsson, Sprint PCS, Nextel, AT&T and Verizon. (AP – April 20, 2001)

COLORADO COLUMBINE VICTIMS TO GET $2.65 MILLION

The parents of the two teenagers who carried out the killings at Columbine High School and the two people who furnished them weapons agreed to pay $2.65 million to the victims’ families. The settlement does not affect lawsuits families have filed against the Jefferson County sheriff’s office or legal claims against the parents brought by another group of victims. (Liability & Insurance Week – April 23, 2001)

APOLOGY SETTLES LAWSUIT

A Chicago alderman apologized in full-page newspaper ads to settle a defamation lawsuit filed against him by a community development group. In a 1998 press release the alderman accused the group of housing criminals. The alderman apologized for “inaccurate information.” The development group said they feel “vindicated by the apology.” (Chicago Sun-Times – May 4, 2001)

VIRGINIA MOTHER SETTLES BABY-SWITCH SUIT FOR $2.3 MILLION

A woman whose daughter was switched at birth at the University of Virginia Medical Center six years ago agreed to settle her claim for damages against the hospital and state for $2.3 million. Under the terms of the settlement, which came one day before the Virginia Supreme Court was to rule on whether $31 million suit could proceed, the woman is to receive $475,000 and $150,000 for attorney’s fees. The daughter the woman has raised since birth is to receive $1.73 million over the next 24 years. (Liability & Insurance Week – April 23, 2001)

HIGH COURT COULD PLACE NATIONWIDE LIMIT ON HARASSMENT CASES

A woman subjected to harassment for years while her employer “sat by and watched,” is seeking front pay and a clarification of the Civil Rights Act, which caps damages for harassment victims at $300,000. The Supreme Court has been asked to decide whether the cap covers “front pay” or damages a court can allow to replace future earnings an employee would have drawn. The woman says she wants front pay because a $300,000 judgement is no big deal to a company as large as the defendant. Medical witnesses for the woman described her as suffering from post-traumatic stress disorder. (AP – April 23, 2001)

FORD REPORT: FAULTY TIRES CAUSE OF ACCIDENTS

A Ford Motor Co. analysis blames faulty tire design and manufacturing, as well as customers’ tire care, for accidents involving Firestone tires on its Explorer sport utility vehicle. The report submitted to federal investigators reflects the automaker’s long-standing position that the Explorer is not to blame for the accidents linked to 174 deaths and more than 700 injuries. The NHTSA is taking the report under consideration. (AP – April 21, 2001)

NO APPEAL FOR RECORD CHIROPRACTIC MALPRACTICE VERDICT

A plaintiff in Cook County was awarded a record $3.7 million in a chiropractic malpractice claim. Plaintiff argued defendant chiropractors ignored X-rays and other signs indicating plaintiff had a degenerative disease that led to sudden paralysis and had defendants delivered proper care, plaintiff would have been advised to seek a specialist for follow-up care to monitor his spinal condition. Defendants have decided not to appeal. (Chicago Daily Law Bulletin – April 25, 2001)

TRAFFIC STOP ARREST OK

The U.S. Supreme Court held that police officers can arrest and handcuff people even for minor offenses punishable by a fine. The justices ruled against a driver who was arrested and handcuffed for failing to wear a seat belt. The court declared such arrests do not violate the Constitution’s Fourth Amendment protection against unreasonable seizures, and police generally can arrest anyone they see breaking the law. Writing for the majority in the 5-4 decision, Justice David H. Souter wrote “The arrest and booking were inconvenient to [the driver], but not so extraordinary as to violate the Fourth Amendment.” (AP – April 24, 2001)

CALIFORNIA SUPREME COURT LETS SIMPSON CIVIL VERDICT STAND

The California Supreme Court declined to overturn the $33.5 million civil verdict against O.J. Simpson for the deaths of his former wife, Nicole Brown Simpson, and her friend, Ronald Goldman. The court turned Simpson down without comment after hearing his arguments that he had been denied the right to confront evidence and witnesses. Simpson now lives in Florida and, under Florida law, the Brown and Goldman families cannot touch either his house there or his pension, which covers his living expenses. (Liability & Insurance Week – April 30, 2001)

ALABAMA TOWN GETS $40 MILLION SETTLEMENT OFFER FROM MONSANTO

The residents of Anniston, Alabama have received an offer from Monsanto Co. to settle a lawsuit brought by the residents after they became aware their ground water had been contaminated by toxic chemicals manufactured by Monsanto from 1927 through 1972. A hearing has been set for a judge to consider whether the settlement should be accepted. If accepted, the settlement would provide each of the town’s residents with about $12,000 as well as $2.5 million to move residents who live close to the Monsanto plant, $3.5 million to a charitable foundation to help residents exposed to the contamination and $1 million for legal fees. (Liability & Insurance Week – April 30, 2001)

JURY AWARDS TRAFFIC ACCIDENT VICTIM $1 MILLION

A jury in Macon County, Illinois awarded a traffic accident victim $1 million. The driver of a car went through a stop sign and struck the victim. After several surgeries, his medical bills were over $92,000. (Decatur Herald & Review – May 14, 2001)

NEW YORK COURT BARS LAWSUIT AGAINST GUN INDUSTRY

In a 7-0 opinion, New York’s highest court has ruled gun manufacturers cannot be held liable under State law for alleged negligence in marketing their lethal but legal products of guns which later cause death or wounding. Judge Richard Wesley wrote: “In essence, plaintiffs argue that defendants had an affirmative duty to investigate and identify corrupt dealers. This is neither feasible nor appropriate for the manufacturers.” The court, however, said manufacturers may become legally liable if they knowingly continue to sell guns to dealers they know are involved in illegal gun sales. (Liability & Insurance Week – April 30, 2001)

HIGH SCHOOL COUNSELOR LIABLE FOR BAD ADVICE

The Iowa Supreme Court ruled a high school guidance counselor is liable for giving bad advice to a student which damaged the student’s career goals. In a 7-2 decision, the court said the counselor was liable for giving inaccurate advice because he had a business relationship with his students as he was “in the profession of supplying information to others.” The counselor gave the high school basketball player incorrect advice at the beginning for his senior year about which courses he should take to meet requirements of the NCAA. At the time, the student had just learned he had been awarded a full five-year scholarship to play at Northern Illinois University after graduation. Although he took the courses the counselor told him to take, he lost the scholarship because he did not meet NCAA academic requirements. (Liability & Insurance Week – April 30, 2001)

KANSAS JURY VERDICT OF $1.2 MILLION UPHELD AGAINST DILLARD’S

A federal appeals court has upheld an all-white jury’s verdict of $1.2 million in a racial discrimination lawsuit filed against Dillard’s department store in Overland Park, Kansas. A black woman brought suit after being accused of shoplifting and being detained by a Dillard’s security guard. No evidence of theft was found. Judge Robert Henry wrote the jury’s inference of racial discrimination was “a reasonable one.” (Liability & Insurance Week – April 30, 2001)

RECORD $3.4 BILLION VERDICT AGAINST EXXON MOBIL

A judge in Montgomery, Alabama upheld the largest jury verdict in state history, $3.4 billion in punitive damages against Exxon Mobil for deliberately underpaying the State for natural gas royalties. The judge agreed with the State’s attorneys that a record verdict was needed to get the attention of the giant oil company. “Exxon has shown no contrition or even changed its royalty payment calculation. Only a substantial punitive award can punish Exxon and deter it and others,” said Circuit Judge Tracy McCooey. (AP – May 4, 2001)

CREDIT CARD CUSTOMERS REQUIRED TO BRING CLAIMS TO BINDING ARBITRATION

The Wall Street Journal reported May 2 that FleetBoston Financial Corp., Citigroup Inc. and MBNA Corp. are altering cardholder agreements to require customers to bring their claims to binding arbitration rather than taking them to court. Banks have been sending out new cardholder agreements not only with the binding arbitration requirement but with a clause making the agreement to arbitration retroactive. A Fleet representative said customers were warned through a fine-print circular inserted in monthly statements that the new clause would take effect within 35 days unless a cardholder wrote a letter to Fleet rejecting the provision. (Liability & Insurance Week – May 7, 2001)

INDUSTRIAL COMMISSION’S RULING WITHSTANDS APPELLATE COURT

The Illinois Appellate Court upheld a decision against an employer by the Industrial Commission awarding death benefits and medical expenses to the widow of a carpet layer. A work injury prevented the carpet installer from returning to work, and he subsequently resumed drinking and died of liver failure. The Court concurred with the Commission that his death was due to symptoms of alcoholism and was casually related to his work injury and was not against the manifest weight of the evidence. (Chicago Daily Law Bulletin – May 3, 2001)

CALIFORNIA SUPREME COURT ALLOWS ELDERLY PATIENTS TO SUE HMOS

The California Supreme Court ruled senior citizens who receive Medicare benefits through health maintenance organizations can sue their HMO for injuries suffered as the result of lack of care. The court ruled 5-2 that plaintiff should have been allowed to sue when Pacificare denied him a lung transplant because it cost too much. Plaintiff died in 1999. One year earlier, a lower state court ruled he and others 65 years or older enrolled in a Medicare HMO could pursue only federal administrative claims to get services they alleged were wrongfully withheld. (Liability & Insurance Week – May 7, 2001)

TOBACCO FIRMS PAY TO APPEAL CASE

Three tobacco corporations that lost a record $145 billion class-action lawsuit in Florida last year agreed to pay more than $700 million to avoid the possibility of having to post a bond that could bankrupt them while they appealed the verdict. In exchange, lawyers for smokers agreed not to challenge a Florida law that protects the tobacco companies from ruinously large bonds they might have had to produce while their appeal made its way through the courts. The three companies include Philip Morris, the Lorillard Tobacco Co. and the Liggett Group. (The Washington Post – May 8, 2001)

VEGETARIANS HAVE A BEEF WITH MCDONALD’S FRIES

Vegetarians filed a proposed class action lawsuit in Washington state accusing McDonald’s of fraud for saying its french fries are cooked in vegetable oil without disclosing that the fries contain some beef. Plaintiffs’ attorney, a vegetarian and native of India where the cow is widely considered sacred, cited an e-mail message from McDonalds in filing the suit: “For flavor enhancement, McDonald’s french fry suppliers use a minuscule amount of beef flavoring as an ingredient in the raw product.” One plaintiff, a Hindu vegetarian, claims a McDonald’s employee told him the fries were vegetarian. McDonald’s says it does not claim its U.S. fries are vegetarian, but fries at its 28 Indian outlets contain no animal extracts. (Liability & Insurance Week – May 7, 2001)

HOSPITAL TO PAY $12 MILLION IN MALPRACTICE SUIT

Cook County Hospital will pay a record $12 million to settle a lawsuit stemming from a nurse’s error that left a 42-year old mother of three with severe brain damage. The nurse administered a dose of medication five times stronger than the attending physician prescribed, stopping the woman’s heart for 35 minutes. The woman is now in a rehabilitation center, is able to breathe on her own and sit in a wheelchair, but cannot talk. She depends on a feeding tube for nourishment. (Chicago Tribune – May 12, 2001)

AUSTRALIAN BARTENDER WINS PASSIVE SMOKING CASE

A New South Wales jury awarded a bartender who developed throat cancer after years of exposure to cigarette smoke more than $265,000 in damages. Plaintiff sued the bar, operated by a military veteran’s group, for negligence caused by breathing patrons’ tobacco smoke at the club between 1984 and 1985. In Australia, the case was one of the largest of its kind and a major warning to bar owners who continue to allow smoking. (AP – May 2, 2001)

CITY OF CHICAGO TO PAY $18 MILLION SETTLEMENT

In an out-of-court settlement, the City of Chicago agreed to pay the family of an unarmed woman gunned down by police $18 million to settle a wrongful death lawsuit. The settlement is believed to be the largest of its kind. The police officer mistakenly thought the woman was holding a gun, but only a black cellular phone was found in her hands after she was shot. (Chicago Tribune – May 8, 2001)

FETUS RULED A “PERSON” IN MED-MAL CASE

The Arkansas State Supreme Court ruled a fetus is a person in a wrongful-death lawsuit brought by a man whose wife and unborn child died during birth procedures, including a living fetus of 12 weeks gestation in the definition of a person. The man claimed the defendants were medically negligent in inducing his wife’s labor and the procedures from thereon. In 1999, the Arkansas State Legislature approved a law specifying that an unborn fetus could be considered a person for some purposes in the law. (AP – May 11, 2001)

JUSTICE DEPARTMENT AND CPSC SUING WAL-MART

The Justice Department and the Consumer Product Safety Commission are suing Wal-Mart and Icon Health and Fitness for failing to report 41 injuries connected with defective exercise equipment sold from 1996 to 1999. Defendants face fines of up to $4.5 million each. The lawsuit says Weider and Weslo exercise gliders had a defect that allowed the seat to collapse during use. Many of the injuries occurred in Wal-Mart stores. Wal-Mart believes they did what they were suppose to do. The government says Wal-Mart learned of a potential problem when an injury occurred at a store in 1996, but did not report it to the CPSC as required by law. (USA Today – May 25, 2001)