Vested Interest - Tort Briefs - May 2001 Issue

NHTSA LINKS 26 MORE DEATHS TO FIRESTONE TIRE FAILURES

The NHTSA has linked 26 more deaths to problems with Firestone tires, most being mounted on Ford Explorers, bringing the total number of deaths NHTSA has associated with the tires to 174. NHTSA said 19 of the 26 deaths were first reported by Safetyforum.com, a product-safety research firm in Arlington, VA, working with trial lawyers suing Bridgestone/Firestone and Ford Motor Co. (Liability & Insurance Week – February 12, 2001)

ALASKA JURY AWARDS $13.3 MILLION IN EPHREDINE DIET CASE

An Alaska woman who suffered a debilitating stroke after taking a diet drug was awarded $13.3 million by a Superior Court in Anchorage. The award includes $12 million in punitive damages and $1.3 million in compensatory damages. The manufacturer of the drug, E’Ola International of St. George, Utah, was found liable for creating an unsafe product and for misleading customers by calling its herbal ephedra diet drops “all natural” even though they were spiked by synthetic ephedrine, found by state and federal authorities to cause adverse reactions ranging from nervousness to seizure, stroke and death. (Liability & Insurance Week – February 12, 2001)

MITSUBISHI, FORD ISSUE MASSIVE AUTO RECALLS

Mitsubishi Motors Corp. and Ford Motor Co. both announced they were recalling hundreds of thousands of automobiles because of safety defects. Mitsubishi recalled 960,000 models to fix a potentially defective ball joint in the front suspension, including the Galant and Eclipse as well as the Chrysler Sebring, Dodge Avenger and Eagle Talon, almost all made in Normal, IL. Ford’s recall included more than 710,000 pickups and minivans because of possible problems with their fuel systems which could result in fire. The Ford recalled vehicles included Mercury Villager minivans made between Nov. 1991 and June 1998 and F-150, F-250, and F-350 Series trucks manufactured between Dec. 1992 and Aug. 1993. (Liability & Insurance Week – February 20, 2001)

CONNECTICUT DOCTORS FILE CLASS ACTION AGAINST SIX HMOs

The Connecticut State Medical Society filed proposed class actions against six big managed care companies for allegedly putting profits ahead of medical decisions. The organization of some 7,000 physicians claims the plans routinely delay payments and approvals to the point that patients suffer and contracts with doctors are breached. Defendants are Aetna U.S. Healthcare, CIGNA Corp., ConnectiCare, Anthem Blue Cross and Blue Shield of Connecticut, Oxford Health Plans Inc. and Physician Health Services. (Liability & Insurance Week – February 20, 2001)

FLORIDA PARENTS OF DOWNED AIR FORCE CADET AWARDED $4 MILLION

A federal jury in Miami awarded $4 million in damages to the parents of a U.S. Air Force Academy cadet killed in the 1997 crash of his propeller-driven T-3A Firefly in Colorado Springs. Plaintiff’s, the cadet’s parents, blamed the death on a defective fuel pump and claimed in their wrongful-death suit against British manufacturer Slingsby Aviation Ltd. that the propeller-driven trainer had a record of 294 fuel vapor locks and 66 engine failures, including nine in the air. (Liability & Insurance Week – February 20, 2001)

NORTH CAROLINA JURY AWARDS $8.1 MILLION TO RELATIVES IN PSYCHIATRIC CASE

Plaintiff was an engineering manager for IBM when he became ill after being asked to fire colleagues who worked with him. He sought treatment for depression and sleeplessness and was referred by a medical center to a psychiatrist, who sent plaintiff home without seeing him and never spent more than an hour with him. Defendant psychiatrist saw plaintiff twice in 12 days leading up to the day when plaintiff shot himself. Plaintiff was the fifth patient under the psychiatrist care to commit suicide in the past 16 years. (Liability & Insurance Week – February 20, 2001)

STEPHEN KING SUES INSURER FOR UMBRELLA POLICY LIMIT

Author Stephen King, injured in June 1999 when a van struck him as he was walking along a road near Lovell, ME, filed suit against his insurance company, Commercial Union York Insurance Co., for $10 million, claiming it had failed to reimburse him fully for injuries he suffered in the accident. King and his wife are seeking the umbrella policy’s $10 million limit plus interest of 1.5 percent per month. King’s lung was punctured in the accident and several ribs were broken as well as serious damage to his leg and hip. He has undergone five surgeries and is scheduled to undergo another this summer. (Liability & Insurance Week – February 20, 2001)

EXXON ORDERED TO REPAY STATION OWNERS

A U.S. District Court jury in Miami ordered Exxon Mobil Corp. to pay $1 billion in damages and interest to 10,000 gas station owners around the country who said they were overcharged for gasoline for 15 years. Owners said they were unable to tell from Exxon’s invoices if they were receiving the discount. In 1991, a top Exxon official admitted to the dealers they had not received the discounts but promised they would from then on. (Chicago Tribune – February 21, 2001)

POLICE CAN DETAIN SUSPECTS OUTSIDE HOMES

The U.S. Supreme Court ruled police can stop an individual from entering his or her home if they believe drugs or other evidence of a crime are inside. Stemming from a central Illinois case, the Court ruled 8-1 the police in Sullivan did not violate plaintiff’s constitutional rights when they refused to let him go inside his house trailer while they obtained a search warrant. The Court emphasized the police had strong evidence that drugs were inside, and the police acted reasonably when they briefly kept plaintiff outside because they reasoned he likely would have destroyed the drugs. (Chicago Tribune – February 21, 2001)

HEALTH CARE FRAUD COSTS INCREASE TO $30 BILLION PER YEAR

Health care fraud costs during the past two years have increased to about $30 billion a year, according to Scott Serota, president and CEO of the Blue Cross and Blue Shield Association. Last May BCBSA formed a special unit, the National Health Care Anti-Fraud Association, to work with the FBI’s Financial Crimes Section, which has experienced a 400 percent increase in health care caseload and convictions since 1992. Serota said his organization’s special unit already was reporting aggregate savings of more than $133 million. (Liability & Insurance Week – February 26, 2001)

STATES IMMUNE FROM DISABILITIES ACT SUITS

The U.S. Supreme Court ruled state workers cannot file employment discrimination lawsuits against their employers under the federal disability rights law. In the 5-4 ruling, University of Alabama v. Garrett, No. 99-1240, the court said Congress exceeded its authority when it let state workers file claims seeking monetary damages under the 1990 law. Chief Justice William Rehnquist wrote “that such suits are barred by the Eleventh Amendment.” (The Associated Press – February 21, 2001)

ADVOCATES OFFER BOOKLET ON BENEFITS OF LAWSUITS

The Center for Justice & Democracy, an advocacy organization devoted to defending the civil justice system against efforts by those it refers to in quotation marks as “tort reformers,” has published a new booklet, Lifesavers: CJ&D’s Guide to Lawsuits that Protect Us All. The 69-page publication cites cases ranging from aircrafts through vehicles and work-related injuries that, it says, have resulted in increased safety for the public. It is available from the Center at 212/267-2801. (Liability & Insurance Week – February 26, 2001)

JUDGE OKS $4 MILLION PERSONAL INJURY AND WRONGFUL DEATH SETTLEMENT

A judge approved a record settlement in McHenry County for the family of a 42-year old deceased Lakewood, IL, man. Plaintiffs argued wrongful death after doctors failed to make a timely diagnosis of a pulmonary embolism, and if X-rays had been read in a timely fashion, doctors could have sent the man to an intensive care unit for proper treatment. (Chicago Daily Law Bulletin – February 22, 2001)

EX-SMOKER COLLECTS FROM CIGARETTE MAKER

The Florida Supreme Court upheld a jury’s decision in November to award an ex-smoker $750,000. Plaintiff lost a lung to cancer and has become the first person to collect money for beating the tobacco industry in court over smoking-related illness. The Court refused to allow the company to avoid paying the plaintiff while the company pursues the new appeal. Brown & Williamson was ordered to make full payment plus interest, totaling $1,087,191. (The State-Journal Register – March 9, 2001)

TEXAS JURY AWARDS $18 MILLION AGAINST ASBESTOS INSULATION MAKER

An El Paso jury awarded a Texas laborer who was diagnosed last year with asbestosis $3 million for past and future compensatory damages and $15 million in punitive damages. The man was exposed to asbestos during his 40-year career as an insulator at Phelps Dodge Copper Products Corp. in El Paso. The jury found New York-based Quigley Co., a subsidiary of Pfizer Inc., negligent for failing to warn about the dangers of using the company’s “Insulag” brand powdered insulation to protect furnaces, pipes and boilers. (Liability & Insurance Week – February 26, 2001)

SUPREME COURT OPENS WAY FOR SEAMAN TO SUE IN STATE COURT

An injured seaman may claim damages in state court even though the federal Limitation on Liability Act gives the ship owner the right to contest liability in federal court. Plaintiff was a deckhand aboard a ship when he tripped over a wire and hurt his back. He sued in an Illinois court, but the ship owner filed an action in Missouri federal court in an attempt to limit its liability under the Limitation on Liability Act, which limits liability of ship owners to the value of their vessels. The Eighth U.S. Circuit Court of Appeals said the ship owner had to pursue his claims in federal court rather than in state court. The Supreme Court said it erred. Justice Sandra Day O’Connor said state courts “may adjudicate claims like petitioner’s against vessel owners so long as the vessel owner’s right to seek limitation of liability is protected.” (Liability & Insurance Week – February 26, 2001)

CHRYSLER SUED FOR ALLEGEDLY SELLING REPURCHASED LEMONS

Seven North Carolina residents filed a proposed class action lawsuit March 22 against DaimlerChrysler’s Chrysler Group, accusing it of selling repurchased and reacquired vehicles without properly disclosing to the new buyers the cars were recycled lemons. The plaintiffs’ documents show from 1993 to 2000, Chrysler spent about $1.3 billion buying back more than 50,000 vehicles it had been unable to repair and then immediately recouped 70 percent of those buy-back costs by auctioning off 40,000 of the cars to dealers. (Liability & Insurance Week – March 19, 2001)

PROPOSED SETTLEMENT WITH MASS MUTUAL WITHDRAWN

A New Mexico attorney has withdrawn a proposed national class action settlement between Massachusetts Mutual Life Insurance Co. and the two class policyholder representatives he represents because of “the many objections” he has received about it. Mass Mutual would have paid $400,000 to the two representatives of its policyholders but nothing to the other 6.5 million members of the class. The attorney would have received $5 million in cash immediately as well as $250,000 annually for life, plus a $3 million life insurance policy. The suit was filed in 1998 accusing the insurer of not clearly disclosing to its policyholders they would pay higher premiums if payments were made other than in one annual payment. Trial Lawyers for Public Justice asked the court to reject the agreement on the grounds it violated class members’ rights, paid the attorney and class representatives unreasonable sums and let the defendant off the hook for failing to adequately notify its policyholders of unfair, hidden fees. (Liability & Insurance Week – March 5, 2001)

BOB KNIGHT INTENDS TO SUE INDIANA UNIVERSITY OVER FIRING

Basketball coach Bob Knight notified Indiana University he intends to sue the school for firing him after a string of violent incidents. Besides wrongful discharge, Knight claims slander, libel, infliction of emotional distress and interference in Knight’s subsequent job search. He also claims meetings to discuss Knight’s fate violated the state’s open-meeting law. (Liability & Insurance Week – March 12, 2001)

SOUTH DAKOTA REJECTS CHANGE IN CONTRIBUTORY NEGLIGENCE LAW

The South Dakota House of Representatives has rejected a bill that would have required a plaintiff to be at least 40 percent at fault before a jury could reduce an award. Current law allows jurors discretion in reducing a damage award to reflect a plaintiff’s contributory negligence. Plaintiff’s lawyers supported the measure and insurers opposed the change. (Liability & Insurance Week – March 5, 2001)

DISTRICT OF COLUMBIA WHISTLEBLOWER WINS CASE

The U.S. Department of Labor has ordered the District of Columbia Water and Sewer Authority to pay $56,000 to a former contractor who was removed from his job after warning the city it had malfunctioning safety alarms at one of its sewage treatment plants. The contractor is to receive $26,000 in backpay, $20,000 in compensatory damages and $10,000 in punitive damages, plus legal fees. The Labor Department does not usually order punitive damages. (Liability & Insurance Week – March 12, 2001)

DOCTOR OPERATES ON WRONG KNEE

Five years after operating on a man’s healthy hip, a surgeon in New York mistakenly operated on another patient’s healthy knee, even though the leg intended for surgery was marked “yes.” The doctor will no longer practice at the medical center where the surgery was performed, relinquished his title as president of the medical staff and terminated his private practice. (The State Journal-Register – March 18, 2001)

ROCKWELL WINS ADA APPLICANT TEST LAWSUIT

The Seventh U.S. Circuit Court of Appeals held Rockwell International Corp. was entitled to summary judgement against the EEOC which had filed on behalf of 72 job applicants who were rejected for four entry level positions with Rockwell after undergoing nerve conduction tests. Although the applicants did not suffer from any impairment at the time, they claimed Rockwell had discriminated against them because it perceived them as suffering from a disability of using vibrating power tools and performing repetitive motions with right hands. The court ruled Rockwell was entitled to summary judgement after three years of litigation because the Commission failed to produce general employment demographics to indicate the approximate number of jobs in Southern Illinois from which the applicants would be excluded because of their perceived disability. (Liability & Insurance Week – March 12, 2001)

INJURED TEEN GETS $18 MILLION SETTLEMENT

A teenager in Philadelphia who was shot in the head with a pellet from an air rifle, resulting in severe brain injury, will receive a settlement of nearly $18 million from the manufacturer of the BB gun, Daisy Manufacturing. Plaintiff’s claimed the gun was defective because it appeared to be empty but was not. (The State Journal-Register – March 18, 2001)

COLORADO JURY FINDS SKI RESORT NOT LIABLE FOR SKIER’S DEATH

A U. S. District Court jury in Denver has decided Vail Resorts Inc. was not liable for the 1997 death of a skier who was smothered under a pile of fresh, heavy powder when he fell into a shallow gully in the mountain’s back bowls. Plaintiff claimed the resort was to blame for the death of her son, an expert skier, because it failed to mark the gully adequately with warning signs. Colorado’s Ski Safety Act of 1979 shields resort owners from liability for dangers inherent in the sport, while requiring them to warn of other dangers. (Liability & Insurance Week – March 19, 2001)

EMPLOYERS CAN FORCE ARBITRATION

The U.S. Supreme Court ruled employers can force workers to take job-related disputes to arbitration rather than to court. In a 5-4 ruling, the Court said agreements to arbitrate workplace disputes are enforceable even if the employer required the worker to sign the agreement in order to be hired. The arbitration law does not apply to employment contracts for “seamen, railroad employees or any other class of workers engaged in foreign or interstate commerce.” (Chicago Daily Law Bulletin – March 21, 2001)

$9 MILLION SETTLEMENT FOR POLICE BRUTALITY

New York City has approved a $9 million settlement with a Haitian immigrant who was tortured in a police station. Plaintiff would receive payment from the city and the Police Benevolent Association, but would drop his demand for reform in the way the New York Police Department deals with officers accused of abuse. (The State Journal-Register – March 23, 2001)

PARALYZED IRONWORKER AWARDED $9.6 MILLION

A former ironworker who fell from the top of a column at a construction site and fractured his spine was awarded $9.6 million by a Cook County jury. Plaintiff’s said an investigation found the concrete column was improperly set with bolts in epoxy that didn’t set. Plaintiff’s attorney said the defendants admitted liability after contesting their responsibility for three and a half years. (Chicago Daily Law Bulletin – March 26, 2001)

BABY PRODUCTS MAKER FINED $1.75 MILLION

Cosco Inc. and sister company Safety 1st will pay a record $1.75 million in fines to settle charges they did not report safety defects that led to more than 300 injuries and the deaths of two children. The fine is the biggest penalty ever levied by the Consumer Product Safety Commission. Seven products were involved, part in which the companies relabeled or redesigned five products and did not notify the CPSC as required by law. (Chicago Sun-Times – April 5, 2001)

VIRGINIA CHALLENGE TOBACCO SETTLEMENT THROWN OUT

U.S. District Judge James R. Spencer of Richmond has ruled tobacco company Star Scientific doesn’t have standing to challenge the 1998 legal settlement between the country’s largest tobacco companies and 46 state attorneys general because it wasn’t a party to the settlement. Star challenged the settlement as requiring it to pay large sums of money into escrow to cover state claims that may arise in the future, which it considers a violation of due process of law. Spencer ruled the escrow accounts were constitutional. (Liability & Insurance Week – April 2, 2001)