Vested Interest - Tort Briefs - September 2001 Issue

U.S. APPEALS COURT BARS CLASS

The Ninth U.S. Circuit Court of Appeals ruled that a lawsuit over allegedly defective heart pacemakers, including claims for medical monitoring, doesn’t meet the standards of a class action because of differences in state law and variation in the causes of potential injury. The case was a product liability action involving pacemakers containing the allegedly defective ENCOR Bipolar Passive Fixation Pacing Lead Model 330-854, or “854 lead.” (Liability & Insurance Week – June 18, 2001)

Employer can’t enforce noncompete agreement

Reversing the Court of Appeals, the South Caroline Supreme Court ruled that where an at-will employee was required to sign a convenant not to compete in exchange for continued employment, this agreement is unenforceable for lack of consideration. The court ruled “…When a convenant is entered into after the inception of employment, separate consideration, in addition to continued at-will employment, is necessary in order for the convenant to be enforceable.” (Lawyers Weekly USA – June 25, 2001)

Relative of man who killed himself and family awarded $8 million

A Wyoming jury awarded the relatives of a man who shot his wife, daughter, infant granddaughter and then himself $8 million in a suit against GlaxoSmithKline, the makers of the antidepressant drug Paxil. Relatives claimed the drug failed to work properly. The jury found the drug could cause someone to commit suicide or homicide and did contribute to his rampage. It found the drug maker 80 percent liable for wrongful death. (Lawyers Weekly USA – June 25, 2001)

Publishers Clearinghouse settles

Publishers Clearinghouse has agreed to pay $34 million to 26 states to settle lawsuits charging that it had deliberately misled consumers into believing they had won or could increase their chances of winning a sweepstakes by buying magazine subscriptions or other goods. PCH admitted no wrongdoing but acknowledged there were “some consumers who may have been confused, but any confusion was certainly not intentional or deliberate.” The settlement includes $1 million in civil penalties and $13 million for investigative and legal fees. (Liability & Insurance Week – July 2, 2001)

$16.2 million awarded for misdiagnosis

Abbott Laboratories and the University of Washington were ordered to each pay $8.1 million to a Seattle-area woman who claimed flawed results from one of the Abbott’s tests led to unnecessary surgery and chemotherapy because of a misdiagnosis for cancer. The woman contended that a test know as Axym B-hcG, used to determine pregnancy, returned “false positive” readings that she had a deadly form of cancer. (Chicago Tribune – June 30, 2001)

U.S. Supreme Court lets stand

The Supreme Court has let stand a $750,000 product liability award to a former smoker and his wife against cigarette manufacturer Brown & Williamson Tobacco Co., marking the first time an award to an individual smoker has survived the appellate process. In 1996 a Florida jury found the cigarettes were defective and B&W had negligently failed to warn people about the dangers of smoking. (Liability & Insurance Week – July 2, 2001)

California Jury awards Farmers insurance adjusters $90 million

An Oakland jury awarded a class of Farmers Insurance adjusters $90 million in overtime pay as well as $30 million in prejudgment interest plus plaintiffs’ attorney fees and costs. In 1999 the same court determined the adjusters were not exempt administrators and were entitled to overtime pay. The jury award covers 2,402 claims adjusters for overtime not paid them by Farmers from October 1993 to June 26, 2001. A similar class action is pending against Allstate in California and one is expected to be filed against State Farm. (Liability & Insurance Week – July 16, 2001)

Michigan baseball team not liable

The Michigan Court of Appeals has adopted the “limited duty” rule that baseball stadium owners are not liable for injuries to spectators as the result of bats or balls leaving the field during play if safety screening has been provided and there are a sufficient number of protected seats to meet ordinary demand. The panel also found the stadium owner did not breach any duty to provide a warning about the risk of injury from objects leaving the field because it is a “well-known risk that some object might leave the playing field and cause injury.” (Liability & Insurance Week – July 16, 2001)

GAO: consultants’ advice may lead to improper medical claims

The GAO released a report finding health care consultants who conduct seminars or workshops to heath care providers on how to enhance revenue and avoid audits or investigations are giving providers advice which could result in improper or excessive claims to both federal health plans and private health insurance carriers. The report is available at www.gao.gov. (Liability & Insurance Week – July 2, 2001)

Three more states sign laws amending uniform commercial code

Governors of New Hampshire, New Jersey and Oregon have signed into law bills that protect consumers’ long-term financial security under Article 9 of the Uniform Commercial Code. The new laws amend Article 9 to prevent assignment or the placing of a lien on a structured settlement or on workers’ compensation benefits. (Liability & Insurance Week – July 9, 2001)

Families settle with TWA

Seasonal workers entitled to same benefits

The Illinois Supreme Court ruled that seasonal workers injured on the job are entitled to the same workers’ compensation benefits as full-time year-round employees. In dispute was how to compute a roofing foreman’s average weekly wage. The court found that time not worked should be excluded before the average weekly wage is computed. (Chicago Daily Law Bulletin – July 19, 2001)

$22 million settlement in Ford SUV crash

The survivors and families of victims in a 1992 crash of a Ford Explorer reached a settlement of $22 million with Ford and others blamed for the crash. The SUV was bumped from behind by a car and rolled out of control, killing two passengers, leaving one quadriplegic, and causing one to lose vision. Plaintiffs were prepared to prove the Ford Explorer is an unstable vehicle prone to tipping. The SUV was outfitted with Michelin tires that were the wrong size and not approved as replacements. (Chicago Sun-Times – July 20, 2001)

Court awards damages to

A subscription company has been ordered to pay $350,000 for loss of society and companionship to the parents of a man employed by them. The man died with six other young magazine sellers in a Wisconsin van crash two years ago. The ruling was a default judgment against Youth Employment Services, which has not defended itself or even appeared in the case. The judgment will be valid unless the parents request a jury trial on the damages. (Chicago Tribune – July 20, 2001)

Tattoo Parlor to pay for surgery

A tattoo parlor in New Jersey has agreed to pay $7,000 to settle a lawsuit brought by a customer who claimed he had to undergo 13 laser surgeries to correct a misspelled tattoo. The customer decided to get a tattoo depicting a man being stabbed in the back with the legend, “Why Not, Everybody Else Does.” The tattoo artist misspelled “else” as “eleese.” The shop refused to pay for removal of the tattoo, saying the customer had reviewed the approved design ahead of time. The customer sued for $20,000. (Liability & Insurance Week – July 23, 2001)

Home Depot to pay $1.5 million

A Louisiana jury has decided Home Depot should pay a man $1.5 million for injuries suffered in October 1998 when a 70-pound bag of sand fell from a rack at its Baton Rouge store and landed on him. Home Depot said it would likely appeal the verdict. Since 1999, Home Depot said three people have died from falling merchandise at its stores. Earlier this year, Home Depot hired its first safety officer as well as 130 safety managers. (Liability & Insurance Week – July 23, 2001)

Colorado air traffic controller awarded $2.25 million

A Denver jury found a former FAA air traffic controller the victim of religious discrimination when he was fired for refusing to work on his Sabbath. The man had worked for the FAA for five years and said his church observed the Sabbath from sundown Friday to sundown Saturday. A supervisor called his justification a “scam” and fired him after he missed six Saturdays. (Liability & Insurance Week – July 30, 2001)

Sara Lee settles listeriosis suits

Sara Lee Corp. settled the last two lawsuits from a 1998 outbreak of listeriosis that killed 15 people and resulted in six miscarriages. Terms of these settlements were not disclosed but reportedly paid for the victims’ hospitalization as well as their pain and suffering. In 2000, Sara Lee reportedly paid $1.6 million to settle five lawsuits stemming from the outbreak. On June 22, 2001, the company pleaded guilty to a misdemeanor federal charge of selling adulterated meat in connection with the listeriosis outbreak and paid a $200,000 fine. In addition, the company will make a $3 million grant to Michigan State University for food safety research and pay $1.2 million to settle a civil lawsuit for selling adulterated meat to the U.S. Defense Department. (Chicago Sun-Times – July 28 & 30, 2001)

Blue Cross to pay

Blue Cross Blue Shield of Minnesota agreed to pay a $1 million settlement to the parents of woman who was denied treatment for her eating disorder and also agreed to begin accepting doctors’ recommendations for the treatment of eating disorders. Her parents covered the cost of her treatment, but after five years, the woman committed suicide. Her parents sued Blue Cross for refusing to pay. The settlement does not apply to insurance companies in other states, but observers said it could lead to similar lawsuits and changes across the country. (AP – July 31, 2001)

Gun maker not liable for weapons

The California Supreme Court ruled that victims cannot sue gun makers when criminals use their products illegally, rejecting a suit stemming from the 1993 massacre of eight people in a skyscraper. Surviving victims claimed the gun maker, Navegar, was liable for the damages because it marketed the guns to appeal to criminals, and Navegar should have foreseen it would be used in a massacre. The court said the legislature’s rules regarding product liability do not allow for such suits against gun manufacturers. (AP – August 6, 2001)

TLPJ sue AT&T

A class action suit on behalf of all AT&T long distance telephone customers in California was filed by Trial Lawyers for Public Justice and a San Francisco law firm. At issue in the suit is a new contractual clause in the company’s service agreement, scheduled to take effect nationwide August 1. The new clause would require AT& T customers to use arbitration in disputing a claim and ban them from filing a class action against the company. The suit also challenges specific aspects of the new arbitration plan, such as secrecy provisions which the suit claims would deny customers access to information about the American Arbitration Association’s costs or its record about how many times it has ruled in favor of corporate defendants. (Liability & Insurance Week – August 6, 2001)

Judge overturns $3 billion verdict against Philip Morris

A judge ruled that a jury’s $3 billion verdict against Philip Morris Cos. was excessive, but the company will be permitted a retrial only if the plaintiff does not accept a $100 million settlement. The judge wrote that the plaintiff would have to agree to the reduced $100 million settlement by August 24, or Philip Morris would be granted a retrial “solely on the issue of punitive damages.” (Chicago Tribune – August 10, 2001)

Airlines Liable for woman’s death

A federal judge ruled that American Airlines and America West Airlines are responsible for a woman’s death because they made her check a bag containing her asthma medication and then lost it. Her family was awarded $170,000. The woman wanted to carry on a bag with an inhaler and other asthma medication, but a ticket agent made her check it. (AP – June 9, 2001)

Bridgestone/Firestone agrees to $7.5 million settlement

Bridgestone/Firestone Inc. agreed to pay at $7.5 million settlement to the family of a woman paralyzed in a Ford Explorer rollover crash. The settlement was announced after four days of jury deliberations in the $1 billion federal lawsuit. This was the first Firestone lawsuit to go to trial since last summer’s recall of 6.5 million tires. (Chicago Sun-Times – August 25, 2001)

State Farm, Allstate seek reimbursement from Ford, Firestone

State Farm and Allstate are trying to recover from Ford Motor Co. and Bridgestone/Firestone the costs of claims paid to victims in traffic accidents involving Ford Explorers and recalled Firestone tires. StateFarm’s efforts to recover are said to have started several years before last summer’s recall by Bridgestone/Firestone. Allstate’s efforts to recover began last October. (Liability & Insurance Week - July 30, 2001)