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TortsProfBlog has a link to a WSJ article by Dan Slater about whether the U.S. should keep to the “American” rule in litigation mandating that each side pays its own costs or if we should switch to a loser-pays rule such as exists in the U.K.

The reaction of the plaintiffs’ bar is that adopting the “English” rule will prevent low-income people from having access to the courts. On the other side of the fence, advocates of the rule suggest that insurance could be purchased that would end up paying the fees at the end of the day. Plaintiffs’ attorney Mark Lanier, who gained notoriety for winning the first Vioxx trial, said that low-income people would not purchase the insurance, no matter how low the cost.

What is assumed in the article is that insurance companies would not create any problems for policyholders, but those of us who litigate against them regularly know that they would routinely deny coverage and refuse to pay the assessed fees.

Plus, not enough attention is paid to the fact that insurance companies would be the gatekeepers to lawsuits – they could disclaim if they believed a lawsuit would fail. Difficult scenarios would undoubtedly follow. For instance, what if there is definite negligence on the part of the would-be defendant and also comparative negligence by the plaintiff? What would the insurer do then?

Well, you can guess …. in effect, insurers would decide whether or not low-income plaintiffs could file suit to obtain compensation for their injuries. And they would be making profits all the while.

Motivating the entire debate is the frenzy about the supposed glut of frivolous lawsuits that have been filed by plaintiffs in the courts. But frivolous lawsuits almost always get dismissed, and lawyers who file them know they risk having to pay the attorneys’ fees of opposing counsel.

I challenge the reader to ask who has more of a motivation to either file or pursue a frivolous claim – the contingency fee lawyer (which are plaintiffs’ attorneys) who only gets paid if the case settles or wins at trial, or the insurance company lawyer who makes money billing by the hour and thus has the incentive to churn files.

Check out this post by Ezra Klein, a young hotshot journalist at the American Prospect, entitled “Your Insurer Is Not Your Friend.” 

In a nutshell, he explains how the scaremongering tactics of Republicans and insurance companies when it comes to universal health care – warning that government and bureaucrats will come between you and your doctor – a line often repeated by John McCain in the run up to the November elections – has actually been put into effect by insurers (who can count Republicans as one of their top allies).

As just about every doctor’s office knows, it is a royal pain to try and get reimbursement for services from insurance companies. In fact, many doctors have employees in their offices whose sole duties are to communicate with insurance companies and jump through the hurdles they set in their way. 

I have always wondered how this image of a Berlin Wall of sorts being erected between Joe six-pack (or should I say Joe the plumber) and his doctor has not been more heavily criticized by the media. Insurance companies operate for one reason and one reason only, which is to make a profit, and they accomplish that goal by collecting premiums whil simultaneously denying claims. Ask any trial lawyer – insurance companies will do everything possible under the sun to avoid paying a claim, no matter how meritorious.

How is having an insurer involved in health care rather than the government advantageous for the average citizen? The insurer, after all, by not providing coverage for out-of-network providers, by denying care for pre-existing conditions, and by denying claims for new and lifesaving treatments, is the one getting between you and your doctor.

A few days ago, I posted a video that was recently released by the Chamber of Commerce entitled “Faces of Lawsuit Abuse” showing images of those who have supposedly suffered severe hardship as a result of so-called frivolous lawsuits.

The implication was of bankrupted individuals and ruined small businesses because of greedy trial lawyers. Of course, it was all drama and no substance, meaning, the Chamber did not marshal forth any supporting facts or statistics.  

Being one of those maligned trial lawyers, I thought I would offer my own response. If I had the resources to produce a dramatic message for television, I might entitle it: “Insurance Companies: Masters of Frivolous Defenses in Lawsuits.”

And rather than showing a contrasting set of images, say of insurance adjusters in the act of denying claims and injured plaintiffs barely subsisting because their injuries prevent them from working and American society offers a meager social safety net, I would offer the following anecdote from my own practice. As an aside, there is nothing spectacular about this example; it is somewhat run-of-the-mill.

My client, a 30-year old man, was buying a sandwich at a Brooklyn deli on May 2, 2005 when suddenly the ceiling collapsed. He was struck on the head and fell to the floor. When he tried to get up, he noticed that his leg was seriously injured.

A young lady who had been standing next to him was buried underneath the rubble. She reached out a hand to him and he held it. He tried to pull her up but she was buried too deep. After a few moments her hand went limp and she stopped breathing.

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The WSJ reports that the Recording Industry Association of America (RIAA) is set to drop its strategy of filing lawsuits against individuals who allegedly illegally download music from the internet. Instead it plans to work with internet service providers to discourage people from making illegal downloads, including slowing down their internet service.

This plan is a departure from the mass lawsuits filed against individuals in the past, notably including a 13-year old girl and a dead person.

In a previous post, I wrote about the RIAA cases filed in Boston and how a federal judge had pointed out the huge imbalance that existed between the industry and individuals.

A New Jersey Appeals Court ruled last week that the plaintiff in a rollover case involving a 2000 Ford Explorer who lost at trial will have a second bite at the apple since the trial judge gave improper instructions to the jury.

More specifically, the trial judge refused to give a limiting instruction that evidence of the plaintiff’s negligence was not to be considered in determining the threshold question of: was the vehicle defectively designed?

Once that question was decided by the jury, only then could it take plaintiff’s conduct into account. In other words, how the plaintiff acted or failed to act right before the rollover occurred has no bearing on whether that model Explorer was a defective product.

238185_a626a653d11Let’s pull off into the breakdown lane for a moment. For those unfamiliar with product liability law, a design defect exists when a product is not reasonably safe for its intended purpose – (or, for that matter, any reasonably foreseeable use). This analysis involves a consideration of whether the risks involved in using the product outweigh its utility.

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The AP reports that actor Dennis Quaid and his wife agreed to a $750k settlement with Cedars-Sinai Medical Center in Los Angeles which administered an overdose of heparin, a blood thinner, to their newborn twins.

2495125384_c310efb991_mMonths ago, “60 Minutes” reported on this event, and my memory is that the labeling of the different dosages was not distinct and could easily lead to a medication error.  The Quaids’ lawsuit against drug maker Baxter Healthcare Corp. was dismissed by an Illinois court.

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The WSJ reports that Mattel and its Fisher Price unit have settled a case with 39 states for $12 million based on the importation of toys with lead paint from China.

Millions of Chinese-made toys were recalled because they contained amounts of lead that exceeded U.S. standards.

In a 5-4 decision the Supreme Court allowed a class action lawsuit to go forward brought by smokers of light cigarettes against Altria and its Phillip Morris unit for fraud.

The case was brought by Maine smokers under the state’s consumer protection law alleging they had been harmed by the tobacco company’s false statements that “light” cigarettes were safer than regular ones.

The smokers were not suing for damages based on harm to their health caused by cigarettes, but rather were claiming only economic harm caused by the deceptive labeling; in other words, they claim they overpaid for cigarettes because smokers of light cigarettes puff harder and more frequently to get the same effect.

The tobacco companies had argued that the state law claim was preempted by federal law.

The Massachusetts Supreme Judicial Court unanimously upheld a lower court injunction preventing subprime lender Fremont Investment & Loan from foreclosing on certain types of mortgage loans without first notifying the state attorney general and obtaining court approval.

The lower court had said that ”presumptively unfair” loans — the ones subject to the injunction – are those that meet four conditions:

  • An adjustable rate mortgage with an introductory period of three years or less.
  • An introductory interest rate at least 3% lower than the fully indexed rate, or relevant index, at the time the loan began plus the margin in the mortgage note.
  • The borrower’s debt-to-income ratio exceeded 50% when calculating debt using the fully indexed rate.
  • 100 percent financing, a significant prepayment penalty or a penalty extending beyond the introductory period.

The Boston Globe reports that a federal judge in California has ruled that roommates.com, an on-line service that matches roommates, is subject to the federal Fair Housing Act.

497896408_fc06d8e069_m1Roommates.com reportedly requires the disclosure of race, gender and sexual orientation from its users and allows them to query for roommates using these categories.

The website contends that the Fair Housing Act is not intended to apply to the selection of roommates. But a prior California court decision ruled that the website’s search function was “designed to steer users based on discriminatory criteria.”

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