ThePopTort

Will the Supreme Court’s Citizens United Decision Declaw our State AG’s?

Right now, there probably no way to adequately describe the horror that the U.S. Supreme Court just rained down on this country with its decision yesterday in Citizens United v. FEC.  As the New York Times put it today,  “With a single, disastrous 5-to-4 ruling, the Supreme Court has thrust politics back to the robber-baron era of the 19th century.  Disingenuously waving the flag of the First Amendment, the court’s conservative majority has paved the way for corporations to use their vast treasuries to overwhelm elections and intimidate elected officials into doing their bidding.” 

Yes, Congress must fix this somehow, but it’s also good to know that there are state Attorneys General out there who are trying to stop fundraising corruption and see this as part of their job.  Like NY’s AG Andrew Cuomo, who filed a lawsuit Wednesday against four New York “fundraising” companies to “shut them down for lying manipulating, and deceiving to get charitable donations.”

The suit is the result of a six-month sting operation in which law enforcement officials obtained jobs with the companies, and found their telemarketers:

   
  * Used aliases and illegally failed to disclose they were paid fund-raisers.

  * Changed the names of charities to sound similar to well-known charities or causes.

  * Lied about the programs client charities actually provided.

  * Filed false annual documents with the state attorney general's office containing fake scripts that were made to seem like the ones used by their telemarketers.

Consumer friendly state AG’s have already had a big target on their back for protecting the public from all sorts of corporate misbehavior.  The terrifying impact of Citizens United on state AG races can only be imagined.  Brace yourselves.

Bank of America, Dinosaurs, and Mandatory Binding Arbitration

It’s been quite a good year for consumers complaining about hidden clauses in bank “agreements” that force all credit card and loan disputes into the extremely biased process known as “mandatory binding arbitration.”   First, in March the U.S. Supreme Court made it easier for consumers to challenge these clauses in court.  Then, in an incredible development precipitated by a lawsuit, both the National Arbitration Forum and American Arbitration Association said they would not take part in these credit card collection disputes - for now, at least.

Now, the results of a four-year-old class action lawsuit against several huge banks are starting to bear major fruit, with the latest twist being that Bank of America Corp. earlier this week agreed to drop these clauses in consumer contracts – for a few years, at least. 

The suit said the banks “conspired to require their card customers to resolve disputes in arbitration, including debt collections.”

While Bank of America’s agreement comes some four months after the bank voluntarily stopped enforcing arbitration agreements with existing customers, BoA’s recent settlement goes even further “by removing arbitration clauses from consumer and small business card holder agreements for at least three and a half years.”

Meanwhile, JPMorgan Chase & Co. brokered a similar deal last month.  The remaining stubborn banking bigwigs (like Capital One and Citibank) continue their battle to keep the notoriously one-sided process in place.

Guess some banking “dinosaurs” never learn. 

Merck and Schering-Plough Settle Vytorin/Zetia Suits

Accentuate the positive, eliminate the negative…what a catchy old song!

And apparently, about 140 claimants could just imagine the execs at Merck and Schering-Plough humming along, as they buried (for about two years) an unfavorable study that showed the companies’ jointly marketed cholesterol drugs, Vytorin and Zetia “were no more effective in unclogging arteries than a pre-existing and less expensive cholesterol treatment[s].”

That’s right civil justice fans, in yet another story about drug companies accused of burying unfavorable (i.e., bad for profits) test results, Merck and Schering-Plough have agreed to a $41.5 million settlement (without admitting any wrongdoing), resolving 140 claims brought by insurers and consumers “who bought, used, or paid money toward the purchase of Vytorin and Zetia.”

While the settlement doesn’t come close to the $5 billion Merck paid out to settle suits involving its infamous arthritis painkiller Vioxx,  it does come on the heels of a $5.4 million settlement with “attorneys general of 35 states and the District of Columbia for costs incurred in investigating consumer-protection cases involving” Vytorin and Zetia.

Meanwhile, the companies have also settled separate suits from shareholders opposed to the two companies’ planned $41.1 billion merger. 

Ah well, the merger, if and when it happens, will make the new company (under the “Merck” name) the second-largest drug maker (in the second-largest money-making industry)—so company big-wigs will still have plenty to hum about.  Let’s just hope it isn’t at the expense of the public’s safety.

It May be Bedtime for Mandatory Binding Arbitration – Thanks to Lawsuits!

There are more incredible developments on the mandatory binding arbitration front.  A consumer protection lawsuit by Minnesota Attorney General Lori Swanson has resulted in arbitration behemoth, the National Arbitration Forum (NAF), pulling out of “the business of arbitrating credit card debts and other consumer collection disputes nationwide."  According to the Wall Street Journal blog, NAF says that they took this step because it was “being hit with a wave of lawsuits.”

Meanwhile, another arbitration giant, the American Arbitration Association (AAA), recently announced that it too would stop taking part in debt-collection disputes “until some standards or safeguards are established.” 

We might also mention that several bills currently making their way through Congress are aimed at doing just that, not the least of which is one we’ve already talked about, the Arbitration Fairness Act of 2009.  And oh yeah—it is also being reported that arbitration industry indiscretions may ultimately lead to “hundreds of thousands” of past awards being set aside.

So eat a cookie, civil justice fans, because mandatory arbitration as we know it may soon be put to bed.  Here’s hoping anyway. 

Congress Deals with Bankruptcies, Arbitration Today

There are two important hearings in the U.S. House of Representatives today.  First, for the first time, a Chrysler crash victim, Jeremy Warriner, is being allowed to testify about the terrible injustice to Chrysler and GM auto defect victims, whose rights were taken away by the bankruptcy deal worked out with the Obama Administration's auto task force.  A bill in Jeremy's name has been introduced to try to help fix this situation. 

And on the arbitration front, hearings today will focus on "the misuse of arbitration to collect consumer debt."  This comes on the heals of a major announcement last week that Minnesota Attorney General Lori Swanson "reached a sweeping legal settlement that requires a Minnesota company [National Arbitration Forum] to get out of the business of arbitrating credit card debts and other consumer collection disputes nationwide."

More Chrysler/GM “Bankruptcy Loophole” Buzz

Today’s Wall Street Journal is reporting that “[t]he U.S. Treasury Department is negotiating with more than a dozen state attorneys general to roll back two key features of General Motors Corp.'s bankruptcy plan that would have wiped out billions of dollars in potential claims from car-accident victims and closed auto dealers….President Barack Obamas auto task force is considering a plan that would allow those injured in past or future accidents involving GM vehicles to sue the auto maker in state courts after the company emerges from bankruptcy protection, people involved in the discussions said.…The auto task force has been caught off guard by the recent outcry from attorneys general and consumer groups.”

Holy corporate censorship, Batman!  An ad that seriously takes on the “bankruptcy loophole” contained in GM’s Chapter 11 plan (which we’ve posted here and is profiled in the video below) was abruptly pulled by Comcast (America’s largest cable operator) after complaints by GM.  Comcast says a “review” of the ad is pending. 

Philadelphia’s WPVI-TV profiled Terri Cartier whose 2001 Jeep Grand Cherokee seat belt malfunctioned during a rollover accident, causing her to be thrown from the car, suffering “broken bones,” and collapsed lungs that “filled with blood.” "They don't care about people's lives,” Cartier said.   “They don't care about family's lives, children, people who die? But they'll fix a part? I think that's wrong. It's sad."

Houston’s KHOU profiled Jimsey Walton, who lost her husband Mike and several inches of bone in her right leg when their 2002 GMC Yukon was involved in a roll over accident, causing the vehicle’s defective roof to crush, and its defective seat belts to disengage, “partially ejecting” the two from the car. “I lost my husband and my two children lost their dad.  I suffered severe injuries that will follow me the rest of my life,” said Jimsey.  “I think they [GM] should be held accountable for what happened to our family.”

The Detroit Free Press and NBC’s Chicago affiliate (video below) profile the Catalano family who lost their mother, Linda, when her 1997 Chrysler Town & Country inexplicably shifted from park to reverse as she was exiting the vehicle, knocking her to the ground and ultimately resulting in her death.

Special Note: The NBC video below also provides one of the most excellent summations of the whole GM/Chrysler “bankruptcy loophole” debacle that we’ve seen—so definitely check it out.

New Report: 3400 Americans will be Injured or Killed by Defective GM/Chrysler Cars in First Post-Bankruptcy Year Alone

Just as the number of states’ attorneys general filing objections to the “bankruptcy loopholes”
contained in the Chrysler/GM bankruptcies reaches 11, our friends at Safety Research & Strategies, Inc. have released a new report, which predicts more than 3,400 Americans will be injured or killed by defects in the companies’ vehicles in the first year of the “post-bankruptcy era” alone—yet still have no way of holding those companies legally accountable.

According to the report, which includes a full state-by state breakdown of defect suits, “Texas, California, Florida, Ohio, and New York lead the nation in Chrysler and GM death and injury claims.”

Meanwhile, said Sean Kane, president and CEO of Safety Research and Strategies, “There is every reason to conclude that the injury and death rates will continue” because in this economy, people are holding onto their cars longer. 

Another GM/Chrysler “Bankruptcy Loophole” Update

As promised, we’re continuing to follow the Chrysler/GM bankruptcies (and in particular, developments involving the “bankruptcy loopholes” which effectively immunize both companies from lawsuits should defects in the “old” pre-bankruptcy Chrysler GM/vehicles injure or kill people).  Here are some notable press items from the past few days…

Attorneys General from Connecticut, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Vermont, and West Virginia are standing up for injured consumers, filing objections to the GM bankruptcy last Friday (here, here, here, here).

We hear that other states' AG’s will be coming in to raise similar objections soon.

The Detroit News adds to the ever-growing list of heart wrenching tales about Chrysler/GM defect victims, profiling 20-year-old former athlete, Stevie Beale, who was paralyzed from the waist down due to a faulty seatbelt design in her Pontiac Bonneville.

Lynn LoPucki, a professor and bankruptcy expert at UCLA Law School, who is quoted in the article, said, "They should assume liability for their cars. Instead, they give people a very good reason to not buy their cars”

The Atlanta Journal-Constitution and Macon Telegraph both tell the tragic story Nell and Jimmie Davis whose Jeep Cherokee flipped over, crushing the (defective) roof of the vehicle, and killing Jimmie just eight days before the couple’s 48th wedding anniversary.  Nell sued Chrysler, but like so many others, her case is unlikely to go anywhere. “They got all their taxpayer bailout money and now they’re not responsible for anything?” she said.

Illinois AG: Chicago Suburb Supplied Toxic Drinking Water for 20 Years—and Lied About It

In most locales, it’s polite to offer house guests a cool beverage upon entering—perhaps even a nice refreshing glass of water, straight from the tap.  But this next item has us wondering: what will be the go-to beverage in Crestwood, IL, now that state AG Lisa Madigan has filed a civil suit accusing Crestwood officials of knowingly supplying the community with well water laced with cancer-causing chemicals?

While you’re pondering that, also note that one of the officials being sued, former Crestwood Mayor Chester Stranczek, used to brag about his penchant for “pinching pennies,” and in particular, for maintaining the lowest water rates in the county.  (Astonishing how much money can be saved by surreptitiously substituting poisonous water for that more expensive fresh stuff!)

According to the lawsuit, 105 monthly reports were sent to the Illinois EPA stating that no water was being pumped from the toxic well.  Officials also signed various "consumer confidence reports" claiming “all of the village's drinking water came from Lake Michigan.”

Meanwhile, one of the officials named in the lawsuit told the Chicago Tribune that he had known about the use of the poisonous well since 1997.  Needless to say, a federal criminal investigation is currently underway.

In the News

Major major Bush clean-up action today, as Obama issued a new order, through OMB, rebuking Bush's "preemption" policy, stating "pre-emption of state law by executive departments and agencies should be undertaken only with full consideration of the legitimate prerogatives of the states and with a sufficient legal basis for preemption."  So, no longer will agencies be able simply to immunize corporations from lawsuits, as they've been doing in a massive and unprecented scale under Bush.  Congrats to AAJ for its work on this!

A Florida woman who sued the hospital where she contracted the “flesh-eating bacteria” after giving birth, requiring the amputation of her arms and legs, has settled for an undisclosed (though no doubt, damage cap-effected) amount.  

We know that doctors enjoy getting “gifts”  from drug companies, so we weren’t exactly surprised by a new study showing that even small drug company trinkets like coffee mugs and pens have a direct effect on doctors’ prescription writing habits. Meanwhile, the Vermont legislature just passed a law banning nearly all such gifts, and “requiring drug and device makers to publicly disclose all money given to physicians and other health care providers, naming names and listing dollar amounts.”

Lawsuits have a terrific way of unearthing documents that might otherwise have remained buried.  Exhibit A: according to internal documents released during lawsuits against AstraZeneca, marketing executives spent years blocking efforts by company scientists to voice concerns that the drug Seroquel caused weight gain and other problems, saying that disclosing such information “would harm sales.”

NY AG Andrew Cuomo is suing two debt settlement companies that “preyed on consumers” who couldn’t pay their bills, promising to dramatically reduce their debts for a fee and then failing to deliver.