ThePopTort

For Law Day, Honoring Those Fighting Forced Arbitration

It’s Law Day, everyone! Actually, it’s May Day. Law Day was a fairly recent Cold War-era creation by a very paranoid United States who thought the whole Maypole/flower basket thing had been taken over by communists. But whatever. We’ll take it.

For Law Day, we would like to honor those who actually respect our legal system and want to free it from the clutches of corporate wrongdoers.  And in fact, we found some yesterday. In fact, we found 37 members of the U.S. House and Senate, led by Senator Al Franken, who yesterday, wrote a powerful letter to new Securities and Exchange Commission Chair Mary Jo White saying:

"We are deeply concerned that the Commission's failure to respond to the dangers posed by widespread forced arbitration will weaken existing investor protections.… We urge the Commission to act quickly to exercise its authority...to prevent this practice and protect investor rights."

The lawmakers are urging “U.S. securities regulators to prohibit Wall Street brokers from forcing customers to sign away their legal right to sue” via forced arbitration clauses with class action bans. (See more about the problems with forced arbitration and class action bans here.)

Notes Reuters, “Brokerages typically require customers to sign pre-dispute arbitration agreements when opening their accounts. Under such agreements, disputes between a brokerage and a customer go to arbitration; customers are prohibited from suing in court.”  Say the lawmakers: 

[T]he SEC should use the authority given to the agency under the Dodd-Frank financial law to reform arbitration clauses.

“To our disappointment, in the almost three years since the Dodd-Frank Act's enactment, the commission has largely disregarded this important mandate.… The time is ripe for the commission to act under [Dodd-Frank] to protect the investing public and prevent further abuse of forced arbitration contracts.”

The legislators also asked the SEC to monitor how many brokers are including mandatory arbitration agreements and class action waivers in their client contracts.

Reuters also notes,

The issue came into the spotlight recently after Charles Schwab Corp expanded the mandatory arbitration clauses in its customer contracts to include class action waivers.

The Financial Industry Regulatory Authority tried to fight the Schwab move by filing a disciplinary action, saying the class action waiver violated its rules.

But a hearing panel upheld Schwab's measure in February.

FINRA is appealing the ruling to the National Adjudicatory Council, a FINRA appellate body that reviews disciplinary decisions.

In the letter to White, the lawmakers said they were alarmed by the Schwab case and said it should be a catalyst for the SEC to act.…

Earlier this month, one SEC commissioner, Luis Aguilar, called for the SEC to take steps to scale back or limit the use of mandatory arbitration agreements.

Aguilar, who in his speech said “allowing investors to take their legal claims to court would 'enhance investor protection and add more teeth to our federal securities laws,'” isn’t the only regulatory official concerned about this arbitration practice. About 17 members of the North American Securities Administrators Association earlier “conducted meetings with more than 40 lawmakers, delivering the same message: That investors should be allowed to go to court to settle a grievance against their broker.”

Meanwhile, Public Citizen has begun a petition drive aimed specifically at Charles Schwab, asking people to “Stand up to Chuck” and "to remove from its terms for investors the forced arbitration clause and the ban on joining together in class actions. Schwab should honor its customers’ rights and end its shameful fight against the Financial Industry Regulatory Authority."

If you do nothing else to honor Law Day today, sign Public Citizen's petition! And while you are at it, don't forget to thank Senator Franken, whose record opposing forced arbitration has been truly inspiring!

Sporting Terror

There’s a great Mr. Rogers quote running around the Internet today: “When I was a boy and I would see scary things in the news, my mother would say to me, ‘Look for the helpers. You will always find people who are helping.”  For those of us who were in Lower Manhattan on 9/11, we know that’s true.  Thank you to the helpers.  Our hearts go out to everyone in Boston today.

There’s really little more to say on a day like this.  But some PopTort readers may find the latest newsletter from the Center for Justice & Democracy somewhat interesting.   It deals with the topic of sports and its lead story is about spectators at sporting events.  The article discusses one of Congress’s first responses to 9/11 - an immunity law, called The Safety Act of 2002.  While really aimed at the developers of anti-terror technologies and usually bestowed on defense and security companies, sports venues are now qualifying for immunity too.  Indeed last year, Yankee Stadium became the first big sports venue to earn this Department of Homeland Security special designation, “meaning that the facility has passed a battery of tests and won approval from DHS, giving the franchise broad immunity against lawsuits stemming from a terrorist attack on the stadium.”  And since that time, NFL and Superbowl venues have received liability protection, as well.

Sadly, just one more thing to think about. 

Hot Pop Topics

If you’ve ever watched The View, you know that every show starts off with Hot Topics,  where the hosts (whoever's left of them) discuss the latest hot news items. No doubt today’s show will address Margaret Thatcher and while they’re on the topic of “death”, probably last night’s Mad Men. 

If there’s any time left on the show, we’d like to suggest a couple other very hot news items (at least in our world) that definitely need discussing! 

The U.S. House Intelligence Committee apparently had a committee staff call briefing with Congress’ paymasters, the U.S. Chamber of Commerce, telling the Chamber that it’s set to pass the highly-controversial cybersecurity bill that not only violates the privacy rights of everyday people (the ACLU calls it a “privacy disaster), it also immunizes big corporations that engage in this behavior. Writes Bloomberg,

Many of the House bill’s corporate supporters are among the top 20 contributors to [Committee Chair Mike] Rogers’ 2011-2012 campaign committee, according to the Center for Responsive Politics, a Washington-based research group. They include AT&T, Verizon Communications Inc., Boeing and Lockheed Martin Corp. employees and their families.

[Ranking Democrat C.A. “Dutch”] Ruppersberger’s top contributors in the same period also include Boeing and Lockheed employees and their families, according to the center.

The American Civil Liberties Union and other advocacy groups have stoked online opposition to the House bill, saying it would allow Americans’ personal data to be shared with the National Security Agency and the military, and let the government use that data for undefined “national security” purposes.

Meanwhile, there’s a medical malpractice case out of Nevada that medical malpractice and insurance expert, Professor Tom Baker at University of Pennsylvania Law School called a possible “sea change” for managed care companies. Specially,

A Nevada jury on Thursday found Nevada affiliates of UnitedHealth Group Inc responsible for infecting two patients with hepatitis C, a disease that attacks the liver. The patients claimed they became infected because their gastroenterologist used allegedly unsafe injection practices for an endoscopy. The third plaintiff was the spouse of one of the patients.

Typically in medical malpractice cases, plaintiffs can only recover damages from the doctor and the hospital. But in the Nevada lawsuit, the plaintiffs argued that UnitedHealth Group should be held responsible because the accused gastroenterologist was part of the company's network and that the insurer should have known about allegedly unsafe practices.

If the plaintiffs' theory of liability is upheld on appeal and adopted elsewhere, it would represent a major change for the insurance companies, and likely increase the scrutiny insurers place on doctors within their network, experts said.

Although the case rests on Nevada state tort law, other state courts could follow Nevada's lead, forcing insurers to make significant changes to their oversight of member doctors, and either raise premiums or further restrict their networks of doctors, said several professors who specialize in medical malpractice law.

Dr. Arnold Rosen must be all ears hearing this news!  (Sorry, bad Mad Men joke.)

The Two Faces of Asbestos Transparency

Just catching up today on our earlier post about the series of hearings held this week by various subcommittees of the U.S. House Judiciary Committee.  So let’s discuss Wednesday.

In the morning, the Center for Justice & Democracy participated in a hearing on the topic of “litigation abuses,” which CJ&D defined this way:  

As a result of hundreds if not thousands of so-called “tort reform” laws that have passed around the country in the last 30 years, a series of recent Supreme Court decisions that have stripped everyday people of their legal rights (including providing corporations with the ability to ban all class actions) and other action and inaction by Congress, the sick, injured and violated struggle even to get into civil court today. 

Actually, this leads right to the Wednesday afternoon hearing on asbestos poisoning. Talk about the struggles of the sick and injured!  But let’s begin with secrecy, shall we?  Since without that, hundreds of thousands of people would not have died from asbestos exposure, and millions more would not face illness or death from asbestos disease, and the lethal cancer known as mesothelioma.

Since at least the 1930s, asbestos manufacturers and their insurers deliberately hid the dangers of asbestos from their own workers and the public.  For example, in 1933, the Johns-Manville Company settled with an attorney for 11 former Manville employees, all asbestosis victims.  The attorney received $30,000 for the victims, in exchange for a written promise that he would not “directly or indirectly participate in the bringing of new actions against the Corporation.”  This fact did not come to light for more than 45 years.  In the meantime, the company was able successfully to avoid damages suits while continuing to poison people.  Had the public known about this settlement, the hazards of asbestos would have come to light decades earlier.  (Learn more by reading this incredible book by Paul Brodeur.)

In other word, lives would have been saved and lawsuits prevented if Big Asbestos had been even the slightest bit transparent about the dangers almost a century ago. 

After killing and sickening all these people, the asbestos industry then used special bankruptcy laws to get rid of all of their asbestos liability through the creation of trusts.  These trusts, set up to compensate victims, have always been underfunded.  As a result, most asbestos victims are grossly undercompensated. 

Usually, multiple asbestos products and companies are responsible for each persons’ exposure.  State laws ensure that every defendant, whether a traditional defendant or a trust, only pays its share of liability.  At Wednesday’s hearing, Caplin & Drysdale attorney Elihu Inselbuch, who has 25 years experience representing victims’ rights in asbestos bankruptcy proceedings, explained:

Think of the shipyard worker, for example, assisting in the repair of countless U.S. Navy warships. The asbestos - containing products which were causes of his injury included boilers, pipe and thermal insulation, gaskets, and many others. A person so injured can legally recover from every company responsible, including both those he sues in the tort system and the trusts that stand in the shoes of bankrupt defendants. The current efforts by ALEC and its members are nothing more than an attempt to shift solvent defendants’ share of responsibility to the insolvent defendants and leave the innocent victims with the resulting shortfall in recovery.

According to a major General Accountability Office study in 2011, the trusts are doing a great job carefully examining evidence of claims before making payments while also preventing any possible fraud. GAO wrote:

According to the officials we interviewed at all 11 trusts we selected, each trust is committed to ensuring that no fraudulent claims are paid by the trust, which aligns with their goals of preserving assets for future claimants. Although the possibility exists that a claimant could file the same medical evidence and altered work histories with different trusts, each trust’s focus is to ensure that each claim meets the criteria defined in its TDP, meaning the claimant has met the requisite medical and exposure histories to the satisfaction of the trustees. Of the trust officials that we interviewed that conducted audits, none indicated that these audits had identified cases of fraud.

Unfortunately, the Wall Street Journal has its own “interpretation” of this statement, publishing some articles lately that instead rely on unnamed, unidentified “politicians, judges and defense lawyers” who claim that the “opportunity for abuse flourishes,” and then unfairly tying this politically-based perspective to anomalies likely paperwork or “keystroke” errors (which are themselves pretty rare, especially for such a vast system). 

But all this is apparently to provide support for federal legislation called the FACT Act, on which there were hearings Wednesday afternoon – a topic about which we’ve written before.  Testified asbestos bankruptcy expert Elihu Inselbuch,

Asbestos defendants and insurance companies, under the guise of creating increased  “transparency,” are introducing proposed legislation in state legislatures [and now Congress] to grant solvent asbestos  defendants new rights and advantages to be used against asbestos victims in court. Some of these bills would also burden the asbestos trusts with unnecessary reporting requirements, slowing their ability to pay claims, and further draining them of the resources needed to make their already diminished payments. In general, the  bills are an attempt to change the rules of the tort  system to provide defendants with an advantage, using the existence of the trusts and claims of a  lack of “transparency” as a subterfuge. …  

It is also important to note that the bill only changes what the trust must report with respect to an  asbestos victim; the bill says nothing of the right of asbestos defendants to demand confidentiality. A typical asbestos defendant who settles a case in the tort system demands confidentiality as a condition of settlement in order to ensure that other victims do not learn how much the defendant paid. Trust payments represent settlements of former a asbestos defendants.  The remaining asbestos defendants now want the trusts to disclose specific settlement amounts and other information that they themselves  do not  provide and that the bankrupt  asbestos defendants who created the trusts  did not provide when they  were  defendants in the tort system .  … 

Here is his conclusion:

Under the rubric of arguing that “transparency” is necessary to prevent supposed fraud, asbestos companies continue their efforts to change the laws at a state and federal level to receive whatever benefits they can from the existence of the trusts.  These laws that seek to enforce disclosure, regulate timing of trust claims, and put additional burdens on these trusts, such as  the  FACT Act, are unjust and unfair to asbestos victims.

These laws were never designed  — nor  intended  — to address fraud in the trust system. Indeed, there is not a scintilla of evidence of any such problem. The real purpose of these laws is to allow solvent defendants to take advantage of the bankruptcies of their co - tortfeasors by shifting to plaintiffs the burdens of the shortfalls caused by the bankruptcies, as well as the burdens of discovery and proof of the bankrupt  tortfeasors’ responsibility. These laws are simply the latest stratagem by corporations that  produced and distributed asbestos - containing products to avoid responsibility for the deaths and  injuries of millions of Americans caused by those products.

Legislators should not allow public policy to be hijacked by special interests, and should be vigilant to protect the rights of injured  workers and their families.

The Cross-Eyed Litigation Focus of the U.S. House Judiciary Committee

When it comes to litigation and the civil justice system, there are two kinds of people in this world.  There are people who are actually familiar with it.  And then there are others.  Consider March.

This week, the American Association for Justice (the plaintiffs’ bar), the DRI—The Voice of the Defense Bar, and the American Bar Association, got together to issue a dire warning about the impact of sequestration on our courts.  Said the groups in a joint statement:

Severe and indiscriminate federal court budget reductions through sequestration combined with chronically anemic state funding for courts threaten access to justice for every American and put court petitioners, staff and judges in physical jeopardy.  … Our organizations representing a concerned legal community, call on  policymakers on Capitol Hill and statehouses across the country to provide adequate funding for  our federal and state judiciaries. Access to justice is a promise that would be too costly for our country to deny.

Meanwhile, the seemingly oblivious U.S. House Judiciary Committee has decided to do nothing about that, but rather to attack victims who use the courts.  What timing, am I right?  The first hearing was held yesterday before the Subcommittee on the Constitution and Civil Justice, called “Excessive Litigation's Impact on America's Global Competitiveness.”  Witnesses included the last minute addition Rocky Flick, former CEO of Blitz USA, which decided to manufacture its plastic gas cans – the kind you might find in your garage – without 4 cent flame arresters.  Not surprisingly, kids have gotten burned and the company is now complaining about lawsuits.  Fortunately, professor Neil Vidmar from Duke University School of Law also testified, stating, “Wild claims about the American tort system and its negative effects on our society have consistently not stood up to scrutiny when examined carefully from an empirical perspective.” Thank you.

Thursday, the Subcommittee on Courts, Intellectual Property and the Internet is holding hearings called, “Abusive Patent Litigation: The Impact on American Innovation & Jobs, and Potential Solutions.”  Supposedly this is to address “patent trolls” which sue companies over patents.  This is not an area of much focus here at ThePopTort, but we do note that the size of personal injury verdicts seems to pale in comparison to the size of patent verdicts these days, which are in the billions and are making companies like Apple even richer. 

We also understand that next week, there will be hearings on anti-victim asbestos legislation, on which the committee wasted time last year and seems to be doing again.  And last but not least, next Wednesday, the Subcommittee on the Constitution and Civil Justice, is holding hearings called “Examination of Litigation Abuses.”  Witnesses for this hearing have not been announced yet, but I would like to offer a few ideas.  First, we should change the hearing title to, “Examination of Litigation Hypocrites."  Witnesses could include the U.S. Chamber of Commerce Institute for Legal Reform, which sues the government three times a week on average while trying to strip everyone else of their legal rights.  Another should be NRA CEO Wayne LaPierre who, after having made sure that no one can sue the gun industry for gun violence, says he will “fight” any new gun laws “in court.”  

Not if they're defunded, he won't.

UPDATE:  Looks like the Patent hearing has been postponed.  We'll keep you posted on that!

The Feres Doctrine’s Military Injustice

The nation, it seems, has suddenly woken up to the problem of military sexual assaults against women. Today, on its front page, the New York Times ran part two of a series about the disproportionate trauma faced by female military vets, often exasperated by sexual assaults that occured while in the military.  Departing  Pentagon chief Leon E. Panetta estimated such assaults could number 19,000 a year.  

Today, the Times wrote about the “common pathway to homelessness for women - [that is,] military sexual trauma, or M.S.T., from assaults or harassment during their service, which can lead to post-traumatic stress disorder.”  And nothing illustrated this crisis better than the Oscar-nominated, award-winning documentary, The Invisible War.  If you haven’t see this film, there are numerous ways to download, watch or screen this extraordinary film today.  And then take action here.

But there is one more thing we must do.  We must change the law, so that sexual assault survivors are no longer prohibited from holding the government legally accountable for its role is allowing this crisis to continue.

Rachel Natelson, Legal Director of Service Women’s Action Network, has a piece in Time magazine called "The Unfairness of the Feres Doctrine," a doctrine that we’ve covered often at ThePopTort.  Basically, the “Feres Doctrine” is a 60-year-old policy that bars U.S. military personnel from suing the government for personal injuries suffered while they are in the armed forces. Even, it turns out, when an epidemic of sexual assaults exists. Writes Nelson:

[F]or Ariana Klay, and other subjects of the Oscar-nominated documentary The Invisible War, however, the wounds of battle are unlikely to fade with the closing credits.

In dismissing Klay v Panetta, a civil lawsuit that Klay brought against the Pentagon for failing to protect her and other service members from sexual violence, U.S. District Judge Amy Berman Jackson has perpetuated a baffling tradition of depriving military personnel of basic civil rights.

Like countless others injured due to the negligence or misconduct of their brothers-in-arms, Klay and her co-plaintiffs have been denied a remedy for the wrongs they suffered, simply because they were harmed during their time in uniform.

Congress can fix this. Thanks to the leadership of Senator Al Franken (D-MN), Congress already fixed a related problem by prohibiting military contractors from covering sexual assaults in its forced arbitration clauses. 

They can do this.  

A Free Market for Gun Owners?

Do not be fooled by the title of this post.  When we say “free market,” we don’t mean a supermarket stocked with shelves of free weapons.  We're talking “Adam Smith!” 

Since the tragedy of Sandy Hook, lawmakers around the country have been trying to figure out what to do about the 2005 law that provides the gun industry with immunity for gun violence, for which the powerful NRA and gun manufacturers lobbied heavily.  (See our post here.)  There are efforts in Congress to repeal the law.

And some lawmakers in Colorado are trying to boost this effort by proposing a state law to hold the industry liable, knowing there may be a conflict but “hop[ing] to help spur an effort to repeal it.” 

So what else can be done? 

Turns out that 25 years ago, Nelson Lund, the Patrick Henry Professor of Constitutional Law and the Second Amendment at George Mason University School of Law (the only Chair in America endowed by the National Rifle Association) proposed a free market idea that would have made Adam Smith very proud - liability insurance for gun owners.  

"My idea was to suggest an idea in which a statute might be drafted that would be designed to inhibit the possession of firearms by irresponsible people and do what liability insurance at least partly does and that is compensate the victims of irresponsible behavior," Lund explained.

Quoting a January 2013 article in the Hartford-Courant, this George Mason University Law School blog post noted:

"Insurance companies 'have the ability to collect the data and they have the analytical approach to understand the risk … This is their business. They make money or lose money over time by their assessment of risk. They aggregate a lot of data and assess risk.'…

"Gun owners, columnist John Wasik said, should be required to pay for the risk that comes with weapons."

"'I'm applying more of a market economics view,' Wasik [said]. 'If we cannot regulate this through constructive means, there are other ways of looking at this in terms of pricing the risk.'"

"The responsible gun owners will not get penalized. The people who are most at risk will pay more."

And according to a February 6, 2013 Reuters article,

California on Tuesday became at least the fourth state to have a liability insurance bill introduced, following Massachusetts, Maryland and Connecticut.

No state has a gun liability insurance law. Since 2003, almost two dozen such bills have been rejected nationwide, 15 of them in New York, according to the National Conference of State Legislatures.…

A Maryland proposal would mandate that anyone possessing a firearm have liability insurance of at least $250,000. It requires anyone selling, renting out or transferring a gun to verify that the person getting it has liability insurance.

Not surprisingly, the “endowers” of the Patrick Henry Professor of Constitutional Law and the Second Amendment Chair, think this infringes on their constitutional rights.  NRA spokeswoman Stephanie Samford said the organization opposed liability insurance for gun owners because it was "economically discriminatory."

"You don't have to carry insurance to exercise any other constitutional right," Samford said.

Maybe they should consult their own Constitutional Law and Second Amendment law professor on that.

Ohio’s Transparently Anti-Victim Asbestos Bill

It was what, maybe 6 months ago, that we posted a story about a federal asbestos bill, the proponents of which publicly argued was “needed” for “transparency,” but what they meant was really this:

OK, we’ve gone out of business and set up underfunded trusts (per bankruptcy laws) to pay compensation to the sick and dying, but the process is just too quick and easy! And that’s especially true for dying mesothelioma patients! So we need to make the process even more onerous by demanding that these trusts greatly increase their unnecessary paperwork, requiring a whole lot of new pointless personal information about victims –meanwhile victims die waiting for what’s owed them.

What we didn’t mention in our post was that this wasn’t just any asbestos bill. This one came Straight Outta ALEC (apologies to N.W.A.) although you’d never know that from the general media coverage of this issue.  ALEC (you may know), or the American Legislative Exchange Council, is the influential, secretive organization that writes state bills to promote the agenda of corporate America. The bill is part of the agenda of ALEC’s very active Civil Justice Task Force, co-chaired by Victor Schwartz, General Counsel for the American Tort Reform Association (ATRA), a corporate group seeking to limit the liability of its corporate members. The legislation generated by this Task Force provides huge legal advantages for our nation’s most negligent and callous companies, many of which have been successfully sued over and over for recklessly causing death and injury to their customers.  (See also, CJ&D’s report, America’s Worst Top Model as well as CJ&D’s Spotlight on Justice on the sordid past of the asbestos industry.) 

While the federal bill ultimately went nowhere in Congress, states influenced by ALEC have been a different story altogether. Yesterday in Ohio, four state senate Republicans joined all 10 Democrats in trying to block this very same bill at the state level, but it wasn’t enough to defeat the legislation, which now moves to Gov. John Kasich’s desk. One of the bill’s major proponents was Sen. Bill Seitz (R-Cincinnati), who co-chairs ALEC’s Civil Justice Task Force with Victor Schwartz.  So there’s that, too.

Writes the Ohio’s Toledo Blade,

Critics of the bill … accused majority Republicans of throwing up more obstacles to asbestos victims, a decade after passing a law that made it tougher for those exposed to the substance to sue.  About 90 percent of some 40,000 asbestos cases pending in Ohio courts at the time were dismissed because the plaintiffs could not demonstrate substantial impairment of their health beyond simple changes in a chest X-ray.

“This legislation is again another example of the 129th General Assembly’s war on Ohio workers,” said Sen. Mike Skindell (D., Lakewood). “It is a piece of legislation brought to us in part by the corporate-influenced American Legislative Exchange Council, otherwise known as ALEC.…

Most manufacturers of products containing asbestos, including Toledo-based Owens Corning, long ago went through federal bankruptcy proceedings that resulted in the creation of more than 60 trusts against which asbestos victims could make claims. This bill is primarily focused on aiding other companies like Perrysburg-based Owens-Illinois that did not go through bankruptcy and are still fighting asbestos-related lawsuits more than 40 years after the fibrous substance was pulled from the market.

The Asbestos Victims Coalition is asking people to call Governor Kasich today. It’s urgent.  Here’s their statement. Once again, it all comes down to Ohio.

BP’s Criminal Vessels

Anyone following legal developments surrounding the Deepwater Horizon oil explosion and spill knows how those responsible have used every maneuver in the book to try to duck blame.  By categorizing the oil rig as a “vessel,” they have tried skirt all kinds of responsibility. For example, on June 3 2010, we wrote,

In an legal maneuver the U.S. Justice Department yesterday called “simply unconscionable,” Transocean has asked a federal judge to apply a 159-year-old law to cap its liability at $27 million – essentially the costs of the sunken rig. AP reports, “If successful, Transocean Ltd. would be left with as much as $533 million in insurance money [which is] almost enough to cover the revenue the company was expecting from a three-year contract with BP PLC.”

Transocean had pulled out of its pocket the Limitation of Liability Act, a primeval law that allows vessel owners to limit their liability to the post-voyage value of the vessel - even though this law was never intended to limit a company’s liability for death and injury to workers. Nine of the 11 workers killed in the explosion worked for Transocean.

Keith Jones, whose 28-year-old son Gordon was one of those killed that day (see Keith below) has been on a painful quest to try to change two other archaic laws, the Death on the High Seas Act and Jones Act, both of which cover deaths on the high seas and both of which severely limit compensation to families of those killed. Thanks to the extraordinary efforts of Keith Jones and others, these laws (on the books since 1920) were almost amended in Congress. But at the end of 2010, U.S. Sen. James DeMint, (R-S.C.), blocked the Senate from voting on it as a gift to the cruise line and shipping industries, which were heavily lobbying against the families’ interests.

But now, this vessel characterization has come back to bite them, big time.  BP has said it will plead guilty to 11 manslaughter charges for these deaths.  Corporate manslaughter is pretty rare but turns out, less rare when vessels are involved!  That’s thanks to another strange maritime law called the Seaman’s Manslaughter Statute. As described by University of Michigan law professor David Uhlmann, formerly of the Environmental Crimes Section at DOJ, who spoke to the Corporate Crime Reporter last year, the Seaman’s Manslaughter Statute, “[is] a very old statute, which predates the environmental laws that were violated in this case.… Under the Seaman’s Manslaughter Statute, it is a crime if a worker dies aboard a vessel because of negligence or inattention to duties by the master of the vessel or the owner of the vessel. …It’s a felony violation that could result in up to ten years in prison and significant fines.”

Incredible that it took this long for these 11 families to get some kind of justice. But as satisfying as this may be, it’s shameful that families are still victimized by these rest of these statutes. 

UPDATE: Attorney General Eric Holder announced that "BP has agreed to plead guilty to 14 criminal counts, including manslaughter, and will pay $4 billion over five years in a settlement.... [A] separate 23-count criminal indictment — including charges of seaman’s and involuntary manslaughter — against the two top-ranking BP supervisors on the Deepwater Horizon drilling rig where a blowout occurred April 20, 2010, sinking the rig and killing 11 workers."

 

Health Care’s Trillion Dollar Mistake

I know what you’re thinking. With a headline like that, we have either, 1. turned into shills for the Obama care repealers; or, 2. created an awesome tease about this year’s PopTort Halloween costumes, where we all dress up as right-wing extremists (covered in, lets say, apoplectic Weekly Standard articles, like this one referencing new CBO scoring of the health care law, screaming about updated cost figures of “about $2 trillion over its real first decade (2014 through 2023).”  Oh, the humanity. 

Actually, it’s neither of the above. There’s another trillion-dollar figure, which is much scarier to us than $2 trillion over 10 years, or $1 trillion over five.  That number is $1 trillion over one.  And rather than anyone getting healthier, they end up sick, injured or dead. I wish this were some fake Halloween prank but it’s not.

According to a new study in the Journal of Health Care Finance by four professionals connected to the Loyola University Chicago’s Quinlan School of Business MBA in Healthcare Management program, the economic impact of this nations’ epidemic of medical errors is “perhaps nearly $1 trillion annually.” That's extraordinary.  The problem is that except for a small number of hospitals that are really trying to address patient safety, hospitals have mostly refused to do so. The authors say it’s because,

The incentives were not substantial enough to overcome the inertia of many hospital cultures and the US payment system. However, those hospitals and health systems that overcame that inertia have experienced tremendous improvement in quality, financial performance, patient safety, and patient satisfaction. In a recent interview on PBS’s Nightly Business Report, Dr. Mark Chassin, The Joint Commission’s president and CEO, said that only about a quarter of the nation’s 6,000 hospitals are involved in some sort of quality improvement effort.

Here’s how they get to the trillion-dollar number:

[B]ased on recent reports, approximately 200,000 Americans die from preventable medical errors including facility-acquired conditions and millions may experience errors. In 2008, medical errors cost the United States $19.5 billion. About 87 percent or $17 billion were directly associated with additional medical cost, including: ancillary services, prescription drug services, and inpatient and outpatient care, according to a study sponsored by the Society for Actuaries and conducted by Milliman in 2010. Additional costs of $1.4 billion were attributed to increased mortality rates with $1.1 billion or 10 million days of lost productivity from missed work based on short-term disability claims. The authors estimate that the economic impact is much higher, perhaps nearly $1 trillion annually when quality-adjusted life years (QALYs) are applied to those that die. Using the Institute of Medicine’s (IOM) estimate of 98,000 deaths due to preventable medical errors annually in its 1998 report, To Err Is Human, and an average of ten lost years of life at $75,000 to $100,000 per year, there is a loss of $73.5 billion to $98 billion in QALYs for those deaths― conservatively. These numbers are much greater than those we cite from studies that explore the direct costs of medical errors. And if the estimate of a recent Health Affairs article is correct― preventable death being ten times the IOM estimate―the cost is $735 billion to $980 billion. …

Quality care is less expensive care. It is better, more efficient, and by definition, less wasteful. It is the right care, at the right time, every time. It should mean that far fewer patients are harmed or injured. Obviously, quality care is not being delivered consistently throughout US hospitals. Whatever the measure, poor quality is costing payers and society a great deal. However, health care leaders and professionals are focusing on quality and patient safety in ways they never have before because the economics of quality have changed substantially.

Some in Congress are not, however.  That’s something to really scream about.