ThePopTort

Oil Industry Faces Off Against Everyone

You would think that with gas prices climbing into the $5 per gallon range, oil companies might want to lay low for awhile - instead of being in everyone’s face.  But what do I know?

Let’s start with the billionaires. In Louisiana, there’s a heated dispute brewing between oil and gas producers, and “the state's wealthiest corporate and individual landowners.”  Writes the Times-Picayune,  

At issue are the law and regulations that govern “legacy lawsuits,” the shorthand for civil actions filed by property owners alleging environmental damages and other claims against energy producers that have previously leased a plaintiff's land. …

A state Senate committee has just held a public hearing on this “billionaires and millionaires versus millionaires and billionaires” dispute.  And when the oil companies are finished down in Baton Rouges, they’ll be heading up to Washington, DC for hearings on legislation that is supposed to be about ethanol, but thanks the Big Oil’s lobbying prowess, has now become legislation about them!

I’m talking about the new Domestic Fuels Protection Act of 2012, on which there are hearings before a House Energy and Commerce Subcommittee this Thursday, April 19.  Charles T. Drevna, President of the American Fuels and Petrochemical Manufacturers, will be testifying in favor of the bill, among others.  (Witnesses opposing the legislation are K. Allen Brooks, Senior Assistant Attorney General and Chief, Environmental Protection Bureau for the State of New Hampshire, and Shannon Baker-Branstetter, Policy Counsel, Energy and Environment, Consumers Union Policy & Action from Consumer Reports.) 

Buried in this complicated piece of legislation are provisions that provide broad liability exemptions to fuel producers, engine manufacturers and retailers of virtually all transportation fuels and fuel additives, like methyl tertiary-butyl ether (MTBE) - a gasoline additive notorious for leaking from underground storage tanks and contaminating groundwater.  As we and many other organizations noted back in 2003 when similar immunity legislation was pending in Congress, immunity for MTBE contamination “poses unprecedented environmental and public health risks” and “a serious threat to the underground aquifers that supply half of the nation’s drinking water.…MTBE is a toxic and highly persistent chemical that has been added to gasoline since the late 1970s. U.S. Geological Survey experts estimate that there may be 250,000 leaking underground storage tank releases of MTBE.”

Finally, back to the gas pumps, we have a true consumer scandal on which NBC’s Jeff Rossen reported this morning on the Today Show.  Turns out that when it's hot outside, you get far less value for the gas you purchase.  (Hot gas loses energy.) Gas pumps with special meters, which calibrate your purchase based on temperature, are available and widely used in Canada. 

No surprise that the petroleum industry here is fighting hard against any requirement for such meters here.  However, says Rossen, thanks to a bunch of class action lawsuits filed by drivers in 21 states, the industry may be caving.  Costco has now apparently agreeed to install temperature meters in warm weather states.  BP Shell and Conaco have agreed to some kind of settlement too, but the details are yet unclear.  Other gas station chains are expected to be in court next month. 

Visit msnbc.com for breaking news, world news, and news about the economy

The Indiana Fair Stage Collapse and Ruing a State Cap – Again.

Back in 1975, Indiana lobbyist Frank Cornelius, whose clients included the Insurance Institute of Indiana, helped secure passage of a hard $500,000 cap on compensation for patients injured by medical malpractice in Indiana.  On October 7, 1994, Cornelius wrote an op ed in the New York Times but it's not what you think.  The article was called “Crushed by my own reform,” and he wrote about the tragic, horrible mistake he made lobbying for this cap, saying he “rue[s] that accomplishment.”  Here's why. Beginning in 1989, Frank Cornelius experienced a series of medical catastrophes that resulted in his wheelchair confinement, respirator-assisted breathing and constant physical pain. Though his medical expenses and lost wages amounted to over $5 million, his claims against both the hospital and physical therapist at fault settled for a mere $500,000 – the cap.  (The Times archives don’t go back that far, but you can find lots of reference to this article like here, here.)

Why is it that people don’t seem to realize the impact of these callous, one-size-fits-all caps until something happens to them?  Or to 160 people in a horrific train collision?  Or when environmental catastrophes occur like the BP explosion and oil spill?  Or when a horrifying stage collapse kills seven people and injures more than 40?  Who exactly do people think are hurt by caps? 

Turns out that Indiana doesn’t just cruelly cap compensation for medical malpractice victims.  It also severely caps responsibility for the stage collapse - at $5 million.  This is about what one catastrophically-injured person – someone like Frank Cornelius, say – might need just to survive.  Or as the Indianapolis Star Tribune put it:

Consider this: If the families of the seven people killed each received the maximum allowed under the law, those payments would eat up $4.9 million -- leaving only $100,000 to split among the more than 40 other people injured. The medical bills of just one victim who spent more than a few days in the hospital would easily eclipse that.

The bottom line is not pretty. Despite the state's pledge to pay out the liability funds as quickly as possible, the sheer number of injuries and deaths means victims and their families are not likely to receive the $700,000 maximum allowed under law. And many are likely to receive payouts far short of their actual medical bills.

Indiana state Rep. Ed DeLaney (D-Indianapolis) says, “This is a place where we actively invited people to come, we chose not to regulate, and then we chose not to shut (the concert) down. Our role is so deep that we need to take care of our people.” So he plans to introduce a legislation to increase the cap, although he admits that even this effort may result only in a one-time only waiver of the cap and not a permanent change in state law.  I’m sure the Insurance Institute of Indiana’s new lobbyist is working overtime to make sure that doesn’t happen.  And looks like he/she may have some allies, like “Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville, who says, 'I probably would not be in favor of that, not a general raising of the cap. I think this is a call to arms by trial lawyers a little bit' and 'Once you start arguing whether a cap should be raised one time, you should be saying, "Do we want the cap raised in all cases?"'  Uh, yeah.

The Star Tribune notes, “there is precedent for stepping outside the lines in the wake of a major tragedy -- both in Indiana and elsewhere.”  For example,

[I]n Minnesota, after the 2007 bridge collapse that killed 13 and injured more than 100 others, the Legislature waived its existing liability cap of $1 million per occurrence. In all, the state ended up paying out a total of $38 million to victims.  None of the lawyers took any fee. …

“When the legislature passes those kinds of (liability caps), they don't really think about that kind of catastrophic event until it happens,” said Carla Ferrucci, executive director of the Minnesota Association for Justice, a trial lawyers group. “What if (victims) need to have lifetime outside health-care support? And with medical bills being what they are, it's pretty easy to rack up a million-dollar medical bill.”

And what about taxpayers who might argue that the state shouldn’t pay these victims?  Well, when victims like this aren’t compensated, they’re forced onto Medicaid.   Taxpayers are gonna pay, one way or another.

(Photo by Joey Foley/Getty Images)

 

"Tort Reform" That Even the Texas Supreme Court Can’t Stomach

The Texas Supreme Court has been called a lot of things.  Pro-business, certainly.  Anti-consumer.  Certainly anti-worker, particularly in light of its highly controversial decision Entergy vs. Summers.  (See our earlier coverage here.) That decision “allows plant owners to obtain immunity from injured workers' suits for damages by providing workers' compensation insurance coverage for subcontractors' employees working on their premises.”  

Or in the words of Becky Moeller, president of the Texas AFL-CIO, with this decision, “The Texas Supreme Court has gouged a giant hole in the legal protections for Texas workers by giving large-business owners a technical loophole to escape the consequences of their own wrongdoing.”   And its not like the law required that they do this.  As State Senator Kirk Watson said, “The Court reached a result that the Legislature has rejected over and over again.”

(See here, here for more explanation, especially how this decision benefits corporate lawbreakers like BP.) 

So you know that striking down so-called “tort reforms” isn’t normally on this court's “to do” list.  More likely its on the “not to do” list -- except apparently, sometimes the greed of these lobby groups has been so extreme that even the Texas Supreme Court can’t stomach it.

With a headline reading “Justices reject tort reform provision,” the Houston Chronicle reported over the weekend that a small part of the brutal 2003 Texas “tort reform” law was struck down by the Texas Supreme Court because its retroactivity provision was “designed to protect one company from a lawsuit brought by a man dying of asbestos exposure,” specifically Crown Cork & Seal Inc. of Pennsylvania.

Apparently, this company has “pushed similar legislation to limit asbestos lawsuits in other states through the national American Legislative Exchange Council” and that “Crown had obtained similar retroactive laws in 10 other states. Pennsylvania courts already have ruled the law unconstitutional there.”

"It shouldn't surprise anybody that a part of [Texas “tort reform"] House Bill 4 is unconstitutional," said George "Tex" Quesada, an attorney at Sommerman & Quesada in Dallas who represents plaintiffs in a variety of cases. "It's taken the court far too long to get started on this."

In The Republic, Plato (pictured above) called avarice “a disgrace.”  Maybe for some, it takes 2300 years to sink in.  But we'll take it where we can get it!

U.S. Civil Justice in Free Fall

The 30-year mission of corporate America to weaken the U.S. civil justice system -  with “tort reform” like contingency fee limits, mandatory binding arbitration and other proposals to force people into alterative compensation systems (which we have criticized specifically for their bias here, here) - has finally yielded exactly the results they seem to want.

The World Justice Project issued a new report today ranking the “rule of law” in 35 countries, including the United States. Full report here.

One of the four “universal principles” WJP examined was “access to justice,” defined as “access to legal representation and access to the courts,” calling these principles a “critical cornerstone for the implementation of policies and rights that empower the poor.”  As to civil justice, WJP  notes,

Access to civil justice requires that the system be affordable, effective, impartial, and culturally competent.  Impartiality includes absence of arbitrary or irrational distinctions based on social or economic status, and other forms of bias, as well as decisions that are free of improper influence by public officials or private interests.

Accessibility includes general awareness of available remedies, availability and affordability of legal advice and representation, and absence of excessive or unreasonable fees, procedural hurdles, and other barriers to access formal dispute resolution systems. Access to justice also requires fair and effective enforcement.

In ranking a country’s “Access to Civil Justice”, WJP considered eight factors:  

8.1 People are aware of available remedies

8.2 People can access and afford legal counsel in civil disputes

8.3 People can access and afford civil courts

8.4 Civil justice is impartial

8.5 Civil justice is free of improper influence

8.6 Civil justice is free of unreasonable delays

8.7 Civil justice is effectively enforced

8.8 ADR systems are accessible, impartial, and effective

In every single one of these categories, U.S. civil justice was worse (e.g., more biased, harder for victims to access the courts and legal counsel) than in countries in Western Europe and North America as a whole, and other “high income” nations throughout the world.  In fact, overall, the U.S. ranks last (7 out of 7) in the region, and last (11 out of 11) among high-income nations.  That's right.  LAST!

Access to civil justice has clearly sunk dramatically in the United States.  In fact, we've noted before this supreme irony: that while U.S. business and medical lobbies are running around trying to strip victims of their legal rights, China – one of the world’s worst human rights abusers – let alone having a pretty bad record on civil justice – is working to greatly broaden access to civil justice for its citizens. 

"Tort reform" is not the only cause of the poor U.S. ranking, of course.  The disgraceful demise of legal service programs in this country is certainly a huge part of it. 

But when corporate and professional lobbyists continue to try to limit injured people’s access to counsel as well as the power and authority of judges and juries, or replace the civil justice system with statutory administrative structures over which corporate money can have more control, look for things to get even worse. 

Once a shining light in the world, the U.S. civil justice system is no more.  Thanks for nothing, corporate America.

Huff Post Repost: America Wakes Up to the Importance of Liability and the Stupidity of “Caps”

Teachable moments can come almost anytime, from anywhere. The recent history of corporate and professional breakdowns and mess-ups should provide a number of them. Bob Herbert raised the issue in a stinging New York Times column recently when he asked, "Will we learn anything from this disaster ...?" BP was his focus but also on his mind was "how the giant financial firms almost destroyed the American economy" and the "devastating mine explosion in West Virginia -- at a mine run by a company with its own hideous safety record ..."

We'll add to that list the Toyota debacle, drug companies marketing contaminated childrens' medications, builders who pushed defective Chinese drywall into thousands of homes, Delaware doctors who covered-up a pedophile pediatrician who raped children, not to mention more and more dangerous hospitals everywhere. What a couple of months.

Keep reading.

Legal Abandon: How Limiting Lawsuits Led To The Financial Collapse And What To Do About It

Did you know that in the mid-1990s, during the disastrously counterproductive “deregulation hysteria” that gripped the country, Congress made it much more difficult for defrauded investors to bring any kind of legal action? 

Did you know that the U.S. Supreme Court has made it almost impossible for defrauded investors to sue companies that help perpetuate securities fraud (think Enron or worse)?   Did you know that Wall Street banks that helped cause the subprime mortgage crisis by buying up predatory mortgage loans, have no liability for this? 

Well, if you want to read more about this mind-boggling tale of corruption and greed thanks to a country controlled by “corporatists” (or as Bill Maher put it, Senators like Evan Bayh), check out the new White Paper from the Center for Justice & Democracy, Legal Abandon: How Limiting Lawsuits Led To The Financial Collapse And What To Do About It.

The Great “Tort Reform” Overreach

There's been some recent news coverage that you don't see everyday.  In all the frenzy to placate special interest lobbyists who want to cut off the rights of average folks to go to court, state and federal lawmakers often overreach big-time, passing truly destructive laws that greatly limit the accountability of wrongdoers – a.k.a “tort reform.”  It's not that this is anything we don't already know, but the media gets it wrong so often that we're always happy to see some honest assessments.

First comes a great editorial from the St. Louis Post-Dispatch about the terrible law passed in 2005 that made worse Missouri’s “cap” on medical malpractice compensation for injured patients, the constitutionality of which is now before the Missouri Supreme Court.  And we quote:

Medical malpractice lawsuits long had been in decline in Missouri when the law was enacted. The best evidence of what was behind the destructive gyrations of premiums costs were boom-and-bust cycles caused by the insurance industry itself.

Nevertheless, the insurance and health care industries saw the chance to save a buck by gaming the system. They used the “crisis” to cut off an entire class of medical negligence victims — capping damages no matter how egregious the injury or reprehensible the malpractice.

With their risk now contained, they have little incentive to settle claims, no matter how legitimate. They are sure to use superior resources and delays to discourage even the most deserving claims. That’s how medical malpractice claims are defended in Missouri’s courts. Anyone familiar with how things work knows this to be true.

Next we have Gary Weiss writing in the business blog Porfolio that Congress screwed up badly when, in 1995, it enacted the Private Securities Litigation Reform Act that made it more difficult for defrauded investors to bring lawsuits.  As a result, “class-action suits haven’t been playing their traditional role in the financial crisis, especially as a means of ferreting out what really happened during the crisis." In fact, there is new data showing that “investor class-action lawsuits declined 24 percent in 2009.”  Pretty terrible timing for that to happen.  He writes:

Class actions ordinarily play a role in the fight against fraud in two ways. One is as a deterrent, to presumably give corporate execs second thoughts before doing stuff they shouldn’t. The second is that class actions result in the discovery process, making it possible for plaintiffs to extract documents and take testimony.

…

It’s a shame that class-action lawsuits are needed at all. In an ideal world, we should have well-motivated regulators ferreting out improprieties by tobacco companies, securities firms, and public companies that cook the books. But the sad fact is that our regulators have become increasingly somnolent in recent years, with the Securities and Exchange Commission and prosecutors bringing far fewer cases during the Bush administration than they did in years past. The SEC is trying to reverse this trend, but it has a long way to go.  Congress can help greatly by rethinking the 1995 law.

After Nearly 7 Years of Torturous “Tort Reforms,” Rural Texans Ask: Where are the Docs?

If you obliterate patients’ rights, they will come (the doctors, that is).  And if you don’t, they’ll leave.  So goes the oft-repeated promise – and threat – of the insurance industry and medical lobbies.  We’re all too familiar with how the “access to care” issue tends to be discussed – couched in hyped-up fear-mongering, not facts. “Who Will Deliver Your Baby?” said the scary, glossy Texas brochure in 2003, with industry arguing that the only way to solve doctor shortages in rural Texas was for patients to relinquish their constitutional rights – which they proceeded to do. 

But facts are stubborn things, as the Texas Observer first pointed out in 2007.  No, the docs were not coming back to these areas.  Not that anyone should be surprised, given the wealth of evidence showing why not.  But that hasn’t stopped politicians from continuing to mislead the public about what happened in Texas, repeating the myth the doctors have returned to underserved areas now that everyone’s legal rights have been stripped away.  

But here come those stubborn facts again!  According to a recent analysis of Texas Medical Board data in the Fort Worth Star-Telegram, “[t]he number of new doctors in family practice, the area most in demand, has increased by only about 200 [since 2003], about 16 percent, and more than 130 counties still did not have an obstetrician or gynecologist as of October [2009].”  Meanwhile, of the new doctors who have chosen to settle in Texas since 2003, more than half have chosen to “settle in the state’s largest urban areas, not in rural areas, where the shortage has been most apparent.”  And twenty-two Texas counties have no doctor at all.

Similarly, the New York Times reported yesterday that in Texas, “180 counties do not have enough physicians, 70 percent of patients cannot obtain a same-day visit with their primary care doctor, and 79 percent of emergency room visits are for routine problems.” 

Ultimately, as Alex Winslow, executive director of Texas Watch, observed: "Consumers [in Texas] are much worse off today….Not only have they not seen the benefits they were promised in healthcare, but now they’ve lost the ability to hold someone accountable. I think that puts patients at greater risk."

New York Hospital Executives Are Acting Like Wall Street Bankers

Wow, those executives really have some nerve, giving themselves outrageous bonuses and all. The bankers again?  No, actually, this time we’re talking about executives at tax-exempt New York City hospitals! This incredible story was dug up by the New York Post last weekend, in a story entitled, "Sickening Bonuses." It is not to be believed. Here’s a sample:

Wall Streeters aren't the only ones raking in big bonuses during tough economic times.

Hospital presidents and CEOs also collect fat bonuses and "incentive payments," even as health-care systems cry poverty,claiming they struggle to break even against government cutbacks, tightwad insurers and skyrocketing costs.

While warning of layoffs and slashed patient services, many hospitals shower their top execs and department heads with bonuses and perks. They include housing allowances, chauffeurs, first-class air travel, tuition for their kids and country-club memberships.

The filings for the city's biggest and most prestigious private, tax-exempt hospitals show at least a dozen CEOs get compensation of $1 million and up. Some also cash in early on million-dollar pre-retirement payouts while on the job.

Meanwhile, the Greater New York Hospital Association just testified in Albany about the hospitals' “woe is me” financial situation, with the nerve to blame patients injured by reckless and negligent health care.  Center for Justice & Democracy responded here with letters to government officials. Hope they take notice!

U.S. Chamber: No to Lawsuits for KBR Rape Victims, But if the Yes Men Punk Us—Sue!

Seems like only yesterday that the U.S. Chamber of  “no-one-should-have-access-to-the-courts-except-us” Commerce (and that means you, rape victims!) was threatening to sue the EPA over their global warming views.  These people are so Neanderthal on issues like climate change, financial regulation and health care that even the White House is coming down on them (leading Chamber president Tom Donohue to warn his growing list of enemies to “put their damn helmets on.”)

Now comes word that they’re running to court again!  In case you missed it, the Chamber got completely punked last week by the activist group, the Yes Men over its denialist views on climate change (see video here).  To supplement the ruse, the Yes Men created a mock website, parodying that of the U.S. Chamber (which you can see here).

Long story short, the Chamber is now threatening to sue if the website isn’t brought down!

Meanwhile, as high profile defections from the Chamber continue, relations with the White House disintegrate, and the Chamber prepares for battle, one wonders just how many more lawsuits the organization intends to file.