ThePopTort

Crackers the Corporate Crime Fighting Chicken and Missouri's Lead Smelter Verdict

In 1994, a powerful new corporate crime fighter appeared on the scene and his name was Crackers the Corporate Crime Fighting Chicken. Crackers actually did most of his work on television – two different TV shows, to be exact: TV Nation (a 2-year summer replacement series that won a 1995 Emmy for Outstanding Informational Series) and later, The Awful Truth, which aired in the spring/summer of 1999 and 2000.  Sadly, both series eventually ended and without a TV show to feature his adventures in corporate crime-fighting, Crackers slowly disappeared from the scene.  But as we just learned, his work has lived on!

In 1994, while on TV Nation, Crackers visited the Doe Run lead smelter in Herculaneum, Missouri, near St. Louis.  This smelter was poisoning kids with lead, which causes brain damage, so Crackers had a bunch of them tested, spoke to company officials, took his findings over to state regulatory officials, and basically exposed the entire mess to a much wider public.  You can read more about it here and in the wonderful book, Adventures in a TV Nation.  The segment was nomintated in 1996 for an Environmental Media Association award (although sadly for Crackers, the show lost out to one about endangered species - not that there's anything wrong with that.)

But now, all these many years later, the kids in Herculaneum are going to finally get justice thanks to a persistent community, some great lawyers and a jury that seems about as angry about what was done here as Crackers was!  As reported by the St. Louis Post-Dispatch: 

The mystery Friday afternoon was not whether the jury would punish the Herculaneum lead smelter's former owners for negligently exposing 16 children to harmful lead pollution.

The jury had already said it planned to award punitive damages, on top of a $38.5 million verdict as compensation for health problems and lost lifetime earnings.

The only question still lingering in the St. Louis Circuit courtroom at the end of a three-month trial was the size of that award.

The answer: $320 million.

The amount surprised even the plaintiffs' attorneys. They had suggested to the jury a punitive award that was one-third lower.

"I'm stunned," said Gerson Smoger, a Dallas attorney who worked on the case with St. Louis attorney Mark Bronson.

"They obviously wanted to send a message: Don't choose profits over people," Bronson said. "That's what this case is about."…

This case was just one of many targeting the massive lead smelter in Herculaneum, about 30 miles south of St. Louis. The lawsuits claim former and current owners knowingly exposed residents to lead pollution, a neurotoxin that is especially harmful to children. Plaintiffs' attorneys said their clients, children growing up near the smelter, suffered lost IQ points and other health effects from lead poisoning that the company knew existed and only reluctantly revealed.

This case is the first to reach trial.

No doubt, this jury verdict is bound to brighten Crackers' view of retirement, especially in light of what might happen to his Medicare benefits.

Medical Malpractice – Is Anyone Listening?

Here is my first OMG moment of the week, courtesy of the St. Louis Post-Dispatch.  See if you agree with me:

A 5-year-old girl needed surgery to fix a muscle in her left eye.

But Dr. David E. Braverman mistakenly operated on her right eye. And then he tried to cover up his error.

He told her mother that the right eye was bleeding and also needed surgery. She consented. The girl had to be put under anesthesia again. A breathing tube was reinserted. Braverman went back in to do the intended procedure on the left eye.

Later, Braverman altered the girl's charts to justify both surgeries.

The incident went to the state Board of Registration for the Healing Arts, a panel appointed by the governor whose mission is to protect the public.

The botched surgery at Children's Mercy Hospital in a Kansas City suburb in 2003 was another mark on a career that has included at least $2 million in malpractice payments in nine cases, mostly involving diagnosis and treatment errors of children in Kansas and Missouri.

The board let Braverman, a pediatric ophthalmologist, keep practicing without missing a day of seeing patients. His penalty: a reprimand in his file for the Children's Mercy incident. The board won't say whether it investigated any of the other allegations of substandard care.

Sorta says it all about where we are on medical malpractice these days.  Horrible malpractice continues at epidemic levels (see Center for Justice & Democracy’s new fact sheet here).  State disciplinary board doing absolutely nothing to properly police the small number of physicians responsible for most of it (as we've noted before), especially repeat offenders.  And lawsuits are dropping precipitously (see CJ&D's fact sheet mentioned above).

Here’s some other things of note about Missouri, where this occurred. There has been a “cap” on compensation for patients, as well as other tort restrictions, since the mid-1980s.  This has most likely  endangered the lives of patients. And as far as medical malpractice insurance rates, these “caps,” while harming the most seriously-injured patients, have made no difference for doctors.  A study last year from Americans for Insurance Reform compared Missouri and Iowa, two neighboring states.  Iowa has never had a cap.  In the last five years studied by AIR, Missouri’s pure premium increased 1 percent, while Iowa’s dropped 6 percent. 

Not that this should be news to anyone.  But is anyone listening anymore?

Happy as a Pig Farm in Slop

That silly “lipstick on a pig” brouhaha during the 2008 presidential election campaign came to mind today when we read about a Missouri jury verdict yesterday.  The jury awarded around $11 million to folks living near an 80,000-head hog farm run by industrial food giant Premium Standard Farms, now owned by Smithfield Foods and the state's largest hog producer, over the operation’s stifling and intolerable odors. The awards weren’t huge: “$825,000 for each of the 13 plaintiffs. A 14th plaintiff was awarded $250,000, and the 15th got $75,000” and included no punitive damages.

The company is appealing, calling it a “gang trial” and a “gang verdict.” They also believe it was unfair because the company complied with government regulations – an argument we’ve heard before and one that the U.S. Supreme Court isn’t too fond of.

Mostly what the families want is odor abatement.  Their attorney said, "’If we sit down and talk, we can include more than money,’ ... ‘It's common sense. Nobody wants to live across the street from 80,000 hogs.’”

Premium Standards Farms has itself had its own problems.  Last month, 1,500 northern Missouri residents met with the state Attorney General because of an upcoming deadline for the company to comply with a 1999 court order to implement “$25 million in pollution-reducing equipment” – the deadline has been expanded since “and is still being implemented.”  Meanwhile, “In January, the U.S. Justice Department also reached a $900,000 settlement with Smithfield Foods Inc. and Premium Standard Farms over premerger rule violations.”  (here)

Missouri, it turns out, has a strong history of trying to get local control over operation of these huge corporate hog farms.  The Wall Street Journal wrote:

As livestock operations have grown more industrialized, residents across rural America have banded together to try to keep them out. They say the bigger farms are wreaking havoc on their communities, polluting waterways with manure that can kill fish and sicken people. A popular tool has been county-level "local control" ordinances that govern where a large farm can locate.

While many states have retained authority over the siting of livestock farms, Missouri has a staunch local-control movement that took root in the early 1990s as corporate-controlled hog processors moved in. In 1999, the Missouri Court of Appeals held that a county can implement an ordinance governing livestock farms, including where they are located, if it is rooted in concerns over public health. Today, more than a dozen of Missouri's 114 counties have the ordinances.

Another thing lipstick clearly can’t mask – the smell of rotten eggs. 

A Week of Mixed Messages, Civil Justice Style

In the mid-1980s, both Maryland and Missouri enacted pretty severe “caps” on compensation, which did nothing to reduce insurance rates for doctors. (Among other states.  See Appendix for full list.) While the hopes of Maryland patients were dashed this week when the Maryland Court of Appeals upheld the caps, overturning a lower court decision that had invalidated them, patients in Missouri had renewed hope.  The Missouri Supreme Court heard arguments this week asking that their state’s severe cap be overturned.  This comes after a dynamite St. Louis Post-Dispatch editorial slamming the medical establishment for forcing this cruel law on Missouri citizens, which we wrote about.

Also this week, Senator Patrick J. Leahy (D-VT), who chairs the U.S. Senate Judiciary Committee, as well as 18 other Senators, sent letters to President Obama and leaders in Congress “urging them to repeal the limited exemption for insurers from federal antitrust laws as part of the final version of major health care legislation.”  Incredibly, the insurance industry is the only industry in the country allowed to engage in anti-competitive behavior - except for Major League Baseball, that is.  That’s why, while the insurance industry’s right to price-fix and collude is being condemned, the NFL went to the U.S. Supreme Court this week and asked that the exemption apply to them!  Interesting timing.

And finally, the rabidly anti-civil justice organization, the U.S. Chamber of Commerce, never disappoints with its own brand of mixed messages, announcing again that it may be suing the Environmental Protection Agency over its greenhouse gas policy! Here’s how Chamber CEO Tom Donohue put it: “There are a number of options and processes available both in the courts and in other parts of government.”  How nice for them.  Meanwhile, the Chamber hosted a conference this week on the economy to push its anti-consumer business agenda, in a space constructed by and paid for by AIG.  On second thought, no mixed message there!   

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.

Chryslers’ Bankruptcy Deal—the Casualty Count Begins

With 30 million Chryslers on the road, it was just a matter of time before victims injured in these vehicles, whose rights were wiped out by the auto bankruptcies (making it impossible to learn the real impact of potential defects), would start to emerge.

First come reports of new rollover crashes possibly involving roof crushes, like the afternoon crash that killed a promising 17-year old Massachusetts athelete, or the 15-passenger Dodge van rollover in Missouri that resulted in one woman’s death. 

Meanwhile, the National Highway Safety Administration (NHTSA) is now investigating 2007-2008 Chrysler Jeep Wranglers (with automatic transmissions) following a series of complaints involving “overheating of the vehicle’s transmission.”  In one case, a fire broke out—in another, “transmission fluid leaked onto the catalytic converter leading to smoke.”  The NHTSA investigation, which began August 12, involves some 220,000 Wranglers.  But incredibly, no matter what NHTSA finds, the company is completely off the hook for any deaths or injuries caused by this defect—unless Congress and the Administration fix this.

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.

In the News

The mother of a deceased infant whose body was lost by a northern New Jersey hospital (and never found even after a search of dumps in 3 states – can you imagine?) has filed suit against the hospital and others – New Jersey state regulators have fined the hospital.

Beazer Homes USA Inc., four of its top executives and its auditor, Deloitte & Touche, agreed to settle a class-action suit brought by the Carpenters Pension Trust Fund for Northern California and others, over illegal mortgages (which the company continues to deny).

Ed McMahon and Cedars-Sinai Medical Center finally settled his medical malpractice suit we told you about several months ago.  Poor guy.

New York AG Andrew Cuomo is asking Chevron execs if they’ve been honest with shareholders (like the New York State and New York City Pension funds) about the company's potential liability for decades of pollution in Ecuador.

A confidential settlement has been reached between a Knoxville, TN Days Inn and the parents of a young woman who was raped and murdered by a motel employee who had a master key. 

Wal-Mart will pay an unspecified sum to victims hurt in the “Black Friday” stampede that left one temporary worker dead and several others hurt in Nassau County, NY.

The Missouri Supreme Court has granted a new trial to a man who was injured, and the widow of a state trooper who was killed, when the trooper’s patrol car exploded in a crash due to, they say, a defective fuel tank.

EPA Ruling Doesn’t Hold Water

Attorneys general from New York, Connecticut, Delaware, Illinois, Maine, Michigan, Missouri, Washington, and the Canadian province of Manitoba filed suit against the Environmental Protection Agency (EPA) recently over what they say is an illegal “water transfer” ruling that could contaminate drinking water and harm fisheries.

The AGs argue that a June 9 administrative ruling by the agency could allow the transfer of polluted or contaminated water by ship from one body of water to another. For example, an oceangoing ship might dump salt water into the Great Lakes or a lake’s water could be dumped into a river.

Besides transferring polluted water, the lawsuit suggests the EPA’s rule could allow boats to “easily spread exotic species from one waterway to another,” in such places as the Great Lakes, where large ships routinely dump millions of gallons of “ballast water” into the lakes before taking on loads of raw materials.  (Ballast water is sea water that ships carry for stability and then discharge when their cargo is unloaded. It often contains organisms, larvae, and sometimes even whole fish.)

Isn’t it great to know to know that state AGs aren’t afraid to make waves when government agencies lead us into troubled waters?