ThePopTort

Gotta Laugh.

Gosh, the news has been grim lately. There are shocking levels of poverty in this country and it is only getting worse.  SAT reading scores have fallen to the lowest level on record.  Some people cheer at the notion that someone without health insurance should be left to die.  Economist Paul Krugman tells Steven Colbert that our economy is “functionally like the Depression.” 

Actually, I think it’s more like our brains are functionally in a depression.  I know some people are thinking that a few Tanqueray martinis might be in order but I just heard about a better, healthier solution: just laugh!  Who knew?

There is a new study out about how “the physical act of laughing” itself makes us feel good.  Writes the New York Times, “The simple muscular exertions involved in producing the familiar ha, ha, ha … trigger an increase in endorphins, the brain chemicals known for their feel-good effect.”

We do our best at ThePopTort to find humor in a pretty dry topic – the tort system.  Bor-ing!  So we at least try to mock sanctimonious hypocrites whenever we can.

For example, well-know chemical company Dupont has made no secret of the fact that they dislike being sued or paying punitive damages for causing environmental disasters, which Greenpeace says “continue to jeopardize the lives of about 9 million Americans.”  For example, in 2008 we reported that Dupont would be heading straight to the appeals court to challenge a judge’s ruling that Dupont had engaged in:

wanton, willful and reckless conduct in its operation of the [zinc] smelter in the small town of Spelter, [West Virginia]...Among other things, DuPont was ordered to pay $196.2 million in punitive damages to residents who claimed the company downplayed and lied about health threats from arsenic, cadmium and lead in the air, water and soil for decades.

The company has also made it part of its political mission to push for laws that cut off the legal rights of everyday Americans.  For example, they are a member of the disturbing corporate coalition called the New Jersey Lawsuit Reform Alliance, whose sole mission is to eviscerate the legal rights of New Jersey residents.   

But today, this company took a little break from fighting jury verdicts and went ahead and got one for itself. In fact, some might even call it an eye-popping verdict - more than $919 million - after it sued a South Korea company for one of those life-or-death trade secret violations involving a Dupont fiber.  It’s the third-largest jury verdict on record for this entire year, yet still not enough for this profiteering company.  Now they want punitive damages too!

If hypocrisy like this makes you laugh, we are happy to have helped you today.  If not, well, there’s always Charlie Bit My Finger.

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.

Punishing Offenders Through the Civil Justice System - From Triangle Shirtwaist Factory to Today

Early twentieth century America, a time of great industrial expansion, was also a time of horribly unsafe working conditions.  At the time, the laws on the books were unfair to injured workers and made it extremely hard for them to get compensation for their injuries (which is ultimately what led to the workers compensation system in this country.) 

One of the most horrendous examples was New York City’s Triangle Shirtwaist Factory fire, in which 146 young immigrant women were killed, either burned alive or they jumped to their deaths, trapped inside due to locked doors. Today we commemorate the 100 year anniversary of that fire. 

The factory owners, Max Blanck and Isaac Harris, were tried and acquitted of manslaughter.  But what is less well-known is that they were also sued in civil courts.  If there were ever a situation where punitive damages were in order, it was this case.  But that was not to be.  Here is a fascinating account of those civil trials:

Twenty-three civil suits were filed against Harris and Blanck by the victims’ families claiming, in  total, some $500,000. Without a guilty verdict in the criminal case, the civil litigation became more difficult.  Again, Harris and Blanck hired Max Steuer to defend them.  Steuer raised a host of common law employers’ defenses, such as claiming that the workers assumed all the risks and dangers of their employment and that whatever injuries they suffered were caused by the negligence and carelessness of their fellow workers.  

As pointed out by Crystal Eastman (a young labor activist) in  an article related to her 1907 study of workplace injury and death, the courts at that time had concluded that there were implied terms in an employment contract under which the worker assumed the ordinary dangers of the work, extraordinary dangers of which the worker was aware, and dangers resulting from the actions of fellow workers.  Thus, employee litigants had to prove “direct, individual, mechanical causal connection between the employer and the injured worker.”   

In the case of Margaret Schwartz, her heirs would have had to prove that it was the locked door and not the panic of her co-workers that caused her death.  The only case that went to trial was brought by Anna Gulla, a survivor who claimed compensation for “nervous disease” she suffered as a result of the fire.  The trial lasted two days; the jury did not agree on a verdict and the case was dismissed.  The families, most of them poverty-stricken, were overwhelmed by the necessities of earning a living and could not afford the cost of litigation.

Shortly after the Gulla verdict, all settled with the Asch Building owners for $75 for each life lost.  But Harris and Blanck had insured the factory against loss, and the amount paid by the insurance company to Blanck and Harris amounted to about $400 per victim.  None of that money was paid to the survivors or the heirs of those who had perished in the fire.  In 1913, Blanck was once again arrested for locking the door in his factory during working hours.  He was fined $20.

Meanwhile yesterday, the Bureau of Justice Statistics released its most recent analysis of the use of punitive damages in the country today.  Here are some interesting statistics: the percentage of plaintiff winners awarded punitive damages in product liability cases?  1 percent.  In medical malpractice cases?  1 percent.  Premise liability?  No percent. The median punitive award?  $64,000. 

With paltry numbers like this, I’m not sure where that leaves us as a country, except to say that in 2011, there probably still are plenty of corporate wrongdoers getting away with murder.

Wisconsin’s New Fantasy Governor

This week, Wisconsin’s new Governor Scott Walker laid out the details of his first bills to get the economy moving in Wisconsin and bring jobs back to the state.  Number one on the list? Take away the legal rights of injured people!   Wow, that should really get the economic recovery going! 

In fact, in keeping with the spirit of Wisconsin’s new state government (which flipped from Democratic to Republican this last election), I have a song recommendation.  It’s Radiohead's “In Limbo” (listen here), which has one very predominant lyric: “You're living in a fantasy.” As in:

I'm lost at sea
Don't bother me
I've lost my way
I've lost my way
You're living in a fantasy

Here’s what I mean.  His idea is to bring jobs to Wisconsin by making sure that if your mom or grandma is abused or neglected in a nursing home, your ability to be compensated is severely limited and the nursing home is less accountable. 

Other proposals weaken the accountability of the worst of the worst corporate wrongdoers in Wisconsin– the ones who should be liable for punitive damages, but no longer will be thanks to the Governor’s plan.

For those of us living in the real world, here’s an important thing to remember.  If corporate wrongdoers can’t be sued, they’ll become more dangerous.  That’s what happens.  Laws like this won’t bring back jobs or even keep them.  Just look at Michigan. Several years ago Michigan decided to completely immunize drug companies that produce unsafe drugs.  The business lobbies argued they needed the law to encourage drug companies to stay in Michigan.  No other state has such a law.  No sooner did the law pass than pharmaceutical jobs started leaving Michigan by the hundreds.

In 2005, the Economic Policy Institute (“EPI”) released a study debunking common myths about the costs of the legal system and its burden on consumers. According to EPI,

There is no historical correlation between the inflated estimates of the costs of the tort system and corporate profits, product quality, productivity, or research and development (R&D) spending. Evidence suggests that the tort system, without the proposed restrictions, has actually been beneficial to the economy in all these areas. … [Moreover], significant tort law change would be more likely to slow employment growth than to promote it. Endlessly repeating that so-called ‘tort reform’ will create jobs does not make it true.

Except, of course, if you’re living in a fantasy.

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.

Punitive Damages – The Silly Season

There’s been a lot of silly talk about “punitive damages” lately – the kind of damages awarded when hideous misconduct is involved - so we thought this might be a good opportunity to revisit this misused and misunderstood topic. First, some of the silly talk.

Lanny Davis, former Clintonista turned corporate lobbyist (or even worse) gave a Wall Street Journal interviewer his views about medical malpractice, arguing that judges and juries shouldn’t be allowed to handle them.  His argument was based on so-called “facts” like this:

The problem in the system comes when you move beyond compensatory damages and into the realm of punitive damages. That’s when you penalize a doctor for gross negligence or recklessness. … After all, negligence is not an intentional act. It’s an unintentional act. If it is intentional, then it moves into the realm of the criminal, and that’s really not what people are worried about here.

Worried about?  Who’s worried about punitive damages in medical malpractice cases?  They barely exist.  There were six in the entire state court system in the last year the Bureau of Justice Statistics looked at this. SIX!  And no doubt, they were in cases of horrible misconduct or abuse, and hopefully will still be available when and if families file their civil suits against the Delaware pediatrician who (allegedly) raped and sexually abused 103 children. Hopefully, Delaware does not go down the road of capping punitive damages overall, a direction in which South Caroline may be headed right now, even in the face of “runaway Toyotas.”

Here is what else the Bureau of Justice Statistics has to say about the frequency of punitive damages:  Punitive damages were sought in only 13% of the approximately 14,000 general civil trials with plaintiff winners in 2005; Punitive damages were awarded to only 5% of plaintiff winners, and the median overall punitive damage was $64,000! 

Indeed, a couple of stories recently showed just how reluctant juries are to award punitive damages even against huge corporations, let alone doctors.  First, a story we told you about last week concerning the corporate hog farm, the stench of which was impossible to live around.  No punitives.  The second came in a Louisiana verdict Friday against Exxon Mobil.  The case was brought by 16 former employees because "offshore drilling pipes they cleaned over decades contained radioactive contamination.”   While awarding “nearly $1.2 million as compensation for the increased risk they face of developing cancer … jurors declined to award the workers punitive damages.”  This is even after an earlier jury actually did award punitives in a similar case, an award that was later greatly reduced even thought the court found Exxon’s behavior “reprehensible.”

So where exactly is the crisis?  To paraphrase a certain Senate Majority Leader, people are entitled to their opinion about punitive damages, but they’re not entitled to their own facts.  Go sit in the corner, Lanny!

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. 

The Wrong Respone to Toyota

Have you heard the latest about Toyota's problems?  It now seems the company’s sudden acceleration” fixes” aren’t working. This comes after evidence that the company tried to cover up problems by withholding discovery documents in litigation.  Could it get any worse? 

Oh yes, thanks not to the company, but to our elected leaders.

There have been some very serious questions raised about the National Highway Traffic Safety Administration’s handling of the Toyota debacle, something we have written about here. 

One of the problems, clearly, is that that agency is dangerously underfunded and understaffed.  Ralph Nader wrote in Sunday’s Los Angeles Times that even in the midst of the Toyota situation, “President Obama actually recommended cutting NHTSA's motor vehicle safety budget next year by $8 million.”  (By the way, this is at the same time the President wants to spend another $50 million to support creation of completely unnecessary new court systems to handle medical malpractice cases that our courts currently handle just fine at relatively small cost.)  Nader writes:

Former NHTSA Administrator Joan Claybrook has testified to the need for an immediate budget increase of $100 million just to assure that NHTSA has the technical personnel and capability to meet its obligations in the areas of safety standards, defect recall, enforcement and research.

At a time when about 40,000 Americans die in cars each year and hundreds of thousands more are injured, NHTSA's motor vehicle safety budget is a mere $140 million. By comparison, taxpayers will pay more than four times as much -- about $675 million -- to guard the U.S. Embassy in Baghdad.

Meanwhile, the South Carolina House has just passed a bill to severely cap punitive damages to “$350,000 or three times compensatory damages, whichever is greater.”  In arguing against the bill, opponents cited “runaway Toyotas” as among reasons why punitive damages should not be capped legislatively.  Punitive damages "send a message to corporations about protecting consumers…. ‘Let me tell you what this is truly about; it's corporate greed,’ said Rep. Chris Hart, D-Richland, who talked about how one insurance company made $58.1 billion in profits last year.”

Indeed,  although extremely rare, punitive damages have critical social and financial importance lying not in their frequency, but in the “signals” they send.  As we’ve mentioned before, history shows that companies will sometimes balance safety against profits in determining whether to redesign or recall a defective product, clean up a toxic waste site or end a dangerous practice. Juries know that, to a multibillion-dollar company, even a $1-million punitive damages award is barely a slap on the wrist.

Given the rash of corporate abuse in this country, including the Toyota disaster, a punitive damages “cap” seems like the worst possible idea at the worst possible time.

Nursing Home Abuse, Compensation Limits and MICRA

If you know anything about what goes on in nursing homes these days, like our friends do at NCCNHR: The National Consumer Voice for Quality Long-Term Care, you might find it hard to believe that any politician would want to limit compensation to seniors who are abused or neglected in nursing homes.  House Minority Leader Boehner’s health care bill, for example, would have imposed extreme national liability limits in nursing home cases.

Unfortunately, many states have done this already, like California’s broad MICRA law which imposes one-size-fits all caps on injured patients in that state.  But even MICRA has exceptions, and we’re hoping they apply in this highly unsettling elder abuse story out of Ventura County, CA, involving a 71-year-old woman named Maria Arellano.  

Arellano, who was left unable to speak after suffering a debilitating stroke, was living in the Fillmore Convalescent Center in 2006 when her family began noticing bruises on her body.  After expressing concerns about the bruises to center personnel, the family was essentially rebuffed—so they set up a hidden camera.  The resulting footage revealed that center employee Monica Garcia had been “slapping Arellano, pulling her around by the hair, bending her neck, fingers and wrists, and treating her violently in a shower chair.”

A civil suit was then filed against the center on Arellano’s behalf.  Although Arellano’s attorney, Gregory Johnson, offered to settle the matter for $500,000, the center refused, never even offering to resolve the matter with mediation.  “There was a lot of arrogance [on the part of the center],” said Johnson.

In the end, a jury awarded Arellano significantly more that her original settlement offer—which brings us back to MICRA—and more specifically, the question of whether it applies to the Arellano case.

Turns out, the California Supreme Court has said that in cases like Maria Arellano, where the abuse was clearly motivated by “malice,” the answer is no.  (See Covenant Care, Inc. v. Superior Court (2004); Delaney v. Baker (1999).)  We’re especially glad to know this, given that another resident who lived across the hall from Arellano at the center (also a non-verbal stroke victim) may have been subject to the same abuse.  His case is pending.

Unfortunately, for most other California patients, the nightmare of MICRA continues.

Sarah Palin “Going Rogue” On the Exxon Valdez Case

We were as surprised as anyone when Sarah Palin actually denounced the really bad 2008 U.S. Supreme Court decision that slashed the Exxon Valdez oil spill verdict, saying 30,000 victims could only get one-tenth of the jury’s award.  She said it was a “huge disappointment,” that she didn’t think was “right” or “fair.”  Sure, Palin’s a civil justice hypocrite, but hey, we’re not proud.  We’ll take it.  Ah, but like so many who were once sucked in by the charms of Sarah Palin, guess we spoke too soon.

Not that we’ve actually read it or anything, but in her uber-popular new book “Going Rogue,” Palin now apparently says the “U.S. Supreme Court ruled in favor of the people,” even calling it a “victory” for Alaskans.  Not only that, she claims to have played a pivotal role in achieving that “victory.”

“’That is the most cockamamie bullsh@t,’” said Dave Oesting of Anchorage, lead plaintiff attorney in the private litigants’ civil case against Exxon and its successor, Exxon Mobil Corp. “’She didn’t have a damn thing to do with it, and she didn’t know what it was about.’”

“It’s a disgrace.  It’s a disgrace to the legal system,” added Riki Ott, a scientist, environmental activist and Prince William Sound fisherman.  “It’s a disgrace to intellectual honesty to call 10 cents on the dollar a win for Alaskans.”

Yeah, didn’t she say that before?