ThePopTort

How to Repair Florida’s Broken Insurance System

Here's a 2006 oped written by Bob Hunter (now retired as Director of Insurance for Consumer Federation of America and former Federal Insurance Administrator and Texas Insurance Commissioner) and Joanne Doroshow, Executive Director of the Center for Justice & Democracy, both co-founders of Americans for Insurance Reform (AIR). It is based on an AIR report, "At the Tipping Point."

Given the struggles that Florida homeowners are about to encounter, we thought it was a good time to repost it. Write the authors: "The time has come for Florida to remove the private sector from the hurricane insurance business – for both homeowners and commercial insurance  - and establish a privately run state plan for the hurricane wind portion of insurance coverage." Did Florida follow this advice? Of course not.

As the one-year anniversary of Hurricane Katrina approaches, the nation’s attention will soon turn again to the Gulf Coast region.  As the country reexamines the devastating institutional response to that tragedy, special attention must be paid to the disappointing performance of the insurance industry, which has left hundreds of thousands frustrated, angry and even destitute as they struggle to survive.

Insurance should be a policyholder’s road to recovery at times of crisis.  But as Floridians know better than anyone, the insurance industry’s response to recent hurricanes has been poor, ranging from resistance to paying legitimate claims to massive cancellations to astronomical price hikes for future coverage.  

This is shocking behavior by the insurers. In the mid 1990s, in the wake of Hurricane Andrew, the insurance industry acted similarly, imposing gigantic price hikes and sharply reducing policy coverage coupled with dropping many homeowners flat.  They promised such actions would bring stability to the insurance markets in hurricane-prone states.  But these promises of stability, the test of the value of insurance to consumers, have been broken. 

Consider just the price of insurance.  After Hurricane Andrew, insurers introduced the concept of using scientific “models” on which to base rates.  The idea was to make pricing more stable for policyholders.  But now, in an amazing broken promise, the insurers are manipulating these models to raise rates, to the detriment of policyholders.   This is beyond unfair and many Floridians are suffering.

Homeowners are not the only ones hurt.  As many businesses are now discovering, insurance coverage is extremely hard to find and even when it’s available, insurers are covering less and less for more and more money.  This month, the Florida insurance department released figures showing that 42 percent of commercial policies have been canceled or not renewed in the past six months, and that among the 32 percent able to find new coverage, rate hikes were astronomical, with policies covering less.

With Florida’s insurance situation in such crisis, state lawmakers should be expected to find real solutions that actually address the economic emergency in which Florida homeowners and businesses find themselves.  But as this past legislative session demonstrated, the majority of state lawmakers and the Governor remain focused on measures that simply give insurers everything they want, including the tools to further increase prices and restrict coverage, rather than to really solve this crisis. 

Now the Governor has appointed a task force headed by Lt. Governor Toni Jennings and filled with insurance and real estate representatives.  Reports indicate they are exploring traditional, temporary fixes, which will not work.  Continuing to try to fix this problem the same way by placating the private market, giving in to their demands in a desperate effort to keep them in the state, is a road to continuing disaster.  That much should be obvious, by now.

But there is an answer.  The time has come for Florida to remove the private sector from the hurricane insurance business – for both homeowners and commercial insurance  - and establish a privately run state plan for the hurricane wind portion of insurance coverage. 

A solution like this is different from current state plans, like the JUA and the Citizens Property Insurance Corp., into which policyholders in high-risk areas are dumped while private insurers keep the lower risks for themselves.  That type of solution is obviously unfair to Florida taxpayers and does nothing to solve this problem.  It is the equivalent of trying to solve the health insurance crisis by having the state insure only terminally ill patients.

By eliminating the profit motive, cutting overhead significantly, eliminating the need to purchase reinsurance and allowing for tax-free reserve build-up, this plan would result in $3 billion more in the bank each year.  Policyholders would benefit immediately, with huge drops in premiums.  Similar positive benefits would accrue to business policyholders if they were included in the plan.

The insurance industry has been adept at exploiting Florida hurricanes by repeatedly threatening to pull the rug out from under the state economy - dumping risk, raising rates and abandoning policyholders altogether.  The time has come to remove the private sector from Florida’s hurricane insurance business, and establish a privately run state plan for the hurricane wind portion of homeowner’s and business insurance coverage.

The “Whoppers for the Prevention of Progress” Award Goes To …

Today, the Pop Tort announces its first-annual end-of-summer “Whoppers for the Prevention of Progress” award to the property/casualty insurance industry. Yay and congrats! And when we say whopper, we’re not talking about burgers. Think “how many whoppers have you told lately that end up wrecking people’s lives?” There was a lot of competition for the award in 2022. Banks, the fossil fuel industry, gun manufacturers, Lindsey Graham. But we think the insurance industry, which few understand (learn more here), is too often overlooked for the lies it tells and the damage it does. Let’s take two recent examples.

New York’s wrongful death law is the most harsh and backward law in the nation. If you are wrongfully killed, your life is only worth something if someone else depended on you for your livelihood. It means, for example, that a nursing home can kill your parent (or you!) and the owners would be virtually immune. This law is so old and outdated that it pre-dates the Civil War when legislators were entirely white men and the Senate was all white men who owned real property – the only people who “mattered” when this law passed nearly 200 years ago.

For decades, New York lawmakers and courts had refused to do what other nearly every other state had done and update their wrongful death law – until now. The Grieving Families Act finally passed after a three-decade long battle. It sits on the New York governor’s desk awaiting her signature. Incredibly, the insurance industry (sitting on a trillion dollar surplus) is actually trying to stop the governor from signing it, using lies and fear-mongering about cost – and absolutely no actual data - to kill this long overdue law (like they always do.)

Funny story. Back in the mid-1980s, Lloyd’s of London’s started threatening states with the collapse of their state’s economy unless they enacted so-called “tort reform” laws that Lloyd’s wanted. Lloyd’s testified before Alaska public officials, for example, “If you [weaken] your tort laws in Alaska, you will have a market here when the rest of the United States will not. Lloyd’s is pulling out of the United States as a reinsurer – they have already pulled out of Connecticut, New York and New Jersey – and they’re continuing to pull out of more states.” Alaska proceeded to do what Lloyd’s demanded and strip Alaskans of their legal rights. But it was based on a lie. Lloyd’s never pulled out of these places. In fact, within two years, desperately in need of U.S. business, Lloyd’s began attempting to smooth over any evidence of withdrawal and minimize their earlier intimidation of public officials.

Unless state officials start demanding actual data from the industry to back up its fraudulent arguments - which it does not have - this industry will never stop trying to bamboozle state officials. Hopefully New York’s governor isn’t falling for it.

Now turning to the climate crisis, which understandably has been a very hot topic in property insurance circles. Obviously insurers don’t want to pay out more for increasing hurricanes, wildfires, and tornados. The easy and irresponsible solution for them is to simply stop covering properties or price-gouging businesses and residents they do cover. But others have observed, they actually have power to do something to improve our climate future.

But when the American Property Casualty Insurance Association had the chance to honestly discuss the climate crisis in a new report, which begins “weather-related disasters are becoming increasingly common – and costly,” they not only fail to make sensible and productive insurance-related recommendations – they barely talk about it! I am not kidding. They quickly dispense with any climate discussion by saying it’s easily handled since insurers can just “model and price” policies (i.e., make policies unaffordable or unavailable). Then comes the bait and switch, directing readers to their happy place: attacking lawyers, lawsuits, and victims like people injured in catastrophic truck crashes or harmed by dangerous drugs. Huh? And not just  that – the attacks are full of deliberately misleading stupidity. They complain about so-called billion dollar jury verdicts without mentioning that judges had already substantially cut those verdicts. They complain about insurance “fraud” by consumers, but cite as back up FBI statistics that highlights insurance company fraud AGAINST CONSUMERS! (Did anyone at this outfit read their own footnotes?) And the “ask” for state legislators and regulators includes stripping victims of their legal rights. Sound familiar?

Thanks for nothing, insurance industry. (You can’t make this stuff up. Oh yeah, they did.)

Amtrak Off The Rails

Back in the olden days when Congress used to function – i.e. 2008 - it passed a law to implement a long sought after safety measure: positive train control technology (PTC) on 30 commuter lines, Amtrak and other railroads. Congress was pressured to do this following a horrible 2008 California Metrolink train crash, which killed 24 passengers and injured 135 others, some catastrophically. The crash might have been completely avoided had the train been equipped with PTC.

Because the rail companies kept getting Congress to extend the deadline to make this technology operational, tragedies kept happening, such as the 2015 Amtrak crash outside of Philadelphia, which killed eight and injured over 200 others including Geralyn Ritter. (Read her horrific account in, “I survived the 2015 Philadelphia Amtrak train crash. I had 31 surgeries, a pain-medication dependency, and depression.") Also the 2017 DuPont, WA Amtrak derailment, where several passenger cars fell onto the Interstate below. Three passengers were killed and 57 passengers and crewmembers along with eight people in highway vehicles were injured. PTC controls would have prevented these crashes.

Welp, we are happy to report that this technology is finally operational on all trains as of December 29, 2020. Congrats railroad companies for doing what you should have done years ago. Remember that railroads, like airplanes, are “common carriers,” which means their business is to transport paying passengers. The law requires them to exercise the highest degree of care and diligence in the safety of those passengers. Failures and delays are inexcusable, yet they continue. (Other examples of railroad safety problems can be found in the Center for Justice & Democracy’s report, “Planes, Trains and Automobiles –and Other Transportation Hazards.”)

Last month, an Amtrak train traveling 87 mph hit a dump truck hauling crushed rock at a Missouri railroad crossing. Four died and 150 were injured. The crossing was not controlled by crossing bars, lights or bells despite previous NTSB recommendations for the railroad to install bars, lights and bells. Some of the injured and families of the dead have now filed lawsuits against all companies responsible including Amtrak, which allowed that train to become dangerously overcrowded, and BNSF Railway, which “was aware of the dangerous passive crossing for years and ignored it.”

But whether the civil justice system will work as it should to compensate these violently-injured victims remains to be seen. As explained in this piece from a local Missouri station, there are two huge obstacles with which Amtrak and Congress have shockingly burdened mass casualty victims. “The first is that Congress has capped the total amount Amtrak has to pay passengers in civil litigation for a single crash to roughly $320 million,” writes the station. This is a “per incident” cap. In other words, it applies no matter how many are killed or injured, the seriousness of their harms, the degree of railroad malfeasance or how many entities are responsible:

Attorney Jeff Goodman now represents an Iowa grandmother who sued Amtrak and BNSF for the Mendon crash, alleging the train was overcrowded. …Goodman's firm also represented clients from the 2015 Amtrak crash in Philadelphia, where eight people died when the cap was $295 million. "I can tell you that in the Philadelphia derailment, the $295 million cap was nowhere near enough," he said.

The second obstacle was erected in 2019, when Amtrak added a buried ticket clause that sends victims into rigged, private, individual arbitration to resolve any dispute. In other words, passengers no longer have the right to go before a judge or jury or band together with similarly injured passengers to pursue claims as a class. On December 10, 2019, more than 30 organizations urged Amtrak to end this practice, as did 18 individuals and family members who were able to obtain compensation following the Philadelphia crash. They wrote,

We strongly believe that the only reason we received some measure of justice – since nothing can bring back our loved ones or make up for the devastating impacts to our lives – is because we had the right to hold Amtrak accountable in a court of law. ...Forced arbitration will take away any incentive for Amtrak to remedy their wrongs, knowing that the secrecy of forced arbitration acts as a shield from accountability and public scrutiny.

Several lawmakers have objected to the forced arbitration ticket clause as well. Legislation to end this practice continues to be introduced. At a 2019 U.S. House subcommittee hearing on Amtrak’s reauthorization, U.S. Rep. Stephen Lynch (D-Mass.) observed that forcing cases into secret arbitration following crashes creates disincentives for safety. Jack Dinsdale of the Transportation Communications Union agreed, telling the subcommittee that forcing people to resolve cases in company-controlled secret systems will “make passengers question whether they want to board the train.” It is “telling me right away you don’t have my safety as a concern.”

There is nothing survivors of Missouri’s crash can do about the liability cap. But Amtrak still has a choice whether to force Missouri survivors into arbitration. That Amtrak would try to save money on the backs of their own negligently-injured passengers, and who are already subject to a compensation cap, is an horrific prospect. Let’s hope they do what’s right.

We Found Something to Celebrate!

Many in the nation this holiday are trying to figure out how to celebrate in the wake of the U.S. Supreme Court’s unprecedented reign of destruction against laws and principles that were supposed to make us feel safe. Basic personal liberties and public protections – gone. Suddenly, many of us feel unsafe, unprotected, chaotic in ways that we didn’t feel just a month ago. Some are asking the question this July 4, “is the Court’s super-majority our the new six-headed King George III, turning the Court into a branch of government not just tyrannically ruling above the other two but essentially, demanding to become them?”

One case that particularly raises this question, was the recently-decided West Virginia vs. Environmental Protection Agency. The public protection implications of this case transcend the extreme (but hopefully not permanent) damage to our nation’s ability to fight climate change. More broadly, this case turns the Court into a mini-legislature, giving itself arbitrary power to void any agency regulation it dislikes, including complicated policy rules that it has no real clue about. And by “dislike,” we mean disliked by those who have its ear: industries that harm or kill people. After all, this is not just a far-right extremist Court. It’s also a corporate Court, run by “Chief Justice Roberts: America’s Chief Guardian of Corporate Power.”

This case fundamentally undermines the ability of the federal government to protect us from harm through the time-honored rule-making process. But it’s not like this development came out of the nowhere. We’ve been on this course since Ronald Reagan took office, when corporate lobbyists and their political allies started making tremendous strides weakening regulations and safety standards for prevention of harm to Americans. When George W. Bush occupied the White House, he attempted to use administrative agencies to wipe out the state common law legal rights of anyone hurt by the very dangerous products and practices that the agencies themselves failed to prevent.  

Luckily, Bush’s tricky scheme didn’t work. And that’s where we find one area of hope and optimism this Independence Day. The founders of this nation may have rejected much about English rule but they clearly valued one thing, which they brought over to begin our legal system: the common law. The common law is where tort law generally comes from. It continues to be maintained and preserved by state court judges and juries throughout the nation, who make decisions every day about who’s responsible for harm when someone’s been hurt. While agency regulations are designed to prevent harm, lawsuits allow justice and accountability after harm has occurred. In this way, they perform an important societal function: they act to deter misconduct not only by imposing financial liability on wrongdoers, but also by forcing disclosure of important internal information about products, drugs, toxics and unsafe practices and processes, and allowing dissemination of this information to the wider public. See plenty of examples here.

The common law possesses many qualities that, at least for now, are mostly beyond the Supreme Court’s reach (thank goodness). Common law is state law. As there is no such thing as federal common law, there are limits on how much mischief the Court can do to it. Common law is not codified in books, so it doesn’t lend itself to “textualism” abuse. Its whole point is to evolve as society changes.

Plus, it’s actually mentioned in the U.S. Constitution! The Seventh Amendment preserves the right to a civil jury trial in “suits at common law.” In fact, the right to civil jury trial was among our earliest rights as Americans. The American colonists believed that trial by jury was an important right of freedom and liberty.

That said, we are certainly not Pollyanna about this. Before the mid-1970s, the common law generally operated without much political interference, having evolved through the courts for generations - indeed centuries - to afford citizens a means to challenge injustice and negligence. But that changed after the 1970s when corporate America birthed the tort reform movement to prevent injured people from going to court, and to take power and authority away from juries. While that movement has made some inroads, its ultimate goal - replacing the common law with a statutory structure over which their political action committee money can have more control - has failed. The roots of civil juries and state common law run too deep in this country.

That doesn’t mean the Roberts Court hasn’t also tried, however. In fact, two huge problems have emerged in recent years, where the Court has at least indirectly interfered with state common law: federal preemption and forced arbitration. In a couple cases, the Court’s outcome-oriented interpretation of preemption has overridden legal rights provided by state common law. And the Roberts Court has done even more damage to individual rights by allowing companies engaged in misconduct to unilaterally block class action lawsuits by those they’ve harmed, and force victims to resolve cases in private, rigged arbitration. Only Congress can turn this trajectory around and until Congress gets better, we all know how unlikely that is. (Vote, people!)

But for the most part, broad congressional attempts to federalize state common law have failed, and they are doing so on a growing bi-partisan basis. They failed with products liability legislation in the 1990s, with medical malpractice legislation in the early 2000s and again in 2017, and with pandemic-related state liability shields in 2020.

So while the Court has been busy using an entirely made-up doctrine to tell agencies they can’t do their job when it comes to solving big problems through regulatory public protections, we are thankful state common law is still a strong protective force in America. This Independence Day, it’s worth thanking our founders – and England - for that.

Social Inflation Nonsense, or, What Happened to Victor Schwartz?

Clive Davis, the Victor Schwartz of the music biz. Photo by Christopherpeterson at English Wikipedia, CC BY 3.0

“Social inflation is the insurance industry’s relatively new term to justify price-gouging of policyholders. Using this catchy phrase allows insurers to deflect attention from their own greedy need for more money. They tell policyholders, “Oh, don’t look at us. It’s not our fault that we’re price-gouging you. It's social inflation. You know, lawyers and juries!” This time, they settled on a vague, undefined term that allows them to complain about (and blame) everything they don’t currently like about the civil justice system. #MeToo and child sexual abuse cases. Lawyer advertising. Verdicts in worsening truck crashes. Keeping track of and debunking these wildly-disconnected things is like playing “tort reform whack-a-mole.”

Usually blaming lawyers and juries works for them, even though this tricky industry hikes premiums for completely different reasons. But during past periods of similar price-gouging, lawmakers have responded by enacting legal obstacles for injured people to bring cases, or laws taking power away from juries. (For a 50-year history of how insurers have bamboozled public officials, see the Appendix in this study.)

However, one thing they didn’t anticipate in 2019: COVID. No sooner did they whip out their “social inflation” messaging, than COVID shut down the courts. Complaining about too many lawsuits and “out of control” juries while making a windfall from the pandemic made the insurance industry look ridiculous at best, venal at worst. They’ve struggled to be taken seriously. So, apparently needing help, they just dusted-off an old-timey “big gun” to speak for them, OG Victor Schwartz. The Clive Davis of the “tort reform” movement. And they got Victor to sign onto a data-starved naïve fantasy piece in the conservative Washington Examiner called “How to curb 'social inflation' in lawsuit damages.”

It’s safe to say that Victor Schwartz is someone we never agree with on civil justice issues (except those times when he slips up and truth slithers out). His association with the American Tort Reform Association, a much-diminished organization whose role, from what we can tell, “has been reduced to releasing tired, discredited messaging about judges and juries who rule against [its] corporate members when they kill and injure people,” or the American Legislative Exchange Council, famous for its link to the gun lobby, is pretty gross.

But we’ve never brushed him off as a careless amateur. He co-writes the law school casebook on torts. When he used to testify in Congress, he would generally recite his arguments without notes. (Evil genius comes to mind!) I say “used to” because it has been many years since this golden-ager has occupied a prominent public role in the “tort reform” movement. A decade ago, he admitted on camera to trying to push his inexperienced younger associates into the spotlight, as he was still the guy with the “name recognition.”

Despite the toll age may have taken, we genuinely wonder how he could have put his name on something so slipshod as this article? Who actually wrote this? It’s an online advocacy piece with no links to anything. I take that back - there are four links, all of which appear in the first three paragraphs and link to other Washington Examiner articles nearly unrelated to points being made. (Guessing some Washington Examiner intern said, “I know nothing about this topic but let me throw in some links.")

For example, one paragraph begins, “According to a recent study,” but no study is cited, and there is no link to anything. They say this “study” proves that large verdicts went way up between 2010 and 2019.

Um, actually, they didn’t. As we reported in our fully-cited study, as of the time of publication in 2019:

ALM’s Verdict Search data … show nearly three times the number of $1 million plus verdicts in 2010 (1542) as compared to 2019 (550), with a continuous drop each year. As for verdicts over $10 million, there were about half the number in 2019 (131) as there were in 2010 (256), also with a steady decline each year.  Whether looking at $5 million verdicts or $20 million verdicts, the same trends appear.

And that was before the pandemic!

Then Victor throws in a socio-political opinion about “a younger generation of jurors,” who, he says, is arbitrarily throwing money at people to “redistribute wealth.” Not a single fact, study, link, or even one single example is used to support this. In 2020, the insurance industry called the problem “millennials” recently coming on juries. Then we pointed out that millennials have been on juries since 1999. So they just changed their words, i.e., the vocabulary changed but the inane rhetoric did not.

Then comes the customary attack on the lawyers who represent sick and injured victims. These attacks change over time, but today it’s about a few firms that “advertise” about harm caused by dangerous drugs and products, and a few other firms that reach out to financing companies to help fund often extremely-expensive cases. Litigation finance firms typically allow someone suffering an injury the means to bring a case and not be forced into accepting low-ball offers from insurance companies simply because they can’t pay rent. Welp, here’s the good news. Empirical research shows that litigation finance firms actually screen out meritless cases. Even business attorneys have written that “linking litigation funding to social inflation exposes the specious nature of the social inflation theory itself.” So there’s that.

Then Victor starts complaining about “caps on damages.” Don’t get me wrong, he (or whoever wrote this) loves his caps, especially the ones the insurance industry manipulated many states around the nation into passing, claiming caps would bring down insurance rates. (They didn’t.) But they hate when state constitutions disallow caps. Caps have been struck down nine times (and not repassed) over the course of 50 years. But most recently, New Mexico’s high court upheld an extremely brutal state cap. These laws are not exactly falling by the wayside. The next case up? An Ohio case challenging a state cap, which has been used against a child repeatedly raped by her pastor. There’s a right and wrong side of that issue. I think most people know what that is.

The rest of the article consists of further attacks on judges and juries, making  jurors sound like blubbering idiots who don’t listen to evidence from both sides but are rather enchanted by bewitching plaintiffs lawyers, while calling judges “irresponsible” for allowing victims’ lawyers (never corporate or insurance lawyers) to “flood” jurors’ minds with “misleading information.” Not one example is given. What a dumb thing to argue.

When the pandemic hit, courthouses shut down. Jury trials stopped. People stopped driving for months. People drastically cut down on non-essential medical care, while at the same time most states passed laws immunizing hospitals and nursing homes from liability. (See more here.) No one believed that backlogged juries, non-existent victims and lawyers who couldn’t get their cases heard, were driving insurance rate hikes. Yet the industry never stopped talking about lawyers, juries and "social inflation." Pile onto that the fact that insurers, who had already put virus exclusions in many commercial policies, refused to pay virus-related business interruption claims and fought businesses in court. Insurers are winning those cases. As a result of all this, the property casualty insurance industry’s surplus is now more than an astonishing, record-breaking $1 trillion.

I don’t think even a legacy artist like Victor Schwartz can overcome a reality like that.

Repost from 2012: The Unbearable Lightness of Being ... Unaccountable

You know how much I love quoting Ronald Reagan.  (Kidding.) (No offense, Tea Party friends.)  Here’s a good one: “We must reject the idea that every time a law's broken, society is guilty rather than the lawbreaker. It is time to restore the American precept that each individual is accountable for his actions.”

I’m guessing he believed that cigarette smokers, as one example, fell into that “individual accountability” category.  But what if the law breakers are the people who are supposed to be enforcing the law?  Should they be accountable?  Which brings us to last night’s 60 Minutes, and a couple other hot topics. 

The show last night was about the exoneration of Michael Morton, wrongly convicted of murdering his wife in 1987.  He was freed after 25 years in prison based on DNA evidence, thanks to the hard work of the Innocence Project. 

But, reports 60 Minutes, Morton’s attorneys, “recently discovered something astonishing: sitting in his prosecutor's file all those years was evidence that could have established Morton's innocence during his trial.”  That evidence was a police report, relating how Morton’s then 3-year-old son, who witnessed the murder, described in detail the guy who really killed his mother, and it wasn’t Michael Morton.  The DA who apparently failed to turn the report over to Morton at the time, Ken Anderson, later “was named prosecutor of the year in Texas and since 2002 he's been a district judge in the same court where Michael Morton was convicted. All those years, Morton languished in prison.” 

Here’s some of the conversation between 60 Minutes correspondent Lara Logan and Barry Scheck of the Innocence Project, and Logan and Anderson’s lawyer, Eric Nichols:

Lara Logan: So just to be clear, from both of you, you believe that Ken Anderson, the prosecutor in Michael's case, willfully, deliberately withheld evidence.

Barry Scheck: We believe that there's probable cause to believe that he violated a court order, withheld exculpatory evidence, and violated other laws of the State of Texas.

In February, a Texas judge agreed with Michael Morton's legal team that there was probable cause to believe Ken Anderson violated the law, and Anderson is now the subject of a special criminal inquiry. That's extremely rare. Studies have shown prosecutors are hardly ever criminally charged or disciplined for serious error or misconduct. And one thing Ken Anderson doesn't have to worry about is being sued for damages by Michael Morton because the Supreme Court has ruled that prosecutors have "absolute immunity" from civil lawsuits for their legal work.

Lara Logan: Doctors, lawyers, policemen, there are all kinds of people who do their job with limited immunity or no immunity. It just seems hard to understand why prosecutors have to have a different standard to everybody else.

Eric Nichols: Seeing that justice is done, in many instances, requires very difficult judgments. And to come back behind those prosecutors and second guess them, or sue them would throw a wrench into that system of prosecutors seeking justice.

Lara Logan: I have to say, there's a certain irony in hearing you say it's the job of a prosecutor to seek justice, right? Because in this particular case, that's exactly what Michael Morton did not get. …

Michael Morton: I don't have a lotta things really driving me. But one of the things is, I don't want this to happen to anybody else. Revenge isn't the issue here. Revenge, I know, doesn't work. But accountability works. It's what balances out. It's the equilibrium. It's the social glue in a way. Because if you're not count-- accountable, then you can do anything.

Pay attention, corporate and medical lobbies pushing for laws to limit their liability for wrongdoing, so-called "tort reform."  He's talking about you.  As Logan notes, accountability doesn’t just mean criminal accountability but also, civil liability - something we touched on last week in our post about how the civil justice system can sometimes step in where the criminal justice fails.  That is, except if the destructive, corporate-backed, right-wing American Legislative Exchange Council (ALEC) (which we’ve covered many times, like here, here, here) has anything to do with it. 

Paul Krugman's column in today’s New York Times, called "Lobbyists Guns and Money," hits it out of the park with a great piece about how ALEC is responsible for the spread of Stand Your Ground laws (among many other horrendous laws), which many believe not only contributed to the killing of Trayvon Martin but also, the failure by police to arrest his killer.  Writes Krugman:

Florida’s now-infamous Stand Your Ground law, which lets you shoot someone you consider threatening without facing arrest, let alone prosecution, sounds crazy — and it is. And it’s tempting to dismiss this law as the work of ignorant yahoos. But similar laws have been pushed across the nation, not by ignorant yahoos but by big corporations.

Specifically, language virtually identical to Florida’s law is featured in a template supplied to legislators in other states by the American Legislative Exchange Council, a corporate-backed organization that has managed to keep a low profile even as it exerts vast influence (only recently, thanks to yeoman work by the Center for Media and Democracy, has a clear picture of ALEC’s activities emerged). And if there is any silver lining to Trayvon Martin’s killing, it is that it might finally place a spotlight on what ALEC is doing to our society — and our democracy. …

But where does the encouragement of vigilante (in)justice fit into this picture? In part it’s the same old story — the long-standing exploitation of public fears, especially those associated with racial tension, to promote a pro-corporate, pro-wealthy agenda. It’s neither an accident nor a surprise that the National Rifle Association and ALEC have been close allies all along.

There’s a lot more in Krugman’s piece about the corrupting influence of corporate money behind ALEC’s work.  So where does civil liability fit into this picture?  Well, forget prosecutor immunity laws.  These Stand Your Ground laws turn everyday people into prosecutor, judge, jury, and executioner, and then immunize them not just from criminal prosecution but also civil liability.  Just like dirty prosecutors in Texas are protected.  Just like the corporate members of ALEC are protected from civil liability when they commit wrongdoing, thanks to laws written and pushed by ALEC's civil justice task force, chaired by our friend Victor Schwartz, the General Counsel of the American Tort Reform Association.  Here’s Victor, below.  As they say, everything’s connected.

California Rights a Terrible Wrong

Patient advocates at the White House fighting MICRA's spread nationally, 2010

As the saying goes, “a lie can travel halfway around the world while the truth is still putting on its shoes.” Well, when it comes to California’s 1975 brutal law that severely caps (at $250,000) non-economic damages for injured patients – even catastrophically-injured children – the shoes are finally on. At least in part.

Reports indicate that California’s medical industry has finally realized that the falsehoods and nonsense used to justify opposing even an small inflationary increase to this cap after nearly 50 years, weren’t working anymore. Between a threatened ballot initiative to raise the cap and more, a very smart organizing and media campaign, and some skillful lobbying by advocates, they finally gave in, agreeing to an inflationary adjustment.

Yet this law should never have come to be in the first place.

In 1974, a bunch of insurance companies in California suddenly and drastically raised medical malpractice premiums on doctors with no data to support what they were doing. During this period, J. Robert Hunter, at the time the nation’s Federal Insurance Administrator, started examining whether this premium increase was caused by some huge jump in medical malpractice claims. Working with the National Association of Insurance Commissioners (NAIC), they found that there was no jump in claims and no justification for insurers to drastically raise rates. The fault lied entirely with an out-of-control and largely unregulated insurance industry. (Learn more here.)

President Ford (and later President Carter) resisted efforts to consider a national "tort reform" bill based on this research. However, the truth didn’t stop insurance and medical lobbyists. They zeroed-in on state lawmakers, spouting their false narrative, saying, “Don’t look at us for these astronomical rate hikes– blame the lawyers, lawsuits and juries!” With this rhetoric in hand, they used their economic clout to force many states to weaken civil liability laws. And it was all done with very little scrutiny by policyholders, lawmakers, the media or the public at large.

Perhaps most famously was California’s $250,000 cap law, the Medical Injury Compensation Reform Act, or MICRA. This cap has not increased one cent from the original $250,000 limit, despite inflation that has far more than quadrupled costs (“Had the cap had been annually adjusted for inflation, it would now be $1.3 million.”) Those hurt most by this law are children, stay-at-home parents, the elderly and poor, i.e., those whose economic damages tend to be less despite the fact that they have suffered grievous injury.

Governor Jerry Brown signed the MICRA bill in 1975, and then, realizing it was a mistake, repudiated it in a public written statement in 1993. But he cowardly failed to act to change the law when he became Governor again in 2011. Tragically MICRA kept harming the most seriously injured and needy children and adults who suffer from negligent (or worse) physicians and hospitals. And it has allowed the medical establishment to try to spread this cruel law to other states and even – unsuccessfully, thank goodness - to the entire nation in federal legislation.

MICRA has had terrible consequences for many innocent people, while doing nothing to improve the affordability of liability insurance for doctors. This new deal will raise the cap to $350,000, which would gradually increase over a 10-year period to $750,000 (more for death cases). Moreover, if both a doctor and hospital are found responsible, both can be liable for these damages, which is something not allowed under MICRA. It is a very big step to righting a horrible injustice. Kudos to all involved.

Tip-Toeing Into the Light

If you’re a fan of “The Office,” you may remember the story line of Michael dating Pam’s mom. And in particular, the scene where Michael first tells Pam about it. Michael softly whispers “It’s OK, it’s OK” while Pam gradually starts screaming her head off.

“It’s ok, it’s ok,” is something we’ve probably all whispered to someone, somewhere, at some point in our life. Today, I’m going to gently whisper this to two unlikely groups: the American Medical Association (AMA) and the “tort reform” crowd in Congress. They’ve both recently tip-toed over to the light from the civil justice dark side, and I’m here to tell them “It’s ok, it’s ok. Everything’s gonna be alright!”

First, the AMA. The other day, the AMA publicly admitted that the insurance industry’s predictable economic cycle is to blame for the recent round of medical malpractice insurance premium hikes for doctors. They said, “The medical liability insurance cycle is in a period of increasing premiums.” (See why that’s true here.)

The fact that they didn’t go on an unsubstantiated screaming rant about juries, lawyers, lawsuits, or claims stands in stark contrast to the AMA’s response to prior periods of rate hikes (and there have been three since the 1970s). Every other time, the AMA responded with a huge PR and lobbying campaign blaming the legal system for doctors’ insurance problems and pressuring for new “tort reform” laws as the “solution.” (See more here.) But they can’t do that now. I mean, I guess they could try, but they’d be laughed out of the room. Some states suffering through rate hikes still have pandemic liability shields in place, which immunize health care workers from liability. Jury trials ground to a halt during the pandemic and are still severely backlogged. And half the states with the highest med mal insurance rates limit compensation for injured patients (illustrating the true ineffectiveness of “caps” as solutions to this insurance-created problem.) So for a change, they’re trying honesty.

To the AMA, we say, it’s ok, it’s ok, it feels good to be honest about this, right? No more screaming rants. Help your doctors with real insurance-based solutions to their cyclical insurance problems. It's the only thing that works. Drop us a line. We have thoughts.

Second, hello Congress’ “tort reform” crowd! As we recently wrote a few weeks ago, a strongly bi-partisan anti-forced arbitration bill just passed the U.S. House by a vote of 335 to 97, and then passed the Senate unanimously. Now signed into law, this bill bans the use of forced arbitration clauses in cases involving sexual harassment and sexual assault. Congress’ landslide vote on this wasn’t just a “tip-toe” into the light, but rather a major jump. They were actually forced to admit that forced arbitration is not good for people.

It seems ridiculous for anyone to argue now, with a straight face, that forced arbitration clauses are good for people, in fact so great that for their own good, the public must be forced to agree to them. Nearly the entire Congress rejected that here. Obviously these clauses are as bad for sexual harassment and assault victims as they are for defrauded servicemembers, neglected nursing home residents, small businesses being squeezed by a conglomerate, low-wage essential workers being ripped off during a pandemic. Forced arbitration clauses have proliferated in all of these areas and should be outlawed.

So to all you “tort reformers” in Congress, it’s ok, it’s ok, stay honest about this. No more screaming rants about juries, lawyers, lawsuits, or claims. Remain over here with us, in the light, and with those who care about workers and consumers. Because it’s all coming up again, real fast. The House votes today on H.R. 963, the Forced Arbitration Injustice Repeal (FAIR) Act, which would ensure that all workers, consumers, servicemembers, nursing home residents, ordinary investors, and small businesses harmed by bad actors can bring valid claims in court.

Stay in the light and do the right thing. And if you’re still struggling with this, drop us a line. We have thoughts.

Forced Arbitration Is About to Shift Shape

I’m no historian but the amount of lying going on these days by those desperate to hang onto power seems unprecedented. Take the issue of forced arbitration clauses.

“What are forced arbitration clauses?” you may ask. Those are the ever-present clauses that corporations bury in fine print legalese “agreements” (that no one reads) when you get a phone or something online or even a job. Here's what they mean: if the company cheats, defrauds, discriminates against, harasses, physically injuries or otherwise harms you, you cannot sue the company in court or have a trial. Instead, you are forced to deal with the company in a private, secretive, rigged arbitration system controlled by the company. You may have to pay for the arbitrator. You can’t talk about what happened. And there is no right to appeal.

While the U.S. Supreme Court decision narrowly OK'ing these atrocious clauses in 2011 had a number of disturbing results, one of the weirdest was the shape-shifting of corporations into consumer and worker rights advocates! (Whatever demonic potion they've been drinking, keep it away from us.) More specifically, since that 2011 SCOTUS decision, corporate lawyers have stuck these clauses in everything because, they say they want to help you! You, the consumer! You, the worker! Not only are forced arbitration clauses good for you, they say, they’re so great that for your own good, you must be forced to agree to them! And if you don’t, no product, service, job or soup for you! (FYI we used to get our soup there and it’s all true.)

Well of course, nothing about any of this is good for you (except the soup – try the Mulligatawny). When we push back (see e.g., here, here, here), they say not only are we wrong, but we’re too stupid to know we’re wrong. But of course, we are not stupid and they are lying. And now Congress seems poised to help expose this lie for the first time in a very long while.

On Monday, an extraordinary thing happened in the U.S. House  of Representatives. A strongly bi-partisan bill, titled The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, passed the U.S. House by a vote of 335 to 97. When finally passed by the Senate and signed into law, this bill will ban the use of forced arbitration clauses in cases involving sexual harassment and sexual assault. This will be the first major, permanent crack in the “forced arbitration” wall erected by SCOTUS more than a decade ago.

Because passage of this bill will help expose the lie from those corporate shape-shifters, its importance cannot be overstated – for survivors, for workplaces everywhere, for all of us. And it’s worth remembering that these clauses are as bad for sexual harassment and assault victims as they are for you the defrauded bank customer, you the neglected nursing home resident, you the small business being squeezed by some conglomerate, you the low-wage essential worker being ripped off during a pandemic. Forced arbitration clauses have proliferated in all of these areas and should be outlawed. But one very important step at a time.

Please tell your Senator to support this bill.  And if you need a little more convincing, please watch this video. #EndForcedArbitration!

#EndForcedArbitration from American Association for Justice on Vimeo.

It’s Med Mal Quiz Time Again!

Hey kids, it’s our favorite time of year – PopTort Pop Quiz time! Our first of 2022 on the important topic of medical malpractice and health care. I just know you've all been studying very hard. So let’s go!

1. What percentage of injured patients who win their cases actually receive what a jury awards them:

1. 100%
2. 70%
3. 50%
4. Less than 30 percent

The answer is "d." According to new research from 6 top medical malpractice researchers, 74 percent of patients receive less than what a jury awards “whether the wrongdoer is a physician, hospital or nursing home.” They say that there is a “large gap” between what juries award and what insurers actually pay, which is far less. Industry campaigns focused on jury verdicts are “disingenuous, based on an incomplete and potentially misleading factual foundation.”

2. The chance of a physician having to personally cover the difference between a large jury award and their smaller medical malpractice insurance policy limit is:

1. 100%
2. 50%
3. 25%
4. Less than 1%

The answer is once again “d.” According to the same new research from 6 top medical malpractice researchers, “in only 0.6 percent of cases did physicians make any out-of-pocket payments, and most of these were relatively small. Essentially, physicians’ policy limits are a hard cap on recovery.

3. A new physician survey finds that roughly 1 in 5 are considering leaving their current jobs to pursue a nonclinical career. The top reason given by physicians was:

1. Risk of being sued
2. General burnout
3. Need to reduce hours
4. The pandemic

The answer is “b" for burnout! According to the survey, risk of being sued is not a factor. And “only 7% put the blame for leaving clinical practice squarely on the pandemic.” However,“Burnout was most often cited as the primary reason for considering a change; 34% gave this reason. Twenty percent said they wanted to work fewer hours.” The risk of being sued is not a factor.

4. True or False: Most doctors who have been sued believe the outcome of the lawsuit was fair.

That would be “True.” According to a new Medscape survey, “A majority — 61 percent — of doctors who were sued “believed the outcome of their lawsuit was fair.” Moreover, “More than half of physicians who were sued reported that there were no attitude or career changes after the experience, which is consistent with results of prior surveys.”

5. When asked if they’d been sued for COVID-related negligence, what percentage of doctors surveyed in 2021 answered "yes, they had been sued":

1. 100 percent
2. 50 percent
3. 10 percent
4. 0 percent

The answer is “d.” When asked whether they’d been sued for a COVID-related allegation, 100 percent of respondents said no.  That's the "wave" of lawsuits some insisted was coming.

6. Surplus - the extra money medical malpractice insurers set aside over and above what they keep for expected losses - did what during pandemic:

1. Dropped
2. Stayed the same
3. Increased

The answer is “c.” According to the October 2021 issue of Medical Liability Monitor, thanks to a stock market windfall, the industry saw “a surplus increase of almost 3% in 2020, bringing total surplus to the MPL sector to more than $33 billion.” Astounding.

Bonus Question:

True or False: More than 140,000 nursing home residents have died from COVID-19.

Sadly, this is "True." According to the most recent government data, as of the week ending December 26, 2021, more than 754,500 nursing home residents had contracted COVID-19 and over 142,300 residents had died from COVID-19

Of course, all of this information and much more can be found in the Center for Justice & Democracy at New York Law School’s new briefing book, Medical Malpractice – By the Numbers!  Study up.  You never know when quiz time will pop up again!