ThePopTort

Liability, “Tort Reform,” and the National Rifle Association

In 2005, after intense lobbying by the National Rifle Association, Congress passed the Protection of Lawful Commerce in Arms Act (PLCAA), which President George W. Bush happily signed into law. This law provides gun manufacturers, dealers, distributors and trade associations with immunity from lawsuits brought by gun violence victims, cities and counties. It is “legal immunity that no other industry—pharmaceuticals, cars, even tobacco—enjoys.”

The NRA has also pursued a state-focused “tort reform” agenda through ALEC, the American Legislative Exchange Council.  Florida’s Stand Your Ground “shoot first” law was the statute at the heart of the controversy over George Zimmerman’s killing of Trayvon Martin in 2012.  It now exists in almost half the states.  Buried in the statute is a provision that confers absolute civil immunity on perpetrators who successfully avoid arrest and prosecution under this law, stripping crime victims of their legal rights and access to the courts.  It was written by the NRA.  

In addition to “Stand Your Ground” laws, the NRA has lately had success with enactment of its so-called “Business Liability Protection Act."  The law – which allows employees to keep firearms locked in their cars while parked on their employers’ property – also provides employers with civil immunity if they’re sued because of the weapon. 

Yet the NRA regularly sues in civil court. Examples abound. Check out some of these headlines: “NRA, Olympic Shooter Sue California Over Its Restrictions on Ammunition Sales” “NRA files federal lawsuit challenging Florida gun-safety bill” “NRA backs lawsuit claiming NJ handgun policy is ‘unconstitutional’” “NRA threatens lawsuit after US Virgin Islands governor orders weapons seizure” “NRA files lawsuit over ban on assault weapons in Mass.” On May 4, 2018, the NRA sued an insurance broker, “alleging the firm breached its contract to administer an insurance program for the firearms advocacy group.” As reported by the Wall Street Journal, “The NRA said its lawsuit aims to recover damages and ‘to bring to light the mechanics and consequences of an ongoing, unconstitutional blacklisting campaign being pursued by regulatory authorities in New York.’”

This in intolerable hypocrisy. And no one likes a hypocrite.

Some victims and plaintiffs’ lawyers have had enough, taking matters into their own hands by trying innovative ways around PLCAA. Just a few days ago, when the Gilroy food festival mass shooting was the massacre “du jour” before El Paso, Dayton and the inevitable next one(s), Slate explained,  

Plaintiffs’ lawyers with no prior experience suing the gun industry have been mobilized by mass shootings in their communities—last weekend’s in Gilroy, California, being just the latest—and are thinking up new kinds of claims. In looking at PLCAA afresh, they see not a blanket ban but one that makes key exceptions for egregious conduct. A few courts have been receptive to these tactics so far, sparking new hope that it is possible to hold the gun industry accountable. …

In March, the Connecticut Supreme Court shocked the legal world by ruling in favor of the families of children killed in the Newtown shooting. These families focused in part on Remington’s advertising of the AR-15 used in the massacre—ads that extolled its military style and suitability for combat, brandishing the slogan, “Forces of opposition, bow down.” In knowingly marketing the weapon to civilians for use in military-style combat, the plaintiffs argued, Remington violated Connecticut’s law against unfair trade practices.

Josh Koskoff, lead lawyer for the Newtown families, had never heard of PLCAA until he started researching this case. “I can see why people look at it and just give up,” Koskoff says. “We almost did. It’s like looking at Mount Everest and you’re wearing sandals and you’re supposed to climb.” But he thinks that his lack of experience suing the gun industry—his expertise is medical malpractice—was helpful insofar as it allowed him to approach the law without assumptions. “We were able to look at it with a wider view. I think that was a real advantage to our ability to see causes of action that maybe others couldn’t see or felt would be too much of a burden to overcome.”

Koskoff’s decision to use Connecticut’s consumer protection law paid off in two ways. First, the state Supreme Court held that the Newtown families’ claims were exempt from PLCAA because they fell under the law’s “predicate exception,” which permits lawsuits where a manufacturer or seller of a firearm used in a subsequent crime “knowingly violated a State or Federal statute applicable to the sale or marketing” of that firearm. Second, the court found that regulation of “advertising that threatens the public’s health, safety, and morals” was such a core state power that even PLCAA’s most ardent congressional supporters did not intend to take it away. Remington has indicated that it plans to petition the U.S. Supreme Court, but its lawyer, James Vogts, declined to comment on pending litigation.

Clearly, the hypocritically-contemptable gun industry needs some accountability for the mass killing of children. It shouldn’t be this hard. 

Summer Mood – Never Give In

We thought we’d do something a little different today. We know many folks are feeling sick to their stomachs seeing crowds cheering (and even one-upping) a U.S. President who spews racial and xenophobic ugliness and hate. And it will no doubt continue. One (just one) GOP Congressman said such fascist-sounding chants "would send chills down the spines of our Founding Fathers." No argument there.

Also no argument that these same Founding Fathers would be furious at the many “under the radar” moves by this government to systemically undermine the Constitution’s Seventh Amendment – the right to civil jury trial. Today, for example, the Trump administration finalized a rule allowing nursing homes to force abused and neglected residents into secret, rigged arbitration to resolve disputes, reversing Obama’s earlier pro-senior rule. This is just one of hundreds of public protections that this administration has eviscerated. It’s enough to make you want to go to sleep until January 2021.

For anyone who’s feeling that kind of way, especially anyone concerned that they might be witnessing the rise of Nazi-like facsim here in America, I thought I’d reproduce part of a speech that Winston Churchill gave in October 1941. Imagine what he was facing at that time, his country brutally battered and, many believed, on its way to defeat. He said this to students at his alma mater, Harrow School:

You cannot tell from appearances how things will go. Sometimes imagination makes things out far worse than they are; yet without imagination not much can be done. Those people who are imaginative see many more dangers than perhaps exist; certainly many more than will happen; but then they must also pray to be given that extra courage to carry this far-reaching imagination.

But for everyone, surely, what we have gone through in this period - I am addressing myself to the School - surely from this period of ten months this is the lesson: never give in, never give in, never, never, never, never - in nothing, great or small, large or petty - never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy.

We stood all alone a year ago, and to many countries it seemed that our account was closed, we were finished. All this tradition of ours, our songs, our School history, this part of the history of this country, were gone and finished and liquidated.

Very different is the mood today. Britain, other nations thought, had drawn a sponge across her slate. But instead our country stood in the gap. There was no flinching and no thought of giving in; and by what seemed almost a miracle to those outside these Islands, though we ourselves never doubted it, we now find ourselves in a position where I say that we can be sure that we have only to persevere to conquer.

Here are a few more pearls of wisdom:

“The only limit to our realization of tomorrow will be our doubts of today.” –Franklin D. Roosevelt (April 13, 1945)

“[W]e may encounter many defeats, but we must not be defeated. It may even be necessary to encounter the defeat, so that we can know who we are. So that we can see, oh, that happened, and I rose.” – Maya Angelou  

“Don’t let yesterday take up too much of today.” – Will Rogers

Tomorrow’s another day, folks.  And remember, there are more of us.

Newsflash: Victim Compensation Funds Back in the News

As we write this blog today, the U.S. House of Representative is about to vote to renew (permanently) the 9/11 victim compensation fund to cover the poisoned Ground Zero first responders who are now sick and dying at a tragically rapid pace. I don’t think we need to remind folks about how Jon Stewart has for years been shaming Congress (more accurately, now the Senate and Mitch McConnell) into funding this, or the incredibly sad loss of Luis Alvarez who sat beside Stewart at House hearings last month. But I do think it’s important to remind everyone about the pros and cons of funds like this. There is no “con” to the 9/11 fund because realistically, there has never been a wrongdoer to sue and hold accountable in court. But of course, that’s not always the case. 

Sometimes unusual national events like 9/11 lead to these kinds of funds. But over the years, funds have also been established as a result of pressure from corporations or institutions involved in colossal misconduct. The BP oil spill. The GM ignition switch scandal. The problem is not only the limited amount of fund money that is often available to victims, but also the fact that disputes are resolved in administrative systems rather than by a court. The right to trial by jury is eliminated. That means facts about misconduct are typically kept secret and accountability for wrongdoing is gone or severely weakened.

Just this week, two other victim compensation funds have made news that illustrate these points. First is one concerning sexual abuse in the Catholic Church. The Wall Street Journal just ran a story about a similar fund set up by the Church in Pennsylvania and elsewhere. Notably, unlike neighboring New York and New Jersey, Pennsylvania has yet to lift the statute of limitations for suits involving the sexual abuse of children. It is unclear when—or if—that will happen.

Meanwhile, the church set up a compensation fund for victims of clergy sexual abuse. Writes the WSJ, “In exchange for accepting money from the program, the diocese won’t have to release any documents that might show what church officials knew about the alleged abuse. [Victims] also would be barred from suing the church [even if their rights are later restored by statute].

Payouts pale compared with what victims have won in court. Those who accept settlements must agree not to sue the church in the future.…

Eric Deabill, a spokesman for the Diocese of Scranton, said helping survivors of abuse was the priority. “Across the country, dioceses facing abuse litigation have been forced into bankruptcy,” he said. “This program balances the sincere desire to promote healing for sex abuse survivors while enabling the core mission of the Diocese to continue.”

But for some, the money isn’t enough, raising the prospect that the crisis could drag on for years. Many alleged victims want access to church records about their alleged abusers. Taking a case to court is a chance to make public any evidence that church officials hid the abuse.

Time is running short for [abuse survivor] Mr. Pliska, 55 years old, to decide. The church has set a July 31 deadline. “The church shouldn’t be the judge,” he said of the program. “They should be held accountable.”

Also this week is news that the California Legislature passed a bill to “set up a fund to help compensate victims for losses from fires started by the utilities’ equipment,” as compensation to victims is threatened by the bankruptcy of Pacific Gas & Electric, the utility responsible for recent devastating fires.

PG&E has estimated that its liability from recent fires exceeds $30 billion. Investigators found that its equipment was responsible last year for the worst wildfire in state history, the Camp Fire, which killed 85 people and destroyed the town of Paradise. Under California legal doctrine, utilities are liable for fire damage caused by their equipment, even if no negligence is involved.…

The legislation is aimed at improving the financial health of the big investor-owned utilities — which include Southern California Edison and San Diego Gas & Electric — and preventing further bankruptcies as climate change makes fires more frequent and destructive. The state is concerned that without its intervention, investors and creditors will shun the companies, potentially starving them of financing.…

Advocates for wildfire victims praised the legislation, Assembly Bill 1054.

“With fire season fast approaching, and so many existing victims still struggling, putting A.B. 1054’s protections into practice quickly is going to make a tremendous difference,” said Patrick McCallum, a leader of the advocacy group Up From the Ashes, who lost his home in a 2017 fire that ravaged Northern California’s wine region. “It’s our best hope going forward.”

Yes, in this case it might be their best hope going forward. It is just good to keep in mind that sometimes these funds end up being manipulated by political forces and can become a nightmare for those they were originally meant to help. Just ask Jon Stewart.

Equal Pay Means Ending Forced Arbitration

When Lilly Ledbetter discovered she had been paid significantly less than her male counterparts for the very same work at Goodyear’s Gadsen, Alabama plant, she filed a lawsuit and was awarded more than $3 million by a jury. After the U.S. Supreme Court overturned the decision, ruling that Ledbetter had waited too long to file her case, Congress passed the Lilly Ledbetter Fair Pay Act, the first bill President Obama signed into law. This law supplemented other important federal laws passed by Congress to remedy pay discrimination, namely the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964.

Yet today, the gender pay gap persists. Indeed, what could be more clear than the absurd situation that the victorious women’s soccer team finds itself, forcing them to file a lawsuit against the U.S. Soccer Federation. Specifically,

As of Sunday, the U.S. women's team has won four World Cups — more than any women's soccer team in the world. The men's team has won none. But according to the lawsuit from the women's team, male players stand to make nearly three times as much per game as women.  There's also a major pay gap in the prize money awarded by FIFA, the global soccer federation that oversees the tournament. The prize pot for the women's team this year was $30 million — compared to $400 million for last year's Men's World Cup. 

With their record-breaking World Cup performance, which attracted a viewing audience of 1 billion people (along with crowds chanting “Equal pay! Equal pay!”), this should not be happening. Just, fuggedaboutit!

But then consider the U.S. labor market generally:

… women’s median weekly earnings in 2018 were 81.1 cents for every dollar earned by a man. (The gap is bigger for women of color: Compared with white men’s median weekly earnings in 2018, Hispanic women earned just 61.6 percent and black women earned just 65.3 percent.) And it’s getting worse. According to data analysis from the Institute for Women’s Policy Research, the gender wage gap actually widened last year. And some researchers believe the wage gap could be much bigger than what’s reported now.

The women's soccer team and U.S. Soccer tentatively agreed in June to mediate the lawsuit once the World Cup was over, and we will see how far they get. But for the everyday female worker these days, things are substantially tougher. Once reason, for sure, is that the rights secured by those 1960s-era early civil rights laws are in jeopardy as a result of forced arbitration clauses and class action bans, found in most employment contracts. A whopping 56.2 percent of nonunion private-sector workers are now subject to these clauses and by 2024, it is estimated that more than 80 percent of the private-sector nonunion workforce will be bound by them. These clauses make private litigation against violators virtually impossible. They allow corporations and businesses to break the law and operate with impunity. 

In the New York Times article covering the World Cup win, reporter Andrew Keh wrote,

Few sports teams are asked to carry so much meaning on their shoulders, to represent so many things to so many people, as the United States women’s soccer team. Few athletes are expected to lead on so many fronts at once, to be leaders for equal pay and gay rights and social justice, to serve as the face of both corporations and their customers. Fewer still have ever been so equipped to handle such a burden, so aware of themselves, so comfortable in their own skin, as those American women.

I know it’s a lot to ask, but … after they succeed in the mediation room and force USSF to pay them what they deserve, may we politely ask one more thing of this amazing team: join the fight to end forced arbitration clauses and class action bans, so female workers at every level have a fighting chance at equality and justice. #EndForcedArbitration

Juries: The Pendulum Swings Back

It wasn’t too long ago – 2 and a half years to be exact - that we analogized what seemed to be growing disrespect for civil jurors, to a Rodney Dangerfield routine.  (“People who serve on civil juries can’t get no respect from anyone this week,” we exclaimed.) But lately it’s been a bit of a different story.

On June 14, the Kansas Supreme Court did something both extraordinary and something it should have done a long time ago: provide real meaning to Section 5 of the Kansas Bill of Rights, which states, “The right of trial by jury shall be inviolate.” 

You see, back in the 1980s, Kansas politicians took a direct swipe at Section 5 by severely and broadly capping non-economic damages for injury victims. Non-economic damages are for very real injuries, such as brain damage, loss of limb, loss of reproductive ability, blindness, and other kinds of suffering and lost quality of life. Caps on compensation apply regardless of what jurors, who make decisions based on evidence they hear in a case, say compensation should be.

And in 2012, the Kansas Supreme Court decided Section 5's authors didn’t really mean “inviolate.” Instead, it “transform[ed] what the people made inviolate into something violable at will” and upheld the cap even though it directly infringed on the power and authority of juries to decide cases. This decision made no sense to many – and now, it appears, it also made no sense to the 2019 Kansas Supreme Court. So joining perhaps another unexpected court decision striking down Oklahoma’s equally-problematic cap in April, the Kansas court struck down the Kansas cap in June. 

As a result of these two 2019 decisions, less than half the states (24) now cap non-economic damages in medical malpractice cases. And only nine cap non-economic damages generally. The momentum is definitely in the “no-cap” direction. 

We’re so glad that judges are weighing-in on the correct side of this issue. It should be known that judges, who have more intimate knowledge of the system than anyone, generally have a high level of day-to-day confidence in civil juries. This year, the National Judicial College asked judges “About how often do you disagree with the jury’s verdict?” Among the findings from the just released survey:

Eighty-two percent of the 446 judges who responded said they disagree less than 25 percent of the time. The majority who left comments said the jury usually gets it right, and it is not a judge’s job to second guess their decision.”

Wrote one judge (anonymously, as was most often the case with the comments): “When you hear the voice of a dozen people speak in unison, it is rare that they get it wrong.”

Juries rule, as they say. And as they should.

Oh Yeah, it's PopTort Quiz Time Again!

OK kids, outta the pool now! Summer school is here, and that means it’s PopTort PopQuiz time! Thanks to the Center for Justice & Democracy's new updated medical malpractice briefing book, we have all kinds of new info about what’s going on in the world of medical malpractice litigation, patient safety, and more. And it comes just in time for the new Oxygen TV series on med mal, called "License to Kill." Yikes! So let's get going!

1. Between 2007-2016, the number (frequency) of medical malpractice cases:

1. Increased 70%
2. Increased 25%
3. Stayed flat
4. Decreased more than 25%

The answer is “d.” According to CRICO, during those 10 years, case frequency dropped 27%, “with an especially compelling trend for obstetricians-gynecologists.” Specifically,  “For ob/gyns (whose rate is historically higher than the average for all MDs), the risk of having an MPL case filed against them dropped 44% from 2007–2016.”  What’s more, the average payment grew at a rate that is below medical inflation,

2. What percentage of doctors with at least five medical malpractice claims are still in practice?

1. 5%
2. 25%
3. 50%
4. 90%

That would be “d.” Researchers who examined data on paid claims between 2003-2015 found not only that 90% are still practicing, but that the “overwhelming majority of doctors who had five or more paid claims…moved to solo practice and small groups more often, where there’s even less oversight, so those problematic doctors may produce even worse outcomes.” 

3. True or false: There is no “quality of care” information available for about 50% of doctors treating Medicare patients.

False, although it’s kind of a trick questions. The actual number of 75%. Researchers trying to find data on 1 million U.S. doctors made available online by the U.S. Centers for Medicare and Medicaid Services found, “Three quarters of clinicians have no information about their quality of care.” Moreover, “99 percent of those in the online system have no data tied to their individual job performance, “making it hard for patients to know who might be a better or worse choice among several physicians at one clinic.”

4. On a similar note, true or false: data about maternal deaths or severe childbirth complications at hospitals are readily available to patients.

False. As USA Today found, “Even though pregnancy and childbirth is the No. 2 reason for hospitalization in this country, the federal government doesn’t require hospitals to tell the public how often mothers die or suffer from childbirth complications…  USA TODAY’s investigation for the first time published rates of severe childbirth complications at hundreds of hospitals.  It’s a number that many hospitals and experts use privately – but don’t think should be shared publicly.”

5. After Texas enacted severe “tort reform” measures in 2003 (in fact asking residents to change their own state constitution to do so), threatening that without these Draconian laws doctors would leave the state, access to medical care grew:

1. 75%
2. 50%
3. 25%
4. Zero

Yup, the answer is “d.”  Researchers found, “HB 4 [the “tort reforms” laws enacted in Texas in 2003] had no measurable effect on the size of Texas’ physician population. The impact of HB 4 on Texans’ access to medical treatments is best described as both close to zero, and precisely estimated.” 

6. True or false.  When a state caps damages, rates for cardiac stress tests and other imaging tests, Medicare Part B lab and radiology spending, all rise.

That is true. Researchers say, “[A] core message from our findings is that, writ large, the ‘adopt damage caps, reduce spending’ story lacks empirical support. “

8. During surgery, which of these random factors can lead to serious errors:

1. A negative thought passing through the surgeon’s mind
2. A loud noise in the operating room
3. Both things
4. Neither thing

The answer is “c”.  According to researchers, either of these random things makes surgeons “prone to make mistakes that can cause bleeding, torn tissue, or burns.”

9. When it comes to preventing deaths from medical errors, out of 195 countries in the world, the U.S. ranks:

1. At the top
2. In the top 10
3. In the top 50
4. Below the top 50

You guessed it. The answer is “d.” The United States, the health care of which is supposedly the "envy of the world," isn't even in the top 50. More specifically, “After analyzing how well the United States fared at preventing deaths from medical errors, Global health researchers gave the U.S. a 70 out of 100. More than 55 countries exceeded that score.”

Ok that enough depressing information for the day. Back in the pool kids!

Whistleblowers Round Out the Week

It’s been awhile since we last covered the ancient practice of whistleblowing. (Ok maybe not ancient but it’s at least Ben Franklin-old.)

Some whistleblowing stories this week were very newsy, like the one involving Chelsea Manning and (according to the government), her Wikileaks co-conspirator Julian Assange. You may have heard that Assange was indicted this week for obtaining and publishing military documents in 2010. We’ll be transfixed to see how the courts handle the First Amendment conflicts on that one.  

For those who may pay no attention to the news but still watch network TV, there’s the return of The Whistleblowers series on CBS, about “people who put everything on the line to stop illegal and often dangerous wrongdoing when major corporations or individuals rip off the government and U.S. taxpayers.”

From the CBS announcement: “Additional cases that will be examined this season include a medical system where midwives are in charge of high-risk pregnancies; kickbacks at a crematorium; a scam allegedly involving counterfeit healthcare hardware being used in back surgery, which may have defrauded Medicare; and, for the first time on national television, two whistleblowers discuss how they brought suspicions of massive fraud by members of a polygamous cult to the FBI.”

Alarming stuff, right? Oh, you haven’t heard anything. Check out the rest of this week’s news, like the CBS story on FAA whistleblowers. The network spoke to “roughly a dozen FAA inspectors from across the country. Some risked their jobs to blow the whistle on how they say they are told to overlook important problems.” 

They say managers at the FAA pressure inspectors like them to ignore critical safety issues like corrosion or making sure vendors were FAA compliant and retaliated if inspectors refused to back off.

"I've been flat out told to back off," one inspector said. "I've had airlines contact my management and ask them not to assign me any inspections to that airline."

The other inspector said they've "repeatedly" been punished for finding a problem and reporting it and they're not alone: "It's very widespread."…

One of the inspectors said, "We're on the verge of an issue happening …. we're talking about a crash inside the United States borders."

They both pointed to incidents like the Lion Air and Ethiopian Airlines crashes – both related to U.S. manufacturer Boeing whose own relationship with the FAA is under scrutiny as indicators of what could happen. They hope that what they told CBS News will be a wake-up call.

And if that’s not enough to make your blood boil, consider this story about the abuse and neglect of children in facilities run by US Immigration and Customs Enforcement (ICE). As reported by CNN,

For years, [Dr. Scott Allen’s and Dr. Pamela McPherson’s] expert opinions, like the facilities they inspected, remained out of the spotlight -- unseen by most lawmakers and unheard by members of the public.

That changed, they say, when the Trump administration's policies left them no choice. The doctors became whistleblowers, speaking out with a dire warning. Family detention isn't safe, they said, and children's lives are at stake.

"We are writing to you, members of Congress with oversight responsibility, because we have a duty to raise our concerns about the ongoing and future threat of harm to children posed by the current and proposed expansion of the family detention program," the doctors said in a letter to the leaders of the Senate Whistleblower Protection Caucus.…

That letter was sent nearly a year ago.

For the doctors, “what started with one letter to Congress has become a quest with no end in sight.” Yet this story isn’t the only whistleblowing story about ICE abuse, or even the only one this week. As The Intercept also reported, 

Ellen Gallagher was stunned when she first learned that immigrants detained by Immigration and Customs Enforcement were sometimes placed in isolation with no human contact for 22 hours a day. …

“I could not believe that so many people who were listed as suffering with serious mental illness, for example, were being assigned extended periods in solitary confinement,” said Gallagher, who worked as an advocate for mentally disabled school children in New York before joining the federal government in 1995. …

Gallagher, whose first job in the federal government was as a lawyer working to deport immigrants, embarked on a yearslong process to raise the alarm about what was taking place in ICE detention centers. …

Her concerns about the use of segregation in ICE detention centers are consistent with findings of a monthslong investigation by The Intercept and the International Consortium of Investigative Journalists. Our review of more than 8,400 solitary confinement incident reports spanning 2012 to early 2017 show that in nearly a third of the cases, detained immigrants were described as having a mental illness. The records show at least 373 instances of individuals being placed in isolation because they were potentially suicidal, and another 200-plus cases of people already in solitary confinement being moved to “suicide watch” or another form of observation — in many cases another solitary cell.…

Gallagher has now decided to tell her story, she said, because “until there are enough people that do that, then this same set of circumstances will not stop, and I think it’ll actually get worse.”

Story ideas for next season, perhaps?

 

Generic Drug Industry: “Catch Me If You Can”

These days when you are prescribed a drug, about 90 percent of the time you end up with the generic version. Most people don’t know that the generic drug industry has complete immunity for marketing drugs it knows to be unsafe. This is thanks to recent U.S. Supreme Court decisions (beginning in 2011), followed by the 2018 Trump FDA withdraw of an Obama administration proposed regulation that would have fixed the problem.  

This regulation would have allowed consumers harmed or killed by a generic drug due to the drug’s inadequate labeling or defective design, to hold the manufacturer accountable in court. It would have restored rights to injured patients that were taken away by the U.S. Supreme Court in 2011.

Incredibly, we were almost there with a rule change. Obama’s FDA proposed the rule change, had a powerful public hearing about what these Supreme Court decisions had done to people (here’s our testimony) and received many comments in support of the change. (This from us and other consumer groups.) But generic drug industry lobbyists were already swarming the agency, guns ablazin’. Don’t do this, they screamed. Generic drug prices will skyrocket if you make us accountable.

We all knew this was bogus. But that’s not the shocking part.

At the same time these companies were jumping up and down about the rule change, they were illegally raising prices on drugs to such an extent (e.g., “1,215 generics, many of them the most prescribed drugs, jumped on average more than 400 percent in a single year”), that their activities are now considered perhaps “the biggest price-fixing scheme in U.S. history.” In fact, the Attorney General of Connecticut, William Tong, is calling the generic drug industry “the largest private sector corporate cartel in history.”

Shame on the generic drug industry.

As reported last night on 60 Minutes,Tong’s office has been examining the generic drug industry for almost five years. On Friday, with massive evidence of fraud, more than 40 other states joined Connecticut in filing a 500-page price-fixing lawsuit against the generic drug industry. (At least state AG’s still have the right to sue these companies.) Tong’s office found evidence of price-fixing involving “every kind of drug that touches our everyday lives.” (The drugs include “treatments for diabetes, cancer, arthritis and other medical conditions.” ) And they are putting “Americans' lives at risk.”

His office was able to catch the fraud with some stealth and tedious law enforcement techniques, leading them to “hard evidence, in the form of text messages, emails, documents, witnesses that demonstrate clearly that [the price hikes weren't] about product shortages. It was about profit. It was about cold, hard greed.” As far as the average consumer, said Tong, “It's devastating. it affects health insurance premiums and health insurance plans. It impacts Medicare and Medicaid. And it is a chain reaction that drives up the price of American healthcare to unnatural heights.”

The lawsuit, “also names 15 individual senior executives responsible for sales, marketing and pricing.” It says that by 2012, for example, “Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the United States” as they sought to “significantly raise prices on as many drugs as possible.” They picked companies with which it already had “very profitable collusive relationships,” and developed understandings to lead and follow each other’s price increases,” which “resulted in many billions of dollars of harm to the national economy over a period of several years.”

Kelley Dougherty, a Teva vice president, said, “The allegations in this new complaint, and in the litigation more generally, are just that — allegations … The company delivers high-quality medicines to patients around the world and is committed to complying with all applicable laws and regulations in doing so.”

High-quality medicine. So that’s another thing. NBC is coincidently running a frightening story (featured on this morning’s Today Show) about tainted generic drugs manufactured oversees, where most are made. As the Center for Justice & Democracy noted in its 2013 report, “America's Unaccountable Generic Drug Industry; How Legal Immunity Could Be Making You Sick,” generic drugs are manufactured in countries like India and China, to supposedly “keep prices low." (Sound familiar?) In these countries, the FDA rarely inspects factories or the supply chain. History shows that generic drugs or ingredients can be manufactured in dilapidated, dirty factories. And now, one former FDA inspector is ringing an alarm.

The main NBC story focused on the recent recall of the very popular blood pressure generic drug, valsartan, which apparently contained a carcinogenic “contaminant formerly used in the production of rocket fuel.”

The valsartan recall came as little surprise to Massoud Motamed, a former inspector with the U.S. Food and Drug Administration (FDA). More than a year before the notices went out, Motamed had tried to sound the alarm on what he flagged as potential systemic problems at two facilities in China and India that produce the active ingredients in generic valsartan and other blood pressure medications.

Speaking out publicly for the first time, Motamed told NBC News that the FDA ultimately overruled his recommendation to crack down on one of the plants. Perhaps more alarming, he says the issues at the two overseas drug production facilities are hardly unique.

"This is only the tip of the iceberg," Motamed said in an exclusive interview.

Blomberg wrote about some of this earlier this year, noting,

Data integrity was also at the heart of FDA inspector concerns at a plant halfway across the world, where Zhejiang Huahai Pharmaceutical Co. Ltd. was supplying the active ingredient valsartan—a widely used treatment for high blood pressure that is taken alone, as well as sold in combination with other cardiovascular drugs—for major pharmaceutical companies such as Teva Pharmaceutical Industries Ltd., the largest generic drug maker in the world. 

The inspection in May 2017 found that the Chinese ingredient maker ignored quality checks that showed unnamed drugs didn’t meet U.S. standards. Four months later, higher-ups at the FDA once again overrode the concerns of those on the ground who wanted to slap Zhejiang Huahai with harsher penalties. Instead, the agency gave the company a chance to fix its problems.

Motamed says “a more systemic issue has largely gone unreported: FDA inspectors struggling to keep up with foreign drug manufacturers that may bury or hide problems in their production. Last year, the FDA inspected only one in five registered human drug manufacturing facilities abroad, according to agency data.”

Catch ‘em if you can.

Law Day: Out of the Mouths of Jurors

Many judges and scholars have written eloquently in defense of the civil jury, warning against even limited intrusions into the right to civil jury trial. Take the late conservative Supreme Court Chief Justice William H. Rehnquist, who once wrote, “The right of trial by jury in civil cases at common law is fundamental to our history and jurisprudence....  A right so fundamental and sacred to the citizen, whether guaranteed by the Constitution or provided by statute, should be jealously guarded....” 

So true. Yet some of the most powerful sentiments about civil juries come not from judges or scholars, but from jurors themselves. Jurors are just ordinary people randomly chosen from the community, making decisions about society’s tolerance (or intolerance) for certain types of behavior, deliberating and rendering verdicts, and then fading anonymously back into the community. It’s an incredible system.

Despite being enshrined in the Seventh Amendment to the U.S. Constitution and nearly every state constitution, the civil jury system has been under siege for several decades now. The power and authority of civil jurors, who cannot be bought-off by special interests, represent a tremendous threat to the power structure in this country. Today, between so-called “tort reform” laws in most states, the recent proliferation of forced arbitration, and the dramatic decrease in civil jury trials, the entire system is on shaky ground. So what to do?

Here's one thing we might try. In all the political fighting around these issues, sometimes we forget to listen to those at the core of this debate - jurors themselves. Why do civil juries do what they do, and how do they feel when their power is taken away? There are two main reasons juries render verdicts for plaintiffs. One is to provide fair and adequate compensation to the injured.  Second is to hold wrongdoers accountable. Here are just a few examples – in their own words.

Compensation to the injured

1. The case of James Todd Beason 

James Todd Beason, an Texas oilfield worker, was severely injured when a crane fell on him, leading to two amputations on his left arm. He now “lives daily with severe nerve pain and has several other health complications as a result.” When he sued the company in Oklahoma, he and his wife were awarded $9 million in economic damages and $6 million in noneconomic damages. Little did the jury know, however (because they were not told), that Oklahoma’s state lawmakers had capped noneconomic damages at $350,000. So the judge was forced to drastically reduce this verdict.

As recently reported in Tulsa World,

Beason said he will never forget the reaction of the jury when they were told about the cap.

“Grown men and women came outside and were in tears,” he said. “I remember a gentleman came up and he was bawling. He was crying. He said, ‘We thought we were doing the right thing. We thought we were taking care of you and your family.’”

Fortunately, the Oklahoma Supreme Court was listening, and just recently invalidated the $350,000 cap, finding it unconstitutional.  Chalk one up for those jurors!

2. The case of Stephen Olsen

Steven Olsen is blind and brain damaged because, as a jury ruled, he was a victim of medical malpractice when he was two years old.  He fell on a stick in the woods while hiking. The family’s HMO refused to do an $800 CAT scan, which would have detected a growing brain mass caused by the stick.  

When they sued the HMO, a jury awarded $7.1 million in noneconomic damages for Steven’s avoidable life of suffering. But the judge was forced to cut this award to $250,000, the amount of California’s noneconomic compensation cap. This outraged the jury. Jury foreman Thomas Kearns then wrote a letter published in the San Diego Union Tribune, in which he described how they had reached their verdict:

“We viewed video of Steven, age 2, shortly before the accident. This beautiful child talked and shrieked with laughter as any other child at play. Later, Steven was brought to the court and we watched as he groped, stumbled and felt his way along the front of the jury box.  There was no chatter or happy laughter.  Steven is doomed to a life of darkness, loneliness and pain. He is blind, brain damaged and physically retarded.  He will never play sports, work, or enjoy normal relationships with his peers.  His will be a lifetime of treatment, therapy, prosthesis fitting and supervision around the clock.”

This anti-jury cap is still the law in California.

Accountability

1. Whirlpool

Some years ago, an Alabama jury reached a $581 million verdict against Whirlpool, which had dealers all over the state soliciting — door-to-door — poor, unsophisticated and elderly customers to purchase satellite-TV dishes for $1,100 plus 22 percent interest.  The same equipment could be bought at an electronics store for $199, amounting to an effective interest rate of 300 percent.  One witness who was sold a satellite dish was legally blind. Another had less than a 5th grade education.  A former agent who later quit testified that Whirlpool specifically targeted illiterate and unsophisticated people, and that he had trained others to lie about the terms of the financing which included a deceptive credit card scheme.

Why $581 million? A juror who spoke to one of the lawyers in the case said that the jury was “sick” at how Whirlpool treated poor, uneducated people, misrepresenting to them from the very start.  The juror also said the jury was “inflamed” that there were still “thousands of people out there” who were victims of the scheme, but that Whirlpool had not helped those people.  They felt their verdict was important “to get their Whirlpool’s attention.”  (See more here.)

The verdict was eventually cut nearly in half – to $300 million – and the parties later settled for an undisclosed sum. Within a couple weeks of that case the Alabama legislature passed a law capping punitive damages.

2. McDonald’s Coffee Case.

In the documentary film, Hot Coffee, which tells the story of the often unfairly-maligned McDonald’s coffee case, two jurors described why the jury decided to hit the company with $2.7 million in punitive damages (later reduced by the judge). An article in Reader’s Digest explains:

The trial revealed that [plaintiff Stella] Liebeck was not alone. McDonald’s had received more than 700 complaints about burns from hot beverages over the previous ten-year period.… “There was a person behind every number, and I don’t think the corporation was attaching enough importance to that,” juror Betty Farnham told the Wall Street Journal.

After seven days of testimony and four hours of deliberation, the jurors sided with Liebeck. They awarded her $200,000 in compensatory damages. But because she caused the spill, they reduced the amount to $160,000. The jurors then awarded her $2.7 million in punitive damages, which, they reasoned, was equivalent to about two days’ worth of McDonald’s coffee sales. The total was $2,735,000 more than Liebeck’s lawsuit had requested.

“The only way you can get the attention of a big company [is] to make punitive damages against them,” said juror Marjorie Getman. “And we thought this was a very small punitive damage.”

Jurors are understandably angry when they find out that their efforts to be fair and just are cheapened and devalued.  As we celebrate Law Day today, it is important to be aware that we are reaching a new level of disrespect for the civil jury system in this country. The nation’s founders would clearly be angry too.

Frontier Justice II: Forced Arbitration that Shocks the Conscience

Yesterday, the Center for Justice & Democracy released its newly-updated “Cases Tossed Out of Court Because of Forced Arbitration Clauses and Class Action Bans.” We thought we’d highlight some of the newer cases. If you thought forced arbitration clauses and class action bans couldn’t possibly, legally be used in cases like these, think again. They could. And they were:

• A 90-year-old nursing home resident was thrown against a wall by a nurse’s assistant, dying from injuries. Her death was ruled a homicide and the assistant was criminally charged.  Yet her family’s wrongful death suit was thrown out of court.  A forced arbitration clause had been buried in the nursing home’s admission agreement, which was signed by her daughter.  
• A 12-year-old boy was sexually assaulted and stalked at his boarding school. When his father sued the school, the case was forced into secret arbitration because he had signed a student enrollment agreement containing an arbitration clause.
• An employee suffered repeated sexual harassment and retaliation at a consumer goods refurbishing company. During this time, each employee was told to sign a new employment agreement containing a forced arbitration clause. This employee refused to do so, both orally and in writing. Nonetheless, a court forced her into arbitration.
• Video-game giant Valve allowed underage gambling through its online Steam Marketplace platform and video games like “Counter-Strike: Global Offensive.” A court agreed with the company that children had agreed to arbitrate any disputes when they created their accounts and that their parents, though non-signatories, were also bound by those terms.
• Wells Fargo, the scandal-plagued bank, continues to use forced arbitration clauses and class action bans in customer agreements, and to strong-arm its customers into arbitration.  For example, since 2009, it has been litigating against - and forcing into arbitration - customers that it defrauded, specifically by charging them illegal overdraft fees. . 
• Hertz, which also operates Dollar and Thrifty, uses shady debt-collector Viking Credit Services to bill customers for costly car damage months after they had returned undamaged rental cars.  The court said customers has “agreed” to arbitration because in order to rent the cars, they selected ‘I Agree’ at the automated airport kiosk.
• Washington, D.C.’s Aveda Institute, which charged cosmetology students $26,000 tuition, used students to sell products instead of providing them necessary coursework to prepare for the state board exam. A forced arbitration clause, buried in their enrollment agreement, led a court to throw out their class action, compelling them to privately arbitrate.
• Approximately 57 million customers and 600,000 drivers of Uber, who were victims of the company’s personal identification data breach that the company waited a full year to reveal, were forced to arbitrate all claims because they “agreed to” forced arbitration when signing up with Uber.
• Employees at Fiat Chrysler, including the company’s diversity manager, brought a class action alleging systemic discrimination and retaliation. Six claims were dismissed because of forced arbitration clauses in employment contracts. Two other employees, who joined the company before these clauses were included, were allowed to proceed with a much smaller class action.
• A Red Robin employee brought a class action for illegal wage theft. A class of over 18,500 workers was certified, yet months later more than 2,600 new hires were thrown out of the case because they had “agreed” to arbitration. The court said they could “scroll up or down to review the two arbitration documents before signing,” were able to “download the unsigned Arbitration Agreement as a Word document,” were sent a PDF copy of the signed agreement to their personal email, and then failed to "opt out."

These last two cases show how splitting victims in two can lead to terribly unfair, bizarre results, where victims experiencing the exact same type of wrongdoing but are forced to arbitrate would be unable to benefit from any larger settlement and in fact, could be left with nothing.

It is time for Congress to do something about this!