ThePopTort

Volkswagen to ALEC: Help, Let Us In!

Today, the American Legislative Exchange Council (ALEC), the secretive group run and funded by big corporations that subsidize the involvement of conservative state lawmakers, officially launched a new website about its model legislation to immunize corporate lawbreakers.  Coincidently, we just received a copy of this “confidential memo” from the Volkswagen diesel cheating crisis management team.  I know. What are the odds?

__________________

Confidential Memo

To: Volkswagen Board of Directors

From: Dieselgate Crisis Management Team

Re: Our Three Point Plan - Update

Date: September 24, 2015

Here’s where we are on the three-point plan:

1. CEO Martin Winterkorn steps down so he can spend more time with his lawyers.  DONE. 

2. We show that we’re no different – in fact, probably better - than the rest of the bottom feeders that make up the auto industry.  (Hey, how’s this worse than Henry Ford II calling airbags “a lot of baloney.”)  DONE.

3. We get with that U.S. group, the American Legislative Exchange Council (ALEC). I know, ALEC is so tainted that 120 companies have already quit. But let’s face it. Only a truly scorned organization can relate to what we’re going through right now. So I just buried ALEC’s enormous corporate membership fee in the $7 billion budget we think we need “to win back the trust of our customers.” Now let me show you why this is an excellent investment that will save us billions in the long run.

But before I do, let’s admit there are a few things we can’t do much about.  We got caught by U.S. environmental regulators (and researchers from West Virginia, of all places.) This is terribly ironic since we don’t do much diesel car business in the U.S. Our European friends barely regulate us, making it a whole lot easier to cheat. Had we just stayed out of the U.S., we’d be golden. Although I have to say, U.S. auto safety enforcement is generally laughable and the U.S. Justice Department doesn’t care much either. To be honest, we weren’t terribly worried. But the EPA? Now that was a surprise. I just found out that ALEC basically wants to repeal all U.S. pollution laws. (Hope the Pope doesn't find out.) If we only knew about ALEC sooner!

But now that we do, the timing couldn't be better. This week, ALEC officially launched a web site about what state lawmakers can do to immunize corporate lawbreakers like us. Can you feel a smile coming on?

Although the U.S. Department of Justice will probably just slap our wrists, we’re deathly afraid of private actions brought by state Attorneys General and class actions by angry customers. These have already begun. Turn’s out that ALEC’s top civil justice priorities are bills to ensure these very cases never get anywhere. It’s as if ALEC was reading our minds!

For example, ALEC wants to gut all the state consumer protection laws that provide the basis for many of these lawsuits:

ALEC’s model bill “would effectively eliminate the critical private enforcement provisions that give these laws their power.… [It] is actually a wrecking ball to destroy one of the building blocks of consumer protection, namely the private enforcement of state unfair and deceptive practices acts. It does this by systematically weakening each and every provision of these laws, such as lower burdens of proof, special damages, and attorney’s fees, that were designed to provide consumers with access to justice for small economic wrongs.

One of my absolutely fav’s is this provision: “in no event may any action be brought under this chapter more than [four (4)] years from the first instance of the act or practice giving rise to the cause of action.” We started cheating six years ago!  How'd they know? That’s just spooky.  

And there’s more. This bill contains a complete ban on punitive damages. And here’s what I love about ALEC. They propose not only limiting punitive damages in consumer protection cases. They have an entire bill aimed at limiting punitive damages in any kind of case brought by people we harm. This kind of law is incredibly important to corporate lawbreakers like us. It means civil damages will never threaten our bottom line, and we’ll be just fine even if we keep harming people. 

Then, ALEC wants to make class actions impossible to bring, so hundreds of thousands, or perhaps millions of victims, can’t join together in a lawsuit against us – even though we stuck the exact same cheating software in every single one of their cars. Just look at the hurdles and burdens their bill would place on our (likely ex-) customers. They'll all have to hire their own attorney and go through the time and expense of proving their cases one by one by one (which we expect they'll never do.)  Any one of these provisions alone could immunize us, but several dozen? This bill is a true embarrassment of riches.

And those lawsuits by State AG’s? ALEC’s bill would make it nearly impossible for states to hire outside counsel to help, which could prevent many cases from going forward at all. You can read more about that bill here. And should any of our cars have product defects that lead to car crashes and injuries (or deaths), ALEC has a variety of options to immunize us there, as well.

And here’s what else I love about ALEC.  Everything they do is entirely behind closed doors. They kick reporters out of meetings. They tell members of the public “NO” when they ask to participate in ALEC activities.   

So you see why we must join ALEC today. We’ve broken the law. We’ve harmed a lot of people. This is an organization just for victims like us!

America’s New Century of Hate

Just two days ago, Charles Kurzman, sociology professor at the University of North Carolina at Chapel Hill, and David Schanzer, director of the Triangle Center on Terrorism and Homeland Security at Duke University, wrote this in a New York Times op ed:

The main terrorist threat in the United States is not from violent Muslim extremists, but from right-wing extremists. Just ask the police.

In a survey we conducted with the Police Executive Research Forum last year of 382 law enforcement agencies, 74 percent reported anti-government extremism as one of the top three terrorist threats in their jurisdiction; 39 percent listed extremism connected with Al Qaeda or like-minded terrorist organizations. And only 3 percent identified the threat from Muslim extremists as severe, compared with 7 percent for anti-government and other forms of extremism.

Monitoring hate groups and right-wing extremists is one of the central missions of the Southern Poverty Law Center (SPLC), an extraordinary organization that, as we’ve noted before, has “crippled some of the country’s most notorious hate groups by suing them for murders and other violent acts committed by their members.” Just look at their current docket.  Sadly, as today’s tragic news only confirms, hate in America isn’t weakening:

Since 2000, the number of hate groups has increased by 30 percent. This surge has been fueled by anger and fear over the nation’s ailing economy, an influx of non-white immigrants, and the diminishing white majority, as symbolized by the election of the nation’s first African-American president.

These factors also are feeding a powerful resurgence of the antigovernment “Patriot” movement, which in the 1990s led to a string of domestic terrorist plots, including the Oklahoma City bombing. The number of Patriot groups, including armed militias, skyrocketed following the election of President Obama in 2008 – rising 813 percent, from 149 groups in 2008 to an all-time high of 1,360 in 2012. The number fell to 874 in 2014.

This growth in extremism has been aided by mainstream media figures and politicians who have used their platforms to legitimize false propaganda about immigrants and other minorities and spread the kind of paranoid conspiracy theories on which militia groups thrive.

Nineteen of these hate groups, “including two factions of the Ku Klux Klan and four ‘white nationalist’ organizations,” still call South Carolina home. Equally disturbing, as the SPLC notes today,"Black churches, including those in South Carolina, have been the targets of hate crimes throughout our country's history.”

Indeed, back in 1995, members of the Christian Knights burned down the Macedonia Baptist Church, a South Carolina African-American church. Three years later, “a South Carolina jury award[ed] the largest judgment ever against a hate group in Macedonia v. Christian Knights of the Ku Klux Klan. The Christian Knights, its state leader and four other Klansmen [were] ordered to pay $37.8 million (later reduced to $21.5 million)." Writes SPLC:

The civil judgment forced the Klan to give up its land and headquarters. When the property was sold, the deed included a restriction that the land never be used for white supremacist activities.

The judgment in this case transformed the Christian Knights from one of the most active Klan groups in the nation to a defunct organization.

Clearly, the shooter in the Charleston church massacre (a terrorist hate crime if there ever was one) is aligned with - if not part of - similar organizations. These groups haven’t exactly been hiding out lately.  For example, in Seneca, South Carolina last year,

[R]esidents in Oconee County reportedly found bags in their street containing candy and a leaflet with the message "Save Our Land, Join the Klan." It had a phone number that led to an automated message discussing KKK efforts against illegal immigration.

In the same month, a KKK rally was held in Abbeville, according to NBC station WYFF….

South Carolina is one of only five states that does not have a hate crimes law, according to campaign group SC Equality, although a recent extension of federal law means there are legal protections for victims of hate crimes in all states.

If indeed, it’s determined that this evil individual (who shall go nameless here) is connected to any of these hate groups, we hope (and have no doubt), SPLC will attempt to sue them out of existence. Seems like we need this now more than ever.

Learning From Police Misconduct Lawsuits Makes Cents

 

It seems like every day new information comes out about another incident of excessive force used by police. The latest is the widely-reported story of a police officer in Texas, who after tackling a 14-year-old girl in a bikini to the ground, aimed his gun at a group of unarmed teenagers during a pool party. These events have become so ubiquitous in the headlines, it is difficult to keep them straight. Incidents seem to be popping up in small communities and large cities, on the east coast and the west coast, involving victims with a range of ages.

There are no shortages of victims who have been injured, disabled or killed by police. This year, fatal police shootings have already reached 400 nationwide, “more than twice the rate of fatal police shootings tallied by the federal government over the past decade, a count that officials concede is incomplete.”  Scores of others have been seriously hurt.  And many cases have no justification, creating liability exposure for cities and police departments. Take the case of 21-year-old Ohio State University student, Joseph Hines who was severely beaten by police after being arrested in connection with a littering charge.  Last week, a U.S. District Judge ruled that his lawsuit against the Columbus police department could continue. The student was handcuffed, thrown on the ground, pepper-sprayed, punched repeatedly in the head, and hog-tied by an officer. Hines was knocked unconscious and was forced to spend three days recovering in the hospital.

For many victims, like Mr. Hines, because filing of criminal charges against a police officer is so rare, a day in civil court is the only justice they will ever receive. This right to seek redress is important both for the victims, who are often unable to pay for the unforeseen medical expenses (often totaling tens of thousands of dollars) but also for police who can use the information to identify potentially wide-spread abuses and better their departments.

As was first pointed out in 2011 op ed by Joanna Schwartz in the New York Times, most cities fail to make proper use of this information in order to reduce incidents of brutality. For example, in New York City, she explains-

“The [police] department does not track which officers were named, what claims were alleged or what payouts were made in the thousands of suits brought every year. What’s more, officers’ personnel files contain no record of the allegations and results of lawsuits filed against them. Neither the Police Department’s Internal Affairs Bureau nor the Civilian Complaint Review Board investigates allegations made in lawsuits, and police officials review only the litigation files of the few dozen cases each year that result in payments of $250,000 or more.”

Ms. Schwartz continues-

“Because the department ignores lawsuits, it cannot analyze or learn from them; instead, the city effectively writes off these suits as the extraordinarily high cost of doing police business.”

And the costs are clear. A report by the Washington Post revealed that local governments are paying millions of dollars in settlements for police misconduct but ignoring the root causes. Chicago taxpayers paid $84 million in just one year, while New Yorkers paid $348 million between 2006 and 2011 for cases alleging civil rights violations by the police (a price critics believe could have built seven new New York City schools). Last year, the annual cost to settle police misconduct claims in New York City surpassed all other claims, including medical malpractice, by nearly $90 million.

While some attack the victims for bring these lawsuits, Dan Korobkin, deputy legal director of the ACLU of Michigan, explained in the Washington Post article-

“The reasonable response to high settlement amounts is to stop violating people’s constitutional rights — to take greater care that police officers aren’t trained to just leave the legal issues up to the lawyers but rather are trained to take responsibility for their actions and not violate the civil rights and constitutional rights of the people that they serve. High settlement figures are warning signs that something is not right within the department, it’s not a reason to complain about the constitution.”

 

Mine Crimes

“Too Big to Jail” is a book about the rarity of corporate criminal prosecutions.  CEO indictments almost never happen. But with every rule there are exceptions, and a big one just happed in West Virginia.  Writes the Charleston Gazette,

Don Blankenship, the longtime chief executive officer of Massey Energy, was indicted Thursday on charges that he orchestrated the routine violation of key federal mine safety rules at the company’s Upper Big Branch Mine prior to an April 2010 explosion that killed 29 miners.

A federal grand jury in Charleston charged Blankenship with conspiring to cause willful violations of ventilation requirements and coal-dust control rules — meant to prevent deadly mine blasts —during a 15-month period prior to the worst coal-mining disaster in a generation.

The four-count indictment, filed in U.S. District Court, also alleges that Blankenship led a conspiracy to cover up mine safety violations and hinder federal enforcement efforts by providing advance warning of government inspections.…

The indictment also alleges that, after the explosion, Blankenship made false statements to the U.S. Securities and Exchange Commission and the investing public about Massey’s safety practices before the explosion.…

Blankenship pressured Upper Big Branch management to violate safety standards in favor of maximizing production and profits, the indictment alleges. One mine manager received a handwritten note from Blankenship in March 2009 “chastising him” for “insufficient attention to cost-cutting,” telling the manager, “You have a kid to feed. Do your job,” the indictment alleged. That same mine manager at Upper Big Branch was told, when he wasn’t producing as much coal as Blankenship demanded, “I could Khrushchev you. Do you understand?”

You can read the indictment here.

Notes the Associated Press,

"It's a big deal to charge a CEO, so prosecutors will need witnesses on the inside who can describe what the practices and the culture of the company were like," [University of Virginia law professor Brandon L.] Garett said. He said that testimony likely will come from some of the former Massey officials who have pleaded guilty and cooperated with the government.

One of those individuals is David Hughart, whom we covered in March 2013.  Hughart, who pled guilty to two counts of conspiracy, implicated Blankenship “in what appears to be a widespread corporate practice of warning coal miners about surprise inspections.” 

I don’t know if it's coincidence of just irony, but as Blankenship’s indictment was announced, NPR put out an incredible 2-part story resulting from a “joint investigation by NPR and Mine Safety and Health News,” which “found that thousands of mine operators fail to pay safety penalties, even as they continue to manage dangerous — and sometimes deadly — mining operations. Most unpaid penalties are between two and 10 years overdue; some go back two decades. And federal regulators seem unable or unwilling to make mine owners pay.”  And the report begins by featuring the story of one Jack Blankenship, whose mining story progressed a big differently than Don’s:  

Jack Blankenship was pinned facedown in the dirt, his neck, shoulder and back throbbing with pain.

He was alone on an errand, in a dark tunnel a mile underground at the Aracoma Alma coal mine in Logan County, W.Va., when a 300-pound slab of rock peeled away from the roof and slammed him to the ground. As his legs grew numb, he managed to free an arm and reach his radio. For two hours, he pressed the panic button that was supposed to bring help quickly.

"I couldn't hardly breathe," Blankenship remembered four years later. "I'd black out and come to. I was waiting to die. I'd already had my little talk with God."

Aracoma Alma and then-owner Massey Energy had a history of serious safety problems, including falling rock. In the two years before Blankenship's accident, the mine was cited by federal regulators more than 120 times for rock fall violations, according to records from federal regulators. That included inadequate roof support and deficient safety checks for loose rock.…

"Most folks out there, including me, are totally shocked when they find out that ... you can actually just sit around and not pay the fine and keep producing coal and put money in the bank," said Tim Bailey, Blankenship's attorney and a West Virginia native with three generations of coal miners in his family.

Retiring U.S. Sen. Jay Rockefeller, D-W.Va., said [Don] Blankenship and the mines he once operated "treated miners and their safety with callousness and open disregard. As he goes to trial, he will be treated far fairer and with more dignity than he ever treated the miners he employed. And, frankly, it's more than he deserves."

When Don Blankenship quit in December 2010, we covered the story of his golden payout, walking away with “$2.7 million, a free house for life, millions more in deferred compensation, and a ‘salary continuation retirement benefit’ of $18,241-a-month that will continue for 10 years after his departure at the end of the year.…Per W. Olstad, a lawyer with CtW Investment Group, a shareholder group that has pushed for Blankenship to step down, [called it], '[A]n egregious payout. It’s way beyond what he's earned. Given how destructive his mismanagement has been, he simply does not deserve it.'”

Well now, he may be spending 31 of those golden years in another kind of “free house”. Yet that won’t be his only legacy.  Notes the Gazette,

For years, Blankenship has been not only a powerful voice in the coal industry but a power broker whose involvement in West Virginia politics could cut both ways. At a time when a major verdict against Massey was headed for the state Supreme Court, his personal funds helped defeat then-Justice Warren McGraw’s re-election effort and his personal friendship with Blankenship likely helped cost then-Justice Spike Maynard his seat on the court. Some Republican operatives who helped engineer their party’s takeover of both houses of the West Virginia Legislature in this year’s election got their start working for Blankenship-funded political efforts.

The DOJ New Probes: GM Cars and NC Coal Ash

Between spying on reporters and navigating new state marijuana laws, the U.S. Department of Justice has been preoccupied with some strange things lately. So it’s nice to see DOJ getting back to basics – corporate crime and corruption

Today, a federal grand jury in North Carolina “will begin hearing evidence on whether North Carolina regulators looked the other way when toxic coal ask leaked from Duke Energy power plants. Coal ash is the sludge left over when coal is burned to make electricity, and there was a massive leak of its last month in the Dan River.” According to the Raleigh News Observer,  “Federal prosecutors have issued at least 23 grand jury subpoenas” and the grand jury is “set to meet behind closed doors from Tuesday to Thursday in the federal courthouse in Raleigh to examine documents, video and other materials with the Duke executives and 18 current and former N.C. Department of Environment and Natural Resources employees summoned to the hearing.”

As we noted in an earlier post, North Carolina officials essentially blocked citizens suit, which were filed against Duke over these coal ash sites. The governor, who worked for Duke for 28 years, intervened apparently for the sole purpose of protecting the company. And since our post, we have also learned that, “[i]nternal emails between staff at North Carolina’s environmental agency show state regulators were coordinating with Duke Energy before intervening in efforts by citizens groups trying to sue the company over pollution leeching from its coal ash dumps.” Hopefully, voters have a long memory.

And then there’s GM. Yesterday, another 1.5 million vehicles were recalled after last month’s recall of 1.6 million cars with faulty ignition switches. GM’s new chief, Mary Barra, said in a new apology video, “Something went wrong with our process in this instance, and terrible things happened.”  But this new "mea culpa" attitude might not be enough to stop criminal indictments.

Last week, DOJ "launched a criminal investigation into whether an ignition defect linked to 13 fatalities was ignored by General Motors for over a decade before it launched a massive recall last month.”  Notes Bloomberg, “Besides the U.S. Justice Department probe, GM must answer to Congress, the Federal Bureau of Investigation, the Transportation Department and lawyers the company hired to investigate itself.” And also, their victims. Last Friday, “the first U.S. class action related to the ignition-switch recall” was filed in Texas federal court.” We'll keep you posted.

“Stand Your Ground’s” Civil [Dis]service

Every year, our nation’s special interests line up before our state legislatures, with emptied pockets and outstretched hands, and ask for the opportunity to show their patriotic civic duty.  How do they do that?  Why, by getting immunity from liability, of course. 

After all, just in case they do something wrong, someday, why should they have to pay for it anyway? 

And we allow this because… well, most of us don’t even know about it.  And even if we did, we sure don’t have the money or power to stop it.

Such has apparently been the case in the 24 states that have now enacted “Stand Your Ground” laws.  Of course, we are all now acutely aware of how this law protects aggressors from criminal liability, even when they have a gun and stalk unarmed innocent teenagers.  (Jurors in the Zimmerman case were stuck with a terrible law not to mention significant law enforcement failures.)  But the nation may just be catching onto the fact that this law also strips away the legal rights of victims and their families.  The National Rifle Association made sure of that in Florida and NRA “pushers,” the American Legislative Exchange Council (ALEC), have ensured that every other state law does the same thing. It doesn’t mean a civil case is impossible.  But winning becomes incredibly difficult and a family who brings a case and loses is forced to pay the other side’s legal fees.  In other words, who’s gonna risk bringing a case like that?

Buzzfeed delved into some initial views about civil lawsuit possibilities:

“Technically, there can still be a civil case,” said Tamara Rice Lave, a professor of criminal law at the University of Miami and a former San Diego public defender. “However, ‘Stand Your Ground’ is going to preclude that.”

At the start of his trial, Zimmerman waived the right to have a judge determine he was immune from prosecution in the Martin shooting under “Stand Your Ground,” which says people can use deadly force rather than flee a situation where they feel their lives are in danger. After his acquittal, Zimmerman can rely on getting that immunity in a civil case, Lave said.…

Darren Hutchinson, a constitutional law professor at the University Of Florida, agreed that a civil case could blow up due to “Stand Your Ground,” but he was less convinced a judge is guaranteed to give Zimmerman immunity under the law.

“It’s still hard, given a acquittal, to win in a civil case,” he said. He noted that if Zimmerman doesn’t get immunity under “Stand Your Ground,” the burden of proof would be much different and give the Martin family attorneys the chance for a win.

“If they got over the procedural hurdle [of immunity], I wouldn’t say that it would be impossible,” Hutchinson said. “I still think it’s difficult, given the lack of evidence we have in the case and the main eyewitness against him [Martin] being dead.”

Many outside observers look to O.J. Simpson’s civil conviction following his criminal conviction as a map for how the Martin family should proceed. Lave said the comparison doesn’t make much sense.

“If you think about the O.J. case … no state had Stand Your Ground laws then. California doesn’t have it now, so there was nothing that prevented [the civil case] from happening,” she said. In Florida, the law is different: “Stand Your Ground” gives Zimmerman legal power to shut down a civil case before it begins, something Lave said was a virtual certainty.

Zimmerman’s lawyer Mark O'Mara has been clear about his own views, however:

"On the civil aspect, if someone believes that it's appropriate to sue George Zimmerman, then we will seek and we will get immunity in a civil hearing."

With regard to our rights to civil justice, Joni Mitchell perhaps said it best:

Don’t it always seem to go
That you don’t know what you’ve got
Till it’s gone

 

Gideon, Legal Aid, and Contingency Fees

It’s quite a week for 50th Anniversaries! On March 22, it will be 50 years since The Beatles released their first album.  But even more importantly than that (!), today marks the 50th Anniversary of one of the most important U.S. Supreme Court decisions ever – Gideon v. Wainright, where the court unanimously ruled that criminal defendants have the right to counsel and if they cannot afford one, an attorney must be provided.

Sadly, though, so much coverage of Gideon today focuses on the unfulfilled promise of that landmark “unfunded mandate." (See, e.g., here, here.)  Andrew Cohen writes in The Atlantic 

Today, there is a vast gulf between the broad premise of the ruling and the grim practice of legal representation for the nation's poorest litigants. Yes, you have the right to a court-appointed lawyer today -- the right to a lawyer who almost certainly is vastly underpaid and grossly overworked; a lawyer who, according to a Brennan Center for Justice report published last year, often spends less than six minutes per case at hearings where clients plead guilty and are sentenced. With this lawyer -- often just a "potted plant" -- by your side, you've earned the dubious honor of hearing the judge you will face declare that this arrangement is sufficient to secure your rights to a fair trial.

For people stuck on the wrong side of the civil law, however, the situation is worse. Even the elusive, vulnerable promise of Gideon does not apply to them. On Saturday, the New York Times ran a front page story called “Right to Lawyer Can Be Empty Promise for Poor":

Civil matters — including legal issues like home foreclosure, job loss, spousal abuse and parental custody — were not covered by the decision. Today, many states and counties do not offer lawyers to the poor in major civil disputes, and in some criminal ones as well. Those states that do are finding that more people than ever are qualifying for such help, making it impossible to keep up with the need. The result is that even at a time when many law school graduates are without work, many Americans are without lawyers.

The Legal Services Corporation, the Congressionally financed organization that provides lawyers to the poor in civil matters, says there are more than 60 million Americans — 35 percent more than in 2005 — who qualify for its services. But it calculates that 80 percent of the legal needs of the poor go unmet. In state after state, according to a survey of trial judges, more people are now representing themselves in court and they are failing to present necessary evidence, committing procedural errors and poorly examining witnesses, all while new lawyers remain unemployed.

“Some of our most essential rights — those involving our families, our homes, our livelihoods — are the least protected,” Chief Justice Wallace B. Jefferson of the Texas Supreme Court, said in a recent speech at New York University. He noted that a family of four earning $30,000 annually does not qualify for legal aid in many states.

James J. Sandman, president of the Legal Services Corporation, said, “Most Americans don’t realize that you can have your home taken away, your children taken away and you can be a victim of domestic violence but you have no constitutional right to a lawyer to protect you.”

The problem, of course, is that with such unfair budgetary cutbacks, there is no way to pay lawyers for doing this work.  So there’s a glut of good lawyers (and many enthusiastic new lawyers finding few job opportunities) anxious to do this work, but they can’t.  Writes the Times,

With law school graduates hurting for work, it may appear that there is a glut of lawyers. But many experts say that is a misunderstanding.

“We don’t have an excess of lawyers,” said Martin Guggenheim, a law professor at New York University. “What we have is a miserable fit. In many areas like family and housing law, there is simply no private bar to go to. You couldn’t find a lawyer to help you even if you had the money because there isn’t a dime to be made in those cases.”

You’re probably now thinking that the right to counsel is a complete illusion for anyone except the 1%, but I am here to tell you that you’re wrong - at least for people who have been seriously injured due to the wrongdoing of others. That is because in this country, we have what is known as the "contingency fee" system. It is a system that provides anyone with a legitimate injury case, regardless of their financial means, with access to an attorney. The attorney takes a case without charging any money up front and is paid only if the case is successful.  If the Times story is any guide, it is clear that without this system to finance a case, everyday Americans would find it simply impossible to afford counsel when they've been hurt. The difference, of course, is that these are cases involving damages. Fees are paid not by the victim, and not by the government - but by the wrongdoer. Because of that, attorneys can actually afford to help people. 

This system has worked without interference for centuries. But that all ended in the 1980s, when lobbyists for big corporations, medical societies and the insurance industry began to attack this system, lobbying for government-imposed schedules and “caps” on contingency fees. The impact of such lopsided government regulation is obvious. Wrongdoers could continue to hire the best attorneys money could buy while the sick and injured could not. Today, half the states in this country have some type of law dealing with contingency fees and most block victims’ ability to hire counsel. (See more here.)

And now, the same kind of corporate attacks have been launched against underfunded and underfinanced state Attorneys General who hire outside counsel on a contingency fee basis.  (We’ve noted this before, most recently last week discussing how much money the federal government was paying corporate law firms, out of taxpayer funds, and by the hour):

We wouldn't be so hot and bothered by this had Corporate America not launched a brazen, hypocritical campaign attacking underfunded and under-resourced state Attorneys General who also hire outside counsel. Yet state AG's do so on a contingency basis. In other words, there are no costs to the taxpayer. The AG's hire counsel to help them protect their citizens in many diverse areas, including consumer protection, antitrust and utility regulation, and environmental protection. What’s more, they often recover millions of dollars for state taxpayers!

So needless to say, it’s not a perfect system. Too few legitimate cases make it to court for all kinds of reasons, including not only limits on state AG’s ability to hire contingency fee attorneys but also the hundreds if not thousands of so-called “tort reforms” that have passed since the 1980s.

But even so, thanks to the contingency fee system, at least sometimes the sick, injured and violated do get justice. There is something there, perhaps, to celebrate.

Salmonella’s Silly Season

For awhile there, we couldn’t get enough of the Peanut Corporate of America.  The company behind 2009’s deadly Salmonella outbreak even boggled our minds, and that’s saying something!  Here’s a taste, ‘er example, of what was going on at their Georgia plant: 

[A] former plant employee has come forward saying that he once opened a container of peanuts and discovered several baby mice.  He also said he witnessed coworkers put “new” stickers on buckets of old peanut paste, and seeing bags of nuts with holes in them, apparently caused by burrowing rats. Even worse, said the former employee, “they would put tape on them or sew them up and send them out.”

Here's more: 

On March 21, 2007, the owner of Virginia-based Peanut Corp. of America seemed impatient. Informed that a customer's shipment might be delayed because the results of a salmonella test were not yet available, Stewart Parnell decided not to wait. "S---, just ship it," he wrote in an e-mail, according to a newly released federal indictment. "I can't afford to loose [sic] another customer."

Well finally, four executives: Stewart and Michael Parnell, (former PCA president and vice president); Samuel Lightsey, (plant operations manager); and Mary Wilkerson, (plant quality assurance manager) were charged by a federal grand jury with 76 criminal counts including lying, fabricating lab results, mail fraud, wire fraud and the introduction of adulterated and misbranded food into interstate commerce with the intent to defraud or mislead.

Bill Marler, an attorney who represented many of the victims in the peanut case, has specialized in food safety law for 20 years. He says this is the first time he can remember such a scathing indictment on a food poisoning case … If I were an executive of a company, today I'd be asking my lawyers, "How does this not happen to me?"

In yet other Salmonella news,

A Denver pet treat maker is recalling dozens of different products - from chicken jerky and pig ears to buffalo hearts - because they might be contaminated with salmonella. It's the third recall since the fall by Kasel Associated Industries and covers all products manufactured at the Colorado facility from April 20 through Sept. 19, 2012. The firm previously declined to recall its treats, despite urging from the federal Food and Drug Administration.

First of all, pig ears and buffalo hearts?  Anyway, continuing down the road of unpleasant truths about pet treats, we’ve also learned that Giant Foods is recalling its Kaytee Parakeet Honey Stick due to possible Salmonella in its parsley flake ingredients.

So basically what we’re saying here is that no creature on earth is safe from Salmonella.  Discuss.

BP’s Criminal Vessels

Anyone following legal developments surrounding the Deepwater Horizon oil explosion and spill knows how those responsible have used every maneuver in the book to try to duck blame.  By categorizing the oil rig as a “vessel,” they have tried skirt all kinds of responsibility. For example, on June 3 2010, we wrote,

In an legal maneuver the U.S. Justice Department yesterday called “simply unconscionable,” Transocean has asked a federal judge to apply a 159-year-old law to cap its liability at $27 million – essentially the costs of the sunken rig. AP reports, “If successful, Transocean Ltd. would be left with as much as $533 million in insurance money [which is] almost enough to cover the revenue the company was expecting from a three-year contract with BP PLC.”

Transocean had pulled out of its pocket the Limitation of Liability Act, a primeval law that allows vessel owners to limit their liability to the post-voyage value of the vessel - even though this law was never intended to limit a company’s liability for death and injury to workers. Nine of the 11 workers killed in the explosion worked for Transocean.

Keith Jones, whose 28-year-old son Gordon was one of those killed that day (see Keith below) has been on a painful quest to try to change two other archaic laws, the Death on the High Seas Act and Jones Act, both of which cover deaths on the high seas and both of which severely limit compensation to families of those killed. Thanks to the extraordinary efforts of Keith Jones and others, these laws (on the books since 1920) were almost amended in Congress. But at the end of 2010, U.S. Sen. James DeMint, (R-S.C.), blocked the Senate from voting on it as a gift to the cruise line and shipping industries, which were heavily lobbying against the families’ interests.

But now, this vessel characterization has come back to bite them, big time.  BP has said it will plead guilty to 11 manslaughter charges for these deaths.  Corporate manslaughter is pretty rare but turns out, less rare when vessels are involved!  That’s thanks to another strange maritime law called the Seaman’s Manslaughter Statute. As described by University of Michigan law professor David Uhlmann, formerly of the Environmental Crimes Section at DOJ, who spoke to the Corporate Crime Reporter last year, the Seaman’s Manslaughter Statute, “[is] a very old statute, which predates the environmental laws that were violated in this case.… Under the Seaman’s Manslaughter Statute, it is a crime if a worker dies aboard a vessel because of negligence or inattention to duties by the master of the vessel or the owner of the vessel. …It’s a felony violation that could result in up to ten years in prison and significant fines.”

Incredible that it took this long for these 11 families to get some kind of justice. But as satisfying as this may be, it’s shameful that families are still victimized by these rest of these statutes. 

UPDATE: Attorney General Eric Holder announced that "BP has agreed to plead guilty to 14 criminal counts, including manslaughter, and will pay $4 billion over five years in a settlement.... [A] separate 23-count criminal indictment — including charges of seaman’s and involuntary manslaughter — against the two top-ranking BP supervisors on the Deepwater Horizon drilling rig where a blowout occurred April 20, 2010, sinking the rig and killing 11 workers."

 

Johnson & Johnson – A Tall Order Even for Don Draper

Last week watching Mad Men, when I heard Don Draper’s pitch to Dow Chemical about the wonders of Napalm (coincidently just as the country was recognizing the 40th anniversary of that iconic photo), I thought, "wow, if Don Draper were alive today – er, I mean a fictional TV character today - have I gotta company for him"!

Most people probably know Johnson & Johnson, the $44.6 billion (in gross profit) pharmaceutical giant, for its baby shampoo and Q-tips.  But today, Bloomberg is reporting:

Johnson & Johnson (JNJ) has agreed to pay as much as $2.2 billion to settle U.S. probes of the marketing of its Risperdal antipsychotic drug and other medications [i.e., the heart-failure drug Natrecorand the anti-psychotic medication Invega].

The settlement, which might be announced this week, will include a misdemeanor plea and criminal penalty of as much as $600 million…  The accord also would resolve civil claims that J&J paid kickbacks to Omnicare Inc. (OCR), a company that dispenses drugs at nursing homes, the people said. 

Read more here.

This comes on the heels of the company agreeing to stop selling vaginal mesh implants, which it improperly put on the market (see our earlier coverage here) and which subsequently injured or killed hundreds of women.  And as if that were not enough:

• J&J faces over 6,000 lawsuits from patients severely harmed after receiving a DePuy artificial hip known as ASR.  According to victims, the ASRs – 93,000 of which DePuy recalled worldwide in 2010, including 37,000 in the U.S., since more than 12 percent of the devices failed within five years – caused joint dislocations, infections, bone fractures and other painful injuries.
• Thousands of cases are pending in federal and state courts over J&J’s alleged failure to adequately warn consumers about the risk of tendon damage and tendon ruptures associated with the antibiotic Levaquin.
• In April 2011, J&J reached a $70 million settlement over federal charges that it paid bribes and kickbacks to win business overseas.  Under the agreement, the company pledged to pay a $21.4 million fine to settle Justice Department criminal charges and more than $48.6 million to settle SEC charges.
• In March 2011, J&J’s McNeil subsidiary and two of its executives reached a consent decree with the FDA and the Justice Department over the company’s repeated unwillingness to comply with federally-mandated manufacturing practices.  The agreement put McNeil’s Las Piedras, PR, Fort Washington, PA and Lancaster, PA plants under FDA supervision, required the company to adhere to a strict timetable to bring those facilities into compliance and threatened thousands of dollars in fines for decree violations, up to $10 million annually.
• In January 2011, the company recalled nearly 50 million bottles and packages of consumer products, including Tylenol, Benadryl and Rolaids, due to lax cleaning procedures and other problems at its McNeil Fort Washington, PA manufacturing plant.
• Also in January 2011, the state of Oregon filed a lawsuit, alleging that J&J and two subsidiaries endangered public health and safety by failing to notify consumers and retailers about defective Motrin for more than a year before recalling the product.  According to state AG John Kroger, the companies conducted a “phantom recall” – hiring contractors to go into stores to secretly buy vials off shelves to avoid negative publicity – in direct violation of the state’s Unlawful Trade Practices Act.  This Motrin buyback program came to light during a 2010 congressional investigation into recalls of over-the-counter McNeil drugs.
• In December 2010, J&J recalled over 13 million packages of Rolaids after metal and wood particles were found in the antacids, causing vomiting, gum and tooth injury in some cases.
• In May 2010, J&J’s McNeil unit pled guilty to a federal misdemeanor and was ordered to pay a $6.14 million criminal fine for promoting off-label use of its anti-seizure and migraine medication, Topamax. An affiliate of McNeil also agreed to pay over $75 million for illegally promoting the drug and causing false claims to be submitted to the government for unapproved uses. 
• In April 2010, J&J’s McNeil recalled more than 135 million packages of children’s and infant’s Motrin, Tylenol, Benadryl and Zyrtec for possible bacterial contamination and the presence of small metal parts. The tainted pediatric drugs had been produced at McNeil’s Fort Washington, PA plant.

The company even endangered babies with its signature Baby Shampoo line.  In November 2011, J&J  finally agreed to phase out the use of potentially cancer-causing chemicals in its baby products. 

And that's just the recent stuff. 

Last but by no means least, there's the problem of J&J’s longtime association with the tainted American Legislative Exchange Council (which we last covered here ). ALEC has already “lost the support of 18 corporations in recent months,” and J&J is being pressured to become #19. (See today’s op ed by Rashad Robinson, executive director of ColorOfChange, the largest online black civil rights organization. )

My guess?  Even Don Draper would agree with that.

UPDATE: J&J has dropped ALEC!