Texans for Lawsuit Reform

Negligent Consumer Advocacy

manager — Thu, 24 May 2012 14:18:28 +0000

Teaser

I wonder if "consumer groups" who strongly favor the opportunity to sue almost anyone about almost anything would advocate that consumers be allowed to sue them for negligent consumer advocacy.

Publication and Date

Texas Public Policy Foundation, April 27, 2012

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By The Honorable Joseph M. Nixon

I wonder if “consumer groups” who strongly favor the opportunity to sue almost anyone about almost anything would advocate that consumers be allowed to sue them for negligent consumer advocacy.

It would be entertaining to watch consumer groups try to explain under oath their recent attacks on the lawsuit reform – including caps on non-economic medical malpractice damages – passed by the Texas Legislature in 2003. These reforms have greatly benefitted consumers through an unprecedented influx of physicians and businesses to Texas, fairer courts, and increased access to health care. The claims of consumer advocates do not square with the facts. The response of one “consumer advocate” to the recent influx of almost 25,000 newly licensed physicians in Texas was to argue that there are not really 25,000 new physicians licensed in Texas.

A quick check with the Texas Medical Board will prove that they have issued licenses to 24,584 new doctor applicants since the tort reform passed, a sizeable number considering that Texas had only about 33,000 physicians prior to the reforms. Among these new physicians are 218 obstetricians, 212 orthopedic surgeons, 48 neurosurgeons, which, together with all newly licensed physicians, have resulted in an additional 6.3 million patient visits a year.

Another consumer advocate, Public Citizen, claims that tort reform has only helped insurance companies. Not true. Since the enactment of tort reform, the premiums of the largest physician insurer in Texas – the physician-owned, non-profit Texas Medical Liability Trust – have decreased 54 percent.

What is more, Texas now has more than 30 insurance providers competing to offer medical malpractice insurance, compared to the 4 which existed in the state in 2003. All of them have dramatically reduced the cost to physicians for malpractice insurance.

Compare this to the 60 percent increase in cost paid by the physicians in New York, whose 2003 rates were similar to those of physicians in Texas. The result is more physicians want to move to Texas than any other state.

The simple reality is that competition has driven the cost of insurance to physicians to new lows in Texas, thereby making Texas a very attractive state for physicians. Lawsuit reform has benefitted the people paying the insurance premiums, and those who have received better access to health care.

It’s not only consumer groups, however, that question the benefits of medical malpractice caps. A paper issued by the libertarian CATO Institute states, “Supporters of capping court awards for medical malpractice argue that caps will make health care more affordable.”

While there may be some who make that claim, it was not the primary motivation behind the reforms in Texas. As author of Texas’ lawsuit reform legislation, I made this statement in the bill analysis filed contemporaneously with the bill:

“Texas faces a general environment of excessive litigation. This has resulted in a crisis in access to healthcare as medical providers leave the state or leave the profession altogether… “CSHB 4 is a comprehensive civil justice reform bill intended to address and correct problems that currently impair the fairness and efficiency of our court system. …In summary, [The bill] provides for various corrective measures that will help bring more balance to the Texas Civil Justice system, reduce the cost of litigation, and help restore litigation to its proper role in our society.”

We have achieved what we sought. With the addition of 24,584 newly licensed physicians, a dramatic reduction in malpractice premiums, an increase in charity care of over $500 million per year, and new medical infrastructure of over $7 billion, our goals have been achieved beyond anyone’s expectations.

Despite claims to the contrary, the Texas tort reform’s stated goal of increased access to health care is a documented winner. Texas citizens, as patients, have greatly increased access to needed health care since 2003.

Joseph M. Nixon, the author of Texas’ Prop 12, is of counsel with Beirne, Maynard & Parsons, LLP, and a senior fellow with the Texas Public Policy Foundation.

Texas Tort Reform Boosts Physician Count 19%

manager — Tue, 22 May 2012 15:39:32 +0000

Teaser

SAN DIEGO – Since the State of Texas implemented medical tort reform in 2003, the number of practicing physicians has increased by 19% per 100,000 population. In addition, hospitals in the state report improved ability to recruit physicians and expand patient services.

Publication and Date

Internal Medicine News, May 21, 2012

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By Doug Brunk

Those are key findings from an innovative study presented by Dr. Ronald M. Stewart at the annual Digestive Disease Week.

"Tort reform has been beneficial for all or almost all Texas physicians," Dr. Stewart said in an interview in advance of the meeting. "I have benefited from lower malpractice premiums and a more favorable liability climate in the state. However, the effect of tort reform in a region is probably not the primary driver for physician recruitment and retention. I believe it is permissive – providing the framework for growing physicians relative to the number of patients being served," he explained.

The data show that, in the decade from 2002 to 2012, the Texas population went from 21,779,893 to 26,403,743 – a 21% increase – and the number of Texas physicians rose by 15,611 – a 44% increase (46% in metro areas vs. 9% in nonmetro areas). This absolute change led to an increase of 30 physicians per 100,000 population (19% increase; P less than 0.01).

Nonmetropolitan Texas had a net increase of 115 physicians, but there was no change in the number of physicians per 100,000 in these areas.

Looking at trauma service areas (TSAs), the researchers found that 20 of 22 TSAs had an increase in both number of physicians and physicians per capita. Five had increases of greater than 50%. The increases were generally greater in the central Texas TSAs and TSAs with a larger population size.

"The central part of the state along the I-35 corridor where there are academic medical centers grew significantly," commented Dr. Stewart, professor and chairman of the department of surgery at the University of Texas Health Science Center, San Antonio. "In rural Texas, the absolute number of doctors increased, but per capita it stayed about the same."

For the study, Dr. Stewart and his associates used data from the Texas Medical Board, the U.S. Census Bureau/Texas State Library and Archives Commission, and the Texas Department of State Health Services to compare the rate of physician growth prior to and following tort reform, and the number of licensed physicians per 100,000 population from January 2002 to January 2012.

The information about hospitals was extracted from a 2008 survey by the Texas Hospital Association, which asked hospital and health system administrators from 10 health care systems and 10 independent hospitals to measure the impact of the state medical liability tort reform, which became effective on Sept. 1, 2003. The law includes a $250,000 cap on noneconomic damages in most medical malpractice cases.

The survey of hospital administrators asked how they used the funds saved from their reduced liability coverage costs, and 58% of respondents reported using the funds to expand patient safety programs, 51% used the funds to maintain/expand coverage or services for uninsured/underinsured patients, and 46% used the funds to subsidize various payment shortfalls such as Medicaid.

"Tort reform, as implemented in Texas, was associated with an increase in practicing physicians with resultant improved access to care," Dr. Stewart concluded. "We know that tort reform is beneficial to the physician and hospital, but these data support the notion that it really is better for the patient, too."

When asked to comment on the translatability of the study findings to other states, Dr. Stewart said that comprehensive tort reform "makes an area more attractive to physicians. This is speculation on my part, but I would guess that if you implemented tort reform in other states, it gives those states some degree of an advantage in retaining and recruiting physicians."

He went on to point out that improving access to medical care for patients "is not just about doctors per capita or numbers of doctors; it’s also about what doctors do with their practice. One of the reasons Texas implemented tort reform wasn’t just that we were not keeping pace with our population growth; it was also because physicians were restricting their practice to what they viewed as lower-risk malpractice areas. Our study provides evidence that tort reform has also led to improvements with respect to physicians expanding their care to perceived high-risk areas."

Dr. Stewart said that he had no relevant financial disclosures.

Asbestos trusts say they have nothing to hide, but act like they do

manager — Fri, 18 May 2012 14:15:03 +0000

Teaser

Asbestos trust funds were established so that future claimants can receive benefits from asbestos manufacturers going bankrupt. But the lack of transparency can facilitate fraud, and cause claimants and attorneys to seek redundant restitution from multiple funds.

Publication and Date

Southeast Texas Record, May 15, 2012

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"Where are you going?" "What will you be doing?" "Who's going to be there with you?"

Those are questions all good parents ask of their children, but the answers are not always satisfactory.

"Nowhere." "Nothing." "Nobody."

Parents like transparency. When children are secretive or evasive, parents have reason to worry. Reluctance to reveal their destinations, their activities and their companions leads parents to believe that their offspring may be hiding something.

Citizens like transparency, too, and become indignant when public servants try to avoid proper scrutiny. If they don't have anything to hide, we wonder, then why are they acting like they do?

Transparency should be a desirable quality for administrators of asbestos trusts, as well. Again, if there is nothing to hide, why act suspiciously?

Asbestos trust funds were established so that future claimants can receive benefits from asbestos manufacturers going bankrupt. But the lack of transparency can facilitate fraud, and cause claimants and attorneys to seek redundant restitution from multiple funds.

As U.S. Rep. Lamar Smith (TX-21) has observed, the federal Bankruptcy Code favors transparency in bankruptcy cases, but "this principle of openness is no longer being fully implemented" for asbestos trusts.

Two years ago, Smith asked the Government Accountability Office to investigate the asbestos trusts and raise the veil of secrecy. In a report released last October, the GAO acknowledged that the lack of transparency could facilitate fraud, but concluded that none was occurring. The veil of secrecy was not raised.

Whether there is or isn't fraud, the fact remains that there could be and that just isn't right.

Fortunately, legislation has been introduced in Congress to reduce the potential for fraud. House Resolution 4369 would require bankruptcy trusts to disclose claims and exposure allegations and submit to third-party discovery in civil lawsuits.

Opponents say there's no need for the bill, but you have to wonder why they favor secrecy. If there's nothing to hide, why keep hiding it?

Governor says deal reached on legacy lawsuits

manager — Fri, 18 May 2012 14:13:33 +0000

Teaser

Aides to Governor Bobby Jindal say a compromise has been reached by the Department of Natural Resources, landowners, oil and gas industry representatives and key legislators involved in solving the legacy lawsuit issue.

Publication and Date

Fox 8 New Orleans

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Baton Rouge, La. -

A news release from the Governor's Office says Jindal's point-person on the suits, Natural Resources Secretary Scott Angelle, brokered the compromise, which accomplishes the goals of accelerating environmental clean-up from exploration and production activities and ensuring that the party responsible for environmental damage is actually held responsible for cleaning it up.

"To reach a compromise, it was important that we came to a balance that enables us to continue to lead the country in energy production and also be good stewards of the environment," Angelle says in the news release. "This compromise provides for transparency in the process, accelerates clean-up of the environment and protects innocent parties from punitive damages."

The statement lists the following as key points for compromise:

In order to accelerate clean-up, the compromise will allow a party to admit responsibility for environmental damage according to a regulatory standard without having to admit liability for private damages.
Once a party admits responsibility, the Department of Natural Resources will be charged with structuring a feasible plan that will protect the environment, public health, safety and welfare of the state.
The compromise requires oversight of the feasible plan by the Secretary of the Department of Natural Resources, Secretary of the Department of Environmental Quality and the Commissioner of Agriculture.
Both the feasible plan and the comments of each agency are admissible in court
During the design of the feasible plan – and to guarantee, transparency – no employee, contractor or representative of the state shall have any ex parte communication.
For any party that admits responsibility, they waive the right to enforce contractual rights to indemnification for punitive damages caused by the responsible party's acts or omission.

Louisiana Oil and Gas Association President Don Briggs is quoted in the statement saying, "Over the course of the last twelve months, the Jindal Administration and stakeholders have worked to find a solution to curb the legacy lawsuit problem in Louisiana. Today, we reached an agreement on proposed legacy lawsuit reform legislation that we believe will ensure timely regulatory clean up of the land while protecting a landowner's right to recover damages."

NYC lawsuit payouts: $560M in 2011

manager — Fri, 18 May 2012 14:12:04 +0000

Teaser

Publication and Date

Point of Law, May 16, 2012

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By Ted Frank

$560M, more than the budgets of many smaller cities, is a fairly shocking figure, since, at typical 33% to 40% personal-injury contingency rates, it means that it's a wealth transfer of about $30 per capita from every man, woman, and child in the 99% in New York City to the 1% who are trial lawyers. And the $560M figure doesn't include the litigation expenses of a 650-member Law Department (that's more than the number of lawyers in Dewey Leboeuf's New York office at its peak, though not all of those city lawyers are defending personal injury claims) or of non-legal workers whose jobs are interrupted responding to discovery.

But the focus of a NY Times story on the subject is the reporter's inconceivable shock that NYC defends itself in lawsuits instead of blindly writing multimillion $ checks. In particular, the story is critical of the city hiring a private investigator to double-check the claimed injuries of a plaintiff claiming (and eventually receiving) millions of dollars of damages from a tree accident: of course, surveillance of a personal injury plaintiff seeking a large sum for quality-of-life injuries is common, and can uncover fraudulent claims, though courts are inconsistent and relatively lackadaisical about punishing such fraudulent claims. But given how thoroughly wracked the status quo is with fraud, imagine how much a softer touch New York City taxpayers would be if it was known that they did not double-check for fraud? "If you build it, they will come," and that $560 million a year would quickly become $5.6 billion a year. The Times investigated "ten cases"; how were those picked? How many cases involving fraudulent claims that the City successfully beat back did the Times miss?

The Times does not question City taxpayers paying an unprecedented $350,000 to the estate of an elderly woman for what was, at most, a few seconds of pain and suffering (and was probably no pain and suffering at all, but we'll credit the jury's finding for the sympathetic grandmother against the deep pocket); it gives only lip service to the legitimate claim of the City's counsel, Michael Cardozo, that taxpayers are paying excessive amounts for injuries.

The Times story is part of a three-day series suggesting that the City should do more to prevent injuries from falling trees. Of course, creating excessive liability for damage caused by trees is a great way to incentivize a defendant into having fewer trees. Trial lawyers' proposed solutions sometimes involve pure social cost: this blogger argues for warning signs, though, of course, if every tree has a warning sign to avoid liability, citizens will simply ignore the millions of dollars spent on warning signs (and also ignore far more important warning signs). And trial lawyers will still argue that injured plaintiffs were inadequately warned, because, after all, the warnings didn't prevent the injury in hindsight.

A Crackdown on Patently Absurd Lawsuits

manager — Tue, 15 May 2012 14:56:37 +0000

Teaser

For more than a decade, companies that buy up patents and use them to sue deep-pocketed corporations for infringement have gone out of their way to plead their cases in the Eastern District of Texas. They'd be crazy not to. Judges and jurors who hear trials at the federal courthouses in Marshall and Tyler are considered the friendliest in the land when it comes to handing down big verdicts in favor of litigious patent holders.

Publication and Date

Bloomberg Businessweek, May 10, 2012

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By Susan Decker

For more than a decade, companies that buy up patents and use them to sue deep-pocketed corporations for infringement have gone out of their way to plead their cases in the Eastern District of Texas. They’d be crazy not to. Judges and jurors who hear trials at the federal courthouses in Marshall and Tyler are considered the friendliest in the land when it comes to handing down big verdicts in favor of litigious patent holders.

The Texas court, which tilts heavily toward protecting individual property rights, has done little to discourage patent owners who sue scores of companies at once in hopes that most will settle rather than shell out the $1 million or more it would take to fight it out in court. And many do settle: Only a sliver of patent cases make it to trial. The judges don’t seem to mind when plaintiffs whose businesses are based in faraway cities file in Texas for the purpose of increasing their chances of winning.

Plaintiffs have had an easy time in Texas because local lawyers and jurors liken patents to oil and gas rights, or fences around property, says Sam Baxter, a patent lawyer with McKool Smith in Marshall. Baxter represented Versata Software in its $345 million verdict last year against SAP (SAP), the 10th-largest patent award in U.S. history. “People here believe if you own something, you own it, and certain rights come with that,” he says.

Patent holders seeking a sympathetic judge and jury—and a big payday—have brought hundreds of infringement suits a year in East Texas. Twenty-five percent of the U.S. patent infringement cases filed in 2011 landed there; plaintiffs won nearly 75 percent of the time. The Eastern District has handed down many of the largest patent decisions against U.S. corporations, including a widely followed 2009 lawsuit in which I4i, a Canadian software company, won $200 million fromMicrosoft (MSFT) for infringing computer language used in Word.

Yet Texas may not be able to hang on to its status as the leading U.S. patent haven for much longer. Congress and the courts have begun to crack down on the proliferation of infringement cases brought by businesses that use their patents not to make products, but to extract money from those who do. The polite term of art for these companies is “nonpracticing entities.” Outside the courtroom, they’re called patent trolls.

A series of U.S. Supreme Court rulings has made it easier for defendants to challenge the validity of patents. And the U.S. Court of Appeals for the Federal Circuit, which handles patent appeals, has limited the amount a jury can award in cases when an infringed patent makes up only a small part of a product. The court is also making it easier for defendants to move a case out of Texas if it was brought there for no other reason than to benefit the plaintiff.

President Barack Obama threw an even bigger obstacle in front of lawsuit-happy patent owners when he signed the America Invents Act in September. It includes a provision that prohibits filing a single suit against dozens of unrelated companies. Instead, plaintiffs must file cases individually, making it more expensive to launch scattershot lawsuits in hopes of coercing quick settlements. “It’s more problematic to file a case here than it was three years ago,” says Baxter.

Problematic enough that the number of infringement suits filed in Texas is starting to shrink. Since September, more cases have been filed in Wilmington, Del., than in East Texas, according to an analysis co-authored by James Pistorino, a lawyer with Perkins Coie in Palo Alto, Calif. There were 484 suits in Delaware and 418 in Texas. Why Delaware? Like Texas, its court gets cases to trial quickly and blocks attempts by defendants to change jurisdictions. And since many U.S. companies are incorporated there, plaintiffs don’t have to go through Texas-style legal gymnastics to plausibly claim they should be allowed to sue in the state.

Another sign things may be changing in Texas: Patent holders have lost some big recent cases there. In March,United Continental Holdings (UAL) won a verdict in Tyler that invalidated patents for reserving seats online. The patents were deemed too obvious. A month earlier, a Tyler jury invalidated a patent challenged by companies including Google (GOOG) and Amazon.com (AMZN) over a way to make the Net more interactive. After years of losing in courts that see patents as private property to be protected, defense attorneys are turning that argument in their favor—persuading juries that people who launch overly broad patent suits are claiming ownership of property that isn’t rightfully theirs. “I heard about the statistical reputation that plaintiffs are far more successful” in Texas, says Catherine Lacavera, Google’s director of litigation. “But we’ve had a very good experience there.”

The bottom line: Federal courts are making it harder for patent holders to file infringement suits against companies in hopes of winning cash settlements.

Dem. Congressman calls attorneys who contacted him 'parasites'

manager — Tue, 15 May 2012 14:52:40 +0000

Teaser

At a House subcommittee hearing on legislation concerning asbestos bankruptcy trusts, U.S. Rep. Steve Cohen on Thursday referred to plaintiffs attorneys who contacted him about the illness of his friend as "parasites."

Publication and Date

Legal Newsline, May 11, 2012

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BY JOHN O'BRIEN

WASHINGTON (Legal Newsline) - At a House subcommittee hearing on legislation concerning asbestos bankruptcy trusts, U.S. Rep. Steve Cohen on Thursday referred to plaintiffs attorneys who contacted him about the illness of his friend as "parasites."

Cohen -- a Democrat from Tennessee and the ranking member of the House Judiciary Committee's Subcommittee on Courts, Commercial and Administrative law -- recounted the story of the death of his friend, singer/songwriter Warren Zevon, from mesothelioma.

Cohen called Zevon, perhaps best known for the song "Werewolves of London," one of his best friends.

"He did not seek a lawyer, didn't want damages," Cohen said. "I had a few parasites -- I'm an attorney -- but I had a few people call me and talk to me, quote-unquote friends.

"Friends, because they wanted to get to Warren to take his case. And Warren was good and didn't do it."

Despite his feelings about the attorneys who reached out to him about Zevon's illness, Cohen spoke out against the bill.

House Resolution 4369 would require bankruptcy trusts, which were created by companies that went bankrupt from asbestos litigation, to disclose claims and exposure allegations while providing third-party discovery in civil lawsuits.

The trust system operates independently of the tort system. More than 90 companies have gone through bankruptcy as a result of asbestos litigation, creating at least 60 trusts. Solvent companies facing asbestos lawsuits in civil court would be able to obtain information from plaintiffs' trust claims.

The legislation was introduced in April by two Republicans, Ben Quayle of Arizona and Dennis Ross of Florida, and Democrat Jim Matheson of Utah.

Cohen called the legislation "a solution looking for a problem." The same phrase was written in the statement of an asbestos attorney who testified and also appeared on the website of the American Association for Justice, the lobbying firm of plaintiffs lawyers that is against the bill, the night before the hearing.

The AAJ gave Cohen $5,000 for his 2012 re-election campaign.

Cohen graduated from the Cecil Humphreys School of Law at the University of Memphis and was a longtime state lawmaker before his election to the U.S. House of Representatives in 2006.

Charles Siegel of Dallas' Waters & Kraus testified against the bill. He calls it an attempt at delaying and denying compensation to asbestos victims.

"The assertion is that large amounts of money are recoverable from bankruptcy trusts, and that plaintiffs routinely game the system so that they receive a full recovery in the bankruptcy system, and then a second, 'double' recovery in the tort system," he said. "Neither premise is correct.

"There is no windfall of money available to claimants, and plaintiffs cannot and do not 'game the system' such that solvent tort defendants pay the liability shares of bankrupt companies."

Todd Brown, a professor at SUNY-Buffalo Law School, testified in support of the bill.

"As a matter of bankruptcy policy, the very idea that a bill intended to advance transparency would be in any way controversial is striking," Brown said.

"The need for comparable transparency in the asbestos bankruptcy trust context is compelling. As the assets under trust control approach $40 billion... other defendants, many of whom were peripheral defendants until recently, find themselves exposed to far greater defense costs and tort liability.

"Early trusts were flooded with specious unimpaired claims, and though state courts and legislatures have taken steps to reign in the perceived abuses in asbestos litigation, new trusts continue to be flooded with unanticipated claim volumes.

"We know that dubious claims continue to slip through the cracks, and the lack of communication between the trusts and state tort systems fuels concerns that some lawyers may be gaming the system to obtain unwarranted recoveries either in state court or from the trusts."

The legislation was introduced in April by two Republicans, Ben Quayle of Arizona and Dennis Ross of Florida, and Democrat Jim Matheson of Utah.

In April 2010, U.S. Rep. Lamar Smith, R-Texas, asked the Government Accountability Office to investigate the trust system. He pointed to an oft-cited 2007 instance in Ohio, where in Cuyahoga County the California law firm of Brayton Purcell claimed the late Harry Kanania died in 2000 of mesothelioma solely from smoking cigarettes made by Lorillard Tobacco, while simultaneously seeking compensation from multiple asbestos trusts, claiming their products led to Kanania's fatal lung condition.

The GAO released its report in October, finding no fraud in the system. It did note that the trusts operate in secrecy.

"Although the possibility exists that a claimant could file the same medical evidence and altered work histories with different trusts, each trust's focus is to ensure that each claim meets the criteria defined in its (trust rules), meaning the claimant has met the requisite medical and exposure histories to the satisfaction of the trustees," the report says.

"Of the trust officials that we interviewed that conducted audits, none indicated that these audits had identified cases of fraud."

At least two states have proposed similar trust reform. Ohio's senate heard testimony in March on a bill already passed by the House of Representatives, while Oklahoma's senate passed a bill on March 14.

The Oklahoma bill is currently sitting in the House Judiciary Committee.

The U.S. Chamber of Commerce Institute for Legal Reform supports the bill. The ILR owns Legal Newsline.

Chevron's Ecuador Morass

manager — Tue, 15 May 2012 14:48:00 +0000

Teaser

Chevron Corporation went to U.S. federal court in Miami on May 4 seeking the records of eight accounts at Banco Pichincha in Ecuador. The oil company maintains that these records could prove that an Ecuadorean geological engineer, who was hired by the court to be an independent expert in the case of Maria Aguinda y Otros vs. Chevron,was bribed by plaintiffs lawyers. Both the expert and the plaintiffs lawyers deny the charge.

Publication and Date

Wall Street Journal, May 13, 2012

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The U.S. oil company charges that the $18 billion judgment against it was secured by fraud.

Thus continues Chevron's long-running struggle against Ecuadorean jurisprudence.

Chevron bought Texaco in 2001. In 2003, 48 Ecuadoreans sued the company in Ecuadorean court, alleging that Texaco, which operated in Ecuador from 1972 through 1992, damaged public lands in the Amazon jungle. In February 2011, the court ruled in favor of the plaintiffs and assigned damages and penalties totaling a whopping $18.2 billion, including $8.6 billion in punitive damages because Chevron failed to apologize.

Of course it is possible that the $40 million that Texaco spent in a cleanup when it left Ecuador was inadequate, even though the government inspected it and in 1998 signed off on the remediation. But state-owned, environmentally challenged PetroEcuador, the company that assumed Texaco's Ecuador assets 20 years ago, now puts the cost of cleaning up its operations at $70 million. So naturally the sheer magnitude of the judgment invites scrutiny.

Chevron charges that the case was fraught with fraud, both on the part of plaintiffs lawyers and the Ecuadorean court. It has filed a RICO (racketeering) suit in the New York Southern District Court against the Amazon Defense Coalition (ADC)—a nongovernmental organization that advocates on behalf of the lawsuit—as well as the plaintiffs and some of the plaintiffs lawyers and consultants.

One of Chevron's allegations is that geological engineer Richard Cabrera, the court-appointed "independent" expert who would assess the rain forest damage, was working secretly for the plaintiffs lawyers. It cites outtakes from the ADC film "Crude" that show the two sides meeting together before his appointment and documents secured through discovery in U.S. courts to support that allegation. Chevron also claims that documents prepared by the plaintiffs lawyers became part of the Ecuadorean court's judgment, which it says casts doubt on the court's neutrality.

ADC spokeswoman Karen Hinton says that Mr. Cabrera's report contains identical language as a report prepared by the plaintiffs lawyers because their findings were the same, and that plaintiffs lawyers met with Mr. Cabrera "consistent with court rules." As to the plaintiff documents found in the court's judgment, Ms. Hinton argues that they were there legitimately because they "were submitted into the record."

Chevron has gone to U.S. federal court more than 20 times trying to show that fraud was committed by certain plaintiffs lawyers and their consultants and thereby obtain documents that it believes will demonstrate that the case was rigged. In nine instances U.S. courts have sharply criticized the Ecuadorean court proceedings.

In one instance, addressing Chevron's claim that the plaintiffs' representatives "ghostwrote" Mr. Cabrera's report, the U.S. District Court for the Western District of North Carolina observed that "While this court is unfamiliar with the practices of the Ecuadorian judicial system, the court must believe that the concept of fraud is universal, and that what has blatantly occurred in this matter would in fact be considered fraud by any court. If such conduct does not amount to fraud in a particular country, then that country has larger problems than an oil spill." Patton Boggs, which is acting on behalf of the plaintiffs, says the various courts' statements about fraud were "made in the narrow context of determining whether there was a basis for waiver of the attorney-client privilege based upon the crime-fraud exception"—in other words, to justify Chevron's getting access to the documents.

Chevron has also raised questions about who benefits from the huge judgment. The Ecuadorean court ordered that an ADC-established trust handle roughly $8.7 billion of the payout for environmental remediation, clean water, public health and community projects. It also ordered a 10% award for the ADC. But individual plaintiffs seem to get nothing, and the court's supervisory role over the trust in a country not famous for judicial integrity is hardly reassuring.

This leaves an amount roughly equal to the punitive damages of $8.6 billion unassigned. Chevron says that documents it has secured in discovery indicate that at the time of the judgment more than $5.7 billion of the payout was spoken for by interests outside the Indian community. They included Patton Boggs and the U.K.-based investor Burford Group, which does "litigation financing." Burford has admitted that it had invested $4 million in the case but sold its interest to a third party. It now only has a "residual interest in the outcome." Patton Boggs says it does not comment on fee arrangements with clients.

ADC spokeswoman Karen Hinton denies that outsiders are big winners. "The lion's share of the payment will go back into the rainforest and for the people," she insists. Perhaps a U.S. court can get to the bottom of it all.

Viewpoint: A new approach to medical liability

manager — Tue, 15 May 2012 14:42:19 +0000

Teaser

Ask any patient or physician who has been a party to a medical malpractice lawsuit about the experience and you'll likely hear negative responses from both sides: It was a long, emotional and stressful endeavor that disrupted personal and professional lives.

Publication and Date

MassLive.com, May 13, 2012

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By EVAN BENJAMIN
and ALAN WOODWARD

Ask any patient or physician who has been a party to a medical malpractice lawsuit about the experience and you’ll likely hear negative responses from both sides: It was a long, emotional and stressful endeavor that disrupted personal and professional lives.

The average malpractice lawsuit runs five to seven years - some go as long as 10 – entails thousands of hours of depositions and testimony. The dollar costs are high, as is the price paid in irreparable harm to physician-patient relationships.

Physician criticisms about the current process have long been loud and clear: It fosters unwarranted lawsuits, undermines patient safety, reduces access to care, creates a culture of silence between physicians and patients, and burdens doctors with high insurance premiums.

It also encourages defensive medicine – tests and procedures done solely to protect against potential lawsuits – thereby driving health costs higher.

A state medical society survey in 2008 found that defensive practices by physicians conservatively cost Massachusetts $1.4 billion annually. National surveys have estimated the costs at several hundred billion dollars. While doctors say the system is onerous and ill serves patients, physicians and our health care system, attorneys contend that fairness for patients should be paramount, that the rights of those harmed must be preserved in redressing treatment that doesn’t meet accepted standards of care.

We have no argument there: the rights of patients who have been harmed by unacceptable standards of care should indeed have redress. Yet the current liability system has many shortcomings. In fact, the current malpractice system has the exact opposite effect on what we are trying to achieve in the patient safety movement.

To improve patient safety we are trying to improve transparency and share information when there is a medical error so everyone can learn how to prevent such errors. The current malpractice system encourages providers to be silent and minimizes learning from error.

A different approach offers great potential: Disclosure, Apology and Offer. DA&O provides patients who have experienced harm what they seek: full disclosure of what happened and why and what will be done to prevent a recurrence; and for those events deemed avoidable, a sincere apology and a timely offer of compensation.

Such a process won’t deny patients the right to bring legal action, but would make tort claims a last resort.

Baystate Health pioneered an effort four years ago with our disclosure and apology initiative. It has achieved much success, in creating a culture of patient safety, with open disclosure and apology when medical errors occur.

Now, other healthcare systems in Massachusetts will join Baystate in formally piloting a full DA&O program in the Commonwealth. Led by the Massachusetts Medical Society, an alliance of seven health care organizations has released a Roadmap to Reform, whose goals are to improve patient safety, increase transparency and trust, reduce litigation, and cut costs to the health care system through the DA&O model.

This Roadmap, the result of a 2010 grant from the U.S. Agency for Healthcare Research and Quality, part of the president’s Patient Safety and Medical Liability Initiative, synthesizes the opinions of key representatives from eighteen different constituency groups, all with some relationship to the current liability system.

Joining Baystate Health in this initiative will be three hospitals from Beth Israel Deaconess Medical Center and the Massachusetts General Hospital. All seven, working with their liability insurers, will assess the DA&O model on patient safety, malpractice claims, and overall liability costs.

DA&O programs have proven successful as an alternative to the current tort system in other regions. We believe that patients and physicians will regard the model as fairer, timelier, and more supportive than the traditional response to adverse medical events.

The new model also has the potential to resolve cases faster, to enhance reporting of medical errors, and to reduce the practice of defensive medicine. It’s time to pursue a better way to serve patients and advance patient safety.

We believe the Roadmap and the DA&O model offer a better way. We invite all stakeholders - hospitals, attorneys, insurers, physicians, policymakers, and patients — to join us in improving a system long overdue for reform.

Dr. Evan Benjamin, is senior vice president for Healthcare Quality at Baystate Medical Center in Springfield and Dr. Alan Woodward, is a past president of the Massachusetts Medical Society and current Chair of its Committee on Professional Liability.

California Legislature Once Again Turns Back on Small Businesses, Defeats ADA Reform Legislation

manager — Fri, 11 May 2012 17:56:52 +0000

Teaser

On May 8, 2012, the California Assembly Judiciary Committee defeated A.B. 1878 (Beth Gaines-R) by a clean party-line vote of 3-7. This bill would have provided businesses much needed relief from frivolous ADA lawsuits. Under this legislation, businesses would have been granted 120 days to come into compliance with ADA regulations or create a plan to do so with a certified access specialist after receiving a written notification of a problem, before they could be sued.

Publication and Date

Judicial Hellholes, May 9, 2012

Body

As a recent article in the Auburn Journal discussed, over 40 California businesses showed up at the hearing to show their support, with 64 businesses in Auburn alone being sued for ADA compliance issues. It is clear that relief is needed, but yet the committee, and the legislature as a whole, is deaf to the community business people. Business owners support making every business accessible for disabled people, but lawsuits are not the way to achieve that end. As Hall pointed out, “The only way to get out of it for most folks is to pay up. It doesn’t do anything to make access better.”

Even more surprising is that this defeat comes in the wake of US Senator Dianne Feinstein’s recent letter urging California legislators to address the excessive amount of “predatory” disability lawsuits that are plaguing the state. As discussed in a previousHellholes posting, Feinstein is concerned about the “shakedown” tactics being used by plaintiffs’ attorneys when demanding monetary settlements from business owners. Feinstein made it very clear that if state legislators did not reach a resolution on their own, she was going to take matters into her own hands in the US Senate.

It appears as though, once again, California legislators are turning a blind eye to the problem, and are going to continue hurting the state economy by driving businesses out of California.