The California Civil Justice Blog

Not Too Late to Add Civil Justice Reform to Health Care Proposal

Wed, 21 Oct 2009 10:00:41 -0800

Civil justice reform still has a place in the health care reform proposal, former House Speaker Newt Gingrich and Wayne Oliver, vice president of the Center for Health Transformation, wrote in a piece published today in Politico.

The authors wrote that "perhaps no other piece of health care reform is known to provide as much savings and fix the problem of defensive medicine, skyrocketing medical malpractice insurance premiums, and how those costs are passed along to the consumer."

They added that a recent report from the non-partisan Congressional Budget Office, which concluded that enacting such reforms could save up to $54 billion in the next decade, is just "a drop in the bucket in terms of savings if civil justice reforms were enacted."

Gingrich and Oliver also point to California as an example of a successful state-based civil justice reform solution.

"California passed civil justice reforms more than 30 years ago, and malpractice premiums in several specialties are now as much as 50% lower than those in states such as New York, Pennsylvania, and Florida," they wrote.

California's landmark law, the Medical Injury Compensation Reform Act, has ensured injured patients receive fair compensation while preserving their access to health care by keeping doctors, nurses, and health care providers in practice and hospitals and clinics open. For more information, go to www.micra.org.

Governor's Vetoes Protect Working Californians, Not Plaintiffs' Lawyers

Fri, 16 Oct 2009 09:35:29 -0800

Governor Arnold Schwarzenegger has vetoed 229 out of 707 bills that were sent to his desk -- including three bills opposed by CJAC that would have led to increased litigation.

In a news release, CJAC President John H. Sullivan applauded Schwarzenegger's vetoes: "Governor Schwarzenegger has made decisions that will benefit consumers and prevent litigation from needlessly draining away dollars from California's struggling economy."

The bills are:

• Assembly Bill 2 (De La Torre), which would have undercut a plan to protect consumers from unfair health coverage cancellations and driven more cases into the courts.
• Assembly Bill 335 (Fuentes), which would have limited California employers' use of mandatory choice of law and forum selection clauses in employment contracts. The bill was unnecessary because current law already protects California residents from unreasonable contract and choice of law provisions.
• Assembly Bill 793 (Jones), which could have harmed employers by undoing existing statutes of limitations on employment discrimination claims, fostering speculative and stale claims against employers.

Of AB 2, Sullivan said: "The Governor's veto of AB 2 in particular gives lawmakers the chance to work out a proposal that would allow the review process of health care insurance rescissions to be helpful and fair -- without benefitting plaintiffs' lawyers in the process."

The Governor in his veto message mentioned trial lawyers, writing that "this bill continues to have a provision that benefits trial lawyers rather than consumers."

For more information on the bills, click here.

In Case You Missed It: 'Rotten Bananas' Tells How Dole Food Lawyers Discovered a Fraud on the Court

Thu, 15 Oct 2009 07:27:43 -0800

Six months after a Los Angeles Superior Court judge unraveled a corrupt client recruitment scheme involving pesticide litigation, California Lawyer magazine has featured the plaintiffs' lawyer-engineered scam in the cover story of its October issue.

The article describes how two lawyers for one of the defendant companies, Dole Food Co., obtained crucial evidence that the lead plaintiffs' lawyer, Juan J. Dominguez, had coached a plaintiff in his office in Nicaragua and supervised the recruitment and coaching of many more sham plaintiffs.

Their work led to Judge Victoria Chaney's dismissal of the case in April, where she spoke in her ruling of recruiting captains grabbing "groups of men to make spurious claims that they are sterile," of sham lab reports, and of corrupt Nicaraguan judges awarding "judgments based on trumped-up allegations and facts."

She dismissed the plaintiffs' claims with prejudice, "preventing their ability to ever come back, at least in this court, and hopefully in any other court, and raise these claims again." She added, "I have serious, serious doubts about the bona fides of any plaintiff claiming to have been injured as a result of exposure to (the pesticide) DBCP while working on banana plantations. Because of all this, lesser sanctions are wholly inadequate."

Dominguez now faces civil charges of contempt of court. Chaney has asked the U.S. Department of Justice to open a criminal investigation and has also made a disciplinary complaint to the State Bar of California.

Our earlier blog posts took a closer look at a Wall Street Journal article, a Los Angeles Times article, a documentary based on the lawsuits (click here and here), and our original blog post about Judge Chaney's ruling.

Non-Partisan Congressional Budget Office: Legal Reforms Could Save $54 Billion

Wed, 14 Oct 2009 07:48:23 -0800

Care to save $54 billion? That's how much a new report from the non-partisan Congressional Budget Office estimates could be saved over the next decade by imposing new limits on medical malpractice lawsuits, according to news reports.

Requested by Sen. Orrin Hatch, the report found that significant changes to medical tort law could also reduce government spending on programs such as Medicare and Medicaid by $41 billion over 10 years and reduce budget deficits by $54 billion over that same time period, USA Today reported.

Douglas W. Elmendorf, director of the nonpartisan Congressional Budget Office, wrote that newly available research prompted CBO to update "its analysis of the effects of tort reform," according to The Washington Post. The agency's conclusion: A package of reforms that included a $250,000 cap on damages for pain and suffering and a $500,000 cap on punitive damages "would reduce total national health care spending by about 0.5 percent."

"A finding like this from the independent, expert, and credible Congressional Budget Office ought to end once and for all the bogus personal injury lawyer attacks against well-crafted laws establishing certainty and limits in medical liability," said CJAC President John H. Sullivan. "These laws can make it possible to direct huge amounts of money into taking care of people's health instead of feeding court battles and trial lawyer bank accounts." To read Elmendorf's letter to Sen. Hatch, click here.

Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform, said in a statement that "neglecting to include medical liability reform benefits only the plaintiffs' lawyers. Including it benefits every American participating in our health care system."

Plaintiffs' Lawyer Who Squandered Settlement in Stock Market Pleads Guilty

Wed, 07 Oct 2009 10:36:26 -0800

A former plaintiffs' attorney from southern California has agreed to plead guilty to federal criminal charges for squandering nearly all of a $2.7 million settlement he won for employees in a class-action lawsuit.

As we reported in our Balance newsletter earlier this year, Sandeep Baweja of the Baweja Law Group in Irvine voluntarily resigned from the State Bar after he invested the settlement funds into an Ameritrade brokerage account. The stock market took a dive, and the sum was whittled down to less than $55,000, according to the Daily Journal.

The case originally settled for $3.55 million. After subtracting court costs and attorney's fees -- Baweja earned $650,000 in attorney's fees -- about $2.7 million was left over to disperse among the class members.

A graduate of the Syracuse University College of Law, Baweja had been licensed to practice in California since 1998 and had no prior record of discipline. The Daily Journal's follow-up story on Friday noted that the attorney's "record of public service" included working as a field coordinator in Seattle for Al Gore's 2000 presidential campaign (subscription only).

Let's Hear What Doctors Have to Say

Tue, 06 Oct 2009 07:15:22 -0800

Shrugging off a recent failed legal challenge to California's Medical Injury Compensation Reform Act, an organization of lawyers formerly affiliated with the State Bar has passed a resolution calling for a change in MICRA's limits in certain cases.

But in the midst of intense public interest in the issue of health care availability, the personal injury lawyers' push to change MICRA has done nothing to show how such a change would benefit Californians.

In August, the California Supreme Court declined to review a lower-court ruling that fully backed MICRA. The state high court's action in Van Buren v. Evans showed that the justices found no novel issues in the Fifth District Court of Appeal's support for MICRA in the face of the personal injury lawyers' campaign to paint the 1975 legislation as constitutionally flawed. Then, in September, the Conference of Delegates of California Bar Associations (which is now funded by voluntary contributions, not state bar mandatory dues) voted to pursue an idea that MICRA's cap of $250,000 for non-economic damages in medical malpractice cases should be eliminated if a defendant rejects an offer to settle for that amount and then loses at trial or arbitration for more.

The personal injury lawyers' activity over the summer gave them a fresh opportunity to go before the media with their opposition to MICRA, which at times includes the mythical proposition that the law keeps people with meritorious cases from finding attorneys. In a well-reported TV segment that aired in the state capital, however, a Sacramento pediatrician clearly articulated the message that MICRA benefits all Californians by keeping medical professional liability costs down.

"MICRA stabilized that situation and provided a mechanism of compensating patients fairly, while still preserving access for patients to quality, affordable medical care," Dr. Paul Phinney said in the segment that aired August 10. Dr. Phinney is a physician with Kaiser Permanente and is active in the leadership of the California Medical Association.

Dr. Phinney explained the risks to patient care if the law were changed: "The more money that is pulled out of health care into the pockets of personal injury lawyers, the less money is available for health care."

Trial lawyers may pursue legal appeals and trade-association resolutions to voice their opposition to MICRA, but when plain-speaking doctors like Dr. Phinney get their chance to be heard, the public ends up the winner.

***

Gordon Ownby is general counsel of the Cooperative of American Physicians, Inc., www.cap-mpt.com, and can be reached at gownby@cap-mpt.com.

Governor Schwarzenegger's Trial Judges: A Look at Their Previous Jobs

Mon, 05 Oct 2009 15:27:54 -0800

By CJAC's latest count, 66% of Governor Arnold Schwarzenegger's Superior Court judicial appointments have come from government positions, primarily in district attorney's offices and from the rolls of court commissioners.

The CJAC data (largely from Governor's Office news releases) covers 399 Superior Court appointments from 2004 through September 15 of this year.

Thirty percent of the new trial court judges have come from private practice. John H. Sullivan, CJAC president, commended the Schwarzenegger administration for altering its appointment criteria to give more credit for legal experience that does not include courtroom time.

"Civil lawyers who have spent years on complex civil cases may be great judicial material, even though their time in court may total much less than a public prosecutor's," Sullivan said.

The second of two charts in the PDF below takes a closer look at the private practice source. It shows that law firms primarily involved in the defense of civil cases was the source of 24% of all appointees who had been in private practice. Other pre-appointment private practice areas include general law and business law (both at 17%), and personal injury/workers compensation (10%).

Governor Schwarzenegger Superior Court Appointments.pdf

Deja Vu? Another Suit Over Froot-Less Cereal

Fri, 02 Oct 2009 07:24:22 -0800

Disgruntled cereal-eater Roy Werbel has filed a lawsuit in San Francisco federal court alleging that he bought and ate boxes of Froot Loops cereal based on his mistaken belief that the cereal contained fruit.

As reported in San Francisco Weekly, Werbel has also filed a similar suit against the maker of Cap'n Crunch with Crunchberries. He seeks to certify both suits as class actions.

Sound familiar? It should. We reported on the CJAC Blog in June of a U.S. District Court judge's dismissal of another California lawsuit filed by a woman who said she had purchased the Cap'n Crunch cereal because she believed the crunchberries contained real fruit.

For more information on the suits, go to this Above the Law blog post.

CJAC-Opposed Federal BPA-Ban Bill Would Lead to More Lawsuits

Thu, 01 Oct 2009 07:15:52 -0800

The Civil Justice Association of California has asked Senator Dianne Feinstein to withdraw S. 593, the "Ban Poisonous Additives Act of 2009." This bill would ban the use of Bisphenol A in food and beverage containers, and for other purposes.

In a letter to Senator Feinstein, CJAC explains its opposition to the bill. "In this BPA matter, it is both bad health policy and bad legal policy to enact a ban that will give lawyers a powerful excuse to sue manufacturers and suppliers when little or no evidence of the harm and causation required to sustain a legitimate lawsuit exists," wrote CJAC President John H. Sullivan. "Restraint here is especially important when the product involved has a long history of protecting public health."

Banning a safe product (BPA has been approved by the Food and Drug Administration and the European Food Safety Agency) would very likely lead to unnecessary lawsuits. The makers of silicone breast implants, for example, dealt with only 150 lawsuits in the 30 years prior to an FDA ban. This number increased to more than 5,000 per year in each of the four years following the ban. The implants were ultimately determined to be safe -- but not before the company that made them went bankrupt as a result of the lawsuits.

Federal class action lawsuits -- almost half of which originated in California -- have already been filed against manufacturers of products containing BPA despite the fact that the alleged science against BPA is weak. In a press release of a subcommittee report on BPA, the FDA said: "Consumers should know that, based on all available evidence, the present consensus among regulatory agencies in the United States, Canada, Europe, and Japan is that current levels of exposure to BPA through food packaging do not pose an immediate health risk to the general population, including infants and babies."

A bill similar to S. 593 was introduced in California this legislative session. That bill, SB 797 (Pavley), failed passage -- as did another similar bill last year, SB 1713 (Migden). As the California legislature -- in failing to enact its own ban -- has demonstrated, scientists rather than lawmakers should determine which chemicals are safe.

No Need to Reinvent the Wheel: States' Results Show Medical Malpractice Reform Works

Tue, 29 Sep 2009 08:20:52 -0800

President Barack Obama has pledged to consider civil justice reform as part of national health care reform, but he doesn't need to reinvent the wheel. In a commentary in The Kansas City Star, Newt Gingrich and Wayne Oliver note that several states have tested civil justice reform ideas for years, with impressive results: Civil justice reform measures have improved access to care, reduced costs, and strengthened those states' economies.

The authors name California's landmark medical malpractice compensation reform law as an example of legislation that ensures injured patients receive fair compensation while preserving their access to health care by keeping doctors, nurses, and health care providers in practice and hospitals and clinics open.

For more than 30 years, the Medical Injury Compensation Reform Act "has saved health care consumers tens of billions of dollars," they wrote, citing Californians Allied for Patient Protection.

In contrast, states without liability reform continue to suffer shortages of providers, leading to the closing of hospitals, clinics, and trauma centers, leaving patients with no doctors in their immediate vicinity.

Gingrich and Oliver conclude:

"We don't need to 'study' what works. Those studies have already been written. We don't need demonstration projects. We can already see the results of civil justice reform. Instead, we need real solutions and those solutions exist. Serious health care reform must include civil justice reform."

Who Benefits From Lawyer-Driven Suits Over Dannon Yogurt? Do You Have to Ask?

Mon, 28 Sep 2009 13:32:15 -0800

"It's understandable that it could make economic sense for a defendant to settle a series of class actions after years of litigation. But this settlement's so-called 'equitable' relief involving the defendant's advertising and labeling makes it crystal clear that these lawsuits were not based on any real fraud at all," writes J. Russell Jackson on his Consumer Class Actions & Mass Torts blog.

Jackson writes about a $35 million settlement filed by Dannon in federal court in response to class actions over its advertising of the health benefits of some of its yogurt products (a California suit was filed in January). The class members may receive $15 to $100 depending on whether they can provide proof of purchase. The attorneys indicate in the settlement agreement that they want $10 million -- plus expenses.

However, as Jackson points out, the statements made by Dannon and challenged in the lawsuits were not false. "The settlement allows Dannon to say practically the same thing it always has said," he wrote. "The lawsuits obviously were lawyer-invented, and although they may have survived some motions to dismiss, the settlement's equitable relief demonstrates that the defendant's statements were backed up by real science."

He concludes:

"Is this another instance of regulation by litigation in which the only ones who really benefit are class counsel, who seek to take more than $10 million of the settlement fund in fees and expenses?"

In Case You Missed It: It's Time for National Tort Reform

Tue, 22 Sep 2009 10:15:19 -0800

Tort reform works, former Missouri Governor Matt Blunt wrote in an op-ed in today's Wall Street Journal. By passing reforms, including capping noneconomic damages in medical malpractice cases and cracking down on "venue shopping," Missouri's economy has improved and medical malpractice claims are now at a 30-year low. The state's experience, Blunt wrote, shows that "the time to get behind national tort reform is now."

When Blunt took office in January 2005, runaway lawsuits were driving up the cost of doing business in Missouri and forcing doctors and other business owners to close their doors. In its annual ranking of states according to their legal environment, the U.S. Chamber Institute for Legal Reform ranked Missouri among the 10 worst.

Since then, Missouri has moved up to 31st on the list.

California, however, hasn't made such gains on the annual list. California's legal environment remains mired in the bottom ten states, last year coming in 44th, in part due to a lack of venue requirements and its treatment of class action lawsuits.

However, California's landmark legislation, the Medical Injury Compensation Reform Act of 1975, has stabilized medical malpractice insurance costs, assured public access to physicians and hospitals, and secured a fair legal procedure for plaintiffs to adjudicate their claims. More blog posts on MICRA can be found here and more information is available here.

The key component of MICRA is a $250,000 limit on non-economic damages awarded in a medical professional liability trial or arbitration.

'The Naming Game': Paper Looks at Asbestos Claims in Alameda County

Tue, 22 Sep 2009 10:04:13 -0800

A new study focusing on asbestos litigation in northern California's Alameda County found that the number of defendants named in a typical complaint doubled from fewer than 30 in the 1990s to more than 60 between 2003 and 2006.

The reason, the authors found, was that as major defendants declared bankruptcy in early 2000, plaintiffs' attorneys pulled new defendants into the suits and began to name the remaining solvent defendants twice as often.

The paper, written by Charles E. Bates, Charles L. Mullin, and A. Rachel Marquardt of Bates White in Washington, D.C., and published in Mealey's Litigation Report, also examines how the emergence of trust funds has and will continue to change total recoveries for mesothelioma plaintiffs. (To purchase a copy of the report, go here.)

The authors used a sample of about 800 mesothelioma complaints filed after 1990 in Alameda County, which, they wrote, "has been one of the established venues for asbestos litigation" since the 1970s. They found that after the bankruptcy wave, the number of defendants named in complaints increased. However, since 2006, the number of defendants listed has declined, more recently to about 40 per complaint -- which makes sense, the authors explain, because plaintiffs were getting dismissed without payment on a much larger share of the defendants they named from 2003 to 2006 than they did in the 1990s.

The authors wrote:

"In fact, the rise in the number of defendants listed in a complaint corresponded to an increase in the number of dismissals. ... [More than] 70% of all post-2002 complaints against individual defendants were dismissed without payment. The dismissal rate is highest for new defendants -- companies that have been named as defendants in Alameda County in more recent years but that historically were not part of the asbestos tort environment. As the number of established, solvent defendants listed in a typical mesothelioma complaint doubled from the pre- to post-bankruptcy period, so did the dismissal rate for this group of defendants."

Burning Man Lawsuit Finally Extinguished

Fri, 18 Sep 2009 08:40:44 -0800

The California Supreme Court has thrown cold water on a case brought by a Los Angeles man who was injured at the annual Burning Man festival in Nevada's Black Rock Desert.

This week, the Supreme Court justices voted unanimously to deny review of an appeal by Anthony Beninati, as laid out by San Francisco Chronicle reporter Bob Egelko.

As reported in our earlier blog post, Beninati sued Black Rock City LLC (the Burning Man enterprise) for his own burns suffered when he stumbled and fell into the Burning Man's ashes while trying to ignite a photo of a late friend.

The First District Court of Appeal in San Francisco upheld a trial court's dismissal of the case, noting that anyone who takes part in an event with obvious dangers -- downhill skiing, mountain climbing, or walking up to a bonfire -- knowingly risks injury. (Read the ruling on our blog by clicking here.)

Medical Malpractice Ads Seeking Plaintiffs Saturate Televisions Stations

Wed, 16 Sep 2009 13:30:26 -0800

Television advertisements soliciting plaintiffs for medical malpractice lawsuits have increased nearly 1,400% in the past four years, a new study from the U.S. Chamber Institute for Legal Reform has found.

The number of ads increased to more than 156,000 ads in 2008 from 10,150 ads in 2004. The study, conducted by the Campaign Media Analysis Group, also showed that spending for the ads spiked to almost $62 million from $3.8 million.

President Lisa Rickard said the finding is a window into what appears to be the growing role of medical malpractice cases in the overall litigation landscape.

"Lawsuits are ultimately a business driven by the plaintiffs' bar, and when you see the marketing of medical malpractice lawsuits exploding like this, it tells you that these lawsuits are a growing sector within the larger lawsuit industry," she said.

A closer look at the findings shows that medical malpractice advertising peaked in 2006, airing nearly 180,000 times in national television and cable markets.

Areas most saturated with such ads in 2008 included Baltimore (12,000 ads), New York (10,000), and Orlando (8,000).