Published By: Maxwell S. Kennerly, Esquire

Tort Reform

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Equifax, which knows more about you than your own mother, (1) failed to maintain its servers, (2) was hacked and lost sensitive personal data for 143 million people, (3) concealed that fact for months, (4) blamed another company for the problem, then (5) finally admitted it caused the problem. To make matters worse, after the hack but before disclosing it, three executives sold off nearly $2 million in Equifax stock.

“What should I do to protect myself?” is a difficult question to answer. The Federal Trade Commission put up a page recommending checking your credit reports, placing a credit freeze, placing a fraud alert, and filing your taxes early so that a scammer doesn’t file them for you and obtain your tax refund. Brian Krebs has a much more thorough FAQ over here.

To call this situation “frustrating” would be an understatement. Virtually everyone with a credit history now bears the burden of making sure their own identity is safe due to Equifax’s negligence. People have already filed class-action lawsuits, and rightly so.
Continue Reading Equifax And The Long Legal Road In Data Breach Class Actions

This morning, MedPage Today — which should know better — began their “Morning Break” with this description and link:

An analysis of closed claim data from The Doctors Company suggests that physicians spend about 10% of their professional life dealing with malpractice claims, but most of those claims are closed with no money paid to the plaintiff.

Goodness! That sounds incredible. Turns out, it is incredible. In fact, it’s false.

The linked post by “The Doctors Company” at The Doctor Weighs In says:

The average physician spends over 10 percent of his or her career consumed in defense of an open malpractice claim. For the average neurosurgeon, that number is 25%—that’s a quarter of a career dealing with the intense emotional stress of defending your reputation and livelihood.

And the majority of those claims close with no payment to the plaintiff. That means the average U.S. physician in every specialty spends a significant portion of his or her career in court defending malpractice claims, but the overwhelming majority of those claims are found to be at best fruitless, and at worst frivolous.

These numbers come from a RAND Corporation objective analysis of the claims database of The Doctors Company, the nation’s largest physician-owned medical malpractice insurer. According to Richard E. Anderson, MD, FACP, chairman and CEO of The Doctors Company, these numbers show that our medical malpractice litigation system is broken—and must be fixed.

The only support given for any of these assertions is this YouTube video, where Dr. Anderson makes the same claims.

But there’s a problem: the RAND Corporation’s “objective analysis” never said anything like that.
Continue Reading The Doctors Company’s Dubious Medical Malpractice Statistics

The lawsuit brought by financier Amir Shenaq against mass-torts law firm AkinMears has made the rounds of the tort reform blogs (e.g., SETexas Record, Daniel Fisher at Forbes, and Paul Barrett at Bloomberg), so I figured some plaintiff-side commentary was in order. The details of the lawsuit confirm what I’ve been saying for years: “Mass torts is not an area in which you want to dabble and start throwing around discounts. It’s work, it’s risky, and it can be very, very expensive.”

In essence, a former hedge fund executive filed suit against the law firm claiming that he was hired to raise millions of dollars in funding so that the firm could acquire thousands of transvaginal mesh lawsuits. He alleges that he brought in the funding (through his connections in the finance world), but, once he did, the firm fired him.

Shenaq’s complaint was filed publicly then sealed by the court. As Forbes recounts, the Complaint alleges:

“AkinMears is not run like a traditional plaintiff’s law office, and the Firm’s lawyers do not do the types of things that regular trial lawyers do,” like meet clients, file pleadings and motions, attend depositions “or, heaven forbid, try a lawsuit,” Shenaq claims in his suit. “Despite the fact that AkinMears’ lawyers do not have to dirty their hands with the mundane chores that come with actually practicing law,” the firm charges a 40% contingency fee “which is then divided in some fashion among the participants in its ever-shifting syndicate.”

And, of course, there’s also an allegation about the plaintiff’s lawyers buying themselves an interest in a private jet.
Continue Reading The Lucrative Mass Torts Scam That Wasn’t

Over at Lowering the Bar, Kevin Underhill reports on a lawsuit filed against Lambert’s Cafe in Sikeston, Missouri, a place known as the “home of the throwed rolls.” It seems a roll was “throwed” and a patron was injured, suffering “a lacerated cornea with a vitreous detachment.” Ouch.

Underhill raises a lot of good points about the case, with case law to boot. Initially, there’s the question of whether the patron assumed the risk of being hit in the face with a roll. As Underhill says,

The Missouri Supreme Court [has] held that the question is whether the plaintiff was “injured by a risk that is an inherent part of [the activity].” … Obviously, the problem—and the reason that assumption-of-risk cases are so inconsistent—is defining “the activity.” … Here, is “the activity” eating dinner—in which case you generally don’t expect to have things thrown at your head (except maybe at Thanksgiving)—or is it “eating dinner at Lambert’s Cafe, the Home of Throwed Rolls,” in which case you’d be stupid not to expect it?

I think we need to know more facts to really assess the role of assumption of risk here.

When I initially read the story, I pictured the patron asking for a roll and then being hit in the face with it when she failed to catch it — but what if the patron was just sitting at her table eating and an errant roll came flying at her? What if it came from outside of her peripheral vision?

In other words, when you’re at the “home of the throwed rolls,” do you assume the risk of rolls flying at you from all directions at all times? That strikes me as a dubious argument, like saying that everyone at a Chinese restaurant assumes the risk of a flaming pupu platter spilling on them as it is carried to another table.

As Underhill also notes, even if the patron assumed the risk in some fashion, the restaurant can still be liable if its employees “negligently altered or increased the risk and that caused the injury.” Did the employee throw it at her like a fastball? Did the employee check to see if she was looking? Was it an unusually large roll, or was it steaming-hot right out of the oven, or in some other unusually dangerous condition? 
Continue Reading The “Home Of The Throwed Rolls” — A New Hot Coffee Case?

Tort reformer Ted Frank and I have had our disagreements over the years. (See here and here.) In recent years, he has focused his work on filing objections to class action settlements through the Center for Class Action Fairness. Some of his work has focused on getting a better deal for class action members who, he alleged, weren’t receiving fair portions of the proposed settlement, but the bulk of his objections — at least to my knowledge — have focused on reducing the attorney’s fees claimed by the class counsel.

 

As Alison Frankel reported yesterday, it seems that, in the course of his contingent-fee work on behalf of people objecting to class action settlements, Frank has found himself in a situation he himself describes as “lurid, complex and Grishamesque.” The situation seems to have arisen from his personal goals as a lawyer being different from one of his client’s goals, and from his fee-splitting relationship with another firm, the very same issues he so frequently raises in his objections.

 

It would seem like a perfect opportunity for schadenfreude, but, in fact, all I can feel for him is sympathy — and his misfortune in the In Re: Capital One Telephone Consumer Protection Act Litigation presents a tremendous opportunity for tort reformers, politicians, the press, and the public to see just how difficult class actions, mass tort, and other large-scale litigation can be. In that case, Frank filed an appeal on behalf of a class member objecting to the fee claimed by Lieff Cabraser, and then everything went south. 
Continue Reading Ted Frank And The Real Risk Of Class Actions

When I saw it, I had to double-check to see if it was a joke. The report said the Florida Bar  precluded a law firm from posting on its blog remarks like, “[the days] when we could trust big corporations … are over,” “Government regulation of … consumer safety has been lackadaisical at best,” and “when it comes to ‘tort reform’ there is a single winner: the insurance industry,” because such statements of opinion are not “objectively verifiable.” If that was the rule everywhere, then the ABA Journal’s list of top blawgs would be very dull indeed.

Could that report about the Florida Bar possibly be true? Two centuries ago Thomas Jefferson said “banking establishments are more dangerous than standing armies.” Less than a month ago Pope Francis decried how today “Human beings are themselves considered consumer goods to be used and then discarded.” But the lawyers who take on the banking establishments and hold corporations accountable for treating people like disposable goods can’t say the same?

Turns out the Florida Bar really did tell Searcy Denney Scarola Barnhart & Shipley PA that their blog violated that Bar’s most recent restrictions on attorney advertising because those statements of opinion were not “objectively verifiable.” Quite understandably, the firm has filed a First Amendment challenge to the restriction (complaint here). 
Continue Reading The Florida Bar Sued For Prohibiting Lawyers From Having Opinions

If you don’t think you can win fair and square, then change the rules. That’s been the modus operandi of the United States Chamber of Commerce (a private lobbying group with a misleading name) and the wealthy interests it represents, like the nation’s major insurance companies and product manufacturers. That’s why there’s been such a push for “tort reform” in the states over the past generation: because those same interests have realized that, in a fair court system, they will be held accountable for the full human and economic damage that they cause.

In the federal system, those wealthy interests have had such success in re-writing civil justice law in their favor — to those who doubt a slant in the Supreme Court, consider how the Chamber of Commerce wins every time, from Dukes to Behrend to Concepcion to Mensing to Barlett to Italian Colors — that they have moved on to re-writing federal civil procedure itself in their favor. This effort had its first big victory back with Twombly and Iqbal, which encouraged lower courts to start arbitrarily tossing out claims and cases on metaphysical grounds like whether an expert’s analysis was a “fact” or a “legal conclusion.”

Since then the effort to effectively grant civil immunity to a host of wealthy interests by way of supposedly neutral procedural changes has been gathering steam, culminating this year in proposed amendments to the Federal Rules of Civil Procedure by the Federal Judicial Conference’s Committee on Practice and Procedure. The two biggest issues relate to proposals (1) to preclude plaintiffs from obtaining evidence, including evidence held by defendants (back in June, I wrote about the “proportionality” changes) and (2) to give corporations a blank check to destroy evidence without any consequences. 
Continue Reading Judge Kozinski Vs. The Proposed Federal Civil Procedure Amendments

Late last week, when I heard that the U.S. House of Representatives passed the “Lawsuit Abuse Reduction Act,” a certain Mark Twain quote came to mind: “Suppose you were an idiot, and suppose you were a member of Congress; but I repeat myself.”

Currently, if a lawyer violates Federal Rule of Civil Procedure 11 (which prohibits, for example, filings presented for an improper purpose or which contain a false statement of fact), a Court may impose a sanction, including a monetary penalty. The “Lawsuit Abuse Reduction Act” would change that to require monetary sanctions whenever a Court finds Rule 11 was violated.

I discussed the same bill two years ago, noting that the bill would actually make litigation in federal courts more expensive for everyone involved, by encouraging lawyers on both sides to file endless sanctions motions against one another, as was the case for ten miserable years between 1983 and 1993 when a similar rule was in effect. I’m not alone in my views: as the Judicial Conference of the United States wrote earlier this year in opposition to the Act, the old rule “quickly became a tool of abuse in civil litigation” that absorbed money and time on “Rule 11 battles that had everything to do with strategic gamesmanship and little to do with underlying claims.” A whopping 91 percent of federal trial judges oppose the bill’s requirement for mandatory sanctions, hence the Judicial Conference’s opposition. The American Bar Association has opposed it as well.

The bill is unlikely to pass in the Senate, and, if it does, it will be vetoed by President Obama, but it nonetheless deserves close scrutiny because it reminds us of an important point about tort reform: big businesses and big insurance companies want the civil justice system to be more expensive, not less.
Continue Reading “Lawsuit Abuse Reduction Act” Aims To Make Litigation More Expensive

I’ve written extensively about medical malpractice myths, including posts about defensive medicine, the realities of malpractice litigation (in which it’s more likely that a negligent doctor will evade responsibility than it is that an undeserving patient will be compensated), and the tricks played to deny injured patients their legal rights, like concealing evidence and intimidating expert witnesses. Just last month I wrote about the hard data on malpractice lawsuits in Pennsylvania.

Why so much focus on malpractice law? Because it seems to be the area of plaintiffs’ litigation most heavily shrouded with myths and misunderstandings. Just last month, one of the New York Times’ bloggers, herself a medical doctor, began a column on the “disturbing” trend of doctors breaking the white coat code of silence by criticizing one another. She gave this example: a physician friend had been recently named in a lawsuit in which, they claim, “there were no discernible errors in the care she provided,” solely because a subsequent physician criticized the first physician, saying they were “shocked” by the care provided and that the patient “could have died.”

I could go on at length about how absurd that factual scenario was — a patient can’t file, much less win, a malpractice lawsuit with “no discernible error;” rather, the patient’s lawyer needs to prove malpractice by way of expert physician testimony — but there’s no need to do that. Just re-read that last paragraph: if the doctor-blogger and her friend really wanted to find the “discernible error,” they could have merely asked the second doctor why he or she was “shocked.”

Such is the low level of debate in the malpractice liability arena. A columnist or a doctor says something dumb, like asserting there’s “no discernible errors in the care” that the next doctor finds “shocking,” and patient advocates and plaintiff’s lawyers scramble to explain how the nitty-gritty of certificates of merits, damage caps, jury instructions, and the like make it impossible for cases to prevail unless they are “slam-dunk” cases with only the very worst outcomes for the patients.

Three stories from last week highlight many of the same issues I keep coming back to on this blog:
Continue Reading Medical Malpractice Accountability Plummets, While Malpractice Epidemic Continues Unabated

Three years ago, Professor Richard Epstein of the University of Chicago was peddling falsehoods and misconceptions about malpractice law that wouldn’t pass a 1L Torts class. Via Walter Olson, I see he’s back with a piece titled, “The Myth of a Pro-Business SCOTUS,” claiming “Commentators inaccurately condemn the five conservative justices as corporate shills.” He specifically mentions articles by Erwin Chemerinsky, Adam Liptak, Arthur Miller (whose article I discussed previously) and the recent analysis by Lee Epstein, William Landes, and Richard Posner.

Epstein raises three complaints about attacks on the Roberts Court: “selection bias; misplaced significance; and failure to account for the importance of consistently taking the ex ante perspective.”

Before we go on, be sure to read my summary of the Supreme Court’s 2012–2013 Term as it affected consumers, employees, and patients. “Business” — at least big business — won over Middle America at every turn. It’s not just a matter of individuals losing the only tools they have to keep the dangers of corporate greed and recklessness in check. Small businesses, for example, were told in American Express Co. v. Italian Colors Restaurant that they can’t use antitrust laws anymore, because the Supreme Court thinks its better for big banks to reap unjust and illegal profits than it is for small businesses to have their day in court.

Unsurprisingly, when Epstein reviews several recent Supreme Court cases, he leaves AmEx out. Kind of says it all, doesn’t it? 
Continue Reading The Undeniable Fact Of A Pro-Big-Business Supreme Court