It appears that some individuals and families injured by defects in the 74 million GM vehicles currently on the road will be able to pursue their claims against GM after it emerges from bankruptcy, reports the New York Times. Since the Chrysler bankruptcy--which reached the opposite result--the issue has been a serious concern to states attorneys general, victims of defective GM products, and consumer groups.
In Chapter 11 bankruptcy, a company is able to discharge its debts to permit reorganization. When such a filing is necessary, a company is generally teetering on the edge of financial ruin, and owes several entities and individuals money--these are its creditors. Among the creditors of a bankrupt automobile manufacturer are individuals and families injured by the manufacturer's products, because each likely has the right to compensation for personal injury or wrongful death.
There is much gray area in the law in determining how and if the claims of injury and death can be pursued against a company after Chapter 11 reorganization. In the Chrysler bankruptcy, the court decided to discharge all debt created by vehicles sold before the company re-emerged from bankruptcy. This means that for any injury caused by a Chrysler vehicle sold before June 10, 2009 (the closing date of the bankruptcy proceeding), the plaintiff must sue the old Chrysler company (now called "Old CarCo."). The obvious problem is that this the same company that collapsed financially, making any monetary recovery unlikely.
With the GM bankruptcy, the parties will recommend to the court that it partially keep the new GM financially responsible for the 74 million vehicles built by its pre-bankruptcy predecessor. I say "partial" because those plaintiffs with prior injuries who have already filed their lawsuit will likely be forced to pursue their claim against the old, financially ruined GM. Fortunately, individuals and familes who suffer future injuries caused by old GM vehicles will still be able to seek compensation from the new GM entity.
Sunday, June 28, 2009
Friday, June 26, 2009
June Safety Alerts: U.S. Consumer Product Safety Commission
It’s hard to imagine that there could be any danger in simply brewing a cup of coffee in the morning, while wearing your favorite Chenille Robe, with your adorable pajama-garbed toddler nearby.
But if you are grinding the beans with a Starbucks’ Barista® Blade Grinder or a Seattle’s Best® Coffee Blade Grinder, or brewing the coffee with a Black & Decker® Spacemaker Coffeemaker, you may receive serious lacerations or scaldings, according to the U.S. Consumer Product Safety Commission.
And if you are wearing one of Blair’s popular chenille robes, or if your child is wearing loungewear by Warm Biscuit (the name’s irony does not escape us), you may both be highly flammable, and at risk of fatal burns.
This month, the U.S. Consumer Product Safety Commission reported six fatal burnings related to the use of Blair Chenille Robes. Likewise, Warm Biscuit children's loungewear falls short of the federal standards requiring children’s sleepwear garments to be snug-fitting or flame resistant.
This month, the U.S. Consumer Product Safety Commission reported six fatal burnings related to the use of Blair Chenille Robes. Likewise, Warm Biscuit children's loungewear falls short of the federal standards requiring children’s sleepwear garments to be snug-fitting or flame resistant.
The Black & Decker Spacemaker Coffeemaker is prone to incidents of overflowing, scalding-hot water, and the coffee grinders’ blades may start spinning on their own.
The companies have each issued product recalls and safety warnings for each of these products, but it is critical that the word gets out, so that consumers do not continue using these defective products.
Additional information about defective products, and how to bring a lawsuit if you have been injured by one, is available from the Walkup Law Office product liability lawyers here.
Wednesday, June 17, 2009
FDA: Don't use Zicam; Zicam: Just trust us
This is a frightening one. Remember when Zicam came onto the market, and promised it could do the impossible? It claimed it could shorten the length of the common cold. Trusting Zicam, I have used the product on at least a few occasions in the past 2 or 3 years.
The New York Times is reporting today that the FDA now believes the use of Zicam's nasal swabs and gel can result in anosmia, which is the loss of the sense of smell. The FDA has received more than 130 reports of anosmia after using the prodcucts, often after only one dose.
Matrixx, Inc., an Arizona corporation, initially decided to market the Zicam line of products as homeopathic agents. This permitted it to sell the product without prior FDA approval. Selling the product as homeopathic has been lucrative for Matrixx. In 2008, for instance, it had $40m in sales of Zicam, and a total of $101m in sales from its full lineup of products.
The product's tendency to destroy the sense of smell has also led to many lawsuits, which Matrixx has seen fit to settle. In 2006, Matrixx paid $12m in 340 settlements in which Zicam customers reported that the product ruined their ability to smell.
As the Times reports, the FDA actually lacks the ability to force a recall of Zicam. In a warning letter it sent yesterday to Matrixx, the FDA asked that Matrixx "take corrective actions" within 15 days. Those corrective actions would be to recall the product. Matrixx's response was that it
This despite the FDA's explicit conclusion, and the mounting numbers of people losing their sense of smell.
[S]tands behind the science of its products and its belief that there is no causal link between its intranasal gel products and anosmia.
The legal implications of the FDA's request for a recall and Matrixx's stonewalling response are interesting. In a medical products liability lawsuit, California law permits several causes of action. Among them, the plaintiff often must show that the defendant knew (or should have known) that its products were dangerous. This is called "notice," and the plaintiff usually proves it by pointing to the complaints the company previously received about its product.
With Zicam, however, it appears that the argument is much stronger: the FDA clearly warned Matrixx that its product was dangerous, and Matrixx explicitly decided not to take it off the market.
Monday, June 15, 2009
Walkup Case Brings Police and District Attorney Misconduct to Light
On June 8, 2009, the Recorder, one of San Francisco's legal newspapers, featured this story about one of Walkup partner Matthew Davis' current cases.
The case involves a man who was accused of raping his mentally challenged neighbor. An eighteen-year San Jose Police veteran created a false lab report that he planned to use while interrogating our client. He put the false report into his file and testified that its contents were true at our client's preliminary hearing. The criminal case was dismissed after the lab indicated that the report was false in responding to a discovery request.
The Recorder quoted Matt's statement: "It's a case of tunnel vision...The law enforcement team, including the prosecutor and the cop, convinced themselves that [our client] was guilty and...cut constitutional corners to prove it."
The case comes on the heals of Walker v. Santa Clara, a recent $2.75 million settlement that Matt and Walkup partner Rich Schoenberger obtained on behalf of Ricky Walker a man who spent 12 years in prison after being wrongfully convicted in 1991 of being an accomplice to a gruesome murder. In Mr. Walker's case sheriff deputies neglected to turn over evidence that showed Mr. Walker's innocence.
The case involves a man who was accused of raping his mentally challenged neighbor. An eighteen-year San Jose Police veteran created a false lab report that he planned to use while interrogating our client. He put the false report into his file and testified that its contents were true at our client's preliminary hearing. The criminal case was dismissed after the lab indicated that the report was false in responding to a discovery request.
The Recorder quoted Matt's statement: "It's a case of tunnel vision...The law enforcement team, including the prosecutor and the cop, convinced themselves that [our client] was guilty and...cut constitutional corners to prove it."
The case comes on the heals of Walker v. Santa Clara, a recent $2.75 million settlement that Matt and Walkup partner Rich Schoenberger obtained on behalf of Ricky Walker a man who spent 12 years in prison after being wrongfully convicted in 1991 of being an accomplice to a gruesome murder. In Mr. Walker's case sheriff deputies neglected to turn over evidence that showed Mr. Walker's innocence.
When Will Appellate Courts Stop Avoiding What Is Right For Medical Malpractice Victims?
[The following is an article written by Michael Kelly, one of the partners at our firm. The issues of California medical malpractice law and, in particular, "MICRA" are issues Mike has written about at length. Last year, a piece he wrote was published in the Daily Journal.]
On May 12, 2009, the 5th District Court of Appeal heard oral arguments in the most recent challenge to California’s unfair and antiquated 34 year-old cap on pain and suffering damages in medical malpractice cases in Van Buren v.
Evans, FO54227. Less than 4 weeks later, in an unpublished opinion, it upheld the validity of the antiquated, repressive and unconstitutional scheme.
Counsel for the injured victim, Robert Peck, of the Center for Constitutional Litigation (CCL) in Washington, D.C., asked that the three-justice panel to strike down the 34 year old artificial restriction on the common law rights of negligence victims, contending it violates the right to a jury trial and equal protection.
Correctly pointing out that whatever “crisis” may have existed in the mid-1970s when the Legislature approved the Medical Injury Compensation Reform Act has long since passed, Plaintiff James Van Buren asked the appellate panel to restore the full measure of damages awarded him by a Merced County jury.
The case began when Van Buren was diagnosed with a perianal abscess. During surgery his doctor severed a muscle, causing him to suffer permanent fecal incontinence. A Merced jury in July 2007, finding in accord with the evidence and applicable CACI jury instructions, determined his damages for a lifetime of incontinence to be $2,500,000. As is in all medical negligence trials, the jury was not told of the special immunity from full damages accorded the medical provider. Instead, it was told to fairly apply the law – which it did.
There was no argument on appeal that the jury had done anything wrong – just the opposite: everyone agreed it correctly determined the value to be placed on the harm suffered by Van Buren.
Overruling the jury’s finding, The Superior Court trial judge reduced the award to $250,000, as mandated by MICRA, which was signed into law by Governor Jerry Brown in 1975.
Mr. Van Buren is just one of the thousands of individuals who have been victimized by MICRA’s unfair restrictions over the last thirty four years. The most recent study conducted by the Rand Institute, examining data from actual medical malpractice trials, concluded that medical defendants’ liability, as fixed by jurors conforming to the law and evidence, is reduced in almost one-half of the medical negligence cases tried in California courts.
For three decades malpractice insurance companies have misled the public by arguing that medical malpractice cases are responsible for skyrocketing health care costs and are driving qualified doctors out of California. In fact, studies show that less than 1% of all healthcare costs are attributable to legal costs and there is no difference between capped and non-capped states in the ratio of physicians to populations.
Will any California court look past the political clout of the medical community and do what is right? It is distressing that the 5th District court failed to overturn these laws, giving back full and equal rights to victims of medical malpractice.
There is no present justification for letting medical malpractice insurers use California medical consumers as the underwriting base for policies written outside of California in “non-capped” states. Protection of insurance company profits cannot support a system that tells a parent if his or her child is struck by a physician driving a car they are entitled to full compensation, but if killed through the negligence of the same physician in the operating room they are only entitled to a fraction of what they are owed.
The California Medical Association has successfully argued for almost 35 years that any alteration or increase in the damage cap would bring about “collapse” of the health care delivery system. Such threats become more hollow with each passing year as objective data continues to verify that insurance costs make up less than 1% of California’s total health care expenditures.
A system that penalizes most--those who are hurt the most severely--cannot possibly pass constitutional muster under the equal protection or due process clauses. The MICRA damage limit has never risen. The $250,000 limit established in 1975 is now worth less than 60,000 in 2009 dollars. With so little protection for injured patients, it is no wonder that California ranks in the bottom ten states in the union in patient safety.
On May 12, 2009, the 5th District Court of Appeal heard oral arguments in the most recent challenge to California’s unfair and antiquated 34 year-old cap on pain and suffering damages in medical malpractice cases in Van Buren v.
Evans, FO54227. Less than 4 weeks later, in an unpublished opinion, it upheld the validity of the antiquated, repressive and unconstitutional scheme.Counsel for the injured victim, Robert Peck, of the Center for Constitutional Litigation (CCL) in Washington, D.C., asked that the three-justice panel to strike down the 34 year old artificial restriction on the common law rights of negligence victims, contending it violates the right to a jury trial and equal protection.
Correctly pointing out that whatever “crisis” may have existed in the mid-1970s when the Legislature approved the Medical Injury Compensation Reform Act has long since passed, Plaintiff James Van Buren asked the appellate panel to restore the full measure of damages awarded him by a Merced County jury.
The case began when Van Buren was diagnosed with a perianal abscess. During surgery his doctor severed a muscle, causing him to suffer permanent fecal incontinence. A Merced jury in July 2007, finding in accord with the evidence and applicable CACI jury instructions, determined his damages for a lifetime of incontinence to be $2,500,000. As is in all medical negligence trials, the jury was not told of the special immunity from full damages accorded the medical provider. Instead, it was told to fairly apply the law – which it did.
There was no argument on appeal that the jury had done anything wrong – just the opposite: everyone agreed it correctly determined the value to be placed on the harm suffered by Van Buren.
Overruling the jury’s finding, The Superior Court trial judge reduced the award to $250,000, as mandated by MICRA, which was signed into law by Governor Jerry Brown in 1975.
Mr. Van Buren is just one of the thousands of individuals who have been victimized by MICRA’s unfair restrictions over the last thirty four years. The most recent study conducted by the Rand Institute, examining data from actual medical malpractice trials, concluded that medical defendants’ liability, as fixed by jurors conforming to the law and evidence, is reduced in almost one-half of the medical negligence cases tried in California courts.
For three decades malpractice insurance companies have misled the public by arguing that medical malpractice cases are responsible for skyrocketing health care costs and are driving qualified doctors out of California. In fact, studies show that less than 1% of all healthcare costs are attributable to legal costs and there is no difference between capped and non-capped states in the ratio of physicians to populations.
Will any California court look past the political clout of the medical community and do what is right? It is distressing that the 5th District court failed to overturn these laws, giving back full and equal rights to victims of medical malpractice.
There is no present justification for letting medical malpractice insurers use California medical consumers as the underwriting base for policies written outside of California in “non-capped” states. Protection of insurance company profits cannot support a system that tells a parent if his or her child is struck by a physician driving a car they are entitled to full compensation, but if killed through the negligence of the same physician in the operating room they are only entitled to a fraction of what they are owed.
The California Medical Association has successfully argued for almost 35 years that any alteration or increase in the damage cap would bring about “collapse” of the health care delivery system. Such threats become more hollow with each passing year as objective data continues to verify that insurance costs make up less than 1% of California’s total health care expenditures.
A system that penalizes most--those who are hurt the most severely--cannot possibly pass constitutional muster under the equal protection or due process clauses. The MICRA damage limit has never risen. The $250,000 limit established in 1975 is now worth less than 60,000 in 2009 dollars. With so little protection for injured patients, it is no wonder that California ranks in the bottom ten states in the union in patient safety.
Thursday, June 4, 2009
Insurance Companies Seek to Redefine “Fairness”
Most consumers are unaware that their insurance premiums are being used, in part, to fund technologies like Colossus and ISO Claims Outcome Advisor. These technologies spit out a number to describe the "worth" of a person’s insurance claim, based on an adjustor’s description of the accident and injuries, and based on historical payments for similar claims.
Colossus claims that it can “minimize payout variance on similar bodily injury claims.” ISO states that “linking likely treatments to injuries helps . . . identify unnecessary treatments.” In other words, these technologies encourage insurance companies to deny compensation for valid injuries whenever those injuries do not fit a specified mold. Insurance companies sometimes treat these automated numbers as more important than the opinions of physicians and other persons with relevant expertise.
Colossus tries to explain that its goal is to “increase fairness to all customers.” To many of us, fairness means “if you break it, you fix it” and “if you promise to pay, you pay.” But to Colossus, fairness apparently means something like: “if you break it, you consult your electronic database, which will spit out a number that may or may not fix it.”
Here at Walkup, we know that injured people have to face their individual realities: future surgeries, disability, decades of pain and frustration. Insurance companies, who have been happily accepting payments over the years, should look at the same realities. Their “one size fits all” fiction does not generate fair results.
In recent years, these problems have deepened. Thirteen of the top twenty U.S. Property and Casualty insurers use Colossus. But ISO’s growth has been even more staggering. In early 2009, ISO reported that its database had accumulated more than 600 million industry claims, with more than 200,000 new claim reports every day. As of January 2007, 95% of the insurance industry used ISO for day-to-day claims handling. ISO connected its Claims Outcome Advisor ™ product to its ISO ClaimSearch® product, which has extensive private data from law enforcement agencies and insurance companies - accumulated over the years for the ostensible purpose of fighting fraud.
A prince never lacks legitimate reasons to break his promise - Machiavelli
Colossus claims that it can “minimize payout variance on similar bodily injury claims.” ISO states that “linking likely treatments to injuries helps . . . identify unnecessary treatments.” In other words, these technologies encourage insurance companies to deny compensation for valid injuries whenever those injuries do not fit a specified mold. Insurance companies sometimes treat these automated numbers as more important than the opinions of physicians and other persons with relevant expertise.
Colossus tries to explain that its goal is to “increase fairness to all customers.” To many of us, fairness means “if you break it, you fix it” and “if you promise to pay, you pay.” But to Colossus, fairness apparently means something like: “if you break it, you consult your electronic database, which will spit out a number that may or may not fix it.”
Here at Walkup, we know that injured people have to face their individual realities: future surgeries, disability, decades of pain and frustration. Insurance companies, who have been happily accepting payments over the years, should look at the same realities. Their “one size fits all” fiction does not generate fair results.
In recent years, these problems have deepened. Thirteen of the top twenty U.S. Property and Casualty insurers use Colossus. But ISO’s growth has been even more staggering. In early 2009, ISO reported that its database had accumulated more than 600 million industry claims, with more than 200,000 new claim reports every day. As of January 2007, 95% of the insurance industry used ISO for day-to-day claims handling. ISO connected its Claims Outcome Advisor ™ product to its ISO ClaimSearch® product, which has extensive private data from law enforcement agencies and insurance companies - accumulated over the years for the ostensible purpose of fighting fraud.
A prince never lacks legitimate reasons to break his promise - Machiavelli
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