Unable to obtain malpractice-suit reform in the face of the strength of the trial lawyer lobby in Harrisburg, organized Pennsylvania doctors agreed to a deal in which $440 million of state taxpayers’ money over two years would be used to subsidize their skyrocketing insurance bills (see Jul. 23). But there turns out to be a great big string attached: to get the subsidy, the doctors have to sign a pledge requiring them to go on practicing in the state of Pennsylvania. Some are calling it “indentured servitude”. (Michael Hinkelman, “Malpractice relief comes with conditions”, Philadelphia Daily News, Jan. 7).
Archive for January, 2004
Update: Lodi
In the Lodi groundwater cleanup case we discussed last week (Jan. 12), the Lodi City Council voted 3-2 to fire the attorneys responsible for the litigation strategy. The “legal saga has grown to include more than 100 parties involving more than a half dozen different courts.” (Layla Bohm, “City Council faces tough legal decisions in pollution case”, Lodi News-Sentinel, Jan. 17; Layla Bohm, “Lodi’s days in court are far from over”, Jan. 16; Layla Bohm, “Judge postpones Lodi pollution trial”, Lodi News-Sentinel, Jan. 15; Jennifer Pearson Bonnett, “Questions linger in wake of Hays, Donovan firing”, Lodi News-Sentinel, Jan. 15; Chris Bowman, “Strategy weak, judge tells Lodi”, Sacramento Bee, Jan. 13; Jan. 12 hearing). Even more: Ken Garcia, “Lodi’s losing gamble” (column), San Francisco Chronicle, Jan. 19. Another update: May 8.
Minnesota man sues over charitable donation
Marcel Mager is unhappy that the church he donated $126,000 to in 1999 doesn’t want to give him his money back. (Delma J. Francis, “Cloquet man wants his $126,000 back”, Minneapolis Star-Tribune, Jan. 14)
Recent workers’ compensation follies
The Ninth Circuit Court of Appeals upheld an award of disability benefits to Michael Ilaszczat, “who required hip surgery after crashing to the floor of a social club on [Johnson Atoll] after he bet soldiers $100 that one of them could not high-kick over his head without touching him. He won the bet but got kicked to the floor.” Ilaszczat was subsequently expelled from the atoll for his behavior in the incident, but filed a claim for disability.
“The appeals court agreed with the earlier ruling that the two-mile-long atoll is a ‘zone of special danger’ because of its isolation and limited recreational opportunities.” (Reuters, Jan. 16) (via Bashman). The concept of “zone of special danger” arose out of a 1951 Supreme Court case, where a Guam worker spending time in his employer’s recreation center drowned in an attempt to rescue swimmers calling for help; the Supreme Court, perhaps illustrating that hard cases make bad law, held that the limited recreational opportunities in Guam made the employee’s behavior reasonably related to his job under the circumstances. The Ninth Circuit has since extended it in cases such as Self v. Henson, a 1962 case where the employer was held responsible for a woman injured during a late-night rendezvous with her supervisor in a parked car that was struck by an army weapons carrier.
On the mainland, on the other hand, a California Court of Appeals denied workers compensation for a PG&E employee who argued that the stress of the company’s bankruptcy (and from the loss of his investment in the company stock) was a compensable psychiatric injury. (Roberto Ceniceros, “Stress from company setbacks not compensable”, Business Insurance Daily News, Jan. 13).
Update: judge upholds verdict against Ness Motley
Updating our Aug. 24 report: “A federal judge has upheld the $36 million malpractice verdict against Ness Motley, Loadholt, Richardson & Poole. U.S. District Judge Rebecca R. Pallmeyer agreed that the defunct South Carolina firm put its fees above the interests of Irish client Interclaim Holdings.” Appeal is planned. (Lori Patel, law.com, Jan. 14; “$36 Million Malpractice Award Against Firm Upheld”, New York Lawyer, Jan. 13).
Spitzer vs. the SEC
Mike O’Sullivan at Corp Law Blog says he’s not so sure it’s a bad thing for the SEC to have a reputation as “legalistic” rather than creative in its approach to fighting market misconduct: “The SEC has a great deal of authority over the U.S. capital markets. If the SEC does not act within the four corners of the law, the SEC would inject a great deal of uncertainty into the capital markets. …
“This is one of the reasons why I think it’s inappropriate to compare the SEC to Eliot Spitzer’s operation. Spitzer feels free to use New York’s Martin Act to attack anything that strikes him as abusive, regardless of whether it’s clearly illegal. The SEC has in its arsenal nothing as open-ended as the Martin Act, and that’s a good thing for US markets. The Martin Act is, as one commentator called it (PDF), a ‘fierce sword’ of uncertainty, permitting prosecutors to stretch the definition of crimes and then engage in extensive discovery to compel their targets to capitulate. This makes the Martin Act a very useful tool for a prosecutor looking to make his mark, and a nearly useless guide to a person looking to avoid becoming the target of a prosecutor looking to make his mark.
“Beyond creating uncertainty, another interesting consequence of open-ended criminal statutes like the Martin Act is the freedom they give prosecutors to legislate on the fly.” (Dec. 29). Plus: welcome National Law Journal readers (Andrew Harris, “Waging war against Wall St. corruption”, NLJ, Dec. 22, not online, quotes me suggesting that Spitzer is “imposing a different regulatory scheme nationwide than the one imposed by the federal government,” not necessarily a good idea given that he isn’t answerable to a nationwide electorate).
Jacob Sullum on class actions
The syndicated columnist takes a look at the Schwartz v. Citibank class action, and also points out a couple of weaknesses in a much-hyped new study by Cornell law professor Theodore Eisenberg and NYU law professor Geoffrey P. Miller which found no upward trend in the average amount of settlements or fees in 370 class actions recorded in court decisions from 1993 to 2002. (syndicated/Reason Online, Jan. 9; see Jonathan D. Glater, “Study Disputes View of Costly Surge in Class-Action Suits”, New York Times, Jan. 14; “Attorneys Fees in Class Action Settlements: An Empirical Study”, Sept. 24).
Tampered food?
A comedy cliche is the diner who tries to get out of his or her check by claiming to find a cockroach in the food. (E.g., “Victor/Victoria.”) Nowadays, such scams go beyond seeking a free meal, but include hopes for a lawsuit — the Pepsi syringe hoax being a well-publicized instance, the trampled shopper (Dec. 4) a more recent case.
We’re not saying Leila Sultan, the woman who settled a lawsuit against an Irvine seafood restaurant over an allegation of finding a condom in her chowder (AP, Jan. 12) is such a scamster. But, as the Smoking Gun points out, it “was the second time she was forced to sue over an injurious incident at a chain restaurant” — she recovered $2000 from Taco Bell in a settled 1996 lawsuit over spilled coffee. (via Obscure Store)
Posting lull
I’ll be taking the next two days off while I deliver a speech at a private conference and catch up on other matters. You should keep checking in for posts by Ted Frank, but there won’t be any by me before the weekend. In the mean time, you might consider dropping by some of the weblogs listed on our blogroll on the lower right column of the front page. Or check out one of the following very disparate blogs from our bookmark list: Aaron Haspel, Lawrence Solum, The Minor Fall, The Major Lift, Jim Henley, Agenda Bender, Matthew Yglesias, The Agitator. See you soon.
ADA filing mills: coming to your town next?
I’ve just published, in the new City Journal, an article on the thriving industry of filing disabled-accessibility complaints against unsuspecting businesses and building owners which are then traded in for hard cash, often couched as legal fees, payable to the organizers of the complaints. Established disabled-rights groups mostly say they’re dismayed by the practice, which doesn’t mean they necessarily support any steps that would stop it. (Walter K. Olson, “The ADA Shakedown Racket”, City Journal, Winter). For earlier coverage of the issue on this site, see Aug. 12, this group of links, and our disabled-rights page generally.