July 9 roundup

  • Many interesting reader comments on post about jury award against manufacturer over injury on bicycle motorized post-sale;
  • Reimbursed for money never paid: “Calif. Trial Lawyers Welcome Latest Ruling on Recovery of Medical Expenses” [The Recorder]
  • Update: Defamation suit against travel blogger Chris Elliott resolved successfully [Citizen Media Law, earlier]
  • Podcast: Northwestern lawprof Steven Calabresi on McDonald (Second Amendment incorporation) case [Federalist Society]
  • “Provost Umphrey claims banana picker reps siphoned clients, money” [SE Texas Record]
  • Lawprofs in a NYT flutter about deductibility of punitive damages [Walk, Drug & Device Law] On the merits, Carter at ShopFloor: “Changing Tax Laws to Punish Businesses — Unless They Settle”
  • Troubled Pacific Law Center to close in San Diego [ABA Journal, earlier]
  • New York high court rules Atlanta exec cannot invoke New York’s pro-plaintiff state or city laws to contest firing [NYLJ]


  • The problem with the application of the collateral source rule in modern tort litigation is that in practice it allows recovery of “medical bills” that have no significant relationship to reasonable and necessary expense in that since no one pays the bill generated by the hospital the bill does not reflect the true value of the service. Since hospitals get most of their revenue from negotiated rates with insurers, that negotiated rate reflects the true economic value of the services rendered. The hospital and the insurer are the only ones with equal bargaining power and the bills generated by the hospital don’t reflect that price.

  • Agreed, Nettles–the tortfeasor is compelled to pay the “manufacturer’s suggested retail price” of the bill (i.e.: face value of the bill) but the patient’s insurer pays the negotiated rate (the market clearing price). Then, the plaintiff gets to pocket the difference (and lawyers take a third). This is not equitable and violates the principle of indemnity. This is not the same as saying a tortfeasor should benefit (i.e.: not repay or otherwise be responsible for medical costs he was responsible for, regardless if the plaintiff was insured) but not at above market rate. Trial lawyers always scream bloody murder when defendants challenge this. It’s a cash cow for them.