Overlawyered: Chronicling The High Cost Of Our Legal System

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High cost of health privacy laws, cont’d

More HIPAA madness? On Wednesday, in a crime that cast a chill through the mental health community, a Manhattan therapist was brutally slaughtered in her office by a man whose actions seemed consistent with those of a current or former patient with a grudge. The assailant escaped on foot, and although his image had been captured on surveillance tape, police were nowhere near beginning to know where to start looking for him: “Because of privacy laws, police hadn’t been able to access patient records as of late yesterday, sources said.” (New York Post, Feb. 14)(via Bader). On medical privacy laws and the Virginia Tech rampage of Seung Hui Cho, see Jun. 16, 2007.

More: Commenter Supremacy Claus says not to blame HIPAA, which has an exemption for police reports.

Friday morning sequel: This morning’s New York Post sticks with the original story and fleshes out the HIPAA role somewhat:

The hunt for the savage beast who butchered an Upper East Side therapist has hit a roadblock – because detectives can’t access her patients’ medical records under federal privacy laws, The Post has learned.

Police believe the meat-cleaver-wielding psycho who killed Kathryn Faughey on Tuesday night inside her office on East 79th Street could be the doctor’s patient – and need access to her records to identify him.

But police sources said because of the Health Insurance Portability and Accountability Act, signed by President Bill Clinton in 1996, investigators are having a hard time gaining access to those records.

“A case like this gets complicated because of medical privacy protections,” a source close to the investigation told The Post yesterday.

The federal law states that doctors, hospitals and health-insurance companies must protect the privacy of patients – even in a murder investigation – and that only through the use of subpoenas can authorities hope to obtain such information.

Police sources said investigators have applied for a subpoena, but have yet to receive it. Even if the subpoena is issued, patients can sue to keep their records private. …

[D]etectives have tried to get around the law by tracking down patients through sign-in sheets at the building’s front desk and through surveillance cameras in the lobby, sources said.

(Murray Weiss, Jamie Schram and Clemente Lisi, “Vexed by ‘Slay File’ Madness”, New York Post, Feb. 15). My Times (U.K.) article on the problems posed by health privacy laws is here.

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Jamie Leigh Jones, Tracy Barker, & “Halliburton” IV

Bizarro-Overlawyered, the Huffington Post, Alternet, and others on the Left continue to bang this drum with completely false accounts of the law and facts in their campaign to deprive consumers of the choice of mandatory arbitration: “The notion that sexual assault cannot be tried as a criminal matter but has to be arbitrated in secret arbitration and treated as a labor dispute is simply beyond belief.”

Beyond belief indeed. Let’s count the lies of commission and omission:

  • Whether a private civil claim against Halliburton or KBR is required to be arbitrated has nothing to do with whether the Department of Justice decides to criminally prosecute for sexual assault. The DOJ can try this as a criminal matter, but have chosen not to. That may be a scandal on its own, but not one having to do with arbitration clauses.
  • The arbitration clause does not prohibit Barker from bringing civil suit against her alleged rapist (and, indeed, her case continues in the proper federal district court venue).
  • The arbitration clause does not require the arbitration to be “secret.” (By the way, in December, I wrote to Jamie Leigh Jones’s attorney, Todd Kelly, and offered to publicize his arbitration briefs documenting Jones’s original summary judgment claims before he tried a second bite at the apple in court. Still no response over six weeks later.) The arbitration is only as secret as the participants want it to be.
  • And, oh, by the way, for all the claims that one can’t get justice in arbitration? Today the New York Times reports that two women who claimed sexual assault, Mary Beth Kineston and Pamela Jones, won their arbitration cases against KBR. If they’d brought civil suits, they’d still be litigating. Yet somehow, not once in all the months of controversy on the issue did any news reporter mention this non-trivial fact as the slurs against arbitration were repeated over and over.

Let’s not confuse issues. Sexual assault and rape are criminal acts, and should be prosecuted criminally. To the extent KBR was responsible for the very plausible allegations of creating an environment of sexual harassment by its employees and failing to respond to hostile environment claims, they should be civilly liable in the forum contractually agreed to. But either of these issues has nothing to do with the third issue, the availability of mandatory arbitration as an option in contracts.

Earlier: Jamie Leigh Jones (Dec. 12-16), Jamie Leigh Jones (Dec. 20), Jamie Leigh Jones (Dec. 21); see also Overlawyered’s arbitration section.

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Lerach sentenced to two years

Over decades, the class-action titan paid secret kickbacks to pliant “representative” plaintiffs, then systematically falsified the nature of his relations to those plaintiffs the better to deceive judges, opponents, competing class action lawyers, and class members. He and his defenders are now portraying his offenses — even the systematic lying to courts — as minor and victimless. For some indications of why our legal system takes a very different view, see my WSJ op-ed of a year and a half back. Per Peter Lattman’s story/interview in today’s WSJ, “Mr. Lerach has requested, and the judge will recommend, that he be sent to Lompoc, a low-security federal penitentiary in Southern California often called a ‘country-club prison’ or ‘Club Fed.'”

Yesterday’s L.A. Times piece by Molly Selvin takes note of Lerach’s “trademark vitriol — he famously threatened to “destroy” companies that balked at settling”. Selvin also quotes NYU legal ethicist Stephen Gillers expressing concern that the spate of Milberg Weiss prosecutions “has to worry [lawyers] even if they’re doing nothing wrong because the Justice Department has shown its willingness to look into how they do business”. Gillers offers no examples of any Milberg lawyers who have been prosecuted despite “doing nothing wrong”, nor does he explore the question of how lawyers might exploit the impunity they would enjoy if the Justice Department permanently refused to “look into how they do business”. Indeed, if Lerach is right when he says kickbacks to named plaintiffs were industry practice in the class-action biz, it would seem that DoJ should have started “looking into how they do business” long before it did.

With fine understatement, Andrew Perlman at Legal Ethics Forum observes that it would “send the wrong message to students” for Lerach to be permitted to set up teaching legal ethics to law students at the University of Pittsburgh as part of his sentence. And taking a contrarian view, Larry Ribstein (via Bainbridge) says an appropriate comparison for Lerach would be to Michael Milken (Drexel Burnham) or Jeff Skilling (Enron) — but in the good sense.

More: This morning’s New York Times, a paper in whose columns Milberg Weiss long enjoyed cordial if not deferent coverage, buries the Lerach sentencing on an inside page of the business section. The paper’s “Dealbook” blog covers the story here. And The Economist recalls a “shouting match” in 2006 between Lerach and a leading British corporate governance advocate over whether litigation was the best way to address shareholder/manager conflicts. Plus: Charles Cooper, CNet.

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February 11 roundup

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How is the Class Action Fairness Act working?

The Washington Legal Foundation announces a new paper by Brian Anderson and Mel Schwing: “Two leading class action defense
attorneys utilize a federal court judge’s recent rejection of a settlement as a case study of how CAFA can deter defendants’ ability to ‘buy peace’ through settlements” in cases where the claim is so meritless that it is only worth a small amount of money for the defendant to settle:

While CAFA surely benefited class action defendants more than plaintiffs by transferring more cases to federal courts that offer more fairness and predictability in the adjudication of class actions, it is not a “free-pass” for targets of class action lawsuits.

The quid pro quo of giving class action defendants greater access to federal courts is that CAFA expects defendants to vigorously litigate, not settle via coupon settlements, frivolous class actions. The message of Figueroa is that class action defendants in federal court who try to escape all litigation risk by proposing low-value coupon benefits in exchange for global releases of claims (especially where competing lawyers and attorneys’ general are involved in the controversy) will have a difficult time persuading the federal courts to approve such settlements.

Figueroa was the first time in the three-year history of CAFA that state attorneys general used their CAFA right to intervene in a settlement hearing. Last year, I also took a look at CAFA.

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Did redlining accusations lead to the subprime mortgage mess?

Stan Liebowitz writes in the New York Post:

Perhaps the greatest scandal of the mortgage crisis is that it is a direct result of an intentional loosening of underwriting standards – done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults. …

In an earlier newspaper story extolling the virtues of relaxed underwriting standards, Countrywide’s chief executive bragged that, to approve minority applications that would otherwise be rejected “lenders have had to stretch the rules a bit.” He’s not bragging now.

I’m not sure I entirely agree, but it’s an element we should be considering as we look at the new complaints of “racial discrimination” through excessive sub-prime loans.

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