A Florida cardiologist has been sentenced to six years in federal prison and ordered to pay $4.5 million in restitution after serving to review the echocardiograms of more than 1,100 prospective claimants on a fen-phen settlement trust fund; many of the claimants he diagnosed were not in fact ill. “The physician was also to be compensated $1,500 for each claimant who qualified for benefits when that person’s claim was paid, according to the U.S. Attorney’s Office for the Eastern District of Pennsylvania, which prosecuted the case.” At trial, he testified “that his medical reports had been forged by the mass tort lawyer who had hired him on a contingency fee basis, the record states.” As I observed in The Litigation Explosion, medicine, like law, is a profession in which the prohibition of contingency or success fees developed early, in large part because it was expected that such fees would work to the benefit of dishonest practice. [Penn Record]
Overlawyered readers are well aware of the sorry history of the fen-phen litigation; those that aren’t are advised to check out Professor Lester Brickman’s summary.
In April 2008, the Diet Drugs MDL district court awarded $567 million the class counsel in that case, basing the award in part on representations by class counsel about future class recovery. A year later, a plaintiff’s attorney requested the court reopen the question of the fee award because the class counsel had exaggerated those estimates. The district court refused, holding that the one-year delay in bringing the Rule 60(b) motion was not a “reasonable time.” There has been an appeal to the Third Circuit, and, today, the Center for Class Action Fairness filed an amicus brief in support of the appeal that itself provides a short overview of the history of the fen-phen MDL. Many thanks to Chris Arfaa for his generous help in filing the brief.
The story is from Kentucky, but it’s different from and evidently unrelated to the much-publicized episode in which three lawyers from that state arranged to divert large sums from the proceeds of a group settlement of fen-phen claims. Patricia Fulkerson of Nelson County sued the lawyer and law firm that had represented her in her fen-phen claim, saying that the lawyer sexually harassed her and that the law firm (quoting Andrew Wolfson in the Louisville Courier-Journal) “exaggerated her heart injuries — and those of other clients — so it could collect higher fees”:
A former paralegal in the firm, Fonda Walters, testified in a deposition that it exaggerated the injuries of a half-dozen clients, and that their initial test results, which had showed little or no heart damage, were altered. …Walters acknowledged she was fired from the firm in connection with a dispute over a bonus she claims she was owed.
The law firm’s defense raised (inter alia) an interesting argument:
Those lawyers also have argued that the alleged altering of Fulkerson’s medical records by the Florida-based firm of Wasserman Riley & Associates also doesn’t amount to negligence because “the claimed goal of the alleged malpractice was to get her more money.”
Apparently the judge rejected that argument, though. In a second Journal-Courier report dated June 22 — the same date as the above item, but presumably subsequent to it — Wolfson reports that Fulkerson’s lawsuit “has been successfully mediated and will be dismissed, lawyers for both sides said.” Speaking to the Broward-Palm Beach (Fla.) New Times, partner Jay Wasserman called the claims of diagnosis-embellishment “absolute nonsense”:
Wasserman also says there were only about six claims filed among the many prospective clients who received the complimentary tests. “If [falsifying results] was going on, why didn’t we have a much bigger number?” Wasserman asks, adding that since the reports were produced by experts and would be part of the case, it wouldn’t be possible to fake them, even if he wanted to.
More: Ronald Miller.
You may recall the earlier trial of the Kentucky fen-phen attorneys who had stolen tens of millions of dollars from their clients ended in a mistrial for two and an acquittal for their third compatriot. This time around, a federal court jury, after ten hours of deliberation, found William Gallion and Shirley Cunningham Jr. guilty of eight counts of fraud and one count of conspiracy. A streamlined prosecution case no doubt helped make a difference; defense attorneys sought to blame the matter on Stan Chesley, who negotiated the underlying settlement and received millions more than he was contracted to receive, and it remains mysterious why he was not charged. [Courier-Journal]
The 5th U.S. Circuit Court of Appeals on Monday upheld the conviction of Vicksburg lawyer Robert Arledge, convicted of bilking the drug company Wyeth of more than $6.7 million over the diet drug Fen-Phen….
U.S. District Judge David Bramlette sentenced Arledge to six years in prison for knowingly allowing clients to make claims of about $250,000 each for health complications although they had no legitimate reason.
Seems it was a clergy scandal as well as a lawyer scandal:
Regina Reed Green of Fayette, who pleaded guilty to tax evasion involving false Fen-Phen claims, testified Arledge knew about the scheme to defraud the drug company. She said he told her every resident of 9,740-population Jefferson County would get $1 million.
“The evidence showed that when Green became concerned that she might be caught fabricating the prescriptions and expressed a desire to stop her illegal activity, she contacted (the Rev. Gregory) Warren,” the appeals court wrote. “Warren tried to convince Green to continue fabricating the prescriptions, but Green was not assuaged.”
Green testified Arledge persuaded her to continue: “And he said … I wasn’t going to get in any trouble because like (Warren) said, they were going to box all those files up, put them away, and never be seen again.”
Lester Brickman has a new must-read paper on an under-reported problem:
Lawyers obtain the “mass” for some mass tort litigations by conducting screenings to sign-up potential litigants en masse. These “litigation screenings” have no intended medical benefit. Screenings are mostly held in motels, shopping center parking lots, local union offices and lawyers’ offices. There, an occupational history is taken by persons with no medical training, a doctor may do a cursory physical exam, and medical technicians administer tests, including X-rays, pulmonary function tests, echocardiograms and blood tests. The sole purpose of screenings is to generate “medical” evidence of the existence of an injury to be attributed to exposure to or ingestion of defendants’ products. Usually a handful of doctors (“litigation doctors”) provide the vast majority of the thousands and tens of thousands of medical reports prepared for that litigation.
By my count, approximately 1,500,000 potential litigants have been screened in the asbestos, silica, fen-phen (diet drugs), silicone breast implant, and welding fume litigations. Litigation doctors found that approximately 1,000,000 of those screened had the requisite condition that could qualify for compensation, such as asbestosis, silicosis, moderate mitral or mild aortic value regurgitation or a neurological disorder. I further estimate that lawyers have spent at least $500 million and as much as $1 billion to conduct these litigation screenings, paying litigation doctors and screening companies well in excess of $250 million, and obtaining contingency fees well in excess of $13 billion.
On the basis of the evidence I review in this article, I conclude that approximately 900,000 of the 1,000,000 claims generated were based on “diagnoses” of the type that U.S. District Court Judge Janis Jack, in the silica MDL, found were “manufactured for money.”
Despite the considerable evidence I review that most of the “medical” evidence produced by litigation screenings is at least specious, I find that there is no effective mechanism in the civil justice system for reliably detecting or deterring this claim generation process. Indeed, I demonstrate how the civil justice system erects significant impediments to even exposing the specious claim generation methods used in litigation screenings. Furthermore, I present evidence that bankruptcy courts adjudicating asbestos related bankruptcies have effectively legitimized the use of these litigation screenings. I also present evidence that the criminal justice system has conferred immunity on the litigation doctors and the lawyers that hire them, granting them a special dispensation to advance specious claims.
Finally, I discuss various strategies that need to be adopted to counter this assault on the integrity of the civil justice system.
Watch what you say about lawyers dept.: The high-profile mass tort firm of Napoli Bern Ripka and Associates LLP recently filed a defamation suit in Suffolk County, N.Y. against ex-client Scott Spielberg, a former cab driver who lives in Nevada.
The firm claims that Mr. Spielberg defamed the firm when he wrote to the office of the Manhattan district attorney asking prosecutors to open an investigation into what Mr. Spielberg alleges is the firm’s mishandling of earlier litigation involving the diet drug fen-phen.
The lawsuit also claims that Mr. Spielberg slandered the firm in conversations he had with a New York Times reporter, Anthony DePalma, who wrote a lengthy article about the involvement of a name partner at the firm, Paul Napoli, in the fen-phen litigation.
Yet, Mr. DePalma’s article doesn’t quote Mr. Spielberg or mention him at all. Napoli Bern is representing the vast majority of thousands of ground zero workers in their suits alleging that the city failed to protect them from toxins at the site that have caused respiratory and other illnesses. …
“They don’t want me to be able to talk to the press or law enforcement,” Mr. Spielberg said of the suit against him.
(Joseph Goldstein, “Seeking To Cut Off Criticism, Law Firm Sues Former Client”, New York Sun, Jun. 6).