Corp Reform - Not Tort Reform

Coming Soon - The First Greg Abbott Awards

Perhaps you've seen the "Stella Awards" on the Internet; these supposedly real examples of lawsuit abuse are named after Stella Liebeck of McDonalds fame. The Stella Awards are fake. I've decided to create the "Greg Abbott Awards", after the hypocritical Texas Attorney General Greg Abbott.

In 1984, Greg Abbott was jogging in the wrong place at the wrong time, and a tree fell on him while he was jogging and partially paralyzed him - he's in a wheelchair today.

Greg Abbott hired Texas attorney Don Riddle to sue the homeowner of the tree, and a company who once trimmed the tree.

Don Riddle obtained a settlement for Mr. Abbott that may exceed $10 million in his lifetime. He receives yearly payments, and according to this article, Mr. Abbott received $300,000 in 2001 alone.

Surprisingly, Greg Abbott has become a major champion for tort reform. As a Supreme Court justice in Texas appointed by George W. Bush, Mr. Abbott helped push a tort reform agenda. Here's what Don Riddle, Mr. Abbott's attorney has to say: "People who sadly find themselves in Greg Abbott's position today will not have the same access to obtaining compensation that Mr. Abbott had. The difference is the tort reform laws that have come into place." Had the tort reform laws Mr. Abbott advocates been in place in 1984, Mr. Abbott would not receive $300,000 or more every year of his life. Why then, is it fair for Mr. Abbott to receive millions of dollars in pain and suffering - and mental anguish - but it's not fair for other Texans?

The Texas Observer has even more details about the hypocrisy of Greg Abbott. For example, here's what Greg Abbott had to say about Kirk Watson's competing campaign for attorney general: "My opponent, a former Mayor of Austin, is a liberal plaintiff personal injury trial lawyer who’s made millions suing doctors, hospitals, businessmen and women," Greg Abbott is just one of many conservative Republicans who head straight for "liberal plaintiff personal injury trial lawyers" like Mr. Watson when they're injured.

This article at the Austin Chronicle calls Greg Abbott "[T]he most reliably pro-corporate vote on the consistently pro-corporate court." While another article, also from the Austin Chronicle says that "Abbott's judicial achievement list might have been drawn directly from the corporate-friendly agenda of the Texans for Lawsuit Reform."

So, with a little background information about Greg Abbott, you can certainly understand why I've decided to honor tort reform hypocrites with an award in his name. Look for the first actual award sometime next week. There are so many tort reform hypocrites, I'll have a hard time figuring out who first to honor.

Think Tanks as Lobbyists?

While doing some research about the conservative "think tank" The Manhattan Institute, I came across TomPaine.com and this article about how think tanks are rapidly turning into lobbyists. Basically, corporations pay a think tank to do a study that will end up with a certain result, and then use that study to sway politicians. After all, the study was done by scientists or scholars, right?

The Manhattan Institute and "Trial Lawyers, Inc."

Yesterday, the site had its first public comment, which was from a gentleman who disapproved of my post about Trial Lawyers, Inc. For those who don't know, Trial Lawyers, Inc. is a "study" that basically attempts to lump all lawyers into one giant organization that is reputed to be destroying America, the justice system, etc. I'll tell you who made the "study" possible, and let you draw your own conclusions.

The "study" was authored by the Manhattan Institute, a conservative think-tank. Well, at least it's funded by conservatives. Let's take a look at who pays the bills for the Manhattan Institute.

Richard Mellon Scaife and his foundations: This article at CNN profiles Richard Scaife. Richard inherited his millions from the Mellon industrial foundation. He owns some interest in newspapers and other media outlets. Why? The CNN article has this to say, "Burton Hersh, author of "The Mellon Family," said, "Even as a child, he always saw the correlation between the media and the reputation of politicians. That's certainly been a sub-theme of his life." This makes sense, because the article also concludes with this statement: "[I]t is a fact this billionaire has spent millions in tax-free money attacking the current occupants of the White House." (Clinton)

According to this link at Media Transparency, Scaife and his foundations have given $565,000.00 to the Manhattan Institute since 2000 alone.

The Lynde and Harry Bradley Foundation: Another large contributor to the Manhattan Institute is the Bradley foundations. Media Transparency has some nice information about this group here. In 1968, Allen-Bradley (where the money came from) had over 7,000 employees, but only 32 black or Hispanic workers. The federal government forced them to integrate. It's currently run by a former executive of the John Olin foundation, another conservative group profiled in the same Media Transparency article, and summarized below.

Remember the book The Bell Curve? This group helped fund it, and after it was published, increased the author's grant to $136,000. For those who forget, The Bell Curve espoused that poverty was caused by genetic inferiorty. This article, also at Media Transparency, details the "racist agenda" of the organization and its efforts to eliminate affirmative action. It's a good read.

Since 2000, this foundation has given $585,000 to the Manhattan Institute.

The John M. Olin Foundation: This foundation is financed by chemical and munitions money. Last I checked, the chemical industry pushes heavily for tort reform. There is a nice piece about the foundation here at the People For The American Way, and it has this quote: "Explaining his efforts to convince corporations to halt grants to university programs deemed "liberal," Olin president William Simon argues that many businesses are "financing their own destruction." "Why should businessmen," Simon asks, "be financing left-wing intellectuals and institutions which espouse the exact opposite of what they believe in?"

While the previous quote is fairly telling, the best quote in the article could be this one: "The report finds a significant and long-standing movement to reshape the American legal system on the part of "a powerful coalition of business groups and ideologically compatible foundations [who are] engaged in a multi-faceted, comprehensive and integrated campaign to elevate corporate profits and private wealth over social justice and individual rights." Further, "[c]onservative foundations, particularly Olin, Sarah Scaife, Lynde and Harry Bradley, and Smith Richardson, are the effort's philosophical leaders."

UCLA turned down money from this foundation because they felt the Olin foundation was, "taking advantage of students' financial need to indoctrinate them with a particular ideology." It certainly doesn't look good when a university turns down grant money because of the beliefs of an organization.

The Manhattan Institute, however, has no problem with taking Olin money. Since 2000, they've received $1,001,000 in grants from the Olin Foundation. Have the authors of Trial Lawyers, Inc. been indoctrinated with the ideology of the Olin group?

So, the Manhattan Institute has received millions of dollars in funding from right-wing, racist, pro-business, anti-consumer "think tanks", and they use that money to produce a "study" which blames trial lawyers for the decline of America. Draw your own conclusions.

Frank Cornelius, and the Iowa Citizen Action Network

The following article, entitled "Crushed by My Own Reform" is the story of Frank Cornelius, an insurance lobbyist who got royally screwed by the tort reform he helped enact. The article appeared originally in the New York Times on October 7th, 1994.

Crushed By My Own Reform By Frank Cornelius

In 1975, I helped persuade the Indiana Legislature to pass what was acclaimed as a pioneering reform of the medical malpractice laws: a $500,000 cap on damage awards, and elimination of all damages for pain and suffering. I argued successfully that such limits would reduce health care costs and encourage physicians to stay in Indiana – the same sort of arguments that not underpin the medical industry’s call for national malpractice reform.

Today, from my wheelchair, I rue that that accomplishment. Here is my story.

On February 22, 1989, I underwent routine arthroscopic surgery after injuring my left knee in a fall. The day I left the hospital, I experienced a great deal of pain and called the surgeon several times. He called back the next day and told my wife to get me a bedpan. He then left on a skiing trip. I sought out another surgeon, who immediately diagnosed my condition as a reflex sympathetic dystrophy – a degenerative nervous disorder brought on by trauma or infection, often during surgery.

A few months later, when a physical therapist improperly red the instructions on a medical device, I received a tremendous current of electricity through my left leg. This seriously complicated my condition.

In August 1990, another physician proposed a medical procedure, but used the wrong instrument; that left me with several holes in the vena cava, the main vein from the legs to the heart. I would have to bled to death in my room if my wife had not come to see me that evening and called for help. As another physician tried to save my life, he punctured my left lung.

The cost of this cascading series of medical debacles is painful to tally:

I am confined to a wheelchair and need a respirator to keep breathing. I have not been able to work.
I have a continuous physical pain in my legs and feet, prompting my doctor to hook me up to an apparatus that drips morphine. My pain used to rate a 10 on a scale of 1 to 10. Now it’s about a 4.
Twice, I have received last rites from my church.

My marriage is ending, and the emotional fallout on our five children has been difficult to witness, to say the least.

At the age of 49, I am told that I have less than two years to live.

My medical expenses and lost wages, projected to retirement if I should live that long, come to more than $5 million. Claims against the hospital and physical therapist have been settled for a total of $500,000 – the limit on damages for a single incident of malpractice. The Legislature has raised that cap to $750,000, and I may be able to college some extra damages if I can sue those responsible for the August 1990 incident the nearly killed me. But apparently because of bureaucratic inertia, the state medical panel that certifies such claims has yet to act on mine.

The kicker, of course, is that I fought to enact the very law that limits my compensation. All my suffering might have been worthwhile, on some cosmic scale, if the law had accomplished its stated purpose. But it hasn’t. (Emphasis added.)

Indiana’s health care costs increased 139.4 percent from 1980 to 1990 – just about the national average. The state ranked 32nd in per capita health spending in 1990 – the same as in 1980.

It is understandable that the damage cap has done nothing to curb health care spending; the two have almost nothing to do with each other. In 1992, the Congressional Budget Office reported that medical malpractice litigation accounted for less than 1 percent of total healthcare spending. I doubt that the percentage in Indiana is much different.

Make no mistake; damage caps are arbitrary, wholly disregarding the nature of the injury and the pain experience by the plaintiff. They make it harder to seek and recover compensation for medical injuries; extend unwarranted special protection to the medical industry; and remove the only effective deterrent to negligent medical care, since the medical profession has never done an effective job of disciplining negligent doctors.

Medical negligence cannot be reduced simply by restricting consumers’ legal rights. That will happen only when the medical industry begins to effectively police its own. I don’t expect to see that day. (Emphasis added.)

Sadly, Frank did not live to see that day and passed away. To me, the most telling part of this article is that tort reform legislation did nothing to to decrease healthcare costs in the state of Indiana.

I've seen this article in numerous places, but was reminded again of it while reading the Iowa Citizen Action Network's webpage, which has a lot of good information for everyone - not just Iowa citizens.

Here is a good article from their site on how to lobby your politicians. Check them out.

More About McDonalds

It turns out that the most popular way people find this site is searching for something about Stella Liebeck and her McDonald's coffee case. Here is the last article I wrote about Stella. Since then, I've written a little more about her case for a newsletter I'm putting together for Students Against Tort reform. What follows is the article from the newsletter:

The poster-child of tort reformers is the famed “McDonald’s Coffee Case” - the case where a woman obtained a multimillion-dollar jury verdict for spilling hot coffee on herself. Most people think that a careless woman spilled some hot coffee on herself while driving, received minor burns, and then filed a lawsuit. That’s not what happened. Here's what did happen:

Stella Liebeck, a 79-year-old grandmother, was the passenger in her grandson’s vehicle and ordered a cup of McDonald’s coffee. McDonald’s served the coffee at approximately 190 degrees. McDonald’s admitted coffee at that temperature is “unfit for human consumption”; 190 degree liquid causes third-degree burns within 2 to 7 seconds of contact with skin.

Stella spilled the coffee on the crotch of her cotton jogging pants, and the coffee immediately soaked through her pants and caused third-degree burns to her legs, thighs, and genitals. The burns were so severe she needed skin grafts to heal the damage. It took many months for her to recover from the severe burns.

Stella offered to settle the case with McDonald’s if they would just pay her medical bills, which were into the many thousands of dollars. McDonalds refused, and Stella filed a lawsuit. During the trial, it was discovered that in the ten years prior to Stella’s accident, over 700 men, women, and children had been burned by the unsafe McDonald’s coffee.

For years, McDonald’s sold coffee that was “unfit for human consumption”, and made $1.3 million dollars a day in profit doing so. Information such as this wasn’t really reported by the media. What was reported was the $2.6 million dollar jury verdict.

The jury arrived at that figure by calculating the profit of two-days worth of coffee sales, and “fining” McDonald’s that amount to get their attention and make them fix the problem.

It worked. The day after the verdict, McDonald’s lowered the coffee temperature to a safe-but-hot 158 degrees. This is still hot enough to cause third-degree burns, but it takes closer to sixty seconds worth of exposure to do so.

Many believe that $2.6 million dollars was too much money. The judge in the case did, and he reduced the verdict to less than $500,000. Stella actually settled with McDonald’s for even less money. It took a multimillion dollar jury verdict to get McDonald’s to fix a dangerous problem they knew about for ten years; doesn’t that prove the system works?

Various Newsletters of Interest

I added this link to the Journals and Newletters list on the right. The law firm of Ross, Dixon, & Bell has several newsletters they publish online that may be of interest to many of you. They include:

Environmental - "Summaries of important cases and other timely information about environmental and mass tort coverage litigation in federal and state courts throughout the nation. "

Directors & Officers Liability - "Noteworthy developments pertaining to all lines of directors & officers liability insurance, including commercial, non-profit, healthcare, fiduciary, and employment practices liability."

Transportation - "Recent decisions affecting the transportation industry and its insurers from throughout the country."

Bad Faith - "News and information about some of the most difficult and high stakes matters that insurer clients face -- "bad faith" litigation."

Antitrust - "Antitrust case analyses involving corporations and consumer classes in a wide variety of different industries."

These web newsletters are a great way to stay informed about recent developments in court cases across the country. The Antitrust newsletter has lots of good information about tobacco lawsuits. For some reason, it doesn't have any antitrust actions against insurance companies. I wonder why... Oh, that's right! The insurance industry has a federal exemption (The McCarran Ferguson Act) from antitrust law! That's why they can collude together to fix rates! That's why Progressive can tell you the rates of their competitors! That's why health insurance isn't affordable! And that's why there's no real competition among insurers!

I'm sure Ross, Dixon & Bell aren't the kind of lawyers who'll approve of this site, but I applaud them for taking the effort to maintain their newsletters, and for the Pro Bono work they did for NYC Firefighters.

Information is power, and even an occasional read of their newsletters would be a good way to stay informed.

Runaway Judges Piss off Philip Morris

Turns out the bad guys at Philip Morris knowingly marketed "light" cigarettes as less dangerous than regular cigarettes, when they knew they were just as bad. So, the judge - not a jury - awarded $7 billion in economic damages and $3 billion in punitive damages. In fact, because big business has been so successful in convincing people that "runaway juries" are destroying the system, Philip Morris REQUESTED A JURY TRIAL, which was denied by the judge.

Let me state again: In a multibillion-dollar class action lawsuit, Philip Morris asked for a jury trial. You know, the same runaway juries that they always bitch about. Why? Because the bogus hype about runaway juries has worked. This shouldn't come as any surprise. After all, the Department of Justice issued a report years ago that shows judges award more money than jurors.

The court decision over at www.tobacco.org contains some great quotes from the judge. For example:

The Court recognizes that punitive damages are not favored in the law and this Court is careful not to award such damages improperly or unwisely. However, the course of conduct by Philip Morris related to its fraud in this case is outrageous, both because Philip Morris' motive was evil and the acts showed a reckless disregard for the consumers' rights. As a consequence, punitive damages are appropriate in this case.

Of course, Philip Morris is appealing the decision. The important thing about this case, for me anyway, is that it clearly shows that runaway juries aren't a problem. If the most hated industry in America would rather have their case tried by a jury than a judge, doesn't that show that their misinformation and propaganda has been working?

Students Against Tort Reform

I'm starting up a new group, Students Against Tort Reform, and am looking for people, preferably students or faculty, to help me get some chapters started. Drop me a line at justinian @ corpreform dotcom if you're interested.

Texas Tort Reform Results? $2.8 Billion in Insurance Profit

I came across the website for the Center for Economic Justice, a Texas-based organization that is trying to help minorities, the poor, and to regulate the insurance industry. They have a report that talks about what really happened as a result of Governor Bush's tort reform. Here's a blurb from their website:

Our reports have established that insurers earned over $2.8 billion in windfall profits in 1996-1998, and that consumers are not reaping the promised benefits of substantially lower insurance premiums. This windfall to insurers has been realized at the expense of consumers, and we continue to expose insurers’ unjust enrichment at consumer expense.

Check the site out and join the group - it's free.

Arnoldwatch & Workers Comp.

The good guys at the Consumer Watchdog have started a new little site, ArnoldWatch, that is going to keep tabs on the new governor of California.

I think the man will need to be watched. For example, this article contains the following passage:

"Schwarzenegger said legislation passed this year doesn't do enough to lower the cost of workers' compensation. The governor-elect said he will take steps to close loopholes and eliminate incentives that encourage fraudulent claims."

So, it appears that the California Workers' Compensation System will be under attack by Arnold. This doesn't bode well for injured workers. I live in Texas right now, which is another state that had its workers' compensation system overhauled to prevent "fraudulent claims" and to "lower costs."

Here's an example of how the workers' compensation system "works" in Texas:

Are you injured on the job? Good luck finding an attorney to handle your case; very few lawyers in Texas will represent injured workers in a workers' compensation claim, because it's nearly impossible to get paid. Let me tell you about a client I will call "Mr. K" who was represented by an attorney I know.

Mr. K was working in a medical facility when a wall-mount broke and a television fell on his head. This was witnessed by a couple of other employees and never disputed by the employer. He was seriously injured, and filed a workers' compensation claim, which was denied entirely by the insurance carrier.

After his claim is denied, Mr. K searches for an attorney, and finds the attorney friend of mine. The attorney appeals the denial of the claim, and the game begins. One of the requirements for a Texas workers' compensation claim (and almost everywhere, I believe) is that of the Independent Medical Exam, or IME. An IME is a medical exam performed by a supposedly independent doctor, although the doctor is actually paid by the insurance carrier. During the IME, the doctor examines the patient to check for the existence of and extent of the disputed injuries.

Mr. K has to undergo several IME's. A couple of the doctors claim they don't think a TV even fell on him - remember, the employer never tried to dispute this, only the insurance carrier. One of the other doctors agrees a TV probably fell on him but repeatedly points out how Mr. K is a former alcoholic and claims that he reaked of alcohol during the exam.

After dozens of hours of work, the attorney won the first hearing with the Texas Workers Compensation Commission (TWCC). This entitled Mr. K to workers comp. medical benefits and lost wages, and entitled the attorney to 25% of those benefits.

However, the carrier appealed the decision to the next administrative level. This appeal held off the benefits and the pay for the attorney. The insurance carrier again tried some defenses that lacked merit, and again, Mr. K wins and is entitled to his benefits... Until the carrier appeals again.

By this time, Mr. K has been unable to work for months, and has lost his car because he couldn't make the payments. The attorney wins the third appeal, and the carrier doesn't choose to appeal from the TWCC to an actual court of law. This means Mr. K and his attorney can finally get paid.

The attorney got his first check for all his hard work last week, for $36.00. Why? Well, in many states, injured workers (and their attorneys) receive a "lump sum" payment for their injuries, but not in Texas. So, Mr. K will get $144 a week for the next 20 months, and the attorney will get 25% of that, which is $36 per week.

Few Texas attorneys handle workers' compensation claims anymore because not only will it take 6+ months to get paid a dime, but instead of getting a "lump sum" payment, the attorneys will get 25% of the worker's weekly benefits.

All of these "reforms" were put in place to lower the insurance premiums for workers' compensation insurance. So, are low premiums worth a system that is stacked against the injured? Texans can't answer that question, as we still have some of the highest premiums in the nation.

I have a sneaking suspicion that Arnold will look towards the Texas model for some guides on how to "reform" the California system.