Corp Reform - Not Tort Reform

Funny Joke About Unfunny Story

Henry Greenspan, one of my favorite contributors to TortDeform, had a top-ten list of what pet food manufacturers can learn from pharmaceuticals.  Here are my two favorites:

5. The "tort tax" will inevitably drive up the cost of pet food, with the consequence that millions of pets will simply starve to death on your sofa. Eventually, so will you.

6. Like pharmaceuticals, pet foods are regulated by the FDA, the gold standard of safety throughout the world. FDA's approval of a doggy biscuit should preempt state tort liability.  Source: What Pet Food Manufacturers Can Learn From Drug Companies | Tortdeform

Now, neither Henry nor I find anything funny abou the tragic deaths of animals due to contaminated pet food.  If I had my way, punitive damages and prison sentences would be handed out for this catastrophe; I like animals more than I like most people.

 

Technorati tags: Tortdeform, pet food, Henry Greenspan, Pharmaceuticals

Will the National Association of Manufacturers continue to honor Randy Cunningham?

For those of you who don't know, tort reform is one of the biggest legislative goals for the National Association of Manufacturers.  The President of that organization is currently former Michigan Governor John Engler.

I had occasion to write Mr. Engler when I visited two NAM web sites, and saw the following:

Here's the text of the email I sent to Mr. Engler:

Dear Mr. Engler,

My name is Justinian Lane, and I’m a resident of Lansing, Michigan.  I am writing to you today because I am concerned that the National Association of Manufacturers hasn’t stripped former California Representative Randy Cunningham’s Award for Manufacturing Legislative Excellence.  As you know, Representative Cunningham pleaded guilty to charges of fraud, tax evasion, and conspiracy.  He also admitted in court that he accepted bribes in exchange for his work to pass legislation.

I’m sure you agree that Mr. Cunningham’s actions prove that he is not an individual who deserves any award for legislative excellence, let alone such an award from an organization as prestigious as yours.  Therefore, the National Association of Manufacturers must revoke Mr. Cunningham’s award so the public knows that NAM neither condones nor tolerates the despicable actions of Mr. Cunningham. 

As I write this email to you, two separate web sites praise Mr. Cunningham:  http://www.bipac.net/incumbent_detail.asp?g=NAM&leg_id_num=504 and http://www.nam.org/s_nam/doc1.asp?TrackID=&SID=1&DID=232401&CID=81&VID=2&RTID=0&CIDQS=&Taxonomy=False&specialSearch=False.  I look forward to seeing those web pages removed, and a statement from NAM that condemns Mr. Cunningham’s actions and revokes his award for legislative excellence.

Sincerely,

Justinian Lane

It will certainly be interesting to see if NAM continues to stand by Cunningham.

Thoughts on Vioxx

The Vioxx debacle should teach us a few things:

1. Corporations will sell products that kill people if the product is profitable.  Such is the way of the capitalist system.  (And I support that system.)
2. According to this article the FDA is helpless, clueless, and toothless.
3. It would be a very, very bad idea to pass legislation that bars lawsuits against a pharmaceutical if the drug in question passed FDA tests. 

This article, however, shows that the Bush administration has changed existing Justice Department policy, and hopes to prevent lawsuits against drug manufacturers if the FDA approved the drug:

"The administration contends that consumers cannot recover damages for such injuries if the products have been approved by the Food and Drug Administration. In court papers, the Justice Department acknowledges that this position reflects a "change in governmental policy," and it has persuaded some judges to accept its arguments, most recently scoring a victory in the federal appeals court in Philadelphia.

Allowing consumers to sue manufacturers would "undermine public health" and interfere with federal regulation of drugs and devices by encouraging "lay judges and juries to second-guess" experts at the FDA, the government said in siding with the maker of a heart pump sued by the widow of a Pennsylvania man."

I think there's a typo in that article, though. I'd put quotes around "experts" in the phrase "experts at the FDA."

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.