Mesothelioma Resource

Health care, insurance costs, and the right to sue for damages in court are all especially critical issues to people suffering from asbestos-related diseases, such as mesothelioma. Advocates for “tort reform” — which usually caps damages and places restrictions on filing personal injury lawsuits — claim that these limitations on tort will make health care and insurance more affordable. As I’ve written in several recent blog posts, however, we can see in the states that have passed “tort reform” laws that the cost of health care does not go down at all after tort is “reformed.”

But what about insurance? Tort reform advocates say that the cost of liability insurance hurts business and restricts economic growth. They claim that tort reform will, therefore, grow the economy and increase jobs.

In the last blog post I said “the tort system is not the cause of insurance premium increases in recent years.” This is an important point to understand, because much of the cost alleged to be generated by personal injury and malpractice lawsuits is in the form of insurance increases.

Insurance companies love to blame the cost of litigation for increases in liability and malpractice insurance. But according to Americans for Insurance Reform, the real culprit is the investment cycle.

Insurance companies make most of their money from investment income. For this reason, a profitable investment cycle creates a “soft” insurance market. That is, insurance companies underprice their policies and accept high-risk clients in order to get more dollars to invest. But when interest rates fall and the stock market plummets, the insurance market becomes “hard.” In a hard market, premiums are jacked up and coverage is reduced.

As you might guess, we’re in a hard market right now.

Whenever markets get hard, insurers try to cover their losses by blaming personal injury litigation. Americans for Insurance Reform tracked the cycle of “soft” and “hard” markets, and said that if one believes big jury awards are driving up the cost of insurance, “one would have to accept the notion that juries engineered large jury awards in the mid-1970s, then stopped for a decade, then started again in the mid-1980s, stopped 17 years and the started again from 2002-2006. This is ludicrous, and not true.”

Insurance companies also have administrative and claims-handling costs, and some benefits are paid for non-tort losses, and sometimes these costs are mixed into the alleged cost of the tort system.

The most important thing to remember is that if “tort reform” means the people responsible for an injury don’t have to pay for it, the cost of the injury doesn’t go away; it just gets passed on to someone else. For example, if the responsible party’s liability insurance doesn’t pay for the injury, medical bills get passed on to the injured person’s health insurer. Or the bills may be paid by a government program, or sometimes care providers and hospitals have to absorb the cost and raise their rates to make up for it.

Barbara O’Brien
June 1, 2009

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Health care reform surely will be welcome by uninsured Americans, including those with mesothelioma and other asbestos-related disease. But we’re going to have quite a fight on our hands to get it passed.

Recently some Republicans in Congress reluctantly admitted that Americans genuinely want health care reform. So, rather than just say no to the Democrats’ ideas, these Republicans — representatives Paul Ryan (Wis.) and Devin Nunes (Calif.), and senators Tom Coburn (Okla.) and Richard Burr (N.C.) — presented their own health care reform proposals.

According to Janet Adamy at The Wall Street Journal, the GOP plan would eliminate the tax break employers get for providing health benefits to their employees. Health care benefits would become taxable income, subject to payroll taxes.

No, I’m serious. That’s the plan.

Instead, the government would give tax credits to individuals purchasing their own health coverage. Republicans are talking about an annual tax credit of $2,300 to each individual and $5,700 to each family that would offset the cost of health insurance — a cost that averages between $10,000 and $12,000 per family.

On the other hand, the Republican plan also calls for the establishment of state health insurance exchanges that would provide a “one-stop marketplace” to shop for private insurance. Insurers in the exchange would be required to sell insurance to anyone, regardless of age or health status, and regulators would see to it that companies do not cherry-pick customers. This is a big departure from the plan GOP presidential candidate John McCain offered last year. McCain’s plan had no provision whatsoever for people insurance companies refused to insure.

Writing for the Washington Post, Ezra Klein is encouraged that Republicans are endorsing insurance exchanges. “Like Democrats, they’re arguing that individuals cannot successfully navigate the insurance market, and they need the protection of government regulation and the bargaining power that comes from a large risk pool,” Klein writes.

May 21, 2009
Barbara O’Brien

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Let’s see — a star witness who flirted with perjury and prosecutors who withheld evidence — the W.R. Grace trial? Yes, but it’s also a description of the Ted Stevens trial, which was also prosecuted by U.S. attorneys appointed by President George W. Bush.

This may mean nothing, or it may mean something, but at least it’s worth noting. As I mentioned in the last post, the federal prosecutors who failed to get a conviction in the W.R. Grace asbestos contamination trial are accused of withholding evidence that might have helped the defense. And Judge Donald W. Molloy said that one of the prosecution’s star witnesses “came as close as I would ever want to see to perjury.”

What’s worth noting is that this is essentially the same conduct that caused our new attorney general, Eric Holder, to drop all charges against Senator Ted Stevens of Alaksa. In 2008 the Senator was indicted by a federal grand jury on seven counts of failing to properly report gifts. The gifts included renovations to the Senator’s home by the VECO Corporation, which builds things for the oil industry in Alaska.

Stevens was found guilty in October 2008. So why did Attorney General Holder drop the charges a few months later? There was a pattern of prosecutorial misconduct, but Holder was most disturbed when he learned the federal prosecutors had withheld notes from a meeting with VECO CEO Bill Allen. In the meeting, Allen told the federal prosecutors that the value of the goods and services he’d given Stevens were $80,000. At trial, however, Allen claimed he had provided Senator Stevens with $250,000 worth of goods and services.

This is strikingly similar to the prosecution’s conduct in the recent W.R. Grace trial. To recap: The W.R. Grace Company, which operated mines in the vicinity of Libby, Montana, was accused of spreading deadly asbestos fibers throughout Libby, resulting in 2,000 cases of illness and about 225 deaths from mesothelioma and other asbestos-related diseases. However, on May 8 a jury acquitted Grace and three former executives of all criminal charges.

In the Grace trial, the government withheld evidence that could have been used to discredit key witness Robert Locke, a former Grace executive. Locke testified at trial that he helped officials obstruct a federal health study of the Libby mine. The evidence withheld by the prosecution consisted mostly of emails that revealed Locke’s extreme bias against Grace.

Now, even though the Bush Administration has officially faded into history, the U.S. attorneys appointed by President Bush have not been replaced by President Obama. And given the U.S. attorney scandal, allegations of misconduct by federal prosecutors need to be examined especially critically.

The top federal prosecutor in Montana is William W. Mercer, known to be a Bush team player. According to Richard B. Schmitt of the Los Angeles Times, “When a team of young White House and Justice Department staffers decided to fire a group of U.S. attorneys on Pearl Harbor Day 2006, it was left to Mercer to be the bearer of the bad news to some of the prosecutors.”

Schmitt continued,

“Mercer also had the distinction of simultaneously holding two Justice Department jobs about 2,000 miles apart. Eventually, he had to relinquish one, a senior post at headquarters here.

“Mercer remains the top federal prosecutor in Montana — despite periodic calls for his resignation by a federal judge there and by one of the state’s Democratic senators. He is one of only a few U.S. attorneys who may survive all eight years under Bush.”

We can assume that Mercer was not running a tight ship in Montana. But there’s one more odd connection between the Grace and Stevens cases. In both trials, one might assume the Bush Administration’s interests were in acquittal. Ted Stevens was a Republican senator. The Bush Administration also had a clear pattern of favoring corporate interests over people.

If I were a conspiracy nut, I would put on my tinfoil hat and suggest the Bush-appointed attorneys were instructed to throw the fights. However, plain incompetence is more likely at fault.

May 13, 2009
Barbara O’Brien

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In the days after the W.R. Grace verdict there appears to be plenty of blame to go around. Some fault the prosecutors. But Canda Harbaugh writes for The Western News that some Libby residents are angry at the judge, U.S. District Judge Donald Molloy.

“’When you have a judge like Molloy,’ Libby resident Dale Herreid said Friday, ‘you know where the case is going – right down the toilet, just like it did.’

“Herreid, who suffers from the effects of asbestos exposure, said he has followed the trial closely since it began in February. He believes that Molloy withheld pertinent information from the jury through controversial evidentiary rulings.

“’He wouldn’t let the jury hear the evidence,’ Herreid said. ‘You can’t really blame the jury when the judge didn’t allow the information to be heard.’”

Len Iwanski reports for the Associated Press that others believed the judge was unfair to the prosecution. “He [Molloy] was hostile to the government in court,” University of Michigan Law Professor David Uhlmann said. “Obviously it did not help the government that the judge presiding over the case was so antagonistic.” Uhlmann is a former chief of the environmental crimes section in the U.S. Justice Department.

Judge Molloy had, for example, ruled that 34 asbestos exposure victims who were prosecution witnesses would not be allowed in court except to testify. This decision was reversed by the 95th Circuit Court of Appeals. Molloy also excluded all but seven of the prosecution’s 53 exhibits. Most of these were old documents and memos between high-ranking Grace officials that predated the Clean Air Act’s criminal statute.

Other people who know Judge Molloy defend him as being firm but fair, and a judge who runs a strict courtroom.

Molloy does not have a history of favoring the federal government in court. Last year Judge Molloy reversed a federal government decision to remove gray wolves from the endangered species list. In 2006, he blasted U.S. Attorney William Mercer from the bench, accusing Mercer of federalizing a state case for the sake of political grandstanding.

April 14
Barbara O’Brien

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Recap: This is the fourth post in a series. Part I explains that “tort reform” — an idea being pushed by conservatives as the cure for many economic problems, including high health care costs — has never delivered the promised results, yet conservatives keep making the promises. Part II documents how a cabal of extremely wealthy individuals and family trusts has been able to manipulate public opinion to sell “tort reform” to the public. Part III looks at arguments being made in favor of tort reform and shows that they are mostly hot air.

This part of the series is about the rights and protections citizens lose because of “tort reform.”

In brief, the word “tort” generally refers to personal injury. If Sally did something that caused John to be injured, John can sue Sally for damages. Tort law is vast and complicated. Certain situations present difficult issues, such as mesothelioma resulting from decades-past asbestos exposure, that are difficult to determine fairly.

On the other hand, you can read in Part I about residents of Las Vegas who contracted hepatitis C because of a clinic’s malpractice. It is possible some plaintiffs who tested positive for the hepatitis C virus may be unable to sue because the statute of limitations ran out before they developed symptoms.

But depriving citizens of the right to sue is more than unfair. Some tort reform laws amount to violations of the 7th Amendment — “In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, ….”

Tort reform puts limits on both the ability to sue and the amount of damages the plaintiff can be awarded. People are told the reform will reduces “frivolous” or “junk” lawsuits, which sounds grand. But tort reform blocks legitimate lawsuits as well, and sometimes takes away a citizen’s right to sue.

No Remedies in Texas

As explained in Part II, in the 1980s Karl Rove identified tort reform as a winning Republican issue. His client, George W. Bush, made tort reform a big part of his platform when he ran for governor of Texas and president of the United States. One of his first acts when he became governor in 1995 was push for a massive overhaul of Texas tort law.

This overhaul amounted to gutting Texas consumer protection law. Among the first people to be hurt by the change in law were homebuyers, especially people who had used their life savings to build new homes. Texans who found their new homes had serious construction flaws were shocked to find out they could not sue the builders. The law stipulated their only recourse for compensation was through private arbitration. But the arbitration system was expensive and set up to favor the builders. So, people who paid hundreds of thousands of dollars for homes they could not live in were mostly out of luck. (See David Savage, “The Race for the White House: Texans Still at Odds Over Bush’s Legal Reforms,” The Los Angeles Times, September 22, 2004.)

Damage Caps

One of the most common features of tort reform law is a cap on “non-economic” damages. Let me explain:

· Economic damages are out-of-pocket expenses caused by the injury. These can include medical expenses, lost income, and the cost of replacing or repairing damaged property. These are usually calculated from bills, receipts and estimates.

· Non-economic damages can be awarded for subjective, non-monetary losses, such as pain and suffering, disability, disfigurement, the loss of the use of something, or mental anguish.

It is sometimes thought that non-economic damages are less necessary, because they don’t represent out-of-pocket expenses so the plaintiff doesn’t really need the money.

But consider the story of 53-year-old David Fitzgerald, who lost both legs and both arms because of an infection contracted while he was in a hospital for ulcer surgery. The hospital simply did not treat the infection — which was treatable — promptly or aggressively enough, and eventually Fitzgerald’s limbs had to be amputated to save his life.

In March 2009 a jury awarded Fitzgerald $6.72 million in economic damages and $11 million for pain and suffering. But the $11 million immediately was reduced to $250,000, because Texas law puts a cap on non-economic damages.

You might think $7 million is still a lot of money. But some of that goes to Fitzgerald’s lawyers. And consider he is still a middle-aged man who needs constant assistance just to clean, dress and feed himself, never mind the cost of whatever prosthetics or rehabilitation are possible now or might be possible in the future.

Remember, economic damages usually are limited to expenses the plaintiff can document at the time of the trial. In cases of genuinely catastrophic injury, such as Fitzgerald’s, the plaintiff’s real expenses for the years of his life after the trial may be impossible to calculate. For these plaintiffs, the non-economic awards are not just a frill. One of the purposes of so-called non-economic awards is to recognize the effect of an injury on the rest of the injured person’s life.

Some states not only cap non-economic damages; in many cases they also limit economic awards to the amount of receipts or bills the plaintiff can produce at the time of the trial. It should be noted also that a few states are re-thinking rigid, one-size-fits-all caps and giving judges and juries discretion to lift them if a case involves permanent physical injury, some kind of catastrophic injury or gross negligence or recklessness.

Also, note that punitive damages are not considered to be the same thing as non-economic damages, because punitive damages are intended to punish the guilty party, usually for reckless or malicious behavior, and deter others from the same behavior.

Benefits to Society?

As I’ve documented in the previous parts of this series, the one tangible, beneficial effect of “tort reform” is lowering physician malpractice insurance costs. For this reason, if you do a web search for “non-economic damages” you can find argument after argument for capping them, often written from a physician’s point of view.

But in no state have such caps reduced health care costs or lowered the rate of health insurance premiums, as advocates promise they will. For this reason, I think we ought to consider some other remedy for physician malpractice costs, rather than punishing injured people like David Fitzgerald.

Barbara O’Brien
May 19, 2009

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