beasley allen law firm · 2 i. capitol observations recent alabama poll results are most...

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May 2009

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I.CAPITOLOBSERVATIONS

RECENT ALABAMA POLL RESULTS AREMOST INTERESTING

The State of the State Survey forAlabama conducted by the CapitalSurvey Research Center was completedlast month. This statewide survey,which covered three major topics, hadsome rather interesting findings. Thetopics covered were President Obamaand the economy; bingo gaming legisla-tion; and the proposed removal of thesales tax on groceries. These are themajor findings from the survey:

• 86% want their legislators to vote forthe bingo bill allowing a vote of thepeople, 72% state they will vote toapprove regulating and taxinggaming, and 65% state that they willbe less likely to vote for the reelec-tion of their legislators, if they voteagainst allowing a vote on the issue.

• 64% support removing the sales taxon groceries with income caps.

• 67% believe President Obama is pro-viding strong leadership and doingthe best job possible.

• 68% are dissatisfied with how thingsare going nationally and about evenlydivided on how things are going inthe state.

• 60% believe President Obama hasmade a good faith effort to workwith Republicans while 33% believeRepublicans have made a good faitheffort to work with the President.

• Voters are hopeful about theeconomy, believe the problems wereinherited, and want to focus on theeconomy getting better rather thanreducing the debt.

• Voters oppose Governor Riley’srefusal of federal recovery funds forunemployment.

• Voters overwhelmingly support regu-lating and taxing bingo gaming and acompact with the Indian gamingoperations.

The poll results indicate broadsupport for the positions stated aboveacross party and demographic lines. Ihave found this polling group to be veryaccurate in its surveys. It will be interest-ing to see how the elected officials dealwith the issues covered in the survey.Source: Capital Survey Research Center

MORE MEDICAID FRAUD CASES SET FORTRIAL IN ALABAMA

Judge Charles Price has set a numberof the Alabama Medicaid fraud cases fortrial all the way into 2011 and that’s verygood news for Alabama citizens.The firstthree companies will be consolidatedfor trial beginning on June 22nd.

PFIZER SETTLES ALL REZULIN CASES

Rezulin was prescribed to approxi-mately 1.9 million American diabeticsbefore being pulled from the market in2000 after the prescription medicinewas linked to at least 63 deaths fromliver failure. Numerous lawsuits werefiled on behalf of those who died orsuffered serious liver problems fromtaking this drug.

Pfizer Inc. has now resolved all butthree of 35,000 claims related toRezulin for a total of about $750million. Pfizer, which is acquiring rivalWyeth for almost $64 billion, paidabout $500 million to settle Rezulincases consolidated in federal court inNew York. The company also paidanother $250 million to resolve suitsfiled in state courts.

In 2001, a Texas jury ordered Pfizerto pay $43 million to a 63-year-old dia-betic who suffered liver damage whiletaking the drug. That case was subse-quently settled for $30 million. In 2002,an Oklahoma jury ordered the drugmaker to pay $11.6 million in damagesto the family of a man who died aftertaking Rezulin. That award later was

upheld on appeal.Our firm represented over 5,000

Rezulin victims and we settled all ofour clients’ claims in early 2004. Weare pleased to have been able to helpthose clients and their families reach aresolution of their claims.Source: Bloomberg

OREGON SUES OPPENHEIMERFUNDS OVERCOLLEGE SAVINGS PLAN LOSSES

Oregon has become the first state totake legal action against Oppenheimer-Funds, Inc. over an estimated $37

IN THIS ISSUE

I. Capitol Observations . . . . . . . . . . . . 2

II. Recent Filings and Settlements . . . . 3By the Firm

III. Legislative Happenings . . . . . . . . . . 6

IV. Court Watch . . . . . . . . . . . . . . . . . . 6

V. The National Scene . . . . . . . . . . . . . 8

VI. The Corporate World . . . . . . . . . . . 9

VII. Congressional Update . . . . . . . . . . 12

VIII. Product Liability Update . . . . . . . . 14

IX. Mass Torts Update. . . . . . . . . . . . . 18

X. Business Litigation . . . . . . . . . . . . 21

XI. Insurance and Finance Update . . . 21

XII. Securities Cases . . . . . . . . . . . . . . 23

XIII. Employment Law. . . . . . . . . . . . . . 24

XIV. Predatory Lending. . . . . . . . . . . . . 26

XV. Premises Liability Update . . . . . . . 27

XVI. Workplace Hazards. . . . . . . . . . . . 29

XVII. Transportation . . . . . . . . . . . . . . . 30

XVIII. Arbitration Update . . . . . . . . . . . . 32

XIX. Nursing Home Update. . . . . . . . . . 33

XX. Healthcare Issues . . . . . . . . . . . . . 34

XXI. Environmental Concerns . . . . . . . . 35

XXII. The Consumer Corner. . . . . . . . . . 37

XXIII. Recalls Update . . . . . . . . . . . . . . . 41

XXIV. Firm Activities . . . . . . . . . . . . . . . . 46

XXV. Special Recognitions . . . . . . . . . . . 48

XXVI. Some Closing Observations . . . . . . 49

XXVII.Some Parting Words . . . . . . . . . . . 51

www.JereBeasleyReport.com 3

million in losses to 60,000 Oregon fam-ilies who invested in the OregonCollege Savings Plan.The suit, filed onApril 13th in an Oregon state court, cul-minates a three-month investigation ofcomplaints that Oppenheimer aban-doned a conservative bond fund invest-ing strategy in 2007 for a riskierportfolio that included credit defaultswaps and other high-risk derivatives.It’s alleged in the suit that the plan hadbecome “a hedge-fund like investmentfund that took extreme risks in a searchfor speculative large gains.”When filingthe suit, John Kroger, Oregon’s AttorneyGeneral, observed:

I think they were hoping to getrisky equity-like returns in abond fund. If they succeeded, theylook like superstars, but unfortu-nately the strategy did not work.

The plan was marketed to parentssending children to Oregon colleges asan “ultra-conservative” college portfoliothat would protect principal andprovide income.The plan made routinebond fund returns until 2008,when theCore Bond Fund lost nearly 36% of itsvalue even though the benchmarkindex it was expected to use for invest-ment decisions was up by 5%.The fundlost an additional 10% in the firstquarter of 2009, according to the Attor-ney General. The plan included riskycredit default swaps and other deriva-tives as part of a long-term investmentplan. The fund was advertised as pre-serving capital for those close tosending children to college in a shortnumber of years and it was notintended as a long-term strategy. TheState Treasurer replaced the Core BondFund managed by Oppenheimer with adifferent fund on March 27th.The suitalleges negligence and breaches of con-tract and fiduciary duties.As expected,Oppenheimer denies any liability inthis matter.Source: Law.com

II.RECENT FILINGSANDSETTLEMENTS BY THE FIRM

SETTLEMENT OF FORD EXPLORER ANDFIRESTONE TIRE CASE

As most Americans know, Ford andFirestone were involved in the world’slargest tire recall in history a few yearsback. Firestone produced a specialdesigned 15-inch ATX tire in 1990which were installed by Ford onExplorers as original equipment.Tragi-cally, the Firestone tires were defectiveand the Explorer was prone to rollover.Obviously, that was a very bad marriageand one that resulted in an untoldnumber of catastrophic injuries anddeaths.Unfortunately, the Ford and Fire-stone saga continues.

We have handled a number of casesover the past several years arising outof Firestone tire detreads and Explorerrollovers. Most recently, our firm settleda case on behalf of Mrs. EtheleneBaldwin, a Montgomery resident, whohad been involved in a Ford rollover in2007. Mrs. Baldwin was a front seat pas-senger in a 1996 Ford Explorer. She andother family members were traveling toBirmingham on I-65 when the left reartire detreaded and the Explorer rolledover. Mrs. Baldwin, who was properlyrestrained in her seat belt, was partiallyejected from the vehicle during therollover and was severely injured. Eventhough the driver was traveling athighway speeds, approximately 70miles per hour, he was unable tocontrol the vehicle when the tiredetreaded.

The tire detreaded because of defectsknown both to Ford and Firestone. Itwas originally a spare tire on thisExplorer. Due to a recall, four of theoriginal Firestone tires were taken offthe Explorer, but the spare remained inthe vehicle. Eventually the spare wasput on the left rear of the Explorer andit was involved in this rollover.

Both Ford and Firestone knew allabout the defective tires several yearsbefore that first tire recall took place inthe United States. In fact, several yearsprior to the first recall, Ford imple-mented a series of “secret recalls” inVenezuela. Ford recognized theproblem there and eventually remediedthe problem by making the shockabsorbers on the Explorer muchstronger. We knew from handling anumber of prior cases, includingseveral arising in Venezuela, that theremedy was to replace the shocks withstiffer and stronger ones and to placethem further outboard. The same fixwas recommended by Ford engineersfor the U.S. market, but it wasn’t done.In fact, NHTSA was not even informedabout all of the detread and rolloverproblems in Venezuela and severalother foreign countries.

Firestone first recalled the defectivetires in the United States in August of2000. A recall notice was sent out atthat time by first class mail. Over thenext few years, Ford and Firestonecame to realize that millions of recalledtires were still on the road and in use.Subsequently, a second recall was donein 2006. Significantly, Firestone sent outthe second recall notice by third classmail and without a reply card. As youmay know, third class mail is not for-warded if the addressee’s address haschanged. Also, the notice is notreturned to the sender if it is not deliv-ered.A tremendous number of ownersnever got a recall notice, resulting inmillions of defective tires remaining onU.S.highways.

Neither our client nor the used carlot that sold the Explorer received anyrecall notice from either Ford or Fire-stone. A prior owner of this Explorerreceived a recall notice and, as a result,the four Firestone tires that were onthe ground were replaced. But thespare remained with the vehicle.

The Defendants in the case, whichwas set for trial on April 20th in Mont-gomery County, were Ford Motor Co.,Bridgestone/Firestone North AmericanTire LLC. We were able to settle thecase with all Defendants on the Thurs-


day prior to the trial date.The amountof the settlement from each Defendantis confidential.

During our investigation of theBaldwin case, we found that Firestonetires that had been spares were still onFord Explorers.Tragically, fatalities andserious injuries will continue until suchtime as Ford and Firestone locate anddestroy all of the recalled tires that arestill in service.

LaBarron Boone, Greg Allen, and Ihandled this case for Mrs. Baldwin.Weknow all that this lady has been throughand what the future holds for herbecause of her injuries and disability.Weare most pleased to have reached a set-tlement in her case that will make thefuture much better for her.

SETTLEMENT OF ROOF CRUSH CASE

Our firm settled a case recently thatwas pending against General Motors onbehalf of our client who lost his wifewhen the 2001 Chevrolet S-10 Blazer inwhich they were traveling rolled over.Carl Hammond was driving the Blazer,his wife Theresa was riding in the frontpassenger seat and their two boys werein the back seat. All of them werewearing their seat belts.While travelingon U.S. Highway 431, just outside ofHuntsville, at a speed of approximately45 mph, the vehicle struck water,hydroplaned and rolled over in theroadway. During the rollover, the roofsubstantially crushed downward andinward over the front passenger area,compromising the vehicle’s survival andthe performance of Theresa’s seat belt.

As a result of the roof crush and seatbelt failure, Theresa was partiallyejected out of the vehicle, causingsevere injuries which led to her death.Our client and his sons walked awayfrom the accident with virtually noinjuries. It was clearly a survivableevent but for the roof crush. But, theywill forever have to live with the loss ofa wife and mother because of thedesign decisions GM made whichignored rollover safety.

In a rollover accident, if an occupant

stays in the vehicle and the vehicle’ssurvival space is not compromised, thatperson should survive the accident.The roof is part of the structuralsupport of a vehicle and helps formpart of the “survival space” in a vehiclein the event of a crash. If a roof crushessubstantially during an accident, itintrudes into the occupant’s “survivalspace,” thus, exposing occupants toserious and fatal injuries.

There are an estimated six millionBlazers, including pickup trucks, on theroad today. Studies have shown thatSUVs are two and a half times morelikely to roll over than passenger cars.In a recent report by the InsuranceInstitute for Highway Safety, it rankedthe Blazer among the least-safe SUVs onthe road.

GM has known for many years thatits roofs are too weak.The company’sown internal safety guideline for its testdrivers reveal that GM knew all aboutthe danger of its weak roofs. GM’ssafety guidelines require that its testdrivers use a helmet and seat belt for adriving maneuver as simple as lanechanges from zero to 55 mph if itsstatic stability factor (SSF) is less than1.10. This guideline includes thepopular Blazer and Jimmy vehicles.Further, GM’s Safety Guidelines requirethe installation of a roll bar or roll cagein the same vehicles under these samesimple driving maneuvers in order toprotect the occupants from roof crush.

GM continues to deny that roofcrush causes injuries. Yet, it puts rollcages on its trucks for its own employ-ees to protect them from roof crush.The sad reality is that, for 32 years, GMhas known that its roofs on its vehicleswere weak and not capable of with-standing forces in real world rolloveraccidents. But, during those 32 years,instead of strengthening its roofs toprevent deaths and serious injuries, GMhas continued to deceive the federalgovernment and the motoring publicby claiming that roof crush does notmatter. GM’s failure to build its vehicleswith strong roofs continues to tragi-cally take the lives of people like ourclient’s wife and others.The Hammond

case was pending in Madison County atthe time of settlement.The amount ofthe settlement is confidential at GM’srequest. Rick Morrison from our firmhandled this case for the Hammondfamily and did a very good job forthem.

RHINO LAWSUIT FILED IN GEORGIA

Our firm continues to pursue claimsagainst Yamaha for injuries resulting indefects related to the Rhino. As dis-cussed in previous issues of the Report,the Yamaha Rhino is a deadly vehiclethat overturns under very foreseeableoperating conditions. One of theYamaha corporations operates out ofGwinnett County, Georgia. Hundredsof people have been injured or killedby the Yamaha Rhino. Many of thosehave chosen to file their cases in Gwin-nett County, Georgia.Thus far approxi-mately 70 cases have been filed there.We have filed and continue to file casesin that court and in other venues onbehalf of those injured and killed bythe Rhino. Chris Glover, Cole Portisand I will be handling these cases forthe firm.

PRODUCT LIABILITY LAWSUIT FILED AGAINSTA TREE STAND MANUFACTURER

Our firm recently filed a product lia-bility lawsuit against the manufacturerof a tree stand. In this case, we repre-sent a young man from North Carolinawho suffered severe back injurieswhen the ratchet strap on the treestand broke causing the tree stand andthis young man to fall from the tree tothe ground.The hunting tree stand waspurchased from Wal-Mart.Tragically, thisparticular tree stand was subject to arecall because of the defective strap.However, it was still being sold at thetime of the accident.

When reviewing and investigatingthe claim on behalf of our client, weidentified other lawsuits where themanufacturer of the tree stand wassued following a failure identical to ourclient’s fall. One of those incidents


occurred in Alabama.Through that liti-gation we discovered the straps for thetree stand were made by a Chinesemanufacturer. The straps were notproperly tested and this failure to testmost likely contributed to the treestand failures.

The company filed bankruptcy, buthas since emerged from it and is still inthe business of manufacturing andselling tree stands. Our client used tobe a brick mason, but as a result of hisinjuries he can no longer work. Ourclient is married and has children. Hislife has been forever changed becauseof corporate irresponsibility. KendallDunson from our firm will be the leadlawyer in this case.

ANOTHER WORK PLACE INJURY RESULTS INA PRODUCT LIABILITY SUIT

Each year thousands of workers areinjured or killed at their work place.Although a state’s worker’s compensa-tion system places limitations on theability of employees to hold employersaccountable for these work-relatedinjuries, many people do not realizethat there may be another availablesource of recovery. Injuries in the workplace are often caused by defectiveproducts. If a product causes an on-the-job injury, a product liability suit maybe brought against the product’s manu-facturer. Unfortunately, catastrophicinjuries, deaths, and amputations com-monly occur from defective productsfound in the work place.

No clearer example of the tragic con-sequences of a defective product in thework place can be found than in one ofour current cases.We represent a hard-working blue collar man who wasseverely burned as a result of a defec-tive product. Our client was working ina manufacturing plant in Kentucky.Theplant has a trolley system that carrieshot molten aluminum in ladles acrossthe ceiling. These trolleys carry theladles over the heads of the employeesworking below the system on the floorof the plant. In this particular case, one

of the back wire ropes attached to thetrolley broke, causing a ladle full of themolten aluminum to spill on the floor.

The aluminum ignited hydraulic fluidon the floor creating a flash fire. Ourclient was unfortunately walking underthe ladle at the time the incidentoccurred and was severely burned as aresult of the flash fire. Our client sus-tained serious burns to his body.His medical bills are approaching$750,000.00. Because of his injuries, hewill not be able to work for the rest ofhis life. Not only was his life changedforever, but his wife’s life has alsochanged. She is now her husband’sprimary caretaker as he cannotperform everyday life activities withoutassistance.

Even though the rope was specifi-cally manufactured for this type oftrolley system, the rope was defectivelydesigned because it was not strongenough to hold the system when thetrolley’s ladle was full of hot moltenaluminum.Through discovery, we willlearn the extent, if any, of testing themanufacturers did on the rope. Specifi-cally, was testing performed by themanufacturer under similar conditionsand in a similar environment as theconditions and environment found atthe plant? Kendall Dunson is lead attor-ney on this case. If you need additional information on work-placeinjury litigation you can contactKendall at 800-898-2034 or [email protected].

WRONGFUL DEATH SUIT FILED FOR ILLEGALSALES OF ALCOHOL TO MINORS

Our firm represents the parents of a19-year-old boy who was tragicallykilled in an automobile accident. It wasdiscovered that, on the night of theaccident, the Defendants sold beer tothis teenager on two separate occa-sions.The alcohol sales were recordedby video surveillance tapes.The tapesconfirmed that the clerk for the con-venience store never requested anyidentification from the minor.

In the early 1900s, the Alabama Legis-lature recognized the dangers associ-ated with the selling of alcohol tominors and saw the urgent need toprotect children from their own imma-turity as it relates to the drinking ofalcohol. So the 1907 Legislature passeda statute prohibiting the furnishing ofliquor to minors.This legislation even-tually evolved into Ala. Code §6-5-70(1975). This code section has beenamended over the years, but inessence, it still makes it unlawful to sellor furnish spirituous liquor to a minor.What makes our case particularly tragicis, in the months leading up to thisyoung man’s death, the parents of thischild repeatedly contacted the Defen-dants’ store informing them that theirson was a minor.They literally beggedthem not to sell any alcoholic bever-ages to him. The convenience store’sconduct in this case is abhorrent.

In 2007, an estimated 12,998 peopledied in drunk driving related crashes.Many of those who died were minors.The company’s conduct in this caserepresents the epitome of irresponsibil-ity and a complete disregard for thelaws of the State of Alabama and thesafety of minors. Mike Crow from ourfirm will be the lead lawyer in this case.

III.LEGISLATIVEHAPPENINGS

ALABAMA LEGISLATURE IS MOVING INTO THEHOME STRETCH

By the time this issue is received theAlabama Legislature will have lessthan ten legislative days left in theRegular Session. Obviously, there is agreat deal of work to be done with arelatively short time to do what needsto be done. There are some toughissues left to be dealt with. As youprobably know, the state budgets weresaved from fiscal disaster because ofthe stimulus money received from thefederal government. Without that


money state services and public edu-cation at every level would have beenin jeopardy and the state in a real“fiscal mess.” It would have beenabsolutely impossible to pass budgetswithout severe cuts in essential serv-ices if there had been no stimulusfunds. Nobody can dispute the factthat the stimulus money saved the dayfor Alabama citizens.

Eventually a Governor and Legisla-ture, acting in concert, in a bipartisanmanner, will have to deal with thefiscal problems that have been virtu-ally ignored to a very large degreeover the past 25 years. For years, wehave seen budgets passed withpatches and short-term fixes, butwith no real permanent fixes. Thenext Governor will have his or herhands full and will have to makesome tough decisions at a very earlydate in 2011.

ALABAMA STILL NEEDS A NEWCONSTITUTION

While there is still time for passage, itdoesn’t appear our state will be gettinga new constitution in the immediatefuture. Unless things pick up very soonHouse Joint Resolution 91 and SenateJoint Resolution 20 won’t pass duringthe current session. Only a great deal ofpublic support from around the state,passed on to the Legislators, can makethe difference. If enough people fromaround the state let their House andSenate members know that theysupport a new constitution the resolu-tion will have a chance to pass. Thatwould light a fire in the House andSenate on this issue. But time may havealready run out for this session.

As a matter of fact, the Joint Resolu-tion will allow the people of Alabamato vote for a Constitution Conventionto rewrite the 1901 Alabama Constitu-tion.The resolution was introduced inboth the House and Senate by SpeakerPro Tem Demetrius Newton in theHouse (HJR 91) and by Senator TedLittle in the Senate (SJR 20). Each Reso-lution—unlike a bill—was sent to the

Rules Committee in the respectivechambers. One of them will have tocome out of committee very soon ifthere is to be any chance for passageduring the session.

As you may know, the Joint Resolu-tions are the same as the bills that havebeen offered by the sponsors for thepast three years.The only difference isthat a resolution doesn’t requireapproval by the Governor. Many Legisla-tors see the importance of movingforward on this issue and favor the con-vention approach. While the currentresolutions have 26 co-signers in theHouse and 15 in the Senate, there aresome powerful special interests at workopposing a new Constitution.They likethe old one because it helps themcontrol government at every level.

If you believe we need a new consti-tution and also trust the people ofAlabama to make our own decisions,call your Legislators and let themknow you want them to vote for theresolutions.Ask them to allow you andyour fellow Alabamians to vote onwhether to call a Constitutional Con-vention. In my opinion, a new constitu-tion is badly needed and is importantto our state’s future.

ALABAMA’S FIRST BLACK LAWMAKERSHONORED

Governor Bob Riley has signed a res-olution honoring the state’s first blacklawmakers.The resolution, sponsoredby Rep.Alvin Holmes of Montgomery,says black Alabama residents played anintegral part in the Legislature from1868 to 1878.There were 33 black law-makers in the Legislature at the heightof Reconstruction in 1874.The Gover-nor signed the resolution on April 7th inthe Old House Chamber.The names ofthe black Legislators will be placed onplaques that will be displayed in therotunda, on the grounds outside theCapitol and inside the entrance to theAlabama Statehouse. In my opinion, thisis a good thing and long overdue. FewAlabamians know every much aboutthe role played by these black Legisla-

tors in our state’s history.Source: Associated Press

IV.COURT WATCH

PHILIP MORRIS WILL FINALLY HAVE TO PAYIN OREGON

The U.S. Supreme Court has dis-missed Philip Morris USA’s appeal of a$79.5 million jury award to a smoker’swidow. Hopefully, this will end the ten-year fight in the courts. In a one-sen-tence order, the court left in place aruling by the Oregon Supreme Court infavor of Mayola Williams. Repeatedlythe Oregon court, on numerous oppor-tunities, upheld a verdict against theAltria Group Inc. unit in a fraud trialthat took place way back in 1999.

The judgment has grown to justabout $150 Million including accruedinterest.The justices heard argumentsin the case in December. Philip Morrishad argued that the award should bethrown out and a new trial orderedbecause of flaws in the instructionsgiven jurors before their deliberations.Business interests wanted the highcourt to use the case to set firm limitson the award of punitive damages.Thecase has been in the appellate courtsfor ten years and it’s now over.The juryhad found that Philip Morris should beheld accountable for misleading peopleinto thinking cigarettes weren’t danger-ous or addictive.

Ms. Williams’ husband, Jesse, was ajanitor in Portland who startedsmoking while he was in the Army inthe 1950s. Mr.Williams died in 1997, sixmonths after he was diagnosed withlung cancer. At trial, the widow wasawarded $800,000 in actual damages.The punitive damages are about 97times greater.A state court previouslycut the compensatory award to$521,000. Sixty percent of the awardwill now go to an Oregon crime-victims fund.

The Oregon high court made its firstdecision in 2002, refusing to hear an

appeal from Philip Morris.Then the U.S.Supreme Court rejected the judgmentof nearly $80 million, saying in anothercase that damages generally should beheld to no more than nine times actualeconomic damages. It declined,however, to make that a firm rule. Next,the Oregon Supreme Court upheld thepunitive damages,citing “extraordinarilyreprehensible”conduct by Philip Morrisofficials.The U.S. Supreme Court thentook a second look at the case. In 2007,the court said, in a 5-4 decision, thatjurors may punish a Defendant only forharm done to someone who is suing,not other smokers who could makesimilar claims.

The state court was told to recon-sider the award in the context ofinstructions for the trial jury that PhilipMorris proposed, but which wererejected by the trial judge. In January,the Oregon court said there were otherdefects in the instructions that violatedOregon law, and again supported thetrial judge’s decision not to give theproposed instructions to the jury. It’sreal good to see this case finally cometo a conclusion. Relatively few victimshave ever been successful in litigationagainst the politically-powerful tobaccoindustry. Ms.Williams and her lawyersare to be commended for seeing thiscase to an end.Source: Associated Press

WYETH MUST FACE WOMAN’S PREMPROLAWSUIT

A Texas appeals court has ruled thatWyeth, the drug maker being acquiredby Pfizer Inc., must face a lawsuit filedby a woman who claims her breastcancer was caused by the menopausemedicine Prempro.A state court judgehad dismissed the case on federal pre-emption.The court said in its April 14th

ruling, that Susan Brockert’s “failure-to-warn” claims aren’t preempted byfederal drug-labeling regulations, over-turning the lower court judge’s finding.The ruling sent the case back to thelower court for further proceedings. Inits ruling, the appeals panel cited the

U.S. Supreme Court’s Levine decision.As widely reported, the high court inthat case said patients can sue drugmakers for failing to provide adequatesafety warnings, even when a treatmentand its packaging are approved by theU.S. Food and Drug Administration.

While this is great news for Ms.Brockert, who contends Wyeth’sPrempro caused her breast cancer, it’salso very good news for the many Texaswomen who have filed similar lawsuits.Related lawsuits over hormone therapydrugs such as Prempro, Premarin andProvera that had been on hold pendinga decision will now move forward.Approximately 14,000 women havefiled hormone therapy lawsuits againstWyeth and Pfizer.As many as 6 millionwomen took the hormone-replacementtherapies to ease menopause symp-toms, such as hot flashes and moodswings, before a 2002 study turned upcancer links.

In January, we reported on SenatorGrassley’s letter to Wyeth’s CEO,Bernard Poussot, kicking off an investi-gation into their role in paying ghost-writers to publish medical articlesfavorable to Prempro. In March, wereported on the ever-mounting evi-dence that hormone therapy causesbreast cancer. It should come as no sur-prise that in Pfizer’s recent announce-ment to purchase Wyeth for $68billion, they will pay Poussot $53million to resign. Not bad for a manwho seems to have crossed ethicalguidelines in his work.

Ted Meadows, Russ Abney andMelissa Prickett, lawyers from our firm,are working on hormone therapycases. They continue to investigatepotential cases and are filing newcases. The firm will be litigating thecases that have already been filed andare now pending. If you need moreinformation on this subject, contact anyof the lawyers listed above at 800-898-2034 or by email at [email protected], [email protected] or [email protected]: Bloomberg

RETIRED SUPREME COURT JUSTICE FAVORSMERIT SELECTION OF JUDGES

Sandra Day O’Connor, the retired U.S.Supreme Court Justice, believes stronglythat merit selection is the best way tochoose judges and keep them inde-pendent. This well-respected publicservant says it’s hard for judges toremain impartial knowing their deci-sions will influence how long theykeep their jobs. She believes the moneybeing spent by people running for thejudiciary in states that don’t have meritselection is causing people to trustjudges less. Justice O’Connor had thisto say:

I hope that lawmakers will becautious and look at what anindependent judiciary has meantto this nation. Our judges must becapable of staying above politics ifthey’re going to serve the functionof making impartial decisions.

Most supporters of electing judgesclaim that facing the voters makesjudges more accountable to the peoplethey serve. But Justice O’Connorbelieves judges aren’t as effective ifthey have to worry about whethertheir decisions will be popular. She alsocontends that electing judges brings inother elements that are harmful to thejudiciary. Groups that oppose meritselection frequently cite “judicialtyranny” as another reason judgesshould be elected. Judge O’Connor dis-misses that contention, as well, saying:

Our forefathers would be sur-prised to find they were establish-ing a tyrannical system whenthey wrote the Constitution. Theonly way to stop the onslaught wenow face is to build an informedcitizenry that understands theneed for an informed judiciary.

Justice O’Connor has also expressedconcern about Americans’ lack ofknowledge about government. Shepoints out that more people can namean American Idol judge or two of the“Three Stooges” than the threebranches of government. It’s pretty



hard to disagree with Justice O’Connoron any of her views.Source: Associated Press

V.THE NATIONALSCENE

LAWSUIT AGAINST KBR SURVIVES

We have written in prior issues onthe electrocution deaths of Americantroops in Iraq. Recently, a federal judgedenied Army contractor KBR’s motionto dismiss a lawsuit filed by the motherof a soldier who was electrocuted inthe shower while serving in Iraq. Aspreviously reported, Houston-basedcontractor KBR failed to maintain theelectrical infrastructure at the formerestate of Saddam Hussein in Baghdad.On January 2, 2008, Staff Sgt. RyanMaseth, an Army Ranger and GreenBeret, was electrocuted as he showeredwhile stationed there.

Lawyers for KBR argued that deci-sions made by the Army insulated theprivate military contractor from prose-cution. Fortunately, U.S. District JudgeNora Barry Fischer disagreed, stating inher order:

This case does not involve claimsarising from active militarycombat operations.The issues pre-sented by [Ms. Harris’] claimsinvolve the alleged negligent per-formance or non-performance ofKBR in providing maintenanceservices to the United States Army.The lawsuit asks this court and ajury to determine whether thework that KBR actually per-formed at the [complex] was sub-standard, negligent work thatresulted in Ryan Maseth’s death.

KBR lawyers also argued that thelawsuit should be dismissed because itcould be a “potential embarrassment tothe Army” and the U.S. government.Judge Fischer, however, noted that “theArmy has not sought to intervene inthis action nor expressed any concerns

to this court.” Without a doubt, KBRshould be held accountable for thedeath of Sgt. Maseth and punished tothe fullest extent of the law.

A military team sent to evaluate theelectrical problems at U.S. facilities inIraq determined there was a high riskthat flawed wiring could cause “cata-strophic results” which, as we nowknow, includes the electrocutions ofAmerican soldiers. According to theteam, the use of a required device,commonly found in American homesto prevent electrical shocks, was“patchy at best” near showers andlatrines in U.S. military facilities. Theteam also found widespread use ofuncertified electrical devices and“incomplete application” of U.S. elec-trical codes in buildings throughoutthe war-torn country. As previouslyreported, at least three U.S. servicemembers have been electrocuted inIraq while taking showers in the sixyears since the Bush Administrationordered the invasion of the country.

A copy of the team’s September 8th

report to the then-commander in Iraq,Gen. David Petraeus, was obtained bythe Associated Press through aFreedom of Information Act request.Senator Bob Casey has expressed hisdisappointment that the Pentagonfailed to share the report with Con-gress when it was completed. ThePennsylvania Senator, who has beentrying to get more answers about theelectrical problems in the past year,recently observed:

This report from a U.S. militarytask force confirms my worstfears: a glaring pattern of shoddyapplication of relevant electricalcodes, the absence of critical safe-guards, and the lack of adequateoversight.

Since this report to General Petraeus,Task Force SAFE in Iraq, which wascreated to deal with the electrical prob-lems, began extensive inspections andrepairs of wiring in about 90,000 U.S.-maintained facilities in Iraq.The Associ-ated Press has reported previously thatabout a third of the inspections so far

have turned up major electrical prob-lems.While it appears a good numberof those problems have now beenfixed, about 65,000 facilities have yet tobe inspected.The military says it couldbe November before all the inspectionsare complete.

In the meantime, the family of Sgt.Maseth continues with its lawsuit in aneffort to obtain justice. I would like tosee the executives at KBR held person-ally responsible for their actions in thismatter.At least the Maseth lawsuit is stillon track. I hope it will be successful.Source: Pittsburgh Post-Gazette and AssociatedPress

PRESIDENT OBAMA MAKES A GREAT CHOICEFOR TOP POST AT NHTSA

President Barack Obama has nomi-nated Charles A. (Chuck) Hurley, theCEO of Mothers Against Drunk Driving,as the next administrator of theNational Highway Traffic Safety Admin-istration.The nominee, who has headedMADD since 2005, previously heldsenior leadership positions with theNational Safety Council and the Insur-ance Institute for Highway Safety.Chuck Hurley has had a distinguished30-year professional career and is atremendous choice for this position. Inaddition to his work on drunk drivingissues, he has worked extensively onairbag and seat belt issues, teen driving,and child passenger safety.

The nomination of a person to headup NHTSA with a history of workingfor safety—rather than against safety—is most refreshing. In my opinion, thiswill prove to be an outstanding selec-tion to head up an extremely importantregulatory agency. All Americans whobelieve safety should be a top priorityfor carmakers should applaud thismove by the President.Source: Associated Press


VI.THE CORPORATEWORLD

AN OVERSEER OF TRIALS IN MEDICINEDRAWS FIRE

It appears that a Colorado companythat drug and medical device makerspay to oversee patient safety duringclinical trials does a poor job of super-vising medical trials. Recently, thecompany, Coast Independent ReviewBoard of Colorado Springs, approved astudy that didn’t even exist. In an inter-esting move, undercover federal investi-gators created a sham medical study tosee how closely companies like Coastevaluate the studies they are paid toreview.This company approves clinical-trial designs and patient-safety guide-lines, which are critically importantassignments. Companies and medicalinstitutions are required to have an“independent” institutional reviewboard approve these trials when theyexperiment on human subjects.

Two of Coast’s competitors correctlyrefused to approve the study’s design.But Coast approved a trial, whichinvolved a make-believe surgicalproduct called Adhesiabloc as well asresearchers who did not exist. Thecompany may be able to explain how ithas approved a sham study, but I believethat will be most difficult. In fact, thecompany has agreed not to do any moretrials for the drug industry.This was atthe request of the FDA which said it had“serious concerns”about “Coast’s abilityto protect human subjects.”Source: New York Times

THE EXECUTIVE BONUS TURMOIL

There is absolutely nothing wrongwith a successful corporation reward-ing its good executives with bonus pay-ments at year’s end. But I have a hardtime understanding how a companythat is close to insolvency can pay outlarge bonuses to its bosses. In thatregard, we have seen huge bonuses

being paid by companies that losttremendous amounts of money duringthe “bonus year.” AIG is just one suchexample, and there are scores of others.It’s pretty well established that execu-tive bonuses in such cases are alive andwell in Corporate America.The publicfuror over questionable bonuses hasplaced a large bull’s-eye on corpora-tions that have engaged in such activity.Hopefully, shareholders will wake upand say enough is enough when itcomes to rewarding incompetence.

CORPORATE GREED MUST BE REGULATED

We have seen over the past yearwhat happens when CorporateAmerica is allowed to operate withlittle or no regulation.A prime exampleis the lack of regulation of the financialinstitutions. And, we have also wit-nessed the results of ineffective orweak regulation of the drug industry.The new “Era of Accountability”brought on with the Obama Adminis-tration has set the stage for sweepingreforms in the ways that federal regula-tors do business.

From the financial services anddefense contracting industries to themanufacturers of products includingdrugs, cars, toys, and others—nocompany can be immune to the needfor good and effective regulation. Ofcourse, there will be strong oppositionfrom the corporate lobbyists and fromsome members of Congress. But theAmerican people want change and thatwill drive this train in my opinion.Thus,I believe that President Obama will besuccessful in this area of concern.

U.S. LAWSUIT FILED AGAINST KPMG OVERAUDITS OF SUBPRIME LENDER

A significant lawsuit has been filedagainst KPMG over claims that “grosslynegligent audits” by the accountinggiant helped trigger the collapse ofNew Century Financial Corp., a topsubprime mortgage lender, at the startof the U.S. housing crisis. New Century,the largest independent provider of

home loans to people with poor credit,filed for bankruptcy two years agoamid mounting customer defaults. Itsfailure rippled across the U.S. mortgagelending industry, sparking a string ofother bankruptcies that spoiled finan-cial markets as banks booked losses onbillions of dollars in mortgage-linkedsecurities at the heart of the currentglobal financial crisis.

The lawsuit, filed on behalf of a liqui-dating trust formed by New Centurydebtors, was filed against both KPMGInternational and its U.S. arm, KPMGLLP. KPMG is accused of helping coverup “catastrophic” problems at NewCentury—including accounting andfinancial errors—that led to its col-lapse. The complaint alleges that, “asNew Century’s auditor, KPMG failed itspublic watchdog duty.”

The suit demands at least $1 billionin damages. At one point, KPMG “didthe unthinkable for a public auditor,”the lawsuit alleges. It claims that KPMGissued an audit report on NewCentury’s 2005 financial results beforeits audit was complete, “falselyenabling” New Century to file itsannual report with the U.S. Securitiesand Exchange Commission. Many ofthe problems at New Century resultedfrom aggressive business practices thatsaw the company grow from originat-ing $357 million in mortgage loans inits first year of operation in 1996 toabout $60 billion in 2006.

Despite a denial of wrongdoing, areport by a court-appointed bank-ruptcy examiner found last year thatKPMG contributed to New Century’squestionable financial reporting prac-tices through “troubling and puzzlingconduct” including its alleged negli-gence. It is alleged in the suit:

Despite KPMG’s promise that itwould ensure that KPMG LLPaudit services would comply withprofessional standards and regu-latory requirements, KPMG LLPconducted grossly negligent auditsand reviews of New Century thatviolated both professional stan-dards and regulatory requirements.


Separate suits were filed in federalcourts in New York and Los Angeles. Itwill be most interesting to see how thislawsuit develops.This appears to be ahighly significant lawsuit. Otheraccounting firms will be closely watch-ing what happens in this litigation.Source: Insurance Journal

WELLS FARGO ACCUSED OF SECURITIESFRAUD IN STATE LAWSUIT

The State of California has accusedWells Fargo & Co. of fraud for thecompany’s role in an investment melt-down that has been compared in mag-nitude to the Bernard Madoff scandal.Attorney General Jerry Brown suedthree Wells Fargo investment sub-sidiaries, alleging they committed secu-rities fraud by telling Californiainvestors that $1.5 billion of risky secu-rities sold to them were as safe as cash.The Attorney General had this to saywhen filing the suit:

The securities were sold to cus-tomers on the basis that theywere like cash and people couldget their money back in eightdays. Now, it turns out they werenot like cash and people can’t gettheir money back even aftermany, many months, and they’remad as hell.

The lawsuit, filed in state court in SanFrancisco, seeks to recover the moneyinvested by about 2,400 Californians inwhat are known as auction-rate securi-ties.These were marketed by the WellsFargo subsidiaries.Auction-rate securi-ties, generally backed by student loans,municipal bonds or other debt, haveinterest rates that are reset periodicallythrough auctions—sometimes as oftenas once a week. More than $330 billionof the securities were sold in recentyears to investors attracted to theiryields, which could be one or morepercentage points above a typicalmoney market fund.

Regulators have alleged that manybanks and investment firms deceivedtheir clients into believing that auction-

rate securities were as safe as a moneymarket account. But when the marketfor auction-rate securities collapsed inFebruary 2008, many investors couldn’tsell the securities, or could sell themonly at a loss. It’s believed by someexperts that auction-rate preferredsecurities are the largest fraud ever per-petrated by Wall Street on investors.Several financial-service companiesthat issued auction-rate debt haveagreed to repurchase billions of dollarsof the devalued securities to settleclaims by regulators that theydefrauded investors. Recently,WachoviaCorp., which Wells Fargo acquired lastyear, agreed to repurchase $1.5 billionof the securities from Californiainvestors in a settlement with the stateDepartment of Corporations that alsoincluded a division of Citigroup Inc.

Brown’s lawsuit names Wells FargoInvestments,Wells Fargo Brokerage Ser-vices and Wells Fargo Institutional Ser-vices as Defendants. It alleges that theybegan selling auction-rate securities in2001 and continued to sell them rightup to the collapse of the market lastyear, despite signs that the market wasbeginning to crack in the second half of2007. It’s alleged that Wells Fargo salespersonnel weren’t properly trained inthe intricacies of auction-rate securities,and that the risks of the investmentsweren’t explained to clients. Investorsincluded retirees and small businesses,and accounts ranged from $25,000 intothe millions of dollars.Source: Los Angeles Times

AN UPDATE ON WHISTLEBLOWER LAWSUITS

There have been a number of signifi-cant developments recently in whistle-blower lawsuits. I will mention a few ofthem below.

NORTHROP GRUMMAN-TRW WHISTLE-BLOWER CASE SETTLED

In one of the nation’s largest settle-ments in a whistle-blower case,Northrop Grumman Corp. has

agreed to pay the federal govern-ment $325 million to resolveclaims that TRW, which it acquiredin 2002, provided defective partsfor a spy satellite program in the1990s. But in a rather weird twist,the federal government also hassettled a separate, long-runningdispute with Northrop and underthat settlement the governmentwill pay the aerospace companyexactly $325 million. This essen-tially means that the two settle-ments are a wash and, as a result,no money will change hands.

Though Century City-based Northropwas the loser in the whistle-blowercase, it successfully resolved a 13-year-old dispute over a missileprogram that was cancelled in1995 for what the government saidwere cost and schedule overruns.In the TRW-Northrop whistle-blower case, the settlement endeda seven-year legal fight initiated bya whistleblower. Robert Ferro, anengineer, in his role as a whistle-blower,was awarded $48.7 million.But instead of that award beingpaid by Northrop, it will be paid bythe federal government.

TRW sold the government elec-tronic components that it knewwould fail. Ferro is an electricalengineer for the Aerospace Corp., afederally funded research lab thatwas evaluating a satellite transistorfor the Pentagon. He filed thelawsuit in 2002 under the FalseClaims Act, which allows peoplenot affiliated with the governmentto sue federal contractors on behalfof the government. Ferro allegedthat research conducted in 1995“clearly demonstrated” the partswould fail if placed in satellites thatwere being developed for thesecretive National ReconnaissanceOffice. But TRW didn’t inform thegovernment of the findings evenafter problems were intensified.

When the claimants are successful,they are entitled to receive 15% to


25% of the total settlement. Thissettlement was the largest ever in aPentagon whistle-blower case. EricR. Havian, a lawyer from San Fran-cisco, represented the whistle-blower and did an outstanding job.Source: Los Angeles Times

COMPANY ACCUSED OF CONTRACTFRAUD

NetApp Inc. of Sunnyvale, Califor-nia, a data-storage company, hasagreed to pay the General ServicesAdministration $128 million tosettle a whistleblower complaintabout its federal contracting. TheJustice Department alleges that thecompany, NetApp Inc. of Sunny-vale, Calif., made false statements tothe GSA about the discounts it wasgiving other customers and failedto extend proper discounts to thegovernment. Roger Goldman, anattorney for the company, declinedto comment.

The agreement represents thelargest-ever settlement involvingthe GSA’s federal supply procure-ment program. NetApp provideshardware, software and storagemanagement services.The investi-gation relates to contracts NetApphad with the GSA between August1997 and February 2005 to selltechnology products to variousfederal agencies. GSA contractguidelines require companies toprovide the government with accu-rate information about the discountsthey offer to non-government com-mercial customers, helping theGSA to negotiate its best price.NetApp failed to give the Govern-ment accurate and complete dataabout the discounts offered tocommercial customers.

Under the terms of the settlement,NetApp was obligated to pay the$128 million by April 27th. IgorKapuscinski, then the federalsystems manager for NetApp, filed

a complaint in 2006 in U.S. DistrictCourt in Washington alleging fraud-ulent behavior by the company.This started the Justice Depart-ment investigation.Virgil McKnight,a lawyer with the Washington D.C.firm of Ashcraft & Geral, repre-sented the whistleblower and did avery good job.Source: Washington Post

FORMULA FOR JUSTICE CHEMIST BLOWSWHISTLE ON MEDICAL COMPANY

A settlement has been reached bythe federal government in anothersignificant whistleblower suit. Itappears that a giant lab wasmaking inaccurate test kits for dial-ysis patients. Thomas Cantor, thebiochemist whose company sup-plied different test kits to clinicallabs and who blew the whistle onthe company,had this to say:

I’m not going to pocket it, themoney part was never the moti-vation. It was always aboutpatients. It broke my heart andwas shocking what a companywould do for money. I made itmy business to go on a missionto make it stop.

The whistleblower says the awardmoney will fund research to treatdrug-resistant infections like HIVand hepatitis. Five years ago,Cantor and his lawyers at the Wash-ington firm of Phillips & Cohensued Quest Diagnostics and its sub-sidiary Nichols Institute Diagnos-tics (NID) for Medicare fraud.Thesuit contended Quest and NIDwere billing the government forfaulty medical tests and harmfulVitamin D therapies for inaccu-rately-diagnosed kidney disease.Cantor, president of ScantibodiesLaboratory Inc., in California, learnedof problems with Quest’s faultytest kits after some doctors whodisputed Quest’s results asked himto conduct a second test. Cantor’s

tests showed Quest’s findings were“consistently out of whack”and ledhim to check further.

NID has pleaded guilty to a felonycharge of misbranding relating to athyroid test for dialysis patientsand agreed to pay a $40 millionfine. In addition, Quest and NIDagreed to pay the government a$262 million civil settlement.Under the federal False Claims Act,Cantor is entitled to a percentageof the settlement as an encourage-ment for whistleblowers to comeforward. Before suing, Cantor sentthousands of e-mails to health careproviders about the inaccuratetests without success.The JusticeDepartment then investigated hisallegations. Brooklyn U.S.AttorneyBenton Campbell observed:

The American public has aright to expect medical devicemanufacturers to make accu-rate claims in their labeling,especially when the failure tomeet those claims could indi-cate that the performance of thedevice is suspect.

There has been a massive amountof fraud in federal programs andthat is a sad commentary on ourtimes. Companies can do wellwithout cheating in these pro-grams. The job of regulation andmonitoring of government contrac-tors must be done by the govern-ment. That simply has not beendone well over the past severalyears.Whistleblowers are actuallydoing their job for the regulatorsand that’s not the way it should be.Source: New York Daily News

MASSACHUSETTS APPROVES SETTLEMENT INFALSE DRUG PRICE LAWSUIT

A federal court in Massachusetts hasgiven preliminary approval to a settle-ment in a case involving false drugprices by a drug wholesaler.The total set-tlement of the suit is $350 million. Con-

sumers will get some of their moneyback.The suit alleges that McKesson andFirstDataBank inflated the averagewholesale price (AWP) of prescriptiondrugs.The AWP is always set by the man-ufacturer and is passed on by a reportingcompany like FirstDataBank.Accordingto the suit, the Defendants inflated a“mark-up factor” used to calculate theAWP of over 400 drugs.

Specifically, FirstData Bank, a pub-lisher of drug data, told the pharmaceu-tical industry that it derived the AWPfrom “a survey” of wholesalers in anattempt to verify the prices reportedby the manufacturer. In reality,however, McKesson was the onlywholesaler that FirstData actually sur-veyed. The two companies increasedthe AWP markup from 20 to 25 percentfor over 400 drugs, without any eco-nomic justification. To conceal thescheme, the companies only increasedthe markup when another priceannouncement was made by a drugmanufacturer. While the Defendantsdeny any wrongdoing, they haveagreed to reimburse eligible con-sumers. McKesson, a Fortune 500health care services company, hasagreed to pay $350 million into a settle-ment fund. Only $60 million of this willgo directly to consumers with the restallotted to be paid to “non-governmen-tal third parties,” including insurancecompanies. It should be noted that thiscase doesn’t include state Medicaidprograms. The fraud in those casesinvolved only the drug manufacturersand not the reporting services.

Eligible class members includeanyone who paid a co-payment for oneof the settlement drugs betweenAugust 1, 2001 and March 15, 2005, anduninsured or underinsured consumerswho paid the full value of one of thedrugs between August 1, 2001 andJanuary 23, 2009. According to thePlaintiffs’ lawyer, Steve W. Berman ofHagens Berman Sobol Shapiro, eligibleclass members would “receive somemoney back in the near future if theyfile a claim.”Consumers who think theymay be eligible to recover should fillout a claim form,available at the official

settlement Web site, www.mckesson-awpsettlement.com.Source: Consumer Affairs

VII.CONGRESSIONALUPDATE

CONGRESS SHOULD PASS THE MEDICALDEVICE SAFETY ACT

As we have reported in previousissues, the Medical Device Safety Act of2009 is awaiting passage in Congress. Ipredict that this legislation will passbecause of its importance from apublic health perspective. The Ameri-can people have been alerted to amassive problem relating to medicaldevices and to the efforts to protectwrongdoers. Several legal groups,including the American Bar Association,support passage of this Act.The legisla-tion was introduced on March 5th afterthe U.S. Supreme Court’s decision inthe Wyeth v.Levine case.

In another case, Riegel v. Medtronic,the Supreme Court found last year thatproducts liability claims against medicaldevice manufacturer Medtronic werepreempted by the Medical DeviceAmendments to the federal Food, Drugand Cosmetic Act. But on March 4th, theSupreme Court ruled in the Levine casethat federal law governing warnings onprescription drug labels does notpreempt state claims asserting that phar-maceutical companies failed to warn ofrisks associated with the medication.

A number of consumer groups,including Public Citizen and legalorganizations such as the AmericanAssociation for Justice and the Alliancefor Justice, have been pushing hard forpassage of the Medical Device SafetyAct. It’s most significant that the Ameri-can Bar Association has joined with theconsumer group. This legislation wasintroduced in both houses by SenatorTed Kennedy, the chairman of theSenate Committee on Health, Educa-tion, Labor and Pensions, and New

Jersey Representative Frank Pallone Jr.,the chairman of the House Committeeon Energy and Commerce’s Subcom-mittee on Health. The legislation hasbroad support in both the House andSenate.The American people are clearlyin favor of prompt passage.

In March, more than 20 consumer,health, women’s advocacy and legalgroups sent letters to Senator Kennedy,Rep. Pallone and Rep. Henry Waxman,the chairman of the House Energy andCommerce Committee, urging passageof the Medical Device Safety Act. In theletters, it was stated:

Immunity should not be given todevice manufacturers that fail toadequately warn about or preventdevice risks; especially when themanufacturer knows, or shouldknow, that the device could causeserious injuries or death.

One of the legal groups, the Centerfor Justice & Democracy, which is aconsumer organization focused on thecourts, released a report recently ondefective heart devices and implants.Joanne Doroshow,executive director ofthe Center,which is based in New York,made this observation concerning theneed for legislative action:

These are the very type of patientswhose rights have been wiped outas a result of the Supreme Court’sdecision last year, which is whatCongress now needs to fix.

Meanwhile, the American Bar Associa-tion has formed a task force to reviewits policy regarding federal preemptionof state products liability tort laws. OnDecember 29th, ABA President H.Thomas Wells Jr., a Birmingham,Alabama lawyer, sent letters to Rep.Pallone and Senator Kennedy support-ing a bill that would overturn the deci-sion in the Medtronic case. PresidentWells, who is a very good civil defenselawyer, stated:

State product liability law holdsmanufacturers accountable forinjuries caused by their productswhen they are negligent or irre-


sponsible. These laws permit aninjured consumer to be compen-sated by a manufacturer found tobe negligent. Legislation such asthe Medical Device Safety Act isconsistent with ABA policy sup-porting the continued right of thestates and territories to regulateproduct liability law with discreteexceptions.

While I believe this legislation willpass, corporate lobbyists are hard atwork trying to derail the effort. Hope-fully, the overwhelming support infavor of the legislation will enable thebill to pass, and to pass soon. It’s badlyneeded and would send the rightmessage to the American people.Source: National Law Journal

THE FAIR ELECTIONS NOW ACT SHOULDBE PASSED

We have seen big banks receive bil-lions in bailout funds, and then turnaround and lobby for little to no over-sight or accountability for how our tax-payer dollars are to be spent. Whilethey were busy lobbying, the banksneglected the critical issue at handwhich is helping American homeown-ers who face foreclosure. We cannotallow campaign cash and powerfullobbyists to continue to win favorsfrom Congress. Pay-to-play politicscan’t be allowed to continue in Wash-ington, D.C., not with so much at stake.That’s why Public Citizen is pushingfor change through citizen-funded FairElections. I believe the time has cometo move in that direction. Takingspecial interest money out of the polit-ical arena would do more to rid ournation’s capital of partisan favoritismand actual corruption than any singleone thing.

The Fair Elections Now Act, spon-sored by Senators Dick Durbin (D-IL)and Arlen Specter (D-PA) and Repre-sentatives John Larsen (D-CT) andWalter Jones (R-NC), presents an excit-ing new approach to financing cam-paigns. This bipartisan bill creates analternative to big special interest

money in politics by allowing Con-gressional candidates to run a viablecampaign on public funds and unlim-ited small contributions from ordinarycitizens.

Passing this legislation will freemembers of Congress from spendingtime chasing contributions from lob-byists and corporate special interestgroups. It would also return theirfocus to solving the critical issues con-fronting our Nation’s problems: theeconomy, health care, and energy.Thetime has come for passing this land-mark legislation, which will changethe way politics operate in thiscountry. It’s time for the days of pay-to-play politics to end. If you agree, askyour members of Congress to becomeco-sponsors of the Fair Elections NowAct! Once the problems in Washingtonare handled, then the movement canbe taken to the state houses.Source: Public Citizen

THE INFLUENCE GAME IN OUR NATION’SCAPITOL

Without any doubt, lobbying is bigbusiness in our Nation’s Capitol. Overthe years, powerful corporate lobbyistshave had a tremendous influence—sometimes more than elected officials—on what happens in Washington.Lobbying has paid off for the lobbyistsand the special interests. For example,big companies that spent hundreds ofmillions lobbying successfully for a taxbreak enacted in 2004 got a whopping22,000-percent return on that invest-ment! That’s pretty good proof that forthose who can afford it, hiring a lobby-ist can pay tremendous dividends.Thefigures, compiled by professors at theUniversity of Kansas for a studyreleased last month, offer a rarely-seenglimpse of how the lobbying businessworks, and why the industry isbooming as never before.

President Barack Obama has prom-ised to curb lobbyists’ influence and Ihope that he can convince Congress togo along with him. The professors’report details efforts by hundreds of

companies in 2003 and 2004 to pushthrough a one-time tax “holiday” thatlowered for a year the tax rate theypaid on profits earned abroad.All told,U.S. companies saved about $100billion in taxes, with pharmaceuticalpowerhouses Pfizer and Merck & Co.,technology giants IBM and HewlettPackard, and health products makerJohnson & Johnson among its top ben-eficiaries.The study focuses on 93 firmsthat spent as much as $282.7 millionlobbying on the issue during thatperiod. Those companies ultimatelysaved a total of $62.5 billion throughthe tax change.

Researchers used publicly-availablelobbying disclosures filed with Con-gress and financial statements submit-ted to the Securities and ExchangeCommission to compare the amounteach company saved with its lobbyingexpenditures. Stephen Mazza, who con-ducted the study along with RaquelAlexander and Susan Scholz,observed:

It calls into question what Con-gress did in 2004. It clearly is avery lucrative field for lobbyists.Congress wanted to create jobs,and what they probably did wascreate jobs for the lobbyists.

The results reflect one reason thatlobbying—always a major industry inour Nation’s Capitol—has experiencedexplosive growth in recent years. Com-panies and interest groups spent $3.42billion lobbying Congress and thefederal government in 2008, the lastyear for which such figures are avail-able, according to the Center forResponsive Politics.That’s a 14% jumpfrom the previous year.There’s growingevidence that companies get what theypay for—and maybe a lot more—fromtheir lobbying efforts.

The Center for Responsive Politics isa nonpartisan group that tracks moneyin politics. It recently released a studycomparing the amount spent by bailed-out banks on political contributionsand lobbying with the amount ofmoney they got from the TroubledAsset Relief Program, better known as


the Wall Street rescue fund.The resultsrevealed that the banks received anoverall 258,449% for the $114 millionthey spent on campaign donations andlobbying.That’s not a bad return—evenin good economic times—and it’s cer-tainly a great return in bad times.Thissort of thing should shock most U.S.taxpayers and should get the attentionof the politicians.Source: Associated Press

VIII.PRODUCTLIABILITY UPDATE

A CONTINUING SERIES HIGHLIGHTING OFTENOVERLOOKED PRODUCT CLAIMS IN THESINGLE VEHICLE ACCIDENT

Last month, we began a series of arti-cles discussing product liability claimsthat arise from single vehicle accidents.A product liability claim focuses onwhether or not a product is defective.The purpose of this series is to educateyou on the different kinds of productliability claims that are out there. Inautomobile cases, the defective productcould be the entire vehicle, or a compo-nent part such as the seat belt or tires.Unfortunately, the average motorist hasno idea how unprotected he will be inan accident as a driver or passenger in adefective vehicle. Our lawyers aretrained to recognize defect claims inmotor vehicle accident cases.Any singlevehicle accident involving seriousinjury or death, including paralysis, lossof limb or brain damage, should be care-fully analyzed for possible product lia-bility claims. Last month, we looked atroof crush and the devastating toll it hastaken on the lives of many.This month,we look at seat belt defects.

There are thought to be two collisionsin an auto accident.The first collision isthe vehicle’s impact with anothervehicle or object.The second collision isthe passenger’s impact with the interiorof the vehicle, or in cases of ejection,impact outside the vehicle. Seat belt

injuries occur when a defective seat beltfails to adequately protect a vehicle pas-senger in the “second collision”phase ofan automobile accident.The purpose ofa seat belt is to minimize the injuriescaused in a second collision, by reduc-ing or eliminating injurious occupantcontact with the vehicle’s interior. Seatbelt injuries often occur when there is aseat belt design, production, or installa-tion defect. There are a plethora ofinjuries that may occur as a result of adefective seat belt or from failure of aseat belt: spinal cord injury, brain orhead injury, paralysis, internal injuries,amputations, broken bones, concussionsand fatalities.

In a lap-belt-only design, often foundin the rear center seating position,occupants may jack-knife over the seatbelt, receiving injuries in the process.The seat belt itself can cause spine orinternal injuries when the occupant’sbody bends over the seat belt webbingwhich then cuts into the soft tissue.Also, when the occupant’s body jutsforward, head injuries can result whenthe head hits a seat back or a supportpillar in the vehicle. With a shoulder-belt-only design, often seen in Hyundaior Volkswagen vehicles, occupants maysubmarine under the belt, causing neckinjuries and sometimes decapitation.

Passive restraint systems lull theoccupant into a false feeling of safetywhen the shoulder belt slides aroundthem. Passive restraint systems consistof a manual lap belt and a motorizedshoulder belt, or are simply a doormounted three point system. For thefirst type, the manual belt combination,occupants often forget to latch themanual belt, creating a shoulder-belt-only system. Thus, much like theHyundai and Volkswagen vehicles men-tioned above, occupants may subma-rine under the belt. In the second type,the door-mounted, three-point system,if the door opens during an accident,the occupant can be ejected, often suf-fering horrific injuries or death.

Some of our clients have suffered cat-astrophic spinal cord injuries as a resultof defective seat belt geometry design.Small stature persons are particularly

susceptible to these types of injuries.The D-ring or shoulder strap anchor istypically placed in a position that is toohigh for a small stature person. As aresult, the shoulder strap rides too highup on the occupants’ neck and causessevere spinal injuries in a collision.Automanufacturers have been aware of thisseat belt geometry defect for sometime.

A seat belt must not only be designedand mounted properly, but must latchproperly and stay latched to providemaximum protection. Latching prob-lems leave the occupant open for thepossibility of being unrestrained in anaccident. Inertial unlatching occurswhen a seat belt buckle releases byitself during a collision. Inadvertentunlatching happens when the buckleopens as a result of some inadvertentcontact by either the occupant or acomponent of the vehicle. Often ahand or arm contacts the releasebutton causing an inadvertent unlatch-ing. Possibly the scariest of all seat beltbuckle defects is false latching. Thisoccurs when the buckle appears to belatched, sounds like it is latched andlooks like it is latched, but is not actu-ally properly or fully engaged. In thissituation, forces during the accidentcan cause the buckle to unlatch. Werecently dealt with this issue in a caseagainst a trucking manufacturer and aseat belt manufacturer where the dece-dent was killed after he was ejectedfrom the vehicle.

There are several other possibledefects that can occur with seat belts:the seat belt webbing can fail becauseof a defect within the webbing itself, orfrom a sharp item on the seat framecontacting the webbing during the col-lision; the retractor can fail to lockproperly in an accident and cause aninjury by allowing excess webbing toextend; and, a seat belt pretensioner, adevice that removes excess slack fromthe seat belt webbing, could be missingfrom the design of the particular belt.

Lawyers who are evaluating potentialclaims should never rely on accidentreports alone to determine if there is aseat belt defect. Often Police Officers


will say that there was no belt use if theoccupant has been ejected or is notwearing the belt when the Officersarrive on the scene. As stated previ-ously, an occupant can submarineunder a belt, the belt may unlatch on itsown from inertia, or a first arriver mayhave unlatched the occupant to admin-ister lifesaving medical treatment. Inshort, don’t rely on the accident reportalone to determine if there is a seat beltdefect case. You may have a seat beltdefect case if:

• an occupant who was believed tohave been belted is found unbeltedafter the accident;

• a belted occupant makes contactwith the vehicle interior, resulting ininjury;

• the occupant is ejected outside thevehicle or outside the restraint of theseat belt, but the seat belt buckle islatched;

• the webbing of the seat belt is looseafter the accident;

• the webbing of the seat belt is torn;

• the door mounted seat belts in thevehicle were ineffective when thedoor of the vehicle opened;

• the seat belt is “only” a lap belt orshoulder belt;

• the vehicle occupant compartment isintact and a belted occupant isinjured;or

• the seat belt mounts came loosefrom the floor or vehicle pillarsduring the accident.

Our firm routinely reviews all auto-mobile accidents involving seriousinjury or death, including paralysis, lossof limb or brain damage to determine ifthere is a defective seat belt. If youwould like more information or have aquestion, you can contact either ColePortis, Greg Allen, or Graham Esdale at800-898-2034, or by email at [email protected], [email protected] or [email protected].

The New NHTSA Chief ShouldAddress Roof Crush Standard

I mentioned in another section ofthis issue that the Obama Administra-tion named Chuck Hurley as the newadministrator to head the NationalHighway Traffic Safety Administration.NHTSA should immediately address thegrossly-inadequate roof crush standardwhich is badly in need of upgrading.That action would make sure con-sumers have access to the courts whenthey have been harmed as a result of aroof crush event.As we have reportedin prior issues, the current roof stan-dard has been in place since 1973.Thiswas before SUVs became a commonand very popular mode of consumertransportation. In theory, the roof crushstandard is supposed to address thesafety of vehicles’ roofs to withstandpressure when involved in rolloveraccidents.

As previously reported, NHTSA wasrequired to deliver a roof crush stan-dard to Congress by July 1, 2008. Theagency had been ordered by Congressto strengthen its proposed rule becauseit did not significantly reduce loss of lifeand prevent injury. NHTSA asked for anextension until December 15, 2008, andthen revised the date for issuing thefinal rule to April 30, 2009. Under theBush Administration, NHTSA’s safetyregulations took a back seat to corpo-rate profits. Hopefully, under the newleadership, NHTSA will again put safetyas the agency’s top priority. The firstorder of business should be to finalize astrong roof crush standard.

The Bush Administration proposed aroof crush standard that increased theability of a roof to withstand a forceequal to 2.5 times the unloadedvehicle’s weight, a standard already metby 70% of domestic automobile manu-facturers. The proposed rule wouldhave saved an estimated 13 to 44 livesout the 10,000 persons that die everyyear in rollover crashes, less than 1%.Safety experts believe this standard didnot go far enough because it would stillresult in most passengers in rolloveraccidents being killed or paralyzed.That’s unacceptable.

The proposed rule during the Bushyears also included preemption lan-guage that gave automobile manufac-turers immunity from lawsuits, leavingmanufacturers little incentive to makeautomobiles safer.The Bush Administra-tion also included preemption lan-guage in preambles to safetyregulations for occupant crash protec-tion, side-impact protection, school busseating and other final regulations.TheObama Administration should removeall preemption language and give con-sumers the right to seek justice in thecourts. NHTSA should come up with afinal roof crush standard that will savemore lives, prevent more injuries, andgive citizens just recourse in thecourts. Under new leadership at theagency, I believe a new rule with agood standard will come out soon.Source: AAJ

MAJOR YAMAHA RHINO RECALL MAY HAVECOME TOO LATE FOR MANY

The Consumer Product Safety Com-mission has announced a major recallof over 120,000 Yamaha Rhino off-highway recreational vehicles. Therecall involves all Rhino 450, 660 and700 model vehicles, which have beenlinked to 46 deaths and hundreds ofinjuries. Reports of serious injury anddeath linked to this vehicle have beenreported since 2003, leaving many towonder if this action is an example of“too little, too late.”

Cole Portis, who heads up our firm’sProduct Liability Section, has reviewedover 75 Yamaha Rhino rollover claimsin the past two years. Cole is con-cerned that this recall—while a goodfirst step—fails to address the inherentdesign flaws that make the YamahaRhino so susceptible to low-speedrollovers. Cole remains hopeful,however, that this government recallwill serve as a wakeup call and thatYamaha will re-evaluate its practice ofputting profits over people.

According to an official news release,the CPSC staff has investigated morethan 50 incidents involving 46 driver


and passenger deaths related to thesetwo Rhino models. They report morethan two-thirds of the cases involvedrollovers, and of the rollover-relateddeaths and hundreds of reportedinjuries, many appear to involve turns atrelatively low speed and on level terrain.

Almost immediately upon the Rhinoentering the market, reports of rolloveraccidents with serious injuries began.The reports indicated that the Rhinowas rolling over while turning atspeeds of less than 20 mph on virtuallyflat ground. The Yamaha Rhino hascaused a large number of devastatingrollover accidents leaving adults and anumber of children seriously injured,permanently maimed and, in someinstances,dead.

There is evidence to suggest thatYamaha rushed the Rhino to the marketbefore it properly tested them.Around1990,Yamaha made an agreement withthe CPSC not to produce any four-wheelATV with a static lateral stability factorof less than .89.Because the Rhino is notan ATV—but instead is a UTV—Yamahadid not have to comply with its agree-ment with the CPSC. Testing of theRhino verified that the Rhino’s staticlateral stability factor is about .86, thusmaking the Rhino less stable than anyATV being manufactured.

In lawsuits, discovery revealed thatYamaha was aware of problems withthe instability of its design in 2002before the Rhino first hit the marketand was even concerned about futurelawsuits as a result. Furthermore, itappears that Yamaha conducted no spe-cific objective dynamic testing of itsvehicle’s lateral stability. No dynamictesting was performed despiteYamaha’s knowledge that during somehandling or performance tests, knownas running tests, about 20 rolloversoccurred on the Rhino prototypevehicle. Conveniently for Yamaha,either no documentation was made ofthese rollover accidents or the docu-mentation was discarded. No instru-mentation was utilized in the testvehicles to record information such asacceleration, speed, rollover rate, steerinput, or the like.The vehicle stability

analysis conducted by Yamaha on theRhino design was almost entirely basedupon the subjective assessment ofYamaha’s test riders’ perception of thevehicle.Yamaha has admitted that it didnot do any dynamic testing of theRhino to see what would happen topassengers in the event there was arollover. In other words,Yamaha failedto do the kind of testing required tokeep drivers and passengers safe whileriding in the vehicle.

When confronted with the mountinginjuries caused by the Rhino design,Yamaha took a well-used corporate strat-egy, and blamed the consumers for theirown injuries, accusing them of usingaggressive driving maneuvers. The fol-lowing statement was made by Yamaha:

While the Rhino has been a reli-able and versatile vehicle, someoperators have engaged in aggres-sive driving (such as sliding, skid-ding, fishtailing, or doing donuts)or made abrupt maneuvers (suchas turning the steering wheel toofar or too fast) that have resultedin side rollovers—even on flat,open areas. Unfortunately, someoccupants have been seriouslyinjured during such rolloverswhen they put their arms or legsoutside the vehicle, resulting incrushing or other injuries.

In addition, in 2007, without admit-ting that the Rhino’s design was defec-tive,Yamaha made a “special offer” toRhino owners to retrofit free of chargethe older models of the Rhino (the2004-2007 ATV models) with free halfdoors and a passenger handhold.Yamaha has also installed half doorsand the handhold on its 2008 Rhinomodel.The company claimed that thesefeatures would help people keep theirlimbs inside the vehicle during arollover. However, these design changesand retrofits did not address the under-lying problem; that is, the unstabledesign and its tendency to tip over dueto its narrow wheelbase, its high centerof gravity, and its top-heavy design.

Finally, in March 2008, the Consumer

Product Safety Commission (CPSC)announced a major recall of over120,000 Yamaha Rhino off-highwayrecreational vehicles.The recall involvesall Rhino 450, 660 and 700 model vehi-cles. If you need more information onRhino issues, contact Cole Portis orChris Glover in our firm at 800-898-2034or by email at [email protected] or [email protected] can also get more informationby visiting www.yamaha-rhino-lawyer.com.

VARIETY OF AIRBAGS RECALLED OVERPOSSIBLE MALFUNCTIONS

There have been a number of recallsrecently relating to front airbags on thepassenger side of vehicles.The concernis over possible malfunctions of theoccupant detection system.These aresome of the recalls:

• General Motors: 12,662 2009 Cadil-lac CTS sedans were recalled over asoftware problem that may disablethe front-passenger airbag when itshould be enabled or vice versa.

• Nissan has recalled more than200,000 2007-08 Altima, 350Z,Murano and Rogue and Infiniti EX35,G35 and G37 vehicles to fix a sensorfor the passenger-side airbag.An elec-tronic component in the unit in thepassenger seat cushion may havebeen made out of specification.Nissan is also recalling 16,365 2006Murano and 2008 Infiniti EX35 SUVsto fix incorrectly-programmed soft-ware that may lead passenger-sideairbags to fail.

• BMW is recalling 200,000 2006 3Series and 2004-06 5 Series cars and2004-06 X3 SUVs over concerns thatthe front-passenger airbag may notdeploy in a crash. Small cracks coulddevelop in a seat detection mat anddeactivate the bags but activate thewarning light.

• Hyundai is recalling 393,714 2006-08 Sonata sedans to fix a problemwith the air-bag system in the frontpassenger seat. The affected cars


have an advanced system that dis-ables the passenger front bag when itdetects a child-restraint system orsmall child in the seat.

• Ford is recalling 470,000 2005-08Mustangs to update passenger-sidefront-air-bag software. Ford says inter-nal testing showed the airbag couldinjure a small, unbelted passenger.

For more recall information, visit theNational Highway Traffic Safety Admin-istration at www.safercar.gov.

COOPER TIRE SUED OVER FATAL ROLLOVERACCIDENT IN MEXICO

While traveling in Mexico in Decem-ber 2007, one passenger in a 1997 FordExplorer was killed and several wereinjured when the vehicle in which theywere riding left the road and rolledover. It appears that the accident wascaused by the tread on the vehicle’s leftrear tire suddenly and unexpectedlyseparating from the tire body. Suit wasfiled against Cooper Tire and RubberCompany on April 13, 2009 in theTexarkana Division of the Western Dis-trict of Arkansas.

The tire that detreaded, a Cooper Dis-coverer H/T, was manufactured inTexarkana,Arkansas, in 2004. It’s allegedin the lawsuit that Cooper Tire knewthe tire presented an unreasonably dan-gerous condition and that it had anumber of defects.The Plaintiffs statethat the tire did not contain measuresto prevent tread separation. Specifi-cally, the tire design failed to incorpo-rate a “belt wedge,” nylon cap ply, ornylon edge strips. It also failed toemploy a high-halobutyl content innerliner. Further, the Plaintiffs said that thetire did not incorporate an effectivechemical to prevent premature agingof the tire materials and that the tirewas poorly bonded allowing prematurefailure and tread separation.The Plain-tiffs are seeking both compensatoryand punitive damages in the case.Source: Associated Press

THERE ARE 2500 TO 4500 NEWMESOTHELIOMA CASES EACH YEAR

Depending on which studies youread, the expert projections are thatthere will continue to be between2500 and 4500 new cases of mesothe-lioma diagnosed each year for the fore-seeable future. Our firm continues toactively pursue these cases around thecountry. Although many of the older(sometimes referred to as “tier one”)companies are in bankruptcy, in manycases, smaller secondary companieshave been identified as providingasbestos containing materials forvarious worksites.

The fact that many Defendants arein bankruptcy does not prohibit settle-ment from those companies althoughthe amounts available from the variousbankruptcy trusts are typically muchlower than would be expected at trial.In addition to the traditional casesagainst asbestos suppliers and manu-facturers of asbestos-containing prod-ucts, in some instances, lawyers arefocusing on premises liability expo-sure and property owners are joinedin lawsuits where workers wereneither protected nor warned aboutthe presence of asbestos.

In addition to the continuing numberof mesothelioma cases in the UnitedStates, international use of asbestosunfortunately assures that victimsaround the world will suffer fromasbestos-related diseases for years tocome. During the years that the UnitedStates saw dramatic reductions in theproduction and use of asbestos, coun-tries such as India, Brazil and Chinaexperienced a sharp rise in asbestosproduction and use. Unfortunately,because of lax medical testing andtreatment, and poor reporting andrecord keeping, the vast majority ofmesothelioma cases in those countriesgo unreported.

Our firm has several mesotheliomacases set for trial this year and we arecontinuing to investigate new casesaround the country. Mike Andrews andMatt Teague are the lead mesotheliomalawyers in our firm. They may be

reached anytime for questions at 800-898-2034 or by email at [email protected] or [email protected].

CASE INVOLVING A CHILD RUN OVER BYMOWER IS REVERSED ON APPEAL

As the result of an appeals court deci-sion, a child who was injured by hergrandfather’s riding lawn mower willbe allowed to pursue a strict liabilityclaim against Simplicity Manufacturing,Inc., the machine’s manufacturer. The3rd Circuit Court of Appeals reversed asummary judgment in the case whichhad been entered by a lower court.Thechild had her left foot amputated afterher grandfather backed over her legwhile operating a riding mower manu-factured by the Defendant. Suit wasfiled, alleging that the Defendant was atfault because the mower, a Regantsmodel, was designed without any back-over protection.

The Defendant argued that underapplicable Pennsylvania law, a manufac-turer can only be strictly liable by an“intended user,” not a bystander injuredwhen its product is operated by theintended user. But the Appeals Courtdisagreed, stating:

We predict that if the Pennsylva-nia Supreme Court were con-fronted with this issue, it wouldadopt the Restatement (Third) ofTorts, §§1 and 2, and therebyafford bystanders a cause ofaction in strict liability under thecircumstances here.

The Court further decided that themanufacturer could be sued for negli-gently designing the lawnmowerwithout “no mow in reverse” features.This type of back-up protection wasavailable to the Defendants.Source: Lawyers USA

FORD MOTOR CO. STUDYING NEW SAFETYFEATURES

Ford Motor Company has beenresearching two new designs for seat


belts and this could result in reducinginjuries and deaths as a result of motorvehicle crashes. One possibility for asafety belt is a design that has fourpoints, which would incorporate a lapbelt and suspenders.This design is inlieu of the three-point seat belt thatmotorists are familiar with.The othersafety belt that Ford is looking into hasan airbag incorporated into it.There arestill some technical challenges thatneed to be worked through for thesesafety belts to be useable.

In my opinion, this work by Fordmakes sense. Hopefully, this work willresult in enhanced safety features forcars. In recent research by Ford, manycustomers indicated that they weremore comfortable and felt safer in four-point safety belts, than three-point belts.American citizens have become increas-ingly concerned with safety issues andexpect the federal government and theautomakers to do their part.

STUDY SAYS MINICAR BUYERS SACRIFICESAFETY

Consumers who buy minicars toeconomize on fuel are making a bigtradeoff when it comes to safety in col-lisions, according to the Insurance Insti-tute for Highway Safety. The Institutesaid that crash dummies in all threemodels tested—the Honda Fit, theToyota Yaris and the Smart Fortwo—fared poorly in the collisions. By con-trast, the midsize models into whichthey crashed fared well or at leastacceptably. Since both the minicars andmidsize cars were traveling 40 milesper hour, the crash occurs at 80 mph.

The Institute concluded that whiledriving smaller and lighter cars savesfuel,“downsizing and down-weightingis also associated with an increase indeaths on the highway,” according toAdrian Lund, the Institute’s president.The Institute did not quantify howmany more highway deaths might beexpected statistically from any increasein the use of minicars. The Instituteusually tests cars individually, but inthis case paired the Honda Fit with a

Honda Accord, the Toyota Yaris with aToyota Camry and the Smart Fortwowith a Mercedes C-Class. While theargument over weight versus safety isnot a new one, it took on greater signif-icance when gasoline prices rosesharply last year, making minicars morepopular. Consumers are urged to seekout vehicles that burn less fuel so theywill contribute less to global warming.Production of carbon dioxide, the mainheat-trapping gas, is proportional tofuel use, and the Smart claims to be thehighest-mileage car powered by gaso-line on the American market.

When the Institute crashed the Smartinto the Mercedes C-Class sedan, theSmart—which weighs half as much asthe sedan—went airborne and spunaround one and a half times.The Insti-tute’s crash laboratory did not clockthe speed of the rebound, but calcu-lated that in a collision between cars ofthat weight, the sedan would slowdown by 27 mph while the two-seaterwould change speed by 53 mph,moving backward at 13 mph.The Insti-tute suggested steps that would furtherboth fuel economy and safety ratherthan put them in conflict (i.e., cuttingthe speed limit and reducing horse-power). But there appears to be littlesupport for either of those proposals.

Some car efficiency experts have rec-ommended making cars light but alsolarge, with energy-absorbing crushzones.With several feet of car body infront of the driver, the energy of a crashcan be dissipated and the suddenness ofthe change in velocity can be reduced.Source: New York Times

IX.MASS TORTSUPDATE

VIOXX SETTLEMENT PROGRAM UPDATE

The Vioxx Settlement Program con-tinues to proceed on schedule. Whenthe program was announced onNovember 9, 2007, one of its primary

objectives was that it would not onlyfairly compensate victims but that com-pensation would be issued in a timelymanner. From the beginning, the targetfor the heart attack final payment wassummer 2009.The issuance of the finalheart attack payment will mean thatover 30,000 heart attack claims havebeen reviewed and processed and that$4 billion dollars has been paid tovictims less than two years after theannouncement of the program.

Due to the efforts of BrownGreer, theVioxx Claims Administrator, the lawyersfor claimants, Judge Eldon Fallon, andothers, it appears almost certain that afinal payment for heart attack claimswill be issued during September of thisyear, meeting the deadline as outlinedfrom the beginning. Though there ismuch to do during the final monthsbefore the scheduled final payment, thecurrent developments are enormouslyencouraging and are further proof thatthe Vioxx Settlement Program is one ofthe most efficient settlement programsin the history of mass torts.

A total of 48,520 claimants haveenrolled their claims in the Vioxx Set-tlement Program. Of the 30,142 heartattack claims that have been enrolled,interim payments have been issued toover 10,000 claimants with over $850million being distributed to victims ofVioxx and their families. Interim pay-ments in heart attack cases began inAugust 2008 and will continue over thecoming months until the final paymentin September.

Interim payments in stroke casesbegan in February 2009 in accordancewith the terms of the settlement agree-ment. Of the 17,831 stroke claims thathave been enrolled, interim paymentshave been issued to over 1,000claimants with almost $30 milliondollars being distributed to claimantsand their families. Interim payments instroke cases will continue with the finalpayment in stroke cases being contem-plated in late 2009 or early 2010.

In addition, the Vioxx SettlementAgreement dictated that certain claimswould be given extraordinary injuryconsideration under the Settlement


Program.The agreement established a$195 million fund for the compensa-tion of extraordinary heart attackclaims and $105 million dollars for thecompensation of extraordinary strokeclaims. Only those claims that qualifyfor compensation of the underlyingheart attack or stroke claim will be con-sidered for extraordinary treatment. OnMarch 2, 2009, BrownGreer announcedthe implementation of the Vioxx Extra-ordinary Injury Program.The deadlinefor submitting applications for extraor-dinary injury compensation is Septem-ber 1, 2009. Andy Birchfield, LeighO’Dell, and Roger Smith, along with agreat support team, have done atremendous job in carrying out all ofthe work required to complete the set-tlements and get our clients paid.

SUPREME COURT DID THE RIGHT THING INLEVINE CASE

We have received a tremendousresponse to reports of the U.S. SupremeCourt’s ruling in the Wyeth v. Levinecase.We are extremely gratified that theHigh Court upheld the traditional rightof patients harmed by defective andmislabeled drugs to sue drug compa-nies to recover compensation for theirinjuries. As we have learned in litiga-tion, drug companies are far fromperfect.They sometimes fail to identifyand inform doctors and the Food andDrug Administration of problems withtheir products or their products’ labels.

Unfortunately, we have also learnedthat the FDA is not perfect.The regula-tory agency is overworked and under-funded. As a result, the FDA has todepend almost entirely on drug compa-nies for information about the safety andeffectiveness of drugs. We have seenhow that simply hasn’t worked verywell. I don’t believe that it ever will.

Perhaps most importantly, once adrug is marketed to thousands ofpeople things are discovered thatweren’t known during the clinical trialsfor that drug—problems that arise asdoctors prescribe and patients take thedrug day in and day out. For all these

reasons, legal immunity for drug manu-facturers—as requested by the drugcompanies and pushed by the BushAdministration—would have been ahuge mistake. Obviously, the SupremeCourt appreciated that fact.The HighCourt seemed to appreciate that thecivil justice system is consistent with,and indeed helps support, FDA author-ity to make drugs as safe and as effec-tive as possible.The court emphaticallyrejected arguments by the drugcompany and the Bush Administrationthat compensation for patients was anobstacle to the accomplishment of theFDA’s safety objectives.

The Levine case brought to thepublic’s attention that real people areaffected adversely when immunityfrom lawsuits is given to any groupincluding manufacturers.The Plaintiffin the case, Diana Levine, lost her armbecause Wyeth did not take a simplestep to warn her doctors of an avoid-able risk of gangrene, which was verywell known to the company. Its anti-nausea drug should not have beenadministered by way of the IV-pushmethod. The decision was not only ahuge victory for Diana Levine, but forpatients all across the country. And itwas clearly a victory for public health.

Brian Wolfman, the director of thePublic Citizen Litigation Group, servedas one of Diana Levine’s lawyers.Brian, who was lead counsel for Ms.Levine at the certiorari stage in theSupreme Court, has also representedmany Plaintiffs in preemption casesbefore the Supreme Court and othercourts.All American citizens owe Brianand all of the other lawyers whoworked on the Levine case a tremen-dous vote of thanks.Source: Public Citizen

THYROID DRUG CAN BE DANGEROUSFOR CHILDREN

Two doctors have warned that a pillused for thyroid disease can cause fatalliver failure in children and should nolonger be used to treat them.The drugof choice for treatment of children

with Graves’ disease is propylthiouracilor methimazole. This disease is themost common cause of an overactivethyroid. Other treatments are surgeryand radioactive iodine. But over thepast 60 years, reports have linked theuse of propylthiouracil in children toliver failure, sometimes fatal or requir-ing a liver transplant.

Propylthiouracil (PTU) is also aprimary treatment for adults withGraves’ disease. But there appear to befewer liver complications in adults,according to Dr. Donald R. Mattison ofthe Eunice Kennedy Shriver NationalInstitute of Child Health and HumanDevelopment. Drs. Mattison and ScottA. Rivkees of Yale University School ofMedicine, who noticed the problem inchildren and did research so doctorscould learn more about the issue, esti-mate that five to ten children die eachyear from complications of the drug.Their estimate is based on reports tothe Food and Drug Administration andfrom other sources.

In a letter published in the NewEngland Journal of Medicine on April9th, the doctors urged colleagues not togive propylthiouracil as an initial treat-ment to children for an overactivethyroid. Dr. Mattison told the AssociatedPress there are “no guidelines for treat-ing Graves’ disease in children, andmost doctors don’t know of thisdanger.” Only about 8,000 youngstershave the disease and pediatriciansmight see only one or two cases intheir careers.

Methimazole, sold both as a genericand under the brand name Tapazole,also can hurt the liver, but the damageis less severe and causes obvious symp-toms. The damage is reversible onceuse of the drug stops, unlike withpropylthiouracil. Dr. Mattison notedthat methimazole is becoming morepopular because it can be taken justonce a day, instead of the two or threetimes a day for PTU. It should be notedthat parents should contact theirdoctor before taking a child off eithertreatment, according to Dr.Mattison.Source: Associated Press


GENENTECH WITHDRAWS PSORIASIS DRUGLINKED TO BRAIN INFECTIONS

Genentech Inc. has started to pull itspsoriasis treatment Raptiva from theU.S. market because of the drug’s linkto a rare, fatal brain disorder that hastroubled at least four other medicines.Genentech, the biotechnology companyacquired in March by Swiss drug makerRoche Holding AG, has told doctors notto write prescriptions for new patientsas part of a phased withdrawal ofRaptiva, which is to be completed byJune 8th.According to Genentech, about2,000 U.S. patients may currently betaking Raptiva.

The decision to withdraw the drug,which generated $108 million in U.S.sales for Genentech last year, cameafter three patients were diagnosedsince October with the brain infectionprogressive multifocal leukoenceph-alopathy (PMT), two of whom died.Thecompany has concluded that the risk ofPML, which causes irreversible braindamage, outweighed Raptiva’s benefitsin controlling psoriasis. Raptiva,approved in 2003, was designed to sup-press the abnormal immune responsethat triggers psoriasis, a painful, scalyrash that afflicts about 7.5 millionAmericans, according to the NationalPsoriasis Foundation.

At least four other drugs have beenlinked to PML risk. They includeRoche’s Cellcept, used to prevent trans-plant rejections; Biogen Idec Inc. andGenentech’s cancer drug Rituxan;Biogen’s multiple sclerosis treatmentTysabri and Genzyme’s leukemia drugCampath. PML occurs when a commongerm, called JC virus, mutates, thenevades the body’s immune defensesand penetrates the brain. Folks withsuppressed immune systems are mostat risk for PML.Source: Bloomberg

OLD DEVICES TO BE CHECKED BY THE FDA

Federal regulators announced lastmonth that they would ask makers ofsome of the riskiest medical devices on

the market to prove that their productswere safe and effective.This is a stepthat critics of the Food and DrugAdministration have said was longoverdue. In January, the GovernmentAccountability Office issued a reportcritical of the FDA for failing fordecades to fix its system for reviewingcategories of devices that have been onthe market since before the enactmentof the medical device law in 1976. Such“legacy devices,” as they are known,were originally allowed on the marketwith minimal testing. But Congress inthe 1976 law told the FDA to graduallyreclassify these older devices anddecide which ones needed extensivetesting before approval of new versionsand which ones did not.

Unfortunately, the FDA never finishedthat process, and as a result 27 differenttypes of devices were left unexamined.The products include artificial lungmembranes, external defibrillators andvarious pacemaker components. Fordecades, the federal regulatory agencyhas approved devices in these cate-gories for sale without demanding rig-orous tests showing that they worksafely. Investigators for the GAO statedthat it’s imperative that the FDA take“immediate steps” to fix its system forapproving such devices. The agencyagreed and, according to a report in theTimes, the FDA says it has alreadyundertaken a review of two of theseolder device types.The FDA announcedlast month that it was requiring makersof the other 25 types of devices tosubmit information to the agencywithin 120 days, detailing the products’safety and effectiveness.

It’s not known how long the reclassi-fication process for the older deviceswill take. The FDA must review eachdevice type separately and that couldtake some time.According to the NewYork Times, industry groups predictthat the FDA will conclude that most ofthe products are not risky enough towarrant greater scrutiny.The AdvancedMedical Technology Association, a tradeassociation, takes the position that thedevice types subject to the notice havealready been thoroughly reviewed by

the FDA.But consumer advocates arguethat the agency’s entire process forapproving medical devices needs over-hauling. Diana Zuckerman, president ofthe National Research Center forWomen and Families,observed:

It’s great that the FDA is finallygoing to look at pre-1976 devices,but the bigger problem is the lowstandards for approving any andall devices without clinical trials orany proof of safety or effectiveness.

Based on knowledge gained in drugcompany litigation, I agree with thelatter view.The FDA should make it apriority to upgrade its standards andprocedures relating to the approval ofmedical devices. The agency simplyhasn’t done its required job in that areaof its responsibilities. Hopefully, therewill be a total reform at the FHA duringthe Obama Administration.Source: New York Times

X.BUSINESSLITIGATION

FLORIDA ATTORNEY GENERAL FILES PRICEFIXING LAWSUIT

The Florida Attorney General’s officehas filed a lawsuit in federal courtagainst nine auto-filter manufacturersalleging they conspired to illegally fixprices since at least 1999.The suit, thefirst to be filed by a state AttorneyGeneral, joins a nationwide group offilter-related suits consolidated inChicago federal court. It’s alleged in theFlorida suit that executives of the com-panies met on numerous occasions tomaintain artificially high prices andallocate customers and markets for oil,air and fuel filters. The Defendantsnamed in the suit are: Champion Labo-ratories; Purolator Filters; HoneywellInternational;Wix Filtration; CumminsFiltration; Donaldson Co.; BaldwinFilters;Affinia Group; and ArvinMeritor.The suit seeks $1 million in fines for


each violation and any award it mayreceive tripled.Source: The Miami Herald

CLEARONE TRADE SECRETS AWARDREDUCED TO $9.7 MILLION

A federal judge has reduced the juryaward for audio and video companyClearOne Communications Inc. toabout $9.7 million.The case involvedallegations that former ClearOneemployees stole trade secrets related toaudio-conferencing technology. Theorder, filed in the U.S. District Court forthe Central District of Utah, resolvesseveral motions filed after a juryawarded ClearOne approximately$10.5 million in November of last year.Source: Law 360

BRISTOL-MYERS TO PAY $2.1 MILLION INPLAVIX CASE

Bristol-Myers Squibb will pay a $2.1million penalty for failing to inform theU.S. Federal Trade Commission aboutthe company’s earlier efforts to delay ageneric form of Plavix, its blockbusterblood clot preventer.According to theFTC, the civil penalty is the largest everallowed by the commission. Bristol-Myers was charged in 2006 with enter-ing into agreements with Canadiandrug maker Apotex in an effort to delaya U.S. launch of Apotex’s copycat formof Plavix. This was in return for pay-ments to Apotex from Bristol-Myers.

Despite the alleged arrangement, pri-vately-held Apotex subsequently sold itsgeneric in the United States for a shorttime before a federal judge barredfuture shipments of the product.Bristol-Myers’ arrangement with Apotex vio-lated the Medicare Modernization Act,which requires that certain drugcompany agreements be reported tothe FTC and to the Department ofJustice. In May, Bristol-Myers paid $1million to settle federal criminal chargesthat it lied to the Department of Justiceabout its Plavix agreement with Apotex.

In December, Bristol-Myers settled aninvestigation over the same matter

with the New York Attorney General’soffice on behalf of all 50 states and theDistrict of Columbia for $1.1 million.The latest settlement with the FTCbrings to an end all federal and stateinvestigations into the negotiationswith Apotex, which led to the oustingof Bristol-Myers’s then-chief executive,Peter Dolan, in September 2006.Source: Reuters

XI.INSURANCE ANDFINANCE UPDATE

CONSUMER ADVOCATES OPPOSE FEDERALINSURANCE REGULATION PLANS

As you probably know, there hasbeen a strong push in Washington forfederal regulation of insurance compa-nies. But a number of insurance con-sumer advocates are wary of thecurrent proposals for federal regulationof insurance currently being passedaround in the halls of Congress.Theyprefer taking their chances with animperfect state regulatory system overwhat many fear would likely emergefrom Congress under any federal regu-latory plan. Birny Birnbaum, executivedirector for the Center for EconomicJustice, said his group is interested ingoing wherever consumers can get thebest regulatory treatment. Most con-sumer groups believe the federal pro-posals are anti-consumer. While state-based regulation has its problems. Ibelieve that ordinary citizens will stillhave better protection with state-basedregulation than with any of the federal-regulation proposals that are being dismissed.

There may be a way to design anational regulatory scheme that isbetter than what consumers get nowwith the state-based regulation, but Idoubt it. Based on the extremely poorregulation in other areas that we haveseen from Washington over the years, Imuch prefer state regulation of insur-ance matters. But, it appears the debate

on this issue will be ongoing. Mychoice would be to see state legislativebodies give state regulators morepower and authority to regulate insur-ance and then monitor their perform-ance.That would be the best route totake in my opinion.Source: Insurance Journal

11TH CIRCUIT COURT OF APPEALS ISSUESFAVORABLE FACTA RULING

On April 9, 2009, the United StatesCourt of Appeals for the 11th Circuitissued an important opinion in a case(Grimes v. Rave Reviews Cinema,LLC) being handled by our firm. Thiscase had been consolidated on appealwith several other similar cases.Thesecases are national class actions broughtfor violations of the Fair and AccurateCredit Transaction Act (FACTA). It’salleged in each case that the Defen-dants illegally printed more than fivedigits of a customer’s credit or debitcard number on receipts. Congressenacted FACTA to protect citizens fromhaving too much of their personal/private credit card information dis-closed on printed receipts.The purposeof the Act was to prevent identity theft.

We filed the Rave case in FederalCourt in Birmingham,Alabama.The trialjudge ruled that FACTA was unconstitu-tional for a variety of reasons, butmainly that the guarantee of a penaltyagainst statute violators between $100and $1,000 per violation was constitu-tionally excessive. The 11th CircuitCourt of Appeals reversed the lowercourt, holding that it was not yet anappropriate time to challenge theexcessiveness of the statutory damagescalled for in the Act. Additionally, thepanel reversed a ruling by the lowercourt that the statute was unconstitu-tionally vague on how a jury should becharged on awarding damages in therange of $100 to $1,000 per violation.The Court held that the statute clearlydefines both the type conduct prohib-ited and the potential range of fines fora violation of the Act.

Our case was remanded to the Dis-


trict Court for further proceedings.Weare now preparing to address the issueof class certification. The ruling onappeal was a positive win for con-sumers who are seeking to protecttheir identity rights under the statute. Itwas a most important decision by theAppeals Court. Jay Aughtman from ourfirm is the lead lawyer in this case andwe believe it to be a very good one.

ARIZONA JURY AWARDS $55 MILLION INMETLIFE AUTO INSURANCE CASE

An Arizona jury has ordered MetLifeto pay $55 million in a bad faith case.The claim arose out of the insurer’srefusal to pay a $30,400 claim from acouple whose SUV was stolen and van-dalized.A new Ford Explorer owned byKenneth and Tammy Nardelli wasstolen in Arizona from a shopping mallparking lot in 2002. The vehicle waslater found in Mexico abandoned andseverely damaged.A claim was made bythe owners and a battle started overthe refusal to cover their claim withMetLife’s Auto & Home division. Thedispute lasted for six-and-a-half years.Although the Nardellis contended thatthe vehicle was a total loss and couldnever be restored to its original condi-tion, MetLife refused to replace theSUV. Instead, the insurer sent theirinsureds a check for $10,759 and cutoff payments for a rental car requiredunder their policy.

The Nardellis then filed suit, accusingMetLife of a deliberate bad faithscheme to deny them their rightsunder their insurance policy. Duringthe trial the jury was asked to compen-sate the couple for their emotional dis-tress and to award sufficient punitivedamages to punish MetLife and set anexample for other insurers. After amonth-long trial, the jury found thatMetLife had acted in bad faith in han-dling the Nardellis’ claim. Jurorsawarded the couple $155,000 in com-pensatory damages and $55 million inpunitive damages.

Internal MetLife documents indi-cated that the car qualified under the

company’s rules for a total loss andshould have been totaled. MetLifereported that it had a profit goal of$155 million for 2002, an increase ofabout $100 million from the previousyear. There was an indication in thecompany’s documents that if the divi-sion didn’t make that goal, it would besold. Documents—many of themmarked confidential—showed therewas extreme pressure on the claimsdepartment to assist in making thatgoal. Jurors viewed videos and docu-ments produced by MetLife’s homeoffice and distributed to the claimsoffice that encouraged staff to gettough on claims. MetLife also con-cealed information from the Nardellisthat there was a provision in theirpolicy stating that if the vehicle wasless than a year old and had fewer than15,000 miles, they were entitled to areplacement vehicle if their vehiclewas totaled.

Richard A. Dillenburg of The LawOffice of Richard A. Dillenburg inTempe,Arizona, and Steven C. Dawsonand Anita Rosenthal of Dawson &Rosenthal in Sedona, Arizona, repre-sented the Plaintiffs and did a verygood job.Source: Lawyers USA

$6 MILLION SETTLEMENT REACHED INNATIONWIDE SUIT

A $6 million settlement proposal hasbeen reached in a class action lawsuitagainst Nationwide. A hearing will beheld on June 5th to determine if the set-tlement will be given final approval.The lawsuit, filed by Michael Carr,claims Nationwide charged customersmore than the guaranteed maximumpremium on certain term life-insurancepolicies issued between February 10,1990, and February 2, 2006.The settle-ment could affect as many as 200,000people, most of whom have received anotice of the proposed class action set-tlement. For more information, visitwww.excesspremiumlitigation.com.Source: The Columbus Dispatch

NATIONWIDE INSURANCE SUED OVER HEALTHPOLICIES

A lawsuit has been filed againstNationwide Life Insurance Co. for theinsurer’s selling of fixed-paymenthealth plans that allegedly violatedminimum standards in the state ofWashington and which had not beenauthorized by the state. In the case,filed in U.S. District Court, three indi-viduals asked that the case be made aclass action covering 465 others inWashington who bought Nationwidehealth plans through employersbetween April 16, 2003, and August 27,2008. The Plaintiffs are seekingdamages of up to $10,000 for each vio-lation of Washington’s Consumer Pro-tection Act, plus refund of premiums,payment of previously denied claims,and legal costs.

If class action status is approved andthe complaint is upheld, consumer pro-tection violations alone could exceed$4.6 million—$10,000 per insured—and other damages could boost thetotal to more than $7 million. Con-sumer groups have been critical offixed-payment or fixed-indemnity plans.Unlike plans which pay a percentage ofmedical expenses or cap the expensesa consumer must pay, fixed-paymentplans set maximum payments for eachservice or expense that typically arefar below what is charged by doctors,clinics, hospitals and other healthcareproviders.

Such plans weren’t allowed in Wash-ington before July 22, 2007, and arenow permitted only with full disclosureto consumers and—as has long beenrequired for all insurance policies inWashington—by companies with a cer-tificate of authorization to provide thattype of coverage. Since such plans falloutside laws on portability of coverage,a person who seeks comprehensivecoverage after being on a fixed-indem-nity plan may have to undergo amedical examination and could be dis-qualified for pre-existing conditions.

The case is based largely on findingsby the state insurance commissioner’soffice, which began investigating the


case of one of the Plaintiffs more than ayear ago and allegedly uncovered infor-mation on other plan holders. I under-stand that Nationwide could be finedan unspecified amount for sellinghealth plans in the state without a cer-tificate of authorization until last Augustand for selling fixed-indemnity plansbefore they were allowed in July 2007.Source: Associated Press

XII.SECURITIESCASES

SECURITIES LITIGATION ON THE RISE

After a large increase in federal secu-rities class actions in 2008, U.S. compa-nies can expect to be under even moreintense scrutiny by regulators andenforcement agencies this year as theglobal financial crisis unfolds. A greatdeal of corporate greed and fraudulentconduct has been uncovered. In its2008 Securities Litigation Studyreleased on April 16th, Pricewaterhouse-Coopers points out that 210 federalsecurities class actions were filed in2008, a 29% increase from the 163 casefilings a year earlier. It was said that 48percent of all cases were in the finan-cial services sector.

The study shows that the Securitiesand Exchange Commission and U.S.Department of Justice had an unprece-dented number of Ponzi schemes on itsradar last year. The SEC tracked 70Ponzi cases between 2007-2008 andthe Commodity Futures Trading Com-mission reported that it followed twiceas many leads in possible Ponzi caseslast year as was the case in 2007, result-ing in prosecution in 15 cases.

Eighteen percent of lawsuits werefiled against Fortune 500 companies,up from 12 percent in 2007. In addi-tion, the number of class actions filedagainst foreign companies listed onU.S. stock exchanges reached an all-time high of 36 in 2008, up from 27 ayear earlier. According to the study,

three areas in which companies shouldbe particularly watchful in the next fewyears are: Institutional-Plaintiff activity,particularly related to public and unionpension funds; internal controlsaccounting-related allegations, andForeign Corrupt Practices Act enforce-ment. Jay Aughtman, Scarlette Tuley, andDee Miles are handling cases dealingwith these sorts of securities cases. Ifyou want more information you cancontact them at 800-898-2034 or byemail at [email protected],[email protected] or [email protected]: New Mexico Business Weekly

MORE CASES FILED AGAINST REGIONS-MORGAN KEEGAN

We are filing approximately 75 indi-vidual cases against Regions Morgan-Keegan (RMK) on behalf of clients wholost substantial sums of money incertain RMK Bond Funds.These fundswere managed by James Kelsoe andmarketed by Morgan Keegan as beingsafe, conservative investments. But, inreality the funds had an unacceptableamount of risky investments in deriva-tives. Investors lost more than 70% oftheir investments in less than a year.Each case will proceed in a FINRA arbi-tration proceeding. Scarlette Tuley andJay Aughtman will handle these casesfor the firm. For more information, youcan contact Scarlette or Jay at 800-898-2034 or by email at [email protected] or [email protected].

BANK OF AMERICA ACCUSED IN PONZILAWSUIT

A class action lawsuit has been filedagainst Bank of America, alleging thatthe bank effectively set up a branch ina Long Island office that helpedNicholas Cosmo carry out a $380million Ponzi scheme.The lawsuit, filedin Federal District Court in Brooklyn,contends that Bank of America “estab-lished, equipped and staffed” a branchoffice in the headquarters of Cosmo’s

firm, Agape Merchant Advance. Thelawsuit contends that the bank know-ingly “assisted, facilitated and fur-thered” Cosmo’s fraudulent scheme. It’salleged in the lawsuit:

Bank of America was at the epi-center of this scheme. WithoutBank of America’s participation,the scheme would not have suc-ceeded and grown to such anenormous size.

The lawsuit seeks $400 million indamages from Bank of America andother Defendants. Cosmo surrenderedto authorities in January in connectionwith a suspected Ponzi scheme involv-ing what he called “private bridgeloans” that promised investors returnsof 48% to 80% a year. Many of his 1,500investors were blue-collar workers andcivil servants.According to the suit, rep-resentatives of Bank of America workeddirectly out of Cosmo’s West Hemp-stead office, which was about 30 milesfrom the branch where Agape andCosmo maintained their bank accounts.

In addition, it’s alleged that Bank ofAmerica provided on-site representa-tives at Agape with bank equipmentand computer systems that alloweddirect access to the bank’s accountsand systems. If the allegations prove tobe true, this argument would appear tobe contrary to normal banking prac-tices. It’s alleged that the bank’s repre-sentatives had “actual knowledge” thatCosmo was “diverting money to hisown account”and “engaging in virtuallyno legitimate business whatsoever.” In acomplaint filed in January by the Com-modities Futures Trading Commission,the government contended that from2004 to 2008, Cosmo operated a fraud-ulent trading scheme in whichinvestors were solicited to provideshort-term bridge loans but that themoney instead went into commoditiestrading contracts that lost money.

This is not Cosmo’s first rodeo. Infact, this is the second time that he hasbeen accused of fraud. Cosmo had pre-viously served 21 months in federalprison in Allenwood, Pennsylvania, for


mail fraud. Upon his release in 2000,Cosmo’s broker’s license was revoked.He founded Agape after leaving prison.The lawsuit also names a number offutures and commodities trading firmsthat, according to the lawsuit,“assistedCosmo in running an illegal unregis-tered commodities pool.”The suit saysthat the trading firms should “neverhave accepted this business,” whichviolated “know your customer” dutiesthat are required of these firms.

One of the firms named in the suit wasMF Global. But a spokesperson for MFGlobal says that when the firm becameaware of Cosmo’s background lastOctober, it closed his account and noti-fied regulators.The account that Cosmohad, according to the spokesperson,wasan individual account and was not anaccount set up on behalf of his investors.Source: The New York Times

TEXAS MAN ORDERED TO PAY $86 MILLIONIN FRAUD SCHEME

A Texas man, who was sentenced inMarch to a ten-year prison sentence forcommodity fraud, has settled a civil suitfiled against him by defraudedinvestors. George Hudgins, the ownerof 3737 Financial L.P., was accused byinvestors and the federal governmentof orchestrating a fraudulent tradingscheme involving commodity futuresand options that bilked investors ofnearly $71 million. Specifically, Hudginswas accused of violating the anti-fraudprovisions of the Commodity ExchangeAct. According to both the civil andcriminal accusations against him,Hudgins lost the nearly $71 milliondollars of investor funds trading silver,sugar and S&P 500 index futuresthrough his firm.

Hudgins’ problems began when hebegan soliciting investors with promo-tional packets, newsletters, group pre-sentations, and face-to-face meetings.During these solicitations, Hudginsmade false representations about howlong his firm, 3737 Financial L.P., was inexistence, the size of the firm’s assetsand the firm’s history of profitability.

For example, in a promotional packetused in January 2005, Hudgins claimedthat 3737 Financial had gross annualreturns of 22% to 99% from 2000through 2007. However, according tothe Commodity Futures Trading Com-mission, 3737 Financial did not existbefore December 2003.

Instead of being a profitable enter-prise, 3737 Financial actually hadtrading losses that exceeded $28million, according to the lawsuit. It wasalleged that Hudgins kept his fraudu-lent scheme going by paying $17million in false “profits” to someinvestors using money he obtainedfrom other investors. Hudgins is allegedto have used the remainder of themoney to support an exorbitantlifestyle which consisted of owningseveral antique sports cars, Tiffanyjewelry, a 300-acre ranch and an air-plane. In the civil suit, U.S. DistrictJudge Leonard Davis of the Eastern Dis-trict of Texas approved a settlement inwhich Hudgins agreed to repay theinvestors and pay a $15 million fine tothe CFTC.Source: Findlaw.com

XIII.EMPLOYMENT LAW

TEMPORARY COST CUTTING MEASURESVIOLATE THE WAGE AND HOUR LAWS

Today’s difficult economic and finan-cial climate has many companies con-sidering various cost-cutting measures,including layoffs, reduced workweeks,pay reductions and voluntary fur-loughs. These actions raise wage andhour questions that often are over-looked. The unwary employer mayreduce payroll costs but wind up witha wage and hour lawsuit as a result.

Typically, payroll is an employer’slargest controllable expense.Therefore,when a company decides it needs tocut expenses, fast, they usually try anddo it off the backs of their employees.Reducing payroll costs can take manyforms including:

• involuntary layoffs, job eliminationsand workforce reductions;

• temporary shutdowns during summer,holidays or other seasonal slowperiods;

• voluntary furloughs;

• reduced workweeks;

• temporary or permanent reductionsin salaries or hourly pay rates; and/or

• elimination of bonus programs orother incentive compensation.

What often gets overlooked,however,are wage and hour considerations.Many payroll reduction measures fail tocomply with the Fair Labor StandardsAct,as well as state wage and hour laws.The main wage and hour risk associatedwith these cost-saving measures relatesto exempt employees (salaried employ-ees). Employees who are classified asexempt under the executive, adminis-trative, and professional exemptionsgenerally must be paid on a “salarybasis” to remain eligible for the over-time exemption. This means that theemployee must receive the sameamount of pay each pay period (at least$455 per week under the FLSA) regard-less of the “quality”or “quantity”of workperformed. Making certain deductionsfrom or reductions to the employee’ssalary can result in the exemptionbeing lost, not only for the affectedemployee, but also for other employeesin the same job classification.

As a general rule an exemptemployee’s salary cannot be docked foran absence caused by the employer orthe operating requirements of the busi-ness. The Department of Labor’s(“DOL”) regulations interpreting theFLSA put it this way:“If the employee isready, willing and able to work, deduc-tions may not be made for time whenwork is not available.” So, if the opera-tion is slow due to a strugglingeconomy, the employer cannot tellexempt employees to stay home onFriday and then deduct a day’s worth ofpay from the exempt employee’s salary.The prohibition on salary deductions


presents an obstacle to employerswishing to curtail payroll expenses viareduced workweeks, temporary layoffs,shutdowns and furloughs that impactpartial workweeks.

There are some exceptions to therule regarding when an employer canreduce a salaried employee’s paywithout violating the law. Most of thetime those exceptions require theemployer to shut down the operationfor more than a full week and/or makea permanent, long-term switch to ashortened shift. In rare circumstances,an employer may announce an across-the-board cut in pay.This move is typi-cally legal as long as the hourlyemployees still make more than theapplicable minimum wage and thesalaried employees make at least $455per week.

If you have recently experienced acut in pay and/or had your compensa-tion reduced because of a scale back oreconomic slowdown, it may be worthasking a lawyer to review your circum-stances. In many instances, thecompany may not be allowed to legallyreduce your pay. If you need moreinformation, contact Roman Shaul at800-898-2034 or by email [email protected]

THE WEIGHT OF YOUR TRUCK MAY MEANTHE DIFFERENCE IN YOUR OVERTIME PAY

Under the Fair Labor Standards Act(FLSA),“motor carriers” have tradition-ally been exempt from the overtimerequirement that employees receivetime and one-half for all hours workedin excess of 40 each week. However,recent legislation has narrowed the useof this exemption and now providesfor more protection to workers thanpreviously allowed. The SAFETEA-LUTechnical Corrections Act of 2008(TCA) restricts the classes of employ-ees who might qualify for the motorcarrier exemption. Unfortunately forworkers, the TCA limits an employer’sliability for certain overtime violationsthat occurred before August 10,2006.

Generally, the motor-carrier exemp-

tion applies to employees who areunder the regulatory authority of theDepartment of Transportation and forwhom the U.S. Secretary of Transporta-tion can set qualifications andmaximum service hours. SAFETEA-LUlimited the Transportation Secretary’spower to certain employees whosework involves vehicles having either agross-vehicle-weight or a gross-vehicle-weight-rating of at least 10,001 poundsor more. Despite the 10,001 poundlimit, many companies used the motorcarrier exemption in situations involv-ing lighter vehicles, such as automo-biles, small trucks, SUVs, and compactvans. In other words, there have beenthousands of employees who mostlikely should have received overtimepay,but didn’t.

Although the TCA restored some ofthe Secretary of Transportation’spower, it does not permit the motor-carrier exemption to be premised onlighter vehicles. Instead,TCA defines aclass of “covered employee[s]” that issubject to FLSA overtime despite themotor-carrier exemption. Broadlystated, a TCA “covered employee” issomeone who might otherwise bewithin the motor-carrier exemptionbut:

• whose work even partly affects theoperation of motor vehicles weigh-ing 10,000 pounds or less (withlimited exceptions); and

• who performs duties on such motorvehicles.As a result, an employer stillcannot apply the motor- carrierexemption on most lighter vehicles.

Accordingly, if you know of a personwho operates a light motor vehicle, butdoesn’t receive overtime pay for allhours worked over 40 each week, theiremployer may be in violation of thelaw. We have many clients where thishas, in fact,been the case.

As the economy worsens and compa-nies look for ways to save money, weexpect that we will see even morecompanies try and squeeze dollars outof their employees by denying themwages to which they are legally enti-

tled. If you need more information,contact Roman Shaul at 800-898-2034or by email at [email protected].

MERRILL LYNCH SETTLES EMPLOYEELAWSUIT FOR $75 MILLION

Merrill Lynch & Co., now owned byBank of America Corp., has agreed topay $75 million to settle a class actionlawsuit by employees who lost moneyinvesting in Merrill stock through theirretirement plans.The Plaintiffs filed suitagainst Merrill in November 2007,alleg-ing violations of the Employee Retire-ment Income Security Act.The partiesreached a settlement in February andin March a federal judge gave it prelimi-nary approval.

The Plaintiffs alleged that Merrilloffered its stock as a retirement planoption when it was “imprudent” to doso, given the company’s growing expo-sure to subprime mortgages and othertoxic debt.According to the complaint,Merrill’s actions ran “directly counter”to the purpose of ERISA pension plansto provide funds for employees’ retire-ment.The class period covers Septem-ber 30, 2006 through December 31,2008. Merrill shares lost more than 80%of their value over that time, accordingto Merrill’s website. Bank of Americaacquired Merrill on January 1, 2009.Merrill posted a $15.84 billion loss inthe fourth quarter. A July 27th hearinghas been set for final court approval ofthe settlement.Source: Reuters

COURT RULES THAT ERISA DOESN’TSHIELD TYCO FROM FRAUD ACTION

In a most significant decision, afederal judge has ruled that Tyco Inter-national Ltd. can’t rely on an EmployeeRetirement Income Security Act provi-sion that shields fiduciaries against lia-bilities from retirement plan lossesstemming from beneficiaries’ controlover their assets.The ruling came in aclass action that is part of multidistrictlitigation alleging a massive accounting


fraud at Tyco. Judge Paul Barbadoro ofthe U.S. District Court for the Districtof New Hampshire granted the planparticipants’ motion for summary judg-ment that Tyco couldn’t use the ERISAas a shield in the fraud case.Source: Law360

XIV.PREDATORYLENDING

PAYDAY LENDERS FIGHT LEGISLATIONLIMITING ACTIVITY

The payday loan industry is using agroup of well-connected lobbyists,along with very large sums of cam-paign cash to key lawmakers, to keepfrom being properly regulated.Appar-ently, this strategy has paid off based onwhat is happening in Congress. Even akey Democrat who once tried to banthe practice now is pushing efforts to“regulate” payday lenders. The law-maker, Rep. Luis Gutierrez (D-IL), sayshis bill does have crucial protectionsfor borrowers and is “the best deal” hecan get because of the industry’saggressive lobbying. Consumer groupsare condemning the bill as a loophole-riddled gift to the industry.The paydaylenders—a multi-billion dollar industry—are very powerful and their influ-ence can’t be underestimated.

It’s undisputed that payday loans arevery hurtful for low-income citizens.These are small, very short-term loanswith extremely high interest rates thatare in effect cash advances on a bor-rower’s next paycheck. They’re typi-cally obtained when a borrower goesto a check-cashing outlet or an onlineequivalent, pays a fee and writes a post-dated check that the company agreesnot to cash until the customer’s payday.Finance charges typically amount toannual interest rates in the triple digits,around 400%, and can go as high asdouble that. Payday loans are inherentlyabusive products that trap borrowersin a devastating debt cycle.They are as

bad and abusive as anything that folkswho go paycheck to paycheck have todeal with.

Congress moved in 2006 to effec-tively ban payday lending for militarypersonnel by imposing a 36% interest-rate cap for such borrowers, and 15states either prohibit the practice out-right or have similar caps. But the loansare virtually unregulated in two dozenother states, a situation that is intolera-ble. The Gutierrez bill—if passed—would cap the annual interest rate for apayday loan at 391%, ban so-called“rollovers”—where a borrower whocan’t afford to pay off the loan essen-tially renews it and pays large fees—and prevent lenders from suing bor-rowers or docking their wages tocollect the debt.

But consumer groups say the legisla-tion would do little to crack down onthe most egregious payday lendingpractices.They argue it would for thefirst time lend federal legitimacy to usu-rious loans and undermine successfulefforts under way in several states toslap tougher limits on the practice. JeanAnn Fox, who is with the ConsumerFederation of America, says:

We don’t believe that this is goingto protect consumers. It would infact condone the payday lendingthat can be extremely harmful tothe people who can least afford it.

Ms. Fox testified before Rep. Gutier-rez’s subcommittee on behalf of sevenconsumer groups that are rightly out-raged about the measure. They’repushing to cap all lending interest ratesat 36% annually.But it appears the lobby-ing activities by the payday lenders ispaying off.The payday lending industry’strade association has spent more than$1 million annually for each of the lastfour years lobbying Congress, including$1.4 million last year, according to dis-closures filed with Congress. It hasbeefed up its team of Washington hiredguns to a dozen lobby firms, includingwell-connected financial services lobby-ists Tim Rupli and Wright Andrews, whoeach have firms bearing their names.

Campaign giving has greatlyincreased in recent years.The industryalso formed a political action commit-tee that contributed more than$200,000 in 2007 and 2008, much ofthat to lawmakers who serve on theSenate Banking and House FinancialServices committees, according toFederal Election Commission filingscompiled by the Center for ResponsivePolitics. Those committees have juris-diction over the industry. In addition totheir trade association, individualpayday lending companies includingCash America Inc. and Advance AmericaCash Advance, have also stepped uptheir political activities. Hopefully, Pres-ident Obama and his allies in the Houseand Senate will prevail over the forcesof evil and win this battle.Source: Associated Press

XV.PREMISESLIABILITY UPDATE

REFINERY WORKER’S FAMILY SETTLESREFINING EXPLOSION LAWSUIT

The family of a man who was killedin a Blue Island refinery explosion 14years ago has reached a $6 million set-tlement with the refinery’s operator.ACook County judge approved the set-tlement between the family of GarySzabla and Clark USA Inc., now calledPremcor. The settlement awards thevictim’s widow $6 million in additionto the workers’ compensation benefitsshe has already received. This settle-ment ends a 12-year legal battle thatreached the Illinois Supreme Court.Szabla, 37, and a co-worker, MichaelForsythe, were killed on March 13,1995 when a fire triggered an explo-sion at the Clark Oil refinery. Threeothers were injured in the blast. Thefamilies of the two workers filedwrongful death lawsuits.

A Cook County judge initially fol-lowed Clark USA’s claim that,because ithad no direct control over day-to-day


operations at the refinery, the companycould not be sued.The company alsoclaimed it was shielded from a lawsuitby Illinois’ workers’ compensation law.But the Plaintiff’s lawyer responded bysaying that the explosion resulted fromsevere budget cuts that resulted inrefinery employees doing maintenancejobs they weren’t trained for.The Illi-nois Appellate Court overturned theCook County judge’s decision, butClark USA appealed to the stateSupreme Court. The High Court in2007 upheld the Appellate Courtruling, finding that the company couldbe held liable because it had directcontrol over the refinery’s operatingbudget.

The Supreme Court also said ClarkUSA wasn’t shielded by workers’ com-pensation law because it didn’t directlyemploy the two men who were killed.The settlement was reached in January,following a mediation session with aretired judge. Reportedly the lawsuitover Forsythe’s death is close to a set-tlement. After the explosion, the U.S.Occupational Safety and Health Admin-istration fined Clark Refining, the sub-sidiary that ran the refinery, $1.2million, citing dozens of violations ofworkplace safety rules. Edward Willer, alawyer with Corboy and Demetrio inChicago, represented the Szabla familyand did a very good job.Source: Southtown Star

OWNER OF APOLLO NUCLEAR PLANTSETTLES SUIT WITH RESIDENTS

People who live near a formernuclear fuel plant will receive $52.5million to settle their 14-year-oldlawsuit against Babcock & Wilcox Co.The settlement, which was approvedby a federal judge in Pittsburgh on April17th, ends the final claim brought by365 people who live in the Apollo area,which is about 35 miles northeast ofPittsburgh. The same group received$27.5 million to settle claims againstAtlantic Richfield Co. Plant emissionsand groundwater pollution caused anunusually high cancer rate, other ill-

nesses and property damage.The caseconcerns the former Nuclear Materialsand Equipment Corp. plant, which wasbuilt in 1957 and sold to ARCO in 1967.B&W bought the plant in 1971 and hasbeen cleaning up the site since shut-ting it down in the 1980s.Source: Associated Press

IMPERIAL SUGAR WAS WARNED BEFOREEXPLOSION

A consultant hired by Imperial Sugarissued a report warning the companyabout dust hazards at its Georgia refin-ery two days before a deadly explosionfueled by sugar dust erupted at theplant near Savannah, Georgia.Accord-ing to the Savannah Morning News,the consultant, McAljon Engineering,warned the company in a report datedFebruary 5, 2008 that the refinery’sdust collection systems were impaired.Two days later, the massive explosionoccurred in the plant, killing 14workers and injuring dozens more.Imperial Sugar claims it did not receivethe consultant’s report until after theblast occurred. Federal investigatorslater blamed the explosion on sugardust that ignited like gunpowder.Lawyers for Imperial Sugar claim thatthe consultant never made such areport and had actually faked it afterthe explosion.

But the Occupational Safety andHealth Administration said last July thatImperial Sugar executives knew aboutdust hazards at the plant. The agencysaid its investigation of the Georgiaexplosion found company audits, insur-ance records and other documentsshowing the company had beenwarned about combustible dusthazards at its plants several times since2002.OSHA has proposed fines totaling$8.7 million against Imperial Sugar forsafety violations at the Georgia refineryand at another plant in Gramercy, La.The Sugarland,Texas-based company iscontesting the fines.

The Savannah newspaper reported itobtained three reports—from 2006,2007 and last year—from consultants

hired by Imperial Sugar that cited prob-lems with the refinery’s dust collectionsystems.An August 2006 report said thesafety system was outdated.The reportdated two days before the deadly blastsaid parts of a machine used to suckdust from the air inside the plant wereoperating at about half the air flowthey were designed to produce.A fewdust collection pathways were blockedaltogether. Imperial Sugar claims it didnot ignore safety concerns raised by itsconsultants. Imperial says it took actionin terms of repairs and maintenance toits dust collection systems prior to theFebruary 7, 2008 explosion, along withmany other efforts towards improvingsafety at the facility.

Source:Associated Press

CHEMICAL COMPANY SAID TO HAVEWITHHELD INFORMATION ABOUT EXPLOSION

It appears that a chemical companywithheld information about a hugeexplosion that occurred last August atthe West Virginia plant. Managersrefused for several hours to tell emer-gency responders the nature of theblast or the toxic chemical it released.They later misused a law intended tokeep information from terrorists to tryto stop federal investigators from learn-ing what had happened.A U.S. Housesubcommittee has been investigatingthis matter. The explosion, at BayerCropScience, in Institute,West Virginia,killed two employees and sickened sixvolunteer firefighters. It was felt tenmiles away, and a tank weighing severalthousand pounds “rocketed 50 feetthrough the plant,” according to com-mittee investigators.

Fortunately, it did not go in the direc-tion of a tank holding the same chemi-cal that killed thousands in a 1984chemical plant explosion in Bhopal,India. Devices meant to detect releasesof the chemical, methyl isocyanate, orMIC, had been disabled, and videocameras had been disconnected, stepsthat “raise concerns about an orches-trated effort by Bayer, a subsidiary ofBayer AG, to shroud the explosion in


secrecy,” according to the subcommit-tee chairman, Representative BartStupak,Democrat of Michigan.

After the Bhopal catastrophe, Con-gress created an independent agency,the Chemical Safety and Hazard Investi-gation Board (CSB), to investigatechemical accidents in this country. ButBayer’s chief executive, WilliamBuckner, said in his prepared testimonyfor the committee that company offi-cials believed they could “refuse toprovide information” to the board.Later, Buckner said that company offi-cials labeled some documents ashaving security-sensitive information inorder to “discourage the CSB from evenseeking this information.”

The company acted under a 2002law intended to make ports moresecure—Bayer CropScience bringsbarges in on the Kanawha River—andsaid that it was under the jurisdictionof the Coast Guard, an agency that doesnot have extensive experience inchemical processing. In response toquestions, Buckner said that thecompany later found that 88 percent ofthe 2,000 documents it had marked asbeing “security sensitive”were not.

The plant was previously owned byUnion Carbide, which also owned theplant in Bhopal that had released tonsof MIC in December 1984. It appearsthe company endangered people in thearea by giving no meaningful informa-tion for hours and turning away sixemergency responders.Source: New York Times

$7.49 MILLION AWARDED TO GROUPPOISONED BY FAULTY HEATER

Eighteen former Job Corps volun-teers were awarded a total of $7.49million in damages by a jury for braininjuries they suffered when a heatingsystem malfunctioned and leakedcarbon monoxide into their dormitoryin Anaconda. The verdict was againstLennox Industries Inc. of Richardson,Texas, saying the corporation manufac-tured a line of defective heatingsystems that led to the poisoning of the

volunteers.The Plaintiffs were asleep inthe dormitory in August 2004 when thedefective piping of a CompleteHeatfurnace system malfunctioned, leakingthe odorless gas throughout the build-ing. The victims, many of themteenagers at the time, suffered perma-nent brain damage and other injuries.James K. Lubing, a lawyer from JacksonHole, Wyoming, who helped try thecase, said:

One night they were all sleepingin their dorm rooms and the nextthing they know they’re being air-lifted all over the country. Somewere unconscious, some werehaving seizures, the whole gamut.But they all suffered significantpoisoning.

Evidence presented at trial showedthat Lennox distributed 40,000 fur-naces of the same model and installedthem in businesses and homes through-out the country.The lawsuit was filedin February 2006 and sought damagesfor brain injuries, physical and emo-tional pain, loss of established course oflife, loss of earning capacity andmedical bills. Anderson’s Heating andAir Conditioning Inc. of Missoula, thecompany that installed the defectivefurnace, was a Defendant in the com-plaint, but reached a settlement beforethe trial. The jury found that Lennoxwas responsible for 70% of the negli-gence, while Anderson’s was responsi-ble for 30%. The jury awardedindividual payments ranging from$268,000 to $591,000.Source: GreatFallsTribune.com

SETTLEMENT REACHED IN SAUNA DEATHSUIT

A woman, whose husband died twoyears ago after being found uncon-scious in the men’s sauna at theLafayette Family YMCA, has settled thelawsuit she filed against the organiza-tion. The widow, Berma L. Johnson,recently received payment from theYMCA’s liability insurance carrier in aconfidential settlement. Mrs. Johnson

filed the suit in February 2008 in aLouisiana state court, alleging that theYMCA failed to properly monitor thesauna and that employees may haveremoved or modified its timers.Attor-ney Jeff Coon represented Mrs.Johnson and did a very good job.Source: jconline.com

JURY AWARDS VIRGINIA WOMAN $3.2MILLION

A woman whose pelvis was crushedwhen more than 350 pounds of coun-tertops suddenly fell on her at an Ikeastore has been awarded $3.2 million bya Fairfax County jury. A stack of fourcountertops and a door collapsed onher as she stopped near a section ofbargain items at the Potomac Mills Ikeastore in July 2006. The countertopswere stacked upright on their shortsides rather than their long eight-footsides and were restrained only by anelastic bungee cord.The woman, whowas an avid hiker and bicyclist, had ametal plate placed in her pelvis thatwas replaced with another device afterthe pain continued. According to herdoctors the pain will likely continue forthe rest of her life.This was a most sig-nificant premises liability lawsuit. Busi-nesses that invite customers to shop attheir retail stores must take precautionsto ensure the safety of their customers.Source: Insurance Journal

XVI.WORKPLACEHAZARDS

$7 MILLION VERDICT IN CONSTRUCTION SUIT

A jury in Scott County,Wisconsin, hasawarded more than $7 million to a Wis-consin man who fell three stories in aconstruction accident in Le Claire.Thejury ruled for Allen Frohne, who suf-fered permanent injuries in a fall thatoccurred during construction of aHoliday Inn Express in 2005. He wasinjured when a lift tipped over. Mr.


Frohne had been hired as a sub-con-tractor to do the gutter work on theproject. During the trial, an expert testi-fied that eight OSHA violationsoccurred at the construction site.Thejudgment was against Le Claire HotelGroup and Gibbs Construction.Source: DesMoines Register

ALABAMA MINE OPERATOR FINED $280,000

A federal agency has levied a$280,000 fine against the operators of acoke mine in Shelby County,Alabama.The penalty was assessed againstShelby Mining Co., LLC, after twominers were seriously burned whenmethane ignited.According to the U.S.Department of Labor’s Mine Safety andHealth Administration, the miners wereburned October 2, 2008 at Coke MineNo. 1 in Shelby County.An MSHA offi-cial said the mine has a history ofmethane ignitions, with eight beingreported since October 2006.Source: Associated Press

MASSEY ENERGY FINED $2.5 MILLION FORFATAL WEST VIRGINIA MINE FIRE

A Massey Energy subsidiary was fined$2.5 million last month after a federaljudge accepted the company’s guiltyplea to ten criminal charges for a firethat killed two West Virginia coalminers. U.S. District Judge John Copen-haver approved the plea deal byAracoma Coal Co. despite a provisionsparing Massey officials and the Rich-mond,Virginia, coal company from pros-ecution. The agreement also requiredAracoma to pay a $1.7 million fine forcivil violations found by the federalMine Safety and Health Administration.The charges arise out of a January 19,2006, fire at Aracoma’s Alma No. 1 minelocated about 60 miles from Charlestonin West Virginia’s southern coalfields.Aracoma pleaded guilty to violatingseveral federal safety requirements.

Miners Don Bragg and Ellery ElvisHatfield got lost when thick smokeentered what was supposed to be asealed escape route. While other

crewmembers escaped through a sec-ondary tunnel, Bragg and Hatfield gotseparated and died. Government inves-tigators later faulted Aracoma forremoving two air-control walls thatallowed smoke into the escape tunnel.Separate state and federal investiga-tions concluded an overheated con-veyer belt caused the fire.The Aracomafire—along with methane gas explo-sions that killed 12 men at the SagoMine in West Virginia and five at theKentucky Darby mine in eastern Ken-tucky in 2006—prompted sweepingchanges to federal and state coal minesafety laws.

U.S.Attorney Charles Miller said the“evidence simply did not support acriminal prosecution of Massey or itsofficers.” He added that the violationswere “limited to Aracoma.’’The investi-gation continues. Aracoma foremanDavid R. Runyon pleaded guilty to amisdemeanor charge of failing toconduct safety drills at the mine. Hissentencing is scheduled for July 9th.Bruce Stanley, the lawyer who repre-sents the two widows, asked JudgeCopenhaver to reject the plea deal,saying it protects Massey and ChiefExecutive Don Blankenship. Massey,the nation’s fourth-largest coal pro-ducer by revenue, settled a separatelawsuit brought by the widows inNovember.Source: Insurance Journal

FAMILY SUES IN DEATH OF CONSTRUCTIONWORKER

The widow of a construction worker,who died last month when a buildingcollapsed on him, has filed a wrongfuldeath suit against Townhaven Construc-tion and Stellar Staffing Inc., a subcon-tractor, and the job placement firm thathired him. It was alleged that theDefendants sent the worker to anunsafe jobsite.The 24-year-old workerwas killed, and two other constructionworkers were injured, when a buildingat a former HouTex Inn collapsedduring renovation on April 14th. Con-struction workers were replacing joistson the first floor of the building when

the top floor began to shift.The build-ing ultimately collapsed.According toreports, the structure had little bracingto stop the movement.Source: Houston Chronicle

COMPANIES SETTLE LAWSUIT OVER FATALCRANE COLLAPSE

Two Seattle companies, LeaseCrutcher Lewis and Magnusson Kle-mencic Associates (MKA), involved inerecting a construction crane that col-lapsed in 2006 in Bellevue,Washington,have settled a lawsuit filed by theparents of a Microsoft lawyer.The manwas killed when the crane crushed himas he sat in his apartment. LeaseCrutcher Lewis was the general con-tractor overseeing the operation of thebuilding, which the crane was beingused to construct. A third company,Northwest Tower Crane Services,which was found to have no responsi-bility for the collapse, was dismissedfrom the suit. It was alleged in the suitthat all three companies were negligentin their roles in the installation, designand operation of the crane.

The 210-foot crane was being used toconstruct the Tower 333 building indowntown Bellevue. It came crashingdown on two buildings, one beingwhere the victim lived. MKA was incharge of the structural engineering ofthe crane while Lease Crutcher Lewis,as the general contractor, was oversee-ing the operation. State investigatorsfined Lease Crutcher Lewis and MKAfor improper design and constructionof the crane, but the citation againstMKA was dismissed on appeal.

In an unusual arrangement, the cranehad been attached to steel I-beams inan underground parking garage leftover from an earlier, unfinished con-struction project on the site.After thecrane was cut up and removed, itsreplacement was attached to a con-crete pad on the ground, the traditionalway to anchor a construction crane.

On the eve of trial, MKA admittedsome liability in the collapse, but con-tinued to blame Lease Crutcher Lewisfor its role in the incident. Matthew


Knopp,a Seattle lawyer, represented thevictim’s family and did a very good job.Source: Seattle Times

XVII.TRANSPORTATION

THERE IS A STRONG PUSH FOR NEWSAFETY RULES

As we have reported in prior issuesof the Report, there have been anumber of bus disasters in the UnitedStates over the past two years. Onesuch disaster, the crash of a charteredski bus in Utah earlier this year,resulted in nine deaths and 42 otherpassengers injured.That incident got agreat deal of national attention.The ele-ments of the Utah crash—a strippedroof, the lack of seat belts, mass ejec-tions—are far from extraordinary.Thisaccident was one of half a dozen simi-larly deadly bus disasters in the UnitedStates over the past two years. Theaccidents have renewed calls forexpanded federal safety oversight ofthe country’s commercial bus industry.

According to the latest U.S. govern-ment data,51 people died in commercialmotor coach crashes in 2007,an increasefrom 39 in 2006.There were 57,000 buscrashes that year, although that numbercombines commercial accidents withthose of other types of buses. Data from2008 are not yet available.Since 2000—ayear after the National TransportationSafety Board issued a report calling forstronger federal rules to prevent buscrash fatalities—401 people have died inmotor coach accidents. Although thedeath rate is only half that of passengercars, it is about four times that of passen-ger trains and 25 times that of commer-cial airliners.

Fortunately, even quite late, the NTSBis now making a strong push for bettersafety rules for buses.The board’s rec-ommendations for new bus safety rulesinclude improved window designs andstronger roofs but still no seat belts. Inresponse, federal regulators at theNational Highway Traffic Safety Admin-

istration have started to crash-testbuses, but they have yet to formallybegin the process of writing new rules.Hopefully, the agency will move rapidlyon this issue.

Legislation to overhaul motor coachsafety has been reintroduced in Con-gress this year. Senators Sherrod Brown(D-Ohio) and Kay Bailey Hutchinson(R-Tex.) are pushing the legislation.Safety groups blame bus industry lob-bying groups, including the AmericanBus Association, for pushing competingfederal legislation that sets up road-blocks to new bus rules. An industry-backed bill unnecessarily draws outtimetables for new rules, partly bydemanding more scientific research.That is just another delaying tactic.Because of the reaction to the string ofcrashes, NHTSA, which has the powerto mandate new motor coach safetyequipment, has started to take action.Hopefully the agency will be seriousabout this undertaking.

I have never understood why busesshouldn’t have seat belts. School buses,which are not required to have seatbelts, have been the subject of deeperscrutiny over the years and must meetdifferent safety standards. Officials inthe motor coach industry say theirbusiness is safe. Gerald Donaldson,senior research director for the Advo-cates for Highway and Auto Safety, saidregulators in the European Union andAustralia have required seat belts onbuses since the 1990s.

But Donaldson says the lack of U.S.regulations extends beyond seat belts.Motor coaches aren’t required to havestability control that would protectagainst rollovers, a technology the gov-ernment requires for passenger vehi-cles.Additionally, Donaldson questionsthe level of state and federal scrutiny ofnew bus companies, the thoroughnessand frequency of vehicle inspections,border enforcement of the even morelightly-regulated Mexican buses, theabsence of training and driving stan-dards for drivers, and loopholes inmedical rules relating to requiredexaminations of drivers.Source: Washington Post

WOMAN RUN OVER BY BUS IS AWARDED$27.5 MILLION

A jury in New York awarded $27.5million last month to a woman wholost her left leg after a New York CityTransit bus ran over her.The incidentoccurred as the bus was turning acorner two blocks from her apartmentin 2005.The jury found both New YorkCity Transit and the bus driver guilty ofnegligence and found them to be 100%responsible for the woman’s injury.

The wheel, with its 40,000 pounds ofweight, crushed a portion of thewoman’s lower left leg, from just abovethe ankle to below the knee, althoughthe foot was not damaged.After tryingto save the leg, the doctors had to ampu-tate it.Two weeks later, the doctors hadto perform another operation becauseof infection and amputated the remain-ing part of the woman’s leg up to thegroin.The woman has been unable towork since that time.

In recent months, New York jurieshave awarded three other Plaintiffs inpersonal injury cases against New YorkCity Transit a total of about $11 million.The agency is appealing all of thoseverdicts.Source: The New York Times

$13.7 MILLION AWARDED IN SOUTHBARRINGTON CRASH LAWSUIT

A Cook County jury has found infavor of the family of a BMW salesmanin its wrongful death suit against a manwho took a test drive and crashed thecar, killing the salesman. The juryawarded the decedent’s family $13.7million, concluding that ChristopherMaher, the driver, was liable for thedeath. On the day of the crash, Maher,then 20 years of age, went to the BMWdealership where the salesman worked,presented his driver’s license and tookout a 2003 530i sedan for a test drive.The salesman sat in the front passengerseat, while two of Maher’s friends sat inthe rear.

At about 5:50 p.m. the BMW drivenby the customer was traveling at about


95 mph when it clipped the front endof a car making a left turn onto thehighway.The BWM then swerved andhit a light pole with the front passengerside of the car taking the brunt of theimpact. Maher, who was ejected, andhis two friends suffered seriousinjuries, but survived. The salesmandied as a result of his injuries.

In October 2005, Maher pleadedguilty to aggravated speeding in con-nection with the crash. He was sen-tenced to one year of probation and 30days of community service.Timothy J.Cavenagh, a lawyer from Chicago, rep-resented the family of the salesman anddid a very good job.Source: Chicagobreakingnews.com

TRUCKER WHO WAVED CAR ONTO HIGHWAYWAS AT FAULT IN NEW JERSEY CRASH

A jury in New Jersey has returned averdict of $1.5 million in damages infavor of a man who was injured whileoperating a motorcycle on a publichighway.According to trial testimony,the June 2006 crash occurred after atruck driver waved another vehicle thatwas in a doughnut store lot into thehighway. As that vehicle crossed thehighway, it collided with the motorcy-cle.The driver of the motorcycle sus-tained a concussion, a permanent arminjury and cracked five teeth.

The truck driver denied at trial thathe waved the car into traffic, but apolice officer said the trucker told a dif-ferent story at the scene. The verdictreflects a provision in state law whichholds drivers in New Jersey liable ifthey negligently wave others intotraffic. In most states it would be negli-gent conduct, but based on commonlaw principles.Source: Insurance Journal

FAMILY INJURED IN NEW JERSEY CAR CRASHIS AWARDED $17 MILLION

A family injured in a head-on car crashin Tuckerton, New Jersey, has beenawarded $17.5 million by an OceanCounty jury. In August 2006, Jennifer

Roden was driving to a car dealershipwith her husband and their three youngchildren when another car crossed overthe center line and struck their vehicle.All three children were hurt. One of thechildren suffered a spinal injury that lefther with permanent leg paralysis. Theother driver, Corey Clifford, who hadjust left work, was on his way homewhen the crash occurred. The Defen-dant admitted fault and the case wastried solely on damages. Norman M.Hobbie, a lawyer from Eatontown, NewJersey, represented the family and did avery good job.Source: Associated Press

ASA GROUNDS JETS FOR INSPECTIONS

Atlantic Southeast Airlines, a majorregional carrier for Delta Air Lines,grounded 60 of its 110 50-passengerjets last month after an internal auditraised safety concerns.The groundingscaused some flight delays for passen-gers flying ASA. A paperwork auditraised questions about whether theengines on Bombardier CRJ200 jetshad been properly inspected accordingto the guidelines provided by theengines’ manufacturer. ASA reportedthe problem to the Federal AviationAdministration and grounded theplanes so they could re-inspected as aprecautionary measure.The airline pro-vides air service to Birmingham, Mont-gomery and Mobile in our state.Source: Associated Press

NTSB SAYS AMERICAN AIR MAINTENANCELED TO JET FIRE

The National Transportation SafetyBoard has concluded that faulty mainte-nance caused an American Airlinesengine fire that forced an emergencylanding in St. Louis in 2007.The safetyboard found that the pilots’ failure tocomplete a checklist during the emer-gency prolonged the fire, and Americanshortcomings in detecting mainte-nance flaws contributed.The findingsmay add pressure for maintenanceimprovement at AMR Corp.’s American,

which was forced by regulators toground planes last year for flawedinspections. In the St. Louis incident,workers repeatedly used a tool prohib-ited by the jet’s maker to manually startthe engine. In making the announce-ment, NTSB Acting Chairman MarkRosenker told reporters:

You can’t just be taking processesout of your hip pocket that arenot the approved manuals, thatare not the approved procedures,and expect to be able to get theappropriate results.

Fortunately, the landing of flight1400 in St. Louis on September 28,2007, didn’t result in injuries.The acci-dent occurred shortly after the BoeingCo. MD-82 took off for Chicago with138 passengers and a crew of five.TheNTSB found that mechanics bent acomponent when they used the pro-hibited tool, leading to the fire. Theyused the method because otherworkers had failed to detect a worn-outfilter that blocked normal starts,according to the board. It was found bythe NTSB that mechanics replaced astart valve six times in 12 days beforethe accident, without realizing theactual problem was the filter.

According to a spokesman,Americanhas learned a lesson from the incident.The carrier has taken steps that includereplacing all filters in the fleet andemphasizing that company practicesdon’t call for the engine-start methodutilized that day.American, the world’ssecond-largest airline, was forced bythe Federal Aviation Administration inMarch and April 2008 to ground itsfleet of 300 Boeing MD-80s to inspectand correct wiring in wheel wells.More than 3,300 flights were canceledand 360,000 passengers strandedduring five days, as American examinedand fixed wiring bundles.

In August, the FAA proposed fines ofas much as $7.1 million against Ameri-can over allegations of deferred mainte-nance, drug and alcohol testingdeficiencies, and inadequate lightinginspections. American disagreed with


the FAA findings and said the proposedfines were “excessive.”According to anNTSB investigator, the pilots in the St.Louis incident never completed achecklist for engine-fire emergencies,which delayed action to suppress theblaze. Board members also faulted thecrew for informal conversation beforethe emergency, saying that there were a“host of serious problems going on inthat cockpit.” Fortunately, even with allof these problems, there wasn’t a cata-strophic accident.The pilots’ union, theAllied Pilots Association, had told theboard in January that it believed theevidence pointed to a failure to followAmerican’s repair procedures,“clearlycompromising the effectiveness oftheir maintenance reliability program.”

The NTSB also faulted American’smaintenance-monitoring system for notdetecting the flaws, and recommendedthat the carrier correct deficiencies inthe so-called Continuing Analysis andSurveillance System. On March 30th, theFAA began a comprehensive review ofAmerican’s safety and operations,which was triggered in part by the MD-80 inspection lapses last year. Similarevaluations have occurred at South-west Airlines Co. and Continental Air-lines Inc. American is the second-biggest airline after Delta Air Lines Inc.Source: Bloomberg

XVIII.ARBITRATIONUPDATE

FEDERAL COURT BARS ARBITRATION OVERSTUDENT LOAN TERMS

A federal judge has ruled that astudent loan company accused ofhiding fees in loan agreements can’tforce the lead Plaintiff in a putativeclass action into arbitration. Joshua G.Fensterstock, a 2003 Hofstra UniversitySchool of Law graduate and now anassociate at a law firm in Manhattan,sued the lender and a loan processingcompany in 2008 over terms in his

student loan that he claimed wouldcost him thousands of unforeseendollars. The Defendants, EducationFinance Partners and Affiliated Com-puter Services, argued that the arbitra-tion clause in the agreement should beenforced. But Judge Thomas P. Griesafound that the terms of the loan wereunconscionable and he refused tocompel arbitration.

After deciding that California lawapplied, Judge Griesa ruled that underthe applicable law an arbitration clauserequiring a consumer to waive theright to bring a class action is uncon-scionable:

• where the waiver is found in a con-sumer contract of adhesion;

• in a setting in which disputesbetween the contracting parties pre-dictably involve small amounts ofdamages; and

• where it is alleged that the party withthe superior bargaining power hascarried out a scheme to deliberatelycheat large numbers of consumersout of individually small amounts ofmoney.

Judge Griesa first found that Fenster-stock’s promissory note was a contractof adhesion because it was presentedon a “take it or leave it” basis with noopportunity to negotiate. The Defen-dants claimed that, as a lawyer, Fenster-stock was sophisticated enough tohave both understood the arbitrationwaiver and to have pursued otheroptions. But the judge said there wasno showing that Fensterstock couldhave obtained another consolidationloan that did not have a similar provi-sion. This, he said in his order, wasenough to show “procedural uncon-scionability in the context of classaction waivers, where there is a highdegree of substantive unconscionabil-ity because the waiver allows acompany to reap a windfall from smallinjuries to individual consumers, whileavoiding litigation.” The Defendantsargued that damages would be largeenough to allow individual actions.

Judge Griesa didn’t accept that argu-ment, saying:

This contention has no merit.Thecritical consideration is whetherindividual consumers will viewtheir damages as sufficient towarrant the cost of individual liti-gation.

Finally, the judge said the complaint,alleging that a party using superior bar-gaining power to cheat a large numberof consumers out of a small amount ofmoney, was sufficient to justify a class.Education Finance Partners is now inbankruptcy. In 2007, the companyagreed to pay $2.5 million to settlecharges brought by Attorney GeneralAndrew Cuomo over its business prac-tices. Fensterstock is represented byAlan E. Sash, a very good lawyer withthe firm of McLaughlin & Stern locatedin New York City.Source: Law.com

XIX.NURSING HOMEUPDATE

VIOLENT NURSING HOME ATTACKS ON THERISE

It’s being said by elder law specialiststhat criminal offenders and mentally illresidents have caused an increase inpatient-to-patient assaults at nursinghomes. This growing violence hasresulted in a rise in civil lawsuits byfamilies of patients who have beenassaulted by other residents. In a recentsurvey, Wes Bledsoe, founder of APerfect Cause, a nonprofit nursinghome residents’ advocacy group inOklahoma, found 1,600 registered sexoffenders in nursing homes.The organi-zation documented more than 60rapes, murders and assaults committedby criminal offenders in nursinghomes. Mr. Bledsoe had this to say con-cerning this area of concern:

It’s a huge problem. The issue ofnursing homes being dumping


grounds is nothing new, and cer-tainly for years we’ve hadnursing homes serving not onlythe disabled and the elderly, butmore people with mental illness,behavioral problems, drug rehab-bers, alcohol rehabbers and crim-inal offenders being placed inthese facilities by state agencies.

While there are no official figures onthe numbers of mentally ill and crimi-nal offenders being housed in nursinghomes, a recent report by the Associ-ated Press estimated that nearly125,000 young and middle-aged adultswith serious mental illnesses lived inU.S. nursing homes last year. EricCarlson, a staff attorney at the NationalSenior Citizen Law Center in LosAngeles, said nursing homes that arehaving trouble filling their beds some-times “start looking for residents, andget those residents from bad sources.”In many instances, the staff is not awareof a resident’s violent past. Because ofhealth care privacy laws, the facility isnot allowed to disclose informationabout a resident to other residents.Sadly, families often become aware thatanother resident has a history ofviolent behavior after their loved one isassaulted. Studies have shown that resi-dents are being raped, physicallyassaulted and killed by other residents.

Jonathan Rosenfeld, a lawyer withthe firm of Strellis & Field in Chicago,who is author of the nursinghome-sabuse blog, says it’s not just youngmentally ill residents or those withcriminal records who act out violentlyin nursing homes. In addition to theyoung people who have some violenttendencies, “there are older peoplewho have similar violent tendencieswho are inter-mixed with the generalpopulation,” according to Mr. Rosen-feld.While some facilities have separateAlzheimer’s or dementia wards, manyallow disturbed older residents whoare prone to violence to mingle withother residents,he said.

I agree with Mr. Rosenfeld that oncea nursing home becomes aware that aresident has behaved violently or has a

propensity toward violence, the facilityhas an obligation to take steps toprotect others.This is one of the mostpreventable areas of injuries and harmto nursing home residents. A nursinghome operator has an obligation tomake good admission decisions and tomonitor residents’ safety.Source: Lawyers USA

ASSISTED LIVING LAWSUITS MOUNTING

After suffering a traumatic braininjury in a car crash in 1996, Earl Scher-rer lapsed into a coma. He wasn’texpected to live, but his wife, Lydia,refused to disconnect his life support.After 16 months, Mr. Scherrer began toemerge from his coma.Using first-gradereading and math texts, his wife helpedhim to slowly learn to speak again. InApril 2006, Mrs. Scherrer placed him inLiberty Manor Residency, a Phoenixassisted living facility that promised 24-hour care.

A month later, Mrs. Scherrer receiveda call that her husband had been vomit-ing. She rushed over to Liberty Manor,brought her husband home and gavehim a bath. Within minutes, he beganvomiting again and died in his wife’sarms.An autopsy revealed a number offoreign objects—plastic bags, catsuppackets, candy wrappers and papertowels—in the man’s stomach andsmall intestine.The medical examinerdetermined that the objects Mr. Scher-rer had swallowed were significantcontributing factors in his death.

Mrs. Scherrer sued Liberty Manor,alleging negligence, abuse and wrong-ful death. After an eight-day trial, aPhoenix jury found the facility liablefor the death, and awarded $7 millionin compensatory and $4 million inpunitive damages. The $11 millionverdict—the largest assisted livingverdict in Arizona history—reflects thegrowing number of suits alleging abuseand neglect in the fast-growing assistedliving industry

Since 1998, the number of assistedliving facilities in the U.S. has grownfrom 28,000 to 38,000, caring for about

1 million seniors. Because they are notdesignated as medical care facilities,assisted living communities are not ascarefully regulated as is the nursinghome industry.The lack of regulationhas opened the door to elder abuse andneglect. Eric Carlson, a lawyer at theNational Senior Citizens Law Center inLos Angeles,observed:

There’s much more variability inassisted living because the rulesare different from state to state,and the rules tend to be loose toaccommodate a wide range offacilities.You’ve got facilities thatare really incompetent, but thestate may not even haveminimum standards.

Normally there are no nurses at thefacilities and there’s very little trainingof employees. Many times assistedliving facilities are keeping residentsthat they don’t have the capacity tocare for. Unfortunately, many familieswith seniors living in assisted livingfacilities don’t really consider thehealth-issues at the facilities.The Scher-rer lawsuit was handled by CraigKnapp with the Arizona firm of Knappand Roberts. He did an outstanding jobin the case.Source: Lawyers USA

XX.HEALTHCAREISSUES

A NEED FOR HEALTHCARE FOR ALLAMERICANS

It’s difficult to understand how theRepublican Party can oppose theObama Administration’s proposal toprovide health insurance for all Ameri-can citizens. In my opinion, eachperson in this country needs anddeserves quality health care.The lack ofhealthcare for all too many folks hasreached crisis levels in all parts of theU.S. Having the choice of a publichealth insurance option would make all


of our lives better and certainly isneeded by those who have no healthinsurance coverage.The following arecompelling reasons for supporting thePresident’s efforts:

• Health care costs are spiraling out ofcontrol. From 2000 to 2008, healthinsurance premiums increased fivetimes faster than wages.

• A public health insurance optionwould provide an affordable, qualityalternative. Two new studies showthat Americans could save 25% ormore off of a traditional private plan.The New York Times says this would“keep the private plans honest.”They’ll have to lower rates and offerbetter value to compete.

• Plus, a public health insurance optionwould be reliable coverage for all.Private insurers are notorious fordumping people with little notice.Apublic option would allow con-sumers who’ve been dropped—orjust don’t like their current cover-age—to switch to a steady publicchoice.

It appears that the public healthinsurance option is gaining ground inCongress. The Progressive Caucusrecently endorsed the policy. And thechairmen of five critical Congressionalcommittees came out in support. If youagree with President Obama let yourRepresentatives and Senators knowhow you feel.

TRAUMATIC BRAIN INJURY CAUSES LONG-TERM PROBLEMS

Each year in the United States, nearly1.5 million people will suffer a Trau-matic Brain Injury (TBI). Causes for TBIvary from falls to traffic crashes andphysical assaults. Additionally, a largenumber of military personnel returningfrom active war zones, such as the warin Iraq, suffer from TBIs. TraumaticBrain Injury is defined by the BrainInjury Association of America as a“blow or jolt to the head or a penetrat-ing head injury that disrupts the func-

tion of the brain.”While not all blows orjolts to the head result in TBI, it’s some-times hard to tell the severity of a braininjury right away. A TBI can result inshort or long-term independent func-tion problems.

It’s reported that, of those who sufferTBIs, 50,000 die each year. The latestdata show that 235,000 are hospital-ized with 1.1 million persons treatedand released from an emergencydepartment. The Centers for DiseaseControl and Prevention estimates thatmore than 3 million Americans cur-rently have a long-term need, whichmay be for life, for help in performingdaily activities as a result of a TBI. Partof the insidious nature of TBIs is theyare often missed in initial medicalexaminations after a blow or jolt to thehead. Symptoms are subtle and can beeasily overlooked. Also, the effects ofTBI may be delayed and not be evidentfor days or weeks before they appear.

Carol Stanley, one of our employees,is quite familiar on a personal basiswith the many surprises of TBI. InJanuary 2007, she received word thather son Jason, a college student, hadbeen the victim of a violent assault.Jason was pushed to the ground and hithis head on the pavement. While hewas unconscious, his attackers contin-ued to beat him. When Jason was initially examined by emergency per-sonnel, he seemed relatively intact. Hedid have some cuts to his head butthey weren’t serious. Jason’s doctorsfelt he was not seriously injured andassured his mother he would be fine.But within the next 24 hours, Jasonwoke up vomiting blood. Carol rushedhim to the emergency room. Jasoncouldn’t stand up without becomingdizzy and nauseated. Doctors then dis-covered fractures to his skull and jaw,and damage to the nerves in his rightear. Jason was transferred to the Inten-sive Care Unit, where he stayed for fivedays under close observation in theneurology ward.

Although Jason recovered, he is leftwith a Traumatic Brain Injury. He andhis mother are now learning some-thing else most people don’t know

about TBI: there are long-term lastingeffects. People who suffer from TBIexperience cognitive defects includ-ing difficulties with attention andmemory, confusion, sleep disorder,emotional disorders, speech and lan-guage problems, and sensory and per-ceptual problems. They also mightexperience physical problems such as chronic pain and seizures.TBI also can increase the risk of developingconditions like Alzheimer’s disease,Parkinson’s disease, and other braindisorders that can become moreprevalent with age. You can readJason’s Story at www.southerninjurylawyer.com.

DEFIBRILLATOR RECALL RAISES MORECONCERNS ABOUT FDA’S COMPETENCY

If anyone needed further evidencethat there are serious problems withthe Food and Drug Administration’sregulation and approval of medicaldevices, I believe all doubts have nowbeen erased. A few weeks ago, PublicCitizen sent a letter to Acting FDA Com-missioner Frank Torti asking why theFDA has not announced the recall of aWelch Allyn automatic external defibril-lator (AED), a life-saving device typi-cally used by emergency personnel toresuscitate patients in cardiac arrest.Malfunctions related to this recall havebeen linked to two deaths. On Febru-ary 26th,Welch Allyn initiated a Class 1recall of 14,000 of its AEDs. So far, theFDA has made no effort to alert theAmerican public. Dr. Sidney Wolfe ofPublic Citizen says:

Incredibly, this is the eighth—andmost serious—recall of a WelchAllyn AED since 2004. That’salarming enough, but whenviewed in the scope of the FDA’sannounced recalls of two other,unrelated medical devices, itraises serious concerns about thecompetency of the FDA and itsability to keep dangerous medicaldevices off the market. How manymore deaths and near deathsbecause of delays in resuscitation


will have to occur before the FDAtakes more definitive action toend the use of these all-too-oftendefective Welch Allyn devices?

The FDA has done a poor job of regu-lation generally and unfortunately it’snot confined to medical devices. Forbackground on other issues related tomedical devices,go to www.citizen.org.Source: Public Citizen

SCIENTISTS REJECT FDA POSITION ONBPA SAFETY

An international consortium of indus-try, academic and government scien-tists has rejected as incomplete andunreliable the U.S. Food and DrugAdministration’s position that a chemi-cal found in food containers and otherhousehold products is safe.The group,which met last month in Germany, isworking to release a consensus state-ment in the next few weeks.The groupraises questions about the two studiesthe FDA has used as its foundation todeclare that bisphenol A (BPA) is safe infood and beverage containers.They callfor a much broader look at the chemi-cal than the FDA has given.Source: Mercury News

XXI.ENVIRONMENTALCONCERNS

LAWSUIT FILED OVER BP OIL SPILLS

The federal government and theState of Alaska have each filed separatelawsuits against BP Exploration(Alaska) Inc. over two oil spills at thenation’s largest oil field. The March,2006 spill, along with a smaller spillfive months later, ultimately caused twoacres of tundra and a frozen lake to becovered in crude oil. The spill wascaused by an almond-sized leak in oneof the company’s pipes which had notbeen examined for erosion since 1998.In 2007, BP pleaded guilty to one viola-

tion of the Clean Water Act and agreedto pay $20 million in fines related tothe spill. BP also admitted that it hadfailed to perform adequate assessmentson the pipelines and had not mitigatedthe development of corrosion whichled to the leaks.

The federal government’s lawsuit,filed by the Justice Department onbehalf of the Department of Transporta-tion-Pipeline and Hazardous MaterialsSafety Administration and the Environ-mental Protection Agency, alleges viola-tions of federal clean air and waterlaws. Specifically, it alleges that BP dis-charged more than 200,000 gallons ofcrude oil onto Alaska’s North Slope inviolation of federal law and that thecompany failed to implement spill pre-vention and control plans in accor-dance with good engineering practices.Additionally, the suit claims that BP vio-lated the Clean Air Act by improperlyremoving materials containing asbestosfrom its pipelines and failing to complywith orders from the Department ofTransportation to conduct certaintesting, inspection, maintenance andrepairs. The suit asks the court toimpose stiff penalties and order BP totake actions to prevent future spills.

The state’s lawsuit alleges violationsof state environmental laws and loss ofrevenue for the state.Alaska is seekingrestitution for its lost revenues duringthis period as well as for the recon-struction of a pipeline system. About90% of Alaska’s revenue comes fromoil taxes and royalties. Between 2006and 2008 oil production was sloweddue to the spills. It is estimated thatthe spill caused a shortfall of about 35million barrels.Source: Associated Press

UPDATE ON TOXIC SEWAGE SLUDGE USEDAS FERTILIZER

Our firm is working with localcounsel to investigate claims forAlabama farmers and other propertyowners affected by contaminatedsewage sludge used as fertilizer inFranklin, Lawrence and Morgan coun-

ties.Wastewater treatment plants oftenprovide their sludge, known as“biosolids,” to farmers for use as fertil-izer. The practice can benefit bothfarmers and wastewater treatmentplants alike. The farmers receive low-cost or free fertilizer and the waste-water treatment plants reduce disposalcosts by avoiding landfill or incinera-tion fees. But this hasn’t been the casein the Decatur, Alabama, area wherethis arrangement has been the subjectof recent concern.

The biosolids and the fields wherethey were applied were found tocontain elevated levels of perfluoro-chemicals (PFCs), specifically PFOAand PFOS.These chemicals are precur-sors to Teflon, Scotchguard, and othernon-stick consumer goods, and EPA’sScience Advisory Panel recommendsthat the EPA classify PFOA as a likelyhuman carcinogen, with numerousstudies linking it to various cancers.The EPA has requested informationfrom 14 companies in the Decatur areawhich may use PFCs in their opera-tions, including 3M, Japanese-basedchemical manufacturer Daikin, TorayFlurofibers, and Biological Processorsof Alabama, Inc.

In November of 2008, the EPA noti-fied Decatur Utilities that the fieldswhere the utility applied biosolids hadalarmingly high levels of PFCs. DecaturUtility immediately stopped supplyingbiosolids to farms and instead divertedthe sludge to local landfills, increasingits disposal costs approximately$50,000 per month.This additional costcould cause rate increases for theutility’s customers.

As a result of the biosolid contamina-tion in Decatur, EPA issued a healthadvisory in January 2009 that limits theamount of PFOS and PFOA in drinkingwater.To date, drinking water samplingin the Decatur area reveals that PFClevels are below the EPA limit;however, two private wells and numer-ous grazing ponds contain PFC levelsmuch higher than the EPA limits.TheEPA advises people who are concernedthat their wells are contaminated to usebottled water or point-of-use filters,


installed at the faucet, with granulated,activated carbon.

In addition to EPA water sampling,the U.S. Department of Agriculturerecently purchased cattle in the area inorder to conduct tissue samples. TheUSDA is testing to ensure that beefdoes not contain high levels of PFCs,and results should be available in May2009. Beasley Allen lawyers will con-tinue to monitor the situation inDecatur on behalf of those affected bythe contamination. Our lawyers havesuccessfully represented clients in PFCcases nationwide. If you need addi-tional information on this subject,contact Rhon Jones or David Byrne inour firm at 800-898-2034 or by email [email protected] or [email protected].

AN UPDATE ON THE TVA COAL SLUDGECLASS ACTION

Our firm continues to work onbehalf of those affected by the Ten-nessee Valley Authority coal ash spill inKingston, which is about 40 miles westof Knoxville.As previously reported, inDecember 2008, the TVA KingstonFossil Plant released 5.4 million cubicyards (over 1 billion gallons) of coal ashwhen the TVA slurry pond failed.Thepond failure flooded over 300 acreswith toxic sludge that is nine feet highin some areas.

It has been over 100 days since thespill and numerous details about thecleanup are still speculative, includingcost, schedule and waste disposal.TVAestimates that recovery costs rangefrom $525 million to $845 million.TVAis exploring options for paying thesecosts, and rate increases are likely. Inaddition to the uncertain cleanupcosts, TVA does not have a firm esti-mate on how long cleanup will take orwhere it will send the ash and otherdebris generated by the dredging andother cleanup activities.

As of mid-April, TVA had paid $20million dollars to purchase over 220acres of land affected by the spill. Overtwo-thirds of these 70 parcels have

houses, trailers, or other structures onthem. TVA’s buyout program requireslandowners to give up their right topursue legal recourse from TVA, and itis unclear whether residents, in theirdesperation to leave the hazardous con-ditions, are getting fair deals.

In addition to the hardships that indi-vidual landowners suffer when relocat-ing from their property, the county alsois affected due to lost revenues. Asproperty values decline due to thespill, so do the tax revenues associatedwith those properties.Therefore, RoaneCounty likely will suffer from a lowertax base even though TVA has assuredcounty officials that it will pay taxes onthe property TVA purchases. As a tax-exempt entity, TVA normally is notrequired to pay property taxes. Dimin-ished property values and the resultingloss in tax revenue affects all of the citi-zens of Roane County. Our firm isworking on behalf of individuals and a class of clients in this lawsuit.Our firm is working to accomplish the following:

• Bring about a complete clean-up ofthe area;

• Ensure that our clients are fully com-pensated for the damage to theirproperty (including their propertyvalues); and,

• Obtain long-term medical monitoringrelief for area residents who havebeen exposed to the dangerous con-taminants in TVA’s coal ash sludge.

If you need additional information onthis subject, contact Rhon Jones orDavid Byrne in our firm at 800-898-2034 or by email at [email protected] or [email protected]: Knoxville News Sentinel

SHELL SETTLES AIR POLLUTION LAWSUITIN TEXAS

The giant oil company, Royal DutchShell, has reached a $5.8 million settle-ment over claims of air pollution at itsDeer Park refinery near Houston,Texas.

The proposed settlement wouldrequire Shell to reduce emissions fromair pollutants from its plant by 80percent within three years, upgradechemical units and reduce gas flaring.The settlement is subject to review bythe Environmental Protection Agencyand the U.S. Justice Department andmust be approved by the court. Thecase is pending in the United StatesDistrict Court for the Southern Districtof Texas.

The Environment Texas CitizenLobby and the Sierra Club sued Shelllast year alleging violations of the CleanAir Act.The suit contended there hadbeen more than 1,000 instances ofillegal pollution at the plant since 2003,releasing a total of 5 million pounds ofair pollutants into the atmosphere,including toxic chemicals like benzeneand 1,3-butadiene, as well as sulfurdioxide and oxides of nitrogen.The set-tlement agreement focuses on reducing“upset emissions,” which are defined asexcess emissions occurring outside ofroutine operations, like equipmentbreaking down or malfunctioning, andwhich are not authorized by permit.

The Deer Park refinery, a 1,500-acrecomplex on the Houston ShipChannel, about 20 miles from down-town Houston, is the nation’s eighth-largest oil refinery and one of theworld’s largest producers of petro-chemicals.The facility is also the third-largest stationary source of airpollution in Harris County, whichranks among the worst in the nation inseveral measures of air quality, accord-ing to the environmental groups. LukeMetzger, director of EnvironmentTexas, said the settlement couldprovide a new benchmark for opera-tions in the petroleum and refiningsector. He made this observation:

Shell will set an example for therest of the industry that you cancontrol these emissions. We canexert some pressure for the rest ofthe industry to similarly start tocomply.

Under the settlement, funds will be


used to finance environmental, publichealth and education projects in HarrisCounty, including a project to reducediesel emissions from school buses, andanother project to install solar panelson public buildings. Neil Carman, aclean air specialist at the Sierra Club,had this to say:

We urge other oil and chemicalcompanies in the region to takenote of Shell’s willingness to workconstructively with us in develop-ing solutions to the problems atthe Deer Park facility—problemsthat are not unique to Shell.

This is an encouraging developmentand all of the parties to the settlementagreement should be commended.However, the oil industry is makingrecord profits and should be con-cerned about the environment. Hope-fully, other companies will followShell’s example.Source: New York Times

EPA TO MONITOR AIR AROUND 62 SCHOOLS

The Environmental ProtectionAgency will monitor 62 schools acrossthe nation to determine whether theair around them contains toxic pollu-tants. EPA Administrator Lisa P. Jacksonsaid in a written statement that “EPA,state, and local officials are mobilizingto determine where elevated levels oftoxics pose a threat, so that we cantake swift action to protect our chil-dren at their schools.” Schools in 22states were on the agency’s list.Texasand Ohio had the most, with seveneach, and Pennsylvania had six. Theagency chose the schools after:

• examining the best information avail-able on air pollution near theschools;

• gathering information on wind direc-tion and speed; information fromstate and local air agencies; and

• the results of a recent newspaperanalysis.

USA Today reported in December

that the air outside 435 schoolsappeared to be more toxic than the airoutside an Ohio school that was closedin 2005 because of unacceptable airquality.The newspaper based its find-ings on a government computer simu-lation. The government also usedcomputer modeling to help choose the62 schools.The schools include thosein major cities—Los Angeles, California;Seattle, Washington; and Chicago, Illi-nois—as well as smaller towns—McKees Rocks, Pennsylvania; Story City,Iowa; and Tarrant City, Alabama. Theschools range from elementary to highschools.

The EPA will redirect $2.25 millionfrom community air monitoring grantsto fund the plan.The monitoring willbe phased over three months and willcontinue for 60 days at each school.Two types of pollutants in the air willbe measured: those in gas form, includ-ing benzene, which U.S. authoritieshave declared a known carcinogen; andthose in particle form, includingmetals. The pollutants monitored willvary by school, based on the best avail-able information about the pollutionsources in the area.The EPA has alreadyidentified the pollutants to be moni-tored at each school.After the monitor-ing, the EPA says it will analyze theresults and project the potential long-term health concerns related to cancerand respiratory and neurologicaleffects. If potential health concerns arehigh, the EPA says it will take steps to“mitigate the pollution causing theproblems.”The results from the projectwill be made public.Source: CNN

XXII.THE CONSUMERCORNER

POLIO VICTIM’S 30-YEAR CRUSADE RESULTSIN A $22.5 MILLION JURY AWARD

In May 1979, Elizabeth Tenutobrought her five-month-old daughter,

Diana, to a pediatrician in New York forher second dosage of an oral poliovaccine. A month later, Ms. Tenuto’shusband, Dominick, contracted polio,apparently by touching Diana’s stoolwhile changing her diaper. Now, threedecades after becoming permanentlyparalyzed, Mr.Tenuto has won a $22.3million verdict in New York state courtagainst Lederle Laboratories, the giantpharmaceutical company that manufac-tured the vaccine Orimune. It wasalleged that the company negligentlymanufactured the vaccine and that itfailed to adequately warn doctors of itsdangers. The lawsuit brought by Mr.Tenuto and his wife, finally went to trialin February.

After closing arguments, Lederleoffered $10 million to settle the case.Mr.Tenuto’s lawyers, who had incurredapproximately $500,000 in expensesover the years, encouraged him toreject the offer.The jury deliberated forone day before awarding Mr. Tenuto$17.5 million for past and future painand suffering, plus $5 million for lostearnings and medical and rehabilitationexpenses. Following a series of corpo-rate transactions, Lederle itself is nowpart of Wyeth Pharmaceuticals, whichrecently signed an agreement to beacquired by Pfizer.

As we all know, polio was officiallyeradicated from the Americas in 1994.However, litigation continues withregard to the risks posed by the oralvaccine developed by Dr.Albert Sabin,which was long the drug of choice inthe campaign against the disease.Thiscase was filed in 1981. Much of thecase’s first two decades were con-sumed by motions, discovery andappeals, including a half dozen rulingsin New York’s appellate courts.

According to the Centers forDisease Control, between 1980 and1998—at a time when more than 300million doses of the vaccine were dis-tributed—144 people in the UnitedStates contracted polio via a vaccine,including 86 vaccine recipients and 51“contact” recipients. In underdevel-oped countries, the rates have beenmuch higher. Several small outbreaks


have forced entire communities toreceive high-dose vaccinations. Since2000, all U.S. vaccines administeredhave used inactivated viruses, reduc-ing the risk of contact-associated polioto zero.

The jury found Lederle 100%liable for Mr. Tenuto’s condition.Much has changed for this man inthe three decades between his diag-nosis and the jury’s verdict. He agedfrom 31 to 61. He lost his job and,unable to work, spent more than 20years volunteering at a hospital. Hismarriage broke up, and his ex-wifedied. His three daughters are nowadults—the youngest, Diana, recentlyturned 30. Mr. Tenuto is now agrandfather, twice over. It was along, tough fight, but justice wasfinally done.Source: Law.com

JURY AWARDS COUPLE $10.6 MILLION INBANK FRAUD CASE

A Jefferson Circuit Court jury foundBranch Banking & Trust (BB&T) guiltyof fraud in a trial completed last monthand awarded a Louisville couple $10.6million in damages. BB&T was found tohave acted maliciously and wasordered to pay $9 million in punitivedamages. Jurors found that Bank ofLouisville, which was later acquired byBB&T, used false information in 2002 topersuade Larry and Linda Thompson toconsolidate numerous bank loans theyhad for their real estate business intoone mortgage with Bank of Louisville.

The Thompsons claimed that BB&Tcommitted fraud by inducing theminto a lending relationship throughfalse representations and then destroyedtheir business by refusing to allowthem to buy real estate, which hadbeen part of their business for thepast two decades.The bank originallyfiled a lawsuit to foreclose against theThompsons in 2006, and the Thomp-sons filed a counter-complaint.After asix-day trial, the jury ruled 9-3 in favorof the Thompsons. This case is thefirst lender-liability case to go to trial

in Kentucky in more than a decade.Larry Zielke, a Louisville lawyer, repre-sented the Thompsons and did a verygood job.Source: Courier-Journal

CONSUMERS URGED TO REPLACEDANGEROUS HOME HEATING VENT PIPES

The U.S. Consumer Product SafetyCommission and various home heatingfurnace, boiler, and high-temperatureplastic vent pipe (HTPV) manufacturersare urging home owners who have notyet responded to the previously-announced 1998 recall, to do so imme-diately. After May 1, 2009, the remedyconsumers receive will change. Therecall originally included about 250,000Plexvent and Ultravent HTPV pipesystems attached to gas or propane mid-efficiency furnaces and boilers inhomes. The HTPV pipes can crack orseparate at the joints and leak deadlycarbon monoxide (CO) gas.After check-ing the vent pipes, consumers shouldcall (800) 758-3688 to sign up for HTPVpipe system replacement.Source: Consumer Product Safety Commission

THE NATION’S FOOD SUPPLY MUST BEMADE SAFE

The federal system designed toprevent food borne disease outbreaksor bioterrorism attacks is so inadequatethat only five out of every 40 foods canbe traced all the way through thesupply chain, according to recent find-ings. A report from the InspectorGeneral’s office of the Department ofHealth and Human Services reveals thatthe self-reporting system used to keeptrack of these problems is not working.Although companies are required tokeep records that would allow federalinvestigators to track food throughoutthe supply chain, many of the recordsare not detailed enough, and companymanagers are often unaware of theextent of reporting requirements. Rep.Rosa DeLauro (D-CT), who requestedthe investigation,had this to say:

The food safety regulatory struc-ture lacks an adequate traceabil-ity system.Traceability is a criticaltool in our ability to identify thesource of a food-borne illness out-break.

According to the report, 70 out of118 tested companies failed to meetthe FDA’s record-keeping requirementsfor information about suppliers, ship-pers and customers. “In some cases,managers had to look through largenumbers of records—some of thempaper-based—for contact information,”according to the report. Rep. DeLaurosaid traceability will be a focal point ofCongressional food safety reform meas-ures. Lawmakers have increased theirfocus on strengthening the nation’sfood safety system in the wake of therecent salmonella outbreak linked topeanut butter food products. In addi-tion to several bills being introduced inCongress that would strengthen record-keeping requirements and imposetougher penalties, it’s significant thatthe Obama Administration has requesteda thorough investigation of the federalfood safety system.

The Obama Administration has nowissued a tough warning to all foodmakers that sloppy manufacturingpractices would no longer be tolerated.With that warning, the Administrationsignaled that it was substantially chang-ing the way the government overseesfood safety. Food-handling practices—that in the past would have resulted inmild warnings—may now lead to wide-ranging and expensive recalls, evenbefore anyone becomes ill from con-taminated food. Dr. David Acheson,associate commissioner for foods at theFood and Drug Administration, issuedthis warning:

The food industry needs to be onnotice that FDA is going to bemuch more proactive and movethings far faster.We’re going to tryto stop people from getting sick inthe first place, as opposed towaiting until we have illness anddeath before we take action.


Most folks are shocked when theylearn that the FDA doesn’t have thepower to recall foods itself. Hopefully,we will see some real reforms in theway the federal government regulatesfood safety in this country now that anAdministration is making this impor-tant issue a real priority.Source: Lawyers USA and New York Times

A BRIEF LOOK AT ELECTRICAL ACCIDENTS

Unfortunately, thousands of peopleare injured or killed each year as aresult of contact with power lines orother power sources. Among theseaccidents are electric shocks, electrocu-tions, electrical explosions, electricalfires, and flash burns.We have learnedthat few people—including lawyers—know a great deal about electricity.

To cause a shock, electricity mustenter one place on your body and exitat another. It is the current throughyour body that causes the shock, notthe voltage at a single place.A bird on ahigh voltage wire gets no shock. It iscommon for one of the shock places tobe the earth or a piece of metal con-nected to the earth. Electricity throughyour body spreads out between thetwo contact places and causes severedamage in between. If enough currentpasses through your heart, it can causeventricular fibrillation followed byasphyxiation because the heart stopsbeating. Electric current can damageyour organs and your nervous systemand can also cause severe burns atentry and exit locations.

Electrical accidents in the homeoccur frequently. A common mode ofshock comes from touching a defectiveelectrical appliance such as a hair dryerwith one hand and a water faucet withthe other. Defective power tools alsoresult in electrical shocks.

A very effective device in helping toprevent electrical accidents in thehome is the Ground Fault Circuit Inter-rupter (GFCI). These are now usedalmost everywhere in homes. It is acircuit breaker which opens within atenth of a second if a shock current

exceeds 6 miliampers.They are incor-porated in electrical outlets near watersources in bathrooms, kitchens, andlaundry rooms.

Many electrical shocks result fromthe accidental touching of an overheadpower line and many result in death orsevere injury.These power lines can becontacted by cranes, irrigation pipes,grain augers, trucks, workers on scaf-folding or roofs, boat masts, and radioand TV antennas.

The following are a few basic termswhich will be useful to you in under-standing how electrical accidentsoccur and may help you prevent them.They will also assist lawyers in dealingwith electrical issues in lawsuits.

• Conductor—When you think aboutwhat a conductor is don’t think ofsomeone who leads an orchestra, butof something or someone that elec-tricity can travel through. Copperand aluminum are good conductorsof electricity, and most wiring comesfrom these materials.

• Insulator—This is the thing thatkeeps the conductor from conduct-ing or controls how it conducts.Aninsulator is a material that preventsthe flow of electricity.The polyethyl-ene that encases copper wiring is anexample.Also, power lines betweenutility poles are insulated by the airand height that separates them fromthe ground and people.

• Voltage—Electricity needs some-thing to push it through the conduc-tor.Voltage provides the pressure tomake the current flow.“High voltage”factors have to do with whether itcan cause a spark in the air or elec-tric shock on contact.

• Circuit—The circuit provides thepath for the electrical current toflow. In the case of a closed circuit,this is a complete path—comingfrom the source of the electricity,moving to the place it’s needed andreturning by the same route.

• Open Circuit—Something hasstopped the flow and interrupted

the continuity—maybe a piece ofinsulation getting in the way, or justsimple wear and tear.

• Short Circuit—The “short” is anabnormal connection—betweenwires or between a wire and theground. Shorts will trip a breaker.Ground-fault circuit interrupters(GFCIs) are receptacles or circuitbreakers that shut off power instantlywhen a circuit shorts or overloads.

• Overload—an overload meansyou’ve got too much going on in onecircuit.The wires get hot.The breakercalls a halt and trips off.

• Circuit Breaker—Each circuit isprotected by a circuit breaker (orfuse) at the main panel.They shut offautomatically if there’s an overloador short—or manually when it’s timeto make repairs or upgrades.

• Transmission Lines—Power linesthat carry high voltage electricitylong distances.

• Distribution Lines—Power linesthat carry electricity through townsand neighborhoods to homes andbusinesses. Distribution lines can runoverhead or underground.

• Service Line or Service Drop—Theelectric wires that run from the poleto the meter at your residence. Themost common service drop (typically)is known as tri-plex wire consisting ofa bare center wire with two black,coded wires wrapped around it.

• Electric Transformer—A graybarrel-shaped objected mounted onthe pole below the distribution lineswhich reduces the primary voltagedown to household voltage levels.

Our firm regularly investigates elec-trical accidents to determine if therewere reasonable alternatives availablewhich would have prevented the acci-dent.We are happy to answer any ques-tions regarding an electrical accident. Ifyou need more information contactGraham Esdale at 800-898-2034 [email protected].


YAMAHA OFFERS FREE REPAIR FOR CERTAINVEHICLES

The U.S. Consumer Product SafetyCommission has announced a freerepair program to address safety issueswith all Rhino 450, 660, and 700model off-highway recreational vehi-cles. Yamaha Motor Corp. U.S.A. hassuspended sale of these models imme-diately until they are repaired. Con-sumers should immediately stop usingthese already dangerous recreationalvehicles until the repair is installed bya dealer.

CPSC staff has investigated morethan 50 incidents involving 46 driverand passenger deaths in these twoRhino models. More than two-thirds ofthe cases involved rollovers. Of therollover-related deaths and hundreds ofreported injuries, some of which wereserious, as we have reported, manyappear to involve turns at relatively lowspeeds and on level terrain. About120,000 of the 450 and 660 modelRhinos have been distributed nation-wide since Fall 2003. Some units havebeen equipped by Yamaha with halfdoors and additional passenger hand-holds, either before or after sale.

Yamaha’s repair includes the installa-tion of a spacer on the rear wheels aswell as the removal of the rear anti-sway bar to help reduce the chance ofrollover and improve vehicle handling,and continued installation of halfdoors and additional passenger hand-holds where these features have notbeen previously installed to help keepoccupants’ arms and legs inside thevehicle during a rollover and reduceinjuries. Owners of the affected Rhinosshould stop using them and call theirdealer to schedule an appointment tohave repairs made once they are avail-able and to take advantage of a freehelmet offer.

Yamaha is also voluntarily imple-menting the same repair program andsuspension of sale for the Rhino 700model, in order to ensure customer sat-isfaction. Consumers should stop ridingthe 700 model until it is repaired.About25,000 Rhino 700s are part of this

repair program. Once these repairshave been made to their vehicles,Rhino users should always wear theirhelmet and seat belt and follow thesafety instructions and warnings in theon-product labels, owner’s manuals andother safety materials. For additionalinformation on Rhino problems gener-ally, you can contact Cole Portis orChris Glover at our firm at 800-898-2034 or by email at [email protected] or [email protected]. You can also visitYamaha’s Web site at www.yamaha-motor.com for information on this recall.Source:Yamaharhinorolloverandrecall.com

COMPANIES FINED OVER CHILDREN’SCLOTHING WITH HOOD DRAWSTRINGS

T.J. Maxx, Marshalls and 12 othercompanies have agreed to pay a total ofmore than $1 million in civil penaltiesfor failure to report safety hazardspromptly.The companies were penal-ized for failing to promptly report salesof children’s clothing with drawstringsthrough the hood or neck, according tothe Consumer Product Safety Commis-sion.These drawstrings can get caughtin nearby objects and cause children toget trapped or strangled.Acting CPSCchairwoman Nancy Nord had thismessage to the manufacturers andsellers:

My message to children’s clothingmakers and sellers is clear: Draw-strings on children’s garments putchildren at risk. CPSC will con-tinue to search for and take actionagainst drawstring violators.

In May 2006, the commissionannounced that children’s jackets andsweatshirts would be considered defec-tive if they had hood and neck draw-strings.The agency says 14 companiesfailed to comply with a federal law thatrequires them to immediately reportdefective products. The companiesdeny knowingly violating the law. T.J.Maxx and Marshalls share a parentcompany,The TJX Companies, Inc. Buttwo separate settlements were negoti-

ated—one with TJX for $315,000 andone with Marshalls of MA Inc. for$235,000.

The other companies included in theagreement are: The Bon-Ton Stores,Inc.; Concord Buying Group Inc., doingbusiness as A.J. Wright; Bob’s StoresCorp.; Kidz World Inc., doing businessas High Energy USA; Coolibar, Inc.;Brents-Riordan Co., LLC; Forman Mills,Inc.; Urgent Gear, Inc.; Seventy TwoInc.; Orioxi International Corp.; Outfit-ter Trading Co., LLC; and Retco Inc.Source: Associated Press

MANY ALABAMA DAY CARE CENTERSOPERATE LEGALLY WITHOUT LICENSES

A new national report shows thatAlabama is one of 14 states that allowssome child day care centers to operatewithout being licensed and with fewrestrictions. The Federation of ChildCare Centers of Alabama released thereport by the Applied Research Centerof Oakland, California, last month at anews conference at the Alabama State-house. The executive director ofFOCAL, Sophia Bracy Harris, says theLegislature needs to act to require unli-censed day care centers to at leastmeet minimum health and safety stan-dards.While most privately-owned daycare centers in Alabama are licensed,state law allows church-owned facili-ties to operate without a license. It waspointed out at the news conferencethat about 40% of Alabama’s 2,000centers are unlicensed.Source: Associated Press

ALABAMA FORECLOSURES ROSE MORETHAN 200%

It has been reported that duringMarch foreclosure activity in Alabamaspiked significantly. The number offilings surged more than 200% overboth the previous month and the year-ago period, according to informationfrom mortgage research firm Realty-Trac. In March, there were 2,260 fore-closure filings across the state, a 217%rise from February and a 248% jump


from March 2008.The numbers are inline with a national trend of rising fore-closure rates, as well as reports thatbanks have accelerated foreclosureactivity against delinquent homeown-ers in recent weeks.

In February, the state’s foreclosurefilings fell 22% from the previousmonth and stayed about even with theyear-ago period.Yet, rising foreclosurerates are hitting states across thenation. For the first three months of2009, foreclosure filings were reportedon 803,489 U.S. properties, a 9%increase from the fourth quarter of2008 and a 24% rise over the firstquarter of 2008. For March alone, fore-closures across the nation rose 17.5%over the previous month and 46% overthe year-ago period, with much of theactivity in new foreclosure action.Thissuggests that many lenders wereholding off on executing foreclosuresdue to moratoriums in the industry andlegislative delays that have now beenlifted. There were 3,669 foreclosurefilings in Alabama during the firstquarter, a 75% rise from the fourthquarter of 2008 and a 116% jump fromthe first quarter of 2008.Source: Birmingham News

XXIII.RECALLS UPDATE

There were a good number of recallsover the past month. We will discussbriefly some of the more significantones below.

GM RECALLS 1.5 MILLION CARS DUETO FIRE RISK

General Motors Corp is recallingnearly 1.5 million Buick, Chevrolet,Oldsmobile and Pontiac mid-sizedcars due to a potential leak ofengine oil that could cause anengine fire. The recall applies tothe 1997-2003 Buick Regal; 1998-2003 Chevrolet Lumina, MonteCarlo and Impala; 1998-99 Oldsmo-

bile Intrigue; and 1997-2003Pontiac Grand Prix, GM said in afiling with the National HighwayTraffic Safety Administration.A totalof 1,497,516 vehicles, all equippedwith a 3.8 liter engine, are involvedin the recall.

According to GM, some of the vehi-cles have a condition in whichdrops of engine oil may bedeposited on the exhaust manifoldunder hard braking. NHTSA saysthat could start a small fire thatcould spread to a plastic sparkplug wire channel and beyond,increasing the risk of an enginecompartment fire. GM dealers willremove the plastic spark plugretention channel and install twonew spark plug wire retainers freeof charge.

HYUNDAI RECALLS 500,000 VEHICLES

Nearly 500,000 Hyundai vehiclesare being recalled due to faultybrake lamp systems.The cars, someof which were made at thecompany’s Montgomery plant,include the 2006-07 Sonatas and2007 Santa Fe SUVs.The recall alsocovers 2005-07 Tucsontrucks,2006-07Accents, 2007-08Veracruz crossovers and each ofthe 2007 model Azeras, Elantrasand Entourages.

The recall is being promptedbecause these vehicles’brake lightsmay fail to activate when thebrakes are applied or continue tooperate after the brakes arereleased. The malfunction mayeven affect the vehicles’ electronicstability control and cruise controlsystems. If you have one of theaffected Hyundai models you canhave the system replaced withoutcharge at your dealership.You canalso call the Hyundai assistanceline at 1-800-633-5151 for moreinformation.

DEATHS PROMPT YAMAHA OFF-ROADRECALL

As mentioned in a separate sectionof this issue,Yamaha Motor Corp.USA recalled about 120,000 off-highway recreational vehicles forrepairs, after two models wereinvolved in 46 deaths. The Con-sumer Product Safety Commissionannounced the recall. All Rhino450 and 660 model vehicles wererecalled for repairs designed toprevent accidents that resulted in46 deaths and hundreds of injuries.The reported deaths occurredbetween the fall of 2003, when thevehicles were first distributed,through this year.

CLOTHING IRONS RECALLED BY CONAIRCORPORATION DUE TO FIRE HAZARD

About 45,000 clothing irons havebeen recalled by the distributorConair Corporation, of Stamford,Conn.The clothing iron can over-heat, posing a fire hazard to con-sumers. Conair has received threereports of overheating, includingtwo fires resulting in propertydamage. No injuries have beenreported. This recall involvesConair clothing irons with modelnumbers DPP1500, DPP1500R andDPP3500. The model number isprinted below the soleplate. Noother models are included in thisrecall. The irons were sold atdepartment and retail storesnationwide from October 2008through March 2009 for about $50.Consumers should immediatelyunplug and stop using the recalledclothing irons and contact Conairto receive a free comparableproduct. For additional informa-tion, contact Conair at (800) 687-6916 or visit the firm’s Web site atwww.Conair.com.


643,000 HIGH CHAIRS RECALLED

More than 640,000 high chairshave been recalled because offaulty screws that could causeinfants to fall or choke, accordingto the Consumer Product SafetyCommission. The voluntary recallin conjunction with the highchair’s maker, Evenflo, came aftermore than 300 reports of seatbacksdetaching or reclining unexpect-edly.Additionally, there have beenreports of screws falling out of thehigh chairs, which presented achoking hazard.

Recline fasteners and metal screwson both sides of the high chair canloosen and fall out, allowing theseatback to detach or recline unex-pectedly. Children can fall back-wards or fall out of the high chairand suffer bumps and bruises tothe head, as well as abrasions andcuts. Detached hardware alsocould cause children to choke.Evenflo has received 320 reportsof accidents.

All Evenflo Envision high chairs,including model numbers: 2891321,2891321A, 2891333, 2891351,2891351A, 2891365, 2891375,2891403, 2891403A, 2891466,2891466A, 2891478, 2891536,2891536A, 2891573, 2891586,2892351 and 2892351A are part ofthe recall.The model number canbe found on a white label on theseatback.“Evenflo” and “Envision”are printed on the front of the tray,the CPSC said.The high chairs aremade in China. The CPSC advisesowners to immediately stop usingthe high chairs and contactEvenflo at (800) 233-5921 or visitthe firm’s Web site at www.evenflo.com.

SUNKIDS CONVERTIBLE CRIBSRECALLED BY SUNTECH ENTERPRISES

Suntech Enterprises Inc., of City ofCommerce, California has recalled

about 1,900 SunKids ConvertibleCribs. The sides of the crib aremade of mesh that expands, creat-ing a gap between the side and thecrib’s mattress if it’s not zippedinto place, or a gap between theside and an added mattress. Ayoung child can slip into this gapand become entrapped or suffo-cate.Also, the crib’s drop side canfail to fully latch posing a fallhazard to young children. Noinjuries have been reported withthis crib. However, CPSC is awareof the death of a five-month-oldchild in August 2008 involvinganother company’s nearly-identicalcrib that was recalled. The childbecame entrapped between themattress and the mesh side andsuffocated.The recall involves theSunKids convertible crib/playpen/bassinet/bed with model numberPY256. “SunKids” is embroideredon the bottom left of the crib’sdrop side.

The convertible cribs have a dropside rail, stationary side rail, canopyassembly, and bassinet.The sides ofthe convertible crib are fabric andmesh. The mattress support,bassinet, canopy, and bed skirt arecovered in fabric. The fabric andthe mesh were sold in navy blue,light blue, pink, beige, white, beigechecker, and pink heart.The cribswere sold at small juvenile productretailers in New York, New Jersey,and California from January 2007through October 2008 for about$100. Consumers should immedi-ately stop using the recalled con-vertible cribs and return them tothe store where purchased for afull refund. For additional informa-tion, contact Suntech Enterprisestoll-free at (888) 268-8139.

BEST BUY RECALLS TELEVISION SETSDUE TO FIRE HAZARD

About 13,300 Insignia 26-inch flat-panel LCD model IS-LCDTV26 tele-

visions have been recalled by BestBuy Co. Inc., of Richfield, Minn.Thetelevision’s power supply can fail,posing a fire and burn hazard toconsumers. Best Buy has receivedtwo reports of fires that includeddamage to the television and wall.One consumer reported minorburns to the hands. This recallinvolves Insignia 26-inch flat-panelLCD televisions, model number IS-LCDTV26. The model number isprinted on the back of the televi-sion and the word “INSIGNIA” isprinted on the bottom front. Noother Insignia model televisionsare involved in this recall.

The sets were sold exclusively atBest Buy stores nationwide, atww.bestbuy.com, and www.best-buyforbusiness.com from August2005 through June 2006 for about$800. Consumers should immedi-ately stop using the recalled televi-sions and contact the Best Buyhotline to receive a gift card for the value of a replacement televi-sion. For additional information,contact Best Buy at (800) 233-0462or visit the firm’s Web site atwww.bestbuy.com.

BRAVE PRODUCTS REANNOUNCESRECALL OF LOG SPLITTERS

Brave Products Inc., of Streator, Illi-nois has recalled its Log Splitters.The log splitter’s hydraulic cylin-ders can have defective rod reten-tion, causing the seals to leak andthe rods to detach.This can resultin serious injury to the operator, asthe rod can rapidly and unexpect-edly extend the splitting wedge.Brave Products originally received59 reports of leaking cylindersand/or rod retention failure. Oneconsumer reported a hand amputa-tion that could have been causedby this cylinder defect.There havebeen 26 additional reports offailure, including units previouslythought to be unaffected by the


earlier recalls. No new injurieshave been reported.

The log splitters are made of steeland painted orange and black, orblue and black. They have trailerhitches and rubber tires. Each logsplitter has a decal on the side thatreads “Brave Products, Inc.” or “Iron& Oak” and “__ ton” (either 15, 22,26, or 34). The log splitters weresold at Ace, True Value, and Do ItBest Hardware stores and inde-pendent power equipment dealersnationwide from January 2002through April 2007 for between$900 and $2,000. Consumers,including those who contacted thefirm after the previously announcedrecalls, should immediately stopusing the recalled log splitters andcontact the firm to receive a freereplacement cylinder. For addi-tional information, contact BraveProducts at (800) 350-8739 orwrite to: Brave Products Inc., P.O.Box 577, Streator, IL 61364-0577.Consumers also can visit thecompany’s Web sites at www.logsplitters-ironoak.com,or www.braveproducts.com.

ATICO INTERNATIONAL USA RECALLSCOFFEEMAKERS

Atico International USA Inc., ofFort Lauderdale, Florida, hasrecalled Signature Gourmet™ 12-Cup Programmable Coffeemakersand Kitchen Gourmet® 10-CupCoffeemakers.These coffeemakerscan ignite due to an electricalfailure, posing a fire hazard. AticoInternational USA, Inc. has received23 reports of coffeemakers ignit-ing, resulting in property damage.No injuries have been reported.This recall involves the followingcoffeemakers: Kitchen Gourmet®

10-Cup Coffeemaker, color White,model # XQ-673K, item # W14A3714;and Signature Gourmet™ 12-CupProgrammable Coffeemaker, colorBlack, model # XQ-673BT or CM4

193D, item # W14A5084.

The name of the coffeemaker isprinted on the front of the unit.The model number and the itemnumber are printed on a stickerlocated on the bottom of the unit.The coffeemakers were sold at Wal-greens stores nationwide fromJune 2004 through March 2009 for about $20 and the KitchenGourmet® 10-Cup coffeemaker fromAugust 2006 through December2008 for about $10. Consumersshould immediately unplug andstop using the recalled cof-feemaker and contact Atico Inter-national USA for instructions onreturning the product for a fullrefund. Consumers should callAtico International USA toll-free at(877) 546-4835,or visit the company’sWeb site at www.aticousa.com.

STANLEY AND SOLARWIDE INDUSTRIALRECALL STUD SENSORS

Solarwide Industrial Ltd., of HongKong has recalled about 78,000Stanley® Stud Sensors 200 andStanley® FatMax® Stud Sensors 400.The stud sensor can fail to cali-brate properly and detect AC elec-trical wires behind the wall, posinga shock hazard to the user. Therecalled stud sensor modelsinclude the Stanley® Stud Sensor200 and Stanley® FatMax® StudSensor 400 with model numbers77-720 and 77-730. The modelnumber is located in a slide-out ref-erence guide found in the base ofthe sensor’s handle.

The sensors are made of blackplastic with a wide yellow stripedown the center. “Stanley” or“FatMax” are printed on the frontof the product. A date code isprinted on the inside of the batterycover. Affected sensors have datecodes that do not begin with theletter “R.” Consumers shouldcontact Stanley to determine if

their stud sensor is included in therecall and to receive a free replace-ment sensor. For additional infor-mation, contact Stanley toll-free at(866) 215-1132 between from 8a.m. and 5 p.m. ET Mondaythrough Friday, visit the firm’s Website at www.stanleytools.com or e-mail Stanley at [email protected].

SIMPLICITY PLAY YARDS RECALLED

About 25,000 Travel Tender PlayYards have been recalled. One ormore rails can collapse unexpect-edly, posing a fall or entrapmenthazard to young children. TheCPSC is aware of at least fivereports of one or more rails col-lapsing. No injuries have beenreported. The recalled play yardsare portable and were sold with abassinet, changing table andmobile features. The play yardsbear the “Simplicity” logo. Themodel numbers are 5500DRM,5500WDS, 5500FEL, 5501FEL,5502MON, 5520PRO, 5550HAN,5700MAN, and 5750MIR. Themodel number is located on asticker on one of the legs under-neath the play yard.

They were sold at Burlington CoatFactory stores nationwide andonline at Babiesrus.com,Target.comand Kohls.com from March 2005through January 2009 for about$100. Consumers should immedi-ately stop using the play yards andreturn them to the place of pur-chase for a refund or replacementproduct. For additional informa-tion, contact the following retail-ers: Burlington Coat Factory, (888)223-2628; Babies R Us, (800) 869-7787 or www.babiesrus.com;Target,(800) 440-0680 or www.target.com; Kohl’s Department Stores,(866) 887-8884 or www.kohls.com.


GE RECALLS RANGES DUE TO FIREAND BURN HAZARDS

GE Consumer & Industrial hasrecalled about 28,000 GE Profile™Freestanding Dual Fuel Ranges.Thewiring in the rear of the range canoverheat, posing a fire and burnhazard to consumers. GE is awareof 47 reports of overheated wiring,including 33 reports of wiring thatcaught fire. Of these, one firecaused structural damage to thehome and there have been 14reports of minor property damage.No injuries have been reported.This recall involves GE Profile 30”Freestanding Duel Fuel ranges.Theranges were sold in white, black,bisque and stainless steel. Themodel and serial numbers can befound on the left inside corner ofthe bottom drawer.

Consumers should immediatelystop using the oven and contactGE for a free repair. Consumers cancontinue to use the cooktopburners. For additional informa-tion, contact GE toll-free at (888)352-9764, or visit the firm’s Website at www.geappliances.com.

WOMEN’S SHOES RECALLED BY WAL-MART DUE TO FALL HAZARD

About 200,000 pairs of women’sshoes have been recalled by Wal-Mart Stores Inc., of Bentonville,Arkansas.The shoes were manufac-tured by Joyfair Footwear, of Taipei,Taiwan. Heels on the shoes caneasily detach, posing a fall hazardto consumers. No injuries havebeen reported.This recall involveswomen’s sling-back, pointed-toeshoes sold under the Georgebrand.The shoes were sold in threecolors, black, grey and purple, andin sizes 51⁄2 to 11.The shoes weresold exclusively at Wal-Mart storesnationwide from June 2008 throughDecember 2008 for about $13.Consumers should immediately

stop wearing the shoes and returnthem to the nearest Wal-Mart for afull refund. For additional informa-tion, contact Wal-Mart Stores at(800) 925-6278 or visit the firm’sWeb site at www.walmartstores.com for more information.

COFFEEMAKERS RECALLED BY PHILIPSCONSUMER LIFESTYLE

About 155,000 Philips Senseo One-Cup Coffeemakers have beenrecalled by Philips ConsumerLifestyle, of Stamford, Connecticut.An electrical fault and the build-upof calcium from hard or mediumwater can cause an obstruction inthe coffeemaker. If this happens,the boiler can burst, posing a burnhazard to consumers. No injurieshave been reported in the UnitedStates. The firm has received 17reports of incidents in Europe,including six reports of minor per-sonal injury involving first degreeburns to the hands, arms andabdomen. This recall involvesSenseo one-cup coffeemakers withmodel numbers HD 7810, HD7811,HD 7815,HD 7820,HD 7832,and HD 7890. Model numbers arelocated on the bottom of the cof-feemaker. Date codes are printedon the bottom of the coffeemaker.Coffeemakers made in China havedate codes 0727 through 0847; cof-feemakers made in Poland havedate codes 0627 through 0847.

The coffeemakers were sold byWal-Mart,Target and Safeway storesnationwide and online atAmazon.com between July 2006through March 2009 for between$60 and $140. Consumers shouldimmediately stop using the cof-feemakers and contact Philips forinstructions on receiving a freereplacement unit. For additionalinformation, contact Philips toll-free at (866) 604-0051. Consumerscan also visit the firm’s Web site atwww.senseoexchange.com.

FITNESS BALLS RECALLED AFTERBURSTING

About three million fitness ballssold in department stores andsporting good retailers nationwidehave been voluntarily recalled fol-lowing 47 reports that they unex-pectedly burst, in some casescausing injuries, the ConsumerProduct Safety Commission said.The balls—carrying the namesBally Total Fitness, Everlast, Valeoand Body Fit—were distributed byEB Brands of Yonkers, NY andmade in China. They were soldbetween May 2000 and February2009 for between $15 and $30.The55-, 65- and 75-centimeter sizes areinvolved in the recall, and weresold with a pump and inflationinstructions.The CPSC believes theballs burst because they were over-inflated. Consumers shouldcontact EB Brands by calling 800-624-5671 in order to receiveupdated inflation instructions.

WAL-MART RECALLS 91,000 PAIRS OFCHILDREN’S SHOES

Wal-Mart is recalling about 91,000pairs of “CARS” Fleece Clog Chil-dren’s Shoes. The shoe has fourdecorative wheels that can detach,posing a choking hazard to youngchildren.Wal-Mart has received onereport of a decorative wheeldetaching from the shoe. Noinjuries have been reported. Theshoes were sold exclusively at Wal-Mart stores in the United Statesand Canada from September 2008through March 2009 for between$6 and $10 (U.S.) and for about$13 (CAN). Customers shouldimmediately take this productaway from children and return it tothe nearest Wal-Mart store for a fullrefund. Consumers should contactBuster Brown & Co. for more infor-mation at (888) 869-1044.


TOASTER OVEN/BROILERS RECALLEDBY HAIER AMERICA

About 106,000 Toaster Oven/Broil-ers have been recalled. Electricalconnections in the toaster oven/broilers can become loose, posingelectrical shock and burn hazards.Haier America has received tworeports of minor burns and onereport of a minor electrical shockto consumers, and one report ofminor property damage.This recallinvolves toaster oven/broilers withmodel number RTO1400SS. Theunits are stainless steel and blackplastic. “Haier” is printed on thefront and the model number isprinted on a label on the back ofthe toaster oven/broilers. Con-sumers should immediately stopusing the recalled toasteroven/broilers and contact HaierAmerica to receive a free replace-ment toaster oven/broiler. For addi-tional information, contact HaierAmerica at (866) 927-4810anytime, or visit the firm’s Web siteat www.haieramerica.com.

ROBES FOR WOMEN RECALLED DUE TOBURN HAZARD

Blair LLC, of Warren, Pennsylvania,has recalled about 162,000 fulllength women’s chenille robes.Some robes fail to meet federalflammability requirements andpresent a risk of serious burns toconsumers if they are exposed toan open flame. Blair has receivedthree reports of the robes catchingon fire, including one report ofsecond-degree burns. The recallinvolves the Full Length Women’sChenille Robe with the followingitem numbers: 3093111, 3093112,3093113, 3093114, 3093115, and3093116.The item number is iden-tified on a label in the garment’sneckline. This is a one-piecegarment made of plush sculptedchenille, a shaped stand collar, and

horizontal chenille front and backyolks and cuffs.The robe has a full-button front with seven matchingbutton closures, long sleeves withself cuffs, a straight bottom withself hem, and two sideseampockets.

The robe’s sewn in label states:“100% Cotton, RN 81700, Made inPakistan”. Robes with other itemnumbers are not included in therecall.The robes were sold in Blaircatalogs and the Blair Web site, andBlair stores in Warren and GroveCity, Pennsylvania, and Wilmington,Delaware, from January 2003through March 2009 from about$20 to $40.Consumers should stopwearing the garment immediately.Contact Blair LLC for informationon returning the robe and toreceive a refund or a $50 gift cardfor Blair merchandise. For moreinformation, call Blair toll-free at(877) 392-7095, or visit the firm’sWeb site at www.blair.com/recall,or contact the firm by e-mail [email protected].

LEG CURL FITNESS MACHINESRECALLED DUE TO CRUSHING HAZARD

Paramount Fitness Corp., of LosAngeles, California has recalledabout 150 Leg Curl Machines. Aconsumer’s hand can becomecaught between the cylindricalcounter weight and the frame ofthe fitness machine, posing acrushing hazard that can result inlacerations and finger amputation.Paramount has received threereports of incidents, including afinger amputation and two finger-crushing injuries. This recallinvolves the Paramount FitnessPL2100 leg curl machine. Thesingle station weight machine isdesigned to exercise the ham-string muscles. Serial numbersinvolved in this recall include:PL21-9301-000 through PL21-9510-099. The serial number is

printed on the back of the weightstack frame on the lower right.Model number PL2100 is printedon the exercise procedure labelon the front of the machine.TheParamount Fitness logo is printedvertically on the frame. Con-sumers should immediately stopusing the fitness machines andcontact Paramount Fitness toreceive a free repair kit. For addi-tional information, contact Para-mount Fitness at (888) 825-8905between 7:30 a.m. and 4:30 p.m.PT daily, or visit the firm’s Web siteat www.paramountfitness.com.

CALIFORNIA PLANT RECALLS PISTACHIOPRODUCTS

A California food processingplant is voluntarily recalling up to1 million pounds of roasted pista-chio products that may havebeen contaminated with salmo-nella.The Food and Drug Admin-istration announced the recall.The nuts came from Setton Farmsin Terra Bella, California, about 75miles south of Fresno.They werelargely distributed in 2,000-pound containers to food whole-salers who would then packagethem for resale or incorporatethem as ingredients in otherproducts, such as ice cream andtrail mix. No illnesses have beenlinked to this case, according toDr. David Acheson, FDA’s associ-ate commissioner. But salmonellastrains were found during routinetests by Kraft Foods, one of aboutthree dozen companies that pur-chase pistachios from SettonFarms. Kraft notified the FDA onMarch 24th.


XXIV.FIRM ACTIVITIES

EMPLOYEE SPOTLIGHTS

BRENT WARENBrent Waren, who has been with us

for eight years, is the System Administra-tor for our Information TechnologyDepartment. In this position, Brenthandles Administration and manage-ment of the firm’s data back-up systemand servers and other related ITsupport responsibilities. Brent gradu-ated from Troy University in 1996,receiving a B.S. degree in Managementand Business Administration.He was therecipient of the Wallace Foundation Aca-demic Leadership Scholarship and theSimpson Academic Scholarship. Brent isa Microsoft Certified Systems Engineer.

Brent has been married for 12 yearsto Michele, who is Director of Opera-tions for the Alabama Dental Associa-tion. They have four-year-old twins,Grady and Madelyn Grace. Brent enjoysrunning, hunting, fishing—just aboutanything that involves being outdoors.He also enjoys gardening, traveling,spending time with his family, andAlabama football. Brent is a very goodemployee and we are fortunate to havehim with us.

AVERY HARRISAvery Harris, who has been with the

firm for seven years, currently serves asa Staff Assistant for Navan Ward in theMass Torts Section.Avery’s job requireshim to make sure that statute of limita-tions are correct, that documents arereceived, that clients are called regu-larly, that medical records are orderedand reviewed. In essence,Avery’s posi-tion is the life-line between the clientsand their attorney. He started at thefirm as a mail clerk, and served as arunner before moving up to staff assis-tant. Avery graduated from JeffersonDavis High School and also attendedSouth University for computer informa-tion systems.

Avery, who is currently engaged to

Ashley Cochran, enjoys sports, cookingand grilling out,the outdoors,and fishing.He is a member of Pleasant Grove Mis-sionary Baptist Church.Avery is a dedi-cated employee who does good work.We are blessed to have him with us.

HOLLY NEWTONHolly Newton, who has been with

the firm for four years, is a clerk in theConsumer Fraud Section. In that role,she assists lawyers and legal assistantsin the Section with any case they arehandling. Currently, Holly is working oncases such as ones involving Country-wide,Ameriquest, and Renosol. She alsoassists Michelle Fulmer, Section HeadAdministration in the Fraud Section,handles all of the “mystery mail” wereceive, and serves as a back-up fornew client calls. Holly has also headedup the March of Dimes fundraiser forthe firm for the past two years.

Holly and her husband Mac have a16-month-old daughter, Aubrey. Theyenjoy going to the beach, gettingtogether with family and friends,working in the yard, going to concerts,and playing with their daughter. Hollyis a dedicated employee who does verygood work. We are fortunate to haveher with us.

A SPECIAL THANKS TO LAW ENFORCEMENTOFFICERS AND THEIR FAMILIES

Our firm said “thank you” last monthto the dedicated men and women inlaw enforcement in the MontgomeryCounty area who devote their lives toserve and protect the public. Personnelfrom all area law enforcement agenciesand their families were invited toattend the annual Beasley Allen Fish Fryevent on Thursday,April 16th, at the his-toric Train Shed in downtown Mont-gomery.Featured speakers included:

• Susan Moss, executive director ofCentral Alabama CrimeStoppers;

• Monica Jordan, advocate on behalf ofMothers Against Drunk Driving andthe State of Alabama Crime VictimsCommission; and

• Montgomery County District Attor-ney Ellen Brooks.

At the event the firm presented adonation of $2,500 each to the Mont-gomery Public Safety Insurance Fund(PSIF) and the Alabama State TroopersAssociation. As you may know, PSIF,established by Grant Sullivan and JerryWillis, two Montgomery businessleaders, funds life insurance and acci-dental death insurance policies forevery firefighter, police officer andsheriff’s deputy on active duty in Mont-gomery. A good number of local busi-nesses support this program. Donationsto the Alabama State Trooper Associa-tion fund life insurance for Troopers,and they also are used to purchaseTrooper Teddy Bears. These specialbears are used to comfort childreninvolved in traumatic events or chil-dren who are hospitalized during theholiday season.

More than 200 law enforcement per-sonnel and their family membersattended this year’s fish fry. A greatmeal was provided by Phil Norton andthe Farmer’s Market Café and every-body seemed to enjoy it. It was a verygood event and we are proud to recog-nize law enforcement personnel whoare dedicated to their work.

BETH WARREN TRAINS TO HELP ENDSTROKE RISKS

Beth Warren, who has been a LegalAssistant with our firm for seven years,has been training since February to par-ticipate in the Country Music Marathonand Half Marathon in Nashville,Tenn.Just as this Report goes to press, Bethwill be tackling the half-marathon walkon April 25th, which will be the firsttime she has participated in amarathon. This isn’t just a personalfitness goal for Beth. She is walking onbehalf of the American Stroke Associa-tion, to raise money for education andresearch, and to raise awareness aboutthe dangers and warning signs ofstroke. It’s a cause that’s very close toher heart. In 2006, Beth lost her


mother, Mary Jeanette HardemanWarren, at age 62, from complicationsdue to a stroke. Mrs. Warren had suf-fered a large stroke in 2001. Beth hadthis to say:

I saw the struggles she had afterher stroke, as a result of thestroke, throughout the yearsbefore her death. Strokes cancause physical disabilities, andpeople often need a lot of assis-tance just to deal with everydayactivities. I can’t imagine whatpeople do who don’t have help.

Beth’s mother began suffering aseries of intense headaches prior to herstroke in 2001. Nobody in the familyrealized these were actually a series ofmini-hemorrhagic strokes, or bleedingin her brain. Mrs. Warren went to thedoctor in 2001 to find out what wascausing the headaches, and whileundergoing tests she suffered a majorstroke. As a result, she couldn’t walk,and had to learn to feed herself again.She couldn’t be left alone, but requiredconstant care and assistance witheverything from dressing to bathingand other basic needs. Perhaps mostheartbreaking for her family, Mrs.Warren lost the ability to relate tothem, recognizing them, but not reallyunderstanding who they were.

The American Stroke Associationoperates the “Train to End Stroke”program that allows people to partici-pate in marathons and half-marathonsin different locations on behalf ofstroke awareness. Beth committed toraise $3,000 to participate in theNashville event. She raised the moneythrough a variety of events including a“Jeans Day” at the firm—whereemployees donated $5 to wear jeans towork—a Bunko tournament, and aFinal Four college basketball bracket.

The Stroke Association provided Bethwith a handbook and training scheduleto help her prepare, with walks gradu-ally increasing in length to increase herendurance. The Association also pro-vided her with official race gear, includ-ing a singlet, a special tank top to wear

during the race to promote strokeawareness, as well as a hat and bag inwhich to keep her supplies. Bethobserved:

I hope that by raising awareness,more people will learn aboutstrokes, and recognize the signs ofa stroke sooner. I feel that if we’dknown more about stroke, maybemy mother could have been saved.

We are extremely proud of Beth forher involvement in this worthy cause.For more information about stroke, orto make a donation, visit the AmericanStroke Association online atwww.strokeassociation.org.

BEASLEY ALLEN RAISES THE AWARENESSOF MESOTHELIOMA

Staff from our firm participated inthe American Cancer Society’s “Bite theTail Off Cancer” Crawfish Boil event onSaturday, April 4th, at Riverfront Park.The annual event, sponsored by theACS Junior Executive Board, seeks toraise funds for the American CancerSociety. The event was attended bymore than 800 people, and provided anopportunity for the firm to share infor-mation and raise awareness aboutmesothelioma, a deadly cancer causedonly by exposure to asbestos.

This year, the event coincided withNational Asbestos Awareness Week,April1-7, 2009, which was recognized by aU.S. Senate resolution. On the locallevel, Montgomery Mayor Todd Strangepresented a proclamation declaringAsbestos Awareness Week in Mont-gomery. Our firm has a website,www.myMeso.org, and provides amesothelioma and asbestos awarenessoutreach program. Since 2008,myMeso.org has provided a forum toconnect people affected by mesothe-lioma through an active blog-based website and hands-on activities such as thecrawfish boil. Outreach efforts wereexpanded in 2009 to include contribu-tions to help support mesotheliomaresearch through the Mesothelioma

Applied Research Foundation.During the crawfish boil event, staff

from our firm distributed informationabout mesothelioma and the dangers ofasbestos, and asked attendees to sign apetition to completely ban asbestosproducts in the United States. WendiLewis from our firm, a writer formyMeso.org, will visit Washington,D.C., in June to learn more aboutmesothelioma and ask Alabama’s Con-gressional delegates to support a com-plete asbestos ban.

LAWCALL IS STILL GETTING LOTS OFINTEREST

Since January, our firm has beenhosting LawCall on WSFA each Sundaynight. Each week the show covers dif-ferent legal topics. Folks from all overthe WSFA viewing area have beencalling in with their questions.We areproud to sponsor this show.We believethat it provides a community service tothe local area. Looking ahead, some ofthe topics for this month’s shows willinclude,“Hurt on the Road”,“Mom andthe Law (Family Law)” and the popular“Ask Us Anything” category. GibsonVance from our firm—along with KimWanus—are regulars on the show andare doing a very good job.

GRANT ENFINGER HAD A GREAT RUN ATTALLADEGA

Our firm’s race car posted a thirdplace finish on national television atthe Talladega Superspeedway on April24th. Our driver, Grant Enfinger, madehis first run on a superspeedway whichrequires “drafting” in packs of cars atmore than 180 miles per hour. It’s atotally different driving experience.After qualifying eighth out of 41 com-petitors, Grant ran in the top ten mostof the 250 mile race.

Grant is competing in an ARCA car, astock car, which is essentially aNASCAR Cup vehicle with a slightlyless powerful engine. Grant qualifiedthe Beasley Allen car at more than 183miles per hour and his speeds were


even faster during the race. He will beracing the firm’s ARCA car on nationaltelevision later in the year. We fullyexpect that the race team will continueposting top finishes.

Automotive racing engineers andtrial lawyers have both contributed topassenger vehicle safety improve-ments.When manufacturers claim thatcars and trucks can’t be designed andmade safer, Greg Allen and others haveshown that race teams have improvedboth performance and safety. Grantwill continue to do his part to drivethe Beasley Allen car to the front ofthe pack. Our firm will continue to doits part to encourage the developmentand production of safer motor vehi-cles, including passenger cars, pick-ups, SUVs, and big rig and commercialtrucks.We are very proud of Grant andhis team. I predict the sports worldwill be hearing lots more from Grantin the not-too-distant future.

XXV.SPECIALRECOGNITIONS

FELLOWSHIP OF CHRISTIAN ATHLETES

As many of our readers know, the Fel-lowship of Christian Athletes is veryactive in Alabama.The FCA is doing theLord’s work working with young folksall over Alabama. Recently, I received areport from John Gibbons, State Direc-tor of FCA,who says that:

• 3000 students attended the FCASenior Bowl Rally, January 27th inMobile.

• Over 500 decisions for Christ weremade.

• 310 college athletes from AuburnUniversity, University of Alabama,University of North Alabama, TroyUniversity, Alabama State, TuskegeeUniversity, Jacksonville State Univer-sity, West Alabama, Sanford, MilesCollege, Montevallo, Huntingdon andAlabama A&M attended the FCA

College Advance in February.

• Over 30,000 students attended FCAHuddles at schools in January andFebruary.

• Over 150 FCA coaches are involvedin FCA Coaches Bible studies acrossthe state.

This is real good news. I know first-hand that FCA, by working with Christ-ian athletes and coaches, is able to reachstudents who otherwise may never evenhear the good news about Jesus.

BEASLEY ALLEN LAW CLERK PARTICIPATESIN NATIONAL COMPETITION

The American Bar Associationrecently sponsored the 34th AnnualNational Appellate Advocacy Competi-tion in Chicago. This competitionbegan with 187 teams from 111 lawschools, who competed at six regionalsites.This year’s competition probleminvolved a war powers disputebetween Congress and the President.Team members were required to writea brief on one side of the issue and toargue before a panel of judges as if theywere in front of the United StatesSupreme Court. The top four teamsfrom each region advanced to thenational finals in Chicago. Some of theregional champions included Duke,Chicago-Kent, University of Texas, Uni-versity of Florida, University of Okla-homa, Temple, Samford University,American University, Loyola-Chicago,Washington University, and MichiganState University.

Katie Langer, a law clerk in our MassTorts Section, who is a third year lawstudent at Faulkner University’sThomas Goode Jones School of Law,was the senior member of the appel-late advocacy team which finishedsecond in the nation out of 187 teams.Katie and her teammates, AshleyPenhale and Clayton Tartt, defeatedteams from St. Mary’s,Texas Tech andSeton Hall in the national eliminationrounds to advance to the nationalchampionship on Saturday, April 4,

2009. The national championshipround was held at the Chicago court-room of the Illinois Supreme Courtwith Illinois Chief Justice Thomas R.Fitzgerald presiding.

South Texas defeated the Jones teamin the final round, but the secondplace finish is the school’s best resultin just three years of eligibility as anAmerican Bar Association-approvedlaw school. Katie was named the fifthbest advocate in the competition.Thisis a tremendous accomplishment forKatie. We are proud of her and theentire team. She will be an outstand-ing lawyer.

ALABAMA DHR PROVIDES PARENTINGASSISTANCE

This month we will celebrateMother’s Day.While many families willenjoy a day surrounded by loved ones,the holiday is a painful reminder forother families that life doesn’t always goaccording to plans. Some families strug-gle to create a stable and strong homelife, and aren’t sure where to turn forhelp. Adults in the home may faceserious problems of poverty or abuse,orthey may simply need guidance to learnhow to be a good parent.Whether thechallenge is great or small, Alabama’sDepartment of Human Resources(DHR) can provide the answer.

In 1993, the Alabama DHR becameresponsible for administering thestate’s Family Preservation and SupportServices Program. The legislation isdesigned to promote family strengthand stability, enhance parental func-tioning, and protect children. DHRoperates 12 Family Service Centersthroughout the state to provide com-munity-based activities that increasethe ability of families to successfullynurture their children.

The mission of each Family ServiceCenter is for children to be protectedfrom abuse and neglect.Also, wheneverpossible, families should be preservedand strengthened in order to nurtureand raise children in safe, healthy andstable environments. Centers are com-


munity-based, comprehensive, accessi-ble to the general population, andprovide goal-directed services that areindividualized, prevention-oriented andneeds-based.

Centers provide services whichinclude needs assessment, goal-setting,case management, and assistance forbasic needs like health, safety and sta-bility. They help families find food,clothing and shelter when needed or ina crisis. Supportive services such aschildcare, job skills training, adult edu-cation, and transportation are provided.Parenting training, counseling services,and teaching budgeting are also fur-nished. The centers coordinate withindividual county offices of the Depart-ment of Human Resources.

All Family Service Centers are fundedthrough the Alabama DHR with federalfunds from the Promoting Safe andStable Families portion of the Adoptionand Safe Families Act. Centers in thestate are located in Dothan, Birming-ham, Montgomery, Phenix City,Valley,Bay Minette, Anniston, Hayneville, Tal-ladega, Greensboro, Sylacauga, andTuscaloosa. For a complete list ofFamily Service Center locations andcontact information, visit the AlabamaDepartment of Human Resourcesonline at www.dhr.state.al.us and clickon the Family Services and FamilyService Centers links, or call 334-242-1310.

FAVORITE BIBLE VERSES

Recently, I met Victor Wyatt, a studentat Huntingdon College, when I spoketo a class at the school.Victor, who isalready an ordained minister, sent inthis verse:

A good name is to be moredesired than great wealth, favor isbetter than silver and gold.

Proverbs 22:1 NASB

My son Jere Beasley, Jr. furnished thistimely verse, which is helpful in tryingtimes such as these:

For God has not given us the

spirit of fear; but one of power,and of love, and of a sound mind.

2 Timothy 1:7

The verse below was sent in by mylongtime friend Bill Fuller:

But know that the Lord has setapart the faithful for himself;the Lord hears when I call to him.

Psalm 4:3

The following came from our Manag-ing Partner,Tom Methvin, and is for allof us, especially for lawyers:

Open your mouth, judge right-eously, And plead the cause of thepoor and needy.

Proverbs 31:9

And finally, the following is a versethat my wife Sara selected which ismost appropriate for the America welive in:

If my people, who are called bymy name, will humble themselvesand pray and seek my face andturn from their wicked ways, thenwill I hear from heaven and willforgive their sin and will healtheir land.

2 Chronicles 7:11-22

XXVI.SOME CLOSINGOBSERVATIONS

I asked my good friend Dr. LesterSpencer, who serves as Senior Pastor atSt. James United Methodist Church, towrite this month for the Report. Lestergladly agreed to do so which I appreci-ate very much. As we all know, whilepride can be a big time problem formost of us, humility is a virtue thatoftentimes is way down our priority listin life. Lester did a very good job inteaching us how to have a humbleheart.

PURSUING A HUMBLE HEART

We have all heard the joke aboutthe “humble guy” who wrote thebooks, Humility and How IAttained It, and its sequel,Humble and Proud of It.

Well, I don’t know about you, butI feel like the least likely candi-date to write an article on humil-ity.Honestly, sometimes when I domake an attempt at beinghumble (which probably isn’toften enough), I am instantlyquite proud of my attempt athumility. Thus, my humilityimmediately evaporates, and Iam back to square one again inmy quest to be humble. It is anever ending circle…and a con-stant challenge to humble myselfbefore the Lord and with others.My pride raises its ugly head waytoo often and is my primaryenemy in this pursuit of ahumble heart.

Perhaps, I should attempt a defi-nition of humility to make surewe are talking about the samething.When we look at Jesus andhis example we see a clear pictureof humility: Humility is not weak-ness or a putting down of one’sself. It is rather the quiet strengththat flows from a deep assurancethat God is the only one ulti-mately in control. It is beingcourageous in the midst of diffi-culty, not because you are sure ofyourself, but because you are sureof God’s faithfulness and Hisheart concerning you!

Deep down, I really want to belike Jesus! I want to be one ofthose he speaks about in Matthew5:5, “Blessed are the humble, forthey shall inherit the earth.” Butmost of the time, my humility isnot where or what it needs to be,and I think most of us wouldadmit that the Holy Spirit is stillworking on us in regards to ourhumility. God’s “sanctifying grace”


is still at work in us, moving usonward “toward perfection” (asJohn Wesley put it) in Christ.

Having now confessed, it is vitalthat we understand how seriouslythe Lord regards humble heartsand how His disapproval isstirred by our proud spirits. TheBible is quite clear from Genesisto Revelation, that God loves andfavors the humble.And, on the flipside of that, the Word tells us thatGod opposes the proud andhaughty.

“God opposes the proud butfavors the humble.”

James 4:6 (Proverbs 3:34)

“The sacrifice you desire is abroken spirit.You will not rejecta broken (humble) spirit andrepentant heart, O God.” Psalm51:17

We could list scripture after scrip-ture on the subjects of humilityand pride. I believe that mostclear-thinking people, regardlessof their beliefs or faith, wouldacknowledge that humility is agood and noble virtue thatshould be pursued. But—for thoseof us who call ourselves Christ-fol-lowers, not pursuing humility isreally not an option—accordingto Christ and the scriptures.

So, how do we distinguishbetween Proud Spirits andHumble Hearts? Author SylviaGunter helps us with this in herbook, Living In His Presence.

See the table on this page.

Wow! This list is very revealing,isn’t it?

Now that you have read these dis-tinguishing characteristics, whichone would you say best describesyou?

We might ask the Lord to revealwhich traits of a proud spirit Hefinds in our lives. Use the left side


PROUD SPIRIT HUMBLE HEART

Focus on the failure of others Overwhelmed with a sense of their own spiritual need

Self-righteous, critical, fault-finding spirit; look Compassionate, forgiving, look forat their own life through a telescope but the best in othersothers through a microscope

Look down on others Esteem all others better than self

Independent/self-sufficient spirit Dependent spirit, recognize their need for others

Maintain control,must have their own way Surrender control

Have to prove that they are right Willing to yield the right to be right!

Demanding spirit Giving spirit

Self-protective of time, rights, reputation Self-denying

Desire to be served Motivated to serve others

Desire to be a success Desire to be faithful to make others a success

Desire for self-advancement Desire to promote others

Wounded when others are promoted Rejoice when others are lifted upand they are overlooked

Feel confident in how much they know Humbled by how much they have to learn

Self-conscious Not concerned with self at all

Keep people at arm’s length Risk getting close to others,willing to takethe risks of loving intimately

Quick to blame others Accept personal responsibility, can seewhere they are wrong

Defensive when criticized Receive criticism with a humble,open heart

Concerned about what others think All that matters is what God knows

Work to maintain image and protect reputation Die to own reputation

Find it difficult to share their spiritual needs Willing to be open and transparentwith others with others

Have a hard time saying,“I was Are quick to admit failure and seek wrong;will you please forgive me?” forgiveness

Deal in generalities when confessing sins Deal in specifics

Concerned about the consequences Grieved over the cause/root of their sinsof their sins

Wait for the other person to come Take the initiative to be reconciled,and ask for forgiveness when see if they can get to the cross first!there is misunderstanding or conflict

Compare themselves with others and feel Compare themselves to the holiness deserving of honor of God and feel desperate need for mercy

Blind to their true heart condition Walk in the light

Don’t think they have any need Continual heart attitude of repentanceto repent

Don’t think they need revival Continually sense their need for a fresh(think everyone else does!) encounter with the filling of the Holy Spirit!

Characteristics of a Proud Spirit/ Humble Heart:

for confession and repentance.And use the right side for interces-sion, prayer and characteristics topursue!

I want to pursue a humble heartso that I may be more like Christ,and so that I may enjoy the favorof the Lord in my relationshipwith Him, my marriage, myfamily, my job, and all otheraspects of my life! I am also verymuch aware that if I do notpursue a humble heart, the scrip-tures and my personal experi-ences remind me that the Lordhimself will “humble the proud.”

May the Lord transform us andbless us as we pursue being Christ-followers with humble hearts!

Amen!

Lester SpencerSenior PastorSt. James UMC

XVII.SOME PARTINGWORDS

I must confess that I have always hada tendency to try to do things my wayand felt that I could handle anythingthat came up. Unfortunately, I didn’talways rely on God to help me or bemy provider. It took me more than afew years to fully realize that the Lordis always present and with those whotruly believe and trust in Him.Althoughunseen, God’s presence allows us todepend on Him for the strength andcourage to meet all of the challenges inour lives.The Holy Spirit is also avail-able to us, regardless of the circum-stances, whenever we ask for guidanceand direction.That is a truth that manyof us tend to ignore until we face a realdifficult situation that overwhelms us.

It’s interesting that I need just asmuch assistance in dealing in working

through the good times as I do whenthe bad times arise. Pride seems to takeover when times are good and it canalso pose a problem when times gobad. At least, it does until I come torealize that most all bad situations aretoo much for me to handle alone.Therefore, I am trying hard to simplydepend on the assurance that Godthrough His Son, the Lord Jesus, and theHoly Spirit are with me constantly andreadily available to me. Hopefully andprayerfully I am making progress in thisarea in my life.


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No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.

No representation is made that the quality of services to be performed is greater than the quality of legal services performed by other lawyers.

Jere Locke Beasley, founding shareholder of the law firm Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., is one of the most suc-cessful l it igators of all t ime, with the best track record of verdicts of any lawyer in America.

Beasley’s law firm, established in 1979 with the mission of “helping those who need it most,” now employs 44 lawyers and more than 200 support staff. Jere Beasley has always been an advocate for victims of wrong-doing and has been helping those who need it most for over 30 years.

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