the jere beasley report jan. 2004

I.CAPITOL OBSERVATIONS

Wrongful Death Cases SettledOur firm recently handled a most sig-

nificant case that settled prior to trial.The case involved the deaths of threeladies who were on their way to dosome shopping when they collidedwith a concrete truck owned by Ander-son Materials.The 70,000-pound con-crete truck slammed into theirCadillac, and all three victims werekilled instantly. The concrete truckdriver,who was unhurt, testified that an18-wheeler owned by Pichard TruckingCompany had passed on a doubleyellow line and forced his truck off theroad, causing him to lose control.Theconcrete truck then went all the wayacross the highwayhitting the car,which was all the way off the road.Weproved that, in addition to the grossnegligence of the Pichard truck, theconcrete truck should not have beenon the road because of three out-of-service violations. These violationsincluded a cracked frame, excessivesteering play and a broken leaf spring.Any one of these would have con-tributed to the drivers loss of controland his oversteer.The combination ofall three made the collision a certainty.Just after the collision, two off-dutytruck drivers were approaching thescene and were able to identify the 18-wheeler as it left the scene.The Pichardtruck driver vehemently denied beinginvolved in the crash. However, recon-

struction of the crash, including a siteanalysis,proved that the 18-wheeler didforce the concrete truck off the roadjust as the driver of the concrete trucktestified.

During discovery,we learned that theAnderson Materials had an insufficientinspection procedure and an inade-quate maintenance procedure that hadallowed the defects to exist at the timeof the collision.The investigating statetroopers supported our claims relatingto the defective nature of the vehicle.We put together an animation thatshowed by video exactly how the colli-sion occurred.

At the request of the victims fami-lies, we insisted that, as a part of thesettlement, Pichard be required to re-train its truck driver and that Andersonimplement additional safety proce-dures to prevent this type of tragedyfrom occurring in the future.The defen-dants agreed to this part of the settle-ment, which was approved by the trialjudge. Our clients also insisted that theliability feature of the case be publicknowledge and not confidential, assometimes is required in settlements.This was a tragic situation that took thelives of three innocent victims. Theirfamilies want the highways to be madesafer for people.They sincerely desiremore effective regulation of the truck-ing industry so that safety is made a toppriority.The case was handled by GregAllen and Julie Beasley from our firm.Shane Seaborn and Tom Kelly werelocal counsel.

JEREBEASLEYREPORTJEREBEASLEYREPORTBeasley,Allen, Crow, Methvin, Portis, & Miles, P.C., Attorneys at Law JANUARY 2004

www.BeasleyAllen.com

T H E

Arbitration

IN THIS ISSUEI. Capitol Observations . . . . . . . . . . . . 1

II. Legislative Happenings . . . . . . . . . . 4

III. Court Watch . . . . . . . . . . . . . . . . . . 5

IV. The National Scene . . . . . . . . . . . . 11

V. Congressional Update . . . . . . . . . . 14

VI. Campaign Finance Reform . . . . . . 15

VII. The Corporate World . . . . . . . . . . 16

VIII. Product Liability Update . . . . . . . . . 18

IX. Premises Liability Update . . . . . . . 21

X. Workplace Hazards. . . . . . . . . . . . 21

XI. Transportation . . . . . . . . . . . . . . . 22

XII. Mass Torts Update. . . . . . . . . . . . . 25

XIII. Business Litigation . . . . . . . . . . . . 26

XIV. Nursing Home Update. . . . . . . . . . 28

XV. Healthcare Issues . . . . . . . . . . . . . 31

XVI. Environmental Concerns . . . . . . . . 32

XVII. Insurance and Finance Update . . . 33

XVIII. Arbitration Update . . . . . . . . . . . . 35

XIX. Predatory Lending Update. . . . . . . 36

XX. The Consumer Corner. . . . . . . . . . 36

XXI. Recalls Update . . . . . . . . . . . . . . . 38

XXII. Technology Update . . . . . . . . . . . . 40

XXIII. Firm Activities . . . . . . . . . . . . . . . . 40

XXIV. Closing Remarks . . . . . . . . . . . . . . 42

Monsanto Settlement Administration Process Moving ForwardAs we reported earlier this year, our

firm and the Cochran Firm helped tospearhead the $700 million dollarglobal settlement of the PCB damageclaims of over 21,000 current andformer residents of Calhoun County,Alabama and the surrounding area.Three months of settlement talks thatbegan in our 18,000-plaintiff federalcourt case (Tolbert v. Monsanto) even-tually led to a global resolution of notonly that case, but also the long-running state court trial (Abernathy v.Monsanto) in Gadsden,Alabama,whichinvolved more than 3,000 additionalplaintiffs.As part of the settlement, ourclients will be eligible for paymentsadministered by a Court-appointed Set-tlement Administrator from a $300million dollar settlement fund. Ourclients will also have access to certainprescription drug benefits and will beable to receive treatment from a com-munity health and environmentalmedical clinic that will be created inthe near future. Another $50 milliondollars has also been earmarked for avariety of community-based projectsdesigned to improve the lives of theresidents and the community. Finally, U.S. District Judge U.W. Clemon recentlyentered a consent decree that willinsure that residential and commercialproperties affected by PCB contamina-tion will be cleaned up and furthersteps will be taken to study and remedyPCB problems existing in public landsand waterways in the area.

Over the past 30 days, the settlementadministration process has takenseveral giant leaps forward. To beginwith, Judge Clemon has appointedattorney Ed Gentle of Birmingham tohead up the settlement administrationprocess. Since his appointment, Gentlehas taken several important steps toensure that the process of paying theclaims of our clients proceeds as

quickly and fairly as possible. JudgeClemon recently authorized advancepayments in the sum of $500 dollars toeach of the Tolbert claimants. In addi-tion, a series of town hall meetingshave been held in Anniston where Mr.Gentle and Judge Clemon have openlydiscussed the settlement administrationprocess with our clients and answeredtheir questions about various issuesrelated to the settlement and thetiming of payments. During the townhall meetings, residents were advisedthat a blood-testing program is about toget underway, which will go a long waytowards determining the value of theirclaims. It is expected to be the largestenvironmental blood- testing programever undertaken in any case in theUnited States.According to the Settle-ment Administrator, the results of theblood testing, along with other factorssuch as the claimants proximity to thecontamination site and whether he orshe suffers from a condition in certaindisease categories, will be used indetermining payments.

Without question, the events of thepast month are a positive sign that thesettlement administration process ismoving forward as quickly as it possi-bly can. As always, our firm will con-tinue to do everything that it can toassist the Settlement Administrator andthe Court in this process.

Attacks On The Legal SystemI predict that we will see mounting

attacks on the civil justice systemduring the remaining months of thisyear. We have already witnessed thefirst blast in a recent article inNewsweek entitled Civil Wars. It isnow evident that the tort reformerswill portray doctors, teachers, coaches,pastors, and others as victims oflawsuit abuse. A special seriesappeared on NBC News and onMSNBC cable in conjunction with theNewsweek Magazine article.All of thisis part and parcel of a carefullyplanned and well-financed campaign

designed to destroy the jury system.Their goal is quite apparent and that isto protect wrongdoers. Groups such asCommon Good have been created forthe sole purpose of being messengersfor the movement. If there is anydoubt, you can go to Common Goodswebsite (www.commongood.com) tosee how the plan is unfolding. It wasno coincidence that Philip Howard,the founder of Common Good, and asenior partner in a major Washington,D.C. law firm that represents tobaccocompanies and many other big corpo-rate interests, was a driving forcebehind the Newsweek story.

When you consider that many of themajor corporations in this country arebeing investigated for fraudulent andillegal conduct of all kinds, it is shock-ing that those in power in Washingtonare attempting to protect the corporatewrongdoers instead of helping theirvictims. If the same effort went to regu-lation and enforcement that we arenow experiencing in the tort reformmovement, our country would be inmuch better shape. If that happened,there wouldnt be such a need in theU.S. for courts and juries.

Hundreds of millions of dollars arebeing spent by Corporate America todestroy the jury system. Manyobservers believe the tort reformerswill be successful because of theirdeep pocketbooks and the willingnessof politicians to take their money. Cor-porate wrongdoers such as Enron,Tyco, WorldCom, HealthSouth andmany more are most likely waiting withgreat anticipation for the courtsystems demise. Heaven help theaverage citizen in America if the courtsystem in this country is destroyed!

Public Citizen Speaks Out OnNewsweek Article Public Citizen has been on the front-

lines in the fight to preserve the jurysystem. I received the following releaselast month from the consumer groupand pass it on to our readers.This will

2 www.BeasleyAllen.com

Jere Beasley 3ATTORNEY AT LAW

CONSUMERREPORTwww.BeasleyAllen.com

give you a pretty good overview ofwhat was behind the recent assaultson peoples rights.

In a much-touted December 15cover story entitled Lawsuit Hell,Newsweek published a one-sideddiatribe masquerading as journal-ism. In what purported to be an in-depth look at what businessinterests have erroneously labeleda litigation crisis, the magazinewent well beyond advocacy jour-nalism to launch an unprece-dented crusade against consumersaccess to courts. Not content tosimply run a highly questionablearticle, Newsweek partnered withNBC for a week of broadcast tie-insand online chats.

Newsweek fell for myths and dis-tortions spread by a well-organizedcampaign funded by big businessto strip consumersbut not busi-nessesof their legal rights.Because of the articles glaring defi-ciencies, Public Citizen today sent aletter to the magazine calling onthe editors to review journalisticstandards.The article includes:

Many false and exaggerated exam-ples to present an unbalanced andnegative caricature of the legalsystem; major factual inaccuraciesabout the legal system and law-suits; and proposed solutions thathave no basis in experience. Manyof the examples Newsweek usedwere wild exaggerations or anec-dotes that never involved lawsuitsto begin with, and Public Citizenprovides a detailed critique ofthem. Many of the facts cited inthe article have been debunked byindependent sources such as theGeneral Accounting Office and theCongressional Budget Office.

The articles lead author, StuartTaylor Jr., is a former corporateattorney who admitted to Newsdaythat his writings are primarilycommentary. Further, when writingthe Newsweek piece, Taylor relied

heavily on a book by corporatedefense lawyer Philip K. Howard,adopting many of Howards faultyarguments.

A Victim Speaks OutThe following article was written by

Linda McDougal and is reprinted foryour information. This comes from alady who certainly has firsthandknowledge of the need for a strongcourt system and juries. It is difficultfor a person who hasnt walked in theshoes of a real victim to understandfully the need for the jury system. Ibelieve Ms. McDougals perspectivewill be worth your reading.

Taking away our legal rights isntreform. In cases like mine, the civiljustice system is our only hope. Likemost people, I never expected to beinvolved in a lawsuit. But then, inMay 2002, two doctors switchedthe pathology slides of my breastbiopsy with another womans. Fol-lowing my double mastectomy, thesurgeon told me I didnt havecancer.What a relief! The operationhad been a success. You dontunderstand, the surgeon explained.You never had cancer. And so Ibecame involved in a lawsuitagainst the hospital and the peoplewho wouldnt even own up to theirerror.

According to Lawsuit Hell,Newsweeks cover story on ourcivil-justice system last week, Iguess that makes me just anotherfreeloader looking to hit thejackpot. Id take offensebeingmaimed by someone elses negli-gence isnt winning the lotteryexcept that Im used to thesearticles. They all use the samewords to discredit the system andpeople who get some justice from it.Dont get mad, get even, someoneonce said. Im a wife, the mother ofthree sons and an accountant for asmall company in Wisconsin, so Im

busy. But Ive also made appear-ances around the country over thepast year, reminding people thatour jury system is the only hope anordinary citizen like me has whenshes been wronged.The system isntperfectwhat is? I assume somelawsuits really are frivolous, butour system has a lot of safeguardsagainst abuse. Just as I dont judgethe medical profession on the basisof the people whose errors changedmy life forever, I dont judge thejustice system on the basis of a fewbad cases. I judge it on the thou-sands of people throughout Ameri-can history who have gotten somemeasure of justice from a judge ora jury that they would never havegotten from an insurancecompany, an HMO or some vastconglomerate.

Ive read the experts who say weneed all kinds of limitations oninjured people and juries becauseinsurance companies and corpora-tions need predictability abouttheir potential liability.They wantpredictability? What about me?What happened to me was unpre-dictable. Im tough, I have a won-derful family, so dont feel sorry formebut dont ask me to feel sorryfor those companies, either.Some-times, the malpractice is egregious,Newsweek admits. But whos in thebest position to determine if a caseis egregious or frivolous? Thechoices seem to be a panel ofexperts of some sort, or a panel ofordinary citizensa jury. I dontapologize for trusting ordinary citi-zensour friends, neighbors andco-workers. The story mentions acase in Kentucky in which amother sued her daughters schoolafter the girl had performed oralsex on a boy during a school busride... The woman blamed pooradult supervision, saying herdaughter had been forced.


When the subject is tort reform, Ivelearned to pay close attention,because most of the cases that makethe rounds on the Internet and talkshows are urban legends, eithermisleading or flat-out false.A simpleInternet search told me that theboard of education had determinedthat the girl had been the victim ofa sexual assault. Prior to this con-clusion, the principal had sus-pended her for 10 days. After thisconclusion, she was suspendedagain, this time for not reportingthe assault. This was the last strawfor the mother, and why she filedher lawsuit. Among her demands:that the board set up training for itsemployees on dealing with sexualassaults. Ask any parent whetherthis was a reasonable response towhat happened.

Newsweek says people sue ministersfor failing to prevent suicides, but Ibelieve that every state court thathas considered the question ofclergy malpractice has rejected theclaims. You say volunteers of allsorts are supposedly worried aboutlawsuits, but I know that bothfederal and state laws prohibit suitsagainst volunteers. I think journal-isms obligation is to set the recordstraight, not spread misinformation.

Naturally Im drawn to the casementioned in the cover story aboutthe couples lawsuit against a hospi-tal for failing to prevent their childfrom becoming disabled by a rarebirth condition. I havent been ableto find details, but Ill bet that onesentence cannot do justice to thefacts hereor to the tragedy.You see,I know how tort-reform journalismworks. I know how these stories getwritten, and who writes them. I alsoknow whose interests are served.

Not mine in Wisconsin. Not thatgirls and that mothers in Kentucky.Not that California familys. I alsoknow that if all those who want torestrict the legal rights of ordinary

citizens have their way, I wouldnthave waited seven months for anapology from the doctors, which Igot only after my story becamepublic. I would have waited forever.

We Must Support Our TroopsThe capture of Saddam Hussein has

captured all of the media attentionlately and that is to be expected. Cer-tainly, that event was newsworthy andhighly significant. Even before that,however, most U.S. citizens were wellaware of what was really happening inIraq.As expected, we won the war inshort order and then the occupationphase began. The almost daily loss oflife has taken its toll back in thiscountry. Many communities in Alabamaknow firsthand what this war andoccupation is all about.This is becauseof the presence of many Alabamians inthat devastated country as a part of thewar and now with the occupationforce.Thus far, a tremendous number ofAlabamians have been called to activeduty with the prospect of more tocome.The Alabama National Guard iswell known in Army circles for theircompetence and training, and that mayaccount for the number of Alabamaunits having been called up. MajorGeneral Mark Bowen, the State AdjutantGeneral, has had nothing but praise forthe men and women who serve in theNational Guard.

Currently, there are over 2,000members of the Alabama NationalGuard assigned to the Persian Gulf.Weare told there will be additional call-upsin the near future.As I understand it, theAlabama units will each serve up to ayear in the Gulf.Our prayers are with allof the men and women serving ourcountry in the military and especiallythose from Alabama who are now in thePersian Gulf. While our main concernhas to be the troops who are in harmsway, we must not forget their familieswho were left behind.All deserve andmust have our full support.This is espe-cially needed during the holiday season.

May God bless and protect all who areinvolved directly or indirectly with ourmilitary efforts.

Alabama Senator Named To SCLC Post State Senator Charles Steele and the

Reverend Fred Shuttlesworth havebeen selected to serve as interimnational leaders of the Southern Christ-ian Leadership Conference. ReverendShuttlesworth, who was a leader in thecivil rights movement in Birminghamin the 1950s and 1960s, was namedinterim president and chief executiveofficer of the SCLC.The Atlanta-basedcivil rights organization was co-founded by the Rev. Martin Luther KingJr. Senator Steele (D-Tuscaloosa), theSCLC Alabama chapter president, wasnamed interim vice-president at anSCLC executive board meeting inDetroit. Without question, ReverendShuttlesworth, who now lives in Ohio,is one of the icons of the civil rightsmovement in this country. SenatorSteele, an outstanding member of theState Senate, has continued the battlefor equality and fairness in our state.His selection is a good one in myopinion.

II.LEGISLATIVE HAPPENINGS

The Upcoming SessionThe regular session of the Alabama

Legislature will begin in February. Fromall indications, it will be the toughest inmany years. In fact, I dont recall anyprior session that would even comeclose. Years of problems have beendumped in the collective laps of Gover-nor Riley and the members of the Leg-islature. Finding solutions to the fiscalproblems will be impossible withoutnew funding and that means moretaxes! We must fund state government



adequately or drastically cut services.The problems are real and the chal-lenges quite apparent. Unfortunately,the solutions will be hard to come by.

Legislative Leaders Predict New Tax Plan As the year 2003 closed out, legisla-

tive leaders were predicting that a newtax package will be presented whenthe Legislature meets in February.Needless to say, a great deal of workwill have to be done in advance of thesession if any tax proposal has a chanceof passage. We intend to somehowaddress the revenue shortfall, and wehope that will be in concert with theGovernor, House Speaker SethHammett told the Associated Press.Lieutenant Governor Lucy Baxley alsobelieves that some tax proposal will bepresented during the session.We donthave to be reminded, however, thatAlabama voters rejected the latest taxplan by a 2 to 1 margin in the Septem-ber 9th referendum.After that vote, theLegislature approved scaled-backbudgets for the current fiscal year thatstarted October 1st. Cuts of 10% to 18%for many non-education programs wereput into effect. Without a doubt, thepublic schools were hurt badly, withmany school systems being crippled.

It is now most clear that unless addi-tional revenues are made availablewhen the Legislature meets in Febru-ary, the state will be in for someextremely difficult times. The statesbleak financial picture and rising costsof health care and pensions will likelycause some state programs to be cut50%. Voters have intended they wantreform of state government, and I guessthat includes public education. Person-ally, I favor some of bothtax increasesand reform. I am convinced that peoplearound the state want reforms to comebefore any tax increases. It wont be agood time to be a member of the Legis-lature. But, it is a great time for realleaders with vision and courage toemerge. Governor Riley has shown he

has courage and is willing to lead. Henow needs lots of help.

Special Interest LegislationI predict there will be more special

interest legislation put in the hoppersof the House and Senate in the upcom-ing session than ever before.The lobby-ists are already licking their chops.There are currently over 500 paid lob-byists who have had more control inrecent years over the legislative processthan has the Governor.Thats a sad stateof affairs.Until we control the excessiveflow of campaign money, consumerswill never have the protection theybadly need and deserve. The newspa-pers write about all the so-called porkissues, but have really failed to getbehind any type legislative reformeffort, which necessarily would includecontrolling the powerful lobby groups.

Judge Dismisses Extortion Case Against State Senator On December 10th, a circuit court

judge threw out the extortion chargesagainst state Senator Roger Bedford,saying the state failed to prove the law-maker had made a threat to commis-sioners in Marion County.According toan Associated Press report, CircuitJudge Jerry White, a retired judge fromDothan, who was assigned to hear thecase, said, I dont think any crimeoccurred. Senator Bedford wasaccused of trying to get county com-missioners to buy land from a friend.Judge White dismissed the charges afterthe prosecution rested its case on thethird day of the trial.The judge said theprosecution had to show that Bedfordthreatened the commissioners and hadthe ability to carry it out. Based onmedia reports over the past severalmonths, it was quite clear that no crimi-nal offense had occurred. If there isntenough evidence to get a case to thejury, there simply isnt a case to startwith. Unfortunately, Senator Bedfordand his family had to go through

months of anguish before this chapterin their lives finally came to a conclu-sion.The Franklin County lawmaker isguilty of one offense, and that is herepresents the folks in his senatorialdistrict extremely well. Fortunately,thats not a crime. I have known RogerBedford for a number of years and Inever believed that he had violated anylaws. It now appears that I was right.

III.COURT WATCH

Selecting JurorsI am not sure who commissioned a

study that came up with some interest-ing advice for lawyers who representvictims on how to select jurors.A newguide apparently sanctioned by theAssociation of Trial Lawyers of Americaadvises trial lawyers to be wary ofAmericans with extreme attitudesabout personal responsibility whenselecting jurors in personal injury law-suits.The author of the guide says suchjurors typically espouse traditionalfamily values and often have strongreligious beliefs. I understand thatATLA named a former psychotherapistas co-chairman of a Blue Ribbon Com-mittee on Juror Bias. Frankly, I wasunaware that such a guide evenexisted.

I have probably tried as many casesas any lawyer in the country. Selectingjurors for my cases has never been easyand I have made my share of mistakes.It is always possible to make an error injudgment on potential jurors because aperson may not have disclosed anevent in his or her life that would influ-ence their thought processes.However,I learned long ago that 12 personssitting as a jury will reach the correctdecision in 98% of the cases. Of course,there will always be the chance for aresult that may not be considered acorrect one. Nevertheless, I trustpersons who serve on juries to try to


do the right thing in cases I handle.All good lawyers will try to determine

if there is any evidence of prejudice onthe part of potential jurors. However, Ihave never felt that jurors who havestrong religious beliefs are bad jurorsfor my clients. In fact, such jurors knowthe difference in right and wrong, andthats important regardless of the natureof the case. I have left many pastors andchurch leaders on my juries and havenever regretted a single decision. Isuspect each of those persons hadstrong religious beliefs. I believe it is agrave mistake for a lawyer to makesweeping generalizations about peopleof faith serving on juries. It concernsme that some trial lawyers may bemoving in that direction. Lawyers whorepresent victims should welcomepersons who have compassion for theless fortunate on their juries. My advicefor my fellow trial lawyers would be touse their own judgment and instinctsrather than relying on the ATLA guide inselecting jurors.

ExxonMobil Funds StudiesExxonMobil filed its post-verdict

motions in the States case on Decem-ber 17th.These motions are obviouslydesigned to reduce the $11.8 billionjury verdict returned in the case. Areporter from the Los Angeles Timescalled me several weeks ago and filledme in on some disturbing news. Itappears that the giant oil company hasbeen involved in some highly question-able activities designed to influencejudicial decisions in other states. Thefollowing is an article from the LosAngeles Times on this subject:

In the 1990s, Exxon began payingfor research into juries and thedamages they award. The findingshave served the firm well in court.In 1994, it was the biggest punitivedamages judgment in history: $5.3billion that an Alaskan federal juryawarded to fishermen and otherswhose livelihoods had been devas-tated by the Exxon Valdez oil tanker

spill. Three years later, as Exxonwaged its appeal, a new line ofresearch began to appear in severalrespected academic journals andIvy League law reviews. Some arti-cles challenged the competence ofjuries to fairly set punitivedamages.Others suggested that suchawards are ultimately bad forsociety. Exxon cited several of thearticles in the appeal. What it didnot say in court filings is that it hadfunded the research.

Companies frequently contract withprofessors to testify as expert wit-nesses in court, but Exxon went astep further. It hired at least nineesteemed psychologists, economistsand law and business school facultymembers, giving them researchfunding that most social scientistscan only dream about. Now, the 13papers they published several ofthem rewritten and reissued in abook that came out last year arepopping up in legal arguments inother punitive damages cases citedboth by companies defending them-selves and by judges issuing opin-ions. And they are ruffling thefeathers of competing professorswho dispute their conclusions andcomplain about the difficulty ofraising money for independentresearch.

The social sciences have long beenseen as low-stakes disciplines, freefrom the funding controversies thathave roiled the harder sciences. Butwith public money for socialscience research waning, universi-ties have not stood between profes-sors and the corporations willing tofund their work. Such arrange-ments have raised ethical debatesover whether academic researchersare becoming hired guns for indus-try. It is very troublesome thatwork published as scholarship isbeing vetted by lawyers for Exxon,said Richard Lempert, a law profes-sor at the University of Michigan

and a leading critic of the Exxon-sponsored studies.

It was designed to serve Exxon. Itwas not done because they wantedto know how juries behaved. TomCirigliano, a spokesman for ExxonMobil Corp. (formed in a 1999merger), said a better understand-ing of punitive damages not onlyhelps his employer which hedescribed as the target of a numberof suits that are just a matter of atrial attorney going after acompany with deep pocketsbutalso benefits everyone else in thiscountry. He said the company hadnot exerted any control over theconclusions of the studies. But theresearch that was ultimately pub-lished served Exxons interests.

Punitive damages have been bignews since the early 1990s. Somecases that attracted attentionseemed to spoof the U.S. legalsystemamong them the $2.7million that a court orderedMcDonalds to pay a customer whohad spilled hot coffee on herself (theaward was ultimately reduced).Others, such as massive damageawards against tobacco companies,affect many more people.

Earlier this month, an Alabamajury ruled that Exxon Mobil hadcheated the state out of natural gasroyalties and handed down averdict that included $11.8 billionin punitive damagesa judgmentthe company has vowed to appeal.Although most punitive damagecases are mundanetypically com-panies suing companiesindustryleaders live in fear of large awardsand often campaign against them.

The Exxon research has providedthem with ammunition.The first useof the research in court came in theExxon Valdez case itself.The accidentdumped 11 million gallons of crudeoil into Prince William Sound onMarch 24, 1989, and devastated the



local fishing industry. In its appealof the $5.3-billion verdict to the U.S.9th Circuit Court of Appeals in SanFrancisco, Exxonas well as indus-try groupscited several of theExxon-sponsored papers. With nomention that it had funded thework, the company argued thatthese articles present recent socialscience research demonstrating thatjurors are generally incapable ofperforming the tasks the law assignsto them in punitive damage cases.

Plaintiffs attorneys submitted acounter-brief dismissing the studiesas junk social science.Argumentsensued, stretching the appeal onand on. In 2001, the 9th Circuitruled in Exxons favor. The justicesreturned the case to the judge inAlaska federal court with an orderfor reduction of the penalty. Thejudge complied, lowering the awardto $4 billion, a figure that thecompany has continued to chal-lenge in court. The case remainsunresolved, though the Exxon-funded research apparently ishaving an effect, at least indirectly.

In a separate U.S. Supreme Courtcase involving State Farm Insur-ance, leading corporations filed abrief that repeatedly cited Exxon-funded research. The plaintiffs,backed by 21 academics, counteredwith a lengthy attack on the studies.In April, the High Court, which hasgenerally opposed large punitivedamage awards, overturned a$145-million judgment againstState Farm.

In light of that ruling, the 9thCircuit justices in February againreturned the Exxon case to thelower court to consider whether the$4-billion award still held uplegally. Thus, Exxon-funded studieshad been used in a separate casethat now was coming back to helpExxon. Judges have also used theresearch in their opinions.A searchof legal databases turned up 10

cases since 1999 in which judgeshave invoked studies funded byExxon.Random and freakish puni-tive awards have no place in federalcourt, and intellectual disciplineshould be maintained, a judge inIllinois wrote, citing one of the arti-cles in 2002.

In New York in 2003, a judge citedtwo of the articles in ordering a newtrial in a case in which Island DefJam Music Group had been orderedto pay $132 million in punitivedamages to TVT Records.The Exxon-funded research became the back-bone of Punitive Damages: HowJuries Decide, published last year bythe University of Chicago Press.Theauthors conclude that juries areerratic and unpredictable in award-ing punitive damages. Calling theExxon-funded book a path-break-ing multidisciplinary study, anotherjudge invoked it in a discussion of aclass-action suit against cigarettemakers, but ultimately decided to letthe case proceed.

Individual articles dont make adifference, said Theodore Eisenberg,a Cornell law professor who haswritten extensively about theExxon-funded work.But when thesame story is repeated over andoverjudges are part of society.Whatever shapes your beliefs willshape theirs.

The biggest public grants for mockjury studiesin which juries com-posed of paid research subjects arepresented with cases and observedwhile they make decisionscomefrom the National Science Founda-tion and top out at $250,000,enough for a 3,000-person experi-ment. The jury studies that Exxonfunded used more than 8,000 sub-jects. Exxon Mobil said in a writtenstatement that the cost of its studieswas a confidential matter, but aca-demics estimate the total bill atmore than $1 million.

Such investments have some schol-ars worried that industry will set theresearch agenda. Edith Greene, apsychology professor at the Univer-sity of Colorado and coauthor of thebook Determining Damages: ThePsychology of Jury Awards, pub-lished this year, suggested that someof the money Exxon had paid wouldhave been better spent on otherquestions:What sorts of technologycould help jurors in determiningpunitive damage awards? How dojudges influence decision-making?

No corporate bottom line ishanging out there waiting for theanswers to those questions, shesaid. The Exxon-funded professorsinsisted that they had retained intel-lectual control, although theyacknowledged that company offi-cials had commented on drafts,charted progress and coordinatedmeetings. All the papers acknowl-edge Exxon funding.

I want to be very clear here, saidJohn Payne, a business school pro-fessor at Duke University.We werethe ones who decided what thedesign would be, what the questionswould be, how it would be writtenup for the journals. He and othersnoted that some of the publishedwork had fallen short of Exxonshopes. For example, he said, thecompany probably would haveliked to demonstrate bias againstout-of-town defendants, but thedata did not support that. Cass Sun-stein at first refused to join theproject when a group of Exxon offi-cials visited the University ofChicago, where he is a law profes-sor. But he changed his mind after afellow researcher, Daniel Kahne-man, a Princeton psychology profes-sor who went on to win a NobelPrize in economics in 2002, per-suaded him that they could remainindependent.

Still, Sunstein refused to acceptmoney other than travel expenses.I


felt it was very important just forme personally to feel that theresearch was not affected by money,even though Exxon imposed norestrictions or strings, direct or indi-rect, he said. The others refused tosay how much they had earned.That is personal, said DavidSchkade, a business professor at theUniversity of Texas at Austin.

I dont keep tabs on that, said KipViscusi, a Harvard law professor,suggesting that some of the criti-cism stemmed from professionaljealousy.We can say we had com-plete freedom, and nobody believesus. His work also used fundingfrom Harvard Olin Center for Law,Economics and Business. Anotherresearcher, Reid Hastie, a Universityof Chicago psychology professor,combined Exxon funding with a$113,100 grant from the NationalScience Foundation.

About half of the work originallyappeared in peer-reviewed journals,meaning that articles were sent withthe authors names blacked out toanonymous reviewers who advisededitors on whether the work shouldbe published. Rich Wiener, editor ofLaw and Human Behavior, wherethree Exxon-funded articles werepublished, said those papers hadundergone exactly the same reviewprocess as all others. Reviewers, whowere informed of Exxons involve-ment, approved the papers, basedon the quality of the research andthe methodology, independent ofany funding source,he said.

The articles are the only ones in hisseven years as editor that werefunded by a corporation, he said. Inat least one case, Exxon cut offfunding for research that didntmatch its interests. In the summer of1996, William Freudenburg, then aprofessor of sociology at the Univer-sity of Wisconsin, received an offerfrom Exxon. In return for $240 anhour, Freudenburg agreed to write

an article about whether punitiveawards actually deterred badbehavior and thus reduced risks tosociety. He signed a contract givingthe company the rights to his workfor one year.

According to Freudenburg, acompany official told him thatExxon was specifically looking forarticles that could be used in courtto argue that punitive awards dontmake much sense. Freudenburg pre-sented a paper in August at theannual meeting of the AmericanSociological Assn. about his experi-ence. Although he did not nameExxon or its representative in thearticle, he confirmed their identitiesin an interview with The Times.

Last month, the Exxon contact heidentified, Terry Gardner, told TheTimes: I am not authorized tospeak about this project. Gardnerproved a valuable and friendlyresource, suggesting articles to readand sending books he deemeduseful, said Freudenburg, who keptGardner abreast of his progress. Inlate 1996, he sent Exxon a 19-pagedraft of a paper that he planned tosubmit to the journal Risk Analysis.It was not welcomed enthusiasti-cally, Freudenburg said.

The draft argued, in part, that fearsof punitive damage awards do notimprove public safety, an argumentthat suited Exxons appeal. But thethrust of the paper was that moreopenness in corporations is animportant way to reduce the likeli-hood of environmental disasters.That was a position Exxon did notwant to support, Freudenburg said.The contract, which had nettedFreudenburg maybe $10,000, wasterminated. In its written statement,Exxon Mobil did not disputeFreudenburgs version of events. Butthe statement said: While ExxonMobil had no interest in his paper,we at no time discouraged himfrom publishing it himself. Now a

professor at UC Santa Barbara,Freudenburg has yet to do so.As forhis experience with Exxon, he isphilosophical.They treated me verywell. But that doesnt make it anybetter for society.

My discussion with the reporter whowrote this excellent articleaftermonths of investigation and studycertainly got my attention.When I readhis article, I became greatly concerned.It appears that ExxonMobil believes itcan buy justice and manipulate thesystem. This type expos would sinkthe ship of most corporate wrongdo-ers. However, we know from experi-ence that this powerful and influentialcompany believes it is above the law. Itis good that this information is now inthe public domain. However, the mediain Alabama apparently have not seenthe Los Angeles Times story.

The Frivolous Lawsuit MythTort reformers have done a good job

of selling their message around thecountry that frivolous lawsuits arebeing filed in the courts on a dailybasis. In fact, the multi-million dollarpublic relations campaign financed bycorporate wrongdoers has done a mas-terful job of creating this frivolouslawsuit myth. It is interesting that a sig-nificant number of people now con-sider all lawsuits to be frivolous.Corporate defendants dont like gettingcaught when they harm people.Instead of accepting responsibility fortheir actions, the corporate bosses tryto shift blame to their victims. Corpo-rate America is not willing to admit itsguilt, regardless of what the evidencein a specific case happens to be. Underthe law, wrongdoers must be heldaccountable for their wrongdoing.

In Alabama there is a legal remedyavailable to any defendant who is suedin a frivolous lawsuit. While this law(the Litigation Accountability Act) hasbeen on the books for years, it is rarelyused. No lawyer would intentionally filea frivolous lawsuit since such a lawyer



and the client could be sued in returnby the defendant. I have to wonder whythe tort reformers dont let folks knowabout this law.As for frivolous lawsuits, Ialso wonder whether Karl Rove, thedesigner of the tort reform movementin this country, would consider alawsuit frivolous where a defectivevehicle maims or kills a member of hisfamily.Heaven forbid that ever happens.

Businesses Suing Businesses While all of the media attention in

recent months has been diverted to thelawsuits filed by consumers against cor-porate defendants, there is another sideto the story. Court statistics reveal thatlawsuits filed by businesses make up asignificant percentage of the number oflawsuits filed each year.The followinggives some interesting information onlawsuits filed by businesses.

Business cases account for 47% of allpunitive damage awards. In contrast,only 4.4% and 2% of punitive damageawards are due to product liabilityand medical malpractice cases,respectively (Rand Institute for CivilJustice,1996).

Cases in which businesses sue eachother over contracts comprisednearly half of all federal court casesfiled between 1985 and 1991 (TheWall Street Journal, 12/93).

Contract and property cases - mostinvolving business - comprise morethan one-third of all civil cases instate courts.

In comparison, only 0.21% of all civilcases were product liability claims(National Center for State Courts,1995).Maybe there are a few frivolous law-

suits being filed.Take a look at these:

In 1998, Kellogg Co. sued ExxonCorp., claiming that Exxons whimsi-cal tiger logo, which had been inexistence for over 30 years, wouldconfuse consumers who associatethe tiger logo with Kelloggs FrostedFlakes mascot, Tony the Tiger. A

federal judge in Memphis threw outthe suit, saying that Kellogg wasgrossly remiss in failing to assert itsrights sooner. This didnt stopKellogg, which further clogged thecourts by appealing the verdict tothe Sixth U.S. Circuit Court ofAppeals in Cincinnati. In its brief,Kellogg argued that the Exxon tiger,like Tony,walks or runs on his twohind legs and acts in a friendlymanner.

In 1998, Enterprise Rent-A-Car filedlawsuits against Rent-A-Wreck ofAmerica (a tiny rental company) andHertz Corp. and threatened to filelawsuits against several other car-rental companies who use the phrasepick you up, claiming that Wellpick you up is Enterprises slogan.While those suits were pending,Advantage Rent-a-Car counter-suedEnterprise, claiming that Advantagehad used the phrase Well pick youup long before Enterprise did. Enter-prise argued in its lawsuits that thephrase means more than Well giveyou a ride; it means Well pick upyour spirits. Competitors said thatthere was no other way to say Wellgive you a ride. Enterprise attorneyRudolph Telscher said that Welldecide in the courtroom who iscorrect here.

In November 1995, Hormel Foods,the maker of the luncheon meatSPAM, sued Jim Henson Productionsto stop the creator of the Muppetsfrom calling a character in a newmovie Spaam, claiming that the char-acter was unclean and grotesque andwould call into question the purityand quality of its meats. A federalcourt rejected Hormels claims, andHormel also lost on appeal.

Mattel, Inc., the maker of Barbie, iswaging an aggressive trademark waragainst unsanctioned use of theBarbie name, attacking the foundersof the Barbie Makes a Wishweekend that raises money for criti-cally ill children; artist Paul Hansen,sued for $1.2 billion for making

$2,000 from the sale of his ExorcistBarbie, Tonya Harding Barbie, andDrag Queen Barbie; and Mike Grove,who distributes Sizzler toy cars tosick and dying children. Mattel madealmost $4 billion in annual sales in1996, but has filed copyright andtrademark infringement suits againstall three toy enthusiasts.

In November 1995, PepsiCos Frito-Lay snacks division filed a lawsuitagainst Procter & Gamble over adver-tisements claiming that Procter &Gambles Pringles Right CrispsPotato chips are more nutritiousthan Frito-Lays Chips.

Coca-Cola, the producer of MinuteMaid orange juice, sued Procter &Gamble charging that ads for CitrusHill Select falsely claimed that thejuice was made from the heart ofthe orange.

In 1989 Walt Disney Company used alawsuit to force a public apologyfrom the Academy of Motion PictureArts and Sciences for an unflatter-ing representation of Snow White inthe opening sequence of the 1989Academy Awards ceremony.

In 1980 the manufacturers ofHaagen-Daz ice cream, in a suitagainst Frusen Gladje, tried to layclaim to the concept of premium icecream with a Scandinavian flair.

The Truth About The Civil Justice SystemSupporters of so-called tort reform

bills in Congress claim that there aretoo many lawsuits and that juries canno longer be trusted to render fair ver-dicts. These assertions are simply nottrue. This country doesnt need tortreform. Tort reform would take awayour systems ability to force wrongdo-ers to change their harmful conduct.Instead of reforming the courts, whatwe actually need is some meaningfulcorporate behavior reform.Tort claimsaccounted for only about 5% of all civilclaims filed in state courts in 1992,


according to data compiled by the non-partisan National Center for StateCourts (NCSC). Tort filings in statecourts actually declined 1% between1989 and 1998, according to an NCSCstudy of tort filings in 28 states.This isparticularly significant because over95% of all tort cases are filed in statecourts, and states populationsincreased between 1989 and 1998. In astudy of 16 states, NCSC found that thenumber of tort filings decreased 16%between 1996 and 1998.

About 6,000 deaths and millions ofinjuries are prevented each year becauseof the deterrent effect of products liabil-ity, according to the Consumer Federa-tion of America.A Rand study estimatedthat medical spending for the treatmentof injuries cost the U.S. economy nearly$154 billion in 1997, which is just about20% of the nations health care bill. Lostwork time adds another $100 billion.The National Safety Council estimatesthat accident costs totaled $480.5 billionin 1998. Without the jury systemsinvolvement, Corporate America wouldnot have implemented some of thesafety programs and changes that wehave seen over the years. Lets considersome of the things that have been donebecause of the availability of the jurysystem. For example, today, flammablechildrens pajamas have been taken offthe market, defectively designed cribsno longer strangle infants, medicaldevices that were once harmful havebeen redesigned, automobile fuelsystems have been redesigned andstrengthened, and farm machinery arefitted with safety guards.The tort reform-ers, who are determined to destroy ourcivil justice system, blame tort cases forclogging our courts and driving upcosts. However, they cant back up theirclaims with real facts.Tort reform limitsthe rights of individuals to hold wrong-doers accountable, while allowing corporate wrongdoers to avoid account-ability. It is a classic example of the richand powerful using their influence torun roughshod over ordinary folks.

Appellate MediationMany people still dont know the dif-

ference between arbitration and media-tion. Simply put, arbitration is bindingand mediation is not. Arbitration isunfair, while mediation is fair to allparties.While arbitration doesnt workfor consumers, mediation can in mostcases. Beginning January 2004,Alabamawill have an official mediation programat the Supreme Court of Alabama andthe Alabama Court of Civil Appeals.There can be many advantages to amediated settlement at the appellatelevel. Obviously, parties to litigation canend their case if mediation results in asettlement. The closure in mediationmeans that the underlying lawsuit isover. Because parties to mediation arenot confined to legal remedies, some-times that can lead to cases settling thatotherwise would not. For example, it ispossible to include provisions in a set-tlement that couldnt be put in a jurysverdict.Also, mediation can sometimeshelp to heal the wounds that can resultfrom litigation. Mediation at the appel-late level can avoid unfavorable prece-dent from an appellate court that maybe used in a later proceeding of thesame or similar cases. Often, thatappeals to defendants.

The Supreme Court Standing Com-mittee on Appellate Mediation, chairedby Justice Champ Lyons, Jr., beganmeeting in May 2003, and has workedto develop a mediation program forboth courts. Members of the commit-tee include Justice R. BernardHarwood, Justice Thomas A. Woodall,Judge Sharon G.Yates, Judith M.Keegan,and Rhonda P. Chambers. On July 17,2003, the Supreme Court of Alabamaadopted Rule 55, Alabama Rules ofAppellate Procedure. This rule estab-lishes a confidential mediation programat the appellate level. Rules for theprogram were completed last month,and at press time it appeared that theprogram will begin this month. If so,that is good. Alabama mediators whohave elected to participate as appellate

mediators were trained in a one-dayseminar.The training was hosted by theAlabama Center for Dispute Resolutionat the ASB. For the entire text of theRule and the Court Comment to theRule, you can go to www.alabar.org.

U.S. Supreme Court Dodges Gun Rights CaseThe U.S. Supreme Court disap-

pointed gun owner groups last monthwhen it refused to consider whetherthe Constitution guarantees people apersonal right to own a gun. Many citi-zens dont realize that the High Courthas never said whether the right tokeep and bear armsapplies to individ-uals. It is my opinion that it should.Interestingly, the Bush Administrationdid not encourage the justices toresolve the issue in a case involving achallenge of California laws banninghigh-powered weapons. However,many groups, including the NationalRife Association, encouraged the Courtto take the case.Timothy Rieger, Califor-nias Deputy Attorney General, said incourt filings the case involved regula-tions on rapid-fire rifles and pistolsthat have been used on Californiasschool grounds to kill children. Theargument on the other side was thatcitizens need the Second Amendmentfor protection of their families, homesand businesses.

For the uninformed, the SecondAmendment reads: A well regulatedmilitia being necessary to the securityof a free state, the right of the people tokeep and bear arms shall not beinfringed.A panel of the U.S. Court ofAppeals for the Ninth Circuit had saidthe amendments intent was to protectgun rights of militias, not individuals.However, another appeals court inNew Orleans had ruled that individualshave a constitutional right to guns.TheU.S. Supreme Court refused, withoutcomment, to review the 9th Circuitdecision. I learned years ago that onecant always predict whether or not theU.S. Supreme Court will accept a case



for review. So, from a legal standpoint, Idont know exactly where individualcitizens now stand.

The California law is said to be amodel for legislation pending in Con-gress designed to renew andstrengthen the 1994 federal assaultweapons ban. For your information, theSupreme Courts last major gun casewas in 1939, when justices upheld afederal law prohibiting the interstatetransport of sawed-off shotguns. Manybelieve that the High Court shoulddecide once and for all what protec-tions gun owners have. I agree andhope that when it comes, the decisionwill allow protection for individual gunowners.

IV.THE NATIONALSCENE

Halliburton InfluenceThe mounting death toll in Iraq is

causing a great deal of concern in thiscountry. Obviously, this has to be ourprimary concern. However, the Ameri-can people also have to be greatly con-cerned over the financial cost of theoccupation and rebuilding of Iraq.Withall of the economic problems backhome, it is distressing that corporatebosses would cheat the governmentduring such trying times. For example,it is shocking that Halliburton Corp.hasapparently overcharged the Army by asmuch as $63 million for gasoline inIraq. Kellogg, Brown & Root, the Hal-liburton subsidiary involved in Iraqreconstruction work, submitted a pro-posal for cafeteria services that ran $67million too high. Fortunately, the Penta-gon has rejected that proposal. It is sig-nificant that Defense Departmentofficials labeled the problems with Hal-liburton as being stupid mistakes.Thefact that Vice President Dick Cheneycame out of Halliburton to be VicePresident may have very little to do

with Halliburtons actions. I hope thatis the case. However, the appearance ofimpropriety, even though it may besimply perception, cannot be justifiedby any standard.

Many persons believe that the Hal-liburton contracts were nothing morethan political payoffs for a companywith strong ties to the GOP. It is well-documented that Halliburton execu-tives made generous campaigncontributions to the Bush campaign in2000. It is significant that the KBR con-tracts were awarded without competi-tive bidding and amounted toapproximately $15.6 billion to rebuildIraqs oil infrastructure and assist U.S.troops in Iraq.

Even President Bush has had toacknowledge that he believes Hallibur-ton overcharged the Pentagon in Iraqand that the company should repay theovercharges. Preliminary findings by aPentagon auditthat Halliburton mayhave overcharged the Army for gaso-lineare proof that the Bush Adminis-tration has given favorable treatment toits friends and supporters. The auditfound that Halliburton,of which Cheneywas chief executive before becomingBushs running mate, may have over-charged the Army by $1.09 per gallonon nearly 57 million gallons of gasolinedelivered to citizens in Iraq by buyingfrom Kuwait instead of Turkey. Thecharges were part of another no-bidcontract Halliburton received to rebuildthe Iraqi oil industry.

The New Medicare LawThe fight over adding a prescription

drug benefit to the Medicare programhas been going on for the past severalyears. Now, a bill has passed. It mightdo well to look at the historical pictureof Medicare. Most American citizenshave become accustomed to havingMedicare benefits available whenneeded.The bill that created Medicarewas signed into law by PresidentLyndon Johnson on July 30, 1965. Presi-dent Johnson told the American

people,No longer will older Americansbe denied the healing miracle ofmodern medicine. Clearly, Medicarewas a desperately needed program andit grew rapidly to be a popular one.Weshould all recall that conservativeswere outraged that the Democratswere able to obtain passage of whatthe Republicans considered a socialis-ticprogram.President Truman had pro-posed a health care program for theelderly back in the 1940s and it wentnowhere. President Kennedy rekindledthe fire in the early 1960s with a likeresult. It took the skills of PresidentLyndon B. Johnson, with his legislativegenius and his enormous mandate fromthe 1964 presidential election, to bringthe program into being. History willrecord, however, that there was strongopposition and that creating theprogram wasnt easy. For example,Ronald Reagan, according to a book onJohnsons life, saw Medicare as theadvance wave of socialism, whichwould invade every area of freedom inthis country. Reagan, according to thebook,predicted that Medicare wouldcompel Americans to spend their`sunset years telling our children andour childrens children what it was likein America when men were free.

The vocal opposition to Medicare bya good number of right-wingers contin-ued. For example, Newt Gingrich in the1990s compared its operations to cen-tralized command bureaucracies inMoscow. And George W. Bush tried tofashion a prescription drug benefit thatwould require senior citizens to leavethe traditional Medicare programbefore they could get the benefit.Without question, Medicare has signifi-cantly improved the health and eco-nomic conditions of the nationselderly.The unrelenting hostility to theprogram appeared to be a Republicanobsession. Now President Bush hassigned into law a prescription drugbenefit under Medicare that runs con-trary to the GOPs long dream of dis-mantling Medicare. In fact, it makes thePresident a left-wing liberal to a


number of Republican leaders.Remember, Republicans, who have

been hostile to Medicare, now controlthe presidency and both Houses ofCongress. It now appears that the billsigned by President Bush may actuallybe a giant windfall for the drug compa-nies. It opens up a huge new marketwith virtually no effort to restrainprices. It will give Medicare recipients amodest drug benefit, but at a poten-tially tremendous cost. Many believethis bill starts the process of undermin-ing Medicare by turning parts of it overto insurance companies, HMOs andother private contractors.

The drug benefit will be deliveredalmost entirely through private insur-ance plans. It would have been moreefficient and cheaper to deliver it thesame way other Medicare benefits aredelivered. Unfortunately, thats not theway it will work.The Bush Administra-tion will deliver tremendous sums ofgovernment money, which obviouslycomes from taxpayers, over to thespecial interests. It shouldnt have beena surprise when drug company stockprices went through the roof withpassage of the Medicare bill. Folksshould be shocked to learn that the billspecifically prohibits the governmentfrom negotiating discounts or lowerdrug prices. It also bars the importationof cheaper drugs from foreign coun-tries, including Canada.The demonstra-tion project, which will begin in 2010,will pit Medicare against private, profit-making health plans.The private planswill be heavily subsidized by Medicaremoney and will be able to cherry-pickthe healthiest patients. That, amongother things, will make it somethingless than real competition. While thebill clearly represents the biggest over-haul in Medicare history, it appears thatthe terrific cost could well be itsundoing. I predict that once peoplearound the countryespecially seniorsfind out what the new law really is,they wont be too happy.

Alabama Seniors Skeptical About Medicare Bill It appears that few U.S. citizens now

favor the Bush Medicare plan. InAlabama, the findings from a recentpoll conducted by the Mobile Regis-ter/University of South Alabama are fol-lowing the national trend. Fewer thanone in six Alabama seniors completelysupport the Bush Medicare prescrip-tion drug benefit approved by Con-gress. More than half have somereservations, according to the poll.Among those under 40, the fullapproval rate was 19%, according tothe poll. For those 60 and older, thefigure dropped to 9%. Overall thesurvey found 15% approve of the newMedicare law without reservations,45%approve of it with some reservations,12% disapprove and 28% dont knowor had no answer.The poll of 418 adultresidents had a margin of error 5 per-centage points.

The results roughly parallel the find-ings of a national poll taken last monthas the Medicare bill neared finalapproval.That poll, conducted by theUniversity of Pennsylvanias NationalAnnenberg Election Survey, found thatopposition to the measure ranstrongest among those age 65 or older.People who are now on Medicare aresuspicious of change, according to thesurveys political director. It appearsthat the seniors have a system they arepretty satisfied with. As a result, theyare less interested in taking a chanceon something like the Bush plan.

Although the prescription drugbenefit has drawn the most attention,the bill also would increase reimburse-ments for rural hospitals and makechanges designed to foster competitionamong insurers and slow the steadilyclimbing expenses. Some Republicansin Congress voted against the positionof their party leaders because of con-cerns that the estimated $395 billioncost over 10 years was too much.Several Democrats objected that thecoverage did not go far enough and

that privatization measures would domore to help companies than patients.Although Medicare recipients canbegin getting government-sponsoreddrug discounts next year, the actualprescription benefit program does notkick in until 2006 and even then it willnot provide full coverage.

AARP May Have Reason To Be ConcernedAARPs decision to support the cor-

porate friendly Medicare bill at theexpense of seniors has had someserious repercussions. I understand thatabout 20,000 members have told theorganization to cancel their member-ship because of the endorsement. Obvi-ously, AARP is really worried by themembership reaction since that coulderode its position as spokesman forseniors. Obviously, this powerful grouphas already received a huge amount ofnegative press. In fact, the early read-ings on the bill from seniors haventbeen encouraging at all for AARP.Instead of fighting to amend the legisla-tion to reflect concerns of seniors,AARP used its resources for a publicrelations campaign to try to talk seniorsinto believing the legislation isntharmful. Since the bills passage, eachmember of AARP received a two-pageletter in an attempt to justify thegroups position.

Many believe that several million ofthe nations poorest elderly and dis-abled beneficiaries will be made worseoff by the new legislation. This isbecause they will have to pay more fordrugs than they currently pay underMedicaid.They will also be denied cov-erage for some drugs they currentlyreceive through Medicaid. For moreinformation on the Medicare bill gener-ally, see www.AmericanProgress.org.

Bush Retracting Steel Tariffs EarlyPresident Bush has fallen under

tremendous political pressure to followthe wishes of the World Trade Organiza-



tion.We have witnessed the leader ofthe worlds most powerful countrybeing forced to reverse his policy andeliminate steel tariffs. U.S. trade safe-guard laws apparently dont amount tovery much. The rollback of the steelsafeguards may serve as a wake-up callto Congress about the WTOs erosionof democratic decision-making.WhenCongress approved U.S. accession tothe WTO, U.S. trade safeguard laws hadto be rewritten to conform to theWTOs terms. The changes - mainlyregarding timelines and the damage cal-culations rather than substantiverequirements for initial determinations- were extremely controversial withmanufacturing and agricultural inter-ests, as well as with many members ofCongress who were otherwise support-ive of the WTO. President Bush had anopportunity to stand up for the superi-ority of U.S. law over WTO dictates.TheEuropean Union has refused to imple-ment a WTO ruling that Europeancountries must accept imports of beefgrown with artificial hormones. Unfor-tunately, for obvious political reasons,the White House, unlike the EU, bowedto the power of the WTO. I suspect thePresidents action will be debated thor-oughly in this years election.

Donors To Bush Appear To Do WellAs we have previously reported,most

of the campaign funds collected byPresident Bush come from a group thePresident and his merry men refer to asRangers and Pioneers.Whats importantto know is that each of these raises atleast $100,000 for the Bush campaign.Most of these Rangers and Pioneershave big business before the govern-ment. They include stockbrokers andbankers on Wall Street who got theirdividend tax cut worth hundreds of bil-lions.You will also find executives fromdrug companies that were spared pricecuts under the Medicare bill. Energycompany chieftains who got subsidies,tax breaks and other goodies in the

energy bill are also on the rolls.In return for campaign cash, the

Rangers and Pioneers may expect to getback a handout from the government.The electric utilities have hit pay dirt asa result of their contacts with the BushAdministration. Back in 1999, the utili-ties started getting sued by the EPAunder the Clean Air Act for not puttingpollution controls on their old coal-firedplants that put out tons of toxins.Theutility bosses figured out how to stopthe lawsuits that could cost single com-panies hundreds of millions of dollars inpollution controls. All they had to dowas make a small investment to electGeorge Bush president. It has beenreported that their Pioneers and lobby-ists raised nearly $5 million for the Bushcampaign apparatus in 2000.

What did they get in return? It maynot be a coincidence that their leaderswere appointed to the Bush EnergyDepartments transition team.Vice Pres-ident Cheneys secret energy task forcethen recommended the changes theywanted to the Clean Air Act, to elimi-nate the requirement that such pollu-tion controls be added.Their lobbyistswere conveniently installed at the EPAto make it happen.The only way to getpolluters money out of presidentialelections is to overhaul the presidentialpublic financing system. It is time forpublic financing of campaignsratherthan campaigns fueled by interestgroup moneybut dont hold yourbreath waiting for this to happen.

Bush Rewards Generous GOP Donor Recently, President Bush made two

interesting stops in Maryland.The firststop was an exclusive, big-ticketfundraiser in Baltimore, where the Pres-ident added a few more million dollarsto his already massive campaign warchest. His next was to deliver a speechon the economy to workers at a HomeDepot.You probably are asking, whatdid the President need at the store?That was the question posed by the

media in Maryland. Research by PublicCitizen suggests the presidents visitwas yet another way to reward thenations second-largest retailer for itsgenerosity to the Bush campaign.Home Depot employees and their fami-lies have given $1.5 million to the GOPsince 1999, according to data providedto Public Citizen by the Center forResponsive Politics. During that time,no candidate has benefited from HomeDepots largesse more than Bush.Thetotal includes $907,950 in mostly softmoney donations to the RepublicanNational Committee before such givingwas outlawed by the Bipartisan Cam-paign Reform Act. So far this year,HomeDepot employees and the companypolitical action committee have con-tributed $31,000 to the 2004 Bush-Cheney re-election campaign. FrankClemente, director of Public CitizensCongress Watch, made this observation:Every time Bush has a fundraiser, healso schedules a purportedly publicevent to pass the cost onto the taxpay-ers. These carefully staged perform-ances before a captive audience ofworkers are a sham.The president hasmanaged to turn policy pronounce-ments into free PR for his most gener-ous political supporters. It is prettyclear that campaign contributions havehelped cement a close working rela-tionship between Home Depot and theBush Administration.

By the way, I have to wonder whoput the language in the massive energybill that would lift a tariff on Chinese-made ceiling fans sold by Home Depot.The new language was inserted onpage 710 during the closed-door con-ference committee meeting eventhough it had never been debated byeither branch of Congress.According toestimates by the Joint Committee onTaxation, suspension of the tariffswould cost the U.S. Treasury $48million over five years. Home DepotCEO Robert Nardelli made the trip upto Maryland from Atlanta to appearalongside the President. According tointernal documents uncovered by The


Wall Street Journal in 2001, HomeDepot secretly gave $1 million to theInstitute for Legal Reform, an arm ofthe U.S. Chamber of Commerce, to buyads aimed at electing business-friendlyjudges. If you would like to see howclosely the Bush Administration is tiedto Home Depot, go to Public Citizenswebsite:www.citizen.org.

Polluters And Influence PeddlersIn VirginiaThere was another meeting that is

worth mentioning concerning the Pres-idents travels. Environmental andpublic interest groups gathered lastmonth near the site of an exclusivenorthern Virginia fundraiser to protestPresident Bushs practice of payingback his biggest contributors withweakened environmental regulations,pork-barrel projects and choice presi-dential appointments. The $2,000-a-plate luncheon in McLean was the 43rdand final fundraiser headlined by Bushfor 2003. The Bush-Cheney campaignexceeded the $111 million mark for aprimary contest in which the presidentis running unopposed.The Bush cam-paign has averaged about $5 million aweek in contributions. The campaignhas held 91 publicized events head-lined by President Bush,Vice PresidentCheney, or First Lady Laura Bush sinceJune. In a news release, FrankClemente, director of Public CitizensCongress Watch, stated: In exchangefor millions in campaign cash, the BushAdministration has rewarded its rain-makers with environmentally destruc-tive policies that include a radicalalteration of clean air laws and a pork-laden energy bill filled with billions inhandouts to polluters. For more infor-mation on the amounts and sources ofthe campaigns fundraising activities, goto WhiteHouseForSale.org, a Web sitecreated by Public Citizen.

Marriott Settles Claim For $370Million

Host Marriott Corp., the owner of theNew York Marriott World Trade Center

hotel, destroyed in the September 11thattacks, has settled its claim with itsinsurers.The corporation will receiveapproximately $370 million in net set-tlement proceeds. In conjunction withthe agreement the company also sur-rendered the WTC site and terminatedits ground lease rights, thus eliminatingone more potential legal wrangle thatcould delay reconstruction of the WTC.While Marriott is now free of any obli-gation to rebuild on the site, it has inexchange been given a right of firstrefusal, good for 20 years, to develop ahotel on the site.

A subsidiary, Marriott International,Inc., had already received a $36.25million payment from the propertyinsurer for the New York MarriottWorld Trade Center hotel. It indicatedthe amount had been paid in connec-tion with the loss of the hotel and thesettlement of all outstanding mattersrelated to the events of September 11,2001. It is significant that Marriottssettlement brought good news toinvestors in the company.The companylowered projected loss forecasts andenabled the company to pay a fourthquarter dividend that it had indicated itplanned to skip.

V.CONGRESSIONALUPDATE

Looking Back At 2003Fortunately, for most American citi-

zens, the First Session of the 108th U.S.Congress is now over. After acting onthe omnibus appropriations bill, whichwas pushed through by the Republi-cans, Congress adjourned in Decemberand will start back up when the SecondSession convenes on the 20th of thismonth.The past year in Congress hastested the endurance of those whoworked long and hard to protect U.S.consumers.There were numerous care-fully planned attacks by the tort

reformers on the civil justice system.Most of them were launched from theWhite House and sent to Capitol Hill.Following the elections of last Novem-ber, the Republican leaders of bothHouses of Congress, as well as the Pres-ident of the United States, were totallycommitted to dismantling civil justiceand taking away the legal rights ofAmerican families.While most of theirmeasures failed to pass, I suspect wehave just seen the tip of the iceberg.Fortunately, there were enoughmembers of Congress willing to stopthe anti-consumer onslaught during2003. However, asbestos, class actions,firearms liability, product and medicalliability, and federal auto no-fault will beon Congress agenda in 2004.

Without question, there will be anincreasing number of anti-consumerbills on Congress agenda this year.Aswe all know, 2004 is an election year.Generally, this can be bad news for con-sumers. Clearly, it heightens the alreadypartisan tone in Washington. We havealready seen the early shelling fromthe tort reformers and now await thelanding of their well-financed tortreform troops.The fight has just begun!I have stated on numerous occasionsthat Common Good, the newly formedtort reform group, is nothing butanother stalking horse for CorporateAmerica.They are actively engaged inthe early shelling. Perhaps a look atCommon Goods mission statement,which reads as follows, will give ussome insight into their real mission:

Common Good has started the revo-lution to overhaul Americaslawsuit culture.The fear of litigationhas undermined our freedom tomake sensible decisions. Doctors,teachers, even little league coachesfind their daily decisions hamperedby legal fear. Our system of justice,long Americas greatest pride, isnow a tool for extortion, notbalance.

This tells us clearly that victims ofcorporate wrongdoing and consumergroups had best buckle their chinstraps



because this session of Congress isgoing to be a tough fight for consumergroups.Those of us who represent thevictims and their families have an obli-gation to remain involved in this fight. Ican only speak for one trial lawyer.Regardless of the odds, I will never giveup the fight to save the jury system.

VI.CAMPAIGNFINANCE REFORM

Campaign Finance Reforms UpheldNow that the election year is here, I

believe the need for completing thereform of our campaign spending lawsis more urgent than ever before. Fortu-nately, the recent decision by the U.S.Supreme Court concerning the consti-tutionality of the McCain-Feingold cam-paign finance reform law now gives ussome hope that things may get better.Asharply divided Court upheld key fea-tures of the nations new law intendedto lessen the influence of money inpolitics. The Courts ruling came lastmonth and says the government mayban unlimited donations to politicalparties and restrict some TV and radioissue ads right before elections.Thosedonations, called soft money, hadbecome a mainstay of modern politicalcampaigns, used to rally voters to thepolls and to pay for sharply worded tel-evision ads. It is now clear that Con-gress may regulate campaign money toprevent the real or perceived corrup-tion of political candidates. That goaland most of the rules Congress draftedto meet it outweigh limits on the freespeech of candidates and others in pol-itics, a majority of the Court said.

The Court also upheld restrictions onpolitical ads in the weeks before anelection. The television and radio adsoften feature harsh attacks by onepolitician against another or by groupsrunning commercials against candi-dates. Clearly, the decision is a major

victory for American democracy.Whilethe new law wont stop all forms ofabuse in the system, it is certainly astep in the right direction.At the sametime,however, the High Court acknowl-edged that the 2002 law wont stop theflow of money in politics. I hope it isthe beginning of a serious effort to stopspecial interest groups from control-ling the national political parties andunderwriting federal campaigns bywriting unlimited checks.

The Flow Of Big MoneyAs pointed out, clearly the new law

has not stopped the flow of big money.However, it has changed its course andthat is important. In the months sincethe law took effect, several partisaninterest groups have been created tocollect corporate, union and unlimitedindividual donations to try to influencenext years elections. Supporters of thenew law said the donations from cor-porations, unions and wealthy individu-als capitalized on a loophole in theexisting Watergate-era campaign moneysystem. For those who may not befamiliar with campaign funding, softmoney is a catchall term for moneythat is not subject to federal limits onhow much individuals may give. It isoutside the old law prohibiting corpo-rations and labor unions from makingdirect campaign donations. Federalelection regulators had allowed softmoney donations outside those restric-tions so long as the money went to payfor get-out-the-vote activities and otherparty building programs run by theparties. For example, the Democraticcommittees raised about $246 millionin soft money in the last election cycle,compared with $250 million for theRepublicans.

The Supreme Court decision men-tioned above marked the Courts mostdetailed look in a generation at thecomplicated relationships among thosewho give and receive campaign cash.The case also presented a basic ques-tion about the wisdom of the govern-

ments policing political give-and-take.The Court has now given governmentan extensive role in the area on theground that there is a fundamentalnational interest in rooting out corrup-tion or even the appearance of it.Thatconcern justifies limits on the freedomof speech. Personally, I believe theCourts decision is a tremendousvictory for people in this country. It is avindication of a decade of work byreform groups and key members ofCongress who fought for its passage.The decision helps ensure the removalof the corrupting influence of softmoney from federal elections so thatcorporations and labor unions, as wellas wealthy donors, will no longer beable to buy influence and accessthrough our national political parties.

The High Courts decision will limitthe influence of special interests in ourelections.The raising of soft money andthe broadcasting of sham issue ads wasdefinitely on the increase. The lawpassed by Congress was the broadestreform since 1974, when PresidentFord signed a law creating the FederalElection Commission in the wake ofthe Watergate scandal. It limited indi-vidual and political action committeecontributions to candidates to $1,000and $5,000 per election, respectively.That effort turned out to be an ineffec-tive method of controlling spending infederal elections. Soft money donationswere not included in the law, and theparties exploited the loophole. Had theCourt failed to uphold this law, politi-cians and parties would have beenfurther indebted to special interestgroups.There is now hope that we canstop the erosion of our democracy.Now Congress needs to complete itswork and do it during the early part ofthis Congress. Groups such as PublicCitizen will have to remain on guard tobe sure that its most corrosive influ-ences on the political process arebrought to the publics attention andthat Congress remains ever vigilant insafeguarding our democracy and theelectoral process.


VII.THE CORPORATEWORLD

Medicare Overpayment RateI was shocked to learn that the

Inspector General of the Departmentof Health and Human Services hasstopped reporting the amount it isoverpaying doctors, hospitals, andother healthcare providers forMedicare. The Government Manage-ment Reform Act of 1994 requires anindependent audit of all major publicpayment programs.That audit has beenconducted since 1997 by the InspectorGeneral. In 1997, the Inspector Generalput the fee-for-service error rate at 14%.This was the equivalent of $23.2 billionin Medicare overpayments.That reportcreated a public uproar when it waspublished in major newspapersthroughout the country.

It is extremely interesting that earlierthis year the Inspector Generals officesaid it would no longer be publishingthe error rate. What good is an inde-pendent audit if the information is notmade public? It is even more shockingthat the Inspector General will leave itto the Centers for Medicare and Medic-aid Services to determine its own errorrate. It is estimated that healthcarefraud costswhile undeterminedcould be has high as 30 to 40% of allhealthcare expenditures. If so, thiswould amount to hundreds of billionsof dollars. If you would like additionalinformation on this, I suggest that yousee License to Steal: Why FraudPlagues Americas Health Care System(Westview, 2000).This was authored byMalcolm Sparrow, a professor at theKennedy School of Government atHarvard University.

False Claims Act SettlementsA recent report released by Corpo-

rate Crime Reporter contains some

rather interesting and significant infor-mation. The report ranks the top 100False Claims Act settlements by amountof the settlement. The top 10 settle-ments ranged from a high of $731million in a December 2000 settlementwith HCA, the healthcare giant, run bythe family of U.S. Senate MajorityLeader Bill Frist (R-TN), to a $13 millionsettlement with each of three compa-nies tied for the 100th spot. The quitam provisions of the False Claims Actallow private individuals to sue compa-nies that defraud the federal govern-ment and recover damages andpenalties on the governments behalf.Whistleblowers are entitled to 15 to25% of the funds the governmentrecovers as a result of the lawsuit whenthe government joins the case.

Fifty-six of the top 100 false claimssettlements were with healthcare cor-porations.Twenty-three were defensecontractors. The top 10 recoveriesbrought in a total of $8.2 billionwhich is more than 65% of the $12billion recovered in total under theFalse Claims Act since it was amendedin 1986.The second largest settlementwas also with HCA for $631 million inJune 2003. Rounding out the top fivesettlements were:

TAP Pharmaceuticals - $559 million

Abbott Labs - $400 million

Fresenius Medical Care - $385 million

A Champion For ConsumersNew Yorks Attorney General is prob-

ably not getting invited to many Christ-mas parties sponsored by the bosses inCorporate America.At a time of broadskepticism and disenchantment withgovernments ability to regulateAmericas economic giants, EliotSpitzer has become a modern-day cru-sader for the common man. As NewYorks Attorney General, he is nowshaking the foundations of the $7 tril-lion mutual fund industry with a teamof 15 lawyers.The Spitzer team pales incomparison with the legions of federal

regulators and prosecutors who havebeen driven by his revelations toconfess their failure to adequately regu-late fund trading.The 6-month probe byGeneral Spitzer has uncovered signifi-cant problems among the countrysbiggest and best-known fund families.Since the investigation began, Spitzersoffice has brought three criminal casesand has won two felony pleas.The still-unfolding mutual fund probe is just thelatest in a series of regulatory triumphsfor the 44-year-old prosecutor.

With a small team of lawyers, GeneralSpitzer has gone after General ElectricCo. for polluting the Hudson River, suedpower companies in the Midwest forcausing acid rain, and taken on armiesof Korean grocers for not payingminimum wage. Last year, he shook upWall Street when he uncovered corrup-tion involving stock analysts and thepowerful investment banking firmsthey work for. His investigation led tosweeping changes in the way analystsdo their jobs and forced the nationslargest investment firms, includingMerrill Lynch & Co., Morgan Stanleyand Citigroup Inc., to pay more than abillion dollars in fines in a settlementagreed to in April.

Regardless, there is little doubt thatthe New York Attorney General hasdone more to address corrupt financialpractices than any other official orinstitution in the country. Protectinginvestors from malfeasance and out-right robbery is a noble cause in myopinion.The Attorney General says hismotivation is straightforwardtopunish wrongdoers and help smallinvestorsespecially when no one elseis doing it.Fortunately,his investigationis just cranking up. He says there willbe more criminal cases. Without adoubt, General Spitzers quest to cleanup Wall Street has made him famous. Isay,more power to him!

Front Groups CreatedApparently, the chemical industry is

planning to conduct a covert campaign



attacking the growing movement inCalifornia for more chemical safetytesting.Tactics include the creation ofphony front groups and spying onactivists.This is according to an internalAmerican Chemistry Council memo-randa obtained by the EnvironmentalWorking Group.Where have we heardthis sort of thing before? The memooffers a rare inside view of the decep-tive and underhanded tactics used bysome corporations in public relationsfirms to lobby against tougher environ-mental regulations.An interesting reve-lation from the memo is therecommendation to ACC members thatthey pay $120,000 per year to a Wash-ington-based firm that hires former FBIand CIA agents to conduct selectiveintelligence gatheringrelating to oppo-sition activists. If a trial lawyer groupdid this sort of thing,what do you thinkwould happen?

Mutual Fund Industry May Face Overhaul A major overhaul of the mutual fund

industry, which is estimated to have atotal value of $7 trillion dollars, is verylikely to occur. Fund board chairmenmust be truly independent from themutual fund management companiesthat run the funds. Ineffective boards ofdirectors of funds and high fees beingcharged to investors are also among theproblems that must be addressed. Manyon Wall Street have indicated that theSecurities and Exchange Commission(SEC) was embarrassed by the NewYork Attorney General leading thecharge to end the conflict of interestbetween analysts recommendations andinvestment banking. His efforts resultedin the brokerage industry agreeing to a$1.4 billion dollar settlement.

CFTC Fines Energy FirmsThe Commodity Futures Trading

Commission (CFTC) has fined threeenergy firms $34 million for manipulat-ing natural gas prices.The three compa-

nies are Reliant Energy Services, Inc., awholly-owned subsidiary of ReliantResources, Inc.; CMS Marketing Ser-vices & Trading; and CMS Field Ser-vices. The latter two companies arecurrent and former subsidiaries of CMSEnergy Corporation. The CFTC foundthat the companies reported falseand/or misleading information includ-ing price and volume information, con-cerning natural gas cash transactions tocertain reporting firms. In the process,the companies violated the CommodityExchange Act.

Documents Link Metabolife, Offshore BanksSome recent news on Metabolife

got my attention. A recent survey byCopley News Service is certainly worthreading. According to the study, threeowners of Metabolife Internationalallegedly orchestrated an elaborate taxevasion scheme that used offshore taxhavens and kickbacks to avoid millionsin taxes.This comes from documentsunsealed in federal court.There is cur-rently an ongoing Justice Departmentprobe into whether Metabolife liedabout the safety of Metabolife 356, itsflagship diet product. In an affidavit, anIRS Special Agent alleges that Metabo-life owners skimmed millions ofdollars in cash from Metabolife andhid money in offshore accounts.Theiraccountant allegedly knew about andhelped conceal the illegal activities.Thedocuments were unsealed on Novem-ber 5th. Interestingly, on November14th, Metabolifes outside accountant,Michael Compton, apparently commit-ted suicide.

Metabolife failed to account for$93.7 million in income between 1996and 1999, a period in which thecompany sold Metabolife 356 througha network of independent distributorswho were encouraged to pay cash forwholesale supplies of the product,according to the affidavit.The affidavitalso indicates that Metabolife 356proved to be a cash cow for the

company. A former director of retailoperations for Metabolife told investi-gators that the privately held companyreceived up to $500,000 per day incash from distributors who purchasedthe diet pills for resale during 1998 and1999.A former Metabolife director ofoperations put the figure lower, sayingthe company received as much as$125,000 in cash on some businessdays. It was indicated that on one occa-sion there was $750,000 in cash in acompany safe.Even with a conservativefigure, IRS investigators speculated thatMetabolife was generating between$1 million and $5 million per month incash. A review of bank records indi-cated that the company made compara-tively small cash deposits that didntreflect the millions it presumablyreceived from distributors, according tothe affidavit.

A number of former Metabolife

employees, including a former chieffinancial officer, told investigators thatthe owners were skimming largeamounts of cash before deposits weremade. Former employees said thecompany maintained multiple sets ofbooks to conceal its true financial activ-ities, as well as off-the-books bankaccounts that helped disguise the skim-ming activities. Metabolife 356, foryears the leading herbal diet pill, con-tains the herbal stimulant ephedra.Aswe all know, ephedra has been linkedto numerous deaths and inj