Insurance Company Profits 24% Higher in States with Severe Restrictions on Patients' Rights

For Immediate Release: December 10, 2009

Contact: Ray De Lorenzi
American Association for Justice
202-965-3500 x8369
AAJ Press Room

Report: State Tort Reforms Don't Lower Premiums
For Doctors or Patients

Insurance company profits 24% higher in states with severe restrictions on patients' rights

Washington, DC—State tort reforms have provided a boon to insurance companies, leading to record profits while physician and patient premiums continue to skyrocket.

An analysis of data from the National Association of Insurance Commissioners (NAIC) and company annual statements shows malpractice insurer profits are 24 percent higher in states with caps. In these cap states, insurers took in 3.5 times more in premiums than they paid out in 2008. In contrast, insurers in states without caps took in just over twice what they paid in claims.

The findings also show absolutely no correlation between the cost of malpractice premiums and health insurance premiums. For example, Maine has the ninth lowest malpractice premiums but the fourth highest health insurance premiums. Conversely, Nevada has the third lowest health insurance premiums nationally, but malpractice premiums are the country's ninth highest, despite having a cap in place for eight years.

"The data are clear: tort reform is just another insurance company handout," said American Association for Justice President Anthony Tarricone. "Insurers cried wolf and demanded tort reform, only to pocket the profits and never pass savings onto physicians or patients. While 98,000 people die every year from preventable medical errors, it's nonsensical to limit patients' rights simply to fill insurance company coffers."

The report also shows how medical negligence laws were passed under false pretenses. The medical malpractice insurance industry has seen a 47 percent increase in profitability in the last 10 years. Overblown "reported" losses were used by the insurance industry to justify new measures restricting the rights of those injured by medical negligence.

Now that over 30 states have malpractice caps, insurance companies are enjoying extremely high levels of profit. In 2008, the average profit of the 10 largest medical malpractice insurers was higher than 99 percent of Fortune 500 companies and 35 times higher than the Fortune 500 average.

Finally, the report explains the dynamics of the insurance cycle and trends in premium pricing, which are well-known by analysts within the insurance industry. Remarkably, the industry’s leaders are already positioning to claim another “tort crisis” and to lobby for even more severe restrictions on patients’ rights in 2012.

To view a copy of Insurance Company Handout: How the Industry Used Tort Reform to Increase Profits While Americans' Premiums Soared, visit http://www.justice.org/clips/Insurance_Company_Handout.pdf.

AAJ has released a series of reports throughout the health care debate, as well as video tributes to the lives behind medical negligence. To learn more, visit www.98000reasons.org.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

AAJ Statement of JPMorgan Removing Forced Arbirtration Clauses from Credit Card Contracts

Today, JPMorgan Chase & Co., the biggest credit card lender, will remove clauses from its contracts that force consumers into arbitration. Numerous reports and studies have shown these forced arbitrations are largely stacked against consumers.

The following is a statement from American Association for Justice President Anthony Tarricone:

“JP Morgan’s decision is a win for consumers, who previously had no recourse because of rigged forced arbitration proceedings. Unfortunately, other lenders and corporations outside the financial sector still insist on forcing their employees or customers into one-sided arbitrations to escape accountability. Congress must act and pass the Arbitration Fairness Act to prohibit this abusive practice and give Americans a real opportunity to receive justice when facing corporate wrongdoers.”

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

AAJ Calls on Congress to Restore Americans' Basic Legal Protections

Bill introduced in U.S. House today – “Open Access to Courts Act of 2009” – will restore standards required to file court cases back to decades-long precedent

Washington, DC—A bill introduced in the U.S. House of Representatives today will restore standards required to file court cases and strengthen Americans’ basic legal protections. The “Open Access to Courts Act of 2009,” introduced by Rep. Jerrold Nadler (D-NY), Rep. Hank Johnson (D-GA), and House Judiciary Chairman John Conyers (D-MI), will address recent U.S. Supreme Court decisions – Bell Atlantic v. Twombly (2007) and Ashcroft v. Iqbal (2009) – which irrationally raised the bar for Americans seeking justice in employment, discrimination, and other civil cases.

Since 1938, individuals and businesses could file suit by submitting a short and plain statement, called a complaint, which described the facts of the case. In Twombly and Iqbal, the Supreme Court created a new interpretation of these rules. With these vague and subjective legal pleading standards, cases are now being dismissed even before the plaintiff can obtain evidence that would confirm the allegations, a process known as discovery. This effectively requires people to know more information than they possibly could have access to.

Since many cases are proven because of documents – such as personnel files and internal company memos – uncovered in discovery, these new standards allow negligent corporations to escape accountability while weakening Americans’ basic legal protections.

“Without this bill, access to justice will be denied before people even reach the starting line,” said American Association for Justice President Anthony Tarricone. “Congress must act to ensure meritorious cases can move forward so wrongdoers won’t escape accountability.”

A bill sponsored by Sen. Arlen Specter (D-PA) has already been introduced in the U.S. Senate (S. 1504) to return these pleading standards to their prior precedent – established in 1957 by the Supreme Court in Conley v. Gibson.

A wide range of groups support the effort to restore legal standards, including: Alliance for Justice, American Antitrust Institute, American Civil Liberties Union, The Brennan Center for Justice at NYU School of Law, Center for Justice & Democracy, Christian Trial Lawyer’s Association, Committee to Support the Antitrust Laws, Community Catalyst, Consumer Federation of America, Consumers Union, Earthjustice, Environment America, Essential Information, The Impact Fund, La Raza Centro Legal, Lawyers’ Committee for Civil Rights Under Law, Leadership Conference on Civil Rights, Mexican American Legal Defense and Educational Fund, NAACP Legal Defense and Educational Fund, National Association of Consumer Advocates, National Association of Shareholder and Consumer Attorneys, National Consumer Law Center, National Consumers League, National Council of La Raza, National Crime Victims Bar Association, National Employment Lawyers Association, National Senior Citizens Law Center, National Whistleblowers Center, National Women’s Law Center, Neighborhood Economic Development Advocacy Project, Public Citizen, Sierra Club, Southern Poverty Law Center, Taxpayers Against Fraud, and U.S. Public Interest Research Group.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others—even when it means taking on the most powerful corporations. Visit http://www.justice.org/newsroom.

New Paper Debunks Malpractice Myths

Contact: Ray De Lorenzi
202-965-3500 x369
AAJ Press Room

New Paper Debunks Malpractice Myths

Washington, DC—As enemies of health care reform spread lies and untruths about medical negligence, a new white paper tackles the issue head-on, debunking the most common myths with sound science and research while refuting the hyperbole and empty rhetoric.

Five Myths About Medical Negligence, one in a series of reports from the American Association for Justice on this issue, examines the errors and faults behind the most commonly used talking points of health care reform opponents.

• Myth #1: There are too many “frivolous” malpractice lawsuits.

Fact: There’s an epidemic of medical negligence, not lawsuits. Only one in eight people injured by medical negligence ever file suit. Civil filings have declined eight percent over the last decade, and are less than one percent of the whole civil docket. A 2006 Harvard study found that 97 percent of claims were meritorious, stating, “portraits of a malpractice system that is stricken with frivolous litigation are overblown.”

• Myth #2: Malpractice claims drive up health care costs.

Fact: According to the National Association of Insurance Commissioners, the total spent defending claims and compensating victims of medical negligence was just 0.3% of health care costs, and the Congressional Budget Office and Government Accountability Office have made similar findings.

• Myth #3: Doctors are fleeing.

Fact: Then where are they going? According to the American Medical Association’s own data, the number of practicing physicians in the United States has been growing steadily for decades. Not only are there more doctors, but the number of doctors is increasing faster than population growth. Despite the cries of physicians fleeing multiple states, the number of physicians increased in every state, and only four states saw growth slower than population growth; these four states all have medical malpractice caps.

• Myth #4: Malpractice claims drive up doctors’ premiums.

Fact: Empirical research has found that there is little correlation between malpractice payouts and malpractice premiums paid by doctors. A study of the leading medical malpractice insurance companies’ financial statements by former Missouri Insurance Commissioner Jay Angoff found that these insurers artificially raised doctors’ premiums and misled the public about the nature of medical negligence claims. A previous AAJ report on malpractice insurers found they had earnings higher than 99% of Fortune 500 companies.

• Myth #5: Tort reform will lower insurance rates.

Fact: Tort reforms are passed under the guise that they will lower physicians’ liability premiums. This does not happen. While insurers do pay out less money when damages awards are capped, they do not pass the savings along to doctors by lowering premiums. Even the most ardent tort reformers have been caught stating that tort reform will have no effect on insurance rates.

“All the facts and evidence show that tort law changes will do practically nothing to lower costs or cover the uninsured,” said AAJ President Anthony Tarricone. “It’s no wonder the tort reformers, insurance lobby, and other corporate front groups have to gin up lies and phony stats, since no legitimate data or research supports their claims. Our focus should be on reducing the 98,000 deaths by medical error that occurs every year, not limiting patients’ legal rights.”

As part of its ongoing series on the topic, AAJ earlier released Medical Negligence: A Primer for the Nation’s Health Care Debate, The Truth About “Defensive Medicine,” and The Insurance Hoax: How Doctors and Patients Pay for the Huge Earnings of Medical Malpractice Insurers. These can be located at www.justice.org/medicalnegligence. Five Myths About Medical Negligence can be found directly at: www.justice.org/clips/Five Myths About Medical Negligence.pdf.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

Tort Law Changes Won't Reduce Malpractice Premiums

For Immediate Release: October 29, 2009

Contact: Ray De Lorenzi, American Association for Justice
202-965-3500 x369
AAJ Press Room

New Data Shows Tort Law Changes Won’t Reduce Malpractice Premiums

Insurance companies lobby to limit patients’ legal rights,
yet never pass savings onto physicians or consumers

Washington, DC—Tort law changes have failed to reduce malpractice insurance costs, and states with caps on damages often have higher premiums than states without caps, according to an analysis of just-released liability data.

While insurance companies have claimed tort law changes would lower physicians’ premiums, this has not been the case. There is either no difference in rates between cap and non-cap states, or cap states actually have higher premiums – underscoring how a state’s liability laws play no role in lowering insurance or overall health care costs. Doctors’ premiums rise and fall based on the insurance cycle, totally unrelated to the legal system.

The new data shows:
• Average liability premiums across internists, general surgeons and OB/Gyns are nearly identical for states with or without caps.
• Average liability premiums for OB/Gyns are nearly identical for states with or without caps.
• Average liability premiums for general surgeons are 9.3% higher in states with caps.
• Average liability premiums for internal medicine are 9.9% higher in states with caps.

“Malpractice insurers promised tort law changes would lower premiums, yet it has not happened,” said American Association for Justice President Anthony Tarricone. “While these companies make record profits off the backs of doctors, patients injured through no fault of their own are often unable to seek recourse. This information comes at an important time in the health care debate – providing clear evidence that tort law changes won’t decrease costs.”

The above statistics were derived from data released this month in Medical Liability Monitor. More information and charts on this data can be found at www.justice.org/clips/premiums2009.pdf.

As part of its ongoing series on the topic, AAJ earlier released Medical Negligence: A Primer for the Nation’s Health Care Debate, The Truth About “Defensive Medicine,” and The Insurance Hoax: How Doctors and Patients Pay for the Huge Earnings of Medical Malpractice Insurers, all of which can be located at www.justice.org/medicalnegligence.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

True Stories of Corporations that Knew their Products were Dangerous-- Even Deadly

The American Association for Justice released an incredible report yesterday--- They all Knew and Failed to.... The report details how lawsuits keep us safe.

Listed in the report are numerous examples of companies that knowingly and willfully released products that harmed or even killed consumers. It describes the case of a company that discovers rat droppings are contaminating its food products but insists that the products be recooked, boxed up, and sold anyway. Then there is the example of a company that discovers its bulletproof vests are defective but still sells them to law enforcement agencies and the military-- putting those that protect us at grave risk.

Toys to Toxic Waste

For Immediate Release: October 28, 2009

Contact: Jennifer Fuson
202-965-3500 x369
AAJ Press Room

Toys to Toxic Waste: New Report Details Corporations that Skirt Responsibility and Shun Consumer Safety to Save Money

Washington, DC—As the U.S. Chamber Institute for Legal Reform holds their annual summit – an event dedicated to championing corporate misconduct and evading accountability – a new report released today details true stories of corporations that knew their products were dangerous, yet failed to act and protect consumers.

“They Knew and Failed To” details numerous examples of medical devices, prescription drugs, and other consumer products that remained on the market after critical safety concerns had been raised within the company, while using all means necessary to avoid being held accountable for their misconduct.

In one example, police officer Tony Zeppetella of Oceanside, Calif. had paid $313 to “upgrade” his standard bullet proof vest. The Ultima body armor Zeppetella had purchased was widely used by law enforcement, military personnel, and even worn by the President and Mrs. Bush. Unfortunately, Zeppetella was shot and killed on a routine traffic stop in June 2003, when a bullet penetrated his vest.

Second Chance, the manufacturer, had known as early as 1998 that heat and sunlight caused the material to degrade, making the vests penetrable. Internal corporate memos from 2001 revealed an executive at the company had recommended notifying customers about the products’ defect, saying, “Lives and our credibility are at stake.” It was not until September 2003 that the company eventually recalled 130,000 vests, three months after Zeppetella was shot. The company had known for five years there were problems with their vests, but failed to notify consumers, putting law enforcement and service members’ lives at risk. Several years later, Second Chance recalled another 98,000 vests.

“While most businesses act in good faith to serve their customers and communities, unfortunately some corporations recklessly put lives at risk for the sake of profit,” said American Association for Justice President Anthony Tarricone. “While front groups like the Chamber stage events practically celebrating corporate misconduct, this new report convincingly illustrates the importance of holding wrongdoers accountable.”

The full report, “They Knew and Failed To,” is available at: www.justice.org/clips/TheyKnewAndFailedTo.pdf.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

AAJ Women's Caucus Reception

AAJ announces their Women's Caucus Networking Reception on Thursday, October 29th in Washington DC.

Medical malpractice insurers earning more than ever

For Immediate Release: October 6, 2009

Contact: Ray De Lorenzi, American Association for Justice
202-965-3500 x369
AAJ Press Room

Medical Malpractice Insurers Earning More Than Ever

10 biggest malpractice insurers have average profits
higher than 99% of Fortune 500 companies

Washington, DC—As Congress debates nationwide health care reform, a new analysis reveals malpractice insurers have long-played a cruel hoax on legislators and the public. By systematically distorting profits and losses, insurers created phony “financial crises,” so lawmakers would limit the legal rights of injured patients. Today, while premiums and health care costs skyrocket, malpractice insurers have average profits higher than 99 percent of Fortune 500 companies.

The key findings of the report, which analyzes the annual financial statements of the 10 largest U.S. medical malpractice insurers, include:

• The average profit of these insurance companies is higher than 99 percent of all Fortune 500 companies and 35 times higher than the Fortune 500 average for the same time period.
• Malpractice insurers have seen their profit margins range from 5.9 percent to 74.8 percent, with an average of 31.2 percent.

Medical malpractice insurers have underestimated profits and overestimated losses, creating overblown insurance “crises” to garner support for limiting patients’ legal rights. Then years later after the “crises” abated, revised filings show the companies were never in the financial peril they claimed.

• After overestimating losses, insurers have since reported that losses over the last five years have been approximately 13.5 percent lower than initially reported.
• By overestimating losses, companies have underestimated profits. Insurers averaged about 5.1 percent higher profits last year and 12.4 percent higher profits two years ago; these levels of profits will likely rise as upward revisions are made.
• Medical negligence laws were passed under false pretenses. Overblown reported losses were used by the insurance industry to justify new measures restricting the rights of those injured by medical negligence.

“Insurance companies are gouging doctors on their premiums to mislead lawmakers. And today, injured patients are often left with no avenue to pursue justice, while health care costs continue to skyrocketing,” said American Association for Justice President Anthony Tarricone, managing partner at Kreindler & Kreindler LLP.

“As Congress looks to overhaul our nation’s health care system, it’s clear that limiting the legal rights of patients won’t lower health care costs or cover the uninsured,” continued Tarricone. “The focus should be on eliminating medical errors that injure or kill tens of thousands of Americans every year. Insurance companies clearly don’t need another handout.”

As part of its ongoing series on the topic, AAJ earlier released Medical Negligence: A Primer for the Nation’s Health Care Debate and The Truth About “Defensive Medicine.” These reports, as well as The Insurance Hoax: How Doctors and Patients Pay for the Huge Earnings of Medical Malpractice Insurers, can be located at www.justice.org/medicalnegligence.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

Senate Hearing Highlights Victim’s Medical Device Nightmare, Asks Congress to Hold Manufacturer Accountable

Contact: Jennifer Fuson
American Association for Justice
Jennifer.Fuson@justice.org
202-965-3500 x369

Senate Hearing Highlights Victim’s Medical Device Nightmare, Asks Congress to Hold Manufacturer Accountable

Iowa Patient Testifies in Favor of Legislation to Restore Legal Rights
Through Civil Justice System

Washington, DC—Two years ago, Michael Mulvihill of Bettendorf, Iowa, was driving with his wife across the Midwest to visit his son, daughter-in-law, and grandchildren when he saw a blue light flash before his eyes. He felt his body shaking and thought it was from hitting road debris. He soon realized his heart defibrillator was malfunctioning and sending electrical shocks throughout his body while he was driving on the interstate.

His nightmare continues because he cannot hold the manufacturer of his faulty medical device accountable for their faulty product because of a U.S. Supreme Court decision last year that gave the manufacturer complete immunity. Today, Mulvihill will testify before the U.S. Senate Health, Education, Labor, and Pensions Committee, asking for Congress to pass the Medical Device Safety Act (MDSA), legislation that would restore the right of patients to hold manufacturers of medical devices accountable in court when their devices have malfunctioned.

Mulvihill had an irregular heartbeat, and was implanted with a defibrillator in 2006 to control his heart rhythm and pulse. The device intended to save his life nearly killed him and his wife when it malfunctioned while he was driving. The anxiety from the episode led Mulvihill into taking early retirement because his job required so much interstate travel.

A representative from Medtronic confirmed the device had shocked Mulvihill 22 times in 53 minutes. The wire that connects the defibrillator to the heart was recalled four months later after over a hundred reports of the lead malfunctioning had been reported to the Food and Drug Administration (FDA). However, because of a U.S. Supreme Court ruling last year, Mulvihill does not have any recourse to hold the manufacturer accountable.

In February 2008, the U.S. Supreme Court ruled in Riegel v. Medtronic that because the Food and Drug Administration (FDA) had approved a medical device through the pre-market approval process, patients injured by medical devices do not have any recourse to hold the manufacturers accountable. The Supreme Court ruled earlier this year in Wyeth v. Levine that patients harmed by prescription drugs can hold manufacturers accountable in state courts, creating a double standard between prescription drugs and medical devices.

“I relied on this medical device to save my life. Instead, the trauma I experienced because the device was not safe cost me my career and crippled my lifestyle,” said Mulvihill. “Medical device companies should be held accountable for the safety of the products they produce and profit from. I am asking Congress to restore my right to seek justice for myself and medical device patients everywhere.”

“Medtronic put profits ahead of patient safety. They were aware the device was failing at abnormally high rates but continued to market it, as alleged in lawsuits filed against the company,” according to Wendy Fleishman, Mulvihill’s attorney with Lieff Cabraser Heimann & Bernstein, LLP. “Medtronic should not receive the benefit of a judicial doctrine granting the company immunity.”

Medtronic’s Sprint Fidelis’ lead, like Mulvihill’s, is the subject of multidistrict litigation in U.S. District Court in Minnesota. In January, U.S. District Court Judge Richard Kyle dismissed over 1,400 patients’ cases, citing the Supreme Court decision in Riegel v. Medtronic. The ruling stated, “The Court recognizes that at least some Plaintiffs have suffered injuries from using Sprint Fidelis leads, and the Court is not unsympathetic to their plight. … Plaintiffs’ remedy, therefore, lies with Congress, and not with this Court.”

MDSA, sponsored by Sen. Edward Kennedy (D-MA), Rep. Frank Pallone (D-NJ) and House Energy and Commerce Committee Chairman Henry Waxman (D-CA), would restore the right to seek justice in state courts for victims of faulty medical devices like heart defibrillators, prosthetic knees, and hips.

“The Medical Device Safety Act is necessary to protect patients from defective devices and make sure manufacturers are held accountable,” said Linda Lipsen, Senior Vice President of Public Affairs at the American Association for Justice. “The Supreme Court has affirmed that state law offers an important layer of consumer protection, and Congress should make clear that this applies not just in cases of pharmaceutical drugs, but also medical devices approved by the FDA that are later faulty or malfunction.”

For copy of Mulvihill’s testimony, please contact kyle.murphy@justice.org.

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NAF Settlement Underscores Need for Congress to Pass Arbitration Fairness Act

For Immediate Release: July 20, 2009
Contact: Kerri Axelrod
202-965-3500 x369
AAJ Press Room

NAF Settlement Underscores Need for Congress to Pass Arbitration Fairness Act

The following is a statement from American Association for Justice President Les Weisbrod regarding the settlement by the Minnesota Attorney General with the National Arbitration Forum:

“The appalling business practices of the National Arbitration Forum (NAF) illustrate how forced arbitration fails to protect consumers from predatory financial lenders and other negligent corporations.

“The NAF operated by creating an economic incentive to rule against consumers in favor of credit card companies and debt collectors; a far cry from the ‘fair’ and ‘unbiased’ forum they marketed.

“While the settlement with the attorney general is a major win for consumers, the NAF is not the only company that uses forced arbitration against consumers. This settlement underscores why Congress must pass legislation that makes arbitration voluntary, not forced upon consumers by slipping it into the fine print of everyday contracts.

“Attorneys have long used voluntary arbitration and mediation as an effective and efficient manner to resolve disputes. But when arbitration is forced upon consumers in a pre-dispute, non-negotiable contract, it becomes an abusive weapon.

“The NAF settlement should convince all skeptics that forced arbitration is biased, one-sided, and operates to accommodate predatory corporations at the expense of consumers. The time has come for Congress to ban forced arbitration once and for all.”

Two bills have been introduced in Congress to stem the abusive practice of forced arbitration. The bipartisan Arbitration Fairness Act (S. 931 / H.R. 1020), sponsored by Sen. Russ Feingold (D-Wis.) and Rep. Hank Johnson (D-Ga.), would ensure that the decision to arbitrate is made voluntarily and after a dispute has arisen, so corporations cannot manipulate the arbitration system in their favor at the expense of consumers and employees. The bipartisan Fairness in Nursing Home Arbitration Act (S. 512 / H.R. 1237), introduced by Sens. Mel Martinez (R-Fla.) and Herb Kohl (D-Wis.) and Rep. Linda Sanchez (D-Calif.), would eliminate forced arbitration clauses in nursing home contracts.

On Wednesday, a House Oversight and Government Reform subcommittee is scheduled to hold a hearing on the use of forced arbitration in consumer debt collections. Invited to testify is the Minnesota Attorney General and the COO of NAF.

Forced arbitration clauses are hidden in the fine print of everyday consumer contracts from job applications and nursing home agreements to credit card billing inserts and mortgage loans. To learn more, visit www.justice.org/forcedarbitration.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others—even when it means taking on the most powerful corporations. Visit http://www.justice.org/newsroom.

Obama Memo on Complete Immunity Preemption Makes Clear Rule of Law Prevails Over Rule of Politics

Contact: Cecelia Prewett or Jen Fuson (202) 834-6209 (Cell)
202-965-3500 x369 (Office)
AAJ Press Room

Obama Memo on Complete Immunity Preemption Makes Clear Rule of Law Prevails Over Rule of Politics

Statement of American Association for Justice President Les Weisbrod

WASHINGTON, DC—“On behalf of the thousands of people whose cases have been affected by complete immunity preemption, we are heartened by the Presidential Memo released today.

The Obama Memo on regulatory preemption makes clear that the rule of law will once again prevail over the rule of politics. The memo overturned actions taken by Bush administration bureaucrats who were influenced by powerful, well-connected corporations who wanted to re-write and re-interpret Congressional legislation, undermine the Constitutional system of checks and balances and put the public at risk and compromise laws designed to give Americans basic rights to hold wrongdoers accountable.

However, horrendous injuries and deaths are still happening from dangerous products. For that, we look to Congress to remedy those wrongs and they can start by passing the Medical Device Safety Act.”

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For background on AAJ’s work on complete immunity preemption visit www.justice.org/newsroom and see the “Get Out of Jail Free” report on the regulations affected by this memo.

Chinese Drywall Highlights Hurdles to Holding Foreign Producers Responsible for their Products

For Immediate Release: May 19, 2009

Contact: Jennifer Fuson
202-965-3500 x609
www.justice.org

Chinese Drywall Highlights Hurdles to Holding Foreign Producers
Responsible for their Products

Hurricane Katrina Victims among Families that Face Further Home Complications

Washington, DC–Chris Whitfield is just one of the families who lost his home to Hurricane Katrina in Louisiana’s St. Bernard Parish. Just a few years later, his family now faces another uncertain future upon finding Chinese drywall in their new Picayune, Mississippi home. The drywall is corroding his appliances, and causing an egg-like smell that he has no idea what effect it will have on his families’ health or home.

Chris is just one of hundreds, if not thousands of families who wonder where they can turn for justice when their unsafe home is made from defective materials manufactured in another country.

Today the U.S. Senate Judiciary’s Administrative Oversight and the Courts Subcommittee will explore the topic of holding foreign manufacturers responsible in a hearing titled, “Leveling the Playing Field and Protecting Americans: Holding Foreign Manufacturers Accountable.”

“Unfortunately, when the product comes from abroad an unfair and unnecessary battle over civil procedure becomes the focus of the litigation instead of focusing on the real issue at hand, the victim’s injuries,” said Tom Gowen, of Locks Law Firm in Philadelphia, Pennsylvania. “It makes no difference whether the product is drywall, tire valves, or toothpaste. Someone has been harmed and someone has to be held responsible for the defective products.” Gowen will be testifying before the subcommittee.

There are four primary hurdles when perusing legal action against a foreign entity: identifying the manufacturer, service of process, jurisdictional issues, and collection of judgment.

Some foreign products do not contain an adequate label with the manufacturer’s proper name and might be labeled, “Made in China,” or have a retailers name like Sears, Walmart or Target. This presents a problem identifying the manufacturer responsible residing within a foreign country.

Once a manufacturer can be identified, service of process, is simply actually servicing the legal papers to pursue further legal action. The process has been made easier by a Hague Convention treaty signed by about 70 countries, but still requires the complaint to be translated in to the company’s home language, transmitted to the authority in the foreign country, and delivered to the defendant according to rules of service in the country. India, for example, has not signed the Hague Convention, so servicing the legal documents requires going through the U.S. Department of State.

Also testifying before the subcommittee, Chuck Stefan is one of the owners of The Mitchell Company which builds homes in Alabama, Florida, and Mississippi that had unknowingly used the defective drywall in manufacturing about 45 homes. “Foreign manufacturers should not be allowed off the hook for harming U.S. consumers and businesses like ours, especially if they are conducting substantial business here in the U.S.,” said Stefan. “If American businesses can’t hold foreign manufacturers accountable, it hurts their bottom line in addition to harming U.S. consumers and homeowners. It also puts U.S. businesses like Mitchell Homes at a competitive disadvantage.”

To set up interviews with Tom Gowen, Chuck Stefan, or any other consumer affected by Chinese drywall, please contact AAJ Communications.
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FDA Sides with Drug Companies

For Immediate Release
Contact: Cecelia Prewett, Jennifer Fuson

202-965-3500 x369AAJ Press Room

Preemption Clause Would Grant Blanket Immunity

from Lawsuits Involving Drugs Used by Pregnant Women

Washington, DC – Drug and device manufacturers will have immunity from lawsuits even if they fail to update warning labels to include dangerous side effects for pregnant and breast-feeding women if a Food and Drug Administration (FDA) proposed rule is made final. The American Association for Justice (AAJ) today submitted comments on the new label requirements.

“The civil justice system and regulatory authority are meant to complement each other to protect consumers. Instead, we are seeing the same complete immunity preemption language over and over again that would allow manufacturers to escape accountability for hazardous drugs and take away the right of consumers to seek justice in the courts,” said American Association for Justice (AAJ) President Les Weisbrod.

AAJ is asking the final rule eliminate any reference to giving complete immunity to manufacturers. Seven federal agencies have issued over 59 rules with preemption language in the preamble of the rule. Congress has expressed intent to permit consumers to bring state law claims against drug manufacturers in the Food and Drug Administration Amendments of 2007 and in numerous floor statements.

“There is no guarantee the FDA’s new labeling requirements will compel manufacturers to disclose product hazards,” said Weisbrod. “This new policy will only hurt patients and relieve drug manufacturers of the obligation to compensate those that are harmed by their products before ever testing if the new labeling system works properly. The FDA needs shift their focus back to the safety of pregnant women and their children and not protecting the drug companies.”

For a copy of AAJ’s comments, see www.justice.org

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations.
Visit http://www.justice.org

Senior move closer to being protected from one-sided mandatory arbitraion in long-term care

For Immediate Release:
202-965-3500 x369
AAJ Press Room

Washington, DC— Seniors and their families who have been harmed by mandatory arbitration in nursing home contracts overcame another hurdle in the fight to seek justice from negligent nursing home corporations as the House Judiciary Committee set to pass the Fairness in Nursing Home Arbitration Act (H.R. 6126) this week.

This bill would stop nursing home corporations from burying mandatory arbitration clauses in the stack of papers that patients must sign in order to be admitted into a nursing home. When families face the tragic neglect of a loved one due to negligent care, these clauses force families into a private system of justice in which the “judge” is picked by the corporation and families are left without any appeal.

Mandatory arbitration in nursing home contracts has a real life impact on American families every day. Wisconsin resident David Kurth witnessed the one-sided system of mandatory arbitration first hand when a nursing home corporation refused to be held accountable for the neglect of his father, William Kurth. David’s father suffered bedsores so severe they lead to his eventual death. The nurse treating David’s father was found guilty of criminal negligence. Even though the nursing home admitted responsibility to the Kurth family, they continue to hide behind a mandatory arbitration agreement.

“Our members speak for families who have been harmed by mandatory arbitration enforced by the very people that they trusted to protect the health and safety of their loved ones,” said American Association for Justice President Les Weisbrod. “We want to ensure that that no other family has to suffer the compounded injustice suffered by the Kurth family and many others.”

“Mandatory arbitration agreements in nursing home contracts place families in an unfair system where corporations pick the players, make all the rules and leave families without any appeal. Most importantly, it allows nursing home corporations to sweep their unlawful and negligent behavior under a rug and out of the public eye.”

For additional examples of how nursing home arbitration harms families please contract the AAJ press shop at 202-965-3500 x. 369.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

Federal Rules Gives Railroads Complete Immunity

For Immediate ReleaseContact
202-965-3500 x 369, AAJ Press Room

Federal Rules Give Railroads Complete Immunity
Administrative Action Preempts State Health and Safety Standards

Washington, DC— New rules issued by the Federal Railroad Administration and Pipeline and Hazardous Materials Safety Administration would give negligent corporations complete immunity from lawsuits in railroad injury cases, according to testimony given today before the agencies.

Since January 2005, federal agencies have exceeded Congressional authority by issuing 51 rules that preempt state law. American Association for Justice (AAJ) regulatory counsel Gerie Voss and AAJ member Dan O'Fallon will testify that Congress never intended for federal agency rules to preempt state law claims. Dan O’Fallon will also discuss how negligent railroads tried to use preemption to invalidate claims made by the victims of the Minot, North Dakota derailment.

Federal regulatory preemption allows corporations to receive complete immunity and escape accountability even when they knowingly injure and endanger consumers with unsafe products.

Federal regulation is meant to provide a minimal standard of safety for food, drugs, cars, medical devices and railroads. Under a little known doctrine called preemption, there has been an attempt to erode consumer rights by quietly using federal rules to preempt state lawsuits.

“Preemption is a ‘get out of jail free card’ for corporations which put consumers at risk and try to avoid accountability,” said American Association for Justice President Kathleen Flynn Peterson. “Federal regulations and state law should work together to make consumers safer. States have a right to ensure the safety of their residents when dealing with railroads that transport hazardous and deadly materials.”

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As the world's largest trial bar, AAJ (formerly known as the Association of Trial Lawyers of America) promotes justice and fairness for injured persons, defends the constitutional right to trial by jury, and strengthens the civil justice system through education and disclosure of information critical to public health and safety. Serving members worldwide, AAJ provides attorneys with the information and professional assistance they need to serve clients successfully and protect the democratic values of the civil justice system.

Visit http://www.justice.org

Court Secrecy

For Immediate Release
AAJ Press Room

AAJ Seeks Legislative Action to Stop “Court Secrecy”

Washington, DC— Invoked in countless legal settlements, secrecy provisions allow big corporations to prevent the public from finding out about dangerous products that kill and injure people, and the American Association for Justice is fighting back to stop agreements that endanger public health and safety.

As a condition of settling product liability cases, businesses often demand that injured individuals agree to secrecy provisions which prohibit them from disclosing any public safety hazards uncovered during litigation. Court secrecy allows corporate wrongdoers to evade real accountability when evidence of dangerous defects and corporate negligence is routinely covered up. Consequently, irresponsible businesses continue to profit from product sales at the expense of consumer safety.

Congress will be addressing the health and safety problems associated with court secrecy in an upcoming Congressional hearing chaired by Senator Herb Kohl (D-WI). Among those testifying will be Johnny Bradley of Pachuta, Mississippi, who suffered permanent injuries and became a widower in 2002 when the tread on his Cooper tire separated. Bradley’s attorney, Bruce Kaster, uncovered evidence of Cooper tire defects which had previously been sealed in other cases and continues to remain sealed to this day. Even at this hearing, Johnny Bradley cannot disclose the documented evidence uncovered by his attorney during litigation.

Bradley is also subject to a court secrecy order requested by Cooper Tires, which his attorney has challenged vigorously. Bradley believes these defects are so serious that Cooper would be forced to halt production if they were publicly known.The Senate Judiciary Committee, Subcommittee on Antitrust, Competition Policy and Consumer Rights, has scheduled the hearing on “The Sunshine in Litigation Act: Does Court Secrecy Undermine Public Health and Safety?” for December 11, 2007 at 2:30 p.m. in Room 226 of the Dirksen Senate Office Building.

Chairman Kohl is expected to re-introduce the “Sunshine in Litigation Act” soon after the hearing. Previous versions of Kohl’s bill would have restricted judicial secrecy agreements that conceal dangerous product defects in product liability settlements.Also testifying at the hearing will be Public Justice Attorney Leslie Bailey, University of California law professor and attorney Richard Zitrin, and the Honorable Joseph F. Anderson, a Judge of the United States District Court for the District of South Carolina.In 2002, then-Chief Judge Anderson led his fellow South Carolina federal court judges in voting unanimously to ban the filing of sealed settlements in their court.

Just prior to the vote, Judge Anderson stated, “Here is a rare opportunity for our court to do the right thing and take the lead nationally in a time when the Arthur Andersen/Enron/Catholic priest controversies are undermining public confidence in our institutions and causing a growing suspicion of things that are kept secret by public bodies.”
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Merk settles with victims of deadly drug Vioxx

For Immediate Release
AAJ Press Room

Washington, DC— American Association for Justice (AAJ) CEO Jon Haber made the following statement today, following the announcement that an agreement between drugmaker Merck and attorneys for thousands of Vioxx victims has been reached:

From 1999 to 2004, when it was pulled from the market, Merck sold $11 billion of Vioxx around the world to people who were purposefully kept unaware of the drug’s dangers. According to Food and Drug Administration scientist Dr. David Graham, the drug contributed to as many as 139,000 heart attacks and as many as 55,000 deaths in the United States.

American Association for Justice attorneys fought ceaselessly for this result – initiating the first suits, being the driving force to uncover Merck's misconduct and negligence and leading the litigation nationwide. These attorneys took on a powerful multi-billion dollar corporation, holding them accountable for producing an unsafe product. The attorneys in the multi-district litigation and coordinated state court proceedings all deserve our thanks and congratulations for their tireless efforts.

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Unsafe toys for kids still on shelves

For Immediate Release
AAJ Press Room

“Can’t Protect the Safety of Children” (CPSC) Chair Nancy Nord Should Resign

Washington, DC— Failing to protect the safety and health of America’s children, Consumer Product Safety Commission (CPSC) Chair Nancy Nord should immediately resign, the American Association for Justice said today.

“More than 13 million recalled toys on the market should never have been there in the first place, but they were because Nancy Nord was asleep at the helm,” said Jon Haber, American Association for Justice CEO. “When not asleep, she was flying around the world on the tab of the very industries she is supposed to be regulating. She should be working on keeping unsafe toys from ever reaching the hands of our children instead of allowing corporate manufacturers to put unsafe products on America’s shelves at a record pace.”

Last month, Nord opposed the efforts of Congress to increase her agency’s budget and give it more enforcement tools to stop dangerous foreign toys and other products from flooding the American market.

Nord has even opposed a long overdue ban on lead in children's toys. Lead, most commonly found in bright-colored paints, has been shown to cause developmental delays, impaired hearing and kidney damage, particularly in children.

Last week it was revealed that Nord had accepted free trips sponsored by the fireworks industry and toy manufacturers to a wide range of holiday destinations including New Orleans, Spain and a golf resort in Hilton Head. The corporations were among those whose products are regularly reviewed by the CPSC.

“From Aqua Dots to Thomas the Tank Engines, Americans have lost all faith that Nancy Nord puts the interests of consumers ahead of the businesses that she has sworn to regulate,” said Haber. “She has taken their free trips while allowing millions of dangerous toys into our stores, and it is long past time now for true strong leadership at the CPSC that will protect our children.”

Administration Assault on Railroad Safety Must End

For Immediate Release

Administration Assault on Railroad Safety Must End, AAJ DeclaresProposed State Law Preemption Contradicts Congressional Intent,
Jeopardizes Public Safety and Victims’ Access to Justice

Washington, DC— The American Association for Justice (AAJ) today declared that the Bush Administration must end its effort to prohibit railway accident victims from pursuing legal action against railroad companies responsible for their injury or death. The latest proposed federal railroad safety regulations continues an unprecedented assault on state safety standards, directly challenging Congressional intent and jeopardizing public safety and victims’ access to justice.

“Embracing corporate irresponsibility, the Administration is blatantly ignoring the recent law passed by Congress and instead proposing a slap in the face to consumer safety,” said AAJ CEO Jon Haber. “This is yet another cynical effort allowing major corporations to evade accountability in the courts when people are killed and injured by their negligence and wrongdoing.”

Despite Congressional action earlier this year to clarify that federal law does not pre-empt state law or causes of action, the FRA has ignored the legislation and instead effectively claimed the power to regulate with the force of law without regard to the will of Congress.

In the preamble to the proposed rule (Docket No. FRA-2006-26175, Notice No. 1) the FRA added language claiming that “[s]ubject to a limited exception for essentially local safety or security hazards, its requirements will establish a uniform Federal safety standard that must be met, and state requirements covering the same subject are displaced, whether those standards are in the form of state statutes, regulations, local ordinances, or other forms of state law, including state common law.”

While in its comments on the proposed regulation the AAJ stated it believes that the language in the preamble has no substantive effect, it must be withdrawn to avoid conflict and possible misinterpretation with the Congressional intent clarifying the issue recently. That legislation stated “that 49 U.S.C. 20106 does not preempt State law causes of action where a party has failed to comply with the Federal standard of care established by a regulation or order issued by the Secretary of Transportation or the Secretary of Homeland Security, its own plan or standard…, or a State law, regulation or order that is not incompatible with 49 U.S.C. 20106(a)(2).”

A copy of AAJ’s letter to the FRA demanding the removal of the pre-emption language is available upon request.

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AAJ: 1050 31st Street NW, Washington, DC, 20007

As the world's largest trial bar, AAJ (formerly known as the Association of Trial Lawyers of America) promotes justice and fairness for injured persons, defends the constitutional right to trial by jury, and strengthens the civil justice system through education and disclosure of information critical to public health and safety. Serving members worldwide, AAJ provides attorneys with the information and professional assistance they need to serve clients successfully and protect the democratic values of the civil justice system.

Visit http://www.justice.org