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

Caps on damages unconsitutional

For Immediate Release
(404) 376-3495, Rebecca DeHart


Atlanta—The Superior Court of Fulton County, Georgia this week declared unconstitutional Georgia's medical malpractice cap on non-economic damages. The decision by Judge Marvin Arrington resulted from a case filed by Plaintiff Cheon Park.

Park, 59, fell from a ladder at his home in late 2006. He was taken to WellStar Douglas Hospital by ambulance with complaints of pain in his neck, shoulder, arm and pelvis. Once at the hospital, doctors treated Park for a dislocated shoulder and then released him that same evening. Upon his discharge, Park could not stand on his own and had to be lifted by hospital staffers and his loved ones into his car. Just a few days later Park, still in pain, was taken to Grady Hospital where X-Rays revealed he had a severely damaged spine. Park is a now a C4 quadriplegic.

“Mr. Park is now a C4 quadriplegic and will be in a wheelchair forever. He, Mrs. Park and their son are trying to piece their lives back together,” said Rob Roll, an attorney for Park. “Before 2005, Mr. Park would not have had to fight for his Constitutional Right to a trial by jury. I’m pleased to say that Judge Arrington penned a decision that upholds our Constitution and The Bill of Rights. The Parks are pleased with the decision today.”

In 2005, the Georgia Legislature passed a sweeping so-called “tort reform” measure. Claims of “jack-pot-justice” and “frivolous lawsuits” flooded the halls of the Gold Dome. In one fell swoop, SB 3 drastically changed the Constitutional Rights of all Georgians. In some aspects SB 3 limited one’s Constitutional Rights and in other aspects those Rights were completely eradicated.

The Park Family asked for a ruling on two main components of SB 3—the gross negligence standard and the cap on non-economic, or ‘quality of life,’ damages. Judge Arrington’s decision ruled exclusively on the Constitutionality of caps on damages. In a footnote he indicated that a ruling on the gross negligence standard will follow.

"Judge Arrington’s decision addressed several aspects of caps on damages that could not pass Constitutional muster,” said Trent Speckhals, an attorney for the Park family. “His ruling addresses this state’s—and this nation’s—fundamental value of a citizen’s right to seek trial by jury. His commonsense ruling balances the rights of all Georgians, young and old, rich and poor, and restores the guarantees set forth by our Constitution.”

In the decision Judge Arrington examined medical malpractice caps on damages and the plaintiff’s claim that it violated the Equal Protection Clause in Georgia’s Constitution. Equal Protection essentially states that within a group of like people, it is unconstitutional to treat some of them differently than others. He wrote, “Persons suffering the exact same personal injuries at the hands of other tortfeasors—including other professionals—are not subject to such caps.” In other words, a person hurt by the negligence of another professional—perhaps in a legal malpractice or in a products liability case—has the ability to recover the entirety of a jury’s award of damages, while a person injured by the negligence of a medical professional does not.

And the same can be said for the defendants. Under SB 3 one group of professionals are held to a lower standard of expected conduct than others. Judge Arrington wrote, “…One category of professional defendants have been singled out for special protection, with the result that their victims have been singled out for special disadvantages and limitations.”

Judge Arrington found the Plaintiff’s argument that a cap on damages violates the Constitutional Right to trial by jury to have merit as well. He wrote, “The court agrees with plaintiffs that a fundamental right is involved in this case if for no other reason that the fact that the jury’s authority to award the amount of damages that it concludes to be appropriate for non-economic injury is limited by the caps.”

Under SB 3, the jury’s deliberation regarding the amount of damages to be awarded is pre-empted by a legislatively imposed cap—no matter how severe or catastrophic the case before them is. Historically a jury has had the ability to decide the fate of its peers. Founding Father Thomas Jefferson said, "I consider trial by jury as the only anchor yet imagined by man, by which a government can be held to the principles of its Constitution."

Within the circumstance where the will of the jury is circumvented by the legislative statute enacting a cap on damages, Judge Arrington penned, “…There is no doubt that the caps go to the core of a party’s right to have a jury determine his or her claims…To that extent, the jury’s award is a meaningless exercise.”

Another point of contention was the defendant’s argument—the very same argument used to hasten the passage of SB 3 in 2005—that caps on damages has become a legislative necessity to maintain a functioning medical community allegedly facing skyrocketing malpractice insurance premiums. Judge Arrington wrote in response to this claim, “At the outset, the court finds unconvincing the defendants’ contention that non-economic damages had to be limited, as they contend, in order to allow the medical profession to function effectively.”

Scare tactics claiming Georgia was losing its doctors—particularly OB/GYNs and other specialists—were at the heart of the debate in 2005. Indeed, the cost of medical malpractice insurance was on the rise. However, the supposed correlation that damages awarded to citizens harmed by the insured doctors and the increasing cost of insurance remains unfounded. Price-gouging by the insurance industry—not litigation—was the cause.

A 2005 study conducted by former Missouri Insurance Commissioner, Jay Angoff, found that the insurance companies have been price-gouging doctors by drastically raising their insurance premiums, even though claims payments have been flat, or, in many cases, decreasing. According to the annual statements of the 15 largest insurance companies, the amount malpractice insurers collected in premiums increased by 120.2% between 2000 and 2004, while their claims payouts rose by only 5.7%.1

Furthermore, a 2008 study by researchers at the Harvard School of Public Health and George Mason University has found that the supply of OB/GYNs is unaffected by both medical malpractice insurance premiums and the presence of tort reforms in a state. “We found that the supply of OB/GYNs had no statistically significant association with premiums or tort reforms. Our results suggest that most OB/GYNs do not respond to liability risk by relocating out of state or discontinuing their practice, and that tort reforms such as caps on noneconomic damages do not help states attract and retain high-risk specialists.” 2

“The arguments used in 2005 were suspect then—and have been proven to be false now,” said Speckhals. “The spin on statistics used to protect large corporations and the insurance industry has steered us away from reality—the reality of real people, right here in Georgia, who are struggling to regain their lives after they were harmed by someone else’s negligence.”

Speckhals praised Judge Arrington’s ruling as it addressed the economic circumstances faced not by multi-billion dollar corporations but those faced by the families in this state.

Judge Arrington ruled that even if there was a way to make caps on damages constitutional, it had to be done in a way that did not have a largely disparate impact on wealthy individuals compared to poor individuals. “..The statute effectively puts substantial limitations on the rights of the poor and middle class to recovery while leaving the right to virtually unlimited recoveries unimpeded for the wealthy… The limitation on non-economic damages falls, instead, on the poor, the unemployed, the elderly, the homemaker who does not work outside the home, and others with little earnings,” wrote Judge Arrington.

Judge Arrington cited another reason why caps on damages are unconstitutional. A person who has a minimal injury may receive complete compensation of economic and non-economic damages because they will total less than the cap. A person, like Mr. Park, who was catastrophically injured by the negligence of another will not have the ability to receive full compensation. Wrote Judge Arrington, “Someone who is profoundly injured, as the plaintiff here, will receive, if he prevails, compensation for only a small percentage of his actual non-economic injury.”

“It always breaks my heart when I hear of families like the Parks who are the victims of someone else’s negligent conduct and they are unable to seek justice because our the law passed in 2005 [SB 3] prohibits them from doing so,” said Fred Orr, President of the Georgia Trial Lawyers Association. “The ruling shines a light on the challenges that real people in this state face when they are harmed by acts of negligence. To eradicate a certain class of people’s rights is not only immoral, it’s unjust, and Judge Arrington recognized this.

“I expect this decision to be appealed and that the discussion surrounding this important issue will continue,” stated Orr. “Judge Arrington obviously put a tremendous amount of scholarship and research into his decision. And I hope the coming discussions and debates surrounding this case will continue with the same levels of respect for our Constitution and for the families who live with the consequences of negligent acts by others.”

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1. “Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry,” Jay Angoff, 7/05, http://www.centerjd.org/ANGOFFReport.pdf.

2. “A Longitudinal Analysis of the Impact of Liability Pressure on the Supply of Obstetrician-Gynecologists,” Y. Tony Yang, David M. Studdert, S. V. Subramanian, and Michelle M. Mello, Journal of Empirical Legal Studies, Volume 5, Issue 1, 21–53, March 2008

Caps On Damages Ruled Unconstitutional

For Immediate Release
(404) 376-3495, Rebecca DeHart

Atlanta-- The Superior Court of Fulton County, Georgia today declared unconstitutional Georgia's medical malpractice cap on non-economic damages. The decision by Judge Marvin Arrington resulted from a case filed by Plaintiff Cheon Park.

Park, 59, fell from a ladder at his home in late 2006. He was taken to WellStar Douglas Hospital by ambulance with complaints of pain in his neck, shoulder, arm and pelvis. The ambulance attendants secured Parks to a backboard and immobilized his back and neck.

Once at the hospital, doctors treated Park for a dislocated shoulder and other injuries and then released him that same evening. Upon his discharge, Park could not stand on his own and had to be lifted by hospital staffers and his loved ones into his car. Just a few days later Park, still in pain, was taken to Grady Hospital where X-Rays revealed he had a severely damaged spine. Park is a now a C4 quadriplegic.

Faced with medical bills, costs pertaining to disability, economic damages, and quality of life damages arising from medical malpractice, Park—who will remain in a wheelchair for the rest of his life-- and his family pursued justice in our Courts. Upon filing his case, Park learned that Georgia’s law had recently changed regarding the definition of negligence in medical care with the Legislature’s passage of SB 3 in 2005. He learned that because he received treatment in the Emergency Room, his doctors were allowed to provide a much lower standard of care than doctors practicing in other locations. Parks then learned that his right to a jury trial was predetermined by a cap on the damages that a jury could award.

“Mr. Park is now a C4 quadriplegic and will be in a wheelchair forever. He and Mrs. Park are trying to piece their lives back together,” said Rob Roll, an attorney for Park. “Before 2005, Mr. Park would not have had to fight for his Constitutional Right to a trial by jury. I’m pleased to say that Judge Arrington penned a decision that upholds our Constitution and The Bill of Rights. The Parks are pleased with the decision today.”

Today’s decision ruled exclusively on the Constitutionality of caps on damages. The decision will likely be challenged and will move to a higher court.

Fred Orr, President of the Georgia Trial Lawyers Association said of the decision, “It always breaks my heart when I hear of families like the Parks who are the victims of someone else’s negligent conduct and they are unable to seek justice because our law prohibits them from doing so. Today’s decision shines a light on the challenges that real people in this state face when they are harmed by acts of negligence. To eradicate a certain class of people’s rights is not only immoral, it’s unjust, and Judge Arrington recognized this.

“I expect this decision to be appealed and that the discussion surrounding this important issue will continue,” stated Orr. “Judge Arrington obviously put a tremendous amount of scholarship and research into his decision. And I hope the coming discussions and debates surrounding this case will continue with the same levels of respect for our Constitution and for the families who live with the consequences of negligent acts by others.”

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Georgians don't always get what they pay for

For Immediate Release
(404)376-3495, Rebecca DeHart

SB 276, a bill ensuring fairness for auto-insurance policy holders passes the House Non-Civil Judiciary Committee unanimously and heads to House Rules.

Atlanta-- Insurance companies in Georgia collect premiums on Uninsured/Underinsured Motorist (UM) Coverage but may never pay out—even after a catastrophic accident. Following a year in which Insurance Companies raked in record profits (“Insurers’ profits skyrocket”, AJC, 3-27-2007) consumers continue to pay for elective UM Coverage (UM is not required by law), thinking that if they were a victim in an accident they may need to access that money, and often, they cannot.

Consider this scenario if it were to occur under current law:

You are in a bad car accident—and you are not at fault. Your overall damages are $100,000.
The at-fault driver has $50,000 in liability insurance—which you collect. You had purchased the optional UM Coverage for $50,000 and paid a monthly premium. You may think that you could access that $50,000 to cover the rest of the damages. Under current law you cannot access the UM Coverage that you have wisely paid for every month. You can only access the difference of the coverage if your UM is more than the at-fault driver’s liability coverage. Where does that leave you in this scenario? It leaves you with $50,000 in damages that have gone unpaid for and a policy that you have paid premiums on that you thought would help you out in just such a situation.

“Not many people are aware that they are paying premiums on a policy, every month, that they may not be able to access when they need it most,” said Buck Rogers, an Atlanta attorney. “SB 276 will change that. It will allow consumers to purchase Stacking UM Insurance and get exactly what they pay for.”

Under current law in Georgia, consumers can only choose Non-Stacking UM Coverage or no UM Coverage at all. SB 276, authored by Senator Cecil Staton, provides consumers a third choice—Stacking UM Coverage.

Stacking UM Coverage allows you to stack your coverage on top of the at-fault driver’s to the extent of the damages. In the scenario above, if you had Stacking UM Coverage, you would no longer be $50,000 in debt. SB 276 ensures that Georgians get what they pay for. Twenty-three other states, including our neighbors Alabama, Florida and South Carolina all have similar measures that allow stacking.

“Sadly most people don’t know that they can’t access this coverage until they are in a bad wreck,” said Chan Caudell an attorney in Cornelia. “Often I get calls from people who are injured, missing work, and don’t know how to cover their bills and feed their families. They thought the insurance they had chosen to purchase would help them. Unfortunately, I have to tell them it won’t. SB 276 would change that.”

Not surprisingly, the big insurance companies oppose SB 276, they say that it would increase premiums for UM Coverage. Insurance Commissioner John Oxendine also publicly opposed the bill last year. He said that SB 276 would have minimal benefits (Morris News Service, 4-11-2007). Consumers should not be fooled by this wealthy industry rhetoric. The industry’s own numbers show that SB 276 would increase the premium for $25k in UM Coverage no more than $3.70 a month. And UM Coverage is NOT mandatory under GA law, so no one will be forced to pay higher premiums under SB 276.

“For roughly the cost of a gallon of milk a month, families who choose to purchase Stacking UM will finally get what they have paid for—and when they need it most,” said Rogers. “SB 276 is the wisest piece of public policy legislation for every Georgian that I know of. Passing this bill will allow every insured in Georgia to decide what is right for themselves and for their families, will help doctors get paid and will help to keep families out of debt. It’s just the right thing to do.”

Georgians deserve to get what they have paid for. SB 276 brings fairness back to consumers.

*SB 276 was introduced in the ’07 session. It passed the Senate Insurance and Labor Committee, the Senate Floor and the House Non-Civil Judiciary Committee in ‘07. Time ran out and SB 276 was recommitted to the House Non-Civil Judiciary Committee. On March 3, 2008, SB 276 passed both the subcommittee and the full House Non-Civil Judiciary Committee unanimously. SB 276 now heads to House Rules before heading to the House Floor, and then, assuming passage, the Governor’s Office.

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Agritourism may be a dangerous pastime

For Immediate Release
(404) 376-3495, Rebecca DeHart

Senate is considering legalizing irresponsible behavior

Kids taking field trips to ‘The Country’ should beware

Atlanta- The Georgia State Senate is considering a bill that eradicates personal responsibility and puts Georgia’s children and families at great risk. Senate Bill 449 (SB 449), ‘The Landowners Protection Act of 2008,’ may sound innocuous but it is riddled with danger. The bill is sold as a great deal for Georgia’s landowners—yet it ignores the inherent risks it creates for the citizens of Georgia who are paying visitors on the land.

Since the inception of the state of Georgia, and of the United States of America, there has been a basic law concerning premises liability that requires property owners, who charge money for visitors to come onto their land, to act with ‘reasonable care’ for another’s safety. If the landowner should act carelessly or negligently there could be repercussions if someone gets hurt. The ‘reasonable care’ standard basically equates to whatever action or responsibility a hypothetical, reasonable person would exercise in a similar situation and may include certain responsibilities such as the owner performing a routine inspection of his or her land.

Members of the Georgia Senate are attempting to throw that standard—and the protections it offers the citizens of Georgia—right out the window. SB 449 lowers the ‘reasonable care’ standard to a ‘gross negligence’ standard for two business owners: a landowner who takes payment for those who hunt on his or her land, and a landowner who runs an ‘agritourism’ business.

“Gross negligence is nearly criminal behavior. It’s just a tiny bit better than intentionally hurting someone,” said Georgia Attorney Jay Sadd. “This means that a property owner can act with excessive carelessness and can still legitimately operate a business. And if a paying customer gets hurt by such negligence? Well, that’s too bad. Their Constitutional right of redress has been stripped.”

Concerns were raised by Sadd and the Georgia Trial Lawyers Association (GTLA) over SB 449’s blatant disregard for the safety of children, families and other paying customers who visit such properties. For example, under the proposed law, a landowner need not inspect his land for live bear traps before taking money from people who come to hunt on it. It would be completely legal for him to negligently, recklessly and carelessly leave hazards on his land. And if the twelve-year-old son of a hunter gets hurt by the trap, neither he, nor his father can hold the property owner liable for the injury.

GTLA adamantly believes that lawmakers should not relieve property owners of the duty to exercise reasonable care for children or any others who come onto their property.

“We firmly believe in personal responsibility. It’s common sense that a landowner is in the best position to know the hazards of his land. A visitor has never been there before. A child from the city would not know what is hazardous,” said Joe Watkins, President of GTLA. “That’s why our law always has placed the duty to simply exercise ordinary and reasonable care for a patron’s well-being on the landowner. SB 449 destroys this universally accepted principle—to the detriment of the citizens of this state who visit such properties. SB 449 is bad and dangerous public policy.”

Sadd’s testimony clearly pointed out that the Senate Economic Development Committee, in debating passage of SB 449, was actually debating whether to legalize irresponsible behavior that could cause injury or death to the children and families of Georgia and simultaneously leave them with no recourse.

“I just don’t think our great state should go in this direction—the direction of utter disregard for the safety and well-being of its citizens,” said Sadd. “I’ve heard about being thrown under a bus before—now, this bill would throw Georgia’s citizens under a tractor.”

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GTLA Condmens the practice of 'Trolling for Victims'

Immediate Release
(404) 376-3495, Rebecca Bukant

Atlanta-The tragedy resulting from the Imperial Sugar Refinery has been made worse by the solicitation by unprincipled lawyers vying for the victims' cases. The news has reported that TV ads, print advertisements and even visits to the Augusta Burn Center by lawyers have occurred. Members and leadership of the Georgia Trial Lawyers Association are outraged by this reprehensible behavior.

"The Georgia Trial Lawyers Association unequivocally condemns these unconscionable acts by attorneys," said the President of the Georgia Trial Lawyers Association, Joe Watkins. "We are shocked that attorneys from Georgia and other states are attempting to solicit the families while they are mourning the loss of loved ones and praying at bedsides at the Augusta Burn Facility."

The State Bar of Georgia Rules prohibit attorneys from contacting victims immediately following a tragedy. “This is not the time for lawyers from Georgia or any other state to harass families and victims of a tragedy. To say that is in 'poor taste' is putting it mildly," said Watkins. "The families and survivors will decide if and when they will seek legal advice."

The Georgia Trial Lawyers Association, and its leadership, strongly believes that the Rules governing Georgia’s State Bar regarding such solicitation should be strengthened and the Association urges the State Bar to take appropriate action regarding this matter.

"Unfortunately, it is the unscrupulous behavior of a few attorneys, often from out of state, that reflects poorly on the image of all attorneys. That conduct is in no way a reflection of the principles, ethics and the integrity of the members of the Georgia Trial Lawyers Association,” said Watkins. “I speak for not only myself, but for our entire Association when I say that my thoughts and prayers are with the workers of the Imperial Sugar Refinery and their loved ones."

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GTLA members demand safe water for Georgians

After twelve years of hard work, GTLA members Joel Wooten, Robert Killian, John Bell and Pam James continue to give. In 1995, the team of attorneys filed suit against Allied/LCP Plant on behalf of Glynn County. The company was found to have been knowingly polluting the Purvis Creek and Turtle River with PCBs and Mercury. The sites of the pollution became Georgia’s first Superfund Site, a site designated by the federal government as a locations of uncontrolled hazardous waste.

The case was settled in November of 2006 for a total of $50 million plus additional clean-up for the Glynn County water making it the largest environmental litigation in Georgia history. The outstanding work of this team of lawyers earned them the Ogden Doremus Award for Excellence in Environmental Law this past September.

And still this team of attorneys continue to serve this cause. Yesterday, December 11th, they presented $100,000 to several organizations involved in consumer and environmental protection.

Deborah Sheppard, the Executive Director of the Altamaha Riverkeeper one of the organizations to receive the donation said, “These funds will support the Altamaha Riverkeeper and the Altamaha Coastkeeper’s work to protect our coastal, estuary and marsh systems. We are fortunate to have attorneys whose skill and dedications created this legal victory which makes LCP accountable for their damage to the Glynn marshes. Their generous support of our coastal organizations is greatly appreciated.”

Justine Thompson of GreenLaw, another recipient of the donations said, “These attorneys filed this case back in January 1995 and began what was an epic twelve-year battle. We applaud their relentless pursuit of environmental justice on behalf of the health of our citizens, and are grateful for their gifts back to the community.”

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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Wal-Mart's greed costs employees

By: Timothy Santelli
Atlanta Attorney

Wal-Mart sure had a lot to be thankful for this past Thanksgiving. With stores popping up all over the nation, the franchise continues to grow at an exponential rate. In 2005, The New York Times said that Wal-Mart makes $20,000 in profit every minute. That’s right. Wal-Mart makes $20,000 in every minute of every hour of every day in profit—not revenue—but profit. That profit margin, 3 times that of Target’s and nearly 11 times that of Cosco’s, apparently isn’t enough for super-giant. Now the corporation is going after its own employees.

Last week, The Wall Street Journal ran a cover story about Deborah Shank, a 52-year old woman who had worked for Wal-Mart for eight years. Mrs. Shank was in a catastrophic car accident seven years ago when a semi-trailer truck hit her, leaving her permanently brain-damaged.

Her husband and her three sons went to court and obtained a relatively small amount of money—considering her damages—to assist in paying for the healthcare costs. The settlement, after court expenses, and other costs, left the Shanks with $417,000 to be put in a special trust for the medical needs that the 52-year old woman would depend on for the rest of her life.
Wal-Mart got wind of the settlement and the mega-corporation sued the Shanks for $470,000—to recoup the expenses it had spent on her medical care. Now, the entire trust fund for Deborah Shanks’ healthcare is going back to the multi-billion dollar corporation.

Wal-Mart was able to take this money from a working employee because the mega-corporation includes a provision in their health care plan reserving the right to recoup any money recovered by an employee in a personal injury suit. The Shanks were unaware of this clause.

Making this situation even more outrageously unfair is that Mrs. Shanks paid hefty premiums for the optional health coverage provided by Wal-Mart. While an average full-time employee at Wal-Mart makes $17,114 a year—over 16% of that salary will go back to Wal-Mart for healthcare—healthcare with numerous deductibles. Over 16% is over twice the national average of employee insurance costs.

In Georgia, Wal-Mart is the #1 employer of parents with children enrolled in PeachCare. Every year Georgia’s taxpayers pay nearly $10 million dollars to cover the more than 10,000 children enrolled whose parents work full time at the corporation and still can’t afford insurance.
Yet Wal-Mart profits. At $20,000 a minute.

Six days before Wal-Mart claimed victory, the Shanks 18-year old son was killed while serving in Iraq. Now, with no settlement money, the Shanks’ family, without their son, is relying on Medicaid and Social Security payments for her 24-hour care. Mr. Shanks is working two jobs and barely has time to be with his wife. Her health is declining; she can’t remember that her son was killed in the war, only that he died. A health-care administrator told Mr. Shank that divorcing his wife would benefit the family as she may be eligible for more public aid. The Shanks lost on appeal at the Circuit Court. They hope the US Supreme Court will hear their case.

In just 23 and-a-half minutes, Wal-Mart made the money awarded to the Shanks in profit alone. But it’s not enough for the greedy corporation. They took that money from a working family—a family who lost their son in the war, a family without a mother who can care for her children through no fault of her own.

Wal-Mart sure had a lot to be thankful last Thanksgiving. If only the working families in America, like the Shanks, could say the same.

Mandatory-Binding Arbitration Swindles Consumers and Employees of their Rights

As Congress nears their Holiday break, consumer advocates and GTLA remain hopeful about a bill authored by Georgia’s Congressman Hank Johnson and Wisconsin Senator Russ Feingold amending the Federal Arbitration Act.

Countless corporations and companies put a mandatory-binding arbitration clause into their consumer and employee contracts that disallow a defrauded or abused employee or consumer the right to a jury trial—a right guaranteed by the 7th Amendment of our Constitution.

A recent article in Mother Jones magazine about this consumer issue provides several examples of how this affects consumers. The author of the article and her husband had attempted to a buy a used-car. After finding one to suit their needs, they perused the contract. They were surprised to find out that if they had signed on the dotted-line they would not have only purchased a car, they would have signed their Constitutional Rights away if it turned out that they were defrauded by the dealership. Perhaps the car had been totaled by its previous owner; perhaps the car was a lemon.

The couple would have been forced into mandatory-binding arbitration, a costly and in some cases, it can be argued, biased process favoring corporations, leaving them stuck with the result. Unlike our modern court system which allows one side or the other to appeal to a higher court if one feels like they did not receive a fair shake, mandatory-binding arbitration is a one-time deal.

The article provides several other examples of this corporate practice. The restaurant Hooters only hires women after they sign a clause that says they cannot go to a jury for a claim of sexual harassment. Halliburton and the pharmaceutical company Pfiser employ a mandatory-binding arbitration clause in their contracts.

Support from both sides of the aisle has been garnered because of a particularly egregious area that mandatory-binding arbitration can be found—nursing homes. Families trust the facilities to care for their aging parents. Sadly, stories abound of nursing home abuse and neglect. To circumvent a family taking the facility to court over abuse, many nursing homes put into their contracts the mandatory-binding arbitration provision, prohibiting a family to seek justice on behalf of an abused loved one.

The amending of the Federal Arbitration Act would get rid of the mandatory-binding arbitration clauses in employment and consumer contracts. Arbitration would still be an option, if both parties agreed, but so would the Constitutional right of a trial by a jury of one’s peers—a right that GTLA supports and acts to preserve as it is a bedrock of this nation’s foundation.