Cal Biz Lit

New Article on MMSEA / MSP Compliance

    The focus of this blog is usually California legal matters.   However, because the issue seems so important to everyone in the product liability defense world (and the tort world in general), CalBizLit put up a post and a a white paper on what we called the perfect storm caused by three events:  the 2003 amendments to the Medicare Act reinforcing Medicare's right to recover benefits from  tort settlements;   the Center for Medicare and Medicaid's (CMS)  retention of a new recovery contractor;  and Congress's enactment of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA). 

    The upshot of all this was (a)  that product liability defendants faced double or even triple payment of Medicare's liens if they didn't make sure CMS was taken at the time of any settlement;  and (b)  defendants and insurers were being deputized to electronically report actions by Medicare recipients so the agency could make sure its rights were protected.  There's much more to it than this, and any company involved in personal injury litigation needs to get itself educated on MMSEA, and soon.

    Last month's issue of For The Defense, The Defense Research Institute's monthly mag, has a good article by Dorothy E. Kelly and Robert T. Lewis of Crowe Paradis, called The Next Chapter in Medicare Compliance.  DRI doesn't have its June issue up on line yet, but Crowe Paradis (which appears to have established a business to help companies with MMSEA compliance) has posted the article here.  Worth a look.

Medicare Liens and Personal Injury Settlements -- What Every Insurer and Self-Insured Company Needs To Know

    There is a sleeper issue out there involving Medicare liens in personal injury settlements.  While it isn't a strictly California issue, it's going to have a big impact on the defense and settlement of some product liability and other personal injury cases in California and everywhere else.

    The issue is this:  Congress has enacted legislation (42 U.S.C. 1395y(b)(7) & (8)) requiring that every insurer or self-insured company that settles a personal injury case with a Medicare beneficiary submit an electronic report of the settlement to CMS, the Center for Medicare and Medicaid Administration, so that Medicare's recovery contractor can recover every last dime of the benefits it has paid.  And if the recovery contractor can't get the money from the plaintiff, it's coming after the defendant or its insurer -- even if they've already paid the plaintiff.

    Adams Nye, CalBizLit's law firm, has just published a White Paper:  "Medicare Liens and Personal Injury Settlements -- What Every Insurer and Self-Insured Company Needs To Know."  It's downloadable here, and I've added it to the list of White Papers over on the right hand column of this blog.  Please download and distribute freely.

    This is important enough I'm going to leave this post at the top of CalBizLit.com for the next week or so.

Adams Nye MMSEA White Paper Coming Soon

    The whole world of settling personal injury cases involving Medicare beneficiary plaintiffs  is on the verge of getting turned on its head by the “Medicare, Medicaid and SCHIP Extension Act of 2007,” known by the less-than mellifluous acronym “MMSEA.”

    Stand by:  CalBizLit will be posting a new White Paper on this subject, probably Tuesday or Wednesday of this week.

This Just In: California Law Doesn't Allow Product Liability Claims By Plaintiffs With No Damages

   

    Company manufactures product.  Consumer buys, and uses, and gets intended  result.  Then, company recalls product from retailers (but not consumers) for failure to comply with standards (in this case, industry and FDA GMPs, or good manufacturing practices).  Consumer sues for herself and -- wait for it -- all others similarly situated.  She contends that

the pharmaceutical products . . . should not have been offered for sale in California because the products were adulterated, were not manufactured according to GMP requirements, and were not otherwise fit for the purposes intended. She seeks economic damages and restitution. Expressly disclaiming any personal injury claims, she "does not seek damages for personal injury or other physical harm, either for herself or any class members." 

    Says Northern District of California Judge Alsup:  thanks for playing, but  that's a no go:

As a concession to the shortness of life, California law does not allow a civil lawsuit to recover the purchase price for medicine consumed by the purchaser which performed as intended with no harm or fear of future harm merely because the consumer would not have purchased it had he or she known that the medicine came from a plant whose quality-control had been compromised. That the CDP was adulterated due to a lack of compliance with GMP requirements is not enough, without more, to state a claim. A plaintiff must allege an actual manifestation of a defect that results in some injury or rational fear of 'future injury in order to state cognizable claims. See Khan v. Shiley, 217 Cal. App. 3d 848, 855 (1990); see also Am. Suzuki Motor Corp. v. Superior Court, 37 Cal. App. 4th 1291, 1298-99 (1995).

    That would be last month's decision in Myers-Armstrong v. Actavis Totowa LLC, 2009 WL 1082026 (N.D. Cal. April 22, 2009).  In the understated words of Beck and Hermann (to whose Drug and Device Law goes a hat tip for this case), "What a worthless lawsuit."

Brief off-topic note:  At the beginning of the year, I quit posting the off-topic posts here, and mvoed them, the you-tubeology, etc. over to CalBizLitAfterHours.com, while keeping a list of links to them on the column to the right of CalBizLit.  I'm going to keep doing it this way, but just want to mention that AfterHours is featuring Booker T  right now. 

Dole Banana Workers' Contempt Hearing Set For This Friday

     Like practically every other California law blogger, I've put up a number of posts on the bizarre goings on in the Los Angeles Superior Court DBCP cases brought by supposed Nicaraguan banana plantation workers against Dole, many of which were dismissed by Judge Chaney last month for fraud.  You can see past posts here, here, here and here.  Judge Chaney's from-the-bench ruling dismissing cases for fraud is like nothing I've ever heard or read before, and thanks to The American Lawyer, the transcript is available here.

    Judge Chaney has apparently set a contempt hearing for Friday, May 8 at 3:00 p.m. p.d.t.  (I say apparently because the on-line docket is a little ambiguous).  Courtroom View Network will have live recorded on-line coverage available here.  Courtesy of CVN, I hope to have a link to a portion of the hearing available here over the weekend or Monday morning.

  Update:  CVN advises that due to technical problems, it won't have live coverage this afternoon.  It does expect to have recorded coverage at its site on Monday.

"To A Reasonable Medical Certainty" -- Legal Standard, Or Urban Legend?

    CalBizLit has been to tons of medical and other expert depositions where someone, usually a co-defendant counsel, has asked a series of questions along the lines of "Now Doctor, can you say to a reasonable medical certainty that . . . " [fill in blank:  this accident resulted in the need for future surgery, exposure to these chemicals caused this disease, there would have been a better outcome if the physician had met the standard of care, whatever].  In aweak moments, CalBizLit has even caught himself asking the same questions.

    But CalBizLit knows what the California rule is in tort cases:  In a case involving complex issues of medical causation, the plaintiff must show to a reasonable medical probability that the substance, the product, the negligence, the whatever, caused the present or future harm for which the plaintiff wants to be paid money.  That's Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953; Jones v. John Crane, Inc. (2005) 132 Cal.App.4th 990, Whitely v. Phillip Morris, Inc. (2004) 117 Cal.App.4th 635, Bockrath v. Aldrich Chemical Co. (1999) 21 Cal.4th 71 and a bunch of other cases.

    More after the jump.

Not Hard To See That Coming (Dole DEHP Litigation Department)

    L.A. Superior Court Judge Victoria Chaney dismisses two cases by Nicaraguan banana workers against Dole because of attorney misconduct.  Per Bloomberg.com: 

“What has occurred here is not just a fraud perpetrated on this court, but a blatant extortion of the defendants,” Chaney said. “I cannot in good conscience allow this case to continue.”

    Further:

Chaney said she will refer the case to the appropriate state bar associations and to prosecutors. 

Cal Supremes Dismiss Review in Buell-Wilson Mega-Dollars Case Against Ford

    CalBizLit has followed this long strange trip here, here and, for a long summary of the procedural history,  here.

    Short version:  jury awards $122M in compensatories and $246M in punitives.  Courts chip away at the verdict as it bounces up and down through the appellate process, until finally there's nothing left but a scant $27M in compensatories and $55M in punitives.  Cal Supremes grant review on Philip Morris USA v. Williams, but put the case on hold pending SCOTUS action on Williams II.

    SCOTUS dismisses certiorari in Williams II.  Plaintiff in Buell-Wilson moves to dismiss review.  And yesterday, Cal Supremes rule as follows:

The United States Supreme Court having dismissed the writ of certiorari in Philip Morris USA Inc. v. Williams (No. 07-1216) on March 31, 2009, plaintiffs' motion to dismiss review in this matter is granted.

    Meaning: nothing left for Ford but one more shot at SCOTUS (which seems like a long-shot).  Meanwhile, the very plaintiff-friendly Court of Appeal decision in Buell-Wilson remains unpublished and unciteable by any other party in any other case. 

This Really Is Ridiculous

    Although I usually represent defendants in tort, consumer and business litigation,  CalBizLit.com is not a tort reform site.  CalBizLit believes in the civil courts and the jury system.  CalBizLit thinks that while there are occasional aberrant, and even shocking, results (which of course get all the headlines), more often than not, courts and juries get it right.

    However.  There are exceptions.  And today, CalBizLit discusses one of them.  It's an  exception that is indefensible, that clearly offended a Los Angeles trial judge, and that needs fixin' at the appellate level.

    More after the jump.

Dole Fraud Hearing Begins

    I've blogged here and here about the Dole DBCP cases in Los Angeles.  First, six Nicaraguan filed workers tagged the company for $3.2 million, claiming sterility from exposure to this nematocide while working in the fields.  Plaintiffs were awareded punitive damages, which the trial judge took away, and she reduced the compensatoris to $1.58 for good measure.  Then the trial judge got wind that many of the related cases might be invented and ordered a hearing, which started yesterday.

    The LA Times reports that Dole's attorney, in his opening statement, told the court that "witnesses feared being killed for testifying about the scheme," and described a "decades long" scheme to defraud companies.  Judge Chaney "said she was concerned for the safety of investigators and attorneys and feared obstruction of justice and interference with due process." 

    But here's the real tell: 

Attorneys for the plaintiffs who sought to sue Dole made only a brief opening statement. But one of the lawyers, Michael Axline, said he agreed with the Dole lawyer that "all parties were in a nightmare situation."

He expressed regrets for the actions of a onetime co-counsel in Nicaragua who is now accused of engineering the fraud.