Lawsuit Reform Watch

Must-read post by Robert Elliot Chilson via Trenton United - “Got Lawsuits?”

Must-read post by Robert Elliot Chilson via Trenton United - “Got Lawsuits?” http://trenton-united.blogspot.com/2011/03/review-of-city-council-agenda-for.html

Trenton United blogger Robert Elliot Chilson did his homework in advance of the City’s council meeting tonight – nearly two and a half pages of the city’s 8 page agenda are tort claims and civil actions!  You can view them the City’s website, under the heading “Communications & Petitions”:  http://www.trentonnj.org/uppages/3-15-2011%20DOCKET%20CITI1.doc

Chilson observes the following:

• Workman’s Comp lawsuits are a staple on Trenton’s City Council agenda.  Tonight’s Council meeting features 5 Workman’s Comp settlements, totaling $18,008.00.

• The City subcontracts a significant amount of its legal work to private law firms, which drives taxpayers’ total litigation costs even higher.

• Nine of the actions are people suing the City for “Property Damage,” which he suspects are damage to cars due to potholes.  Wouldn’t this money be better spent on fixing the problem instead of incurring a bottomless financial aftermath of lawsuits?

It would be interesting to see where Trenton’s municipal insurance premiums stand in comparison to other municipalities in the state.  As we noted in an earlier post, the cost of liability claims per 100 residents rose 104 percent statewide between 2000 and 2010, according to the Municipal Excess Liability Joint Insurance Fund. 

Trial bar fighting efforts to restrict lawsuit lending

Can you imagine agreeing to a loan on which you would have to pay over 36 percent in interest?

Of course not, because it would be absurd unless you were really desperate. 

Many states cap the interest rate a lender can charge its customers.  In Indiana, for example, it’s capped at 36 percent – still a generous deal for the lender, but protects the borrower from being taken advantage of, and having to pay back much more than their loan is worth. 

One group says a 36 percent interest rate is not high enough – and that they should be exempt from state lending laws.  Meet the personal injury lawyers. 

Some companies are in the business of advancing money to would-be plaintiffs involved in personal injury lawsuits.  According to a New York Times report by Binyamin Appelbaum, there are about a dozen such companies nationwide, and several smaller companies.  They collectively lend plaintiffs $100 million per year in increments of a few thousand dollars to cover their housing and medical expenses.  Plaintiffs pay back their loans plus interest after lawyers win their case.  If the lawyers lose, they owe nothing.  The message seems to be that filing a frivolous lawsuit can be a pretty good investment. 

Personal injury lawyers say that’s why they should be excluded from states’ loan caps: these aren’t loans – they’re investments.  And they’re taking their show on the road to Legislatures across the country.  Oasis Legal Finance in Illinois recently proposed exempting lawsuit lending companies from Indiana’s 36 percent cap on interest.  Senator Randy Head said that Oasis’s advocacy first brought his attention to the issue, which resulted in his introduction of Senate bill 97.  It included a modest restraint on lenders by preventing them from providing anything beyond money to plaintiffs, as well as assertions from the industry that they were attempting to self-regulate in the name of consumer protection.  It was that portion that helped to carefully pitch it to the state Senate as a pseudo-reform bill and ultimately led to that chamber’s passage of it last month, with a vote of 36 – 14. 

“Most of what they proposed is contained in the bill,” the sponsor acknowledged to the New York Times. 

While “lawsuit lending” might help one who is truly besieged with medical bills and unable to work due to someone’s negligence as their case is being sorted out, it’s hard to deny that it also gives plaintiffs and their attorneys a hefty incentive to pursue the largest financial rewards possible. 

The personal injury lawyers’ trade group is trying to carve themselves out of regulation through the legislative process in Alabama, Kentucky, and Maryland as well, and may be focusing on Arkansas and Nevada in the near future.  The watchful eye of the chambers of commerce has kept efforts at bay in Kentucky, which have successfully blocked similar legislation from passing the state Senate.  And since all of these bills were introduced in February 2011 or later, we may only have seen the tip of the iceberg in trial lawyer lobbying. 

Photos from NJLRA's Spring Membership Luncheon

Rich Bagger, Chief-of-Staff to Governor Christie

Marcus

A-1982 released by Assembly Health Committee!

Assembly bill A-1982, sponsored by Assemblyman Herb Conaway, was voted out of the Assembly Health and Senior Services Committee today, 8 votes in the affirmative and two abstentions. 

A-1982 takes steps to rectify the New Jersey Supreme Court’s 2010 decision in Ryan v. Renny, which gutted the affidavit of merit statute.  It also protects volunteer physicians from medical malpractice liability and prevents insurance companies from immediately imposing an increase on doctors who are named in a malpractice suit. 

Several committee members, including Assemblywomen Celeste Riley and Elease Evans, spoke of the impact New Jersey’s doctor crisis will have on women’s access to healthcare.  New Jersey already has a 12% gap between the number of New Jersey’s patients and doctors available to treat them.  This number is expected to widen by another 3,000 doctors by the end of the decade if changes are not made, and higher-risk specialties like obstetrics will be hit hardest. 

Assemblywoman Nancy Munoz, who voiced language concerns in a previous hearing, and Assemblyman Jerry Green were the lone abstentions. 

New York’s Medicaid Redesign Task Force recommends a cap on noneconomic damages; the trial lawyers hate it

Nearly every state in the country is grappling with rising Medicaid costs.  New York, however, bears the distinction of having the highest Medicaid costs in the nation, and also leads among avoidable hospital use and costs.  On a per capita basis, it runs about twice the cost of the national average. 

To help his “functionally  bankrupt” state cleanse its Medicaid program of inefficiencies and waste, Governor Andrew Cuomo convened a Medicaid Redesign task force to “redesign and restructure” the program. 

The task force consisted of 30 stakeholders – doctors, hospitals, nursing homes, the Greater New York Hospital Association, and other patient care providers you would expect.  The objective, according to the Syracuse Post-Standard, is to move nearly all of the state’s 4.7 million Medicaid recipients to managed care within the next three years in order to stop the use of hospital emergency rooms for preventative and routine care.  Its expected savings could exceed $1.1 billion.  The task force issued 79 recommendations last Thursday for the approval of the Governor and Legislature.  And they include a $250,000 cap on noneconomic damages – which would save hospitals hundreds of millions of dollars in insurance premiums alone. 

Now enter the trial lawyers.  They’re throwing a fit over aforementioned recommendation.  Not because it saves taxpayers’ money, but because their interests weren’t represented on the task force.  New York Times blogger Nicholas Confessore has noted their frustrations in detail. 

New York State faces a $10 billion deficit, and Governor Cuomo has said he needs to cut Medicaid spending by $2.85 billion and limit it to 4 percent annual increases thereafter if he has any chance of plugging it.  Josh Vlasto, a spokesperson for Governor Cuomo, called the interest group opposing this recommendation a “mouthpiece for the trial lawyers.” 

I suppose the task force could have recommended cuts in patient spending instead of a cap on litigation and insurance spending.  As a patient, however, wouldn’t you rather have a $250,000 cap on noneconomic damages instead of a reduction in care?  It seems nonsensical and transparent for trial lawyers to insist that the only way Medicaid recipients can receive more efficient care is to make sure the lawyers’ thirst for uncapped noneconomic medical damages remains quenched.   

What do North Carolina, Oklahoma, and North Dakota have in common?

Tort reformers in all three states had significant victories this week.

In North Carolina, S-33 would cap noneconomic awards in malpractice cases at $100,000.  It was advancing to the full Senate for a vote as of Thursday. 

A similar piece of legislation passed the full Senate in Oklahoma.  S-863 would cap noneconomic damages at $250,000. 

Meanwhile, in North Dakota, progress was made in the judicial branch.  A group of thirteen out-of-state plaintiffs had filed a product liability suit in North Dakota, which has one of the longest statutes of limitation in the country.  The state Supreme Court ruled in favor of the defendant in Vicknair v. Phelps Dodge.  Several groups, including NFIB and the U.S. Chamber of Commerce, argued that the statute of limitations from the plaintiffs’ home states should be applied, not the more plaintiff-friendly statute of limitations in North Dakota. 

Governor: NJ will double R&D tax credit

Governor Chris Christie’s budget address included several tax cut proposals, the first of which would be significant to one of New Jersey’s signature industries: pharmaceuticals. 

“We will double our State Research and Development Tax credit to encourage High Tech and Bio-Tech entrepreneurs to create their next great discovery, and the jobs that go with it, right here in New Jersey,” he said. 

New Jersey’s pharmaceutical companies have been shedding jobs over the past few years, according to the Healthcare Institute of New Jersey. Doubling New Jersey’s Research and Development Tax credit, as encouraging as it is, address our hemorrhaging of pharmaceutical jobs in part.  Imagine how much further this proposal would reach if coupled with meaningful tort reform legislation to address the assault on the industry by the trial bar. 

A-3333, which would reform New Jersey’s Consumer Fraud Act, comes to mind.  After all, why should New Jersey settle for “Hellhole” status when it has the potential to host High Tech and Bio-Tech entrepreneurship? 

The prepared text of the Governor’s budget address is available here. 

A-3333 gains support

Assemblywoman Alison Littell McHose (R-Sussex) signed on as a cosponsor of A-3333, increasing the total number of sponsors and cosponsors to seven.  She joins primary sponsors Assemblymen John McKeon (D-Essex), Ralph Caputo (D-Essex), and Domenick DiCicco (R-Glouster), and cosponsors Assemblywomen Amy Handlin (R-Monmouth), Mila Jasey (D-Essex), and Elease Evans (D-Passaic). 

A-3333 calls for reforms to New Jersey’s oft-abused Consumer Fraud Act (CFA).  If enacted, A-3333 would do the following:

• The individual cause of action provided for under the CFA would be available only to a “consumer,” who is defined as an individual and specifically excludes businesses;
• Require that a plaintiff relied to his detriment on the use or employment of the unlawful method, act, or practice;
•  Give the court the discretion to award damages appropriately, not to exceed three times the amount of actual damages sustained by the consumer;
• Provide that the CFA applies only to transactions which occur in New Jersey.

More information about New Jersey’s CFA is available on NJLRA’s website. 

Read NJLRA’s letter-to-the-editor in this week’s edition of NJBIZ

Trial lawyers need a new hobby / Marcus Rayner

Excerpt:

New Jersey earned its reputation as the nation’s “medicine chest” many years ago. If you live here, chances are good that you know someone who is employed directly by a pharmaceutical company or indirectly through service contracts.

Read entire letter on the NJBIZ website. 

Which state is the most litigious in the nation? New Jersey, of course…

NJLRA’s former chair, Taysen Van Itallie, underscores just how serious New Jersey’s “Sue Me” image has gotten in the New Jersey Law Journal.

New Jersey had 10,579 new civil cases in 2008 – more than twice as many filed in Illinois, a state with a larger population. 

It begs the question: how exactly can we make our state more attractive to businesses without addressing the tort situation? 

“Businesses of all sizes are sensitive to a state’s lawsuit climate.  Let’s be sure we have a plan to improve ours,” writes Van Itallie. 

You can read his entire op-ed in the New Jersey Law Journal here. 

NJLRA Statement on the Congressional Civil Justice Caucus

A new bipartisan issue caucus in Congress was announced today- the Congressional Civil Justice Caucus, which will focus on legal reform issues.   NJLRA is excited, to say the least. 

I applaud Congressmen Bob Goodlatte (R-VA) and Dan Boren (D-OK) for taking the lead on this issue at the Congressional level.  It’s helpful to have a bipartisan caucus focus on advancing a civil justice system conducive to the United States’ global economic competitiveness. 

Here in New Jersey -  a state where consumers have neither an obligation to ask for a refund before taking a business to court, nor to have encountered actual fraud in order to sue under the state Consumer Fraud Act - the Caucus carries a special significance for us.  It shows the hardworking men and women of our state that members of Congress are willing to carry our fight against lawsuit abuse to the highest levels of government.  Knowing that we have support as we try to stop the hemorrhaging of our key industries is invaluable. 

Most importantly, the Congressional Civil Justice Caucus gives us the opportunity to expose the target that the pharmaceutical industry has on its back in our state.  In the last year New Jersey shed 7.6 percent of its pharmaceutical jobs, due in part to litigation tourism by the trial bar.  Instead of the nation’s “Medicine Chest,” we are becoming a national leader in pharmaceutical job exportation. 

Ninety-three percent (93%) of the mass tort plaintiffs in New Jersey suing our pharmaceutical companies are out-of-state residents seeking the use of our plaintiff-friendly laws.  This is an unacceptable situation we must correct in order to achieve solid economic growth.  I am hopeful that the Caucus will push for reforms similar to A-3333, sponsored by Assemblyman John McKeon (D-Essex) in states where the Consumer Fraud Act encourages abuse. 

New Jersey is quickly losing ground to other states which have enacted common sense tort reform measures.  I encourage all members of New Jersey’s congressional delegation to support the Civil Justice Caucus and participate in this bipartisan forum. 

What do taxpayers in New Jersey and Louisiana have in common?

We’re paying for lawsuits. Lots of them. 

The Louisiana Lawsuit Abuse Watch (LLAW) released a study which found that eight of the state’s municipalities spent a collective $52 million fighting lawsuits between 2006 and 2009.  $37 million was spent in the form of judgments and settlements; $14.9 went to outside counsel. 

That’s $52 million.  In eight towns.  In just three years!

You may recall a Lawsuit Reform Watch post from April 2010, in which the cash-strapped city of Irvington, New Jersey, faced the loss of 20 police officers and 10 firefighters to help close a $5 million budget shortfall.  This announcement from Mayor Wayne Smith came days before an appellate court rejected the city’s attempt to have its insurance company cover a $5 million personal injury suit. 

Melissa Landry, executive director of LLAW, acknowledged that some lawsuits are legitimate, but that some “are filed purely in search of enrichment from the lawsuit lottery.  At a time when Louisiana, like most other states, are struggling, the public’s financial resources could have made an impact elsewhere: preserving the jobs of law enforcement personnel. 

The report, “Drinking from the Taxpayer Trough” can be found here.     

The Daily Show’s Lewis Black on the Taco Bell Lawsuit

“It’s not like you eat it when you’re sober…” 

Lewis Black’s satirical segment, “Back in Black,” takes on the class-action lawsuit filed against Taco Bell. 

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Back in Black - Meat Edition
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog</a> The Daily Show on Facebook

 

The Alabama law firm representing the plaintiffs says that Taco Bell’s meat is only 36 percent beef – short of the 40 percent beef requirement set by the USDA.  Taco Bell counters that it’s actually 88 percent beef.  Much thanks to Lewis Black & the Daily Show for casting light on this lawsuit!

Good reading: Tort reformers have momentum in NJ

Sherman “Tiger” Joyce, president of the American Tort Reform Association (ATRA), had the following to say about New Jersey’s prospects for civil justice reform in The Metropolitan Corporate Council publication:

“Of course, the litigation industry also remains strong throughout New Jersey, home to once-and-future judicial hellholes, and ATRA expects it to again push an expansion of wrongful death liability while actively opposing consumer fraud reform. But tort reformers, backed by Governor Chris Christie, have some momentum. They support three affirmative reform bills already filed during the current legislative session. One seeks to limit appeal bonds to the total value of the monetary judgment or $50 million, whichever is less. Another would revise the individual's cause of action under the Consumer Fraud Act and make other revisions regarding applicability (see trial lawyers' opposition noted earlier). The third pertains to liability, standards of care and insurance coverage for medical malpractice actions.”

President Obama: I’m willing to look at medical malpractice reform to rein in frivolous lawsuits

President Obama’s State of the Union address touched on two areas of interest to NJLRA supporters: medical malpractice reform and a flaw in the healthcare reform bill which requires all businesses to track expenditures to all vendors. 

Frivolous medical malpractice lawsuits affect the ever-increasing insurance premiums each doctor must carry, and these costs can vary significantly by specialty and by state.  In New Jersey, the medical malpractice crisis has lead to a homegrown healthcare crisis of our own, in which we are seeing fewer doctors willing to practice specialized medicine within the jurisdictions of the Garden State. 

Beginning January 1, 2012, all businesses would need to track expenditures over $600 with other vendors, and prepare a Form 1099.  This requires tracking down the taxpayer ID for each vendor as well.  This would be an especially difficult for small businesses, which lack the accounting resources of larger companies.  Fortunately, President Obama acknowledged the onerous burden this portion of the healthcare bill would place on economic growth. 

Excerpts from the President’s speech regarding medical malpractice and small business bookkeeping under the new healthcare law are quoted below:

Medical malpractice

“This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I'm willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.”

Small business bookkeeping under the new healthcare law

“Now, I've heard rumors that a few of you have some concerns about the new health care law. So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.”

You can read the entire speech here, via ABC’s website. 

You can’t make this stuff up: Do not drive or operate machinery [or polish guns]

A New Jersey man who saw his doctor about depression and insomnia began taking Zoloft and Ambien.  He then decided to polish his .38 caliber Colt revolver. 

The rest almost seems incredulous.    Robert Buck reportedly fell asleep while ‘inspecting’ his gun.  It lay in his right hand until he thought he heard the phone ring, and reached over with his left hand to get it.  The gun went off, and Buck took a bullet to his mouth.  He ended up with multiple skull fractures and blindness in his left eye. 

Robert Buck is now suing his doctor for medical malpractice, saying that prescribing both an anti-depressant and a sleep aid together deviated from accepted standards of medical care.  He has a separate product liability claim pending against the drug manufacturers. 

The issue now before the New Jersey Supreme Court is who may be considered an expert under the Affidavit of Merit Statute, N.J.S.A. 2A:53A-41.  Buck’s doctor specialized in family medicine but is board certified in emergency medicine.  His attorney obtained an affidavit from an expert who was board certified in emergency medicine, and also obtained an affidavit of merit from a psychiatrist.  Ocean County Superior Court Judge Steven Nemeth dismissed the suit because the attorney did not obtain an affidavit from a family-medicine practitioner, according to the New Jersey Law Journal.  An appellate court agreed.  

For its part, I’m told that the Ambien’s current labeling reads: “Warning: May Cause Drowsiness.”  Several internet searches reveal that it also cautions patients not to do “anything that requires you to be alert or awake.”  It also says not to “drive, operate machinery, or perform other hazardous activities after taking Ambien.” 

Controlling Property Taxes Through Legal Reform

Your friendly blogger spent Friday morning participating in a panel discussion hosted by the Insurance Council of New Jersey.  Our role as a panel was to explain the relationship between the courts and ever-increasing municipal insurance premiums.   Every taxpayer I know thinks their property taxes are too high- but we seldom explore how our state’s civil justice system played a role in worsening the crisis. 

What I learned there was alarming. 

A 10-year claims study by New Jersey’s largest public sector risk pool showed that the cost of lawsuits to property taxpayers is soaring, and in fact has nearly doubled in the past five years, due to a legal climate that encourages litigation even for cases that have little merit.

David Grubb, executive director of the New Jersey Municipal Excess Liability Joint Insurance Fund (MEL), said the total cost of claims against New Jersey government entities runs between $800 million and $1 billion a year, including liability, workers compensation and property losses.

The MEL study, which included data from 365 municipalities, found that the cost of liability claims per 100 residents rose 104 percent from $587 to $1,200 between 2000 and 2010, including a jump of 87 percent just since 2005.

 The cost of employment practices liability increased from $41 per full time employee in 2000 to $485 in 2010. These figures do not include the cost of claims not covered by an insurance program.

 Meanwhile, tort liability stood at $475 per 100 residents in 2000 and jumped 66 percent to $791 by 2010.

It isn't just small businesses and large companies that are suffering under New Jersey's legal system, it's our towns, school districts and counties.  As property taxpayers and consumers, we are hit twice to pay the lawyers.

It's interesting to see how alarming the data is.  More forums are planned around the state and we will post them as we learn of them.

New Jersey needs its Medicine Chest

As 2010 came to a close, the Healthcare Institute of New Jersey released its 2010 Economic Report.  It showed that New Jersey’s pharmaceutical industry is both threatened (New Jersey’s pharma jobs declined by 7.6 percent over the previous year),  and also more critical to our state’s economy than ever, as the industry’s total economic impact is at an all time high of $29.25 billion.  This news came the same week as NJBIZ reported that whistleblower lawsuits are rapidly becoming a favorite target for trial lawyers, who have set their sights on the pharmaceutical industry. 

David S. Barmak, an attorney who was quoted in the NJBIZ article, described the increasing number of whistleblower lawsuits as “a huge assault on the pharmaceutical industry.”  Another attorney quoted notes that as people find out about the “potential rewards,” more whistleblower suits pop up. 

Whistleblower lawsuits help government entities recoup overbillings and mistaken billings from a private company when used as intended.  But with individuals realizing they may cash in on a share of recovered funds, and trial lawyers all too eager to assist, New Jersey’s premier industry is an attractive target – and government entities, the article notes, can be difficult negotiators.  This increases pressure to settle, as Dey Inc. did recently.  Its $280 million settlement was one of at least four made by pharmaceutical companies in the month of December alone.  Abbott Laboratories, Inc., also coughed up a $421.1 million agreement. 

New Jersey earned its reputation as the nation’s “medicine chest” many years ago.  If you live here, chances are good that you know someone who is employed directly by a pharmaceutical company or indirectly through service contracts.  The 2010 Economic Report shows that especially as unemployment persists, New Jersey’s pharmaceutical companies are more important to our tax base than ever, and it’s crucial that we understand what is driving them out.    Let’s just say that the trial lawyers’ newest hobby doesn’t help. 

Salty Claim Against Denny’s Doesn’t Float in Court

As you may remember, New Jersey’s Consumer “Fraud” Act is so broadly constructed that a Tinton Falls resident was able to sue the Denny’s restaurant chain last year, claiming that he (and the public at large) had no idea his favorite “Moons over my hammy” dish was “loaded up with the salt.”  Plaintiff Nick DeBenedetto argued that it amounted to consumer fraud (in the State of New Jersey, at least).  He was being treated for hypertension, after all.  An advocacy group and local attorneys adopted the cause on behalf of Denny’s patrons, unsuspecting or not, in a class action lawsuit.    

Fortunately, the lawsuit was dismissed.  And a state court of appeals upheld this decision, according to a report by Ken Serrano in The Home News Tribune.

“Neither plaintiff nor the punitive class he claimed to represent asserted any physical injury or harm as a result of defendant’s failure to disclose the sodium content,” the court said in its decision.  DeBenedetto will not be permitted to sue under the New Jersey Consumer Fraud Act, but he may be able to pursue an action under the Products Liability Act. 

Commentary suggested that the plaintiff reimburse Denny’s for the costs it incurred.  Unfortunately, history suggests that honest consumers are usually the ones who end up bearing these costs.  Real consumer protection doesn’t mean more ways to sue – it means keeping junk litigation like this out of the civil justice system. 

Right after swearing in, Wisconsin Governor starts tackling tort reform

As Governor Christie prepares for his State-of-the-State address, most of us in the Garden State probably didn’t take much note of the gubernatorial changing-of-hands in Wisconsin earlier this month. 

Newly minted Governor John Walker convened a Special Legislative Session to introduce his Civil Justice Reform Package.  It’s a significant part of his “Wisconsin is open for businesses” campaign.

Expert testimony, non-economic damage award limits, and product-liability are key reforms included in this proposal.  You can learn more about Governor Walker’s pro-civil justice agenda here. 

Beyond the Toolkit: Controlling Taxes Through Legal Reform

Every mayor and taxpayer wants to control property taxes. But many are unaware of the role that New Jersey’s courts have played in driving up tax bills in recent years. The erosion of sovereign immunity and the expansion of areas in which municipalities – and by extension, taxpayers – are expected to foot the bill have forced towns to spend ever-increasing sums on insurance premiums, risk management, and maintenance at a time when they can least afford it. Elected officials and the insurance professionals that assist them are invited to learn how legal issues affect their bottom lines and how they can work together to reverse current trends.

The Insurance Council of New Jersey will be hosting a seminar next Friday, January 14^th, at the Trenton Marriott entitled “Beyond the Toolkit: Controlling Taxes Through Legal Reform.” 

Confirmed speakers include: Mary Caffrey, President of the Charleville Company, LLC; Matthew J. Giacobbe, Esq., Partner, Cleary, Giacobbe, Alfieri, Jacobs LLC; David N. Grubb, Chief Executive Officer, Municipal Excess Liability Joint Insurance Fund; and Richard Wilson, Selective Insurance Company. 

They will discuss how towns can put policies in place to reduce their costs related to risk management and their insurance policies, and will be available to answer questions.  The cost is $50, which you can pay securely through ICNJ’s website. 

Registration begins at 9 a.m. at the Trenton Marriott on January 14^th.  The workshop will run from 10 a.m. until noon. 

Last chance to vote for the most obnoxious lawsuit of 2010!

The contenders:

A teen intentionally drives her car into oncoming traffic, killing a pregnant mom and her 13-year-old son - and then sues the surviving family members for her 'mental anguish';
A drunk New Jersey man drives crashes his motorcycle into a car, and then sues the bar for his injuries;
A customer spills hot tea on herself and sues Starbucks;
A fast food restaurant manager sues McDonald's for making him fat.

Click here to cast your vote!

2010 in Review

            I am happy to report that the 214th NJ legislature has taken positive first steps toward reforming New Jersey's civil justice climate.  Most notably, A-2473/S-480, which extends appeal bond caps to all industries, is now on second reading in the General Assembly.  We also saw efforts to reform New Jersey's oft-abused Consumer Fraud Act with the introduction of A-3333.  Finally, the Assembly Health and Senior Services Committee held a hearing earlier this year on A-1982, which would reform New Jersey's medical malpractice environment for our state's doctors.    Collectively, these initiatives would discourage frivolous class-action litigation and enhance the integrity of scientific evidence admitted in our courts.  NJLRA would like to thank all of the bills' sponsors and the legislative leadership in both parties for their commitment to advancing pro-business legislation.  Together with our supporters, we are able to educate the legislature on the importance of these initiatives.  Senator Raymond Lesniak (D-Union), who was NJLRA's keynote speaker at our Fall Membership Luncheon, said NJLRA's proposals will be a "cornerstone" of the state's effort to reposition New Jersey's economy for long-term growth.  We enthusiastically accept Senator Lesniak's wisdom. 

            If you think you have seen more of NJLRA lately, it's because we have increased efforts to get our message out.  In 2010 we re-launched our website, where you can find any of the eight op-eds I authored over the past year.  NJLRA has also been the focus of several news stories and has written a dozen letters to-the-editor.  I encourage you to visit NJLRA's Blog and Facebook page.  You can also follow us on Twitter. 

We continue to make an effort to reach out to New Jersey's small business community.  A recent poll we conducted in conjunction with the Monmouth University Polling Institute suggests that many of the Garden State's small businesses feel vulnerable to abusive lawsuits.  We are hoping to articulate the unique needs of New Jersey's small business community as we meet with legislators across the state. 

      As we have said in the past, New Jersey cannot recover from this recession without sound policies that support job growth.  With limited resources to fund tax breaks or business incentives, legal reform offers policymakers in Trenton a revenue-neutral policy change that can send a very strong message to employers all across the nation.  States which have enacted tort reform, including Texas, now lead the country in job growth and physician retention. 

            Thank you again for your continued support.  I am confident that we will continue our path toward reforming New Jersey's civil justice laws in 2011.  Please save the date for NJLRA's first Membership Meeting of 2011, which will be held on Tuesday, March 8th at noon at the Trenton Country Club.  We will discuss our plans for 2011.  As always, please do not hesitate to contact me if I can ever be of assistance. 

Vote in NJLRA’s Most Obnoxious Lawsuit of 2010 Poll

The contenders:

A teen intentionally drives her car into oncoming traffic, killing a pregnant mom and her 13-year-old son - and then sues the surviving family members for her 'mental anguish'; A drunk New Jersey man drives crashes his motorcycle into a car, and then sues the bar for his injuries; A customer spills hot tea on herself and sues Starbucks; A fast food restaurant manager sues McDonald's for making him fat.

Click here to cast your vote!

In case you missed it...

Some obnoxious lawsuit highlights from earlier this year:

Manager of a McDonald’s restaurant in Brazil sues the company for making him fat – and wins.  $17,500 for his weight gain. 

In a failed suicide attempt, a Montana teenager deliberately drives her car into oncoming traffic, killing a pregnant mother and her 13-year-old son who were on their way home from a chorale concert – and the teenage driver had the audacity to sue the family’s estate for ‘mental anguish’ and potential lost earnings, among other things. 

Texas pursues the Holy Grail of Tort Reform

Twenty-three counties lacked an E.R. doctor.  Ten counties lacked an OB-GYN.  No, this is not a third world country: it was Texas, prior to tort reform. 

The Wall Street Journal calls the pre-reformed Texas a “holy place on the tort bar pilgrimage,” that has now morphed into a “Mecca for doctors.”  Incentives didn’t hurt, either, and Texas now leads the country in job creation.  Product liability, class-action certification, and noneconomic damage caps were reformed in 2003 and 2005.  Now, according to the Journal, Texas Governor Rick Perry wants to extend his state’s tort reform successes – British style.  It’s a thinly-veiled deterrent to filing frivolous lawsuits, which drive up business costs and drive down economic growth. 

The “loser pays” concept isn’t a new one.  The purest-form version of “loser pays” is that the losing party picks up the attorney’s tab.  The proposed caveat would impose a penalty on the losing firm which files the case, forcing trial lawyers to think twice before filing questionable claims. 

Governor Perry is also calling for “new legal channels” to expedite claims below $100,000, but details about this proposal aren’t readily available. 

It sounds like Texas might be headed in the right direction.  It begs the question: if Texas can entice doctors, why can’t New Jersey?

Read NJLRA’s op-ed in The Record

Small businesses have historically played a crucial role in getting the workforce back on track after economic disarray, and in New Jersey, they have served a crucial cultural purpose as well. The fact that nearly one-in-five small businesses has seriously considered leaving New Jersey should set off alarms.

FOR MANY OF US it may be hard to conceptualize, but there was a time in New Jersey’s recent history when our state was a beacon for the American Dream instead of a disincentive to it.

An abundance of natural resources, an educated workforce and low business costs made the Garden State ripe for the mom-and-pop shops and diners that at one time penetrated nearly every Main Street across the state.

Read NJLRA’s op-ed today in The Record.

New Jersey’s still a relative “Hellhole”

The American Tort Reform Association (ATRA) released its annual “Judicial Hellholes” report for 2010/2011.  Marcus Rayner spoke with NJ 101.5 about how this reputation continues to stifle economic growth in our state, and particularly impacts New Jersey’s job-wielding pharmaceutical industry. 

An excerpt:

Marcus Rayner, Executive Director of the New Jersey Lawsuit Reform Alliance, explains why the report specifically names Atlantic County. He says the New Jersey Supreme Court has chosen to consolidate the Mass Tort litigation in the pharmaceutical industry in Atlantic County under one judge, Judge Carol Higbee, who has experience here. Unfortunately, her rulings have been inconsistent and often against he pharmaceutical industry." 

Rosetta Key’s report can be found on 101.5’s website.  The Hellhole report can be found on ATRA’s website. 

Labor, business leaders support civil justice reform

 

NJLRA's executive director, Marcus Rayner (2nd from left), with NJBIA Vice-President Christine Stearns, New Jersey Petroleum Council President Jim Benton, and Scott Ross, also of the New Jersey Petroleum Council.  

 

Litigation abuse drives up business costs and inhibits job growth, according to the New Jersey Society for Environmental, Economic Development (NJ SEED).  The organization, which is a broad coalition of New Jersey’s business and labor leaders, say that a vibrant life science industry is key to growing New Jersey’s economy. 

In its 2010-2011 State Issues Briefing book, “Mapping Our Way to Prosperity,” NJ SEED argues that preserving New Jersey’s status as the “medicine chest of the world” is critical, and tort reform – particularly cracking down on litigation tourism – is sorely needed by the $30 billion life science industry.  While New Jersey remains a key location for 24 of the world’s 30 largest pharmaceutical giants, weak civil justice laws have helped give momentum to Massachusetts, North Carolina, Texas, California, and Indiana, which threaten to outpace the Garden State’s industry growth. 

A decline in the life sciences industry would pose a significant strain on New Jersey’s economy.   According to the report, New Jersey’s life sciences currently do the following:

• Provide more than 211,000 jobs, directly or indirectly, throughout the state;
• Spend more than $1.5 billion annually in capital construction projects throughout New Jersey;
• Spend nearly $8 billion annually on research and development;
• Award over $4.6 million in vendor contracts to local businesses; and
• Give more than $210 million in philanthropic contributions to cultural, nonprofit, and educational organizations throughout the state.

A copy of NJ SEED’s briefing book is typically shared with the Governor, members of the Legislature, and other policy leaders in New Jersey. Let’s hope they heed the call for civil justice reform on page 46. 

 Click here to read the full report and learn more about NJ SEED.  

There’s some good stuff here,

but where is the tort reform?

Politicker NJ: Senate releases ‘toolkit for business’ bills

TRENTON – The senate Budget and Appropriations Committee approved the release of some economic stimulus bills, part of a 30-bill packet fast-tracked by the Democratic majority as a foil to Gov. Chris Christie’s municipal toolkit.

Read it here.   

A-3304 will be up in the Assembly Judiciary Committee tomorrow

NJLRA opposes A-3304, which would make the 2008 False Claims Act apply retroactively to alleged offenses occurring over a decade ago, to March 1998. 

A lot can happen in nearly 13 years.  Companies change. Employees change.  Exonerating evidence is harder to come by. 

But this bill doesn’t take any of that into consideration.  Instead, one who files suit against under the False Claims Act against a company, no matter how big or small, could be holding New Jersey’s employers responsible for a 13-year-old alleged offense at a time when job creation is sorely needed. 

How a ticket can make you a prime target for legal solicitors, and one bill you’ll love

NJLRA’s executive director was recently issued a speeding ticket.  Marcus was soon flooded with letters from lawyers across New Jersey seeking to represent him. 

James Osborne of the Philadelphia Inquirer reports about new legislation, sponsored by Senator Nicholas Scutari (D-Union), which would require lawyers and other professionals to wait a minimum of 30 days before contacting accident victims and those accused of motor vehicle violations, whose information can be easily acquired from a search of public records. 

Click here to read the article.  The full text of S-2316 can be found here. 

Legal Cost Reporting Bill on the Governor’s Desk

In previous posts, we’ve emphasized the hidden cost of lawsuit abuse to New Jersey’s taxpayers, embedded in municipal and even school budgets.  Now, legislation to expose these costs to the light of day is on the Governor’s desk. 

S-1248, sponsored by Senators Ronald Rice (D-Essex) and Jennifer Beck (R-Monmouth), would prohibit the Division of Local Government Services, which is housed in the Department of Community Affairs, from approving the budget of a municipality or local authority until the municipality reports their involvement in lawsuits in which they have spent or are expected to spend more than $50,000 in legal fees. 

Local governments’ annual budgets must be approved by the State.  However, legal fees are often added to the budget after its approval, which can sometimes mask the true state of municipality’s budget. 

S-1248 also tackles outside law firms’ billing practices, which deters potential pay-to-play activity.  It’s harder for firms to bilk the taxpayer when municipalities are required to report the names of attorneys performing work and an explanation of their billing practices. 

In addition to reporting the names of attorneys performing work and an explanation of their billing practices, the number of lawsuits settled out-of-court and the amount for which they were settled must also be included.  Outstanding lawsuits and an explanation must be included as well, unless costs are expected to be covered by a liability insurer. 

Senator Rice acknowledged that the bill is largely aimed at alerting state official to large contracts awarded to outside firms.  “New Jersey taxpayers are paying enough for local governments and authorities without over-the-top legal contracts to political cronies,” he said in a statement.  “This bill is about making sure that local officials publicly report any legal contract in which the municipality is expected to spend more than $50,000, so that State regulators, lawmakers, and the governor can step in if necessary on behalf of the local taxpayers.”

Check out NJLRA's op-ed in today's Times of Trenton!

State's small businesses have a lawsuit problem

Sunday, November 28, 2010

SPECIAL TO THE TIMES

For many of us, it may be difficult to imagine, but there was a time in New Jersey's recent history when our state was a beacon for the American Dream instead of a barrier to it.

An abundance of natural resources, an educated work force and low business costs made the Garden State ripe for the mom-and-pop shops and diners that at one time populated nearly every Main Street across the state. New Jersey shone especially brightly to would-be small-business owners across the Hudson River, and these attributes helped lure a good number of them from the five boroughs.

It's almost inconceivable that within the span of a generation, the New Jersey we knew has become one of the most hostile business environments in the United States.

Read full op-ed here. 

Hosting Thanksgiving this year?

Before your in-laws get any ideas (“You mean there are calories in this? ::gasp:: How could you do such a thing?!?  Wait until my lawyer hears about this!”) you can actually serve a handy downloadable waiver along with those unlabeled Turkey dinners marinating in delicious excess calories to protect yourself.

This past year, we’ve seen an array of food lawsuits gain traction – everything from a customer claiming he had no idea Denny’s “Moon over my Hammy” dish was “loaded up with the salt,” to the latest McDonald’s lawsuit unfairly marketing Happy Meals to children,  to excessive alcohol consumption that may make one drunk (imagine that).  And of course, merely working at a fast food chain may make employees fat. 

But if you take your chances with nondisclosure like the vast majority of us plan to, remember to also be thankful that you’re not dining amongst the litigious kind who make these waivers possible! 

Happy Thanksgiving!

ATRA Conference

NJLRA will join with other tort reformers today at the American Tort Reform Association’s Annual Legislative Conference.  This year’s conference is being held at The Hyatt Lodge in Oak Brook, Illinois.  Speakers include Florida Attorney General Bill McCollum and the Honorable Mary-Dulany James of the Maryland House of Delegates, who will offer a legislative perspective about the False Claims Act. 

Check out Marcus’s interview in the Metropolitan Corporate Counsel

Executive Director Marcus Rayner was recently interviewed by the editor of the Metropolitan Corporate Counsel, a publication dedicated to serving the interests of corporate counsel.   

NJLRA: Fostering Business Growth And Job Creation.  Published on November 2, 2010

An excerpt:

Editor: How important has the legal climate been in discouraging businesses from coming to New Jersey or from succeeding here?

Rayner: New Jersey presents many challenges for businesses and those they employ, including the high cost of living, regulations, and taxes. The civil justice system is something businesses consider when deciding where to locate and expand. Unfortunately, one of our largest industries - the life sciences and pharmaceutical industry, as well as healthcare - is the most susceptible to litigation abuse because of the large number of people it serves.

When you sell medical devices and pharmaceutical products, you are servicing people who are, in many cases, facing a disease or a physical challenge that these items are helping them to overcome, and the results can vary across populations. It is important for the large industries that are critical to New Jersey's economic success that our laws be fair. We did a study in 2008 of all the mass tort litigation facing pharmaceutical manufacturers here in the state. It found that 94 percent of the plaintiffs in these cases were from outside the state. They chose to sue under New Jersey law and before New Jersey judges rather than in their home states because the legal environment here is much more favorable to their lawsuits.

The legal climate here is much worse than that in Delaware, Pennsylvania, or New York. Businesses here face a toxic combination of our Consumer Fraud Act, court rulings on things like the statute of limitations on discovery, and, most acutely, New Jersey's weak standards for expert evidence testimony in a courtroom. When you are talking about medical liability suits and product liability suits against manufacturers of medical devices and drugs, the quality of the expertise admitted in a courtroom is critical. When the door is wide open to unqualified witnesses and unscientific testimony, you get grossly unfair results.

Click here for the full interview.

New Jersey’s civil justice climate often deals its doctors two bad hands

Medical professionals often wear multiple hats.  In addition to practicing medicine and standing up to a hostile malpractice climate, many doctors are also small business owners who must navigate New Jersey’s challenging business laws.  Think of your dentists, general practitioners, and gynecologists.

NJLRA recently launched a small business task force to learn more about this set of needs.  Our recently-released survey, conducted by the Monmouth University Polling Institute, examined the impact of New Jersey’s civil justice climate on a variety of small business types.  And as we know, the results of this survey were alarming:  approximately one-in-five small businesses have been sued in the last five years, and another one-in-three expect to be hit with a lawsuit in the near future.  Doctors and other medical professionals weren’t included in the survey sample, but I’d be willing these numbers would be skewed unfavorably if they were. 

It’s a difficult climate for any small business to operate in New Jersey.  Doctors are leaving New Jersey for greener pastures at an alarming rate.  When they have to balance the burdens of weak evidentiary standards and a hostile Consumer Fraud Act against ever-increasing malpractice premiums and costs of doing business, it’s hard to blame them. 

Ignoring medical malpractice reform has cost us

“The academic literature tends to play down the role of medical liability laws in driving up health care costs.  Doctors themselves, however, almost universally state that malpractice statutes lead to extraneous testing and treatment.”

– Peter Orszag

Former White House Office of Management and Budget director Peter Orszag discusses the impact of ignoring medical malpractice reform during the Health Care bill’s passage.  His piece, “Malpractice Methodology,” ran in the New York Times on October 20^th. 

When we’re sick, we want the most effective care possible, right?  But what if the most effective care possible hasn’t yet gone mainstream, to the point where every doctor is ordering it?  If a doctor uses the best resources available anyway, he or she may be self-positioning for a lawsuit, since medical malpractice cases allege that a doctor has “deviated from accepted standards of care.” 

Orszag talks about this point in detail: 

“It is also conceivable that because such laws usually focus on ‘customary practice’ — that is, a doctor who has treated a patient the way most other doctors in the area would is considered safe from accusations of malpractice — they create a strong contagion effect among doctors. The laws, no matter how weak or stringent, may therefore explain why doctors in some parts of the country generally adopt much more intensive approaches than those in other areas do.

You can read Orszag’s full column here. 

Accutane, and New Jersey’s booming litigation tourism industry

I’m going to go out on a limb and say that Accutane isn’t more dangerous in New Jersey than it is in Nebraska.  Or Illinois.  Or Texas, for that matter. 

Yet, more than 400 lawsuits have been filed in the past two months in New Jersey, claiming that its manufacturer, Roche, failed to warn users of its side effects, which are said to include gastro-intestinal and cardiovascular complications.  5,000 lawsuits have been filed nationwide; nearly 1,600 cases are pending in New Jersey. 

Why the flood of lawsuits here in New Jersey, as opposed to any other state?  No, it’s not because New Jerseyans are more acne prone.  Not all of the plaintiffs even live in New Jersey, in fact.  News Inferno.com notes that “the spike in Accutane claims filed in New Jersey come on the heels of a court ruling there that found the statute of limitation for such lawsuit should be based on when plaintiffs discovered there could be a connection between Accutane and their bowel disorder.” 

Essentially, the decision opened the floodgates for litigation – and in New Jersey, a lawsuit can yield a nice profit (see In Atlantic County, the trial bar hits the jackpot, and consumers pay – again, for a $25.1 million example). 

New Jersey is #40 on Forbes’ “Best States for Business and Careers” list

Good news, sort of: New Jersey is only the 10^th worst state in which to do business, according to Forbes Magazine’s annual Best States for Business and Careers ranking. 

New Jersey ranked at number 40 on the list, which was determined by weighing costs, labor supply, the regulatory environment, the current economic climate, growth prospects, and quality of life in each state.  Fortunately for us, fear of litigation wasn’t included (see Survey of New Jersey small business owners shows that increase in liability costs are causing them to scale back operations; 20% consider relocating out-of-state on our website).   

The Associated Press points out that labor costs are significant in New Jersey, as they are in New York and Massachusetts.  Both New York and Massachusetts performed significantly better than New Jersey did, despite the similar handicap.  They ranked at numbers 21 and 16, respectively. 

So why is having 80% of the states ahead of you on the Forbes list sort of a good thing, you ask?  Well, because last year, we were worse.  New Jersey ranked at number 45 on the Forbes list, making it the 5^th worst state in which to do business.  We still managed to rank at number 46 out of 50 in the business costs category. 

Interestingly, having the number 5 out of 50 ranking in the quality-of-life category may have saved us from further statistical damnation. 

You can see the entire list on Forbes Magazine's website. 

The legal defense line-item

Which is the best way to spend taxpayers’ money?  Your choices are the following:

• $100,000 for a sixth-grader needing to transfer schools because of an allergy to cats on the premises;
• $60,000 for an Arizona tourist who fell on a dilapidated sidewalk;
• $650,000 to a psychiatric patient who gouged his eyes out

You may be tempted to say “none of the above,” but unfortunately, all of the above had their day in the Washington, D.C. legal system.  The sixth-grader’s $100,000 lawsuit against the government resulted in a $7,500 settlement for her family, with undisclosed legal costs for the District.  The Arizona tourist and psychiatric patient, however, received aforementioned settlements at taxpayer expense. 

Washington, D.C.’s economy is stronger than many cities of comparable size and its crime rate is slowly declining, but it’s hard to deny that $8.5 million would help quench the District’s charities and nonprofits’ thirst for coveted public funding.    

In an insightful piece in the Washington Post, Paul Schwartzman notes that the District paid out more than $50 million in legal settlements between 2007 and 2009.  Part of the taxpayers’ high tab is due to the District’s reluctance to settle cases early.  Another is derived in legitimacy, such as a tragic police mistake which cost two children their lives.  But, finally, a big reason is that D.C. has an abundance of lawyers.  As the District’s attorney general, Peter Nickles, puts it in Schwartzman’s piece, “There are more lawyers per capita in this city than any other city in the world.  And what do lawyers like to do?”

Evidently, they like to sue themselves.  All of the District’s residents underwrite these costs with their tax dollars and can appropriately cringe.  But plaintiff’s attorneys can look toward lawsuits against the government with confidence, because unlike the majority of the District’s residents, they see a high ROI rather than a reduction in services.  The lawsuit industry is indeed alive and well in our nation’s capital. 

New Jersey’s small business owners have spoken: 7 in 10 have had enough

New Jersey’s small business owners say that the state's business climate is bleak. 

What do they want? Tort reform.  Now. 

NJLRA conducted a survey of New Jersey’s small business owners in conjunction with the Monmouth University Polling Institute.  A wide-range of industries were surveyed: construction and manufacturing (29%), food, travel and entertainment (23%), retail trade (22%), and other services industries (26%). 

Some of the businesses have been in existence for over twenty years; others have been in business for five years or less.  But whether they employ less than four employees (34% of them do) or have 25 or more (9%), their voices sounded a unified message: enough with the lawsuits. 

70% of New Jersey’s small businesses agree that the state’s liability laws make it less attractive than other states to do business in. 

One-in-five small businesses say that a lawsuit was filed against them by a client or customer in the last 5 years, and another 9% say they were threatened with one.  One-in-three small businesses wouldn’t be surprised if they are sued in the next five years. 

Why are small businesses being sued?  Our respondents say the following are major drivers:

• 79% say that advertising from personal injury lawyers contribute;
• 72% say that a large cash settlement is a key motivator;
• 68% say that misunderstandings are taken to court too quickly (see Bosland vs. Warnock Dodge).

And according to the survey, the greater a company’s revenue, the greater the chance it has been sued.

The majority (55%) of small business owners say that reforming our liability laws would improve New Jersey’s business climate.  Considering that 20% of them have seriously considered leaving the state – and taking their jobs, taxes, and client base with them – it’s time our elected officials listen. 

Assemblywoman Amy Handlin (R-Monmouth) joined NJLRA executive director Marcus Rayner at a press conference encouraging her colleagues to do exactly that.  “New Jersey consumers are the ultimate victims of this overly litigious culture,” she said. “When any businessperson can be dragged into court on any day, for virtually any reason, it chokes off innovation, expansion and competition."

“In a weak economy, New Jersey should be doing all it can to improve our State’s business climate and create jobs,” said Marcus Rayner.  “Our small businesses are crying out, and the message they’re sending us clear: New Jersey needs to get serious about tort reform.

The full survey results and NJLRA’s press release are available on our website. 

Around the web, 10.5.10

Panel To Study Concept of Requiring Malpractice Insurance for Lawyers

By Charles Toutant | New Jersey Law Journal

October 4, 2010

The state Supreme Court has formed a committee to weigh the benefits and burdens of mandatory malpractice insurance and a requirement that lawyers disclose whether they have such coverage.

Read story

Court Term Features Wrongful Death, Malpractice Cases With Unique Issues

By Mary Pat Gallagher | New Jersey Law Journal

October 4, 2010

The state Supreme Court this term has agreed to decide some prickly issues affecting wrongful death and medical and legal malpractice cases.

The wrongful death case is Aronberg v. Tolbert, A-15-10, an appeal from a June 8 Appellate Division holding that even though drivers without insurance are not allowed to sue for personal injury, their heirs can sue for their own losses.

Read story

Merck to appeal $4.6M verdict in Mass. fraud case

By Linda A. Johnson | The Associated Press

September 30, 2010

Trenton, N.J. -- Drugmaker Merck & Co. plans to appeal a federal court verdict that a former subsidiary caused the commonwealth of Massachusetts to overpay pharmacists for a widely used asthma medication, the company said Thursday.

After a three-week trial, a jury in Boston found Merck liable for about $4.6 million in compensatory damages. The judge hearing the case, U.S. District Judge Patti Saris, is to decide later on potential punitive damages, which Merck said could be substantial.

Read story

Bill addresses New Jersey’s Consumer Fraud Act

Assemblyman John McKeon (D-West Orange) introduced legislation to reform New Jersey’s often abused Consumer Fraud Act.   A-3333 calls for the following:

• A cause of action under the consumer fraud act must be filed by a consumer – not a business.
•  The plaintiff in a consumer fraud suit must have “relied to his detriment on the use or employment of the unlawful method, act, or practice” (i.e., the consumer suing under the consumer fraud act would have actually have had to been defrauded). 
• In a blow to the “litigation tourism” industry, the New Jersey Consumer Fraud Act would apply only to transactions which occur in New Jersey.  Sorry, ladies and gents from out-of-state.
• Finally, when a violation of the Consumer Fraud Act is found to have occurred, the Court has discretion in awarding damages, not to exceed three times the amount of the actual damages the customer sustained.  The awarding of attorneys’ fees would also be limited to one-third of the judgment or $150,000. 

A-3333 addresses many of the concerns NJLRA has voiced about the New Jersey Consumer Fraud Act.  Props to Assemblyman McKeon for his leadership to help stop the abuses of New Jersey’s Consumer Fraud Act. 

A must read-about New Jersey’s home-grown healthcare crisis

Handlin urges action on medical malpractice bill

By Jacqueline Hlavenka / Staff Writer

State losing doctors due to premiums, legal exposure

Middletown, N.J. — In an effort to keep doctors from leaving New Jersey, local officials are supporting an Assembly bill that proposes reforms for medical malpractice actions.

The bill, known as A-1982, was introduced on Feb. 8 and updated on Sept. 14. The proposed legislation would prevent insurance carriers from raising premiums unless a physician is found liable of a medical malpractice claim, as well as other revisions to the laws governing medical malpractice lawsuits.

“Today, if a doctor is sued, his or her insurance premium can go up immediately whether or not he or she is accused of wrongdoing … just being dragged into court can mean your insurance premiums go up,” said Assemblywoman Amy Handlin (R-13th District), a co-sponsor of A- 1982, in an interview. “From the perspective of patients, medical bills end up reflecting the fact that doctors are practicing defensive medicine. They have to order tests and procedures that they may not believe are absolutely necessary for their patients, but their concern is if they don’t order them, they will be dragged into court.”

The bill, discussed at the state’s Assembly Health and Senior Services Committee on June 10, is a proposal to address health care reform on a statewide level, as the ratio of doctors to patients has decreased across New Jersey.

Read entire article in The Independent. 

In case you missed it...

Read John O’Brien’s piece on Senator Ray Lesniak’s remarks on tort reform at NJLRA’s Fall Membership Luncheon (“N.J. sen says tort reform will be ‘cornerstone’ of economic boost,” Legal Newsline, 9/16/10).

“A Democratic New Jersey lawmaker on Thursday said tort reform will be key in getting the state’s economy to rebound.  State Sen. Ray Lesniak, the chair of the Economic Growth Committee, made the remark at the New Jersey Lawsuit Reform Alliance’s Fall Membership Luncheon…. [Read More].”

Greed of epic proportion: $99,000 in fees on a $650 judgment

We already knew that New Jersey’s Consumer Fraud Act is among the nation’s most exploited (see Denny’s, et. al), but this one manages to stand out. 

According to Court documents, Mary L. Walker purchased a new 2002 Nissan from Route 22 Nissan, Inc.  She realized that the dealership charged her $140 in vehicle registration fees (instead of the $88.50 MVC actually charges) and kept the difference. 

I don’t know whether the plaintiff asked for a refund before filing her lawsuit, or if she went straight to court, like the plaintiff did in the case against Warnock Dodge.  In any event, Walker v. Giuffre was heard by Middlesex County Superior Court Judge Alexander Waugh, Jr. Walker said that Route 22 Nissan violated the Consumer Fraud Act (CFA) and the Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), and was awarded $654.40 for her trouble. 

The plaintiffs’ attorneys requested fees.  But, as the lawyers for Nissan pointed out, the same attorneys are also of counsel in Cerbo v. Ford of Englewood, Inc.  Many if not most of New Jersey’s automotive dealers are named as defendants in this class action suit, filed in Bergen County, for nearly the same violation of the CFA.  They argued that their fees should be covered under the Cerbo lawsuit. 

Instead, Judge Waugh determined that the billing records by plaintiffs’ attorneys in Walker v. Giuffre were “fair and reasonable.”  A $99,252 attorney’s fee plus $5,431 was bestowed upon Nissan. 

Fortunately, an appellate court overturned it.  The panel said that Judge Waugh should not have used his own personal experience to gauge the attorneys’ hourly rate. 

The attorneys now say that they will likely have to request higher fees going forward, according to David Gialanella’s story in the New Jersey Law Journal. 

“At some point we’ll get paid,” the attorney said.  “It’s just a question of how much.”

Tort reform will be a cornerstone to economic growth in New Jersey…

Senator Ray Lesniak (D-Union) spoke at NJLRA’s Fall Membership Luncheon at the Trenton Country Club.  He is the sponsor of S-480, the Appeal Bond Cap. 

Senator Lesniak expressed the Senate Economic Growth Committee’s interest in hearing tort reform proposals.  He is the Economic Growth Committee chair and is also a member of the Senate Judiciary Committee. 

 

Reports: Emrise Corp. to leave N.J. for 'business-friendly state'

By week’s end, another New Jersey business will flock to the South in search of greener pastures.  Emrise Corp. will be moving its headquarters from Eatontown, NJ to Durham, North Carolina, writes Joao-Pierre Ruth in NJ Biz.  “We believe it to be a business-friendly state,” said Emrise CEO Carmine T. Oliva. 

Read more about the planned move on the NJBiz website, or on MarketWatch.com.