Segal McCambridge Legal Blog

Social media’s popularity and reach have grown rapidly and exponentially in the last several years. The prospect of a negative incident or situation going viral poses a real reputational risk to product makers, and so, too, to their bottom lines. Accordingly, companies must have a plan in place to deal with social media crises. The plan should achieve several basic aims: provide for effective monitoring of social marketing sites; and ensure a timely initial response and coordinated and consistent ongoing outward communications during the course of the crises. Advance preparation and coordination is key. With whom responsibility for managing crises response lies should be clear and settled. The roles of the various groups within the company, management, marketing, IT, legal, etc., should be clearly defined. Mock crises response drills should be conducted. Companies that fail to take steps to guard against social media crisis needlessly expose themselves to an heightened level of risk.

Companies and retailers selling service contracts often refer to their product as an “extended warranty.”   Doing so may result in liability if the contract does not  actually extend the terms or coverage provided under the manufacturer’s warranty.

Most service contracts are wholly separate and distinct from the written or limited warranty a consumer product manufacturer gives.   That is, the contract does not  come from the product manufacturer and does not extend the terms or coverage afforded under the manufacturer’s warranty.   Accordingly, referring to a service contract  of this type as an “extended warranty” may place the service  contract company, retailer, or both, at  risk of being held liable under consumer fraud  or unfair competition laws  for engaging in a false, misleading, unfair, or deceptive trade practice.   This was nearly the result in  Consumer Advocates v. DaimlerChrysler Corp., No. G029811, Unpubl. Opinion  (Cal. App. 4th Dist. Jan. 31, 2005),   in which the trial court found that the car maker “commits an unfair business practice because sometimes its employees or dealers referred to service contracts as “extended warranties.” Thus, DaimlerChrysler and its dealers sometimes misled customers into believing the service contract extended all of the express warranty remedies under Song-Beverly (i.e., replacement or restitution). Id. *18. As a remedy, the trial court enjoined DaimlerChrysler from “referring to service contracts as ‘extended warranties,’ or suggesting to consumers a service contract entitles them to the same legal remedies … as an express warranty.” Id. *20-*21.   Because the appellate court reversed,  finding the  trial erred in granting  equitable relief, and because the decision is  “unpublished,”  the case is not precedent for the proposition that referring to a service contract that does not extend a manufacturer’s warranty as an “extended warranty” amounts to fraud or an unfair or deceptive act.

However, the case does show that a plaintiff prevailed on this theory at trial and counsels against imprecise use of the term “extended warranty.”

Washington is vigilant about policing and enforcing its service contract laws.   Selling contracts there without being registered puts a company at risk of costly and reputation-damaging enforcement proceedings and exposes its shareholders, officers, directors, agents, and employees to personal liability.   A unregistered  company  has essentially two options:   (1) stop selling and hope no problems arise before the contracts run out, or (2)  ‘fess up, pay a fine, get registered, and get back to business.

Option 1 is risky.   If found out, the company will be put out of business, and  it and the pepole that run it will face substantial liability, as The Choice Manufacturing Company found out earlier this year.

Option 2 will involve pain but may be manageable.   How manageable will largely be a function of the length of time the company has been selling service contracts while unregistred and the amount of revenue generated by the illegal  sales.

Where a company self-reports a violation (or promptly admits its wrongdoing when exposed) and initiates the registration process, Consent Orders from the Washington Office of the Insurance Commissioner show a willingness to negotiate and compromise rather than to simply mete out punishment:

• 2009:   Aston Martin was fined $10,000 after selling 14 motor vehicle service contracts valued at $47,631 without being registered.   Its registration application, submitted June 29, 2009, was approved on July 30, 2009.

• 2008:   Sterling Jewelers paid a $150,000 fine for selling 629,885 service contracts worth $29,523,559 without being registered.   When it decided to cooperate with the state, its registration was approved in just over 3 months.

• 2005: Apple Computers sold 43,080 service contracts over approximately five years before becoming aware of Washington’s registration requirement.   At that point, it voluntarily ceased selling the contracts, self-reported, and cooperated in the investigation.   The OIC and Apple agreed to a $100,000 fine and the company was permitted to register.

The take away here seems to be that Washington is more interested in ensuring compliance with its laws than exacting a  ‘pound of flesh’? when a company  acknowledges its non-compliance and takes steps to correct the situation.   Experience and common sense suggest that the same is likely to hold true in other states and in other contexts, making Option 2 the better option to protect a business.

On September 13-14, 2012, the Diversity Law Institute held its annual Diversity Summit in Chicago. The event brought together legal minds from across the country to create a compelling discourse on diversity issues. Segal McCambridge Singer & Mahoney, co-host, kicked off the Summit on Thursday evening with a cocktail reception in the firm’s Willis Tower offices. Friday’s colloquium took place at the Chicago Gleacher Center. Speakers and participants discussed ideas and issues surrounding diversity in the practice of law. Following the round table discussions, the DLI presented awards to select law firms in recognition of their support of diversity and the Diversity Law Institute. The group then headed to Boka, a Michelin-starred restaurant in the Lincoln Park neighborhood, for a closing meal.

The Litigation Counsel of America (LCA) and Faegre Baker Daniels also co-hosted the 2012 Diversity Summit. Visit the LCA’s Litigation Commentary and Review to read a full recap of the event, view the Summit’s agenda, and see pictures.

For a defendant,  ‘removing ‘ a case that is, taking a case filed in a state court and moving it over to a federal court may be the most critical step taken in the case.   Often times it makes the difference between winning and losing.   This is because in a federal forum, legal standards are generally more rigorous and defendants are more likely to get a receptive hearing.

The federal courts strictly enforce the rules governing removal. But understanding and complying with those rules can be tricky.

For example, the rules say that a defendant must remove the case  within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading.  An out-of-state defendant is often  served through a statutory agent, such as a Secretary of State.   Does service of a summons and compliant on a statutory agent qualify as  receipt by the defendant.   Recently, in Ackerman v. PNC Bank, Nat. Assn. (Aug. 13, 2012), a Federal District Court, answered this question.   It found, applying the now settled rule,  that service on a statutory agent does not start the removal clock.   Rather, it begins when the defendant itself actually receives the summons and complaint.

Corporate defendants and their attorneys know well the plethora of potential benefits associated with litigating a case in a federal rather than state court.   Having an action heard by the federal judiciary may dramatically increase the likelihood of a positive outcome and almost certainly reduces a defendants financial exposure should it lose.   This being the case, most plaintiffs attorneys will do almost anything to avoid litigating and trying their cases in federal court.     So knowing and complying with the removal rules is critical, and a defendant that fails to do so may unintentionally forego its right to a more favorable forum, thus diminishing if not destroying its chances of winning the case.

Paul E. Wojcicki

Freddy Fonseca

In a case of first impression, on August 9, 2012, the California Supreme Court issued its long-awaited decision in State of California v. Continental Insurance Company, et al.  California policyholders with long-tail environmental liabilities are now able to recover more money from their historic commercial general liability insurers.

Rejecting the insurers’ arguments that a pro-rata allocation methodology should be applied, the court ruled that the State of California was allowed to recover up to the total limits of all triggered policies over multiple policy years. But the court did not stop there. It extended its holding to allow the stacking€? of limits across all triggered policy years. The California Supreme Court concluded that the fact that all policies were covering the risk at some point during the property loss is enough to trigger an insurer’s indemnity obligation. As a result, the insurers on the risk were ordered to pay all sums for property damage attributable to the Stringfellow Superfund site, up to their policy limits, if applicable, as long as some of the continuous property damage occurred while each policy was on the loss.

The Supreme Court of California determined that the all sums language in the excess policies’ insuring agreements meant that the insurers had to cover all damage up to their policy limits, even damage that occurred before or after their policy was in effect. The court further held that the during the policy period language that the insurers relied on to limit coverage does not appear in the insuring agreement section of the policies and, therefore, is neither logically [n]or grammatically related to theall sums’ language in the insuring agreement.

The court next found that the State of California could stack the coverage limits of all policies in the absence of any anti-stacking provisions. The court noted that all-sums-with-stacking coverage allocation ascertains each insurer’s liability with a comparatively uncomplicated calculation that looks at the long-tail injury as a whole rather than artificially breaking it into distinct period of injury. The court found nothing unfair or unexpected in allowing stacking in a continuous long-tail loss.

In reaching its decision, the California Supreme Court reasoned that:

It is often ‘virtually impossible’ for an insured to prove what specific damage occurred during each of the multiple consecutive policy periods in a progressive property damage case. . .If such evidence were required, an insured who had procured insurance coverage for each year during which a long-tail injury occurred likely would be unable to recover.

The court asserted that extending coverage throughout the entirety of the ensuing property damage best reflects the policyholder’s expectations and the insurers’ indemnity obligations under their respective policies. Stacking generally refers to the stacking of policy limits across multiple policy periods that were on a particular risk. In other words, [s]tacking policy limits means that when more than one policy is triggered by an occurrence, each policy can be called upon to respond to the claim up to the full limits of the policy. The California Supreme Court found that an all-sums-with-stacking rule has numerous advantages because:

It resolves the question of insurance coverage as equitably as possible, given the immeasurable aspects of a long-tail injury. It also comports with the parties’ reasonable expectations, in that the insurer reasonably expects to pay for property damage occurring during a long-tail loss it covered, but only up to its policy limits, while the insured reasonably expects indemnification for the time periods in which it purchased insurance coverage.?

Today, liability insurers typically include anti-stacking provisions in their policies to avoid an outcome like the California Supreme Court’s decision. Consequently, the State of California v. Continental Insurance Company, et al., ruling is not expected to have a major impact on more recently issued coverage. However, the decision presents significant exposure implications for historic insurers of California insureds. The court’s reasoning could also be extended to apply to other types of long-tail situations such as asbestos bodily injury exposure claims. Further, while many states have already adopted allocation rules, the State of California v. Continental Insurance Company, et al. case may be influential in states without settled insurance allocation coverage law.

Segal McCambridge Achieves Two Wrongful Death Defense Verdicts In One Week

Two unrelated cases, in two different states, in different areas of the law, both involving charges of wrongful death, recently ended within days of each other with the same result: the jury siding completely with the defense. In both cases, the Segal McCambridge team led its clients through to victory.

The first of the two cases was tried in Illinois. This case involved issues of professional liability in the medical malpractice area. A 76-year-old patient underwent hip revision surgery (replacement of a previously installed artificial hip) at Chicago’s Weiss Memorial Hospital. The patient passed away approximately 48 hours after the surgery was complete. His family brought suit against the Certified Registered Nurse Anesthetist (CRNA) and the hospital, on the theory that the CRNA was an apparent agent of the hospital. The plaintiffs sought $10.6M.

Trial began June 8, 2012, in the courtroom of Judge Thomas Hogan, and concluded June 20. Robert O’Malley and Kimberly Kayiwa of Segal McCambridge represented Weiss Memorial Hospital. The jury delivered a defense verdict after deliberating for less than two hours.

“It is always a difficult road to bring a matter of this complexity to verdict in Cook County,” says Mr. O’Malley. “I attribute our success to the dedication of our trial team, the clarity of our defense message and the good fortune of empaneling an attentive and thoughtful jury.”

The second case was tried in Texas. This case involved products liability issues in the death of a young man who died retrieving golf balls from a water hazard. He worked for a company that removes golf balls from water hazards and re-sells them as used equipment. To retrieve the balls, he used a mechanical breathing device, called a “hookah.” Our client, Gardner Denver, manufactured a compressor that was a component of the device (although almost certainly not an original component).

On a June day in 2009, the young man was found dead in the water. A medical examination concluded that his death was caused by an elevated level of carbon monoxide in his body.

His survivors sued, alleging that the component parts were defective and that each of the three product manufacturers, Gardner Denver and two other companies, had failed to warn. They sought nearly $13M, $6.7M of which represented punitive damages.

But there were other issues with the hookah. It had been heavily used, and parts had worn out and been replaced. As stated before, the Gardner Denver compressor was almost certainly not original. The Honda motor had been replaced shortly before the accident and had been installed improperly. The botched configuration shot exhaust into the compressor.

After a lightning-paced four-and-a-half days of trial in Dallas, the case went to the jury. In their verdict, announced June 25, they found the company’s boss, Dickie Seeders of A Plus Golf Ball Retrieval, 77% responsible and the decedent 23% responsible. No fault was assigned to any of the three manufacturers.

Our team for Gardner Denver consisted of attorneys Timothy Krippner, John LaBoon, Christina Denmark and J.R. Skrabanek, and paralegal April Mitchell.

“We are extremely pleased that the jury confirmed our view that Gardner Denver bore no responsibility for Mr. Logan’s tragic death,” says Mr. Krippner. “We wish the best for the Logan family.”

From Philly.com
Penn surgeon makes headway against a rare lung cancer
June 24, 2012|By Marie McCullough, Inquirer Staff Writer

During a grueling operation early last year, when the intractable five-pound tumor seemed to mock his skills, thoracic surgeon Joseph S. Friedberg felt buoyed by what he and his scrub-suited crew had already achieved.

The University of Pennsylvania team battles pleural mesothelioma, a rare, ferocious, incurable type of lung cancer.

Typically, patients die within a year of diagnosis. Yet more than two years after treatment at Penn, 27 out of 38 patients – 71 percent – were still alive, including four who had marked five years. These were advanced-stage cases, ostensibly hopeless, and they were defying the odds.

Friedberg, who was about to submit a study on those results for publication, knew there would be skepticism. The number of patients was small. And the treatment was almost as formidable as the disease. He spent up to 14 hours stripping out the cancer while preserving the patient’s lung; then residual malignant cells were zapped with laser light therapy.

He was disappointed, but not surprised, when the Annals of Thoracic Surgery demurred at publishing the study. “The reviewers said the follow-up time was too short and we were overestimating” the projected survival time, he recalled.

The only way to address that concern was to let more time elapse.

Last month, with a fuller picture, the journal published the results, which are impressive.

This story is about those results, and how the 25 members of Penn’s pleural and mesothelioma program are making remarkable progress against a dreadful disease.

It’s also about the heartbreaking inadequacy of that progress.

“I don’t particularly consider it a victory,” said Friedberg, co-director of the program. ” ‘Good’ for me would be 10 years. Every time these patients’ cancer recurs, it kills me.”

Caused by asbestos
Pleural mesothelioma is caused by exposure to asbestos, a once-ubiquitous building material. Decades after exposure, renegade cells arise in the mesothelium, a cellophane-thin membrane that lines the chest cavity, lungs, heart, and diaphragm.

By the time the classic symptom of breathlessness shows up, the cancer usually has a stranglehold, invading all surfaces and organs in the cavity.

Conventional treatments – chemotherapy, radiation, and surgery – have dismal outcomes. In the pivotal study of the only chemotherapy specifically approved for mesothelioma, 60 percent of patients did not respond. For the rest, it extended median survival just 13 weeks, to 12.1 months.

Mesothelioma has become a big specialty for liability lawyers, but with 3,000 new cases a year in the United States, it is hardly a hot research field.

Nonetheless, for more than two decades, Penn scientists have been doggedly pursuing innovations. They are combining conventional treatments with gene therapy, T-cell therapy, and the laser technology, called photodynamic therapy.

Patients come thousands of miles to Penn after exploring their options – or lack thereof.

William J. McQueen, 63, an ear-nose-and-throat doctor from San Antonio, Texas, is one of them. Because his cancer encased one lung – the typical pattern – and because he was in good overall health, specialists at several top hospitals recommended an “extrapleural pneumonectomy.”

The harrowing surgery involves removing the lung, the lining of the chest, the heart’s sac, and the diaphragm muscle, which controls breathing, then reconstructing certain tissues with high-tech fabric.

Up to 10 percent of pneumonectomy patients die of complications. The rest die of the cancer, which invariably comes roaring back, typically within months.

McQueen asked about preserving his lung but was told that would depend on the extent of his cancer – something that would be assessed on the operating table.

“I got the impression they would not take the time to strip the tumor out,” he said. “They’d go in and take the lung out. That’s what most surgeons do.”

Sparing the lung
That’s what Friedberg used to do.

Theoretically, taking the lung left minimal cancer for conventional therapies to mop up, thus lowering the chance of relapse. In reality, he could see it didn’t work. It was like uprooting a garden to get rid of weeds, only to have the weeds grow back worse than ever.

In the late 1990s, Friedberg teamed with Penn radiation oncologist Stephen Hahn, an expert in photodynamic therapy, to try it for mesothelioma.

It requires injecting the patient with a drug, a photosensitizer, that makes cancer cells ultra-sensitive to visible light. When the drug is exposed to red light, it sets off a chemical reaction that destroys the cells, damages blood vessels that feed the tumor, and activates the immune system.

The cell-killing effect only works near the surface, because red light penetrates only half an inch or less.
Regulators have approved photodynamic therapy for several cancers, but evidence that it works for mesothelioma is mixed. In the most rigorous study, published in 1997, it did not improve survival or time to recurrence.

But surgeons in that study were allowed to leave a thin layer of tumor – too much, Friedberg speculated, for the laser light to reliably penetrate.

Still, he knew that even if he cut out every speck of detectable tumor, preserving the lung would leave behind more microscopic disease than removing the organ would. So beginning in 2004, the team performed a modified pneumonectomy – removing the lung but preserving the heart sac and the diaphragm – followed by the light therapy

Then came a patient in her 80s. Taking her lung would be too risky, agreed the physicians – Friedberg, Hahn, Daniel Sterman, Keith Cengel, and Steven Albelda.

To their shock, she was back on the golf course not many months after Friedberg preserved her lung. So he preserved the next patient’s lung. And the next. With perseverance and ingenuity, he found he could save the lung no matter the extent of the tumor.

By 2008, it was clear the lung-sparing strategy was superior. The 14 patients whose lungs were removed had a median survival of only 8.4 months. But most of the 14 who kept their lungs were alive after more than two years – at least twice as long as other studies had reported for such advanced disease.

Though those with two lungs were physically better able to cope with a relapse, Friedberg believed the light therapy was playing a big role, somehow priming the immune system to keep resurgent cancer under control. “The cancer comes back more like a house cat than a tiger,” he said.

To try to prove it, the team decided to treat 24 more patients – 38 in all.

On April 19, 2011, Bill McQueen was rolled into the operating suite, a three-ring medical circus of physicians, nurses, anesthetists, laser physicists, and technicians.

Some of the photosensitizer, given intravenously two days in advance, had migrated into his healthy cells, as expected. To protect them from burning, the team covered the operating room lamps with protective filters, sewed blue surgical towels to the edges of his skin incision, and clipped the oxygen monitor to a different finger every 15 minutes. Even the tiny red light in that device could activate the sensitizer and burn his nail bed.

Friedberg spent 111/2 hours cutting out the cancer. Though it had not penetrated into the airways of the lung – it typically does not – it formed a thick, reddish rind around the organ, and mottled the chest cavity with nodules and plaques.

The volume of McQueen’s cancer, about a pint, was comparatively small. Some patients have a quart or two.

But Friedberg also had to remove a rib, two nerves, parts of the diaphragm and heart sac, and lymph nodes.

The thing that best prepared him for the arduous marathons, said the lanky 53-year-old, was being on the crew team at Penn.

“You just keep going no matter how much it hurts or how tired you are. You just have to make the commitment that you’re not going to fail [patients] that way.”

After the cancer was out, Friedberg sewed seven light detectors in strategic locations in McQueen’s chest cavity. These were connected to a computerized “dosimetry” system, enabling real-time calculations of the laser light dosage. Too little and the chemical reaction would not kill the cancer. Too much and a vital organ could be perforated, causing a fatal hemorrhage.

Next, radiation oncologist Keith Cengel took over, looking a bit sinister in black goggles and protective garb.

He poured a warmed liquid containing fat particles into McQueen’s chest while moving a fiber-optic laser around the cavity. The fat particles reflected the light, dispersing it into the recesses of the chest – and creating an eerie red glow that made McQueen’s torso seem like a magic cauldron.

Despite the care and precision, McQueen had complications. Lymphatic fluid leaked from a thoracic duct, requiring eight more hours of surgery the next day. A small stroke temporarily impaired his vision.

“But I came through it,” he said.

Indeed, within four weeks, he was playing the tourist, wandering Reading Terminal Market with his wife, Karen.

A windfall of days
In the harsh calculus of cancer, “median survival” – the point at which half the patients are still alive – is a crucial number.

The median survival for the 38 patients Friedberg’s team treated from 2004 through 2010 was 31.7 months – more than 21/2 years – even though the cancer came back in a median time of 9.6 months.

That’s a windfall of birthdays, holidays, time with loved ones.

The researchers still can’t say for sure why the treatment combination failed to delay the return of cancer, yet made it “less imminently lethal.”

Friedman points to the well-documented immune effects of photodynamic therapy. Debris from dead cancer cells signals the immune system to send scavenger cells to clean up the mess.

He believes that may act like a vaccine, preparing the immune system to strike when cancer reappears, thus curbing the explosive growth usually seen when mesothelial cancer recurs. The cancer, he says, becomes “more indolent.”

Photodynamic therapy pioneer Harvey Pass is not convinced. The New York University thoracic oncologist led several mesothelioma studies that found light therapy didn’t help.

“There may be an immune effect, but I don’t know about a more indolent form,” Pass said. “But I think Joe has the right idea. I think we ought to be saving lungs on these people. The patients are in better shape, and they can get more therapy” to fight relapses.

McQueen is now waging that fight with chemotherapy and, in a few months, radiation. He needs narcotics to manage his pain.

But he recently went hunting with his daughter, and he and his wife will soon fly cross-country for a wedding. “I’m going to do the best I can for as long as I can,” he said.

That could be the Penn team’s mantra. Researchers are now working to parse the immune effects at a molecular level, to find better photosensitizers, and to develop minimally invasive ways to deliver the laser light energy.

“I’d be happy to turn this into a chronic disease, like diabetes,” Friedberg said. “My goal for my career is to make it truly better for these patients. That’s what I want to do with the rest of my life.”

As reported in the June 25, 2012 Indiana Lawyer

As of June 25th, 2012, a copy of the Indiana Supreme Court opinion can be found here

Indiana justices outline ‘˜improvement to real property’

For the first time, the Indiana Supreme Court addressed what constitutes an improvement to real property’? as mentioned in the construction statute of repose. In doing so, the justices reversed the trial court’s grant of a contractor’s motion for summary judgment in a wrongful death claim.

In 2007, Sharon Gill filed a complaint in Marion Superior Court against Evansville Sheet Metal Works and 18 other defendants asserting wrongful death claims. As to ESMW, she sought damages on theories of products liability and contractor negligence. Her husband worked at Aluminum Company of America in Newburgh and was allegedly exposed to and inhaled asbestos fibers during the course of his employment. He was diagnosed with an asbestos-related disease in 2004 and died of lung cancer in 2005.

ESMW allegedly worked as a contractor for Alcoa at a common worksite with Gill’s husband.

The Marion Superior Court placed the complaint on its Mass Tort Asbestos Litigation Docket and eventually granted ESMW’s motions for summary judgment on the grounds that Gill’s product liability and contractor negligence claims were barred by the product liability statute of repose and construction statute of repose, respectively. At issue Monday was only whether the construction statute of repose applied.

The Court of Appeals affirmed, finding Gill brought her claim outside the 10-year period stipulated in the statute, so her claim was barred.

Indiana courts have yet to define the meaning of improvement to real property’? as used in Indiana Code 32-30-1-5 (2004). The justices cited the statute in effect at the time of Gill’s complaint even though the statute was amended in 2005. Justice Frank Sullivan noted the court perceived no substantive difference between the former version and the current one.

Looking at how other states have handled this issue, the justices decided to take the commonsense’? approach that looks to the ordinary or plain meaning of the phrase. Whether something is an improvement to real property under the commonsense approach is a question of law, but its resolution is grounded in fact, Sullivan wrote in Sharon Gill, on her own behalf and on behalf of the Estate of Gale Gill v. Evansville Sheet Metal Works, Inc., 49S05-1111-CV-672.

The high court held that an improvement to real property’? is an addition to or betterment of real property, that is permanent, that enhances the real property’s capital value, that involves the expenditure of labor or money, that is designed to make the property more useful or valuable, and that is not an ordinary repair.

In applying this commonsense definition, judges and lawyers should focus on these individual criteria but they should not lose sight of the fact that this is a definition grounded in commonsense,’? he wrote. The fact that a purported improvement satisfies each of these individual criteria may not be sufficient for it to be an improvement within the meaning of the CSoR if it would do violence to the plain and ordinary meaning of the term as used in the construction context.’?

In this case, ESMW failed to make a prima facie showing that its work at Alcoa constituted an improvement to real property. The justices remanded for further proceedings.

The justices also addressed the COA’s criticism of that Marion County court following its local rule allowing pre-discovery motions for summary judgment. They agreed with the COA judges that whether something is an improvement to real property is a fact-sensitive inquiry that may require discovery in some cases, but disagreed with the conclusion that Local Rule 714 can’t be applied in this context.

In a recent Alert, the Centers for Medicare and Medicaid Services posted new mandatory minimum Total Payment Obligation to Claimant reporting thresholds as applicable through January 2015. What sets this June 20, 2012 Alert apart from previous directives is that the minimum TPOC reporting thresholds previously decreased to no threshold – such that all liability insurance (and self-insurance) personal injury settlements, judgments, awards and other payments to a Medicare beneficiary would require reporting in 2015. The June 20 Alert gradually decreases the minimum TPOC amount to $300. Thus for cases with a TPOC date on or after 10/1/2014, if the TPOC is over $300, the settlement will need to be reported in the first quarter of 2015. The current TPOC minimum threshold requires reporting where the settlement, judgment, award or other payment exceeds $50,000. This amount decreases over the upcoming months as set forth in the Alert.

With this Alert, the $300 threshold previously implemented for certain liability insurance (and self insurance) recovery cases, that had excluded exposure, ingestion and inhalation cases, will now apply to all liability insurance and self insurance recovery cases. Click here to read the Alert.

Similar Alerts were issued regarding Workers’ Compensation and are available here.

In June 19′s NGHP Town Hall Teleconference, the CMS stated that Alerts were forthcoming and a new MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting User Guide ought to issue before the 4th of July holiday.