Segal McCambridge Legal Blog

Posted By:
October 17, 2012

Do product makers need a social media crisis response plan?


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.


Posted By:
June 28, 2012

Segal McCambridge Achieves Two Defense Verdicts In Two Different States In One Week


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.”


Posted By:
May 23, 2012

California Appellate court upholds summary judgment in asbestos component parts case


As of May 23, 2012 the California Court of Appeals opinion in Barker et al. v. Hennessy Industries, Inccan be found here

From the opinion:

The trial court granted summary judgment in favor of defendant and respondent Hennessy Industries, Inc. (Hennessy) on the asbestos-related wrongful death complaint filed by plaintiffs and appellants Fern Barker, James Barker, Carmen Barker and Tamara Worthen (appellants), the widow and surviving children of decedent Richard Barker (Barker). Hennessy manufactured machines Barker had used in his work. The trial court ruled that Hennessy could not be held liable for Barker's death under the theories of strict liability or negligence because the undisputed evidence showed that any harm was caused by products containing asbestos and not Hennessy's machines. We affirm. The undisputed evidence showed that Hennessy's machines did not contain asbestos and could be operated independently without asbestos-containing
materials.


Posted By:
October 10, 2011

Judge removed by Mississippi Supreme Court in asbestos case


Several stories on the removal of the trial court judge who oversaw the $322 million dollar verdict in Mississippi

Judge taken off asbestos case, bringing proceedings to a halt
The Mississippi Supreme Court has ordered a Smith County judge to step down from further proceedings in an asbestos case that resulted in a $322 million verdict.

In an order issued Thursday, Presiding Justice Jess H. Dickinson said all proceedings in the case will be halted until a new judge is appointed.

Union Carbide had asked the Supreme Court to determine whether Circuit Judge Eddie H. Bowen should have presided over the case.

In May, attorneys for Union Carbide said Bowen neglected to notify defense lawyers his parents had been involved in similar asbestos litigation and had settled a case against Union Carbide. When Bowen didn’t respond to the petition, Union Carbide went to the Supreme Court.

On May 4, a jury in Smith County awarded $300 million in punitive damages and $22 million in actual damages to Thomas C. Brown, who claimed he had inhaled asbestos dust while mixing drilling mud sold and manufactured by Chevron Phillips Chemical Co. and Union Carbide.

Allen Hosselly, a Dallas attorney who represented Brown, has said he thought both the plaintiff and defense were treated fairly by the judge during the trial. He said if there was some conflict involving the judge the defense “didn’t raise it until after the verdict came down.”

In a statement, Union Carbide said Bowen made “offhand comments” during the trial about how his father might have been exposed to asbestos at Ingalls Shipyard in Pascagoula. Union Carbide said Howard J. Bowen, identified as the judge’s father, had sued Union Carbide and others in 1989 and 1992.

Bowen, according to the motion, was a practicing attorney when his father and mother sued Union Carbide seeking $1 million for emotional distress, and at least one case is still outstanding. Union Carbide settled with the elder Bowens.

Union Carbide $322 Million Asbestos Verdict Put on Hold
A $322 million jury verdict against Dow Chemical Co. (DOW)'s Union Carbide unit and Chevron Phillips Chemical Co. was put on hold while the Mississippi Supreme Court considers whether the trial judge should be disqualified.

Union Carbide claims Circuit Court Judge Eddie Bowen, who presided in the Raleigh, Mississippi, trial over a former oil worker's claim he was sickened by asbestos, should have bowed out of the case because the judge's father suffered from asbestosis, a disease caused by the mineral.

Union Carbide said the companies were denied a fair trial. Bowen might be biased, the company said in its petition to the state high court, citing his father's illness, "improper comments on the evidence," and rulings during the trial.

The May 4 award is the largest ever made to a single asbestos case plaintiff, according to data compiled by Bloomberg. A state punitive-damages cap would erase at least $260 million.

The Mississippi court stopped proceedings in the case in an order signed by Chief Justice William L. Waller Jr. The ruling means the award won't be enforced until the allegations are resolved.

"If there's a disqualification, you would have to retry it with a different judge," said Carl Tobias, a University of Richmond law professor in Virginia. "That's the way most courts would handle it." The state Supreme Court might reject the motion to disqualify the judge, he said..

Oil Worker
The plaintiff, Thomas Brown, developed asbestosis after being exposed to the toxic fibers while mixing drilling mud on oil rigs in the Gulf of Mexico. He said Union Carbide and Chevron Phillips Chemical knew asbestos is toxic and didn't warn him. Brown is on oxygen 24 hours a day, said his attorney, D. Allen Hossley.

Chevron Phillips Chemical is a joint venture of Chevron Corp. and ConocoPhillips. (COP)

The jury verdict included $300 million in punitive damages, awarded equally against Union Carbide and Chevron Phillips Chemical. Mississippi law would limit the punitive award to $40 million, or $20 million per defendant.

The judge didn't respond immediately to a message left in his chambers.

Bowen's father settled claims with asbestos defendants, including Union Carbide, the company's filing said.

"If this is not an appearance of impropriety, I don't know what an appearance of impropriety is," W.G. Watkins, a Union Carbide lawyer, said in an interview.

'Fair Trial'
While the judge's father was involved in asbestos litigation, "it happened 20 years ago and neither defendant was ever sued," Hossley, Brown's attorney, said today in a phone interview. "Everybody got a fair trial."

Watkins said company lawyers are investigating whether the judge had other possible conflicts. Yesterday's ruling is a "statement that the Supreme Court takes the recusal seriously," he said.

The case is Brown v. Phillips Co., 2006-196, Circuit Court, Smith County, Mississippi (Raleigh).


Posted By:
September 6, 2011

Medicare Sets MSP Recovery Thresholds on Liability Settlements


Since December 5, 1980, Medicare has been a secondary payer, meaning that if a Medicare recipient has another source of funds for medical care, that source must pay first. Thus, in personal injury actions where an injured plaintiff whose related treatment was paid for by Medicare, Medicare must be reimbursed out of funds from a settlement, judgment or other award.  Medicare has just implemented a $300 settlement threshold for certain Liability Insurance cases.  For cases meeting the below criteria, where the lump sum settlement payment was $300 or less, Medicare will not seek to recover from the settlement, judgment or award.  This limit to recovery does not apply to exposure cases, such as asbestos-related disease cases, nor does it apply to cases where an insurer is paying on-going medical bills. The criteria established by MSPRC is (quoting from  http://www.msprc.info/index.cfm?content=toolkitsalert):

  • The beneficiary’s settlement, judgment, award or other payment claims/releases a physical trauma-based incident/injury/accident/illness. (This does not include alleged ingestion, implantation or exposure-based incident/injury/accident/illness).
  • The beneficiary obtains a liability insurance (including self- insurance) settlement, judgment, award, or other payment for a Total Payment Obligation to Claimant (TPOC) of $300 or less.
  • There are no multiple settlements, judgments, awards or other payments for the same underlying claim which total more than $300.
  • A demand [letter from MSPRC] has not been issued.

Posted By:
February 23, 2011

SCOTUS: Federal Motor Vehicle Standard does not preempt state law tort suits


In an unanimous opinion, authored by Justice Breyer, SCOTUS reversed a decision of the California Court of Appeal, holding that state tort suits alleging that car manufacturers should have installed lap-and-shoulder belts, rather than simply lap belts, on rear inner seats were not preempted by federal auto safety standards.

From the opinion:

The question presented here is whether this federal regulation preempts a state tort suit that, if successful,would deny manufacturers a choice of belts for rear inner seats by imposing tort liability upon those who choose to install a simple lap belt. We conclude that providing manufacturers with this seatbelt choice is not a significant objective of the federal regulation. Consequently, the regulation does not preempt the state tort suit.

Justice Sotomayor filed a concurring opinion, while Justice Thomas filed an opinion concurring in the judgment. Justice Kagan recused herself.

Here is the Williamson v. Mazda Motor of America, Inc. opinion


Posted By:
February 19, 2011

Wisconsin enacts tort reform


Wisconsin has recently enacted tort reform measures that the American Tort Reform Association (ATRA) called "necessary and reasonable” by placing limits on civil liability that would “invariably help boost the state's economy.”

According to ATRA, the new legal reform law brings Wisconsin into line with other states by limiting product liability to assist small businesses and manufacturers. It also adopts the higher, federal court standard for the admission of expert testimony, requiring such opinion to be based on sound, per-reviewed science.

"Importantly, the new reform package also overturns an onerous Wisconsin Supreme Court decision that established a so-called 'risk contribution' theory, which allowed personal injury lawyers to sue any and all lead paint manufacturer that had sold paint in the state decades ago without having to prove which products actually caused harm.

"Lastly, the new limit on awards for punitive damage will help reduce trial lawyers' incentive for bringing some of their less meritorious lawsuits, which of course cost just as much to defend against as do more meritorious lawsuits."

Here is a link to the Wisconsin tort reform bill

The ATRA article is here


Posted By:
January 28, 2011

Indiana Court of Appeals first impression decision concerning MDA preemption


On January 21, 2011, in the case of Jodi McGookin, et al. v. Guidant Corporation, et al. the Indiana Court of Appeals held:

After their newborn daughter was diagnosed with a heart defect, was given a Guidant pacemaker, and tragically passed away at the age of fourteen months, the appellants filed a state law complaint against Guidant. Among other things, they argue that Guidant should have put specific warnings on the pacemaker labeling related to its implantation into pediatric patients. Because the label had been preapproved by the Food and Drug Administration, however, and Guidant was not required to include the additional warnings, the trial court held that any state law-based failure-to-warn claims were preempted by federal law. Finding that the trial court properly found the claims preempted, we affirm.

This decision is in keeping with two recurring themes in preemption cases involving medical devices: 1) that Riegel provides the preemption rules governing Class III medical devices; and 2) that "may" does not mean "must" when determining what constitutes a federal requirement under the MDA's express-preemption clause.

The opinion can be found here


Posted By:
December 15, 2010

UPDATE on Massachusetts tobacco case and $152M total verdict


From CNN.com
Boston, MA – A Boston jury, which earlier in the week awarded $71 million in compensatory damages against the manufacturer of Newport cigarettes in a wrongful death case, ordered that the defendant, Lorillard, Inc. (“Lorillard”), must pay $81 million in punitive damages. The Estate of Marie Evans, a 40 year smoker who died in 2002 at age 54 after suffering from small cell lung cancer. Jurors listened to a video deposition from Evans recorded three weeks before her death in 2002 in which she described receiving free cigarettes from Lorillard when she was a child.

During the punitive damages hearing, Lorillard argued that it had rectified any issues related to its previous marketing of Newport cigarettes. Furthermore, Lorillard assured the jurors that it no longer advertises its product on the radio or television and acknowledged that cigarettes do, in fact, cause cancer. Lorillard asserted that it should not be punished for moving in the right direction. The Plaintiff contended that punitive damages were necessary to ensure that the reprehensible marketing strategy previously employed by Lorillard never occurs again. The jury had deliberated for approximately two hours, after listening to expert financial and forensic testimony, and determined that Lorillard’s practices were wanton and reckless, and awarded Plaintiff $81 million in punitive damages.

This is one of the largest ever individual punitive damages awards in the United States. Additionally, the $81 million in punitive damages, in conjunction with the $71 million in compensatory damages previously awarded, makes this one of the largest individual verdicts ever in the United States against a tobacco company.

The CNN.com article can be found here

The Blog post from December 15, 2010 is below
From the Boston Globe:

In a groundbreaking decision, a Suffolk Superior Court jury yesterday found a tobacco company liable for the death of a Roxbury woman who said that, at age 9, she received free samples of Newport cigarettes in a targeted marketing campaign.

The jury awarded a judgment of $50 million to the estate of Marie Evans, who, before she died of lung cancer in 2002, testified that she first received free Newports as a child, while living in the Orchard Park housing development in Boston. She smoked until her death at age 54.

Her only son was awarded $21 million.

Lorillard, which denied it targeted youth with free cigarettes, plans to appeal.

Legal specialists describe the verdict as the first time a jury has found a cigarette maker liable for marketing its product by handing out free samples.

The verdict sets up a second phase of deliberations in which the jury could also award Evans's estate and family punitive damages, which often are a multiple of the amounts awarded in the compensatory phase.

The ruling came after six days of deliberations during which the 14-member jury said it had hit an impasse. After resuming deliberations the jury found Lorillard liable on several related accusations, including that the company was negligent in marketing Newports to children such as Evans and failing to warn her of the health risks; that it breached its warranty by distributing a dangerous product; and acted in a malicious, willful, wanton manner.

The jury put 70 percent of the blame for her death on Lorillard, and 30 percent on her. That determination could play a role in Lorillard's appeal.

The entire Boston Globe story is online as of 12/15/10 here


Posted By:
December 13, 2010

Asbestos defendants want automatic access to info in bankruptcy trusts


Courtesy of LegalNewsline.com

Asbestos defendants want automatic access to info in bankruptcy trusts
BY LOIS KAPILA

While asbestos lawyers defend a claims system that distributes approximately $18 billion worth of assets within bankruptcy trusts, defendant manufacturers outside the trusts are calling for automatic access to information as a means of keeping the payment system fair and honest.

Jacob C. Cohn of Cozen O’Connor in Philadelphia argues that a lack of transparency has meant that “peripheral” defendants, ones with little connection to asbestos claimants, have been unfairly forced to make larger payouts.

That lack of transparency also obscures potential abuses within compensation systems, he said.

“We need to be able to establish the percentage of fault,” Cohn said. “Without the information, we can’t fairly compensate victims, and allocate responsibility to parties.”

While liability laws differ across jurisdictions, Cohn said that many claimants have successfully managed to hold peripheral defendants liable for their entire award, even when their share of liability was comparatively minor. He criticizes the asbestos plaintiff’s bar for hampering defendants in the tort system from obtaining information concerning the claims plaintiffs are making against bankruptcy trusts, and the details of those claims, as well as the amounts these plaintiffs have received or will receive from trusts.

According to Cohn, it is difficult for solvent defendants to receive offsets and reductions that take into account claims payments made from trust funds.

“Most trusts have higher payouts for extraordinary cases when you can prove that it was this trust’s manufacturers that were to blame.” This information should be made easily available, he notes, so that other manufacturers are not forced to pay out on these cases.

Cohn also said the systems for payment of claims can be abused because of the disjuncture between the tort system and bankruptcy trusts. He points to the now infamous 2007 case, Kananian v. Lorillard Tobacco Company in Ohio, when it was discovered that Kananian’s lawyers, after attempting to prevent disclosure of information relating to work history, exposure, and compensation recovered from different trusts, had submitted contradictory work histories in an attempt to maximize recoveries.

The solution for Cohn would be “automatic mandatory disclosure” at the outset of any tort case of a wide range of information, including identification of all trusts against which the plaintiff has made or intends to assert a claim for compensation, all payouts received, copies of all claims submissions and communications submitted to trusts and all pending bankruptcies in which the plaintiff intends to assert a claim. Plaintiffs would also be required to provide blanket written authorizations to facilitate production of potentially relevant information from sources that might resist on confidentiality grounds.

Scope of Discovery

On the other hand, many plaintiff attorneys feel that this is unnecessary, and argue it is misleading to imply that “necessary” information is not already available.

Stanley Levy, an attorney at Levy, Phillips and Konihsberg and trust advisory committee member of the UNR Asbestos-Disease Claims Trust, is unconvinced.

“I don’t see why it has to be made public,” Levy said. “Trusts function under carefully defined rules. Each court can deal with individual cases, and there are procedures in place if a defendant has a need for information.”

He also points out, as many lawyers do, that, “you are dealing with confidential information, medical information as well as work histories.”

Matthew Bergman, a Seattle-based attorney and trust advisory committee member of a number of trusts including the Kaiser Aluminum and Chemical Corporation Asbestos Personal Injury Trust and Owens Corning Fibreboard Trust, agrees.

“I start the process with a strong presumption that this is information that no American would want to share with strangers,” Bergman said. “But this confidentiality is not absolute; there are some countervailing interests and a responsible plaintiff attorney would realize that certain information should be discoverable.”

He said he typically provides this information without a court order, when it is asked of him and believes that “any reasonable plaintiff lawyer would do the same.”

Yet Bergman believes that there are limits on what information should be readily available. If a defendant goes through a plaintiff, that is fine, but he is against “the wholesale disclosures against a trust which are not connected to any particular lawsuit. I certainly understand why the defendants want to look at this stuff. I’d also like to see their settlements — It would certainly enhance my understanding, this strategic information, and be interesting — but it isn’t relevant to the case.”

Delayed filings

An increasingly frequent complaint against plaintiff lawyers is the claim that they are gaming the system by delaying filing claims with trusts, until their tort cases have been concluded, thereby managing to prevent that information from becoming public, and claim twice without any offsets or reductions for the defendant.

Retired Madison Country Circuit Judge Daniel Stack, who is also a candidate to serve as one of three trustees on the Flintkote Asbestos Bankruptcy Trust, sees no way out of this problem.

“I don’t see how it is possible to demand they submit all of their claims before the case opens,” Stack said.

This view is echoed by Bergman who believes that it is “practically impossible” to make this demand, and that there can be “lots of legitimate reasons to file other claims later. You might just be focusing on the active case, for example.”

He argues that there are remedies in place to deal with the problems this causes for trying to assess liability, which can ensure that solvent defendants still get the reductions to which they are entitled. In general, after a judgment, the plaintiff would have to assign rights, with the defendant then stepping into plaintiffs’ shoes, he said.

Bergman also said that in some jurisdictions like California that have several liability, every bankrupt trust is on the verdict floor. Plaintiffs therefore include on the jury’s verdict form, all of the products that could be identified at a specific job site. If a defendant has reason to believe that the plaintiff has not been honest, the defendant can also add a product to the jury form.

Stack also criticizes what he sees as the hypocrisy of many solvent defendants, which demand that trusts release all of their information, yet make undisclosed settlements behind a veil of secrecy: “No defendant wants another defendant to know what they paid, but they say that bankrupt defendants and bankruptcy trusts should make this known. It should be one way or another — everybody should share with the other children.”

Debate coming to a head

The debate over scope of discovery has come to a head with the filing by several asbestos trusts in a Delaware Bankruptcy Court seeking declaratory judgment. In the suit filed in October, the trusts are objecting to the scale of documents sought by defendants in a number of cases, and seek an injunction against the “massive and intrusive discovery efforts against asbestos personal injury trusts.”

Defendants have filed an amicus brief in response, arguing that there is nothing to support “the TACs position that discovery requests on an individual, plaintiff-by-plaintiff basis are permissible, but broader demands are not.”

The article can be found here