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10 posts from April 2010

Friday, April 30, 2010

Will Governor Christie Reappoint Justice Wallace?

PolitickerNJ.com today has a post on this very question.  The post points out that John Wallace's term on the New Jersey Supreme Court ends on May 22, which is less than a month away.  If he is reappointed he will go on to serve another two years until 2012, when he will reach NJ's mandatory retirement age of 70 (NJ judges are appointed for seven years and upon reappointment serve until the age of 70). 

Between now and May 22nd the NJ Senate would have to hold hearings on his renomination, approve his nomination in committee and hold a vote of the full senate.

Justice Wallace has served on the NJ Supreme Court since 2003.  During the campaign last year Chris Christie indicated that he felt no obligation to reappoint justices without a good reason for doing so. 

If he does not reappoint Wallace, it would be the first time a governor has refused to reappoint a sitting justice of the NJ Supreme Court since the current 1947 constitution was adopted.

Stay tuned...

You may sue yourself

Last week, the U.S. Supreme Court ruled that investors may sue New Jersey-based Merck in a class-action securities lawsuit.  They lost billions when Merck pulled Vioxx from the market entirely in 2004. 

The Court was being asked to determine whether the lawsuit is timely, since the lawsuits were originally filed in November 2003.  The Food and Drug Administration (FDA) issued public warnings about Vioxx in September 2001.  Investors have two years to sue a company accused of defrauding investors, and Merck argued that the clock began ticking at that time. 

But the more important question is whether this lawsuit even makes sense for anyone – except the attorneys – to pursue.  If you’re an investor and you held onto your Merck stock (which may have been wise, since it has rebounded over the last few years) – meaning you own a portion of the company – any payout would likely reduce the value of your stock.  Essentially, you’d be paying for your own verdict (or more accurately, the attorneys’). 

Merck employs approximately 12,000 New Jersey residents. 

Thursday, April 29, 2010

Drive drunk, hurt yourself, and blame someone else

Brick Township resident Frederick Voss was drunk when he crashed his motorcycle into a car in November 2006.  His blood alcohol level that night was 0.196 percent – nearly 2 and a half times the legal limit. 

Unfortunately, I don’t need to remind you how grave the consequences could have been for Voss’s poor decisions.  We’re reminded of drunken driving injuries and deaths far too often, and they’re 100% preventable.  Based on published reports in the Asbury Park Press and the New Jersey Law Journal, it appears, fortunately, that Voss didn’t injure anyone other than himself.  He pleaded guilty to driving while intoxicated. 

In situations like Voss’s, the best case-scenario is that the drunk driver considers it karma, takes responsibility for his or her actions and does not endanger innocent motorists or pedestrians again. 

Instead, Voss claims that injuries he suffered as a result of the accident weren’t his fault.  They resulted from being “negligently served” alcohol at Tiffany’s Restaurant in Toms River. 

He’s decided to sue.  And as of Wednesday, he is officially cleared to do so. 

In 1997, the Legislature amended motor vehicle insurance law to state that a driver convicted of DWI in connection with an accident “shall have no cause of action for his or her injuries.”  But the Dram Shop Act, which was enacted 10 years earlier, allows people who suffer a loss to sue licensed servers who knowingly served an intoxicated person prior to an accident.  While it doesn’t explicitly state that who can sue under the Dram Shop Law, it’s usually the victim of a drunken driver suing an establishment – not the drunken driver suing the establishment for ‘making’ him or her drunk.  In Voss v. Tranquilino, the New Jersey Appellate Court ruled yesterday that liquor establishments are not protected by a state law which bars drunken drivers involved in accidents from suing other parties for economic and noneconomic damages.  This ruling upholds a previous ruling by Ocean County Superior Court Judge John A. Peterson and allows Voss and his attorney to pursue their claim against the restaurant. 

 Unless the bar tenders at Tiffany’s held him down and force-fed him alcohol against his will, I fail to understand why he isn’t responsible for his own actions.  But according to the New Jersey Appellate Court’s interpretation of the 1997 law, it makes no difference whether you are the victim of a drunk driver, or the drunk driver himself: you have the right to sue the dram shop.  In his opinion, Judge Joseph Lisa stated that the Legislature “could not have thought it could reduce the number of drunken drivers by immunizing liquor establishments from their claims and thus providing a disincentive to the licensees.”  The Court points to a provision of the 1987 law which was vetoed by Governor Tom Kean, which would have barred dram shop claims by passengers who knew a driver was drunk.  The Court said it indicated that “the Legislature considered, but ultimately rejected, the immunity Tiffany’s now urges us to find.”

The only lesson Voss’s situation teaches to New Jersey residents is that sometimes you can profit from failing to take personal responsibility for your actions. In a nod to our increasingly litigious culture, when you have done something wrong and suffered because of it, you can pass the buck onto whomever you think may have the most bucks. 

Attorneys for Tiffany’s have not decided whether to appeal.  It’s unclear how much Voss hopes to extract from them.  But at 46, Voss is clearly not embarrassed about crashing his motorcycle into a car while drunk when he can profit from it. 

Thursday, April 22, 2010

Lawyers win big in sexual harassment settlement

Litigation dragged on for nearly seven years.  It ended when the plaintiffs – the Middlesex County Sheriff’s Department – agreed to a $1.59 million settlement, reports Tom Haydon in The Star Ledger. 

Two female sheriff’s officers filed a sexual harassment lawsuit against the county in 2006.  The paper trail led back to March 2002, when the officers say that the county personnel director failed to address their complaints. 

Admitting no wrongdoing, Middlesex Freeholders agreed to the settlement one day before the trial was set to begin in U.S. District Court in Newark.  County Freeholder Director Christopher Rafano said that the State’s discrimination laws “make it difficult, if not impossible, for the county to effectively defend itself.”  He said that Middlesex County will ask the Legislature to review discrimination laws and legal fee requirements.  Rafano said that the Legislature should also consider modifying the Tort Claims Act, which would provide immunity to public entities in discrimination cases.  Middlesex County will pay $837,500 in attorney’s fees under this settlement agreement; the plaintiffs will receive a total of $752,500.  This follows a $1 million settlement the county agreed to in order to settle a sexual harassment lawsuit filed by five female sheriff’s officers last May.  It’s unclear whether the county will be able to recoup the money from its insurance carriers.   

There are several unfortunate situations here.  First, the number of female sheriff’s officers who have had sexual harassment lawsuits settled with the county in the past year: seven.  What is the reason behind the flood of litigation? There are two possible explanations: there is clearly a hostile work environment that the Sherriff’s department has chosen to ignore – in which case, it’s about time this situation is addressed in criminal court and internal changes are made so other officers aren’t made to suffer through similar situations.  The focus should be on protecting employees, not making lawyers rich.  The other explanation is also hard to digest.  If, as the Freeholder stated, it’s “difficult if not impossible” for the county to defend itself against allegations of sexual harassment, (and I’m not suggesting it occurred here) what is to stop employees from filing frivolous lawsuits against the County when they know a large settlement is likely?  The county maintained that in at least one instance, the employee was fired not in retaliation, but because she failed a qualification test with her service weapon.  We need to examine the systemic reasons behind this statement, and determine what protections the county – and taxpayers – have against frivolous lawsuits when they do emerge. 

Next, the obvious: the lawyers involved were disproportionate winners in what is an unfortunate situation.  The settlement itself is huge, and $837,500.00 is a lot of money to make on the backs of women who say they were “subjected to years of sexual propositions, innuendo, and lewd, offensive behavior.”  After dividing the award between them, the alleged victims will each have $376,250.00 in damages.  Nothing to sneeze at, but it’s less than half of the attorneys’ compensation. 

While this case is over, the issues it raises are far from settled. 

Monday, April 19, 2010

Read NJLRA's Op-Ed in today's Bergen Record!

Tuesday, April 20, 2010
Marcus Rayner is the executive director of the New Jersey Lawsuit Reform Alliance.

AS NEW JERSEY’S unemployment rate hovers around a regionally high 10 percent, our businesses face a stagnant economy coupled with high business costs, and our state and local governments must address significant spending cuts, some may not realize that New Jersey’s economy is taking another serious hit – from frivolous litigation.

According to Forbes Magazine, New Jersey is “one of the worst places to get sued in America.”

The American Tort Reform Association has listed New Jersey in its Top Five “Judicial Hellholes” for the third consecutive year. And that’s not an overstatement: For many high-tech, bio-tech and research-based companies, one frivolous lawsuit can spell financial ruin, and send ripple effects through our struggling economy.

Consider this: Consumers do not have to be defrauded in order to file a lawsuit under New Jersey’s Consumer Fraud Act. They don’t have to ask for a refund before suing in court, either. Warnock Dodge found this out when a customer believed she was overcharged by $40 and immediately marched to court. New Jersey courts also welcome out-of-state plaintiffs.

In one such case, an Alabama resident who claimed a popular acne medication gave him inflammatory bowel syndrome received a $25 million judgment – money he will take with him to Alabama.

Go to complete Op-Ed.

Thursday, April 15, 2010

Around the web, 4.15.2010

Crist signs bill limiting Fla. slip-fall suits- Miami Herald/The Associated Press


TALLAHASSEE, Fla. -- Gov. Charlie Crist has signed a bill that will make it harder to win slip-and-fall lawsuits against Florida businesses.

Study: Malpractice worries help drive health costs Stephanie Nano/The Associated Press


NEW YORK — A substantial number of heart doctors — about one in four — say they order medical tests that might not be needed out of fear of getting sued, according to a new study.

AT&T lawsuit: How I became a TORT victim

 Chidem Kurdas/The Christian Science Monitor  ∙ 4.9.2010

 Last month, my husband and I received in the mail a small card telling us that we were included in a class action settlement involving our Internet service provider, AT&T. This was news. We had not heard about the lawsuit claiming that AT&T “failed to deliver DSL service to its customers at the speeds promised.”

As usual in such cases, AT&T denied the allegations but agreed to settle to avoid continuing litigation. “You have legal rights and options, such as submitting a claim for benefits,” the card informed us. Further down in the fine print it emerged that we “may be entitled to a one-time payment of $2.00.”

Wednesday, April 14, 2010

New Jersey Appellate Court’s Decision may favorably impact Construction Law, Products Liability Law

Last summer, a man sued both the manufacturer and contractor who built his modular home after the second story of the home collapsed and caused him undisclosed personal injuries.  The Court’s findings in Miles v. Deluxe Bldg. Systems, Inc.), however, may surprise you. 

The home had been constructed 18 years ago, so it fell within the purview of New Jersey’s Statue of Repose (SOR), wrote Alan Levy for the New Jersey Law Journal.   SOR indicates that no cause of action for injury or property damage may arise from a deficiency in “the design, planning, surveying, supervision or construction of an improvement to real property” more than 10 years after construction is completed or services conclude.  Basically, this means that once ten years have elapsed, contractors bear no liability whatsoever.   It is similar to a Statute of Limitations, but not the same (Statute of Limitations, for instance, begins to run from the date an injury occurred; SOR begins running from the date work was completed, irrespective of when the alleged injury occurs). 

A lot can change in a decade.  Manufacturers and contractors – especially those with multiple employees – are no exception.  A 1980 court decision stated that “Injury occurring more than ten years after the performance of the negligent act simply forms no basis for recovery.  The injured party literally has no cause of action.”

Some states have SORs which “explicitly provide immunity to product manufacturers once a certain period of time has passed since the product was manufactured,” writes Levy.  “New Jersey provides no specific statutory protection to product manufacturers.”  This decision, however, suggests that the protections of SOR may be extended to product manufacturers as well. 

Tuesday, April 13, 2010

Another Blow for Irvington

If you need help understanding the correlation between lawsuit abuse, higher taxes, and reduced services, this one is for you. 

Consider ledes from two Star-Ledger articles, published days apart:

“Facing multi-million dollar deficits due to cuts in state aid and reduced revenue from other sources, the township has sent out layoff notices to 20 police officers and 10 firefighters… Although the township is working to close a roughly $5 million budget gap for the fiscal year ending June 30, the layoffs would trim just $132,000 from that budget,” (Richard Khavkine/ The Star-Ledger, 4/9/10).

“A Superior Court appeals panel has turned back Irvington’s attempt to get reimbursed by its insurance company for a $5 million personal injury award that it paid out to a township woman injured by an electrical shock,” (Richard Khavkine/The Star-Ledger, 4/13/10).

The $5 million personal injury award was paid to Chantel Porras, a township resident who was injured when she received a shock when she tried to move a fire department water pump left in a family member’s flooded basement nine years ago.  Porras was initially awarded $100,000 after non-binding arbitration.  She then demanded a jury trial, which resulted in a $5 million judgment against the township in 2006.  A trial judge reduced the amount to $1 million, only to have the $5 million amount reinstated on appeal. 

Adding insult to injury for Irvington, the township’s insurance company denied coverage for the verdict and refused to pay the award, citing the township’s “lack of cooperation” throughout the proceedings.  The State Superior Court’s Chancery Division sided with the insurance company.  The entire burden of what Mayor Wayne Smith said could place yet another stronghold on the Township’s budget is theirs to absorb.  Interest has been accruing on the judgment since the Irvington’s final appeal to the state Supreme Court was denied in October – at a rate of $550 a day.  Severely strapped for cash, the Township bonded $5.4 million to pay the plaintiff’s judgment and interest.  Mayor Smith said that 20 police officers and 10 firefighters might be laid off to bridge Irvington’s budget shortfall – which amounts to roughly $5 million.   

In a letter to Mayor Smith, Councilman David Lyons said that Irvington residents – who have seen a 25% reduction in violent crime over last year – said that there’s still much work to be done, and staffing reductions in police and fire could hamper these efforts.  “Our citizens already complain about very poor police response time.  This will no doubt jeopardize the public’s safety and well being.” 

Municipalities’ seemingly bottomless pockets make them an attractive scapegoat in situations such as this one.  Ms. Porras initially sued a number of entities after her accident: the fire department, the property owners, and the pump’s manufacturer were all in addition to Irvington Township.  She later dropped the suit against all parties except for the Township.  In addition to the judgment, the taxpayers are footing the bill for the numerous rounds of litigation involving both Ms. Porras and the insurance company which refused to pay.  Of course Ms. Porras should be fairly compensated for her injuries.  But it isn’t fair compensation when a plaintiff only wants to be compensated from the largest potential revenue source. 

Corporations can raise prices or cease manufacturing of certain products in liability cases in order to pay large verdicts (see Accutane post) and avoid bankruptcy.  Options for municipalities are even bleaker: raise taxes or cut services.  Period.  And in municipalities which struggle to attract a tax base and have a large concentration of residents living in poverty, lawsuit abuse can have devastating effects. 

Police Detective Jerry Ramos may have captured the real-world effect of this verdict best.  “Gang members don’t lay off, they hire every single day,” he said.  “The only way to get rid of these gang members is to hire more cops.”

It’s hard to do that with a $5.5 million judgment hanging over the heads of Irvington residents. 

Wednesday, April 07, 2010

Is Honda the new Toyota?

Last week, The Star-Ledger reported that motorist Jon Alin may proceed with his class-action lawsuit against Honda, in which he claims that the company knowingly sold cars with defective air conditioners and refused to pay for their repair. 

According to Businessweek, Alin was reportedly tipped off by a Honda technician’s statement that the broken air conditioner in his leased 2006 Odyssey is a “common problem.” 

U.S. District Judge Katharine Hayden dismissed Alin’s claims of “breach of implied warranty and unjust enrichment,” but Alin may proceed with claims that Honda violated the New Jersey Consumer Fraud Act and committed common law fraud. 

Since the lawsuit includes Hondas and Acuras sold or leased between 2000 and 2009, the potential cost to Honda – and profit for the plaintiffs’ attorneys – is huge. 

While air conditioner fraud may seem mundane, you may recall that the recent push by the plaintiffs' bar to cash in off of  litigation against Toyota began with recalled floor mats.  Let’s hope that litigation against Honda doesn’t take a similar path – for consumers’ sake. 

Tuesday, April 06, 2010

3rd Circuit Court of Appeals: “Defective Sperm” can’t be the basis for a product liability lawsuit

While it makes for a good headline, the 3rd Circuit Court of Appeals decision in Donovan v. Idant Laboratories isn’t a laughing matter for the parties involved.  The plaintiff, Pennsylvania resident Donna Donovan, sought services from New York-based Idant Laboratories in 1994 after being assured that prospective sperm donors undergo rigorous screening which greatly exceeded mandated standards. 

Donovan’s daughter, Brittany, was born two years later.  She was diagnosed as a “Fragile X” carrier the following year by the family’s physician, and Donovan stated that she noticed abnormalities in her daughter’s development.  “Fragile X” is a genetic mutation which is known to cause an array of developmental disabilities, including mental retardation and behavioral disorders.    Brittany inherited it from the sperm used to conceive her.   

The plaintiff’s lawyers contend that sperm (at least when purchased from a sperm bank) is a product.  At issue is whether the sperm bank should be liable for the quality of its product and be obliged to financially support the effects of a mutation on the conceived “victim.”

Writing for The Legal Intelligencer, Shannon Duffy reports that the Court found that “genetic defects in sperm from a sperm bank cannot form the basis for a products liability suit.”  Allowing such a claim “would be tantamount to recognizing a claim of ‘wrongful life.’”

The suit wasn’t filed until a decade after the child’s birth.  In addition to exceeding an acceptable timeframe, the Court rejected the plaintiff’s inference that the child’s “genetic makeup” is her injury. 

The plaintiff doesn’t explicitly state that she would have had an abortion if she knew of the sperm’s deficiency.   

The initial case appeared before U.S. District Judge Thomas O’Neill Jr., who initially ruled in favor of the plaintiff, stating that “the sale of sperm is considered a product and is subject to strict liability.”  He reversed himself two months later and dismissed the case entirely, recognizing that it would open “wrongful life” issues, and that significant time had elapsed since the mutation was discovered. 

The appellate Court’s decision was wise.  At what point does personal imperfection become an injury for which another must be held accountable?