« September 2010 | Main | November 2010 »

8 posts from October 2010

Friday, October 29, 2010

Have a happy, safe, and lawsuit-free Halloween!

I pulled some memorable Halloween-related lawsuits in honor of the holiday this weekend.  While you’re dodging crazy goblins and ghouls, you might want to keep a watchful eye for crazy lawsuits, too. 

The Haunted House was too scary.  Yep, it was filed by an adult against a large company.  The Plaintiff said that the Universal Studios attraction caused her “mental anguish” and “extreme fear.” 

Maryland lawsuit over Halloween fundraiser is a real scream.  This is a recent case actually going before the courts in the Old Line State.  Your Halloween fundraiser two hours from my Halloween fundraiser might scare patrons away.  Time to call in the courts.  

And my personal favorite, posted by Robert on the Insurance Blog: The Only Thing Scarier Than Halloween? A Trick-or-Treater's Liability Lawsuit

Robert talks about how to protect oneself from the “overzealous trick-or-treater” whose parent happens to be a personal injury lawyer. 

Jack o lantern

Wednesday, October 27, 2010

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. 

Thursday, October 21, 2010

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 20th

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

Tuesday, October 19, 2010

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). 

Monday, October 18, 2010

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

Good news, sort of: New Jersey is only the 10th 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 5th 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

Thursday, October 14, 2010

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. 

Thursday, October 07, 2010

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

Tuesday, October 05, 2010

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