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10 posts from March 2011

Tuesday, March 29, 2011

Read NJLRA’s op-ed in the Home News Tribune & Courier News

Lawsuit abuse a continuing drag on NJ business

By Marcus Rayner | March 29, 2011

“From a college student suing a Chinese restaurant for soup she spilled on herself (Somerset County), to a drunken motorcyclist who drives into a parked car and sues a restaurant (Ocean County), lawsuit abuse has an economic impact on businesses in every corner of the state. Every dollar spent fighting nonsense lawsuits is a dollar not spent on innovation or job creation, and it doesn't need to be this way.”

 Several hundred miles from here, Illinois business owners are learning about a place with an abundant supply of workplace talent and a high-quality lifestyle sure to make any entrepreneur envious. Weary from crippling tax hikes, a labor shortage and a shrinking consumer base, Illinois business owners can only dream about this land of milk and honey: New Jersey.

"Well-educated, diverse talent pool," reads the ad, placed by New Jersey Gov. Chris Christie. Want to start a business? "Innovative financing, incentive and assistance programs. Exceptional quality of life."

The catch? Here in New Jersey, businesses are vulnerable to lawsuit abuse. Everything the ad says about New Jersey is true. Christie's efforts to improve the business climate in New Jersey, combined with our state's existing assets make New Jersey fertile grounds for entrepreneurship. His outreach to the national business community is both constructive and sorely needed as we seek to reclaim our economic footing here in New Jersey. And business retention as well as recruitment will be critical to our economic growth over the next decade, a point that leaders in both political parties have made.

Click here to read entire piece.

Monday, March 28, 2011

OLS: NJ’s unemployment rate lags due to “changes” in “high end job market”

We’ve mentioned in previous posts that New Jersey’s pharmaceutical companies shed 7 percent of their workforce last year, according to a report published by the Healthcare Institute of New Jersey

As the Senate Budget Committee began its budgetary hearings for 2012 today, Senator Paul Sarlo asked Legislative Budget Officer David Rosen why, “despite ambitious pro-business policies touted by the governor,” the Garden State’s unemployment rate continues to exceed 9 percent. 

“The fact that N.J.’s high end job market has largely been telecomm and pharmaceuticals – [those are] two industries that have been transformed largely beyond our control,” Rosen replied. 

Of course, a third job field may have had an impact on the previous two: litigation tourism. 

A cost-free way to stop the hemorrhaging of high end jobs is to enact changes to New Jersey’s Consumer Fraud Act, which has become one of the most abused laws of its kind.  Assemblyman John McKeon has introduced legislation, A-3333, which would make the law less hostile for high-end industries in New Jersey. 

Politicker NJ’s Darryl Isherwood has additional commentary on Monday’s budget hearing.

Thursday, March 24, 2011

Ocean County Dram Shop case is heard by N.J. Supreme Court

You may recall LRW’s post last year about Voss v. Tranquilino, A-110-09 (“Drive drunk, hurt yourself, and blame someone else,” 4/29/10). 

Frederick Voss, who rode his motorcycle into a car driven by Kristoffe Tranquilino after leaving Tiffany’s Restaurant in Toms River drunk, sued both parties for the injuries he caused himself.  Claims against Tranquilino were dismissed, but the claims against Tiffany’s were allowed to proceed. 

Arguments in the latter case were heard by the New Jersey Supreme Court last week. 

I don’t need to reiterate the perils of driving while intoxicated or failing to accept responsibility for one’s actions, or the ridiculousness of suing for injuries you caused yourself.  Ruling in Voss’s favor would not only send a bad message, but would ultimately shift responsibility to the establishment and not the individual.  It would also likely result in higher insurance prices for the restaurant industry, which usually translates into higher prices as well. 

Voss v. Tranquilino’s path to the NJ Supreme Court

 Before the Court:  Drunken drivers cannot sue an insurance company for damages; however, can drunken drivers injured in accidents file a claim against the establishment which served them liquor?

1987 – The New Jersey Licensed Alcoholic Beverage Fair Liability Act, N.J.S.A 2A:22A-1 to -7 is enacted (Also known as the “Dram Shop Act”)

The Act prohibits liquor establishments from serving patrons they know, or should have known, are intoxicated.

1997 – Insurance law amendments enacted, N.J.S.A. 39:6A-4.5(b)

A driver convicted of DWI in connection with an accident “shall have no cause of action for his or her injuries.”

2002 – Camp v. Lummino, 352 N.J. Super. 414 (App. Div. 2002)

Appellate panel decided that immunity did not apply in a host-liability case, allowing a claim by an underage drunk driver to proceed with a claim against the homeowner of the place where he had been drinking.

2004 – Caviglia v. Royal Tours of America, 178 N.J. 460 (2004)

Court upholds N.J.S.A. 39:6A-4.5(a), which bars any “cause of action for recovery of economic or nonecomonic loss” to the driver of an uninsured vehicle who is injured in an accident.

2009 – Voss, intoxicated, causes an accident with Tranquilino, a motorist

 Voss is injured.

2010 – Voss files suit against both Tranquilino and Tiffany’s, where he had been served alcohol prior to the incident

Ocean County Superior Court Judge John Peterson dismisses claim against Tranquilino, citing the 1997 amendments.  The claim against Tiffany’s is allowed to proceed because they did not repeal the Dram Shop Act.  Tiffany’s appeals.

2011 – Voss v. Tranquilino reaches the NJ Supreme Court

The restaurant’s attorney argues that the 2004 case should guide the Court’s decision, and the Legislature revoked the ability of a drunk driver to sue the establishment that served him with the 1997 amendments. 

Monday, March 21, 2011

Honey, did you hear that?

Next time you hear a noise in the middle of the night, you might want to think twice before asking your partner to investigate. 

That’s because a New Jersey Appellate Court recently ruled that asking for help in such a situation confers a “duty of care,” and if your friend/neighbor/spouse/random passerby is injured or killed while checking on that noise, the responsible party is… you. 

Yes, you.

This decision stems from a 2003 incident in Irvington, New Jersey.  Jean Robert Vertus was wrapping up with a client in his financial services office in the city, when the pair heard something in the building.  Vertus exited through a side door and went to a the home of a nearby friend, Cosme Novaly.  The client, Naitil Des ir, did not. 

In an apparent state of panic, Vertus told Novaly that “there was “something going on” in his building. 

Instead of calling 9-1-1, Novaly decided to see what was going on at the building. 

Minutes later, Vertus heard gunfire.  He ran back to the building, where he found Novaly on the sidewalk bleeding to death.  Des ir was also shot and killed. 

Novaly’s estate later sued Vertus.  They alleged that Vertus had a “reasonable duty of care” because he asked Novaly for “help in circumstances he knew or should have known would expose Novaly to risk of injury.”  Essex County Superior Court Judge Michael Casale dismissed the family’s lawsuit on summary judgment, and they appealed. 

The lawyer for the Novaly family said that Vertus should have taken steps to ensure Novaly’s safety.  The appellate panel said that Vertus “knew or should have known” that Novaly could be exposed to danger, and had a duty to warn him. 

So, before asking someone to walk you to your car, see who’s outside, or find out the source of a noise, remember to shout “Please note that you might be in danger if you come to my aid.  You have been warned,” in order to shield yourself from liability.    

“Help, I hear something,” just doesn’t cut it. 

 Case: Estate of Novaly v. Vertus.

Wednesday, March 16, 2011

New Jersey woman bummed over losing lottery numbers is in the running for “Ridiculous Lawsuit of the Month”

The Record’s Merry Firschein reported that Rakel Daniele of Fort Lee thought she won a quarter-million dollar “Mega Millions” lottery prize, only to find out that WABC called the wrong winning numbers.  WABC called 1, 2, 3, 4, 5, and Mega ball 12.  Daniele had all of these, minus the Mega ball number.  As it turns out, the winning ticket on June 19, 2009 would have read “4, 9, 12, 16, 46.”    

Instead of shouting expletives and getting on with life, Daniele is seeking $75,000 from WABC-TV, the Walt Disney Corporation, and an unidentified “Jane Doe.”  The lawsuit is now in federal District Court in Newark.  (Seriously). 

In addition to being “severely damaged” by relying on “false and incorrect” lottery results, the station added insult to injury when it rebroadcast the wrong numbers a second time.  Her complaint says that WABC went “beyond all possible bounds of decency, and were atrocious, and utterly intolerable in a civilized community.”  (Really).

Call me a cynic, but what I think goes beyond all possible bounds of decency is that a person would waste the court’s time and resources because she’s bummed.  Really. 

Nevertheless, you can vote for the most ridiculous lawsuit of the month at Institute for Legal Reform’s Website, http://www.facesoflawsuitabuse.com/poll/

Tuesday, March 15, 2011

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

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

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

Chilson observes the following:

  • The City subcontracts a significant amount of its legal work to private law firms, which drives taxpayers’ total litigation costs even higher.
  • Nine of the actions are people suing the City for “Property Damage,” which he suspects are damage to cars due to potholes.  Wouldn’t this money be better spent on fixing the problem instead of incurring a bottomless financial aftermath of lawsuits?

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

Monday, March 14, 2011

Trial bar fighting efforts to restrict lawsuit lending

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

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

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

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

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

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

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

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

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

Wednesday, March 09, 2011

Photos from NJLRA's Spring Membership Luncheon

Rich Bagger, Governor's Chief of Staff
Rich Bagger, Chief-of-Staff to Governor Christie

Marcus Audience


Monday, March 07, 2011

A-1982 released by Assembly Health Committee!

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

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

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

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

Wednesday, March 02, 2011

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

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

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

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

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

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

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