April 21st, 2014

Shooting the Messenger (I’ve Been Sued Again) – Updated

Michael J. Katz

Michael J. Katz

Last year a judge eviscerated an orthopedic expert in open court for being a liar. A legal blogger reported it. And now that expert has taken his wrath out on the blogger by suing him for defamation.

And it turns out that I’m the blogger that reported it, and last week suit was filed against me to the tune of $40 $200* million. This is the story.

You remember Dr. Michael Katz, don’t you? He’s the defense expert I wrote about last year that was subjected to the deeply lacerating comments of Justice Duane Hart, who called him a liar from the bench. And when I say he called him a liar, I mean that he did it many, many times and used the word “perjury” to describe the testimony.

The judge also, apparently, used the phrase “Typhoid Mary” in addition to “a liar and a thief,” and invited the attorneys in the courtroom to spread the word that Dr. Katz had been caught lying, according to the suit.

Just to be clear, as we start here, I had no role in that litigation.  Rather, the boundaries of the suit concern my reporting on what transpired in the courtroom and offering my opinions on its significance.

The basis of Justice Hart’s wrath against Katz was a medical-legal exam that Katz did on behalf of a defendant in a personal injury suit. Two issues arose from it.

First, that the brief nature of the physical exam — an orthopedic exam of the shoulder that lasted, according to the transcript of the proceedings, one minute and 56 seconds, but you can view it yourself here on YouTube — conflicted with Katz’s claim that his customary and usual exam was 10 to 20 minutes. The surreptitiously recorded video also shows a couple minutes of history being elicited and the doctor asking what hurt.

Second, and apparently far more important to Justice Hart than the time it took to do the exam, is that he didn’t believe Katz did all of the tests he claimed he had done in that brief period. How do we know that was the most important thing to Justice Hart? Because Katz quotes him saying so in the Complaint.

Katz, according to the judge, makes millions of dollars doing these so-called “independent” medical exams, or IMEs.

I reported on those court proceedings and some of Justice Hart’s lacerating remarks, as well as a subsequent court appearance before him, and reported the judge’s statements that he was going to refer Katz to the District Attorney for criminal investigation, to the administrative judge to commence civil contempt proceedings and to the Office of Professional Medical Conduct to investigate action against his medical license.

That’s a lot of whoopass.

Dr. Katz concedes in his Complaint that Justice Hart made heaps of cutting comments about his integrity, and has now agregated them into one place. This includes comments Justice Hart made both on the record and, allegedly, off.

In Katz’s recitation of facts in the Complaint — a stark re-telling of a jagged wound being ripped open by a judicial gavel — it is asserted that Justice Hart said (¶75)…:

off-the-record, that Dr. Katz’s career doing IME work might be over, calling him a “no good liar,” and told him to retain a lawyer.

And that (¶ 77):

He threatened Dr, Katz with criminal prosecution and imprisonment multiple times, off-the-record, throughout the morning.

And this (¶79):

The doctor’s career doing IME’s might be over. If he gets caught in a lie on something that’s material at trial his future use to anyone is useless, correct? That will follow the doctor forever.

And that Justice Hart said (¶82):

I would strongly suggest you do not do anything because you’re in more trouble than you think. It’s probably that your career doing IME’s is over. It’s possible, unless this case is settled, that I might be taking more – the attorneys have a duty basically not to do anything with regards to the district attorney. If I find out or if I even suspect something is going on I have a duty to get in touch with the district attorney and getting in touch with the district attorney is not a good thing for you in this case. Understood?

And that this occurred in the presence of Katz’s criminal defense attorney who subsequently appeared (¶84):

Justice Hart announced, in open court, but off- the-record, “Your client is a liar and a thief.”

And this (¶95):

During the court appearance, despite stating that he would seal the record in exchange for a settlement, Justice Hart actively invited other attorneys who were present, or even in the courtroom on unrelated business, to order copies of the transcript in order to “spread the word” concerning Dr. Katz’s alleged perjury.

And this (¶98):

Justice Hart referred to Dr. Katz as “Typhoid Mary” and accused him of “getting caught red-handed in an out-and-out lie,”

And this (¶99)

he gave a laundry list of tests that he did…Did he perform those tests in whatever time he did [sic] that he testified to? No.”

And this (¶120):

Off-the-record, Justice Hart continually pressured Dr. Katz to state on the record he would no longer practice “medical-legal” examinations, repeatedly berated Dr, Katz, stating that “his career was over,” and even stated that defendants’ counsel wanted to “tear [Dr. Katz] a new asshole.”

And this (¶128):

Again counsel, it is not the time so much if the doctor thinks he can explain the time. It is not the time problem. It is that there are tests that he testified to that he didn’t do. That is the perjury.

And this in trying to persuade him to retire (¶128):

I unsealed the record. Everybody from now on when he testifies as to the tests that he performed, it is always going to be questioned from now on. After about a month or two, nobody is going to go near him anyway. So he is not giving up much. What he is giving up is me referring it to the District Attorney and to the Administrative Judge. I would think that he wants to consider it again. Nobody is going to go near him.

And this to his criminal defense lawyer (¶130):

It is that the tape shows that he didn’t do the tests that he spent a considerable amount of time talking about that he did. That is the perjury. Yes, he didn’t do the tests. It is not just me saying it. It is not just the plaintiff saying it. The defendants are saying it too. Does your client really think if the insurance industry or some of the insurance companies that hired him before when they find out he lied, do you really think they will go near him?

In other words, the damage to Katz’s reputation were based on the exceptionally sharp comments of Justice Hart. The was brought on, according to the judge, by Katz’s conduct.

But Katz can’t sue the judge. Hence the title of this post, Shooting the Messenger, for I was the one to report it.

I ask you dear reader, is this not newsworthy? Especially in light of Katz’s claim that he has “testified in countless personal injury and medical malpractice cases as an expert witness, most often for defendants, over the past twenty years” (¶10) and that he was “one of the premier expert witnesses in the field of orthopedic medicine” by the time this case came up (¶41) and that he was “a highly regarded expert witness in the area of orthopedic medicine” (¶44).

So, if you take his self-description at face value, yes, the trauma to such a person’s integrity by a judge would certainly seem to fit any definition of newsworthiness.

Katz also claims in his lawsuit that “there is no indication” Justice Hart carried through on his statement that he would refer him to the D.A. or to the Office of Professional Medical Conduct (¶22). Maybe he did, maybe not, I have no way of knowing since investigators don’t generally blab about what they are investigating. And apparently, Katz doesn’t know for sure either.

But then, quite oddly, he repeated this mantra of the judge allegedly not subsequently reporting. He repeated it many, many times. As if the judge’s conduct subsequent to publication was important. This is a sample from the Complaint:

149. Turkewitz also falsely stated and implied that Dr.Katz was being investigated by the Attorney General’s Offîce and the Office of Professional Medical Conduct despite the fact there was no evidence of any such investigation when Turkewitz published his blog posts.

Given that Katz had already quoted the judge saying he was going to do exactly that — report him to the D.A. and Office of Professional Medical Conduct — it is bizarre to complain that I reported it. How can it be defamatory to report on what a judge said?

This is one of the many comments that Katz himself quotes of Justice Hart on the issue (¶124):

Let the record reflect that I gave Dr. Katz the option of and I would institute a special proceeding to retire from the medical/legal business. Retire at the time and he has declined. What I am now going to do, I am going to order a full transcript of everything, the trial and the subsequent proceedings. I will present that to both the administrative judge of Queens and the District Attorney. I would recommend to the District Attorney that they explore prosecuting Dr. Katz for perjury.”

This dumping of crap into a complaint indicates a person scrambling to find an issue somewhere, someplace.  And it reminds me of a post I wrote last year, on the importance of lawyers saying “no” to potential clients. Lousy defamation cases happened to be one of my examples.

Vetting a new case is important. The fact that a potential client has hurt feelings because a judge said mean things about him, and it was reported, is not enough to sustain a defamation lawsuit. Not in the United States, anyway.

In my postings I offered not only my opinions on why the potential legal troubles were significant to Katz, but more importantly, offered my opinions in a series of posts about why I thought this was one piece of evidence of pervasive insurance fraud that I believe is ongoing by the insurance companies themselves. I’ve called for an investigation by New York State Attorney General Eric Schneiderman or NYS Financial Services Superintendent Benjamin Lawsky (as he oversees the insurance industry).

You may consider these calls for an investigation my petition for redress of grievances.

And now I’ve been sued for my efforts. That’s right, sued for reporting on proceedings in open court and offering my opinions.

first-amendment-719591I think that most people with even a rudimentary understanding of our First Amendment would know that such a suit is verboten. And certainly anyone that has gone to law school must know this. Because both the freedom of the press and the right to petition for redress of grievances are two our First Amendment freedoms.

And lest the part about a free press be unclear, New York has its own Civil Rights Law § 74 that makes it even clearer, though Katz and his counsel seem to be blissfully ignorant of it:

A civil action cannot be maintained against any person, firm or corporation, for the publication of a fair and true report of any judicial proceeding, legislative proceeding or other official proceeding, or for any heading of the report which is a fair and true headnote of the statement published.

The Complaint makes some other patently idiotic allegations, such as this one (¶25):

Turkewitz attempts to generate interest in his site by posting seemingly provocative and/or scandalous material.

Even if was true true — and the ABA Journal apparently didn’t think so when it kept picking me for its Blawg 100 and selected me for its Blawg Hall of Fame, based on being “a great source for news and commentary” — what difference would it make?

Is the citizenry supposed to curtail opinions because a writing is provocative? Can anyone else hear Thomas Paine laughing? Has anyone seen cable “news” shows lately or listened to talk radio? Rush Limbaugh (and a gazillion others) would shrivel up and die if he couldn’t be provocative or scandalous.

So where is the gravamen of the complaint against me?  It is by this type of allegation (¶27):

Turkewitz falsely stated and implied, among other things, that Dr. Katz had committed perjury, fraud and was guilty of racketeering. Turkewitz’s blog posts were intended to create the impression that Dr. Katz had been charged with and/or convicted of criminal perjury and other crimes which would make him unfit to act as an expert witness.

The problem with the allegation is that I never said he was convicted of anything. And Katz’s lawyer knows that, which is why there is no quote of me ever writing such a thing. But it does get repeated many times, as if repeating it like some talismanic incantation will magically make it truthy.

And then there is this one (¶28):

Turkewitz’s blog posts go so far as to expressly compare Dr. Katz to a “convicted felon” and a “prisoner.” Dr. Katz was not charged with or convicted of any crimes.

Nope. Missed again. There is a reason there is no real quote from me. Because this is what I actually wrote about witnesses in general (with reference also to Dr. Robert Israel, who has his own problems from medical-legal exams):

Defense attempts to preclude Drs. Katz and Israel from testifying in future trials seem doomed to fail. They are, after all, eyewitnesses to injuries.  If a convicted felon came upon a car accident shortly after it happened and saw injuries, would he be precluded from testifying simply because one side or the other didn’t like his testimony? If he saw the injuries a month or year later, would he magically be precluded? Are prisoners precluded from testifying? Making matters worse for those that hired these doctors over the years is that they are responsible for creating them as witnesses.

While the medical-legal examiner is an expert that can give opinions, s/he is also a fact witness as to what transpired on a particular day. A fact witness is a fact witness. It matters not if the witness to a collision is a nun or a felon, or the witness is a doctor hired to defend a lawsuit. The only question is whether the witness is available to testify.

And my opinion is shared by my co-defendants, Paul Kassirer at defense firm Lester Schwab.  Kassirer is quoted in the Complaint with having sent my initial posting about Katz via email to other defense lawyers with this comment (¶212):

“More to the point, even if he is eventually arrested and convicted of perjury, NY law is clear that he is not legally ‘unavailable’. Accordingly, whoever has retained him will not be entitled to another IME. As long as he was licensed and was competent at the time of the exam, he can testiff and therefore is not ‘unavailable.’

And this is all backed up by New York law, as Katz is certainly not the first witness to experience legal or credibility issues. On February 27th of this year, Justice David Schmidt in Brooklyn dealt with this exact issue regarding Katz, and concluded that the defense attempt to preclude his testimony must fail. In Atchinson v. Metropolitan Enterprises, he wrote, after describing the comments by Justice Hart:

“[t]he defendants’ concern that the plaintiff may impeach the examining physician’s credibility … [is] not a sufficient basis to compel a second examination” (Carrington v Truck-Rite Dist. Sys. Corp., 103 AD3d 606, 607 [2d Dept 2013], citing Schissler, 289 AD2d at 470Futersak v Brinen, 265 AD2d 452 [1999]). The instant facts are analogous to the cases of a public attack on the professional credentials of an IME physician; such cases hold that instances of compromised professional integrity do not warrant a subsequent IME (see e.g. Giordano v Wei Xian Zhen, 103 AD3d 774, 775 [2013] [fact that examining physician was arrested and surrendered medical license subsequent to examination and note of issue filing does not justify additional examination]; Carrington, 103 AD3d at 607 [same];Schissler, 289 AD2d at 470 [fact that examining physician was subjected to professional discipline subsequent to examination and note of issue filing does not justify additional examination]; Futersak, 265 AD2d at 462 [same]). Defendants advance no authority suggesting that the present situation concerning Dr. Katz is distinguishable because he has been accused (as recorded in a court transcript) of perjury.[5]

In the subject heading, I wrote that I’ve been sued “again.” I was sadly, dragged into the Rakofsky v. Internet fiasco. My response in that suit was to say, “go shit in a hat and pull it down over your ears,” though I did offer the pseudo-legal latin version for those that want lawyers to speak pretentiously: vade et caca in pilleum et ipse traheatur super aures tuos. 

In that post, I also detailed the other times I was threatened. I’ve also defended another defamation suit with a take-no-prisnors attitude. It has never ended well for those that threatened or sued.

Was filing this suit a dumb thing to do? Yes, on multiple levels.

First, if Justice Hart didn’t previously report this matter to the D.A. or the Office of Professional Medical Conduct, this suit may act as a reminder.

Second, Katz has now further publicized the vicious tongue-lashing that he received from a judge. I learned about it from a New York Post reporter, and that call was followed up by a Daily News reporter, both the day after it was filed. Who alerted them?

By suing the messenger, Katz invites not only repetition of the claims he has catalogued, but enormous backlash from free speech advocates. There are a great many people who don’t take kindly to frivolous defamation claims and the chilling of free speech that often comes with them. There is a fair chance that those who did not previously know about Katz, will now learn.

Updated 5/28/14: Justice F. Dana Winslow has ruled on a motion in another case about whether Katz can be cross-examined on Justice Hart’s conclusions. The answer is, yes he can. The matter is Graser v. Dimeo, where Katz claims to have done a 45-minute defense medical exam.

This was the reasoning:

It is well settled that, for impeachment purposes, a witness may be cross-examined with respect to prior immoral, vicious or criminal acts which have a bearing on the witness’s credibility. Badr v. Hogan, 75 NY2d 629. The Court of Appeals has extended the rule beyond the “immoral, vicious or criminal’ categories to include prior conduct that simply demonstrates the witness’s “untruthful bent,” such as using an alias [People v. Walker, 83 NY2d 455], or publishing books advocating cheating [People v. Coleman, 56 NY2d 269].

The cross-examiner must have a reasonable basis in fact for asking questions about prior misconduct, and must do so in good faith. People v. Kass, 25 N.Y.2d 123; People v. Green, 272 A.D.2d 341. If the witness denies the prior misconduct, the cross-examiner may press the witness further, but is not permitted to introduce extrinsic evidence to refute the witness’s denial. Id., at 635.

In the case at bar, the Court finds that plaintiff has a reasonable, good faith basis, to cross-examine Dr. Katz regarding the truthfulness of his testimony in the Bermejo Action. Dr. Katz’s prior conduct need not have resulted in a formal adjudication of wrongdoing. It is enough that facts exist which tend to show a propensity for untruthfulness; that is that Dr. Katz gave false information in circumstances in which he was required to be truthful. See People v. Walker, 83 NY2d at 461. Plaintiff’s counsel may ask Dr. Katz about his testimony in the Bermejo Action and about the underlying facts which suggest that his testimony was false. Counsel may not, however, call other witnesses or introduce extrinsic evidence (such as the video recording), to refute Dr. Katz’s answers.

Although such inquiry may be prejudicial to defendant, the Court notes that if it weren’t, it would be of no use to the plaintiff. The question is not whether such inquiry is prejudicial, but whether it is unfairly or unduly so. The Court determines that it is not. Where, as here, the inquiry has a factual basis, and bears on the question of the witness’s credibility, it is fairly and properly allowed. See Castillo v. 62-25 30th Avenue Realty, LLC, 74 AD3d 1116 (allowing defense counsel to question plaintiff’s treating physician regarding underlying factual allegations that led to suspension of his license to practice medicine); Spanier v. New York City Tr. Auth., 222 AD2d 219 (allowing defense counsel to question plaintiff’s treating physician about prior allegations of improper billing).

The Court thus finds no basis to bar the cross-examination of Dr. Katz regarding the proceedings in the Bermejo Action. The nature and extent of such cross-examination is left to the discretion of the trial judge. See Badr v. Hogan, 75 NY2d at 634.

* While I originally wrote the suit was for $40 million, that should have been $40 million for each of five different causes of action for an aggregate claim of $200 million.

Elsewhere on the suit:

Simple Justice (Scott Greenfield):

This has nothing to do with the fact that Justice Hart found Katz to be a liar, of course, but it’s all that Turk’s fault because he posts “provocative and/or scandalous material.”

Legal Satyricon (Marc Randazza):

If Dr. Katz dared to file suit in Nevada, California, Oregon, or a growing number of other states with meaningful anti-SLAPP statutes, his litigation campaign would likely end post haste. It would be thrown out of court, and the judge would bruise his ego in the shape of the defendants’ attorneys fees and costs. But this is not California, or even Nevada – it is New York. Without meaningful relief, we are left only with the disinfectant of cleansing light shone upon those who file such censorious lawsuits.

 

April 15th, 2014

Passover and the Boston Marathon Bombing

Exterior, Kings County Supreme Court (Brooklyn) — Photo credit, me.

Once again, a confluence of two seemingly unrelated events. On the one hand, today is the first day of Passover. On the other, it is the one year anniversary of the Boston Marathon bombing.

Passover celebrates breaking away from tyranny and bondage and the establishment of freedom and the rule of law. While celebrated by Jews, we recognize its universal symbolism. So too do others, as we see the Ten Commandments displayed in courthouses around the country as an example of one of the first descriptions of written law.

The bombing, by contrast, represents both anarchy and totalitarianism. Anarchy from the acts of violence themselves, and (to the extent news stories are accurate that this was an act of militant Islamism) the use of that anarchy to promote theocracies where religion reigns supreme and freedom is restricted.

I have a place in my heart for the Boston Marathon, having been privileged to run it in 2009 and again in 2012. This year it is run with a still-fresh wound, despite the brave faces many victims wear.

But this will not be the first time a marathon is run in the wake of a terror attack.

In 2001 the NYC Marathon was run just two months after the World Trade Center fell, and the fires were still burning. As we crested the Verazzano Bridge at the one mile mark of the race’s dramatic start, you could see the hole in the downtown skyline.

There were some that didn’t show up to run that year, concerned over reports in the week before the race that a bridge was the next suspected target. Rumors and fear ruled the day.

But 25,000 did show up. And the streets were teeming with people that day for a massive public event for which adequate protection could not be assured. And the reason for the lack of protection was simple, if you want to live in a free society, you can’t “protect” 26 miles of roadway through the streets of New York.

We knew that back then. People with guns or backpacks with bombs could emerge from the crowd of 2 million at any time. Runners and spectators alike had bulls eyes on their chests. But it was important to be there and to celebrate New York and to say that we would not live our lives in fear. Cowering was not an option.

BostonStrongAnd it will be important again next Monday when the 118th Boston Marathon is run. The crowds will be thick and the runners stoked, with each participant — runners, volunteers and spectator alike — tossing caution to the wind to be there. They know that others will be watching them on this great stage.

The police will try to protect parts of the race course, of course, as they do in New York and all major sporting events. But the reality is that the security is a thin veneer. There is always a way in a free society to wage an attack.

Freedom is like that. It is hard to gain, as recent events show in the Middle East and now Ukraine. In biblical times it took us 40 years of wandering in the desert to get there.

It’s easy to become complacent about freedom and to take it for granted when there is no challenge to it.

But when the challenges to freedom come — and terror attacks are certainly such challenges — it feels good to see people willing to put themselves out there to celebrate it, and thereby protect it. Spectators will, quite literally, be manning the barricades.

Cowering is not an option. #BostonStrong

 

April 9th, 2014

A $9 Billion Punitive Damages Verdict in Actos Drug Trial (How much is too much?)

punishmentWe once again see a whopping punitive damages verdict and need to discuss: Just how much is too much? For the reasons that follow, I think that a ratio of punitive:compensatory damages of 100:1 or greater are sustainable based on current opinions from the Supreme Court.

At issue for the moment is a $9 Billion punitive damage award against Japan’s Takeda Pharmaceutical and Eli Lilly this week. The case concerned the diabetes drug Actos, and the manufacturer’s failure to warn that it increases the chances of bladder cancer. There was also a $1.5M compensatory damage award.

The punitive award spanking was no doubt influenced by the defendants’ destruction of documents. Juries tend to hate it when people destroy important documents.

It isn’t my objective to analyze the details of the trial, which I did not follow, only to go back and try to forecast what the judge might do with the punitive damage award, and more importantly, what the appellate judges will do if the matter doesn’t settle.

But there really isn’t a straight answer. In the most significant Supreme Court ruling on the subject, State Farm v. Campbell, the majority opinion by Justice Kennedy gave three conflicting statements on the subject. He cited first, for instance, to the older case of BMW v. Gore, that:

[W]e concluded that an award of more than four times the amount of compensatory damages might be close to the line of constitutional impropriety.

For reference, BMW v.Gore dealt with punitive damages against a car dealer that repainted a new car that had been damaged, but had failed to disclose it. The verdict was $4,000 in compensatory damages. But the jury also awarded $4,000,000 in punitive damages as it was the policy of BMW to do this.

For this purely commercial transaction, the Supreme Court felt that due process was not served by such a large award, as the defendant didn’t have notice of this potentiality. And with that, the court established three guideposts to determine if a punitive award was constitutional or not:

  1. The degree of reprehensibility of the conduct;
  2. The ratio between punitive award and plaintiff’s actual harm, and
  3. The legislative sanctions provided for comparable misconduct.

Now lets return to the court’s State Farm decision, because, as I noted before, there were three seemingly contradictory statements. Having first quoted the 4x amount as being reasonable, Justice Kennedy then went on to write:

[F]ew awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process.

So now Kennedy is at at a 9:1 ratio. But just as Gore was a commercial transaction, so too was State Farm v. Campbell. In that case Campbell caused a terrible auto collision, and State Farm acted in bad faith in defending its insured. At issue was not the personal injuries of the victims, but the contract between State Farm and Campbell.

Perhaps, since a physical injury was not truly at stake in State Farm, or perhaps just to cobble together a majority, Justice Kennedy then went on to make a third comment on the permissible extent of a punitive damage award, knocking out both the 4x and 9x ratios he had previously described:

Nonetheless, because there are no rigid benchmarks that a punitive damages award may not surpass, ratios greater than those we have previously upheld may comport with due process where “a particularly egregious act has resulted in only a small amount of economic damages.”

Following State Farm, it had become accepted wisdom among many that the Supreme Court would only allow a single digit multiplier, notwithstanding that last quote, or perhaps a bigger multiplier in only the smallest of cases.

But I never believed that the “single-digit ratio” was  a real line in the sand. One reason is that the Supremes eventually let stand a 97:1 ratio in Philip Morris v. Williams, a cigarette case with an $821,000 compensatory award and a 97.5M punitive award that went up to the Supreme Court on multiple occasions.

Now some would argue that letting something stand without deciding the issue (SCOTUS granted cert on the case’s third and final trip to the high court and then later dismissed it as improvidently taken) is not the same as affirming a lower court decision.

But here is something else: That 9:1 ratio nonsense from State Farm is confirmed as nonsense by looking at the conduct of  two members of the 6-3 State Farm “single-digit” majority. First, a review of the oral argument the second time Philip Morris v. Williams came before SCOTUS  (p. 30, line 5) finds this statement by Justice Breyer:

…the more severely awful the conduct, the higher the ratio between the damage award and the injury suffered by this victim in court. And if it’s really bad, you’re going to maybe have a hundred times this compensation instead of only ten times or five times. So — we take it into account, the extent of the harm that could be suffered, in deciding what that ratio should be. That means it goes to the evilness of the conduct.

So Justice Breyer seems not to think too much of that 9x single-digit formulation.

And then there is Justice Stevens, also in the 6-3 State Farm majority. When SCOTUS sent Philip Morris back to Oregon for a redetermination of punitive damages based on jury instructions, Justice Stevens dissented. He was also OK letting that 97:1 ratio stand.

Since both Stevens and Breyer were part of the 6-3 State Farm majority, it is clear that there was most definitely not a majority of justices willing to stick to single digit multipliers for a personal injury case.

So what will happen in the Actos litigation? I think that a punitive damage award of 100x or greater is in the cards if the plaintiffs satisfy the court that the conduct was reprehensible (the second guidepost in the BMW v. Gore). And I also think, given the significant document destruction that led to that whopper of an award, that satisfying that element won’t be too difficult.

Assuming that the $1.5M in compensatory damages aren’t touched, I think that ultimately a punitive award of $150M+ is sustainable under current law.

Allen v. Takeda Pharmaceuticals North America Inc., 12-cv-00064.

 

April 8th, 2014

New York Central Mutual Slammed in Bad Faith (And What it means for you)

Helene Blank

Helene Blank

Her name is Helene Blank and she last appeared on this page ripping into the City’s Corporation Counsel for his incredible hypocrisy in calling our courts inefficient.

She isn’t just a top trial lawyer here in New York, and a frequent lecturer to others. No, she is also something else. She’s pissed. Again.

And she’s got a damn good reason…so without further ado, Helene Blank as guest blogger…

——–

It’s a tale of corporate greed, in all its ugly manifestations, which starts with grave human suffering. And thanks to a federal court decision last week, we share it today in all that ugliness.

We turn the clock back to November 11, 2000, in the Town of Ulysses, New York, when Peggy Horton, a married mother of three and licensed registered practical nurse, was struck by Ralph Wade when he failed to yield at a stop sign.

No one disputes that Wade caused the collision (not an accident). What he did was unfortunate. But what his insurance companies did next to the two of them for almost a decade – and what they almost got away with and could get away with today — is inconceivable. Yet it continues to happen all the time.

Horton underwent six separate surgeries to correct the damage done to her back — starting with a fusion of two spinal levels and progressing to the insertion of hardware due to instability, incisional hernias, hardware removal and additional fusion.

She never returned to work as a nurse. She suffered from depression and post traumatic stress. Even the doctors hired by the insurance company agreed, finding that she suffered from what is known as failed back syndrome and that she would have nothing but a life of pain to look forward to.

Eleven months after the collision, Horton sued Wade.

Wade was insured by New York Central Mutual for $500,000.00. In addition, he had an umbrella policy with his homeowners insurance, Quincy Mutual, for another million. This is where the ugliness comes in.

Despite the fact that both insurers were immediately notified of this lawsuit, the primary insurer (New York Central Mutual) withheld the existence of the excess million for years. Horton, unaware of the extra million, had agreed to accept the 500K in settlement, perhaps recognizing that a personal judgment against Wade would be useless, under the well-known legal theory that you can’t get blood from a stone.

For her massive injuries and inability to work, New York Central offered the piddling sum of $75K.

The irony is that if it hadn’t been for its greed in refusing to offer the primary $500K when it had multiple opportunities, New York Central would have gotten away with hiding the existence of the excess policy. Instead, because of its greed, New York Central not only has to pay its primary policy of $500K, but also has to pay the excess million excess held by Qunicy (plus interest).

The long, sad and shocking  story only came to light when the excess/umbrella carrier brought a law suit in bad faith, against New York Central Mutual in the Northern District of New York. The suit was based on New York Central’s apparent failure to cheat this plaintiff in a timely fashion and settle quickly before the excess was revealed, resulting in it being on the hook for the late-revealed excess million.  See: Qunicy Mututal v.New York Central Mutual

Quincy Mutual showed that, at multiple times, the plaintiff had agreed to accept the $500K in final settlement of her action because at that time, despite being legally entitled to the knowledge of all available insurance — that knowledge was withheld from her lawyers. New York Central fouled up yet again, apparently, as after the excess million was finally revealed, she still gave them a short time to meet the 500K demand.

But this isn’t about the good faith of a plaintiff keeping the settlement door open. It’s about the greed of the insurance company. Perhaps the insurance carrier thought that, if the litigation was delayed long enough and Horton suffered more due to her inability to work, it could strike a better deal.

U.S. Magistrate Judge David Peebles found New York Central had acted in “gross disregard” of the excess carrier’s interest when it stuck to its $75K settlement offer and lost opportunities to settle with Horton.

The real outrage for all consumers is that you could not open up a settlement, which is induced by the insurance company, if you learned later that there was in fact more coverage.

Wade — the negligent driver that started it all —  was put to the expense and worry for years that his personal assets might be in jeopardy because all the experts agreed that Horton’s losses well exceeded his available coverage. He was forced to hire private counsel to protect him because his insurance companies were not keeping their part of the contracts that he had bought and paid for.

Both the plaintiff and the defendant lost here. But the insurance companies did not. They kept their money for years longer than they ever should have been allowed to, dragging the parties through the court system for almost a decade before they resolved this matter.

New York Central Mutual continued to use the money without a care towards their statutory obligation to negotiate in good faith to protect their insured.

So it’s time that victims like Peggy Horton get the right from Albany to open up a settlement if you learn after you accept what you were mislead into believing was all the available insurance when in fact it wasn’t.

This unbridled corporate greed has to end. Insurance companies should not be allowed to cause additional harm to injured victims, to their insureds, and needlessly keep un-winnable litigation going for years and years without any recourse by the people they harm.

We all lose when this happens – our courts’ limited resources are clogged up with cases that should be resolved, victims who can’t work, who need the money to live are kept waiting forever and dragged through the system for no reason, and the people who paid their hard earned money to protect themselves with insurance are entitled to have the contract they paid for honored.

 

 

April 1st, 2014

Ribbeck Law Bench Slapped Over Malaysian Aircraft Disappearance; Threatened with Sanctions

RibbeckLawFirm-714660Chicago based Ribbeck Law was sharply bench slapped yesterday and threatened with sanctions by Cook County Judge Kathy Flanagan over the motion it filed regarding missing Malaysian Airlines Flight 370. The motion had allegedly been made to identify parties to a potential lawsuit that it intends to file in the United States.

Noting that similar Ribbeck motions had been rejected previously regarding air crashes in San Francisco and Laos, Judge Flanagan was not kind to Ribbeck. Via the Chicago Tribune:

“Despite these orders, the same law firm has proceeded, yet again, with the filing of the (Malaysia crash) petition, knowing full well there is no basis to do so,” Flanagan wrote.

The judge said she “will impose sanctions” if Ribbeck Law continues to make such filings.

While the firm claims it “expects” to represent half the victims, this seems (to me) to mere huckstering and puffery to obtain clients. The basis of my opinion? Repeat conduct.

We start with this, from the Tribune, regarding the missing Malaysian plane:

The first petition, filed March 25, named as a plaintiff Januari Siregar, who was described as the father of missing passenger Firman Chandra Siregar, 24.

But the plaintiff has turned out to be an uncle at odds with the rest of the family, and a spokesman for Siregar’s real father told the Tribune in an email Monday that he had not authorized Ribbeck Law to take legal action in Chicago.

From there we turn to the fact that the firm has put out press releases regarding its filing. Why put out press releases? As a way of trying to get a message to other victims that says, “Hey! We’re already handling this case, why not come to us?”

And from there we roll back further to last year when the National Transportation Safety Board reported the Ribbeck firm, in connection with the crash landing of Asiana Flight 214 in San Francisco, to the agency that regulates attorneys for further investigation of its online communications and in-person meetings with passengers. This was, presumably, referring to its disciplinary commission.

According to this Associated Press articleRibbeck was the only firm that warranted such referral (as of the time it was written). The referral came because because the NTSB “received an unspecified number of complaints about solicitations since the July 6 accident that killed three Chinese teenage girls and injured 180.”

I have also used this blog to present evidence of Ribbeck violating both a federal 45-day anti-solicitation law for aviation crashes as well as New York’s 30-day anti-solicitation rule for personal injury matters. The firm, for example, set up a website  and ran Google ads for the purpose of soliciting victims from the crash of Continental Airlines 3407 in Buffalo in February 2009. The contact person was attorney Monica Kelly. Other firms had also erred by doing this, as I noted in a February 16, 2009, posting.

A week later I followed up, and it wasn’t pretty for the firm. All the other firms had yanked down their ads, having been caught doing what they shouldn’t. Did Ribbeck? See: Ribbeck Firm of Chicago Still Soliciting Buffalo Plane Crash Victims?

And there is much more. From the Chicago Tribune two days ago:

In a recent commission action that is public, however, Kelly was recommended for censure last month for allegedly continuing to try to represent a survivor of a 2009 Turkish Airlines crash in the Netherlands that killed nine passengers and crew. The survivor had sent a letter terminating the relationship, records show. Kelly has appealed the decision.

According to commission records, Kelly also was accused of improperly soliciting that victim, who walked away from the crash but later learned he’d suffered a broken back and other injuries. The man testified that four people came to his home in 2009 as he was recuperating in bed, set up a projector and pitched him on Ribbeck’s prowess as an aviation litigator, according to the records. In its written ruling, the panel said there was not enough evidence to sustain those charges.

In 2008, Kelly’s brother and partner in the firm, Manuel von Ribbeck, was cited while working for another firm he allegedly posed as a Red Cross worker when he approached a man who’d lost his wife and daughter in a plane crash in the Bahamas.

The man alleged von Ribbeck invited him to a nearby hotel, where a projector had been set up and literature about the firm he was working for was passed out. The man told his lawyer, John Ruiz of Miami, who later filed a complaint with the disciplinary commission.

James Healy-Pratt, from London-based StewartsLaw, which is also dealing with these issues, gave me his thoughts on yesterday’s order threatening Ribbeck, given the fact that the airliner is still missing and that such lawsuits are often kicked out of US courts. He said he was:

surprised and confused with the premature legal activity in Chicago State Court. This was especially so, given that the airliner is still missing to this day, and the public fact that some 10 years of US Federal Court decisions have kicked out real lawsuits, on forum non conveniens motions, in foreign air disaster cases just like MH370. What was not surprising was the swift, decisive, and no-nonsense response of the Chicago State Court in dismissing the baseless lawyering, and promising sanctions for any repeat performances. This was an unwelcome and insensitive distraction for many of the families of MH370 at a very difficult time.

Other aviation lawyers are also outraged.  From this Reuters article:

Several U.S. aviation lawyers and experts called the Ribbeck filing premature and a publicity stunt, since the details of the plane’s disappearance were still largely unknown.

Justin Green, a lawyer with competitor aviation law firm Kreindler & Kreindler, said the filing was “nothing short of outrageous.”

“Without plane wreckage, victims’ bodies and any substantial evidence of cause or potential motive, there is simply no way to determine liability at this point in the investigation, and any legal counsel should recognize that,” he said in a statement on Monday.

And Robert Clifford, who also litigates aviation disasters, had last week predicted Ribbeck’s motion in the missing Malaysia case would be tossed out of court. He told Inside Counsel the filing was “grossly premature and without foundation.” He also described it as a “publicity stunt.”

There is a big downside to putting out press releases, filing frivolous motions to garner press attention and using the web to solicit clients in violation of federal and state rules. And that downside is that it may pique the interest of others who have strong opinions on ethics.  It isn’t only victims and their families that are watching.