The Jere Beasley Report, Jan. 2014

Distributed to over 40,000 subscribers each month

www.BeasleyAllen.com

Vol. 1 No. 2 January 2014

2 www.BeasleyAllen.com

I. CAPITOL OBSERVATIONS

OklahOma Verdict Was a Game chanGer

Lawyers in our firm have been heavily involved in the ongoing litigation against Toyota Motor Corp. This litigation involves claims caused by sudden unintended accelera-tion in the auto maker’s vehicles. Beasley Allen lawyers are involved in both the “Economic Loss / Consumer Fraud” litigation, as well as the “Personal injury / Wrongful death product liability” claims against the Japanese car man-ufacturer. As you may remember, Toyota recalled more than 8 million vehicles world-wide in 2009 and 2010 after reports that sudden unintended acceleration incidents caused crashes with resulting serious injury and death.

Last December, Toyota Motor Corporation announced a $1.1 billion class settlement of the sudden unintended acceleration economic loss class action cases, known as the “EL Cases.” Dee Miles from Beasley Allen was in on the ground floor of that effort to explore the settlement possibilities concerning the EL class cases.

Dee immediately involved the leadership of the Toyota MDL, which had been appointed by Judge James V. Selna in 2010. Steve Berman, Marc Seltzer, Frank M. Pitre, Elizabeth J. Cabraser and Mark P. Robinson, Jr., a l l appointed to the PSC by Judge Selna, were on that team. Several meetings with Toyota’s lawyers led to one of this nation’s largest auto-motive consumer settlements ever reached.

Although the economic class cases were settled, the roughly 450 individual personal injury and wrongful death product liability cases remained unresolved. Toyota’s approach had been not to settle those cases and to make the lawyers handling the cases go to trial. Toyota wanted to see how jurors would respond when the cases went to trial.

Fast forward to October 2013, when Cole Portis, Graham Esdale, Ben Baker and I arrived in Oklahoma City, Okla., to represent Jean Bookout and the family of Barbara Schwarz in a lawsuit against Toyota. We had alleged in that case that Toyota designed and manufac-tured automobiles with defective Electronic Throttle Control Systems. We were convinced that this defect had caused the death of Barbara Schwarz and serious lifetime injuries to Jean Bookout. We tr ied that case for three weeks.

The Oklahoma jury agreed with us and returned a multi-million dollar compensatory

award against Toyota Motor Corporation, finding the company guilty of “reckless indif-ference to human life.” The case was then to proceed to the punitive damages phase the next day. But before the jury could even hear the punitive damage evidence against Toyota Motor Corporation, we were contacted by Toyota and were able to quickly reach a confi-dential settlement on the punitive damages aspect and the case was then resolved in its entirety with the total amount of the settle-ment being confidential at Toyota’s request.

The Bookout/Schwarz jury verdict in Okla-homa was a landmark and monumental verdict in the Toyota sudden unintended acceleration Litigation. We were able to obtain for our clients the first and only jury verdict where Toyota’s throttle system in their vehi-cles was the sole issue and the jury found it to be defective. In fact, the jurors found that Toyota had been guilty of “reckless conduct” that put customers at risk of injury or death.

Within days of the Bookout/Schwarz verdict, Dee Miles received another phone call from Toyota’s settlement team. This time it concerned the possibility of a global settle-ment that would resolve all of the personal injury and wrongful death product liability cases. Dee, along with Elizabeth Cabraser and Todd Walburg of the Lieff Cabraser law firm, representing the Plaintiffs, began negotiations with Toyota’s settlement team, which was led by John Hooper of Reed Smith. The goal was to build a settlement structure that would resolve al l the Toyota sudden accelera-tion cases.

The settlement structure has now been approved by Judge Selna in the federal MDL (Multidistrict Litigation) and by Judge Lee Smalley Edmon in the California JCCP ( Judi-cial Counsel Coordination Proceedings, Cali-forn ia’s State vers ion of Mu lt id i st r ic t Litigation). Both judges have entered orders requiring the settlement process to begin. All of the pending cases that had been set for trial were stayed. All parties will have to follow the process mandated by the Courts before any case will be allowed to go to trial. The initial response to the settlement process has been very good, both by the Plaintiffs’ lawyers, both in the federal MDL and in the California JCCP, and by Toyota.

While the settlement process will take time, each individual Plaintiff will have an opportunity to have his or her case “front and center” for an unbiased evaluation, with a full consideration of all facts and settlement factors, and with an opportunity for a satisfac-tory settlement. Lawyers from Beasley Allen have been in the forefront of the Toyota litiga-tion from the inception. The following is a brief timeline of our firm’s involvement:

IN THIS ISSUE

I. Capitol Observations . . . . . . . . . . . . . . . 2

II. A Report On The Gulf Coast Disaster . . . 4

III. Legislative Happenings. . . . . . . . . . . . . . 6

Iv. Court Watch . . . . . . . . . . . . . . . . . . . . . . 7

v. The National Scene . . . . . . . . . . . . . . . . 9

vI. The Corporate World . . . . . . . . . . . . . . 10

vII. Congressional Update . . . . . . . . . . . . . 11

vIII. Product Liability Update . . . . . . . . . . . 11

Ix. Mass Torts Update . . . . . . . . . . . . . . . . 12

x. An Update On Securities Litigation . . . . 16

xI. Insurance and Finance Update . . . . . . 17

xII. Employment and FLSA Litigation . . . . . 18

xIII. Premises Liability Update . . . . . . . . . . . 18

xIv. Workplace Hazards . . . . . . . . . . . . . . . 19

xv. Transportation . . . . . . . . . . . . . . . . . . . 20

xvI. Healthcare Issues . . . . . . . . . . . . . . . . 23

xvII. Environmental Concerns . . . . . . . . . . . 24

xvIII. An Update On Arbitration . . . . . . . . . . 25

xIx. The Consumer Corner . . . . . . . . . . . . . 26

xx. Recalls Update . . . . . . . . . . . . . . . . . . . 30

xxI. Firm Activities . . . . . . . . . . . . . . . . . . . 35

xxII. Special Recognitions . . . . . . . . . . . . . . 36

xxIII. Favorite Bible verses . . . . . . . . . . . . . . 37

xxIv. Closing Observations . . . . . . . . . . . . . . 38

xxv. Parting Words . . . . . . . . . . . . . . . . . . . 39

The Jere Beasley Report is published monthly by Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., 218 Commerce Street, Montgomer y, Alabama. Address all correspondence to editorial and business offices, 218 Commerce Street, Montgomery, AL 36103-4160. Periodical postage paid at Montgomery, Alabama and additional mailing offices.

POSTMASTER—Send address change to Post Office Box 4160, Montgomery, AL 36103-4160.

( P e r i o d i c a l s P o s t a g e P e n d i n g a t Montgomery, Alabama.)

www.JereBeasleyReport.com 3

• Several national class actions were filed against Toyota for SUA;

• Dee Miles received a leadership appoint-ment in the federal MDL by Judge Selna, is appoi nted to t he L i a i son Cou n se l Committee;

• Time and money were invested in develop-ing the critical evidence against Toyota that would be used in all cases tried throughout the nation;

• Individual wrongful death and product lia-bility cases were filed by the firm against Toyota in various states;

• The firm played a key role in the negotia-tion of the $1.1 billion settlement with Toyota for the EL class action cases;

• Beasley Allen tried the first and only case against Toyota involving the defective Toyota throttle system in Toyota vehicles, with a multi-million dollar jury verdict in Oklahoma City being returned by the jury;

• One of the first settlements in an individual case was achieved before punitive damages were to be awarded against Toyota Motor Corporation;

• Dee Miles served as one of the key archi-tects for the final phase of the litigation, including the potential settlement of some 450 personal injury / wrongful death product liability cases as a result of the set-tlement structure approved by the judges in both the federal MDL Court in California, as well as in the state MDL Court in California;

• The Oklahoma jury verdict was the single factor that caused Toyota to change its liti-gation strategy and decide to reach a global settlement of all cases.

Hopefully, each of the remaining cases will be settled, and I am reasonably confident that will happen. I don’t believe Toyota can run the risk of taking any more of these cases to trial. Our clients in the Oklahoma case—Jean Bookout and the Schwarz family—are due the credit for trying and winning the case that brought about the proposed global settlement. Their courage and dedication will not only help other victims, but it will help change the entire safety culture at Toyota.

appleseed has a messaGe FOr all OF Us

As the past year was winding down, I received a message from the group Appleseed that got my attention. It was a very simple message, one that was inspired by essays the group had received from young people in an

essay-writing contest titled “This I believe.” As a result of all they received, the folks at Apple-seed then came up with a simple message for each of us. It’s a New Year’s message that we can all adopt as our own. I believe you will agree that if all persons in the United States adopted Appleseed’s message, which is set out below, and then followed it, our country would benefit, prosper and be a better place for all of us.

• We believe that all people should be treated with fairness and justice.

• We believe that we must provide genuine opportunity for all.

• We believe that our research, our persua-sive power, and our claims to justice improve society.

• We believe that we can change our commu-nities, our companies, our country and the world for the better.

Appleseed is a nonprofit network of public interest centers and professionals dedicated to building a just society through legal, legisla-tive and market-based structural reform.

let the peOple VOte

In the past several years there has been an organized effort to deprive Americans of their right to vote. This effort has included making it hard to register and also making it hard to vote. Since the heart of the Voting Rights Act was dismantled in June, those efforts have intensified. The Voting Rights Act included strong federal oversight of elections in states and cities with a history of disenfranchising black voters. It has long been considered the most successful civil rights law ever passed. But the Supreme Court ruling in Shelby County v. Holder struck down Section 4 of the Act, which set out a formula to determine which states must receive clearance from the Justice Department before enacting changes to their voting procedures. These restrictions, requiring pre-clearance, were removed.

Less than 48 hours after the Supreme Court ruling, Texas Attorney General Greg Abbott issued a statement that redistricting maps approved by the legislature may take effect without approval from the federal govern-ment. He also said the state’s voter ID law will take effect “immediately.” Five other states—Alabama, Arkansas, Mississippi, South Caro-l ina and Virginia—announced plans to immediately move ahead with voter ID laws. There are now at least 34 states that have adopted voter ID laws.

In August, North Carolina’s legislature passed what election-law experts called “the

most draconian and restrictive registration and voting law in the country.” It includes not just photo ID requirements for voting, but also el iminates same-day voter registration, requires voters to register or update their address at least 25 days prior to the election, reduces the early voting period by a week, abolishes a program to register high-school students to vote just ahead of their 18th birth-days, eliminates out-of-precinct voting and gives partisan poll workers more authority to chal lenge voters. It also el iminates the requirement for pol it ical candidates to endorse their own television ads.

Republicans have pushed for voter ID and related laws, claiming they are necessary to help prevent voter fraud. But detractors of these laws, including many Democrats, say the real intent of voter ID laws is to suppress voting, particularly among groups that have traditionally supported Democrats, such as African-American and Latino voters. Addition-ally, voter ID laws make it more difficult for the elderly, young, poor and disabled persons to vote.

Folks who live in areas where most people have a driver’s license often have a hard time understanding the problem with voter ID laws. But photo ID laws single out younger people like college students, urban residents, the poor and the elderly. For example, a person who doesn’t have a car most likely won’t have a driver’s license. For many of these people, the process of trying to obtain a valid photo ID can also be expensive, time-consuming and physically challenging, dis-couraging them from trying, and thereby discouraging them from voting.

Voter ID laws are particularly challenging for many elderly people, who may not be able to obtain “proper” birth certificates. They may have been born at home, instead of in a hospi-tal, and were never issued a birth certificate. For children of immigrants, ethnic names resulted in frequent errors on birth certifi-cates. In Pennsylvania, which has a voter ID law as well as one of the highest percentages of elderly residents in the United States, such complaints led the state to dispense with the need for birth certificates to obtain non-driver photo IDs.

In Texas, which was among the first to jump on the Voter ID bandwagon following the Supreme Court ruling on the Voting Rights Act, a November election exposed the flaws with such laws. Voters turned up at the polls with their IDs, and records did not match up. It turned out that some people use nicknames, and women often change their names. Texans with what a writer for The Economist dubbed “accidental aliases” were required to sign affi-davits swearing they were who they said they were. Among those who had to sign an affida-vit was none other than Texas Attorney


General Gregory Wayne Abbot, who goes by “Greg.”

Problems with Voter ID laws and other restr ictive voting regulations since the Supreme Court decision have prompted the Justice Department and Attorney General Eric Holder to file legal challenges against some of the practices, using remaining sections of the Voting Rights Act. The Attorney General says the DOJ will still intervene in cases where it sees or suspects civil- and voting-rights abuses.

The right to vote is a fundamental right, giving we the people the ability to hire and fire the leaders of our communities, states and nation. These elected officials are supposed to represent the people and be responsible to their needs. The ballot box gives us the ability to send a message to leaders who promote their own agenda ahead of the public agenda. We should have the right to vote in an effort to replace an elected official who ignores the public. Poll taxes, literacy requirements, voter ID laws are tactics that have been used to restrict voting rights, particularly among certain populations. This is exactly the oppo-site of what we in this country should be trying to do and that’s to expand access to voting to every American Citizen. We should encourage every person to vote and never should we allow that right to be taken away. Neither should we allow any political party to make it unduly hard to vote in any given election.

Sources: ACLU.org, The Atlantic, Voting Rights Institute, The Economist, News & Observer, Christian Science Monitor

II. A REPORT ON THE GULF COAST DISASTER

FOrmer Bp enGineer cOnVicted OF OBstrUctinG Oil spill prOBe

A former BP drilling engineer, Kurt Mix, was convicted on December 18 of one charge that he deleted text messages from his cell phone to obstruct a federal investigation of the company’s massive 2010 oil spill in the Gulf of Mexico. Mix was acquitted by the federal jury of a second charge. The count of obstruction of justice carries a maximum sen-tence of 20 years in prison and a $250,000 fine. Mix made bond and was released. His sentencing is scheduled for March 26.

Prosecutors argued that Mix, a Texas resi-dent, was trying to destroy evidence when he deleted hundreds of text messages to and from

a supervisor and a BP contractor. Mix was accused of deleting two voicemails from the same two people. Mix, who didn’t testify at his two-week trial, was one of four current or former BP employees charged with crimes related to the spill. His case was the first to be tried. Mix was on a team of experts who worked on BP’s unsuccessful attempt to stop the gusher using a technique called “top kill.” He had access to internal data about how m u c h o i l w a s f l o w i n g f r o m t h e blown-out well.

On May 26, 2010, the day that top kill began, Mix estimated in a text to a supervisor that more than 630,000 gallons of oil per day were spilling—three times BP’s public esti-mate of 210,000 gallons daily—and a rate far greater than what top kill could handle. That text was in a string of messages that Mix exchanged with his supervisor, Jonathan Sprague, before deleting it in October 2010. Investigators couldn’t recover 17 of the mes-sages in the string. In August 2011, Mix also deleted a string of text messages that he exchanged with BP contractor Wilson Arabie. Several weeks earlier, federal authorities issued a subpoena to BP for copies of Mix’s correspondence. The same count that charges Mix with intentionally deleting those mes-sages also says Mix deleted a voicemail from Arabie and a voicemail from Sprague.

Source: Associated Press

stUdy links Bp Oil spill tO dOlphin deaths

U.S. government scientists have connected the BP oil disaster to dolphin deaths in the Gulf of Mexico. The study for the first time found direct evidence of toxic exposure. The study, led by scientists from the National Oceanic and Atmospheric Administration (NOAA), found lung disease, hormonal abnor-malities and other health effects among dol-phins in an area heavily oiled during the BP spill. The diseases found in the dolphins at Barataria Bay in Louisiana—though rare—were consistent with exposure to oil, the sci-entists said. The study said:

Many disease conditions observed in Barataria Bay dolphins are uncommon but consistent with petroleum hydro-carbon exposure and toxicity.

Half of the dolphins were given a guarded prognosis. Sadly, 17 percent of the dolphins were expected to die of the disease, the researchers found. Lori Schwake, the study’s lead author, in a statement, said:

I’ve never seen such a high prevalence of very s ick animal s—and with

unusual conditions such as the adrenal hormone abnormalities.

The scientists caught, examined and released about 30 bottlenose dolphins from Barataria Bay in 2011, one year after the disas-ter. The area was one of the most heavily oiled areas following the April 2010 blowout of BP’s deepwater well. Government scientists and conservation groups had been concerned from the outset about the effects on marine life of the vast amounts of oil that entered the water. But this study, published in the peer-reviewed journal Environmental Science and Technology, produced the strongest evidence to date of the effects of the spill on marine life. The study said:

The severe disease documented by this study and the continued elevation of mortalities raise significant concerns regarding both short-term and long-term impacts on the Barataria Bay dolphin population.

Jacqueline Savitz, senior campaign director of the Oceana conservation group, said the findings confirmed her fears at the time that the oil spill would take a high toll on dolphins, whales and other marine life in the Gulf. Mrs. Savitz observed:

After the spill I saw dolphins swimming in and out of oil slicks, breathing air at the surface that I knew contained hydrocarbons from the spill since I could smell them myself. The dolphins were likely exposed to the oil in other ways as well, by swallowing water, and through their food. While we have seen an unusual number of dolphin deaths during and after the spill, this report verifies that the oil took a larger toll on dolphins.

Few of the symptoms in the Barataria Bay dolphins were reported among wild dolphin populations in Sarasota Bay, Fla., which was not oiled during the spill, the scientists said. BP has consistently disputed any connection between the oil spill and a mysterious spike in dolphin deaths in the Gulf of Mexico that was first reported three months before the oil spill. BP plays fast and loose with the truth and has very little credibility with any of the lawyers in our firm who have dealt with them.


JUdGe BarBier tO reVieW caUsatiOn parameters OF the ecOnOmic settlement

BP is now arguing that all businesses must meet a new (and undefined) subjective causa-tion test in order to present claims under the


Settlement Agreement. Under the Settlement Agreement, a business is eligible in the Settle-ment if it is a covered entity (as opposed to one of the excluded businesses in the Settle-ment), is located in a covered zone, and meets the appropriate revenue causation test. Need-less to say, BP’s new “causation” requirement for businesses was never intended in the Set-tlement Agreement, and completely contra-dicts BP’s own positions during settlement negotiations and before the Court.

As we reported last month, Judge Barbier issued an order amending and clarifying his previous Business Economic Loss order on causation and matching, and explained that BP’s new causation arguments were not prop-erly before the Court. In addition, Judge Barbi-er’s order was extremely critical of BP for its “deeply disturbing” actions and “startling” change of heart on how claimants must meet causation under the Business Economic Loss portion of the Settlement. BP, seeking to man-ufacture a new “causation” controversy, appealed Judge Barbier’s ruling to the Fifth Circuit. On December 2, the Fifth Circuit remanded the causation issue to Judge Barbier and instructed him to take another look at the issue to ensure that claims were actually being calculated properly. Afterward, Judge Barbi-er’s issued a new order temporarily suspend-ing the payment of claims until the causation issue is resolved.

While the Fifth Circuit’s recent remand and Judge Barbier’s present injunction have slowed things down, neither court has actu-ally altered the Settlement Agreement. The two courts are simply further analyzing the agreement to make sure the agreement is being interpreted properly. Since there are bil-lions of dollars at stake, considering that BP has not been secretive in its willingness to challenge the Settlement Agreement, which it clearly agreed to, the courts’ actions are not that surprising. It’s not unusual for the courts to carefully review the settlement agreement. As the truth comes out, we are optimistic that the settlement process will move forward with a decision on causation coming within a reasonable time.

We shOUld nOt Be sUrprised By hOW lOW Bp Will GO tO Get its Way

Maybe someone will write a book one day about how BP has attempted to completely manipulate the judicial process, the media and an entire region to get its way. All of this coming after the company had caused yet another landmark disaster, killed 11 people and committed numerous felonies along the way. Almost a year ago, Beasley Allen lawyers were present in court and watched BP stand

in front of Judge Barbier and strongly and with conviction support the Economic Settlement. The company praised the deal as fair—as one that provides true compensation—and as one that sought certainty over years and years of mini-trials and case-by-case evaluations. The company even admitted that “false positives” were inevitable in a settlement of this magnitude.

At the same time that BP’s lawyers stood before Judge Barbier, the company and its lawyers well knew that the claims administra-tor was processing claims pursuant to the objective causation principles BP had previ-ously agreed to. BP was even asked by the Claims Administrator whether the company had any objection to the way the causation process was working—namely was there any other causation test outside of the straightfor-ward revenue and zone requirements of the Settlement? In response, BP told him no. Judge Barbier asked the same question of BP weeks later, and again, BP agreed in open court that the revenue frameworks set out in Exhibit 4B of the Settlement Agreement were the only causation test. At press time, BP agreed that no subjective, case-by-case evaluations would be necessary to meet causation.

So what happened to bring about such a 180 then by BP? I believe it resulted from a combination of greed and arrogance. Appar-ently, the company does not want to pay sup-por ted cla ims anymore, much l ike the company operated after the first round of pay-ments in the Gulf Coast Claims Faci l ity (GCCF). BP’s greed and arrogance under-mined and destroyed the GCCF. Now the company is trying to destroy a settlement it carefully negotiated and agreed to—one that would have compensated thousands and ended years and years of litigation. Once it became obvious that BP would have to pay more than it had thought, and that the company would actually have to cede control of the program to a neutral administrator, a person the company could not control, all bets were off. Ironically, BP would much rather pour billions of dollars into advertising firms, experts, newspapers and law firms attacking the Settlement Program than it would to pay residents and businesses along the Gulf Coast for their losses.

We should not be surprised by how low BP will go to get its way. There is one thing for sure—and that is, the company has declared war on anyone and anything that could remotely support the Settlement. At the end of the day, the company made a deal with the region we all call home, publicly endorsed that deal, and now they are trying to buy and intimidate their way out of it. While we should not be surprised, the system must hold them to their word. After all, without your word and credibility, what else do you truly have?

claimants shOUldn’t Be discOUraGed

We believe that the Economic Settlement is a tremendous settlement. While the latest developments may appear somewhat trou-bling, it’s important to remember that while the Fifth Circuit is giving BP an opportunity to be heard and its arguments explored, the Set-tlement Agreement hasn’t been changed. Neither court has agreed with BP. Instead, the courts are further analyzing and evaluating the Settlement in light of BP’s arguments. It’s understandable that some participants in the program feel frustration and concern over BP’s antics.

We now realize that the Settlement Program will likely take longer than anticipated to process claims. We also realize that BP will continue being BP. However, none of the par-ticipants in the Settlement Program should become discouraged about BP’s antics. The Program, when interpreted as intended, and as it currently sits, will work as agreed to by all of the parties. We are confident that we are on the right side of this argument, and remain optimistic that, once the courts analyze the full record, BP’s arguments will ultimately fall apart.

JUdGe BlOcks Bp inVestOrs FrOm sUinG as GrOUp FOr lOsses

A federal judge has ruled that BP Plc’s U.S. investors can’t pursue as a group claims that the company inflated its shares with mislead-ing statements before and after the Gulf of Mexico oil spill. U.S. District Judge Keith P. Ellison ruled, citing a recent Supreme Court decision. Shareholders sought permission to sue in two groups, the larger including all buyers of BP’s American depositary receipts from Nov. 8, 2007, to May 28, 2010. The second subgroup would cover about 900,000 individual investors, who purchased BP ADRs from March 4, 2009, to April 20, 2010, the date BP’s Macondo well blew out, triggering the biggest U.S. offshore oil spill. Judge Ellison denied the investors’ request for class status. E l l ison had earl ier set a tr ia l date for August 2014.

Judge Ellison ruled that the investors failed to show that their damages could be calcu-lated on a class-wide basis in a way that was consistent with their legal theory on BP’s cul-pability. If they could’ve done so, he said, he’d have been “inclined” to give the investors per-mission to sue as a class. Judge Ellison said in his ruling:

Because the court’s ruling is based in large part on a recent Supreme Court decision that—in this court’s opinion—has appreciably changed the landscape


for class certification. Investors should be given a second attempt to establish the elements necessary for class action treatment.

Judge Ellison gave lawyers for the investors 30 days to revise their motion and supplement it. He said he declined to certify the class based on the high court’s ruling in a case involving Comcast, in which investors weren’t allowed to sue as a group because the court found a disconnect between the investors’ class-wide damages model and the company’s liability.

The investors, led by New York and Ohio pension funds, sued London-based BP and certain of its officers in 2010, alleging viola-tions of U.S. securities laws. The investors also claimed BP publicly proclaimed a commit-ment to improving safety while cutting budgets and rejecting employee concerns. BP disputed the investors’ claims and opposed certifying them as a class. The investors said their ADRs:

were artificially inflated as a result of defen-dants’ dissemination of materially false and misleading statements and material omissions. All suffered losses when the truth surround-ing those misstatements and material omis-sions was revealed to the market and BP’s stock price declined.

BP shares fell about 40 percent in the weeks after the explosion. The shares haven’t fully recovered from the drop, which eliminated billions of dollars in market value. In March 2013, Judge Ellison refused to dismiss the bulk of the investors’ securities-fraud claims. He previously limited participation in the litiga-tion to investors who bought shares on U.S. stock exchanges.

Several U.S. pension funds sought to get around Judge Ellison’s March 13 ruling by suing under state securities laws. Judge Ellison, in his recent ruling, said that three of the funds, led by Alameda County Employees’ Retirement Association, can pursue deceit claims for losses on their ordinary shares under English law. BP agreed in 2012 to pay $525 million to settle a U.S. Securities and Exchange Commission cla im that the company underestimated the size of the spill.

BP also pleaded guilty to a felony count of obstruction of Congress related to its spill-size estimate. The plea was part of a $4 billion set-tlement of criminal charges brought by the U.S. against BP over the incident. The company also pleaded guilty to 11 felony counts related to the rig workers’ deaths and t wo m isdemeanor env i ron menta l - l aw violations.

Source: Insurance Journal

U.s. sUpreme cOUrt denies Bp’s reqUest tO reVieW mOratOriUm claims

The U.S. Supreme Court recently declined to hear an appeal from offshore service com-panies affected by a moratorium on deep sea drilling that the federal government imposed after the 2010 BP oil spill in the Gulf of Mexico. The issue the appeal sought to address was whether the government violated the judicial order that struck down its tempo-rary moratorium on deep water drilling after the oil spill.

A federal judge reversed the Inter ior Department’s decision to discontinue new permits for deep water projects and postpone drilling on 33 exploratory wells after the Deepwater Horizon rig explosion. Also, the agency issued an additional, almost identical suspension, prompting the judge to issue a civil contempt finding. However, a federal appellate court decided that while Interior officials took steps to avoid the injunction’s effects, officials did not technically violate it.

Source: The Associated Press

III. LEGISLATIVE HAPPENINGS

the 2014 reGUlar sessiOn

The regular session of the Alabama Legisla-ture, which will be the last regular session of the four-year term, starts up on Tuesday, January 14. There are many very serious prob-lems facing our state, many of which have been around for a long time, and each of them should be addressed during this session. The two political parties and other groups have been making plans for the session. Gov. Robert Bentley also wi l l have his own program for the legislators to consider. You can also rest assured that the highly paid lob-byists who represent the giants in Corporate America have already made their plans for the session. With this year being an election year, the session should be an interesting one. While there will be lots of political grand-standing and posturing, hopefully the session will be a productive one.

the GOp aGenda

The Alabama House Republican Caucus released its 2014 legislative agenda last month. They claim the package of bills will help busi-nesses and the state’s economy. Several of the bills in the package, called the “Commonsense

Conservative” agenda, according to the GOP leadership, are intended to streamline or reduce taxes. Summaries of the bills were released by the caucus at a news conference.

Republicans have controlled the Legislature since winning filibuster-proof majorities in 2010. Seven of the nine bi l ls in the package are said to be new proposals. Those bills with each sponsor, and a brief explana-tion of the content, are set out below:

• Small Business Tax Relief Act. (Rep. Barry Moore, R-Enterprise). Cur-rently, businesses are required to pay in advance if their average monthly estimated sales tax payment is more than $1,000. The bill would raise the threshold to $2,500 a month.

• Business Tax Streamlining Act. (Rep. Greg Wren, R-Montgomery). This bill would “simplify the process” for filing business personal property taxes, according to the caucus. It would create a new online f i l ing system that provides a “one-stop shop” for filing these taxes and allow busi-nesses claiming $10,000 or less in busi-ness personal property tax to file a short form that does not require them to itemize their property.

• Tax Elimination Act. (Rep. Jim Pat-terson, R-Meridianville). Would give the Alabama Department of Revenue the authority to suspend taxes and fees when the cost of collecting the tax exceeds the amount of revenue the tax brings in.

• Taxpayers’ Bill of Rights. (Rep. Paul DeMarco, R-Homewood). The bill would change the process for hearing tax assessment appeals to make sure that all taxpayers are “treated fairly,” according to the Republican Caucus. The House has passed similar bills the last three years.

• Alabama Taxpayer Audit Protec-t ion Act. (Rep. Wayne Johnson, R-Ryland). This bill would “ensure that Alabamians never have to worry about their state government threatening them for their political views,” which is most interesting to say the least.

• Revolving Door Act. (Rep. Ken Johnson, R-Mou lton) . Th is bi l l , prompted by this year’s resignations of several lawmakers, some of whom took jobs as lobbyists, bans former leg-islators from lobbying either house of the Legislature within two years after leaving the Legislature.


• The Healthcare Rights of Con-science Act. (Rep. Becky Nordgren, R-Gadsden). The bill would say that Alabama health care workers cannot be forced to provide a service that vio-lates his or her conscience, particu-larly services related to abortion, human cloning, human embryonic stem cell research and sterilization.

• Adoption Tax Credit Act. (Rep. Paul Lee, R-Dothan). The bill would give residents who adopt an Alabama child through private adoption or the state foster care system a one-time, $1,000 tax credit, which would apply for the year the adoption was finalized.

• Statutory Immunity for Teachers and State Employees. (Rep. Mike Jones, R-Andalusia). This bill would give teachers and employees “clear cut and codified immunity from being sued while acting in their official capacity.”

The Taxpayers’ Bi l l of Rights and the Healthcare Rights of Conscience Act are the only two of the nine bills that have been pro-posed before. It will be interesting to see how many of the bills pass both houses and are signed into law by Gov. Bentley.

Source: AL.com

the aGenda FrOm the demOcrats

Hopefully, the Democratic legislators will have come up with an agenda by the time this issue is received. It should be one that addresses specific problems in education and health care. Additionally, the Democrats should promote legislation aimed at job cre-ation. While I have not seen an actual agenda from the Democrats, I am reasonably sure they will have one. But, I don’t believe their approach should be merely to respond to what the GOP leadersh ip has put for th in their agenda.

alaBama arise has a Wish list FOr alaBama

Alabama Arise has an agenda that the group labels a “grown-up wish list for Alabama,” and it’s a good one. Unfortunately, it would take a miracle for their list to be successful in the Alabama Legislature. But the folks at Arise say they believe that behind many “miracles” stand caring, compassionate folks who have acted on their convictions to help build a better world. So Arise Citizens’ Policy Project has its own “grownup wish list” for Alabama in the coming year:

• Strong investments in education, health care and other public services that lay the foundation for a strong economy.

• A tax system that requires everyone to pay a reasonable share of the cost of those investments.

• Debt collection exemptions that help low-income Alabamians regain financial stabil-ity after a judgment.

• Reforms to make Alabama’s capital punish-ment system fairer.

• More transparency in the state’s process for setting utility rates.

• A chance for low-income people who have served their time and turned their lives around after a drug crime to regain their eli-gibility for food assistance.

• New, reasonable caps on the high cost of loans that currently carry triple-digit annual interest rates.

It is rather interesting and perhaps telling when one compares this list with those of our two political parties. The majority of Alabami-ans—I believe—would support most of this agenda set out above. Hopefully, there are enough legislators who will at least consider the agenda. They might be surprised—if they adopted it—how folks back in their respective districts would react.

Source: Alabama Arise New Release

IV. COURT WATCH

aBOta issUes White paper shOWinG america’s cOUrts are in peril

The American Board of Trial Advocates (ABOTA), an organization dedicated to the preservation of a fair and impartial judiciary and the right to trial by jury, has released its white paper, “Preserving a Fair, Impartial and Independent Judiciary.” The white paper addresses a rapid convergence of challenges that threaten to impair Americans’ treasured right to even-handed justice. ABOTA issued the following in a news release:

The American justice system—with its reliance on the rule of law, neutral judges and citizen juries—dramatically reinvented the legal realm more than 225 years ago based upon egalitarian principles. Recent history has shown increasingly frequent episodes in which judges, seeking to perform their duty to

enforce the constitution and laws, have been subjected to unwarranted public criticism.

ABOTA offers this white paper to examine why political and special interest interference, including the sky-rocketing costs of judicial elections, is detrimental to the judicial process. The paper also addresses how the lack of judicial funding is impacting the effi-cient administration of justice. It con-cludes with key strategies to assure that the judiciary can perform its duty as a s epara t e an d equ a l b ranc h o f government.

Michael T. Callahan, a lawyer from St. Petersburg, Fla., who serves as ABOTA national president, had this to say in the release:

The principle of fair and impartial courts is designed to protect the system of justice and the rule of law, thus maintaining public trust and confi-dence in the courts. America’s ability to allow juries to decide cases and judges to make rulings according to the rule of law—even if those decisions are politi-cally unpopular or opposed by powerful interests—is the lifeblood of our democracy.

Preserving the quality and independence of the judiciary has been a hallmark of ABOTA’s efforts for decades, Callahan said. He added;

Confidence in our nation’s judicial system is profoundly important. ABOTA provides a timely explanation to the public when a judge i s unfair ly criticized.

Over the years ABOTA has urged Congress to increase pay for justices, judges and their support staffs, and to change the procedures for adjusting future compensation. “The key to judicial independence is avoiding improper influence on any court from the other two branches of government or from private or partisan interests.”

A full copy of the white paper, “Preserving a Fair, Impartial and Independent Judiciary,” is available at www.abota.org.

Founded in 1958, ABOTA is a national asso-ciation of experienced trial lawyers and judges. ABOTA and its members are dedicated to the preservation and promotion of the civil jury tr ial r ight provided by the Seventh Amendment to the U.S. Constitution. The group has worked hard to preserve the jury system in this country and it should be com-mended for its efforts.

Source: ABOTA News Release


JUdGes GiVe laWyers sOme GOOd and Badly needed adVice

Federal and state judges told a group of lawyers representing drugmakers and medical device firms about their biggest pet peeves in personal injury litigation. These judges, speak-ing at a conference attended by lawyers and judges, said that too many motions related to discovery and expert testimony were being filed that were “wastes of time.” During their discussion, the judges outlined their concept of the ideal way to select bellwether suits. The insights were delivered by a half-dozen judges from around the country at the 18th Annual Drug and Medical Device Litigation Confer-ence, an event held in New York by the Ameri-can Conference Institute. The conference was attended by hundreds of lawyers. The follow-ing are five takeaways from the panel of judges for lawyers to keep in mind when han-dling personal injury claims:

Avoid Pointless Bellwethers. Judge Richard Kramer of San Francisco Supe-rior Court explained the proper methods for selecting Bellwether trials, which are used to resolve key issues in multidistrict litigation. A singe case can guide the res-olution of many suits. Judge Kramer said:

You need a case that’s not sexy. You need a case that’s got nothing special about it, even though the rest of the cases don’t know that. You need a case that other people, as much as possible, are going to follow.

That’s because a case that is distinctive will frequently do little to steer other matters toward settlement, as attorneys on both sides will be able to point out anomalies if things don’t go their way. Judge Kramer added:

I look for cases that aren’t particu-larly sexy [and] don’t have any-thing that’s going to get one or more of the sheep into a frenzy about something.

That point was echoed by U.S. District Judge David Herndon of the Southern District of Illinois, who said attorneys often choose outlier bellwethers that do l ittle more than drag out l itigation. “Lawyers have a tendency, despite all of the judge’s urgings, not to select repre-sentative cases,” Judge Herndon said. He pointed out that while a judge gets to select bellwethers from cases nominated by legal counsel, that matters little if the suits put forward are all skewed toward one side or the other. Judge Herndon had this to say:

If the trial itself is going to be coun-terproductive because it allows plaintiffs to say the result of the trials is an aberration, or defen-dants to say the results are an aberration ... you could really set back the resolution of the cases in general.

Watch Out for Daubert Hair Trigger. Several comments from the judges under-scored a growing sense that lawyers are shooting themselves in the foot by being too trigger-happy with Daubert motions, which are filed to exclude expert testi-mony. U.S. District Judge Cynthia M. Rufe of the Eastern District of Pennsylvania, for one, said that “Daubert is overused as a defense motion” and that the majority of experts are qualified. Judge Herndon echoed that point, chastising lawyers for calling into question the talents of almost every expert. Judge Herndon said on this matter:

Be selective about your Daubert motions, because surely in the world in which we live, some experts are in fact doing good science, or depending upon good science, when they give opinions.

Going further, Judge Herndon mentioned judicial frustration with the time-con-suming motions and suggested that judges start to tune out lawyers who cry wol f too o f ten . He m ade t h i s point, saying:

When, as a judge, you have to look at 15, 20, 30 Daubert motions, it is more than daunting. It’s very, very difficult. We’re human beings, and I’m not saying you take shortcuts, but when you have to look at that many Daubert motions, it makes our job [hard].

In Discovery Disputes, Give Peace a Chance. On another procedural topic, U.S. District Judge William S. Duffey, Jr., of the Northern District of Georgia, described being driven to the point of queasiness by motions to compel discov-ery, specifically mentioning unnecessary recitations of Rule 26 of the Federal Rules of Civil Procedure, which governs disclo-sures and depositions. Most discovery disputes boil down to a request being overly broad or too expensive to fulfill, according to the judge. Instead of filing a motion that can add months to a case, it’s often possible to sort things out in a brief conversation, with a judge calling the balls and strikes in a less formal setting,

Judge Duffey said. “Generally, they just need a neutral arbiter,” he added.

Judges Can’t Force Settlements. A good amount of discussion centered on the extent to which judges should push the parties to settle a case, with the jurists generally agreeing that they have a role to play, but a limited one.

With Parallel Cases, Cooperation Is Key. Another topic in the spotlight con-cerned related mass torts that are pro-ceeding on a parallel basis in state and federal courts, and the question of whether and how the matters should be coordinated. Judge Rufe encouraged her federal peers to “reach out in a very respectful way” to their state-level coun-terparts in hopes of conserving resources and preventing bellwether trials from being staged at the same time. A key diffi-culty is that cooperation is being done on an ad hoc basis. That’s because there is no overarching legal framework guiding such activities. Judge Kramer said that “the problem the lawyers have, and the problem that some judges have, is there are no formal rules [covering] this.”

Communication Should Be Better. Nonetheless, lawyers on all sides have an incentive to communicate better, as over-lapping efforts result in needless costs, according to U.S. Magistrate Judge Kaymani D. West of the District of South Carolina. She said: “I do have to say that coordination ... is paramount, simply because you want to avoid any kind of duplication of effort, and you want to manage the costs of litigation.” Hopefully, the message sent to the lawyers

was well received. If so, and if the message carries over into actual practice, it will make complex litigation much less complex, will save lots of money and will make our judicial system much more efficient.

Source: Law360.com

JUdGe rUles phOne sUrVeillance prOGram is likely UnlaWFUl

A federal judge ruled last month that the National Security Agency’s (NSA) bulk collec-tion of phone records violates the Constitu-tion’s ban on unreasonable searches, but he put his decision on hold pending a near-cer-tain government appeal. U.S. District Court Judge Richard Leon granted a preliminary injunction sought by Plaintiffs Larry Klayman and Charles Strange, concluding they were likely to prevail in their constitutional chal-lenge. Leon, an appointee of former President George W. Bush, ruled that the two men are


likely to be able to show that their privacy interests outweigh the government’s interest in collecting the data. Judge Leon says that means the massive collection program is an unreasonable search under the Constitution’s Fourth Amendment.

The collection program was disclosed by former NSA systems analyst Edward Snowden, provoking a heated debate about civil liber-ties. The Obama administration has defended the program as a crucial tool against terror-ism. But in his a 68-page, heavily footnoted opinion, Leon concluded that the government didn’t cite a single instance in which the program “actually stopped an imminent ter-rorist attack.” Judge Leon wrote:

I have serious doubts about the efficacy of the metadata collection program as a means of conducting time-sensitive investigations in cases involving immi-nent threats of terrorism.

Judge Leon stayed his ruling pending appeal “in light of the significant national security interests at stake in this case and the novelty of the constitutional issues.” This is a situation where the constitutional rights of cit-izens will have to be weighed against the ongoing threat of massive harm to our country. It’s certainly well-known and recog-nized by our elected leaders that our enemies bad ly want to do g reat ha rm to the United States.

Source: Newsmax.com

alaBama sUpreme cOUrt UphOlds $7.5 milliOn slander aWard

The Alabama Supreme Court has upheld a jury’s decision to award an Iranian-born busi-nessman $7.5 million in a defamation lawsuit. Shawn Esfahani, owner of the Eastern Shore Toyota car dealership, has won his lawsuit against Bob Tyler, who owns a competing Toyota dealership in Pensacola. Esfahani had sued Tyler for slander, successfully proving that Bob Tyler employees spread false rumors to car shoppers that he was an Iraqi terrorist and supported insurgents in Iraq. Testimony during the trial revealed that some employees referred to Esfahani’s business as “Taliban Toyota” and “Middle Eastern Shore Toyota.” The jury ruled in favor of Eastern Shore Toyota and awarded $2.5 million in compensatory damages and $5 million in punitive damages. The Defendant appealed.

In its opinion upholding the decision, the Supreme Court justices called the action of those involved to be “especially reprehensi-ble,” adding:

The Court cannot fathom a worse tri-fecta of crimes of which to accuse a businessman and his business than treason and funding terrorism and the murder of American soldiers . . .

Esfahani fled from Iran in 1980, when he was 16, after the Islamic revolution. He first moved to Spain, learning to read and write English in four months. He then became a U.S. citizen and opened Eastern Shore Toyota in December 2007 after years of working in car sales. Vince Kilborn, the Mobile lawyer who represented Esfahani’s, called the Supreme Court’s opinion “historic.” Ben said:

This was the largest slander verdict they’ve ever upheld unanimously. The justices all decided that we’re going to draw a bright line in the sand, that no matter where you’re from, if someone defames you this bad, they are going to uphold not only the compensatory damages, but the punitive as well. They didn’t cut a penny.

Vince did a very good job in this most inter-esting case. Historically, defamatory cases have been very difficult to win.

Source: AL.com

V. THE NATIONAL SCENE

christmas came early FOr GOVernment cOntractOrs

Some observers believe that the federal gov-ernment favors government contractors over the public interest far too often. A recent action seems to give some credence to that belief. The government has increased the amount it reimburses contractors for execu-tive pay, which comes at a convenient time since the media doesn’t always follow govern-ment happenings in depth during the holiday season. This increase also came while law-makers were looking to raise the amount federal workers pay toward their pensions. The difference in how the two groups are dealt with has drawn fire from the head of a federal employees union. J. David Cox, Sr., who is the National President of American Federation of Government Employees, made it clear that he will “not stand by idly while con-tractors get r ich at middle-class federal employees’ expense.”

The White House Office of Management and Budget (OMB), has raised the cap the gov-

ernment pays to reimburse federal contractors for the salaries of top executives. According to an action made public in a Dec. 4 memo, the government will reimburse up to $952,308 per contract toward top-level salaries. The previous amount was $763,029. The change went into effect on Jan. 1. While Christmas has come early for federal contractors, govern-ment employees found their stockings “full of coal.” With funds being hard to come by for the operations of the federal government, I have to wonder how the increases for govern-ment contractors can be justified.

Cox is justifiably upset over this state of affairs. The reimbursement is the maximum amount the government pays toward execu-tive salaries, but it’s not a salary limit. Individ-ual companies can pay the executives whatever they want, but must cover the extra amount from their own budget. Currently, sal-aries are reimbursed based on an industry average that’s set annually by the OMB. According to the Government Accountability Off ice (GAO), the cap has increased 63 percent since 1998, outpacing the growth of inflation and the rate of federal salaries. The White House has proposed setting the limit at $400,000—the same amount the president ea r ns—a move that cou ld save $180 million a year.

The House of Representatives has rejected efforts to change the formula used to deter-mine the reimbursement and Senate motions have been stymied. The reimbursement change comes after three straight years of employee pay freezes and a week of lost wages due to this summer’s sequestration furloughs. It also comes as the Senate-House Budget Committee is considering a legislation that would require federal workers to pay more toward their retirement. They say this is an effort to blunt the impact of sequestration on national defense. Mr. Cox made this point, which puts things in context:

Putting things in the proper perspective, while government contractors are being favored, some in Congress are advocating an array of substantial compensation cuts for modestly paid VA nurses and Border Patrol agents. It appears that wealthy contractors are getting a fat pay raise, and that cause is coming from U.S. taxpayers. This is the height of irresponsible governing and leadership to allow this ridiculous increase in taxpayer-funded compensa-tion for contractor executives.

The union would like to see the reimburse-ment cap for government contractors lowered to $230,700, the current salary earned by Vice President Biden. That seems reasonable. According to a GAO report, a change of that


sort could save as much as $440 million per year. I wonder how far—considering the vast political power of corporations that do busi-ness with the federal government—that pro-posal will get. What do you think?

Source: AL.com

First laWsUit Filed in naVy yard shOOtinG

The family of one of the victims in the Washington Navy Yard shooting has filed a lawsuit against two federal government agen-cies and two government contractors alleging that they failed to secure the Southeast D.C. facility and failed to respond appropriately to the myriad signs of mental health issues the shooter exhibited in the months and years before the massacre. The complaint—filed in federal court in Florida on behalf of the family of Mary Frances DeLorenzo Knight—is the first lawsuit in the wake of the September shooting rampage. The shootings were carried out by a gunman who had an all-access secu-rity pass to the military installation. Ms. Knight, a computer scientist, was one of a dozen people gunned down by Aaron Alexis at the Navy Yard.

Ms. Knight’s family members filed a claim last month, which was preliminary to filing suit against the government. The suit names the Navy, the Department of Veterans Affairs and two government contractors as defen-dants. Like the claim, the suit al leges a detailed recitation of Alexis’s troubled past, which should have put the Defendants on notice. The U.S. government and its various contractors should have noticed the many warning signs of Alexis’s instability before issuing him a security clearance. Failing that, they should have installed a metal detector at the Navy Yard to prevent someone from getting inside with a gun.

Sidney L. Matthew, a Tallahassee, Fla., lawyer, represents the Knight family in this lawsuit. We will watch this litigation very closely. There is some whistleblower litigation o ngo i ng t h a t d e a l s w i t h t h e s a m e subject matter.

Source: AL.com

VI. THE CORPORATE WORLD

Wells FarGO and citiGrOUp sUed OVer FOreclOsUres

Los Angeles has filed suit against Wells Fargo and Citigroup, alleging the companies engaged in mortgage discrimination that led to a wave of foreclosures in minority commu-nities during the housing crash. The two law-suits, each filed in federal court, are the latest fallout from the 2008 collapse of the subprime mortgage industry. As you will recall the col-lapse brought about a number of actions against various lenders by federal agencies and city governments. The Los Angeles suits allege a “continuing pattern of discriminatory mort-gage lending practices” in Los Angeles that violate the federal Fair Housing Act. They claim Wells Fargo & Co. and Citigroup Inc. at first refused to grant mortgages in minority neighborhoods—a practice known as redlin-ing—but later targeted black and Hispanic neighborhoods for predatory loans, known as reverse redlining.

The lawsuits contend that “vulnerable, underserved borrowers” denied by years of redlining jumped at the chance to obtain sub-prime home loans they couldn’t afford, then were hit by a swarm of foreclosures when the housing bubble burst and they were denied refinancing. It’s alleged in the lawsuit against Wells Fargo:

Since 2008, banks have foreclosed on approximately 1.7 million homes in Cal-ifornia, and Wells Fargo is responsible for nearly one in five of these foreclo-sures . A loan in a predominantly minority neighborhood of Los Angeles is nearly five times more likely to result in foreclosure that one in a predomi-nantly white neighborhood. These fore-closures often occur when a minority borrower who previously received a predatory loan sought to refinance the loan, only to discover that Wells Fargo refused to extend credit at all, or on equal terms as when refinancing similar loans issued to white borrow-ers. The foreclosures caused property values to tumble, costing the city tax revenue, and leaving it holding the bag for the cost of cleaning up and policing vacant properties.

Each of these two lawsuits seek unspecified reparations and damages. They cite a report by the Alliance of Californians for Community Empowerment and the California Reinvest-

ment Coalition that estimated the mortgage crisis resulted in more than 200,000 foreclo-sures from 2008 to 2012, with $481 million in lost property tax revenue to the city, and $1.2 billion in Los Angeles for “increased costs of safety inspections, police and fire calls, trash removal and property maintenance.” The Los Angeles city attorney’s office filed these two lawsuits. They have previously gone after other mortgage lenders in state court, blaming them for urban blight sparked by the housing market collapse. Wells Fargo and Citigroup deny all of the allegations against them and claim the suits are without merit. We will see how this litigation turns out.

Source: ABC News

JOhnsOn & JOhnsOn and nOVartis Fined $22.4 milliOn OVer pay-FOr-delay deal

Drugmakers Johnson & Johnson and Novar-tis AG have been fined a total of €16.3 million ($22.4 million) by European regulators for entering into an anti-competitive agreement to delay the introduction of a generic painkiller in the Netherlands. According to the European Commission, in 2005 the respective Dutch subsidiaries of Novartis and J&J entered into agreement to prevent the entry of a generic version of J&J’s fentanyl. This came after the protection on its brand-name fentanyl depot patch expired in the Netherlands, and just as Novartis unit Sandoz BV was poised to launch its own fentanyl patch. Joaquin Almunia, EU commissioner for competition policy, said in a statement:

J&J paid Novartis to delay the entry of a generic painkiller. The two companies shockingly deprived patients in the Netherlands, including people suffering from cancer, from access to a cheaper version of this medicine. Today’s deci-sion should make pharmaceutical com-panies think twice before engaging into such anti-competitive practices.

J&J was fined €10.8 million, while Novartis was ordered to pay €5.5 million. The antitrust watchdog said when J&J’s protection for the fentanyl depot patch was about to expire, Sandoz, then known as Hexal BV, was so close to launching a generic version that it had already produced the necessary packaging material for the rollout.

However, in July 2005, Sandoz was said to have entered into a “pay-for-delay” agreement with Janssen-Cilag, J&J’s Dutch subsidiary, under the guise of a “co-promotion” agree-ment. Under that agreement Sandoz received monthly payments that exceeded the profits Sandoz expected to reap from selling its generic, as long as it kept the generic off the


market, according to the EC. The agreement held up until December of the following year when a third party was about to launch its ow n ver s ion o f t he fent a ny l pa tch . The EC said:

The agreement therefore delayed the entry of a cheaper generic medicine for 17 months and kept prices for fentanyl in the Netherlands artificially high, to the detriment of patients and taxpayers who finance the Dutch health system.

The commission pointed to internal docu-ments that stated Sandoz and Janssen-Cilag agreed to cooperate so as “not to have a depot generic on the market and in that way to keep the high current price,” and that Sandoz would abstain from entering the Dutch market in exchange for “a part of [the] cake.” The EC said that Janssen-Cilag didn’t consider any other potential partners for its co-promotion agreement and that Sandoz actually engaged in very limited or no actual co-promotion activities.

In recent years, drugmakers’ use of pay-for-delay agreements, such as the one referred to above, have repeatedly caught the attention of antitrust regulators in the U.S. and Europe. For example, the EU launched an 18-month, sec-tor-wide competition inquiry in 2008 that began with unannounced raids on some of the world’s largest pharmaceutical companies, including J&J and Novartis. Then in July 2009, the commission released a final report of its inquiry, finding that originator drug compa-nies often brought litigation and entered into settlements with generic-drug makers in order to block or delay cheaper versions of their brand medications from reaching the Euro-pean market. Subsequently, the commission launched two other investigations into the pay-for-delay deals, issuing statements of objections in 2012 to Servier SAS regarding the cardiovascular medicine perindopril, and to H. Lundbeck A/S for the antidepressant cita-lopram. It’s good to see governmental agen-cies doing their jobs and doing them well.

Source: Law360.com

mOrtGaGe Giant OcWen settles mOrtGaGe FOreclOsUre laWsUit in alaBama

A multi-state settlement was reached last month by one of the country’s largest mort-gage companies, Ocwen Financial Corpora-tion. The Consumer Financial Protection Bureau, 49 states, and the District of Columbia agreed to the settlement, which totaled $2.1 billion nationally. The lawsuit against the company and two of its subsidiaries alleged that they prematurely and inappropriately foreclosed on homeowners, violated con-

sumer rights, and falsified documents and affi-davits. Ocwen Financial Corporation is the fourth largest mortgage servicer in the country. The company agreed to $2 billion in principal reductions and $125 million in cash payments to borrowers on whom it fore-closed. It appears that most of the value in the settlement goes to the reduction aspect.

The settlement comes as a result of a civil lawsuit filed by the Plaintiffs. It does not give Ocwen Financial Corporation immunity from criminal prosecution, nor does it prevent other civil litigants from suing the company. Ocwen Financial Corporation will contact affected borrowers directly in the next three years. Borrowers who will be affected can also contact the company directly to deter-mine whether they stand to benefit from the settlement.

Source: AL.com

VII. CONGRESSIONAL UPDATE

cOnGress shOUld act On immiGratiOn reFOrm WithOUt delay

Speaker John Boehner should allow the U.S. House of Representatives to take up and vote on comprehensive immigration reform. Thus far the speaker has not allowed any bills to come to the floor. Many capital hall observers believe a bill would pass with bipartisan support if Boehner brought it to the f loor. Rep. John Lewis from Georgia, a hero of the civil rights movement, in a recent speech had this to say:

History will not be kind to us as a people and as a nation unless we do what is right, what is fair and what is just. We cannot wait. We cannot be patient. ... Please, Mr. Speaker, bring the bill to the floor.

Congress didn’t see fit to tackle the immi-gration issue last year. But Democrats are working hard to keep immigration reform in the headlines—and generate public pres-sure—in hopes that GOP leaders will take up the needed legislation early this year. House Minority Leader Nancy Pelosi, who is a strong proponent of reform, stated:

For us, it is inevitable that we will pass comprehensive immigration reform. For some, it is inconceivable, and they will stand in the way. We just have to shorten the time between the inevitable to us and the inconceivable to them.

While speaker Boehner has said all year that he supports immigration reform, he hasn’t prioritized it in the face of strong oppo-sition from the Tea Party. The Speaker has refused to consider a comprehensive reform bill passed by the Senate with bipartisan support in June. Neither have a series of Republican bills passed by the House Judiciary Committee during the summer found their way to the floor. The Democrats are pushing legislation, unveiled in October, that would create a pathway to citizenship for illegal immigrants. The legislation would also require the Obama administration to come up with a more effective border security plan, which is favored by Republicans.

The bill has more than 190 co-sponsors, with dozens of additional lawmakers on both sides of the aisle expected to support it if it comes up for a vote. Rep. Xavier Becerra (Calif.), chairman of the House Democratic Caucus observed:

We have more than 218 members of the House who have publicly declared they are for comprehensive immigration reform. We will get this done.

I believe that the time has come for Con-gress to take up and pass meaningful immigra-tion reform. If you agree, take the time to let your U.S. House members hear from you. There can be no legitimate excuse for them not to deal with this issue. Delay can only cause more problems and continue with the huge expenses that are currently being borne by taxpayers due to government inaction.

Source: TheHill.com

VIII. PRODUCT LIABILITY UPDATE

aVailaBle technOlOGy cOUld haVe preVented neW yOrk train derailment

In early December, a New York railroad commuter train jumped the tracks after going into a curve at 82 m.p.h.—nearly three times the 30 m.p.h. speed limit. After the crash, many placed all the blame on the train’s engi-neer. The Engineer’s lawyer stated that he experienced a nod or daze, almost like road fatigue or the phenomenon sometimes called “highway hypnosis.” The Engineer says he remembers “operating the train, coming to a section where the track was still clear—then all of a sudden, feeling something was wrong and hitting the brakes.” When the train


derailed, more than 60 people were injured, 11 of them critically.

Defective products l ie at the heart of product liability cases. In this case, a safety system designed to keep an engineer alert was not installed in the car in which the Engineer was controlling the train. A “dead-man’s pedal” is a pedal in the train’s car that must be depressed or the train will automatically slow down. Trains can also have alarms, sometimes called “alerters,” which sound if the engi-neer’s controls have not been moved within a certain timeframe. If the engineer does not respond, such as by pressing a button, the brakes automatically operate. A lack of such technology in the Metro-North train could cer-tainly give rise to a viable product liability claim. Most safety experts agree that this “pos-itive train control” was available and should have been installed on trains years ago. Metro-North failed to use the technology, which has been available for 25 years, to take out the human error factor. Congress has already ordered that commuter and freight railroads must install this type technology, which uses electronics to monitor trains’ positions and speed and stop derailments, by the end of 2015. But this deadline is no excuse for rail-roads dragging their feet on installing avail-able safety technology. There have already been nine lawsuits filed against Metro-North arising out of the crash. Hopefully, this litiga-tion will serve as an incentive for railroads to move forward and install the technology that has been available to them for years. Doing so will make trains much safer.

Source: Law.com

UnsaFe cars in mexicO make their Way intO U.s.

Mexico is the world’s fourth largest auto exporter, producing about 3 million cars every year. While the cars produced in Mexico may look identical, how safe they are depends on where they are headed. Compared with the U.S., the laws of Mexico require virtually no safety protection. As a result, automakers can save money and increase profits by making cars intended to be sold in Mexico without including many of the safety features required in the U.S. For example, i f the cars are exported to the U.S., they must meet fairly stringent safety standards, including such things as having as many as six to 10 airbags and stability controls.

But if the cars are intended to remain in Mexico, the cars carry a code signifying no need for antilock braking, electronic stability control, or more than two airbags. Despite the fact that the cars are lacking significant safety features, these unsafe cars are sold in Mexico

for about the same price. Alejandro Furas, a technical director for Global New Car Assess-ment Program, a vehicle crash-test group, stated: “We are paying for cars that are far more expensive and far less safe. Something is very wrong.”

In 2011, nearly 5,000 drivers and passengers in Mexico died in accidents—a 51 percent increase from 2001. In contrast, auto-related fatalities in the U.S. during the same decade were reduced by 40 percent. While General Motors has so far declined to comment pub-licly on these issues, an engineer who headed a manufacturing division for the company in Mexico until last year said the company saved on costs by not adding safety features. He has said:

For the company to make more net profit and so that cars are sold at more affordable prices, we would toss aside some accessories. Air bags, ABS brakes, those were the first to go.

Despite the fact that these unsafe vehicles are not exported to the U.S., these vehicles can make their way on to U.S. highways by individuals traveling across the U.S. border. The harsh reality is that we are all at risk so long as these vehicles are sold. Mexico will very likely continue to sell these unsafe cars to its own people. That’s because the country’s $30 billion auto industry will work to protect the automakers and the Mexican government won’t be willing to challenge the carmakers and risk shifting production out of Mexico. In the meanwhile, folks on U.S. highways will be at risk because of unsafe cars made in Mexico that will be on those very same highways.

Source: The Huffington Post

IX. MASS TORTS UPDATE

an Update On the asr hip litiGatiOn

DePuy Orthopaedics, a subsidiary of Johnson & Johnson, has agreed to a $2.475 billion proposed global settlement program that could resolve thousands of claims related to injuries suffered as the result of their ASR hip implant device. The settlement has been approved by U.S. District Judge David A. Katz in the Northern District of Ohio, who is over-seeing the consolidated litigation for cases filed in Federal court, along with the other state court judges where cases were filed. DePuy faces thousands of lawsuits in the U.S. related to its ASR XL Acetabular and ASR Hip

Resurfacing Systems, which it recalled in August 2010 amid reports that unusually high rates of the devices failed after just five years. Navan Ward, Jr., a lawyer in our firm’s Mass Torts Section, was selected to serve on the Plaintiffs Steering Committee for the consoli-dated litigation for cases against DePuy Ortho-paedics in the hip implant products liability litigation.

The agreement was announced Nov. 19, 2013 in the Toledo, Ohio, federal district courtroom of United States District Court Judge David A. Katz. Judge Katz has presided over the federal multidistrict litigation (MDL) involving some 8,000 of the ASR cases. However, the proposed settlement does not involve all ASR patients. The current settle-ment program applies only to patients who are U.S. citizens that have undergone revision surgery prior to August 31, 2013. Neither does the settlement program cover ASR patients who underwent a revision surgery within 180 days of their initial ASR hip replacement surgery, or who had a revision solely due to infection or trauma, which is narrowly defined by the settlement agreement. It should be noted that patients who do not qualify for the settlement retain all of their rights to pursue claims against Johnson & Johnson.

The settlement program’s terms are rather complicated—as evidenced by the 100-page agreement setting up the program—and the settlement amount offered by DePuy to settle any individual case will be based upon a host of factors. To start, any eligible ASR patient w i l l be ent i t led to a “ba se” awa rd , which will be:

• $250,000 for patients who underwent a revision surgery less than 5 years after their initial surgery;

• $225,000 for a patient who underwent a revision surgery between 5 and 6 years after their initial surgery;

• $200,000 for a patient who underwent a revision surgery between 6 and 7 years after their initial surgery; and

• $150,000 for a patient who underwent a revision surgery between 7 and 8 years after their initial surgery. The ultimate award may also be adjusted up

or down. Downward adjustments are pro-posed for patients falling into the following categories. They include persons who:

• Were older than 70 at the time of the initial surgery;

• Smoked at the time of revision;

• Had a prior hip implant in the same hip that later received an ASR implant that was then revised; and


• Had a Body Mass Index (BMI) greater than 35 when the ASR was implanted.

Patients may be entitled to additional damages above the “base” award if medical records demonstrate:

• They had ASR devices implanted in both hips and underwent revision surgeries on both hips; and

• They suffered an extraordinary complica-tion as a result of the revision surgery, such as a heart attack, stroke, pulmonary embo-lism/deep vein thrombosis, dislocation, foot drop, the need for re-revision surgery, postoperative infection or other special cir-cumstances. Extraordinary lost wages as a special circumstance are also recoverable.

Various other factors will also be consid-ered in evaluating each case. In addition to awards, as described above, DePuy agreed to satisfy most health care insurance liens for ASR-related medical costs. Many have called this agreement “unprecedented,” as Plaintiffs have traditionally been left to negotiate lien amounts with insurers and to satisfy any medical liens out of their settlement awards. Therefore, the settlement program offers patients benefits above and beyond the typical damage award.

Even after the almost $2.5 billion settlement agreement, Johnson & Johnson will still face thousands of hip implant lawsuits from Plain-tiffs who have yet to have their ASR hips revised. The settlement leaves an estimated 4,000 to 5,000 ASR cases remaining in federal and state courts. These patients continue to suffer injuries such as severe pain, limited mobility, and elevated metal ions in their blood. Nonetheless, Johnson & Johnson has not agreed to include these patients in the set-tlement program.

If you would like additional information concerning the ASR settlement, you can visit the official website at www.usarhipsettle-ment.com. You can also contact Navan Ward, a lawyer in our firm’s Mass Torts Section at 800-898-2034 or by email at Navan.Ward@bea-sleyal len.com. Navan has been heavi ly involved in all of the metal-on-metal hip litiga-tions. He was appointed to the Plaintiffs’ Steer-ing Committee for the DePuy MDL and has been actively involved in litigating these cases since they were recalled in 2010.

Source: Law 360

pennsylVania sUpreme cOUrt dismisses Wyeth’s premprO appeal

The Pennsylvania Supreme Court last month dismissed a set of appeals by Wyeth Pharmaceuticals Inc. in the company’s attempt

to avoid paying an $8.6 million punitive damages verdict. The verdict was in a suit that claimed its Prempro menopause drug had caused a woman’s breast cancer. Wyeth had asked the Pennsylvania high court last Sep-tember to overturn the punitive damages award, arguing that it was invalidated by the U.S. Food and Drug Administration’s (FDA) approval of the drug. The pharmaceutical company contended that the appeals court had erred in reinstating the award a Philadel-phia jury had granted in 2007 to Mary Daniel, an Arkansas woman who claimed the drug had caused her breast cancer.

The state’s high court did not expound on its rationale for dismissing the appeals. “The appeals are dismissed as having been improvi-dently granted,” the order said. The punitive damages were in addition to the $1.7 million in compensatory damages the jury awarded Ms. Daniel and her husband. A trial court judge granted Wyeth’s motion for a judgment notwithstanding verdict on punitive damages, claiming these damages were not appropriate under the circumstances. But after Ms. Daniel appealed, the Superior Court overturned the judge’s ruling, determining sufficient evi-dence existed for the jury to conclude that Wyeth had failed to thoroughly test the drug’s breast cancer risks, thus engaging in “outra-geou s conduc t ” t h a t me r i t ed pu n i -tive damages.

Six different appellate courts across the U.S. have upheld punitive damages against Wyeth in cases involving Prempro. In the Daniel case, the jury had been correct in concluding that Wyeth had held the capability to perform more adequate studies of the risks posed by the drug but had failed to do so. Ms. Daniel is represented in her case by Robert K. Jenner of Janet Jenner & Suggs, a firm located in Bal-timore, Md.

Source: Law360.com

JOhnsOn & JOhnsOn Wants risperdal dOcUments pUt Under seal

The U.S. Food and Drug Administration (FDA) has issued warnings that boys and young men who have taken antipsychotic drug Risperdal have been linked to increasing levels of the hormone Prolactin stimulating breast growth and milk production. There have been more than 420 lawsuits alleging personal injuries filed against Johnson & Johnson. The drug manufacturer has already paid billions of dollars to settle federal and state government allegations of illegally mar-keting Risperdal.

Johnson & Johnson is trying to keep some significant documents from public view. The company told a Pennsylvania state judge that

lawyers for Plaintiffs in a number of product liability suits involving Risperdal claims are seeking to publicly release a series of clinical studies that were kept under seal by a 2011 court order. The company and its subsidiary, Janssen Pharmaceuticals Inc., argued in a recent court filing that the documents in ques-tion were neither filed with the court nor deemed public records. As a result, Johnson & Johnson claims they are exempt from public access. The company made this argument:

These materials are generated for scien-t i s t s , researchers and regulatory authorities—not the general public. Simply stated, no legitimate purpose would be served by declassifying the documents identified by plaintiffs.

But lawyers for Plaintiffs in the product lia-bility lawsuits against Janssen Pharmaceuticals told the court that documents detailing the medication’s risks were too vital to the public interest to remain under seal as part of court proceedings. These lawyers represent Plain-tiffs in 275 product liability suits against Janssen that are pending in the Philadelphia County Court of Common Pleas. The Plaintiffs argued that the material consisted of observa-tions about the effectiveness and risks of the drug and that it could not be considered pro-prietary. The Plaintiffs said in their brief filed with the court:

The tremendous public interest in this case and the data and materials being hidden by Janssen outweighs defen-dants’ claims to secrecy. They cannot be proprietary, as claimed by Janssen. Rather, they are safety documents that require disclosure for the well-being of the public, full and unfettered review by regulatory authorities and the edu-cation of healthcare providers who are prescribing this powerful drug.

Janssen’s track record of misrepresenting the risks and benefits associated with its drugs warranted the material being released to the public. The Plaintiffs’ brief said on this point:

Plaintiffs have uncovered evidence that Defendants have repeatedly misrepre-sented the safety of Risperdal to regula-tory authorities, healthcare providers and the public. Plaintiffs now possess evidence that Janssen systematically under-reported or misrepresented clini-cally important study results relating to the occurrence of gynecomastia ... in the child and adolescent market . However, the discovery that Plaintiffs have uncovered is protected behind the shield of the protective order entered in this case.


Johnson & Johnson agreed in November to pay $2.2 billion to resolve civil and criminal claims from whistleblowers under the False Claims Act that it showered doctors with kick-backs and illegally promoted off-label uses of three drugs, including Risperdal. While the Plaintiffs in the Philadelphia cases alleged that the company also marketed the drug off-label to children, the settlement announced in November dealt exclusively with allegations that it promoted Risperdal for use in the elderly. Only part of the expanding docket of Risperdal cases in Philadelphia has been dis-posed of thus far.

A hearing was held on this matter Dec. 16, but at press time no decision had been made by the Court. Thus far, only a few of the Risp-erdal cases in Philadelphia have been disposed of. An initial set of six cases was slated to go to trial starting in September 2012. Janssen settled the first of the set the morning the trial was scheduled to get underway for an undis-closed sum. Although the trial started in a second case later that month, Janssen agreed to settle with the Plaintiff after a week of testi-mony before a jury. The same day, the company announced it had reached agree-ments to settle claims in the four other cases pending in the first set. Meanwhile, a second set of Risperdal cases is expected to go to trial in Philadelphia starting in early June.

The Plaintiffs in the case mentioned above are represented by Stephen Sheller and Brian McCormick, lawyers with the Philadelphia firm of Sheller PC. If you need additional infor-mation about the Risperdal litigation gener-ally, contact Frank Woodson, a lawyer in our Mass Torts Section, at 800-898-0234 or by email at [email protected].

Sources: Law 360 and Forbes

nOVartis can’t apply neW Jersey cap On pUnitiVe damaGes in ZOmeta sUits

U.S. District Judge Mark. R. Hornak has ruled that Pennsylvania product liability law permitting unlimited punitive damages con-trols three suits alleging Novartis Pharmaceu-tical’s bone drug, Zometa, caused jaw injuries. Judge Hornak denied the drugmaker’s attempt to apply New Jersey law, ruling that Pennsyl-vania law applied to the suits. Novartis had argued that New Jersey, home to its U.S. head-quarters, had the more significant relationship to the punitive damages issue since it was the site of the alleged corporate misconduct.

The New Jersey Products Liability Act law contains a punitive-damages cap of $350,000 or five times the compensatory award, which-ever is greater. The New Jersey law also pre-cludes punitive damages for FDA-approved products without evidence that the manufac-

turer knowingly misled the government on information relevant to the alleged inju-r ies. Pennsylvania law imposes no such restrictions on punitive awards. The Plaintiffs are former Zometa users, or their spouses, who filed suit based on these claims; strict lia-bility, negligent manufacture; failure to warn and breach of warranty. The users allegedly developed osteonecrosis of the jaw (ONJ) after taking the drug while undergoing cancer treatment.

Two of the three suits at issue in the court’s ruling were filed in federal court in Washing-ton, D.C., and were first sent to a Tennessee multidistrict litigation and then to Pennsylva-nia. The users in these two cases first ingested Zometa in Pennsylvania. Under Washington’s choice-of-law protocols, Pennsylvania met the four-factor test for applying its law to the suits, according to Judge Hornak’s order. He said that the site of the alleged injury generally determines the controlling state law, adding that the relevant injurious conduct occurred not in New Jersey, where Novartis created Zometa’s labeling, packaging and marketing materials, but in Pennsylvania, where it alleg-edly misinformed physicians about the drug’s side effects through inadequate warning labels. The court’s order reads in part:

The plaintiffs and their doctors alleg-edly failed to receive adequate warn-ings in Pennsylvania, plaintiffs were prescribed the drug in Pennsylvania, and were infused with the drug in Pennsylvania. [Novartis] did conduct research regarding Zometa and make decisions on Zometa marketing, label-ing, and packaging in New Jersey. However, the place where the defendant engaged in certain conduct is of less sig-nificance in situations where a poten-tial defendant might choose to conduct his activities in a state whose tort rules are favorable.

Judge Hornak said while he “respects” New Jersey’s interest in punishing and deterring dangerous corporate conduct on its own terms, he was swayed by Pennsylvania’s “sub-stantial” interest in regulating pharmaceutical manufacturers that affirmatively market their products to Pennsylvania doctors, on that point. He wrote:

Pennsylvania maintains an interest in its own punitive damages law, which is intended to protect its citizens from defective products and to encourage manufacturers, wherever headquar-tered, to produce safe products. When those products are systematically intro-duced into Pennsylvania, Pennsylvania has a legitimate and substantial inter-

e s t i n a p p l y i n g i t s p u n i t i v e damages law.

The choice of law for a third suit, first brought in New York, according to the order, hinged on the location of the “last event nec-essary” to establish Novartis’ liability. Judge Hornk said this “plainly occurred” in Pennsyl-vania. Judge Hornk wrote:

The allegations on which plaintiffs ground their punitive damages claims range well beyond [Novartis’] board-room in New Jersey; they include claims that NPC marketed and sold Zometa to them in Pennsylvania, and failed to properly warn them there, while knowing of Zometa’s potentially devas-tating side effects.

Novartis recently failed to convince the U.S. Supreme Court to review its argument that state punitive damages awards encroach on the regulatory authority of the U.S. Food and Drug Administration and are therefore uni-formly preempted. The Plaintiffs in the three lawsuits are represented by Joseph F. Butcher and Daniel E. Krauth, who are with the Penn-sylvania law firm Zimmer Kunz; John Julian Vecchione of Valad & Vecchione, located in Fairfax, Va.; and Daniel A. Osborn with The Osborn Law firm based in New York City.

Source: Law360.com

ethicOn accUsed OF destrOyinG impOrtant dOcUments in transVaGinal mesh mdl

Ethicon Inc., a subsidiary of Johnson & Johnson and manufacturer of TVT-O and Prolift transvaginal mesh, has been accused of destroying or losing tens of thousands of docu-ments during a 10-year period in violation of a court order. In a motion for sanctions filed in the District Court for the Southern District of West Virginia, Plaintiffs allege that Ethicon systematically and continually destroyed the documents of outgoing employees at all levels and documents that were more than two years old despite a litigation stay instituted in 2003. Plaintiffs are seeking default judgments in their first TVT-O and Prolift bellwether trials, spoliation instructions to the jury at every other bellwether trial, and costs and fees. The Plaintiffs also seek to prohibit Ethicon at any trial from raising defenses based on the learned intermediary doctrine or any statute of limitations.

According to the motion and evidence filed by the Plaintiffs’ Steering Committee (PSC), Ethicon destroyed documents from the custo-dial files of its worldwide president, chief medical officer, global medical director, vice president of global strategic marketing, and


many of the sales representatives in the upcoming bellwether trials. Under manage-ment direction, Ethicon deleted the computer hard drives of outgoing employees unless the employee took steps to prevent it, despite Eth-icon’s ongoing duty to preserve all evidence for discovery in the l itigation. Ethicon’s employees apparently had no uniform under-standing of which documents needed to be preserved. Ethicon also destroyed several instructional videos that contradicted the position of one of its expert witnesses in the litigation. Ethicon also are unable to locate roughly 600 pounds of documents provided to it by the now-defunct original manufacturer of its TVT-O mesh.

In addition to the systematic destruction of documents, the spoliation was caused by Ethi-con’s lack of internal oversight of procedures for preserving documents. Ethicon failed to implement a written policy regarding docu-ment retention and did not create a central-ized litigation hold folder until 2007. Ethicon learned through a 2002 internal audit that its document retention procedures were inade-quate, yet waited five years to institute correc-tive action. In support of the motion, Plaintiffs submitted testimony from an Ethicon corpo-rate representative as well as numerous Ethicon documents.

The motion for sanctions was fi led on behalf of all Plaintiffs with cases pending in In re Ethicon, Inc., Pelvic Repair System Products Liability Litigation, the Multidistrict Litigation (MDL) venued in the U.S. District Court for the Southern District of West Virginia. Judge Joseph Goodwin has scheduled a bellwether trial involving an Ethicon TVT stress urinary incontinence in early February 2014.

If you need more information on this subject, contact Leigh O’Dell, who is handling the TVM Litigation for our firm, and who is on the PSC in the MDL, at 800-898-2034 or by email at [email protected].

BOehrinGer Fined FOr WithhOldinG dOcUments in mdl

An Illinois federal judge has ordered Boeh-ringer Ingelheim Pharmaceuticals Inc. (BIPI) to pay nearly $1 million as sanctions for dis-covery abuses in multidistrict litigation (MDL) involving its oral anticoagulant Pradaxa. U.S. District Judge David R. Herndon found that the drugmaker’s failure to produce thousands of documents amounted to bad-faith conduct. BIPI, along with German parent Boehringer Ingelheim International GmbH, can’t explain away their failure to enact a companywide liti-gation hold to preserve critical documents and communications by June 2012, when they knew a wave of product liability lawsuits over

Pradaxa was inevitable, according to an order signed by Judge Herndon.

Noting that the court has repeatedly been asked to referee disputes in the case regarding “lost,” “accidental ly destroyed” or “just recently discovered” evidence, Judge Herndon fined the companies $931,500 and ordered them to immediately make executives avail-able for depositions in New York or another convenient locale for the Plaintiffs’ lawyers. Judge Herndon wrote:

The fine imposed today will not impact the defendants’ profit margins, but hopefully together with the potential future actions the court may be forced to take ... the defendants will under-stand once and for all time compliance with the court ’s orders is not an optional part of litigation strategy.

Among the materials that the court faulted the defendants for failing to preserve was the custodial file for Professor Thorstein Lehr, a former top scientist at Boehringher who was deeply involved with Pradaxa, but wasn’t even identified by the Defendants as a potential source of relevant information. The court’s order said that business-related text messages on certain employees’ cellphones were also lost or held back, as was evidence controlled by the Defendants’ sales representatives, clini-cal science consultants and medical science liaisons. A shared network between the com-panies—known as “G Drive”—was also plagued by production issues, according to the order.

The steering committee for the Plaintiffs brought its initial sanctions motion in Septem-ber, prompting the court to impose a rela-tively small fine—just under $30,000—and to order Boehringer to conduct an audit to fix the problems. However, the audit revealed even more “gaps” in the Defendants’ produc-tion and showed that their purported compa-nywide l itigation hold had been far too selective, according to the court’s order. Judge Herndon, in his order, wrote:

[T]he court relied on the presumption that the defendants were preserving all relevant documents of every descrip-tion. It only came to light recently that such was not the case.

In the past two years, Boehringer has faced mounting litigation tied to the drug, which won U.S. Food and Drug Administration (FDA) approval in October 2010 to reduce clotting risks in patients with atrial fibrillation not caused by a heart valve problem. Drug users who claim they experienced bleeding events and other injuries began filing federal lawsuits as early as March 2012, after a study in the Archives of Internal Medicine linked Pradaxa

with an increased risk of heart attack com-pared with other anti-coagulants.

The FDA launched an inquiry into Pradaxa in December 2011, saying it would investigate whether reports of bleeding in patients taking the drug are occurring more commonly than would be expected based on clinical trial data f rom it s premarket approva l process. However, the agency concluded in November 2012 that bleeding rates for new Pradaxa users “do not appear to be higher than bleeding rates associated with new use of warfarin,” a pre-existing drug widely used to treat atrial fibrillation. The FDA said it would not alter its recommendation regarding Pradaxa. In July, Judge Herndon refused to dismiss one case in the MDL, brought by Louisiana resident Mark Jackson, ruling the drugmaker hadn’t shown its labeling carried the necessary disclosures.

Source: Law360.com

merck settles FOsamax JaW-inJUry claims FOr $28 milliOn

Merck & Co. Inc. has agreed to pay $27.7 million to settle hundreds of lawsuits claiming its bone drug Fosamax caused a condition known as osteonecrosis of the jaw (ONJ). The settlement agreement includes the claims of about 1,200 plaintiffs in federal and state court. It comes after U.S. District Judge John Keenan ordered the parties to transfer 200 cases per month out of the multidistrict litiga-tion (MDL) and into their home courts. No such transfer had occurred when the settle-ment was reached.

Since the litigation began in 2005, seven bellwether trials have gone to verdict, with Merck winning five, according to the drug-maker. The company was hit with verdicts of $285,000 and $8 mil l ion, though Judge Keenan later slashed the larger award to $1.5 million. The settlement does not include alle-gations that Fosamax causes femur fractures. Those claims were centralized in New Jersey federa l cour t in separate mult idistr ict litigation.

The settlement agreement is contingent on a 100 percent participation rate. Plaintiffs lawyers must accept the settlement terms by Jan. 13 and deliver releases for 100 percent of the Plaintiffs by March 31. If they do not do so, Merck has the right to terminate the agree-ment. Plaintiffs must document that they have osteonecrosis of the jaw and that they used Fosamax. The Plaintiffs’ Steering Committee (PSC) is responsible for allocating the settle-ment among the eligible claimants. The $27.7 million figure includes attorneys’ fees and all the Plaintiffs’ medical liens.

After the final bellwether trial concluded earlier in 2013, the parties discussed how to


wind down the multidistrict litigation. The PSC proposed that Judge Keenan send 300 cases to their home courts every four months, an average of 75 cases a month. Merck pro-posed conducting case-specific fact discovery in the 100 oldest cases in a six-month period before transfers would occur. Ultimately, Judge Keenan decided to transfer the cases out of the litigation at an even faster pace than proposed by the Plaintiffs. The first transfers were originally scheduled to take place in November, but the judge delayed the deadline at the Plaintiffs’ request. If all Plaintiffs’ counsel do not agree to the deal, the cases could start being transferred in January.

The agreement includes neither the four bellwether cases currently on appeal nor claims against other manufacturers for similar drugs that allegedly caused osteonecrosis of the jaw. It also does not include already settled claims.

Source: Law360.com

X. AN UPDATE ON SECURITIES LITIGATION

the sec WhistleBlOWer laW

The Dodd-Frank Act was passed in July 2010, establishing the SEC Office of the Whis-tleblower in 2011. The program was designed by Congress to provide monetary incentives for anyone who has knowledge of fraudulent activities to step forward and report possible violations. The program protects individuals who report possible violations by prohibiting retaliation by employers against employees who provide information about those possible violations. Additionally, the Securities and Exchange Commission (SEC) is required by law to protect the confidentiality of whistle-blowers and cannot disclose any information that might reveal their identity.

The program entitles eligible whistleblow-ers to an award between 10 percent and 30 percent of the monetary sanctions collected in actions by the SEC. Eligible whistleblowers are individuals who voluntarily provide original information of a possible violation. Original information means that the information comes from your own knowledge or analysis. The information should not already be known to the SEC either through public knowledge or from another individual. The violation could have occurred in the past, be currently occur-ring, or about to occur. The information pro-

vided must lead to a successful action of more than $1 million to be eligible for an award.

According to the SEC’s Office of the Whis-tleblower’s Annual Report, fiscal year 2013 has been a huge success. SEC’s Office of the Whistleblower gave out more than $14 million in awards to whistleblowers who contributed to the success of the agency’s enforcement actions. This year, the Office handed out its largest award since its establishment for $14 million. This award was to a whistleblower who gave information leading to an enforce-ment action that recovered substantial inves-tor funds.

On Oct. 30, 2012, the SEC announced that it was awarding another whistleblower more than $150,000, an amount representing 30 percent of the money collected by the agency. This award is the sixth whistleblower to be awarded through the SEC’s whistleblower program since its establishment. The whistle-blower’s information led to the agency suc-cessfully stopping a scheme from continuing to defraud investors. The whistleblower pro-vided information that led the SEC to quickly shut down the ongoing fraud and wishes to remain anonymous. This award shows the momentum of the program and that it contin-ues to serve the agency’s goal to stop ongoing fraud.

Lawyers in the Consumer Fraud Section at Beasley Allen continue to investigate fraud against both the federal and state govern-ments and encourages anyone who knows of fraudulent activities to step forward. Potential whistleblowers have the right to not be retali-ated against for doing the right thing and reporting the fraud they have witnessed. Anyone considering doing the right thing and blowing the whistle are strongly urged to seek legal advice before doing so. Lawyers at Beasley Allen are very familiar with the federal False Claims Act and the SEC Whistle-blower Program and can guide whistleblowers along the process. If you have any information and would like to speak with a lawyer, contact Chad Stewart, Archie Grubb, Andrew Brashier or Larry Golston, lawyers in our Consumer Fraud Section, at 800-898-2034 or by email at Chad.Stewart@beasleyal len.com, [email protected], [email protected] or Larry.Golston@beasley allen.com.

Sources: www.SEC.gov

dOes the BUsiness JUdGment rUle apply tO Bank directOrs and OFFicers?

Judge Thomas Thrash, a veteran federal judge in the Northern District of Georgia, recently released a most interesting opinion involving the application of the business judg-

ment rule to directors and officers of a failed bank. The case was brought in November 2012 by the FDIC as receiver of The Buckhead Community Bank. The FDIC’s complaint alleged that the bank’s former directors and officers were negligent and grossly negligent in carrying out their duties. The complaint asserted that the defendants engaged in “numerous, repeated, and obvious breaches and violations of the Bank’s Loan Policy, underwriting requirements and banking regu-lations, and prudent and sound banking prac-tices,” including 13 loans in particular that cost the bank more than $21.8 million.

The defendants moved to dismiss the negli-gence claim on the basis that bank directors cannot be held liable for ordinary negligence under Georgia’s business judgment rule. Judge Thrash refused to dismiss the case, however, writing in his Nov. 25, 2013, opinion: “There is every reason to treat bank officers and directors differently from general corporate officers and directors. In general, when a busi-ness corporation succeeds or fails, its stock-holders bear the gains and losses…. But when a bank, instead of a business corporation fails, the FDIC and ultimately the taxpayer bear the pecuniary loss. The lack of care of the officers and directors can lead to bank closures which echo throughout the local and national economy. To some extent, the failure of bank officers and directors to exercise ordinary care led to the very financial crisis that contin-ues to affect the national economy.”

Judge Thrash was “not convinced that Georgia law affords the Defendants the pro-tection of the business judgment rule in a lawsuit by the FDIC.” He certified to the Georgia Supreme Court the question whether the business judgment rule should be available to the bank’s directors and officers in this case. He also denied the defendant’s motion to dismiss the allegations that the directors and officers were grossly negligent. The Georgia Supreme Court’s decision will certainly have an impact on efforts to pursue claims against directors and officers of failed banks.

Lawyers at Beasley Allen who work in the firm’s Consumer Fraud Section continue to handle claims against banks, as well as claims against corporate directors and officers, who are typically covered by special “D&O” insur-ance coverage. If you need more information on this subject, contact Archie Grubb, a lawyer the Section, at 800-898-2034 or by email at [email protected].

Source: http://www.dandodiary.com, blog post on 12/3/13 by Kevin LaCroix


XI. INSURANCE AND FINANCE UPDATE

pennsylVania cOUrt says General liaBility pOlicy cOVers tOrts

The Pennsylvania Superior Court took an expansive reading of insurers’ obligations to commercial policyholders in a December ruling, concluding that a general liability cov-erage provider is required to defend product liability claims. The appeals court reversed a trial court ruling granting summary judgment to National Union Fire Insurance Co. of Pitts-burgh, Pa., concluding that a series of lawsuits filed against door and window manufacturer Indalex Inc. triggered the company’s insur-ance policy.

The three-judge panel found that because the company’s defective products allegedly led to other damaged property as well as per-sonal injuries, these counted as “occurrences” under the policy. “Simply stated, because appellants set forth tort claims based on damages to persons or property other than the insured’s product, we cannot conclude that the claims are outside the scope of the coverage,” Judge Jacqueline Shogan said in the opinion. Inadlex sued its insurer in the Allegh-eny County Court of Common Pleas in 2007, arguing that it was entitled to coverage under its commercial umbrella policy. There have been multiple out-of-state lawsuits filed by homeowners and property owners against the company. It’s claimed that design and manu-facturing defects in the company’s doors and windows led to mold and cracked walls along with personal injuries.

National Union responded that under Penn-sylvania law, there were no “occurrences” that triggered the policy, and in 2012, the trial court agreed, dismissing Indalex’s claims. The company then appealed, arguing the trial court had improperly relied on an earlier Pennsylvania Supreme Court case, Kvaerner Metals Division of Kvaerner U.S. Inc. v. Com-mercial Union Insurance. Co. In that case, the Supreme Court ruled that because a com-plaint about a product had alleged that faulty workmanship had damaged the product itself, it did not trigger an insurance policy.

Indalex, however, argued that its case was distinct from the Kvaerner case because the f lawed workmanship to the doors and windows caused damages elsewhere. The Superior Court ultimately agreed, concluding that these damages qualified as an “occur-rence.” In doing so, the court specifically rejected the application of the “gist of action” theory to bar tort claims in insurance cover-

age disputes. In Pennsylvania law, the doc-tr ine serves to prevent Pla inti f fs f rom reshaping breach of contract claims into tort claims. Judge Shogan wrote in his order:

Ultimately, because the gist of the action doctrine has never been adopted by our Supreme Court in an insurance coverage context, we are convinced that, at this juncture of a duty to defend claim, applying the gist of the action doctrine is inappropriate.

It would appear, based on the existing case law in Pennsylvania, that coverage under a lia-bility insurance policy of the sort involved in this case should be afforded by the carrier.

Source: Law360.com

traVelers cOntends that claims nOt time-Barred in pFiZer laWsUit

Travelers Indemnity Co. has asked a federal judge not to dismiss its $47 million lawsuit filed against Pfizer Inc., contending that the claim is not time-barred. The suit involves the epilepsy drug Neurontin and the drugmaker’s alleged anti-competitive efforts and aggressive marketing of off-label uses. Travelers, the St. Paul Fire and Marine Insurance Co., and the Standard Fire Insurance Co. alleged in their complaint that because of Pfizer’s deceptive marketing to physicians, the insurers have overpaid millions in connection with workers’ compensation claims arising from injuries caused by uses for which the U.S. Food and Drug Administration (FDA) had not approved Neurontin.

Pfizer, in a motion for judgment on the pleadings, claimed that the insurers’ claims are substantively identical to multiple lawsuits that have been consolidated in a Massachu-setts multidistrict litigation (MDL), and are time-barred. Pfizer said in a statement:

Travelers, one of the nation’s largest and most sophisticated insurance com-panies, chose to wait until 2012 to bring suit over allegedly improper marketing and promotion of the medication Neu-rontin (gabapentin), which it affirma-tively alleges began ‘as early as 1990.’

It should be noted that neither Travelers’ marketing, nor its antitrust allegations, are new. Travelers’ marketing allegations are similar to off-label marketing allegations first made in a 1996 qui tam lawsuit, which was unsealed on Dec. 21, 1999. Pfizer said that by 2004, numerous insurers, union health insur-ance funds, and workers’ compensation pro-viders had brought similar suits, alleging that Pfizer engaged in the illegal promotion and sale of the drug Neurontin for off-label use.

These cases were ultimately consolidated in a multidistrict litigation. Pfizer said Travelers’ misrepresentation, consumer protection, and unjust enrichment claims are all barred by Connecticut’s three-year statute of limitations. Travelers said in its memorandum filed in opposition to Pfizer’s motion:

First, the plaintiffs’ claims are not time-barred because the defendants’ admit-t ed l y f rau du l e n t m a r ke t ing o f Neurontin from 1996 to at least 2004 constitutes a continuing course of conduct that tolled the applicable stat-utes of limitations.

The insurers said that the pendency of the request for class certification in the Massachu-setts marketing MDL, which was initiated in May 2004, and is yet to be decided, tolled the applicable statute of limitations under the Supreme Court’s 1974 decision in American Pipe & Construction Co. v. Utah. In that case the high court ruled that the pendency of a class action tolls the statute of limitations for all potential class members until a final deci-sion on the request for class certification. The insurers contended:

In this case, there is not a final deci-s ion—with respect to third -party payors, such as the plaintiffs—because the First Circuit reversed the denial of class certification.

Travelers is also taking the position that Pfizer is attempting to do something it cannot do at this stage. The insurers claim it’s too early to decide whether the causes of action are time-barred because there are substantial, unresolved questions of fact relevant to whether Connecticut law governs some, or all, of their claims; Pfizer’s continuing course of conduct; and tolling under the American Pipe doctrine.

The insurers said that although the parties are not close to completing discovery, Pfizer would have the court decide that Connecticut law governs their claims, even though there are unresolved facts to be developed through discovery that may establish a more signifi-cant relationship with other states and thus require the application of the law of those states to some, or all, of the insurers’ claims. Neurontin is approved by the FDA to treat sei-zures and, as of 2004, chronic debilitating pain caused by shingles, according to the suit. But Pfizer markets Neurontin to treat injuries like back strains, bone fractures, carpal tunnel syndrome, sprains, dislocations, contusions, punctured lungs, slipped disks and hernias, according to Travelers’ suit.

Travelers also accused Pfizer of failing to advise health care professionals and the public of serious side effects associated with the


drug, including suicidal behavior, paranoia, memory loss, hostility, depression, drowsiness and nausea.

Sources: Juan Carlos Rodriguez and Law360.com

XII. EMPLOYMENT AND FLSA LITIGATION

Wal-mart cOntractOr Will pay $4.7 milliOn tO settle WOrkers’ laWsUit

A Wal-Mart Stores Inc. contractor has agreed to pay $4.7 million to settle a lawsuit filed by 568 Southern California warehouse workers who said they were underpaid and denied rest and meal breaks. A federal judge has approved the settlement between Schnei-der Logistics and employees at its warehouse in Mira Loma. Wal-Mart paid Schneider Logis-tics to operate the warehouse, which handled merchandise sold in Wal-Mart stores.

The lawsuit, filed in March 2012, alleged that Schneider Logistics shorted employees on overtime and regular pay and denied them rest and meal breaks to which they were legally entitled for five years. Guadalupe Palma, director of Warehouse Workers United, had this to say:

We are pleased that hundreds of workers who move merchandise in Wal-Mart’s largest warehouse complex in the western United States have won back $4.7 million in stolen wages owed to them for years of honest work.

The brave workers who came forward to expose a deep pattern of abuse and fraud in Wal-Mart’s largest contracted facility risked their jobs and their livelihoods, but today they are vindicated.

Wal-Mart was not a defendant in this lawsuit. The workers alleged in the lawsuit filed against Schneider Logistics that its man-agers routinely changed employee time cards to deny them pay they had earned. A second worker lawsuit against Schneider was filed and is still pending. Wal-Mart is named as a defendant in that case.

Source: Los Angeles Times

Fast FOOd Giants explOit tax lOOphOle

A tax loophole netted top fast food chains an extra $64 million in the past two years. When Congress placed a $1 million cap on the amount of executive pay that could be tax-deductible, lawmakers created an exception

for “performance” pay. “This loophole quickly led to an explosion of ‘performance-based’ compensation, particularly stock options,” according to Sarah Anderson, who directs the Global Economy Project at the Institute for Policy Studies. She tallied more than $183 million in fully deductible “performance” compensation lavished on the CEOs of the six top publicly held fast food corporations in the previous two years. Had that cash been fully taxed, Ms. Anderson estimates, another $64 million would have landed in government coffers rather than corporations’. In contrast to their lavish CEO compensation packages, the fast food industry is notorious for the low wages paid to workers in their stores. Many of the fast food workers have to turn to taxpayer-funded anti-poverty programs in order to just to get by. The National Employment Law Project estimates that workers for one of the top fast food corporations draw nearly $650 million in Medicaid and other public assis-tance annually.

Source: Institute for Policy Studies

Fast FOOd WOrkers’ strike is JUstiFied

Last month, more than 100 fast food workers in Detroit picketed outside restau-rants singing “Hey hey, ho ho, $7.40 has got to go!” One-day labor walkouts were planned at fast food restaurants in 100 cities, with pro-tests in scores more cities and towns across the nation. Organizers are pushing for an increase in the federal minimum wage and higher wages in the industry. An advocate for income equality says he is encouraged by the nat ionwide ef for t but i sn’t expect ing major changes.

Recently, Pope Francis and President Obama have each spoken out against growing income inequality. The President expressed support for a Democratic proposal to raise the minimum wage to $10.10 per hour. Despite the growing concern surrounding economic disparities, the pushback against the increase is strong. Fast food is a price-sensitive busi-ness and the industry claims it would be diffi-cult to significantly increase wages. Labor Secretary Tom Perez weighed in on the side of the protesters in his blog, stating:

To reward work, to grow the middle class and strengthen the economy, to give millions of Americans the respect they deserve—it ’s time to raise the minimum wage.

Hopefully, Congress wil l increase the minimum wage. It’s the morally correct thing to do. But based on past history, it will be a

very tough battle. I believe it’s one that we can ill-afford to lose.

Source: USA Today

XIII. PREMISES LIABILITY UPDATE

JUry aWards $39 milliOn in Fatal WiscOnsin GaraGe panel Fall

You will recall that we wrote in a previous issue about the collapse of a Milwaukee parking garage panel. Now a jury has found the manufacturer of the panels, Advance Cast Stone, mainly responsible for the collapse that killed a teenager and injured two others in 2010. A total of $39 million in damages was awarded to the Plaintiffs. The jury found that Advance Cast Stone intentionally concealed and misrepresented a defect or deficiency in its installation of concrete panels at the Mil-waukee County-owned O’Donnel l Park parking garage.

Fifteen-year-old Jared Kellner was killed when one of the 13-ton panels fell, hitting him. Amy Wosinski and her son Eric, who also was 15, were injured. Due to her injuries, Ms. Wosinski’s left leg was partially amputated. Eric suffered a broken leg and lacerations to his head.

Testimony during the trial focused on the way a panel was attached by the Random Lake company, with two, rather than the pre-scribed four, steel connecting rods and other deviations. Throughout the trial, Advance Cast Stone insisted it was given permission to use the alternate method to install the panel, which later failed. Advance also argued that Milwaukee County failed to properly maintain the panel and that vehicles banging into the panel over its nearly two decades caused it to dislodge.

The jurors found that the Kellner and Wosinski families were entitled to compensa-tory damages consisting of pain and suffering, medical costs, lost earnings and other losses. The jury awarded $6.3 million to the estate of Jared Kellner for the pain and suffering he endured in the seconds before he was crushed. The jurors awarded $1.5 million each to Eric Wozinski and his parents for emotional distress they suffered. The jury awarded $15 million in punitive damages. The jury also awarded $6 million to Milwaukee County for repairs to the O’Donnell Parking structure and for lost revenue for the months it was closed.

The jury found Advance Cast Stone 88 percent responsible. J.H. Findorff & Son, the


construction manager on the project, was found to be 10 percent at fault. That left the county at 2 percent. Incidentally, Findorff had previously settled with the Plaintiffs.

Source: The Milwaukee Journal Sentinel

tahOe ski resOrt settles sUit OVer chairliFt death

A lawsuit filed in a California court by a family against a Lake Tahoe ski resort and other companies over the death of a man who fell from a chairlift has been settled. The amount of the settlement is confidential. The family of 51-year-old Mark Dickson settled the wrongful death suit, which was pending in El Dorado Superior Court, after a settlement con-ference. As part of the settlement, in addition to the monetary payment, the owners of Heav-enly Mountain Resort agreed to make various safety improvements, including regular equip-ment inspections and shutting down the ZipRider line in high winds. Dickson was killed in August 2009 after falling from Heav-enly’s chairlift, which became entangled with a rope retrieval line from the zip line ride.

Source: The Sacramento Bee

XIV. WORKPLACE HAZARDS

$281 milliOn WrOnGFUl death Verdict in texas

A Texas jury returned a $281 million judg-ment last month against Heckman Water Resourses, a subsidiary of Nuverra Environ-mental Solutions Inc. The jury found a drive shaft had broken off a poorly maintained truck owned by the oil f ield service company, causing a man’s death. The Dimmit County jury awarded $181 million in compensatory damages and $100 mi l l ion in punit ive damages to the family of Carlos Aguilar, who was killed when he was hit by a drive shaft that had snapped off a tractor-trailer owned by Heckmann Water Resources. The big rig was traveling down a road near the Eagle Ford Shale at the time of the incident.

Nuverra, an environmental solutions company that until last May was known as Heckmann Corp., bills itself as one of the largest companies dedicated to the removal, treatment and disposal of oil field develop-ment byproducts on behalf of companies operating in major shale plays throughout the U.S. Heckmann Water Resources operates

fleet, real property and disposal wells in the Eagle Ford, Barnett, Permian, Mississippian L ime, Haynesvi l le and Marcel lus/Utica shale basins.

The Aguilar family filed a wrongful death suit against Heckmann Water Resources and Ruben Osorio Hernandez, the man driving the truck, when the May 2012 accident occurred. It was alleged that the semi was not properly maintained, which led to the drive shaft failure. When the drive shaft fell out from underneath Heckman Water Resources’ truck as it was being driven down a highway in Dimmitt County, the part careened through the windshield of the pickup truck Aguilar was riding in, killing him.

Heckmann Water Resources and Hernandez were cleared of any criminal wrongdoing. But the jury in the civil case found that the company was guilty of negligent conduct. Jurors determined that Hernandez was not at fault for the accident. The Aguilar family is represented by Ronald Rodriguez, a lawyer from Laredo, Texas. He has done a very good job in this case.

Source: Law360.com

illinOis rOOFinG cOmpany Fined $158,000 FOr saFety haZards

Affordable Roofing and Exteriors Inc., located in Trenton, Ill., has been cited by the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) for five safety violations, carrying proposed pen-alties of $158,015. The citations follow inspec-tions at three job sites where workers were improperly using fall protection during the installation of shingles on residential roofs, according to OSHA. Since 2009, the company has been cited in five inspections for similar violations.

Residential job sites were inspected July 15 in Granite City. On June 27, an inspection took place in Bel levi l le. On May 16, another inspection occurred at another location in the 200 block of Dodge in Belleville. At each job site, a willful violation was cited for failing to ensure workers used fall protection while per-forming residential roofing. The inspections were initiated under the national emphasis program for fall safety. Two serious violations were cited at the Belleville job site for failing to provide eye protection to workers who used pneumatic nail guns and provide a ladder to access upper landings safely.

Source: Claims Journal

cOnnecticUt metal plant hit With $112,000 in Osha saFety Fines

Federal labor officials have accused an auto-motive metal forging company in Plantsville, Conn., of health and safety violations involv-ing electrical hazards and inadequate training and safe work procedures. The Occupational Safety and Health Administration (OSHA) last month proposed fines of $112,068 against Rex Forge, a division of the JJ Ryan Corp. OSHA says the safety violations included the use of an extension cord instead of fixed wiring, and damaged electrical cords. The agency also cited electrical and fall hazards and a lack of adequate training and safe work procedures to protect workers on or near energized electri-cal equipment. Warren Simpson, OSHA’s director in Hartford, called the violations “prolific.”


eleVatOr cOmpany cited in stadiUm death in caliFOrnia

California safety officials have issued more than $50,000 in fines against an elevator company whose employee was killed while working at the San Francisco 49ers’ new stadium in Santa Clara. A 63 -year -old mechanic, Don White, was killed on June 11 when hit by an elevator counterweight. The state’s Division of Occupational Safety and Health cited Schindler Elevator Corp. for three serious violations, including its alleged failure to enclose counterweights in freight elevators with required guards. White was the first of two workers to die while working on the new $1.2 billion stadium, which is slated to open this year.


Osha Fines lOUisiana plant $99,000 FOr six saFety ViOlatiOns

The U.S. Occupational Safety and Health Administration (OSHA) has proposed fines of $99,000 against Williams Olefins for a June explosion at its plant in Geismar, La., that killed two workers and injured 80 others. OSHA cited the company for six process safety management standard violations, including one wil l ful. Process safety management encompasses detailed procedures employers must follow to address hazards with processes and equipment using large amounts of hazard-ous chemicals. In this case, OSHA says the vio-lators involved the use of propylene.



tysOn FOOds Fined $147,000 FOr saFety ViOlatiOns at kansas plant

Tyson Foods Inc. has been cited by U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) for four workplace safety violations at the Hutchinson, Kan., prepared foods manufacturing plant. A worker’s hand had been severed by an unguarded conveyor belt. Proposed fines total $147,000. OSHA began its inspection upon learning of the amputation, which occurred June 17 when four workers were cleaning con-veyor equipment at the end of their shift. Guarding on the conveyor was removed, exposing workers to rotating parts. A worker’s frock and the employee’s arm were then pulled into moving gears of a conveyor that had not been locked out to prevent uninten-tional operation. The two willful violations involved failing to train workers on lockout/tagout procedures and to lock out equipment to prevent the unintentional operation of equ ipment and exposu re to amputa -tion hazards.

One serious violation involved fall hazards when workers ascend the upper platform work area in two separate plant locations. The company failed to provide fixed stairs to reach the work areas. An other-than-serious viola-tion involves lack of legible markings on fork-lift levers. The Hutchinson plant has been inspected by OSHA five times in the past 10 years, resulting in seven violations.

Source: OSHA

XV. TRANSPORTATION

increases in inJUries and deaths FrOm cOmmercial trUck and BUs crashes

The number of highway deaths in the U.S. climbed in 2012 to 33,561—an increase of 1,082 from 2011—according to preliminary data released recently by the National Highway Tra f f ic Sa fety Administrat ion (NHTSA). The same data also showed that the number of deaths to occupants in large trucks increased substantially for the third consecu-tive year, up 8.9 percent in 2012. According to the NHTSA data, 697 large truck occupant fatalities occurred in 2012. But that rise was not as sharp as the 20-percent escalation that occurred in 2011, according to NHTSA, cau-tioning that the total number of highway fatal-ities remains at a historic low despite the upward trend. The last time the total number of highway deaths jumped was in 2005.

NHTSA reported that Americans drove roughly the same number of miles in 2012 as they did in 2011, so an increase in highway travel could not be to blame for the rise. Some commercial truck industry groups say that NHTSA’s figures for large trucks are mislead-ing because they include non-freight hauling trucks smaller than tractor trailers, which usually have higher crash rates than semis and other large commercial trucks. Despite any objections to terminology, however, the most current data released by the Federal Motor Carrier Safety Administration (FMCSA), also shows an upward trend in the number of large commercial truck and bus crashes, as well as the number of people killed and injured in those crashes.

FMCSA data show that commercial truck and bus crashes have risen steadily since 2009, as have the number of deaths and injuries resulting from those crashes. According to FMCSA records, in 2010, the number of deaths in large truck and bus crashes was 3,686 and 278 respectively, up from 3,380 and 254 in 2009. In 2011, 3,757 people were killed in large truck crashes and 283 in bus crashes. In 2012, 3,876 people were killed in commercial truck crashes and 263 people were killed in bus crashes. The number of injuries resulting from truck and bus crashes followed the same trend in those years.

In November, National Transportation Safety Board (NTSB) representatives called for an audit of the FMCSA after its investigations of two large truck crashes and two commer-cial bus crashes revealed that the agency knew that serious safety issued plagued the operators, but failed to keep them off the road. “Our investigators found that in many cases, the poor performing company was on FMCSA’s radar for violations, but was allowed to continue operating and was not scrutinized closely until they had deadly crashes,” said NTSB Chairman Deborah Hersman.

Julia Beasley, Kendall Dunson, Ben Baker, Chris Glover and Rick Morrison, lawyers in our firm’s Personal Injury/Products Liability Section, focus on personal injury and product liability cases involving 18-wheelers, heavy trucks and buses. If you have a question about these kinds of cases, one of these lawyers will be happy to help. They can be contacted at 800-898-2034 or by email at [email protected]; Kendall.Dunson@beasley al len.com; Ben.Baker@beasleyal len.com; Chris.Glover@beasleyal len.com or R ick. [email protected].

Sources: National Highway Traffic Safety Administration; Federal Motor Carrier Safety Administration, Commercial Motor Vehicle Facts—March 2013; Federal Motor Carrier Safety Administration, Motor Carrier Safety Progress Report (as of June 30, 2013); Commercial Carrier Journal

asiana pilOt in caliFOrnia crash may haVe Been cOnFUsed

It appears that an Asiana Airlines Inc. pilot, nervous about making a manual landing in San Francisco, inadvertently disabled a speed-con-trol system before the plane crashed in July of last year. Captain Lee Kang Kuk, a veteran pilot with Seoul-based Asiana, was being trained on the Boeing Co. 777-200ER wide-body. Newly released documents show that the pilot momentarily adjusted the power without realizing the plane’s computers then assumed he wanted the engines to remain at idle. The information released by the U.S. National Transportation Safety Board (NTSB) is quite disturbing.

The documents, released at the start of a hearing into the first U.S. fatal airline crash since 2009, raise new questions about how the auto -throttles on Boeing planes are designed and whether pilots are adequately trained on how to use them. The safety board hasn’t made a final decision on what caused this accident. The pilot told investigators the approach “was very stressful, very difficult.” He wasn’t accustomed to landing without an instrument-landing system guiding him to the runway, as pilots had to do in San Francisco that day because of airport construction, according to an NTSB summary of h is statement.

In most modes of operation, the speed-pro-tection system on the 777 and several other Boeing aircraft won’t allow planes to slow too much, protecting against accidents such as the Asiana crash. The plane, on the verge of losing lift because it was almost 40 miles (64 kilome-ters) an hour slower than its target speed, slammed into a seawall short of the runway and broke apart. Three teenage girls died in the crash. In some combinations of auto-throt-tle and autopilot settings, such as during Asiana Flight 214’s approach to San Francisco, the system becomes dormant, according to NTSB documents.

There have been safety concerns from the Federal Aviation Administration (FAA) and the European Aviation Safety Agency. An FAA study released in November 2013 found that pilots’ growing reliance on automation in the cockpit has led to occasional confusion and new safety risks. Autopilots, automatic throt-tles and computerized navigation systems have helped improve safety in recent decades, the FAA study concluded. But the price for that is occasional confusion because the systems, which sometimes interact with each other, may be improperly set or act in ways that crews don’t anticipate, the study said. Pi lots accustomed to having automation handle mundane flying tasks, according to the


repor t , may a l so lose ba s ic ma nu a l flying skills.


lOW airspeed Blamed FOr 2012 crash in OreGOn

According to the National Transportation Safety Board (NTSB), a plane crash that killed four people near Veneta, Ore., in 2012 was likely caused by the pilot’s failure to achieve adequate airspeed and altitude to clear trees shortly after takeoff. The probable cause report says the plane was traveling slowly after its throttle control had been shifted into an idle position as the single-engine craft made its initial climb.

Investigators found no evidence of mechan-ical malfunction in the crash that killed the pilot and his three passengers. The four had volunteered to work at the Oregon Country Fair, the outdoor festival held each summer on property just east of where the plane crashed. This appears to be a classic example of pilot error that resulted in a disaster.

Sources: The Register-Guard and Claims Journal

plane-crash laWsUit settled aGainst tUpelO airpOrt aUthOrity

The family of David Duncan, a pilot who died in 2011 when a twin engine Cessna 310 he was flying crashed at the Tupelo airport, has settled their lawsuit filed against the city aviation authority. The terms of the settlement are confidential. The pilot’s two daughters filed suit in January in Lee County, Miss., alleg-ing that the airport authority was guilty of negligence.

David Duncan, 69, who was killed on Aug. 17, 2011, when the Cessna twin-engine air-plane he had just piloted from Tupelo Regional Airport suddenly banked to the left about 400 feet above the ground and crashed into a tree near a residence. The plane had just been worked on by Tupelo Aviation Unlimited, the airport’s fixed base operator.

According to a report by the National Trans-portation Safety Board (NTSB), there was a loose nut on a fuel line on the airplane. The NTSB report says anti-tamper putty around the nut was broken and that the broken putty indicates that a nut has been loosened—pur-posely or by causes like vibration. A mechanic told NTSB investigators he had tightened the nut to proper torque, but didn’t have anti-tam-per putty to put around it. The report con-cluded that the crash’s probable cause came from the mechanic’s failure to follow normal procedures to install a fuel line to the plane’s

engine. This failure caused the engine to quit and the plane to crash.

Duncan’s daughters, Dana and Lisa, filed suit on Jan. 25, 2013, in Lee County, claiming negligence on behalf of the airport authority. In talking about the litigation, their lawyer criticized Mississippi’s caps on these types of lawsuit awards, saying the law treats victims’ families “like second-class citizens” by putting an arbitrary value on their loved-ones’ lives. John Booth Forese, a lawyer with the firm Fraese, Farese & Farese, based in Ashland, Miss., represented the family. He did a very good job in this case.

Source: The Northeast Daily Journal

helicOpter crash laWsUit settled

A settlement has been reached in a lawsuit filed by the family of a Tennessee soldier who died in a helicopter crash in Iraq. Before the settlement can be final, it will have to get final approval from a judge. The family of Capt. Marcus Ray Alford of Knoxville, Tenn., a member of the Tennessee National Guard, filed suit against government contractor Bell Helicopter Textron Inc. and other companies that supplied parts for the Kiowa OH-58D Warrior helicopter that crashed in 2010. Capt. Alford and 25-year-old Chief Warrant Office 2 Billie Jean Grinder, another Tennessee resi-dent, died in the crash. The Grinder family has also filed suit and that case was still pending at press time.


laWsUit Filed aGainst FlOrida BilliOnaire in Bahamas crash

A lawsuit asking $100 million in damages has been filed against a Florida billionaire for a 2012 helicopter crash in the Bahamas that killed a prominent tax lawyer. The widow of Lance Valdez, the lawyer, filed the wrongful death suit last month in Miami federal court against real estate magnate Jeffrey Soffer. He owns the Fontainbleau Hotel in Miami Beach and is CEO of the Turnberry Associates real estate empire. The lawsuit alleges that Soffer was piloting the helicopter in November 2012 when it crashed during a landing attempt at Baker’s Bay Golf & Ocean Club on Great Guana Cay, killing Valdez.

Soffer was licensed at the time to fly fixed-wing aircraft, but not helicopters, the lawsuit says. It’s alleged that he was flying the aircraft even though there was an experienced heli-copter pilot on board. The lawsuit states:

He (Soffer) was recklessly f lying and controlling the helicopter at the time of

the helicopter crash without an up-to-date and valid helicopter pilot’s license. Sof fer and four others survived the crash.

Just before the ill-fated landing attempt, the lawsuit says that Soffer flew over a golf course “and pointed out his house and yacht.” The helicopter was a few feet off the ground when it suddenly encountered wind turbulence, jerked back some 75 feet and crashed with the tail section striking first, according to the lawsuit. The lawsuit claims Soffer and others covered up the fact that he was at the con-trols. It was reported that Valdez’s widow, Daria Pastouhkova Gogoleva, and their three minor children would be limited to a $2 million liability insurance payment. Other-wise, Soffer would be held personally liable for any damages awarded more than $2 million.

The lawsuit alleged that a still-grieving Gogoleva was pressured to sign a release stating that she would not take legal action against Soffer or anyone else aboard the heli-copter. It says she was falsely told that the licensed helicopter pilot, David Pearce, was the one at the controls when it went down. The lawsuit says:

Despite being responsible for the loss of his friend, Soffer repeatedly lied to and intentionally deceived Daria about his involvement in the crash in an effort to persuade her to pursue an insurance r e c ov e r y ra t h e r t ha n a c l a im against him.

This should be a most interesting lawsuit because of the parties and the facts alleged, which, if true, would clearly inflame a jury. Stay tuned!


nhtsa tiGhtens crash test adVertisinG rUles

The National Highway Traffic Safety Admin-istration (NHTSA) is tightening the guidelines that control how automakers use government crash tests in advertising. It appears that the changes made by the FDA were aimed at Tesla Motors, a company that has been in the news lately. Tesla has promoted its electric Model S as the safest car in America, saying it earned a 5.4-star rating from the government.

The new guidelines say that NHTSA doesn’t give ratings higher than five stars. The agency says automakers who claim ratings higher than five stars are misleading the public. Com-panies that don’t follow the guidelines could see “buyer alert” warnings from the govern-ment. Violaters could also be kicked out of the


ratings program or be referred to other agen-cies for further, unspecified action.


JUry retUrns a $10 milliOn Verdict in Fatal crOssinG crash sUit

An Oklahoma state court jury on Dec. 15 returned a verdict against Burlington North-ern Santa Fe Railway Co. The case involved the death of a man who was struck by a train while crossing tracks in his vehicle. The jury found BNSF to be 65 percent responsible for the fatal crash, and apportioned 35 percent responsibility to the victim. A total of $14.8 million was awarded. BNSF will be responsi-ble to pay $2.6 million. Nye was killed when a BNSF train struck his Jeep on Dec. 29, 2008.

The crash occurred at about 5 p.m. and the main issue was whether vegetation obscured Nye’s vision along the gravel road that crossed the tracks as well as on the right of way of the tracks themselves. The vegetation would have made it hard for Nye to see the train and vice versa. The lawsuit also alleged the train crew didn’t blow the horn as they were supposed to. That was disputed by BNSF. A passenger in Nye’s Jeep testified that he didn’t hear a horn. The train’s event recorder did not show a horn being sounded. But that also was disputed by the railroad.

The family alleged that BNSF should have installed f lashing lights and gates to ade-quately warn the public of all approaching trains. The railroad argued it shouldn’t have to install those safety features at that particular crossing. The family said it brought this case in order to hold BNSF accountable and hope-fully prevent any future tragedies at danger-ous railroad crossings. Nye was a football coach and science teacher for Sulfur High School in Sulfur, Okla.

Nye’s family is represented by Grant L. Davis and Thomas C. Jones of Davis Bethune & Jones, a firm located in Kansas City, Mo. They did a very good job in the case which was tried in the Pontotoc County District Court in Ada, Okla.

Source: Law360.com

neW mexicO JUdGe aWards estate $80 milliOn in sUFFOcatiOn death

A judge has awarded nearly $80 million to the estate and family of a woman who suffo-cated in 2002 when her car was buried by sand after being struck by a tractor-trailer truck. District Judge Shannon Bacon entered the judgment in favor of the estate of Laura Miera and the 48-year-old woman’s husband

and daughter. The judgement includes $60 million of punitive damages.

Judge Bacon entered the judgment against Albuquerque Redi-Mix and another company and owners, John and Barbara Quintana. It was an Albuquerque Redi-Mix truck that crashed into Ms. Miera’s car after exiting an interstate highway. The Quintanas had denied violating any state or federal regulations and said the accident and injuries it caused resulted from the action of others.

Source: Albuquerque Journal

laWsUit settled OVer 2007 cOnnecticUt Van drOWninG

The families of a woman and three children who drowned in 2007 when a van rolled into a pond in Bridgeport, Conn., have settled their lawsuit against the dealership that sold the van. The van was parked when it began rolling down a hill. Michelle McIntosh ran after the van, but couldn’t stop it before it went into the water. She drowned, along with the children inside the van. An investigation determined one of the children had shifted the transmis-sion into drive.

In 1999 most car companies had installed a safety device to prevent the transmission from being shifted into drive without the brake being depressed. But the 1999 Plymouth Grand Voyager in this case was sold without that device. The children who died were Ms. McIntosh’s son; David Jr., 2; Jayden Wilson, 6, her nephew; and 2-year-old Julia Boyd, the daughter of a family friend.

The terms of the settlement with the Loman Auto Group of Woodbridge, N.J., are confiden-tial. The Plaintiffs had offered to settle the case for $15.5 million. There was no lawsuit filed against the car company, because Plym-outh had gone bankrupt. The dealership that sold the van was sued. After the drowning deaths, the city installed a rail barrier along the road above the pond where the acci-dent happened.

William M. Bloss, with Koskoff, Koskoff & Bieder, in Bridgeport, Conn., represented the McIntosh family. Peter M. Dreyer, with Silver Golub & Teitell in Stanford, Conn., repre-sented the Boyd family. Each of these lawyers did a very good job in this very sad case.

Source: The Connecticut Post and Claims Journal

JUry aWards WOman $31.9 milliOn in caliFOrnia BUs-trUck crash

A jury in Sacramento County, Cal i f., awarded $31.9 million to a woman who was paralyzed and suffered brain damage in a 2010 traffic collision. The verdict requires the

defendant, Silva Trucking, to pay that amount to 56-year-old Debra Hackett. Ms. Hackett was driving an 18-passenger bus on Highway 12 about 30 miles south of Sacramento when she collided with a tractor-trailer unit coming from the opposite direction that had jack-knifed in front of her.

Ms. Hackett was made a paraplegic. She suf-fered skull and facial fractures and a traumatic brain injury in the crash. Her husband was awarded $3 million by the jury. Silva Truck-ing, which employed the truck driver, didn’t dispute liability. As a result, the trial was held only to determine the amount of the verdict.

Sources: Claims Journal and The Sacramento Bee

laWsUit Filed aGainst tOyOta

A family involved in a triple fatal crash that happened two years ago has filed suit against Toyota, saying the carmaker’s FJ Cruiser lacked a proper impact-management system, which caused it to burst into f lames. The head-on crash occurred March 22, 2011, about three miles west of Hesperus on U.S. Highway 160 near Durango, Texas. Leslie McDonald and her son Kellen McDonald, then 12, each suffered burns to 60 and 70 percent of their bodies. Mrs. McDonald’s husband, Robert McDonald, and their other son Jaden, 10, were killed in the fiery crash.

David James Hooper, 51, also died in the crash. Hooper, who was under the influence of painkillers at the time of the accident, drifted across the double-yellow line and col-lided head-on with the 2008 Toyota FJ Cruiser. Both vehicles caught fire. It’s alleged in the complaint filed in federal court that a design f law caused a “catastrophic failure” of the vehicle’s fuel-storage management and deliv-ery systems. More specifically, it’s alleged that the 2008 FJ Cruiser’s impact-absorbing body structure and frame crumple zones did not operate properly and failed to provide the McDonald family with a reasonable degree of protection.

It’s alleged that when the two vehicles crashed head-on, the pickup truck’s drive shaft penetrated the Toyota vehicle’s fuel system, causing vapor and liquid gasoline to come into contact with a number of ignition sources and catch fire. It’s alleged further that Toyota had knowledge of the risk or should have had knowledge of the risk. The lawsuit seeks damages for the surviving family members, who have undergone great mental, physical and emotional suffering. Those Plain-tiffs allege they also have suffered permanent disability, have incurred extensive medical expenses, will continue to have expenses into the future and have experienced lost earnings.


Hooper was traveling westbound in a pickup truck when his vehicle crossed the center line and entered the eastbound lane. Both cars were traveling about 65 mph, the posted speed l imit, and coll ided almost directly head-on. Both vehicles caught fire and burned to their shells in the middle of the highway. Leslie McDonald and her son Kellen were able to exit the vehicle. Mrs. McDonald was on fire, and passers-by helped stabilize her and her son, according to law enforce-ment. Richard Hood, a Denver lawyer with Andrus Hood & Wagstaff, represents the Plain-tiffs in this case.

Source: DurangoHerald.com

cOUple Files laWsUit aGainst perry-Based GOlF cart dealership

A Florida couple has filed a lawsuit against a Perry-based golf cart dealership after the wife was left partially disabled following an acci-dent during the Thanksgiving holiday week two years ago. Danielle and John Pfeil of Arcadia, Fla., filed the lawsuit in federal court in Macon against Mike’s Golf Carts, a company located in Perry, Fla. Danielle Pfeil was seri-ously injured in the golf cart accident that hap-pened on Nov. 25, 2011, at Jewel Mint Plantation in Washington County. John and Danielle were gathered at a family reunion at the plantation for the holiday. Incidentally, John Pfeil’s parents manage the plantation.

The lawsuit alleges a golf cart modified by Mike’s Golf Carts malfunctioned, resulting in the golf cart overturning on Danielle Pfeil, who was driving it. The lawsuit states the front leaf spring of the modified golf cart snapped under normal driving conditions. Mrs. Pfeil was trapped and her leg crushed under the golf cart when it rolled over. She suffered severe and permanent injuries. It’s alleged that the land, roadway or terrain did not contribute to the golf cart overturning.

Mrs. Pfeil says her medical bills already have exceeded $375,000, and that she contin-ues to incur medical expenses and to suffer from a partial disability. Both compensatory and punitive damages are requested in the complaint. Mike’s Golf Carts, in its response to the suit, says it’s not responsible by “act or omission” for the accident or for any of the damages a l leged by the Plainti f fs. The response also alleges the accident was the result of Mrs. Pfeil’s failure to exercise “ordi-nary care for her own safety.” Jimmy Jordan, a lawyer with the firm Adams & Jordan, located in Macon, Ga., represents the Plaintiffs in this case.

Source: Macon.com

list OF 52 BUs cOmpanies that haVe Been shUt dOWn pUBlished

Federal bus safety regulators have shut down 52 companies in what they describe as a major nationwide crackdown on unsafe carri-ers. A state-by-state list of 49 companies that were shut down by the Federal Motor Carrier Safety Administration (FMCSA) is now avail-able. Interestingly, none of the companies on the agency’s list have reopened. There is also a list of three companies that the Federal Motor Carrier Safety Administration shut down, but have reopened. Those companies took correc-tive action and were allowed to remain in business. The lists are available from the FMCSA. Our firm also has the lists and will furnish them on request.

Source: Federal Motor Carrier Safety Administration

neW yOrk BOat pilOt Was drUnk in deadly crash

As usual, during the holidays there were a number of alcohol-related vehicle crashes that caused untold misery for families and friends of victims who were injured or killed in the crashes. Most all of the crashes involved cars and trucks and drunk drivers. But alcohol can also be a real problem on our waterways. Sometimes we forget that operators of boats and alcohol don’t mix any better on the water than they do on our highways. We wrote in a previous issue about two fatal ities that occurred in New York on the Hudson River.

A powerboat pilot who was involved in the Hudson River crash that killed a bride-to-be and her fiancé’s best man was drunk at the time. A criminal indictment has been made public that revealed the pilot was drunk. The indictment was against Jojo John, the pilot, who was among six people on the 19-foot Stingray when it crashed into a construction barge on the night of July 26. But it is being claimed by lawyers representing the pilot that poor lighting on the barge, not the pilot’s intoxication, caused the crash.

The crash threw two occupants, Lindsey Stewart and Mark Lennon, into the river and they both drowned. The pilot and three others, including the groom-to-be, were injured. Sadly, Ms. Stewart’s wedding was two weeks away. Among the 18 charges in the indictment are vehicular manslaughter, crimi-nally negligent homicide, vehicular assault and operating a vessel under the influence of alcohol or drugs. District Attorney Thomas P. Zugibe was absolutely correct when he said: “Drinking and driving is a lethal mix, as it appears to have been in this incident, which left several families shattered.” Lab tests showed John’s blood-alcohol content was 0.15

percent, nearly twice the legal level for boating. Tests also found “cocaine metabo-lites,” which are substances produced after t he b o d y br e a k s dow n co c a i ne , i n John’s system.

The parents of both victims also are blaming the lighting on the barge, which was part of pre-construction activity in prepara-tion for the building of a new bridge, as being the cause of the crash. The parents issued a statement—the day before Ms. Stewart’s funeral—saying they had spoken to survivors and “none of them saw the barge,” and that “they did not brace for impact and could not identi f y what they had hit—even af ter impact.” Investigators have said they are looking into whether the barge was prop-erly lighted.

It was reported that the Coast Guard and the state Thruway Authority, which is build-ing the bridge, said the barge was properly lighted. Interestingly, it has been reported that the Thruway Authority added lighting after the crash. We must make sure that people are made aware that drinking and driving on our waterways can result in deaths and serious injuries. The existing laws must be enforced and weak laws on the subject made stronger. The Hudson River incident is a good example of the tragic consequences that can occur when folks mix alcohol and operating a boat.


XVI. HEALTHCARE ISSUES

Fda pUshes tO cUrB antiBiOtic Use in liVestOck

The U.S. Food and Drug Administration (FDA) has advised manufacturers to stop indi-cating certain antibiotics for use as a growth aid in animal feed. The agency said the effects the practice can have on bacteria are harmful to human health. In final guidance to the ani-mal-drug industry, the agency also recom-mended that drugmakers require veterinary oversight for the use of the antibiotics to treat or prevent disease in animals. Companies are asked to make the changes voluntarily, as the guidance is not legally binding.

P ubl ic hea lth advocates have long expressed concern that the antibiotics used by producers to make cattle, poultry, hogs and other animals grow faster are making bacteria more resistant to treatment for illnesses and infections in people. FDA Deputy Commis-sioner Michael Taylor said in a statement:


Implementing this strategy is an impor-tant step forward in addressing antimi-c rob ia l r e s i s tance . T he FDA i s leveraging the cooperation of the phar-maceutical industry to voluntarily make these changes because we believe this approach is the fastest way to achieve our goal.

The FDA is currently locked in a battle with the Natural Resources Defense Counci l (NRDC) and other consumer groups about whether it should enforce a 1977 plan to pull certain antibiotics from the market.

The groups sued the FDA in 2011 after the agency formally shelved the plan, which was never implemented. A New York federal court ruled in August 2012 that the FDA must begin proceedings to withdraw approval of the anti-biotics, but that the agency could follow its own proposed t imel ine. The FDA has appealed that ruling to the Second Circuit Court of Appeals. Companies are supposed to notify the FDA as to whether they will follow the guidance within three weeks. They would then have three years to meet its tenets. Avinash Kar, a lawyer for the NRDC, called the guidance “an early holiday gift to indus-try” and a “hollow gesture.” He said:

FDA has essentially followed a volun-tary approach for more than 35 years, but use of these drugs to raise animals has increased. There’s no reason why voluntary recommendations will make a difference now, especially when FDA’s policy covers only some of the many uses of antibiotics on animals that are not sick.

The Animal Health Institute, a trade group for veterinary-drug makers, said it supported the policy. “It is important for consumers to know that within three years, all uses of medi-cally important antibiotics in animal agricul-ture will be only for therapeutic, or targeted, purposes under the supervision of a licensed veterinarian,” the group said in a statement. The drugs that fall under the guidance include amoxicillin, several penicillins and other anti-biotics the FDA considers important for treat-ing human infections.

Source: Law360.com

XVII. ENVIRONMENTAL CONCERNS

U.s. prOdUctiOn OF a danGerOUs chemical has stOpped

According to correspondence between the U.S. Environmental Protection Agency (EPA) and DuPont, the manufacture of perfluorooc-tanoic acid (PFOA) recently came to a halt—two years ahead of the 2015 deadline agreed to in the 2010/2015 PFOA Stewardship Program. It appears that DuPont, the sole manufacturer of PFOA in the U.S., stopped production, use, and import of the dangerous chemical in June of this year. The news that this compound will not be manufactured in the U.S . anymore i s a ver y pos i t ive development.

PFOA is a chemical compound in the perflu-orocarbon (PFC) family. It was used in hun-dreds of industrial and commercial products, including non-stick cookware, waterproof clothing, fire retardants, and insulation for electrical wiring and computer chip process-ing. PFCs are dangerous because they have been linked to pregnancy-induced hyperten-sion and preeclampsia, testicular cancer, kidney cancer, ulcerative colitis, thyroid disease and high cholesterol. These chemicals persist in the environment for long periods of time and have been found in blood samples of the general population in the U.S. and throughout the world.

Our team of lawyers in the Toxic Torts section at Beasley Allen has litigated cases in Minnesota, New Jersey and Alabama in efforts to curtail PFC contamination. The fact that PFOA will no longer be manufactured, used, or imported in the U.S. is an offshoot of their hard and dedicated work. If you need addi-tional information on this subject, contact Rhon Jones or Brantley Fry, lawyers in our Toxic Torts Section, at 800-898-2034 or by email at [email protected] or [email protected].

Sources: Bloomberg BNA Daily Environment Report

$1.1 BilliOn Verdict aGainst lead paint cOmpanies

A state Judge in Santa Clara County, Calif., has ordered three lead paint companies to pay $1.1 billion into a fund to be used to remove the lead in hundreds of thousands of homes in 10 cities and counties in California. The verdict came after 13 years of litigation and five weeks of trial. Judge James P. Kleinberg said that lead in paint, for which there is no

safe level of exposure for children, results in “thousands of children presently and poten-tially victimized by this chemical.” The coun-ties are San Francisco, Alameda, San Mateo, Santa Clara, Los Angeles, Monterey, Solano and Ventura, and the cities are Oakland and San Diego.

Mary Alexander, the lead lawyer who tried the case for the cities and counties, said that “this verdict will prevent lead poisoning of children from paint in their homes.” Clearly, it was a great victory for the people of Califor-nia. The Judge ordered Sherwin-Williams, ConAgra and NL Industries, formerly known as the National Lead Co., to pay $1.1 billion to establish a fund that the state will administer to remove lead paint from the homes in the 10 cities and counties. There are 4.7 million homes built before 1978 when lead paint was banned, of which 52 percent have lead paint.

Each year, thousands of children younger than 6 years of age are lead poisoned, most of them exposed to lead through lead paint in their homes. Lead paint deteriorates over time leaving paint chips and dust that gets on floors, window sills and toys to which young children are exposed. Lead poisoning causes damage to the brain and nervous systems of children and it is permanent and irreversible. The impact is particularly great in minorities and children living in poor housing. An inter-nal industry document by Sherwin Williams in 1900 described the paint ingredient white lead as a “deadly cumulative poison.”

In 1909, a California Supreme Court case held that ConAgra was responsible for lead poisoning in its own lead plant employees. Despite this knowledge the companies contin-ued to promote the sale of lead paint in the Cali fornia cities and counties. Ms. Alex-ander said:

This decision holds the companies accountable for promoting and selling lead paint for use in homes despite knowing, as far back as the 1890s, that it was highly toxic, especially to young children. This landmark decision recog-nizes the manufacturers must be held responsible and pay to clean up the hazard they created in homes.

Other lawyers for the Plaintiffs were Cotch-ett, Pitre and McCarthy; Motley Rice; the Law Offices of Peter Earle, and Danny Cho, Assis-tant County Attorney for Santa Clara. Danny Chou described the abatement ruling as a “huge victory for children in this jurisdiction.” These lawyers did a tremendous job in this case. I agree with their assessment of its impact.

Source: Law360.com


XVIII. AN UPDATE ON ARBITRATION

hyUndai takes arBitratiOn OUt OF their Warranty cOntracts

Hyundai Motor America has dropped a policy requiring that some warranty coverage disputes between customers and the factory be settled through arbitration. In other words the carmaker is taking arbitration clauses out of the contracts. Until last month, Hyundai included the clause in its new-vehicle war-ranty contract, which also gave customers the ability to opt out of the arbitration clause within 90 days of a new-vehicle purchase. A report about the unfairness of arbitration clauses appeared in the Dec. 6 issue of The New York Times. Shortly after that article was published, Hyundai issued a statement saying the policy would be dropped. So both the Times for writing the article and Hyundai for responding to it in the right manner are to be commended for the result, which is good for Hyundai customers.

The Hyundai arbitration policy had been in place since 2006. In a statement to the Times in response to its article, Hyundai said it was dropping the policy “because we don’t want people to be misled and think we don’t stand behind America’s best warranty.” Proponents of binding arbitration clauses in contracts—common fixtures in everything from mobile phone plans to credit card agreements to medical insurance policies—claim arbitration is a faster, less expensive alternative to litiga-tion for settling disputes. That’s as far from the truth as anything you can imagine. Forced arbitration favors Corporate America, hurts consumers and is totally anti-consumer in every respect.

In fact, arbitration, forced on a consumer, limits that person’s options in pursuing a grievance with a company. The clauses typi-cally require consumers to waive their right to take a company to court—give up their consti-tutional right to a jury trial—and instead settle grievances through a process overseen by private firms hired by the company. Hyundai says it has used arbitration to settle warranty disputes about 10 times since 2006. A spokes-person says that arbitration has never been used by Hyundai to handle disputes involving product liability or personal-injury claims. Hopefully, both statements are factually correct. In any event, Hyundai—for whatever reason—did the right thing when it removed the arbitration clauses in this instance.

Source: Autonews.com

JUdGe reFUses tO send samsUnG deFectiVe phOne class actiOn tO arBitratiOn

A Texas federal court has refused to send a putative class action against Samsung to arbi-tration. The suit claims that Samsung didn’t make customers whole on faulty Galaxy S phones. U.S. District Judge Sidney A. Fitzwater found that clauses in the customers’ wireless carrier contracts did not include the phones’ maker. Judge Fitzwater ruled that Samsung could file a supplemental appendix in support of moving the suit to arbitration, but denied the motion on the grounds that the customers suing the company had arbitration agreements with Spr int and Ver izon, but not with Samsung. Judge Fitzwater wrote:

It is not necessary for plaintiffs to rely on the terms of their service agreements with Sprint Corp. and Verizon Wireless to assert their claims against Samsung, and plaintiffs’ claims are not intimately founded in and intertwined with these contracts.

Judge Fitzwater also pared the putative class’s claims, trimming out several breach of warranty accusations on the grounds that the customers had turned to their wireless carri-ers and not Samsung itself to fix their phones when problems arose— Galitsky, along with two other lead Plaintiffs, filed suit in Califor-nia in June 2012. Samsung successfully moved the suit to federal court in Dallas. It was at least the third such class action the Plaintiffs had attempted over the Galaxy S phones.

Galitsky said in the suit that his phone started failing only a few months after he bought it. The phones freeze, shut down and power off randomly in standby mode, render-ing them unusable, the Plaintiffs contended. Galitsky said he contacted Samsung about the defect when he was having a di f ferent problem with the phone and that Samsung did nothing to fix it. He says he had a second problem, also unrelated, and again told the company about the shutdown issue.

Galitsky is still trying to use the Galaxy S, a fact that, Samsung argued, should preclude him from bringing claims of the product’s unmerchantability to court. But Judge Fitzwa-ter disagreed, saying that because Galitsky has to frequently remove the phone’s battery to reset it, it renders the phone useless for its general purpose.

Source: Law360.com

hearinGs address the eVils OF FOrced arBitratiOn

The Consumer Financial Protection Bureau (CFPB) has been conducting field hearings

and studies addressing the subject of forced arbitration. The arbitration clauses forced on consumers in most all types of transactions have been creating problems for the past two decades. The following is a statement from American Association for Justice (AAJ) Presi-dent Burton LeBlanc relating to this practice:

Forced arbitration puts Americans’ financial security at risk. By removing access to justice, it allows Wall Street banks to evade accountability and grants them a license to steal and violate the law. As the CFPB study indi-cates, the ultimate result of forced arbi-tration is a get-out-of-jail-free card for Wall Street. This demonstrates that forced arbitration is nothing more than a way to eliminate Americans’ access to justice.

Over 17,000 consumers have signed a petition calling on the CFPB to revoke Wall Street banks’ license to steal by stopping the used of forced arbitration clauses in financial products . We applaud the CFPB for taking the first steps to protect Americans’ financial security. If banks are not accountable, all Americans’ financial security is at risk. Accountability must be restored.

The Association has worked long and hard in the fight against forced arbitration. Hope-fully, this consumer issue will be addressed in political races this fall, especially those involv-ing congressional seats. I believe that making forced arbitration an issue wil l be well received by the voters around the country.

Source: AAJ News Release

arBitratiOn in nUrsinG hOmes

Ben Locklar, a lawyer in our Personal Injury/Products Liability Section, successfully defended an attempt to have a nursing home case submitted to binding arbitration. Ben oversees the nursing home litigation handled by our firm. Ben’s client had filed a wrongful death lawsuit in the Circuit Court of Marshall County, Ala. His clients’ mother had been a resident in Barfield Healthcare, Inc., the oper-ator of the nursing home.

The nursing home filed a motion to stay the proceedings, along with a motion seeking to compel our clients to submit their claims to binding arbitration. Ben opposed the nursing home’s motion. The basis of his objection was that the nursing home resident, at the time she was admitted to a locked-psychiatric facility at the facility, was not competent to make her own medical decisions and was not compe-tent to enter into binding contracts. Many


years before, the resident had made a respon-sible decision by appointing her son as her attorney-in-fact under a durable power of attorney. The trial court agreed with Ben’s initial request to conduct limited discovery in the case on two primary issues:

• whether the resident was competent at the time of her admission to the facility; and

• whether a family member who had not been legal ly authorized to enter into binding agreements on the resident’s behalf could bind the resident and her estate to arbitration and waive the resident’s Consti-tutionally protected right to a trial by jury.

A Marshall County psychiatrist who had previously treated our clients’ mother for dementia with probable Alzheimer’s and behavioral disturbances testified that the patient was not competent. The nursing home assistant administrator conceded that the lock-up unit was for patients with cogni-tive deficits and conceded that the resident was not asked to sign any of the legal docu-ments. The resident’s adult children also testi-fied that their mother was not competent when they admitted her to the facility, that the son had durable power of attorney over his mother’s affairs, and that this information was related to the nursing home prior to and at the time of admission of their mother to that facility.

The nursing home admitted that it knew that the son had the power of attorney over his mother’s affairs and permitted the resi-dent’s daughter to sign and execute all admis-s ion agreements, i nclud ing a d i spute resolution agreement. The nursing home’s admission documents also reflected that the son had a durable power of attorney over his mother’s legal affairs.

The Supreme Court of Alabama has made it clear that incompetent adults (and minors) are entitled to a heightened level of protection. When it’s apparent that a nursing home resi-dent (or any other patient) is not competent to make a decision at the time of admission, other family members may not bind that resi-dent or his or her estate to binding arbitration unless the person who signs the arbitration agreement is the resident’s attorney-in-fact or legally appointed guardian.

For years, lawyers at Beasley Allen have been at the forefront of the arbitrative battle at both the state and national levels. It’s uncon-scionable that a family can be compelled to make a decision to place their loved one into a nursing home facility, a decision that in and of itself is heart-wrenching, and then be told that they can only put their loved one in the facil-ity if they agree to give up a person’s Constitu-tional right to a trial by jury. The trial court’s

decision in this regard was completely correct. We will now move forward with a trial by jury on behalf of our clients. Ben did a very good job for our client’s in this case. If you need more information, contact Ben Locklar at 800-898-2034 or by email at [email protected].

XIX. THE CONSUMER CORNER

VOlcker rUle Will Ban Banks FrOm tradinG FOr their OWn Gain

Last month, after some last-minute compro-mises, federal regulators approved the final version of the Volcker Rule. This is a center-piece of the Dodd-Frank Act, which seeks to rein in risk-taking on the part of financial insti-tutions five years after the financial crisis and too-big-to-fail bank bailouts. The rule was drafted in 2011 by then-Federal Reserve Chair-man Paul Volcker. Its mission is to reduce the chance that banks will put federally insured depositors’ money at risk by banning banks from trading for their own gain, known as pro-prietary trading.

Passage of the Rule was supported by Trea-sury Secretary Jacob J. Lew, who told regula-tors the deal was too important to delay and called for its passage by the end of 2013. Presi-dent Obama also urged for passing of the rule. Both met with 86-year-old Volcker several times prior to the measure passing. This vote underlines the strength of Dodd-Frank and is part of the most sweeping overhaul of bank regulation since the Great Depression.

In fact, the Volcker Rule and the Dodd-Frank Act are attempts to compromise from reinstating the Glass-Stegall Act, otherwise known as the 1933 Banking Act, which was established to restore consumer confidence in banks after the Great Depression. Glass-Stegall prevented commercial banks from owning affiliates that underwrite and trade securities.

In 1999, Congress passed the Gramm-Leach-Bailey Act, which repealed part of Glass-Stegall, deregulating banks and remov-ing the firewall between commercial and investment banking. This deregulation is viewed as the cause of the 2008 financial crisis, a position that was ultimately supported by both Democrats and Republicans.

However, those in opposition to the Volcker Rule worried it would hamper banks’ flexibil-ity, holding up trades that might be critical to their financial health and to the health of the economy. They argued that the recent finan-

cial crisis was due to banks’ risky mortgage lending more so than trading. In fact, support of the Volcker Rule ultimately split along parti-san lines, with Republicans largely expressing concern the rule could possibly hamper eco-nomic growth.

But the Volcker Rule found support in 2012 from an unlikely source: JPMorgan. When the financial giant admitted that faulty derivative investments eventually cost its clients more than $6.2 billion in losses, it underscored the dire need for regulatory oversight. The final version of the Volcker Rule requires banks to prove to regulators annually that they have a process in place to “establish, maintain, enforce, review, test and modify” programs that will monitor their compliance with the rule. However, it does grant some concessions to Wall Street. Among these is a delay in the implementation of the rule to July 2015. It is expected that banks will use the time in the interim to look for loopholes.

Sources: New York Times and Insurance Journal

saFety aGency cOnsiderinG Whether tO expand hyUndai air BaG recall

U.S. safety regulators are looking into whether a Hyundai Elantra recall should be expanded. The National Highway Traffic Safety Administration (NHTSA) opened a recall query to determine if 52,000 Elantra Touring cars from the 2009 through 2012 model years should be recalled. In March, Hyundai recalled more than 186,000 Elantra compacts from the 2011 to 2013 model years because a ceiling support bracket can come loose when side air bags inflate. The company says in one case a bracket cut a driver’s ear.

NHTSA says that the 2009-2012 Elantra Touring models have a bracket design that’s similar to the recalled cars. In the recall, dealers were to install industrial adhesive strips to keep the brackets in place. The bracket design was changed in cars built after March 5, 2013. Hyundai says it will cooperate with the investigation.


Fda reVises eqUiValence criteria FOr Generic drUG apprOVal

The U.S. Food and Drug Administration (FDA) has revised its recommendations for how generic-drug makers can prove that their products are released into the human body in the same manner as brand-name counterparts, issuing high-level guidance covering an array of approaches. In i t s d ra f t gu idance announced in November, the FDA spelled out


general study characteristics to determine so-called bioequivalence. That refers to how fast and how much of an active ingredient shows up at the area of a person’s body where it’s intended to work. Separate guidance will be coming soon to describe studies of bioequiva-lence for new brand-name drugs, with regula-tors saying it was time to split the matters up. The guidance said “FDA has determined that separating guidances according to application type will be beneficial to applicants.”

In one respect, the guidance is fairly general, as it doesn’t cover specific products. The FDA has produced individual guidances covering appropriate study structures for 1,100 distinct medicines. But there is also sub-stantial detail on the most common study parameters and different ways to analyze certain categories of drugs—information that can supplement the product-specific guid-ances. For example, a description of typical study design talks about when patients can drink water and eat food, whether multiple doses can be supplied and how much time should separate doses of generic and brand-name products to ensure there’s no overlap.

The guidance also addresses different dosage forms, such as elixirs, chewable tablets and extended-release capsules. It also talks about how to determine whether alcoholic beverages will alter the manner in which a drug is released and its functions. One section of the document deals with “complex drug substances,” for which bioequivalence is more difficult to ascertain. The FDA noted:

Some or all of the components of these complex drug substances cannot be fully characterized with regard to chemical structure and/or biological activity. Rather, we recommend that applicants base [ bioequivalence ] studies on a small number of markers of rate and extent of absorption.

For most products, drugmakers will be expected to use so-called pharmacokinetic studies that look at the speed and extent of drug absorption in a patient, but in certain cir-cumstances, it may be acceptable to perform in vitro testing or extrapolate results based on therapeutics results of a clinical trial, accord-ing to the FDA.

Sources: Jeff Overley and Law360.com

Fda Warns OF pOssiBle philips deFiBrillatOr FailUre

The U.S. Food and Drug Administration (FDA) warned that hundreds of thousands of Philips Healthcare defibrillators may fail in an emergency. The agency urged consumers to take additional precautions while awaiting

replacement devices. The FDA issued a safety communication on HeartStart automated external def ibri l lator products made by Philips Medical Systems, part of the medical device unit of Koninklijke Philips NV. The advisory fol lows a massive recall of the devices initiated by Philips in 2012, covering around 700,000 devices.

The FDA warned that the devices may falter when needed most and fail to deliver a poten-tially life-saving shock during a cardiac emer-gency, but said that until a replacement could be obtained, even a potentially defective device was better than none at all. Steve Sil-verman, FDA Agency compliance chief, said in a statement:

The FDA advises keeping all recalled HeartStart AEDs in service until you obtain a replacement from Philips Healthcare or another AED manufac-turer, even if the device indicates it has detected an error during a self-test. Despite current manufacturing and performance problems, the FDA consid-ers the benefits of attempting to use an AED in a cardiac arrest emergency greater than the risk of not attempting to use the defibrillator.

The recalled devices include defibrillators made between 2005 and 2012 under the names HeartStart FRx, HeartStart HS1 Home, and Hear tStar t HS1 OnSite. The FDA’s announcement follows Philips’ Nov. 19 safety notice informing consumers that a faulty elec-trical component could prevent proper func-tioning of the defibrillators.

The FDA urged consumers to contact Philips immediately about a replacement, and to inspect their defibril lators and follow certain additional steps in the event of an emergency that requires use of the devices. The agency had previously warned Philips about the HeartStart defibrillators, saying in a March 2011 letter that the devices did not conform with FDA regulations and that Philips’ failure to correct defects had led to at least one fatality. The FDA said it had received 87 complaints about the products since January 2008, and outlined problems with the products:

• missing magnets;

• malfunctioning in high-humidity environ-ments; and

• batteries that failed to fit their components.

The FDA reported that a defibrillator that failed to shock “a pulseless ventricular tachy-cardia” had led to a death. In 2009, the FDA warned that its inspectors had found multiple quality assurance violations at Philips’ Massa-chusetts plant. According to the agency, the

company had failed to establish adequate pro-cedures for reviewing complaints and did not report events that might have caused death or serious injury.

The most recent warning came as the FDA was pushing to tighten the approval process for emergency defibrillators in an effort to address widespread device failures during cardiac arrests. This was because of dozens of recalls and 45,000 cases in the past eight years in which defibril lators didn’t perform as intended. In a statement, the FDA said:

Each year, nearly 300,000 Americans collapse from sudden cardiac arrest. When normal heart rhythms are not restored quickly, sudden cardiac arrest can cause death. The FDA will continue to closely monitor all AED manufactur-ers’ quality system practices and manu-facturing changes that have persistently contributed to recall and adverse events associated with AEDs.

Sources: Gavin Broady and Law360.com

cpsc calls FOr neW cOntrOls On pOrtaBle Gas cans

The U.S. Consumer Product Safety Commis-sion (CPSC) wants portable fuel container makers to begin designing their products with flame arrestors in order to prevent fires and injuries to people. According to the CPSC, flame arrestors are intended to keep flames that are external to the gasoline container from passing into the container. The agency wants manufacturers “to regain the momen-tum that was lost in years past” by designing their products to include the safety technol-ogy. In addition, the CPSC wants voluntary standards organizations to incorporate a flame arrestor system into applicable safety stan-dards for gas cans. The CPSC said:

Respected researchers have proven that flammable mixtures of oxygen and gas-oline vapors can exist in gasoline con-tainers, especially when there are small amounts of gas in a large container. And, under certain circumstances, the vapors can ignite and cause a gas can to explode. The results can be deadly or life-altering.

The CPSC said the measure would help protect people from gasoline-related burn injuries. It said that while there have been safety improvements to portable gas cans throughout the years, the flame arrestor tech-nology still needs to be implemented. The CPSC in a statement said:

Manufacturers must comply with the Children’s Gasoline Burn Prevention


Act , which CPSC implemented in January 2009. To prevent children younger than 5 from accessing, ingest-ing or spilling gasoline, all portable gas cans must include a child resistant cap. To meet [U.S. Environmental Protection Agency] and California carbon emis-sions rules, gas cans must also be sealed automatically.

Though gas cans don’t have the flame arres-tors as a standard feature, the CPSC said it worked with the residential gas water heater industry to incorporate flame arrestor technol-ogy into their products and into a safety stan-dard. The commission said:

Residential gas water heaters sold in stores today have built-in flame arres-tors that prevent f lashback fires, and CPSC believes that this technology also should be included in gasoline contain-ers. Manufacturers, retailers, research-ers, safety advocates, and CPSC should continue to work together to address foreseeable risks and solutions that will make gas cans as safe as possible.

The Portable Fuel Container Manufacturers Association says the technology is still under development and isn’t ready to be imple-mented yet. The associat ion sa id in a statement:

It would be irresponsible to incorporate flame arrestor technology as we under-stand it today in either our products or the voluntary standards governing our products before it is proven to be effec-tive and safe. Our industry encourages CPSC to lend their expertise and resources to the search for a workable solution.

The group said the parameters for combus-tion inside a portable consumer gas can have been found to be extremely limited, but that it will continue to support and participate in the study of flame mitigation devices to determine if a feasible new product design can be devel-oped. I believe that flame arrestors should be required. The industry has had adequate time in which to include this technology into the design and manufacturing of their gas cans.

Source: Law360.com

Wal-mart Will cOntriBUte $25 milliOn tO settle Gas can explOsiOn laWsUits

In a separate but related matter, the nation’s largest retailer, Wal-Mart, has agreed to con-tribute about $25 million to settle unresolved lawsuits filed on behalf of consumers injured or killed in explosions involving portable

plastic gas cans. The money from Wal-Mart amounts to slightly more than 15 percent of a proposed $161 million fund that would settle dozens of lawsuits against Blitz USA, the largest manufacturer of these cans. A hearing on the proposed settlement is set for early this year. Wal-Mart, the largest seller of plastic gas cans, has sold tens of millions of Blitz gas cans. In agreeing to contribute toward the set-tlement, Wal-Mart says it does not acknowl-edge any safety defect in the Blitz cans.

Blitz, based in Miami, Okla., and formerly the nation’s largest manufacturer of plastic gas cans, is now in bankruptcy and out of busi-ness. Lawyers representing individuals burned in alleged gas can explosion incidents have filed at least 80 lawsuits against can manufac-turers in the last decade or so. Some have also targeted retailers that sold the cans. Wal-Mart says it was named as a defendant in 24 of the lawsuits, which allege that Blitz and Wal-Mart knowingly sold a defective product that could explode and produce catastrophic and some-times fatal injuries, and refused to add a safety device, known as a flame arrester, to make the cans safer.

Sources: Law360.com, Lisa Myers, Rich Gardella and NBC News

sUrGeOns Warned aBOUt FrictiOn With rOBOtic sUrGical arms

Intuitive Surgical Inc., the maker of a $1.5 million robot surgery system, told doctors last month that friction in the arms of some of its devices could cause the unit to stall. That was the second warning the company had issued about its products in the span of a month. The company sent an “urgent medical device recall” on Nov. 11, alerting customers of the problem, which affects 1,386 of the systems worldwide. The Food and Drug Administra-tion (FDA) put this information in a Dec. 3 notice on its website. The stalling may result in a sudden “catch-up” if the surgeon pushes through the resistance, the agency said.

Bloomberg News reported that Intuitive was facing growing questions about its mar-keting strategies, training procedures and the safety of its devices. The FDA said recently that the number of adverse event reports, including deaths, injuries and system malfunc-tions, had more than doubled in 2013 as of Nov. 3, compared with all of 2012. The FDA said on its website:

Reports of friction within certain instrument arms can interrupt smooth instrument motion. This can be felt by the surgeon as resistance in the move-ment of the master. In this situation, the instrument can stall momentarily and then suddenly catch-up to the

master position if the surgeon pushes through the resistance.

Intuitive’s sales and share price took a sharp hit last year. On Oct. 17, Intuitive reported a decline in third-quarter earnings as a result of lower revenue. The company had lost 29 percent of its value in the 12 months through Dec. 3, 2013. Bloomberg first reported in Feb-ruary that the FDA was looking into the chal-lenges surgeons face with the robotic systems. These systems were first approved by the FDA in 2000 after a trial of 233 patients done at a hospital in Mexico City. A survey by the agency released on Nov. 8 included 11 doctors who have performed from 70 to 600 robot sur-geries each. While the unidentified surgeons said the device led to fewer complications and shorter recoveries, they reported incidents in which robot arms collided or missed a mark and they all said training was an issue.

In October, the company sent an “urgent medical device correction” letter to users warning of potential problems with metal coating on a lamp that may not be compatible with the control board. Hopefully, the prob-lems identified will be corrected.

Sources: Birmingham News and Claims Journal

cpsc issUes rUle FOr children’s Bath seats and Beds

The U.S. Consumer Product Safety Commis-sion (CPSC) has issued a final rule implement-ing safety standards for infant and toddler products including infant bath seats, toddler beds and full-size baby cribs. The new rule incorporates ASTM voluntary standards asso-ciated with the products, with some modifica-tions. A notice, published in the Federal Register on Dec. 9, becomes effective March 24, 2014. Formerly known as the American Society for Testing and Materials, the organiza-tion develops international voluntary consen-sus standards.

For bath seats, the CPSC will require all attachment components to be permanently attached to the bath seats in order to increase the safety of bath seats. The rule says:

The 2013 version of the ASTM standard contains a new definition and require-ment for attachment components. The requirement specifies that all compo-nents needed to attach the bath seat to the bathtub (attachment components) must be permanently attached to the bath seat.

Some bath seats, however, are designed to provide components that are separate from the bath seat. With that design, consumers must install the attachment components, con-


sisting of adhesive disks, onto the bathtub surface, the rule said. If the consumer fails to install the adhesive disks or fails to install them properly, these bath seats pose a tip-over hazard.

The toddler bed standard updates an ASTM standard the CPSC concluded did not improve the safety of toddler beds, because it con-tained several provisions for guardrail height and guardrail strength that were less stringent than the CPSC’s existing standard. The new standard ensures those safety features are up to the commission’s standards. And the new standard for full-size cribs requires that before and after testing a crib, the crib must comply with all general requirements of the standard, which deal with the distance between the side slats.

An ASTM standard was insufficient because a tested crib potentially could comply with the specific testing procedures for slats even if a slat failed during testing, but not meet the general slat spacing requirements because of the failed slat, the CPSC said. In that situation, the crib would not comply with the require-ments in the current standard because the crib would not meet all of the general require-ments after the crib had been tested. The rule said:

The revised standard ... provides an exception for this specific situation so that a crib’s failure to meet the slat spacing requirement under the testing circumstances described above would not cause the crib to be considered noncompliant.

Under the Consumer Product Sa fety Improvement Act, the CPSC is required to pro-mulgate consumer product safety standards for durable infant or toddler products. The law requires that these standards are to be “substantially the same as” applicable volun-tary standards or more stringent than the vol-untary standards if the commission concludes that more str ingent requirements would further reduce the risk of injury associated with the product. Under the Act, the term “durable infant or toddler product” explicitly includes infant bath seats, toddler beds and full-size cribs. In accordance with the Act, the safety standards incorporate the relevant ASTM standards, with certain modifications that make the voluntary standard more stringent.

Sources: CPSC and Law360.com

Ftc Files sUit reGardinG a medical discOUnt scam tarGetinG seniOrs

The Federal Trade Commission (FTC) has filed suit in the U.S. District Court for the

Northern District of Illinois against several U.S and Canadian based companies, alleging that these companies implemented a medical dis-count scam that targeted seniors across the country. According to the FTC’s complaint, seniors in the U.S. were victims of deceptive calls by telemarketers whereby they would offer phony discounts on prescription drugs and even pretend to be affiliated with Social Security, Medicare, or medical insurance providers.

As indicated in the FTC’s recent press release, the telemarketing calls pitched a pre-scription drug discount card that would sup-posedly provide substantially discounted or even free prescription drugs to seniors. Many victims were led to believe they had to pur-chase the card to continue receiving their Social Security, Medicare, or other medical insurance, which was not the case.

Additionally, the discount cards that these companies were selling were actually avail-able for free by calling a toll-free number or visiting a website. Moreover, the discount cards generally do not provide any discounts to consumers who already have either govern-mental or private insurance. However, the FTC alleges that the telemarketers deceitfully convinced their victims to turn over their bank account numbers in order to purchase a discount card, and then used that information to debit money from the victims’ accounts.

The companies used the victims’ bank account information to take approximately $300 from their bank accounts using a “demand draft.” Moreover, not all consumers who paid for the purported discount card even received it—some victims received nothing at all for their money.

The FTC is actively working to shut down the medical discount scheme. Some of the companies responsible for the scheme include, but are not limited to, AFD Advisors, LLC; AMG Associates, LLC; CAL Consulting, LLC; Park 295 Corp., as well as Canadian com-panies 9262-2182 Quebec Inc. and 9210-7838 Quebec Inc. The companies, and certain offi-cers of these companies, have been charged with violating Section 5 of the FTC Act by deceptively presenting themselves as govern-ment or insurance representatives, as well as by telling consumers that the discount plans they were selling could provide substantial discounts on prescription drugs.

Additionally, the companies, and certain off icers of these companies, have been charged with violating the FTC’s Telemarket-ing Sales Rule for their deceptive acts and for calling consumers whose numbers were on the National Do Not Call Registry. A federal judge in the U.S. District Court for the North-ern District of Illinois issued a temporary restraining order halting the companies’ deceptive scheme and freezing their assets.

The Director of the FTC’s Bureau of Consumer Protection, Jessica Rich, stated:

This scam, which targeted and deceived our nation’s seniors, is as cynical and wanton as they come. We look forward to bringing this operation to a halt and working to get relief for the victims.

If any of our readers are aware of this type of fraud or deceit and need assistance, they can contact Ali Hawthorne, a lawyer in our firm’s Consumer Fraud Section, at 800-898-2034 or by email at [email protected].

Source: Federal Trade Commission

statistics indicate 1 in 14 Fell prey tO identity theFt in 2012

According to a recent survey, it appears that one of every 14 Americans age 16 or older was a target or a victim of identity theft. This is a crime that imposes a heavy emotional toll on many of its victims. According to a national household survey of 70,000 people issued by the Bureau of Justice Statistics, identity theft resulted in $24.7 billion in financial losses last year. The crime affected 16.6 million people and fell most heavily on households with annual incomes of $75,000 or more. In that income bracket, 10 percent of such house-holds were victimized.

The survey counted both attempted and successful incidents of identity theft. Two-thirds of identity theft victims experienced financial losses, which averaged $1,769. For many victims, the size of the loss was eclipsed by concerns that someone had stolen their identity and that it might take weeks or months to repair the damage. Among victims who spent six months or more resolving finan-cial and credit problems stemming from iden-tity theft, 47 percent experienced severe emotional distress, compared with 4 percent who spent a day or less resolving problems.

Victims experienced a wide range of issues having to do with credit, banking, debt collec-tors, even cutoffs in utility service. In general, victims whose personal information, such as a Social Security number, was misused were more likely to experience financial, legal or other difficulties, according to the bureau. Ten percent of victims spent more than a month clearing up associated problems. A majority spent a day or less. Victims whose personal information was used to open a new account or for other fraudulent purposes spent an average of about 30 hours resolving problems. Victims of existing credit card account misuse spent an average of three hours resolving problems.


The full extent of identity theft is unknown because often a bank will reimburse the victim for any losses, and the crime is never reported to the police, according to Chuck Wexler, executive director of the Police Exec-utive Research Forum, whose members include the heads of large and smaller police departments. According to the report, one in 10 identity theft victims reported the incident to police, while nine in 10 victims contacted a credit card company or bank to report misuse or attempted misuse of an account or personal information. Jim Bueermann, president of the Pol ice Foundation, a research organiza-tion, says:

What we’re seeing here is the exponen-tial growth of information technology, and with that comes the ability to be hacked. At one point in the past, people lived in places where they didn’t lock their doors. Over time, they started to lock them. We’ll come to the same place in our digital life, hopefully sooner.

Less than 10 percent of victims bought identity theft protection or used an identity theft security program on their computer after being victimized, according to the survey. Of people interviewed in the survey, 85 percent took one or more preventative actions such as changing passwords on finan-cial accounts or examining bank or credit statements. Theft involving existing credit cards and bank accounts made up for the vast majority of the 16.6 million victims. Some 7.7 million victims reported the fraudulent use of a credit card, and 7.5 million reported the fraudulent use of a bank account such as a debit card, checking account or savings.

Source; Claims Journal

the cOmpany Behind larGest Us BeeF recall pays $3 milliOn tO end Fca sUit

The owners of a California slaughterhouse agreed last year to pay $3.1 million to settle claims that they defrauded the government by selling beef from mistreated cattle. That ended a long-running lawsuit that previously served up an attention-getting—if symbolic—$500 million judgment. The lawsuit, initially filed by the Humane Society of the United States, accused Hallmark Meat Packing and its sibling company Westland Meat Co. of breaching their contracts with the U.S. Department of Agriculture requiring the animals be handled humanely, and of defrauding the government by continuing to bill for meat while in breach of their contracts. Whistleblower videos showed slaughterhouse employees kicking, beating and dragging disabled cattle, electro-cuting them, and slamming them with fork-

l i f t s to move them toward slaughter. Eventually, this prompted the largest beef recall in U.S. history. Peter Petersan, HSUS director for animal protection litigation, had this to say:

This judgment sends a strong message to those who profit from the abuse of farm animals. Although numerous line workers have been prosecuted for farm animal cruelty over the last decade, this is the first time the consequences of animal cruelty have been felt by those sitting in the corner office as well.

The principal owners and investors in West-land will forfeit $3,116,802, virtually all of their remaining assets, according to the Humane Society. The final judgment against Westland reduced the bankrupt company’s lia-bility to $155,684,827, from a previous treble-damages judgment of nearly $497.3 million. Most of the earlier judgment, handed down in November 2012, represented a future claim against Hallmark Meat Packing Co. Owners Donald Hallmark, Sr., and Donald Hallmark, Jr., agreed to pay approximately $304,000. Since the company has no assets, the $155 million judgment is symbolic, the Humane Society said.

The earlier $500 million verdict was seen as a symbol of the government’s willingness to embrace aggressive legal theories to maximize fraud liability under the False Claims Act. The case involved two hotly disputed topics in False Claims Act case law: implied certifica-tion and the calculation of damages. The implied certification theory allows the govern-ment or a whistleblower to sue for punitive damages under the FCA i f a contractor submits claims for payment while in violation of a contract condition that is necessary for payment.

The Humane Society launched its suit in 2008 against 11 defendants, after the organiza-tion sent undercover operatives to film sus-pected abuse of cattle at a slaughterhouse in Chino, Calif. The lawsuit, undercover videos, and the resultant beef recall led to the bank-ruptcy of several of the accused companies.

According to the Humane Society’s com-plaint, it was standard practice for the slaugh-terhouse to kick, beat or drag cattle—often with heavy chains—electrocute them, or slam or maim them with forklifts to get the animals to walk or crawl into the so-called “kill box” for slaughter. The Humane Society is repre-sented by David S. Cohen, Aaron Renenger and Alisa Cassel Schlesinger of Milbank Tweed Hadley & McCloy and in-house counsel Jona-than R. Lovvorn, Peter J. Petersan and Leana E. Stormont.

Source: Law360.com

XX. RECALLS UPDATE

We are again reporting a large number of safety-related recalls. However, at press time there hadn’t been any automobile recalls during December. Because of the holidays, we had to go to the printer early with this issue. We may have missed some car recalls. In any event, there have been many other sorts. We have included some of the more significant recalls that were issued in December. If more information is needed on any of the recalls, readers are encouraged to contact Shanna Malone, the Executive Editor of the Report. We would also like to know if we have missed any safety recalls that should have been included in this issue.

michelin recalls 1.2 milliOn tires in U.s.

Tire-maker Michelin has recalled about 1.2 million tires sold in the U.S. because an increasing number are experiencing tread loss or rapid air loss. The tires are commonly used for pickup trucks, heavy-duty vans, small RVs and commercial light trucks. The Greenville, S.C.-based company says no deaths or injuries have been reported because of the tires.

The tires, known as Michelin LTX M/S t i res, were manufactured between January 2010 and June 2012. They were sold as original equipment on some vehi-cles and as new replacement tires. The company says that fewer than 200 of the tires have been returned by customers. Owners can have them replaced at Michelin stores for no charge.

Exmark Recalls Commercial Walk-Behind Mowers Due To Injury Hazard

Exmark Manufacturing Company, Inc., from Beatrice, Neb., has recalled its Com-mercia l Walk-Behind Mowers. The mower’s blade can break and injure the user and others nearby. This recal l involves 2013 Exmark Commercial 30” Walk-Behind Mowers, model ECKA30 and ser ia l numbers rang ing f rom 313605897 to 313660824. The phrases “Commercial 30” and “Exmark” are printed on the front of the black and red mower. “Exmark” is also printed on the side of the mower. The model and serial numbers are located on a decal affixed to the engine base above the left rear tire.

The mowers were sold at Exmark dealers nat ionwide f rom November 2012 through October 2013 for about $1,800.


Consumers should immediately stop using the recalled mowers and contact Exmark for a free repair. Contac: Exmark at 800-667-5296 from 8 a.m. to 5 p.m. CT Monday through Friday or online at www.exmark.com and click on Service & Support and then on Safety Resources at the bottom of the page for more informa-tion. Photos available at http://www.cpsc.gov/en/ Reca l l s /2014/Exmark-R e c a l l s - C o m m e r c i a l - W a l k -Behind-Mowers/

trek recalls madOne Bicycles dUe tO crash haZard

About 6,800 Trek model year 2013 Madone bicycles have been recalled by Trek Bicycles Corp., of Waterloo, Wis. The bicycle’s front brake can fail, posing a crash hazard. This recall involves model year 2013 Trek Madone bicycles with model numbers 5.2, 5.9, 6.2, 6.5, 7.7 or 7.9, and serial numbers starting with WTU and ending with G or H. A list of all serial numbers included in the recall is at w w w.trekbikes.com. Some of the recalled models are custom-ordered Project One Madones. The model number is printed on the bicycle frame. The serial number is printed on a sticker underneath the frame of the bicycle. The bicycles were sold in a variety of colors. Trek has received five reports of loose front brake attachment bolts. No injuries have been reported.

They were sold at bicycle stores nation-wide from July 2012 through December 2013 for between $3,400 and $6,300, and for custom models between $4,000 and $15,000. Consumers should immediately stop using the recalled bicycles and take the bicycles to a Trek dealer for a free replacement front brake system. Contact Trek at 800 -373 -4594 from 8 a.m. through 6 p.m. CT Monday through Friday, or online at www.trekbikes.com and click on Safety and Recalls at the bottom of the page for more information. Photos available at http://www.cpsc.gov/e n / R e c a l l s / 2 0 14 / T r e k - R e c a l l s -Madone-Bicycles/

FOx FactOry recalls eVOlUtiOn mOUntain Bike sUspensiOn FOrks

Fox Factory, of Watsonville, Calif., has recalled Evolution 2013 Mountain Bike Suspension Forks. The suspension fork’s damper cylinder/piston can separate and cause the front wheel to detach, posing a fall hazard. The recalled suspension forks are model year 2013, 32 and 34 Evolution

Series with 120mm to 160mm of travel. The Evolution name and logo are on a sticker on the front fork with the FOX brand name logo. Recalled forks can be identified by the serial number, which is found on the underside of the crown after removing the front wheel. The forks were sold as original equipment on some of the following 2013 model year moun-tain bikes: BMC, Cannondale, Commen-cal, Diamondback, GT, Kona, Lapierre, Norco, Orbea, Raleigh, Rocky Mountain, Santa Cruz, Scott, Specialized and Trek. A small quantity of suspension forks were sold to retailers or distributors as after-market accessories. Fox received one report of an incident resulting in shoul-der injuries in Italy.

Bicycle retailers nationwide sold the bikes between August 2012 and October 2013 as original equipment on bicycles priced from about $2,000 to $4,400. Products sold for aftermarket use for about $600 to $650. Consumers should stop using the bicycles with recalled Fox Factory suspension forks and bring them to the place of purchase for a free repair. Consumers can check thei r ser ia l number at www.ridefox.com/, see the link at the lower left of the page, or contact Fox for assistance with discern-ing whether their bicycle has the recalled product and for instructions on how to return the recalled product and receive the free repair if they cannot bring their bicycle or fork to the place of purchase.

tOrO recalls timemaster and tUrFmaster laWn mOWers dUe tO inJUry haZard

TimeMaster and TurfMaster lawn mowers have been recalled by The Toro Co., of Bloomington, Minn. The mower’s blade can break and injure the user and others nearby. This recall involves 2013 Toro TimeMaster 30” and 2013 Toro TurfMas-ter 30” lawn mowers with the following model and ser ia l numbers : Model number 20199 with ser ial numbers ranging from 313000101 to 313020271; model number 20200 with ser ia l numbers ranging from 313000101 to 313007366; and, model number 22200 with ser ia l numbers ranging f rom 313000101 to 313007146. The phrases “TimeMaster” or “TurfMaster” and “Toro” are printed on the front of the black and red mower. “Toro” is also printed on the side of the mower. The model and serial numbers are located on a decal affixed to the engine base above the left rear tire. Toro has received 10 reports of blades

break i ng. No i nju r ies have been reported.

The mowers were sold at Toro dealers nat ionwide f rom November 2012 through October 2013 for between $999 and $1,799. Consumers should immedi-ately stop using the recalled mowers and contact Toro for a free repair. Contact Toro toll-free at 855-340-7686 from 8 a.m. to 5 p.m. CT Monday through Friday or online at www.toro.com and click on Product Recall Information at the bottom of the page for more information. Photos available at http://www.cpsc.gov/en/Recalls/2014/Toro-Recalls-TimeMaster-and-TurfMaster-Lawn-Mowers/

BUrley desiGn recalls tailWind racks FOr trailercycles

Tailwind bicycle racks for trailercycles have been recalled by Burley Design LLC, of Eugene, Ore. The top portion of the tailwind rack that connects trailercycles to a towing bicycle can break and allow the trailercycle to disconnect, posing a fall hazard. The Tailwind Racks are used for hitching children’s trailercycles to adult size bicycles. The aluminum racks were sold individually, in black or silver, or with Kazoo or Piccolo brand trailercy-cles in black only. The individual racks have stock code numbers 939001 for black and 939002 for silver, which was printed on the original packaging. The racks have double side rails. Burley is printed on the curved back plate of the rack. The firm received 11 reports of Tailwind Racks breaking, including one report of a minor leg injury in the U.S. and one report of a broken leg in the UK.

The trailercycles were sold at Indepen-dent bicycle retai lers and specialty outdoor retailers nationwide and online at Amazon.com, Biketrailershop.com and other websites from November 2011 through September 2013. Individual racks sold for $65 and Kazoo and Piccolo trailercycles with Tailwind Racks sold for $300 and $350 respectively. Consumers should stop using the Tailwind Racks immediately and contact Burley to receive a free replacement rack. Burley will replace recalled Tailwind Racks with a steel Moose Rack. Contact Burley Design at 800-311-5294 between 8 a.m. and 5 p.m. PT Monday through Friday or online at www.burley.com and click on Recall Information for more information. Photos are available at http://www.cpsc.gov/en/Recal ls /2014/Burley-Design-Recalls-Tailwind-Racks-for-Trailercycles/.


Gas trimmers recalled By eFcO dUe tO Fire haZard

Emak USA, Inc., of Wooster, Ohio, has recalled efco brand Gas Trimmers from Emak USA. The muffler on the trimmer’s engine can break during use and pose a fire hazard. The trimmers are used in both residential and professional applica-tions for cutting grass and light brush. The cutting attachments include a trimmer head and metal blade. The trim-mers are about 72 inches long. They are colored red and gray with either a bike or loop handle configuration. Three models are recalled in two engine sizes mea-sured in cubic centimeters. They are: 36cc models 8371 S and 8371 T, and a 40.2cc model 8421 T engine displace-ment. The brand name “efco” and model number are printed on the front of the engine and the brand name also appears on the wand. The company has received eight reports of incidents, including one resulting in singed hair. No serious injury or property damage have been reported.

The gas trimmers were sold at authorized efco dealers at both retail stores and online, and Menards stores between June 2009 and July 2013 for about $400. Con-sumers should stop using the recalled trimmers immediately and return them to an authorized efco dealer for a free muffler replacement kit. Contact Emak USA at 800-800-4420 Monday through Friday from 8 a.m. to 5 p.m. ET or visit the company’s website at www.efco-power.com and click on Recall Informa-tion at the bottom of the home page. Photos available at http://www.cpsc.gov/en/Recalls/2014/Gas-Trimmers-Recalled-by-efco/.

shaW indUstries recalls carpet dUe tO Fire haZard

About 16,300 yards of Aristocrat II Carpet have been recal led by Shaw Industries Inc., of Dalton, Ga., the manu-facturer. The carpet fails to meet federal f lammability standards, posing a fire hazard to consumers. The recall involves Aristocrat II brand wall-to-wall carpet with style number 7L514. The carpet was sold in one color, “Pale Clay.” A date stamp on the back of the carpet reads “USA 760 MEA 52545,” the date “06-07-2013,” a time range between 00:45 and 3:00 and the words “Pile: 100% Polyes-ter.” The stamp is repeated every six feet.

The carpet was sold exclusively at Lowe’s stores nationwide between June 2013

and September 2013 for about $1 a square foot. Consumers should immedi-ately contact Shaw Industries to deter-mine if their carpet is included in the recall and for instructions on returning the product for refund or replacement. Contact Shaw Industries at 800-241-4031 from 9 a.m. to 5 p.m. ET Monday through Friday, or visit the company’s website at www.shawf loors.com and cl ick on “Product Recall” for more information. Photos available at http://www.cpsc.gov/en / Reca l l s /2014/ Shaw- I ndu s t r ie s -Recalls-Carpet/

Wahl recalls tOtal care aerOsOl cleaner dUe tO BUrn haZard

About 720,000 Tota l Care Aerosol Cleaner, Lubricant & Coolant have been recalled by Wahl Clipper Corp., of Ster-ling, Ill. Vapors from the propellant in the Total Care product can ignite upon contact with hair clippers, posing a burn hazard to consumers. This recall involves Wahl Total Care products used to clean and lubricate hair clippers, trimmers and shavers. The product was sold in six-ounce aerosol cans. The white label on the can reads “Wahl Total Care” and “Cl ipper, Tr immer, Shaver.” Model number 03772 is printed on the back of the can. Wahl has received three reports of incidents of the product igniting, including one report of minor burns.

The products were sold at Meijer, Walmart and other retail stores nation-wide and online at Amazon.com from June 2009 to October 2013 for about $5. Remedy: Consumers should immediately stop using the Total Care product and contact Wahl for a replacement. Consum-ers can contact Wahl at 800-767-9245 from 8 a.m. to 4:30 p.m. CT Monday through Friday or online at www.wahl.com and click on Recall for more infor-mation. Photos are available at http://www.cpsc.gov/en/Recalls/2014/Wahl-Recalls-Total-Care-Aerosol-Cleaner/

eiGht retailers recall 32” cOBy Flat screen teleVisiOns dUe tO Fire and BUrn haZards

About 8,900 Coby 32-inch f lat screen televisions have been recalled by Coby Electronics Co. Ltd., of Hong Kong. n electronic component can fail, catch fire and ignite nearby items, posing fire and burn hazards. This recall involves black Coby 32-inch flat screen televisions with model number TFTV3229 and serial numbers beginning with LG and that

have M07 or M10 in the 9th, 10th and 11th position of the serial number. The model and serial numbers are printed on a label on the back of the televisions and Coby is printed on the front. Coby USA is out of business. The U.S. Consumer Product Safety Commission (CPSC) has received reports of six incidents involving the tele-visions overheating, smoking or catching fire. One incident involved a television catching on fire and scorching a wall. Another involved a fire that was limited to the television. No injur ies have been reported.

The televisions were sold at ABC Ware-house, Fry’s Electronics, h.h. gregg, Nebraska Furniture Mart, P.C. Richard & Son, Sears/Kmart, Toys R Us and online at BestBuy.com, dealtree.com, techliqui-dators.com and bestbuy.dtdeals.com, and other stores and sites nationwide, from August 2011 through November 2013 for between $170 and $260. Consumers should immediately turn off and unplug the recalled televisions and contact the participating retailer where their televi-sion was purchased for instructions on the remedy available from that retailer, which could be a refund, store credit, gift card or replacement TV.

The U.S. company is out of business so eight retailers have stepped up to volun-tarily recall the televisions. The remedy and terms vary between the retailers. ABC Warehouse: Toll-free at 855-510-0070 or www.abcwarehouse.com for more information. Best Buy: 800-566-7498 or www.BestBuy.com and click on Product Recalls at the bottom of the page for more information. Fry’s Electronics: Toll-free at 877-688-7678 or www.frys.com for more information. h.h. gregg: Tol l - f ree at 888 -723 -7385 or www.hhgregg.com for more information. Nebraska Furniture Mart: 800-359-1200 or www.nfm.com for more information. P.C. Richard & Son: Toll-free at 866-312-4493 or www.pcrichard.com for more information. Sears/Kmart: Toll-free at 888 -852-3571 or www.sears.com or www.kmart.com and click on Product Recalls at the bottom of the page for more information. Toys R Us: 800-869-7787 or www.toysrusinc.com and click on Product Recalls at the bottom of the page for more information. Photos avail-ab le a t ht tp ://w w w.cpsc.gov/en /Recal ls /2014/Eight-Reta i lers -Recal l -32-Coby-Flat-Screen-Televisions/.


GOOGle and hp recall hp chrOmeBOOk 11 charGers dUe tO Fire and BUrn haZards

About 145,000 HP Chromebook 11 power supply/chargers have been recalled by Google Inc., of Mountain View, Calif. and the distributor Hewlett-Packard Company, of Palo Alto, Calif. The computer’s charger can overheat and melt, posing fire and burn hazards. This recall involves chargers that were sold with the HP Chromebook 11. The charger is black with outlet pins, mea-sures 1¾ inches by ¾ inches, and has a 6-foot long cord with a micro-USB con-nector on the end. The model number of the charger is MU15-N1052-A00S, which is stamped on the face of the battery charger that has the outlet pins. Google has received nine reports of chargers overheating and melting during use.

The computers were sold at Best Buy stores nationwide and online at Amazon.com, bestbuy.com, Google Play at play.google.com, and HP Shopping at shop-ping.hp.com from October 2013 through November 2013 and included with the Chromebook 11 which sold for about $280. Consumers should immediately stop using the recalled charger for the HP Chromebook 11 and contact Google for a free replacement charger. Contact Google toll-free at 866-628-1371 between 5 a.m. and 7 p.m. PT seven days a week, or online at http://chromebook.com and click on the Chromebook link at the top of the page and then click on Support for more information. Photos Available at http://www.cpsc.gov/en/Recalls/2014/Google-and-HP-Recall-HP-Chromebook-11-Chargers/.

packtite recalls Bed BUG heatinG Units dUe tO Fire haZard

About 9,000 PackTite™ Heating Units for Bed Bug Control have been recalled by Nuvenco Inc., dba PackTite™, of Ft. Collins, Colo. The bed bug heaters can overheat, melt and cause a fire, posing a fire hazard. This recall involves PackTite bed bug heating units sold with Pack-Tite™ or ig ina l bed bug treatment systems. Consumers place items for bed bug treatment inside PackTite’s black canvas bag and turn the heater on inside the bag. The white heaters are attached to a black wire frame that fits in the bag. PackTite™ is printed in white on the bag. The bags measure 36 inches long by 19 inches wide by 24 inches tal l. The recalled heaters do not have any visible

text on the up-facing side of the heater casing, but they do have reset instruc-tions on the underside of the heater. PackTite has received three consumer complaints of heaters overheating, melting and, in one case, the items being treated were singed. No injuries have been reported.

The units were sold by Pest control com-panies and pest control product distribu-tors nationwide, including Atlantic Pest Solutions, Bedbug Central, Bedbug Supply, Broadway Exterminating, Dana Pest Control, Do My Own Pest Control, Grainger, M&M Environmental Isotech, K-9 Sweeps, Orkin, Pestaway, Round-the-Clock Pest Control, Steritech, Stern Envi-ronmental, Tallman Scientific, Univar and US Bedbugs from October 2009 through January 2013 for between $300 and $330 for the system and $53 for the heater when sold separately. Consumers should immediately stop using the recalled heating units and contact Pack-Tite for a free replacement heater. Contact PackTite toll-free at 866-520-7952 from 8 a.m. to 8 p.m. MT, by email at [email protected], or online at www.packtite.com and click on Product Recall for more information.

sOlOWaVe recalls hOme playGrOUnd tUBe slides With pOrthOles dUe tO laceratiOn haZard

Tornado brand home playground tube slides with portholes have been recalled by their manufacturer Solowave Design Corp., of Hamburg, N.Y. The plastic port-hole-type windows in the tube slide can break, posing a laceration hazard to chil-dren. This includes about 10,800 in the U.S. and 9,900 in Canada. This recall involves Solowave Tornado brand home playground tube slides with portholes. The slides are green, six or seven feet long and have three or five porthole-style plastic windows in the sides. The slides were sold with Solowave’s Centennial, Centennial II, Lexington, Rocky Moun-tain Deluxe and Sheridan play systems and were also sold separately. Solowave Design is stamped on the outside of the slides near the middle of each tube slide section. Solowave has received 23 reports of minor injuries to children, including cuts and scrapes, from contact with broken portholes.

The slides were sold at Toys R Us and other stores nationwide, and online at toysrus.com from February 2008 through August 2013 for between $1,300 and

$1,800 as part of a play system, or between $275 and $370 for the slide only. Consumers should stop using the recalled slide immediately and contact Solowave to receive a free repair kit for the por t hole wi ndows. Contac t Solowave tol l - f ree at 866 - 678 -0376 between 9 a.m. and 5 p.m. ET Monday through Fr iday, or onl ine at www.solowavedesign.com and click on Impor-tant Safety Notice for more information. Photos available at http://www.cpsc.gov/en/Recalls/2014/Solowave-Recalls-Home-Playground-Tube-Slides-with-Port-Holes/.

ikea recalls children’s Wall-mOUnted lamps dUe tO stranGUlatiOn haZard

The U.S. Consumer Product Safety Com-mission (CPSC), in cooperation with IKEA North America, of Conshohocken, Pa., is announcing the recall for repair of children’s wall-mounted lamps due to a strangulation hazard. A 16 -month-old child in a crib died after getting entan-gled in the lamp’s cord. In a separate inci-dent, a 15-month-old child in a crib became entangled in the lamp’s cord and nearly strangled. In both incidents, which occurred in Europe, the lamp cord was pulled into the crib by the infants. There were 2.9 million of the recalled lamps sold in the United States. In addi-tion, 1.1 million were sold in Canada. There was a total of 23 million sold worldwide.

The recalled IKEA children’s SMILA-series wall-mounted lamps were sold in eight designs, including a blue star, yellow moon, pink flower, white flower, red heart, green bug, blue seashell and an orange seahorse. The blue star is the STJÄRNA model with article numbers 501.944.49 or 500.108.79. The yellow moon is the MÅNE model with article numbers 701.944.48 or 700.108.40. The pink flower is the BLOMMA model with article numbers 901.944.47 or 000.979.50. The white flower is the BLOMMA model with article number 300-746-50. The red heart is the HJÄRTA model with article numbers 202.256.59 or 801.993.13. The green bug is the BAGGE model with article numbers 101.944.46 or 700.728.71. The blue seashell is the SNÄCKA model with article number 400-982-50. The orange seahorse is the SJÖHÄST model with article number 900-982-43. The model name is printed on a label on the inside back of the lamp near the light bulb. The article number is printed on the lamp’s packaging.


The plastic wall-mounted children’s lamps measure about 11 inches high by 11 inches wide. They have a 7-ft.-long electrical cord with an in-line switch and take a 25-watt light bulb. They were sold exclusively at IKEA stores nationwide, in IKEA’s catalog and online at ikea-usa.com from July 1999 through May 2013 for between $10 and $13. Consumers should immediately stop using the recalled lamp and contact IKEA for a free repair kit. Do not use the lamp until the repair kit is installed. The repair kit has self-adhesive fasteners for attaching the lamp’s cord to the wall as well as safety instructions. Contact IKEA toll-free at 888-966-4532 anytime or online at www.ikea-usa.com and click on the Recall link at the top of the page for more information. The lamps were made in the United States, Lithuania and China.

hOBBy lOBBy stOres recall accent chairs dUe tO risk OF inJUry

About 1,400 Accent Chairs have been recalled by Hobby Lobby. The front legs on the chair can loosen and detach, posing a fall hazard and risk of injury to the consumer. This recall involves black wooden accent chairs with a shaped wood top rail and center back slat. The chairs have a black and white chevron print seat cushion. Item number 5218300 and PO number 9099294 are printed on the chair’s hang tag and a tag affixed to the underside of the chair. Hobby Lobby has received one report of the chair collapsing.

The chairs were sold exclusively at Hobby Lobby stores nationwide from March 2013 to August 2013 for about $180. Consumers should immediately stop using the recalled chair and return it to the nearest Hobby Lobby store. Con-sumers with a purchase receipt will receive a full refund and consumers without a receipt will receive a store credit. Contact Hobby Lobby Stores at 800-326-7931 between 9 a.m. and 6 p.m. ET Monday through Friday, or visit the company’s website at www.hobbylobby.com, and click on the “Recall” tab at the bottom of the page for additional infor-mation. Photos available at http://www.cpsc.gov/en/Recalls/2014/Hobby-Lobby-Stores-Recalls-Accent-Chairs/.

academy spOrts + OUtdOOrs recalls Girls BcG hOOded WindsUits dUe tO stranGUlatiOn haZard

About 6,600 Girls BCG Hooded Wind-suits have been recalled by Academy Sports + Outdoors, of Katy, Texas. The hooded windsuits have drawstrings in the hood around the neck area that pose a strangulation hazard to young children. In February 1996, The U.S. Consumer Product Safety Commission (CPSC) issued guidelines about drawstrings in children’s upper outerwear. In 1997, those guidelines were incorporated into a voluntary standard. Then, in July 2011, based on the guidelines and voluntary standard, CPSC issued a federal regula-tion. CPSC’s actions demonstrate a com-mitment to help prevent children from strangling or getting entangled on neck and waist drawstrings in upper outer-wear, such as jackets and sweatshirts. This recall involves Girls BCG Hooded Windsuits in sizes XS, S, M and L. The windsuits are made of water-resistant fabric and include a jacket and pants. The jacket has a front zip closure and elastic cuffs. The windsuits come in pink with black on the jacket at the top shoulder and a black side strip on the pants, gray with blue on the jacket at the top shoul-der and a blue side strip on the pants, and purple with lighter purple on the jacket at the top shoulder and a pink strip on the pants.

The jackets were sold exclusively at Academy Sports + Outdoors stores and on the firm’s website www.academy.com between September 2013 and October 2013 for about $20. Consumers should immediately remove the drawstring from the windsuits to eliminate the hazard, or return the garment to the place of pur-chase for a full refund. Contact Academy Sports + Outdoors toll-free at 888-922-2336, from 8 a.m. to 10 p.m. CT Monday through Saturday and from 9 a.m. to 8 p.m. CT on Sunday, or online at www.academy.com and click on Product Recall Info for more information. Photo avail-able at : ht tp ://w w w.cpsc.gov/en/Recalls/2014/Academy-Sports-Outdoors-Recalls-Girls-BCG-Hooded-Windsuits/

ram’s impOrts recalls Girls’ pink leOpard Jackets dUe tO stranGUlatiOn haZard

About 756 IQ Girls’ Hooded Pink Leopard Jackets have been recalled by Ram’s Imports Inc. of New York, N.Y. The jackets have a drawstring through the

hood which can pose a strangulation hazard to children. In February 1996, The U.S. Consumer Product Safety Com-mission (CPSC) issued guidelines about drawstrings in children’s upper outer-wear. In 1997, those guidelines were incorporated into a voluntary standard. Then, in July 2011, based on the guide-l ines and voluntary standard, CPSC issued a federal regulation. CPSC’s actions demonstrate a commitment to help prevent children from strangling or getting entangled on neck and waist drawstrings in upper outerwear, such as jackets and sweatshirts. This recal l involves girls pink hooded jackets. The jacket is 97 percent cotton 3 percent spandex. The jackets have pink and black leopard print drawstrings and pink and black leopard print on the sides of the jacket. “IQ girls” is pr inted on the sewn-in label located on the back of the neck. The model number included in the recall is 86557 and can be found printed on a sewn in label in the back of the neck. This recall involves jacket sizes girls 4 through 12.

The jackets were sold exclusively at Burl-ington Coat Factory stores nationwide October 2010 through August 2013 for about $15. Consumers should immedi-ately remove the drawstrings from the garment to el iminate the hazard or return the garment to Ram’s Imports Inc. for a full refund. Contact Ram’s Imports toll-free at 855-346-5950 between 10 a.m. and 5 p.m. ET Monday through Friday or online at www.ramsimports.com and click on “product recall” for additional information. Photos available at http://www.cpsc.gov/en/Recalls/2014/Rams-I mp o r t s - Re c a l l s - G i r l s - P i n k- L e op -ard-Jackets/

dOOdleBUtt recalls Jelly BeadZ JUmBO BeadZ and maGic GrOWinG FrUity FUn tOys dUe tO seriOUs inGestiOn haZard

About 1.500 Water-absorbing polymer toys have been recalled by Doodlebutt, Lehigh Acres, Fla. These soft and colorful products can be mistaken by a child for candy. When swal lowed, they can expand inside a child’s body and cause intestinal obstructions, resulting in severe discomfort, vomiting, dehydration and could be life threatening. Similar toys have not shown up on x-rays and needed surgery to be removed from the body. This recall involves Doodlebutt Jelly BeadZ Jumbo BeadZ and Magic Growing Fruity Fun water-absorbing


polymer toys. The toys can absorb from 300 to 500 times their weight in water and can grow up to eight times their orig-inal size.

Jumbo BeadZ toys are marble-sized water-absorbing balls. The toys were sold in a package consisting of three separate 2.5-inch x 2-inch clear, resealable bags inside a 3.5-inch x 4-inch clear, resealable bag. Each smaller bag had eight to 12 water balls of slightly different sizes. The balls came in clear, blue, red, orange, yellow, green and purple colors. The front of the larger bag had a multi-col-ored label with the words “Jelly BeadZ,” “Easy to fol low directions” and had instructions for use. Magic Growing Fruity Fun toys are water-absorbing poly-mers in the shapes of apples, bananas, butterflies, cherries, grapes, pineapples, roses and strawberries. They were sold in 3.5-inch x 4-inch, clear, resealable bag with seven assorted shapes in it.

They came in blue, green, orange, pink, red and yellow. The label on the front of the bag has the words “For ‘Kidz’ of All Ages,” “Jelly BeadZ,” “Bouncy and Beauti-ful,” “Colorfast,” “Non Toxic,” “Safe for the Environment,” and other words that describe uses for the product. The back of the package has two smaller labels. One label contains instructions for use and the other has a barcode with “XU00EC1JRN” beneath it. No incidents/injuries have been reported. However, The U.S. Consumer Product Safety Com-mission (CPSC) is aware of one incident with a similar water-absorbing polymer ball product in which an 8-month-old girl ingested the ball and it had to be surgi-cally removed and two cases outside of the U.S. with one death.

The balls were sold at Amazon.com from February 2012 through September 2013 for about $9. Consumers should immedi-ately stop using the recalled polymer products and take them away from small children. Consumers should contact Doodlebutt for a full refund. Consumer Doodlebutt collect at 239-313-9779 from 9 a.m. to 5 p.m. ET Monday through Friday or at e-mail [email protected]. Photos available at http://www.cpsc.gov/en/Recal ls/2014/Doodlebutt-Recal ls -Jel ly-BeadZ-Jumbo-BeadZ-and-Magic-Growing-Fruity-Fun-Toys/.

Once again there have been a large number of recalls since the last issue. While we weren’t able to include all of them in this issue, we included those of the highest impor-tance and urgency. If you need more informa-

tion on any of the recalls listed above, visit our firm’s web site at www.BeasleyAllen.com/recalls. We would also like to know if we have missed any significant recall that involves a safety issue. If so, please let us know. As indi-cated, you can also contact Shanna Malone at [email protected] for more recall information or to supply us with infor-mation on recalls.

XXI. FIRM ACTIVITIES

laWyers at Beasley allen receiVe special aWard’s

We are pleased to announce the co-litiga-tors of the year for 2013 at Beasley Allen are Kendall Dunson and Navan Ward, Jr. In the past several years, these lawyers have done an excellent job for their clients and for the firm. They have done especially well during the past year. We are most appreciative of their dedication and hard work.

The Litigator of the Year award is presented to the lawyer who demonstrates exceptional professional skill throughout the course of the year and best represents the firm’s ideal of “helping those who need it most.” This year two lawyers were chosen to receive the award. As usual, it was difficult to make the selection since there were so many other lawyers who had performed very well during the year.

KEnDAll DunSOn

Kendall works in the firm’s Personal Injury / Products Liability section. He has worked on numerous cases aimed at compensating clients for human losses and also at corporations to manufacture safer products. Kendall was a member of the trial team that tried a wrongful death lawsuit against a corporate defendant resulting in a $2.5 million verdict, the largest jury verdict in Selma, Ala. That verdict influenced the corporate defen-dant to outfit its entire f leet of trucks with audible backup alarms.

Kendall handled the bus accident case in Huntsville, Ala., that involved in the death of four students and numerous injuries to other students. The suit resulted in the cancelation of the con-tract between the County and the defen-dant, which was responsible for safely transporting students to school.

Kendall was also lead counsel in a mari-time lawsuit resulting in a $5.75 million verdict for the children who lost their father. He was co-counsel in a products case tried with Chris Glover in Georgia recently that resu lted in a $4.639 million verdict.

nAvAn WARD

Navan works in the Mass Torts Section. Currently, Navan is the firm’s lead lawyer in the metal-on-metal hip implant litiga-tion, which involves thousands of victims who have defective hip implants causing severe pain, metal poisoning, and in some cases revision surgery. These defec-tive hip devices are manufactured by various companies, such as Johnson & Johnson and DePuy Or thopedics, among others.

Navan was selected to serve on the Plain-tiffs Steering Committee (PSC) for the DePuy Hip Implant Recall Multi-District Litigation (MDL), as well as to the PSC for the Pinnacle hip replacement MDL. He also serves as Co-Chair of the DePuy Metal-on-Metal Hip Implant Litigation Group for the American Association for Justice (AAJ).

Navan also has been selected to serve on the PSC for the Biomet M2a Magnum Hip Implants Product Liability Litigation. He Navan was involved in the recent $2.475 billion settlement from DePuy Orthopae-dics, a subsidiary of Johnson & Johnson, for claims involving the defective ASR hip implant parts, which is part of the metal-on-metal hip implant litigation.

Navan was also heavily involved in with the hormone replacement therapy (HRT) l itigation, representing hundreds of women who were diagnosed with breast cancer as a result of ingesting these com-bination hormone medications. His trial team was responsible for obtaining a $72.6 million verdict for three hormone therapy clients in a case that was tried in Philadelphia.

Beasley Allen also selected Lawyers of the Year in each of the firm’s four sections. Those lawyers selected were:

Chris Glover, Personal Injury Section Lawyer of the Year

Chris is currently working on cases involving 18-wheelers and heavy truck accidents, as wel l as single-vehicle crashes. Chris was part of the trial team that secured a $4.639 million verdict from a Georgia jury against seat belt man-


ufacturer Key Safety Systems. This was an extremely important verdict in the automotive industry because the verdict rendered was against a component level manufacturer (Key Safety Systems) rather than the automobile manufacturer.

Chad Stewart, Fraud Section Lawyer of the Year

Chad is focused primarily on Medicaid Fraud L it igat ion, and he has been involved in several multi-million dollar settlements, as well as a $38.2 million dollar verdict. These cases, referred to as AWP cases, have been successful ly handled in eight states.

leigh O’Dell, Mass Torts Section Lawyer of the Year

Leigh is working on cases involving transvaginal mesh. Transvaginal mesh, also known as bladder sling, is used to treat common pelvic floor disorders such as pelvic organ prolapse and stress u r i na r y i ncont i nence. Compl ica -tions include erosion of the device into vaginal tissue resulting in pain, inconti-nence, infections and hemorrhaging. Many women have required multiple sur-geries to remove the mesh. Some cases have been involved fatalities. Leigh was appointed to the Plaintiffs’ Steering Com-mittee for all four ongoing multidistrict litigations, filed against mesh manufac-turers American Medical Systems, Boston Scientific Corp., Johnson & Johnson, and C.R. Bard.

John Tomlinson, Toxic Torts Section Lawyer of the Year

John is currently involved in the pursuit of claims for several individuals and busi-nesses against BP and other responsible parties as a result of the Gulf of Mexico oil spill. He has worked long and hard on behalf of his clients in the BP litigation. John has spent a tremendous amount of time in New Orleans where this litigation is being tried.

Each of these four lawyers has done an excellent job in their section. We are very thankful for them and for their hard work and dedication to their clients.

Firm actiVities

You may recall that we mentioned last month that the staff and lawyers at Beasley

Allen would be supporting five groups over the Christmas holidays. Wendi Lewis supplied the results of this hard work and I am highly pleased with all that was done. The projects were highly successful, lots of folks benefited, and our firm was blessed to have been able to help them.

Capitol Hill nursing Home

Capitol Hill is a nursing home in down-town Montgomery. Each Christmas they put up an Angel Tree with the resident’s Chr istmas wish l ist. Beasley A l len employee Theresa Perkins led the cam-paign again this year with great success. Beasley Allen staff and lawyers adopted 150 residents! That means 150 people, who might not have received a gift, a card or even a visit during Christmas, knew that someone really cares for them at this most special time of year. Thank you, Theresa, and everyone who adopted an angel from Capitol Hill.

Friendship Mission

For many years Willa Carpenter has led the blanket and jacket drive for the home-less served by Friendship Mission. Each year we are so proud of what Willa is able to accomplish with the help of Beasley Allen staff and lawyers. This year is no exception. Willa collected 139 items for the homeless that can be worn or used by them. This will benefit folks in real need on a daily basis. In addition to these th ings, dozens of toi let r ies were given. We appreciate Willa’s hard work and also the participation by our staff and lawyers who contributed to such a worthy cause.

Adullum House

This year the children of Adullum House voted to go on a trip to Gatlinburg, Tenn., instead of receiving presents for Christ-mas. This was the first time many of the children have been on a vacation or a family trip. Fifty-seven children and adults made the trip. Thanks to Angela Talley and all of the staff and lawyers at Beasley Allen who contributed. Angela was able to take a nice gift card to help with incidentals along the way.

united Cerebral Palsy Christmas Casual Day

Beasley Allen employees helped raise funds and awareness for United Cerebral

Palsy of Central Alabama (UCP) by par-ticipating in Christmas Casual Day on Dec. 13. According to UCP leadership, our firms staff and lawyers donated more than any other participating group in the Central Alabama region! Project orga-nizer Mandy Cook was delighted at the response and she thanked everyone for their suppor t. This was a tremen-dous effort.

Family Sunshine Center Christmas

In addition to our Thanksgiving dinner project, Angela Talley organized the effort to provide food for six families from the Family Sunshine Center who needed our help and blessing over the Christmas holidays. Lawyers adopted families and donated non-perishable food products, turkey and ham to ensure these families would have food on the table this year. The Family Sunshine Center provides a safe haven for women and their children who are victims of domestic violence. Six worthy families did not go hungry during the holidays because of the generosity of our lawyers and the hard work by Angela.

It’s a good feeling to know that our staff and lawyers supported each of the projects men-tioned above. They showed their concern for folks who needed help during the holiday season and went the extra mile to make sure the projects were successful. This sort of things is an indication that our folks under-stand the real meaning of Christmas.

XXII. SPECIAL RECOGNITIONS

a triBUte tO Oakley meltOn

My very good friend Oakley Melton, Jr., died recently. Oakley was the founder of the highly successful and well-respected Montgomery law firm Melton, Espy & Williams, P.C. He was a highly respected lawyer and had a distin-guished career. But Oakley may be better known among sports fans in Alabama for another organization he started - the Alabama-Auburn Perfect Attendance Club. While still a student at the University of Alabama and Presi-dent of the Student Government Association, Oakley played a role in reviving the Alabama-Auburn football rivalry in 1948. It’s hard for today’s fans to imagine an SEC football season without the Iron Bowl. But actually, the two


teams did not play each other for 41 years fol-lowing a dispute between the two schools. When the r iva l r y was revived, Oak ley attended 63 consecutive Iron Bowls. He began keeping track of others who faithful ly attended the games, creating the Alabama-Auburn Perfect Attendance Club. Oakley’s perfect attendance streak ended in 2011 because of his declining health.

Oakley’s firm, Melton, Espy & Williams, rep-resented other lawyers and judges, quite often, earning Oakley the designation as “the lawyer’s lawyer.” Oakley was a tremendous courtroom lawyer and enjoyed a great career. He was elected President of the Montgomery County Bar in 1974 and as President of the Alabama State Bar in 1978. His major accom-plishment as Bar President was to successfully propose mandatory continuing legal educa-tion for Alabama lawyers, a program that is still in place today. During his career, Oakley also served as Chairman of the Supreme Court Advisory committee, which created and adopted the current Alabama Rules of Civil Procedure. He was a trusted advisor to five Alabama governors and several lieutenant gov-ernors, as well as legislators and members of trial and appellate courts.

Oakley was truly a “giant” in the legal pro-fession. He was also a good man in every respect and is a man who will be sorely missed. Oakley is survived by his wife of 62 years, Melba Studdard Melton, and by his chil-dren, daughter Ree Smith (Sage); son Oakley Melton III (Diane); daughter Marcia Hudson (Adams); daughter Lee Hayes; and son Ben Melton. He also had eight grandchildren and three great-grandchildren.

XXIII. FAVORITE BIBLE VERSES

Congresswoman Martha Roby, who repre-sents the 2nd Congressional District, furnished a verse during the week before Christmas. Jesus’ message in John 16:33 gives each of us hope for the New Year and beyond.

I have said these things to you, that in me you may have peace. In the world you will have tribulation. But take heart; I have overcome the world.

John 16:33

John Ed Mathison, who retired as Senior Pastor of Frazer United Methodist Church several years back, furnished some timely verses for this issue. John Ed is still very active in a number of groups and organizations. His

verses give all of us great hope and assurance when we face the trials and tribulations of everyday life.

Put on the whole armor of God, that you may be able to stand against the wiles of the devil. For we do not wrestle against f lesh and blood, but against principalities, against powers, against the rulers of the darkness of this age, against spiritual hosts of wicked-ness in the heavenly places. Therefore take up the whole armor of God, that you may be able to withstand in the evil day, and having done all, to stand. Stand therefore, having girded your waist with truth, having put on the breastplate of righteousness, and having shod your feet with the prepara-tion of the gospel of peace; above all, taking the shield of faith with which you will be able to quench all the fiery darts of the wicked one. And take the helmet of salvation, and the sword of the Spir it , which i s the word of God; praying always with all prayer and supplication in the Spirit, being watchful to this end with all persever-an c e an d s upp l i c a t i on fo r a l l the saints—

Ephesians 6:11-18

Browning Wood, who serves as Youth Min-ister at St. James United Methodist Church, sent in a verse for this issue. Browning is doing a great job with the young people at our church. He intends on becoming a pastor.

For to me, to live is Christ, and to die is gain.

Phil. 1:21

Russ Abney, a lawyer in our firm’s Mass Torts Section, says that in his opinion, the message found in Matthew 25:34-41 is the essence of Christianity. He says these verses exemplify the primary struggle many Chris-tians have and that’s to remain humble and to treat those around us who are most in need as we would treat Christ. Russ says it’s hard for him to imagine how much better off mankind would be if Christians around the world all aspired to this standard in their daily lives. In the 25th Chapter of Matthew we are told:

Then the King will say to those on his right, “Come, you who are blessed by my Father, inherit the kingdom pre-pared for you from the foundation of the world. For I was hungry and you gave me food, I was thirsty and you gave me drink, I was a stranger and you welcomed me, I was naked and you

clothed me, I was sick and you visited me, I was in prison and you came to me.” Then the righteous will answer him, saying, “Lord, when did we see you hungry and feed you, or thirsty and give you drink? And when did we see you a stranger and welcome you, or naked and clothe you? And when did we see you sick or in prison and visit you?” And the King will answer them, “Truly, I say to you, as you did it to one of the least of these my brothers, you did it to me.”

Matthew 25:34-41

Andrew Brashier, a lawyer in our Consumer Fraud Section, furnished two timely verses for this issue. He says these verses have long been his favorite due to Jesus cutting to the core issue for all of us: do we really follow His Way?

See, I have set before you today life and good, death and evil. I call heaven and earth to witness against you today, that I have set before you life and death, blessing and curse. Therefore choose life, that you and your offspring may live, loving the Lord your God, obeying his voice and holding fast to him, for he is your life and length of days, that you may dwell in the land that the Lord swore to your fathers, to Abraham, to Isaac, and to Jacob, to give them.

Deuteronomy 30:15; 19-20 (ESV)

For what does it profit a man to gain the whole world and forfeit his soul?

Mark 8:36 (ESV)

Dr. John Kline, a professor at Troy Univer-sity, also sent in two verses. John teaches a course on leadership at Troy and I have had the honor of speaking to his classes for a number of years. It’s a course that helps young people get ready to take their place in the real world.

Jesus said to him, “I am the way, the truth, and the life. No one comes to the Father except through Me.”

John 14:6

For to this you were called, because Christ also suffered for us, leaving us an example, that you should follow His steps.

1 Peter 2:21

Beverly Larkin, who works in our firm’s Accounting Department, supplied a verse that goes right along with our firm’s Christmas


spirit as evidenced by the projects mentioned in this issue.

The generous will prosper; those who refresh others wil l themselves be refreshed.

Proverbs 11:25

Jeremy Smith was youth minister at St. James United Methodist Church before moving to Niceville, Fla. He now serves as Teaching Pastor at the Niceville United Meth-odist Church. It was really good hearing from Jeremy. He sent in a verse that contains the words Pau l pr ayed over the Chu rch in Ephesus.

I prayed that God would bless you “in the heavenly realms with every spiri-tual blessing in Christ.” That He would “give you the Spirit of wisdom and reve-lation, so that you may know him better. I pray also that the eyes of your heart may be enlightened in order that you may know the hope to which he has called you, the riches of his glorious inheritance in the saints, and his incomparably great power for us who believe.”

Ephesians 1:3, 17-19

XXIV. CLOSING OBSERVATIONS

alaBama leads the natiOn

Alabama is ranked first in the nation again, but unfortunately this time it’s not in football. One point separated Alabama from Indiana on the 2013 State Scorecard compiled by the Brady Campaign to Prevent Gun Violence and the Law Center to Prevent Gun Violence. That single point made all the difference in the final rankings by these two groups. Indiana was given a D minus for the gun safety laws in their state. Alabama, with one less point than the Hoosier State, topped the list of the 26 states that received an F. To put it bluntly, my home state f lunked the Brady Campaign’s annual 100 point test with flying colors. In a report released last month, along with the scorecard, it’s explained that the Law Center and the Brady Campaign join forces every year to rank each state based on 30 different crite-ria related to their regulation of guns and ammunition.

Laws that the two gun control groups deem effective in reducing violence earn points for a

state. The stronger the law, the more points awarded. Points were taken away for legisla-tion deemed irresponsible or dangerous. Only 15 states earned a C or higher. Even so, the organizations said states nationwide improved their laws in 2013 despite widespread gun control measures failing at the federal level in April. That pretty well tells us that reasonable gun control legislation hasn’t done very well in most states. Still, in my opinion, any prog-ress is a good thing. The report said:

When Congress failed to pass any new gun violence prevention legislation in 2013, including the overwhelmingly popular legislation to expand back-ground checks , s tate legis latures answered the call. Twenty-one states enacted new laws to curb gun violence in their communities, with eight of these states passing major reforms.

California earned the highest score of any state in the nation, an A minus, receiving 89 points of out 100. On the other end of the gun legislation spectrum, Arizona claimed the lowest score in the report, earning only 6 points. Here in Alabama, legislators didn’t fare much better than Arizona in terms of points, but Alabama’s 17.5 out of 100 ranked our state number 25 in the nation and with the highest score that still merited an F on the scorecard.

I fully realize that the National Rifle Associ-ation’s (NRA) power and control, both in Washington and in most state legislative bodies, will keep any reasonable gun control legislation from passing. One would think that legislators would do whatever is needed to assist in curbing the gun-related violence that has become all too commonplace in the U.S. But until the American people get involved and demand action, the NRA will continue to run the show, and the killings will continue. We owe it our children and grandchildren to do the right thing on the issue of gun control. We should urge our lawmakers to pass reason-able gun control legislation, starting in Wash-ington. We can’t afford to allow the NRA to continue to exer t its control over the politicians.

We should all remember how the country reacted after the massacre of 20 children and six adults at Sandy Hook Elementary School in Newtown. That tragic event spurred politi-cians nationwide to take the legislative action to regulate the use and possession of guns and ammunition. It appeared at the time that something would happen. But months have passed and the public outcry has pretty much gone away. So has the legislative push by our elected officials in Washington. There was activity on the state level, but what was done helped the NRA and the gun leaders. A New York Times study shows of the more than 100

state bills that have been signed into law this year, most of them loosen restrictions on guns, not tighten them.

According to the infographic on the Times website, around 1,500 bills to somehow regu-late firearms or ammunition were introduced at the state level in the past year. Remember the Sandy Hook killings were carried out in December 2012. Only 109 of those bills have been signed into law, and only 39 of those leg-islate tougher restrictions.

The other 70 laws, including Alabama Act 2013-283, actually remove legislative obstacles for gun owners. In Arkansas, for instance, a law went into effect allowing guns in private elementary and high schools that are operated by religious organizations. In West Virginia, law-abiding holders of a concealed carry permit no longer have to undergo an addi-tional background check when purchas-ing firearms.

In Connecticut, the site of the killings, laws regulating guns and ammo were tightened considerably. Also, California and New York passed laws that increased government regula-tion. Private sales in New York are now illegal without a federal background check. In Con-necticut, high-capacity magazines and more than 100 firearms were banned as assault weapons. In Alabama, SB 286 was adopted and signed into law in May. It went into effect as Alabama Act 2013-283 on August 1. It was a major overhaul of the state’s gun regulations, especially concerning the issuance of con-cealed carry permits.

While many celebrate the new gun law in Alabama and others like it across the country as protections of the Second Amendment right to bear arms, others lament the lack of tighter widespread regulations at the state and federal levels. I hope that we will see some reasonable legislation passed this year both in Washing-ton and in the states. We can honor the Consti-tution and still protect innocent people from becoming victims of mass murders in our schools, malls and theaters.

Sources: AL.com and The New York Times

mOnthly reminders

If my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then will I hear from heaven and will forgive their sin and will heal their land.

2 Chron 7:14


All that is necessary for the triumph of evil is that good men do nothing.

Edmund Burke

Woe to those who decree unrighteous decrees, Who write misfortune, Which they have prescribed. To rob the needy of justice, And to take what is right from the poor of My people, That widows may be their prey, And that they may rob the fatherless.

Isaiah 10:1-2

I am still determined to be cheerful and happy, in whatever situation I may be; for I have also learned from experience that the greater part of our happiness or misery depends upon our disposi-tions, and not upon our circumstances.

Martha Washington (1732 - 1802)

The only title in our Democracy supe-rior to that of President is the title of Citizen.

Louis Brandeis, 1937 U.S. Supreme Court Justice

The dictionary is the only place that success comes before work. Hard work is the price we must pay for success. I think you can accomplish anything if you’re willing to pay the price.

Vincent Lombardi

XXV. PARTING WORDS

I asked Willa Carpenter, who serves as Human Relations Liaison at Beasley Allen, to write the “Parting Words” for this issue. Willa has been with the firm for more than 20 years and she is a most important person with our firm. In fact, many consider Willa’s role to be the most important one in the firm. She is an inspiration—because of her spiritual nature—to our staff and lawyers. Willa is always avail-able to help folks work through problems they are encountering. She has a God-given talent that allows her to really “help folks.” The fol-lowing is her timely message for the New Year.

As we face a new year, naturally we begin to think about change and

making things better. Each year, many of us enjoy setting new goals for our-selves to achieve in the coming year, such as becoming financially stable, improving our health, or getting a pro-motion at work. While achieving any one of these goals can bring satisfac-tion, it is only temporary. But God’s Word says there is a newness that will last for all eternity!

2 Corinthians 5:17 says, “Therefore, if anyone is in Christ, he is a new cre-ation; old things have passed away; behold, all things have become new.” We are made new by the covenant created through Jesus Christ. As this new year unfolds, let’s strive to walk in the eternal newness that is found only in our Lord and Savior, Jesus Christ! My hope for each of you is that you will have a blessed New Year.

I join with Willa in wishing for all of our readers and their families a blessed New Year!

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No representation is made that the quality of services to be performed is greater than the quality of legal services performed by other lawyers.

Jere Locke Beasley, founding shareholder of the law firm Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., is one of the most successful l it igators of all t ime, with the best track record of verdicts of any lawyer in America. Beasley’s law firm, established in 1979 with the mission of “helping those who need it most,” now employs 44 lawyers and more than 200 support staff. Jere Beasley has always been an advocate for victims of wrongdoing and has been helping those who need it most for over 30 years.

No representation is made that the quality of services to be performed is greater than the quality of legal services performed by other lawyers.

Jere Locke Beasley, founding shareholder of the law firm Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., is one of the most successful l it igators of all t ime, with the best track record of verdicts of any lawyer in America. Beasley’s law firm, established in 1979 with the mission of “helping those who need it most,” now employs 44 lawyers and more than 200 support staff. Jere Beasley has always been an advocate for victims of wrongdoing and has been helping those who need it most for over 30 years.

Jere Locke Beasley, founding shareholder of the law firm Beasley, Allen, Crow, Methvin, Portis & Miles, P.C. is one of the most successful litigators of all time, with the best track record of verdicts of any lawyer in America. Beasley’s law firm, established in 1979 with the mission of “helping those who need it most,” now employs over 75 lawyers and more than 200 support staff. Jere Beasley has always been an advocate for victims of wrongdoing and has been helping those who need it most for over 30 years.

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