The entire 30 minute investigative report on Allstate, State Farm and McKinsey which ran on CNN last Sunday will re-air on Monday February 26 sometime during the 2 hour Anderson Cooper show which starts at 10:00pm Eastern time [8pm Mountain time] pending some breaking news story like Anna Nicole rising from the dead or such.
Adam Cohen: Alabama’s deadly tort reform
By Adam Cohen –
Published 12:00 am PST Thursday, January 18, 2007
BIRMINGHAM, Ala. — Jack Cline is in a hospital here fighting for his life, stricken by leukemia that he says he got from exposure to benzene at his factory job. In most states, he would be able to sue the companies that made the benzene. But Alabama’s all-Republican, wildly pro-business Supreme Court threw out his case.
In a ruling that would have done Kafka proud, the court held that there was never a valid time for Cline to sue. If he had sued when he was exposed to the benzene, it would have been too early.
Alabama law requires people exposed to dangerous chemicals to wait until a “manifest” injury develops. But when his leukemia developed years later, it was too late. Alabama’s statute of limitations requires that suits be brought within two years of exposure.
Cline, who says God has kept him alive so he can challenge the unfairness of Alabama’s law, told his lawyer, Robert Palmer, to keep fighting. Palmer started a statewide petition drive, wrote a flurry of Op-ed pieces and asked the court to reconsider. In an extraordinary move, it reopened the case and heard new arguments last spring.
Big business and its allies are loudly promoting “tort reform” by arguing that America is drowning in frivolous lawsuits. They are winning the public relations battle. Everyone knows the story of the woman who sued McDonald’s because she was burned by hot coffee.
But few people know of the Jack Clines — and there are many of them — who have been denied their day in court.
Corporate America — with its large contributions to political and judicial candidates, and its top-dollar lobbyists — has had remarkable success persuading legislatures and courts to erode the bedrock principle of civil law: When people are injured, they are entitled to sue for damages.
At the top of industry’s list of tactics is immunity — the rather brazen notion that companies should be shielded from lawsuits no matter how negligently or dishonestly they act. Gun makers and dealers, notoriously, persuaded Congress in 2005 to give them immunity when their guns are used to maim and kill.
Industries are also winning immunity at the state level, and attracting far less attention. Pharmaceutical companies pushed through a law in Michigan protecting them when their drugs injure or kill people, as long as the drugs were approved by the Food and Drug Administration. There is no reason FDA approval, a deeply flawed process, should be a shield.
When corporations do end up in court, they have lowered the stakes substantially by undermining punitive damages, which have long been one of the main ways that society deters people from unreasonably putting others at risk. The U.S. Supreme Court struck a major blow against punitive damages a decade ago, ruling that it was unconstitutional for a jury to award $2 million in punitive damages against an auto dealer that knowingly sold a damaged, repainted BMW as new.
Lower federal court judges, many of whom have been screened by the Bush administration for pro-business sympathies, and state court judges, many of whose campaigns were bankrolled by big business, are eagerly joining in. So are state legislatures. Last month Ohio’s Legislature voted to cap punitive damages in many cases against paint companies — which have been accused of selling lead-based paint that causes retardation in children — at a paltry $5,000.
Perhaps the most insidious tactic for slamming the courthouse door on injured people is the stealth use of “pre-emption.” When federal and state laws conflict, the federal law pre-empts, or invalidates, the state law. The Bush administration is taking advantage of this principle by issuing weak regulations in a wide range of areas to wipe out stronger state-law protections. When people try to sue, they may find that their legal rights have been swept away. Among the areas the administration has focused on are automobile roof crushes and mattress flammability.
These incursions on the right to sue, taken together, are a serious assault on justice. In the most extreme cases, they may also be unconstitutional. Cline’s lawyer, Palmer, argued that preventing him from ever suing denied him his rights under the Alabama constitution to seek a legal remedy for his injuries.
Palmer was encouraged when the Alabama Supreme Court reopened the case. He also saw it as a good sign when it scheduled oral arguments for a special public session on a law school campus, an indication it considered the case particularly significant. The arguments went well. “Questions asked by several justices indicated they were troubled by the legal Catch-22,” The Birmingham News reported.
The court ruled this month. It affirmed the dismissal of Cline’s case by a 5-4 vote. If Cline wanted to challenge the unfairness of the rules, it said, he would have to take it up with the state Legislature — a body every bit as pro-business as the Alabama Supreme Court.
Palmer intends to take the case to the U.S. Supreme Court. In the meantime, Cline can take some small comfort in the close vote.
Four Alabama justices, at least, would not accept a legal system that told people like him that “no matter when” they “file the action, it is either too soon or too late.”
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Wednesday, February 07, 2007
Insurance companies fight paying billions in claims
Put yourself in the driver’s seat of this accident. You are heading down the street when a truck comes out of nowhere and slams into the right side of your car. The damage to the vehicle is obvious: dents across the passenger door.
You are hurt too, thought it’s not obvious how much: a slight cut above your eye, an ache in the neck.
Your doctor says your spine was injured, you have soft muscle tears, and the pain in your neck mostly likely is whiplash.
It’s going to need therapy, she says, and some time off work to heal. And in the end it’s going to cost you $15,000 in medical payments and another $10,000 in lost wages, because you took so much time off work.
But when you send the $25,000 bill to the insurance company of the person who hit you, the insurance company says it’s only going to pay you $15,000. You can take it or leave it.
What do you do?
That’s what producer Kathleen Johnston and I have been investigating for the last 18 months — accidents most of us don’t pay attention to, the fender-benders we pass by without even slowing down. In part, we looked at how Allstate handled the claim of one woman, Roxanne Martinez. Her car was hit in Santa Fe, New Mexico. Her medical bills and lost wages added up to $25,000.
Allstate offered $15,000 to settle. Roxanne Martinez didn’t know what to do.
Sure, she could try to find a lawyer. But if you were in her shoes, would you? After all, you are fighting insurance giant Allstate over a $10,000 difference. What attorney is going to take on that case?
Martinez’s case represents what 10 of the top 12 auto insurance companies are doing to save money. And if you are in a minor impact crash and get hurt, former insurance industry insiders say, insurance companies will most likely try doing the same thing to you: delay handling your claim, deny you were hurt and defend their decision in drawn-out court battles. It’s the three Ds: delay, deny and defend.
That, in a nutshell, is the strategy adopted by several major auto insurance companies over the past ten years, a lot of lawyers, former insurance company insiders and others tell CNN.
With nowhere to go, Allstate and others bet you’ll take what they offer and walk away. It’s right in the training manuals we obtained from Allstate: force “smaller walk-away settlements.”
Shannon Kmatz, a former claims adjuster for Allstate, told us she would offer as little as $50 dollars in some cases. Poor people would take it, she said, fearing that if they didn’t, they’d get nothing at all.
Roxanne Martinez didn’t take it. She sued and a jury awarded her $167,000 dollars. But that verdict took three years.
Allstate is betting you won’t wait, you won’t sue and you’ll take what you get and walk-away. And that, say our experts, has been a good bet for Allstate and others. Accident victims have been walking away from billions of dollars that insurers now keep for themselves.
Allstate would not grant an interview or answer our questions. Instead, they sent an e-mail saying they didn’t think CNN would deliver a fair report. I hope you will watch our report tonight and decide for yourself who is being fair.
Posted By Drew Griffin, CNN Correspondent: 3:11 PM ET