TOV Injury and Safety Blog

Million Dollar Advocates

        Firm attorney Dan O'Neil recently joined George Thompson as a member of the Million Dollar Advocates Forum.    The Forum is limited to attorneys who have served as "principal counsel" in cases where they have won million dollar or multi-million dollar verdicts, awards and settlements.  The Forum was created in 1993 to acknowledge "excellence in advocacy" and fewer than one percent of the nation's attorneys qualify for membership.  Our firm has achieved more than ten qualifying recoveries in contested settings.  The firm or individual attorneys in the firm have also been listed in the Bar Register of Preeminent Lawyers, the LawDragon 500, and the Superlawyers' "Top Lawyers in Michigan".  It has been accorded the highest possible rating for skill and ethics from the most prominent rating organization in the country and it was a finalist for the Primerus Group's annual Community Service Award.

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Judicial activism in the premise liability sphere

          The would-be "conservatives" on the Michigan Supreme Court have displayed their judicial activism in yet another context that prejudices consumers and victims for the benefit of the Chamber of Commerce.  This activism was recently emphasized when the Court summarily reversed a decision of the Court of Appeals.

          The common law of negligence starts from the basic assumption that every person must act reasonably toward others.  The Courts then carve out some exceptions from this "duty of reasonable care" where exceptional public policy reasons dictate that a person should owe no duty to others.  Our Supreme Court, since Justice Engler's personal appointees have taken control, has indulged in a prolonged binge of withdrawing rights from consumers.  That assault on civility has also included eliminating a merchant's duty to act reasonably to protect customers from the criminal act of another.

          The Supreme Court's majority, in the MacDonald v. PKT, Inc., case, acknowledged that "ordinarily [a merchant's duty to respond to criminal acts occurring on the premises] would be a question for the factfinder".  For the past several decades, the courts in Michigan had left the determination to that simple test.  In MacDonald, however, the majority went on to hold (in an exercise of activism it did not acknowledge) that "...in cases in which overriding public policy concerns arise, this Court may determine what constitutes reasonable care."  The majority then held that "...as a matter of law, fulfilling the duty to respond requires only that a merchant make reasonable efforts to contact the police."

          In September of 2007 the majority went one step further in Lamar v. Ramada Franchise Systems, Inc.   The Court of Appeals had relied upon the above language to establish the principle that whether the merchant made "reasonable efforts to contact police" was a question for the fact-finder--not a question of law for the Court.  The Supreme Court majority overruled the Court of Appeals and decided the case as a matter of law, despite questions regarding how long the confrontation on Defendant's premises was on-going and how long it took Defendant's employees to respond.  Where the MacDonald case had insisted that a merchant had no duty to anticipate criminal acts, to intervene to stop criminal acts, or even to maintain security personnel where criminal acts might be expected to occur, the majority in Lamar went further, holding that a victim cannot dispute whether the Defendant was unreasonably slow in calling authorities.

           It is not clear to us what public policy could possibly justify immunizing anyone in our society from acting "reasonably" to prevent or respond to criminal or violent behavior.  We would submit that there is an overwhelming public policy in favor of requiring everyone to act reasonably to prevent or minimize crime and violence.  Not only do we disagree with the Court's assessment of "overriding public policy concerns", but we also despise the majority's arrogation of the right to make such "overriding" changes in established law.  These are precisely the kind of decisions which, in other contexts, the judicial "conservatives" have challenged.  It is another evidence of the principle that many so-called "judicial conservatives" are simply activists with a particular agenda--or a particular constituency to protect.

More on Mine Safety

     After concluding that the status quo (relying on the Federal Government to regulate mine safety) was "unacceptable", the Utah state government has created a regulatory commission to investigate mining safety issues.  States with significant mining activity such as West Virginia and Kentucky had previously decided that federal activity in this field was inadequate and created state safety regulations.

        One of the more recent complaints lodged by critics against the federal government's management of mine safety is the Mine Safety and Health Administration's failure to put into effect the federal Miner Act which was passed by Congress in 2006.  In related news, Congress was forced to subpoena records of Elaine Chao, the Bush Administration's labor secretary, because she refused to comply with Congress' request for documents related to the department's oversight of the Utah mine where the nine fatalities occurred.  The mine had just previously been approved for a dangerous form of "retreat" mining, although the owner claims that it was not engaged in retreat mining at the time of the collapse.  (Of course, he also claims that the collapse was caused by an earthquake that professional seismologists did not detect.)

George Thompson among "Law Dragon 500"

       Our partner, George Thompson, was recently advised that he is again a finalist for identification as one of the 500 top lawyers in America, according to the LawDragon rating agency.  He already enjoys the agency's top rating.  This is not a paid endorsement, nor did we arrange or nominate Mr. Thompson for this identification.

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Nursing home liability

     The New York Times conducted a study of 1200 nursing homes purchased by large private investments groups since 2000.  It compared the data it collected against data collected by the government on 14,000 other nursing homes.  When this data comparison was completed, it showed that nursing homes purchased by private investment groups fared worse on 12 of 14 indicators used to track ailments of long-term residents.  (In other words, on virtually every indicator of chronic illness (i.e., bedsores, need for restraint, easily preventable infection), these residents fared worse than average.)  Many of the same homes scored above the national average before they were "privatized" to achieve maximum profit for investors.

        An example offered by the Times to document the trend of minimizing services in order to maximize profits is the Habana Health Care Center in Tampa, Florida, with 150 beds.  It was struggling economically in 2002 when it and 48 other nursing homes were purchased by private investment firms.  The new managers quickly cut the number of clinical registered nurses in half and cut other costs by substantially reducing budgets for nursing supplies, residential activities and other services.  Investors were quickly earning millions of dollars a year from the 49 homes, but as the Times put it "residents fared less well".  Over three years 15 residents allegedly died from negligent care, according to family members.  The Florida agency that regulated Habana cited it numerous times for under-staffing and inadequate safety and care standards.  The Times quoted one woman whose mother died of a large bedsore that became contaminated by feces. 

        Unfortunately, the same "reorganizers" who do the cost-cutting also create a corporate shell-game to immunize the operators from litigation.  In Habana, for example, a principal in "Formation Properties" unabashedly defended the corporate structure that immunized his mangagement from legal responsibility, claiming that "we should be recognized for supporting this industry when almost everyone else was running away".    At Habana, this "support" meant owning the property as Formation Properties I, leasing it to Florida Health Care Properties, which became Epsilon Health Care Properties who subleased the operation to Tampa Health Care Associates (affiliated with Warburg Pincus--a large private equity firm).  Not only is it impossible to identify who is making staffing and budgeting decisions, in this structure, it is also impossible for injured residents to create a collectible judgment---or for the government to identify whether products and services are being purchased "at arms' length" prices from wholly-owned subsidiaries and associates.

        Putting the lie to Formation Properties' claim that this was a neglected industry, the president of Fillmore Capital Parnters, which recently purchased a large nursing home chain, claims that "I've never seen a surer bet", because of the aging of American baby-boomers.  Private investment companies now own almost ten percent of nursing homes, nationwide, according to the Times.  Reports filed by these facilities document a profit of more than $1700.00 per resident.  On average, they are 41 percent more profitable than the average facility.

        Sixty percent of the homes purchased by private investment groups have immediately cut the number of registered nurses employed.  According to government statistics, these homes provided only about 3/4 of the registered nursing time deemed essential by the government and other privately- and publicly-owned homes.  Registered nurses are the professionals most relied upon to provide professional care in these homes, and homes purchased by private investment groups provided only one R.N. per 20 residents, about 35 percent below the national average.  The typical number of "serious health deficiencies" was almost 19 percent higher in homes purchased by private investment groups, according to the Times' study.  The Times offered operators this data and the opportunity to comment, but virtually all declined.  One offered a mixture of explanations and excuses and the suggestion that conditions and staffing were improving at its facility.

        The Times also quoted a number of Florida lawyers on the impact of these corporate structuring changes on accountability.  One noted that he had to sue 22 different entities before the responsibile parties were brought to justice.  Another had incurred $30,000.00 in costs and substantial delay in attempting to identify the entity responsible for a resident's death.   In one case, a family eventually chose to accept a $25,000.00 collection when they could not collect their full verdict of $400,000.00.

       State regulators experience the same problems.  Homes owned by Formation and operated by the investment group Warburg Pincus are among the worst in Florida, in terms of "nutrition, hydration, restraints and abuse, and quality of care", but at the same time at Habana one Warburg Pincus affiliate paid nearly $600,000.00 to another Warburg Pincus affiliate for "management advice and services"--at the same time it was cutting resident services to the bone.

        While the "privatizers" who claim these corporate shell games were necessary to preserve nursing homes from excessive litigation, outside experts point to the fact that the same Formation company sold Habana and 185 other facilities to General Electric in 2006 for a price of $1.4 billion.  A prominent industry analyst estimated that the Formation investors earned more than $500 million dollars from that sale---in four years.

        One would think that we could protect our elderly better than this.  Litigation should be available to prevent abuse and abusive management, however, if some form of regulation of litigation is necessary, it should be achieved in the public sector with thoughtful and reasonable parameters.  "Reform" should not be achieved through corporate obfuscation in a manner designed to make illegal or unethical profits undecipherable. 

          For that matter, doesn't this industry report demonstrate yet again that services are not automatically improved when a private profit has to be scraped off the top in an unregulated manner?  If an industry was already struggling, the introduction of an increased demand for profit for investors may be inimical to the services provided.  While we need to scrutinize the provision of governmental and non-profit services carefully to prevent waste, simply "privatizing" that decision-making process is not the proper answer where essential public services may be short-changed in order to extract higher profits.

Crib safety and product liability in Michigan

        Over the weekend, numerous newspapers reported the enormous crib recall initiated--belatedly--by the manufacturer and the CPSC.  By some estimates, this recall was delayed for many months through the efforts of the manufacturer and ineptitude--or worse-- at the Consumer Product Safety Commission.  Newspaper accounts made it clear that the American company--Simplicity--and its Chinese manufacturer had produced cribs that were not reasonably safe for children.  In some cases, the cribs were dangerous because they were assembled up-side down by parents who could not adequately understand the enclosed instructions, and a strangulation hazard was created.  In other documented cases, the same strangulation hazard developed without any error in assembly. 

        The "3 in 1" cribs are known to be responsible for at least two deaths and numerous injuries.  Another design of crib sold by the same company caused a child in Northern Michigan to suffer a leg fracture, when a toddler with one foot through the railings slid out of the designed "entry" to the crib.  Of course, since Michigan does not allow suit against the retailer of a defective product, Michigan residents cannot sue the sellers of these defective products, and thus the retailers have no incentive to assure that they are selling safe products.  If Simplicity was not negligent in its own design of the Chinese-made product, Michigan residents would have no alternative for justice, inasmuch as the Chinese government does not allow lawsuits to be served on Chinese manufacturers.

Michigan Super Lawyers: The Top Attorneys in Michigan

     For the second straight year, an agency has canvassed more than 30,000 Michigan lawyers in an attempt to identify the best of the best.  For the second year, it has named our partner, George R. Thompson, as one of the "Top Attorneys in Michigan" in its publication that accompanied the September 12 edition of the Detroit News.  While no "beauty contest" of this nature is entirely reliable, this is not a "paid" or "purchased" endorsement and the entire membership of the State Bar is invited to participate.  All candidates are evaluated on 12 indicators of peer recognition and professional achievement.  These factors include Verdicts and settlements, scholarly lectures and writing, honors and awards, special certification and community service, among other qualities.  No other Plaintiff [victim's representative] personal injury attorney from the Traverse City area was identified in either year.

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Whistleblower verdict

     Two City of Detroit police officers' claims that they were punished for investigating misconduct in the Mayor's office were vindicated this week, when a jury awarded each man more than two million dollars in damages.  The officers' attorney noted that both men could have settled the claims for less but felt stubbornly driven to establish the truth of their claims. 

        In typical fashion, the employer claimed that one of the men was fired for incompetence and "insubordination", and that the other man had not been retaliated against.  The jury was able to see through these defenses, which are common in employment disputes.  We don't know what evidence was offered in the case, but both men probably had stellar annual reviews until this controversy came up:  that would be common in our experience.  In any event, what a waste of public dollars:  too bad the verdict can't be paid out of the Mayor's pocket.

Trucking regulation and safety in Mexico

     The wisdom of acting slowly to open our borders to Mexican trucking firms was confirmed last night as news of a spectacular explosion made its way to the United States.  The cause:  a collision on a northern Mexican highway involving a truck transporting explosives.  Thirty-seven people were killed and dozens were injured.

        The Bush Administration has been very reluctant to regulate safety or industry in the United States, and very eager to open our borders to international commerce.  Sadly, we cannot trust this administration to put into place the necessary safeguards to assure that our highways will remain safe in the process.  Most of us don't know whether the Mexican trucking industry is safe--or for that matter whether it is vulnerable to terrorism.  If our borders are to be opened to international trucking, we have the right to know that it will be under the strict control of a government that is genuinely willing to regulate it.  The Bush Administration has proven itself not only unwilling to engage in legitimate regulation on behalf of consumers, but frankly willing to sneer at regulation---by placing a fox in every available henhouse (refer to previous weblog entries addressing appointments in the regulation of consumer products, mine safety, and trucking safety, to name just a few).  Congress is doing the right thing by attempting to put the brakes on international trucking deregulation.

The Michigan Supreme Court's statistics

     As reported by Michigan Lawyer's Weekly in August, the Supreme Court published 47 full opinions during its 2006-7 term.  In seven of those cases, it issued holdings that overturned 8 prior Michigan Supreme Court precedents.  Nearly all of these precedents were over-turned by the same four member majority who were hand-selected by Governor Engler and appointed to the appellate courts.  Most folks (and all jurists) would agree that overturning a precedent in every sixth decision is evidence of a highly "activist" judiciary.

Insurance complaints arising out of Hurricane Katrina

  The State of Louisiana has compiled some interesting statistics with respect to the insurance response to Katrina.  The hurricane created hundreds of anecdotal claims of under-payment, reneging on promises, delayed or deliberately underestimated repairs and mistreatment.  The hard numbers are less open to interpretation and over-simplification.  Some 6600 insurance disputes have landed in the local Federal  Court with 3700 still pending.  State courts are handling several thousand more.  4700 formal complaints were filed with the Louisiana Department of Insurance in 2006, alone, and for the six months after the hurricane, the department fielded 20,000 complaint calls per month.  The state estimates that, on average, homeowners have been underpaid by $5700.00 each, in comparison to what the state believes they should have received.  A group of former adjusters has filed a federal whistle-blower lawsuit, contending that insurers, including State Farm and Allstate, deliberately and improperly shifted damages from their own coverage to federal flood insurance programs.  A federal investigation into similar claims arising out of Mississippi is pending.  It bears notice that the property and casualty insurance industry reported profits of $48 billion in 2005 and $68 billion in 2006.

Government regulation of toys

      American toy manufacturers'  call this week for government regulation of imported toys is ironic for more reasons than one.  It is ironic, first, because the manufacturers are now begging the Federal government to act to protect consumers from the manufacturers, themselves.  It should be an embarrassment to the administration that it must be persuaded, by the perpetrators themselves, to act to fulfill its legal duty and to protect innocent kids.

      One reason for the Consumer Product Safety Commission's inadequate response is the Bush Administration's stated preference for "voluntary compliance" and self-regulation.  Another reason is the Administration's neutering of the CPSC.  In the 70s it employed nearly a thousand workers; it now employs only 420, 12.4 percent fewer than it employed in 2002.  In the past two years alone, its budget has been cut ten percent.  It employs only one person to test suspected defective toys.

     The request by manufacturers for government regulation is also ironic because as recently as this summer, Mattel was virulently resisting government regulation and reporting.  It has been fined twice in the recent past for violating the rule requiring a manufacturer to report potentially dangerous products within 24 hours.  Mattel's arrogance and disdain for its own little customers has been evident in several recent situations.  It waited almost two years before reporting a fire hazard in Power Wheels motorized cars.  It waited months to report loose screws in its "Little People Animal Sounds Farm". 

        More recently, Mattel sold thousands of toys containing tiny magnets which can puncture a tot's stomach lining if swallowed.  If I remember correctly, at least one death in Chicago has been associated with these magnets.  While Mattel recalled 2 million "Polly Pocket" figurines with the magnets last November, another 18 million toys containing the same magnets were not recalled until August of 2007--nine months later.

        A recent example of the Bush administration's disdain for protection of consumers--and of its "fox in the henhouse" approach to regulation--comes from the investigation of ATVs.  At a 2005 meeting of top safety experts, statistics showed that in 2004 a total of 44,000 children were hurt while riding ATVs.  Almost 150 kids were killed.  At the urging of national pediatrician associations and ER doctors, the group was considering a ban on sales of adult-size ATVs for use by children under 16:  the evidence shows that these machines are too heavy, too large and too fast for children to control.  Unfortunately, when it came time to vote, the Bush appointee as the CPSC's "director of compliance", John Mullan, a former lawyer for the ATV industry, "hijacked" the meeting, "distorted" the statistics and defeated the petition.  Polaris, one of Mullan's former clients, manufactures ATVs.

        The CPSC's poison prevention expert resigned in 2005 after a rule requiring child-proof caps on hair-care products that had burned toddlers was delayed to investigate the added cost to manufacturers--a cost estimated at 2 cents per container to protect kids from a known toxin.  [Parenthetically, activist Michigan judges have determined that children injured in this fashion do not have a viable claim against the manufacturer.]  The FDA spends more than twice the CPSC's annual budget of 62 million dollars, regulating animal feed and drugs.  The Bush-appointed director conceds that the CPSC investigates only 10-15 percent of injuries and deaths related to consumer goods.  It has closed a data base that previously collated information on burns suffered as a result of consumer products.  When a New York Harbor customs supervisor was asked when he had last seen a CPSC inspector, he estimated that it was eight months earlier; they "rarely show up".  One Agency employee, speaking anonymously for fear of retribution, said that the down-sizing of the agency "is a complete disaster...there is just no other word for it."  Congress has proposed modest increases in the Agency's budget for next year:  the Bush administration has proposed additional cuts.

Microwave popcorn danger

     In a prior entry, we criticized the Bush Administration's tardiness in acting to protect employees exposed to diacetyl in the manufacture of "butter-flavored" popcorn.  We noted that a large number of employees exposed to this chemical had suffered permanent injury which pulmonologists had identified colloquially as "popcorn workers' lung".    Despite the growing evidence and its scientific acceptance within the medical field, the Bush Occupational Safety and Health Administration had refused to act.  Now, for the first time, physicians have also traced a consumer's lung injury to inhalation of diacetyl from microwave popcorn.  The victim was a 53-year old "popcorn addict" who routinely ate two bags per day.   His blood levels of diacetyl were similar to those experienced in plants where popcorn is manufactured.  When the man's specialist asked him to eliminate popcorn from his diet, his lung function improved.  OSHA has still not acted to protect workers who suffer this exposure on a routine basis.

A seventy-four year precedent overruled

  The four activist members of Michigan's Supreme Court struck again this week, when they over-turned a 74 year-old Supreme Court decision relating to workers compensation jurisdiction.  The injured worker involved was originally a Michigan resident who was hired by a Michigan corporation.  Eventually, he was transferred to a Florida work-site, where about ten years ago, he fell from a ladder suffering wrist and knee injuries.  His medical expenses and lost wages were covered by workers compensation, however, when he recently needed surgery, the employer relied on Florida workers compensation law to deny coverage.

        In approximately a dozen cases, beginning with a case in the 1940s, the Michigan Courts have followed a Supreme Court precedent awarding comp benefits (essentially medical expenses and 2/3 of lost pay for on-the-job injuries) to any worker employed by a Michigan company under a contract of employment that originated in Michigan.  The activist conservatives rejected almost 80 years of precedent and ignored the fact that the Legislature had 70 years to re-write the legislation if it disagreed with the Court's prior interpretation.  The four insurance sycophants held that Michigan's comp law protects only current Michigan residents--not employees who have been transferred to another state. Another victory for big corporations over the working stiffs of Michigan.