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 DECEMBER  2008

 ⇒How far can it tilt without falling over? “The Supreme Court has embarrassed Texas with its demonstrable tilt toward insurers and other corporate defendants… the court has gone out of its way to protect businesses from lawsuits to a degree that even the Texas Legislature and the defense bar can't stomach.” Excerpted from: Editorial -Texas Supreme Court's tilt toward insurers causes concern, Austin American Statesman, 12-1-08

⇒Is this intended to be reassuring?  “Traces of the industrial chemical melamine have been detected in samples of top-selling U.S. infant formula, but federal regulators insist the products are safe.”

“The Food and Drug Administration said last month it was unable to identify any melamine exposure level as safe for infants, but a top official said it would be a "dangerous overreaction" for parents to stop feeding infant formula to babies who depend on it.”   Excerpted from: FDA finds traces of melamine in US infant formula By MARTHA MENDOZA and JUSTIN PRITCHARD, Associated Press 11-26-08


NOVEMBER 2008

⇒Just the facts. “Plaintiffs won in more than half of state court civil trials in 2005 and were more likely to get a favorable verdict in bench than jury trials, according to a new U.S. Department of Justice report.”

“The report was released Tuesday by the Bureau of Justice Statistics at the U.S. Department of Justice. The study is the first nationally representative measure of general civil bench and jury trials in state courts”.

“Out of the 14,000 civil trials that went in the plaintiffs' favor, punitive damages were awarded in about 5 percent of the cases, with $64,000 as the median punitive damages award”.

“The report also pointed to a major drop in the number of civil trials, with numbers decreasing by 52 percent from 1992 to 2005 in the nation's 75 most populous counties. In these counties, the median final award also decreased, from $72,000 in 1992, to $43,000 in 2005”. Excerpted from: DOJ Study: Plaintiffs Win More Than Half of State Court Civil Trials, by Vesna Jaksic, National Law Journal, 10-30-08

⇒ME TOO! ME TOO!  “When the government said it would spend $700 billion to rescue the nation’s financial industry, it seemed to be an ocean of money. …it suddenly looks like a dwindling pool.”

“…The shrinking pie — and the growing uncertainty over who qualifies — has thrown Washington’s legal and lobbying establishment into a mad scramble.”

“The lobbying frenzy worries many traditional bankers — the original targets of the rescue program — who fear that it could blur, or even undermine, the government’s effort to stabilize the financial system after its worst crisis since the 1930s.”

“The …law gave the Treasury broad authority to decide how to spend the $700 billion…cash infusions are available to “qualifying U.S. banks, savings associations, and certain bank and savings and loan holding companies, engaged only in financial activities.”

“That definition has grown to include private banks and insurers like Allstate and MetLife, which own savings and loans.” Excerpted from: Lobbyists Swarm the Treasury for Piece of Bailout Pie, By MARK LANDLER and DAVID D. KIRKPATRICK, New York Times 11-12-08

⇒Hungry Hungry Hippos.  "On Friday and over the weekend, four insurance companies with no history of banking joined the hippo parade as they scrambled to buy up small savings-and-loans. Doing so allows the insurers to qualify as banks and thus become eligible for federal bailout money".

"While some of the targeted thrifts are tiny, the insurers acquiring them all have been hit hard by the credit crisis and need capital injections -- and, apparently, government assistance -- to survive". Excerpted from: Insurers Jump on the Bailout Bandwagon, Zach Lowe, The Am Law Daily, 11-18-08


OCTOBER 2008

⇒But your honor, they don’t like us.  A widely watched trial over Chevron's Nigerian operations featured a new online frontier Monday in the battle to influence the hearts and minds of potential jurors.

While imposing a general gag order, Northern District of CA Judge Susan Illston ordered Chevron to take down a paid Google link sponsored by the company... which directed Internet surfers to a Chevron-created Web site that provided information about the incident at issue in trial.

The company placed the link to appear when anyone Googled the name of the lead plaintiff, Larry Bowoto, plaintiffs argued.

…[the] defense attorney…defended the sponsorship, pointing out that nine of the first 10 Google search results for the lead plaintiff's name produced Web pages friendly to Bowoto.
"Are they sponsored links?" Illston asked.

[the defense attorney] said he didn't think so, and the judge indicated that that's what concerned her.

"To me, that's as sure a thing as giving a statement to the press," Illston said. When [defense attorney] responded that Chevron was "way behind," the judge cut him off.

"Way behind in fighting the case in the press? We're not going to fight the case in the press," she said… Excerpted from: Judge: Chevron Must Remove Paid Google Link Tied to Search of Plaintiff's Name by Dan Levine, The Recorder, 10-28-08

⇒No life boats? Toss the patients overboard.  “Doctors and hospital executives say collecting payments from insurers has become an expensive headache that is driving up the nation's healthcare costs.”

“Two decades ago, the top 10 insurers covered about 27% of all insured Americans. Today, four companies…cover more than 85 million people, almost half of all those with private insurance.”

“More than 30 cents of every dollar spent on healthcare goes to administration, according to a 2007 survey of insurance and medical executives. That translates to about $630 billion this year.”

“Patients are often dragged into the financial tug of war…When their bills are rejected or reduced by insurers, doctors often try to recover unpaid balances from patients, even if the amounts exceed what they are responsible for paying under their insurance plans.” Excerpted from: The battle of the medical bills, By Daniel J. Costello, Lisa Girion and Michael A. Hiltzik, LA Times 10-23-08

⇒Singing a different tune: The Hypocrisy Boogie.  "Corporate executives routinely sing the praises of arbitration clauses…that typically bars a consumer from going to court in the event of a dispute."

"Now three law professors suggest that companies are far less likely to use arbitration clauses in contracts with each other than they are in contracts with consumers."

"The findings by Professor Eisenberg, whose co-authors on the most recent study were Geoffrey P. Miller of New York University School of Law and Emily Sherwin of Cornell Law School, might prove provocative. Their study, which was described in an article this summer in the University of Michigan Journal of Law Reform…"

"They found that companies included mandatory arbitration clauses in 75 percent of consumer agreements but in just 24 percent of contracts over all."

"Companies say that arbitration is "a fair and cost-saving process," [Eisenberg] continued. "If they believe that is true across the board, why don’t they insist on it when they contract with each other?" 
Excerpted from: Companies Unlikely to Use Arbitration With Each Other, By JONATHAN D. GLATER,  NYT, 10-6-08

⇒Not if, but when. " The federal judge overseeing BP's criminal case stemming from the deadly 2005 explosion at its Texas City refinery said Tuesday that whatever she decides on a pending plea deal won't guarantee safety at the plant."

"I can't make that plant safe," U.S. District Judge Lee Rosenthal…"

"…David Senko, who was in California at the time of the blast but was the supervisor of the 15 contractors who died, told Rosenthal that no dollar amount or penalty was large enough for the lax safety systems that led to the deaths of 15 and injuries of many more… "There will be another blast. Let's hope it won't have the same result as March 23, 2005." [he said]

"Three people have died at the refinery since the blast."  Excerpted from: BP judge says she can't 'make that plant safe' by Kristen Hayes, Houston Chronicle 10-7-08

⇒Cloaks and dollars.  Lou Dobbs: "The reality is that these two organizations [Business Roundtable & US Chamber of Commerce] are working against the American people and have been for some time and haven't got the guts to come on the show and talk about the issues. They are behind the scenes stifling the voice of American business. Think about the last time you heard a CEO step up in front of a camera and mike actually express himself or herself on any issue of great public policy importance and it's disgusting that these associations are just really -- they're cloaks, they're veils, for the self-influence of business. It's a shame". Excerpted from: CNN - LOU DOBBS TONIGHT Transcript, September 29, 2008


SEPTEMBER  2008

 ⇒Ouch, that could possibly hurt. "Congress wants Wall Street to feel it where it hurts: the wallet."
"The stratospheric pay packages of Wall Street executives have become a lightning rod issue as Congress crafts a $700 billion bailout for financial firms.""The moves in Washington mirror the popular outcry…over the prospect of Wall Street's tarnished titans walking away with tens of millions of dollars a year while taxpayers pick up the tab."
 
"But Wall Street, its lobbyists and trade groups are waging a lobbying campaign to try to fight compensation curbs."
 
"Wall Street has been the top tier of the corporate pay range…Its bonus system…has been singled out as an incentive for executives to expand their highly profitable business in exotic securities and ignore the risks."  Excerpted from: In Bailout Furor, Wall Street Pay Becomes a Target, By STEVE LOHR New York Times, September 23, 2008 (The Los Angeles Times contributed to this report).
   
⇒Not bad pay for a summer job.  "American International Group head Robert Willumstad, named CEO in June… may get a $7 million exit package after a Fed takeover forces him out...Willumstad is entitled to keep a $4 million cash bonus, 1 million shares, six months' severance salary and life insurance and other benefits worth about $40,000, said David Schmidt, a senior consultant at New York-based executive pay firm James F. Reda & Associates."   Excerpted from: EX-AIG CEO EYES $7M EXIT, Bloomberg 9-18-08
  
⇒Post-Katrina: Insurance Industry Prevails.  "Initially, the court victories came easily. On the stand, telling their tales of battling to get their insurance claims paid, the homeowners almost always won, often with bad-faith penalties."
 
"But on appeal, in both federal and state courts, insurers prevailed, winning key legal precedents and knocking down monetary judgments if the parties had not settled."
 
"In Louisiana, most of the major questions of insurance law have been decided, and courts sided with the industry."  Excerpted from: In the hard fought battle after Hurricane Katrina of homeowner versus insurance company By Rebecca Mowbray, The New Orleans Times-Picayune, August 27, 2008 
  
⇒Like to gamble? Charter a bus.  "Two of every five Texas charter bus companies have been ordered off the road in the past two years…About 300 bus companies have permission to operate in Texas. But during the past 24 months, another 201 companies have had their authorization revoked, said Carol Davis, director of the Texas Department of Transportation’s motor carrier division."
 
"Some of those grounded companies have resurfaced under new names, she said."
"Church groups and other clubs often use motor coaches for long trips."
Excerpted from: About 200 bus companies ordered off Texas roads in past two years officials say By Gordon Dickson, Fort Worth Star Telegram, August 26, 2008

AUGUST 2008
 
⇒ICK – what’s that smell?  "The state has ordered two Lyondell Chemical Co. subsidiaries to pay a total of $6.5 million in pollution fines, Texas Attorney General Greg Abbott said Monday."
 
"Equistar Chemicals LP and Millenium Petrochemicals were charged in December 2005 after a Texas Commission on Environmental Quality investigation revealed that seven Lyondell facilities released harmful emissions, including volatile organic compounds, nitrogen oxides and carbon monoxide over an extended period of time."
 
"The investigation found that the plants in La Porte, Channelview and Chocolate Bayou either ignored long-term pollutant releases or did very little to remedy chronic problems over time."  Excerpted from: Pair of Texas firms hit with $6.5 million in pollution fines, Austin American Statesman (Associated Press), August 25, 2006  
 
⇒Lawsuits: "A Vital Deterrent"  "The Food and Drug Administration "is in no position" to guarantee drug safety, the editors of the New England Journal of Medicine said in a friend-of-the-court brief."
 
"Lawsuits can serve as "a vital deterrent" and protect consumers if drug companies don't disclose risks. Without the discoveries dredged up by plaintiffs' lawyers through liability litigation, "the FDA would be stripped of an essential source of information that the agency has consistently relied on when making its regulatory decisions, and the American public would be deprived of a vital deterrent against pharmaceutical company misconduct."  Excerpted from: Top medical journal advises Supreme Court not to bar lawsuits over FDA-approved drugs By RICARDO ALONSO-ZALDIVAR, Associated Press, August 15, 2008
 
⇒Tragedy of self-policing.  "In a scene that has become all-too familiar, one of the nation's largest mobile cranes came crashing down at a Houston oil refinery…killing four workers. With an alarming number of crane-related deaths and crashes…serious questions have been raised about the safety of the nation's construction cranes."
 
"Texas is one of 35 states that does not require crane operators to be licensed. The [OSHA] requires cranes to undergo annual inspections, but it is up to crane owners in the state to police themselves."
Source: Houston Refinery Latest in String of Crane Collapses ABC News Internet Ventures 7-19-08
 
⇒Technology age side effects of prescription drugs.  "Health and life insurance companies have access to a powerful new tool for evaluating whether to cover individual consumers: a health "credit report" drawn from databases containing prescription drug records on more than 200 million Americans."
 
"When an insurer makes an online query about an applicant, Ingenix or Milliman's [data providers] servers scour the data and within minutes or less return reports to a central server at the [insurance] company. Then comes the analysis.  ...[the tool] provides insurers a "pharmacy risk score," or a number that represents an "expected risk" for a group of people…"
 
"Some health experts worry that insurance companies can make faulty assumptions by looking at prescription drug records…"I had a patient on Amitriptyline for migraines and they were denied life insurance because it's also an antidepressant," said physician Kate Atkinson of Amherst, Mass. Another patient was on Prozac -- not for depression, but for menopausal hot flashes. "I wrote an appeal letter, and they still wouldn't give it to her…"  Excerpted from: Prescription Data Used To Assess Consumers Records Aid Insurers but Prompt Privacy Concerns by Ellen Nakashima, Washington Post, August 4, 2008
 
⇒Trust us we have your families’ best interest at heart. "Congressional negotiators agreed yesterday to a ban on a family of toxins [phthalates] in children's products... The ban…would have significant implications for U.S. consumers, whose homes are filled with hundreds of plastic products designed for children that may be causing dangerous health effects…"
 
"The ban…reflects a growing body of scientific research showing that children ingest the toxins…Used for decades in plastic production, the chemicals are now thought to act as hormones and cause reproductive problems, especially in boys."
 
"It also signals an important crack in the chemical industry's ability to fend off federal regulation and suggests that the landscape may be shifting to favor consumers...the chemical industry waged a costly battle to defeat it. .., led by Exxon Mobil, [it] spent a chunk of its $22 million lobbying budget… to try to prevent any ban."
 
"Whitehouse spokesman said...President Bush opposes the ban but that it is too early to say whether he will veto the measure, which is part of popular legislation to reform the Consumer Product Safety Commission."  Excerpted from: Lawmakers Agree to Ban Toxins in Children's Items, By Lyndsey Layton, Washington Post, July 29, 2008

JULY  2008
  
⇒Who knows you best?  "New Technology: The consolidation of insurance industry claims databases has put a valuable new tool in the hands of investigators. ClaimSearch is the world’s largest comprehensive database of claims information…Predictive Knowledge, collects and analyzes information that can be disseminated to insurers…to detect, investigate and prevent insurance fraud…a programcalled CATfraud, identifies potentially fraudulent catastrophe/weather-related insurance claims."
 
"…Software can verify the accuracy of information provided by prospective policyholders… insurers can use a number of different software tools, ranging from voice stress analysis and “red flag” identifiers to datamining and database searching."
 
"Privacy: An emerging issue for insurers using data sharing services is…privacy. Financial institutions, including insurers, must respect the privacy of their customers and protect their personal information, a practice that may deter efforts to combat fraud."  Excerpted from: Issues Updates - Insurance Fraud, February 2008, Insurance Information Institute
 
⇒What else lies beneath?  "…the State Department of Health plunged (Galveston) bay fishermen into a new reality: Human action has tainted the bay's biology…The warning shows how hard it can be to repair environmental damage, years after the practices that caused it were stopped.
According to an unprecedented alert from the Texas Department of State Health Services, speckled trout and catfish from any part of Galveston Bay are deeply contaminated with two toxic compounds…the agency found that both fish had high levels of PCBs and dioxins."
 
"The contaminant levels in those two species were so pervasive and dangerous that healthy adults should not eat more than eight ounces of either fish per month."
 
"PCBs and dioxins were banned in this country decades ago… the compounds tripped off environmental alarms because they didn't degrade.
A generation later, that alarm is justified. It will be years before these compounds disappear from the bay and its wildlife, said Elena Craft, a toxicologist from the Environmental Defense Fund."
 
"Communing with nature, unfortunately, now requires constant awareness of civilization." 
Excerpted from: Editorial - Hold the Line, Heedless practices of Texas industry now  poisoning sport fishing industry, Houston Chronicle 7/9/08
 
 
⇒Preempting Due Process.  "A leading drug company may be poised to win a landmark legal victory next fall. (Wyeth v. Levine)…A medical-device company won such a victory in April. In Riegel v. Medtronic the Supreme Court determined that a product-liability lawsuit against Medtronic in a state court was preempted because the device had received FDA approval."
 
"Previous administrations and the FDA considered tort litigation to be an important part of an overall regulatory framework…product-liability litigation by consumers was believed to complement the FDA's regulatory actions and enhance patient safety."
 
"Drug and device companies have chosen an inauspicious moment to attack the right of patients… A series of pivotal reports on patient safety… has put the issue of patient safety in the national spotlight."
 
"Why should doctors be concerned about preemption? In stripping patients of their right to seek redress through due process of law, preemption of common-law tort actions is not only unjust but will also result in the reduced safety of drugs and medical devices for the American people."  Excerpted from: Perspective - Why Doctors Should Worry about Preemption, Gregory D. Curfman, M.D., Stephen Morrissey, Ph.D., and Jeffrey M. Drazen, M.D, New England Journal of Medicine Vol 359: 1-3, July 3, 2008
 
 
 
 
⇒"we are programmed to receive, you can check out any time you like, but you can never"…whine or criticize.  "Across Texas over a recent three-year period, hospitals reported that 53 newborns with no obvious birth defects died unexpectedly. Medical blunders killed or crippled another 78 patients."
 
"Foreign objects… left in 218 patients. More than 120 times, surgeons cut into the wrong body part or wrong patient."
 
"Which hospitals bungled their jobs? The state knows, but, by law, you can't find out…the state no longer requires hospitals to own up to their mistakes, even anonymously. The Legislature let the law expire."
 
"Hospitals have been able to avoid making more than their errors public. Complaints, accreditation inspections, staffing numbers, infection rates — information that could help the public evaluate patient care — are also off limits."
 
"Public reporting sometimes "has a chilling effect," said Charles Bailey, general counsel for the Texas Hospital Association. So while hospitals are starting to open up, he said, "there's some reluctance because they're worried about getting sued or other implications."  Excerpted from: Texas hospitals wary of making complaints, errors public, by Darren Barbee, Ft Worth Star Telegram, 7-1-08, *Hotel California, The Eagles 1977

JUNE 2008
 
⇒After 20 Years: Residents left with a “knife in the gut.”  "When the Exxon Valdez ran aground in 1989, Andrew Wills was a successful herring fisherman in Alaska and the owner of three canneries. The 11 million gallons of crude oil from the tanker destroyed the herring population and Mr. Wills’s fishing career, so he borrowed money to open a bookshop, a cafe and the Mermaid Bed and Breakfast…"
 
"Mr. Wills had expected to use his $85,000 share of the $2.5 billion punitive damage settlement against Exxon to pay off some of his debts. The United States Supreme Court decision on Wednesday cutting the damages to around $500 million means Mr. Wills will receive only $15,000, he said.
“After everything we’ve been through, that’s barely enough to cover payroll for a month,” he said. “This is a knife in the gut.”
 
"Across Alaska, plaintiffs in the long-running lawsuit against Exxon reacted to the decision with sorrow and rage, numbed only by relief that their legal saga is finally over."  Excerpted from: In Alaska, Rage and Sorrow Over Decision By CHRISTOPHER MAAG, NY Times 5-26-08
 
⇒Arbiters for Justice or Debt Collectors? "What if a judge solicited cases from big corporations by offering them a business-friendly venue... teaming up with the corporations' outside lawyers? …the same corporations [who] helped pay the judge's salary?"
 
"Yet that's essentially how one of the country's largest private arbitration firms operates. …Often without knowing it, individuals agree in the fine print of their credit-card applications to arbitrate any disputes... NAF, which dominates credit-card arbitration, operates a system in which it is exceedingly difficult for individuals to prevail."
 
"…behind closed doors…NAF sells itself to lenders as an effective tool for collecting debts. As of September, 2007, a NAF PowerPoint presentation aimed at creditors [potential clients] and labeled "confidential" promises "marked increase in recovery rates over existing collection methods."
 
"At times, NAF does this kind of marketing with the aid of law firms representing the very creditors it's trying to sign up as clients [The] marketing presentation, boasts that creditors may request procedural maneuvers that can tilt arbitration in their favor. "Stays and dismissals of action requests available without fee when requested by Claimant—allows Claimant to control process and timeline," the talking points state."  Excerpted from: Banks vs. Consumers (Guess Who Wins), Business Week, 6-5-08
 
⇒Lone Remaining Remedy: File a Complaint.  "After the Texas Legislature gave the board additional funds for enforcement in 2005,…the board [Texas Medical Board] has stepped up its investigations. By the end of fiscal year 2007, the board was investigating 1,300 cases…opened about 2,600 more, compared to 694 investigations and 1,900 open cases in 2004, according to TMB's Web site."
 
"The number of complaints the board receives from patients and family members also has increased dramatically, said Mari Robinson, the agency's director of enforcement. In the last two years alone, complaints have increased by 62 percent… “Most of the complaints are about quality of care,” she said."
 
"Robinson said several factors could be contributing to the increase… the number of doctors in Texas is on the rise,…because the Legislature has imposed caps on medical malpractice damages in Texas, more patients and family members are filing grievances with the board rather than filing lawsuits. And finally, more patients know about the complaint process than in the past, she said."   Excerpted from: Complaints against doctors increase By MELISSA McEVER, Valley Morning Star, June 11, 2008
 
 ⇒Ambushed: KBR Employees.  "They deserve their day in court. Thanks to an appeals court…perhaps they finally will."
 
"The lawsuit was brought on behalf of (former KBR) drivers whose fuel convoy was ambushed on April 2004 (in Iraq)…Six drivers were killed. One is still missing… Fifteen were wounded."
 
"At issue is whether by questioning KBR's decision to send drivers into harm's way, the former workers are actually challenging military decisions or second-guessing their employer's judgment."
 
"…five years into the war… with the broadest deployment of civilian contractors in our military history, we're still dancing around the issue."
We hire civilians for work that used to be handled by the military, yet we offer them neither the protections given soldiers nor the rights of private employees."  Excerpted from: Loren Steffy Column, KBR workers caught up in quagmire, Houston Chronicle June 2, 2008