Archive for April, 2007

Another Insurance Settlement

April 30, 2007

Twenty-three BlueCross BlueShield plans settled a class action lawsuit on behalf of physicians for $128 million according to the Birmingham News.  Archie Lamb, of Birmingham, Alabama was the lead attorney for the plaintiffs.  The lawsuit was one of several against various insurance carriers.  Many have already settled for huge sums of money. 

Why would these insurance carriers settle for such large sums?  Apparently, their practices have not been on the up-and-up.  Obviously, for $128 million, the insurance carriers could easily cover the legal fees to fight such a “frivolous” claim, OR maybe the claims aren’t so frivolous.  It is a shame that it takes a lawsuit to force an industry to do the right thing.  Maybe trial attorneys aren’t so bad after all.  It seems as though the doctors didn’t think so in this case.

Just for Feet Settlement

April 25, 2007

In an unusual occurrence, the outside directors of Just for Feet have agreed to settle a lawsuit brought by Charles Goldstein, the bankruptcy trustee.  According to the Wall Street Journal, the directors agreed to pay $41.5 million to settle the claims which brings the total settlement for outside creditors to approximately $80 million (Deloitte & Touche agreed to a $24 million settlement, and $15 million was paid by the founder’s estate and his son).

Many are concerned that such a result broadens the usual narrow liability for outside directors.  However, according to one of the attorneys, Eric Breithaupt of the Birmingham firm Christian & Small, the company could have been saved if bankruptcy had been filed earlier.  Additionally, the trustee claimed that there were too many conflicts of interest which led to the company’s downfall.  Among them, Randall Haines was the President of Compass Bank which was also one of the company’s primary lenders. 

Clearly, this case stands for the premise that executives and directors of corporations must take an active roll to insure that conflicts are avoided and that decisions must be informed decisions, not blind ones.  Corporate decisions can be wrong as long as they are thoughtful and not fraught with conflict.

Costs to Care for the Disabled

April 25, 2007

The Associated Press has reported that more than 40 million Americans have some sort of disability, and with the baby boom generation aging, that number will grow significantly over the next 30 years.  This number may be somewhat misleading because many disabled individuals are in their situation as a result of the negligence and wrongful acts of others.  Instead of our government covering the costs to care for these unfortunate people, the person or company responsible (or their insurance carrier) should have to bear the costs of their care. 

The purpose of our tort system and insurance coverage is to shift costs to the appropriate party.  This system also provides an incentive for people and companies to act with reasonable care.  Why should our government be burdened with additional Social Security and Medicare costs when someone else’s negligence caused the disabling injury?

Computer Data Security

April 25, 2007

A lawsuit has been filed in Federal Court in Birmingham against the Veterans Administration over missing computer data.  This case stems from a missing external hard drive from a Birmingham VA office.  The hard drive contained personal, financial, and medical data on over 1.2 million individuals. 

As consumers and business owners, we all need to be aware of the proliferation of identity theft.  As such, we need to safeguard our personal information and make sure we take proper measures to secure the information of our clients and customers.

Drunk Driving

April 25, 2007

According to the Birmingham News, Governor Riley has awarded $73,487.00 in grants for police to target drunk drivers in six (6) counties:  Blount, Chilton, Jefferson, St. Clair, Shelby, and Walker.  This is a very good step taken by Governor Riley.  Drunk driving can cause horrific accidents and death as exhibited by a recent case we are handling where the drunk driver came across the median on Interstate 20 and hit our client head-on.  Our client has been permanently disabled and is in rehabilitation.  His family will never be the same.

Let’s applaud Governor Riley on this step and hope that it prevents future tragedies.

Wal-Mart Verdict

April 21, 2007

Greg Allen, of the law firm Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., obtained a $4 million verdict in Montgomery County, Alabama.  The case involved a tire tread separation on a Ford Expedition which caused the SUV to roll over and crush the roof of the vehicle.  Carolyn Thorne was left paralyzed as a result. 

Why was Wal-Mart a defendant?  Continental Tire Company of North America had issued a recall for the particular tire.  Notwithstanding the recall, the employees of Wal-Mart, who serviced Ms. Thorne’s Expedition on nine (9) occasions AFTER the recall, failed to notify her of the problem.  Apparently, Wal-Mart has a policy of only disclosing recalls on tires if Wal-Mart sold the tire.

Here is another occasion where a small effort could have prevented a huge injury.  Various government web sites show all of the product recalls (many appear on this blog).  All a company has to do is access its computers.  How much time would it have taken for Wal-Mart to check the model of Ms. Thorne’s tires in order to determine if a recall had been issued?  In fact, the Wal-Mart service department could probably have a notification automatically sent to them when a product has been recalled.  Ms. Thorne put her trust in Wal-Mart to properly service her tires.  She thought they were the professionals.  Unfortunately, for her and her family, Wal-Mart did as many companies do:  put the minimum effort into their service for the maximum price.

Is Your SSN Safe?

April 21, 2007

The Associated Press has reported that individuals who have received Agriculture Department grants since 1996 have had their social security numbers posted on a government web site.  These social security numbers were taken down last week, but in this world of technology, once that information is out there, it is out there.  You can’t get it back, and others can easily access it.  Just try going to www.archive.org.  This site will take you to almost any site which was ever posted on the web.

With the escalation of identity theft, it is imperative that companies and organizations safeguard their customers’, employee’s, and members’ personal information.  Identity theft is a known problem, and the failure to accept that fact and secure this type of information could, and should, lead to liability based upon the entity’s negligent and wanton conduct.  In addition, individuals have to take personal responsibility for this information as well.

In light of this recent incident, it is speculated that a federal law will be enacted requiring certain notification to individuals when such information is disclosed or stolen electronically.  35 states already have such a law.  Alabama has enacted the “Consumer Identity Protection Act”, but it does not require such notification.

Life’s Worth

April 15, 2007

What is a life worth?  Ask the families of the astronauts who perished aboard the space shuttle Columbia.  This is a very difficult question to answer when injury and death occur as a result of another person’s or company’s fault, but it is the only method we have for legal redress.  Obviously, we cannot bring people back or put individuals back to the position they were in before an accident so money compensation is all we have.

According to the Associated Press, $26.6 million was paid to the families of the astronauts, but this amount was not divided equally.  Jon Clark, the husband of astronaut Laurel Clark, was quoted as saying, “We had to prove our loved ones were worth something.”  Apparently, those astronauts with doctoral degress received a little more than those with masters degrees.  Should that matter when we are discussing human life?  Is a garbage collector worth less than a physician?  As far as income, yes.  However, a garbage collector may mean more to his family than the doctor.

None of that matters in Alabama because our wrongful death law is different from all other forty-nine (49) states.  In Alabama, the victim’s family can only claim punitive (punishment) damages for wrongful death.  Consequently, future income is irrelevant in a wrongful death claim in Alabama.  Does that make sense?  No, but that’s Alabama for you.

Costly Divorces

April 14, 2007

Big money divorces.  They make the money, and when the marriage doesn’t work out, the spouse makes it too.  When Michael Jordan’s divorce is complete, his ex stands to receive more than $150,000,000.00 according to Forbes Magazine.  In 1996, Neil Diamond paid an estimated $150,000,000.00 to his second wife, and Steven Spielberg had to pay about $100,000,000.00 to Amy Irving in 1989.  Can you say prenuptial agreement?

Government Caps on Damages

April 14, 2007

Jefferson County, Alabama agreed to settle a case where a child drowned at a county construction site.  The 8-year-old child road his bike into a puddle, and unbeknownst to him, it wasn’t a puddle but a four (4) foot crater filled with water.  As a result the child drowned.  The county and construction crews failed to put any type of barrier or warning signs around the puddle. 

The County recommended paying the family the maximum $100,000.00.  While this won’t bring the child back, it does make the County think twice the next time such a situation arises.  However, is $100,000.00 cap outdated?  Is $100,000.00 enough to deter negligent and irresponsible conduct?  Should governments even have immunities or caps on damages?  According to the family’s attorney, Barry Walker, this cap is not sufficient for such conduct.

Many other states around the country have raised their caps in order to at least account for inflation.  Not Alabama.  Like many legal areas, we remain in the minority of states on this issue.


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