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Top 10 Civil Justice Stories of 2014

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2014 is the year that will be remembered for Ebola scares, the Sochi Olympics and the rapid rise of Isis in the Middle East. Amidst these historic events there have been major civil justice stories here in the USA as well. 2014 featured shocking recalls, major consumer product defects and controversial major court decisions. For several years Patrick Austin and I have proudly compiled our list of the 10 major civil justice stories of the year, starting from 10 all the way up to the biggest story of the year at No. 1.

10. Missouri Supreme Court Strikes Down “Common Law” Case Punitive Damages Caps

Why It’s Big:

The Missouri legislature enacted a $500,000 punitive damages cap or ceiling creating an artificial limit on the punishment damages that juries in Missouri can award. The Missouri Supreme Court didn’t strike down the new punitive damages cap, but instead ruled that the state constitution, adopted in 1820, preserved all cases as they existed at common law, and this meant that the legislature had no power to change common-law actions to limit punitive damage awards.  The case before the Missouri Supreme Court involved a fraud claim and a $1 million punitive damages award. Doug Noland, the attorney who represented the consumer plaintiff in the test case, noted that the state’s punitive damage cap remains in place for causes of action created by the legislature, like human rights cases and awards for some deceptive merchandising practices. On the other hand, for any cases that existed under the common law, like negligence claims or fraud cases, no punitive damages ceiling is applicable in Missouri.

What Did We Learn?

The Missouri Supreme Court’s decision illustrates two points: (1) the common law is alive and well in our legal system and (2) just because a legislature codifies a punitive damages cap does not mean it will be applicable to common law cases if a state constitution preserved the common law in civil cases to be tried in the state.

Dig Deeper:

Missouri Supreme Court Strikes Down Punitive Damages Cap, Civil Justice Magazine, Sept. 19, 2014, http://civiljusticemagazine.com/2014/09/12/missouri-supreme-court-strikes-down-punitive-damages-cap/

 

9. Eleventh Circuit Appeals Court Upholds Portion of Florida’s Tort “Deform” Law Permitting Intimidation of Patient’s Treating Doctors

Why It’s Big:

The Eleventh Circuit appeals court presides over Florida and over nearby states.  The powerful appeals court recently upheld part of a 2013 Florida medical malpractice law that allows virtually unlimited “ex parte” communications (private contact without the adverse party’s presence) between attorneys representing any doctor who may have committed malpractice and a victim’s health care providers–during a 90-day “pre-suit period.” The law also allows these one-sided contacts with little notice to the victim’s lawyer. “This seems to be the trend—let’s punish the people who… assert their legal rights,” said David Buckner, the attorney for the plaintiff whose case came before the Eleventh Circuit. “It’s not a good direction for our civil justice system to be heading.”

What Did We Learn?

The ramifications of Florida’s horrific 2013 tort reform legislation continue to reverberate to this day, though the tort law changes were enacted in plain view of the public.  Consumers often fail to recognize in advance how the new civil tort changes would adversely affect their own rights. The Florida legislature handed the proverbial keys to the medical insurance and hospital industry. There’s no doubt that victims of medical malpractice in Florida face major hurdles to even get a case filed. And, as indicated by the Eleventh Circuit’s decision, during a “presuit period” the doctors and hospitals get the unfettered right to try to influence and intimidate a victim’s treating doctors from getting involved to later testify on behalf of patients permanently injured or killed due to potential medical malpractice.

Dig Deeper:

Alyssa E. Lambert, Eleventh Circuit Upholds Florida Med-Mal Law Allowing Ex Parte Communications, American Association for Justice, Oct. 28, 2014, https://www.justice.org/node/172227#sthash.uaUq2fgb.dpuf

 

8. Department of Defense Expands Ban on Forced Arbitration of Service Members

Why It’s Big:

Many consumers don’t pay attention to arbitration clauses buried in financial agreements. All kinds of credit card and other financial documents include buried fine print that requires a consumer to arbitrate any dispute, rather than go to a state or federal court. Brave men and women who serve our country will now have additional protections against “payday” lenders and the fine print that prohibits going to court and requires mandatory arbitration.  Many articles about arbitration prove that arbitration favors the lenders, according to arbitration statistics. The Department of Defense (DoD) issued a new proposed rule closing certain loopholes in the Military Lending Act that allowed financial services to fall outside the scope and protections of the law which has put service members at financial risk. The DoD also proposed a ban on forced arbitration for a wide range of high-cost loans made to active-duty service members and their dependents.

What Did We Learn?

Payday lenders and other financial vultures should take notice and stop their unfair tactics. The rules proposed by the DoD should serve as a template for a federal law to prohibit civilians from being victimized by these same lenders. If the practice is unfair as to those serving in the military, it stands to reason that it is also unfair to consumers in general. When parties of equal standing both agree to mandatory arbitration it seems unobjectionable, and can unclog the courts of protracted lawsuits, but where a party has the ability to bury the mandatory arbitration clause in fine print the financial institution is simply using its economic clout over a consumer.

Dig Deeper:

Ellen Taverna, Department of Defense Expands Ban on Forced Arbitration for Servicemembers, Fair Arbitration Now, Sept. 26, 2014, http://www.fairarbitrationnow.org/department-of-defense-expands-ban-on-forced-arbitration-for-servicemembers/

 

7. Trinity Industries Whistleblower Awarded $175 Million in Guardrail Suit, Fueling State Government Action

Why It’s Big:

Trinity, a company that manufacturers a large percentage of highway guardrails used in the United States is facing growing legal pressure to redesign and replace one its most popular products, a guard rail end piece. The safety device in question, known by the brand name ET-Plus, may not work as originally claimed because a key part underwent an undisclosed modification several years after the product was first manufactured, and sold around the USA.

According to an October 20, 2014, New York Times article reporting the initial federal whistleblower judgment against Trinity, the problem is that the company’s guardrails can malfunction when hit end-on. Here is how the newspaper described the issue:

“The guardrail system works by collapsing when hit head-on, absorbing the impact of a vehicle and guiding the railing out of its path. The rail head or end terminal, which is often marked with yellow and black stripes, is supposed to slide along the guardrail itself, pushing it to the side.  But the redesigned Trinity product narrowed the channel behind the head, which can cause it to jam instead of sliding along the rail, some state officials said. When that happens, the rail can pierce an oncoming vehicle like a harpoon, endangering occupants.”  The redesign is being cited as the cause of at least 5 deaths in traffic accidents across the country and saved Trinity an estimated $2 on each safety device it sold with the modification.

In the initial “whistleblower” lawsuit, a federal court jury ordered Trinity to pay the U.S. government at least $175 million to resolve federal False Claims Act violations.  Then, Virginia Attorney General Mark Herring announced on December 11, 2014, that he had filed suit against Trinity and its Trinity Highway Products, LLC subsidiary “for selling the Commonwealth of Virginia thousands of unapproved, improperly tested, and potentially dangerous pieces of highway guardrail equipment.”  More than a dozen independent wrongful death and personal injury lawsuits have been filed against Trinity, and Virginia’s suit could fuel other state governments to act, assuming that they relied on the endorsements of both the Federal Highway Administration and Trinity when installing the apparently unsafe ET-Plus barriers.

What Did We Learn?

A whole lot about the questionable practices of Trinity Industries, and placing monetary savings over safety issues. The whistleblower came forward in the False Claim Act case because the company redesigned its ET-Plus guardrail piece in 2005 in a way that made them unsafe. Multiple accidents were reported involving vehicles that ran off the road and collided with Trinity-made guardrail end caps that, instead of cushioning the impact, malfunctioned and speared the vehicle, which can easily lead to enhanced personal injuries or deaths. Several states have already stopped contractors from installing the guardrail piece. A study found that Trinity’s ET-Plus models were nearly three times more likely to be involved in a fatal crash than a previous model of the guardrail end.  This massive jury verdict could have ripple effects across the country and encourage more whistleblowers to come forward.

Dig Deeper:

Katy Stech, Trinity Industries Whistleblower Awarded $175 Million in Guardrail Suit, The Wall Street Journal, Oct. 20, 2014, http://www.wsj.com/articles/jury-awards-trinity-whistleblower-175-million-in-guardrail-suit-1413838696.

 

6. Philip Morris Ordered to Pay $26 Million in Tobacco Lawsuit

Why It’s Big:

The tobacco industry has been relatively successful in beating back many “deceptive practice” lawsuits over the recent years, so it’s encouraging to see a court order a major tobacco company to actually pay a jury verdict that was rendered against it. This case may also encourage other plaintiffs to come forward who were duped by the tobacco’s marketing of so-called “healthier” light cigarettes.  The underlying Florida case involved  a longtime smoker who alleged the company duped her by advertising “light” cigarettes as safer.  The crazy thing about cigarettes is that, unlike many toxic substances and drugs known to be carcinogenic, we still continue to allow the advertising and sale of this known cancer causing product.

What Did We Learn?

The tobacco industry, despite its vast war chest, is beatable in court, especially when it comes to the deceptive marketing practices employed by the industry, when it advertised light cigarettes as a “safer” alternative to regular cigarettes.  There is no such thing as “lung cancer light.”

Dig Deeper:

Philip Morris Ordered to Pay $26 Million in Tobacco Verdict, Civil Justice Magazine, Sept. 19, 2014, http://civiljusticemagazine.com/2014/09/19/philip-morris-ordered-to-pay-26-million-tobacco-verdict/

 

5. Explosive Recall: Takata Airbag Defect Turns Safety Feature Into Hazard

Why It’s Big:

Ten different car manufacturers have recalled millions of air bags because they may explode—even in low-impact crashes—ejecting shrapnel-like material and turning a crucial safety device into a deadly weapon. Takata Corp., a major air bag manufacturer, is at the center of the recall. Even more disturbing is the fact that evidence surfaced showing Takata and some car makers knew about the airbag defect for years before even limited recalls were issued!

What Did We Learn?

Car manufacturers have been notoriously resistant to issuing recalls, even in the face of federal laws.  The depth of deception involving these airbag defects may not be fully revealed until 2015, but the news so far is very troubling. The first reported incident involving a defective Takata airbag occurred in 2004 (yes, a decade ago). No action was taken to remedy this defect for years, and countless lives were unnecessarily put at risk.

Dig Deeper:

Alyssa E. Lambert, Air Bag Crisis Erupts, Leading to More Recalls, Lawsuits, American Association for Justice,  December 4, 2014, https://www.justice.org/node/172842

 

4. More DePuy ASR Hip Failure Claims Settled and Class Action Re-Opened

Why It’s Big:

The DePuy ASR hip implant failure settlement was one of the major stories of 2013 (it actually ranked No. 5 last year on our list) and the news surrounding this class action settlement continues. In a somewhat surprising move, the court handling the DePuy multi-district litigation re-opened the class to allow additional claimants additional time to file claims. Johnson & Johnson, the manufacturer of the DePuy ASR hip implant, also put additional money on the table to settle DePuy claims.

What Did We Learn?

When you make a defective product that injures thousands of people, you may have to pay a steep price. The initial settlement for the DePuy MDL was $2.5 billion and now Johnson & Johnson is prepared to pay even more to settle these claims. It’s a hefty, but necessary, price to pay after unleashing such a horrendous, unsafe product on the public.

Dig Deeper:

Michelle Liamas, Johnson & Johnson May Settle 1,000 More DePuy ASR Hip Claims for $250 Million, Drug Watch, Oct. 31, 2014, http://www.drugwatch.com/2014/10/31/depuy-may-settle-asr-hip-claims/

 

3. $400 Million Compensation Program Created by GM for Ignition Defect Victims and Their Loved Ones

Why It’s Big:

GM’s defective ignition switch appears to be the culprit for at least 260 deaths, 172 catastrophic injuries and 1,998 injuries requiring hospitalization, according to their own compensation program set up for victims. The compensation program is still active and the final tally of how many lives were adversely affected by the defective ignition switch probably won’t be known for at least another year or two.

What Did We Learn?

If a corporation was not hounded by bad headlines and lawsuits, they might forego ever taking action to remedy a serious safety issue. We’ve seen it with Toyota, Ford, and other automakers. With GM, multiple executives were fired, but only after the news surfaced that this defect existed and that nothing had been done to correct it.  Freedom of press, public scrutiny and financial disincentives are all hallmarks of the United States civil justice system, and every year our system works to improve overall public health and safety.  Only through civil lawsuits, did the Takata airbag defects come to light in the first place.  No, governmental regulatory agencies did not lead the way, instead the civil justice system did.

Dig Deeper:

Rohit T. K., GM Gets 104 More Claims for Faulty Ignition Switch Compensation, Reuters.com, Dec. 22, 2014, http://www.reuters.com/article/2014/12/22/us-gm-recall-compensation-idUSKBN0K01BY20141222

 

2. SCOTUS Denies Review of BP Settlements

Why It’s Big:

Individuals and business owners who had their lives turned upside down due to the BP gulf oil spill will, hopefully, get compensated. Without comment and with no Justice dissenting, the U.S. Supreme Court turned aside a plea by an oil-drilling affiliate of BP to re-open a 2012 deal that BP and other responsible parties agreed to that settled claims over the April 2010 oil spill in the Gulf of Mexico.

What Did We Learn?

Once a deal is voluntarily made, after every last word is pored over by lawyers on all sides, it should be recognized and enforced. The oil-drilling affiliate of BP who brought this suit was basically upset because it would have to pay a large number of claimants. Never mind the fact that thousands of people lost their incomes for a substantial period of time after the oil spill and business were ruined.  Oh, and never mind that lawyers representing the appealing party had reviewed and approved the earlier settlement.

Dig Deeper:

Lyle Denniston, Court Won’t Reopen Settled BP Oil Spill Case, SCOTUSblog, Dec. 8, 2014, http://www.scotusblog.com/2014/12/court-wont-reopen-settled-bp-oil-spill-case/

 

1. Toyota Pays Out $1.6 Billion to Settle Sudden Acceleration Defect Cases

Why It’s Big:

As part of a “deferred prosecution agreement” with the U.S. Department of Justice, Toyota admitted that it misled consumers by concealing and making deceptive statements about two safety issues affecting its vehicles, each of which caused a type of unintended acceleration. As a result, Toyota paid a $1.2 billion financial penalty, which is the largest penalty of its kind ever imposed on an automotive company. That amount is with a “B,” and not an “M.” This huge recovery is in addition to Toyota offering to settle thousands of sudden acceleration cases, after battling each and every claim for years before.  The bigger they come, the harder they fall.

What Did We Learn?

Even a company with a sterling reputation can be engaged in deplorable corporate practices.  You may remember that when consumers popped up claiming “sudden acceleration” occurred in their Toyotas, the company flaks first claimed consumers were plain wrong.  It must be their foot just slipped, or maybe their carpeting bunched up.  Wrong.  It wasn’t long ago that Toyota had a reputation for manufacturing extremely safe, durable vehicles. The sudden acceleration defect found in numerous Toyota’s certainly put a dent in that sterling reputation and the fact that corporate executives learned of the problem years ago and did nothing about it has scarred that aura.  Nonetheless, consumers still recognize Toyota as a reputable brand, and buy their product in droves.  Perhaps all of us will simply pay closer attention to car defects now, no matter which manufacturer is involved.

Dig Deeper:

Paul Tosto, As Feds Slam Toyota Over Hiding Sticky Pedal, Let’s Remember Koua Fong Lee, Minnesota Public Radio, http://blogs.mprnews.org/newscut/2014/03/as-feds-slam-toyota-over-hiding-sticky-pedal-lets-remember-koua-fong-lee/

 

rickpatRichard N. Shapiro has been publishing on The Legal Examiner since 2007. He and co-author Patrick Austin are personal injury attorneys based in Virginia Beach with the Shapiro, Appleton & Duffan law firm

5 Comments

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  1. Bina Besiege says:
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    Thanks God or rather judiciary in this case for small mercies. I am happy that punitive damages ceiling limit does not hold in the case of fraud or negligence claims, as these would continue to dissuade potential fraudsters and other service providers, as it was in the past.

    I think this is the best civil justice story of 2014.

  2. up arrow

    […] Top 10 Civil Justice Stories of 2014 December 31, 2014, The Legal Examiner Personal injury attorneys post their “top 10” stories of 2014, including punitive damage caps, forced arbitration of service members, Takata airbag defects, and GM ignition defect compensation program. […]