Legal Examiner’s Top 10 Civil Justice Stories of 2012 (Part 2)

This is our first annual “Top 10 Civil Justice Stories” recap, for calendar year 2012, in which we count down the biggest, most followed, and most significant civil justice stories of the past year. Just like Letterman, we start with #10 and work our way to #1. [The author gratefully thanks his researchers, M. Hall and C. Alexander for their assistance].

5. Meningitis Outbreak Affects Hundreds of Unsuspecting Patients Receiving Injections

Why It’s Big

The number of meningitis victims continued to mount, as 2012 drew to a close. According to the Centers for Disease Control and Prevention, as of December 3, 2012, 541 people had fallen ill and 36 had died in 19 different states. This outbreak was caused by contaminated steroid injections compounded by the New England Compounding Center (NECC). Ironically, no victims have been reported in Massachusetts, where the tainted drugs were made. Among the hardest hit is Virginia, with 51 reported cases and 2 deaths. Thirteen people have filed lawsuits against NECC in VA, joining others across the country seeking compensation for their illnesses or the deaths of loved ones. The government froze $5 million of assets from NECC, but refused to freeze $461 million in additional assets from NECC’s parent company. With lawsuits individually seeking millions of dollars, the amount frozen will be a mere drop in the bucket if NECC is found guilty of negligence and has to compensate the victims and their families.

What Did We Learn?

Many people are asking how this could have happened in the U.S. with all our oversight of foods and drugs and other products. Unfortunately, compounding facilities, where drugs are generally made at the request of a doctor, are regulated by the state, and “manufacturers” are regulated by the Food and Drug Administration, but currrent federal laws allow a gaping loophole for companies like NECC. “Compounders” can fall under state laws—even if they truly are doing business like an interstate “manufacturer.” In this case, however, NECC appears to have been operating more as a manufacturer than a compounding facility, further highlighting the need for FDA regulation changes. Referring to the blurry line of current law, FDA head Margaret Hamburg told Congress: “We need to clarify that with new legislation.”

Dig deeper: “Multistate fungal meningitis outbreak investigation” by Centers for Disease Control and Prevention, published at cdc.gov.

4. NFL In Denial As To Liability for Traumatic Brain Injuries of Its Players

Why It’s Big

From various media stories, including Iraqi war veterans who have suffered traumatic brain injury (TBI), as well as Rep. Gabby Giffords brain injury from a bullet wound, public awareness of TBI has increased. Now, past and present NFL players are blaming the league for long-term conditions they allege were caused by years of hard-hitting practices in NFL games. In July 2012, over 4000 professional football players and their estates filed an amended lawsuit against the NFL and others, requesting compensation for their injuries that are still affecting their lives today. The suit claims that the NFL was negligent because it failed to warn players about the dangers of TBI and it did not do more to protect the players from this type of injury, alleging factual details going back for decades in more than 50 pages that also include allegations of fraud and concealment. "The NFL, like the sport of boxing, was aware of the health risks associated with repetitive blows producing sub-concussive and concussive results and the fact that some members of the NFL player population were at significant risk of developing long-term brain damage and cognitive decline as a result," the complaint charges.

What Did We Learn?

Was the NFL guilty of fraud as alleged? The beloved NFL? It is one thing to not do enough to protect the players because the league was unaware of the damage being done; but it is an entirely different situation if it is proven that the NFL was aware of the dangers but “fraudulently” failed to take any action. One case that sheds some light on the situation is that of Mike Webster, who played mainly for the Pittsburgh Steelers. In 1999 Webster was awarded disability benefits because his disability was “the result of head injuries he suffered as a football player with the Pittsburgh Steelers and Kansas City Chiefs.” And in 2005, his estate was also awarded $1.8 million for his injuries. Other cases similar to Webster’s exist, which may be chain links between head injuries sustained during football games and the neurological problems from which numerous players have suffered, including dementia, Parkinson’s disease, depression, and aggression. What might this mean for the NFL? The NFL commissioner floated the idea of eliminating kickoffs in favor of safer punts, not attributing it as related to the brain injury lawsuit, but rather noting higher rates of concussions. Predictions about a demise of professional football are way too exaggerated. On the other hand, safety measures can and should be taken that don’t detract from the overall electricity of a great football game. And whatever safety measures are taken should be adopted by collegiate and other levels of organized football as well.

Dig Deeper: In Re National Football League Players’ Concussion Injury Litigation, United States District Court, Eastern District of Pennsylvania, published at espn.go.com

3. States Move to Protect Against “Give us Your Online Password” Requests By Employers & Schools

Why it’s Big

We know that some employers, and even college admission directors, are taking a look at your online “persona” before making a decision. However, one troubling trend goes a big step further and involves administrators asking for, and occasionally demanding, passwords to students’ and employees’ social medial sites. It made national news when Facebook took a tough stance against “give us your password” requests, during March, 2012 and issued an official statement: “If you are a Facebook user, you should never have to share your password, let anyone access your account, or do anything that might jeopardize the security of your account or violate the privacy of your friends….As a user, you shouldn’t be forced to share your private information and communications just to get a job….the employer may assume liability for the protection of the information they have seen or for knowing what responsibilities may arise based on different types of information….We’ll take action to protect the privacy and security of our users…..– Erin Egan, Chief Privacy Officer.”

Thankfully, legislatures in several states are also concerned about online privacy; raising basic First Amendment rights and rights to privacy.

What Did We Learn?

In July of this year, Delaware became the first state in the country to prohibit institutions of higher learning, whether they are public or private, from requesting social media account information. The Delaware Higher Education Privacy Act says that such institutions are prohibited from requiring or requesting that students or applicants “disclose any password or other related account information in order to gain access to the student’s or applicant’s social networking site profile or account by way of an electronic communication device."

Maryland recently enacted a similar workplace privacy law after public outcry arose when it was revealed that the state’s Department of Public Safety routinely asked job applicants to turn over Facebook passwords. In August and September, Illinois and California followed suit, passing laws that restricted the ability of employers and colleges from requesting access to the social media accounts of employees and students.

Meanwhile, in Virginia, Sheriff’s deputies entered Facebook “likes” for the opponent of the newly elected sheriff who proceeded to fire them after elected. The Bland v. Roberts case is before the federal fourth circuit court of appeals and Facebook as well as the ACLU have filed friend of the court briefs supporting the First Amendment rights of the fired officers.

Though these state legislative efforts are a welcome step towards curbing draconian methods of spying on employees, more work remains to be done to protect individuals from unfair monitoring, given the increasing numbers of people using a single device for both work and personal purposes. Ten other states are currently considering social media privacy laws that cover employers or colleges or both, and other states appear likely to take up the issues.

Dig Deeper: “Illinois Becomes Third State to Pass Social Media Privacy Law,” by Sam Favate, published at WSJ.com.
“Delaware's Higher Education Privacy Act becomes law,” by Joseph J. Lazzarotti, published at Lexology.com.

2. Drug Company Whistleblowers Lead to Multi-Billion Dollar Fine

Why it’s Big

In July, 2012 Pharmaceutical giant GlaxoSmithKline agreed to pay a whopping $3 billion in fines, amounting to the largest healthcare fraud settlement in U.S. history. In the False Claims Act “qui tam” whistleblower lawsuit, GSK admitted to illegally promoting Paxil for treating depression in children even though it was not approved for use by anyone under 18, and said it pushed Wellbutrin for weight loss and sexual dysfunction, even though it was only approved for treatment of major depression. Additionally, the company pled guilty to failing to report safety problems with its diabetes drug Avandia and for paying kickbacks to doctors for prescribing Valtrex.

What Did We Learn?

$3 billion. That’s with a “B.” Beyond the whopping fine, the incident was notable because the Justice Department wouldn’t have recovered a dime, much less $3 billion, without the help of two whistleblowers, former GSK sales representatives Greg Thorpe and Blair Hamrick. The employees tried reporting problems internally, but were stymied by uncooperative managers. Thorpe was eventually pressured into resigning after management did nothing to fix the problems he’d brought to light, while Hamrick was simply fired.

The payout for the whistleblowers themselves remains undetermined, but let’s face it: what drives the success of the U. S. government recoveries is the incentive for the whistleblowers, and their attorneys, to be paid a fair share. Of the $3 billion settlement, at least $1.04 billion in civil fines is linked directly to information provided by the whistleblowers. Employees in similar cases often receive between 15 and 25% of the civil fine, though the government will recommend the percentage at a later date. Regardless, the amount will change both employees’ lives forever and serve as an excellent example of how the government is able to punish those companies that lose their way, putting profits ahead of patients. Many civil litigation law firms have woken up to the economic viability of handling major whistleblower claims, and with cases like these it’s easy to understand.

The U.S. government also netted 1.4 billion in health and mortgage industry recoveries during 2012. In an official Justice Department statement, Attorney General Eric Holder said: “Thanks to the dedicated work of attorneys, investigators, analysts, and support staff at every level of the Justice Department – along with our state and local partners across the country – we have secured the largest annual recovery in the Department's history.” While whistleblower recoveries are not going to balance the U. S. budget, they certainly are one way to plow significant revenue back into the coffers.

Dig Deeper: “Glaxo Agrees to Pay $3 Billion in Fraud Settlement,” by Katie Thomas, published at NYTimes.com.

1. Obamacare A/K/A Affordable Care Act Upheld

Why it’s Big

Drum roll, please. The No. 1 civil justice story is the landmark court decision, whereby the U.S. Supreme Court upheld the controversial Patient Protection and Affordable Care Act (2010), derisively, or proudly, called “Obamacare.” The court ruled 5-4, with Chief Justice John Roberts surprisingly siding with the majority, upholding the so-called individual mandate and other essential elements of President Obama’s signature health care reform law. The High Court ruled that the legislation was proper under the Congressional power of taxation.

What Did We Learn?

We learned that getting universal health care coverage in the USA divided the nation nearly 50/50, but undoubtedly this is the number one civil justice story of 2012. Though many key controversial parts of the law won’t be implemented until January 1, 2014, other parts of the Affordable Care Act are already having significant impact on the basic fabric of the “civil justice” health insurance world because it affects every citizen in the nation, arguably just like First Amendment freedom of speech or the equal protection of the law.

Americans will soon be required to have health insurance or face a penalty for refusing such coverage. As of 2014, the law will also require insurance companies to eliminate lifetime benefit caps and to sell polices to everyone, regardless of current or previous health problems or based on gender. It represents an enormous victory for those denied health insurance in the past due to “preexisting conditions” and facilitates greater access to the healthcare system for millions of Americans. And let us not forget the other sea-change that permits parents to retain family members on their policies until age 26. The share of people ages 19 to 25 who lacked health insurance fell to 27.9 percent, down from 33.9 percent in 2010, or about 1.6 million fewer uninsured people, according to data from the federal study, known as the National Health Interview Survey.

Dig deeper: “Supreme Court Health Care Ruling: The Mandate Can Stay,” by Matt Negrin, published at ABCNews.com.

View Part One – Stories 10-6

Image Sources:

Meningitis – Business Pundit
Goodell – Washington Post
E-Privacy – Ospero
Whistleblower – StandFirm
Obamacare – Breitbart