Bad Drivers Shouldn’t Profit Off of Good Drivers’ Health Insurance

By Frank Pasternak

Imagine a law that will only benefit those people who do not have any health insurance and wrongdoers.

Well on February 13, Sen. Paul Farrow (who represents an area of Waukesha County that includes Pewaukee, Delafield, Hartland and Waukesha) and Sen. Glenn Grothman (who represents an area near West Bend and parts of northern Ozaukee County, including Port Washington and Cedarburg) did more than just imagine it; they introduced it. It’s Senate Bill 22, a law that would eliminate a long-standing rule of law in Wisconsin called the “collateral source rule.”

Basically, the rule says that benefits an injured person receives from sources that have nothing to do with the wrongdoer or “bad guy” causing the injury may not be used to reduce the bad guy's liability to the injured person. In other words, bad guys don’t get credit for benefits the injured person received just because the injured person was insured. This has been the law of Wisconsin for about 100 years.

The simple truth behind the rule is clear: wrongdoers should not benefit from the fact that the person they wronged was responsible enough to get insured. Unfortunately, however, as with many things, politics seems to have gotten in the way. Somehow, liability insurance companies like American Family, West Bend and others have convinced law makers, like Farrow and Grothman, that the bad guys should benefit from the fact that the injured person was responsible.

The law Farrow and Grothman have introduced will basically harm senior citizens, people who get insurance through their employer, and those on Medicaid. Ironically, the people who benefit from this law are those who do not have any health insurance and wrongdoers.

Let me explain: Say there’s a car accident where the wrongdoer ran a red light and caused four different people to incur $100,000.00 in medical bills each. All four suffered the same injuries and needed the same medical treatment. However, Victim #1 had no insurance, Victim #2 had Anthem BCBS through his employer, Victim #3 is a senior citizen on Medicare, and Victim #4 is a poor person on Medicaid.

Farrow and Grothman’s proposed law will allow into evidence the fact that Victim #2’s Anthem BCBS paid 80% of the bills due to contractual write-offs, the fact that Victim #3’s Medicare paid 60% of the bills, and Victim #4’s Medicaid paid 40% of the bills. As a result of Farrow and Grothman’s proposal, the recovery for medical bills will likely be:

1. Victim #1 $100,000 (the uninsured guy)
2. Victim #2 $80,000 (Employee with employer-sponsored health insurance)
3. Victim #3 $60,000 (Senior citizen with Medicare)
4. Victim #4 $40,000 (Poor person with Medicaid)

Now remember, the amount of the bills for all four people was the same $100,000. They all suffered the same injury in the same accident, but because of Farrow and Grothman’s proposed law, the bad guy causing the accident gets the benefit of the fact that Victim #2 was an employee with employer-sponsored health insurance, Victim #3 was a senior citizen on Medicare, and Victim #4 was a poor person on Medicaid. The other beneficiary of the proposed law would be Victim #1, the uninsured.

Under the current law, the red-light-running driver must pay the reasonable value of the injuries he caused, $400,000. Under the new proposal, the driver running the red light-will likely only pay, $280,000.

Under Wisconsin law today, the bad guy causing the accident does not get the benefit. The bad guy is simply responsible for the amount of the bills, assuming it is reasonable, and the only person who benefits is the person responsible enough to have insurance, the collateral source. Wisconsin law today says, rightfully, that bad guys do not get to benefit from good guys having insurance. The law today says that if anyone in this situation should benefit, it is the one who did not cause the accident. Surely, the one who caused the accident should not benefit.

Sadly, however, politics makes strange law, but I hope that’s not the case here. I believe in better. You deserve better. Sen. Grothman and Sen. Farrow should not support this law.

Email Sen. Paul Farrow at Sen.Farrow@legis.wisconsin.gov and Sen. Glenn Grothman at Sen.Grothman@legis.wisconsin.gov and tell them why they should not support this law. Tell Sen. Grothman and Sen. Farrow that this attempt to change Wisconsin’s 100-year-old law is unfair to Wisconsin citizens who are responsible enough to get health insurance.

The original version of this article is at Stand Up for Your Rights Wisconsin

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Wisconsin Drug & Medical Device Immunity Proposal is Misplaced

Below is an article I recently wrote for the Wisconsin Association for Justice:

Wisconsin State Senator Rich Zipperer of Pewaukee has recently proposed a bill under the pretense of attempting to create Wisconsin jobs.  The proposed law would bar claims for injury or death by Wisconsin citizens injured by dangerous drugs or medical devices simply because the drug or device had been FDA approved.  Not only is it impossible to imagine how such a law would create a single Wisconsin job, but the simple truth is that such a law is horrible for Wisconsinites.

First of all, under the proposed law, it doesn’t matter whether or not the manufacturer or seller of the dangerous drug or medical device is based in Wisconsin.  This is critical to the claim that the proposed law would help create Wisconsin jobs.  Under the bill, the manufacturer or seller could be based in any state in the nation or country in the world.  Thus, the law won’t encourage any manufacturers or sellers of drugs or medical devices to move from Illinois or China to Wisconsin.  In fact, the only other state in the nation to have a similar law is Michigan, which granted drug manufacturers such immunity in 1996, and it has one of the highest jobless rates in the country.

Secondly, the only consumers affected by the law are Wisconsin citizens.  Wisconsinites injured or killed by a dangerous drug or medical device lose their legal rights under the proposed law.  These are legal rights that citizens of Illinois, Iowa, Minnesota, and other states retain.  What does this mean?  Well, if such a drug or device kills a Wisconsin family member, the Wisconsinites get no day in court and no justice.  However, if such a dangerous drug or device kills a family member from Minnesota or elsewhere, those citizens get their day in court.  It is hard to imagine how such a law benefits Wisconsin.

Finally, and most importantly, the FDA’s rubber stamp does not mean that dangerous drugs and medical devices will not get to market.  It also does not mean that manufacturers or sellers of such products will act responsibly both before and after obtaining FDA approval.  Where manufacturers and sellers of such products do not act responsibly before or after obtaining FDA approval, they must be held legally responsible to those injured or killed. 

An outstanding article from the American Association for Justice entitled “They Knew and Failed to…: True stories of corpations that knew their products were dangerous, sometimes deadly” recounts true stories behind numerous FDA approved dangerous drugs and medical devices.  Some products mentioned in the article include:

·         Guidant Heart Defibrillators

·         Medtronic Sprint Fidelis

·         Bjork-Shiley Heart Valve

·         A.H. Robbins Dalkon Shield IUD

·         G.D. Searle Copper-7 IUD

·         Playtex Super-absorbent Tampons

·         Renu Contact Lens Solution

·         Johnson & Johnson’s Propulsid

·         Bayer’s Trasylol

·         GlaxoSmithKline’s Avandia

·         Eli Lilly’s Zyprexa

·         AstraZeneca’s Seroquel

·         Johnson & Johnson’s Ortho Evra

·         SSRIs – Prozac, Paxil and Zoloft

·         Chiron’s Flu Vaccine

The article conclusively shows how irresponsibly individuals at drug and medical device companies can act and that such negligence can occur both before and after obtaining an FDA rubber stamp.  Too frequently, product warnings turn out to be wrong, design flaws discovered, and problems and side effects revealed.  Yet, often those responsible for these dangers ignore or attempt to hide such dangers.  In such instances, the manufacturers or sellers must be held accountable.

 Senator Zipperer’s proposed law does nothing to create Wisconsin jobs, only harms Wisconsin consumers, and wrongly assumes that manufacturers and sellers of dangerous drugs and medical devices will act responsibly.

Wisconsin personal injury attorney Frank Pasternak is managing partner of Pasternak & Zirgibel S.C. in Brookfield, Wisconsin.  He is on the Board of Directors for the Wisconsin Association for Justice and a Charter Member of the American Association for Justice President’s Club.  He is AV® rated by Martindale-Hubbell and listed on the “Top 50” Wisconsin “Super Lawyers” list published in Milwaukee Magazine. His practice focuses on personal injury and wrongful death cases particularly cases involving serious accidents and liability for asbestos caused mesothelioma.

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Would the Tylenol tampering lawsuits have survived Wisconsin’s new product liability laws?

In 1991, the Chicago law firm I was working at, Corboy & Demetrio, settled a highly publicized product liability case. The law firm represented the families of three individuals who died in 1982 after ingesting cyanide-laced Tylenol. The Tylenol tampering deaths caused a nationwide poisoning scare and eventually led to tamper-resistant packaging on all over-the-counter medicines.

Twenty years later, in 2011, Wisconsin Governor Scott Walker signed product liability law changes that he claimed businesses needed to create jobs here. Despite the fact that the Chamber of Commerce ranked Wisconsin in the top half of states to do business in 2010, Walker felt the new law was necessary. Unfortunately, the simple truth is that the new law harms Wisconsin consumers by giving manufacturers and sellers of dangerous products large legal loopholes for skirting responsibility to those they injure.

Essentially, the new law gives corporations a variety of new defenses and makes defendant-oriented changes to prior Wisconsin product liability law. The changes and defenses make it easier for manufacturers to sell dangerous and defective products and not be held responsible for the injuries or deaths such products cause. I would like to use the Tylenol tampering lawsuits to demonstrate the effect of the new law.

One of the most egregious examples of the new law’s anti-consumer bias is a dismissal of all sellers and distributors of products if the manufacturer defends the case. Thus, any company that sold or distributed the cyanide-laced Tylenol would be off the hook under the new law because the manufacturer, Johnson & Johnson, appeared. This is despite the allegation that the Tylenol was tampered with after it left Johnson & Johnson. So, despite the fact that companies profited from selling or distributing the cyanide-laced Tylenol, they would not be held accountable under the new law.

Additionally, a distributor or seller cannot be held accountable if the distributor or seller receives the product in a sealed container and had no opportunity to inspect it. Thus, any company that sold or distributed the cyanide-laced Tylenol in a sealed container would be off the hook under the new law.

Another new defense for manufacturers of dangerous products is the presumption that their product is not defective if it complied with applicable state and federal regulations or specifications. So if the Food and Drug Administration had approved the non-tamper resistant bottles for Johnson & Johnson, any Wisconsin jury hearing the case would have to presume that the bottles were not defectively designed.

A further new defense can limit what a jury can know about actions take by the company after the cyanide-laced Tylenol was found. A Wisconsin jury may never learn that Johnson & Johnson put tamper-resistant lids on all of its Tylenol bottles. The only way evidence of the tamper-resistant lids is admitted is if the injured person showed the risk of harm posed by the product could have been reduced or avoided by the lids because it was a reasonable alternative design.

An additional defense provided under the new law is a 15-year time limit. This time limit provides manufacturers immunity from claims by those injured by a defective product that was manufactured 15 years or more before the injury. Thus, if one of those defective bottles of cyanide-laced Tylenol were still here in Wisconsin today, and someone ingested one and died, there would be no case. Not even Johnson & Johnson would be responsible. Note, however, there is one exception to this new law, which is claims for damages caused by a disease that doesn’t appear for several years, such as mesothelioma caused by exposure to asbestos.

Governor Scott Walker’s new product liability law is replete with reasons as to why the Tylenol tampering lawsuits would not have survived in Wisconsin. With the stroke of a pen, the Governor changed years of Wisconsin law and tragically harmed Wisconsin’s consumers.

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Wisconsin Car Insurance Law Proposal

Oshkosh newspaper has a solid editorial: Go slow on rolling back insurance law. It has a great quote:

"Ask anyone who has had significant injuries from a car crash and they'll tell you that a $50,000 limit on personal injury, much less $25,000, doesn't come close to covering the cost of hospital treatment, recovery and rehabilitation. Rolling back the insurance requirement merely furthers the harm done to those already injured in an accident."

A hand full of legislators want to go back to the car insurance levels in Wisconsin that were enacted in 1982. What? The also want to revisit the law which give greater protection to those severely injured or killed by drivers who fail to carry insurance (uninsured) and drivers who carry the lowest legal limits (underinsured). When Wisconsin 4th Cheapest State for Car Insurance, it makes no sense at all to do this. Unfortunately, legislators hope to punish trial lawyers with this law, but the fact is changing these laws hurts Wisconsin families.

Wisconsin Personal Injury Attorney

Wisconsin Product Liability Law Proposal

Despite the fact that the Chamber of Commerce ranks Wisconsin in the top half of states to do business in, Governor Scott Walker has recently proposed several changes to Wisconsin tort law, including product liability law changes, claiming these will create jobs. None of the proposed changes will do that and one of these proposed changes will immunize sellers of dangerous and defective products that cause injury or death. No seller of a dangerous or defective product should ever be given what is essentially a blanket immunity.

For a very sad example of how products can kill people, read Asbestos & Insulation Contractors at my Wisconsin Asbestos & Mesothelioma blog.

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Wall Street! How do you like CAPS now?

President Obama wants to limit certain CEO's pay to $500,000 so I'm wondering now how Wall Street likes caps now. Wall Street CEOs like ex-AIG man Hank Greenberg and the Wall Street rag are always asking for tort reform and love CAPS on personal injury damages!

Wisconsin has caps in nearly all wrongful death, medical malpractice, and municipality cases. Citizens here usually aren't aware how the caps effect them - until they or someone close to them is injured or killed. For example, the cap on all damages in many personal injury cases against Wisconsin municipalities is $50,000. How fair is that? It's not; it's total garbage.

Wall Street now is on the receiving end of caps. An arbitrary number chosen by politicians limiting their right to compensation. I think it's wrong too, but I wonder if Wall Street recognizes how unfair caps are - in personal injury cases.

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Wisconsin Cheerleading Lawsuit

Wisconsin's Supreme Court issued Noffke v. Bakke yesterday and it's been discussed in the news, Wall Street Journal's Blog, and by legal professors, Legal Profession Blog and Sports Law Blog. The Blogosphere discussion seems to focus on cheerleading as a contact sport, which I'm sure law scholars can debate ad infinitum.

Simple lawyers like me though wonder, why didn't a jury get to decide whether this fellow cheerleader and school district acted reasonably? I ask that rhetorically because I know the reason is because a prior Wisconsin legislature and governor decided to give IMMUNITY.

Noffke v. Bakke shows two types of immunity statutes in Wisconsin - governmental immunity (school districts, cities, villages, etc.) and recreational immunity (certain sports, activities, etc.). In my opinion, immunity laws are a horrible form of tort reform, which occurs too often in Wisconsin personal injury law.

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True Justice from the new Dept of Justice?

In a prior post, I explained how federal agencies can and have been used to strip Americans of legal rights. In Revival of Justice: What Obama's DoJ appointees should do first, Yale Law School's Judith Resnik sets forth some ideas for the new administration to revive true justice.

The highlights from my perspective are:

• Acknowledge that the courts are for all citizens;
• Stop government lawyers from cutting off access to courts for civil litigants;
• Don't use support "tort reform" laws ("reform" is really short for deform);
• Give consumers, employees and tort victims more access to court;
• Stop mandatory arbitration (see e.g. your credit card contract);
• Let consumers with tiny claims aggregate in classes so they can get lawyers; and
• Eliminate immunities for government officials and private contractors.

Wisconsin Personal Injury Attorney

Ingenix Lawsuit Settled

UnitedHealth Care through an outfit called Ingenix allegedly engaged in some insurance company behaviors I've mentioned. So it settled the lawsuit relating to that paying $350,000,000.00 to resolve class action lawsuits and $50,000,000.00 to the NY AG.

I found one interesting aspect of such lawsuits to be the hypocrisy of doctors bringing the cases since they are typically the ones seeking to limit your rights in medical malpractice litigation.

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Olbermann Countdown Gets 3 Cheers

Almost missed posting on this well done piece. Unbeknowst to many Americans, sometimes an administrator at some federal agency can strip them of their rights.

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Accident insurers put on the boxing gloves

I saw this from the American Association for Justice and it says what you need to know about Allstate and car accident insurers listed as the worst insurers, like Farmers, Liberty Mutual and State Farm. I might add Progressive, American Family and Sentry Insurance. Car accident insurance companies really want:

~ Premiums not claims
~ To deter valid lawsuits
~ The public to think lawsuits are bogus
~ You to feel guilty for making legitimate claims
~ You to say "I'm not the kind of person who files a lawsuit"
~ Jurors to think plaintiffs are dishonest
~ Your rights minimized and theirs preserved
~ Verdicts for damages to be less than fair
~ Caps on damages
~ And judges who won't hold them accountable.

Wisconsin Personal Injury Lawyer

Allstate's Obstructing Justice

Allstate guarding profits scheme is the title of an article in the Miami Herald today. Seems pretty consistent with what I've said about insurance companies before. Some highlights: "Allstate is facing contempt charges in Missouri -- with a $25,000-a-day fine -- and now it can't sell new auto policies in Florida, in part, because it wants to protect a report written by a corporate consultant." "According to an attorney who has seen the report from consultant McKinsey & Co., it advises Allstate on how to improve profitability: pay less on claims and take a longer time to pay those claims."

No Surprise. CNN exposed Allstate. Sentry Insurance sued an 81-year-old woman for failing to shovel snow. State Farm, Nationwide, Allstate and USAA have been accused of trying to take advantage of Katrina Hurricane victims. And American Family Insurance has extreme profits, denies claims, is pro-tort reform, and pays "when pigs fly.".

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Insurance Companies again

Ex-Insurance Company Commissioner, Herb Denenberg, writes in his August 01, 2007 column, his opinion that Allstate Insurance Company has plead guilty to a six-count indictment alleging it is the leading insurer when it comes to anti-consumer insurance practices.

I wrote before on how CNN exposed Allstate and I've never been a fan of Allstate. I wrote too about how Sentry Insurance sued an 81-year-old woman for failing to shovel snow, State Farm, Nationwide, Allstate and USAA being accused of trying to take advantage of Katrina Hurricane victims, and about American Family Insurance. Personally, and this is strictly opinion, I think too that Progressive Insurance has become overly aggressive in fighting legitimate claims. Whatever the case, whether it's Allstate, American Family, Nationwide, Progressive, Sentry, USAA, or another insurance company, this is all consistent with my long held opinion about what insurance companies want:

~ Your premiums but not your claims
~ You not to file lawsuits against them that are valid
~ Voters to think they constantly fight bogus lawsuits
~ Everyone to hate lawyers so they never hire one to get justice
~ People to feel guilty for making legitimate claims
~ You to have guilt so you tell your attorney "I'm not the kind of person who files a lawsuit"
~ Jurors to think a person who files a lawsuit is a sham or dishonest
~ Juries minds made up before evidence is heard
~ Your legal rights minimized or removed
~ Their legal rights maximized and preserved
~ Wrongdoing on their part to go unchecked
~ People to feel juries give money away in a lottery jackpot justice system
~ Verdicts for damages to be far less then what is fair
~ Caps on damages to minimize how much justice a person can get
~ And judges who will avoid holding them accountable

Wisconsin Personal Injury Attorney

Thompson, Torts, and True Conservatism

Thompson, Torts, and True Conservatism is another great article from the Center for a Just Society. See also its outstanding pieces on "Tort Reform":

Tort Reform Part I: The Social Purpose of Tort Law
Tort Reform Part II: Preserving the Right to Trial by Jury
Tort Reform Part III: Who Decides?
Tort Reform Part IV: Solutions Depend on Facts not Spin

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Fred Thompson

Fred Thompson has basically said he's running for President and I'm pretty excited about that. Though I consider myself to be fairly conservative and I've supported certain Republicans in the past. e.g. Senator Richard Shelby of Alabama, I generally fall on the Democratic side of the ticket due to my very strong belief that tort reform is wrong and those without the ability to pay lawyers hourly rates (upwards of $200+ per hour) ought to have the same access to the courts as those with the ability to pay. However, Fred Thompson is a man who generally understands that tort reform is wrong. Here's an article from the National Review ripping Fred Thompson on the issue and here's Fred Thompson's response. For the first time in the last 25+ years, I have a potential Presidential candidate who understands tort issues and recognizes many of the things I written about here before. This is good news.

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Christian Trial Lawyers

I've expressed my admiration for the Center for a Just Society and it's recent article Are Christian Conservatives Being Bought Off? affirms this. I saw an example of Christians being used in the recent attack on lawyers by a Christian group and conclude that some in Corporate America want to improperly use Christians for their agenda. Contrast that with groups like the Christian Trial Lawyers.

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