The Jere Beasley Report August : 2020

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CAPITOL OBSERVATIONS

Conscience Of The Congress

When U.S. Rep. John Lewis died last month, America lost a great man. This man, a true champion in the battle for freedom and justice, has been called the Conscience of the Congress. I cannot think of a higher compliment, nor a better assessment of a man's character.

John Lewis was willing to put his life on the line for the just causes of civil rights and voting rights. The legacy left by this true champion for justice is one that every person who loves this country should commend and appreciate. As a son of sharecroppers born in Troy, Alabama, John Lewis did many great things during his lifetime. As a young man, he befriended Dr. Martin Luther King, Jr., and worked closely with him up until Dr. King was assassinated. John Lewis' work never stopped and in fact he never even slowed down. Rather than allow the opposition, including the violent attacks he faced, to deter him, John Lewis kept up his efforts and actually intensified them.

John Lewis fought a valiant fight for liberty, justice and equality. He realized that to be effective and ultimately successful, protests had to be non-violent. He knew that violence would never be effective and would actually be counter productive. That is a message that needs to be heard and followed today.

As America mourns the death of John Lewis, those who share his vision for America must carry on his fight for liberty, justice, and freedom for all. This is a battle that America can ill afford to lose. May the legacy left to us by a man, small in stature, but a giant in every other respect, be revered and honored. God has blessed us and America by the presence and diligence of John Lewis. In Heaven, the Conscience of the Congress had to have heard these words: “Well done my good and faithful servant.”

AN UPDATE ON THE TALC LITIGATION

Talcum Powder Litigation Update

The Beasley Allen Talc Litigation Team continues to work hard, advancing Beasley Allen cases at both the federal multidistrict litigation (MDL) level and in various state courts across the country. With several good appellate rulings coming out in the last few weeks, including verdicts being upheld in both Missouri and New Jersey, our lawyers are looking forward to trying additional cases in the near future.

In the MDL, Plaintiff Profile Forms are on track to be completed by early September. This is the next step in selecting cases for upcoming bellwether trials and that is a critical part of advancing this litigation.

The following is an update on several trial settlings in state court venues:

  • The Cadagin trial in St. Clair County, Illinois, has been officially reset, with pretrial hearings scheduled to begin Nov. 23 and trial itself commencing on Nov. 30.
  • In Atlanta, the team has been working hard on extensive briefing and motions in the hopes of getting a retrial of the Brower case set as soon as possible.
  • In St. Louis, the Beasley Allen team has a three-Plaintiff trial set for February 2021.
  • In Philadelphia, the Kleiner trial is still delayed as the coronavirus has continued to have a significant impact in the area. The Beasley Allen team is looking forward to trying the Kleiner case as soon as it can safely be reset.
  • The Beasley Allen team is continuing to pursue trial settings in various other venues nationwide as well. Currently we are moving toward an additional trial in South Florida in 2021.

Beasley Allen lawyers continue to investigate and file new cases on behalf of women who developed ovarian cancer after using talcum powder products for feminine hygiene. For additional information on these cases, contact Ted Meadows, Leigh O'Dell or Brittany Scott at 800-898-2034 or by email at Ted.Meadows@beasleyallen.com, Leigh.Odell@beasleyallen.com or Brittany.Scott@beasleyallen.com.

Courts Side With Talc Plaintiffs In Important Pair Of Recent Decisions

In June, as previously reported, the Missouri Court of Appeals upheld a verdict that talcum powder had caused ovarian cancer in 22 women. It ordered Johnson & Johnson to pay $2.11 billion, reduced from $4.7 billion, and in its opinion found that there was “significant reprehensibility” in Johnson & Johnson's conduct and that the company's “exposure of consumers to asbestos…was done with reckless disregard of the health and safety of others.”

Within days of the Missouri decision, New Jersey Superior Court State Judge Ana C. Viscomi denied Johnson & Johnson's bid to set aside a verdict for $186 million from a jury trial earlier this year. Jurors found that Johnson & Johnson knew its baby powder was contaminated with asbestos but did not provide the information to the U.S. Food and Drug Administration (FDA).

Judge Viscomi said jurors could find by “clear and convincing evidence presented” that J&J engaged in a series of misdeeds. Those findings include:

  • J&J knew its talc was contaminated with asbestos for decades;
  • J&J did not provide that information to the FDA;
  • The company advocated for testing methodology “that it knew was not sensitive enough to detect asbestos;”
  • J&J lied to the FDA by “editing unfavorable test results from reports;” and
  • The company lied to consumers by claiming a cleansing procedure “removed all impurities” from its talc powder products when the company knew it did not remove certain types of asbestos.

In a most profound and significant manner, Judge Viscomi had this to say about J&J's conduct:

J&J's conduct here was reprehensible. The award, modified by the Punitive Damages Act, is not so clearly disproportionate to the injury and does not shock the conscience of the court.

Between its ongoing talcum powder lawsuits and its role in the opioid crisis, Johnson & Johnson's legal exposure is growing, with no end in sight. While the company had a total revenue of $82.1 billion with a profit of $15.1 billion in 2019, there are more than 19,000 lawsuits currently pending related to talcum powder products.

Aside from its talc-related issue, Johnson & Johnson is also defending its role in the opioid crisis in multiple states. A judge in Oklahoma ordered the company to pay $465 million for its contribution to that state's opioid crisis. While Oklahoma has a rate of 7.8 opioid-related deaths per 100,000 people, that number is low compared to some states. Washington, with a death rate of 9.4, filed a lawsuit against Johnson & Johnson, as has West Virginia, with a death rate of 42.4. Larger awards to Plaintiffs as well as the increasing number of lawsuits Johnson & Johnson faces could impact the company's stock prices or even dividends in the near future.

Sources: Ingham v. Johnson & Johnson, No. ED107476 (Mo. Ct. App. June 23, 2020).

Barden v. Brenntag N. America, no. L-1809-17; Etheridge v. Brenntag N. America, no. L-0932-17; McNeill-George v. Brenntag N. America, no. L-7049-16; Ronning v. Brenntag N. America, no. L-6040-17 (N.J. Superior Ct., Middlesex County)

11 Cases From J&J Talc MDL Sent Back To Missouri Court

Chief U.S. District Judge Freda L. Wolfson, the New Jersey federal judge in charge of the multidistrict litigation (MDL), has sent to a Missouri state court 11 cases Johnson & Johnson (J&J) and other Defendants are facing as part of multidistrict litigation alleging that the pharmaceutical giant's baby powder contains asbestos and can cause ovarian cancer. Judge Wolfson wrote in her opinion that her court does not have the authority to hear the complaints, leaving Johnson & Johnson up to the St. Louis County Circuit Court, where the cases originated, to determine their fate.

The broader federal MDL contains more than 16,000 pending cases and was centralized by the Judicial Panel on Multidistrict Litigation (JPML) in 2016. The common questions among the cases are whether the talc-based powders cause ovarian or uterine cancer; whether the company knew, or should have known, about that correlation; and whether it did enough to warn consumers. As previously reported, the cases in the MDL accuse the New Jersey-based J&J of personal injury or wrongful death over the bad effects from the powders.

Judge Wolfson's ruling came after hundreds of J&J talcum powder product buyers moved to remand 12 cases over lack of jurisdiction. J&J's California-based talc supplier Imerys Talc America Inc., and Missouri-based talc manufacturer PTI Union, and its sister company, PTI Royston, had asked for dismissal of the cases.

Judge Wolfson also noted that since Imerys filed for bankruptcy protection in February 2019, the claims against the company are halted due to the automatic stay imposed by the Chapter 11 petition.

The MDL is Johnson & Johnson Talcum Powder Products Marketing, Sales Practices, and Products Liability Litigation, (case number 3:16-md-02738) in the U.S. District Court for the District of New Jersey.

Source: Law360.com

Non-Profit Organizations Urge Johnson & Johnson To Stop Global Sales Of Talc-Based Baby Powder

On July 8, more than 170 non-profit organizations urged Johnson & Johnson to stop selling its talc-based baby powder across the world. These organizations, which include educational institutions like Emory University, raised asbestos concerns as a major reason to discontinue this product. The non-profit organizations have also asked Johnson & Johnson to recall its existing inventory in North America.

In May, Johnson & Johnson made headlines when it announced its plan to discontinue sales of talc-based baby powder in North America. However, the company's phase-out plan allows existing bottles of talc-based baby powder to be sold until supplies run out. To date, Johnson & Johnson has not announced that it will stop selling talc-based baby powder in other countries around the world. Janette Robinson Flint, the executive director of Black Women for Wellness, said that Johnson & Johnson's decision to continue selling talc-based baby powder internationally contradicts the company's pledge to fight racial inequality.

Johnson & Johnson continues to face thousands of talcum powder lawsuits in state courts across the country, as well as the multidistrict litigation in New Jersey Federal Court.

Source: Reuters

Johnson & Johnson Has Targeted Black Women Over The Years

We learned early in the Johnson & Johnson talc litigation that this company has a history of targeting and marketing its products to historically marginalized communities. For decades, Johnson & Johnson has marketed its Baby Powder product in Black communities with knowledge that the product causes cancer. Sadly, the company continues to market in this manner today.

We learned in discovery in the Jacqueline “Jackie” Fox case, our first ovarian cancer case against Johnson & Johnson, that for decades the company's own scientists raised red flags about this product. The scientists were concerned that the talc in baby powder could be causing ovarian cancer. Interestingly, Ms. Fox was a cousin of Rosa Parks. Johnson & Johnson also knew that the talc could also be tainted with asbestos, known to cause health issues including cancer and mesothelioma.

An excellent article written by M. Isabelle Chaudry, a human rights advocate and senior policy manager for the National Women's Health Network, was posted on July 7, 2020. I recommend that you get this article and read it carefully. This lady tells the tragic story of how the Black community has been targeted for death and misery by Johnson & Johnson.

While on May 19 Johnson & Johnson discontinued production of its talc-based baby powder in the United States and Canada, it will sell existing stock to retailers until it runs out. The bad news, however, is that Johnson & Johnson will keep selling its products abroad. This means the product will continue to impact on Black and Brown communities, particularly in places like Africa, where Johnson & Johnson has operations in South Africa, Ghana, and Kenya, and in Brazil, which is home to all three of its business segments. Hopefully, public opinion in the U.S. will have the desired effect of Johnson & Johnson stopping sales of the talc-based products all over the world.

Source: Columbiatribune.com

BASF And The Cahill Law Firm To Pay $72.5 Million In Talc Settlement

BASF SE, the world's biggest chemical maker, and a New York law firm have agreed to pay a combined $72.5 million to resolve claims they hid evidence that certain talc products contained asbestos. That wrongdoing was in an effort to defeat thousands of lawsuits. Executives of BASF, along with lawyers from New York-based Cahill, Gordon & Reindel LLP, agreed to the joint settlement. It was filed on July 23 in federal court in New Jersey. Including legal fees and other costs, the total value of the settlement is almost $100 million, according to the court filing seeking approval of the agreement.

BASF unit Engelhard Corp. owned a talc mine in Vermont that produced the mineral for use in industrial settings and in consumer products such as wallboard and balloons used for Children's' parties. It later changed its name to BASF Catalysts LLC. BASF acquired Engelhard for $5 billion in 2006.

The settlement resolves claims that credibly alleged actions by Engelhard and its law firm amounted to a “systematic fraud” designed to “thwart the judicial process,” a federal appeals court said in 2014. That court revived the case after a judge dismissed it.

Under the terms of the settlement, potentially thousands of asbestos claimants will receive compensation. The settlement also allows Plaintiffs who dropped their cases to have a chance to revive them, if possible, according to the terms of agreement.

BASF and other makers of building products are still grappling with asbestos litigation, which began in the 1970s and has turned into the longest-running mass tort in U.S. history. According to a 2005 study by the Rand Corp., companies and insurers had paid at least $70 billion to settle injury claims tied to asbestos-laden products.

The following is a summary of activity over a lengthy period that is related to and led up to the settlement:

In 2012, a federal judge in New Jersey dismissed a proposed class-action suit in which asbestos claimants alleged Engelhard and its lawyers schemed to work “a fraud on the court” by lying about the presence of asbestos in the company's talc products.

A federal appeals court in Philadelphia revived the case, saying asbestos claimants properly raised fraud claims and produced evidence showing Engelhard officials and Cahill's lawyers “rigged the game from the beginning,” Judge Julio Fuentes wrote in a 42-page ruling.

BASF first had to defend the litigation practices of Engelhard and Cahill in 2009, when Donna Paduano sued in state court in New Jersey over her mesothelioma. Paduano, who never worked at Engelhard, claimed she was exposed to asbestos from washing her scientist father's clothes or visits to his workplace. She later settled her claim.

In a deposition by her father, David Swanson, the ex-research scientist admitted company officials knew about the asbestos in its talc “for years.” That triggered an investigation by lawyers, such as Chris Placitella, that led to the discovery of what they called a cover-up of evidence of the carcinogen in Engelhard's talc.

The cover-up began after a lawsuit filed in 1979 blamed the mesothelioma death of a tire worker on Engelhard talc. Engelhard settled in 1983 and the pre-trial evidence, including testing that showed varying levels of asbestos from a Vermont mine that the company ran since 1967, was sealed by a confidentiality order. The company argued in succeeding cases that its talc was asbestos free.

Cahill lawyers, who served as Engelhard's national counsel in asbestos litigation from the late 1980s until 2009, used the “no-asbestos” defense to persuade other asbestos Plaintiffs to drop their cases or settle them cheaply. Some Plaintiffs accepted as little as $3,000 in settlements of claims they developed asbestos-related cancer from the talc.

Plaintiffs' lawyers contend Engelhard officials and Cahill lawyers have finally acknowledged that “for nearly 30 years, they concealed from the courts and litigants” the presence of asbestos in their talc. The lawyers said in the filing that the admission of wrongdoing was “long overdue.”

The lower-court case is Williams v. BASF Catalysts LLC, (11-cv-1754), U.S. District Court, District of New Jersey (Newark). The appeal is Williams v. BASF Catalysts LLC, (13-1089), U.S. Court of Appeals for the Third Circuit (Philadelphia).

Source: Bloomberg by Jeff Feeley

AN UPDATE ON THE OPIOID LITIGATION

The Opioid Cases Are Affected By The Pandemic

Jury trials by the State of Alabama and State of Georgia against Opioid manufacturers and pharmaceutical distributors have been delayed due to the COVID-19 pandemic. Through a series of administrative orders starting in March, the Supreme Court of Alabama suspended in-person court proceedings through May 15, and suspended jury trials until at least September 2020. The State of Alabama's case against Endo Health Solutions and McKesson Corporation has been re-scheduled for May 2021. Similarly, the State of Georgia's case against Opioid Manufacturers Endo, Actavis, Teva, and Mallinckrodt and distributors McKesson, Cardinal Health, AmerisourceBergen, and Smith Drug has been delayed from January 2022 to May 2022. Beasley Allen represents both the State of Alabama and the State of Georgia in these cases.

Currently, the only Opioid Crisis litigation to go to trial was the State of Oklahoma's case against Johnson & Johnson, which resulted in a $465 million verdict from the bench against Johnson & Johnson. A bellwether trial in the multidistrict litigation (MDL) in federal court against opioid manufacturers and distributors settled on the eve of trial in October of 2019. Trial dates for other States and local governments are currently in flux due to the COVID-19 pandemic, but a joint State and local government trial against manufacturers and distributors is currently scheduled to go to trial in New York as early as August.

A Tennessee lawsuit brought by that state's district attorneys on behalf of a baby born with neonatal abstinence syndrome (NAS) is also scheduled for August. MDL bellwether trials for Cabell County and City of Huntington, West Virginia, against distributors McKesson, AmerisourceBergen and Cardinal Health are expected to go forward in October. These two cases were remanded by Judge Dan Polster, the federal judge overseeing the MDL, to be tried in West Virginia federal court. It is unclear whether the New York, Tennessee or West Virginia cases will go forward at their appointed times due to the COVID pandemic and contentious discovery disputes in these cases.

Another bellwether set for the fall of 2020, to be tried before Judge Polster, to test claims against pharmacies for their lack of adequate dispensing practices was scuttled when the 6th Circuit Court of Appeals ruled that the bellwether Plaintiffs selected had amended their complaints too late to add these claims. Judge Polster then selected new bellwether Plaintiffs to try these issues. Those cases are set for trial in May of 2021.

In response to Judge Polster's quick turnaround on appointing two new bellwethers to test claims against pharmacies for their role in the opioid crisis, pharmacy Defendants in the MDL again sought to have Judge Polster removed from the case, citing bias. The Defendants had previously sought to have Judge Polster removed from the case in August of 2019, citing bias.

The Defendants accused Judge Polster of having his thumb on the scale in hopes of forcing the parties to a settlement that will resolve the litigation and alleviate the opioid crisis. I will say more on this below.

6th Circuit Again Refuses To Remove Judge From Opioid MDL

The Court of Appeals for the Sixth Circuit on July 16 rejected the second bid to disqualify U.S. District Judge Dan Polster from overseeing the opioid multidistrict litigation (MDL). This came after CVS Pharmacy Inc. and other national pharmacy chains accused the judge of blatant bias. In a brief order, the appeals court panel dismissed the pharmacies' request to disqualify.

The major pharmacy chains, including CVS, Walgreen Co. and Rite Aid Corp., made this extraordinary and unjustified request to disqualify Judge Polster, saying he showed bias by “directing plaintiffs' trial strategy.” It was their second attempt to disqualify the judge after the Sixth Circuit in October rejected their arguments that his statements in support of a settlement created an appearance of impropriety. Hopefully, these Defendants have learned a good and needed lesson. Peter H. Weinberger of Spangenberg Shibley & Liber LLP, who represents two Ohio counties that are Plaintiffs, told Law360:

Today, the Sixth Circuit once again denied an unwarranted attempt by the opioid pharmacy defendants to disqualify the opioid MDL judge, Dan Polster. In doing so, the court of appeals upheld the rule of law and affirmed Judge Polster's role in this very important and complex nationwide opioid litigation.

The motion asked the Sixth Circuit to block the newly scheduled bellwether and to “direct reassignment of this MDL” to another judge. On July 11, two Ohio counties with bellwether cases in the MDL urged the appeals court to reject the pharmacies' efforts to disqualify the judge, saying there was no basis to question his impartiality. The attempt to substitute a new MDL judge “is simply a continuation of the campaign against Judge Polster [that the pharmacies] started last year,” Lake and Trumbull counties wrote.

The cases are In re: National Prescription Opiate Litigation, (case number 1:17-md-02804) in the U.S. District Court for the Northern District of Ohio and In re: CVS Pharmacy Inc. et al., (case number 20-3075) in the U.S. Court of Appeals for the Sixth Circuit.

Source: Law360.com

Opioid Judge 'Concerned‘ About Amerisource Hiding Documents

U.S. District Judge Dan Polster on July 20 ordered AmerisourceBergen Drug Corp. to reevaluate why it hasn't produced key documents in the opioid multidistrict litigation (MDL), saying that he is “concerned” by new omissions and frequent changes in privilege designations.

The judge gave AmerisourceBergen a month to review which documents it wants to remain designated as privileged. Plaintiffs' lawyers had accused the drug distributor of not promptly producing discovery documents, one of which includes an internal email chain that joked about “pillbillies” abusing painkillers.

“The court is concerned by the rate of changed privileged designations and erroneous omissions in the sample of 110 documents,” Judge Polster said. The judge added that he was also skeptical about AmerisourceBergen's failure to explain why it didn't produce documents that addressed discovery issues or were flagged by search terms upon which the parties agreed.

While some of the documents deal with issues already resolved after last year's settlement of the MDL's first bellwether cases, Judge Polster said the remaining Plaintiffs still deserve access to discovery, which “fulfills a core purpose of the MDL.” The judge said that to deny access to a wide range of documents that include depositions, coupled with the lack of an explanation for the discovery delays, “calls into question the completeness of depositions of [AmerisourceBergen] witnesses that occurred prior to the significant expansion of its production.” Judge Polster also ordered AmerisourceBergen to propose a path for reopening depositions of witnesses.

The Plaintiff's motion summarized the contents of a number of late disclosures. They allegedly include an email exchange related to opioid addiction risks in children and a presentation to AmerisourceBergen's board of directors in 2012 about the diversion of prescription opioids for illicit uses.

The MDL is In re: National Prescription Opiate Litigation, (case number 1:17-md-02804), in the U.S. District Court for the Northern District of Ohio.

Source: Law360.com

Indivior To Pay $600 Million To Settle Suboxone Charges

Indivior PLC has agreed to pay $600 million to settle claims related to its opioid treatment Suboxone. The settlement will end litigation and investigations into claims about the safety of the drug's film form that enforcers say constituted fraud and unfair competition.

Indivior said in a statement on July 24 that the agreement covers claims from an April 2019 grand jury indictment alleging the company falsely marketed its under-the-tongue Suboxone Film as a more childproof and less addictive version of the drug's tablet form. The company said it also covers civil cases from state and federal enforcers claiming the switch from tablet to film was an anti-competitive product hop.

Under the terms of the settlement, Indivior said its Indivior Solutions Inc. unit has pled guilty to one count of making a false statement relating to health care matters in 2012. The company has also entered into an agreement with the Federal Trade Commission (FTC) to not engage in similar conduct and has a corporate integrity agreement with the Department of Health and Human Services' inspector general.

Because this settlement was announced just before this issue went to the printer, we have limited information on the matter. We will continue to monitor this matter and will report future developments.

Source: Law360.com

The Beasley Allen Opioid Litigation Team

Beasley Allen's “Opioid Litigation Team” includes Rhon Jones, Parker Miller, Ryan Kral, Rick Stratton, Will Sutton, Jeff Price and Tucker Osborne. This team of lawyers represents the State of Alabama, the State of Georgia, and numerous local governments and other entities, as well as individual claims on behalf of victims. If you need more information on the opioid litigation contact one of these lawyers at 800-898-2034 or by email at Rhon.Jones@beasleyallen.com, Parker.Miller@beasleyallen.com, Ryan.Kral@beasleyallen.com, Rick.Stratton@beasleyallen.com, William.Sutton@beasleyallen.com, Jeff.Price@beasleyallen.com or Tucker.Osborne@beasleyallen.com.

AN UPDATE ON THE WHISTLEBLOWER LITIGATION

Universal Health Services, Inc. And Related Entities To Pay $122 Million To Settle False Claims Act Case

Universal Health Services, Inc., UHS of Delaware, Inc. (together – UHS), and Turning Point Care Center, LLC (Turning Point), a UHS facility located in Moultrie, Georgia, have agreed to pay a combined total of $122 million to settle alleged violations of the False Claims Act (FCA) for billing for medically unnecessary inpatient behavioral health services, failing to provide adequate and appropriate services, and paying illegal inducements to federal health care beneficiaries.

The Department of Justice (DOJ) announced the settlement on July 10. UHS, headquartered in King of Prussia, Pennsylvania, owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide.

As part of a comprehensive civil settlement, UHS will pay the United States and participating states a total of $117 million to resolve claims that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country.

In a separate civil settlement, Turning Point will pay the United States and the State of Georgia $5 million to resolve claims that the company provided free or discounted transportation services to induce Medicare and Medicaid beneficiaries to seek treatment at Turning Point's inpatient detoxification and rehabilitation program or intensive outpatient program. Acting Assistant Attorney General Ethan P. Davis for the Department of Justice's Civil Division, in a news release, said:

The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal health care beneficiaries is reasonable, necessary, and free from illegal inducements. The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral health care providers.

Between January 2006 and December 2018, UHS's facilities admitted federal health care beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. UHS's facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS's facilities failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.

Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs. William M. McSwain, United States Attorney for the Eastern District of Pennsylvania, in the news release, said:

Quality mental health treatment is critical for the patients who place their trust in the hands of service providers. The allegations involved in this matter – inappropriate billing and inadequate care – have no place in our health care system. Behavioral health service entities must have strong mechanisms in place, including appropriate supervision and oversight, to avoid fraud and abuse in order to ensure they provide the level of care that their patients deserve.

The civil settlement with UHS resolved 19 separately filed cases. Among those cases was United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.), a whistleblower lawsuit handled by Beasley Allen lawyers Larry Golston and Leon Hampton. If you need more information on that case or the settlement generally, contact Larry or Leon, who are in our firm's Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Larry.Golston@beasleyallen.com or Leon.Hampton@beasleyallen.com.

Source: DOJ Press Release

Novartis Settlements Approved

The former Novartis Pharmaceuticals Corp. sales representative who blew the whistle on the drugmaker's scheme to pump up prescriptions through kickbacks will get $109 million plus a share of the interest paid in the $629.8 million False Claims Act (FCA) settlement that was approved on July 1. On July 22, U.S. District Judge Paul G. Gardephe signed off on a stipulation that allocated $109.4 million to Oswald Bilotta, the whistleblower. This followed the agreement in which Novartis agreed to pay $629.8 million to the federal government including $38.4 million under the Civil Asset Forfeiture Statute – in settlement.

The $109 million award to the whistleblower is 18.5% of the settlement, excluding the asset forfeiture amount, plus a share of the interest paid on the total. It's contingent on whether Novartis fully makes the settlement payments.

The settlement ends the Bilotta suit alleging “hundreds of millions of dollars of kickbacks” from Novartis to prescribers in the form of “lavish meals” and “extravagant alcohol orders.” The government, which intervened in the Bilotta case in 2013, accused Novartis of sponsoring numerous events that purported to be educational but clearly were intended to entertain doctors as incentives to write more prescriptions of Novartis drugs. The U.S. Department of Justice (DOJ) specifically cited events at “wineries, golf clubs and other sports venues,” adding that “Novartis even held 75 events at Hooters.”

When there was educational material, it was often the same few slides shown at each meeting. The government said it didn't make sense that multiple doctors went to several meetings over short periods of time, as they would learn nothing new.

The DOJ said that Novartis had attempted “to distort the evidentiary record by attacking discrete portions of the government's case, ignoring the majority of the evidence of fraudulent intent.

During the past decade, Novartis has reached multiple huge settlements with the DOJ in cases involving kickbacks. One of the earlier cases produced civil penalties worth almost $400 million, and the other produced civil and criminal penalties worth more than $400 million. In June, U.S. enforcement authorities announced that current and former subsidiaries of Novartis AG have agreed to pay $345.9 million in penalties and profits over an alleged bribery scheme at hospitals in Greece and improper record-keeping in Vietnam and other countries.

The U.S. is represented by Jeannette A. Vargas, Monica P. Folch, Jacob Lillywhite and Jennifer A. Jude of the U.S. Attorney's Office for the Southern District of New York. The whistleblower is represented by James E. Miller, Laurie Rubinow and Karen M. Leser-Grenon of Shepherd Finkelman Miller & Shah LLP. The case is U.S. ex rel. Bilotta v. Novartis Pharmaceuticals Corp., (case number 1:11-cv-00071), in the U.S. District Court for the Southern District of New York.

Source: Law360.com

Other FCA Settlements Of Note

There were a number of other False Claims Act (FCA) settlements in July. I will give a brief summary of some of them below.

Visiting Nurse Group Agrees To $57 Million Settlement In Whistleblower Suit

The Visiting Nurse Service of New York (VNSNY), one of the largest non-profit home health care agencies in America, has agreed to pay $57 million to settle a federal whistleblower lawsuit over claims of fraud and patient endangerment. The suit, brought under federal and state False Claims Acts (FCA) by a senior leader who worked at the agency for 16 years, alleged that the corporation collected Medicare and Medicaid reimbursements and falsified time sheets for services that were only partially rendered or not provided at all. The settlement has been approved by the federal government.

Lawyers who represent whistleblower Edward Lacey said the case brought to light practices that are rampant in the home care system. Gordon Schnell, a partner at Constantine Cannon who filed the suit, said:

This is a pervasive process. There's nothing unique about what we allege VNS did that's New York-focused or VNS-focused. It's the environment for home health care.

The suit, filed in the U.S. District Court in Manhattan in September 2016, accused VNSNY of bilking hundreds of millions of dollars from federal and state coffers since 2004. The agency allegedly took on more patients than it could offer nurses for, in order to bill the maximum amount of money. The patients who sought doctor-ordered care through VNSNY were disabled, immobile or elderly, and many did not speak English, according to the suit.

This is the first False Claims Act settlement that addresses the issue of the plan of care for patients. This case appears to have been “the first to challenge what happens when a home health agency ignores those directions.”

Source: Politico.com

Agendia Pays $8.25 Million In FCA Suit Over Delayed Cancer Tests

Agendia, a California molecular diagnostics testing company, has agreed to pay the U.S. Department of Justice (DOJ) $8.25 million to settle a whistleblower's False Claims Act (FCA) lawsuit alleging that the company intentionally delayed breast cancer screening tests as part of a nationwide, multiyear Medicare billing fraud scheme. The agreement settles a 2015 whistleblower suit by Cindy Flick, a former employee of Mercy Health NFP, which does business as Lourdes Hospital. It's alleged in the suit that her employer and Agendia Inc. circumvented Medicare's 14-day rule.

The rule prohibits laboratories from separately billing Medicare for tests performed on specimens ordered within 14 days of a patient's hospital discharge. Ms. Flick said that bypassing the rule by delaying tests caused false claims to be submitted to Medicare from 2010 to 2017. It was alleged in the suit that “this practice could adversely impact the health and welfare of breast cancer patients by delaying definitive identification of the genotype causing the tumor which directs treatment decisions.”

The federal government joined the Flick suit, contending that Agendia “engaged in a nationwide scheme to circumvent Medicare's 14-Day Rule so that it could inappropriately bill Medicare directly for its MammaPrint tests that were ordered within 14 days” and conspired with hospitals to artificially delay ordering the breast cancer test. Ms. Flick, a clinical lab supervisor for Mercy Health before she was terminated for insubordination, said that in March 2013 she became aware that her then-employer “was purposely holding breast tissue biopsy specimens for 14 days after patient discharge before sending them to Agendia.”

The DOJ said that Agendia perpetrated the scheme by canceling orders to perform the MammaPrint tests for Medicare patients who had been discharged less than 14 days earlier and then asking a physician to resubmit the order after 14 days had lapsed. The DOJ said Agendia would also automatically hold orders for Medicare patients at the time they were received, refusing to test the specimens until after the 14 days.

Ms. Flick's former employer, Mercy Health, reached a settlement in 2017 agreeing to pay roughly $211,000 to end false claims allegations that it worked in concert with Agendia to circumvent the Medicare rules.

The case is United States ex rel. Flick v. Agendia, Inc. and Mercy Health Partners – Lourdes, Inc., (case number 5:14-CV-00198) in the U.S. District Court for the Western District of Kentucky.

Source: Law360.com

Nursing Home Chain Reaches $10 Million False Claims Act Settlement With The DOJ

Saber Healthcare Group, LLC (Saber), an Ohio-based skilled nursing home chain, recently agreed to pay $10 million to settle False Claims Act (FCA) allegations that the company submitted false claims to Medicare for therapy services that were not “reasonable, necessary, or skilled.” The company also entered into a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG). Under the agreement, HHS-OIG will conduct an annual independent review of the organization to assess the medical necessity of therapy services billed to Medicare.

The settlement comes in the FCA lawsuit filed by three rehabilitation therapists formerly employed by Saber. The former employees filed a lawsuit in the Eastern District of Virginia claiming that Saber pressured therapists to classify patients as “Ultra High” patients without regard to the patient's condition or need. The heightened classification resulted in the patient receiving a minimum of 720 minutes of skilled therapy and resulted in maximum billing to Medicare.

According to a U.S. Department of Justice (DOJ) press release, the three whistleblowers alleged that Saber:

established uniformed expectations for Ultra High therapy in facility budgets, pressured facility directors in weekly or daily calls to ensure therapists provided the Ultra High therapy to each patient, prevented therapists from providing lower levels of therapy minutes, if in the therapists' clinical judgment, a lower amount was warranted, [and] caused therapists to report time spent providing unskilled services as time spent on skilled therapy.

The therapists alleged that the fraudulent billing scheme occurred from Jan. 1, 2013, through March 31, 2017. Pursuant to the whistleblower provision of the FCA, the three former employees will share $1.75 million from the settlement.

Conclusion

The cases mentioned above are just other examples of the widespread fraud that occurs in the health care industry. Whistleblower litigation is on the rise as a result of these abuses. We encourage health care workers who witness ongoing fraud in their work environment to document these abuses and obtain legal counsel. The whistleblower statutes provide anti-retaliation protections to those persons who are courageous enough to come forward and help to stop fraudulent billing practices, the most common abuse, from continuing. Our firm currently has a number of active cases ongoing in the federal courts.

Sources: justice.gov and DOJ press release

The Beasley Allen Whistleblower Litigation Team

Beasley Allen has a Whistleblower Litigation Team in place. Creating this team was needed to handle the large number of False Claims Act (FCA) claims the firm was receiving. Fraud against the federal government by many industries in this country, especially in health care, has been and continues to be a huge problem. We expect the amount of fraud against the government to increase greatly during the coming months.

If you are aware of fraud being committed against the federal or state governments, you could be rewarded for reporting the fraud. If you have any questions about whether you qualify as a whistleblower, you can contact one of the lawyers on Beasley Allen's Whistleblower Litigation Team for a free and confidential evaluation of your claim. There is a contact form on the firm's website ( www.beasleyallen.com).

The following Beasley Allen lawyers are on the Whistleblower Litigation Team: Larry Golston, Lance Gould, Paul Evans, Leslie Pescia, Leon Hampton, Tyner Helms and Lauren Miles. Dee Miles, who heads up our Consumer Fraud & Commercial Litigation Section, also participates in the whistleblower litigation and works with the Litigation Team.

You can reach these lawyers listed above by phone at 800-898-2034 or by email at Larry.Golston@beasleyallen.com, Lance.Gould@beasleyallen.com, Paul.Evans@beasleyallen.com, Leslie.Pescia@beasleyallen.com, Leon.Hampton@beasleyallen.com, Tyner.Helms@beasleyallen.com and Lauren.Miles@beasleyallen.com.

AN UPDATE ON MOTOR VEHICLE LITIGATION

Recreational Vehicle Dangers

In recent years, the recreational vehicle (RV) market has greatly expanded. What was once a market for small pull-behind camping trailers later grew to small RVs and has now turned into the sale of $300,000 bus-size motor homes. While these large RVs look to be stable and structurally sound, don't be fooled by the appearance. The manufacturers of these large RVs usually purchase a chassis from heavy truck manufacturers and then build structures similar to a modular home on the chassis. That ultimately becomes the completed recreational vehicle. The structures are fine for stationary construction but provide little protection when involved in a crash.

The RV industry has been very successful at avoiding the application of Federal Motor Vehicle Safety Standards to these vehicles. Currently, for most large RVs, there is no roof strength requirement. As a result, most are made with little or no structural support for the body and roof of these vehicles. They are often constructed from fiberglass, wood and aluminum of various combinations, often held together by wood screws and rivets.

When the RV is involved in a crash, there are heavy pieces of equipment such as heaters, air conditioners, sinks and cabinetry that may break loose and do significant damage to the occupants. If one of these heavy vehicles rolls over, the occupant compartment is usually destroyed because there is no significant support in the body structure to manage the energy of the crash. There is very little safety engineering that goes into the design of these vehicles.

RVs are oftentimes difficult to handle in windy conditions. Surprisingly, many of these very expensive RVs do not incorporate Electronic Stability Control (ESC). ESC is an inexpensive mechanism that has been on the market since 2006 to help control the vehicle in case of an emergency avoidance maneuver. It is used in heavy trucks, vans and passenger cars.

Large RVs usually have anti-lock brakes but not ESC. While anti-lock brakes can be very helpful to prevent an out-of-control skid, anti-lock brakes do not have the computer yaw sensors necessary to help prevent the skidding or swaying of an out-of-control vehicle.

There have been many catastrophic RV crashes around the country, and they will continue to occur until the federal government starts regulating this industry and mandating safety features that will minimize the danger. This industry needs to be regulated by Federal Motor Vehicle Safety Standards.

For more information, contact Greg Allen, the Senior Product Liability Lawyer at Beasley Allen, at 800-898-2034 or by email at Greg.Allen@beasleyallen.com.

Failure Of Autonomous Emergency Braking System On A Tractor Trailer Results In A Wrongful Death

Active braking system, also known as Advanced Emergency Braking System (AEBS) or Autonomous Emergency Braking (AEB), is an emerging vehicle safety feature used to detect and respond to an impending collision. These systems usually contain sensors that monitor the presence of vehicles and objects ahead of and around the vehicle. Some systems utilize audible alarms. The newer systems also automatically engage the brakes to mitigate and prevent a crash. The concept is well envisioned but comes with many risks of system failure that may lead to other unintended incidents and injuries.

The National Highway Traffic and Safety Administration (NHTSA) is “aggressively pursuing research related to technologies that, in addition to warning drivers of a collision threat, can take active control of the vehicle to help mitigate or avoid the crash (if warnings are not heeded by the driver, or the driver's reaction is insufficient to avoid the crash).” In particular, NHTSA is focusing its efforts on dynamic brake system (DBS) and collision imminent braking (CIB) technologies being offered by light vehicle original equipment manufacturers (OEMs). Such systems employ radar, camera, lidar and other sensor technologies to detect and track vehicles, pedestrians or objects in the forward path.

In 2019, 40 countries agreed on a draft United Nations resolution that all new cars and light commercial vehicles, beginning in 2020, would require AEBS. Countries in this agreement include Japan and the European Union, which represents some 19 million new cars each year. The United States, China and India are not part of the original 1958 agreement on which the latest regulation builds. Many U.S. automakers have already placed AEBS on luxury vehicles and now the technology is starting to appear on cheaper car models. Automakers have made a voluntary commitment to have AEBS as a new car standard by 2022.

This new technology comes with many challenges and perils. Obviously, drivers cannot test the AEBS system unless they are close to a crash. The sensors must work cohesively. If some part of the complex system does not work and a driver relies on this technology to avoid a crash, a potentially fatal event could occur. Additionally, systems can malfunction and cause a vehicle to stop in an unintended location. The complexity of these systems is the same complexity that has created great risk for driverless vehicles.

Rob Register, a Beasley Allen lawyer in our Atlanta office, is currently investigating a wrongful death case in Savannah, Georgia, where a young woman in a passenger vehicle was hit from behind by a tractor trailer while she was slowing down for traffic ahead. The collision resulted in the death of the woman and severe injuries to her two children.

The tractor trailer involved in the wreck was a 2020 year model with less than 5,000 miles. Rob's investigation revealed that the tractor trailer was equipped with an Active Brake Assist (ABA) system. According to the manufacturer's website:

The ABA radar-system feature helps mitigate the likelihood and severity of collisions, calculating the distance between the truck and other vehicles or objects in its path. It tracks up to 40 objects at once and identifies the top six by level-of-threat, refreshing 200 times per second. If the driver fails to respond, the system will initiate a sequence of warnings, and ultimately, actions.

The first in this sequence of warnings are optical and audible, and the second is a haptic, physically perceptible warning. If no action is taken by the driver in response to these warnings, ABA will instruct the anti-lock braking system, DT12 transmission and engine computers to generate the necessary sequence of braking actions required to help mitigate rear-end collisions, activating partial or full braking to slow or stop the truck, depending on the actions of the moving object ahead.

Always on, ABA detects distance to moving objects, calculating speed and determining whether warnings or actions are necessary. Based on the position and speed of your truck in relation to other vehicles, ABA warns the driver and can engage in full or partial braking to mitigate collisions that might otherwise be unavoidable.

Rob's investigation is in the early stage, but he knows that the tractor trailer had the ABA system, the system failed, and there is no apparent reason for the system not to have engaged the brakes. Rob believes that our client's mother would still be alive today had the autonomous emergency braking system worked as designed. He will continue with the investigation in an effort to see that justice is served.

If you have a case where some aspect of the autonomous or semiautonomous vehicle systems failed to work, you can contact Rob in our Atlanta office at 404-751-1162, or by email at Rob.Register@beasleyallen.com. Rob has extensive experience in the handling of Product Liability cases.

Tractor Trailer Endorsements And Surety Requirements

Part 387 of the Federal Motor Carrier Safety Administration (FMCSA) Regulations set forth the financial requirements for motor carriers. In part 387, the code discusses endorsements for policies of insurance and surety bonds. These must be in the form prescribed by the FMCSA and approved by the OBM. Endorsements to policies of insurance and surety bonds shall specify that coverage thereunder will remain in effect continuously until terminated.

Two examples are the MCS-90 and MCS-82. The practical effect of the required MCS-90 and MCS-82 endorsement is that they allow a successful Plaintiff to collect a judgment obtained against a Defendant motor carrier, up to the minimum required level of financial responsibility, from the motor carrier's insurer or bonding company; even if the motor carrier is bankrupt, insolvent, fails to conform to policy requirements triggering a reservation of rights letter from the insurance company, or is simply financially unable to pay such a judgment.

A person who obtains a judgment against a motor carrier can recover up to the amount of the MCS-90 or MCS-82 endorsement from the insurer or bonding company, even if the vehicle involved in the accident is not a scheduled vehicle, or that insurer or bonding company has denied coverage for the motor carrier's refusal to cooperate in the defense of the case or otherwise. John Deere Ins. Co. v. Nueva, 229 F.3d 853 (9th Cir. 2000).

The endorsement essentially reads as a surety to require payment by the insurer if there is an unpaid final judgment. A final judgment means a trial verdict as opposed to a voluntary settlement. The endorsement would only come into play if the tort claimant opted to take its case to trial and obtained a verdict in its favor. If a trucking company with a deductible program has succeeded in treating his or her prepetition tort claims as unsecured claims and then works to negotiate voluntary settlements to get the claims finalized, the voluntary settlements do not trigger the endorsement and can be paid as allowed unsecured claims.

If you have questions about a trucking Defendant's financial responsibility, contact Ben Keen or Cole Portis at 800-898-2034 or by email at Ben.Keen@beaselyallen.com or Cole.Portis@beasleyallen.com. Ben is in our firm's Atlanta office and Cole is in the Montgomery office. Either of these lawyers will be glad to talk with you.

Two Significant Lawsuits Involving Tesla Vehicles

Two lawsuits were filed recently against Tesla, Inc. that are most significant. I will give a brief summary of each case below.

Tesla Suit Involves A Malfunction In A Model 3

A lawsuit has been filed against Tesla Inc. involving a Maryland highway crash last year in which a Model 3's airbags failed to deploy. A college professor was left with brain damage because of injuries sustained. The lawyers who filed the suit said they believe it's the first case targeting the electric-car maker's airbags.

Elon Musk, the company's co-founder, has touted the Model 3 as the “safest car ever built” with the lowest risk of injury of any vehicle tested by government regulators. Ted Leopold, a lawyer with Cohen Milstein Sellers & Toll, who represents the family, said:

Despite Tesla advertising the Model 3 as the safest car ever made, our lawsuit alleges there are fundamental problems with the safety features of the car. We look forward to reviewing Tesla's design, development and testing of this car.

Alleged defects in Tesla's Autopilot system have been blamed in several lawsuits for deaths and injuries. The company has also faced scrutiny of the technology by federal safety regulators. Separately, the National Highway Traffic Safety Administration (NHTSA) is investigating premature failures of the large central touchscreen and the computer that powers it in Tesla's Model S sedans.

It's alleged in the complaint in this suit that the Model 3, belonging to the family of Kristian and Jason Edwards, was struck by another vehicle in July, causing it to slam into a guardrail on the I-95 interstate highway. None of the Tesla vehicle's airbags deployed and Kristian Edwards, a public-health professor at George Washington University in Washington who was wearing her seat belt, suffered major head trauma and other injuries. Her son who was in the back also was injured. The suit seeks damages for Kristian Edwards' lost earning capacity, medical expenses, and her pain and suffering related to the accident.

The case is Edwards v. Tesla Inc., California Superior Court, Alameda County (Oakland).

Source: Law360.com

Class Action Lawsuit Filed Against Tesla Involving A Sudden Acceleration Defect

A revised class action lawsuit was filed against Tesla, Inc. last month in a California federal court. The suit, originally filed in January on behalf of eight Tesla vehicle owners in five states, was expanded to include 23 named Plaintiffs in 11 states. The Plaintiffs allege Tesla's Model S, Model X and Model 3 electric vehicles contained a “sudden uncommanded acceleration” (SUA) defect. Tesla's full-bore pursuit of electric-vehicle innovation has compromised safety, resulting in defectively designed cars that could abruptly accelerate without warning, according to the lawyers who filed the suit.

The Plaintiffs contend they have “empirical and anecdotal evidence” indicating that the integrated electronic hardware and operating software of Tesla's 2013-2020 Model S, 2016-2020 Model X and 2018-2020 Model 3 all suffer from the SUA defect. The allegations stem from a preliminary review the National Highway Traffic Safety Administration (NHTSA) commenced in January after receiving a petition requesting a formal investigation into complaints that as many as 500,000 Tesla vehicles contained a defect that can cause sudden unintended acceleration, which may result in crash and injury.

To date, NHTSA has received 195 reports of sudden uncommanded acceleration in Tesla vehicles, with many of the incidents similarly alleging that the Tesla vehicle was being operated at a normal or slow speed and abruptly accelerated even as the driver pressed on the brake pedal, according to the second amended complaint.

The named Plaintiffs are seeking to represent a nationwide class as well as classes of drivers in California, Arizona, Florida, Georgia, Massachusetts, New Jersey, North Carolina, Oregon, Pennsylvania, Texas and Washington.

The Plaintiffs are represented by Richard D. McCune, David C. Wright, Steven A. Haskins and Mark I. Richards of McCune Wright Arevalo LLP; Benjamin L. Bailey, Eric B. Snyder, Jonathan D. Boggs, Arthur H. Bryant and Todd A. Walburg of Bailey Glasser LLP; and Donald H. Slavik of Slavik Law Firm LLC. The case is Inkie Lee et al. v. Tesla Inc. et al., (case number 2:20-cv-00570), in the U.S. District Court for the Central District of California.

Source: Law360.com

PRODUCT LIABILITY UPDATE

The Hazards Of Exploding Cannisters

We are all familiar in some manner with cannisters and their many uses. Many people purchase cannisters to carry their lunch to work with them, to take on trips and the like. Food and beverage cannisters are sold or marketed under a number of different brand names, such as Thermos, Yeti, Ozark Trails and more. What most do not know is that certain of these cannisters can become explosive and potentially dangerous when used with carbonated beverages, fruit juices, or hot food or liquids.

Typically, the cannisters are vacuum sealed. Some consumers have reported incidents of using their cannisters with juices or carbonated drinks, forgetting to empty or clean out the cannister after a couple of days, or just leaving them in their hot vehicles. In such situations, the product inside the cannister will break down, creating gases, and result in pressure being applied to the top of the lid. A similar phenomenon occurs when hot beverages or soups are placed in the cannisters. The steam can cause pressure on the lid and also create a potential explosive environment.

Many manufacturers of these products have realized that this scenario creates a hazard. The more responsible companies have begun providing some type of pressure release mechanism, which permits the user to release any pressure inside of the cannister before attempting to remove the top. The pressure release mechanisms can be as simple as a pin hole in the top, a bush button release, a lever release, or any number of similar options. These options can add almost no cost to very little cost to the product, and the costs certainly pale in comparison to the protection afforded by the safer cannisters.

A YouTube search by simply typing in “exploding thermos” in the search bar will reveal videos of the aftermath of exploding food and beverage cannisters that were sold without a pressure release mechanism. The Thermos brand products, however, are not the only ones that have had these reported incidents. Beasley Allen lawyers, for example, have filed a lawsuit against Walmart and the importer of the Ozark Trail cannisters. A similar lawsuit has been filed in the State of Washington against Walmart involving essentially the same product.

Stanley, a maker of food and beverage cannisters, has also been sued for a similar incident. In all three instances, the cannisters exploded and caused the user to lose an eye. Other incidents have been reported of injuries and property damage as a result of a top exploding from a cannister as a result of pressure building up in the cannister.

These products are regulated by the Consumer Product Safety Commission (CPSC). If an event such as those described above occurs, you are encouraged to report it to the CPSC at www.cpsc.gov. If you have any questions, contact Ben Locklar, a lawyer in our firm's Personal Injury & Products Liability Section, at 800-898-2034 or by email at Ben.Locklar@beasleyallen.com.

Sources: macon.com, kiro7.com dillerbottle.com pantagraph.com and pennrecord.com

Polaris Recalls ATVs, UTVs And Rangers Due To Crash Hazards

Polaris is recalling nearly 30,000 all-terrain, ranger, and general utility vehicles because they have defects that pose crash hazards. The recall involves Model Year 2019-2020 Ranger XP 1000, Model Year 2020 General XP 1000 Utility Vehicles (UTVs). The issue involves software that causes the throttle to fail to return to the idle position after the engine stalls and is restarted in gear without switching the key to the off position. This causes the vehicle to accelerate suddenly, posing a crash hazard. About 26,730 of the UTVs were sold in the United States. An additional 1,330 units were sold in Canada.

This recall involves Model Year 2019 Polaris Ranger XP 1000 EPS, Ranger CREW XP 1000, and Model Year 2020 Polaris Ranger XP 1000, Ranger CREW XP 1000, General XP 1000 Deluxe and General XP 4 1000 Deluxe, sold at Polaris dealers nationwide from June 2018 through March 2020 for between $15,890 and $29,000.

The vehicles were sold in gray, blue, white, red, green camo, orange, sand and maroon colors and have two or four seats. “POLARIS” is stamped on the front grille and “Ranger” or “General” is printed on the sides of the rear cargo area. Vehicle identification numbers (VIN) included in this recall can be found stamped into the left rear vehicle frame below the cargo box. The following model names are included in this recall:

  • Ranger XP 1000 (Model Year 2020)
  • Ranger XP 1000 EPS (Model Year 2019)
  • Ranger Crew XP 1000 (Model Years 2019 & 2020)
  • General XP 1000 Deluxe (Model Year 2020)
  • General XP 4 1000 Deluxe (Model Year 2020)

Polaris is also recalling Model Year 2018-2020 Polaris Phoenix 200 ATVs because the throttle lever stop can fail due to shipping, posing a crash hazard. Polaris has received five reports from consumers involving this issue, four of which pertain to the throttle stop breaking, and one to the throttle stop sticking. About 2,800 of the ATVs were sold in the United States and an additional 245 in Canada.

This recall involves all model year 2018 through 2020 Phoenix 200 ATVs sold at Polaris dealers nationwide from November 2017 through April 2020 for between $3,800 and $4,200. “Polaris” is decaled on the front body and on the sides of the ATV seats, and “Phoenix 200” is decaled on the side panels. The ATVs were sold in a gray color. The Vehicle Identification Number (VIN) is located on the vehicle's front left frame. The following model names are included in this recall:

  • Model Year 2018 — A18YAP20A8, A18YAP20N8
  • Model Year 2019 — A19YAP20A4, A19YAP20N4
  • Model Year 2020 — A20YAP20A4

No injuries with either issue have been reported to date. However, consumers should immediately stop using the recalled vehicles and contact a Polaris dealer to schedule a free inspection and repair. Polaris is notifying dealers and contacting registered owners directly.

Source: CPSC

BodyGuard Infusion Pumps And Systems Recalled

Becton, Dickinson and Company (BD) subsidiary CME America is expanding a recall of its BodyGuard Infusion System Administration Sets, used with the company's BodyGuard infusion pumps, after testing revealed that some infusion sets do not meet the ±5% delivery accuracy for the system or the ±13% accuracy identified in the earlier recall announcement dated April 27, 2020. As a result, the devices could potentially cause over-infusion or under-infusion of therapy and lead to patient harm.

The BodyGuard Infusion Pump System delivers fluids and medications into a patient's vein or other cleared route in controlled amounts. The system is used in hospitals and home care environments.

The recall affects all CME America BodyGuard Infusion Pump Systems, used with the company's BodyGuard infusion pumps, that were distributed beginning May 16, 2020. In April, CME America had also announced that it was suspending distribution of the BodyGuard infusion pumps and removing all existing products from the U.S. market.

The company has defined four categories of infusion sets based on delivery inaccuracy variability, two of which can continue to be used in accordance with the instructions in the recall letter. Thus, until the devices have been removed, CME America will continue to supply accessories and infusion sets in “Category A” and “Category B” to support the infusion pumps. Affected products include:

  • BodyGuard BodySet
  • BodyGuard Microset with Needleless Adaptor
  • BodyGuard Microsets
  • BodyGuard Microset w/ Non-Vented Spike Connector
  • BodyGuard set with Female Luer
  • BodyGuard Microset w/ 0.2 mic filter and lower y-site with female luer
  • BodyGuard Microsets with Filter
  • Standard BodySet with Needleless Connectors
  • BodyGuard Microset with Filter and Manual Priming Valve
  • CMExpress Microbore Sets
  • BodyGuard Microset with Male Luer Connectors
  • CMExpress Needleless Y Site Microbore Set

Any adverse reactions related to this recall should be reported to the Food and Drug Administration (FDA) MedWatch Adverse Event Reporting Program at www.fda.gov/medwatch.

Sources: BD.com, Biospace.com and FDA

Suzuki Motorcycles Recalled Because Of Safety Defect

Very recently, Suzuki Motor Corporation and Suzuki Motor of America, Inc. (collectively “Suzuki”) issued a recall on a safety defect affecting more than 200,000 motorcycles. This recall involved a defect in the braking systems of the motorcycles, one that may result in brake failure. Suzuki knew about this defect months before the recall notice was issued to consumers based on accident reports received, all similar to one another. One such incident will be mentioned below:

The Johns Accident

In August of 2013, Adrian Johns was severely injured after the front brakes on his Suzuki motorcycle abruptly failed. In February of 2014, Mr. Johns and his wife filed suit in Douglas County (Georgia) State Court against both Suzuki Motor Corporation, the motorcycle's manufacturer, and the American distributor, Suzuki Motor of America, Inc. The lawsuit made several claims, all related to the defective braking system, in the complaint.

At trial, evidence showed that the brake failure that caused the motorcycle accident was due to a design defect in the front brake master cylinder leading to a corrosive condition. This, in turn, caused a total leak of brake fluid. Nearly two months after Mr. Johns' accident, Suzuki issued a recall warning about a safety defect in the front brake master cylinder, the cause of Mr. Johns' accident. Suzuki had notice of this particular issue months before the recall notice was issued, and before this motorcycle accident happened. Suzuki had received reports of other accidents similar to Mr. Johns' accident.

At trial, the jury ruled in the Plaintiffs' favor, ruling against Defendant Suzuki on all claims. The jury awarded $10.5 million to Mr. Johns and $2 million to his wife for “loss of consortium,” or “loss of companionship.” However, on appeal, the finding that the motorcycle brakes were defective was upheld, but the award to Mr. Johns was reduced from $10.5 million to a little more than $6 million.

As a result of the Johns lawsuit and the attention it brought to Suzuki's motorcycle product defects, the company has recalled a total of 210,288 motorcycles due to defective brakes, such as the one that caused Mr. Johns' accident.

According to Suzuki, a dangerous gas was forming inside the front brake master cylinder, as in Mr. Johns' case, resulting in a reduced braking power and an increased risk of crashing. The recalled Suzuki motorcycles include these models: GSX-R600, GSX-R750, and GSX-R1000, all from model years 2004-2013. Dealers are now replacing the defective area on the motorcycles free of charge.

Polaris Recalls Ranger Off-Road Vehicles And PRO XD And Bobcat Utility Vehicles Due To Crash Hazard

Polaris has recalled about 3,200 2019 Polaris PRO XD 4000D. An improperly manufactured clutch component can cause the engine braking feature to fail, resulting in unexpected vehicle motion, posing a crash hazard. The company has received 14 reports of unexpected motion or drive clutch locking, including one report of a crash resulting in property damage. Thus far no injuries have been reported.

This recall involves Model Year 2020 Ranger XP 1000 and Ranger CREW XP 1000 Off-Road Vehicles, Model Years 2019-2020 PRO XD 4000D UTVs, Model Year 2019 PRO XD 2000D, and Model Year 2020 Bobcat UV34 and UV34XL UTVs. The vehicles were sold in maroon, black, sand, green, orange, blue, camo, gray and white colors and have two or four seats. For PRO XD and Ranger models, “POLARIS” is stamped on the front grille and “POLARIS PRO XD” or “Ranger” is printed on the sides of the rear cargo area. For Bobcat models, “Bobcat” is printed on the sides of the rear cargo area. The VINs included in this recall can be found stamped into the left rear vehicle frame below the cargo box. The following model names are included in this recall:

Year Model Name
2019 PRO XD 4000D
2019 PRO XD 2000D
2020 PRO XD 4000D
2020 Ranger XP 1000
2020 Ranger XP 1000 Crew
2020 Bobcat UV34
2020 Bobcat UV34XL

Polaris dealers nationwide sold the vehicles from September 2019 through April 2020 for between $14,600 and $26,300. Consumers should immediately stop using the recalled vehicles and contact a Polaris dealer to schedule a free inspection and repair, if needed. Polaris is notifying dealers and contacting registered owners directly. Polaris can be contacted at 800-765-2747 from 7 a.m. to 7 p.m. CT Monday through Friday or online at www.polaris.com and click on “Off Road Safety Recalls” for more information. In addition, check your vehicle identification number (VIN) on the “Product Safety Recalls” page to see if your vehicle is included in any recalls.

UPDATE ON THE BOEING LITIGATION

Boeing Says 90% Of Claims In Lion Air Crash Suit Have Been Settled

Boeing told an Illinois federal court on July 7 that it has settled more than 90% of the wrongful death claims arising from the October 2018 Lion Air crash involving the now notorious 737 Max 8 model airplane, which killed all 189 passengers on board. Boeing said it had resolved 140 of the 150 wrongful death claims in the Chicago federal court, and it had fully or partially settled a total of 171 wrongful death claims stemming from the Lion Air disaster. The company said in its filing with the court:

The plaintiffs and Boeing continue to discuss settlement on the remaining claims, and have additional mediations scheduled. Boeing is optimistic that those discussions will lead to additional settlements of some, if not all, of the remaining claims.

U.S. District Judge Thomas Durkin has previously dismissed other suits that had settled earlier, but he said he would keep jurisdiction over the cases to effectuate the settlement agreements, including to resolve any enforcement issues and lien adjudications or to provide approvals where necessary. Judge Durkin began accepting the reassignment of related cases in January 2019 and took in another 25 cases in April 2019 for the consolidated suit.

Many of the lawsuits fault Boeing for installing angle of attack sensors on the plane that reported inaccurate data to the flight control system, which then activated the 737 Max 8's new anti-stall system and forced the plane into a nosedive. Judge Durkin has effectively delayed the suits while mediation continues. As we have reported, Boeing's Max 8 aircraft was involved in both the Lion Air crash and the March 2019 crash of Ethiopian Airlines Flight 302 that killed 157 people. The deadly disasters have resulted in an avalanche of litigation against Boeing. The Max 8 planes were grounded globally.

The case is In re: Lion Air Flight JT 610 Crash, (case number 1:18-cv-07686) in the U.S. District Court for the Northern District of Illinois.

Source: Law360.com

Federal Investigators: Boeing Deceived FAA On MAX Design Changes

A report released last month by the Department of Transportation (DOT) Office of Inspector General (OIG) found that Boeing withheld documentation from the Federal Aviation Administration (FAA) detailing how the planemaker changed the MCAS, making it more powerful after the agency's initial review of the revamped 737 and its latest iteration – the MAX, according to Reuters.

The MCAS, or flight control system, was added to help counter design defects that caused the MAX's nose to continue to pitch higher and higher, which can lead to stalling and eventually a crash. The MCAS was at the center of the aircraft's two deadly crashes that claimed 346 lives. Inaccurate readings from the aircraft's only sensor improperly activated the MCAS, setting in motion a series of events that led to both tragedies.

The MCAS itself is defective and this alone should have prevented the MAX from being cleared for passenger service if the FAA had been more actively involved in certifying the plane. While Boeing provided incomplete information to the FAA, ultimately the hands-off, self-certifying approval process failed our clients' loved ones and all others who perished in the two tragedies.

According to the OIG report, “Boeing did not submit certification documents to the FAA detailing the change.” It explains that while the agency's flight test personnel were aware of the change, other key certification engineers and personnel were not aware of the change.

Business Insider previously reported that the manufacturer increased the MCAS power following the FAA's initial review of the system, increasing it by as much as four times the strength of the version reviewed by the agency. While the FAA was aware that the MCAS had been modified, it wasn't adequately informed of the changes by Boeing. In fact, as the OIG report highlights, Boeing underplayed the significance of the changes. The FAA then failed to conduct a detailed review of the MCAS until three months after the first deadly crash, which involved Lion Air flight 610 off the coast of Indonesia in October 2018. The OIG report noted that documentation of the long-overdue review was never completed.

Federal investigators also learned that the FAA analyzed the 737 MAX's safety risk. The review showed the risk exceeded its own guidelines of one fatality per 10 million flight hours. The risk was more than double the guidelines at 2.68 per 10 million flight hours, yet the agency did not ground the plane until after the second fatal crash. This one involved Ethiopian Airlines flight 302.

Several reports have announced similar findings – that Boeing, the FAA and the certification process all failed to keep the traveling public safe. Other investigations, including a Department of Justice (DOJ) criminal probe, are ongoing.

Since the MAX was grounded worldwide in March 2019 Boeing has repeatedly announced dates for returning the aircraft to passenger service. The leading U.S. planemaker had to walk back those announcements each time after more problems were discovered with the MAX. However, last month, the FAA conducted test flights for the MAX, a step that puts the aircraft closer to returning to passenger service. The milestone in the re-certification of the updated MAX came just weeks after the agency announced it would not overhaul its approval process that initially placed the deadly aircraft in passenger service.

Sources: Reuters, Department of Transportation Office of Inspector General and Business Insider

Boeing's 737 MAX Still Grounded But Closer To Recertification

The deadly 737 MAX remains grounded but test flights by Federal Aviation Administration (FAA) test pilots last month potentially move the plane closer to returning to passenger service, NPR reported. The U.S. was one of the last countries to ground the plane in March 2019 after it was involved in the second of two fatal crashes. The series of test flights are scheduled for multiple days and while the FAA warned there is still much to be addressed before the aircraft is cleared to fly, conducting test flights indicates that the agency is content enough with the fixes Boeing has implemented up to now to move forward with the next stages of recertifying the MAX, according to the LA Times.

The crashes of Lion Air flight 610 and Ethiopian Airlines flight 302 claimed the lives of 346 people. A defect in the aircraft's MCAS or flight control systems caused the aircraft to malfunction and repeatedly push the nose down unnecessarily. Pilots of the two flights fought hard to recover the flights but couldn't avoid the tragedies set in motion by the defective aircraft.

This puts the MAX one step closer to resuming passenger travel and should give air travelers cause for concern. Despite its assurances to sign off on every individual MAX jet, the FAA recently announced that it has no intention to change the review process for aircraft certification that placed this defective plane in the passenger service in the first place. The agency will continue relying on aircraft manufacturers to self-certify even in the face of Boeing's documented deception about the MAX during the initial approval process.

Following the flight 302 crash, Boeing repeatedly announced dates for returning the aircraft to passenger service. The leading U.S. planemaker had to walk back those announcements each time after more problems were discovered with the MAX. The manufacturing giant had hoped to get the green light for the aircraft before the end of 2019 but received pushback from the FAA's administrator, Stephen Dickson, who was appointed in August 2019 after 19 months of the agency operating under only an acting administrator, as Fortune previously reported on the prior administrator's leaving office.

The FAA said the test flights would involve “a wide array of flight maneuvers and emergency procedures to assess whether the changes meet FAA certification standards” and that the flights would be conducted by both FAA and Boeing test pilots and engineers. It explained that “while the certification flights are an important milestone, a number of key tasks remain.” It further stated that it “will lift the grounding order only after we are satisfied that the aircraft meets certification standards.”

The FAA has been publicly criticized for its role in approving the defective aircraft. Global regulators were among the earliest and staunchest critics. Many regulatory bodies in other countries have announced that their decision to return the MAX to passenger service will only come after they personally review the updates. They will no longer follow the decades' long tradition of rubber-stamping the FAA's approval.

Even before the COVID-19 pandemic sent a crushing blow to the airline industry and forced many airlines to cut costs, Boeing began to see canceled contracts for purchases of its MAX aircraft. The most recent cancellation came the same day as the test flight, when Norwegian Air Shuttle canceled its order for 97 Boeing jets including 92 MAX aircraft. Boeing has lost $18.7 billion and experts expect that number will continue to climb, according to CNN. Yet, rumors suggest one of Boeing's top purchasers of the 737 MAX, Southwest Airlines, is considering replacing its entire fleet with the MAX despite its questionable safety performance.

Sources: NPR, LA Times, Fortune, Federal Aviation Administration (FAA), and CNN

Mike Andrews Is Beasley Allen's Lead Attorney On The Boeing Litigation

Mike Andrews, a lawyer in our Personal Injury & Products Liability Section, focuses much of his practice on aviation litigation. Currently, he is representing a number of families in the Boeing litigation. Mike, who is also currently investigating other potential cases, visited the Ethiopian Airlines flight 302 crash site and surrounding areas several times last year and was overwhelmed at the carnage left behind after the flight hurled itself and passengers 30 feet into the earth.

If you would like to have more information on the Boeing litigation, or any other aspect of aviation litigation, contact Mike at 800-898-2034 or by email at Mike.Andrews@beasleyallen.com. Mike also has written a book on litigating aviation cases to assist other aviation lawyers, “Aviation Litigation & Accident Investigation.” The book offers an overview to the practitioner about the complexities of aviation crash investigation and litigation.

AN UPDATE ON THE JUUL LITIGATION

Vaping Claims Are Not Barred By Preemption According To Vape Users

Consumers involved in the federal multidistrict litigation (MDL) against JUUL told Judge William H. Orrick, who is in charge of the MDL, in June that their claims are not barred by federal preemption laws and that Congress never intended for their claims to be barred by the Tobacco Control Act (TCA). In the TCA, Congress gave the U.S. Food and Drug Administration (FDA) authority to regulate tobacco products. Consumers contend that in doing so, they preserved the rights of states to oversee litigation regarding these products. Specifically, the Act broadly protects the right of states to oversee the advertising and sales of tobacco products, including any ensuing litigation.

The consumers said that the TCA was written with the knowledge of potential for private litigation in state courtrooms. They stated:

Cognizant of that history, Congress chose not to remain silent and leave it to the courts to identify and police the limits of traditional state authority in the areas newly subject to federal regulation. Instead, Congress wrote what may be the most detailed and carefully crafted preemption provision in the U.S. Code, with a thumb firmly on the scale against preemption.

JUUL Labs, Inc. claims that the TCA “preempts all state-law claims having anything to do with tobacco products deemed subject to FDA authority,” which they claim should give them immunity. In response, the consumers point out that the FDA has not yet provided any requirements or guidelines for JUUL to follow in its product design, which would render the application of preemption in this context moot.

Additionally, many of the Defendants in the MDL have recently requested to be dismissed as Defendants from the litigation as a whole. Altria has requested to be dismissed from any claims under California's unfair business practice laws, as well as any claims regarding actions that occurred prior to Altria's purchase of JUUL in December 2018. Co-Founder James Monsees and Directors Hoyoung Huh, Nicholas Pritzker and Riaz Valani are making similar requests.

The JUUL Litigation Team

Lawyers in Beasley Allen's Mass Torts Section continue to investigate new cases involving individuals who have been injured by JUUL's products. Beasley Allen lawyers Joseph VanZandt, Sydney Everett, James Lampkin, Beau Darley, Soo Seok Yang and Mass Torts Section Head Andy Birchfield are currently representing a number of individuals who are suing the top U.S. vape maker JUUL for the negative impact its products have had on their lives. These lawyers currently make up our firm's JUUL Litigation Team. The team has also filed lawsuits on behalf of school districts nationwide, which seek to protect students and recover resources spent fighting the vaping epidemic.

If you have a potential claim or need more information on JUUL, contact any the lawyers on the team at 800-898-2034 or by email at Joseph.VanZandt@beasleyallen.com, Sydney.Everett@beasleyallen.com, James.Lampkin@beasleyallen.com, Beau.Darley@beasleyallen.com, SooSeok.Yang@beasleyallen.com, or Andy.Birchfield@beasleyallen.com.

MASS TORTS UPDATE

Consolidated California State Court Action Involving HIV Drug Moves Forward

Plaintiffs across the country have filed numerous cases against Gilead, the manufacturer of Viread, an HIV drug, with most being filed in California because Gilead is headquartered in Foster City, California, near San Francisco. These lawsuits allege that Gilead failed to warn that Viread had to be administered in high doses to be effective. The manufacturer was also aware that Viread could cause damage to the kidneys and bones. Plaintiffs allege in the cases that Gilead delayed the development of a less toxic and more effective HIV drug called “tenofovir alafenamide fumarate” (TAF) in order to prevent competition with Viread.

TAF is an HIV drug used to control and prevent the virus from multiplying inside the body, which allows those infected with the HIV virus to live longer, more productive lives. Gilead's version of tenofovir, tenofovir disoproxil fumarate (TDF), was approved the U.S. Food and Drug Administration (FDA) in October 2001 and sold under the brand name Viread.

Even at the time Viread was approved in 2001, Gilead was already working on its less toxic version of the drug, TAF. Plaintiffs allege that Gilead then paid doctors across the country to give TAF to patients in small clinical trials, which showed extremely positive results. However, Gilead delayed publishing those clinical trial results for years in order to maintain secrecy about TAF. In October 2004, Gilead announced that the company was ending its research on the safer TAF due to an “internal business review.” However, Gilead continued to apply for new TAF patents. Four years later, in 2018, Gilead's patent for TDF expired.

Several lawsuits in California claim that Gilead purposefully delayed revealing TAF studies until TDF's patent expired. While Gilead knew of a safer drug, Plaintiffs taking Viread suffered from both kidney and bone injuries. The kidney injuries include chronic kidney disease, acute kidney failure, declining kidney function and Fanconi syndrome. The bone injuries include loss of bone mineral density, osteoporosis, osteopenia, and bone fractures or loss.

In May 2019, Plaintiffs filed a Judicial Council Coordinated Proceedings (JCCP) Petition for Viread. Similar to a multidistrict litigation (MDL) in federal courts, a JCCP consolidates filed cases in California state courts. The JCCP for Gilead Tenafovir Cases formed in the Superior Court of California in San Francisco County in mid-2019. In the Viread JCCP, Plaintiffs continue to push forward with discovery to learn more about what Gilead knew and when the company knew it.

For more information, contact Chad Cook, Ryan Duplechin or Melissa Prickett, lawyers in our firm's Mass Torts Section, at 800-898-2034, or by email at Chad.Cook@BeasleyAllen.com, Ryan.Duplechin@BeasleyAllen.com or Melissa.Prickett@BeasleyAllen.com.

District Judge Rejects Snap Removal And Remands More Than A Dozen Hip Cases To State Court

District of New Jersey U.S. Magistrate Judge James B. Clark has in a Report and Recommendation recommended the remand of more than a dozen defective hip replacement implant cases. Those cases before the court were removed through a process known as “snap removal,” which occurs when a case is removed from state to federal court prior to service on a forum Defendant.

The general rule is that a Defendant may not remove a case to federal court where the action includes a non-diverse Defendant or a Defendant who is a resident of where the action was originally filed. This is the “forum Defendant rule” as codified in 28 U.S.C. § 1441(b)(2).

The statute prohibits removal of diversity cases “if any of the parties in interest properly joined and served as Defendants is a citizen of the State in which such action is brought.” Snap removal is a loophole that allows Defendants to dodge the forum Defendant rule.

Jackson v. Howmedica Osteonics Corp., et al., Civil Action No. 19-18667, is one of several cases filed in New Jersey state court. Howmedica is incorporated and has its principal place of business in New Jersey. Previously, the Third Circuit held that a forum Defendant may remove a case to federal court prior to being served. Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., 2018 WL 3999885 (3d Cir. Aug. 22, 2018).

Howmedica removed to federal court on the basis of diversity pursuant to this holding. Plaintiffs subsequently filed a motion to remand stating that Howmedica was served via its registered agent. Also, Plaintiffs said direct service was attempted at its New Jersey corporate headquarters, but Howmedica “deliberately delayed accepting [this latter form of] service until the process of removal had been completed.”

Plaintiffs argued that because the Defendant was properly served via its registered agent prior to removal, the removal was barred by the forum Defendant rule. Howmedica argued that service via registered agent did not prevent removal because the Defendant was not properly joined and served until it actually received a copy of the summons and complaint.

Judge Clark disagreed with Howmedica's arguments regarding the forum Defendant rule. His recommendation held Howmedica's position “service was not complete for the purposes of the forum Defendant rule until Defendant actually received notice of such service from its registered agent” lacked support in the law. Judge Clark said that the “exception to the applicability of the forum Defendant rule exists, or should exist, where process is served only via service on a Defendant's agent.”

The exception did not apply in this instance because the Plaintiffs also sought to directly serve Howmedica. Howmedica also argued that New Jersey law recognizes a “legal ‘separation' between Defendants and agents.” The court held that while there is a distinction, “New Jersey law is clear that a corporation is properly served with process via service on its appointed agent.” Judge Clark granted Plaintiff's motion for remand.

Judge Clark's recommendation is a step in the right direction for Plaintiffs. Snap removal is an affront to a Plaintiff's right to have their case heard in the appropriate court. Defendants should not be allowed to side-step having a case heard in state court by evading service.

Source: natlawreview.com

AN UPDATE ON INSURANCE LITIGATION

Business Interruption Insurance Litigation Update

A significant issue for many businesses throughout the country is whether a business owner's insurance policy will cover income losses incurred during the COVID-19 pandemic as a result of closing their doors or significantly decreasing their business operations. Business interruption insurance is typically part of a business owner's commercial property coverage or may be a part of a stand-alone policy.

In either event, regardless, business interruption insurance helps a business cover bills and payroll in the event of a disaster that forces the business to temporarily close. Because many business owners have been required to close as a result of the COVID-19 threat and the resultant government orders, many business owners are turning to their insurance policies to determine if business interruption coverage will provide them some relief.

Many businesses with arguable claims for coverage have filed lawsuits either seeking a declaratory judgment that their losses due to the shutdown are covered under their policies or claiming breach of contract after coverage has been denied by their insurers. A majority of lawsuits alleging business interruption losses should be covered have been filed by small businesses and restaurant owners. However, claims have also been filed by other businesses as well, such as doctors, dentists, hotels, restaurants, gyms, and even a group of minor league baseball teams. As a general rule, coverage for business interruption losses due to coronavirus closures will depend on the specific language of each business's policy and the nature of the business. However, the current situation is being seen as somewhat different.

Many policies attempt to exclude losses caused by viruses or microorganisms. Following viral outbreaks in the early 2000s, like SARS and MERS, many insurers added exclusions to their commercial property and business interruption insurance policies to preclude coverage for losses caused by or arising from viruses or microorganism. Most policyholders were not specifically told of the exclusion being added to their policy. The effect of these virus and similar exclusions are also the subject of litigation throughout the country.

Due to the volume of these cases involving business interruption claims, the consolidation of such cases in multidistrict litigation (MDL) was proposed in late April. To date, consolidation has been proposed in either the Eastern District of Pennsylvania, Northern District of Illinois, Southern District of Florida, Western District of Missouri, Western District of Washington, or Northern District of California. The anticipated hearing date for the Judicial Panel on Multidistrict Litigation (JPML) to decide the consolidation and transfer issues was on July 30. So, we won't be able to include the MDL court in this issue.

Additionally, federal and state legislators are considering whether to compel insurance companies to cover business interruption losses due to the COVID-19 pandemic. At the federal level, Rep. Mike Thompson of California introduced a bill, “Business Interruption Relief Act of 2020,” that would create the “Business Interruption Relief Program (BIRP)” to provide federal government reimbursement for insurers that voluntarily pay business interruption claims related to COVID-19. Also, Rep. Carolyn Maloney of New York has introduced a bill called the “Pandemic Risk Insurance Act,” which would create a federal program for business interruption losses. However, the proposed “Pandemic Risk Insurance Act” would only apply to losses arising from future pandemics.

At the state level, bills have been introduced in at least nine states that would require insurers to retroactively cover business interruption losses from the COVID-19 pandemic. However, any bills requiring retroactive coverage would likely give rise to a variety of constitutional and other legal challenges.

Beasley Allen lawyers are actively investigating and filing claims against various insurance companies for denial of business interruption coverage during the COVID-19 pandemic. Our lawyers are involved in advocating for consolidation of these actions in an MDL. Dee Miles, head of our Consumer Fraud & Commercial Litigation Section, Rachel Boyd and Paul Evans, lawyers in the Section, are spearheading this litigation for our firm and are monitoring all MDL developments as they arise.

Our team of lawyers has partnered with several other firms throughout the country and together they have developed some innovative and sound legal arguments that should prevail against the insurance companies that are fighting their own policyholders to escape paying legitimate business interruption claims.

If you have any questions, or you would like to discuss potential claims, contact Dee, Rachel or Paul at 800-898-2034 or by email at Dee.Miles@beasleyallen.com, Rachel.Boyd@beasleyallen.com, or Paul.Evans@beasleyallen.com.

Sources: jdsupra.com and claimsjournal.com

AN UPDATE ON SECURITIES LITIGATION

Investor Impact Of Covid-19 Part 2: Leveraged Exchange Traded Notes Crater With Covid-19

Last month we focused on how investors holding non-traded REITs (Real Estate Investment Trusts) were affected when the COVID-19 pandemic sent markets lower around the globe. This month we will examine another particular type of investment that was hit especially hard by the shock to markets: a particular form of Exchange Traded Note (ETN) called a leveraged ETN.

In the months that have passed since the major U.S. indices dipped by more than 30%, markets have recovered quite a bit. However, because of the nature of leveraged ETNs, many investors may never have had a chance to recover.

Leveraged ETNs are complex products that carry significant risks that many investors don't fully understand. These securities, like non-traded REITs, may never have been suitable for most investors in the first place, meaning a broker or investment advisor who sold them to a client could have violated their duties to those clients.

Most investors are familiar with stocks and bonds, two of the most common forms of investment. Private companies issue stock to publicly sell ownership interest in the company. Bonds are issued by private companies as well as U.S. and foreign federal, state, county, and even city governments. A bond does not give the holder any ownership interest in the company or government, but instead entitles them strictly to payment of a debt. That debt can be secured by collateral or be unsecured.

Usually, in the event of a corporate bankruptcy bond holders have a superior interest in the assets of a company as collateral, so they are paid before stockholders are paid for their shares. If fully paying bond holders consumes all assets of the company, the stockholders will get nothing. For this reason, bonds are considered more secure investments, so they are less volatile and generate smaller returns.

In the early 1990s, the Wall Street firms created the Exchange Traded Fund (ETF), which, like a mutual fund, allowed investors to purchase a single share that represented investment in a group of assets like stocks, bonds, and even commodities like gold. ETFs provide equity ownership of the fund's assets. However, unlike mutual funds, ETFs can be listed and traded on the open market.

ETFs are benchmarked to some underlying product, often a stock index or business sector. If the benchmark industry or index as a whole goes up, even if some of the companies within it go down, the ETF will gain value. This spreads investor risk out over more than just a handful of holdings. The first ETF listed in the U.S. was the SPDR, which was listed for trading in 1993 and tracks performance of the S&P 500 Index.

During the 2000s, the ETN was created. ETNs differ greatly from ETFs. Notably, like bonds, ETNs are unsecured. Banks purchase assets (stocks, bonds, gold, etc.) and then issue ETNs that, for a set fee, entitle investors to interest or coupon payments derived from income generated by the assets, but the bank still holds all ownership interest in those assets. Since the underlying bank owns all the assets, there is a credit risk to investors. If the issuing bank goes bankrupt, the holder of an ETF will be entitled to receive the assets that make up their investment fund, but those who hold ETNs will likely get nothing on their unsecured debt.

Issuers also offer leveraged ETFs and ETNs. In the leveraged versions, issuers buy financial derivatives, such as options, to amplify returns, often by 2:1 or 3:1 compared to whatever a standard ETF or ETN would return. Of course, if you multiply returns you also multiply the risk of loss. Furthermore, leverage exaggerates value decay if the securities are held over longer periods of time.

Consider as an example an ETN and 3:1 leveraged ETN tracking the same index starting at $100. If the index goes up 30% the ETN will go up 30% to $130 and the leveraged ETN will go up 90% to $190. If the index then loses -30%, the ETN will drop 30% to $91, but the leveraged ETN in this example would drop 90% (3x 30%) and will be worth just $19.

While this is an extreme example, it illustrates the decay than can occur in leveraged investments during volatile markets. Due to these characteristics, the values of leveraged products can swing dramatically during market turmoil, like when COVID-19 hit the markets earlier this year.

Since the financial crisis of 2008, interest rates have been so low that traditional safe investments offered very limited returns. Because of the long bull market through early 2020, Wall Street offered leveraged ETNs as a way to better those returns, and the long market rise kept the income flowing. Once COVID-19 hit, many investors were decimated. With the rapid decline, many leveraged ETNs lost so much that issuers pulled them off the market, paying investors pennies on the dollar compared to what the value had been just weeks prior.

Due to the complexity of these investments and high risk involved, leveraged products are not suitable for most everyday investors. Options are a common leveraged product. When a client opens a trading account their broker will assign them to an option trading approval level based on their level of investing experience, risk profile and assets.

The more a trader learns about option trading and understands the markets, the higher the level they can get and make more risky option trades. This practice is based on a Financial Industry Regulatory Authority (FINRA) rule mandating such permissions, on both managed and self-directed accounts, because many investors do not fully grasp the risk involved in leveraged trading.

There is no such structure in place for trading leveraged ETNs. The result is that investors who would not normally be permitted to trade leveraged options are able to buy on the open market a security based entirely on leveraged options.

In November 2019, the U.S. Securities and Exchange Commission (SEC) proposed a similar requirement for approval to purchase ETNs. But some Wall Street firms involved in the creation and sale of the products are fighting to keep it from becoming effective.

Stockbrokers and investment advisors owe a certain duty of care to their clients. A stockbroker's only duty is to ensure that the investment they offer or recommend is suitable for the investor. Investment advisors are held to a higher standard as fiduciaries to their clients, and must put their clients' interests above all else, even themselves. It is hard to see any scenario in which a leveraged ETN would be suitable for an average investor, especially over the long term, and especially for an investor who did not have a higher level of option trading approval. For older investors, a leveraged loss can leave them with nothing after a lifetime of saving.

If your broker or investment advisor recommended or placed you into a leveraged ETN that has been adversely affected by the recent market downturn, or any other investment that you feel was too risky for your account considering your age, wealth, or investing experience, you have rights to ensure that they performed their job up to the legal standard set by law. If they placed you into an unsuitable investment, they could be liable for losses incurred as restitution.

Our Consumer Fraud & Commercial Litigation Section has lawyers experienced with securities regulation and breach of fiduciary duty who are available to help persons or entities who have potential claims involving securities. If you need more information or have comments, contact James Eubank, a lawyer in the Section, at 800-898-2034 or by email at James.Eubank@beasleyallen.com.

EMPLOYMENT AND FLSA LITIGATION

Employment-Related Settlements

There has been a significant increase in litigation involving companies in Corporate America and their workforce. I will give a brief summary below of several settlements of note in employment-related litigation.

Signet's $240 Million Investor Settlement Gets Final Approval

After a fairness hearing, a New York federal judge granted final approval for the $240 million investor settlement involving claims that Signet Jewelers Ltd., the parent company of Jared and Kay Jewelers, made false assurances about maintaining a harassment-free workplace.

Prior to giving the settlement her approval, U.S. District Judge Colleen McMahon told the lawyers that it would “probably come as no surprise” to the parties that she was signing off on the settlement. There had been no objectors and the settlement is among the 75 largest securities class action settlements in history.

The 2016 litigation had alleged that Signet's code of conduct and code of ethics falsely stated it was “committed to a workplace free from sexual harassment” and made employment decisions based on merit alone. The investors claimed that those statements were part of the company's efforts to minimize fallout from a 2008 class action arbitration case filed by a group of female employees alleging discrimination by Signet's subsidiary Sterling Jewelers Inc. based on their gender.

Signet has yet to resolve the long-running discrimination action, but details about the experiences of about 250 employees who worked at Sterling became public in February 2017. The Washington Post published a story including these employees' claim that female workers were “routinely groped, demeaned and urged to sexually cater to their bosses to stay employed” in the late 1990s and 2000s.

While investors had sued Signet a year earlier for allegedly downplaying risks with its in-house credit program, they amended their complaint after The Washington Post article was published to include allegations that Signet lied about harassment protections in its codes of conduct and ethics, making it liable for stock drops seemingly spurred by the article. The company's stock fell 13% by close of market the day after the article was published.

While the additional securities claim was taken up in New York federal court, the Second Circuit ruled in March 2019 that Cigna Corp.'s assurances in regulatory filings and a code of ethics about its compliance with laws and regulations are “a textbook example of ‘puffery'” and inactionable under securities law. Investors had claimed these statements about Cigna's compliance were false, given the Centers for Medicare and Medicaid Services' findings that the health insurer actually didn't comply with a number of its requirements.

Signet tried to convince Judge McMahon the following May that the Cigna ruling doomed the investors' allegations against the company. But the judge responded in June 2019 that Signet ignored the Second Circuit's emphasis on context. Cigna's statements were “exceptionally vague and aspirational,” according to her order denying the company's dismissal motion, while Signet's assurances were in direct response to the existing allegations of a toxic workplace. The judge's order stated:

As alleged, a reasonable investor – who otherwise would be concerned about how grave allegations concerning rampant sexual misconduct might affect her investment in Signet – took defendants at their word. As alleged, their word was not truthful.

After Judge McMahon granted the investors class certification in July 2019, Signet sought leave to appeal to the Second Circuit in hopes of getting a Cigna-esque ruling that would dispose of the suit. The federal appellate court granted Signet's petition, but the company withdrew its appeal in January, later revealing it had been engaged in mediation sessions since November. The sessions were mediated by former U.S. District Judge Layn R. Phillips, who recommended the $240 million cash settlement ultimately accepted by the parties and the court. Judge McMahon said at the hearing that Judge Phillips' involvement was “one of the reasons I'm confident the settlement is worth approving.”

Judge McMahon also granted approval for the investors' counsel from Bernstein Litowitz Berger & Grossmann LLP and Gadow Tyler PLLC to receive 25% of the settlement fund in fees and more than $3.1 million in expenses. The remainder of the settlement fund will be distributed to investors who acquired Signet stock between Aug. 29, 2013, and May 25, 2017.

The investors are represented by John Rizio-Hamilton and Rebecca Boon of Bernstein Litowitz Berger & Grossmann LLP and Jason Kirschberg of Gadow Tyler PLLC. Signet is represented by Joseph Allerhand, Stacy Nettleton, Robert Ruff and Joshua Glasser of Weil Gotshal & Manges LLP. The case is In re: Signet Jewelers Limited Securities Litigation, (case number 1:16-cv-06728), in the U.S. District Court for the Southern District of New York.

Source: Law360.com

JB Hunt Transport Drivers Reach $6.5 Million Misclassification Settlement

A proposed class of J.B. Hunt truck drivers has asked a California federal judge for preliminary approval of a $6.5 million settlement to end a lawsuit accusing the trucking company of misclassifying drivers as independent contractors instead of employees. The settlement would certify a class of 312 drivers who said they were required to be responsible for expenses such as gasoline and truck repairs while an employee would not be responsible. Relating to the proposed settlement the truckers said:

The fact that these putative class members will recover, on average, over $20,000 each, with individual recoveries reaching as high as the $50,000 range, speaks volumes as to the success of this case. Wage and hour class actions rarely trigger such individual payments.

The issue of truckers in California and their classification has long been debated in the state, resulting in a number of strikes and contract disputes. A recently enacted state law (A.B. 5) seeks to remedy the situation, but it's facing a number of legal challenges. The truckers acknowledged the ongoing issue in the proposed settlement.

In the current J.B. Hunt case, two truckers filed suit in California state court in 2018 on behalf of all other truckers who had done business with the company. J.B. Hunt later petitioned to have the suit removed to federal court. The truckers said in the proposed settlement:

Hunt misclassified (drivers) as independent contractor drivers, when in fact they were treated as “employees”, but denied the benefits of employment, and that J.B. Hunt required them to bear the burden of expenses that employee drivers could never be required to pay.

The truckers are represented by Stanley D. Saltzman of Marlin & Saltzman LLP. The case is Duy Nam Ly et al. v. J.B. Hunt Transport Inc. et al., (case number 2:19-cv-01334), in the U.S. District Court for the Central District of California.

Source: Law360.com

Trucking Firm Reaches $28 Million Settlement To End Driver Wage Lawsuit

New Prime Inc., a Missouri-based trucking company, has agreed to pay up to $28 million to settle claims it illegally cheated thousands of drivers out of their wages. This resolves a protracted case that the U.S. Supreme Court upheld last year. The settlement, which was filed in Massachusetts federal court on July 20, would resolve a proposed class of truck drivers' five-year-old suit alleging New Prime broke federal and state labor laws by refusing to pay them for attending training sessions and compensating similarly situated employees unevenly.

If the settlement is approved, New Prime will pay $21 million immediately, with the rest of the money set aside depending on how many claimants in the class of approximately 40,000 drivers come forward. The agreement was reached in May, roughly three months into settlement talks and a year-and-a-half after the U.S. Supreme Court rejected the company's push to move the drivers' claims into arbitration. The justices found that transportation workers engaged in interstate commerce, including those classified as independent contractors, are exempt from the Federal Arbitration Act.

The high court's decision, which came down in January 2019, backed up earlier rulings from both the district court and the First Circuit, though New Prime kept at the ill-fated arbitration effort through the rest of the year. A Boston federal judge shut down New Prime's final attempt, which cited Missouri state laws, in December.

The proposed class is represented by Hillary Schwab, Brant Casavant and Rachel Smit of Fair Work PC and Andrew Schmidt of Andrew Schmidt PLLC. The case is Oliveira v. New Prime Inc., (case number 1:15-cv-10603) in the U.S. District Court for the District of Massachusetts.

Source: Law360.com

Marshalls, HomeGoods Employees Reach $31.5 Million Wage Settlement

The TJX Companies Inc., the parent company of discount retailers Marshalls, HomeGoods and T.J. Maxx, will pay $31.5 million to settle claims it violated federal labor laws by shorting some assistant managers on overtime pay. Lawyers for the HomeGoods and Marshalls workers say it's the second-largest settlement sum for a Fair Labor Standards Act (FLSA) collective action in the First Circuit. A $34 million CVS Caremark Corp. settlement with its workers from 2012 was the largest. The settlement now goes before U.S. District Judge Allison D. Burroughs for approval.

The 1,911 current and former assistant store managers at HomeGoods and Marshalls stores will get an average of $10,207 after portions of the settlement go to administering the settlement, attorney fees, litigation costs and service payments, according to the agreement. The workers' actual payout will depend on how many weeks they worked for one of the stores. T.J. Maxx employees were not part of the suit.

The workers claim the stores categorized them as management to avoid paying them overtime, but that their day-to-day responsibilities were not managerial. Instead, they said their primary duties included working cash registers, stocking shelves, folding clothes, unpacking boxes, building displays and collecting garbage.

In 2015, The TJX Companies Inc. and affiliate MarMaxx Operating Corp. settled a part of the lawsuit's claims for $4.8 million. That settlement covered unpaid overtime for assistant store managers during training.

The Plaintiffs are represented by Sara Wyn Kane, Robert J. Valli, Jr., and James A. Vagnini of Valli Kane & Vagnini LLP; Sam J. Smith and Loren B Donnell of Burr & Smith LLP; Cyrus Mehri of Mehri & Skalet PLLC; Jay D. Ellwanger of Ellwanger Law LLP; Seth R. Lesser and Fran L. Rudich of Klafter Olsen & Lesser LLP; Hillary Schwab of Fair Work PC; Marc S. Hepworth and David A. Roth of Hepworth Gershbaum & Roth PLLC; and Gregg Shaviitz and Alan Quiles of Shavitz Law Group PA.

The case is Roberts v. The TJX Companies Inc., (case number 1:13-cv-13142), in the U.S. District Court for the District of Massachusetts.

Source: Law360.com

PREMISES LIABILITY UPDATE

Dollar General: Popular For Cheap Prices And Violent Crime

Many Americans are familiar with and often frequent Dollar General stores in their local towns and cities. Dollar General has built a brand that is recognizable for everyday products for cheap prices. However, what is not being told is that Dollar General has increasingly become a magnet for violent crime.

CNN Business released an article in June 2020 titled “Dollar General is cheap, popular and spreading across America. It's also a robbery magnet, police say.” In CNN's article, it highlights the story of Dave Dukes, a Dollar General employee in Dayton, Ohio, who killed a man who was trying to rob the store where he worked. The story states that just a year prior to that incident, Dukes had witnessed three other robberies at his store.

Dukes requested that his supervisors provide a security guard at the store after each of the three prior robberies. However, Dollar General did not retain security. After the third robbery, Dukes started bringing a gun to work. In addition, Dollar General began sending Dukes, without any formal security training, to other Dollar General stores to train other employees on what to do in the event of a robbery.

In October 2019, the fourth robbery occurred. A man, Roosevelt Rappley, entered into the Dollar General where Dukes worked with a gun and demanded money from the cashier. Dukes tried to intervene, but the man pointed his gun directly at Dukes. Immediately Dukes pulled his gun out and shot and killed Rappley. While charges were not brought against Dukes, he was fired by Dollar General for violating company policy against possession of a firearm on company premises.

CNN states that Dollar General stores have been open and thriving during the coronavirus pandemic and its stock price has increased at least 23% since the beginning of 2020. While the company's success may be welcomed by stockholders and investment funds, security experts, law enforcement officials, and even store employees believe that Dollar General is putting its employees at risk for violent crime. That also puts store customers and patrons at risk of violent crime as well. A number of former company officials as well as current employees have said, on condition of anonymity, that Dollar General stores have a high number of cash transactions and are “a prime target for armed robberies.”

Dollar General responded to CNN, saying it employs recommended safety and security measures that are designed to maintain a safe work and shopping environment for its workers and customers. However, reality indicates otherwise. At least six Dollar General employees have died during robberies since 2016.[1] According to the CNN article, law enforcement officials have warned Dollar General store managers that their stores are vulnerable, and the officials have repeatedly recommended improved security measures.

Local law enforcement officers in Dayton, Ohio, state that all local Dollar General stores are “robbery magnets.” Other stores like Dollar Tree and Family Dollar are often targets of violent crime as well. However, there are some notable differences between the store chains. At Dollar Tree, for example, all items are exactly $1. The stores tend to be in middle-class suburban areas. Dollar General stores[2], accounting for more than 16,000 stores, mostly in rural areas, sell items in the $1 to $10 range, meaning there is more cash in registers. According to retail security experts, this makes stores more susceptible to robberies.

Dollar General would not publicly release information on the amount of money it spends annually on crime prevention or any information on specific measures in its stores to protect workers and customers. Dollar General said that would compromise the integrity of its security measures.

Dollar General has grown in annual profits more than five-fold and its stock has surged more than 800% since 2010. Dollar General plans to open 1,000 new store locations in 2020 despite the pandemic. Investors like Dollar General because it owns less real estate and has less labor and smaller product sizes than its largest competitors. Dollar General former executives have stated that efforts to keep costs down comes at the expense of employees, because Dollar General does not want to take bigger steps in improving security for the employees and customers.

Visibility inside the stores is poor because of the store design and set-up of aisles stuffed with products. The store is often crowded as well, and store windows are usually covered in large advertisements and signs. Staffing is intentionally kept at a minimum and stores rarely have any security guard presence. Former executives have stated that security guards are viewed as too costly for the company's bottom line. Adding security to its stores would jeopardize Dollar General's low-cost model and would diminish its profits.

Dollar General has invested in interactive security monitoring services at thousands of stores that are in higher-crime areas or that have experienced frequent incidents. The cameras are monitored by offsite security agents, who can communicate with employees in the store. If the agents see suspicious activity or a robbery at the store, they can alert the local police. However, these systems are not as effective as deterring crime as a human security guard. Former executives have stated that Dollar General would only offer short-term security measures as a reactive measure.

Dollar General also provides very little training on how to handle store robberies. Employees are shown a simulation video of a robbery and are not provided any hands-on drills. Furthermore, employees are not provided with annual training regarding handling robberies or other types of crimes. Local officials in cities like Dayton, Ohio, have urged Dollar General management to take more steps to prevent foreseeable violent crime. However, those warnings have largely gone ignored. This puts consumers and employees' livelihoods at risk for the sake of profit.

The general public needs to understand that all retail stores have an obligation to keep both their employees and customers safe from known hazards within and around the store and from foreseeable violent crime that comes from off the premises onto store property.

If you or someone you know has suffered from a violent crime while on the premises of a retail store, you may have a viable claim to pursue against a company, such as Dollar General, that puts profits before people. You can contact one of our lawyers who handles negligent security cases. Those are Donovan Potter, Sr.; Parker Miller and Rob Register at 800-898-2034 or by email at Donovan.Potter@beasleyallen.com, Parker.Miller@beasleyallen.com or Rob.Register@beasleyallen.com.

[1] In Dayton, Ohio, seven Dollar General stores accounted for 29% of 80 commercial robberies in 2019.
[2] Todd Vasos, Dollar General CEO, has described his core customers as “struggling Americans.”

Source: CNN

WORKPLACE HAZARDS

Workplace Hazards: Skylights

Falls in workplace settings pose a serious health problem throughout the United States. The U.S. Department of Labor lists falls as one of the leading causes of on-the-job deaths, accounting for approximately 8% of all occupational fatalities. A large percentage of those fatalities resulted from workers falling through skylights or roof openings. Despite Occupational Safety and Health Administration (OSHA) regulations directly on point, these injuries and deaths caused by falls through skylights continue to be a major problem.

The OSHA General Industry Standard requires that “every skylight, floor opening and hole shall be guarded by a standard skylight screen or a fixed railing on all exposed sides,” 29 CFR 1910.23(a)(4).

The standard goes on to specify exactly how the screen guards should be constructed. The skylight screens “shall be of such construction and mounting that they are capable of withstanding a load of at least 200 pounds applied perpendicularly as any one area on the screen,” 29CFR 1910.23(e)(8). The construction and mounting shall be such that they will not deflect downward so as to break the skylight glass below them.

The standard goes on to describe the guards to be made of a grillwork with holes no more than 4 inches long, or slat work with openings not more than 2 inches wide.

Additionally, OSHA construction standards further address the need for guards and protective measures mitigating the hazards presented by skylight openings. That standard, which is recorded in 29 CFR 1926.500(b)(4), requires a guard, covering or fixed railing on all exposed sides when there is a danger of falling through a skylight opening.

The National Institute for Occupational Safety and Health (NIOSH) has also promulgated standards and recommends certain best practices in an attempt to slow workplace injuries and deaths associated with falls through skylights. First, NIOSH urges all employers and construction companies to adhere to the relevant OSHA standards previously discussed. Additionally, NIOSH suggests all employers follow accepted OSHA safe work practices from heights including providing fall protection to employees working from heights.

Where conventional guards and rails are not practical, NIOSH recommends harnesses with lanyards or safety nets. This is especially important in the construction setting before conventional guards or railing are installed. Safety nets are particularly useful in that they provide passive protection for workers.

Safety nets and other passive protection do not depend on workers to assess the hazard and actively take steps to mitigate the hazard. Instead, netting can be installed while the roof is under construction and left in place until all hazards are mitigated through permanent measures such as guarding.

Finally, NIOSH recognizes the importance of proper training. All employees that work from roofs or heights must be properly trained to identify skylights and fall hazards.

There is also a responsibility on manufacturers of skylights to warn of the hidden dangers that the product poses. Manufacturers of skylights must include warnings regarding the dangers of stepping onto skylights by placing conspicuous decals or warnings of the dangers.

As with so many on-the-job hazards, the solution is not a single “fix all.” Employers with skylights on their buildings and manufacturers of skylights all have a responsibility to mitigate the hazards skylights pose to ensure a safe work environment. If an employee falls through a sky light, it is almost certain OSHA standards and best practices were not followed.

If you need more information, contact Evan Allen, a lawyer in our firm's Personal Injury & Products Liability Section, at 800-898-2034 or by email at Evan.Allen@beasleyallen.com. Evan handles work-related injury and death for the firm.

Source: CDC.gov

TOXIC TORT LITIGATION CONCERNS

Personal Jurisdiction In Interstate Pollution Cases

Personal jurisdiction has been a hot-button issue in courts throughout the country for the past several years. Many personal jurisdiction decisions involve personal injury or product liability actions where the development, marketing and sale of a product are key in the jurisdictional analysis. In such cases, a Defendant's intended market and, consequently, where it could anticipate being sued, is more readily apparent than in other cases with markedly different facts.

Interstate pollution cases present a host of unique legal issues that Plaintiffs typically do not encounter in other run-of-the mill cases. If a Plaintiff filed suit in the state in which the injury was sustained rather than where the pollution was discharged, the first hurdle such a Plaintiff will likely encounter is a motion to dismiss for lack of personal jurisdiction. Our firm successfully defeated such a challenge late last year before the Supreme Court of Alabama.

The Supreme Court held that state courts in Alabama had jurisdiction over two lawsuits filed by the Water Works and Sewer Boards for the City of Gadsden and Town of Centre against numerous out-of-state companies that sell or use the chemicals per- and polyfluoroalkyl substances (PFAS) in their operations. These cases were originally filed in the Circuit Courts of Etowah County and Cherokee County against PFAS manufacturers and the carpet industry that uses them to impart stain-, water-, and soil-resistance to their flooring products in Georgia.

The lawsuits allege that the Defendants sold PFAS or discharged wastewater contaminated with PFAS despite knowing it would survive treatment by the local water treatment facility in Dalton, Georgia, and ultimately contaminated the Conasauga River, which is an upstream tributary of the Coosa River, which provides water to each municipality. The Defendants' activities allegedly caused the high levels of numerous PFAS compounds, which have been linked to various health issues, found at Gadsden and Centre's water intakes.

The Defendants sought dismissal on various grounds, but primarily argued that Alabama courts lacked personal jurisdiction to hear the cases, claiming that the “suit-related activity” (i.e. the sale or discharge of PFAS) occurred in Georgia rather than in Alabama. The Etowah County and Cherokee County Circuit Courts disagreed, holding that personal jurisdiction was proper in Alabama because the Defendants “purposefully directed” water contaminated with PFAS at downstream users, including the water treatment facilities in Gadsden and Centre.

The Alabama Supreme Court acknowledged that it had not been presented with a case with similar facts. Being a case of first impression, the Court reviewed decisions issued by state and federal courts in Washington, Mississippi and Ohio for guidance. Each of those courts held that personal jurisdiction was proper over an out-of-state Defendant who committed an act that ultimately harmed a downstream user located in the forum state. The Court agreed that the analyses used in those analogous cases was more applicable to the facts alleged by Gadsden and Centre than the cases cited by the Defendants. It favorably cited reasoning used by the Ohio Court of Appeals in Triad Hunter, LLC v. Eagle Natrium, LLC, 132 N.E.3d 1272 (2019):

Continuing to release a substance while knowing it travels to a jurisdiction is considered purposeful direction of efforts toward that jurisdiction…The aim can involve a forum resident or the forum state in general.

Applying this reasoning, the Court held that the remaining Defendants “purposefully directed their actions at Alabama” and injured in-state residents. It further stated that “the physical entry of the pollution into Alabama's water source creates the relationship among the remaining Defendants, Alabama, and the actions”, thereby making jurisdiction proper. The Supreme Court concluded that it would not be burdensome for the Defendants to litigate a case that was less than 100 miles away from Dalton.

The Court correctly held that an Alabama Plaintiff could hold out-of-state polluters accountable in Alabama courts and before a jury of those citizens impacted by the pollution. This is a fair and just result that has similarly been reached in other cases across the country. Beasley Allen looks forward to ensuring the citizens of Gadsden and Centre are not stuck with the bill to clean up their drinking water.

Beasley Allen lawyers are investigating PFAS contamination and personal injury cases. If you have any questions about this subject, contact Rhon Jones, Rick Stratton or Ryan Kral, lawyers in our firm's Toxic Torts Section, at 800-898-2034 or by email at Rhon.Jones@beasleyallen.com, Rick.Stratton@beasleyallen.com or Ryan.Kral@beasleyallen.com.

An Update On The Roundup Litigation

Monsanto Loses Cancer Liability Fight In First Roundup Appeal

A California appellate court has affirmed a jury's finding that Monsanto Co. is liable for a former school groundskeeper's cancer. This was the first case to go to trial over Roundup's alleged links to cancer. The court reduced the total award from $78 million to $20.6 million. A unanimous three-judge Court of Appeal panel rejected arguments by the Bayer AG subsidiary that Plaintiff DeWayne “Lee” Johnson failed to prove liability and causation, and that Johnson's failure-to-warn claims are preempted by federal law. “None of these arguments are persuasive,” the opinion said.

However, the panel found that Plaintiff Johnson's future noneconomic damages award is not supported by his true-life expectancy. The total compensatory damages award was reduced from $39.3 million to $10.25 million, along with corresponding punitive damages. Plaintiff Johnson's lawyer, R. Brent Wisner of Baum Hedlund Aristei & Goldman PC, called the decision a victory for Mr. Johnson and his family. However, he said they are also considering challenging at the state high court a “deep flaw” in state tort law that doesn't allow a Plaintiff to recover for a shortened life expectancy.

This is the first appellate court to consider whether Monsanto's glyphosate-based Roundup products likely contribute to cancer. The Johnson case was the first lawsuit over Roundup's purported links to cancer to go to trial. Since then more than 100,000 individuals across the country have filed lawsuits against the company, which Bayer acquired in June 2018 for $63 billion.

Months after the purchase deal closed, in August 2018, a state jury in San Francisco found Monsanto liable for contributing to Johnson's non-Hodgkin's lymphoma and awarded him $289 million, including $250 million in punitive damages. A state judge later reduced the verdict to $78 million. Subsequently, Monsanto appealed.

At the Court of Appeal, Monsanto challenged the trial court's findings on a number of legal fronts and argued that the entire verdict had to go because Plaintiff Johnson's claims are preempted by the Federal Insecticide, Fungicide and Rodenticide Act. But in its decision, the appellate court mostly rejected Monsanto's arguments and affirmed the jury's liability findings on claims of failure to warn, negligent failure to warn and design defect.

The appellate court panel said it was up to the jury to decide how much weight to place on different scientific opinions regarding glyphosate's cancer risks, and that Monsanto's position that the verdict is unsupported by scientific evidence “simply ignores” testimony regarding four studies dating back to the 1990s that found evidence of glyphosate's toxicity. The opinion stated:

Monsanto cannot avoid liability ‘merely because its failure to warn of a known or reasonably scientifically knowable risk conformed to an industry wide practice of failing to provide warnings that constituted the standard of reasonable care,' nor can it avoid liability simply because its own testing showed a result contrary to that of others in the scientific community.

The panel also rejected Monsanto's arguments that Johnson failed to prove his cancer was caused by Roundup. The opinion said:

In our view, Johnson presented abundant – and certainly substantial – evidence that glyphosate, together with the other ingredients in Roundup products, caused his cancer.

The court added that the failure-to-warn claims aren't preempted by federal law, and even if they were, the design defect claim is not preempted and provides its own basis to support the jury's liability finding.

The panel said Monsanto's preemption arguments are foreclosed by the 2005 U.S. Supreme Court ruling Bates v. Dow Agrosciences, which held that such claims aren't preempted if the state labeling statutes and federal mis-branding rules don't conflict. The opinion said:

California's requirement that products contain adequate warnings is wholly consistent with FIFRA's requirements that labels include necessary warnings and cautionary statements.

The panel added that the fact the U.S. Environmental Protection Agency (EPA) has not required a cancer warning on a product does not mean that the agency would “disallow” a warning. In light of its decision, the panel also concluded that Monsanto is to pay $520,000 to cover Plaintiff Johnson's trial court costs.

As we reported last month, Bayer announced in June that it had reached a $10.9 billion settlement that would end about 75% of the current Roundup litigation, including 95% of the Roundup cases that are currently set for trial. That proposed settlement is subject to court approval and does not include the three cases that have already been tried.

We will write on the settlement below. Johnson is represented by R. Brent Wisner and Pedram Esfandiary of Baum Hedlund Aristei & Goldman PC; Michael J. Miller, Curtis G. Hoke and Jeffrey A. Travers of the Miller Firm LLC; and Mark E. Burton of Audet Partners LLP. The case is Dewayne Johnson v. Monsanto Co., (case numbers A155940) and (A156706) in the Court of Appeal of the State of California, First Appellate District.

Source: Law360.com

Settlement Proposal To Be Revived For Future Claims In Monsanto MDL

We wrote last month about the proposed $10.9 billion settlement involving Roundup cases. Since then there have been some most significant developments. The group of Plaintiffs suing Monsanto Co. over its Roundup weedkiller, claiming it causes cancer, withdrew its bid for approval of the settlement on July 8. This was done just days after a California federal judge let the parties know that he was “skeptical” that a portion of the settlement was fair.

As a part of the settlement, the named Plaintiffs in the case, led by Robert Ramirez, had reached a $1.25 billion settlement with Monsanto, which sought to resolve current and future claims from proposed class members who had been diagnosed with cancer linked to the weedkiller or who hadn't been diagnosed yet.

Lawyers at Lieff Cabraser Heimann & Bernstein LLP, who represent Ramirez, told Law360 that they withdrew the motion in response to U.S. District Judge Vince Chhabria's expressing skepticism on July 6 about whether it is appropriate to handle claims in this manner. The lawyers said they plan to revise the settlement agreement in an attempt to address Judge Chhabria's concerns. Elizabeth Cabraser of Lieff Cabraser told Law360:

We remain strongly committed to a fair and just resolution that serves the needs and interests of persons exposed to Roundup who are not otherwise included in the negotiations for the comprehensive resolution of the thousands of individual cases, in support of a settlement for all.

Bayer, which bought Monsanto in 2018, confirmed on July 8 that Monsanto agreed with the move to withdraw the motion. Bayer said it is “strongly committed” to finding a resolution to both current litigation and potential future litigation. Hopefully, the company will do that, but not in the manner currently proposed. The failed proposal was not good for victims who have valid Roundup claims.

The Ramirez settlement drew strong objections from other Plaintiffs in the case over the proposition that future claims would be bound by the terms of settlement. The Plaintiffs asked Judge Chhabria to delay a hearing on the settlement to give them more time to prepare briefs. While the Judge denied the motion to reschedule the hearing, he agreed there were issues with the proposal.

Judge Chhabria questioned the constitutionality of the settlement since it would have a panel of scientists decide whether the weedkiller causes cancer, rather than judges and juries. Hunter J. Shkolnik of Napoli Shkolnik PLLC, representing the Plaintiffs who are opposed to the Ramirez settlement, told Law360:

By withdrawing the motion seeking class certification, proposed class counsel recognized the legal infirmities the proposed class suffered. Now maybe Monsanto will properly compensate the victims of Roundup.

There is virtually universal opposition to the proposed settlement from lawyers nationwide who represent Plaintiffs in Mass Torts Litigation. The proposal that Bayer and Monsanto are pushing, and clearly like, is not good for victims of corporate wrongdoing. As Judge Chhabria has indicated, the plan is more than likely unconstitutional. Beasley Allen clients were not a part of the overall settlement. Our lawyers are totally opposed to the Ramirez aspect of the settlement. The future claims concept of the settlement is not only unconstitutional, it is grossly unfair to victims.

Ramirez is represented by Robert L. Lieff, Elizabeth J. Cabraser, Kevin R. Budner, Steven E. Fineman, Wendy R. Fleishman, Rhea Ghosh and Andrew R. Kaufman of Lieff Cabraser Heimann & Bernstein LLP; James R. Dugan II, TerriAnne Benedetto and David S. Scalia of The Dugan Law Firm LLC; William M. Audet and Ling Y. Kuang of Audet & Partners LLP; and Samuel Issacharoff. The opposing Plaintiffs are represented by Paul J. Napoli, Hunter J. Shkolnik and Christopher L. Schnieders of Napoli Shkolnik PLLC and Thomas C. Goldstein, Eric F. Citron and Daniel Woofter of Goldstein & Russell PC.

On July 7, Bayer shares had fallen more than 6% after Judge Chhabria said the court was inclined to oppose the part of the proposed settlement that deals with future claims. The shares slipped 0.7% on Wednesday, July 8.

The multidistrict litigation (MDL) is In re: Roundup Products Liability Litigation, (case number 3:16-md-02741), and the case is Ramirez et al. v. Monsanto Co., (case number 3:19-cv-02224), both in the U.S. District Court for the Northern District of California.

Source: Law360.com

Beasley Allen Roundup Litigation Team

Beasley Allen lawyers are currently representing thousands of clients who have been exposed to Roundup and developed non-Hodgkin's lymphoma. Our Roundup Litigation Team is willing to answer any questions you might have. For more information, contact one of the members of the Roundup Litigation Team: John Tomlinson, Michael Dunphy, Danielle Ingram or Rhon Jones, all lawyers in our Toxic Torts Section, at 800-898-2034 or by email at John.Tomlinson@beasleyallen.com, Michael.Dunphy@beasleyallen.com, Danielle.Ingram@beasleyallen.com or Rhon.Jones@beasleyallen.com. As reported last month, I was asked to join the litigation team. I did so and I will be involved in the trials involving Beasley Allen clients. My contact information is Jere.Beasley@beasleyallen.com.

UPDATE ON NURSING HOME LITIGATION

Coronavirus Poses A Crisis In U.S. Nursing Homes

When COVID-19 began to surge, the biggest concern for state and national officials was whether hospitals would be overwhelmed. University of California, Davis, Professor Debra Bakerjian says:

But nobody was paying attention to what was happening in nursing homes, who were a much higher risk population. It was going to be an even bigger problem because they don't have the resources a hospital has – in terms of nursing resources as well as having the supply of appropriate personal protective equipment.

Residents in care homes are nearly impossible to isolate to begin with. Most facilities have only one or two private rooms. People share hallways, bathrooms, dining areas. A limited number of staff are responsible for multiple individuals, sometimes across buildings or homes throughout the community. Outbreaks in nursing homes in general are not uncommon.

More than 1,800 care homes nationwide reported to the Centers for Medicare and Medicaid Services (CMS) they would run out of N95 masks in a week. More than 500 said they will soon run out of gloves. Dozens of facilities currently have no gowns or hand sanitizer.

Homes have also had to meet changing requirements with reporting to meet local, state and, now, federal standards.

New York's Democratic Governor Andrew Cuomo has become the face of this policy and continues to defend it though other states, including New Jersey, Michigan and California, enacted similar rules before reversing them.

But New York in particular has been under national scrutiny as, for months, it was the national epicenter. In its care homes, the state has seen more than 10,500 confirmed cases of the virus and has lost at least 4,092 residents to COVID-19, according to CMS data, from a population of nearly 90,000. Local reports say the death toll is thousands above that figure.

Lawsuits have been filed across the country as family members grieve and reports of shocking conditions continue to emerge.

In New Jersey, the state with the highest average case count in care homes, 15 families are suing a facility that made national headlines when nearly 20 bodies were found stacked in a morgue built to handle just a few. Several families in Kentucky are suing a home for not properly educating staff about wearing protective equipment in COVID-19 patient rooms amid more than a dozen deaths.

It isn't just patients and families taking issue with how care homes have handled the pandemic. There are reports of staff being told to work despite having COVID-19 symptoms, not having access to testing, not receiving proper training regarding COVID-19 or the need for personal protective equipment. Christopher Laxton, executive director of the Society for Post-Acute and Long-Term Care Medicine, says:

One thing COVID has shown us is that we are failing as a society here in the US to take care of the people who took care of us when we were kids. We need to completely re-engineer and rethink how we do elder care in this country.

Democrats in the U.S. House of Representatives on June 16 sent letters to five for-profit nursing home companies dealing with coronavirus outbreaks, asking for documents related to these outbreaks, including data on testing, staffing levels, and legal violations, as well as information on how federal funding has been used.

A group of House Republicans on the same virus subcommittee have requested information from five Democratic state governors Tom Wolf of Pennsylvania, New Jersey's Phil Murphy, Michigan's Gretchen Whitmer, California's Gavin Newsom and Governor Cuomo over their policies to have homes take in COVID-19 patients. Amid these inquiries, COVID cases have been rising across much of the U.S. Problems with testing and equipment are occurring at health care facilities nationwide.

From education to understaffing to facility regulations, the industry has long been under-resourced and faces complicated systemic issues. While some hope lawsuits will result in real changes, others worry that after the pandemic, nursing homes will be forgotten once more.

Source: BBC

Georgia's Senior Care Reform Bill Becomes Law

On June 30, 2020, Georgia Governor Brian P. Kemp signed House Bill (HB) 987, sponsored by Rep. Sharon Cooper (R-Marietta) and Sen. Brian Strickland (R-McDonough) into law. Through collaboration with advocacy groups, industry representatives, and legislators, HB 987 provides greater protections for assisted living facility and personal care home residents, strengthens staffing requirements, and increases maximum fines for violations.

This new law does not stop there. It also establishes protocols related to COVID-19 that all skilled nursing and other long-term care facilities must comply with, including protocols for notifying residents and representatives of confirmed infections or onset of symptoms, personal protective equipment (PPE) supplies, infection control policies and procedures, the inclusion of infectious disease protocols within the disaster preparedness plan, and mandated testing of all direct care staff and residents. Facilities have until Sept. 28, 2020, to implement the protocols; however, at this time, there is no grace period for the completion of the remaining COVID-19 requirements. The bill also authorizes the Department of Community Health to establish additional testing rules and regulations after Sept. 28, 2020.

Of HB 987, Governor Kemp said he applauded Rep. Cooper and Sen. Strickland for their leadership in getting the bill enacted. Governor Kemp had this to say:

One of the key battlegrounds in the fight against COVID-19 continues to be in our nursing homes, assisted living facilities, and personal care homes, and I am proud to say that HB 987 strengthens our collective efforts to protect elderly Georgians in these unprecedented times.

Rep. Cooper says she was proud to sponsor HB987, “to protect the most vulnerable, institute common-sense reforms, and ensure those working in these facilities receive the training that they need to care for elderly Georgians.”

Sen. Strickland sees the bill as dramatically strengthening protections for Georgia's elderly and medically fragile. He commented:

Moving forward, we will be better equipped to ensure the health and well-being of these residents across our state.

Source: AJC/ Georgia.gov

The Beasley Allen Nursing Home Litigation Team

Alyssa Baskam, a lawyer in our Atlanta office, heads Beasley Allen's Nursing Home Litigation Team. Currently, Susan Anderson and Andrea Linnear also serve on the team. In order to properly handle nursing home litigation, lawyers and support staff must have specific experience and expertise in this type case.

Alyssa and other members of her team are dedicated to representing the elderly and infirm who can't fight back when they suffer at the hands of inadequate care and deficient inpatient facilities. If you have a case involving abuse or neglect at a nursing home or other inpatient facility, we would like to talk with you about working together on the case. You can contact Alyssa, Susan or Andrea at 800-898-2034 or by email at Ayssa.Baskam@beasleyallen.com, Susan.Anderson@beasleyallen.com or Andrea.Linnear@beasleyallen.com.

An Update On Class Action Litigation

COVID-19 Accelerating Growth Of Class Action Cases

The COVID-19 pandemic and associated shutdowns and economic fallout as of mid-July has led to more than 500 class action lawsuits. Many are insurance-related and education refund suits. In the ninth annual Carlton Fields Class Action Survey, researchers found that the number of class action lawsuits had been continuing to trend upward even before the pandemic, but that COVID-19 brought on a sharp increase in new filings.

The report was compiled based on interviews with chief legal officers, general counsel, and direct reports to general counsel at 400 large companies across industries. Julianna Thomas McCabe, a shareholder at Carlton Fields who worked on the report, stated:

Obviously, the fact that this class action litigation has continued to rise for five years in a row now is notable, and the fact that companies were expecting that trend to continue into next year even before the COVID-19 pandemic hit [is notable].

Overall, the report identified 560 COVID-19-related class actions filed by the end of May 2020, with more than 100 in California alone. About 25% are against insurance companies regarding business interruption coverage, and another 25% concern education refunds, according to the survey. Other common types of class actions include refund suits against gyms and entertainment venues and suits against airlines and government entities, the report found.

Ms. McCabe added that she expects the number of employment and labor class actions sparked by the pandemic might also increase in the coming months. She said:

Historically, in our survey, the top category of class actions is usually labor and employment cases, and we haven't seen the breadth of those cases that I think are going to come out of this. There have been layoffs in many, many industries. There are changes in work practices in virtually every industry. And I think companies are concerned about that.

Other research has shown that there has been an increase in workplace lawsuits, especially in California and Texas, but so far that increase does not seem to be driven by class actions. However, new COVID-19-related lawsuits continue to be filed. Litigation connected to the pandemic is becoming more and more common. Beyond COVID-19 suits, the Carlton Fields researchers found that 2020 was already on track to see an increase in class action activity. This will continue a trend that has been going on for a long time.

The report projects that companies will spend $2.73 billion on class action litigation in 2020, up from $1.92 billion in 2006. In addition, while the number of companies facing a class action has remained relatively flat since 2011, fluctuating between about 50% and 60%, the number of class actions companies are handling in any given year has more than tripled in the same period, from an average of 4.4 to an average of 15.1. This is partly due to a sharp spike in the number of new matters filed in the past three years, increasing from an average of 1.7 new matters per company in 2017 to 3.1 in 2018, 3.3 in 2019 and a projected 5.4 in 2020.

Source: Law360.com

Leslie Pescia Selected For Robinhood Litigation Executive Committee

Beasley Allen lawyer Leslie Pescia is one of nine lawyers nationwide appointed by U.S. District Judge James Donato to the Executive Committee and Liaison Counsel for the Robinhood Outage Litigation. Judge Donato approved a new leadership configuration put forth by lead firms Kaplan Fox & Kilsheimer LLP and Cotchett Pitre & McCarthy LLP that put one man and one woman from each of the firms, each supported by teams of men and women, to lead the proposed class action that had been consolidated one day earlier. The new structure establishes liaison counsel and an executive committee composed of lawyers with “a diverse set of professional and personal experiences.”

Judge Donato previously approved a motion to consolidate 13 cases filed against Robinhood involving consumer protection claims arising out of a two-day outage for Robinhood's securities trading platform, which began March 2, 2020. The class action was consolidated in the United States District Court for the Northern District of California with Judge Donato presiding. Although he approved consolidation, Judge Donato did not approve the first leadership structure proposed because of concerns with the lack of diversity. The lone female in the original leadership structure was our own Leslie Pescia. The judge also said that while the lawyers enjoyed leadership positions in other cases, he wanted room made for “newer and less experienced” lawyers. Judge Donato, in that regard, said:

Counsel with significant prior appointments are by no means disqualified from consideration here, but leadership roles should be made available to newer and less experienced lawyers, and the attorneys running this litigation should reflect the diversity of the proposed national class.

It is refreshing to see our Judiciary taking an active role in developing the needed diversity in the multidistrict litigation (MDL). It is a struggle for younger lawyers to break into the MDL practice because these important cases require efficiency that in turn requires experience. Pairing younger lawyers with more experienced lawyers in an informal mentoring process in these complex cases and MDLs is a great response to the very issue identified by Judge Donato. Hopefully we will see more courts exercising similar discretionary measures and moving the MDL litigation in a more inclusive direction. Leslie had this to say:

It's an honor to be selected by Judge Donato to serve the court in a leadership role on the Executive Committee. This is very important litigation that exposes how the Defendant's poor planning and failure to deliver the services it promised blocked its customers from participating in the stock market during a significantly critical time. I look forward to working with the rest of the committee and legal team as we seek to hold Robinhood accountable and ensure that investor protection is a top priority.

In addition to Leslie Pescia, Beasley Allen lawyers Dee Miles, head of the firm's Consumer Fraud Section, and James Eubank partnered with Jennie Anderson of Andrus Anderson LLP in April to file the suit on behalf of the investors. The team filed the class action lawsuit in April.

If you need more information on this case, contact Leslie Pescia at 800-898-2034 or by email at Leslie.Pescia@beasleyallen.com The case is In re: Robinhood Outage Litigation, (case number 3:20-cv-01626) in the U.S. District Court for the Northern District of California.

Source: Law360.com

Wells Fargo Causes Legal Woes By Placing Mortgages In Forbearance Without Notifying Borrowers

Since February, when the COVID-19 pandemic first started to impact the U.S. economy, millions of Americans have had their financial lives turned upside down. Many American homeowners have had to shift budgets to make sure their mortgages get paid, so they don't lose their homes.

In March, Tammi Wilson was checking on her family's mortgage online at Wells Fargo when she saw a link to information about COVID-19 on the bank's website. After clicking through, she provided contact information so she could receive materials on programs at the bank. Days later, she said, she returned to the payment page to transmit what she and her husband, David, owed on their loan. A message popped up saying she had no active accounts and couldn't make the payment.

Ms. Wilson later learned that Wells Fargo, without her knowledge, had put her into a program that suspended payments on her federally backed loan. Known as forbearance, it is a CARES Act program that aims to help borrowers who are having trouble making their payments because they've been hurt by COVID-19.

Because she hadn't asked for forbearance, Ms. Wilson continued to make all her family's mortgage payments. She has also spent hours on the phone with Wells Fargo to get out of the program. Finally, on July 1, the bank sent her a letter confirming her request to “opt out” of the program. However, Ms. Wilson had never even opted into the program.

Still, Ms. Wilson's credit report, dated July 18, and reviewed by NBC News, shows that the family mortgage is “in forbearance” and that the April and May payments weren't credited to the account, even though the Wilsons submitted them. Events like this can negatively impact a credit rating, but also prevent the borrower from refinancing their mortgage and taking advantage of historically low interest rates.

Under the CARES Act, which provides help on loans backed by the government-sponsored companies Fannie Mae, Freddie Mac, Ginnie Mae and others, borrowers harmed by COVID-19 can ask to suspend their mortgage payments for up to a year. The amounts they owe during the period are either tacked onto the ends of the loans or paid off before. No additional fees, interest or penalties can accrue on the loans while they are in forbearance.

NBC News previously reported on borrowers in Chapter 13 bankruptcy who Wells Fargo had placed, without their permission, in forbearance programs. An erroneous forbearance filing in a Chapter 13 bankruptcy case could be considered a fraud on the court and could subject the borrower to foreclosure.

It remains undetermined whether Wells Fargo might be benefiting from volunteering borrowers for forbearance, and thus far the bank hasn't answered that question. By retaining borrowers who might otherwise refinance their mortgages with other institutions, Wells Fargo continues to have their business. Ms. Wilson, for example, said she would like to move her mortgage to a different bank, but fears she won't be able to, given her credit report.

This isn't the first time Wells Fargo has signed up customers for services they didn't request. The bank has come under pressure in recent years for opening unrequested bank and credit card accounts for clients. The bank also forced others to buy auto insurance they didn't need and, in some cases, weren't even told about.

Sen. Sherrod Brown of Ohio, the ranking Democrat on the Banking Committee, called out the bank. He said in a statement:

Once again it seems that Wells Fargo's sloppy service and shoddy management are hurting consumers. Wells Fargo should immediately address each of these complaints and make changes to ensure that no borrower finds themselves worse off from actions that their servicer takes without their consent or notice.

There have been other customers who have had problems arise similar to those encountered by Ms. Wilson. NBC News has reported on several of them. So far, more than a dozen cases have been filed against Wells Fargo in Alabama, Arizona, Florida, Kansas, Louisiana, Michigan, Missouri, New Jersey, North Carolina, Texas and Virginia.

To protect troubled borrowers from harm to their credit reports during the pandemic, the CARES Act states that if a bank makes an accommodation to a consumer such as suspending mortgage payments it can't report a change in the borrower's status, such as no longer being current on the loan. But when Wells Fargo reports that borrowers are in forbearance, it indicates a shift in their status, raising questions about the practice.

According to the Consumer Financial Protection Bureau, before a bank servicing a loan can grant forbearance, it is supposed to receive an attestation of a COVID-19-related financial hardship from the borrower. However, none of the Wells Fargo borrowers who shared their stories with NBC News had supplied such documents to the bank.

Beasley Allen lawyers in the firm's Consumer Fraud & Commercial Litigation Section are actively investigating and have participated in class actions related to suspect lending practices that harm borrowers. If you need information, or have concerns regarding how your loans are being handled, contact James Eubank or Lauren Miles, lawyers in the Section, at 800-898-2034 or by email at James.Eubank@beasleyallen.com or Lauren.Miles@beasleyallen.com.

Source: NBCnews.com

Ninth Circuit Upholds $142 Million Wells Fargo Fraud Settlement

The Court of Appeals for the Ninth Circuit on July 20 upheld a $142 million settlement between Wells Fargo and a class of customers who were charged fees related to unauthorized accounts opened in their names, ruling the lower court did not err in finding the amount reasonable and that the class met all predominance requirements.

In two opinions on the case, one published and one unpublished, the panel upheld all of the lower court's rulings on the settlement that a group of class members objected to, including the amount of damages, the attorney fees awarded and the certification order. The panel said in the unpublished opinion:

This case involved novel legal issues, especially regarding the credit damages, and class counsel's efforts led to a recovery well above the estimated actual damages that Wells Fargo caused the class. Objectors' arguments about the size of other settlements beyond this case, about potential recovery under state-law claims, and about the need for formal discovery do not demonstrate that the district court abused its discretion in approving the settlement.

In the published opinion authored by U.S. Circuit Judge Ronald M. Gould, the panel held that the class met federal predominance requirements under a precedent set by the Ninth Circuit's 2019 en banc decision in In re Hyundai & Kia Fuel Economy Litigation. Ruling on issues of predominance is “not an exact science,” the panel said, adding that it rejected the objector's arguments that the lower court should have performed a choice-of-law analysis. The panel said:

Hyundai thus dictates that, as a general rule, a district court does not commit legal error by not conducting a choice-of-law analysis, despite variations in state law, before determining that common issues predominate for a settlement class. For purposes of a settlement class, differences in state law do not necessarily, or even often, make a class unmanageable.

In 2017, Wells Fargo agreed to a $142 million class action settlement with consumers who alleged they were harmed by the unauthorized account generation, particularly those hit with unwarranted fees or who saw their credit scores harmed. The settlement was connected to claims that the bank's aggressive cross-selling operation and compensation plans led employees to sign existing customers up for more than 2 million unauthorized deposit and credit accounts. About 5,300 Wells Fargo employees were fired during the relevant period from January 2011 through Sept. 8, 2015, according to a Consumer Financial Protection Bureau consent order.

The class of consumers is represented by Derek W. Loeser of Keller Rohrback LLP. Objector Charles Darbyshire is represented by Albert Bacharach Jr. Objector Scott Johnston is represented by Cameron Christensen of Christensen Young & Associates PLLC.

Objector Jill Piazza is represented by John Jacob Pentz III. Objector Chad Michael Farmer is represented by Robert Clore of Bandas Law Firm PC. Audet & Partners LLP is represented by William M. Audet.

The case is Shahriar Jabbari v. Wells Fargo & Co., (appeal numbers 18-16316, 18-16213, 18-16223, 18-16236, 18-16284,18-16285, 18-16315 and 18-16317), in the U.S. Court of Appeals for the Ninth Circuit.

Source: Law360.com

Settlement In Equifax Investors' Stock Suit Is Approved

The $149 million settlement in the suit filed by the proposed class of Equifax investors has now received final approval. The suit was over the company's vast data breach in 2017. U.S. District Judge Thomas W. Thrash's order approving the settlement also awarded attorneys' fee and litigation expenses. The judge said the sum of the fees, which is equal to 20% of the settlement total, is “fair and reasonable and consistent with awards in similar cases.”
Judge Thrash also approved the lawyers' request for $659,925.13 to reimburse their litigation costs. The proposed class' lead Plaintiff Union Asset Management Holding AG will receive $121,375 in connection with its representation of the settlement class, according to the judge's order.

The judge had granted preliminary approval for the settlement in February, just a day after he did the same for a $32.5 million settlement in a derivative shareholder suit arising out of the same data breach incident. According to the settlement terms, the proposed class of investors in the stock-drop suit would recover about $2.08 per affected share before fees, expenses and costs under the deal.

The stock-drop suit, which made securities fraud claims against Equifax and its former CEO Rick Smith, arose from the credit reporting giant's September 2017 announcement that it was hit by hackers who exploited a website application vulnerability to gain access to names, Social Security numbers and other personal data. More than 148 million individuals were affected.

According to the proposed class, investors were led to believe Equifax's cybersecurity safeguards and compliance with data security laws were much better than they actually were. Only after the data breach was revealed did investors begin to realize the truth about Equifax's deficient cybersecurity, precipitating declines in the company's share price, according to the suit.

In July 2019, Equifax agreed to pay up to $700 million to settle a number of federal, state and consumer claims arising from the 2017 breach. That settlement called for Equifax to put at least $380.5 million into a fund to compensate consumers affected by the breach. At least $300 million of that money would have to go directly to affected consumers who file claims, with up to $80.5 million set aside for attorney fees and legal costs.

The investors are represented by James A. Harrod and Abe Alexander of Bernstein Litowitz Berger & Grossmann LLP and H. Lamar Mixson and Amanda Kay Seals of Bondurant Mixson & Elmore LLP.

The case is In re: Equifax Inc Securities Litigation, (case number 1:17-cv-03463), in the U.S. District Court for the Northern District of Georgia.

Source: Law360.com

Judge Rejects Proposed Weinstein Class Action Settlement

Amid mounting objections from women who accuse Harvey Weinstein of sexual assault and harassment, a New York federal judge has rejected a proposed settlement that would resolve nearly all of the civil claims against the producer, The Weinstein Co. (TWC) and several of its directors.

U.S. District Judge Alvin K. Hellerstein denied preliminary approval of the proposed settlement that was submitted in June by class counsel with the support of the New York Attorney General's Office.

Objections to the settlement had come from multiple women who said the agreement was supremely unfair. The settlement, which included an $18.875 million victims' fund to be paid by insurance companies, included no admission of wrongdoing by any of the Defendants. It also provided for a $1.5 million defense fund that would cover costs of defending suits from accusers who did not participate in the settlement. Also under the settlement agreement, the accusers would have forever released the Defendants, who include TWC board members, executives and Bob Weinstein, from claims arising from the alleged sexual misconduct. Pursuant to the proposal, New York Attorney General Letitia James' office would have been barred from prosecuting any related action.

It's not typical for a court to reject a proposed settlement during the preliminary approval phase. Class counsel Elizabeth Fegan argued as much in her reply to one of the multiple objections filed. She made the case that “there's a time and a place for objections to a class action settlement, and this is not it.”

Instead, Ms. Fegan argued, objectors should hold their criticisms until the court is considering final approval. Generally, a court will grant preliminary approval and then issue a notice to class members. Individuals then will file opt-outs and objections. The court would consider all of that after a motion for final approval is made.

Because Judge Hellerstein rejected the proposed settlement so early, and pointedly, it's unlikely this settlement will ever be approved. A class action may not even be proper in this sordid matter.

Source: HollywoodReporter.com

Jeffrey Epstein Associate Ghislaine Maxwell Charged With Multiple Sex Crimes

In another high-profile case, one involving the many victims of Jeffrey Epstein, federal authorities arrested British socialite Ghislaine Maxwell at a secluded home in New Hampshire for her alleged involvement in helping Jeffrey Epstein “recruit groom, and ultimately abuse” girls as young as 14 years old. Maxwell, a longtime friend of Epstein, has now pled not guilty and remains in jail and will not be allowed to make bail. She was charged with six federal crimes and faces up to 35 years if convicted.

How she would fare in her sentencing, if convicted or pleads guilty, remains to be seen. Maxwell is connected to many of the world's most powerful and influential people, some of whom have been implicated in the sex trafficking schemes that Maxwell allegedly facilitated. Various sources have reported that Maxwell possesses proof of sex crimes reaching all the way to Buckingham Palace and the White House that could be used as leverage as authorities decide her fate.

Maxwell's arrest comes one year after Epstein's arrest in July 2019. Authorities who raided his Manhattan townhouse uncovered a safe full of CDs and thousands of graphic photos, including sexually explicit pictures of underage girls. Epstein died in prison in August. His cause of death was ruled a suicide.

Reportedly, since Epstein's arrest, Maxwell moved at least twice, bought a $1 million Bradford, New Hampshire, house with cash under her boyfriend's company's name, changed her phone number and email address, and had packages delivered under an alias.

Audrey Strauss, Acting U.S. Attorney for the Southern District of New York, in a July 2 statement, said:

As alleged, Ghislaine Maxwell facilitated, aided, and participated in acts of sexual abuse of minors. Maxwell enticed minor girls, got them to trust her, and then delivered them into the trap that she and Jeffrey Epstein had set. She pretended to be a woman they could trust. All the while, she was setting them up to be abused sexually by Epstein and, in some cases, Maxwell herself. Today, after many years, Ghislaine Maxwell finally stands charged for her role in these crimes.

A grand jury indictment delivered on June 29 alleges Maxwell groomed three unnamed girls, all younger than 18 years old, in London, New York and Florida, and New Mexico between 1994 and 1997. Maxwell is charged with conspiracy to entice minors to travel to engage in illegal sex acts; enticement of a minor to travel to engage in illegal sex acts; conspiracy to transport minors with intent to engage in criminal sexual activity; and transportation of a minor with intent to engage in criminal sexual activity.

Maxwell is also charged with two counts of perjury in connection with a sworn deposition. The Epstein matter is far from over and it's now being predicted that others may be charged for their involvement in this sad and sordid series of events. There have to be some high-profile individuals who are extremely concerned that Maxwell may elect to cooperate with the prosecutors. In a bizarre statement, made on July 22, President Trump wished Ms. Maxwell “well.” Stay tuned!

Sources: U.S. Department of Justice, BBC, and The New York Times

Wirecard Faces Stock Drop Suit Over Missing $2.1 Billion Scandal

Carol A. Brown, a Wirecard AG investor, has filed a putative stock drop class action against the German online payments company in a Pennsylvania federal court on July 7. It's alleged that an accounting scandal that centers on a missing €1.9 billion ($2.1 billion) and the subsequent arrest of its former CEO caused shares to tank.

The investor said that starting in 2015, the company made false and misleading statements about its financial status that, when revealed to be overly optimistic, caused stock prices to fall from more than $113 per share to less than a dollar per share over the course of a week. Ms. Brown, the investor, said:

Had plaintiff and the other members of the class been aware that the market price of Wirecard securities had been artificially and falsely inflated by defendants' misleading statements and by the material adverse information which defendants did not disclose, they would not have purchased Wirecard securities at the artificially inflated prices that they did, or at all.

The suit includes as Defendants Wirecard, several of its executives including former CEO Markus Braun, who was arrested in Germany in June and its external auditor Ernst & Young. The Defendants are said to have violated the Securities Exchange Act of 1934.

The company's troubles were made public on June 18 when Wirecard said it had delayed publication of its annual financial results for the fourth time after its auditor could not trace €1.9 billion ($2.1 billion) in cash held in trust accounts at two Asian banks. Braun resigned as CEO the next day.

By June 22, the company warned investors that the missing money from its accounts probably does not exist. The company, which had been prominent in Germany's financial technology sector, also said then that it was withdrawing its financial results for 2019 and the first quarter of 2020 and speaking to bank creditors about salvaging credit lines.

Braun was arrested that same day on suspicion of presenting false information and of market manipulation to make the company appear more attractive to investors and clients.

Prosecutors in Munich have said that in their investigation they focused on alleged bank balances in trust accounts held with two Philippine banks amounting to €1.9 billion. The banks have denied handling the funds. The central bank of the Philippines has said the money never entered the country's financial system.

As each new allegation or detail of the alleged scandal emerged, stock prices for the company, which has filed for insolvency in a German court, fell further. The suit seeks to represent “hundreds, if not thousands of” investors who bought publicly traded Wirecard securities between August 2015 and June 24, 2020. Wirecard, which employs 5,800 people and lists more than 300,000 customers according to its website, has denied all the allegations.

The investors are represented by Jacob A. Goldberg and Phillip Kim of The Rosen Law Firm PA. The case is Brown v. Wirecard AG et al., (case number 2:20-cv-03326) in the U.S. District Court for the Eastern District of Pennsylvania.

Source: Law360.com

Facebook's $650 Million Biometric Settlement Nears Initial Approval

A California federal judge indicated on July 23 that he is inclined to preliminarily approve Facebook's revised $650 million biometric privacy settlement with a class of Illinois users. U.S. District Judge James Donato said the settlement is “incrementally better” than the one he rejected last month. He added, however, that he wants to see a “record-breaking claims rate.”

During a hearing held via Zoom, Judge Donato said he had just received the parties' revised motion to preliminarily approve Facebook Inc.'s revised $650 million settlement agreement, so he did not have time to “go over it in detail as much as I would like.” But he did say that it appears that the new agreement addresses most of the concerns he raised about an earlier $550 million settlement, which he rejected outright at a hearing in June.

Class counsel had hailed their initial $550 million settlement as the largest amount to be paid out to resolve a privacy-related lawsuit. Facebook also agreed to provide non-monetary injunctive relief to put an end to the certified class action claiming it had breached the Illinois Biometric Information Privacy Act by using facial-recognition technology without users' consent to fuel its photo tag suggestion feature.

The class is represented by Paul Jeffrey Geller of Robbins Geller Rudman & Dowd LLP and Rafey S. Balabanian of Edelson PC. Facebook is represented by Michael G. Rhodes of Cooley LLP. The case is In re: Facebook Biometric Information Privacy Litigation, (case number 3:15-cv-03747) in the U.S. District Court for the Northern District of California.

Source: Law360.com

PHARMACY BENEFITS MANAGER (PBM) LITIGATION

PBM Industry Group Can't Stop Oklahoma From Enforcing Its Patient's Right to Pharmacy Choice Act Against PBMs Pending Appeal

In the past decade, the Pharmacy Benefit Manager (PBM) industry has gotten stronger and more consolidated leaving the market with just three major players Express Scripts, CVS Health and OptumRx. Many states are attacking unlawful PBM practices through legislation including Oklahoma, where the PBM industry is losing its battle to halt the State's enforcement of its law. In late July, U.S. District Judge Bernard M. Jones ruled in favor of allowing Oklahoma officials to enforce parts of its Patient's Right to Pharmacy Choice Act that serves to regulate PBMs, despite the fact that a PBM industry group is challenging the law in the Tenth Circuit.

PBMs are third-party administrators of prescription-drug programs for end payers, such as private insurers and governmental plans. PBMs are supposed to be using their negotiating power to decrease prescription drug costs and then pass their savings on to patients and plan sponsors. However, PBMs are being scrutinized for increasing drug costs, inflating overhead costs, overcharging administrative fees, retaining rebates, and pocketing savings. Having such a consolidated industry, with just three major PBMs accounting for 85% of the market, hinders competition, increases drug prices, and keeps consumers in the dark about the wrongful conduct of these companies.

Since at least 2018, hundreds of bills each year related to PBM regulation have been introduced in state legislatures across the country attempting to protect patients against some of the worst practices by PBMs. Oklahoma, specifically, passed the Oklahoma's Patient's Right to Pharmacy Choice Act which bars PBMs from offering incentives to encourage purchases from certain pharmacies and prevents them from reimbursing a pharmacy at a lower rate than pharmacies it owns or has close ties with. The Oklahoma law also limits PBMs' ability to kick out pharmacies from its network for a myriad of reasons.

The Pharmaceutical Care Management Association (PCMA) challenged Oklahoma's law by filing a lawsuit against the Oklahoma Insurance Department and the State's Insurance Commissioner in the United States District Court for the Western District of Oklahoma. Attempting to throw the entire law out, the PCMA argued that the law was preempted by the federal Employee Retirement Income Security Act (ERISA) and the mandates of the federal Medicare Part D program.

In early July, U.S. District Judge Bernard M. Jones ruled that only certain parts of the law were likely preempted by Medicare Part D not the entire law. The PCMA then appealed Judge Jones to the Tenth Circuit, challenging the law as a whole. The PBM industry group not only asked the appellate court to toss the law out in its entirety, but it also requested a preliminary injunction against any enforcement of Oklahoma's law while its challenge to the law was pending before the appellate court. The Oklahoma Insurance Department argued against the PCMA, stating that in light of the coronavirus pandemic, it needed all its “regulatory tools at its disposal to protect Oklahomans going forward.”

Judge Jones ruled in favor of the Oklahoma Insurance Department, holding that the PCMA had “not shown a likelihood of success” in its argument against the legality of Oklahoma's Patient's Right to Pharmacy Choice Act, thus allowing Oklahoma officials to enforce parts of the law that serve to regulate PBMs. This is a great victory for Oklahoma and furthers the State's attempts to protect its citizens against harmful practices of PBMs.

Through the years, Beasley Allen lawyers have represented 11 states in various complex health care litigation and is currently investigating PBM claims on behalf of private and governmental plans. Our firm welcomes the opportunity to investigate potential PBM misconduct. If you have any questions about our firm's health care fraud practice, including PBM misconduct, contact Ali Hawthorne, a lawyer in our Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Alison.Hawthorne@beasleyallen.com. Ali handles PBM litigation and other health care-related litigation for the firm.

Source: Law360.com

Pharmacies Accuse Major PBM Of Price Discrimination And Reimbursement Violations

More than 50 independent pharmacies have filed a class action lawsuit in federal court against major PBM OptumRx, alleging that the company engaged in wrongful conduct by paying local pharmacies substantially less than it paid larger chain pharmacies and committed practices that ignored state laws pertaining to pharmacy reimbursement.

Pharmacy Benefit Managers (PBMs) are the middleman between drug makers, pharmacies, and health care benefit plans. OptumRx is one of the three major PBM players in the United States. PBMs have been accused of having unregulated power and abusing the pharmacy reimbursement system. Prescription drugs are increasingly more expensive in the United States than anywhere else in the world and many are blaming PBMs for these rising drug costs. PBMs have been put under a microscope for their conduct that essentially skims money from the pharmacy transactions, causing economic harm to consumers, health plans, and small businesses like independent pharmacies.

In the federal lawsuit filed against OptumRx, the independent pharmacy Plaintiffs allege that the company committed illegal price discrimination by paying smaller pharmacies much less than larger retail chain pharmacies. The lawsuit alleges that the amount OptumRx reimburses the independent pharmacies is arbitrary and often has no reasonable relationship to the wholesale acquisition cost of the drug.

The independent pharmacy Plaintiffs accuse the company of engaging in a pattern of wrongful conduct whereby OptumRx charges consumers and health plans a higher brand drug price but only reimburses the pharmacies the lower generic drug price. The lawsuit further alleges that OptumRx requires network pharmacies to sign confidentiality agreements to hide the truth about OptumRx's illegal business practices and the minimal amounts that the company actually pays smaller independent pharmacies.

This class action lawsuit filed in Federal Court in Pennsylvania is not the first of its kind. Many Plaintiffs, including independent pharmacies, are filing lawsuits against PBMs across the country. Critics of PBMs are tired of their exploitation of the lack of transparency and competition, the rise in drug costs, and the decline in pharmacy reimbursements.

Through the years, Beasley Allen lawyers have represented clients in various complex health care litigation and are currently investigating PBM claims on behalf of private and governmental plans. Our firm welcomes the opportunity to investigate potential PBM misconduct. As stated above, if you have any questions about our firm's health care fraud practice, contact Ali Hawthorne at 800-898-2034 or by email at Alison.Hawthorne@beasleyallen.com.

Source: Cision PR Newswire

THE CONSUMER CORNER

Strollers Recalled Due To Entrapment, Strangulation And Fall Hazards

About 17,000 baby strollers are being recalled by two different companies because, according to the Consumer Product Safety Commission (CPSC), they are in violation of the Federal Stroller and Carriage Safety Standard for posing fall, entrapment and strangulation hazards.

Due to a design defect, the torso of a child riding in the stroller can pass through the opening between the activity tray and the seat bottom and the child's head can become entrapped, which poses entrapment and strangulation hazards. Also, the location of the crotch restraint creates a large opening between the seat bottom and the restraint and it can become detached, which poses a fall hazard to children.

The recall includes the Belecoo 535-S convertible baby stroller from A Better You! sold in black, pink, blue, khaki and gray colors. The strollers convert into carriages in the bassinet position. Belecoo is printed on the stroller's frame and on the shoulder straps. The model number 535-S is printed on a label on the inside of the rear frame of the stroller. The strollers were sold exclusively on Amazon from January 2019 through March 2020 for about $200.

Also recalled were three models of Costway double strollers sold online at www.costway.com and Amazon from May 2016 through December 2019 for about $100. Affected models include:

  • Model BB4476; Infant Double Stroller; in red, gray or black;
  • Model BB4613; Infant Double Stroller; in black; and
  • Model BB4690; Face to Face Double Stroller; in gray.

Consumers should immediately stop using the recalled baby strollers and contact Costway or A Better You! for instructions on how to receive a full refund including taxes and original shipping cost. The companies will give a full refund to consumers who purchased affected strollers. The companies are contacting all purchasers directly.

Source: CPSC

FDA Warns Against Harmful Toxic Hand Sanitizers

Consumers are using hand sanitizers much more often in the midst of the COVID-19 pandemic. The U.S. Food and Drug Administration (FDA) has warned against the use of certain hand sanitizer products and has recalled several brands that contain methanol.

As of the first week of March, hand sanitizer sales were up about 400% compared to the same week a year ago. Methanol, or wood alcohol, is toxic if absorbed through the skin or ingested, and highly flammable. The FDA, after testing samples of these products on the market, found various amounts of methanol, ranging from 28% to 81% in products tested. Hand sanitizers should contain 60% or more of isopropyl or ethyl alcohol instead of methanol.

Some hand sanitizers labeled as ethyl alcohol have been found to actually contain methanol. Signs of methanol exposure include: nausea, vomiting, headache, blurred vision, permanent blindness, seizures, coma, permanent damage to the nervous system or death.

The FDA as of July 27 had expanded its recall list to include 77 different hand sanitizers due to the presence of methanol in randomized tests. Many of the products are manufactured in Mexico and contain expiration dates into 2022. They had been sold in the United States at various retailers including Walmart, Costco, BJ's Wholesale Club, Target and others.

The FDA is recommending that any consumer who has been exposed to a hand sanitizer containing methanol needs to seek immediate treatment and appropriately dispose of the products as hazardous waste.

Sources: CBS News, MSN.com, CNBC.com and FDA.gov

CURRENT CASE ACTIVITY AT BEASLEY ALLEN

Beasley Allen has been able to keep things moving during the current pandemic crisis. We are taking care of our clients' cases and their need for justice, and our lawyers and support staff have been hard at work. In prior issues we have included an update on the types of cases that Beasley Allen lawyers in each of our Sections are working on.

The firm operates in four separate Sections with each Section focusing on a specific area of litigation. The four Sections are Personal Injury & Products Liability, headed by Cole Portis; Mass Torts, headed by Andy Birchfield; Toxic Torts, headed by Rhon Jones; and Consumer Fraud & Commercial Litigation, headed by Dee Miles.

This month we are not including the case lists from the Sections. Instead, we are putting the list for each Section on our firm's website, www.beasleyallen.com at the bottom of our homepage, and therefore making the list available. Our plan is to include the lists in the Report at least quarterly in future issues.

Please let us know if you would rather have the Beasley Allen Section case list included in each issue as done previously. We definitely need your input.

Even with the changes required by the coronavirus pandemic, our offices are open. You will have no difficulty getting through to a lawyer in our firm when seeking information or assistance on a specific case. However, in the unlikely event you do have difficulty reaching a specific lawyer (the primary contact for a specific type of case) you can contact one of our four Section Directors and she will promptly put you in touch with a lawyer in her Section who is working on the specific case you are asking about.

The Section Directors at Beasley Allen continue to do a tremendous job for our firm. The Directors are Melissa Prickett, Mass Torts Section; Sloan Downes, Personal Injury & Products Liability Section; Michelle Fulmer, Consumer Fraud & Commercial Litigation Section; and Tracie Harrison, Toxic Torts Section. The directors can be reached at 800-898-2034 or by email at Melissa.Prickett@beasleyallen.com, Sloan.Downes@beasleyallen.com, Michelle.Fulmer@beasleyallen.com and Tracie.Harrison@beasleyallen.com.

Resources to Help Your Law Practice

Beasley Allen has been recognized as one of the country's leading law firms involved in complex civil litigation, representing only claimants. We are both honored and humbled to have received that recognition. By choice, our firm does no defense work. Beasley Allen has truly been blessed and we understand the importance of sharing resources and teaming with peers in our profession. The firm is committed to investing in resources, including books authored by our lawyers, to help our fellow lawyers. For those who may be looking to work with Beasley Allen, or simply are seeking information that will help their law firm with a case, the following are among our most popular resources. The names of the books and the authors are set out below.

Aviation Litigation & Accident Investigation

Beasley Allen lawyer Mike Andrews discusses the complexities of aviation crash investigation and litigation. The veteran litigator offers an overview to the practitioner of the more glaring and important issues to be aware of early in the litigation based on years of handling aviation cases. He provides basic instruction on investigating an accident, preserving evidence, and insight into legal issues associated with aviation claims while weaving in anecdotal instances of military and civilian crashes.

Tire Litigation: A Primer

Although tire failures, blowouts and detreads are foreseeable and preventable events, all too often consumers are unaware of the potential dangers from defective, old or degraded tires. Beasley Allen lawyer Ben Baker provides lawyers guidance on evaluating tire litigation and underscores the importance of inspecting the tires of all vehicles involved in a crash.

Nursing Home Abuse & Neglect Brochure

Long-term care facilities, including nursing homes, are rife with abuse and neglect and alarmingly high rates of underreporting. To assist families and lawyers pursuing justice for victims, Beasley Allen has prepared a brochure with information to help identify the signs of abuse and neglect, and advice about how to file a claim.

Co-Counsel E-Newsletter

Beasley Allen also sends out a Co-Counsel E-Newsletter, which is specifically tailored with lawyers in mind. It is emailed monthly to subscribers. Co-Counsel provides updates about the different cases the firm is handling, highlights key victories achieved for our clients, and keeps readers informed about the latest resources offered by the firm.

The Jere Beasley Report

We also consider The Jere Beasley Report to be a service to lawyers as well as the general public. We provide the Report at no cost monthly, both in print form and online. You can get it online by going to https://www.beasleyallen.com/publishing/jere-beasley-report/.

You can reach Beasley Allen lawyers in the four sections of our firm by phone toll free at 800-898-2034 to discuss any cases of interest or to get more information about the resources available to help lawyers in their law practice. To obtain copies of any of our publications, visit our website at beasleyallen.com/publishing.

PRACTICE TIPS OF THE MONTH FOR TRIAL LAWYERS

This month Graham Esdale, a lawyer in our firm's Personal Injury & Products Liability Section, gives us some tips on the art of cross-examination. In my opinion, cross-examining a key witness is one of the most difficult tasks for a trial lawyer. However, it is one of the most important jobs a lawyer will undertake in a case. Let's see what Graham has for us.

Cross-Examination

“Cross-examination, the rarest, the most useful, and the most difficult to be acquired of all the accomplishments of the advocate … It has always been deemed the surest test of truth and a better security than the oath.” Cox.

Cross-examination is a skill that can be learned with practice. Personal experience and the emulation of others trained in the art are the surest means of obtaining proficiency in this all-important prerequisite of a competent trial lawyer. A good starting place for developing skills are four cross-examination classics: Francis Wellman's The Art of Cross-Examination (the first edition is more than a century old); Irving Younger's “The Ten Commandments of Cross-Examination”; Larry Pozner's Cross-Examination: Science and Techniques; and Terence MacCarthy's treatise on cross-examination.

These insightful works on cross-examination offer different perspectives with conflicting advice on solving the same cross-examination problems. Together, they provide a thorough theoretical and practical foundation of the goals of cross-examination. Trial lawyers who study them all can then perfect whose strategy works and whose does not, given the precise situation presented for cross-examination.

This article will touch on a few of the basics of cross-examination. A good starting point is to identify the goals of cross-examination. While this list is not exhaustive, here are some generally accepted objectives;

  • To use the witness to tell your client's story, although in a different way than in jury selection or opening statement.
  • To impeach the witness's credibility, knowledge, or recollection by pointing out inconsistencies or lack of qualifications. In the case of a lay witness, the two primary areas of impeachment are the witness's opportunity to observe or determine and the ability to accurately recall the events described.
  • To obtain helpful admissions or concessions from the witness.
  • To introduce additional evidence helpful to the jury's understanding of the case. For example, the Defense liability expert may present fertile territory for exploring issues and opinions that bear on damages. (I have seen Jere Beasley do this to perfection and the witness never saw it coming).
  • To cause the jury to dislike or mistrust the witness.

Obviously, you will not be able to use all of these objectives on every witness. You will need to determine which goals need to be used with which witness based on the facts and testimony offered.

How do you go about accomplishing these objectives? Let us again start with some basic rules of cross-examination. Some generally accepted rules are;

  • Leading questions only.
  • One fact per question.
  • Ensure each question leads to a specific goal.

Following these rules will help you control the witness, and at the same time make the witness's testimony easy to follow and understand for the jury.

Some other tenets of cross-examination are;

  • Do not ask a question unless you know the answer.
  • Consider whether to cross-examine at all.
  • Start strong and end strong.
  • Keep it simple.
  • Keep it short.
  • Know when to quit.

Developing good cross-examination skills takes years of practice combined with tireless preparation. Hopefully this condensed primer will provide some ideas on how to prepare for and construct a good cross-examination outline for your next opportunity at an opposing witness.

RECALLS UPDATE

A large number of safety-related consumer and automotive recalls were issued in July. However, we have decided not to include the recalls in this issue. Instead, we are making all of the recalls available on our website, https://www.beasleyallen.com/recalls/.

This way, you can always find the latest important product recalls on our site throughout the month. We would like to know if you like this new approach. You are encouraged to contact Shanna Malone, the Executive Editor of the Report, at Shanna.Malone@beasleyallen.com and to let her know your thoughts. If you would like to have the actual recalls in the report, we will consider doing so in the September and subsequent issues.

FIRM ACTIVITIES

Employee Spotlights

Amy Brown

Amy Brown, one of the firm's Legal Assistants, has been with Beasley Allen for 19 years. Currently, she works with Ted Meadows and Brittany Scott in the Mass Torts Section. Amy works in the Johnson & Johnson litigation involving talc powder cases. In that litigation, she deals with all the talc referring attorneys and firms.

Amy and her husband JJ have been married for 24 years. JJ owns Haponski Property Managing Commercial Warehouses. They have three children, Cadey Brown (21) and twin boys, Zach & Tyler Brown (16) who attend Macon East Academy. In her spare time, Amy enjoys watching her children play sports, hanging out with family and friends and spending time at the beach.

When asked what her favorite thing is about working at Beasley Allen, Amy says, “the family-like atmosphere and how Beasley Allen is always taking care of their employees.”

Amy is a hard-working, dedicated employee who is a definite asset to the firm. We are fortunate to have her with us.

Tracie Harrison

Tracie Harrison, who has been with the Firm for 21 years, is the Director of the Toxic Torts Section, which handles cases dealing with environmental and other related issues. Tracie began her career at Beasley Allen as Rhon Jones' legal secretary. After a few months, she became Rhon's legal assistant. Last year, Tracie was named Director of the Toxic Torts Section.

Tracie has been married to Nick for 25 years and they have one son, Hayden. Hayden is 18 years old and is beginning his Sophomore year at Troy University where he is pursuing a bachelor's degree in Accounting and Finance. In her spare time, Tracie enjoys cooking, reading and sewing. When outdoors, Tracie likes mountain biking, hunting and fishing.

When asked what her favorite thing is about working at Beasley Allen, Tracie says, “I love that Beasley Allen provides so much for one to grow spiritually and professionally.” The role of a Section Director is extremely important to the success of the firm and for Beasley Allen clients to receive justice in their cases. Tracie does a tremendous job in that capacity and we are fortunate to have her at Beasley Allen.

Valerie Walker

Valerie Walker has been with the Firm for five years and she works as a Legal Secretary for Graham Esdale and Dana Taunton in the Personal Injury & Products Liability Section.

Valerie has been married to Robert for 23 years. They have three grown children, three grandchildren, three yorkies and four cats. In their spare time, Robert and Valerie enjoy spending as much time as they can with their grandchildren. They are long-time Auburn fans and during football season you will find Robert and Valerie cheering on the Tigers! They also love to travel, love music and enjoy attending band performances of ‘70s and ‘80s music.

When asked what her favorite thing is about working at Beasley Allen, Valerie says:

It's the people that make up the firm. I feel like a real effort is made to know each employee. I love that Beasley Allen encourages attorneys and staff to prioritize their lives as God, family and then work. The ability to be a participant in the work this firm does for its clients and the firm's community service make my job a very rewarding one. I am proud and blessed to be a part of this firm.

Valerie is a hard-working employee who is dedicated to helping Beasley Allen clients receive justice in their cases. We are fortunate to have Valerie at Beasley Allen.

SPECIAL RECOGNITIONS

Navan Ward Elected As President-Elect Of AAJ

Beasley Allen lawyer Navan Ward, Jr., has been selected to serve as President-Elect of the American Association for Justice (AAJ). His election was announced at the organization's annual convention. This will be Ward's fifth consecutive year serving as an AAJ Officer and seventh consecutive year serving on the Executive Committee. The AAJ is dedicated to preserving the civil justice system and making sure that powerful special interests are held accountable when they engage in wrongful conduct. Navan, who is in our Atlanta office, is a member of the Georgia Trial Lawyers Association (GTLA). He had this to say about his election:

It is an honor to continue serving such a great organization that remains committed to ensuring access to justice to everyone in our country. This is a fundamental value in our nation and one that should never be taken for granted. The American Association for Justice stands ready to defend the justice system because consumers who have been injured through no fault of their own should have the same level of access to justice as even the most powerful corporations.

Navan has been with Beasley Allen since 2001. He has had a most interesting and productive career. Navan is in the firm's Mass Torts Section and has been involved in a number of high-profile mass torts cases. Currently, Navan is the firm's lead attorney on the metal-on-metal hip implant litigation and proton pump inhibitor (PPI) litigation. He serves on the Plaintiffs Steering Committee (PSC) for the DePuy “ASR” Hip Implant Recall multidistrict litigation (MDL). Navan was appointed as co-lead counsel for the Plaintiffs Executive Committee (PEC) in the Biomet M2a Magnum Hip Implant Products Liability MDL.

Overall, Navan has obtained more than $360 million for the specific clients that he has represented in his practice. Beasley Allen awarded Navan with the firm's Litigator of the Year in 2013 and Mass Torts Litigator of the Year in 2011 and 2014.

In 2017, Navan received the AAJ Minority Caucus Stalwart Award for his dedicated years of service to the Minority Caucus and the organization overall. He also received the AAJ Distinguished Service Award in 2012 and 2015, along with its Wiedemann & Wysocki Award in 2014. Navan was named to the LawDragon 500 Leading Plaintiff Consumer Lawyers, which is the 500 best attorneys across the nation in this category.

In addition to Navan's election, Tobi Millrood of Philadelphia ascended to become AAJ's President. Other officers are Tad Thomas of Kentucky, Vice President; Sean Domnick of Florida, Secretary; Lori Andrus of California, Treasurer; and Bruce Plaxon of Maryland, Parliamentarian.

The Georgia Trial Lawyers Association (GTLA) has a great history of providing leadership to AAJ. Navan will be the second GTLA member to lead AAJ when he becomes its President next year, following Richard Middleton of Savannah, who served as President in 1999-2000.

Leslie Pescia

Leslie Pescia began working at Beasley Allen during law school in May 2012 as a law clerk in our Consumer Fraud & Commercial Litigation Section. Now eight years later, at 32 years old, Leslie is one of the youngest principal (Shareholder) attorneys at the firm and has had extensive experience handling complex litigations including national class actions and multidistrict litigations (MDLs). Additionally, Leslie has the distinct honor of serving as the firm's first Pro Bono Coordinator.

Leslie said she knew at an early age that she wanted to become an attorney. She said, “I wanted to be an attorney because it allows me to passionately fight for what I believe is right and gives me the opportunity to make a real difference. To me being an attorney was less like a career choice and more like a calling.”

As she has honed her knowledge and skills in consumer protection and complex litigation, Leslie has helped secure millions in settlements for financial institution clients in cases involving data breaches. The litigations raised awareness about the problems created by unsecured or inadequately secured confidential information. They also prompted retail and other industries to improve procedures for securing consumers' confidential information. Leslie's investigation and her role in the discovery and briefing stages of the litigation helped establish the liability of companies whose data, which included personal consumer information, was exposed to security risks. Her contributions as part of the litigation teams helped secure a $39.3 million settlement in the Target data breach and a $25 million settlement in the Home Depot data breach. Leslie said:

Being able to fight for and receive justice for a client is my favorite part of being an attorney. My second favorite thing about practicing law is that it constantly changes. Of course, many things are similar from day to day, but each case presents a different client, a different defendant, a different problem, or a different set of facts. Likewise, laws get updated, overturned, or altered in various ways, so the law is constantly evolving.

Recognized by her peers as a born leader, Leslie not only takes initiative on litigation teams, but she also rises to the top in professional and civic organizations because of her natural inclination to lead. She is a member of The National Advocates – Top 40 Under 40 and received the American Association for Justice's New Lawyer's Division Excellence Awards for 2015-2016 and 2016-2017 and has been selected to the Midsouth Super Lawyers “Rising Stars” list since 2018. In 2017, Leslie was recognized by her law partners as Beasley Allen's Attorney of the Year in the Consumer Fraud & Commercial Litigation Section.

Leslie is a member of the Alabama State Bar, Alabama State Bar Young Lawyers Section, Alabama State Bar Diversity Committee, Alabama State Bar Women's Section, the Alabama Association for Justice, where she is part of the Emerging Leaders, and the Montgomery Volunteer Lawyers Program.

Leslie is also very active in the American Association for Justice (AAJ). She is a 2018 AAJ Leadership Academy graduate and a member of the AAJ's Women Trial Lawyer Caucus, Membership Oversight Committee, Class Action Litigation Group, and PAC Task Force. Most recently, Leslie was elected into an important leadership role as Secretary of the AAJ New Lawyers Division. The AAJ New Lawyers Division is a caucus made up of members who have been practicing less than 10 years or are younger than 35. The group's focus is networking, fundraising, continuing education, public service and membership benefits.

In 2019, Leslie became an Ex-officio Trustee of the Pound Civil Justice Institute, a national legal “think tank” dedicated to ensuring access to justice for ordinary citizens. She is also a member of the Montgomery Lions Club, Auburn Alumni Association and the Board of Directors of The F. Scott & Zelda Fitzgerald Museum.

Leslie attended Auburn University, graduating cum laude with her B.A. in 2009. She earned her J.D., graduating magna cum laude, from Faulkner University's Thomas Goode Jones School of Law in 2013. During law school, she was a Knabe Scholar and was named 2013 Advocate of the Year. Also, while in law school, Leslie clerked with Justice Greg Shaw of the Supreme Court of Alabama, as well as the Alabama Attorney General's Office. She also worked with Circuit Judge Christopher Hughes for the 37th Judicial District of Alabama as a research assistant.

When asked about Beasley Allen and what makes it unique, Leslie said, “Beasley Allen has been my home from the beginning, and I never expected a job to feel like home. The attorneys with whom I worked gave me invaluable opportunities as a young lawyer that I don't think I could have gotten anywhere else.”

Leslie was raised in Scottsboro, Alabama, and now lives in Montgomery, Alabama, with her three dogs, Toby, Tucker and Scout. Leslie is an avid sports fan and likes to spend her spare time at all types of sporting events, from football games to boxing matches.

Beasley Allen's Joseph Vanzandt Named To Law360 Rising Stars

Joseph VanZandt, a lawyer in our firm's Mass Torts Section, has been included in the Law360 Rising Stars rankings. Law360's Rising Stars profiles the top legal talent nationwide younger than 40. The winners are comprised of top litigators and dealmakers practicing at a level usually seen from veteran lawyers. Beasley Allen Managing Attorney Tom Methvin had this to say:

We are proud of Joseph and the leadership he demonstrates on the national stage. He is making a difference in the lives of our clients while holding corporate bad actors accountable and passing along those benefits to a broader population.

Joseph is currently working on the national JUUL litigation. The vaping epidemic sparked by JUUL's aggressive marketing tactics targeting youth is as bad as it gets. Joseph represents individuals who have suffered injuries related to the use of JUUL vaping devices and other similar vaping products. He also represents school districts and other public and private entities that have been impacted by the national youth vaping epidemic. Joseph was appointed to serve on the Plaintiffs' Steering Committee for the national multidistrict litigation (MDL). As a result, he has a lead role in the MDL.

Before the JUUL litigation, Joseph's practice focused on representing individuals against Janssen Pharmaceuticals and Bayer Corporation for claims related to the blood thinner Xarelto. Beasley Allen's Andy Birchfield served as co-lead for the Xarelto MDL in the Eastern District of Louisiana. Joseph was instrumental in assisting Andy manage the national litigation consisting of more than 25,000 individual claimants.

Throughout the Xarelto litigation, Joseph was instrumental in deposing multiple key defense expert and corporate witnesses, discovery and workup of multiple bellwether cases. He served as a trial team member in five bellwether trials in the MDL and the corresponding state court litigation in Pennsylvania. After completion of the bellwether phase, Joseph spearheaded the process of planning, organizing and overseeing remand discovery for 1,200 cases. Joseph then played a key role in negotiation and administration of the $775-million global settlement of the Xarelto litigation.

Joseph has also been named by The National Trial Lawyers to the Alabama Top 40 Under 40 List and was recognized by his law partners as the 2018 Mass Torts Section Lawyer of the Year. He is a member of the Alabama State Bar Young Lawyers Section, and the Montgomery County Bar Association Young Lawyers Division.

Caty O'Quinn Joins Beasley Allen

Catherine “Caty” O'Quinn is one of the firm's newest lawyers in the Mass Torts Section. Caty is working on cases where women's regular use of talcum powder in the genital area for personal hygiene has been linked to the development of ovarian cancer. Before joining the firm, Caty worked for private practice attorneys handling social security disability claims and working on probate and family law cases.

The Mississippi College graduate earned a Bachelor's in history and a minor in Spanish and graduated from Samford University's Cumberland School of Law in 2012. While in law school, Caty worked as a law intern at Alabama Appleseed Center for Law and Justice, a nonprofit organization working to achieve social justice and equity for all Alabamians. She specifically worked on the organization's Poultry Worker Safety Initiative and the Alabama Constitutional Reform Project. When Caty was asked why she chose to become a lawyer, she said:

To speak for those unable to speak for themselves. I wanted to be an advocate for the people taken advantage of and forgotten by society.

Caty is a member of the Alabama State Bar, Montgomery Bar Association, Birmingham Bar Association, Tuscaloosa Bar Association and National Organization of Social Security Claimant Representatives (NOSSCR). She also volunteers with various animal welfare organizations in the Tuscaloosa and Montgomery areas.

Being able to speak for those who can't speak for themselves is Caty's favorite part of practicing law. She said, “It makes me angry when people are taken advantage of just because they are vulnerable. I became an attorney so I could step in and be on their team. I think it's important for people to not feel alone and to feel like their voices are heard.”

On a related note, Caty says that “working at a nationally recognized Plaintiffs' firm with a proven track record for helping those who society has pushed aside and ignored, is a dream come true.” She added, “These are people who would be forgotten, who no one would care about it. I'm proud to be part of a firm that gives them a chance to tell their story.”

The Tuscaloosa, Alabama, native says her family is equally committed to helping others as health care providers in the State of Alabama. Her mother is a school nurse in Tuscaloosa; her brother, a chiropractor in Birmingham; and her sister is a nurse in Huntsville. In her time away from the office, Caty enjoys reading and politics, and is currently learning to cook and play the piano. She says she also has “an adorable cat named Azreal.”

We welcome Caty to the firm. She is a very good addition and she is already hard at work in an important area of litigation for Beasley Allen.

Laura Reaves Wins NALA Award

Laura Reaves is a Paralegal at Beasley Allen working with Chris Glover, the Managing Attorney for our Atlanta office. Laura was awarded the “Affiliate Award” by the National Association of Legal Assistants (NALA) at the organization's annual conference last month. The award recognizes members of affiliated associations for their contribution to the goals and programs of those affiliated associations. As you probably know, legal assistants and paralegals are really one and the same – just by different names.

Laura serves on the Continuing Education Council Committee for NALA and is the Region II Director for the Alabama Association of Paralegals, Inc. (AAPi). She also serves on the Paralegal Advisory Committee of the Paralegal Program at the Air Force Judge Advocate General's School on Maxwell Air Force Base. Laura had this to say:

I am so thankful to AAPi for nominating me for this award and am honored to have received it. Being a member of AAPi and NALA has truly been wonderful from a personal and a professional perspective. I can't say enough great things about these two organizations.

The AAPi nominated Laura for the award to recognize her contributions to the affiliate. Previously, Laura has spoken at the AAPi's Winter Seminar, presenting information about Electronic Filing in Today's Courts. She is also a two-time speaker on the U.S. Legal System at the AAPi's Certified Paralegal Review – Knowledge Exam course. Laura has authored several articles that have been published in NALA's Facts & Findings, The Paralegal Magazine.

Laura, who has been at Beasley Allen for 19 years, is now working in the Personal Injury & Products Liability Section. Chris Glover had this to say:

I'm proud of Laura's hard work and dedication to our clients and the paralegal professional community. Like the rest of the Beasley Allen attorneys and staff, Laura is committed to achieving justice for our clients.

Laura earned an Associate of Science in Legal Studies from Faulkner University and a Bachelor of Arts in International Business from Huntingdon College. She is a Certified Paralegal through NALA.

In addition to her leadership in the local NALA chapters, Laura is also a volunteer in the community, serving as a mentor at Flowers Elementary School in Montgomery, Alabama. She also volunteers with the Information Table at Centerpoint Fellowship Church in Prattville, Alabama, where she and her family are members.

Laura and her husband, Jamie, have been married for 18 years and they have a 14-year-old son, Hunter, who is a student at Edgewood Academy in Elmore County. Hunter is involved in a number of sports including travel baseball, school baseball and track. When she isn't working or volunteering, Laura loves spending time with her family, including their three rescue dogs. She said that she and her family most likely can be found at the ballfield, but they also enjoy an occasional lazy day on the river, kayaking, or catching a movie.

We are blessed to have Laura at Beasley Allen and we congratulate her for this award and for her diligence in upgrading her profession.

FAVORITE BIBLE VERSES

Larry Golston, a lawyer in our firm's Consumer Fraud & Commercial Litigation Section, furnished two verses for this issue.

In all your ways acknowledge Him, And He shall direct your paths. Proverbs 3:6 (NKJV)

And we know that all things work together for good to those who love God, to those who are called according to His purpose. For whom He foreknew, He also predestined to be conformed to the image of His Son, that He might be the firstborn among many brethren. Moreover whom He predestined, these He also called; whom He called, these he also justified; and whom He justified, these He also glorified. What then shall we say to these things? If God is for us, who can be against us? Romans 8:28-31 (NKJV)

Michael Andrews, a lawyer in Beasley Allen's Personal Injury & Products Liability Section, sent in Joshua 1:9 as his favorite Bible verse.

Have I not commanded you? Be strong and courageous. Do not be afraid; do not be discouraged, for the Lord your God will be with you wherever you go.” Joshua 1:9

He says, “It is important to hear and remember that fear is only an illusion that we create within ourselves. We are commanded to not be afraid, to be strong and courageous and to not allow fear to control our thoughts and actions. Fear can certainly feel and seem very real but being afraid is a choice. When we realize that we can choose to not be afraid, then our actions are more rational and purposeful. Remember that there is a difference between a healthy respect for known dangers and irrational fear of the unknown. Some of the most divisive rhetoric circulating today is intended to play on fear to foster hatred and motivate obedience or allegiance but is actually just empty rhetoric. No one is coming to take your guns or to implant secret microchips. These are statements intended to divide through fear. Do not be afraid. Be prayerful, be courageous, be upright and steadfast and rational and compassionate.”

Liz Eiland, a lawyer in our Mass Torts Section, sent in her favorite Bible verse. She says: “From the very beginning, scripture tells us that all persons are created in the image of God and are endowed with a sacred worth. Then God said, ‘Let us make humankind in our image, according to our likeness. . .” Genesis 1:26. “This excerpt from 1 Corinthians also emphasizes the importance of each individual to the whole of humanity. If one member suffers, all suffer together with it. It's our job to stand with those who are hurting. If you aren't sure who among us is hurting, listen and then believe, rather than question, their accounts.”

For just as the body is one and has many members, and all the members of the body, though many, are one body, so it is with Christ. For in the one Spirit we were all baptized into one body – Jews or Greeks, slaves or free – and we were all made to drink of one Spirit. . . . If one member suffers, all suffer together with it; if one member is honored, all rejoice together with it. 1 Corinthians 12:12-13, 26

Casie Coggin, a paralegal in our firm's Personal Injury & Products Liability Section, furnished her favorite Bible verse. Casie says: “One of the hardest and most challenging verses in scripture is Matthew 5:43-48. Loving and praying for our enemies. What a task! It takes humility and willingness to put yourself last, which goes against all of our fleshly instincts. Searching ourselves and possibly seeing our enemies from the perspective of the Creator of all. Oh, if we would only learn how to truly pray for our enemies, the prince of this world would get less of a foothold in our lives.”

“You have heard that it was said, ‘You shall love your neighbor and hate your enemy.' But I say to you, Love your enemies and pray for those who persecute you, so that you may be sons of your Father who is in heaven. For he makes his sun rise on the evil and on the good, and sends rain on the just and on the unjust. For if you love those who love you, what reward do you have? Do not even the tax collectors do the same? And if you greet only your brothers, what more are you doing than others? Do not even the Gentiles do the same? You therefore must be perfect, as your heavenly Father is perfect. Matthew 5:43-48 ESV

CLOSING OBSERVATIONS

Politics Shouldn't Trump Science

Our country is in peril. Now more than ever we should be working together to flatten the trajectory of COVID-19 cases and deaths. Yet, we are a nation divided by facemasks. A nation where so many are taking exception with recommendations from public health experts to do one simple thing – wear a face mask to help prevent the spread of the novel coronavirus. Why are so many of us putting politics before science?

Both the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO) now recommend cloth masks for the general public, a shift from their initial stance earlier in the pandemic. But we know more now. There is now clear evidence that masks can help prevent the spread of COVID-19. The science gives credence to the fact that the president and Congress should be uniting behind a clear national policy on the use of face masks. Yet, politics keeps getting in the way.

Even leaders in cities with climbing COVID-19 numbers are trying to protect their citizens by mandating face coverings and closing nonessential businesses, but politicians are intervening. On July 16, Georgia Gov. Brian Kemp filed a lawsuit against Atlanta Mayor Keisha Lance Bottoms for going against his statewide order that forbids local municipalities from requiring face masks.

Alabama Gov. Kay Ivey sees the flaw in that plan. On July 15, a day after Alabama saw a pandemic-high of 40 deaths in one day, she announced a statewide face mask order, saying that Alabama is past the point of “encouraging” mask wearing. “It's not enough,” she said. “Putting it in the form of a mandate is to underscore the necessity for everyone to wear a mask to protect everybody.” Gov. Ivey took the needed and certainly proper action.

But who can blame the nation's leaders for being divided over face coverings when our country's own president up until July 22 had flatly refused to wear one? It was time for this man to finally show real leadership in our battle against the pandemic. At least the president is now admitting to some extent that all Americans should wear the masks as recommended by the medical professionals. In any event politics should never be allowed to override medical science in the midst of a pandemic.

Sources: WVTM-TV13, USA Today, Proceedings of the National Academy of Sciences

Our Monthly Reminders

If my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then will I hear from heaven and will forgive their sin and will heal their land.

2Chron7:14

All that is necessary for the triumph of evil is that good men do nothing.

Edmund Burke

Woe to those who decree unrighteous decrees, Who write misfortune, Which they have prescribed. To rob the needy of justice, And to take what is right from the poor of My people, That widows may be their prey, And that they may rob the fatherless.

Isaiah 10:1-2

I am still determined to be cheerful and happy, in whatever situation I may be; for I have also learned from experience that the greater part of our happiness or misery depends upon our dispositions, and not upon our circumstances.

Martha Washington (1732 – 1802)

The only title in our Democracy superior to that of President is the title of Citizen.

Louis Brandeis, 1937
U.S. Supreme Court Justice

Injustice anywhere is a threat to justice everywhere.

There comes a time when one must take a position that is neither safe nor politic nor popular, but he must take it because his conscience tells him it is right.

The ultimate tragedy is not the oppression and cruelty by the bad people but the silence over that by the good people.

Martin Luther King, Jr.

The dictionary is the only place that success comes before work. Hard work is the price we must pay for success. I think you can accomplish anything if you're willing to pay the price.

Vincent Lombardi

Kindness is a language which the deaf can hear and the blind can see.

Mark Twain (1835-1910)

“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country….corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”

U.S. President Abraham Lincoln, Nov. 21, 1864

In his December 1902 State of the Union address, Theodore Roosevelt said of corporations: “We are not hostile to them; we are merely determined that they shall be so handled as to subserve the public good. We draw the line against misconduct, not against wealth.”

The ‘Machine politicians' have shown their colors…I feel sorry for the country however as it shows the power of partisan politicians who think of nothing higher than their own interests, and I feel for your future. We cannot stand so corrupt a government for any great length of time.”

Theodore Roosevelt Sr., December 16, 1877

“The opposite of poverty is not wealth; the opposite of poverty is justice.”

Bryan Stevenson, 2019

PARTING WORDS

Marvin Salter Takes A Stand

The following is an op-ed written by Marvin Salter, a Beasley Allen client, that was published in Columbia, Missouri, last month in the local newspaper, the Columbia Tribune. Marvin does an excellent job of exposing Johnson & Johnson's racist marketing tactics, as well as its hypocrisy.

Commentary: Johnson & Johnson: Discovering Black People, Again

First, the company decided Black lives do matter. In the wake of George Floyd's killing, Johnson & Johnson's CEO Alex Gorsky released a statement declaring, in part, “racism in any form is unacceptable.” Not exactly bold, but not bad either. And now, after decades of pretending the world was as white as its iconic and very dangerous baby powder, Johnson & Johnson is ready to start selling us Black Band-Aids. Actually, the company is going to make them in several shades, each darker than those currently available, which while skin-toned, don't match the skin tones of many of us, this author included.

But the truth is a bit darker. Johnson & Johnson actually “found” Black people many years ago and targeted us with marketing designed to sell its baby powder. And they did it knowing that the talc in that powder might kill. That's not just talk. There are numerous corporate documents showing that Johnson & Johnson did exactly that.

The first reports of problems with the talc in Johnson's baby powder, and indications it might contain asbestos, were known by J&J as early as the 1970s. The company denied there was a problem.

Then, as respected medical researchers began to reveal evidence of the association between talc use and ovarian cancer, women from all over the country began to sue the company. Faced with the claims, Johnson & Johnson did it again. Deny, deny, deny.

This time though, they added a new chorus. They called it “junk science.” How could baby powder, the great-smelling stuff we've used for generations, how could it cause cancer? The company had to be right, the women wrong.

And now, the latest. Johnson & Johnson announced recently it is removing its iconic baby powder from store shelves in the U.S. and Canada. But in a cynical move, the company will continue to sell it in other parts of the world. Presumably, it is all right to cause cancer in the ovaries of brown, Black and other non-white women in other parts of the world where Black lives don't matter as much.

How is the company explaining this move? By now you know what they did. Deny, deny, deny. No, they say, we're not removing the product because it's harmful. And it's not because we're scared of billions of dollars in jury verdicts. No, it's the coronavirus you see. It forced us to stop making a bunch of products, and this 120-year-old thing called baby powder, the one thing our company is known for more than anything else in the world, one that contributes about $325 million annually to our bottom line, it's one we decided to stop making because of the virus. It's still safe though. Trust us.

There also has been coverage, more recently, about a federal judge in New Jersey who ruled that experts who have studied the link between baby powder and ovarian cancer will be allowed to testify in court. That's a pretty big deal. Johnson & Johnson had tried to prevent that from happening. That “junk science” thing? The court didn't buy it.

That one decision means about 17,000 cases – 17,000 moms, sisters and daughters with cancer – can go forward now. And the experts, some with important research Johnson & Johnson has been discrediting and ignoring since the 1980s, will get to tell juries what they think.

There is more bad news for baby powder from Washington. There, you will find a congressional committee and a subcommittee poking around – the gall of those elected representatives of the people – into Johnson & Johnson, talc, asbestos, cosmetics, all sorts of interesting stuff.

The FDA even held a hearing on the methods it uses to determine whether there is asbestos in things women and girls smear all over their faces, such as foundation, eye shadow, mascara and the like. Asbestos on your face and around your eyes. That would be bad for you, no? Just like it's bad to have it, and talc, in your ovaries.

If Johnson & Johnson has decided to stop selling its baby powder in North America, it should do likewise with its now-colorful Band-Aids and its platitudes about racism. Please don't sell us on your open-mindedness. You sold us on your products before and some of us are no longer here to talk about it.

Marvin Salter is the son of Jacqueline Fox, who died in 2013 at age 62 of ovarian cancer. Ms. Fox had filed suit against Johnson & Johnson but died before the trial. Her son continued with the case, which was tried in St. Louis, Missouri. Ms. Fox had used Johnson's baby powder for decades. As mentioned previously, it should be noted that she was a cousin of Rosa Parks. We are honored to have had the opportunity to represent this courageous lady and commend Marvin for carrying on his mother's battle against Johnson & Johnson on behalf of other women and their families.