The Jere Beasley Report March : 2020

View Archive Subscribe

CAPITOL OBSERVATIONS

Statement On The Rule Of Law And An Independent Judiciary

Observing the Rule of Law in America is critically important to the survival of our nation as a Republic. A Democracy depends on those in power understanding that the courts and the judges who serve in the judicial system must be obeyed and respected. The Rule of Law is defined as “a principle under which all persons, institutions and entities are accountable to laws that are: publicly promulgated – equally enforced – and independently adjudicated.” The Rule of Law is what sets us apart from our adversaries. No person, regardless of position or power, can be above the law. Recently the Federal Bar Association took a stand that was most significant.

The Federal Bar Association (FBA) was founded in 1920. It consists of more than 19,000 lawyers, including 1,500 federal judges, who work together to promote the sound administration of justice, quality, and independence of the judiciary. The FBA is a nonpartisan catalyst for communication between the bar and the bench as well as the private and public sectors. The FBA advocates on federal issues that impact the practice of federal lawyers and the courts; and promotes high standards of professional competence and ethical conduct. The mission of the FBA includes serving not just the interests of the federal judiciary and the federal practitioner, but also the interests of the community that they serve. The FBA on Feb. 19 adopted a statement on the Rule of Law and an independent judiciary. That statement is set out below.

Respect for the rule of law and the preservation of an independent judiciary are among the most important principles upon which our Republic was founded. These time-honored principles have guided our constitutional democracy for more than two centuries. In fulfilling the Federal Bar Association’s mission and honoring our members’ commitment to upholding federal law, the Association has a responsibility to defend and protect the rule of law and the independence of our judiciary when these fundamental tenets are at risk.

The stability of our constitutional democracy rests on public confidence in all institutions charged with enforcing our laws, especially the U.S. Department of Justice. The just enforcement of law involves the well-grounded application of facts to the law and not political affiliations, personal interests, or retribution. Furthermore, the preservation of public confidence in the rule of law is associated with the longstanding recognition of the Attorney General of the United States as the nation’s chief law enforcement officer and the legal representative of the nation as a whole, not any government official, agency, party or person. Departure from this principle erodes public respect for the fairness of our legal system and equal justice under law.

Attacks on our judiciary pose the same danger. Judicial independence, free of external pressure or political intimidation, lies at the foundation of our constitutional democracy. An independent judiciary must be free of undue influence from the executive and legislative branches and must remain committed to the preservation of the rule of law and the protection of individual rights and liberties. When criticism of judges’ rulings crosses the line into personal attacks or intimidation, public respect for our system of justice is undermined, creating risk to our constitutional bedrock and the preservation of liberty. The Federal Bar Association urges all Americans and elected leaders to remain mindful of these cherished principles.

Source: The Federal Bar Association

The American people must take a stand and support the Rule of Law and our nation’s judicial system. The judicial system has been under attack in the past and has survived. Recent attacks will also fail, but only if the people the system serves and protects take a stand like that taken by the FBA. We must preserve the Rule of Law in America and we fail to do so at our peril! We cannot fail!

UPDATE ON THE BOEING LITIGATION

Ethiopian Airlines Marks 1-Year Anniversary Of Boeing 737 MAX Crash, Aircraft Remains Grounded

In the year since the second of two fatal Boeing 737 MAX crashes that prompted regulators worldwide to ground the aircraft, it remains grounded. Boeing has worked to address the MCAS software malfunctions that were determined to be the key cause of the crashes. Initially, Boeing stated the fix would take only months to develop and incorporate into the existing MAX aircraft. Throughout the year, however, Boeing has made promise after promise to get the aircraft back in operation only to push back each new deadline after problems surface with each newly established deadline.

The MAX grounding is the longest ever in U.S. aviation history and it is a scenario Boeing likely never expected. Yet, the senseless deaths of the 346 people on Lion Air flight 610 and Ethiopian Airlines flight 302 also triggered an unfolding of events that exposed a greedy corporate culture willing to sacrifice safety to maintain the company’s dominance in aviation worldwide and protect its bottom line. Revelations about the development of the MAX forced regulators, lawmakers and others to take a closer look at Boeing. The Federal Aviation Administration’s (FAA’s) oversight and approval process that gave the MAX a green light to take to the skies has also faced intense scrutiny. Many lawmakers have expressed a loss of appetite for the self-certifying approval process that allowed Boeing to approve much of its own work while deceiving regulators about safety issues the company knew about well before the defective planes were delivered to airlines.

The company’s dirty laundry has been aired several times publicly including the release of internal documents expressing doubt about the MAX’s safety and disparaging MAX engineers and those designated to oversee its certification. Combined with other shortcomings and failures, including a failed launch of the company’s Starliner rocket in December, the company changed leadership at the end of last year. The move was intended to signal a shift in the company’s approach to addressing the problems that have and continue to surface primarily involving the fatally flawed MAX aircraft though many remain skeptical that the new CEO is the person needed to turn Boeing around.

David Calhoun assumed the role in January but has been part of the company’s board much longer including during the time when critical decisions were made that led to the MAX tragedies. Critics and surviving family members of those killed in the two crashes also question the generous compensation package – $60 million – on top of what the company had already given its fired CEO, Dennis Muilenburg. A significantly larger amount than the $50 million to be divided among all of the families of those killed as a result of the MAX crashes.

Recent developments in the MAX debacle show the company still has a long road ahead. While industry leaders are optimistic that the MAX will be fixed and resume operation, only time will tell, and these most recent developments show more of the same problems and failures that have plagued the company and aircraft over the last year. The company is taking steps to remove other senior managers who condoned, if not contributed to the corrupt corporate culture, according to Fox News. Still, it is too soon to determine if Mr. Calhoun and the rest of the leadership are willing to really address the depth and complexity of Boeing’s problems.

The following are some developments in the Boeing litigation that have occurred since our last update.

More software issues announced in February.

Early last month, FAA Administrator Steve Dickson confirmed that a new software glitch on the MAX had been discovered, involving the stabilizer trim system indicator light. The stabilizer trim helps raise and lower the nose of the aircraft. Mr. Dickson said the light “had been staying on for longer than a desired period.” Boeing said the problem originated with the inputs into the flight control computers, according to CNN. It was discovered when pilots were test flying the aircraft with the updated software. Once again, the company expects the fix to the latest software problem will be an easy one and doesn’t anticipate that it will cause further delays for the plane’s return to service. However, as of the writing of this story, Southwest Airlines has once again delayed adding the MAX back to its flight schedule until at least Aug. 10 this year, according to ABC News.

The initial software malfunctions inadvertently sent the planes into a nosedive shortly after takeoff. A false reading by the single Angle of Attack (AOA) sensor erroneously activated the MCAS, telling the software that the plane’s nose was going too high and was at risk of stalling. Pilots can disengage the MCAS, but it can quickly reactivate, creating a tug of war between the pilots and the plane until it crashes. Further, Boeing never told pilots or its airline customers about the new software, which completely surprised the pilots who had no clear idea of how to respond to the system.

Similar software problems were also discovered last summer. A test pilot gave the system a failing grade after a test flight in a simulator when he wasn’t able to quickly and easily recover the plane using Boeing’s prescribed emergency procedures to regain control of the plane. The pilot determined that the failure was catastrophic and could lead to the loss of the plane in midflight. Further, in January, findings from an FAA audit of Boeing’s proposed changes revealed more safety issues and concerns over the plane’s design. Among other concerns, the report revealed problems with wiring that helps control the aircraft’s tail. Regulators fear that two bundles of wiring may be too close together and that the close proximity could cause a short circuit, creating a scenario that could bring down another plane. Boeing may be required to separate the bundles before the aircraft can be approved by the regulators.

FAA Administrator confirms there is no date set for the MAX test flight.

Shortly before the latest software issues were discovered, Administrator Dickson said the test flight for the MAX, a key milestone in returning it to service, could be just weeks away. Once the latest glitch news broke, agency spokespeople returned to the “no time frame” messaging regarding when it expects the MAX to return to service.

Boeing confirmed in February that it had conducted several test “touch-and-go landing” flights at various airports across the country. The noncommercial flights were intended to test the new software changes in certain weather and altitude conditions required by regulators. The company explained in a statement that the flights were not certification flights but were necessary to ensure it was addressing all certification requirements.

In addition to the remaining requirements Boeing must address before the certification test flight, individual airlines training plans must also be approved, as reported by the StraitsTimes. This process will also likely be delayed now that the U.S. Dept. of Transportation’s Office of Inspector General will be investigating the requirements established by the FAA for pilot training.

U.S. Department of Transportation’s Office of Inspector General to audit FAA’s pilot training requirements.

The Dept. of Transportation’s Office of Inspector General (OIG) will investigate the FAA’s training requirements for pilots in the U.S. and for foreign air carriers, Reuters reported. The OIG will also review global regulators’ requirements for air carriers’ pilot training on using flight deck automation. The review was requested by members of the House Committee on Transportation and Infrastructure and its Subcommittee on Aviation, which have also been investigating Boeing, the MAX’s development and the FAA’s role in approving the aircraft.

Pilots were never told about the new MCAS software incorporated in the MAX, much less trained to properly respond when it is activated, especially when it was erroneously activated. The scathing internal documents released by Boeing shows successful efforts by company employees to deceive regulators into agreeing not to make the information known to pilots.

Following the Lion Air crash, Boeing attempted to sweep the MCAS and the fact that it withheld the information from pilots under the rug but that tried and true approach failed when pilots refused to back down from their criticisms of Boeing.

Although Mr. Calhoun continues to reject the notion that Boeing sacrificed safety, independent investigations by the Indonesian National Transportation Safety Committee, National Transportation Safety Board (NTSB) and the Joint Assessment Technical Review (JATR) Panel all said Boeing certified much of its own work and that the assumptions about safety concerns provided to the FAA for its review, specifically about pilots’ responses in emergency situations, were not sufficiently presented to the FAA for a more accurate analysis.

While it appears Boeing has taken steps to turn the company around, actions over time speak louder than words. It will take more than a few leadership changes to truly address the problems Boeing is facing and to regain the public’s trust.

Beasley Allen has filed a number of lawsuits for families of victims of the Ethiopian Airlines crash. Mike Andrews in our Personal Injury & Products Liability Section focuses much of his practice on aviation litigation. He is handling the Boeing litigation for the firm. Mike is also currently investigating other potential cases. As previously reported, Mike visited the crash site and surrounding areas several times last year and was overwhelmed at the carnage left behind after Flight 302 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.

Sources: Foxbusiness.com, cnn.com, abcnews.go.com, straitstimes.com and Reuters

AN UPDATE ON THE TALC LITIGATION

The Month Of March

There was a great deal of activity in the Talc Litigation in February, and there will be a great deal happening in the litigation at Beasley Allen during this month. I will mention a few things from last month that are certainly newsworthy. There will be a complete update on the state of the Talc Litigation in the April issue.

Talc Litigation Update – Busy 2020 Trial Calendar

Last fall Beasley Allen lawyers tried the case of Ms. Diane Brower in front of Fulton County State Court Judge Jane Morrison and ended with a 10-2 hung jury. Although 10 jurors favored a Plaintiff’s verdict, it was not enough to avoid a mistrial. Since that time, the lawyers on the talc team have been working diligently to get justice for Ms. Brower and have this case reset. Judge Morrison has now confirmed this case will be retried with pre-trial starting on April 6 and the trial itself starting on April 8.

Following the conclusion of the Brower retrial, the talc team will be moving forward with the first talc trial in Illinois that will likely begin in early May. This trial will take place in East St. Louis, Illinois, and involves the wrongful death of Elizabeth Driscoll. Ms. Driscoll was a lifelong resident of the state of Illinois who habitually used Johnson & Johnson talc products for more than 42 years. As a result of this habitual use, she was diagnosed with ovarian cancer in February of 2015. Unfortunately, after a hard fight Ms. Driscol died as a result of her ovarian cancer on Sept. 4, 2016.

The talc team is also hard at work preparing for an upcoming talc trial in Philadelphia. Currently, Frye hearings, which are similar to the federal Daubert hearings, began on Feb. 25. The Pennsylvania judge will hear the qualifications of the expert witnesses who have been designated to testify at trial and determine whether or not they qualified to testify under the Pennsylvania standards. This case will likely go to trial in mid-June.

Outside of the three trials the talc team is currently preparing for, Beasley Allen is also working on getting additional trial dates set for the fall and winter of 2020, with potential trials in St. Louis in the fall and potentially a new venue such as Florida for the winter. We are looking forward to representing all of our clients in these upcoming trials.

Beasley Allen lawyers continue to investigate new cases on behalf of women diagnosed with ovarian cancer after using talcum powder products. 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.

J&J Settles Asbestos-In-Talc Case

Johnson & Johnson (J&J) reached a settlement on Feb. 25 with a 62-year-old woman who had alleged that asbestos in its baby powder caused her mesothelioma. This settlement ended a trial as the jury was being instructed before opening statements. No details of the settlement have been released thus far.

Ms. Shanahan, who filed suit in New York Supreme Court in August 2018, had been diagnosed with mesothelioma in July of that year. She used J&J baby powder as part of her daily hygiene routine for decades, starting as a young child.

You may recall that in January, J&J reached a settlement with Plaintiff Linda O’Hagan, avoiding a trial that was underway in Alameda County, California. That kept one of the first juries to hear about the U.S. Food and Drug Administration’s (FDA) October 2019 finding of asbestos in a bottle of talcum powder from delivering a verdict.

Earlier in February, a New Brunswick, New Jersey, jury hit J&J with $750 million dollars in punitive damages – immediately reduced to $186 million due to a state cap on punitive damages – in another case over allegations of asbestos in the company’s baby powder. A prior jury in the case had found in favor of several mesothelioma victims who alleged J&J’s products caused their cancers and awarded them $37.3 million in compensatory damages. We will write below on a case in which J&J took a calculated risk and lost at trial.

Ms. Shanahan is represented by Jerome Block and Amber Long of Levy Konigsberg LLP. The case is Laura Shananan v. Johnson and Johnson Inc. et al., (case number 190330-2018E) in the Supreme Court of the State of New York, County of New York.

Source: Law360.com

J&J Hit With $9 Million Asbestos-In-Talc Verdict In Florida

A jury in Miami ruled against Johnson & Johnson on Feb. 27 and ordered J&J to pay a Florida woman $9 million. The jury found the consumer products giant caused the woman’s mesothelioma by exposing her to asbestos in baby powder it sold. The jury said J&J had been negligent and sold a defective product. Plaintiff Blanca Moure-Cabrera was awarded $3 million for past medical expenses and $6 million for past and future pain and suffering.

Ms. Moure-Cabrera’s lawyer Marc Kunen of The Ferraro Law Firm told Law360 that the jury verdict – the first of its kind in Florida – was “bittersweet.” He added: “Although we are pleased with the results, the reality is that Ms. Moure-Cabrera is still suffering from a devastating cancer that will ultimately take her life.”

Ms. Moure-Cabrera is represented by Marc Kunen and Jose Becerra of The Ferraro Law Firm. The case is Moure-Cabrera v. Cyprus Amax Minerals Co. et al., (case number 2019-000727-CA-01) in the Circuit Court of the 11th Judicial District in and for Miami-Dade County, Florida.

Source: Law360.com

J&J CEO Faces Scrutiny In Talc Trial

Johnson and Johnson (J&J) chairman and CEO Alex Gorsky was forced to testify last month during the punitive damages phase of a New Jersey case involving four Plaintiffs alleging they developed mesothelioma due to asbestos in J&J talc products. The four Plaintiffs were awarded $37.3 million in compensatory damages in September 2019 by a separate jury. This marks the first time Gorsky has testified at any of the trials involving J&J talc products.

As previously reported, Reuters published an article in December of 2018 that J&J knew for decades that its talc products were contaminated with asbestos. In response, Gorsky appeared in a video to reassure customers that its talc products are safe. He also appeared on the show Mad Money on CNBC to reiterate these assurances.

Gorsky had been subpoenaed to appear in the New Jersey punitive damages trial regarding those statements. J&J filed a motion to quash Plaintiffs’ subpoena, arguing Gorsky had no personal knowledge regarding the safety of its talc products or corporate conduct that occurred prior to him joining the company. The company’s motion was denied. Superior Court Judge Ana C. Viscomi found that Gorsky’s statements made in the video and during the CNBC interview indicated he did have personal knowledge relevant to J&J conduct at issue in the trial. J&J’s interlocutory appeal was also denied.

Gorsky was not only questioned about asbestos contamination in talc, but also about his sale of $38.6 million in J&J shares in November of 2018. Gorsky sold his shares the same day a Reuters reporter contacted J&J about the exposé. Gorsky claimed the events were unrelated and that he was unaware the reporter contacted J&J. He said that he had no knowledge of the article at the time of the sale. Gorsky maintained he followed the required approval process in exercising his stock options. When questioned about his public statements regarding whether J&J talc products are safe, Gorsky said he relied on what he was told by experts and had not extensively reviewed company documents on the issue.

After hearing Gorsky’s testimony, the jury awarded the Plaintiffs a total of $750 million in punitive damages. While this amount was reduced due to a state-law cap on punitive damages, the message to J&J was clear.

The Plaintiffs are represented by Moshe Maimon of Levy Konigsberg LLP, Chris J. Panatier of Simon Greenstone Panatier PC, and Christopher M. Placitella of Cohen Placitella & Roth PC. The cases are Barden et al. v. Brenntag North America et al., (case number L-1809-17) Etheridge et al. v. Brenntag North America et al., (case number L-0932-17) McNeill-George v. Brenntag North America et al., (case number L-7049-16) and Ronning et al. v. Brenntag North America et al., (case number L-6040-17) in the Superior Court of the State of New Jersey, County of Middlesex.

Sources: Law360.com and www.fiercepharma.com

FDA Considers Testing Standards For Asbestos In Cosmetic Talc

For the first time in nearly 50 years, the Food and Drug Administration (FDA) is weighing testing standards for asbestos in talc-based cosmetics, like Johnson & Johnson’s iconic baby power, which has been the subject of thousands of lawsuits that claim the company’s talcum powder is contaminated with asbestos and other harmful particles that caused consumers to develop ovarian cancer and mesothelioma.

The announcement came last month after the FDA held a public forum to discuss and obtain scientific information on testing for asbestos in talc-based cosmetics. During the meeting, nearly two dozen public health officials and individuals representing consumers who developed cancer after extended use of talcum powder products urged the FDA to bolster its requirements to ensure consistency in testing talc-based products for asbestos and other harmful particles.

The public forum featured speakers from the National Women’s Health Network, Asbestos Disease Awareness Organization, the National Center for Health Research, and the Environmental Working Group.

Also, among the presenters was Beasley Allen lawyer Leigh O’Dell, who serves as the co-lead counsel representing Plaintiffs in the federal ovarian cancer multidistrict litigation (MDL); and two Beasley Allen clients, Marvin Salter, whose mother, Jacqueline Fox, died from ovarian cancer after decades of using talcum powder, and Deborah Giannecchini, who used Johnson’s Baby Powder for feminine hygiene for more than 40 years before being diagnosed with ovarian cancer at age 59.

Leigh implored agency officials to update testing protocols on talc-containing cosmetics to utilize transmission electron microscopy and other more accurate and sensitive tests that can better detect microscopic asbestos fibers in cosmetic talc as well as similar carcinogens. Asbestos is a known carcinogen, but fibrous talc “is a deleterious, cancer-causing elongated mineral that should be included in all testing protocols.”

Johnson & Johnson has long defended its talc, alleging it is safe for consumers despite evidence that the company knew for decades that its talc could become contaminated with cancer-causing asbestos. In October, Johnson & Johnson issued a recall of some of its baby powder after FDA testing revealed traces of asbestos in some bottles of Johnson’s Baby Powder.

The FDA said it will consider the concerns raised by Leigh and the others who spoke or provided input during the public forum before making any formal decisions. A final report is expected from the FDA later this year.

Source: FDA

AN UPDATE ON THE OPIOID LITIGATION

New Netflix Documentary Examines The Opioid Epidemic

Netflix has released a new true crime documentary series centered on a pharmacist’s journey to seek justice for his son and others affected by the opioid crisis. The Pharmacist follows the story of Dan Schneider, a small-town pharmacist from Poydras, Louisiana, who attempts to track the man who killed his son during a drug-related shooting in New Orleans. Schneider said:

At first, my mission was to get justice for my son, but I started noticing in the drug store a lot of kids around my son’s age coming in with high-powered opioid prescriptions for OxyContin.

Schneider noticed patients, who didn’t seem to be in much pain when coming in, filling OxyContin prescriptions far bigger than normal, and always from the same doctor, Dr. Jacqueline Clegget. Schneider says he didn’t have to do much “sleuthing” to figure out that the doctor was running a pill mill, writing prescriptions to addicts for a few hundred dollars each. While the federal government was already on the case before Schneider figured it all out, it was Schneider, not the federal government, who ended up producing the key evidence and testimony that shut down Dr. Clegget.

While the first portion of the documentary-series features Schneider trying to bring down his son’s killer and Dr. Clegget, The Pharmacist revealed that at the heart of this massive problem was the pharmaceutical industry, with the documentary finally focusing on Purdue Pharma.

The documentary series takes a dive into the malevolent sales tactics, corporate greed, the intentional normalization of addictive prescription drugs, and the fallout from such actions by Purdue. Drug Enforcement Administration (DEA) Diversion Investigator Iris Myers even provides a commentary about how OxyContin led to heroin, and how heroin led to the modern-day fentanyl epidemic.

The story is wrapped up by touching on today’s efforts to deliver justice to pharmaceutical manufacturers and distributors. At the end, Schneider’s story represents just one in the national opioid crisis, as millions of people have been touched by this issue.

Ultimately, The Pharmacist, through one man’s journey to find answers, sheds light on the severity of the national opioid crisis and its source, greed-driven pharmaceutical companies.

Sources: Time.com, Screenrant.com and Pharmacytimes.com

Mallinckrodt Settles Opioid Suits for $1.6 Billion

Mallinckrodt has reached a $1.6 billion settlement in opioid litigation brought by state and local governments. The company is the latest drugmaker to settle claims that it helped fuel the epidemic of painkiller addiction.

The U.K.-based pharmaceutical company will pay $1.6 billion over eight years under the settlement reached in principle with the Plaintiffs’ Executive Committee. This committee represents local governments in the multidistrict litigation (MDL) over allegations the drugmaker contributed to the opioid crisis with reckless sales of painkillers and by downplaying the drugs’ addiction risks.

Mallinckrodt’s specialty generics units, including Mallinckrodt LLC and SpecGx LLC, will help facilitate the settlement through Chapter 11 filings, the company said. Mark Trudeau, president and CEO of Mallinckrodt, said in a statement:

Reaching this agreement in principle for a global opioid resolution and the associated debt refinancing activities announced today are important steps toward resolving the uncertainties in our business related to the opioid litigation.

The settlement, which will resolve all the cases against Mallinckrodt, is the latest instance of an opioid manufacturer settling cases in the federal opioid litigation. Purdue Pharma LP and its owners, the Sackler family, reached a tentative deal in September to settle roughly 2,000 opioid suits, with the Sacklers agreeing to pay $3 billion from their own fortune. In the lead-up to the first bellwether case in Ohio, Mallinckrodt was among the first companies to agree in September to resolve individual claims from two Ohio counties by paying $24 million and donating up to $6 million in generic drugs.

Lawyers for the Plaintiffs secured several multimillion-dollar settlements, including settling with Johnson & Johnson for $20.4 million and with Endo Pharmaceuticals Inc. for $10 million, with the remaining Defendants agreeing to a $260 million settlement hours before opening arguments in October, with total recovery reaching $325 million in the case.

Cuyahoga and Summit counties are seeking several billion dollars to cope with the opioid epidemic’s effects on their health care systems, law enforcement and economies, a major test for the approximately 2,000 other cases in the MDL.

Purdue in March also paid $270 million to exit the Oklahoma attorney general’s suit over the opioid crisis, which is not part of the MDL. After Teva Pharmaceutical Industries Ltd. settled before trial for $85 million, Johnson & Johnson was the lone defendant left standing and was ordered by a judge on Aug. 26 to pay $572 million after the judge found it had caused the opioid crisis in the state.

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

Opioid MDL Negotiation Class Criticized

We have previously discussed the “negotiation class” that was created by Judge Dan Aaron Polster and intended to help resolve the opioid multidistrict litigation (MDL). Interestingly, drug distributors, cities, counties and now the states are opposing the novel concept. The gist of the arguments expressed to the Sixth Circuit Court of Appeals is that this unprecedented approach disregards class action procedures. Basically the opposition is that Rule 23 does not allow this concept.

At this junction, oral argument in the dispute before the Appeals Court has not been scheduled. We represent the states of Alabama and Georgia and our cases are in state court. It will be interesting to see what happens in the Sixth Circuit.

Source: Law360.com

Sixth Circuit Halts Nationwide Discovery In Opioid MDL

On Feb. 13 the Sixth Circuit Court of Appeals staged nationwide discovery in the opioid multidistrict litigation (MDL). The panel will consider a petition by pharmacies that contends U.S. District Judge Dan Aaron Polster ignored federal court rules. In an order, a three-judge panel partially granted a request by pharmacies for an emergency stay, putting a stop to Judge Polster’s December discovery order that would force the pharmacies to produce 14 years’ worth of nationwide opioid prescription records.

However, the appeals court did allow discovery on data collection related to the state of Ohio as two counties in the state prepare for bellwether trials against the pharmacies. The panel wrote:

Upon consideration of the relevant factors, we are not persuaded that such a limitation on transaction-related distribution data for Ohio is warranted. The burden imposed by producing such data is not so onerous as to justify a stay.

The order is the latest development in the multidistrict litigation before Judge Polster over the opioid epidemic. The latest dispute between two Ohio counties – Cuyahoga County and Summit County – and the pharmacies is heading to trial in November 2020. Judge Polster’s December nationwide discovery order required the pharmacies to produce records going back to 2006 that show how many customers obtained opioids from them and what safeguards were in place to ensure those prescriptions were legitimate, medically necessary and complied with the Controlled Substances Act, among other things.

The panel also gave the counties 15 days to respond to the mandamus petition. Judge Polster has submitted a response to the petition and what he says appears to have merit.

The Plaintiffs are represented by Paul J. Hanly Jr. of Simmons Hanly Conroy, Joseph F. Rice and Linda Singer of Motley Rice LLC, Paul T. Farrell Jr. of Greene Ketchum LLP, Peter H. Weinberger of Spangenberg Shibley & Liber, and Hunter J. Shkolnik of Napoli Shkolnik.

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. The appeal is 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

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 a href=”mailto:Rhon.Jones@beasleyallen.com”>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.

COURT WATCH

The U.S. Supreme Court’s Decision On Ford’s Jurisdictional Challenge Could Have Lasting Impact On The Rights Of Alabama Citizens And Businesses

As reported last month, the U.S. Supreme Court recently agreed to hear two cases involving jurisdiction over Ford in the states of Montana and Minnesota. In both of these cases, the Plaintiffs were injured by defects in Ford’s cars and filed their suits in the state where the accidents occurred. The cars at issue were manufactured, designed, and originally sold outside the forum state. Ford did not dispute the quality and quantity of its contacts with those states. Instead, Ford argued that since the Plaintiffs’ cars were not purchased brand new in those states, then Ford’s in-state contacts did not “cause” Plaintiffs’ claims.

Both the Montana and Minnesota Supreme Courts rejected Ford’s “causation” argument. For instance, the Minnesota Supreme Court reasoned that jurisdiction should be determined by looking at the totality of Ford’s contacts and not on any one individual contact. The Court found it significant that Ford had sold thousands of cars exactly like the one that injured the Plaintiff in Minnesota; that Ford directed marketing and advertising directly at Minnesotans; that a Minnesotan bought a Ford vehicle that did not live up to Ford’s safety claims; and that a Minnesotan was injured by a Ford vehicle in Minnesota. Bandemer v. Ford Motor Co., 931 N.W.2d 744, 753–54 (Minn. 2019), cert. granted, No. 19-369, 2020 WL 254152 (U.S. Jan. 17, 2020).

Likewise, the Montana Supreme Court noted, “At its core, due process is concerned with fairness and reasonableness: Is it fair and reasonable to ask an out-of-state Defendant to defend a specific lawsuit in Montana?” After looking at Ford’s numerous contacts with Montana, the Court concluded that it would be both fair and reasonable for Ford to defend a lawsuit involving an injury caused by its defective products in Montana:

Companies build vehicles specifically for interstate travel. Irrespective of where a company initially designed, manufactured, or first sold a vehicle, it is fair to say that a company designing, manufacturing, and selling vehicles can reasonably foresee (even expect) its vehicles to cross state lines. When a company engages in the design, manufacture, and distribution of products specifically designed for interstate travel, it is both fair and reasonable to require the company to defend a lawsuit in a state where the product caused injury as long as the company has otherwise purposefully availed itself of the privilege of doing business in that state and if a nexus exists between the product and the defendant’s in-state activity. Where a company first designed, manufactured, or sold a vehicle is immaterial to the personal jurisdiction inquiry, and focusing on those limited factors would unduly restrict courts of this state from exercising specific personal jurisdiction that comports with due process over nonresident Defendants in cases such as this one.

Ford Motor Co. v. Montana Eighth Judicial Dist. Court, 2019 MT 115, ¶ 21, 395 Mont. 478, 490–91, 443 P.3d 407, 416, cert. granted sub nom. Ford Motor Co. v. Mt Eighth Dist. Court, No. 19-368, 2020 WL 254155 (U.S. Jan. 17, 2020)

Not happy with these rulings, Ford is now asking the U.S. Supreme Court to rule that lawsuits may only be brought in the state where Ford is either headquartered (i.e. Michigan) or where a Plaintiff can prove that a specific in-state contact caused the Plaintiff’s claim. If the U.S. Supreme Court sides with Ford on this issue, it will have a lasting impact on the rights of Alabama citizens and businesses. Consider the following:

  • First, most Plaintiffs would have to make a choice to either sue Ford in Michigan or not to sue them at all due to the costs of such litigation. This defeats Alabama’s long-standing public policy of protecting its citizens from defective products and allows manufacturers to escape the consequences of its actions – especially when its actions hurt those with limited resources.
  • Second, if Plaintiffs cannot sue the manufacturers who put defective products in our State, Medicaid, Medicare and employers will not be able to recoup the money they pay to treat injuries caused by defective products. The State and local business will bear the brunt of the immunity afforded to such manufacturers through new jurisdictional restrictions.
  • Third, Michigan and Delaware judges will decide Alabama law and public policy since this is where most major corporations are formed. This can result in inconsistent, and sometimes incorrect, interpretations of our law. This interferes with our State’s ability to determine and enforce our own laws against manufacturers who send defective products to Alabama.
  • Fourth, any holding in favor of Ford would apply to all domestic and foreign manufacturers who will now argue that no matter how much business they do in Alabama, they cannot be sued here. This might encourage manufacturers to stop building plants in any U.S. state other than the one they are already headquartered in. This would drastically decrease their risk of lawsuits if Plaintiffs are forced to sue in-state Defendants here and then pursue a second action where the manufacturer is headquartered. This would slow or even stop the progress our State has seen in attracting manufacturing business.
  • Finally, innocent car dealers and other retailers might be on the hook for product liability claims under innocent seller statues across the country. Some States, like Illinois and Missouri, have statutes that allow Plaintiffs to sue sellers of products for product defects if the Court does not have jurisdiction over the manufacturer. These types of statutes ensure that Plaintiffs will have at least one defendant to pursue a claim against. Likewise, Alabama has an innocent seller statute that has protected dealers. However, if the U.S. Supreme Court continues to restrict jurisdiction over manufacturers, Plaintiffs may be forced to pursue product liability claims against Alabama retailers. Manufacturers should bear the consequences of their dangerous products – not Alabama businesses.

Hopefully, the U.S. Supreme Court will recognize the far-reaching practical and economical effects its ruling could have on the rights of citizens and small businesses. We expect an opinion in this case in early summer. We will keep our readers updated on any rulings on this issue. If you have any further questions involving personal jurisdiction, contact Stephanie Monplaisir, a lawyer in our Personal Injury & Products Liability Section at 800-898-2034 or by email at Stephanie.Monplaisir@beasleyallen.com. Stephanie has been working on the issue presented in the Ford appeal in other cases. She will be glad to discuss the Ford appeal with you.

LEGISLATIVE UPATE

The Legislative Session In Alabama

The 2020 Legislative Session began Feb. 4 and the legislators just completed their fourth week at the writing of this update. More than 440 bills have been filed by lawmakers in the two chambers.

Recently filed bills include changes to homestead exemptions, ad Valorem property taxes and DNA testing in criminal procedures. A bill making another change to the DUI law and one restoring voting rights in certain instances were introduced. A bill proposing legalizing medical marijuana introduced and one relating to occupational taxes received significant attention in the news cycles between the second and third weeks of the session.

Mayors from 10 of Alabama’s largest municipalities co-signed an open letter to lawmakers opposing the bill that would require cities to get legislative approval before implementing new occupational taxes. The mayors called the bill an “assault on local governance” and that “[n]o municipal official desires to irresponsibly raise taxes.”

Working with the Montgomery City Council, Montgomery, Alabama’s, new mayor, Steven Reed, championed the successful passage of an occupational tax in the Capital City. If the bill does not receive final passage, Montgomery’s occupational tax will go into effect next year.

During the third week of the session, lawmakers began debating criminal justice reform as part of a larger issue concerning the overcrowding and severe staff shortage of Alabama prisons. The U.S. Department of Justice (DOJ) put the state on notice last year that violent conditions in the state’s prisons are violating inmates’ constitutional rights. A study commissioned by Gov. Kay Ivey and chaired by former Alabama Supreme Court Justice Champ Lyons recommended placing more emphasis on rehabilitation through increased education, training and treatment programs to help ensure reduced recidivism rates. Lawmakers must also address needs for capital improvements for prison facilities across the state.

Prison and criminal justice reforms are just some of the items that will require state funding. Lawmakers, looking to fill budget holes and increase state funding for such initiatives, consistently propose some type of lottery or other gambling measure. In her State of the State at the start of the session, Gov. Ivey encouraged lawmakers to slow down on bills of this nature and within days she signed Executive Order 179 forming the Study Group for Gambling Policy.

Gov. Ivey tasked the group, which will be led by former City of Montgomery Mayor Todd Strange, to gather information about potentially expanding gambling in the state for the purpose of increasing state funds. Gov. Ivey explained that Alabama citizens will make the final decision on such an expansion by voting on a constitutional amendment, but she believes that “once and for all,” she and the voters should be better informed on the issue. The group must submit a final report to the Governor and the Legislature no later than Dec. 31, 2020.

While lawmakers have not begun debate on the state’s budgets, the Alabama House approved a proposed change to teacher retirement benefits. House members recognized that improving retirement benefits could help attract and retain classroom teachers with the intent of addressing the teacher shortage Alabama is facing. The bill will undo some of the changes that lawmakers enacted in 2013 out of fear that the long-term cost of pension benefits was too high. The Senate will consider the proposal next and, if approved, lawmakers must figure out how to pay for it along with other budget requests including those from Gov. Ivey. She told lawmakers during her State of the State address that her agenda includes a $1 billion bond issue for K-12, community college and university construction projects along with a 3% raise for K-12 and community college teachers. She is also asking for a 2% pay raise for state employees.

Other bills of interest that were introduced last month include several bills relating to elder abuse and the protection of seniors. Two Alabama Law Institute bills were also introduced – one would revise the business code regarding nonprofit entities and the other a non-disparagement obligations act. The interim judge bill passed out of committee while a bill addressing deferred presentments failed to pass out of committee.

Sources: Alabama State Bar, AL.com, Alabama Political Reporter and BamaPolitics.com

AN UPDATE ON THE WHISTLEBLOWER LITIGATION

DOJ Spotlights Main FCA Target Areas For 2020

A high-ranking official at the U.S. Department of Justice (DOJ) on Feb. 27 revealed the three top target areas for False Claims Act (FCA) enforcement in 2020. The DOJ’s current thinking on government efforts was described in a speech by Jody Hunt, Assistant Attorney General for the DOJ’s Civil Division. One observation was that the DOJ will cull disfavored cases and reward cooperative Defendants. He delivered the wide-ranging insights during a keynote speech at the Federal Bar Association’s annual Qui Tam Conference in Washington, D.C.

Much of Hunt’s speech focused on three areas of concern: nursing homes, Medicare Advantage and electronic health records. Those areas are where DOJ officials intend to focus their resources and it appears there will be “an increasing number of cases in the coming year.”

Hunt spoke with conspicuous zeal about enforcement related to negligent and shoddy care and fraudulent billing involving nursing homes. This is a good reason for an emphasis on the nursing home industry based on what Beasley Allen lawyers have experienced.

On the subject of Medicare Advantage – which the government pays more than $200 billion for annually – Hunt said that the DOJ “is investigating and litigating a growing number of matters.” He focused largely on the practice of Medicare Advantage insurers bending over backward to bill the government for every possible patient diagnosis while simultaneously failing to tell the government about erroneous diagnoses that shouldn’t have been reimbursed.

With respect to electronic health records (EHRs) Hunt alluded to a recent $145 million resolution involving FCA penalties and criminal fines stemming from the use of EHRs to steer physicians toward prescribing a drugmaker’s opioid painkillers. Hunt said:

Given the critical and growing role that electronic health records play in our health care system today, we are expecting and anticipating … more of these cases in the future.

Hunt’s laser-focus on health care issues should not have come as a surprise. That’s because the vast majority of FCA dollars come from cases involving Medicare and Medicaid. During his speech, Hunt also addressed the so-called “Granston memo,” a DOJ directive from January 2018 that unleashed stronger efforts to weed out FCA suits that conflict with “government prerogatives.” The DOJ has faced criticism from longtime FCA champion Sen. Chuck Grassley, R-Iowa, for derailing whistleblower cases. Hunt attempted in his speech to tamp down concerns.

The Assistant Attorney General insisted that the government “will not dismiss an otherwise potentially meritorious case solely because it will require the government to expend resources.” Hopefully, that is the policy of the DOJ in FCA litigation.

Hunt also reiterated the DOJ’s willingness to show leniency toward companies that cooperate with FCA investigations. He codified guidance in May on so-called cooperation credit in the DOJ’s Justice Manual, and he emphasized that “maximum cooperation” can be rewarded with settlements only slightly larger than actual damages sustained by taxpayers.

Source: Law360.com

ResMed Corp Agrees To Pay The United States $37.5 Million

Recently ResMed Corp. agreed to pay more than $37.5 million to settle alleged False Claims Act (FCA) violations for paying kickbacks to durable medical equipment (DME) suppliers, sleep labs, and other health care providers, in violation of the Anti-Kickback Statute. The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.

The Department of Justice (DOJ) alleged in the complaint that ResMed did the following:

  • provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea,
  • provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines,
  • arranged for, and fully guaranteed the payments due on, interest-free loans that DME supplies acquired from third-party financial institutions for the purchase of ResMed equipment, and
  • provided non-sleep specialist physicians free home sleep testing devices referred to as “ApneaLink.”

The settlement resolves five lawsuits brought by whistleblowers under the qui tam provisions of the FCA. As we have previously stated, the FCA allows private individuals with knowledge of fraud against the government to bring a lawsuit on behalf of the government and to share in the recovery. These whistleblowers will collectively receive an estimated $6.2 million.

Jody Hunt, an Assistant Attorney General in the Department of Justice’s Civil Division, in a statement, said:

Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system. When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on unlawful payments from equipment manufacturers.

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, contact a lawyer at Beasley Allen on the firm’s whistleblower litigation team for a free and confidential evaluation of your claim.

The Beasley Allen Whistleblower Litigation Team

We have a Whistleblower Litigation Team in place to handle FCA claims. This is due to our firm’s heavy involvement in the whistleblower litigation. Fraud against the federal government continues to be a huge problem, involving many industries in this country. Beasley Allen lawyers Lance Gould, Larry Golston, Paul Evans, Leslie Pescia, Leon Hampton, Tyner Helms and Lauren Miles are working in this area of law known as “qui tam” cases. They make up the Whistleblower Litigation Team.

As we have consistently stated, whistleblowers are the key to exposing corporate wrongdoing and government fraud. A person who has first-hand knowledge of fraud or other wrongdoing may have a whistleblower case. Before you report suspected fraud or other wrongdoing – before you “blow the whistle” – it is important to make sure you have a valid claim and that you are prepared for what lies ahead. Beasley Allen has an experienced group of lawyers dedicated to handling whistleblower cases.

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, contact a lawyer at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on the firm’s website ( www.beasleyallen.com).

A lawyer on our Whistleblower Litigation Team will be glad to discuss any potential whistleblower claim with you either in person or by phone. You can reach these lawyers 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.

PRODUCT LIABILITY AND PERSONAL INJURY LITIGATION

Update On Products Liability Litigation At Beasley Allen

Lawyers in our firm’s Personal Injury & Product Liability Section handle cases involving catastrophic injuries and deaths arising out of any type of accident, including car crashes, 18-wheeler accidents, industrial accidents and workplace accidents. Potential product liability claims are often overlooked by some lawyers when investigating what many view as routine accidents. In many motor vehicle crashes, some defect – either design or manufacturing – played a major role in causing the accident.

A product liability claim focuses on whether or not the product is defective. An entire product may be defective, or it may be that a component part of the product contains the defect. The product may well contain design, manufacturing, or warning defects. In some cases, it will be a combination of these problems.

Personal Injury claims that involve defective products include aviation litigation, heavy truck litigation, automobile accidents and premises and workplace accidents.

Below are just a few of the types of cases our firm handles on a regular basis. We will have a more complete listing in the current case activity section of this issue. There will be some duplications.

Heavy Trucking Accidents

There are significant differences between handling an interstate trucking case and other car wreck cases. It is imperative to have knowledge of the Federal Motor Carrier Safety Regulations, technology, business practices, insurance coverages, and to have the ability to discover written and electronic records. Expert testimony is of utmost importance. Accidents involving semi-trucks and passenger vehicles often result in serious injuries and wrongful death. Trucking companies and their insurance companies almost always quickly send accident investigators to the scene of a truck accident to begin working to limit their liability in these situations.

Chris Glover, a lawyer in the firm’s Product Liability & Personal Injury Section, has represented numerous folks who have been seriously injured or lost a family member as a result of the wrongful conduct of a trucking company. For more information, contact Chris Glover, Cole Portis, or Rob Register at 800-898-2034 or by email at Chris.Glover@beasleyallen.com, Cole.Portis@beasleyallen.com, and Rob.Register@beasleyallen.com.

Tire Defects

Tire failure can result in a serious car crash causing serious injury or death to the car’s occupants. Air, heat and sunlight can cause the rubber in tires to break down. When a tire is defective, potentially serious problems like detreads and blowouts can occur long before the tire would be expected to wear out. If the tire failure is the result of design or manufacturing defects, and the manufacturer is aware of the problem, they have an obligation to alert consumers to the potential danger.

One serious problem with tires is that they wear down on the inside as they age, but they look brand new on the outside. Despite the dangers of tire aging, the National Highway Traffic Safety Administration (NHTSA) has still refused to establish a tire aging standard. A tire aging standard would make it easier for consumers to determine the tire’s age. Right now, the only way to determine the age of a tire is to decipher the cryptic code on the tire’s sidewall. Also, a tire aging standard would make it mandatory for tire centers to take tires out of service at a specified date, regardless of what the tire looks like on the outside.

Our lawyers are also seeing a huge influx of defectively designed tires from China. As more and more of the products we buy, including tires, are being made in China and other foreign countries, the “importers” role is becoming more critical because it is becoming increasingly difficult to obtain jurisdiction over these foreign entities. In too many instances, “importers” are not taking the appropriate steps to assure that foreign tire makers’ tires are safe, despite the NHTSA standards requiring them to do so.

Under Federal law, “importers” must take steps to assure that the tires they import are free of defects. Good manufacturing processes require “importers” to conduct on-site inspection(s) of a foreign tire makers’ facilities to assure that adequate testing, manufacturing, quality control and other measures are in place. Further, “importers,” once they import tires into this country, should perform random sampling, testing and inspection of foreign tires before they distribute and/or sell the tires to consumers in this country.

In one recent case, we learned that while a company was importing more than 400,000 tires a month it was doing nothing to ensure that the Chinese tires it imported, sold and profited from, were safe. The importer never inspected the manufacturing plant, never observed any tire testing and never checked to see if the Chinese manufacturer employed any quality control measures for its tires and plants. Further, the importer never performed one post “import” inspection, test and/or took any other step relative to one single tire it sold despite the Federal requirements to do so. This conduct is particularly troubling when you consider how important tires are to our safety. Companies that import tires, or any product for that matter, should be held accountable when they do nothing to ensure these products are safe for American consumers. Our Product Liability Section has pursued numerous claims against both tire manufacturers and importers of the defective Chinese tires.

Beasley Allen lawyer Ben Baker has written a book providing helpful information about evaluating a case for defective tires. Tire Litigation: A Primer is available free to lawyers. The purpose of the book is to provide lawyers with a guidebook to evaluating tire litigation. Order a hard copy or download a digital copy at beasleyallen.com/publishing. If you have questions regarding a potential tire case, please contact LaBarron Boone or Ben Baker at 800-898-2034 or by email at LaBarron.Boone@beasleyallen.com or Ben.Baker@beasleyallen.com.

Fuel Fed Fires

Almost everyone remembers the infamous Ford Pinto. The Pinto had a fuel tank mounted behind the rear axle. This position allowed for dangerous, and often explosive, consequences in rear impact accidents. Similarly, there are vehicles with gas tanks mounted on the sides of the vehicle outside the structure of the frame. These “sidesaddle” tanks also leave the vehicle vulnerable to impact in a collision. The overall safest positioning of a gas tank is between the front and rear axles of the vehicle. However, manufacturers didn’t always follow this guideline and many vehicles do not provide the proper structural protection for the tank. Collisions with these vehicles can lead to fuel-fed fires.

Also, it is not always the location of the fuel tanks that can lead to fuel fed fires. Design defects related to fuel fed fires can involve several different vehicle systems. The design issues can relate to issues of fuel filler cap design, fuel line design, fuel tank design, and also include fuel pump design. Fuel systems should be designed to maintain their integrity during reasonably foreseeable accidents so that occupants do not lose their lives in otherwise survivable accidents. If the occupants can survive crash forces without serious injury, so should the fuel system.

If you would like more information regarding fuel fed fire cases, contact Mike Andrews and Graham Esdale at 800-898-2034 or by email at Mike.Andrews@beasleyallen.com, and Graham.Esdale@beasleyallen.com.

Rollover and Stability Issues

Some sport utility vehicles (SUVs) and 15-passenger vans, often used to transport school children, church groups, and sports teams, may be prone to rollover due to their high center of gravity and narrow track width. After a driver makes an avoidance maneuver, he should be able to regain control of his vehicle or the vehicle should “slide out” on the road without rolling over. A vehicle should not roll over because of friction forces alone. A vehicle should not rollover on dry flat pavement. When a vehicle rolls over on dry, flat pavement more likely than not it is due to a defect in the design of the vehicle’s handling and stability.

Recently, a jury in Dallas County, Alabama found Ford Motor Company at fault for a rollover crash of a 1998 Ford Explorer that left Travaris “Tre” Smith paralyzed. The jury awarded Tre $151,791,000, which consisted of $51,791,000 in compensatory damages and $100 million in punitive damages. The jury found that Ford failed to meet its own safety guidelines for the Explorer’s rollover resistance requirement and attempted to cover up the vehicle’s defective design. Beasley Allen lawyers LaBarron Boone, Kendall Dunson and Greg Allen, along with Bill Gamble of the Selma firm of Gamble, Gamble, Calame and Jones, LLC handled the case.

If you would like more information regarding the handling and stability of a vehicle, contact Greg Allen or Cole Portis at 800-898-2034 or by email at Greg.Allen@beasleyallen.com or Cole.Portis@beasleyallen.com.

Roof Crush

To protect occupants in a rollover, maintaining survival space is very important. Survival space is the space around an occupant that remains free of intrusion in an accident. It is the area in which an occupant is able to “survive” the crash. A roof is part of the structural support of a vehicle and is therefore a critical component in keeping the occupant safe. If a roof crushes substantially during an accident, from a failure of the side rails, headers or support pillars, catastrophic injuries can occur. Often, this decreased survival space results in the occupant’s head impacting some portion of the vehicle causing death, paralysis or brain damage. Sometimes, the occupant can even be partially ejected through an opening created during roof crush.

For more information on roof crush cases, contact Ben Baker, Evan Allen or Graham Esdale at 800-898-2034 or by email at Ben.Baker@beasleyallen.com, Evan.Allen@beasleyallen.com or Graham.Esdale@beasleyallen.com.

Seat Belt Malfunctions

There are thought to be two collisions in an auto accident. The first collision is the vehicle’s impact with another vehicle or object. The second collision is the passenger’s impact with the interior of the vehicle, or in cases of ejection, impact outside the vehicle. Seat belt injuries can occur when a defective seat belt fails to adequately protect a vehicle passenger in the “second collision” phase of an automobile accident. The purpose of a seat belt is to minimize the injuries and damage caused in a second collision by reducing or eliminating injurious occupant contact with the vehicle’s interior. Seat belt injuries often occur when there is a seat belt design, production, or installation defect. There is a plethora of injuries that may occur as a result of a defective seat belt or from failure of a seat belt: spinal cord injury, brain or head injury, paralysis, internal injuries, amputations, broken bones, concussions and fatalities.

Clark v. General Motors was a product liability action we filed that arose from a single-vehicle rollover crash involving a 1999 Pontiac Grand Am that occurred on February 6, 2008. During the rollover crash, Leanne Clark’s seatbelt opened up. She was ejected from the car. As a result of the seatbelt’s failure to restrain her during the rollover, Ms. Clark is now a paraplegic. Takata designed and manufactured the buckle used in the 1999 Pontiac Grand Am being driven by Ms. Clark at the time of the accident. Takata knew the seatbelt would be used in foreseeable rollover crashes and that the buckle had opened up in other rollover crashes. Despite this knowledge, Takata failed to test the buckle to ensure it would withstand a rollover crash and refuses to implement a system to collect field complaints.

If you need more information about seatbelt defects, contact Mike Andrew or Greg Allen at 800-898-2034 or by email at Mike.Andrews@beasleyallen.com or Greg.Allen@beasleyallen.com.

Airbags

Obviously, if an airbag fails to deploy, there may be an airbag case. However, don’t overlook other airbag claims. Aggressive airbags that deploy at excessive speeds can cause head or neck injuries or other broken bones. Children are especially susceptible to injuries and or death caused by an airbag. Sadly, since the Takata airbag debacle that involved millions of defective airbags, we have noticed a large amount of airbag recalls of the airbags that were sent to replace the Takata ones. In the last two months alone, Volkswagen, BMW, Takata, Subaru, Nissan, Ferrari, GM, Honda, Toyota and Mitsubishi have had to issue airbag recalls, many of the replacement airbags that were installed after the Takata defective airbags had been removed.

If you would like more information regarding airbag cases, contact Chris Glover at 800-898-2034 or by email at Chris.Glover@beasleyallen.com.

Cab Guards and Under Ride Protection

Cab guards or headache racks are required as front-end structures on 18-wheelers that pull flat beds, trailers and log trailers and should function to prevent shifting cargo from contacting the cab of heavy trucks. Many cab guards are designed of welded heat-treated aluminum, which results in a weakening of the cab guard over time. The weakening of the cab guard due to fatigue stress is relatively unknown to drivers. Many welding requirements established by national organizations are not followed by cab guard manufacturers. The failure to follow such guidelines result in poor welds, poor quality control, and poorly designed cab guards for their intended purpose of protecting truck occupants.

An under-ride protection device extends below the trailer in order to prevent an automobile from riding under the trailer in the event of a rear impact. Many heavy trucks and/or trailers are defectively designed in that the vehicles do not have proper under ride protection devices. When a vehicle is allowed to under ride a heavy truck trailer, it results in severe injuries to vehicle occupants since passenger cars are substantially lower than the bed of heavy truck trailers. When appropriate under ride guards are in place, vehicles are prevented from under riding these trailers and severe injuries that occur in foreseeable rear end collisions are substantially reduced.

If you would like more information regarding cab guards or under ride protection, contact Ben Baker or LaBarron Boone at 800-898-2034 or by email at Ben.Baker@beasleyallen.com or Labarron.Boone@beasleyallen.com.

Industrial Accidents and Workplace Defects

Each year, thousands of workers are injured or killed at their workplace. Although a state’s workers’ compensation system places limitations on the ability of employees to hold employers accountable for these work-related injuries, many people do not realize that there may be another available source of recovery. Injuries in the workplace are often caused by defective products, such as a machine where a dangerous nip-point is not properly guarded nor is the employee warned of the dangerous nip-point. If a product causes an on-the-job injury, a product liability suit may be brought against the product’s manufacturer. Catastrophic injuries, deaths, and amputations unfortunately too commonly occur from defective products found in the workplace.

Our firm handles numerous product cases each year that arise in the context of an accident that occurred on the job or in the workplace. If you have any questions about accidents in the workplace, contact Kendall Dunson, Evan Allen or Ben Locklar at 800-898-2034 or by email at Kendall.Dunson@beasleyallen.com, Evan.Allen@beasleyallen.com or Ben.Locklar@beasleyallen.com..

Aviation Accidents

Soaring through the sky at hundreds of miles an hour, thousands of feet above the ground in an aircraft leaves little room for error. One small mechanical problem, misjudgment or faulty response in the air can spell disaster for air passengers and even unsuspecting people on the ground. This is why it’s crucial for the aviation industry, including manufacturers, pilots, mechanics and air traffic controllers, to adhere to the highest possible standards at all times.

Statistics indicate mechanical failures cause up to 22 percent of aviation crashes. Historically, aircraft manufacturing defects, flawed aircraft design, inadequate warning systems and inadequate instructions for safe use of the aircraft’s equipment or systems have contributed to numerous aviation crashes. In such cases, the pilot may follow every procedure correctly but still be unable to avert disaster. Mike Andrews, a lawyer in our firm’s Personal Injury & Products Liability Section, has handled numerous cases involving defects found in aircrafts. Mike has been actively involved in the Boeing cases and represents families of those who died needlessly in the Boeing crashes. You can reach Mike or Cole Portis at 800-898-2034 or by email at Mike.Andrews@beasleyallen.com or Cole.Portis@beasleyallen.com.

Non-Auto Product Defects

Our lawyers in the Section also handle defective products, including smoke detectors, flammable clothing, industrial equipment, and heaters just to name a few. Most of the time, family members do not suspect that a defective product is the cause of a death or injury, and manufacturers readily blame the victim’s actions. Our firm has discovered that defective products are increasingly a major cause of unexpected deaths and injuries. If you have any questions about non-auto product defects, contact Parker Miller, Rob Register or Donovan Potter at 800-898-2034 or by email at Parker.Miller@beasleyallen.com, Rob.Register@beasleyallen.com or Donovan.Potter@beasleyallen.com.

Premises Liability Litigation

Premises Liability Cases can involve claims arising out of falls caused by a foreign substance on the premises, falls caused by a part of the premises, as well as injuries caused by falling items. Specifically, in a case involving a foreign substance on a floor, a Plaintiff must establish that the foreign substance caused the fall and that the Defendant premises owner had notice or should have had notice of the substance at the time of the accident.

The law is different when injuries are caused by part of the premises which is in a dangerous condition, such as part of a doorway, curb, or stairs, or where the injury is caused by a display created by a store employee.

In situations where the injury is caused by part of the premises or a display that was set up by the store, proof of notice is not a prerequisite, but the Plaintiff must still prove the injury was caused by a defective or dangerous condition. Injuries caused by falling objects most often involve items falling from displays that are either part of the premises or were set up by the store. If the falling object is the result of a display set up by the store or some part of the premises falling, then the customer does not have to prove notice.

Mike Crow and Ben Locklar in our Section have extensive experience in handling premises liability cases. If you need any guidance or have any questions, contact Mike Crow or Ben Locklar at 800-898-2034 or by email at Mike.Crow@beasleyallen.com or Ben.Locklar@beasleyallen.com.

If you have any questions, need more information or want to discuss a potential case in any of the categories set out above, contact Sloan Downes, Director of the Section, at 800-898-2034 or by email at Sloan.Downes@beasleyallen.com. She will put you in touch with a lawyer. The lawyers in the Section are Cole Portis, who heads the Section, Greg Allen, Mike Crow, Graham Esdale, LaBarron Boone, Dana Taunton, Ben Baker, Kendall Dunson, Mike Andrews, Ben Locklar, Chris Glover, Parker Miller, Evan Allen, Stephanie Monplaisir, Rob Register, Donovan Potter, Warner Hornsby, Ben Keen, and Dan Philyaw.

AN UPDATE ON THE JUUL LITIGATION

Vaping-Related Deaths In U.S. Rise To 64

The death toll from vaping injuries rose to 64 in the beginning of February after an outbreak nationally of “e-cigarette, or vaping product use-associated lung injury,” also referred to as EVALI. At the beginning of 2020, the number stood at 57; however, within a month, seven more deaths have been reported as well as 156 more hospitalizations in the United States per the Centers for Disease Control and Prevention (CDC). The CDC reports that while the numbers are high, and notably growing, there is a recent downward trend in incidents compared to August of 2019.

It is believed that one of the leading causes of this vaping illness is Vitamin E acetate, primarily used in marijuana vape cartridges. While the CDC is investigating this substance as a “chemical of concern,” the organization has asked that it not be added to any future vape products. The CDC has also cautioned users to be aware of the presence of this substance in any vape and to avoid it if at all possible.

The CDC has noted that there is not sufficient evidence to rule out other substances as contributing factors, and merely advises against the particular Vitamin E substance until further notice. The CDC hopes to identify the leading cause so as to end this recent outbreak of EVALI.

Beasley Allen lawyers are investigating injuries related to JUUL products, including seizures and respiratory problems. For more information, contact Sydney Everett or Melissa Prickett at 800-898-2034, or by email at Sydney.Everett@BeasleyAllen.com or Melissa.Prickett@BeasleyAllen.com.

Source: CDC.Gov

Southampton Union Free School District Sues JUUL

Lawyers at Beasley Allen have filed a lawsuit on behalf of the Southampton Union Free School District (Southampton) against vaping manufacturer JUUL Labs. This is one of many school districts nationwide forced to deal with a widespread vaping epidemic, the result of deceptive marketing by companies like JUUL targeting youth and teens to create the next generation of nicotine addicts. The school district is represented by Andy Birchfield, head of our firm’s Mass Torts Section, and Joseph VanZandt, a lawyer in the Section. Joining with Beasley Allen in his case are Thomas Cartmell, Jonathan Kieffer and Tyler Hudson of Wagstaff & Cartmell LLP, Steven Gacovino of Gacovino, Lake and Associates, P.C., and Kirk Goza and Brad Honnold of Goza & Honnold LLC.

We are honored to represent Southampton School District in New York and dozens of other school districts around the country in their fight to combat the vaping epidemic. Because JUUL has exposed a new generation of children to record levels of nicotine addiction, schools are being uniquely impacted and have been forced to incur a multitude of costs to address this problem and are also faced with the challenge of how to remedy and abate the problem. We’re honored to fight on behalf of courageous schools and administrators to remedy this problem and hold JUUL accountable.

Beasley Allen lawyers filed lawsuits on behalf of other school districts last fall. Similarly, Southampton is also seeking to protect its students and hold the vaping manufacturing giant accountable for diverting resources – time and public funding – from education. Specifically, Southampton wants JUUL to pay for its Teen Intervene program, an in-school vaping intervention program, among other damages. The program provides therapy sessions conducted by in-school addiction specialists to help students who became addicted to the nicotine contained in the products JUUL pedaled to the kids on social media. Dr. Brian Zahn, Principal of Southampton High School, who has been a leader in fighting the vaping epidemic in his school and system, has testified before Congress on this issue. He was recently featured on Good Morning America to share information about the vaping intervention program.

In his statement before Congress, Dr. Zahn called schools a “battlefield” in the fight to free young people from nicotine addiction. He told lawmakers:

I have seen more courage displayed from our young people here at the table, and in my school, than we have from our elected officials. It is time that everyone, Democrats, Republicans, Independents, Conservatives, Moderates, and Liberals join us in this fight to save the brains, the lungs and the future of generations of young people. We stand with you to help end the JUUL epidemic.

Southampton is located on Long Island in Suffolk County, New York. The Plaintiff school district explains that in addition to deceptive marketing geared toward the younger generations and unleashed on social media, JUUL also specifically preyed on school districts. Company representatives used marketing events disguised as “educational” anti-vaping presentations to introduce even more children and youth to its dangerous vaping products. The lawsuit alleges that this has put schools at the “epicenter of the youth vaping epidemic.” Further, the sudden rise in youth vaping is an epidemic that happened so unexpectedly it left school districts like the Plaintiff scrambling to combat the epidemic on a number of different fronts as little or no research exists about the effectiveness of prevention and cessation methods. This diverts even more resources from its primary educational purpose.

The Food and Drug Administration (FDA) issued a warning letter last September outlining JUUL’s deceptive marketing and the steps it took to target schools. The company and its vaping products are also the subject of other government investigations and regulatory actions. The FDA Acting Commissioner said the company “ignored the law” when he described how company representatives made misleading statements about the products’ safety in schools across the country.

Although JUUL wasn’t alone in creating the epidemic, it holds 75% of the vaping market. JUUL has experienced extraordinary financial success at the expense of America’s youth, parents and educators. In 2017 alone, JUUL’s revenues grew by 700% to $200 million, hitting the $1 billion mark the following year. Entrepreneurial endeavors should be applauded but not at the expense of children’s health or by straining parents’ and educators’ own financial resources to deal with the fallout of the epidemic.

The Southampton complaint was filed in the U.S. District Court for the Northern District of California as part of the JUUL multidistrict litigation (case number 19-md-02913-WHO).

JUUL Advertised Vape Products On Digital Media Geared Toward Teens

JUUL Labs paid a company to place its digital ads across a variety of websites, apps, and social media geared toward youth, including educational ones like basic-mathematics.com, mathplayground.com, purplemath.com, and socialstudiesforkids.com; youth game sites like kidsgameheroes.com, games2girls.com, and dailydressupgames.com; and college information sites like collegeconfidential.com, according to allegations in a lawsuit filed against JUUL by the Massachusetts Attorney General.

Around the time JUUL hit the market in 2015, the company prepared to launch a marketing campaign allegedly to convince adult cigarette smokers to switch to vaping. But JUUL rejected a proposal from a company that had designed a series of ads that would appeal to this type of older adult audience by showing outdated technological devices, like video game joy sticks and bulky cellular phones, with the tag lines: “Everything changes eventually,” and “JUUL: The evolution of smoking.”

Instead, the company recruited its in-house art director to produce the “Vaporized” campaign, featuring young, attractive models in provocative poses, and sought to hire celebrities and social media influencers with large followings – the kind of individuals teenagers and tweens look up to and want to emulate.

The tactics worked. JUUL scored by taking over a majority of the growing vape market. Many of those new vapers were underage. The company didn’t even flinch when it received hundreds of orders from consumers who listed high school email addresses. The Attorney General’s lawsuit states:

JUUL allowed more than 1,200 accounts to be established for Massachusetts consumers using school email addresses, including email addresses associated with high schools in Beverly, Malden, and Braintree and shipped its products to recipients with obviously fabricated names, like ‘PodGod.’

Massachusetts is the latest state that has filed a lawsuit against JUUL over its marketing practices, saying it failed to warn consumers that its products contained nicotine, a highly addictive ingredient. Others include Arizona, California, Illinois, Minnesota, Mississippi, New York, North Carolina and Pennsylvania. JUUL also faces lawsuits from school districts across the country for costs associated with diverting funds to deal with nicotine-addicted students.

Source: The New York Times

Lawyers Selected Picked To Lead California Lawsuits Against Juul

Los Angeles Superior Court Judge Ann Jones has appointed a team of 20 attorneys to lead litigation consolidated in California state court against vape device maker Juul on behalf of Plaintiffs. Beasley Allen lawyer Beau Darley was appointed to serve on the Plaintiff Steering Committee.

Nearly 100 cases have been filed so far in the Judicial Council Coordinated Proceeding, or JCCP, which follows a similar process to federal multidistrict litigation (MDL) by consolidating similar legal claims against a common Defendant.

Since JUUL hit the market in 2015, vaping among youth has skyrocketed. The latest numbers from the Centers for Disease Control and Prevention (CDC) show that 28% of high schoolers and 11% of middle schoolers self-report vaping; the actual numbers are likely much higher. That equates to more than 5 million teenagers vaping in 2019, up from 3.6 million in 2018. Most surveyed students admit that JUUL is their preferred vape brand. The U.S. Food and Drug Administration (FDA) and CDC have labeled this as an epidemic among youth and an addiction crisis; both agencies have attributed the rise of vaping among youth to JUUL.

The JUUL litigation is one of the most important and fastest growing litigations in the country and it will play a key role in addressing this public health crisis facing the nation’s youth. Hundreds of lawsuits have already been filed against JUUL on behalf of youth, parents, young adults, and school districts. The number of cases against JUUL is expected to rise significantly in the coming months. This litigation – much like the underlying public health crisis – is complex and urgent, requiring a comprehensive, cooperative, thoughtful, organized and powerful effort by Court-appointed Plaintiff leadership.

Sources: Law360.com and Case Management Order No. 1, Judicial Counsel Coordination Proceeding No. 5052, Superior Court of the State of California – County of Los Angeles.

Five Attorneys General To Lead Multistate Probe Into Juul’s Marketing Tactics

The Attorneys General of Connecticut, Florida, Nevada, Oregon and Texas are now leading a 39-state coalition to investigate the marketing practices of vape products maker Juul Labs Inc. We have written in detail previously about how Juul has marketed the product and that marketing effort has been shameful.

MASS TORTS UPDATE

The Zantac MDL Goes To Florida

Cases alleging that Zantac caused the Plaintiffs to develop cancer have now been consolidated in a multidistrict litigation (MDL). Several of the lawsuits name Glaxo Smith Kline, Pfizer, Sanofi-Aventis and Boehringer Ingelheim as Defendants. These companies have owned the brand name Zantac (Ranitidine) drug at different times.

The Judicial Panel on Multidistrict Litigation (JPML) chose to consolidate the Zantac cases in the Southern District of Florida. U.S. District Judge Robin Rosenberg was selected to handle the litigation over the heartburn medication that is alleged to cause cancer.

At the time the MDL was created there were 23 class actions pending, 111 personal injury cases, two medical monitoring cases, and one third party payer case. The stronger personal injury cases are for cancer of the stomach, small intestine, colorectal, esophageal and liver.

N-nitrosodimethylamine (NDMA) is classified as a probable human carcinogen and has been linked to cancers of the digestive system, including the bladder, esophagus, stomach and kidneys, as well as testicular and uterine cancers. It occurs naturally in the environment and certain food products, but at levels deemed “safe” for limited consumption. The U.S. Food and Drug Administration (FDA) has set the acceptable daily intake limit for NDMA at 0.096 micrograms or 0.32 ppm for ranitidine.

Early investigations of an unsafe level of NMDA in Zantac and other antacids focused on the possibility of external contamination. Tests conducted at the point of manufacture often indicated only levels of NMDA below the FDA threshold.

Further studies, however, have suggested that ranitidine becomes chemically unstable when exposed to heat for prolonged periods of time – that the appearance of NMDA is not necessarily the result of external contamination, but the result of chemical deterioration. Leaving Zantac in a hot car might be enough to produce dangerous levels of NMDA, as might freight transportation from the point of manufacture to the pharmacy.

For more information on the Zantac litigation, contact Frank Woodson or Melissa Prickett at 800-898-2034, or by email at Frank.Woodson@BeasleyAllen.com or Melissa.Prickett@BeasleyAllen.com.

Sources: jpml.uscourts.gov and FDA.Gov

FDA Issues Drug Safety Communication For Weight Loss Drug’s Possible Cancer Link

The Food and Drug Administration (FDA) has issued a Drug Safety Communication about the prescription diet drug Belviq. This drug is manufactured by Eisai, Inc., a U.S. subsidiary of Japan-based pharmaceutical company, Eisai Co., Ltd. Clinical trial results had shown that the drug may be associated with an increased risk of cancer. The FDA requested that Eisai, Inc. voluntarily withdraw Belviq from the U.S. market. Eisai complied and has agreed to withdraw the drug from the market.

The FDA approved lorcaserin in 2012 as a type of prescription drug to assist with weight loss in adults. Lorcaserin is available as a tablet (Belviq) and an extended-release tablet (Belviq XR). The medication works by targeting chemical signals that control appetite and allows people to feel fuller after eating smaller amounts of food. Belviq may also be prescribed to obese patients that have other conditions linked to obesity including diabetes, high cholesterol, and high blood pressure.

When the FDA approved lorcaserin in 2012, it required Eisai to conduct a randomized, double-blind, placebo controlled clinical trial to evaluate the risk of heart-related problems. This clinical trial involved approximately 12,000 people over five years. The results revealed that more patients taking lorcaserin were diagnosed with cancer compared to patients taking the placebo. This prompted the FDA to alert the public in January 2020. After the FDA evaluated the clinical trial results, it decided to ask Eisai to pull Belviq from the market.

In the FDA’s February 2020 statement, it advised that patients “should stop taking lorcaserin (Belviq) and talk to [their] health care professionals about alternative weight-loss medicines and weight management programs.” The FDA also advised physicians to “stop prescribing and dispensing Lorcaserin to patients.” The agency said:

Contact patients currently taking lorcaserin (Belviq), inform them of the increased occurrence of cancer seen in the clinical trial, and ask them to stop taking the medicine. Discuss alternative weight-loss medicines or strategies with your patients.

We will continue to monitor this drug and evaluate the findings as things develop.

Source: FDA.gov

AN UPDATE ON SECURITIES INSURANCE AND FINANCE LITIGATION

Supreme Court Punts IBM Stock-Drop Case Back To Second Circuit

On Jan. 14, 2020, the Supreme Court of the United States issued a per curiam opinion that punted on the central question in the case: whether companies who hold their own stock in employee retirement plans have an ERISA-imposed obligation to act on insider information that could lower the stock’s price. The Court vacated and remanded the case to the Second Circuit so that court could further develop the record. However, two concurring opinions, submitted by Justices Elena Kagan and Neil Gorsuch, give a glimpse of how the issue might be addressed should it come before the Court again, which will almost surely happen.

The officers and directors of a company owe fiduciary duties of loyalty and prudence to the company and its ownership. The duty of loyalty means that they must put the interests of the company above all else, even personal interests. The duty of prudence means they must use appropriate care and diligence in managing the affairs of the company. For a publicly traded company, the owners are the stockholders. When a publicly traded company also runs a pension plan, conflicts are created because the Employee Retirement Income Security Act (ERISA) imposes a fiduciary duty on pension plan managers. Managers of a plan owe duties of loyalty and prudence to the plan and its participants and beneficiaries.

Courts have long struggled with this conflict caused by the intersection of ERISA and securities laws concerning insider trading. Securities laws make it illegal for corporate insiders, like officers, to trade in the securities of their corporation based on knowledge of material, nonpublic information. On the other hand, if that corporate insider is an ERISA fiduciary to the pension plan, ERISA’s duty of prudence means they should not hold an asset in the plan that they know to be overvalued or at risk of great losses. But selling those securities based on the nonpublic information, even if owned by the pension plan not the insider, is a criminal act.

Previously, in Fifth Third Bancorp v. Dudenhoeffer, the Supreme Court held that ERISA stops short of commanding a plan fiduciary to act on inside information if such action would violate the law. Dudenhoeffer involved an employee stock ownership plan (ESOP) that continued to hold large amounts of Fifth Third stock, even though plan fiduciaries who were officers of the company knew, based on nonpublic information, that the stock was overvalued due to fraudulent misstatements made in public filings.

The Plaintiff argued that ERISA’s fiduciary duty commanded that the Plan should have sold the stock based on this inside knowledge. The Court held that, in such an instance, an ERISA stops short of commanding a fiduciary to break the law in loyalty to the plan. They further held that whatever proposed action the Plaintiff says was a better course for the fiduciary must not do more harm than good to the plan.

In the IBM case, the participants alleged that the administrators of the ESOP plan, who are IBM officers, should not have continued to buy company stock because they had inside information that IBM’s microelectronics business was losing large amounts of money. As stated above, the opinion did not reach the merits, but the concurring opinions give some insight into how the next such case may be viewed Court.

Justice Kagan’s concurrence, joined by Justice Ginsburg, states, relying on Dudenhoeffer, that if acting on inside information is not illegal, an ESOP fiduciary is obligated to so act as long as it will not do more harm than good for the plan. Justice Gorsuch’s concurrence, which was not joined by any other justices, goes beyond what Dudenhoeffer held. He says that the dual roles of officer/plan fiduciary do not intersect, and that a plan fiduciary never has any duty to act on inside knowledge gained by virtue of their role as corporate officer.

Justice Gorsuch further asserts that Dudenhoeffer does not directly address every potential scenario in which duties imposed by ERISA may command a plan fiduciary to act on inside information, beyond a base standard that such action cannot be illegal. Finally, he says that an ERISA fiduciary cannot make a corporate disclosure, only a corporate officer can, so that ERISA duty cannot command the person to take some action outside the scope of his fiduciary powers.

In the likely event the IBM case comes back before the Court, or if the same issue comes later in another case, these two competing ideas will be at the center of debate. Justice Gorsuch’s approach would greatly hollow the value of ERISA fiduciary responsibility owed by corporate officers. Under his approach, a plan fiduciary would have no obligation to either disclose or act on nonpublic information, ever, if such information was not gathered as part of their duties as plan fiduciary. Such a practice would greatly weaken protections for American workers. Hopefully, this view will not be adopted by the court.

Our lawyers in the Consumer Fraud & Commercial Litigation Section are actively investigating pension fraud and participating in ongoing pension litigation concerning breaches of fiduciary duty. If you need information or have concerns regarding how your plan is managed contact James Eubank, a lawyer in the Section who handles securities litigation, at 800-898-2034 or by email at James.Eubank@beasleyallen.com.

SeaWorld Settles ‘Blackfish’ Litigation For $65 Million

SeaWorld Entertainment Inc. has settled a securities class action and derivative litigation related to the controversial 2013 documentary “Blackfish” for $65 million. The theme park chain will pay $65 million to settle claims in California federal court it misled investors about declines in park attendance experienced after the release of the documentary, which chronicled the cruelty of capturing killer whales and the dangers faced by SeaWorld’s killer whale trainers.

The filing also disclosed the settlement of a derivative shareholder action in Delaware Chancery Court. If approved, it would include corporate governance modifications. Both settlements must be given final approval.

Released in 2013, the “Blackfish” documentary “chronicles the cruelty of killer whale capture methods, the dangers trainers face performing alongside killer whales during SeaWorld Entertainment’s popular shows, and the physical and psychological strains killer whales experience in captivity.”

The securities class action filed in September 2014 alleged that between August 2013 and 2014, SeaWorld blamed declining attendance on factors other than the documentary, which had stirred fervent public debate over the ethics of SeaWorld’s programming. It wasn’t until August 2014 that the company admitted issues related to “Blackfish” had caused a decline in attendance for the second quarter, sending shares down 33%, the investors said. Atchison stepped down four months later.

The proposed settlement would require SeaWorld to pay $65 million to claimants as well as costs of the settlement administration and attorney fees and expenses. According to the company’s Securities and Exchange Commission (SEC) filing, insurers would cover approximately $45.5 million of the settlement, with SeaWorld paying in $19.5 million in cash. The case was seeking to hold SeaWorld’s directors and officers liable for breaches of fiduciary duty in connection with their statements about declining attendance after the documentary’s release.

The investors in the securities suit are represented by David J. Noonan and Ethan T. Boyer of Noonan Lance Boyer & Banach LLP, Gregory M. Castaldo, Samuel C. Feldman, Stacey M. Kaplan, Joshua E. D’Ancona and Joshua A. Materese of Kessler Topaz Meltzer & Check LLP, Jeffrey J. Angelovich, Bradley E. Beckworth, Cody L. Hill and Susan Whatley of Nix Patterson & Roach LLP and John C. Goodson of Keil & Goodson PA. The investors in the derivative action are represented by Phillip Kim and Jonathan Stern of The Rosen Law Firm PA, Timothy W. Brown of The Brown Law Firm PC and Brian D. Long of Rigrodsky & Long PA.

The cases are Baker et al. v. SeaWorld Entertainment Inc. et al., (case number 3:14-cv-02129) in the U.S. District Court for the Southern District of California, and Kistenmacher v. Atchison et al., (case number 10437) in the Court of Chancery for the State of Delaware.
Source: Law360.com

HD Supply Holdings To Pay $50 Million To End Securities Fraud Suit

HD Supply Holdings Inc. shareholders have requested a Georgia federal judge to approve a $50 million settlement resolving securities fraud claims that the company lied about inventory setbacks, calling the proposed settlement the second largest class action settlement in the District in two decades. Investors had accused the Atlanta-based industrial distributor, its CEO Joseph J. DeAngelo and Chief Financial Officer Evan J. Levitt of concealing supply chain deficiencies at the company, which led to a 17.5% drop in share price when the truth came out.

A number of lawsuits were filed against HD Supply in the summer of 2017 accusing it of triggering a nearly 20% stock drop that cut more than $1.4 billion in market capitalization in a single day. The court consolidated two of the investor suits in October 2017 into the current suit.

On June 6, the stock price plunged as the onetime unit of The Home Depot Inc. not only reported first-quarter earnings that missed analyst estimates but also disclosed the divestiture of one of its main business segments. On that same day, shares fell 17.5%, or $7.24 apiece, to $34.03 from $41.27. But before the company revealed its financial troubles, DeAngelo sold 80% of his stake in HD Supply, dumping 1.3 million shares to take in $53 million.

HD Supply, originally a San Diego, California-based industrial supplier called Maintenance Warehouse, was acquired by The Home Depot Inc. in 1997. It changed its name to mirror its parent company’s in 2004 but was spun off in 2007. HD Supply went public in 2013.

The investors are represented by Maya Saxena, Joseph E. White III, Lester R. Hooker, Kathryn W. Weidner, Steven B. Singer, Joshua H. Saltzman and Sara DiLeo of Saxena White PA, W. Thomas Lacy of Lindsey & Lacy PC and Robert D. Klausner and Stuart Kaufman of Klausner Kaufman Jensen & Levinson.

The case is In re HD Supply Holdings Inc. Securities Litigation, (case number 1:17-cv-02587) in the U.S. District Court for the Northern District of Georgia.

Source: Law360.com

WORKPLACE HAZARDS

Jury Verdict In Pike County, Alabama

A jury in Pike County, Alabama, awarded a Beasley Allen client, Shane Smith $325,000 for on-the-job injuries he suffered while working for Swisslog Logistics, Inc. at the Wal-Mart distribution center located in Brundidge. Mr. Smith was injured when a Wal-Mart employee started an automated trolley car Smith was working on. The jury determined that Wal-Mart negligently bypassed safety devices incorporated onto the Swisslog designed trolley system.

The distribution center supplies regional Wal-Mart stores with goods. Swisslog logistics designed, sold, and installed a vast material handling system to transport pallets of goods throughout the distribution center. Smith and several Swisslog employees were performing a re-vamp to the system in the fall of 2016. When Smith and his co-employees arrived on scene, they discovered that light curtains on the system had been bypassed, safety bumpers on the trolleys were in disrepair, and that Wal-Mart had installed additional reset buttons into the system.

Wal-Mart required Smith and his co-employees to enter the trolley system through light curtains that Wal-Mart “muted,” or disabled. This was done to keep production at pace with typical operations. Wal-Mart was concerned the re-vamp project would negatively affect productivity. Wal-Mart also added resets to the system to increase productivity. As designed the system had a “single point of control” where the operator could see the entire system. However, Wal-Mart added resets to the system to save operators the time of walking to the main control panel where the single point of control was located. The added reset buttons were located where operators could not see the entire system.

Smith notified his employer and asked Wal-Mart to fix the conditions. Smith instructed Wal-Mart not to use the additional resets while Swisslog worked on the trolley system. Despite these warnings, Wal-Mart continued to use the reset buttons. Unfortunately, the reset was used on Oct. 18, 2016, starting a trolley Smith was trouble shooting. The trolley activated, pinning Smith’s left leg between the trolley and a conveyor. Smith was injured, but fortunately had made a very good recovery.

A mechanical engineer was used by Beasley Allen to evaluate the system as designed as well as in the altered state. In the expert’s opinion, the subject trolley system was safe as originally designed by Swisslog. However, the trolley system was unreasonably dangerous after the system was altered by Wal-Mart. Wal-Mart violated industry standards by both bypassing safety devices and failing to maintain safety devices. ANSI (American National Standards Institute) standards speak directly to a user’s responsibility to not bypass safety devices designed into industrial machinery. Wal-Mart failed to meet their obligation to maintain the system in a safe condition, which ultimately led to Smith’s injuries.

Wal-Mart defended the claim by blaming Mr. Smith. Wal-Mart claimed he was contributorily negligent by not activating an emergency stop on the trolley prior to trouble shooting it. They also blamed him for placing himself in harm’s way between the trolley and conveyor. Finally, Wal-Mart told the jury our client should have walked off the job knowing Wal-Mart had circumvented safety devices built into the trolley system. The jurors disagreed and placed blame on Wal-Mart for bypassing the safety devices. The case was tried in the Circuit Court of Pike County, Alabama before the Honorable Sonny Reagan, Circuit Judge. Beasley Allen lawyers Kendall Dunson and Evan Allen represented Mr. Smith.

AN UPDATE ON MOTOR VEHICLE LITIGATION

An Update On Autonomous Vehicle Concerns

The National Highway Traffic Safety Administration (NHTSA) has raised concerns with safety claims made by companies such as Tesla. For example, Tesla advertised that its Model 3 vehicle is the “safest vehicle” NHTSA has ever tested. NHTSA informed Tesla that it is inaccurate to claim that the vehicle has the lowest probability of injury compared to other vehicles, because frontal crash test results are affected by the vehicle’s mass and the nature of the tests makes it impossible to compare results between vehicles that have more than a 250-pound weight difference. NHTSA states that its guidelines warn companies against making comparisons since it can mislead consumers about safety in particular vehicles.

Experts say that a lack of federal rules governing autonomous vehicles (AV) has left several blind spots in the research, development and integration of AV technology, which may hamper innovation. The White House and NHTSA have revealed their fourth AV policy (Jan. 15, 2020), but it does not offer much regulatory clarity or standards while setting forth various concerns for the technology (i.e., safety, security, privacy, etc.). In addition to navigating various (often differing) local and state regulations, the private sector will have to develop industry guidelines for developing and testing their autonomous vehicles.

Companies that develop AV technology have had to seek federal exemptions from compliance with the Federal Motor Vehicle Safety Standards (FMVSS) due to AV not requiring the same level of features as standard vehicles. In early February 2020, NHTSA approved a company’s request to deploy a self-driving vehicle that doesn’t meet federal safety standards applying to cars and trucks driven by humans.

Nuro is launching a fleet of small, self-driving delivery vans for urban area package delivery. Since the Nuro vehicle is a low-speed, self-driving vehicle, certain required features such as mirrors and windshields for vehicles carrying humans are not necessary. Nuro will have to regularly report on its safety and operations under the exemption.

As AV technology continues to evolve, NHTSA may see an influx of exemptions being requested until regulations specific to AV are established and enforced. As fully automated cars and trucks will become a reality, NHTSA and companies such as Nuro have an opportunity and duty to develop AV technology that is safe for the general public.

Sources: Law360.com, indystar.com, pbs.org, NHTSA.gov and zdnet.com

NTSB Releases Details On Three Fatal Crashes Involving Tesla’s Autopilot

Autopilot is a partially automated system designed to keep a vehicle in its lane and keep a safe distance from vehicles in front of it. It also can change lanes with driver approval. Tesla says Autopilot is intended to be used for driver assistance and that drivers must be ready to intervene at all times. To date, the National Highway Traffic Safety Administration (NHTSA) has investigated at least 23 vehicle accidents involving some type of “assisted-driving” technology. We will discuss three incidents below.

The Indiana Crash

In December 2019, there was a fatal crash in Indiana involving a 2019 Tesla Model 3 that hit a parked fire truck that was in the passing lane of the highway with its emergency lights on. Both the driver and passenger of the Tesla suffered serious injuries. The passenger later died as a result of injuries suffered. NHTSA investigated the accident. It was not reported whether the vehicle was being operated in autopilot mode.

The California Crash

Walter Huang, an Apple engineer, died when his Tesla Model X slammed into a concrete barrier. He had previously complained about the SUV malfunctioning. The NTSB is investigating the March, 2018 crash that killed Walter Huang near Mountain View, California. The NTSB documents say Huang told his wife that Autopilot had previously veered his SUV toward the same barrier on U.S. 101 near Mountain View where he later crashed. Huang died at a hospital from his injuries. In a response to NTSB questions the Huang family’s lawyer wrote that “Walter said the car would veer toward the barrier in the mornings when he went to work.

Huang had described Autopilot’s previous malfunctioning to his brother, the Huang family lawyer wrote, in addition to talking with a friend who owns a Model X. Huang, a software engineer, discussed with the friend how a patch to the Autopilot software affected its performance and made the Model X veer.

The NTSB report said the crash was partially the fault of shortcomings in Tesla Inc.’s autopilot system as well as the driver’s distraction by a video game. The report said Tesla’s autopilot system didn’t adequately monitor whether the driver was actually paying attention, and “the timing of alerts and warnings was insufficient to elicit the driver’s response to prevent the crash or mitigate its severity.”

The report also faulted Tesla for allowing drivers to use the autopilot feature without restrictions, and said federal authorities should shift away from a hands-off approach to oversight of automated driving systems.

The NTSB recommended that cellphone makers implement “lock-out” features that disable distracting applications while drivers are in motion, and it reiterated an earlier recommendation that Tesla put limits on when drivers can use the autopilot feature.

The Florida Crash

The NTSB is investigating a crash in Delray Beach, Florida, that killed driver Jeremy Banner. In this crash, Banner turned on the Autopilot function of his Model 3 sedan 10 seconds before the crash, then took his hands off the steering wheel, NTSB documents said. The car then drove underneath a tractor-trailer that was crossing in front of it, sheering off the car’s roof and killing Banner. This crash was very much like another Florida crash in 2016 in which a Tesla on Autopilot went beneath a semi-trailer.

The NTSB said in a preliminary report that it still hasn’t determined the cause of the Banner crash. According to the report, traffic was light on the four-lane highway and dawn was breaking when Banner, 50, set his speed at 69 mph and activated the autopilot as he headed to work. The speed limit was 55 mph. Seconds later, a tractor-trailer driven by Richard Wood pulled from a driveway and began to cross to the other side of the highway.

Wood said he saw two sets of car headlights coming toward him, but he thought he had time to make it across. “It was dark and it looked like the cars was back further than they was,” Wood told NTSB investigators four days after the crash. A photo taken by the NTSB from Tesla’s front-end video camera showed Wood’s trailer fully blocking the road 1.5 seconds before the crash. Data from the Tesla’s computer shows that Banner hit his brakes less than a second before the crash, but the car went under the trailer. Wood says he saw a second car but it didn’t hit the trailer.

Source: Associated Press

Truck Driver Shortage: A Myth Or True And Why

The shortage of truck drivers is a subject that probably never crosses your mind unless you are somehow involved in an incident involving a large commercial truck and its driver. The commercial trucking industry counts for about 71% of all the freight moved in the United States. For all the freight to be transported it requires truck drivers to operate the large trucks we constantly see on the highways. These drivers have to be qualified and are regulated by the amount of time they can spend behind the wheel of a commercial motor vehicle.

In recent years (2018-2019) the trucking industry has raised the issue of truck driver shortage and suggested that the industry is approximately 60,000 drivers short, which it claims is caused by various reasons. We will explore below three of the reasons suggested.

One reason for this problem is the demographics and age, which seems to attract over-the-road truck drivers. The median age of a commercial truck driver is 46 years old, compared to just 42 years old for all other U.S. workers. The current age requirement to drive a commercial motor vehicle across state lines is 21 years old. Often these individuals are those who do not go to high education or the military, obtain employment in the construction, retail, or fast food industries as they cannot start their careers at a younger age. The average age of a new driver being trained is 35 years old.

Another reason for the problem is the trucking lifestyle. When new to the industry, many drivers are assigned routes that put them on the road for extended periods of time before they return home, typically a week or two. Therefore, it is not just a career but a lifestyle that does not fit everyone’s desires or needs. Eventually drivers who wish to spend more time at home and start a family choose a different career path.

Another issue that a truck driver struggles with is the trucking regulations. Currently commercial truck drivers are governed by the Federal hours of service regulations, which limit drivers to approximately 60 hours over a seven-day period and these same regulations do not require a company to pay time and a half premium for the hours worked over 40. Most commercial truck drivers work far in excess of 40 hours per week. Unfortunately, the Department of Labor regulations do not require a trucking company to pay its drivers time and a half for anything over a 40-hour week.

The matters discussed above are just a few of the issues that have been raised and that are creating the so-called driver shortage. Those who question whether or not this is a real issue in the trucking industry have suggested that there is no driver crisis, but it is a problem brought about by the trucking industry itself. The two biggest reasons for the lack of qualified drivers is the low rate of pay and the lack of time spent at home and with family.

The trucking industry has been attempting to have the age limit for drivers lowered to 18 years of age. Interstate driving currently has an age minimum of 21 years of age. The 18-20-year-old segment of our population has the highest rate of unemployment of any age group and yet the trucking industry does not have access to them. Additionally, the industry argues that potential drivers likely find another career path during the three years before the time they reach the age of 21.

Advocates for the age limit remaining at 21 years argue that statistically the 18-20 group has the highest risk for having a collision than any other age group that operates motor vehicles. The trucking industry wants to enact an apprenticeship to train 18-20-year-old truck drivers and this apprenticeship would require a minimum of 400 hours of training of which 240 hours would be behind the wheel. However, it is felt that training alone cannot overcome the high crash rate statistics.

Whether there is a legitimate truck driver shortage in this country has yet to be determined. We do know that there is a high turnover rate of commercial truck drivers. This has created a condition called a “broken market” since the high turnover in this industry is an indicator that the jobs are unattractive to many potential employees. We also know that there has been a push by the trucking industry to relax some of the hour of service regulations which would allow driver to spend more time behind the wheel.

Whatever the reason for any perceived truck driver shortage it appears that this issue will be around for some time since there appears to be no significant change in either the pay of truck drivers, time spent at home, or in the regulations relating to operation of the commercial and motor vehicle safely.

If you need more information, contact Mike Crow, a lawyer in our Personal Injury & Products Liability Section, at 800-898-2034 or by email at Mike.Crow@beasleyallen.com. Mike handles trucking litigation for the firm.

Sources: Forbes.com, www.joe.com and ATA Truck Driver Shortage Analysis 2019

EMPLOYMENT AND FLSA LITIGATION

Supreme Court Won’t Reduce Filing Deadline In Intel ERISA Case

The U.S. Supreme Court has affirmed Intel Corp.’s 401(k) plan managers’ loss in a blockbuster ERISA, holding that workers don’t automatically gain the knowledge of plan mismanagement required to trigger a shorter lawsuit filing deadline when they receive financial disclosures from the plan.

Workers must actually read the disclosures and understand that misconduct has occurred to have the “actual knowledge” of a fiduciary breach required to kick off a three-year deadline to sue under the Employee Retirement Income Security Act (ERISA), the high court ruled unanimously, affirming a Ninth Circuit decision that was challenged by Intel’s investment policy committee.

In an opinion authored by Justice Samuel Alito, the high court held that “actual knowledge” means what it says – actual awareness of a potential violation. The justices rejected Intel’s argument that Plaintiffs should be considered to have “actual knowledge” of misconduct when they receive financial disclosures, whether they read and understand the disclosures or not.

This decision is clearly a huge win for workers. The default statute of limitations for fiduciary-breach lawsuits would have gone from six years to three years if Intel’s plan managers had prevailed in the case.

ERISA gives workers six years to sue over a fiduciary breach, but employers can ask judges to apply a shorter deadline by identifying the date the worker gained “actual knowledge” of the alleged misconduct. If the employer can pinpoint a certain date, the court can decide workers had three years from that date to sue. If the employer can’t, the worker has six years to sue from the date the breach occurred or, in cases of fraud or concealment, from “the date of discovery,” the Supreme Court wrote.

Christopher Sulyma sued the Intel Corp. Investment Policy Committee in 2015, saying the company mismanaged Intel Corp.’s 401(k) plan by directing workers’ savings toward risky private equity investments. The committee asked the judge to apply the three-year statute of limitations, saying that Sulyma received disclosures from the plan in 2009 that should have alerted him to the misconduct at that time. Thus they say he was banned from suing after 2012.

U.S. Magistrate Judge Nathanael Cousins agreed, dismissing the lawsuit. But the Ninth Circuit reversed the judge’s decision, saying Sulyma didn’t gain “actual knowledge” of the fiduciary breach when he received the disclosures in 2009, because he hadn’t read the documents that might have alerted him to the wrongdoing. The Supeme Court agreed.

The Intel Corp. Investment Policy Committee is represented by John J. Buckley Jr., Daniel F. Katz, Vidya Atre Mirmira, David Kurtzer-Ellenbogen, Juli Ann Lund, Tanya Abrams and Jyoti Jindal of Williams & Connolly LLP and Donald B. Verrilli Jr., Ginger D. Anders and Jordan D. Segall of Munger Tolles & Olson LLP.

The case is Intel Corp. Investment Policy Committee et al. v. Christopher M. Sulyma, (case number 18-1116) at the U.S. Supreme Court.

Source: Law360.com

TOXIC TORT LITIGATION CONCERNS

Toxic ‘Forever Chemicals’ Found In Drinking Water Throughout The U.S.

A report released last month by the Environmental Working Group (EGW) found high levels of toxic chemicals in tap water supplies serving dozens of major American cities. Per- and polyfluoroalkyl substances (PFAS), also known as “forever chemicals,” have been linked to reproductive and developmental, liver and kidney, and immunological effects, as well as high cholesterol and obesity.

PFAS compounds are used in a variety of consumer products such as food packaging, cookware, textiles, and flooring products. They are also still used in firefighting foam in the vast majority of states, though it must be phased out in fire departments nationwide by 2024.

The report found that 43 areas, including New York City, Nashville, Las Vegas and Sacramento, had detectable PFAS of at least 1 part per trillion. Twenty other cities and regions nationwide – including Washington, D.C., Philadelphia, Miami, and Louisville – contained PFAS levels of at least 10 parts per trillion. Brunswick County in North Carolina and the Quad Cities region of Iowa and Illinois had the highest concentrations surpassing 100 parts per trillion.

Because of the links to health hazards, the Environmental Protection Agency (EPA) established a lifetime health advisory of 70 parts per trillion (ppt) for PFOA and PFOS in 2016. However, the levels that regulatory agencies consider safe is changing rapidly as more attention is focused on PFAS. For example, a draft report from the U.S. Department of Health and Human Services in 2018 argued that the 70 parts per trillion threshold should be up to 10 times lower than what is recommended. Also, several states have established advisory levels lower than the current lifetime health advisory to ensure their citizens are adequately protected from PFAS chemicals.

The known extent of PFAS contamination continues to grow as more people become aware of the dangers these chemicals pose and test their own water supplies. Government officials need to continue focusing their efforts on determining the scope of the contamination so it can ensure no American is exposed to these chemicals in their drinking water.

Source: USA Today

3M PFAS Legal Liabilities Continue To Grow

3M is currently embroiled in more than 187 lawsuits filed by cities, states, water systems, and individuals nationwide for the contamination of drinking water and soil with perfluorooctanesulfonic acid (PFOS), perfluorooctanoic acid (PFOA), and other per- and polyfluoroalkyl substances (PFAS) chemicals. The chemical giant manufactured PFOS and PFOA for nearly 50 years before phasing them out in the early 2000’s after the public became aware of associated health concerns. Unfortunately, 3M continues to make replacement chemicals with similar stain-resistant qualities, which may be just as dangerous.

According to insurance firms, Wall Street analysts, and environmental-risk analysts it’s estimated that the contamination issues stemming from PFAS could end up costing 3M between $7 billion and $32 billion in product liability, litigation, and pollution-cleaning expenses. This wide range dollar figure is because the full extent of PFAS contamination is still under investigation.

In mid-January, the State of Michigan sued 3M (and several other Defendants) for the contamination of water throughout the state. It is the latest state to sue PFAS manufacturers, distributors or users, following the lead of Minnesota, New York, New Hampshire, Vermont and New Jersey. As previously reported, the State of Minnesota reached a $850 million settlement with 3M in February 2018.

The U.S. Department of Defense (DOD) has also joined the investigation because firefighting foam used at airports and military bases nationwide contains PFAS which has contaminated nearby water sources. The DOD cited 401 bases in the U.S. with known or suspected releases of firefighting foam. Some are in heavily populated areas like Warrington, Warminster and Horsham, which are just north of Philadelphia where the Navy spent $63 million to investigate and clean up PFAS at two former bases.

A study conducted last year by the Pennsylvania health department found PFAS blood levels above the national average when it tested 235 community members, with levels increasing the longer people had lived there. Local residents will also be part of a $7 million study conducted by the Centers for Disease Control and Prevention (CDC) that will examine the health effects of those impacted by the chemicals.

If you need more information contact Ryan Kral, a lawyer in our firm’s Toxic Torts Section, at 800-898-2034 or by email at Ryan.Kral@beasleyallen.com.

3M To Pay Wolverine $55 Million For Cleanup Of ‘Forever Chemicals’

Scotchgard maker 3M has agreed to pay $55 million to shoemaker Wolverine World Wide Inc. to help with Wolverine’s cleanup of Michigan groundwater contaminated by “forever chemicals” known as per- and polyfluoroalkyl substances (PFAS). The proposed settlement would resolve claims filed by Michigan-based Wolverine in late 2018 against 3M, whose Scotchgard product was used by Wolverine to waterproof its shoes for more than 40 years. The product was phased out in the late 1990s.

Wolverine, the maker of shoe brands Keds and Saucony, had alleged that 3M knew Scotchgard contained perfluorooctanesulfonic acid and perfluorooctanoic acid – commonly referred to PFOS and PFOA – and that it could pose a risk to the environment. 3M didn’t properly disclose that information to customers and made false statements about its safety. This agreement with 3M comes on the heels of a separate settlement agreement approved by a Michigan federal judge in which Wolverine agreed to pay $69.5 million to settle claims that it was behind the contamination.

This litigation started when a January 2018 suit was filed by the Michigan Department of Environment, Great Lakes and Energy and the townships of Plainfield and Algoma claiming Wolverine’s shoe waterproofing process created contaminated waste that crept into surface water, soils and groundwater.

According to plans outlined in a Feb. 3 consent decree, Wolverine will fund the extension of municipal water to more than 1,000 properties in the two townships that currently rely on groundwater as well as filters for other properties that will continue to rely on well water. The company will also undertake environmental cleanups around its tannery and a waste processing facility.

Wolverine also will monitor groundwater contamination in the area and address PFAS contamination entering surface waters, according to the settlement. Wolverine agreed to operate and maintain drinking water filters in areas where connection to municipal water isn’t feasible right now.

U.S. District Judge Janet T. Neff, in her order approving the plan, said:

the consent decree is a model resolution of a very complex problem that reflects the cooperative spirit of the parties to the litigation, in light of very serious public health consequences. Through the parties’ diligence and overriding focus on the public interests at stake, they negotiated a resolution in what is, by all accounts, record time for environment litigation of this nature.

While the now-approved consent decree resolves the drinking water and environmental remediation aspects of the PFOA and PFOS contamination, Wolverine and 3M are still facing related individual and class action claims that the contamination caused property values to fall and exposed residents to health risks. And in January, Michigan sued 3M, DuPont and 15 other chemical companies for financial damages, alleging the companies withheld scientific evidence and deliberately concealed the dangers of PFASs, allowing the chemicals to contaminate the environment and expose the state’s drinking water and residents of harm.

The state is represented by Polly A. Synk, Danielle Allison-Yokom and Brian J. Negele of the state Attorney General’s Office Environment, Natural Resources, and Agriculture Division. The townships are represented by Douglas W. Van Essen and Elliot J. Gruszka of Silver & Van Essen PC.

The case is Michigan Department of Environmental Quality v. Wolverine World Wide Inc., (case number 1:18-cv-00039) in the U.S. District Court for the Western District of Michigan.

Source: Law360.com

The Roundup Litigation

Bayer’s Chairman To Leave Amid Roundup Litigation

Bayer AG Chairman Werner Wenning is leaving the German drugs and chemicals company before his term expires. He leaves with the ill-advised Monsanto acquisition and tens of thousands of lawsuits over its Roundup weedkiller pending in courts around the U.S. Wenning will be succeeded in April by Norbert Winkeljohann who joined Bayer’s supervisory board in May 2018 just before the Monsanto deal closed. Reportedly, the $63 billion purchase was the brainchild of Wenning and Chief Executive Officer Werner Baumann, who was censured by shareholders at last year’s annual meeting.

Bayer bought Monsanto in order to solidify its hold on the lucrative agro-chemicals and seeds market. But the transaction has saddled Bayer with suits claiming the Roundup herbicide causes cancer.

Major investors – including U.S. billionaire Paul Singer’s Elliott Management Corp. – pushed Bayer toward settlement talks with at least 42,700 Plaintiffs who claim that Roundup causes cancer. Bayer agreed to postpone further trials and to give mediation a chance for a global settlement. This came after Bayer lost three California cases that resulted in combined damages of $191 million. At least a half-dozen trials scheduled to start in February and March have been put on hold.

Source: Bloomberg

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 would welcome the opportunity to speak with you regarding a potential claim. For more information, contact one of the members of the Roundup Litigation Team: John Tomlinson (who heads up the team), 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.

UPDATE ON NURSING HOME LITIGATION

Congress Introduces New Legislation To Tackle Hospice Quality

Reps. Jimmy Panetta (D-Calif.) and Tom Reed (R-N.Y.) have introduced bipartisan legislation designed to strengthen regulatory oversight of hospice providers in the wake of two July 2019 reports from the U.S. Department of Health and Human Services Office of Inspector General (OIG).

The reports garnered widespread media attention and elicited strong reactions from hospice organizations. In addition to bringing attention to safety incidents in hospices, the reports called into question the effectiveness of the U.S. Centers for Medicare & Medicaid Services’ (CMS) enforcement strategies.

The first of the July OIG reports indicated that about 20% of hospices surveyed by regulators or accreditors between 2012 and 2016 had a condition-level deficiency that posed a serious safety risk. A second report detailed a dozen instances of the most serious deficiencies.

The new bill – the Helping Our Senior Population in Comfort Environments (HOSPICE) Act – is expected to address some of OIG’s recommendations for stronger enforcement. Panetta in a statement:

This bipartisan legislation will hold those bad actors accountable, enhance the integrity of the entire hospice program, and improve the quality of care for patients in the last stages of life.

The HOSPICE Act is designed to bring hospice oversight in line with that of other post-acute care settings by providing the U.S. Department of Health and Human Services with new powers to oversee and penalize hospices that are found to have serious quality deficiencies, develop more stringent CMS and state agency surveys and improve surveyor training, as well as increase transparency for patients and families, including a requirement that states establish toll-free hotlines through which families could report abuse or neglect.

Reps. Panetta and Reed are members of the House Ways and Means Committee, which has sole jurisdiction over the Medicare Hospice Benefit. The committee in August of last year sent a letter to CMS Administrator Seema Verma seeking answers on how the agency would respond to the reports.

Stakeholders in the hospice space were quick to respond to the legislation, generally supporting the educational and survey improvement aspects while expressing concerns about provisions that would penalize or increase the regulatory burden on hospices.

The National Association for Home Care & Hospice (NAHC) voiced support for some of the provisions to improve quality and called on Congress and regulators to consider input from hospice providers as the legislation develops.

LeadingAge, an advocacy group on issues affecting seniors, voiced concerns that financial penalties could have a particularly detrimental impact on nonprofit providers. Katie Smith Sloan, president and CEO, LeadingAge and acting president and CEO, VNAA/EH, stated:

We support the aspects of this bill that aim to improve quality of care and provider oversight, including upgrades to surveys and surveyor education, as well as requirements that will give consumers greater clarity about the care they are receiving. However, we cannot support all aspects of the HOSPICE Act as drafted. The inclusion of civil monetary penalties (CMPs) are an unnecessary and overly burdensome remedy for the hospice community in combination with the other elements this legislation provides to improve both regulatory oversight and consumer education.

Source: Law360.com

The Beasley Allen Nursing Home Litigation Team

Alyssa Baskam 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

A Report On Class Action Litigation Activity At Beasley Allen

Beasley Allen has vastly expanded its class action practice and has broadened the subject areas of class action litigation into cases involving defective products, life insurance fraud, ERISA cases (Employee Retirement Income Security Act), antitrust, health care and data breach privacy cases, to name a few. Lawyers in our Consumer Fraud & Commercial Litigation Section continue to investigate these cases and explore even more cases involving employment and the various issues revolving around employment such as equal pay, gender discrimination, race discrimination and sexual harassment in the class action arena.

Dee Miles, who heads the Section, will mention below some of the areas of class action litigation the Section lawyers are currently working on. We will mention more about cases involving more than just class actions that the Section is handling in the current case activity section of this issue. There will be some duplication in the cases listed here and in that part of the Report.

Product Liability/Auto Defect Class-Actions

In addition to the recent class actions involving Volkswagen and Chrysler dealing with “cheat devices” and carbon emissions, both of which our firm played a leadership role in the Multidistrict Litigation (MDL), that reached a favorable result for consumers, we are also filing class actions involving auto defects against the likes of General Motors, Ford, Toyota and Nissan to name a few. These issues range from excessive oil consumption due to an engine defect, defective brakes, fuel mileage misrepresentations, sliding door defects, faulty fuel pumps and even more dangerous engine defects that result in fire. Each of these cases, and those that we are currently investigating, require pre-suit testing, a necessity to a successful product liability class. Our law firm is fortunate to have access to some of this country’s best expert engineers to assist us with the critical research that is necessary to file a successful product liability class action.

Our product liability class action team consists of Dee Miles, Clay Barnett and Mitch Williams. These lawyers are spearheading the auto defect product liability cases mentioned above and have fortunately reached some great class action settlements. We are fortunate to have a network of attorneys throughout the country that send us issues concerning product liability auto defect concerns and we are able to explore the class action options available concerning these particular issues. We will continue to expand our class action litigation in this particular area of auto defect product liability and welcome opportunities to review and research new ideas.

Life Insurance Class Action

Over the last few years we have filed several life insurance class actions and have fortunately obtained class action relief for many thousands of policyholders as a result. For many years, our law firm would only pursue these types of cases on an individual basis, one case at a time, but because of drastic changes in the law, the class action vehicle became a better way to obtain relief for many more policyholders under certain conditions, but in a single case. Recently, we found that many insurance companies had breached their universal life insurance policy contracts with their policyholders by unjustifiably increasing the cost of insurance as high as 600% on some policies. Our firm filed several class actions against these companies, some of which have settled, and others are proceeding nicely through the courts. We look forward to good results in each of these cases.

We recently filed a class action lawsuit against an insurance company for wrongfully “depreciating labor” on property and casualty insurance policies. This case is now at the class certification stage, but other companies seem to have utilized the same unlawful practice and we therefore continue to investigate these companies and their practices in an effort to stop this abuse in the property casualty claims process.

We are reviewing other class action ideas against insurance companies involving life, health, disability, long term care and others. Our insurance fraud class action team consists of Dee Miles, Rachel Boyd and Paul Evans.

ERISA “Employee Retirement Income Security Act”

We have filed and are continuing to file new cases for employees of large companies that have employee benefit plans and/or pension plans. Employers who provide pension plans owe a fiduciary duty to the plan participants, employees. In recent years, many companies have attempted to “off load” these pension plans to other companies to avoid these hefty contribution obligations that the benefit plans demand. This is often against the law because of how the corporations are essentially “dumping” the plans to a third party. Class actions are an appropriate means to rectify the harm that results from corporations that have engaged in this type of wrongful conduct.

Our law firm recently filed an ERISA class action lawsuit in California, where a major company moved its pension plan to a much smaller subsidiary of the company that doesn’t have adequate assets to sustain the future contributions to the pension plan. Other companies are attempting similar tactics to escape the liability of funding these plans. Our law firm is committed to preserving these pension plans for employees that have spent a lifetime saving and planning for their retirement. Our lawyers Dee Miles, James Eubank, Rachel Boyd and Paul Evans are pursuing these cases for our clients as class actions in an effort to put a stop to these abusive tactics by corporate America.

Antitrust

One of our most challenging class actions is the Blue Cross Blue Shield antitrust case currently pending in the Federal Court of Birmingham, Alabama, before Judge David Proctor. Our clients are health care providers, i.e., doctors, hospitals, clinics etc., who have experienced unfair pricing practices of Blue Cross regarding reimbursement rates for health care services. Companies that may have a monopolistic presence in a particular industry can mandate prices and services. This is the allegation by our clients against Blue Cross Blue Shield, which has approximately 93% of the health care market in the state of Alabama, for example. Our case involves 36 states and has been ongoing since 2013. This is an extremely important case to our clients and to the health care industry in general and we look forward to the class being certified in this case, a trial if necessary, or a settlement in the event the parties are able to find common ground for a resolution.

This Blue Cross Blue Shield case is only one example of some of the antitrust work our firm is doing, and we look forward to expanding our antitrust class action work. Our lawyers Dee Miles, Leslie Pescia and James Eubank make up the Beasley Allen antitrust class action team.

Dee Miles has given you a few examples of the class action work the Section’s lawyers are currently pursuing. There are many others, such as data breach, privacy cases, employment classes and other consumer issues that our lawyers are investigating and filing as class actions. Not every consumer issue is right for class action treatment, but those that are proper for class action litigation enable our law firm to obtain relief for many consumers in a single case and as a legal service we are proud to offer consumers. We will mention below some specific cases that have been filed recently. In another section of this issue, we will list and discuss some recent settlements of significance.

If you need more information, contact Michelle Fulmer, Section Director, at 800-898-2034 or by email at Michelle.Fulmer@beasleyallen.com. She will have the appropriate lawyer contact you. Lawyers in the Section are Dee Miles, Lance Gould, Larry Golston, Clay Barnett, Alison Hawthorne, Leslie Pescia, Leon Hampton, Jr., Rachel Boyd, James Eubank, Paul Evans, Lauren Miles, Tyner Helms and Mitch Williams.

Beasley Allen Appointed To Plaintiffs Steering Committee In Airbag Defect Case

U.S. District Judge John Arnold Kronstadt has appointed Dee Miles from Beasley Allen to the Plaintiffs Steering Committee (PSC) for the multidistrict litigation (MDL) regarding auto supplier ZF TRW Automotive airbags that could fail to deploy. Dee is the head of our firm’s Consumer Fraud & Commercial Litigation Section.

More than 12 million vehicles by multiple manufacturers are involved in this MDL. The malfunctioning airbags are linked to at least eight deaths. The cases’ origins show noticeable similarities to the earlier cases involving defective Takata airbags. We believe there is a similarly large problem. Other than Dee, Beasley Allen lawyers representing Plaintiffs include Clay Barnett and Mitch Williams.

Dee had this to say about his appointment:

I’m honored to be selected by Judge Kronstadt to serve in this leadership position. The public was educated on the intricacies of airbags with the Takata airbag recall and I look forward to working with our leadership team to uncover the truth. Some of the Defendants have known for years that a defect existed with the airbags but failed to inform their customers and the public about the defect and its serious nature,” said Miles. “The defect has not been adequately addressed. It has caused deaths, injuries, and put the traveling public at increased risk of danger, not to mention devalued the vehicles.

In July 2019, a complaint was filed against ZF TRW Automotive seeking class-action certification over defective airbag control units. Plaintiffs claim that ZF TRW knowingly hid airbag defects from consumers. The airbag can “seize up” in an accident and cause seatbelt lock failure and failure of airbags to deploy. Automaker Defendants include Kia Motors America, Hyundai Motor America, Fiat Chrysler Automobiles, Mitsubishi Motors America, American Honda Motor and Toyota Motor U.S.A.

Class vehicles with the defective airbag include the following: 2013-2019 Hyundai Sonata; 2013-2019 Hyundai Sonata Hybrid; 2013 Kia Forte; 2013 Kia Forte Koup; 2013-2019 Kia Optima; 2012-2016 Kia Optima Hybrid; and 2014 Kia Sedona. The list of class vehicles may expand as discovery continues.

The U.S. Judicial Panel on Multidistrict Litigation (JPML) established the MDL last summer, consolidating 15 lawsuits that have increased to 25 currently. The MDL is In Re: ZF-TRW Airbag Control Units Products Liability Litigation, (case number MDL 2905) and is located in the Central District of California.

Source: Beasley Allen Website

Beasley Allen Filed A Class Action For Owners Of Toyota And Lexus Vehicles

Beasley Allen lawyers have filed a class action lawsuit relating to defective fuel pumps in 2018-2019 Toyota and Lexus vehicles. Our firm is working with lawyers from Wolf Haldenstein Adler & Hertz LLP, located in New York. The lawsuit, filed on behalf of Plaintiff Sharon Cheng in the Eastern District of New York, alleges defective Denso fuel pumps can fail prematurely and without warning, causing an increased risk for collision and injury.

The lawsuit follows Toyota’s January 2020 recall of nearly 700,000 affected vehicles where it admitted the defective nature of the fuel pump; however, as the Plaintiff alleges, the recall does not cover all vehicles equipped with the same defective fuel pump. Particularly, the recall does not cover Hybrid versions of the vehicles, even though Toyota acknowledged these vehicles are equipped with the same defective fuel pump.

It’s alleged in the lawsuit that the defective fuel pump contains a plastic impeller that is prone to excessive fuel absorption leading to deformation. When the impeller becomes deformed, it contacts the fuel pump’s casing which affects vehicle performance. Specifically, drivers complain of diminished acceleration capabilities. In some cases there is a complete vehicle shut down.

In the recall, Toyota identified approximately 2,500 warranty claims and 65 field reports associated with the defective fuel pump. However, the lawsuit alleges that even though Toyota acknowledged the defect and its serious consequences, it will not disclose the defect to the public until March 13, 2020. Thus, the lawsuit alleges:

owners and lessees of the Class Vehicles are unknowingly driving on roads and highways in potentially ticking time bombs while Toyota knowingly exposes its customers, from whom it made at least $20 million from the sale of just the Recalled Vehicles, to the risk of grave physical harm and even death.

If you need more information, contact Clay Barnett ( Clay.Barnett@beasleyallen.com) or Mitch Williams ( Mitch.Williams@beasleyallen.com), lawyers in our firm, at 800-898-2034.

Plaintiff Seeks Class Certification In Case Involving Property Damage Claims And Labor Depreciation

Beasley Allen lawyers filed a suit in February of 2018 against Allstate for the manner in which it adjusted Alabama policyholders’ – including our clients – property insurance claims. Specifically, our client was provided an estimate for the damages to his manufactured home and was subsequently denied payment of his claim due to his loss being less than his deductible after depreciation. Unfortunately for our client and several other Alabama policyholders, adjusters in Alabama wrongfully depreciate labor costs to repair and replace damaged property – causing the actual cash value estimate and payment to be much lower than it ought to be.

On Jan. 6, 2020, we filed a motion in the Northern District of Alabama for certification of a class of all Alabama Allstate policyholders who submitted a claim for property damage in Alabama and whose initial payment was reduced by the withholding of labor depreciation, and who never received a subsequent payment for the labor depreciation withheld. We believe class certification is proper as all of the policies at issue contain the same ambiguous language that fails to define “depreciation” or specify that labor costs will be depreciated.

Additionally, Allstate treats all claims the same during the adjustment process in the preparation of the estimate and the depreciation of labor. In particular, Allstate, like many insurance companies, utilizes Xactimate software in order to adjust claims. This software is a tool making it easier for adjusters to quickly estimate the amount of a property loss. But when an estimate is prepared in Xactimate, Allstate has a default setting to automatically depreciate the labor costs to repair and replace the damages to policyholders’ properties. Payments are then made to the insureds based on upon the estimates created in Xactimate.

Consumers are strongly advised to review their homeowner’s policy to determine whether the insurance company has the express right to depreciate labor costs on property loss claims. Additionally, if a consumer is filing a claim, it is important to keep a copy of all documents and communications, especially any adjuster estimates provided to you. Most insurance policies and related communications are obtuse and confusing for the policy owners. Anyone filing a property damage claim with their insurance company is therefore strongly urged to seek legal counsel. Your property damage claim may be shortchanged by the insurance company due to improper labor depreciation or undervaluing the extent of your property damages.

Our Consumer Fraud & Commercial Litigation Section lawyers are experienced with property damage claims and are able to assist in the process to help you get what you deserve. If you have any information and would like to speak with a lawyer, contact Paul Evans or Rachel Boyd, lawyers in our the Section, at 800-898-2034 or by email at Paul.Evans@beasleyallen.com or Rachel.Boyd@beasleyallen.com.

Lawsuit Alleges Defective Fuel Tank In RAV4 Hybrids

A class action lawsuit was recently filed in the Northern District of California against Toyota alleging 2019-2020 Toyota RAV4 hybrids are equipped with defective fuel tanks that will not fill to capacity.

According to the lawsuit, Toyota markets the vehicles as having 14.5-gallon tanks; but, a flaw in the vehicles’ fuel system prevents those affected vehicles from accepting more than 10 gallons of gasoline before the gas pump’s automatic shutoff feature activates.

As a result, the lawsuit alleges the defect causes the affected vehicles to be sold in violation of federal and state emissions regulations, which require vehicles to reach nearly full fuel tank capacity before triggering the pump’s automatic shutoff response. The lawsuit further alleges the defect “drastically reduces” the range that the affected vehicles can be driven – which was a significant selling point for those customers buying RAV4 hybrids. The lawsuit alleges Toyota knew about the defect before the affected vehicles were sold. The lawsuit alleges:

Despite knowing about the fuel tank defect defendants do not warn purchasers and lessees of the defect. Instead, defendants continue to expressly and impliedly represent that the subject vehicles are well-designed, properly manufactured, are safe for their intended use, and comply with federal and state emission regulations.

The lawsuit seeks to represent a nationwide class of consumers who purchased or leased a 2019-2020 Toyota RAV4 Hybrid. The Plaintiffs are represented by Timothy G. Blood, Leslie E. Hurst and Jennifer L. MacPherson of Blood Hurst & O’Reardon LLP; and Ben Barnow, Erich P. Schork and Anthony L. Parkhill of Barnow and Associates PC. The case is Ken Ly v. Toyota Motor Sales USA Inc. et al., (case number 5:20-cv-00640) in the U.S. District Court for the Northern District of California.

Source: Law360.com

Parents Sue Evenflo Over ‘Cynical’ Booster Seat Marketing

A California man has filed suit against Evenflo Co. Inc. in an Ohio federal court, saying the children’s car seat maker had deceived him and other parents with misleading claims about the safety performance of the company’s Big Kid booster seats during side-impact collisions. The Plaintiff, Mike Xavier, alleged in the proposed class action that Evenflo had been engaged in a “cynical ploy” to profit from overblown safety claims about the Big Kid booster seat for more than a decade, despite knowing that the company’s “rigorous” side-impact tests didn’t approximate real-life crashes. It’s alleged:

Legitimate science and legitimate testing reveals that the Big Kid booster seats provide dubious benefit to children involved in side-impact collisions, especially those under 40 pounds.

Xavier said he bought eight “Big Kid” booster seats in 2012 for his twin children to use in each of his four vehicles. He claims he had previously been in a side-impact collision, so Evenflo’s representations about its side-impact testing were a big factor in his purchase. But Mr. Xavier said a recently published investigation by the news outlet ProPublica revealed Evenflo’s deception to consumers for the first time. Mr. Xavier said:

Only by creating a test that has no basis in science or safety then concluding its products ‘pass’ that test can Evenflo aggressively market its Big Kid booster seats as ‘side-impact tested.’

It should be noted that there’s no federal standard for such testing as done by Evenflo. That is very significant.

It’s alleged that Evenflo has sold more than 18 million Big Kid booster seats, earning “hundreds of millions of dollars of profits on these dubious safety products.” The suit is filed under state consumer protection laws in California and other states, seeking to represent anyone who bought a Big Kid booster seat since 2008.

On the same day the Xavier lawsuit was filed, the U.S. House Subcommittee on Economic and Consumer Policy announced an investigation into claims that Evenflo misled consumers about the Big Kid booster seat. Steve Berman of Hagens Berman Sobol Shapiro LLP, who represents Xavier, said in a statement that “millions of parents and child guardians” had been scammed by Evenflo. Steve said:

Evenflo chose to ignore the warning signs of its own testing, which revealed plain and simple that children seated in Evenflo’s Big Kid car seat would not be safe during a side-impact car crash.

Xavier is represented by Jeffrey S. Goldenberg of Goldenberg Schneider LPA, and Steve W. Berman, Thomas E. Loeser and Ted Wojcik of Hagens Berman Sobol Shapiro LLP. The case is Mike Xavier v. Evenflo Co. Inc., (case number 3:20-cv-00053) in the U.S. District Court for the Southern District of Ohio.

Source: Law360.com

Recent Settlements In Class Action Litigation

The following are some of the recent settlements reached in class action litigation around the country. We felt these are some of the more significant settlements. Let us know if we have missed any of equal or more importance.

Nissan Settles Engine Defect Class Action

Nissan has reached a settlement in a proposed class action alleging it concealed a dangerous engine defect, with the automaker agreeing to extend hundreds of thousands of car owners’ warranties and cover the cost of previous repairs. The 2016 complaint hinges on allegations that Nissan knew some of its car models contained faulty components that can cause problems ranging from loud noises to catastrophic engine failure but did nothing to warn consumers or cover the costs of repairing that defect later on.

This settlement will extend the warranties for affected vehicles up to 120,000 miles, double the previous maximum warranty of 60,000 miles. That extended warranty will then allow car owners to get their vehicles fixed free of charge or be reimbursed for repairs they previously paid for out of pocket. The Massachusetts federal court overseeing the case is being asked to approve, for the purposes of the settlement, a class consisting of all affected car owners in Oregon, Colorado, Texas, Massachusetts, North Carolina, New York, Florida, Maryland and New Jersey. Each state contains “thousands” of class members, with nearly 112,000 in Texas and 114,000 in Florida, and between roughly 10,000 and 88,000 each in the rest of the states.

Each repair or reimbursement is said to be worth roughly $1,500, potentially putting Nissan’s total expenditures for repairs at about $6 million. The suit was filed in October 2016, claiming breach of contract, breach of express warranty, unjust enrichment, and violations of federal and Massachusetts consumer protection laws, among other allegations.

The alleged flaw at the heart of the complaint is the presence of faulty components in the so-called timing chain system of certain mid-to-late 2000s Altima, Quest, Maxima, Frontier, Xterra and Pathfinder models. Those faulty components can allegedly cause chains that open and close engine valves to develop too much slack, causing the chains to whip around and damage other components. Nissan did not disclose the problem to drivers, but did tell dealerships. The automaker refused to cover the cost of repairs or replacements when the engines were eventually damaged by what the consumers said was an inferior plastic component prone to wearing away.

The settlement agreement will also cover a closely related suit in the Eastern District of New York captioned Chiarelli v. Nissan North America.

The proposed classes are represented by Adam M. Stewart of Shapiro Haber & Urmy LLP, Gary S. Graifman and Jay I. Brody of Kantrowitz Goldhamer & Graifman PC, and Howard Longman and Patrick Slyne of Stull Stull & Brody.

The case is Duncan et al. v. Nissan North America Inc. et al., case number 1:16-cv-12120, in the U.S. District Court for the District of Massachusetts. The other case covered by the settlement is Chiarelli v. Nissan North America Inc. et al., (case number 1:14-cv-04327) in the U.S. District Court for the Eastern District of New York.

Source: Law360.com

Bank Of America Agrees To $250 Million Settlement In Countrywide Appraisal Case

Bank of America, Countrywide Financial Corp. and others will pay $250 million to settle consolidated class action litigation accusing them of participating in a fraudulent real estate appraisal scheme. The borrowers are requesting initial court approval of the agreement.

The settlement resolves the litigation on a class wide basis, ending a nearly seven-year-old case that revolves around allegations that Countrywide, which Bank of America bought in 2008, and an affiliated appraisal vendor schemed in the years leading up to the financial crisis to generate bogus, inflated appraisals in order to close as many home loans as possible.

Under the terms of the agreement, the estimated 2.4 million class members will not have to file claims forms to receive a part of the $250 million common fund. The proposed settlement class is defined as U.S. residents who applied for a mortgage loan at the now-defunct Countrywide and whose properties were appraised by affiliated vendor LandSafe Inc. from 2003 through 2008.

The amount paid to each borrower will represent at least 22% of the appraisal fee taken by the Defendants when assessing the mortgage applications, according to the settlement.

The Plaintiffs are represented by Christopher R. Pitoun and Steve W. Berman of Hagens Berman Sobol Shapiro LLP and Daniel Alberstone, Roland Tellis, Evan Zucker and Elizabeth Smiley of Baron & Budd PC.

The cases are Waldrup v. Countrywide Financial Corp. et al., (case number 2:13-cv-08833) and Williams et al. v. Countrywide Financial Corp. et al., (case number 2:16-cv-04166) both in the U.S. District Court for the Central District of California.

Source: Law360.com

TerraForm Gets Approval For $49 Million SunEdison-Related Settlement

A Manhattan federal judge has approved a $49 million settlement to end class litigation brought by investors who say TerraForm Global Inc. misled them about now-bankrupt energy concern SunEdison Inc. This settlement largely ends New York federal court securities litigation over fraud allegations against both companies.

TerraForm, a SunEdison spinoff designed to feed dividends to investors, lost value in 2015 as problems with SunEdison’s sales and earnings goals mounted, investors claimed in suits alleging that it failed to disclose massive earnings issues prior to disastrous SunEdison earnings reports.

The lead Plaintiff and class are represented by Jack Fruchter of Abraham Fruchter & Twersky LLP. Class members also are represented by Robbins Arroyo LLP and Glancy Prongay & Murray LLP. TerraForm is represented by Michael G. Bongiorno of WilmerHale. The cases are In re: SunEdison Inc. Securities Litigation, (case number 1:16-md-02742) and In re: TerraForm Global Inc. Securities Litigation, (case number 1:16-cv-07967) both in the U.S. District Court for the Southern District of New York.

Source: Law360.com

Equifax Investor Suits Get Preliminary Approvals In Settlements

A Georgia federal judge has preliminarily approved a $149 million settlement to end a securities suit from a putative class of Equifax investors related to the credit reporting agency’s massive 2017 data breach. This came a day after the judge did the same for a $32.5 million settlement in a derivative shareholder suit arising from the same incident.

The putative class of investors in the stock-drop suit, headed by Union Asset Management Holding AG, would recover about $2.08 per affected share before fees, expenses and costs under the agreement preliminarily approved by U.S. District Judge Thomas W. Thrash Jr.

In their July 2018 complaint, the shareholders said the Defendants breached their fiduciary duty by failing to protect the privacy of consumers and by failing to respond to the fallout of the breach appropriately.

The proposed class in the securities case is represented by James A. Harrod, Abe Alexander, Brenna Nelinson and James Fee of Bernstein Litowitz Berger & Grossmann LLP, and H. Lamar Mixson and Amanda Kay Seals of Bondurant Mixson & Elmore LLP. The shareholders in the derivative suit are represented by Joseph H. Weiss of Weisslaw LLP.

The cases are In re: Equifax Inc. Securities Litigation, (case number 1:17-cv-03463) and In re: Equifax Inc. Derivative Litigation, (case number 1:18-CV-00317) in the U.S. District Court for the Northern District of Georgia.

Source: Law360.com

Citgo To Pay $19 Million To Settle Suit Over Tractor Fluid

Citgo has agreed to pay nearly $19 million to resolve a proposed class action filed in Missouri federal court brought by consumers who claimed the oil company sold tractor fluid that wasn’t up to modern specifications and damaged their equipment. Citgo agreed to pay a total of $18.83 million to buyers of tractor fluid marketed under so-called John Deere 303 specifications, with 70% of the money covering refunds and the rest earmarked for equipment repair and damage reimbursement.

Shawn Hornbeck and more than a dozen other consumers sued Citgo in Missouri state court in May 2018, claiming the company manufactured tractor fluid marketed under the 303 specifications even though those have been obsolete since the 1970s.

The suit covers consumers who bought MileMaster 303 Tractor Hydraulic Fluid, H-K 303 Tractor Transmission Hydraulic Fluid, Orscheln Premium 303 Tractor Hydraulic & Transmission Fluid and SuperTech 303 Tractor Hydraulic Oil. The proposed class period covers different date ranges for each product, with the longest stretching back to May 2013.

Hornbeck and several other consumers also sued Tractor Supply Co. in a similar lawsuit over the 303 oil and reached a preliminary settlement for $1.7 million in August. That case is also in Missouri federal court.

Hornbeck and the lead Plaintiffs are represented by Bryan White, Gene P. Graham Jr. and William L. Carr of White Graham Buckley & Carr LLC and Dirk L. Hubbard and Thomas V. Bender of Horn Aylward & Bandy LLC. The case is Hornbeck et al. v. Orscheln Farm and Home LLC et al., (case number 4:18-cv-00941) in the U.S. District Court for the Western District of Missouri.

Ford Focus And Fiesta Powershift Transmission Reaches Second Settlement In Class Action

A Ford Focus and Fiesta transmission lawsuit settlement has been reached after the 9th Circuit Court of Appeals ruled the previous settlement may not have been good enough for Ford customers. Ford and the Plaintiffs had reached a settlement agreement in 2017 and a federal judge preliminarily approved the settlement. But certain Ford customers objected to the settlement agreement by claiming many Fiesta and Focus customers were getting nothing while the lawyers for the Plaintiffs were receiving nearly $9 million.

The appeals court determined very few customers would receive any benefits from the settlement even though the federal judge below had found it to be fair and adequate. Only 8% of Fiesta and Focus customers filed claims by the deadline. Two of three appeals judges ruled to “vacate final settlement approval and remand so that the district court may conduct a more searching inquiry.” This order sent the PowerShift class action back to the district court.

In February, both Ford and the Plaintiffs reached another settlement agreement, although the judge must still give final approval.

Owners and lessees of 2011-2016 Ford Fiesta and 2012-2016 Ford Focus cars claim the dual-clutch PowerShift transmissions were defective from the factory. Drivers complained their cars jerk, lunge, hesitate, suffer downshifting problems and eventually suffer complete failure.

The following are the Ford Fiesta and Focus Transmission Settlement Terms:

The Fiesta and Focus transmission settlement will offer cash payments to Ford customers who had three or more qualifying visits to Ford dealerships to replace certain transmission components.

Payments begin at $200 for the third dealer visit and a customer may receive an additional $275 for the next dealer visit and $350 after that. The most a customer can receive is $2,325 after the eighth dealer visit.

In place of reimbursements, a customer may choose a certificate valued at twice the amount of cash payment to be used toward the purchase or lease of a new Ford vehicle.

Ford Fiesta and Focus customers who don’t qualify for cash payments may qualify for payments for the third dealer visit to update the transmission control modules. A customer may receive $50 starting with the third software flash up to a total of $600 with a 7-year/100,000-mile limitation.

Based on the current settlement agreement, Fiesta and Focus customers who visited dealers once or twice will not receive any cash payments.

If a customer complained to a dealership about transmission problems but was denied repairs, Ford will pay $20 if the customer agrees to those facts under penalty of perjury.

According to the PowerShift transmission settlement, a Fiesta and Focus customer may have Ford repurchase the car if they qualify under their state’s lemon law. If the customer qualifies, Ford may refund the amount paid for the car less a “reasonable allowance for use.”

The settlement also creates a standard for claims that don’t qualify under state lemon laws, but only under certain conditions. In this situation, the arbitrator may award a repurchase if four or more transmission hardware replacements were performed within 5 years/60,000 miles yet the vehicle continued to malfunction.

If a customer hires a lawyer to handle arbitration and the customer wins, Ford will pay $6,000 toward expenses for the lawyer.

The Fiesta and Focus transmission settlement may be able to assist customers who have paid for repairs they believe should have been covered under warranty. The customer can enter warranty arbitration with the automaker on Ford’s dime, and the arbitrator may award reimbursement, a free repair, an extension of the warranty by Ford or any combination thereof.

A Fiesta or Focus customer who owns or leases a vehicle manufactured after June 5, 2013, and who had two clutches replaced during the 5-year/60,000 mile powertrain warranty is entitled to reimbursement for out-of-pocket costs for a third clutch replacement made within 7 years/100,000 miles from the time the vehicle was originally sold.

The replacement clutch will also be covered by a two-year warranty, and a customer will also have access to Ford’s customer satisfaction program 19N08 issued in August 2019. Under program 19N08 and the previously issued program 14M01, the clutches on most vehicles are covered by an extended warranty of 7 years/100,000 miles.

The Ford Fiesta and Focus transmission lawsuit was filed in the U.S. District Court for the Central District of California: Vargas, et al., v. Ford Motor Company. The Plaintiffs are represented by Capstone Law APC, Berger & Montague P.C., and Zimmerman Law Offices P.C.

Wells Fargo Reaches $79 Million Settlement In Deferred Compensation Suit

A former Wells Fargo financial adviser who claimed the bank improperly cut him and other employees out of deferred compensation has asked a South Carolina federal court to approve a $79 million settlement aimed at resolving the class action. A class of Wells Fargo Advisors deferred compensation plan participants who were shorted on deferred compensation they were owed under a retirement benefits plan are in the settlement.

The suit was filed in 2017, alleging Wells Fargo had violated the Employee Retirement Income Security Act (ERISA) by denying payouts to the Plaintiff and other deferred compensation plan participants under a forfeiture clause applicable to departing employees.

That clause violates certain ERISA anti-forfeiture and other provisions that the bank has avoided by misclassifying the plan as an exempt “top hat” plan aimed at executives and high-level employees. The suit took aim at Wells Fargo & Co. as well as two subsidiaries that do business under the name Wells Fargo Advisors, and it has been pared down since its 2017 filing to just claims related to the Wells Fargo Advisors LLC Performance Award Contribution and Deferral Plan.

In October 2018, U.S. District Judge Joseph F. Anderson Jr. certified the class and said such a declaration is fine in this case because it “is a permissible prelude to claim for damages,” noting that a court can change a plan’s terms under ERISA and require benefits to be paid out pursuant to this “reformed” plan.

Plaintiff Robert Berry is represented by William S. Norton, Erin C. Williams, William H. Narwold and Mathew P. Jasinski of Motley Rice LLC, Thomas R. Ajamie, David S. Siegel and John S. Edwards Jr. of Ajamie LLP and Mark P. Kindall and Douglas P. Needham of Izard Kindall & Raabe LLP. The case is Berry v. Wells Fargo & Co. et al., (case number 3:17-cv-00304) in the U.S. District Court for the District of South Carolina.

Source: Law360.com

$18.5 Million In Settlement To End Payday Loan Suit

A former Google executive’s financial technology company and a tribal corporation will pay $18.5 million and cancel $170 million of outstanding debt to settle proposed class litigation alleging the Defendants saddled consumers with payday loans carrying exorbitant interest rates. A group of individuals filed the proposed class action in Virginia federal court in April over short-term loans with interest rates up to 460%. In the suit, the group accused former Google Chief Information Officer Douglas Merrill and the company he founded, ZestFinance Inc., of linking themselves to a North Dakota tribe to hide behind its sovereign immunity while issuing the loans.

The 366,000 individuals who entered loan agreements with payday lender Spotloan from Jan. 1, 2012, through Oct. 31, 2018, will be included in the preliminary settlement. Defendants are Merrill, ZestFinance and BlueChip Financial, the tribal corporation that ran Spotloan.

In addition to the cash fund and debt cancellation, the Defendants agreed to contact all consumer reporting agencies to ask them to strike out any missed payment marks on its loans. However, the class can still pursue claims against anyone who purchased the debt from Spotloan before Dec. 31, 2019.

Consumers have sued Merrill, ZestFinance and BlueChip Financial over the past few years alleging that their short-term, high-interest loans violated federal and state consumer protection laws. In the original Virginia complaint, one consumer, Gwendolyn Beck, alleges she paid a total of $2,884 to settle a $600 loan.

The consumers are represented by Leonard A. Bennett and Craig C. Marchiando of Consumer Litigation Associates PC, Kristi C. Kelly, Andrew J. Guzzo and Casey S. Nash of Kelly Guzzo PLC, E. Michelle Drake and John G. Albanese of Berger Montague, Beth E. Terrell, Jennifer Rust Murray and Elizabeth A. Adams of Terrell Marshall Law Group PLLC and Matthew Wessler of Gupta Wessler PLLC.

The case is Turner et al. v. ZestFinance et al., (case number 3:19-cv-00293) in the U.S. District Court of the Eastern District of Virginia.

Source: Law360.com

USC’s Landmark $215 Million Sex Abuse Settlement Gains Final Approval

A putative class of patients and alleged victims of Dr. George Tyndall, a University of Southern California gynecologist accused of sexually abusing potentially thousands of women for decades, has received final approval of its $215 million settlement with the university. U.S. District Judge Stephen V. Wilson approved the settlement.

The settlement will cover around 18,000 alleged victims and patients of Tyndall and is not contingent on them having officially accused him of abuse. Class members could receive between $2,500 and $250,000 from USC.

A three-member panel of a special master, psychiatrist and gynecologist will make the final determination on payouts, which can fall into one of three tiers depending on the severity of the alleged injuries and the willingness of class members to disclose to the panel their allegations, according to the settlement agreement. This is the largest-ever class action settlement of sexual abuse claims, according to the Plaintiffs’ motion in favor of its approval.

A group of women claim that Dr. Tyndall, who treated students at the school’s health center from 1989 to 2017, conducted pelvic exams with ungloved hands, performed inappropriate and unnecessary breast exams, asked inappropriate questions about students’ sexual practices and made sexually suggestive remarks about patients’ bodies during the course of his examinations. Tyndall is facing a series of felony charges in Los Angeles Superior Court related to the allegations.

Approximately 800 women have opted out of the settlement, which is allowed under the terms, with about 600 of those having filed cases in state court. In May, the parties submitted an amended settlement, outlining major institutional changes to prevent future abuse. Some of the proposed changes would require increased screening of health care employees – including background checks – allow students to select doctors based on gender, and implement a new misconduct investigations protocol and new employee training programs to prevent sexual misconduct and assaults.

Judge Wilson preliminarily approved the amended settlement in June and conditionally certified a class of all women who were treated by Tyndall at USC’s student health center between Aug. 14, 1989, and June 21, 2016.

The Plaintiffs are represented by Steve W. Berman, Shelby R. Smith, Whitney Siehl and Christopher R. Pitoun of Hagens Berman Sobol Shapiro LLP, Annika K. Martin, Evan J. Ballan and Jonathan D. Selbin of Lieff Cabraser Heimann & Bernstein LLP, Daniel C. Girard and Elizabeth A. Kramer of Girard Sharp LLP, Joseph G. Sauder of Sauder Schelkopf LLC and Jonathan Shub of Kohn Swift & Graf PC. The case is In re: USC Student Health Center Litigation, case number 2:18-cv-04258, in the U.S. District Court for the Central District of California.

Source: Law360.com

PHARMACY BENEFITS MANAGER (PBM) LITIGATION

Our firm has been involved in PBM (Pharmacy Benefit Managers) litigation since the early 2000s when we represented the West Virginia State Employees Benefit Plan against Merck-Medco for Merck failing to pass drug rebates back to the plan, but instead retained them as profit for itself. That case settled. Since that time the PBMs have become more creative and crafty in the way they have disguised methods of shaving off profits for themselves from pharmacy transactions involving the insureds and plan participants through the guise of saving money for the health care plans.

Beasley Allen has increased our litigation efforts to recapture these benefits lost to the PBMs as a result of fraudulent practices in processing health care benefits, mainly in the prescription drug transactions area. I am convinced that the high cost of prescription drugs in the U.S. is largely due to the PBMs manipulating and abusing the system. We will discuss below some of the abuses our lawyers are seeing as a result of PBM misconduct. First, we will give an overview of the origin and development of the PBMs and will discuss some problems cause by the PBMs.

Transparency Lacking In Pharmacy Benefit Management Programs

Health insurance providers in the United States, including government plans, commercial insurance companies, and private self-funded plans, often hire an outside company to handle aspects of their participants prescription coverage. A pharmacy benefit manager (PBM) will negotiate prices, handle claims, and distribute prescription drugs to participants in the plan.

Ostensibly, PBMs offer benefit to plan providers by enabling collective buying power to reduce drug costs. Beginning in the late 1960s, the first PBMs were independent companies that contracted with insurance providers to process insurers’ drug prescriptions, reimburse pharmacies for those prescriptions, and maintain the formulary (the list of drugs a particular insurer deems medically safe) for its participants. A PBM, representing patients from numerous health plans, can reduce prescription prices through bargaining power and the use of generics in the formulary. A self-funded employer plan may not cover enough participants to be able to press drug companies or pharmacies for a volume discount, but a PBM can. Often these savings come in the form of pharmacy discounts and drug manufacturer rebates that the PBMs negotiate and obtain.

This began to change in the 1990s. Initially, drug manufacturers began to purchase PBMs, but the Federal Trade Commission stepped in and undid the transactions citing conflict of interest concerns. After consolidation in the industry in the 2000s, national pharmacy chains have been the companies stepping in to buy some PBMs. In 2018, the top three companies – CVS Health, Express Scripts, and OptumRx – make up 76% of the PBM market in the U.S. The top six companies make up 96% of the market.

Many contracts between providers and PBMs are called “pass-through” agreements, which require the PBM to forward costs savings from discounts and rebates to the provider, but there are multiple issues with the way the system currently works. First, a PBM owned by the pharmacy chain that sells the drugs is an obvious conflict of interest in the negotiation of discounts. The PBM also has incentive to include certain drugs in the formulary that provide greater profit for the pharmacy, even though they may not be the best drug for the plan or participants.

The biggest issue with PBMs currently is transparency for the insurance provider who hires them. The negotiated prices paid for drugs are considered trade secrets, and closely guarded by the PBMs. The rebates and fees obtained from drug manufacturers are, likewise, considered a trade secret. What actual amount of those rebates and fees are passed on to health plans is also kept hidden. Linda Cahn, a drug pricing consultant to health insurers, has stated that “PBMs are sitting at the center of a big black box” and “they’re the only ones who have knowledge of all the moving pieces.”

The only recourse a provider has is to demand an audit pursuant to the PBM services contract, but there are often strict limitations on the time period that may be reviewed and the manner in which an audit must be done. Moreover, the complexity and volume of the drug pricing, claims, and rebate data to be reviewed will require the provider to hire a third-party auditor to analyze the information, adding expense to the process.

In recent years there has been a slew of litigation exposing fraud perpetrated by PBMs. Many of the cases involve states suing the PBMs for defrauding pensions, employee health plans, and Medicare plans. These suits, often brought by whistleblowers from within the PBMs, have resulted in hundreds of millions of dollars in settlements for the states. Many other cases have been filed by private insurers alleging price inflation, failing to turn over rebates.

Perhaps the most well-known instances of PBM misconduct affecting consumer drug prices involves pricing of Mylan Pharmaceuticals’ EpiPen. The EpiPen is a self-injectable shot of epinephrine that can be used to stop anaphylactic shock in a person who is having a severe allergic reaction. Over the last decade, prices for the EpiPen have skyrocketed. A class action complaint filed in U.S. District Court in Minnesota in 2018 alleges that the top four PBMs participated in a pricing scheme with Mylan, which caused the price of the EpiPen to increase more than 600% from 2008 to 2016. Discovery is ongoing in the case and briefing for class certification is set to conclude in April 2020. The case is In re: EpiPen ERISA Litigation, Case No. 17-1884.

Current litigation to fight PBM fraud involves multiple aspects of the law. Causes of action touch on common law fraud, consumer protection, antitrust, RICO conspiracy, and ERISA. Experienced attorneys in the Consumer Fraud and Commercial Litigation Section at Beasley Allen are currently looking at these cases. Contact: Alison Hawthorne at Alison.Hawthorne@beasleyallen.com, James Eubank at James.Eubank@beasleyallen.com, or Dee Miles at Dee.Miles@beasleyallen.com.

PBMs And TPA Middlemen Skimming State Dollars

Prescription drugs are more expensive in the United States than in any other country in the world and criticizers are blaming Pharmacy Benefit Managers (PBMs) and Third-Party Administrators (TPAs) for the rising drug costs. PBMs and TPAs are the middleman between drug makers, pharmacies, and health care benefit plans like a state-funded employee plan or even a state’s Medicaid program. The major players in the United States that have contracts with state governments include companies like Express Scripts, CVS Caremark, OptumRX, Prime Therapeutics, and the Blue Cross Blue Shield entities.

States spend tens of millions of dollars each year paying for health and pharmacy benefits on behalf of state employees and Medicaid beneficiaries, but many contract out some of the claims processing duties to third parties. For instance, with a self-funded state employee benefit plan, the state pays all of the bills but hires a PBM to manage the pharmacy benefits and/or a TPA to manage the health benefits. As the number of Medicaid beneficiaries increases each year, some states have contracted with PBMs to assist with the processing of their millions of Medicaid claims as well. However, many of these PBMs and TPAs have been put under a microscope lately for their conduct that essentially skims money from the states.

For example, PBMs and TPAs engage in deceptive practices where they will recover excess money from medical provider recoupments and secret drug manufacturer rebates. Any money that is recovered by these middlemen is typically required to be passed on to the state since it is the state’s money that funds the benefits.

However, not all of the money collected is actually being passed through to the state and its employee plan or the Medicaid program. Instead, the recoupment and rebate money is being pocketed by the PBMs and the TPAs as pure profit. PBMs and TPAs allege they pass the recovered money back to the state in order to lower costs to the taxpayers, but that is not always the case.

The problem is that these recoupments and rebates are hard to decipher and states do not actually know how much of the recovered funds are being used to lower the state’s costs versus how much is being pocketed by the PBMs and TPAs. Retaining any of the state’s money in violation of their contractual obligations to pass through the savings is an unlawful practice that keeps health care costs high for state taxpayers.

Spread pricing by PBMs is another deceptive practice that has been highly scrutinized for its role in increasing prescription drugs costs. Spread pricing is when the PBM contracts with its client, for instance a state or its Medicaid program, to be reimbursed at a certain rate for a prescription drug, while negotiating a lower rate for that same drug with the pharmacy being paid to dispense the drug. The difference between what the PBM is reimbursed by the state or its Medicaid program and what it actually pays the pharmacy (the spread) is pocketed by the PBM as pure profit. However, PBMs cannot use spread pricing to upcharge, which ultimately increases prescription drug costs for the state.

Critics of PBMs and TPAs are tired of their exploitation of the lack of transparency and competition, which has ultimately led to increased costs of prescription drugs for states. Over the years, Beasley Allen has represented 11 states in various complex health care litigation and is currently investigating PBM and TPA claims through individual attorneys general offices. Our firm welcomes the opportunity to investigate potential PBM and TPA misconduct committed against states and their health and pharmacy plans.

If you have any questions about our firm’s health care fraud practice, contact Ali Hawthorne, a lawyer in our Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Alison.Hawthorne@beasleyallen.com.

THE CONSUMER CORNER

CPSC Warns Consumers Not To Charge Or Use New High-Tech X1-5 Hoverboards Due To Fire Hazard

The U.S. Consumer Product Safety Commission (CPSC) is warning the public that the New High-Tech Enterprise Company Inc. X1-5 hoverboard’s lithium ion batteries can overheat, posing a fire hazard that can lead to smoke inhalation or other serious injuries, including death.

The New High-Tech Enterprise Company Inc. X1-5 hoverboard was sold to consumers online at www.nhthoverboard.com, www.Amazon.com, and at www.ewheelsusa.com/hoverboard. The CPSC is aware of one report of an X1-5 hoverboard overheating and smoking. Although the X1-5 bears a UL mark, the product is no longer UL-listed and a sample tested by CPSC did not conform to UL2272.

Hoverboards should be compliant with the UL2272 safety standard. The CPSC continues to urge consumers to look for the UL mark on hoverboards. CPSC has asked New High Tech Enterprise Company Inc. to recall the product, but so far the company has refused to do so. As a result, the CPSC is warning consumers not to charge or use X1-5 hoverboards. A white label on the bottom of the hoverboard states: “Model: X1-5” and “Product Name: Balance Scooter.” A holographic UL label is also on the bottom of the hoverboard.

Consumers should report any incidents with this or other consumer products to CPSC at www.SaferProducts.gov.

3M Continues To Face Lawsuits Regarding Defective Earplugs

3M is currently facing thousands of claims from combat veterans accusing the manufacturer of knowingly making defective combat earplugs in multidistrict litigation (MDL) headquartered in Florida. The 3M Combat Arms earplugs at issue featured a dual-ended design that was intended to completely block all sounds when inserted one way and provide filtered noise reduction allowing the wearer to hear spoken commands.

According to a recent court-ordered census of all 3M Combat Arms earplug cases nationwide by the judge overseeing the MDL, almost 140,000 individuals have presented claims for hearing problems linked to the earplugs. New earplug lawsuits are being filed daily and more than 1,000 cases have been transferred to the MDL from courts around the country.

The Plaintiffs typically allege that the design defects with the 3M earplugs left military service members without adequate hearing protection, resulting in permanent hearing loss and tinnitus. Plaintiffs also allege that 3M Company has known for years that the earplugs were defective, and too small to properly seal the ear canal for proper hearing protection. In July 2018, 3M reached a $9.1 million settlement over the Combat Arms earplug problems with the Department of Justice, resolving claims that it defrauded the government by knowingly selling the defective earplugs.

Beasley Allen lawyers are investigating claims related to defective combat earplugs manufactured by 3M Company. If you need more information on this subject, or have a potential claim, contact Will Sutton or Danielle Ingram, lawyers at Beasley Allen, at 800-898-2034 or by email at William.Sutton@beasleyallen.com or Danielle.Ingram@beasleyallen.com.

Source: StarTribune

Federal Circuit Says Drug Ingredient Doesn’t Decide Product Origin

The Federal Circuit has ruled against the government’s long-standing interpretation of which products qualify as U.S.-made, finding that a drug’s active ingredient does not determine its country of origin or whether it can be considered U.S.-made. In a precedential decision, the panel affirmed a U.S. Court of Federal Claims ruling that the active ingredient in New Jersey-based Acetris Health LLC’s hepatitis treatment drug Entecavir does not determine the drug’s country of origin and therefore does not prohibit the U.S. Department of Veteran Affairs (VA) from procuring the product.

The active ingredient is only one component of a pharmaceutical drug, and under the Federal Acquisition Regulation (FAR) – a set of rules that stipulates the government can only purchase U.S.-made products, with some exceptions – a product is U.S.-made when it is manufactured or “substantially transformed” in the U.S., the panel said.

Furthermore, the circuit court said the Trade Agreements Act of 1979 (TAA) states that whether a product can be procured depends on the final, finished product, and not its individual components, or, as in this case, ingredients.

Therefore, the VA wrongly concluded that Acetris’ drug, Entecavir, was India-made based on a single active ingredient obtained from India and could not be acquired by the VA, the panel said. “If the government is dissatisfied with how the FAR defines ‘U.S.-made end product,’ it must change the definition, not argue for an untenable construction of the existing definition,” the circuit court said.

Acetris originally sued the VA in the claims court in March 2018 challenging its contract award to another pharmaceutical company for Entecavir, according to the decision. Acetris alleged that the VA wrongly determined that its product was India-made by misinterpreting the TAA and the FAR, the opinion said.

The VA argued in response that even if it had determined that Acetris’ product was U.S.-made, the company wasn’t the lowest bidder and would not have won the contract. Acetris can’t sue the government over a contract it never would have won, the VA said. The claims court and the panel disagreed, though for different reasons, according to the decision. The claims court determined in July 2018 that whether Acetris would have won the contract was irrelevant to whether the company had grounds for a lawsuit, the decision said. But the panel ruled that the claims court was wrongly ignoring possible future events. The panel said:

Acetris has standing because the government has taken a definitive position as to the interpretation of the TAA and the FAR that would exclude Acetris from future procurements for other products on which it is a likely bidder.

Acetris has a legal basis in this case to challenge future contracts the government may award on which it would like to bid, the panel decided, opening the gates for other companies to challenge procurements before they have occurred.

An Acetris lawyer, Stephen Ruscus, told Law360 that the panel’s decision is significant for future government contract protest bids. Ruscus said:

The Federal Circuit confirmed that contractors have standing to bring bid protests in the Court of Federal Claims for violations in connection to a proposed procurement, not just at all stages of an ongoing procurement, but also, at a minimum, with respect to ‘likely’ future procurements on which the contractor intends to bid in the relatively near future.

Acetris is represented by Stephen E. Ruscus, James D. Nelson, David B. Salmons and Donna Lee Yesner of Morgan Lewis & Bockius LLP. The government is represented by Daniel B. Volk, Joseph H. Hunt, Robert Edward Kirschman Jr., Patricia M. McCarthy of the U.S. Department of Justice and Jennifer Claypool of the U.S. Department of Veterans Affairs. The case is Acetris Health LLC v. U.S., (case number 18-2399) in the U.S. Court of Appeals for the Federal Circuit.

Source: Law360.com

What Does The Flavor Ban Mean For The Vaping Industry?

On Feb. 6, a policy went into effect that will result in a number of flavored vaping products being taken off the U.S. market. The Trump administration announced in September that it was concocting a policy that came to be known as a “flavor ban.” When the policy was originally announced, the intent was to strip all flavors except tobacco from the U.S. market in an effort to curb adolescents from using vaping products. However, the new policy announced Jan. 2 is much different and it has been criticized as being a “hollowed-out” policy that ended up “watering down the flavor ban.” The new policy included a number of exceptions that permit the same flavors to remain in the market in different types of electronic nicotine delivery systems.

The U.S. Food and Drug Administration’s (FDA) enforcement priorities make clear that this is not a complete “ban” on certain flavors. Instead, the policy says that none of the flavors other than standard menthol and tobacco will have the FDA’s premarket authorization. If a product passes this FDA review process, it can be sold just like the menthol and tobacco flavors.

Moreover, the policy only applies to specific types of devices: cartridge or pre-filled pod devices, like the ones made popular by JUUL. All other devices will be left on the market. For example, the policy does not include disposable vapes, which come in the same types of flavors.

FDA spokespersons say that the policy also focuses enforcement on any vaping products with marketing targeted to minors, or whose manufacturers have failed to take adequate measures to prevent minors from getting and using their products.

Ultimately, all vaping products will be required to undergo the same premarket review as the cartridge or pre-filled pod devices spelled out in the policy. However, products not included in the FDA’s newly enacted policy may stay on shelves for up to a year while the agency considers their applications.

Source: CNN Health

CURRENT CASE ACTIVITY AT BEASLEY ALLEN

The following is the March 2020 update on the types of cases that Beasley Allen lawyers are currently 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. We discussed above in this issue activity in two sections and there will be some duplication here for that reason. Information on the current litigation will be set out below for each Section.

Personal Injury & Products Liability Section

The personal Injury & Products Liability Section is handling cases in a number of areas. Currently, the Section has 18 lawyers and 31 support staff. Sloan Downes is the Section Director. The lawyers and support staff are working on the areas of litigation set out below. The primary lawyer contact will be listed for each type case. Following is the list of current activity in the Section.

Product Liability – We continue to focus on accident cases involving automobiles, heavy equipment and consumer products. Some of these auto cases involve single-vehicle crashes, while others involve multiple-vehicle accidents. We would like to review any case involving catastrophic injury or death. Contact: Cole.Portis@beasleyallen.com, Greg.Allen@beasleyallen.com, Ben.Baker@beasleyallen.com, Chris.Glover@beasleyallen.com, Mike.Andrews@beasleyallen.com, Graham.Esdale@beasleyallen.com, Labarron.Boone@beasleyallen.com or Rob.Register@beasleyallen.com.

Truck Accidents – There are significant differences between handling an interstate trucking case and other car wreck cases. It is imperative to have knowledge of the Federal Motor Carrier Safety Regulations, technology, business practices, insurance coverages, and to have the ability to discover written and electronic records. Expert testimony is of utmost importance. Accidents involving semi-trucks and passenger vehicles often result in serious injuries and wrongful death. Trucking companies and their insurance companies almost always quickly send accident investigators to the scene of a truck accident to begin working to limit their liability in these situations. Our lawyers, staff and in-house accident investigators immediately begin the important task of documenting and preserving the evidence. We would like to review any case involving catastrophic injury or death. Contact: Chris.Glover@beasleyallen.com, Mike.Crow@beasleyallen.com, Dan.Philyaw@beasleyallen.com or Donovan.Potter@beasleyallen.com.

On-the-job Product Liability – Many times product claims arise from worker’s compensation claims. After we investigate the circumstances that caused the injuries, many times we discover a defective machine may be the cause of the injuries. Contact: Kendall.Dunson@beasleyallen.com or Evan.Allen@beasleyallen.com.

Boeing Litigation – Lawyers in the Section, led by Mike Andrews, are investigating and filing suits arising out of the two crashes involving Boeing planes that have received tremendous public interest and concern. The first suit was filed on June 13. Mike is handling the litigation and has filed several other lawsuits. Others are being prepared for filing. Contact: Mike.Andrews@beasleyallen.com.

Aviation Accidents – Aviation litigation can be extremely complex and often involves determining the respective liability of manufacturers, maintainers, retrofitters, dispatchers, pilots and others. In some circumstances, the age of the aircraft involved can limit or completely preclude an injured party from compensation. Soaring through the sky hundreds of miles an hour, thousands of feet above the ground in an airplane or helicopter leaves little room for error. One small mechanical problem, misjudgment or faulty response in the air can spell disaster for air passengers and even unsuspecting people on the ground. We are handling cases involving all types of aircraft, military and civilian. Contact: Mike.Andrews@beasleyallen.com or Cole.Portis@beasleyallen.com.

Heavy Truck Product Liability Claims – Tractor trailers and other heavy trucks are not required to contain many of the same protections for occupants as smaller passenger cars. They can contain dangerous defects putting the truck driver or passengers at risk of serious injury or death. These trucks many times have particularly weak roofs that crush in rollovers. The passenger compartments are often not protected by effective cab guards, and this allows loads to shift into the truck cab. We would like to review any case involving catastrophic injury or death. Contact: Ben.Baker@beasleyallen.com or Greg.Allen@beasleyallen.com.

Defective Tires – Tire failure can result in a serious car crash and even a vehicle rollover accident, causing serious injury or death to vehicle occupants. Air, heat and sunlight can cause the rubber in tires to break down. When a tire is defective, potentially serious problems like detreads and blowouts can occur long before the tire would be expected to wear out. If the tire failure is the result of design or manufacturing defects, and the manufacturer is aware of the problem, they have an obligation to alert consumers to the potential danger. Contact: Ben.Baker@beasleyallen.com or Labarron.Boone@beasleyallen.com.

Premises Liability – In premises liability claims, patrons of establishments are often injured because the premises, for some reason, was unsafe. Premises liability claims can take many forms, including when severe injury or death results when a building or structure collapses, merchandise falls, during swimming pool accidents, due to poor lighting, falling debris, unsecured fixtures and furniture that falls or tips over, unsecure drainage that creates drowning or fall hazards, slippery surfaces, and inadequate maintenance. Beasley Allen has successfully handled a number of premises liability cases, and we would like to investigate any cases where severe injury or death results. Contact: Mike.Crow@beasleyallen.com, Ben.Locklar@beasleyallen.com, Warner.Hornsby@beasleyallen.com, or Ben.Keen@beasleyallen.com.

Negligent Security – Under the law, owners of establishments owe a duty to patrons and guests to ensure that the premises are reasonably safe and secure from anticipated dangers. These cases normally take the form of shootings, fights, stabbings, or other physical violence (including sexual assault) where severe injury or death occurs due to the establishment owner’s failure to take reasonable safety measures. When this occurs, the establishment owner, as well as those contractors charged with security, may be held responsible for the injuries suffered by individuals or groups of individuals on the premises. While the laws vary from state to state, our firm is actively investigating and litigating these cases where severe injury or death results. Contact: Parker.Miller@beasleyallen.com, Rob.Register@beasleyallen.com or Donovan.Potter@beasleyallen.com.

Nursing Home Abuse and Neglect – Nursing homes are supposed to be in the business of providing skilled nursing care to elderly and disabled residents. Unfortunately, statistics indicate residents in nursing homes suffer abuse and neglect more and more frequently at the hands of nursing home corporations. In many cases residents have died or have been severely abused as a result of neglect. They may suffer physical abuse, emotional or psychological abuse, or neglect. We are investigating cases involving serious injury or death resulting from nursing home abuse or neglect. Contact: Alyssa.Baskam@beasleyallen.com.

The Mass Torts Section

The Mass Torts Section is handling a number of cases involving pharmaceuticals and medical devices. Currently, there are 32 lawyers and 87 support staff in the Section. Melissa Prickett, a lawyer, serves as the Section Director. The lawyers and support staff are working in the areas of litigation set out below. The contact lawyer will be supplied in each case. The following are the current areas of litigation in the Section.

Talcum powder and ovarian cancer – As many as 2,200 cases of ovarian cancer diagnosed each year may have been caused by regular use of talcum powder. Talc is a mineral made of up various elements including magnesium, silicon and oxygen. Talc is ground to make talcum powder, which is used to absorb moisture and is widely available in various products including baby powder and adult products including body and facial powder. Talc products used regularly in the genital area increase the risk of ovarian cancer. In February 2016, a jury found Johnson & Johnson knew of the cancer risks associated with its talc products but failed to warn consumers and awarded the family of our client $72 million. She died of ovarian cancer after using J&J talc-containing products for more than 30 years. This case was the start of the litigation that followed. Ted Meadows heads up our talc litigation team handling individual claims. Leigh O’Dell heads up the team of lawyers handling the talc multidistrict litigation (MDL). Contact: Ted.Meadows@beasleyallen.com, Leigh.Odell@beasleyallen.com, Brittany.Scott@beasleyallen.com or Melissa.Prickett@beasleyallen.com.

JUUL vaping devices – The use of JUUL and other vaping devices has reached epidemic levels, especially among teenagers and young adults. JUUL and other vape device manufacturers fueled this epidemic by targeting and deceiving youth and adolescents with misleading social media marketing and sweet, fruit-flavored pods containing high levels of nicotine. Use of these products has been associated with numerous adverse health effects, such as seizures, nicotine addiction, nicotine poisoning, breathing problems, behavioral and psychological problems, and other serious health conditions. Contact: Joseph.Vanzandt@beasleyallen.com, Sydney.Everett@beasleyallen.com or Melissa.Prickett@beasleyallen.com.

Bone Cement – The type of bone cement used during knee replacement surgery affects the outcome of that surgery. High viscosity bone cement (HVC) boasts shorter mixing and waiting times and longer working and hardening phases, meaning surgeons can handle and apply the cement earlier than with low- or medium-viscosity cements. Although HVC may be more convenient to use, there is mounting evidence that the bond it produces is not as strong. Researchers have observed more early failures with the use of HVC, even when used in combination with a previously well-performing implant. Complications associated with knee replacements performed with HVC include loosening and debonding (where the implant fails to adhere to the cement interface on the shin or thigh bone), which requires revision surgery. Other reported problems include new onset chronic pain and instability. Contact: Chad.Cook@beasleyallen.com, Ryan.Duplechin@beasleyallen.com or Melissa.Prickett@beasleyallen.com.

Zantac – Zantac is used to treat and prevent ulcers in the stomach and intestines. It also treats conditions in which the stomach produces too much acid, such as Zollinger-Ellison syndrome, gastroesophageal reflux disease (GERD) and other conditions in which acid backs up from the stomach into the esophagus, causing heartburn. Zantac was voluntarily recalled from the market on Sept. 13, 2019. We are currently investigating claims for those who used Zantac and were diagnosed with certain types of cancer, including liver, bladder, stomach, colon, kidney and pancreatic cancer. Contact: Melissa.Prickett@beasleyallen.com or Frank.Woodson@beasleyallen.com.

Proton Pump Inhibitors – Proton pump inhibitors (PPIs) such as Nexium, Prilosec and Prevacid were introduced in the late 1980s for the treatment of acid-related disorder of the upper gastrointestinal tract, including peptic ulcers and gastrointestinal reflux disorders, and are available both as prescription and over-the-counter drugs. Beasley Allen is currently investigating PPI-induced Acute Interstitial Nephritis (AIN), which is a condition where the spaces between the tubules of the kidney cells become inflamed. The injury appears to be more profound in individuals older than 60. While individuals who suffer from AIN can recover, most will suffer from some level of permanent kidney function loss. In rare cases individuals suffering from PPI-induced AIN will require kidney transplant. Contact: Navan.Ward@beasleyallen.com or Melissa.Prickett@beasleyallen.com.

Metal-on-Metal Hip Replacement parts – The FDA has ordered a review of all metal-on-metal hip implants due to mounting patient complaints. Problems with metal-on-metal include, but are not limited to loosening, metallosis (ie: tissue or bone death), fracturing, and/or corrosion and fretting of these devices, which require revision surgery. Many patients that require revision surgery due to these devices suffer significant post-revision complications. We are investigating all cases involving metal-on-metal hip implants, including the DePuy Orthopaedics ASR XL Acetabular System and the DePuy ASR Hip Resurfacing System, recalled in August 2010; the Stryker Rejuvenate and ABG II modular-neck stems, recalled in July 2012; the Stryker LFIT Anatomic v40 Femoral Head (recalled August 29, 2016); the Zimmer Durom Cup, and the Biomet M2A “38mm” and M2A-Magnum hip replacement systems, which have not been recalled. Reported problems include pain, swelling and problems walking. Contact: Navan.Ward@beasleyallen.com or Melissa.Prickett@beasleyallen.com.

IVC Filters – Retrievable IVC filters are wire devices implanted in the vena cava, the body’s largest vein, to stop blood clots from reaching the heart and lungs. These devices are used when blood thinners are not an option. Manufacturers include Bard, Cook and Johnson & Johnson. While permanent IVC filters have been used since the 1960s with almost no reports of failure, retrievable IVC filters were introduced in 2003, promoted for use in bariatric surgery, trauma surgery and orthopedic surgery. Risks associated with the retrievable IVC filters include migration, fracture and perforation, leading to embolism, organ damage and wrongful death. Contact: Melissa.Prickett@beasleyallen.com.

Zofran – Manufactured by GlaxoSmithKline, Zofran (ondansetron) was approved to treat nausea during chemotherapy and following surgery. Zofran (ondansetron) works by blocking serotonin in the areas of the brain that trigger nausea and vomiting. Between 2002 and 2004, GSK began promoting Zofran off-label for the treatment of morning sickness during pregnancy, despite the fact the drug has not been approved for pregnant women and there have been no well controlled studies in pregnant women. The FDA has received nearly 500 reports of birth defects linked to Zofran. Birth defect risks include cleft palate and septal heart defects. Contact: Roger.Smith@beasleyallen.com or Melissa.Prickett@beasleyallen.com.

Physiomesh – Intended for hernia repair, Physiomesh is a flexible polypropylene mesh designed to reinforce the abdominal wall, preventing future hernias from occurring. Though there are several types of hernias, most occur when an organ or tissue protrudes through a weak spot in abdominal muscles. The condition often requires surgery where mesh, like Physiomesh, which is intended for laparoscopic use, is used to fill in a hole in the abdominal muscle or laid over or under it to prevent any further protrusions. Independent studies have found Physiomesh to lead to high rates of complications including hernia reoccurrence, organ perforation, mesh migration, sepsis and even death. In May 2016, Ethicon issued a market withdrawal of Physiomesh in the U.S. and recalled the product in Europe and Australia. We are currently investigating cases involving serious injury or death as a result of Ethicon’s Physiomesh. Contact: Melissa.Prickett@beasleyallen.com.

Opioids – Opioid abuse has reached epidemic proportions in the United States. According to the Department of Health & Human Services, 12.5 million people misused prescription opioids and 33,091 Americans died from opioid overdose in 2015 alone. These medications provide important pain relief for many. However, over the years, drug companies inflated the effectiveness of delayed-release medications like OxyContin and downplayed their addictive properties, creating conditions ripe for abuse. We are investigating cases involving opioid-related deaths and overdose requiring hospitalization, as well as cases involving treatment for addiction to prescription opioids. Contact: Melissa.Prickett@beasleyallen.com, Roger.Smith@beasleyallen.com or Liz.Eiland@beasleyallen.com.

Opioids and Infants – The opioid epidemic has also taken its toll on the most vulnerable among us. According to the National Institute on Drug Abuse, every 25 minutes, a baby is born addicted to opioids – a condition called Neonatal Abstinence Syndrome (NAS). Babies with NAS suffer painful symptoms of opioid withdrawal in the hours and days after they are born and are more likely to suffer long-term complications like developmental delays and hearing or vision impairment, compared to babies born to mothers who did not use opioids. We are investigating cases on behalf of children who were born with NAS after their mothers were prescribed opioids before or during pregnancy. Contact: Melissa.Prickett@beasleyallen.com, Roger.Smith@beasleyallen.com or Liz.Eiland@beasleyallen.com.

Consumer Fraud & Commercial Litigation Section

The Consumer Fraud & Commercial Litigation Section has 14 lawyers and 20 support staff. Michelle Fulmer is the Section Director. Lawyers and support staff in the Section are working on the litigation areas set out below. The primary lawyer contact will be supplied for each type case.

State and Municipalities Litigation – Our firm has represented numerous states throughout the country. These cases have been handled through the Attorneys General and have involved various civil actions. Many times, individuals are barred from bringing a consumer fraud type claim, but the state government is not. We recently concluded litigation in seven of eight states for a recovery dealing with Medicaid fraud. In addition, we are representing five states in related pharmaceutical pricing litigation. For more information, contact Dee.Miles@beasleyallen.com or Alison.Hawthorne@beasleyallen.com.

False Claims Act / Whistleblower- We are handling and investigating whistleblower claims of government fraud ranging from Medicare/Medicaid to military contracts, and any other type of fraud involving a government contract. Under the False Claims Act (FCA) the whistleblower is entitled to a percentage of the recovery. Studies show that as much as 10% of Medicare/Medicaid charges are fraudulent. Common schemes involve double-billing for the same service, inaccurately coding services, and billing for services not performed. Additionally, the Commission on Wartime Contracting has warned that the lack of oversight of government contractors has led to massive fraud and waste. Contact: Lance.Gould@beasleyallen.com, Larry.Golston@beasleyallen.com, Leslie.Pescia@beasleyallen.com or Tyner.Helms@beasleyallen.com.

Pension Plan Litigation (ERISA) – Many large corporations are improperly funding their Employee Benefit plans and / or transferring these Pension Plans to other entities that cannot properly fund the plans. The result is that employees’ life savings for retirement is either lost, compromised or reduced substantially. These transfers and inadequate funding measures are all designed to increase earnings for the corporations at the expense of its employees. Our firm is committed to pursuing the preservation of employee benefits / retirement by challenging these abuses through ERISA litigation and class actions. For more information contact Dee.Miles@beasleyallen.com, James.Eubank@beasleyallen.com or Rachel.Boyd@beasleyallen.com.

Auto Defect Class Actions – We are continuing to work on numerous auto defect class actions against many of the major automobile manufacturers like VW, Toyota, General Motors, Ford and even some suppliers. These cases continue to be filed because of corporate misconduct in designing and manufacturing unsafe vehicles that are purchased by consumers, corporations and state agencies. We continue to investigate these automobile problems for class relief treatment. Contact: Clay.Barnett@beasleyallen.com, Dee.Miles@beasleyallen.com, Leslie.Pescia@beasleyallen.com or Mitch.Williams@beasleyallen.com.

Life Insurance Fraud – We have uncovered alleged fraudulent accounting practices by life insurance companies concerning premium increases. The accounting method may result in the policyholder being charged excessive insurance premiums. A client that has a life insurance policy and has been notified of a substantial increase in premium payments, or if they have been told their policy’s “cost of insurance” has increased, may have a valuable legal claim that our firm would like to investigate. Contact: Dee.Miles@beasleyallen.com, Rachel.Boyd@beasleyallen.com, or Paul.Evans@beasleyallen.com.

Property Insurance Fraud – Insurance companies nationwide are unjustly depreciating labor costs on adjusted property claims (roof or fence damage for example). The depreciation of labor costs is contrary to many insurance policy forms and leads to policyholders either being undercompensated for their claims or not compensated at all as they fail to meet their deductible once labor costs are depreciated. If you have had an insurance claim on your property in the past six years, then we would like to review the adjuster’s estimate and your homeowner’s or manufactured home policy as you may have a case. Contact: Dee.Miles@beasleyallen.com, Rachel.Boyd@beasleyallen.com or Paul.Evans@beasleyallen.com.

Supplemental Disability Insurance Denial – We have successfully litigated bad faith denial of benefits cases for years in the disability insurance area and we are interested in reviewing cases involving denial of Individual and Group disability insurance. These cases can be either employee sponsored benefit plan policies (ERISA), individually owned policies or non-ERISA governed supplemental insurance. Contact: Larry.Golston@beasleyallen.com, Rachel.Boyd@beasleyallen.com, James.Eubank@beasleyallen.com or Paul.Evans@beasleyallen.com.

Health Care Fraud – We are looking into cases of fraud within the health care industry. These may include cases dealing with pricing, off-label prescriptions, or other health care abuse. Contact: Alison.Hawthorne@beasleyallen.com, James.Eubank@beasleyallen.com or Dee.Miles@beasleyallen.com.

Self-funded Health and Pharmacy Insurance Plans – Third Party Administrators and Pharmacy Benefit Managers may have been charging unauthorized fees to self-funded insurance health and pharmacy benefit plans. These extra fees may be in violation of the contracts with the self-funded plan and a breach of fiduciary duty under ERISA. We are looking into these cases on behalf of self-funded plans. Contact: Alison.Hawthorne@beasleyallen.com or James.Eubank@beasleyallen.com.

Pharmaceutical Pricing – We are continuing to handle claims involving chain pharmacies falsely reporting their generic pricing transactions to state Medicaid agencies. This misconduct has led to millions of dollars in overpayments by Medicaid agencies for generic drugs to the chain pharmacies. Contact: Alison.Hawthorne@beasleyallen.com, James.Eubank@beasleyallen.com or Leslie.Pescia@beasleyallen.com.

Antitrust – We are handling claims related to the violation of federal and state antitrust laws. We are currently involved in claims alleging a wide array of anticompetitive conduct, including illegal tying, exclusive dealing, monopolization, and price fixing. Contact: Dee.Miles@beasleyallen.com, Alison.Hawthorne@beasleyallen.com, James.Eubank@beasleyallen.com or Leslie.Pescia@beasleyallen.com.

Sexual Harassment – Sexual harassment is outlawed by Title VII of the Civil Rights Act of 1964 because it is a form of discrimination, as explained by the Equal Employment Opportunity Commission (EEOC). The agency states “[u]nwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when this conduct explicitly or implicitly affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment.” We are looking at any claim involving extreme sexual harassment or sexual assault. Contact: Larry.Golston@beasleyallen.com, Lauren.Miles@beasleyallen.com or Leon.Hampton@beasleyallen.com.

Employment Law – We are handling employment cases. Situations that may be addressed in this area include minimum wage and overtime pay, unfair labor practices, all types of discrimination, employee benefits, and whistleblower claims. Contact: Larry.Golston@beasleyallen.com, Lauren.Miles@beasleyallen.com or Leon.Hampton@beasleyallen.com.

Fair Labor Standards Act (FLSA) – We are working several cases involving Fair Labor Standards Act (FLSA) violations. The FLSA cases are brought on behalf of clients whose job title is misclassified by their employers so that employees are not compensated for overtime worked. Cases may also involve unequal pay, where women are paid less for doing the same job as men. Contact: Lance.Gould@beasleyallen.com, Larry.Golston@beasleyallen.com, or Lauren.Miles@beasleyallen.com.

Toxic Torts Section

The Toxic Torts Section has a number of ongoing projects at present. Currently, the Section has 10 lawyers and 27 support staff. Tracie Harrison is the Section Director. Lawyers and support staff are working on the areas of litigation set out below. The primary contact lawyer for each type case will be listed.

Roundup / glyphosate – Roundup is the most widely used herbicide in the world and the second-most used weed killer for home and garden, government and industry, and commerce. It was introduced commercially by Monsanto Company in 1974 and is used by landscapers, farmers, groundskeepers, and commercial gardeners. The primary ingredient in Roundup is glyphosate, a chemical that kills weeds by blocking proteins essential to plant growth. It has been linked to a type of cancer called non-Hodgkin’s lymphoma. We are investigating cases involving non-Hodgkin lymphoma related to the commercial application of Roundup/glyphosate. Contact: John.Tomlinson@beasleyallen.com, Danielle.Ingram@beasleyallen.com, Michael.Dunphy@beaselyallen.com or Rhon.Jones@beasleyallen.com.

State and Municipalities Litigation – Our firm is representing the States of Alabama and Georgia in the opioid litigation. We also represent states and certain local governments in environmental or toxic exposure claims. Many times, individuals are either barred from bringing an environmental claim or it is not a practical solution. These types of government cases may involve issues of environmental catastrophe, or some other type of pollution. One of the most notable cases handled by Beasley Allen on behalf of states for environmental issues is the BP Oil Spill litigation. For more information, contact Rhon.Jones@beasleyallen.com.

Opioids – Beasley Allen is representing Alabama and Georgia against both manufacturers and distributors of opioids for increased costs related to the opioid epidemic. These lawsuits allege the crisis was created by the pharmaceutical industry, which instead of investigating suspicious orders of prescription opiates, turned a blind eye in favor of making a profit. They intentionally misled doctors and the public about the risks of these dangerous drugs, and state governments are left struggling to cope with the consequences. Contact: Rhon.Jones@beasleyallen.com, Jeff.Price@beasleyallen.com or Rick.Stratton@beasleyallen.com.

Mesothelioma and asbestos-related diseases – Mesothelioma is a highly aggressive and rare form of cancer usually affecting the lining of the lungs (pleural) or abdominal cavity (peritoneal). Occasionally, it also may affect the lining of the heart (pericardial). The only known cause of mesothelioma is exposure to asbestos. About 2,000 new cases of mesothelioma are diagnosed in the United States each year. For years, asbestos was widely used in many industrial products and in building construction for insulation and fire protection. When asbestos is broken or disturbed it can release microscopic fibers that can be inhaled or ingested, posing a health risk, including the development of asbestos diseases and mesothelioma. Contact: Sharon.Zinns@beasleyallen.com or Rhon.Jones@beasleyallen.com.

Defective 3M Earplugs – Beasley Allen lawyers are investigating claims related to defective combat earplugs manufactured by Minnesota-based 3M Company. The earplugs were issued to thousands of military personnel serving in combat in Iraq and Afghanistan and used in training exercises in the United States. Numerous soldiers are now complaining of permanent hearing loss related to the defective ear plugs. Other soldiers have complained of tinnitus, commonly referred to as “ringing” in the ears. The dual-sided earplugs allegedly were improperly designed and manufactured so that the earplugs did not fit snugly in the wearer’s ear canal. Contact: Rhon.Jones@beasleyallen.com, William.Sutton@beasleyallen.com or Danielle.Ingram@beasleyallen.com.

Leukemia and Benzene exposure – Benzene is widely used in a number of industries and products, yet many people remain unaware of the toxic danger of this chemical substance. Exposure to products containing benzene, whether through inhalation or skin absorption, can cause life-threatening diseases including Acute Myeloid Leukemia (AML), Myelodysplastic Syndrome (MDS), lymphomas and aplastic Anemia. Some of these diseases do not manifest themselves until several years after exposure to benzene. Due to certain statute of limitations for bringing a claim of this nature it is important to contact an attorney as soon as possible if you believe your condition is a result of benzene exposure. Contact: John.Tomlinson@beasleyallen.com.

PFC Contamination in Water Systems – In May 2016, the U.S. Environmental Protection Agency (EPA) issued new lifetime health exposure guidelines for perfluorooctane sulfonate (PFOS) and perfluorooactanoic acid (PFOA) in the water supply. After the EPA issued the new exposure limits, Beasley Allen filed suit for two water systems impacted in Alabama. The EPA advisory focused on PFOA and PFOS, man-made chemical compounds that are used in the manufacture of non-stick, stain-resistant, and water-proofing coatings on fabric, cookware, firefighting foam, and a variety of other consumer products. Contact: Ryan.Kral@beasleyallen.com, David.Diab@beasleyallen.com or Rhon.Jones@beasleyallen.com.

E-cigarette Explosions – We are investigating cases involving severe injuries caused by exploding e-cigarette devices and exploding e-cigarette batteries. These explosions have been linked to faulty e-cigarette products, defective lithium-ion batteries, and insufficient warnings for users. These cases involve personal injury including serious burn injuries. Please contact our Toxic Torts section for assistance with cases you may have involving these devices. Contact: William.Sutton@beasleyallen.com.

You should have no difficulty in getting through to a lawyer in our firm seeking information or assistance on a specific case. However, if you do have difficulty reaching any of the lawyers listed above as the primary contact for a specific case, you can contact one of our four Section Directors and she will 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 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 bi-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 TIP OF THE MONTH FOR TRIAL LAWYERS

The Importance Of Simplicity To Jurors

Lance Gould, a lawyer in our Consumer Fraud & Commercial Litigation Section, is furnishing practice tip for trial lawyers. Lance has been with the firm since 1997 and has tried a large number of cases before a jury.

People spend hours on end each day consuming media: it could be television, radio, Instagram, Twitter, or Facebook. It’s a constant consumption of information. If you want to get someone’s attention, you must strive for simplicity.

Jurors often find the law to be intimidating, the facts of a case complex, and the application of the law to the facts a real challenge. The goal of a trial lawyer should be to tell a straightforward and compelling story, as simply as possible. A story that is stripped of legal jargon, irrelevant facts, and unnecessary background that may serve only to distract and confuse the jury.

Lawyers tend to talk too much and try to exhibit how smart we are. We should work hard to keep our messages short, to the point, and in everyday language. A smart trial lawyer knows that “plain-talk” is always better than a bunch of “fancy words” with the same meaning. “Plain-talk” is not only easy to understand, it effortlessly packs more emotional power in a message without giving the appearance that you’re trying too hard to persuade. When conveying a message to jurors we should resist some of the legal jargon we learned in law school and convey information in simple words and easily understandable terms.

A good story can be relatively short, and it can reach hearts and minds with fewer words. Jurors favor easy-to-follow narratives. Simple sentences are more powerful and easier to remember than complex ones. A soundbite is better than a rambling paragraph. Simplistic storytelling is crucial at all stages of the trial.

Today’s jurors do not tolerate repetition and boredom on the part of the lawyer and reflect this by adverse verdicts against the offender. In the courtroom jurors simply stop listening and begin thinking about other things. Jurors want the bottom line, and they want it simply as well as briefly. Keep it simple.

RECALLS UPDATE

We are again reporting a large number of safety-related recalls. We have included some of the more significant recalls that were issued in February. If more information is needed on any of the recalls, readers are encouraged to contact Shanna Malone, the Executive Editor of the Report. We would also like to know if we have missed any safety recalls that should have been included in this issue.

Automotive Recalls

Ford Motor Company (Ford) is recalling certain 2013-2018 Lincoln MKT and Ford Flex and Taurus vehicles with the Police Interceptor or SHO Performance Pack. The rear suspension toe links may fracture due to stress on the rear suspension. A fractured rear toe link will cause a sudden change in vehicle handling and increase the risk of a crash.

Toyota Motor Engineering & Manufacturing (Toyota) is recalling certain 2011-2019 Corolla, 2011-2013 Matrix, 2012-2018 Avalon, and 2013-2018 Avalon Hybrid vehicles. During certain crashes, the air bag electronic control unit (ECU) may malfunction, possibly disabling the deployment of the air bags and/or seat belt pretensioners. In the event of a crash, air bags and/or seat belt pretensioners that do not deploy as intended may increase the risk of injury.

Toyota Motor Engineering & Manufacturing (Toyota) is recalling certain 1998-2000 RAV4, 1998-1999 RAV4 EV and Celica and 1997-1998 Supra vehicles. These vehicles were equipped with Non-Azide Driver air bag Inflators (NADI) and do not contain phase stabilized ammonium nitrate (PSAN) propellant. Due to a manufacturing issue, the NADI inflators may absorb moisture, causing the inflators to rupture or the air bag cushion to underinflate. In the event of a crash necessitating air bag deployment, an inflator rupture may result in metal fragments striking the driver or other occupants. An underinflated air bag may not properly protect the occupant. These scenarios increase the risk of serious injury or death.

Tesla, Inc. (Tesla) is recalling certain 2015-2016 Model X vehicles. The aluminum bolts that attach the power steering gear assist motor to the gear housing may corrode and fracture causing a reduction or complete loss of power steering assist. Loss of power steering assist would require a higher steering effort, especially at lower speeds, which may increase the risk of a crash.

Volkswagen Group of America, Inc. (VW) is recalling certain 2000-2001 TT Roadster, 2000 TT Coupe, 1999 Audi A8, 1998-2000 Audi A6, and 1999-2000 Audi A4 vehicles equipped with Non-Azide Driver air bag Inflators (NADI) that do not contain phase stabilized ammonium nitrate (PSAN) propellant. Due to a manufacturing issue, the NADI inflators may absorb moisture, possibly causing the air bag to deploy improperly in the event of a crash.

Volkswagen Group of America, Inc. (Volkswagen) is recalling certain 2018 Atlas vehicles. The vehicles may be equipped with an incorrectly manufactured air bag sensor, which can delay or disable air bag deployment when necessary.

General Motors LLC (GM) is recalling certain 2019 Chevrolet Silverado 1500 and GMC Sierra 1500 vehicles. These vehicles received updated software for the Electronic Brake Control Module (EBCM). This software has an error and, as a result, the vehicle’s electronic brake assist may be disabled. As such, these vehicles fail to comply with the requirements of Federal Motor Vehicle Safety Standard (FMVSS) number 126, “Electronic Stability Control” and 135, “Light Vehicle Brake Systems.” The loss of electronic brake assist can increase the risk of a crash.

General Motors LLC (GM) is recalling certain 2003-2004 Pontiac Vibe vehicles equipped with a front passenger air bag assembly replaced under a prior recall. The replacement air bag may not unfold as designed during inflation in high temperature conditions, possibly resulting in the air bag not inflating properly. An air bag that does not inflate properly increases the risk of injury in the event of a crash.

General Motors LLC (GM) is recalling certain 2014-2015 Cadillac CTS-V Sport vehicles equipped with 3.6L Twin Turbo V6 engines. The roll pins in the rear-axle differential may fracture. If roll pins fracture while the vehicle is in motion, the rear wheels may lock up and the driver can lose control of the vehicle, increasing the risk of a crash.

Jaguar Land Rover North America, LLC (Land Rover) is recalling certain 2020 Discovery vehicles. The second row seat frame assembly may be missing fasteners, resulting in a seat frame with insufficient strength. In the event of a crash, the seats may not properly secure the occupants, increasing their risk of injury.

Mercedes-Benz USA, LLC. (MBUSA) is recalling certain 2019 A220 and A220 4MATIC vehicles. In certain operating conditions, the rearview camera software may cause a delay in displaying the rearview camera image. As such, these vehicles fail to comply to Federal Motor Safety Standard (FMVSS) number 111, “Rearview Mirrors.”

Mercedes-Benz USA, LLC. (MBUSA) is recalling certain 2018-2019 E63 AMG 4MATIC, E63S AMG 4MATIC Wagon, S63 AMG Cabrio 4MATIC, S63 AMG Coupe 4MATIC, and S63 AMG 4MATIC and 2019 G63 AMG 4MATIC, AMG GT63 4MATIC, AMG GT63S 4MATIC vehicles equipped with 4.0L 8-cylinder gasoline turbocharged engines. The oil feed line to the turbocharger may leak. An oil leak in the presence of an ignition source such as hot engine or exhaust components can increase the risk of a fire.

Chrysler (FCA US LLC) is recalling certain 2019-2020 Ram 2500 and 3500 Pickup vehicles equipped with six-speed automatic (68RFE) transmissions. A build-up of pressure and heat inside the transmission may result in a transmission fluid leak from the dipstick tube. The leaking transmission fluid may contact the turbocharger or another ignition source within the engine compartment, increasing the risk of a fire.

Chrysler (FCA US LLC) is recalling certain 2020 Jeep Wrangler vehicles. The left side lower control arm bracket and weld may not be correctly positioned. An improper weld may allow the lower control arm to separate from the axle, which can increase the risk of a crash.

Chrysler (FCA US LLC) is recalling certain 2014-2019 Ram ProMaster vehicles equipped with 3.6L engines. The transmission shifter cable may separate and disconnect from the transmission, causing the vehicle to not perform shifts intended by the driver and the gear shift lever position not matching the actual transmission gear. The driver may be unaware of the actual gear position and unintended vehicle movement can occur, increasing the risk of a crash.

Mitsubishi Motors North America, Inc. (MMNA) is recalling certain 1998-2000 Montero vehicles. These vehicles were equipped with Non-Azide Driver air bag Inflators (NADI) and do not contain phase stabilized ammonium nitrate (PSAN) propellant. Due to a manufacturing issue, the NADI inflators may absorb moisture, causing the inflators to rupture or the air bag cushion to underinflate. In the event of a crash necessitating air bag deployment, an inflator rupture may result in metal fragments striking the driver or other occupants. An underinflated air bag may not properly protect the occupant. These scenarios increase the risk of serious injury or death.

Honda (American Honda Motor Co.) is recalling certain 1997-1998 Acura 2.2CL, 1998-1999 Acura 2.3CL, 1997-1999 Acura 3.0CL, 2001 Acura 3.2CL and Acura MDX, 1998-2000 Honda Accord Coupe, Accord Sedan, Civic Sedan, Odyssey and Acura 3.5RL, 1999-2000 Acura 3.2TL, 1996-2000 Civic Coupe, 1997-2000 CR-V, 1997-1998 EV Plus, and 1998-1999 Isuzu Oasis vehicles. These vehicles were equipped with Non-Azide Driver air bag Inflators (NADI) and do not contain phase stabilized ammonium nitrate (PSAN) propellant. Due to a manufacturing issue, the NADI inflators may absorb moisture, causing the inflators to rupture or the air bag cushion to underinflate. In the event of a crash necessitating air bag deployment, an inflator rupture may result in metal fragments striking the driver or other occupants. An underinflated air bag may not properly protect the occupant. These scenarios increase the risk of serious injury or death.

Honda (American Honda Motor Co.) is recalling certain 2001-2002 Acura 3.2CL, 2000-2003 Acura 3.5RL, 2000-2001 Acura 3.2TL, Honda CR-V and Honda Odyssey, 2001-2002 Acura MDX and 2000 Accord Coupe, Accord Sedan, Civic Coupe, and Civic Sedan vehicles. These vehicles may have received a replacement driver frontal air bag module as part of a vehicle repair. Due to a manufacturing issue, the replacement NADI inflator may absorb moisture, causing the inflator to rupture or the air bag cushion to underinflate. In the event of a crash necessitating air bag deployment, an inflator rupture may result in metal fragments striking the driver or other occupants. An underinflated air bag may not properly protect the occupant. These scenarios increase the risk of serious injury or death.

Honda (American Honda Motor Co.) is recalling certain 2018-2020 Odyssey vehicles. The wire harness for the third row seat accessory power outlet may get pinched between the unibody and rear trim panel, possibly damaging the wires and causing an electrical short. An intermittent electrical short could overheat the wire harness, increasing the risk of a fire.

Honda (American Honda Motor Co.) is recalling certain 2020 Passport and Pilot vehicles. The certification label may have been printed with ink that can be wiped away with a solvent, removing the Gross Axle Weight Rating (GAWR) and Gross Vehicle Weight Rating (GVWR) information. If the operator is unable to refer to the label information, the vehicle may be overloaded, increasing the risk of a crash.

Isuzu Technical Center of America, Inc. (Isuzu) is recalling certain 2020 Isuzu NPR HD, NPR XD, NQR and NRR and Chevrolet 4500HD, 4500XD, 5500HD and 5500XD and 2019 Isuzu NPR HD GAS, NPR GAS and Chevrolet 4500 and Chevrolet 3500 vehicles equipped with a dual mode belt locking mechanism seat belt assembly. Due to a manufacturing issue, the seat belt webbing locking mechanism may not properly restrain the occupant as intended. In the event of a crash, if the occupant is not properly restrained, there is an increased risk of injury.

Hyundai Motor America (Hyundai) is recalling certain 2020 Kona vehicles. The certification label may indicate incorrect Gross Axle Weight Rating (GAWR). As such, these vehicles fail to comply with the requirements of Federal Motor Vehicle Safety Standard (FMVSS) numbers 567, “Certification” and 110, “Tire Selection and Rims.” An incorrect GAWR could result in the vehicle being overloaded, increasing the risk of a crash.

Hyundai Motor America (Hyundai) is recalling certain 2006-2011 Elantra and 2007-2011 Elantra Touring vehicles. Moisture may enter the Anti-lock Brake (ABS) Module and result in an electrical short. An electrical short within the ABS Module may cause an engine compartment fire, even when the car is turned off, increasing the risk of an injury.

Kia is recalling more than 193,000 cars and minvans in yet another move to fix nagging problems that could cause engine fires. The largest of two U.S. recalls released by the government covers certain 2013 and 2014 Optima midsize cars. They have 2.4-liter direct fuel injection or 2-liter direct injection turbocharged engines. Kia says a fuel hose can deteriorate and crack due to engine heat. The hoses can leak and cause fires. A fix is still being developed. The recall is expected to start April 16. The second recall covers certain 2011 and 2012 Sedona minivans. The fuel injector rail can crack from exposure to heat, causing a gas leak. Dealers will replace the injector part starting April 16.

Polaris recalls Brutus Utility Vehicles (UTVs) due to Collision and Crash hazard. The rear brake line can become punctured causing the brakes to fail, posing a collision and crash hazard. This recall involves Model Year 2017–2018 Polaris Brutus utility vehicles (UTVs) with the following model names. The two-seated vehicles are gray, black and blue. The vehicles have “POLARIS” stamped on the front grille, “POLARIS BRUTUS” on the sides of the utility bed, and “DIESEL HD” on the front fenders.

Polaris recalls Pro XD Utility Vehicles (UTVs) due to Collision and Crash hazard. The rear brake line can become punctured causing the brakes to fail, posing a collision and crash hazard. This recall involves Model Year 2019 Polaris PRO XD utility vehicles in two- and four-seat configurations of models 4000D, 2000D and 200D 4X2. The utility vehicles are gray, black, and orange with “POLARIS” stamped on the front grille, “POLARIS COMMERCIAL” on the sides of the utility bed, and “PRO XD” on the front fenders.

Bobcat Company recalls Utility Vehicles (UTVs) due to Collision and Crash hazard. The rear brake line can become punctured causing the brakes to fail, posing a collision and crash hazard. This recall involves model year 2017-2018 Bobcat 3650 utility vehicles. The recalled utility vehicles are white and black with orange decals. “Bobcat” is printed on the hood of the utility vehicle and “3650” is printed on the rear box.

Tire Recalls

Alliance Tire Americas, Inc. (Alliance Tire) is recalling certain Galaxy DH241-G 16H commercial truck tires in size 11R24.5 with DOT date codes 2519 through 4619. The tires may have been improperly vulcanized, allowing the tread to separate from the casing. The tread separation can reduce vehicle handling, increasing the risk of a crash.

Other Consumer Recalls

Infantino’s Go Forward 4-in-1 Evolved Ergonomic, Flip Front2back and Up Close Newborn infant carriers are all being recalled. Roughly 14,000 carriers are included in the action. The Consumer Product Safety Commission (CPSC) is recalling the carriers after learning that the buckles on the device could break, resulting in the children falling to the ground. They were widely sold by both Target and Amazon last November and December, with a price range of $30 to $50. To date, no injuries have been reported. Four specific carriers are included in the recall (lot codes are sewn into the inside of the carrier):

  • Go Forward 4-in-1 Evolved Ergonomic Carrier – lot code: 2018 0619
  • Go Forward 4-in-1 Evolved Ergonomic Carrier – lot code: 2018 0719
  • Flip Front2back Carrier – lot code 2018 0719
  • Up Close Newborn Carrier – lot code 2018 0719

Products can be returned for a free replacement at the place of purchase.

Evenflo has recalled the Pillo Portable Nappe Inclined Sleepers model number 12132125 to Prevent Risk of Suffocation. Infant fatalities have been reported with other manufacturers’ inclined sleep products, after the infants rolled from their back to their stomach or side, or under other circumstances.

The Delta Incline Sleeper with Adjustable Feeding Position for Newborns (and other branded versions listed above) with model numbers 27404-2255, 27404-437, 27404-758, and 27404-942 is being recalled to prevent the risk of suffocation. Infant fatalities have been reported with other manufacturers’ inclined sleep products, after the infants rolled from their back to their stomach or side, or under other circumstances.

Graco Recalls the Little Lounger Rocking Seats to prevent risk of suffocation. The Graco Little Lounger Rocking Seat™ is two products in one, a rocking seat and a vibrating lounger. Most models (model numbers 1872034, 1875063, 1875102, 1877160, 1882081, 1896313, 1908957, 1914283 and 2047734) have multiple incline positions and one model (model number 1922809) has one incline position. Infant fatalities have been reported with other manufacturers’ inclined sleep products, after infants rolled from their back to their stomach or side, or under other circumstances.

Summer Infant recalls SwaddleMe by your Bed Inclined Sleepers to prevent risk of suffocation. This recall involves the SwaddleMe By Your Bed Sleeper inclined sleepers with model number 91394. Infant fatalities have been reported with other manufacturers’ inclined sleep products, after the infants rolled from their back to their stomach or side, or under other circumstances.

Pier 1 recalls Desk Chairs due to fall and injury hazards. This recall involves five collections of Pier 1 upholstered swivel desk chairs. The adjustable chairs have a base with five wheels and were sold in various colors. Pier 1, China, the model number and the manufacture date code in MMYYYY format are printed on a label located on the underside of the seats. They were manufactured from April 2019 through September 2019. The chair’s legs can break, posing fall and injury hazards.

K-Apparel recalls children’s Lounge Pants due to violation of the Federal Flammability Standard; Burn Hazard. The children’s lounge pants fail to meet the flammability standard for children’s sleepwear that requires sleepwear to be either snug-fitting or flame resistant, posing a risk of burn injuries to children. This recall includes children’s 100% cotton lounge pants. The lounge pants were sold in 18 prints. The lounge pants were available in children’s sizes small through extra-large. The loungewear pants have the brand name “TINFL” and one of the following lot numbers printed onto an inside side seam label: 58500-51, 58500-52, 58500-53, 58500-54, 58500-55, 58500-56, 58500-57, 58500-59, 58500-60, 58500-61, 58500-62, 58500-63, 58500-65, 58500-66, 58500-67, 58500-69, 58500-70, and 58500-71.

Sun Organic recalls Wintergreen Essential Oils due to failure to meet child resistant packaging requirements, which poses a risk of poisoning. The product contains the substance methyl salicylate, which must be in child resistant packaging as required by the Poison Prevention Packaging Act (PPPA). The packaging of the product is not child resistant, posing a poisoning risk if the contents are swallowed by young children. This recall includes all 2-, 4-, 8-, and 16-fluid-ounce amber glass bottles of Sun Essential Oils, Wintergreen sold prior to April 12, 2019. The label on each bottle displays the Sun Essential Oils logo, an image of an American Wintergreen plant, states “Wintergreen,” and lists the size of the container.

Juratoys recalls Bead Maze Toys due to choking hazard. The wooden triangle shape piece fails to meet the mandatory federal standard for small parts, posing a choking hazard to young children. The recall includes a round wood-based bead maze toy in the shape of the Eiffel Tower with a Sophie giraffe figure and three wooden shapes: Orange triangle, red heart and green star, that sort into the wood base. The gray Eiffel Tower stands 8 inches tall on a green circular base measuring 6 3/4 inches in diameter.

Country Home Products recalls DR Walk Behind Leaf Blowers due to projectile hazard. The blades inside the leaf blower can break off and discharge from the unit, posing a projectile hazard to the user or bystanders. This recall involves DR Walk Behind Leaf Blowers, including DR PREMIER 1200, DR PRO 2000 and DR PRO 2000SP. The blowers are three-wheeled walk behind blowers with an orange circular metal face with a black center with “DR” printed on the front.

Infantino recalls Infant Carriers due to fall hazard. The buckles on the infant carriers can break, posing a fall hazard. This recall involves Infantino soft infant and toddler carriers. The front facing infant carriers are cotton with a front padded pouch. The carriers have a black body and black straps or a gray body and black straps.

Rawlings recalls Catcher’s Helmets due to risk of head injury. The back plate of the catcher’s helmet can fail to protect the player, posing a risk of head injury to the user. This recall involves the Rawlings CHMACH-SR (Senior) Catchers Helmet.

Rooms To Go recalls Patmos Chaise Lounge Chairs due to violation of Federal Lead Paint Ban. The paint used on the chair’s metal frame contains levels of lead that exceed the federal lead paint standard. Lead is toxic if ingested by young children and can cause adverse health effects. This recall involves the Patmos Chaise Lounge Chair, which is sold in brown and gray colors. The chair is covered with a tightly woven, synthetic, resin/all-weather wicker. The chair also has an adjustable backrest. The chair measures 34 inches wide, 83 inches deep, and 11 inches high.

Fanim Industries recalls Harbor Breeze Santa Ana Ceiling Fans due to injury hazard that were sold exclusively at Lowe’s Stores. The fan’s blade holders can break allowing the blade to be ejected from the fan, posing an injury hazard to consumers. This recall involves Harbor Breeze 48-inch Santa Ana Ceiling Fan, model LP8294LBN, UPC code 840506599178. The model number can be on the fan motor as well as on the inside of the battery compartment cover of the included handheld remote control. The recalled fan has two dark walnut fan blades, brushed nickel blade arm holders and a frosted white glass globe containing a light bulb.

Textron Specialized Vehicles recalls gas-powered Golf, PTV, Utility and Shuttle Off-Road vehicles due to fire hazard. The starter generator wire can be improperly secured, allowing it to come into contact with the vehicle’s exhaust, posing a fire hazard. This recall involves gas-powered E-Z-GO, Cushman and Tracker brand off-road vehicles manufactured from November 2018 through June 2019 with certain non-sequential serial numbers ranging from 3377720 to 3440924.

Yamaha recalls Golf Cars due to crash hazard. The front wheel hubs on the golf cars can crack causing the front wheels to detach, posing a crash hazard that could result in injury or death to the user or bystander. This recall involves four model-year 2020 golf cars, including “Drive2 QuieTech,” “Drive2 AC,” “Drive2 EFI,” and “Drive2 DC.” The vehicles were sold in various colors, including blue, green, red, gray, tan, silver, and white.

As you can see, there have been a large number of recalls since the last issue. We included many of them in this issue. Those we felt to be of the highest importance and urgency are included. If you need more information on any of the recalls listed above, visit our firm’s web site at BeasleyAllen.com. We would also like to know if we have missed any significant recall that involves a safety issue. If so, please let us know. As indicated at the outset, you can contact Shanna Malone at Shanna.Malone@beasleyallen.com for more recall information or to supply us with information on recalls.

FIRM ACTIVITIES

Employee Spotlights

Ryan Kral

Ryan Kral is a lawyer in the firm’s Toxic Torts Section, joining the Section in October 2011. His practice currently focuses on representing water systems against companies alleged to have polluted their water supply with perfluorinated chemicals. In addition, Ryan investigates other environmental contamination cases as well as cases where individuals have been harmed by exposure to toxic substances.

Early in his career at the firm, Ryan was part of the team that represented trucking businesses in the Hot Fuel multidistrict litigation (MDL) against oil companies that eventually resulted in more than $20 million in settlements. He also represented businesses, commercial fishermen, and individuals who suffered injuries resulting from exposure to oil and dispersants as part of the BP Oil Spill litigation.

Ryan enjoys problem-solving and says that is what drew him to the practice of law. “Analyzing a complex legal issue that requires me to think outside the box presents a tough yet welcome challenge,” Ryan said. “Lawyers have the ability to use our specialized knowledge to serve the community and improve the profession.”

The Birmingham, Alabama, native received his undergraduate degree from Birmingham-Southern College in 2008, where he majored in political science and minored in Spanish. He graduated Phi Beta Kappa and magna cum laude. Ryan graduated from the University of Alabama School of Law in 2011. During law school, he worked in the Civil Law Clinic representing individuals in various civil litigation matters. He has also served as a judicial intern for Jefferson County Civil Circuit Judge Michael Graffeo and as a law clerk for a private practice firm in Birmingham.

Helping clients is Ryan’s favorite part of practicing law. He said, “Meeting people and earning their trust to resolve their problem is humbling and motivating. There is no greater feeling than obtaining a satisfactory result for a client.”

The up-and-coming lawyer has been selected to the Midsouth Super Lawyers “Rising Stars” list since 2018, which recognizes the top up-and-coming attorneys – those who are 40 years old or younger, or who have been practicing 10 years or less. Additionally, Ryan was selected for the Top 40 Under 40 designation by the American Academy of Attorneys for the Personal Injury Law section in Alabama. Lawyers receiving this designation are rising stars and have top-tier skills and ethics. Ryan was also selected to the National Trial Lawyers Association’s Top 40 Under 40 for Civil Plaintiffs. In 2018, Ryan was selected as the Beasley Allen Lawyer of the Year for the Toxic Torts Section.

During his time at the firm, Ryan explained that he enjoys how Beasley Allen combines the resources of a big firm but maintains the feel of a small firm. Ryan says:

Although we work on high stakes litigation, the firm never feels like a corporate machine like many large firms. I’ve always been able to get advice from our experienced attorneys no matter how busy they are. This fosters a strong sense of community within the firm and is a testament to the firm’s leadership.

Ryan is a member of the Alabama State Bar Young Lawyer’s Section, the Montgomery County Bar Association and the Alabama Association for Justice. He is married to the former Claire Nikrant of Cleveland, Ohio. They live in Montgomery with their miniature Goldendoodle Walter and attend Holy Spirit Parish.

Ryan, a very good lawyer, has a bright future as a trial lawyer. He is totally dedicated to the firm’s mission. We are blessed to have Ryan at Beasley Allen.

Kelly Allen

Kelly Allen, a Legal Assistant in the Toxic Torts Section, has been with the Firm for 17 years. She is assigned to the Roundup litigation, which is headed by John Tomlinson. Kelly also assists with trial technology and graphics.

Kelly’s husband Michael is retired from active service and is now a contractor for the Department of Defense. Their oldest, Morgan, is a psychiatrist. Their middle child, Clayton, is a local artist and their youngest, Logan, has taught their family about the world through the eyes of autism.

Kelly says she and her husband enjoy keeping their grandkids as much as possible. She loves traveling and playing instruments. Kelly was originally a music major in college, so she says music is still “very near and dear” to her heart and is a favorite outlet for unwinding. Kelly says:

I love working at Beasley Allen because I truly believe in what we do here. I have witnessed first-hand the suffering that our clients have experienced as well as the blessings that many of them have received through the court system. We have had some truly amazing clients over the years and many of them have touched my heart in a way that I can’t even explain.

Kelly does very good work. She cares about the clients and their cases and is dedicated to helping them receive justice. We are fortunate to have Kelly with us.

Mary Jane Coats

Mary Jane Coats has been with the Firm for 10 years. She is a Clerical Assistant in our Personal Injury & Product Liability Section. Mary Jane assists with projects, getting trial exhibits ready for trial, helps post mail and is part of switchboard relief.

Mary Jane has been married to David Coats for a year. They recently bought a house in Prattville and love living there. David is employed at Progress Rail as an electrician and has been there seven years. Mary Jane has a 26-year-old son Billy Smitherman, who graduated from Auburn University, lives in Huntsville and works at Magnolia River, a service provider for utility pipeline operations.

Mary Jane has two kitties named Chevy and Sadie. In her spare time you can find Mary Jane reading, sitting on the patio, and playing with the cats!

When asked what her favorite thing is about working at Beasley Allen, Mary Jane says, “getting to work with all the staff. It’s something different every day!” Mary Jane is another good hard-working employee who is dedicated to serving the firm’s clients. She does very good work. We are fortunate to have Mary Jane at Beasley Allen.

Shelley Reiske

Shelley Reiske, who has been with the Firm for 14 years, is an Accountant II in our firm’s Accounting Section. She works with the Mass Torts Section providing payments of invoices, check requests, visa accounts and other financial needs within their Section.

Shelley lives in Prattville and has three children – Erica, Madison and Hunter. She also has four granddaughters – Ella, Brinley, Mila and Sadie. In her spare time Shelley enjoys traveling, learning to play golf, working out and spending time with family and friends.

When asked what her favorite thing is about working at Beasley Allen, Shelley says, “it is the family atmosphere the firm provides. The investment made in getting to know each of their employees while providing the opportunity to learn and grow. I myself am so thankful for having had the opportunity to work at Beasley Allen and all the knowledge I have gained under the supervision of Julie Grimes and now Michelle Parks. Every day I look forward to coming to working alongside some of the most amazing people. Y’all are the best!”

Shelly is a very good employee who has an important job in the firm. She works hard and is totally dedicated to the firm. We are fortunate the have Shelly with us.

SPECIAL RECOGNITIONS

Beasley Allen Lawyers Selected To Highly Competitive Leadership Forum

Two of our rising star lawyers were selected to the Alabama State Bar’s Leadership Forum Class 15 this year. Liz Eiland and Leon Hampton will represent the firm well and will incorporate this experience into their practice. At the beginning of the year, Liz and Leon were also named as two of the firm’s newest principals.

Liz joined the firm’s Mass Torts Section in 2012. She is currently handling cases for individuals harmed by opioids, including infant clients born with neonatal abstinence syndrome (NAS) and other opioid-related complications. Liz was recently named by The National Trial Lawyers to the Alabama Top 40 Under 40 and was selected for the Alabama State Bar’s Leadership Forum Class 15. She is a member of the Alabama State Bar, the Montgomery County Bar Association and the Alabama Association for Justice. Liz attended Troy University and Samford University’s Cumberland School of Law.

Leon first joined Beasley Allen while in law school, working as a law clerk. He returned to the firm’s Consumer Fraud Section in August 2017 and is currently working on class action, employment and whistleblower claims. He currently serves as the President-Elect of the Alabama Lawyers Association. Leon is also an executive board member for the Capital City Bar Association and a member of the Alabama State Bar and the Montgomery County Bar Association. Leon attended Alabama A&M University and Samford University’s Cumberland School of Law.

The Alabama State Bar explained that the Forum is now in its 16th year and is honored as a dynamic and highly effective program for nurturing and developing leadership skills and values among a select group of qualified, promising attorneys each year. Entry to the program is competitive for the 30 positions each year. Since its inception in 2005, Leadership Forum has illuminated a pathway for more than 400 graduates to move the profession forward with ethical, servant-minded and community leadership. Alabama State Bar President Christy Crow, who was a member of Leadership Forum Class 3, in a statement, said:

The Alabama State Bar is thrilled to bring together this remarkable group of attorneys from across Alabama. With personal and professional training components, this program not only is an investment into the future of the Bar, but the state as a whole. Leadership Forum graduates will become even more equipped to contribute to the future of our state.

A number of firm lawyers are alumni of the program and continue to support it as it grows and fosters leaders among our state’s bar.

Sources: Alabama State Bar

FAVORITE BIBLE VERSES

Chad Cook, a lawyer in the firm’s Mass Torts Section, furnished verses for the issue. Chad had this to say:

The world can be a scary place, particularly during an election season! There is so much that we see on television and read online that can overwhelm us and worry us. Over the past few weeks, I have focused on a couple of scriptures that I believe demonstrate the Lord’s presence and power in our lives and reassure us that no matter what is happening in the world around us, He is in charge!

So do not fear, for I am with you; Do not be dismayed, for I am your God. I will strengthen you and help you; I will uphold you with my righteous right hand. Isaiah 41:10

It is reassuring to me to know that the God of the Universe extends his righteous right hand to me and knows me by name. This demonstrates to me how personal His love is towards me. We should rest in knowing that the Lord offers us an unmistakable peace that is only available through Him. If we trust Him, the waters of this world will not overwhelm us and the fires of the world will not consume us.

Do not fear, for I have redeemed you; I have summoned you by name, you are mine. When you pass through the waters, I will be with you; and when you pass through the rivers, they will not sweep over you. When you walk through the fire, you will not be burned; the flames will not set you ablaze. Isaiah 43:1

Hannah Sanders, one of the firm’s receptionists, supplied two verses this month. Hannah says:

I am a worry wart. I stress about things that have not even happened yet. I catch myself wanting to have control over every situation, and when I do not, it gives me anxiety. The verses in Philippians 4:6-7 are what I live by every day. When I catch myself getting all worked up and stressing out, I just give it over to the Lord, because I know this huge problem I think I am having is so minute to Him. God is in control of the situation and He has never let me down. Why should I worry? God has not lost a battle yet!!

Cast all your anxiety on him because he cares for you. Do not be anxious about anything, but in everything by prayer and petition with thanksgiving, present your request to God. Philippians 4:6-7

Lauren Miles, a lawyer in our firm’s Consumer Fraud & Commercial Litigation Section, furnished Psalm 86:16 this month. She said:

I’ve always carried this verse with me because of its priority in lifting everyone around you with support and the grace of God – I truly believe that when each of us are strengthened and supported, we are all better for it. I try to be mindful always that the love and strength of God is not limited – God loves the sinners and the saints equally. His unequivocal and unbounded love for each of us should be reflected in how we treat each other, and it is humbling and joyful to me when I see acts of support and God’s grace offered from each of us to all walks of life.

Turn to me and be gracious to me; give your strength to your servant, and save the son of your maidservant. Psalm 86:16

CLOSING OBSERVATIONS

Recommended Reading

I’d like to take the opportunity to put a couple of new books on your reading list. Both of these involve major cases that we have discussed in past issues of this Report, and which you probably saw on the news and followed the litigation. Both are cases I’m happy our firm could work on, as they made a significant difference not only for the individuals involved, but for the public and the cause of civil justice.

Cobalt Cover-Up: The Inside Story of a Deadly Conspiracy at the Largest Car Manufacturer in the World

By Lance Cooper

When Ken and Beth Melton approached Georgia lawyer Lance Cooper about the tragic death of their daughter Brooke in an auto accident, he could not imagine the path it would take. Brooke was killed after she inexplicably lost control of her Chevy Cobalt. As he began to investigate the potential wrongful death claim, Lance discovered shocking evidence that General Motors concealed an ignition switch defect for nearly a decade – resulting in 124 deaths, including Brooke’s, and risking the lives of millions more.

Thanks to the tireless dedication of Lance and the Meltons, this litigation ultimately secured justice for victims and transformed the entire auto manufacturing industry. The National Highway Traffic Safety Administration (NHTSA} fell under intense criticism and ridicule for its failure to take any meaningful action in dealing with GM’s ignition switch debacle, which continued unchecked for more than a decade. After conducting an internal review, NHTSA acknowledged that it possessed critical data about GM’s defective ignition switches but failed to interpret that information. It had failed to connect the dots.

We were proud to be able to work with Lance on these cases. He is a tremendous lawyer with a true heart for helping people.

Holding On To Integrity And Paying The Price: A Whistleblower’s Story

By Blake Percival

Blake Percival is a brave man who uncovered fraud in his job with the U.S. Investigation Services (USIS), which performed background checks for federal job applicants. The company was responsible for background checks on Edward Snowden and Aaron Alexis, the Navy Yard shooter.

Mr. Percival filed a whistleblower lawsuit in 2011 alleging USIS was not properly vetting the people it was screening for security clearances, defrauding the U.S. government by billing it for work it had not actually performed. It is estimated the fraud affected more than 650,000 background checks. In addition to false billing, by not performing its duties, USIS was putting national security at serious risk.

Larry Golston, who works in our Consumer Fraud section, represented Mr. Percival in a long battle to secure justice. In the book, Mr. Percival recounts the perils faced by whistleblowers, who often lose their livelihood while trying to right wrongs.

In the book, Mr. Percival had this to say about his first meeting at our firm:

As I left Beasley Allen, I had hope. I didn’t have much else, but I had hope. I had lived my life by the mantra that if I did the right thing, things would go my way. At this very moment, things for me in the near future were bleak, but I had hope, and I’d keep doing things the right way. … Thank you, Beasley Allen Law Firm, and specifically Larry Golston, for believing in me and not giving up.

Thank you, Mr. Percival, for your courage in speaking up no matter the personal risk. The world is a safer place because of you. As we have consistently stated, whistleblowers are the key to exposing corporate wrongdoing and government fraud. We were honored to fight by your side.

Whether you’re a lawyer or not, I highly recommend reading these fascinating books, which provide a look inside why we do what we do as trial lawyers. It is our mission to stand up for those who might otherwise not be able to fight back against corporate wrongdoing. The civil justice system levels the playing field, allowing the average person – you and me – to have an equal opportunity for justice. I’m extremely proud to be a trial lawyer, and that Beasley Allen was able to help in these two important cases.

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

Two Years After The Parkland Massacre, Has Anything Changed?

On Feb. 14, 2018, 17 students and faculty members who started the day as usual at Marjory Stoneman Douglas High School in Parkland, Florida, never returned home.

Students in South Florida and across the nation commemorated the two-year anniversary of the mass shooting by holding vigils, staging walkouts, and other activities meant to draw attention to the epidemic of gun violence in the U.S. and the lax gun regulations that allow these massacres to persist.

The Parkland school shooting, which injured 17 others and left hundreds more with emotional trauma, reinvigorated the gun control debate, spurred by a number of student survivors who took on activist roles and became the faces and voices of reform.

Students and teachers from Parkland helped galvanize gun-weary parents, children, and educators all over the United States, including many devastated by the Sandy Hook mass shooting in Connecticut that killed 20 children and six staff in 2012.

Three weeks after the Parkland shooting, Florida passed a “red flag” law that allows the courts to remove firearms from the possession of people who threaten violence or display other signs of emotional and mental disturbance that could lead to a shooting. The number of states with similar red flag laws more than doubled in the years after Parkland.

The law has been applied in Florida 3,500 times since, according to the Associated Press. And although the red flag laws gained even more momentum in the last half of 2019, some counties and cities are not using it to address credible threats.

Pinellas County Sheriff Bob Gualtieri, who leads a commission that investigated the massacre’s causes, told the AP that the Parkland shooter would have easily qualified for a red flag order and that his state has “needed this law for decades.”

While there has been progress, the U.S. still has far to go before mass shootings and gun violence in general no longer pose a constant worry and threat to Americans of all ages. Red flag laws no doubt have made many communities safer and almost certainly have saved many lives, but the gun violence numbers remain extremely grim.

In the two years since the Parkland shooting, 2,645 U.S. children 18 and younger were killed by guns, excluding suicides. In fact, according to Centers for Disease Control and Prevention (CDC) data, more children and teens were killed by guns in 2018 than car crashes. With these numbers, it’s unconscionable that any public official, especially legislators, would fail to act to keep our schools and streets safer with strong, meaningful gun control measures. We can’t continue to allow the NRA to run the show in our nation’s capital and in far too many state legislative bodies. How many more innocent children will have to be killed before public officials take the needed action?

Sources: NBC News, CDC, and CNN