Spring 2011 News - Analysis

Affordable Care Act repeal and Litigation Score: 
TAs of February 24th, 4 U.S. District Court judges have upheld the Constitutionality of the individual coverage mandate potions of the 2010 Patient Protection and Affordable Care Act (ACA); and,& 3 have ruled the Act unconstitutionally infirm in whole or in part , as a violation of the Commerce Clause. In one of twelve pending challenges, the Hon. Roger Vinson, in Florida et al v. Dpt. of HHS, et al, 3:10-cv-91-RV/EMT (N.D. Fla., January 31, 2011), in an action brought by the Attorneys General from 25 states, ruled that the entire Act is unconstitutional. Other rulings have considered only the constitutionality of the individual mandate provisions on various religious and commerce clause theories.

Republicans in Congress seek the repeal of the ACA. To date, bipartisan support, including that of the President, is mounting for repeal of the 1099 tax form provision which requires business reporting of the purchase of all goods and services over $600. The Senate has voted to repeal and the House Ways and Means Committee, on a party line vote, has cleared the way for a vote on the floor of the House. This provision in the ACA is one of many funding mechanisms for health care reform. It was calculated to add $17B in new tax revenue over a ten year period to fund expansion of coverage under the legislation. Its unpopularity with the business community will likely cause it to be the first significant ACA defunding action item of the 112th Congress.

Supreme Court issues two important product liability decisions:
In a decision authored by Justice Breyer, the Supreme Court held that federal safety regulations do not pre-empt state tort lawsuits claiming that an SUV manufacturer (Mazda) should have installed 3-point (lap and shoulder) restraints on rear seats. In this California wrongful death case, Williamson v. Mazda Motor of American, Inc. , --S. Ct. --, 2011 WL 611628 (2-23-11) (No. 08-1314), the Court determined that the federal safety standards are minimum standards only. After 9-1-07, most American made vehicles include lap and shoulder restraints in forward facing rear seats. However, today over 1 million vehicles remain in use that do not include this particular safety feature.

In a decision by Justice Scalia, the National Childhood Vaccine Injury Act was found to pre-empt all design defect claims against vaccine manufacturers for those who are seeking compensation for injury or death caused by the effects of a vaccine, Bruesewitz v. Wyeth , L.L.C., --S.Ct.--, 2011 WL 588789 (2-22-11) (No. 09-152)


Social Networking, insurance fraud and impeachment evidence:
Insurance claims investigators are attempting to make a dent in the $80B/year market for insurance fraud. In the health arena alone, 3-10% of the total annual payout is estimated to be fraudulent. Following the trend of employers and college admission officers, insurers are using free websites like Facebook, Twitter, and MySpace as part of their daily investigative routine. While mining data for inconsistent statements within applications or proof of claims, they are also discovering evidence of potential fraud. Through photographic inconsistencies between disability claims and social media lifestyle choices, they develop leads for pursuit of full-blown fraud investigations. Similarly, following a trend developed by the matrimonial bar and their investigators, attorneys across the full spectrum of civil and criminal litigation are developing compelling impeachment evidence for use at trial.

Postings on social network sites are governed in part by the Federal Stored Communications Act, which regulates distribution of private information in non-criminal matters. It protects personal data posted within social media from subpoena in civil cases. On the other hand, courts have allowed production of information posted on the public portions of networking sites, but have generally shielded password-protected or similarly limited access postings from discovery and use at trial. The trend seems to be shifting in favor of defense access in civil cases. Defense attorneys are working around the Stored Communications Act by requesting broad consent forms from injured parties. The scope of these consents often includes material in any format and necessary to the defense of a claim in which the plaintiff or insurance claimant placed their physical condition in controversy. Several courts have ruled that private comments on Facebook, MySpace, and Twitter are not protected by privilege and are reasonably calculated to lead to discoverable and relevant impeachment evidence.


Medical Malpractice reform in 2012?
President Obama's 2012 budget includes $250M in DOJ grant money for market based input into medical malpractice reform initiatives recommended in last year's bipartisan debt reduction commission report. Grants will be issued to states to consider and implement statutory malpractice reforms such as addressing non-economic caps on jury awards, developing health courts, legal defense funds for best clinical practices or rewarding programs that require doctors and hospitals to disclose mistakes early, offer apologies and compensation and implement corrective actions to avoid future patient harm.

House Republicans offer a different agenda for reform. The House Judiciary Committee voted to cap noneconomic damages in medical injury cases at $250,000 or twice the amount of economic damages, whichever is greater as part of the HEALTH Act of 2011. The Bill also restricts contingency fees based on the increasing value of the jury award and denies punitive damages in the case of products that meet FDA standards.


October News - Analysis 


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