Is the case of Michael Jackson's wrongful-death slowly coming to a close? Read the latest on this issue from this CNN article.
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Los Angeles (CNN) -- Jurors began deliberations Thursday in the Michael Jackson wrongful-death trial, potentially bringing the contentious case to a close after five months of testimony and three days of closing arguments.
The 12 jurors spent two hours in the jury room Thursday afternoon before ending their day; they will return Friday morning for more deliberations.
Katherine Jackson's lawyer delivered his final arguments in the AEG Live trial Thursday morning, delivering his rebuttal to defense closing arguments.
AEG Live's Marvin Putnam had asked jurors to find Michael Jackson responsible for his death, not the company that promoted and produced his comeback concerts in 2009.
Jackson's mother and three children are suing AEG Live, contending the company was liable in the pop icon's drug overdose death because its executives negligently hired, retained or supervised Dr. Conrad Murray.
"Plaintiffs want you to hold a concert promoter liable for Michael Jackson's overdose in his bedroom at night, behind locked doors on June 25, 2009," Putnam told jurors. "An overdose of the drug administered to Mr. Jackson by his longtime doctor -- Dr. Murray -- who he'd been seeing for years, a doctor he brought to Los Angeles from Las Vegas."
"How dare they come up here and accept no responsibility and blame it all on Michael," Jackson lawyer Brian Panish said in his rebuttal.
Panish suggested that Jackson's share of blame was 20%, "but the rest goes on AEG."
When the trial began five months ago, Putnam warned he would show "ugly stuff" and reveal Jackson's "deepest, darkest secret."
The revelations that jurors heard from 58 witnesses over 83 days of testimony spanning 21 weeks included details of Jackson's drug use and his shopping for a doctor to give him the surgical anesthetic propofol that he thought would give him sleep.
"He was nearly half a billion dollars in debt," Putnam argued Wednesday. "His mother's house was near foreclosure, we didn't know that then. What else do we know now? That Mr. Jackson spent decades shopping for doctors to give him the painkillers he wanted. Mr. Jackson made sure we didn't know that."
Panish, the lead Jackson lawyer, conceded in his closing Tuesday that the singer may have some fault for his own death, but said "it's about shared responsibility."
Jackson did use prescription painkillers and was warned that using propofol at home to sleep was risky, "but he never had a problem until Dr. Conrad Murray was working and until Conrad Murray negotiated with AEG Live," Panish argued.
Who's to blame for Michael Jackson's death?
The AEG Live lawyer argued Wednesday that Jackson should take the full blame. "The sad truth is Mr. Jackson's death was caused by his choices and it would have happened no matter what -- with or without AEG Live."
The Jackson lawyer urged jurors to award the family between $1 billion and $2 billion in damages for what he called AEG Live's share of liability in Jackson's death -- to replace what Jackson would have earned touring, had he lived, and for the personal suffering from the loss of a son and father.
Putnam told jurors Wednesday that was "an absurd number."
Katherine Jackson testified that she filed the wrongful death lawsuit three years ago against AEG Live "because I want to know what really happened to my son."
Murray was convicted of involuntary manslaughter in Jackson's propofol overdose death.
The judge is allowing a television camera in court for the closing arguments and verdict.
Lawyer: Blame Jackson for his death, not AEG Live
Burden of "Poof"
Panish -- a former college football player who has a reputation for winning large damage awards -- appeared more aggressive in his rebuttal than in his initial closing arguments delivered Tuesday.
In what may become a much-repeated video highlight, Panish joked about how his AEG LIve counterpart had accused him of making up the estimate of $59 million that MIchael Jackson could have been expected to have given his mother and children in support had he lived.
"Poof! Poof! I just made it up!" Panish said dramatically as he pointed to Putnam, sitting at the AEG Live defense table. The line and gesture drew a laugh from some jurors.
Panish showed jurors that the figure was actually from a opinion provided by a financial expert that AEG Live hired to analyze the issue.
Putnam, in his closing Wednesday, referenced the expert's lower-end estimate of $21 million. The numbers could be important in guiding the jury if it decides to award damages to the Jacksons.
AEG Live's defense
Murray treated Michael Jackson and his children for minor illnesses while they lived in Las Vegas for three years, before the singer returned to Los Angeles to prepare for his "This Is It" comeback tour. It was Jackson -- not AEG Live executives -- who chose Murray to be his full-time doctor for his tour, the company's lawyers contend.
AEG Live Co-CEO Paul Gongaware negotiated to pay Murray $150,000 a month only because of Jackson's request to have his doctor with him as he performed 50 shows at London's O2 Arena, they argue.
"He told them 'We're bringing this doctor,' " Putnam said. "This was a choice Mr. Jackson made. He was a grown man."
AEG Live executives tried to talk Jackson out of taking an American doctor with him on tour, suggesting he could save money by using a physician in London, Putnam said.
"But Mr. Jackson was undeterred," he said. "Ultimately, it was his money, his doctor, his choice. He certainly wasn't going to take 'no' for an answer."
There was no need to check Murray's background because he was a licensed, successful doctor who was known to Jackson, Putnam said. "All AEG Live knew was Dr. Murray was Mr. Jackson's longtime doctor."
A key argument in the Jackson case is that AEG Live was negligent by not ordering a financial background check of Murray, which would have revealed he was in a dire financial situation and not successful. His desperation to keep his lucrative job led Murray to violate his Hippocratic Oath to do no harm by using the dangerous propofol infusions to put Jackson to sleep each night for two months, Jackson lawyers argue.
AEG Live executives had no way of knowing Murray was treating Jackson's insomnia with propofol in the privacy of his bedroom, their lawyers contend. Jackson was a secretive addict, adept at keeping family, friends and other doctors in the dark about his medical treatments, they argue.
But two doctors testified that they told Gongaware about Jackson's abuse of painkillers and his insomnia during tours in the 1990s, when the AEG Live executive served as tour manager. Jackson lawyers argue Gongaware, who was the top producer on the new tour, should have known that Jackson could suffer the same problems in 2009.
The deterioration of Jackson's health over the two months he was being treated by Murray was a red flag that there was a problem, but AEG Live executives negligently ignored the warning, Jackson lawyers argue. By June 19, he was frail, suffering chills, unable to do his trademark dances and paranoid, according to testimony.
"Everyone believed at the time that a 50-year-old man, who hadn't performed in a decade was tired, out of shape and very nervous," Putnam argued Wednesday. "That's what they believed at the time and it makes sense."
AEG Live would avoid a negative verdict if it is able to convince at least four of the 12 jurors that it did not hire Murray. It is the first of 16 questions on the jury verdict form. If jurors answer it with a "no" -- that AEG Live did not hire the doctor -- they would end their deliberations and the trial.
An AEG Live lawyer e-mailed an employment contract to Murray on the morning of June 24, 2009. Murray signed it and faxed it back to the company that day. But the signature lines for AEG Live's CEO and for Michael Jackson were never signed since Jackson died the next day.
But Panish, the lead Jackson lawyer, told jurors Tuesday that all the elements of an oral contract -- "just as valid as a written contract" -- were in place when Jackson died.
Murray had been treating Jackson for two months and the written contract stated that his start day was May 1, 2009. A series of e-mail exchanges involving Murray and AEG Live executives and lawyers support this argument, Panish said.
A look at the life of Michael Jackson
Blame and damages
If the jury concludes AEG Live has liability, it would have to decide how much the company should pay in economic and personal damages to Jackson's mother and children. They can use estimates of Jackson's "lost earnings capacity" -- the amount of money he could reasonably be expected to have earned if he had lived -- to guide them.
AEG Live expert Eric Briggs testified it was "speculative" that Jackson would have even completed another tour because of his drug use, damaged reputation and history of failed projects. He suggested the star may never have earned another dime.
Putnam's closing argument about damages must overcome the impression left on jurors Tuesday, when Panish played a video montage of Jackson performances.
"That is, I think, the best evidence of if Michael Jackson could have sold tickets -- not what Mr. Briggs would tell you," Panish told jurors.
Panish suggested jurors pick a number between $900 million and $1.6 billion for economic damages. They should add on another $290 million for non-economic damages -- or personal damages, he said.
Putnam argued that the number, if the jury finds AEG Live liable, should be closer to $21 million, the amount of money AEG Live's expert calculated Jackson would have given his mother and three children over the next 16 years. He couldn't have given them more because he had a $400 million debt that was getting deeper, he said.
"If Mr. Jackson had lived, it's hard to see how he would ever have dug himself out of that whole," Putnam said.
The last question on the verdict form asks jurors to assign a percentage that they believe represents Michael Jackson's share of blame in his death. The total damages owed by AEG Live would be reduced by that percentage.
While AEG Live lawyers did not suggest a percentage, Panish suggested jurors reduce the damage award by 20% to reflect Jackson's share of blame.
Michael Jackson's mom remembers her 'sweet little boy'
***
More legal issues and news are shared in this Evan Granowitz blog site.
Friday, September 27, 2013
Friday, September 20, 2013
Repost: Task Force Backs Changes in Legal Education System
A report that takes a look into the practice of most law schools in terms of providing little aid
to needy students is currently in the works. Read this New York Times article for the details.
***
Faced with rising student debt and declining applications to law schools, a task force of the American Bar Association is calling for sweeping changes in legal education, including training people without law degrees to provide limited legal services and opening the bar to those who have not completed four years of college and three years of law school.
Faced with rising student debt and declining applications to law schools, a task force of the American Bar Association is calling for sweeping changes in legal education, including training people without law degrees to provide limited legal services and opening the bar to those who have not completed four years of college and three years of law school.
The report, to be issued on Friday, does not refer specifically to President Obama’s suggestion last month that law schools mightlimit classes to two years, and have students spend their third year clerking or practicing in a firm. But it did recommend the elimination of the rules that law students must have 45,000 minutes in a classroom to graduate and that they cannot get credit for field placements that are paid.
The report describes an urgent need for change in the nation’s legal education.
“The system faces considerable pressure because of the price many students pay, the large amounts of student debt, consecutive years of sharply falling applications, and dramatic changes, possibly structural, in the jobs available to law graduates,” it said. “These have resulted in real economic stresses on law school, damage to career and economic prospects of many recent graduates, and diminished public confidence in the system of legal education.”
It called the predicament of the many recent graduates who may never get the kind of jobs they anticipated “particularly compelling.”
The report is still a draft, to be distributed for comment, then considered at the bar association’s 2014 meeting. If adopted there, it will be influential but not binding on either law schools or state bar associations.
Randall T. Shepard, the former Indiana chief justice who was chairman of the task force, said that within the group, the most controversial sections were those dealing with how legal education is financed and with the accreditation standards.
The report criticizes the practice of most law schools to provide little aid to needy students, reserving most of their scholarships for those with the highest credentials in part to help raise the school’s rankings.
“There were very prickly long discussions about whether the language in the report accurately describes the situation,” Mr. Shepard said. “The other issue where there was real disagreement was on the list of items in the accreditation standards that we thought should be liberalized or eliminated.”
Among the items on the list are the standards on credit for work before law school matriculation, distance education, student-faculty ratios, the proportion of courses taught by full-time faculty, tenure, physical facilities and more.
The overall idea, said James. B. Kobak Jr., a New York lawyer on the task force, was to free law schools to be more innovative and get away from the one-size-fits-all model.
But Leo P. Martinez, a task force member who is president of the Association of American Law Schools, said that while he generally embraced the idea of encouraging heterogeneity among law schools, he thought the standards helped to ensure an “irreducible minimum of quality.”
Mr. Shepard said that there had been little controversy over the use of nonlawyer practitioners, in part because the members were so impressed by Washington State’s experiment with limited-license legal technicians, trained and licensed to handle certain civil legal matters. That program’s success has led to an expansion to practitioners for domestic relations, an area in which many of those who come to court are now unrepresented.
The report, citing the wide variety of colleges in the United States, called for more differentiation and experimentation by law schools. It also recommended the creation of national standards for admission to the bar.
***
Interesting news and articles on the legal arena can be found in the Evan Granowitz blog site.
Sunday, September 15, 2013
Insane Clown Posse sued by their former lawyer for sexual harassment
| Image Source: huffingtonpost.com |
Insane Clown Posse’s former publicist and lawyer is suing the Detroit, Michigan-based hip hop group and its record label, citing wrongful termination, harassment, retaliation, and emotional distress.
The plaintiff, 32-year-old lawyer Andrea Pellegrini, who worked as an employee of the group’s Psychopathic Records for three years, described her work environment as hostile and rife with sexual harassment. According to Atty Pellegrini, the alleged abuses began in 2009 when she started work at the record company.
| Image Source: freep.com |
TMZ lists the following examples of the alleged abuses:
• In 2012, a Psychopathic Records employee named Dirty Dan told Atty Pellegrini that he had a huge sex organ and that he wanted to have sexual intercourse with her.
• In July 2012, after breaking up with her boyfriend and soon after changing her Facebook status to “single,” Dirty Dan offered her a clear dildo and told her that she might need it now that she’s single.
• On that same day, Atty Pellegrini alleges that Dirty Dan offered two female officemates with “vagina tighteners.”
• In August 2012, during the Gathering of the Juggalos, Atty Pellegrini was told that she could not use the private restroom and was instead forced to use the restrooms that were, more often than not, full with “naked male strangers.”
Famous for supernatural and horror-themed lyrics, Insane Clown Posse, formerly known as the JJ Boyz and Inner City Posse, insists through their lawyer that the allegations are untrue.
| Image Source: brooklynvegan.com |
This Twitter page for Atty Evan Granowitz contains more industry-related links and articles.
Monday, September 9, 2013
Pursuing human rights cases against corporations through common law
| Image Source: asifahmed081.blogspot.com |
If even a single state court will expand its common law to include the activities of an entity overseas, then corporations may have to face various human rights claims indefinitely. This possibility comes as a potential problem for many companies in spite of the fact that human rights activists may no longer rely on the Alien Tort Statute to pursue cases with multinational corporations.
While the Supreme Court questioned the viability of suits for alleged human rights violations pursued through the Alien Tort Statute in its decision on April 2013, the U.S. Court of Appeals for the District of Columbia Circuit recently held that cases could further develop with common-law claims.
| Image Source: laborrightsblog.typepad.com |
There are still ways for corporations to defend themselves against such suits, however. Courts can dismiss cases if there is another forum in which the case could be filed – one that is convenient for both the parties and witnesses. Furthermore, under Section 403 of the Restatement (Third) of Foreign Relations Law of the United States, courts should decline to exercise jurisdiction over a case overseas if doing so would be deemed unreasonable, which is determined by the link of the activity to the territory of the regulating state. With this, corporations can argue that the link of the alleged wrongdoing to the regulating state is weak, especially because it is filed by citizens who do not reside in the overseas territory in question.
| Image Source: csrandthelaw.com |
Evan Granowitz is an attorney at Wolf Group LA. Follow this Twitter account for more links to noteworthy developments that affect corporate litigation.
Tuesday, August 27, 2013
REPOST: Eastman Kodak wins approval of bankruptcy reorganization plan
Judge Allan Gropper overruled objections in favor of Eastman Kodak, making the company win approval of a bankruptcy reorganization plan. Read this Forbes Magazine article for details:
Eastman Kodak won bankruptcy-court confirmation of its reorganization plan at a hearing in Manhattan this afternoon, after Judge Allan Gropper overruled a handful of remaining objections from shareholders and the U.S. Trustee.
Image source: Forbes.com
Kodak creditors voted overwhelmingly in favor of the plan last week. The company, which filed for bankruptcy in January 2012, expects to emerge from Chapter 11 by Sept. 3.
Reorganized Kodak will be “a very different company than the one in the popular imagination, and a very different one than the one that filed for bankruptcy,” Kodak lawyer Andrew Dietderich, a partner at Sullivan & Cromwell, told Judge Gropper this morning. Since its bankruptcy filing, the iconic 121-year-old company auctioned its digital-imaging-patent portfolio for $527 million and sold its personalized-imaging and document-imaging business to the U.K. Kodak Pension Plan for $650 million. A streamlined Kodak will focus, post emergence, on its commercial-imaging business.
Kodak entered Chapter 11 last year with $6.75 billion in liabilities and assets of only $5.1 billion. The company blamed its financial woes on four main problems – the economic recession of 2008, costly retiree benefits, withering returns from its intellectual-property-licensing efforts, and strains on trade credit in the wake of negative publicity.
“Its decline and bankruptcy is a tragedy of American economic life,” Judge Gropper said today as he read aloud his opinion.
The company traced the demise of its traditional film business back at least a decade. As consumers shifted to digital photography, Kodak’s revenue declined from about $13.3 billion in 2003, to about $6 billion in 2011. During that same period, Kodak’s global workforce shrank from about 63,900 employees, to about 17,000.
Recoveries
Under Kodak’s reorganization plan, $375 million in second-lien claims will receive 85% of the reorganized company’s equity, subject to dilution under a new equity plan and certain conversion rights granted to the retiree committee in the case. In addition, second-lien holders will receive cash for any accrued and unpaid interest through the reorganization plan’s effective date.
Based on Kodak’s projected equity value of $441 million for the reorganized company, second-lien recovery is pegged at 100%, although holders are nonetheless considered “impaired” under the plan and were allowed to vote.
The remaining 15% of the equity in the reorganized company will be contributed to an “unsecured creditor pool” that would be distributed, on a pro rata basis, to holders of the company’s general unsecured claims and unsecured claims arising under a settlement with retirees that was reached in October 2012.
Kodak will set aside about $1.8 billion for allowed general unsecured claims, Dietderich said this morning, a recovery of about 4-5%. Retiree settlement unsecured claims are $635 million. The company’s current equity will be wiped out.
Kodak conducted a $406 million rights offering for unsecured creditors that will fund cash distributions to second-lien noteholders, backstopped by GSO Capital Partners, Blue Mountain Capital, George Karfunkel, United Equities Group, and Contrarian Capital.
Under the rights offering, holders of general unsecured claims and holders of retiree claims were offered the right to purchase up to 34 million shares of the reorganized company at $11.94 per share. Up to six million of those shares were offered to unsecured creditors as so-called “Section 1145 rights” under a provision of the bankruptcy code that allows new securities to be exchanged for claims. The remaining shares, including any unsubscribed Section 1145 rights shares, were offered to holders of unsecured claims and retiree claims who are “accredited investors” or “qualified institutional buyers” in order to qualify under certain securities registration exemptions.
Kodak’s ultimate value became a major point of contention during the hearing today, as a handful of shareholders made a last-ditch effort to convince Judge Gropper that the company is actually worth far more than it claims. Gropper allowed one shareholder to question Kodak’s valuation experts from Lazard, but gave him a short leash. Last week, Gropper denied a motion filed by shareholders seeking the formation of an official committee to represent their interests. It was the second time Gropper had denied an equity committee, with professionals funded by the estate.
Looking ahead, Kodak has said it anticipates “stabilization and then growth in revenue with a commercial imaging EBITDA improvement of approximately $327 million between 2013 and 2017.”
Kodak has said its commercial-imaging EBITDA improved by approximately $106 million between 2011-2012, explaining, “the significant improvement in EBITDA is a result of both Kodak’s increase in the installed base of new products introduced in the last four years and the effect of its accumulated annuities plus a strong focus on new growth markets and new product introductions that drive higher gross profit, as well as the concerted actions to reduce corporate cost structure through extensive partnerships and resource realignment.”
More specifically, the company projected operational EBITDA of $199 million for 2014, $282 million for 2015, $360 million for 2016, and $494 million for 2017, on gross profits for those years of $539 million, $628 million, $737 million, and $898 million, respectively.
The company has estimated that post-emergence, it will have a global cash balance of $815 million. Kodak CEO Antonio Perez will continue to serve as CEO for up to one year following emergence, or until the company’s new board names a successor. – John Bringardner/Alan Zimmerman
Bankruptcy litigation is one among the many areas of expertise of Atty. Evan Granowitz. Visit this Facebook page for more information.
Tuesday, August 20, 2013
REPOST: Senate hearing will examine the federal response to marijuana legalization
Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) announced that there will be a hearing on the 10th of September to investigate the discrepancies between federal and state laws on marijuana. This Forbes Magazine article discusses the details:
Today Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) announced that he will convene a hearing on September 10 to examine “conflicts between state and federal marijuana laws.” He has invited Attorney General Eric Holder and Deputy Attorney General James Cole to testify. Leahy, who said last December that he planned to hold a hearing on the issue this year, wants the Obama administration to let the legalization experiments in Colorado and Washington proceed:
"It is important, especially at a time of budget constraints, to determine whether it is the best use of federal resources to prosecute the personal or medicinal use of marijuana in states that have made such consumption legal. I believe that these state laws should be respected. At a minimum, there should be guidance about enforcement from the federal government."
Image source: Forbes.com
I trust that Leahy will go beyond the question of marijuana consumption to address production and distribution, which are the real issues as far as federal meddling goes. UCLA drug policy expert Mark Kleiman, who has advised the Washington State Liquor Control Board on marijuana regulation, argues that the administration also should go beyond “guidance about enforcement” by formalizing an agreement that the feds will refrain from interfering in exchange for state help with controlling interstate smuggling of newly legal marijuana. (Stuart Taylor made a similar proposal in a Brookings Institution paper published last April.)
In a new Journal of Drug Policy Analysis article, Kleiman notes that the Controlled Substances Act says the attorney general “shall cooperate with local, State, and Federal agencies concerning traffic in controlled substances and in suppressing the abuse of controlled substances.” Toward that end, “he is authorized to…notwithstanding any other provision of law, enter into contractual agreements with State and local law enforcement agencies to provide for cooperative enforcement and regulatory activities.” Such a contract, Kleiman says, would provide more assurance of federal forbearance than simple inaction. Alternatively, he says, Congress could authorize the attorney general to issue “waivers” exempting state-legal marijuana producers and sellers from federal prosecution as long as certain conditions aimed at minimizing diversion are met.
Here is Kleiman’s response to those who argue that the Justice Department has a duty to vigorously enforce marijuana prohibition even in states that have opted out:
"To the immediate objection that the Executive Branch—charged by the Constitution with the “faithful execution” of the laws—has no authority to acquiesce in the violation of some of those laws, there is an equally immediate rejoinder; those laws are now being violated and will continue to be violated, in ways the Executive is practically powerless to prevent in any case and still more powerless without the active engagement of state and local enforcement agencies. If “the abuse of controlled substances” can be more effectively suppressed with cooperative agreements than without them, then the mandate to cooperate for the purposes of the Act might be best carried out by explicitly agreeing not to do what the federal government cannot in fact do with or without such an agreement."
Kleiman, whom I interviewed today for an upcoming Reason article about legalization in Washington, tends to see Holder’s 10-month delay in responding to the passage of I-502 in that state and Amendment 64 in Colorado as a sign that the administration may be open to such cooperation. He notes that President Obama, in a December interview with ABC News, not only said that “going after recreational users” would not be “a top priority” for the federal government (which it never was) but also called for “a conversation” addressing the question, “How do you reconcile a federal law that still says marijuana is a federal offense and state laws that say that it’s legal?” Kleiman’s paper suggests a couple of ways.
Evan Granowitz is an attorney at the Wolf Group LA. He has been admitted to practice at all California State courts, Ninth Circuit Court of Appeals, US district courts, and Central and Eastern districts. This Facebook page provides more details about his practice.
Friday, August 16, 2013
REPOST: Raise the cap on malpractice awards
According to law makers, relaxing the $250,000 cap on malpractice award is a wise move. Find out more in this Los Angeles Times article.
For decades, advocates of tort reform have pushed to limit the amount that courts can award for noneconomic damages such as pain and suffering. The California Legislature first capped this type of damages in medical malpractice lawsuits in 1975, and roughly half the states have followed California's lead.
This summer, however, nearly 40 years after California's Medical Injury Compensation Reform Act first limited noneconomic damages in malpractice cases to $250,000, trial lawyers and consumer groups have unveiled a ballot initiative that would relax the cap considerably. If the measure qualifies for the ballot and is approved by voters next year, the allowable amount for noneconomic damage payouts for victims of medical malpractice would be quadrupled.
Relaxing the $250,000 cap, which has never been adjusted for inflation, is a wise move. As a reform idea, noneconomic damage caps have never made much sense.
One problem is that the effects of caps are not felt evenly. California's cap, for example, limits damages awarded to victims of medical malpractice, while people who sue for other reasons have no such strictures. Caps also have a much greater impact on those who are the most grievously hurt. Someone who is, say, severely brain damaged or paralyzed can collect no more for loss of enjoyment of life than someone who will eventually recover fully.
Caps also tend to disproportionately punish women, children and the elderly. A 2004 study of California medical malpractice jury verdicts compared awards before and after the law took effect, and found that caps significantly exacerbated gender disparities in damage awards. Women's pre-cap median jury awards were 94% of the median for men. After caps were imposed, however, the women's median dropped to 59% of the men's median. Both men and women were affected, but women were harder hit.
Why? Largely because of the kind of awards the cap limits and those it does not. The law does not limit damages that reimburse a person for actual monetary losses caused by an injury, such as lost wages and medical bills. But because women tend to earn less than men (and the elderly and children generally earn nothing at all), they often have less in lost wages for which they can be reimbursed. Women are further affected because some injuries they sustain overwhelmingly result in noneconomic, rather than economic, damages. A miscarriage or loss of fertility brought on by medical malpractice, for example, might cause severe emotional injury but little economic damage.
Award caps can also reduce an injured person's ability to sue, by limiting access to counsel. Attorneys handling tort litigation in the United States usually work on contingency: Clients pay nothing upfront, and lawyers are paid a portion of what is ultimately recovered. That means they're reluctant to take on cases with little chance of significant payouts. When damage awards are limited, cases may no longer be profitable for plaintiffs' lawyers. Because claimants without counsel rarely succeed in court, losing access to counsel means losing access to justice. Caps don't just cut compensation; they also, in many cases, close courthouse doors entirely.
Moreover, caps aren't good at doing what they purport to do. Damage caps were sold to the public, in part, as a way to inject predictability into the system. They were to be an antidote to "jackpot justice" — the notion that lawsuits are like a lottery, with unpredictable losers and winners. But as instruments go, caps are too blunt. While limiting some awards at the top, they do nothing to counteract the problem of big damage awards that fall beneath the cap level but that might nonetheless be regarded as excessive if the plaintiff's injury is slight.
If what we want, as some cap supporters claim, is more rationality and equity in the awarding of damages, it would be far better to have neutral fact-finders review damage awards and alter them when necessary, taking a plaintiff's particularized injury into account. Fortunately, our civil justice system already provides for just that: Judges have the power to reduce excessive awards, and studies suggest it's a power they frequently exercise.
Malpractice caps have also been marketed as part of the solution to soaring healthcare costs. Certainly, reducing healthcare costs is a worthy goal. But a number of studies have considered whether caps actually cut costs, and results have been mixed. Furthermore, even when an effect is found, it tends to be trivial, with caps cutting total healthcare costs on the order of 0.5%.
What's clear is that caps are weak medicine for most of their stated aims. Meanwhile, their side effects for those suffering the most grievous harm are serious. We in California have now had nearly four decades of experience with damage caps. It's high time for the $250,000 cap to be repealed or relaxed.
Follow this Evan Granowitz Twitter page for more extensive scopes in civil litigation.
| Image Source: latimes.com |
For decades, advocates of tort reform have pushed to limit the amount that courts can award for noneconomic damages such as pain and suffering. The California Legislature first capped this type of damages in medical malpractice lawsuits in 1975, and roughly half the states have followed California's lead.
This summer, however, nearly 40 years after California's Medical Injury Compensation Reform Act first limited noneconomic damages in malpractice cases to $250,000, trial lawyers and consumer groups have unveiled a ballot initiative that would relax the cap considerably. If the measure qualifies for the ballot and is approved by voters next year, the allowable amount for noneconomic damage payouts for victims of medical malpractice would be quadrupled.
Relaxing the $250,000 cap, which has never been adjusted for inflation, is a wise move. As a reform idea, noneconomic damage caps have never made much sense.
One problem is that the effects of caps are not felt evenly. California's cap, for example, limits damages awarded to victims of medical malpractice, while people who sue for other reasons have no such strictures. Caps also have a much greater impact on those who are the most grievously hurt. Someone who is, say, severely brain damaged or paralyzed can collect no more for loss of enjoyment of life than someone who will eventually recover fully.
Caps also tend to disproportionately punish women, children and the elderly. A 2004 study of California medical malpractice jury verdicts compared awards before and after the law took effect, and found that caps significantly exacerbated gender disparities in damage awards. Women's pre-cap median jury awards were 94% of the median for men. After caps were imposed, however, the women's median dropped to 59% of the men's median. Both men and women were affected, but women were harder hit.
Why? Largely because of the kind of awards the cap limits and those it does not. The law does not limit damages that reimburse a person for actual monetary losses caused by an injury, such as lost wages and medical bills. But because women tend to earn less than men (and the elderly and children generally earn nothing at all), they often have less in lost wages for which they can be reimbursed. Women are further affected because some injuries they sustain overwhelmingly result in noneconomic, rather than economic, damages. A miscarriage or loss of fertility brought on by medical malpractice, for example, might cause severe emotional injury but little economic damage.
Award caps can also reduce an injured person's ability to sue, by limiting access to counsel. Attorneys handling tort litigation in the United States usually work on contingency: Clients pay nothing upfront, and lawyers are paid a portion of what is ultimately recovered. That means they're reluctant to take on cases with little chance of significant payouts. When damage awards are limited, cases may no longer be profitable for plaintiffs' lawyers. Because claimants without counsel rarely succeed in court, losing access to counsel means losing access to justice. Caps don't just cut compensation; they also, in many cases, close courthouse doors entirely.
Moreover, caps aren't good at doing what they purport to do. Damage caps were sold to the public, in part, as a way to inject predictability into the system. They were to be an antidote to "jackpot justice" — the notion that lawsuits are like a lottery, with unpredictable losers and winners. But as instruments go, caps are too blunt. While limiting some awards at the top, they do nothing to counteract the problem of big damage awards that fall beneath the cap level but that might nonetheless be regarded as excessive if the plaintiff's injury is slight.
If what we want, as some cap supporters claim, is more rationality and equity in the awarding of damages, it would be far better to have neutral fact-finders review damage awards and alter them when necessary, taking a plaintiff's particularized injury into account. Fortunately, our civil justice system already provides for just that: Judges have the power to reduce excessive awards, and studies suggest it's a power they frequently exercise.
Malpractice caps have also been marketed as part of the solution to soaring healthcare costs. Certainly, reducing healthcare costs is a worthy goal. But a number of studies have considered whether caps actually cut costs, and results have been mixed. Furthermore, even when an effect is found, it tends to be trivial, with caps cutting total healthcare costs on the order of 0.5%.
What's clear is that caps are weak medicine for most of their stated aims. Meanwhile, their side effects for those suffering the most grievous harm are serious. We in California have now had nearly four decades of experience with damage caps. It's high time for the $250,000 cap to be repealed or relaxed.
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