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Leading the News
Feinberg explains compensation fund to Louisiana crowd.The AP (6/25) reports, "Kenneth Feinberg, the lawyer who handled payouts for families of Sept. 11 victims and will administer the $20 billion fund set up to compensate victims of the BP oil spill in the Gulf of Mexico, spent about an hour today answering questions and explaining how the process will work." A "crowd of about 100 people asked questions and made suggestions on what would work best for the fishermen, charter boat captains, seafood processors and others who have seen their businesses and incomes disappear because of the spill." The New Orleans Times-Picayune (6/26, Rioux) reports Feinberg, "who is taking over from BP as a third-party claims administrator, announced plans to expedite notoriously slow commercial claims by developing formulas to calculate losses for different types of businesses." Feinberg "advised spill victims to file claims, not lawsuits." USA Today (6/27, Moore) reported that Feinberg's "name is powerful enough to be a selling point in getting nearly 10,000 plaintiffs to accept the deal." NBC Nightly News (6/25, story 11, 2:10, Williams) ran a favorable profile of Feinberg, who said, "I am not a government official. I am not a BP official. ... My role is, Ken, get those claims paid." States planning to recover economic damages from BP. The Wall Street Journal (6/28, King, Searcey, O'Connell) reports that Gulf Coast states are preparing to seek multi-billion dollar compensation for the spill from BP. Louisiana, Mississippi, Alabama and Florida, will all seek to recover economic damages, though their strategies differ. Proposed class action filed on behalf of Louisiana chefs. Bloomberg News (6/26, Calkins, Fisk) reported, "Chef Susan Spicer, of Bayona restaurant in New Orleans and a judge on 'Top Chef,' sued BP Plc for damages to restaurants that can't access their customary supplies of fresh seafood from the Gulf of Mexico. Spicer filed a proposed class action on behalf of chefs 'whose occupation was destroyed and/or adversely and detrimentally affected' by the worst oil spill in US history, caused by the sinking of the Deepwater Horizon rig off the Louisiana coast in April." In the "Law Blog" at the Wall Street Journal (6/25), Nathan Koppel discussed BP's potential liability as covered in an earlier New York Times story. Scope of spill difficult to ascertain. In "The Numbers Guy" blog at the Wall Street Journal (6/26), Carl Bialik assesses the scope of the spill, observing that it is difficult to determine how much oil is actually leaking from the well. BP trading unit's prospects "uncertain." In a front-page story, the New York Times (6/28, A1, Schwartz) reports that despite being hit with the Commodity Futures Trading Commission's largest fine for market manipulation in the history of the agency in 2007, BP has "remained committed to the aggressive trading that brought in billions annually -- as much as a fifth of the company's total profits -- according to interviews with experts, government officials and other traders," but "now, with BP facing billions in liability claims from the Deepwater Horizon disaster, the trading unit's prospects are uncertain, and the resources the unit once took for granted are threatened." According to the Times, "there are already signs that trading partners are becoming wary of BP's financial outlook; one market participant, Bank of America Merrill Lynch, is halting long-term contracts with BP," and the company's deteriorating credit rating "makes it harder for traders to cheaply deploy vast amounts of cash." BP's finances may not be in good shape, says columnist. In a column in Bloomberg News (6/27), Alice Schroeder wrote, "Once perceived as a fortress built on low leverage and strong cash flows, BP Plc seems to have managed its balance sheet much the way it ran exploration projects -- dangerously. Projections the company is feeding investors about how much cash it will have to pay claims are finally getting the skepticism they deserve." With "so little room for error, BP must now resort to drastic measures to raise cash. By rapidly disposing of $10 billion of so-called noncore assets, the company may end up liquidating its balance sheet at fire-sale prices." BP says its oil spill cost has reached $2.35B. The Wall Street Journal (6/26, Chazan, Cimilluca) reports BP has added about $5 billion to its cash and available credit for costs surrounding the Gulf of Mexico oil spill. BP's total cash and available credit now exceeds $20 billion. The Hill (6/25, Needham) reports BP said Friday that its "oil spill cost is up to $2.35 billion." The cost "includes efforts to contain the spill, relief well drilling, grants to the Gulf states, claims paid to those hurt by the spill and federal costs." The New York Daily News (6/26, Alfano) says $2.35 billion is "an impressive number, but so, too, is the company's 2009 profit figure of nearly $14 billion, which dwarfs the cleanup's tab thus far." New Orleans Vietnamese fishing community suffers another blow. The Washington Post (6/27, Mui) reports that the "past few years have brought unexpected hardship to the tightly knit Vietnamese fishing community" in New Orleans. About 20,000 Vietnamese fishermen and shrimpers "live along the Gulf Coast -- about half of the total fishing community -- and many more work at the seafood processing plants, wholesalers and po-boy shops found at every traffic light. Now the sanctuary they found and the lives they built -- and rebuilt after Hurricane Katrina -- are threatened by the hemorrhaging oil in the Gulf of Mexico. Many Vietnamese worry they will not have the energy to start over yet again." Tropical storm may regain strength as it approaches Gulf. ABC World News (6/27, story 9, 2:30, Harris) reported, "And we are now in day 69 of that crisis, and all weekend, people have been nervously eyeing the forecast, wondering what will happen with Tropical Storm Alex. Tonight, Alex has been downgraded to a tropical depression, but it could gain strength as it moves into the Gulf. Forecasts say it will not hit the spill site, which gives people there a reprieve, but just for now." ABC added, "The good news, Tropical Depression Alex is staying well clear of here. So, oil containment and relief well drilling continues. But hurricane season has just begun, and storm could disrupt all of this in an instant, stalling relief and recovery efforts for two weeks." City on the water threatened by potential storms. The Washington Post (6/28, Achenbach) reports from the site where the Deepwater Horizon drilling rig used to reside, now "in its place is a roaring industrial complex, an emergency operation unlike anything in the history of the petroleum industry. More than 60 vessels are trying to capture the oil, burn it, disperse it, whatever it takes, while two giant rigs are drilling relief wells and officials keep their eyes on the weather reports, racing to kill the leaking well before a hurricane forces everyone to scatter to calmer waters." If the weather does turn violent, "all this will have to be hastily disassembled," so officials are anxious, because "this makeshift city can't ride out a major storm." Oil approaching Alabama coastline. NBC Nightly News (6/27, story 3, 1:35, Holt) reported, "While driving just west of Gulf Shores, Alabama we stopped along the beach to check things out. And this is what we found. A large pool of oil here along the beach and in other parts of the beach, brought in by the rising tide." Medical experts attempt to determine health risks of oil spill. The Miami Herald (6/26, Tasker, Figueroa) reported, "So far, most health problems among oil spill workers have been relatively mild, involving heat stress, respiratory problems, headaches, and throat irritations," HHS "spokeswoman Lisa Kaplowitz told a US Senate subcommittee last week." Meanwhile, "11 oil spill workers have been hospitalized briefly with nausea, dizziness and chest pains amid debate over whether they were caused by a dock cleaning chemical, the oil dispersant Corexit, heat and fatigue or a combination." This "lack of certainty led the US Institute of Medicine, health arm of the National Academy of Sciences, to hastily convene a symposium of experts in New Orleans on Tuesday and Wednesday seeking better understanding." Psychiatrists warn of emotional toll. The AP (6/28, McConnaughey, Stacy) reports "the relentless spill is bringing back feelings that are far too familiar" to those "still dealing with the physical and emotional toll wrought by Katrina five years ago," and "psychiatrists who treated people after Katrina and have held group sessions in oil spill-stricken areas say the symptoms showing up are much the same: Anger. Anxiety. Drinking. Depression. Suicidal thoughts." Families who depend on the fishing industry, "the backbone of the coastal economy, are especially hard-pressed as the waters that make up their livelihood are sporadically closed because of fears the oil will taint fish, oysters and shrimp," while "oil field workers, whose salaries are among the best the region can offer, worry about their industry's long-term future." ABC World News (6/27, story 8, 0:10, Harris) reported, "Down in the Gulf today, a reminder of the human toll of the oil spill disaster. There was a memorial service for a fishing boat captain who shot himself last week. Friends say William Kreuse was despondent over the crisis." Feldman sold Exxon Mobil stock just hours before striking down moratorium. The Washington Post (6/26, Mufson, Stephens) reports US District Judge Martin L.C. Feldman, "who presided over a challenge to the Obama administration's six-month moratorium" on deepwater oil drilling, "simultaneously owned stock in an oil company affected by the ban, according to a financial disclosure statement released Friday." Feldman "sold the stock in Exxon Mobil 14 days after the case was filed in New Orleans by a group of oil service firms -- and less than five hours before he struck down the moratorium." Feldman "said in a statement elaborating on the disclosure that he was unaware of his holdings in Exxon Mobil and a smaller oil company until 9:45 p.m. Monday, the day before he issued his ruling."
Civil Justice SystemJudge wants other defendants to participate in 9/11 first responders settlement.The AP (6/25) reported "the judge who approved the settlement for thousands of 9/11 first responders exposed to toxic World Trade Center dust wants other defendants to join it." US District Judge Alvin Hellerstein Friday urged "hundred of other defendants," including workers involved in the "extensive cleanup of buildings" near ground zero, to consider participating in the settlement. He also extended a "suspension" of all of the litigation but did not set an end date, the AP added. Cincinnati firm to administer 9/11 worker compensation fund. The Cincinnati Enquirer (6/26, Coolidge) reported, "Police, firefighters and others soon will be compensated for injuries suffered from the World Trade Center destruction - following settlements determined by [an Ohio] firm experienced in complex, emotionally charged personal injury cases. Garretson Firm Resolution Group has been named by a federal judge in New York to administer the $712.5 million that the government will pay to more than 10,000 workers injured in rescue, recovery and debris removal efforts following the 9/11 terrorist attack." The firm "will be paid about $3.5 million for its services." Arizona seeing more class actions.The Phoenix Business Journal (6/25, Sunnucks) reports, "Arizona is seeing a significant upswing in class actions and other lawsuits stemming directly from the poor economy and the mortgage crisis. Robert Schaffer, a partner and commercial litigator with Phoenix law firm Lewis and Roca LLP, said 34 class actions have been filed in federal courts in Arizona so far this year, and more are expected." Local attorneys "say banks, real estate businesses and companies that have laid off workers are the top targets, but some of the litigation is coming from plaintiffs who delayed their actions from 2008 and 2009." $173M computer chip settlement came after earlier $295M offer.The Recorder (6/28, Levine) reports, "With great fanfare, plaintiffs sent out press releases Thursday to announce a $173 million settlement in a class action over computer memory chips. But they could have had more than $100 million more if they had settled earlier. Back in 2006, a collection of defendant chip companies was ready to cut a check for $295 million, according to lawyers familiar with the talks." At the time, the plaintiffs were divided as to whether to accept the settlement, and as one attorney observed, "The doves couldn't move the hawks." Philip Morris to appeal class-action certification in lawsuit seeking chest scans.In the "MetroDesk" blog, the Boston Globe (6/25) reported, "Philip Morris USA says it plans to appeal a decision by a federal judge in Boston to grant class action status in a lawsuit that demands that the company pay for chest scans to see if heavy Marlboro smokers have early signs of lung cancer." CongressIndian trust settlement authorization caught in jobs bill filibuster.The AP (6/26) reported, "Caught in the Senate filibuster of a bill to extend unemployment payments is a $3.4 billion government settlement with hundreds of thousands of American Indians over claims that the Interior Department mismanaged their land trust accounts." The settlement authorization "is tucked into the Democrats' jobs-agenda legislation that fell three votes short of breaking a Republican filibuster in the Senate on Thursday, and now the future of the hard-fought agreement is in doubt." Lead plaintiff Elouise Cobell "said the money in the settlement belongs to the Indians and should not fall victim to a dispute over something else altogether." Massachusetts gets $3M grant from HHS for patient safety, medical liability reform.The Providence Business News (6/25, Davis) reported the Agency for Healthcare Research and Quality has awarded $25 million in grants, including $2.9 million to the Massachusetts Department of Public Health for a project "to engage clinicians, patients, malpractice insurers and state officials to expedite the resolution of medical errors in outpatient practices and improve communication in all aspects of care." The grants will support "efforts by states and health systems" to implement and evaluate approaches to "patient safety and medical liability reform," the paper added. InsuranceWhistleblower suit alleges hospital system helped WellCare hide millions from Medicaid.The Miami Herald (6/27, Gentry, Johnson) reported that Memorial Healthcare System (MHS), formerly known as South Broward Hospital District, "helped WellCare Health Plans hide some of the money it is accused of stealing from the Florida Medicaid program," according to a 60-page whistleblower "complaint by Sean Hellein, a financial analyst who worked for WellCare Health Plans from November 2002 until October 2007." The complaint "estimates the fraud at $400 to $600 million." Drug SafetyMerck loses $8M verdict in Fosamax case.The Wall Street Journal (6/26, Bray) reported that Merck & Co. lost a product-liability suit over whether its osteoporosis drug Fosamax (alendronate) caused osteonecrosis. Bloomberg News (6/25, van Voris, Weidlich) reported, "The jury set damages at $8 million," which was "$3 million more than the $5 million" sought by the plaintiff's lawyers. The case is the first of hundreds of "Fosamax cases, including suits with multiple patients," to go to trial. "The jury concluded that Fosamax was 'unreasonably dangerous due to defective design, and that its defective design was a legal cause of'" the plaintiff's injury, the AP (6/26, Johnson) reported. Lawyers argued that "evidence showed that Fosamax provides no benefit in preventing bone fractures for women...who did not have osteoporosis." The plaintiff suffered from "osteopenia, a condition in which bone density is beginning to decrease, and Fosamax is approved for preventing fractures in such women." Reuters (6/26) also covered the story. Employment/Workplace SafetyNYTimes criticizes SCOTUS arbitration ruling.The New York Times (6/27), in an editorial, says the Supreme Court, "ruled last Monday there was nothing wrong with requiring that the fairness of an arbitration clause be determined by -- an arbitrator. ... There are many ways in which an arbitration clause might be considered 'unconscionable.' What if an employer inserts a provision that the employee has to pay all arbitration fees? Or that the employer gets to pick the arbitrator?" The Times concludes, "Unless Congress changes the rules, these cases may never get back to the courts, where they have a chance for a fair resolution." Medical Errors/HealthcareLas Vegas Sun investigation reveals hospital dangers, errors.The Las Vegas Sun (6/27) reported, "As part of a two-year investigation, Sun reporters Marshall Allen and Alex Richards have obtained a record of every Nevada hospital inpatient visit going back a decade -- 2.9 million in all." According to the Sun, "Revealed are the dangers patients have unknowingly encountered as they enter delivery rooms, surgical suites, and intensive care units, including thousands of cases of injury, death, and deadly infection associated with stays in Las Vegas hospitals." Meanwhile, "Helen Haskell, director of the national advocacy group the Empowered Patient Coalition, said the Sun's analysis will allow patients to make better-informed decisions about where to seek care, exerting financial pressure on low-performing health care providers to improve." The Las Vegas Sun (6/27, Allen, Richards) reported that "over a two-year period -- 2008 and 2009 -- patients suffered preventable injuries, life-threatening infections, or other harm 969 times during their stays in Las Vegas hospitals, an exhaustive Las Vegas Sun investigation has found." The investigation found that Las Vegas hospitals "have higher than expected rates of accidental punctures and lacerations, blood clots, and deadly blood infections. Hospital insiders tell the Sun that a dangerous culture of mediocrity has become the status quo." Sun says patients should have information about hospital quality before checking themselves in. The Las Vegas Sun (6/27) editorialized that data on healthcare quality should not be difficult to find, but both "hospitals and the health care industry have fought attempts to make them more transparent." The Sun asserted that "patients should have information about hospital quality before checking themselves in." The paper also argued that "state regulators should make sure the hospitals are working to limit...preventable injuries and illnesses." Thousands of nurses punished by other states maintain licenses in California.The Los Angeles Times (6/28, Weber, Ornstein) reports that California's "Board of Registered Nursing has discovered that some 3,500 of its nurses have been punished for misconduct by other states -- hundreds even had their licenses revoked -- while maintaining clean licenses in California." Now, "as many as 2,000 of these nurses...will face discipline in California, officials estimate." According to the Times, "The board's discovery was prompted by a Times/ProPublica investigation last year that found hundreds of instances in which California nurses had been sanctioned elsewhere for sexual abuse, neglect, rampant drug use and criminality but could work freely in California." Product SafetyNew Orleans Habitat For Humanity investigating homes built with Chinese drywall.In a front-page story, the Sarasota (FL) Herald Tribune /ProPublica (6/27, A1, Kessler, Sapien) reported, "More than a year after first acknowledging it built nearly 200 houses with drywall from Taishan Gypsum Co., the New Orleans Area Habitat for Humanity is investigating its use of Chinese wallboard." Habitat officials "have long maintained that the 120,000-sheet stockpile of Taishan wallboard they bought in 2007 is safe." The group has now "discovered that it used even more Chinese drywall than previously thought and is examining another 50 homes, but it is unclear what Chinese company manufactured the material used in those homes." At "least half of the" 72 homes in the "Musician's Village" in the Upper Ninth Ward "were built with Chinese drywall, according to Habitat's own records, and the Herald-Tribune and ProPublica have found evidence to suggest the figure is higher." A similar version of the story appears at ProPublica (6/27, Sapien, Kessler). The New Orleans Times-Picayune (6/27) also covered the story. Last-minute Knauf settlement throws future of drywall litigation into question.The Sarasota (FL) Herald Tribune (6/28, Kessler) reports, "The entire" Chinese drywall litigation is "at a crossroads" after "a last-minute settlement was reached" in what was to be "the first jury trial against" Knauf Plasterboard Tianjin Co. Last week's case "would have been a pivotal showdown, when KPT planned to take its arguments that a more limited set of repairs" than those recommended by US District Judge Eldon E. Fallon in the multidistrict litigation "could be justified to a jury, using homes that had been built with a mix of their product and American drywall." The question at hand is whether "the lack of a trial and jury verdict make the potential for a global settlement for all affected homeowners more or less likely in the near future." Some attorneys believe that "getting a Chinese drywall manufacturer like KPT to agree to fix the two homes in accordance with Fallon's protocol from the previous two test trials means the scope of remediation the court had decided upon was being cemented. But other attorneys worried that KPT might have succeeded in stalling the momentum of the litigation and avoiding a jury verdict," without surrendering "its claims regarding jurisdiction." Most airline food produced in unsanitary conditions, analysis of FDA documents reveals.USA Today (6/28, Stoller) reports that according to the paper's analysis of FDA documents obtained via FOIA requests, the agency's "inspectors have cited numerous catering facilities that prepare airline food for suspected health and sanitation violations following inspections of their kitchens this year and last. ... The inspections were at the US facilities of two of the world's biggest airline caterers, LSG Sky Chefs and Gate Gourmet, and another large caterer, Flying Food Group." The companies "provide more than 100 million meals annually...for nearly all big airlines, including Delta, American, United, US Airways and Continental." The FDA documents cite improper food storage temperatures and the use of "unclean equipment and...workers who practice poor hygiene." Kellogg recalls 28M cereal boxes due to foul smell from plastic packaging.The Wall Street Journal (6/26, Brat, Becker) reported Kellogg Co. recalled Friday about 28 million boxes of cereal mainly targeted at children because of fears that foul smells and flavors from the boxes' plastic packaging can cause nausea and diarrhea. The company said the recall covers some of its Kellogg's Apple Jacks, Kellogg's Corn Pops, Kellogg's Froot Loops and Kellogg's Honey Smacks cereals distributed nationwide, and that the potential for serious health problems is low. Kellogg also said it is studying whether a wax-like compound in the packaging may be the cause of the problem. SecuritiesPlaintiffs' firm awarded 25% fees in Comverse securities class action.In the "Law Blog" at the Wall Street Journal (6/25), Nathan Koppel wrote that last week, Pomerantz Haudek won a fee dispute in a pending securities class action against Comverse Technology in which it is lead plaintiffs' firm. Brooklyn federal judge Nichoals Garaufis found that the requested 25% fee, or about $56 million, was reasonable. Said Garaufis, "While it may be that a lower percentage would also be sufficient, this court will not pretend that it has the expertise necessary to divine the ideal percentage," adding, "This court is particularly unwilling to undertake an endeavor in a case where the fee award was set on the open market, and where an improperly calibrated fee would provide a disincentive to future counsel to take risks and pursue large class settlements that the SEC cannot." | |||||
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