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New York City

“Sue” York City has now become a perennial judicial hellhole with plenty of help from the once mighty but now crumbling Empire State’s capital in Albany, where personal injury lawyer and New York State Assembly Speaker Sheldon Silver strangles in its crib any toddling tort reform legislation that could, if allowed to reach maturity, reasonably limit the capacity of his fellow plaintiffs’ lawyers to get rich at the expense of everyone else, including consumers, taxpayers, those in need of health care, and those in need of a job. Silver also is fighting tooth and nail the efforts of Governor Andrew Cuomo to bring some much needed transparency to state lawmakers’ financial records and underreported conflicts of interest stemming from the other jobs they variously hold with law firms and consulting companies.

Among other specialties, Silver’s law firm, Weitz & Luxenburg, touts its prowess in asbestos and construction site slip-and-fall litigation, both of which increasingly threaten the integrity of civil justice in New York City and throughout the state. Meanwhile, thanks to lower-grossing but nonetheless enterprising slip-and-fall lawyers who aspire to be as rich as Silver, the “Big Apple” may have to consider a more accurate re-branding as the “Big Banana Peel” since it continues to pay through the nose for claims made by thousands of residents and visitors who cannot seem to keep their feet on city sidewalks. And God forbid those who take a legitimate tumble break something so badly that they need immediate medical care, because ever rising insurance premiums for doctors and hospitals – the highest in the nation – are forcing more care providers to turn out the lights.

SILVER’S FIRM EXERTING UNDUE PRESSURE ON ‘NYCAL’ JUDGES

With the epidemiological peak of mesothelioma cases behind us in the U.S., many civil court jurisdictions with still sizeable asbestos dockets are, in the interest of due process and fairer trials for defendants, generally moving away from the consolidation of multiple plaintiffs’ claims into a single case against a given defendant or defendants (see most notably Philadelphia’s definitive end to consolidation in early 2012 and a Baltimore judge’s more recent denial of a plaintiff firm’s motion to consolidate some 13,000 non-mesothelioma cases). But thanks in part to undue political influence exercised by Speaker Silver and a powerful partner in the personal injury law firm the speaker moonlights for, the judges presiding over the New York City Asbestos Litigation docket known as NYCAL are going in the opposite direction on consolidation, outlier verdicts and remittitur, and maybe on punitive damages, too.

Stipulating first that defendants in all jurisdictions settle the overwhelming majority of asbestos cases long before going to risky trials, aggressive consolidation of NYCAL cases raises those risks even higher. Publicly available court records show that, since the beginning of 2011, the average NYCAL plaintiff ’s verdict in a consolidated case was $29.8 million, more than nine times greater than the $3.2 million average verdict for individual cases. And the chance of a defense verdict in consolidated cases is only 1 in 5, whereas it leaps to 3 in 5 in individual cases which more fairly allow defendants to prove that plaintiffs were not exposed to asbestos from their products.

Meanwhile, the average jury award for plaintiffs in all NYCAL cases since 2007 is $21.7 million, roughly seven times larger than the $3.1 million average award in courts throughout the rest of New York State. And as NYCAL trials are increasingly likely to produce such outlier verdicts, NYCAL judges are decreasingly likely to reduce those verdicts in a procedure known as remittitur. From 1990 through 2005, the average trial court remittitur in a NYCAL case was $3.8 million, well within the $3 million to $5 million award range for malignancy cases established by controlling appellate precedent (see NY Appellate Division, 1st Dept. decisions in Pride, Mayer & Penn). But from 2006 through November 2013, that average has increased a whopping 300% to $11.4 million.

Conveniently for Weitz & Luxenburg attorneys, who regularly litigate NYCAL cases, Speaker Silver had the foresight to appoint one of his firm’s name partners, Arthur Luxenburg, to the powerful Judicial Screening Committee, which, according to the New York Times, “reviews candidates for the State Supreme Court and its Appellate Division, and makes recommendations to the governor.” So might a NYCAL trial judge who aspires to a future appellate court appointment tip the scales of justice to favor the clients of a firm with so much political influence over which judges will receive such appointments? Defense attorneys certainly think so, and NYCAL data seem to support such thinking. But if you need additional evidence, read on.

Since 1996 the case management order (CMO) governing NYCAL has set aside
punitive damages claims in order to preserve assets for the medical expenses of future plaintiffs. Weitz & Luxenburg attorneys in 2013, however, filed an application for punitive damages in a pending case with Administrative Judge Sherry Heitler. And rather than summarily deny the application in deference to the 17-year-old CMO agreement, Judge Heitler instead directed defendants to file a response by October 25, implying that she may be ready to make the lives of Weitz & Luxenburg asbestos lawyers that much easier – as if they were not already prospering with their NYCAL practice. In any event, the judge was to hear arguments on the motion December 16, and her ultimate decision will invariably influence New York City’s next ranking among the nation’s Judicial Hellholes.

And a final note on yet another questionable NYCAL claim recently filed by Weitz & Luxenburg on behalf of 69-year-old U.S. Congresswoman Carolyn McCarthy of Long Island. The lifelong pack-a-day smoker was diagnosed with lung cancer earlier this year, but could not realistically hope to win a lawsuit against tobacco companies. So she and her lawyers are suing some 70 defendant companies that can be tied to asbestos products and worksites from which, McCarthy alleges, her father and brother brought home asbestos dust on their clothing after work when she was a child. New York Times columnist Joe Nocera hopes McCarthy wins her battle with lung cancer, but adds, “the right thing for her to do is drop this lawsuit. All it has really accomplished is showing how asbestos litigation is a giant scam.”

SCAFFOLD LAW REFORM OBSTRUCTED AGAIN

In addition to its lucrative business in asbestos lawsuits, Speaker Silver’s law firm also aggressively litigates slip-and-falls and thus has an interest in killing any and all proposed reforms of New York’s antiquated “scaffold law,” which dates back to 1885 and is the only surviving state law in the nation that imposes on contractors absolute liability for any injuries related to falls from an elevation during construction or repair work. (Illinois had a similar law before repealing it 1995.) So whether a worker is drunk or stoned or otherwise chooses to ignore worksite safety precautions, the scaffold law “imposes liability even on contractors and [property] owners who had nothing to do with the plaintiff ’s accident,” wrote Judge Robert Smith for a unanimous New York State Court of Appeals in 2012. “And where a violation of the statute has caused injury, any fault by the plaintiff contributing to that injury is irrelevant.”

Plaintiffs’ contributions to their own injuries may be “irrelevant” to New York judges, but they are not irrelevant to the dwindling number of insurance companies willing to write policies for construction projects there. One major steel contractor told the New York State Senate Forum on Insurance Reform in October 2013 that the cost to renew his insurance this year was up over 500% compared to two years ago, despite an impeccable safety record. More broadly, contractors operating in New York City pay roughly three times more for insurance than those operating in the second most costly city, Philadelphia. And though there seems to be growing political support for modest reform that would apply a “comparative negligence” standard to construction-fall liability claims, Speaker Silver killed a similar bill earlier this year and is expected to prevent any such bills from becoming law as long as he holds office, even though the status quo continues to cost state taxpayers, private-sector developers and unemployed construction workers dearly.

CITY SLIP-AND-FALLS DOWN

If there is a hopeful note for New York City’s otherwise deteriorating litigation environment, it can be found on pages 33 and 34 of the Mayor’s Management Report for fiscal year (FY) 2013. Report data show that the city’s FY 2013 tort liability was actually down 3%, to $490.2 million, from FY 2012’s total of $506 million, continuing a slight downward trend since 2010. The number of new claims against the city was down, too, from 9,695 in 2012 to 9,528 in 2013, suggesting that the city’s new defense strategy is working.

The City’s Law Department, under the leadership of Corporation Counsel Michael Cardozo and his trusted chief litigator Lawrence Kahn, has moved away from a past willingness to settle virtually every tort lawsuit that targeted the city – even many that were plainly contrived. Now city attorneys are acting “aggressively to dismiss those cases that are without merit,” successfully “reducing the citywide payout for judgments and claims,” says the management report.

But with roughly 13,000 miles of sidewalks in the five boroughs, no shortage of slip-and-fall lawyers aspiring to emulate their heroes at Weitz & Luxenburg, and a new incoming mayor, Bill de Blasio, whose past embrace of groups prone to suing the city, it is hard to know whether city lawyers will be allowed to defend New York City taxpayers’ wallets as tenaciously as they have under outgoing mayor, Michael Bloomberg.

Meanwhile, beyond tort claims, the city paid out another $250.7 million in settlements and judgments for general law and contract disputes.

HOSPITAL CLOSINGS AND ACCESS TO HEALTH CARE

As with the above-noted construction insurance costs that are the highest in the nation as a result of litigation, medical liability insurance premiums for physicians and hospitals in New York are also the nation’s highest, according to Thomas B. Stebbins, executive director of the Lawsuit Reform Alliance of New York. In his recent letter to the editor published by the Times Ledger in Queens, Stebbins reported that, “In New York, 19 hospitals have closed since 2000, leaving several neighborhoods underserved.” Meritless lawsuits are a big reason for the closures, he added, as “astronomical medical liability costs are affecting access to healthcare,” hurting “those who need it most.”

Stebbins said medical liability insurance for doctors and hospitals “in New York costs more than anywhere else in the United States – double that of the next highest state, California.” And unless policymakers “address the spiraling costs of lawsuits, New York hospitals will continue to close.” And as total medical liability payouts throughout the state of New York continue to dwarf those of second-place Pennsylvania, steadily rising insurance premiums will likely convince more physicians to retire early or leave the state to practice elsewhere.

ETHICS SHOWDOWN

With an eye on the White House, perhaps, and frustrated by the legislature’s failure to pass an ethics law earlier in the year, Governor Andrew Cuomo signed an executive order in July 2013 to establish a so-called Moreland Commission “for the purpose of investigating public corruption” connected to lawmaker conflicts of interest that may stem from lucrative work outside the legislature with law firms and consulting companies, for example. Not surprisingly, many lawmakers, presumably with much to hide and apparently forgetting that their legislative salaries are provided by their taxpaying constituents, are resisting the commission’s efforts to subpoena related documents and communications.

It is hard to believe that, in 2013, New York is without an ethics-in-government law with teeth sufficiently sharp to dissuade a lawmaker in Albany from brazenly doing the bidding of an employer for which he or she moonlights and/or a client or clients of such an employer. But that appears to be the case. And as long as Sheldon Silver and his allies have anything to say about it, no such ethics law is likely to pass anytime soon. But that cannot stop the governor from using executive branch tools to shine a little light on the den of cronyism and self-dealing in the state capital.

But at least two law firms that employ lawmakers have already filed motions in Manhattan Supreme Court seeking to quash the commission’s subpoenas, and both Assembly Speaker Sheldon Silver and Senate Leader Dean Skelos have signaled their legislative colleagues that their attorneys will file similar motions. Desperately attempting to obfuscate and distract from the question of whether lawmakers’ outside income is influencing the official positions they take on matters before the legislature, Skelos wrote,

“[W]e will not allow an Executive to ignore the Constitution or the important principle of separation of powers.”

By “separation of powers,” Skelos must be referring to a constitutional clause he interprets as license for law- makers to peddle influence to the highest bidder and effectively defraud constituents and taxpayers.

To its credit, the commission, made up largely of sitting district attorneys and law-enforcement officials, is not backing down. A November 22 statement by commission attorneys said its subpoenas are fully lawful and added that “New York law prohibits members of the Legislature from receiving compensation relative to their official duties involving legislation and other government proceedings.” The commission issued a scathing preliminary report on December 2. Judicial Hellholes reporters will carefully watch the political and legal fireworks that will invariably affect litigation in the city and state.

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