Alaska Injury Law Blog

Mr. O'Donnell recently successfully concluded a jury trial against a defendant who caused a head-on collision on the Seward Highway. The defendant was driving her vehicle while intoxicated and had allowed her vehicle to cross the centerline.

The plaintiff, a young woman, suffered extensive hip, leg and foot injuries. The jury awarded an amount in excess of the statutory limit for non-economic damages. Non-economic damages include damages for pain and suffering, loss of enjoyment of life, disfigurement, physical impairment, and inconvenience. The total judgment, including stipulated medical expenses, totaled $4.2 million.

The Alaska Personal Injury Law Group, consisting of Neil O'Donnell, Mike Moody and Rick Vollertsen, has successfully resolved, either by way of jury verdict or settlement, numerous serious automobile claims over the past three decades. Through this track record they have developed extensive experience working with the medical, engineering and economic experts needed to successfully present such claims for their full value. Such experts include accident reconstruction engineers, biomechanic engineers, rehabilitation experts and economists.

Congratulations to my partner Mike Moody, and his co-counsel Dennis Mestas, for their excellent work in the Ennen v. Integon Insurance case. The Alaska Supreme Court recently held in Ennen v. Integon Insurance Corp., Opinion No. 6637 (1/20/12 Alaska), that insurance companies owe a duty of good faith and fair dealing to all their insureds, not just to the individual or the business which happens to be listed as the named insured on the policy. This is a very important decision. Insurance companies are liable for damages in tort when they breach their duty of good faith and fair dealing by, for example, hiding coverages from the insured, unreasonably low-balling the value of a claim, or unreasonably delaying or denying payment of a valid claim. This cause of action is called an insurance bad faith claim. It allows the insured to recover not just what the insurance company should have paid to begin with (before years of litigation finally made them do it), but also the additional damages the insured suffered in the meantime by not having the insurance policy benefits they should have promptly received from the insurance company. If the insurance company's improper conduct was reckless or intentional, the insurance company may also be liable for punitive damages.

In two earlier blog posts, we discussed how pervasive this type of improper claims handling is. The first post discussed the results of an 18-month investigation by CNN which concluded that many insurance companies engaged in systematic bad faith claims handling. The second post discussed an American Association for Justice Report which showed that such hardball claims tactics had gone hand-in-hand with record industry profits.

The Ennen v. Integon Indemnity decision is extremely important in light of these problems because many insurance companies (including Integon and Allstate) have taken the position that they owe no duty of good faith and fair dealing to their insureds who are not the named policy holder. A motor vehicle insurance policy typically protects many types of insureds who are not the named insured on the policy. For example, permissive drivers are covered under the liability coverage for any accidents they cause and medical payments coverage if they are injured. If they are injured by the negligence of another driver, they may be entitled to uninsured or underinsured motorist (UM/UIM) coverage. The policyholder's spouse and other resident relatives of the named insured and guest passengers are expressly included as insureds for UM/UIM coverage. If Integon's (and Allstate's) position had been accepted by the Alaska Supreme Court, they would have been insulated from bad faith claims by any of these insureds. Insurers in Alaska could have hidden policy benefits from these types of insureds; delayed their claims for years; or denied their claims entirely for no valid reason and faced no penalty whatsoever. If the insurance company got caught, it would only have to pay what it should have paid to being with.

Being able to sue for insurance bad faith, in addition to pursuing a contract claim for the original policy benefits, is an extremely important check on abusive practices of insurance companies. The Alaska Supreme Court noted that in the seven years that Integon Indemnity had failed to pay the seriously injured Jacob Ennen his rightful insurance benefits, he was at times on public assistance, unable to afford heating oil, and short on food. Insurance is supposed to protect insureds in their time of need. The Ennen v. Integon Indemnity decision creates an important, and extremely necessary, economic incentive for insurance companies to do what they promised to do in return for the premium dollars paid by the insured.

One of the increasingly common arguments I see defense experts make in our automobile collision practice and our aircraft crash practice involves the misuse of statistical evidence. Defense experts have taken the prior odds of a particular type of injury occurring in a certain type of accident and then applied that same statistical probability (which is often low) to support the defense argument that it is unlikely that a particular plaintiff suffered the injury she claims she suffered as a result of the accident. The fallacy arises from the fact that the expert is applying a probability rate derived from a large population group (everyone who was involved in a particular type of accident) to a very different and much smaller population group (individuals who claim they were in fact injured in that type of accident, who received medical treatment for their claimed condition, and then subsequently hired legal counsel and filed a lawsuit to recover damages for their claimed injuries). For example, let's assume an epidemiological study analyzes a large number of car crashes and concludes that less than 6% of vehicle occupants involved in rear impact collisions of less than 20 miles per hour had neck injuries that last more than six months. I have seen defense experts try to use this type of data to assert that it is extremely unlikely that a particular plaintiff really has the ongoing problems she claims to have because these types of symptoms usually resolve within six months. This is, however, complete statistical gibberish. The defense expert is applying the 6% statistical rate to a very different question, namely what percent of claimants who seek medical attention for their claimed continuing problems and subsequently file a lawsuit for their claimed continuing problems are really faking their injuries. The source study obviously never attempted to answer this question.

The "prior odds" statistical shell game only arises with injuries that are not objectively obvious and indisputable. A defense expert will not, for example, raise this argument where a car or aviation accident produces a compound fracture, paralysis or death. But these types of objective injuries do serve to illustrate the underlying illogic of the "prior odds" argument. Say, for example, that 6% of individuals who are involved in a vehicle rollover accident die. The forgoing defense experts are basically performing the equivalent of telling the deceased in a rollover accident that they cannot be dead because the vast majority of individuals survive rollover accidents.

Necessity is the mother of invention – in statistics as elsewhere. That is why it pays to think critically about what experts tell you, and do your research. An excellent article for further research on this subject is Forensic Epidemiology: A Systematic Approach to Probabilistic Determinations in Disputed Matters in the Journal of Forensic and Legal Medicine (2008) by Michael D. Freeman.

Most individuals who call our office recognize they can recover damages when they have been injured through the negligence of others. The wrongful conduct could be any number of things: drunk driving, running a stop sign, speeding, crashing a plane, marketing a defective product, creating a dangerous work environment. They understand the defendant will typically deny he was negligent. They are not surprised when the defendant next argues that even if he was negligent, the plaintiff's problems don't really exist, or were caused by something else, or were all pre-existing anyway. They understand that the defendant will finally argue that even if he was negligent, and even if he did cause the plaintiff's injuries, the resulting damages are nowhere as significant as plaintiff claims. Clients expect that if they ultimately prevail over all these defenses, they have won the war. Unfortunately, this is not necessarily the case.

Over the last decade, insurers and government agencies have become much more assertive in claiming priority repayment ("subrogation") rights from individuals who have received insurance or government benefits and subsequently recover damages in a personal injury or wrongful death lawsuit. This is a marked change from the traditional common law. Historically courts put the interests of the injured person ahead of the interests of insurance companies and government programs under what is called the "made whole" doctrine. Under the "made whole" doctrine, an injured person is entitled to be fully compensated for his loss before the health insurance company that paid plaintiff's medical bills is entitled to be repaid those expenses out of the proceeds of a lawsuit. For example, if a jury awarded a plaintiff $50,000 for medical expenses, $50,000 in lost wages and $50,000 for impairment, pain and loss of function, but the defendant only had $100,000 in insurance and no other assets, the plaintiff would receive the entire available $100,000 under the principle that insurance is first supposed to protect the insured.

Times have changed. Many health insurance policies and government programs have invested a great deal of effort over the past decade into re-writing policies and regulations in an attempt to abolish the "made whole" doctrine and limit other legal and equitable doctrines that place the interests of the injured person first. In general, they want to be paid first out of the funds you recover in your lawsuit, and they do not want to share any of the costs and attorney fees you incurred in producing that recovery. This has now become a very complicated area of the law. The rules that apply to one government program (Medicare) may not apply to other government programs (Medicaid, Veterans' Benefits, Workers Compensation, etc.). The interpretation and enforcement of contractual terms in insurance policies is also subject to a set of specialized statutes, regulations and case authorities. Sometimes finding an attorney with expertise in these types of specialized "subrogation" issues is as important as finding an attorney who can handle the traditional part of your claim. Now obtaining adequate compensation in a personal injury or wrongful death lawsuit often requires fighting a "two front war."

The attorneys at the Alaska Personal Injury Law Group have extensive experience in insurance matters including these types of subrogation issues. We have adopted novel responses to insurer and government subrogation priority claims. One approach relies on the unusual rule in Alaska that the prevailing party is entitled to reasonable partial attorney fees. We have told insurers that if they will not compromise the amount and priority of their subrogated interest, we will join them in the litigation as an additional defendant and make them hire an attorney and share the risk of an adverse fee award. Since insurance companies just want to sit back, share none of the risks and costs of the litigation, and have you send them a check at the end of the case, this puts them outside their comfort zone and creates a potent negotiating weapon. Winning the "second front" requires this type of strategic thinking from the outset of case.

May is a particularly perilous month for motorcycle and bicycle riders given the Alaska Personal Injury Law Group's totally non-scientific sampling of individuals who contact our office throughout the year. After six months or more of winter, auto and truck drivers are simply not used to looking for motorcycles and bicycles. This fact shows in accident statistics, emergency room visits, and resulting claims for compensation for injuries, damaged property, and lost income. Both the number of registered motorcycles and the number of motorcycle fatalities have been increasing since 1997. In response to these statistics, the National Highway Transportation Safety Administration (NHTSA), along with state organizations such as A.B.A.T.E. of Alaska Inc., promote May as "motorcycle awareness month" with the goal of "sharing the road with motorcycles." Motorcycles obviously have a much smaller profile than a vehicle, which can make it more difficult to judge the speed and distance of an approaching motorcycle. The initiative's key safety messages include that: motorcycles have the same rights and privileges as any other motor vehicle, motorists should expect to see motorcycles at any time and search aggressively for them, and motorcycles are entitle to a full lane width to safely maneuver. Obviously when an accident occurs, the motorcycle and its rider are at a distinct disadvantage. NHTSA statistics report that in fatal motorcycle/automobile collisions, 98% of the fatalities were motorcycle riders and only 2% were passenger vehicle occupants. So share the road!

See: http://www.nhtsa.gov/Safety/Motorcycles

The National Highway Traffic Safety Administration (NHTSA) estimates that 32,788 people died in traffic accidents in the United States in 2010, the lowest number of motor vehicle related deaths since 1949. This is a remarkable achievement given that the population of the United States more than doubled between 1949 (149 million) and 2011 (311 million). The largest regional decrease in deaths from motor vehicle collisions from 2009 to 2010 (- 12%) was in the Northwest Region which includes Alaska. NHTSA has not yet released individual state statistics for 2010. NHTSA attributes the continuing decline in the number of crash-related deaths and serious injuries to various factors including increased seat belt use, anti-drunk driving campaigns, stricter drunk driving laws, graduated driver's licenses, improved air bags, and safer road designs. See NHTSA Early Estimate of Motor Vehicle Traffic Fatalities in 2010,http://www-nrd.nhtsa.dot.gov/Pubs/811451.pdf

Individuals who are severely or catastrophically injured must assert a one-time claim for all the economic losses they will experience over their remaining life expectancy on account of their injury. An injured person only gets one trial. The injured individual cannot go back to court in 5, 10 or 15 years because the assumptions that were used in his or her economic loss analysis proved too optimistic. This is a particularly important issue given the present economic downturn. Many statistics which economists have traditionally relied on to calculate economic loss have limited or diminished relevance today. For example, historical statistics concerning the availability of alternative work, and prevailing wages for such work, now overstate the opportunities that are actually available to an injured person in today's economy. In addition, just focusing on the most recent economic data does not necessarily solve this problem. The traditional measure of unemployment does not include discouraged workers who are no longer actively looking for work, thus substantially overstating the actual health of the labor market. A final example involves historical statistics concerning work-life expectancy. An economist will typically project a severely or catastrophically injured person's earnings over their statistical work-life expectancy. However, for numerous reasons, the historical data now underestimates the likely work-life expectancy of current workers. Work-life expectancy is now likely to be significantly longer than historical averages because of factors including (1) reduced and/or depleted retirement savings, (2) declining percentages of individuals with fixed pensions, and (3) the cost or complete unavailability of non-employer-sponsored health care coverage which causes individuals to work longer. The bottom line is that severely or catastrophically injured individuals need to hire counsel who are familiar with recent economic trends and who regularly work with economists are knowledgeable and current on issues affecting serious personal injury claims. See Employee Benefit Research Institute, 2010 Retirement Confidence Survey http://www.ebri.org/pdf/briefspdf/EBRI_IB_03-2010_No340_2010_RCS.pdf

The National Highway Transportation Administration (NHTSA) recently reported that the number of people killed in motor vehicle collisions dropped to 33,808 in 2009. This is the lowest number of annual motor vehicle deaths since 1950, a time when the population of the United States was only half of today's population of 305 million. The highest number of fatalities occurred in 1973 – three years after the creation of NHTSA – when approximately 54,000 people died in motor vehicle accidents. The estimated number of people injured in car crashes is also at its lowest level since NHTSA began tracking that statistic in 1988. The dramatic improvement in fatality and injury rates is the result of improvements in the crashworthiness of cars and pickup trucks; improved road design; and aggressive campaigns against drunk and impaired driving. Unfortunately, Alaska was one of only nine states to see an increase in vehicle deaths in 2009, from 62 deaths in 2008 to 64 deaths in 2009. However, primarily due to Alaska's small population, Alaska also had the lowest number of motor vehicle deaths of any state in 2009. After Alaska, the states with the lowest number of motor vehicle fatalities in 2009 were Rhode Island (65), Vermont (73), North Dakota (104), Hawaii (107), South Dakota (121), and Delaware (121).

Source: http://www-nrd.nhtsa.dot.gov/Pubs/811363.pdf

The percentage of crash fatalities that are alcohol-related dropped substantially from 1982 -- when it was 53% of fatal crashes -- to 34% of fatal crashes in 1997. Since 1997, the alcohol-related crash fatality rate has remained in the 33% to 35% range. The factors that led to the substantial decrease in alcohol-related crash fatalities include stiffer drunk driving laws; a higher minimum drinking age; "zero tolerance" laws for drivers under the age of 21; a decreasing proportion of the population falling in the higher risk 18 - 34 age group; an increase in the proportion of female drivers and an increase in the percentage of total miles driven by female drivers (female drivers are much less likely to drink and drive); and a small general reduction of per capita alcohol consumption. Since 1997, however, further improvement in these statistics has stalled. Given the huge tragic toll drunk drivers still inflict on our society, new strategies and new technologies need to be enlisted to achieve another sustained decrease in drunk driving deaths. One promising possibility for prior offenders is the alcohol monitoring bracelet which continuously reads and reports on any alcohol use. As Lindsay Lohan discovered with her bracelet, it is hard to argue with a judge who has hourly readings of your alcohol consumption.

Source: http://www-nrd.nhtsa.dot.gov/Pubs/810942.pdf

The Alaska Supreme Court recently issued a decision with important practical implications for individuals with personal injury claims in Alaska. In a case handled by Alaska Personal Injury Group attorney Neil O'Donnell, the Court ruled that a negligent driver (who was insured by State Farm) had to pay 75% of the plaintiff's attorney fees for not accepting plaintiff's earlier reasonable settlement offer. Yaple v. Okagawa, Opinion No. 6494 (July 16, 2010). Under Alaska Civil Rule 68, if a party makes a settlement offer and beats that offer by 5% or more at trial, the other party has to pay up to 75% of the offering party's attorney fees. The issue before the Alaska Supreme Court was how to calculate this attorney fee award for a prevailing plaintiff who hired his attorney on a percentage contingency fee basis.

Seventy five percent (75%) of a contingency fee may be much smaller than 75% of the attorney fees calculated on an hourly basis (i.e., the hours worked by the attorney multiplied by the attorney's normal hourly billing rate). Plaintiffs in Alaska with modest claims previously faced the risk of having to pay a large attorney fee award to the defendant if they did not "beat" the defendant's offer of judgment while only receiving a modest attorney fee award if they instead prevailed. In the case handled by the Alaska Personal Injury Law Group, the Alaska Supreme Court ruled that Rule 68 attorney fee awards could be calculated for both defendants and plaintiffs on an hourly basis even if the plaintiff hired his attorney under a percentage contingency fee. This ruling affirmed an attorney fee award to Mr. O'Donnell's client that State Farm had argued was far too large.

The bottom line is that this decision substantially increases the incentives for insurance companies to accept reasonable settlement offers (instead of delaying, litigating, and hoping that claimants will eventually settle for less), at least when injured individuals are represented by competent counsel and the insurance company knows that their attorney is willing to go to trial.

Okagawa v. Yaple, Opinion No. 6494 (July 16, 2010), accessed at: http://www.courts.alaska.gov/ops/sp-6494.pdf

Despite a great deal of room for improvement, our roads and highways have become significantly safer over the past decade -- just as long as you are not on a motorcycle. The number of annual total vehicle fatalities trended downward from 41,501 fatalities in 1998 to 37,261 fatalities in 2008, an 11% decrease. During this same ten-year period, the country's population increased 11% from 270 million to 304 million. Expressed on a per mile basis, the overall fatality rate decreased from 1.58 fatalities per 100 million vehicle miles in 1998 to an historic low of 1.25 fatalities per 100 million vehicle miles in 2008. These statistics make the fatality rates for motorcyclists all the more surprising and disturbing. Total annual motorcyclist fatalities increased from 2,294 in 1998 to 5,290 in 2008, a 231% increase. While partially explained by increased population and ridership, the fatality rate on a per-mile basis still went up significantly from 22.3 fatalities per 100 million vehicle miles in 1998 to 36.6 fatalities per 100 million vehicle miles in 2008, a 64% increase. As also apparent from these statistics, you are 29 times more likely to die per vehicle mile on a motorcycle than in a car or truck. There are varied causes for these adverse motorcycle statistics, including other drivers failing to "see" motorcycles, but the trends and overall results are not good.

Source: http://www-nrd.nhtsa.dot.gov/Pubs/811171.PDF

As noted in a recent post here, Allstate has instituted a systematic, nation-wide claims handling system designed to drive down the amount of money it pays on personal injury claims. That system came under review in a recent New Mexico case where five individuals sued Allstate for "low balling" their auto personal injury claims. The Court found that Allstate had violated fair claims handling requirements "by not attempting to effectuate . . . prompt, fair and equitable settlement[s]," "compelling each of the plaintiffs to litigate their claims through a jury trial to final judgment," and improperly using the judicial system in "an attempt to delay or extort each of the plaintiffs into accepting less than the full value of their benefits under their policy." The Court found Allstate's conduct constituted "malicious abuse of process." Martinez et. al. v. Allstate, Case No. D-0101-CV-200400963, County of Santa Fe, First Judicial District, oral order dated 11/13/09). This case illustrates that injured individuals often receive Allstate's promised "Good Hands" treatment only if they accept Allstate's "low ball" settlement offers. Otherwise they are subject to -- as an Allstate consultant put it -- the "Boxing Gloves" treatment. Be prepared to put on your boxing gloves when dealing with Allstate!

America's highways are unsafe because trucking companies routinely violate safety standards, keeping unsafe trucks and drivers on the road. These are not minor violations, but include practices like routinely overloading trucks, failing to maintain brakes and tires, using unqualified and untrained drivers, and paying drivers in a way that encourages them to exceed speed limits and driving hour limits. Given the crucial role of brakes, it is hard to comprehend that defective brakes account for more than 50% of all violations!

Those are just some of the conclusions contained in a new report just released by the American Association for Justice. Researches analyzed more than a million lines of data obtained from the Federal Motor Carrier Safety Administration (FMCSA). The full report Warning! Safety Violations Ahead may be read here.

When big heavily loaded trucks hit cars, the cars and their occupants usually lose. That's just the law of physics. So consumers have the right to expect trucking companies to be especially vigilant about equipment maintenance and safety. But many needless injuries and deaths are caused because truckers ignore equipment problems. One egregious example is the truckers who fixed a leak in the air brake line with a toothpick and electrical tape. As any thinking person would expect, the "fix" failed after a short time, causing the needless death of a motorist.

The study found that more than 28,000 trucking companies are operating on U.S. roads with safety violations, representing over 200,000 trucks. Truck crashes caused over 12% of all motor vehicle deaths, even though trucks make up only 4% of all vehicles on the road. And that statistic is not a result of trucks covering more miles, because trucks cause deaths per mile driven that are 56% higher than those caused by all vehicles combined.

Continue reading " New Study Finds Trucking Companies, Unsafe Trucks Causing Injuries and Deaths " »

Recent congressional testimony by the Legislative Director of the Consumer Federation of America (CFA) catalogued several major trends in the insurance industry over the past two decades. Most of these trends are extremely adverse to consumers including small businesses. The first trend is the "hollowing out" of the benefits provided in many insurance policies through more restrictive coverage provisions and expanding exclusions that are poorly understood by the insureds who purchase these legally complex documents. The second trend is that many major insurance companies have turned their "claims operations into 'profit centers' by using computer programs and other techniques designed to routinely underpay policy holder claims." As a result, the percentage of each premium dollar that goes to pay claims has fallen dramatically over the past 20 years, producing "unprecedented profits" for insurance company shareholders and insurance company executives at the expense of the insureds. The full report can be found at:
Testimony of Travis V. Plunkett, Legislative Director, Consumer Federation of America, 7/29/08.

The Alaska Personal Injury Law Group has frequently warned injured Alaska consumers about various bad faith tactics used by insurance companies. A new study just released by the American Association for Justice documents many of the bad faith and fraudulent tricks and tactics insurance companies use to evade paying valid claims. Tricks of The Trade: How Insurance Companies Deny, Delay, Confuse and Refuse. All Alaskan consumers, but especially injured Alaskans making claims against an insurance company, need to read this revealing study.

The study details the bad faith tricks and tactics insurance companies use to delay and deny claims the policy requires the insurer to pay. It illustrates its findings with examples of tricks the insurers used against real people to deny their valid claims. These true stories involve outrageous conduct by insurance companies, reminiscent of John Grisham’s novel The Rainmaker. Unfortunately for the poor victims of this insurance company bad faith, the stories are not fiction. They illustrate well the depths to which insurers will stoop to enhance profits at the expense of the insured victims.

These sinister tactics are not limited to liability claims or automobile insurance. The horror stories include insureds who had their health insurance policies revoked in the middle of cancer treatment. The wrongful cancellations resulted in suspension of the critical treatment, delay in resuming crucial treatment, and the burden of unpaid bills totaling hundreds of thousands of dollars. Other true stories involve insureds who had their long term care policies revoked when they finally needed care, after paying premiums for the insurance for many years. In one instance, the family business had to be sold to cover the unpaid bills the insurance company wrongly refused to pay.

These horror stories are not isolated occurrences. Investigating whether an insurer engaged in wrongful post-claim underwriting to cancel health policies, California insurance regulators randomly selected 90 cases where Anthem Blue Cross cancelled policyholders who made a claim. In every single one of those 90 randomly selected cases, the regulators found that Blue Cross had violated state law in cancelling the policy. Study at p. 13.

Insurance companies use these same bad faith tactics to deny claims for damage for many different kinds of insurance. They are used on claims under homeowners’ policies, health insurance policies, long term disability policies, and others. The study names companies that engage in these bad faith schemes and gives specific examples of the bad faith, fraud, and the internal insurance company programs used to implement these tactics. Some of the companies discussed are Farmers Insurance Company, Allstate Insurance Company, State Farm Insurance Company, and AIG Insurance Company.

For example, Farmers Insurance Company had an employee incentive plan called “Quest for Gold” used to reward employees who met goals for low payments.

Continue reading " Injured Alaskans Need to Read New Report on Bad Faith Tricks of Insurance Companies " »

For the past several years, the Bush administration has pursued a covert campaign to steal the rights of victims of dangerous drugs and other defective products. Contrary to the conservative Republican mantra of "personal responsibility," federal agencies have been giving "Get Out of Jail Free” cards to irresponsible corporate wrongdoers. The goal is to deprive the injured victims of defective products of their rights to fair compensation under state law.

An in depth study just released by the American Association for Justice has documented how federal agencies have used "preemption" to try to allow corporate wrongdoers to escape justice. What is preemption? Rightly used, preemption means a federal law preempts all contrary state laws where Congress has expressed its intent to totally occupy a specific area of law.

What is the result of such language? If it is effective, consumers can be prevented from filing lawsuits in state court when the product that injured them complied with federal standards, no matter how inadequate those regulations may be. No suit may be maintained even though the product might be considered defective under state law. By this means, the federal law trumps the state law, and the corporate wrongdoer is immune from liability for the injuries its product caused.

Political appointees of the Bush administration have gutted many of the regulations that are supposed to protect us all. Compounding the wrong, they then inserted into those ineffective regulations language that purports to preempt lawsuits by victims of dangerously defective drugs, defective automobiles, and other harmful products. Since 2005, seven agencies of the United States government have issued more than 60 rules with preemption language in the preamble to the rule. These preemption provisions generally were inserted at the last minute, without notice to interested state governments, consumers or other affected groups. Often, the proposed rule stated that no preemption was intended, but the Bush bureaucrats inserted a preemption provision into the final rule after public comment had ended.

"Why," you may ask, "would the government want to keep people injured by dangerous drugs or other defective products from asserting their legal rights?" Why, indeed. Protection of the public is the mission of many of the agencies that have tried to cheat these victims and help the corporations that harmed them. Contrary to their true mission, under the Bush administration the agencies have taken up the cause of protecting corporations at the expense of public safety. A bigger perversion of the role of federal regulators would be hard to find.

Continue reading " Corporations Granted Preemption Immunity for Defective Products and Wrongful Acts " »

If the administration's preemption efforts continue to bear fruit,(see our concerns about this here and here), then any federal regulation will serve to prohibit someone who is injured from bringing a claim against a defendant who has maimed or killed someone they love. A case in point: if an auto manufacturer has met federal design minimums (remember, they can always design a product more safely than the minimum standards dictate), the manufacturer will say that the government has "approved" the design, and that it shouldn't be subject to litigation if the design proves faulty, regardless whether the design failure involves exploding gas tanks, failing seat belts ( see our litigation against GM about this Farnsworth v. General Motors), or vehicle rollovers.

The lesson for the class today involves roof crush. Follow the links below, and you will see video footage demonstrating that the federal roof strength standard will not protect vehicle occupants. Passengers who sustain these injuries often face the horrific consequences of brain injuries, spinal cord injuries, or death. Should the injured passenger's claim be preempted by federal regulation when it is patently clear that rollover accidents are foreseeable and that manfuacturers can design a vehicle to withstand them? (Remember that this legal sea change was brought to you by politicians pledging to keep the government out of your business and to maximize states rights against the overreaching urges of the federal government...)

Sources:

Multiple documents and video:
http://www.citizen.org/pressroom/release.cfm?ID=2728

http://www.newmediamill.com/webcasts/cas/20080909/

http://www.citizen.org/autosafety/rollover/crashwrth_/articles.cfm?ID=17995

Alaska is the only state where the party that prevails in litigation is regularly entitled to recover partial attorney fees and litigation costs from the losing side. For an injured individual, this can mean that a major portion of their attorney fees and costs will effectively be paid by the defendant at the end of the case. Personal injury plaintiffs often greatly benefit from this rule.

Defendants, however, can make use of this rule by making an "offer of judgment." If the injured plaintiff does not obtain a judgment that is at least 95% or more of the defendant's "offer of judgment," the plaintiff has to pay a portion of the defendant's attorney fees and litigation costs.

Evie Rhodes found herself in the latter unhappy situation in an automotive personal injury case recently decided by the Alaska Supreme Court. Rhodes v. Erion. (This case was not handled by the Alaska Personal Injury Law Group.) Erion admitted negligently rear-ending Rhodes' car but disputed the amount of the damages. Erion made an "offer of judgment" of $30,000 early in the case which Rhodes rejected. Rhodes ultimately obtained a judgment against Erion after trial of $27,016 -- only 90% of the $30,000 offer. This meant that Erion, the negligent driver, was now the "prevailing party." The court ordered Rhodes to pay Erion $42,263 in attorney fees, which amount completely offset Rhodes' judgment and left Rhodes owing Erion $17,411. As the Alaska Supreme Court mildly put it, "the result in this case was less than ideal from Rhodes' perspective."

At the Alaska Personal Injury Law Group, we often see clients who greatly benefit from Alaska's unique attorney fee rule. Rhodes v. Erion is a reminder that Alaska's attorney fee rule functions as a litigation "risk multiplier" for both sides.

Alaska Personal Injury Law Group attorneys have waged many legal battles to force Allstate to produce documents that are relevant to insurance "bad faith" claims against the insurer by injured Alaskans. These claims have alleged that Allstate unfairly and unreasonably delayed and "low balled" their personal injury insurance claims. Significantly, the Florida Department of Insurance, Office of Insurance Regulation (OIR) recently suspended Allstate's license to write new insurance in that state because Allstate refused to produce documents requested by the Office of Insurance Regulation (OIR) regarding Allstate's claim practices. That suspension order was recently affirmed by the Florida Court of Appeals, which wrote that "Allstate's willful, indeed potentially criminal, failure to comply with its disclosure obligations has prevented OIR from adequately investigating its reasoned belief that Allstate is systematically defrauding its policyholders." Allstate Floridian, et. al. v. Office of Insurance Regulation, 2008 WL 2048349 (Fla. App., May 14, 2008) Forcing the insurer to produce the relevant documents is key to any successful insurance "bad faith" case. We have often gone back to court repeatedly to ensure that we get the evidence injured insureds need to prove their claim. We are encouraged by the Florida court's firm stance on this issue.

Allstate has finally made public its controversial "McKinsey Documents" which describe the development of its self-described "radical" claims handling program. Allstate made these documents public just days after a Florida court affirmed an order from the Florida Division of Insurance prohibiting Allstate from writing any new business in that state until it produced those documents to the Division of Insurance there. Download file The Alaska Personal Injury Law Group already has a copy of many of the McKinsey Documents, having obtained a court order requiring Allstate to produce them in litigation pending in Alaska. From these documents and other sources, the Alaska Personal Injury Law group is familiar with Allstate's self-described "radical" claims program designed by the international business consulting firm McKinsey & Company. According to Allstate records, this program has generated hundreds of millions of dollars in additional profit for Allstate's shareholders and executives. The program, called Claims Core Process Redesign or "CCPR," had three key components: (1) discouraging claimants from hiring attorneys because McKinsey's extensive closed-claim study showed that represented claimants, even after adjusting for the same type of claim, were paid far more than unrepresented claimants; (2) arbitrarily and systematically depressing claim valuations through a centrally "tuned" claims evaluation computer program with the not-so-friendly name of "Colossus;" and (3) vigorously litigating against claimants who did not submit to Allstate's new arbitrarily-lowered claim valuations (candidly called the "Boxing Gloves" treatment by McKinsey and Allstate, as contrasted with the "Good Hands" treatment given to claimants who agreed to Allstate's valuations). For the last 10 years, Allstate has doggedly refused to produce the McKinsey Documents in cases alleging bad faith claims handling. In the few cases in which courts have ordered Allstate to produce the McKinsey Documents (like one currently being handled by the Alaska Personal Injury Law Group), the court imposed strict confidentially rules based on Allstate's claim that the documents were allegedly important trade secrets. Allstate produced 12,929 pages of McKinsey Documents to the Alaska Personal Injury Law Group under protective order. The Alaska Injury Law Group is now looking forward to using these documents without the burdensome confidentiality restrictions previously advocated by Allstate.

We procrastinate about many important things in our lives…getting our taxes done, having a physical, and putting all the photos in an album, to name a few. So, it is only human to procrastinate about calling an attorney for advice when an accident has occurred in your life. And if the injuries are serious, you have other things to worry about: paying bills, getting the right medical care, and dealing with all the paperwork.

If we had just one piece of advice for you, it would be this: Talk to an attorney sooner rather than later. Here’s why:

1. In Alaska, you have just two years in which to bring a lawsuit if you have been injured because of someone’s negligence. If you don’t file your lawsuit within that time, you will be foreclosed from obtaining any recovery whatsoever.

2. You have to give your attorney time to do the job. When serious injury or death has occurred, the claims need to be properly investigated, and this often takes time, plain and simple. The reason a plane has crashed or a vessel has sunk can only be determined with a thorough investigation, often one that requires the engagement of qualified experts who have to be identified and engaged for the client’s benefit.

3. You can meet and talk with an attorney about your injury case without signing anything or otherwise engaging them. At the Alaska Personal Injury Law Group, we meet with the client, learn about their case, and then investigate it to determine whether we will be able to help them. If we can’t, we’ll help them to find someone who can. But one thing we don’t do is use high pressure tactics to “sign you up”. We recognize that the attorney-client relationship is a trusted one, and we want to be sure that you understand your rights before you proceed with litigation, or with hiring us, for that matter. (And if a lawyer tells you that you have to sign a contract with them before they can talk with you about your claims, you know all you need to know at that point—grab your things and walk out the door.)

4. Important evidence can be lost. Your memory, and that of important witnesses, is fresher and more accurate right after any injury than it will be two years later. Accident scenes and vehicle damage are repaired. Sutures are taken out and casts removed. If we can be involved in the early stages of a client’s recovery, we can help them preserve critical evidence that will later prove to be essential to whether or not they ultimately prevail in their case.

These are just a few of the many reasons why you shouldn’t procrastinate when a serious injury or death has occurred. Get an attorney with the necessary legal skills involved early on to help you. If you contact us, we will give you the help you need, or we will help you find someone who can.

The insured received serious personal injuries while riding in a car that was struck by another motor vehicle. She settled with Safeco, the insurance company of the negligent driver, for the facial policy limits of $50,000, without payment of any add-ons for interest or attorney fees. She then made a claim for her uncompensated damages under the underinsured motorist (UIM) coverage of her own policies with Allstate. After hearing all the evidence, the arbitrators found her damages to be $118,432.

A primary issue on appeal was whether Allstate was entitled to an offset of the $50,000 paid by Safeco. The Supreme Court ruled that Allstate was entitled to such an offset even though Allstate had not pled or otherwise asserted the right to an offset to the arbitrators. The offset was deemed proper based on the language of the Alaska statutes, the purpose of UIM coverage, and the terms of the Allstate policy.

A second issue was whether Allstate had to pay interest and attorney fees on the entire $118, 432, which included $50,000 of the insured’s damages that had been paid by Safeco. The Court ruled that Allstate did not; because these amounts could have been recovered under the Safeco policy, the insured was not "underinsured" as to those amounts. The Court thus created a crucial distinction in underinsured motorist claims. It reaffirmed the rule of the earlier Coughlin case that if a person obtains the policy limits of the adverse driver, they have exhausted that policy for purposes of qualifying to bring a claim for underinsured motorist coverage against their own insurance company, even though they did not obtain the add-ons available under that policy. But because they could have pursued the add-ons under the first policy, their claim for add-ons to the amount paid under the first policy is not a proper element of the subsequent UIM claim. Sidney v. Allstate Insurance Company, Opinion 6220, January 11, 2008.

On Saturday, January 12, 2008, two Alaska Native leaders and their 16-year-old granddaughter were killed in a three-car collision on the Glenn Highway. Allan and Sophia Chase, and Melissa Pike were struck when a Chevrolet truck crossed the center line and sideswiped their vehicle, which caused their vehicle to hit a third vehicle driven by John Lavarnway. Lavarnway and his wife, Mary, were injured in the crash. The driver of the pickup, Joshua Swigart, and his passenger, Erin Guhl, were not injured. Troopers are investigating why the pickup crossed the center line, and no charges have yet been filed.

Allan Chase was a former board member of Cook Inlet Regional, Inc., an Alaska Native corporation based in Anchorage. Sophia Chase was on the board of Southcentral Foundation, a Native health organization affiliated with CIRI.

Source: Anchorage Daily News, January 13, 2008.