Articles Posted in Legal News

If you represent or care for a disabled person, you are likely already aware of special needs trusts. These trusts allow litigation proceeds, and other contributions, to be set aside so that the funds can be protected for the disabled beneficiary, while still maintaining income eligibility for benefit programs such as SSI, Medicaid, and other important benefit programs. Such trusts, however, can be restrictive in their payments if benefit eligibility is to continue. Primarily, beneficiaries are not permitted to have access to assets outside a special needs trust above a limit set by each state. In Alaska, having more that $2,000 in assets would prevent a disabled beneficiary from receiving some benefits.

A recently passed federal statute has now tackled this problem: The ABLE Act. This law allows states to set up their own programs permitting a disabled person to set up a separate account, much like an IRA or HSA, that would not count as an asset in the income eligibility analysis. Alaska is one of just a handful of states that have adopted this legislation. With Gov. Walker having just signed the bill into law in August,2016, the application process in Alaska is still being ironed out.

Here are some key elements of the law. The disability must have occurred before age 26, and many types of disabilities are permitted, including physical, hearing, mental health, and other disabilities. Total annual contributions may not exceed the federal gift tax limit, now at $14,000. A total of $400,000 may be contributed. A beneficiary may have only one account, but anyone can contribute to the account. Neither the funds contributed to the account,nor the interest earned in the account, are deemed to be taxable. The funds can be spent on items such as housing, personal support, assistive technology, and many other needs, including items normally not permitted under a special needs trust.

We routinely advise clients here at the Alaska Personal Injury Law Group about their legal rights concerning their medical records. We do this to encourage them to become knowledgeable consumers of medical services. Essentially, the more informed the client is as a patient, the better services they can receive from their health care provider. So, it was with some surprise that I was informed by my own doctor that “by the letter of the law” he was not permitted to provide me with the reports he had received from a specialist (mind you, I had requested that the specialist send him the records in the first place). I agreed to request the records from the specialist instead, and made a mental note to review the applicable law, thinking that perhaps there was some new provision about which I was unaware.

The short answer is my doctor has been misinformed. The “letter of the law” is that a patient is entitled to receive a a complete copy of their medical records held by their physician. This has always been the law in Alaska, and remains so today. Most states have laws addressing this right. Further, federal heath care law has recently articulated a federal right of access to one’s own medical records.

Alaska’s statute, passed in 1978, sets out a broad right of access in A.S. 18.23.005: “a patient is entitled to inspect and copy any records developed or maintained by a health care provider or other person pertaining to the health care rendered to the patient.” There are no articulated exceptions here, and the right of access would plainly reach to all records in the file, including lab reports, imaging studies, or the evaluations of other doctors since these are used by the physician in providing care.

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.

Litigation Counsel of America has selected Michael Moody of the Personal Injury Law Group to be a Fellow. Litigation Counsel of America is a trial lawyer honorary society composed of less than one-half of one percent of American lawyers. Fellowship is highly selective and by invitation only. Fellows are selected based upon effectiveness and accomplishment in litigation, both at the trial and appellate levels, and superior ethical reputation.

The Alaska Supreme Court recently issued an opinion in Asher v. Alkan Shelter, LLC, which is a case involving an employee’s embezzlement of funds from his employer. The Alaska Supreme Court reversed the trial court’s ruling that the employee and his girlfriend were jointly and severally liable to the employer for the stolen funds, holding that AS 09.17.080, Alaska’s allocation of fault statute, required the court to allocate fault and liability between the employee and his girlfriend.

Significantly, the court ruled that the trial court should not simply determine the total damages suffered by the employer and allocate fault for those damages between the employee and his girlfriend. Instead, the court ruled that the trial court should only allocate fault on those damages it found had been caused by both the employee and the girlfriend. The effect of the court’s ruling is that if a defendant is responsible for a part of, but not all of, a plaintiff’s damages, trial courts and juries must separate the plaintiff’s damages into their divisible parts and make separate allocations of fault for each category of damages.

We at the Alaska Personal Injury Law Group have been closely following preemption litigation because the results are so central to consumer-based litigation. Today, we find hope in the news that the United States Supreme Court has rejected the claims by Philip Morris that federal regulation of tobacco companies preempted any state claims from being asserted against the company.

The case arose in Maine and asserted that the company had fraudulently misrepresented that its “light” cigarettes were safer. Essentially, today’s ruling refuses to immunize fraudulent statements by corporations and has reaffirmed the presumption in the law against preemption of state laws: “When addressing questions of express or implied preemption, we begin our analysis with the assumption that the historic police powers of the States are not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” “Thus,” it continues, “when the text of a pre-emption clause is susceptible of more than one plausible reading, courts ordinarily accept the reading that disfavors preemption.”

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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.
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Once a medical device is on the market, doctors can use them for other, unapproved purposes. Given this running room, Medtronic allegedly touted to doctors the use of its Infuse Bone Graft for use in cervical spine surgeries. Three whistleblower suits have been filed by former Medronic employees asserting that the company paid inducements to doctors to use Infuse and other Medtronic spine products. Medtronic has paid $40 million to settle two of the suits, and the third remains pending. It alleges that the doctors working with Medtronic received inflated royalty payments and inappropriate consulting fees. (We have previously reported on other odious industry practices, here and here.)

In July, the FDA sent out a warning letter to doctors warning of life-threatening complications when the device is used in the cervical spine. The complications arose from use of recombinant morphogenic proteins, which caused swelling of the neck and throat tissue and led to compression of the airway and the neurological structures of the neck. Patients suffered difficulties swallowing, breathing, or speaking, and required emergency medical care including intubation and tracheotomies.

If a surgeon were going to operate on your neck, would you want to know if a medical device manufacturer was paying him to use the product on you, money paid in addition to the surgical fees you are already paying?

On Monday, June 9, 2008, a chartered tour bus carrying Korean tourists traveling to Fairbanks crashed when the bus left the highway and rolled. The cause of the accident is unknown, but the initial scene investigation indicated that the bus hit a ditch, went airborne, and rolled at least once. Thirteen of the passengers were hurt, three of them critically.

The accident occurred on the Richardson Highway, approximately 175 miles northeast of Anchorage. Five Alaska State Troopers responded to the scene, and the critically injured were medivaced by Army Black Hawk helicopters.

The 54 seat tour bus was being operated by the Luxury Coach Line, a California-based corporation operating charter tours.