Here We Go Again: Court documents Allege Big Pharma Used Ghostwriting Program to Promote Antidepressant

Here is a shocker. More documents indicate that Big Pharma engaging in nefarious conduct to peddle drugs. Who is the FDA protecting, us or Big Pharma. I realize there is a revolving door at the FDA, but at some point, someone has to say enough is enough.

The AP (8/19, Perrone) reported that, "according to court documents obtained by the Associated Press," pharmaceutical maker "GlaxoSmithKline used a sophisticated ghostwriting program to promote its antidepressant Paxil [paroxetine], allowing doctors to take credit for medical journal articles mainly written by company consultants." In fact, "an internal company memo instructs salespeople to approach physicians and offer to help them write and publish articles about their positive experiences prescribing the" medication. "Known as the CASPPER program, the paper explains how the company can help physicians with everything from 'developing a topic,' to 'submitting the manuscript for publication.'" The AP notes that "the document was uncovered by the Baum Hedlund PC law firm of Los Angeles, which is representing hundreds of former Paxil users in personal injury and wrongful death suits against GlaxoSmithKline," alleging that "the company downplayed several risks connected with" the medicine, "including increased suicidal behavior and birth defects."

Read more on this issue:

http://http//www.nytimes.com/aponline/2009/08/19/us/politics/AP-US-GlaxoSmithKline-Ghostwriting.html?_r=1&scp=2&sq=+%22wrongful+death%22&st=nyt

Chris Hellums may be reached at Chrish@PDKHlaw.com

UAB Report: Tort Reform Provides No Savings

I was recently watching CNBC and they were debating health care costs. Former Tennessee Senator Bill Frist was on and was asked about tort reform as part of the health care debate. He remarked that what he considered it an issue, it was not a significant piece of the solution. I was shocked by this remark.

For years, this has been the battle cry of groups like Citizens for Lawsuit Abuse. Hatched in Texas by Karl Rove and others and perfected in Alabama and Mississippi, these groups convinced virtually everyone that "tort hells" and "greedy trial lawyers" were the cause virtually everything evil in society. All lawsuits are frivolous, everyone who sues wants something for nothing, and juries of average people (who can determine whether someone lives or dies in a criminal context) are too stupid to determine whether or not corporations engaged in fraudulent conduct and if so, the level to which they should be punished.

Guess What----It Worked---But for Who??????????????

The success of this endeavor, financed by insurance companies, tobacco and large corporations has been extremely successful. Many states have passed tort reform statutes. Juries view all plaintiffs with distrust, and are much less willing to award damages---"for fear that my insurance rates will go up" as many interviewed jurors will openly tell you. A trial judge recently told me that about 50% of rear end accident cases tried in his court result in a verdict for the defendant. That's right, 50% of the time, when someone admits the were not paying attention and hit someone from behind, the jury refuses to hold them responsible for their conduct. While at a restaurant recently, I spoke with a lawyer who previously worked for a large insurance company trying car wreck cases. He said that he was fired by one insurance company because he recommended that they pay twice the medical bills.

One must then ask the question, who benefits when this occurs. I would submit that it is insurance companies who benefit. See also, "Ironic Twist of Fate--Tort Reform Champion loses his own Medical Malpractice case."

On to the subject of medical malpractice. Frequently, I talk to my friends who are physicians about medical malpractice. Few have been sued. All know of situations where they think physicians should have been sued, and all are scared to death that they will get sued, lose their practice, their homes, and everything they have worked for so long to accumulate.

I ask them where they get their information from and of course, it is their insurance company. They know about the huge verdict here and there, but not the ultimate outcome. They know their rates are going up and assume it is because of huge settlements and verdicts. They never compare the premiums written to the verdicts in Alabama. Their response to that inquiry is that the insurance companies settle out of court. They seem unaware that largest insurance carrier for doctors in Alabama tries virtually all case filed, so that hypothesis is invalid.

I ask them if they have ever driven by the home of the recently retired CEO of the insurance company which writes most doctors in the state. I ask if they ever considered how it is that he could afford a house that published reports indicate the property taxes alone are in excess of $100,000 per year?

I guess I digressed from where I started, which was with the reading of two articles I found ver interesting. One from the Kentucky Lexington Herald-Leader, "Tort Reform does not cut health costs" and the second from from the New Yorker, authored by Ault Gawande titled "The Cost Conundrum, What a Texas town can teach us about health care" .

According to the Lexington Herald-Leader, States that enacted limits on malpractice claims have seen no cost savings. To the contrary, Texas capped malpractice damages in 2003 only to experience a steep rise in health insurance premiums and medical costs.

Boston surgeon Ault Gawande wrote in The New Yorker about his visit to Texas (see full New Yorker article hyperlinked above). While at dinner with several physicians, he asked about lawsuits. He was told that they had dropped "practically to zero." Well, he wondered, what happened to the claim that doctors were practicing defensive medicine---the basis for tort reform. He learned that doctors have an incentive to order lots of tests---they profit from them!!!!!!!!

These results are not unique.

In 2008, researchers at the University of Alabama at Birmingham published reports of their study which surveyed 27 states with non-economic caps. The principle findings state:

"Using a variety of empirical specifications, there was no statistically significant evidence that noneconomic damage caps exerted any meaningful influence on the cost of employer-sponsored health insurance."

The study concluded:

"The findings suggest that tort reforms have not translated into insurance savings."

(read abstract to study here)

Unfortunately, I think too many to may physicians have been misled by the insurance industry that the evil lurking is a lawyer who trying to take everything they have work tirelessly to attain. Perhaps if they formed their own mutual company and insured their own risk, they could see what the real cost of malpractice coverage.

Court Documents Show Wyeth Paid Writers of Hormone Therapy Articles

In a front-page story last week on August 5th, the New York Times reported that "Newly unveiled court documents show that ghostwriters paid by [Wyeth] played a major role in producing 26 scientific papers backing the use of hormone replacement therapy in women, suggesting that the level of hidden industry influence on medical literature is broader than previously known."

The articles were uncovered by lawyers suing Wyeth over the hormone therapy written about.

The articles were drafted by a medical communications firm paid by Wyeth, and were "published in 18 medical journals including The American Journal of Obstetrics and Gynecology and The International Journal of Cardiology. between 1998 and 2005." The articles did not disclose Wyeth’s role in initiating and paying for the work.

The articles "emphasized the benefits and de-emphasized the risks of taking hormones to protect against maladies like aging skin, heart disease and dementia."

The "supposed medical consensus" created by the papers is said to have helped sales of Wyeth's hormone drugs Premarin (conjugated estrogens) and Prempro (conjugated estrogens/medroxyprogesterone acetate) rise "to nearly $2 billion in 2001."

That "consensus fell apart in 2002 when a huge federal study on hormone therapy was stopped after researchers found that menopausal women who took certain hormones had an increased risk of invasive breast cancer, heart disease, and stroke."

Corporate Bonuses: The bubble that it seems will never burst

According to a report issued by New York Attorney General Andrew Cuomo Citigroup, Inc., Merrill Lynch, and seven other banks who received more than $175 Billion (yes, that is billion with a "B") in taxpayer, aka OUR MONEY, paid out more than $32 Billion in bonuses to executives. According to Bloomberg, more than 5,000 of those bonuses were more than $1,000,000.

Cuomo's study, called “No Rhyme or Reason: The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture,” comes as Congress and the Securities and Exchange Commission examine whether to limit the compensation paid to top corporate executives.

Citigroup and Merrill Lynch suffered losses of more than $27 billion at each firm, the report said. Yet Citigroup paid out $5.33 billion and Merrill $3.6 billion in bonuses.

Industry talking heads say that pay is tied to performance and that government should not get involved. The problem is that this type of structure led to the taking of huge amounts of leveraged risk, and when that blew up in their faces, they fired employees, eliminated 401(k) contributions, ruined the economy and left us (the taxpayers) to pick up the tab.

Take as an example the case of Andrew Hall, who runs Philbo, Citi's oil-trading subsidiary. He is on track to collect $100 million, which is his cut from profits from a year of extremely aggressive bets on the oil market. Citi says his trading resulted in $2 billion for Citi over the past five years and they are contractually obligated to pay him. The problem is that this type speculation was not used to lock in supply or steer capital where it was needed, but rather by outsmarting other investors. That bodes the question---what happens when he bets wrong and loses 2 billion, and 10 of his collegues do the same? Well, we know how that story ends.

On main street, if you bet the farm and lose, you lose the farm. On Wall Street, if you bet the farm and lose, the rest of us have to buy you a new farm.

The problem remains that these executives continue to suffer the what I call the "Marie Antoinette Syndrome." They don't get it. They continue to fly around in corporate jets, promote their children, pay themselves (and their buddies whose boards they sit on) huge bonuses while the rest of the country suffers under immense economic stress.

Despite their political power across both parties, I would submit that this simply cannot continue. The industry has had the chance to police itself. That time is past. Just as small businesses cannot put lazy family members on the payroll and pay them to hang out at the country club, neither can banks.

One day the government free cheese program will be over. Banks will have to compete in a new environment. I submit that when that day comes, many good bankers will have gone to community banks and they will become a real force in the industry. In the meantime, we will continue to read about such bonuses at the same pace we read about major league baseball players and steroids.

Alabama Supreme Court Rejects Sealed Container Defense as to Reatilers in Breach of Warranty Claims

A recent Alabama Supreme Court decision answered a certified question from the United States District Court for the Northern District of Alabama in the case of Sparks v. Total Body Essential Nutrition Inc., Wright Enrichment, Inc. & TexAmerican Food Blending, Inc.

After the District Court concluded that it was not clear under Alabama law whether claims alleging the breach of the implied warranties of merchantability and fitness for a particular purpose are subject to the defense of the sealed-container doctrine, the Supreme Court held that they were not. See the opinion here.


The majority said:

"We answer the certified question in the affirmative and hold that the sealed-container defense is not available to the retail seller of food products in claims asserting a breach of implied warranty under the UCC."

This case aligns Alabama law with the majority of states which have interpreted this issue, including Georgia and Florida, and is also significant in that it will prevent the continued removal of such cases (which involve in-state retailers) from being removed from state to federal court under a fraudulent joinder theory.

The sealed container defense previously allowed retailers who purchased their products from manufacturers in a pre-packaged, sealed container, to avoid liability for defects in products which the retailer did not contribute to or could not have reasonably discovered.


Chris Hellums is co-lead counsel of the Executive Committee to the Personal Injury Plaintiff's Steering Committee for the Total Body Multi-District Litigation.

See here: http://chrishellums.blogspot.com/2009/05/lawyer-chris-hellums-appointed-as-co.html

Pittman Dutton Kirby & Hellums is currently representing clients in various claims against Total Body.



Chris can be reached at Chrish@PDKHlaw.com or Pittman Dutton Kirby & Hellums at http://www.pdkhlaw.com/.


Total Body FDA Warnings & Articles:

Food & Drug Administration Warnings : http://www.fda.gov/ForConsumers/ConsumerUpdates/ucm050806.htm

200 Injured by Total Body : http://www.foxnews.com/story/0,2933,405361,00.html

Ironic Twist of Fate--Tort Reform Champion loses his own Medical Malpractice case

Elliott M. Kaplan is a prominent Kansas City attorney. For years, he railed against judges, juries, and trial attorneys, as he and his former firm, Daniels & Kaplan, got big bucks to represent big companies. He was well known as one of the founders of the modern tort reform movement in America. He was named "Legal Reform Champion" by the American Tort Reform Association.

In a cruel twist of fate, it appears he may have reaped what he sowed.

According to its website, The American Tort Reform Association was founded in 1986 by the American Council of Engineering Companies and shortly thereafter, the American Medical Association followed them. They have worked to enact tort reform legislation in 45 states. They have led grassroots efforts which have resulted (they claim) in 85% of Americans believing that frivolous lawsuits clog our courts.

Their efforts have paid off, perhaps to the detriment of one of their own. According to the National Practitioner Data Bank, the number of U.S. malpractice payments in 2008 was the lowest since creation of the federal National Practitioner Data Bank, which has tracked payments since 1990.

WHAT HAPPENED TO LAWYER KAPLAN

Lawyer Kaplan was diagnosed in 2003 with pancreatic cancer by his doctor in Kansas City. Kaplan sought the best care money could buy. He went to the Mayo Clinic in Rochester, MN. There he was again diagnosed with pancreatic cancer.

To save his life, he underwent a Whipple resection, a highly invasive surgery that can cause more harm than good. It was only after the surgery that the diagnosis was determined to be wrong, that he only suffered from pancreatitis, and that the Whipple resection made the condition worse, leaving him debilitated and a broken man.

Believing that the doctor had committed malpractice, Kaplan sued the pathologist alleging negligence in the diagnosis.

He assembled what appears to be an army of attorneys to represent him; his former law partner, James F.B. Daniels of McDowell Rice Smith & Buchanan, Thomas Ward of Ward & Ward, Mark Johnson of Greene Espel & Robert A. Stein (former Dean of Minnesota School of Law).

Unfortunately, the jury found against Kaplan and awarded him no damages. He has moved for a new trial. The motion is currently pending.

Read the Kansas City Business Journal article describing Kaplan's lawsuit against the Mayo Clinic here.

I certainly feel for Lawyer Kaplan. Unfortunately, he and the organization which he was a "Champion", foster the belief that all lawsuits are frivolous and that they compromise access to affordable health care, punish consumers by raising the cost of goods and services, chill innovation, and undermine the notion of personal responsibility.

I don't know if his lawsuit was meritorious or not. If it is, then I pray that justice will prevail. I do know that his organization, the American Tort Reform Association, has perpetuated the belief among many Americans that all lawsuits are frivolous. The beneficiaries of this belief are not injured or defrauded people, but the insurance companies and large corporations who fund these organizations.

One only need read jury verdict reporters to see that juries daily turn away victims just like attorney Kaplan.


Correction: Yesterdays initial post had information referring to Elliott S. Kaplan, one of the founders of the law firm of Robbins Kaplan Miller & Ciresi. The source of this information was the Alabama Jury Verdict Reporter and was assumed to be correct. We have notified the Jury Verdict Reporter of this potential error.


Elliot M. Kaplan Biography:

• by Forbes.com - http://people.forbes.com/profile/elliott-m-kaplan/26454
• Legal Reform Champion
• ZoomInfo - http://www.zoominfo.com/Search/PersonDetail.aspx?PersonID=58139401
  

Chris Hellums can be reached at Chrish@pdkhlaw.com

Tsunami Continues in Arbitration War--Congressman Rails against Arbitration Abuses

Bloomberg News (7/22, Van Voris, Rosenkrantz) reported, "A congressional staff investigation into the biggest U.S. consumer debt-collection arbitrator found 'deeply disturbing' abuses, U.S. Representative Dennis Kucinich said" yesterday at a hearing before a House subcommittee he chairs. "A report on the investigation, released yesterday, claims that the National Arbitration Forum, a Minnesota company that handled most consumer debt-collection arbitrations in the U.S., misled consumers and hid ties to debt-collection firms." Said Kucinich, "The debt collection industry and the alternative legal system that has been created around it can no longer be ignored by the federal government."
The Minneapolis Star Tribune (7/22) reported, "Minnesota Attorney General Lori Swanson backed federal legislation Wednesday that would protect consumers from 'fine print' arbitration contracts that forfeit their legal rights against creditors. 'Millions of Americans are giving away that right without even knowing it,' Swanson told a panel of the House Oversight and Government Reform Committee." Also appearing before the committee was Mike Kelly, CEO of Forthright, "which provides administrative services for the" NAF. Kelly "defended the company's work as a simple and cost-effective alternative to the courts, saying that without access to arbitration, consumers would be the losers."
The AP (7/22, Choi) reported that Kenneth Clayton of the American Bankers Association testified that "arbitration is a valuable way for consumers and businesses to resolve disputes in a very low cost and fair manner. Take it away and consumers will suffer." But "a study by Public Citizen found that credit card companies track arbitrators' rulings and do not enlist the arbitrators who rule against them."
Jones: "arbitration revolution" possible. In a blog at the Wall Street Journal (7/22), Ashby Jones wrote, "It's too soon to say, in all likelihood, but we could be in the early stages of an arbitration revolution."

ARBITRATION: DEJA VU ALL OVER AGAIN

It was not too long ago that many of us could remember the Stop Binding Arbitration bumper stickers and billboards up and down the highways. Lawyers who represented consumers were dismayed by the proliferation of arbitration contracts in almost every consumer contract. Car dealers, credit card companies, even nursing homes added the provisions to their contracts.

There was no populist swell against arbitration. In retrospect, there a probably a number of reasons. First, many view attorneys with scepticism and a jaundice eye. Additionally, business groups portrayed arbitration as an efficient and cost effective way to resolve disputes. Besides, who could expect a jury of regular people to be able to understand and resolve such disputes---
I never really understood this argument since the jury system is the bedrock of our legal system and no one has ever argued or submitted that juries should not be allowed to determine whether someone is incarcerated or is sent to die in the electric chair.

Be that as it may, Big Business won and arbitration agreement proliferated contracts. Almost immediately, many consumer attorneys refused to take arbitration cases. The fees were high, the ability to prove cases through documents became limited, and most importantly, many argued that the arbitrators were biased in favor of business. Many argued that consumer attorneys were summarily rejected by arbitration companies.

In the end, consumers were placed on unequal footing and basically got screwed. I even hear story of a general counsel of a large company threatening an arbitration company if an unfavorable opinion came from one of that companies arbitrators.

Finally, the abuses went too far and the dam was broken.


Minnesota Attorney General Lori Swanson filed suit this week against the National Arbitration Forum of Minnesota, the nation's largest arbitration company for consumer credit disputes, accusing it of consumer fraud, false advertising and deceptive trade practices by "misrepresenting its independence" and hiding its "extensive ties" to the collection industry.The Attorney Generals lawsuit claims the National Arbitration Forum has ties to debt-collection law firms and works against consumers by virtue of having a mandatory arbitration clause set forth in a credit card, bank, or retail contracts.

Hundreds of thousands of consumer disputes are resolved each year not by a judge or jury, but by a private arbitration system. The Attorney General’s suit alleges that the National Arbitration Forum represented to consumers and the public that it is independent and neutral, operates like an impartial court system, and is not affiliated with and does not take sides between the parties. National Arbitration Forum, while holding itself out as impartial, works behind the scenes—alongside creditors and against the interests of ordinary consumers—to convince credit card companies and other creditors to insert arbitration provisions in their customer agreements and then appointing the Forum to decide the disputes. Forum pays commissions to executives whose job it is to convince creditors to put mandatory arbitration clauses in their customer agreements. Forum does this to generate arbitration filings in the Forum—and hence, revenue—for itself. The lawsuit alleges that, despite telling consumers and the public that it is not affiliated or aligned with the collection industry, the Forum in fact has financial ties to the collection industry.

Beginning in 2006 and through 2007, Accretive—a family of New York private equity funds—engineered two transactions. In the first transaction, Accretive formed several equity funds under the name “Agora” (meaning “Forum” in Greek), which invested $42 million in the Forum.In the second transaction, three of the country’s largest debt collection law firms—Mann Bracken of Georgia, Wolpoff & Abramson of Maryland, and Eskanos & Adler of California—merged into one large national law firm called Mann Bracken. Accretive then acquired the majority interest in a debt collection agency called Axiant, which acquired the collections operations of Mann Bracken. Through these transactions, Accretive took control of one of the country’s largest debt collection enterprises and became affiliated with the Forum, the country’s largest consumer collection arbitration company. Accretive principals remain actively involved with the Forum. In 2006, the Forum processed just over 214,000 consumer collection arbitration claims, of which 125,000, or nearly 60 percent, were filed by the above law firms. Swanson said that the Forum was aware of the affiliation problem in 2006 when it negotiated its relationship with Accretive.

An email from an officer of the Forum to the hedge fund stating: “…we should certainly plan for unwinding any deal in the event shared ownership becomes an acute issue.”

We'll follow this interesting story.View the complaint here:http://capwiz.com/nacanet/attachments/MN_Complaint_Against_NAF.pdfSources:MN Attorney General Press Releasehttp://www.politicsinminnesota.com/2009/jul14/3464/swanson-files-suit-against-national-arbitration-companyBusiness Week
Labels: deceptive trade practices, fraud, Minnesota Attorney General, misrepresentation, National Arbitration Forum

AAA & NAF suspend arbitrations over consumer debt collections pending new guidelines

The Wall Street Journal (7/22, Sidel, Sharma) reports, "Two major arbitration firms are backing away from the business of resolving disputes between customers and their credit-card and cellphone companies, throwing into disarray a controversial system that prevents unhappy consumers from filing lawsuits. The American Arbitration Association said Tuesday it will stop participating in consumer-debt-collection disputes until new guidelines are established." The National Arbitration Forum, in a settlement with Minnesota Attorney General Lori Swanson, had earlier said "it would stop accepting new cases as of Friday. Their retreat has big implications for credit-card and cellphone companies, which generally require customers to agree to mandatory arbitration." Consumer advocates "have criticized the practice for years, saying consumers often don't realize they are waiving their right to sue when they sign contracts with the companies."

The Wall Street Journal (7/22, Kim) reports, "Consumer advocates say the development opens the door for customers to take their grievances to court instead of being forced to settle their disputes through the arbitration process. 'In the long run, I think this is the beginning of the end of forced arbitration in all consumer contracts, from credit cards, to nursing homes to cellphones,' said Ed Mierzwinski of U.S. PIRG, a consumer-advocacy group."

The San Francisco Chronicle (7/22, Abate) reports, "A congressional committee will hold hearings today at which NAF and its adversaries will argue about whether consumers are put at a disadvantage by the common practice of requiring that disputes be arbitrated rather than fought in court." Carol Kaplan, "a spokeswoman for the American Bankers Association, which represents many credit card issuers, said most consumer contracts are probably written in such a way that another arbitrator could be designated to replace National Arbitration Forum. But Paul Bland, a staff attorney with the advocacy group Public Justice, said NAF was the designated arbiter in so many consumer agreements, including cell phone contracts, that no other arbitration service is big enough to replace it."

Update: Mistrial in Alabama Drug Pricing Case Against Watson Pharmaceuticals

Montgomery County Circuit Judge Charles Price declared a mistrial after jurors were unable to reach a verdict in the trial of Alabama's prescription drug overpricing lawsuit against California-based Watson Pharmaceuticals.

Judge Price said this past Monday jurors appeared to be hopelessly deadlocked after more than seven hours of deliberations. He said he expects the case will be tried with a new jury in September.

Attorneys representing the state claimed Watson cheated the state's Medicaid program out of $23 million over about 14 years.

The trial lasted four weeks. Jurors had begun deliberations last week and continued Monday afternoon.

The case is State of Alabama v. Watson Pharmaceuticals Inc., CV2005-219.76, Montgomery County, Alabama Circuit Court (Montgomery).

Source: Bloomberg

Update: Alabama Drug Pricing Lawsuit Case in Juries Hands

Watson Pharmaceuticals, a manufacturer of generic and brand name prescription drugs, is one of the 70 pharmaceutical companies Alabama Attorney General Troy King sued over pricing allegations in 2005.

Watson is accused of inflating prices on lists used to determine how much the state should reimburse pharmacists for drugs provided to people on Medicaid Article Controls.

After more than two weeks of testimony in the complicated case, Montgomery County Circuit Judge Charles Price sent the case to jurors around 1:30 p.m. on Wednesday. They deliberated until about 4:30 p.m. when Judge Price called a recess until Monday morning and told the lawyers to keep working on a resolution.

Jere Beasley representing the state in closing argued that Watson cheated Alabama's Medicaid program out of $23 million from 1991 to 2005. "Nothing so far has gotten their attention," Beasley told the panel of nine women and three men. "I would suggest that you take the $23.8 million as a base and say three times or five times that amount as the punitive damage award."

Beasley also said the alleged "boardroom fraud" is common in the industry, and the country's neediest citizens have been ripped off for years. Change will only come through hitting drug makers in their pocketbooks, he said.

The state claimed it was led to believe it was paying below wholesale prices for medication, but the company said Medicaid officials should have known they were paying higher prices.

Watson attorney James Matthews countered that the state knew for more than a decade that it wasn't being charged the below-wholesale price.

He told jurors the state had plenty of clues, including those in its own documents, to see it wasn't paying the lowest price.

"These are the state's own documents," Matthews said. "Ask yourself -- should that have made them suspicious? Did they really rely on the belief that those were net prices in light of all of that?".

Beasley questioned why Watson didn't bring any of its CEOs or other top executives to testify about its pricing policy and why a liability expert who was present during the trial was never called to the stand.

Matthews said the company expert wasn't needed under oath, and dismissed a state expert as someone who did shoddy work going through files and employee depositions that Watson provided.

"The real truth here is that there is no fraud," he said. "The evidence doesn't support the claims."

Last month, Alabama announced it had settled drug pricing lawsuits against six pharmaceutical companies for $89 million. They included lawsuits against Abbott Laboratories of Chicago and Forest Laboratories, with corporate headquarters in New York City. Both were scheduled to be tried with the Watson case.

The state had previously settled with 10 companies for almost $35 million. Alabama's lawsuits against four companies have gone to trial, with the state winning judgments against each totaling $352.4 million. Those verdicts are being appealed.

Sources:

http://www.forbes.com/feeds/ap/2009/07/09/ap6635121.html

http://www.businessweek.com/ap/financialnews/D99ATL880.htm

Financial Fraud Gives Former Healthsouth CFO 3 Months in Prison

On Tuesday, Tadd McVay, a former HealthSouth Corp. finance chief, was ordered to spend three months in federal prison for his role in the $2.6 billion financial fraud that nearly wrecked the company.

Although Scrushy was acquitted of criminal charges, last month a judge's ruling in a shareholder lawsuit held Scrushy liable for fraud which ordered him to pay $2.9 billion in damages. When the fraud was uncovered in 2003, HealthSouth was nearly forced into bankruptcy.

Despite McVay's pleas to stay out of prison, U.S. District Judge Inge Johnson ordered him to 3 months in prison after McVay had pleaded guilty in a scheme to inflate earnings six years ago and served five years on probation and six months of house arrest.

Since the 11th U.S. Circuit Court of Appeals agreed with prosecutors that the penalty was too lenient, Judge Johnson ordered McVay to prison.

McVay was among five finance chiefs who pleaded guilty to crimes while working under Richard Scrushy, the former HealthSouth CEO. The fraudulent reports, aimed at meeting Wall Street forecasts, were sent to federal regulators between 1996 and 2002.

McVay has said he was promoted to chief financial officer at HealthSouth in late 2002 and signed a phony earnings statement rather than lose his job, which paid him $400,000 a year.

Sources:

http://www.al.com/newsflash/index.ssf?/base/lottery-5/124653284323960.xml&storylist=alabamanews

http://www.nwanews.com/adg/Business/263341/

Katrina-FEMA Trailer Lawsuits Filed by Alabamians for Formaldehyde

Sixty-six people in Mobile County, Alabama filed federal lawsuits against the manufacturers of travel trailers accusing them of exposing them to dangerous levels of formaldehyde after Hurricane Katrina.

The plaintiffs join about 23,000 others that have been filed in Mississippi, Louisiana and Texas. The Alabama suits name seven manufacturers, along with those who won no-bid contracts to install the trailers.

The civil complaints contend that the plaintiffs, who live mainly in south Mobile County, developed conditions such as asthma and are at increased risk of cancer.

Attorney Ronnie Penton, who represents the Plaintiffs, said he will add the Federal Emergency Management Agency as a defendant but cannot do so under federal law until after a 180-day waiting period.

The current suit and the additional 40 civil complaints Mr. Penton plans to file by August 1, will be transferred to a federal judge in New Orleans, who has been appointed to oversee all of the travel trailer litigation along the Gulf Coast.

Attorneys believes this is the first group of Alabamians to file suit over the formaldehyde issue.

"It's the first breakthrough we've had in a long, long time to get some relief for these people," said Tyson, the father of Mobile County District Attorney John Tyson Jr. and a former Bayou La Batre city attorney and judge. "We found them in incredible bad condition, and no one was working on their behalf."

The lawsuits accuse the companies of resorting to substandard materials in order to expedite the manufacture of the housing units and failing to warn the government. Allegations also say poor trailer installation methods by contractors caused stress and flexing on their frames, increasing moisture and formaldehyde exposure.

The suit also says internal FEMA e-mails uncovered by a Congressional investigation showed that government officials were more concerned with potential lawsuits than in ensuring the health and safety of some 150,000 families that needed temporary housing after Katrina and Hurricane Rita.

Penton said the evidence is clear that government officials knew about the formaldehyde risks, "and they failed to tell the public about it." Penton went on to say he believes "in fact, it was a cover-up."

The first of the FEMA trailer lawsuits is scheduled to go to trial in New Orleans in September.

U.S. District Judge Kurt Engelhardt in New Orleans will handle all pretrial matters in the Alabama cases before sending them back to Mobile for trial.

The plaintiffs seek compensation for past and future injuries, as well as punitive damages against the manufacturers and contractors.

Source: Press Register

Government Study relates Formaldehyde to increased deadly cancer risks:
http://www.nlm.nih.gov/medlineplus/news/fullstory_84179.html

$10.4 Million Jury Verdict returned in Breach of Contract & Fraud case

A jury ordered Cello Energy to pay $10.4 million over allegations the firm fraudulently claimed it could produce cheap fuel from hay, waste wood and other material.

Cello Energy is based out of Bay Minette and owned by the former head of the Alabama Ethics Commission, Jack Boykin.

The federal lawsuit was filed by Cello Energy bio fuel investors, Parsons & Wittemore Enterprises; a New York based paper company which also owns a pair of pulp mills in southwest Alabama.

Although Cello Energy built and staffed a plant, Parsons & Wittemore insisted the plant never accomplished what Boykin had long promised—deriving motor fuel from wood chips, crop residue and other biomass.

The jury ruled Monday that Cello Energy and Boykin Trust, the partnership that owned it, were liable for $2.8 million for breach of contract with Parsons & Whittemore. The jurors also decided that the companies, along with Jack Boykin and his son Allen Boykin, were personally liable for another $104,537 for fraud and awarded $7.5 million in punitive damages against all the defendants.

Boykin vowed to move forward with his process for producing fuel. His attorney, Forrest Latta, said Boykin's method has the potential to transform the world.

Parsons & Whittemore invested $2.5 million in Cello Energy and had another $10 million option for a one-third ownership share. Unknown to Parsons & Whittemore, however, Boykin struck a deal with a California firm, Khosla Ventures, which invested $10 million in the construction of a plant in Bay Minette to turn wood chips, hay and other cellulosic material into diesel fuel.

Parsons & Whittemore claimed the deal diluted the value of its investment. And George Landegger, CEO of Parsons & Wittemore, described Boykin's promises about the fuel plant as being lies.

"The jury has spoken clearly in condemning the Boykins' fraud against Parsons & Whittemore. I am gratified that the jury has put a stop to the Boykins' deceit," he said.

Parsons & Whittemore also sued Khosla, accusing the company of interfering in its business relationship with Cello Energy; however, the jury found in favor the Silicon Valley company, Khosla.

Source: Mercury News

Hale County Attorney and Friend Jimmy Seale Passes Away

As many know by now, my friend and Hale County attorney Jimmy Seale passed away on June 21st. It is a great loss to the legal profession and the citizens of Hale County. I don't remember any occasion when I was with Jimmy that he was not laughing---and you could not help but laugh as well. We laughed with Jimmy. We laughed at Jimmy. But, he always made you laugh. Just thinking about Jimmy makes me laugh.

While visiting my parents in Tuscaloosa last weekend, I came across an article in the Tuscaloosa News written by Robert Dewitt. I don't think anyone could describe Jimmy any better than he does in this article.

http://www.tuscaloosanews.com/article/20090628/NEWS/906279930

Our hearts and prayers go out to his family and law partners.

Alabama Drug Pricing Lawsuit in Court

On Tuesday, attorneys for the State of Alabama and Watson Pharmaceuticals of California, gave opening arguments in the case, which alleges overcharges to the state's Medicaid system. In 2005, Alabama Attorney General Troy King filed a complaint against 79 pharmaceutical companies which the State alleges misreporting and inflated prices for the drugs.

Watson attorney James Matthews contends the company saved Alabama millions of dollars by providing less expensive generic drugs.

Jere Beasley, founding shareholder of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., is representing the State of Alabama just as he did against AstraZeneca PLC unit, in a similar case claiming Medicaid drug-price fraud suit and won the state $215,000,000.
(http://www.beasleyallen.com/verdicts/$215,000,000-Verdict-in-a-Medicaid-Fraud-Case/).


King recently reached $89 million in settlements and has also secured verdicts in the amount of more than $352 million, but those are under appeal to the state Supreme Court and the State has not received any funds.


I will be watching to advise of future developments.

Homeopathic Remedies & Dietary Supplements Pose Health Risks

Neither supplements nor homeopathic products are required by the FDA to prove they are safe or effective before going on the market. Reports of these products being contaminated or mislabeled provide substantial ammunition against their use.

The Huffington Post reported that "one quarter of supplements tested by an independent company, ConsumerLab.com, over the last decade have had some sort of problem. Some contained contaminants. Others had contents that did not match label claims. Some had ingredients that exceeded safe limits. Some contained real drugs masquerading as natural supplements."

The article explains that millions of Americans take vitamin, herbal or other dietary supplements. Annual sales for these products exceed $23 billion, and more than 40,000 of these products are on the market.

A 2002 New England Journal of Medicine reported, tens of thousands of supplement-related health problems are handled by U.S. poison control centers each year .

Until 2008, supplement makers were NOT required to report problems to the FDA, and now they must report ONLY serious ones. The FDA estimates that more than 50,000 safety problems a year are related to supplement use.

The Institute of Medicine, an independent science panel that advises the government, studied the situation in 2005 and which urges amending the 1994 law to tighten consumer protections. In their report they said "The committee is concerned about the quality of dietary supplements in the United States. Product reliability is low."

The Associated Press analyzed the Food and Drug Administration's 2008 side effect reports and found that more than 800 homeopathic ingredients were potentially implicated in health problems last year.

Given the recent recalls of pharmaceuticals and dietary supplemtns, consumers must evaluate and purchase these with extreme caution.

As we saw last week, Matrixx pulled 3 Zicam products off the shelves which are sold over the counter and marketed as safe and effective after reports of people losing their sense of smell after its use.

Read full Huffington Post article:
http://www.huffingtonpost.com/2009/06/10/many-natural-supplements-_n_213670.html

Source: http://www.sltrib.com/business/ci_12612995

Mesothelioma

Yesterday, I met with a client of mine. He is in his 80's and was diagnosed two months ago with mesothelioma. He starts chemotherapy next week.

He reminded me much of my grandfather, whom I was very close. He was a child of the depression and World War II. He smiled and laughed as he described, in perfect detail, many aspects of his life that even his children had not known. His wife of 63 years nodded and smiled as he spoke of their life together and her "country cooking". It made me yearn for the conversations that I had with my grandfather, who was of the same generation, grew up working in the mines, and believed in working hard, playing by the rules, reading his bible, and giving something back, especially to those in need or without.

I worry about his condition in 6 months and whether he will be alive a year from now.

We have all heard of Mesothelioma. We see ads on television day and night. We know the stories about the industry having knowledge of the dangers of asbestos going back to the turn of the century, but some basic information bears repeating.

Background

Mesothelioma is a rare form of cancer in which malignant (cancerous) cells are found in the mesothelium, a protective sac that covers most of the body's internal organs. Most people who develop malignant mesothelioma have worked on jobs where they were exposed to and inhaled asbestos particles.

Mesothlium cells are found in the sac lining of the chest (pleura), the abdomen (peritoneum), or the heart (pericardium). The specific type of mesothelioma is named for the tissue where the cancer originates.

Approximately 70% of mesothlioma cases starts in the chest (pleural mesothelioma), which surrounds the outer lining of the lungs and internal chest wall.

Symptoms of the illness typically take 20 to 50 years to appear. While there is no cure, treatments involve a combination of surgery, chemotherapy and radiation.

Although reported incidence rates have increased in the past 20 years, mesothelioma is still a relatively rare cancer. About 2,000 new cases of mesothelioma are diagnosed in the United States each year.

Mesothelioma occurs more often in men than in women and risk increases with age, but this disease can appear in either men or women at any age.

The Center for Disease Control noted from a 2003 study that “because mesothelioma manifests 20--40 years after first exposure, the number of mesothelioma deaths will likely peak by 2010.”

If you or a loved one has been diagnosed with mesothelioma, please give me a call to discuss your case. 205-322-8880 or email me @ Chrish@PDKHLaw.com.

PDKH lawyers Jeff Kirby & Chris Cochran obtain 6 Million Dollar Verdict in FELA/train wreck case

On April 19, 2009, PDKH attorneys Jeff Kirby, and J. Chris Cochran obtained a $6,000,000 verdict in Clarke County, Alabama, for a former Norfolk Southern conductor who was severely injured Feb. 14, 2005, at the Walker Springs crossing. The accident involved a log truck and a Norfolk-Southern Railway train.

The Clarke County Democrat reported the $10,948,250 cumulative award may be the largest cumulative civil judgment in Clarke County's judicial history and the complicated trial, which lasted 13 days from March 30 until April 17, is also likely the longest in the county's history.

Plaintiff attorneys alleged two major issues in the case: 1. The railroad's habit of parking rail cars on a siding south of the crossing could obscure the view of an oncoming train and did hide the train that hit the log driver truck. 2. The fact that the crossbuck sign, the traditional "X" that indicates a railroad crossing, was only 12 feet from the track when railroad regulations say it should be 24 feet.

Railroad employees maintained in sworn affidavits prior the trial that the sign was at the proper distance. However, at trial they admitted otherwise. While the trial was in progress, the crossbuck sign was moved to its proper 24 foot distance.

For more information, contact Pittman Dutton Kirby & Hellums lawyers at 205.322.8880.

The Clarke County Democrat published an article about the case on April 23, 2009;
click here : http://www.clarkecountydemocrat.com/news/2009/0423/front_page/001.html

Alabama Supreme Court Stikes Down $5 Million Obstretics Medical Malpractice Award

I read yesterday the Alabama Supreme Court has overturned a multimillion-dollar jury verdict to a woman whose child died shortly after birth in 2005. The Alabama Supreme Court sided with Mobile OB-GYN in a malpractice lawsuit filed by Wendy Godwin Baggett over the death of her newborn son. The court ruled that evidence didn't support the amount awarded and ordered another trial.

The Mobile jury ordered the obstetrics group to pay Baggett $8 million, but that amount was reduced to $5 million before the case reached the Supreme Court. Baggett claimed that negligence by a doctor led to the death of her son less than two days after his birth.

When the opinion comes out, I'll know more information about it.

Federal judge sentences former Alabama Insurance Executive, John Goff, to 12 years prison for mail fraud and embezzlement

United States District Judge Myron Thompson imposed a 12 year sentence on John Goff and ordered him to pay $5 million in restitution to XL America insurance company, of Wilmington, Delaware.

Goff was once a major supplier of worker compensation insurance in southern states of Alabama, Tennessee, North Carolina, Georgia, and Mississippi.

In February, a federal court jury convicted Goff of counts including mail fraud, embezzlement and filing a false report with the Alabama Department of Insurance regarding his business dealings.

Goff was convicted of taking money from clients that included churches and businesses and using it to fund a lavish lifestyle rather than sending proceeds to insurance companies. WFSA reports that, "at one time, Goff had an annual salary of more than $1 million, flew in a private jet and slept in a million dollar home, but now he says he cannot afford the restitution he must repay."

“They’re asking at least $200 a month,” Goff told the television station outside of federal court. “Well, I don’t know. Maybe I need to go and play the Florida lottery. That’s the only way I can do it. I can’t pay it.”

Goff is likely to appeal his conviction, as the judge that sentenced him, Myron Thompson, said he thought several of the convictions might be reversible, according to the report.

Chris Hellums can be contacted at ChrisH@PDKHLaw.com

Read the full WSFA.com article about the John Goff conviction here:
http://www.wsfa.com/Global/story.asp?S=10466762&nav=menu33_5_1

http://www.wsfa.com/Global/story.asp?S=10466762&nav=menu33_5_1

Florida Department of Insurance Issues Show Cause Order Against Liberty National Life Insurance Company

On June 3rd, the Florida Department of Insurance issued an order for Liberty National Life Insurance Company to show cause why a final order suspending or revoking the Certificate of Authority currently held by Liberty National in the state of Florida should not be issued.

The Order arose out of a Market Conduct Examination which took place from June to November of 2008 at Liberty National offices in Birmingham, Alabama.

According to the Order, Liberty National was accused of unfair and deceptive conduct. Specifically, Liberty National is accused of discriminating against people solely because of the individuals national origin.

The order primarily involves individuals from Haiti who applied for insurance, but also addressed applications from individuals from Columbia, India, and Pakistan. The applications reviewed by investigators requested to know if the individual had lived in the United States for the last year. However, Liberty National had an underwriting policy that applicants born in certain countries would be rejected if they had resided in the United States for less than 10 years. This heightened underwriting standard applied to individuals from less developed countries. "This was in direct contrast to the written information provided to applicants as part of the application process that they must have resided in the U.S. for the past year to be eligible for life insurance coverage."


As a result, applicants were denied coverage based solely on their national origin.

Additionally, regulators determined that Liberty National represented a basis for denial as "information not received" which was a completely false and fabricated reason to cancel a policy when no actual reason existed. One underwriting file even contained a handwritten stating "Find a reason to cancel/decline. Info not received?"

For a complete copy of the report, contact Chris Hellums at Chrish@PDKHLaw.com

PDKH announces Hydroxycut Recall Information Website: HydroxyLawyer.com

Pittman Dutton Kirby & Hellums, P.C. announces its consumer Hydroxycut Recall Information website: hydroxylawyer.com. HydroxyLawyer.com . This website will provide consumers with up-to-date information regarding the Hydroxycut Recall Litigation.

Pittman Dutton Kirby & Hellums, P.C. has an worked extensively on products liability and personal injury actions against dietary supplement and pharmaceutical companies.

Pittman Dutton Kirby & Hellums, P.C. managing shareholder Chris Hellums recently was appointed co-lead counsel of the Executive Committee to the Personal Injury Plaintiff's Steering Committee for the Total Body Multi-District Litigation.

Chris Hellums can be reached at ChrisH@PDKHLaw.com

Are Debt Collectors out of Control?

It all started with a call from a potential client. When the call started, I could tell it was going to be a long conversation. The call was from an elderly woman who sounded as if she was at her wits end. As she told her story, I realized that I had to see if I could help.

Her daughter had gotten into drugs and stolen her identity. She had taken out credit cards and incurred debt in her mother’s name. When her mother found out, she talked with her daughter and told her that there must be consequences for her actions. She contacted the police and filed a complaint against her daughter. This was a difficult decision as she loved her daughter and realized that her actions would effect her daughter’s life. However, she was even more concerned if she did nothing to get her daughter's life turned around. Ultimately, her daughter plead guilty and entered into a restitution agreement.

Image via Wikipedia

Shortly thereafter, the mother and true victim began getting calls and letters from debt collectors. She explained the situation to them. She provided them a copy of the complaint she filed. She provided them with a copy of the guilty plea. She even obtained a letter from the District Attorney who prosecuted her daughter describing what happened and stating that she was not now, or had she ever been, a participant in the fraud and in fact, was a victim.

These collectors did not care. Day and night they called. They called at home. They called at work. They even called at her husband’s work. They threatened to garnish her wages. They threatened to take her house. They threatened just about everything you could threaten.

She then went to an attorney. She paid him thousands of dollars to write letters to these people in hopes that would stop the harassment. Nothing seemed to work.

Somehow she found me late one afternoon. Up until this point in time, I had never handled a case like this one. I researched the issues and began looking at consumer sites such as budhibbs.com.

Ultimately, I determined that nothing short of a lawsuit would stop this abuse. I filed suit against the various creditors and debt collectors. Immediately, creditors began to remove negatively reported information.

I then began to receive the first of what has become common in these types of cases. The attorneys for the various creditors and debt collectors call and say they cannot find my client’s account, their client has no record of any calls to my client. They would never call at work. My client must be mistaken. Fortunately, my client had kept recordings from her answering machine and had co-workers listen in on conversations. Ultimately, we settled with the debt companies and collectors. My client received economic compensation and on some level, felt vindicated.

Since that time, I have represented a number of client’s in these types of transactions.

I advise them all to do the following:

1. Document every conversation
2. Document any phone number which calls them
3. Retain all letters received from any bill collectors
4. Dispute all accounts with the various Credit Reporting Agencies
5. Obtain a police report
6. Send a letter, certified mail, to each creditor and debt collection company

I also tell my clients to be prepared to receive more harassing calls and letters stating that the creditor or debt collectors have completed their investigation and determined that they owe the debt.

To understand why this occurs, consumers need to know more about how the industry works. Stay tuned to future postings about how the industry operates, the tactics they use, and where to go for help.

Chris Hellums is the managing shareholder of Pittman Dutton Kirby & Hellums. He can be reached at CHRISH@PDKHLaw.com or toll free at 866-515-8880