Consumer Protection

November 19, 2008

Illinois News Roundup

IL Attorney General Lisa Madigan is suing seven companies responsible for mortgage scams targeted at struggling homeowners.

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After a derailment killed two and injured 80 others, Metra agreed to pay the families of the deceased $11 million.

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A Cicero woman overdosed and died from a leaky “pain relieving” skin patch in 2004.  Her family just won their suit against the manufacturers.

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A Chicago woman who contracted HIV from her kidney donor sued the hospital, which never told her the donor was high-risk.

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Apparently, there is a coal company downstate that has no qualms about the civil justice system.  It filed a lawsuit against federal pollution regulators.

October 30, 2008

Madigan Taking it to Distributor of Flawed Children's Product

You may have heard the phrase “profits over people”, but how about “profits over little people”?  Sounds even worse, doesn’t it?  IL Attorney General Lisa Madigan filed a lawsuit yesterday to force the distributor of a dangerous crib to stop peddling the product once and for all.  The Simplicity bassinet made the news earlier this year when we learned that its flawed design caused at least two infant deaths.  But despite knowing this, distributor SFCA refused to participate in a recall.  Their argument, in a nutshell: ‘Hey, we’re not the ones who designed it’.  Details on the suit:

Madigan’s lawsuit asks the court to prohibit SFCA from selling and distributing the unsafe bassinets in Illinois and to require SFCA to:
* Hire an independent consultant to develop a product safety protocol and review all of SFCA’s product designs to ensure compliance with safety standards;
* Recall all Simplicity bassinets that use the recalled design;
* Provide refunds to retailers who issued refunds or store credits to consumers who returned Simplicity bassinets; and
* Notify the public of CPSC recalls by advertising in newspapers throughout Illinois.

Let’s hope the suit accomplishes all of these objectives.  Go to the website for Kids In Danger for more on children’s product safety.

October 23, 2008

Illinois News Roundup

Illinois will pocket $3 million from a 33-state settlement over deceptive marketing practices by drug manufacturer Pfizer.

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The FDA announced a new website for consumers looking into current FDA safety efforts.  Visit it at http://www.fda.gov/cder/drugSafety.htm.

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Doctors misdiagnosed a 33 year old Chicago man's heart condition five times, leading to an infection and eventually a permanently disabling stroke.  Last week, the man settled his lawsuit with those responsible.

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Another faulty children’s product recall: this time it’s 1.6 million Delta cribs responsible for several infant deaths.

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The Department of Justice and AGs from 13 states – including neighbors Iowa and Missouri - filed a lawsuit to stop a merger of two of the nation’s top beef packers

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The FDA denied Illinois-based Abbott Labs’ request for approval of their extended-release Vicodin.

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Read this sobering article about how seniors have had to watch their legal rights slowly stripped away in recent years.

Memo to U.S. Supreme Court: Immunity Bad! Reading the Newspaper Good!

Cross posted from The Pop Tort by Andy Hoffman

As we count down the days before the U.S. Supreme Court hears arguments in the big “preemption” case, 800pxdead_sea_newspaper Wyeth v. Levine, the news has been filled with compelling evidence that granting drug companies complete immunity from lawsuits is a truly terrible idea.  Here are a few samples…

Citing a new report by the Government Accountability Office (GAO), the Wall Street Journal reported today  that the Food and Drug Administration (FDA) “is failing to keep accurate data about foreign drug facilities it is supposed to oversee and often doesn't follow up warning letters with inspections.”

A new study out of the Netherlands found that “Nearly one in four recently approved products in a relatively new class of medicines needed some type of regulatory action because of safety issues that arose after they came on the market,” according to the USA Today.

Meanwhile, the Journal of the American Medical Association (JAMA), in anticipation of Wyeth, has written an editorial forcefully condemning blanket immunity for drug and medical device manufacturers.  Here’s an excerpt.

“Given the current imperfect process for approval and the flawed postmarketing surveillance system, the drug and device regulation process is at best an inexact and incomplete science. Until these deficiencies in the system are remedied, some patients inevitably will continue to experience harm from the use of newly marketed products as well as from use of other approved medications. Just as with other consumer products that cause harms, consumers (ie, patients) who are injured by defective medical devices or by pharmaceutical products with inadequate warnings of potential harms may have to resort to legal action as recourse for their injuries…Litigation and state tort law ‘provides a system of civil justice designed to compensate patients, deter unreasonably hazardous conduct, and encourage innovation in product design, packaging, labeling, and advertising.”

“Thus, tort law serves in effect as a way to close regulatory gaps in the FDA premarketing approval process and to provide a mechanism for postmarketing surveillance. Moreover, litigation has been a rich source of information about how drug and device manufacturing companies behave, such as with off-label promotion, guest and ghost authorship, and reporting of safety findings. Without the information revealed by the public release of documents in tort liability actions, many of these behaviors would remain unknown, some drug manufacturers’ judgments about safety issues would be hidden from view, review, or oversight, and the FDA would not be able to uncover them either…”

October 17, 2008

Countrywide Still Doesn't Get It

Earlier this month, a lawsuit by the IL Attorney General led to a deal with Countrywide - once Illinois' largest subprime lender - that included loan modifications for struggling homeowners, cash compensation for people unfairly forced out of their homes, and a statewide foreclosure freeze.  Yesterday, citing the settlement and a lack of "community confidence", the state Department of Financial Regulation banned Countrywide from issuing new loans in Illinois.  You think that would stop Countrywide? 

Headline from a Tribune story this morning: Countrywide to ignore state ruling.

While Countrywide Home Loans operates under a state license, Countrywide Bank, which issues most of its loans, is federally chartered, and therefore can give the one-finger salute to state regulators.  I'm glad to see they care so much about rebuilding all that lost community confidence.

October 15, 2008

Complete Immunity from Lawsuits – The Lasting Damage of the Bush Administration

Cross post from The Pop Tort by Andy Hoffman

A fantastic new investigative report from the American Association for Justice (AAJ) called “Get Out of Jail Free: A Historical Perspective of How the Bush Administration Helps Corporations Escape Accountability”  finds, through documents obtained from a series of Freedom of Information Act requests, that “multiple federal agencies were repeatedly ordered to usurp state law and undermine consumer protections,” for the purpose of giving total immunity to corporations instead.

This issue – preemption – is one of the hottest civil justice topics today.  The anti-consumer U.S. Supreme Court could soon give its blessing to this massive Bush Administration effort, which was also highlighted today by  the Wall Street Journal.  Check out the article and video detailing how the Bush administration intends to spend its last days in office rewriting “a wide array” of federal rules that could prevent product-safety suits by injured consumers for years to come…  According to the article,

The administration has written language aimed at pre-empting product-liability litigation into 50 rules governing everything from motorcycle brakes to pain medicine. The latest changes cap a multiyear effort that could be one of the administration's lasting legacies, depending in part on how the underlying principle of pre-emption fares in a case the Supreme Court will hear next month.....The use of rulemaking to protect corporations from product liability was discussed from early in the Bush administration, said former Bush domestic-policy adviser Jay Lefkowitz, who was instrumental in the process.

 

October 08, 2008

County Sheriff Lays Down the Law

Today Cook County Sheriff Tom Dart announced his department would put a freeze on foreclosure evictions.  The decision stems from the fact that too often officers find themselves needing to evict innocent renters, who are unaware their landlords are in any trouble.  He's now asking mortgage companies to provide greater notification to tenants about to be evicted.  From the Tribune,

Dart acknowledged he could be found in contempt of court for ignoring court orders, but said  he was willing to risk that to carry out "justice."

He noted that hundreds of Cook County residents each month are evicted after sheriff's deputies show up at their doors, not knowing that their landlords haven't made their mortgage payments.

"The people we're interacting with are, many times, oblivious to the financial straits their landlord might be in," Dart said. "They are the innocent victims here, and they are the ones all of us must step up for and find some way to protect."

In his release, Dart puts it more succinctly,

"We’re just not going to  evict innocent tenants. It stops today.”

Sifting through some of the commentary posted on media websites, it looks to be an unpopular decision.  If you ask me, we should applaud the sheriff.  He has done what seems unheard of: he's shirked an unjust rule in order to do the right thing.  Isn’t it refreshing to see this kind of morality?  I think we need more Tom Darts.

October 06, 2008

Countrywide Settlement Means Help for Illinois Homeowners

Over the weekend, IL Attorney General Lisa Madigan and other state AGs announced an $8.8 billion, multi-state lawsuit settlement with Countrywide Financial (now controlled by Bank of America).  I lamented in a post last week that despite the great work of several state AGs, homeowners were still stuck without much help when it came to modifying their loans.  I guess I spoke too soon.  According to the Tribune, the Countrywide deal could help 21,000 Illinoisans keep their homes. 

Bank of America, which is settling the lawsuit, purchased Countrywide earlier this year as Illinois Atty. Gen. Lisa Madigan and other attorneys general were investigating allegations of fraud against the lending giant. Bank of America promised to work out new mortgages at interest rates as low as 2.5 percent and pay cash compensation to people who already have lost their homes.

The settlement should help Illinois homeowners reduce their payment obligations by as much as $185 million, said a spokeswoman for Madigan. As part of the settlement, Countrywide has agreed to halt foreclosure sales and not initiate foreclosure proceedings for customers likely to qualify for the program. The program applies to people who received mortgages from Countrywide before Dec. 31, 2007.

This is a much-needed victory for struggling homeowners and further testament to the importance of the offices of state attorneys general.  Read more about their work in this CJ&D white paper.

October 02, 2008

From Predatory Lenders to Predatory Rescuers

Beware the wolf in sheep's clothing.  IL Attorney General Lisa Madigan filed a suit against Aeroworks, a Pennsylvania company that allegedly ran fraudulent mortgage rescue schemes in Illinois.  The Sun-Times reports,

According to the complaint, the defendants charge consumers up to $1,185 in upfront fees for counseling and mortgage rescue services but rarely produce successful results, a release from Madigan's office said. They also fail to give consumers the right to cancel, the suit claims. The complaint alleges the defendants accepted money from at least 215 consumers in Illinois during 2006 and 2007.

It seems these guys had as much free reign to conduct their shady business as the subprime lenders who came before.  Very discouraging, since this is just the time when rescue plans are most needed.  Case in point: a new report from the State Foreclosure Prevention Working Group, which is made up of bank regulators and state AGs like Madigan.  Their report examined the success of foreclosure prevention efforts and found that lenders aren’t doing enough to help struggling homeowners.

Loan modifications for at-risk homeowners dropped by 28 percent from January to May 2008, which is the lowest rate of modification since late 2007. Overall, the report concluded, lenders have not developed an effective strategy to confront default loans before interest rates rise.

Great... then who can we rely on?  The state AG's office, I suppose.  They may not be able to modify a loan, but at least they are exposing the grifters for us.

September 30, 2008

Illinois News Roundup

The New York Times reports that 94% of nursing homes violated federal health and safety standards last year.  The rates were high for all types of facilities, but it's no surprise that for-profit homes were the worst offenders.

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Chicago-based Walgreen must pay $10 million for submitting false claims to Medicaid programs in four states.

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The editorial writers at the Southern urge the Department of Justice to investigate the Marion VA hospital deaths for criminal actions.

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The Urbana school district and negligent employees agreed to settle a lawsuit with a girl sexually abused by her former teacher, Jon White.

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A jury recently sided against the Belleville Diocese in a sex abuse trial.  With the diocese trying to wiggle its way out of taking responsibility for its actions, victim advocates want an audit conducted to prove it has the ability to pay.

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Memo to meat-eaters: beginning today, the new 'Country of Origin Label' rule will tell you the nationality of your every entree.

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