Illinois Deserves the Truth

Federal Agencies letting manufacturers off the hook

With special interest and big business spending millions of dollars lobbying to take away the courts from consumers - you would think that federal agencies should do their part to protect consumers and hold wrongdoers accountable.  But if you thought this... you would be WRONG.  Unfortunately, as this Chicago Tribune article points out, federal agencies, under the Bush Administration, are being criticized for doing their fair share of screwing over consumers and protecting their Fat Cat friends.  These agencies are "rule making" people out of the right to hold wrongdoers accountable in the civil justice system, by making it tougher (or in some cases impossible) to bring suit against a manufacturer if the product was approved by a federal agency.

As Joan Claybrook, a former head of National Highway Traffic Safety Administration who now runs Public Citizen, a consumer advocacy group, put it:

"Liability puts a burden [on companies] to be very careful ... and not cut corners,"... "Without that, manufacturers will literally get away with murder."

When she ran NHTSA, Claybrook said, the agency did not try to regulate for every situation. Instead, she said, it assumed companies also did their own testing to ensure the safety of their products. If they didn't, they could pay the price in court.

"Federal standards are not all-encompassing," she said. "Liability fills the gaps."

Even though these rules are bad, Congress has the power to step in and pass laws preventing these agencies from cutting off consumers from the courts. It is unlikely that this administration would sign them, since they were the ones prodding these agencies to make these awful rules in the first place.  Let's hope that Congress and the new administration (whomever it will be) acts to prevent manufacturers from getting away with murder. 

To read more about this issue click here.

Milwaukee Crime Victim Relies on Civil Court for Justice

Crime victims can use the civil court system to seek justice, even if their perpetrator isn't criminally prosecuted.  An 85-year-old woman in nearby Waukesha County was beaten and robbed in a home invasion.  She says she can identify one of the attackers, but authorities are unlikely to file criminal charges against him.  That didn’t stop a civil court judge from ordering the man to pay her $3 million in punitive damages, suffering, and money to buy an alarm system for her home.

Supreme Court Reduces Punitive Damages to 1/10th of What the Jury Thought Was Fair for the Exxon Valdez Oil Spill

Cross posted from The Pop Tort by Amanda

Right now the folks at Exxon Mobile are probably writing out their 'Thank You' cards to the U.S. Supreme Court Justices.  Even though the company posted a "disappointing" $10.9 billion profit in the first quarter of 2008 (the second highest U.S. corporate profit ever – the highest being themselves in 2007) the U.S. Supreme Court ruled today that the company only has to pay $500 million (nope, I didn't forget a zero) in punitive damages to the 30,000 victims of the Exxon Valdez oil spill.

Okay, so in 1994, when a jury in Alaska awarded the victims $5 billion, the punitive damages award really might have punished the company for causing this disaster.  In 1994, $5 billion represented a year's profits for the oil company.  In 2006, the award was cut down to $2.5 billion and only represented "about three weeks of Exxon's current [2006] net profits."  So, the current $500 million damage award is what?  Well, according to the New York Times, Exxon Mobile earned more than $1,287 of profit for every second of 2007.

At that rate, it only took them four and a half days to pay off this court's punitive damages judgment.

Madigan Strikes Another Blow to Countrywide

Illinois Attorney General Lisa Madigan files a lawsuit today against Countrywide Financial, the nation's biggest mortgage lender.

"Unfair and deceptive advertising, marketing and sales practices were utilized to push mortgages, while hiding the real costs and risks to borrowers, including enticing borrowers with low teaser rates, low monthly payments and 'no closing cost' loans that failed to make clear and conspicuous," according to the lawsuit, which also names Countrywide Chairman and Chief Executive Angelo Mozilo as a defendant.

Among other things, Madigan wants Countrywide to pay restitution to all affected consumers who lost their homes or loans. She also asks for 90 days to review any loans that are in or near foreclosure to see if borrowers can pursue affordable options.

Madigan has long had her eye on Countrywide, even going beyond allegations of mere corruption to accuse them of racial discrimination.  This lawsuit just adds to her reputation as one of our most important consumer watchdogs.  It could also be a big deal for Illinois consumers, if it goes our way.  So far, the government hasn't done enough to aid struggling homeowners.  Let's hope the Office of the AG gets the job done for everyone who has been scammed by Mozilo's Countrywide.

Woman Claims Retaliation for Reporting Medication Errors

Here is a situation I've never come across:
Back in my home state of Iowa, an innocent woman was jailed, cited for assault of her own mother, and denied visitation rights to her mother’s nursing home for thirteen months—all on false pretenses.  She says she was falsely accused by a nursing home worker, because she complained about medication errors and poor care at the home—a home that was cited for “medication errors and problems with nursing services” just last year.

Casualties of Tort War: Consumers

Cross posted from The Pop Tort by John Guyette

With few exceptions, like Stephanie Mencimer’s piece in the Washington Monthly a few years ago, the media have a terrible tendency to spit back talking points provided to them by corporate groups and to talk about so-called “tort reform” like the whole thing is just a money battle between lobbyists – instead of dealing with the constitutional rights that are at stake or the impact on average people of weakening this system, not to mention our health and safety as a nation. 

The New York Times sometimes stood apart from this and actually used to challenge industry groups that orchestrated this so-called “tort reform” movement to serve their rich and powerful corporate members, many of whom have been found liable for egregious misconduct. (See here or here)

But no more.

Yesterday the Times ran a lengthy article entitled, "To the Trenches - The Tort War Is Raging On," citing without comment brazenly-biased and bogus corporate surveys and insurance industry consultant “reports” that have been widely trashed (for instance here, here and here), and making it seem like the only people affected by laws that take away rights of injured consumers are the attorneys who represent them, or to the extent attorneys are affected, the only thing they care about are their fees.  What an outrage.

Here's what goes on in the life of most trial lawyers: A legitimately injured person walks into their office.  The attorney looks into it and makes an offer to an insurance company, usually forced to leave a message on voice mail.  What happens?  Nothing.  No one even calls back. Welcome to the world of most trial lawyers. That’s why they are forced to file most cases, as insurance companies drag out these cases to egregious lengths.  Where is that scenario described?

(It should be noted that the Center for Justice & Democracy twice asked to speak to this Times reporter and was blown off, receiving not so much as a courteous “no thanks” to two emails.  That’s a first.)

From the story:

In a Washington ballroom bedecked with flags honoring explorers who overcame oceans and mountains to pursue international trade, Thomas J. Donohue congratulated the assembled modern merchants — a group of executives, lobbyists and lawyers — for challenging a more mundane adversary.

"It took guts, bravery and vision to get behind what must have seemed like an insurmountable task — taking on the powerful trial bar," said Mr. Donohue, the chief executive of the United States Chamber of Commerce. "We have succeeded beyond our expectations."

Yes "a group of executives, lobbyists and lawyers" sitting around congratulating themselves for limiting the rights of catastrophically-injured children truly does take "guts" and "bravery."

The story goes on to paint a picture of uncertainty as to who the winners and losers are in the tort war, once again leaving average consumers out of it.

Hello, where are the normal everyday people in all of this?  We're over here! Hello?

Mortgage Fraud Crackdown Hits Home

Finally, more is being done to track down mortgage insiders responsible for defrauding the public of millions.  The Justice Department just unveiled the perfectly-named Operation Malicious Mortgage, an effort which targets perpetrators of crimes as wide-ranging as bankruptcy fraud, foreclosure rescue scams, identity theft, and falsified loan applications and real estate appraisals.  Here in Illinois, authorities arrested 67.

In Chicago, authorities said the centerpiece of their investigation involved one of the largest mortgage fraud schemes ever prosecuted in federal court here.

The ring run by Bobbie L. Brown Jr. fraudulently obtained loans on some 183 homes in Illinois, Nevada and California, authorities said, and lenders lost more than $24 million.

In several instances, Brown allegedly bought homes using stolen Social Security numbers. In other cases, Brown and his co-defendants used straw purchasers to buy homes, gaining the straw purchasers' cooperation with promises of "no money down" and "cash back at closing," according to the charges.

Brown and others allegedly told the straw purchasers that they did not have to make any mortgage payments and that the homes would be rented out. Instead, federal authorities said, Brown, several co-defendants and their friends and relatives moved into the homes and didn't make payments.

"These fraudulent loan packages overstate income, they overstate assets," said Gary Shapiro, first assistant U.S. attorney in Chicago. " They had phony tax returns in them prepared by their cooperating tax accountant. The defendants supplied the down payments for these loans and falsely verified in the loan applications that the borrowers who were allegedly purchasing these homes were making the down payments."

God knows there are more than 67 of these scam artists out there, so let's hope we see more of this accountability.

Chevron CEO Talks Gas Prices

Remember how a while back, when gas in Chicago was only $4 per gallon, Exxon CEO Rex Tillerson appeared on TV talking about Big Oil’s (non)role in curbing rising gas prices?  Chevron’s chief oilman did the same thing with Wolf Blitzer the other day.  He sounded a lot like Tillerson.  (Watch the clip here)  Consumers are getting fed up with Big Oil's misleading solutions to this crisis, especially when they come from an industry that has such an impact on our daily decisions.  Whatever happened to corporate social responsibility?

Strong Reactions to Marion VA Mismanagement

Here's an update on the Marion VA medical center that was scourged by reports of poor care and abuse.  The VA just released another report on wrongdoing at the hospital, this one about poor management (the first one dealt with actual medical care).  As The Southern reports, Illinois' federal lawmakers are sounding off.

Democratic Sens. Dick Durbin of Springfield and Barack Obama of Chicago made a joint statement.

"This new report from the VA confirms many of our suspicions about the problem that existed at the Marion VA Medical Center," they said. "The report paints a disturbing picture - a management culture that compounded problems at the facility; management at the regional level that did not serve as a quality check on the Marion facility; and no way for employees to complain or make meaningful suggestions about problems when they arose."

The senators said, "Our veterans and their families have made incredible sacrifices for this country, and when they return home, we owe them access to the best health care. Today's report proves that this was not the case at the VA medical facility in Marion."

People are rightly suspicious of how serious legislators are about seeing improvements and holding people accountable.  Like this reader, who recently commented on one of our posts.  Illinois congressional delegates meet with the Secretary of Veterans Affairs this week, so we shall see what comes of it.  In the meantime, we can hope that the widows of victims, who are seeking redress through the civil justice system, force accountability themselves.

Thanks to John Homan for helpful correspondence

Imprisoned Hero Finally Compensated

Back in 2002, Rachelle Jackson, a Chicago nurse, rescued a police officer from a burning car.  Now, six years later, Ms. Jackson has won a lawsuit against the city and the police officer for false arrest, coercive questioning, malicious prosecution, and intentional infliction of emotional distress.  How was such a hero ever treated so poorly, you ask?  Here's the story:

On November 19, 2002,    Rachelle Jackson heard twisting metal and ran to aid the occupants of a Chicago Police vehicle that had been in a car crash.    The car caught fire, but Rachelle rescued Chicago Police Officer Kelly Brogan from the car anyway. Many residents responded    to aid the officers. During the chaos, someone stole the service weapon of Officer Brogan's partner, who lay slumped over    the steering wheel unconscious. Rachelle went to the police station to be a witness.

Once there, officers subjected    Rachelle to over fifty hours of coercive and abusive interrogation, without access to a bathroom. Days later, Officer Kelly    Brogan, who Rachelle rescued, came forward with a lie that Rachelle Jackson had attempted to remove her star and steal her    gun; Rachelle claimed she pulled the officer from the burning car. After over ten months in jail, Cook County Circuit Court    Judge Schultz exonerated Rachelle of wrongdoing, just as the federal jury did yesterday. The eyewitnesses, except for Officer    Brogan, all corroborated Rachelle's story.

Finally this officer faces accountability.  We applaud Ms. Jackson for her heroic efforts.  Read her story in the Tribune.