New Mexico Injury Attorney Blog

The $100 million award of punitive damages against British Petroleum for workers injured by a toxic chemical release raise some interesting issues for New Mexico law. The federal court case in Texas offers some precedent but punitive damages awards are governed by state law. It seems unlikely that the award against BP would stand due to the 333 to 1 ration of punitive damages to compensatory damages.

New Mexico's law is fairly well established. A punitive damages award in New Mexico will be overturned only if it shocks the conscience. Texas law is probably similar explaining the language used by the BP spokesman. The seminal case in New Mexico is Jolley v. Energen (NM App. 2008).

The Court in Jolley relied heavily on the 2003 U.S. Supreme Court case of State Farm Mut. Auto. Ins. Co. v. Campbell. The Supreme Court in Campbell stated that the " degree of reprehensibility of a defendant's conduct was the most important consideration in the reasonableness of a punitive damages award. Drawing further on Campbell, the Court stated that " we compare the damages to the enormity of Defendant's wrong apart from the actual injury sustained." The reprehensibility of the defendant's conduct is measured by five categories of conduct:

1) the harm caused was physical as opposed to economic;
2) the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others;
3) the target of the conduct had financial vulnerability;
4) the conduct involved repeated actions or was an isolated incident; and
5) the harm was the result of intentional malice, trickery, or deceit, as opposed to mere accident.

The Court in Jolley recognized that punitive damages are awarded for the purposes of punishment and deterrence of others from similar behavior. However, punitive damages must be based on reason and justice. The Supreme Court in Campbell refused to impose a bright-line ratio but stated that single digit multipliers are more likely to meet the standards of due process.

The Court in Jolley upheld the punitive damages award which was less than 7 to 1 in the case. The $15 million represented one of the largest punitive damages awards in the state's history. In so ruling, the Court stated that the punitive damages award must not be so unrelated to the injuries as to plainly suggest passion and prejudice over reason and justice in the jury's verdict.

The BP verdict representing 333 to 1 would appear to suggest that passion and prejudice dictated the jury's verdict and would likely not stand in New Mexico. In fact, the history of BP's behavior which likely formed the basis for the enormous award was also probably the basis for the passion and prejudice of the jury. The case is most interesting in light of BP's history at the subject plant. After all, punitive damages are meant to deter bad behavior and quite clearly BP has not yet received that message.

Whether or not the verdict is overturned, the verdict certainly sends a message to corporate actors to behave reasonably in the future in settlement discussions. BP's stubborn $500/worker offer of settlement resulted in the litigation. Unfortunately, such behavior is often present when dealing with corporations and insurance companies. Verdicts such as the one against BP should cause cause corporations to approach the process with greater fairness and reason. I say should because the reality is that nothing is likely to change.

Related Reading:
Caps on Punitive Damages: Great for Business, Bad for Everyone Else
Steps Necesssary to Prove Your Damages in a New Mexico Personal Injury Case
Mitigation of Damages in New Mexico Personal Injury Claims

Collins & Collins, P.C.
Attorneys at Law

Ten British Petroleum workers were awarded $100 million dollars by a federal jury for injuries and damages related to contamination at one of the company's plants. According to reports, all but $300,000 of the $100 million award were for punitive damages.

A spokesman for BP stated that "We are shocked and outraged by today's verdict, and we will appeal... The verdict, and punitive damages award in particular, is utterly unjustified, improper and unsupportable."

BP clearly will appeal and its chances of success are pretty good. The ration of 333 to 1 punitive damages to compensatory damages is a pretty high ration by any standard. In addition, Texas courts often caps punitive damages at $200,000 per plaintiff.

On the other hand, this case is exceptional in a number of respects. First, BP has a history of safety violations at the subject plant where 15 workers were killed in 2005 in an explosion at the plant. The company settled for $2 billion in damages and was ordered to pay an additional $50 million in criminal fines. The company is currently fighting an $87 million fine imposed earlier this year by OSHA for safety violations. The jury obviously found that BP's behavior represented a pattern of behavior suggesting willful, wanton or reckless conduct. The jury verdict may also have represented passion and prejudice over reason and justice, which in New Mexico is a basis for reversal of punitive damages awards.

Whether the verdict is overturned on appeal or not, it should get the attention of BP since there remain 133 additional workers who have made claims related to the same toxic chemical release in 2007. The lawyer for the injured workers stated that he had offered to settle early on for $10,000 per worker. BP countered with $500 per worker stating that they had suffered no injuries. The lawyer for the workers stated that he had not wanted to try the case but BP's lack of reasonableness in refusing to budge from its $500/worker offer forced him to trial.

Hopefully, the case sends a message to other corporate defendants who all too often refuse to acknowledge any responsibility for their actions. Punitive damages are a way offorcing a defendant to acknowledge its wrongdoing and to prevent future such conduct. Punitive damages act as a deterrent to future bad behavior similar to the behavior that caused the injuries. In addition, they often deter future bad behavior in the bad faith settlement of claims as obviously occurred here.

The BP verdict's legality and impact in New Mexico will be explored in a follow up article.

Collins & Collins, P.C.
Attorneys at Law

An Ohio jury awarded an 8 year old and his family the largest medical malpractice award in the state's history. The 8 year old child, Leondo Stanziano, suffers from cerebral palsy as result of the medical malpractice of the hospital where he was born. The jury awarded Leondo and his family $31 million in damages.

During his delivery in December 2000, Leondo was deprived of oxygen for 18 to 20 minutes. The oxygen deprivation caused serious birth injuries including permanent brain damage and cerebral palsy.

Cerebral palsy permanent disability involving movement control and muscle coordination disorders. In addition, it causes seizures, sensory impairments and severe cognitive limitations. It is typically the result of birth injury related brain damage. Leondo will never walk or talk and will require 24 hour care for the remainder of his life.

The lawsuit was filed on behalf of the family and Leondo against the hospital as well as the doctor for a broad range of damages for medical negligent. The suit alleged that the doctor and the hospital knew of the mother's high risk for uterine rupture but failed to properly monitor the delivery. In addition, the suit alleged the labor inducing drug Pitocin was negligently used causing hyper stimulation of the patient's uterus which ultimately did burst. Expert testimony established that the hospital's nursing was negligent in continuing Pitocin despite abnormal contraction patterns throughout labor and delivery causing enormous stress on the uterus and prior birth related incision scars.

The family's expert testified that Leondo's life expectancy would be 70 years. Based upon the 70 year life expectancy, the plaintiff's attorney asked for an award of $2.5 million in future lost earnings and $25.9 million in future health care costs. Remarkably, the defense countered saying Leondo would only live to be 20 due to his injuries suggesting to the jury that Leondo should be awarded only $7000/year for medical care over the remainder of his severely shortened 20 year life span.

Apparently, the jury was not pleased with the callousness of the defense's argument. Nor were they moved by its twisted logic that somehow Leondo should receive far less for his injuries since he would soon be dead anyway as a result of the hospital's negligence. The jury did not buy the hospital's argument that its liability should be reduced in essence because the hospital absurdly argued Leondo had suffered greater harm than claimed by the plaintiff.

Unfortunately, many times the defense will take this position attempting to reduce human loss to a simple calculation of future medical costs and lost earnings. These are calculated just as would be an annuity. Often, this logic will carry the day at trial. They then ironically try to argue for a greatly reduced life span to minimize these damages over the life of the injured person.

The jury in this case clearly looked past the simple mathematical formulas upon which the defense attempted to value Leondo's life, health and future. Clearly, the plaintiff's attorneys kept the focus on the human loss and out of the realm of mathematical annuities where the defense would prefer to keep the focus.

Related Reading:
Cerebral Palsy Birth Injuries: Devastating, Costly and Sometimes Avoidable!
New Techniques to Fight Cerebral Palsy in the Womb
Negligent Failure to Perform C-sections Resulting in Cerebral Palsy

Collins & Collins, P.C.
Attorneys at Law

GlaxoSmithKline has paid around $1 billion in Paxil settlements for litigation related to birth defects, suicides, and addiction as well as some non-medical related litigation. There remain 600 birth defect lawsuits pending so that the settlements are likely to grow much larger in the coming months and years.

Bloomberg News reports that Glaxo has spent almost $400 million in suicide related lawsuits, $200 million in addiction and birth defect litigation, and $400 for claims unrelated to antitrust, fraud and design.

Paxil was first approved in 1992 for the treatment of depression. It is among the most frequently prescribed drugs on the market with sales close to $1 billion in 2008. Unfortunately, the drug has many side effects including suicidal ideation, birth defects, and addiction. The drug maker failed to warn users and doctors of these known side effects.

The drug has been clearly linked to suicide. It is reported that there have been 300+ suicide attempts with an average settlement of $300,000. In addition, there have been around 150 wrongful death lawsuits related to suicide related deaths.

Paxil used during pregnancy has been linked to birth defects including persistent pulmonary hyper-tension in newborns along with other congenital heart defects. The average settlement costs for the birth defect cases has been in the range of $4 million. There remain around 600 birth defect related lawsuits outstanding.

Analysts have estimated potential liability of $1.5 billion in damages before it is all over. Glaxo has not disclosed the total numbers. However, the company has disclosed that it set aside $3.09 billion for legal and other non-tax disputes including litigation at year end 2008.

The numbers seem pretty large but pale in comparison to the $21 billion necessary to resolve 200,000 personal injury lawsuits against Pfizer for the diet drug fen-phen. However, the scope of the problems in the Paxil lawsuits is unique with a range of serious side-effects from birth defects to suicide. It is very unusual for one drug to present such a wide range of problems for its users.

It is important to the public that the settlement numbers be disclosed. First, it helps to alert the public to the problems with Paxil. More importantly, it alerts doctors and other medical providers of the risks of the drug. This puts a burden on doctors to both research the drug and to know their patients before routinely prescribing the drug as seems to have been the case in the past.

The sheer volume of the prescriptions of the drug suggests that perhaps some doctors have not given it the proper medical attention. The next wave of lawsuits will likely be against doctors for medical malpractice in the negligent prescription of the drug as they can no longer argue that they were unaware of the dangerous side effects.

Collins & Collins, P.C.
Attorneys at Law

In personal injury cases in New Mexico, the injured person has often received medical care through Medicare or Medicaid (hereinafter referred to collectively as Medicare). Medicare by law has a lien against any settlement for the full amount of the Medicare benefits. This lien is prior to all other obligations or other distributions verdict or settlement funds. Failure to properly address these liens can have serious financial consequences.

Medicare liens are enforced through the Centers for Medicare and Medicaid Services (CMS). Often times, CMS will contact you or your attorney to put you both on notice of the liens. However, even if neither you nor attorney has received notice, you are both responsible for those liens. Therefore, if you have received any Medicare related medical treatment for your injuries, you should alert your attorney at the very first meeting.

Proper handling of these liens requires early attention to the liens. Medicare must be notified immediately of any possible claims or lawsuits associated with the Medicare related treatment. It is not the responsibility of Medicare to notify the parties. Medicare must also be kept informed of any settlement negotiations. Medicare technically has the authority to block a settlement if the settlement does not reasonably address its liens. Finally once the claims are resolved either through settlement or litigation, the lien must be resolved. In fact, Medicare is has first priority over any distribution of any funds.

There are significant potential penalties for failure properly account for Medicare liens. The rules are very strict. The Medicare lien must be paid within 60 days of the final notice of lien. Failure to do so can result in severe penalties including double damages and interest on delinquent liens. Thus, it is important to keep Medicare involved in the settlement or litigation process. This means negotiating the liens with Medicare prior to final settlement or immediately following a verdict.

The good news is that Medicare is very reasonable in the negotiation and resolution of its liens. Often, the final resolution will reflect inadequate insurance policy limits to cover the client's injuries and damages. In addition, Medicare often has overstated liens reflecting Medicare benefits unrelated to the personal injury claim. Medicare will routinely reduce its liens for an overstatement of benefits once it is brought to their attention. Once you have negotiated the lien, you will be able to move forward with the distribution of verdict or settlement funds with peace of mind.

Related Reading:
Medicare Set-Aside Liens to Cover Future Personal Injury Related Medical Expenses
Medical Liens Can be Half the Battle in a New Mexico Personal Injury Case
Pitfalls and Ironies of Medicare Liens in Personal Injury Actions

Collins & Collins, P.C.
Attorneys at Law

The New Mexico Court of Appeals has made clear the requirements for a valid rejection of uninsured and underinsured insurance coverage. The Court ruled in Arias v. Phoenix Indemnity that to be valid, the insured must sign a written rejection of the coverage. This is not new. However, the Court went further to state the signed rejection of uninsured and underinsured coverage must also be attached to the auto insurance policy to be valid.

Arias v. Phoenix Indemnity involved circumstances where the insured had in fact signed the written rejection of uninsured and underinsured coverage. The rejection was signed during the application process. There was no dispute that the Plaintiff had signed the rejection. Moreover, there was no disputing the fact that the Plaintiff had received a copy of the signed rejection during the application process. In established that a copy of the signed rejection was given to the Plaintiff along with copy of the application for insurance. However, the signed rejection was not attached to the policy itself. The Court in Arias v. Phoenix Indemnity found this omission sufficient to invalidate the rejection.

This case points out the importance of uninsured and underinsured motorist coverage. The case emphasizes the hurdles an insurer must clear prior to waiver of this coverage. It also makes clear the value of this insurance in the very fact that the insurer must jump through so many hoops to avoid coverage and a fee thereon. Insurers are not known for dodging income. The fact that they often do so in the case of uninsured and underinsured coverage should suggest the value of the coverage to the insured.

In fact, uninsured/underinsured coverage is often the only protection a driver will have in an auto accident. New Mexico's has the highest rate of uninsured motorists in the country currently at 29% and climbing. Many more are grossly underinsured in inadequate insurance policy limits to cover a serious accident. In the end, an injured driver will often have no recourse to liability insurance and no recourse against the driver since you cannot get blood out of turnip as they say.

New Mexico has like many states a long-standing policy of goal of protecting the public against the harms of uninsured and underinsured motorists. The policy is set forth in the statutes, and has been set out repeatedly in case law setting ever increasing obstacles to the attempts of insurers to avoid this coverage beginning with Romero v. Dairyland where the Court stated flatly that the rejection of uninsured and underinsured coverage defeats this important public policy.

Arias v. Phoenix Indemnity is simply an expansion of the long standing public policies set forth in Romero v. Dairyland. The rejection uninsured/underinsured coverage is so important and potentially disastrous to the insured that the rejection must be made attached to the policy itself. The insured must be given every opportunity to avoid what may turn out to be a fairly costly mistake.

Related Reading:
Federal Court Forces Insurance Company to Provide Uninsured Motorist Benefits
Underinsured Motorist Coverage Imputed for Property Damage in Absence of Signed Rejection
Notice Requirements in New Mexico Uninsured/Underinsured Motorist Cases

Collins & Collins, P.C.
Attorneys at Law

Car accidents are a fact of life. They are far too common. Most people will be in a car accident at least once during their lives. Often times, it will be that person's negligence that caused the accident. The law requires that every driver carry liability insurance for these purposes. Most drivers in New Mexico will comply with the law. Most would do it voluntarily without the law to protect themselves against liability and suit in case of an auto accident.

Most drivers will take action to protect themselves against lawsuits. Unfortunately, they fail to protect themselves against a much greater harm which is far more likely to occur. The harm that a driver will suffer in an auto accident is far more likely to result from the physical injuries that result from the negligence of the other driver.

The costs of these injuries can be catastrophic. There is the physical injury itself which can force a person to miss work. Lost wages can financially cripple a person and his or her family. Most folks cannot afford to miss even one paycheck. Perhaps even more damaging are the medical expenses that result from the injuries. These can be astronomical. And then there is the risk of permanent injury, permanent wage loss, and all the physical and emotional pain and suffering that goes with them. And again, even greater medical expense.

So what is the problem? The problem is that New Mexico has the highest rate of uninsured drivers in the nation with 29% of its drivers uninsured. To make matters worse, New Mexico is a relatively poor state with a relatively poor population. The result is that a huge percentage of those drivers that do have insurance carry only the statutory minimum $25,000.00 in liability coverage because that is all they can afford. Medical alone can quickly exceed $25,000.00. In cases with serious injuries, the lost wages can far exceed this amount particularly if the injured person is required to quit working or change jobs due to the injuries.

In short, if you or a loved one get in a serious accident in New Mexico, it is more than likely that there will be insufficient insurance on the other side to compensate you for your injuries. This problem is easy and relatively inexpensive to address through underinsured motorist coverage. In fact, the coverage is such a good deal that the insurance companies by law must get a written signed waiver from a driver before the coverage can be waived.

Ask yourself why the law would require that an insured sign away coverage and why an insurance company would encourage the waiver of this coverage thereby forfeiting a fee? Clearly, underinsured coverage is a better deal for you than it is for the insurance company. In fact, it is about the only good deal you will ever get from an insurance company. So load up on underinsured coverage. It is almost reckless to drive in New Mexico without it.

Related Reading:
New Mexico Laws on Rejection of Uninsured/Underinsured Motorist Coverage are Retroactive
Don't Get Lured Into Waiver of Uninsured/Underinsured Motorist Coverage
Notice Requirements in New Mexico Uninsured/Underinsured Motorist Cases

Collins & Collins, P.C.
Attorneys at Law

New Mexico Uniform Jury Instruction 13-1810A allows for the recovery of damages by the plaintiff's children or spouse for loss of consortium which is defined as the "loss of the society, guidance, companionship and sexual relations resulting from the plaintiff's injuries."

The allowance of damages for the loss of sexual relations is most closely identified with a loss of consortium action. And it is this element that is most prone to invasive and embarrassing discovery by the defendant's attorneys.

The claim implies strong emotional bonds and active sexual relations between the plaintiff and his or her spouse. The defense attorneys will go to great lengths to tear down any suggestion by the plaintiff's spouse that any such emotional bonds or regular sexual activity was present in the relationship.

To do this, the defendant's attorneys will often hire private investigators to pry into every detail of the relationship or lack of relationship between the plaintiff and his or her spouse. They will try to find any indication of strain on the relationship to show that there was no true loss. As you might imagine, what they most hope to find is infidelity. They will try to find both present and past infidelity. The goal is to tear down the relationship and the credibility of the parties in the eyes of the jury.

Discovery, and especially depositions, on loss of consortium claims can be brutal, embarrassing and even humiliating. The scope of discovery is very broad allowing the defense attorney to ask almost any question no matter how invasive or seemingly irrelevant. Depositions questions need not be relevant to be asked. It is only necessary that the question could possibly lead to the discovery of other admissible evidence.

The broad scope of discovery opens up questioning about the plaintiff and his or her spouse's sexual histories. This includes questioning about every conceivable topic related to sex including sexually transmitted diseases, unplanned extramarital pregnancies, birth control practices, sexual activities and virtually every other issue concerning the pre-marital and extramarital sexual practices of the Plaintiff and his or her spouse. If that is not enough, the attorneys can ask some rather explicit questions about the current sexual activities inside the marital relationship.

The findings from discovery and depositions can be both embarrassing and extremely harmful to the loss of consortium claims. In addition, juries can be pretty unforgiving, somewhat puritan and often hypocritical so that the evidence raised on the loss of consortium claims harms the primary personal injury claims made by the plaintiff.

Before pursuing loss of consortium claims, every plaintiff must honestly assess his or her situation. What will the defense find? How will a jury view that evidence? How would the most sexually conservative, self-righteous, moralistic, judgmental person in a sexually conservative, self-righteous, moralistic, and judgmental community view the evidence? That person is quite likely on the jury and he or she is absolutely unforgiving of the plaintiff's transgressions.

Related Reading:
Sibling Loss of Consortium Cases in New Mexico
Discovery in a Personal Injury Lawsuit: Often Difficult and Expensive but Always Necessary!
Loss of Consortium Claims in New Mexico

Collins & Collins, P.C.
Attorneys at Law