New Mexico Injury Attorney Blog

The 10th Circuit Court of Appeals addressed the scope of agency and respondeat superior under New Mexico law in Frederick v. Swift Transportation. The case addressed these issues in the context of a trucking accident involving a truck driver who had ingested methamphetamine.

At trial, the jury awarded the plaintiff $23,500,000. The court reduced the judgment to $15,275,000 based upon the plaintiff's comparative negligence in the accident. Swift Transportation appealed on several grounds including the court's ruling that the driver acted within the course and scope of employment as a matter of law. Based upon this ruling, the court issued a jury instruction that Swift was liable for the negligence of its driver.

Swift argued that the driver was outside the course and scope of employment due to the driver's consumption of methamphetamine. In part, Swift argued that it was a disputed fact whether the meth was ingested prior to or after the accident.

The 10th Circuit relied on New Mexico law citing Ovecka v. Burlington Northern as follows, "whether an employee was acting within the scope of his employment is [generally] a question of fact for the jury." However, the court cited Ovecka further, "when no facts are in dispute and the undisputed facts lend themselves to only one conclusion, the issue may properly be decided as a matter of law."

The Court cited New Mexico's uniform jury instructions which state that an employee is acting within the scope of employment when:

1. It was something fairly and naturally incidental to the employer's business assigned to the employee, and
2. It was done while the employee was engaged in the employer's business with the view of furthering the employer's interest and did not arise entirely from some external, independent and personal motive on the part of the employee.

The Court found that it was undisputed that the driver was acting within the course and scope of employment as set forth under New Mexico law. The Court ruled further that the ingestion of meth did not remove the driver from the course and scope of employment no matter when the meth was ingested. The Court was careful to state that the ingestion of drugs might remove an employee from the course and scope of employment depending on the circumstances. However, in this case, the driver was clearly pursuing the interests of the employer and the use of meth did not meet the exception.

Interestingly, the Court did not mention the widespread use of meth among truck drivers due to the demands of the job. However, it is certainly something to keep in mind for those injured in a trucking accident since it is clear from Frederick v. Swift that the employer is held responsible for this on the job drug usage which in turn may be factored into an award of punitive damages.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

Reports in the press show that BP immediately began preparing for litigation following the spill. The company did this as it touted its intention to take full responsibility for the spill. It seems its partners in the Deepwater Horizon well did the same. Unlike BP who downplayed the disaster in the early weeks in efforts to get waivers and settlements on the cheap, its partners have gone the other direction alleging "gross negligence" on the part of BP in the disaster.

Of course, BP's partners, Anadarko Petroleum Corp. and Mitsui Oil Exploration Company of Japan, share BP's motivations. They are attempting to evade their shared responsibility for the disaster as partners in the well. According to the New York Times, BP has made a demand of $272 million on Anadarko for its 25 percent share, and $111 million form Mitsui for its 10 percent share. These demands will clearly go much higher in the coming months and years as the damages and legal claims continue to mount.

The public position taken by Anadarko in claiming gross negligence in order to escape its contractual responsibility is remarkable for a number of reasons. The same is true of Mitsui who has reserved judgment in assessing its contractual responsibilities. First, in its early preparation for litigation, BP apparently snatched up many industry experts. This effectively conflicted many of the experts out of representing plaintiffs. BP will be unable to take the same tact with its own partners since it will be the partners' experts that assess BP's level of negligence. Second, and related to the first, it may be BP's own experts that provide much of the groundwork for the thousands of civil lawsuits that are already in the works, and the many more that are sure to come against BP.

Predictably, BP will fight any claims of gross negligence by both its partners and the many plaintiffs in the civil lawsuits. It is also predictable that Anadarko will reverse position on the issue of gross negligence to avoid punitive damages in the civil lawsuits. It is equally predictable that the Tort Reformers, the right and the oil industry will continue to push for caps on liability both for this disaster and others to come in the future.

Much like Transocean who has pushed for $25 million caps in liability while recovering hundreds of millions of dollars in insurance for the destruction of its rig, BP, Anadarko and Mitsui will waste no time in making claims against one another for their business losses while one and all will join in the refrain to prevent full and fair recovery by the true victims of the BP disaster, the people and businesses along the Gulf Coast. It really its a race to bottom of business, social and community morality.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

Punitive damages are awarded in limited cases for the purposes of punishment of the defendant. Punitive damages also serve to deter similar such behavior by the defendant and others similarly situated. In New Mexico personal injury cases, punitive damages are awarded only when a defendant's behavior is found to be malicious, willful, reckless or wanton.

Many New Mexico personal injury claims assert a claim for punitive damages but the "malicious, willful, reckless or wanton" standard is pretty difficult to meet. In essence, the defendant's behavior must be pretty outrageous in nature to justify a punitive damages jury instruction from the court.

In auto accident cases, the question then arises whether insurance will cover the punitive damages awards. This question actually involves two separate elements. First, will the negligent driver's auto insurance liability limits cover a punitive damage award? Second, assuming that the negligent driver's insurance is inadequate to cover the total damages award, will the innocent driver's uninsured/underinsured motorist coverage cover any part of the punitive damages award? These same issues would arise in a pre-trial or pre-litigation settlement. On the other hand, it is a rare and generous insurance company on either side of the claim that would admit the propriety of punitive damages prior to litigation.

The answer to both questions is yes. Insurance coverage, both liability and uninsured/underinsured motorist coverage, provides coverage for punitive damage awards in a New Mexico auto accidents. The innocent injured driver is entitled to recover for all allowable damages under the New Mexico personal injury law.

The issue will generally not arise in the case of liability coverage since liability coverage in New Mexico auto accidents is generally grossly inadequate. New Mexico carries the highest percentage of uninsured drivers in the nation with many more severely underinsured. Thus, the liability coverage limits will typically not even cover the compensatory damages, much less the punitive damages.

Instead, the issue will more often arise when the innocent driver makes a claim on his or her uninsured/underinsured motorist policy. Some insurance companies will attempt to deny these legal claims. However, the law is clear and has been clear for quite some time since the 1991 New Mexico Supreme Court case of Stinbrink v. Farmers Insurance Company of America. The Court in Stinbrink made clear that uninsured/underinsured coverage does provide coverage for punitive damages.

Even here, however, policy limits often become an issue. New Mexico drivers typically carry inadequate liability limits to cover the harm that they do. Likewise, they generally carry woefully inadequate uninsured/underinsured coverage as well. As such, the findings in Stinbrink are purely academic in most cases as the insurance policy limits will always dictate the coverage in any particular auto accident case.

Insurance issues are confusing. The policies themselves typically provide very little illumination and may leave some even more confused after reading. Thus, it is important to consult with a New Mexico attorney to address the many coverage issues related to a New Mexico personal injury claim.

Alysan Boothe Collins
Albuquerque Lawyer
www.CollinsAttorneys.com

President Obama has announced sweeping mine safety initiatives in response to the recent West Virginia mining disaster in which 29 miners were killed. This is all well and good, but will it have any effect on the profit-driven corporations that run these mines? Sadly, the answer is probably no.

Massey Energy, the company that runs the Upper Big Branch mine where the recent tragedy occurred, was issued 515 citations in 2009 for that mine alone. There were already 124 citations against Massey Energy for Upper Big Branch mine in 2010. Over the last 5 years, Massey has been fined over $7 million for safety violations. Of course, they fight these tooth and nail and have paid only $2.3 million. Massey Energy, and other like-minded mining operators, seem to take the approach that they will fight every nickel of fines, dragging these cases out for years. All the while, they continue to rack up safety violations jeopardizing the lives of their workers.

Let's say for argument that Massey was forced to pay the full $7 million in fines. Would that change their safety practices? Take a look at the numbers and judge for yourself. Massey Energy reportedly had 2009 revenue of $583.9 million, down from previous year's revenue of $661.28 million. It is also reported that Massey Energy CEO Don Blankenship made somewhere in the vicinity of $19 million in 2008. It doesn't take a math genius to recognize that these paltry fines are not going to alter the profit driven decisions of Massey Energy or any other corporate actor.

What is a miner's life worth? Is a mine worker's life worth the investment in safety necessary to prevent the avoidable tragedies that occur far too often in mines? How about 29 workers? Apparently, the answer is no. This is quite obvious when one looks at the safety record of Massey Energy. The profit equation must be altered.

What's the answer? President Obama is certainly on the right track but there needs to be more. These companies must pay the price for reckless safety practices that jeopardize their workers. I am confident they will, but not through the fines envisioned by the new wave of safety inspections. These paltry fines have had and will have no affect companies like Massey Energy that place profitability before the safety of their workers.

Instead, the real price will come from the personal injury lawsuits sure to come in the next several months. And when they do, the Tort Reformers will cry foul that the greedy trial lawyers are simply taking advantage of a tragic situation. They will make these arguments knowing full well that these lawsuits carrying significant compensatory and punitive damage awards will provide the only real incentive for corporate change. Changing the profit equation to include possible massive damage awards is the only thing that will get their attention. And it is the only way to avoid future tragedies like the Upper Big Branch mine disaster.

www.CollinsAttorneys.com

Texting and driving do not mix. Governor Richardson of New Mexico has been pushing for a statewide ban on the use of cell phones while driving both for talking and sending texts. Several cities in New Mexico, including Albuquerque, Santa Fe, and Las Cruces, have already banned the use of mobile phones while driving. These laws have not been real popular with many.

How dangerous is texting and driving? A Car & Driver Magazine study found that texting and driving was more dangerous than drinking and driving. The study found that texting drivers were 3 to 4 times slower to hit their breaks than drunk drivers. Car & Driver is not exactly known for scientific rigor but one need not look far to find some support for their findings. Though their claims may be slightly exaggerated, the numbers clearly support their general finding that texting is indeed extremely dangerous.

The National Highway Safety Administration (NHTSA) has found that texting is among the most serious and dangerous distractions facing drivers. NHTSA studies have found that close to 6,000 people were killed and more than 500,000 were injured in 2008 as a result of the negligence of a distracted or inattentive driver. Many of these were related to texting and/or mobile phone usage. By comparison, MADD found that 11,773 deaths were caused by DWI/DUI in 2008. Perhaps Car & Driver overstated the dangers of texting in comparison to DWI/DUI, the numbers clearly illustrate their point that texting and driving do not go together.

Sadly, the facts on the roads more forcefully illustrate the dangers of texting and driving. Last month, in the case of Small v. Vestal, a Texas jury awarded $21.7 million in damages, $20 million in exemplary/punitive damages, in a personal injury lawsuit to the family of a 21 year old college student killed in an auto accident. Tragically, the accident was caused by another college student who was found to have sent and received several text and phone calls around the time of accident. Two young and promising lives were destroyed. More tragic still, many people just cannot resist the urge to text and countless lives will be lost in the future as a result of texting and driving.

This is just one in a series of huge jury verdicts for texting and driving. These verdicts reflect the fact that juries recognize the dangers of texting and driving as significant and dangerous distraction to drivers. It seems almost too obvious to even argue that drivers should not be driven to distraction. In light of the dangers of texting, just imagine the dangers of putting the internet in the driver's hands. This is already possible with mobile phone technology. But can we make it worse.? Of course we can, and apparently we will. Auto makers want to put the internet on the dashboard of new cars.

Then who is responsible? The teenager who cannot resist the lures of the internet on the dash? Or the automakers reckless enough to go down this road? Much like the mantra of the Right, "Guns Don't Kill People, People Do", the mantra of Tort Reform is that "Reckless Products Don't Kill..." So we know the answer.

www.CollinsAttorneys.com

Medicaid liens can cause significant financial complications following settlement of a personal injury lawsuit. There are significant penalties for failure to properly account for those liens out of settlement funds. It is important that the Medicaid liens be addressed and satisfied with both New Mexico Human Services Department (HSD) and Center for Medicare and Medicaid Services (CMS) prior to distribution of personal injury settlement funds. It is equally important to the injured person that Medicaid not be overcompensated for their liens.

Medicaid through HSD and CMS is quite serious about collecting on its liens. In fact, Medicaid will on occasion assert liens beyond what it is legally mandated. This overstatement of its lien is typically the result of some confusion in the law regarding Medicaid reimbursement. This confusion over the Medicaid's rights to reimbursement can be quite costly if not addressed properly.

In most cases, Medicaid is very reasonable in addressing liens so long as the liens are addressed in a timely manner prior to settlement of personal injury claims. However, as a result of misinterpretations of the law, HSD in particular has been known to demand full recovery of all medical expenses advanced by Medicaid. In fact, Medicaid is not necessarily entitled to the full reimbursement of all Medicaid advanced medical expenses. This is particularly true in cases involving serious personal injuries.

Medicaid is entitled only to the recovery of liens associated with medical expenses. In a personal injury lawsuit, particularly in cases with serious injuries, the settlement or award typically includes a wide range of damages including lost wages, loss of consortium, loss of household services, permanent injury and disfigurement, pain and suffering and punitive damages. These are entirely distinct from the damages awarded for medical expenses.

Medicaid is not allowed to recover for any non-medical related damages. The reason for this is simple. As set forth in the 2006 United States Supreme Court case of Arkansas Department of Health and Human Services v. Ahlhorn, Medicaid may not "share in damages for which it has provided no compensation..." Medicaid provides no relief or support for damages other than medical expenses and therefore will not reap the benefit of any award for these other non-medical related damages.

It is not uncommon that the settlement or award does not specifically break down the allocation between medical damages and other non-medical damages. In case of a dispute over the breakdown, the parties can call on the court for a determination of the allocation between medical and non-medical damages. The Court will then apportion the damages between medical and non-medical damages based upon the injuries in the case. Medicaid will then reimbursed based upon the Court's apportionment of damages.

Medicaid issues are very complicated and it is important to seek the advice of an attorney prior to accepting any settlement. All liens, including Medicaid liens, should be negotiated prior to final settlement. Failure to negotiate liens in advance may have severe financial consequences for the injured person. This is particularly so in case of Medicaid liens for which failure to pay may result in significant fines and penalties.

www.CollinsAttorneys.com

It was reported this week in the New York Times that New York City has agreed to a class action settlement in the amount of $33 million for individuals subjected to illegal strip searches following misdemeanor arrests. The strip searches lled to a Section 1983 suit for the plain violation of the 4th Amendment prohibitions against unlawful search and seizure.

Interestingly, it was reported that this is the 3rd such settlement in the last 10 years that the City has settled cases for illegal strip searches. The first such settlement came in 2001 for $40 million. The second came in 2005 for several million. Now once again, the City has settled for $33 million for essentially the same pattern of conduct.

In the first wave of cases, the illegal searches were conducted prior to intake at the department of corrections. The practice was found to be unconstitutional under the 4th Amendment in Shain v. Ellison and formed the basis of the original settlements. In response, the City's department of corrections apparently determined that the unlawful searches would become lawful in the event that they were conducted following intake and admission into the correctional facilities. Another 100,000 people were, even after the first two rounds of settlements, subjected to the same unlawful strip searches.

The $33 million settlement seems like a very large settlement and it is in total. However, each individual subjected to the illegal searches will receive on average only $2000.00 for having been subjected to the humiliation of strip searches which included cavity searches of both men and women, including menstruating women, despite the lack of any reasonable suspicion that the detainees carried unlawful weapons, drugs or other illegal contraband on their bodies. How much would you accept to be stripped nude and subjected to cavity searches for a minor infraction of the law?

In light of the financial and budgetary crises facing New York City, why might it have agreed to such a large settlement? Clearly, the compensatory damages alone for the 100,000 individuals subjected to the barbaric, inhumane and unconstitutional strip searches could have easily exceeded $33 million at trial. In addition, the City was facing possible punitive damages for the clear lack of effect the prior lawsuits had on the City's behavior. Punitive damages are intended to both punish and deter. In fact, the most valuable role that punitive damages serve for society is to deter future illegal, dangerous or reckless practices of both the defendant and others. It is hard to imagine a better case for punitive damages than here where the City, despite two prior class action lawsuits and settlements, had failed to change its policies regarding strip searches.

The lawsuit and the settlement is likely to cause a flood of ranting from the tort reform movement. When you hear these, keep in mind that those subject to the illegal searches had been charged with a vast array of misdemeanors including child support violations, petty shoplifting, jumping a subway turnstile, petty marijuana possession, and trespassing to name a few. Of course, tort reformers will find a way to justify the illegal search and seizures, or in the alternative, try to argue that such suits serve no useful purpose other than enriching trial attorneys while depleting the public coffers of the good folks in the department of corrections who saw fit to engage in these practices.

Ask yourself in response to their arguments, which society you wish to live in, theirs or one that respects the United States Constitution, and the rights of individuals including those of your children, family and friends that in the tort reform world would most certainly fall prey to abusive practices of government, corporations, insurance companies, manufacturers or others who regularly fail to appreciate the rights, safety and welfare of the public they serve.

www.CollinsAttorneys.com

When you Google MRI Risk, MRI Dangers, and so on, the results for the most part indicate that there are no risks. Yet despite the apparent absence of risks of an MRI, a 6 year old boy was killed during an MRI procedure. How could this happen in a presumably risk free procedure? Gross medical negligence?

The child, Michael Colombini, was killed in an MRI chamber when an oxygen tank, drawn by the MRI's 10 ton electromagnet, flew into the chamber striking the child in the head. A staffer at the Westchester Medical Center left the oxygen tank in the MRI room despite the universal ban of such metal objects from MRI rooms.

The case settled for $2.9 million while the case was pending in New York state court. The hospital accepted liability within days of the tragic incident. However, the hospital's offer of $1 million to settle quietly was refused by the child's family. The child's family subsequently filed a wrongful death action against the hospital and nine other defendants, including the supervising doctors, technicians, the MRI administration company, the MRI manufacturer and a nurse. The suit included medical malpractice, products liability, and wrongful death claims. The suit demanded compensatory damages, damages for pain and suffering, emotional distress to the father who was present during the accident and punitive damages.

After 9 years of litigation, the medical malpractice and wrongful death suit was settled for $2.9 million on the eve of trial. The settlement surprised many in the New York legal community for a couple of reasons. Unlike New Mexico, New York prohibits recovery for the parents' loss of love and affection of their child (loss of consortium in New Mexico). Instead, recovery in New York wrongful death cases typically is entirely dependent upon economic losses or lost wages. As such, a child's life in New York has very little value in the courts since a child has unproven income potential. Certainly, tort reformers can come up with a strong argument for such an atrocious and callous valuation of a child's life.

What would cause the hospital in this case to settle for $2.9 million under such defense favorable circumstances? Though the New York appellate courts will often greatly reduce punitive damage awards, potential punitive damages in this case may have swayed the hospital. In addition, there was the possibility of a large emotional distress award for the father who was at the scene when his child was killed. Finally, the attorneys for the family, Matthew Gaier and Tom Moore, were relentless in the pursuit of justice in this case.

No parent could ever place a value on their child's life. The court's in New York place little value on a child's life. Moreover, the New York appellate courts apparently do not lend the same deference to a jury's award of punitive damages as the Courts of New Mexico.

Fortunately, there are trial lawyers like Matthew Gaier and Tom Moore that will step up and fight for families who have lost children. Thankfully for patients and families in New Mexico, the Appellate Courts here protect the individual against corporate interests earning them the designation of "judicial hellhole" by tort reformers.

Who could argue that the hospital and the staffer were not grossly negligent? There was clearly a lack of procedure and oversight to protect against such gross incompetence. There was likely also insufficient training and supervision of the staffer. How could a metal oxygen tank be placed in a room with a 10 ton electromagnet in the absence of gross negligence at each and every level of the MRI facility? It couldn't. Yet tort reformers will continue to press for medical malpractice limits even in the face of rampant medical negligence in hospitals across the country that leads to incidents such as these placing each of us, and our children at risk every time we must visit a hospital. And without punitive damages, there is no real deterrent to this kind of behavior.

www.CollinsAttorneys.com

Punitive damages are a hot topic both for businesses and for individuals harmed by the conduct of businesses. Punitive damages are just that, "punitive". They are awarded above and beyond compensatory damages to punish outrageous and dangerous corporate behavior. More importantly, they serve the purpose of deterring future bad behavior. Punitive damage are relatively rare awarded only in cases of extreme behavior. They come into play only when the safety of the public is at stake.

In light of the rarity of punitive damages awards and the purpose that they serve which is to protect the public from reckless and irresponsible corporate behavior, the bill moving through South Carolina is pretty remarkable. The South Carolina House approved, by a vote of 104-9, a tort reform measure which would limit punitive damages across the board to $350,000.

The rationale for the bills is faulty on several grounds. The primary argument is that it is an economic development tool made necessary because nearby states, including Florida, Georgia and North Carolina, have passed similar measures. It is argued that businesses will not locate in South Carolina without the $350,000 cap. The implicit suggestion is that punitive damages are out of control in the State.

The reality could not be further from the truth. The South Carolina Trial Lawyers Association found 136 personal injury verdicts in South Carolina's 3 largest counties in all of 2007 and 2008. Of these, only seven included punitive damges, and only 2 of the 7 included punitive damages greater than $7000. This reinforces the fact that punitive damage awards are both rare and stingy. If a company has engaged in such outrageous behavior to incur punitive damages at these odds, is this the kind of business that South Carolina or any other state would want to attract?

Secondly, it is argued after all, "Isn't $350,000 really enough to deter bad behavior?" Ask Toyota this question. Apparently, Toyota saved $100 million by limiting the recall on its vehicles leaving millions of defective vehicles on the roads. In the meantime, uncontrolled and sudden acceleration of Toyota and Lexus vehicles led to 2000 accidents and over 30 deaths.

Arguments for caps on punitive damages, like tort reform arguments generally, ignore the fact that there are companies that behave very poorly, motivated only by profit with little or no consideration for the safety of the public. The deterrent effect of punitive damages lies in the possibility of financial hardship for those that ignore the public's safety. Punitive damages are typically calculated as a measure of corporate income. The jury is left, within reason, to determine what amount of a company's annual income would serve to properly punish the reckless corporation while also deterring other like-minded companies in the future. The amount must be significant to serve a deterrent purpose.

Many companies spend significantly more on their corporate retreats $350,000. Is this amount really enough to deter reckless profit only driven corporate behavior to take away a golf outing? South Carolina is known for its golf. Perhaps, now we are have arrived at the real root of the argument.

www.CollinsAttorneys.com

The Albuquerque Journal reports that Toyota officials bragged about the $100 million it saved by negotiating with the government for a limited recall related to the problem with sudden acceleration of its vehicles. It is reported that internal corporate memorandum noted the limited recall of floor mats among "Wins for Toyota - Safety Group." The limited recall was in lieu of the broader recall associated with product and design defects with accelerator pedals and brakes.

The New York times further reported that Leading Democrats on the House Energy and Commerce Committee alleged that Toyota had relied on flawed studies in dismissing the possibility that computer issues were possibly the cause of sticking accelerator pedals on millions of cars. It then issued misleading statements to Toyota owners minimizing the problem.

It is estimated that there have been over 2000 incidents and over 30 deaths involving uncontrolled and sudden acceleration of Toyota and Lexus vehicles. One of the more notable incidents occurred in August 2009 causing the death of a California police officer and three of his family members. This incident led to much of the impetus behind the investigation of the defective vehicles.

Toyota's irresponsible, callous and dangerous indifference to the safety of its consumers points to the flaws in the Tort Reform movement. Tort Reformers cast trial attorneys as a plague on society. In reality, trial attorneys as Toyota will soon find, act as a check on corporate greed. Without product liability law developed compliments of trial attorneys over the past 50 years, corporations would use the same ruthless economic calculus that appears to be at work in the consumer safety decisions of Toyota. Unfortunately, the reality is that purely financial analysis of consumer safety rarely benefits consumers.

In fact, viewing the calculation, 19 deaths might have appeared acceptable from Toyota's math. What is the value of 30 lives? Toyota clearly thought it was less than $100 million. How many lives are worth $100,000 million in savings?

Compensatory damages alone should top the $100 million in savings. But the real problem for Toyota is punitive damages. Punitive damages provide the real deterrent to irresponsible corporate greed that, as in this case, can lead to defective products in the marketplace. Punitive damages are meant to deter future bad behavior both for the defendant and others prone to engage in similar behavior. Punitive damages are a function of bad behavior and corporate income. Punitive damages, where morality fails, dictate that the safety of consumers enter the profit equation. Perhaps Toyota failed to anticipate that its decision-making processes would become public, but it is these processes that justify punitive damages.

Fortunately for New Mexico consumers, New Mexico courts and judges are prone to protect consumers and the general public. In fact, New Mexico has been designated a "judicial hellhole" for corporate defendants, something for which its citizens should be thankful. Though these cases will land in federal court, the federal court will apply New Mexico law on punitive damages. New Mexico's law on punitive damages does not look favorably on corporate behavior that puts the safety and lives of New Mexico consumers at risk.

Assuming the reports of the Albuquerque Journal and New York times are accurate, if there was ever behavior suggesting punitive damages, Toyota's weighing of costs and benefits of fixing known defects in its vehicles demands them.

www.CollinsAttorneys.com

Hidden cameras are playing an important role in the investigation of nursing home abuse and neglect cases. Hidden cameras placed by the family of one abused residence revealed severe abuse of a nursing home stroke resident. The Attorney General in New York has implemented a program of hidden cameras in nursing homes for the detection of abuse and neglect in an expansive effort aimed at the protection of nursing home residents.

In Arrellano v. Fillmore Convalescent Center, the family of Maria Arellano placed hidden cameras in her room after the management of the facility refused to investigate abuse and neglect reported by the family for more than a year prior to placing the hidden cameras. The family had noticed bruising on Ms. Arellano's face, arms and legs which could not be explained since Ms. Arellano was bed-ridden. The facility ignored the family and refused to investigate the claims. The family was forced to insert the hidden cameras in the room for the protection of Ms. Arellano. The camera captured very disturbing behavior on the part of a nursing home employee, Monica Garcia, showing her pulling Ms. Arellano by the hair, slapping her, dragging her, and violently bending her wrists, fingers, and neck.

The abuse was so severe that Ms. Garcia was charged criminally and eventually pled to criminal battery. It is unfortunate that hidden cameras were necessary for the protection of Ms. Arrellano yet this was the only way to properly investigate the abuse since the nursing home facility, Fillmore Convalescent, refused to take any action on its own. In the end, a California jury awarded a total of $7.75 million to Ms. Arellano. Of the $7.75 million award, $5 million was awarded for punitive damages while $2.75 million was awarded for compensatory damages.

The use of hidden cameras is a powerful tool for those who have the wherewithal to use this tool to protect against nursing home abuse and neglect. The New York Attorney General has begun using hidden cameras for the investigation and prosecution of abusive nursing home employees. The Attorney General has used hidden cameras for the arrest and prosecution for both abuse of residents as well as what appears to the problematic practice of falsifying records in efforts to cover up abuse and neglect. Attorney General Cuomo stated that the practice was part of ongoing efforts to investigate and prosecute individuals who "shamelessly mistreat Long Island's most vulnerable patients."

It is unfortunate that hidden cameras are necessary for the protection of nursing home residents. These residents are often completely helpless to defend themselves. As in the Arellano case, they are often unable to even report the abuse due to their condition. The resident, the family, and society place their trust in these facilities to protect society's most vulnerable members. The breach of this trust is unacceptable. Abuse and neglect of nursing home residents is a moral outrage. It is should not be tolerated by a resident, a family or society. Attorney General Cuomo's program is a welcome development on the law enforcement front to insure that this misconduct does not go unpunished.

Sadly, though most of these facilities do perform competently and professionally, there remain those that simply have not gotten the message. There are far too many that continue to prey on the weakness of their helpless patients even when the families report abuse and neglect to management. The refusal to implement protections is generally economically driven. Damage awards as in the Arellano case serve to change the economic calculation. Where morality and basic human decency is not enough to change behavior, money often is. Punitive damages serve this important deterrent function.

www.CollinsAttorneys.com

Following a $16 million verdict, Ford Motor Company settles with a woman left paralyzed in an auto accident. The settlement came as the jury considered additional punitive damages against the manufacturer for design defects in the rear seat latch on its Explorer model.

The $16 million verdict came despite the fact that the cause of the accident was the driver of another vehicle that struck the Ford Explorer in which Lynn Wheeler was a passenger in the back seat. Ms. Wheeler was sitting in the center of the back seat between her two grandchildren as the family was en route to church on Christmas Day in 2005. Upon collision with the other vehicle, the rear seat latch failed folding on Ms. Wheeler and slamming her forward into the front console.

Ms. Wheeler suffered spinal cord damage and permanent paralysis from the neck down. The Georgia jury awarded a total of $17.7 million in damages. The jury found apportioned the liability and fault between the driver of the other vehicle that caused the accident holding him liable for $1.2 million for his negligence and Ford liable for the remainder on the products liability claim.

The jury was considering additional punitive damages against Ford at the time of the settlement. The punitive damages could have enormous. Punitive damages typically are based in part on the revenue of the defendant. Punitive damages function to deter future conduct. In this case, it appears based upon the evidence presented by the plaintiff's attorney, that Ford had known about the dangers of the lap only seatbelts for more than 30 years based upon extensive crash testing and research. The knowledge was well documented in Ford's own safety documentation and internal memos.

Despite the obvious dangers presented by the defective design, Ford failed to correct the problem continuing to install the lap belts rather than the safer shoulder belts. As a result of Ford's knowledge of the dangers of its defective design and its deliberate failure to correct the problem, it is likely that the jury would have awarded significant punitive damages. Due to the settlement, Ford will avoid a possibly enormous punitive damages award.

Product liability cases such as these are extremely important for the public safety. Consumers trust their safety and the safety of their families to manufacturers such as Ford. Without product liability suits such as this one, manufacturers would have little incentive to design and manufacture safer products. Indeed, as in this case, the motivation flows in the exact opposite direction as manufacturers would ignore their own safety research and findings in an effort to keep production costs down. It is important that the costs savings associated with cutting costs be weighed heavily against the costs of these suits in the event of their deliberate indifference to the safety of their consumers. Unfortunately, profit alone drives manufacturers such as Ford and the threat of lawsuits if nothing else will hopefully drive them toward more responsible design decisions.

www.CollinsAttorneys.com

It seems that juries across the country are equally appalled by nursing home abuse and neglect as they are in Albuquerque. An Albuquerque jury recently dinged ResCare, Inc. and ResCare New Mexico for $54 million for nursing home neglect and abuse. Notably, the punitive damages awarded against ResCare approached $50 million.

The ResCare case involved the rape of a severely disabled man by a staff member. The recent case out of Brooklyn involved severe neglect that led to extremely serious bedsores all over the injured patient's body. In addition, after only 9 months in the facility, John Danzy's weight had dropped right at 90 pounds to 147 pounds. Despite transfer to another facility, Mr. Danzy later died as a result of the infections.

It took the jury 2 days of deliberation to reach a verdict of $19 million in total damages against the facility in favor of Mr. Danzy's estate. Much like the ResCare verdict, the bulk of the damages were punitive in nature. The jury awarded $15 million in punitive damages for the facility's cover up of its neglect. The plaintiff was able to establish through expert testimony that the facility had gone back and doctored the file in an attempt to cover up the onset, duration, and aggravation of the bed sores as a result of ongoing medical neglect.

The plaintiff's attorneys believed as did the jury that the nursing home had gone back and altered the records once it was apparent they were facing a lawsuit. The jury sent a message to the nursing home industry, and the medical profession as a whole, that attempted evasion of responsibility for medical or nursing home neglect will not be tolerated. This same message was sent in the ResCare case where the defendant denied responsibility to the bitter end. The case of Mr. Danzy was even more appalling where not only was responsibility denied, the facility actively concealed its medical neglect through the alteration of medical records.

It is interesting that the New Mexico verdict was almost 4 times the New York verdict. It is a good sign for New Mexico nursing home plaintiffs with serious claims of nursing home abuse and neglect. This is particularly so in light of New Mexico's appellate courts reluctance to overturn punitive damage awards, as illustrated in Jolley v. Energen. The court there stated that the punitive damages award would not be overturned unless it was so unrelated to the plaintiff's injuries as to "plainly suggest passion and prejudice over reason and justice." This gives the plaintiff a lot of bargaining room when it comes time for negotiating the settlement during the inevitable appeals that follow such awards in New Mexico.

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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.

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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.

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