Texas Trucking Defense and Litigation

We have moved our Texas Trucking Defense blog ...

The new address is:

Castagna Scott LLP — Insurance Defense and Trucking Blog

Make sure you bookmark the address, to obtain updated information regarding defense of trucking lawsuits throughout the State of Texas.  We'll also cover the following subjects:

• Trucking and transportation accidents
• Dram shop and liquor liability
• Products liability
• Construction defects
• Construction accidents
• HOA litigation
• Automobile accidents
• Premises liability
• Ladder design and defects
• Racetrack accidents and litigation
• Fitness center and gym litigation
• Bicycle accidents
• Motorcycle accidetns
• Swimming pool safety and defects
• Fabric flammability litigation
• Oilfield negligence
• Employment matters
• Professional malpractice
• Bad faith litigation
• General liability

 

After medical malpractice caps, more doctors moving to Texas

This is not directly related to trucking, but it is important generally to trucking litigation as an indication of the effects of tort reform in Texas. The New York Times today reports that more doctors are moving to Texas after the adoption of medical malpractice caps a couple of years ago:

Four years after Texas voters approved a constitutional amendment limiting awards in medical malpractice lawsuits, doctors are responding as supporters predicted, arriving from all parts of the country to swell the ranks of specialists at Texas hospitals and bring professional health care to some long-underserved rural areas.

The influx, raising the state’s abysmally low ranking in physicians per capita, has flooded the medical board’s offices in Austin with applications for licenses, close to 2,500 at last count.

...

“Doctors are coming to Texas because they sense a friendlier malpractice climate,” he said.

More on obscene salaries of newly licensed lawyers

Susan Hackett, of the Association of Corporate Counsels, calls foul on the obscene starting salaries of recent law graduates.  In an article on law.com, she estimates the true cost of brand new attorneys to be about $400,000 per year.  She points out that when you raise the salaries of brand new associates, you also have the raise the salaries of the more-experienced associates as well.  Who pays for it?  The client, of course.

Ms. Hackett goes on to excoriate the outrageous money made by lawyers in the “law firm biz”, and to suggest that corporate counsel put a stop to it:

Is this out of touch with reality? You bet. I'm completely unpersuaded by apologists who suggest that entry-level associate salaries are hardly keeping up with partners' slice of take-home pay. The fact that the associates make less per year compared to their partners than associates 20 years ago did is yet another indicator of how obscene partners' fees and profits are in the law firm biz. Sure, outside counsel are entitled to make as much money as they can, but let's not "justify" these salary increases by suggesting that they're necessary to adequately compensate associates.

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So where will in-house counsel draw the line on new associate costs? Why don't corporate clients simply say: We're not paying for this anymore? In-house legal executives need to stand up and exercise their considerable influence. Demand to know -- in detail -- why prestigious firms believe their inexperienced associates provide more value than a successful partner in a less expensive firm or an expert legal service vendor/consultant. Tell them that you're happy to pay high rates for high quality and experience, but you'll be the judge of the value provided. And if they answer that they had no choice but to follow the market in order to attract the same 50 graduates from the same 25 top-ten schools, then label them the sheep that they are, and vote with your feet.

Texas truck accident lawsuit is one of largest verdicts in 2006

Lawyers USA has published a story about the “top ten jury verdicts of 2006”.  The number ten slot is occupied by a Texas lawsuit in which actual damages of $38.5 million were awarded.  It was an underride protection lawsuit in which the jury awarded $36 million to a 25 year-old woman who survived, and $2.5 million to the family of a woman who died.  Here’s a link to the story.

CNN trashes settlement practices of State Farm and Allstate regarding car accident claims

In early February 2007, CNN ran a story regarding the settlement strategies and practices of insurance companies regarding car accidents.  The story focused on the actions and behaviors of State Farm and Allstate.  Here are excerpts of the story:

• State Farm, Allstate employ consultant's strategy, CNN research finds
• Theme of strategy is "deny, delay, defend," former employee says
• Companies convince juries that claims are fraudulent
• Insurers, institute deny treating claimants unfairly

By Drew Griffin and Kathleen Johnston, CNN

ATLANTA, Georgia (CNN) -- If you are injured in a minor car crash, chances are good that you will be in the fight of your life to get the insurance company to pay all the medical costs you incur -- even if the accident was no fault of your own.

That's what CNN discovered in an 18-month investigation into minor-impact soft-tissue injury crashes around the country. Those are accidents in which there is little damage to the vehicle and the injuries to people are not easy to see by the naked eye or conventional medical tools like X-rays.

Since the mid-1990s, most of the major insurance companies -- led by the two largest, Allstate and State Farm -- have adopted a tough take-it-or-leave-it strategy when dealing with such cases.

The result has been billions in profits for insurance companies and little, if anything, for the public, according to University of Nevada insurance law professor Jeff Stempel.

"We can see that policyholders individually are getting hurt by being dragged through the court on fender-bender claims, and yet we don't see any collateral benefit in the form of reduced premiums even for the other policyholders," Stempel said.

"So I think now we can say to continue this kind of program is in my view institutionalized bad faith."

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If you have never heard of the strategy, it's because insurance companies don't want you to know that they are paying out less and less for minor crashes even while their profits soar and your premiums continue to rise.

But after a review of more than 6,000 company documents and court records, interviews with a dozen people nationwide, including former company insiders, and conversations with accident victims, the picture is clear: If you challenge the offer by some insurance companies you will be left with no option but to go to court, where you will be dragged through the wringer.

In an affidavit in a New Mexico case where Allstate is being sued, one of the company's former attorneys said the strategy is to make fighting the company "so expensive and so time-consuming that lawyers would start refusing to help clients."

Shannon Kmatz, a police officer and former Allstate claims agent, said company employees were encouraged to get rid of claims quickly and cheaply and even offered accident victims as little as $50, telling them to take it or leave it.

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For Allstate and State Farm, according to documents obtained by CNN, the strategy was developed in the mid-1990s with the assistance of consulting giant McKinsey & Co.

Looking for a way to boost profits, McKinsey focused on soft-tissue injuries incurred in minor crashes.

While the McKinsey documents -- numbered in the thousands -- are under seal in courts around the country, CNN saw several of them during a court hearing in Lexington, Kentucky.

Playing off Allstate's signature slogan, one document recommends the insurer put boxing gloves on its "good hands" for those who insist on going to court.

The strategy, according to former Allstate and State Farm employee Jim Mathis, relies on the three D's -- denying a claim, delaying settlement of the claim and defending against the claim in court.

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Robert Hartwig, president of the Insurance Information Institute, told CNN insurers do not have a strategy of blanket denial of claims. He also said strategies to limit expenditures on minor-impact crashes are needed to fight fraud.

Hartwig specifically singled out lawyers who he claims make a living on car accident victims, saying those lawyers are upset because "the gravy train is over."

More on Mexican trucks in the U.S.

Here’s an interesting story regarding the recent announcement that Mexican trucks will be allowed to operate in the United States.  It’s posted on WorldNetDaily:

It's official: Mexican trucks coming
100 companies will have unlimited access to U.S. roads
By Jerome R. Corsi
© 2007 WorldNetDaily.com

One hundred Mexican trucking companies will have unlimited access to U.S. roads to haul international cargo as part of a year-long pilot program, the Department of Transportation announced today

In return, 100 U.S. trucking companies will be allowed to operate in Mexico but at a later date.

Calling for congressional hearings, Teamsters General President Jimmy Hoffa compared the announcement to the "Dubai Ports debacle," charging President Bush is "playing a game of Russian roulette on America's highways."

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Todd Spencer, spokesman for the Owner-Operator Independent Drivers Association, told WND that "to reach a conclusion that the safety regime in Mexico is compatible in any way, shape, or form with what we have here in the U.S. is ignoring reality. Mexico has never had hours-in-service regulations or drug testing of drivers. We still can't verify the accuracy of somebody's Commercial Driver’s License in Mexico for safety or compliance."

Spencer stressed the decision is not just a border decision.

"Once Mexican trucks are in the United States on this pilot program, they can operate everywhere in the U.S.," Spencer told WND. "If some state highway policeman in Vermont or Iowa stops a Mexican commercial truck in their state, they have absolutely no idea of deciding if that vehicle is in compliance with federal safety requirements. Who's going to provide the training or the equipment for state police to verify the legality of a commercial truck from Mexico, in terms of its cargo, its haul, its log book, or even the driver? Local police aren't going to have a clue."

Hoffa cited Mexico's inability to satisfy the DOT Inspector General's requirements for safety that have been mandated to the Federal Motor Carrier Safety Administration, or FMCSA.

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The Teamsters Union posed to WND a series of "unanswered questions," including:

Will the drivers be checked against the terror watch list, or will our borders be open to anyone with a Mexican driver's license?

Will the drivers be required to carry a Mexican passport as U.S. citizens are required to present their passports when entering the country from Mexico?

Will all U.S. standards be applied to Mexican drivers, including the requirement that U.S. drivers undergo regular physicals and meet minimum age requirements?

Will Mexican truck drivers participating in the pilot program be required to undergo drug and alcohol testing in U.S. labs? Who will oversee the collection of random samples for drug and alcohol testing of the Mexican drivers while they are in the U.S.?

Will U.S. wage and hour laws be enforced for Mexican drivers during the pilot program? How will DOT enforce hours of service rules and prevent false log books and fatigued drivers from entering the U.S.?

How can DOT assure the U.S. public that all trucks will be inspected by U.S. officials in Mexico and at the U.S. border when fewer that 10 percent of all Mexican trucks entering the commercial zone are inspected today?

According to a DOT spokesman, the pilot program "is predicated on the notion that Mexican trucks operating in the U.S. under the pilot program will operate pursuant to every single requirement that pertains to U.S. trucks operating in the United States, including both safety and security requirements on both the state and federal level."

DOT has increased its inspection staff by some 270 inspectors to implement the program. Still, DOT plans to continue the on-site inspection activities in Mexico that were announced by DOT Secretary Mary Peters earlier this week in Monterrey, Mexico.

The DOT spokesman confirmed there is no limit to the number of trucks the 100 Mexican trucking companies can operate in the United States. There is no restriction on the roads within the United States that the Mexican trucks can travel once they are admitted in the pilot program at the border.

The Mexican trucks, however, will be limited to carrying international cargo, in that they will be prohibited from stopping at one point in the U.S. destined for another point within the country.

On their return home, Mexican trucks, however, will be allowed to pick up in U.S. cargo originating in the U.S. destined for delivery back to Mexico.

While in the U.S., the Mexican drivers will operate under U.S. rules and regulations, including those controlling hours of time allowed at the wheel without a break.

The DOT spokesman specified that under agreements with Mexico already in effect, Mexican and U.S. commercial driver's licenses will be consider equivalent during the pilot program.

Mexican trucks operating in the United States will be required to have U.S. insurance coverage for all liabilities, including traffic accidents.

"The intent is for the Mexican trucking operations in the U.S. to be indistinguishable from U.S. trucking operations," the DOT spokesperson affirmed, "except that the driver and the truck began their trip in Mexico."

Illegal aliens and recovery of future lost wages

Oklahoma Attorney Robert B. Coffee, Jr. presented a paper at the last mini-conference of the Trucking Industry Defense Association.  The paper explored the issue of illegal aliens recovering for future lost earnings in personal injury actions.  He makes the following points:

The question should be framed as follows:  "When the plaintiff is an illegal alien, why should the defendant have to pay for future wages that could only be earned in violation of federal law?"

The jurisdictions are split on the issue of whether an injured illegal alien can recover "lost United States wages".

The following courts held that the answer is no: the New Hampshire Supreme Court; a U.S. District Court in Kansas; the U.S. Middle District of Florida; and, the Second Department of New York Supreme Court’s Appellate Division.

The following courts held that the answer is yes:  the Fifth Circuit (in a case that pre-dated a seminal U.S. Supreme Court which ruled that undocumented workers could not recover damages on an award from the National Labor Relations Board); the U.S. District Court in the Southern District of New York (construing New York law); and, the First Department of the Appellate Division of the Supreme Court of New York (note the contrast with the other New York state court, above).

New Jersey vacates $105 million dram shop award, including $75M for punitive damages

Law.com reports that the N.J. Supreme Court has declined to reinstate a $105 million dram shop verdict against a Giants Stadium beer vendor. Mothers Against Drunk Driving filed an amicus brief in the action.

In a Jan. 31 order with no commentary, the court denied a petition for certification by lawyers for Antonia Verni, now 9, who was paralyzed in a crash with a drunken fan after a Giants-Saints game in 1999.

Two years ago, a Bergen County Superior Court jury found the stadium vending company, Harry M. Stevens Inc., and its parent Aramark Corp., liable for $30 million in compensatory damages and $75 million in punitive damages.

The verdict was cited around the country as a warning to the sports industry, its vendors and its insurers of the potential cost of letting fans drink too much at games and tailgate parties.

But an appeals court vacated the award and ordered a retrial in August on grounds that dramatic testimony about the culture of drunkenness at the stadium was impermissible in a dram shop case and had the capacity to enflame the jury.

The Supreme Court's cert denial in Verni v. Harry M. Stevens of New Jersey, C-543, sets the stage for a trial along the lines mandated by the Appellate Division: concentration on whether the fan was served when he was visibly intoxicated, not whether a culture of drunkenness existed