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The tactics insurance companies use against consumers include:
Denying Claims: Some of the nation’s biggest insurance companies – Allstate, AIG, and State Farm among others – have systematically denied valid claims in an attempt to boost their bottom lines. These companies have rewarded employees who successfully denied claims, replaced employees who would not, and when all else failed, engaged in outright fraud to avoid paying claims.

Delaying until Death: Many insurance companies routinely delay claims, even going as far as to lock paperwork in safes, knowing full well that many policyholders will simply give up. In the words of one regulator, “the bottom line is that insurance companies make money when they don’t pay claims… They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die.”

Confusing Consumers: Insurance contracts are some of the densest and incomprehensible contracts a consumer is ever likely to see. More than half of all states have enacted “plain English” laws for consumer contracts, yet many Americans still do not fully understand the risks they are subject to.

Discriminating By Credit Score: Insurance companies are increasingly using credit reports to dictate the premiums you pay, or whether you can even get insurance in the first place. The practice penalizes senior citizens with little credit, those who responsibly pay bills every month with cash or check, or those who have suffered financial crisis through no fault of their own.

Abandoning the Sick: Health insurers looking to cut costs have taken to retroactively canceling, or rescinding, the policies of people whose conditions have become expensive to treat. Some insurance companies have even offered bonuses to employees who meet “cancellation goals” – cancer patients in the middle of chemotherapy have even been targeted.

Canceling for a Call: Many people are rightly reluctant to make small claims on their home insurance for fear their insurance company will raise their premiums. But few realize that insurance companies often refuse to renew a policy just for making a phone call. Often an insurance company will count an inquiry over the phone as the same as a claim, and then they will do everything in their power to drop you.

This new report follows AAJ’s previous investigation that exposed the ten worst insurance companies for consumers. To read about tactics insurance companies use against policyholders, and how consumers can fight back, visit www.justice.org/insurance.

Behind the Bailout:
How U.S. Chamber Created the 2008 Financial Crisis
Media contact:
Ray De Lorenzi, American Association for Justice
202-965-3500 x369Behind the Bailout: How U.S. Chamber Created the 2008 Financial Crisis 2
Introduction

Now one of the loudest voices for the government’s $700 billion bailout of the nation’s financial system, the U.S. Chamber of Commerce is hoping that few will remember that for the past decade it shamelessly led the fight to eliminate corporate accountability – one of the major factors that led to the current financial crisis.

AIG in particular was charged over $20 million by U.S. Chamber to fight for deregulation and strip post-Enron reforms, allowing AIG to more freely move in the markets (see case study below). This all took place at the same time that AIG and its CEO, Hank Greenberg, were being investigated by numerous agencies on a variety of fraud charges.

U.S. Chamber represents the largest corporations – not small businesses or the American public. The lobbying behemoth’s work helped bring about the current economic crisis which could end up costing taxpayers hundreds of billions of dollars. This downturn only reinforces the need for transparency and accountability inside America’s biggest corporations, which U.S. Chamber has consistently opposed.

U.S. Chamber has worked tirelessly to limit the rights of shareholders, roll back the reforms of Sarbanes-Oxley, limit corporate disclosures to investors, and filed lawsuits against government agencies to protect corporate boardrooms while preventing consumers from holding these same boardrooms accountable.

U.S. Chamber’s “pay-to-play” membership scheme1 – where it charges its members extra for special lobbying and advocacy efforts – has turned the Washington lobby into a hired gun for corporations such as AIG, Enron, and Qwest, poster children for massive corporate fraud. Since 1998, U.S. Chamber has spent over $380 million to lobby on their behalf.2

This issue brief will examine how U.S. Chamber has created the current economic climate by lobbying for less regulation, transparency, and accountability. Today, U.S. Chamber has become the loudest voice supporting a government bailout, even though their previous actions and rhetoric have all demanded the opposite. And even in this bailout, U.S. Chamber has lobbied to include provisions that give complete immunity to those who have committed fraud, protect executive golden parachutes, and deprive families from protecting their mortgages through bankruptcy.

U.S. Chamber: Evading Accountability
Under the guise of “tort reform,” U.S. Chamber tried to protect reckless financial institutions that committed subprime fraud. In July 2008, U.S. Chamber’s tort reform arm, the Institute for Legal Reform, released a study that claimed securities class-actions

1 “Political Cover: Major Business Lobby Wins Back Its Clout By Dispensing Favors,” Wall Street Journal, 9/11/01

2 OpenSecrets.org Behind the Bailout: How U.S. Chamber Created the 2008 Financial Crisis 3 were skyrocketing and proposed a raft of measures to immunize corporations from accountability and regulation. However, the report omitted one critical word: “subprime.” In fact, according to independent economists at NERA Economic Consulting, more than half of the class action filings were “related to the subprime collapse,” a fact that U.S. Chamber failed to mention. The rising numbers of subprime securities class actions was actually the first indication that something was seriously amiss in corporate America. The U.S. Chamber chose not only to ignore this red flag, but to try and use it for its own political gain.3 Many corporations involved in subprime lending are now under FBI investigation for fraud.4

3 http://www.instituteforlegalreform.com/issues/docload.cfm?docId=1213; http://www.nera.com/image/BRO_Recent_Trends_0708_731_FINAL.pdf

4 http://www.fbi.gov/page2/jan08/financial_fraud013108.html

5 http://www.capmktsreg.org/; “Levitt Loves Sarb-Ox,” Forbes, 2/8/07

6 “Group: Sarbanes-Oxley Needs to Loosen Up”, USA Today, 11/29/2006

7http://www.businessweek.com/magazine/content/05_17/c3930086_mz013.htm

8 “Chamber Files Brief On Enron Losses,” Washington Post, 3/29/05

U.S. Chamber created its “Commission on the Regulation of U.S. Capital Markets in the 21st Century,” – a clever guise to build support for rolling back financial protections. Simultaneously, another “independent” group was formed called the Committee on Capital Markets Regulation, nicknamed the “Paulson Commission” because of the strong endorsement it received from the Treasury Secretary.5 Coincidentally, U.S. Chamber released its findings the day after the Paulson Commission. Not surprisingly, both committees had similar recommendations: deregulate, roll back Sarbanes-Oxley, and have less prosecution of criminal and civil offenses. However, the Paulson Commission quickly received a new nickname – the “Greenberg Commission” – when it was discovered that former AIG CEO Hank Greenberg provided its funding.6 Greenberg likely funded U.S. Chamber’s project as well (see case study below).

After U.S. Chamber member Enron fell in scandal and corruption, the corporate lobby immediately began a campaign against regulation in an effort to blunt the impact of the Enron collapse. In the wake of the Enron debacle, U.S. Chamber began a hard-hitting campaign against regulation and enforcement. U.S. Chamber targeted the SEC and other agencies for overzealous regulation by claiming “an accounting error should never be seen as a crime.” Other business groups and lobbyists, such as long-time ally Business Roundtable, were apparently appalled at the U.S. Chamber campaign and refused to join it.7

U.S. Chamber sought lighter sentences for those involved in the Enron scandal. In 2005, U.S. Chamber filed a “friend-of-the-court” brief arguing for lighter sentences for top Merrill Lynch officials who were involved in the Enron scandal.8

U.S. Chamber sued the SEC to block reforms designed to protect mutual fund investors. In 2005, U.S. Chamber filed a lawsuit against the Securities and Exchange Commission (SEC) to block a reform measure designed to protect the interests of consumers investing in mutual funds. According to Reuters, “the chamber sued the SEC Behind the Bailout: How U.S. Chamber Created the 2008 Financial Crisis 4

9 “U.S. SEC, Top Business Lobby Clash on Enforcement,” Reuters, 3/9/06

10 http://www.reason.com/news/show/32748.html

11 http://www.uschamber.org/press/opeds/0204donohueenron.htm

12 “Sarbanes-Oxley Act Draws Criticism,” UPI, 9/20/02, http://securities.stanford.edu/newsarchive/2002/20020920_Headline08_Lonsdale.htm

13http://www.uschamber.org/press/opeds/041202tjd_usatodaycorpgov.htm
to try to block implementation of a mutual fund governance rule that requires that fund board chairmen, and 75 percent of fund directors, be ‘independent,’ or free of direct ties to fund managers.”9
In Their Own Words: U.S. Chamber CEO Tom Donohue
U.S. Chamber’s own rhetoric about deregulation does not match its current lobbying for a government bailout. CEO Tom Donohue has continually railed against government intervention in business while lobbying for less transparency and accountability.

1/21/2002 – U.S. Chamber asks for government cooperation, but not to help recover from its mistakes: “There is every right for business to go to government to look for cooperative ways to resolve problems. There is no right for business to go to government to take care of their follies and their errors.”10

4/2002 – U.S. Chamber op-ed claiming the free market, and not Enron, was actually on trial: “What government must NOT do is attempt to eliminate or reduce risk from the free market system by attempting to over regulate retirement savings and pension programs. The free market cannot—and will not—tolerate government controls over when and how people invest their money… Improving transparency and accountability is one thing. Eliminating risk and investment choices is quite another.”11

9/20/2002 – U.S. Chamber criticizing Sarbanes-Oxley legislation and its increased oversight and accountability measures: “I’m an old man, and I’ve never seen a feeding frenzy like the one we’ve had on corporate accountability. Business should stop apologizing for being the one institution in America that really works.” (said post-Enron)12

12/2/2004 – U.S. Chamber op-ed stating post-Enron reforms “go too far”: “From the beginning, the U.S. Chamber of Commerce has welcomed strong action to catch lawbreakers, enhance market transparency, and restore investor trust. However, the pendulum has swung too far. Regulators continue to impose rules that reach beyond the intent of Sarbanes-Oxley without regard to empirical data, deliberation, or any serious thought to the unintended consequences. . . . It’s time to pause and take a deep breath before piling on additional regulations that hurt our economy. While protecting the integrity of our markets is critical, we must also protect a free enterprise system that encourages and rewards strong business leadership and bold decision making.”13

4/12/2005 – U.S. Chamber letter to the editor, linking regulation to the increased risk of economic downturn: “When regulations cause — even unintentionally — more Behind the Bailout: How U.S. Chamber Created the 2008 Financial Crisis 5

14 http://www.uschamber.org/press/opeds/050412_wp_donohue.htm

15 http://www.nonprofitquarterly.org/cohenreport/2007/04/11/starr-crossed-foundation-dollars-used-to-further-corporate-interests/

16 “Key U.S. lobbyist defends AIG ousted boss: Officials ‘out of bounds’,” Financial Times, 4/4/05 problems than they solve, when the costs of those regulations far exceed the benefits and when politicians start making management decisions, our economy and standard of living are at risk.”14
Case Study: AIG
AIG is the quintessential example of U.S. Chamber serving as a hired gun for a large corporation. U.S. Chamber received over $20 million from AIG to fight for deregulation and strip post-Enron reforms. At the same time, AIG and its CEO, Hank Greenberg, were being investigated by numerous agencies on a variety of fraud charges. This case example is just one example of U.S. Chamber fighting for less regulation, oversight, and accountability.
The Starr Foundation is one of the largest foundations in the United States. It is chaired by Hank Greenberg, CEO of AIG until 2005. AIG gave $23 million to U.S. Chamber through the Starr Foundation to push anti-regulatory efforts. The majority of this money, $15 million, was pledged in 2003 immediately after the passage of Sarbanes-Oxley to initiate a “capital campaign for educational and research programs.” Effectively, this money was to begin setting the groundwork to roll back post-Enron reforms.
The money was given from Starr to U.S. Chamber’s own foundation, which freely moves money to the corporate arm. Of U.S. Chamber’s 17 foundation grants, seven came from a variety of corporations totaling $2.2 million. The remaining 10 grants to U.S. Chamber, equaling $24.25 million, all came from Greenberg and the Starr Foundation.15
AIG was using the Starr Foundation to funnel money into U.S. Chamber to push for deregulation and protect the insurer from future accounting scandals it would later face.
Additionally, Greenberg sat on U.S. Chamber’s board until his ouster from AIG in 2005. In 2006, U.S. Chamber placed new AIG CEO Martin Sullivan on their board, continuing the long-standing relationship with the corporation.
Donohue said of Greenberg, “I feel very sorry for my friend Hank Greenberg. But more than that I feel very sorry for the environment that we are creating, where people are unwilling to take risks, where capital is moving offshore, where companies are being taken public in London, not here.”16
Greenberg had reason to be concerned and use U.S. Chamber to roll back “cumbersome” regulations. Greenberg engaged in a variety of financial shenanigans while at AIG. In 2006, AIG paid $1.6 billion to settle a variety of financial charges that had commentators Behind the Bailout: How U.S. Chamber Created the 2008 Financial Crisis 6
17 Christian Science Monitor, 4/1/2005; BusinessWeek, 4/11/2005
18 Florida Office of Insurance Regulation, 1/29/2008
19 http://www.usdoj.gov/dag/cftf/corporate-fraud2008.pdf
20 “Accounting failures have cost Americans $60,000 on average, SEC commissioner says
Associated Press,” 11/14/2002
describing AIG as “the new Enron.” Two years later, five insurance executives were found guilty of fraud.17 Also, in January 2008, AIG agreed to pay $12.5 million to several states after state insurance commissioners found that the company had conspired with other insurance brokers to submit fake bids.18
Conclusion
Over the last decade, U.S. Chamber has spearheaded and accelerated the movement for less corporate accountability and less regulation. During this same time period, there have been major corporate fraud convictions, accounting scandals, and the biggest economic crisis since the Great Depression at a great cost to the American people.
Since July 2002, the Department of Justice has obtained nearly 1,300 corporate fraud convictions, including convictions of more than 200 chief executive officers and corporate presidents, more than 120 corporate vice presidents, and more than 50 chief financial officers.19 Additionally, according to SEC Commissioner Paul Atkins, the string of accounting failures at companies such as Enron, WorldCom, Adelphia, and Tyco cost U.S. households nearly $60,000 each on average as some $5 trillion in market value was lost.20
The cost of fraud to American taxpayers reinforces the need for corporate transparency and accountability. U.S. Chamber has created the current environment and are now asking to be bailed out after putting CEOs over investors and profits over accountability.

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Plaintiffs won in more than half of state court civil trials in 2005 and were more likely to get a favorable verdict in bench than jury trials, according to a new U.S. Department of Justice report.

Plaintiffs won in 56 percent of all general civil trial cases. Judges ruled in their favor in 68 percent of the cases, while juries favored the plaintiffs 54 percent of the time.
The report was released Tuesday by the Bureau of Justice Statistics at the U.S. Department of Justice. The study is the first nationally representative measure of general civil bench and jury trials in state courts.
The report found that plaintiffs were awarded an estimated $6 billion in compensatory and punitive damages, with the final median damage award of $28,000. More than 14 percent of plaintiff winners were awarded damages of more than $250,000, while about 4 percent got more than $1 million.
State courts handled nearly 27,000 civil cases through bench or jury trials. Sixty-one percent of them involved a tort claim, and the most common tort claim involved motor vehicle accidents.
Out of the 14,000 civil trials that went in the plaintiffs’ favor, punitive damages were awarded in about 5 percent of the cases, with $64,000 as the median punitive damages award.
The report also pointed to a major drop in the number of civil trials, with numbers decreasing by 52 percent from 1992 to 2005 in the nation’s 75 most populous counties. In these counties, the median final award also decreased, from $72,000 in 1992, to $43,000 in 2005.
But some tort cases did see higher awards. In products liability trials, median awards were five times higher in 2005 and median medical malpractice awards more than doubled, from $280,000 in 1992 to $682,000 in 2005.

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Striking new evidence has emerged of a widespread gap in the cost of health insurance, as women pay much more than men of the same age for individual insurance policies providing identical coverage, according to new data from insurance companies and online brokers.Skip to next paragraph
Some insurance executives expressed surprise at the size and prevalence of the disparities, which can make a woman’s insurance cost hundreds of dollars a year more than a man’s. Women’s advocacy groups have raised concerns about the differences, and members of Congress have begun to question the justification for them.
The new findings, which are not easily explained away, come amid anxiety about the declining economy. More and more people are shopping for individual health insurance policies because they have lost jobs that provided coverage. Politicians of both parties have offered proposals that would expand the role of the individual market, giving people tax credits or other assistance to buy coverage on their own.
“Women often fare worse than men in the individual insurance market,” said Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee.
Insurers say they have a sound reason for charging different premiums: Women ages 19 to 55 tend to cost more than men because they typically use more health care, especially in the childbearing years.
But women still pay more than men for insurance that does not cover maternity care. In the individual market, maternity coverage may be offered as an optional benefit, or rider, for a hefty additional premium.
Crystal D. Kilpatrick, a healthy 33-year-old real estate agent in Austin, Tex., said: “I’ve delayed having a baby because my insurance policy does not cover maternity care. If I have a baby, I’ll have to pay at least $8,000 out of pocket.”
In general, insurers say, they charge women more than men of the same age because claims experience shows that women use more health care services. They are more likely to visit doctors, to get regular checkups, to take prescription medications and to have certain chronic illnesses.
Marcia D. Greenberger, co-president of the National Women’s Law Center, an advocacy group that has examined hundreds of individual policies, said: “The wide variation in premiums could not possibly be justified by actuarial principles. We should not tolerate women having to pay more for health insurance, just as we do not tolerate the practice of using race as a factor in setting rates.”
Without substantial changes in the individual market, Ms. Greenberger said, tax credits for the purchase of insurance will be worth less to women because they face higher premiums.
The disparities are evident in premiums charged by major insurers like Humana, UnitedHealth, Aetna and Anthem, a unit of WellPoint; in prices quoted by eHealth, a leading online source of health insurance; and in rate tables published by state high-risk pools, which offer coverage to people who cannot obtain private insurance.
Humana, for example, says its Portrait plan offers “ideal coverage for people who want benefits like those provided by big employers.” For a Portrait plan with a $2,500 deductible, a 30-year-old woman pays 31 percent more than a man of the same age in Denver or Chicago and 32 percent more in Tallahassee, Fla.
In Columbus, Ohio, a 30-year-old woman pays 49 percent more than a man of the same age for Anthem’s Blue Access Economy plan. The woman’s monthly premium is $92.87, while a man pays $62.30. At age 40, the gap is somewhat smaller, with Anthem charging women 38 percent more than men for that policy.
Todd A. Siesky, a spokesman for WellPoint, declined to comment on the Anthem rates.
Thomas T. Noland Jr., a senior vice president of Humana, said: “Premiums for our individual health insurance plans reflect claims experience — the use of medical services — which varies by gender and age. Females use more medical services than males, and this difference is most pronounced in young adults.”
In addition, Mr. Noland said, “Bearing children increases other health risks later in life, such as urinary incontinence, which may require treatment with medication or surgery.”
Most state insurance pools, for high-risk individuals, also use sex as a factor in setting rates.
Thus, for example, in Dallas or Houston, women ages 25 to 29 pay 39 percent more than men of the same age when they buy coverage from the Texas Health Insurance Risk Pool.
In Nebraska, a 35-year-old woman pays 32 percent more than a man of the same age for coverage from the state insurance pool.
Representative Xavier Becerra, Democrat of California, said that “if men could have kids,” such disparities would probably not exist.
Elizabeth J. Leif, a health insurance actuary in Denver who helps calculate rates for Nebraska and other states, said: “Under the age of 55, women tend to be higher utilizers of health care than men. I am more conscious of my health than my husband, who will avoid going to the doctor at all costs.”
Skip to next paragraph“Many state insurance laws require insurance policies to cover complications of pregnancy, even if they do not cover maternity care,” Ms. Leif said. Insurers say those complications generate significant costs.
Representative Lloyd Doggett, Democrat of Texas, asked, “How can insurers in the individual market claim to meet the needs of women if maternity coverage is so difficult to get, so inadequate and expensive?”
Cecil D. Bykerk, president of the Society of Actuaries, a professional organization, said that if male and female premiums were equalized, women would pay less but “rates for men would go up.”
Mr. Bykerk, a former executive vice president of Mutual of Omaha, said, “If maternity care is included as a benefit, it drives up rates for everybody, making the whole policy less affordable.”
The individual insurance market is notoriously unstable. Adults often find it difficult or impossible to get affordable coverage in this market. In most states, insurers can charge higher premiums or deny coverage to people with health problems.
In job-based coverage, civil rights laws prohibit sex discrimination. The Equal Employment Opportunity Commission says employers cannot charge higher premiums to women than to men for the same benefits, even if women as a class are more expensive. Some states, including Maine, Montana and New York, have also prohibited sex-based rates in the individual insurance market.
Mila Kofman, the insurance superintendent in Maine, said: “There’s a strong public policy reason to prohibit gender-based rates. Only women can bear children. There’s an expense to that. But having babies benefits communities and society as a whole. Women should not have to bear the entire expense.”
And that expense can be substantial.
In Iowa, a 30-year-old woman pays $49 a month more than a man of the same age for one of Wellmark’s Select Enhanced plans. Her premium, at $151, is 48 percent higher than the man’s.

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Anecdotal descriptions of a few atypical lawsuits intended to shock or amuse the public have been the cornerstone of the business community’s anti-jury advertising and public relations campaign since the 1980s. Focusing on a few rare, anecdotal cases, instead of the majority of cases that pass through the courts each year, feeds into a false and dangerous perception that the system is overflowing with frivolous lawsuits. Often such verdicts have either been thrown out or substantially reduced by trial judges or appellate courts, which is exactly how the system is supposed to work. Yet the public is given the false impression that a plaintiff received a windfall, a defendant was financially ruined, or the system failed. This is particularly irresponsible when, as is typical, cases are not cited by name or even by date so they can be checked for accuracy. When journalists or researchers do track them down, they find in virtually every situation that such cases have been misreported and misused.

The “McDonald’s coffee” case. We have all heard it: a woman spills McDonald’s coffee, sues and gets $3 million. Here are the facts of this widely misreported and misunderstood case:
Stella Liebeck, 79 years old, was sitting in the passenger seat of her grandson’s car having purchased a cup of McDonald’s coffee. After the car stopped, she tried to hold the cup securely between her knees while removing the lid. However, the cup tipped over, pouring scalding hot coffee onto her. She received third-degree burns over 16 percent of her body, necessitating hospitalization for eight days, whirlpool treatment for debridement of her wounds, skin grafting, scarring, and disability for more than two years. Morgan, The Recorder, September 30, 1994. Despite these extensive injuries, she offered to settle with McDonald’s for $20,000. However, McDonald’s refused to settle. The jury awarded Liebeck $200,000 in compensatory damages — reduced to $160,000 because the jury found her 20 percent at fault — and $2.7 million in punitive damages for McDonald’s callous conduct. (To put this in perspective, McDonald’s revenue from coffee sales alone is in excess of $1.3 million a day.) The trial judge reduced the punitive damages to $480,000. Subsequently, the parties entered a post-verdict settlement. According to Stella Liebeck’s attorney, S. Reed Morgan, the jury heard the following evidence in the case:
· By corporate specifications, McDonald’s sells its coffee at 180 to 190 degrees Fahrenheit;
· Coffee at that temperature, if spilled, causes third-degree burns (the skin is burned away down to the muscle/fatty-tissue layer) in two to seven seconds;
· Third-degree burns do not heal without skin grafting, debridement and whirlpool treatments that cost tens of thousands of dollars and result in permanent disfigurement, extreme pain and disability of the victim for many months, and in some cases, years
· The chairman of the department of mechanical engineering and bio-mechanical engineering at the University of Texas testified that this risk of harm is unacceptable, as did a widely recognized expert on burns, the editor in chief of the leading scholarly publication in the specialty, the Journal of Burn Care and Rehabilitation;
· McDonald’s admitted that it has known about the risk of serious burns from its scalding hot coffee for more than 10 years — the risk was brought to its attention through numerous other claims and suits, to no avail;
· From 1982 to 1992, McDonald’s coffee burned more than 700 people, many receiving severe burns to the genital area, perineum, inner thighs, and buttocks;
· Not only men and women, but also children and infants, have been burned by McDonald’s scalding hot coffee, in some instances due to inadvertent spillage by McDonald’s employees;
· At least one woman had coffee dropped in her lap through the service window, causing third-degree burns to her inner thighs and other sensitive areas, which resulted in disability for years;
· Witnesses for McDonald’s admitted in court that consumers are unaware of the extent of the risk of serious burns from spilled coffee served at McDonald’s required temperature;
· McDonald’s admitted that it did not warn customers of the nature and extent of this risk and could offer no explanation as to why it did not;
· McDonald’s witnesses testified that it did not intend to turn down the heat — As one witness put it: “No, there is no current plan to change the procedure that we’re using in that regard right now;”
· McDonald’s admitted that its coffee is “not fit for consumption” when sold because it causes severe scalds if spilled or drunk;
· Liebeck’s treating physician testified that her injury was one of the worst scald burns he had ever seen.
Morgan, The Recorder, September 30, 1994. Moreover, the Shriner’s Burn Institute in Cincinnati had published warnings to the franchise food industry that its members were unnecessarily causing serious scald burns by serving beverages above 130 degrees Fahrenheit.
In refusing to grant a new trial in the case, Judge Robert Scott called McDonald’s behavior “callous.” Moreover, “the day after the verdict, the news media documented that coffee at the McDonald’s in Albuquerque [where Liebeck was burned] is now sold at 158 degrees. This will cause third-degree burns in about 60 seconds, rather than in two to seven seconds [so that], the margin of safety has been increased as a direct consequence of this verdict.” Id.
Irresponsible use of anecdotal cases by “tort reform” proponents is nothing new. The case of Charles Bigbee was the “McDonald’s coffee case” of the 1980s. Ronald Reagan described Bigbee’s case in a 1986 speech as follows: “In California, a man was using a public telephone booth to place a call. An alleged drunk driver careened down the street, lost control of his car, and crashed into a phone booth. Now, it’s no surprise that the injured man sued. But you might be startled to hear whom he sued: the telephone company and associated firms!” In fact, Bigbee’s leg was severed after a car hit the phone booth in which he had been trapped. The door jammed after he saw the car coming ‚ he tried to flee but could not. The accident left him unable to walk, severely depressed and unable to work. Because the phone company had placed the booth near a known hazardous intersection, and because the door was defective, keeping him trapped inside, he sued the phone company for compensation. Bigbee was brought to Congress to testify. He said, “I believe it would be very helpful if I could talk briefly about my case and show how it has been distorted not only by the President, but by the media as well. That is probably the best way to show that people who are injured due to the fault of others should be justly compensated for the damages they have to live with the rest of their lives.” House Committee on Banking, Finance and Urban Affairs, July 23, 1986. Charles Bigbee died in 1994 at age 52. Nader, Smith, No Contest: Corporate Lawyers and the Perversion of Justice in America (1996).

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A semitrailer truck slammed into a stopped tanker Tuesday on the Indiana Toll Road, causing a fire that severely burned a trucker from Delaware.

That crash happened as traffic was stopped for a medical helicopter to take away a victim from a pre-dawn collision about 20 miles east of South Bend.

The crashes closed the highway for several hours.

The second crash sent the truck, which was hauling bananas, into the median, where the cab and trailer were consumed by flames. While its driver was not hurt, the driver of the tanker, carrying liquid soap, was burned and airlifted to a Kalamazoo, Mich., hospital.

Vermond T. Dixon, 32, Newark, Del., was in critical condition, State Police said.

Two people were hurt in the first crash after a pickup truck hit a guardrail and then was hit by a semi. Police said the pickup’s driver and a passenger were hospitalized in stable condition.

The first crash occurred about 4:30 a.m.

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The driver of a casino-bound charter bus that crashed and killed eight people was arrested on suspicion of driving under the influence of drugs, the California Highway Patrol said Monday.
Authorities were investigating whether prescription or nonprescription drugs were involved in Sunday’s crash.
“We believe he was driving under the influence of something; that’s why we placed him under arrest,” patrol spokesman Robert Kays said Monday.
The bus, which had an invalid license plate, drifted off a rural two-lane road before the driver “overcorrected” and swerved back, patrol spokesman Patrick Landreth said. The bus tumbled into a ditch, ejecting some passengers as it rolled and crushing others, police said.
“The roof was collapsed down, the windows were broken out, and the bus was not only rolled over onto its side, it rolled completely over,” Landreth said. “It was facing the opposite direction and it was on its wheels.”
The driver, who has not been identified, had a valid commercial driver’s license but the patrol is looking into whether he had the proper permits to drive a bus in California.
Authorities had not determined the name of the charter company early Monday morning.
The bus had “Greyhound” marked on its side. But a Greyhound official said it was no longer operated by the company.
“It is not our bus. We sold it more than two years ago,” said Kim Plaskett, the Greyhound spokeswoman.
Kays, the patrol spokesman, said the bus had a Texas license plate that was “not valid.” He said other registration serial numbers also came up invalid.
“There are still several pieces of this puzzle that’s missing,” Kays said. “We will find out who owns the bus.”
The bus, which left from Sacramento, crashed 10 miles short of its destination, the Colusa Casino Resort. Many of the passengers were Laotian.
Firefighters used flashlights and infrared sensors to search the tall grass near the overturned bus Sunday night for more victims. The mud-covered bus was pulled from the ditch and was on a large tow truck.
CHP dispatcher Terry Troth said no other cars appeared to be involved in the crash.
Troth said he did not know the extent of the injuries. He said emergency responders were having trouble communicating with the passengers because many spoke Lao.
Helicopters took victims to several area hospitals.
The crash took place in an area of rice fields and orchards a few miles east of Interstate 5 just north of Williams.
Laura Hennum, a spokeswoman for Enloe Medical Center, said 11 victims were at the hospital Monday morning. Four were in critical condition, one was in serious condition and six in fair condition.
She said one of the biggest challenges for the hospital was helping family members find one another, as passengers were taken to several hospitals.
“We were getting a huge volume of calls from distressed family members trying to find their loved ones,” she said.

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Starting next year, Ford Motor will roll out a feature on many 2010 models that can limit teen drivers to 80 mph, using a computer chip in the key.
Parents also have the option of programming the teen’s key to limit the audio system’s volume, and to sound continuous alerts if the driver doesn’t wear a seat belt.
“Our message to parents is, hey, we are providing you some conditions to give your new drivers that may allow you to feel a little more comfortable in giving them the car more often,” said Jim Buczkowski, Ford’s director of electronic and electrical systems engineering.
The feature, called “MyKey,” will debut on the 2010 Focus compact car.
It will be standard on an unspecified number of Ford models when the 2010 cars and trucks come out late next summer. The feature will spread to the entire Ford, Lincoln and Mercury lineup as models are updated, spokesman Wes Sherwood said.
Ford arrived at the 80 mph limit even though freeway speed limits are lower in most states because it wanted to leave a margin in case an unusual situation arises, Buczkowski said. In some states, freeway speed limits are above 70 mph, Sherwood said.
“Just lopping it off at exactly 70 mph was felt to be too limiting,” Buczkowski said.
The company already uses computer chips in its keys to prevent thefts. The car won’t start unless it recognizes the chip in the key.
“It’s making use of existing technology, and through the magic of software, we’re able to build features on top of the features we already have,” Buczkowski said.
In addition to speed limits, MyKey also will limit the volume of the audio system, and it will sound a six-second chime every minute if seat belts are not fastened. The chime sounds for adult drivers, too, but ends after five minutes to avoid annoying adults who adamantly don’t want to wear seat belts, Buczkowski said.
Parents also have the option of having the car sound a chime if the teen exceeds 45, 55 or 65 mph.
Ford said its market research shows 75% of parents like the speed and audio limits, but as you might expect, 67% of teens don’t.
Danisha Williams, a 16-year-old senior at Southfield-Lathrup High School in suburban Detroit, said she’s against the idea.
“I wouldn’t want my parents to have that much control over how I’m driving,” she said. “If your parents are holding your hand, you’re never going to learn.”
Brittany Hawthorne, 17, another Southfield-Lathrup senior, said there may be emergency situations where she’d have to drive more than 80, possibly to accelerate to avoid a crash.
Ford’s research shows that parents would be more likely to let teens use their vehicles with the system, Sherwood said, and if it gets them the car more often, the number of teens objecting drops by nearly half.
A top official from the Insurance Institute for Highway Safety, a research group funded by the auto insurance industry that is pushing to raise the minimum driving age to 17 or 18, found the key intriguing and said she was not aware of any other manufacturer offering such a feature. IIHS says car crashes are the leading cause of death among teenagers.
“Research we’ve done has shown that speeding is a major factor in teen crashes, especially novice teen drivers,” said Anne McCartt, the institute’s senior vice president for research. “So I think a system that tries to correct the speeding behavior has the potential to improve safety.”
More than 5,000 U.S. teens die each year in car crashes. The rate of crashes, fatal and nonfatal, per mile driven for 16-year-old drivers is almost 10 times the rate for drivers ages 30 to 59, according to the National Highway Traffic Safety Administration.
Several U.S. auto insurers have begun offering in-car cameras or global positioning equipment to help parents monitor their teens’ driving behavior, in the hope of reducing the number of crashes.

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New national figures show a significant decline in the number of drunk driving related fatalities nationally and in 32 individual states. However, the number of alcohol related fatalities among motorcyclists is climbing in half of the states.

Last year 12,998 people were killed in crashes where a vehicle operator had a blood alcohol concentration of .08 or higher. This represents a 3.7% decline from the 2006 statistics. The DOT is working with law enforcement agencies to launch stepped-up enforcement efforts, especially during holiday periods. The agency is using a variety of media outlets to reach high risk demographic groups to reinforce the message that they should take responsible action by relying on a sober designated driver.

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In September the DOT released seat belt usage figures showing that 83 percent of vehicle occupants use seatbelts. It’s estimated that for each one percent increase in usage 270 lives are saved. Broken down by region the West has the highest usage at 93% followed by the South at 81% with the Midwest and Northeast at 79%.

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Thursday was Vania Shields’ first anniversary as a paramedic with the Bargersville Community Fire Department.
Co-workers remembered Shields, 33, Franklin, who died early Thursday in a crash on I-65 near the Whiteland exit, as a kind person dedicated to her job.
“She had a unique quality. She was always happy,” Bargersville Battalion Chief Mike Morris said of Shields, who was traveling to her other job as a paramedic for the Wayne Township Fire Department in Indianapolis.
Also killed in the accident was Charles Gould III, 28, Whiteland, a chemist with the Indianapolis-Marion County Forensic Services Agency.
Like Shields, he was driving to work when the accident occurred.
According to the Indiana State Police, a FedEx semitrailer truck pulling two trailers was southbound on I-65 when it struck a large wheel and tire shortly after 6 a.m., causing the driver to lose control and cross the median into the northbound lanes.
Shields’ 2003 Mercury sport utility vehicle, followed by Gould’s 1998 Honda Civic, struck the second trailer.
Johnson County Coroner David Lutz said Shields and Gould died instantly.
A 2004 Chevrolet pickup also struck the trailer, State Police said. The driver, Robert Grant, 20, Whiteland, and passenger Jayme Mount, 27, Franklin, were transported to Methodist Hospital in Indianapolis. Grant was treated and released, and Mount was listed in stable condition, hospital spokesman James Wide said.
The driver of the semi, Michael Sumner, 40, Seymour, was not injured, State Police said.
Whether the fact that the semi was pulling two trailers played a role in the accident is unclear. The vehicles struck the second trailer, State Police said.
Double trailers accounted for nearly 3 percent of the more than 4,700 large-truck fatalities in the United States in 2006, according to the Federal Motor Carrier Safety Administration.
Shields’ husband, Joe, will begin work Wednesday as a lieutenant with the Bargersville department, Bargersville fire officials said. His last shift with the Shelbyville Fire Department ended Thursday.
State Police are investigating the source of the tire that was in the southbound lanes of I-65.

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