Monday, February 07, 2005

Tort Reform, part 2

In a further example of what we find whenever we scratch the surface of 'frivolous lawsuit' rhetoric, we learn that WR Grace & Co. spent years knowingly releasing asbestos into the air and continued to lie about it even as people were dying.
And this comes out right after the administration's at the time bewildering comment about 'frivolous asbestos claims'.


Blogger Management said...

McFacts about the McDonalds Coffee Lawsuit

Everyone knows what you're talking about when you mention "the McDonald's lawsuit." Even though this case was decided in August of 1994, for many Americans it continues to represent the "problem" with our civil justice system.

The business community and insurance industry have done much to perpetuate this case. They don't want us to forget it. They know it helps them convince politicians that "tort reform" and other restrictions on juries is needed. And worse, they know it poisons the minds of citizens who sit on juries.

Unfortunately, not all the facts have been communicated - facts that put the case and the monetary award to the 81-year old plaintiff in a significantly different light.

According to the Wall Street journal, McDonald's callousness was the issue and even jurors who thought the case was just a tempest in a coffee pot were overwhelmed by the evidence against the Corporation.

The facts of the case, which caused a jury of six men and six women to find McDonald's coffee was unreasonably dangerous and had caused enough human misery and suffering that no one should be made to suffer exposure to such excessively hot coffee again, will shock and amaze you:

McFact No. 1: For years, McDonald's had known they had a problem with the way they make their coffee - that their coffee was served much hotter (at least 20 degrees more so) than at other restaurants.

McFact No. 2: McDonald's knew its coffee sometimes caused serious injuries - more than 700 incidents of scalding coffee burns in the past decade have been settled by the Corporation - and yet they never so much as consulted a burn expert regarding the issue.

McFact No. 3: The woman involved in this infamous case suffered very serious injuries - third degree burns on her groin, thighs and buttocks that required skin grafts and a seven-day hospital stay.

McFact No. 4: The woman, an 81-year old former department store clerk who had never before filed suit against anyone, said she wouldn't have brought the lawsuit against McDonald's had the Corporation not dismissed her request for compensation for medical bills.

McFact No. 5: A McDonald's quality assurance manager testified in the case that the Corporation was aware of the risk of serving dangerously hot coffee and had no plans to either turn down the heat or to post warning about the possibility of severe burns, even though most customers wouldn't think it was possible.

McFact No. 6: After careful deliberation, the jury found McDonald's was liable because the facts were overwhelmingly against the company. When it came to the punitive damages, the jury found that McDonald's had engaged in willful, reckless, malicious, or wanton conduct, and rendered a punitive damage award of 2.7 million dollars. (The equivalent of just two days of coffee sales, McDonalds Corporation generates revenues in excess of 1.3 million dollars daily from the sale of its coffee, selling 1 billion cups each year.)

McFact No. 7: On appeal, a judge lowered the award to $480,000, a fact not widely publicized in the media.

McFact No. 8: A report in Liability Week, September 29, 1997, indicated that Kathleen Gilliam, 73, suffered first degree burns when a cup of coffee spilled onto her lap. Reports also indicate that McDonald's consistently keeps its coffee at 185 degrees, still approximately 20 degrees hotter than at other restaurants. Third degree burns occur at this temperature in just two to seven seconds, requiring skin grafting, debridement and whirlpool treatments that cost tens of thousands of dollars and result in permanent disfigurement, extreme pain and disability to the victims for many months, and in some cases, years.

The most important message this case has for you, the consumer, is to be aware of the potential danger posed by your early morning pick-me-up. Take extra care to make sure children do not come into contact with scalding liquid, and always look to the facts before rendering your decision about any publicized case.

Courtesy of Legal News and Views, Ohio Academy of Trial Lawyers

4:49 PM  
Blogger Management said...

Associated Press
Update 5: W.R. Grace Accused of Hiding Cancer Risk
02.07.2005, 06:19 PM

W.R. Grace and Co. and seven high-ranking employees knew a Montana mine was releasing cancer-causing asbestos into the air and tried to hide the danger to workers and townspeople, according to a federal indictment unsealed Monday. More than 1,200 people became ill, and some of them died, prosecutors said.

The asbestos was naturally present in a vermiculite mine operated by Grace in the small town of Libby for nearly 30 years.

The federal grand jury said that top Grace executives and managers kept secret numerous studies spelling out the risk the cancer-causing asbestos posed to its customers, employees and Libby residents.

The indictment also accused Grace and Alan Stringer, former manager of the now-closed mine, of trying to obstruct efforts by the U.S. Environmental Protection Agency to investigate the extent of asbestos contamination in the Libby area beginning in 1999. Additional charges in the indictment include wire fraud and violating the federal Clean Air Act.

"A human and environmental tragedy has occurred in Libby. This prosecution seeks to hold Grace and some of its executives responsible for the misconduct alleged in this indictment," Bill Mercer, the U.S. attorney for Montana, said at a news conference in Missoula.

Lori Hanson, a special agent with the Environmental Protection Agency, called the allegations against Grace and its executives "one of the most significant environmental indictments in our history."

The company, based in Columbia, Md., did not immediately comment Monday on the charges. However, Grace disclosed last October that it was under investigation.

Grace filed for bankruptcy protection in April 2001 after it was overwhelmed by asbestos-related injury lawsuits.

Asbestos contamination in Libby came to light in 1999 after national news reports first linked the pollution from a nearby vermiculite mine to the deaths and illnesses of area residents. The vermiculite ore was used in a number of household products, most notably a common home insulation. The ore, however, contained naturally occurring tremolite asbestos, a carcinogen.

The EPA began its investigation shortly after news of the asbestos-related deaths became public. Since then, the agency declared the area a Superfund site and has spent more than $55 million on cleanup so far.

Grace has appealed a federal judge's ruling that it must repay the EPA that entire amount for cleanup. That dispute is ongoing.

In addition to the company and Stringer, those named in the indictment are Henry Eschenbach, former health official for a Grace subsidiary; Jack Wolter, a former executive for Grace's construction products division; William McCaig, former general manager of the Libby mine; Robert Bettacchi, a senior vice president of Grace; O. Mario Favorito, chief legal counsel for Grace; and Robert Walsh, former Grace vice president.

The company could face a fine of up to $280 million, twice the amount of after-tax profits the government alleges W.R. Grace realized from the Libby mine, according to the Justice Department.

Stringer could be sentenced to as many as 70 years in prison, while Wolter and Bettacchi face maximum prison terms of 55 years. The other defendants could get 5 years in prison.

Les Skramstad, a Libby resident and former mine worker who was diagnosed with asbestosis nine years ago, said he was pleased criminal charges had finally been filed.

"This wasn't something that happened to us. This was something that was done to us," said Skramstad, who attended Monday's news conference.

Skramstad, 68, said he worked in the mine for 2 1/2 years and believes he not only contracted asbestosis there, but brought home asbestos fibers that also sickened his wife and two children.

All of them now have asbestosis, Skramstad said.

"They should have to pay," Skramstad said of the defendants. "They will never have to pay like we did, because it won't cost them their lives."

The government claims that not only did the defendants keep secret the health dangers posed by the vermiculite mined at Libby, they hampered federal government efforts to protect the public from such risks.

As early as 1976, the company knew of lung health problems among its employees at the mine, according to the indictment.

Grace executives also had reports or studies warning of the dangers of asbestos vermiculite exposure in 1977, 1980, 1981, 1982, the indictment alleged. At one point, it said, Eschenbach responded to one of the studies by writing in a memo: "Our major problem is death from respiratory cancer. This is no surprise."

Despite having that information, the indictment said, Grace officials told the EPA in 1983 that there was no indication their products posed a substantial threat to human health.

The company, knowing of the dangers from its product, provided vermiculite for a junior high school running track and as a base for an ice rink, the indictment said. It said Grace also sold or leased some of its contaminated properties to local residents for homes and businesses, for baseball fields and for city use.

When the EPA arrived in 1999, company officials lied about providing vermiculite insulation to local residents for their homes and businesses and failed to reveal the vermiculite was used on the school's running track, the Justice Department said.

As late as April 2002, in response to the EPA declaring a public health emergency in Libby, the company still insisted its vermiculite was not a risk to the environment and human health, the indictment said.

Grace shares fell 3 cents Monday to close at $11.45 on the New York Stock Exchange. They lost another 45 cents in the extended session.

4:49 PM  

Post a Comment

<< Home