A Small Suggestion for Elizabeth Warren and the Consumer Finance Protection Agency

Bank gouging is everywhere.  I just ordered additional check from my bank (JPMorganChase), which linked me to Deluxe to order the checks. Cost ? Over $ 50, with "shipping" fee. What a rip off. By comparison, at the holidays, I ordered 100 greeting cards with three pictures and several colors, plus envelopes, for about  $ 125.  The profit margin on the checks is obscene.

My guess ?  The bank takes a percentage of every order for checks, or somehow is paid/credited//benefitted by Deluxe. Or, maybe the bank owns Deluxe, or some portion of it.

The suggestion ? After the agency is up and running, assign some junior person to determine  who is making all the money on the checks, and how payments are being shared. Sue or fine for rebates to the bank, or other unfair/illegal actions, if any. Then, require banks to provide a link to competitively priced vendors for checks.
 

 

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In a Global World, Where Does A Person "Live" - An Answer from the Supreme Court of Illinois Opinion on the Chicago Mayoral Election Opinion

In today's world of global travel and mobile jobs, where does an adult  person "live" when he or she and/or  the family sometimes occupy space  in more than one location ?  Seemingly simple questions are becoming even more challenging in this increasingly global world and careers involving increasingly impermanent jobs. And,the question even applies to corporations as some purport to skip around the globe to seek lower  tax rates as exemplified by Cooper Industries and myriad insurance companies, or other legal advantages, as evidence by James Hardie (moved from Australia to the Netherlands to Ireland) and myriad insurance companies.

In the US, the question of residency  has achieved some notoriety over the last few days due to rulings by Illinois courts on the eligibility of a candidate to become the new Mayor of Chicago. Under our state's statute on elections, a candidate for mayor must have "resided in" in the city for the year prior to the election.  The candidate, Rahm Emanuel, clearly "resided in" in Chicago for many years, but then moved temporarily to Washington, D.C. to serve as Chief of Staff for President Obama. That position is necessarily impermanent, and so Mr. Emanuel and his family did not sell their Chicago home, and instead simply rented the home while "living" in Washington. Yesterday, the Illinois Supreme Court issued its opinion affirming that Mr. Emanuel satisfies the standard because determining where a person "resides" includes an intent element plainly satisfied by Mr. Emanuel.

The impemanence of today's world raises interesing questions.  

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Oral Argument Helid in US Supreme Court Cases Regarding Jurisdiction Over Global Manufacturers

Nicastro and Goodyear are two pending cases addressing the scope of personal jurisdiction over global manufacturers when they sell allegedly defective products. Here, Crowell & Moring provides its take on the issues and argument. For those who would like more specifics, the Scotus Blog remains great. Go here for the Nicasto oral argument in various formats, or here for the unofficial transcript from Goodyear.

It's tough to predict what this Court will do. Chief Justice Roberts' professed  desire for "certainty" for business might suggest a ruling based on "bright lines." That seems, however, unwise because business methods and combinations continue to evolve.  The implications for "business" also can cut multiple ways. One could say it would be foolish to provide overseas with liability avoidance techniques that disadvantage American manufacturers. Indeed, last year, the plaintiff's bar and the US Chamber of Commerce actually agreed on supporting legislation to expand jurisdiction against overseas manufacturers, as described here.

One wonders how many "facts" will be stated, assumed or predicted by the Court as to the impact of its rulings.

Litigation Loans - One More Part of the Story from the Series by the NYT and Citizens for Public Integrity

This past Sunday's NYT  brought this latest article in a series on litigation funding. The story, in short, covers the the high price of  some forms of litigation funding, and provides some information about states regulating the process. 

 One hopes that future articles will touch on related subjects not mentioned in the article. For example, whether the price will come down as more companies join the market ?  Why are plaintiffs sometimes so desperate for money that they take out expensive loans (e.g  how long has their case dragged on; why are insurers not paying for medical treatment or paying claims) ?  Should lawyers be allowed to make loans ? If not, why not? 

 In short, reality is that injuries and ill health drive much of the tort litigation industry, and the litigation system has built in delays that can readily leave a person in desperate financial and physical straits, for years.   Non-recourse loans are expensive , but are one means people use to cope with the situation.  Are there better ideas out there for addressing the situation ? Are they workable? Funded? Available right now ?  

NIH Calculates Hundreds of Billions of Payments for Cancer Treatment - Wouldn't It Be Better To Prevent Cancers and Find Cheaper, Less Brutal Treatments

Why invest in science? Among other things, it may well help reduce soaring costs for cancer that will be arriving as we collectively pay the price for the use of toxins and genetic variations.  Set out below is the press release from the NIH regarding its new study on the current and future annual costs of cancer treatment in the US.   For the globe, annual direct and indirect costs of cancer are estimated at $1.5 trillion, annually.  The annual expenses certainly dwarf our current national annual investment of  $ 5 billion for cancer research, which President Obama seeks to increase.  One hopes that the so-called deficit hawks will do the math and figure out that it is financially prudent to invest more in cancer prevention and research, not to mention the need to reduce suffering.

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Cancer costs projected to reach at least $158 billion in 2020
New NIH study projects survivorship and costs of cancer care based on changes in the US population and cancer trends

 

Based on growth and aging of the U.S. population, medical expenditures for cancer in the year 2020 are projected to reach at least $158 billion (in 2010 dollars) – an increase of 27 percent over 2010, according to a National Institutes of Health analysis. If newly developed tools for cancer diagnosis, treatment, and follow-up continue to be more expensive, medical expenditures for cancer could reach as high as $207 billion, said the researchers from the National Cancer Institute (NCI), part of the NIH. The analysis appears online, Jan. 12, 2011, in the Journal of the National Cancer Institute.

The projections were based on the most recent data available on cancer incidence, survival, and costs of care. In 2010, medical costs associated with cancer were projected to reach $124.6 billion, with the highest costs associated with breast cancer ($16.5 billion), followed by colorectal cancer ($14 billion), lymphoma ($12 billion), lung cancer ($12 billion) and prostate cancer ($12 billion).

Graph shows cost projections for breast cancer, colorectal cancer, lung cancer, lymphoma, and prostate cancer. There are five lines for each cancer. The first line represents 2010 costs, the second represents 2020 costs if incidence, survival, and costs remain constant, and the third line represents costs for 2020 if costs remains constant but incidence and survival mirror recent trends. The fourth and fifth lines represent costs if incidence and survival follow trends and costs increase by 2 percent, and 5 percent, respectively. The values on the graph are as follows (expressed as costs in US 2010 billion dollars): Breast 16.49982, 20.49625, 19.08418, 21.36733, 25.64077. Colorectal 14.14048, 17.40829, 14.69941, 16.68146, 20.39135. Lung, 12.1207, 14.73277, 12.53303, 14.73016, 18.8426. Lymphoma, 12.14254, 15.26053, 15.43801, 17.26625, 20.68822. Prostate, 11.84809, 16.34137, 15.40885, 16.66773, 19.02401If cancer incidence and survival rates and costs remain stable and the U.S. population ages at the rate predicted by the U.S. Census Bureau, direct cancer care expenditures would reach $158 billion in 2020, the report said.

However, the researchers also did additional analyses to account for changes in cancer incidence and survival rates and for the likelihood that cancer care costs will increase as new technologies and treatments are developed. Assuming a 2 percent annual increase in medical costs in the initial and final phases of care – which would mirror recent trends – the projected 2020 costs increased to $173 billion. Estimating a 5 percent annual increase in these costs raised the projection to $207 billion. These figures do not include other types of costs, such as lost productivity, which add to the overall financial burden of cancer.

“Rising health care costs pose a challenge for policy makers charged with allocating future resources on cancer research, treatment, and prevention,” said study author Angela Mariotto, Ph.D., from NCI’s Surveillance Research Program. “Because it is difficult to anticipate future developments of cancer control technologies and their impact on the burden of cancer, we evaluated a variety of possible scenarios.”

To project national cancer expenditures, the researchers combined cancer prevalence, which is the current number of people living with cancer, with average annual costs of care by age (less than 65 or 65 and older). According to their prevalence estimates, there were 13.8 million cancer survivors alive in 2010, 58 percent of whom were age 65 or older. If cancer incidence and survival rates remain stable, the number of cancer survivors in 2020 will increase by 31 percent, to about 18.1 million. Because of the aging of the U.S. population, the researchers expect the largest increase in cancer survivors over the next 10 years to be among Americans age 65 and older.

“The rising costs of cancer care illustrate how important it is for us to advance the science of cancer prevention and treatment to ensure that we’re using the most effective approaches,” said Robert Croyle, Ph.D., director, Division of Cancer Control and Population Sciences, NCI. “This is especially important for elderly cancer patients with other complex health problems.”

To develop their cost projections, the authors used average medical costs for the different phases of cancer care: the first year after diagnosis, the last year of life, and the time in between. For all types of cancer, per-person costs of care were highest in the final year of life. Per-person costs associated with the first year after a cancer diagnosis were more varied, with cancers of the brain, pancreas, ovaries, esophagus and stomach having the highest initial costs and melanoma, prostate and breast cancers having the lowest initial-year costs.

These new projections are higher than previously published estimates of direct cancer expenditures, largely because the researchers used the most recent data available – including Medicare claims data through 2006, which include payments for newer, more expensive, targeted therapies which attack specific cancer cells and often have fewer side effects than other types of cancer treatments. In addition, by analyzing costs according to phase of care, which revealed the higher costs of care associated with the first year of treatment and last year of life (for those who die from their disease), the researchers were able to generate more precise estimates of the cost of care.

The researchers used 2005 incidence and mortality data from NCI’s Surveillance, Epidemiology and End Results (SEER) program to estimate cancer prevalence for 2010 and 2020. Population estimates for the United States was obtained from the U.S. Census Bureau’s National Interim Projections for 2006 to 2020. Medical cost estimates were obtained using the SEER-Medicare database which links SEER data to Medicare claims data from the Center for Medicare and Medicaid Services.

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Asbestos Insurance Coverage - Appellate Decision in NY May Cause a look into the Equitas Ploy

A new chapter may be opening in the long-running saga of London Market insurance coverage for asbestos claims. The story to date, in short, is that many London Market names and companies were in fact  insolvent in the 1980s and 1990s as a result of then-current and then-foreseeable asbestos claim payment obligations. However, most refused to admit the future claims impact of past insurance promises. Instead, they embarked on financial engineering on a grand scale, creating an enity known as Equitas to ostensibly "reinsure" and thus pay future claims. 

After its creation, Equitas t took steps to consolidate and limit the financial pain. Among other steps, it went around the world pleading poverty, complaining about the US tort system (sometimes rightfully), and threating to go into insolvency unless policyholders accepted relative pennies instead of full insurance dollars. Many, many corporate insureds gave up and took the pennies. 

Later, Equitas started more financial engineering. That round culminated in a deal with Warren Buffet insurance entities to take over much of the risk of Equitas. Now the Buffet companies use much of the Equitas playbook, and refuse to pay many claims.

Now, a New York appellate court has ruled the Equitas situation can be examined in an antitrust claim.  The opinion is here. A summary article is here. Many think it be wonderful to see this case expose more of the details of the financial engineering scam known as Equitas. But one has to wonder if the London Market players will let that happen.

Securities Suits Move Out of the US and in to a Dutch Court - Was Morrison a True Win ?

As previously covered here and here, litigants need to be careful about their strategic wishes and choices.  One wonders what the Morrison litigants are feeling now that securities litigation is ,moving ahead in  a Dutch court.  American Lawyer Daily has the full story by David Bario. Here are some key excerpts: 

"On Monday, a foundation formed under Dutch law and backed by the two plaintiffs firms filed suit in the Netherlands against Fortis, various bank officers and directors, and lead underwriter Merrill Lynch U.K. Holdings for allegedly misleading investors about Fortis's financial health in 2007 and 2008. The firms said in a press release that more than 140 institutional investors and 2,000 individual shareholders from Europe, Asia, and the U.S. have signed on with the foundation that filed the action, Stichting Investor Claims Against Fortis. "Shareholder losses are estimated in the tens of billions of euros," the firms said."

Mesothelioma - Will the JBIR Molecule Help Slow Tumours ?

While mesothelioma continues to kill, researchers continue to look for ways to slow or manage the disease. This BBC article reports on one man's ongoing efforts to raise research money despite his own mesothelioma tumor. The effort is focused on on the JBIR-23 molecule, which is isolated from strains of the Streptomyces bacteria.  A more technical explanation of the work (by Dr. Dobbs) is included in this paper seeking research assistants.  Even more technical information is here.

Predictive Software for Drug Risks - Part of the Future for Safer Use of Medicines, Product Liability, Risk Management and Maybe Even the Education of Future Lawyers

Science continues to push ahead, and a recent example illustrates some of what lies ahead.   Many  (but not all) tort law rules include some element of proof focused on the foreseeability of the harm caused by a product. That may seem simple when one is considering a shovel, for example. But when the products interact at the cellular level, the complexities are greater. And, more and more, lawyers are going to need to understand to understand chemistry and biology.

The latest example from science? Thanks to researchers at Children's Hospital Boston Informatics Program (CHIPS), there is new software aimed at predicting when drugs will disrupt the function of the reproductive system.  ScienceDaily has the full story here. Here are key excerpts:

The model, described in the March 2011 issue of Reproductive Toxicology (published online in November), used bioinformatics and public databases to profile 619 drugs already assigned to a pregnancy risk class, and whose target genes or proteins are known. For each of the genes targeted, 7426 in all, CHIP investigators Asher Schachter, MD, MMSc, MS, and Isaac Kohane, MD, PhD, crunched databases to identify genes involved in biological processes related to fetal development, looking for telltale search terms like "genesis," "develop," "differentiate" or "growth."

The researchers found that drugs targeting a large proportion of genes associated with fetal development tended to be in the higher risk classes. Based on the developmental gene profile, they created a model that showed 79 percent accuracy in predicting whether a drug would be in Class A (safest) or Class X (known teratogen).

Conclusion ? Tremendous change is ahead. Perhaps more aspiring lawyers will spend undergraduate days or other time learning biology, and much more. Who knows - maybe it will become common to see law schools focus on science, or team with other graduate schools to offer combined  programs.

 

 

 

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The Justice Roberts Court - A Friend to Big Business, It Seems

The "Justice Roberts court" continues to garner attention and devotion from conservatives, and to rule in favor of businesses. A new summary article by Roger Parloff is here, in Fortune  

As one would expect from a Fortune writer, Mr. Parloff often writes from the perspective of  business-friendly positions, and as a critic of plaintiff's lawyers, as exemplified here and here. As a lawyer and writer regarding mass tort litigation,  he also understands corporate law implications for liability claims, as exemplified by this article on big tobacco's corporate machinations.

 

Sponsored Research - Should Economists and Law Professors Have to Disclose Sponsored Research Payments and Financial Conflicts of Interest

Must economists and law professors disclose financial interests and conflicts of interest when they write ? Common sense says:  of course they must disclose.

History, however, shows that myriad economists and some Wall Street denizens fail to recognize or disclose conflicts of interest. An especially biting view is laid out in this wonderful post by the Epicurean Dealmaker.

But, amazingly, the disclosure topics are just now being aired by some. As to law professors,  consider this post by Erik Gerding at the Conglomerate. As to economists, consider Sewell Chan's  NYT article, also covered by Mr. Gerding. Stunningly, Mr. Chan's article reports that some economists claim to be scientists but do not want to disclose their financial sources or conflicts of interest. Mr. Chan's article also includes this key excerpt on an upcoming book:

"Since economics emerged as a modern discipline in the late 19th century, its practitioners have resisted formal ethical codes, said George F. DeMartino, an economist at the Josef Korbel School of International Studies at the University of Denver.

In “The Economist’s Oath: On the Need for and Content of Professional Economic Ethics,” to be published in January, Mr. DeMartino describes concerns dating to the 1920s about the influence of business on economic research, and cites multiple calls within the association for a code of conduct — all of which have been rebuffed."

I cannot grasp a view which says its OK not to disclose conflicts of interest, especially when it comes to sponsored research, a topic highlighted by Mr. Gerding's post and a movie on the  financial fiasco, Inside Job. Indeed, does one really need to think long about this topic after remembering that sponsored research generated by the tobacco industry  was used to create millions of excruciating cancer deaths through decades of false doubt about whether cigarettes cause cancer ?  Indeed, as described here, some publishers will no longer accept research paid for by tobacco money. Or, consider other examples of the problems flowing from undisclosed "sponsored research," a topic covered in various posts collected under that topic on the right hand side of this blog. 

One also might think that those who fail to disclose may soon find themselves as targets in "aiding and abetting" litigation. The topic of aiding and abetting liability was previously covered here, and recently has been made more prominent by aiding and abetting claims related to Madoff's Ponzi scheme

Global Growth Ahead for Asbestos Litigation - Asbestos Mine Worker Protests In India

The global spread of litigation is increasing, and so are the indicators of even more litigation ahead.  Examples keep popping up in India. For example, this past October, the Time of India ran a story on judicial and administrative proceedings aimed at obtaining compensation for former asbestos mine workers. This morning there is  a Times of India story on the former asbestos mine workers  preparing to stage protests regarding the absence of reports on results from health screenings undertaken by a government mining agency. 

Indicators of how, when and why tort litigation will grow are laid out in a chapter I wrote for a 2004 comparative law book on business law. The chapter is on-line here, and is titled: What to Expect as the American Asbestos Litigation Industry Moves into Europe. The article draws and extrapolates to other countries some principles laid out by Professor Steven Yeazell in his wonderful 2002 article tracing the growth of the American litigation industry. All signs indicate  more asbestos litigation ahead around the globe.

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Corporate Social Responsibility - The Top 5 Events for 2010

Foley Hoag's blog on CSR and the Law includes this year- end "top 5" post. It's well worth reading for an overview of big picture issues that in one or way another related to potential tort liability of companies.

One recent post from the same blog did not make the "top 5" list but it seemed significant. The post explained that the EU recently and overwhelmingly passed a resolution which highlights the potential power of CSR. Thus, the gist of the resolution brings to the forefront the reality that corporations are simply dumping costs when they fail to research adequately and distribute products which cause harms. Thus, the post explains:

  • "First, European companies enjoying the benefits of trade must be asked to conduct themselves in a socially and environmentally responsible manner in developing countries and elsewhere. 
  • Second, “non-compliance with CSR principles constitutes a form of social and environmental dumping” in developing countries to the detriment of companies and workers in Europe, who are required to meet more stringent social and environmental standards. 
  • Third, the EU’s trade policy must be consistent with and complimentary of its other foreign policy priorities on matters such as environmental protection and development aid."