October 2011

Distributed to over 53,000 subscribers each month

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I.
CAPITOL
OBSERVATIONS

Federal Judge Rules Alabama Can

Enforce Immigration Law

The battle escalating in our Nations

Capitol over regulationsthe rules that are
supposed to help keep our air and water
clean, the food and products we buy and
use safe, and things like childrens toys from
being lethalis critically important. This is
a battle that the American people cant
afford to lose. Big business is pushing a
duplicitous narrative about regulation
impeding job growth and thats just flat
wrong. The safeguards that are afforded by
good and effective regulation have huge
benefits for consumers and also for the
businesses that follow the rules. T he
America people should be up in arms over
what is happening on the regulatory front,
but unfortunately, the message doesnt
seem to be registering. I attribute that to
the simple fact that most folks dont understand the regulatory system. In fact, while
many believe that the government actually
does a good job of regulation, others have
accepted the myth that there has been too
much regulation.
While our regulatory efforts havent been
the best, at least there has been regulation
that really benefited the public. For
example, a recent analysis by Public Citizen
showed that five major worker health and
safety rules have saved thousands of lives,
prevented tens of thousands of injuries, and,
in many instances, improved productivity. Thats the message that the media and
our elected leaders getting out to the
public.
Big business, led by the National
Chamber of Commerce, its powerful lobby
group, has been spending tremendous sums
of money to get members of Congress to
accept their too much regulation views. As
a result, we are already hearing a number of
Representatives and Senators parroting the
claims that regulation hurts our economy
and causes us to lose jobs. But all Americans
have seen what happens when the government fails to do its regulatory duty. Exhibit
One is the BP oil spill, with all of the misery
it has caused, and it was caused in part by a
failure to regulate. We badly need to
improve our regulation of the powerful oil
industry, but there are others, such as the
pharmaceutical and chemical industries,
that are poorly regulated, as well. Hopefully,
folks are beginning to wake up and will put
pressure on members of Congress to
support strong, effective and fair regulation.

U.S. District Judge Sharon Lovelace Blackburn has now ruled in the cases challenging Alabamas new immigration law. On
September 28th, she rejected broad federal
claims of authority and said that Alabama
can begin aggressive immigration law
enforcement. Judge Blackburn refused in
her ruling to block much of Alabamas farreaching immigration law from going into
effect. The judges orders were in response
to three related, but separate, lawsuits
attempting to block the law. The suits were
brought by the U.S. Department of Justice,
by bishops of Alabamas Catholic, Episcopal
and United Methodist churches; and by a
coalition of civil rights groups, unions and
private citizens who said they would be
harmed by the law.
The Justice Department argued, as it had
over a similar law in Arizona, that immigration law enforcement rests with the federal
government, and that states could not set
up their own systems. Blackburn disagreed,
saying Alabamas efforts mirrored the
federal governments or at least were complementary. She blocked parts of the law in
the few areas where she found differences. The group of plaintiffs led by the Hispanic Interest Coalition of Alabama said it
will seek an emergency delay of Blackburns order pending an appeal to the U.S.
Court of Appeals for the Eleventh Circuit.
Similar and less far-reaching laws in
Arizona, Georgia, Indiana and Utah have
been temporarily blocked by the federal
courts, but Judge Blackburn found that Alabamas laws were generally consistent with
the intent of Congress, which she said gave
the states a supporting role in immigration
law enforcement.
Judge Blackburn refused to block Alabamas authorizing police to conduct immigration checks during routine traffic stops.
She left in place Alabamas sanctions against
employers for hiring undocumented
workers. She also refused to block a new
system requiring public schools to check
students immigration status upon enrollment and endorsed a ban on enforcing contracts made with illegal immigrants. Judge
Blackburn blocked a measure that sought to
bar harboring, transporting, encouraging or
renting to illegal immigrants.
Judge Blackburn also blocked parts of the
law barring illegal immigrants from seeking
work, and she blocked the creation of a
new traffic penalty for motorists who stop
in the roadway to hire day laborers. She also
stopped the state from banning illegal
immigrants from enrolling at Alabama colleges. While the judge refused to block most
sections related to business, she did stop a

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Protection For U.S. Consumers In Peril

measure that sought to take away tax benefits for employers who paid salaries to
illegal immigrants. Also, Judge Blackburn
struck down a provision allowing sanctions
against employers who had illegal immigrants on their payroll rather than hiring
Americans or legal immigrants.
Judge Blackburn emphasized in her order
that blocking a law before it is implemented
is a drastic step and requires clear evidence
that the Constitution and will of Congress
would be violated. In her order dealing with
school registration, Judge Blackburn said no
individual showed they had been harmed
by the law. Since the courts ruling came
down just as this issue was being sent to
the printer, I havent been able to read the
lengthy opinion and have accepted media

I N TH I S I S S U E
I.

Capitol Observations. . . . . . . . . . . . . . . . 2

Ii.

A Report On The Gulf Coast Disaster. . . . 4

Iii.

Drug Manufacturers Fraud Litigation. . . . 8

Iv.

Purely Political News & Views. . . . . . . . . 8

V.

Settlement Of The Month. . . . . . . . . . . . . 9

Vi.

Court Watch. . . . . . . . . . . . . . . . . . . . . . . 9

Vii.

The National Scene. . . . . . . . . . . . . . . . 10

Viii.

The Corporate World. . . . . . . . . . . . . . . 12

Ix.

Congressional Update . . . . . . . . . . . . . . 14

X.

Product Liability Update . . . . . . . . . . . . 15

Xi.

Mass Torts Update. . . . . . . . . . . . . . . . . 16

Xii.

Business Litigation. . . . . . . . . . . . . . . . . 17

Xiii.

An Update On Securities Litigation. . . . . 19

Xiv.

Insurance And Finance Update . . . . . . . 19

Xv.

Employment And Flsa Litigation. . . . . . . 21

Xvi.

Predatory Lending. . . . . . . . . . . . . . . . . 21

Xvii.

Premises Liability Update. . . . . . . . . . . . 22

Xviii.

Workplace Hazards. . . . . . . . . . . . . . . . 23

Xix.

Transportation. . . . . . . . . . . . . . . . . . . . 24

Xx.

Healthcare Issues . . . . . . . . . . . . . . . . . 25

Xxi.

Environmental Concerns. . . . . . . . . . . . 26

Xxii.

The Consumer Corner. . . . . . . . . . . . . . 26

Xxviii. Recalls

Update. . . . . . . . . . . . . . . . . . . . 29

Xxiv.

Firm Activities. . . . . . . . . . . . . . . . . . . . 35

Xxv.

Special Recognitions. . . . . . . . . . . . . . . 36

Xxvi. Favorite Bible Verses. . . . . . . . . . . . . . . 37

Xxvii. Closing Observations. . . . . . . . . . . . . . . 38
Xxviii. Parting Words. . . . . . . . . . . . . . . . . . . . 39

reports as being gospel. Hopefully, what I

have reported is consistent with the
content of the courts rulings. There is one
thing that I can say with certainty, however,
and that is, this important issue is far from
being resolved. I also realize fully there are
many problems that Alabama citizens will
have to encounter and deal with because of
this laws passage.
Source: AL.com

Alabama Is One Of Top Three States In

The Nation For Doing Business
Governor Robert Bentley announced last
month that Alabama was selected as one of
the top three states in the nation for doing
business. Area Development, a leading publication covering site selection and facility
planning, announced the results of its 2011
Top States for Doing Business survey. It was
no big surprise that Alabama was a top site
selection choice. The state also tied for first
place in incentive programs and was
number two for labor costs and workforce
development programs.
According to the results, the top ten
states for doing business are Texas, Georgia,
Alabama, South Carolina, Indiana, Louisiana,
North Carolina, Tennessee, Mississippi, and
California. Governor Bentley observed:
Alabama has a unique blend of excellent sites, quality infrastructure and
incentives that make us attractive to
companies throughout the
world. T hese consultants have recognized what we knew all
along. Alabama is the best place in
the nation to open or expand a business.
Area Development asked a select group
of highly-respected location consultants
who work with a nationwide client base to
name their top-5 state choices in 12 separate site selection categories. Alabama did
well in all categories across the board.
According to Alabama Development Office
Director Greg Canfield, consultants are currently looking at sites across Alabama for
potentially large and smaller projects. A full
review of this years Top States for Doing
Business is presented in the Fall 2011 issue
of Area Development and is posted online
at http://www.areadevelopment.com/topstates. Its interesting how our state keeps
coming out on top in terms of business site
selection in spite of all the so-called Tort
Reformers claiming no company wants to
do business in our state. They cant have it
both ways!
Source: Montgomery Advertiser

Alabama Could Gain 15,000 Jobs With

Trade Deal

Alabama Has To Take The Water Wars

Case To Supreme Court

Alabamas agriculture commissioner

believes that the State of Alabama could
gain 15,000 jobs if Congress ratifies three
free-trade agreements that President Barack
Obama will be sending to the U.S. Senate.
Commissioner John McMillan is urging
support for free-trade agreements with
Colombia, Panama and South Korea. Unlike
some earlier international trade agreements
that resulted in lost jobs for American
workers, the Commissioner believes these
agreements could mean significant job
growth in Alabama.
The U.S. Senate must ratify the agreements with a two-thirds margin for them to
take effect. As we know all too well, free
trade agreements werent very popular
after passage of the North American Free
Trade Agreement in 1994. Millions of U.S.
jobs were sent overseas and, with good
reason, Congress became hesitant to ratify
any new trade agreements with other countries. But I believe the trade agreements
mentioned above are needed.
International trade would mean job creation, especially for farmers and agribusinesses. Every $1 billion generated from
exports means 15,000 jobs, according to
Commerce Department figures. Alabama is
in a good position to generate another $1
billion in exports, with much of it coming
from the states $5 billion agriculture industry. Many of us forget that agriculture is our
states largest industry. According to Commissioner McMillan, about 15% of manufacturing sector jobs also depend on exports.
The trade agreements would make U.S.
products cost less in the countries
involved. Alabama products are in demand
in those countries, including poultry, wood
products, peanuts, pecans and medical supplies and equipment. The U.S. previously
had a trade agreement with Colombia that
expired. Trade to that country dropped
during the past ten years because high
tariffs made U.S. products too costly. Even
so, Colombia is the 21st largest trade partner
for the U.S.
Former Agriculture Commissioner Ron
Sparks had pushed sale of Alabama products to Cuba. Alabama still sells to Cuba and
is ready to expand exports to Latin America
and the Caribbean. The Port of Alabama in
Mobile is very important to the exporting
of Alabama agricultural products. Also, the
Panama Canal is being widened. T hat
project should be complete in 2014 and it
will be good for Alabamas export business.

Now that a federal appeals court has

refused to reconsider its ruling that said
metro Atlanta has the legal right to tap Lake
Lanier for water, both Alabama and Florida
are faced with an extremely serious
problem and its one that will worsen in
time. In mid-September, the U.S. Court of
Appeals for the Eleventh Circuit rejected a
request from the two states to reconsider
the ruling by a three-judge appeals panel
handed down earlier in the summer. This
case has been in court for a very long time.
I had hoped that a reasonable settlement
would have been worked out by now, but
for some reason that didnt happen.
In order for Alabama and Florida to
pursue the case, they must now appeal to
the U.S. Supreme Court. It appears there is
no choice but to appeal. Both states
contend that Georgia uses too much water,
hurting people, seafood and wildlife downstream. It certainly appears that an appeal
to the U.S. Supreme Court is in order. Gov.
Robert Bentley has already said Alabama
will appeal the decision. Hopefully, the
appeal will be successful. If not, both
Alabama and Florida residents and businesses will suffer. If nothing else, we should
have learned years ago that the availability
of water would be a critical issue for all
states. Unfortunately, there has been far too
little attention paid to this issue in years
past by our elected officials.

Source: Agriculture Department News Release

Source: AL.com

The Federal Government Must Crack

Down On Fraud
The Obama Administration recently
announced a plan to cut $320 billion over
ten years from the projected growth of
Medicare and Medicaid. The plan would
raise premiums and deductibles, lower payments to hospitals and require elderly
people who receive care at home to make
co-payments. Kathleen Sharp wrote an
excellent piece that appeared last month in
The New York Times, addressing an issue
that without a doubt is very important to
U.S. Taxpayers. It was noted in the article
that before charging consumers more and
eliminating valuable services, the government should be much more aggressive in
recovering money stolen from these taxpayer-supported programs. According to
some estimates, health care fraud is a $250
billion-a-year industry. Significantly, about
$100 billion of that is said to be stolen from
Medicare, the health care program for the
elderly, and Medicaid, the insurance
program for the poor and disabled.

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It was pointed out that there are many

ways to defraud taxpayers. For example, a
hospital chain can buy drugs at a steep discount and then bill Medicare for high
sticker prices. Doctors can bill for procedures that never happened, or for drugs
that were supplied to them by pharmaceutical companies free of charge, or pharmaceutical companies can promote a drug for
risky, unapproved uses. T here is also
massive cheating by drug manufacturers in
the Medicaid program.
We have seen first hand, in our firms handling of actual cases, how a number of drug
companies have cheated the state Medicaid
programs. T he Times article mentioned
how state Attorneys General have gone
after drug companies that were cheating
the Medicaid program. This type cheating is
being litigated in what has become known
as the AWP litigation. Drug companies,
over a period of years, over-changed for
drugs in the Medicaid programs. The companies would furnish false prices to the
states for reimbursement purposes and the
states would act on the false information
and pay out excessive amounts. This has
cost the states billions of dollars. Alabama
was one of the first states to get involved in
this litigation and our firm has been
involved since the beginning.
Source: New York Times

Albert Brewer Right Person To Lead

Constitutional Revision Commission
Former Gov. A lbert Brewer has been
elected to head up the Constitutional Revision Commission. He was chosen by Gov.
Robert Bentley, top-ranking legislators, and
other folks serving on the Commission to
chair the group. In my opinion, they
couldnt have chosen a better or more qualified person. The Commission will propose
piece-by-piece changes to Alabamas Constitution. The 16-member commission was
created by a joint resolution introduced by
the Senate Pro Tem Del Marsh and passed
by the Legislature in April. Members held
their first working meeting on September
21st and will meet again on October 5th and
26th. While I favor a constitutional convention approach, I realize the commission
concept is better than nothing.
Alabamas constitution, excluding its over
800 amendments, is divided into 18 articles. The commission, over three years, will
suggest changes to 11 of those articles. Any
change suggested by the commission could
be accepted or rejected by the full Legislature. Any changes approved by the lawmakers would then face acceptance or rejection
by state voters. Unfortunately, the commission wont address Article 11, which deals
4

with taxation. Neither will they make any

changes to Article 6 on the judicial department, which voters revised in 1973.
Under a schedule set out by the joint resolution and adopted by commission
members, the group could recommend to
the Legislature changes to as many as five
articles by February. T
hose include:
Article 12, on corporations;
Article 13, on banking;
Article 3, on distribution of powers;
Article 9, on representation, and
Article 4, on the legislative department.
Without any doubt, a change to Article 4,
which strictly limits the power of county
governments, such as the power to assess
and collect taxes, is badly needed. Jefferson
Countys current fiscal problems are a
prime example of why this change is
needed. Commission members elected state
Rep. Paul DeMarco, R-Homewood, to be
vice chairman. Paul hopes the group will be
able to propose changes to the constitution
that could win the support of Legislators
and voters alike. Hopefully, the Commission
will resist the opposition to change by
certain special interest groups and be able
to do its job!

II.
A REPORT ON THE
GULF COAST
DISASTER
An Update On The BP Oil Spill
Litigation
I had intended to write a detailed update
this month on the BP oil spill, but I didnt
have to do it. T hat was because Parker
Miller, a lawyer in our firm, gave a presentation to a group of Georgia lawyers in Atlanta
last month, and it was exactly what was
needed for this issue. Parker has been
working virtually full time on oil spillrelated claims for the past year. With Parkers permission, I am including his paper in
this issue for the edification of our readers.
Parker did a very good job of giving both a
historical perspective, as well as laying out
projections for the future.

www.BeasleyAllen.com

Seminar Paper Presented

by J. Parker Miller
I. IntroductionTechnology vs. Human
Error
 y all accounts, the Deepwater
B
Horizon oil drilling rig was a magnificent creation. It was enormous.
Costing about $365 million to build, it
was designed to drill some of the
deepest wells ever drilled. It rose 378
feet from top to bottom, and if you can
believe it, was able to automatically
position itself directly over the
Macondo well drilling site using satellite positioning and advanced comp u t e r t e c h n o l o g y. I t w a s a
technological marvel, and the pride of
Transoceans fleet.
II. What HappenedThe Spill was Devastating
But no matter how advanced the technology was on that drilling rigit
could not make up for the decisions
humans made aboard the rig. You see,
for weeks, the Deepwater Horizon oil
rig was running weeks behind on its
work. It was costing BP, who was
leasing the vessel, millions every day it
was late. It was nearing completion of
its responsibility on April 20, 2010, and
only had to go through a couple more
steps to safely insure completion.
Instead of doing the right thing and
undertaking fundamental industryaccepted principles in completing the
wellsuch as accounting for methane
gas in the well, taking the time to
ensure the cementing job was completed, accounting for intense pressure
variations in the well, and so onBP
cut corners at almost every critical
part of the safety process. Around 9:50
PM on April 20, 2010, after ignoring
obvious pressure and gas readings, dangerous gas shot up the riser that connects the drilling rig to the well, and
the rig exploded. Witness reports say
that you could see the explosion from
almost 35 miles away. Eleven people
were burned alive and countless
others were hurt. The rig burned out
of control for two days, sunk into the
ocean, and set off what is most assuredly the largest environmental disaster
in United States history. In total, 200
million gallons of oil spilled into the
Gulf over an 87 day stretch, BP
dumped 1.8 million gallons of toxic
chemical dispersant to cover up the
oil, 85,000 square miles of fishing territory was closed at the peak of the spill,

and over 600 miles of coastline was

oiled. Businesses and families were
devastated from the disasterall
because profits were more important
than people.
III. Beasley Allens Involvement
A significant amount of litigation has
ensued since the Deepwater Horizon
oil spill occurred. Beasley Allen environmental Section Head Rhon Jones,
along with 16 other lawyers selected
by the court in Louisiana, was selected
by the Court in Louisiana to be on the
steering committee. I am second chair
to Beasley Allens steering committee
position. In addition, we have two
other lawyers that are working full
time in New OrleansChris Boutwell
is working hard with the MDLs environmental impacts team. John Tomlinson, another attorney in our
environmental section, is involved with
the MDLs economic damages committee, which is tasked with assessing the
total economic damage to folks along
the Gulf Coast. In Montgomery, our
firm has about 20 lawyers working
around the clock to assist clients along
the Gulf Coast who are suffering as a
result of this disaster.
IV. Litigation Status
The MDL formed in the fall of 2010,
and since that time, a total of 20
million pages of documents have been
produced. Since January, lawyers for
the Plaintiffs have taken 188 depositions, and that number will grow by
another 44 over the next couple of
months. T here are roughly 5,600
exhibits to depositions. And imagine
guysthis is just for the first phase of
the litigation. T here are two other
phases of the litigation that have really
not even started yet. One thing is for
sure thoughwe believe the facts are
going to show systematic cost cutting
by BP and others that led directly to
the explosion that killed so many
people and ruined so many businesses.
Given how massive this case is and the
complexity that is involved, you, and
the Defendants as well, would probably think that I was crazy if I told you
when all of this started that the Plaintiffs would be trying a case a year and a
half after the disaster occurred. I am
pleased to report that is exactly what is
going to happen. On February 27,
2012, trial begins and the Plaintiffs will
be ready. From what I hear, this case
could be the quickest incident to trial
case of this magnitude in history. And

in these cases, nothing is more effective than a Steering Committee that is

unified and is constantly pushing the
Defendants. I am pleased to report that
is exactly what is happening, and that
will continue to happen through trial.
V. The Trial
I talked a little bit about Phase One of
the oil spill trial that is set to begin on
February 27, 2012. Phase One will
cover the actual blowout liability. In
other words, not only will it determine
who is at fault, but it will also apportion fault amongst all of the Defendants. Transocean actually did us a
favor when it filed an action to limit its
liability as a vessel owner last summer.
In doing so, it has tendered in all of the
other Defendants to determine who is
actually at fault, by how much, and
whether Transocean can limit its liability under maritime law as a vessel
owner.
In the end, we believe BP is going to
bear a significant amount of the
responsibility, but we also believe that
Transocean is not going to be able to
limit its liability because it knew about
the problems and risks aboard that rig.
There will be other companies that
will bear responsibility as well, and all
of that will be worked out in a couple
of months when trial begins.
The Phase Two trial will take place
after the Phase One portion is completed. Phase Two is going to cover
how much oil actually spilled into the
Gulf. In addition, Phase Two will focus
on the conduct of the parties in trying
to stop the oil from gushing. Discovery
is just getting kicked off for the Phase
Two portion of the trial.When it comes
to quantifying how much oil was actually spilled, Phase Two will be very
important to the federal government
and state claims because of civil penalties.
Phase Three is going to cover efforts to
contain the oil, like the spraying of dispersant, controlled burns, and the use
of boom. I like to think of this as the
everything else trial.
VI. Important Rulings and Federal Investigation Status
I also want to update you on some of
the rulings from the Court. This case is
mainly governed by two sets of laws:
the Oil Pollution Act of 1990 (which
was a federal statute that was concocted back in 1990 after the Exxon
Valdez disaster), and general maritime

law (which is federal common law that

governs cases at sea). The Defendants
moved to dismiss the Plaintiffs maritime law claims because they said that
the Oil Pollution Act displaced maritime law claims. And, because the Oil
Pollution Act does not provide for
punitive damages and because it displaces maritime law (which provides
for punitive damages), the Defendants
argued in their motion to dismiss that
the Plaintiffs were not entitled to punitive damages.
The Court disagreed with the Defendants. First, Judge Barbier said that the
Plaintiffs get to keep their maritime
law claims. Second, he ruled that the
Plaintiffs would have their punitive
damage claims as well. I think Judge
Barbier got it right hereplaintiffs
have had these remedies for decades,
and its hard to fathom that a statute
that constantly tries to save maritime
law claims would bar them. T hird,
Judge Barbier said that a strict proximate cause standard for proving
damages would not apply. Instead, he
said it would be a due to or resulting
from the oil spill standard. These were
significant victories for us, and are
going to increase the pressure on BP
and the other Defendants as we move
further.
The Defendants also argued that Judge
Barbier would have to analyze whether
each Plaintiff met presentment under
the Oil Pollution Act. The presentment
requirement is a legal technicality
similar to what you would see under
the Federal Tort Claims Act where the
Plaintiff has to present his claim first to
a designated party before he could sue.
If the Defendants had their waythey
would have Judge Barbier look at over
125,000 claims that are filed in the
MDL to figure out whether all of them
have satisfied presentment. The effect
of this would be to bog down the litigation for years. T hankfully, Judge
Barbier said no to the Defendants
ensuring that the cases would progress
forward quickly and efficiently.
There have also been some significant
developments in the many federal and
state studies. Just yesterday, a federal
report was released that said the
Defendants ignored serious problems
aboard the rig that led to the explosion. In fact, the federal reportwhich
was not the first of its kind since the
explosion occurredpointed the
finger directly at the people that were
calling the shots aboard the rig. Studies
continue to roll in that say the same

www.JereBeasleyReport.com

thing. We just heard another report

where BP withheld critical information
from the Federal Government about
dangerous methane deposits around
the well. You couple this with a scathing complaint filed by Halliburton in
Texas Court accusing their business
partner BP of intentionally withholding important information about the
well, and what you find is a very unstable situation for BP and others making
the decisions on that rig.
VII. Victims Of The Spill
You can only imagine what folks along
the Gulf Coast have been through. As
you probably know, BP set up the Gulf
Coast Claims Facility and selected
Kenneth Feinberg as the claims czar to
man the facility. From my experience,
the GCCF is operating to help BP with
its liability at the grave expense of folks
on the Gulf Coast. They are delaying
and stalling legitimate claims filed by
folks that need those funds to pay their
bills and keep their businesses open.
Predictably, what we are starting to see
are desperate claimants willing to take
any final settlementno matter how
much it under-compensates themto
pay their bills. We are trying to help
our clients not only cope with the
disaster, but to deal with the problems
the GCCF creates. I can tell you that
we are doing everything we can to
protect their rights, and the PSC has
filed a motion in Eastern District of
Louisiana requesting Judge Barbier
appoint a special master to supervise
the GCCF. The GCCF should be paying
claims quickly and efficiently, as the Oil
Pollution Act requires. Instead, it is
delaying payment until folks become
desperate and are forced to accept a
cheap settlement. I am confident that
the Court will grant our motion, and
that folks will get their money in a
prompt fashion.
BP keeps spending millions of dollars
in advertising to convince everyone
that things are fine on the Gulf Coast
and that the oil is gone. But as Tropical
Storm Lee revealed when it came
ashorethe oil is not gone. Tar balls
continue to wash up on shore.You may
have read reports about the hundreds
of dolphins that have washed ashore,
many of which were coated in oil. You
may have also read about the large
plumes of oil that have collected
around the wellhead and just off the
coast. A report also came out a couple
of weeks ago about new oil that may
be collecting around the wellhead
which is very disturbing if true. My
6

clients tell me that there are disturbing

trends happening right now in the
shrimp, fish and crab populations that
they have never seen before. There are
hundreds, if not thousands, of cleanup
workers that are now ver y sick
because they were not given the
appropriate protective gear. As you can
probably tell, it is baffling how much
heartache and damage this disaster has
caused.
VIII.

Closing Remarks

In closing, I am young, and I havent

been at Beasley Allen a long time. But
one thing I have learned very early
onand it is something that I think
makes Beasley Allen stand out in these
massive casesis that we think it is so
important that your clients have direct
communications with lawyers, not secretaries and paralegals. Ultimately, you
are never going to have a successful
attorney-client relationship unless you
have lawyers talking to clients.
As we progress towards trial, there are
a lot of unresolved claims still out
there. Keep in mind that folks and businesses dont have to be on the Gulf
Coast in order to have a claim. For
example, a Georgia seafood processor
that relies entirely on Gulf seafood
could have a valid claim under the law.
Our firm is still talking to new claimants almost every day. These claimants
include restaurants, fishermen, hotels,
people that were injured cleaning up
the oil, and others across the Gulf.
If you have any questions about any of
the matters discussed by Parker, or about
anything else related to the oil spill litigation, you can contact him at 1-800-898-2034
or by email at Parker.Miller@beasleyallen.
com.

Oil Spill Victims Can Seek Punitive

Damages And Maritime Law Remedies
In a major turn of events, Judge Carl
Barbier ruled recently that Plaintiffs in the
Deepwater Horizon oil spill litigation will
be allowed to seek punitive damages and
maritime law remedies against BP and other
companies responsible for the catastrophic
explosion and oil spill that occurred in April
2010. Previously, BP had filed a motion in
court seeking to dismiss thousands of economic damage claims pending in the Louisiana Court.
To determine whether certain claims
should remain in the litigation, Judge
Barbier had to wade through the Oil Pollution Act of 1990, the Outer Continental

www.BeasleyAllen.com

Shelf Lands Act, federal maritime law, as well

as state laws. Lawyers defending BP and
other Defendants argued that oil spill
victims could not seek punitive damages
because the federal Oil Pollution Act was
silent, and because the Oil Pollution Act displaces federal maritime law, which provides
for punitive damages.
Judge Barbier disagreed with the Defendants and ruled that fishermen and those
with direct physical property damage from
the oil spill can pursue punitive damages
against the Defendants, as traditional Plaintiffs have been able to do for years under
maritime law. Moreover, Judge Barbier
determined that the case properly falls
within maritime law and the Outer Continental Shelf Lands Act. Maritime law allows
for claims of negligence, gross negligence
and strict liability for manufacturing or
design defects.
The Defendants also argued in their
briefs that claims should be limited to only
those that meet a strict proximate cause
requirement. Again, Judge Barbier ruled for
the Plaintiffs, stating that
[t]he Court notes that OPA does not
expressly require proximate cause,
but rather only that the loss is due to
or resulting from the oil spill. OPA
causation may lie somewhere
between traditional proximate cause
and simple but for causation.
The Court did rule, however, that state
law claims were preempted by maritime
law. But because the Oil Pollution Act
greatly expands the eligibility of Claimants
to pursue economic damages resulting
from an oil spill, its unlikely that the Plaintiffs will be adversely impacted by the
ruling. I believe the Courts ruling puts substantial pressure on BP and others responsible for the Deepwater Horizons demise
and subsequent oil spill. Currently, there are
well over 100,000 individual and business
claims in the litigation. In addition, federal,
state and local government claims remain
active in the litigation. On behalf of our
clients, we were extremely well satisfied
with the Courts order. If you would like
more information on the order, contact
Rhon Jones or Parker Miller at 1-800-8982034 or by email at Rhon.Jones@beasleyallen.com or Parker.Miller@beasleyallen.com.
If these lawyers are unavailable, you can
contact Sandra Walters at 1-800-898-2034
and she will put you in touch with a lawyer
who will be familiar with the BP litigation.
Source: The Times-Picayune

Final Report From The Government

Puts Most Of The Blame On BP
Even though Parkers seminar paper
covers the Gulf Oil Spill extremely well, I
do want to mention the final report by the
federal government. The United States has
now put the lions share of blame for the
countrys biggest-ever offshore oil spill on
BP. The government issued its final assessment of last years Gulf disaster in mid-September. This report could play a huge role
in BPs decision-making as it relates to settlement. It could also set the stage for criminal charges. T he Coast Guard and the
offshore oil regulator said in the report that
BP was solely to blame for 21 of 35 contributing causes to the Macondo well blow-out
that led to the leak, and shared blame for
eight more. That was not good news for BP.
After the most definitive look yet at the
disaster, investigators said BP focused excessively on containing costs and speeding up
operations, and made a series of decisions
that complicated cementing operations,
which they said were the central cause of
the disaster.While the findings were broadly
in line with several previous investigations,
this report offered the most comprehensive
look at the governments official view on
the causes of the Gulf oil spill, including
analysis of the recovered blowout preventer
and violations of federal regulations by the
companies involved with the well. It was
significant that the report said:BPs cost or
time saving decisions without considering
contingencies and mitigation were contributing causes of the Macondo blowout.
BP took a most interesting position when
it said it agreed with the reports core conclusionconsistent with every other official investigationthat the Deepwater
Horizon accident was the result of multiple
causes, involving multiple parties, including
Transocean and Halliburton. The report
highlighted a litany of errors that preceded
last years explosion on the BP-leased Deepwater Horizon rig that killed 11 workers
and poured more than 4 million barrels of
oil from the well into the Gulf. The other
companies sharing the blame to some
degree all seemed pleased that BP was hit
the hardest in the report.
The report said that BP failed to communicate decisions regarding the cementing
that increased operational risks to Transocean, the contractor that owned and operated Deepwater Horizon. T he cements
failure to maintain the integrity of the well
was the central cause of the blowout. BP
worked with Halliburton to design the
cement job. Because the well was over
budget,BP sought to minimize these losses
by reducing the volume of cement it
pumped into the well and a key analysis

recommended by a Halliburton engineer

was skipped, according to the report.
As we have previously reported, the
Justice Department has already sued the
wells owners, BP, Anadarko Petroleum Corp
and Mitsui & Co, as well as Transocean. These civil claims are now before
the federal court in New Orleans, where a
trial allocating blame for the spill will begin
in February. Many believe the report
increases the likelihood that BP, Transocean,
and Halliburton will face criminal charges
for their roles in causing the Gulf oil
spill. That is the belief of David Uhlmann, a
professor at University of Michigan Law
School, who formerly was the top environmental crimes prosecutor for the Justice
Department. In June 2010, Attorney General
Eric Holder announced that the Justice
Department had opened criminal and civil
investigations into the causes of the disaster.
The findings from the report could cause
BP to put over $30 billion on the table to
settle all of the claims against the giant oil
company, according to a story by Tom
Bergin. The joint Coast Guard and Bureau
of Ocean Energy Management, Regulation
and Enforcement probe into the Macondo
well blow-out resulted in this report. It certainly appears that this report was even
more damning of BPs behavior than the
Presidential panels findings, which were
issued in January and February. But each
report also highlighted mistakes made by
BPs contractors, driller Transocean and
cement specialist Halliburton.
BP has said it estimates the cost of the oil
spill will end up at around $42 billion,
including all environmental costs, compensation, legal claims and fines. I believe the
total payment from BPwhether by court
action or settlementwill be much greater.
While BP has allocated $3.5 billion for
Clean Water Act fines, if the oil giant is
found to have been grossly negligent, which
is very likely, it will be fined much more
than $21 billion.
Even before the conclusion of the highlycritical official investigations, the government indicated it would push hard for the
higher level of fines associated with gross
negligence. Thus far nothing has happened
to change that position. In my opinion, a
huge fine is a certainty and I believe BP
knows it. BPs provision for payouts also
excluded punitive damages, but Judge Carl
Barbier has now ruled these damages can
be claimed. That ruling is very important
and will result in BP paying much more in
damages than it wants to pay.
Source: Insurance Journal

BP Oil Not Degrading On Gulf Floor

Researchers believe the tar balls that
washed on to Gulf of Mexico beaches by
Tropical Storm Lee prove that oil left over
from the BP Oil Spill isnt breaking down as
quickly as BP and others want the public to
believe. The study by Auburn University
shows the tar that hit Alabama beaches in
September appeared relatively fresh and
unchanged from when oil first poured into
the Gulf during the spill. The study concluded that mats of oil are still submerged
on the seabed, and it says the material could
pose a long-term threat to coastal ecosystems. BP hasnt commented on the study to
my knowledge. Instead, the company is
cleaning the beaches and doing so with as
little media attention as possible.
A separate study by researchers from LSU
confirms that new oil being found in the
beaches in several states came from BPs
well. Based on what we have learned, its
almost certain that we have not seen the
last of oil coming ashore from this
spill. Also, we must remember that there
was also a huge quality of chemicals
pumped into the Gulf waters by BP and
that could wind up being a more serious
problem than the oil.
Source: Associated Press

Legislation Would Funnel Fines Paid By

BP To Gulf States
A key Senate committee has approved
legislation, introduced by Sen. Mar y
Landrieu, a Democrat from Louisiana, that
will direct a significant portion of federal
fines paid by BP for the Deepwater Horizon
oil spill to Mississippi and other Gulf Coast
states. The Senate Environment and Public
Works Committee reported S.1400, the
Restore the Gulf Coast Act, out of committee. The legislation now goes to the floor
for consideration by the full Senate.
Sen. Thad Cochran, a Mississippi Republican
and a co-sponsor of the bill, had this to say:
The Deepwater Horizon tragedy will
continue to affect Gulf Coast states
for some time. T his carefully negotiated measure is intended to ensure
that Mississippi and the other states
have resources to overcome those ecological and economic challenges.
Communities on the Gulf Coast were
directly impacted by the Deepwater
Horizon oil spill, and the Clean Water
Act fines that will be assessed should
go to help those communities.
Members across the Gulf Coast developed a balanced solution. I urge Sena-

www.JereBeasleyReport.com

tors on the committee to approve this

important legislation.
The Senate bill would establish the Gulf
Coast Restoration Fund to be made up of
80% of all civil penalties paid by BP and
other parties held responsible for the April
2010 Deepwater Horizon explosion and oil
spill. T he fund would be distributed to
Alabama, Mississippi, Louisiana, Florida and
Texas. T he remaining 20% of the fines
assessed for Clean Water Act violations
would revert to the U.S. Treasury. The bill
follows the recommendations of Gulf Coast
restoration groups following the April 2010
Deepwater Horizon tragedy.
Source: Insurance Journal

III.
DRUG
MANUFACTURERS
FRAUD LITIGATION
Judge Awards $38.2 Million To The
State Of Mississippi
Judge Thomas L. Zebert found in favor of
the State of Mississippi in its lawsuit against
pharmaceutical company Sandoz, Inc. in the
Chancery Court of Rankin County, Miss.,
and awarded $38,191,427.00 in
damages. T
he case, referred to as Mississippi
Medicaid Pharmaceutical Average Wholesale Price Litigation involves allegations that
Sandoz caused to be published inflated
Average Wholesale Prices for the drugs
manufactured by Sandoz, which resulted in
the Mississippi Division of Medicaid reimbursing pharmacies at an inflated price, in
violation of the Mississippi Consumer Protection Act; and the Mississippi Medicaid
Fraud Control Act. Common law fraud was
also alleged.
Mississippi Attorney General Jim Hood
authorized the filing of these lawsuits
against the pharmaceutical companies. Dee
Miles and Clay Barnett, lawyers in our firm,
along with former Mississippi Governor
Ronnie Musgrove from Copeland, Cook,
Taylor and Bush, located in Jackson, tried
the case for three weeks in April. At the
conclusion of the trial, Judge Zebert took
the case under advisement and he now has
made his ruling.
Judge Zebert ruled in favor of the State of
Mississippi on the Consumer Protection Act
and common law fraud claims. Mississippi
was awarded $23,661,618.00 in compensatory damages and $11,830,809.00 in punitive damages. T he judge also awarded
$2,699,000.00 in civil penalties, for a total
8

judgment of $38,191,427.00. In addition,

Judge Zebert entered an injunction against
Sandoz prohibiting the company from using
false AWPs when reporting drug prices to
Mississippi, which is very important.
This is a huge victory for the State of Mississippi for a number of reasons, not the
least of which is, this is the first of some 54
cases Mississippi has filed against the pharmaceutical manufacturers to go to trial. A
win for the State in the first case is huge.
Pharmaceutical companies overcharging
for drugs to the states Medicaid program
a program designed to assist the States
neediest citizensis egregious conduct. We
had reached settlements previously with
several other drug companies which made
this trial, in effect, a benchmark trial. Also
assisting in the preparation and trial of the
case were Roman Shaul, Chad Stewart and
Alison Douillard, all lawyers from our firm.

Other State AWP Settlements

We were in settlement negotiations at
press time on behalf of several of the states
we represent in the AWP litigation. T
o date,
we have settled state claims with a number
of drug manufacturers for the states of Mississippi, Hawaii, Alaska, Kansas, Utah and
South Carolina bringing in for these states
collectively an amount in excess of $300
million. In Alabama, settlements totaling
approximately $130 million have been
reached so far. In addition to the other
states, we are still in settlement negations
with several drug companies in Alabama on
behalf of the states Medicaid program.

IV.
PURELY POLITICAL
NEWS & VIEWS
Hostile Takeover Of The National
Republican Party
From all accounts, it appears the Tea
Party has literally taken over the National
Republican Party and did it without having
to even break a sweat. In fact, it has been so
easy that even the Koch brothers, who got
the so-called movement started, had to be
surprised. All of the candidates who are
seeking the GOP nomination for President
have been forced to retreat from prior positions taken on such issues as climate
change, the economy, healthcare and immigration and now carry the Tea Party banner.
Using the Tea Party, the hostile takeover of

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the GOP was engineered largely by the oil

and pharmaceutical industries.
The takeover led by Koch Industries, the
conglomerate owned by Charles and David
Koch, was so carefully planned and carried
out that the old guard in the party was
unable to stop it. They simply turned over
the reins of the party to politicians like
Rep. Alan Cantor who is against everything
that most folks in America are for. For
example, he wants to abolish the Environmental Protection Agency and pretty much
do away with any type effective regulation
of Corporate America.
As mentioned above, this takeover didnt
just happen without prior planning. A
great deal of work had been done by operatives of the politically powerful companies in Corporate America. For example,
the think tanks funded by the Koch brothers have been hard at work for years,
attempting to change public opinion on
such things as climate change and tax cuts
for the super rich.
An event that hasnt gotten the media
attention it deserved involved the U.S.
Supreme Court. The High Court ruled in its
Citizens United decision that a corporation
had the same constitutional rights as a
human being. Many believe that, as a result
of this decision, the political climate in
America changed overnight. A by-product
of that illogical decision has been a total
corporate takeover of politics on the
national level. Its impossible to understand
how a corporation can have the privileges
of citizens, but none of the obligations that
accompany that privilege. I would like to
hear a constitutional expert explain how
money spent by a corporation can be
equated with speech.
The bottom line is that the Tea Party
now controls the GOP. As a result, the Presidential candidate who survives the primaries and the convention will have had to
bow and scrape to the Tea Party bosses in
order to become the nominee. Having a
nominee in the general election controlled
by the Koch brothers and the Tea Party is a
scar y thought for working men and
women, small business owners, seniors and
minorities. But for the super rich, its just
more good news.

V.
SETTLEMENT OF
THE MONTH
The Ford Settlement
Our firm recently settled two wrongful
death claims against Ford Motor Co. The
case involving the claims was brought on
behalf of the estates of Jacob Tolver and
Henix Hardy, who were both killed in a
single vehicle rollover crash involving a
1992 4 door 4x2 Ford Explorer. The owner
and driver of the vehicle, Mr. Hardy, was
driving about 45 mph when a deer darted
out from the right side of the road. He hit
his brakes and performed an evasive
maneuver in an attempt to avoid the deer
by steering left. As he steered to avoid the
deer, the Explorer went into a clockwise
yaw and rolled over. Both Mr. Hardy, the
driver, and Mr. Jacob Tolver, a front seat passenger, were ejected and killed. At the time
the Explorer rolled over, it was going
approximately 27 mph.
Ford Motor Co. has had a policy in place
since 1973 that vehicles should not rollover
in an emergency maneuver on dry flat pavement. In 1986, Ford sent one of its most
influential executives, Ms. Helen Petrauskas,
to testify before Congress about the high
rate of rollovers that were occurring in Ford
Explorers. Ms. Petrauskas, in response to
intense questioning, confirmed that Fords
internal standard was that a vehicle should
not roll over even in severe handling
maneuvers.
Ford internal documents revealed that
Ford knew before the first Ford Explorer
ever left the assembly line that this vehicle
would roll over on dry flat pavement in
emergency avoidance maneuvers. Ford
engineers, prior to the sale of this vehicle,
ultimately concluded that there were four
fixes required to make the vehicle more
stable. The target date for this Explorer to
hit the market was February 1990. Since
the fixes required to make this vehicle
more stable could not be implemented by
that date, Ford chose to take the risk and
sell it anyway.
When other employees at Ford questioned that decision, management decided
to go forward and took the position that
they would assume the risk. In this case,
Ford gambled and as a result Mr. Hardy and
Mr. Tolver died.Numerous others have also
died because early model Ford Explorers
had a propensity to roll over on dry flat
pavement during emergency avoidance
maneuvers. Incidentally, the early model
Ford Explorers, such as the 1992 model

involved in this case, became the best

selling SUV in the world. LaBarron Boone
and Greg Allen from our firm handled this
case and they did a very good job for the
two families.
Litigation and the court system have
brought about Ford making needed
changes in the Explorer. Its my belief that
our firm, along with others, were able to get
Fords attention.In any event, something
definitely caused Ford to make significant
design changes for the Explorer. The new
Ford Explorers are wider and lower to the
ground, and as a result, less prone to roll
over than earlier models. If you need more
information relating to the rollover potential of the Ford Explorers, or any other
similar vehicles on the road, you can
contact Greg Allen or LaBarron Boone at
1-800-898-2034 or by email at Greg.Allen@
beasleyallen.com or LaBarron.Boone@
beasleyallen.com.

VI.
COURT WATCH
Alabamas New Chief Justice Will Run
For Full Six-Year Term In 2012
Alabamas Chief Justice Chuck Malone
has announced that he will seek a full sixyear term in office. The new Chief Justice,
who served as a Circuit Court judge in Tuscaloosa from 2000 until he became Chief of
Staff for Gov. Robert Bentley in January of
this year, will run in the 2012 election. A
top priority for the Chief Justice in his new
role will be addressing the finances of a
judicial system badly hurt by state budget
cuts. Chief Justice Malone said in a statement:
Many of the challenges we face in the
judicial system can be resolved with
a fiscally conservative budgetary
approach. We can cut unnecessary
expenses and budget conservatively
without sacrificing justice.
The Chief Justice made a major
announcement that was good news for Alabamas court system. He said a full slate of
jury-trial weeks will be reinstated statewide.
In May, Sue Bell Cobb, the former Chief
Justice, canceled about half of the weeks set
aside for jury trials in the state, citing
several state budget cuts to the trial court
system. Circuit judges and court officials
across the state were greatly concerned
that the reduction would slow the administration of justice, especially in criminal

cases, and would hurt those who had civil

claims awaiting trial.

Justice Lyn Stuart Will Seek

Re-Election To The Supreme Court
Alabama Supreme Court Associate Justice
Lyn Stuart has announced that she intends
to run for re-election. Justice Stuart, a
Republican from Baldwin County, has
served on the High Court for two terms.
Her first six-year term on the Court began
in 2000 and she was re-elected in 2006. Her
current term expires in January 2013.
Justice Stuart served as a circuit judge in
Baldwin County prior to coming to the
Supreme Court.

Judge Tommy Bryan To Run For Supreme

Court
Alabama Court of Civil Appeals Judge
Tommy Bryan, a Montgomery Republican,
announced last month that he too is
running for a spot on the Alabama Supreme
Court. Judge Bryan announced his intentions on September 21st at the states judicial building. The Crenshaw County native
is currently serving his second term on the
civil appeals court. He will run for the seat
held by Justice Thomas Woodall, who is not
running for another term.
Judge Bryan has served as a special sitting
state Supreme Court justice and was a staff
attorney for the Alabama Court of Criminal
Appeals. His experience includes serving as
Assistant Attorney General in the environmental department. Judge Bryan is a former
member of the State Republican Executive
Committee and the Montgomery County
Republican Executive Committee, having
served as president of the Montgomery
Republican Club from 2002 to 2003.

Lawsuit Contends Political

Contributions Swayed Judges Decision
An interesting lawsuit has been filed
against State Farm in Tennessee. The case
arises out of a $1 billion class action lawsuit,
involving some most serious charges
against a judge. Its alleged in the lawsuit
that State Farm and its lawyers got an Illinois Supreme Court Justice elected by
pumping $2.5 to $4 million into his campaign through PACs. Its further alleged that
six months later the judge cast a deciding
vote to reverse on appeal a $1.05 billion
class action consumer fraud judgment
against State Farm involving bogus replacement parts for wrecked cars.

www.JereBeasleyReport.com

The Plaintiffs in the case seek to have the

reversal vacated and the original judgment
restored to correct a judgment allegedly
obtained through fraud and concealment.
The Plaintiffs contend that State Farms
extraordinar y financial and political
support for the Justices 2004 campaign
created a constitutionally-unacceptable risk
of bias such that his participation and vote
to reverse the $1.05 billion judgment
deprived the Plaintiffs of their due process
rights. The Plaintiffs had previously
requested the judge to recuse himself from
the case, but that request was refused.
Gorden Bell, a lawyer from Nashville, and
former U.S. Senator Fred Thompson are representing the Plaintiffs in this case. They
have made some very serious charges
against both State Farm and a judge in the
case. It will be most interesting to see how
all of this plays out.

Four years ago, Gov. Rick Perry signed an

order requiring Texas girls to be vaccinated
against the human papilloma virus. Gov.

Perry said he was trying to curb cancer,

but many are questioning his real motivations. In any event, the Texas Legislature put
a stop to the measure and they did the right
thing. But it now appears that Gov. Perry, the
Presidential candidate, hasnt backed down
from his stance that girls should be vaccinated against the virus. He now claims it
wasnt really a mandate, saying he included
the right for parents to opt out of the vaccinations. Minnesota Rep. Michele Bachmann,
who also wants to be President, jumped her
Texas opponent, saying: To have innocent
little 12-year-old girls be forced to have a
government injection through an executive
order is just flat out wrong.
Rep. Bachmann also said that Merck &
Co., the company that makes the vaccine,
employed Mike Toomey, Perrys former
chief of staff, as a lobbyist in Texas, and that
the drug company had donated financially
to Gov. Perrys campaigns. These are two
factors that will result in this issue not
fading away. The recent exchanges mirror
the criticism Gov. Perry took in 2007. It all
began when Merck, which won approval
for the first HPV vaccine a year earlier, was
spending millions lobbying state legislators
to require girls to be vaccinated with the
new product, Gardisil. The company also
was donating money to a national organization called Women in Government, which
in Texas was led by state Rep. Dianne White
Delisi, who chaired the House public health
committee. She was also the mother-in-law
of Perrys chief of staff at the time, Deirdre
Delisithe same woman who now is one
of Perrys top Presidential campaign aides.
Gov. Perry signed an executive order on
February 2, 2007, requiring the vaccination.
It surprised even his allies who acknowledged that it was out of step with his socalled limited-government stance. It was
reported that Texas parents didnt like the
idea of the government telling pre-adolescents they had to be vaccinated against a
sexually transmitted disease. A statewide
requirement for the three-shot vaccine in
Texas at a cost of $360 per vaccine, could
have earned millions for Merck, at the time
the only company with a HPV vaccine on
the market. GlaxoSmithKlines Cervarix was
approved in 2009.
Its my opinion that the serious adverse
effects of Gardisil are much more important
to the public than Gov. Perrys ill-advised
executive order. Over 23,000 adverse
events have been reported, many of these
serious injuries resulting in young girls
developing chronic and debilitating conditions such as multiple sclerosis, rheumatoid
arthritis, lupus, and Guillain Barre Syndrome. Our firm is representing a number
of young girls who have experienced
serious health problems, all of which we are
convinced resulted from the Gardasil

10

www.BeasleyAllen.com

Source: Knoxnews.com

Alabama Supreme Court Says Woman

Can Sue Over Fetus Death
In a decision handed down last month,
the Alabama Supreme Court ruled that a
woman can sue over the death of her
fetus. The wrongful death claim arose out of
a car wreck in 2007 and involved the death
of an unborn child who couldnt have lived
outside the womb. This decision expands
the legal rights for people to sue over the
death of fetuses before they are viable. The
car in which the Plaintiff was riding was
involved in a crash in 2007 and a lawsuit
was filed that involved a wrongful death
claim. The Plaintiff was badly injured and
suffered a miscarriage. She settled her individual claims, but the trial judge dismissed
her wrongful death claim against one of the
drivers last year. The judge said the Plaintiff
couldnt sue because her unborn child
couldnt live outside the womb. The justices overturned that ruling and in a case of
first impression allowed the case to go
forward.
Source: Associated Press

VII.
THE NATIONAL
SCENE
The Texas Vaccine Order By Gov. Perry
Was Wrong

vaccine. Moreover, though Gardasil has

been marketed for the prevention of cervical cancer, the vaccine will not prevent cervical cancer unless the effectiveness of the
vaccine lasts for the lifetime of the girl. The
vaccine has not been proven to last more
than five years. Many scientists believe that
Gardasil will neither prevent cervical
cancer nor reduce the rate of cervical
cancer in the U.S. Governor Perrys
comment that he erred on the side of life
when attempting to mandate Gardasil vaccination appears to be a glib answer from a
politiciannot one based on scientific data.
If you want more information on Gardasil,
contact Leigh ODell, a lawyer in our Mass
Torts Section, at 1-800-898-2034 or by email
at Leigh.Odell@beasleyallen.com.

U.S. Weather Disasters Have Cost

Billions In 2011
As we know, all too well, the U.S. has
been hit very hard by weather disasters
over the past year. A record ten weather
disasters around the country have each
caused at least $1 billion in damages. For
example, while damages and deaths from
Hurricane Irene are still being tallied, the
estimates are running more than $7 billion
with close to 50 deaths from Vermont to
North Carolina. There will be more hurricanes since the season has just started.
We have also seen unparalleled floodings across the country. The Missouri and
Souris Rivers overf lowed in Montana,
North Dakota, South Dakota, Nebraska,
Iowa, Kansas and Missouri, resulting in
over $2 billion in damages. During the
spring and summer, Mississippi River
f looding resulted in near $4 billion in
damages as the river flooded from Tennessee south, and spillways were opened to
flood rural areas to save cities along the
river.
Drought and heat waves have hit Texas,
Oklahoma and neighboring states very hard,
with damages already exceeding the $5
billion mark. Unfortunately, this disaster is
far from over. The damage totals dont take
into account the wildfires that have devastated many states, especially Texas. T he
wildfires in Texas in late August and early
September destroyed over 2,000 homes
and killed a number of people.
Tornadoes that hit the Midwest and
Southeast in May killed 177 and resulted in
more than $7 billion in losses. One tornado
alone killed more than 140 people in Joplin,
Mo., making it the deadliest single twister
since records were started in 1950. Tornadoes also hit hard in the Ohio Valley. The
City of Tuscaloosa, Alabama, was hit hard in

April resulting in 32 deaths and more than

$9 billion in damages.
In mid-April, tornadoes hit from Oklahoma to Pennsylvania resulting in $2 billion
in damage and 38 deaths, mostly in North
Carolina. There was an outbreak of 59 tornadoes in the Midwest and Northeast in
early April. The damages were $2.2 billion.
Fortunately, there were no deaths. Outbreak
of 46 tornadoes in Central and Southern
states on April 4 th5 th, resulted in nine
deaths and $2.3 billion in damages.
Tropical storm Lee, while not a hurricane,
caused a great deal of damage all the way
from Texas to Florida and on up the East
Coast to North Carolina. The damage from
Lee will be huge. A blizzard stretching from
late January until after Groundhog Day, February 2nd, paralyzed cities from Chicago to
the Northeast. The toll was 36 deaths and
more than $2 billion in damages.
I wonder how any thinking person can
say that we are not witnessing the effects of
climate change that has occurred and continues around the world, and certainly in
the U.S. Our political leaders on the national
level, with few exceptions, have sat on their
collective hands and let the powerful oil
and gas industry dictate national policy on
environmental issues and especially the
policy that deals with the causes of climate
change. Many in the scientific community
have been warning us for years, but those
warnings have fallen on deaf ears. We had
best wake up and deal with the most
serious environmental issue facing this
country, as well as other parts of the world.
Instead of further weakening our already
weak regulation of the oil and gas industry
in the U.S., regulation must be made stronger and enforcement more effective. There
must be a similar effort in other countries,
all of whom have a duty and obligation to
get actively involved, and that has to
happen if we are to survive long-term.
Source: ClaimsJournal.com

More Americans Believe The World Is

Warming
More Americans than ever believe that
the world is warming. In fact, there are
many more this year than last who share
that belief. Some say the opinion swing has
been influenced by the Republican Presidential debates. Regardless of what has
caused the shift in opinions, the changes
were found by a Reuters/Ipsos poll in mid
September. The percentage of Americans
who believe the Earth has been warming
rose to 83% from 75% last year in the poll
conducted Sept 8th12th.
U.S. Republican Presidential candidates,
other than Jon Huntsman, have mostly

blasted the idea that emissions from

burning fossil fuels and other human
actions are warming the planet. The current
GOP front-runner, Texas Governor Rick
Perry, has accused scientists of manipulating climate data. Rep. Michele Bachmann,
another of the candidates and a Tea Party
favorite, has said climate change is a hoax.
Both of these candidates ignore science and
act as if they are still in the dark ages and on
this subject they really are. Its difficult to
believe that candidates for President would
make such irresponsible statements.
Reports this year reveal that global temperatures in 2010 were tied with 2005 to
be the warmest year since the 1880s. This is
causing the public to be concerned about
the issue. We can no longer sit back and
ignore what is happening to our planet.
Republican candidates denying climate
change science is actually causing ordinary
folks to realize we have a most serious and
life-threatening problem.
This year has been a record year for the
kind of costly weather disastersincluding
Hurricane Irene, which raked the East
Coastthat scientists have warned would
be more frequent with climate change.
Unlike many other issues that divide Republicans and Democratic voters, such as
healthcare or how to deal with the deficit
and debt, a majority of Americans from both
major parties agree on global
warming. According to the poll, some 72%
of Republicans believe global warming is
happening and 92% of Democrats do, it
found.
Global warming could be an important
issue in next years election, because some
15% of voters see it as their primary concern.
President Barack Obama hasnt really
defined himself as the environmental candidate. If he is able to do this it could have a
large influence on next years election. On
the other hand, if a Republican softens his or
her stance on climate change, and the President, who has failed to pass a climate bill in
his first term, moves more to the center, it
wont be a major factor in the election. T
here
must be a contrast between the Democratic
and Republican candidates for climate
change to be the issue it should be.
Some 71% of the Americans who believe
warming is happening think that it is
caused either partly or mostly by humans,
while 27% believe it is the result of natural
causes, the poll found. While more Americans believe in global warming, the skeptics
are becoming more entrenched in their
belief that it is not happening. In 2010 the
certainty of skeptics was 35%, while it was
53% in 2011.
Source: Insurance Journal

Accenture Settles Lawsuit With U.S.

Department Of Justice
Accenture, a global company, has agreed
with the U.S. Department of Justice to settle
a lawsuit for $63.68 million. The lawsuit,
originally filed in 2006, claimed that in work
for the U.S. federal government, Accenture
received payments, resale revenue or other
benefits through alliance agreements with
technology vendors that were not sufficiently disclosed and that were not allowed
on federal contracts. Interestingly, Accenture was originally based in the U.S., then in
Bermuda, and since September 1, 2009, the
company has been incorporated in
Ireland.

Airline Settles Nations Last 9/11

Lawsuit
After nearly ten years of litigation in a
wrongful death lawsuit, the family of Mark
Bavis, a professional hockey scout killed in
the Sept. 11th terrorist attacks, reached a settlement with United Airlines and its security
contractor. The family was the lone holdout
among the thousands who either accepted
money from the $7 billion Victim Compensation Fund or settled their individual lawsuits. Until now, the Bavis family had refused
to settle its suit. Instead, the family wanted a
trial so it could reveal how woefully inadequate airport security measures were on
the day the hijackers boarded at Logan
International Airport.
Family members attributed their change
of heart about settling to frustration over
the legal system that they say gutted their
case by limiting its scope. Mike Bavis,
Marks identical twin brother, had this to say
about the settlement:
For almost ten years, my family never
even considered the word settle. We
were always going to trial. How that
changed has everything to do with
the court, the legal system, and the
rulings from Judge [Alvin] Hellerstein. T he lawsuit was about wrongful death, gross negligence, and a
complete lack of appreciation for the
value of human life. Instead, the
judge changed it to a case about
federal regulations.
The trial had been set to begin on
November 7th in a federal court in Manhattan. Mark Bavis was one of the 56 passengers who departed Logan International
Airport on United Flight 175, the second
plane to hit the World Trade Center. The
31-year-old Newton resident was headed to
a Los Angeles Kings training camp in Los
Angeles.

www.JereBeasleyReport.com

11

The settlement came 12 days after Judge

Hellerstein ruled on September 7 th that
United Airlines and its security contractor,
Huntleigh USA, had to prove only that they
adhered to federal aviation safety standards,
and didnt have to meet the state standards
of wrongful death that the Plaintiffs
believed applied in their case. The Defense
had asked the judge to dismiss the case. In
response, lawyers for the family filed a brief
with 127 exhibits outlining the evidence
they intended to present at trial. T hat
included depositions obtained from more
than 200 screeners working on September
11, 2001, at Logan, their supervisors, chiefs
of security for the airline, and Federal Aviation Administration officials.
The testimony revealed that the five terrorists who boarded Flight 175 passed
through screeners at United Airlines who
did not speak English (one even required a
translator for her deposition), did not know
who Osama bin Laden was, or what Al
Qaeda was, and were both inexperienced
and underpaid. In addition, many of the
screeners on duty that day did not know
what Mace and pepper spray were. It was
shown by the documents, filed by the
family, that the screeners and their supervisors failed to act on the suspicious behavior
of two of the hijackers, who were let
through security even though they didnt
speak English and could not even respond
to security questions. Additional screening,
the Bavis lawyers allege, would have
included a hand search of their carry-on
bags, which contained knives, Mace, and
pepper spray. If thats good security, airline
passengers were being put at tremendous
risk of harm and even death.
The family felt it had won a victory with
the release of the depositions. The family
was able to accomplish a major goal,
according to Mike Bavis. The family worked
to make public the airlines failure to screen
passengers adequately, hoping to help
improve security and save lives in the
future. On the morning of the attacks, at
least nine screeners were unaware that the
threat level had been raised to a level which
meant terrorists with a known capability to
attack civil aviation were likely to carry out
attacks against U.S. T
argets.
The victims mother, Mary Bavis, and her
six surviving children filed the wrongful
death lawsuit in 2002 against United, Huntleigh, and Massport (which runs Logan
Airport). Judge Hellerstein dismissed the
claim against Massport in July. The familys
lawyer, Donald Migliori of the Motley Rice
law firm, says that the settlement was the
result of the familys frustration with court
delays and rulings, and its relief when the
depositions were finally released. Mike
Bavis said the easiest way to have prevented
the tragedy and horror of 9/11 would have
12

been to have an airline industry that made

a reasonable effort to provide security for
its passengers. He says the evidence shows
that they most certainly did not. The
amount of the settlement is confidential.
Incidentally, the judge had limited the trial
to three weeks.
Source: Boston.com

VIII.
THE CORPORATE
WORLD
More Than A Slap On The Corporate
Wrist Is Needed
All too often those in government believe
a slap on the corporate wrist is enough
when a company commits a massive
wrongdoing. Many believe a settlement
now being pushed by Treasury Secretary
Tim Geithner with the big banks and Wall
Street firms that caused the mortgage crisis
may result in just thatlittle more than a
slap on the wrist of the corporate offenders. To this day, Wall Street bankers havent
faced any serious punishment for the widespread fraud that crashed our countrys
economy. When you consider that they
were peddling bad loans, lying to investors,
forging foreclosure documentsall of
which deserves severe punishmentsits
difficult to understand why more harsh
punishments havent been handed down.
Now these very same banks are making
huge profits again, while homeowners continue to suffer.
Geithner now is asking state Attorneys
General to agree to a sweetheart deal under
which the offending banks would pay only
$20 billiona fraction of what they would
owe if they were really prosecutedand
get immunity from investigation and prosecution. T he criminal greed, wrongful
conduct, and outright fraud by the large
banks that caused this crisis shouldnt be
passed off with a slap on their corporate
wrists. T he proposed settlement would
eliminate any leverage regulators have to
pressure banks to bail out the homeowners they hurt so badly by their misconduct.
The reason this settlement is possible
may be because it has been flying under the
national radar screen. Very little about the
settlement has been mentioned by the
national media which in itself is newsworthy. I dont believe Sec. Geithner and the
Obama Administration should let Wall Street
have a get-out-of-jail free card.
What these huge corporations did was
wrong and they should be punished

www.BeasleyAllen.com

severely. Its estimated that by pushing bad

loans and peddling risky mortgage-backed
securities as safe investments, these banks
cost the world economy over 7 trillion
dollars. Their widespread fraud and corruption also cost millions of hardworking
Americans their jobs and their homes.
Instead of making the wrongdoers pay a
real price for their actions, they are being
protected by our government. Wall Street
was given nearly $2 trillion in loans for the
banks to get back on their feet. That came
as ordinary folks were still struggling to
make ends meet, which just doesnt seem
right in a country like America. T
he victims
of the corporate wrongdoings should be at
the top of the list for governmental assistance, but that hasnt been the case.
There are a number of state Attorneys
General who are standing up to Sec.
Geithner and Wall Street, and are refusing to
settle with the banks until a full and real
investigation exposes the role these banks
and their executives played in the crash of
our housing market and economy. For
example, Eric Schneiderman and Beau
Biden, the Attorneys General of New York
and Delaware, respectively, are holding
strong despite enormous pressure from the
Administration to accept the settlement. I
am told that General Schneidermans insistence that these crimes be investigated and
prosecuted resulted in his being kicked off
the settlement committee. Owning a home
is part of the American Dream, and justice
for homeowners is part of the American
Dream movement. If you agree that the
wrongdoers should be prosecuted and their
victims protected, let your state Attorneys
General know how you feel.

U.S. Sues Big Banks Over Sales Of Bad

Investments
In what I believe is a step in the right
direction, the U.S. government has filed suit
against 17 financial firms, including the
largest U.S. banks, for selling Fannie Mae
and Freddie Mac billions of dollars worth of
mortgage-backed securities that turned
toxic when the housing market collapsed. Among the Defendants in the lawsuits are Bank of America Corp., Citigroup
Inc., JPMorgan Chase & Co., and Goldman
Sachs Group Inc. Large European banks
including The Royal Bank of Scotland, Barclays Bank and Credit Suisse, were also sued
by the government.
The lawsuits were filed by the U.S.
Federal Housing Finance Agency (FHFA),
which oversees Fannie and Freddie, the two
agencies that bought mortgage loans and
mor tga ge secur ities issued b y the
lenders. The total price tag for the mort-

gage-backed securities sold to Fannie and

Freddie by the firms named in the lawsuits
is $196 billion. T he government says it
wants the securities sales canceled and
wants to be compensated for lost principal
and interest payments, as well as for FHFAs
attorneys fees.
Bank of America bought Countrywide
Financial Corp. in 2008 and Merrill Lynch in
2009. All three are being separately sued by
the government for mortgage-backed security sales totaling $57.5 billion. After Bank
of America, JPMorgan Chase was listed in
the lawsuits with the second-highest total at
$33 billion. Royal Bank of Scotland followed
at $30.4 billion.
Bank of America has already paid $12.7
billion this year to settle similar claims. Last
month, insurer American International
Group Inc. sued the bank for more than $10
billion for allegedly selling it faulty mortgage investments. In a statement, Bank of
America has rejected the claims in the governments lawsuits, saying Fannie and
Freddie invested heavily in the mortgagebacked securities even after their regulator
said they didnt have the needed risk-management capabilities. The bank said Fannie
and Freddie are now seeking to hold other
market participants responsible for their
losses.
Residential mortgage-backed securities
bundled pools of mortgages into complex
investments. They collapsed after the U.S.
real estate bust and helped fuel the global
financial crisis beginning in late
2008. According to FHFA, the mortgagebacked securities were sold to Fannie and
Freddie based on documents that contained misstatements and omissions of
material facts concerning the quality of the
underlying mortgage loans, the creditworthiness of the borrowers, and the practices
used to originate such loans. Also sued by
the government were Ally Financial Inc.
(formerly known GMAC LLC), Deutsche
Bank AG, First Horizon National Corp.,
General Electric Co., HSBC North America
Holdings Inc., Morgan Stanley, Nomura
Holding America Inc., and Societe Generale.
There has been some criticism over the
filing of these lawsuits. According to FHFA,
it decided to file the lawsuits because the
firms misrepresented the mortgages in
securities filings. T
he agency said in a statement:
At the heart of the suits is FHFAs conclusion that the actual mortgages
backing many of the securities had
characteristics that differed in a
material way from what had been
represented in securities filings.
FHFA said in its statement that the
amount that might be recovered would be

determined by the courts, and that it was

premature to estimate recoverable
damages. But, it did say that the amount
would be below $200 billion, since that
figure represents the original amount of
securities purchased, not the actual losses
incurred. T he agency takes the position
that under the securities laws at issue in
the case, it does not matter how big or
sophisticated a security purchaser is, the
seller has a legal responsibility to accurately represent the characteristics of the
loans backing the securities being sold.
According to the lawsuits, the securities
should have never been sold because the
underlying mortgages did not meet investors criteria.
Source: Claims Journal

Highest-Paid CEOs Often Earn More

Than Company Pays In Income Taxes
Twenty-five of the 100 highest paid U.S.
CEOs earned more last year than their companies paid in federal income tax, according to a study by the Institute for Policy
Studies (IPS), a Washington think tank. The
study also found many of the companies
spent more on lobbying than they did on
taxes. At a time when lawmakers are facing
tough choices in a quest to slash the
national debt, the report has some very
interesting observations.
Rep. Elijah Cummings, ranking member
of the Committee on Oversight and Government Reform, has called for hearings on
executive compensation. In a letter to the
committees chairman, Rep. Darrell Issa,
Rep. Cummings asked to examine the
extent to which the problems in CEO compensation that led to the economic crisis
continue to exist today. He also asked why
CEO pay and corporate profits are skyrocketing while worker pay stagnates and
unemployment remains unacceptably high,
and the extent to which our tax code may
be encouraging these growing disparities.
In putting together its study, IPS compared
CEO pay to current U.S. Taxes paid. The
study made these findings:
Compensation for the 25 CEOs with pay
surpassing corporate taxes averaged
$16.7 million, according to the study,
compared to a $10.8 million average for
S&P 500 CEOs. Among the companies
topping the IPS list:
eBay, whose CEO John Donahoe made
$12.4 million, but which reported a $131
million refund on its 2010 current
U.S. Taxes.
Boeing, which paid CEO Jim McNerney
$13.8 million, sent in $13 million in

federal income taxes, and spent $20.8

million on lobbying and campaign spending.
General Electric, where CEO Jeff Immelt
earned $15.2 million in 2010, while the
company got a $3.3 billion federal refund
and invested $41.8 million in its own lobbying and political campaigns.
Though the companies come from different industries, their tax breaks fall into two
primary areas. Two-thirds of the firms
studied kept their taxes low by utilizing offshore subsidiaries in tax havens such as
Bermuda, Singapore and Luxembourg. The
remaining companies benefited from accelerated depreciation. Shareholders have
responded favorably when companies in
which they invest keep a tax bill low
through legal methods, thereby benefiting
earnings.
According to Chuck Collins, an IPS senior
scholar and co-author of the report, that is a
mistake. He said that it's an exposure of
weakness in a company if their profitability
is dependent on their accounting department and not on making better widgets." In
prior reports, out-sized CEO pay was often a
red flag of bigger problems to come. The
IPS has been putting a pay report together
for 18 years. Among those whose leaders
have made the high pay list in years past,
only to have their businesses falter, are
Enron and WorldCom.
Source: Huffington Post

Colonial BancGroup Officials Settle

Lawsuit For $10.5 Million
Officers and directors of failed Colonial
BancGroup have agreed to pay investors
$10.5 million to settle a class-action
lawsuit. The settlement must be approved
by the U.S. Bankruptcy Court in Montgomery. That court will decide if the settlement
money can be paid with proceeds from an
insurance policy covering the banks directors and officers. A s has been widely
reported, Montgomery-based Colonial failed
in 2009, was seized by the government as
insolvent, and sold to North Carolina-based
BB&T Corp., which took over the branches
and some of the assets. The shareholders
suit was led by the Arkansas Teacher Retirement System and other pension funds.
Colonial was once the second-largest
bank based in Alabama, with 355 offices in
five states. It collapsed after lending billions to developers and homeowners
during the real-estate bubble, much of it in
Florida and Las Vegas. A ll of the banks
shareholders saw their holdings wiped out
when the company was seized by state regulators in August 2009 and filed for bank-

www.JereBeasleyReport.com

13

ruptcy protection a few days later. T he

Federal Deposit Insurance Corp. initially
estimated the failure would cost its deposit
fund $2.8 billion. Colonials failure is the
sixth largest ever of a U.S. bank. At the end,
13% of loans werent being paid as agreed,
and the company had lost money for five
consecutive quarters, including a final loss
of $600 million.
I understand that is an ongoing criminal
probe by the U.S. Justice Department centering on Colonials mortgage lending and
accounting. T he bank applied for $550
million in funds from the governments
Troubled Asset Relief Program, but the
money was never paid out. Two Colonial
officers, Catherine Kissick and Teresa Kelly,
have been sentenced to prison terms for
their work with a fraudulent mortgage originator in Florida. They both admitted lying
to auditors and regulators. Lee Farkas, the
leader of that Florida mortgage company, is
serving 30 years in prison for the fraud
committed at Taylor Bean & Whitaker.
There is a lesson to be learned from this
sad story and that is, persons who cant be
actively involved in running a large business
should think twice before accepting a parttime position on that companys board of
directors. There were some real good folks
on Colonials board and they unfortunatelybecause of what was done by
othersgot caught up in a very bad ordeal.
Hopefully, this settlement will be approved
and paid by the insurance money now
under the control of bankruptcy court.
Source: AL.com

Boston Scientific To Pay $9.25 Million

In Whistleblower Settlement
Boston Scientific Corp.s Guidant LLC
unit will pay $9.25 million to settle a whistleblowers claim that the company overbilled the U.S. A nd private hospitals for
heart pacemakers and defibrillators. The
U.S. Justice Department said the settlement
ends a lawsuit filed against Guidant by a
former sales agent, Robert A. Fry, in federal
court in Nashville,Tennessee.
It was contended that Guidant reneged
on credits owed to the U.S. Department of
Veterans Affairs for replacement of units
still under warranty and is accused of overcharging hospitals for the devices, causing
them to over-bill Medicare. In a statement
by the Justice Department, it was stated
that overcharging for lifesaving medical
devices wastes taxpayer dollars. Thats certainly very true and is something that cant
be tolerated.

Medicare Fraud Settlement In

Tennessee Whistleblower Suit
In another whistleblower lawsuit,
medical equipment supplier Hill-Rom has
agreed to pay $41.8 million in a Medicare
fraud lawsuit in a lawsuit brought by two
Tennessee whistleblowers. T his is the
largest civil fraud recovery ever by the
U.S. Attorneys Office for the Eastern District of Tennessee. U.S. Attorney Bill Killian
said during a news conference that (h)
ealth care fraud or false claims have become
a very serious problem. This may well be
the understatement of the month!
The two Former Hill-Rom senior account
managers, Lisa Brocco and Laurie Salmons,
filed their sealed complaint in Knoxville in
April 2005. The women said they learned
Hill-Rom was receiving Medicare payments
for specialized equipmentbed support
surfaces for treatment of pressure ulcers or
bed sores- on patients who didnt qualify
for the program. In some cases, they said
claims continued to be submitted although
patients had died or were no longer using
the equipment.
The settlement by Hill-Rom will compensate the Medicare trust fund for the moneys
it paid, claimed and received from 1999
through 2007. Hill-Rom also entered into a
comprehensive five-year Corporate Integrity Agreement with the U.S. Department of
Health and Human Services, Office of
Inspector General to ensure future compliance with federal health care benefit
program requirements. Interestingly, after
the suit was filed, Ms. Salmons was laid off,
but Ms. Brocco is still employed and continues to work for the company.
Hill-Rom, based in Batesville, Indiana, is
one of the largest national medical equipment suppliers. It has a national presence,
including offices in Knoxville and the surrounding area. T he women were represented in this case by David Burkhalter, a
lawyer from Knoxville. He did a very good
job. As a side note, I have to wonder what
it will take to put a stop to all of the fraud
and cheating by large corporations which
do doing business with the federal government. Maybe we should adopt a one strike
and out approach in dealing with the
problem. Until that happens, these contractors will continue to cheat, get caught and
pay fines. T hank goodness the court
system is open and available to deal with
this problem!
Source: wate.com

Source: Bloomberg News

14

www.BeasleyAllen.com

IX.
CONGRESSIONAL
UPDATE
The Publics Approval Of Congress
Matches Record Low
According to all recent polls, members of
Congress face historically low approval
ratings, which should come as no big surprise. A most recent poll revealed that just
12% of Americans now approve of the way
Congress is handling its job. This matches
the all-time low recorded in October 2008
at the height of the economic crisis, according to the New York Times/CBS News poll.
Voters are slightly more disapproving of
Republicans in Congress than they are of
Democrats, with just 19% approving of
Republicans, compared with 28% that
approve of Democrats. Significantly, Republican voters are more dissatisfied with their
partys representatives than are Democrats.
Half of Republican voters say they disapprove of Republicans in Congress, while
43% of Democratic voters say they disapprove of Democrats in Congress. Independents are slightly less approving of
Congressional Republicans than Congressional Democrats.
Interestingly, only 6% of registered voters
say that most members of Congress have
earned re-election, while 84% say its time
to give someone new a chance, which is
said to be a historic low for the New York
Times/CBS poll. Dissatisfaction with Congress runs deep across both parties, with
more than eight in ten of both Republicans
and Democrats saying its time to elect new
representatives. In follow-up interviews,
partisanship and bickering were given as
major reasons for respondents disapproval
of Congress. I believe that the leadership in
both parties should get this message and try
hard to work together for the common
good.
When pollsters asked about voters own
representatives in Congress, they expressed
generally more positive or supportive
views. But public opinion has changed, with
many now saying its time for someone else
to have a chance. Just 33% of voters say
their own representative in Congress
deserves to be re-elected, and 57% say its
time to elect someone elseanother record
level of dissatisfaction.
According to the polls, Democratic and
Independent voters are slightly more frustrated with their own representatives, with
about six in ten of each saying its time for a
new person. This shouldnt be too surprising since Republicans are currently in
control of the House. But nearly half of

Republican voters also say their own representative does not deserve re-election. That
has to be very bad news for a number of
Republicans who have been scared to do
anything that would cause the Tea Party
bosses to be unhappy.
Its certainly possible that the current dissatisfaction with Congress may point to
another change election in 2012. T he
2006, 2008 and 2010 elections were all considered at the time to be referendums on
voters disapproval with things in Washington. The 2012 election for members of Congress has to be a referendum on how voters
perceive the behavior in Congress over the
past two years. No member of Congress
regardless of party affiliationcan feel real
good about the publics anti-incumbent
feelings as evidenced by the Poll results.
Source: New York Times

lead to a significantly increased risk

of ejection. He further testified that
ejection increases the risk of serious
injury or death by six to thirteen
times. The Texas statute only requires
proof of a safer alternative design
that in reasonable probability would
have reduced the Claimants injuries,
which [the experts] testimony adequately provided.
This was a most significant ruling for a
number of reasons. Most folks dont realize
that there is a risk of injury or death when a
front passenger seat is reclined. Most
believe their seat belt will protect them if
for any reason the vehicle they are riding in
is involved in a crash. Also, rollover incident
is not a crash event that untrained people
even think about. Its not something thats
on their radar screen as a rule.
Source: Lawyers USA Online

X.
PRODUCT
LIABILITY UPDATE
Hyundai Liable For Passengers Death
In SUV Crash
The 5th Circuit Court of Appeals ruled
recently that the manufacturer of a sports
utility vehicle can be liable for the death of
a passenger who was ejected from her
reclined seat in a rollover crash. T he
Appeals Court affirmed an $810,000 jury
verdict. The Plaintiffs 19-year-old daughter
died when she was ejected from the front
passenger seat of a 2005 Hyundai Tucson
SUV that rolled over three times in a
freeway crash. The decedent had reclined
her seat before the crash in order to take a
nap.
The Plaintiffs sued Hyundai for design
defect, alleging that the restraint system for
the front seat was defective because it
failed to adequately protect passengers who
reclined their seat at a greater than
45-degree angle. Hyundai argued that the
Plaintiffs could not show that there existed
safer alternative designs for liability under
applicable Texas law. The Appeals Court disagreed, saying:
To succeed on their design defect
claim, the [Plaintiffs] must have
shown that a safer alternativelimiting the seat recline to a 45 degree
anglewould have prevented or significantly reduced the risk of [their
daughters] injuries. The [Plaintiffs] expert testified that seats
reclined more than a 45 degree angle

U-haul Trailers Put Folks Using Them

At Risk
Kendall Dunson, a lawyer in our firm, has
handled a number of lawsuits involving
U-Haul trailers. Recently, Kendall saw a full
size SUV attached to a 6 x 12 U-Haul trailer
in a parking lot. When he did it was clear to
him that a safety problem had been created.
Kendall says it was easy to see that the
U-Haul trailer was at least as large as the
towing vehicle, and probably even
larger. The amount of contents inside the
trailer was unknown and without that information, it was impossible for Kendall to
know the weight distribution between the
loaded U-Haul trailer and the full size SUV.
Even without knowing the weight, his
experience with full-sized SUVs towing
U-Haul trailers told him the driver of the
SUV would put him or herself and others in
danger if the trailer began to sway or fishtail
while travelling at highway speeds.
Now imagine the same 6 x 12 U-Haul
trailer attached and being towed by an even
smaller or Crossover SUV. T he size and
weight disparity is even worse. Our firm
recently filed two wrongful death cases
against U-Haul and other Defendants. In
each suit, a mid-size or Crossover SUV was
towing a 6 X 12 U-Haul trailer. In one case,
the driver was travelling on Interstate 20 in
Alabama heading east. In the other, the
driver was travelling north on Interstate 85.
In each case, the U-Haul towing Crossover
SUV left its lanes of travel, crossed the
median and struck vehicles travelling in the
opposite direction on the highway. T
he I-20
accident resulted in one death when the
driver of the SUV struck an 18-wheeler. The
I-85 accident left three dead as the U-Haul

towing vehicle struck a Ford Explorer head

on, resulting in the additional deaths of two
passengers in the Ford Explorer.
Drivers and passengers of U-Haul towing
vehicles are exposed to the risk of serious
injury or death when the U-Haul trailer
forces the towing units off the road. The
occupants of other vehicles in close proximity are also put at risk when the towing
vehicle goes out of control. Most folks who
rent U-Haul trailers dont have a clue what
they are getting when it comes to safety.
In addition to the two wrongful death
suits being filed, our lawyers have investigated reports of U-Haul trailers causing
other Crossover SUVs to leave the road and
crash. Fortunately for these other drivers
and passengers, guard rails prevented them
from leaving their lanes of travel and striking vehicles travelling in the same or the
opposite direction. Given our experience
with U-Haul incidents, these events are not
surprising. What is surprising is that U-Haul
would recommend and allow its customers
to attach the largest trailer in its fleet to
such small vehicles. We were able to
confirm in one incident that the weight of
the 6 x 12 trailer exceeded the maximum
towing capacity of the towing vehicle even
without any items loaded into the trailer.
U-Hauls practice of recommending and
allowing their trailers to be towed by such
small vehicles evidences a reckless disregard for their customers and for innocent
citizens driving on our roads. We will keep
you updated on these cases. If you need
more information, contact Kendall Dunson,
a lawyer in our firm, at 1-800-898-2034 or
by email at Kendall.Dunson@beasleyallen.
com.

The Chevy HHR Is A Subject Of Safety

Concern
The Chevy HHR has become a subject of
concern in safety circles. NHTSA has
received complaints about a potential
design defect in the Chevy HHR (Heritage
High Roof). The Chevrolet HHR problems
reportedly include difficulty turning the
vehicle off. Chevy HHR complaints have
been filed with the NHTSA by vehicle
owners, who say they incurred high costs
repairing their vehicle. The complaints typically have involved HHR owners having
trouble turning the vehicle off or the key
becoming stuck in the ignition, which can
potentially lead to highway crashes. The
vehicle has not been recalled despite these
reported safety issues. In order to rectify the
problem when the HHR would not shut off,
some HHR owners reported:
disconnecting the vehicle battery to shut
the engine;

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15

 remaining in their parked Chevy HHRs

until their vehicle runs out of gas, which
can take several hours if not a day; and
removing a fuse from the engine.
So far, model years affected by the ignition problem include the 2009 Chevy HHR
and 2009 Chevy Cobalt. Various reports
from Chevy HHR owners indicate that this
is a known problem among car dealers and
garages. So far, Chevrolet/General Motors
has not addressed the problem. Reportedly,
some customers, who have had to have
their vehicles towed to a dealership while
still running, have been informed that the
repair is not covered under their warranty.
It was reported that those customers paid
up to $600 to repair the HHR ignition.
Some 2009 Chevy HHR vehicles have
been recalled, but for completely different
reasons. General Motors Corporation
recalled 2009 model year versions of the
HHR along with a number of others
including the Cobalt and Buick Enclave
due to a potential defect in the shift lever
that could cause the vehicle to roll
away. That recall took place in March of
2009. At the time, a GM spokeswoman said
that no injuries or crashes had been
reported as a result of the shift lever defect
and that dealers had been tasked with
inspecting the vehicles and replacing shift
cables when necessary.
Source: Associated Press

XI.
MASS TORTS
UPDATE

begins to increase significantly. Earlier this

year the FDA required manufacturers to
warn on their labels that an optimal duration of use had not been established. FDA
reviewers, however, concluded:
In light of the potential risks that
may be associated with long-term use
of bisphosphonates for the treatment
and/or prevention of osteoporosis,
the sum of available long-term efficacy data appears to suggest that
bisphosphonate therapy could be
safely discontinued for some period
of time,
The Reproductive Health Drugs Advisory
Committee and the Drug Safety and Risk
Management Advisory Committee recently
held a joint meeting to address these
growing concerns as well as the increasing
data regarding a link between bisphosphonates and esophageal cancer. After reviewing the data the Committees avoided
providing any specific guidance to the FDA,
but did vote (17 to 6) that the FDA should
further clarify the duration of use of the
drugs. A new label is expected to be
released in November. Hopefully, science
will prevail over marketing and the drugs
use will be restricted to no more than five
years. If you need more information on
Fosamax, contact Russ Abney or Chad Cook,
lawyers in our Mass Torts Section, at 1-800898-2034 or by email at Russ.Abney@
beasleyallen.com or Chad.Cook@beasley
allen.com.

FDA Requires Additional Warning For

Reclast

In earlier issues, we initially reported

osteonecrosis of the jaw (ONJ) (sudden
death of jaw bone) being caused by longterm use of Fosamax. T hen, in 2010 we
wrote about the atypical subtrochanteric
(femur) fractures being reported from longterm use of use of bisphosphonates like
Fosamax. Both of these injuries are significant and almost unheard of in non-cancer
patients absent bisphosphonate use.
In the course of pretrial discovery of the
ONJ cases, analysis conducted by FDA
reviewers of the benefit of long-term use of
bisphosphonates was discovered. The conclusion of the FDA reviewer was that
women received no added benefit of taking
Fosamax for more than three to five years.
Interestingly, that is when the risk of developing ONJ and subtrochanteric fractures

After learning of five deaths from acute

kidney failure in 2009 and receiving reports
of 11 additional deaths and nine cases of
kidney failure which resulted in dialysis
treatment, the FDA recently suggested that
the manufacturers of the osteoporosis treatment drug, Reclast, strengthen its warning.
Reclast is a biphosphonate drug like
Fosamax, Actonel and Boniva, designed to
help increase bone density and
strength. The difference between Reclast
and its competitors is that it is administered
intravenously only once a year. The FDAs
new warning suggests that Reclast should
not be used in patients with significant
renal impairment and that physicians
should screen patients for kidney dysfunction before prescribing the drug. In addition
to screening, physicians should also
measure creatinine clearance between
Reclast doses in at-risk patients.
Risk factors that should be considered
prior to prescribing Reclast include
advanced age, concurrent treatment with

16

www.BeasleyAllen.com

Data On Fosamax Fail To Support Long

Term Use

other kidney-damaging drugs, and dehydration secondary to fever, sepsis, gastrointestinal losses, or diuretic therapy. The generic
form of Reclast, zoledronic acid, is also sold
in a different formulation under the brand
name Zometa. However, Zometa already
carries warnings about renal toxicity in
patients with impaired kidney function. If
you need more information on this subject,
contact Danielle Mason, a lawyer in our
Mass Torts Section, at 1-800-898-2034 or by
email at Danielle.Mason@beasleyallen.com.
Source: FDA

Chantix Injury Lawsuits Moving

Forward In The MDL
The litigation over Chantix filed by individuals who allege that the smoking cessation drug caused users to commit suicide or
suffer serious injury due to psychological
side effects, is moving forward. Hundreds of
Chantix injury lawsuits are consolidated as
part of an MDL, or multidistrict litigation, in
the U.S. District Court for the Northern District of Alabama, where the cases are being
coordinated during pretrial proceedings by
U.S. District Judge Inge Johnson.
All of the complaints involve similar allegations that side effects of Chantix, a
popular prescription medication sold by
Pfizer to help people stop smoking, may
increase the risk of serious injury or death
due to suicidal thoughts and other unusual,
aggressive behavior that has been reported
to occur in some users after taking the medication. According to a prior case management order, a small group of cases have
been selected for inclusion in an initial discovery pool, which will be prepared for
early trial dates in the MDL, known as bellwether trials. In complex litigation involving a large number of claims with similar
allegations, such trials are often helpful in
allowing the parties to gauge how juries are
likely to respond to evidence and testimony
that will be presented throughout many
cases in the litigation.
While the first Chantix trials are not
expected to begin until the second half of
2012 at the earliest, pretrial discovery is
already underway. Judge Johnson has
ordered Pfizer to turn over a number of
documents to the Court for review in
camera. The drug maker has claimed the
documents contain privileged information.
Chantix (varenicline) was approved in the
United States by the FDA in 2006 as a prescription medication to help people quit
smoking. The drug works by reducing the
positive feelings that come from cigarettes,
blocking the receptors in the brain commonly stimulated by nicotine. However, the
impact of the drug on the brain has resulted

in a number of reports from users who

experienced sudden, unusually aggressive
behavior, thoughts of self-harm and suicide.
In June 2009, the FDA added a black
box warning to the medication about the
potential risk of changes in behavior,
depression and suicidal thoughts, which is
the strongest warning that can be placed on
a prescription medication in the United
States. Most of the Chantix injury lawsuits
currently filed allege that Pfizer failed to
adequately research their medication or
warn about the risk of these problems
earlier. This year, the FDA also issued a drug
safety communication about the potential
risk of heart problems from Chantix,
warning that the smoking cessation drug
might increase the risk of certain cardiovascular events, including the risk of heart
attack, among individuals who had cardiovascular disease.

Judge To Push For Settlement In Yaz

And Yasmin MDL
U.S. District Court Judge David R.
Herndon, the federal judge presiding over
Yasmin and Yaz multidistrict litigation, is formulating a plan which he believes will help
the parties reach a settlement. Judge
Herndon made this most interesting observation in his order:

addition to advising the parties of his plans

to come up with a settlement process, also
denied a request by the Plaintiffs to consolidate cases for the second and third bellwether trials. T
he second trial will involve a
gallbladder injury allegedly caused by Yaz,
and the third trial will involve a venous
thromboembolism. If you want more information you can contact Roger Smith or
Leigh ODell, lawyers in our Mass Torts
Section, at 1-800-898-2034 or by email at
Roger.Smith@beasleyallen.com or Leigh.
Odell@beasleyallen.com.
Source: Lawyers USA Online

Deadline Approaches For Certain FenPhen Claims

There is a December 31st deadline in the
fen-phen litigation for certain individuals
who may be eligible for additional cash payments from the $4.8 billion nationwide
class settlement involving the recalled diet
drug. Drug maker Wyeth has agreed to
make payments to class members with
certain qualifying medical conditions if
those conditions occur and are diagnosed
by the earlier of December 31, 2011, or 15
years from the date of their last diet drug
use. Kip Petroff, a lawyer from Dallas, stated
in a news release:

The court has no intention of presiding over anything into eternity, let
alone this litigation, and the court is
presently working on a process that
will engage the parties in settlement
discussions following the bellwether
trials in a meaningful way.

Unless class members see a physician

to evaluate their heart health and
have any necessary surgeries before
the 2011 deadline, they could miss
out on the money they deserve to
deal with the debilitating, life-long
health issues stemming from taking
fen-phen.

More than 6,000 federal lawsuits have

been filed against Bayer Corp. over Yaz and
Yasmin birth control pills, alleging that the
company failed to warn about risks posed
by new ingredients in the oral contraceptives. T he Plaintiffs claim injuries that
include deep vein thrombosis, gallbladder
damage, kidney stones, heart attacks, pulmonary embolisms and strokes.
Judge Herndon, who oversees the multidistrict litigation in the U.S. District Court
for the Southern District of Illinois, has
decided to allow case-specific discovery in
up to 100 cases in addition to the 24 cases
to be heard in upcoming bellwether
trials. The first bellwether trial had been
scheduled to begin in September, but the
trial schedule was revised in a May status
conference. Under the new bellwether trial
schedule, the first trial will now begin in
January 2012 and will involve a pulmonary
embolism allegedly caused by Yaz.
Other trials are scheduled for April and
June of 2012. Judge Herndons order, in

The American Home Products Settlement

Trust was created in September 2000 to
resolve a nationwide class action brought
by Claimants who suffer from valvular heart
disease as a result of taking Pondimin and
Redux, a diet-drug cocktail known as fenphen. About six million prescriptions for
the diet drugs were written before American Home Products (now Wyeth) pulled
fen-phen off the market in 1997 after
reports that the drug combination caused
heart valve problems. The original $3.75
billion settlement became final in 2002. The
settlement trust has been swamped with
claims since that time.
Wyeth later agreed to pay more than $1
billion to address certain claims left unresolved by the original settlement. Class
members who may be affected by the
December 31st deadline include those who
need heart valve surgery or have had valve
surgery, those who are candidates for valve
surgery but who may not know it, and the

relatives or heirs of fen-phen victims who

have died.
Source: Lawyers USA Online

More Lawsuits Filed Against Alcohol

Wipes Company
A number of lawsuits have been filed
against the Triad Group, a Wisconsin
medical products manufacturer, over its
contaminated alcohol wipes. T he latest
lawsuit, filed in federal court in Tennessee,
contends Triad and its sister company, H&P
Industries, knowingly distributed the contaminated wipes. The U.S. Food and Drug
Administration shut down the Hartland
plant in April. The company denies the allegations and says it has complied with
federal regulations.
The latest lawsuit was filed by a Tennessee resident, Mitchell Gold, who says he
was hospitalized after getting sick from the
companys contaminated wipes and has
ongoing health problems as a result. According to media reports, two people named in
previous lawsuits have died, including a
two-year-old boy in Houston,Texas.
Source: The Journal Sentinel

XII.
BUSINESS
LITIGATION
An Overview Of Antitrust Litigation
Our firm remains actively involved in
antitrust cases around the country. With the
economy as tough as it is, companies are
finding their competition tougher as
well. As a result, companies are doing whatever they can to remain or become competitive. Some of these actions cross a line and
are targeted by national competition laws,
such as the Sherman Antitrust Act, Clayton
Antitrust Act, Robinson-Patman Act, and the
Federal Trade Commission Act. Additionally,
all states have their own antitrust laws,
many of which are similar or identical to
federal antitrust statutes and are interpreted
by the state courts to be consistent with
federal law.
Our firm has filed suit against Astellas US,
LLC, alleging violation of Federal and
Florida state antitrust laws by Astellas, a
global top-twenty pharmaceutical company.
We represent Lakeland Regional Medical
Center, an outstanding non-profit hospital
located in Lakeland, Fla. Our suit was filed
as a class action and seeks to represent hospitals and clinics nationwide that have been

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17

damaged due to Astellas anticompetitive

behavior. The case is pending in the middle
district of Florida.
The suit relates to the use of adenosine, a
naturally occurring substance, used in connection with cardiac stress tests. These relatively routine tests are conducted daily at
Lakeland Regional and at hundreds of hosp i t a l s a n d cl i n i c s t h ro u g h o u t t h e
country. Astellas has violated antitrust law
by illegally tying the purchase of Astellas
unpatented adenosine drug, Adenoscan, to
the purchase of its patented method of
administering adenosine to patients. In
other words, Astellas will not let Lakeland
Regionals doctors use its method of adenosine administration unless Lakeland
Regional also purchases Adenoscan at an
inflated price.
Identical generic adenosine is available at
one-fourth the price of Adenoscan, but
Astellas will not allow Lakeland Regional
and other hospitals and clinics to purchase
the generic product. Astellas has gone so far
as to threaten patent infringement litigation
against Lakeland Regional and other hospitals and clinics that have sought to purchase identical, but less expensive, generic
adenosine. This case is a good example of
how pharmaceutical companies are driving
up the cost of healthcare in this country, as
this conduct by Astellas costs Lakeland
Regional alone approximately $500,000
annually. The excess costs to hospitals and
clinics nationwide run into the hundreds of
millions of dollars!
In August, the District Court judge denied
Astellas motion to dismiss the lawsuit, and
all allegations against the company survive
as we move towards class certification.
Contact Archie Grubb, a lawyer in our Consumer Fraud Section, at 1-800-898-2034 or
by email at Archie.Grubb@beasleyallen.com
if you have any questions about this case, or
about our firms antitrust litigation practice.

wide ignored its own mortgage underwriting guidelines when issuing those loans.
According to the lawsuit, Countrywide
agreed to repurchase loans within 90 days if
any of the statements made in the loan contract wound up being untrue. Those statements included an assertion that the loans
complied with the banks underwriting
guidelines. U.S. Bancorp says Countrywides
loans began to become delinquent and
default at a startling rate, soon after it sold
the loans. U.S. Bancorp has asked the court
to ask Countrywide to repurchase either
just the defective loans or all of the loans in
the pool.
A U.S. Bancorp spokesman,Thomas Joyce,
said the bank filed the lawsuit as a trustee
on behalf of several investors who bought
the loans, but he wouldnt identify the
number of investors the bank represents. As
reported, the nations largest bank is facing
several other lawsuits. In August, American
International Group Inc. sued the bank for
more than $10 billion, claiming Bank of
America deceived the insurer by selling it
faulty mortgage investments. Bank of
America has already paid a total of $12.7
billion this year to settle similar claims.
Source: WSFA TV News

Jury Rules For DuPont In The Kevlar

Trade Secrets Case

We have written in prior issues about the

large number of lawsuits that have been
filed against Bank of America Corp. And it
doesnt appear its problems are over. Currently, there is much more to report. A suit
filed by U.S. Bancorp against Bank of
America is seeking to have the bank to
repurchase poorly-written mortgages sold
by Countrywide Financial in 2005. As we
have reported, Bank of America bought
Countrywide Financial Corp. in 2008. The
latest lawsuit, filed in New York, claims
Countrywide sold U.S. Bancorp a pool of
over 4,000 loans originally valued at $1.75
billion. U.S. Bancorp claims that Country-

A U.S. federal jury has awarded DuPont

$919.9 million in damages, ruling that a
South Korean company stole trade secrets
for a fiber used to make Kevlar bulletproof
vests. T he Richmond, Va., jury ordered
Kolon Industries Inc. To pay the damages
after finding the textile company willfully
and maliciously stole trade secrets and confidential information regarding its Kevlar
para-aramid fiber. In addition to body armor,
the fiber is also used to make tires and fiberoptic cables.
DuPont will ask U.S. District Judge Robert
Payne, who presided over the seven-week
trial, to require Kolon to stop selling products based on the trade secrets. The case
was filed in February 2009 after Michael
Mitchell, a 24-year DuPont veteran, left the
company in 2006 to start his own fiber
business, according to DuPonts Complaint.
Kolon later began working with Mitchell
and extracted proprietary information
about Kevlar he had taken from DuPont, the
Complaint said.
DuPont sells more than 70% of para-aramid fibers purchased in the United
States. T he Wilmington, Delaware-based
company also makes products used in the
chemical, agriculture and biotechnology
industries. DuPont said it has not tried to
estimate how much it lost in sales, and is

18

www.BeasleyAllen.com

Bank Of America Sued By U.S. Bancorp

Over Mortgages

not projecting whether sales might now

rise. DuPont says the issue was the billions
of dollars we invested in developing it, and
someone trying to shortcut by stealing our
technology.
Source: Insurance Journal

Alabama Aircraft Industries Files Suit

Against Boeing Co.
Alabama Aircraft Industries, located in
Birmingham, has filed a suit against its
former partner Boeing Co., claiming the
defense contracting giant won a $1.1 billion
Air Force contract by stealing proprietary
information stemming from a joint venture
between the firms. Alabama Aircraft, which
is coming out of bankruptcy, filed the suit in
Jefferson County Circuit Court. Alabama Aircraft, which in recent months employed
about 325 people, was bought by Virginiabased Kaiser Holdings Group while in
Chapter 11 bankruptcy. The new owners
cut about 200 jobs from the plant, leaving a
work force of about 118 people.
The Boeing lawsuit arises out of the
battle for a U.S. Air Force contract to maintain KC-135 aerial refueling tankers. During
that time, Boeing and Alabama Aircraft were
partners on the maintenance. Before that,
Alabama Aircraft was the main contractor,
going back to 1969. But for the new 2008
contracta deal worth $1.1 billion
Boeing was the sole winner over Alabama
Aircraft. Now, the Alabama company is alleging unfair tactics in the bidding and award
process. A mong other claims, the suit
alleges:
Boeing was throughout this relevant
time period a lawbreaker and chiseler of the government and its business partner, and engaged in patterns
of misconduct.
These are very serious charges made
against a giant in the government contracting business. A Boeing spokesman says the
lawsuit is without merit and is only a
re-hash of earlier attempts to get the
KC-135 contract stripped from the Chicagobased company. The spokesman had this to
say about the suit:
Allegations raised by Alabama Aircraft Industries Inc. in a state lawsuit
filed on Friday against the Boeing Co.
over the U.S. Air Force KC-135 Programmed Depot Maintenance contract award are baseless. T his seems
to be an attempt by Alabama Aircraft
to re-litigate claims that have already
been denied after a thorough review
over a 30-month protest of the contract with the Government Account-

ability Office, the U.S. Court of Federal

Claims and the U.S. Court of Appeals.
Boeing is the second-largest U.S. defense
contractor, with revenue last year of $65
billion. Alabama Aircraft, formerly known as
Pemco Aeroplex, had annual revenue of $54
million the last time it filed Securities &
Exchange Commission financial statements
in 2007. Haskell Slaughter Young & Rediker,
a Birmingham law firm, is representing
Alabama Aircraft in the suit. Among the allegations in the lawsuit, which seeks unspecified damages to include lost profits and
punitive damages against Boeing, the
company claimed:
That Boeing lied to Alabama Aircraft
during their joint venture by saying
Air Force budget constraints meant
the government could only pay $3.25
million for the refurbishing of each
KC-135, depriving the Alabama
company of the opportunity to earn
more from the contract. Boeing,
meanwhile, billed the Air Force for
Alabama Aircrafts sub-contracting
work at a higher rate and pocketed
the difference. That Boeings promise
to include Alabama Aircraft as a 50%
subcontractor on a new KC-135 contract was a ruse designed only to get
the larger company an up-close look
at the smaller ones shop techniques,
and to sideline it as a competitor for
the work.
That Boeing withheld parts during
the joint venture on KC-135 work, to
prevent Alabama Aircraft from completing planes ahead of schedule and
earning bonus payments. Alabama
Aircraft filed for bankruptcy protection in February, citing $70 million
owed to a union pension plan.
Mike Rediker, a very good and experienced litigator, will be the lead lawyer for
the Plaintiff in the case. It will be interesting
to watch the developments as this lawsuit
goes through the system.
Source: Associated Press

Halliburton Will Pay $200 Million For

Defective Bolts
An arbitration panel has ruled that Halliburton Co. must pay Barracuda & Caratinga
Leasing Co. $200 million. This came as a
result of a claim Barracuda filed against KBR
Inc., a former Halliburton subsidiary. Before
KBR was spun off from the Houston oil services company in 2007, it had a contract
with Barracuda & Caratinga for the develop-

ment of the Barracuda and Caratinga oil

fields off the coast of Brazil.
Barracuda & Caratinga later claimed that
certain subsea bolts used in the project
were defective. T he arbitration panel
recently ruled that KBR is liable for the cost
of replacing the bolts. Halliburton says its
pursuing all possible avenues to appeal
the ruling. It appears that when Halliburton
and KBR split, Halliburton agreed to pay all
the costs and expenses, cash settlements or
cash arbitration awards, related to the
replacement of the bolts.
Source: Claims Journal

XIII.
AN UPDATE ON
SECURITIES
LITIGATION
Lawsuit Claims HP Executives Misled
Investors
Richard Gammel, a Hewlett-Packard Co.
shareholder, has filed suit against the
company. HP, the worlds largest technology
company, is accused of concealing the fact
that its existing business model was not
working and that webOSthe operating
software it inherited after buying Palm
was no longer central to its business model.
ech giant announced
On Aug. 18th, the U.S. T
that it was considering a spinoff of the
worlds largest PC business, killing off
webOS devices such as the TouchPad, and
buying British software company Autonomy
Corp. for $12 billion. T
he lawsuit seeks class
action status.
Shares of the company fell 20% the following day, marking their biggest single-day
drop since the Black Monday stock market
collapse of 1987. The lawsuit, filed in U.S.
District Court, accuses HP executives,
including CEO Leo Apotheker and CFO
Cathie Lesjak, of misleading investors by
making positive statements about the companys performance that later proved
unfounded. The lawsuit seeks to recover
unspecified damages on behalf of any who
bought into HP between November 22,
2010, and August 18th of this year, arguing
that the lack of disclosure about potential
issues means its shares were artificially
inflated.
Source: Insurance Journal

XIV.
INSURANCE AND
FINANCE UPDATE
Countrywide To Pay $108 Million For
Overcharging Struggling Homeowners
The Federal Trade Commission and two
Countrywide mortgage servicing companies have reached a settlement to resolve
FTC charges. T he two companies have
agreed to pay $108 million to settle charges
that the companies collected excessive fees
from cash-strapped borrowers who were
struggling to keep their homes. This settlement is one of the largest ever imposed in
an FTC case. The settlement funds will be
used to reimburse the overcharged homeowners whose loans were serviced by
Countrywide before it was purchased in
July 2008 by Bank of America.
The Complaint filed by the FTC alleged
that Countrywides loan-servicing operation
deceived homeowners who were behind
on their mortgage payments into paying
inflated fees, and in each instance those
fees could add up to hundreds or even
thousands of dollars. Many of the homeowners had taken out loans that were
either originated or funded by Countrywides lending arm. This included, according to reports, subprime or nontraditional
mortgages such as payment option adjustable rate mortgages, interest-only mortgages, and loans made with little or no
income or asset documentation.
The responsibilities of mortgage servicers include the day-to-day management
of homeowners mortgage loans, including
but not limited to the collecting and crediting of the borrowers monthly loan payments. Unfortunately, homeowners cannot
choose who services their mortgage. In
March 2008, and prior to being acquired by
Bank of America, Countrywide was ranked
as the top mortgage servicer in the United
States with a balance of more than $1.4 trillion in its mortgage servicing portfolio.
In instances where homeowners fell
behind on their payments and were in
default on their loans, Countr ywide
promptly ordered property inspections,
lawn mowing, and other services meant to
protect the lenders interest in the property.
However, rather than simply hiring thirdparty vendors to perform those services,
Countrywide created subsidiaries to hire
the vendors. In doing so, the subsidiaries
marked up the price of those services
charged by the vendorsoften by 100% or
moreand Countr ywide would then
charge the homeowners those inflated fees.
Countrywides strategy was to increase

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19

profits from default-related service fees in

bad economic times. As a result, even as the
mortgage market collapsed and more
homeowners fell into delinquency, Countrywide made huge profits by funneling
default-related services through subsidiaries
that it created solely to generate
revenue. This sort of conduct should shock
even my Tea Party friends!
According to the FTC, as it relates to
those default-related services, homeowners
must pay for any necessary services under
most mortgage contracts, but mortgage servicers cant mark up the cost to make a
profit or charge homeowners for services
that are not reasonable or appropriate to
protect the mortgage holders interest in
the property. Homeowners have no choice
in who performs default-related services or
the cost of those services, neither do they
have an option to shop around for those
services.
Additionally, in servicing loans for borrowers trying to save their homes in
Chapter 13 bankruptcy proceedings, Countrywide made false or unsupported claims
to borrowers about amounts owed or the
status of their loans. Countrywide also
failed to tell borrowers in bankruptcy when
new fees and escrow charges were being
added to their loan accounts. Lastly, the FTC
alleged that after the bankruptcy case
closed and borrowers no longer had bankruptcy court protection, Countrywide
would then unfairly attempt to collect all of
those fees and charges. In some cases Countrywide actually attempted to do this
through the foreclosure process.
For more information about the case and
the FTCs refund program, you can go to
www.ftc.gov/countrywide. Also, if you have
any questions about predatory lending or
mortgage servicing fraud, contact Bill Robertson, a lawyer in our firms Consumer
Fraud Section. Bill is currently handling
cases against Countrywide and other companies involving predatory lending practices. He is also handling mortgage servicing
fraud cases involving several different companies. You can reach Bill at 1-800-898-2034
or by email at Bill.Robertson@beasley
allen.com.
Source: FTC

Lloyds Syndicate Sues Saudi Arabia

Over 9/11 Claims
Lloyds of Londons Syndicate 3500 has
filed a lawsuit in federal court against Saudi
Arabia, several Saudi charity and financial
organizations and prominent Saudi individuals over the 9/11 terror attacks. According
to the insurer, Saudi Defendants bear
primary responsibilty for the attacks and
20

should be responsible for $215 million it

paid out in claims. The Complaint names as
Defendants the Kingdom of Saudi Arabia,
The Saudi High Commission for Relief of
Bosnia & Herzegovina, Saudi Joint Relief
Committee for Kosovo and Chechnya,
Saudi Red Crescent Society, National Commercial Bank, and Al Rajhi Banking and
Investment Company. A lso included as
Defendants are three Saudi citizens connected to these organizations: Prince
Salman Bin Abdul Aziz Al Saud, Suleiman
Abdel Aziz Al Saud and Yassin Al Qadi. The
lawsuit was filed in the U.S. District Court
for the Western District of Pennsylvania. It
is alleged in the Complaint:
Each of the defendants named herein
was a knowing and material participant in al Qaedas conspiracy to
wage jihad against the United States,
its nationals and allies.
Pursuant to the terms of the applicable
policies of insurance, Lloyds Syndicate
3500 made 9/11-related claims payments on
behalf of its liability insureds towards the
individual settlements in an amount in
excess of $215 million, according to the
Complaint. These liability insureds included
airlines, airport authorities, security companies, airplane manufacturers and other
parties. Those who received settlements
included individuals injured from the 9/11
attacks and families of individuals killed in
the attacks, as well as businesses that suffered economic losses.
The insurer charges that these Saudi
Defendants knowingly provided material
support and resources to al Qaida in years
leading up to 9/11. The lawsuit says without
Saudi Arabias assistance, the terrorists
would not have been able to carry through
their plan. It is alleged in the Complaint:
Absent the sponsorship of al Qaedas
material sponsors and supporters,
including the defendants named
herein, al Qaeda would not have possessed the capacity to conceive, plan
and execute the September 11 th
attacks. T he conspiracy among the
defendants to wage jihad against the
United States, its nationals and allies,
included the provision of material
support and resources to defendant
al Qaeda and affiliated terrorist organizations, persons, and entities. T he
success of al Qaedas agenda, including the September 11th attacks themselves, has been made possible by the
lavish sponsorship al Qaeda has
received from its material sponsors
and supporters over more than a
decade leading up to September 11,
2001.

www.BeasleyAllen.com

Interestingly, the insurer filed the lawsuit

in Western Pennsylvania, a region where
United Airlines Flight 93 crashed during the
9/11 attacks. The lawsuit attempts to establish concrete links between Saudi charity
organizations and al Qaida and explain how
the Saudi government supported al Qaida
through these charity organizations. The
Plaintiffs Complaint alleges:
B e t we e n 1 9 9 8 a n d 2 0 0 0 , t h e
Kingdom of Saudi Arabia, through
Saudi Joint Relief Committee for
Kosovo and Chechnya, diverted more
than $74 million dollars to al Qaeda
members and loyalists affiliated with
Saudi Joint Relief Committee for
Ko s ovo
and
Chechnya
bureaus. T hroughout this time, the
committee was under the supervision
and control of Saudi Interior Minister
Prince Naif Bin Abdul Aziz.
The case is Underwriting Members of
Lloyds Syndicate 3500 v. Kingdom of Saudi
Arabia, U.S. District Court, Western District
of Pennsylvania. We will monitor this case
as it proceeds. It should be very interesting
to see how it develops.
Source: Insurance Journal

Insurer Files Suit To Avoid Paying Claim

Over Nebraska Pastors Death
Church Mutual Insurance Co., an insurance company specializing in policies for
churches, has asked a federal court to
absolve it from paying a claim by the
widow of a central Nebraska pastor who
died of carbon monoxide poisoning in a
house owned by the church he led. John
Green, who had been pastor of Clay Center
Christian Church for 23 years, was found
dead in the home on November 19, 2009.
His wife, Cheryl, was found unconscious
and was f lown to an Omaha hospital. According to the authorities, the pair
had been poisoned by a carbon monoxide
leak from the homes heating system.
Cheryl Green had planned to file suit
against the church in an effort to get its
insurer to pay nearly $260,000 in lost
wages, as well as more than $55,000 for
medical bills incurred by the poisoning and
$10,000 for funeral expenses. But Church
Mutual Insurance Co. filed its own suit in
federal court and is taking the position that
the churchs policy excludes coverage for
carbon monoxide and other pollutants.
Church Mutual claims the exclusion
means the insurer shouldnt have to pay the
claims. Even the lawyers representing Clay
Center Christian Church dispute that and
say Church Mutual is jumping the gun and
filing this case to try and escape their

responsibility to live up to their obligations

under the policy. Jeff Downing, a lawyer
who represents the Church, says that
Cheryl Green is still a loved and cared-for
member of the church who should not
have to fight an insurance company to
cover the costs of losing her husband. He
also made this interesting observation:
Church Mutual tout themselves as the
largest insurer to church congregations, and their website fairly well
documents that point. One of the
ways they do that as by marketing
themselves as a company that at
every point of contact creates a relationship thats about more than just
business. We believe they should be
held to that representation.
The insurance companys filing of its
own lawsuit is a typical tactica pre-emptive strikewhen an insurance company is
trying to get out of paying a claim. Its a
tactic that has been utilized by a number of
companies that we have dealt with. When it
happens, the insured, who in many cases is
dealing with an adjuster when the company
files suit without warning, is shocked. In
this case, Church Mutual filed its own suit
before Cheryl Green and the church could
file their own lawsuits against the company.
Source: Insurance Journal

XV.
EMPLOYMENT AND
FLSA LITIGATION
Judge Approves $1.5 Million Terminix
Settlement
A federal judge in San Francisco has
approved a $1.5 million settlement for
more than 1,200 employees of Terminix,
the giant pest-control company, who contended they were wrongfully denied overtime. The employees alleged in a May 2008
lawsuit that they worked long hours
without overtime, rest breaks and meal
periods while out on termite inspection
calls. All of the employees were training to
be termite inspectors.
Terminix claimed that since termite
inspections were actually sales activities,
they werent subject to state overtime regulations. Also, it said the inspections are often
free. Terminix makes money if the potential
customer agrees to buy follow-up services
or products. U.S. District Judge Susan Illston,
who rejected the companys argument in
June, has now approved the settlement. I
found the Terminix argument that inspec

tions were actually sales activities to be

most interesting. I always thought the
inspection by Terminix and other pest
control companies were to find out if a
structure had a termite problem.

Tyson Food Paying $32 Million To

Settle Safety Gear Lawsuit
Tyson Foods Inc. will pay $32 million to
settle a long-running dispute over whether
it should compensate poultr y plant
workers for time they spend putting on and
taking off protective clothing. In a consent
decree filed in U.S. District Court in Columbus, Ga., Tyson agreed to make payments
averaging around $1,000 per worker to
about 17,000 current and former employees around the country. This case has been
in court for 12 years.
The workers accused Tyson of violating
the Fair Labor Standards Act by failing to
pay them for time spent putting on and
taking off gear they were required to wear
to protect themselves and the poultry. T
he
union, which helped bring the lawsuit, said
that current and former Tyson workers
would receive payments averaging about
$1,000. A federal district judge in Georgia
has approved the settlement.
Workers who sued the Springdale, Ark.based company claimed meatpacking and
fo o d p r o c e s s i n g e m p l o y e e s w e r e
deprived of thousands of dollars in lost
pay for time they spent donning and
doffing safety gear. Tyson settled a similar
dispute last year with the Labor Department by agreeing to change its compensation policy. T he company has 117,000
workers worldwide. This settlement was
announced by the United Food and Commercial Workers Union.
In an effort to help workers who have
been wrongly denied their overtime compensation, lawyers in our firm routinely
pursue class action litigation under the Fair
Labor Standards Act to recover unpaid overtime wages. For more information on this
subject, contact Larry Golston, a lawyer in
our Consumer Fraud Section, at 1-800-8982034 or Larry.Golston@beasleyallen.com.
You can also visit our website at www.
beasleyallen.com.

XVI.
PREDATORY
LENDING
Foreclosing Lender May Be Liable For
Consumer Fraud
The New Jersey Supreme Court has ruled
that a home lender may be liable for consumer fraud law based on its allegedly
breaching of agreements to forbear on foreclosure proceedings. The Court reversed
dismissal of the case by a lower court. The
Defendant held a mortgage on the Plaintiffs home and when the Plaintiff became
delinquent on her payments, the Defendant
obtained a judgment of foreclosure.
Before a sheriffs sale was held, however,
the parties entered into successive agreements under which the Plaintiff agreed to
make certain payments to eliminate her
arrearage. In exchange, the Defendant
promised to dismiss the foreclosure action
once the Plaintiff became current on her
mortgage payments. T he Plaintiff sued
under the states consumer fraud statute
when the Defendant allegedly threatened
foreclosure despite her alleged compliance
with the terms of the forbearance agreements.
The Defendant argued that the states
consumer fraud law did not apply to postjudgment settlement agreements entered
into to stave off a foreclosure sale. T he
Court disagreed, stating:
We hold that the post-foreclosure-judgment agreements in this case were
both in form and substance an extension of credit to the plaintiff originating from the initial loan. Fraudulent
lending practices, even in a post-judgment setting, may be the basis for a
Consumer Fraud Act lawsuit.
Our firm is handling a number of similar
cases for homeowners in Alabama and in
several other states. If you need more information on this litigation, contact Bill
Robertson, a lawyer in our Consumer Fraud
Section, at 1-800-898-2034 or by email at
Bill.Robertson@beasleyallen.com.

Source: Huffington Post

www.JereBeasleyReport.com

21

XVII.
PREMISES
LIABILITY UPDATE
America Electric Power Found To Be
At Fault In Fatal 2007 Blast
A West Virginia jury has awarded $7
million in damages to the family of a worker
who was killed in a 2007 explosion at an
American Electric Power plant in Ohio. The
jury found AEP and subsidiary Ohio Power
Co. At fault in the death of Lewis Timmons.
Jurors awarded $2 million in compensatory
damages and $5 million as punitive
damages. The decedent, a truck driver for
General Hydrogen, was delivering hydrogen
to the Muskingum River Power Plant near
Beverly, Ohio, when an explosion occurred
in the hydrogen storage area.
The jury found that General Hydrogen
had no responsibility for the death. During
the trial the evidence revealed safety issues
at the plant. Defense lawyers said plant officials were aware of the safety issues, but
that they relied on General Hydrogen to
maintain the hydrogen storage area. Geoffrey Brown, a lawyer with Bordas & Bordas,
a firm located in Wheeling, W. Va., represented the Timmons family. Geoff, who is a
graduate of the United States Military
Academy at West Point, did a very good job
for the family.
Source: Claims Journal

Treesort Suit Settled

A couple has settled a lawsuit against a
county in Washington State for $1.2
million. The Plaintiffs were injured in a fall
from a suspension bridge at a bed and
breakfast made up of tree houses. The suit
was filed in federal court after an incident
in 2008 at the Out `n About Treesort in
Takilma, Wash. In July 2008, Michelle Buswinka and Maurice Breslin, their two children and another family member, were
guests at the resort and were having their
picture taken on a bridge on the premises.
It was alleged in their Complaint that while
holding onto the railing, it suddenly and
unexpectedly broke, causing the Plaintiffs
to pitch forward to the ground, head-first.
The Plaintiffs contended that the Josephine County failed to inspect and issue
permits for construction of the bridge;
failed to require the design to meet applicable standards; and failed to stop the resort
from building structures without inspections and permits. Ms. Buswinka suffered
spinal injuries and a fractured left wrist. Mr.

Breslin had injuries to his brain, ribs, left

shoulder and arm. Each Plaintiff claimed
mental anguish and emotional distress.
The resort, Out n About Treesort, was
created in 1990, and apparently has had a
history of problems. It was reported that
the countys history with the resort has
involved multiple legal actions, including
cease-and-desist orders and threats to tear
down the tree houses over permit issues.
Ultimately, the county allowed the resort to
continue operating under a per mit
designed for bed and breakfast establishments. The treesort is permitted to have
only five rooms, or in this case, tree houses.
It appears the resort has continued to
expand. On its website, 18 tree houses, rope
bridges, zip-lines and rope swings are
listed. T he countys insurance company
agreed to settle the claim.
Source: Claims Journal

$44 Million Settlement Reached In 2007

Bay Bridge Crash And Oil Spill
A settlement in the 2007 oil spill in San
Francisco Bay was announced last month
regarding the owners and operators of a
ship, the M/V Cosco Busan. The settlement
resolves all natural resource damages, penalties and response costs that resulted from
the ship striking the San Francisco-Oakland
Bay Bridge on November 7, 2007, and from
the subsequent oil spill in the bay. California
Attorney General Kamala D. Harris was
joined by federal, state, and San Francisco
Bay Area officials to announce the settlement. The event killed thousands of birds,
impacted a significant portion of the Bays
2008 herring spawn, spoiled miles of shoreline habitat and closed the Bay and area
beaches to recreation and fishing. Attorney
General Harris said in a statement:
This Bay is the jewel of the San Francisco region and the Cosco Busan oil
spill left a lasting scar across our
water, natural habitats and wildlife. T his settlement will allow all of
these precious resources to be restored
to their original health and beauty.
The U.S. Department of Justice, the State
of California, the city and county of San
Francisco, and the city of Richmond, Calif.
filed a consent decree that requires M/V
Cosco Busan owner-operators Regal Stone
Limited and Fleet Management Ltd. To pay
$44.4 million for natural resource damages
and penalties and to reimburse the governmental entities for response costs incurred
as a result of the 53,000 gallon oil spill that
occurred when the vessel struck the San
Francisco-Oakland Bay Bridge.
Source: Insurance Journal

22

www.BeasleyAllen.com

Bad Boy Enterprises Fined $715,000

For Failing To Report Defective
Buggies
The U.S. Consumer Product Safety Commission announced last month that Bad Boy
Enterprises, LLC of Natchez, Miss., had
a gr e e d t o p ay a c i v i l p e n a l t y o f
$715,000. The penalty settlement agreement had been provisionally accepted by
the Commission. The CPSC staff had found
that Bad Boy Enterprises failed to immediately report, as required by federal law, a
defect involving Classic Buggies off-road
utility vehicles with Series brand and SePex
brand electric motors that resulted in
sudden acceleration incidents and injuries
to consumers.
Federal law requires manufacturers, distributors and retailers to report to CPSC
within 24 hours after obtaining information
reasonably supporting the conclusion that a
product contains a defect, which could
create a substantial product hazard, creates
an unreasonable risk of serious injury or
death, or fails to comply with any consumer
product safety rule or any other rule, regulation, standard or ban enforced by CPSC.
The off-road utility vehicles with Series
motors were sold between 2003 and June
2007 and the off-road utility vehicles with a
SePex motors were sold between 2007 and
June 2010. Both the Series and SePex offroad utility vehicles could suddenly accelerate during use or while the ignition is in the
idle position, creating a runaway vehicle situation. In 2008, Bad Boy Enterprises implemented a repair program for the SePex
off-road utility buggies to address the
sudden acceleration defect without notifying the Commission.
The company did not report to the Commission until August 2009. Bad Boy Enterprises announced the first recall for sudden
acceleration on October 21, 2009. Subsequent investigation conducted by CPSC
staff uncovered that the firm failed to notify
the Commission about the sudden acceleration defect and incidents involving the offroad utility vehicles with a Series motor. T
he
firm failed to give CPSC full information
about the Series buggies until May
2010. The firm also reported in May 2010
that a new repair was necessary for the previously recalled off-road utility vehicles to
repair the sudden acceleration defect.
The second recall for sudden acceleration in these off-road utility vehicles was in
December 2010. By that time, there were
over 50 reports of sudden acceleration incidents, resulting in injuries such as arm and
leg fractures, a fractured toe, rotator cuff
injury, and sore muscles. T hese off-road
utility vehicles were sold nationwide by
authorized dealers from Spring 2003
through June 2010 for about $10,000. CPSC

urges consumers with recalled Series and

SePex off-road utility buggies to call the
firm toll-free at (855) 738-3711 between 8
a.m. And 5 p.m. CT Monday through Friday
for a free repair.
In agreeing to the settlement, Bad Boy
Enterprises actually denied CPSC staff allegations as to the existence of a defect or
hazard or that it violated the law. Thats
most interesting, to say the least. Based on
our firms handling of cases against Bad Boy
Enterprises, and its off-road utility vehicles,
we consider these vehicles to be very dangerous. These vehicles are little more than a
raised golf cart with extreme handling
problems. T
he vehicles, which can reach 25
mph, are roll-over prone and put occupants
at risk of being badly hurt or killed. We are
currently handling a case where a 13-yearold girl lost a leg in a roll-over of one of
these vehicles. If you need more information on the subject, contact Greg Allen at
1-800-898-2034 or by email at Greg.Allen.@
beasleyallen.com.
Source: sacbee.com

XVIII.
WORKPLACE
HAZARDS
$10.7 Million Verdict In A WorkRelated Lawsuit
A jury in Harris County, Texas, recently
returned a $10,702,449 verdict in favor of
Brady Foret, a 23-year-old derrick hand,
against Stewart & Stevenson, a Texas
company. The case arose out of a workrelated incident that occurred in 2009. In
the summer of 2008, Plaintiffs employer,
Key Energy Services, sent a mobile workover rig to Stewart & Stevenson in Odessa,
for refurbishment of the mast. Key paid
nearly $100,000.00 for disassembly, inspection, repair, maintenance, reassembly, reinspection and certification of the rig mast.
After the work was completed, the rig
was sent back to Key Energy Services,
which did not use the rig until January
2009. The rig was transported to perform
workover on a drill site in Louisiana. It was
rigged up, using the equipment provided by
Stewart & Stevenson, which included only
two of four safety pins. On the third day of
use, Plaintiff was working as a derrick hand
85 feet above ground. When the rig experienced a catastrophic collapse, the worker
fell to the ground. He suffered massive
bodily and orthopedic injuries, and a closed
head injury.

The work performed by Stewart & Stevenson on the Wilson mast (112 feet tall)
was to certify it for hook weight of 300,000
pounds. T he mast fell with less than
200,000 pounds of weight on the hook.
Normal operations were underway at the
time of the collapse. The Defendant contended that there were serious problems
with alignment of the rig that ultimately
caused the mast to collapse when the rig
fell off the main beam. The only Defendant
at time of trial was Stewart & Stevenson,
LLC. Key Energy Services, Plaintiff s
employer, was designated by Stewart &
Stevenson as a responsible third party.
The Plaintiff sustained a number of
serious injuries in the fall. He suffered multiple fractures of the spinous processed in
his back, compression fractures to his vertebrae, a torn posterior cruciate ligament in
the left knee, fractured jaw, torn rotator cuff,
fractures of almost all ribs, left shin laceration, fractured right scapula, traumatic brain
injury, left eye swelling, scalp hematoma,
kyphosis and vision problems. After surgical
repair of his jaw, Plaintiff was treated with
multiple courses of physical therapy. He
was sent for neuropsychological testing on
three separate occasions. Neuropsychological testing revealed memory problems,
vision problems, deficits in language, deficits in processing speed and deficits in
executive function. Two separate MRI scans
of Plaintiffs brain showed no abnormalities.
Closed head injuries are very serious. T
he
Plaintiff also suffers from anxiety and worry.
He was sent by the workers compensation
carrier to Houston to attend Mentis, a facility specializing in the care of individuals
who have suffered traumatic brain injuries. After two weeks of intense training, he
was discharged with significant neuropsychological deficits. Neuropsychological
testing confirmed that Plaintiff sustained
neuropsychological deficits as a result of
the traumatic brain injuries. He struggles
every day with short-term memory loss,
frustration, anxiety, and is unable to return
to competitive employment. Plaintiff
incurred approximately $120,000.00 in
medical bills which were paid by the
workers compensation carrier at a reduced
rate of $69,678.53. At the time of the incident, Plaintiff was making $53,000.00 annually. He sustained loss of earnings in the past
of $135,145.00. The entire verdict was compensatory, with no punitive damages being
considered.
John W. Stevenson, Jr., and Mark T. Murray,
lawyers with the Houston-based firm, Stevenson & Murray, represented the Plaintiff
and they did a very good job. Incidentally,
the pretrial offer in the case was only
$750,000 in response to a settlement
demand of less than $3 million.

Exxon Louisiana Refinery Cited For

Safety Breaches
Exxon Mobil Corps refinery in Baton
Rouge, La., exposed workers to possible
fires and explosions among other safety violations, the U.S. Occupational Safety and
Health Administration said in a report
released last month. It is fortunate that in
this case that no one was injured, the
federal worker-safety agencys Baton Rouge
area director, Dorinda Folse, said in a statement. The 502,000-barrels-per-day refinery,
the countrys second largest, faces $126,000
in fines for the 20 serious and two otherthan-serious violations found by the agency
in a March 14th inspection.
Exxon, the worlds largest company by
market capitalization, reported a secondquarter profit of $10.68 billion. The violations found by the agency included failures
to investigate incidents as related to process
safety management, failure to repair equipment and failure to address inconsistent
thickness measurements found in pressure
vessel inspections. While the fines are large,
not all interested parties agree that the
amount is enough. For example, USW International Vice President Gary Beevers said in
a statement:
The proposed penalties are a drop in
the bucket for a company that
reported a second-quarter profit of
$10.68 billion. Exxon Mobil should be
glad it got off cheaply. If workers had
been killed as a result of the companys health and safety violations it
would have cost the company a
whole lot more.
The agency began a program of inspections at the countrys 150 refineries in
2007, following a federal investigation of a
2005 explosion at BP Plcs Texas City refinery that killed 15 workers and injured 180
other people. In its final report issued in
2007, the U.S. Chemical Safety Board
found fault with refining industry standards and OSHAs oversight while assigning most of the blame to BP management
for the blast. One failing the safety board
cited in the BP explosion was not seeing
malfunctions as near-misses of catastrophic failures at the refinery.
Source: MNN.com

OSHA Cites Louisiana Company Over

Workers Death
OSHA has also cited New Iberia-based
Estis Well Service LLC for alleged safety violations stemming from the death of a
worker near Bayou Sorrel. More than
$132,000 in penalties were proposed, fol-

www.JereBeasleyReport.com

23

lowing a probe of the workers death. OSHA

said a rig mounted on a barge tipped over
and crushed the man to death on March 9th.
OSHA says the alleged violations include
the companys failure to provide systems to
protect employees from falling while
working on an elevated drill floor. According to an OSHA official, Estis Well Service, a
company that employs about 44 workers,
willfully jeopardized the safety of its
employees.
Source: Insurance Journal

Man Seriously Injured At Pepsi Plant In

Florida
A mans leg was crushed in a machine at
a Pepsi-Cola plant in Tampa recently. The
worker had been trapped in a conveyor rail
system at the plant near the University of
South Florida. According to the St. Petersburg Times, this was the third major casualty at the plant in six months. T he
39-year-old man was cleaning the system
when co-workers heard him scream. It took
members of Tampa Fire Rescues heavy
equipment team nearly 90 minutes to free
the man from the machinery. The man was
taken to a local hospital with life-threatening injuries. According to the Times, a man
was killed and another injured in March
when a lift failed in the plants warehouse.
Source: St. Petersburg Times

XIX.
TRANSPORTATION
An Update On Heavy Truck Wrecks
The media reported last month that the
National Transportation Safety Board wants
those drivers who maintain a commercial
drivers license to stop using cell phones
while driving a heavy truck or bus. The ban
would be for hand-held and hands-free cell
phones. The Board endorsed the ban after
it ruled that a heavy truck driver was distracted by his hands-free cell phone before
causing a wreck that killed ten people. The
specific incident occurred in Kentucky.
The truck driver had made a short phone
call, but it caused him to become distracted
and lose control of the truck. As a result, his
38-ton truck crossed into oncoming traffic
and crashed head on into a van carrying a
family traveling to a wedding. The impact
as well as the subsequent fire from the
crash killed ten people in the van as well as
the truck driver. The truck driver had been

24

texting and making phone calls throughout

the day prior to the wreck.
I am sure that all of us have seen people
distracted by their cell phones while
driving. For some reason, drivers are unable
to avoid the temptation to respond to the
buzzing or ringing of a cell phone while
they are driving. Yet, all drivers, not just
heavy truck drivers, can be distracted.
Many initiate the calls which are both business and personal. Even a momentary distraction from a cell phone can result in
tragic consequences.
There is a responsibility on all drivers to
pay attention while driving. There is an
additional responsibility for professional
truck and bus drivers to pay attention.
These professional drivers are on the road
all day and night. They are paid to transfer
cargo and people on our highways. The
weight of heavy trucks and buses means
that even a minor collision with a passenger
vehicle can turn deadly or result in serious
injuries. Sadly, distracted professional
drivers are becoming more commonplace.
The most recent statistics show an increase
in fatalities and injuries as a result of heavy
truck related wrecks. In 2010 there were
approximately 5,000 fatalities and 100,000
serious injuries.
I believe the proposal by the NTSB is a
good one. Unfortunately, the NTSB does
not have the regulatory power to ban cell
phone use for professional drivers. The recommendation though has been forwarded
to the Federal Motor Carrier Safety Administration and all 50 states for action. In the
meantime, our firm continues to prosecute
cases against distracted professional drivers.
Fortunately, litigation also plays an important role for companies to ensure that their
drivers are properly hired, trained and monitored. If someone you know is involved in
a wreck with one of these professional
drivers, or you need more information on
this subject, have them contact Cole Portis
or Julia Beasley at 1-800-898-2034 or by
email at Cole.Portis@beasleyallen,com or
Julia.Beasley@beasleyallen.com.

U.S. Safety Board Pushes For Trucker

Cellphone Ban
I will give a little more insight into the
reasons for the NTSB wanting to ban cell
phone use by truckers. Safety investigators
firmly believe that the U.S. government
should ban truckers from using cellphones
while driving except in emergencies.
Deborah Hersman, who chairs the NTSB,
had this to say:
Distracted driving is becoming
increasingly prevalent, exacerbating
the danger we encounter daily on

www.BeasleyAllen.com

our roadways. It can be especially

lethal when the distracted driver is at
the wheel of a vehicle that weighs 40
tons and travels at highway speeds.
Transportation Secretary Ray LaHood has
campaigned against distracted driving and
last year his agency banned commercial
truckers from sending text messages while
at the wheel. T
ransportation regulators have
also proposed prohibiting hand-held cellphone use by truckers, and the NTSB recommendation is seen as an important
endorsement. While trucking groups
support texting and cellphone bans, they
dont support any prohibition of hands-free
devices. Currently, more than half of the 50
U.S. states ban texting while driving, but far
fewer outlaw cellphone use. I believe cellphone use should be banned by drivers not
only of commercial vehicles, but also of all
other vehicles on our highways.
Source: Insurance Journal

$3.8 Million Settlement In Motorcycle

Crash Case
When most folks learn about a single
vehicle motorcycle crash, they usually are
pretty quick to form an opinion. Most generally believe the driver must have been
going too fast and not driving safely. On the
other hand, some believe there must have
been something that caused the crash that
the driver couldnt prevent. Unfortunately
these types of motorcycle crashes do occur
and many times the driver is in fact free
from fault.
In one such recent case, a 50-year old
nurse was badly injured in Portsmouth, Va.,
while riding as a passenger on a motorcycle.
It was determined that a manhole cover
that was raised nearly three inches above
the surface of the street caused the
crash. The road had recently been re-surfaced, but the contractor failed to repair
one manhole cover. It was determined that
the negligence of the contractor caused this
crash, and that the driver did nothing
wrong.
The Plaintiff, a nurse who had taken care
of others for years, was seriously injured in
this horrific motorcycle crash. She suffered
a traumatic brain injury, a fractured sacrum,
a fractured pelvis, and two fractured ribs.
She will have a painful and slow recovery
from her injuries. Her case was settled for
$3,817,500. A mberly Gibbs Hammer, a
lawyer with the law firm Bertini, ODonnell,
& Hammer, and O.L Buzz Gilbert, who is
with Giblert, Abiston & Keller, represented
the Plaintiff and they did a very good job

for her. Both of the firms are located in

Norfolk,Va.
Source: John Cooper, Injuryboard.com

$11.7 Million Jury Verdict Against A

California County
A California jury returned an $11.7
verdict recently in favor of a woman and
her daughter in a lawsuit against Contra
Costa County. The case arose out of a failure
by the county to keep a road safe for drivers
during road resurfacing work, resulting in
the death of a 56-year-old man, William
Tindall. The incident occurred on a public
road in unincorporated Brentwood on
August 20, 2008. This was one of 15 serious
accidents that occurred on the stretch of
highway in 21 days of resurfacing work.
Mr. Tindall, the decedent, left a wife and
daughter.
Tindall, a journeyman plumber and longtime Contra Costa resident, was on his way
to a job at a hospital early that morning
when he pulled over to help an Army
reservist whose SUV ran off the roadway
and overturned after losing control on a
curve that was covered with gravel. Tindall
had exited his own vehicle when a second
car ran off the road in the same spot and
fatally struck him. Five days earlier, a woman
was killed when she lost control of her
vehicle in the construction zone.
Tindalls wife, Laura, and daughter, Erin,
who was ten when her father died, filed a
wrongful-death lawsuit against Contra
Costa County and the California Highway
Patrol. The jury found the CHP free from
fault. The county erected 25 mph speed
limit signs during resurfacing, but it failed to
cover permanent higher speed limit signs
that were more prominent to motorists, as
per state guidelines. The situation was made
more dangerous due to the countys practice of keeping excess gravel on the
roadway overnight in lieu of the industry
practice of sweeping at days end.
The county resurfaced the road in question in 1994, 2001 and 2008, totaling 21
days of roadwork. During those 21 days
there were 15 accidents on the roadway. A
county employee testified that after Tindalls death, covering signs and sweeping
excess gravel became a standard practice
during its resurfacing projects. The verdict
calls for $1.5 million in economic damages,
and $10.2 million for emotional pain and
suffering based on the widow and daughters close relationship to Tindall. The family
was packed and ready to go on vacation in
Yosemite the week of the accident. Luke
Ellis, a lawyer from Orinda, Calif., represented the family, and did a very good job.
Source: Mercury News

Settlement In Fatal Indiana Crash

Results In Caution Lights Being
Installed
It was announced last month that the
Indiana Department of Transportation will
install new caution lights at a southern
Indiana intersection where three teenagers
were killed. This change was the result of a
settlement with the families of two of the
teens. The settlement came during the third
day of a trial in Scott Circuit Court in Scottsburg, Ind., in a lawsuit filed by the families
of 18-year-old Cory Emerson and 19-yearold Timothy Brunmeier. The two youngsters
were killed in the August 2007 crash. Juliane
Kraus, a 19-year-old, was also killed in the
crash. The Volkswagen Jetta they were in
was broadsided by a Chevy Blazer shortly
after midnight at the intersection of U.S. 31
and a state road. T he agreement also
includes an undisclosed monetary settlement which is confidential.

XX.
HEALTHCARE
ISSUES
FDA Questions Safety of Blood Thinner
Drug
The U.S. Food and Drug Administration
has recommended against the immediate
approval of Xarelto, which is Bayer AG and
Johnson & Johnsons anti-clotting drug, as a
treatment to prevent strokes in patients
with atrial fibrillation. The FDA said data
from a late-stage study of more than 14,000
patients, known by the acronym ROCKET,
doesnt make it clear how safe Xarelto is, or
whether its as effective as the widely-used
Warfarin. Xarelto was approved in July for
reducing the risk of deadly blood clots in
patients getting knee and hip replacements,
a small part of the potential patient
pool. T he approval followed a delay of
about two years due to FDA concerns about
the internal bleeding risk.
FDA officials said that an additional
patient study could be done, which would
cause a long delay before the drug-makers
could again seek approval. Bayer Healthcare
already markets Rivaroxaban, a daily pill
which works by blocking a clotting protein,
in 110 countries around the world.
Researchers said Xarelto is one of several
experimental drugs being developed as a
replacement for Warfarin, a medicine originally derived from rat poison that has been
used safely and effectively for seven
decades to prevent strokes.

It appears that the newer drugs are all

meant to be more convenient than Warfarin. That drug must have its dose adjusted
using frequent blood tests, and, potentially,
to cause less bleeding. Of the three new
drugs, only Xarelto is given once a day, with
the other drugs requiring twice-a-day
dosing. The Alabama Legislature must take
action at the earliest opportunity to address
this most serious matter.
Source: ibtimes.com

E. Coli Victims Helped Bring About

Change In USDA Rules
Federal agriculture officials have confirmed that inspectors next spring will
begin testing samples of beef trim for six
strains of E. coli capable of producing
toxins that cause infection and death. The
move expands long-standing federal rules
that ban the better-known E. coli O157:H7
strain linked to illnesses from undercooked
meat. Dr. Elisabeth Hagen, under secretary
for food safety, stated in a news conference:
This is a really significant step forward for
American families. This is about preventing
illness. T
his is about saving lives.
A small group of victims and family
members petitioned the United States
Department of Agriculture in 2009 to classify six strains of so-called shiga-toxin producing E. coli, known as STECs, as
adulterants subject to testing and ban. The
strains include E. coli O26, O45, O103,
O111, O121 and O145, known as the big
six, which collectively are estimated to
cause about 113,000 infections and 300
hospitalizations each year. In 2010, the nonO157 STECs caused more infections than
the dominant strain of E. coli, and CDC officials estimate that the bugs might cause
food-borne illness at twice the rate of E.
coli O157.
When the USDA didnt respond in a
timely fashion, Marler Clark of Seattle, a
food safety law firm in Seattle representing
the group, threatened to sue the agency for
denying the petition. Its not clear how the
petition and other efforts by food safety
advocates to pressure USDA into expanding
its rules about non-O157s figured into the
long-delayed decision. The new rules were
reportedly drafted as early as January, but
for some reason were held up for review at
the Office of Management and Budget. Consumer advocates say the change will make
the food supply safer. Jean Halloran, Director of Food Policy Initiatives at Consumers
Union, had this to say:
By classifying these dangerous pathogens as adulterants, the USDA is
adopting a zero-tolerance policy

www.JereBeasleyReport.com

25

toward E. coli in meat that we have

long fought for. These strains of E. coli
have been identified for years as
causing serious illness and even
death. This higher standard will help
to ensure that disease-causing food is
kept off store shelves and out of consumers homes.
Some meat producers and retailers had
already implemented the testing. Beef
Products Inc. of Dakota Dunes, S.D., started
testing for the big six non-0157 E. coli
strains in mid-July. Since then, the company
has held back 63,000 pounds of beef,
about two-tenths of one percent of its
product. The firm sells about 400 million
pounds of beef annually. Retail giant
Costco also requires its suppliers to test for
the non-O157 E. coli strains. Craig Wilson,
the companys assistant of food safety,
praised the USDAs new rules, calling it a
pretty big step. Hopefully, other companies will now follow their lead and will
abide by the new rules.
Source: MSNBC

Health Department Holds Hearing on

Spice Use In Alabama
According to State Health Officer Don
Williamson, an herbal and chemical compound that mimics marijuana has become a
growing and most serious problem in
Alabama. Dr. Williamson said the product is
sold in stores under a variety of names,
including Spice, K2 and Yucatan Fire.
Its a blend of herbs coated with a chemical
compound similar to the natural substance
in marijuana that gives users their high.
The Regional Poison Control Center at Childrens Hospital of Alabama reports receiving 67 calls from people exposed to the
substance since October 2010. T
he Department of Public Health held a public hearing
about Spice on September 19th in Montgomery. The hearing focused on the extent
of the problem and possible solutions. It
appears this is a massive problem that has
gone virtually unnoticed by parents.
Source: Associated Press

26

XXI.
ENVIRONMENTAL
CONCERNS
Trial Is In Progress In Tennessee On
TVA Ash Spill Lawsuits
The first federal trial on lawsuits seeking
damages from the Tennessee Valley Authoritys huge coal ash spill started on September 19th in Knoxville and was still going at
press time. The bench trial (no jury), involving six lawsuits, is before U.S. District Judge
Thomas Varlan. The lawsuits seek damages
from the TVA dam collapse in 2008 that
spilled 5.4 million cubic yards of
sludge. This trial will establish the issue of
liability in the case and is very important.
Hundreds of lawsuits have been filed. The
spill ruptured a natural gas line, disrupted
power and transportation, ruined a number
of homes and forced a nearby residential
community on the Emory River to evacuate.
Its contended in the lawsuits that TVA,
the nations largest public utility, was negligent in constructing, maintaining and
inspecting the earthen dam at the coal-fired
Kingston Plant. Hundreds of people were
hurt from the spill and have filed lawsuits.
David Byrne and Brantley Fry, lawyers from
our firm, are among the lawyers representing the Plaintiffs in this case. Other lawyers
on the trial team are Jeff Friedman from Birmingham and Joanne McLaren, Paul
Brandes, Gary Davis and Beth Alexander, all
from Tennessee.

More On Hydraulic Fracking

The oil and gas industry says hydraulic
fracturing, or fracking, is safe. Environmental Working Group wants more science to
make sure its really safe. The oil and gas
industry claims that hydraulic fracturing has
never contaminated drinking water wells.
EWGs recent study, Cracks in the Faade,
uncovered documents showing that in
1987, the Environmental Protection Agency
concluded that fracking couldand did
contaminate a water well used by a West
Virginia family.
But the oil and gas industry insists that
this controversial drilling technique is
safeeven though the EPA also concluded
that the incident in West Virginia was representative of contamination from oil and gas
drilling. Fracking is escalating as drilling
companies seek to exploit gas deposits
trapped in untapped shale formations. But
scientific understanding of the technologys
hazards hasnt kept up with the expansion

www.BeasleyAllen.com

of drilling. EPA must step up and protect

our drinking water and land by intensifying
its investigations of the potential risks to air,
water and the environment.
Fracking injects a mix of water, sand and
chemicals into underground shale formations under high pressure to free embedded
deposits of oil and gas. It has been associated with drinking water contamination
and property damage across the nation,
from Pennsylvania to Wyoming, but the
industry has always denied that the process
can contaminate groundwater. Yet EWGs
investigation turned up a long-forgotten
EPA report that said that in 1982, Kaiser Gas
Co. drilled and hydraulically fractured a
natural gas well on private property in
Jackson County, W. Va. In a 1987 report to
Congress, the EPA concluded that the
process had contaminated the landowners
well. T he EPA called this contamination
illustrative of the types of pollution associated with natural gas and oil drilling.
The EPA might have included other
examples of groundwater pollution from
fracking, but the agencys investigation was
hampered by confidentiality agreements
between industry and affected landowners.
For almost 25 years neither the industry nor
the EPA itself has mentioned this study or
followed up with more research to determine how fracking fluid might seep into
well water. Thats way too long to leave our
drinking water at risk.
Source: action.ewg.org

XXII.
THE CONSUMER
CORNER
Chrysler CEO Asked To Recall Jeep
Grand Cherokee
The Center for Auto Safety has requested
a recall of the Jeep Grand Cherokee. In a
letter sent to Chrysler CEO Sergio Marchionne last month, the Center for Auto
Safety released a comprehensive analysis of
fires in 1993-2004 Jeep Grand Cherokees
showing that the Grand Cherokee with the
fuel tank behind the rear axle had a fire
death rate 20 times higher than the Ford
Explorer with a fuel tank in front of the rear
axle. The analysis revealed how Chryslers
own crash tests disclosed the deadly design
details including a fuel filler hose that
pulled loose.
Crash tests at FHWA and KARCO Engineering have confirmed that survivable rear
impacts produced massive fuel leaks which
would result in fires. The 1993-2004 Jeep

Grand Cherokee was designed by the old

Chrysler Corporation. The fuel tank was
relocated in 2005 by DaimlerChrysler. The
design problem has and will continue to
claim a terrible toll of burn victims. The
CEO of the new Chrysler Group LLC has
repeatedly spoken out about the social
responsibility of leaders not to close their
eyes to problems but to find solutions. The
Center for Auto Safety and the families of
victims have called on this CEO to recall all
1993-2004 Jeep Grand Cherokees.
Source: autosafety.org

Public Citizen Seeks Ban On Pelvic

Surgical Mesh
Public Citizen, the consumer advocacy
group, has called on government regulators
to ban a type of surgical mesh used to treat
pelvic collapse, saying it exposes patients to
serious risks. A petition was sent recently
by Public Citizen to the Food and Drug
Administration asking the agency to ban
pelvic surgical mesh inserted through the
vagina. About 75,000 women had prolapse
surgery with forms of the mesh last year,
according to the FDA.
The FDA announced recently that complications with mesh are higher than previously estimated, with many women
experiencing pain, bleeding and infection. A ccording to Public Citizen, mesh
offers no benefit over traditional surgery
with stitches. Public Citizens Dr. Michael
Carome, in making his request, had this to
say: Even the FDA seriously questions the
safety and effectiveness of these mesh products, so they should be removed from the
market immediately.
I agree with Public Citizen and commend
them for taking on this needed action. Our
firm is currently evaluating a number of
serious claims resulting from use by the surgical mesh. If you need additional information on this litigation, contact Melissa
Prickett, at 1-800-898-2034 or by email at
Melissa.Prickett@beasleyallen.com.
Source: AJC.com

Whistle-Blower Suit Accuses Hospice

Company Of Medicare Fraud

clinical director of SouthernCares Madison,

Wis. office, filed the new suit in February in
U.S. District Court in Wisconsin. It was
unsealed after the federal government
declined to intervene.
In the new suit, the Plaintiff alleges that
SouthernCare charged Medicare for care
the company provided to patients who
didnt have terminal illnesses. Medicare, the
main payer for hospice care, or comfort
care preceding death, requires patients to
have six months or less to live as determined by a doctor. The whistle-blower suit
is the first known Medicare fraud case
against SouthernCare since the $24.7
million settlement, according to Ms. Christensens lawyer, Nora Hitchcock Cross of
Milwaukee, who also had this to say about
the latest suit:
It does appear that the lesson was not
learned. We believe this is a nationwide practice, and were talking large
sums of money.
SouthernCare, a for-profit company with
75 offices in 15 states, opened its Madison
office in 2007. It also has an office in Green
Bay. The Plaintiff, Ms. Christensen, claims
her supervisors encouraged enrollment of
patients who werent terminally ill and dismissed her complaints that the practice
was illegal. The Plaintiff was fired shortly
after sending the board of directors and the
regional director a letter about her concerns in August 2010. In many cases, the
suit alleges, Ms. Christensen didnt receive
medical information about patients until
several days after they had been enrolled
and Medicare had been billed. The suit also
alleges that:
SouthernCare encouraged the practice of admitting and falsely billing
for unqualified patients by setting
goals based on the number of new
admissions and the average daily
census of patients.
Examples of a dozen unnamed patients
are included. One person admitted as a
cancer patient was free of cancer according to her medical records, the suit
says. Another, listed as having heart disease,
showed no signs or symptoms of heart
disease.
Source: Madison.com

A Wisconsin lawsuit alleges that Souther nCare, an Alabama-based hospice

company, fraudulently enrolled Madisonarea patients in hospice care and charged
Medicare for the services. T he federal
lawsuit was unsealed on September 14th.
SouthernCare, based in Birmingham, paid
the federal government $24.7 million in
January 2009 to settle similar claims in
Alabama. Karina Christensen, the former

Jury Awards Victims Of Salmonella

Outbreak $1.4 Million
The victims of the 2008 salmonella outbreak at the International House of Pancakes in Amarillo, Texas, have won their
case. A jury awarded the Plaintiffs more

than $1.4 million in damages. T he jury

returned a verdict of $140,000 for each of
the ten Plaintiffs. Dean Boyd, one of the
victims lawyers, said in closing arguments
that the compelling, graphic testimony
should be a warning for other Amarillo restaurants to keep their facilities clean.
Two of the Plaintiffs almost died and all
others had very bad injuries. While the restaurant took responsibility, its lawyers asked
the jury to assess a fair compensation to
the Plaintiffs. IHOP agreed to pay the
victims medical bills and lost earnings, but
the food chains lawyers challenged the
victims pain and suffering claims.
The victims and their spouses testified
during the trial about the severe stomach
pains and extended hospital stays after they
ate at the restaurant. Other Plaintiffs in the
case had settled nearly half of the claims
originally a part of the lawsuit before
trial. The suit, filed in May 2010, included 24
IHOP patrons as Plaintiffs. The settlement
amounts were confidential.
The case arose from three separate salmonella outbreaks that sickened the restaurants patrons, starting in June 2008. From
the first known poisoning case in June to a
city health review in September, more than
125 people who ate at the IHOP location
were victims of salmonella poisoning. IHOP
employees said the syrup pitchers were not
washed or sanitized before they were
refilled. During that time, the restaurant
closed its doors three times in response to
potential salmonella outbreaks. The closures were prompted by a June 2008 city
review in which 11 IHOP employees tested
positive for the salmonella toxin. In the last
case, which prompted the September 2008
closure, city officials determined the cause
was an infected water bath used to warm
bottles of syrup.
Source: Amarillo.com

Dish TV To Pay $125,000 To State Of

Vermont To Settle Letter Wording
DISH Network will pay $125,000 to the
State of Vermont to resolve a complaint
about a letter sent to some subscribers that
including wording the State considered
unfair and deceptive. The State says that, in
July 2010, the satellite television provider
sent 310 letters to Vermont consumers that
included phrases such as Urgent Action
Required and Please read immediately to
avoid service interruption. The letter went
on to claim that replacement of consumer
equipment was necessary and free.
In settling with the State of Vermont,
DISH admitted no immediate equipment
upgrade was necessary. According to Attorney General William Sorrell, under Ver-

www.JereBeasleyReport.com

27

monts Consumer Fraud Act, words like

urgent, immediately, necessary and
free have significant meanings. General
Sorrell says using such language to trigger
unnecessary action wont be tolerated by
his state.
Source: Forbes

Mobile-Based Company Sues Credit

Rating Firm
A local disaster cleanup company has
sued a credit rating agency for $3 million,
accusing it of failing to correct mistakes
that have resulted in lost business. DRC
Emergency Services contends that Experian
Information Solutions listed a pair of bankruptcies and multiple tax liens on DRCs
credit report. As a result, DRC was denied
credit in June, according to the lawsuit filed
in federal court in Mobile. DRC contends
the bankruptcies and tax liens appear to
belong to an unrelated company that uses
the initials DRC as an abbreviation for its
own name.
According to the lawsuit, its undisputed
that the information Experian had was
incorrect and that no other credit agency
included the black marks on their
reports. The civil Complaint contends that
DRC disputed the information via email on
June 17th, according to a process set up by
Experian. The Plaintiff has alleged that the
ratings firm took no action and did not
respond to a request on July 6 th for an
update, and that Experian also failed to
respond to a follow-up request on August
17th. The bad report has had real consequences, according to the suit.
The Complaint contends that DRC was
denied credit in June and July when it
attempted things like negotiating contracts
to rent apartments for employees and establishing leasing accounts. The suit seeks $1
million in compensatory damages and $2
million in punitive damages. Founded in
1989 after Hurricane Hugo, DRC has
worked extensively cleaning after natural
disasters, from Hurricane Katrina to last
years Haiti earthquake to recent tornadoes
in Alabama and Missouri. Kip Sharpe, a
lawyer from Mobile who is a graduate of
Cumberland School of Law, represents DRC
in this most interesting case.
Source: AL.com

CPSC Warns Of Drowning Dangers

Now that the summer months are over,
drowning threats arent on the radar
screens of most folks. When most of us
think of the danger of drowning, we normally think only of pools, lakes, or rivers.
28

But the danger of drowning for young children is still a real one, all year long. Drowning is the leading cause of unintentional
death among children ages one to four
years. With Labor Day representing the traditional end of the pool season, parents and
caregivers need to know that drowning
risks inside the home are still present. In
fact, bathtubs are the second leading location, after pools, where young children
drown. Buckets, other containers, and even
landscaping features, also can present a
danger of drowning.
A new report from CPSC on submersions
related to non-pool and non-spa products
indicates that from 2005 to 2009, there
were 660 submersion incidents involving
children younger than five years old. There
were 431 fatalities, 212 injuries and 17 incidents with unknown injuries. The majority
of the victims were younger than the age of
two and most of the incidents involved
bath or bath related products. CPSCs analysis of the fatalities found that 92% occurred
in residential settings. Chairman Inez Tenenbaum stated:
Young children can drown in just a
few inches of water. I urge parents
and caregivers to constantly supervise young children around bathtubs,
bath seats and buckets. T here are
simple steps that every family can
take to prevent drownings in the
home.
Many of the reported incidents involved
a lapse in supervision, such as a parent or
caregiver leaving the bathroom while the
child was in the bathtub to answer the
phone or door, or to retrieve a towel. In
other incidents, an older sibling was left to
watch a younger sibling. CPSCs drowning
prevention safety tips include:
Never leave young children alone near
any water or tub or basin with fluid.
Young children can drown in even small
amounts of water.
Always keep a young child within arm's
reach in a bathtub. If you must leave, take
the child with you.
Don't leave a baby or young child in a
bathtub under the care of another young
child.
Never leave a bucket containing even a
small amount of liquid unattended. Toddlers are top heavy and they can fall
headfirst into buckets and drown. After
using a bucket, always empty and store it
where young children cannot reach it.
Don't leave buckets outside where they
can collect rainwater.

www.BeasleyAllen.com

Consider placing locks on toilet seat

covers in case a young child wanders
into the bathroom. Learn CPR (cardiopulmonary resuscitation). It can be a lifesaver when seconds count.
Hopefully, this information from the
CPSC will get the attention of all parents
and caregivers. If so, it can help save lives.
Source: CPSC

Consumers Not Required To Arbitrate

Warranty Claims With Car Dealers
A federal appeals court handed car
owners a victory by striking down a
requirement that they arbitrate warranty
disputes with dealers. Reversing a lower
court ruling, the 9th U.S. Circuit Court of
Appeals agreed with a Porsche 911 Turbo
owner that her sales contract requiring her
to submit warranty claims to mandatory
arbitration violated the federal MagnusonMoss Warranty Act, which governs consumer product warranties. Written
warranty provisions that mandate pre-dispute binding arbitration are invalid, Judge
Stephen Reinhardt wrote for a two-one
panel of the 9th Circuit.
This decision is at odds with rulings by
two other federal appeals courts that
upheld similar arbitration clauses. T hat
raises the prospect that the decision may be
reconsidered by the 9th Circuit, or appealed
to the U.S. Supreme Court. The Plaintiff,
Diana Kolev, said Porsche refused to repair
her $92,000 Porsche under warranty after it
began suffering from a stalling engine, suspension problems, a loose shifter and a foul
smell coming from its interior vents.
In his opinion, Judge Reinhardt wrote
that Congress authorized the Federal Trade
Commission to adopt rules governing warranties, and that it was reasonable for that
agency to strike down binding arbitration
under a different law. The laws purpose is
to protect consumers from predatory warrantors and shield them from involuntary
agreements that they cannot negotiate, the
judge wrote.
Citing this and other factors, Judge Reinhardt also rejected decisions by the U.S.
Courts of Appeals for the Fifth and Eleventh
Circuits that the warranty law does not
interfere with another federal law, the
Federal Arbitration Act, that encourages
courts to enforce arbitration agreements. T he judge distinguished an April
ruling by the Supreme Court in favor of
AT&T Inc. That upheld arbitration agreements under the FAA. Judge Reinhardt said
that ruling was intended to enhance efficiency rather than promote consumer interests. The Ninth Circuit returned the Kolev

case to the federal district court in Santa

Ana, Calif., for further proceedings.
Source: Insurance Journal

Serious Health Risks Posed By The

Shoulderflex Massager
The FDA has notified health professionals
and consumers of serious health risks
posed by the ShoulderFlex Massager. The
FDA says its aware of reports to the Consumer Product Safety Commission of one
death and one near-strangulation associated
with the ShoulderFlex Massager. These incidents occurred when a necklace and clothing became caught in a piece of the device
that rotates during use. Two other reports
involved clothing and hair that were caught
in the device.
The ShoulderFlex Massager, distributed
by King International, is a personal massage
device designed for home use to provide
deep tissue massage to the neck, shoulder
and back while the user lies on a f lat
surface. King International has distributed
11,934 devices since October 18, 2003. The
devices were sold at various stores and
online retailers in the United States. The
CPSC says not to use the ShoulderFlex Massager and to dispose of the device components separately so that the massager
cannot be reassembled and used. The FDA
is evaluating King Internationals plan for
recall of the ShoulderFlex Massager, which
may lead to additional action or communication by the FDA or King International.

Fourteen Reported Deaths From

Contaminated Cantaloupes
As this issue was being sent to the
printer, we learned that the number of
deaths caused by a contaminated batch of
cantaloupes had reached fourteen. T he
Center for Disease Control and Protection
(CDC) confirmed that number in an
update. Also, it was reported that as many as
75 people across fourteen states were also
reported to have been made sick. Almost all
victims consumed listeria-infected cantaloupe originating in Colorado. Health officials are concerned that more victims are
likely to appear due to the long incubation
period of the bacteria. Four outbreak-associated strains of listeria have been traced to
Rocky Ford cantaloupes produced by
Jensen Farms in Holly, Colo.
The FDA confirmed that listeria was
found in samples taken from a Denver-area
store and the Jensen Farms packing facility. The melons were shipped to at least 17
different states across the US between July
29 th and September 10 th. Jensen Farms

issued a nationwide recall of its cantaloupes on September 14th, following news

of the multi-state outbreak. T he fruit
company is collaborating fully with federal
authorities to remove all potentially contaminated melons from general sale. But,
some of the produce could still be on sale
in grocery stores.
At press time Colorado had reported the
highest number of infections, followed by
New Mexico, Texas, and Oklahoma. Other
states affected by the outbreak include California, Colorado, Illinois, Indiana, Maryland,
Montana, Nebraska, Virginia, West Virginia,
Wisconsin, and Wyoming.
Listeria outbreaks, which affect around
800 people a year in the U.S., are not typically associated with produce, but bacteria
were found in sprouts in 2009 and celery in
2010. The bacteria can cause fever, muscle
aches, stiff neck, confusion and diarrhea or
other gastrointestinal problems, according
to the CDC. It is often most deadly among
high-risk groups, such as the elderly. The
median age of those infected in the recent
outbreak is 78.

include its EasyTone walking shoes,

RunTone running shoes and EasyTone flip
flops. T
he company claims the shoes, which
have a rounded, slightly unstable sole,
encourage strength by engaging more of a
wearers muscles.
Reebok made a number of claims in its
advertising and marketing materials that
the FTC said it could not support. T hat
includes claims that its EasyTone footwear
had been proven to lead to 28% more
strength and tone in the buttock muscles
and 11% more strength and tone in hamstring and calf muscles than regular walking
shoes. Under the settlement, Reebok is also
barred from making any claims that the
shoes add strength unless they are backed
by scientific evidence. Reebok, based in
Canton, Mass., is owned by German shoe
company Adidas. Consumers seeking a
refund will be paid either directly from the
FTC or through a court-approved classaction lawsuit.

Source: Associated Press

XXVIII.
RECALLS UPDATE

NHTSA Investigating Possible Jeep Air

Bag Problem
**September 27, 2011Associated
Presswspa.com
The National Highway Traffic Safety
Administration says it is investigating
reports that the air bags on some Jeep
Liberty sport utility vehicles are suddenly
going off without a crash happening. The
agency says on its website that in four of
seven confirmed cases, the front driver-side
air bag went off, while in three both the
dr iver- and passenger-side air bags
deployed. T
he investigation involves an estimated 387,356 vehicles made during the
2002 and 2003 model years. Five of the
seven reports involved injuries. Some
owners said they saw the air bag light come
on, or intermittently come on, before the air
bags went off.
Source: Associated Press

Reebok To Pay $25 Million Over Toning

Shoe Claims
Reebok International Ltd. will pay $25
million to customers to settle charges by
the Federal Trade Commission that it made
deceptive claims in ads that its toning shoes
would measurably strengthen the legs and
buttocks of those who wear them. Reebok,
based in Canton, Mass., has centered much
of its business on toning shoes, which

Source: Claims Journal

Each month we hope to have fewer

safety-related recalls to write about. But
again there have been a very large number
of product recalls over the past weeks.
Serious safety-related recalls have become
commonplace. The following are some of
the more significant recalls since those
reported in the September issue. Automakers recalled more than 800,000 cars and
trucks during a single week last month for
defects including faulty airbags. Readers are
encouraged to contact Shanna Malone, the
Executive Editor of the Report, if more
information is needed on any of the recalls.
We would also like to know if we have
missed any safety recalls that should be
included in this issue.

BMW Recalls 241,000 Cars In The

U.S.
Bayerische Motoren Werke AG (BMW)
has recalled 241,000 3-Series cars in
the U.S. because of a rear-light defect it
says may cause crashes. The recall is
for model years 2002-05 of the 325i,
325xi, 330i and 330xi cars. BMW told
NHTSA that lights including tail, brake
and turn signals may only work intermittently on the cars. This reduces the
ability to warn other motorists of the
drivers intentions and could cause a
vehicle to crash without warning, the
company said.

www.JereBeasleyReport.com

29

BMW also recalled 120,000 diesel cars

worldwide because of a defect that
could cause filter heaters to keep
running after engines are turned
off. The rear-light problem affects cars
only in the U.S., according to Andreas
Lampka, a BMW spokesman, who says
the defect has been fixed in 20,000
vehicles as part of regular maintenance.
There have been no accidents as a
result of the problem, according to
BMW. The diesel-filter issue risks draining t h e ba t t e r y d u r i n g w i n te r
months. About 2,000 X5 sport-utility
vehicles are affected by the filterheater issue in the U.S. T
he SUVs were
built between September 2008 and
April 2009. In other markets, some 1-,
5- and 7-Series cars are affected as well
as X3 and X6 SUVs.

Chrysler Models Recalled

Chrysler/Town and Country 2008,
Chrysler Voyager 2008, and Dodge/
Grand Caravan 2008 have been
recalled. These vehicles may have a
heating and air conditioner leak. If the
leak affects the occupant restraint
control, the airbag warning light may
be illuminated, which can cause the air
bag to be accidentally deployed.
Owners may contact Chrysler at 1-800853-1403. Dealers will replace the
affected air bag free of charge. Only
some cars or trucks recalled are
affected. Contact a dealer for your
model to see if it is included in the
recall. The dealer will tell you what to
do.

to an authorized dealer for inspection

when they receive the recall notice.

Honda Recalls Vehicles Because

Of Power Window Issues
Honda Motor Co. has also recalled a
total of 962,000 cars worldwide to fix
power windows and computer
systems. Honda will recall 936,000
units of the Fit subcompact, CR-V
crossover and Fit Aria in North America,
Asia, Europe and Africa. T
he Fit is called
Jazz in some overseas markets, while
the Fit Ar ia is also known as
City. According to Honda, the recall
was prompted by defects in driversside power window switch units,
which could potentially melt and catch
fire.

Hyundai Issues Recall On SUVs

Due To Airbag Problems
Hyundai has recalled 205,233 of its
Santa Fe and Veracruz crossover vehicles, citing problems with their airbag
systems. NHTSA says the 2007 and
2008 model year cars were built
between December 26, 2006, and
March 21, 2008. T he clock spring
contact assembly for the drivers airbag
may become damaged through usage
over time, according to NHTSA. That
could keep the airbag from deploying
and protecting the driver in the event
of a crash. Hyundai dealers will replace
the clock spring assemblies as needed
for free. The recall is expected to begin
this month.

Honda Recalls 310,773 Pilots In

The U.S.

VW Recalls Jettas Over Tailpipe

Burn Concerns

Honda Motor Co. has recalled 310,773

Pilot vehicles in the U.S. To inspect and
potentially replace the front seat belts
due to problems with the belts stitching. The recall is for Pilots from the
2009 through 2011 model years. The
driver and front-passenger seat belts
may have been manufactured improperly, according to Honda.

Volkswagen has recalled more than

30,000 Jetta sedans from the 2011 and
2012 model years because the tailpipes
can stick out too far and burn
people. A ccording to the National
Highway Traffic Safety Administration,
stainless steel exhaust pipe tips
installed at the point of importation
can stick out farther than the factoryinstalled tailpipes. If the tips are hot,
people could be burned on the
legs. According to the agency, Volkswagen received complaints of burns in
July and began investigating. Dealers
will inspect the cars to see if the
exhaust tips are too long and replace
them free of charge if necessary.

The stitching connecting the lap

section of the belts to the outboard
anchor webbing may be incomplete or
missing. T hat means the belts may
potentially come loose in a crash,
increasing the risk of injury. Honda
says there have been no injuries
because of the defects. Owners of the
recall-affected Pilots should take them

30

www.BeasleyAllen.com

Subaru Recalls Vehicles

Subaru issued three separate recalls
last month. One was a recall of almost
70,000 Outback and Legacy models
from 2011 because the glass portion of
the moonroof might fly off. The automaker told NHTSA there wasnt
enough adhesive applied to the glass
portion of the moonroof on the vehicles assembled from Aug. 3, 2010 to
July 1, 2011.
Two earlier recalls covered almost
500,000 vehicles. One of these recalls
affects 195,000 Legacy and Outback
models from the 2010-11 model
years. This recall was to fix a wiper
motor that may overheat and catch fire.
The third recall, covering about
295,000 vehicles, includes the 200207
Impreza, 200308 Forester and
2005-06 Saab 9-2x, which is based on
the Impreza. Subaru says a front
control arm may break if corroded,
making the vehicle difficult to control.

Kia Recalls
Kia has recalled more than 10,000
2007-08 Sorento passenger cars
because of a computer glitch that
could turn off the front passenger
airbag when an adult is in the passenger seat. A fter an investigation that
lasted nearly two years, Kia has agreed
to recall about 10,600 of its 2007-08
Sorento crossover S.U.V.s because the
passenger air bag may not work. In
November 2009, the NHTSA began
investigating reports saying that when
an adult sat in the front passenger seat,
a sensor would conclude that a small
child was sitting there and subsequently turn off the air bag.

Deere Recalls About 15,500 Lawn

Tractors
Deere & Co. has recalled about 15,500
lawn tractors sold since last December
due to a problem involving mower
blade brake assemblies that increases
chances that the operator can be cut
by the spinning blades. T he recall
affects tractors sold at John Deere
dealers, Lowes and Home Depot stores
across the country, according to a statement from the U.S. Consumer Product
Safety Commission. The tractors are
green, with yellow seats, and they have
model numbers D100, D110, D120 and
D130. All have a 42-inch Edge Cutting
System mower deck.

The statement said hardware used to

hold blade brake assemblies on the
mower decks can break, and that can
cause blades to spin longer than
normal after the operator stops
power. The Commission said customers should stop using the recalled
products immediately. Deere, based in
Moline, Ill., is the worlds largest maker
of agricultural equipment. It also
makes construction, forestry and landscaping equipment, such as backhoes,
excavators, riding mowers and leaf
blowers. Consumers with questions
can contact Deere at 800-537-8233. Its
shares rose 36 cents to $76.92 in
midday trading Wednesday.

KTM North America Recalls OffRoad Motorcycles

KTM North America Inc., of Murrieta,
Calif., has recalled about 6,117 OffRoad Motorcycles. T he motorcycle
handlebar clamp can develop cracks
during normal use causing the handlebars to move from their set position. This can result in the rider losing
control of the vehicle, posing a fall or
crash hazard. KTM says it received a
report of one incident in which the
consumer was hospitalized from injuries received in a crash after the handlebar clamps cracked and failed to
secure the handlebars.
This recall involves all 2011 KTM and
Husaberg off-road/competition motorcycles. T he affected KTM bikes are
orange and black in color with the
model name and KTM logo located
on the right and left shrouds. T he
affected Husaberg bikes are blue,
yellow and white in color with the
model name and Husaberg logo
located on the right and left
shrouds. Authorized KTM and Husaberg dealers sold the motorcycles
nationwide from April 2010 through
May 2011 for between $6,200 and
$9,500.
Consumers should immediately stop
using the recalled motorcycles and
contact authorized KTM and Husaberg
dealers to schedule a free repair. For
additional information, consumers
should contact authorized KTM or
Husaberg dealers. Authorized dealers
can be located by going to www.ktm.
com or www.husaberg.com. Consumers may also call KTM North America
Inc. customer relations at (888) 9856090.

CleanFUEL USA Recalls Hose

Fittings On Blue Bird Propane
Vision School Bus
CleanFUEL USA, a leading supplier of
alternative fuel infrastructure and
liquid propane engine systems, has
recalled the fuel hose fittings on the
Blue Bird Propane Vision school
bus. The company determined a potential safety-related condition exists with
a faulty conical hose fitting. No accidents have been reported associated
with this recall, according to the
company. CleanFUEL USA says that the
supplier of the failed components was
notified and acknowledged this
issue. These parts will no longer be
used in future models.
CleanFUEL says that, during an independent quality review, it found evidence of the hose fitting separating
from the fuel line, which could potentially cause a small amount of propane
fuel to be released. The company says
there are several mechanisms in place
to safely stop the fuel flow. But the
cutoff of fuel from these safety mechanisms may result in a vehicle stall. In
partnership with Blue Bird, CleanFUEL
is pursuing a 100% recall of all Propane
Vision school bus products issued
before August 2011 within the affected
population. CleanFUEL will replace
faulty conical hose fittings with a new
crimp hose fitting design at no charge.

Weehoo Recalls Bike Trailers

Weehoo Inc., of Golden, Colo., has
recalled about 2,700 Weehoo iGo
Bicycle Pedal Trailers. The receiver on
the trailers seat post hitch can crack
and cause the trailer to detach, posing
fall and crash hazards to the child in
the seat. CPSC and Weehoo have
received one report of the trailers
receiver cracking while in use. No injuries have been reported. This recall
involves 2011 Weehoo iGo bicycle
trailers manufactured between April
2011 and July 2011. The trailer has a
steel frame with an adjustable seat for
passengers 38 to 52 inches tall, two
pedals with straps, an enclosed
sprocket and chain, a 20-inch wheel,
two pannier pockets, a flagpole and a
flag. The seat, pannier pockets, and flag
are made of red, heavy-duty nylon. The
pannier pockets and the flag have the
word Weehoo and the logo printed
on them in reflective material. T he
serial numbers for the recalled trailers
contain the letter D and can be found
on the underside of the iGo frame, by

the pedals. They were sold at bicycle

retail stores nationwide between April
2011 and July 2011 for about $390.
Consumers should immediately stop
using the recalled iGo trailers and
contact Weehoo for the repair. Consumers will receive a steel reinforcement sleeve to be installed over the
receiver. For additional information,
contact Weehoo at (800) 538-6950
anytime, or visit the companys website
at www.weehoobicycletrailer.com.

Petzl America Recalls Belay

Devices Due To Fall Hazard
Petzl America Inc., of Clearfield, Utah,
has recalled about 18,000 GRIGRI 2
belay devices with assisted braking in
the U.S. Excessive force on the handle
can cause the device to become stuck
in the open position. When stuck open,
the assisted braking function is disabled, posing a fall hazard to consume r s . S e ve n d e v i c e s wo r l d w i d e ,
including one in the U.S., were
returned after the users noticed that
the handle could become stuck in the
open position. No injuries have been
reported, according to the company.
The GRIGRI 2 belay device is used by
rock climbers to control the climbers
safety rope during a fall or while being
lowered on the rope. T he first five
digits of the serial numbers of devices
affected by this recall range from
10326 to 11136. The serial number is
engraved on the body of the product
underneath and protected by the
folded handle. The belay devices are
four inches in length and two inches in
width, and come in grey, blue, and
orange colors. Sports and recreation
stores sold them in the U.S. A nd
Canada from February 2011 to June
2011 for about $95. Consumers should
stop use of the affected GRIGRI 2s
immediately, and contact Petzl America
for a replacement. For additional information, contact Petzl America at (800)
932-2978 or visit http://www.petzl.
com/us/outdoor/us/recall-replacement-grigri-2.

Second Wipe-Maker Issues Recall

After Bacteria Detected
A second company that makes and distributes alcohol prep wipes to prevent
infection has issued a large recall
because of potential bacterial contamination. T
he company shares a common
supplier with a Wisconsin wipe-maker
whose products have been blamed for

www.JereBeasleyReport.com

31

illnesses and death. Professional Disposables International Inc., (PDI), of

Orangeburg, N.Y., has recalled all lots
of five different kinds of packages of
non-sterile alcohol prep pads because
of what a company spokeswoman
called very low levels of detection of
Bacillus cereus bacteria.
Interestingly, thats the same organism
that has triggered massive global
recalls, a plant shut-down and at least
eight lawsuits against the Triad Group
and H&P Industries of Hartland,
Wis. The lawsuits claim that contaminated alcohol prep products led to
dangerous infections in folks using the
products for medical care. The recall
announced on Sept. 16th came after
FDA inspectors visited the plant and
tests showed the presence of Bacillus
cereus.
PDI has confirmed that the company
buys padding material from Tudor Converted Products Inc. of Summerville,
S.C., the same company that supplied
pad material to the Triad Group and
H&P Industries. In at least one lawsuit,
H&P Industries officials have claimed
that the bacteria found in their products came from contaminated padding
from Tudor. Both Tudor officials and
PDI have dismissed that claim.

Qualitest Pharmaceuticals Recalls

Oral Contraceptives
Qualitest Pharmaceuticals has issued a
nationwide, retail-level recall of multiple lots of oral contraceptives. T he
recall was because of a packaging
error. Select blisters were rotated 180
degrees within the card, reversing the
weekly tablet orientation and making
the lot number and expiration date no
longer visible. T his packaging error
and the potential for this error to have
affected other oral contraceptive products resulted in the company issuing
the recall of multiple lots.
As a result of this packaging error, the
daily regimen for these oral contraceptives may be incorrect and could leave
women without adequate contraception, and at risk for unintended pregnancy. T he company says these
packaging defects do not pose any
immediate health risks. However, it
says consumers exposed to affected
packaging should begin using a nonhormonal form of contraception
immediately and consult their health
care provider or pharmacist.

32

Pharmacies are being instructed to

contact consumers who have received
the affected product. The source of the
error is currently under investigation
and the company says its committed to
rectifying the issue in a timely manner.
The affected products and lot numbers
can be found at the following URL:
http://www.qualitestrx.com/pdf/
OCRecall.pdf. You may also contact
Shanna Malone for this information at
Shanna.Malone@beasleyallen.com.
Doctors, pharmacists or women
seeking additional information on this
recall, or consumers who have affected
products, should contact Qualitest toll
free at 1-877-300-6153 between the
hours of 8:00 a.m. And 5:00 p.m. CT
Monday through Friday for information
or to arrange return of any affected
product. The lot numbers can be found
on the bottom of the box or the individual blister card. Adverse reactions
or quality problems experienced with
the use of these products may be
reported to Qualitest toll free at 1-877300-6153 or to the FDAs MedWatch
Adverse Event Reporting program
either online, by regular mail or by fax.

Fiskars Brands Recalls

SmartPower String Trimmers
About 2,200 Fiskars SmartPower
String Trimmers have been recalled by
Fiskars Brands, Inc., of Madison, Wis.
Engine vibration during use of the
trimmers can cause wear on the fuel
line, leading to a propane fuel leak. The
Straight Shaft Trimmers propane canister can crack at the neck during use. In
addition, high temperatures may
develop near the Curved Shaft Trimmers plastic cutting guard, causing the
guard to deform and fall off. T hese
issues pose burn, fire and laceration
hazards to the user. This recall involves
the Fiskars SmartPower Propane
4-Cycle Straight Shaft String Trimmer
Model 67016935 and SmartPower
Propane 4-Cycle Curved Shaft String
Trimmer Model 67036946.
Both trimmers use propane fuel.
SmartPower is printed on the
lower shaft and near the pull-start
handle. Fiskars is printed on the
engine cover and on the plastic cutting
guard. The trimmers are black, silver
and orange. The trimmers were sold at
The Exchange stores, also known as
the Army and Air Force Exchange
Ser vice or AAFES, and online at
Amazon.com, Walmart.com, Powerequipmentdirect.com and Sure-

www.BeasleyAllen.com

Source.com, from January 2011 to July

2011 for between $220 and $280. Consumers should immediately stop using
the recalled trimmers and contact
Fiskars to receive a full refund. For
additional information contact Fiskars
Brands toll-free anytime 24 hours a day
at (877) 495-6645, or visit the companys website at www.fiskars.com

Home Fires Prompt Dehumidifier

Recall Re-announcement
LG Electronics Tianjin Appliance Co., in
cooperation with the U.S. Consumer
Product Safety Commission, is urging
consumers to check to see if they have
recalled Goldstar or Comfort-Aire
dehumidifiers. The company has reannounced the recall of about 98,000
of the dangerous dehumidifiers that
pose a serious fire and burn hazard,
and are believed to be responsible for
more than one million dollars in property damage.
The power connector for the dehumidifiers compressor can short circuit,
posing fire and burn hazards to consumers and their property. The dehumidifier s were fir st recalled in
December 2009 following eleven incidents, including four significant fires.
Since that time, the company has
received sixteen additional incident
reports of arcing, smoke and fire associated with the dehumidifiers, including nine significant fires. No injuries
have been reported. Fires are reported
to have caused more than $1 million in
property damage to seven homes in
six states.
Because of the severity of the risks,
CPSC and LG Electronics are concerned with the lack of consumer
response to the recall. Only 2% of the
98,000 consumers who purchased
these units have received a free repair,
which means that consumers and their
property remain at serious risk. Anyone
who has the recalled dehumidifiers is
strongly encouraged to immediately
stop using them, unplug them, and
contact LG Electronics for the free
repair.
The recall involves the 30 pint portable dehumidifiers sold under the Goldstar and Comfort-Aire brands. T he
dehumidifiers are white with a red
shut-off button, controls for fan speed
and humidity control, and a front-loading water bucket. Goldstar or Comfort-Aire is printed on the front. Model
and serial number ranges included in

this recall are listed in the table

below. The model and serial numbers
are located on the interior of the dehumidifier, and can be seen when the
water bucket is removed. The recalled
dehumidifiers were sold at The Home
Depot, Walmart, Ace Hardware, Do It
Best, Orgill Inc., and other retailers
nationwide from January 2007 through
June 2008 for between $140 and
$150. T hey were manufactured in
China. For additional information
about the recall and for the location of
an authorized service center for the
repair, contact LG toll free at (877) 2200479 or visit the companys website at
www.30pintdehumidifierrecall.com.

Target Recalls Embark Resistance

Cords Due To Injury Hazard
About 447,000 Embark Resistance
Cords and Cord Kits have been
recalled by Target Corporation, of Minneapolis, Minn. A black plastic ball
attached to the resistance cords door
anchor can unexpectedly release and
strike the user, posing an injury hazard
to consumers. Target has received
three reports of incidents in which
consumers were struck in the eye by
the door anchor ball. Two incidents
resulted in permanent vision loss, and
the severity of the injury in the third
incident is unknown. T his recall
involves Embark brand individual resistance cords and cord kits listed
below. The resistance bands are made
of green, blue or black rubber with
black foam handles and a door attachment. A strap of nylon webbing is
looped onto the band with a plastic
ball attached or encased that serves as
a door anchor.
Embark is printed on either the black
strap attached to the foam handle or
on the middle of the rubber cord itself.
Style Descr iption Embark Light
(tension) Resistance Cord (green)
Embark Medium (tension) Resistance
Cord (blue) Embark Heavy (tension)
Resistance Cord (black) Embark Resistance Cord kit (set of 3 cords in green/
blue/black stored in a mesh bag). The
lights were sold exclusively at Target
stores nationwide and Target.com from
July 2009 through August 2011 for
between $10 and $20. Consumers
should immediately stop using the
resistance cords and remove the door
anchor strap before resuming use or
contact the company to receive
instructions on how to repair the
cords to eliminate the hazard. For addi-

tional information, contact Target

Guest Relations at (800) 440-0680, or
visit the companys website at www.
target.com.

Target Expands Recall Of Step

Stools With Storage
Target Corporation has also recalled
about 341,000 Step Stools with
Storage. 206,000 were recalled on
August 4, 2011. T he wooden step
stools can break apart or collapse
under the weight of the user, posing a
fall hazard. Target has received 27
reports of the stools breaking or collapsing. Fourteen incidents involved
children, eight involved adults, and five
were incidents where the users age
was unknown. Two adults fractured
their wrists, and of those victims, one
also fractured her hip and pelvis. Additionally, six children and one adult suffered scrapes and bruising. T he
wooden step stool has two steps and
comes in various colors, including
natural, natural and red, white, pink,
blue and honey. The Circo step stool
has a lid on the bottom step that lifts to
provide storage. The Do Your Room
(DYR) step stool has a lid on the top
step that lifts to provide storage. The
step stools measure approximately 13
H x 13 5/8 W x 14 1/8 D. The Circo
brand name or DYR brand name and
UPC numbers are printed on a label
found underneath the step stool.
The stools were sold exclusively at
Target stores nationwide and online at
Target.com from January 2007 through
October 2010 for between $25 and
$30. Consumers should immediately
stop using the step stools and return
them to any Target store to receive a
full refund. For additional information,
contact Target at (800) 440-0680, or
visit the companys website at www.
target.com.

Target Recalls Chefmate Blender

Also, Target Corporation recalled about
304,000 Chefmate 6-Speed Blenders.
While in operation, the plastic pitcher
can separate from the blade assembly,
leaving the blade assembly in the base
and exposing the rotating blades. This
poses a laceration hazard to consumers. Target and the U.S. Consumer
Product Safety Commission have
received 11 reports of the blade assembly separating from the pitcher, seven
of which reported serious lacerations
to consumers fingers and hands. This

recall affects all Chefmate 6-Speed

Blenders, model BL-10. T he model
number is located on the bottom of
the base.
The blender consists of a six-inch tall,
white electrical base with five, white
speed-selector buttons labeled 1
through 5, one gray button labeled
Pulse/Off and the word Chefmate
in black letters on the front; a clear
plastic pitcher with a handle with
U.S. And metric volume measurement
markings; a white plastic lid with a
removable clear plastic lid stopper; and
a white plastic blade assembly with
two angled, stainless steel blades. The
blenders were sold exclusively at
Target stores nationwide from September 2007 to February 2011 for about
$14. Consumers should immediately
stop using the blenders and return
them to any Target store to receive a
full refund. For additional information,
contact Target Guest Relations at (800)
440-0680 or visit the companys
website at www.target.com.

Pacific Cycle Recalls Swing Sets

Due To Fall Hazard
About 5,500 Playsafe Dartmouth Swing
Sets have been recalled by Pacific
Cycle Inc., of Madison, Wis. The slingstyle swing seats can crack or split prematurely, posing a fall hazard to
consumers. Pacific Cycle has received
five reports of the sling-style swing
seats breaking during use, including
reports of minor injuries involving
bruises and scrapes. T his recall
involves Playsafes Dartmouth Swing
Set, model number 22-PS340, with date
codes FSD0115AA and FSD0315AA.
The model number and date code can
be found in the owners manual.
The swing set has six metal legs and
includes two swings with yellow
plastic sling-style seats, a yellow plastic
sliding board, a two-person glider with
yellow plastic seats, yellow plastic
trapeze hanging rings and a four-person lawn swing with yellow plastic
seats and footboard. Toys R Us stores
nationwide sold them from January
2011 through May 2011 for about
$270. Consumers should immediately
stop using the sling-style swing seats,
remove the seats from the swing set
and contact Pacific Cycle to obtain free
replacement seats. For additional information, contact Pacific Cycle toll-free
at (877) 564-2261 or visit the companys website at www.pacific-cycle.com

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33

or email customerservice@pacificcycle.com.

Nine Companies Recall Fuel Gel

For Firepots
Nine companies have recalled about
two million bottles and jugs of the gel
fuel used in outdoor patio decorations
known as firepots because of the risk
of serious burns. T he Consumer
Product Safety Commission says the
gel fuel has been linked to several
dozen cases in which people were
burned when they couldnt tell
whether the flame was out. Pouring
more gel on a burning pot can lead to
dangerous flares or burns.
The nine companies are Bird Brain Inc.
of Ypsilanti, Mich.; Bond Manufacturing
of Antioch, Calif.; Sunjel Company of
Milwaukee, Wis.; Fuel Barons Inc. of
Lake Tahoe, Nev.; Lamplight Farms Inc.
of Menomonee Falls, Wis.; Luminosities
Inc. of St. Paul, Minn.; Pacific Decor Ltd.
of Woodinville, Wash.; Real Flame of
Racine, Wis.; and Smart Solar USA of
Oldsmar, Fla. Marshall Group of Elkhart,
Ind., pulled out of the public
announcement at the last minute. The
CPSC is continuing to talk with that
company about a voluntary recall.
Folks were urged to stop using the
pourable gel fuel and to contact the
manufacturer or distributor for a
refund. T he CPSC warns that stop,
drop and roll or trying to smother the
f lames does not work. Flash fires
created by the thick, alcohol-based gels
are difficult to put out with water and
more effectively stopped with dry
powder extinguishers. The Commission began investigating firepots a few
months ago and issued a flash fire
hazard warning on pourable gel fuels
in June. This is a dangerous product
and shouldnt be used, according to
the CPSC.

American Woodcrafters Recalls

Bunk Beds Due To Fall Hazard
American Woodcrafters, of High Point,
N.C., has recalled about 180 Wood
Twin Bunk Beds and Loft Bunk
Beds. The guard rails on upper bunks
can crack and cause the mattress and
its support rails to collapse, posing a
fall hazard. The company has received
two reports of cracked guard rails
causing the mattresses and support
rails to collapse. No injuries were
reported. This recall involves upper
34

guardrails on twin-over-twin bunk beds

a n d t w i n - ove r - d o u bl e b e d l o f t
designs. The beds have a permanent
label attached to the headboard or the
footboard with the American Woodcrafters logo; SKU numbers, 1800-977
or 1800-969; PO Numbers: 103276,
103432, or 300038; and the manufacturing date. The beds were sold by furniture dealer s nationwide from
October 2010 to June 2011 for
between $600 and $1,000. Consumers
should immediately stop using the
upper beds and contact American
Woodcrafters or their furniture dealer
to arrange for the free replacement of
upper bunk guard rails. For additional
information, contact American Woodcrafters toll-free at (888) 429-7265, or
visit the companys website at www.
american-woodcrafters.com.

Candleholders Recalled
Frosted or clear glass votive candleholders with French vanilla-scented
candles, sold at Dollar Tree, Dollar Bill$,
Deal$ and Dollar Tree Deal$ stores
nationwide from December 2010
through April 2011 for about $1, have
been recalled. The glass votive candleholders can shatter while in use,
posing a fire and laceration hazard to
consumers. Consumers should immediately stop using the candleholders
and return them to the store where
purchased for a full refund. For information, contact Dollar Tree Stores
Inc. At 800-876-8077.

LED Night Lights Recalled By

Camsing Global Due To Burn
Hazard
About 10,000 LED night lights have been
recalled by Corvest Acquisition Inc. (now
Camsing Global LLC), of Largo, Fla. The LED
night lights can overheat, smolder, and melt
which may cause minor burns to consumers. The company has received five reports
of the recalled LED night lights overheating,
smoldering or melting. No injuries have
been reported. The LED night light contains
flame retardant elements, plugs into an
electrical outlet, and has a white or blue
LED bulb and a clear bulb cover. Model
SBD01, the number E314462 and Made
in China are stamped on the back of the
night lights plastic white base. The night
lights measure about 1 3/4 inches wide by
3 3/4 inches high. The night lights were distributed by various companies as a free promotional product, imprinted with the
companys name from December 2010

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through March 2011. Consumers should

immediately stop using the recalled night
lights and discard them. For additional information, contact Camsing Global toll-free at
(877) 924-4624 or visit the companys
website at www.camsingglobal.com.

Recall Of Little Tikes Play Tool

Sets
More than 1.7 million toy workshop
and tool sets from toy-maker Little
Tikes have been recalled because of
choking concerns. According to the
Consumer Product Safety Commission,
the play tool sets have oversized,
plastic toy nails that might cause
young children to choke. This recall is
an expansion of a 2009 recall of about
1.6 million workshop sets and trucks
with the same toy nails. T
he new recall
involves an additional 11 models.
Little Tikes of Hudson, Ohio, has
reported two additional incidents in
which children choked when the toy
nail became lodged in their throat.
Both children made a full recovery. The
incidents occurred before the 2009
recall. T he workshop and tool sets
were sold by retailers nationwide from
1990 through 2004.
Source: Associated Press

Dolls Recalled By Pottery Barn

Kids Due To Strangulation Hazard
Pottery Barn Kids, a division of Williams-Sonoma Inc., of San Francisco,
Calif., has recalled Chloe, Sophie and
Audrey soft dolls. This includes about
81,000 in the United States and 1,300
in Canada. The hair on the Chloe and
Sophie dolls may contain loops that are
large enough to fit around a childs
head and neck, and the headband on
the Audrey doll, if loosened, can form a
loop that fits around a childs head and
neck. These loops can pose a strangulation hazard. T
he company has received
five reports of dolls with looped hair,
including one report in which a loop
of the Chloe dolls hair was found
around the neck of a 21-month old
child. T
he child was not injured.
This recall involves soft dolls sold
under the names Audrey, Chloe and
Sophie. The dolls measure about 17
inches high and have hair made of
yarn. Audreys hair is black, Chloes
hair is dark brown and Sophies hair is
blonde. The dolls are part of Pottery
Barn Kids Girl Doll Collection. The
dolls name can be found on a tag

sewn onto her bottom. They were sold

exclusively at Pottery Barn Kids stores
nationwide, online at www.potterybarnkids.com and through Pottery Barn
Kids catalogs from July 2006 to April
2011 for about $40. Consumers should
take the dolls away from children
immediately and cut the looped hair of
the Chloe and Sophie dolls and remove
the headband of the Audrey doll to
eliminate the hazard. Consumers may
also call Pottery Barn Kids for instructions on how to return the affected
dolls for a merchandise credit. For additional information, contact Pottery
Barn Kids toll-free at (855) 880-4504 or
visit the companys website at www.
potterybarnkids.com

More Ground Turkey Recalled

Because Of Salmonella

All ground turkey made at the Springdale plant has P-963 or 963 on the
package, in a USDA seal or perhaps on
the cellophane. Consumers who
bought products bearing that identification number can call 1-888-812-1646
for instructions on what to do. The
recall covers products made on Aug.
23rd and 24th. Cargill also is recalling
ground turkey made on Aug. 30th and
31st pending a positive match with a
sample, the USDA said.

Safeway Recalls Jumbo Rocky

Ford Cantaloupe

Cargill Inc. Announced a second recall

of ground turkey products last month
after a test showed salmonella in a
sample from the same Arkansas plant
tied to a recall issued in August. The
second recall is much smaller than the
one the company issued in August for
3 6 m i l l i o n p o u n d s o f gr o u n d
turkey. That recall followed a salmonella outbreak that federal health officials said had sickened 107 people in
31 states, killing one person.
At press time, no illnesses had been
tied to the second recall, which was
initiated after a sample from the companys plant in Springdale, Ark., tested
positive for salmonella, the U.S. Department of Agriculture said. Cargill halted
production of ground turkey products
at the plant on August 2nd in anticipation of the recall announced the next
day. Equipment was taken apart and
steam-cleaned. Limited production
resumed August 10th after the USDA
approved additional anti-bacterial
safety measures.
The sample that tested positive for salmonella was taken on August 24 th,
according to the USDA. It was the same
strain of salmonella tied to the earlier
illnesses. Cargill added two additional
anti-bacterial washes to its processing
process in Springdale after the first
recall, according to the company.
Ground turkey production at the
Springdale plant was suspended
again. The Minnesota-based company
was looking at what other safety procedures might be needed. Production
of other products, such as whole
turkeys, continues. The second recall
covers about 185,000 pounds of

ground turkey products, including

trays of ground meat, patties and
chubs, the USDA said. The products
were distributed nationwide under the
Kroger, Fresh HEB and Cargills Honeysuckle White brands.

In cooperation with the Jensen Farms

recall of Rocky Ford whole cantaloupe
due to possible Listeria contamination,
Safeway has recalled Jumbo Cantaloupes grown in the Rocky Ford
region, supplied by Jensen Farms, and
sold in Colorado, Nebraska, New
Mexico (Aztec and Farmington), South
Dakota and Wyoming between August
30th and September 6th. Safeway customers who purchased the recalled
cantaloupe and still have it in their
homes should discard it or return it for
a full refund. Cantaloupes currently in
stores are not subject to this recall as
they do not come from Jensen Farms
or the Rocky Ford region of Colorado.
Jensen Farms is not a main supplier for
Safeway.
The Food and Drug Administration has
warned consumers to not eat Rocky
Ford-region cantaloupe shipped by
Jensen Farms because the product has
the potential to be contaminated with
Listeria and may be linked to a multistate outbreak of listeriosis.
As we have previously reported, Listeriosis can be fatal, especially in certain
high-risk groups. These groups include
older adults, people with compromised immune systems and certain
chronic medical conditions (such as
cancer), and unborn babies and newborns. In pregnant women, listeriosis
can cause miscarriage, stillbirth, and
serious illness or death in newborn
babies, though the mother herself
rarely becomes seriously ill. Customers
who have questions about the recall
can contact Jensen Farms via email at
recall@rfordcantaloupe.com or phone

1-800-267-4561. They can also contact

Safeway at 1-800-SAFEWAY.

E. Coli Scare Prompts Tyson To

Recall Ground Beef
Tyson Fresh Meats Inc. has recalled
about 131,300 pounds of ground beef
that could be contaminated with E.
coli. The U.S. Department of Agriculture became aware of the problem
when Ohio health authorities reported
that a family had become ill with E.
coli. Ground beef in that familys home
tested positive for the bacteria. The
products being recalled include
Kroger-brand ground beef and Butchers Brand beef and generic label beef,
all of which were produced on August
23rd. The Kroger beef was distributed
in Tennessee and Indiana; the Butchers
beef distributed in North and South
Carolina. The generic beef was distributed in Delaware, Florida, Georgia,
Maryland, Illinois, Indiana, Missouri,
New York, Ohio, Tennessee, Texas and
Wisconsin.
Once again, there were so many recalls
since the September issue that we were
unable to get them all in this issue. If you
need more information on any of the recalls
listed above, or would like information on a
recall that you are aware of that we havent
listed, please visit our firms web site at
www.BeasleyAllen.com/recalls. We would
also like to know if we have missed any significant recall that involves a safety issue
this month. If so, please let us know. As indicated at the outset, you may also contact
Shanna Malone at Shanna.Malone@beasley
allen.com for more recall information.

XXIV.
FIRM ACTIVITIES
Employee Spotlights
Dana Taunton
Dana Taunton received her law degree in
1993 from the University of Alabama. She
worked as a law clerk for the Honorable Ira
DeMent, United States District Court Judge
for the Middle District of Alabama. Prior to
joining our firm in 1998, Dana worked for a
prominent Defense firm and had a brief
stint with the Alabama Attorney Generals
office. Since coming to work for the firm,
Dana has handled complex business and
commercial litigation, products liability and

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35

personal injury litigation. Currently, she

focuses her practice in the areas of product
liability and personal injury. Many of her
product liability cases have resulted in
multi-million dollar settlements for her
clients. Dana also serves as the Lead Appelant lawyer for the firms Product Liability/
Personal Injury Section.
Dana is a frequent speaker at legal seminars on various topics relating to personal
injury law. She has also given updates on
tort law on behalf of the Montgomery Bar
Association. Additionally, she has lectured
on a variety of legal topics for several organizations including the Montgomer y
County Bar Association, the National Business Institute, the Alabama Trial Lawyers
Association, and the Alabama Bar Institute
for Continuing Legal Education.
Dana is a member of the Christian Trial
Lawyers Association; Alabama Association
for Justice; American Association for Justice;
Montgomery County Bar Association; Montgomery County Trial Lawyers Association;
Alabama State Bar Association; and Trial
Lawyers for Public Justice. She recently was
selected as Chairperson for the Womens
Section of the Alabama State Bar.
Dana, who was born and raised in Butler,
Ala., is married to Derrick Taunton. They
have two daughters, Betsie and Abigail. The
family attends Frazer Memorial Methodist
Church in Montgomery. Dana is a very good
lawyer, a valuable member of the firm and
we are certainly blessed to have her with us.
Stephanie Stephens
Stephanie Stephens, who has been with
the firm since April 2001, is a Law Clerk in
our Personal Injury/Products Liability
Section. She works directly with the Personal Injury lawyers in researching, writing,
and responding to various pretrial motions,
orders and appellate proceedings.
Stephanie graduated Summa Cum Laude
from Troy University in 2007 with a double
major in Political Science and Psychology.
Before law school, she worked as a Crisis
Counselor with the Federal Emergency
Management Agency. Stephanie also graduated Summa Cum Laude from Thomas
Goode Jones School of Law in May 2011.
While in law school, she received ten Best
Paper Awards and the Best Advocate Award
in Trial Advocacy. She served as a Senior
Editor on the Faulkner Law Review and as
a Senior Member of the Board of Advocates.
Stephanie loves music and has been playing
guitar since she was 11. She also enjoys
spending time with her five-year-old Pomeranian named Stormy. Stephanie participated
in Seat Check Saturday in a special safety
project for the firm recently and was featured in a news report by WAKA television. This project was to make sure parents
know how to use a childs safety seat.
36

Stephanie says she is fortunate to have a

large family, including an older sister, a
younger brother, and three step-brothers.
She also has four nephews and one niece.
Stephanie, according to several friends,
stays pretty busy trying to keep up with all
her family. Stephanie, who is currently
attending Morningview Baptist Church, is a
very good and dedicated employee. We are
fortunate to have her with the firm.
Jake Jeter
Jake Jeter served the past two summers
as an intern before becoming a full-time
employee with the firm in August. He currently is a Staff Assistant in our Consumer
Fraud Section. Jake works with lawyers and
other staff researching various fraud cases.
He is currently assisting in the Toyota document review.
Jake graduated high school from Bayside
Academy in Daphne, Ala., and attended
Auburn University Montgomery where he
graduated with a B.S. in Finance in 2008.
Jake recently completed his J.D. At Thomas
Goode Jones School of Law in May 2011.
While in law school Jake had the privilege
of serving on the Honor Court from 20082011, and was the Honor Court Chief
Justice from 2010-2011. He also participated as a regional finalist in the ABA
Dispute Resolution and Mediation Competition in 2011.
During his time in law school, Jake and
his service dog Phoenix were featured in a
national advertising campaign for MilkBone, which is a major sponsor of the
Canine Assistants program. Jake has a light
sport pilots license and really enjoys flying.
He and his father are currently building a
Vans RV-12 kit aircraft which they hope to
finish in the near future. He also enjoys
hunting and fishing. Jake is a member of the
Central Alabama Gun Club and recently
started reloading ammunition. You have
probably figured out by now that Jake leads
a most interesting life. Jake is a very good
employee and we are pleased that he
decided to come on as a full-time employee.
April Worley
April Worley came to work at the firm in
June 2001 as a Legal Assistant for Roger
Smith in our Mass Torts Section. Currently,
she is working on cases in the Actos, SSRI
(Selective Serotonin Reuptake Inhibitor),
and Yaz/Yasmin/Ocella cases. T his mass
torts litigation keeps April extremely busy.
Previously, she had worked on other significant pharmaceutical litigation, including
Rezulin, Serzone, Celebrex and Vioxx cases.
April holds two Masters Degrees from
AUM, one in Judicial Administration and the
other in Public Administration.She received
her Bachelors Degree from AUM as well in
Justice & Public Safety. Currently, April

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serves on the Paralegal Studies Advisory

Committee at the school.
April has one son, Micah, who recently
turned 12 years old and is a sixth grader at
Carr Middle Magnet. Micah was diagnosed
with cancer in late April and is currently
undergoing chemotherapy treatment at
Childrens Hospital in Birmingham. Micah
is a courageous young man and he is handling this challenge very well. We have all
been praying for Micah and will continue
to do so.
After a hectic week of work, April says
she enjoys spending weekends with her
son at the beach and watching SEC football,
especially games involving the Crimson
Tide. April is a very good employee. She is
dedicated to her work and the clients cases
that she works on. We are blessed to have
April with us. She has been a real inspiration to everybody in the firm.

XXV.
SPECIAL
RECOGNITIONS
Morris Dees And The Southern Poverty
Law Center Are To Be Commended
The outstanding work by the Southern
Poverty Law Center (SPLC) over the years
hasnt always been fully understood, nor
appreciated. Fortunately, the SPLC has been
dedicated to fighting hate and bigotry and
to seeking justice for the most vulnerable
members of our society. That dedication is
still quite evident. Using litigation, education, and other forms of advocacy, the SPLC
works toward the day when the ideals of
equal justice and equal opportunity will
finally be a reality. In fact, that should be the
hope and prayer of all Americans. The SPLC
has touched the lives of millions by seeking
justice for those who badly need a champion to fight their battles. Combating racist
extremists has always been the main thing
at the Center. But teaching tolerance to millions of children is also very important and
that work by folks at the Center will pay
dividends in the future.
All of these accomplishments were
funded entirely by SPLC supporters. It
should be noted that SPLC accepts no legal
fees from its clients, nor does it receive any
government money. In my opinion, the
SPLC is the single most effective organization in this country when it comes to fighting hate groups in the courtroom and
teaching tolerance and acceptance in the
classroom. Morris Dees and all of the
lawyers and staff at the Law Center are to

be commended for their past accomplishments and must be encouraged to keep up

their good and badly-needed work.

New Alabama State Bar Award Honors

Judge W. Harold Albritton

Public Citizen Turns 40

Public Citizens record of achievement is
a testament to the dedicated people who
founded the organization, and who envisioned and innovated new modes of advocacy. Those persons include Ralph Nader,
Joan Claybrook, Dr. Sidney Wolfe and Alan
Morrison. Public Citizens record is a testament, as well, to the hundreds of enormously talented staff who have turned the
early vision into reality.
Public Citizen has succeeded by combining hard work, investigative acumen, sophisticated advocacy strategies, and intellectual
creativity, with a passion for justice and
democracy and a powerful commitment to
improve the lives of Americans. A distinctive feature of Public Citizens advocacy
approach has been to set its sights on what
it knows is rightnot just what seemed
politically feasible at the time and thats
good. Public Citizen has succeeded over the
past 40 years by taking an unreasonable
position and then changing the terms of
debate, so what seemed impossible
becomes possibleand then winnable.
Forty years after its founding, Public
Citizen is now a public trust. The organization remains populated with gifted and
enthusiastic staff who are adept at deploying old and new advocacy tools. T he
current group is committed to carrying on
Public Citizens grand and enduring traditions as they pioneer new strategies to
deepen democracy, guarantee the right to
health and safety, achieve justice for all, and
promote stewardship of the planet.

Hall Of Fame Inducts Howell Heflin

The late Howell Heflin was inducted into
the Alabama Mens Hall of Fame last
month. The Tuscumbia native, who died in
2005, served 18 years with distinction in
the U.S. Senate. He was described at the
induction ceremony as a judge, statesman
and patriot. The Hall of Fame recognizes
men from Alabama who made significant
contributions on a state, national or international level.
Howell Heflin was an outstanding trial
lawyer who went on to become Chief
Justice of the Alabama Supreme Court
before being elected to the U.S. Senate. As
Chief Justice, he helped pass the Judicial
Article of 1973, which is the only major
revision thus far to the Alabama Constitu-

tion. Howell Heflin was a great Alabamian

and a good man.

A new award created by the Alabama

State Bar honoring leadership in providing
free legal services will be presented this
month to U.S. District Judge W. Harold
Albritton III. Incidentally, and most fitting,
Judge Albritton is the man for whom the
award is named. While State Bar president
(1990-91), Judge Albritton helped create the
organizations Volunteer Lawyers Program
to provide free legal service to the poor and
disadvantaged. Some 25% of the states
lawyers participate in the program. Jim
Pratt, the current State Bar president, said in
a news release:
Judge Harold Albritton has demonstrated a selfless commitment to
increasing access to justice for Alabamians. His extraordinary work provides us with inspiring examples of
what is possible and helps raise
public awareness of the importance
of access to justice for all, not just for
those who can afford it.
Asked during his 1991 confirmation
hearing before a U.S. Senate committee
about the need for lawyers to provide free
legal service, Judge Albritton described it as
the professions highest calling, telling the
Senators:
It is something that should not be
done grudgingly, but should be
embraced willingly. T hey will never
receive a fee during their entire
career that will make them feel more
pride in being a lawyer than they will
by the grateful tears on the cheek of
someone who cannot afford legal services benefitting from their help.
Judge Albritton is certainly deserving of
this honor. I can think of nothing better
than a public official being recognized for
really having a concern for the poor. Judge
Albritton is to be commended for his work
in this area of concern.
Source: Al.com

and become lost. The program is called the

missing link to lost loved ones, and it
appears to be a program that is badly
needed. A labamas total population is
4,779,736, and 933,919 of those individuals
are age 60 and older, according to the 2010
U.S. Census. In fact, 75,684 of those individuals are 85 and older. Unfortunately, individuals with Down syndrome, Autism, and
other cognitive issues are also prone to
wandering.
The Alabama Department of Public Safety
is heavily involved in this program. T he
Department is working hard to get the
message out to Alabama citizens of its existence and availability. Unfortunately, it
appears many people are totally unaware of
this program. One aspect of the program is
the furnishing of Project Lifesaver bracelets. About 80,000 individuals in Alabama
have Alzheimers, but fewer than 1,000 of
those individuals have received the bracelets. Each Project Lifesaver bracelet costs
$300 and it will cost about $400,000 annually to fund the project in the State of
Alabama. The bracelets will allow a person
who has wandered away and become lost
to be found quickly.
For additional information on Project
Lifesaver, please contact the Alabama
Department of Public Safety at (334) 2424055. I am convinced this program will
help folks and save lives. We will give a
more detailed report on this program in the
November issue.

XXVI.
FAVORITE BIBLE
VERSES
Laura Pittman, a longtime friend, sent in
two of her favorite verses for this issue.
Laura, one of the best cooks in Montgomery,
is an avid Auburn football fan. She is also
extremely well-versed in the field of music.
Laura says 1 Peter 3:14 has had a special
meaning for her over the years. She also
wanted to include Isaiah 41:10.
And who is he who will harm you if
you become followers of what is
good?
1 Peter 3:14

Project Lifesaver Is A Good And

Needed Program
Project Lifesaver is a program of specialized operations designed to locate missing
individuals who have such conditions as
Alzheimers, Down syndrome, and Autism,
all individuals who are likely to wander off

Fear not, for I am with you; Be not

dismayed, for I am your God. I will
strengthen you, Yes, I will help you, I
will uphold you with My righteous
right hand.
Isaiah 41:10

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37

is known as Harry the Bug Man in Lee

County because of his many years working
in the pest control industry. Harry also sent
me some good information to read along
with a great photo of the Toomer Corner
oak trees. My daughter Bee, who lives in
Auburn, tells me that Harry is a good man
and a dedicated Christian, attending
Auburn Methodist Church. Bee tells me
that Harry is also a huge Auburn football
fan and supporter.

whatever it takes to restore order and

to correct wrongs.

I can do ALL these things through

Him who gives me strength.

And now the LORD says, Who formed

Me from the womb to be His Servant,
To bring Jacob back to Him, So that
Israel is gathered to Him (For I shall
be glorious in the eyes of the LORD,
And My God shall be My strength)

Phil. 4:6,7 & 13

Isaiah 49:5

So now is the time to take stock of

our own lives and to pray for our
families, all others and especially
those who must lead and direct
others, and for our Country as a
whole.We must unite like never before
because the enemy is not like one we
have fought before. Remember too, we
will survive all of thisas bad as it
seems nowbut only if we wake up
spiritually!!

Karen Stanfield, who is a legal assistant at

a Texas law firm, sent in the following verse
for this issue. Karen says she reads the
words from this verse through a lot of troubled days and nightsand when she knows
that she has to be at her very best.
Do not be anxious about anything,
but in every situation, by prayer and
petition, with thanksgiving, present
your requests to God.
And the peace of God, which transcends all understanding, will guard
your hearts and your minds in Christ
Jesus.

My very good friend Ray Warren, a Montgomery resident, furnished a verse that he
says has brought peace and comfort to him
and to his wife JoAnn over the years. Ray
has had a distinguished career. After retiring
as a claims representative superintendent
with State Farm Insurance Co., Ray
remained very active. He retired as a
Colonel in the Alabama Army National
Guard after 37 years of military service. Ray
was then appointed as a Brigadier General
in the Alabama State Defense Force.
Ray has served the State of Alabama in
several roles, having served on the State
Ethics Commission, the State Personnel
Board, the State Health Coordinating
Council, and on the Board of Trustees at
Alabama State University. He also served a
term as State President of the AARP. As you
can see, Ray has been a very busy man. Even
with all of his accomplishments, and his
very busy schedule, Ray says his love for
Jesus has really been the highlight of his life.
Peace I leave with you, My peace I
give to you; not as the world gives do
I give to you. Let not your heart be
troubled, neither let it be afraid.
John 14:27
Michelle Browder, who is with the Montgomery Rescue Mission, sent in her favorite
verse for this issue. Michelle works hard to
provide for folks who are in need and she
has been a blessing to many.
For I was hungry and you gave Me
food; I was thirsty and you gave Me
drink; I was a stranger and you took
Me in; I was naked and you clothed
Me; I was sick and you visited Me; I
was in prison and you came to Me.
Matt. 25:35- 36
Harry Gill, who lives and works in
Auburn, sent in a verse for this issue. Harry
38

XXVII.
CLOSING
OBSERVATIONS
Reflecting On September 11, 2001
The 10th anniversary of the events of September 11, 2001 brought about a number of
special events around the country. Every
person living on that fateful day has a vivid
recollection of the tragic events as they
unfolded. I know that I do. I first got a call
from a friend telling me to get to a television quickly to see what was happening. I
like many othersthought a small plane
had accidently crashed into one of the Twin
Towers. But when the second crash
occurred, I realized it was more than an
accidental crashmy country was under
attack by terrorists. As the day drug on,
things progressively got worse. The country
was in a panic. My wife Sara kept a message
that I sent to the Beasley Allen family that
morning. Just before the 10th anniversary,
she found it at home and gave it to me. I am
setting this message out below.
I realize the events of this day have
folks upset and concerned for our
Country. We are facing a crisis like we
have not seen in our history. Please
pray for all of the folks who have lost
family members and friends and also
pray to bring calm and reason to
those who must lead us during the
coming days. Panic is expected and
that is exactly what the evil persons
who planned and carried out this terrible series of events had in mind. At
times like this it makes me realize
that we have to depend on our God!!
Remember He has the power to do

www.BeasleyAllen.com

This will perhaps be the thing that

returns our Nation and our leaders
to a belief in and dependence on the
Almightyeven though it involves
terrific loss of life and misery that
will take time to heal. We have taken
much too much for granted and have
forgotten what life is all about.

Rev. Walter Allbritton, one of the pastors

at St. James United Methodist Church, put
everything in proper perspective when he
wrote the following account of the happenings on 9/11. T
his is what Walter had to say:
The 9/11 tragedy put courage and
confusion before the eyes of the world
On that fateful morning we watched
with horror as the plans of evil men
were carried out. In stunned disbelief
we saw innocent people dying in the
flames and smoke of crumbling
buildings.
Told that a plane had crashed into
one of the World Trade Centers in New
York City, we assumed it was an accident. It had never entered our minds
that terrorists would hijack a passenger plane and use it as a weapon of
destruction. But we realized it was no
accident when our television screens
showed us a second airliner flying
straight into the other twin tower.
Both towers were burning. Both
would soon crumble to the earth as
ugly plumes of smoke seemed to
engulf Manhattan. People blackened
by the smoke and dust were running
in the streets. Then the news reported
that another plane had crashed into
the Pentagon in Washington. The Pentagon was burning too. Later there
was word of even another plane
going down in a field in Pennsylvania. We remained glued to our televisions, wondering if we would soon
see a plane flying into the nations
Capitol or perhaps the White House.
Watching, our emotions ran wild. We
were angry at those who had carried

out these fiendish attacks. We were

bewildered, unsure how to respond.
We felt compassion for the innocent
people who were suffering and dying.
Some of us cried; some of us cursed.
Most of us prayed, though we were
not sure what to ask God to do. We
were under attack but there was no
way to strike back, no one out there
against whom we could retaliate. Our
attackers had intentionally died in
the same inferno they had created for
innocent civilians. Our army, the
greatest standing army in the world,
did not shoulder one rifle. There was
no sniper to find and shoot out of a
tree. Our nation and its leaders
seemed helpless. It was a terrible, terrible day to be an American.
Looking back after 10 years, a few
conclusions may be helpful. Tragedy
can unite people. For a little while,
after 9/11, we were all Americans. We
were family. We were not white or
black or Hispanic; we were not Democrats or Republicans. We were not
Baptists, Methodists or Catholics. We
were Americans. Our new unity was
symbolized by the singing of God
Bless America at so many public
events. We bonded as we sang, reaching out to God together, acknowledging our need for divine help in
dealing with terrorism. We reflected
on our history, that America was
founded with the help of almighty
God and that we are not likely to
survive these turbulent times unless
we as a nation are willing to trust
and honor almighty God.
On 9/11 two things were displayed
vividly before the eyes of the world:
courage and confusion. T he courage
of the first responders was remarkable. It will remain an unforgettable
example of men and women at their
best, willing to lose their own lives in
an effort to save others. As Christians
such courage reminds us of our Lord
Jesus who said, Greater love has no
one than this, that he lay down his
life for his friends. The first responders did just that; they sacrificed their
lives for their fellow citizens. You
could say that the terrorists who flew
the passenger planes into buildings
had courage. But it was a different
kind of courage. They had the
courage to die while killing innocent
people. It seems a sacrilege really to
give the terrorists credit for courage.

Better to call it insanity than

courage. This much is certain: the
courage of the first responders
impacted our lives like few things we
have ever experienced.
That leads me to confusion. T he terrorists left an unforgettable example
also, a tragic example of warped
thinking. To suppose that God is
pleased by the killing of innocent
people is the epitome of confused
thinking.You could have more respect
for the terrorists if they had removed
the passengers from the planes and
then committed suicide by flying the
planes into their targets. The monstrous deeds of the terrorists reveal
the outrageous behavior that warped
thinking can produce. While we are
far from perfect, we should thank
God for whatever clarity of thinking
we have, not the least of which is that
life is precious. We value life as a gift
of God. Thus people are worth risking
your life to save.
As we observe 9/11 we do well not to
complain but to draw lessons from
the courageous examples of those we
honor today, lessons that can help us
live nobler lives. Let us ask for this
blessing from almighty Godthat he
would save us from the confusion of
warped thinking and give us such
clarity of mind that we will choose to
live with courage and honor no
matter what evil others may choose.
Each of us has a choice: to live as a
channel of hate and death or to live
as a channel of love and life.
Ere this day ends take a moment to
thank God for the courage of those
whose example inspires us to do the
right thing, for the right reason, every
time a decision is thrust upon us. God
bless America!
Rev. Walter Allbritton
St. James United Methodist Church

Monthly Reminders
If my people, who are called by my
name, will humble themselves and
pray and seek my face and turn from
their wicked ways, then will I hear
from heaven and will forgive their
sin and will heal their land.

All that is necessary for the triumph

of evil is that good men do nothing.
Edmund Burke
Woe to those who decree unrighteous
decrees, Who write misfortune, Which
they have prescribed. To rob the needy
of justice, And to take what is right
from the poor of My people, That
widows may be their prey, And that
they may rob the fatherless.
Isaiah 10:1-2
The only title in our Democracy superior to that of President is the title of
Citizen.
Louis Brandeis, 1937
U.S. Supreme Court Justice

XXVIII.
PARTING WORDS
All of us have times when things around
us seem to be overwhelming and we oftentimes, as a result, might even find ourselves
in sort of a panic. Any person who works in
litigation, or in work that involves problemsolving of any kind, deals with difficult
issues, deadlines and on occasion surprises,
almost on a daily basis. A friend sent me a
prayer last month, which came at a time
when my workload was getting a little out
of hand. I must confess that I was starting to
feel the pressure of what I was facing at the
time. This message was most timely and it
allowed me to put my life in the fast lane
in the proper perspective. It also reminded
me that what I do for a livingas a trial
lawyerhelps folks who really need help. I
then realized that I should consider myself
blessed to be in the business of helping
others. All of the stress and concern in my
life suddenly went away.
Father God, with You all things are possible. Thank You for the presence of Your
Spirit. May Your power flow into my life
today and help me impact others for Your
Kingdom. In Jesus name, in the power of
the Holy Spirit, I pray. Amen. <><
Hopefully, this prayer will help some of
our readers. I know that it did help me. May
God continue to bless you and your families
in every way.We are all blessed to live in the
United States of America!

2Chron7:14

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