Left to right - front row: Michael Hoffman, Patrick Hamilton, John Parisi, Victor Bergman, John Shamberg, Lynn Johnson, Steven Brown, Stephen Six. Left to right - back row: Kristi Razack, Jennifer Spooner, Jill Fordham, Patricia Merrill, Beverly Allen, Deana Wagoner, Stephanie LaSalle, Barbara Kearns, Diane Huey, Jill Miller, Susan Gibson, Gina Richardson, Kate Roades.
4551 West 107th Street, Suite 355
Overland Park, KS 66207
913-642-0600
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Kansas City, KS 66101
Scarritt Arcade Building
819 Walnut Street, Suite 205
Kansas City, MO 64106
www.sjblaw.com
In This Issue
- Verdict in Missouri Malpractice Case
- Neurosurgeon's Malpractice Leads To "Wentling" Settlement in Kansas - Wrongful Death Action
- Tire Defect Litigation
- Lynn Johnson Elected to Inner Circle of Advocates
- Raising the Non-economic Cap
- False Claims Act Cases
- Confronting The Missouri Periodic Payments Statute
Welcome
We are pleased to present this holiday issue of our newsletter.
In this issue we feature case reports on a noteworthy Missouri verdict, another "Wentling" settlement in a Kansas medical negligence case, a feature on the firm's tire defect litigation, and an important call to raise the cap on non-economic damages in the State of Kansas.
As the end of the year and festive holidays approach, all of us here at Shamberg, Johnson & Bergman wish you and yours a happy and safe holiday season and a new year filled with health, happiness, peace and success.
False Claims Act Cases - Unique Law Makes Everyone a Winner
Win for Justice: dishonest profiteers who fleece the public welfare system are exposed and held accountable. Win for the Public: the badly strapped and sagging federal budget is significantly replenished. Win for the whistleblower: they are rewarded for their trouble and efforts. Ten percent of Medicare's budget, or roughly $17 billion, goes to pay false or inflated claims from health care providers. Attorneys have an opportunity to rectify some of the abuse through the False Claims Act.
Passed at the request of Abraham Lincoln in 1863, the False Claims Act, 31 U.S.C. § 3729 et seq., provides financial incentives for "whistleblowers." Under the Act a person who discloses the existence of fraud to the government by filing a False Claims Act case is rewarded by receipt of between 15% and 30% of the total amount recovered.
The amount the relator, or "qui tam plaintiff" will receive depends on who prosecutes the action. By law, the Department of Justice has the first option to prosecute the claim. Such prosecutions have been targeted as a high Justice Department priority nationwide. If the government agrees to prosecute the lawsuit, then the relator receives no more than 25% of the recovery. However, if the government elects not to intervene, then the relator gets between 25% and 30% of the amount recovered.
Since 1986, False Claims Act cases have generated more than one billion dollars in recoveries to the federal treasury, which is a very small part of the total loss. The totals recovered keep accelerating every year as larger fraud schemes are uncovered. These cases represent a growing area of our firm's practice.
Relators under the False Claims Act are entitled not only to a portion of the proceeds recovered, but also to reasonable attorneys fees, costs, and expenses. This makes the False Claims Act cases particularly attractive federal civil actions because the recovery is not diminished by litigation costs and expenses.
Recoveries can be large even where the actual amount at issue is not particularly significant on a per claim basis. This is because the court first trebles the damages, and then tacks on a civil penalty for each fraudulent claim submitted in an amount no less than $5,000 and no more than $10,000. Just 100 small false claims can easily add up to between $500,000 and $1,000,000 in civil penalty liability alone. For example, an $8.00 overcharge billed to 100 patients becomes a potential liability of $1,002,400.00 because of the civil penalty provisions.
False claims cases can be found in the process of doing medical records reviews (e.g. hospital or home care companies charging for services not provided), verifying Medicare or Medicaid liens, in the context of employment law matters, or even in the process of helping friends or relatives deal with medical bills or providers.
Workers in health care settings discharged for various reasons may have specific knowledge of false or fraudulent claims made by their present or former employers. Of the cases filed by this firm in 1996 and 1997, nine of the relators were former hospital or business employees with direct knowledge of fraudulent and inflated claims. Most had documents or testimony that directly supported their claims.
Time is of the essence in filing a False Claims Act case. While the statute of limitations stretches back six years, the statute provides recovery only to the first individual to file and disclose the existence of the fraud. The Act is somewhat technical and exacting. There is a mandatory sealing period during which the existence of the suit cannot be disclosed. Violating the seal can be grounds for dismissal. More importantly, the sealing period cuts off the relator from the normal pre-trial discovery processes since the Complaint cannot be served on the opposing side until the Department of Justice makes a decision whether to intervene.
The seal provision also makes it difficult for the relator's attorney to conduct an independent investigation into the merits of the claim. Since tipping off the target of the investigation might arguably violate the seal provisions, the relator's attorney is somewhat limited in terms of an active investigation of the claim.
Our firm has developed knowledge and experience in these complex and worthwhile matters.
Investigating Tire Defect Cases
Michelin HiTour 79X tire used on the Honda Goldwing motorcycle. Our firm is currently litigating cases in Kansas and Idaho arising from the failure of this tire.
When investigating a serious personal injury or death case arising out of an automobile or motorcycle collision, always be alert to the possibility that factors other than the driver's action may have contributed to the collision or to the severity of the injury. Some examples are highway design defects, traffic signal malfunctions, defects in vehicle design or manufacture, or malfunctions such as a defective tire. In past issues of the newsletter, available from our office or on the SJ&B website, we have addressed many of the above subjects. The focus of this article is on tire defect cases.
A tire defect case is based upon the failure of a tire manufacturer to fulfill its duty to design and manufacture a reasonably safe tire that will not fail when subjected to real world use. It is up to the attorney to consider and evaluate whether a tire defect contributed to cause an accident.
Step 1:
Preserve all of the evidence. If there is any possibility that a defective tire contributed to cause an accident, all physical evidence must be located, impounded and stored in a safe place in its post-accident condition. It is critically important to obtain the tire and wheel at issue, which may mean purchasing the vehicles involved. In addition, all accident reports and investigative documents including officers' field notes and photographs of the scene or vehicles should be obtained. Witness statements should be taken while the events are still fresh in everyone's memory.
Step 2:
Immediately retain an accident reconstruction expert. The collision or accident must be investigated and reconstructed by an expert as soon as possible. It is vital that the expert inspect the scene of the collision and all physical evidence, and interview witnesses as soon as possible. Every dent on a vehicle and skid marks or scrapes on the road are important evidence to the reconstruction expert. Just as memories fade with time, so does physical evidence at an accident scene.
Step 3:
Determine the history of the particular tire involved in the failure. Contact the National Highway Traffic Safety Administration ("NHTSA") to obtain recall information. All tires manufactured for sale in the United States must comply with Federal Motor Vehicle Safety Standards 109 and 110 which mandate certain design and performance characteristics. If a problem exists with your particular tire, NHTSA may have helpful information about its history.
Step 4:
After the accident has been reconstructed, if there is an indication that tire failure caused or contributed to cause the accident, it is time to retain an expert witness who specializes in the investigation of tire failures. Tire experts inspect tires visually and by x-ray to determine the cause of a failure. Expert witnesses can help you determine whether a tire has a manufacturing and/or design defect that may have caused the accident.
If you are representing someone who has been seriously injured or killed in an automobile collision, particularly when it appears tire failure may have occurred, you should always think of the potential for a tire defect case. Tire defect cases can be difficult, expensive, and time consuming. We are always prepared to offer advice or assistance in these matters. Our firm is currently litigating two tire defect cases against Michelin.
Confronting The Missouri Periodic Payments Statute
A portion of the malpractice "tort reform" legislation passed by the Missouri legislature in 1987 included a provision that upon a verdict in favor of a plaintiff, the defendant may request the Court to order the future damages portion of the verdict to be made in installment payments. The statute, R.S.Mo. 538.220, has been the subject of several appellate court decisions.
In Vincent v. Johnson, 833S.W.2d 859 (Mo. banc. 1992), the Missouri Supreme Court upheld the constitutionality and validity of the periodic payments statute. A few of the more salient points to the statute are set forth below:
- The statute only applies if the future damages award exceeds $100,000.
- Past economic and non-economic damages are not subject to the periodic payments statute.
- Although the request for periodic payments is usually made by the defendant, it can be made by any party to the litigation.
- Upon a Motion for Periodic Payments, if the parties cannot agree upon a payment schedule, the Court must hold a hearing on the issue of periodic payments.
- At the hearing, the Court is to decide the appropriate amount of the future damages award subject to future periodic payments; the interest rate to be paid by the defendant on that amount; and the number and timing of payments to be made in the future.
- Attorney's fees and litigation expenses are to be paid at the time the judgment becomes final, not in the future.
- As a condition to authorize periodic payments of future damages, the Court may require a defendant who is not adequately insured to post security or purchase an annuity to assure full payment of the future damages awarded by the judgment.
- If the plaintiff dies, the unpaid portion of economic future damages passes to their estate, while the non-economic damages need not be paid by the defendant.
Words of Wisdom
"Injustice anywhere is a threat to justice everywhere."
Dr. Martin Luther King, Jr.
"Mr. Feline, if we can just prove the dog was driving with permission, then I think you have a good claim for emotional distress."
