This was the week that Congress passed and the President signed a new law requiring that most health insurers (if they cover mental health treatment at all) pay for lots and lots of talk therapy and addiction rehab the same way they pay for lots of angioplasties or appendectomies, in the name of “parity” and “nondiscrimination”. Very optimistically — it won’t be Congress writing the checks — the ten-year cost is projected at only $3.4 billion. (Judith Graham, “Triage”/Chicago Tribune, Oct. 3). Next week lawmakers will go back to complaining that health insurance has become prohibitively expensive and that much of the population is priced out of buying it altogether. Mickey Kaus remembers where we’ve seen this sort of feel-good short-circuiting of underwriting standards before (Oct. 2).

Janiece Lacross, a drunk-driving defense lawyer in Washington state, has lately run into her own trouble with the law: “Last November she drove drunk with her three young children in the backseat. She hit a boy on his bike in Kitsap County, breaking his leg and sending him into the bushes. But the vehicular assault charge against her was dropped and reduced to just a DUI, which brought Mothers Against Drunk Driving to court to find out why.” Lacross entered rehab and will accept home monitoring and attend victim impact events as part of her plea in Tacoma to DUI and three counts of reckless endangerment; her repentant statements in court even made a relatively favorable impression on MADD, not the easiest thing to do. The passing bit of the story that induced a momentary double take: as part of her penitence, it is said that Lacross “even helped the young victim, Joseph Griffith, with his civil suit for personal injuries”. Against herself? (Keith Eldridge, KOMO, Oct. 1).

“A Coney Island businessman is suing the city for damaging the Bentley he was driving when he killed a Brooklyn dad in a hit-and-run accident. Harry Shasho, who pleaded guilty to leaving the scene of an accident, says the NYPD failed to safeguard the battered black 2005 Bentley GT luxury sedan that was impounded as evidence of the fatal crash. He’s asking for at least $190,000.” However, Shasho “denied filing a lawsuit” when contacted by a Daily News reporter. (John Marzulli, New York Daily News, Aug. 24).

I’m going to take a wild guess here and speculate that Shasho’s auto insurer will turn out to have been a force in the decision to sue. Under most property insurance policies, after paying a loss the insurer reserves the right to go after third parties it thinks it can be blamed, and the policyholder must up to a reasonable point cooperate in such lawsuits (which may be filed in the policyholder’s name). The insurer needn’t and probably won’t take into its calculations the effect of such a suit on its policyholder’s reputation, which in this case for Shasho include being called “shameless” and worse in the comments section at Gothamist. Such insurer-prompted suits on behalf of wrongdoers are fairly common, and should be kept analytically distinct from the (also fairly common) situations where the wrongdoer himself decides to sue and is the one to pocket any proceeds.

Wayne Davis, Jr., had a .203 blood-alcohol level, when he drove his pickup across the center line of a Camden County, Missouri, highway on March 24, 2000, and crashed head on into the compact car of Edward and Virginia Johnson.

You’ll be happy to hear that the Johnsons didn’t try to blame the beer company or the auto manufacturer, and simply sued Davis. Davis’s insurer, Allstate, contacted the Johnsons’ attorney, David Sexton, in April, and asked for access to the Johnsons’ medical record. Sexton responded by demanding the policy limits. Allstate requested the medical records three more times, and finally got the records on December 20. (A Dan Margolies Kansas City Star article (via Childs) incorrectly says Allstate did not respond, but the court’s opinion says otherwise.) Allstate immediately agreed to pay the settlement limits, but now Sexton refused, saying his April offer had expired, and he now wanted $3 million from Allstate. We’ll let the Missouri Court of Appeals explain what happened next:

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• To hold a party in the public parks of Bergenfield, N.J., you’ll need homeowner’s or renter’s insurance to throw on the line [Bergen Record]
• More on suits against Victoria’s Secret over allegedly hazardous bras, thongs, and undergarments, including an aspiring class action over contact rashes [Heller/On Point News]
• Supreme Court will review Navy sonar controversy, which we’ve long covered in this space [Adler @ Volokh]
• Hope of legalized online gambling fades, and you can blame Republicans on Capitol Hill for that [Stuttaford, NRO "Corner"]
• Disney said to be behind bad proposal to soak foreign tourists to fund visit-America promotions [Crooked Timber]
• “Squishier than most”: Nocera on A.M.D.’s predatory-pricing antitrust suit against Intel [NYT]
• Process serving company lied about delivering SEC witness subpoena and falsified later document, judge rules, awarding victim $3 million [Boston Globe]
• Revisiting the false-accusation ordeal of Dr. Patrick Griffin, and how it relates to pressure to have needless chaperones at medical procedures [Buckeye Surgeon, Dorothy Rabinowitz Pulitzer piece]
• Overlawyered turns nine years old tomorrow (more). Commenters: how long have you been reading the site? Any of you go back to its first year?

If you wonder why insurance fraud and insurance expense are so high in New York state it’s because of opinions like AA Acupuncture Service v. State Farm Mutual Insurance Company. (The fact that the plaintiff is a quack-upuncturist immediately suggests problems, no?) Civil Court Judge Arlene P. Bluth agreed that there was “uncontradicted, overwhelming circumstantial evidence” that an accident had been faked. But State Farm was still not entitled to summary judgment on the litigation of bad-faith claims by three medical providers who insisted that State Farm was liable as the insurer of the woman who claimed to have been injured in the accident. (Plaintiffs deny fraud, though apparently wasn’t able to rebut the evidence of fraud at the motion stage.)

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In October 2006, we reported on a $20 million jackpot justice verdict:

Ted Fields was injured in an auto accident with Jimmy Woodley; Woodley’s insurer went bankrupt, so Fields, on January 30, 1997, asked Allstate to pay $25,000 in medical bills and lost wages. Allstate sent Fields forms to fill out, and he did so three weeks later; when Allstate didn’t pay instantaneously, he sued them in March 1997 for bad faith. Fields turned the discovery process into a far-reaching investigation of all of Allstate’s claim procedures; the judge refused to constrain irrelevant deposition questioning, at which point in 1999 Allstate offered Fields the full amount of his $50,000 policy limit rather than waste hundreds of thousands in trial. Fields refused; his attorneys filed several separate motions of default rather than litigate the underlying issues after the trial court denied a summary judgment motion. An appellate court found that Allstate was entitled to summary judgment because of the lack of any evidence of bad-faith in responding to Fields’s claims; the Indiana Supreme Court overturned that ruling on a procedural technicality that the appeal was premature.

The trial court ruled that Allstate was not allowed to present evidence that it was not liable for actual or punitive damages or that it acted “with anything other than dishonest purpose, moral obliquity, furtive design, and/or ill will.” A jury, hearing this one-sided sham of a trial, awarded $20 million in damages, though one would hope the Court of Appeals, hearing a timely appeal, makes the same decision it made before. Press coverage fails to mention that Allstate wasn’t allowed to defend itself at trial; the plaintiff told the jury that the dispute caused high blood pressure, heart problems, and a stroke, though then the question becomes why he isn’t suing his attorney.

Today, the Court of Appeals of Indiana reversed.

Associated Press:

The Supreme Court has refused to offer help to Hurricane Katrina victims who want their insurance companies to pay for flood damage to their homes and businesses.

As David Rossmiller notes,

As if the choice in a case is simply going where your sympathies lie, and when the court decided not to take the appeal, the halls rang with evil laughter and mocking statements such as this: “We will extend no help to Katrina victims because we love to see them suffer and we love to support our evil twins, the insurance companies who steal from them.”

The Fifth Circuit, of course, simply enforced the insurance policies as written, and noted that the word “flood” included a flood caused by the breach of the levees in New Orleans, reversing a district court that disingenuously held otherwise. And the Supreme Court simply refused to make the appeal of that obvious decision one of the 1% of petitions for certiorari that it grants.

Update: Mark Obbie, while also critical of the lede, writes:

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• Lawyer for Mothers Against Drunk Driving: better not call yourself Mothers Against Anything Else without our say-so [Phoenix New Times]
• Ohio insurer agrees to refund $51 million in premiums, but it’s a mutual, so money’s more or less moving from customers’ left to right pockets — except for a big chunk payable to charity, and $16 million to you-know-who [Business First of Columbus; Grange Mutual Casualty]
• Sources say Judge Pearson, of pants suit fame, isn’t getting reappointed to his D.C. administrative law judge post [WaPo]
• Between tighter safety rules and rising liability costs, more British towns are having to do without Christmas light displays [Telegraph]
• So strong are the incentives to settle class-action securities suits that only four have been tried to a verdict in past twelve years [WSJ law blog]. More: D&O Diary.
• It’s so cute when a family’s small kids all max out at exactly the same $2,300 donation to a candidate, like when they dress in matching outfits or something [WaPo via Althouse]
• Idea of SueEasy.com website for potential injury plaintiffs [Oct. 19] deemed “incredibly stupid” [Turkewitz]
• New at Point of Law: med-mal reports from Texas and Colorado; Lynne-Stewart-at-Hofstra wrap-up (more); immune to reason on vaccines; turning tax informants into bounty-hunters?; and much more;
• $800,000 race-bias suit filed after restaurant declines to provide free extra lemons with water [Madison County Record]
• Settling disabled-rights suit, biggest card banking network agrees to install voice-guidance systems on 30,000 ATMs to assist blind customers [NFB]
• Think twice before publishing “ratings” of Pennsylvania judges [six years ago on Overlawyered]

In 1981, Curtis Campbell (Campbell) was driving with his wife, Inez Preece Campbell, in Cache County, Utah. He decided to pass six vans traveling ahead of them on a two-lane highway. Todd Ospital was driving a small car approaching from the opposite direction. To avoid a head-on collision with Campbell, who by then was driving on the wrong side of the highway and toward oncoming traffic, Ospital swerved onto the shoulder, lost control of his automobile, and collided with a vehicle driven by Robert G. Slusher. Ospital was killed, and Slusher was rendered permanently disabled. The Campbells escaped unscathed.

Guess quickly: which plaintiff in the resulting twenty years of litigation won the biggest jury verdict?

How many of you say Ospital?

How many of you say Slusher?

You’re both wrong. The plaintiff with the biggest jury verdict was Curtis Campbell, whom a jury awarded an incredible $147.6 million.

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Yesterday I joined Vicki McKenna on Madison, Wisconsin’s WIBA to discuss Katrina insurance litigation as well as the Supreme Court’s punitive damages rulings. And on Jan. 23 I was a guest on Jim Blasingame’s national “Small Business Advocate“.

Insurance Journal reports that the Florida Supreme Court has rejected an attempt by seasonal residents to apply more favorable Florida rules to their claims under non-Florida auto insurance policies:

‘Snowbirds” and other part-time Florida residents who insure their cars back home cannot make claims under Florida laws that may be more favorable to them than those in their own states, the state Supreme Court has ruled.

* * *

‘Although Florida welcomes its many visitors, whether for short or extended stays, we cannot rewrite their out-of-state contracts,’ Justice Raoul Cantero wrote for the high court.

The decision will prevent Lake Wales residents Thomas and Margaret Roach, who were injured in 2001 while riding in a neighboring couple’s Indiana-insured car, from suing State Farm for underinsured motorist compensation under Florida law.

Indiana law would prohibit them from recovering because it permits an offset of underinsured motorist coverage against claims paid under other types of coverage.  Florida law does not permit offsets.

Interested readers can view the full Opinion [PDF] in State Farm Mutual Ins. Co. v. Roach, Case No. SC04-1313 (Dec. 14, 2006).

Ted Fields was injured in an auto accident with Jimmy Woodley; Woodley’s insurer went bankrupt, so Fields, on January 30, 1997, asked Allstate to pay $25,000 in medical bills and lost wages. Allstate sent Fields forms to fill out, and he did so three weeks later; when Allstate didn’t pay instantaneously, he sued them in March 1997 for bad faith. Fields turned the discovery process into a far-reaching investigation of all of Allstate’s claim procedures; the judge refused to constrain irrelevant deposition questioning, at which point in 1999 Allstate offered Fields the full amount of his $50,000 policy limit rather than waste hundreds of thousands in trial. Fields refused; his attorneys filed several separate motions of default rather than litigate the underlying issues after the trial court denied a summary judgment motion. An appellate court found that Allstate was entitled to summary judgment because of the lack of any evidence of bad-faith in responding to Fields’s claims; the Indiana Supreme Court overturned that ruling on a procedural technicality that the appeal was premature.

The trial court ruled that Allstate was not allowed to present evidence that it was not liable for actual or punitive damages or that it acted “with anything other than dishonest purpose, moral obliquity, furtive design, and/or ill will.” A jury, hearing this one-sided sham of a trial, awarded $20 million in damages, though one would hope the Court of Appeals, hearing a timely appeal, makes the same decision it made before. Press coverage fails to mention that Allstate wasn’t allowed to defend itself at trial; the plaintiff told the jury that the dispute caused high blood pressure, heart problems, and a stroke, though then the question becomes why he isn’t suing his attorney. (Ken Kosky, “Valpo man wins $20 million verdict v. Allstate”, Northwest Indiana Times, Oct. 6).

My new column at the Times (U.K.) Online is on last week’s Mississippi Katrina insurance verdict. (Walter Olson, “Insurers can breathe easier over Katrina lawsuits”, Aug. 30). Concluding paragraph:

Major coverage issues remain to be resolved (and appealed), but at least we can take note at this point that America is not Zimbabwe or Bolivia. As Dickie Scruggs said before the Leonard ruling, “If you win it, it’s a huge win. If you lose it, you spin it the best way you can.”

Also, I was a guest last evening (6:30 p.m. Eastern) on Marc Bernier’s high-rated radio show, “The Talk of Florida” to discuss the article.

I was a guest this morning on Shane Warner’s radio show on New Orleans’ WIST, discussing Judge Senter’s latest ruling in Katrina insurance coverage litigation. For more on that subject, see my posts at Point of Law here and here, Ted’s and Martin’s posts there, and my WSJ piece here.

Martin Grace and I have written a Liability Outlook for AEI looking at the last several years of CJD/AIR studies on medical malpractice. The conclusion? “In many ways, the problem with AIR’s reports is a perfect microcosm of what doctors find most distasteful about the liability system: a trial-lawyer mentality that cherry-picks facts and twists data to reach knee-jerk conclusions under the guise of a false science.” See also Jim Copland’s dissection of one such study at Point of Law on Jul. 8.

We look forward to Kevin Drum giving this paper the same deference he credulously gave AIR’s last bogus report.

One flaw of the paper is that we didn’t include the story of “Bob,” the dummy literally used to scapegoat insurance-company executives by CJD at an ATLA conference. For other CJD shenanigans, see Dec. 23, 2004 and Mar. 19, 2004. (Cross-posted at Point of Law.)

The Free Market Project covers anti-business media bias, and has been issuing weekly exposes of media coverage of the various lawsuits over insurance companies’ flood exclusions: Oct. 5, Sep. 28, Sep. 14. Our coverage: Sep. 15, Sep. 12; POL Sep. 28, Sep. 26, Sep. 25, Sep. 23, Sep. 22, Sep. 9. I spoke about the issue at an AEI panel I moderated on October 3 that was broadcast on C-SPAN2. Transcripts will be posted in the next couple of weeks on the AEI site.

Readers were not shy about recommending hosting services (thanks for all your emails!) and I’ve now decided to go with Hosting Matters, which has many articulate fans and seems to make a specialty of Movable Type-based blogs. It’ll probably be a few days more before the site is back up and running.

In the mean time, you can follow both my and Ted’s postings at the Manhattan Institute site Point of Law, which has been extra-busy lately (see, for example, its reprint of Ramesh Ponnuru’s fascinating National Review article on trial lawyers and social conservatives). I’ve been juggling a number of other deadlines and published a “Rule of Law” op-ed column on Hurricane Katrina and flood insurance last Saturday in the Wall Street Journal (sub) (more on that). (Bumped 9/30).