I often find it curious that Law Day falls on May 1st.  Growing up, May 1st was always the day the news carried pictures of over the top parades in Red Square in Moscow where the USSR would display its missiles, goose stepping soldiers and mummified Politburo.  In hindsight, that seems quite antithetical to what I now celebrate on May 1st – the rule of law that sets our country apart from all others.  Being a lawyer should be and most often is a noble profession.  Incrementally, lawyers and judges shape the rules of conduct for society.  We protect the rights of individuals who are victims of crime.  We hold the government’s feet to the fire when it seeks to deprive a person of liberty.  We work to ensure that injured persons are fairly compensated when they prove their case to a jury of their peers.  We provide the vehicles for businesses to form, grow, prosper and provide jobs.  We protect assets at death so that heirs can enjoy the fruits of their loved ones’ hard work.  So on May 1, 2012, remember the great things lawyers and judges do for society and all of us, and not the punch lines of inane lawyer jokes.

Matt is a partner with Gallagher, Callahan & Gartrell in Concord, New Hampshire.  He is the DRI Immediate Past President.  He also sits on the Board of Directors for the NFJE and LCJ.

Tell Us Why You’re Attending!

#10: You can learn the latest trends in IP and business litigation.

#9:  CLE credit.

#8: It’s a great opportunity to network with in-house counsel & more.

#7: Cool dine-arounds at some of the hottest NY restaurants.

#6:  The best in biz will be sharing their advocacy skills.

#5: Learning how to manage all your information without losing your mind.

#4: Did we mention the networking receptions?

#3: Protecting your client’s business & IP interests is a must.

#2:  Because the Yankees aren’t the only sluggers in town!

And Reason #1: It’s the DRI in the Big Apple! Need we say more?

Register Now and Tell Us Why You’re Attending!

With recent amendments to Federal Rule of Civil Procedure 26 and a proliferation of Motions to Strike/Exclude Expert Testimony under the Court’s responsibility as a gatekeeper of information that is to be considered by a jury, keeping apprised of recent rulings on these issues is key to effectively using experts in defending mass tort claims. This presentation will discuss the changes to Rule 26, including how courts have handled discovery disputes involving experts, and will address recent Daubert and Frye decisions that may assist in having an opponent’s experts testimony stricken before presentation to a jury as well as other considerations as you work on expert preparation for mass tort cases. 

Actually, it’s what’s happening in Vegas.   It’s spring, and we’re beginning to see a light at the end of the winter tunnel.  Grass is starting to grow, trees are beginning to bud, flowers are blooming, etc.  What better way to celebrate the annual coming of Spring than at DRI’s Product Liability Seminar in Las Vegas?  OK, I confess that Spring and Las Vegas are not “causally connected”, as we DRI-ers like to say.  You can actually go out to Vegas any time of year, and they will welcome you with open arms no matter what the season.  But, what you can’t do just any time of year is go out there and get both the camaraderie of your DRI friends AND the CLE education from leading product liability lawyers and experts from around the country.  So, if you’ll join us April 11-13 at the Venetian for the DRI Product Liability Seminar, you’ll get networking, friends, education, Vegas AND Spring, all at the same time.  You don’t want to be the one who has to hear about it after the fact,  so make plans to join us.  And if you want some really good Automotive CLE, come to the Automotive SLG Breakout session Wednesday afternoon where you’ll hear Neal Walters (the guy who puts the “class” in “class action”) Tracy Ferak (the component part liability guru) and Chris Massenburg (who will tell you all about where the Big Auto companies find themselves economically these days) present some seriously useful stuff.  I’ll see you there – I’ll be the tall guy in the suit.  

Jeff Curran is Of Counsel with Gable Gotwals in Oklahoma City. Jeff focuses his practice primarily in the areas of product liability, insurance matters, entertainment law and commercial litigation.

The U.S. Equal Employment Opportunity Commission ("EEOC") recently announced the adoption of a four-year strategic plan that focuses on, among other things, continued efforts to address "systemic discrimination" in the workplace.  

Not surprisingly, the EEOC's strategic plan sets forth a primary objective (which the EEOC acknowledges will exhaust the majority of its resources) to combat employment discrimination through administrative (e.g., investigation and conciliation) and litigation enforcement mechanisms with regard to private employers, labor organizations, employment agencies, and state and local government employers and through adjudicatory and oversight mechanisms Congress has given the EEOC with regard to federal employers.  

Based upon the EEOC's admittedly limited resources, the strategic plan states a need "to think strategically about how best to target its efforts to ensure the strongest and broadest impact possible in its efforts to stop unlawful employment discrimination."  In this regard, the strategic plan asserts that a top priority will be to continue the EEOC's 2006 "Systemic Initiative" designed to identify, investigate and litigate cases of alleged systemic discrimination (which the EEOC describes as "pattern or practice, policy, and/or class cases where the alleged discrimination [often by a single charging party] has a broad impact on an industry, profession, company, or geographic area").  

We look forward to gaining insight on how the EEOC intends to marshal its resources over the next several years - such as through the use of Commissioner charges, directed investigations, and empirical data - to address allegedly discriminatory policies or other instances of "systemic discrimination" from EEOC Commissioner Victoria A. Lipnic during DRI's 35th annual Employment & Labor Seminar, to be held May 2-4, 2012 in Chicago, IL.  If you have not already registered for this event, please access the registration information here and secure your spot today. 

The question is hotly debated among law school students, lawyers, judges, commentators, and policy makers: is law school still worth it?  We've all heard the stories of bright, hard-working students who graduate from law school only to be faced with the arduous task of finding a permanent legal job in a struggling economy while shouldering the astronomical burden of $150,000 in student loan debt.  But the bigger questions are:  How did we get here?  And what should we do about it?

According to a study done by the ABA Research Center, in 2008 there were 1,162,124 lawyers in the United States.  David Barnhizer, Redesigning the American Law School, 2010 Mich. St. L. Rev. 249, 276 (2010).  By 2009, that number had climbed to 1,180,386, which means that in the span of one year, 18,262 lawyers joined the profession.  Id.  Of the approximately 1.1 million lawyers in the United States, 400,000 were licensed in the last 10 years.  Id. at 282. 

While law schools continue to turn out legions of graduates, the pool of available jobs for these newly minted attorneys has shrunk.  According to recent data published by the National Association for Legal Career Professionals (NALP), the overall employment rate for new law school graduates in 2010 was 87.6 percent.  NALP, Employment for the Class of 2010 – Selected Findings, available at http://www.nalp.org/uploads/Classof2010 SelectedFindings.pdf.  This number is the lowest it has been since 1996, when the unemployment rate for new law school graduates fell to 87.4 percent.  Id.  A reported 15,000 jobs at large law firms have been cut since 2008.  David Segal, Is Law School a Losing Game?, N.Y. Times, Jan. 8, 2011.

In addition to graduating with fewer future job prospects, many graduates carry with them staggering amounts of debt.  The average tuition at an American public law school is said to have increased by 448 percent between 1987 and 2005.  William S. Howard, The Student Loan Crisis and the Race to Princeton Law School, 7 J. L. Econ. & Pol'y 485, 486 (2011).  Approximately 85 percent of graduates from ABA-accredited law schools carry an average debt load of $98,500.  William D. Henderson and Rachel M. Zahorsky, The Law School Bubble, ABA Journal, Jan. 2012, at 30-35.  By 2020, the Office of Management and Budget estimates that direct loans to students will total $1.8 trillion, and between 2 and 4 percent of that will be for law school graduates.  Id. at 34.

One of the most frequent criticisms of the current version of the American law school model is that in addition to leaving many students without jobs and with enormous debt, it does not adequately prepare them for the practice of law.  Critics argue that while law schools spend three years teaching students archaic principles of law and encouraging heated policy debates, what law schools don't do is teach students how to be practicing lawyers. 

Some have recently proposed that we deregulate legal education by allowing anyone (not just law school graduates) to take the bar exam, arguing that eliminating the requirement of a formal legal education would promote greater efficiency and reduce the problem of law school debt.  See, e.g., George Leef, Allow Anyone to Take the Bar, N.Y. Times, July 25, 2011.  As part of a discussion of this issue in a series posted by the New York Times, George Leef contends that law school is unnecessary because lawyers learn the practical skills they need for their jobs when they begin working, rather than in the academic classes they take in law school.  Id. 

Clifford Winston echoes Mr. Leef's sentiment, contending that "occupational licensure has been costly and ineffective; it misleads consumers about the quality of licensed lawyers and the potential for non-lawyers to provide able assistance."  Clifford Winston, Are Law Schools and Bar Exams Necessary?, N.Y. Times, Oct. 24, 2011.  Mr. Winston argues that eliminating law schools and bar exams would result in reduced legal costs, because non-lawyers would be able to charge less for their services with no student loans hanging over them.  Id.

Another less drastic proposal for change involves changing the law school model to shorten the time spent in classrooms and get more students into the practice of law earlier.  David Lat has proposed a model in which the first two years of law school are used for traditional legal instruction, while the third year is used for apprenticeships.  David Lat, Bring Back Apprenticeships, N.Y. Times, July 25, 2011.  Mr. Lat argues that "[u]nder this system, aspiring lawyers would stop accruing debt and start earning money at an earlier point."  Id.  Law students would gain the practical knowledge their employers want them to have, and employers could train workers to their specific requirements.   Id. 

On the other hand, others argue that shortening or eliminating the law school curriculum – even if it would reduce students' debt burden – would be a mistake.  Kevin Noble Maillard, It's Not a Trade School, N.Y. Times, Sept. 13, 2011.  Kevin Noble Maillard argues that the traditional legal model should be continued because "[i]t prepares people to become leaders in our society, which makes it imperative that they be rigorously trained as thinkers."  Id.

Indeed, many argue that law schools are inherently valuable because they teach students to think like a lawyer.  See, e.g., Geoffrey R. Stone, Learning to Think Like a Lawyer, N.Y. Times, July 15, 2011.  Geoffrey Stone contends that what law schools do best is develop critical analytical skills:  Rather than teaching students to memorize principles of law, law schools teach students how to apply those principles to different fact patterns, so that when they hit the real world they are prepared for anything.  Id.  Additionally, as Leonard Long points out, treating law school as a trade school ignores the fact that not everyone who goes to law school ends up practicing law.  Leonard J. Long, Resisting Anti-Intellectualism and Promoting Legal Literacy, 34 S. Ill. U.L.J. 1, 2 (2009).  Many trained in the legal method often eschew law practice in favor of careers in business, politics, journalism, or academia.  Id.

One proposal that seeks to balance law students' need for increased practical training with the recognition of the inherent value of a formal legal education is the suggestion that all law students participate in some sort of clinical coursework during law school.  See Richard A. Matasar, The Viability of the Law Degree: Cost, Value, and Intrinsic Worth, 96 Iowa L. Rev. 1579, 1612-13 (2011).  Currently, only 3 percent of law schools require students to participate in clinical training.  David Segal, What They Don't Teach Law Students: Lawyering, N.Y. Times, Nov. 19, 2011.  Richard Matasar contends that if all law schools required (or at least strongly encouraged) their students to complete a clinical course of study before graduation, those students would leave law school with more of the practical skills necessary to succeed in a variety of professional legal settings.  Matasar, supra at 1612-13.

Even this proposal, however, has its difficulties.  Mr. Matasar himself acknowledges that requiring each student to take a semester's worth of clinical coursework could end up being an expensive proposition for some law schools, which might need to hire additional faculty and other resources to support the courses.  See id.

Commentators have primarily called upon law schools, regulators, and policy makers to decide upon and implement these institutional changes.  In the end, however, one of the easiest solutions is within the reach of every member of the bar.  Increased mentoring of prospective law school students, including candid discussions about the costs of law school and the outlook for potential job prospects, is something we can all contribute.  For students who carefully consider their reasons for attending law school and who make decisions about their student loans with realistic expectations of their ability to repay them, law school may still be worth it.  As practicing lawyers, it is our responsibility to seek out and mentor these students. 

Carolyn Pratt graduated from the University of North Carolina School of Law in 2008.  After a two-year clerkship at the North Carolina Court of Appeals, Carolyn joined the Wilmington, North Carolina office of Cranfill, Sumner & Hartzog, LLP as a member of the firm's litigation group.

An issue that has recently flooded the pages of the New York Times is the rapidly increasing cost of attending law school, despite the economic climate this country is currently experiencing.  Law school tuition is rising four times faster than the cost to attend an undergraduate institution, yet the amount of students attending has also increased despite the heavy debt they will incur and the tight job market they will enter after graduating.  Many people in various legal positions have contributed their opinions to the debate of whether it is necessary for law schools to take action to lower costs, and if so, how that should be accomplished.  

The first law school in the United States was established in 1784 and the school viewed its students as apprentices, not as scholars.  However, in 1878 the American Bar Association (“ABA”) was formed and began enacting limitations on law schools.  For instance, in the 1890s the ABA pushed states to limit the number of people admitted to the Bar.  In 1906, the Association of American Law Schools also contributed to the transformation of law schools by adopting a requirement that law school consist of three years of study.

Since the formation of law schools, the organization of these institutions has experienced changes.  It is less common to see militant professors, as portrayed in the 1973 movie The Paper Chase, and more common to witness professors simply asking for volunteers in class and not berating students if they did not read an assignment.  Even the length of time that a person has to go to law school has changed.  Recently, schools such as Northwestern University School of Law have begun to offer an accelerated program in which a student can complete their Juris Doctor (“J.D.”) in two years instead of three.  

Despite all these changes, though, many people in the legal field are frustrated with how much it costs to attend law school as well as the make-up of law schools.  One common complaint, as detailed in The New York Times article, “What They Don’t Teach Law Students: Lawyering,” is that law students are leaving school with no practical training, leaving firms the task of having to prepare new associates to become lawyers on the firm’s dime, or that of clients.  Many suggestions have been offered as to how to remedy this issue in a way that would train law students to become lawyers and alleviate some of the financial costs law schools and students face.  One suggestion has been to decrease the amount of credits students must take.  Another proposal has been to replace the third year of law school with an apprenticeship, which was the focus of the first law schools, instead of forcing students to engage in more coursework.

A proposition that has generated a lot of discussion is the idea of replacing full-time faculty with adjunct faculty.  Currently, the ABA requires that its accredited schools have a ratio of twenty students or less to one full-time faculty member.  A ratio of thirty students to one full-time faculty member is not in compliance with the ABA standards, but many of these full-time professors do not have practical legal experience because law schools look to hire scholars and not people who have spent years practicing law.  On the other hand, an adjunct professor is an experienced practitioner by definition.  

Besides lacking practical experience, it is more expensive to employ full-time faculty as opposed to adjunct faculty.  About half of a law school’s budget is spent on faculty salary and benefits, and about eighty percent of that budget goes toward full-time faculty.  Alternatively, adjunct faculty make a few thousand dollars a year to teach a course.  

With the current economic climate, it is vital that changes are made among different institutions, including law schools that will keep costs down.  While no method is a guaranteed solution, staffing more adjunct faculty is something that should be considered and this type of change would need to be initiated by the ABA.  Even though modifications to the organization of law schools may make law school administrations and professors uneasy, if adjustments are not made, the make-up of the legal profession may experience unwanted changes.  The New York Times article states that, “the nature of legal work itself is evolving, and the days when corporations buy billable hours, instead of results, are numbered.”  If law students continue on the path of failing to obtain practical experience, their chances of succeeding in this dismal market will remain poor.

Jamie Oliver, a chef and a child advocate focused on ensuring kids receive proper nutrition through their school lunch programs as well as at home, has a television show, Jamie Oliver’s Food Revolution, showing how he changes eating habits in school districts (this season he is in Los Angeles).  In each episode, he creates a visual showing the terrible foods kids are putting in their bodies.  It’s one thing to tell kids (or their parents) that fast food and processed food is bad for them, it is quite another to create a visual showing how bad it is, and creating such a powerful visual that it convinces those kids, their parents and the audience watching the show (including myself) how bad those foods are.  In a recent episode, he filled a family’s house with all the fast food they consume in a year.  Every square inch of furniture and floor was covered.  In another episode, he filled a school bus with sugar to show how much sugar the school board permitted in the kids lunch meals over a year.  It was powerful images like those that made folks change their minds and change their behavior.

When preparing for trial, we can take a page out of Jamie’s book, and think about what visuals (whether a photograph, a diagram, an animation, or some other representation) that encapsulates our theme and does so in such a powerful manner that the image we create carries through the trial, into the deliberation room and turns the jurors’ hearts and minds toward our view-point and toward our position.  Keep a file folder in your office drawer where you include pictures, images and ideas you clip from magazines and newspapers.  These images may later serve you at trial.

Being that it is Monday, my partner Craig Salner has his weekly tip for young lawyers.  This week he discusses the importance of getting involved with social networking.  You can find his post at http://csalner.wordpress.com/.

Insurance fraud has been estimated to take between $80 billion and $300 billion a year from the insurance industry in the United States. Every state has a statute making insurance fraud a crime including the federal crimes of mail and wire fraud and the Racketeer Influenced and Corrupt Organization Act (RICO). RICO can also be a civil action which allows for treble damages or punitive damages.

Some insurer victims of insurance fraud have become proactive. In State Farm Mutual Automobile Insurance Company; State Farm Fire and v. Arnold Lincow, D.O.; Richard Mintz, D.O.; Steven Hirsh; 7622 Medical, No. 10-3087 (3d Cir. 09/16/2011) the Third Circuit dealt with an appeal from State Farm’s successful trial against some doctors and clinics who defrauded it and those it insured.

Facts

After a four-week jury trial plaintiff State Farm successfully convinced the jury that defendants, a number of health care providers (“Defendants”), engaged in various schemes to defraud State Farm by billing it for medical services that were either not provided or provided unnecessarily, and were illegal under RICO, fraud statutes, and common law fraud. Following trial, Defendants filed motions for judgment as a matter of law or, in the alternative, for a new trial or, in the alternative, to alter or amend the judgment. The District Court denied Defendants’ motions in their entirety.

Plaintiff alleged that Defendants were members of a conspiracy that sharply inflated the costs of medical care for car accident victims by prescribing tests and treatments, as well as prescriptions and medical equipment – whether medically necessary or not – and then routinely billed State Farm for additional treatments that were never provided. At trial, State Farm’s proof of Defendants’ fraud consisted of State Farm’s claim files and testimony of patients, physicians at Defendants’ medical facilities, Defendant physicians, and experts.
After a four-week trial, the jury awarded Plaintiff over $4 million against all Defendants jointly and severally, and individual Defendants were found liable for punitive damages totaling $11.4 million

Analysis

The Third Circuit’s reviews a district court’s order granting or denying a motion for a new trial for abuse of discretion unless the court’s denial of the motion is based on the application of a legal precept, in which case the review is plenary. A new trial may be granted on the basis that a verdict was against the weight of the evidence only if a miscarriage of justice would occur if the verdict were to stand.

State Farm noted that RICO is distinct because the members of the association-in-fact enterprise include all the defendants, there is a complete identity between the enterprise and the defendants and, therefore, no distinctiveness among the defendants.  As the District Court noted and State Farm urged, the intracorporate conspiracy doctrine is not universally accepted, and it is questionable whether the Defendant’s version is completely accurate.

The defendants argued that State Farm failed to prove: (1) the elements of an association-in-fact enterprise; (2) that defendant Mintz conspired with the other Defendants to defraud, as § 1962(d) requires; (3) that Mintz’s actions proximately caused State Farm’s injuries; (4) that Mintz’s conduct fulfilled the elements of common law fraud; and (5) that Mintz’s conduct fulfilled the elements of statutory fraud under Pennsylvania law. The Third Circuit rejected all of Mintz’s claims to the contrary and held that the weight of the evidence supports the jury’s finding against Mintz and the other defendants. Therefore, the Third Circuit concluded that to let the verdict stand would not result in a miscarriage of justice.

The Third Circuit agreed with State Farm’s assertion that a violation of the Insurance Fraud statute is a civil tort and that, as the jury found and the District Court upheld, the Defendants together contributed to State Farm’s injuries and are thus jointly and severally liable. Moreover, as the District Court correctly noted, there is no requirement for district courts to instruct juries to award damages against each defendant separately and individually. Because State Farm elected to receive treble damages the Third Circuit had no reason to address the contention that the punitive damages award should be reduced.

Lesson

Insurers who are the victims of fraud cannot rely on police agencies to investigate and prosecute perpetrators of insurance fraud. Prosecutions are few and far between. As readers of Zalma’s Insurance Fraud Letter, available FREE at http://www.zalma.com/ZIFL-CURRENT.htm, know prosecutions are increasing but are still anemic and those who are prosecuted and convicted usually receive minor punishments. By being proactive insurers can recover from the fraud perpetrators, like the doctors involved in this case, the insurer can recover what it lost, a bonus of three times the compensatory damages, and actually deter insurance fraud by hitting the perpetrators where it hurts them most, in their wallet.

It is time that insurers emulate the actions of State Farm and the few other insurers who are using civil suits to defeat insurance fraud by taking the profit out of the crime.