Corporate Accountability Cases Worth Watching
February 22, 2009, 6:37 pm
Filed under: Ian | Tags:

Tomorrow, the Supreme Court returns for its final two months of oral arguments, followed by a hellish several months spent waiting to finding out what the Roberts majority will do to the law this year.  Over the course of the next week, I plan to publish a list of cases I plan on tracking during the remainder of the Term.  This list is not meant to be comprehensive.  I am skipping, for example, a really fascinating case concerning the land rights of native Hawai’ians, largely because I think it is very unlikely that Hawai’i will lose this case.  I’m also skipping a number of environmental cases because I know only slightly more than nothing about environmental law.  That said, I hope my list provides a good window into what this Term has is store for the nation.

Below are two corporate accountability cases I plan to track this Term, as well as two (dis)honorable mentions that may warrant more discussion depending on what the court does.  The next installment of my list will include the Court’s free speech cases I plan to track.

1) Wyeth v. Levine: As I’ve written about in the past, one of the greatest tragedys of the last twenty years is the health care industry’s successful campaign to immunize itself from accountability through Supreme Court litigation.  Thanks to the Supreme Court, workers who get their health insurance through their employer are powerless if they are injured by a wrongful denial of coverage—employer-provided health plans can engage in “murder by spreadsheet” with impunity.  Similarly, the Supreme Court recently held that makers of dangerous medical devices enjoy almost total immunity from accountability when their defective devices injure or kill a patient.

Unsurprisingly, the drug companies want a piece of this action too, and Wyeth is their bid for total lawsuit immunity.  Traditionally, federal and state law exist in harmony with one another, and states are free to enforce laws which are more protective then federal minimum standards.  If the federal goverment enacts a national maximum speed limit of 70 MPH, for example, nothing prevents the State of Maryland from making their speed limit 55.

Recently, however, corporate interests have taken the line that the mere presense of a federal law eradicates any vaguely similar state laws.  In Wyeth, the defendant makes an anti-nausea drug which, if injected into an artery, causes aggressive and irreversible gangrene.  The drug came with an FDA-approved warning label which didn’t instruct doctors not to use a particular method of injecting the drug that often caused the drug to enter an artery, so a clinic unknowingly used this unsafe method to inject the drug into Diana Levine.  Within weeks, Levine lost her right arm.

A Vermont jury decided that Wyeth is liable for not specifically instructing doctors not to use the dangerous injection method when administering the drug, and this decision was upheld by the state supreme court.  Wyeth is now asking the U.S. Supreme Court for total immunity from state laws that hold it accountable for faulty labeling, saying that if its label was approved by the FDA, that is all it has to do.  If Wyeth wins, the Supreme Court could completely eradicate claims against drug companies, and leave those companies free to poison women like Diana Levine with impunity.

2) AT&T Corp. v. Hulteen:  Call this case “Ledbetter for pregnancy.”  The plaintiffs are four women who spent most of their careers working for AT&T.  AT&T calculates retirement benefits based on seniority, and when the four women retired, AT&T refused to count time they spent on pregnancy leave in calculating their benefits, even though company policy allows other kinds of disability leave to be included in calculating seniority.  This, btw, is a clear violation of federal law, which provides that “women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work.”

So why isn’t this a slam dunk case?  Well, AT&T first decided to discriminate against pregnant women decades ago, and its specific decision to undercount the four women’s seniority was consistent with the policy of discrimination that began many years ago.  Like the pay discrmination claim at issue in Ledbetter, claims of pregnancy discrimination are subject to a statute of limitations, and if that clock starts to tick at the moment AT&T decided to discriminate against all its pregnant employees, then the four plaintiffs are out of luck.

For this reason, Hulteen will reveal whether the Court’s conservative majority is feeling properly chastized after Congress smacked down its decision in LedbetterHulteen‘s defendant is a corporation asking the Court to apply a statute of limitations in exactly the  same overly-aggressive manner as the Court did in Ledbetter.  If the Court complies, it will be hard to read that decision as anything other than a great big middle finger to Congress and the Lilly Ledbetter Fair Pay Act.

(Dis)Honorable Mentions

  • Phillip Morris v. Williams: The Supremes have twice recoiled at an Oregon decision awarding $79.5 million in punitive damages against cigarette manufacturer Phillip Morris.  Historically, punitive damages have been used to spank companies who need a little more incentive to quit their repugnant actions than a regular damages award would allow.  Let’s say, for example, that Arson, Inc. can earn $1 million in profits by burning down my $200,000 house.  If they light the fire, and I sue and win, the company is still up $800,000.  Which means they have no reason to stop engaging in arson.  Punitives jack up the cost of bad behavior beyond the point where companies can still make a profit behaving  badly, such as by awarding me an additional $900,000 against Arson, Inc. to be sure the company pays for more than it gets.  Regardless, the Supreme Court has showed little patience for punitives lately (a matter I will lament at length on another day), and I don’t imagine that Phillip Morris’ latest trip to the Supremes will turn out any differently.
  • 14 Penn Plaza LLC v. Pyett: Frequent readers of this blog know that I am no fan of binding mandatory arbitration, an abusive practice used by companies to prey on individual consumers, workers and patients.  That doesn’t mean that all arbitration is a bad thing, however.  Unions frequently agree to resolve their disputes with management through arbitration, and there is nothing inherently wrong with this.  Pyett, however, concerns whether a union’s decision to arbitrate its own disagreements with management prevents an individual employee from suing the employer for discrimination when the union itself has already sided with the employer.  The answer to this question strikes me as a resounding “no,” and I’ll probably have something to say if the justices disagree with me.

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[…] ——————————- Please send questions or tips to: overruled/at/hotmail.com Nothing on this site should be understood to create an attorney/client relationship. Surprise! March 31, 2009, 9:17 am Filed under: Ian | Tags: philip morris, punitive damages Supreme Court does not reverse a substantial punitive damages award again Philip Morris, defying my prediction. […]

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