In 2003, the Texas Legislature changed the landscape for residential construction litigation. They created the Texas Residential Construction Commission (TRCC)and also set up a “dispute resolution process” that most construction defect cases had to go through before proceeding in the court setting. The law is a disaster for homeowners. Cases sit in the process for ridiculous amounts of time and there is no real mechanism to enforce any finding of wrongdoing by the builders. In short, builders love the bill; homeowners hate it. It is such a resounding success that the staff of the Texas Sunset Commission (which reviews state agencies) issued a scathing report calling for abolition of the Commission, though the Commission itself voted in December to recommend keeping it with significant modifications.

It was apparently such a success that some legislators want to expand the provisions.  I received a draft of a bill today that has not yet been filed, but it would create a system similar to the TRCC for commercial construction disputes.  However, it goes further; instead of the ridiculous “dispute resolution process” in residential claims, the new bill appears to require arbitration for any dispute relating to a commercial construction defect, potentially including personal injury claims (though the bill itself is vague).

I don’t do commercial construction cases, but I do handle personal injury claims resulting from commercial construction defects.  Frankly, I’m appalled, and I hope all other lawyers would be too.  The legislature has done some ridiculous things, but even in the egregious medical malpractice limitations they didn’t seek to take away the right to a jury trial.

I’ll be tracking this bill and trying to keep the status updated.

To contact Austin Personal Injury Lawyer, Austin Personal Attorney, Austin Accident Lawyer, Austin Injury Lawyer Perlmutter & Schuelke, LLP or to learn more about Austin Personal Injury visit http://www.civtrial.com/.

I’m a few days behind on my magazines (actually, more than that judging by the pile on my desk) so I just got around to reading my January 5, 2009 Texas Lawyer, which contains an article entitled  DOWN MARKETS REQUIRE CREATIVE CHOICES: Use Flexible Fee Structuring To Add Clients In Tough Times.

In the article, the author, Philadelphia lawyer Gavin Lentz, makes some great points.  He states:

While many law firms seem to be bracing for disaster in this market, I see an excellent opportunity to generate new clients while also building an upside into your fee agreements. Although the current economic conditions are causing an explosion of litigation, many clients are experiencing extremely tight cash flow and cannot afford the usual fee structures.

Under these circumstances, how do you turn this to your advantage? The answer is multiple types of flexible-fee agreements that both new and existing clients will greatly appreciate. Firms that refuse to be flexible and creative in a down market risk losing clients and enhanced fees. I have already seen a number of clients that have been turned away by other firms because those lawyers are not taking the long-term view regarding client relationships and the economy.

Although current budget conditions may preclude clients from paying typical initial retainers and monthly fees, I have found that you can solidify your relationship with both new and existing clients by negotiating an upside reward for taking a risk to help clients through these difficult times.

To meet these problems, Mr. Lentz suggests using multi-phased fee agreements (flat fees based on portions of cases) or blended contingency agreements (client pays an initial flat-earned fee and then a percentage of the recovery after that).  But Mr. Lentz doesn’t go all the way.  Why doesn’t he ever suggest taking a case on a full contingent fee?  There are plenty of lawyers (including our firm or my friend Randy McClanahan who has a contingent fee blog) that routinely take commercial matters on a contingent basis.  And many of us have been doing it for years, not just now when times are tough.

Don’t get me wrong.  There are times and places for hybrid agreements (we’ve used all kinds of hybrid agreements in our practice), but leave open the possibility of a full contingent fee.  If you want to alilgn the interests of the attorneys and the clients, the best manner, when possible, is a full contingent fee.

To contact Austin Personal Injury Lawyer, Austin Personal Attorney, Austin Accident Lawyer, Austin Injury Lawyer Perlmutter & Schuelke, LLP or to learn more about Austin Personal Injury visit http://www.civtrial.com/.

Attorney and CBS News analyst Andrew Cohen had a great opinion piece Saturday calling out the US Chamber of Commerce entitled “Made in America: Corporate Gall — On Corporations Seeking to “Reform” the Very System They Broke.”

It’s an oustanding article, and I would cut and paste the entire thing if I wasn’t afraid of violating copyright laws.  Instead, here’s the introduction:

Like the child who kills his parents and then begs for mercy because he is an orphan, the U.S. Chamber of Commerce now is begging President-elect Barack Obama to protect corporate interests in the nation’s civil litigation system as a way of restoring jobs and bolstering an economy shattered largely (as we now know) by corporate greed and misfeasance.

Talk about your gall.

I encourage anyone interested in the civil justice system to click the link and read the entire article.

To contact Austin Personal Injury Lawyer, Austin Personal Attorney, Austin Accident Lawyer, Austin Injury Lawyer Perlmutter & Schuelke, LLP or to learn more about Austin Personal Injury visit http://www.civtrial.com/.

Attorney and CBS News analyst Andrew Cohen had a great opinion piece Saturday calling out the US Chamber of Commerce entitled “Made in America: Corporate Gall — On Corporations Seeking to “Reform” the Very System They Broke.”

It’s an oustanding article, and I would cut and paste the entire thing if I wasn’t afraid of violating copyright laws.  Instead, here’s the introduction:

Like the child who kills his parents and then begs for mercy because he is an orphan, the U.S. Chamber of Commerce now is begging President-elect Barack Obama to protect corporate interests in the nation’s civil litigation system as a way of restoring jobs and bolstering an economy shattered largely (as we now know) by corporate greed and misfeasance.

Talk about your gall.

I encourage anyone interested in the civil justice system to click the link and read the entire article.

To contact Austin Personal Injury Lawyer, Austin Personal Attorney, Austin Accident Lawyer, Austin Injury Lawyer Perlmutter & Schuelke, LLP or to learn more about Austin Personal Injury visit http://www.civtrial.com/.

I’m not usually surprised when insurance companies win at the Texas Supreme Court, but today was a little stunning when the Court issued its opinion in USF&G v. Goudeau.  And I’ll warn you up front, I’m short on time and don’t have a lot of time to explain my ramblings below.

While working on the job, Goudeau stopped on a Houston freeway to help another motorist.  Shortly after Goudeau got out of his car, an SUV hydroplaned and hit both cars, pinning Goudeau between the cars and a retaining wall and causing Goudeau serious injuries.

USF&G was the carrier for the UIM policy and also the company that issued the worker’s compensation policy that paid for much of Goudeau’s medical care.

Goudeau sued USF&G for UIM benefits.  USF&G answered the lawsuit with one law firm and a few days later intervened to recover its subrogation interest with another law firm.  (Normally, if you recover from a third party, you have an obligation to pay a worker’s comp carrier back a portion of what they paid on your behalf.)

USF&G took the position that the uninsured motorist coverage didn’t apply because Goudeau wasn’t “occupying” his vehicle at the time of the accident.  But, by filing the subro claim, USF&G is also saying that if money is owed, then it goes right back to us.

One question the court answered was what does “occupying” mean?  The court said Goudeau wasn’t occupying the car because he wasn’t in it.  That doesn’t surprise me.  There are other courts all over the country that define occupying in such a way that coverage would exist ( eg some states find occupancy when the person is in close proximity to the car, when the person is “within a reasonable geographic perimeter” of the car, or if occupancy started the chain of events that led to the incident).  But there is no realistic expectation that the Court would interpret the phrase in a way that provides more coverage and protections than it has to.  The Court says we must look at the plain meaning of the word “occupying.” Thus, there’s no coverage.

What did surprise me was the Court’s finding that USF&G was not bound by its answer to a request for admission that the claim was covered.  During the case, Goudeau sent a request for admission to the USF&G lawyer on the subro side of the case who admitted that the claim was covered.

The Court says that the admission from USF&G subro lawyer isn’t an admission because USF&G is acting in different capacities. That’s problematic because it’s not true.  USF&G is never acting in two capacities.  It’s always acting on its own behalf. While one lawyer did the defense of the UIM claim and one did the intervention on the subro claim, USF&G is still only USF&G.

First, the Court looks at Rule 198, which says that requests for admission can only be used against the “party making the admission.”  The Court says the question is how to apply that when the party appears in two different capacities.  But what happened to the plain meaning rule the Court said was so necessary to interpret “occupying?” If you look at the plain meaning, USF&G is the same party and the admission should be binding.  But the plain meaning rule is out the door here because it would be against USF&G.

Then the Court cites an old case that involved requests for admissions against a woman that was sued individually and as the executor of her husband’s estate.  In that case, the court held that the admissions were admissible only against the woman individually, because they were directed to her in that capacity, and weren’t binding on the estate.

But that’s a very different situation.  The woman in that case is appearing on behalf of two distinct entities — herself and the estate.  There is no such segregation between USF&G.  They are the same party, and in the defense and in the subrogation claim, they are both appearing on behalf of USF&G, not in some capacity on behalf of another entity.  There’s no capacity question here because it’s all USF&G.

The Court then goes on to say that insurance companies are faced with this problem all the time when they represent both parties in an auto accident or when defending an insured while denying coverage. The Court says that “if they [insurance companies] can be bound by an admisison in one capacity that was sent to them in another, they can be made to forfeit every case regardless of the merits.”  That is simply ridiculous.

In their first example, an insurance company represents two individuals in a wreck.  But the lawyer doesn’t represent the insurance company.  The lawyer represents Smith & Jones, the participants.  If Smith makes an admission, it’s binding on Smith but no one else.  Likewise for Jones.   No admission in that case implicates the insurance company, and no admission could make the insurance company “forfeit every case regardless of the merits.”

In the second example, the Court says that insurance companies have a problem when defending an insured while denying coverage.  But when defending the insured, the insurance company isn’t a party to the lawsuit.  If the defendant tortfeasor answers an admission, the insurance company isn’t bound by it.  Again, that admission wouldn’t implicate the insurance company.

The difference in this case is that both of the actual parties were USF&G.  They were making different claims, but they were both acting on behalf of itself and not in a represntative capacity of some other entity.

Kudos to Justices Green, Jefferson and Johnson for a good dissent.  As they stated:

The pleadings of both the intervenor and the defendant are consistently attributed to USF&G, and there is no indication of any real separation between the USF&G that administers the auto policy and the USF&G that administers the worker’s compensation policy.  Although, as the Court points out, insurers may stand in different shoes or act in different capacities, there is no indication that USF&G in this case is anything but a single entity with the power to sue and be sued only in the name of USF&G.

Okay.  My rant is over.  Have a great weekend.

To contact Austin Personal Injury Lawyer, Austin Personal Attorney, Austin Accident Lawyer, Austin Injury Lawyer Perlmutter & Schuelke, LLP or to learn more about Austin Personal Injury visit http://www.civtrial.com/.

One of the hottest topics in the personal injury arena right now is preemption. Generally, the argument for preemption is that if a product complies with federal regulations relating to the safety of that product  (even if the regulations are not adequate) then manufacturers should be completely immune from state tort lawsuits based on defects on that product because the federal law trumps state law.

Next Monday, the U.S. Supreme Court will hear the case of Wyeth v. Levine. In that case, the drug manufacturer and the U.S. Food and Drug Administration, with the consent of the Bush Administration, will argue that federal drug-approval and warning-label standards should trump stricter state law liability claims.  The plaintiff won a multi-million judgment after arguing that the drug she was using didn’t warn that gangrene was a side effect.  (The plaintiff, a musician, eventually lost her arm to gangrene.)  The manufacturer argues that they are entitled to complete immunity because the federal regulations don’t require them to warn of gangrene.

Prior to the Bush Administration, the FDA had taken the position that state tort laws worked in concert with regulations and provided an extra protection for consumers. The effort for preemption, not just with the FDA, but with almost all regulatory agencies, has been pushed by the Bush Administration as a long-term form of tort reform. The Bush Administration has urged the adoption of over 50 regulations that encourage preemption.

Yesterday, several FDA documents were released showing that even senior members of the FDA knew the dangers of preemption. John Jenkins, the top official in the FDA drug approval section, wrote in 2003:

Much of the argument for why we are proposing to invoke pre-emption seems to be based on a false assumption that the FDA approved labeling is fully accurate and up-to-date in a real time basis.

The report that included the preemption memos concludes:

FDA has an obligation to ensure the safety and effectiveness of drugs. In this case, however, the internal documents indicate that the Bush Administration weakened important drug safety regulations to shield manufacturers from liability. This is a serious abuse of the agency’s publich health authorities.

One other story notes that the memos were forwarded to the FDA’s chief counsel, who is now the general counsel for pharmaceutical giant Glaxo-Smith-Kline.

To read more on preemption, check out:

• Get Out of Jail Free:  How the Bush Administration Helps Corporations Escape Liability (AAJ)
• Preemption v Preemption v Preemption  (Turkewitz)

To contact Austin Personal Injury Lawyer, Austin Personal Attorney, Austin Accident Lawyer, Austin Injury Lawyer Perlmutter & Schuelke, LLP or to learn more about Austin Personal Injury visit http://www.civtrial.com/.

This morning’s New York Times had a discouraging piece detailing President Bush’s judicial appointees.  In the article, President Bush noted that “he had appointed more than a third of the federal judiciary expected to be serving when he leaves office, a lifetime-tenured force that will influence society for decades and that represents one of his most enduring accomplishments.”

What does that mean to our clients?  While there are many Bush appointees that are good judges, including at least one judge in the Austin Division, Bush’s appointees “have been moer likely than their colleagues to favor corporations over regulators and people alleging discrimination, and to favor government over people who claim rights violations.  They have also been more likely to throw out cases on technical grounds, like rejecting plaintiffs’ standing to sue.”

We don’t see it so much in the trial courts here, which are very good.  But it seems that ruling after ruling comes down from the Fifth Circuit, which governs Texas, that make helping people that much more difficult.

The judiciary is also an important factor in the upcoming presidential election.  As the article continues:

An Obama victory could roll back the Republican advantage on the appeals courts and even create a Democratic majority by 2013, according to a study of potential vacancies by Russell Wheeler of the Brookings Institution. But if Mr. McCain wins, Republicans could achieve commanding majorities on all 13 circuits.

Regardless of what happens, we’ll still be out there fighting the battles for the public’s rights.

To contact Austin Personal Injury Lawyer, Austin Personal Attorney, Austin Accident Lawyer, Austin Injury Lawyer Perlmutter & Schuelke, LLP or to learn more about Austin Personal Injury visit http://www.civtrial.com/.

Earlier this week, Jonathon Glater of the New York Times had an article that discussed how businesses use arbitration agreements.  Apparently, at a time when businesses are becoming more and more aggressive about using arbitration clauses in their contracts with consumers, they still aren’t using them in business to business contracts.

The article is based on a study performed by law professors Theodore Eisenberg (Cornell University School of Law), Geoffrey Miller (NYU School of Law), and Emily Sherwin (Cornell University School of Law).  The study was updated this summer (we had a previous post about the study’s original release last year).

The study found that business included mandatory arbitration clauses in 75 percent of consumer agreements but in just 24 percent of contracts over all. The inclusion rate was up significantly from prior studies.  From the article:

Companies say that arbitration is “a fair and cost-saving process,” he [Professor Eisenberg] continued. “If they believe that is true across the board, why don’t they insist on it when they contract with each other?”

Our thoughts are available in our prior post.  The one thing that stood out in the new study was businesses use of arbitration clauses to try and kill class actions.  The article notes:

Every consumer contract with an arbitration clause also waived possible group, or class, arbitration.

“I believe they’re really using arbitration as a way of avoiding class action litigation,” said Theodore Eisenberg, a law professor at Cornell. Because it is not worth it to a single upset consumer to sue a big company, he said, “the only thing those companies fear is your having a plaintiffs’ lawyer aggregate you and people like you into a class action.”

As we have continuously stated, we think arbitration is appropriate in many cases, but it’s difficult to know what cases are appropriate for arbitration at the time the contracts are entered into.  That is particularly true in consumer cases, where consumers are asked to agree to arbitration rules that they do not understand.

To contact Austin Personal Injury Lawyer, Austin Personal Attorney, Austin Accident Lawyer, Austin Injury Lawyer Perlmutter & Schuelke, LLP or to learn more about Austin Personal Injury visit http://www.civtrial.com/.

A few weeks ago, I wrote about a dispute that was coming to a head in the Texas Third Court of Appeals, which is housed in Austin.  The dispute involved the criminal case against Tom Delay and his business associates.  The Third Court issued a ruling in the criminal case that was very favorable to Delay and the defendants.

After the decision was handed down, Travis County District Attorney Ronnie Earle filed a Motion to Recuse, asking one of the judges to be removed.  The judge had formerly represented Texans for Lawsuit Reform, which involved many of the same players as the criminal case, and had allegedly made disparaging remarks about a civil suit that was based on the similar facts as the criminal case that was at issue.  Based on that history, Earle asked that the judge recuse himself or be removed from the case.

Last week, the Third Court handed down an order denying the motion.  The order was issued without the benefit of an opinion.  So the claim is over, right?  Not so.

Yesterday, the Austin American Statesman, had an article that contained allegations from Justice Jan Patterson, one of the justices on the Third Court, that she wanted to issue a dissenting opinion but that Chief Justice Ken Law had ordered the clerk of the court not to accept the dissent.  Justice Patterson filed a petition with the Texas Supreme Court seeking an order requiring the release of her dissenting opinion.

Today, the Statesman had another article and Justice Law claims that he has no problem releasing the dissent, but that Justice Patterson failed to circulate the order per court rules.  (Justice Patterson has written plenty of dissenting opinions so it’s not clear to me why the rules would be an issue now, but not in the other instances).

I’m not sure how this story will play out, but it is interesting because you normally don’t get this quibbling between justices in the press.

It is also interesting because Chief Justice Law is up for re-election this year, and has a tough race against Woodie Jones, who was formerly a judge on the Third Court.  In a State Bar of Texas poll of attorneys in the Third District, Judge Jones received over 85% of the vote.

To contact Austin Personal Injury Lawyer, Austin Personal Attorney, Austin Accident Lawyer, Austin Injury Lawyer Perlmutter & Schuelke, LLP or to learn more about Austin Personal Injury visit http://www.civtrial.com/.

Earlier this week, Jonathon Glater of the New York Times had an article that discussed how businesses use arbitration agreements.  Apparently, at a time when businesses are becoming more and more aggressive about using arbitration clauses in their contracts with consumers, they still aren’t using them in business to business contracts.

The article is based on a study performed by law professors Theodore Eisenberg (Cornell University School of Law), Geoffrey Miller (NYU School of Law), and Emily Sherwin (Cornell University School of Law).  The study was updated this summer (we had a previous post about the study’s original release last year).

The study found that business included mandatory arbitration clauses in 75 percent of consumer agreements but in just 24 percent of contracts over all. The inclusion rate was up significantly from prior studies.  From the article:

Companies say that arbitration is “a fair and cost-saving process,” he [Professor Eisenberg] continued. “If they believe that is true across the board, why don’t they insist on it when they contract with each other?”

Our thoughts are available in our prior post.  The one thing that stood out in the new study was businesses use of arbitration clauses to try and kill class actions.  The article notes:

Every consumer contract with an arbitration clause also waived possible group, or class, arbitration.

“I believe they’re really using arbitration as a way of avoiding class action litigation,” said Theodore Eisenberg, a law professor at Cornell. Because it is not worth it to a single upset consumer to sue a big company, he said, “the only thing those companies fear is your having a plaintiffs’ lawyer aggregate you and people like you into a class action.”

As we have continuously stated, we think arbitration is appropriate in many cases, but it’s difficult to know what cases are appropriate for arbitration at the time the contracts are entered into.  That is particularly true in consumer cases, where consumers are asked to agree to arbitration rules that they do not understand.

To contact Austin Personal Injury Lawyer, Austin Personal Attorney, Austin Accident Lawyer, Austin Injury Lawyer Perlmutter & Schuelke, LLP or to learn more about Austin Personal Injury visit http://www.civtrial.com/.