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Court sides with employee in benefits case
Law & Court News |
2008/06/19 10:11
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| The Supreme Court said Thursday that courts should consider an insurance company's potential conflict of interest when reviewing the denial of an employee's health or disability benefits claim.pThe court ruled 6-3 in the case of an Ohio woman who sued MetLife Inc. over a disability claim. She contended insurance companies have a financial incentive to deny claims and that conflict of interest should weigh heavily in employees' favor when they challenge benefit claims in court./ppA federal appeals court ordered Wanda Glenn's benefits reinstated. The Supreme Court upheld that ruling./ppWriting for the majority, Justice Stephen Breyer said federal law imposes a special standard of care on insurers requiring full and fair review of claim denials. Breyer noted that MetLife had emphasized a medical report that favored denial, de-emphasized other reports suggesting benefits should be granted and failed to provide MetLife's vocational and medical experts with all relevant evidence./ppDissenting, Justice Antonin Scalia said the court is using the wrong standard in dealing with potential conflicts of interest. Scalia said there must be evidence that a conflict improperly motivated a denial of benefits. In the MetLife case, there was no such evidence, Scalia said. Justices Clarence Thomas and Anthony Kennedy also dissented./ppMetLife administered a disability plan for Sears, where Glenn worked for 14 years. The insurance company paid benefits for two years but in 2002 said her condition had improved and refused to continue the benefit payments. MetLife saved $180,000 by denying Glenn disability benefits until retirement, her lawyers said in court filings./ppThe 6th U.S. Circuit Court of Appeals ordered Glenn's benefits reinstated in September 2006, ruling that MetLife acted under a conflict of interest and made a decision that was not the product of a principled and deliberative reasoning process. MetLife argued that the standard used by the 6th Circuit would encourage participants with dubious claims to file suit, which in turn would raise the costs of benefit plans to both companies and employers./p |
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Former Milberg Weiss Partner Sues
Attorney Blog News |
2008/06/18 07:58
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pA former partner in Milberg Weiss has sued four of its founding partners - Melvyn Weiss, David Bershad, Steven Schulman, and William Lerach - claiming they lied to him and other attorneys about their secret kickbacks to plaintiffs in shareholder class actions. Michael Buchman sued his former partners in Federal Court on Tuesday, as the firm, now known as Milberg, agreed to pay $75 million to the United States to settle criminal complaints in the scheme.
Buchman says he joined Milberg Weiss Bershad Hynes amp; Lerach in January 1997 and was made a partner in December 2000. He worked in the antitrust division until he left the firm in February 2007. When Lerach left to set up his own office in 2004, the firm changed its name to Milberg Weiss Bershad amp; Schulman.
Buchman says the defendants lied to him, and to other attorneys, after federal prosecutors unsealed an indictment in which Seymour Lazar and Paul Selzer alleged that certain partners of Milberg Weiss had secretly paid them kickbacks to serve as plaintiffs in securities class actions.
Buchman's complaint states: In various meetings that occurred at Milberg Weiss after the Lazar Indictment, Defendants Weiss, Bershad and Schulman, who were united in interest, repeatedly represented to plaintiff and to other partners in Milberg Weiss hat the accusations contained in the Lazar Indictment were untrue, politically motivated, and that the government's case rested on mischaracterization of legitimate referral fees paid to other law firms, which assertedly had been duly reported to the government of Forms 1099. Weiss, for example, vigorously denied that the alleged payments had been made to Lazar, and represented that Lazar's sold motivation for pursuing multiple class actions had been to recover for his own injuries and to serve as 'a crusader.'
Believing these representations of fact by defendants, plaintiff continued to serve as a partner in Milberg Weiss. Similarly, most other Milberg Weiss partners who had no prior knowledge of defendants' unlawful and unethical acts also continued throughout the rest of 2005 to serve as Milberg Weiss partners.
Defendants had a fiduciary duty to plaintiff and to other Milberg Weiss partners to be honest and forthcoming with government authorities. Were the allegations made in the Lazar Indictment true, defendants had a duty truthfully to reveal their unethical and unlawful conduct to the authorities and to take personal responsibility for such conduct. Instead, defendants refused to acknowledge the truth and continued to misrepresent the facts to government authorities, thereby putting Milberg Weiss as a firm, and the financial and professional interests of plaintiff and other innocent Milberg Weiss partners, in grave jeopardy./p |
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ACLU files suit against Texas juvenile prison system
Law & Court News |
2008/06/17 07:51
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| pThe American Civil Liberties Union (ACLU) filed a class action lawsuit Thursday against the Texas Youth Commission (TYC), alleging that five girls imprisoned at the Ron Jackson State Juvenile Correctional Complex were subjected to punitive solitary confinement, physical abuse and invasive strip searches. The ACLU alleged that the treatment violated the girls' rights under the US Constitution and international law, including the Convention on the Rights of the Child. TYC officials responded that the agency is working to address the issues raised in the lawsuit./ppIn May 2007, TYC announced it would release 226 inmates after an investigation revealed that their sentences had been improperly extended in retaliation for filing grievances. In June 2007, Congress passed a bill to reform the Texas juvenile prison system, creating the Office of Inspector General to internally police the system. The Ron Jackson girls' facility is estimated to hold about 190 inmates./p |
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Ginsburg Reverses FOIA Denial
Law & Court News |
2008/06/16 07:45
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An airplane enthusiast has the right to seek documents from the Federal Aviation Administration, though the lower court had denied his friend the same documents.
Greg Herrick was denied access to the documents, due to an exemption covering trade secrets. When his friend filed a similar lawsuit, the lower court said the lawsuit was precluded by the first ruling. The D.C. Circuit upheld, but Justice Ginsburg reversed, shooting down the Circuit's 5-point test for virtual representation.
Extending the preclusive effect of a judgment to a non-party runs up against the deep-rooted historic tradition that everyone should have his own day in court, Ginsburg wrote.
For a lawsuit to be precluded, the two parties must have pre-existing substantive legal relationship or one party must have assumed control over the previous litigation, according to the unanimous opinion. |
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Subscription Bill for $11.83 Brings $5 Million Award
Attorney Blog News |
2008/06/13 07:33
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A bill for $11.83 led a customer to file a federal class action accusing XM Satellite Radio of illegally renewing subscribers' contracts without proper notice. Damages are estimated at more than $5 million.
On behalf of all XM subscribers in New York, Richard Vacariello claims XM violates New York General Obligations Law §50903 by failing to notify subscribers 15 to 30 days before automatically renewing their subscriptions.
Vacariello took a 3-year subscription and used it in a leased automobile, then turned in the car and let the XM subscription expire - he thought. After he turned in the car, he says, XM sent him a bill for $359.64. (It is not clear from the complaint whether this was a bill for another year or for another three years.) Vacariello says he objected, and that XM told him it had automatically renewed the contract.
So Vacariello says he canceled the contract immediately, only to have XM send him another bill - for $11.83 - for the period after the 3-year contract expired, and before he canceled the automatic renewal.
Vacariello says XM refused to cancel the $11.83 bill, so he paid it under protest, for fear of harming his credit. Then he filed this class action. He estimates class damages at more than $5 million. He demands compensatory damages and an injunction. |
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