Abell's Kentucky Law Blog

Sealing Court Records Harms Public

Sealing court documents prevents families from learning about dangerous products and is harmful to the public interest. Congress is considering the Sunshine In Litigation Act to end the practice and promote family safety. 

Here's an example according to the American Association for Justice:  Bausch & Lomb has settled more than 600 contact lens solution cases in the last year. The solution is said to cause fungus infections and can cause blindness. Yet Bausch & Lomb forced all court documents in the case to remain sealed, keeping contact solution users and doctors without any knowledge of the causes of the infections.  Among the sealed documents are internal investigations into the cause of the fungus infections and details of outdated company testing procedures used for market approval-standards which are widely used by other contact solution manufacturers. Read here the AAJ's press release: Loophole In the Courts Leaves Dangerous Products On the Market: Car Tires and Contact Lens Solution Just Two Examples.

Another example is a lawsuit filed against Cooper Tires contending defects allowed the tread to separate from the tires and caused the deadly rollover that killed eight students and a teacher from Utah State University.  A key piece of evidence is a memo that the lawyer representing the families located in a court record in Mississippi.  The memo shows that Cooper Tires did away with the basic safety feature that would have prevented the deadly tire separations and associated rollover problems.  The families' lawyer, Bruce Kaster, testified to the House Judiciary Committee:  "Tens of thousands of Americans, if not hundreds of thousands, have been killed or seriously injured by defective products that manufacturers are aware of, but the public is not," because they manage to seal sensitive documents in court. The Deseret News reports further: Do Courts Sanction Suit Secrets?

Robert L. Abell
www.RobertAbellLaw.com

Fayette Judge Protects Families, Restrains Deceptive Telemarketers

Consumers were protected Friday when Fayette Circuit Judge Kimberly Bunnell issued an injunction restraining telemarketers from phoning Kentuckians and making allegedly deceptive auto warrant pitches reports kentucky.com, "Fayette Judge Issues Restraining Order Against Telemarketing Firms." 

Robert L. Abell
www.RobertAbellLaw.com

FDA Cites Drugmakers for "Misleading" Internet Ads

The Food and Drug Administration (FDA) has cited 14 drugmakers for “misleading” internet ads according to a report by Bloomberg News, “Drug Makers Cited by FDA for ‘Misleading’ Internet Ads.” The companies failed to identify product names and side effects associated with their drugs on sponsored search results for internet search engines. The FDA ordered the drug makers to stop using the ads.

 

Robert L. Abell
www.RobertAbellLaw.com

Real Estate Closing Kickback Scheme Violates RESPA

Homebuyers' rights under the Real Estate Settlement Procedures Act (RESPA) prohibit any type of kickback or fee-splitting arising from settlement services regardless of whether the homebuyers were overcharged the United States Court of Appeals for the Sixth Circuit recently ruled in Carter v Welles-Bowen Realty, Inc, No 07-3965 (6th Cir, January 23, 2009). In the event of a violation, the homebuyer may recover "an amount equal to three times the amount of any charge paid for such settlement service."

The Carters bought a home and were represented by Welles-Bowen Realty, Inc. (WB Realty), which was co-owned by WB Investors and Chicago Title. WB Realty referred the Carters to WB Title to handle their closing. WB Title charged the Carters $946.28 to title insurance, which included $696.28 for an owner's policy, $75.00 for a title commitment or binder, $100.00 for survey coverage and $75.00 for an environmental protection lien endorsement.  

The Carters filed suit claiming that the arrangement violated RESPA, whose section 8 prohibits the following:

(a) Business referrals

No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.

(b) Splitting charges

No person shall give and no person shall accept any portion, split or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.

The Carters alleged that WB Title was a sham title company which performed no actual settlement work but, nonetheless, received unearned monies from Chicago Title, which actually did the real settlement work. Chicago Title, the Carters further alleged, provided illegal kickbacks or splits in the form of their share of WB Title's profits, which Chicago Title would be paid for its work through its share of the ownership of WB Title. However, the Carters did not claim that they were overcharged.

Whether the Carters were overcharged was irrelevant, the court ruled because a violation of RESPA's anti-kickback prohibitions made "a defendant liable for the charges assessed the home buyer for settlement services as a whole, and not just for overcharges."

Robert L. Abell

www.RobertAbellLaw.com

Enforce Discrimination and Consumer Protection Laws Toward Solving the Mortgage Mess

Predatory lending in violation of federal discrimination and consumer protection laws is a large component of the mortgage mess that has brought our national economy to a standstill.  Enforcement of of federal discrimination and consumer protection laws is one means to force the predatory loan sharks to pay their share of remedying the mess suggests law professor Ray Brescia in an interesting article, Eat the Loan Sharks?, on Slate.  He reports that Federal Reserve data from 2006 shows that, among borrowers of similar income, 30 % of African-Americans received subprime loans, 26 % of Latinos did compared with only 18% of white borrowers, facts that suggest discriminatory lending practices in violation of federal law.  Professor Brescia explains further:

This discrimination is at the core of a number of lawsuits advocates have filed across the country over the last year. Several of the cases focus on a particularly devious practice: Without borrower knowledge, many mortgage brokers received a commission from the lender for persuading a borrower to accept a higher loan interest rate than what the bank was otherwise willing to offer. The lawsuits claim that such commissions were paid more often in loans to African-Americans and Latinos than in loans to whites, revealing, again, that lenders often charged borrowers of color more than their white counterparts. As these suits progress, and the groups suing gain access to lenders' and brokers' records—e-mails, internal memoranda, training materials, and other documents—we are likely to learn more about the practices of the lenders who are the defendants and about the industry in general.

Professor Brescia also notes that consumer protection laws in many states also prohibit the common practice of mortgage brokers increasing their own commissions by steering borrowers into more expensive mortgages.  

Robert L. Abell

www.RobertAbellLaw.com

Tainted Toys To Remain For Sale, Consumer Product Safety Commission Says

Children's toys, including teethers and pacifiers, tainted by the presence of the controversial chemical phthalate will remain for sale for now and even after a ban takes effect on February 10, 2009, provided they were manufactured before that date, according to a decision by the Consumer Product Safety Commission, the Washington Post reports, "Some Toys With Banned Plastics Will Stay On Market." 

Phthalates are a chemical used in soft plastics and are linked to reproductive problems.  Their use was banned by a law passed in August.  However, the Commission's ruling will allow products made before that date which use the banned substance to be sold, even after February 10, 2009. 

The Commission proposes a remedy that is unworkable; it says that concerned parents can call a product's manufacturer and find out when the item was made.  This is a proposal untethered from reality.  One can first question the reliability of any information a parent would receive.  Do you call before the item is purchased?  Do you identify the item on the store shelf, call and return later hoping to find the same item on the shelf?  Ignoring these realities the Commission caved into industry's complaints about complying with this law protecting families and their children.

Robert L. Abell
www.RobertAbellLaw.com

American Association for Justice Reports On Insurance Companies' "Tricks of the Trade"

The American Association for Justice (AAJ) has continued its examination of the insurance industry.  In July, AAJ released a report The Ten Worst Insurance Companies in America: How They Raise Premiums, Deny Claims, and Refuse Insurance to Those Who Need It Most.  Now, AAJ reports on the insurance industry's stonewalling, subterfuge and other unethical and bad faith practices: Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse. 

The favorite tricks include the following: denying claims, delaying until death, confusing consumers, discriminating by credit score, abandoning the sick and cancelling for a call.

Robert L. Abell
www.RobertAbellLaw.com

"Get Out of Jail" Free Cards For Corporations -- American Association for Justice Details Undermining of Family and Consumer Protections

The American Association for Justice has released a report, Get Out of Jail Free: How the Bush Administration Helps Corporations Escape Accountability, detailing the systematic and widespread undermining of family and consumer protections by Bush Administration agencies and political appointees.  Through documents and emails obtained via the Freedom Of Information Act the AAJ report traces the evolution and development of a federal preemption strategy, a legal doctrine by which state law protections for families and consumers are eliminated or "preempted" by federal regulations that insulate corporations from liability, accountability and responsibility for their defective products.

Robert L. Abell
www.RobertAbellLaw.com

Drop Side Crib Recall

Following the death of one child and harrowing incidents involving others the Consumer Product Safety Commission announced today the recall of about 600,000 drop side cribs manufactured by Delta Enterprise Corp.  The drop side of the defective cribs can detach when its spring peg is not engaged.  Further and detailed information can be obtained at the CPSC website by clicking here.

Robert L. Abell
www.RobertAbellLaw.com

Fen-Phen Flim-Flam: Don't Be A Victim Of Lawyer Advertising

Surely one lesson from the Fen-Phen case debacle is how utterly unhelpful lawyer advertising is as a way for the average person, who probably has no prior involvement at all with the legal system, to find a lawyer to help them. For years here in Central Kentucky we were regaled with colorful television ads that urged us to “Call the Man.” Apparently, many did including a few hundred that were injured by the Fen-Phen diet drug. During the recent Fen-Phen criminal trial, however, we learned that “the Man” they called was so incoherently drunk in the early A.M. hours that he could not understand, at least according to the jury’s verdict, the circumstances by which he was collecting some many millions in attorneys fees. 

It doesn’t take that much to participate in a federal criminal conspiracy: only knowledge of a criminal purpose and something (an overt act) done in furtherance of the conspiracy’s purpose. But putting aside issues of criminal conspiracy, one can fairly wonder exactly what legal services were provided to justify any fee.

But all that begs the question of what is an individual to do when they or a family member has suffered some serious personal injury and they need to find a qualified lawyer to represent them. Looking at the Yellow Pages isn’t going to provide much help, although it is a place to start. Most of the ads all say about the same thing: something to the effect that the lawyer will rip the flesh off somebody while representing you and/or they handle a variety of types of cases.  All that’s good and well but how are you to have any idea as to whether the lawyer is smart and capable and experienced.  Most consumers have no idea how to go about making this type of assessment. 

So here are some helpful tips:

• Ask a lawyer that you know for a referral. He or she will likely know somebody who handles the type of case you have. If you don’t know any lawyers, go to www.lawyers.com and start ther

• The phone book actually can be a good place to start but keep in mind that not all lawyers advertise in the Yellow Pages.

• Meet with and interview a number of attorneys. Ask each one who else in town handles your type of case. If they won’t give you any names, get up and leave.

• Ask each lawyer to explain to you why it is they think you have a case. You should be able to understand the explanation; if you can’t, ask yourself how the lawyer is going to be able to make a jury, which will be made of people just like you, understand it. Of course, keep in mind at the beginning of a case the lawyer may not know all the facts that will prove important but they should be able to give you an informed outline of how they would anticipate your case moving forward.

• Ask each lawyer if they have any information to provide you such as a website or other materials that you can review on your own time to find out more about your type of case, their qualifications, and experience.

• Ask the lawyer if they will handle your case or if somebody else in their office will.

• Find out how the lawyer will keep you informed about the progress of a case. You should understand how you can expect your case to move forward, what events will take place and what a general time frame may be.

Don’t be a victim of a Fen-Phen flim-flam.  When you or your family are faced with a serious injury or other serious legal situation, finding and hiring a good lawyer to represent you is very important. I hope this will help anyone facing this difficult situation make a good choice. 

Robert L. Abell
www.RobertAbellLaw.com