Torts-R-Us

Torts-R-Us

Torts-R-Us

A summary of what's in the major U.S. newspapers.
Oct. 8 1999 8:35 AM

Torts-R-Us

Torts dominate the news, with major liability decisions about health insurance, pharmaceuticals, and the manufacture of guns covering the front pages. Everyone leads with the House's dramatic, bipartisan passage of a "patients' rights" bill, which would give the consumer a broad right to sue his HMO for lack of coverage or substandard coverage. (This story gets three columns in both Timeses and four in the Washington Post.) The New York Times and USA Today front one of the nation's largest product-liability settlements: American Home Products has agreed to pay an inflation-adjusted $3.75 billion dollars (over 16 years) to thousands of consumers of fen-phen, the miracle weight-loss drug banned for damaging heart valves. (This story is reefered by the Los Angeles Times and runs atop the Wall Street Journal's "Business and Finance" box.) USAT and the LAT front a state judge's dismissal of Cincinnati's lawsuit against gun manufacturers--one of 29 similar suits by cities against the firearms industry. The judge said the attempt to regulate guns through tort law represented an "improper attempt to have this court substitute its judgment for that of the legislature."

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The "patients' rights" bill passed 275-151 (with 68 Republican defections) in one of the rare House votes where the outcome was not known in advance. It dealt a major blow to the House leadership, which had lobbied for a narrower right-to-sue bill, defeated earlier in the day. The NYT quotes 44-year House veteran and co-sponsor John Dingell, D-Mich., calling the bill "as fine a piece of work as I've ever seen in Congress." The legislation was supported by the labor and consumer lobbies as well as the American Medical Association, and fought by insurance and business groups, who argued it would enrich trial lawyers and cause employers to drop medical benefits for workers. It now goes to a conference committee, where it must be reconciled with a Senate version that does not include expansive right-to-sue provisions. Final passage is also threatened by a rider that gives tax-breaks for certain health expenditures--which many Democrats, including President Clinton, say help only the rich.

The $3.75 billion fen-phen settlement includes $2.55 billion for users who have developed heart-valve problems and $1.2 billion to monitor the healthy and issue refunds. Benefits are not limited to those who sued: Any one of the six million Americans who took the drug can submit claims, and there is no statute of limitations. AHP will refund prescription fees for anyone who took the drug; payments for those with heart problems range from $6,000 to $1.4 million. The settlement does not cover 100 outstanding lawsuits, which could cost another $1 billion to settle. Oddly, the LAT puts the nominal, rather than the inflation-adjusted, payout in both its headline and its lede. The LAT is confusing money with wealth; it should do as the Post does, and not mention the nominal figure at all. All the papers report that AHP will take a $3.29 billion after-tax charge against third-quarter earnings to pay for the entire settlement. Only the Journal explains why this amount is sufficient: Insurance pays the rest. Although this charge works out to $2.51 per share, AHP's stock price rose 7.8% yesterday. (Investors, apparently, prefer certain losses to the uncertainty of outstanding claims.)

The NYT and Post front the overwhelming victory of India's Hindu-nationalist Bharatiya Janata Party. The party formed a centrist coalition government which is expected to be the most stable Indian government in years. Prime Minister Atal Bihari Vajpayee pledged to devote himself to economic reform and steer away from the anti-Muslim policies that have sometimes characterized his party. Sonia Gandhi's Congress Party was dealt the worst defeat in its history.

A NYT investigation of Colin Powell's charity, America's Promise, alleges that it has undefined goals, does not meet its own deadlines, takes credit for corporate contributions and community projects with which it is only peripherally involved, and does not reveal how or how much it pays its top officers, as charities traditionally do. The Times notes that a columnist in the current Chronicle of Philanthropy argues that Powell should disband the organization.

The NYT reefers Donald Trump's formation of an exploratory committee for a presidential campaign. "Unless I thought I could win the whole thing, I would have no interest," he tells the Times, which notes that The Donald has name recognition and an estimated worth of $1.5 billion. (To learn more about exploratory committees, click here.)

On the NYT op-ed page, British Prime Minister Tony Blair, French President Jacques Chirac, and German Chancellor Gerhard Schroeder implore the U.S. Senate to ratify the Comprehensive [Nuclear] Test Ban Treaty, which the GOP has been threatening to put off until next year. "We will not be relying on the good will of a rogue state to allow inspectors onto its territory," the three leaders write. "Under the treaty, a global network of [verification] stations is being set up. ... Rejection would give great encouragement to proliferators. Rejection would also expose a fundamental divergence within NATO."

USAT highlights another boon of the Internet: cheap caskets. "When all is said and done, a casket is just a box with a door on it," says a former truck-parts manufacturer who now sells caskets. Buying caskets on the Web--at sites like directcasket.com, casketgallery.com, and downtoearthcoffin.com--creates "emotional detachment" about the purchase, says USAT, which helps grieving relatives avoid the exorbitant casket fees of funeral homes. "You don't feel that pressure to be done with it and be out of there," says one happy customer. "It's more like buying a suit."