[Paleopsych] NYT: Bush's Next Target: Malpractice Lawyers
checker at panix.com
Fri Apr 15 13:59:26 UTC 2005
Business > Your Money > Bush's Next Target: Malpractice Lawyers
February 27, 2005
[It is the state government failure, specifically the failure of state
governments to reign in nation-wide lobbying of trial lawyers, that is
prompting this activity at the federal level. This is a structural defect
and not just some liberal arguing that the states have "failed" to deliver
what he, the liberal, personally prefers.]
By STEVE LOHR
TODD A. SMITH is one of the nation's leading medical malpractice
lawyers, renowned and feared in the courtroom, having extracted a
lengthy string of multimillion-dollar settlements and verdicts from
doctors, hospitals and insurers over the years. Though wealthy even by
the standards of his profession, Mr. Smith, 55, seems to have lost
none of the intensity and passion that fuel his 12- to 14-hour
workdays and make him a persuasive trial lawyer.
Seated in his law firm's conference room, with an Olympian view high
above Lake Michigan, Mr. Smith recited the details of his first
courtroom victory in the summer of 1977, when he was a $12,000-a-year
assistant public defender in the Cook County criminal courts. The
defendant, he recalled, was an American Indian who was accused of
armed robbery in a case that was based mainly on his race. The man was
identified as the robber, for example, in a lineup that included him
and a collection of off-duty, white police officers. "It was terribly
unfair," Mr. Smith said.
What drives Mr. Smith now, he says, is what drove him then: a desire
to seek justice for people who need it, whether criminal defendants
too poor to hire lawyers or victims of medical lapses whose lives have
been ruined and face huge bills for care. "You can make a significant
contribution to someone's life, someone who might be in desperate
straits," he explained. "That's as rewarding as it gets for me. It's
not really, or mostly, about money."
The Bush administration wants to make Mr. Smith's profession far less
financially rewarding. Medical malpractice lawyers are cast as the
marquee villains in the administration's war against what it regards
as a litigious culture run amok. If there were a face in the
bull's-eye in this political battle, it would be Mr. Smith's. He is
not only a big-name medical malpractice lawyer, but he is also serving
this year as the president of the Association of Trial Lawyers of
America, the principal advocacy and lobbying group for trial lawyers.
And within conservative circles and inside the White House, the term
"trial lawyer" is an epithet.
This month, the administration won the first round in its fight to
curb litigation, as Congress passed legislation to sharply restrict
class-action lawsuits against companies. Next up is medical
malpractice. In his re-election campaign, Mr. Bush repeatedly decried
"junk lawsuits" as the bane of the nation's doctors. The issue was
deftly framed, and the subtext was clear: greedy lawyers were
attacking the Marcus Welbys of America, good doctors doing their best.
In a speech last month in Illinois, Mr. Bush again called for strict
limits on medical malpractice suits, including "a hard cap of
$250,000" on what patients could recover for non-economic damages like
physical and emotional pain and suffering. Returning to his
election-year themes, Mr. Bush said doctors "should be focused on
fighting illnesses, not fighting lawsuits."
"We need to fix a broken medical liability system," he said, and he
called on Congress to act this year. This month, a medical litigation
overhaul bill, mirroring the administration's proposals, was
introduced in the Senate by two Republican senators, John Ensign of
Nevada and Judd Gregg of New Hampshire.
THE medical liability system, health care analysts agree, is deeply
flawed. But they also generally agree that the solution offered by the
administration and the Republican Congress - putting a ceiling on
damages - addresses only one aspect of the problem.
Medical liability policy, said Dr. William M. Sage, a physician and a
law professor at Columbia University, should seek three goals:
restraining overall costs, compensating the victims of medical
mistakes and providing incentives for doctors and hospitals to reduce
"There is a strong consensus among people who have really studied the
issue that caps on damages would tend to keep costs down and make
liability insurance more affordable for doctors," Dr. Sage said. "And
there is a universal consensus that caps would do absolutely nothing
to reduce medical errors or to compensate injured patients. If
anything, caps on damages would make those problems worse."
Medical malpractice laws vary state by state. But California offers a
glimpse of a future preferred by the administration and many
Republicans in Congress. In 1975, California passed the Medical Injury
Compensation Reform Act, which included a cap of $250,000 for damages
like pain and suffering in malpractice cases. It did not limit
economic damages for things like the cost of continuing care for a
person disabled or wages lost because of medical errors. The law also
curbed attorneys' fees on a sliding scale that prohibited them from
collecting more than 15 percent on award amounts over $600,000, with
higher percentages for the amounts below that sum. (In states without
limits on fees, contingency payments to malpractice lawyers are
typically about one-third of awards.)
Research varies on the likely impact of curbs on awards and fees, but
a RAND Corporation study last year concluded that the California law
had reduced the net recoveries for plaintiffs by 15 percent and had
cut attorneys' fees by far more, an estimated 60 percent. Defendant
liabilities, it calculated, were trimmed 30 percent because of the
California malpractice lawyers say the law also discourages them from
taking wrongful-death cases if the victims are children or retirees.
Those groups have no economic value by the cold logic of the courtroom
because they are not earning salaries, so the maximum award would be
$250,000. Complex cases, which often require many expert witnesses and
years of research, can cost that much to bring to trial.
Linda Fermoyle Rice, a medical malpractice lawyer in Woodland Hills,
Calif., said she recently told the family of a 14-year-old boy who
died unexpectedly in a hospital - apparently from medical negligence,
Ms. Rice said - that she could not afford to pursue the case. "The law
has made it impossible for many victims to get access to the court,"
Even plaintiffs who get to court often come away empty-handed.
Nationally, defendants prevail in nearly 80 percent of the medical
malpractice cases that go to trial. Many malpractice suits, legal
analysts say, are filed by personal-injury lawyers, accustomed to
handling simpler cases like those involving auto accidents, but not as
experienced in medical negligence work. In a 2002 survey by the trial
lawyers association, only 11 percent of its 60,000 members said
medical malpractice was their primary area of practice; 40 percent
replied that medical negligence cases were some part of their
Mr. Smith, a partner at Power, Rogers & Smith in Chicago, resides at
the top of the medical malpractice mountain. He does some aviation
litigation, but medical negligence claims account for 70 percent of
his cases; in the last 17 years, he has won more than $300 million in
verdicts and settlements for clients. Contingency fees collected by
his firm would typically be 20 percent of the total, a limit set by
Illinois state law on all awards over $1 million.
So how much does he earn? "Far less than you might expect," Mr. Smith
replied. His firm employs 11 lawyers - six working on medical
malpractice cases, the remainder focusing on other personal-injury
claims. It also employs four nurses as full-time researchers. Complex
cases can require reams of expert testimony, years of investigation
and hundreds of thousands of dollars to prepare. Medical malpractice
lawsuits are custom work, focusing on one victim at a time, as opposed
to large class actions against an entire industry, like the $246
billion tobacco settlement that trial lawyers helped 46 states win in
There are no hourly fees and no well-heeled corporate clients paying
for expenses. Trial lawyers are the venture capitalists of the legal
system, putting their money on the line and taking upfront risk. The
occasional big paydays cover the daily expenses.
For all the costs, there is still plenty left over for Mr. Smith. He
won't say precisely, but he concedes that his yearly income is
routinely in the high six figures, and seven figures in good years,
which appear to have been plentiful recently. That would put him on a
par with partners at leading corporate law firms.
At one time, corporate law would have seemed the natural choice for
Mr. Smith. In 1973, he was a freshly minted M.B.A. from Northwestern
University's graduate school of business, now called the Kellogg
School of Management, and most of his job offers were from banks in
the Chicago area. But he says he balked at what struck him as an
anonymous career within the crowded managerial ranks of a big bank. He
became intrigued by the law and enrolled at the Loyola University law
school; while there, he started working for the public defender's
In that office, Mr. Smith got his first taste of trial work, and he
vividly described the thrill of standing in the huge courtrooms of the
Cook County criminal court and the exhilaration of presenting cases.
"It was real life, and the outcome really mattered to people's lives,"
The most skilled trial lawyers, legal professionals agree, truly savor
the theater of the courtroom, the adrenaline rush of verbal combat,
the on-the-fly decisions made in cross-examination and the challenge
of winning over an audience. "In the end, it all depends on the
judgment of 12 people," Mr. Smith noted.
But medical malpractice work requires more than a deft touch in court.
According to colleagues and courtroom adversaries, Mr. Smith combines
a relentless work ethic - needed to absorb the arcane details of
medical science - and an underlying belief that his clients are
victims who have suffered grave injustices.
"The best plaintiffs lawyers in this field, like Todd Smith, almost
have a crusader mentality," said Brian C. Fetzer, a leading
malpractice defense lawyer in Chicago, who has represented physicians,
hospitals and insurers in cases against Mr. Smith for more than 20
years. "They are true believers."
Joseph W. Balesteri, a lawyer who joined Power, Rogers & Smith in
2000, after five years working the defense side of medical negligence
cases, said of his colleague: "Todd gets into the medicine. He wears
his emotions on his sleeve, and listening to him you really see that
he believes what he says. It's a credibility that is felt by the
Mr. Smith says his success rate is higher than 80 percent - including
jury verdicts and settlements - far higher than the national average
for medical malpractice plaintiffs' lawyers. Being picky in his
selection of cases helps explain the high winning percentage. He says
he decides to take fewer than 3 in 100 cases that are brought to his
firm. "We say to people right off that a bad outcome does not mean you
have a medical negligence case," he said.
The plaintiffs' lawyer must argue that a doctor or hospital failed to
meet the profession's acknowledged standard of care for a certain
operation, test or treatment, and, more important, must be able to
Cases worth pursuing, Mr. Smith said, are typically ones in which the
victim has suffered a major injury that results in continuing pain,
suffering and disability. Brain damage, loss of a limb and facial
disfigurement, he noted, are good candidates.
AT his firm, potential cases go through rigorous screening that can
take months and cost costs tens of thousands of dollars. The victim's
medical records are collected after receiving the authorization of the
patient or family. Those records are reviewed, and one of the firm's
nurse-researchers assesses the care that the patient received.
Next, the case is sent to a consulting specialist - often more than
one. If the case still seems promising, the accumulated information is
sent to a physician who determines whether the care was negligent
enough to write a certificate of merit, required in Illinois and some
other states, to be presented to the court.
"In his speeches, Bush makes it sound as if every lawsuit that is
brought is junk or frivolous," Mr. Smith said. "But we do everything
we can to weed out cases that are without merit. We have to. Our own
money is at risk."
The work, time, risk and potential rewards in complex malpractice
suits are illustrated by a $20 million settlement Mr. Smith won last
June. The origins of the case go back to 1997, when Huong Nguyen, then
a 19-year-old sophomore at the University of Illinois at Chicago, was
experiencing shortness of breath doing ordinary things like climbing
stairs. She was diagnosed as having a faulty mitral valve, a pair of
triangular flaps that regulate blood flow between two of the heart's
chambers. The valve had to be repaired or replaced.
The surgery lasted more than eight hours, though the procedure usually
takes about half that long, Mr. Smith said. The next morning, Ms.
Nguyen could squeeze her right hand, but she was otherwise paralyzed
and could not speak. She had suffered severe brain damage.
A lawyer referred the family to Mr. Smith, who began investigating.
After an initial screening by Mr. Smith's firm, the family filed suit
against the surgeon, Dr. Bradley S. Allen. Over the next several
years, in preparation for trial, the law firm spent $375,000, much of
it for the work of specialists like a cardiothoracic surgeon,
neurologists, economists and a forensic videographer.
Mr. Smith contended that Dr. Allen did not properly remove air from
the patient's heart during the procedure and that the resulting air
embolus caused brain damage. Dr. Allen's lawyer, Kevin T. Martin, said
Ms. Nguyen's resulting disability was a risk in this kind of surgery
and "very unfortunate, but not a medical error."
The surgery had been videotaped, but when a court ordered Dr. Allen to
produce the tape, there was a lengthy gap that included brief segments
of television commercials. Had the case gone to trial, Mr. Smith would
have contended that the defendant tampered with evidence, an assertion
denied by Mr. Martin, who said the gap in the tape had resulted from a
Ms. Nguyen is unable to move her arms or legs and cannot sit up or
speak on her own. She communicates by tapping her right forefinger on
a special keyboard. She suffers from depression and seizures but is
cognitively intact. "She is totally aware of her desperate straits,"
Mr. Smith said. "This is as bad as it gets and she knows it."
Mr. Smith's economists estimated that lifetime care for her would cost
up to $20 million. The settlement talks, Mr. Smith said, began a few
months before the trial was scheduled to start, with the defense
offers starting at $5 million and the Nguyen family deciding to settle
at $20 million. "It was entirely the family's decision," Mr. Smith
said. "I think we could have gotten more in trial."
Indeed, the risk for the defense, legal analysts say, is that the pain
and suffering damages in such a heart-wrenching case, handled by a
skillful medical malpractice lawyer like Mr. Smith, could lift the
total award far higher. "There wouldn't have been a dry eye in the
house" if Ms. Nguyen's case went to trial, said Mr. Martin, the
surgeon's lawyer, who estimated that a jury award could have gone up
to $100 million.
In settlements, defendants make no admission of guilt and typically
try to add confidentiality agreements to the deal. Mr. Smith's firm,
as a matter of policy, does not sign such agreements.
In big malpractice cases, the administration's proposed cap of
$250,000 for pain and suffering would change the terms of trade in
settlement talks. In the case of Ms. Nguyen, for example, there were
sizable economic costs - for the care of the disabled patient - though
the defense would surely have argued that they were less than $20
million. But it is the prospect of unknown, and potentially
astronomic, damages in a trial that can give plaintiffs a powerful
hand in settlement negotiations.
To Mr. Smith, the administration's battle against medical malpractice
lawyers is simple to explain. "It's about politics and money; it's not
really about health care," he said. "If you want to address the
medical malpractice crisis in this country, do something about the
medical errors. That's the real problem."
THE quality of medicine across the country is uneven, analysts agree,
and that represents a huge problem. Medical errors are estimated to be
responsible for 45,000 to 98,000 deaths a year - more than those
caused by breast cancer, AIDS or motor vehicle accidents, according to
the Institute of Medicine of the National Academy of Sciences.
So Mr. Smith has a point. But improving the quality of health care
raises a separate set of complex issues about incentives for
improvement, investment in information technology and changes in the
culture of medicine.
Pointing the finger elsewhere will not get Mr. Smith and his fellow
lawyers off the political hook. There have been calls to overhaul
medical malpractice before. But this time the White House, doctors,
insurers and other business interests, who see curbs on malpractice
suits as one step in reducing their health costs, are pushing hard
The champions of tort reform are spending heavily. Last year, the
Institute for Legal Reform, an affiliate of the Chamber of Commerce,
and the American Medical Association, the physicians' advocacy group,
spent a total of $33.8 million on lobbying, according to
PoliticalMoneyLine, which tracks federal lobbying. The trial lawyers'
association spent $2.9 million on federal lobbying, PoliticalMoneyLine
"We're outgunned financially, and we're being targeted because we have
supported candidates who support Americans' rights to access to a jury
trial," Mr. Smith said.
He has done his part. In the 2003-2004 campaign cycle, he contributed
just under $100,000, nearly all of it to Democrats and Democratic
political action committees, according to the Center for Responsive
Politics, a nonpartisan group.
Yet even if the Bush administration prevails and malpractice awards
are curbed, the impact on Mr. Smith will probably be limited. It may
crimp his style but not change his game. "There will always be plenty
of work for people like him, the best litigators on the plaintiffs
side," said Dr. Sage, the Columbia law school professor.
More information about the paleopsych