[Paleopsych] NYT: Bush's Next Target: Malpractice Lawyers

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Business > Your Money > Bush's Next Target: Malpractice Lawyers
http://www.nytimes.com/2005/02/27/business/yourmoney/27mal.html
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 [1]STEVE LOHR

     CHICAGO

     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
     medical errors.

     "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
     law.

     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,"
     she said.

     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
     practice.

     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
     1998.

     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
     office.

     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,"
     he said.

     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
     jury."

     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
     prove it.

     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
     mechanical malfunction.

     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
     together.

     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
     reported.

     "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.

References

     1. http://query.nytimes.com/search/query?ppds=bylL&v1=STEVE%20LOHR&fdq=19960101&td=sysdate&sort=newest&ac=STEVE%20LOHR&inline=nyt-per