The medical profession has taken to calling them “never errors,” a label for errors–like surgery on the wrong leg or administering the wrong dose of medicine–that never should happen.  Unfortunately, these “never errors” are not new. Worse, they sometimes occur in clusters, like this one involving the family of actor Randy Quaid.  The good news is that more states are putting guidelines in place to discourage billing for “never errors.” (Sorry, I can’t lose the quotes…it’s just ludicrous that you label something that happens as “never.” But I digress.)

While the media trumpets the story as more states stopping the billing, it’s a bit of a misnomer to say that states prohibit such hospital billings. Instead, 23 states discourage it hospitals from billing for “never errors.” I suppose it’s progress, and maybe the medical profession is getting the message.

David Sugerman

Sounds like it’s a long opinion–93(!) pages–but it looks like the Bush administration suffered a serious smack down in federal district court. Here’s the media report on the court’s ruling that President Bush’s aids must in fact honor Congressional subpoenas and appear and testify in response.

The district court’s ruling by Judge John Bates is a major blow to the Bush administration’s unprecedented claims of executive power. According to the MSNBC report, Judge Bates found that the assertion of immunity was entirely unsupported by existing law.  I have not yet read the opinion, so I can’t confirm the accuracy.

Side note and a bit of a digression: President Bush appointed Judge Bates.  This is of no import to most of us who work in the justice system. My experience is that most judges–especially those on the federal bench–highly value judicial independence.  It’s a core value of great importance, as we want judges to decide hard questions without political calculations.  While I frequently disagree with how a judge decides a particular case or issue, the value of judicial independence remains important. Nice to know that Judge Bates is not reluctant to find against the man who appointed him. To me, that’s the essence of judicial integrity and independence.

Bad week for the Bush administration. We got a re-run of the hack job done by Monica Goodling earlier this week. And now this slap down.

David Sugerman

Two stories in today’s news provide court-side glimpses of two forms of market abuse that led us skipping down the garden path to the cratered economy. In this one from the Oregonian you can learn all about the alleged scams by various Oregon flimflam men who saw that the trough was unguarded. They apparently goosed up the value of properties, got inflated appraisals, and borrowed way out of proportion to the collateral, pocketing the overage.

They could act with impunity because the banks were turning their paper to Wall Street and didn’t have any reason to scrutinize loan applications.

And of course the liar loans promoted by banks were being bought by Bear Stearns. Here’s an update on criminal proceedings against former Bear Stearns managers facing indictments. Apparently, they knew that the loans they were buying were bunk.  Going to be fun to hear them explain why they kept hyping their hedge funds while secretly selling their own shares before it all crashed down.

All of this highlights the dark underbelly of deregulation.  Want a chuckle? Remember the movie, Wall Street? “Greed is good,” we were told by pop culture, by politicians and by professors.

So this is what they meant by “Good.”

David Sugerman

ps to regular readers-I’m out of here for a couple of weeks for vacation. While David Paul may pick up the slack, the blog may well go dark while I’m away. I’ll be back to it after the 4th of July weekend.

Here’s a half-decent summary of how mandatory arbitration clauses strip away patients and families’ ability to hold bad nursing homes accountable for abusive care. It’s only half right, though, as the writer misses the most significant problem with mandatory arbitration clauses.

Too often, they come with rules that make pursuit of any claim impossible. As well, they often play into a rigged system by forcing arbitration with an organization that is notorious for finding against consumers.

When our parents and grandparents are subjected to abusive care in a nursing home, there needs to be a fair and open system that allows the family to hold the bad nursing home accountable. But when a mandatory arbitration clause prohibits going to court, when it bars claims under laws that provide for damages and attorney fees, and when it requires secrecy, families lose.

It’s even worse in the nursing home context because too often the family member who is placed in the care facility didn’t even have the ability to make an informed choice. What’s more, the family is often presented a thick stack of forms to sign that are take-it-or-leave-it deals. In other words, it’s a farce to say that grandpa chose arbitration.

Congress is starting to look at this. Let’s hope they take real action.

David Sugerman

Kudos to MSNBC’s Red Tape Chronicles for reporting again on a quiet but important consumer issue.  As the good people at Public Justice explain, the U.S. Court of Appeals reversed a federal court’s dismissal of a claim brought against a who’s who of credit card companies, claiming that they colluded to require subscribers to take to arbitration any dispute with each company. (Public Justice posted a copy of the case, Ross v. B of A in pdf; you’ll find it in the linked post.)

As I’ve noted before, the problem with arbitration clauses isn’t arbitration, as much as the limitations on claims and rights that consumers face in that forum. In credit card cases, for example, a common feature of the arbitration clause is that it prohibits class actions.  When a class action ban is enforced in a credit card case, it gives free license to banks to rip off small amounts from millions of consumers. When a credit card company dings you five dollars illegally, you simply can’t afford to do anything about it by yourself. And if you’re one of five million card holders, congratulations, the bank pulled in $25 million illegally and did so simply by making it impossible for consumers to enforce their rights.

So this case–which is in the early stages–may lead to a re-balancing. After all, if the banks got together to collude in a way that prevented consumers from opting out of arbitration clauses, they should be held to answer.

David Sugerman