Catching up–because we are way behind–here’s the first of two overdue document updates. This link appellants-reply-brief-and-reply-excerpt-of-recort pulls up a copy of the patients’ reply brief in the Oregon Court of Appeals in the proposed class action against Providence for loss of medical records.

Here’s a link to the entry that will pull up the patients’ opening brief, as well.

David Sugerman

New topic today, as President Obama took office yesterday. He quickly got down to business, ordering a freeze and review of all of the Bush administration’s pending midnight regulations.

In one sense, this isn’t new or radical, as it’s been done by every incoming president since President Reagan. But it’s particularly good news for consumers because the Bush midnight regulations were something of a last chance all-you-can-eat ticket to the trough.

My guess is that a number of these last-gasp gifts to the greedy won’t stand.  At a minimum, it’s re-assuring to know that they’ll be reviewed before implementation.

David Sugerman

George Orwell would have marvelled at the name, “The Center for Consumer Freedom.” Is that a great name or what? So why are they opposed to food labeling requirements? Why do they claim that the obesity epidemic is a contrivance? And why do they counsel consumers to get written waivers from guests before serving unlabeled Thanksgiving dinners that might have lots of calories and fats?

The “Center for Consumer Freedom” is a front for food processors, manufacturers, and fast food restaurant chains. It was started with seed money from tobacco giant Philip Morris.  According to the Center, it’s the evil trial lawyers that you need to fear at the Thanksgiving table. Full disclosure: While I don’t think of myself as evil, I am, in fact, a trial lawyer.

So here’s a question for the Orwellian people at Center for Consumer Freedom: What are you afraid of? What do you and your funders fear? Is it that informed consumers might make choices that hurt sales and profits? Is it that the calorie dense corn syrup-fueled commodities might lose their sweet and profitable allure once consumers have the ability to make choices? One of the things lost on the deregulation crowd (say, “oink!” all) is that disclosure rules provide the best form of regulation. When consumers have information, they can choose with knowledge. Isn’t that preferable to rules that prohibit things?

At bottom, the food industry makes choices in what it puts in its products. If you want to blame us for “being fat” then surely you can’t oppose giving us the information that allows us to make smart choices. Or can you?

In the end, it’s easy to demonize the trial lawyers. But we didn’t start spiking processed foods with high-fructose corn syrup. But even worse, the disclosure rules opposed by the “Center for Consumer Freedom” would lessen lawsuits.  If consumers know what they’re getting, they have literally no cause to complain. So–to quote one of their fund sources from an old campaign–Where’s the beef?

David Sugerman

The rush to the bottom isn’t quite over yet, as the Bush administration seems intent on passing last minute regulations to harm consumers and help big business. The range is breathtaking. It includes loosening worker safety rules, clean water standards and–here’s today’s dose of irony–easing regulations on securities.

Before the financial crash and deepening recession, it would have been easy to write this off as misguided zealots pushing through the final touches on the deregulation agenda. But after the collapse it’s just plain greed, jet-fueled by a dangerous mix of urgency and stupidity.

David Sugerman

Back on the kleptocracy, and it looks like the Chamber of Commerce is working to keep its position at the trough by threatening to go to war with the incoming Obama administration. It seems that the Chamber is concerned about how new or revised regulations that reverse the Bush-era’s kleptocracy may affect the Chamber. The Chamber, of course, opposes the rules, claiming that they will benefit plaintiffs’ trial lawyers.

Classic diversion tactic, as the Chamber fails to take responsibility for its role in the financial meltdown. In fact, the Chamber got paid handsomely to lobby against regulation.  In their rush to demonize trial lawyers, the Chamber always forgets to mention its role in lobbying for failed insurance giant, AIG. I’m going to guess that when and if the real story of the U.S. Chamber of Commerce gets told, trial lawyers will be the least of their concerns.

Meanwhile, let’s be clear about a few things. Americans of all backgrounds, ages, races, and political persuasions voted for change. The kleptocracy is over. No more feeding at the trough. It’s time to put regulations in place because taxpayers–and our children–are going to pay for your greed and the lack of oversight that got us here. It’s time that corporations paid their fair share of taxes. It’s time to make sure that juries decide product safety issues. It’s time for equal pay for the same work, regardless of race or gender. In short, the Chamber of Commerce’s time at the trough is over.

David Sugerman

The State of Oregon Department of Consumer and Business Services reportedly fined Bankers Life and Casualty Co. $150,000 over its sale of unsuitable annuities to seniors. Bankers’ Life reportedly refunded premiums to approximately 20 Oregon seniors who were paying so much on annuity contracts that they could not afford to cover living expenses.

Interesting legal question as to whether Bankers’ Life sharp practices qualify as elder financial abuse under ORS 124.110. That statute is designed to protect seniors from financial abuse. It’s a powerful law that provides a means of checking physical or financial abuse of Oregon seniors.

I don’t have any knowledge of the State’s actions, other than the media reports. It’s good that the State took action. My hope is that the affected seniors got fairly compensated for all of their harms and losses. I have to wonder whether there are other victims out there, as it’s hard to imagine that Bankers’ Life only sold 20 of these types of policies to vulnerable Oregon seniors.

David Sugerman

I would be remiss if I didn’t note this New York Times report on prison sentences for former insiders at Milberg Weiss for their roles in the former high-flying class action law firm’s kickback scheme. Interestingly, both former partners, Steven Schulman and David Bershad, reportedly cooperated with federal investigators to provide critical detail on the law firm’s misconduct.

There’s a certain level of sad irony in this. I won’t defend Milberg Weiss. They did wrong, and the take down is the right result. But the sad thing is that their securities work was one of the few thin forms of protection when Wall Street engaged in misconduct.  So I’m hoping that these take downs are just a prelude for the next round. Because I have to imagine that there are some people at AIG, at Bear Stearns, at some of the investment firms and credit rating agencies who did similar or worse.

David Sugerman

At first glance, this prediction bodes well for consumers. As reported here in the Seattle Post-Intelligencer, Congress will move to add Wall Street financiers to the list of those who will be held accountable for funding predatory mortgages.

The technical term is assignee liability. It’s important to understand the underlying concept because it plays a big part of what’s gotten us to the present crisis.  Banks were writing ridiculous and nasty mortgages and lending money to borrowers who had no business taking on mortgage commitments.

The banks and lenders would then group and package the bad loans into large pools, and through a series of sales and transactions, parts of these large groups of stinking bad loans wound up being traded like baseball cards on Wall Street. Actually, that’s a little unfair because for reasons beyond my comprehension, baseball trading cards actually have “value.” But I digress.

For years, the Bush Administration and the Free Marketeers (AKA “The Smartest People in the Room”) opposed rules that would allow asignee liability. To their way of thinking, buyers of the stinking bad loans should never, never, never have to answer to the borrower who may have been duped or otherwise wronged by the predatory loans.

The new rules would allow the borrower to chase the assignee, the Wall Street purchaser of the stinking horrible loans. It makes sense for a number of reasons, not the least of which is that our Wall Street purchasers are the recipients of socialist handouts.  Yes, Senator McCain and Senator Martinez, I used that very word to describe the Wall Street bailout…if you want to accuse your rivals of importing socialism into American life, you best go back and explain that whole bailout thing. Ugh, better have more coffee–or less–as I’m digressing again.

But here’s the real disappointment of the Seattle PI report. This is all about the future and prevention. Not a bad thing to be sure, but it’s a deafening silence about THIS round of problems. The Bush Administration declared class warfare on the middle class when they tried to limit the bailout to Wall Street and banking failures. Consumers were left in the drink without a boat, without a paddle, and without a life jacket.  So you’re talking about assignee liability in the future.  And in the meantime, consumers are supposed to ???

David Sugerman

So I was never a huge Who fan, but they had a way of crafting a phrase or a riff that invariably resonated far beyond the tune. The rauccous revolutionary anthem ends the refrain with this staunch declaration, “We don’t get fooled again!” That line sprang to mind as I learned more about the proposed Bush administration bailout of Wall Street.

It’s a short proposal. Text is here, courtesy of the New York Times.  Buried in the middle is this short ditty in Section 8: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

Seems to me that the very same Secretary who steered the boat into the current ice berg is a poor choice for being the guy who makes “non-reviewable” decisions.  The current administration says we’re in a crisis, but doesn’t want to provide relief to mortgage holders. They claim that immediate and bold action is necessary, but they aren’t willing to consider limits on CEO compensation. And they want no one to question their decisions?

This is the same administration that got us into this mess. It’s the same administration that sent us off to an ill-considered war based on juiced up intelligence. It’s the same one that has presided over the destruction of the Bill of Rights.  The one that corrupted the Department of Justice. They have demonstrated time and again contempt for the rule of law. No wonder they propose no review by Congress or the courts.

With a track record like that, they want no oversight as they spend $700 billion of our money?

The Who had it right. No way.

David Sugerman

Justice Rehnquist–not one of my favorites of the Supremes–once observed in an important U.S. Supreme Court opinion that you, “have to take the bitter with the sweet.” I’m reminded of those words as we’re treated to the sight of former free-marketeers engineering profoundly expensive bailouts.  We’re told that taxpayers have to foot the bill to bailout Wall Street to the tune of hundreds of–pinky to the side of the mouth a la Dr. Evil here–billions of dollars.

We “have to” because we can’t afford to let Wall Street fail. That’s the official story.

Okay gang, here’s the deal. Let us be clear that if you’re using our hundreds of billions to bail out the greedy who were gorging at the trough, they’re going to have to take some serious bitterness with their sweets.

Let’s start with regulation. First, let’s resolve from this day forward that every twit who holds forth about the problems caused by regulation, the beauty of the free market, and the need for less regulation gets this loud retort: “Oink!”

“Oink!” As in, the pigs have been feeding at the trough for years and all we got was this hundreds of billions in payments to bail them out.

Second, any bailout sure as heck better give us the profits when the recipients get back to profitability. Because you better take some serious bitter with the sweet that you’re taking from our pockets. And there is nothing so bitter to you as sharing your profits. Put another way, if we’re going to have corporate socialism when you fail, we’re going to have it when you succeed. You’re paying us back.

And finally, let’s be repaying some of those big hordes of cash that led to happy landings for executives who were piloting these ventures. That golden parachute and fat, fat compensation at Bear Stearns, at Lehman, and at all those sinking ships to come contributed to this mess. If we’re bailing you out, it’s time to cough it up. Give us back our money.

David Sugerman