Tylenol can cause liver failure! It accounts for 40% of liver failure hospitalizations, Recommendations for FDA Interventions to Decrease the Occurrence of Acetaminophen Hepatotoxicitymore, more than “100,000 calls to Poison Control Centers, 56,000 emergency room visits, 2,600 hospitalizations and nearly 500 deaths” in this country annually. William M. Lee, Acetaminophen Toxicity: Changing Perceptions on a Social/Medical Issue, 46(4) Hepatology 966, 966 (2007).

While the brand name Tylenol has been used in the United States since 1955, id., it was not until the late 1990s that independent research established the link between acetaminophen, the active ingredient in Tylenol, and acute liver failure.
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scales.jpgFor-profit insurance companies enjoy privileges in Florida not afforded individuals and other commercial activities. It is little wonder they profit so handsomely. In turn, their wealth allows them to exercise ever greater control over politicians, the courts, and the psyche of the people. It’s an ugly picture.

Negligence
In the context of liability claims, an insurance company’s primary responsibility is to protect its insured from an excess judgment. An excess judgment is a judgment entered by the court in an amount greater than the insured’s policy coverage limits. The carrier can achieve this outcome in most cases simply by being conscientious and reasonable. Falling below this standard is generally considered negligence.

As a lawyer, I can be held accountable for negligence causing harm to a client. The same holds true for doctors, bankers, manufacturers, drivers and every other entity … except for insurance companies.

In DeLaune v. Liberty Mutual Ins. Co., 314 So.2d 601 (Fla. 4th DCA 1975), Liberty failed to settle a car crash claim for its insured’s policy limit of $10,000. A verdict was rendered against the insured for $360,000. The court disallowed the Plaintiff’s attempt to recover the difference in a separate lawsuit based on allegations of harm resulting from negligence. The court said that an insurance company cannot, unlike every other entity in Florida, be held liable for harming an insured based solely on negligence. (The insured assigned the Plaintiff his right to sue Liberty in exchange for the Plaintiff agreeing not to enforce the judgment against him. This is standard operating procedure in situations where insurance carriers expose their insureds to excess judgments.) See also Thomas v. Lumbermens Mutual, 424 So. 2d 36, 38 (Fla. 3rd DCA 1982).

Not good.

Silent (Dominant) Partner
When its insured is sued, the insurance company calls the shots on every aspect of defending the case. The carrier chooses the lawyers, hires the experts (or not), requires the insured’s cooperation, and decides on settlement (or not). Florida juries are not allowed to know any of this. See Sec. 627.4136, Fla. Stat.; Beta Eta House Corp. v. Gregory, 237 So. 2d 163, 165 (Fla. 1970) (The Florida Supreme Court said this information is not relevant to issues of fault and damages.)

Not good.
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scales of justice.jpgAs I have blogged here before, beginning with the election in 1998 of Jeb Bush as the governor of Florida, state Republicans have been on a mission to limit and eliminate workers’ rights. An area of particular focus has been the workers’ compensation system — Chapter 440 of the Florida Statutes.

Some previous blogs:

Florida’s workers’ compensation system provides two different categories of lost wages benefits. See Florida Statute 440.15. The line of demarcation is maximum medical improvement (MMI), see 440.02(10). Before reaching MMI, an injured worker is eligible to receive temporary disability benefits, either temporary partial (TPD), see 440.15(4), or temporary total (TTD), see 440.15(2). Once an injured worker has reached MMI, the only available indemnity benefit is permanent total disability (PTD) .

The qualifying legal standard for PTD has changed many times since the adoption, in 1935, of a workers’ compensation system in Florida. It is not the purpose of this blog to track all of the changes. For a thorough discussion of the subject, go to: Permanent Total Disability in Florida Before and After the 1993 Reforms. Of importance to this blog is that, in 2002, the Florida Legislature enacted the toughest PTD qualifying standard ever. In the absence of one of the catastrophic injuries listed in 440.15(1), the employee was required to establish that he or she is not able to engage in at least sedentary part-time employment, within a 50-mile radius of the employee’s residence, due to his or her physical limitation. Surprisingly, the “part-time” provision was eliminated in 2010, softening the standard somewhat. The current version of 440.15 reads as follows:

In all other cases [i.e., the injury is not one of the listed injuries], in order to obtain permanent total disability benefits, the employee must establish that he or she is not able to engage in at least sedentary employment, within a 50-mile radius of the employee’s residence, due to his or her physical limitation.

On its face, the difficulty with this standard is that few injuries prevent an employee from performing at least sedentary work, defined in §404.1567(a) of the Code of Federal Regulations as “lifting no more than 10 pounds at a time and occasionally lifting or carrying articles like docket files, ledgers, and small tools. Although a sedentary job is defined as one which involves sitting, a certain amount of walking and standing is often necessary in carrying out job duties. Jobs are sedentary if walking and standing are required occasionally and other sedentary criteria are met.”
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greed.jpgFor those around the country who don’t know, Florida has just lost it’s 3rd or 4th commissioner of education in less than 3 years under Governor Rick Scott. The latest to resign held the same position in Indiana and was recruited by Scott for his right-wing bona fides, in particular, believing in the notion that taxpayer dollars should be paid to private entrepreneurs to build and run Charter Schools. Not surprisingly, the guru of the concept is none other than Jeb Bush. To the Jeb Bushes of the world, conservatism is just another word for funneling taxpayer money to private individuals. Florida now has private prisons. It’s a huge industry … but it needs bodies to make money. Not only will these folks be resisting efforts to decriminalize marijuana, they’ll be pushing for stiffer prison sentences for other offenses. Bodies = $$$$$$.

Read the article reproduced below, written by Fred Grimm, South Florida’s top watchdog reporter, to get a flavor for the scam.

Fred Grimm: Tony and Tina Bennett’s school for conflicts

By Fred Grimm
fgrimm@MiamiHerald.com

Tony Bennett slunk away from his job as Florida commissioner of education, leaving us with an ever-deepening distrust of a school-reform movement dominated by for-profit education conglomerates and big-money political donors.

He left after just seven months on the job, muttering that he had been undone by “malicious and unfounded” news stories coming out of Indiana.

He wasn’t. He was undone by a grade-fixing scandal of his own making back when he was Indiana superintendent of education (until unhappy voters tossed him out of office in November). He lost his job in Florida because, in his previous incarnation, he manipulated the statewide grading formula to fabricate an A rating for a K-10 charter school in which two-thirds of the high school classes flunked algebra, while 30 percent failed English.

“It is absurd that anyone would believe that I would change the grade of a school based on a political donor or based on trying to hide a school from accountability,” Bennett told reporters. But Bennett and his staffers left an email record last September indicating he did just that.

The education chief hanged himself with his own words and those of his staffers, who spent nine frantic days finagling the state grading formula, searching for a fix for that unacceptable C scored by Christel House Academy. Looking, as one of his staffers put it so succinctly, for that magic “loophole.” For obvious reasons. The charter school was the namesake of founder Christel DeHaan, who also happened to have donated $2.8 million to the Indiana Republican Party and, more importantly, $130,000 to the superintendent’s own political campaigns.

Bennett, an apostle of Jeb Bush’s corporate-financed school reform movement and rigid common-core testing standards, had gone around the state citing Christel House as an example of the superiority of charter schools over funky, conventional public schools. Unhappily, as Bennett’s chief accountability officer (something of a misnomer) noted, Christel’s 10th-graders had registered “terrible” scores on their statewide algebra test. Only 33 percent passed. He reacted like a high school football coach whose star player had flunked math. Something had to be done.

Ultimately, Bennett and his staffers simply erased the lowly ninth- and 10th-grade results altogether and reconfigured the results for Christel DeHaan’s school using only elementary and middle school scores. It worked swimmingly — until last week, when The Associated Press unearthed those self-incriminating emails. (Nor did it help that the Indianapolis Star reported that in 2011 the superintendent of Indianapolis’ public schools had begged Bennett to grant a similar waiver for a couple of inner-city public schools. No dice. Bennett had ignored the super’s pleas and dished out failing grades to the two no-account schools.)

By Thursday, Bennett was gone. Ousted in Florida because of his shenanigans in Indiana. The grade-fixing scandal had stripped him of the moral clout necessary to force yet another high-stakes testing regime onto Florida public schools and to peddle the notion that charter schools are the big fix for Florida’s education woes.

But Florida citizens had another reason to doubt Bennett’s objectivity when it comes to charter schools. The Indianapolis Star reported last week that his wife, Tina Bennett, was hired in June by Fort Lauderdale-based Charter Schools USA. It was another of those sweet, moneyed coincidences in Bennett public service. In 2011, he had awarded this very same company nice fat contracts to take over two failing high schools and a middle school in Indianapolis. (One of those schools, T.C. Howe High School, happened to be one of those two schools that had requested but were refused the same kind of waiver granted Christel House last September. Such a small world.) And Charter Schools USA has become one of the big players in the Florida rush to charters.
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dollars.jpgFew personal injury lawyers have degrees in tax law or accounting. While having advanced knowledge of tax law is not a requisite to the proper handling of a personal injury case, having a basic understanding of potential tax consequences is. To perform up to par, the personal injury lawyer must know which elements of a settlement may be taxable and address the issues accordingly. Anything less falls below the professional standard of care and may have serious negative consequences.

CAVEAT: We do not give tax advice to our clients and we are not giving it in this blog. The information contained in this blog should be used for guideline purposes only rather than as definitive tax advice. For definitive advice on these issues, consult a tax lawyer or accountant.

There are numerous areas in personal injury settlements with potential income tax consequences: 1) punitive damages; 2) damages for emotional distress; 3) the consideration paid for a confidentiality agreement; (4) money paid to compensate for lost income; and (5) money paid to compensate for medical expenses.

A starting point for the legal authority on this topic is Section 104 of the Internal Revenue Code, which reads as follows:

§ 104. Compensation for injuries or sickness.

(a) In general. Except in the case of amounts attributable to (and not in excess of) deductions allowed under section 213 [IRC Sec. 213] (relating to medical, etc., expenses) for any prior taxable year, gross income does not include–

(1) amounts received under workmen’s compensation acts as compensation for personal injuries or sickness;

(2) the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal physical injuries or physical sickness;

(3) amounts received through accident or health insurance (or through an arrangement having the effect of accident or health insurance) for personal injuries or sickness (other than amounts received by an employee, to the extent such amounts (A) are attributable to contributions by the employer which were not includible in the gross income of the employee, or (B) are paid by the employer);

(4) amounts received as a pension, annuity, or similar allowance for personal injuries or sickness resulting from active service in the armed forces of any country or in the Coast and Geodetic Survey or the Public Health Service, or as a disability annuity payable under the provisions of section 808 of the Foreign Service Act of 1980 [22 USCS § 4048]; and
(5) amounts received by an individual as disability income attributable to injuries incurred as a direct result of a terroristic or military action (as defined in section 692(c)(2) [IRC Sec. 692(c)(2)]).

If the IRS decides to scrutinize a settlement for tax consequences, the taxpayer bears the burden of proving what aspects of a personal injury settlement are non-taxable. See Internal Revenue v. Schleier, 515 U.S. 323 (1995). Relevant evidence may include the pleadings, discovery in the case, and the settlement agreement. While it may be good practice for the Plaintiff to have an allocated agreement, meaning one in which the settlement proceeds are broken into component parts for the various damage elements (e.g., personal injuries; economic losses (wages and medical), punitive damages), the exercise is not dispositive of the issue. See Bagley v. Commissioner of Internal Revenue, 121 F.3d 393 (8th Cir. 1997) (The court held: “when assessing the tax implications of a settlement agreement, courts should neither engage in speculation nor blind themselves to a settlement’s realities”) and Delaney v. Commissioner, 99 F.3d 20, 23-24 (1st Cir. 1996) (court must look beyond language of settlement to determine ‘in lieu of what’ for damages paid”).
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worker2.jpgPre-Jeb Bush, Florida construction subcontractors were held liable in tort for damages caused by their negligence when the party harmed was an employee of a subcontractor with whom legal vertical privity was not shared. This powerful threat caused subcontractors to pay heightened attention to workplace safety. When subcontractors fell short of being reasonably safe and the result was bodily injury, they paid the cost.

This did not sit well with Governor Bush and his Republican cohorts who controlled Florida’s legislature. Profits were at stake. Action was taken to eliminate this bothersome “loophole.” Legislation was passed granting “horizontal immunity” to construction subcontractors without any contractual or other legal connection to employees of other companies. See Florida Statute § 440.10(1)(e)(2). See also § 440.11(1)(b)(2).

Thankfully, the immunity is not absolute. § 440.10(1)(e)(2) provides that gross negligence is excepted from the workers’ compensation exclusivity provision. To establish gross negligence, a Plaintiff must show (1) a composite of circumstances which, together, constitute a clear and present danger; (2) an awareness of such danger by the subcontractor; and (3) a conscious voluntary act or omission by the subcontractor that is likely to result in injury. See Pyjek v. Valleycrest Landscape Development, Inc., So.3d , 38 FLW D1064 (Fla. 2nd DCA 5-15-2013); and Villalta v. Cornn Int’l, Inc., 109 So. 3d 305 (Fla. 1st DCA 2013) (citing Glaab v. Caudill, 236 So. 2d 180, 185 (Fla. 2d DCA 1970)); cf. Merryman v. Mattheus, 529 So. 2d 727, 729 (Fla. 2d DCA 1988) (explaining that mere knowledge of vulnerability of employee to the possibility of injury is insufficient to amount to gross negligence; there must be a likelihood of injury from employee’s vulnerability greater than mere danger, rising to a “clear and present danger”).
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worker3.jpgMost Florida employees injured at work will be limited to receiving compensation through the state’s workers’ compensation system as laid out in Chapter 440 of the Florida Statutes. The main reason for this limitation is that employers and fellow-employees are immune from being sued for simple negligence. See F.S. 440.11.

‘”[S]imple negligence is that course of conduct which a reasonable and prudent man would know might possibly result in injury to persons . . ..”‘ Carraway v. Revell, 116 So. 2d 16, 22 (Fla. 1959) (quoting Bridges v. Speer, 79 So. 2d 679, 682 (Fla. 1955)).

Negligence cases and workers’ compensation cases are different creatures subject to their own set of laws with regard to compensation for injuries. One of the main differences is that the workers’ compensation system does not authorize compensation for pain and suffering. (No Compensation for Pain & Suffering Under Florida’s Workers’ Compensation System.)

Chapter 440 is a no fault system for the provision of benefits. In theory, at least, the worker’s compensation statutes provide a system of compensation for injured workers in which the worker receives the guarantee of rapid compensation for work related injuries. Reality is often a different story. Even when the system works as designed, its shortcomings are many. Read these blogs:

In some instances, injured workers would be more fairly compensated through the civil justice system (negligence) than through the workers’ compensation system. Unfortunately, due to a number of factors, including employer and fellow-employee immunity (see above), and a lack of fault (i.e., all but the injured worker are blameless for the accident), injured workers infrequently have the option of seeking a civil rather than a workers’ compensation remedy.
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worker.jpgIndependent Contractors are not protected by the overtime wages provisions of the Fair Labor Standards Act (FLSA). However, disputes arise frequently over whether an individual is an independent contractor or an employee entitled to overtime pay.

There is no simple measurement for making the determination. The United States Department of Labor has published an advisory listing pertinent indicia. Florida’s workers’ compensation statute 440.02(15)(d) contains a more thorough list. (Since the employee vs. independent contractor dispute also arises in the workers’ compensation forum, this is an excellent statute to reference. Except for independent contractors working or performing services in the construction industry — see 440.02(15)(c)3 — independent contractors in Florida are not entitled to workers’ compensation benefits.) Case law should also be considered.
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ATV1.jpgFlorida’s dangerous instrumentality doctrine “imposes strict vicarious liability upon the owner of a motor vehicle who voluntarily entrusts that motor vehicle to an individual whose negligent operation causes damage to another.” Aurbach v. Gallina, 753 So. 2d 60, 62 (Fla. 2000). “Operation of a vehicle falls within the strict liability doctrine because a vehicle is dangerous to others when used for its ‘designed purpose.'” Harding v. Allen-Laux, Inc., 559 So. 2d 107, 108 (Fla. 2d DCA 1990) (quoting Southern Cotton Oil Co. v. Anderson, 80 Fla. 441, 86 So. 629, 638 (Fla. 1920)).

In Salsbury v. Kapka, 41 So. 3d 1103 (Fla. 4th DCA 2010), the issue presented on appeal was “whether an all-terrain vehicle (“ATV”) is a ‘”dangerous instrumentality”‘ under Florida’s tort law.

Due to a lack of evidence, the appellate court (4th DCA) withheld judgment on the issue. Instead, it

us supreme court.jpgThe FLSA, codified at 29 U.S.C. §201 et seq., was enacted in 1938 in order to help the “lowest paid … of the nation’s working population” to secure a livable wage. Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707 n. 18 (1945). Current FLSA law allows an employee to maintain an action against the employer “in behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. §216(b).

The purpose of the provision authorizing an employee to sue in behalf of “other employees similarly situated,” which has come to be known as the “Collective Action Provision,” is to minimize litigation by allowing numerous claims to be brought against the same employer in one lawsuit. This benefits both sides. It benefits employees by making it easier for them to hire lawyers to handle their claims. In most FLSA claims, the amount in dispute is relatively small. Collective Action cases raise the stakes, making FLSA cases more enticing to lawyers. This is a practical reality, one that courts recognize as legitimate. CA cases benefit employers by allowing numerous claims to be resolved in one action instead of in individual lawsuits.

A recent U.S. Supreme Court decision appears to put Collective Action claims at risk.

In Genesis Healthcare Corporation v. Symczyk, 133 S. Ct. 1523 (2013), Symczyk sued under the FLSA for herself and other co-workers. The District Court for the Eastern District of Pennsylvania dismissed Symczyk’s complaint for lack of subject matter jurisdiction after defendants Genesis Healthcare Corporation and Elder Care Resources Corporation extended an offer of judgment under Fed.R.Civ.P. 68 in full satisfaction of her alleged damages, fees, and costs. The trial court decision was appealed. The United States Court of Appeals, Third Circuit, framed the issue as follows: “At issue in this case is whether a collective action brought under § 216(b) of the FLSA becomes moot when, prior to moving for ‘”conditional certification”‘ and prior to any other plaintiff opting in to the suit, the putative representative receives a Rule 68 offer.” The court answered No, reversing the trial court’s ruling. Symczyk v. Genesis HealthCare Corp., 656 F. 3d 189 (3rd Cir. 2011).
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