The California Supreme Court dealt the injured a serious blow in August when it handed down Howell v. Hamilton Meats and Provisions, Inc.  It is certainly one of the most pro-insurance company cases ever. 

Gary Simms and I collaborated on a couple of articles explaining how Howell will change the legal landscape in the years to come.  Gary Simms brings a unique perspective to the discussion.  Not only did he argue the case before the Supreme Court, but he spent nine years of his career as a senior judicial attorney writing the Court’s opinions. 

Our latest article is Supreme Court Put Plaintiffs Through the Hamilton Meat Grinder.

Here are our views on some key issues.  See the article for how we get there:

Does Howell apply only when there is a contract between the plaintiff’s medical providers and her insurer?

A: It seems so but the court’s opinion is unclear.  Plaintiff has asked the court to clarify.

How does the defendant prove that there is a contract between the insurer and the provider?

A: Unclear but plaintiff should be able to argue that oral evidence doesn’t suffice.

Who has the burden of proving what was paid or owing and what is reasonable?

A: Plaintiff will bear the initial burden of submitting evidence of the amounts paid or owing.  Evidence of reasonable value will not be sufficient.

Are billed charges relevant to noneconomic damages?

A: Generally not.

Are billed charges relevant to future medical expenses?

A: Defendants will certainly argue that they are not.  But that argument will be difficult to carry.

Is evidence of the amount paid by the insurer admissible?

A: Yes.

How is the amount paid or owing to be determined?

A: Unclear.

Do HMO patients recover no medical expenses?

A: The opinion isn’t clear.

Do malpractice victims recover nothing?

A: The opinion isn’t clear.

Is evidence of medical insurance now admissible?

A: As a practical matter, yes.

Can Howell be dealt with by post-trial motion?

A: Unlikely that a defendant would so agree.


Howell v. Hamilton Meats & Provisions, Inc.

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Objectively measuring physical pain has been impossible. Doctors have relied on a patient’s self-report. And when asked to compensate accident victims for pain and suffering, so have juries.

But all that may soon change. Recently Stanford University researchers have used brain images and computer technology to assess pain.  In this study, a computer was “trained” to read brain images and assess pain levels. The researchers began by taking brain images of participants who were presented with painful and non-painful stimuli. The patterns of brain activity provided an objective physiologic assessment of whether someone is experiencing pain. The computer was 81% accurate at distinguishing painful v. non-painful stimuli.

Clinically, this tool will be most helpful to detect pain in infants, seniors with dementia, and sedated patients. But practically, it may lead to advances in pain management while establishing the credibility of victims who report they are living with ongoing pain.

Last Thursday, the California Supreme Court handed down its decision in Howell v. Hamilton Meats.  The ruling favors those who cause injury to others (such as people who get into accidents while texting) over their victims. The Court decided that it is those who cause injuries, and not their victims, who will benefit from the health insurance that the victim has paid for.

I attended the oral argument before the Supreme Court back in May.  I wrote about that here.  Today, Gary Simms, who argued the case for Rebecca HowGary Simms, Appellate Specialistell, provided me his perspective on the Court’s decision.  

Q: Were you surprised by the 6-to-1 decision against the plaintiff?

A: Unfortunately, I wasn’t surprised by the result. The Court is deeply conservative (six Republican appointees) and predictably anti-plaintiff in most personal-injury cases, so I knew from the outset of being retained for the Supreme Court briefing that I would face a very uphill battle. I was working at the margins; in other words; three justices would never vote for my position, and I knew it. I expected to get Justice Pro Tem Klein’s vote, though, and she very clearly signaled it at oral argument. I hoped to get three other votes, but I knew it would be difficult.

Q: Were you surprised by the new Chief Justice’s vote with the majority after she had taken the opposite view in her Court of Appeal opinion in King v. Willmett very shortly before she was appointed to the Supreme Court?

A: Yes, but after the oral argument, I sensed that she would flip-flop, so I was only mildly surprised. I can only speculate why she reversed her position. But I think the most likely reason was that she knew her vote would not change the outcome, so she chose to join the majority to make it unanimous. (Because Justice Klein was sitting pro tem by designation, her dissent does not matter in that regard; all the permanent Justices joined in the majority opinion.) This allowed the Chief Justice to establish herself as being a collegial and open minded consensus-builder. That’s a very important quality for a Chief Justice. And perhaps

Continue Reading Howell v. Hamilton Meats: Candid Interview With Appellate Attorney Gary Simms

When a wrongdoer causes injury, he must pay the victim’s hospital bills. If the victim happens to have insurance, the insurance company will often settle those bills before trial. Should the wrongdoer be required to pay the victim for the full amount of the hospital bills? Or only the amount the insurer paid to settle the bills? That was the issue argued today before the California Supreme Court, in Howell v. Hamilton Meats.

The question is a difficult one. Plaintiffs note that, under the collateral source rule, the one who caused the injury shouldn’t benefit simply because the person he injured maintains insurance. On the other hand, defendants argue that they shouldn’t have to pay for medical bills for which the victim was never on the hook. 

The Court’s decision is due in 90 days.

Here are some of the questions that the justices asked and the answers that the lawyers gave. (I’ve paraphrased liberally.)

To the Defense (Represented by Mr. Tyson and Mr. Olsen):

Q: Isn’t the part of the bill that a hospital writes-off for the insurer properly included as “damages” that that the injured party has suffered?

A: No, because the hospital agreed with the health care insurer to write off those amounts before the victim ever arrived at the hospital. Because the victim never incurred those amounts in the first place, they aren’t “damages.”

Q: Why should victims who have never paid premiums and who are thus uninsured be entitled to recover the full amount of their medical bills, while those who have shelled out for insurance for their whole lives recover less? It seems like we’d be treating the uninsured victim better than victims who are insured, no?  Isn’t that the reason for the collateral source rule, to make sure people aren’t penalized for having insurance?  

A:  Were the Court to limit recovery to the amount of the medical bills that were actually paid, it would not be penalizing people for having insurance. The person who has insurance never had to worry about paying his medical bills. That benefit is preserved. 

Q: Wouldn’t allowing the wrongdoer to get off paying less than the full amount of the bills when the victim has insurance be a windfall to the wrongdoer? Wouldn’t he be getting a benefit that the victim, not the wrongdoer, paid for?

A: There would be no windfall because the wrongdoer is in each case paying the actual amount for which the victim is responsible to pay. No more, no less.

To the plaintiff (Represented by Mr. Simms):

Q:  A plaintiff can recover only “damages suffered.” That means harm to plaintiff. If the plaintiff is not required to pay the full amount of the bills, because insurance negotiates them down, how can you say the plaintiff has suffered damages in the full amount of the bill?

A: The plaintiff signs a contract when he walks in the hospital to pay the full amount of the bills. The fact that his insurer later pays less than the full amount to settle the bills doesn’t mean the plaintiff never incurred them. 

Q: But if the plaintiff doesn’t actually come out of pocket to pay them, how is that damages under the Civil Code?

A: When an injured party files bankruptcy, he is no longer obligated to repay the bills, either. But we don’t let the wrongdoer off the hook in that case. Why should we here?

Q: Why should plaintiff be allowed to collect and keep the amount that the hospital has written off due to its agreement with the insurer? Isn’t that a windfall to the plaintiff?

A: There is no evidence in the record that the injured party will keep the amounts written off if that amount is awarded as damages. The insurer may still have a right of reimbursement and the health care provider may have a lien against the recovery.

 Update: Supreme Court Decides:Interview with Gary Simms

The wrinkle reducer, Botox is approved by the FDA for very narrow uses only. But Allergan, its manufacturer, has promoted it to doctors all over the country for other uses, including muscle spasms. A doctor’s use of a drug for a purpose not approved by the FDA is often referred to as an “off-label” use. When a doctor used Botox “off-label” to treat Virginian Douglas Ray for hand tremors, it quickly led to brain damage. According to his wife, he now requires round-the-clock care and speaks very few words.

Botox is a purified form of the poison botulinum and is given as an injection. The drug is approved to treat “muscle stiffness” in the fingers and arms, “upper limb” spasticity, and chronic migraine headaches. Botox can migrate outside the injected muscles and cause side effects including botulism and severe autoimmune reactions with resulting brain damage.

Ray claimed Allergan did not properly warn his doctor about the risks of using the drug. A jury agreed, ordering Allergan Inc. to pay to Ray $12 million in compensatory damages and $200 million in punitive damages. This award by the U.S. District Court jury in Richmond, Va., was the largest penalty ever in a Botox injury case.

Botox is Allergan’s top-selling drug, with $1.42 billion in sales last year, or 29 percent of the drug maker’s revenue, according to data collected by Bloomberg.

This is not the first time the Botox manufacturer has had to pay penalties. In September of 2010, the federal government ordered Allergan to pay $600 million to settle civil and criminal allegations against the drug manufacturer for illegally marketing Botox for other uses. Allergan has also been accused of paying kickbacks to doctors and enticing them with all expense paid weekends to learn about off-label usage. 

Is an accident victim entitled to be paid for lost earnings if, at the time of accident, she had no job? Yes, as long as the victim had the ability to earn when the accident happened, and the accident took that ability away. For example, the victim may have been a stay-at-home mom, but she also had a medical degree and worked as a doctor before motherhood. She had no immediate plans to return to work but she was keeping that option open. Until that dreadful day when she suffered a traumatic brain injury in a car accident. The accident closed that door forever. With the help of her attorney, she can seek compensation for the loss of the ability to return to her career and the income as a doctor.

It is up to the victim to prove that, though she wasn’t working before the accident, she nonetheless had the capacity to earn. She can prove that with her W-2’s, records from her last job, and/or the testimony of her previous employers or co-workers. What counts are the victim’s qualifications, including his:

  • Training
  • Education
  • Experience
  • Work History

The victim’s attorney may need to hire an expert to testify that, in light of the victim’s qualifications and experience, the victim could have worked before the accident, but that as a result of her injuries, now she cannot. If the evidence shows that the accident damaged (or destroyed entirely) the victim’s capacity to earn, then the victim is entitled to be compensated for what she could have earned but for her injuries.

Many of the San Bruno residents evacuated on September 9th may be categorized as “survivors,” having escaped the Glenview fire without being burned.  But even though they suffer no physical injuries, the gas explosion will leave dozens with emotional injuries that will persist for a long time to come.

Generally the law does not require a wrongdoer to compensate the victim for the emotional distress it has caused a victim unless it has also caused the victim to suffer some sort of physical injury.  And certainly PG&E will argue that the general rule should apply here — that unless a victim suffered physical injury, PG&E shouldn’t be required to compensate him for any emotional injury that it may have inflicted.

But in a special situation like this one, everyone who suffered serious emotional injuries should be entitled to compensation, regardless of whether they suffered any physical injuries.   That’s because PG&E knew that if its negligence led to a gas line explosion, people would fear for their lives and for those of their loved ones.   PG&E’s behavior was morally wrong and the laws are designed to hold wrongdoers accountable for all the harm they cause, even if that harm is "only" emotional distress.

Seeking compensation for emotional distress (or "post traumatic stress disorder") does not mean you are weak or can’t handle a stressful situation. Nor does it mean you are piling on or taking advantage of the system.   People who suffer from emotional distress suffer real losses.   Often because they can’t concentrate, they lose their jobs or do poorly in school.  Their family situations may deteriorate because they begin to snap at those they love.  They suffer from anxiety – feel constantly "on edge" — and that can lead to depression.  

Lawyers experienced in PG&E explosion cases can assist the San Bruno residents who are suffering emotionally from this haunting catastrophe.

Of course a wife is entitled to recover against the wrongdoer who caused the death of her loving husband. But what if the husband had long ago abandoned her? Without a loving relationship or continuous support, is the "forgotten widow" entitled to any compensation at all?

In most cases, yes, because the forgotten widow or abandoned wife who has lost her husband is viewed as having lost her husband’s financial support. Even if the husband had not been paying that support, the widow is entitled to compensation.

In the usual wrongful death case, an award for loss of support is based on the amount of support the widow proves her deceased husband would have provided to her in the future. But a California court has ruled that, in the case of the forgotten widow, that proof is not necessary.

The California court  in Powers v. Sutherland Auto Stage Co., considered a case where the deceased spouse had deserted his wife more than 13 years before his death. During that time, he had sent her only infrequent small checks, and for several years prior to the his death, the claimant wife had heard nothing from him and did not know his whereabouts. The spouse was entitled to no compensation for the loss of her husband’s "care comfort or society.’ But the court determined that the wife was entitled to be compensated for the loss of her legal right to support.

It made no difference that the wife had never attempted to enforce her rights. Her right to support was created by the marriage and would exist so long as the marriage itself existed. By causing the death of her husband, the wrongdoer deprived the forgotten widow of a right to which she was legally entitled.

Some accidents result in permanent injuries that will require ongoing care for the rest of the victim’s life.  The victim is entitled to be compensated for the cost of the future care now.  That’s because once the lawsuit is resolved, he cannot return to the wrongdoer and ask for additional compensation.  The cost of the victim’s future care is part of compensatory damages.

To prove what sum of money, paid today, will adequately cover the expenses the victim is likely to incur in the future, the victim’s attorney must enlist the help of several experts:

  1. The victim’s current doctor or other medical expert to testify about the victim’s injuries.  The doctor will testify about the victim’s current medical condition and the medical services he needs including therapy, equipment, transportation, and so on;
  2.  A doctor or nurse case manager specializing in physical rehabilitation medicine to review current medical records and interview the victim and current caregivers.  When this expert is done with her work, she will create a "life care plan" which will itemize the medical services that the victim will need for the duration of his life; and
  3. An economist to calculate the total costs of the future medical care set forth in the life care plan.  In determining the sum that needs to be paid to the victim today to ensure that his medical needs are met into the future, the economist will account for the inflation rate of medical goods and services, and reasonable rates of return on invested funds.

To properly gather the evidence and to work effectively with qualified experts, the victim’s attorneys must have a keen understanding of their client’s injuries.  Without that understanding, there can be no assurance that amounts awarded the victim for future care will be adequate.   

Scientists have found the stem cells that produce all the different cells of the skin. The discovery offers a promising development for wound repair or skin transplants.  Stem cells are original cells that have the potential to regenerate tissue over a lifetime. The skin has three different types of cells — hair follicles, inter follicular epidermis, and moisturizing sebaceous glands.

Scientists had previously thought that stem cells in each of these three skin populations were capable of producing only their own cell type. Scientists are already able to grow new skin in laboratories using a badly burned patient’s existing skin cells, but the new skin is often thin, brittle, dry and does not have hair — making it look unusual. The Science journal recently published a study by a team of Dutch and Swedish researchers who found in mice that the "mother" of all skin stem cells – the stem cells that produce all the different cells of the skin actually live in hair follicles. The advantage offered by the "mother" stem cell — Lrg6 — would be that skin can be grown from its original basis — allowing it to be "real new skin" with moisture from sebaceous glands and the ability to grow hair. Not just the superficial epidermis layer of skin.

One of the scientists, Hans Clevers, of the Royal Netherlands Academy of Arts and Sciences in Utrecht, told Reuters,

the promise is that these cells are probably going to be much better than anything we have had to date at making new skin.

It may take researchers 2 to 3 years to learn how to isolate the Lrg6 cells in human skin but the results should be far superior to current methods.

We anticipate that experts retained by defendants in burn cases will seek to use the new research to minimize the lasting nature of the injuries that the burn victim has suffered.