Colorado Law Blog

These tough economic times have resulted in countless foreclosures and evictions, but one this past weekend in Pontiac, Michigan posed some unusual problems for authorities responsible for emptying the premises – what to do with the bodies. The business was a funeral home, and among the items that had to be removed were five bodies and the cremated remains of 22 others.

Local officials at the Oakland County Medical Examiner's office worked with law enforcement, storing all of the bodies and cremated remains.

The funeral home, a family-run business which had been a staple in Pontiac's struggling south end for more than 30 years, was known for taking care of families, even when they could not pay for services. Many locals felt outrage and sympathy, each having some ties to the funeral home through services for friends or relatives. Even the sheriff assigned to monitor the crowd that gathered during the eviction acknowledged that his grandmother’s service had been held at the funeral home.

Property records show several thousand dollars in tax liens on the funeral home.

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The Food and Drug Administration has earned well-deserved criticism for negligent oversight of the safety of drugs on the U.S. market. Last week, the federal agency launched a new section of its website to try and remedy some of the lapse in information available to the public.

Information on drug safety has been consolidated on the FDA’s website at http://www.fda.gov/cder/drugSafety.htm. Consumers and health professionals can now find information about the FDA's drug safety efforts on the Web.

The webpage is designed to allow for drugs to be searched by name for the "latest safety information." Drugs that carry FDA safety alerts are highlighted.

Information on recent agency action regarding drug safety is also provided under public health advisories. Agency actions are listed by date. And extensive data and recommendations that appear on drug labels are also provided.

The site even allows for public reporting of an adverse reaction to a drug to the FDA under the Adverse Event Reporting System (AERS) link. The MedWatch section also provides recent drug safety notices from the MedWatch system.

As noted on the website, the FDA was required to create the new drug safety resource by the Food and Drug Administration Amendments Act of 2007.

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HealthGrades, a Colorado group which leads in the field of health-care quality measurement, has just published new rankings for hospitals across the country. Much like the rating of hotels, under the HealthGrades system, medical centers get one, three or five stars based on how many patients develop complications and die after receiving treatment.

Rankings are provided for a variety of procedures, including back and neck surgery, coronary bypass surgery, prostate surgery, angioplasty, and respiratory failure. One star indicates poor performance, three stars represent "as expected," and five stars go to the very best performers. The rankings are based on three years of data from Medicare and are adjusted to reflect the condition of the patient.

HealthGrade analyzed tens of millions of Medicare claims to develop the ratings.
The HealthGrade rankings by state and by condition are provided to the public on the firm’s website, www.healthgrades.com. Overall, HealthGrades says patients have a 70 percent lower chance of dying in a five-star hospital compared with a hospital with a one-star ranking.

For consumers, the data clearly demonstrates that real differences exist between different facilities – and a patient is benefited by researching the ranking of a facility before admission. If a procedure is recommended by a treating physician to occur at a facility with low rankings, at a minimum you should ask your doctor why that particular center was chosen.

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The National Highway Traffic Safety Administration (NHTSA) issued a new rule this past week known as the "designated seating position" rule. It revises the definition of "designated seating position" to determine the number of seat belts that are required in a particular vehicle, and it eliminates the exclusion of auxiliary seats from the definition so that all seating locations intended to be used while a vehicle is in motion would provide the appropriate levels of crash protection.

But once again the NHTSA has included a bar against state personal injury suits by inserting a pre-emption provision in a new rule governing seat belt safety, according to consumer and trial lawyer groups. The new rule also contains language that would specifically pre-empt state tort claims related to seat belt injuries.

Unlike previous use of pre-emption language, in this new rule the pre-emption language is both in the preamble and the body of the rule. When only present in the preamble, the pre-emption is considered only an advisory opinion, not a complete bar.

Joan Claybrook, president of Public Citizen, a consumer advocacy group, said the agency has issued safety standards with such pre-emption language 20 times in the past three years.

"The fear of lawsuits is one of the greatest incentives automakers have to build stronger and safer vehicles," she told Law.com. "For NHTSA to suggest that automakers should have blanket immunity from consumer liability lawsuits means that more defective vehicles will be manufactured, fewer will be recalled, the public will have less information about injury causation and more families will needlessly lose loved ones on our roads each day.

The NHTSA also recently notified Congress that it needs an additional two months to issue a final rule on roof crush safety, which has not been updated in 35 years. The process to issue that new rule was begun in 2005.

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A poor Colorado man is killed while purchasing firewood for his home, as the result of negligence on the part of business. The business is sued, and when preparing for trial the business asks the trial judge to allow the business to argue that even if it owes the widow for the loss of her husband’s income, the business should receive credit for taxes the poor guy would have had to pay had he lived.

Mrs. Hoyal’s husband died when a concrete wall fell on him while he was buying firewood from a local business, Pioneer Sand Co. In Hoyal’s wrongful death action against the business, Pioneer Sand sought to introduce evidence of the husband’s future income tax liability in determining the wife’s economic loss. The trial court granted Mrs. Hoyal’s motion in limine to exclude the evidence, and defendant filed an original proceeding to the state high court, disputing the ruling.

The Colorado Supreme Court agreed with the trial judge, noting that under the wrongful death act, Colo. Rev. Stat. §§ 13-21-201 to 204, surviving spouses are entitled to compensation for the loss of financial benefits they reasonably would have expected to receive had their spouses lived. Cases discussing the net pecuniary loss rule have applied several factors in determining the loss, including the deceased spouse’s life expectancy and willingness to assist the surving spouse. No Colorado cases include a consideration of future tax liability.

Noting that a majority of other jurisdictions generally do not allow taxation instructions to the jury, the court analyzed several reasons to exclude taxation discussions. First, tax issues are a matter between the taxpayer and the taxing authority and do not involve the defendant in a personal injury action. Further, an amount of future taxation is conjectural because tax rates change. Finally, determining future taxation is a complicated issue that would confuse juries and divert the focus of their fact-finding and decision-making responsibilities. Thus, the court held, evidence on future tax liability is inadmissible in a wrongful death action. The court remanded the case back to the trial court for trial.

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Over the past decade, the prepaid calling card business has exploded into a $4 billion industry that introduces new competition into the market for international phone calls and provided many immigrants the only means with which to connect with family and friends back home. The cards are everywhere - sold in gas stations, newsstands, convenience stores, bodegas and groceries across the country.

But consumer advocates and government officials warn that certain segments of the market are plagued by fraud and deceptive practices that give consumers fewer minutes than they pay for and tack on all sorts of hidden and unfair "junk fees." Some offer cards that simply do not work.

The problem cards may have connection fees on calls that don't go through because no one is home or the line is busy; post-call service fees and 99-cent hang-up fees on cards that are only worth a few dollars to start with; calling rates that go up when a card is used more than once; activation and weekly maintenance fees; and cards that bill customers in three- or four-minute increments even if they use just a few seconds of calling time.

These charges and fees often end up leaving buyers with far fewer minutes for calls than advertised. The Hispanic Institute, a nonprofit advocacy group, estimates that the average calling card delivers only 60% of the minutes promised — cheating consumers out of $1 million a day.

Government officials are beginning regulatory steps to protect consumers, forcing card providers to be more upfront about their card terms. But consumer advocates know that better disclosure alone is not enough to protect customers.

Victims include soldiers calling home from abroad and foreign students studying in the U.S. But experts agree that the people most vulnerable to these scams are the newest arrivals who speak little English and don't have the money or documentation to get a home phone line or cellphone — much less a computer — to communicate with relatives overseas. They are also the people who are least likely to seek redress if they are cheated.

One thing that particularly disturbs industry critics is that many prepaid calling card companies advertise in Spanish, but provide disclosures of card terms and conditions in English only — if at all.

The Federal Trade Commission and attorneys general in Florida, Texas and a handful of other states have cracked down on bad actors in the market, while state and federal lawmakers have begun to craft regulations to clean up the industry.

The Senate is considering a bill that would force prepaid calling card companies to clearly disclose the number of minutes that their cards provide as well as any fees and charges. The House passed similar legislation last month.

But while both measures are an important first step, Sally Greenberg, executive director of the National Consumers League, noted that neither prohibits most "unconscionable" industry practices.

Mirroring abuses in other markets, the prepaid calling card market has become fertile ground for abuse because there has been so little industry regulation — and so little enforcement of the rules that do exist.

Plus, scam artists face a low barrier to enter the market since calling card providers do not need to own their own telecommunications networks. Estimates indicate that it can cost as little as $20,000 to buy the long-distance minutes and back-end computer platform to get into the business. Some companies simply redistribute cards made by others.

No wonder HBO's Tony Soprano ran a calling card scam.

Now lawmakers are stepping in and not just at the federal level. Roughly a dozen states have passed laws tightening oversight for prepaid calling cards.

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A new government report indicates that over 90 percent of nursing homes were cited for violations of federal health and safety standards last year, and for-profit homes were far more likely to have problems than other types of nursing homes. And in 17 percent of nursing homes the deficiencies caused “actual harm or immediate jeopardy” to patients according to the Department of Health and Human Services report.

Problems included infected bedsores, medication mix-ups, poor nutrition, and abuse and neglect of patients. Government inspectors received 37,150 complaints about conditions in nursing homes last year, and they substantiated 39 percent of them, the report said. About one-fifth of the complaints verified by federal and state authorities involved the abuse or neglect of patients.

About two-thirds of nursing homes are owned by for-profit companies, while 27 percent are owned by nonprofit organizations and 6 percent by government entities such as the Department of Veterans Affairs, the report said.

The inspector general said 94 percent of for-profit nursing homes were cited for deficiencies last year, compared with 88 percent of nonprofit homes and 91 percent of government homes.

More than 1.5 million people live in the nation’s 15,000 nursing homes. The homes are typically inspected once a year and must meet federal standards as a condition of participating in Medicaid and Medicare, which cover more than two-thirds of their residents, at a cost of more than $75 billion a year. The government offers extensive information on nursing homes by geographic area at Nursing Home Compare.

Deficiency rates varied widely among states. The proportion of nursing homes cited for deficiencies ranged from 76 percent in Rhode Island to 100 percent in Alaska, Idaho, Wyoming and the District of Columbia. The average number of deficiencies also varied, from 2.5 deficiencies per nursing home in Rhode Island to 13.3 per home in Delaware.

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