Friday, October 28, 2005

Humeston Vioxx Trial #2: Handicapping the Verdict

Closing arguments are going on now in case number two involving a man who had suffered a Heart Attack. The trial is only the 2nd to date.

What may be the result? Given that the man took it for less than three months, is back to work, and is from many accounts in good shape from a physical appearance - that coupled with the juror makeup for this case -

I think a verdict in excess of $200,000 is a decent win. Of course it cost more than that to get this case ready, but that is a win. A verdict from $400K to $600K would mean bad news for Merck in more ways than one. Valuing for business purposes this case - short ingestion period, MI with claimant back to work - in that range will make others with similar cases comfortable with the value of a claim of an injured client.

Best case: Zero verdict obviously for Merck. If the verdict is less than $100K that may or may not help. It would need to be less than $50,000 in order for Merck to claim a win in a verdict against it.

Best case, Plaintiff: If the verdict is in excess of $1M, watch out.

My guesstimate: 20% chance it's a defense verdict. If it's a Plaintiff's verdict, it will be between $250,000 and $600,000.

Can any trial attorney say that this is not the most worrisome part of the trial? When a juror is making the real closing argument?

Vioxx MDL Update 10/27/05

In October's conference, Judge Fallon said that said that the thousands of state trials to be pursued by the "Supergroup" of 10 Attorneys in the news recently would counteract the MDL's goal of reaching a global settlement of all Vioxx cases.

Judge FAllon has voiced a clear desire that state cases are to be brought into the same arena that holds the consolidated federal cases under his Court, so that he can preside over trials and work towarda a proper resolution to all the litigation.

"Hopefully, these cases can be resolved short of trying every case. That's my hope," Fallon said.

My comment: He seems to be setting up a grid system based on his comments, which is to be expected.

Muraglitazar: News for Type II Diabetes

Bristol-Myers Squibb Statement On Muraglitazar, An Investigational Oral Treatment For Type 2 Diabetes:

PRINCETON, NEW JERSEY (October 27, 2005) -- As previously disclosed, on October 18, 2005, the U.S. Food and Drug Administration (FDA) issued an approvable letter for muraglitazar, Bristol-Myers Squibb Company's (NYSE: BMY) investigational oral medicine for the treatment of type 2 diabetes. The FDA requested additional information from ongoing clinical trials to more fully address the cardiovascular safety profile of muraglitazar. We and our partner, Merck & Co., Inc., (Merck) have determined that to receive regulatory approval and to achieve commercial success, additional studies may be required because the ongoing trials were not designed to answer questions raised by the FDA. The additional studies could take approximately five years to complete.

In addition, Bristol-Myers Squibb has agreed to begin discussions with Merck to terminate the collaborative agreement.

Bristol-Myers Squibb will continue discussions with the FDA and will consider a range of options including conducting additional studies or terminating further development of muraglitazar.

Go here for more information.

Wednesday, October 26, 2005

Humeston Case: Defense rests

The defense rested in the 2nd Vioxx product liability trial after defendant Merck & Co. presented a cardiology expert as its final witness.

The last witness was Dr. John Michael Gaziano, a Harvard Medical School professor. Surprise surprise, he testified that he believes there is no link between Vioxx and heart attacks - even with long-term use.

Instructions Thursday.

Tuesday, October 25, 2005

Vioxx Split among attorneys

Mark Wahlstrom put this perfectly:

This has been building behind the scenes, as articles starting leaking out in the business and legal press about how the plaintiff steering committee works on MDL and Mass Tort litigation, but a major rupture in the united front by the trial lawyers was announced in the WSJ.

Attorneys have acted to create a supergroup - sort of like a legal version of former supergroup "Asia" apart from the group handling the federal multi district litigation in New Orleans, LA.

Attorney Mark Lanier - who hammerered Vioxx - and who had expressed some displeasure earlier this month in having to pay fee's and funds to the steering committee for work that he essentially felt was totally a result of his own firm's efforts.

Mark said: "What makes this split so profound is that now Merck is going to have an extraordinarily difficult time getting a "global settlement" of the Vioxx case, as the stated goal of the new group is to drive up values, max out individual cases, and for lack of a better analogy, turn this into more of an asbestos type litigation as opposed to a phen-fen global settlement. The former a long term, case to case, individual firm process, and the latter a comprehensive global settlement negotiated by committee."

RSI study out

Early nerve damage caused by repetitive motion on the job can cause "sick worker" syndrome, a fatigue or depression that can be mistaken for poor work performance, according to a study published in this month's Journal of Neuroimmunology.

For more information, go here.

Ipod Nano litigaiton

I bought one. I just want one that works.
To find out more, click here.

The class action follows a from iPod Nano users who reported cracked and scratched screens.

If I get mine replaced, I'm fine. I love it and my iPod Shuffle.

Monday, October 24, 2005

Lawyers, Witness Bicker @ Vioxx Trial #2

This past Friday Dr. Barry Gertz was on the stand again at the Humeston trial. Plaintiff's counsel showed jurors many e-mails and Merck internal papers.

One note was in the good doctor's handwriting. The note was from an October 2000 meeting between Merck and consultants. The note had on it a mention that a Merck employee should "reduce the emphasis on MI."

Friday, October 21, 2005

Diabetes drug unsafe? (Pargluva)

A new diabetes pill headed for approval has been linked to deaths, heart attacks and strokes, a medical journal reported this week. (JAMA)

The study found two times as as many deaths and heart problems in adults with Diabetes taking Pargluva than those on placebos. The drug treats Type 2 diabetes.
The drug had been ok'd by the FDA in September.

JAMA pushed it online because of concerns over its safety. T

One website noted the drug could have meant a "public health catastrophe" given that 18 million Americans have diabetes.

Thursday, October 20, 2005

Vioxx Trial #3 Postponed

From CNN, Reuters, Yahoo, and those litigating the cases:

The next Vioxx trial has been continued October 24, 2005 until as no earlier than April of 2006.

The Anna Guerra case would be trial #3. Mark Lanier representing the Estate of Ms. Guerra in Edinburgh, Texas. She died in 2001 of a pulmonary embolism after taking Vioxx for more than sixty days.

The first federal trial before Judge Fallon is set to begin in Houston, TX on Nov. 28.

Wednesday, October 19, 2005

A bit more tech: A new search site

Somehow this site made it's way to my email in box, and it may be worth a look:

It's According to the site:

"Your searchroll is a collection of the sites you trust and find useful. It's a personal search engine you create to provide relevant results from a hand selected list of reliable sites. You can make as many searchrolls as you want. Just enter the sites you want to search and you'll be off and rolling ."

It may be a time waster, or it may be a useful tool. You decide.

More bad news for Zyprexa, Risperdal & Seroquel

From various sources including Reuters and

Drugs treat elderly patients with dementia-related symptoms may raise their risk of death.

Researchers reviewed the results of multiple studies on drugs known as atypical anti-psychotics and sold under the brand names Zyprexa, Risperdal, Seroquel and Abilify.

Of the 5,000+ elderly dementia patients each faced a 54 percent increased risk of death within 12 weeks of taking the drugs. A total of 118 deaths in the group of 3,353 drug users, versus 40 in the 1,757-patient placebo group, or 3.5 percent compared with 2.3 percent. The risks were similar for each of the drugs.

What is notable is that each drug was approved for treating schizophrenia and bipolar disease - not elderly dementia. "Off-label" uses are common and often legal.

The FDA warned in early 2005 that the drugs had been linked to deaths from heart failure and pneumonia. The labels were only recently changed.

You can also go to JAMA to check out the abstract article on this subject. Go here for more information.

Monday, October 17, 2005

Sportslaw: Coach Mike Price settles with S.I.

From my good friend Mark Wahlstrom's blog, found here:

"In a case closely watched here on The Settlement Channel football coach Mike Price today announced the settlement of his defamation case against Time, Inc, and it's Sports Illustrated magazine. A summary of the case is available here at, which outlines some of the facts of the case.

Our particular interest was in the ruling back in August of this year that Sports Illustrated was going to have to divulge their "confidential source" so that Coach Price's attorney would have the ability to depose her, as that confidential information was at the heart of the allegations of Price's impropriety at a topless club, which eventually led to his dismissal by the University of Alabama.

Price has contended all along that while he did drink to excess that day, and he would certainly like to have that day to do over, that the Sports illustrated article was rushed to publication, facts were omitted, false items inserted as fact, and all of it done under the cloak of anonymity of the source of the allegations. As many know Coach Price eventually landed a job at University of Texas at El Paso, or UTEP, and is now coaching there, albeit at a much lower salary then what he stood to earn at Alabama.

While it would have been intriguing to see how the first amendment issue was going to turn out, and if Sports Illustrated would be forced to divulge their source, Coach Price declared himself as "very happy" with the amount of the settlement. Obviously, Time, Inc. took stock of their position legally on this, realized they might have to admit the "source" was fictional, or at least not what they alleged, and that the potential of a massive verdict was likely."

Good work Mark!

I'll be on Civil Action Radio next month at the MTMP conference in Vegas.

Blog Pollution

I'm sure you have run across this. I am in the process of trying to find an attorney in Michigan to assist on a matter. I think to myself: "Self, why not check to see if an attorney in that state has a blog?"

I type in that, and get a blog loaded with ads and links. No news, mind you, just a trash site. You can find it here.

I see this more and more each day when I'm online. It will get much much worse before it gets better. While attorneys at navel gazing blogs want to codify blog rules, in my opinion all would be better served by working on a way to end the net of blogs like the one I found.

Years of Vioxx Litigation?

An interesting read from

The writer for newsday reports that if Merck loses the second trial, characterized as a "relatively weak case" one lawyer who saw the first trial in Texas said the company "should" talk settlement.

"David Berg, who practices both in Houston and New York, pointed to the swift recovery of Halliburton's stock price after the company announced it was putting aside $5 billion to settle hundreds of thousands of asbestos lawsuits. By doing the same, Merck could refocus Wall Street's attention on its other strong drug offerings _ including a new vaccine against the virus responsible for causing cervical cancer."

The article then quoted others as saying it's too early for that.

There is too much variety - in how much Vioxx plaintiffs or their loved ones have taken, and the harm they said it caused - to have be answered by just the first two verdicts, according to one professor who was quoted.

My comment: If this is a loss, there will not be a change in any short term strategy. What I see as perhaps defining where the Vioxx litigation goes is the decision by the MDL Judge (Fallon) to try four distinct injury cases - one after another - in his courtroom beginning late this year and going through the next. With verdicts for the injured parties in any or all of those you could see the initial formation of a mass settlement grid.

Friday, October 14, 2005

October Tech/This and that

Thanks to those who take the time to read this blog, it appears I've somehow passed 10,000 impressions a week.

For this month's this 'n that, not tech, but a blog: Wild Snow's blog. You can find it here. Not law related, but it's Friday and you can see at least one thing I enjoy that is not law related: outdoors, particularly backcountry skiing.

Lots of tech goodies to the sport including transponders and more.

FDA Update on Guidant

You can find it here.

According to the site:

"Guidant has informed [the FDA] that six (6) additional clinical occurrences (of which FDA has 4 confirmed reports) exhibiting this failure mode worldwide have been reported for the Contak Renewal® and Renewal® 2 devices since our July 14, 2005 PPHN, for a total of 21 clinical failures, including 3 patient deaths, worldwide as of October 7, 2005. You should take these failures into account as you continue to follow the patients who retain either device."

Podcast worth checking out: NPR's comment on FDA problems

From the NPR site, and it's worth a listen

"The sudden resignation of Food and Drug Administration Commissioner Lester Crawford in September again highlights problems at the agency. The FDA regulates products that account for one of every four dollars spent in the United States. But some say recent missteps could be costing FDA the credibility it needs to assure the safety of all Americans."

Find it here.

Vioxx Suits: By the numbers

More than 1,000 new Vioxx cases have been filed in New Jersey alone since mid-August as well as nearly 800 in September of 2005.

The new total includes 3,481 cases filed and docketed as of late this week in New Jersey. There are another 2,200 USDCT cases filed. More than 410 have been transferred to federal court for the Eastern District of Louisiana before Judge Fallon.

Wednesday, October 12, 2005

Merck Defense: Experts says Vioxx is "safe"

Yesterday a Merck witness testified at the Humeston trial that it was "completely outrageous" to claim that the company put profits ahead of safety.

As most following the Vioxx cases will know, a Merck study (VIGOR) compared Vioxx with other painkillers as to stomach bleeding. The witness said she assumed that Vioxx had no effect on heart attacks and strokes.

She actually testified that Merck "thought, based on the totality of the data, that naproxen had a cardioprotective effect."

My comment:
Merck defense seems to be: Vioxx safe. Client sick.

Monday, October 10, 2005

Vioxx Trial #2: Was the Court "misled" by Merck counsel?

Friday during the Humeston Vioxx trial, Judge Higbee addressed the day prior's testimony. Higbee said she felt misled and sickened after rereading a part of the transcript of a Merck researcher who said studies in the late 1990s showed the pain reliever would not cause heart damage. The comments were made outside the presence of the jury. The Judge then struck the testimony Dr. Morrison from the record because she said he was not an expert on the studies he had told the jury about.

Defense counsel then engaged in a heated discussion with the Judge. Judge Higbee said "I felt sick last night" about the testimony. Higbee also said she was was "misled repeatedly" with this testimony.

Morrison trial testimony was vastly different from what he had said in deposition about internal studies to determine whether Vioxx posed heart risks. Also, Morrison testified that Merck had conducted studies on dogs, rabbits and elderly people - and that these studies indicated that Vioxx did not trigger heart problems. Morrison failed to mention those studies in the deposition.

Things went downhill from there. The Judge allegedly admonished defense counsel. Some described what went on as a "shouting match." Another expressly heard the Court tell defense counsel to be quiet or risk being taken from the courtroom by the bailiff.

Judge Higbee refused to declare a mistrial, despite defense counsel seeking one.

My comment: In my humble opinion, is this anything new? Allegations that Merck misled the FDA, misled doctors, misled consumers, now misled a Court? Are we seeing a pattern here allegedly?

Wednesday, October 05, 2005

Significant ERISA case in GA: Summerlin

Summerlin v. Georgia-Pacific Corp. Life, Health and Acc. Plan

Ray Summerlin was a covered person in the Georgia-Pacific Corporation Life, Health and Accident Plan ("the Plan"). His dependent spouse, Janet, was also covered by the Plan. The Plan was self-funded, and governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA).

In 1999, Mrs. Summerlin incurred medical expenses which were paid by the Plan for $80,597.04.

Mrs. Summerlin filed a malpractice suit against her treatment providers, and the suit was settled for $115,000. In February 2003, after attorney's fees and costs were deducted, Mr. and Mrs. Summerlin received a check for $52,217.23. As you may imagine, the recovery did not fully compensate wife or husband for her injuries, including medical expenses, lost wages, and pain and suffering.

The Plan contends that because it paid benefits of $80,597.04 for expenses arising from the Summerlins' medical malpractice claim and because the Summerlins recovered from a third party on that claim, the Plan should be reimbursed the benefits paid relating to the medical malpractice claim.

The Plan relies upon the following subrogation and reimbursement provisions in the Plan contract: " If you receive any payment (whether or not characterized as reimbursement for a medical expense) as a judgment, settlement or otherwise from any person or entity (including and without limitation to the third party's or your own insurance company) with respect to the sickness, injury or other condition which gives rise to expenses which the Plan pays, including any such payment made as a result of the requirements under a "no-fault" motor vehicle insurance statute or other similar legislation, or under the personal injury projection provision in an automobile insurance policy, you shall reimburse the Plan from such payments to the extent of the expenses paid under the Plan regardless whether the judgment, settlement or other payments allocates any specified amount to reimbursement for medical expenses and regardless whether such expenses are paid prior to or after the date of such judgment, settlement or otherwise. The Plan Administrator has the discretion (but is not required) to estimate the future amount of such expenses in lieu of requiring you to reimburse the Plan as such expenses are incurred."

After being paid funds pursuant to the settlement agreement the Summerlins did not reimburse the Plan for the claims it paid on Mrs. Summerlin's behalf. Based on the reimbursement and offset provisions, the Plan's third-party administrator, Wausau Benefits, notified Plaintiff of its intent to offset future claims for Plaintiff and his dependents until the Plan is reimbursed the $80,597.04 it paid on behalf of Mrs. Summerlin.

Plaintiff has incurred, and continues to incur, medical expenses covered by the Plan that are unrelated to Mrs. Summerlin's 1999 claims, and the Plan's third-party administrator has begun offsetting the amount it contends the Plan is owed for the benefits paid on behalf of Mrs. Summerlin against the amounts due on Plaintiff's claims. She filed suit against the Plan, seeking damages and an injunction against further offsetting by Defendants.

The Plan's third-party administrator, Wausau Benefits, Inc., was originally named as a Defendant in this case. The parties have stipulated that Wausau Benefits should be dismissed with prejudice. Accordingly, Defendant Wausau Benefits, Inc., is dismissed from this action with prejudice. The only remaining Defendant in this case is Georgia-Pacific Corporation Life, Health and Accident Plan.

The Court's discussion is key here.

1. The Georgia Anti-Subrogation Statute Does Not Apply in this Case

Plaintiff contends that he is not obligated to reimburse the Plan because Georgia's anti-subrogation statute, O.C.G.A. § 33-24-56.1, applies and prevents the Plan from requiring reimbursement of *1208 the payments made on behalf of Mrs. Summerlin-and from enforcing the reimbursement claim via setoff-because the settlement did not make Mr. and Mrs. Summerlin whole. O.C.G.A. § 33-24-56.1 provides that benefit providers, including employee benefit plans, may require reimbursement of medical expenses paid on behalf of an injured party in the event of a recovery for that personal injury from a third party. O.C.G.A. § 33-24-56.1(b) (2004). There is a limitation to this rule: reimbursement may be required only if the amount of recovery exceeds the sum of all losses incurred as a result of the injury. Id. Furthermore, under this law, benefit providers may not withhold or set off insurance benefits as a means of enforcing a claim of reimbursement. O.C.G.A. § 33-24-56.1(f).

The parties have stipulated that the settlement was not sufficient to fully compensate Mr. and Mrs. Summerlin for their injuries. Therefore, if the complete compensation rule of O.C.G.A. § 33-24-56.1 applied in this case, Defendants would not be entitled to seek reimbursement from the Summerlins or to set off the amount the Plan paid on behalf of Mrs. Summerlin against Plaintiff's benefits. See O.C.G.A. § 33-24-56.1; Thurman v. State Farm Mut. Auto. Ins. Co., 278 Ga. 162, 164, 598 S.E.2d 448, 451 (2004). But if ERISA preempts O.C.G.A. § 33-24-56.1, the statute would not apply to prevent Defendants from enforcing the reimbursement claim.

ERISA preempts all state statutes that "relate to" employee benefit plans. 29 U.S.C. § 1144(a); see also FMC Corp. v. Holliday, 498 U.S. 52, 58, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990); Swerhun v. Guardian Life Ins. Co., 979 F.2d 195, 197 (11th Cir.1992). There is an exception to this rule: under ERISA's "saving clause," a state statute that "relates to" an employee welfare plan may escape preemption if it regulates insurance. See 29 U.S.C. § 1144(b)(2)(A); see also Ky. Ass'n of Health Plans, Inc. v. Miller, 538 U.S. 329, 334, 123 S.Ct. 1471, 155 L.Ed.2d 468 (2003); Swerhun, 979 F.2d at 197. But there is an exception to the exception: even if the state law at issue falls within the saving clause, ERISA's "deemer clause" exempts certain ERISA plans from state regulation. See 29 U.S.C. § 1144(b)(2)(B); Holliday, 498 U.S. at 61, 111 S.Ct. 403; Swerhun, 979 F.2d at 197.

Defendant contends that O.C.G.A. § 33-24-56.1 is preempted by ERISA and therefore does not apply in this case. There is no contention that the Georgia anti-subrogation statute does not "relate to" ERISA covered plans. Therefore, if the statute is not saved by ERISA's saving clause or if the Plan in this case is exempt from the statute by virtue of ERISA's deemer clause, the Georgia anti-subrogation statute does not apply.

Defendant is correct that ERISA preempts O.C.G.A. § 33-24-56.1 in this case. Pretermitting the question whether O.C.G.A. § 33-24-56.1 is saved by ERISA's saving clause, [FN2] the Plan in this case is exempted from the reach of the statute by virtue of ERISA's deemer clause. ERISA's deemer clause exempts *1209 certain ERISA plans from state laws that "regulate insurance" within the meaning of the saving clause. 29 U.S.C. § 1144(b)(2)(B); Holliday, 498 U.S. at 61, 111 S.Ct. 403. The Court in Holliday held that the deemer clause exempts self-funded ERISA plans from state laws that "regulate insurance." Holliday, 498 U.S. at 61, 111 S.Ct. 403. Because the plan at issue in Holliday was a self-funded welfare benefit plan, ERISA preempted the application of Pennsylvania's anti-subrogation statute to the plan. Id. at 65, 111 S.Ct. 403. The Plan at issue in this case, like the plan in Holliday, is a self-funded welfare benefit plan governed by ERISA, so it is exempt from O.C.G.A. § 33-24-56.1 under ERISA's deemer clause. Therefore, the Georgia statute does not apply to prevent Defendants from enforcing the reimbursement claim. See 29 U.S.C. § 1144(b)(2)(B); Holliday, 498 U.S. at 61, 111 S.Ct. 403.

2. The Make-Whole Doctrine Applies in this Case

Plaintiff argues that even if Georgia's anti-subrogation law does not apply, allowing Defendants to demand reimbursement in this case is against public policy because Plaintiff has not been made whole. Under the make-whole doctrine, "an insured who has settled with a third-party tortfeasor is liable to the insurer-subrogee only for the excess received over the total amount of his loss." Guy v. Southeastern Iron Workers' Welfare Fund, 877 F.2d 37, 39 (11th Cir.1989). In the Eleventh Circuit, the make-whole doctrine is the default rule in ERISA cases. Cagle v. Bruner, 112 F.3d 1510, 1521 (11th Cir.1997). The parties can, however, contract out of the doctrine. The make-whole doctrine does not apply if there is "clear language rejecting it" in the insurance contract. Id. at 1521-22. For a plan to escape the doctrine, "it need only include language in the plan explicitly providing the [plan] with the first right of recovery, even when a participant or beneficiary is not made whole." Id. at 1522. The ERISA plan at issue in Cagle did not contain any clear language rejecting the make-whole doctrine, so the doctrine applied to that case, and the plan was not allowed to recover from any third party until the beneficiary was made whole. Id.

The Plan at issue in this case has two relevant reimbursement options: the "Offset Option" and the "Agreement Option." Paragraph 7 contains the Offset Option, which provides that any payments received as judgments or settlements to compensate for expenses which the Plan paid may be offset against future claims the participant makes under the Plan. The Offset Option does not require a written agreement. Paragraph 6 contains the Agreement Option, which requires the participant to sign a written reimbursement agreement establishing a lien on any recovery. If the participant does not sign such an agreement, the Plan may refuse to make benefit payments.

It is clear that the Plan rejects the make-whole doctrine under the Agreement Option because paragraph 6 specifically states that the Plan has the right of first recovery, even when a participant or beneficiary has not been made whole. However, such language does not appear anywhere in the Offset Option-there is no language in paragraph 7 clearly rejecting the make-whole doctrine. Furthermore, there is no language clearly rejecting the make-whole doctrine in paragraph 5, which is referenced in paragraph 7 as describing which payments must be reimbursed to the Plan. Under the Plan's interpretation of the contract, it is immaterial that the Offset Option does not specifically reject the make-whole doctrine. Rather, the Plan asserts that the right of first recovery *1210 language in paragraph 6 should be read into paragraph 7. The Plan further contends that its decision to offset Plaintiff's benefits under this interpretation is entitled to deference.

[5] The Plan is correct that its decision to offset under this interpretation is subject to the arbitrary and capricious standard of review. A denial of ERISA benefits is subject to de novo review unless the benefit plan gives its administrator discretionary authority to construe the terms of the plan. If the plan does reserve that discretion to the administrator, the arbitrary and capricious standard of review applies unless the administrator's decision creates a conflict of interest. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989); Cagle, 112 F.3d at 1516. Section 27 of the Plan provides: "The Plan Administrator has the exclusive responsibility and complete discretionary authority to control the operation and administration of this plan, with all powers necessary to enable it to properly carry out such responsibility, including but not limited to, the power to construe the terms of this plan[.]" (Stipulation of Facts Ex. C at 77.) Plaintiff does not contend that there is a conflict of interest. Therefore, the arbitrary and capricious standard of review applies in this case.

[6] [7] [8] Under the arbitrary and capricious standard of review, the Court is limited to determining whether "the contested interpretation was made rationally and in good faith." Blank v. Bethlehem Steel Corp., 926 F.2d 1090, 1093 (11th Cir.1991); accord Cagle, 112 F.3d at 1518. There are a number of factors the courts take into account to determine whether an interpretation was arbitrary and capricious, including "the uniformity of the [Plan's] construction, the reasonableness of its interpretation and possible concerns with the way unexpected costs may affect the future financial health of the plan." Blank, 926 F.2d at 1093. The key factor that applies in this case is the reasonableness of the interpretation. The Plan argues that "the circumstances under which the Plan may seek reimbursement are determined by the subrogation language as a whole." The Plan further contends that there is an ambiguity as to whether the make-whole doctrine is rejected across the board and that this ambiguity must be resolved in favor of the Plan administrator's interpretation. But the contract clearly gives the Plan two options for seeking reimbursement. Only one of these options includes the right of first recovery language. The two reimbursement options are separate and distinct. The options do not reference each other, nor do they depend upon each other. Therefore, it would be incongruous to extract a portion of one option and read it into the other. The Plan's interpretation is unreasonable. Consequently, the Court cannot find that it was made rationally and in good faith. Thus, the Plan's interpretation fails because it is arbitrary and capricious. Under the Plan as it is drafted, a reimbursement agreement must be executed for the right of first recovery provision to apply.

The Plan also contends that not reading the right of first recovery language into the Offset Option would lead to inequitable results and create incentives for participants to violate the Plan by not signing reimbursement agreements. These arguments are without merit. The Plan drafted its own contract. If it wanted to escape the make-whole doctrine under the Offset Option, it could have included language in paragraph 7 explicitly providing that the Plan may offset payments received from third parties against future claims even when the participant or beneficiary has not *1211 been made whole. Furthermore, under paragraph 6, the Plan may withhold benefits from those participants who refuse to sign reimbursement agreements. Therefore, it has a remedy under paragraph 6 to assure compliance with the Plan agreement. The Plan's failure to enforce its own Agreement Option should not be remedied, however, by a tortured reading of the Plan contract that arbitrarily extrapolates the "right of first recovery" language from paragraph 6 and deposits it into paragraph 7. Again, under the Plan as it is drafted, a reimbursement agreement must be executed for the right of first recovery provision to apply. Therefore, the Court finds that the Plan does not clearly reject the make-whole doctrine under the Offset Option and that the Plan's interpretation to the contrary was arbitrary and capricious. For these reasons, the Plan is not entitled to offset Plaintiff's claims under paragraph 7.

3. The Reimbursement Agreement

[9] The Plan contends that even if it is not entitled to offset under paragraph 7, it is still entitled to reimbursement under paragraph 6 because Mr. and Mrs. Summerlin "almost certainly" signed a reimbursement agreement. [FN3] However, despite its "best efforts," the Plan has not been able to locate a copy of the agreement. Plaintiff does not recall signing such an agreement.

FN3. Plaintiff correctly observes that he cannot assign his wife's rights. See Rest.2d of Contracts § 324 (1981); see also Bank of Cave Spring v. Gold Kist, Inc., 173 Ga.App. 679, 680, 327 S.E.2d 800, 802 (1985) (noting that assignor must intend to make the assignment). The Plan's contention, however, is that both Mr. and Mrs. Summerlin signed the agreement, not that Plaintiff signed an agreement purporting to assign his wife's rights.

For the Plan to rely upon a reimbursement agreement, it must prove that such an agreement was executed. The Plan's evidence of this agreement is an affidavit from an employee of its third-party administrator stating that the Summerlins "almost certainly" signed a reimbursement agreement. The employee came to this conclusion for two reasons: 1) letters to the Summerlins regarding their claims specifically reference a reimbursement agreement, and 2) the Summerlins' file did not contain correspondence from the Summerlins indicating that they refused to sign a reimbursement agreement.

Generally, to prove the contents of a writing in federal court, the original writing is required. Fed.R.Evid. 1002. If the original writing cannot be produced because it has been lost or destroyed through no fault of the party seeking to rely upon it, the party may be permitted to introduce secondary evidence of the contents of the writing. Fed.R.Evid. 1004(1); see United States v. Holley, 463 F.2d 634, 637 (5th Cir.1972). It is true that the question whether a writing existed and whether the secondary evidence accurately reflects its terms is a question for a trier of fact rather than the court, but the proponent of the writing must introduce some evidence of the existence and contents of the original to get to the factfinder. See Fed.R.Evid. 1008. The Plan has failed to introduce evidence sufficient to allow a trier of fact to find the existence and contents of a reimbursement agreement between the Summerlins and the Plan. The Plan cannot state with certainty that there actually was a reimbursement agreement. Its third party administrator's employee had no personal knowledge regarding whether Plaintiff signed an agreement. She opined simply that Plaintiff "almost certainly" signed an agreement because under the Plan's administrative procedures, Plaintiff would not have received a letter referencing a reimbursement agreement unless he had signed an agreement. *1212 This is not enough. The Plan has not introduced evidence, e.g., of the terms of the "lost" agreement; it has introduced no evidence that the Plan routinely required every participant and beneficiary to execute an identical reimbursement agreement; and it has offered no evidence that Mrs. Summerlin signed a reimbursement agreement. For these reasons, the Plan has failed to prove that a reimbursement agreement between the Summerlins and the Plan was executed. Therefore, the Plan may not rely upon a reimbursement agreement to seek reimbursement from Plaintiff.


For the foregoing reasons, the Court denies Defendants' motion for summary judgment. Accordingly, per the stipulation of the parties, the Court orders Defendant Georgia-Pacific Corporation Life, Health and Accident Plan to pay all claims that have been, or may be, submitted for payment by Plaintiff or his dependents that would, except for the Plan's claim for reimbursement, otherwise be eligible for payment and payable by the Plan.

366 F.Supp.2d 1203 is the West cite.

Tuesday, October 04, 2005

Humeston Trial #2: ER doc says "clean arteries."

From various sources including Reuters:

This week Judge Higbee denied Merck's 5th Motion for a Mistrial since the trial began three weeks ago. This time, Merck argued a plaintiff's witness violated an order banning discussion of Merck's withdrawal of Vioxx. Higbee said jurors already knew Vioxx had been pulled from the market.

Monday, cardiologist Dr. Graham Wetherley also testified. He was E.R. doctor who treated Humeston for his heart attack. On the stand, the doctor described Humeston's heart vessels as large and healthy and said they didn't need a procedure to clear them.