• Editor's Corner
• Supreme Court Broadens Anti-Retaliation Protection
• Uniting the Defense - Council on Litigation Management Gets Insurers, Defense Lawyers and Insureds on Same Side of Table
• FASI Membership Committee Report
• Enforcement Has Begun: CMS Sues Attorney to Collect Medicare Lien
• Fair Pay Act Signed Into Law
E-Mail FASI Headquarters
--by Gail Shuffler, FASI President
FASI has a new name: Florida Association of Self Insureds. Our recent winter meeting in Lake Mary was one of the best yet. In addition to the name change, FASI is shifting the organizational focus to a more employer-based association, although our service partners continue to play a critical role. While many have identified FASI with mostly workers' compensation issues, we recognize that many employers are self insured for health benefits and other casualty lines that are just as important.
The annual conference at the The Ritz Carlton, Naples in July was part of the discussion and planning at the winter meeting. FASI will mark its 40th birthday this year making us older than RIMS or PRIMA but definitely surviving our "mid-life" crisis.
We have some new members and we are eager to continue working together on the many issues that confront us in these difficult times.
Please plan to join us in July.
--by John Darin
A warm welcome to our new members and those interested in learning more about the organization who attended the Winter Conference. I think it was Thomas Jefferson who said, "The system not amenable to change carries within it the seeds of its own destruction." FASI needs the new ideas and energy these new folks have demonstrated an interest in sharing. If you are interested in serving on a committee, that is a great way to meet other members and develop a sense of ownership in FASI.
The committee chairs are:
Convention - Bethan Hyde 407.618.1172 firstname.lastname@example.org
Legislative - Claude Revels 904.378.4629 email@example.com
Self-Insurance - Bob Widmer 813.289.3900 firstname.lastname@example.org
Communications - John Darin 407.451.3150 email@example.com
Membership - Mark Resler 386.752.7585 firstname.lastname@example.org
Strategic Membership Initiative - Gail Shuffler 850.891.2117 email@example.com
If FASI is the organization you want it to be, then lend a hand to keep it the way it that way. If FASI could be something better, make it happen!
Supreme Court Broadens Anti-Retaliation Protection
--by Michael P. Spellman, Coppins Monroe
On January 26, 2009, a unanimous United States Supreme Court continued its recent trend of broadening Title VII’s anti-retaliation provision. In Crawford v Metro Government of Nashville & Davidson County, Tenn, the Court ruled that Title VII anti-retaliation protections extend to employees who speak out about discrimination and harassment not of their own accord, but in answering questions during an employer-ordered internal investigation. Justice David H. Souter wrote a unanimous opinion for the court with Justices Samuel A. Alito Jr. and Clarence Thomas concurring in the judgment.
Vicki Crawford, a 30-year school district employee, was discharged after cooperating with her employer’s internal investigation of sexual harassment against the district’s employee relations director, was protected under Title VII’s “opposition clause.” The “opposition clause” prohibits an employer from retaliating against an employee who opposes any practice made unlawful by Title VII. Reversing the Sixth Circuit Court of Appeals, the High Court held that while Crawford did not actually initiate a complaint of discrimination, her statement made in response to the district’s internal investigation nonetheless opposed the discrimination the director allegedly engaged in.
This decision continues a trend in which the High Court has recently expanded Title VII’s anti-retaliation provision. In its 2006 decision, Burlington Northern & Santa Fe Ry Co v White, the Court cleared up a split among the circuit courts when it established a broad framework for interpreting Title VII’s anti-retaliation provision. In Burlington, the Court held that employer actions are retaliatory if they: (1) “would have been materially adverse to a reasonable employee or job applicant;” and (2) “could well dissuade a reasonable worker from making or supporting a charge of discrimination.” Two cases decided in 2008 in which the Supreme Court has construed anti-retaliation provisions broadly are: (1) CBOCS West, Inc v Humphries in which the Court held that Section 1981 encompasses claims for retaliation; and (2) Gomez-Perez v Potter in which the Court held that the Age Discrimination in Employment Act protects federal employees from retaliation for filing age bias complaints.
Uniting the Defense - Council on Litigation Management Gets Insurers, Defense Lawyers and Insureds on Same Side of Table
Fast Growing Young Organization Provides Education and Drive to Forge Industry Standards for Litigation Best Practices
--by Adam Potter
Insurance claims professionals, insureds and outside defense lawyers have often worked at cross-purposes, making for inefficiency and less-than-optimal results. But change has been afoot since the Council on Litigation Management (CLM) began aligning the defense-team goals in early 2007.
“We’re bringing law firms and the industry together to create efficiencies. If we become more efficient working together as a team, both sides will be more effective and profitable,” says Advisory Board member Domenick C. DiCicco Jr., Senior VP and Chief Legal Officer for claims at Zurich North America.
The only organization dedicated to training both defense and claims professionals in litigation management, the CLM has attracted thousands of litigation management and claims executives, attorneys, adjusters, risk managers and general counsel. Involving more than 125 insurance companies, numerous corporations, every major brokerage firm, hundreds of third-party administrators and adjusters, and roughly 3,000 defense lawyers and firms, CLM is the largest organization solely committed to furthering the highest standards of litigation management.
CLM sponsors free courses for adjusters, supports ten large hardworking committees and runs an information-packed annual conference. Its Advisory Board boasts executives from companies like AIG, Aon, Costco, Fireman’s Fund, Liberty Mutual and Sony Pictures.
“The quality of people on the committees and Advisory Board is extraordinary,” DiCicco says. “We all share same goals in litigation—to get the best outcome for our mutual client, the insured.”
CLM is made up of Fellows and Members. Fellows are individuals who participate in litigation and the management thereof. They include adjusters, claim executives, risk managers, inside counsel, litigation managers, self-insured companies and service providers. Admission as a Fellow is free.
Members, who must be nominated by a Fellow, are individual defense attorneys and law firms.
Adam Potter, CLM’s founder and executive director, says the organization is forging a “bulletproof defense alliance,” uniting insurers, lawyers and insureds. Without unity, the defense is at a disadvantage against the well-organized plaintiffs’ bar.
“Insurers spend tens of billions of dollars a year on outside counsel,” Potter adds. “By working together, we can provide a better way to manage resources and achieve better results.”
Potter, who was the Risk Manager with Continental Airlines and Warner Music and a broker with Alexander & Alexander and Willis, has almost missionary zeal about the CLM. And he wants to dispel the idea that insurers are just looking for the least-expensive defense firms. They want the most cost-effective defense—a combination of effectiveness and efficiency from their law firms, he says.
Education—from Rookie Adjusters to Executives to Lawyers
CLM takes a three-pronged approach to education. One prong is courses. About 300 insurance adjusters have attended litigation-management classes held in Boston, Chicago, Dallas, New York and San Francisco. “Litigation 101 for Insurance Professionals,” is for adjusters new to litigation. Adjusters with at least three years of experience take “Economics of Litigation Management,” which covers planning, budgeting, valuation, negotiation and resolution. Both offer adjuster continuing education credits.
“The adjuster training program is designed to fill the gap for young adjusters,” says Mari Henry Leigh, a CLM Advisory Board Member and Chair of its Education Committee. Leigh is a senior partner with Meckler Bulger Tilson Marick & Pearson LLP, a national law firm with offices in Chicago, Dallas and Phoenix. Leigh is the only defense attorney on CLM’s Advisory Board, and she serves as a liaison between Members and Fellows.
Taught by experienced defense lawyers, CLM’s classes “fast-track the learning curve on claims and offer a broader perspective on litigation management,” Leigh says. The courses are provided without cost in a collaborative learning environment.
The second prong is CLM’s Annual Conference. The 2009 conference will offer 16 sessions with 60 speakers over two days in Phoenix next March. Topics include “What General Counsel, Risk Managers, Adjusters, Carriers and Attorneys Can Learn From Each Other,” “Benchmarking and Returning Positive ROI in Litigation Management,” “Electronic Discovery: The Insurer’s New Crystal Ball?” “Creating a Unified Front on Tort Reform,” and “Data Forensics.” About 600 attendees are expected.
Arizona Governor Janet Napolitano, widely expected to become the next Secretary of the Department of Homeland Security, will receive CLM’s Professionalism Award, which recognizes and commemorates an individual who has demonstrated the unique ability to lead others by example in the highest standards of their profession.
CLM’s first conference, held last March, honored former Attorney General Janet Reno.
The third prong, for lawyers, is being developed, and Leigh is hoping it will ultimately be the “gem” of the CLM. Leigh’s committee is working on creating a week-long, intensive College of Litigation Management to be offered in conjunction with a major law school or university. Aimed at lawyers at all levels—both at law firms and companies—it would be an accredited curriculum offering a certification and diploma.
While law schools teach attorneys how to try cases, they don’t cover the business and human-relations aspects of litigation, she says. To fill that gap, the weeklong program would focus on understanding litigation from the client’s perspective and business needs. and cover the business side of managing clients and client expectations, and how to get the most out of your team and vendors—in addition to covering the nuts and bolts of strategic planning, budgeting and reporting.
Creating the College of Litigation management is a “daunting undertaking,” but Leigh is convinced that her Committee and the “driven” Potter can pull it off. “What is wonderful about working with Adam,” says Leigh, “is that his interest in effecting change is genuine, his passion sincere and his enthusiasm infectious. It is hard not to be around Adam and not want to make the CLM the best defense organization in the industry.”
Setting Best-Practices Litigation Standards and Alternative Fees
Attempts to set consistent industry guidelines for all defense firms have failed to take so far. Today, each insurer has different standards, and lawyers who represent many insurers find it difficult and inefficient to comply with them all.
DiCicco co-chairs the committee working on litigation guidelines. Whether the committee can pull off this difficult feat remains to be seen, he says, “but I feel we’re on the right track.”
His committee is also developing recommendations for alternative fees. “The hourly fee model is antiquated for both sides,” DiCicco says. “Law firms can be more profitable with alternative fees and more cost-effective.”
Online Directory of Approved Lawyers
“Lawyers can’t pay their way to get into this organization. You must be invited,” Leigh says.
Member attorneys and law firms are in effect given a seal of approval, says the energetic Leigh, a top defense attorney who regularly handles high-profile commercial and personal-injury cases as well as being a recognized expert on reasonable attorneys’ fees, attorney fee disputes and defense ethics.
Insurers often struggle to find a lawyer in a state where they don’t normally do much business. How do you find a good lawyer in more remote areas?
With CLM’s online defense lawyer directory, anyone can easily find at least several good choices in every state, Leigh says.
New organizations often find it hard to get their footing. But DiCicco says even he is surprised at CLM’s growth and the progress it has made.
“When we started I would have said you’re crazy if you’d said we’d be this far now,” he says.
The down economy will only spur more litigation, making CLM’s mission of managing costs without sacrificing the quality of representation even timelier, Leigh adds.
CLM - KEY FACTS
Mission: advancing ethics, cooperation and education
Headquarters: New York City
Executive Director: Adam Potter
Contact: Henry Stimpson, Stimpson Communications, 508-647-0705, Henry@StimpsonCommunications.com
Adam Potter, CLM, (212) 724-2345, firstname.lastname@example.org
FASI Membership Committee Report
--by Mark Resler
FASI just completed the winter planning conference in Orlando and attendance was tremendous. Our 2009 membership drive is well under way, and although the economic environment is much different than years past, we hope to enhance membership beyond our 2008 figures. The most recent renewal notices were sent out January 23rd, and we anticipate a lot of first quarter activity. Therefore, please address your FASI membership if you have not already done so. We really need your support, and we welcome your input. Nine new members have already enrolled for 2009. Welcome to FASI.
- Alachua County Board of County Commissioners; Mr. Wade Gillingham
- Alea Alternative Risk; Ms. Susanne Mazzone
- Coppins, Monroe, Adkins, Dincman & Spellman, PA; Mr. Michael Spellman
- GlobalOptions Fraud & SIU Services; Mr. Lou Beniamino
- LYNX – C.F.R.T.A.; Ms. Linda Connell
- Pinellas County Risk Management; Ms. Beth Wininger
- Polk County School Board; Ms. Joy Myers
- Wal-Mart Stores, Inc.; Ms. Mardis DeVore
- Waste Pro of Florida, Inc.; Ms. Jeanie Dubinski
The Membership Committee meeting in Orlando generated quite a bit of discussion concerning increasing the number of members. As the membership chairman, I was really excited by the interest and help offered by meeting attendees. With this help and enthusiasm, I truly believe we can do better in 2009. The FASI board of directors is also entertaining some ideas to foster enrollment as well.
Again, it was great to see such a good turnout at our planning event. It’s the best venue to voice your industry concerns and have those concerns addressed at our annual educational conference in July.
Please contact FASI directly at 1-800-226-FASI (3274) if you know of anyone interested in discussing FASI memberships, or pass this number on to the interested party, or refer them to the website www.fasi-fl.org.
Enforcement Has Begun: CMS Sues Attorney to Collect Medicare Lien
--by Michael R. Merlino, II, Esq., MedAllocators, Inc.
The United States on behalf of the Centers for Medicare & Medicaid Services (CMS) (the entity that manages Medicare) brought an action against a plaintiff’s attorney in the Federal District Court of West Virginia. USA v. Paul J. Harris, US District Court, Northern District of West Virginia, November 13, 2008. In this case, the US claims that the plaintiff attorney is responsible for about $10,000 (plus interest) for payments that Medicare made on behalf of the claimant related to the injury (a/k/a Medicare lien). The attorney claimed that by merely advising CMS of the settlement that CMS consented to the payment of the settlement proceeds. The Court disagreed with the attorney’s contention and ruled that CMS had a right to collect directly against the lawyer.
What did we learn from this case?
1. CMS is actively tracking and now enforcing the Medicare Secondary Payer Act (MSPA).
2. This case is a personal injury case, not a workers’ compensation case. Therefore, it is clear that adjusters managing general liability cases need to consider Medicare’s interests.
3. This case settled in July of 2005, so CMS has been monitoring these cases for at least the past few years.
4. The total amount of settlement was only $25,000. The relatively low settlement amount did not prevent CMS from tracking and collecting on the lien.
5. Although the US tried to collect against the plaintiff’s attorney in this case, the law would have allowed it to collect against the carrier, employer or the claimant.
Ignoring the MSPA is probably no longer a viable strategy.
Fair Pay Act Signed Into Law
--by Michael P. Spellman, Coppins Monroe
On January 29, President Barack Obama signed into law the Lilly Ledbetter Fair Pay Act, only two days after Congress passed it. The Act is the first law passed by the new Congress, and the first law signed by President Obama.
The new law substantially expands the time limit within which a worker may bring a claim for unlawful pay discrimination. The language of the Act essentially overturned the U.S. Supreme Court's opinion in Ledbetter v. Goodyear Tire and Rubber Co. (2007). In Ledbetter, the Supreme Court held that a plaintiff bringing a claim for discriminatory pay practices had to show that the discriminatory acts affecting his or her pay occurred during the 180 days (for states without a fair employment agency) or 300 days (for states like Florida with a fair employment agency) prior to the filing of a discrimination charge. The Act eliminates this required showing by amending Title VII of the 1964 Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act and the Rehabilitation Act. Each statute will now permit the period for a worker to file a charge of pay discrimination to be triggered each time the worker receives an allegedly discriminatory paycheck, even if the pay decision was made much earlier. The law declares that an unlawful employment practice occurs when: (1) a discriminatory compensation decision or other practice is adopted; (2) an individual becomes subject to the decision or practice; or (3) an individual is affected by application of the decision or practice, including each time there is a payment of compensation.
Although the courts may take years to sort out the full ramifications of the Act, the practical implications for employers is at least clear in one regard: because current and former employees can now challenge pay decisions made in the distant past, employers need to modify their retention policies and begin retaining records surrounding pay decisions and compensation indefinitely.
Some commentators are recommending that employers quickly conduct prompt statistical assessments of their compensation rates by race, gender, etc. These suggestions may seem sensible, but a word of caution is in order: Their implementation is far more complicated and perilous than may appear.
* First, valid statistical assessments of compensation can be difficult and generally should be undertaken only for purposes of obtaining legal advice. If you want to know the legal implications (if any) of your current compensation program, you should work with your attorney to determine what information he or she needs to make an evaluation. You should also discuss with your attorney whether and to what extent any such review might be discoverable in subsequent litigation.
* Second, much of the data necessary to explain compensation differences between any individuals or groups, regardless of gender or race, may not be obtainable, at least not in electronic form. Pre-hire experience is a good example of a factor that may be very important to explain compensation, but may exist, if at all, only in hard copy resumes in personnel files. Additionally, even electronic data once available may not have been retained and may thus exist only for recent years. Also, compensation systems often change over time, so a consistent assessment over a period of years may be complex.
* Third, it is important to consider even before a study is undertaken what actions may be appropriate once the results are known. The results of such assessments often present anomalies. You should actively consult with counsel about how best to approach pre-assessment discussions and what options you might want to consider based on various potential outcomes to the assessment.
* Fourth, be aware that there are multiple factors that may explain anomalous pay data. Again, the best approach is to work actively with counsel and other experts to determine both the cause of such anomalies and adjustments that could reduce or eliminate them, if appropriate, going forward.
Other oft-heard suggestions in the wake of the new Act include a study of hiring practices and the collection of useful data at hiring. Such action provides little relief at present but could be valuable for future or ongoing compensation studies. Gathering reliable and uniform data during the hiring process about “prior experience” or prior salary and salary negotiations could be potentially useful. In general, it's a good idea to work with counsel and other experts to determine whether such data will prove helpful and what methods to collect and store such data will be the most appropriate.
If you have questions or comments about the FASI E-Newsletter, please contact: Bill Kautter at email@example.com (800-226-3274) or Newsletter Chair John Darin at firstname.lastname@example.org.
Please note that letters and comments sent to the publisher are automatically considered for use in upcoming issues unless you expressly request that they not be used. You may request that you remain anonymous in the case that your letter or comments are used. We reserve the right to edit for brevity and/or clarity.
This eNewsletter is automatically sent to all FASI members as an added, free benefit of membership.
FASI, 222 S Westmonte Dr #101, Altamonte Springs, FL 32714, 800-226-3274.