The Dangers Insurance Companies Hide
Mintz, Morton
THE DANGERS INSURANCE COMPANIES HIDE Insurers don’t have to tell you when they know you’re about to be killed by Morton Mintz Imagine a manufacturer who discovers that one of his products...
...Athletic gear...
...One allegation was that in a 1935 report on asbestos disease, Metropolitan had altered certain passages “to suit the insurance industry...
...Aetna then began to fund numerous string studies through McGuire, Woods, using the lawyer-client relationship to cloak the results...
...Robins’ bankruptcy filing in 1985 meant Aetna faced a nightmarish possibility: it could become the sole defendant in the hundreds or thousands of lawsuits latent in the approximately 195,000 claims that survived court screening...
...This deserves particular emphasis because in recent years self-insurance has become commonplace in a wide range of manufacturing industries, including automotive parts, chemicals, general aviation, medical devices, pharmaceuticals, sporting goods, and tobacco...
...shall be fined not less than $100,000...
...In Ethics in the Sanctuary, author Margaret P. Battin recalls the much-publicized West German case of Jurgen Bartsch, a 15-year-old butcher’s apprentice who confessed to his priest that he had committed a murder: “The priest attempted to persuade Bartsch to give himself up to the police...
...Bartsch committed three more murders-all of them of 11-year-old boys, all of whom he subjected to sexual torture prior to killing them-before he was caught four years later [in 19661...
...But later in 1976, Aetna was still reassuring other companies providing coverage to Robins...
...The obligation is expressed this way in Leviticus 19:16: “Neither shalt thou stand idly by the blood of thy neighbor...
...Italics added...
...The memo erased any possible doubt at Aetna that the claim was false, devastated the defense, and led the jury to make the first award of punitive damages to a Dalkon Shield victim...
...Attorney Edgerly feared confirmation of Tatum’s experiments...
...In June 1984, when Dalkon Shield litigation was reaching floodtide proportions, four ACS officials met to discuss the carrier’s options...
...But the way things stand, the courts equate an insurer of wounding and lethal products with a priest who hears the sacramental confession of a serial murderer...
...life...
...So it’s a fair question: What did the insurers know and when did they know it about hazardous defects identified after marketing in, say, automobiles...
...For Congress, the bill was an apparently novel perception that protecting human life, safety, and health is too The first line of defense against defective and needlessly unsafe products resides not in those who manage the offices where they are insured, but in those who manage the factories where they are made...
...The Columbus dump Thirteen days after the February 1975 verdict in Wichita, William Forrest and other Robins officials met in Hartford with five Aetna executives and an official from Robins’s insurance broker to discuss why the case had been lost and how to build better legal defenses against Dalkon Shield lawsuits...
...From a second-floor window, X sees Y lay a nearly invisible wire across the alley and then run away...
...To that point Robins had sold more than 4.5 million Dalkon Shields, claiming that in preventing pregnancy the device had a stunningly low failure rate of 1.1 percent per year...
...An especially odd fate awaited about 20 boxes of documents, some concerning secret tests of the Dalkon Shield’s string...
...If Lord had seen the newly available court documents, he surely would have extended his wrath and his plea to complicit Aetna executives...
...The pact could have embarrassed Aetna and rocked the industry if it leaked into a court proceeding...
...According to hitherto unreported Aetna internal memos, by November 1974 ACS had, or was trying to take, “complete control” of Dalkon Shield litigation from Robins...
...As far back as 1956, articles in scientific literature had warned that nylon rotted upon long-term exposure to body fluids...
...In February 1976, an ACS internal memo acknowledged inadequate testing...
...The lawsuit was settled in 1984, on the eve of trial...
...Proving to a fare-thee-well that they had known the truth from their own “actuarial tables, ratings schedules, physicians’ reports, workmen’s compensation claims, underwriting guidelines, and safety-and-engineering manuals,” Brodeur wrote: “If at some point along the way, Aetna, Travelers, Commercial Union, Liberty Mutual, INA, Hartford, Aetna executives remain to this day all but invisible...
...And even in financial matters that aren’t lifethreatening, the government is likely to construe professional confidentiality as waivable...
...For at least a decade after the sales halt, according to recently available court documents, the liability insurer joined the manufacturer in suppressing knowledge of the IUD’s hazardous defects...
...of Rich- of defense...
...The Supreme Court denied the Robins petition in ‘ June 1989-an obviously significant victory for the Justice Department...
...Runaround suit Flat-out allegations of conspiracy were made against (and denied by) Aetna in private lawsuits...
...Yes, an Aetna official told one of them, Aetna was “completely satisfied with Robins’ testing and marketing program...
...Unlike the insurance industry, the medical and legal professions do not say “never” to disclosure because they recognize that confidentiality treated as an absolute inevitably collides with higher responsibilities to the welfare of the community at large: *The American Medical Association’s ethical code allows a physician to “reveal the confidences entrusted to him in the course of medical attendance” if “required to do so by law or [if] it becomes necessary in order to protect the welfare of the individual or of the society...
...At the time, the papers relating to the string tests were under a court “non-destruct” order...
...In what Nader hailed as a “luminous exception” to the industry norm, the huge State Farm Mutual Automobile Insurance Company fought NHTSA’s action up to the Sumeme Court and was vindicated in 1983 when the court held the action illegal...
...since 1973, 27 states and the District of Columbia have enacted some version of the so-called “Good Samaritan” statute...
...ment or contract with “the purpose or effect of conOnce all the agreement’s misleading provisions are cealing a public hazard, any information concerning a weighed, they indicate that for $43 million-little public hazard, or any information which may be usemore than nuisance value-Aetna could walk away ful to members of the public in protecting themselves from the multibillion-dollar arena of Dalkon Shield from injury which may result from the public hazard, liability immune from lawsuits for ever after...
...However, after long delays of a trial that might have determined Metropolitan’s legal accountability, the parties settled...
...Accountants had no small role in the S&L disaster, a case in point being a major accounting firm’s apparent cover-up of the shenanigans of Charles Keating Jr...
...It’s an argument that government, which has no higher mission than public safety, must not compel insurers to divulge information that would protect us from massive, continuing disease, injury, and death...
...Yet they have been complicit in a decade of delay of the recall, while the Dalkon Shield injured thousands more women than any serial rapist ever has...
...First, Edgerly instructed Wagenseil to classify information about the baboon study as a lawyer’s confidential “work product” to prevent plaintiffs’ counsel from seeing it...
...A multitude of women were still carrying “the deadly depth charge in their wombs, ready to explode at any time,” Lord told the utterly unrepentant trio standing before him...
...This extraordinary move meant that hundreds of thousands of Dalkon Shield victims who had never heard of their self-appointed putative benefactorsGlenda Breland, her co-plaintiffs, and their lawyers-would, without their knowledge or consent, forever lose their constitutional right to a jury trial against Aetna, to select their lawyers, and to have their cases heard in the jurisdictions where they live.U.S...
...William M. O’Leary, professor and chairman of microbiology at Cornell, concluded that there was “a striking association” between the multifilamented string and bacterial contamination of the womb...
...So late last year, the House of Representatives passed a bill requiring accountants to alert regulators to serious irregularities...
...A manager convicted of a violation “shall was at variance with uncontested facts...
...They have ruled that an insurer has no affirmative duty to warn the public or to facilitate a recall of a product it insures...
...Disclosure, Brodeur explained, would “have encouraged claims and damage suits, and run counter to basic insurance-company practice, which is to write as much coverage as possible, and as cheaply as possible, in order to reap a rich harvest of premiums that, when invested, will return enough money to pay for future claims and make a profit for the company...
...FDA staff members urged Commissioner Alexander M. Schmidt to recall at least all unimplanted Dalkon Shields...
...Berrington has a point about the role of government, but through him the insurance industry makes an argument for preserving the confidentiality of a commercial relationship no matter the cost in human Morton Mintz, a retired Washington Post reporter, is the author of At Any Cost: Corporate Greed, Women, and the Dalkon Shield (New York: Pantheon, 1985...
...Consider the dreadful catastrophes caused by only two products: the Dalkon Shield, the defective intrauterine contraceptive device (IUD), and asbestos, the deadly mineral...
...But Aetna resisted a true recall, and a reason emerged in a 1980 interoffice communication in which ACS official Douglas D. Carr discussed a meeting the previous day, Robins, he wrote, “was still contemplating a recall of the IUD which would ‘precipitate an influx of claims.’” Aetna renewed its coverage in 1976 and again in 1977...
...In one way or another, thousands of documents sought by plaintiffs’ lawyers vanished in suspicious circumstances after McGuire, Woods took over the Dalkon Shield litigation under Aetna’s direction...
...ACS outside counsel Rufus Coldwell warned in a 1982 memo that a judge could construe it “in an unfavorable manner and place upon ACS some heretofore non-existent duty of disclosure to the public...
...Such allegations against an insurer are not a first...
...The first experiments incriminating the Dalkon Shield string were reported in 1974 by IUD expert ty-’s primate laboratory of IUDs in baboons (primates that, after chimpanzees, have a female reproductive system most closely resembling a human’s...
...It’s an argument that in essence is an excuse for the insurance industry to stand by the blood of its neighbors...
...The American Bar Association’s Model Rules of Professional Conduct say that information confided by a client may be revealed “to the extent the lawyer reasonably believes necessary . . . to prevent the client from committing a criminal act that the lawyer believes is likely to result in imminent death or substantial bodily harm...
...attorneys-no new bureaucracy would be Based on Merhige’s ruling, Breland counsel and needed...
...In February 1975, near the end of the trial, a leading plaintiffs’ lawyer, Bradley Post, introduced a smoking-gun internal Robins memo...
...Then he wrote: “There is one caveat, and that is, this test could verify the finding of Tatum-if the conclusion appears to be headed in this direction, the study will be aborted...
...Finally, Skip Forrest, the Robins general counsel, admitted in court testimony that Aetna had picked up the entire bill...
...and two other top Robins executives for having refused to recall the Dalkon Shield...
...An appeal by Company X failed...
...Notably, it was an ACS senior claims adjuster who, on New Year’s Eve of 198 1, writing in the margin of a complaint filed by a Dalkon Shield victim, raised the rarely asked question: “What is duty of an insurer to the public when it has knowledge of serious product defects which are likely to cause injury...
...Early in the Reagan administration, NHTSA voided‘an automobile safety standard that required air bags or other automatic restraints and would have saved thousands of lives annually...
...A Congress that can compel disclosure by accountants can also compel disclosure by insurers who learn of avoidable hazards in products and the workplace...
...Company and Law Firm, asserting the attorney-client and lawyer’s work-product privileges, refused to produce substantial numbers of the subpoenaed documents...
...After I learned of the study in 1984, NYU refused for six months to reveal who had paid for it...
...Eighteen deaths have been reported, but the toll is certainly much higher, if only because in Third World countries no one was counting...
...One of the problems, claims adjuster Ronald Szeremeta said in a memo, was “lack of testing prior to marketing...
...Lie-ability insurance “My primary concern,” Bemngton said, is that no standard be established under which “insurers essentially become police officers or reporting officials-an arm of the government . . . or that insurers do the work of government and be blamed when government fails in its responsibility to make judgments as to what products ought not to be on the market...
...billion and a net income of $676 million...
...Although Aetna’s profits from 1974 to 1977 haven’t been disclosed, its 1973 profit from Robins was relatively trivial-about $30,000, according to an internal memo...
...asbestos litigation, over the question of when the in- Monkey business surer’s liabilit-y beg-an: u pon exposure to the product or upon diagnosis of disease...
...It happens routinely,’’ Denenberg told me...
...An early, ominous report came in December 1975, when the law firm told senior ACS attorney John A. Edgerly Sr...
...Soon afterward, Tuttle testified-and Forrest denied-that Forrest ordered him to arrange the destruction of hundreds of “troublesome” documents (some of which Tuttle secretly saved...
...In 1970, for example, Charles K. Cox, president of the Insurance Company of North America (INA), said that INA “will no longer insure the company that knowingly dumps its wastes...
...New Year’s Eve irresolution The Dalkon Shield was sold in the United States from January 1971 to June 1974, when the manufacturer, pressed by a worried Food and Drug Administration (FDA), ended domestic sales (but continued foreign sales until at least April 1975...
...Playground equipment and toys...
...If the “defective product” giving rise to the “dilemma” was about to cause a meltdown at the plant, would Aetna bend its iron rule of confidentiality...
...Confidentiality is not only paramount to an insurer’s relationships with its clients...
...In March 1977, while the case was pending in Circuit Court in Richmond, the companies signed a secret armistice...
...In short order, Aetna forced Tuttle’s dismissal from Dalkon Shield legal matters...
...Toxic chemicals...
...Aetna also paid for a comparative study by New York Universiin a few weeks...
...Why did insurers conceal their knowledge and continue to provide coverage...
...Thus Aetna’s top officers piously stated in their 1989 annual report that “the best way to keep premiums down is to work with clients to prevent or minimize losses...
...For whatever reason, the study continued long enough to go far toward confirming Tatum’s experiments...
...The cut-off was a consequence of a megabucks battle with Robins similar to one in the quid for this quo was that Robins would pay all punitive awards...
...Robert Hunter, president of the National Insurance Consumer Organization (NICO), said in an interview, “It’s a shocking thing that what the industry knows from its files could save lives [but] is never tapped...
...In an analysis of the data in 1981, after the study was completed, Dr...
...Aetna, waiving traditional immunities from liability, consented to some coldblooded provisions...
...Yet, while the Aetna Life and Casualty Company Foundation made $6.8 million in grants in 1985, Nader wrote in 1987, “the only safety contribution was $5,000 to an Indianapolis, Indiana, Volunteer Fire Department, according to the annual report of the company and the foundation...
...It was also the course Robins had preferred because, a Robins lawyer advised, it minimized the company’s legal liability...
...Butane lighters...
...by U.S...
...and George important to exempt insurers (and labs) from reporting serious hazards to regulators...
...The Breland plaintiffs’ counsel crafted the class action as an unprecedentedand, for the ongoing asbestos litigation, precedent-setting-“mandatory non-opt-out class...
...district court judge for Minnesota, Miles W. Lord, excoriated E. Claibome Robins Jr...
...While the Dalkon Shield episode left Robins a shattered, humiliated company, Aetna almost completely escaped punishment, thanks to a class-action lawsuit called Breland...
...Finally in October, Robins asked all women wearing the Dalkon Shield to have it removed...
...In addition, hundreds of children were born with injuries inflicted by the Dalkon Shield while it was their companion in the womb, causing blindness, cerebral palsy, and mental retardation...
...In Outrageous Misconduct, Paul Brodeur wrote: “By 1981, many of the nation’s insurers had known for decades that asbestos workers were dying early, but had kept silent while their underwriters wrote policies for workmen’s compensation and comprehensive general liability as fast as they could put pen to paper...
...An Aetna memo quoted a revealing admission from an official identified as Bill Dumbauld: “Bill’s caustic comment was ‘those unsafe cars on the road aren’t being recalled...
...In deciding whether to sustain the refusal, District Judge Patrick F. Kelly, who was supervising the grand jury, conducted an in camera (in secret) examination of sealed grand jury testimony and exhibits...
...He is above it all...
...Loss prevention, he wrote, “might encourage self-insurance and might otherwise lessen the need for insurance [and] lower premiums, and decrease . . . income and cash flow...
...From that day forward, McCuire, Woods was getting its marching orders from the insurer, not the manufacturer...
...evidence: the longer a Dalkon Shield remained in the body, the greater the risk of pelvic infection, or pelvic inflammatory disease (PID...
...Only a complete recall could protect Dalkon Shield wearers, all of whom were unaware that the string deteriorating in their bodies was exposing them to ever-increasing peril...
...Moments later, X sees Z-an unsuspecting stranger to whom he has no special tie-walking toward the wire...
...During those three and one-half years, physicians implanted an estimated 2.2 million of the devices in the United States and 800,000 in some 100 other countries...
...It was a mockery of an adversarial lawsuit: Aetna instantly embraced it...
...Still, the public health and safety being so much at stake, we need new federal and state legislation that revives the implicit message of Magnuson and Moss: the “thou” in Leviticus 19: 16-“Neither shalt thou stand idly by the blood of thy neighbor”--exempts none of us, including the insurer watching from the Miller have proposed a bill to strengthen the first line window...
...But in the case of a product that kills they have a duty to warn...
...The meeting minutes also refer to a discussion of purging of documents...
...another was that it had withheld “vital information from asbestos workers...
...extended the reporting requirement to product-liabiliSunshine on policyholders ~~ ty insurers (and to independent testing labs...
...But blindly following the “basic insurance-company practice” of seeking the maximum possible premium income in order to make investments had apparently led Aetna into a colossal blunder...
...He shipped the boxes to Columbus, Indiana, when he moved to a new home there...
...Home, Lloyd’s, or any of the other major insurers of the asbestos industry had gone public with their inside knowledge, they might well have been able to saves tens of thousands of lives and untold suffering and pain...
...The insurers of asbestos and the Dalkon Shield did not...
...Aetna produced only the documents it cared to (summarized in a 99-page “index...
...No wonder In the 1972 law creating the Consumer Product Aetna was so happy to pay Breland’s attorneys-in- Safety Commission, Congress put on distributors and cluding a former partner of the judge-fees of $8.2 retailers the same legal burden of disclosure it put on million (an average of $407 an hour) plus expenses...
...All along, however, Robins-but not Aetna-had known that the claim was based on studies which were unreliable at best and fraudulent at worst: The true failure rate was later determined to be about 5.5 percent...
...I just can’t.’’ Aetna finally cut off coverage effective February 28, 1978...
...They blamed Roger L. Tuttle, the Robins in-house counsel in charge of Dalkon Shield product-liability litigation...
...In the process, Aetna had to, and did, learn what Robins knew and what plaintiffs’ attorneys would soon demonstrate with overwhelming scientific An ACS senior claims adjuster, writing in the margin of a complaint filed by a Dalkon Shield victim, raised the question: “What is duty of an insurer to the public when it has knowledge of serious product defects which are likely to cause injury...
...whatever his answer, it isn’t on the record...
...In February 1984, the then-chief U.S...
...One sentence in notes of the meeting-handwritten by someone not publicly identified-leaps off the page: “If we propose alternative #1-re: giving greater detail about how to run their [Robins’s] operations and they don’t accept it and we walk, aren’t we conspiring even more...
...The insurance industry’s indifference to loss prevention has been a significant contributor to the ‘insurance crisis’ of the 1980s, which hit consumers and businesses with skyrocketing premiums...
...Was the conduct of insurers in the Dalkon Shield and asbestos cases an aberration...
...The foreseeable and preventable result was that tens if not hundreds of thousands of women suffered life-threatening pelvic infections, which commonly impaired or destroyed their ability to bear children...
...This is void, contrary to public policy and may not be enfrom a company that in 1989 listed assets of $87.1 forced...
...So I asked Aetna for an answer, and a spokesman assured me I’d get one...
...Company X petitioned for Supreme Court review...
...He sounds no warning...
...Aetna’s be fined not less than $50,000 or imprisoned not less “complete control” of the Dalkon Shield litigation than two years, or both...
...Food additives...
...So it was astounding when in January 1990 the Justice Department dropped its five-year investigation...
...Several days later, Aetna backed out, giving an interesting reason: the information I was seeking concerned the industry as a whole, and therefore I should talk to Berrington, the insurance association counsel...
...The insurer was Aetna Casualty & Surety Company...
...About 21 million U.S...
...In the U.S...
...Fortunately, some firms break the mold...
...Yet they had been complicit in a decade of delay of the recall, while the Dalkon Shield injured thousands more women than any serial rapist ever has...
...The measure passed the Senate but died in squabbles with the House over unrelated issues-and was never reintroduced...
...it is also our business and legal principle without which it might not be possible for insurance companies to provide . . . liability insurance in any form...
...If he promptly warns them, halts production, and recalls the product, he will be obeying a moral obligation deeply rooted in our religious and ethical heritage...
...District Judge Robert R. Merhige Jr...
...exceedingly weary of waiting to be compensated for Florida has also blazed a trail toward corporate acinjuries suffered a decade or more earlier-could not countability...
...At least the priest did what he felt he could to avert further bloodshed...
...More than two years after William McGehee had asked his incisive question about the insurer’s duty, he was still groping for a satisfactory answer-while women in large numbers continued to be stricken with pelvic infections...
...Such a casino philosophy too often has led to industry indifference to loss prevention and advocacy for health and safety, which, as some insurers often brag, are historical objectives of insurance...
...and no plaintiff’s lawyer took a single deposition...
...The Aetna dodged my questions about the baboon study, the armistice with Robins, and other awkward subjects, citing “legal reasons,” “advice of counsel,” and the inviolability of insurer confidentiality: “. . . we are prevented by law from publicly discussing or otherwise disclosing any information provided to us in confidence by our clients,” a spokesman told me at the time...
...Still, he had a few harsh words for Aetna...
...Face up to your misdeeds,” he pleaded...
...In a February 1984 report to Judge Lord, two special masters said that plaintiffs’ attorneys had established a strong prima facie case that there was “ongoing fraud” and that it had “involved the destruction or withholding of documents...
...In its corporate publications, Aetna acclaims itself a “good corporate citizen...
...Watching him do it from the window, and then sitting in silence as consumers are ambushed, is the manufacturer’s product-liability insurer...
...And so in June 1977, he wrote a classic head-in-the-sand directive to Harris W. Wagenseil, then a San Francisco lawyer who has been described as “a principal architect” of the defense of the Dalkon Shield, and who reported to Aetna mostly through McGuire, Woods...
...In cases dating back to 1977, for example, 80 former asbestos workers at a Johns-Manville plant in New Jersey accused Metropolitan Life Insurance Company of “negligence, fraudulent concealment, and conspiracy,” and a federal judge ruled that the insurer “could be held as a defendant” on those accusations, Brodeur wrote in Outrageous Misconduct...
...In a vigorous reply brief in February 1989, the Justice Department listed the possible violations it was investigating: obstruction of justice, mail and wire fraud, false declarations before the grand jury, racketeering, and conspiracy...
...The toll of serious cases and fatalities increased almost daily...
...The in camera submissions, he said, “contain a strong prima facie showing that [Company] and its employees and officers participated in the commission of crimes and fraud during the promotion, marketing, and sale of [the Product], and used its attorneys to perpetuate and cover up these ongoing crimes and fraud during the ensuing product liability litigation through the commission of frauds on the courts, obstruction of justice, and perjury...
...Drugs and vaccines...
...And they shouldn’t, says NICO’s Hunter...
...In a final scenario, our manufacturer neither warns of the defect nor recalls the product...
...the lead plaintiff’s lawyer had never tried a civil suit...
...The papers had been in the possession of Harris Wagenseil, the San Francisco attorney retained by McGuire, Woods...
...In what he described in testimony as a “spring cleaning,” his wife had the boxes carted off to the city dump...
...In October 1975, a meeting was held at Aetna to discuss “problems of defense” in Dalkon Shield lawsuits...
...His conduct, he points out, is required by the courts...
...To force a recall, Aetna could have refused to renew the annual liability coverage that Robins needed to do business since, as Robins’s own insurance broker warned, if ACS didn’t insure the Dalkon Shield, no other carrier would...
...Italics added.] That William D. McGehee had asked the question did not become known for more than six years...
...It’s an argument that would surely astound most Americans were they aware of it...
...Indeed, under the laws of, I think, every state,” Craig A. Bemngton, general counsel of the American Insurance Association, told me, “the insurer has an absolute obligation to provide a defense for that policyholder against claims that arise, and the insurer can be sued when policyholders believe that insurers are not vigorous enough in providing that defense...
...But in keeping with the courts’ norm-it’s a no-no for a jury to be told whether a defendant is insured-the Aetna executives were, and remain to this day, all but invisible...
...It would pay all compensatory awards, even for “intended bodily injuries,” and for injuries arising “on account of Robins’ failure to disclose relevant information and the supplying of false and misleading information [to physicians and women...
...X’s moral obligation to warn Z is also his duty under the laws of a dozen foreign countries...
...They don’t come forward and say, ‘Hey, world, look out for this...
...Found wholly innocent of criminal activities...
...When he was unable to do so, the priest followed Roman Catholic church law requiring absolute confidentiality of the confessional and did not reveal information about the murder or Bartsch’s intentions...
...The bill died in conference with the Senate, but Rep...
...The virtues of And contrary to Merhige’s opinion, Aetna attorney this approach are several: It would infuse personal Edgerly’s order to abandon the baboon test if it was accountability where there is now too little, offset yielding undesired results was certainly more than a pressures on managers to cover up, and be enforced “suggestion...
...But the defeat and its implications infuriated Aetna and William A. (Skip) Forrest Jr., general counsel of Robins...
...You, in essence, pay nothing out of your pockets to settle these cases...
...Building materials...
...But he settled for a “voluntary” suspension of sales-the weakest course of action besides doing nothing...
...The down side of loss prevention for the industry was described in a 1971 study by Herbert S. Denenberg, the former insurance commissioner of Pennsylvania...
...Figuratively, he lays a nearly invisible trip wire and flees...
...The bill says that “whoever is an appromond, who supervised both the Robins bankruptcy priate manager with respect to a product or business and the Breland hearings, certified the class action, practice,” and who “discovers . . . a serious danger airily declaring in his April 1988 opinion that, “there associated with such product (or a component of that have been no suggestions that Aetna had any relation product) or business practice,” shall within 30 days with the alleged injuring device except as an insurer...
...inform each appropriate federal agency in He disregarded the allegations of conspiracy and 0th- writing . . . and warn affected employees in writer wrongs imputed to Aetna even in Breland, and he ing...
...No one asks the insurers to reveal everything they know...
...Unlike X, however, he claims that his conduct is morally right-even though, unlike X, he is not a “stranger” to Z since the insurer profits from the consumer, and even though, unlike X, he in essence enabled Y to lay the trip wire by underwriting the effort...
...John Conyers Jr...
...The need for a recall became apparent in late May 1974, when Robins disclosed that four women who had become pregnant while wearing the Dalkon Shield had suffered rare fatal septic infected miscarriages...
...Significantly, Kelly noted that these alleged acts had occurred, “during the period of representation by [Law Firm]”-that is, during the period Aetna controlled the law firm’s representation of Robins...
...Robins did not test the Dalkon Shield for safety until after it began to sell the device worldwide...
...Forrest replaced him with what is now McGuire, Woods, Battle & Boothe, Virginia’s second-largest law firm, which would coordinate as many as 150 Dalkon Shield defense law firms around the country...
...that a British study was “showing greater bacteria buildup with DS [Dalkon Shield...
...The American Psychiatric Association’s “Guidelines on Confidentiality’’ warn that “psychiatrists today may be held responsible for protecting parties whom their patients seriously threaten, particularly when these other persons have been specifically identified...
...He rephrased his concern in April 1984 in handwritten notes in which he spoke of the “[dlilemma of insurance company which knows that insured has danger of defective product...
...Now imagine a house bordering an alley...
...But Aetna itself could not have devised a more brilliant self-rescue than Breland...
...manufacturers: Each and every one who obtains inIn a brief filed as part of an unsuccessful appeal to formation “which reasonably supports the conclusion overturn the settlement by 500 of the Dalkon Shield that such product . . . contains a defect which could victims involuntarily corralled by Breland, two plain- create a substantial product hazard” must inform the tiffs’ lawyers cut to the heart of the matter: “If one CPSC immediately...
...THE DANGERS INSURANCE COMPANIES HIDE Insurers don’t have to tell you when they know you’re about to be killed by Morton Mintz Imagine a manufacturer who discovers that one of his products has a defect that is causing grave injuries to unsuspecting consumers...
...workers have been exposed to asbestos, and several hundred thousand of them are expected to die of asbestosinduced cancer over the next quarter-century...
...Court of Appeals for the Tenth Circuit said: “From 1975 to 1985, the law firm was responsible for the nationwide coordination of Company’s defense...
...If he doesn’t, the agency is emfollows Aetna’s arguments to their logical conclu- powered to compel him to do that which he had alsion,” they wrote, “an insurer such as Aetna cannot ready been morally bound to do...
...Had the “false declarations before the grand jury” suddenly been transformed into true declarations...
...Even repeated litigation arising from well-known and identical hazardous product models or services has not prompted the insurance industry to insist on elimination of possible dangers,” Nader wrote...
...Through McGuire, Woods, ACS in March 1975 clearly assured “complete control...
...A legal duty to disclose with regard to a product that the insurance company has covered would be contrary to the insurer’s statutory and contractual obligations today and place the insurer in a temble bind...
...Rob i ns ’s hoods Aetna became deeply involved in the Dalkon Shield episode 16 years ago in Wichita, Kansas, where the manufacturer, A. H. Robins, Company was the defendant in an early, seemingly routine personal injury trial...
...ACS is wholly owned by Aetna Life & Casualty Company, one of the world’s largest providers of insurance and financial services...
...As the nylon rotted, bacteria that penetrated the spaces between the filaments were wicked into the normally germ-free uterus, where they caused PID...
...More and more attention is being paid to increasing investment income through premium volume...
...The amount of the award was relatively small$75,000...
...be held liable for fraud, obstruction of justice, negli- In 1975, Senators Frank E. Moss and Warren G. gence, or any other tortious activities as long as it is Magnuson introduced a CPSC bill that would have acting as insurer at the time of its tortious activities...
...Brodeur found that insurers could have saved the lives of tens of thousands who fell victim to only one product, asbestos...
...This teasing hint drew strength in 1985, when the Justice Department began to investigate whether Robins had criminally obstructed justice...
...Meanwhile, the neighbors in the marketplace and the workplace have been shedding lots of blood...
...but through a quiet accretion of court rulings, and without congressional debate, this privileged position asserted by productliability insurers has evolved into national policy...
...That it coveted the Robins account is suggested by an internal memo warning that “unless we do something to safeguard ourselves, profitability of account will disappear...
...a convicted corporation had been a reality for nearly 13 years, for example...
...Upholding Kelly 3 to 0, the U.S...
...Please, gentlemen, give consideration to tracing down the victims and sparing them the agony that will surely be theirs...
...The claimants-most of them late November...
...In the memo, written four days before the company bought rights to the Dalkon Shield in June 1970, a Robins medical executive revealed that the developer of the device had admitted to him that he knew the pregnancy rate to be well over 1.1 percent...
...He cited an example: The National Highway Traffic Safety Agency (NHTSA) test-crashes cars equipped with dummies to find out how safe-or unsafe-they are, while insurers refuse to release the data on millions of cars that have crashed with real people in them...
...Since 1979, Reps...
...In four subpoenas, a federal grand jury in Wichita ordered Robins (“Company X’ or “Company” in public court papers because of the secrecy of grand jury proceedings) and McGuire, Woods (“Law Firm Y” or “Law Firm”) to produce specific records...
...As Ralph Nader put it in a 1987 article in the Suffolk Law Review, insurance companies “have become predominantly cash flow financial institutions...
...Even supposing that Aetna subsequently jacked up its premiums, it seems strange that profits on this scale could account for the annual renewals after 1974, when Aetna had to know that big trouble lay ahead...
...Aircraft...
...Kelly ruled that the privileges could not be invoked “as a result of the crime-fraud exception...
...Considering that a dangerous patient or client is usually only a threat to one person or a few people, and that just one needlessly hazardous product may injure tens of thousands of people, is it rational public policy to treat the insurer-customer relationship as sacrosanct...
...Aetna knew this...
...Had Company X been found to be not provably guilty of any crimes...
...Why not a federal sunshine in litigation act...
...Aetna’s headquarters in Hartford, Connecticut, are less than 20 miles from a nuclear plant...
...Its “Sunshine in Litigation Act,” which easily refuse, though some plaintiff’s lawyers took effect July 1, says that any portion of an agreeclaimed “collusion” contaminated the settlement...
...The possibility was considered...
...However admirable, such exceptions provide no clue as to how many deaths and injuries insurers could have prevented through the years, or could prevent from now on, by dedicating themselves to loss prevention and by disclosing their knowledge of dangerous defects in products and needless workplace hazards...
...Toward the end of two pages of handwritten notes, Joseph E. Fazio, an ACS manager and claims attorney, made a startling reference to Forrest: “Purging files to be sure that for future they will not be as vulnerable...
...In an impressive example of local initiative, Aetna reached an amicable settlement, as no one had California enacted a close copy of Conyers-Miller in doubted they would...
...I can’t see anything beyond stupidity,” said NICO’s Hunter...
...The policy of delay and obfuscation practiced by [Robins’s] lawyers in courts throughout this country has made it possible for you and . . . Aetna Casualty and Surety Company, to delay the payment of these claims for such a long period that the interest you earn in the interim covers the cost of these cases,” the judge said...
...Ron Wyden, who has been sponsoring the proposal for years, sees a good chance of enactment in the new session...
...A development of supreme importance followed Howard J. Tatum...
...Negotiations &ailed to settle the dispute, so Robins sued Aetna...
...Robins’s IUD was the only one with a retrieval string that was not only made entirely of nylon, but also consisted of hundreds of tiny filaments encased in a sheath...
...From 1975 to 1985, Aetna had “complete control” of this litigation...
Vol. 23 • January 1991 • No. 1
