Pharmaceutical Failure to Warn…. On Facebook?

By on March 13, 2014

The Facebook page of Switzerland-based drug maker, IBSA Institut Biochimique S.A. (“IBSA”), appeared innocent enough:

If you have just been diagnosed with hypothyroidism or are having difficulty controlling your levothyroxine blood levels, talk to your doctor about prescription Tirosint, a unique liquid gel cap form of levothyroxine.

In an untitled letter to the drug maker on February 28, 2014, FDA advised IBSA that its Facebook webpage was false or misleading because it made representations about the efficacy of Tirosint, but failed to communicate any risk information associated with its use and omitted material facts regarding Tirosint’s FDA-approved indications.

FDA advised IBSA that the webpage misbranded Tirosint within the meaning of the Federal Food, Drug and Cosmetic Act (“FDCA”) and made its distribution violative of federal regulation. Specifically, FDA referenced 21 U.S.C. 352(a), (n); 321(n); 331(a); and 21 CFR 202.1(e)(5). Further, FDA reminded the company that Tirosint is associated with a number of serious risks and includes a Boxed Warning indicating that Tirosint should not be used for the treatment of obesity or for weight loss, among other potential risks associated with the use of this medication.  FDA also alleged that IBSA had failed to disclose important limitations on the approved indications of the product, increasing the risk that the product would be used in patients with conditions that were expressly excluded from the approved indications for use.

FDA and the regulated community has been grappling for some time over what might constitute the improvident use of social media. Unquestionably, a pharmaceutical company will run afoul of FDA if product risks are not disclosed. In this instance, FDA noted that IBSA had failed to disclose any (emphasis FDA’s) of the risks associated with the product’s use.

FDA directed IBSA to immediately cease activity violative of the Act and to submit a plan for discontinuing the use of all non-compliant promotional materials.

Despite the public attention given to IBSA’s ill-advised social media posting, the pharmaceutical industry and the medical community have made significant strides in recent years to ensure that physicians are receiving full and complete information concerning the medications they are prescribing for their patients.

One enormous step in the right direction is Sermo, an online community for physicians founded in 2006. Sermo was originally founded by doctors, for doctors. Originally imagined as an adverse effect reporting system without industry influence, Sermo is now a vibrant place where physicians can post observations and questions about clinical issues and hear other doctors’ opinions.

In just a few short years, Sermo has grown to include 200,000 licensed physicians. Some of the heaviest users of Sermo are older physicians, which is somewhat surprising in that the youngest members of a professional group typically adopt technologies first.

Increasingly, the major pharmaceutical companies take the view that social media and other on-line resources can provide an important tool in ensuring that its products are used safely, effectively and appropriately.

At a public hearing conducted by FDA in 2009, Dr. Freda Lewis-Hall, the Chief Medical Officer for Pfizer, reported that the average physician spends about eight hours a week using the internet for professional purposes; that 87% of physicians are interacting with drug and device companies online; and that 60% of physicians are interested in participating in online communities, and that’s when taking security measures like using a VPN such as xtrapc online could be really helpful for protection of the personal data in these online communities. She opined that the majority of physicians want to engage with health care companies in the social media space to obtain drug information.  These physician participation statistics are probably even more striking today.

Pfizer and other companies now communicate with physicians through social media, particularly through collaboration with Sermo. Dr. Lewis-Hall describes Sermo as the online physician’s lounge where informal but highly valuable consults take place.

On January 13, 2014, FDA issued a portion of its long-awaited social media guidance titled “Fulfilling Regulatory Requirements for Postmarketing Submissions of Interactive Promotional Media for Prescription Human and Animal Drugs and Biologics“.  Although industry is likely to seek clarification and revision on certain of the rules-of-the-road discussed in the draft, some of the basic concepts expressed are:

1. a company will not be deemed responsible for visitor posts on company-run social media (blogs, chat rooms, message boards, etc) so long as the visitor has no affiliation with the company and the company has no influence over the user-generated content;

2. a company is responsible for content generated by an agent or employee.

3. every advertisement on social media must contain a “fair balance” of the risks and benefits of a drug product and complete disclosure of the product’s approved indications for use.  Query. Could a Twitter entry with its 140-character limit ever meet this standard?  FDA is supposed to provide further guidance on this concern down the line.

4. marketing material postmarketing submission requirements must be complied with for any site where the company “exerts influence…….even if the influence is limited in scope. For example, if the firm collaborates on or has editorial, preview, or review privilege over the content provided, then it is responsible for that content.”  However, if the company only provides financial support to the site, and its influence is otherwise limited, there is not a reporting requirement.

The issue of “exerting influence” is problematic and, despite some helpful hypotheticals in the guidance, ambiguous.  Big Pharma has an interest, perhaps even a responsibility, to be involved in e-media forums where the scientific and medical community is seeking interactive information on pharmaceutical products.  However, the draft guidance arguably produces a push-pull reaction.  Do we engage or, by engaging, do we run the risk of having an added regulatory burden by having to file FDA reports concerning participation on the site?  Some clarity for the industry is warranted to avoid over and under-reporting.

As reflected in this discussion, as all of us – consumers and companies – continue to move forward in a world increasingly dominated by social media, challenges and opportunities abound. On the one hand, there are the missteps, as we see in the case of IBSA. On the other hand, the pharmaceutical industry is moving ahead of the curve to use social media to ensure that its prescribing physicians are well-educated and their patients provided the best possible care. We hope that the final social media guidance facilitates, rather than impedes, this process.

The author acknowledges the important contributions made to this article by Amy K. Dow, a partner at Epstein Becker Green, and Natasha F. Thoren, an associate

Filed under AskRx, Dr. Freda Lewis-Hall, Facebook, fair balance, FDA, Fulfilling Regulatory Requirements for Postmarketing Submissions of Interactive Promotional Media fo, IBSA Institut Biochimique S.A, Pharmaceutical & Medical Device, Sermo, social media, social media guidance, Tirosint, Twitter Tagged with

Best Practices For Avoiding Data Breach Liability

By on March 10, 2014

Articles concerning cyber-security and data breach typically fall into two general categories: those discussing how to prevent a data breach from occurring and those discussing how to respond when one occurs. As I discussed in my earlier blog post, smart players in the healthcare industry are proactive in seeking to prevent data breaches from occurring before hackers strike. https://www.sapphire.net/ offers comprehensive solutions architecture, design for monitoring activity, and more sophisticated attacks. If you want your business to do well, indexsy.com recommends to hire a web designing company for improved results.

In an excellent article titled, “Best Practices for Avoiding Data Breach Liability,” which was published in New England In-House, Patrick J. O’Toole, Jr. and Corey M. Dennis discuss best practices for both breach prevention and breach response. O’Toole is a partner at the Weil, Gotshal & Manges. Dennis is the U.S. Privacy Officer and in-house counsel at Pharmaceutical Product Development, LLC (PPD). (The article was later re-published in The Daily Record and Minnesota Lawyer.)

Although the technical aspects of cyber-security are complex and daunting to the layperson, O’Toole and Dennis offer common sense advice to minimize the likelihood of a data breach. Their suggestions include:

• Conducting an inventory of the company’s sensitive data and identifying all custodians and data storage locations. Simply knowing who has access to the data and where it is located is an important first step. If you want to have better security on your website, then you should consider switching to knownhost’s dedicated hosting plans.

• Making sure that the company is aware of all state and federal data security and breach notification laws that apply to its business operations.

• Regularly reviewing and updating corporate information security policies.

• Implementing security measures with regard to computer systems (e.g., passwords, encryption, firewalls, anti-virus software). However, physical security measures (e.g., locked cabinets, shredders) can be just as important to safeguarding sensitive data and personal information. Visit https://www.fortinet.com/products/fortisoar to get more details on network security.

• Implementing best practices and training employees. O’Toole and Dennis point out that data breaches may result from basic employee negligence, such as leaving a briefcase containing sensitive information in a public area. An interim CIO can help companies develop and implement cybersecurity best practices to keep business data and networks safe and secure.

• Ensuring compliance of vendors with whom sensitive information is shared. Some state and federal laws require companies to ensure that their vendors maintain certain data security measures.

• Conducting periodic attorney-directed data security assessments. In conducting these assessments, O’Toole and Dennis suggest that efforts be made to preserve the attorney-client privilege applicable to any assessment-related reports.

• Considering cyber liability insurance. Most cyber insurance policies today cover the costs of forensic investigations, notification of and credit monitoring for affected individuals, regulatory compliance, and lawsuit defense and indemnification. We recently had a lot of issues with our GDPR and got help from Teamwork IMS who were very helpful and got everything fixed up nicely so give them a call if you have GDPR woes.

Corey Dennis, the co-author of this article, recently spoke on healthcare breach response and preparation on a panel at the International Association of Privacy Professionals (IAPP) Global Summit 2014. During this session, entitled “Preventing and Responding to Data Breaches after the Omnibus Rule,” he discussed several points, including the steps necessary to avoid breaches and the legal analysis to conduct when determining whether a breach must be reported under HIPAA compliance.

The costs associated with data breaches—including financial costs, legal liability, and reputational loss—have become increasingly apparent. The TJX Companies breach in 2007 resulted in 94 million customer accounts being compromised and a multi-billion dollar loss to the company, including fines, legal fees, notification expenses, and brand impairment.

The recent Target breach, which affected 110 million customers, could have similar repercussions, and has already lead to dozens of class action lawsuits, along with scrutiny from both Congress and regulators. In an age where nearly every major organization faces data security incidents, and large-scale breaches regularly make headlines, implementing the best practices above such as Couchbase is essential for all companies.

Filed under Best Practices for Avoiding Data Breach Liability, Corey M. Dennis, cyber-security, cybersecurity, Cybersecurity Breach, data breach liability, HIPAA, International Association of Privacy Professionals (IAPP) Global Summit 2014, Patrick J. O, PPD, Target data breach, TJX Companies data breach, Toole Tagged with ,

U.S. Bankruptcy Court Exposes Plaintiff Scheme To Suppress Asbestos Exposure Evidence

By on March 3, 2014

On January 10, 2014, the Hon. George R. Hodges, United States Bankruptcy Court for the Western District of North Carolina, handed down a decision that promises to be a “game changer” for asbestos manufacturers facing potentially crushing mesothelioma death claims. Top Bloomberg BNA Toxics Law reporter, Perry Cooper, discussed the decision and its potential ramifications in her recent article titled, “Sides Fiercely Divided Over Impact of Garlock Asbestos Bankruptcy Court Order” (2/26/14).

The issue before the Bankruptcy Court was how to determine a reasonable and reliable estimate of Garlock Sealing Technologies, LLC’s (“Garlock”) liability for present and future mesothelioma claims. The court rejected the asbestos claimants’ $1.3 billion liability estimate in favor of Garlock’s $125 million estimate, an order of magnitude less.  Why did it do so?

The court initially determined that Garlock’s products resulted in a relatively low exposure to asbestos to only a limited population and that its legal responsibility for causing mesothelioma was relatively de minimis. During the early phase of the asbestos litigation in the 1980’s – when Garlock was generally named in complaints naming 20-50 more defendants – Garlock was very successful in settling its cases.

However, things changed for the worse by the early 2000’s, by which time large thermal insulation defendants had filed for bankruptcy and were no longer participants in the tort system. As the focus of plaintiffs’ attention turned to Garlock, as one of the remaining solvent defendants, evidence of plaintiffs’ exposure to other asbestos products often disappeared. As a result, plaintiffs’ law firms used their control over the evidence to drive up the settlements demanded of Garlock.

The crux of the court’s determination was that plaintiffs routinely denied exposure to other [bankrupt] companies’ asbestos products in pre-trial discovery and at trial, while often shortly thereafter filing multiple claims under oath with asbestos bankruptcy trusts. The “double-dipping” described by Judge Hodges where, for example, a plaintiff denies any exposure to insulation products, but after the case is settled, files 23 Trust claims, appears to be a widespread practice.

This conduct violates court rules and should be severely sanctioned if and when it comes to light. This decision shines a bright light on unethical practices in the plaintiff asbestos bar that may be a game changer particularly for manufacturers whose legal responsibility for causing mesothelioma, like Garlock, is relatively de minimis. It is the small players who are being pummeled by the lack of disclosure provided in these cases who should be seeking relief.

Garlock was able to demonstrate that in cases where it was able to obtain evidence of filed Trust claims and use them at trial, it generally had a successful trial result. In contrast, the thermal insulation defendants’ exodus from the tort system and the subsequent “disappearance” of evidence of exposure to their products, necessitated a sea change in Garlock’s negotiating and trial strategy.

Garlock demonstrated that the availability of comprehensive asbestos exposure information was often the difference between winning and losing at trial. If plaintiffs’ suppression of exposure evidence occurred in litigation against other defendants besides Garlock, it has likely resulted in higher asbestos settlements and judgments by as much as several hundred millions of dollars. At the same time, the contingency fees harvested by plaintiff lawyers in the asbestos litigation are staggering. But we should not assume that every plaintiff law firm improperly withholds exposure evidence. Cases should be examined on a case-by-case basis.

However, asbestos manufacturers are likely to bring increasing pressure on asbestos courts to compel plaintiffs to produce comprehensive evidence of asbestos exposure. The cookie-cutter management of large asbestos dockets often sweeps the legitimate concerns of asbestos defendants, particularly the smaller players, under the rug.

Trial courts should be encouraged to come up with creative means of ensuring judicial fairness. Depending upon the jurisdiction, this may involve having the trial court retain jurisdiction to reduce a verdict or settlement to account for post-verdict claims brought against other entities, who were not identified in the trial court. Alternatively, plaintiffs should be required to file Trust claims forms before trial or be judicially estopped from doing so after settlement.

RICO claims have been successfully brought against plaintiff law firms for fraud in the past. Judge Hodges’ decision, and the underlying evidence upon which it is based, provides Garlock with strong ammunition to pursue RICO claims. Additionally, the law firms identified by Judge Hodges may be subject to increasing scrutiny by the asbestos courts in the jurisdictions where they practice. Like the asbestos defendants of yesteryear, these well-heeled plaintiff law firms make for deep-pocketed defendants.
 

Filed under Asbestos, Asbestos Bankruptcy Trust, asbestos fraud, Bloomberg BNA Toxics Law Reporter, Cooper', exposure', Garlock, Garlock Asbestos Bankruptcy Court Order, Hon. George R. Hodges, Mesothelioma, RICO Tagged with

Effective Use Of Rhetorical Questions In Jury Summation

By on February 26, 2014

The art of persuasion comes in many forms. Recently, we wrote an article about the plaintiff bar’s embrace of Reptile theory. The Reptile theory asserts that you can prevail at trial by speaking to, and scaring, the primitive part of jurors’ brains. However, good trial counsel can effectively utilize more traditional forms of persuasion in their summations. Trial counsel do not need to bring reptilian logic into the courtroom when they can rely on oratorical techniques that have effectively swayed audiences for centuries. Just consider Shakespeare’s use of rhetorical questions in Marc Anthony’s funeral oration in Julius Caesar, which turned mourners into an angry mob.

In an excellent article titled, “Case for the Rhetorical Question as a Summation Technique,” which appeared in the New York Law Journal on February 26, 2014, plaintiff lawyers Ben Rubinowitz and Evan Torgan demonstrate how the use of rhetorical questions can be effectively used during jury summation to reiterate and reinforce important parts of the plaintiff’s case. As the authors discuss, the use of rhetorical questions can be used with equal effectiveness by the defense, which of course is the raison d’être of this blog.

Rubinowitz and Torgan emphasize that trial counsel should always consider the language in the New York Pattern Jury Instructions before devising a rhetorical line of questions for use in summation. These instructions not only serve as a guide for the jury, but allows trial attorneys to create powerful arguments that fit neatly into those instructions.

In their article, the authors demonstrate the use of rhetorical questions: (1) when the defendant fails to call its expert examining physician to the witness stand; (2) when a party fails to call an important witness; or (3) in the case of spoliation of evidence.

For example,  following is an illustation of their use of rhetorical questions during summation where key evidence has been lost or destroyed:

Ladies and gentlemen, there is one piece of evidence that is more important than any other piece of evidence in this case. You heard about that piece of evidence from the beginning of this case – from the opening statements forward. And you now know how important that piece of evidence is. You know that it would answer the most important question in this case.  So ask yourselves, why wasn’t it produced? Why haven’t you been allowed to see that [piece of evidence]?  Where is it? And why has it been kept from you? The answer is clear. It wasn’t produced for one reason and only one reason. If it was produced it would have made plaintiff’s claims meaningless. If it was produced it would have destroyed plaintiff’s arguments. And if it was produced it would have destroyed his case!

The hallmark of Rubinowitz/Torgan articles on trial practice is their effectiveness in providing the “buildup” or “setup” that practitioners can use in various phases of trial practice. Rubinowitz and Torgan teach us that it is not only springing the trap that matters, but the patient preparation that makes springing the trap all the more delicious!  Shakespeare would be proud.

Filed under Ben Rubinowitz and Evan Torgan, Case for the Rhetorical Question as a Summation Technique, jury summation, New York Law Journal, rhetorical questions, Trial Practice Tagged with

Preserving The Attorney-Client Privilege For In-House Counsel

By on February 12, 2014

Courts impose on corporate entities the burden of demonstrating that communications and documents shared with in-house counsel are protected by the attorney-client privilege. When companies cannot satisfy this burden, courts have ordered production of emails involving legal counsel, compliance logs and internal audits. As a result of these court orders, companies have been forced to produce, often to their detriment in litigation, confidential attorney-client communications.

Courts examine evidence submitted in support of a privilege assertion rigorously. If there is any indication that an overly broad privilege is being asserted or that there is some perceived abuse of the privilege to protect “business” documents, disclosure will likely be required. As will be discussed, Merck was required to go to extraordinary lengths to protect the privilege some years ago in the Vioxx MDL.

In an article titled, “Preserving the Attorney-Client Privilege for In-House Counsel,” published in AHLA Connections (December 2013), Thomas E. Zeno and Emily E. Root of Squire Sanders, provide practical advice for in-house counsel and their clients to increase the likelihood of preserving the privilege.

The authors’ tips may be summarized as follows:

1. Clients should make a clear request for legal advice. Although an email that begins, “Joe, I’d like your legal advice on the following situation…” may sound stilted or overly formal, this communication signals to a reviewing court that the client is requesting legal advice.
In-house counsel should provide a clear link between their legal advice and its legal justification.

For example, if it is the company’s argument that the primary purpose of a communication was to obtain legal advice, the assertion of the privilege will be strengthened if the in-house lawyer’s revision to draft advertising is accompanied by a statement such as “To comply with FDA rules…”.

2. Avoid sending mixed purpose emails. If in-house counsel is providing both non-privileged business advice on a particular transaction and legal advice, the two should be kept separate. Some courts have taken the position that corporations that choose to communicate with legal and non-legal staff simultaneously should recognize that the privilege may not attach to such mixed purpose communications.

3. The company should give consideration to email formatting. If an employee sending an email to in-house counsel is seeking legal advice, it is not helpful if multiple non-lawyer recipients are listed in the “To” field. If non-lawyers are receiving a copy of a request for legal advice so that they know that the request was made, only the lawyers should be listed in the “To” field. Although this may seem like a minor point, these issues can take on a life of their own during heated motion practice before a federal magistrate judge.

4. Courts reviewing privilege claims often review the job descriptions for the staffers involved. For non-legal employees, it may be helpful to provide a discussion in the job description about what kind of legal information or advice they may have to be kept apprised of to avoid the claim that the non-legal employee’s receipt of legal advice was not necessary. In the case of counsel, the job description should clearly define the attorney’s business-related functions.

5. In-house counsel’s advice should not be broadly disseminated. Management should provide a separate communication to company employees to put into effect the operational changes recommended by counsel rather than circulate the lawyer’s work product.

The most important observation made by Zeno and Root is that courts’ different treatment of in-house counsel stems largely from their multiple roles within their organizations, not all of which involve the rendering of legal advice.

They write, in pertinent part:

Across the health care industry, health systems, physician groups, and pharmaceutical, medical device, and life sciences companies are adopting new approaches to risk management. In response to pressures like self-disclosure obligations and the specter of False Claims Act investigations, legal personnel are becoming more integrated into these organizations. Increasingly, lawyers are involved in and advising on day-to-day operations much more than five or ten years ago.

Health care organizations also are facing tightening budgets, and many are trying to control costs by having in-house counsel handle matters that previously would have been referred to outside counsel. These multiple roles exact a cost on the privilege. When organizations assert the attorney-client privilege over communications with lawyers acting in these expanded roles, they seek to shield documents and communications that generally have been available to the government through subpoena or to civil litigants through discovery.

Issues of privilege were the subject of prolonged and heated discovery proceedings in In re Vioxx Prod. Liability Litig., MDL No. 1657, which was litigated in the United States District Court for the Eastern District of Louisiana during the mid-2000’s. 

In that matter, the court expressed the concern that businesses would seek to immunize internal communications from discovery by placing legal counsel in strategic corporate positions and funneling documents through counsel and thereby defeating plaintiffs’ legitimate discovery needs. In the Vioxx MDL, Judge Fallon bemoaned that “this discovery dispute has dragged on for over a year and, at times, has seemed hopelessly endless. Although Merck has produced over two million documents in this MDL, the company has also asserted attorney-client privilege as to approximately 30,000 documents which it contends need not be produced.”

Merck argued that because the drug industry is so extensively regulated by the FDA, virtually everything a member of the industry does carries potential legal ramifications vis-à-vis government regulators. The MDL court appreciated how certain functions performed by counsel, such as commenting upon editing television ads and other promotional materials could, in fact, be legal advice within the context of the drug industry. Despite this understanding, the MDL court was not willing to concede that all of the documents Merck had labeled privileged should be afforded protection.

As reflected in the court’s ruling, some of Merck’s privilege assertions met with more success than others. For example, under its “pervasive regulation” theory, Merck convincingly argued that the breadth and scope of FDA regulation made broad legal involvement in business operations a necessity.

However, Merck met with less success in making its “collaborative effort” theory.  In arguing  “collaborative effort”, Merck contended that emails addressed to multiple legal and non-legal people within the company were attorney-client protected despite a distribution pattern that indicated that these communications serve both legal and non-legal purposes.

The “collaborative effort” argument did not succeed because the court recognized that in every company all corporate departments are part of a “collaborative effort.” According to the court,

“To say that wide dissemination to non-lawyers within a company for their technical input is primarily legal makes no more sense than saying that communicating with in-house counsel is primarily scientific because scientific validity is at the heart of FDA regulations and, as a consequence, of what lawyers must be concerned about in public statements, advertisements and labels.”

More broadly, if the courts were to accept the “collaborative effort” argument, the MDL court believed that it would effectively immunize from discovery all such internal communications within the drug industry and preclude plaintiffs from discovering communications potentially vital to their claims of knowledge, failure to warn and intentional misrepresentation.

In-house lawyers are likely to become increasingly entwined within the fabric of their clients’ business. At the same time, it is clear that the in-house attorney-client privilege is under attack.   Although there is no fool-proof method of protecting the privilege, Zeno and Root’s article offers valuable guidance if a contested privilege issue is submitted to the court for resolution. 

 

Filed under collaborative effort, In re Vioxx Prod. Liability Litig, pervasive regulation, Privilege, Vioxx Litigation, Vioxx MDL Tagged with

Governor Cuomo’s Plan For Disaster Preparedness

By on February 5, 2014

At an NYLCVEF Eco-Partners Breakfast conducted at the offices of the Durst Organization on January 28, 2014, Jamie Rubin, the Director of the Governor Cuomo’s Office of Storm Recovery New York Rising Community Reconstruction Program, outlined the State’s plans for protecting critical systems and infrastructure.  Ably assisting Rubin at the presentation was New York Rising Policy Director, Kate Dineen.

A key challenge for New York is that much of the ciritical infrastructure–mass transit and electric systems in particular–is located underground where it is vulnerable to seawater.  In Upstate and on Long Island, communities and infrastructure are built along coastline or  adjacent to waterways, making these these communities vulnerable as well.  According to Rubin, the State has committed $17 billion dollars toward the protection of New York by making critical changes to infrastructure, transportation networks, energy supply, coastal protection, weather warning systems and emergency management.  Rubin described the Governor’s  resiliency strategy as holistic.  A detailed description of the State’s strategy can be found on the Office of Storm Recovery website.

 Some of the hallmarks of the program are:

  1. building an advanced meso-net weather detection system that will have 125 interconnected weather stations to provide real-time warnings of local extreme weather and flood conditions;
  2. building new natural infrastructure to protect coastline and provide advanced flood control for inland waterways. An important component of this project will be Spring Creek, an inlet of Jamaica Bay in Queens, where the State plans to build a self-sustaining system of natural barriers to will protect local homeowners and mitigate storm damage;
  3. replacing and repairing 104 older bridges at risk for future flooding;
  4. creating "microgrids" (independent community-based electric distribution systems) throughout the State; and
  5. creating a Strategic Fuel Reserve and gas station back-up power on critical routes within NY.

One environmental challenge that remains unfunded is stormwater reduction.  In the aftermath of Hurricane Sandy, uptate communities suffered massive stormwater damage.  Rubin estimated that tens of billions of dollars, not available now, would be required to address stormwater reduction.

One component of the Governor’s response to Hurricane Sandy was the Recreate New York Smart Home Buyout Program which, according to news reports, enjoyed a 99% participation rate in storm-shattered Oakwood Beach in Staten Island, involving some 418 parcels.The homes in Oakwood Beach will be demolished and "returned to Mother Nature", according to Barbara Brancaccio, a State spokesperson.   

Rubin did not believe that the State’s home buy-out program in locales like Oakwood Beach would create a "moral hazard".  First, he explained that only primary homes, not vacation homes, would be covered by the program.  Second, the buy-out contained a $750,000 cap based upon pre-storm valuations.  Finally, program recipients would have sustained substantial property damage.  All of these factors mitigated against the likelihood of anyone obtaining a windfall through participation in  the program.  Photographs depicting the horrific storm damage suffered in parts of Staten Island demonstrate the justification for buy-out relief, which is a tool designed both to assist homeowners and  prevent post-storm rebuilding in flood prone areas.. 

Filed under Climate Change

Stopping Health Care Hackers Before They Strike

By on January 27, 2014

The smart players in the health care industry are being pro-active in seeking to prevent data breaches from occurring before hackers strike. Once a security breach has occurred, even the best litigation team cannot put the genie back into the bottle. Learn more about managed detection and response (MDR) at their website here.

In the world of health care, data is going digital, devices are going mobile and technology is revolutionizing how health care is delivered. As health care organizations continue to digitalize their operations, they know to guard against typical risks such as lost laptops and thumbdrives. However, possibly unbeknownst to them, hackers may be looking for ways to infiltrate their networks to surreptitiously peruse confidential financial records and sensitive patient information. This is where having a cyber incident response system in place can prove useful to reduce the impact of a breach, look at this site for more information.

Cybersecurity breach may be the new toxic tort because a single breach can potentially affect the lives of thousands of people. Experts estimate that when electronic protected health information (“e-PHI”) is compromised in a cybersecurity breach, it can cost an average of $233 per patient record to clean up the problem. So many people are also being accused of computer crime now, as their use is now so huge, so it makes sense to research a computer crimes attorney so that you can use them when you need them.

There is a thicket of state and federal statutes that regulate the protection of e-PHI. Both the Health Insurance Portability and Accountability Act (“HIPAA”) and the Health Information Technology for Economic and Health Act (“HITECH”) impose obligations on health care entities in the cyber security arena.

Significantly, there has been increased scrutiny of data breaches by the Office of Civil Rights (“OCR”) at the Department of Health and Human Services, which generally responds to data breaches by aggressive HIPAA enforcement. Recent amendments to the HIPAA breach notification rules require the health care industry to increase breach reporting, which will likely result in increased enforcement for non-compliance.

In a recent article in Law360 titled, “A Framework for Beating Health Care Hackers,” my colleague Alaap Shah observed that cyber risk analysis is key in preventing emerging cyber threats. “Hackers benefit when their activity goes undetected. Auditing helps to identify and assess system vulnerabilities. Using audit logs and tracking capabilities effectively can help organizations safeguard their systems from intrusion by hackers.”

Shah notes that an audit control framework exists under the HIPAA rules, which “require entities to implement hardware, software, and/or procedural mechanisms that record and examine activity in information systems that contain or use e-PHI.” Standards developed by the National Institute of Standards and Technology (“NIST”) can help organizations detect unauthorized activity within systems. Gaining this insight is necessary in identifying effective risk management solutions and strategies.

As health companies continue to avail themselves of 21st century digital technologies, security has naturally become a growth area within these organizations’ operations and corporate executives are becoming increasingly involved in the management of privacy concerns.  As such, the responsibility for protection against hacking has stretched beyond its traditional purview within the IT department and into the highest levels of the executive suite.

To avoid the cost of data breach recovery with all of the attendant adverse publicity and possible regulatory sanctions, health care companies are utilizing Data Center colocation services and the NIST cyber security framework to implement effective controls to identify and monitor e-PHI risk.

Filed under Cybersecurity Breach

Environmentalists Support Fracking But With Important Reservations

By on January 24, 2014

It is necessary that natural gas be substituted for coal and oil as an energy source if the world is to have any chance of avoiding runaway greenhouse gas (“GHG”) emissions, particularly from the developing world.

At present, it is unrealistic to expect renewable energy sources (solar, wind and geothermal) to serve as a foundation for national energy policy. In the United States, even with the best use of conservation, energy efficiency and renewables, the combination of these various “alternatives” will not become a substitute for fossil fuels for a very long time.

In a thoughtful article in the New York Law Journal on January 2, 2014, titled  “Countries Approach Fracking With Interest and Caution,” Stephen L. Kass, makes the case that natural gas from hydraulic fracturing should be an important component of a comprehensive energy strategy, both in the United States and abroad.  According to Kass, fracking is attractive to: (1) economists seeking to stimulate development; (2) national security officials seeking independence from unreliable oil suppliers; and (3) environmentalists who seek to avoid runaway GHG emissions, particularly from developing countries.

In the United States, fracking now accounts for a staggering 25% of domestic natural gas (a figure expected to rise to 50% by 2035). In addition to lowering energy costs, according to Kass, fracking is widely credited with reducing U.S. “carbon intensity” and GHG emissions.

Fracking places the environmental community between the proverbial rock and a hard place. On the one hand, environmentalists recognize that fracking offers enormous environmental benefits in terms of reduced GHGs. On the other hand, environmentalists continue to be concerned that fracking fluids may contaminate precious water sheds.

Therefore, it is the goal of the environmental community that the amount of water used in fracking be minimized through recycling, that double-walled drill shafts and other controls be effectively utilized to minimize fugitive methane releases, and that waste fluids be adequately treated on-site before being recycled, discharged to water treatment plants or re-injected. The oil and gas industry’s refusal to disclose the composition of its fracking fluids has become an unnecessary distraction from these key environmental concerns.

In the long run, environmental concerns are likely to be largely addressed by increased and more effective regulation and by self-policing by industry. From the standpoint of providing an inexpensive fuel to tens of millions of American homeowners, the stakes are simply too high for environmentalists, who support fracking with these reservations, to concede defeat. As industry continues to demonstrate that fracking can be performed in a safe and environmentally sound manner, opposition to the practice will most likely diminish.
 

Filed under Fracking, geothermal, GHG, greenhouse gas emissions, Hydraulic Fracturing, Oil & Gas, renewable energy sources, solar, Stephen L. Kass, substituting natural gas for coal and oil, wind Tagged with

NY High Court Opts Not To Expand Liability For Health Data Confidentiality Breach

By on January 21, 2014

The New York Court of Appeals ruling that came down last week in Doe v. Guthrie Clinic , 2014 NY Slip Op 00138 (Court of Appeals 1/9/14), should prove helpful in evaluating the liability of medical corporations in cases involving the disclosure of confidential patient information where the breach of confidentiality is unrelated to the patient’s treatment. In Guthrie Clinic, a nurse at the clinic treating the plaintiff for sexually transmitted disease recognized the plaintiff as the boyfriend of her sister-in-law, prompting the nurse to send her sister-in-law a series of text messages concerning the boyfriend’s medical condition (i.e. his STD).  The ruling came in response to the certification of a question to the New York Court of Appeals from the Second Circuit, which had earlier disposed of other of plaintiff’s claims. 

The key holding in the Court of Appeals decision is that liability did not extend to the medical corporation because its “duty of safekeeping a patient’s confidential medical information is limited to those risks that are reasonably foreseeable and to actions within the scope of employment”.  The Court analogized the facts here to those in N.X. v. Cabrini Med. Ctr, 739 N.Y.S.2d 348, a 2002 case where the defendant hospital was not found strictly liable for a surgical resident’s sexual assault on a sedated patient.

The Court reaffirmed the rule that “under the doctrine of respondeat superior, an employer may be vicariously liable for the tortious acts of its employees only if those acts were committed in the furtherance of the employer’s business and within the scope of employment”.  Under both the facts of Cabrini and Guthrie, the tortious actions of the employee were not reasonably foeseeable.

In a decision handed down on March 25, 2013, the Second Circuit dismissed that part of plaintiff’s claim seeking to hold the medical corporation liable under a theory of respondeat superior. The Second Circuit determined that the nurse’s motive in disclosing confidential patient information was entirely personal. The Court certified to the New York Court of Appeals the question whether NY recognized a common law right of action for breach of the fiduciary duty of confidentiality against medical corporations under the facts presented.

The dissent to the majority opinion of the Court of Appeals argued that a patient’s disclosure of confidential information is necessary for treatment and that the patient has no control over what happens to this information.  The dissent argued further that, just as in the Cabrini case scenario, involving a sedated patient laying helplessly in her hospital bed, a medical corporation should be held to an independent duty to prevent an employee from acting outside the scope of his employment and  harming the patient.

In response to the dissent, the majority rejoined that if the dissent fouind the majoritiy holding too “narrow”, the “dissent’s reasoning is flawed for the opposite reason; it is too broad.”  The Court was clearly unwilling to impose a strict liability standard for the release of confidential medical information.

The Court of Appeals decision is well-reasoned and correct, but issues over alleged breach of patient confidentiality are sure to be raised again.  As the dissent noted, “technological advances have made it possible to collect and house patient data in ways accessible to a patient’s doctor and other health care provider staff.  Computers and cellular devices have transformed medical record keeping and health care service provision, making access to such data fast and easy, plus now, healthcare providers can implement hcc risk adjustment systems, which assigns a risk factor score to them based on the individual’s health conditions and demographics.”  Confidential patient information is increasingly being transmitted via web and mobile devices–tablets and smartphones.

Issues concerning what measures are reasonably required to keep these networks secure will no doubt be raised in the future.

Filed under breach of fiduciary duty, cyber-security, Doe v. Guthrie Clinic, Health Care, HIPAA, medical corporation liability, N.X. v. Cabrini Med. Ctr, new york court of appeals, patient confidentiality, reasonably foreseeable, respondeat superior, Second Circuit, sexually transmitted disease Tagged with

The Success Of The SDNY Mediation Program

By on January 17, 2014

The Mediation Program of the SDNY provides litigants in commercial litigation with an opportunity, generally early in their litigation, to resolve their disputes without going through the expense of full-blown discovery and the uncertainty of trial. 

As reflected in the Mediation Program’s recently released Annual Report , individual judges referred 113 cases in general civil litigation (which does not include employment and civil rights claims).  Of that number, a successful resolution in mediation came about in 60% of the cases referred, an increase from 53% in 2012.  Considering the determination with which business disputes are litigated, a 60% successful rate is a remarkable achievement. 

Local Civil Rule 83.9, effective January 1, 2014, and other actions taken by the Court, have resulted in a more flexible, streamlined operation.  For example, in 2013, mediations could be conducted in the mediator’s law office for the first time. In certain circumstances, conducting the mediation in an office, rather than at the courthouse, may result in greater convenience to the parties and their clients. It certainly makes the mediator’s job easier. 

Rebecca Price, the Mediation Supervisor, has shared with the 396 pro bono mediators in the program some of the favorable feedback she has received from program participants.  Some comments from lawyers include the following:

“I think the mediator did a great job helping me where he presented me with
alternative strategies in going back with counter offers, and why they
should be higher rather than lower. Most of the numbers I presented were
fair, but the case had some problems and though I think my client should
have been offered more money – the final number was fair, and the employer
threw in a positive recommendation, something I’d never seen before. All in
all I felt it was a fair settlement and I learned from the mediator.”

“Given that opposing side had not responded to any attempts at negotiation
over several months, this was necessary and we accomplished in 3 hours what
we could not in several months.”

“The mediator and the Mediation Program were instrumental in settling the
case, which occurred the day after the second mediation session.”

“The mediator was very gracious with her time, and patient with the
parties. She was very helpful and her efforts are appreciated.”
 

Mediation can be particularly effective in resolving business disputes because counsel can structure an agreement that contains important business terms that, if the case proceeded to trial, would not necessarily come to the court’s or the jury’s attention.  The resolution of a business dispute can involve crafting precise terms, particularly when the parties have had a course of dealing over a long period of time.  The very best outcome in the mediation of a commercial dispute is one that satisfactorily resolves the matter and permits the parties’ business relationship to continue. 

Filed under ADR, civil litigation, Mediation, Mediation Program, Program', Rebecca Price, SDNY, SDNY Local Rule 83.9, SDNY Mediation Program 2013 Annual Report Tagged with

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