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Tenn. Compromise Medical Malpractice Measure Stalls
Medical Malpractice | 2007/03/25 14:37

It's been more than two weeks since Tennessee lawmakers vowed to press ahead with a compromise over medical malpractice lawsuits without support from health care lobbyists. The measure hasn't advanced much since then.

House Judiciary Chairman Rob Briley said frustration is rising among members of both parties who cobbled together a tentative compromise. The Tennessee Medical Association — a group the Nashville Democrat calls "organized medicine'' — has been pushing for stricter rules than Democrats wanted to accept.

"Efforts haven't been derailed, but they have been slowed down significantly since organized medicine got involved in trying to tinker with the proposal that the bill sponsors and I had worked out,'' Briley said.

Senate Republican Leader Mark Norris and Rep. Doug Overbey, R-Maryville, are the sponsors of the measure designed to limit frivolous lawsuits against doctors. They decided to leave the association out of earlier negotiations with Briley that resulted in an agreement to omit the group's long-standing demand to enact caps on lawsuit payouts.

Instead, lawyers suing doctors in medical malpractice cases would have to pre-certify the legitimacy of their claims by gaining approval from independent experts. They would be subject to penalties if they were later found to have filed frivolous lawsuits without proper vetting.

Attorneys found in violation could be forced to pay the court costs for defense lawyers and could be hit with other penalties. They could also have their names reported to the Board of Professional Responsibility.

Russ Miller, vice president of the Tennessee Medical Association, previously called a limit on non-economic damages the "linchpin'' of his organization's goals. Recognizing that caps are not likely to pass this year, Miller now says the group wants to make the rest of the measure stricter.

"We want to ensure we put some real meat on to efforts to weed out lawsuits that don't need to be clogging our legal system,'' he said.

Norris acknowledged some unhappiness among the health care lobbyists for having been left out of the original negotiations.

"I think that some of their feelings were hurt, and that there was a misunderstanding about who has legislative responsibility and who has lobbying responsibility,'' Norris said. "Once they got over that hurdle ... they began paying attention to the wording.''

Norris said the two sides are discussing the details of pre-certification and whether opposing lawyers should have more access to a plaintiff's medical information before a case gets under way.

"It used to be that if you put your own health at issue, there were no secrets _ the defense could get access to my medical records and talk to my doctors,'' Norris said. "That's no longer the case.''

Briley said it might have been a "tactical error'' on the Republicans' side to let the TMA back into the negotiations.

"Organized medicine has said 'if we don't get caps, we get everything else,''' Briley said.

Norris responded that both doctors and lawyers just want to make sure they don't lose too much.

"Each side is suspicious about the other side overreaching,'' Norris said.

Senate Speaker Ron Ramsey, R-Blountville, said he will defer to Norris on the negotiations is willing to move forward on the original proposal to impose caps if they fall apart.

"I'm prepared to move the bill forward with the caps if we can't work out some kind of compromise,'' said Ramsey. "But we'd be moving it forward realizing it's going to have a tough time in the House.''

Norris and Briley said they could bring the proposal before their chambers' respective Judiciary Committees next week.

House Speaker Jimmy Naifeh, D-Covington, has said he would consider Briley a "miracle worker'' if he could resolve the long-standing impasse over medical malpractice lawsuits.



High court takes up price-fixing case
Court Watch | 2007/03/25 10:04

When a family-owned retailer in Texas lowered prices on women's fashion accessories, the manufacturer cut off the store's supply. Phil and Kay Smith sued and won in a case now before the Supreme Court that asks whether price-fixing always is illegal. Arguments before the justices were scheduled for Monday. The manufacturer, Leegin Creative Leather Products Inc. in City of Industry, Calif., is challenging a 1911 Supreme Court ruling that automatically classifies agreements to set minimum prices as anticompetitive.

Leegin says that by maintaining price consistency among niche retailers it sells to, stores can offer improved customer service. That, says the manufacturer, enables smaller stores to compete against rival brands sold by bigger cut-rate competitors.

At issue is whether price floors such as Leegin's always should be treated as illegal or evaluated case by case to see if they are pro-competitive.

The Smiths say they lowered prices by up to 20 percent because several other retailers selling Leegin's Brighton brand also were lowering prices. The Smiths say they and the competing stores were threatened by Leegin with being cut off unless they raised their prices again. Alone among the threatened stores, the Smiths refused to cave in.

"When Leegin stopped shipping to us, my wife and I lost half our business," Phil Smith said in an interview. "Kay and I are back to the same size store we started with 21 years ago."

Discounters and consumer groups say consumers will suffer if the Smiths lose.

"In the Internet age, this is a dagger at the heart of the most consumer-friendly environment we've seen in generations," said Mark Cooper, a spokesman for the Consumer Federation of America.

"Would there ever have been a Sears & Roebuck, an A&P, a Walgreens, a Kmart or a Wal-Mart" absent a ban on minimum pricing agreements? the federation asked in court papers filed in support of Kay's Kloset.

In Leegin v. Kay's Kloset, the Bush administration says it is inappropriate to automatically prohibit price floor agreements when they are not necessarily anticompetitive.

Thirty-seven state attorneys general oppose the administration.



Oracle's SAP suit raises users' ethics concerns
Practice Focuses | 2007/03/25 09:44

Oracle filed a lawsuit in U.S. Federal District Court on Thursday against SAP, its SAP America division, its TomorrowNow subsidiary and 50 unnamed individuals Oracle claims were SAP employees. The complaint charges that SAP committed "corporate theft on a grand scale," with one or more staff at

TomorrowNow allegedly pretending to be Oracle customers and illegally hacking into its secure support Web site for users of Oracle's PeopleSoft and JD Edwards applications. SAP then allegedly copied content from the site and used it to offer Oracle customers cut-rate support services in the hopes of eventually migrating them over to SAP's rival applications.

So far, SAP has yet to respond publicly to the accusations, perhaps suggesting that a countersuit could be in the offing. As for Oracle, the vendor hasn't made any additional comment beyond the lawsuit itself.

"If we decide to trust a company, we'd hope it to be justified," said an IT manager at a French company that uses JD Edwards applications and sources its support for that software from TomorrowNow. "When we choose a supplier, we don't necessarily investigate them first," he added. The manager agreed to speak on the condition of anonymity for himself and his company.

While products, services and price are primary factors in procurement decisions, a vendor's ethics and business practices are also extremely important, according to John Matelski, chief security officer and deputy chief information officer for the city of Orlando and a JD Edwards user. He's also the former president of the Quest International Users Group, which focuses on the needs of PeopleSoft and JD Edwards applications customers that Oracle acquired through the January 2005 purchase of PeopleSoft.

"As a public-sector entity, which is directly accountable to its citizens and constituents, I would be concerned about our relationship with any vendor that is proven to conduct business in an unethical manner," Matelski wrote in an e-mail response for comment. He would prefer to do business with companies that can be trusted, and do not have a track record of inappropriate business practices.

"Due to the nature of the relationships that we develop, software vendors and consultants would be held to a higher standard, because they would typically have a greater level of access to our systems and data during implementation and support engagements," Matelski wrote. "The security and privacy of our data is key, and if an organization is known to have illegally obtained data before, I would need to be much more careful when evaluating whether to establish or continue a relationship with them."

David Mitchell, software practice leader at analyst Ovum drew a comparison between the potential damage of the lawsuit with fallout of the corporate spy scandal that hit Hewlett-Packard Co. last year. Despite leading to the resignations of several executives including its chairman, HP weathered the storm well and customers stayed loyal to the company.


"With HP, Hurd responded positively, he apologized," Mitchell said. "It was about the approach they took when something inappropriate had happened. If HP had not responded so positively I think they would have seen more negative consequences."

Should Oracle's charges against SAP be proven, "they need to embrace it and reassure people how it's come about," he added. If there was some wrongdoing, Mitchell, the former senior director for market development at Oracle UK, believes it'll turn out to be the work of one bad apple. "SAP ethically and culturally is a very correct organization, this isn't rotten DNA," he said. "If this turns out to be true, then it will be an individual, I think, who has acted inappropriately."

As for Oracle, the vendor needs to act to avoid any negative publicity from the suit given that it named many customers whose identities were allegedly purloined by SAP and suggested that SAP customers unknowingly might be using services that contain Oracle's intellectual property. "It could be good for Oracle to say, 'We have no beef with the customer, our beef is with SAP,'" Mitchell said. "Or it could be perceived as Oracle picking on the customer."

Andreas Chatziantoniou, a software consultant specializing in Oracle products with Accenture Technology Services in the Netherlands, wondered about another potential negative hit on Oracle.

"From the reputation side, I believe that this can backfire," he wrote in an e-mail. "Oracle has a reputation for dumpster diving in order to get information about competitors," alluding to an incident in 2000 when Oracle defended the actions of detectives it hired to investigate two research groups that supported Microsoft Corp. during its antitrust trial.

The lawsuit might be Oracle's way to gain some extra publicity, following the release earlier this week of the vendor's third-quarter financial results, according to Chatziantoniou. Perhaps a case of "read between the lines: our results could have been much better when SAP would play by the rules," he suggested.

The lawsuit alone won't deter customers from buying SAP's applications, but the noise around the legal action might give both SAP and Oracle users the sense that the firms are distracted and not fully focused on customers' needs, he added.

Now isn't the time for either Oracle or SAP to lose focus, given the competitive threat they face.

Last week, Microsoft, which has tended to focus more on the small to midsize business market with its Dynamics applications, vowed to compete more aggressively in the enterprise market against Oracle and SAP.

Another issue that should give vendors pause is that customers have long memories when it comes to scandals, Chatziantoniou wrote. "Even years later, people (the decision makers) remember the 'bad publicity,'" he added. What might suit the vendors' customers and partners is an out-of-court settlement, he concluded.

"So far such a situation has never happened to me in my business life, but if it did I would consider the fact very heavily when doing business with such a company," Manfred Reif, a managing director at HSH Nordbank, a credit investment bank in Luxembourg, wrote in an e-mail response to comment on the lawsuit. "Nevertheless, first of all being suspicious and 'listening' to your gut feeling should be one's daily duty," he added.

Another factor to bear in mind is the number of customers Oracle and SAP share, Seth Ravin, CEO and president of Rimini Street ., pointed out. He's a co-founder of TomorrowNow, selling his share of the company to SAP in early 2005 and establishing Rimini Street as a rival supplier of third-party maintenance and support.

While Oracle and SAP compete bitterly in the applications market, plenty of SAP users run their software on Oracle's database and middleware. It's in both vendors' interest to resolve the current dispute rapidly.

"So far, we've only heard one side of the argument," Ravin said, with SAP yet to comment.

Given how closely Oracle and SAP watch each other, he finds it hard to believe that the alleged actions by TomorrowNow were deliberate. "I strongly doubt it," he said, adding that such behavior wouldn't be in anyone's best interests and would likely be quickly discovered. Oracle appears to require users of its customer support database to be "self-policing," he said, in other words, they have access to more content than their specific needs warrant, which may have led to some confusion about what was OK for SAP to access and what wasn't.




Porsche Raises Stake in VW, Forcing a Takeover Offer
World Business News | 2007/03/25 09:34

The German sports-car maker Porsche said Saturday that it would make a takeover bid for Volkswagen, a symbolically audacious but largely legal step in its growing control over VW, Europe"s largest carmaker and the inventor of the once-ubiquitous Beetle.

Porsche plans to lift its stake in Volkswagen to 31 percent from 27.3 percent. Under German law, it is required to make an offer for the entire company once it owns more than 30 percent of the shares.

The offer of 100.92 euros ($134.40) a share is the minimum amount Porsche can legally offer other shareholders and is well below Volkswagen"s most recent closing price of 117.70 euros. A Porsche spokesman said it was not seeking to acquire a majority stake in Volkswagen any time soon.

"We expect very few, if any, shareholders to sell us their shares at this price," the spokesman, Michael Baumann, said. "This gives us the freedom to move further without taking other special steps."

The move confirms, however, that Porsche is determined to tighten its grip on Volkswagen, with which it has deep historical links. The two companies cooperate in manufacturing sport utility vehicles, and two of Porsche"s most senior executives serve on Volkswagen"s board.

In a statement, Volkswagen"s chief executive, Martin Winterkorn, said he welcomed Porsche"s increased stake.

Analysts said Porsche was forced to cross this threshold sooner than it might have wished because of the recent rally in Volkswagen"s share price. Many analysts had expected it to wait until a European court issued a ruling on a German law that protects Volkswagen from hostile takeover bids.

The court is expected to strike down the law, which places a cap on the voting rights of shareholders at 20 percent, regardless of how many shares they own. If it does not, Porsche could find itself holding a large stake in Volkswagen without commensurate voting power.

"It"s clearly a high-risk approach, because Porsche doesn"t know exactly what is going to happen at the court," said Ferdinand Dudenhöffer, the director of the Center for Automotive Research in Gelsenkirchen.

Shares of Volkswagen have risen 37 percent this year, largely on speculation about Porsche"s intentions.

Porsche first acquired shares in Volkswagen in September 2005, saying it wanted to protect the independence of its partner. It has steadily increased its stake, occasionally ruffling Volkswagen"s other major shareholder, the state of Lower Saxony, which owns 20.5 percent.

The links between the two companies are longstanding, complex and personal. Ferdinand Porsche, the patriarch of the Porsche family, designed the Volkswagen Beetle at the behest of Hitler.

The chairman of Volkswagen"s supervisory board, Ferdinand K. Piëch, is a member of the Porsche family, which still controls the sports-car company. He was once chief executive of Volkswagen, and continues to exert influence over its day-to-day affairs.

Analysts regard Porsche"s growing stake in Volkswagen as a way for Mr. Piëch, an automotive engineer and billionaire industrialist, to reassemble the pieces of his grandfather"s empire.

If all of Volkswagen"s shareholders were to accept Porsche"s offer, Mr. Baumann said, the deal would be valued at about 35 billion euros ($46.6 billion). Porsche has lined up financing for that, though he made it clear that the carmaker does not intend to raise the offer beyond the current discounted level.

Porsche"s investment in Volkswagen has already shaken up the larger company. Last fall, Volkswagen dismissed its chief executive, Bernd Pischetsrieder, and replaced him with Mr. Winterkorn, a protégé of Mr. Piëch, who ran the company"s luxury car division, Audi.

Soon afterward, Volkswagen"s No. 2 executive, Wolfgang Bernhard, resigned. Mr. Bernhard, a former chief operating officer at Chrysler, had pushed a stringent cost-cutting program.

Since then, analysts say, Volkswagen has shifted its emphasis to high-quality engineering and design. These are hallmarks of Porsche, and of Mr. Piëch, when he was chief executive of VW.

"In the long-term, we"ll have to see how competitive Volkswagen will be in the market," Mr. Dudenhöffer said. "The risk is Piëch wants to do everything. He wants to buy control, and he"s reversing Volkswagen"s strategy."



Colombia ex-intelligence chief released on technicality
International | 2007/03/25 03:33

Colombian appellate judge Leonor Perdomo ordered the release of ex-intelligence chief Jorge Noguera Friday on the grounds that Noguera was "illegally and unconstitutionally being deprived of his freedom" because chief prosecutor Mario Iguaran had not personally issued an arrest request. Perdomo ruled that Iguaran has to personally request ex-intelligence chief's detention because Noguera was a public servant when the crimes were alleged to have been committed. Noguera, who was arrested on Thursday, is accused of murder and conspiracy for allegedly contracting with illegal paramilitary groups to assassinate political opponents. Iguaran disagreed with the ruling, stating that "think Colombia or the international community can tolerate the message that conspiring with criminals has any relation to one's functions as a public servant."

Noguera, who ran the Colombian Department of Administrative Security resigned in October 2005 after he was tape-recorded while discussing plans to sell intelligence to paramilitary groups. Several of the people on Noguera's hit list were later killed, including university professor Alfredo Correa de Andreis, who was investigating the paramilitary groups at the time of his death in 2004.



Quake in central Japan kills one and hurts over 170
International | 2007/03/24 19:29

A powerful quake tore into a rural area of coastal central Japan on Sunday, killing at least one person as it toppled aging farmhouses and temples, set off landslides and caused a small tsunami. Some 160 people were injured.

The magnitude 6.9 quake struck at 9:42 a.m. (0042 GMT) off the Noto Peninsula on the Sea of Japan coast. The Meteorological Agency issued a tsunami warning urging an evacuation, but the alert was lifted after a 10-centimeter (6-inch) wave hit the shore, causing no damage.

The temblor was a shock to the region, which had not seen a major quake since 1933.

"The shaking was so violent, I freaked out. All I could do was to duck underneath the desk," said Yukiko Taka, 58, the owner of a traditional lacquerware shop in Wajima, the hardest hit town in Ishikawa prefecture (state). "It was so frightening."

Weaker quakes rattled the region through the day, including a magnitude 5.3 aftershock. No additional damage was reported.

The initial quake knocked down buildings, caused landslides, and cut power, water and transportation lines. The Noto airport was closed, and roads were snarled with residents leaving or concerned Japanese rushing to the area to see relatives.

A 52-year-old woman was crushed to death by a falling stone lantern, officials said, and at least 162 other people were injured, most of them hurt when they fell during the shaking or were hit by falling objects and broken glass.

Local authorities said they were thankful the death toll was so low.

"Perhaps our traditional homes were sturdy enough to survive the quake," said Masayuki Murozuka, an Ishikawa official. "I think it was also fortunate that the quake hit in midmorning so most people were fully awake, perhaps even finished breakfast by then."

Television footage of the quake showed buildings shaking violently for about 30 seconds. After the quake, buildings lay in heaps of rubble, and the windows of shops were shattered. Roof tiles cluttered streets with cracked pavement.

Fear of aftershocks and more landslides caused by the loosening of soil waterlogged by overnight rains continued to plague the quake zone -- and keep residents jittery.

"A fairly big aftershock hit just minutes ago and I jumped out the door," said Tomio Maeda, manager of convenience store Family Mart in Anamizu town. "It's scary, I guess it's not over yet."

In Tokyo, Chief Cabinet Secretary Yasuhisa Shiozaki said officials were doing their best to rescue victims and assess the extent of the damage.

About 30 soldiers had arrived to help with disaster relief, and military aircraft were examining the damage. Some 375 firefighters from seven other prefectures were also dispatched to help, the Fire and Disaster Management Agency said.

The quake also knocked down at least 45 homes in Ishikawa, and partially destroyed another 227, the FDMA said. Most of the injuries and damage were concentrated in Wajima, about 312 kilometers (193 miles) northwest of Tokyo.



Rat poison discovered in samples of pet food
Breaking Legal News | 2007/03/24 11:49

Investigators have found rat poison in the pet food suspected of killing 15 cats and two dogs, but they can't explain how it got there. Meanwhile, veterinarians and federal regulators predicted that many more pet deaths and illnesses will be linked to the 95 brands of wet pet food voluntarily recalled March 10 by its manufacturer.

"I think we're going to see hundreds if not thousands of cases," said Brad Smith, director of the veterinary teaching hospital at UC Davis. "It's going to take some time to sort this out."

Menu Foods, the Canadian-owned pet food maker, expanded its recall Friday to all cans and pouches of the recalled brands of "cuts and gravy" foods regardless of when they were manufactured. The first recall was limited to pet foods made after Dec. 3.

The discovery of rat poison in pet food was announced Friday by New York state food safety experts who analyzed samples of the commercial pet food provided by the manufacturer.

The substance, aminopterin, is not licensed for use as a rat poison in the United States, but it is used for that purpose in other counties.

The drug is used in cancer research, and it formerly was used to induce abortions in the United States, scientists said.



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