In Sher v. Lafayette Insurance Co. (La. 2008), an apartment unit was flooded when levees failed immediately following Hurricane Katrina. The insurer inspected the property to determine the amount of covered loss and concluded that most of the building’s damage was due to poor maintenance, disrepair, and flooding. Checks totaling slightly more than $2,700 were tendered but rejected. Although the term “flood” was not defined in the policy, the Louisiana Supreme Court rejected the argument that the definition depended on whether the event resulted from a natural disaster or a man-made one, instead focusing on the prevailing meaning of the word “flood,” i.e., the overflow of a body of water causing a large amount of water to cover an area that is usually dry. Accordingly, the court did not find the term ambiguous, and found that the levee breaches were covered by the flood exclusion. 

In Landry v. Louisiana Citizens Property Insurance Co. (La. 2008), the Louisiana Supreme Court rejected a homeowner’s breach of contract claim against the insurer for failure to pay the face value of the policy after their house was totally destroyed by Hurricane Rita. The parties did not dispute that the insurance in question covered any loss caused by wind and rain, and that the policy specifically excluded damages caused by flood waters. Even so, the homeowner claimed that Louisiana’s statutory law (R.S. 22:695) obligated the insurer to pay the face value of the policy. The insurer responded, asserting several defenses, including damages caused by flood, high tides, and storm surge. The statute in question was the Louisiana Value Policy Law (R.S. 22:695), that sets forth the methodology to compute loss and that its provisions are not altered due to concurrently causing damages, even if one of such damages is not covered. 

On June 10, 2008, Michael O. Leavitt, Secretary of the Department of Health and Human Services (DHHS) announced that Louisiana was one of twelve (12) communities chosen to participate in an Electronic Health Records Medicare Demonstration Project. The project will last five (5) years and will provide physicians with financial incentives to use certified electronic health records (EHRs). Incentive payments for the entire 5-year period may reach $58,000 per physician and $290,000 per practice.  

For more information on the EHR Medicare Demonstration Project, refer to the DHHS Press Release found at

http://www.hhs.gov/news/press/2008pres/06/20080610a.html

In Advisory Opinion No. 08-05, issued February 15, 2008, the OIG concluded that an arrangement whereby a pharmaceutical company placed electronic kiosks in physician offices would not generate prohibited remuneration under the anti-kickback statute. Further, the OIG opined that the arrangement would not violate the federal prohibition against giving anything of value to a Medicare or Medicaid beneficiary that is likely to influence the beneficiary’s selection of a particular provider.

The proposed electronic questionnaires would not mention the manufacturer’s drug products or contain any advertisements or incentives for using the kiosks. Patient names would not be entered into the system, and the questionnaires would contain a privacy statement. The questionnaire would not mention any particular drugs, but would carry a small image of the requesting company’s logo and a copyright notice. Further, participating physicians would not be paid, nor would they pay the requesting company, for hosting the kiosks. The physicians whose waiting rooms would contain the kiosks need not have prescribed any of the requesting company’s drugs. Additionally, participating physicians would not be required to prescribe any such drugs. Finally, sales representatives of the requesting company would not have access to the database created by patient participation in the questionnaire.

The OIG opined that this arrangement would not generate prohibited remuneration under the federal anti-kickback statute, nor would it violate the federal statute prohibiting the giving of anything of value to a Medicare or Medicaid beneficiary to induce the person to use a particular provider of items or services for which the government pays. According to the OIG, the arrangement would not provide prohibited remuneration to the physicians whose waiting rooms would house the kiosks. The OIG found it unlikely that the questionnaires would save any appreciable amount of physician or staff time, and it did not believe that the kiosks would enhance the attractiveness of the participating physicians’ offices such that it would influence the selection of a particular physician by government beneficiary patients.  The OIG also opined that the kiosks would not have remunerative value to the patients because no incentives for using the kiosks would be offered. Additionally, the kiosks, while electronic, would be analogous to the paper brochures that are placed in physician offices at present. However, the OIG mentioned that it might have reached a different result if the kiosks were used to communicate any form of offer of remuneration to patients, such as coupons, gifts or services.

The OIG also noted with approval that the proposed arrangement included safeguards, such as a patient privacy protection, the fact that the names of patients would not be entered into the system, and that sales representatives would not have access to the database created by the questionnaires.

The Louisiana Supreme Court issued its new opinion after a rehearing in Borel v. Young, again affirming the Third Circuit’s ruling and dismissing the lawsuit against late-added physician defendants, but on different grounds. The supreme court’s decision on rehearing solved an apparent dilemma for the plaintiffs created by the original opinion: the plaintiffs were precluded from filing suit until after the medical review panel had rendered an opinion but, in any case, were required to file suit within three years of the alleged medical malpractice. Since the three year period could not be suspended during the pendency of the medical review panel, the plaintiffs faced the possibility that their claims would be barred by the three-year peremptive period before the panel convened to consider their claims.

In the original opinion, the supreme court held that La. R. S. 9:5628 set a one-year prescriptive period and a three-year peremptive period for bringing a medical malpractice claim.    The supreme court held that a claim for medical malpractice was extinguished if brought against a health care provider more than three years after the date of alleged medical malpractice. The three year peremptive period could not be suspended, interrupted, or revoked. On rehearing, the supreme court reaffirmed its prior decision, holding that both periods were prescriptive, subject to suspension, interruption, or revocation.  

Prescription is interrupted against when a lawsuit is filed. However, prescription may be suspended for various reasons. For example, prescription is suspended when a medical review panel request is timely filed and remains suspended for 90 days after notification by certified mail of the medical review panel opinion. Also, prescription may be suspended under the doctrine of contra non valentum, where a plaintiff did not know and could not have reasonably discovered the cause of action. This “discovery rule” allows a plaintiff to file a claim within one year of the date of discovery of the negligent act or omission giving rise to a claim, even if that is more than one year from the date of the alleged negligence. The supreme court, on rehearing, also interpreted La. R. S. 9:5628 as making the discovery rule exception to prescription inapplicable after three years from the date of alleged medical malpractice, thus setting a maximum three year period for a medical malpractice claim to be filed.

In explaining its decision on rehearing, the supreme court stated the filing of an initial request for a medical review panel suspended the running of prescription against all alleged joint or solidary defendants, until 90 days after the notification as required of the medical review panel opinion. This suspension protected plaintiffs who were required to submit their claims to a panel before filing suit. Once the suspension ended, the plaintiffs had any remaining time left in the prescriptive period to file suit against the health care provider defendants named in the request for the medical review panel. The supreme court confirmed that the more specific provisions of the Louisiana Medical Malpractice Act, rather than the general Civil Code provisions, applied regarding the interruption of prescription against jointly liable defendants. Thus, in Borel, the claim against the defendant physicians were prescribed, even though suit was timely filed against another defendant health care provider, because the physicians were not added to the lawsuit for more than three years after the alleged medical malpractice.  Ordinarily, prescription would be interrupted as to all defendants who are jointly or solidarily liable, when a lawsuit is filed against any one of them.

The Borel opinion, on rehearing, seems to have eliminated the bright line rule created in the original opinion that a lawsuit alleging medical malpractice, under all circumstances, must be filed no later than three years after the date of alleged malpractice. However, the opinion on rehearing affirms that the special rules set forth in the Medical Malpractice Act operate to the exclusion of the more general rules related to interruption of prescription and also affirms that the discovery rule, which would otherwise suspend the prescriptive period, ceases to be applicable after three years from the date of the alleged malpractice. Thus, the ultimate result reached is the same as in the original opinion. 

In a major victory for business interests involved in maritime operations and what many commentators say is a harbinger of things to come, the United States Supreme Court recently struck down the $2.5 billion punitive damage award against ExxonMobil in a case involving claims for individual economic damages filed by landowners, native Alaskans and commercial fisherman following the 1989 grounding of the Exxon Valdez. See Exxon Shipping Company, et al v. Grant Baker, et al, 554 U.S. ____(June 25, 2008).  The Court determined that the upper limit for punitive damages in maritime cases was a 1:1 ratio to compensatory damages and sent the case back to the appellate court to reduce the punitive damage award to $507.5 million which was the amount of compensatory damages (those agreed upon in settlement and those awarded following trial) that the trial court determined were relevant for purposes of determining punitive damages.

After deciding that punitive damages were available under maritime law against corporations and that the Clean Water Act does not prohibit punitive damages in maritime oil spill cases, the Court launched a 28-page discussion of the history of punitive damages, the purpose of punitive damages, predictability of punitive damage awards and finally, the amount of punitive damage awards available in maritime cases.[2]

In reviewing the history of punitive damages, the Court noted that the concept of punitive damages is found in ancient times, in the Code of Hammurabi, in which a tenfold penalty was available for stealing a goat. The modern concept of punitive damages dates back to at least 1763 when damages “for more than the injury received” were awarded.  However, the Court recognized that punitive damages are not universally accepted with some states prohibiting them entirely and others (including Louisiana) limiting the availability of punitive damages to only those cases in which statute specifically authorize them.  The Court also noted that historically, the purpose of punitive damages was to punish certain, extraordinary, harmful conduct and to deter others from that same harmful conduct. 

The Court, in coming to a decision, analyzed punitive damage awards in other cases from the perspective of whether they were fair and predictable. The court reasoned that the law is based on a basic premise of fairness (thus punitive damages should be fair) and that penalties should be reasonably predictable so that even the “bad man” has some ability to predict the consequences when choosing how to act.

The Court concluded that in deciding whether the punitive damage award against ExxonMobil met these two criteria, it could pick from three approaches. The first involved a “verbal” approach that established criteria for judicial review of punitive damage awards to determine whether they were excessive. This approach was rejected because this criterion would not provide the predictability that the court was seeking. The second approach was a quantitative approach that would set a dollar cap on punitive damage awards similar to the maximum sentences in criminal law. This was also rejected because there are no “standard” torts or contract injuries that would allow the court to set an across the board maximum. 

The third approach, and the one the court adopted, was to use a ratio or maximum multiple. Again, referring to studies of previous punitive damage awards, the court determined that setting a maximum ratio of punitive damages to compensatory damages of 1:1 satisfied the goals of preventing unpredictable and excessive awards, retribution and deterring future misconduct. 

This approach was consistent with the Court’s decisions relating to its due process analysis in determining whether punitive damage awards rendered under state law meet constitutional muster. In State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408 (2003), the Court rejected a mathematical formula for determining whether a punitive damage award violated constitutional notions of due process, but did find that “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” State Farm, 538 U.S. at 425. The Court went on to say in State Farm  that “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.” 

The dissenting opinions focused on the Court’s decision to make maritime law rather than use traditional judicial review standards like “abuse-of-discretion” until Congress determines whether to impose specific rules on punitive damages in maritime cases.

 The ExxonMobil decision sends a clear signal that this Court is willing to limit punitive damages to accomplish the goals of fairness and predictability and may be willing to consider additional limits on punitive damage awards under the constitutional due process standards.

There are scores of oilfield contamination cases, coined “legacy lawsuits,” in which landowners claim that their property has been contaminated by historical oil and gas exploration and production operations. Legacy lawsuits are a means for plaintiffs to potentially obtain large jury verdicts to remediate property. Plaintiffs, however, are not required to use their monetary awards towards the remediation of their property. In 2006, the Louisiana Legislature, in response to windfall jury verdicts, lack of remediation obligations on landowner plaintiffs, and the adverse effect of those events on oil and gas operators in the State, enacted Louisiana Revised Statute 30:29 (“Act 312”). Act 312 reflects the Legislature’s concern that the State’s natural resources were not being protected under then-existing laws. 

The constitutionality of Act 312 was recently challenged in M.J. Farms, Ltd. v. Exxon Mobil Corporation, No. 07-CA-2371. In a unanimous opinion rendered by the Court, Act 312 was held to be not only constitutional but also applicable to legacy cases.  

In finding that the statutory language was clear and unambiguous, the Louisiana Supreme Court held that Act 312 is applicable whenever there is “any litigation or pleading making a judicial demand arising from or alleging environmental damage” involving “contamination resulting from activities associated with oilfield sites or exploration and production sites.” The Court reasoned that remediation of contamination caused by oilfield exploration and production activities is within the jurisdiction of the Louisiana Department of Natural Resources (“DNR”) and requires compliance by public and private parties alike. This is true regardless of whether plaintiff’s claims for remediation arise from the Louisiana Mineral Code or Civil Code. On this point, the Court concluded that Act 312 supplemented the Mineral Code.

The Louisiana Supreme Court further held that the Legislature intended Act 312 to be applied retroactively. Act 312 states that it “shall not apply to any case in which the court on or before March 27, 2006, has issued or signed an order setting the case for trial, regardless of whether such trial is continued.” The Court concluded that the inclusion of “any case” evidenced the Legislature’s express intent for Act 312’s retroactive and prospective application except in those limited cases that had trial dates as of March 27, 2006. 

Because the case could not be resolved on non-constitutional grounds, the Louisiana Supreme Court further addressed plaintiff’s constitutional arguments. Plaintiff first argued that the retroactive application of Act 312 disturbed plaintiff’s vested right to “receive a full and complete recovery for [its] private injury to [its] property.” Prior to Act 312, a plaintiff could receive the full amount of damages a court awarded and was not obligated to use any money awarded to remediate the damaged property. Act 312 was enacted to require the money awarded to be used to remediate the damaged property. Act 312 requires that any award received by a plaintiff must be deposited in the registry of the court which will be used to fund a remediation plan. This, the plaintiff argued, is a substantive change of the law. 

The Louisiana Supreme Court rejected plaintiff’s argument and held that Act 312 does not impair a vested right. The Court concluded that Act 312 provides a procedure for resolving claims for environmental damage, the goal of which is to ensure that the damaged property is actually remediated according to standards protecting the public’s interest.            

The Louisiana Supreme Court also rejected plaintiff’s constitutional argument that Act 312 divests district courts of their original jurisdiction and denies plaintiffs access to district courts. To the contrary, the Court noted that any claim for environmental damage that is filed in a district court triggers Act 312. The claim is not deferred to DNR until the court determines the existence of environmental damage and the legally responsible party. The court is not required to adopt the remediation plan approved by DNR but may choose a remediation plan more feasible to “protect the environment and the public health, safety, and welfare.”    

Although the Louisiana Supreme Court upheld the constitutionality of Act 312, how it is applied to legacy lawsuits is presently being argued in district courts and appellate courts throughout the State. The issues facing district and appellate courts include the following: how to apply the provisions of Act 312 when a defendant admits it is a legally responsible party; when should a district court refer a matter to DNR for development of a remediation plan; who should decide who the legally responsible parties are; and does Act 312 call for two trials or one. These are some of the issues that the Louisiana Supreme Court will likely have to address in the future. 

The Centers for Medicare and Medicaid Services (“CMS”) recently issued on June 8, 2008 an advisory opinion in which CMS addressed whether a proposed physician ownership in a diagnostic center complies with the rural provider exception to the Stark Law. CMS concluded that the facts of the proposed physician ownership in the diagnostic center would satisfy the rural provider exception, but CMS also cautioned that meeting the elements of the rural provider exception is an ongoing requirement and must be continuously satisfied during the period of a physician’s ownership interest.

Several physicians who are, or intend to become owners of a diagnostic center (“Diagnostic Center”) which provides various services, including physician consultations and ancillary services such as clinical laboratory and diagnostic radiology services, request this advisory opinion from CMS. Many of the physician owners of the Diagnostic Center have made, and will continue to make, referrals of Medicare patients to the Center for such services.

The physicians certified that all designated health services performed at the Center since its inception have been, and will continue to be, furnished outside a Metropolitan Statistical Area (MSA). Additionally, the requestors certified that, on an annual basis, at least 75% of the designated health services provided at the Diagnostic Center have been, and will continue to be, furnished to individuals residing outside of a MSA.

CMS noted that the rural provider exception applies only to ownership or investment interests in entities that provide designated health services and not to compensation arrangements with such entities. CMS concluded that physicians' ownership in the Diagnostic Center satisfied the rural provider exception of the Stark Law. It is important to note CMS’ emphasis on the fact that the two primary elements of the rural provider exception are ongoing requirements. CMS further noted that if the Diagnostic Center ever fails in the future to maintain compliance with either or both requirements, the rural provider exception would no longer apply.

On April 16, 2008, the Louisiana Third Circuit Court of Appeal upheld a trial judge’s application of a 35% minority discount in determining the fair market value of the interest of a partner withdrawing from a limited liability partnership (LLP). It appears that the Supreme Court has been asked to consider this case, but has not yet made a determination of whether to do so. Accordingly, this decision may or may not be final, and although it did not involve a health care entity, it is instructive for health law purposes.

In the Cannon case, the primary asset was land used in the sale and harvest of timber. One of the three partners wished to withdraw from the LLP, while the other two wished to continue the business. The parties could not agree on a value of the withdrawing partner’s interest. In their legal proceeding, the appellate court cited to Supreme Court case law for deciding that whether to apply a minority interest is within the trial judge’s discretion and should not be disturbed on appeal unless the discretion was abused. This is a deferential standard. The Cannon court also distinguished the facts presented to it from a case of the withdrawal of a partner from a professional firm, where value of his/her interest may consist of accounts receivable and income the withdrawing partner “was able to generate through his skill and personality.” In such a situation, the value of the withdrawer’s interest is “tied to the withdrawing partner’s identity” and would be “more separable from the assets created by the remaining partners.”

Accordingly, in a health care provider case, and in particular in the case of a potential withdrawing physician or other person whose identity could be said to be tied to the accounts receivable and income generated through his/her skill and reputation, the parties would be well served to spell out in their partnership agreement exactly how the fair market value of a withdrawing partner’s (or, for example, LLC member’s) or corporate shareholder’s interest will be determined.

        On May 19, 2008, OSHA Directive Number 08-03 became effective. That directive provides the criteria by which OSHA will conduct the 2008 Site-Specific Targeting (“SST-08”) plan. OSHA’s SST program is the main programmed inspection plan for non-construction workplaces that have 40 or more employees.

       OSHA’s SST-08 plan has three listings of “establishments” that will be targeted. The focus of the agency’s unannounced comprehensive safety inspections under SST-08 are approximately 3,800 high-hazard workplaces contained on OSHA’s Primary List.  The workplaces on the Secondary List and Tertiary List will only be inspected pursuant to SST-08 if all of the workplaces on the Primary List are inspected. 

          The Primary List of workplaces for the STT plan for 2008 (“SST-08”) is based on OSHA’s 2007 Data Initiative. The 2007 Data Initiative is based on injury and illness data reported to OSHA for the 2006 year by 80,000 workplaces with 40 or more employees in historically high-rate industries. Appendix A to SST-08 lists the workplaces that were the focus of the 2007 Data Initiative Survey.

          The 3,800 workplaces on the SST-08 Primary List are:

(1)      those worksites that have a DART rate at or above 11.0 – any           worksite that reported 11 or more injuries or illnesses resulting in       days away from work, restricted work activities, or job transfer for      every 100 full-time employees; or

(2)      those worksites that have a DAFWII (the Days Away From Work Injury and Illness) case rate at or above 9.0- meaning 9 or more           cases that involve days away from work per 100 full-time           employees.

         OSHA will also include 175 worksites from high-rate industries that reported low injury and illness rates to OSHA on the Primary List. The purpose for inspecting those low rate workplaces is to allow OSHA to verify the reliability of claims by establishments that have achieved low DART rates. The 175 worksites are approximately 10 percent (10%) of the workplaces that meet the low rate criteria. Moreover, the low rate workplaces chosen for inspection will not be eligible for a “records only” inspection.   Also, the low rate workplaces can only be deleted from the Primary List if the Area Office determines that the establishment consists only of an office.

        Additionally, a random sample of worksites that did not provide rate information in accordance with the 2007 OSHA Data Initiative survey will also be placed on the Primary List for the SST-08 plan. The purpose of the inspections of the non-responding workplaces is to discourage employers from not responding to the data initiative surveys to avoid inspections. These establishments may not be deleted from the Primary List.

SECONDARY LIST-

          A Secondary List for worksites to be inspected under the SST-08 plan will also be created. The Secondary List will contain workplaces:

          (1)      with DART rates of 7.0 or greater, but less than 11.0, or

          (2)      with DAFWII case rates of 5.0 or greater, but less than 9.0.

          The Dart rate for the Secondary List under the SST-08 plan did not change, but the DAFWII case rate was increased to 5.0 (meaning 5 or more cases that involve days away from work per 100 full-time employees). The OSHA notice states the Area Office can obtain additional workplaces to inspect from the Secondary List “[i]f an Area Office completes its inspections of all establishments on its Primary List before the expiration of this SST program . . . .”

TERTIARY LIST-

          SST-08 also allows an Area Office that completes all of the inspection on its Primary List and Secondary List before the expiration of the SST program to obtain additional workplaces to inspect from the Office of Statistical Analysis (“OSA”). The OSA will randomly select and provide each Area Office with the number of workplaces the office requested. However, no workplace with a DART rate of 4.6 or lower and a DAFWII case rate of 2.6 or lower will be included in the Tertiary List.

SST-08 INSPECTIONS IN WORKPLACES WITH FEWER THAN 40 EMPLOYEES-

          If a workplace that is on an inspection list under the SST-08 plan has fewer than 40 employees at the time the inspector arrives on site to begin the inspection, the inspection will be conducted if:

(1)      the workplace has more than 10 employees and

(2)      its DART rate or its DAFWII case rate is at or above twice the           private sector 2006 national incidence rate- meaning that the DART          rate is 4.6 or the DAFWII case rate is 2.6. 

          Further, the inspection will also occur if there are no records available at the time of the inspection. 

OSHA’S EMPHASIS INSPECTION PROGRAM-

          In Directive 08-03, OSHA has indicated that in addition to the SST-08 program, that it will continue the use of national and local “emphasis” inspection programs to target high-risk hazards and industries. The eight National Emphasis Programs (NEPs) now focus on amputations, crystalline silica, shipbreaking, trenching/excavations, petroleum refinery process safety management, microwave popcorn processing plants, and combustible dust. Furthermore, OSHA has 140 Local Emphasis Programs (LEPs) in place at this time.   

          Additionally, OSHA runs the Enhanced Enforcement Program (EEP) that focuses on employers that repeatedly ignore safety and health obligations under the OSHA regulations. The EEP cases can result from a programmed OSHA inspection (a SST, NEP, or LEP inspection), or an un-programmed OSHA inspection resulting from imminent danger, a fatality or catastrophic incident, complaints, or referrals.

FULL CONTENT OF DIRECTIVE 08-03-

          The full text of Directive 08-03 which establishes SST-08 can be located at http://www.osha.gov/OshDoc/Directive_pdf/CPL_02_08-03.pdf. Importantly, the method for setting the inspection schedules, including deferrals, the specifications for deletions of workplaces from the inspection cycle, and the inspection procedures are located at Sections XII, XIII, and XIV, respectively in the full text. 

Several developments concerning the Spill Prevention, Control, and Countermeasure (SPCC) regulations occurred in 2006 and 2007. Thoughtful planning and continued tracking of these developments will be necessary to ensure compliance.

EPA revised the SPCC plan requirements in 2006 to:

• Provide the option to self-certify SPCC Plans in lieu of review and certification by a Professional Engineer for facilities that have an aboveground oil storage capacity of 10,000 gallons or less and meet other qualifying criteria.
  
• Provide an alternative to the general secondary containment requirement without requiring a determination of impracticability for qualified oil-filled operational equipment.
  
• Define and exempt particular vehicle fuel tanks and other on-board bulk oil storage containers (called motive power containers).
  
• Exempt mobile refuelers from the sized secondary containment requirements for bulk storage containers.
  
• Remove SPCC requirements for animal fats and vegetable oils for certain types of facilities.
  
• Extend the SPCC compliance dates for farms.

The purpose of the extension is to allow the owner or operator time to prepare or amend and implement the SPCC Plan in accordance with the July 2002 (67 Fed. Reg. 47042, July 17, 2002) and December 2006 (71 Fed. Reg. 77266, December 26, 2006) amendments. A further purpose was to allow facilities to prepare for any subsequent modifications to the SPCC requirements that would result from additional substantive requirements that were anticipated to be proposed later in 2007. In fact, EPA did propose additional refinements to the rule in October 2007 (72 Fed. Reg. 58378, October 15, 2007). 

The October 2007 proposed rule has numerous amendments. All SPCC-regulated facilities (not just oil production facilities) would be potentially affected by these proposals. EPA’s summary of the proposal states that the amendments will provide:

• clarity on the general secondary containment requirements; 
• flexibility in the security requirements; 
• flexibility in the use of industry standards to comply with integrity testing requirements; 
• additional flexibility in meeting the facility diagram requirements; and 
• clarity on the flexibility provided by the definition of “facility.” 

In addition, the October 2007 proposal has amendments specific to oil production facilities that:

• exclude oil production facilities from the loading/unloading rack requirements; 
• modify the definition of “production facility”, consistent with the proposed amendments to the definition of “facility”; 
• extend the timeframe by which a new oil production facility must prepare and implement an SPCC Plan; 
• exempt flow-through process vessels at oil production facilities from the sized secondary containment requirements, while maintaining general secondary containment requirements and requiring additional oil spill prevention measures; 
• exempt flowlines and intra-facility gathering lines at oil production facilities from all secondary containment requirements, while establishing more specific oil spill prevention measures; and 
• clarify the definition of “permanently closed” as it applies to an oil production facility. 

Other proposed revisions to the SPCC rule included in the 2007 proposed rule relate specifically to farms and facilities handling animal fats and vegetable oils. The proposed rule can be viewed in its entirety here.

On May 30, 2008, the Centers for Medicare & Medicaid Services (CMS) issued an Advisory Opinion regarding a proposed arrangement under which a hospital system would license a custom software interface for use by the physicians on its medical staffs. The specific question addressed by CMS was whether the provision of the custom software interface by the hospital system to its medical staff physicians would create a compensation arrangement for purposes of implicating the self-referral prohibition of the Stark Law.

Two important aspects of the proposed arrangement are the limited functions and use of the software interface and the costs paid by the hospital system to develop and provide the software to the physicians.

Under the proposed arrangement, the hospital system would pay an IT vendor to develop a software interface customized to a medical staff physician’s existing electronic health record (EHR) software. The hospital system would also purchase licenses to authorize physician practices to use the interface software during the term of the hospital system’s license agreement. A physician practice would only be able to use the software interface to order or communicate the results of tests and procedures furnished by the hospital system and the software could not be used for any purpose other than the ordering or communicating of test results furnished by the hospital system.
CMS noted that in the Stark Law, a “compensation arrangement” is defined as “any arrangement involving any remuneration between a physician (or an immediate family member of such physician) and an entity.” However, this definition of a “compensation arrangement” also provides that certain types of remuneration would not crate a compensation arrangement, which includes “the provision of items, devices, or supplies that are used solely … to order or communicate the results of tests or procedures for such entity.”

CMS concluded in the Advisory Opinion that the license to use the software would not constitute a compensation arrangement under the Stark Law because of the limited use of the interface and the inability of the medical staff physicians to modify the interface functionality or sell, transfer, or assign the interface software. This conclusion was based on the exceptions noted above to the types of remuneration that create a compensation arrangement.

Hospitals should also note that CMS did not analyze the applicability of any Stark Law exception to the proposed arrangement of providing the hospital providing the software interface to physicians, but only, whether the provision met the definition of a “compensation arrangement.”

The Louisiana Supreme Court recently held in Borel v. Young that La. R. S. 9:5826(A) provided for both a one year prescriptive period and a three year peremptive period to file a claim for medical malpractice. The decision in Borel made it clear that a plaintiff had to file suit against a health care provider no later than three years from the date of the alleged act, omission, or negligence giving rise to the claim. Otherwise, the plaintiff’s action would be extinguished, and all rights to pursue the action would be lost. This ruling was favorable to health care providers, as it protected them from stale claims being brought years after the date of the alleged malpractice. However, the Louisiana Supreme Court granted a rehearing of the Borel v. Young case on May 21, and it remains to be seen whether the current ruling will stand or whether it will be modified or vacated.

La. R. S. 9:5826(A) governs the time limitations in which a party may bring a medical malpractice action against a health care provider. To understand the significance of the Borel ruling, one must understand the crucial difference between a prescriptive period and a peremptive period. A prescriptive period designates the deadline by which an action must be brought. However, prescriptive periods can be suspended, interrupted, or renounced by a variety of occurrences. Peremption is defined as a period of time fixed by law for the existence of a right. Unlike a prescriptive period, a peremptive period cannot be renounced, interrupted or suspended. Therefore, the right to bring an action against a health care provider would cease to exist if not timely exercised within three years after the date of the alleged act, omission or negligence.

In a recent decision from the federal court for the Southern District of Texas, a refinery’s refusal to hire an applicant who admitted to having weakness on the right side of his body did not violate the Americans With Disabilities Act (ADA). In E.E.O.C vs. Lyondell-Citgo Refining, L. P. (slip copy, 2008 WL 961909), the defendant withdrew a conditional offer of employment based on a third party medical evaluation and determination that the applicant was not medically qualified for an Operator position due to residual right-sided weakness from a blunt force head trauma suffered as a teenager.

The EEOC did not contend that the applicant actually suffered a substantially limiting impairment to a major life activity, but rather that defendant “regarded” the applicant as disabled or alternatively, that the applicant had a “record of” disability. Since “climbing” is not a major life activity under the ADA, and the applicant was medically disqualified solely due to his inability to safely climb ladders, there was insufficient evidence that defendant “regarded” the applicant as substantially limited in a major life activity. This failure by the EEOC to establish its prima facie case resulted in summary judgment for defendant on the “regarded as disabled” claim. Concerning the EEOC’s alternative theory that the applicant had a “record of” disability, the Court noted that, “At most, his medical disclosures reflect a record of impairment, which is insufficient to raise a genuine issue of material fact as to whether those impairments substantially limited his ability to engage in any particular major life activity.” As such, defendant’s motion for summary judgment on the EEOC’s “record of” disability claim was likewise granted.

Environmental litigators face unique challenges in dealing with the expert phase of a lawsuit.  For example, a lawsuit involving alleged environmental contamination of soil, groundwater, or surface waters may require the use of experts such as environmental/civil engineers, hydrogeologists, hydrologists, geologists, soil scientists, agronomists, analytical chemists, toxicologists, environmental chemists, risk assessment experts, wetlands scientists, health physicists, biologists, and statisticians. 

These experts must often present difficult and complicated technical information in a way that can be understood by judges, lawyers, and juries, who in most cases are not engineers and scientists.  In some cases, environmental litigators face the task of having to deal with many of these disciplines simultaneously.  Before any of these experts can testify at trial, however, each expert and his or her work must satisfy evidentiary standards applicable to expert testimony, many of which are grounded in the principles laid out in the U.S. Supreme Court decision in Daubert v. Merrell Dow Pharmaceuticals, Inc. 509 U.S. 579 (1993).

This article provides a review of recent decisions where the opinions of environmental experts, from disciplines mentioned above, have been the subject of Daubert challenges based on the reliability of methods or principles and how those challenges were successfully presented or defended. 

Download the entire article. 

* Reprinted with permission from the American Bar Association, Natural Resources & Environment, Vol. 22, No. 4, Spring 2008.