Law Commons^™

Where's The Insurance In Mass Tort Litigation?, Tom Baker

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This article reports and explains four key findings about the difference between the role of insurance in mass tort litigation and the role of insurance in ordinary tort and corporate governance litigation as reported in earlier research: (1) outside of the insolvency context, mass tort plaintiff lawyers do not build their litigation and settlement strategy around defendants’ liability insurance; (2) mass tort defendants typically retain control over their defense, even when they recover under insurance policies that assign the insurer control over their defense; (3) mass tort defendants typically use their own funds to settle claims, obtaining indemnification from their …

Mitigating Catastrophe Risk For Landowners, Stewart E. Sterk

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Local, national, and global catastrophes entail significant risk for landowners. The government-sponsored National Flood Insurance Program illustrates how subsidizing insurance against catastrophe risk can result in overinvestment in risk-prone properties. Government intervention, however, has largely been a response to the historical failure of the private insurance industry to provide adequate protection against correlated risks, a failure with the potential to generate underinvestment in land and devastate existing owners.

When data is available about the incidence and severity of potential disasters, improvements in technology have made it more feasible for insurers to calibrate premiums and discounts with greater accuracy, and sophisticated …

Due Process Alignment In Mass Restructurings, Sergio J. Campos, Samir D. Parikh

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Mass tort defendants have recently begun exiting multidistrict litigation by filing for bankruptcy. This new strategy ushers defendants into a far more hospitable forum that offers accelerated resolution of all state and federal claims held by both current and future victims.

Bankruptcy's structural, procedural, and substantive benefits also provide defendants with unique optionality. Bankruptcy's resolution promise is alluring, but the process relies on a very large assumption: that future victims can be compelled to relinquish property rights in their cause of action against the corporate defendant and others without consent or notice. Bankruptcy builds an entire resolution structure on the …

Jotwell's Thirteenth Birthday Celebration, A. Michael Froomkin

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No abstract provided.

The Case For Banning (And Mandating) Ransomware Insurance, Kyle D. Logue, Adam B. Shniderman

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Ransomware attacks are becoming increasingly pervasive and disruptive, resulting in ransom demands becoming more exorbitant. Payments for ransom costs are increasingly being covered by insurance, which may offer coverage for a variety of cyber-related losses. Some commentators have expressed concern over this market phenomenon. Specifically, the concern is that the presence of insurance is making the ransomware problem worse based on the following theory: because there is ransomware insurance that covers ransom payments, and because paying the ransom is often far cheaper than paying the restoration and business interruption costs covered under the policy, there is an increased tendency to …

The Deep Architecture Of American Covid-19 Tort Reform 2020-21, Anthony J. Sebok

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The rapid emergence of the COVID-19 pandemic produced massive state actions to protect in public health through the exercise of the police powers by local, state and national governments. In the United States there were calls early in the crisis to exercise the state’s power over tort law: As early as April 2020, the American Tort Reform Association published a White Paper, Responding to the Coming Lawsuit Surge that called for “reasonable constraints on . . . lawsuits that pose an obstacle to the coronavirus response effort, place businesses in jeopardy, and further damage the economy.”

This article, prepared for …

Autonomous Vehicle Regulation & Trust: The Impact Of Failures To Comply With Standards, William H. Widen, Phillip Koopman

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The autonomous vehicle (AV) industry works very hard to create public trust in both AV technology and its developers. Building trust is part of a strategy to permit the industry itself to manage the testing and deployment of AV technology without regulatory interference. This article explains how industry actions to promote trust (both individually and collectively) have created concerns rather than comfort with this emerging technology. The article suggests how the industry might change its current approach to law and regulation from an adversarial posture to a more cooperative one in which a space is created for government regulation consistent …

Ai Insurance: How Liability Insurance Can Drive The Responsible Adoption Of Artificial Intelligence In Health Care, Ariel Dora Stern, Avi Goldfarb, Timo Minssen, W. Nicholson Price Ii

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Despite enthusiasm about the potential to apply artificial intelligence (AI) to medicine and health care delivery, adoption remains tepid, even for the most compelling technologies. In this article, the authors focus on one set of challenges to AI adoption: those related to liability. Well-designed AI liability insurance can mitigate predictable liability risks and uncertainties in a way that is aligned with the interests of health care’s main stakeholders, including patients, physicians, and health care organization leadership. A market for AI insurance will encourage the use of high-quality AI, because insurers will be most keen to underwrite those products that are …

What War Did To The Academy, What The Academy Did To War: A 20-Year Retrospective On The Effects Of The Post-9/11 Wars, Deborah Pearlstein

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The history of the legal academy’s impact on the way states fight wars is hardly one of unmixed glory. It was a law professor moonlighting for President Lincoln who authored “Instructions for the Government of Armies of the United States in the Field” during the Civil War, a code still recognized worldwide today for having laid critical groundwork for the modern law of war. It was likewise a law professor whose work came to serve as both theoretical and practical justification for the sweeping powers of the Nazi state. So it should perhaps be unsurprising that, two decades of engagement …

The Reincorporation Of Prisoners Into The Body Politic: Eliminating The Medicaid Inmate Exclusion Policy, Mira K. Edmonds

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Incarcerated people are excluded from Medicaid coverage due to a provision in the Social Security Act Amendments of 1965 known as the Medicaid Inmate Exclusion Policy (“MIEP”). This Article argues for the elimination of the MIEP as an anachronistic remnant of an earlier era prior to the massive growth of the U.S. incarcerated population and the expansion of Medicaid eligibility under the Patient Protection and Affordable Care Act of 2010. It explores three reasons for eliminating the MIEP. First, the inclusion of incarcerated populations in Medicaid coverage would signify the final erasure from the Medicaid regime of the istinction between …

Equality And Sufficiency In Health Care Reform, Gabriel Scheffler

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Most Americans believe that health care is a right, not a privilege. Yet debates over health care reform frequently fail to distinguish between two distinct conceptions of the right to health care: one which focuses on sufficient access to health care-what I refer to as the Right to a Decent Minimum-and a second which focuses on equality in access to health care what I refer to as the Right to Equal Access. These two conceptions of the right to health care in turn support two distinct categories of proposals for expanding health insurance coverage. The Right to Equal Access justifies …

Prisons, Nursing Homes, And Medicaid: A Covid-19 Case Study In Health Injustice, Mary Crossley

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The unevenly distributed pain and suffering from the COVID-19 pandemic present a remarkable case study. Considering why the coronavirus has devastated some groups more than others offers a concrete example of abstract concepts like “structural discrimination” and “institutional racism,” an example measured in lives lost, families shattered, and unremitting anxiety. This essay highlights the experiences of Black people and disabled people, and how societal choices have caused them to experience the brunt of the pandemic. It focuses on prisons and nursing homes—institutions that emerged as COVID-19 hotspots –and on the Medicaid program.

Black and disabled people are disproportionately represented in …

Reform At Risk — Mandating Participation In Alternative Payment Plans, Scott Levy, Nicholas Bagley, Rahul Rajkumar

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In an ambitious effort to slow the growth of health care costs, the Affordable Care Act created the Center for Medicare and Medicaid Innovation (CMMI) and armed it with broad authority to test new approaches to reimbursement for health care (payment models) and delivery-system reforms. CMMI was meant to be the government’s innovation laboratory for health care: an entity with the independence to break with past practices and the power to experiment with bold new approaches. Over the past year, however, the Department of Health and Human Services (HHS) has quietly hobbled CMMI, imperiling its ability to generate meaningful data …

The Broken Medicare Appeals System: Failed Regulatory Solutions And The Promise Of Federal Litigation, Greer Donley

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The Medicare Appeals System is broken. For years, the System has been unable to accommodate a growing number of appeals. The result is a backlog so large that even if no new appeals were filed, it would take the System a decade or more to empty. Healthcare providers wait many years for their appeals to be heard before an Administrative Law Judge (ALJ), and because the government recoups providers' Medicare payments while they wait, the delays cause them serious financial harm. Even worse, providers are more likely than not to prevail before the ALJ, proving that the payment should never …

Small Change, Big Consequences — Partial Medicaid Expansions Under The Aca, Adrianna Mcintyre, Allan M. Joseph, Nicholas Bagley

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Though congressional efforts to repeal and replace the Affordable Care Act (ACA) seem to have stalled, the Trump administration retains broad executive authority to reshape the health care landscape. Perhaps the most consequential choices that the administration will make pertain to Medicaid, which today covers more than 1 in 5 Americans. Much has been made of proposals to introduce work requirements or cost sharing to the program. But another decision of arguably greater long-term significance has been overlooked: whether to allow “partial expansions” pursuant to a state Medicaid waiver. Arkansas has already submitted a waiver request for a partial expansion, …

In Defense Of The Restatement Of Liability Insurance Law, Tom Baker, Kyle D. Logue

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The importance of liability law to the American system of justice, and to the US economy in general, are well known. Somewhat less well known, at least among non-lawyers, is the corresponding centrality of liability insurance. For most non-contractual legal claims for damages that are brought against individuals or firms, there is some form of liability insurance coverage. Such coverage, provided by state-regulated insurance companies, ranges from auto and homeowners’ policies (sold to consumers throughout the country) to commercial general liability policies (sold to businesses of all sizes) to professional liability policies of various sorts (including Directors and Officers coverage …

Community Integration Of People With Disabilities: Can Olmstead Protect Against Retrenchment?, Mary Crossley

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Since the passage of the Americans with Disabilities Act (ADA) in 1990, states have made significant progress in enabling Americans with disabilities to live in their communities, rather than institutions. That progress reflects the combined effect of the Supreme Court’s holding in Olmstead v. L.C. ex rel. Zimring, that states’ failure to provide services to disabled persons in the community may violate the ADA, and amendments to Medicaid that permit states to devote funding to home and community-based services (HCBS). This article considers whether Olmstead and its progeny could act as a check on a potential retrenchment of states’ …

Black Health Matters: Disparities, Community Health, And Interest Convergence, Mary Crossley

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Health disparities represent a significant strand in the fabric of racial injustice in the United States, one that has proven exceptionally durable. Many millions of dollars have been invested in addressing racial disparities over the past three decades. Researchers have identified disparities, unpacked their causes, and tracked their trajectories, with only limited progress in narrowing the health gap between whites and racial and ethnic minorities. The implementation of the Affordable Care Act (ACA) and the movement toward value-based payment methods for health care may supply a new avenue for addressing disparities. This Article argues that the ACA’s requirement that tax-exempt …

Health And Taxes: Hospitals, Community Health And The Irs, Mary Crossley

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The Affordable Care Act created new conditions of federal tax exemption for nonprofit hospitals, including a requirement that hospitals conduct a community health needs assessment (CHNA) every three years to identify significant health needs in their communities and then to develop and implement a strategy responding to those needs. As a result, hospitals must now do more than provide charity care to their patients in exchange for the benefits of tax exemption, and the CHNA requirement has the potential both to prompt a radical change in hospitals’ relationship to their communities and to enlist hospitals as meaningful contributors to community …

Private Long-Term Care Insurance: Not The Solution To The High Cost Of Long-Term Care For The Elderly, Lawrence A. Frolik

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Long-term care can be extremely expensive. As older Americans plan for financing care for their golden years, one option is to purchase a Long-Term Care Insurance (LTCI) policy. However, despite the potentially steep costs of long-term care, few elderly individuals actually purchase LTCI. This decision is rational for most elderly people. First, LTCI insures a risk that may never occur, as the majority of elderly Americans only need a year or less of long-term care. Second, Medicaid provides a publicly subsidized alternative to LTCI. An elderly person can rely on his or her savings to pay for care and then …

Resilience And Raisins: Partial Takings And Coastal Climate Change Adaptation, Joshua Galperin, Zahir Hadi Tajani

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The increased need for government-driven coastal resilience projects will lead to a growing number of claims for “partial takings” of coastal property. Much attention has been paid to what actions constitute a partial taking, but there is less clarity about how to calculate just compensation for such takings, and when compensation should be offset by the value of benefits conferred to the property owner. While the U.S. Supreme Court has an analytically consistent line of cases on compensation for partial takings, it has repeatedly failed (most recently in Horne v. U.S. Department of Agriculture) to articulate a clear rule. The …

The Perverse Effects Of Subsidized Weather Insurance, Omri Ben-Shahar, Kyle D. Logue

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This Article explores the role of insurance as a substitute for direct regulation of risks posed by severe weather. In pricing the risk of human activity along the predicted path of storms, insurance can provide incentives for efficient location decisions as well as for cost-justified mitigation efforts in building construction and infrastructure. Currently, however, much insurance for severe-weather risks is provided and heavily subsidized by the government. This Article demonstrates two primary distortions arising from the government’s dominance in these insurance markets. First, existing government subsidies are allocated differentially across households, resulting in a significant regressive redistribution favoring affluent homeowners …

In Praise Of (Some) Ex Post Regulation: A Response To Professor Galle, Kyle D. Logue

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According to modern law-and-economics (“L&E”) orthodoxy, the primary—maybe even the only—legitimate justification for government regulation is to correct a market failure. This conclusion is based on two key assumptions. First, when markets are functioning reasonably well, they are better at achieving efficiency than the government is. Second, most markets function reasonably well most of the time. Although there is probably evidence to support these assumptions (for example, the relative prosperity of market-based economies in comparison with the relative poverty of centrally planned economies), both assumptions are usually taken as articles of faith by mainstream L&E scholars. This is why scholarly …

Encouraging Insurers To Regulate: The Role (If Any) For Tort Law, Kyle D. Logue

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Insurance companies are financially responsible for a substantial portion of the losses associated with risky activities in the economy. The more insurers can lower the risks posed by their insureds, the more competitively they can price their policies, and the more customers they can attract. Thus, competition forces insurers to be private regulators of risk. To that end, insurers deploy a range of techniques to encourage their insureds to reduce the risks of their insured activities, from charging experience-rated premiums to discounting premium rates for insureds who make specific behavioral changes designed to reduce risk. Somewhat paradoxically, however, tort law …

Three Words And The Future Of The Affordable Care Act, Nicholas Bagley

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As an essential part of its effort to achieve near universal coverage, the Affordable Care Act (ACA) extends sizable tax credits to most people who buy insurance on the newly established health care exchanges. Yet several lawsuits have been filed challenging the availability of those tax credits in the thirty-four states that refused to set up their own exchanges. The lawsuits are premised on a strained interpretation of the ACA that, if accepted, would make a hash of other provisions of the statute and undermine its effort to extend coverage to the uninsured. The courts should reject this latest effort …

The Unintended Effects Of Government-Subsidized Weather Insurance, Omri Ben-Shahar, Kyle D. Logue

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Catastrophes from severe weather are perhaps the costliest accidents humanity faces. While we are still a long way from technologies that would abate the destructive force of storms, there is much we can do to reduce their effect. True, we cannot regulate the weather, but through smart governance and correct incentives we can influence human exposure to the risk of bad weather. We may not be able to control wind or storm surge, but we can prompt people to build sturdier homes with stronger roofs far from floodplains. We call these catastrophes "natural disasters," but they are the result of …

No Good Options: Picking Up The Pieces After King V. Burwell, Nicholas Bagley, David K. Jones

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If the Supreme Court rules against the government in King v. Burwell, insurance subsidies available under the Affordable Care Act (ACA) will evaporate in the thirty-four states that have refused to establish their own health-care exchanges. The pain could be felt within weeks. Without subsidies, an estimated eight or nine million people stand to lose their health coverage. Because sicker people will retain coverage at a much higher rate than healthier people, insurance premiums in the individual market will surge by as much as fifty percent. Policymakers will come under intense pressure to mitigate the fallout from a government loss …

Predicting The Fallout From King V. Burwell - Exchanges And The Aca, Nicholas Bagley, David K. Jones, Timothy Stoltzfus Jost

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The U.S. Supreme Court's surprise announcement on November 7 that it would hear King v. Burwell struck fear in the hearts of supporters of the Affordable Cara Act (ACA). At stake is the legality of an Internal Revenue Service (IRS) rule extending tax credits to the 4.5 million people who bought their health plans in the 34 states that declined to establish their own health insurance exchanges under the ACA. The case hinges on enigmatic statutory language that seems to link the amount of tax credits to a health plan purchased "through an Exchange established by the State." According to …

Trial And Settlement: A Study Of High-Low Agreements, J. J. Prescott, Kathryn E. Spier, Albert Yoon

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This article presents the first systematic theoretical and empirical study of highlow agreements in civil litigation. A high-low agreement is a private contract that, if signed by litigants before trial, constrains any plaintiff’s recovery to a specified range. In our theoretical model, trial is both costly and risky. When litigants have divergent subjective beliefs and are mutually optimistic about their trial prospects, cases may fail to settle. In these cases, high-low agreements can be in litigants’ mutual interest because they limit the risk of outlier awards while still allowing mutually beneficial speculation. Using claims data from a national insurance company, …

Understanding Insurance Anti-Discrimination Laws, Ronen Avraham, Kyle D. Logue, Daniel Schwarcz

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Insurance companies are in the business of discrimination. Insurers attempt to segregate insureds into separate risk pools based on the differences in their risk profiles, first, so that different premiums can be charged to the different groups based on their differing risks and, second, to incentivize risk reduction by insureds. This is why we let insurers discriminate. There are limits, however, to the types of discrimination that are permissible for insurers. But what exactly are those limits and how are they justified? To answer these questions, this Article (a) articulates the leading fairness and efficiency arguments for and against limiting …