Wal-mart Scams Settlement from Injured Woman (Updated)

Via Bitch Ph.D. and hilzoy at Obsidian Wings comes a truly enraging story of unbridled corporate greed and the collusion between Big Business and the justice system that will curl your hair if it isn't already.

A collision with a semi-trailer truck seven years ago left 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, and three sons found a small source of solace: a $700,000 accident settlement from the trucking company involved. After legal fees and other expenses, the remaining $417,000 was put in a special trust. It was to be used for Mrs. Shank's care.

Instead, all of it is now slated to go to Mrs. Shank's former employer, Wal-Mart Stores Inc.

Two years ago, the retail giant's health plan sued the Shanks for the $470,000 it had spent on her medical care. A federal judge ruled last year in Wal-Mart's favor, backed by an appeals-court decision in August. Now, her family has to rely on Medicaid and Mrs. Shank's social-security payments to keep up her round-the-clock care.

***

The reason is a clause in Wal-Mart's health plan that Mrs. Shank didn't notice when she started stocking shelves at a nearby store eight years ago. Like most company health plans, Wal-Mart's reserves the right to recoup the medical expenses it paid for someone's treatment if the person also collects damages in an injury suit.

Until recently, many employers didn't vigilantly enforce the provision, and some states and federal courts didn't think the claim held water. But as the cost of covering workers continues to escalate, employers and health plans are getting more aggressive about going after the money. A Supreme Court ruling last year also has given them a clearer legal map to suing employees and winning.

(emphasis added)

Get that? The corporate/Bush SCOTUS, which usually acts as if it has never seen and never expects to see a situation in which it could or would find a corporate defendant guilty of anything, last year apparently gave companies a green light to steal back any money they might have to pay to settle a lawsuit in which they were at fault. They might have to steal it from a different person, but they get to take it back.

So, because businesses are becoming less concerned for their employees' safety and well-being, there are more being being hurt or even killed and therefore more lawsuits filed against the companies' negligence. Obligingly, the SCOTUS gives them a whole new avenue for recouping their losses - the insurance company.

But we're not done yet. District Court Judge Lewis Blanton, a Republican from Missouri and a Bush appointee, found in favor of Wal-mart despite the fact that the money Wal-mart wanted to grab was never intended to pay Shank's medical costs. From an earlier WSJ article via Wake-Up Wal-mart:

Mrs. Shank's own settlement was $700,000. After legal expenses and attorney fees, the remaining $417,477 was placed in a court-created special trust designed specifically for Mrs. Shank's future care. The Shanks' lawyer, Maurice Graham, wrote the Wal-Mart health plan informing them. Mrs. Shank had received no funds directly, he said, and therefore had nothing to pay Wal-Mart back.

Nearly three years went by, Mr. Shank says, before they heard again from Wal-Mart. Mrs. Shank struggled a year rotating in and out of the hospital and rehabilitation programs. She could no longer use her right arm or three fingers on her left hand because of neurological damage. She couldn't feed or dress herself and conversations with her family were limited to all but simple questions. Eventually, her husband moved her to a nursing home for around-the-clock care. Medicare and Medicaid pay for the nursing home. Mr. Shank used some of the trust's proceeds to continue paying a private aide to care for her there.

'A Decent Quality of Life'

"We wanted her to have a decent quality of life, and we still had the money," he says. He hoped he could also use it to pay the roughly $130,000 in bills for Mrs. Shank's rehabilitation and a return hospital visit after her coverage expired.

But in August 2005, Wal-Mart re-emerged with a lawsuit against the Shanks demanding repayment for $469,216 in medical costs out of their settlement. It charged that the Shanks had violated the terms of the health plan by not reimbursing it. The company also demanded payment of legal fees and interest for the cost of suing the Shanks for the money.

Mr. Graham, the Shanks' attorney, says he approached Wal-Mart's attorneys about negotiating a compromise, but was told the health plan wanted to proceed with the lawsuit. "We're not contending that Wal-Mart isn't entitled to a payment. We're saying they're entitled to one based on equity," he says. Since Mrs. Shank wasn't fully compensated for her damages in the first place, he argues, Wal-Mart should also expect only partial reimbursement.

(emphasis added)

They don't, of course. This is Wal-mart. THEY WANT IT ALL.

Any legitimate legal reading of the insurance clause and the trial transcript would have given a normal judge ample reason to find for Shanks. There was NO evidence of double-dipping by the Shanks or a double payment by Wal-mart, therefore WM didn't have a legal leg to stand on. But in the corporate-owned Federal courts, set up by Bush who loaded them with people who make decisions based on narrow right-wing ideology rather than settled law, a Lewis Blanton can feel perfectly free to reverse both law and common sense in order to hand Mrs. Shanks' future over to her one-time insurance company.

This is a breach of justice - not to mention fairness - so extreme as to be indefensible, yet it is the kind of decision Bush-appointed judges make every day without batting so much as an eyelash. Corporate America bought the GOP at least in part so it could use them to control Federal courts by making sure that corporate-friendly judges were appointed and unfriendly ones rejected. The result is a system where legal decisions are more often guided by corporate interests than by public law.

Something else the Democrats probably won't get around to fixing, what with them being so tied to corporate $$$ themselves.

Updated 4/02/08: Wal-Mart just announced it's backing off its lawsuit. An acre of bad publicity convinced them it wasn't worth pursuing, and now Shanks doesn't have to pay back the money she didn't owe in the first place.

I don't know who to give the credit to, the media or the blogs that made the stink (of which we were a teensy, tiny part), but who ever deserves it, it's important to know you can still win one against the Great Satan.