Risk Update

Conflicts Allegations Vague & Complex — Insurance Legal Clash & Conflicts, Monsanto Can’t DQ Judge for Mysteriously Construed Reasons

After $97 million med-mal verdict, doctors sue insurer for making them tort reform ‘pawns’” —

  • “The Iowa Supreme Court was supposed to hear oral arguments next week in the appeal of a record-setting $76 million medical malpractice judgment against an obstetrics and gynecology clinic accused of causing an infant’s severe brain injuries.”
  • “That appeal is now stayed amid a blitz of accusations and counterattacks, in both state and federal court, by the medical clinic and the company that provided its malpractice insurance. A case that began as a dispute over the tragic consequences of one infant’s birth has transformed into a high-stakes examination of an alleged conflict between the interests of a policyholder that allegedly wanted to settle and avoid trial and an insurance company that was dedicated to changing malpractice law.”
  • “The clinic at the center of the litigation, Obstetrics and Gynecological Associates of Iowa City and Coralville, had a $12 million malpractice insurance policy from MMIC Insurance, a subsidiary of Curi Holdings. Under the terms of the policy, MMIC led the clinic’s legal defense, hiring law firm Shuttleworth & Ingersoll to represent the clinic during the 2022 trial that resulted in a $97 million damages verdict for the family of the injured child. (The verdict was later reduced to a $75 million judgment.)”
  • “The clinic now contends in a state-court lawsuit that MMIC had an ulterior motive for refusing to settle the malpractice case: The insurer, which had spent years lobbying for Iowa to pass legislation capping noneconomic damages for medical malpractice victims, wanted to use the clinic and its doctors for its own “propaganda” purposes.”
  • “The clinic’s Nov. 21 complaint also named Shuttleworth & Ingersoll as a defendant, alleging that the law firm breached its fiduciary duty and committed malpractice by deferring to MMIC and refusing to engage in pretrial settlement talks with the plaintiffs in the malpractice case.”
  • “The insurer, meanwhile, has moved in federal court to enjoin the clinic’s new lawyer, Rowley, from representing the doctors and from engaging in settlement talks with lawyers for the injured child’s family. Alternatively, the insurer said, the court should order the clinic to pay back the $12 million policy proceeds it received from MMIC and should declare the clinic’s insurance contract to be void.”
  • “Rowley and his clients previously told the federal judge, in a filing last July, that MMIC was acting in bad faith and should be deemed to have lost the right to control the defense of the malpractice case. That filing — an answer to MMIC’s original federal-court complaint seeking an injunction to block Rowley from dismissing the Iowa Supreme Court appeal — presaged the clinic’s claim in its Nov. 21 lawsuit that MMIC had refused to settle the underlying malpractice case in order to capitalize on the doctors’ plight as it lobbied for Iowa to pass a cap on damages.”
  • “MMIC’s new motion for a preliminary injunction argued that Rowley and the clinic had done exactly what the insurer feared when it first filed the federal court suit, manufacturing a conflict for the Shuttleworth firm in order to seize control of the malpractice appeal from MMIC.”
  • “If anyone is conflicted, according to the insurer, it is Rowley, whom MMIC accused of colluding with the plaintiffs’ lawyer in the underlying case to sandbag the appeal. It’s all unquestionably a big mess to be unsorted by Rose and the Iowa judge who oversees the clinic’s case against MMIC and the Shuttleworth firm.”

Calif. Roundup Trial Kicks Off After Monsanto Loses Bid to Boot Judge” —

  • “Another Roundup trial started on Monday in California after Monsanto failed to disqualify the judge.”
  • “Jury selection began in San Benito County Superior Court, where Monsanto, now owned by Bayer, attempted to remove Judge Patrick Palacios from the trial. After Palacios rejected the disqualification motion, Monsanto filed a Nov. 29 petition for writ of mandate before California’s Sixth District Court of Appeal, insisting that ‘if this court does not immediately stay the case below and issue the requested writ of mandate, Monsanto will be forced to go to trial with a judge who Monsanto believes is prejudiced against it and one of its attorneys.'”
  • “‘Unless this court stays the case below, grants this writ, and reverses the Superior Court’s order, the trial in the matter below will proceed under the supervision of a judge who Monsanto and its counsel believe is prejudiced against them,’ wrote Monsanto attorney Shook, Hardy & Bacon partner Jessica Grant in the petition, which didn’t give specifics about the judge’s alleged bias.”
  • “‘Bayer believes that the California Court of Appeal for the 6th District should grant its petition for a writ, immediately stay the case, and ultimately reassign the Jones case to a new judge,’ Bayer said in a statement prior to the Sixth District Court of Appeal’s decision. ‘The company believes that the current judge is prejudiced against the company and one of its attorneys and should not preside over the trial. California law provides that peremptory challenge should be ‘liberally construed’ in favor of ensuring public trust in the courts.'”
  • “Last month, a jury in San Diego County Superior Court awarded $332 million in a Roundup trial. That verdict was one of four that hit Bayer in the past month, ending a streak of nine defense wins in a row. The others included awards of $1.25 million and $1.56 billion, in separate Missouri state courts, and a $175 million verdict in the Philadelphia Court of Common Pleas, where another trial is wrapping up on Monday.”
  • “In California, Bayer insisted that Palacios should be disqualified because he wasn’t an “all purpose” judge assigned to the case… ‘Specifically, Judge Palacios repeatedly emphasized over many months that he would not try this case,’ Grant wrote in Monsanto’s petition. ‘he advised that consistent with the practice of San Benito County Superior Court for long trials, this case would be assigned to a temporary or visiting judge for trial.'”
  • “‘The method of assigning cases did not instantly pinpoint Judge Palacios as the judge whom the parties could expect to ultimately preside at trial; and Judge Palacios himself repeatedly confirmed that he was not expected to process the case in its totality,’ she wrote.”